Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Feb. 22, 2018 | Jun. 30, 2017 | |
Document and Entity Information | |||
Entity Registrant Name | BROADWIND ENERGY, INC. | ||
Entity Central Index Key | 1,120,370 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2017 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Smaller Reporting Company | ||
Entity Public Float | $ 50,551,000 | ||
Entity Common Stock, Shares Outstanding | 15,206,362 | ||
Document Fiscal Year Focus | 2,017 | ||
Document Fiscal Period Focus | FY |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
CURRENT ASSETS: | ||
Cash and cash equivalents | $ 78 | $ 18,699 |
Short-term investments | 0 | 3,171 |
Restricted cash | 39 | |
Accounts receivable, net | 13,644 | 11,865 |
Inventories, net | 19,279 | 21,159 |
Prepaid expenses and other current assets | 1,798 | 2,449 |
Current assets held for sale | 580 | 808 |
Total current assets | 35,379 | 58,190 |
LONG-TERM ASSETS: | ||
Property and equipment, net | 55,693 | 54,606 |
Goodwill | 4,993 | |
Other intangible assets, net | 16,078 | 4,572 |
Other assets | 207 | 294 |
TOTAL ASSETS | 112,350 | 117,662 |
CURRENT LIABILITIES: | ||
Line of credit, NMTC and other notes payable | 14,138 | |
Current maturities of long-term debt | 114 | |
Current portions of capital lease obligations | 762 | 465 |
Accounts payable | 11,756 | 15,852 |
Accrued liabilities | 4,393 | 8,430 |
Customer deposits | 9,791 | 18,011 |
Current liabilities held for sale | 30 | 493 |
Total current liabilities | 40,984 | 43,251 |
LONG-TERM LIABILITIES: | ||
Long-term debt, net of current maturities | 797 | 2,600 |
Long-term capital lease obligations, net of current portions | 941 | 1,038 |
Other | 3,557 | 2,190 |
Total long-term liabilities | 5,295 | 5,828 |
COMMITMENTS AND CONTINGENCIES | ||
STOCKHOLDERS' EQUITY: | ||
Preferred stock, $0.001 par value; 10,000,000 shares authorized; no shares issued or outstanding | ||
Common stock, $0.001 par value; 30,000,000 shares authorized; 15,480,299 and 15,175,767 shares issued as of December 31, 2017, and December 31, 2016, respectively | 15 | 15 |
Treasury stock, at cost, 273,937 shares as of December 31, 2017 and December 31, 2016 | (1,842) | (1,842) |
Additional paid-in capital | 380,005 | 378,876 |
Accumulated deficit | (312,107) | (308,466) |
Total stockholders' equity | 66,071 | 68,583 |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ 112,350 | $ 117,662 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Dec. 31, 2017 | Dec. 31, 2016 |
CONDENSED CONSOLIDATED BALANCE SHEETS | ||
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 30,000,000 | 30,000,000 |
Common stock, shares issued | 15,480,299 | 15,175,767 |
Treasury stock, common shares | 273,937 | 273,937 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | ||
Revenues | $ 146,785 | $ 180,840 |
Cost of sales | 138,626 | 162,701 |
Gross profit | 8,159 | 18,139 |
OPERATING EXPENSES: | ||
Selling, general and administrative | 13,828 | 15,786 |
Intangible amortization | 1,764 | 444 |
Total operating expenses | 15,592 | 16,230 |
Operating (loss) income | (7,433) | 1,909 |
OTHER (EXPENSE) INCOME, net: | ||
Interest expense, net | (798) | (625) |
Other, net | 3 | 49 |
Total other expense, net | (795) | (576) |
Net (loss) income before benefit for income taxes | (8,228) | 1,333 |
Benefit for income taxes | (5,045) | (2) |
(LOSS) INCOME FROM CONTINUING OPERATIONS | (3,183) | 1,335 |
LOSS FROM DISCONTINUED OPERATIONS | (458) | (1,016) |
NET (LOSS) INCOME | $ (3,641) | $ 319 |
NET (LOSS) INCOME PER COMMON SHARE—BASIC: | ||
(Loss) income from continuing operations (in dollars per share) | $ (0.21) | $ 0.09 |
Loss from discontinued operations (in dollars per share) | (0.03) | (0.07) |
Net (loss) income (in dollars per share) | $ (0.24) | $ 0.02 |
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING-BASIC (in shares) | 15,053,000 | 14,843,000 |
NET (LOSS) INCOME PER COMMON SHARE-DILUTED: | ||
(Loss) income from continuing operations (in dollars per share) | $ (0.21) | $ 0.09 |
Loss from discontinued operations (in dollars per share) | (0.03) | (0.07) |
Net (loss) income (in dollars per share) | $ (0.24) | $ 0.02 |
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING-DILUTED (in shares) | 15,053,000 | 15,081,000 |
CONDENSED CONSOLIDATED STATEME5
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY - USD ($) $ in Thousands | Common Stock | Treasury Stock | Additional Paid-in Capital | Accumulated Deficit | Total |
Balance at Dec. 31, 2015 | $ 15 | $ (1,842) | $ 378,104 | $ (308,785) | $ 67,492 |
Balance (in shares) at Dec. 31, 2015 | 15,012,789 | (273,937) | |||
Increase (Decrease) in Stockholders' Equity | |||||
Stock issued for restricted stock (in shares) | 157,331 | ||||
Stock issued under stock option plans | 19 | 19 | |||
Stock issued under stock option plans (in shares) | 5,647 | ||||
Share-based compensation | 753 | 753 | |||
Net income | 319 | 319 | |||
Balance at Dec. 31, 2016 | $ 15 | $ (1,842) | 378,876 | (308,466) | $ 68,583 |
Balance (in shares) at Dec. 31, 2016 | 15,175,767 | (273,937) | 15,175,767 | ||
Increase (Decrease) in Stockholders' Equity | |||||
Stock issued for restricted stock (in shares) | 190,482 | ||||
Stock issued under defined contribution 401(k) retirement savings plan | 316 | $ 316 | |||
Stock issued under defined contribution 401(k) retirement savings plan (in shares) | 114,050 | ||||
Share-based compensation | 813 | 813 | |||
Net income | (3,641) | (3,641) | |||
Balance at Dec. 31, 2017 | $ 15 | $ (1,842) | $ 380,005 | $ (312,107) | $ 66,071 |
Balance (in shares) at Dec. 31, 2017 | 15,480,299 | (273,937) | 15,480,299 |
CONDENSED CONSOLIDATED STATEME6
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS $ in Thousands | 12 Months Ended | |
Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net (loss) income | $ (3,641) | $ 319 |
Loss from discontinued operations | (458) | (1,016) |
(Loss) income from continuing operations | (3,183) | 1,335 |
Adjustments to reconcile net cash (used in) provided by operating activities: | ||
Depreciation and amortization expense | 8,999 | 6,914 |
Deferred income taxes | (5,045) | |
Impairment charges | 80 | |
Remeasurement of contingent consideration | (1,394) | |
Stock-based compensation | 813 | 753 |
Allowance for doubtful accounts | 37 | 61 |
Common stock issued under defined contribution 401(k) plan | 316 | |
Gain on disposal of assets | (12) | (217) |
Changes in operating assets and liabilities, net of acquisition: | ||
Accounts receivable | 884 | (2,141) |
Inventories | 7,057 | 3,060 |
Prepaid expenses and other current assets | 651 | (933) |
Accounts payable | (5,287) | 989 |
Accrued liabilities | (4,921) | 297 |
Customer deposits | (8,219) | 8,057 |
Other non-current assets and liabilities | (126) | (875) |
Net cash (used in) provided by operating activities of continuing operations | (9,350) | 17,300 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Cash paid in acquisition | (16,449) | |
Purchases of available for sale securities | (19,223) | |
Sales of available for sale securities | 2,221 | 13,061 |
Maturities of available for sale securities | 950 | 9,170 |
Purchases of property and equipment | (6,688) | (6,624) |
Proceeds from disposals of property and equipment | 72 | 452 |
Net cash used in investing activities of continuing operations | (19,894) | (3,164) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Net proceeds from issuance of stock | 19 | |
Proceeds from line of credit and notes payable | 158,856 | |
Payments on line of credit and notes payable | (148,009) | |
Net proceeds on long-term debt | (2,799) | |
Net proceeds on long-term debt | 457 | |
Principal payments on capital leases | (644) | (539) |
Net cash provided by (used in) financing activities of continuing operations | 10,660 | (3,319) |
DISCONTINUED OPERATIONS: | ||
Operating cash flows | (78) | 731 |
Investing cash flows | 0 | 615 |
Financing cash flows | 0 | 58 |
Net cash (used in) provided by discontinued operations | (78) | 1,404 |
Add: Cash balance of discontinued operations, beginning of period | 2 | 2 |
Less: Cash balance of discontinued operations, end of period | 2 | |
NET (DECREASE) INCREASE IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH | (18,660) | 12,219 |
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH beginning of the period | 18,738 | 6,519 |
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH end of the period | 78 | 18,738 |
Supplemental cash flow information: | ||
Interest paid | 585 | 494 |
Income taxes paid | 44 | 23 |
Non-cash activities: | ||
Issuance of restricted stock grants | 813 | 753 |
Equipment addition via capital lease | 844 | $ 1,616 |
Contingent consideration related to business acquisition | 2,534 | |
Red Wolf acquisition: | ||
Assets acquired | 26,602 | |
Liabilities assumed | $ 7,619 |
DESCRIPTION OF BUSINESS AND SUM
DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2017 | |
DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 1. DESCRIPTION OF BUSINESS Description of Business Broadwind Energy, Inc. (the “Company”) provides technologically advanced high‑value products to energy, mining and infrastructure sector customers, primarily in the United States of America (the “U.S.”). The Company’s most significant presence is within the U.S. wind energy industry, although the Company has diversified into other industrial markets. Within the U.S. wind energy industry, the Company provides products primarily to turbine manufacturers. The Company also provides precision gearing and specialty weldments to a broad range of industrial customers for oil and gas (“O&G”), mining, steel and other industrial applications. The Company has three reportable operating segments: Towers and Heavy Fabrications, Gearing, and Process Systems. Towers and Heavy Fabrications The Company manufactures towers for wind turbines, specifically the large and heavier wind towers that are designed for multiple megawatt (“MW”) wind turbines. Production facilities, located in Manitowoc, Wisconsin and Abilene, Texas, are situated in close proximity to the primary U.S. domestic wind energy and equipment manufacturing hubs. The two facilities have a combined annual tower production capacity of up to approximately 550 towers, sufficient to support turbines generating more than 1,100 MW of power. This product segment also encompasses the manufacture of specialty fabrications and specialty weldments for mining and other industrial customers. In the fourth quarter 2017, the segment changed its name from Towers and Weldments to Towers and Heavy Fabrications to more accurately reflect the nature of the business’ activities. Gearing The Company engineers, builds and remanufactures precision gears and gearing systems for O&G, wind energy, mining, steel and other industrial applications. The Company uses an integrated manufacturing process, which includes machining and finishing processes in Cicero, Illinois, and heat treatment in Neville Island, Pennsylvania. Process Systems On February 1, 2017, the Company acquired Red Wolf Company, LLC (“Red Wolf”), a Sanford, North Carolina-based, privately held fabricator, kitter and assembler of industrial systems primarily supporting the global natural gas turbine (“NGT”) market, and as a result, aggregated its Abilene compressed natural gas (“CNG”) and fabrication business with Red Wolf to form the Process Systems reportable segment. This segment provides contract manufacturing services that include build-to-spec, kitting, fabrication and inventory management for customers throughout the U.S. and in foreign countries, primarily supporting the natural gas turbine power generation market. Liquidity The Company meets its short term liquidity needs through cash generated from operations, through its available cash balances and through the Company’s $25,000 three-year secured revolving line of credit (the “Credit Facility”) with CIBC Bank USA (“CIBC”), formally known as The PrivateBank and Trust Company. The Company uses the Credit Facility from time to time to fund working capital requirements, and believes the Credit Facility, together with the operating cash generated by the business, will be sufficient to meet its cash obligations for the next twelve months. On October 26, 2016, the Company established the Credit Facility. Under the terms of the Credit Facility, CIBC will advance funds when requested against a borrowing base consisting of up to 85% of the face value of the Company’s eligible accounts receivable (“A/R”), up to 50% of the book value of the Company’s eligible inventory and up to 50% of the appraised value of the Company’s eligible machinery, equipment and certain real property up to $10,000. Under the Credit Facility, borrowings are continuous and all cash receipts are automatically applied to the outstanding borrowed balance. As of December 31, 2017, cash and cash equivalents and short-term investments totaled $78, a decrease of $21,792 from December 31, 2016, and $10,733 was outstanding under the Credit Facility. The Company had the ability to borrow up to $11,796 under the Credit Facility as of December 31, 2017. On January 29, 2018, the Company executed the Third Amendment to Loan and Security Agreement (the “Third Amendment”), which waived the Fixed Charge Coverage Ratio Covenant as of December 31, 2017 and, among other changes, added new minimum EBITDA and capital expenditure covenants through June 30, 2018. The amendment also revised the Fixed Charge Coverage Ratio Covenant to be recalculated for future periods commencing with the quarter ending June 30, 2018. The decrease in cash and cash equivalents as of December 31, 2017, when compared to levels at December 31, 2016, was primarily due to the Red Wolf acquisition which is discussed in Note 21 “Business Combinations”. Debt and capital lease obligations at December 31, 2017 totaled $16,752, which includes current outstanding debt totaling $15,014 over the next twelve months. The current outstanding debt includes $10,733 outstanding under the Credit Facility and $2,600 related to the New Market Tax Credit Transaction (the “NMTC Transaction”). See Note 18 “New Markets Tax Credit Transaction” of these consolidated financial statements for a complete description of the NMTC Transaction. On August 11, 2017, the Company filed a “shelf” registration statement on Form S-3, which was declared effective by the SEC on October 10, 2017 (the “Broadwind Form S-3”). This shelf registration statement, which includes a base prospectus, allows the Company at any time to offer any combination of securities described in the prospectus in one or more offerings. Unless otherwise specified in the prospectus supplement accompanying the Company’s base prospectus, the Company would use the net proceeds from the sale of any securities offered pursuant to the shelf registration statement for general corporate purposes. The Company anticipates that current cash resources, amounts available under the Credit Facility, cash to be generated from operations, additional equipment financing, and any potential proceeds from access to the public or private debt or equity markets, including the option to raise capital under the Broadwind Form S-3, will be adequate to meet the Company’s liquidity needs for at least the next twelve months. If assumptions regarding the Company’s production, sales and subsequent collections from several of the Company’s large customers, as well as customer deposits and revenues generated from new customer orders, are materially inconsistent with management’s expectations, the Company may in the future encounter cash flow and liquidity issues. If the Company’s operational performance deteriorates significantly, it may be unable to comply with existing financial covenants, and could lose access to the Credit Facility. This could limit the Company’s operational flexibility or require a delay in making planned investments. Any additional equity financing, if available, may be dilutive to stockholders, and additional debt financing, if available, would likely require new financial covenants or impose other restrictions on the Company. While the Company believes that it will continue to have sufficient cash available to operate its businesses and to meet its financial obligations and debt covenants, there can be no assurances that its operations will generate sufficient cash, or that credit facilities will be available in an amount sufficient to enable the Company to meet these financial obligations. Summary of Significant Accounting Policies Principles of Consolidation and Basis of Presentation These consolidated financial statements include the accounts of the Company and entities in which it has a controlling financial interest. All significant intercompany transactions and balances have been eliminated in consolidation. The Company determines whether it has a controlling financial interest in an entity by first evaluating whether the entity is a voting interest entity or a variable interest entity (“VIE”). When the Company obtains an economic interest in an entity, the Company evaluates the entity to determine if the entity is deemed a VIE, and if the Company is deemed to be the primary beneficiary, in accordance with the accounting standard for the consolidation of VIE’s. The accounting standard for the consolidation of VIE’s requires the Company to qualitatively assess if the Company was the primary beneficiary of the VIE based on whether the Company had (i) the power to direct those matters that most significantly impacted the activities of the VIE and (ii) the obligation to absorb losses or the right to receive benefits of the VIE that could potentially be significant. Refer to Note 18, “New Markets Tax Credit Transaction” of these consolidated financial statements for a description of two VIE’s included in the Company’s consolidated financial statements. Management’s Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the U.S. (“GAAP”) requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent liabilities as of the date of the financial statements and reported amounts of revenues and expenses during the reported period. Significant estimates, among others, include revenue recognition, future tax rates, inventory reserves, warranty reserves, impairment of long-lived assets, allowance for doubtful accounts, workers’ compensation reserves, health insurance reserves, and environmental reserves. Although these estimates are based upon management’s best knowledge of current events and actions that the Company may undertake in the future, actual results could differ from these estimates. The Company changed an accounting estimate as of the beginning of 2016 to increase the salvage value of selected large machinery and equipment in the Gearing segment to reflect the estimated sale value of the used machinery market. The impact during the year-ended December 31, 2016 was a reduction of depreciation expense of $2,481. Cash and Cash Equivalents and Short‑Term Investments Cash and cash equivalents typically comprise cash balances and readily marketable investments with original maturities of three months or less, such as money market funds, short‑term government bonds, Treasury bills, marketable securities and commercial paper. Marketable investments with original maturities between three and twelve months are recorded as short‑term investments. The Company’s treasury policy is to invest excess cash in money market funds or other investments, which are generally of a short‑term duration based upon operating requirements. Income earned on these investments is recorded to interest income in the Company’s consolidated statements of operations. As of December 31, 2017 and December 31, 2016, cash and cash equivalents totaled $78 and $18,699, respectively, and short‑term investments totaled $0 and $3,171, respectively. For the years ended December 31, 2017 and 2016, interest income was $5 and $48, respectively. Revenue Recognition The Company recognizes revenue when the earnings process is complete and when persuasive evidence of an arrangement exists, transfer of title has occurred or services have been rendered, the selling price is fixed or determinable, collectability is reasonably assured and delivery has occurred per the terms of the contract. Customer deposits, deferred revenue and other receipts are deferred and recognized when the revenue is realized and earned. Cash payments to customers are presumed to be classified as reductions of revenue in the Company’s statement of operations. In most instances within the Company’s Towers and Heavy Fabrications segment, products are sold under terms included in bill and hold sales arrangements that result in different timing for revenue recognition. The Company recognizes revenue under these arrangements only when the buyer requests the arrangement, a fixed schedule for delivery exists, the ordered goods are segregated from inventory and not available to fill other orders and the goods are complete and ready for shipment. Assuming these required revenue recognition criteria are met, revenue is recognized upon completion of product manufacture and customer acceptance. The Company will adopt the provisions of Accounting Standards Codification (“ASC”) 606, Revenue from Contracts with Customers, for the fiscal year beginning January 1, 2018 and will be electing the modified retrospective approach. Through the Company’s assessment of the ASC 606, the Company has determined there are minimal changes to the assumptions currently utilized for the year ending December 31, 2017 and the adoption of the guidance will not result in a material impact on the Company’s consolidated financial statements. Cost of Sales Cost of sales represents all direct and indirect costs associated with the production of products for sale to customers. These costs include operation, repair and maintenance of equipment, materials, direct and indirect labor and benefit costs, rent and utilities, maintenance, insurance, equipment rentals, freight in and depreciation. Selling, General and Administrative Expenses Selling, general and administrative (“SG&A”) expenses include all corporate and administrative functions such as sales and marketing, legal, human resource management, finance, investor and public relations, information technology and senior management. These functions serve to support the Company’s current and future operations and provide an infrastructure to support future growth. Major expense items in this category include management and staff wages and benefits, share‑based compensation and professional services. Accounts Receivable (A/R) The Company generally grants uncollateralized credit to customers on an individual basis based upon the customer’s financial condition and credit history. Credit is typically on net 30 day terms and customer deposits are frequently required at various stages of the production process to minimize credit risk. Historically, the Company’s A/R is highly concentrated with a select number of customers. During the year ended December 31, 2017, the Company’s five largest customers accounted for 85% of its consolidated revenues and 57% of outstanding A/R balances, compared to the year ended December 31, 2016 when the Company’s five largest customers accounted for 91% of its consolidated revenues and 86% of its outstanding A/R balances. Allowance for Doubtful Accounts Based upon past experience and judgment, the Company establishes an allowance for doubtful accounts with respect to A/R. The Company’s standard allowance estimation methodology considers a number of factors that, based on its collections experience, the Company believes will have an impact on its credit risk and the realizability of its A/R. These factors include individual customer circumstances, history with the Company and other relevant criteria. A/R balances that remain outstanding after the Company has exhausted reasonable collection efforts are written off through a charge to the valuation allowance and a credit to A/R. The Company monitors its collections and write‑off experience to assess whether or not adjustments to its allowance estimates are necessary. Changes in trends in any of the factors that the Company believes may impact the realizability of its A/R, as noted above, or modifications to the Company’s credit standards, collection practices and other related policies may impact its allowance for doubtful accounts and its financial results. Bad debt expense for the years ended December 31, 2017 and 2016 was $80 and $65, respectively. Inventories Inventories are stated at the lower of cost or market and net realizable value. Cost is determined either based on the first‑in, first‑out (“FIFO”) method, or on a standard cost basis that approximates the FIFO method. Market is determined based on net realizable value. Any excess of cost over market value is included in the Company’s inventory allowance. Market value of inventory, and management’s judgment of the need for reserves, encompasses consideration of other business factors including physical condition, inventory holding period, contract terms and usefulness. Inventories consist of raw materials, work‑in‑process and finished goods. Raw materials consist of components and parts for general production use. Work‑in‑process consists of labor and overhead, processing costs, purchased subcomponents and materials purchased for specific customer orders. Finished goods consist of components purchased from third parties as well as components manufactured by the Company that will be used to produce final customer products. Long-Lived Assets Property and equipment are stated at cost less accumulated depreciation and amortization. Depreciation and amortization of property and equipment is recognized using the straight‑line method over the estimated useful lives of the related assets for financial reporting purposes, and generally using an accelerated method for income tax reporting purposes. Depreciation expense related to property and equipment for the years ended December 31, 2017 and 2016 was $7,235 and $6,471, respectively. Expenditures for additions and improvements are capitalized, while replacements, maintenance and repairs that do not improve or extend the useful lives of the respective assets are expensed as incurred. The Company has in the past capitalized interest costs incurred on indebtedness used to construct property and equipment. Capitalized interest is recorded as part of the asset to which it relates and is amortized over the asset’s estimated useful life. There was no interest cost capitalized during the years ended December 31, 2017 or 2016. Property or equipment sold or disposed of is removed from the respective property accounts, with any corresponding gains and losses recorded within operating income (loss) in the Company’s consolidated statement of operations. The Company reviews property and equipment and other long‑lived assets (“long-lived assets”) for impairment whenever events or circumstances indicate that carrying amounts may not be recoverable. In evaluating the recoverability of long-lived assets, the Company utilizes a fair value technique accepted by ASC 820, Fair Value Measurement, which is the asset accumulation approach. If the fair value of the asset group is less than the carrying amount, the Company recognizes an impairment loss. In evaluating the recoverability of long‑lived assets, the Company must make assumptions regarding estimated future cash flows and other factors to determine the fair value of such assets. If the Company’s fair value estimates or related assumptions change in the future, the Company may be required to record impairment charges related to property and equipment and other long‑lived assets. Asset recoverability is first measured by comparing the assets’ carrying amounts to their expected future undiscounted net cash flows to determine if the assets are impaired. If such assets are considered to be impaired, the impairment recognized is measured based on the amount by which the carrying amount of the assets exceeds the fair value. To the extent the assumptions used in the Company’s analysis are not achieved, there may be a negative effect on the valuation of these assets. Goodwill The Company reviews goodwill for impairment on an annual basis in accordance with ASC 350, Intangibles- Goodwill and Other. In evaluating the goodwill, the Company must make assumptions regarding the discounted future cash flows of the acquired company. If the discounted cash flows are less than the carrying value, the Company then determines if an impairment loss is recognized by comparing the fair value to the carrying value of the acquired company. Warranty Liability The Company provides warranty terms that generally range from one to five years for various products and services relating to workmanship and materials supplied by the Company. In certain contracts, the Company has recourse provisions for items that would enable the Company to pursue recovery from third parties for amounts paid to customers under warranty provisions. Warranty liability is recorded in accrued liabilities within the consolidated balance sheet. The Company estimates the warranty accrual based on various factors, including historical warranty costs, current trends, product mix and sales. The changes in the carrying amount of the Company’s total product warranty liability for the years ended December 31, 2017 and 2016 were as follows, excluding activity related to the discontinued Services segment: As of December 31, 2017 2016 Balance, beginning of period $ 671 $ 601 Addition to (reduction of) warranty reserve (28) 83 Warranty claims (62) (13) Balance, end of period $ 581 $ 671 Income Taxes The Company accounts for income taxes based upon an asset and liability approach. Deferred tax assets and liabilities represent the future tax consequences of the differences between the financial statement carrying amounts of assets and liabilities versus the tax basis of assets and liabilities. Under this method, deferred tax assets are recognized for deductible temporary differences, and operating loss and tax credit carryforwards. Deferred tax liabilities are recognized for taxable temporary differences. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. The impact of tax rate changes on deferred tax assets and liabilities is recognized in the year that the change is enacted. In connection with the preparation of its consolidated financial statements, the Company is required to estimate its income tax liability for each of the tax jurisdictions in which the Company operates. This process involves estimating the Company’s actual current income tax expense and assessing temporary differences resulting from differing treatment of certain income or expense items for income tax reporting and financial reporting purposes. The Company also recognizes as deferred income tax assets the expected future income tax benefits of net operating loss (“NOL”) carryforwards. In evaluating the realizability of deferred income tax assets associated with NOL carryforwards, the Company considers, among other things, expected future taxable income, the expected timing of the reversals of existing temporary reporting differences and the expected impact of tax planning strategies that may be implemented to prevent the potential loss of future income tax benefits. Changes in, among other things, income tax legislation, statutory income tax rates or future taxable income levels could materially impact the Company’s valuation of income tax assets and liabilities and could cause its income tax provision to vary significantly among financial reporting periods. On December 22, 2017, the U.S. government enacted comprehensive tax legislation commonly referred to as the Tax Cuts and Jobs Act (the “Tax Act”). The Tax Act makes broad and complex changes to the U.S. tax code, including, but not limited to, (1) reducing the U.S. federal corporate tax rate; (2) eliminating the corporate alternative minimum tax; (3) creating a new limitation on deductible interest expense; and (4) changing rules related to uses and limitations of net operating loss carryforwards created in tax years beginning after December 31, 2017. The Company also accounts for the uncertainty in income taxes related to the recognition and measurement of a tax position taken or expected to be taken in an income tax return. The Company follows the applicable pronouncement guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition related to the uncertainty in these income tax positions. Share‑Based Compensation The Company grants incentive stock options, restricted stock units (“RSUs”) and/or performance awards (“PSUs”) to certain officers, directors, and employees. The Company accounts for share‑based compensation related to these awards based on the estimated fair value of the equity award and recognizes expense ratably over the required vesting term of the award. The expense associated with PSUs is also based on the probability of achieving embedded targets. See Note 15 “Share‑Based Compensation” of these consolidated financial statements for further discussion of the Company’s share‑based compensation plans, the nature of share‑based awards issued and the Company’s accounting for share‑based compensation. Net Income (Loss) Per Share The Company presents both basic and diluted net income (loss) per share. Basic net income (loss) per share is based solely upon the weighted average number of common shares outstanding and excludes any dilutive effects of options, warrants and convertible securities. Diluted net income (loss) per share is based upon the weighted average number of common shares and common‑share equivalents outstanding during the year excluding those common‑share equivalents where the impact to basic net income (loss) per share would be anti‑dilutive. |
EARNINGS PER SHARE
EARNINGS PER SHARE | 12 Months Ended |
Dec. 31, 2017 | |
EARNINGS PER SHARE | |
EARNINGS PER SHARE | 2. EARNINGS PER SHARE The following table presents a reconciliation of basic and diluted earnings per share for the years ended December 31, 2017 and 2016 as follows: For the Years Ended December 31, 2017 2016 Basic earnings per share calculation: Net (loss) income $ (3,641) $ 319 Weighted average number of common shares outstanding 15,053 14,843 Basic net (loss) income per share $ (0.24) $ 0.02 Diluted earnings per share calculation: Net (loss) income $ (3,641) $ 319 Weighted average number of common shares outstanding 15,053 14,843 Common stock equivalents: Stock options and non-vested stock awards (1) — 238 Weighted average number of common shares outstanding 15,053 15,081 Diluted net (loss) income per share $ (0.24) $ 0.02 (1) Stock options and RSUs granted and outstanding of 579,330 as of December 31, 2017 are excluded from the computation of diluted earnings due to the anti‑dilutive effect as a result of the Company’s net loss for the year ended December 31, 2017. |
DISCONTINUED OPERATIONS
DISCONTINUED OPERATIONS | 12 Months Ended |
Dec. 31, 2017 | |
DISCONTINUED OPERATIONS | |
DISCONTINUED OPERATIONS | 3. DISCONTINUED OPERATIONS The Company’s former Services segment had substantial continued operating losses for several years, due to low capacity utilization in our gearbox remanufacturing facility and an increasingly competitive environment for field services due in part to increased in-sourcing of service functions by customers. In July, 2015 the Company’s Board of Directors (the “Board”) directed management to evaluate potential strategic alternatives with respect to the Services segment. In September 2015 the Board authorized management to sell substantially all of the assets of the Services segment to one or more third-party purchasers, and thereafter to liquidate or otherwise dispose of any such assets remaining unsold. The Company began negotiations to sell substantially all the assets of the Services segment in the third quarter of 2015. The exit of this business was a strategic shift that had a major effect on the Company; therefore, the Company reclassified the related assets and liabilities of the Services segment as held for sale, which the divestiture was substantially completed in December 2015. In addition, the Company recorded an asset impairment charges to reduce the carrying value of the net assets held for sale to their estimated fair value. The impairment charge and loss on sale is included in “Loss before benefit for income taxes” in “Results of Discontinued Operations.” Results of Discontinued Operations Results of operations associated with the Services segment, which are reflected as discontinued operations in the Company’s consolidated statements of income for the twelve months ended December 31, 2017 and 2016, were as follows: Year Ended December 31, 2017 2016 Revenues $ 151 $ 109 Cost of sales (391) (1,006) Selling, general and administrative (57) (69) Interest expense, net — (5) Impairment of held for sale assets and liabilities and gain on sale of assets (161) (45) Loss from discontinued operations $ (458) $ (1,016) The Company was notified of one warranty claim in 2017, which resulted in an additional $139 of warranty expense; the warranty claim was resolved prior to the end of 2017. In 2016, the Company was also notified of two warranty claims, which resulted in an additional $427 of warranty expense recorded; both of the warranty claims were resolved prior to the end of 2016. The Company’s residual warranty exposure will expire by October 2019. Assets and Liabilities Held for Sale Assets and liabilities classified as held for sale in the Company’s consolidated balance sheets as of December 31, 2017 and 2016 include the following: December 31, December 31, 2017 2016 Assets: Accounts receivable, net $ 11 $ 172 Inventories, net 9 807 Prepaid expenses and other current assets — 55 Assets Held For Sale Related To Discontinued Operations 20 1,034 Impairment of discontinued assets held for sale — (579) Total Assets Held For Sale Related To Discontinued Operations $ 20 $ 455 Liabilities: Accounts payable $ — $ 22 Accrued liabilities 27 121 Customer deposits and other current obligations 3 3 Other long-term liabilities — 3 Total Liabilities Held For Sale Related To Discontinued Operations $ 30 $ 149 |
RECENT ACCOUNTING PRONOUNCEMENT
RECENT ACCOUNTING PRONOUNCEMENTS | 12 Months Ended |
Dec. 31, 2017 | |
RECENT ACCOUNTING PRONOUNCEMENTS | |
RECENT ACCOUNTING PRONOUNCEMENTS | 4. RECENT ACCOUNTING PRONOUNCEMENTS The Company reviews new accounting standards as issued. Although some of the accounting standards issued or effective in the current fiscal year may be applicable to it, the Company believes that none of the new standards have a significant impact on its consolidated financial statements, except as discussed below. In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2014-09, Revenue from Contracts with Customers, which amends the guidance in former Accounting Standards Codification Topic 605, Revenue Recognition, and provides a single, comprehensive revenue recognition model for all contracts with customers. This standard contains principles that an entity will apply to determine the measurement of revenue and timing of when it is recognized. The entity will recognize revenue to reflect the transfer of goods or services to customers at an amount that the entity expects to be entitled to in exchange for those goods or services. This ASU permits companies to either apply the requirements retrospectively to all prior periods presented, or apply the requirement in the year of adoption, through a cumulative adjustment. In August 2015, the FASB issued ASU 2015-14, Revenue from Contracts with Customers (Topic 606) Deferral of the Effective Date, which amends the previously issued ASU to provide for a one year deferral from the original effective date. This ASU is effective for public business entities for annual reporting periods beginning after December 15, 2017, including interim periods within those reporting periods. Early adoption is permitted for annual reporting periods beginning on or after December 15, 2016, including interim periods within that annual period. The Company adopted the provisions of ASU 2014-09 and ASU 2015-14 for the fiscal year beginning January 1, 2018 and has elected the modified retrospective approach. The Company has assessed the impact of adoption on its material revenue streams, evaluated the new disclosure requirements, and identified and implemented appropriate changes to its business processes, systems and controls to support recognition and disclosure under the new guidance. Based on completing the assessment, the Company has determined that the adoption of the guidance will not result in a material impact on its consolidated financial statements. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), which is intended to improve financial reporting about leasing transactions. This ASU will require organizations (“lessees”) that lease assets with lease terms of more than twelve months to recognize on the balance sheet the assets and liabilities for the rights and obligations created by those leases. Organizations that own the assets leased by lessees (“lessors”) will remain largely unchanged from current guidance. In addition, this ASU will require disclosures to help investors and other financial statement users better understand the amount, timing and uncertainty of cash flows arising from leases. This ASU will be effective for annual reporting periods beginning after December 15, 2018 and interim periods within those fiscal years, with early adoption permitted. The Company is currently evaluating the impact of this ASU on its consolidated financial statements through creating a multi-phase plan to assess the Company’s leases based on the modified definitions within this ASU, evaluate the new disclosure requirements, and identify and implement appropriate changes to its business processes, systems and controls to support the accounting and disclosure requirements under the new guidance. In January 2017, the FASB issued ASU 2017-01, Business Combinations (Topic 805), which clarifies the definition of a business. The amendments in this ASU provide a screen to determine when a set (group of assets and activities) is not a business. The screen requires that when substantially all of the fair value of the gross assets acquired (or disposed of) is concentrated in a single identifiable asset or a group of similar identifiable assets, the set is not a business. This screen reduces the number of transactions that need to be further evaluated. If the screen is not met, the amendments in this ASU (1) require that to be considered a business, a set must include, at a minimum, an input and a substantive process that together significantly contribute to the ability to create output and (2) remove the evaluation of whether a market participant could replace missing elements. This ASU will be effective for annual reporting periods beginning after December 15, 2017 and interim periods within those fiscal years, with early adoption permitted under special circumstances. The Company is currently evaluating the impact of this ASU on its consolidated financial statements. In January 2017, the FASB issued ASU 2017-04, Intangibles – Goodwill and Other (Topic 350), which simplifies the test for goodwill impairment. To simplify the subsequent measurement of goodwill, the FASB eliminated Step 2, which compares the implied fair value of reporting unit goodwill with the carrying amount of that goodwill, from the goodwill impairment test. Under the amendments in this ASU, an entity should perform its annual, or interim, goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. An entity should recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. The FASB also eliminated the requirements for any reporting unit with a zero or negative carrying amount to perform a qualitative assessment and, if it fails that qualitative test, to perform Step 2 of the goodwill impairment test. This ASU will be effective for annual reporting periods beginning after December 15, 2019 and interim periods within those fiscal years, with early adoption permitted. The Company is currently evaluating the impact of this ASU on its consolidated financial statements. |
CASH AND CASH EQUIVALENTS AND S
CASH AND CASH EQUIVALENTS AND SHORT-TERM INVESTMENTS | 12 Months Ended |
Dec. 31, 2017 | |
CASH AND CASH EQUIVALENTS AND SHORT-TERM INVESTMENTS | |
CASH AND CASH EQUIVALENTS AND SHORT-TERM INVESTMENTS | 5. CASH AND CASH EQUIVALENTS AND SHORT‑TERM INVESTMENTS The components of cash and cash equivalents and short‑term investments as of December 31, 2017 and 2016 are summarized as follows: As of December 31, 2017 2016 Cash and cash equivalents: Cash $ 78 $ 16,821 Money market funds — 1,878 Total cash and cash equivalents 78 18,699 Short-term investments (available-for-sale): Corporate & municipal bonds — 3,171 Total cash and cash equivalents and short-term investments $ 78 $ 21,870 Due to the acquisition of Red Wolf during 2017, the Company moved into a net debt position. Under the structure of the Credit Facility, all cash proceeds are applied routinely to pay down the credit line, which has minimized the Company’s cash balance. |
ALLOWANCE FOR DOUBTFUL ACCOUNTS
ALLOWANCE FOR DOUBTFUL ACCOUNTS | 12 Months Ended |
Dec. 31, 2017 | |
ALLOWANCE FOR DOUBTFUL ACCOUNTS | |
ALLOWANCE FOR DOUBTFUL ACCOUNTS | 6. ALLOWANCE FOR DOUBTFUL ACCOUNTS The activity in the A/R allowance from operations for the years ended December 31, 2017 and 2016 consists of the following: For the Years Ended December 31, 2017 2016 Balance at beginning of period $ 145 $ 84 Bad debt expense 80 65 Other adjustments — (4) Balance at end of period $ 225 $ 145 |
INVENTORIES
INVENTORIES | 12 Months Ended |
Dec. 31, 2017 | |
INVENTORIES | |
INVENTORIES | 7. INVENTORIES The components of inventories from operations as of December 31, 2017 and 2016 are summarized as follows: As of December 31, 2017 2016 Raw materials $ 11,945 $ 14,174 Work-in-process 6,305 5,321 Finished goods 3,538 3,342 21,788 22,837 Less: Reserve for excess and obsolete inventory (2,509) (1,678) Net inventories $ 19,279 $ 21,159 |
LONG-LIVED ASSETS
LONG-LIVED ASSETS | 12 Months Ended |
Dec. 31, 2017 | |
LONG-LIVED ASSETS | |
LONG-LIVED ASSETS | 8. LONG-LIVED ASSETS The cost basis and estimated lives of property and equipment from continuing operations as of December 31, 2017 and 2016 are as follows: As of December 31, 2017 2016 Life Land $ 1,423 $ 1,982 Buildings 22,998 20,874 39 years Machinery and equipment 103,878 98,656 2 - 10 years Office furniture and equipment 4,202 3,648 3 - 7 years Leasehold improvements 9,095 8,720 Asset life or life of lease Construction in progress 4,138 6,089 145,734 139,969 Less accumulated depreciation and amortization (90,041) (85,363) Total property and equipment $ 55,693 $ 54,606 As of December 31, 2017 and December 31, 2016, the Company had commitments of $132 and $1,220, respectively, related to the completion of projects within construction in progress. As a result of the Red Wolf acquisition, the Company added $4,993 of goodwill, which is included in the Process Systems segment. See Note 16, “Segment Reporting” for further discussion of the Company’s segments. Goodwill represents the excess of the purchase price over the fair value of assets acquired, including identifiable intangibles and liabilities as part of the Company’s acquisition of Red Wolf. Goodwill is not amortized but is tested annually for impairment. Other intangible assets represent the fair value assigned to definite-lived assets such as trade names and customer relationships as part of the Company’s acquisition of Brad Foote completed in 2007 as well as the noncompetition agreements, trade names and customer relationships that were part of the Company’s acquisition of Red Wolf. See Note 21, “Business Combinations” of these consolidated financial statements for further discussion of the Red Wolf acquisition. Other intangible assets are amortized on a straight-line basis over their estimated useful lives, with a remaining life range from 5 to 11 years. As of December 31, 2017 and 2016, the cost basis, accumulated amortization and net book value of intangible assets were as follows: December 31, 2017 December 31, 2016 Remaining Remaining Weighted Weighted Net Average Net Average Accumulated Book Amortization Accumulated Book Amortization Cost Amortization Value Period Cost Amortization Value Period Goodwill and other intangible assets: Goodwill $ 4,993 $ — $ 4,993 $ — $ — $ — Noncompete agreements 144 — — — Customer relationships 15,979 (4,992) 10,987 8.0 3,979 (3,726) 253 5.8 Trade names 9,099 (4,152) 4,947 10.5 7,999 (3,680) 4,319 10.8 Other intangible assets $ 25,248 $ (9,170) $ 16,078 8.8 $ 11,978 $ (7,406) $ 4,572 10.5 Intangible assets are amortized on a straight‑line basis over their estimated useful lives, which range from 6 to 20 years. Amortization expense was $1,764 and $444 for the years ended December 31, 2017 and 2016, respectively. As of December 31, 2017, estimated future amortization expense is as follows: 2018 $ 1,884 2019 1,884 2020 1,884 2021 1,884 2022 1,884 2023 and thereafter 6,658 Total $ 16,078 During 2017 and 2016, the Company continued to experience triggering events associated with the Gearing segment’s current period operating losses combined with its history of continued operating losses. As a result, the Company evaluated the recoverability of certain of its long‑lived assets associated with the Gearing segment. Based upon the Company’s December 31, 2017 and 2016 impairment assessment, the Company utilized third-party appraisals and other estimates of the fair value of the Gearing asset group. The Company assumed that the assets would be exchanged in an orderly transaction between market participants and would represent the highest and best use of these assets. Based on the analysis, the Company determined that no impairment to the asset group was indicated as of December 31, 2017 or 2016. With the Red Wolf acquisition, the Company recorded goodwill associated with the transaction. In accordance with ASC 350, the Company elected to perform the review of goodwill for impairment on an annual basis during the fourth quarter of the Company’s fiscal year. Based on the discounted cash flows calculation utilizing three weighted average scenarios and a 19.5% discount rate, the Company determined the fair value of the goodwill is in excess of carrying value, and no impairment was indicated as of December 31, 2017. |
ACCRUED LIABILITIES
ACCRUED LIABILITIES | 12 Months Ended |
Dec. 31, 2017 | |
ACCRUED LIABILITIES | |
ACCRUED LIABILITIES | 9. ACCRUED LIABILITIES Accrued liabilities as of December 31, 2017 and 2016 consisted of the following: December 31, 2017 2016 Accrued payroll and benefits $ 1,797 $ 4,422 Accrued property taxes 144 99 Income taxes payable 77 127 Accrued professional fees 40 236 Accrued warranty liability 581 671 Accrued regulatory settlement — 500 Accrued environmental reserve — 1,241 Accrued self-insurance reserve 812 909 Accrued other 942 225 Total accrued liabilities $ 4,393 $ 8,430 |
DEBT AND CREDIT AGREEMENTS
DEBT AND CREDIT AGREEMENTS | 12 Months Ended |
Dec. 31, 2017 | |
DEBT AND CREDIT AGREEMENTS | |
DEBT AND CREDIT AGREEMENTS | 10. DEBT AND CREDIT AGREEMENTS The Company’s outstanding debt balances as of December 31, 2017 and 2016 consisted of the following: December 31, 2017 2016 Line of credit and other notes payable $ 11,879 $ — NMTC note payable 2,600 2,600 Long-term debt 570 — Less: Current portion (14,252) — Long-term debt, net of current maturities $ 797 $ 2,600 As of December 31, 2017, future annual principal payments on the Company’s outstanding debt obligations were as follows: 2018 $ 14,252 2019 367 2020 202 2021 114 2022 114 Total $ 15,049 Credit Facilities On October 26, 2016, the Company established the Credit Facility with CIBC Bank USA (“CIBC”), formerly known as The PrivateBank and Trust Company. Under the Credit Facility, CIBC advances funds when requested against a borrowing base consisting of up to 85% of the face value of the Company’s eligible A/R, up to 50% of the book value of eligible inventory and up to 50% of the appraised value of eligible machinery, equipment and certain real property up to $10,000. Borrowings under the Credit Facility bear interest at a per annum rate equal to the applicable LIBOR plus a margin ranging from 2.25% to 3.00%, or the applicable base rate plus a margin ranging from 0.00% to 1.00%, both of which are based on the trailing twelve-month EBITDA. The Company also pays an unused facility fee to CIBC equal to 0.50% per annum on the unused portion of the Credit Facility, along with other standard fees. The Credit Facility contains customary representations and warranties. It also contains a requirement that the Company, on a consolidated basis, maintain a Fixed Charge Coverage Ratio Covenant, along with other customary restrictive covenants. The obligations under the Credit Facility are secured by, subject to certain exclusions, (i) a first priority security interest in all accounts receivable, inventory, equipment, cash and investment property, and (ii) a mortgage on the Abilene, Texas tower facility. On February 10, 2017, a First Amendment to Loan and Security Agreement and Joinder to Loan and Security Agreement were executed to add Red Wolf as a borrower under the Credit Facility. On March 27, 2017, the parties executed a Second Amendment to Loan and Security Agreement and an Amended and Restated Revolving Note to increase the amount of the Credit Facility to $25,000. On January 29, 2018, the Company executed the Third Amendment to Loan and Security Agreement (the “Third Amendment”), waiving our non-compliance with the Fixed Charge Coverage Ratio Covenant as of December 31, 2017 and, among other changes, added new minimum EBITDA and capital expenditure covenants through June 30, 2018. The amendment also revised the Fixed Charge Coverage Ratio Covenant to be recalculated for future periods commencing with the quarter ending June 30, 2018. As of December 31, 2017, there was $10,733 outstanding under the Credit Facility. The Company had the ability to borrow up to $11,796 under the Credit Facility as of December 31, 2017. Other Included in Line of Credit, NMTC and other notes payable line item of the Company’s consolidated financial statements is $2,600 associated with the NMTC transaction described further in Note 18, “New Markets Tax Credit Transaction” of these consolidated financial statements. As of December, 31, 2016, this was included in Long-Term Debt, Net of Current Maturities. The Company has entered into a $570 loan agreement with the Development Corporation of Abilene, of which $114 is included in Current maturities, long-term debt in the consolidated financial statements and $456 is included in Long-term debt, less current maturities. The loan is forgivable upon the Company meeting and maintaining specific employment thresholds. In addition, the Company has outstanding notes payable for capital expenditures in the amount of $1,146, with $804 included in the Line of Credit, NMTC and other notes payable line item. The equipment purchased is utilized as collateral for the notes payable. Of the outstanding notes payable, one matures on March 31, 2018 and the other matures on April 25, 2020. |
LEASES
LEASES | 12 Months Ended |
Dec. 31, 2017 | |
LEASES | |
LEASES | 11. LEASES The Company leases various property and equipment under operating lease arrangements. Lease terms generally range from 3 to 15 years with renewal options for extended terms. Certain leases contain rent escalation clauses that require additional rental payments in the later years of the term. Rent expense for these types of leases is recognized on a straight‑line basis over the minimum lease term. Any lease concessions received by the Company are deferred and recognized as an adjustment to rent expense ratably over the minimum lease term. The Company is required to make additional payments under certain property leases for taxes, insurance and other operating expenses incurred during the operating lease period. Rental expense for the years ended December 31, 2017 and 2016 was $3,378 and $2,996, respectively. In addition, the Company has entered into capital lease arrangements to finance property and equipment and assumed capital lease obligations in connection with certain acquisitions. The cost basis and accumulated depreciation of assets recorded under capital leases, which are included in property and equipment, are as follows as of December 31, 2017 and 2016: December 31, 2017 2016 Cost $ 2,460 $ 1,616 Accumulated depreciation (424) (129) Net book value $ 2,036 $ 1,487 Depreciation expense recorded in connection with assets recorded under capital leases was $295 and $273 for the years ended December 31, 2017 and 2016, respectively. As of December 31, 2017, future minimum lease payments under capital leases and operating leases were as follows: Capital Operating Leases Leases Total 2018 $ 826 $ 3,438 $ 4,264 2019 825 3,368 4,193 2020 144 2,695 2,839 2021 — 2,267 2,267 2022 — 2,270 2,270 2023 and thereafter — 8,460 8,460 Total $ 1,795 $ 22,498 $ 24,293 Less—portion representing interest at a weighted average annual rate of 5.0% (92) Principal 1,703 Less—current portion (762) Capital lease obligations, noncurrent portion $ 941 |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Dec. 31, 2017 | |
COMMITMENTS AND CONTINGENCIES | |
COMMITMENTS AND CONTINGENCIES | 12. COMMITMENTS AND CONTINGENCIES Legal Proceedings From time to time, the Company is subject to legal proceedings or claims that arise in the ordinary course of its business. The Company accrues for costs related to loss contingencies when such costs are probable and reasonably estimable. As of December 31, 2017, the Company is not aware of any material pending legal proceedings or threatened litigation that would have a material adverse effect on the Company’s results of operations, financial condition or cash flows, although no assurance can be given with respect to the ultimate outcome of pending actions. Refer to Note 20, “Legal Proceedings” of these consolidated financial statements for further discussion of legal proceedings. Environmental Compliance and Remediation Liabilities The Company’s operations and products are subject to a variety of environmental laws and regulations in the jurisdictions in which the Company operates and sells products governing, among other things, air emissions, wastewater discharges, the use, handling and disposal of hazardous materials, soil and groundwater contamination, employee health and safety, and product content, performance and packaging. Also, certain environmental laws can impose the entire cost or a portion of the cost of investigating and cleaning up a contaminated site, regardless of fault, upon any one or more of a number of parties, including the current or previous owners or operators of the site. These environmental laws also impose liability on any person who arranges for the disposal or treatment of hazardous substances at a contaminated site. Third parties may also make claims against owners or operators of sites and users of disposal sites for personal injuries and property damage associated with releases of hazardous substances from those sites. In connection with the Company’s restructuring initiatives, during the third quarter of 2012, the Company identified a liability associated with the planned sale of one of the Company’s facilities located in Cicero, Illinois (the “Cicero Avenue Facility”). The liability is associated with environmental remediation costs that were identified while preparing the site for sale. During 2013, the Company applied for and was accepted into the Illinois Environmental Protection Agency (“IEPA”) voluntary site remediation program. In the first quarter of 2014, the Company completed a comprehensive review of remedial options for the Cicero Avenue Facility and selected a preferred remediation technology. As part of the voluntary site remediation program, the Company submitted a plan to the IEPA for approval to conduct a pilot study to test the effectiveness of the selected remediation technology. In the third quarter of 2015, the Company obtained additional information regarding potential remediation options and modified the remediation plan, which caused an increase in the estimated cost of remediation and resulted in the Company increasing its reserve associated with this matter by $874. In the fourth quarter of 2017, the Company remediated the Cicero Avenue Facility to a point that requires the known future use to complete the final remediation steps and is currently in active negotiations to dispose of the property. As of December 31, 2017, the accrual balance associated with this matter totaled $0. Collateral In select instances, the Company has pledged specific inventory and machinery and equipment assets to serve as collateral on related payable or financing obligations. Warranty Liability The Company provides warranty terms that generally range from one to five years for various products and services relating to workmanship and materials supplied by the Company. In certain contracts, the Company has recourse provisions for items that would enable the Company to pursue recovery from third parties for amounts paid to customers under warranty provisions. Liquidated Damages In certain customer contracts, the Company has agreed to pay liquidated damages in the event of qualifying delivery or production delays. These damages are typically limited to a specific percentage of the value of the product in question and dependent on actual losses sustained by the customer. When the damages are determined to be probable and estimable, the damages are recorded as a reduction to revenue. During 2017, the Company incurred no liquidated damages and there was no reserve for liquidated damages as of December 31, 2017. Workers’ Compensation Reserves As of December 31, 2017 and 2016, respectively, the Company had $812 and $909 accrued for self‑insured workers’ compensation liabilities. At the beginning of the third quarter of 2013, the Company began to self‑insure for its workers’ compensation liabilities, including reserves for self‑retained losses. Although the ultimate outcome of these matters may exceed the amounts recorded and additional losses may be incurred, the Company does not believe that any additional potential exposure for such liabilities will have a material adverse effect on the Company’s consolidated financial position or results of operations. Other As of December 31, 2017, approximately 24% of the Company’s employees were covered by two collective bargaining agreements with local unions at the Company’s Cicero, Illinois and Neville Island, Pennsylvania locations. The current three-year collective bargaining agreement with the Neville Island union is expected to remain in effect through October 2022. The collective bargaining agreement with the Cicero union expired in February 2018; the parties are currently negotiating a new collective bargaining agreement. See Note 18, “New Markets Tax Credit Transaction” of these consolidated financial statements for a discussion of a strategic financing transaction (the “NMTC Transaction”) which originally related to the Company’s drivetrain service center in in Abilene, Texas (the “Abilene Gearbox Facility”), and was amended in August 2015 to also include the activities of the Company’s heavy industries business conducted in the same building in Abilene, Texas (the “Abilene Heavy Industries Facility”). The Abilene Heavy Industries Facility focuses on Heavy Fabrications for industries including those related to compressed natural gas distribution. Pursuant to the NMTC Transaction, the gross loan and investment in the Abilene Heavy Industries Facility and the Abilene Gearbox Facility of $10,000 is expected to generate $3,900 in tax credits over a period of seven years, which the NMTC Transaction makes available to Capital One, National Association (“Capital One”). The Abilene Heavy Industries Facility and/or the Abilene Gearbox Facility must operate and be in compliance with the terms and conditions of the NMTC Transaction during the seven year compliance period, or the Company may be liable for the recapture of $3,900 in tax credits to which Capital One is otherwise entitled. The Company does not anticipate any credit recaptures will be required in connection with the NMTC Transaction. |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 12 Months Ended |
Dec. 31, 2017 | |
FAIR VALUE MEASUREMENTS | |
FAIR VALUE MEASUREMENTS | 13. FAIR VALUE MEASUREMENTS The Company measures its financial assets and liabilities at fair value. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (i.e., exit price) in an orderly transaction between market participants at the measurement date. Additionally, the Company is required to provide disclosure and categorize assets and liabilities measured at fair value into one of three different levels depending on the assumptions (i.e., inputs) used in the valuation. Level 1 provides the most reliable measure of fair value while Level 3 generally requires significant management judgment. Financial assets and liabilities are classified in their entirety based on the lowest level of input significant to the fair value measurement. Financial instruments are assessed quarterly to determine the appropriate classification within the fair value hierarchy. Transfers between fair value classifications are made based upon the nature and type of the observable inputs. The fair value hierarchy is defined as follows: Level 1 — Valuations are based on unadjusted quoted prices in active markets for identical assets or liabilities. Level 2 — Valuations are based on quoted prices for similar assets or liabilities in active markets, or quoted prices in markets that are not active for which significant inputs are observable, either directly or indirectly. For the Company’s corporate and municipal bonds, although quoted prices are available and used to value said assets, they are traded less frequently. Level 3 — Valuations are based on prices or valuation techniques that require inputs that are both unobservable and significant to the overall fair value measurement. Inputs reflect management’s best estimate of what market participants would use in valuing the asset or liability at the measurement date. The Company used market negotiations to value the Gearing segments assets. The following tables represent the fair values of the Company’s financial assets measured as of December 31, 2017 and 2016: December 31, 2017 Level 1 Level 2 Level 3 Total Assets measured on a nonrecurring basis: Gearing Cicero Ave. facility $ — $ — $ 560 $ 560 Services assets — — 20 20 Total assets at fair value $ — $ — $ 580 $ 580 December 31, 2016 Level 1 Level 2 Level 3 Total Assets measured on a recurring basis: Corporate & municipal bonds and money market funds $ — $ 5,049 $ — $ 5,049 Assets measured on a nonrecurring basis: Gearing equipment — — 353 353 Gearing Cicero Ave. facility — — 560 560 Services assets — — 455 455 Total assets at fair value $ — $ 5,049 $ 1,368 $ 6,417 Fair value of financial instruments The carrying amounts of the Company’s financial instruments, which include cash and cash equivalents, restricted cash, A/R, accounts payable and customer deposits, approximate their respective fair values due to the relatively short-term nature of these instruments. Based upon interest rates currently available to the Company for debt with similar terms, the carrying value of the Company’s long-term debt is approximately equal to its fair value. Assets measured at fair value on a nonrecurring basis The fair value measurement approach for long lived assets utilizes a number of significant unobservable inputs or Level 3 assumptions. To the extent assumptions used in the Company’s evaluations are not achieved, there may be a negative effect on the valuation of these assets. The investment in select Gearing segment equipment, shown as $353 at December 31, 2016, is associated with the Company’s activities to update and consolidate the Gearing segment asset base. The reduction in the carrying value to $0 at December 31, 2017, reflects the sale of the surplus assets. The carrying value of the land and building comprising the Cicero Avenue Facility of $560 reflects the expected proceeds associated with selling this facility. During 2017, the Company reclassified the Cicero Avenue Facility as Assets Held for Sale upon completion of general site remediation activities. See Note 12, “Commitments and Contingencies” of these consolidated financial statements for additional detail of the Cicero Avenue Facility. Following the Board’s approval of a plan to divest the Company’s Services segment, the Company has been able to evaluate the value of the segment’s assets on the open market; therefore, the Company has utilized this measurement to determine the fair value of the Services segment assets. |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2017 | |
INCOME TAXES | |
INCOME TAXES | 14. INCOME TAXES The provision for income taxes for the years ended December 31, 2017 and 2016 consists of the following: For the Years Ended December 31, 2017 2016 Current provision Federal $ — $ — Foreign — — State 5 (2) Total current benefit 5 (2) Deferred credit Federal 31,614 487 State 468 5,226 Total deferred credit 32,082 5,713 Decrease in deferred tax valuation allowance (37,132) (5,713) Total benefit for income taxes $ (5,045) $ (2) On December 22, 2017, the U.S. government enacted comprehensive tax legislation commonly referred to as the Tax Cuts and Jobs Act (the “Tax Act”). The Tax Act makes broad and complex changes to the U.S. tax code, including, but not limited to, (1) reducing the U.S. federal corporate tax rate; (2) eliminating the corporate alternative minimum tax; (3) creating a new limitation on deductible interest expense; and (4) changing rules related to uses and limitations of net operating loss carryforwards created in tax years beginning after December 31, 2017. With the Tax Act, the Securities and Exchange Commission issued guidance under Staff Accounting Bulletin No. 118, Income Tax Accounting Implications of the Tax Cuts and Jobs Act (“SAB 118”) directing taxpayers to consider the impact of the U.S. legislation as “provisional” when it does not have the necessary information, prepared or analyzed in reasonable detail to complete its accounting for the change in tax law. The Tax Act reduces the corporate tax rate to 21 percent, effective January 1, 2018. Consequently, we have recorded a decrease related to net deferred tax assets for this federal rate change of $34,372. This decrease to the deferred tax assets was fully offset by the same decrease to the valuation allowance. There is no impact on the current year income tax expense for the federal corporate tax rate change due to the Company’s current year taxable loss and the calculation related to the change is complete. During the year ended December 31, 2017, the Company recorded a benefit for income taxes of $5,045, compared to a benefit for income taxes of $2 during the year ended December 31, 2016. The income tax benefit during the year ended December 31, 2017 included an income tax benefit of $5,060 from the partial release of the valuation allowance, net of Red Wolf’s current state taxes, resulting from the consolidation of the Company’s deferred tax assets with Red Wolf’s deferred tax liabilities upon acquisition. The total decrease in the deferred tax valuation allowance was $37,132 and $5,713 for the years ended December 31, 2017 and 2016, respectively. The changes in the deferred tax valuation allowances in 2017 and 2016 were primarily the result of decreases to the deferred tax assets pertaining to federal and state NOLs. Beginning on January 1, 2018, NOLs have unlimited life carryforward. The tax effects of the temporary differences and NOLs that give rise to significant portions of deferred tax assets and liabilities are as follows: As of December 31, 2017 2016 Noncurrent deferred income tax assets: Net operating loss carryforwards $ 56,619 $ 79,966 Intangible assets 6,889 19,021 Accrual and reserves 2,402 5,201 Other 88 52 Total noncurrent deferred tax assets 65,998 104,240 Valuation allowance (66,491) (103,623) Noncurrent deferred tax assets, net of valuation allowance (493) 617 Noncurrent deferred income tax liabilities: Fixed assets (152) (617) Intangible assets — — Total noncurrent deferred tax liabilities (152) (617) Net deferred income tax liability $ (341) $ — Valuation allowances of $66,491 and $103,623 have been provided for deferred income tax assets for which realization is uncertain as of December 31, 2017 and 2016, respectively. A reconciliation of the beginning and ending amounts of the valuation is as follows: Valuation allowance as of December 31, 2016 $ (103,623) Gross decrease for current year activity 37,132 Valuation allowance as of December 31, 2017 $ (66,491) As of December 31, 2017, the Company had federal NOL carryforwards of approximately $227,871 expiring in various years through 2037. The majority of the NOL carryforwards will expire in various years from 2028 through 2037. As of December 31, 2017, the Company had unapportioned state NOLs in the aggregate of approximately $227,871, expiring in various years from 2021 through 2037, based upon various NOL carryforward periods as designated by the different taxing jurisdictions. The reconciliation between the statutory U.S. federal income tax rate and the Company’s effective income tax rate is as follows: For the Year Ended December 31, 2017 2016 Statutory U.S. federal income tax rate 34.0 % 34.0 % State and local income taxes, net of federal income tax benefit 3.4 34.4 Permanent differences (1.2) 12.7 Change in valuation allowance 446.7 (68.8) Change in uncertain tax positions 0.5 (14.8) Other 0.1 1.8 Effect of U.S. tax rate change (422.6) — Effective income tax rate 60.9 % (0.7) % The Company accounts for the uncertainty in income taxes by prescribing a minimum recognition threshold for a tax position taken, or expected to be taken, in a tax return that is required to be met before being recognized in the financial statements. The changes in the Company’s uncertain income tax positions for the years ended December 31, 2017 and 2016 consisted of the following: For the Year Ended December 31, 2017 2016 Beginning balance $ 27 $ 56 Tax positions related to current year: Additions — — Reductions — — — — Tax positions related to prior years: Additions — — Reductions — — Settlements — — Lapses in statutes of limitations (26) (29) Additions from current year acquisitions — — (26) (29) Ending balance $ 1 $ 27 The amount of unrecognized tax benefits at December 31, 2017 that would affect the effective tax rate if the tax benefits were recognized was $1. It is the Company’s policy to include interest and penalties in tax expense. During the years ended December 31, 2017 and 2016, the Company recognized and accrued approximately $0 and $6, respectively, of interest and penalties. The Company files income tax returns in the U.S. federal and state jurisdictions. As of December 31, 2017, open tax years in the federal and some state jurisdictions date back to 1996 due to the taxing authorities’ ability to adjust NOL carryforwards. The Company’s 2008 and 2009 federal tax returns were examined in 2011 and no material adjustments were identified related to any of the Company’s tax positions. Although these periods have been audited, they continue to remain open until all NOLs generated in those tax years have either been utilized or expire. Section 382 of the Internal Revenue Code of 1986, as amended (the “IRC”), generally imposes an annual limitation on the amount of NOL carryforwards and associated built‑in losses that may be used to offset taxable income when a corporation has undergone certain changes in stock ownership. The Company’s ability to utilize NOL carryforwards and built‑in losses may be limited, under this section or otherwise, by the Company’s issuance of common stock or by other changes in stock ownership. Upon completion of the Company’s analysis of IRC Section 382, the Company has determined that aggregate changes in stock ownership have an annual limitation of $14,284 on NOLs and built‑in losses available for utilization based on the triggering event in 2010. To the extent the Company’s use of NOL carryforwards and associated built‑in losses is significantly limited in the future due to additional changes in stock ownership, the Company’s income could be subject to U.S. corporate income tax earlier than it would if the Company were able to use NOL carryforwards and built‑in losses without such annual limitation, which could result in lower profits and the loss of benefits from these attributes. In February 2013, the Company adopted a Stockholder Rights Plan, which was amended in February 2016 and approved by our stockholders (as amended, the “Rights Plan”), designed to preserve the Company’s substantial tax assets associated with NOL carryforwards under IRC Section 382. The Rights Plan is intended to act as a deterrent to any person or group, together with its affiliates and associates, being or becoming the beneficial owner of 4.9% or more of the Company’s common stock and thereby triggering a further limitation of the Company’s available NOL carryforwards. In connection with the adoption of the Rights Plan, the Board declared a non‑taxable dividend of one preferred share purchase right (a “Right”) for each outstanding share of the Company’s common stock to the Company’s stockholders of record as of the close of business on February 22, 2013. Each Right entitles its holder to purchase from the Company one one‑thousandth of a share of the Company’s Series A Junior Participating Preferred Stock at an exercise price of $9.81 per Right, subject to adjustment. As a result of the Rights Plan, any person or group that acquires beneficial ownership of 4.9% or more of the Company’s common stock without the approval of the Board would be subject to significant dilution in the ownership interest of that person or group. Stockholders who owned 4.9% or more of the outstanding shares of the Company’s common stock as of February 12, 2013 will not trigger the preferred share purchase rights unless they acquire additional shares after that date. As of December 31, 2017, the Company had $1 of unrecognized tax benefits, which would have a favorable impact on income tax expense. It is reasonably possible that unrecognized tax benefits will decrease by that amount as a result of the expiration of the applicable statutes of limitations within the next twelve months. The Company recognizes interest and penalties related to uncertain tax positions as income tax expense. The Company had accrued interest and penalties of $1 as of December 31, 2017. As of December 31, 2016, the Company had unrecognized tax benefits of $69, of which $42 represented accrued interest and penalties. |
SHARE-BASED COMPENSATION
SHARE-BASED COMPENSATION | 12 Months Ended |
Dec. 31, 2017 | |
SHARE-BASED COMPENSATION | |
SHARE-BASED COMPENSATION | 15. SHARE‑BASED COMPENSATION Overview of Share‑Based Compensation Plan 2007 Equity Incentive Plan The Company has granted incentive stock options and other equity awards pursuant to the Amended and Restated Broadwind Energy, Inc. 2007 Equity Incentive Plan (the “2007 EIP”), which was approved by the Board in October 2007 and by the Company’s stockholders in June 2008. The 2007 EIP has been amended periodically since its original approval. The 2007 EIP reserved 691,051 shares of the Company’s common stock for grants to officers, directors, employees, consultants and advisors upon whose efforts the success of the Company and its affiliates depends to a large degree. As of December 31, 2017, the Company had reserved 29,983 shares for issuance upon the exercise of stock options outstanding and no shares for issuance upon the vesting of RSU awards outstanding. As of December 31, 2017, 253,659 shares of common stock reserved for stock options and RSU awards under the 2007 EIP have been issued in the form of common stock. 2012 Equity Incentive Plan The Company has granted incentive stock options and other equity awards pursuant to the Broadwind Energy, Inc. 2012 Equity Incentive Plan (the “2012 EIP”), which was approved by the Board in March 2012 and by the Company’s stockholders in May 2012. The 2012 EIP reserved 1,200,000 shares of the Company’s common stock for grants to officers, directors, employees, consultants and advisors upon whose efforts the success of the Company and its affiliates will depend to a large degree. As of December 31, 2017, the Company had reserved 37,205 shares for issuance upon the exercise of stock options outstanding and 18,393 shares for issuance upon the vesting of RSU awards outstanding. As of December 31, 2017, 619,608 shares of common stock reserved for stock options and RSU awards under the 2012 EIP have been issued in the form of common stock. 2015 Equity Incentive Plan The Company has granted equity awards pursuant to the Broadwind Energy, Inc. 2015 Equity Incentive Plan (the “2015 EIP;” together with the 2007 EIP and the 2012 EIP, the “Equity Incentive Plans”), which was approved by the Board in February 2015 and by the Company’s stockholders in April 2015. The purposes of the 2015 EIP are (i) to align the interests of the Company’s stockholders and recipients of awards under the 2015 EIP by increasing the proprietary interest of such recipients in the Company’s growth and success; (ii) to advance the interests of the Company by attracting and retaining officers, other employees, non-employee directors and independent contractors; and (iii) to motivate such persons to act in the long-term best interests of the Company and its stockholders. Under the 2015 EIP, the Company may grant (i) non-qualified stock options; (ii) “incentive stock options” (within the meaning of IRC Section 422); (iii) stock appreciation rights; (iv) restricted stock and RSUs; and (v) PSUs. The 2015 EIP reserves 1,100,000 shares of the Company’s common stock for grants to officers, directors, employees, consultants and advisors upon whose efforts the success of the Company and its affiliates will depend to a large degree. As of December 31, 2017, the Company had reserved 493,749 shares for issuance upon the vesting of RSU awards outstanding. As of December 31, 2017, a total of 202,438 shares of common stock reserved for RSU awards under the 2015 EIP had been issued in the form of common stock. Stock Options. The exercise price of stock options granted under the Equity Incentive Plans is equal to the closing price of the Company’s common stock on the date of grant. Stock options generally become exercisable on the anniversary of the grant date, with vesting terms that may range from one to five years from the date of grant. Additionally, stock options expire ten years after the date of grant. The fair value of stock options granted is expensed ratably over their vesting term. Restricted Stock Units (RSUs). The granting of RSUs is provided for under the Equity Incentive Plans. RSUs generally vest on the anniversary of the grant date, with vesting terms that may range from one to five years from the date of grant. The fair value of each RSU granted is equal to the closing price of the Company’s common stock on the date of grant and is generally expensed ratably over the vesting term of the RSU award. Performance Awards (PSUs). The granting of PSUs is provided for under the Equity Incentive Plans. PSUs generally vest upon the Company meeting performance measures as of the vesting date over the period of the plan. The fair value of each PSU granted is equal to the closing price of the Company’s common stock on the date of grant and is generally expensed ratably over the term of the PSU award plan. Stock option activity during the year ended December 31, 2017 under the Equity Incentive Plans was as follows: Weighted Average Aggregate Intrinsic Weighted Average Remaining Value Options Exercise Price Contractual Term (in thousands) Outstanding as of December 31, 2016 67,438 $ 24.96 Expired (250) 107.00 Outstanding as of December 31, 2017 67,188 $ 24.65 3.39 $ — Exercisable as of December 31, 2017 67,188 $ 24.65 3.39 $ — The following table summarizes information with respect to all outstanding and exercisable stock options under the Equity Incentive Plans as of December 31, 2017: Options Outstanding Options Exercisable Weighted Average Number of options Weighted Average Remaining Number Weighted Average Exercise Price or Range outstanding Exercise Price Contractual Term Exercisable Exercise Price $3.39 - $13.50 52,115 $ 6.29 4.01 years 52,115 $ 6.29 $54.40 - $92.50 5,823 57.67 2.07 years 5,823 57.67 $99.90 - $128.50 9,250 107.35 0.75 years 9,250 107.35 67,188 $ 24.65 3.39 years 67,188 $ 24.65 The fair value of each stock option award is estimated on the date of grant using the Black‑Scholes option pricing model. The determination of the fair value of each stock option is affected by the Company’s stock price on the date of grant, as well as assumptions regarding a number of highly complex and subjective variables. These variables include, but are not limited to, the Company’s expected stock price volatility over the expected life of the awards and actual and projected stock option exercise behavior. There were no stock options granted during the twelve months ended December 31, 2017. The following table summarizes information with respect to outstanding RSU’s and PSU’s as of December 31, 2017 and 2016: Weighted Average Grant-Date Fair Value Number of Shares Per Share Unvested as of December 31, 2016 492,176 $ 3.56 Granted 288,866 $ 5.69 Vested (231,521) $ 3.93 Forfeited (37,379) $ 3.95 Unvested as of December 31, 2017 512,142 $ 4.57 During the years ended December 31, 2017 and 2016, the Company utilized a forfeiture rate of 25% for estimating the forfeitures of stock compensation granted. The following table summarizes share‑based compensation expense, net of taxes withheld, included in the Company’s consolidated statements of operations for the years ended December 31, 2017 and 2016 as follows: For the Years Ended December 31, 2017 2016 Share-based compensation expense: Cost of sales $ 101 $ 90 Selling, general and administrative 712 663 Income tax benefit (1) — — Net effect of share-based compensation expense on net income $ 813 $ 753 Reduction in earnings per share: Basic earnings per share $ 0.05 $ 0.05 Diluted earnings per share $ 0.05 $ 0.05 (1) Income tax benefit is not illustrated because the Company is currently in a full tax valuation allowance position and an actual income tax benefit was not realized for the years ended December 31, 2017 and 2016. The result of the income (loss) situation creates a timing difference, resulting in a deferred tax asset, which is fully reserved for in the Company’s valuation allowance. As of December 31, 2017, the Company estimates that pre‑tax compensation expense for all unvested share‑based awards, including both stock options and RSUs, in the amount of approximately $1,211 will be recognized through the year 2020. The Company expects to satisfy the exercise of stock options and future distribution of shares of restricted stock by issuing new shares of common stock. |
SEGMENT REPORTING
SEGMENT REPORTING | 12 Months Ended |
Dec. 31, 2017 | |
SEGMENT REPORTING | |
SEGMENT REPORTING | 16. SEGMENT REPORTING The Company is organized into reporting segments based on the nature of the products offered and business activities from which it earns revenues and incurs expenses for which discrete financial information is available and regularly reviewed by the Company’s chief operating decision maker. On February 1, 2017, the Company acquired Red Wolf, and Red Wolf is being operated as a wholly-owned subsidiary, as more fully described in Note 21, “Business Combinations” in the notes to the Company’s consolidated financial statements. The Red Wolf acquisition aligns with the Company’s growth strategy approved by our Board in late 2016 to expand and diversify our business through organic growth and strategic bolt-on acquisitions. Red Wolf’s operations is being reported in the “Process Systems” segment. As a result of the 2017 Red Wolf acquisition, the Company has revised its segment presentation to include three reportable operating segments: Towers and Weldments, Gearing and Process Systems. All current and prior period financial results have been revised to reflect these changes. In the fourth quarter 2017, the segment changed its name from Towers and Weldments to Towers and Heavy Fabrications to more accurately reflect the nature of the business’ activities. The Company’s segments and their product offerings are summarized below: Towers and Heavy Fabrications The Company manufactures towers for wind turbines, specifically the large and heavier wind towers that are designed for multiple MW wind turbines. Production facilities, located in Manitowoc, Wisconsin and Abilene, Texas, are situated in close proximity to the primary U.S. domestic wind energy and equipment manufacturing hubs. The facilities have a combined annual tower production capacity of up to approximately 550 towers, sufficient to support turbines generating more than 1,100 MW of power. This product segment also encompasses the fabrication of heavy weldments for mining and other industrial customers. Gearing The Company engineers, builds and remanufactures precision gears and gearing systems for oil and gas, wind, mining, steel and other industrial applications. The Company uses an integrated manufacturing process, which includes machining and finishing processes in Cicero, Illinois, and heat treatment in Neville Island, Pennsylvania. Process Systems The Company acquired Red Wolf on February 1, 2017 and as a result, aggregated its Abilene compressed natural gas (“CNG”) and fabrication business with Red Wolf to form the Process Systems reportable segment. This segment provides contract manufacturing services that include build-to-spec, kitting, fabrication and inventory management for customers throughout the U.S. and in foreign countries, primarily supporting the natural gas electrical generation market. Corporate and Other “Corporate” includes the assets and SG&A expenses of the Company’s corporate office. “Eliminations” comprises adjustments to reconcile segment results to consolidated results. The accounting policies of the reportable segments are the same as those referenced in Note 1, “Description of Business and Summary of Significant Accounting Policies” of these consolidated financial statements. Summary financial information by reportable segment is as follows: Towers and Process Heavy Fabrications Gearing Systems Corporate Eliminations Consolidated For the Year Ended December 31, 2017 Revenues from external customers $ 103,389 $ 26,006 $ 17,390 $ — $ — $ 146,785 Operating (loss) profit 2,667 (2,632) (2,269) (5,199) — (7,433) Depreciation and amortization 4,638 2,430 1,706 225 — 8,999 Capital expenditures 5,355 726 426 181 — 6,688 Assets held for sale — 560 — 20 — 580 Total assets 27,958 38,016 26,442 249,346 (229,412) 112,350 Towers and Heavy Fabrications Gearing Corporate Eliminations Consolidated For the Year Ended December 31, 2016 Revenues from external customers $ 160,210 $ 20,630 $ — $ — $ 180,840 Intersegment revenues — 18 — (18) — Net revenues 160,210 20,648 — (18) 180,840 Operating profit (loss) 12,788 (3,244) (7,636) 1 1,909 Depreciation and amortization 4,166 2,545 203 — 6,914 Capital expenditures 6,161 386 77 — 6,624 Assets held for sale — 353 455 — 808 Total assets 45,367 30,415 244,639 (202,759) 117,662 The Company generates revenues entirely from transactions completed in the U.S. and its long‑lived assets are all located in the U.S. All intercompany revenue is eliminated in consolidation. During 2017, one customer accounted for more than 10% of total net revenues. The customer accounted for revenues of $100,413 for fiscal year 2017 and was reported within the Towers and Heavy Fabrications segment. During 2016, three customers accounted for more than 10% of total net revenues. These three customers accounted for revenues of $111,480, $23,018, and $21,237 for fiscal year 2016 and were reported within the Towers and Heavy Fabrications segment. During the years ended December 31, 2017 and 2016, five customers accounted for 85% and 91%, respectively, of total net revenues. |
EMPLOYEE BENEFIT PLANS
EMPLOYEE BENEFIT PLANS | 12 Months Ended |
Dec. 31, 2017 | |
EMPLOYEE BENEFIT PLANS | |
EMPLOYEE BENEFIT PLANS | 17. EMPLOYEE BENEFIT PLANS Retirement Savings and Profit Sharing Plans Retirement Savings and Profit Sharing Plans The Company offers a 401(k) retirement savings plan to all eligible employees who may elect to contribute a portion of their salary on a pre‑tax basis, subject to applicable statutory limitations. Participating non‑union employees are eligible to receive safe harbor matching contributions equal to 100% of the first 3% of the participant’s elective deferral contributions and 50% of the next 2% of the participant’s elective deferral contributions. In accordance with the collective bargaining agreements in place at its two union locations, the Company’s Illinois‑based union employees are eligible to receive a discretionary match in an amount up to 50% of each participant’s first 4% of elective deferral contributions, and the Company’s Pennsylvania‑based union employees are eligible to receive a discretionary match in an amount up to 100% of each participant’s first 3% and 50% of the next 2% of elective deferral contributions. The Company has the discretion, subject to applicable statutory requirements, to fund any matching contribution with a contribution to the plan of the Company’s common stock. Beginning with the first quarter of 2012, the Company funded the matching contributions in the form of the Company’s common stock. Starting in the first quarter of 2014, the Company resumed funding the matching contributions in cash. Beginning in the third quarter of 2017, the Company resumed funding the matching contributions in the form of the Company’s common stock. Under the plan, elective deferrals and basic Company matching is 100% vested at all times. For the years ended December 31, 2017 and 2016, the Company recorded expense under these plans of approximately $765 and $823, respectively. Deferred Compensation Plan The Company maintains a deferred compensation plan for certain key employees and nonemployee directors, whereby certain wages earned, compensation for services rendered, and discretionary company‑matching contributions may be deferred and deemed to be invested in the Company’s common stock. Changes in the fair value of the plan liability are recorded as charges or credits to compensation expense. Compensation expense associated with the deferred compensation plan recorded during the years ended December 31, 2017 and 2016 was $(12) and $24, respectively. The fair value of the plan liability to the Company is included in accrued liabilities in the Company’s consolidated balance sheets. As of December 31, 2017 and 2016, the fair value of plan liability to the Company was $24 and $36, respectively. In addition to the employee benefit plans described above, the Company participates in certain customary employee benefits plans, including those which provide health and life insurance benefits to employees. |
NEW MARKETS TAX CREDIT TRANSACT
NEW MARKETS TAX CREDIT TRANSACTION | 12 Months Ended |
Dec. 31, 2017 | |
NEW MARKETS TAX CREDIT TRANSACTION | |
NEW MARKETS TAX CREDIT TRANSACTION | 18. NEW MARKETS TAX CREDIT TRANSACTION On July 20, 2011, the Company executed the NMTC Transaction, which was amended on August 24, 2015, involving the following third parties: AMCREF Fund VII, LLC (“AMCREF”), a registered community development entity; COCRF Investor VIII, LLC (“COCRF”); and Capital One. The NMTC Transaction allows the Company to receive below market interest rate funds through the federal New Markets Tax Credit (“NMTC”) program. The Company received $2,280 in proceeds via the NMTC Transaction. The NMTC Transaction qualifies under the NMTC program and includes a gross loan from AMCREF to the Company's wholly-owned subsidiary Broadwind Services, LLC, a Delaware limited liability company, in the principal amount of $10,000, with a term of fifteen years and interest payable at the rate of 1.4% per annum, largely offset by a gross loan in the principal amount of $7,720 from the Company to COCRF, with a term of fifteen years and interest payable at the rate of 2.5% per annum. The August 2015 amendment did not change the financial terms of the NMTC Transaction, but did add the activities and assets of the Abilene Heavy Industries Facility to the NMTC Transaction and allow for the sale of the Abilene Gearbox Facility assets provided that the proceeds of such sale be re-invested in the Abilene Heavy Industries Facility. The NMTC regulations permit taxpayers to claim credits against their federal income taxes for up to 39% of qualified investments in the equity of community development entities. The NMTC Transaction could generate $3,900 in tax credits, which the Company has made available under the structure by passing them through to Capital One. The proceeds have been applied to the Company’s investment in the Abilene Gearbox Facility assets and associated operating costs and in the assets of the Abilene Heavy Industries Facility, as permitted under the amended NMTC Transaction. The Abilene Heavy Industries Facility and the Abilene Gearbox Facility must operate and remain in compliance with various regulations and restrictions through September 2018, the end of the seven year compliance period, to comply with the terms of the NMTC Transaction, or the Company may be liable under its indemnification agreement with Capital One for the recapture of tax credits. In the event the Company does not comply with these regulations and restrictions, the NMTC program tax credits may be subject to 100% recapture for a period of seven years as provided in the IRC. The Company does not anticipate that any tax credit recapture events will occur or that it will be required to make any payments to Capital One under the indemnification agreement. The Capital One contribution, including a loan origination payment of $320, has been included as other assets in the Company’s consolidated balance sheet as of December 31, 2017. The NMTC Transaction includes a put/call provision whereby the Company may be obligated or entitled to repurchase Capital One’s interest in the third quarter of 2018. Capital One may exercise an option to put its investment to the Company and receive $130 from the Company at that time. If Capital One does not exercise its put option, the Company can exercise a call option at the then fair market value of the call. The Company expects that Capital One will exercise the put option at the end of the tax credit recapture period. The Capital One contribution other than the amount allocated to the put obligation will be recognized as income only after the put/call is exercised and when Capital One has no ongoing interest. However, there is no legal obligation for Capital One to exercise the put, and the Company has attributed only an insignificant value to the put option included in this transaction structure. The Company has determined that two pass‑through financing entities created under NMTC Transaction structure are VIEs. The ongoing activities of the VIEs—collecting and remitting interest and fees and complying with NMTC program requirements—were considered in the initial design of the NMTC Transaction and are not expected to significantly affect economic performance throughout the life of the VIEs. In making this determination, management also considered the contractual arrangements that obligate the Company to deliver tax benefits and provide various other guarantees under the NMTC Transaction structure, Capital One’s lack of a material interest in the underlying economics of the project, and the fact that the Company is obligated to absorb losses of the VIEs. The Company has concluded that it is required to consolidate the VIEs because the Company has both (i) the power to direct those matters that most significantly impact the activities of each VIE, and (ii) the obligation to absorb losses or the right to receive benefits of each VIE. The $262 of issue costs paid to third parties in connection with the NMTC Transaction are recorded as prepaid expenses, and are being amortized over the expected seven-year term of the NMTC arrangement. Capital One’s net contribution of $2,600 is included in Line of Credit and NMTC Note Payable in the consolidated balance sheet. Incremental costs to maintain the transaction structure during the compliance period will be recognized as they are incurred. |
QUARTERLY FINANCIAL SUMMARY (UN
QUARTERLY FINANCIAL SUMMARY (UNAUDITED) | 12 Months Ended |
Dec. 31, 2017 | |
QUARTERLY FINANCIAL SUMMARY (UNAUDITED) | |
QUARTERLY FINANCIAL SUMMARY (UNAUDITED) | 19. QUARTERLY FINANCIAL SUMMARY (UNAUDITED) The following table provides a summary of selected financial results of operations by quarter for the years ended December 31, 2017 and 2016 as follows: 2017 First Second Third Fourth Revenues $ 56,060 $ 43,362 $ 29,595 $ 17,768 Gross profit (loss) 6,374 3,872 1,014 (3,101) Operating profit (loss) 1,603 (516) (1,831) (6,689) Income (loss) from continuing operations, net of tax 6,482 (688) (2,049) (6,928) Net income (loss) 6,327 (780) (2,207) (6,981) Income (loss) from continuing operations per share: Basic $ 0.43 $ (0.05) $ (0.14) $ (0.45) Diluted $ 0.43 $ (0.05) $ (0.14) $ (0.45) Net income (loss) per share: Basic $ 0.42 $ (0.05) $ (0.15) $ (0.46) Diluted $ 0.42 $ (0.05) $ (0.15) $ (0.46) 2016 First Second Third Fourth Revenues $ 46,757 $ 43,380 $ 42,552 $ 48,151 Gross profit (loss) 3,962 4,142 5,331 4,704 Operating (loss) profit (224) 181 1,360 592 (Loss) income from continuing operations, net of tax (358) 42 1,245 406 Net (loss) income (377) (474) 872 298 (Loss) income from continuing operations per share: Basic $ (0.02) $ 0.00 $ 0.08 $ 0.03 Diluted $ (0.02) $ 0.00 $ 0.08 $ 0.03 Net (loss) income per share: Basic $ (0.03) $ (0.03) $ 0.06 $ 0.02 Diluted $ (0.03) $ (0.03) $ 0.06 $ 0.02 |
LEGAL PROCEEDINGS
LEGAL PROCEEDINGS | 12 Months Ended |
Dec. 31, 2017 | |
LEGAL PROCEEDINGS | |
LEGAL PROCEEDINGS | 20. LEGAL PROCEEDINGS The Company is party to a variety of legal proceedings that arise in the normal course of its business. While the results of these legal proceedings cannot be predicted with certainty, management believes that the final outcome of these proceedings will not have a material adverse effect, individually or in the aggregate, on the Company’s results of operations, financial condition or cash flows. Due to the inherent uncertainty of litigation, there can be no assurance that the resolution of any particular claim or proceeding would not have a material adverse effect on the Company’s results of operations, financial condition or cash flows. It is possible that if one or more of such matters were decided against the Company, the effects could be material to the Company’s results of operations in the period in which the Company would be required to record or adjust the related liability and could also be material to the Company’s financial condition and cash flows in the periods the Company would be required to pay such liability. |
BUSINESS COMBINATIONS
BUSINESS COMBINATIONS | 12 Months Ended |
Dec. 31, 2017 | |
BUSINESS COMBINATIONS | |
BUSINESS COMBINATIONS | 21. BUSINESS COMBINATIONS Overview On January 30, 2017, the Company announced that it had agreed upon the material terms to acquire Red Wolf, a Sanford, North Carolina-based, privately held fabricator, kitter and assembler of industrial systems primarily supporting the global gas turbine market, for approximately $18,983, subject to certain adjustments. The transaction closed on February 1, 2017, and Red Wolf is being operated as a wholly-owned subsidiary of the Company. Accounting for the Transaction The Company accounts for acquisitions in accordance with guidance found in ASC 805, Business Combinations. The guidance requires consideration given, including contingent consideration, assets acquired and liabilities assumed to be valued at their fair market values at the acquisition date. The guidance further provides that: (1) in-process research and development will be recorded at fair value as an indefinite-lived intangible asset; (2) acquisition costs will generally be expensed as incurred, (3) restructuring costs associated with a business combination will generally be expensed subsequent to the acquisition date; and (4) changes in deferred tax asset valuation allowances and income tax uncertainties after the acquisition date generally will affect income tax expense. ASC 805 requires that any excess of purchase price over fair value of assets acquired, including identifiable intangibles and liabilities assumed, be recognized as goodwill. Red Wolf’s results are included in the Company’s results from the acquisition date of February 1, 2017. The purchase price of the transaction totaled $18,983, of which $16,449 was paid in cash and $2,534 was the expected value of contingent future earn-out payments. The contingent consideration arrangement requires the Company to pay the former owners of Red Wolf a payout if Red Wolf achieves a targeted profitability benchmark. The potential undiscounted amount of all future payments that the Company could be required to make under the contingent consideration arrangement is between $0 and $9,900. Annual earn-out payments may not exceed $4,950. The fair value of the contingent consideration arrangement of $2,534 was estimated by using a Monte Carlo simulation. Key assumptions include a short-term weighted average cost of capital of 15% and historical volatility of public company comparables. During the third quarter of 2017, the Company released $1,394 of this contingency into operating income because management determined that Red Wolf’s full-year financial performance during the first year of ownership by the Company was unlikely to meet the threshold required to pay the first installment of the contingent earn-out. The release of the first installment of the contingent earn-out is reflected in the selling, general, and administrative line item in the consolidated statements of operations. Following the release of this portion of the contingency, $1,140 remains in other long-term liabilities, relating to the potential final contingent earn-out that depends on financial performance during the second year of ownership of Red Wolf. Based on information currently known, the Company believes that the long-term contingency is still applicable. The Company’s allocation of the $18,983 purchase price to Red Wolf’s tangible and identifiable intangible assets acquired and liabilities assumed, based on their fair values as of February 1, 2017, is included in the table below. Goodwill is recorded based on the amount by which the purchase price exceeds the fair value of the net assets acquired and is not deductible for tax purposes. The measurement period adjustments were a result of changes in the fair value of the contingent consideration arrangement and adjustments to working capital accounts. The decrease in goodwill from March 31, 2017 is due to opening balance sheet changes noted in the table below. The purchase price allocation as of March 31 and December 31, 2017 is as follows (in thousands): Allocation as of 3/31/2017 Measurement Period Adjustments Allocation as of 12/31/2017 Assets acquired and liabilities assumed: Cash and cash equivalents $ 63 $ (63) $ - Receivables 2,796 (96) 2,700 Inventories 4,998 179 5,177 Property and equipment 462 - 462 Noncompete agreements 170 - 170 Customer relationships 12,000 - 12,000 Trade names 1,100 - 1,100 Goodwill 5,568 (575) 4,993 Accounts payable (1,354) 2 (1,352) Accrued expenses (809) (67) (876) Deferred tax liabilities (5,391) - (5,391) Total purchase price $ 19,603 $ (620) $ 18,983 The allocation of the purchase price is based on valuations performed to determine the fair value of such assets and liabilities as of the acquisition date. The acquired noncompete agreements, customer relationships, and trade names have weighted average amortization periods of 6.0 years, 9.0 years, and 14.0 years, respectively and the total weighted average life of the acquired intangible assets is 9.4 years. Goodwill from this transaction has been allocated to the Company’s Process Systems segment and is not deductible for tax purposes. The Company incurred transaction costs of $182 for the year ended December 31, 2017 related to the acquisition. These costs were expensed as incurred and were primarily recorded as selling, general, and administrative expenses on the Company’s consolidated statements of operations. Red Wolf recorded revenues of $15,868 and a net loss of $146 for the period beginning from the acquisition date of February 1, 2017 and ending on December 31, 2017. Pro Forma Results The Company’s unaudited pro forma results of operations for the years ended December 31, 2017 and 2016 assuming the Red Wolf acquisition had occurred as of January 1, 2016 are presented for comparative purposes below. These amounts are based on available information of the results of operations of Red Wolf prior to the acquisition date and are not necessarily indicative of what the results of operations would have been had the acquisition been completed on January 1, 2016. This unaudited pro forma information is as follows (in thousands, except per share amounts): Year Ended December 31, 2017 2016 Total revenues $ $ Net (loss) income* $ $ Pro forma (loss) income per common share - basic $ $ Pro forma (loss) income per common share - diluted $ $ *The release of a portion of the tax provision related to the acquisition is presented within the year ended December 31, 2016 net income for pro forma as the release is considered to occur at the time of the acquisition. |
DESCRIPTION OF BUSINESS AND S28
DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2017 | |
DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Principles of Consolidation and Basis of Presentation | Principles of Consolidation and Basis of Presentation These consolidated financial statements include the accounts of the Company and entities in which it has a controlling financial interest. All significant intercompany transactions and balances have been eliminated in consolidation. The Company determines whether it has a controlling financial interest in an entity by first evaluating whether the entity is a voting interest entity or a variable interest entity (“VIE”). When the Company obtains an economic interest in an entity, the Company evaluates the entity to determine if the entity is deemed a VIE, and if the Company is deemed to be the primary beneficiary, in accordance with the accounting standard for the consolidation of VIE’s. The accounting standard for the consolidation of VIE’s requires the Company to qualitatively assess if the Company was the primary beneficiary of the VIE based on whether the Company had (i) the power to direct those matters that most significantly impacted the activities of the VIE and (ii) the obligation to absorb losses or the right to receive benefits of the VIE that could potentially be significant. Refer to Note 18, “New Markets Tax Credit Transaction” of these consolidated financial statements for a description of two VIE’s included in the Company’s consolidated financial statements. |
Management's Use of Estimates | Management’s Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the U.S. (“GAAP”) requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent liabilities as of the date of the financial statements and reported amounts of revenues and expenses during the reported period. Significant estimates, among others, include revenue recognition, future tax rates, inventory reserves, warranty reserves, impairment of long-lived assets, allowance for doubtful accounts, workers’ compensation reserves, health insurance reserves, and environmental reserves. Although these estimates are based upon management’s best knowledge of current events and actions that the Company may undertake in the future, actual results could differ from these estimates. The Company changed an accounting estimate as of the beginning of 2016 to increase the salvage value of selected large machinery and equipment in the Gearing segment to reflect the estimated sale value of the used machinery market. The impact during the year-ended December 31, 2016 was a reduction of depreciation expense of $2,481. |
Cash and Cash Equivalents and Short-Term Investments | Cash and Cash Equivalents and Short‑Term Investments Cash and cash equivalents typically comprise cash balances and readily marketable investments with original maturities of three months or less, such as money market funds, short‑term government bonds, Treasury bills, marketable securities and commercial paper. Marketable investments with original maturities between three and twelve months are recorded as short‑term investments. The Company’s treasury policy is to invest excess cash in money market funds or other investments, which are generally of a short‑term duration based upon operating requirements. Income earned on these investments is recorded to interest income in the Company’s consolidated statements of operations. As of December 31, 2017 and December 31, 2016, cash and cash equivalents totaled $78 and $18,699, respectively, and short‑term investments totaled $0 and $3,171, respectively. For the years ended December 31, 2017 and 2016, interest income was $5 and $48, respectively. |
Revenue Recognition | Revenue Recognition The Company recognizes revenue when the earnings process is complete and when persuasive evidence of an arrangement exists, transfer of title has occurred or services have been rendered, the selling price is fixed or determinable, collectability is reasonably assured and delivery has occurred per the terms of the contract. Customer deposits, deferred revenue and other receipts are deferred and recognized when the revenue is realized and earned. Cash payments to customers are presumed to be classified as reductions of revenue in the Company’s statement of operations. In most instances within the Company’s Towers and Heavy Fabrications segment, products are sold under terms included in bill and hold sales arrangements that result in different timing for revenue recognition. The Company recognizes revenue under these arrangements only when the buyer requests the arrangement, a fixed schedule for delivery exists, the ordered goods are segregated from inventory and not available to fill other orders and the goods are complete and ready for shipment. Assuming these required revenue recognition criteria are met, revenue is recognized upon completion of product manufacture and customer acceptance. The Company will adopt the provisions of Accounting Standards Codification (“ASC”) 606, Revenue from Contracts with Customers, for the fiscal year beginning January 1, 2018 and will be electing the modified retrospective approach. Through the Company’s assessment of the ASC 606, the Company has determined there are minimal changes to the assumptions currently utilized for the year ending December 31, 2017 and the adoption of the guidance will not result in a material impact on the Company’s consolidated financial statements. |
Cost of Sales | Cost of Sales Cost of sales represents all direct and indirect costs associated with the production of products for sale to customers. These costs include operation, repair and maintenance of equipment, materials, direct and indirect labor and benefit costs, rent and utilities, maintenance, insurance, equipment rentals, freight in and depreciation. |
Selling, General and Administrative Expenses | Selling, General and Administrative Expenses Selling, general and administrative (“SG&A”) expenses include all corporate and administrative functions such as sales and marketing, legal, human resource management, finance, investor and public relations, information technology and senior management. These functions serve to support the Company’s current and future operations and provide an infrastructure to support future growth. Major expense items in this category include management and staff wages and benefits, share‑based compensation and professional services. |
Accounts Receivable | Accounts Receivable (A/R) The Company generally grants uncollateralized credit to customers on an individual basis based upon the customer’s financial condition and credit history. Credit is typically on net 30 day terms and customer deposits are frequently required at various stages of the production process to minimize credit risk. Historically, the Company’s A/R is highly concentrated with a select number of customers. During the year ended December 31, 2017, the Company’s five largest customers accounted for 85% of its consolidated revenues and 57% of outstanding A/R balances, compared to the year ended December 31, 2016 when the Company’s five largest customers accounted for 91% of its consolidated revenues and 86% of its outstanding A/R balances. |
Allowance for Doubtful Accounts | Allowance for Doubtful Accounts Based upon past experience and judgment, the Company establishes an allowance for doubtful accounts with respect to A/R. The Company’s standard allowance estimation methodology considers a number of factors that, based on its collections experience, the Company believes will have an impact on its credit risk and the realizability of its A/R. These factors include individual customer circumstances, history with the Company and other relevant criteria. A/R balances that remain outstanding after the Company has exhausted reasonable collection efforts are written off through a charge to the valuation allowance and a credit to A/R. The Company monitors its collections and write‑off experience to assess whether or not adjustments to its allowance estimates are necessary. Changes in trends in any of the factors that the Company believes may impact the realizability of its A/R, as noted above, or modifications to the Company’s credit standards, collection practices and other related policies may impact its allowance for doubtful accounts and its financial results. Bad debt expense for the years ended December 31, 2017 and 2016 was $80 and $65, respectively. |
Inventories | Inventories Inventories are stated at the lower of cost or market and net realizable value. Cost is determined either based on the first‑in, first‑out (“FIFO”) method, or on a standard cost basis that approximates the FIFO method. Market is determined based on net realizable value. Any excess of cost over market value is included in the Company’s inventory allowance. Market value of inventory, and management’s judgment of the need for reserves, encompasses consideration of other business factors including physical condition, inventory holding period, contract terms and usefulness. Inventories consist of raw materials, work‑in‑process and finished goods. Raw materials consist of components and parts for general production use. Work‑in‑process consists of labor and overhead, processing costs, purchased subcomponents and materials purchased for specific customer orders. Finished goods consist of components purchased from third parties as well as components manufactured by the Company that will be used to produce final customer products. |
Long lived assets | Long-Lived Assets Property and equipment are stated at cost less accumulated depreciation and amortization. Depreciation and amortization of property and equipment is recognized using the straight‑line method over the estimated useful lives of the related assets for financial reporting purposes, and generally using an accelerated method for income tax reporting purposes. Depreciation expense related to property and equipment for the years ended December 31, 2017 and 2016 was $7,235 and $6,471, respectively. Expenditures for additions and improvements are capitalized, while replacements, maintenance and repairs that do not improve or extend the useful lives of the respective assets are expensed as incurred. The Company has in the past capitalized interest costs incurred on indebtedness used to construct property and equipment. Capitalized interest is recorded as part of the asset to which it relates and is amortized over the asset’s estimated useful life. There was no interest cost capitalized during the years ended December 31, 2017 or 2016. Property or equipment sold or disposed of is removed from the respective property accounts, with any corresponding gains and losses recorded within operating income (loss) in the Company’s consolidated statement of operations. The Company reviews property and equipment and other long‑lived assets (“long-lived assets”) for impairment whenever events or circumstances indicate that carrying amounts may not be recoverable. In evaluating the recoverability of long-lived assets, the Company utilizes a fair value technique accepted by ASC 820, Fair Value Measurement, which is the asset accumulation approach. If the fair value of the asset group is less than the carrying amount, the Company recognizes an impairment loss. In evaluating the recoverability of long‑lived assets, the Company must make assumptions regarding estimated future cash flows and other factors to determine the fair value of such assets. If the Company’s fair value estimates or related assumptions change in the future, the Company may be required to record impairment charges related to property and equipment and other long‑lived assets. Asset recoverability is first measured by comparing the assets’ carrying amounts to their expected future undiscounted net cash flows to determine if the assets are impaired. If such assets are considered to be impaired, the impairment recognized is measured based on the amount by which the carrying amount of the assets exceeds the fair value. To the extent the assumptions used in the Company’s analysis are not achieved, there may be a negative effect on the valuation of these assets. Goodwill The Company reviews goodwill for impairment on an annual basis in accordance with ASC 350, Intangibles- Goodwill and Other. In evaluating the goodwill, the Company must make assumptions regarding the discounted future cash flows of the acquired company. If the discounted cash flows are less than the carrying value, the Company then determines if an impairment loss is recognized by comparing the fair value to the carrying value of the acquired company. |
Warranty Liability | Warranty Liability The Company provides warranty terms that generally range from one to five years for various products and services relating to workmanship and materials supplied by the Company. In certain contracts, the Company has recourse provisions for items that would enable the Company to pursue recovery from third parties for amounts paid to customers under warranty provisions. Warranty liability is recorded in accrued liabilities within the consolidated balance sheet. The Company estimates the warranty accrual based on various factors, including historical warranty costs, current trends, product mix and sales. The changes in the carrying amount of the Company’s total product warranty liability for the years ended December 31, 2017 and 2016 were as follows, excluding activity related to the discontinued Services segment: As of December 31, 2017 2016 Balance, beginning of period $ 671 $ 601 Addition to (reduction of) warranty reserve (28) 83 Warranty claims (62) (13) Balance, end of period $ 581 $ 671 |
Income Taxes | Income Taxes The Company accounts for income taxes based upon an asset and liability approach. Deferred tax assets and liabilities represent the future tax consequences of the differences between the financial statement carrying amounts of assets and liabilities versus the tax basis of assets and liabilities. Under this method, deferred tax assets are recognized for deductible temporary differences, and operating loss and tax credit carryforwards. Deferred tax liabilities are recognized for taxable temporary differences. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. The impact of tax rate changes on deferred tax assets and liabilities is recognized in the year that the change is enacted. In connection with the preparation of its consolidated financial statements, the Company is required to estimate its income tax liability for each of the tax jurisdictions in which the Company operates. This process involves estimating the Company’s actual current income tax expense and assessing temporary differences resulting from differing treatment of certain income or expense items for income tax reporting and financial reporting purposes. The Company also recognizes as deferred income tax assets the expected future income tax benefits of net operating loss (“NOL”) carryforwards. In evaluating the realizability of deferred income tax assets associated with NOL carryforwards, the Company considers, among other things, expected future taxable income, the expected timing of the reversals of existing temporary reporting differences and the expected impact of tax planning strategies that may be implemented to prevent the potential loss of future income tax benefits. Changes in, among other things, income tax legislation, statutory income tax rates or future taxable income levels could materially impact the Company’s valuation of income tax assets and liabilities and could cause its income tax provision to vary significantly among financial reporting periods. On December 22, 2017, the U.S. government enacted comprehensive tax legislation commonly referred to as the Tax Cuts and Jobs Act (the “Tax Act”). The Tax Act makes broad and complex changes to the U.S. tax code, including, but not limited to, (1) reducing the U.S. federal corporate tax rate; (2) eliminating the corporate alternative minimum tax; (3) creating a new limitation on deductible interest expense; and (4) changing rules related to uses and limitations of net operating loss carryforwards created in tax years beginning after December 31, 2017. The Company also accounts for the uncertainty in income taxes related to the recognition and measurement of a tax position taken or expected to be taken in an income tax return. The Company follows the applicable pronouncement guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition related to the uncertainty in these income tax positions. |
Share-Based Compensation | Share‑Based Compensation The Company grants incentive stock options, restricted stock units (“RSUs”) and/or performance awards (“PSUs”) to certain officers, directors, and employees. The Company accounts for share‑based compensation related to these awards based on the estimated fair value of the equity award and recognizes expense ratably over the required vesting term of the award. The expense associated with PSUs is also based on the probability of achieving embedded targets. See Note 15 “Share‑Based Compensation” of these consolidated financial statements for further discussion of the Company’s share‑based compensation plans, the nature of share‑based awards issued and the Company’s accounting for share‑based compensation. |
Net Income (Loss) Per Share | Net Income (Loss) Per Share The Company presents both basic and diluted net income (loss) per share. Basic net income (loss) per share is based solely upon the weighted average number of common shares outstanding and excludes any dilutive effects of options, warrants and convertible securities. Diluted net income (loss) per share is based upon the weighted average number of common shares and common‑share equivalents outstanding during the year excluding those common‑share equivalents where the impact to basic net income (loss) per share would be anti‑dilutive. |
DESCRIPTION OF BUSINESS AND S29
DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Schedule of changes in the carrying amount of the total product warranty liability | As of December 31, 2017 2016 Balance, beginning of period $ 671 $ 601 Addition to (reduction of) warranty reserve (28) 83 Warranty claims (62) (13) Balance, end of period $ 581 $ 671 |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
EARNINGS PER SHARE | |
Reconciliation of basic and diluted earnings per share | For the Years Ended December 31, 2017 2016 Basic earnings per share calculation: Net (loss) income $ (3,641) $ 319 Weighted average number of common shares outstanding 15,053 14,843 Basic net (loss) income per share $ (0.24) $ 0.02 Diluted earnings per share calculation: Net (loss) income $ (3,641) $ 319 Weighted average number of common shares outstanding 15,053 14,843 Common stock equivalents: Stock options and non-vested stock awards (1) — 238 Weighted average number of common shares outstanding 15,053 15,081 Diluted net (loss) income per share $ (0.24) $ 0.02 (1) Stock options and RSUs granted and outstanding of 579,330 as of December 31, 2017 are excluded from the computation of diluted earnings due to the anti‑dilutive effect as a result of the Company’s net loss for the year ended December 31, 2017. |
DISCONTINUED OPERATIONS (Tables
DISCONTINUED OPERATIONS (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
DISCONTINUED OPERATIONS | |
Schedule of assets and liabilities held for sale | Results of operations associated with the Services segment, which are reflected as discontinued operations in the Company’s consolidated statements of income for the twelve months ended December 31, 2017 and 2016, were as follows: Year Ended December 31, 2017 2016 Revenues $ 151 $ 109 Cost of sales (391) (1,006) Selling, general and administrative (57) (69) Interest expense, net — (5) Impairment of held for sale assets and liabilities and gain on sale of assets (161) (45) Loss from discontinued operations $ (458) $ (1,016) The Company was notified of one warranty claim in 2017, which resulted in an additional $139 of warranty expense; the warranty claim was resolved prior to the end of 2017. In 2016, the Company was also notified of two warranty claims, which resulted in an additional $427 of warranty expense recorded; both of the warranty claims were resolved prior to the end of 2016. The Company’s residual warranty exposure will expire by October 2019. Assets and Liabilities Held for Sale Assets and liabilities classified as held for sale in the Company’s consolidated balance sheets as of December 31, 2017 and 2016 include the following: December 31, December 31, 2017 2016 Assets: Accounts receivable, net $ 11 $ 172 Inventories, net 9 807 Prepaid expenses and other current assets — 55 Assets Held For Sale Related To Discontinued Operations 20 1,034 Impairment of discontinued assets held for sale — (579) Total Assets Held For Sale Related To Discontinued Operations $ 20 $ 455 Liabilities: Accounts payable $ — $ 22 Accrued liabilities 27 121 Customer deposits and other current obligations 3 3 Other long-term liabilities — 3 Total Liabilities Held For Sale Related To Discontinued Operations $ 30 $ 149 |
CASH AND CASH EQUIVALENTS AND32
CASH AND CASH EQUIVALENTS AND SHORT-TERM INVESTMENTS (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
CASH AND CASH EQUIVALENTS AND SHORT-TERM INVESTMENTS | |
Summary of components of cash and cash equivalents and short-term investments | As of December 31, 2017 2016 Cash and cash equivalents: Cash $ 78 $ 16,821 Money market funds — 1,878 Total cash and cash equivalents 78 18,699 Short-term investments (available-for-sale): Corporate & municipal bonds — 3,171 Total cash and cash equivalents and short-term investments $ 78 $ 21,870 |
ALLOWANCE FOR DOUBTFUL ACCOUN33
ALLOWANCE FOR DOUBTFUL ACCOUNTS (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
ALLOWANCE FOR DOUBTFUL ACCOUNTS | |
Schedule of activity in the A/R allowance from continuing operations | For the Years Ended December 31, 2017 2016 Balance at beginning of period $ 145 $ 84 Bad debt expense 80 65 Other adjustments — (4) Balance at end of period $ 225 $ 145 |
INVENTORIES (Tables)
INVENTORIES (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
INVENTORIES | |
Schedule of the components of inventories from operations | As of December 31, 2017 2016 Raw materials $ 11,945 $ 14,174 Work-in-process 6,305 5,321 Finished goods 3,538 3,342 21,788 22,837 Less: Reserve for excess and obsolete inventory (2,509) (1,678) Net inventories $ 19,279 $ 21,159 |
LONG-LIVED ASSETS (Tables)
LONG-LIVED ASSETS (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
LONG-LIVED ASSETS | |
Schedule of cost basis and estimated lives of property and equipment from continuing operations | As of December 31, 2017 2016 Life Land $ 1,423 $ 1,982 Buildings 22,998 20,874 39 years Machinery and equipment 103,878 98,656 2 - 10 years Office furniture and equipment 4,202 3,648 3 - 7 years Leasehold improvements 9,095 8,720 Asset life or life of lease Construction in progress 4,138 6,089 145,734 139,969 Less accumulated depreciation and amortization (90,041) (85,363) Total property and equipment $ 55,693 $ 54,606 |
Schedule of the cost basis, accumulated amortization and net book value of intangible assets | December 31, 2017 December 31, 2016 Remaining Remaining Weighted Weighted Net Average Net Average Accumulated Book Amortization Accumulated Book Amortization Cost Amortization Value Period Cost Amortization Value Period Goodwill and other intangible assets: Goodwill $ 4,993 $ — $ 4,993 $ — $ — $ — Noncompete agreements 144 — — — Customer relationships 15,979 (4,992) 10,987 8.0 3,979 (3,726) 253 5.8 Trade names 9,099 (4,152) 4,947 10.5 7,999 (3,680) 4,319 10.8 Other intangible assets $ 25,248 $ (9,170) $ 16,078 8.8 $ 11,978 $ (7,406) $ 4,572 10.5 |
Schedule of estimated future amortization expense | 2018 $ 1,884 2019 1,884 2020 1,884 2021 1,884 2022 1,884 2023 and thereafter 6,658 Total $ 16,078 |
ACCRUED LIABILITIES (Tables)
ACCRUED LIABILITIES (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
ACCRUED LIABILITIES | |
Schedule of accrued liabilities | December 31, 2017 2016 Accrued payroll and benefits $ 1,797 $ 4,422 Accrued property taxes 144 99 Income taxes payable 77 127 Accrued professional fees 40 236 Accrued warranty liability 581 671 Accrued regulatory settlement — 500 Accrued environmental reserve — 1,241 Accrued self-insurance reserve 812 909 Accrued other 942 225 Total accrued liabilities $ 4,393 $ 8,430 |
DEBT AND CREDIT AGREEMENTS (Tab
DEBT AND CREDIT AGREEMENTS (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
DEBT AND CREDIT AGREEMENTS | |
Schedule of outstanding debt balances | December 31, 2017 2016 Line of credit and other notes payable $ 11,879 $ — NMTC note payable 2,600 2,600 Long-term debt 570 — Less: Current portion (14,252) — Long-term debt, net of current maturities $ 797 $ 2,600 |
Schedule of future annual principal payments | As of December 31, 2017, future annual principal payments on the Company’s outstanding debt obligations were as follows: 2018 $ 14,252 2019 367 2020 202 2021 114 2022 114 Total $ 15,049 |
LEASES (Tables)
LEASES (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
LEASES | |
Schedule of cost basis and accumulated depreciation of assets recorded under capital leases, which are included in property and equipment | December 31, 2017 2016 Cost $ 2,460 $ 1,616 Accumulated depreciation (424) (129) Net book value $ 2,036 $ 1,487 |
Schedule of future minimum annual lease payments under capital leases and operating leases | Capital Operating Leases Leases Total 2018 $ 826 $ 3,438 $ 4,264 2019 825 3,368 4,193 2020 144 2,695 2,839 2021 — 2,267 2,267 2022 — 2,270 2,270 2023 and thereafter — 8,460 8,460 Total $ 1,795 $ 22,498 $ 24,293 Less—portion representing interest at a weighted average annual rate of 5.0% (92) Principal 1,703 Less—current portion (762) Capital lease obligations, noncurrent portion $ 941 |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
FAIR VALUE MEASUREMENTS | |
Schedule of the fair values of the Company's financial assets | December 31, 2017 Level 1 Level 2 Level 3 Total Assets measured on a nonrecurring basis: Gearing Cicero Ave. facility $ — $ — $ 560 $ 560 Services assets — — 20 20 Total assets at fair value $ — $ — $ 580 $ 580 December 31, 2016 Level 1 Level 2 Level 3 Total Assets measured on a recurring basis: Corporate & municipal bonds and money market funds $ — $ 5,049 $ — $ 5,049 Assets measured on a nonrecurring basis: Gearing equipment — — 353 353 Gearing Cicero Ave. facility — — 560 560 Services assets — — 455 455 Total assets at fair value $ — $ 5,049 $ 1,368 $ 6,417 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
INCOME TAXES | |
Schedule of components of provision for income taxes | For the Years Ended December 31, 2017 2016 Current provision Federal $ — $ — Foreign — — State 5 (2) Total current benefit 5 (2) Deferred credit Federal 31,614 487 State 468 5,226 Total deferred credit 32,082 5,713 Decrease in deferred tax valuation allowance (37,132) (5,713) Total benefit for income taxes $ (5,045) $ (2) |
Schedule of tax effects of the temporary differences and NOL's that give rise to significant portions of deferred tax assets and liabilities | As of December 31, 2017 2016 Noncurrent deferred income tax assets: Net operating loss carryforwards $ 56,619 $ 79,966 Intangible assets 6,889 19,021 Accrual and reserves 2,402 5,201 Other 88 52 Total noncurrent deferred tax assets 65,998 104,240 Valuation allowance (66,491) (103,623) Noncurrent deferred tax assets, net of valuation allowance (493) 617 Noncurrent deferred income tax liabilities: Fixed assets (152) (617) Intangible assets — — Total noncurrent deferred tax liabilities (152) (617) Net deferred income tax liability $ (341) $ — |
Schedule of reconciliation of the beginning and ending amounts of the valuation | Valuation allowance as of December 31, 2016 $ (103,623) Gross decrease for current year activity 37,132 Valuation allowance as of December 31, 2017 $ (66,491) |
Schedule of reconciliation between the statutory U.S. federal income tax rate and the Company's effective income tax rate | For the Year Ended December 31, 2017 2016 Statutory U.S. federal income tax rate 34.0 % 34.0 % State and local income taxes, net of federal income tax benefit 3.4 34.4 Permanent differences (1.2) 12.7 Change in valuation allowance 446.7 (68.8) Change in uncertain tax positions 0.5 (14.8) Other 0.1 1.8 Effect of U.S. tax rate change (422.6) — Effective income tax rate 60.9 % (0.7) % |
Schedule of changes in the Company's uncertain income tax positions | For the Year Ended December 31, 2017 2016 Beginning balance $ 27 $ 56 Tax positions related to current year: Additions — — Reductions — — — — Tax positions related to prior years: Additions — — Reductions — — Settlements — — Lapses in statutes of limitations (26) (29) Additions from current year acquisitions — — (26) (29) Ending balance $ 1 $ 27 |
SHARE-BASED COMPENSATION (Table
SHARE-BASED COMPENSATION (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
SHARE-BASED COMPENSATION | |
Schedule of stock option activity | Weighted Average Aggregate Intrinsic Weighted Average Remaining Value Options Exercise Price Contractual Term (in thousands) Outstanding as of December 31, 2016 67,438 $ 24.96 Expired (250) 107.00 Outstanding as of December 31, 2017 67,188 $ 24.65 3.39 $ — Exercisable as of December 31, 2017 67,188 $ 24.65 3.39 $ — |
Summary of information with respect to all outstanding and exercisable stock options | Options Outstanding Options Exercisable Weighted Average Number of options Weighted Average Remaining Number Weighted Average Exercise Price or Range outstanding Exercise Price Contractual Term Exercisable Exercise Price $3.39 - $13.50 52,115 $ 6.29 4.01 years 52,115 $ 6.29 $54.40 - $92.50 5,823 57.67 2.07 years 5,823 57.67 $99.90 - $128.50 9,250 107.35 0.75 years 9,250 107.35 67,188 $ 24.65 3.39 years 67,188 $ 24.65 |
Schedule of RSU activity | Weighted Average Grant-Date Fair Value Number of Shares Per Share Unvested as of December 31, 2016 492,176 $ 3.56 Granted 288,866 $ 5.69 Vested (231,521) $ 3.93 Forfeited (37,379) $ 3.95 Unvested as of December 31, 2017 512,142 $ 4.57 |
Schedule of share-based compensation expense, net of taxes withheld | For the Years Ended December 31, 2017 2016 Share-based compensation expense: Cost of sales $ 101 $ 90 Selling, general and administrative 712 663 Income tax benefit (1) — — Net effect of share-based compensation expense on net income $ 813 $ 753 Reduction in earnings per share: Basic earnings per share $ 0.05 $ 0.05 Diluted earnings per share $ 0.05 $ 0.05 (1) Income tax benefit is not illustrated because the Company is currently in a full tax valuation allowance position and an actual income tax benefit was not realized for the years ended December 31, 2017 and 2016. The result of the income (loss) situation creates a timing difference, resulting in a deferred tax asset, which is fully reserved for in the Company’s valuation allowance. |
SEGMENT REPORTING (Tables)
SEGMENT REPORTING (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
SEGMENT REPORTING | |
Schedule of financial information by reportable segment | Towers and Process Heavy Fabrications Gearing Systems Corporate Eliminations Consolidated For the Year Ended December 31, 2017 Revenues from external customers $ 103,389 $ 26,006 $ 17,390 $ — $ — $ 146,785 Operating (loss) profit 2,667 (2,632) (2,269) (5,199) — (7,433) Depreciation and amortization 4,638 2,430 1,706 225 — 8,999 Capital expenditures 5,355 726 426 181 — 6,688 Assets held for sale — 560 — 20 — 580 Total assets 27,958 38,016 26,442 249,346 (229,412) 112,350 Towers and Heavy Fabrications Gearing Corporate Eliminations Consolidated For the Year Ended December 31, 2016 Revenues from external customers $ 160,210 $ 20,630 $ — $ — $ 180,840 Intersegment revenues — 18 — (18) — Net revenues 160,210 20,648 — (18) 180,840 Operating profit (loss) 12,788 (3,244) (7,636) 1 1,909 Depreciation and amortization 4,166 2,545 203 — 6,914 Capital expenditures 6,161 386 77 — 6,624 Assets held for sale — 353 455 — 808 Total assets 45,367 30,415 244,639 (202,759) 117,662 |
QUARTERLY FINANCIAL SUMMARY (43
QUARTERLY FINANCIAL SUMMARY (UNAUDITED) (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
QUARTERLY FINANCIAL SUMMARY (UNAUDITED) | |
Summary of selected financial results of operations | 2017 First Second Third Fourth Revenues $ 56,060 $ 43,362 $ 29,595 $ 17,768 Gross profit (loss) 6,374 3,872 1,014 (3,101) Operating profit (loss) 1,603 (516) (1,831) (6,689) Income (loss) from continuing operations, net of tax 6,482 (688) (2,049) (6,928) Net income (loss) 6,327 (780) (2,207) (6,981) Income (loss) from continuing operations per share: Basic $ 0.43 $ (0.05) $ (0.14) $ (0.45) Diluted $ 0.43 $ (0.05) $ (0.14) $ (0.45) Net income (loss) per share: Basic $ 0.42 $ (0.05) $ (0.15) $ (0.46) Diluted $ 0.42 $ (0.05) $ (0.15) $ (0.46) 2016 First Second Third Fourth Revenues $ 46,757 $ 43,380 $ 42,552 $ 48,151 Gross profit (loss) 3,962 4,142 5,331 4,704 Operating (loss) profit (224) 181 1,360 592 (Loss) income from continuing operations, net of tax (358) 42 1,245 406 Net (loss) income (377) (474) 872 298 (Loss) income from continuing operations per share: Basic $ (0.02) $ 0.00 $ 0.08 $ 0.03 Diluted $ (0.02) $ 0.00 $ 0.08 $ 0.03 Net (loss) income per share: Basic $ (0.03) $ (0.03) $ 0.06 $ 0.02 Diluted $ (0.03) $ (0.03) $ 0.06 $ 0.02 |
BUSINESS COMBINATION (Tables)
BUSINESS COMBINATION (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
BUSINESS COMBINATIONS | |
Summary of preliminary purchase price allocation based on estimated fair values of assets acquired and liabilities assumed as of the acquisition date | Allocation as of 3/31/2017 Measurement Period Adjustments Allocation as of 12/31/2017 Assets acquired and liabilities assumed: Cash and cash equivalents $ 63 $ (63) $ - Receivables 2,796 (96) 2,700 Inventories 4,998 179 5,177 Property and equipment 462 - 462 Noncompete agreements 170 - 170 Customer relationships 12,000 - 12,000 Trade names 1,100 - 1,100 Goodwill 5,568 (575) 4,993 Accounts payable (1,354) 2 (1,352) Accrued expenses (809) (67) (876) Deferred tax liabilities (5,391) - (5,391) Total purchase price $ 19,603 $ (620) $ 18,983 |
Schedule of preliminary pro forma information | This unaudited pro forma information is as follows (in thousands, except per share amounts): Year Ended December 31, 2017 2016 Total revenues $ $ Net (loss) income* $ $ Pro forma (loss) income per common share - basic $ $ Pro forma (loss) income per common share - diluted $ $ *The release of a portion of the tax provision related to the acquisition is presented within the year ended December 31, 2016 net income for pro forma as the release is considered to occur at the time of the acquisition. |
DESCRIPTION OF BUSINESS AND S45
DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017USD ($)segmentitemMW | Dec. 31, 2016USD ($) | Oct. 26, 2016USD ($) | |
BASIS OF PRESENTATION | |||
Depreciation Expense Decrease | $ 2,481 | ||
Description of Business | |||
Number of reportable segments | segment | 3 | ||
Liquidity | |||
Maximum borrowing capacity | $ 10,000 | ||
Maximum borrowing capacity of the face value of eligible A/R (as a percent) | 85.00% | ||
Maximum percentage of book value of inventories that may be financed | 50.00% | ||
Cash and cash equivalents and short-term investments | $ 78 | 21,870 | |
Increase (decrease) in Cash and cash equivalents and Short-term investments | 21,792 | ||
Current borrowing capacity | 11,796 | ||
Long-term Debt, Current Maturities | $ 114 | ||
Maximum borrowing capacity of the face value of machinery, equipment and property that may be financed | 50.00% | ||
Increase (Decrease) in Customer Deposits | $ (8,219) | 8,057 | |
Inventories, net | 19,279 | 21,159 | |
Increase (Decrease) in inventories | (7,057) | (3,060) | |
Total debt and capital lease obligations | 16,752 | ||
Long-term Debt and Capital Lease Obligations, Repayments of Principal in Next Twelve Months | 15,014 | ||
NMTC note payable | 15,049 | ||
Cash and Cash Equivalents and Short-Term Investments | |||
Cash and cash equivalents | 78 | 18,699 | |
Short-term investments | 0 | 3,171 | |
Interest income | 5 | 48 | |
Restricted Cash | |||
Restricted cash | $ 39 | ||
Credit facility | |||
Liquidity | |||
Maximum borrowing capacity | $ 25,000 | $ 10,000 | |
Period of line of credit | 3 years | ||
Maximum borrowing capacity of the face value of eligible A/R (as a percent) | 85.00% | ||
Maximum percentage of book value of inventories that may be financed | 50.00% | ||
Long-term Line of Credit | $ 10,733 | ||
Current borrowing capacity | 11,796 | ||
Outstanding indebtedness under the Credit Facility | $ 0 | ||
Maximum borrowing capacity of the face value of machinery, equipment and property that may be financed | 50.00% | ||
Term loans and notes payable | |||
Liquidity | |||
Amount outstanding | $ 570 | ||
NMTC note payable | $ 2,600 | ||
New Markets Tax Credit Transaction | |||
Principles of Consolidation and Basis of Presentation | |||
Number of VIE's | item | 2 | ||
Minimum | Towers and Heavy Fabrications | |||
Description of Business | |||
Power generating capacity of turbines that towers produced annually can support (in megawatts) | MW | 1,100 | ||
Maximum | Towers and Heavy Fabrications | |||
Description of Business | |||
Annual tower production capacity (in towers) | item | 550 |
DESCRIPTION OF BUSINESS AND S46
DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - A/R, Allowances of A/R and PPE - (Details) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017USD ($)item | Dec. 31, 2016USD ($) | |
Accounts Receivable | ||
Number of days for evaluating significant balances for credit risk | 30 days | |
Number of largest customers | item | 5 | |
Allowance for Doubtful Accounts | ||
Bad debt expense | $ 80 | $ 65 |
LONG-LIVED ASSETS | ||
Depreciation & amortization expense | 7,235 | 6,471 |
Interest cost capitalized | $ 0 | $ 0 |
Consolidated revenues | Customer concentration | ||
Accounts Receivable | ||
Concentration risk (as a percent) | 85.00% | 91.00% |
Outstanding A/R balances | Customer concentration | ||
Accounts Receivable | ||
Concentration risk (as a percent) | 57.00% | 86.00% |
DESCRIPTION OF BUSINESS AND S47
DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Summary of Warranty Liability - (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Changes in the carrying amount of the total product warranty liability | ||
Balance, beginning of period | $ 671 | $ 601 |
Addition to (reduction of) warranty reserve | (28) | 83 |
Warranty claims | (62) | (13) |
Balance, end of period | $ 581 | $ 671 |
Minimum | ||
Warranty Liability | ||
Term of warranty | 1 year | |
Maximum | ||
Warranty Liability | ||
Term of warranty | 5 years |
EARNINGS PER SHARE (Details)
EARNINGS PER SHARE (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | |
NET (LOSS) INCOME PER COMMON SHARE—BASIC: | ||||||||||
Net (loss) income | $ (6,981) | $ (2,207) | $ (780) | $ 6,327 | $ 298 | $ 872 | $ (474) | $ (377) | $ (3,641) | $ 319 |
Weighted average number of common shares outstanding | 15,053,000 | 14,843,000 | ||||||||
Basic net (loss) income per share | $ (0.46) | $ (0.15) | $ (0.05) | $ 0.42 | $ 0.02 | $ 0.06 | $ (0.03) | $ (0.03) | $ (0.24) | $ 0.02 |
NET (LOSS) INCOME PER COMMON SHARE-DILUTED: | ||||||||||
Net (loss) income | $ (3,641) | $ 319 | ||||||||
Weighted average number of common shares outstanding | 15,053,000 | 14,843,000 | ||||||||
Common stock equivalents: | ||||||||||
Stock options and non-vested stock awards (in shares) | 238 | |||||||||
Weighted average number of common shares outstanding | 15,053,000 | 15,081,000 | ||||||||
Diluted net (loss) income per share | $ (0.46) | $ (0.15) | $ (0.05) | $ 0.42 | $ 0.02 | $ 0.06 | $ (0.03) | $ (0.03) | $ (0.24) | $ 0.02 |
Stock options and restricted stock units granted and outstanding excluded from the computation of diluted earnings per share, due to the anti-dilutive effect (in shares) | 579,330 |
DISCONTINUED OPERATIONS (Detail
DISCONTINUED OPERATIONS (Details) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Jun. 30, 2016USD ($)item | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | |
DISCONTINUED OPERATIONS | |||
Loss from discontinued operations | $ 458 | $ 1,016 | |
Number of warranty claims | item | 2 | ||
Additional warranty expense | $ 427 | 139 | |
Results of operations, which are reflected as discontinued operations | |||
LOSS FROM DISCONTINUED OPERATIONS | (458) | (1,016) | |
Discontinued Operations, Held-for-sale | |||
Assets: | |||
Accounts receivable, net | 11 | 172 | |
Inventories, net | 9 | 807 | |
Prepaid expenses and other current assets | 55 | ||
Assets Held For Sale Related To Discontinued Operations | 20 | 1,034 | |
Impairment of discontinued assets held for sale | (579) | ||
Total Assets Held For Sale Related To Discontinued Operations | 20 | 455 | |
Liabilities: | |||
Accounts payable | 22 | ||
Accrued liabilities | 27 | 121 | |
Customer deposits and other current obligations | 3 | 3 | |
Other long-term liabilities | 3 | ||
Total Liabilities Held For Sale Related To Discontinued Operations | 30 | 149 | |
Service Segment | |||
DISCONTINUED OPERATIONS | |||
Loss from discontinued operations | 458 | 1,016 | |
Results of operations, which are reflected as discontinued operations | |||
Revenues | 151 | 109 | |
Cost of sales | (391) | (1,006) | |
Selling, general and administrative | (57) | (69) | |
Interest expense, net | (5) | ||
Impairment of held for sale assets and liabilities and gain on sale of assets | (161) | (45) | |
LOSS FROM DISCONTINUED OPERATIONS | $ (458) | $ (1,016) |
CASH AND CASH EQUIVALENTS AND50
CASH AND CASH EQUIVALENTS AND SHORT-TERM INVESTMENTS (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Cash and cash equivalents and short-term investments | ||
Total cash and cash equivalents | $ 78 | $ 18,699 |
Short-term investments (available-for-sale) | 0 | 3,171 |
Total cash and cash equivalents and short-term investments | 78 | 21,870 |
Cash | ||
Cash and cash equivalents and short-term investments | ||
Total cash and cash equivalents | $ 78 | 16,821 |
Money market funds | ||
Cash and cash equivalents and short-term investments | ||
Total cash and cash equivalents | 1,878 | |
Corporate & municipal bonds | ||
Cash and cash equivalents and short-term investments | ||
Short-term investments (available-for-sale) | $ 3,171 |
ALLOWANCE FOR DOUBTFUL ACCOUN51
ALLOWANCE FOR DOUBTFUL ACCOUNTS (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Activity in the accounts receivable allowance from continuing operations | ||
Balance at beginning of period | $ 145 | $ 84 |
Bad debt expense | 80 | 65 |
Other adjustments | (4) | |
Balance at end of period | $ 225 | $ 145 |
INVENTORIES (Details)
INVENTORIES (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
INVENTORIES | ||
Raw materials | $ 11,945 | $ 14,174 |
Work-in-process | 6,305 | 5,321 |
Finished goods | 3,538 | 3,342 |
Gross inventories | 21,788 | 22,837 |
Less: Reserve for excess and obsolete inventory | (2,509) | (1,678) |
Net inventories | $ 19,279 | $ 21,159 |
LONG-LIVED ASSETS (Details)
LONG-LIVED ASSETS (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
PROPERTY AND EQUIPMENT | ||
Property and equipment, gross | $ 145,734 | $ 139,969 |
Less-accumulated depreciation and amortization | (90,041) | (85,363) |
Property and equipment, net | 55,693 | 54,606 |
Commitments within construction in progress | 132 | 1,220 |
Impairment charge recorded to reduce the carrying value of assets to fair value | 80 | |
Gearing | ||
PROPERTY AND EQUIPMENT | ||
Impairment charge recorded to reduce the carrying value of assets to fair value | 0 | |
Land | ||
PROPERTY AND EQUIPMENT | ||
Property and equipment, gross | 1,423 | 1,982 |
Buildings | ||
PROPERTY AND EQUIPMENT | ||
Property and equipment, gross | $ 22,998 | 20,874 |
Life | 39 years | |
Machinery and equipment | ||
PROPERTY AND EQUIPMENT | ||
Property and equipment, gross | $ 103,878 | 98,656 |
Machinery and equipment | Minimum | ||
PROPERTY AND EQUIPMENT | ||
Life | 2 years | |
Machinery and equipment | Maximum | ||
PROPERTY AND EQUIPMENT | ||
Life | 10 years | |
Office furniture and equipment | ||
PROPERTY AND EQUIPMENT | ||
Property and equipment, gross | $ 4,202 | 3,648 |
Office furniture and equipment | Minimum | ||
PROPERTY AND EQUIPMENT | ||
Life | 3 years | |
Office furniture and equipment | Maximum | ||
PROPERTY AND EQUIPMENT | ||
Life | 7 years | |
Leasehold improvements | ||
PROPERTY AND EQUIPMENT | ||
Property and equipment, gross | $ 9,095 | 8,720 |
Construction in progress | ||
PROPERTY AND EQUIPMENT | ||
Property and equipment, gross | $ 4,138 | $ 6,089 |
LONG-LIVED ASSETS - Intangible
LONG-LIVED ASSETS - Intangible Assets (Details) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017USD ($)series | Dec. 31, 2016USD ($) | Mar. 31, 2017USD ($) | |
INTANGIBLE ASSETS | |||
Goodwill | $ 4,993 | ||
Cost Basis | 25,248 | $ 11,978 | |
Accumulated Amortization | (9,170) | (7,406) | |
Net Book Value | $ 16,078 | $ 4,572 | |
Remaining Weighted Average Amortization Period | 8 years 9 months 18 days | 10 years 6 months | |
Intangible assets | $ 16,078 | ||
Amortization expense | 1,764 | $ 444 | |
Estimated future amortization expense | |||
2,018 | 1,884 | ||
2,019 | 1,884 | ||
2,020 | 1,884 | ||
2,021 | 1,884 | ||
2,022 | 1,884 | ||
2023 and thereafter | 6,658 | ||
Net Book Value | $ 16,078 | 4,572 | |
Minimum | |||
INTANGIBLE ASSETS | |||
Estimated useful life | 6 years | ||
Maximum | |||
INTANGIBLE ASSETS | |||
Estimated useful life | 20 years | ||
Red Wolf | |||
INTANGIBLE ASSETS | |||
Goodwill | $ 4,993 | $ 5,568 | |
Remaining Weighted Average Amortization Period | 9 years 4 months 24 days | ||
Discount rate | 15.00% | ||
Red Wolf | Goodwill | |||
INTANGIBLE ASSETS | |||
Number of weighted average scenarios | series | 3 | ||
Discount rate | 19.50% | ||
Impairment of goodwill | $ 0 | ||
Red Wolf | Minimum | |||
INTANGIBLE ASSETS | |||
Estimated useful life | 5 years | ||
Red Wolf | Maximum | |||
INTANGIBLE ASSETS | |||
Estimated useful life | 11 years | ||
Noncompete agreements | |||
INTANGIBLE ASSETS | |||
Cost Basis | $ 170 | ||
Accumulated Amortization | (26) | ||
Net Book Value | $ 144 | ||
Remaining Weighted Average Amortization Period | 5 years 1 month 6 days | ||
Estimated future amortization expense | |||
Net Book Value | $ 144 | ||
Noncompete agreements | Red Wolf | |||
INTANGIBLE ASSETS | |||
Remaining Weighted Average Amortization Period | 6 years | ||
Customer relationships | |||
INTANGIBLE ASSETS | |||
Cost Basis | $ 15,979 | 3,979 | |
Accumulated Amortization | (4,992) | (3,726) | |
Net Book Value | $ 10,987 | $ 253 | |
Remaining Weighted Average Amortization Period | 8 years | 5 years 9 months 18 days | |
Estimated future amortization expense | |||
Net Book Value | $ 10,987 | $ 253 | |
Customer relationships | Red Wolf | |||
INTANGIBLE ASSETS | |||
Remaining Weighted Average Amortization Period | 9 years | ||
Trade names | |||
INTANGIBLE ASSETS | |||
Cost Basis | $ 9,099 | 7,999 | |
Accumulated Amortization | (4,152) | (3,680) | |
Net Book Value | $ 4,947 | $ 4,319 | |
Remaining Weighted Average Amortization Period | 10 years 6 months | 10 years 9 months 18 days | |
Estimated future amortization expense | |||
Net Book Value | $ 4,947 | $ 4,319 | |
Trade names | Red Wolf | |||
INTANGIBLE ASSETS | |||
Remaining Weighted Average Amortization Period | 14 years |
ACCRUED LIABILITIES (Details)
ACCRUED LIABILITIES (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
ACCRUED LIABILITIES | |||
Accrued payroll and benefits | $ 1,797 | $ 4,422 | |
Accrued property taxes | 144 | 99 | |
Income taxes payable | 77 | 127 | |
Accrued professional fees | 40 | 236 | |
Accrued warranty liability | 581 | 671 | $ 601 |
Accrued regulatory settlement | 500 | ||
Accrued environmental reserve | 1,241 | ||
Accrued self-insurance reserve | 812 | 909 | |
Accrued other | 942 | 225 | |
Total accrued liabilities | $ 4,393 | $ 8,430 |
DEBT AND CREDIT AGREEMENTS (Det
DEBT AND CREDIT AGREEMENTS (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Oct. 26, 2016 | |
Credit Facilities | |||
Long-term debt, net of current maturities | $ 797 | $ 2,600 | |
Future annual principal payments | |||
2,018 | 14,252 | ||
2,019 | 367 | ||
2,020 | 202 | ||
2,021 | 114 | ||
2,022 | 114 | ||
Total | 15,049 | ||
Maximum borrowing capacity | $ 10,000 | ||
Maximum borrowing capacity of the face value of eligible A/R (as a percent) | 85.00% | ||
Maximum percentage of book value of inventories that may be financed | 50.00% | ||
Maximum borrowing capacity of the face value of machinery, equipment and property that may be financed | 50.00% | ||
Annual unused line fee (as a percent) | 0.50% | ||
Current borrowing capacity | $ 11,796 | ||
Net proceeds on long-term debt | 457 | ||
Current maturities of long-term debt | $ 114 | ||
Minimum | |||
Future annual principal payments | |||
Variable rate basis | 2.25% | ||
Interest rate margin (as a percent) | 0.00% | ||
Maximum | |||
Future annual principal payments | |||
Variable rate basis | 3.00% | ||
Interest rate margin (as a percent) | 1.00% | ||
New Markets Tax Credit Transaction | |||
Credit Facilities | |||
Long-term debt, net of current maturities | $ 2,600 | ||
Development Corporation of Abilene loan | |||
Credit Facilities | |||
Long-term debt | 570 | ||
Long-term debt, net of current maturities | 456 | ||
Future annual principal payments | |||
Current maturities of long-term debt | 114 | ||
Capital Expenditure loan | |||
Credit Facilities | |||
Long-term debt | 1,146 | ||
Future annual principal payments | |||
Current maturities of long-term debt | 804 | ||
Credit facility | |||
Future annual principal payments | |||
Maximum borrowing capacity | $ 25,000 | $ 10,000 | |
Maximum borrowing capacity of the face value of eligible A/R (as a percent) | 85.00% | ||
Maximum percentage of book value of inventories that may be financed | 50.00% | ||
Maximum borrowing capacity of the face value of machinery, equipment and property that may be financed | 50.00% | ||
Outstanding indebtedness under the Credit Facility | $ 0 | ||
Current borrowing capacity | 11,796 | ||
Term loans and notes payable | |||
Credit Facilities | |||
Line of credit and other notes payable | 11,879 | ||
NMTC note payable | 2,600 | 2,600 | |
Long-term debt | 570 | ||
Less: Current portion | (14,252) | ||
Long-term debt, net of current maturities | 797 | $ 2,600 | |
Future annual principal payments | |||
Total | $ 2,600 |
LEASES (Details)
LEASES (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
LEASES | ||
Rental expense | $ 3,378 | $ 2,996 |
Minimum | ||
LEASES | ||
Operating lease term | 3 years | |
Maximum | ||
LEASES | ||
Operating lease term | 15 years |
LEASES - Capital and Operating
LEASES - Capital and Operating Leases - (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Cost basis and accumulated depreciation of assets recorded under capital leases | ||
Depreciation expense recorded under capital leases | $ 7,235 | $ 6,471 |
Capital Leases | ||
2,018 | 826 | |
2,019 | 825 | |
2,020 | 144 | |
Total | 1,795 | |
Less-portion representing interest at a weighted average annual rate of 5.0% | (92) | |
Principal | 1,703 | |
Less-current portion | (762) | (465) |
Capital lease obligations, noncurrent portion | $ 941 | 1,038 |
Weighted average annual interest rate (as a percent) | 5.00% | |
Operating Leases | ||
2,018 | $ 3,438 | |
2,019 | 3,368 | |
2,020 | 2,695 | |
2,021 | 2,267 | |
2,022 | 2,270 | |
2023 and thereafter | 8,460 | |
Total future minimum lease payments | 22,498 | |
Total | ||
2,018 | 4,264 | |
2,019 | 4,193 | |
2,020 | 2,839 | |
2,021 | 2,267 | |
2,022 | 2,270 | |
2023 and thereafter | 8,460 | |
Future minimum lease payments | 24,293 | |
Capital leases | ||
Cost basis and accumulated depreciation of assets recorded under capital leases | ||
Cost | 2,460 | 1,616 |
Accumulated depreciation | (424) | (129) |
Net book value | 2,036 | 1,487 |
Depreciation expense recorded under capital leases | $ 295 | $ 273 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Sep. 30, 2015 | Dec. 31, 2017 | |
Environmental Compliance and Remediation Liabilities | ||
Increase in estimated cost of remediation | $ 874 | |
Accrual for Environmental Loss Contingencies | $ 0 | |
Liquidated Damages | ||
Liquidated damages | 0 | |
Reserve for liquidated damages | $ 0 | |
Minimum | ||
Warranty Liability | ||
Term of warranty | 1 year | |
Maximum | ||
Warranty Liability | ||
Term of warranty | 5 years |
COMMITMENTS AND CONTINGENCIES -
COMMITMENTS AND CONTINGENCIES - Collective Bargaining Agreements (Details) - Total Company Employees - Coverage under collective bargaining agreements | 12 Months Ended |
Dec. 31, 2017agreement | |
Collective bargaining agreements | |
Percentage of company's employees covered | 24.00% |
Number of agreements | 2 |
COMMITMENTS AND CONTINGENCIES61
COMMITMENTS AND CONTINGENCIES - Tax Credit Program and Worker's Compensation Reserves (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Jul. 20, 2011 | |
Workers' Compensation Reserves | |||
Amount accrued for self-insured workers' compensation claims | $ 812 | $ 909 | |
New Markets Tax Credit Transaction | |||
New Markets Tax Credit program | |||
Future tax credit that can be generated | $ 3,900 | ||
Tax credit period | 7 years | ||
Period which facility must operate and be in compliance | 7 years | ||
New Markets Tax Credit Transaction | Broadwind Services, LLC | |||
New Markets Tax Credit program | |||
Gross loan from AMCREF to Broadwind Services | $ 10,000 |
FAIR VALUE MEASUREMENTS (Detail
FAIR VALUE MEASUREMENTS (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
FAIR VALUE MEASUREMENTS | ||
Corporate & municipal bonds and money market funds | $ 78 | $ 21,870 |
Property plant and equipment at fair value | 560 | |
Impairment charge recorded to reduce the carrying value of assets to fair value | 80 | |
Gearing | ||
FAIR VALUE MEASUREMENTS | ||
Property plant and equipment at fair value | 353 | |
Impairment charge recorded to reduce the carrying value of assets to fair value | 0 | |
Gearing equipment | ||
FAIR VALUE MEASUREMENTS | ||
Property plant and equipment at fair value | 0 | 353 |
Level 3 | Gearing | ||
FAIR VALUE MEASUREMENTS | ||
Property plant and equipment at fair value | 353 | |
Recurring | Municipal bonds and money market funds | ||
FAIR VALUE MEASUREMENTS | ||
Corporate & municipal bonds and money market funds | 5,049 | |
Recurring | Level 2 | Municipal bonds and money market funds | ||
FAIR VALUE MEASUREMENTS | ||
Corporate & municipal bonds and money market funds | 5,049 | |
Nonrecurring | ||
FAIR VALUE MEASUREMENTS | ||
Total assets at fair value | 580 | 6,417 |
Nonrecurring | Services | ||
FAIR VALUE MEASUREMENTS | ||
Property plant and equipment at fair value | 20 | 455 |
Nonrecurring | Gearing Cicero Ave. facility | Gearing | ||
FAIR VALUE MEASUREMENTS | ||
Property plant and equipment at fair value | 560 | 560 |
Nonrecurring | Level 2 | ||
FAIR VALUE MEASUREMENTS | ||
Total assets at fair value | 5,049 | |
Nonrecurring | Level 3 | ||
FAIR VALUE MEASUREMENTS | ||
Total assets at fair value | 580 | 1,368 |
Nonrecurring | Level 3 | Services | ||
FAIR VALUE MEASUREMENTS | ||
Property plant and equipment at fair value | 20 | 455 |
Nonrecurring | Level 3 | Gearing Cicero Ave. facility | Gearing | ||
FAIR VALUE MEASUREMENTS | ||
Property plant and equipment at fair value | $ 560 | $ 560 |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Current provision | |||
State | $ 5 | $ (2) | |
Total current (benefit) provision | 5 | (2) | |
Deferred credit | |||
Federal | 31,614 | 487 | |
State | 468 | 5,226 | |
Total deferred credit | 32,082 | 5,713 | |
Decrease in deferred tax valuation allowance | (37,132) | (5,713) | |
Total provision (benefit) for income taxes | $ (5,045) | $ (2) | |
Statutory U.S. federal income tax rate (as a percent) | 34.00% | 34.00% | |
Other tax expense (benefit) | $ 5,060 | ||
Decrease in net deferred tax assets | $ 34,372 | ||
Forecast | |||
Deferred credit | |||
Statutory U.S. federal income tax rate (as a percent) | 21.00% |
INCOME TAXES - Operating Loss C
INCOME TAXES - Operating Loss Carryforwards, Summary of Deferred Taxes and Temporary Tax Differences (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Noncurrent deferred income tax assets: | ||
Net operating loss carryforwards | $ 56,619 | $ 79,966 |
Intangible assets | 6,889 | 19,021 |
Accrual and reserves | 2,402 | 5,201 |
Other | 88 | 52 |
Total noncurrent deferred tax assets | 65,998 | 104,240 |
Valuation allowance | (66,491) | (103,623) |
Noncurrent deferred tax assets, net of valuation allowance | 617 | |
Noncurrent deferred income tax liabilities: | ||
Noncurrent deferred tax assets, net of valuation allowance | (493) | |
Fixed assets | (152) | (617) |
Total noncurrent deferred tax liabilities | (152) | (617) |
Net deferred income tax liability | (341) | |
Movement in Valuation Allowances and Reserves [Roll Forward] | ||
Valuation allowance at the beginning of the period | (103,623) | |
Gross decrease for current year activity | 37,132 | 5,713 |
Valuation allowance at the end of the period | (66,491) | $ (103,623) |
Federal | ||
Operating loss carryforwards | ||
Net operating loss carryforwards | 227,871 | |
State | ||
Operating loss carryforwards | ||
Net operating loss carryforwards | $ 227,871 |
INCOME TAXES - Tax Statutory Ra
INCOME TAXES - Tax Statutory Rate Reconciliation and Changes in Uncertain Income Tax Positions (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Reconciliation of the tax (benefit) provision computed at the statutory rate to the effective tax rate | ||
Statutory U.S. federal income tax rate (as a percent) | 34.00% | 34.00% |
State and local income taxes, net of federal income tax benefit (as a percent) | 3.40% | 34.40% |
Permanent differences (as a percent) | (1.20%) | 12.70% |
Change in valuation allowance (as a percent) | 446.70% | (68.80%) |
Change in uncertain tax positions (as a percent) | 0.50% | (14.80%) |
Other (as a percent) | 0.10% | 1.80% |
Effect of U.S. tax rate change | (422.60%) | |
Effective income tax rate (as a percent) | 60.90% | (0.70%) |
Changes in the uncertain income tax positions | ||
Beginning balance | $ 27 | $ 56 |
Tax positions related to prior years: | ||
Lapses in statutes of limitations | (26) | (29) |
Total | (26) | (29) |
Ending balance | 1 | 27 |
Amount of unrecognized tax benefits that would affect the effective tax rate if the tax benefits were recognized | 1 | |
Penalties and Interest Accrued | $ 0 | $ 6 |
INCOME TAXES - Tax Summary of S
INCOME TAXES - Tax Summary of Stockholder Rights Plan (Details) $ / shares in Units, $ in Thousands | Feb. 13, 2013item$ / sharesshares | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) |
Rights Plan | ||||
Annual limitation on net operating losses | $ 14,284 | |||
Unrecognized tax benefits | 1 | $ 27 | $ 56 | |
Unrecognized tax benefits, including accrued interest and penalties | 69 | |||
Accrued interest or penalties related to uncertain tax positions recognized | 1 | $ 42 | ||
Favorable Tax Impact Member | ||||
Rights Plan | ||||
Unrecognized tax benefits, including accrued interest and penalties | $ 1 | |||
Series A Junior Participating Preferred Stock | ||||
Rights Plan | ||||
Number of rights for each outstanding share of common stock | item | 1 | |||
Number of preferred share purchase rights for each outstanding share of the company's common stock | shares | 0.001 | |||
Exercise price (in dollars per right) | $ / shares | $ 9.81 | |||
Series A Junior Participating Preferred Stock | Minimum | ||||
Rights Plan | ||||
Threshold percentage of beneficial ownership for significant dilution of ownership interest | 4.90% | |||
Current beneficial ownership percentage that will not trigger the preferred share purchase rights unless they acquire additional shares | 4.90% | |||
Series A Junior Participating Preferred Stock | Maximum | ||||
Rights Plan | ||||
Beneficial ownership percentage of any person or group, together with its affiliates and associates | 4.90% |
SHARE-BASED COMPENSATION (Detai
SHARE-BASED COMPENSATION (Details) | 12 Months Ended |
Dec. 31, 2017$ / sharesshares | |
2007 EIP | |
SHARE-BASED COMPENSATION | |
Number of shares of common stock reserved for grants | 691,051 |
Common stock issued under share-based compensation plan | 253,659 |
2012 EIP | |
SHARE-BASED COMPENSATION | |
Number of shares of common stock reserved for grants | 1,200,000 |
Common stock issued under share-based compensation plan | 619,608 |
2015 EIP | |
SHARE-BASED COMPENSATION | |
Number of shares of common stock reserved for grants | 1,100,000 |
Common stock issued under share-based compensation plan | 0 |
Stock Options | |
SHARE-BASED COMPENSATION | |
Expiration term | 10 years |
Summary of the stock option activity | |
Outstanding at the beginning of the period (in shares) | 67,438 |
Granted (in shares) | 0 |
Expired (in shares) | (250) |
Outstanding at the end of the period (in shares) | 67,188 |
Exercisable (in shares) | 67,188 |
Weighted Average Exercise Price | |
Outstanding at the beginning of the period (in dollars per share) | $ / shares | $ 24.96 |
Expired (in dollars per share) | $ / shares | 107 |
Outstanding at the end of the period (in dollars per share) | $ / shares | 24.65 |
Exercisable (in dollars per share) | $ / shares | $ 24.65 |
Weighted Average Remaining Contractual Term | |
Outstanding at the end of the period | 3 years 4 months 21 days |
Exercisable | 3 years 4 months 21 days |
Stock Options | 2007 EIP | |
SHARE-BASED COMPENSATION | |
Number of shares reserved | 29,983 |
Stock Options | 2012 EIP | |
SHARE-BASED COMPENSATION | |
Number of shares reserved | 37,205 |
Stock Options | Minimum | |
SHARE-BASED COMPENSATION | |
Vesting term | 1 year |
Stock Options | Maximum | |
SHARE-BASED COMPENSATION | |
Vesting term | 5 years |
RSU | 2007 EIP | |
SHARE-BASED COMPENSATION | |
Number of shares reserved | 0 |
RSU | 2012 EIP | |
SHARE-BASED COMPENSATION | |
Number of shares reserved | 18,393 |
RSU | 2015 EIP | |
SHARE-BASED COMPENSATION | |
Number of shares reserved | 493,749 |
RSU | Minimum | |
SHARE-BASED COMPENSATION | |
Vesting term | 1 year |
RSU | Maximum | |
SHARE-BASED COMPENSATION | |
Vesting term | 5 years |
SHARE-BASED COMPENSATION - Opti
SHARE-BASED COMPENSATION - Options Exercise Price Range, Outstanding and Exercisable (Details) - $ / shares | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Options Outstanding | ||
Number of options outstanding (in shares) | 67,188 | |
Weighted Average Exercise Price (in dollars per share) | $ 24.65 | |
Weighted Average Remaining Contractual Term | 3 years 4 months 21 days | |
Options Exercisable | ||
Number Exercisable (in shares) | 67,188 | |
Weighted Average Exercise Price (in dollars per share) | $ 24.65 | |
$3.39-$13.50 | ||
Outstanding and exercisable stock options under the EIP | ||
Exercise price, low end of range (in dollars per share) | $ 3.39 | |
Exercise price, high end of range (in dollars per share) | $ 13.50 | |
Options Outstanding | ||
Number of options outstanding (in shares) | 52,115 | |
Weighted Average Exercise Price (in dollars per share) | $ 6.29 | |
Weighted Average Remaining Contractual Term | 4 years 4 days | |
Options Exercisable | ||
Number Exercisable (in shares) | 52,115 | |
Weighted Average Exercise Price (in dollars per share) | $ 6.29 | |
$54.40-$92.50 | ||
Outstanding and exercisable stock options under the EIP | ||
Exercise price, low end of range (in dollars per share) | 54.40 | |
Exercise price, high end of range (in dollars per share) | $ 92.50 | |
Options Outstanding | ||
Number of options outstanding (in shares) | 5,823 | |
Weighted Average Exercise Price (in dollars per share) | $ 57.67 | |
Weighted Average Remaining Contractual Term | 2 years 26 days | |
Options Exercisable | ||
Number Exercisable (in shares) | 5,823 | |
Weighted Average Exercise Price (in dollars per share) | $ 57.67 | |
$99.90-$128.50 | ||
Outstanding and exercisable stock options under the EIP | ||
Exercise price, low end of range (in dollars per share) | $ 99.90 | |
Exercise price, high end of range (in dollars per share) | $ 128.50 | |
Options Outstanding | ||
Number of options outstanding (in shares) | 9,250 | |
Weighted Average Exercise Price (in dollars per share) | $ 107.35 | |
Weighted Average Remaining Contractual Term | 9 months | |
Options Exercisable | ||
Number Exercisable (in shares) | 9,250 | |
Weighted Average Exercise Price (in dollars per share) | $ 107.35 |
SHARE-BASED COMPENSATION - Summ
SHARE-BASED COMPENSATION - Summary of Restricted Stock Units (Details) - $ / shares | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Stock Options | ||
Weighted Average Grant-Date Fair Value Per Share | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross | 0 | |
Forfeiture rate (as percent) | 25.00% | 25.00% |
RSU | ||
Summary of the restricted stock unit activity | ||
Unvested at the beginning of the period (in shares) | 492,176 | |
Granted (in shares) | 288,866 | |
Vested (in shares) | (231,521) | |
Forfeited (in shares) | (37,379) | |
Unvested at the end of the period (in shares) | 512,142 | 492,176 |
Weighted Average Grant-Date Fair Value Per Share | ||
Unvested at the beginning of the period (in dollars per share) | $ 3.56 | |
Granted (in dollars per share) | 5.69 | |
Vested (in dollars per share) | 3.93 | |
Forfeited (in dollars per share) | 3.95 | |
Unvested at the end of the period (in dollars per share) | $ 4.57 | $ 3.56 |
SHARE-BASED COMPENSATION - Su70
SHARE-BASED COMPENSATION - Summary of Share-Based Compensation Expense (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Summary of share-based compensation expense | ||
Benefit for income taxes | $ (5,045) | $ (2) |
Net effect of share-based compensation expense on net loss | $ 813 | $ 753 |
Basic earnings per share | $ 0.05 | $ 0.05 |
Diluted earnings per share | $ 0.05 | $ 0.05 |
Pre-tax compensation expense for all unvested share-based awards | $ 1,211 | |
Cost of sales: | ||
Summary of share-based compensation expense | ||
Share-based compensation expense | 101 | $ 90 |
Selling, general and administrative | ||
Summary of share-based compensation expense | ||
Share-based compensation expense | $ 712 | $ 663 |
SEGMENT REPORTING (Details)
SEGMENT REPORTING (Details) $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||||
Dec. 31, 2017USD ($) | Sep. 30, 2017USD ($) | Jun. 30, 2017USD ($) | Mar. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Sep. 30, 2016USD ($) | Jun. 30, 2016USD ($) | Mar. 31, 2016USD ($) | Dec. 31, 2017USD ($)segmentitemMW | Dec. 31, 2016USD ($) | |
SEGMENT REPORTING | ||||||||||
Number of reportable segments | segment | 3 | |||||||||
Revenues from external customers | $ 146,785 | $ 180,840 | ||||||||
Net revenues | $ 17,768 | $ 29,595 | $ 43,362 | $ 56,060 | $ 48,151 | $ 42,552 | $ 43,380 | $ 46,757 | 180,840 | |
Operating (loss) profit | (6,689) | $ (1,831) | $ (516) | $ 1,603 | 592 | $ 1,360 | $ 181 | $ (224) | (7,433) | 1,909 |
Depreciation and amortization | 8,999 | 6,914 | ||||||||
Capital expenditures | 6,688 | 6,624 | ||||||||
Assets held for sale | 580 | 808 | 580 | 808 | ||||||
Total Assets | 112,350 | 117,662 | 112,350 | 117,662 | ||||||
Towers and Heavy Fabrications | ||||||||||
SEGMENT REPORTING | ||||||||||
Revenues from external customers | 103,389 | 160,210 | ||||||||
Net revenues | 160,210 | |||||||||
Operating (loss) profit | 2,667 | 12,788 | ||||||||
Depreciation and amortization | 4,638 | 4,166 | ||||||||
Capital expenditures | 5,355 | 6,161 | ||||||||
Total Assets | 27,958 | 45,367 | $ 27,958 | 45,367 | ||||||
Towers and Heavy Fabrications | Minimum | ||||||||||
SEGMENT REPORTING | ||||||||||
Power generating capacity of turbines that towers produced annually can support (in megawatts) | MW | 1,100 | |||||||||
Towers and Heavy Fabrications | Maximum | ||||||||||
SEGMENT REPORTING | ||||||||||
Annual tower production capacity (in towers) | item | 550 | |||||||||
Gearing | ||||||||||
SEGMENT REPORTING | ||||||||||
Revenues from external customers | $ 26,006 | 20,630 | ||||||||
Intersegment revenues | 18 | |||||||||
Net revenues | 20,648 | |||||||||
Operating (loss) profit | (2,632) | (3,244) | ||||||||
Depreciation and amortization | 2,430 | 2,545 | ||||||||
Capital expenditures | 726 | 386 | ||||||||
Assets held for sale | 560 | 353 | 560 | 353 | ||||||
Total Assets | 38,016 | 30,415 | 38,016 | 30,415 | ||||||
Process Systems | ||||||||||
SEGMENT REPORTING | ||||||||||
Revenues from external customers | 17,390 | |||||||||
Operating (loss) profit | (2,269) | |||||||||
Depreciation and amortization | 1,706 | |||||||||
Capital expenditures | 426 | |||||||||
Total Assets | 26,442 | 26,442 | ||||||||
Corporate | ||||||||||
SEGMENT REPORTING | ||||||||||
Operating (loss) profit | (5,199) | (7,636) | ||||||||
Depreciation and amortization | 225 | 203 | ||||||||
Capital expenditures | 181 | 77 | ||||||||
Assets held for sale | 20 | 455 | 20 | 455 | ||||||
Total Assets | 249,346 | 244,639 | 249,346 | 244,639 | ||||||
Eliminations | ||||||||||
SEGMENT REPORTING | ||||||||||
Intersegment revenues | (18) | |||||||||
Net revenues | (18) | |||||||||
Operating (loss) profit | 1 | |||||||||
Total Assets | $ (229,412) | $ (202,759) | $ (229,412) | $ (202,759) |
SEGMENT REPORTING - Summary of
SEGMENT REPORTING - Summary of Major Customers (Details) $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||||
Dec. 31, 2017USD ($) | Sep. 30, 2017USD ($) | Jun. 30, 2017USD ($) | Mar. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Sep. 30, 2016USD ($) | Jun. 30, 2016USD ($) | Mar. 31, 2016USD ($) | Dec. 31, 2017USD ($)item | Dec. 31, 2016USD ($)item | |
SEGMENT REPORTING | ||||||||||
Revenues from external customers | $ 146,785 | $ 180,840 | ||||||||
Number of major customers | item | 1 | |||||||||
Revenues from external customers | $ 17,768 | $ 29,595 | $ 43,362 | $ 56,060 | $ 48,151 | $ 42,552 | $ 43,380 | $ 46,757 | 180,840 | |
Minimum | ||||||||||
SEGMENT REPORTING | ||||||||||
Concentration risk (as a percent) | 10.00% | |||||||||
Towers and Heavy Fabrications | ||||||||||
SEGMENT REPORTING | ||||||||||
Revenues from external customers | 160,210 | |||||||||
Customer One | Towers and Heavy Fabrications | ||||||||||
SEGMENT REPORTING | ||||||||||
Revenues from external customers | $ 100,413 | 111,480 | ||||||||
Customer Two | Towers and Heavy Fabrications | ||||||||||
SEGMENT REPORTING | ||||||||||
Revenues from external customers | $ 23,018 | |||||||||
Five customers | ||||||||||
SEGMENT REPORTING | ||||||||||
Number of major customers | item | 5 | 5 | ||||||||
Concentration risk (as a percent) | 85.00% | 91.00% | ||||||||
Three customers | ||||||||||
SEGMENT REPORTING | ||||||||||
Number of major customers | item | 3 | |||||||||
Three customers | Minimum | ||||||||||
SEGMENT REPORTING | ||||||||||
Concentration risk (as a percent) | 10.00% | |||||||||
Customer Three | Towers and Heavy Fabrications | ||||||||||
SEGMENT REPORTING | ||||||||||
Revenues from external customers | $ 21,237 |
EMPLOYEE BENEFIT PLANS (Details
EMPLOYEE BENEFIT PLANS (Details) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017USD ($)item | Dec. 31, 2016USD ($) | |
Deferred Compensation Arrangements [Abstract] | ||
Deferred Compensation Arrangement with Individual, Compensation Expense | $ (12) | $ 24 |
Deferred Compensation Arrangement with Individual, Recorded Liability | 24 | 36 |
Contribution expense | $ 765 | $ 823 |
Defined Contribution 401K Safe Harbor Plan [Member] | ||
Deferred Compensation Arrangements [Abstract] | ||
Matching contribution of first 3% of eligible employees' contributions (as a percent) | 100.00% | |
Employer match of employee contributions as first eligible compensation (as a percent) | 3.00% | |
Matching contribution of first 2% of eligible employees' contributions (as a percent) | 50.00% | |
Employer match of employee contributions as next eligible compensation (as a percent) | 2.00% | |
Elective deferrals and basic matching contribution vested (as a percent) | 100.00% | |
Collective Bargaining Arrangement [Member] | ||
Deferred Compensation Arrangements [Abstract] | ||
Number of union locations where discretionary match continued | item | 2 | |
Collective Bargaining Arrangement [Member] | Illinois | ||
Deferred Compensation Arrangements [Abstract] | ||
Matching contribution of first 4% of eligible employees' contributions (as a percent) | 50.00% | |
Percentage of eligible employees' contributions matched by the company | 4.00% | |
Collective Bargaining Arrangement [Member] | Pennsylvania | ||
Deferred Compensation Arrangements [Abstract] | ||
Matching contribution of first 3% of eligible employees' contributions (as a percent) | 100.00% | |
Employer match of employee contributions as first eligible compensation (as a percent) | 3.00% | |
Matching contribution of first 2% of eligible employees' contributions (as a percent) | 50.00% | |
Employer match of employee contributions as next eligible compensation (as a percent) | 2.00% |
NEW MARKETS TAX CREDIT TRANSA74
NEW MARKETS TAX CREDIT TRANSACTION (Details) - New Markets Tax Credit Transaction $ in Thousands | Jul. 20, 2011USD ($) | Dec. 31, 2017USD ($)item |
New Markets Tax Credit Transaction | ||
Proceeds from transaction | $ 2,280 | |
Gross loan in the principal amount from the Company to COCRF Investor VIII, LLC | $ 7,720 | |
Receivable term | 15 years | |
Interest rate (as a percent) | 2.50% | |
Maximum percentage of a qualified investment available as credit against federal income taxes | 39.00% | |
Potential tax credit that can be generated under the NMTC transaction | $ 3,900 | |
Period which facility must operate and be in compliance | 7 years | |
Percentage of recapture to which the tax credits are subject | 100.00% | |
Loan origination payment | $ 320 | |
Company's obligation if Capital One exercises its option to put its investment | $ 130 | |
Number of pass-through financing entities created under the structure that are deemed variable interest entities | item | 2 | |
Issue costs paid to third parties recorded as prepaid expenses | 262 | |
Amortization period | 7 years | |
Amortization period for prepaid expenses for the NMTC arrangement | 7 years | |
Broadwind Services, LLC | ||
New Markets Tax Credit Transaction | ||
Principal amount | $ 10,000 | |
Debt instrument maturity term (in years) | 15 years | |
Interest rate (as a percent) | 1.40% |
QUARTERLY FINANCIAL SUMMARY (75
QUARTERLY FINANCIAL SUMMARY (UNAUDITED) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | |
QUARTERLY FINANCIAL SUMMARY (UNAUDITED) | ||||||||||
Revenues | $ 146,785 | $ 180,840 | ||||||||
Gross profit (loss) | $ (3,101) | $ 1,014 | $ 3,872 | $ 6,374 | $ 4,704 | $ 5,331 | $ 4,142 | $ 3,962 | 8,159 | 18,139 |
Operating (loss) profit | (6,689) | (1,831) | (516) | 1,603 | 592 | 1,360 | 181 | (224) | (7,433) | 1,909 |
(Loss) income from continuing operations | (6,928) | (2,049) | (688) | 6,482 | 406 | 1,245 | 42 | (358) | (3,183) | 1,335 |
Net income | $ (6,981) | $ (2,207) | $ (780) | $ 6,327 | $ 298 | $ 872 | $ (474) | $ (377) | $ (3,641) | $ 319 |
(Loss) income from continuing operations per share: | ||||||||||
Basic | $ 0.03 | $ 0.08 | $ 0 | $ (0.02) | ||||||
Diluted | 0.03 | 0.08 | 0 | (0.02) | ||||||
Net (loss) income per share: | ||||||||||
Basic net (loss) income per share | $ (0.46) | $ (0.15) | $ (0.05) | $ 0.42 | 0.02 | 0.06 | (0.03) | (0.03) | $ (0.24) | $ 0.02 |
Diluted net (loss) income per share | (0.46) | (0.15) | (0.05) | 0.42 | 0.02 | 0.06 | (0.03) | (0.03) | (0.24) | 0.02 |
Earnings Per Share, Basic [Abstract] | ||||||||||
Income (Loss) from Continuing Operations, Per Basic Share | (0.45) | (0.14) | (0.05) | 0.43 | (0.21) | 0.09 | ||||
Earnings Per Share, Basic | (0.46) | (0.15) | (0.05) | 0.42 | 0.02 | 0.06 | (0.03) | (0.03) | (0.24) | 0.02 |
Earnings Per Share, Diluted [Abstract] | ||||||||||
Income (Loss) from Continuing Operations, Per Diluted Share | (0.45) | (0.14) | (0.05) | 0.43 | (0.21) | 0.09 | ||||
Earnings Per Share, Diluted | $ (0.46) | $ (0.15) | $ (0.05) | $ 0.42 | $ 0.02 | $ 0.06 | $ (0.03) | $ (0.03) | $ (0.24) | $ 0.02 |
BUSINESS COMBINATION (Details)
BUSINESS COMBINATION (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | |
Mar. 31, 2017 | Dec. 31, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | |
Business Acquisition [Line Items] | ||||
Cash paid in acquisition | $ 16,449 | |||
Fair value of the contingent consideration | $ 2,534 | 2,534 | ||
Assets acquired and liabilities assumed: | ||||
Goodwill | 4,993 | $ 4,993 | ||
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life | 8 years 9 months 18 days | 10 years 6 months | ||
Pro Forma Results | ||||
Total revenues | $ 149,418 | $ 213,218 | ||
Net (loss) income | $ (3,410) | $ 9,814 | ||
Pro forma (loss) income per common share - basic | $ (0.23) | $ 0.66 | ||
Pro forma (loss) income per common share - diluted | $ (0.23) | $ 0.65 | ||
Noncompete agreements | ||||
Assets acquired and liabilities assumed: | ||||
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life | 5 years 1 month 6 days | |||
Customer relationships | ||||
Assets acquired and liabilities assumed: | ||||
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life | 8 years | 5 years 9 months 18 days | ||
Trade names | ||||
Assets acquired and liabilities assumed: | ||||
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life | 10 years 6 months | 10 years 9 months 18 days | ||
Red Wolf | ||||
Business Acquisition [Line Items] | ||||
Cash paid in acquisition | $ 16,449 | |||
Fair value of the contingent consideration | 2,534 | 2,534 | ||
Consideration recorded in accrued liabilities | 1,394 | 1,394 | ||
Consideration recorded in other long term liabilities | 1,140 | 1,140 | ||
Annual earn out payments | 4,950 | $ 4,950 | ||
Discount rate | 15.00% | |||
Assets acquired and liabilities assumed: | ||||
Cash and cash equivalents | $ 63 | |||
Adjustments-Cash and cash equivalents | (63) | |||
Receivables | 2,796 | 2,700 | $ 2,700 | |
Adjustments-Receivables | (96) | |||
Inventories | 4,998 | 5,177 | 5,177 | |
Adjustments-Inventories | 179 | |||
Property and equipment | 462 | 462 | 462 | |
Goodwill | 5,568 | 4,993 | 4,993 | |
Adjustments-Goodwill | (575) | |||
Accounts payable | (1,354) | (1,352) | (1,352) | |
Adjustments-Accounts payable | 2 | |||
Accrued expenses | (809) | (876) | (876) | |
Adjustments-Accrued expenses | (67) | |||
Deferred tax liabilities | (5,391) | (5,391) | (5,391) | |
Total purchase price | 19,603 | $ 18,983 | ||
Adjustments-Total purchase price | (620) | |||
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life | 9 years 4 months 24 days | |||
Transaction and integration costs | 182 | $ 182 | ||
Revenue | 15,868 | |||
Net loss | 146 | |||
Red Wolf | Noncompete agreements | ||||
Assets acquired and liabilities assumed: | ||||
Finite lived intangible assets | 170 | 170 | $ 170 | |
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life | 6 years | |||
Red Wolf | Customer relationships | ||||
Assets acquired and liabilities assumed: | ||||
Finite lived intangible assets | 12,000 | 12,000 | $ 12,000 | |
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life | 9 years | |||
Red Wolf | Trade names | ||||
Assets acquired and liabilities assumed: | ||||
Finite lived intangible assets | $ 1,100 | 1,100 | $ 1,100 | |
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life | 14 years | |||
Red Wolf | Minimum | ||||
Business Acquisition [Line Items] | ||||
Fair value of the contingent consideration | 0 | $ 0 | ||
Red Wolf | Maximum | ||||
Business Acquisition [Line Items] | ||||
Fair value of the contingent consideration | $ 9,900 | $ 9,900 |