BROADWIND ENERGY, INC., 10-Q filed on 10/30/2014
Quarterly Report
Document and Entity Information
9 Months Ended
Sep. 30, 2014
Oct. 22, 2014
Document and Entity Information
 
 
Entity Registrant Name
BROADWIND ENERGY, INC. 
 
Entity Central Index Key
0001120370 
 
Document Type
10-Q 
 
Document Period End Date
Sep. 30, 2014 
 
Amendment Flag
false 
 
Current Fiscal Year End Date
--12-31 
 
Entity Current Reporting Status
Yes 
 
Entity Filer Category
Smaller Reporting Company 
 
Entity Common Stock, Shares Outstanding
 
14,821,468 
Document Fiscal Year Focus
2014 
 
Document Fiscal Period Focus
Q3 
 
CONDENSED CONSOLIDATED BALANCE SHEETS (USD $)
In Thousands, unless otherwise specified
Sep. 30, 2014
Dec. 31, 2013
CURRENT ASSETS:
 
 
Cash and cash equivalents
$ 17,026 
$ 24,936 
Short-term investments
10,833 
1,143 
Restricted cash
83 
83 
Accounts receivable, net of allowance for doubtful accounts of $114 and $17 as of September 30, 2014 and December 31, 2013, respectively
24,316 
18,735 
Inventories, net
32,833 
37,143 
Prepaid expenses and other current assets
2,138 
2,325 
Assets held for sale
1,182 
1,970 
Total current assets
88,411 
86,335 
LONG-TERM ASSETS:
 
 
Property and equipment, net
64,300 
69,077 
Intangible assets, net
5,570 
5,903 
Other assets
515 
2,379 
TOTAL ASSETS
158,796 
163,694 
CURRENT LIABILITIES:
 
 
Current maturities of long-term debt
149 
201 
Current portions of capital lease obligations
700 
933 
Accounts payable
25,036 
27,537 
Accrued liabilities
10,061 
8,115 
Customer deposits
20,573 
22,993 
Liabilities held for sale
361 
749 
Total current liabilities
56,880 
60,528 
LONG-TERM LIABILITIES:
 
 
Long-term debt, net of current maturities
2,608 
2,755 
Long-term capital lease obligations, net of current portions
731 
1,193 
Other
3,556 
3,888 
Total long-term liabilities
6,895 
7,836 
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; 14,821,468 and 14,627,990 shares issued and outstanding as of September 30, 2014 and December 31, 2013, respectively
15 
15 
Additional paid-in capital
376,813 
376,125 
Accumulated deficit
(281,807)
(280,810)
Total stockholders' equity
95,021 
95,330 
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
$ 158,796 
$ 163,694 
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $)
In Thousands, except Share data, unless otherwise specified
Sep. 30, 2014
Dec. 31, 2013
CONDENSED CONSOLIDATED BALANCE SHEETS
 
 
Accounts receivable, allowance for doubtful accounts (in dollars)
$ 114 
$ 17 
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
Preferred stock, shares outstanding
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
14,821,468 
14,627,990 
Common stock, shares outstanding
14,821,468 
14,627,990 
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (USD $)
In Thousands, except Per Share data, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 30, 2014
Sep. 30, 2013
Sep. 30, 2014
Sep. 30, 2013
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
 
 
 
 
Revenues
$ 60,289 
$ 60,862 
$ 187,470 
$ 159,313 
Cost of sales
56,267 
55,147 
168,936 
146,366 
Restructuring
164 
1,097 
952 
2,758 
Gross profit
3,858 
4,618 
17,582 
10,189 
OPERATING EXPENSES:
 
 
 
 
Selling, general and administrative
4,629 
5,216 
16,166 
15,721 
Intangible amortization
111 
111 
333 
1,441 
Regulatory settlement
816 
1,500 
1,566 
1,500 
Restructuring
113 
79 
222 
787 
Total operating expenses
5,669 
6,906 
18,287 
19,449 
Operating loss
(1,811)
(2,288)
(705)
(9,260)
OTHER (EXPENSE) INCOME, net:
 
 
 
 
Interest expense, net
(177)
(177)
(521)
(795)
Other, net
29 
(4)
149 
511 
Gain (loss) on sale of assets and restructuring
119 
(1)
119 
2,965 
Total other (expense) income, net
(29)
(182)
(253)
2,681 
Net loss from continuing operations before provision for income taxes
(1,840)
(2,470)
(958)
(6,579)
Provision (benefit) for income taxes
(26)
28 
39 
64 
LOSS FROM CONTINUING OPERATIONS
(1,814)
(2,498)
(997)
(6,643)
GAIN (LOSS) FROM DISCONTINUED OPERATIONS, NET OF TAX
 
100 
 
(110)
NET LOSS
$ (1,814)
$ (2,398)
$ (997)
$ (6,753)
NET LOSS PER COMMON SHARE - BASIC AND DILUTED:
 
 
 
 
Loss from continuing operations (in dollars per share)
$ (0.12)
$ (0.18)
$ (0.07)
$ (0.46)
Loss from discontinued operations (in dollars per share)
 
$ 0.01 
 
$ (0.01)
Net loss (in dollars per share)
$ (0.12)
$ (0.17)
$ (0.07)
$ (0.47)
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING - BASIC AND DILUTED (in shares)
14,792 
14,525 
14,728 
14,405 
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (USD $)
In Thousands, except Share data, unless otherwise specified
Common Stock
Additional Paid-in Capital
Accumulated Deficit
Total
Balance at Dec. 31, 2012
$ 14 
$ 373,605 
$ (270,311)
$ 103,308 
Balance (in shares) at Dec. 31, 2012
14,197,792 
 
 
 
Increase (Decrease) in Stockholders' Equity
 
 
 
 
Stock issued for restricted stock
 
 
Stock issued for restricted stock (in shares)
258,284 
 
 
 
Stock issued under stock option plans
 
18 
 
18 
Stock issued under stock option plans (in shares)
5,400 
 
 
 
Stock issued under defined contribution 401(k) retirement savings plan
 
681 
 
681 
Stock issued under defined contribution 401(k) retirement savings plan (in shares)
166,514 
 
 
 
Share-based compensation
 
1,821 
 
1,821 
Net loss
 
 
(10,499)
(10,499)
Balance at Dec. 31, 2013
15 
376,125 
(280,810)
95,330 
Balance (in shares) at Dec. 31, 2013
14,627,990 
 
 
14,627,990 
Increase (Decrease) in Stockholders' Equity
 
 
 
 
Stock issued for restricted stock (in shares)
173,369 
 
 
 
Stock issued under stock option plans
 
 
Stock issued under stock option plans (in shares)
2,863 
 
 
 
Stock issued under defined contribution 401(k) retirement savings plan
 
163 
 
163 
Stock issued under defined contribution 401(k) retirement savings plan (in shares)
17,246 
 
 
 
Share-based compensation
 
516 
 
516 
Net loss
 
 
(997)
(997)
Balance at Sep. 30, 2014
$ 15 
$ 376,813 
$ (281,807)
$ 95,021 
Balance (in shares) at Sep. 30, 2014
14,821,468 
 
 
14,821,468 
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $)
In Thousands, unless otherwise specified
9 Months Ended
Sep. 30, 2014
Sep. 30, 2013
CASH FLOWS FROM OPERATING ACTIVITIES:
 
 
Net loss
$ (997)
$ (6,753)
Adjustments to reconcile net cash used in operating activities:
 
 
Depreciation and amortization
9,576 
11,412 
Impairment charges
 
288 
Stock-based compensation
515 
1,438 
Allowance for doubtful accounts
98 
(274)
Common stock issued under defined contribution 401(k) plan
163 
499 
Loss (gain) on disposal of assets
(99)
(3,576)
Changes in operating assets and liabilities:
 
 
Accounts receivable
(5,659)
(1,463)
Inventories
4,310 
(10,868)
Prepaid expenses and other current assets
1,956 
1,228 
Accounts payable
(1,981)
11,399 
Accrued liabilities
1,945 
1,123 
Customer deposits
(2,367)
17,419 
Other non-current assets and liabilities
(371)
(365)
Net cash provided by operating activities
7,089 
21,507 
CASH FLOWS FROM INVESTING ACTIVITIES:
 
 
Proceeds from sale of logistics business and related note receivable
 
250 
Purchases of available for sale securities
(13,340)
(867)
Sales of available for sale securities
994 
 
Maturities of available for sale securities
2,655 
 
Purchases of property and equipment
(5,560)
(4,357)
Proceeds from disposals of property and equipment
1,045 
12,533 
(Increase) decrease in restricted cash
 
(1)
Net cash (used) provided by investing activities
(14,206)
7,558 
CASH FLOWS FROM FINANCING ACTIVITIES:
 
 
Net proceeds from issuance of stock
 
Payments on lines of credit and notes payable
(59)
(80,233)
Proceeds from lines of credit and notes payable
 
75,208 
Principal payments on capital leases
(743)
(1,730)
Net cash used in financing activities
(793)
(6,755)
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS
(7,910)
22,310 
CASH AND CASH EQUIVALENTS, beginning of the period
24,936 
516 
CASH AND CASH EQUIVALENTS, end of the period
17,026 
22,826 
Supplemental cash flow information:
 
 
Interest paid
434 
672 
Income taxes paid
32 
19 
Non-cash investing and financing activities:
 
 
Issuance of restricted stock grants
$ 338 
$ 1,025 
BASIS OF PRESENTATION
BASIS OF PRESENTATION

NOTE 1 — BASIS OF PRESENTATION

 

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information and in accordance with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, the financial statements do not include all of the information and notes required by GAAP for complete financial statements. In the opinion of management, all adjustments, including normal recurring accruals, considered necessary for a fair presentation have been included. Operating results for the three and nine months ended September 30, 2014 are not necessarily indicative of the results that may be expected for the twelve months ending December 31, 2014. The December 31, 2013 condensed consolidated balance sheet was derived from audited financial statements, but does not include all disclosures required by GAAP. This financial information should be read in conjunction with the condensed consolidated financial statements and notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2013.

 

The unaudited condensed consolidated financial statements presented herein include the accounts of Broadwind Energy, Inc. and its wholly-owned subsidiaries Broadwind Towers, Inc. (“Broadwind Towers”), Brad Foote Gear Works, Inc. (“Brad Foote”) and Broadwind Services, LLC (“Broadwind Services”) (collectively, “Subsidiaries”). All intercompany transactions and balances have been eliminated.

 

There have been no material changes in the Company’s significant accounting policies during the three and nine months ended September 30, 2014 as compared to the significant accounting policies described in the Company’s Annual Report on Form 10-K for the year ended December 31, 2013.

 

Company Description

 

As used in this Quarterly Report on Form 10-Q, the terms “we,” “us,” “our,” “Broadwind,” and the “Company” refer to Broadwind Energy, Inc., a Delaware corporation headquartered in Cicero, Illinois, and the Subsidiaries.

 

Broadwind provides technologically advanced high-value products and services to energy, mining and infrastructure sector customers, primarily in the U.S. The Company’s most significant presence is within the U.S. wind energy industry, although it has diversified into other industrial markets in order to improve its capacity utilization and reduce its exposure to uncertainty related to favorable governmental policies currently supporting the U.S. wind energy industry. For the first nine months of 2014, 76% of the Company’s revenue was derived from sales associated with new wind turbine installations.

 

The Company’s product and service portfolio provides its wind energy customers, including wind turbine manufacturers, wind farm developers and wind farm operators, with access to a broad array of component and service offerings. Outside of the wind energy market, the Company provides precision gearing and specialty weldments to a broad range of industrial customers for oil and gas, mining and other industrial applications.

 

Liquidity

 

As of September 30, 2014, cash and cash equivalents and short-term investments totaled $27,859, an increase of $1,780 from December 31, 2013.  Total debt and capital lease obligations at September 30, 2014 totaled $4,188 and the Company is obligated to make principal payments under the outstanding debt totaling $149 over the next twelve months.  The Company also has access to a $20 million credit facility established in 2011 (the “Credit Facility”) with AloStar Bank of Commerce (“AloStar”) which is currently undrawn.  Under the terms of the Credit Facility, AloStar will advance funds when requested up to the level of the Company’s borrowing base, which consists of approximately 85% of eligible receivables and approximately 50% of eligible inventory.  At September 30, 2014, the Credit Facility was undrawn and the Company was in compliance with all applicable covenants.

 

Since its inception, the Company has continuously incurred operating losses.  The Company anticipates that current cash resources, amounts available under the Credit Facility, and cash to be generated from operations 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 advances 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, will 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.

 

Please refer to Note 17, “Restructuring” of these condensed consolidated financial statements for a discussion of the restructuring plan which the Company initiated in the third quarter of 2011. To date, the Company has incurred $13,200 of net costs in conjunction with its restructuring plan. Including costs incurred to date, the Company expects that a total of approximately $13,600 of net costs will be incurred to implement this restructuring plan. Since the restructuring activities are substantially complete, the Company believes this no longer represents a material use of financial resources.

EARNINGS PER SHARE
EARNINGS PER SHARE

NOTE 2 — EARNINGS PER SHARE

 

The following table presents a reconciliation of basic and diluted earnings per share for the three and nine months ended September 30, 2014 and 2013, as follows:

 

 

 

Three Months Ended

 

Nine Months Ended

 

 

 

September 30,

 

September 30,

 

 

 

2014

 

2013

 

2014

 

2013

 

Basic earnings per share calculation:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss

 

$

(1,814

)

$

(2,398

)

$

(997

)

$

(6,753

)

 

 

 

 

 

 

 

 

 

 

Weighted average number of common shares outstanding

 

14,791,811

 

14,524,522

 

14,728,379

 

14,405,498

 

Basic net loss per share

 

$

(0.12

)

$

(0.17

)

$

(0.07

)

$

(0.47

)

 

 

 

 

 

 

 

 

 

 

Diluted earnings per share calculation:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss

 

$

(1,814

)

$

(2,398

)

$

(997

)

$

(6,753

)

 

 

 

 

 

 

 

 

 

 

Weighted average number of common shares outstanding

 

14,791,811

 

14,524,522

 

14,728,379

 

14,405,498

 

Common stock equivalents:

 

 

 

 

 

 

 

 

 

Stock options and unvested restricted stock units

 

 

 

 

 

Weighted average number of common shares outstanding

 

14,791,811

 

14,524,522

 

14,728,379

 

14,405,498

 

Diluted net loss per share

 

$

(0.12

)

$

(0.17

)

$

(0.07

)

$

(0.47

)

 

DISCONTINUED OPERATIONS
DISCONTINUED OPERATIONS

NOTE 3 — DISCONTINUED OPERATIONS

 

In December 2010, the Company’s Board of Directors (the “Board”) approved a plan to divest the Company’s wholly-owned subsidiary Badger Transport, Inc. (“Badger”), which formerly comprised the Company’s Logistics segment. In March 2011, the Company completed the sale of Badger to BTI Logistics, LLC. As a component of the proceeds from the sale, the Company received a $1,500 secured promissory note payable from the purchaser. There is a balance of $860 outstanding on the note receivable, all of which is considered past due. As a result of the uncertainty related to any future expected payments from the purchaser, the note is fully reserved for at September 30, 2014.

CASH AND CASH EQUIVALENTS AND SHORT-TERM INVESTMENTS
CASH AND CASH EQUIVALENTS AND SHORT-TERM INVESTMENTS

NOTE 4 — 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 condensed consolidated statements of operations. As of September 30, 2014 and December 31, 2013, cash and cash equivalents totaled $17,026 and $24,936, respectively, and short-term investments totaled $10,833 and $1,143, respectively. The components of cash and cash equivalents and short-term investments as of September 30, 2014 and December 31, 2013 are summarized as follows:

 

 

 

September 30,

 

December 31,

 

 

 

2014

 

2013

 

Cash and cash equivalents:

 

 

 

 

 

Cash

 

$

9,544 

 

$

12,021 

 

Money market funds

 

4,570 

 

7,423 

 

Municipal bonds

 

2,912 

 

5,492 

 

Total cash and cash equivalents

 

17,026 

 

24,936 

 

 

 

 

 

 

 

Short-term investments (available-for-sale):

 

 

 

 

 

Municipal bonds

 

10,833 

 

1,143 

 

 

 

 

 

 

 

Total cash and cash equivalents and short-term investments

 

$

27,859 

 

$

26,079 

 

 

INVENTORIES
INVENTORIES

NOTE 5 — INVENTORIES

 

The components of inventories as of September 30, 2014 and December 31, 2013 are summarized as follows:

 

 

 

September 30,

 

December 31,

 

 

 

2014

 

2013

 

 

 

 

 

 

 

Raw materials

 

$

17,324

 

$

21,859

 

Work-in-process

 

10,108

 

11,212

 

Finished goods

 

7,973

 

6,381

 

 

 

35,405

 

39,452

 

Less: Reserve for excess and obsolete inventory

 

(2,572

)

(2,309

)

Net inventories

 

$

32,833

 

$

37,143

 

 

INTANGIBLE ASSETS
INTANGIBLE ASSETS

NOTE 6 — INTANGIBLE ASSETS

 

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 during 2007. Intangible assets are amortized on a straight-line basis over their estimated useful lives, which range from 10 to 20 years. The Company tests intangible assets for impairment when events or circumstances indicate that the carrying value of these assets may not be recoverable. During the third quarter of 2014, the Company identified triggering events associated with Brad Foote’s current period operating loss combined with its history of continued operating losses. As a result, the Company evaluated the recoverability of certain of its identifiable intangible assets. Based upon the Company’s assessment, the recoverable amount was in excess of the carrying amount of the intangible assets, and no impairment to these assets was indicated as of September 30, 2014.

 

As of September 30, 2014 and December 31, 2013, the cost basis, accumulated amortization and net book value of intangible assets were as follows:

 

 

 

September 30, 2014

 

December 31, 2013

 

 

 

 

 

 

 

 

 

Weighted

 

 

 

 

 

 

 

Weighted

 

 

 

 

 

 

 

Net

 

Average

 

 

 

 

 

Net

 

Average

 

 

 

Cost

 

Accumulated

 

Book

 

Amortization

 

Cost

 

Accumulated

 

Book

 

Amortization

 

 

 

Basis

 

Amortization

 

Value

 

Period

 

Basis

 

Amortization

 

Value

 

Period

 

Intangible assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Customer relationships

 

$

3,979

 

$

(3,628

)

$

351

 

7.2

 

$

3,979

 

$

(3,595

)

$

384

 

7.2

 

Trade names

 

7,999

 

(2,780

)

5,219

 

20.0

 

7,999

 

(2,480

)

5,519

 

20.0

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Intangible assets

 

$

11,978

 

$

(6,408

)

$

5,570

 

15.8

 

$

11,978

 

$

(6,075

)

$

5,903

 

15.8

 

 

As of September 30, 2014, estimated future amortization expense is as follows:

 

2014

 

$

111 

 

2015

 

444 

 

2016

 

444 

 

2017

 

444 

 

2018

 

444 

 

2019 and thereafter

 

3,683 

 

Total

 

$

5,570 

 

 

ACCRUED LIABILITIES
ACCRUED LIABILITIES

NOTE 7 — ACCRUED LIABILITIES

 

Accrued liabilities as of September 30, 2014 and December 31, 2013 consisted of the following:

 

 

 

September 30,

 

December 31,

 

 

 

2014

 

2013

 

 

 

 

 

 

 

Accrued payroll and benefits

 

$

4,150 

 

$

5,144 

 

Accrued property taxes

 

463 

 

143 

 

Income taxes payable

 

500 

 

493 

 

Accrued professional fees

 

129 

 

36 

 

Accrued warranty liability

 

773 

 

457 

 

Accrued regulatory settlement

 

2,066 

 

 

Accrued environmental reserve

 

536 

 

500 

 

Accrued self-insurance reserve

 

1,048 

 

803 

 

Accrued other

 

396 

 

539 

 

Total accrued liabilities

 

$

10,061 

 

$

8,115 

 

 

The accrued regulatory settlement includes $500 for the current portion of the environmental settlement recorded in 2013 and $1,566 related to the estimated United States Securities and Exchange Commission (“SEC”) inquiry settlement recorded in the current-year period - see Note 12, “Legal Proceedings” of these condensed consolidated financial statements for a discussion of the inquiry.  The increase in the accrued self-insurance reserve is due to the Company becoming self-insured for worker’s compensation effective January 1, 2014.

DEBT AND CREDIT AGREEMENTS
DEBT AND CREDIT AGREEMENTS

NOTE 8 — DEBT AND CREDIT AGREEMENTS

 

The Company’s outstanding debt balances as of September 30, 2014 and December 31, 2013 consisted of the following:

 

 

 

September 30,

 

December 31,

 

 

 

2014

 

2013

 

 

 

 

 

 

 

Term loans and notes payable

 

$

2,757

 

$

2,956

 

Less: Current portion

 

(149

)

(201

)

Long-term debt, net of current maturities

 

$

2,608

 

$

2,755

 

 

Credit Facilities

 

AloStar Credit Facility

 

The Credit Facility is a secured three-year-asset based revolving credit facility, pursuant to which AloStar will advance funds when requested against a borrowing base consisting of approximately 85% of the face value of eligible accounts receivable of the Company and approximately 50% of the book value of eligible inventory of the Company. Borrowings under the Credit Facility bear interest at a per annum rate equal to the one month London Interbank Offered Rate plus a margin of 4.25%, with a minimum interest rate of 5.25% per annum. The Company must also pay an unused facility fee to AloStar equal to 0.50% per annum on the unused portion of the Credit Facility along with other standard fees. The Loan Agreement terminates on August 23, 2015.

 

The Loan Agreement contains customary representations and warranties. It also contains a requirement that the Company, on a consolidated basis, maintain a minimum monthly fixed charge coverage ratio and minimum monthly earnings before interest, taxes, depreciation, amortization, restructuring and share-based payments (“Adjusted EBITDA”), along with other customary restrictive covenants, certain of which are subject to materiality thresholds, baskets and customary exceptions and qualifications.

 

The obligations under the Loan Agreement are secured by, subject to certain exclusions, (i) a first priority security interest in all of the accounts receivable, inventory, chattel paper, payment intangibles, cash and cash equivalents and other working capital assets and stock or other equity interests in the Subsidiaries, and (ii) a first priority security interest in all of Brad Foote’s equipment.

 

As of September 30, 2014, there was no outstanding indebtedness under the Credit Facility, the Company had the ability to borrow up to $14,384 thereunder and the per annum interest rate would have been 5.25%. The Company was in compliance with all applicable covenants under the Loan Agreement as of September 30, 2014.

 

Other

 

Included in Long Term Debt, Net of Current Maturities is $2,600 associated with the New Markets Tax Credit transaction described further in Note 16, “New Markets Tax Credit Transaction” of these condensed consolidated financial statements. Additionally, the Company has approximately $157 of other term loans outstanding.

FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS

NOTE 9 — 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 municipal bonds, we note that 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 its Gearing assets.  The Company used real estate appraisals to value the Clintonville, Wisconsin facility (the “Clintonville Facility”).

 

The following tables represent the fair values of the Company’s financial assets as of September 30, 2014 and December 31, 2013:

 

 

 

September 30, 2014

 

 

 

Level 1

 

Level 2

 

Level 3

 

Total

 

Assets measured on a recurring basis:

 

 

 

 

 

 

 

 

 

Municipal bonds and money market funds

 

$

 

$

18,315 

 

$

 

$

18,315 

 

Assets measured on a nonrecurring basis:

 

 

 

 

 

 

 

 

 

Gearing equipment

 

 

 

361 

 

361 

 

Clintonville, WI facility

 

 

 

821 

 

821 

 

Gearing Cicero Ave. facility

 

 

 

560 

 

560 

 

Total assets at fair value

 

$

 

$

18,315 

 

$

1,742 

 

$

20,057 

 

 

 

 

December 31, 2013

 

 

 

Level 1

 

Level 2

 

Level 3

 

Total

 

Assets measured on a recurring basis:

 

 

 

 

 

 

 

 

 

Municipal bonds and money market funds

 

$

 

$

14,058 

 

$

 

$

14,058 

 

Assets measured on a nonrecurring basis:

 

 

 

 

 

 

 

 

 

Gearing equipment

 

 

 

1,149 

 

1,149 

 

Clintonville, WI facility

 

 

 

821 

 

821 

 

Gearing Cicero Ave. facility

 

 

 

560 

 

560 

 

Total assets at fair value

 

$

 

$

14,058 

 

$

2,530 

 

$

16,588 

 

 

Fair value of financial instruments

 

The carrying amounts of the Company’s financial instruments, which include cash and cash equivalents, restricted cash, accounts receivable, 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. These assumptions include, among others, projections of the Company’s future operating results, the implied fair value of these assets using an income approach by preparing a discounted cash flow analysis and a market-based approach based on the Company’s market capitalization, and other subjective assumptions. To the extent projections used in the Company’s evaluations are not achieved, there may be a negative effect on the valuation of these assets.

 

Due to the Company’s operating losses within Brad Foote and Broadwind Services in the third quarter of 2014 combined with its history of continued operating losses, the Company continues to evaluate the recoverability of certain of its identifiable intangible assets and certain property and equipment assets. Based upon the Company’s September 30, 2014 assessment, the recoverable amount of undiscounted cash flows based upon the Company’s most recent projections substantially exceeded the carrying amount of invested capital for the Gearing and Services segments, respectively, and no impairment to these assets was indicated.

INCOME TAXES
INCOME TAXES

NOTE 10 — INCOME TAXES

 

Effective tax rates differ from federal statutory income tax rates primarily due to changes in the Company’s valuation allowance, permanent differences and provisions for state and local income taxes. As of September 30, 2014, the Company had no net deferred income taxes due to the full recorded valuation allowance. During the nine months ended September 30, 2014, the Company recorded a provision for income taxes of $39 compared to a provision for income taxes of $64 during the nine months ended September 30, 2013.

 

The Company files income tax returns in U.S. federal and state jurisdictions. As of September 30, 2014, open tax years in federal and some state jurisdictions date back to 1996 due to the taxing authorities’ ability to adjust operating loss carryforwards. As of December 31, 2013, the Company had net operating loss (“NOL”) carryforwards of $162,971expiring in various years through 2033.

 

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 triggered an annual limitation on NOL carryforwards and built-in losses available for utilization. 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 be if the Company were able to use NOL carryforwards and built-in losses without such limitation, which could result in lower profits and the loss of benefits from these attributes.

 

The Company announced on February 13, 2013, that the Board had adopted a Stockholder Rights Plan (the “Rights Plan”) designed to preserve the Company’s substantial tax assets associated with NOL carryforwards under IRC Section 382 for a three-year period. 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 $14.00 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. The Rights Plan was subsequently approved by the Company’s stockholders at the Company’s 2013 Annual Meeting of Stockholders.

 

As of September 30, 2014, the Company had $286 of unrecognized tax benefits, all of which would have a favorable impact on income tax expense. It is reasonably possible that unrecognized tax benefits will decrease by up to approximately $32 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 $240 as of September 30, 2014. As of December 31, 2013, the Company had unrecognized tax benefits of $495, of which $209 represented accrued interest and penalties.

SHARE-BASED COMPENSATION
SHARE-BASED COMPENSATION

NOTE 11 — SHARE-BASED COMPENSATION

 

Overview of Share-Based Compensation Plans

 

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 September 30, 2014, the Company had reserved 58,283 shares for issuance upon the exercise of stock options outstanding and 47,607 shares for issuance upon the vesting of restricted stock unit (“RSU”) awards outstanding. As of September 30, 2014, 221,495 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;” together with the 2007 EIP, the “Equity Incentive Plans”), which was approved by the Board in March 2012 and by the Company’s stockholders in May 2012. The purposes of the 2012 EIP are (i) to align the interests of the Company’s stockholders and recipients of awards under the 2012 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 2012 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) performance awards.

 

The 2012 EIP reserves 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 September 30, 2014, the Company had reserved 100,935 shares for issuance upon the exercise of stock options outstanding and 504,161 shares for issuance upon the vesting of RSU awards outstanding. As of September 30, 2014, 309,514 shares of common stock reserved for stock options and RSU awards under the 2012 EIP have 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.  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.

 

The following table summarizes stock option activity during the nine months ended September 30, 2014 under the Equity Incentive Plans, as follows:

 

 

 

Options

 

Weighted Average
Exercise Price

 

Outstanding as of December 31, 2013

 

207,775

 

$

26.22

 

Granted

 

 

$

 

Exercised

 

(2,863

)

$

3.39

 

Forfeited

 

(9,624

)

$

5.12

 

Expired

 

(36,070

)

$

74.68

 

Outstanding as of September 30, 2014

 

159,218

 

$

16.93

 

 

 

 

 

 

 

Exercisable as of September 30, 2014

 

99,083

 

$

23.92

 

 

The following table summarizes RSU activity during the nine months ended September 30, 2014 under the Equity Incentive Plans, as follows:

 

 

 

Number of RSU’s

 

Weighted Average
Grant-Date Fair Value
Per RSU

 

Outstanding as of December 31, 2013

 

670,338

 

$

4.47

 

Granted

 

196,442

 

$

9.17

 

Vested

 

(248,565

)

$

4.64

 

Forfeited

 

(66,447

)

$

5.32

 

Outstanding as of September 30, 2014

 

551,768

 

$

5.96

 

 

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 nine months ended September 30, 2014.

 

The Company utilized a forfeiture rate of 25% during the nine months ended September 30, 2014 and 2013 for estimating the forfeitures of stock compensation granted.

 

The following table summarizes share-based compensation expense included in the Company’s condensed consolidated statements of operations for the nine months ended September 30, 2014 and 2013, as follows:

 

 

 

Nine Months Ended September 30,

 

 

 

2014

 

2013

 

Share-based compensation expense:

 

 

 

 

 

Cost of Sales

 

$

98 

 

$

136 

 

Selling, general and administrative

 

418 

 

1,302 

 

Income tax benefit (1)

 

 

 

Net effect of share-based compensation expense on net loss

 

$

516 

 

$

1,438 

 

 

 

 

 

 

 

Reduction in earnings per share:

 

 

 

 

 

Basic and diluted earnings per share (2)

 

$

0.03 

 

$

0.10 

 

 

 

(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 nine months ended September 30, 2014 and 2013. The result of the loss situation creates a timing difference, resulting in a deferred tax asset, which is fully reserved for in the Company’s valuation allowance.

(2)

Diluted earnings per share for the nine months ended September 30, 2014 and 2013 does not include common stock equivalents due to their anti-dilutive nature as a result of the Company’s net losses for these respective periods.  Accordingly, basic earnings per share and diluted earnings per share are identical for all periods presented.

 

As of September 30, 2014, 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 $2,380 will be recognized through 2017. 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.

LEGAL PROCEEDINGS
LEGAL PROCEEDINGS

NOTE 12 — LEGAL PROCEEDINGS

 

Shareholder Lawsuits

 

Between February 15, 2011 and March 30, 2011, three putative shareholder derivative lawsuits were filed in the United States District Court for the Northern District of Illinois (the “USDC”) against certain of the Company’s current and former officers and directors, and certain Tontine entities, seeking to challenge alleged breaches of fiduciary duty, waste of corporate assets and unjust enrichment, including in connection with the January 2010 secondary public offering of the Company’s common stock (the “2010 Stock Offering”). One of the lawsuits also alleged that certain directors violated Section 14(a) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), in connection with the Company’s Proxy Statement for its 2010 Annual Meeting of Stockholders. Two of the matters pending in the USDC were subsequently consolidated, and on May 15, 2012, the USDC granted the defendants’ motion to dismiss the consolidated cases and also entered an order dismissing the third case. On January 17, 2014, the Company and the plaintiffs from the consolidated derivative lawsuit filed a joint motion to reopen the derivative action and preliminarily approve a derivative settlement. The USDC subsequently reopened the derivative action and granted preliminary approval of the settlement on February 3, 2014. The settlement resolves outstanding shareholder derivative claims, including those raised in certain shareholder demand letters received by the Board. The terms of the settlement include the adoption by the Company of certain corporate governance reforms, along with other remedial measures. The settlement provides for the Company’s insurance carrier and/or the Company to pay plaintiffs’ counsel’s attorneys’ fees and expenses in the amount of $600. The USDC granted final approval of the settlement on April 3, 2014.

 

SEC Inquiry

 

In August 2011, the Company received a subpoena from the SEC seeking documents related to certain accounting practices at Brad Foote. The subpoena was issued following an informal inquiry that the Company received from the SEC in November 2010, which likely arose out of a whistleblower complaint that the SEC received related to revenue recognition, cost accounting and intangible and fixed asset valuations at Brad Foote. The Company produced documents responsive to the SEC’s subpoena. Following the issuance of subpoenas for testimony, the SEC deposed certain current and former Company employees.

 

On May 8, 2014, the Company, its Chief Financial Officer (“CFO”) and its former Chief Executive Officer and Director J. Cameron Drecoll (“Drecoll”) received Wells notices (the “Notices”) from the SEC’s Division of Enforcement in connection with its ongoing investigation of the Company.  A Wells notice is not a formal allegation or a finding of wrongdoing, but is a preliminary determination by the SEC Enforcement Staff (the “Staff”) that the Staff may recommend to the SEC that a civil enforcement action or administrative proceeding be brought against the recipient.  The Notices indicated that the Staff had made a preliminary determination to recommend that the SEC file an enforcement action alleging violations of the Securities Act of 1933, the Exchange Act, the Sarbanes-Oxley Act and certain SEC rules.  The Company understands that the Notices to the CFO and Drecoll related only to an intangible valuation issue relating to events in 2009 and the 2010 Stock Offering, and the Notice to the Company related to that intangible valuation issue and certain revenue recognition issues relating to events in 2009.  Under SEC procedures, a recipient of a Wells notice has an opportunity to respond in the form of a Wells submission that seeks to persuade the SEC that such an action should not be brought. On June 16, 2014, the Company submitted to the Staff a Wells submission to explain its views concerning such matters.

 

The Company has reached a settlement in principle with the Staff, subject to the SEC’s final approval, but there can be no assurance that the settlement will be approved or regarding the final amount of any such settlement. The Company has recorded a $816 charge in the third quarter of 2014, in addition to the $750 charge recorded in the second quarter of 2014, as an estimate of the amount required to settle the matter.  Publicity surrounding the foregoing could have an adverse impact on the Company’s reputation, business, financial condition, results of operations or cash flows.

 

Environmental

 

On February 15, 2011, pursuant to a search warrant, officials from the United States Environmental Protection Agency (“USEPA”) entered and conducted a search of Brad Foote’s facility at 1309 Cicero Avenue in Cicero, Illinois (the “Cicero Avenue Facility”) in connection with the alleged improper disposal of industrial wastewater to the sewer. On September 24, 2013, the United States Attorney’s Office, Northern District of Illinois (“USAO”) commenced a criminal action in the USDC based on this investigation. Subsequently, Brad Foote entered into a plea agreement with the USAO (the “Plea Agreement”) with regard to this criminal action, pursuant to which Brad Foote agreed to plead guilty to one count of knowingly violating the Clean Water Act, Title 33, United States Code, Section 1319(c)(2)(A) and pay a $1,500 fine (payable in three annual installments of $500 within three years of the date of sentencing), subject to the USDC’s approval of the Plea Agreement. Brad Foote pled guilty pursuant to the Plea Agreement on November 13, 2013, and the USDC approved the Plea Agreement on February 19, 2014. By correspondence dated April 17, 2014, the USEPA advised that, due to the admitted violation of the Clean Water Act by Brad Foote, the Cicero Avenue Facility is statutorily debarred from receiving federal contracts or benefits if any of the work will be performed at the place where the offense occurred.  Brad Foote is currently seeking to terminate the debarment. The action by the USEPA is expected to have minimal impact on the Company since the Cicero Avenue Facility is being closed and is scheduled to be sold as part of the Company’s restructuring program.

 

Other

 

The Company is also a party to additional claims and legal proceedings arising in the ordinary course of business, none of which is deemed to be individually significant at this time. 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 position or liquidity. It is possible that if one or more of the matters described above 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 cash flows in the periods the Company would be required to pay such liability.

RECENT ACCOUNTING PRONOUNCEMENTS
RECENT ACCOUNTING PRONOUNCEMENTS

NOTE 13 — RECENT ACCOUNTING PRONOUNCEMENTS

 

The Company reviews new accounting standards as issued. Although some of these accounting standards issued or effective after the end of the Company’s previous fiscal year may be applicable to the Company, the Company has not identified any new standards that it believes merit further discussion, except as discussed below. The Company is currently evaluating the impact of the new standards on its condensed consolidated financial statements.

 

In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers, which amends the guidance in former ASC 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 pronouncement is effective for fiscal years, and interim periods within those years, beginning after December 15, 2016, and early adoption is not permitted.  The Company will adopt the provisions of ASU 2014-09 for the fiscal year beginning January 1, 2017, and is currently evaluating the impact on its condensed consolidated financial statements.

SEGMENT REPORTING
SEGMENT REPORTING

NOTE 14 — SEGMENT REPORTING

 

The Company is organized into reporting segments based on the nature of the products and services 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. The Company’s segments and their product and service offerings are summarized below:

 

Towers and Weldments

 

The Company manufactures towers for wind turbines, specifically the large and heavier wind towers that are designed for two megawatt (“MW”) and larger 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 500 towers, sufficient to support turbines generating more than 1,200 MW of power. This product segment also encompasses the manufacture of specialty fabrications and specialty 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.

 

Services

 

The Company offers a comprehensive range of services, primarily to wind farm developers and operators. The Company specializes in non-routine maintenance services for both kilowatt and megawatt turbines. The Company also offers comprehensive field services to the wind energy industry. The Company is increasingly focusing its efforts on the identification and/or development of product and service offerings which will improve the reliability and efficiency of wind turbines, and therefore enhance the economic benefits to its customers. The Company provides wind services across the U.S., with primary service locations in South Dakota and Texas. The Company operates drivetrain service centers in these two locations, focused on servicing the growing installed base of MW wind turbines as they come off warranty and, to a limited extent, industrial gearboxes requiring precision repair and testing.

 

Corporate and Eliminations

 

“Corporate” includes the assets and selling, general and administrative expenses of the Company’s corporate office. “Eliminations” comprises adjustments to reconcile segment results to consolidated results.

 

Summary financial information by reportable segment for the three and nine months ended September 30, 2014 and 2013 is as follows:

 

For the Three Months Ended September 30, 2014:

 

Towers and
Weldments

 

Gearing

 

Services

 

Corporate

 

Eliminations

 

Consolidated

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenues from external customers

 

$

45,027

 

$

10,267

 

$

4,995

 

$

 

$

 

$

60,289

 

Intersegment revenues

 

72

 

67

 

31

 

 

(170

)

 

Operating profit (loss)

 

3,351

 

(2,294

)

(732

)

(2,136

)

 

(1,811

)

Depreciation and amortization

 

1,061

 

1,906

 

312

 

33

 

 

3,312

 

Capital expenditures

 

552

 

358

 

50

 

57

 

 

1,017

 

 

For the Three Months Ended September 30, 2013:

 

Towers and
Weldments

 

Gearing

 

Services

 

Corporate

 

Eliminations

 

Consolidated

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenues from external customers

 

$

47,020

 

$

10,138

 

$

3,704

 

$

 

$

 

$

60,862

 

Intersegment revenues

 

64

 

251

 

 

 

(315

)

 

Operating profit (loss)

 

6,561

 

(5,375

)

(1,276

)

(2,220

)

22

 

(2,288

)

Depreciation and amortization

 

941

 

2,014

 

409

 

15

 

 

3,379

 

Capital expenditures

 

750

 

849

 

7

 

22

 

 

1,628

 

 

For the Nine Months Ended September 30, 2014:

 

Towers and
Weldments

 

Gearing

 

Services

 

Corporate

 

Eliminations

 

Consolidated

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenues from external customers

 

$

145,955

 

$

30,681

 

$

10,834

 

$

 

$

 

$

187,470

 

Intersegment revenues (1)

 

329

 

851

 

111

 

 

(1,291

)

 

Operating profit (loss)

 

17,523

 

(7,060

)

(3,390

)

(7,774

)

(4

)

(705

)

Depreciation and amortization

 

3,052

 

5,512

 

932

 

80

 

 

9,576

 

Capital expenditures

 

3,664

 

1,334

 

175

 

387

 

 

5,560

 

 

For the Nine Months Ended September 30, 2013:

 

Towers and
Weldments

 

Gearing

 

Services

 

Corporate

 

Eliminations

 

Consolidated

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenues from external customers

 

$

115,977

 

$

28,098

 

$

15,238

 

$

 

$

 

$

159,313

 

Intersegment revenues (1)

 

67

 

3,456

 

15

 

 

(3,538

)

 

Operating profit (loss)

 

13,779

 

(12,326

)

(3,239

)

(7,455

)

(19

)

(9,260

)

Depreciation and amortization

 

2,841

 

7,469

 

1,064

 

38

 

 

11,412

 

Capital expenditures

 

1,235

 

2,504

 

240

 

378

 

 

4,357

 

 

 

 

Total Assets as of

 

 

 

September 30,

 

December 31,

 

 

 

2014

 

2013

 

Segments:

 

 

 

 

 

Towers and Weldments

 

$

49,795

 

$

51,934

 

Gearing

 

55,961

 

66,208

 

Services

 

16,100

 

14,800

 

Assets held for sale

 

1,182

 

1,970

 

Corporate

 

296,809

 

300,835

 

Eliminations

 

(261,051

)

(272,053

)

 

 

$

158,796

 

$

163,694

 

 

 

(1)

Intersegment revenues primarily consist of sales from Gearing to Services. Sales from Gearing to Services totaled $851 and $3,456 for the nine months ended September 30, 2014 and 2013, respectively.

 

COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES

NOTE 15 — COMMITMENTS AND CONTINGENCIES

 

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. Refer to Note 12, “Legal Proceedings” of these consolidated financial statements for further discussion of environmental compliance and remediation liabilities.

 

In connection with the Company’s ongoing restructuring initiatives, during the third quarter of 2012, the Company identified a liability associated with the planned sale of 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 has submitted a plan to the IEPA for approval to conduct a pilot study to test the effectiveness of the selected remediation technology.  On July 23, 2014, the Company received comments from the IEPA on the proposed site remediation plan.  The Company is developing a response to those comments. The Company will continue to reevaluate its reserve balance associated with this matter as it gathers additional information. As of September 30, 2014, the accrual balance associated with this matter totaled $500.

 

Warranty Liability

 

The Company provides warranty terms that range from one to five years for various products and services supplied by the Company. In certain contracts, the Company has recourse provisions for items that would enable recovery from third parties for amounts paid to customers under warranty provisions. As of September 30, 2014 and 2013, estimated product warranty liability was $773 and $675, respectively, and is recorded within accrued liabilities in the Company’s condensed consolidated balance sheets.

 

The changes in the carrying amount of the Company’s total product warranty liability for the nine months ended September 30, 2014 and 2013 were as follows:

 

 

 

For the Nine Months Ended September 30,

 

 

 

2014

 

2013

 

 

 

 

 

 

 

Balance, beginning of period

 

$

457

 

$

707

 

Warranty expense

 

352

 

(25

)

Warranty claims

 

(36

)

(7

)

Balance, end of period

 

$

773

 

$

675

 

 

Allowance for Doubtful Accounts

 

Based upon past experience and judgment, the Company establishes an allowance for doubtful accounts with respect to accounts receivable. 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 collectability of its accounts receivable. These factors include individual customer circumstances, history with the Company, the length of the time period during which the account receivable has been past due and other relevant criteria.

 

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 collectability of its accounts receivable, as noted above, or modifications to its credit standards, collection practices and other related policies may impact the Company’s allowance for doubtful accounts and its financial results. The activity in the accounts receivable allowance liability for the nine months ended September 30, 2014 and 2013 consisted of the following:

 

 

 

For the Nine Months Ended September 30,

 

 

 

2014

 

2013

 

 

 

 

 

 

 

Balance at beginning of period

 

$

17

 

$

453

 

Bad debt expense

 

110

 

(38

)

Write-offs

 

(5

)

(236

)

Other adjustments

 

(8

)

 

Balance at end of period

 

$

114

 

$

179

 

 

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.

 

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/or dependent on actual losses sustained by the customer. The Company does not believe that this potential exposure will have a material adverse effect on the Company’s consolidated financial position or results of operations. There was no reserve for liquidated damages as of September 30, 2014.

 

Workers’ Compensation Reserves

 

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. Historical loss experience combined with actuarial evaluation methods and the application of risk transfer programs are used to determine required workers’ compensation reserves. The Company takes into account claims incurred but not reported when determining its workers’ compensation reserves. 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.  As of September 30, 2014, the Company had $1,048 accrued for self-insured workers’ compensation.

 

Other

 

As of December 31, 2013, approximately 18% of the Company’s employees were covered by two collective bargaining agreements with local unions in Cicero, Illinois and Neville Island, Pennsylvania. The collective bargaining agreement with the Cicero union is expected to remain in effect through February 2018.  The collective bargaining agreement with the Neville Island union is expected to remain in effect through October 2017.

 

See Note 16, “New Markets Tax Credit Transaction” of these consolidated financial statements related to a strategic financing transaction (the “NMTC Transaction”).  The NMTC Transaction relates to the Company’s Abilene, Texas drivetrain service center facility (the “Gearbox Facility”), which is focused on servicing the growing installed base of MW wind turbines as they come off warranty and, to a limited extent, industrial gearboxes requiring precision repair and testing.  Pursuant to the NMTC Transaction, the gross loan and investment in the 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 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.

NEW MARKETS TAX CREDIT TRANSACTION
NEW MARKETS TAX CREDIT TRANSACTION

NOTE 16 — NEW MARKETS TAX CREDIT TRANSACTION

 

On July 20, 2011, the Company executed the NMTC Transaction 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 included a gross loan from AMCREF to Broadwind Services 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 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 Gearbox Facility assets and operating costs, as permitted under the NMTC program.

 

The Gearbox Facility must operate and be in compliance with various regulations and restrictions through September 2018, the end of the seven year 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 condensed consolidated balance sheet as of September 30, 2014. 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 and receive $130 from the Company. 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 this transaction structure are variable interest entities (“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 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 Long Term Debt, Net of Current Maturities in the condensed consolidated balance sheet as of September 30, 2014. Incremental costs to maintain the transaction structure during the compliance period will be recognized as they are incurred.

RESTRUCTURING
RESTRUCTURING

NOTE 17 — RESTRUCTURING

 

The Company’s total net restructuring charges incurred to date are detailed below:

 

 

 

2011

 

2012

 

2013

 

Q1 ’14

 

Q2 ’14

 

Q3 ’14

 

Total

 

 

 

Actual

 

Actual

 

Actual

 

Actual

 

Actual

 

Actual

 

Incurred

 

Restructuring charges:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Capital expenditures

 

$

5

 

$

2,596

 

$

2,352

 

$

441

 

$

96

 

$

127

 

$

5,617

 

Gain on sale of Brandon, SD Facility

 

 

 

(3,585

)

 

 

 

(3,585

)

Accelerated depreciation

 

 

819

 

898

 

 

 

 

1,717

 

Severance

 

430

 

 

435

 

 

 

 

865

 

Impairment charges

 

 

 

2,365

 

 

 

 

2,365

 

Moving and other exit-related costs

 

439

 

1,677

 

3,085

 

329

 

568

 

158

 

6,256

 

Total

 

$

874

 

$

5,092

 

$

5,550

 

$

770

 

$

664

 

$

285

 

$

13,235

 

 

During the third quarter of 2011, the Company conducted a review of its business strategies and product plans based on the outlook for the economy at large, the forecast for the industries it serves, and its business environment. The Company concluded that its manufacturing footprint and fixed cost base were too large and expensive for its medium-term needs and began restructuring its facility capacity and its management structure to consolidate and increase the efficiencies of its operations.

 

The Company is executing a plan to reduce its facility footprint by approximately 40% through the sale and/or closure through the end of 2014 of facilities comprising a total of approximately 600,000 square feet. The Company has so far closed or reduced its leased presence at six facilities and achieved a reduction of approximately 400,000 square feet. During 2013, the Company determined that the Clintonville Facility was no longer required in its operations and reclassified the property and equipment associated with the Clintonville Facility, as well as certain Gearing equipment, to Assets Held for Sale. The most significant remaining reduction relates to the anticipated closure and disposition of the Cicero Avenue Facility. The use of the Cicero Avenue Facility in the Company’s production was significantly curtailed at the end of 2013, and the Company recorded a related $1,732 impairment, primarily in cost of sales in the fourth quarter of 2013. The Company believes its remaining locations will be sufficient to support its Towers and Weldments, Gearing, Services and general corporate and administrative activities, while allowing for growth for the next several years.

 

In the third quarter of 2012, the Company identified a liability associated with the planned sale of the Cicero Avenue Facility. The liability is associated with environmental remediation costs that were originally identified while preparing the site for sale. The liability has been adjusted as needed since being originally identified and the expenses associated with this liability have been recorded as restructuring charges. As of September 30, 2014 the accrual balance remaining was $500.

 

Including costs incurred to date, the Company expects that a total of approximately $13,600 of net costs will be incurred to implement this restructuring initiative. To date, the Company has incurred approximately $13,200, or 98% of the total expected restructuring costs. The Company’s restructuring charges generally include costs to close or exit facilities, costs to move equipment, the related costs of building infrastructure for moved equipment and employee related costs. Of the total restructuring costs incurred, a total of approximately $4,700 consists of non-cash charges. Restructuring costs incurred to date include $900 of severance and $1,750 of accelerated depreciation of the Cicero Avenue Facility. The table below details the Company’s total net restructuring charges incurred to date and the total net expected restructuring charges as of September 30, 2014:

 

 

 

2011

 

2012

 

2013

 

Q1 ’14

 

Q2 ’14

 

Q3 ’14

 

Total

 

Total

 

 

 

Actual

 

Actual

 

Actual

 

Actual

 

Actual

 

Actual

 

Incurred

 

Projected

 

Capital expenditures:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gearing

 

$

5

 

$

2,072

 

$

2,075

 

$

441

 

$

96

 

$

127

 

$

4,816

 

$

4,867

 

Corporate

 

 

524

 

277

 

 

 

 

801

 

801

 

Total capital expenditures

 

5

 

2,596

 

2,352

 

441

 

96

 

127

 

5,617

 

5,668

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of sales:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gearing

 

131

 

308

 

2,176

 

269

 

519

 

164

 

3,567

 

3,835

 

Services

 

 

225

 

234

 

 

 

 

459

 

459

 

Total cost of sales

 

131

 

533

 

2,410

 

269

 

519

 

164

 

4,026

 

4,294

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Selling, general, and administrative expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Towers

 

 

130

 

176

 

18

 

7

 

15

 

346

 

346

 

Gearing

 

35

 

520

 

451

 

42

 

42

 

98

 

1,188

 

1,188

 

Services

 

 

40

 

 

 

 

 

40

 

40

 

Corporate

 

406

 

49

 

462

 

 

 

 

917

 

917

 

Total selling, general and administrative expenses

 

441

 

739

 

1,089

 

60

 

49

 

113

 

2,491

 

2,491

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other - Towers and Weldments gain on Brandon, SD Facility:

 

 

 

(3,585

)

 

 

 

(3,585

)

(3,585

)

Non-cash expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Towers

 

 

 

291

 

 

 

 

291

 

291

 

Gearing

 

247

 

1,166

 

3,008

 

 

 

(119

)

4,302

 

4,302

 

Services

 

 

58

 

(15

)

 

 

 

43

 

43

 

Corporate

 

50

 

 

 

 

 

 

50

 

50

 

Total non-cash expenses

 

297

 

1,224

 

3,284

 

 

 

(119

)

4,686

 

4,686

 

Grand total

 

$

874

 

$

5,092

 

$

5,550

 

$

770

 

$

664

 

$

285

 

$

13,235

 

$

13,554

 

 

SUBSEQUENT EVENT
SUBSEQUENT EVENT

NOTE 18 – SUBSEQUENT EVENT

 

On October 29, 2014, the Company’s Board of Directors authorized a program to repurchase up to $10,000 of the Company’s outstanding common stock over the next six months.  The Company’s share repurchase program does not obligate it to acquire any specific number of shares.  The common stock may be acquired in the open market at prices subject to certain pricing guidelines determined by management. The Company has no obligation to repurchase shares, and the Company may discontinue purchases at any time that management determines additional purchases are not warranted.

EARNINGS PER SHARE (Tables)
Reconciliation of basic and diluted earnings per share

                  

 

 

Three Months Ended

 

Nine Months Ended

 

 

 

September 30,

 

September 30,

 

 

 

2014

 

2013

 

2014

 

2013

 

Basic earnings per share calculation:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss

 

$

(1,814

)

$

(2,398

)

$

(997

)

$

(6,753

)

 

 

 

 

 

 

 

 

 

 

Weighted average number of common shares outstanding

 

14,791,811

 

14,524,522

 

14,728,379

 

14,405,498

 

Basic net loss per share

 

$

(0.12

)

$

(0.17

)

$

(0.07

)

$

(0.47

)

 

 

 

 

 

 

 

 

 

 

Diluted earnings per share calculation:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss

 

$

(1,814

)

$

(2,398

)

$

(997

)

$

(6,753

)

 

 

 

 

 

 

 

 

 

 

Weighted average number of common shares outstanding

 

14,791,811

 

14,524,522

 

14,728,379

 

14,405,498

 

Common stock equivalents:

 

 

 

 

 

 

 

 

 

Stock options and unvested restricted stock units

 

 

 

 

 

Weighted average number of common shares outstanding

 

14,791,811

 

14,524,522

 

14,728,379

 

14,405,498

 

Diluted net loss per share

 

$

(0.12

)

$

(0.17

)

$

(0.07

)

$

(0.47

)

 

CASH AND CASH EQUIVALENTS AND SHORT-TERM INVESTMENTS (Tables)
Summary of components of cash and cash equivalents and short-term investments

                                                                                                                                                                                       

 

 

September 30,

 

December 31,

 

 

 

2014

 

2013

 

Cash and cash equivalents:

 

 

 

 

 

Cash

 

$

9,544 

 

$

12,021 

 

Money market funds

 

4,570 

 

7,423 

 

Municipal bonds

 

2,912 

 

5,492 

 

Total cash and cash equivalents

 

17,026 

 

24,936 

 

 

 

 

 

 

 

Short-term investments (available-for-sale):

 

 

 

 

 

Municipal bonds

 

10,833 

 

1,143 

 

 

 

 

 

 

 

Total cash and cash equivalents and short-term investments

 

$

27,859 

 

$

26,079 

 

 

INVENTORIES (Tables)
Schedule of the components of inventories from operations

                   

 

 

September 30,

 

December 31,

 

 

 

2014

 

2013

 

 

 

 

 

 

 

Raw materials

 

$

17,324

 

$

21,859

 

Work-in-process

 

10,108

 

11,212

 

Finished goods

 

7,973

 

6,381

 

 

 

35,405

 

39,452

 

Less: Reserve for excess and obsolete inventory

 

(2,572

)

(2,309

)

Net inventories

 

$

32,833

 

$

37,143

 

 

INTANGIBLE ASSETS (Tables)

                                        

 

 

September 30, 2014

 

December 31, 2013

 

 

 

 

 

 

 

 

 

Weighted

 

 

 

 

 

 

 

Weighted

 

 

 

 

 

 

 

Net

 

Average

 

 

 

 

 

Net

 

Average

 

 

 

Cost

 

Accumulated

 

Book

 

Amortization

 

Cost

 

Accumulated

 

Book

 

Amortization

 

 

 

Basis

 

Amortization

 

Value

 

Period

 

Basis

 

Amortization

 

Value

 

Period

 

Intangible assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Customer relationships

 

$

3,979

 

$

(3,628

)

$

351

 

7.2

 

$

3,979

 

$

(3,595

)

$

384

 

7.2

 

Trade names

 

7,999

 

(2,780

)

5,219

 

20.0

 

7,999

 

(2,480

)

5,519

 

20.0

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Intangible assets

 

$

11,978

 

$

(6,408

)

$

5,570

 

15.8

 

$

11,978

 

$

(6,075

)

$

5,903

 

15.8

 

 

                                                                                                                                                                         

2014

 

$

111 

 

2015

 

444 

 

2016

 

444 

 

2017

 

444 

 

2018

 

444 

 

2019 and thereafter

 

3,683 

 

Total

 

$

5,570 

 

 

ACCRUED LIABILITIES (Tables)
Schedule of accrued liabilities

 

 

September 30,

 

December 31,

 

 

 

2014

 

2013

 

 

 

 

 

 

 

Accrued payroll and benefits

 

$

4,150 

 

$

5,144 

 

Accrued property taxes

 

463 

 

143 

 

Income taxes payable

 

500 

 

493 

 

Accrued professional fees

 

129 

 

36 

 

Accrued warranty liability

 

773 

 

457 

 

Accrued regulatory settlement

 

2,066 

 

 

Accrued environmental reserve

 

536 

 

500 

 

Accrued self-insurance reserve

 

1,048 

 

803 

 

Accrued other

 

396 

 

539 

 

Total accrued liabilities

 

$

10,061 

 

$

8,115 

 

 

DEBT AND CREDIT AGREEMENTS (Tables)
Schedule of outstanding debt balances

           

 

 

September 30,

 

December 31,

 

 

 

2014

 

2013

 

 

 

 

 

 

 

Term loans and notes payable

 

$

2,757

 

$

2,956

 

Less: Current portion

 

(149

)

(201

)

Long-term debt, net of current maturities

 

$

2,608

 

$

2,755

 

 

FAIR VALUE MEASUREMENTS (Tables)
Schedule of the fair values of the Company's financial assets

            

 

 

September 30, 2014

 

 

 

Level 1

 

Level 2

 

Level 3

 

Total

 

Assets measured on a recurring basis:

 

 

 

 

 

 

 

 

 

Municipal bonds and money market funds

 

$

 

$

18,315 

 

$

 

$

18,315 

 

Assets measured on a nonrecurring basis:

 

 

 

 

 

 

 

 

 

Gearing equipment

 

 

 

361 

 

361 

 

Clintonville, WI facility

 

 

 

821 

 

821 

 

Gearing Cicero Ave. facility

 

 

 

560 

 

560 

 

Total assets at fair value

 

$

 

$

18,315 

 

$

1,742 

 

$

20,057 

 

   

 

 

December 31, 2013

 

 

 

Level 1

 

Level 2

 

Level 3

 

Total

 

Assets measured on a recurring basis:

 

 

 

 

 

 

 

 

 

Municipal bonds and money market funds

 

$

 

$

14,058 

 

$

 

$

14,058 

 

Assets measured on a nonrecurring basis:

 

 

 

 

 

 

 

 

 

Gearing equipment

 

 

 

1,149 

 

1,149 

 

Clintonville, WI facility

 

 

 

821 

 

821 

 

Gearing Cicero Ave. facility

 

 

 

560 

 

560 

 

Total assets at fair value

 

$

 

$

14,058 

 

$

2,530 

 

$

16,588 

 

 

SHARE-BASED COMPENSATION (Tables)

 

 

 

Options

 

Weighted Average
Exercise Price

 

Outstanding as of December 31, 2013

 

207,775

 

$

26.22

 

Granted

 

 

$

 

Exercised

 

(2,863

)

$

3.39

 

Forfeited

 

(9,624

)

$

5.12

 

Expired

 

(36,070

)

$

74.68

 

Outstanding as of September 30, 2014

 

159,218

 

$

16.93

 

 

 

 

 

 

 

Exercisable as of September 30, 2014

 

99,083

 

$

23.92

 

 

 

 

 

Number of RSU’s

 

Weighted Average
Grant-Date Fair Value
Per RSU

 

Outstanding as of December 31, 2013

 

670,338

 

$

4.47

 

Granted

 

196,442

 

$

9.17

 

Vested

 

(248,565

)

$

4.64

 

Forfeited

 

(66,447

)

$

5.32

 

Outstanding as of September 30, 2014

 

551,768

 

$

5.96

 

 

 

 

 

 

Nine Months Ended September 30,

 

 

 

2014

 

2013

 

Share-based compensation expense:

 

 

 

 

 

Cost of Sales

 

$

98 

 

$

136 

 

Selling, general and administrative

 

418 

 

1,302 

 

Income tax benefit (1)

 

 

 

Net effect of share-based compensation expense on net loss

 

$

516 

 

$

1,438 

 

 

 

 

 

 

 

Reduction in earnings per share:

 

 

 

 

 

Basic and diluted earnings per share (2)

 

$

0.03 

 

$

0.10 

 

 

 

(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 nine months ended September 30, 2014 and 2013. The result of the loss situation creates a timing difference, resulting in a deferred tax asset, which is fully reserved for in the Company’s valuation allowance.

(2)

Diluted earnings per share for the nine months ended September 30, 2014 and 2013 does not include common stock equivalents due to their anti-dilutive nature as a result of the Company’s net losses for these respective periods.  Accordingly, basic earnings per share and diluted earnings per share are identical for all periods presented.

 

SEGMENT REPORTING (Tables)
Schedule of financial information by reportable segment

 

 

For the Three Months Ended September 30, 2014:

 

Towers and
Weldments

 

Gearing

 

Services

 

Corporate

 

Eliminations

 

Consolidated

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenues from external customers

 

$

45,027

 

$

10,267

 

$

4,995

 

$

 

$

 

$

60,289

 

Intersegment revenues

 

72

 

67

 

31

 

 

(170

)

 

Operating profit (loss)

 

3,351

 

(2,294

)

(732

)

(2,136

)

 

(1,811

)

Depreciation and amortization

 

1,061

 

1,906

 

312

 

33

 

 

3,312

 

Capital expenditures

 

552

 

358

 

50

 

57

 

 

1,017

 

 

For the Three Months Ended September 30, 2013:

 

Towers and
Weldments

 

Gearing

 

Services

 

Corporate

 

Eliminations

 

Consolidated

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenues from external customers

 

$

47,020

 

$

10,138

 

$

3,704

 

$

 

$

 

$

60,862

 

Intersegment revenues

 

64

 

251

 

 

 

(315

)

 

Operating profit (loss)

 

6,561

 

(5,375

)

(1,276

)

(2,220

)

22

 

(2,288

)

Depreciation and amortization

 

941

 

2,014

 

409

 

15

 

 

3,379

 

Capital expenditures

 

750

 

849

 

7

 

22

 

 

1,628

 

 

For the Nine Months Ended September 30, 2014:

 

Towers and
Weldments

 

Gearing

 

Services

 

Corporate

 

Eliminations

 

Consolidated

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenues from external customers

 

$

145,955

 

$

30,681

 

$

10,834

 

$

 

$

 

$

187,470

 

Intersegment revenues (1)

 

329

 

851

 

111

 

 

(1,291

)

 

Operating profit (loss)

 

17,523

 

(7,060

)

(3,390

)

(7,774

)

(4

)

(705

)

Depreciation and amortization

 

3,052

 

5,512

 

932

 

80

 

 

9,576

 

Capital expenditures

 

3,664

 

1,334

 

175

 

387

 

 

5,560

 

 

For the Nine Months Ended September 30, 2013:

 

Towers and
Weldments

 

Gearing

 

Services

 

Corporate

 

Eliminations

 

Consolidated

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenues from external customers

 

$

115,977

 

$

28,098

 

$

15,238

 

$

 

$

 

$

159,313

 

Intersegment revenues (1)

 

67

 

3,456

 

15

 

 

(3,538

)

 

Operating profit (loss)

 

13,779

 

(12,326

)

(3,239

)

(7,455

)

(19

)

(9,260

)

Depreciation and amortization

 

2,841

 

7,469

 

1,064

 

38

 

 

11,412

 

Capital expenditures

 

1,235

 

2,504

 

240

 

378

 

 

4,357

 

 

 

 

Total Assets as of

 

 

 

September 30,

 

December 31,

 

 

 

2014

 

2013

 

Segments:

 

 

 

 

 

Towers and Weldments

 

$

49,795

 

$

51,934

 

Gearing

 

55,961

 

66,208

 

Services

 

16,100

 

14,800

 

Assets held for sale

 

1,182

 

1,970

 

Corporate

 

296,809

 

300,835

 

Eliminations

 

(261,051

)

(272,053

)

 

 

$

158,796

 

$

163,694

 

 

(1)

Intersegment revenues primarily consist of sales from Gearing to Services. Sales from Gearing to Services totaled $851 and $3,456 for the nine months ended September 30, 2014 and 2013, respectively.

 

COMMITMENTS AND CONTINGENCIES (Tables)

              

 

 

For the Nine Months Ended September 30,

 

 

 

2014

 

2013

 

 

 

 

 

 

 

Balance, beginning of period

 

$

457

 

$

707

 

Warranty expense

 

352

 

(25

)

Warranty claims

 

(36

)

(7

)

Balance, end of period

 

$

773

 

$

675

 

 

                    

 

 

For the Nine Months Ended September 30,

 

 

 

2014

 

2013

 

 

 

 

 

 

 

Balance at beginning of period

 

$

17

 

$

453

 

Bad debt expense

 

110

 

(38

)

Write-offs

 

(5

)

(236

)

Other adjustments

 

(8

)

 

Balance at end of period

 

$

114

 

$

179

 

 

RESTRUCTURING (Tables)

 

 

2011

 

2012

 

2013

 

Q1 ’14

 

Q2 ’14

 

Q3 ’14

 

Total

 

 

 

Actual

 

Actual

 

Actual

 

Actual

 

Actual

 

Actual

 

Incurred

 

Restructuring charges:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Capital expenditures

 

$

5

 

$

2,596

 

$

2,352

 

$

441

 

$

96

 

$

127

 

$

5,617

 

Gain on sale of Brandon, SD Facility

 

 

 

(3,585

)

 

 

 

(3,585

)

Accelerated depreciation

 

 

819

 

898

 

 

 

 

1,717

 

Severance

 

430

 

 

435

 

 

 

 

865

 

Impairment charges

 

 

 

2,365

 

 

 

 

2,365

 

Moving and other exit-related costs

 

439

 

1,677

 

3,085

 

329

 

568

 

158

 

6,256

 

Total

 

$

874

 

$

5,092

 

$

5,550

 

$

770

 

$

664

 

$

285

 

$

13,235

 

 

 

 

 

2011

 

2012

 

2013

 

Q1 ’14

 

Q2 ’14

 

Q3 ’14

 

Total

 

Total

 

 

 

Actual

 

Actual

 

Actual

 

Actual

 

Actual

 

Actual

 

Incurred

 

Projected

 

Capital expenditures:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gearing

 

$

5

 

$

2,072

 

$

2,075

 

$

441

 

$

96

 

$

127

 

$

4,816

 

$

4,867

 

Corporate

 

 

524

 

277

 

 

 

 

801

 

801

 

Total capital expenditures

 

5

 

2,596

 

2,352

 

441

 

96

 

127

 

5,617

 

5,668

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of sales:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gearing

 

131

 

308

 

2,176

 

269

 

519

 

164

 

3,567

 

3,835

 

Services

 

 

225

 

234

 

 

 

 

459

 

459

 

Total cost of sales

 

131

 

533

 

2,410

 

269

 

519

 

164

 

4,026

 

4,294

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Selling, general, and administrative expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Towers

 

 

130

 

176

 

18

 

7

 

15

 

346

 

346

 

Gearing

 

35

 

520

 

451

 

42

 

42

 

98

 

1,188

 

1,188

 

Services

 

 

40

 

 

 

 

 

40

 

40

 

Corporate

 

406

 

49

 

462

 

 

 

 

917

 

917

 

Total selling, general and administrative expenses

 

441

 

739

 

1,089

 

60

 

49

 

113

 

2,491

 

2,491

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other - Towers and Weldments gain on Brandon, SD Facility:

 

 

 

(3,585

)

 

 

 

(3,585

)

(3,585

)

Non-cash expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Towers

 

 

 

291

 

 

 

 

291

 

291

 

Gearing

 

247

 

1,166

 

3,008

 

 

 

(119

)

4,302

 

4,302

 

Services

 

 

58

 

(15

)

 

 

 

43

 

43

 

Corporate

 

50

 

 

 

 

 

 

50

 

50

 

Total non-cash expenses

 

297

 

1,224

 

3,284

 

 

 

(119

)

4,686

 

4,686

 

Grand total

 

$

874

 

$

5,092

 

$

5,550

 

$

770

 

$

664

 

$

285

 

$

13,235

 

$

13,554

 

 

BASIS OF PRESENTATION (Details) (USD $)
3 Months Ended 9 Months Ended 12 Months Ended 45 Months Ended
Sep. 30, 2014
Jun. 30, 2014
Mar. 31, 2014
Sep. 30, 2014
Dec. 31, 2013
Dec. 31, 2012
Dec. 31, 2011
Sep. 30, 2014
Sep. 30, 2014
Credit facility
Aug. 23, 2012
Credit facility
Description of Business
 
 
 
 
 
 
 
 
 
 
Revenue as a percentage of sales associated with new wind turbine installations
 
 
 
76.00% 
 
 
 
 
 
 
BASIS OF PRESENTATION
 
 
 
 
 
 
 
 
 
 
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
 
 
 
 
 
 
 
 
$ 20,000,000 
 
Liquidity
 
 
 
 
 
 
 
 
 
 
Cash and cash equivalents and short-term investments
27,859,000 
 
 
27,859,000 
26,079,000 
 
 
27,859,000 
 
 
Increase (decrease) in Cash and cash equivalents and Short-term investments
 
 
 
1,780,000 
 
 
 
 
 
 
Total debt and capital lease obligations
4,188,000 
 
 
4,188,000 
 
 
 
4,188,000 
 
 
Obligation to make principal payments on outstanding debt during the next twelve months
149,000 
 
 
149,000 
 
 
 
149,000 
 
 
Restructuring charges incurred
285,000 
664,000 
770,000 
13,200,000 
5,550,000 
5,092,000 
874,000 
13,235,000 
 
 
Expected cost to be incurred to implement the restructuring plan
 
 
 
$ 13,600,000 
 
 
 
 
 
 
EARNINGS PER SHARE (Details) (USD $)
In Thousands, except Share data, unless otherwise specified
3 Months Ended 9 Months Ended 12 Months Ended
Sep. 30, 2014
Sep. 30, 2013
Sep. 30, 2014
Sep. 30, 2013
Dec. 31, 2013
Basic earnings per share calculation:
 
 
 
 
 
Net loss
$ (1,814)
$ (2,398)
$ (997)
$ (6,753)
$ (10,499)
Weighted average number of common shares outstanding
14,791,811 
14,524,522 
14,728,379 
14,405,498 
 
Basic net loss per share (in dollars per share)
$ (0.12)
$ (0.17)
$ (0.07)
$ (0.47)
 
Diluted earnings per share calculation:
 
 
 
 
 
Net loss
$ (1,814)
$ (2,398)
$ (997)
$ (6,753)
$ (10,499)
Weighted average number of common shares outstanding
14,791,811 
14,524,522 
14,728,379 
14,405,498 
 
Weighted average number of common shares outstanding
14,791,811 
14,524,522 
14,728,379 
14,405,498 
 
Diluted net loss per share (in dollars per share)
$ (0.12)
$ (0.17)
$ (0.07)
$ (0.47)
 
DISCONTINUED OPERATIONS (Details) (USD $)
In Thousands, unless otherwise specified
1 Months Ended
Mar. 31, 2011
Sep. 30, 2014
DISCONTINUED OPERATIONS
 
 
Secured promissory note receivable outstanding
 
$ 860 
Badger
 
 
DISCONTINUED OPERATIONS
 
 
Noncash proceeds from sale in the form of a secured promissory note
1,500 
 
Secured promissory note receivable past due
 
$ 860 
CASH AND CASH EQUIVALENTS AND SHORT-TERM INVESTMENTS (Details) (USD $)
In Thousands, unless otherwise specified
Sep. 30, 2014
Dec. 31, 2013
Sep. 30, 2013
Dec. 31, 2012
Cash and cash equivalents and short-term investments
 
 
 
 
Total cash and cash equivalents
$ 17,026 
$ 24,936 
$ 22,826 
$ 516 
Short-term investments (available-for-sale)
10,833 
1,143 
 
 
Total cash and cash equivalents and short-term investments
27,859 
26,079 
 
 
Cash
 
 
 
 
Cash and cash equivalents and short-term investments
 
 
 
 
Total cash and cash equivalents
9,544 
12,021 
 
 
Money market funds
 
 
 
 
Cash and cash equivalents and short-term investments
 
 
 
 
Total cash and cash equivalents
4,570 
7,423 
 
 
Municipal bonds
 
 
 
 
Cash and cash equivalents and short-term investments
 
 
 
 
Total cash and cash equivalents
2,912 
5,492 
 
 
Short-term investments (available-for-sale)
$ 10,833 
$ 1,143 
 
 
INVENTORIES (Details) (USD $)
In Thousands, unless otherwise specified
Sep. 30, 2014
Dec. 31, 2013
INVENTORIES
 
 
Raw materials
$ 17,324 
$ 21,859 
Work-in-process
10,108 
11,212 
Finished goods
7,973 
6,381 
Gross inventories
35,405 
39,452 
Less: Reserve for excess and obsolete inventory
(2,572)
(2,309)
Net inventories
$ 32,833 
$ 37,143 
INTANGIBLE ASSETS (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 9 Months Ended 12 Months Ended
Sep. 30, 2014
Sep. 30, 2013
Sep. 30, 2014
Sep. 30, 2013
Dec. 31, 2013
INTANGIBLE ASSETS
 
 
 
 
 
Weighted Average Amortization Period
 
 
15 years 9 months 18 days 
 
15 years 9 months 18 days 
Impairment of assets
 
 
$ 0 
 
 
Cost Basis
11,978 
 
11,978 
 
11,978 
Accumulated Amortization
(6,408)
 
(6,408)
 
(6,075)
Net Book Value
5,570 
 
5,570 
 
5,903 
Amortization expense
111 
111 
333 
1,441 
 
Estimated future amortization expense
 
 
 
 
 
2014
111 
 
111 
 
 
2015
444 
 
444 
 
 
2016
444 
 
444 
 
 
2017
444 
 
444 
 
 
2018
444 
 
444 
 
 
2019 and thereafter
3,683 
 
3,683 
 
 
Net Book Value
5,570 
 
5,570 
 
5,903 
Minimum
 
 
 
 
 
INTANGIBLE ASSETS
 
 
 
 
 
Weighted Average Amortization Period
 
 
10 years 
 
 
Maximum
 
 
 
 
 
INTANGIBLE ASSETS
 
 
 
 
 
Weighted Average Amortization Period
 
 
20 years 
 
 
Customer relationships
 
 
 
 
 
INTANGIBLE ASSETS
 
 
 
 
 
Weighted Average Amortization Period
 
 
7 years 2 months 12 days 
 
7 years 2 months 12 days 
Cost Basis
3,979 
 
3,979 
 
3,979 
Accumulated Amortization
(3,628)
 
(3,628)
 
(3,595)
Net Book Value
351 
 
351 
 
384 
Estimated future amortization expense
 
 
 
 
 
Net Book Value
351 
 
351 
 
384 
Trade names
 
 
 
 
 
INTANGIBLE ASSETS
 
 
 
 
 
Weighted Average Amortization Period
 
 
20 years 
 
20 years 
Cost Basis
7,999 
 
7,999 
 
7,999 
Accumulated Amortization
(2,780)
 
(2,780)
 
(2,480)
Net Book Value
5,219 
 
5,219 
 
5,519 
Estimated future amortization expense
 
 
 
 
 
Net Book Value
$ 5,219 
 
$ 5,219 
 
$ 5,519 
ACCRUED LIABILITIES (Details) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 31, 2013
Sep. 30, 2014
Sep. 30, 2013
Dec. 31, 2012
ACCRUED LIABILITIES
 
 
 
 
Accrued payroll and benefits
$ 5,144 
$ 4,150 
 
 
Accrued property taxes
143 
463 
 
 
Income taxes payable
493 
500 
 
 
Accrued professional fees
36 
129 
 
 
Accrued warranty liability
457 
773 
675 
707 
Accrued regulatory settlement
 
2,066 
 
 
Accrued environmental reserve
500 
536 
 
 
Accrued self-insurance reserve
803 
1,048 
 
 
Accrued other
539 
396 
 
 
Total accrued liabilities
8,115 
10,061 
 
 
Current portion of environmental settlement recorded
500 
 
 
 
Estimated SEC Inquiry settlement recorded
 
$ 1,566 
 
 
DEBT AND CREDIT AGREEMENTS (Details) (USD $)
In Thousands, unless otherwise specified
0 Months Ended 3 Months Ended
Sep. 30, 2014
Dec. 31, 2013
Sep. 30, 2014
New Markets Tax Credit Transaction
Aug. 23, 2012
Credit facility
Sep. 30, 2014
Credit facility
Aug. 23, 2012
Credit facility
Minimum
Sep. 30, 2014
Term loans and notes payable
Dec. 31, 2013
Term loans and notes payable
Sep. 30, 2014
Other term loans
Credit Facilities
 
 
 
 
 
 
 
 
 
Long-term debt, gross
 
 
 
 
 
 
$ 2,757 
$ 2,956 
 
Less-Current portion
(149)
(201)
 
 
 
 
 
 
 
Long-term debt, net of current maturities
2,608 
2,755 
2,600 
 
 
 
 
 
 
Line of credit facilities, term of credit agreements
 
 
 
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% 
 
 
 
 
 
Variable rate basis
 
 
 
one month LIBOR 
 
 
 
 
 
Interest rate margin (as a percent)
 
 
 
4.25% 
 
 
 
 
 
Interest rate (as a percent)
 
 
 
 
 
5.25% 
 
 
 
Annual unused line fee (as a percent)
 
 
 
0.50% 
 
 
 
 
 
Outstanding indebtedness under the Credit Facility
 
 
 
 
 
 
 
 
Current borrowing capacity
 
 
 
 
14,384 
 
 
 
 
Interest rate (as a percent)
 
 
 
 
5.25% 
 
 
 
 
Amount outstanding
 
 
 
 
 
 
 
 
$ 157 
FAIR VALUE MEASUREMENTS (Details) (USD $)
In Thousands, unless otherwise specified
9 Months Ended
Sep. 30, 2014
Dec. 31, 2013
FAIR VALUE MEASUREMENTS
 
 
Municipal bonds and money market funds
$ 27,859 
$ 26,079 
Impairment to property and equipment assets
 
Level 2
 
 
FAIR VALUE MEASUREMENTS
 
 
Total assets at fair value
18,315 
14,058 
Level 3
 
 
FAIR VALUE MEASUREMENTS
 
 
Total assets at fair value
1,742 
2,530 
Total
 
 
FAIR VALUE MEASUREMENTS
 
 
Total assets at fair value
20,057 
16,588 
Recurring |
Level 2 |
Municipal bonds and money market funds
 
 
FAIR VALUE MEASUREMENTS
 
 
Municipal bonds and money market funds
18,315 
14,058 
Recurring |
Total |
Municipal bonds and money market funds
 
 
FAIR VALUE MEASUREMENTS
 
 
Municipal bonds and money market funds
18,315 
14,058 
Nonrecurring |
Level 3 |
Certain Gearing segment machinery and equipment
 
 
FAIR VALUE MEASUREMENTS
 
 
Property plant and equipment at fair value
361 
1,149 
Nonrecurring |
Level 3 |
Clintonville Facility
 
 
FAIR VALUE MEASUREMENTS
 
 
Property plant and equipment at fair value
821 
821 
Nonrecurring |
Level 3 |
Cicero Avenue
 
 
FAIR VALUE MEASUREMENTS
 
 
Property plant and equipment at fair value
560 
560 
Nonrecurring |
Total |
Certain Gearing segment machinery and equipment
 
 
FAIR VALUE MEASUREMENTS
 
 
Property plant and equipment at fair value
361 
1,149 
Nonrecurring |
Total |
Clintonville Facility
 
 
FAIR VALUE MEASUREMENTS
 
 
Property plant and equipment at fair value
821 
821 
Nonrecurring |
Total |
Cicero Avenue
 
 
FAIR VALUE MEASUREMENTS
 
 
Property plant and equipment at fair value
$ 560 
$ 560 
INCOME TAXES (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 30, 2014
Sep. 30, 2013
Sep. 30, 2014
Sep. 30, 2013
Dec. 31, 2013
INCOME TAXES
 
 
 
 
 
Deferred income taxes due, net
$ 0 
 
$ 0 
 
 
Provision (benefit) for income taxes
(26)
28 
39 
64 
 
Operating Loss Carryforwards
 
 
 
 
162,971 
Expiration of the statute of limitations
 
 
 
 
 
Income Taxes
 
 
 
 
 
Decrease in unrecognized tax benefits as a result of the expiration of the applicable statutes of limitations within the next twelve months
$ (32)
 
$ (32)
 
 
INCOME TAXES (Details 2) (USD $)
In Thousands, except Share data, unless otherwise specified
0 Months Ended 9 Months Ended 0 Months Ended
Sep. 30, 2014
Dec. 31, 2013
Feb. 13, 2013
Series A Junior Participating Preferred Stock
item
Sep. 30, 2014
Series A Junior Participating Preferred Stock
Feb. 13, 2013
Series A Junior Participating Preferred Stock
Feb. 13, 2013
Series A Junior Participating Preferred Stock
Minimum
Feb. 12, 2013
Series A Junior Participating Preferred Stock
Minimum
Feb. 13, 2013
Series A Junior Participating Preferred Stock
Maximum
Rights Plan
 
 
 
 
 
 
 
 
Preservation period of tax assets
 
 
 
3 years 
 
 
 
 
Beneficial ownership percentage of any person or group, together with its affiliates and associates
 
 
 
 
 
 
 
4.90% 
Number of rights for each outstanding share of common stock
 
 
 
 
 
 
 
Number of preferred share purchase rights for each outstanding share of the company's common stock
 
 
 
 
0.001 
 
 
 
Exercise price (in dollars per right)
 
 
 
 
14.00 
 
 
 
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% 
 
Unrecognized Tax Benefits
$ 286 
$ 495 
 
 
 
 
 
 
Unrecognized Tax Benefits, Income Tax Penalties and Interest Accrued
$ 240 
$ 209 
 
 
 
 
 
 
SHARE-BASED COMPENSATION (Details) (USD $)
9 Months Ended
Sep. 30, 2014
2007 EIP
 
SHARE-BASED COMPENSATION
 
Number of shares of common stock reserved for grants
691,051 
Common stock issued under share-based compensation plan
221,495 
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
309,514 
Stock Options
 
SHARE-BASED COMPENSATION
 
Expiration term
10 years 
Summary of the stock option activity
 
Outstanding at the beginning of the period (in shares)
207,775 
Granted (in shares)
Exercised (in shares)
(2,863)
Forfeited (in shares)
(9,624)
Expired (in shares)
(36,070)
Outstanding at the end of the period (in shares)
159,218 
Exercisable (in shares)
99,083 
Weighted Average Exercise Price
 
Outstanding at the beginning of the period (in dollars per share)
$ 26.22 
Exercised (in dollars per share)
$ 3.39 
Forfeited (in dollars per share)
$ 5.12 
Expired (in dollars per share)
$ 74.68 
Outstanding at the end of the period (in dollars per share)
$ 16.93 
Exercisable (in dollars per share)
$ 23.92 
Stock Options |
2007 EIP
 
SHARE-BASED COMPENSATION
 
Number of shares reserved
58,283 
Stock Options |
2012 EIP
 
SHARE-BASED COMPENSATION
 
Number of shares reserved
100,935 
Stock Options |
Minimum
 
SHARE-BASED COMPENSATION
 
Vesting term
1 year 
Stock Options |
Maximum
 
SHARE-BASED COMPENSATION
 
Vesting term
5 years 
Restricted stock unit (RSU) |
2007 EIP
 
SHARE-BASED COMPENSATION
 
Number of shares reserved
47,607 
Restricted stock unit (RSU) |
2012 EIP
 
SHARE-BASED COMPENSATION
 
Number of shares reserved
504,161 
Restricted stock unit (RSU) |
Minimum
 
SHARE-BASED COMPENSATION
 
Vesting term
1 year 
Restricted stock unit (RSU) |
Maximum
 
SHARE-BASED COMPENSATION
 
Vesting term
5 years 
SHARE-BASED COMPENSATION (Details 2) (USD $)
9 Months Ended
Sep. 30, 2014
Sep. 30, 2013
Stock Options
 
 
Weighted Average Grant-Date Fair Value Per RSU
 
 
Forfeiture rate (as percent)
25.00% 
25.00% 
Restricted stock unit (RSU)
 
 
Summary of the restricted stock unit activity
 
 
Outstanding at the beginning of the period (in shares)
670,338 
 
Granted (in shares)
196,442 
 
Vested (in shares)
(248,565)
 
Forfeited (in shares)
(66,447)
 
Outstanding at the end of the period (in shares)
551,768 
 
Weighted Average Grant-Date Fair Value Per RSU
 
 
Outstanding at the beginning of the period (in dollars per share)
$ 4.47 
 
Granted (in dollars per share)
$ 9.17 
 
Vested (in dollars per share)
$ 4.64 
 
Forfeited (in dollars per share)
$ 5.32 
 
Outstanding at the end of the period (in dollars per share)
$ 5.96 
 
SHARE-BASED COMPENSATION (Details 3) (USD $)
In Thousands, except Per Share data, unless otherwise specified
9 Months Ended
Sep. 30, 2014
Sep. 30, 2013
Summary of share-based compensation expense
 
 
Net effect of share-based compensation expense on net loss
$ 516 
$ 1,438 
Reduction in earnings per share:
 
 
Basic earnings per share (in dollars per share)
$ 0.03 
$ 0.10 
Pre-tax compensation expense for all unvested share-based awards
2,380 
 
Cost of sales
 
 
Summary of share-based compensation expense
 
 
Share-based compensation expense
98 
136 
Selling, general and administrative
 
 
Summary of share-based compensation expense
 
 
Share-based compensation expense
$ 418 
$ 1,302 
LEGAL PROCEEDINGS (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 9 Months Ended 0 Months Ended 1 Months Ended 9 Months Ended 3 Months Ended
Sep. 30, 2014
Sep. 30, 2013
Sep. 30, 2014
Sep. 30, 2013
Sep. 24, 2013
Potential violation of federal environmental laws
item
Mar. 30, 2011
Putative shareholder derivative lawsuits
item
Sep. 30, 2014
Putative shareholder derivative lawsuits
Sep. 30, 2014
SEC Inquiry
Jun. 30, 2014
SEC Inquiry
LEGAL PROCEEDINGS
 
 
 
 
 
 
 
 
 
Number of lawsuits
 
 
 
 
 
 
 
 
Number of lawsuits alleging violation of Section 14(a) of the Exchange Act in connection with proxy statement
 
 
 
 
 
 
 
 
Number of federal derivative lawsuits consolidated
 
 
 
 
 
 
 
 
Settlement amount
$ 816 
$ 1,500 
$ 1,566 
$ 1,500 
$ 1,500 
 
$ 600 
$ 816 
$ 750 
Number of installments over which fine is payable
 
 
 
 
 
 
 
 
Fine payable under each installment
 
 
 
 
$ 500 
 
 
 
 
Period over which fine is payable
 
 
 
 
3 years 
 
 
 
 
SEGMENT REPORTING (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 30, 2014
Sep. 30, 2013
Sep. 30, 2014
Sep. 30, 2013
Dec. 31, 2013
SEGMENT REPORTING
 
 
 
 
 
Primary service locations
 
 
 
 
Revenues
$ 60,289 
$ 60,862 
$ 187,470 
$ 159,313 
 
Operating profit (loss)
(1,811)
(2,288)
(705)
(9,260)
 
Depreciation and amortization
3,312 
3,379 
9,576 
11,412 
 
Capital Expenditures
1,017 
1,628 
5,560 
4,357 
 
Total Assets
158,796 
 
158,796 
 
163,694 
Towers and Weldments Segment
 
 
 
 
 
SEGMENT REPORTING
 
 
 
 
 
Typical capacity of wind turbines for which towers are manufactured (in megawatts)
 
 
 
 
Number of facilities
 
 
 
Revenues
45,027 
47,020 
145,955 
115,977 
 
Operating profit (loss)
3,351 
6,561 
17,523 
13,779 
 
Depreciation and amortization
1,061 
941 
3,052 
2,841 
 
Capital Expenditures
552 
750 
3,664 
1,235 
 
Towers and Weldments Segment |
Minimum
 
 
 
 
 
SEGMENT REPORTING
 
 
 
 
 
Power generating capacity of turbines that towers produced annually can support (in megawatts)
 
 
1,200 
 
 
Towers and Weldments Segment |
Maximum
 
 
 
 
 
SEGMENT REPORTING
 
 
 
 
 
Annual tower production capacity (in towers)
 
 
500 
 
 
Gearing
 
 
 
 
 
SEGMENT REPORTING
 
 
 
 
 
Revenues
10,267 
10,138 
30,681 
28,098 
 
Operating profit (loss)
(2,294)
(5,375)
(7,060)
(12,326)
 
Depreciation and amortization
1,906 
2,014 
5,512 
7,469 
 
Capital Expenditures
358 
849 
1,334 
2,504 
 
Services
 
 
 
 
 
SEGMENT REPORTING
 
 
 
 
 
Revenues
4,995 
3,704 
10,834 
15,238 
 
Operating profit (loss)
(732)
(1,276)
(3,390)
(3,239)
 
Depreciation and amortization
312 
409 
932 
1,064 
 
Capital Expenditures
50 
175 
240 
 
Corporate
 
 
 
 
 
SEGMENT REPORTING
 
 
 
 
 
Operating profit (loss)
(2,136)
(2,220)
(7,774)
(7,455)
 
Depreciation and amortization
33 
15 
80 
38 
 
Capital Expenditures
57 
22 
387 
378 
 
Operating segments
 
 
 
 
 
SEGMENT REPORTING
 
 
 
 
 
Total Assets
158,796 
 
158,796 
 
163,694 
Operating segments |
Towers and Weldments Segment
 
 
 
 
 
SEGMENT REPORTING
 
 
 
 
 
Total Assets
49,795 
 
49,795 
 
51,934 
Operating segments |
Gearing
 
 
 
 
 
SEGMENT REPORTING
 
 
 
 
 
Total Assets
55,961 
 
55,961 
 
66,208 
Operating segments |
Services
 
 
 
 
 
SEGMENT REPORTING
 
 
 
 
 
Total Assets
16,100 
 
16,100 
 
14,800 
Operating segments |
Corporate
 
 
 
 
 
SEGMENT REPORTING
 
 
 
 
 
Total Assets
296,809 
 
296,809 
 
300,835 
Operating segments |
Assets held for sale
 
 
 
 
 
SEGMENT REPORTING
 
 
 
 
 
Total Assets
1,182 
 
1,182 
 
1,970 
Eliminations
 
 
 
 
 
SEGMENT REPORTING
 
 
 
 
 
Revenues
(170)
(315)
(1,291)
(3,538)
 
Operating profit (loss)
 
22 
(4)
(19)
 
Total Assets
(261,051)
 
(261,051)
 
(272,053)
Eliminations |
Towers and Weldments Segment
 
 
 
 
 
SEGMENT REPORTING
 
 
 
 
 
Revenues
72 
64 
329 
67 
 
Eliminations |
Gearing
 
 
 
 
 
SEGMENT REPORTING
 
 
 
 
 
Revenues
67 
251 
851 
3,456 
 
Eliminations |
Services
 
 
 
 
 
SEGMENT REPORTING
 
 
 
 
 
Revenues
$ 31 
 
$ 111 
$ 15 
 
COMMITMENTS AND CONTINGENCIES (Details) (USD $)
In Thousands, unless otherwise specified
9 Months Ended
Sep. 30, 2014
Sep. 30, 2013
Environmental Compliance and Remediation Liabilities
 
 
Liability associated with environmental remediation costs
$ 500 
 
Changes in the carrying amount of the total product warranty liability
 
 
Balance at beginning of period
457 
707 
Warranty expense
352 
(25)
Warranty claims
(36)
(7)
Balance at end of period
773 
675 
Allowance for Doubtful Accounts Receivable [Roll Forward]
 
 
Balance at beginning of period
17 
453 
Bad debt expense
110 
(38)
Write-offs
(5)
(236)
Other adjustments
 
Balance at end of period
114 
179 
Liquidated Damages
 
 
Liquidated damages
$ 0 
 
Minimum
 
 
Warranty Liability
 
 
Term of warranty
1 year 
 
Maximum
 
 
Warranty Liability
 
 
Term of warranty
5 years 
 
COMMITMENTS AND CONTINGENCIES (Details 2) (Total Company Employees, Coverage under collective bargaining agreements)
12 Months Ended
Dec. 31, 2013
agreement
Total Company Employees |
Coverage under collective bargaining agreements
 
Collective bargaining agreements
 
Percentage of company's employees covered
18.00% 
Number of agreements
COMMITMENTS AND CONTINGENCIES (Details 3) (USD $)
In Thousands, unless otherwise specified
9 Months Ended
Sep. 30, 2014
Dec. 31, 2013
Sep. 30, 2014
New Markets Tax Credit Transaction
Jul. 20, 2011
New Markets Tax Credit Transaction
Broadwind Services, LLC
New Markets Tax Credit program
 
 
 
 
Gross loan from AMCREF to Broadwind Services
 
 
 
$ 10,000 
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 
 
Amount of tax credits for which the Company may be liable
 
 
3,900 
 
Workers' Compensation Reserves
 
 
 
 
Amount accrued for self-insured workers' compensation claims
$ 1,048 
$ 803 
 
 
NEW MARKETS TAX CREDIT TRANSACTION (Details) (USD $)
In Thousands, unless otherwise specified
0 Months Ended 9 Months Ended 9 Months Ended
Sep. 30, 2014
Dec. 31, 2013
Jul. 20, 2011
New Markets Tax Credit Transaction
Sep. 30, 2014
New Markets Tax Credit Transaction
item
Jul. 20, 2011
New Markets Tax Credit Transaction
Sep. 30, 2014
Broadwind Services, LLC
New Markets Tax Credit Transaction
Jul. 20, 2011
Broadwind Services, LLC
New Markets Tax Credit Transaction
New Markets Tax Credit Transaction
 
 
 
 
 
 
 
Proceeds from transaction
 
 
$ 2,280 
 
 
 
 
Principal amount
 
 
 
 
 
 
10,000 
Debt term
 
 
 
 
 
15 years 
 
Interest rate (as a percent)
 
 
 
 
 
1.40% 
 
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
 
 
 
 
 
 
Issue costs paid to third parties recorded as prepaid expenses
 
 
 
 
262 
 
 
Amortization period for prepaid expenses for the NMTC arrangement
 
 
 
7 years 
 
 
 
Net amount outstanding
$ 2,608 
$ 2,755 
 
$ 2,600 
 
 
 
RESTRUCTURING (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 9 Months Ended 12 Months Ended 45 Months Ended 3 Months Ended 9 Months Ended 12 Months Ended 45 Months Ended 3 Months Ended 9 Months Ended 12 Months Ended 45 Months Ended 9 Months Ended 12 Months Ended 45 Months Ended 9 Months Ended 12 Months Ended 45 Months Ended 12 Months Ended 45 Months Ended 12 Months Ended 45 Months Ended 12 Months Ended 45 Months Ended 3 Months Ended 12 Months Ended 45 Months Ended 3 Months Ended 9 Months Ended 12 Months Ended 45 Months Ended 9 Months Ended 12 Months Ended 45 Months Ended 3 Months Ended 9 Months Ended 12 Months Ended 45 Months Ended 9 Months Ended 12 Months Ended 45 Months Ended 9 Months Ended 12 Months Ended 45 Months Ended 3 Months Ended 9 Months Ended 12 Months Ended 45 Months Ended 3 Months Ended 9 Months Ended 12 Months Ended 45 Months Ended 9 Months Ended 12 Months Ended 45 Months Ended 3 Months Ended 9 Months Ended 12 Months Ended 45 Months Ended 3 Months Ended 9 Months Ended 12 Months Ended 45 Months Ended 3 Months Ended 9 Months Ended 12 Months Ended 45 Months Ended 9 Months Ended 12 Months Ended 45 Months Ended 9 Months Ended 12 Months Ended 45 Months Ended 3 Months Ended 9 Months Ended
Sep. 30, 2014
Jun. 30, 2014
Mar. 31, 2014
Sep. 30, 2014
sqft
Sep. 30, 2013
Dec. 31, 2013
Dec. 31, 2012
Dec. 31, 2011
Sep. 30, 2014
Sep. 30, 2014
Capital expenditures
Jun. 30, 2014
Capital expenditures
Mar. 31, 2014
Capital expenditures
Sep. 30, 2014
Capital expenditures
Dec. 31, 2013
Capital expenditures
Dec. 31, 2012
Capital expenditures
Dec. 31, 2011
Capital expenditures
Sep. 30, 2014
Capital expenditures
Sep. 30, 2014
Capital expenditures
Gearing
Jun. 30, 2014
Capital expenditures
Gearing
Mar. 31, 2014
Capital expenditures
Gearing
Sep. 30, 2014
Capital expenditures
Gearing
Dec. 31, 2013
Capital expenditures
Gearing
Dec. 31, 2012
Capital expenditures
Gearing
Dec. 31, 2011
Capital expenditures
Gearing
Sep. 30, 2014
Capital expenditures
Gearing
Sep. 30, 2014
Capital expenditures
Corporate
Dec. 31, 2013
Capital expenditures
Corporate
Dec. 31, 2012
Capital expenditures
Corporate
Sep. 30, 2014
Capital expenditures
Corporate
Sep. 30, 2014
Gain on Sale of Brandon Facility
Dec. 31, 2013
Gain on Sale of Brandon Facility
Sep. 30, 2014
Gain on Sale of Brandon Facility
Dec. 31, 2013
Accelerated Depreciation
Dec. 31, 2012
Accelerated Depreciation
Sep. 30, 2014
Accelerated Depreciation
Dec. 31, 2013
Severance
Dec. 31, 2011
Severance
Sep. 30, 2014
Severance
Dec. 31, 2013
Impairment Charges
Sep. 30, 2014
Impairment Charges
Sep. 30, 2014
Moving and other exit-related costs
Jun. 30, 2014
Moving and other exit-related costs
Mar. 31, 2014
Moving and other exit-related costs
Dec. 31, 2013
Moving and other exit-related costs
Dec. 31, 2012
Moving and other exit-related costs
Dec. 31, 2011
Moving and other exit-related costs
Sep. 30, 2014
Moving and other exit-related costs
Sep. 30, 2014
Non Cash Expense:
Mar. 31, 2014
Non Cash Expense:
Sep. 30, 2014
Non Cash Expense:
Dec. 31, 2013
Non Cash Expense:
Dec. 31, 2012
Non Cash Expense:
Dec. 31, 2011
Non Cash Expense:
Sep. 30, 2014
Non Cash Expense:
Sep. 30, 2014
Non Cash Expense:
Towers and Weldments Segment
Dec. 31, 2013
Non Cash Expense:
Towers and Weldments Segment
Sep. 30, 2014
Non Cash Expense:
Towers and Weldments Segment
Sep. 30, 2014
Non Cash Expense:
Gearing
Sep. 30, 2014
Non Cash Expense:
Gearing
Dec. 31, 2013
Non Cash Expense:
Gearing
Dec. 31, 2012
Non Cash Expense:
Gearing
Dec. 31, 2011
Non Cash Expense:
Gearing
Sep. 30, 2014
Non Cash Expense:
Gearing
Sep. 30, 2014
Non Cash Expense:
Services
Dec. 31, 2013
Non Cash Expense:
Services
Dec. 31, 2012
Non Cash Expense:
Services
Sep. 30, 2014
Non Cash Expense:
Services
Sep. 30, 2014
Non Cash Expense:
Corporate
Dec. 31, 2011
Non Cash Expense:
Corporate
Sep. 30, 2014
Non Cash Expense:
Corporate
Sep. 30, 2014
Cost of sales
Cash Expense:
Jun. 30, 2014
Cost of sales
Cash Expense:
Mar. 31, 2014
Cost of sales
Cash Expense:
Sep. 30, 2014
Cost of sales
Cash Expense:
Dec. 31, 2013
Cost of sales
Cash Expense:
Dec. 31, 2012
Cost of sales
Cash Expense:
Dec. 31, 2011
Cost of sales
Cash Expense:
Sep. 30, 2014
Cost of sales
Cash Expense:
Sep. 30, 2014
Cost of sales
Cash Expense:
Gearing
Jun. 30, 2014
Cost of sales
Cash Expense:
Gearing
Mar. 31, 2014
Cost of sales
Cash Expense:
Gearing
Sep. 30, 2014
Cost of sales
Cash Expense:
Gearing
Dec. 31, 2013
Cost of sales
Cash Expense:
Gearing
Dec. 31, 2012
Cost of sales
Cash Expense:
Gearing
Dec. 31, 2011
Cost of sales
Cash Expense:
Gearing
Sep. 30, 2014
Cost of sales
Cash Expense:
Gearing
Sep. 30, 2014
Cost of sales
Cash Expense:
Services
Dec. 31, 2013
Cost of sales
Cash Expense:
Services
Dec. 31, 2012
Cost of sales
Cash Expense:
Services
Sep. 30, 2014
Cost of sales
Cash Expense:
Services
Sep. 30, 2014
Selling, general and administrative
Cash Expense:
Jun. 30, 2014
Selling, general and administrative
Cash Expense:
Mar. 31, 2014
Selling, general and administrative
Cash Expense:
Sep. 30, 2014
Selling, general and administrative
Cash Expense:
Dec. 31, 2013
Selling, general and administrative
Cash Expense:
Dec. 31, 2012
Selling, general and administrative
Cash Expense:
Dec. 31, 2011
Selling, general and administrative
Cash Expense:
Sep. 30, 2014
Selling, general and administrative
Cash Expense:
Sep. 30, 2014
Selling, general and administrative
Cash Expense:
Towers and Weldments Segment
Jun. 30, 2014
Selling, general and administrative
Cash Expense:
Towers and Weldments Segment
Mar. 31, 2014
Selling, general and administrative
Cash Expense:
Towers and Weldments Segment
Sep. 30, 2014
Selling, general and administrative
Cash Expense:
Towers and Weldments Segment
Dec. 31, 2013
Selling, general and administrative
Cash Expense:
Towers and Weldments Segment
Dec. 31, 2012
Selling, general and administrative
Cash Expense:
Towers and Weldments Segment
Sep. 30, 2014
Selling, general and administrative
Cash Expense:
Towers and Weldments Segment
Sep. 30, 2014
Selling, general and administrative
Cash Expense:
Gearing
Jun. 30, 2014
Selling, general and administrative
Cash Expense:
Gearing
Mar. 31, 2014
Selling, general and administrative
Cash Expense:
Gearing
Sep. 30, 2014
Selling, general and administrative
Cash Expense:
Gearing
Dec. 31, 2013
Selling, general and administrative
Cash Expense:
Gearing
Dec. 31, 2012
Selling, general and administrative
Cash Expense:
Gearing
Dec. 31, 2011
Selling, general and administrative
Cash Expense:
Gearing
Sep. 30, 2014
Selling, general and administrative
Cash Expense:
Gearing
Sep. 30, 2014
Selling, general and administrative
Cash Expense:
Services
Dec. 31, 2012
Selling, general and administrative
Cash Expense:
Services
Sep. 30, 2014
Selling, general and administrative
Cash Expense:
Services
Sep. 30, 2014
Selling, general and administrative
Cash Expense:
Corporate
Dec. 31, 2013
Selling, general and administrative
Cash Expense:
Corporate
Dec. 31, 2012
Selling, general and administrative
Cash Expense:
Corporate
Dec. 31, 2011
Selling, general and administrative
Cash Expense:
Corporate
Sep. 30, 2014
Selling, general and administrative
Cash Expense:
Corporate
Dec. 31, 2013
Cicero Avenue
Cost of sales
Expenses
Sep. 30, 2014
Brandon Facility
sqft
item
RESTRUCTURING
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Restructuring charges incurred
$ 285 
$ 664 
$ 770 
$ 13,200 
 
$ 5,550 
$ 5,092 
$ 874 
$ 13,235 
$ 127 
$ 96 
$ 441 
 
$ 2,352 
$ 2,596 
$ 5 
$ 5,617 
$ 127 
$ 96 
$ 441 
 
$ 2,075 
$ 2,072 
$ 5 
$ 4,816 
 
$ 277 
$ 524 
$ 801 
 
$ (3,585)
$ (3,585)
$ 898 
$ 819 
$ 1,717 
$ 435 
$ 430 
$ 865 
$ 2,365 
$ 2,365 
$ 158 
$ 568 
$ 329 
$ 3,085 
$ 1,677 
$ 439 
$ 6,256 
$ (119)
$ 0 
 
$ 3,284 
$ 1,224 
$ 297 
$ 4,686 
 
$ 291 
$ 291 
$ (119)
 
$ 3,008 
$ 1,166 
$ 247 
$ 4,302 
 
$ (15)
$ 58 
$ 43 
 
$ 50 
$ 50 
$ 164 
$ 519 
$ 269 
 
$ 2,410 
$ 533 
$ 131 
$ 4,026 
$ 164 
$ 519 
$ 269 
 
$ 2,176 
$ 308 
$ 131 
$ 3,567 
 
$ 234 
$ 225 
$ 459 
$ 113 
$ 49 
$ 60 
 
$ 1,089 
$ 739 
$ 441 
$ 2,491 
$ 15 
$ 7 
$ 18 
 
$ 176 
$ 130 
$ 346 
$ 98 
$ 42 
$ 42 
 
$ 451 
$ 520 
$ 35 
$ 1,188 
 
$ 40 
$ 40 
 
$ 462 
$ 49 
$ 406 
$ 917 
 
 
Percentage of facility footprint planned to be reduced through the sale and/or closure
 
 
 
40.00% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Area of facilities planned to be reduced through the sale and/or closure (in square feet)
 
 
 
600,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Number of facilities for which agreement has been reached to close or reduce leased presence
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Area of facilities for which agreement has been reached to close or reduce leased presence
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
400,000 
Impairment charges
 
 
 
 
288 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
1,732 
 
Liability associated with environmental remediation costs
500 
 
 
500 
 
 
 
 
500 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Expected cost to be incurred to implement the restructuring plan
 
 
 
13,600 
 
 
 
 
 
 
 
 
5,668 
 
 
 
 
 
 
 
4,867 
 
 
 
 
801 
 
 
 
(3,585)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
4,686 
 
 
 
 
291 
 
 
 
4,302 
 
 
 
 
43 
 
 
 
50 
 
 
 
 
 
4,294 
 
 
 
 
 
 
 
3,835 
 
 
 
 
459 
 
 
 
 
 
 
2,491 
 
 
 
 
 
 
 
346 
 
 
 
 
 
 
1,188 
 
 
 
 
40 
 
 
917 
 
 
 
 
 
 
Restructuring charges incurred (as a percent)
 
 
 
 
 
 
 
 
98.00% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Severance Costs
 
 
 
 
 
 
 
 
900 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Accelerated depreciation of the Cicero Avenue Facility
 
 
 
 
 
 
 
 
$ 1,750 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
SUBSEQUENT EVENT (Details) (Subsequent event)
0 Months Ended
Oct. 29, 2014
Subsequent event
 
SUBSEQUENT EVENT
 
Number of shares authorized to be repurchased
10,000 
Stock repurchase program period
6 months