UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
| | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended
OR
| | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from to
Commission file number
BROADWIND, INC.
(Exact name of registrant as specified in its charter)
| | | |
| (State or other jurisdiction | | (I.R.S. Employer |
(Address of principal executive offices)
(
(Registrant’s telephone number, including area code)
Not applicable
(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
| | | The |
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding twelve months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding twelve months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company”, and “emerging growth company” in Rule 12b-2 of the Exchange Act:
| Large accelerated filer ☐ | | Accelerated filer ☐ |
| | | |
| | | Smaller reporting company |
| Emerging growth company |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period to comply with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes
Number of shares of registrant’s common stock, par value $0.001, outstanding as of November 7, 2025:
BROADWIND, INC. AND SUBSIDIARIES
INDEX
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| Management’s Discussion and Analysis of Financial Condition and Results of Operations |
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BROADWIND, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
(in thousands, except share and per share data)
| September 30, | December 31, | |||||||
| 2025 | 2024 | |||||||
| ASSETS | ||||||||
| CURRENT ASSETS: | ||||||||
| Cash | $ | $ | ||||||
| Accounts receivable, net | ||||||||
| AMP credit receivable | ||||||||
| Contract assets | ||||||||
| Inventories | ||||||||
| Prepaid expenses and other current assets | ||||||||
| Total current assets | ||||||||
| LONG-TERM ASSETS: | ||||||||
| Property and equipment, net | ||||||||
| Operating lease right-of-use assets | ||||||||
| Intangible assets, net | ||||||||
| Other assets | ||||||||
| TOTAL ASSETS | $ | $ | ||||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
| CURRENT LIABILITIES: | ||||||||
| Line of credit and current maturities of long-term debt | $ | $ | ||||||
| Current portion of finance lease obligations | ||||||||
| Current portion of operating lease obligations | ||||||||
| Accounts payable | ||||||||
| Accrued liabilities | ||||||||
| Customer deposits | ||||||||
| Total current liabilities | ||||||||
| LONG-TERM LIABILITIES: | ||||||||
| Long-term debt, net of current maturities | ||||||||
| Long-term finance lease obligations, net of current portion | ||||||||
| Long-term operating lease obligations, net of current portion | ||||||||
| Other | ||||||||
| Total long-term liabilities | ||||||||
| COMMITMENTS AND CONTINGENCIES | ||||||||
| STOCKHOLDERS’ EQUITY: | ||||||||
| Preferred stock, $ par value; shares authorized; shares issued or outstanding | ||||||||
| Common stock, $ par value; shares authorized; and shares issued as of September 30, 2025, and December 31, 2024, respectively | ||||||||
| Treasury stock, at cost, shares as of September 30, 2025 and December 31, 2024 | ( | ) | ( | ) | ||||
| Additional paid-in capital | ||||||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Total stockholders’ equity | ||||||||
| TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ | $ | ||||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
BROADWIND, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
(in thousands, except per share data)
| Three Months Ended September 30, |
Nine Months Ended September 30, |
|||||||||||||||
| 2025 |
2024 |
2025 |
2024 |
|||||||||||||
| Revenues |
$ | $ | $ | $ | ||||||||||||
| Cost of sales |
||||||||||||||||
| Gross profit |
||||||||||||||||
| OPERATING EXPENSES: |
||||||||||||||||
| Selling, general and administrative |
||||||||||||||||
| Gain on sale of Manitowoc industrial fabrication operations |
( |
) | ( |
) | ||||||||||||
| Intangible amortization |
||||||||||||||||
| Total operating expense, net |
( |
) | ||||||||||||||
| Operating income |
||||||||||||||||
| OTHER (EXPENSE) INCOME, net: |
||||||||||||||||
| Interest expense, net |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
| Other, net |
( |
) | ( |
) | ||||||||||||
| Total other expense, net |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
| Net income before provision for income taxes |
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| Provision for income taxes |
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| NET INCOME |
||||||||||||||||
| NET INCOME PER COMMON SHARE—BASIC: |
||||||||||||||||
| Net income |
$ | $ | $ | $ | ||||||||||||
| WEIGHTED AVERAGE COMMON SHARES OUTSTANDING—BASIC |
||||||||||||||||
| NET INCOME PER COMMON SHARE—DILUTED: |
||||||||||||||||
| Net income |
$ | $ | $ | $ | ||||||||||||
| WEIGHTED AVERAGE COMMON SHARES OUTSTANDING—DILUTED |
||||||||||||||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
BROADWIND, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(UNAUDITED)
(in thousands, except share data)
| Common Stock |
Treasury Stock |
Additional |
||||||||||||||||||||||||||
| Shares |
Issued |
Issued |
Paid-in |
Accumulated |
||||||||||||||||||||||||
| Issued |
Amount |
Shares |
Amount |
Capital |
Deficit |
Total |
||||||||||||||||||||||
| BALANCE, December 31, 2023 |
$ | ( |
) | $ | ( |
) | $ | $ | ( |
) | $ | |||||||||||||||||
| Stock issued under defined contribution 401(k) retirement savings plan |
||||||||||||||||||||||||||||
| Share-based compensation |
— | — | ||||||||||||||||||||||||||
| Net income |
— | — | ||||||||||||||||||||||||||
| BALANCE, March 31, 2024 |
$ | ( |
) | $ | ( |
) | $ | $ | ( |
) | $ | |||||||||||||||||
| Stock issued for restricted stock |
— | — | — | — | — | |||||||||||||||||||||||
| Stock issued under defined contribution 401(k) retirement savings plan |
||||||||||||||||||||||||||||
| Share-based compensation |
— | — | ||||||||||||||||||||||||||
| Shares withheld for taxes in connection with issuance of restricted stock |
( |
) | ( |
) | ( |
) | ||||||||||||||||||||||
| Net income |
— | — | ||||||||||||||||||||||||||
| BALANCE, June 30, 2024 |
$ | ( |
) | $ | ( |
) | $ | $ | ( |
) | $ | |||||||||||||||||
| Stock issued under defined contribution 401(k) retirement savings plan |
||||||||||||||||||||||||||||
| Share-based compensation |
— | — | ||||||||||||||||||||||||||
| Net income |
— | — | ||||||||||||||||||||||||||
| BALANCE, September 30, 2024 |
$ | ( |
) | $ | ( |
) | $ | $ | ( |
) | $ | |||||||||||||||||
| BALANCE, December 31, 2024 |
$ | ( |
) | $ | ( |
) | $ | $ | ( |
) | $ | |||||||||||||||||
| Stock issued for restricted stock |
— | — | — | — | — | |||||||||||||||||||||||
| Stock issued under defined contribution 401(k) retirement savings plan |
||||||||||||||||||||||||||||
| Share-based compensation |
— | — | ||||||||||||||||||||||||||
| Shares withheld for taxes in connection with issuance of restricted stock |
( |
) | ( |
) | ( |
) | ||||||||||||||||||||||
| Net loss |
— | — | ( |
) | ( |
) | ||||||||||||||||||||||
| BALANCE, March 31, 2025 |
$ | ( |
) | $ | ( |
) | $ | $ | ( |
) | $ | |||||||||||||||||
| Stock issued for restricted stock |
— | — | — | — | — | |||||||||||||||||||||||
| Stock issued under defined contribution 401(k) retirement savings plan |
||||||||||||||||||||||||||||
| Share-based compensation |
— | — | ||||||||||||||||||||||||||
| Shares withheld for taxes in connection with issuance of restricted stock |
( |
) | ( |
) | ( |
) | ||||||||||||||||||||||
| Net loss |
— | — | ( |
) | ( |
) | ||||||||||||||||||||||
| BALANCE, June 30, 2025 |
$ | ( |
) | $ | ( |
) | $ | $ | ( |
) | $ | |||||||||||||||||
| Stock issued under defined contribution 401(k) retirement savings plan |
||||||||||||||||||||||||||||
| Share-based compensation |
— | — | ||||||||||||||||||||||||||
| Net income |
— | — | ||||||||||||||||||||||||||
| BALANCE, September 30, 2025 |
$ | ( |
) | $ | ( |
) | $ | $ | ( |
) | $ | |||||||||||||||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
BROADWIND, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(in thousands)
| Nine Months Ended September 30, |
||||||||
| 2025 |
2024 |
|||||||
| CASH FLOWS FROM OPERATING ACTIVITIES: |
||||||||
| Net income |
$ | $ | ||||||
| Adjustments to reconcile net cash used in operating activities: |
||||||||
| Depreciation and amortization expense |
||||||||
| Deferred income taxes |
( |
) | ( |
) | ||||
| Stock-based compensation |
||||||||
| Allowance for credit losses |
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| Common stock issued under defined contribution 401(k) plan |
||||||||
| Gain on sale of assets |
( |
) | ( |
) | ||||
| Changes in operating assets and liabilities: |
||||||||
| Accounts receivable |
( |
) | ||||||
| AMP credit receivable |
( |
) | ||||||
| Contract assets |
( |
) | ||||||
| Inventories |
( |
) | ( |
) | ||||
| Prepaid expenses and other current assets |
( |
) | ||||||
| Accounts payable |
( |
) | ||||||
| Accrued liabilities |
( |
) | ( |
) | ||||
| Customer deposits |
( |
) | ( |
) | ||||
| Other non-current assets and liabilities |
( |
) | ||||||
| Net cash used in operating activities |
( |
) | ( |
) | ||||
| CASH FLOWS FROM INVESTING ACTIVITIES: |
||||||||
| Purchases of property and equipment |
( |
) | ( |
) | ||||
| Net proceeds from sale of Manitowoc industrial fabrication operations |
||||||||
| Net proceeds from disposals of property and equipment |
||||||||
| Net cash provided by (used in) investing activities |
( |
) | ||||||
| CASH FLOWS FROM FINANCING ACTIVITIES: |
||||||||
| Proceeds from line of credit, net |
||||||||
| Proceeds from long-term debt |
||||||||
| Payments on long-term debt |
( |
) | ( |
) | ||||
| Payments on finance leases |
( |
) | ( |
) | ||||
| Shares withheld for taxes in connection with issuance of restricted stock |
( |
) | ( |
) | ||||
| Net cash (used in) provided by financing activities |
( |
) | ||||||
| NET (DECREASE) INCREASE IN CASH |
( |
) | ||||||
| CASH beginning of the period |
||||||||
| CASH end of the period |
$ | $ | ||||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
BROADWIND, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
(Dollars are presented in thousands, except share, per share and per employee data or unless otherwise stated)
NOTE 1 — BASIS OF PRESENTATION
The unaudited condensed consolidated financial statements presented herein include the accounts of Broadwind, Inc. (the “Company”) and its wholly-owned subsidiaries Broadwind Heavy Fabrications, Inc. (“Broadwind Heavy Fabrications”), Brad Foote Gear Works, Inc. (“Brad Foote”) and Broadwind Industrial Solutions, LLC (“Broadwind Industrial Solutions”). All intercompany transactions and balances have been eliminated. The 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, 2025 are not necessarily indicative of the results that may be expected for the twelve months ending December 31, 2025, or any other interim period, which may differ materially due to, among other things, the risk factors set forth in our Annual Report on Form 10-K for the year ended December 31, 2024 and in Part II, Item 1A of the Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2025.
The December 31, 2024 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 consolidated financial statements and notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024.
There have been no material changes in the Company’s significant accounting policies during the nine months ended September 30, 2025 as compared to the significant accounting policies described in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024.
Company Description
Through its subsidiaries, the Company is a precision manufacturer of structures, equipment and components for clean technology and other specialized applications. The Company provides technologically advanced high value products to customers with complex systems and stringent quality standards that operate in energy, mining and infrastructure sectors, primarily in the United States of America (the “U.S.”). The Company’s capabilities include, but are not limited to, the following: heavy fabrications, welding, metal rolling, coatings, gear cutting and shaping, gearbox manufacturing and repair, heat treatment, precision machining, assembly, engineering and packaging solutions. The Company’s most significant presence is within the U.S. wind energy industry, which accounted for
Liquidity
The Company typically meets its short term liquidity needs through cash generated from operations, its available cash balances, the 2022 Credit Facility (as defined below), equipment financing, access to the public and private debt and/or equity markets, and has the option to raise capital from the sale of the Company’s securities under the Company’s registration statement on Form S-3 (as discussed below), and proceeds from any sales of Advanced Manufacturing Production tax credits (“AMP credits”) (discussed in Note 6 “AMP Credits” of these condensed consolidated financial statements).
See Note 9, “Debt and Credit Agreements,” of these condensed consolidated financial statements for a description of the 2022 Credit Facility and the Company’s other debt.
Debt and finance lease obligations at September 30, 2025 totaled $
On September 22, 2023, the Company filed a shelf registration statement on Form S-3, which was declared effective by the Securities and Exchange Commission (the “SEC”) on October 12, 2023 (the “Form S-3”), replacing a prior shelf registration statement which expired on October 12, 2023. The Form S-3 will expire on October 12, 2026. This shelf registration statement, which includes a base prospectus, allows the Company to offer any combination of securities described in the prospectus in one or more offerings. Unless otherwise specified in the prospectus supplement accompanying the base prospectus, the Company would use the net proceeds from the sale of any securities offered pursuant to the shelf registration statement for general corporate purposes.
On September 12, 2022, the Company entered into a Sales Agreement (the “Sales Agreement”) with Roth Capital Partners, LLC and HC Wainwright & Co., LLC (collectively, the “Agents”). Pursuant to the terms of the Sales Agreement, the Company may sell from time to time through the Agents shares of the Company’s common stock, par value $
The Company also utilizes supply chain financing arrangements as a component of its funding for working capital, which accelerates receivable collections and helps to better manage cash flow. Under these agreements, the Company has agreed to sell certain of its accounts receivable balances to banking institutions who have agreed to advance amounts equal to the net accounts receivable balances due, less a discount as set forth in the respective agreements. The balances under these agreements are accounted for as sales of accounts receivable, as they are sold without recourse. Cash proceeds from these agreements are reflected as operating activities included in the change in accounts receivable in the Company’s consolidated statements of cash flows. Fees incurred in connection with the agreements are recorded as interest expense by the Company.
During the three and nine months ended September 30, 2025, the Company sold account receivables totaling $
The Company anticipates that current cash resources, amounts available under the 2022 Credit Facility, sales of shares under the Sales Agreement, cash to be generated from operations and equipment financing, access to the public and private debt and/or equity markets, any potential proceeds from the sale of further Company securities under the Form S-3, and proceeds from sales of AMP credits 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 certain of the Company’s large customers, the Company’s ability to finalize the terms of the remaining obligations under a supply agreement with a leading global wind turbine manufacturer, as well as receipt of customer deposits and revenues generated from new customer orders, are materially inconsistent with management’s expectations, the Company may in the future encounter cash flow and liquidity issues, which could have a material adverse impact on the Company.
If the Company’s operational performance deteriorates, the Company may be unable to comply with existing financial covenants, and could lose access to the 2022 Credit Facility. This could limit the Company’s operational flexibility, require a delay in making planned investments and/or require us to seek additional equity or debt financing. Any attempt to raise equity through the public markets could have a negative effect on the Company’s stock price, making an equity raise more difficult or more dilutive. Any additional equity financing or equity-linked financing, if available, will be dilutive to stockholders, and additional debt financing, if available, would likely require new financial covenants or impose other operating and financial restrictions on the Company and could be on less favorable terms than the 2022 Credit Facility. While management believes that the Company will continue to have sufficient cash available to operate its businesses and to meet the Company’s financial obligations and debt covenants, there can be no assurances that the Company’s operations will generate sufficient cash, or that credit facilities or equity or equity-linked financings will be available in an amount sufficient to enable the Company to meet these financial obligations.
Reclassifications
Certain prior year amounts have been reclassified to conform to current year presentation in the condensed consolidated financial statements and the notes to the condensed consolidated financial statements.
Management’s Use of Estimates
The preparation of financial statements in conformity with GAAP requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent liabilities as of the date of the financial statements and reported amounts of revenues and expenses during the reported period. Significant estimates, among others, include inventory reserves, warranty reserves, impairment of long-lived assets, allowance for credit losses, health insurance reserves, and valuation allowances on deferred taxes. Although these estimates are based upon management’s best knowledge of current events and actions that the Company may undertake in the future, actual results could differ from these estimates.
NOTE 2 — REVENUES
Revenues are recognized when the promised goods or services are transferred to customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services.
The following table presents the Company’s revenues disaggregated by revenue source for the three and nine months ended September 30, 2025 and 2024:
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||||
| Heavy Fabrications | $ | $ | $ | $ | ||||||||||||
| Gearing | ||||||||||||||||
| Industrial Solutions | ||||||||||||||||
| Eliminations | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Consolidated | $ | $ | $ | $ | ||||||||||||
Revenue within the Company’s Gearing and Industrial Solutions segments, as well as industrial fabrication product line revenues within the Heavy Fabrications segment, are generally recognized at a point in time, typically when the promised goods or services are physically transferred to its customers in an amount that reflects the consideration it expects to be entitled to in exchange for those goods or services. A performance obligation is a promise in a contract to transfer a distinct product or service to the customer. The Company measures revenue based on the consideration specified in the purchase order and revenue is recognized when the performance obligations are satisfied. If applicable, the transaction price of a contract is allocated to each distinct performance obligation and recognized as revenue when or as the customer receives the benefit of the performance obligation.
For substantially all wind sales within the Company’s Heavy Fabrications segment as well as certain sales within our Gearing segment, products are sold under terms included in bill and hold sales arrangements that result in different timing for revenue recognition. The Company recognizes revenue under these arrangements only when there is a substantive reason for the agreement, the ordered goods are identified separately as belonging to the customer and not available to fill other orders, the goods are currently ready for physical transfer to the customer, and the Company does not have the ability to use the product or to direct it to another customer. Assuming these required revenue recognition criteria are met, revenue is recognized upon completion of product manufacture and customer acceptance. During the three and nine months ended September 30, 2025, the Company recognized $
During the nine months ended September 30, 2025 and 2024, the Company recognized a portion of revenue within the Heavy Fabrications segment over time, as the products had no alternative use to the Company and the Company had an enforceable right to payment, including profit, upon termination of the contracts. Because the projects are labor intensive, the Company uses labor hours as the input measure of progress for the applicable contracts. Within the Heavy Fabrications segment, the Company recognized revenue for contracts that meet over time criteria of $
The Company generally expenses sales commissions when incurred. These costs are recorded within selling, general and administrative expenses. Customer deposits, deferred revenue and other receipts are deferred and recognized when the revenue is realized and earned. Cash payments to customers are classified as reductions of revenue in the Company’s statement of operations.
The Company does not disclose the value of the unsatisfied performance obligations for contracts with an original expected length of one year or less.
NOTE 3 — NET INCOME PER SHARE
The following table presents a reconciliation of basic and diluted income per share for the three and nine months ended September 30, 2025 and 2024, as follows:
| Three Months Ended | Nine Months Ended | |||||||||||||||
| September 30, | September 30, | |||||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||||
| Basic income per share calculation: | ||||||||||||||||
| Net income | $ | $ | $ | $ | ||||||||||||
| Weighted average number of common shares outstanding | ||||||||||||||||
| Basic net income per share | $ | $ | $ | $ | ||||||||||||
| Diluted income per share calculation: | ||||||||||||||||
| Net income | $ | $ | $ | $ | ||||||||||||
| Weighted average number of common shares outstanding | ||||||||||||||||
| Common stock equivalents: | ||||||||||||||||
| Non-vested stock awards (1) | ||||||||||||||||
| Weighted average number of common shares outstanding | ||||||||||||||||
| Diluted net income per share | $ | $ | $ | $ | ||||||||||||
NOTE 4 — SALE OF MANITOWOC INDUSTRIAL FABRICATION OPERATIONS
On June 4, 2025, the Company (the “Seller”) entered into a definitive agreement (the “Manitowoc Purchase Agreement”) with Wisconsin Heavy Fabrication, LLC (the “Buyer”) to sell certain assets used in its industrial fabrication operations in Manitowoc, Wisconsin including specified contracts, equipment, machinery and other personal property, and permits. The sale was completed on September 8, 2025 for a purchase price of $
NOTE 5 — INVENTORIES
The components of inventories as of September 30, 2025 and December 31, 2024 are summarized as follows:
| September 30, | December 31, | |||||||
| 2025 | 2024 | |||||||
| Raw materials | $ | $ | ||||||
| Work-in-process | ||||||||
| Finished goods | ||||||||
| Less: Reserve | ( | ) | ( | ) | ||||
| Net inventories | $ | $ | ||||||
NOTE 6 — AMP CREDITS
During the three and nine months ended September 30, 2025, the Company recognized gross AMP credits totaling $
During the nine months ended September 30, 2025, the Company recognized gross AMP credits totaling $
During the nine months ended September 30, 2024, the Company recognized gross AMP credits totaling $
NOTE 7 — 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 in 2007 as well as the noncompetition agreements, trade names and customer relationships that were part of the Company’s acquisition of Red Wolf Company, LLC completed in 2017. Intangible assets are amortized on a straight-line basis over their estimated useful lives, with a remaining life range from
During the third quarter of 2025, the Company identified a triggering event associated with operating losses within the Gearing segment during the nine months ended September 30, 2025. The Company relied upon an undiscounted cash flow analysis and concluded that
As of September 30, 2025 and December 31, 2024, the cost basis, accumulated amortization and net book value of intangible assets were as follows:
| September 30, 2025 | December 31, 2024 | |||||||||||||||||||||||||||||||||||||||
| Remaining | Remaining | |||||||||||||||||||||||||||||||||||||||
| Weighted | Weighted | |||||||||||||||||||||||||||||||||||||||
| Accumulated | Net | Average | Accumulated | Net | Average | |||||||||||||||||||||||||||||||||||
| Cost | Accumulated | Impairment | Book | Amortization | Accumulated | Impairment | Book | Amortization | ||||||||||||||||||||||||||||||||
| Basis | Amortization | Charges | Value | Period | Cost | Amortization | Charges | Value | Period | |||||||||||||||||||||||||||||||
| Intangible assets: | ||||||||||||||||||||||||||||||||||||||||
| Customer relationships | $ | $ | ( | ) | $ | ( | ) | $ | $ | $ | ( | ) | $ | ( | ) | $ | ||||||||||||||||||||||||
| Trade names | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||
| Intangible assets | $ | $ | ( | ) | $ | ( | ) | $ | $ | $ | ( | ) | $ | ( | ) | $ | ||||||||||||||||||||||||
As of September 30, 2025, estimated future amortization expense was as follows:
| 2025 | $ | |||
| 2026 | ||||
| 2027 | ||||
| Total | $ |
NOTE 8 — ACCRUED LIABILITIES
Accrued liabilities as of September 30, 2025 and December 31, 2024 consisted of the following:
| September 30, | December 31, | |||||||
| 2025 | 2024 | |||||||
| Accrued payroll and benefits | $ | $ | ||||||
| Accrued property taxes | ||||||||
| Income taxes payable | ||||||||
| Accrued professional fees | ||||||||
| Accrued warranty liability | ||||||||
| Self-insured workers compensation reserve | ||||||||
| Accrued sales tax | ||||||||
| Accrued other | ||||||||
| Total accrued liabilities | $ | $ | ||||||
NOTE 9 — DEBT AND CREDIT AGREEMENTS
The Company’s outstanding debt balances as of September 30, 2025 and December 31, 2024 consisted of the following:
| September 30, | December 31, | |||||||
| 2025 | 2024 | |||||||
| Line of credit | $ | $ | ||||||
| Other notes payable | ||||||||
| Long-term debt | ||||||||
| Total debt | ||||||||
| Less: current maturities | ( | ) | ( | ) | ||||
| Long-term debt, net of current maturities | $ | $ | ||||||
Credit Facility
On August 4, 2022, the Company entered into a credit agreement (the “2022 Credit Agreement”) with Wells Fargo Bank, National Association, as lender (“Wells Fargo”), which replaced its prior credit facility and provided the Company and its subsidiaries with a $
On February 8, 2023, the Company executed Amendment No. 1 to Credit Agreement and Limited Waiver which waived the Company’s fourth quarter minimum EBITDA (as defined in the 2022 Credit Agreement) requirement for the period ended December 31, 2022, amended the Fixed Charge Coverage Ratio (as defined in the 2022 Credit Agreement) requirements for the twelve-month period ending January 31, 2024 through and including June 30, 2024 and each twelve-month period thereafter, and amended the minimum EBITDA requirements applicable to the twelve-month periods ending March 31, 2023, June 30, 2023, September 30, 2023, and December 31, 2023.
On December 19, 2024, the Company executed Amendment No. 2 to Credit Agreement, which (1) increased the outstanding principal amount of the term loan to $
On September 22, 2025, the Company executed Amendment No. 3 to Credit Agreement which reduced the monthly principal repayment amount payable by the Company from $
The 2022 Credit Agreement, as amended, contains customary covenants limiting the Company’s and its subsidiaries’ ability to, among other things, incur liens, make investments, incur indebtedness, merge or consolidate with others or dispose of assets, change the nature of its business, and enter into transactions with affiliates. The initial term of the revolving credit facility matures August 4, 2027. The term loan also matures on August 4, 2027, with monthly payments based on an
As of September 30, 2025, there was $
Prior to entering into Amendment No. 3 to Credit Agreement described above, the Company used a portion of the proceeds from the sale of its industrial fabrication operations in Manitowoc, Wisconsin, described in Note 4 “Sale of Manitowoc Industrial Fabrication Operations”, to make a mandatory repayment of $
Other
In addition, the Company had outstanding notes payable for capital expenditures in the amount of $
NOTE 10 — LEASES
The Company leases certain facilities and equipment. The leases are accounted for under Accounting Standard Update 2016-02, Leases (“Topic 842”), and the Company elected to apply each available practical expedient. The discount rates used for the leases are based on an interest rate yield curve developed for the leases in the Company’s lease portfolio.
The Company has elected to apply the short-term lease exception to all leases of one year or less. During the nine months ended September 30, 2025 and 2024, the Company had additional operating leases that resulted in right-of-use assets obtained in exchange for lease obligations in the amount of $
Some of the Company’s facility leases include options to renew. The exercise of the renewal options is typically at the Company’s discretion. The Company regularly evaluates the renewal options and includes them in the lease term when the Company is reasonably certain to exercise them.
As part of the Manitowoc Purchase Agreement described in Note 4 “Sale of Manitowoc Industrial Fabrication Operations”, the Company entered into a lease termination agreement with the landlord of the Manitowoc facility and paid a termination fee of $
As part of the Manitowoc Purchase Agreement, the Buyer entered into a new lease agreement with the landlord for the Manitowoc facility and the Company entered into a sublease with the Buyer. The term of the sublease commenced on June 4, 2025 and expired on September 8, 2025. As the term of the sublease is less than one year, the Company has elected to not record the related operating lease right-of-use assets and operating lease liabilities on the Company’s condensed consolidated balance sheets as of September 30, 2025 and has elected to expense such costs.
Quantitative information regarding the Company’s leases is as follows:
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||||
| Components of lease cost | ||||||||||||||||
| Finance lease cost components: | ||||||||||||||||
| Amortization of finance lease assets | $ | $ | $ | $ | ||||||||||||
| Interest on finance lease liabilities | ||||||||||||||||
| Total finance lease costs | ||||||||||||||||
| Operating lease cost components: | ||||||||||||||||
| Operating lease cost | ||||||||||||||||
| Short-term lease cost | ||||||||||||||||
| Variable lease cost (1) | ||||||||||||||||
| Sublease income | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Total operating lease costs | ||||||||||||||||
| Total lease cost | $ | $ | $ | $ | ||||||||||||
| Supplemental cash flow information related to our operating leases is as follows for the nine months ended September 30, 2025 and 2024: | ||||||||||||||||
| Cash paid for amounts included in the measurement of lease liabilities: | ||||||||||||||||
| Operating cash outflow from operating leases | $ | $ | ||||||||||||||
| Weighted-average remaining lease term-finance leases at end of period (in years) | ||||||||||||||||
| Weighted-average remaining lease term-operating leases at end of period (in years) | ||||||||||||||||
| Weighted-average discount rate-finance leases at end of period | % | % | ||||||||||||||
| Weighted-average discount rate-operating leases at end of period | % | % | ||||||||||||||
| (1) | Variable lease costs consist primarily of taxes, insurance, utilities, and common area or other maintenance costs for the Company’s leased facilities and equipment. |
As of September 30, 2025, future minimum lease payments under finance leases and operating leases were as follows:
| Finance | Operating | |||||||||||
| Leases | Leases | Total | ||||||||||
| 2025 | $ | $ | $ | |||||||||
| 2026 | ||||||||||||
| 2027 | ||||||||||||
| 2028 | ||||||||||||
| 2029 | ||||||||||||
| 2030 and thereafter | ||||||||||||
| Total lease payments | ||||||||||||
| Less—portion representing interest | ( | ) | ( | ) | ( | ) | ||||||
| Present value of lease obligations | ||||||||||||
| Less—current portion of lease obligations | ( | ) | ( | ) | ( | ) | ||||||
| Long-term portion of lease obligations | $ | $ | $ | |||||||||
NOTE 11 — FAIR VALUE MEASUREMENTS
Fair Value of Financial Instruments
The carrying amounts of the Company’s financial instruments, which include 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.
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.
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.
NOTE 12 — 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, 2025, the Company has a full valuation allowance recorded against deferred tax assets. During the nine months ended September 30, 2025, the Company recorded a provision for income taxes of $
The Company files income tax returns in U.S. federal and state jurisdictions. As of September 30, 2025, 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, 2024, the Company had federal and unapportioned state net operating loss (“NOL”) carryforwards of $
Since the Company has no unrecognized tax benefits, they will not have an impact on the condensed consolidated financial statements as a result of the expiration of the applicable statues of limitations within the next twelve months. In addition, 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 Section 382 of the IRC 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 Section 382 of the IRC in 2010, the Company determined that aggregate changes in stock ownership triggered an annual limitation on NOL carryforwards and built-in losses available for utilization, thereby currently limiting annual NOL usage to $
In February 2013, the Company adopted a Stockholder Rights Plan, which was approved by the Company’s stockholders and extended in 2016, 2019, 2022, and 2025 for additional three-year periods (as amended, the “Rights Plan”), designed to preserve the Company’s substantial tax assets associated with NOL carryforwards under Section 382 of the IRC.
The Rights Plan is intended to act as a deterrent to any person or group, together with its affiliates and associates, becoming the beneficial owner of
As of September 30, 2025, the Company had
NOTE 13 — SHARE-BASED COMPENSATION
There was no stock option activity during the nine months ended September 30, 2025 and September 30, 2024 and
The following table summarizes the Company’s restricted stock unit and performance award activity during the nine months ended September 30, 2025:
| Weighted Average | ||||||||
| Number of | Grant-Date Fair Value | |||||||
| Shares | Per Share | |||||||
| Unvested as of December 31, 2024 | $ | |||||||
| Granted | $ | |||||||
| Vested | ( | ) | $ | |||||
| Forfeited | ( | ) | $ | |||||
| Unvested as of September 30, 2025 | $ | |||||||
Under certain situations, shares are withheld from issuance to cover taxes for the vesting of restricted stock units and performance awards. For the nine months ended September 30, 2025 and 2024,
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, 2025 and 2024, as follows:
| Nine Months Ended September 30, | ||||||||
| 2025 | 2024 | |||||||
| Share-based compensation expense: | ||||||||
| Cost of sales | $ | $ | ||||||
| Selling, general and administrative | ||||||||
| Net effect of share-based compensation expense on net income | $ | $ | ||||||
| Reduction in earnings per share: | ||||||||
| Basic earnings per share | $ | $ | ||||||
| Diluted earnings per share | $ | $ | ||||||
NOTE 14 — LEGAL PROCEEDINGS AND OTHER MATTERS
Legal Proceedings
The Company is party to a variety of legal proceedings that arise in the normal course of its business. On an ongoing basis, the Company is often the subject of, or party to, various legal claims by other parties against the Company, by the Company against other parties, or involving the Company, which arise in the normal course of its business. While the results of these legal proceedings or claims cannot be predicted with certainty, management believes that the final outcome of these proceedings or claims will not have a material adverse effect, individually or in the aggregate, on the Company’s results of operations, financial condition or cash flows. Due to the inherent uncertainty of litigation, there can be no assurance that the resolution of any particular claim or proceeding would not have a material adverse effect on the Company’s results of operations, financial condition or cash flows. It is possible that if one or more of such matters were decided against the Company, the effects could be materially adverse to the Company, including to its results of operations in the period in which the Company would be required to record or adjust the related liability and to the Company’s financial condition and cash flows in the periods the Company would be required to pay such liability.
NOTE 15 — RECENT ACCOUNTING PRONOUNCEMENTS
The Company reviews new accounting standards as issued. Although some of the accounting standards issued or effective in the current fiscal year may be applicable to it, the Company believes that none of the new standards have a significant impact on its condensed consolidated financial statements.
In November 2023, the Financial Accounting Standards Board issued Accounting Standards Update No. 2023-07, “Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures”, which requires additional disclosure of significant segment expenses on an annual and interim basis. This guidance will be applied retrospectively and will be effective for the annual periods beginning the year ended December 31, 2024, and for interim periods beginning January 1, 2025. The Company adopted this guidance for the year ended December 31, 2024. Refer to Note 16 “Segment Reporting” of these condensed consolidated financial statements for the additional disclosures applied on a retrospective basis.
In December 2023, the Financial Accounting Standards Board issued Accounting Standards Update No. 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures,” which improves the transparency of income tax disclosures by requiring consistent categories and greater disaggregation of information in the effective tax rate reconciliation and income taxes paid disaggregated by jurisdiction. This guidance will be effective for the annual periods beginning the year ended December 31, 2025. The Company does not expect the adoption of this guidance to have a material impact on the Company’s consolidated financial statements.
In November 2024, the Financial Accounting Standards Board issued Accounting Standards Update No. 2024-03,“Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Incomes Statement Expenses,” which serves to improve the disclosures about a public business entity’s expenses by requiring more detailed information about the types of expenses in commonly presented expense captions. This guidance will be effective for annual periods beginning after December 15, 2026. The Company is currently evaluating the impact that the updated guidance will have on its consolidated financial statements.
NOTE 16— SEGMENT REPORTING
The Company is organized into segments based on the nature of the products offered and business activities from which it earns revenues and incurs expenses for which discrete financial information is available and regularly reviewed by the Company’s chief operating decision maker (“CODM”). The Company’s CODM has been identified as the Chief Executive Officer and President, who reviews operating income by segment in relation to total operating income to make decisions about allocating resources and assessing performance.
The Company’s segments and their product and service offerings are summarized below:
Heavy Fabrications
The Company provides large, complex and precision fabrications to customers in a broad range of industrial markets. 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 capacity utilization, reduce customer concentrations, and reduce exposure to uncertainty related to governmental policies currently impacting the U.S. wind energy industry. Within the U.S. wind energy industry, the Company provides steel towers and repowering adapters primarily to wind turbine manufacturers. 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
Gearing
The Company provides gearing, gearboxes and precision machined components to a broad set of customers in diverse markets including surface and underground mining, wind energy, steel, material handling, infrastructure, onshore and offshore oil and gas fracking and drilling, marine, defense, and other industrial markets. The Company has manufactured loose gearing, gearboxes and systems, and provided heat treat services for aftermarket and OEM applications for a century. The Company uses an integrated manufacturing process, which includes machining and finishing processes in addition to gearbox repair in Cicero, Illinois, and heat treatment and gearbox repair in Neville Island, Pennsylvania.
Industrial Solutions
The Company provides supply chain solutions, light fabrication, inventory management and kitting and assembly services, primarily serving the combined cycle natural gas turbine market. The Company has recently expanded into the U.S. wind power generation market, by providing tower internals kitting solutions for on-site installations, as OEMs domesticate their supply chain due to lead time and reliability issues. The Company leverages a global supply chain to provide instrumentation and controls, valve assemblies, sensor devices, fuel system components, electrical junction boxes and wiring, and electromechanical devices. The Company also provides packaging solutions and fabricates panels and sub-assemblies to reduce customers’ costs and improve manufacturing velocity and reliability.
Corporate
“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.
The accounting policies of the reportable segments are the same as those referenced in Note 1, “Basis of Presentation” of these condensed consolidated financial statements. Summary financial information by reportable segment for the three and nine months ended September 30, 2025 and 2024 is as follows:
| Heavy Fabrications | Gearing | Industrial Solutions | Corporate | Eliminations | Consolidated | |||||||||||||||||||
| For the Three Months Ended September 30, 2025 | ||||||||||||||||||||||||
| Revenues from external customers | $ | $ | $ | $ | $ | $ | ||||||||||||||||||
| Intersegment revenues | ( | ) | — | |||||||||||||||||||||
| Net revenues | ( | ) | ||||||||||||||||||||||
| Direct materials | * | |||||||||||||||||||||||
| Direct labor | * | |||||||||||||||||||||||
| Indirect labor | ||||||||||||||||||||||||
| Variable overhead | * | |||||||||||||||||||||||
| AMP credits | ( | ) | ( | ) | ||||||||||||||||||||
| Salaries and benefits | * | * | * | |||||||||||||||||||||
| Share-based compensation | * | * | * | |||||||||||||||||||||
| Depreciation and amortization | ||||||||||||||||||||||||
| All other (income) expenses (1) | ( | ) | ( | ) | ||||||||||||||||||||
| Operating income (loss) | ( | ) | ( | ) | ||||||||||||||||||||
| Capital expenditures | ||||||||||||||||||||||||
| Heavy Fabrications | Gearing | Industrial Solutions | Corporate | Eliminations | Consolidated | |||||||||||||||||||
| For the Three Months Ended September 30, 2024 | ||||||||||||||||||||||||
| Revenues from external customers | $ | $ | $ | $ | $ | $ | ||||||||||||||||||
| Intersegment revenues | ( | ) | — | |||||||||||||||||||||
| Net revenues | ( | ) | ||||||||||||||||||||||
| Direct materials | * | |||||||||||||||||||||||
| Direct labor | * | |||||||||||||||||||||||
| Indirect labor | ||||||||||||||||||||||||
| Variable overhead | * | |||||||||||||||||||||||
| AMP credits | ( | ) | ( | ) | ||||||||||||||||||||
| Salaries and benefits | * | * | * | |||||||||||||||||||||
| Share-based compensation | * | * | * | |||||||||||||||||||||
| Depreciation and amortization | ||||||||||||||||||||||||
| All other expenses (1) | ( | ) | ||||||||||||||||||||||
| Operating income (loss) | ( | ) | ( | ) | ||||||||||||||||||||
| Capital expenditures | ||||||||||||||||||||||||
| Heavy Fabrications | Gearing | Industrial Solutions | Corporate | Eliminations | Consolidated | |||||||||||||||||||
| For the Nine Months Ended September 30, 2025 | ||||||||||||||||||||||||
| Revenues from external customers | $ | $ | $ | $ | $ | $ | ||||||||||||||||||
| Intersegment revenues | ( | ) | — | |||||||||||||||||||||
| Net revenues | ( | ) | ||||||||||||||||||||||
| Direct materials | * | |||||||||||||||||||||||
| Direct labor | * | |||||||||||||||||||||||
| Indirect labor | ||||||||||||||||||||||||
| Variable overhead | * | |||||||||||||||||||||||
| AMP credits | ( | ) | ( | ) | ||||||||||||||||||||
| Salaries and benefits | * | * | * | |||||||||||||||||||||
| Share-based compensation | * | * | * | |||||||||||||||||||||
| Depreciation and amortization | ||||||||||||||||||||||||
| All other expenses (1) | ( | ) | ||||||||||||||||||||||
| Operating income (loss) | ( | ) | ( | ) | ||||||||||||||||||||
| Capital expenditures | ||||||||||||||||||||||||
| Heavy Fabrications | Gearing | Industrial Solutions | Corporate | Eliminations | Consolidated | |||||||||||||||||||
| For the Nine Months Ended September 30, 2024 | ||||||||||||||||||||||||
| Revenues from external customers | $ | $ | $ | $ | $ | $ | ||||||||||||||||||
| Intersegment revenues | ( | ) | — | |||||||||||||||||||||
| Net revenues | ( | ) | ||||||||||||||||||||||
| Direct materials | * | |||||||||||||||||||||||
| Direct labor | * | |||||||||||||||||||||||
| Indirect labor | ||||||||||||||||||||||||
| Variable overhead | * | |||||||||||||||||||||||
| AMP credits | ( | ) | ( | ) | ||||||||||||||||||||
| Salaries and benefits | * | * | * | |||||||||||||||||||||
| Share-based compensation | * | * | * | |||||||||||||||||||||
| Depreciation and amortization | ||||||||||||||||||||||||
| All other expenses (1) | ( | ) | ||||||||||||||||||||||
| Operating income (loss) | ( | ) | ||||||||||||||||||||||
| Capital expenditures | ||||||||||||||||||||||||
* Line item not deemed a significant expense for this segment (per analysis of Accounting Standards Update No. 2023-07).
(1) All other expenses for each reportable segment primarily consist of:
Heavy Fabrications-variable overhead, salaries and benefits, and rent and utilities
Gearing-salaries and benefits and rent
Industrial Solutions-direct labor, salaries and benefits, and rent and utilities
Corporate-professional expenses
| Total Assets as of | ||||||||
| September 30, | December 31, | |||||||
| Segments: | 2025 | 2024 | ||||||
| Heavy Fabrications | $ | $ | ||||||
| Gearing | ||||||||
| Industrial Solutions | ||||||||
| Corporate | ||||||||
| Eliminations | ( | ) | ( | ) | ||||
| $ | $ | |||||||
NOTE 17 — 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. Certain environmental laws may 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.
Allowance for Credit Losses
Beginning January 1, 2023, the Company assessed and recorded an allowance for credit losses using the current expected credit loss model. The adjustment for credit losses to management’s current estimate is recorded in net income as credit loss expense. All credit losses were on trade receivables and/or contract assets arising from the Company’s contracts with customers.
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, or modifications to its credit standards, collection practices and other related policies may impact the Company’s allowance for credit losses and its financial results. The activity in the accounts receivable allowance liability for the nine months ended September 30, 2025 and 2024 consisted of the following:
| For the Nine Months Ended September 30, | ||||||||
| 2025 | 2024 | |||||||
| Balance at beginning of period | $ | $ | ||||||
| Credit loss expense | ||||||||
| Write-offs | ( | ) | ||||||
| Other adjustments | ( | ) | ||||||
| Balance at end of period | $ | $ | ||||||
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 are 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 at September 30, 2025 and December 31, 2024.
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our condensed consolidated financial statements and related notes thereto in Item 1, “Financial Statements,” of this Quarterly Report and the audited consolidated financial statements and related notes and Management’s Discussion and Analysis of Financial Condition and Results of Operations contained in our Annual Report on Form 10-K for the year ended December 31, 2024. The discussion below contains forward-looking statements that are based upon our current expectations and are subject to uncertainty and changes in circumstances including, but not limited to, those identified in “Cautionary Note Regarding Forward-Looking Statements” at the end of Item 2. Actual results may differ materially from these expectations due to inaccurate assumptions and known or unknown risks and uncertainties. As used in this Quarterly Report on Form 10-Q, the terms “we,” “us,” “our,” and the “Company” refer to Broadwind, Inc., a Delaware corporation headquartered in Cicero, Illinois, and its subsidiaries, as appropriate.
(Dollars are presented in thousands except share, per share and per employee data or unless otherwise stated)
KEY METRICS USED BY MANAGEMENT TO MEASURE PERFORMANCE
In addition to measures of financial performance presented in our consolidated financial statements in accordance with GAAP, we use certain other financial measures to analyze our performance. These non-GAAP financial measures primarily consist of adjusted EBITDA (as defined below) and free cash flow which help us evaluate growth trends, establish budgets, assess operational efficiencies, oversee our overall liquidity, and evaluate our overall financial performance.
Key Financial Measures
| Three Months Ended |
Nine Months Ended |
|||||||||||||||
| September 30, |
September 30, |
|||||||||||||||
| 2025 |
2024 |
2025 |
2024 |
|||||||||||||
| Net revenues |
$ | 44,239 | $ | 35,503 | $ | 120,312 | $ | 109,571 | ||||||||
| Net income |
$ | 7,463 | $ | 74 | $ | 6,104 | $ | 2,066 | ||||||||
| Adjusted EBITDA (1) |
$ | 2,407 | $ | 3,366 | $ | 6,801 | $ | 11,176 | ||||||||
| Capital expenditures |
$ | 470 | $ | 745 | $ | 2,586 | $ | 3,279 | ||||||||
| Free cash flow (2) |
$ | 19,270 | $ | 4,848 | $ | (1,667 | ) | $ | (4,561 | ) | ||||||
| Operating working capital (3) |
$ | 37,691 | $ | 32,025 | $ | 37,691 | $ | 32,025 | ||||||||
| Total debt |
$ | 10,329 | $ | 16,948 | $ | 10,329 | $ | 16,948 | ||||||||
| Total orders (4) |
$ | 43,585 | $ | 22,975 | $ | 92,675 | $ | 70,343 | ||||||||
| Backlog at end of period (4) |
$ | 94,686 | $ | 124,298 | $ | 94,686 | $ | 124,298 | ||||||||
| Book-to-bill (5) |
1.0 | 0.6 | 0.8 | 0.6 | ||||||||||||
| (1) |
We provide non-GAAP adjusted EBITDA (earnings before interest, income taxes, depreciation, amortization, share based compensation and other stock payments, restructuring costs, impairment charges, proxy contest-related expenses, other non-cash gains and losses, and the gain from the sale of the Manitowoc industrial fabrication operations) as supplemental information regarding our business performance. Our management uses adjusted EBITDA when it internally evaluates the performance of our business, reviews financial trends and makes operating and strategic decisions. We believe that this non-GAAP financial measure is useful to investors because it provides a better understanding of our past financial performance and future results, and it allows investors to evaluate our performance using the same methodology and information as used by our management. Our definition of adjusted EBITDA may be different from similar non-GAAP financial measures used by other companies and/or analysts. |
| (2) |
We define free cash flow as adjusted EBITDA plus or minus changes in operating working capital less capital expenditures net of any proceeds from disposals of property and equipment. We believe free cash flow is a useful measure for investors because it portrays our ability to generate cash from our business for purposes such as repaying maturing debt and funding future investments. We have included the net proceeds from the sale of the Manitowoc industrial fabrication operations in free cash flow. |
| (3) |
We define operating working capital as accounts receivable and inventory net of accounts payable and customer deposits. |
| (4) |
Our backlog at September 30, 2025 and 2024 is net of revenue recognized over time. Backlog has been adjusted to reflect updated assumptions related to raw material pricing (which is a customer passthrough) and other variables. Additionally, orders and backlog at September 30, 2025 have been adjusted for orders totaling $3,885 received in prior periods that we do not plan to recognize as revenue as a result of the transaction described in the Manitowoc Purchase Agreement (defined below). |
| (5) |
We define the book-to-bill as the ratio of new orders we received, net of cancellations, to revenue during a period. |
The following table reconciles our non-GAAP key financial measures to the most directly comparable GAAP measure:
| Three Months Ended |
Nine Months Ended |
|||||||||||||||
| September 30, |
September 30, |
|||||||||||||||
| 2025 |
2024 |
2025 |
2024 |
|||||||||||||
| Net income |
$ | 7,463 | $ | 74 | $ | 6,104 | $ | 2,066 | ||||||||
| Interest expense |
1,227 | 1,058 | 2,526 | 2,316 | ||||||||||||
| Income tax provision |
27 | 41 | 96 | 133 | ||||||||||||
| Depreciation and amortization |
1,473 | 1,671 | 4,819 | 4,986 | ||||||||||||
| Share-based compensation and other stock payments |
372 | 522 | 1,469 | 1,685 | ||||||||||||
| Gain on sale of Manitowoc industrial fabrication operations |
(8,155 | ) | — | (8,213 | ) | — | ||||||||||
| Proxy contest-related expenses |
— | — | — | (10 | ) | |||||||||||
| Adjusted EBITDA |
2,407 | 3,366 | 6,801 | 11,176 | ||||||||||||
| Changes in operating working capital |
4,811 | 2,227 | (18,404 | ) | (12,617 | ) | ||||||||||
| Capital expenditures |
(470 | ) | (745 | ) | (2,586 | ) | (3,279 | ) | ||||||||
| Net proceeds from sale of Manitowoc industrial fabrication operations |
12,522 | — | 12,522 | — | ||||||||||||
| Proceeds from disposal of property and equipment |
— | — | — | 159 | ||||||||||||
| Free Cash Flow |
$ | 19,270 | $ | 4,848 | $ | (1,667 | ) | $ | (4,561 | ) | ||||||
OUR BUSINESS
The One Big Beautiful Bill Act (the “OBBBA”), which was signed into law on July 4, 2025, eliminates AMP credits for components produced and sold after December 31, 2027. The OBBBA shortened the time period in which we could benefit from the AMP credits, which could have a material adverse effect on our business in the near term. Under the OBBBA, wind projects that begin construction after July 4, 2026, must be placed in service by December 31, 2027, to qualify for the production tax credit (“PTC”) or the investment tax credit (“ITC”). Any wind project that begins construction after July 4, 2026, and is not placed in service by December 31, 2027, will not qualify for the PTC or the ITC. The PTC and ITC drive demand for new wind projects by providing financial incentives to developers. We expect the changes to the PTC and the ITC could lead to a decrease in the number of new wind projects, which would cause a corresponding decrease in demand for our wind products. Lower demand for our wind products, coupled with the expedited phase out of the AMP credits, would adversely impact the profitability of our Heavy Fabrications segment.
Third Quarter Overview
We received $43,585 in new orders in the third quarter, up from $22,975 in the third quarter of 2024. Gearing segment orders increased by 261% due to improved demand from most markets served, most notably in power generation which reflects significant orders from a leading Original Equipment Manufacturer (“OEM”) of natural gas turbines. Industrial Solutions orders increased by 86% compared to the prior year quarter primarily due to an increase in demand associated with new gas turbine and aftermarket gas turbine projects. Additionally, Heavy Fabrications segment orders increased by 25% due primarily to increased wind tower orders. This increase was partially offset by a decrease in industrial fabrication product line and lower wind repowering orders as we wound down operations in Manitowoc (described below).
We recognized revenue of $44,239 in the third quarter, which was a 25% increase compared to the third quarter of 2024. Within the Heavy Fabrications segment, wind revenue increased 57% as we completed the limited tower production run at our Manitowoc facility we began earlier in the year and recognized increased wind repowering revenue. Industrial Solutions segment revenue increased by 37% from the prior year period primarily due to increased shipments to new gas turbine customers. Gearing segment revenue decreased 23% relative to the prior year period primarily due to reduced shipments to industrial and mining customers.
We recorded net income of $7,463 or $0.32 per share in the third quarter of 2025, compared to net income of $74 or $0.00 per share in the third quarter of 2024. The increase was primarily due to the sale of the Manitowoc industrial fabrication operations as described below, partially offset by manufacturing inefficiencies experienced within the Heavy Fabrications segment.
On June 4, 2025, we entered into a definitive agreement (the “Manitowoc Purchase Agreement”) with Wisconsin Heavy Fabrication, LLC (the “Buyer”) to sell certain assets used in our industrial fabrication operations in Manitowoc, Wisconsin including specified contracts, equipment, machinery and other personal property, and permits. We completed the closing of the sale on September 8, 2025 for a purchase price of $13,500 before the payment of transaction expenses and the assumption by the Buyer of certain of our liabilities. During the three and nine months ended September 30, 2025, we recorded a gain on the sale of $8,155 and $8,213, respectively, which is included in the “Gain on sale of Manitowoc industrial fabrication operations” line item in our condensed consolidated statement of operations. Within the Heavy Fabrications segment, we have only reported orders and backlog which we believe will be recorded as revenue.
RESULTS OF OPERATIONS
Three months ended September 30, 2025, Compared to Three months ended September 30, 2024
The condensed consolidated statement of operations table below should be read in connection with a review of the following discussion of our results of operations for the three months ended September 30, 2025, compared to the three months ended September 30, 2024.
| Three Months Ended September 30, |
2025 vs. 2024 |
|||||||||||||||||||||||
| % of Total |
% of Total |
|||||||||||||||||||||||
| 2025 |
Revenue |
2024 |
Revenue |
$ Change |
% Change |
|||||||||||||||||||
| Revenues |
$ | 44,239 | 100.0 | % | $ | 35,503 | 100.0 | % | $ | 8,736 | 24.6 | % | ||||||||||||
| Cost of sales |
39,719 | 89.8 | % | 30,306 | 85.4 | % | 9,413 | 31.1 | % | |||||||||||||||
| Gross profit |
4,520 | 10.2 | % | 5,197 | 14.6 | % | (677 | ) | (13.0 | )% | ||||||||||||||
| Operating (income) expenses |
||||||||||||||||||||||||
| Selling, general and administrative expenses |
3,796 | 8.6 | % | 3,854 | 10.9 | % | (58 | ) | (1.5 | )% | ||||||||||||||
| Gain on sale of Manitowoc industrial fabrication operations |
(8,155 | ) | (18.4 | )% | — | 0.0 | % | (8,155 | ) | (100.0 | )% | |||||||||||||
| Intangible amortization |
165 | 0.4 | % | 165 | 0.5 | % | — | 0.0 | % | |||||||||||||||
| Total operating expense, net |
(4,194 | ) | (9.5 | )% | 4,019 | 11.3 | % | (8,213 | ) | (204.4 | )% | |||||||||||||
| Operating income |
8,714 | 19.7 | % | 1,178 | 3.3 | % | 7,536 | 639.7 | % | |||||||||||||||
| Other (expense) income, net |
||||||||||||||||||||||||
| Interest expense, net |
(1,227 | ) | (2.8 | )% | (1,058 | ) | (3.0 | )% | (169 | ) | (16.0 | )% | ||||||||||||
| Other, net |
3 | 0.0 | % | (5 | ) | (0.0 | )% | 8 | 160.0 | % | ||||||||||||||
| Total other expense, net |
(1,224 | ) | (2.8 | )% | (1,063 | ) | (3.0 | )% | (161 | ) | (15.1 | )% | ||||||||||||
| Net income before provision for income taxes |
7,490 | 16.9 | % | 115 | 0.3 | % | 7,375 | 6413.0 | % | |||||||||||||||
| Provision for income taxes |
27 | 0.1 | % | 41 | 0.1 | % | (14 | ) | (34.1 | )% | ||||||||||||||
| Net income |
$ | 7,463 | 16.9 | % | $ | 74 | 0.2 | % | $ | 7,389 | 9985.1 | % | ||||||||||||
Consolidated
Revenues increased by $8,736 as compared to the prior year period primarily due to a 43% increase in revenue within our Heavy Fabrications segment. Wind revenue increased 57% from the prior year period as we completed the limited tower production run we began earlier in the year at our Manitowoc facility and recognized increased wind repowering revenue. Industrial Solutions segment revenue increased 37% from the prior year period primarily due to higher shipments to new gas turbine customers. Gearing segment revenue decreased 23% relative to the comparable prior year period, primarily reflective of reduced shipments to industrial and mining customers.
Despite the increase in revenue described above, gross profit decreased versus the prior year due primarily to manufacturing inefficiencies experienced within Heavy Fabrications and increased fixed costs to support higher volumes.
We recorded net income of $7,463 during the three months ended September 30, 2025, compared to net income of $74 during the three months ended September 30, 2024. This increase in net income was primarily due to the sale of the Manitowoc industrial fabrication operations, partially offset by the other factors described above.
Heavy Fabrications Segment
| Three Months Ended |
||||||||
| September 30, |
||||||||
| 2025 |
2024 |
|||||||
| Orders |
$ | 13,885 | $ | 11,147 | ||||
| Revenues |
29,364 | 20,600 | ||||||
| Operating income |
10,283 | 2,230 | ||||||
| Operating margin |
35.0 | % | 10.8 | % | ||||
Within our Heavy Fabrications segment, orders increased 25% from the prior year period due to increased wind tower orders. During the third quarter, we resumed recognizing meaningful tower-related orders after receiving releases which fully satisfied the large wind tower purchase agreement announced in the first quarter of 2023. This was partially offset by lower industrial fabrication product line and wind repowering orders as we wound down certain operations in Manitowoc. Segment revenues increased by 43% compared to the prior year period as we completed the limited tower production run at our Manitowoc facility and recognized increased wind repowering revenue.
Heavy Fabrications segment operating income increased by $8,053 as compared to the prior year period. The increase in operating income was primarily a result of the $8,155 gain on the sale of the Manitowoc industrial fabrication operations, partially offset by manufacturing inefficiencies associated with the production of a new, larger size wind tower model.
Gearing Segment
| Three Months Ended |
||||||||
| September 30, |
||||||||
| 2025 |
2024 |
|||||||
| Orders |
$ | 15,877 | $ | 4,396 | ||||
| Revenues |
7,069 | 9,167 | ||||||
| Operating (loss) income |
(552 | ) | (78 | ) | ||||
| Operating margin |
(7.8 | )% | (0.9 | )% | ||||
Gearing segment orders increased by 261% versus the prior year period primarily due to higher demand from customers from most markets served, most notably in power generation which reflects significant orders from a leading OEM of natural gas turbines. Gearing revenues were down 23% relative to the prior year primarily reflective of reduced shipments to mining and industrial customers.
The Gearing segment’s operating loss increased by $474 from the prior year period. This decrease was primarily attributable to lower sales in the current year period.
Industrial Solutions Segment
| Three Months Ended |
||||||||
| September 30, |
||||||||
| 2025 |
2024 |
|||||||
| Orders |
$ | 13,823 | $ | 7,432 | ||||
| Revenues |
7,872 | 5,737 | ||||||
| Operating income |
445 | 462 | ||||||
| Operating margin |
5.7 | % | 8.1 | % | ||||
Industrial Solutions segment orders increased from the prior year period primarily due to an increase in orders associated with new and aftermarket gas turbine projects. Segment revenues increased from the prior year period primarily due to higher shipments to new gas turbine customers. Operating income decreased versus the prior year period primarily as a result of a less profitable mix of product sold and increased subcontracted manufacturing costs.
Corporate and Other
Corporate and Other expenses were flat during the three months ended September 30, 2025 compared to the prior year period.
Nine months ended September 30, 2025, Compared to Nine months ended September 30, 2024
The condensed consolidated statement of operations table below should be read in connection with a review of the following discussion of our results of operations for the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024.
| Nine Months Ended September 30, |
2025 vs. 2024 |
|||||||||||||||||||||||
| % of Total |
% of Total |
|||||||||||||||||||||||
| 2025 |
Revenue |
2024 |
Revenue |
$ Change |
% Change |
|||||||||||||||||||
| Revenues |
$ | 120,312 | 100.0 | % | $ | 109,571 | 100.0 | % | $ | 10,741 | 9.8 | % | ||||||||||||
| Cost of sales |
107,491 | 89.3 | % | 92,171 | 84.1 | % | 15,320 | 16.6 | % | |||||||||||||||
| Gross profit |
12,821 | 10.7 | % | 17,400 | 15.9 | % | (4,579 | ) | (26.3 | )% | ||||||||||||||
| Operating (income) expenses |
||||||||||||||||||||||||
| Selling, general and administrative expenses |
11,805 | 9.8 | % | 12,391 | 11.3 | % | (586 | ) | (4.7 | )% | ||||||||||||||
| Gain on sale of Manitowoc industrial fabrication operations |
(8,213 | ) | (6.8 | )% | — | — | % | (8,213 | ) | (100.0 | )% | |||||||||||||
| Intangible amortization |
496 | 0.4 | % | 496 | 0.5 | % | — | — | % | |||||||||||||||
| Total operating expense, net |
4,088 | 3.4 | % | 12,887 | 11.8 | % | (8,799 | ) | (68.3 | )% | ||||||||||||||
| Operating income |
8,733 | 7.3 | % | 4,513 | 4.1 | % | 4,220 | 93.5 | % | |||||||||||||||
| Other expense, net |
||||||||||||||||||||||||
| Interest expense, net |
(2,526 | ) | (2.1 | )% | (2,316 | ) | (2.1 | )% | (210 | ) | (9.1 | )% | ||||||||||||
| Other, net |
(7 | ) | (0.0 | )% | 2 | 0.0 | % | (9 | ) | (450.0 | )% | |||||||||||||
| Total other expense, net |
(2,533 | ) | (2.1 | )% | (2,314 | ) | (2.1 | )% | (219 | ) | (9.5 | )% | ||||||||||||
| Net income before provision for income taxes |
6,200 | 5.2 | % | 2,199 | 2.0 | % | 4,001 | 181.9 | % | |||||||||||||||
| Provision for income taxes |
96 | 0.1 | % | 133 | 0.1 | % | (37 | ) | (27.8 | )% | ||||||||||||||
| Net income |
$ | 6,104 | 5.1 | % | $ | 2,066 | 1.9 | % | $ | 4,038 | 195.5 | % | ||||||||||||
Consolidated
Revenues for the nine months ending September 30, 2025, increased by $10,741 as compared to the prior year period primarily due to an increase in revenue within our Heavy Fabrications segment. Wind revenue increased 46% from the prior year period primarily due to restarting tower production with a limited run at our Manitowoc facility and increased wind repowering revenue. Partially offsetting this increase were decreased industrial fabrication product line revenues as we wound down our Manitowoc operations in the third quarter, and lower sales of our Pressure Reducing Systems (“PRS”) units. Industrial Solutions segment revenue increased 3% from the prior year period primarily due to higher shipments to new gas turbine customers, partially offset by reduced shipments to aftermarket gas turbine customers. Gearing segment revenue decreased 27% compared to the prior year period, primarily reflective of reduced shipments to oil and gas (“O&G”) customers.
Despite the increase in revenue described above, gross profit decreased versus the prior year period due primarily to manufacturing inefficiencies experienced within Heavy Fabrications and increased fixed costs to support higher volumes.
We recorded net income of $6,104 during the nine months ended September 30, 2025, compared to net income of $2,066 during the nine months ended September 30, 2024. This increase in net income was primarily due to the $8,213 gain on the sale of the Manitowoc industrial fabrication operations.
Heavy Fabrications Segment
| Nine Months Ended |
||||||||
| September 30, |
||||||||
| 2025 |
2024 |
|||||||
| Orders |
$ | 24,203 | $ | 31,506 | ||||
| Revenues |
79,600 | 62,228 | ||||||
| Operating income |
14,235 | 5,832 | ||||||
| Operating margin |
17.9 | % | 9.4 | % | ||||
Within our Heavy Fabrications segment, orders decreased 23% from the prior year period primarily due to a 77% decrease in industrial fabrication product line orders, and lower wind repowering orders, as we wound down our Manitowoc operations and experienced lower demand for our PRS units. Partially offsetting this decrease was an increase in wind tower orders as during the third quarter we began to recognize meaningful wind tower orders again after an extended period of production against a long-term customer agreement announced in the first quarter of 2023. Segment revenues increased by 28% compared to the prior year period primarily due to a 46% increase in wind revenue as we restarted tower production with a limited run at our Manitowoc facility and recognized increased wind repowering revenue. This was partially offset by a 16% decrease in industrial fabrication product line revenues as we wound down the Manitowoc operations and had fewer shipments of our PRS units.
Heavy Fabrications segment operating income increased by $8,403 as compared to the prior year period. The increase was primarily a result of the sale of the Manitowoc industrial fabrication operations, higher segment revenue and the corresponding increase in AMP credits recognized, partially offset by manufacturing inefficiencies associated with the production of a new, larger size wind tower model.
Gearing Segment
| Nine Months Ended |
||||||||
| September 30, |
||||||||
| 2025 |
2024 |
|||||||
| Orders |
$ | 30,636 | $ | 19,546 | ||||
| Revenues |
20,320 | 27,958 | ||||||
| Operating (loss) income |
(2,263 | ) | 429 | |||||
| Operating margin |
(11.1 | )% | 1.5 | % | ||||
Gearing segment orders increased 57% from the prior year period primarily due to significant orders from a leading OEM in the natural gas turbine segment of the power generation end-market. Additionally, O&G orders increased from the prior year period. Gearing revenue was down 27% relative to the prior year period reflective of reduced shipments to O&G customers.
The Gearing segment’s operating income decreased by $2,692 from the prior year period. This decrease was primarily attributable to lower sales, partially offset by a favorable $482 property tax adjustment in the current year period.
Industrial Solutions Segment
| Nine Months Ended |
||||||||
| September 30, |
||||||||
| 2025 |
2024 |
|||||||
| Orders |
$ | 37,836 | $ | 19,291 | ||||
| Revenues |
20,882 | 20,193 | ||||||
| Operating income |
1,261 | 2,852 | ||||||
| Operating margin |
6.0 | % | 14.1 | % | ||||
Industrial Solutions segment orders increased from the prior year period primarily due to an increase in orders associated with new and aftermarket gas turbine projects. Segment revenues increased from the prior year period primarily due to increased shipments to new gas turbine customers, partially offset by decreased shipments to aftermarket gas turbine customers. Operating income decreased versus the prior year period primarily as a result of a less profitable mix of products sold and increased fixed costs to support higher production levels.
Corporate and Other
Corporate and Other expenses decreased compared to the prior year period primarily due to lower employee compensation, partially offset by higher medical costs in the current year period.
LIQUIDITY, FINANCIAL POSITION AND CAPITAL RESOURCES
On August 4, 2022, we entered into a credit agreement (the “2022 Credit Agreement”) with Wells Fargo Bank, National Association, as lender (“Wells Fargo”), providing the Company and its subsidiaries with a $35,000 senior secured revolving credit facility (which may be further increased by up to an additional $10,000 upon the request of the Company and at the sole discretion of Wells Fargo) and a $7,578 senior secured term loan (collectively, the “2022 Credit Facility”). The proceeds of the 2022 Credit Facility are available for general corporate purposes, including strategic growth opportunities. As of September 30, 2025, cash totaled $1,195, a decrease of $6,526 from December 31, 2024. Debt and finance lease obligations at September 30, 2025 totaled $15,273. As of September 30, 2025, we had $8,988 outstanding under the 2022 Credit Facility and had the ability to borrow up to an additional $25,583.
In addition to the 2022 Credit Facility, we also utilize supply chain financing arrangements as a component of our funding for working capital, which accelerates receivable collections and helps to better manage cash flow. Under these agreements, we have agreed to sell certain of our accounts receivable balances to banking institutions who have agreed to advance amounts equal to the net accounts receivable balances due, less a discount as set forth in the respective agreements. The balances under these agreements are accounted for as sales of accounts receivable, as they are sold without recourse. Cash proceeds from these agreements are reflected as operating activities included in the change in accounts receivable in the consolidated statements of cash flows. Fees incurred in connection with the agreements are recorded as interest expense.
We also have outstanding notes payable for capital expenditures in the amount of $1,341 and $1,618 as of September 30, 2025 and December 31, 2024, respectively, with $389 and $371 included in the “Line of Credit and current maturities of long-term debt” line item of our condensed consolidated financial statements as of September 30, 2025 and December 31, 2024, respectively. The notes payable have monthly payments that range from $1 to $20 and an interest rate of approximately 7%. The equipment purchased is utilized as collateral for the notes payable. The outstanding notes payable have maturity dates that range from September 2028 to June 2029.
On September 22, 2023, we filed a shelf registration statement on Form S-3, which was declared effective by the Securities and Exchange Commission (the “SEC”) on October 12, 2023 (the “Form S-3”), replacing a prior shelf registration statement which expired on October 12, 2023. The Form S-3 will expire on October 12, 2026. This shelf registration statement, which includes a base prospectus, allows us to offer any combination of securities described in the prospectus in one or more offerings. Unless otherwise specified in the prospectus supplement accompanying the base prospectus, we would use the net proceeds from the sale of any securities offered pursuant to the shelf registration statement for general corporate purposes.
On September 12, 2022, we entered into a Sales Agreement (the “Sales Agreement”) with Roth Capital Partners, LLC and HC Wainwright & Co., LLC (collectively, the “Agents”). Pursuant to the terms of the Sales Agreement, we may sell from time to time through the Agents shares of our common stock with an aggregate sales price of up to $12,000. We will pay a commission to the Agents of 2.75% of the gross proceeds of the sale of the shares sold under the Sales Agreement and reimburse the Agents for the expenses incident to the performance of their obligations under the Sales Agreement. No shares of the Company’s common stock were issued under the Sales Agreement during the year ended December 31, 2024 or nine months ended September 30, 2025. As of September 30, 2025, shares of our common stock having a value of approximately $11,667 remained available for issuance under the Sales Agreement. Any additional shares offered and sold under the Sales Agreement are to be issued pursuant to the Form S-3 and a 424(b) prospectus supplement.
We anticipate that current cash resources, amounts available under the 2022 Credit Facility, cash to be generated from operations and equipment financing, potential proceeds from the sale of securities under the Sales Agreement, access to the public or private debt and/or equity markets including any potential proceeds from the sale of further securities under the Form S-3, and proceeds from sales of AMP credits will be adequate to meet our liquidity needs for at least the next twelve months.
If assumptions regarding our production, sales and subsequent collections from certain of our large customers, our ability to finalize the terms of the remaining obligations under a supply agreement with a leading global wind turbine manufacturer, as well as receipt of customer deposits and revenues generated from new customer orders, are materially inconsistent with management’s expectations, we may in the future encounter cash flow and liquidity issues.
If our operational performance deteriorates, we may be unable to comply with existing financial covenants, and could lose access to the 2022 Credit Facility. This could limit our operational flexibility, require a delay in making planned investments and/or require us to seek additional equity or debt financing. Any attempt to raise equity through the public markets could have a negative effect on our stock price, making an equity raise more difficult or more dilutive. Any additional equity financing or equity-linked financing, if available, will be dilutive to stockholders, and additional debt financing, if available, would likely require new financial covenants or impose other operating and financial restrictions on the Company and could be on less favorable terms than the 2022 Credit Facility. While we believe that we will continue to have sufficient cash available to operate our businesses and to meet our financial obligations and debt covenants for the next twelve months, there can be no assurances that our operations will generate sufficient cash, or that credit facilities or equity or equity-linked financings will be available in an amount sufficient to enable us to meet these financial obligations.
Sources and Uses of Cash
The following table summarizes our cash flows from operating, investing, and financing activities for the nine months ended September 30, 2025 and 2024:
| Nine Months Ended |
||||||||
| September 30, |
||||||||
| 2025 |
2024 |
|||||||
| Total cash (used in) provided by: |
||||||||
| Operating activities |
$ | (16,242 | ) | $ | (986 | ) | ||
| Investing activities |
9,936 | (3,120 | ) | |||||
| Financing activities |
(220 | ) | 4,391 | |||||
| Net (decrease) increase in cash |
$ | (6,526 | ) | $ | 285 | |||
Operating Cash Flows
During the nine months ended September 30, 2025, net cash used in operating activities totaled $16,242 compared to net cash used in operating activities of $986 during the prior year period. The increase in net cash used in operating activities during the current year period was primarily attributable to a more significant increase in inventory, decreased proceeds from the sale of AMP credits, and an increase in cash used to fund accounts receivable in the current year period compared to a source of cash in the prior year period.
Investing Cash Flows
During the nine months ended September 30, 2025, net cash provided by investing activities totaled $9,936, compared to net cash used in investing activities of $3,120 during the prior year period. The increase in net cash provided by investing activities as compared to the prior year period was primarily due to the net proceeds received from the sale of the Manitowoc industrial fabrication operations.
Financing Cash Flows
During the nine months ended September 30, 2025, net cash used in financing activities totaled $220, compared to net cash provided by financing activities of $4,391 during the prior year period. The decrease was primarily due to decreased net borrowings under the 2022 Credit Facility in the current year period and proceeds from long-term debt received in the prior year period.
CRITICAL ACCOUNTING ESTIMATES
There have been no material changes in our critical accounting estimates during the nine months ended September 30, 2025 as compared to the critical accounting estimates described in our Annual Report on Form 10-K for the year ended December 31, 2024.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
The preceding discussion and analysis should be read in conjunction with our condensed consolidated financial statements and related notes included in Item 1 of Part I of this Quarterly Report on Form 10-Q and the audited consolidated financial statements and related notes and Management’s Discussion and Analysis of Financial Condition and Results of Operations contained in our Annual Report on Form 10-K for the year ended December 31, 2024. Portions of this Quarterly Report on Form 10-Q, including the discussion and analysis in this Part I, Item 2, contain “forward looking statements”, as defined in Section 21E of the Securities Exchange Act of 1934, as amended, (the “Exchange Act”), that reflect our current expectations regarding our future growth, results of operations, financial condition, cash flows, performance, business prospects and opportunities, as well as assumptions made by, and information currently available to, our management. We have tried to identify forward looking statements by using words such as “anticipate,” “believe,” “expect,” “intend,” “will,” “should,” “may,” “plan” and similar expressions, but these words are not the exclusive means of identifying forward looking statements. Forward-looking statements include any statement that does not directly relate to a current or historical fact. Our forward-looking statements may include or relate to our beliefs, expectations, plans and/or assumptions with respect to the following: (i) the impact of global health concerns on the economies and financial markets and the demand for our products; (ii) state, local and federal regulatory frameworks affecting the industries in which we compete, including the wind energy industry, and the related phase out, extension, continuation or renewal of federal tax incentives and grants, including the advanced manufacturing tax credits, and state renewable portfolio standards as well as new or continuing tariffs on steel or other products imported into the United States; (iii) our customer relationships and our substantial dependency on a few significant customers and our efforts to diversify our customer base and sector focus and leverage relationships across business units; (iv) our ability to operate our business efficiently, comply with our debt obligations, manage capital expenditures and costs effectively, and generate cash flow; (v) the economic and operational stability of our significant customers and suppliers, including their respective supply chains, and the ability to source alternative suppliers as necessary; (vi) our ability to continue to grow our business organically and through acquisitions; (vii) the production, sales, collections, customer deposits and revenues generated by new customer orders and our ability to realize the resulting cash flows; (viii) information technology failures, network disruptions, cybersecurity attacks or breaches in data security; (ix) the sufficiency of our liquidity and alternate sources of funding, if necessary; (x) our ability to realize revenue from customer orders and backlog (including our ability to finalize the terms of the remaining obligations under a supply agreement with a leading global wind turbine manufacturer); (xi) the economy and the potential impact it may have on our business, including our customers; (xii) the state of the wind energy market and other energy and industrial markets generally, including the availability of tax credits, and the impact of competition and economic volatility in those markets; (xiii) the effects of market disruptions and regular market volatility, including fluctuations in the price of oil, gas and other commodities; (xiv) competition from new or existing industry participants including, in particular, increased competition from foreign tower manufacturers; (xv) the effects of the change of administrations in the U.S. federal government; (xvi) our ability to successfully integrate and operate acquired companies and to identify, negotiate and execute future acquisitions; (xvii) the potential loss of tax benefits if we experience an “ownership change” under Section 382 of the Internal Revenue Code of 1986, as amended; (xviii) the effects of proxy contests and actions of activist stockholders; (xix) the limited trading market for our securities and the volatility of market price for our securities; (xx) our outstanding indebtedness and its impact on our business activities (including our ability to incur additional debt in the future); and (xxi) the impact of future sales of our common stock or securities convertible into our common stock on our stock price. These statements are based on information currently available to us and are subject to various risks, uncertainties and other factors that could cause our actual growth, results of operations, financial condition, cash flows, performance, business prospects and opportunities to differ materially from those expressed in, or implied by, these statements including, but not limited to, those set forth under the caption “Risk Factors” in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2024 and in Part II, Item 1A of the Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2025. We are under no duty to update any of these statements. You should not consider any list of such factors to be an exhaustive statement of all of the risks, uncertainties or other factors that could cause our current beliefs, expectations, plans and/or assumptions to change. Accordingly, forward-looking statements should not be relied upon as a predictor of actual results.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
We are a smaller reporting company as defined by Item 10(f)(1) of Regulation S-K under the Securities Act and as such are not required to provide information under this Item pursuant to Item 305I of Regulation S-K.
Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
We seek to maintain disclosure controls and procedures (as defined in Rules 13a-15I and 15d-15I under the Exchange Act) that are designed to ensure that information required to be disclosed in our reports filed under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. This information is also accumulated and communicated to management, including our Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), as appropriate, to allow timely decisions regarding required disclosure. Our management, under the supervision and with the participation of our CEO and CFO, evaluated the effectiveness of the design and operation of our disclosure controls and procedures as of the end of the most recent fiscal quarter reported on herein. Based on that evaluation, our CEO and CFO concluded that our disclosure controls and procedures were effective as of September 30, 2025.
Changes in Internal Control over Financial Reporting
There were no changes in our internal control over financial reporting during the three months ended September 30, 2025 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
| Legal Proceedings |
The information required by this item is incorporated herein by reference to Note 14, “Legal Proceedings And Other Matters” of the condensed consolidated financial statements in Part I, Item 1 of this Quarterly Report on Form 10-Q.
| Risk Factors |
The Risk Factors identified in our Annual Report on Form 10-K for the year ended December 31, 2024 and our Quarterly Report on Form 10-Q for the period ended June 30, 2025 continue to represent the most significant risks to the Company’s future results of operations and financial conditions.
| Unregistered Sales of Equity Securities and Use of Proceeds |
On September 10, 2025, our Board authorized a program to repurchase up to $3,000 of our outstanding common stock. Our share repurchase program does not obligate us 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. We have no obligation to repurchase shares and we may discontinue purchases at any time that we determine additional purchases are not warranted. As of September 30, 2025, $3,000 remains available for repurchase and there were no stock repurchases during the quarter ended September 30, 2025.
| Defaults Upon Senior Securities |
None.
| Mine Safety Disclosures |
Not Applicable.
| Other Information |
Rule 10b5-1 Trading Arrangement
During the three months ended September 30, 2025, of the Company’s directors or officers (as defined in Rule 16a-1(f) of the Securities Exchange Act of 1934) adopted, terminated or modified a Rule 10b5-1 trading arrangement or non-Rule 10b5-1 trading arrangement (as such terms are defined in Item 408 of Regulation S-K of the Securities Act of 1933).
| Exhibits |
The exhibits listed on the Exhibit Index are filed as part of this Quarterly Report on Form 10-Q.
EXHIBIT INDEX
BROADWIND, INC.
FORM 10-Q FOR THE QUARTER ENDED September 30, 2025
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Filed herewith. |
In accordance with the requirements of the Securities Exchange Act of 1934, the registrant has caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
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BROADWIND, INC. |
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| November 13, 2025 | By: |
/s/ Eric B. Blashford |
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Eric B. Blashford |
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President and Chief Executive Officer |
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(Principal Executive Officer) |