BWEN

As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Mr. Tom Ciccone. Thank you. You may begin.

Good morning, welcome to the Broadwind First Quarter 2026 Results Conference Call. Leading the call today is our CEO, Eric Blashford, and I'm Tom Ciccone, the company's Vice President and Chief Financial Officer. We issued a press release before the market opened today detailing our first quarter results. I would like to remind you that management's commentary and responses to questions on today's conference call may include forward-looking statements, which, by their nature, are uncertain and outside of the company's control. These forward-looking statements are based on management's current expectations and beliefs, actual results may differ materially. For a discussion of some of the factors that could cause actual results to differ, please refer to the Risk Factors section of our latest annual and quarterly filings with the SEC.

Additionally, please note that you can find reconciliations of the historical non-GAAP financial measures discussed during our call in the press release issued today. At the conclusion of our prepared remarks, we will open the line for questions. With that, I'll turn the call over to Eric.

Thank you, Tom, and welcome to our call today. During the first quarter, we advanced our business transformation strategy while delivering strong revenue growth, margin realization, and order momentum in our core Gearing and Industrial Solutions segments. Higher demand in the power generation and critical infrastructure end markets drove revenue growth of more than 40% in Gearing and more than 60% in Industrial Solutions year-over-year. We anticipate our strategic exit from wind tower production will be complete in the third quarter of 2026. Gearing and Industrial Solutions will represent our core businesses moving forward. Excluding the divested product lines within the heavy fabrication segment, Broadwind generated approximately $64 million of revenue on a trailing twelve-month basis through the end of the first quarter. Our remaining businesses are higher growth, more predictable, more profitable, and not policy-dependent, with meaningfully improved earnings quality.

Over time, we will use our core Gearing and Industrial Solutions segments as a platform to grow a business of increasing scale and profitability. Within the Gearing segment, Q1 orders increased more than 65% to $13.2 million, supporting a backlog of $30.5 million. Demand growth within the Gearing segment has been largely driven by strong customer activity and power generation, driven by the AI data center boom, as well as industrial and mining markets. Quoting activity remains robust, with green shoots now forming in defense. Our Industrial Solutions segment had yet another strong quarter as orders increased 44% year-over-year to $14.6 million, driving backlog to a record $43.3 million.

Natural gas turbine demand remains very strong, also driven by the AI data center boom, as well as global electrification, representing key growth drivers for this segment, and we are happy to meet that demand. Operationally, we continue to invest in equipment and technology to increase our process capabilities, reduce costs, and improve our profitability. In Gearing, this quarter we commissioned new very high-precision grinding and mechanical balancing equipment to improve quality and reduce lead times in the production of high-speed reduction gearing, such as the gearing used on natural gas turbines. These technology improvements make us one of the most vertically integrated manufacturers of these types of critical components in the U.S. In the Industrial Solutions segment, we continue to make investments to improve our capacity and capabilities in order to meet the strong customer demand that we're experiencing from our key gas turbine equipment customers.

We are on track to expand our local footprint in our North Carolina facility in Q2. This expansion will increase production space in North Carolina by 30%, which is necessary to service our strong backlog to position us to handle the future growth projected in this market. Within our heavy fabrication segment, Q1 revenue decreased by 35%, reflecting the sale of the Manitowoc Industrial Fabrications business last year, lower PRS demand, and the residual impact of the OEM-directed buy material supply issue we experienced late last year. Revenue on our Gearing segment increased 42% year-over-year to $8.5 million, given the steady ramp-up in power generation-related demand. Within Industrial Solutions, revenue grew 64% year-over-year to $9.2 million, primarily due to stronger shipments of natural gas turbine components.

In summary, the team and business continue to perform well as we sharpen our focus within adjacent higher-margin precision manufacturing verticals. Our progress on industry-specific certifications, such as AS9100 for aerospace and defense, and the Cybersecurity Maturity Model Certification, or CMMC 2.0 for the defense market and others, combined with targeted investments in capacity and capability, is yielding the results we expected and more. Our decision to strategically pivot from the unpredictable, uncertain, and policy-dependent wind tower business and repurpose that capital toward higher growth, more predictable, more profitable markets positions us well for the future. With that, I'll turn the call over to Tom for a discussion of our first quarter financial performance.

Thank you, Eric. Turning to slide five for an overview of our first quarter performance. First quarter consolidated revenues were $34.1 million, representing an 8% decrease versus the prior year period. As expected, we experienced a decrease in our heavy fabrication segment. Outside of the heavy fabrication segment, first quarter revenues within our Gearing and Industrial Solutions segment increased more than 40% and 60% respectively, reflective of the strong order activity levels we've been recognizing. Adjusted EBITDA declined slightly to $2.2 million versus the prior year of $2.4 million. Adjusted EBITDA increased approximately 16% sequentially, driven by improved capacity utilization and a more profitable mix. First quarter orders remained strong at over $37 million. Orders increased within our Gearing and Industrial Solutions segments, driven by strength in the power generation and natural gas turbine verticals.

While orders decreased within our Heavy Fabrication segment, reflective of our exit of the Manitowoc facility late in 2025. Turning to slide six for a discussion of our Heavy Fabrication segment. As expected with the wind down of the Manitowoc operation, we continue to see decreases in revenue, orders and backlogs. We anticipate this to continue going forward, especially in light of our recently announced sale of our Abilene facility, pursuant to which we strategically exited the wind market. First quarter orders of $9.7 million primarily consist wind tower production that will continue through Q3 of 2026 out of the Abilene facility, as well as some baseline PRS activity. As a reminder, we will retain the PRS business. We are evaluating segment reporting following the divestiture. We'll provide additional detail as the process is finalized.

First quarter revenues of $16.4 million and adjusted EBITDA of $1.7 million are both down versus the comparative prior year period due to the wind down of our Manitowoc operation, the resolved raw material supply issue, and lower PRS demand. Turning to slide seven. Q1 Gearing orders remained strong at $13.2 million, an increase of 66% versus the prior year and 36% sequentially. We ended Q1 with over $30 million in backlog, a level we have not reached since 2023. As we noted in prior quarters, we continue to see strong orders from power generation and oil and gas customers, and that momentum continued into Q2 as we booked more than $6 million in orders in April alone.

Segment revenue was $8.5 million, an increase both sequentially and versus the prior year, reflective of the stronger recent order intake levels. We recognized adjusted EBITDA of $0.6 million compared to an adjusted EBITDA loss of $0.2 million in the prior year period. As our volumes continue to recover, we are improving our capacity utilization, driving improved operating leverage. Turning to slide eight. Industrial Solutions booked almost $15 million of new orders during the first quarter, a 44% increase over the prior year. During the first quarter, the segment set a new record for both orders and backlog and is on track to do so again in Q2, as it has already recorded over $10 million in orders during April alone. The $43 million backlog total is more than $5 million above the previous high-water mark set in Q4.

Q1 represents the sixth straight quarter setting a record backlog level. Q1 segment revenue was $9.2 million, up over 60% versus the prior year, reflective of the elevated order levels received recently. As we noted last quarter, we expect this business will operate at these elevated revenue levels over the medium term. First quarter adjusted EBITDA was $1.8 million or 19% of revenue. This represents a significant increase over the $0.5 million in adjusted EBITDA and 8.7% EBITDA margin in the prior year as the segment benefited from improved capacity utilization and a more favorable mix of products sold. Turning to slide nine. We ended the first quarter with total cash and availability on our credit facility of more than $25 million or $16.4 million after adjusting for the minimum excess availability requirement in place effective Q1.

Pro forma for the sale of the Abilene facility, our liquidity improves approximately $10 million, reflective of credit availability adjustments and required debt payments. During Q1, operating working capital increased slightly as a decrease within our heavy fabrication segment was more than offset by increases within our Gearing and Industrial Solutions segments in line with their increasing activity levels. Finally, with respect to our financial guidance, as noted last week with the sale of the Abilene facility, we have elected to withdraw our full year 2026 financial guidance. That concludes my remarks. I will turn the call back over to Eric to continue our discussion.

Thanks, Tom. Now allow me to provide some thoughts as we move into Q2 and beyond. We continue to make a decisive shift toward increasingly stable, growing power generation in critical infrastructure markets. The strategic moves we've made with our tower facilities position us to focus on higher growth and higher margin opportunities that leverage our precision manufacturing expertise, and to do so with a strengthened balance sheet. We will complete our remaining wind tower orders through Q3 and then direct our full attention to our growth strategy. Our remaining facilities in Chicago, Pittsburgh, and Sanford, North Carolina, near Raleigh, have more than 450,000 sq ft of manufacturing space ready to serve our customers.

Quarter upon quarter of strong order growth within the Gearing and Industrial Solutions segments from power generation, specifically within distributed power, as well as growing opportunities in both small frame and utility scale natural gas turbines, support our strategy to expand in this market. Quote activity continues to increase in both Gearing and Industrial Solutions, generated by our ability to solve complex precision manufacturing and sourcing challenges faced by our customers in this growing market. We have prudently added resources to meet this demand in both divisions. In our Gearing segment, we continue to execute our strategy to move beyond traditional gearing for new opportunities in other precision machine products for power generation, aerospace, and defense. We see the continuing strength in incoming orders from the power generation sector as the beginning of a super cycle for which we are prepared.

The expansion of our very high precision and vertically integrated capabilities to serve the high-speed gear segment I mentioned earlier, increases our value add to key customers. We're pleased with the increasing level of customer activity we're seeing in various new infrastructure-related opportunities such as material processing and defense. We expect further inroads in defense as we complete our CMMC 2.0 certification later this year, which is a requirement when producing certain defense-related products. Lastly, there's also improving order activity in traditional Gearing markets supporting oil and gas, specifically the fracking aftermarket, as certain customers begin putting older rigs back in service. In Industrial Solutions, our commercial performance continues to set new records in both orders and backlog. The strong demand that we began experiencing in 2025 continues to accelerate in 2026.

As the global demand for natural gas power generation equipment grows, and as our customers bring additional production capacity online, we believe this is an extended period of growth. Some of our key customers have sold out their production capacity for the remainder of the decade, which gives us confidence that this period of strong demand is still in its early stages. In summary, I am pleased with the order growth and the strategic actions we've taken over the last year, and I'm excited to execute our plan. Our divisions are well-positioned to support the nation's growing need for power generation and infrastructure improvement, which we see as long-term opportunities for us. Our quality, quick response, and ability to solve complex manufacturing challenges for our customers continue to help us win new opportunities.

We've refocused our business, are investing wisely, and are taking decisive strategic actions towards higher value growing end markets. We're encouraged that our order intake continues to grow, positioning us for improved utilization of our reduced manufacturing footprint in 2026 as we strengthen our foundation for steady profitable growth, serving the power generation, critical infrastructure, and other key markets with high-quality precision components and proprietary products to capitalize on improved demand in the years ahead. With that said, I'll turn the call over to the moderator for the Q&A session.

Thank you. At this time, we will be conducting a question and answer session. If you would like to ask a question, please press star one on your telephone keypad. The confirmation tone will indicate your line is in the question queue. You may press star two if you like to remove your question from the queue. One moment please while we pull up for questions. Our first question comes from Justin Clare with Roth Capital Partners..

Hey, good morning. Thanks for taking our questions here.

Good morning, Justin.

Morning. Wanted to start out with with Heavy Fab and just wanted to see how you'd frame, you know, the conversion of the remaining backlog for Heavy Fab, the $25 million. How do you expect that to convert between Q2 and Q3? Just wanted to see how you're thinking about the inventory levels for the overall business as you convert the remaining orders for Heavy Fab here, and then what the effect could be on your overall liquidity, 'cause I'm imagining you may have a lower inventory level as you convert the remaining orders here.

Yeah, thanks, Justin. So of the $25 million of backlog, the overwhelming majority of that is tower related that we'll be completing out of the Abilene facility here. That should be very, very ratable over the next two quarters. You know, it's probably five months. Think of it, you know, 1/5 over the next five months, if you will. I think that you can call that fairly ratable, you know, post close three. I mean, post Q1 here.

The other thing I would mention is, overall, you know, when we're looking at not just inventory balances, but our operating working capital, we have a, you know, maybe about $10 million of operating working capital associated with our wind business at the end of the quarter. We expect that that will obviously decrease, but we are expecting that to be partially offset by increases within, you know, our Gearing and our Industrial Solutions segments as those businesses continue to ramp up here over the balance of the year. There may be some benefit, but I think it'll be muted. Yeah.

Got it. Okay. With the sale of Abilene, just wondering how we should think about the overall operating expenses for the business here, and how you anticipate that changing as you exit that wind tower business. Any other actions we should be looking for in terms of things that you may be looking to do to optimize the business as you shift to, you know, a focus on power generation and critical infrastructure.

Well, yeah. We do have obviously the operating expenses associated with that facility will go away as we exit the facility. I don't think that their cost structure's, you know, significantly different than what we have within the other business units, so we shouldn't see any consolidated impact there. In terms of other costs that we're looking at, you know, we're looking at all of our costs and trying to optimize that in light of this transaction going forward.

Got it. Okay. Maybe just one more. You know, you had indicated natural gas content drove order growth for Industrial Solutions and Gearing. Wondering if you could talk about the opportunity for Broadwind to expand, you know, content per turbine or wallet share within the nat gas end market. Also, I guess, what you're seeing in terms of order size or project scope and how that's trending.

Thanks, Justin. This is Eric. I will tell you that we are engaged with a couple different producers of gas turbines, primarily the ones that are in the utility scale. We're engaged right now with four of the top 10 right now. Of course, we do have some concentration on a couple of those. As far as content, the content for Industrial Solutions is broad. As we discussed before, we tend to support those installations on what's called not hot gas path, but surrounding the hot gas path. We continue to invest in capabilities to grow share within that product set. I think we are growing within our primary customer and another three on top of that.

We're also growing content from Industrial Solutions, kind of beyond what we traditionally do by taking more manufacturing on ourselves. With regard to Gearing, we do reduction gearing, and we're looking at some other components within the natural gas turbine, but it will be limited primarily to that reduction gearing that we discussed before, because that's primarily what these turbines need from us as far as precision machine gearing.

Okay. Got it. Thank you. Appreciate it.

Thanks, Justin.

Thanks, Justin.

Our next question comes from Eric Stine with Craig-Hallum. Your line is now live.

Hi, Eric. Hi, Tom. Good morning.

Good morning.

Morning.

Obviously you're, you know, focusing here. You've been investing in Gearing and Industrial Solutions for some time. Curious, could you update us on, you've got really strong backlog in both segments. Update us on how you would expect that backlog to flow, you know, in both businesses, whether that has changed or, you know, improved your ability to execute on that, and then just what that implies over the next, say, 12-18 months?

Sure. Sure. Thanks, Eric. I think what we're seeing is that we think that Q1 is probably the low water mark for our revenues for both of those segments. We do expect these revenues to ramp up. You know, I don't think we can take our order run rate and extrapolate that to mean what we're gonna book in terms of revenue, because we are probably booking further into the future than we have in the past. I think just suffice to say, I think we can expect a steady ratable growth for the balance of this year.

We are, I should add, that we are booking into 2027, and actually a little bit into 2028. That's depending on when the customers want the product, not depending on our capability to deliver. It's when the customers want it. They are looking further out. A couple of our customers are booked literally to the end of the decade, we have some advanced notice of some of their products. They want to secure a capacity now instead of waiting.

I don't want to put words in your mouth, but you could, it sounds like you could execute on this backlog in both segments, you know, perhaps over the next 12 or so months. In some cases, as you said, it has to do when the customers want that production.

Correct

That would potentially be the limiting factor.

Correct. Now, which also means there's more capacity we have to fill in the interim.

Yep. Yep. Okay. Got it. I mean, is it something where you're able to disclose kind of what your, you know, the percentage? It sounds like it would be more skewed to Industrial Solutions when you're talking about booking further out, but are you able to kind of give a high level view of, say, what, in that backlog, what is kind of earmarked for 2026 versus 2027 and 2028?

We could probably provide that on the next call. We could provide some color there. At this point, I would say it's primarily 2027. Anything that's not in this year would be 2027. We're just starting to touch 2028. We can add some color to that maybe on the next call for sure.

Yeah.

Yeah. You are correct. The customer that is pushing some or requesting some 2028 due dates, delivery dates would be out of the Industrial Solutions segment, not so much out of Gearing.

Yep. Okay. Got it. Could you just talk a little bit about Gearing? You mentioned some positive trends in oil and gas, and certainly, you know-

Sure

- you are hearing I mean, it's a distant memory, but early in the year, gas prices or I'm sorry, oil prices, pretty depressed. you're hearing people start to talk about that that's really weighed on their oil and gas business, and that it really has not picked up, you know, even with oil price appreciation given geopolitical factors. maybe talk about that. I mean, is that something that you're kind of concerned about or on the lookout for? Or is there a reason that Gearing would be a little bit insulated from what some others are seeing?

Well, Gearing has been or oil and gas Gearing, as you know, has been at a low for, shoot, six or seven quarters now. It's because a couple of things. One is the customers are being more frugal with their capital. Their rigs are a lot more productive, they don't need to add rigs to add output. However, what's going on now is we have customers that are putting some of their old rigs back to work and replacing some components within their existing rigs. What we're seeing is what I would call quick turn, domestic supply for our customers as they put some of their old equipment back to work.

Got it. I mean, maybe is this a possibility that actually I mean, you are seeing some improvement there, as you said, low levels, but you're seeing some improvement there because customers-

Yeah

- are in fact a little bit cautious, but they're trying to get more out of their existing equipment rather than new capital.

Right. Right. That's correct. The rig count in the U.S. remains down. The customers aren't really putting new rigs back to work. There's been a couple over the last couple of weeks that have been redeployed. Where we are seeing the demand is what I would call aftermarket, meaning the customers that have rigs working and need to keep those rigs functioning, and they're replacing some of their wear parts, their Gearing wear parts with new components. Not new rigs, upgrading existing rigs.

Okay. All right. That's helpful. Last one for me, just, I mean, pretty clear signaling that you that you aim to use a stronger balance sheet to add to your business. I'm curious, maybe it's too early, or maybe you just can't talk about, you know, some specific thoughts. Just curious, when you look at your platform, what are some areas where you potentially could fill in?

Of course, we have been pretty open about wanting to grow inorganically. We're going to use those two, both those platforms, Gearing and Industrial Solutions as platforms to grow. We like precision machining with exposure to defense and aerospace. We already have some exposure to power generation. If we can find something in power generation that would make sense, we'd certainly like to bolt that on. We also like grid hardening. Think in terms of transmission distribution, a lot of the grid in the U.S. is quite old and in need of upgrade, and we think there's position for us to take to support that upgrade.

Okay, thank you.

Thanks, Eric.

Our next question comes from Amit Dayal with H.C. Wainwright. Your line is now live.

Thank you. Good morning, everyone. Thanks for taking my questions. It looks like, you know, you have a pretty clear strategy in front of you with the new segments you're focused on. In that context, you know, what should we expect EBITDA margins to sort of, you know, come through maybe over the next 12-18 months as you sort of clean up the, you know, the businesses you're exiting and focus on these new segments?

Sure. Yeah, I'll take that one. Thanks, Amit. I would say within our Gearing segment, we should expect margins to continue to improve. For them, it's really about volume and operating leverage. They have a big fixed cost structure, and the more revenue that we can produce out of that plant, the more profitable the overall plant is. We should see that continue to improve ratably. In terms of our biz, we should see our mix normalize. The last two quarters, I think we've got a very strong mix of products sold, and we expect that to increase. We expect that to normalize, I should say, over the balance of the year. You know, revenue going up, but in terms of margins, I think you'll see that normalize a little bit in over the balance of the year.

Understood. You know, we've spoken about this, guys, you know, one-on-one in prior calls, but, you know, with the maybe fabrication now sort of out of the way, is there a potential rebranding coming for the company overall?

The question really is we don't know yet. There's a certain number of our divisions are already operating with different names, Brad Foote Gearing, which we would not rebrand. The overall company, we're thinking about it. I would stay tuned on that. The word Broadwind has wind in it, but there's a whole lot more that Broadwind means to many people than just wind, a wind company. Stay tuned. We've thought about it. We're considering it, but no decision at this point.

Understood. Just last one. On the defense side, who are the customers on the defense side, Eric?

Uh, some of them, um Well, there's, um-

What kind of customers?

Yeah. What I would say is some of them don't want us to disclose their name. Let's say there are parts for weapon systems, there's parts for the naval systems, and there's parts for helicopters.

Okay. Thank you. That's all I have, guys. I'll take my other questions offline. Thank you.

Thank you, Amit.

We have reached the end of the question and answer session. I'd now like to turn the call back over to Eric Blashford for closing comments.

Yeah. Thanks everyone for listening today. We're on the move. We're excited to execute our strategy. Stay tuned on that. We look forward to speaking with you again after Q2 to discuss our results. Have a great day, everyone.

This concludes today's conference. You may disconnect your lines at this time, and we thank you for your participation.

Greetings, and welcome to Broadwind, Inc.'s Fourth Quarter and Full Year 2025 Earnings Conference Call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. As a reminder, this conference call is being recorded. I would now like to turn the conference over to your host, Mr. Thomas A. Ciccone. Thank you. You may begin.

Good morning, and welcome to the Broadwind, Inc. Fourth Quarter and Full Year 2025 Results Conference Call. Leading the call today is our CEO, Eric B. Blashford, and I am Thomas A. Ciccone, the company's vice president and chief financial officer. We issued a press release before the market opened today detailing our fourth quarter results. I would like to remind you that management's commentary and response to questions on today's conference call may include forward-looking statements which, by their nature, are uncertain and outside of the company's control. Although these forward-looking statements are based on management's current expectations and beliefs, actual results may differ materially. For a discussion of some of the factors that could cause actual results to differ, please refer to the risk factors section of our latest annual and quarterly filings with the SEC. Additionally, please note that you can find reconciliations of the historical non-GAAP financial measures discussed during our call in the press release issued today. At the conclusion of our prepared remarks, we will open the line for questions. With that, I will turn the call over to Eric.

Thanks, Tom. And welcome to our call. 2025 was a pivotal year in our evolution as a leading manufacturing partner of choice for global OEMs in power generation and critical infrastructure, while becoming a leaner, more diversified business equipped to deliver profitable growth through the cycle. The divestiture of our industrial fabrication operations in Wisconsin in the third quarter represented an important step in optimizing our asset base and increasing our balance sheet optionality, which positions us to redeploy capital toward higher value opportunities. Our fourth quarter performance was in line with the preliminary results we issued in early February 2026. Fourth quarter results were impacted by a raw material supply disruption in our Heavy Fabrications business associated with an OEM customer's directed buy program, which reduced manufacturing throughput and operating efficiency during the period. The company has implemented corrective actions to address the issue, and expects operations to normalize during 2026. Demand conditions and customer activity were strong during the fourth quarter, supported by robust project activity across our Gearing and Industrial Solutions segments. Orders were led by 38% year-over-year growth in the Gearing and Industrial Solutions segments, partially offset by a 20% year-over-year decline in the Heavy Fabrication segment reflecting the divestiture of the Wisconsin operation. Gearing orders increased to nearly $9.7 million as we saw strength in power generation, along with some resurgence in oil and gas and the wind aftermarket. In March 2026, we received a $6.0 million follow-on order for precision machined gearing components used in midsized natural gas turbines which power data centers and other applications. This order represents the second half of the significant order we received in July. Within the Industrial Solutions business, we received orders of $11.1 million. In summary, the team and business continued to perform well as we sharpen our focus within adjacent higher margin precision manufacturing verticals. This past quarter, we quickly identified and addressed the supply disruption by working with our customer to bring on an alternative supplier, minimizing the overall impact to our business. Furthermore, recent strategic actions to divest our Wisconsin facility position us for increased balance sheet strength and flexibility, while improving capacity utilization at our Abilene facility and reducing overhead costs. Despite the volatile trade policy environment, our 100% domestic manufacturing base remains a key competitive advantage as we partner with tier one OEMs who value our deep technical expertise, commitment to quality, and on-time service. With that, I will turn the call over to Thomas A. Ciccone for a discussion of our fourth quarter financial performance.

Thank you, Eric. Turning to Slide five for an overview of our fourth quarter performance. Fourth quarter consolidated revenues were $37.7 million, representing a 12% increase versus the prior-year period. The fourth quarter increase was driven primarily by strength within the Industrial Solutions segment, in which revenue was up 60% year-over-year. Furthermore, the fourth quarter revenue level within the Industrial Solutions segment represents a 40% increase versus the average over the past four quarters. We believe that this volume level will continue based on current customer indication. Outside of our Industrial Solutions segment, lower Gearing deliveries were more than offset by increased revenue within the Heavy Fabrication segment, which benefited from increased wind revenue versus the prior-year quarter. Adjusted EBITDA declined to $1.9 million versus the prior year of $2.1 million. Despite higher volume, adjusted EBITDA decreased due primarily to lower capacity utilization within our Gearing segment and operating inefficiencies associated with the directed-buy raw material supplier issue we referenced in our February 5 press release. Fourth quarter orders were strong, nearly $39.0 million. Orders increased within our Gearing and Industrial Solutions segments, driven by strength in the power generation, oil and gas, and natural gas turbine verticals. Orders decreased within our Heavy Fabrication segment, reflective of our exit of the Manitowoc facility late in 2025. Turning to Slide six for a discussion of our Heavy Fabrication segment. Fourth quarter orders were nearly $18.0 million, a 20% decrease versus the prior-year quarter. However, after backing out the $6.3 million in industrial fabrication product line orders received for the Manitowoc facility in the prior year, orders increased more than 10% on an adjusted basis due to meaningful tower orders being recognized in the current-year quarter. Fourth quarter revenues of $21.6 million are up 6% versus the prior-year quarter. Despite delays associated with the raw material supply issue we experienced, we were still able to recognize increased wind tower and repowering revenue in the fourth quarter. However, adjusted EBITDA was down versus the prior year due to manufacturing inefficiencies associated with the aforementioned raw material supply issue. Turning to Slide seven. Q4 Gearing orders remained strong at $9.7 million, an increase of 38% versus the prior-year fourth quarter. We ended 2025 with approximately $26.0 million in backlog, a level we have not reached since 2023. As we noted in the prior quarter, we continue to see strength in the power generation and oil and gas verticals, and that momentum continued into Q4. Additionally, as we announced via this morning's earnings release, we recently received just over $6.0 million in follow-on orders from a leading OEM in the natural gas turbine segment of the power generation end market. Including this order, we have already booked almost $11.0 million in Q1 orders. Segment revenue was $7.0 million, down almost 8% versus the prior-year quarter. We recognized an adjusted EBITDA loss of $0.3 million compared to $0.1 million of adjusted EBITDA in the prior-year period. Due to the lower revenue levels, earnings were adversely impacted by reduced capacity utilization. As volumes recover, expect operating leverage to improve in 2026. Turning to Slide eight. Industrial Solutions booked over $11.0 million of orders during the fourth quarter, a 38% increase versus the prior-year quarter. Orders remained at an elevated level; the resulting backlog again hit a new record level of over $38.0 million at the end of the fourth quarter, eclipsing the previous record of $36.0 million set at the end of Q3. This quarter represents the fifth straight quarter setting a record backlog level. Q4 segment revenue was $9.4 million, up both sequentially and versus the prior-year quarter, reflective of the elevated order levels received recently. Fourth quarter revenues represent a 60% increase over the prior-year quarter and is the highest revenue level ever recorded within the segment. We believe this business will operate at these elevated revenue levels throughout 2026. Adjusted EBITDA of $1.5 million, or almost 16% segment EBITDA margin, increased significantly over the $0.6 million, or 10% segment EBITDA margin, reported in the prior-year quarter, reflective of the increased revenue levels. Turning to Slide nine. We ended the fourth quarter with total cash and availability on our credit facility of nearly $25.0 million. This is down from the prior year, and we were carrying significantly lower working capital levels as we had received advance payments from our major customer late in 2024. Working capital levels were flat during the quarter and we expect them to remain relatively consistent moving forward. Finally, with respect to our financial guidance, today we are reaffirming our full-year 2026 guidance. We expect full-year 2026 revenue to be in the range of $140 to $150 million and adjusted EBITDA to be in the range of $8 to $10 million. That concludes my remarks. I will turn the call back over to Eric to continue our discussion.

Thanks, Tom. Now allow me to provide some thoughts as we move into 2026. We continue to make a decisive shift toward increasingly stable, growing power generation markets with an emphasis on oil and gas, renewables, and potentially nuclear. Our strategic emphasis is on pursuing the highest growth and highest margin opportunities that leverage our precision manufacturing expertise. Our facilities in Abilene, Texas; Chicago; Pittsburgh; and Sanford, North Carolina, near Raleigh, have more than 600,000 square feet of manufacturing space ready to serve our customers. Quarter upon quarter of repeat wins within the Gearing and Industrial Solutions segments from power generation, specifically within distributed power, as well as growing opportunities in both small-frame utility-scale natural gas turbines, support our strategy to expand in this market. Quote activity continues to increase in both Gearing and Industrial Solutions, generated by our ability to solve the complex precision manufacturing and sourcing challenges faced by customers in this growing market. So we are expanding resources to meet this demand in both divisions. In our Gearing segment, we continue to execute our strategy to move beyond traditional gearing markets through opportunities in other precision machined products. We are pleased with the increasing level of customer activity we are seeing in various new infrastructure-related markets such as road maintenance, cement plants, and aggregate material processing, along with some early green shoots in defense. Recent sizable orders we received from the power generation sector are the beginning of a multiyear cycle for which we are prepared. The expansion of our capabilities to serve the high-speed gear segment, such as the dynamic balancing capabilities I mentioned earlier, allow us to bring more processes in-house, decreasing lead times while improving quality and profitability. In Industrial Solutions, continued growth in the natural gas turbine industry driven by the global demand for power is having a positive commercial impact on our business. New data center installations are driving increased demand for distributed power solutions, including those that provide redundancy, and many of our key customers are adding significant production capacity in order to meet both the current and foreseeable future demand from power generation. We are proud to have recently received the 2025 supplier quality and delivery award from our largest customer, in recognition of our quick response to their significant growth in demand, all while meeting their strict quality and delivery requirements. In our Heavy Fabrication segment, we believe that domestic onshore wind tower activity will continue at its present rate through 2026 and into 2027. We have good visibility for tower production into 2026 and good customer indications beyond that. We are seeing increased quoting activity for our PRS line of natural gas pressure reduction units and expect sales to increase proportionately. In summary, I am pleased with the order growth and strategic actions we have taken this year as we continue to demonstrate our strong execution of our strategic priorities. Our divisions are well positioned to support the nation's growing need for power generation and infrastructure improvement, which we see as long-term opportunities for us. Our quality, quick response, and ability to solve complex manufacturing challenges for our customers continue to help us win new opportunities. We have reduced our cost structure, are investing wisely, and are taking strategic actions to refocus our resources toward higher value and growing end markets. We value our people and are committed to keeping them safe, fulfilled, and productive. This year, we will be implementing an ISO 45001 occupational health and safety readiness program, with plans to add that certification to our existing ISO 9001 and AS 9100 certifications. Our 100% U.S.-based plants are expanding capabilities to take advantage of opportunities afforded by the pro-domestic manufacturing policy backdrop afforded by the current administration. We are encouraged that our order intake continues to grow, positioning us for improved utilization of our manufacturing footprint in 2026, as we strengthen our foundation for steady, profitable growth serving the power generation, critical infrastructure, and other key markets with high-quality precision components and proprietary products to capitalize on improved demand in the years ahead. With that said, I will turn the call back over to the moderator for the Q&A session.

Thank you. At this time, we will be conducting a question and answer session. If you would like to ask a question, please press 1 on your telephone keypad. You may press 2 if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. Our first question comes from Eric Stine with Craig-Hallum. Your line is now live.

Hi, Eric. Hi, Tom. Hi, Eric. Good morning. Good morning. So I know Gearing and Industrial Solutions backlog is up 2x or more year-over-year. You did mention your expectations for revenue for Industrial Solutions in 2026. I am curious if you could just talk about Gearing a little bit. I know that, I mean, obviously, the demand is there, but the quarter was limited by utilization. So just curious, maybe thoughts on that, steps you need to do to get through that, and what 2026 growth might look like in Gearing throughout the year?

Sure. Yes. So as you mentioned, our backlog is about double from where we entered 2025. So we are expecting significant growth within that segment in terms of revenue. For sure, double-digit growth can be relied on there. We are entering with a much stronger backlog. So it is about execution versus commercial success this year.

I mean, on execution, can you talk about that a little bit? I mean, this is not limited by timing of when customers want these components. It is more about you driving higher throughput, or just any details about how the year ended and why 2026 may be different or may be limited at the start, or anything along those lines?

Well, I can add a little bit. This is Eric. With the backlog that we have, we are working towards the customers' requested dates, which are spread out throughout the year. So I would say there is a ramp up going to happen in Q1 with steady revenue in Q3 and Q4. Again, much visibility for the full year. Some of our backlog is into 2027, but most of it is 2026. If that helps you.

Yeah. No. That is helpful. Okay. Maybe, after selling Manitowoc, the balance sheet is in solid shape. You talked about redeploying it to different areas. That includes bolt-ons and some new capabilities. Maybe it is hard to share, but if there is anything you can share about areas that you think need added to, whether organic or inorganic?

Well, we are definitely focused on power generation and critical infrastructure in all of our divisions, and our M&A search is in those areas, especially with grid or power generation. I think we are entering a super cycle for power generation and grid both. It is going to last at least ten years. And that is where my focus is, my targets are, in M&A. Also for organic growth, in BIS, which is obviously power generation, and in Industrial Solutions, and in Gearing with power generation in these turbines that are, I would call, midrange, which are 100 megawatts and less.

Got it. And maybe, so these are not, I mean, I guess bolt-on certainly implies that these are not necessarily significant acquisitions, but more about adding capabilities, whether it is a new product line, new manufacturing footprint, that sort of thing?

Yeah. So they would be bolt-on acquisitions to our existing platforms.

Okay. Alright. Thank you very much.

Thank you, Eric.

Our next question comes from Justin Clare with ROTH Capital Partners. Your line is now live.

Hey, good morning. Thanks for taking our questions here. I wanted to just start out on capacity outlook for Industrial Solutions. You mentioned that you are expanding the capacity there, I think, by 30% to accommodate future growth. So just wondering, with that added capacity, how much potential revenue might be supported for the Industrial Solutions segment when it is fully utilized? And then if you could speak to how you anticipate utilization increasing over time here.

Sure. Just for clarification, our footprint is increasing 30%, but our capacity, we have already doubled it through staffing and equipment. So that floor space is just over and above that. So I think we can easily double our revenue, if not maybe 2.2 times more than 2025 revenue, in our existing facility before we end up having capacity constraints. We are right now only operating at one shift, so we can add another shift if necessary. So I think we could certainly get into the $70.0 million range, revenue within our existing facility.

Okay. And any sense for the timing in which you might be able to achieve that level of revenue, given the visibility you have into demand and the discussions that you are having with your customers?

Well, the growth in the combined cycle natural gas utility-scale natural gas turbines, which we serve in that market, is really, really strong. Our primary customers, their primary customer, GE, says orders increased 77% in 2025 alone. So I expect that the demand will be there from our primary customer and others all the way through 2030. So with customer indications, I think we have got a real strong chance of hitting that revenue number over the next several years.

Got it. Okay. That is helpful. And then maybe shifting over to the Heavy Fab business here. The backlog was down in Q4, but that partly reflects the Manitowoc divestiture. Wondering if you could speak to the underlying demand trends that you are seeing, the visibility you have, and maybe the timing for backlog conversion? And what you are expecting in terms of the cadence in orders in terms of the timing of bookings relative to when revenue will be recognized.

Sure. As has been the practice in the market for some time now, our customers tend to release orders about six months or so in advance of their production needs. We have got good visibility for towers and adapters into Q3 2026, and customers have indicated that level of volume should continue through the remainder of 2026 and into 2027.

Yeah, just to add to that, Justin, you asked about converting backlog. We see this as a ratable conversion consistent through 2026. So we are not seeing any spikiness in terms of revenue. It should be pretty ratable over the period.

Okay. Got it. That is helpful. Thank you.

Our next question comes from Amit Dayal with H.C. Wainwright. Your line is now live.

Thank you. Good morning, everyone. Thanks for taking my questions. Eric, with respect to sort of the 20% roughly level of organic year-over-year revenue growth you are guiding for, with the kind of visibility you have right now, and some of the macro conditions, I mean, they look favorable. Do you think this is a level of growth you can maintain for the next few years, at a minimum?

Well, the markets that we are growing into have CAGRs of about 6% year-over-year, but in the great demand cycle that we are in, the products that we are in, such as natural gas turbines in medium and high capacity, the growth is beyond that CAGR that I mentioned to you. So I think we can, in those two divisions, achieve that kind of growth rate going forward over the several years, really through 2030, which is as far as we can see out now.

Okay. Understood. And then the $6.0 million follow-on order, is this with just one customer? And then adjacent to that, are there other opportunities similar to this that you may be pursuing that are in the pipeline but not in the backlog?

Sure. Again, this is the power generation market, which we are really excited about. That is the market that we are attacking because we have the capital equipment in place. We have got the certifications in place. We have got the customer relationships in place now. That is one customer that we are talking to with regard to that particular order, but we are talking to several others in that space.

Okay. And, you know, just given sort of the recent volatility around events taking place in the Middle East, your exposure to the oil and gas space, are you seeing a little bit more inquiries, etcetera, or activity from that segment right now?

We are. Several of our customers, now the orders are not huge like they were several years ago, but they are, I would call them, substantive, and it is multiple customers. So I think what they are doing is hedging their bets, if you will, that there could be a disruption in their supply, which sometimes comes from overseas. But there is demand, because the price of oil is an indicator of demand in the U.S., and our customers are in the fracking and drilling U.S.-based space.

Okay. Yeah. That is all I have, guys. I will take my other questions offline. Thank you.

Thanks, Amit.

We have reached the end of the question and answer session. I would now like to turn the call back over to Eric B. Blashford for closing comments.

Yes. Thanks, everyone, for being on the call today and your interest in our company. We look forward to coming to you again at the end of Q1 to talk about our results.

Thank you. This concludes today's conference. You may disconnect your lines at this time, and we thank you for your participation.