Williams Industrial Services Group Inc. - Annual Report: 2015 (Form 10-K)

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Item 8. Financial Statements and Supplementary Data

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-K

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2015
Commission File No. 001-16501

Global Power Equipment Group Inc.
(Exact name of registrant as specified in its charter)

400 E. Las Colinas Blvd., Suite 400
Irving, TX 75039
(Address of registrant's principal executive offices and zip code)

Registrant's telephone number, including area code: (214) 574-2700

         Securities to be registered pursuant to Section 12(b) of the Act:

         Securities registered pursuant to Section 12(g) of the Act:

NONE

         Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes o    No ý

         Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes o    No ý

         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 12 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. Yes o    No ý

         Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes o    No ý

         Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. o

         Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act. (Check one):

         Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act. Yes o    No ý

         As of June 28, 2015, the last business day of our most recently completed second fiscal quarter, 16,990,175 shares of the registrant's publicly traded common stock held by non-affiliates were outstanding with an aggregate market value of approximately $133 million (based upon the closing price on June 26, 2015 of $7.85 per share).

         As of March 10, 2017, there were 17,487,472 shares of common stock of Global Power Equipment Group Inc. outstanding.

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        Statements we make in this Annual Report on Form 10-K where we express a belief, expectation or intention or otherwise are not limited to recounting historical facts are forward-looking statements. These forward-looking statements are subject to various risks, uncertainties and assumptions, including those noted under the headings "Cautionary Note Regarding Forward-Looking Statements" and "Part I—Item 1A. Risk Factors" in this Annual Report on Form 10-K.

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Explanatory Note

        This Annual Report on Form 10-K (this "Form 10-K") is a comprehensive filing for the fiscal year ended December 31, 2015, filed by Global Power Equipment Group Inc. ("Global Power," "the Company," "we," "us" or "our," unless the context indicates otherwise). It includes the restatement of certain of our previously filed consolidated financial statements and data as explained herein. It also amends certain previously filed disclosures, including those for management's discussion and analysis of financial condition and results of operations for certain periods presented in this Form 10-K. In order to provide stockholders a composite presentation of information for prior periods during which we were not making periodic filings with the U.S. Securities and Exchange Commission (the "SEC"), this filing includes more information than would routinely be included in an Annual Report on Form 10-K. In addition, as described in more detail under the heading "Subsequent Events" below, as a result of the changes within our business since the end of our fiscal year ended December 31, 2015, the information concerning our business and related matters includes certain information relating to periods after December 31, 2015.

Background of Restatement

        On May 5, 2015, the Audit Committee (the "Audit Committee") of our Board of Directors (the "Board" or the "Board of Directors"), in consultation with outside advisors and management, concluded that our financial statements for the annual period ended December 31, 2014 should not be relied upon because of accounting errors affecting the fourth quarter of 2014 that were discovered during the first quarter 2015 financial review process. Those errors resulted in an understatement of our cost of sales in the quarterly and annual periods ended December 31, 2014. We subsequently discovered additional accounting errors affecting our financial statements for the years ended December 31, 2014, 2013 and 2012. Accordingly, on January 26, 2016, we announced that our previously filed financial statements for those periods, including the corresponding financial statement information, management's reports on the effectiveness of our internal control over financial reporting as of December 31, 2014, 2013 and 2012, earnings and related press releases or other shareholder communications, as well as the auditor's reports on those financial statements and its reports on the effectiveness of our internal control over financial reporting as of December 31, 2014, 2013 and 2012, could no longer be relied upon. We also announced that we anticipated that the previously disclosed financial data for periods prior to 2012 would need to be restated to address the same types of errors identified in our 2012 financial statements.

Restatement Adjustments

        Based upon our internal reviews of various accounting transactions and matters and the associated re-audits of prior years' financial statements, the following contains a summary of the errors that have been corrected and identifies certain accounts and transactions that have been restated. All information included in this section is qualified in its entirety by reference to our consolidated financial statements and related footnotes included in this Form 10-K. For additional information, see "Note 2—Restatement" and "Note 20—Selected Quarterly Financial Data (Unaudited)" to our consolidated financial statements.

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Conversion to Percentage-of-Completion Accounting:  U.S. generally accepted accounting principles ("GAAP") specify the criteria for determining whether to utilize the percentage-of-completion or completed contract method of accounting for revenue recognition. During the period from 2011 through 2014, we recognized revenue from virtually all of our contracts in our Mechanical Solutions segment under the completed contract method of accounting. We determined in late 2015 that the completed contract method of accounting was not in accordance with GAAP because we had sufficient information available to use the percentage-of-completion method for the period from 2011 through 2014. Concurrently, we did not reduce recognized revenue in a timely manner for contractual liquidated damages that we incurred on certain projects as a

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result of late delivery and/or performance issues. Therefore, we have recorded the necessary adjustments to retrospectively apply percentage-of-completion accounting to our Mechanical Solutions segment for the period between 2011 and 2014. For additional information about our accounting policies and estimates, see "Part II—Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Policies and Estimates."

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Completed Contract Revenue Recognition:  In our Electrical Solutions segment, we historically have used the completed contract method of accounting because we lack the requisite information to utilize percentage-of-completion accounting. Although completed contract was the correct method, we discovered certain errors involving recognizing revenue before certain contracts were completed and/or before units were shipped or delivered and title transferred. Additionally, we did not reduce recognized revenue in a timely manner for contractual liquidated damages that we incurred on certain projects as a result of late delivery and/or performance issues. We have recorded the necessary adjustments to revenue in the proper period in connection with the foregoing.



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Job Cost Capitalization, Estimation and Expensing:  We identified errors in our job cost accounting practices, including: (i) errors in the capitalization of manufacturing overhead; (ii) not always accruing for subcontractor liabilities while the work was in progress; (iii) not always estimating and recognizing loss contracts in a timely manner; and (iv) not always properly matching the cost of goods sold with the related revenue in the proper period. Additionally, as noted in the "Conversion to Percentage-of-Completion Accounting" discussion above, our Mechanical Solutions segment erred in electing not to utilize the percentage-of-completion method of accounting. These errors resulted in misstatements in our reported cost of goods sold, costs and estimated earnings in excess of billings, billings in excess of costs and estimated earnings and accrued liabilities.



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Warranty Reserves:  We improperly interpreted the accounting requirements for recording and reporting warranty reserves and failed to properly incorporate into our warranty estimates information available to us during the various subsequent events periods in our original filings, which resulted in errors in our reported warranty reserve and warranty expense amounts.



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Goodwill:  At the time of the sale of our former subsidiary, Deltak LLC ("Deltak"), in 2011, we erroneously concluded that Deltak was not a separate reporting unit for the evaluation of the carrying value compared to fair value of goodwill. As a consequence of that conclusion, we allocated $18.8 million of goodwill from Deltak's books to Mechanical Solutions, which resulted in an $18.8 million overstatement of the 2011 pre-tax gain on the sale of Deltak. Consequently, we have erroneously been carrying the related $18.8 million of goodwill on our balance sheets since that time. The after-tax effect of this change totaled $11.5 million as of December 31, 2011 and was reflected as a decrease to the December 31, 2012 opening balance of accumulated retained earnings in our consolidated financial statements in this Form 10-K.



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Other:  In addition to the errors discussed above, our restated financial statements reflect the following additional error corrections and consequential changes in previously reported financial results:



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We did not properly accrue for certain operating expenses in the period in which they were incurred, resulting in certain expenses being recognized in the wrong period.



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We did not timely identify and reserve for obsolete inventory, resulting in certain expenses being recognized in the wrong period.



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We did not properly adjust dividends payable on restricted share units ("RSUs") for dividend equivalents for RSUs deemed not likely to vest.



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We identified errors in the preparation and application of GAAP to the statements of cash flow including the presentation of changes in other comprehensive income for entities with

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functional currency other than the U.S. dollar and scheduling of changes in property, plant and equipment.

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Upon finalization of purchase accounting, we did not recast our financial statements for the year of acquisition and, instead, made the change in the year of finalization.



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We did not properly eliminate intercompany transactions between reportable segments and certain product groups within our Mechanical Solutions segment. We also corrected certain consolidated elimination entries, primarily due to intercompany transactions not denominated in the entity's functional currency. Finally, as a result of these consolidation restatement entries and the other entries discussed above, we recorded changes to our other comprehensive income from the translation of non-U.S. entities from their functional currencies to the U.S. dollar reporting currency.



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As a result of the effect of the restatement errors, we recorded adjustments to our provision for income taxes and the deferred tax positions for all periods restated. In addition based on the negative evidence from the restated pre-tax losses generated in the two fiscal periods ending December 31, 2014, a valuation allowance against all of our U.S. and certain foreign deferred tax assets was recorded resulting in additional valuation allowances of $44.9 million against the gross deferred tax assets as of December 31, 2014.

        In addition to the restatement errors, we made certain reclassifications to conform the presentation of previously reported balances to current year presentation. The significant reclassifications include presentation of revenue and cost of revenue by reportable segment in the statements of income, detailed breakout of components of inventory, presenting accrued payables, including accrued fabricator expenses, as part of other current liabilities rather than accounts payable and separately presenting the consolidated foreign currency (gain) loss as non-operating expense on our statements of operations.

        For additional information, please refer to "Part II—Item 6. Selected Financial Data (Restated)" "Part II—Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations" and "Note 2—Restatement" and "Note 21—Subsequent Events" to our consolidated financial statements for a schedule detailing each change by category.

Internal Control Consideration

        In connection with the preparation of this Form 10-K, our management reassessed its evaluation of the effectiveness of our internal control over financial reporting and determined that there were deficiencies in our internal control over financial reporting that constitute material weaknesses as of December 31, 2015. For a discussion of management's consideration of our disclosure controls and procedures and the material weaknesses identified, see "Part II—Item 9A. Controls and Procedures" of this Form 10-K.

Financial Information Included in this Report

        This Form 10-K includes:

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Audited balance sheets as of December 31, 2015 and December 31, 2014 and audited consolidated statements of operations, consolidated statements of stockholders' equity and consolidated statements of cash flows for each of our fiscal years ended December 31, 2015, 2014 and 2013.



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Selected Financial Data for our 2015 (audited), 2014 (restated and audited), 2013 (restated and audited), 2012 (restated and unaudited) and 2011 (restated and unaudited) fiscal years.



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An updated Management's Discussion and Analysis for our fiscal year ended December 31, 2014 (including a comparison to our fiscal year ended December 31, 2013).

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A new Management's Discussion and Analysis for our fiscal year ended December 31, 2015, fiscal quarter ended on March 31, 2015, fiscal quarter ended on June 30, 2015 and fiscal quarter ended on September 30, 2015 (including comparisons to the corresponding quarterly and year-to-date periods in 2014).



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Unaudited condensed financial information for our fiscal quarters ended March 31, 2014 and 2015, the fiscal quarters ended June 30, 2014 and 2015 and the fiscal quarters ended September 30, 2014 and 2015. The unaudited condensed financial information for the periods in fiscal year 2014 has been restated.



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Footnote disclosure to the quarterly financial information with respect to our fiscal quarters ended March 31, 2014 and 2015, fiscal quarters ended June 30, 2014 and 2015 and fiscal quarters ended September 30, 2014 and 2015. The footnote disclosures for the fiscal quarters in 2014 have been restated.

        We have corrected the errors listed above and amended or restated certain financial information in this Form 10-K as of and for the periods indicated (collectively, the "Applicable Periods"), as noted above. In addition, the discussion of our financial results in "Part II—Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations" in this Form 10-K has been updated to reflect changes in our three reportable segments, which were, prior to January 2015, Product Solutions, Nuclear Services and Energy Services, and are now Mechanical Solutions, Electrical Solutions and Services.

        We believe that presenting all of the amended and restated information for the Applicable Periods in this Form 10-K allows investors and others to review all pertinent data in a single presentation. We have not filed and do not intend to file (i) amendments to any of our previously filed Annual Reports on Form 10-K or Quarterly Reports on Form 10-Q for the periods affected by the restatements of our financial statements or (ii) Quarterly Reports on Form 10-Q for the three quarterly periods ended March 31, 2015, June 30, 2015 and September 30, 2015. Accordingly, investors and others should rely only on the financial information and other disclosures regarding the Applicable Periods in this Form 10-K and in future filings with the SEC (as applicable), and not on any previously issued or filed reports, earnings releases or similar communications relating to these periods.

Subsequent Events

        Subsequent to December 31, 2015, we undertook several initiatives designed to restructure our operations, lower our operating costs, enhance our liquidity and reduce indebtedness.

        In October 2015, we determined that Braden Europe required a larger facility because of strong demand and the need for additional workspace. Accordingly, in October 2016 Braden Europe leased another facility in Heerlen, Netherlands, which is approximately twice the size of the prior facility, and began to market the sale of its prior facility.

        As part of our overall strategy to focus Mechanical Solutions on engineering and project execution while reducing overhead, in May 2016, we began the process of selling the Braden Mexico manufacturing facility. The Braden Mexico facility is an approximately 150,000 square foot manufacturing facility for fabrication of equipment for utility-scale natural gas turbines. In the fourth quarter of 2016, we ceased manufacturing operations at the Braden Mexico facility. However, we will continue to maintain an office in Mexico to support Braden's outsourcing activities and sales in Mexico. The manufacturing that had historically been performed at Braden Mexico will be consolidated into our global network of outsource manufacturing partners.

        In May 2016, CFI vacated under-utilized space in Oxford, Massachusetts at the end of the lease term. Personnel and some equipment were relocated to CFI's Auburn, Massachusetts facility.

        On July 29, 2016, we sold the stock of TOG Holdings, Inc., our wholly-owned subsidiary, for $6 million in cash, subject to customary post-closing working capital adjustments, an escrow withholding

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of $0.8 million and disposition expenses. We used the net proceeds of $4.8 million from the sale of TOG Holdings, Inc. to reduce indebtedness. In addition, as a result of the sale, we no longer have liability associated with TOG Holdings, Inc.'s leased property.

        In August 2016, we retained an investment banking firm to explore the refinancing of our existing Revolving Credit Facility. Following the finalization of the restated 2015 and prior period financial statements, the investment banking firm developed and circulated a confidential information memorandum to potential lenders in February 2017.

        In September 2016, Braden's Tulsa operations began updating and modernizing their filter manufacturing and consolidated under-utilized warehouse and office space within the existing property. Braden Tulsa's Mingo Road footprint was reduced in September 2016 by approximately 35,000 square feet, from approximately 84,000 square feet to approximately 49,900 square feet. During that time, we also ceased operations at our 105,000 square foot Koontz-Wagner Custom Controls Holdings, LLC ("Koontz-Wagner") factory located in Chattanooga, Tennessee. Koontz-Wagner will continue its ongoing operations at other locations.

        In December 2016, we completed a $14.8 million sale-leaseback transaction for our facilities in Franklin, Indiana, Auburn, Massachusetts and Houston, Texas, wherein we simultaneously sold and entered into 10-year leases at the three facilities. The net cash received of $12.2 million was used to reduce debt. The lease for our facility in Franklin, Indiana was assumed by the purchaser of Hetsco in January 2017.

        In January 2017, we sold the stock of Hetsco for approximately $23.2 million in cash, inclusive of working capital adjustments. After transaction costs and an escrow withholding of $1.5 million, the net proceeds of $20.6 million were used to reduce debt. Reported as part of our Services segment, Hetsco provided brazed aluminum heat exchanger repair and maintenance and safety services to the industrial gas, liquefied natural gas and petrochemical industries. Following the sale of Hetsco, we no longer engage in these services, and no longer maintain intellectual property relating to the Hetsco trade name or brand. Unless otherwise specified, information contained in this report is as of December 31, 2015 and does not reflect the sale of Hetsco.

        In February 2017, the Board approved a decrease to the cash compensation paid to directors from approximately $97,000 to approximately $67,000, which was accomplished by a decrease in the cash annual retainer, eliminating per-meeting fees for all directors, and decreasing additional compensation for service as the chair of one of the committees. The revised compensation arrangement assumes that the actual board calendar is substantially similar to the currently scheduled board calendar. Although no equity compensation was granted to directors in 2016 or in 2017 through the filing of this Form 10-K, equity compensation will be granted after the filing of this report to reflect time served on the Board in 2016 and through the filing of this Form 10-K. Future equity compensation for Board service will be in line with the Board's existing equity compensation structure.

Other Significant Events

        In August of 2015, we were informed that one of our largest customers, Southern Nuclear Operating Company ("Southern Nuclear") would not extend the term of its existing maintenance and modification contract with our Services segment. We recognized $89.0 million in revenues in 2015 from Southern Nuclear, of which $44.1 million was from this maintenance and modification contract. Additionally, we completed a construction support project for Tennessee Valley Authority ("TVA"), another of our largest customers, related to a nuclear reactor in 2015 that will not be recurring in 2016. Revenues recognized in 2015 related to this project were $92.8 million.

        In an effort to improve our operational efficiency as well as respond to reductions in maintenance and modification and project work, our work force, including full-time, part-time and craft labor

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employees, was reduced by more than 1,000 positions during the two year period ending December 31, 2016.

        For additional information, see "Note 17—Major Customers and Concentration of Credit Risk" and "Note 21—Subsequent Events" to our consolidated financial statements.

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SPECIAL NOTE

        This Form 10-K speaks only as of December 31, 2015. The descriptions of our business and the industry and markets in which we operate are as of December 31, 2015. Except as otherwise specifically stated, it has not been updated to reflect the events described above, nor any other events occurring subsequent to December 31, 2015.

        Although there are a limited number of instances in this report where we deemed it appropriate to specifically reference certain events that occurred after December 31, 2015, this report does not contain all material information relating to our 2016 or 2017 fiscal periods.

        Accordingly, the disclosure in this report does not contain complete and updated information regarding our company and operations as of the date of filing this report. Information contained in this report will be updated and supplemented in reports the Company intends to file with the SEC for periods subsequent to December 31, 2015.

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Cautionary Note Regarding Forward-Looking Statements

        This Form 10-K and its exhibits contain or incorporate by reference various forward-looking statements that express a belief, expectation or intention or are otherwise not statements of historical fact. Forward-looking statements generally use forward-looking words, such as "may," "will," "could," "project," "believe," "anticipate," "expect," "estimate," "continue," "potential," "plan," "forecast" and other words that convey the uncertainty of future events or outcomes. These forward-looking statements are not guarantees of our future performance and involve risks, uncertainties, estimates and assumptions that are difficult to predict. Therefore, our actual outcomes and results may differ materially from those expressed in these forward-looking statements. Investors should not place undue reliance on any of these forward-looking statements. Except as required by law, we undertake no obligation to further update any such statement, or the risk factors described in "Part I—Item 1A. Risk Factors," to reflect new information, the occurrence of future events or circumstances or otherwise.

        The forward-looking statements in this filing do not constitute guarantees or promises of future performance. The following important factors could cause actual outcomes and results to differ materially from those expressed in our forward-looking statements:

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our ability to service our existing debt and secure new sources of debt financing on terms acceptable to us;



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our ability to generate sufficient cash resources to continue funding operations;



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audit, investigation, legal and expert services regarding the restatement and audit of our historical financial results and recent legal proceedings;



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pending securities class action litigation and derivative action;



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the SEC Division of Enforcement's pending formal investigation into possible securities law violations by the Company;



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our material weaknesses in internal control over financial reporting and our ability to maintain effective controls over financial reporting in the future;



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changes in our senior management, financial reporting and accounting teams;



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our ability to timely prepare and file our periodic reports;



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our ability to comply with certain financial covenants of our debt obligations;



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business strategies;



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operating and growth initiatives and opportunities;



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competitive position;



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market outlook and trends in our industry;



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contract backlog and related amounts to be recognized as revenue;



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expected financial condition;



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future cash flows;



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expected results of operations;



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future capital and other expenditures;



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availability of raw materials and inventories;



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plans and objectives of management;

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future exposure to currency devaluations or exchange rate fluctuations;



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future income tax payments and utilization of net operating losses and foreign tax credit carryforwards;



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future compliance with orders and agreements with regulatory agencies;



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expected outcomes of legal or regulatory proceedings and their expected effects on our results of operations; and



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any other statements regarding future growth, future cash needs, future operations, business plans and future financial results.

        These forward-looking statements represent our intentions, plans, expectations, assumptions and beliefs about future events and are subject to risks, uncertainties and other factors, including unpredictable or unanticipated factors that we have not discussed in this Form 10-K. Many of those factors are outside our control and could cause actual results to differ materially from the results expressed or implied by the forward-looking statements.

        In light of these risks, uncertainties and assumptions, the events described in the forward-looking statements might not occur or might occur to a different extent or at a different time than we have described. Investors should consider the areas of risk and uncertainty described above, as well as those discussed below under "Part I—Item 1A. Risk Factors." Except as may be required by applicable law, we undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, and we caution investors not to rely upon them unduly.

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Part I

Item 1.    Business.

Special Note

        As described above under the heading "Explanatory Note—Subsequent Events," this Form 10-K speaks only as of December 31, 2015. Except as otherwise specifically stated, it has not been updated to reflect the events described under such heading, nor any other events occurring subsequent to December 31, 2015. Although there are a limited number of instances in this report where we deemed it appropriate to specifically reference certain events that occurred after December 31, 2015, this report does not contain all material information relating to our 2016 or 2017 fiscal periods. For information about the impact of certain business divestitures that occurred after the date of this report, see "Explanatory Note—Subsequent Events" and "Note 21—Subsequent Events" to our consolidated financial statements. For additional information about our segments, see "Note 1—Business and Organization" and "Note 19—Segment Information" to our consolidated financial statements.

Overview

        Global Power and its wholly owned subsidiaries are comprehensive providers of custom-engineered solutions and modification and maintenance services for customers in the energy and industrial markets. As of December 31, 2015, customers were located inside and outside the United States (the "U.S."), in both developed and emerging economies.

        We design, engineer and manufacture a comprehensive range of gas and steam turbine products, control houses and generator enclosures primarily used to enhance the efficiency and facilitate the operation of power plants and other industrial, energy and power-related applications. We believe our customer relationships built over many years, the reliability and performance of our solutions, our ability to deliver complex, engineered solutions, our advanced engineering and execution capabilities, our worldwide manufacturing base and our leading installed base of equipment throughout the world have supported key parts of our business.

        We provide on-site maintenance and modification services, outage management and craft labor, facility upgrade services, specialty coatings and roofing, asbestos and lead abatement, specialty aluminum welding, repair and maintenance of brazed aluminum heat exchangers and other industrial and safety services to nuclear, fossil-fuel, industrial gas and liquefied natural gas, petrochemical and other industrial operations in the U.S. Subsequent to the date of this report, we sold our Hetsco business, which engaged in certain of these services. For additional information, see "Explanatory Note—Subsequent Events." We have the capability to combine our resources to offer solutions for aftermarket repair applications for the North American gas turbine power generation, petrochemical and cogeneration markets.

        Including our predecessor entities, we have over 50 years of experience providing custom-engineered products that are critical for the operation of power plants and more than 32 years of experience providing complex outage shutdown services to operators of nuclear power plants and other industrial maintenance services.

        We use the Braden, Consolidated Fabricators, Williams, Koontz-Wagner, IBI Power, TOG Manufacturing and Hetsco trade names and the logos for each of those businesses and for Global Power. These trade names and logos are the property of Global Power. Product names and company programs appearing throughout this Form 10-K are trademarks of Global Power. This Form 10-K also may refer to brand names, trademarks, service marks and trade names of other companies and organizations, and these brand names, trademarks, service marks and trade names are the property of their respective owners. Subsequent to the date of this report, we sold two of our legal entities that

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maintained some of the intellectual property assets described. For additional information, see "Explanatory Note—Subsequent Events."

        Global Power was incorporated in 2001 under the laws of the State of Delaware and became the successor to GEEG Holdings, LLC, which was formed as a Delaware limited liability company in 1998. We and all of our U.S. subsidiaries filed voluntary petitions for relief under Chapter 11 of Title 11 of the United States Bankruptcy Code on September 28, 2006 and successfully emerged from bankruptcy pursuant to an approved Plan of Reorganization on January 22, 2008. Upon emergence, we issued 5,266,885 shares of our new common stock to pre-petition equity holders in exchange for stock held before the bankruptcy. On that same date, pursuant to a rights offering, a private placement and related backstop and our Management Incentive Co-Investment Plan, we issued an additional 9,589,138 shares of our new common stock in exchange for $72.5 million in net proceeds. The applicable price of our common stock in the rights offering was $7.65 per share. As part of the plan, we also entered into a $150.0 million credit facility (the "Previous Credit Facility"). In June 2011, we received a court order for final decree closing the Chapter 11 Filing.

Segments

        In determining our reportable segments in accordance with Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") 280—Segment Reporting ("ASC 280"), we concluded that, until January 2015, we operated in three reportable segments: Product Solutions, Nuclear Services and Energy Services.

        In January 2015, we announced the integration of our four operating segments (hereinafter referred to as "operating units") into two reportable segments, structured around products and services, as part of our ongoing streamlining efforts. However, in re-evaluating our reportable segments as of the end of 2015, we determined that, while we continue to believe the projected long-term economic similarities between our Mechanical Solutions and Electrical Solutions operating units support aggregation into a single reportable segment, there has been disparity in the historical operating results to date between those two operating units. As such, we believe it is currently more meaningful to the reader to report segment information on those operating units separately and, therefore, concluded we have three reportable segments: Mechanical Solutions, Electrical Solutions and Services. The segment information for prior periods has been adjusted retrospectively to conform to the current period presentation. Our three reportable segments have operated as described below.

Mechanical Solutions Segment

        This reportable segment is comprised of Braden Manufacturing, LLC ("Braden"), Braden Europe, B.V. ("Braden Europe"), Consolidated Fabricators ("CFI") and TOG Manufacturing Company, Inc. ("TOG"). Mechanical Solutions focuses on filter houses, inlet and exhaust systems, diverter dampers, selective catalytic reduction systems (commonly referred to as "SCR"), auxiliary control skids and enclosures, expansion joints, air filtration elements, retrofit and upgrade solutions and specialty machined parts. Our Mechanical Solutions segment designs, engineers, manufactures, installs, commissions and services for the worldwide power generation markets. Our principal customers are utility-scale gas turbine original equipment manufacturers ("OEMs"), Owner/Operators, Electric Utilities and engineering, procurement and contractor ("EPC") firms. We also provide precision parts, replacement parts, filter elements and aftermarket retrofit equipment to both OEMs and end users. Our solutions are custom-engineered to meet project and customer-specific requirements.

        Our technical and engineering capabilities enable us to design and manufacture a broad range of power plant and other industrial equipment to meet each customer's specific performance

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requirements. We provide the following comprehensive range of solutions critical to the operation of power plants:

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Inlet Systems.  Inlet systems are comprised of filter houses and air intake ducts that condition the air entering the turbine or engine (pulse-type or barrier filtration, temperature and moisture control, flow distribution and pressure drop optimization) and provide acoustical treatment for noise generated by the gas turbine air flow.



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Exhaust Systems.  Exhaust systems, including diffusers, plenums, ducts and stacks, expansion joints and diverter dampers, direct the hot exhaust from the turbine, with silencing provided as well, to the atmosphere in the case of simple cycle operation or into a heat recovery steam generator ("HRSG") when the power plant is operated as a combined cycle facility.



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Selective Catalytic Reduction Systems.  SCR systems are used in simple cycle gas turbine facilities and are focused on removing oxides of nitrogen and carbon and other volatiles from exhaust gas.



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Custom-Engineered Equipment Skids.  Custom-engineered, pre-packaged equipment skids, either enclosed or open to the elements, with or without HVAC, can be used for a wide variety of industrial equipment applications, allowing faster and lower cost equipment installation at a customer's industrial site.

        The contracts under which we sell our products are typically fixed-price contracts, most of which are "lump sum bid" contracts. Under lump sum bid contracts, we bid against other suppliers based on customer or project specifications. Many of our project destinations are outside the U.S.

        Historically, Mechanical Solutions fabricated equipment through a combination of in-house manufacturing at our own facilities in the U.S. and Mexico and outsourced manufacturing in other countries around the world. However, beginning in 2016, all of our Mechanical Solutions businesses, except CFI, began exclusively using outsourced manufacturing facilities. Our network of high-quality international manufacturing partners, located in more than 20 countries, allows us to manufacture equipment worldwide and maintain a competitive cost structure. Outsourcing our gas turbine auxiliary product manufacturing enables us to meet increasing demand without internal manufacturing capacity limitations, reduces our capital expenditure requirements and allows us to respond to the particular sourcing initiatives of our customers, whether those initiatives call for global sourcing or for localized supply content. Our employees work closely with our international manufacturing partners to supervise the fabrication of our products at their facilities to ensure high levels of quality and workmanship. While we generally have proven, long-term relationships with our subcontractors, we also routinely search for additional subcontractors to enhance our ability to manufacture equipment at the lowest cost while maintaining high-quality standards and on-time delivery.

        We maintain agreements with key third-party fabricators, many of which require OEM approval. We conduct regular quality audits of our fabricators and, in some cases, maintain staff on-site. Subcontractors can sometimes take several years to qualify to meet our requirements and international standards, including OEM audit and approval.

        For information about the impact of certain business divestitures that occurred after the date of this report, see "Explanatory Note—Subsequent Events."

Electrical Solutions Segment

        This reportable segment is comprised of Koontz-Wagner, including, following its merger with and into Koontz-Wagner, the former operations of IBI Power and the portion of the Energy Packaged Power Solutions business that we acquired in the first quarter of 2015 from Siemens Industry, Inc. ("Siemens" and the "Siemens' eHouse manufacturing operations"). Electrical Solutions focuses on custom engineering and manufacturing of integrated control house systems, engine generator packages

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and enclosures, industrial tanks and custom-engineered equipment skids for the energy, oil and gas, digital data storage and electrical industries. Our principal customers are turbine and reciprocating engine OEMs, switchgear and drive OEMs, backup and distributed power providers, Owner/Operators (including oil and gas midstream and downstream), electric utilities and EPC firms. Our solutions are custom-engineered to meet customer-specific requirements.

        Our technical and engineering capabilities enable us to design and manufacture the following products:

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Custom-Engineered Equipment Skids.  Custom-engineered, pre-packaged electrical equipment skids, that can be used for a wide variety of industrial equipment applications, allowing faster and lower cost equipment installation at a customer's industrial site.



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Packaged Control Houses ("PCH").  PCH are custom-engineered and designed, fully integrated fabricated metal buildings that house electrical power and control equipment, namely switchgear, motor control centers, variable frequency drives and utilities for the power generation, oil and gas processing and refining (midstream and downstream), industrial, utility and renewables market segments.



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Generator Enclosure Packages and Sub-Base Tanks.  Custom-engineered and designed generator enclosure packages are fabricated metal buildings that are often sound attenuated and designed to meet site certification, visual, environmental, functional, size and sound requirements. The enclosure packages are used to house both prime and standby diesel/natural gas generators that range from 30 KW to 4,000 KW in a wide range of environments, from desert to arctic, in a fully integrated package, including all necessary systems for an operating generator package. Also offered are sub-base and stand-alone tanks meeting the safety standards of UL LLC, an American safety consulting and certification company, including UL LLC listings UL 142, UL 2085 and ULC-S601.

        The contracts under which we sell our products are fixed-price contracts, most of which are "lump sum bid" contracts. Under lump sum bid contracts, we bid against other suppliers based on customer or project specifications. Our project destinations are primarily in the U.S.

        Electrical Solutions continues to leverage its geographically broad North American manufacturing footprint to provide control houses, custom-engineered equipment skids and generator packages throughout the western hemisphere.

Services Segment

        This reportable segment is comprised of Hetsco and Williams Industrial Services, LLC ("WIS" and, collectively with Williams Plant Services, LLC and Williams Specialty Services, LLC, the "Williams business"). Our Services segment provides a comprehensive range of modification, maintenance and construction support services for nuclear power plants and a wide range of utilities and industrial customers, including fossil fuel, industrial gas, liquified natural gas, petrochemical and other industrial operations. We provide these services primarily on a direct hire basis, where we manage and perform the work ourselves, but we also act in a general contracting capacity where we manage multiple subcontractors and, in other cases, we are retained as a subcontractor on the project. We primarily service U.S.-based plants and perform tasks designed to improve or sustain the operating efficiencies. As of December 31, 2015, a portion of our Services segment generated revenue from offshore repairs of installed aluminum heat exchangers, primarily in the Middle East, Africa and Asia. The services provided by our Services segment are designed to improve or sustain operating efficiencies and extend the useful lives of process equipment. We provide these services both on a constant presence basis and for discrete projects.

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        Our Services segment offerings include the following:

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Nuclear Power Plant Modification, Maintenance and Construction.  We perform a full range of critical services for the nuclear facility market, including capital project, facility upgrades, routine modification and maintenance work.



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Fossil Fuel, Industrial Gas, Liquefied Natural Gas and Petrochemical Operations Modification and Construction.  We provide routine maintenance, repair and capital project services designed to extend plant life cycles.



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Specialty Welding Services.  We provide the following specialty services to manufacturers and users of aluminum heat exchangers:



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Brazed Aluminum Heat Exchanger Repair, Maintenance and Safety Services. We routinely perform on-site repairs and associated mechanical and safety support services to users of aluminum heat exchangers used in air separation and gas or liquid processing applications.



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Fabrication. We have the demonstrated capability to fabricate and assemble complete process systems into integrated solutions for the air and gas processing industries.



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Industrial Painting and Coatings.  We perform cleaning, surface preparation, coatings application, quality control and inspection testing on major coating projects.



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Insulation.  We provide a variety of industrial insulation services, primarily in power generation installations.



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Asbestos and Lead Abatement.  We provide abatement services for the removal of asbestos and heavy metal based coatings such as lead paint. We do not take ownership of hazardous materials and do not assume responsibility for the liability associated with the materials other than for our actions meeting applicable statutory and regulatory requirements.



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Roofing Systems.  We replace, repair and upgrade industrial facility roofing systems, primarily at pulp and paper manufacturing facilities and nuclear power plant locations.

        We provide these services throughout the U.S. with experienced craft laborers who are directed and managed by an experienced team of supervisors and project managers across our network. Our flexible staffing and equipment model enables us to meet seasonal and outage demand without being restricted by internal capacity limitations, thereby minimizing our fixed costs.

        As of December 31, 2015, our Services segment contracted for approximately 78% of the services it provides on a cost-plus basis under contracts that provide for reimbursement of costs incurred plus an amount of profit in the form of a mark-up. It contracted for approximately 22% of the services it provides on a fixed-price basis.

        We bid against other contractors based on customer specifications. Fixed-price contracts present certain inherent risks, including the possibility of ambiguities in the specifications received, problems with new technologies and economic and other changes that may occur over the contract period. Alternatively, because of efficiencies that may be realized during the contract term, fixed-price contracts may offer greater profit potential than cost-plus contracts.

        For information about the impact of business divestitures that occurred after the date of this report, see "Explanatory Note—Subsequent Events."

        For additional information about our segments, please refer to "Note 1—Business and Organization" and "Note 19—Segment Information" to our consolidated financial statements.

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Market Overview

        Gas Turbine Power Generation and Cogeneration Market.    All gas turbine power plants combine a gas turbine with a generator to produce electricity. In a simple cycle gas turbine plant, the hot exhaust coming out of the gas turbine is vented to the atmosphere through an exhaust stack. In a combined cycle plant, the hot exhaust coming out of the gas turbine is fed into a HRSG. The HRSG captures much of the heat from the gas turbine exhaust to generate steam, which in turn is used to power a steam turbine and generate more electricity before the exhaust is vented into the atmosphere. We manufacture products that are critical components of both simple cycle and combined cycle plants, including packaged control houses, cabinets and skids, or "balance of plant hardware," filter houses, inlet and exhaust systems, SCRs and turbine and generator components. We also engineer and manufacture specialized diverter dampers that are used in some combined cycle plants between the gas turbine and the HRSG.

        The advantages of power generation plants utilizing gas turbine technologies versus certain other technologies include:

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lower construction costs;



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shorter construction periods;



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improved operating efficiency;



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lower emissions (NOx, CO₂ and other pollutants);



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flexibility to expand plant capacity;



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smaller geographical footprint; and



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rapid start-up and shutdown time.

        Oil and Gas Market.    The American Petroleum Institute defines the oil and gas industry as having three segments: Exploration and Production (also known as "upstream"), Transportation (also known as "midstream"), and Refining/Constituent Chemical Processing (also known as "downstream"). We design, manufacture, integrate and package free standing metal interlocking panel buildings that house control systems, switch gear and generators. Our products are deployed globally into the upstream, midstream and downstream oil and gas markets. We produce specialty engineered products, such as flow control and customized skids, while our focus on lean manufacturing processes also allows us to perform serial production for large projects. We also provide installation, facility upgrade, repair and maintenance services for midstream and downstream operations such as pipeline terminals, compressor or pumping stations and storage operations, refineries and petrochemical processing facilities and liquefied natural gas ("LNG") operations.

        We believe demand for our products and services are driven by strength in the oil and gas production industry which is subject to volatility in energy prices and demand.

        The North American oil and gas market has benefited in recent years from advanced extraction methods such as hydraulic fracturing which has led to pipeline expansions as well as the development of petrochemical facilities and gas separation and liquefaction projects. However, the price of oil began to decline in mid-2014 and dropped to a 14-year low in January 2016. The U.S. Energy Information Administration ("EIA") reports that U.S. crude oil production averaged an estimated 8.9 million barrels per day in 2016 and is forecasted to average 9.0 million barrels per day in 2017 and increase to 9.5 million barrels per day in 2018. The EIA also reports that total U.S. natural gas consumption averaged 75.1 billion cubic feet per day in 2016 and forecasts consumption of 74.7 billion cubic feet per day in 2017 and 76.7 billion cubic feet per day in 2018.

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        Industrial Services Industry and Market.    The U.S. industrial services industry is a multi-billion dollar industry, broadly defined as routine modification, maintenance and technical services provided to industrial facilities ranging from manufacturing facilities to power generation plants. The industry continues to benefit from a shift towards outsourcing as plant operators seek to alleviate financial constraints, reduce labor costs, increase labor utilization and productivity and eliminate operational redundancies.

        We expect that power industry demand for these services will be driven by the following factors in the future:

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Aging Infrastructure Increases Demand for Plant Maintenance.  According to the EIA, more than half of the electrical generating capacity in the U.S. was placed in service before 1990. Coupled with the relatively limited number of large scale power generation facilities being constructed in the U.S., the efforts to maintain older plants of all types and take advantage of newer and more efficient technologies at existing sites provide opportunities for companies providing these services. The low price of natural gas is driving demand for new and replacement generation capacity toward combined cycle gas powered plants. With the low price of natural gas, it is more economical to run the plants more often, driving the demand for conversions of these plants to combined cycle technology. Further, approximately 90 nuclear reactors that have been in operation in the U.S. for more than 30 years require extensive ongoing engineering and maintenance services to support operations and improve performance. Nuclear power plants in the U.S. are subject to a rigorous program of U.S. Nuclear Regulatory Commission (the "NRC") oversight, inspection, preventive and corrective maintenance, equipment replacement and equipment testing. Nuclear power plants are required by the NRC to go offline to refuel at intervals of no more than 24 months and to perform condition monitoring and preventive maintenance during every refueling outage. Initially, commercial nuclear power plants in the U.S. were licensed to operate for 40 years, reflecting the amortization period generally used by electric utility companies for large capital investments. In 2000, the NRC issued the first license renewal for a nuclear power plant, extending its license for an additional 20 years. As of December 31, 2016, the NRC had extended the licenses of approximately 85 reactors. In all, about 90 reactors are expected to operate for 60 years, with owners undertaking an increase in modification, maintenance and construction capital projects to upgrade these facilities. Decommissioning work on retired nuclear reactors also provides future opportunities for growth.



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International Growth.  Our Mechanical Solutions businesses have seen demand from the Middle East, Mexico, South Korea and Southeast Asia. Large units (sometimes referred to as jumbo units) represent approximately two-thirds of the new capacity demand. Small units have also been in demand with portable power needs and remote/island power needs. The overall number of projects in the Middle East is continuing to rise, including plant upgrades and conversion from simple cycle to combined cycle technology. Among the factors driving this increase in gas turbines is operational flexibility, short construction time and combined-cycle gas turbine technology, developed by the major OEMs, that exceeds 60% efficiency.



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North America Infrastructure Growth.  A major factor in this expansion is the widespread development of shale gas. New production and transmission and distribution infrastructure has been developed to increase production, and reduce transportation bottlenecks, bringing more gas to key markets. Shale gas value is transitioning from upstream to downstream users, including petrochemical facilities and power generation assets.



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New Nuclear Reactor Construction.  As of December 31, 2015, there were five new nuclear reactors at three U.S. sites in various stages of construction and commissioning. Our Services segment was involved in each of these projects at varying levels. We have had a significant role in the recent completion of Watts Bar Unit 2 and we have several contracts currently at Vogtle

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Units 3 and 4 and one at VC Summer. We are one of the few contractors with a qualified and audited Nuclear Quality Assurance-1 ("NQA-1") Program, which is required to perform contract services at the new build reactors.

        In addition, we are one of a limited number of companies qualified to perform comprehensive services in U.S. nuclear power plants under rules issued by the NRC. Under these rules, owners of nuclear facilities must qualify contractors by requiring the contractors to demonstrate that they will comply with NRC regulations on quality assurance, reporting of safety issues, security and control of personnel access and conduct. On the majority of our maintenance and project work, we directly hire the labor and provide the management and supervision to perform the work directly for the owner. In some cases, we act as a general contractor and subcontract portions of the work or, alternatively, subcontract our services to full-scope EPC firms or general contractor firms. We maintain good relationships with the utilities, the EPC firms, the general contractor firms and relevant engineering firms.

        Industrial Gas and Natural Gas Markets.    Industrial gases are used in a variety of end-markets. The global industrial gas market is projected to grow, driven by emerging markets and energy demand. In addition, natural gas demand is expected to grow, particularly from feedstock chemical manufacturers, liquefied natural gas processors and other companies in the refining and industrial gas industries that use natural gas as a feedstock. Subsequent to the date of this report, we sold our Hetsco business. Following that sale, we no longer engage in these activities. See "Explanatory Note—Subsequent Events."

        Standby and Distributed Power Generation.    Unlike central station generation, standby and distributed power generation equipment can sit on either side of the utility meter and may be owned by a utility, a customer or a third party. Energy demand response and transmission and distribution infrastructure limits are driving investment into this space, along with developing industries with high power demand and sensitivity to power supply instability. Example industries include datacenters, medical centers, universities and remotely located industrial loads. Datacenters represent a large and growing market for the Koontz-Wagner brand. The category previously consisted of small-scale utility-owned diesel or gas engine generators strategically located to support distributed system operation. The category is moving toward larger (greater than 1,000 Kilowatts ("KW")) diesel engine generator systems and expanding into alternative energy assets. Building our share in this market also allows Koontz-Wagner to extend our offerings into adjacent markets through the relationships we have with engine OEMs.

Business Strategy

        We plan to continue leveraging our brands (Braden, Koontz-Wagner and Williams). As part of our annual strategic planning process, each of our businesses develops growth, productivity improvement and cost reduction initiatives. Each unit has specific initiatives with associated targets for revenue and cash flow.

        We pursue revenue and margin enhancement opportunities, including streamlining and consolidating operations, utilizing state of the art estimating and engineering technologies, deploying rigorous project management techniques, initiating various process improvement projects and employing experienced industry-recognized sales professionals.

        We are also focused on increasing our margins through the application of lean manufacturing processes and continuous improvement in our operations. We are committed to delivering quality products and services on time for our customers. In addition to pursuing better execution on the shop floor and at our project sites, we have streamlined our selling and administrative functions to better serve our customers. We have implemented a lean manufacturing processes structure to be closer to our customers and adjust faster to changing market conditions.

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        We continue to add employees to expand our range of expertise and depth of knowledge. Our objective is to foster a workplace that will attract top people in our industry and challenge them with meaningful projects, reward them for their performance and advance their careers.

Customers, Marketing and Seasonality

        Mechanical Solutions.    Our Mechanical Solutions segment customers are turbine and reciprocating engine OEMs, Owner/Operators, electric utilities and EPC firms. The end users of most of our products sold to OEMs and EPC firms are owners and operators of power plants. We market our products and services globally through a sales network consisting of employees and independent representatives in various geographic areas, including the Americas, Europe, Asia and the Middle East. Our Mechanical Solutions segment is not materially impacted by seasonality and is more impacted by the cyclicality of, and fluctuations in, the U.S. and international economies that we serve.

        Electrical Solutions.    Our Electrical Solutions segment customers are turbine and reciprocating engine OEMs, switchgear and drive OEMs, backup and distributed power providers, Owner/Operators (including oil and gas midstream and downstream), electric utilities and EPC firms. The end users of most of our products sold to OEMs and EPC firms are owners and operators of power plants, process plants, refineries, pipelines, data centers and other industrial and commercial facilities such as wastewater treatment plants and hospitals. We focus our sales and marketing efforts on OEMs and EPC firms engaged by end users of our products, including the developers and operators of power plants, industrial and commercial facilities and data centers. Our Electrical Solutions segment is not materially impacted by seasonality and is more impacted by the cyclicality of, and fluctuations in, the U.S. and international economies that we serve.

        Services.    Our Services segment customers include major private and government-owned utilities throughout the U.S., as well as leaders in the U.S. paper and industrial sectors. We market our services using dedicated sales and marketing personnel as well as our experienced on-site operations personnel. We use our safety and service track record with long-term renewable contracts to expand our services and supplement the existing contracts with small-to-medium sized capital projects. Our sales initiatives directly seek to apply operational strengths to specific facilities within the targeted industries and customers throughout the U.S. Our Services segment is materially impacted by seasonality, resulting in fluctuations in revenue and gross profit during our fiscal year. Generally, the second and fourth quarters are the peak periods for our Services segment, as those are periods of low electricity demand during which our customers schedule planned outages.

        We depend on a relatively small number of customers for a significant portion of our revenue, and the loss of any of those customers would have a material adverse effect on our business. For a listing of our major customers, see "Note 17—Major Customers and Concentration of Credit Risk" to our consolidated financial statements.

Engineering, Design and Maintenance Capabilities

        Mechanical Solutions and Electrical Solutions.    We provide original design, retrofit and upgrade engineering, installation, technical services and after-sales maintenance and repair of our products. Our products are custom-designed and engineered to meet the specifications of our customers, including local, state, federal and international code requirements and certifications. Our engineers and designers use engineering and drafting programs such as AutoCAD®, Inventor® 3D modeling software, Solidworks® and other analytics applications.

        Services.    Through our NQA-1 Program and other programs, we provide training, certifications and ongoing safety monitoring to all of our Services employees. We are one of a limited number of companies qualified to work anywhere in a U.S. nuclear facility and have been one of the leading

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providers of coatings at U.S. nuclear facilities for almost 40 years. In addition, we are one of a few contractors with the qualified and audited NQA-1 Program that is required to perform contract services at the new build reactors. For over 13 years, we have maintained a safety record in the top quartile of the industry, benefiting both us and our customers. We also maintain a broad range of professional certifications and memberships in national organizations relevant to the performance of many of the specialized services we provide.

Materials and Suppliers

        The majority of materials we purchase are for our Mechanical Solutions and Electrical Solutions segments. The principal materials for our products are carbon steel plate, sheet steel, stainless steel products and other structural shapes, wire, cable and insulation. We obtain these materials from a number of U.S. and international suppliers. The markets for most of the materials we use are served by a large number of suppliers, and we believe that we can obtain the materials we require from more than one supplier.

Competition

        Mechanical Solutions and Electrical Solutions.    We compete with a number of domestic and international companies. Some of our competitors are significantly larger than us and have significantly greater financial resources. Other competitors are small, typically privately held companies that are often less sensitive to project risk and onerous contract terms. The competitive landscape is defined not only by the specific product offering, but also geographic delivery footprint, total delivery cycle time (from order to title transfer), reputation, build quality, ability to design products to meet each customer's unique specifications (including design elements and manufacturing methods impacting the total cost of ownership, designed ease of site installation and landed equipment footprint), and total project price. A project's competiveness can be influenced by any one or a number of these conditions.

        Services.    Our competitors vary depending on plant geography and scope of services to be rendered. Several national vendors, which are significantly larger and have significantly greater financial resources than we do, will often compete for larger maintenance and capital project opportunities that become available. These include, among others, Day & Zimmerman and Chicago Bridge & Iron Company N.V. Additionally, smaller vendors that operate on a regional basis often compete for smaller opportunities associated with open shop labor sources. We believe that the key competitive factors in the services we offer are reputation, safety, price, service, quality, breadth of service capabilities and the ability to identify and retain qualified personnel. We believe our project management capabilities, including service diversity, long-term customer relationships, safety record and performance, differentiate us from our competitors. We also believe that the fact that we maintain a presence at several of our customers' sites is a competitive advantage because it provides us with an intimate understanding of these facilities, which allows us to better identify our customers' service needs. Specific to our customers that operate nuclear power plants, the barriers to entry include requirement of NRC qualifications and safety standards.

        For information about the impact of business divestitures that occurred after the date of this report, see "Explanatory Note—Subsequent Events."

Employees

        As of December 31, 2015, we had 1,449 full- and part-time employees (excluding temporary staff and craft labor in our Services segment). Of those, 172 were employed at our facility in Mexico under a collective bargaining agreement, which is amended annually and expires April 21, 2017. Although we will continue to maintain an office in Mexico to support Braden's outsourcing activities and sales in Mexico, we ceased manufacturing operations at our Mexico facility in the fourth quarter of 2016. At

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our Koontz-Wagner business, there are 54 employees who are covered under a collective bargaining agreement. The number of employees in our Services segment fluctuates greatly, depending on the timing and requirements for craft labor. Many of the craft labor employees for our Services segment are contracted through various union agreements. As of December 31, 2015, there were 1,389 craft labor employees for our Services segment, of which 1,106 were under collective bargaining agreements. We believe that our relationships with our employees, both full-time and temporary, are satisfactory. We are not aware of any circumstances that are likely to result in a work stoppage at any of our facilities. Subsequent to the date of this report, we sold certain of our businesses and ceased operations at certain facilities, which resulted in a decrease in the number of our employees. For additional information, see "Explanatory Note—Subsequent Events."

Insurance

        We maintain insurance coverage for various aspects of our operations; however, we remain exposed to potential losses because we are subject to deductibles, coverage limits and self-insured retentions.

        Typically, our contracts require us to indemnify our customers for third-party injury, damage or loss arising from the performance of our services and provide for warranties for materials and workmanship. We may also be required to name the customer as an additional insured up to the limits of insurance available, or we may be required to purchase special insurance policies for specific customers or provide letters of credit in lieu of bonds to satisfy performance and financial guarantees on some projects.

        We maintain performance and payment bonding lines in order to support our business and, as of December 31, 2015, a revolving credit facility ("Revolving Credit Facility") that provided letters of credit. We require certain of our Mechanical Solutions segment subcontractors to indemnify us and name us as an additional insured for activities arising out of such subcontractors' work. We require the subcontractors that we use for our Services segment to indemnify us and our customers, and we also require them to name the Williams business or other subsidiaries as an additional insured for activities arising out of such subcontractors' work. We also require certain subcontractors to provide additional insurance policies, including surety bonds in favor of us, to secure such subcontractors' work or as required by contract. It is possible that our insurance and the additional insurance coverage provided by our subcontractors will not fully protect us against a valid claim or loss under the contracts with our customers.

Intellectual Property

        We use a variety of trademarks, proprietary technologies and other intellectual property in the ordinary course of business in our segments. We rely upon our pending and issued patents, registered and unregistered trademark rights, nondisclosure and confidentiality agreements with our employees, subcontractors, customers and others, and on various other security measures to protect our intellectual property. Several patents relating to exhaust systems will expire in 2017, a patent relating to a filter element clip will expire in 2027, a patent for an acoustic module enclosure door will expire in 2032 and a patent for an exhaust plenum for gas turbines will expire in 2033. We have patent applications pending for other products. We do not believe that any single patent or proprietary technology is material to our business, and we do not believe that our competitive position would be materially affected by competitors also using similar technologies and systems.

Compliance with Government Regulations

        We are subject to certain federal, state and local environmental, occupational health, nuclear regulatory, export and product safety laws applicable in the countries in which we operate. We also

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purchase materials and equipment from third-parties and engage subcontractors who are also subject to these laws and regulations.

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Environmental.  We are subject to extensive and changing environmental laws and regulations in the U.S. and in international jurisdictions where we do business. These laws and regulations relate primarily to air and water pollutants and the management and disposal of hazardous materials. We are exposed to potential liability for personal injury or property damage caused by any release, spill, exposure or other accident involving such pollutants, substances or hazardous materials.



•

Health and Safety Regulations.  We are subject to the requirements of the U.S. Occupational Safety and Health Act and comparable state and international laws. Regulations promulgated by these agencies require employers and independent contractors who perform construction services, including electrical and repair and maintenance, to implement work practices, medical surveillance systems and personnel protection programs in order to protect employees from workplace hazards and exposure to hazardous chemicals and materials. In recognition of the potential for accidents within various scopes of work, these agencies have enacted very strict and comprehensive safety regulations.



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NRC.  Owners of nuclear power plants are licensed to build, operate and maintain those plants by the NRC. Their license requires that they qualify their suppliers and contractors to ensure that the suppliers and contractors comply with NRC regulations. Our nuclear services business must demonstrate to its customers that we will comply with NRC regulations related to quality assurance, reporting of safety issues, security and control of personnel access and conduct.



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Other Regulatory Matters.  To the extent we export technical services, data and products outside of the U.S., we are subject to U.S. and international laws and regulations governing international trade and exports. These include, but are not limited to, the Foreign Corrupt Practices Act and the Export Administration Regulations and trade sanctions against embargoed countries, which are administered by the Office of Foreign Assets Control within the U.S.



•

Department of the Treasury.  A failure to comply with these laws and regulations could result in civil or criminal sanctions, including the imposition of fines, the denial of export privileges and suspension or debarment from participation in U.S. government contracts.

        While we believe that we operate safely and prudently and in material compliance with all environmental, occupational health, nuclear regulatory, export and product safety laws, there can be no assurance that accidents will not occur or that we will not incur substantial liability in connection with the operation of our business. We do not anticipate any material capital expenditures or material adverse effect on earnings or cash flows as a result of complying with these laws.

Financial Information about Geographic Areas

        For a discussion of our financial information related to geographic areas, see "Part II—Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations" and "Note 19—Segment Information" to our consolidated financial statements.

Backlog

        For a discussion of our backlog, see "Part II—Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations—Backlog" and "Item 1A. Risk Factors—Risk Factors Related to Our Operations."

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Available Information

        We file reports with the SEC, including our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to those reports filed or furnished to the SEC pursuant to the requirements of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). The general public may read and copy any materials that we file with the SEC at the SEC's Public Reference Room located at 100 F Street N.E., Washington, DC 20549. The public may also obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. The SEC maintains an Internet site, www.sec.gov, which contains the Company's reports, proxy and information statements, and other information we have filed electronically with the SEC.

        Copies of our annual reports are available at our website at www.globalpower.com under the heading "Investor Relations." The information disclosed on our website is not incorporated by this reference and is not a part of this Form 10-K. We make available on our website, free of charge, our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and any amendments to these reports as soon as reasonably practicable after we electronically file with or furnish the reports to the SEC. The following corporate governance related documents are also available free on our website:

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Code of Business Conduct and Ethics



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Corporate Governance Guidelines



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Related Party Transactions Policy



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Charter of the Audit Committee



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Charter of the Compensation Committee



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Charter of the Nominating and Corporate Governance Committee



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Procedures for Reporting Complaints Regarding Accounting or Auditing Matters of Global Power Equipment Group Inc.

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Item 1A.    Risk Factors.

        Our business, financial condition and results of operations may be impacted by one or more of the following factors, any of which could cause actual results to vary materially from historical and current results or anticipated future results.

Risk Factors Related to Our Liquidity and Capital Resources

If we do not extend, refinance, or repay amounts due under our Revolving Credit Facility that matures on May 15, 2017, our business, financial condition, and ability to continue as a going concern would be materially and adversely impacted.

        Our consolidated financial statements have been prepared assuming that we will continue as a going concern, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. We incurred losses in 2014 and 2015 and expect to incur further net losses in the operation of our businesses. Prior to May 2015, we were dependent on borrowings under our Revolving Credit Facility as a source of funding our operations. However, coincident with our announcement in May 2015 that we would have to restate our previously filed 2014 Form 10-K and would not be able to file our first quarter 2015 Form 10-Q in a timely manner, we were no longer in compliance with various covenants under our Revolving Credit Facility. As a result, we have been unable to make incremental borrowings against the Revolving Credit Facility since that time. Our Revolving Credit Facility currently has a maturity date of May 15, 2017, having been extended by our lender group from an original maturity date of February 21, 2017. As of December 31, 2015, we had $22.2 million in cash and cash equivalents and $70.0 million due on our Revolving Credit Facility, with no available borrowing capacity remaining under the facility. As of and since that time, we have been operating under a series of waivers of defaults under our Revolving Credit Facility. As of month-end February 2017, we owed the lenders under our Revolving Credit Facility $29.2 million. In addition, beginning on July 22, 2016, the administrative agent under our Revolving Credit Facility has exercised its rights that permit it to control rights over certain of our accounts by implementing a cash dominion process to use receipts of collateral to directly pay down debt, while allowing us to borrow subject to certain restrictions.

        We have been actively pursuing several paths to refinance our Revolving Credit Facility and generate cash to pay down existing debt, including by engaging an investment banking firm to facilitate a process to refinance the Revolving Credit Facility and provide additional debt capacity to fund our ongoing operations. This process is currently ongoing, however such refinancing opportunities may not be available to us on acceptable terms or at all. Our ability to restructure or refinance our debt will depend on the condition of the capital markets, our access to such markets and our financial condition at that time. Even if we succeed in refinancing our Revolving Credit Facility, any such refinancing arrangements could be at higher interest rates and will likely subject us to restrictive covenants that significantly limit our operating flexibility and encumber our assets. If future financings involve the issuance of equity securities, our existing stockholders would suffer dilution.

        If we default on our current obligations prior to May 15, 2017 or we do not raise additional capital in order to allow us to timely repay our outstanding obligations under the Revolving Credit Facility when they mature on May 15, 2017, we will need to seek (i) a further extension of the maturity date beyond May 15, 2017, (ii) a waiver of any defaults that arise or (iii) a forbearance agreement pursuant to which the lenders under the Revolving Credit Facility will forbear in the exercise of remedies against our assets when and if our borrowings under our Revolving Credit Facility become due and payable. Our lenders are under no obligation to grant such an accommodation. If they do not, the amount of the outstanding principal balance on the facility will become immediately due and payable. We do not currently have sufficient cash on hand to repay the balance, and a failure to do so would constitute a default.

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        Upon a default under the Revolving Credit Facility, our senior secured lenders would have the right to accelerate the then-outstanding amounts under the Revolving Credit Facility and to exercise their rights and remedies to collect such amounts, which would include foreclosing on collateral constituting substantially all of the our assets and those of our subsidiaries. Accordingly, a default could have a material adverse effect on our business. If our lenders under the Revolving Credit Facility exercise their rights and remedies, to the extent permitted by our Revolving Credit Facility and applicable law, we would likely be forced to seek bankruptcy protection and our investors could lose the full value of their investment in our common stock.

        Our inability to generate sufficient cash flow to satisfy our debt obligations, to meet the covenants of our credit facility and/or to obtain alternative financing in such circumstances could materially and adversely affect our business, financial condition, results of operations and cash flows. For additional information, see "Part II—Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources" and "Note 12—Debt" to our consolidated financial statements.

We may not generate sufficient cash resources to continue funding our operations.

        In order to have sufficient cash to fund our operations and continue as a going concern, we will likely need to successfully implement one or more of the following initiatives: raise additional equity or debt capital; seek relief from the lenders under our Revolving Credit Facility; or sell assets outside the ordinary course of business. If we are unsuccessful in these liquidity generating initiatives and do not have sufficient cash resources to operate our business, we may be forced to significantly curtail or cease our operations or seek bankruptcy protection. For additional information, see "Part II—Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources" and "Note 12—Debt" to our consolidated financial statements.

Our independent registered public accounting firm may include an explanatory paragraph in its audit opinion that accompanies our financial statements for the year ended December 31, 2016 indicating that our debt maturity and related liquidity position raise substantial doubt about our ability to continue as a going concern.

        If we are unable to refinance, repay or sufficiently extend the maturity date of our Revolving Credit Facility beyond its current maturity date of May 15, 2017, or develop and implement plans sufficient to alleviate the adverse effects of the foregoing, before the completion of the audit of our consolidated financial statements for the year ended December 31, 2016, our independent registered public accounting firm may include an explanatory paragraph in its audit opinion that accompanies our 2016 financial statements, indicating that our debt maturity and related liquidity position raise substantial doubt about our ability to continue as a going concern. The presence of any such explanatory paragraph may, among other negative effects, make it difficult for us to continue to negotiate acceptable payment terms with our vendors and customers or may result in one or more of our suppliers making demand for adequate assurance, which could include a demand for payment-in-advance. If we are unable to negotiate acceptable payment terms with our customers, or if any of our material suppliers were to successfully demand payment-in-advance, and we were unable to internally generate or externally raise cash in sufficient amounts to cover our resulting reduced liquidity, it could have a material adverse effect on our liquidity and may force us to seek bankruptcy protection. Other effects of such an explanatory paragraph may include negative perceptions among potential lenders and investors participating in our refinancing process, our customers and employees.

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The limitations and covenants contained in our Revolving Credit Facility constrain our ability to borrow additional money, sell assets and make acquisitions, which may impair our ability to fully implement elements of our business strategy.

        Our Revolving Credit Facility contains a number of limitations and covenants that limit our ability and that of our subsidiaries to:

•

borrow money or make capital expenditures;



•

incur liens;



•

pay dividends or make other restricted payments;



•

merge or sell assets;



•

enter into transactions with affiliates; and



•

make acquisitions.

        In addition, our Revolving Credit Facility contains other covenants, including covenants that require us to maintain specified financial ratios, including total leverage and interest coverage. It also includes mandatory prepayment provisions and limitations on our expenditures. We are seeking to refinance our existing Revolving Credit Facility, however any new financing arrangements may subject us to higher interest rates, additional restrictive covenants. These restrictions may have a material adverse effect on our ability to make capital expenditures and business acquisitions, restructure or refinance our indebtedness, accept certain business opportunities from customers or seek additional capital. If we do not comply with the restrictive covenants or obtain waivers as needed, our lenders could accelerate our debt and foreclose on our assets, and you may lose the full value of an investment in our common stock. For additional information, see "Part II—Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources" and "Note 12—Debt" to our consolidated financial statements.

If we become unable to obtain adequate surety bonding or letters of credit, it could reduce our ability to bid on new work, which could have a material adverse effect on our future revenue and business prospects.

        In line with industry practice, we are often required to provide performance and surety bonds to customers and may be required to provide letters of credit. These bonds and letters of credit provide credit support for the client if we fail to perform our obligations under the contract. If security is required for a particular project and we are unable to obtain a bond or letter of credit on terms commercially acceptable to us, we may not be able to pursue that project. In addition, bonding may be more difficult to obtain in the future or may only be available at significant additional cost. Our ability to obtain surety bonds and letters of credit is currently constrained, and any continued inability to obtain surety bonds and letters of credit on commercially reasonable terms could have a material adverse effect on our revenue and business prospects.

We have recorded write-downs of our goodwill and other indefinite-lived assets. If we were required to write down additional amounts, our results of operations and stockholders' equity could be materially adversely affected.

        We are required to review goodwill and indefinite lived intangible assets for potential impairment at least annually in accordance with GAAP. During 2015, our common stock traded at a market price that was lower than its book value for a prolonged period. As a result, we recorded a non-cash charge of $47.2 million for the impairment of goodwill and trade names in the third quarter of 2015. We currently have $69.3 million of goodwill and trade names remaining on our consolidated balance sheet as of December 31, 2015. If we experience declines in revenue and gross profit or do not meet our current and forecasted operating budget, we may be subject to additional goodwill and/or other

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intangible asset impairments in the future. Because of the significance of our goodwill and intangible assets, and based on the magnitude of historical impairment charges, any future impairment of these assets could have a material adverse effect on our financial results. For additional information, see "Note 8—Goodwill and Other Intangible Assets" to our consolidated financial statements.

Changes to tax regulations, laws, accounting principles, future business operations or examinations by tax authorities can adversely impact our provision for income taxes and ability to use deferred tax assets.

        Our ability to use our deferred tax assets is subject to volatility and could be adversely affected by earnings differing materially from our projections, changes in the valuation of our deferred tax assets and liabilities, expiration of or lapses in tax credits, changes in ownership as defined by Section 382 of the Internal Revenue Code of 1986, as amended (the "Code"), and outcomes as a result of tax examinations or by changes in tax laws, regulations and accounting principles. As a result, our income tax provisions are also subject to volatility from these changes as well as changes in accounting for uncertain tax positions, or interpretations thereof.

        For instance, on December 31, 2014, we recorded $44.9 million of non-cash valuation allowances on our deferred tax assets recorded in 2014 and prior years. We also recorded $21.9 million of additional valuation allowances on substantially all U.S. and certain foreign deferred tax assets recorded during the year ended December 31, 2015. These deferred tax assets remain available for use in future periods and will reduce our current tax expense in the year in which taxable income is generated to the extent that the deferred tax assets are not eliminated or limited under Code Sections 382 and 383.

        Significant judgment is required in determining the recognition and measurement attributes prescribed in GAAP relating to accounting for income taxes. In addition, GAAP applies to all income tax positions, including the potential recovery of previously paid taxes, which, if settled unfavorably, could adversely impact our provision for income taxes or additional paid-in capital. We could also be subject to examinations of our income tax returns by the Internal Revenue Service and other tax authorities. We assess the likelihood of adverse outcomes resulting from these examinations in determining the adequacy of our provision for income taxes. There may be exposure that the outcomes from these examinations will have an adverse effect on our operating results and financial condition.

Our ability to use net operating loss carryforwards or other tax attributes may be subject to limitations under Sections 382 and 383 of the Internal Revenue Code.

        As of December 31, 2015, we have U.S. federal tax net operating loss carryforwards, foreign tax credits, and general business tax credits of approximately $130.9 million, $9.6 million, and $0.4 million respectively. Generally, net operating loss, foreign tax credit, and general business credit carryforwards may be used to offset future taxable income and thereby reduce or eliminate U.S. federal income tax liabilities. Section 382 of the Internal Revenue Code of 1986, as amended, limits a corporation's ability to utilize net operating loss carryforwards to reduce tax liabilities if the corporation undergoes an "ownership change." For these purposes, an ownership change is deemed to occur if there has been a change of more than 50% in the ownership of shareholders owning 5% or greater of the value of a corporation's stock over a three-year period. Code Section 383 applies the same limitations to foreign tax credit, general business credit, and capital loss carryforwards after an ownership change.

        Based upon our review of the issue, we have not experienced an ownership change as defined under Code Section 382 as of December 31, 2015. If additional equity is issued in the future, an ownership change pursuant to Code Section 382 may occur. In addition, an ownership change under Code Section 382 could be caused by circumstances beyond the Company's control, such as market purchases or sales by certain 5% or greater shareholders of our stock. There is also a risk that, due to regulatory changes, such as suspensions on the use of net operating losses ("NOLs") or other unforeseen reasons, our existing NOLs could expire or otherwise be unavailable to offset future income

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tax liabilities. Thus, there can be no assurance that the Company will not experience an ownership change which would significantly limit the utilization of the Company's net operating loss, foreign tax credit, or general business credit carryforwards in calculating future federal tax liabilities.

We may not be able to achieve or maintain our profitability.

        We have incurred net losses in 2015 and 2014, and we expect to incur further net income losses in the operation of our business. We incurred significant expenses during 2015 and 2016 related to, among other things, legal and accounting costs associated with the restatement of our financial statements. We have incurred, and are likely to continue to incur, additional costs for legal proceedings associated with the restatement. In addition, during 2014 we entered into an agreement to fulfill a project with a partner, whereby we were jointly and severally liable for the entire project. The project had certain liquidated damage clauses, including a clause that allows the customer the right to be made whole should the product not meet certain criteria. This can include a complete rebuild of the project. Although there is a wide range of potential liability, we have accrued $4.4 million for the year ended December 31, 2015. See "Note 16—Commitments and Contingencies" to our consolidated financial statements. If our profits do not increase to offset these increases in costs, our operating results will be adversely affected. Investors should not consider our historical operating results as indicative of future operating results, and we cannot provide assurance that we will be able to achieve or maintain profitability in the future.

Volatility and uncertainty of the credit markets may negatively impact us.

        We intend to finance our existing operations and initiatives with existing cash and cash equivalents, investments, cash flows from operations and potential future borrowings. However, as of March 2017, we are operating under waivers of existing defaults under our Revolving Credit Facility, and if we incur additional defaults or otherwise cannot obtain the relevant waivers, our borrowings will become immediately due and payable. Further, our Revolving Credit Facility expires in May 2017, and although we will require additional financing to pay off any amounts outstanding under our Revolving Credit Facility, adverse national and international economic conditions and other factors may make it difficult or impossible for us obtain such financing on acceptable terms or at all. In addition, deterioration in the credit markets could adversely affect the ability of many of our customers to pay us on time and the ability of many of our suppliers to meet our needs on a competitive basis. Any inability to access necessary additional funds on acceptable terms or at all may negatively impact our business or operations.

We are exposed to market risks from changes in interest rates and foreign currency exchange rates.

        We are subject to market risk exposure related to changes in interest rates and fluctuations in foreign currency exchange rates. Portions of our operations are located in foreign jurisdictions and a portion of our billings is paid in foreign currencies. Changes in foreign currency exchange rates or weak economic conditions in foreign markets could therefore cause fluctuations in revenue derived from foreign operations. For example, many foreign currencies have decreased in value against the U.S. dollar. Our receipt of such devalued foreign currencies for a project as to which a significant portion of our costs are incurred in U.S. dollars would adversely affect our revenue, as expressed in U.S. dollars, and our profit from that project. In addition, sales of products and services are affected by the value of the U.S. dollar relative to other currencies. Changes in foreign currency rates can also affect the costs of our products purchased or manufactured outside the U.S. Changes in interest rates or foreign currency exchange rates could have a material adverse effect on our results of operations and financial position.

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Risk Factors Related to the Restatement of Prior Period Financial Statements and Our Internal Control over Financial Reporting

Audit, investigation, legal and expert services regarding the restatement and audit of our historical financial results, as well as recent legal proceedings, have required substantial attention from the Board of Directors, have diverted financial resources away from the Company and management's attention away from our usual business operations and may continue to adversely affect our business, results of operations and financial condition.

        Our Board, Audit Committee and members of management have devoted and expect to continue to devote substantial internal and external resources to legal matters resulting from the restatement, the restatement and remediation efforts, the preparation and filing of this Form 10-K and the preparation and filing of future periodic reports. As a result of these efforts, we have incurred and expect that we will continue to incur significant incremental fees and expenses for additional auditor services, financial and other consulting services and legal services, as well as the implementation and maintenance of systems and processes that will need to be updated, supplemented or replaced. These expenses, as well as the substantial time devoted by our Board and management toward identifying, addressing and remediating any internal weaknesses and legal costs related to our internal investigation and the ongoing SEC investigation, pending litigation and other actions related to the restatement, have had and could continue to have a material adverse effect on our business, results of operations and financial condition. In addition, any future inquiries from, legal proceedings, or actions by the SEC as a result of the restatement of our historical financial statements will, regardless of the outcome, likely consume a significant amount of our resources in addition to those resources already consumed in connection with the restatement itself and ongoing litigation matters.

A pending securities putative class action, as well as an ongoing SEC investigation, could divert management's focus, result in substantial expenses and have an adverse impact on our reputation, financial condition and results of operations.

        The matters that led to our internal investigation and the restatement of our financial results expose us to greater than typical risks associated with litigation, regulatory proceedings and government enforcement actions. For instance, a putative shareholder class action is pending in the U.S. District Court for the Northern District of Texas alleging violations of the federal securities laws in connection with matters related to the restatement of our financial results. The consolidated amended complaint filed by the lead plaintiff names the Company and two of our former officers as defendants. Please see "Item 3. Legal Proceedings" and "Note 16—Commitments and Contingencies" to our consolidated financial statements. We cannot predict the outcome of the lawsuits, the magnitude of any potential losses or the effect such litigation may have on us or our operations. Regardless of the outcome, lawsuits and investigations involving us, or our current or former officers and directors, could result in significant expenses and divert attention and resources of our management and other key employees. We could be required to pay damages or other penalties or have injunctions or other equitable remedies imposed against us or our current or former directors and officers. In addition, we are generally obligated to indemnify our current and former directors and officers in connection with lawsuits, governmental investigations and related litigation or settlement amounts. Such amounts could exceed the coverage provided under our insurance policies. Any of these factors could harm our reputation, business, financial condition, results of operations or cash flows.

        In addition, the Division of Enforcement of the SEC is conducting a formal investigation into possible securities law violations by us relating to our disclosures concerning certain financial information, including our cost of sales and revenue recognition, as well as related accounting issues. We are cooperating with the SEC in its investigation. Please see "Item 3. Legal Proceedings." At this time, we cannot predict the outcome or the duration of the SEC investigation or any other legal proceedings or any enforcement actions or other remedies that may be imposed on us as a result of the

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SEC investigation. Any action by the SEC could result in sanctions against us and certain of our current and former officers and directors. A protracted investigation could impose substantial additional costs and distractions, regardless of its outcome. Furthermore, publicity surrounding the foregoing or any enforcement actions resulting from the SEC's investigation, even if ultimately resolved favorably for us, could have a material adverse impact on our reputation, business, financial condition and results of operations.

Our failure to maintain effective internal control over financial reporting and disclosure controls and procedures could have a material adverse effect on our business.

        We are required to maintain internal control over financial reporting and disclosure controls and procedures in order to provide reasonable assurance regarding the reliability of financial reporting and the preparation of our consolidated financial statements for external purposes in accordance with GAAP. In connection with our internal investigation and the restatement, we determined that we had material weaknesses in our internal control environment and internal control activities. We therefore concluded that, as of the end of the period covered by this report, our internal control over financial reporting and our disclosure controls and procedures were not effective. Until we fully remediate these deficiencies, it may be more difficult for us to report results accurately and on time. While we are working to address the internal control over financial reporting and other issues raised by our restatement process, we cannot be certain that our efforts will be successful or that we will be able to maintain adequate controls over our financial processes and reporting in the future. As of the date of this filing, the remediation process is ongoing. See "Part II—Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure" and "Part II—Item 9A. Controls and Procedures."

        Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur undetected, and it is possible that significant deficiencies or material weaknesses in our internal control over financial reporting may be identified in the future. Any failure of our internal controls could result in additional material misstatements in our consolidated financial statements, significant deficiencies, material weaknesses, costs, failure to timely meet our periodic reporting obligations and a loss of investor confidence. It would also adversely affect the results of periodic management evaluations and annual auditor attestation reports regarding disclosure controls and the effectiveness of our internal control over financial reporting and could have a material adverse effect on our business, financial condition, results of operations or cash flow. If our internal controls are deemed inadequate in the future, our current external auditors could resign, and the process of retaining new auditors could limit our access to capital for an extended period of time.

Our business operations depend upon our new senior management team and the ability of our other employees to successfully perform their roles.

        We have experienced significant turnover in our senior management within the past two years. In March 2015, we announced the departure of our former President and Chief Executive Officer and the appointment of Terence J. Cryan as our new President and Chief Executive Officer. In September 2015, we announced the departure of our former Chief Financial Officer and the appointment of Craig E. Holmes as Senior Vice President of Finance. Although our Board of Directors intends to name Mr. Holmes as our new Chief Financial Officer after the filing of this Form 10-K, we do not currently have a Chief Financial Officer. In the interim period, Timothy M. Howsman (who has previously served as a corporate officer) now serves as our principal financial officer, reporting directly to Mr. Cryan. Following the filing of this report with the SEC, Mr. Howsman intends to retire and Mr. Holmes will assume the role of Chief Financial Officer.

        As new employees gain experience in their roles, we could experience inefficiencies or a lack of business continuity due to loss of historical knowledge and a lack of familiarity of those employees with

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business processes, operating requirements, policies and procedures (some of which are new) and key information technologies and related infrastructure used in our day-to-day operations and financial reporting. It is important to our success that these key employees quickly adapt to, and excel, in their new roles. Their failure to do so could result in operational and administrative inefficiencies and added costs that could adversely impact our results of operations, our stock price and our customer relationships and may make recruiting for future management positions more difficult. In addition, if we were to lose the services of any one or more key employees, whether due to death, disability or termination of employment, our ability to successfully implement our business strategy, financial plans and other objectives could be significantly impaired. Any of the above factors could also impede our ability to remediate the material weaknesses in our internal controls. See "Part II—Item 9A. Controls and Procedures." If we do not effectively manage our business through these management transitions, our business and results of operations could be adversely affected.

As a result of our inability to prepare and timely file periodic reports, we face limitations in registering securities for a public offering, acquisitions or equity incentive plans, which could adversely affect our business.

        We are required to comply with Section 13 of the Exchange Act. We did not file any Quarterly Reports on Form 10-Q or any Annual Report on Form 10-K since the May 2015 announcement of our intention to restate our financial results. Even after the filing of this Form 10-K, we will remain delinquent in our SEC reporting obligations because we have not filed any of our periodic reports for our 2016 fiscal periods. We will not be eligible to use "short-form" registration statements that would allow us to incorporate by reference our SEC reports into our registration statements, or to use "shelf" registration statements, until we have filed all of our periodic reports in a timely manner for a period of 12 months. We may use Form S-1 to register a sale of our stock to raise capital, but doing so would likely increase transaction costs and be time consuming, which may adversely affect our ability to raise capital in a timely manner. Our failure to remain current in our SEC reporting obligations has resulted in our inability to permit use of our existing registration statement on Form S-8 or file a new registration statement on Form S-8, which would be used to register the issuance and sales of securities under our equity incentive plans. As a result, our ability to grant awards to adequately incentivize and retain skilled employees, including key employees needed to complete the remediation of the material weaknesses in our internal controls, could be adversely affected. See "Part II—Item 9A. Controls and Procedures." These restrictions could increase the costs of selling securities publicly, significantly delay such sales and adversely affect our business.

We have not held an annual meeting of our shareholders since May 2015; as such, our shareholders have not had the opportunity to elect directors since May 2015.

        Our bylaws and the Delaware General Corporation Law state that we must hold an annual meeting of our shareholders for the election of directors and other business as may be properly brought before the meeting. However, because of the restatement of our financial results and our delayed periodic report filings, we have not held an annual meeting of our shareholders since May 2015. As such, our shareholders have not had the opportunity to vote in an election of our directors since that time. We plan to hold an annual shareholders' meeting in the second quarter of 2017; however, if we do not, or if we otherwise fail to hold annual shareholders' meetings in the future, it may be more challenging for our shareholders to vote on the election of our directors.

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Risk Factors Related to Our Operations

A substantial portion of the revenue from our Services segment is related to nuclear power operations. The cost of operating a nuclear power plant could cause utilities to consider less costly power generation options. The shutdown of nuclear power plants could have a material adverse effect on our operations.

        The demand for the nuclear services provided by our Services segment depends on the continued operation of nuclear power plants. If nuclear power plants do not remain cost competitive compared with other power generation options, utilities could choose to shut down operations at nuclear power plants. The cost competitiveness of operating a nuclear power plant could be affected by factors such as an adverse change in U.S. policy, increased maintenance costs and continued low natural gas prices. The U.S. government has been supportive of increased investment in nuclear power as it represents approximately 20% of the total power generating capacity in the U.S. However, if the U.S. government changes its policy or if public acceptance of nuclear technology declines, demand for nuclear power could be negatively affected and potentially increase the regulation of the nuclear power industry. Because a portion of our Services segment's business is directly tied to the number of nuclear power facilities that utilize our Services segment, utilities opting to replace costly nuclear power plant facilities with less costly power generation options could have a material adverse effect on our business, operations and cash flow.

If our costs exceed the estimates we use to set the fixed prices of our contracts, our earnings will be reduced.

        The contracts under which we sell our products are generally fixed-price contracts, most of which are "lump sum bid" contracts. Fixed-price contracts present certain inherent risks, including the possibility of ambiguities in the specifications received, problems with new technologies and economic and other changes that may occur over the contract period.

        In addition, we have a limited ability to recover any cost overruns. Contract prices are established based in part on our projected costs, which are subject to a number of assumptions. The costs that we incur in connection with each contract can vary, sometimes substantially, from our original projections. Because of the large scale and complexity of our contracts, unanticipated changes may occur, such as customer budget decisions, design changes, delays in receiving permits and cost increases, as well as delays of drawings and equipment in delivery of our products. We often are contractually subject to liquidated damages for late delivery. Unanticipated cost increases or delays may occur as a result of several factors, including:

•

increases in the cost of commodities (primarily steel plate), labor or freight;



•

unanticipated technical problems (for example, difficulties in designing products that integrate well with new generations of gas turbines);



•

suppliers' or subcontractors' failure to perform (for example, substandard welding by a subcontractor), requiring modified execution plans or re-work; and



•

decreases in labor efficiency realized.

        Cost increases or overruns that we cannot pass on to our customers or our payment of liquidated damages under our contracts will lower our earnings. Increases in commodity prices may adversely affect our gross margins.

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If we are unable to control the quality or timely production of products manufactured or services provided by our subcontractors, our reputation could be adversely affected and we could lose customers. In the event of subcontractor insolvency, if we are unable to recover any advance progress payments made to subcontractors, our profitability would be adversely affected.

        We rely on subcontractors to manufacture and assemble a substantial portion of our products, as well as provide some specialty services. Our subcontractors account for a significant percentage of our manufacturing costs. The quality and timing of production by our subcontractors is not totally under our control. Our subcontractors may not always meet the level of quality control and the delivery schedules. The failure of our subcontractors to produce quality products in a timely manner could adversely affect our reputation and result in the cancellation of orders for our products, significant warranty and repair costs, significant liquidated damages and the loss of customers. Alternatively, we could be required to move subcontract manufacturing to other locations, resulting in increased costs. In addition, we make advance progress payments to subcontractors in anticipation of their completion of our orders. We may be unable to recover those advances if a subcontractor fails to complete an order, which may adversely affect our profitability and cash flow.

We may not be able to compete successfully against current and future competitors.

        The industry in which we operate is highly competitive. Some of our competitors and potential competitors are less leveraged than we are, have greater financial or other resources than we have and may be better able to withstand adverse market conditions within the industry. Our competitors typically compete aggressively on the basis of pricing and may continue to impact our ability to attract and retain customers or maintain the rates we charge. To the extent that we choose to match our competitors' prices, it would result in lower margins and, as a result, could harm our results of operations. Should we choose not to match, or remain within a reasonable competitive distance from, our competitors' pricing, we may face a loss of sales volume and, as a result, such decision could harm our results of operation. In addition, our future growth will depend on our ability to gauge the direction of the commercial and technological progress in our markets that may be adopted by our competitors, as well as our ability to fund and successfully develop, manufacture and market new and improved products in a changing environment. However, any such developments would likely require additional financing, and we may not be able to obtain the necessary financing on acceptable terms, if at all. A failure to keep pace with our competitors or the technological innovations in the markets we serve would have a material adverse impact on our business.

Our profitability and financial condition may be adversely affected by risks associated with the energy and power generation industries, such as price and supply and demand fluctuations for oil and natural gas.

        Our Mechanical Solutions and Electrical Solutions segments are exposed to risks associated with the use of natural gas and oil as energy sources. These risks, which are not subject to our control, include the volatility of natural gas and oil prices, the lower demand for power generation from natural gas, a slowdown in the construction of oil and gas infrastructure, a general softening of the downstream industry and a slowdown in the discovery or development of natural gas and/or oil reserves. While higher natural gas and oil prices generally result in increased infrastructure spending by customers in our Mechanical Solutions and Electrical Solutions segments, sustained high energy prices could be an impediment to economic growth and could result in reduced infrastructure spending by such customers. Higher prices could also decrease spending on power generation equipment and related infrastructure, an important component to the success of our Mechanical Solutions and Electrical Solutions segments. Further, if the discovery or development of natural gas and/or oil reserves slows or stops, customers would likely reduce capital spending on mainline pipe, gas gathering and compressor systems and other related infrastructure, resulting in less demand for the portfolio of products of our Mechanical Solutions and Electrical Solutions segments. If the profitability of those segments were to decline, our

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overall profitability, results of operations and cash flows could also be adversely affected. The significant increase in the North American supply of natural gas due to ongoing development of unconventional shale formations has also resulted in low natural gas prices for the past several years. Lower natural gas and oil prices sometimes result in decreased spending by certain customers in our Mechanical Solutions and Electrical Solutions segments, which could likewise adversely affect our overall profitability, results of operations and cash flows. Our Services segment is also sensitive to the price of natural gas. Low natural gas prices means gas-fired power generation is more competitive with coal and nuclear power generation, resulting in reduced spending by those customers.

Our future revenue and operating results may vary significantly from reporting period to reporting period.

        Our quarterly and annual revenue and earnings have varied in the past and are likely to vary in the future. Our product sales contracts contain customer-specific delivery terms that, coupled with other factors beyond our control, may result in uneven recognition of revenue and earnings over time. Customer-imposed delays and changes to billing terms can significantly impact the timing of revenue recognition and lengthen our cash conversion cycle. Due to our relatively large average contract size, our product sales volume during any given period may be concentrated in relatively few orders, intensifying the magnitude of these fluctuations. Furthermore, some of our operating costs are fixed. As a result, we may have limited ability to reduce our operating costs in response to unanticipated decreases in our revenue or the demand for our products in any given reporting period. Therefore, our operating results in any reporting period may not be indicative of our future performance. Because we must make significant estimates related to potential costs when we recognize revenue on a percentage-of-completion basis, these costs may change significantly from reporting period to reporting period based on new project information. In addition, most of our product revenue is based on fixed-price contracts, and the relative profitability can vary significantly between contracts. As a result, our profitability can vary from reporting period to reporting period based on the specific contract mix. As a result of the accounting errors described more fully in "Note 2—Restatement" to our consolidated financial statements, we were required to restate certain historical financial information, reflecting lower profitability in all fiscal years from 2011 to 2014.

We may not be able to maintain or expand our business outside of the U.S. due to numerous factors outside our control.

        Our international operations are subject to a number of risks inherent in doing business outside the U.S. including:

•

labor unrest;



•

regional economic uncertainty;



•

political instability, including unrest in the Middle East;



•

relations between the U.S., China and Russia;



•

restrictions on the transfer of funds into or out of a country;



•

currency exchange rate fluctuations;



•

export duties and quotas;



•

expropriations;



•

U.S. and international customs, tariffs and other regulations;



•

current and changing regulatory environments;



•

potentially adverse tax consequences;

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•

availability of financing;



•

unfavorable commercial terms and conditions; and



•

potential for adverse dispute resolution outcomes.

        These factors may impact our ability to meet product delivery commitments in foreign countries that could result in a decline in revenue or profitability and could adversely affect our ability to maintain or expand our business outside the U.S.

We conduct our operations on a worldwide basis and are subject to risks associated with doing business outside the U.S.

        We have manufacturing subcontractors in many areas outside of the U.S., including China, South Korea, Indonesia, Poland, the Middle East and Mexico, and increasing our manufacturing footprint to localize in emerging markets is an important element of our strategy. There are a number of risks associated with doing business internationally, including, but not limited to, (a) exposure to local economic and political conditions, (b) the impact of social unrest, such as risks of terrorism or other hostilities, (c) currency exchange rate fluctuations and currency controls, (d) export and import restrictions and (e) the potential for shortages of trained labor. In particular, there has been social unrest in the Middle East and Mexico, and any increased violence in or around our manufacturing facilities could impact our business by disrupting our supply chain and the delivery of products to customers. In addition, the increased violence in or around our manufacturing facilities could present several risks to our employees who may be directly affected by the violence and such violence may result in a decision by them to relocate from the area or may make it difficult for us, or our subcontractors, to recruit or retain talented employees. The likelihood of such occurrences and their potential effects are unpredictable and vary from country to country. Any such occurrences could be harmful to our business and our financial results. For additional information, see "Explanatory Note—Subsequent Events."

A material portion of our revenue is from sales of equipment for gas turbine power plants. During periods of declining construction of new gas turbine power plants, the market for our products is significantly diminished.

        The demand for our products depends on the continued construction of gas turbine power generation plants. The power generation equipment industry has experienced cyclical periods of slow growth or decline. During periods of decreased demand for new gas turbine power plants, our customers may be more likely to decrease expenditures on the types of products and systems that we supply and, as a result, our future revenue may decrease. These projects typically require funding from a healthy credit market as well. If credit markets are tight, funding could be difficult to obtain, therefore delaying or even cancelling these types of projects entirely. Because our growth strategy includes focusing on the natural gas growth trend, a rise in the price or a shortage in the supply of natural gas could affect the profitability, or operations, of gas turbine power plants, which could adversely affect our future revenue. These and other factors may temper demand for our products. If prices of natural gas in a particular geographic area are so high, or the supply of natural gas is so limited, as to make the construction of new gas turbine power plants or oil and gas infrastructure uneconomical in that geographic area, we may not derive any future revenue from projects in that geographic region unless and until those factors are reversed.

        Environmental laws and regulations have played a part in the increased use of gas turbine technology in various jurisdictions. These laws and regulations may change, or other jurisdictions may adopt similar laws and regulations. Changes in existing laws and regulations could result in a reduction in the building and refurbishment of gas turbine power plants or oil and gas infrastructures. In addition, stricter environmental regulation could result in our customers seeking new ways of generating electricity that do not require the use of our products. Policymakers continue to focus on emissions from gas turbine power plants, and attempts to reduce or regulate emissions could increase the cost of gas turbine power plants and result in our customers switching to alternative sources of power.

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        Other current power technologies, improvements to these technologies and new alternative power technologies that compete or may compete in the future with gas turbine power plants could affect our sales and profitability. Any change in the power generation industry that results in a decline in the construction of new power plants or a decline in the upgrading of existing power plants could materially adversely affect our sales.

A small number of major customers account for a significant portion of our revenue, and the loss of any of these customers could negatively impact our business.

        We depend on a relatively small number of customers for a significant portion of our revenue. In 2015, four customers accounted for approximately 61.6% of our consolidated revenue. In 2014, four customers accounted for approximately 58.4% of our consolidated revenue. In 2013, four customers accounted for approximately 60.4% of our consolidated revenue. For a listing of our major customers, see "Note 17—Major Customers and Concentration of Credit Risk" to our consolidated financial statements. We expect to continue to depend upon a relatively small number of customers for a significant percentage of our revenue. Because our major customers represent a large part of our business, the loss of any of our major customers could negatively impact our business and results of operations. Several of our customers have the ability to internally source some of the products we manufacture. Any increase in this activity could reduce our sales. Our business volume with each of our largest customers are highly dependent on power generation capacity additions for our Mechanical Solutions and Electrical Solutions segments and on operations and maintenance budgets for U.S. utilities for our Services segment. Fluctuations in any of these factors could materially adversely impact our performance results.

We are subject to potential insolvency or financial distress of third parties, including our customers and suppliers.

        We are exposed to the risk that third parties to various arrangements who owe us money, goods or who purchase products and services from us, will be unable to perform their obligations or continue to place orders due to insolvency or financial distress. If such third parties fail to perform their obligations under arrangements with us, we may be forced to replace the underlying commitment at current or above market prices or on other terms that are less favorable to us, or we may have to write off receivables in the case of a customer failing to pay.

        If a customer becomes insolvent or files for bankruptcy, our ability to recover accounts receivable from that customer would be adversely affected and any payment we received during the preference period prior to a bankruptcy filing may be potentially recoverable by the bankruptcy estate. Any of the foregoing could adversely impact our results of operations, financial position and liquidity.

The dollar amount of our backlog, as stated at any time, is not necessarily indicative of our future revenue.

        Our backlog consists of firm orders or blanket authorizations from our customers. Backlog may vary significantly from reporting period to reporting period due to the timing of customer commitments. The time between receipt of an order and actual completion, or delivery, of our products varies from a few weeks, in the case of inventoried precision parts, to a year or more, in the case of custom-designed gas turbine products, SCR systems and other major plant components. However, backlog may not be indicative of future operating results, and projects in our backlog may be cancelled, modified or otherwise altered by our customers. To the extent projects are delayed, the timing of our revenue could be affected. If a customer cancels an order, we may be reimbursed for the costs we have incurred. Typically, however, we have no contractual right to the full amount of the revenue reflected in our backlog contracts in the event of cancellation. In addition, projects may remain in our backlog for extended periods of time. Furthermore, a portion of our backlog for multi-year service maintenance contracts is based on what we expect to perform in the next twelve months of work and is therefore not

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necessarily supported by a firm purchase order. If that work does not materialize, then our backlog would be negatively impacted, as that work would be considered a "cancellation." Revenue recognition occurs over extended periods of time and is subject to unanticipated delays. Fluctuations in our reported backlog levels also result from the fact that we may receive a small number of relatively large orders in any given reporting period that may be included in our backlog. Because of these large orders, our backlog in that reporting period may reach levels that may not be sustained in subsequent reporting periods. Our backlog, therefore, is not necessarily indicative of our future revenue or of long-term industry trends.

The success of our Services segment is partially dependent upon maintaining our safety record, and an injury to or death of one of our employees could result in material liabilities to our company.

        The activities we conduct at our and our customers' facilities present a risk of injury or death to our employees, customers or visitors to our operations, notwithstanding our efforts to comply with safety regulations. We may be unable to avoid material liabilities for an injury or death, and our workers' compensation and other insurance policies may not be adequate or may not continue to be available on terms acceptable to us, or at all, which could result in material liabilities to us. In addition, our ability to obtain new business and retain our current business, particularly in our Services segment, is partially dependent on our continuing ability to maintain a safety record that exceeds the industry average. If we fail to maintain superior safety performance, or if serious accidents occur in spite of our safety procedures, our revenue and results of operations could be materially and adversely affected.

Our dependence on suppliers and subcontractors could expose us to the risk of loss in our operations.

        We rely significantly on suppliers to obtain necessary materials and subcontractors to perform manufacturing and services. Although we are not dependent on any single supplier or subcontractor, any substantial limitation on the availability of required suppliers or subcontractors could negatively impact our operations. Changes in market or economic conditions could increase the risk of a lack of available suppliers or subcontractors. To the extent we cannot engage subcontractors or acquire equipment or materials, we could experience losses in the performance of our operations.

Our former operating unit has been named as a defendant in asbestos personal injury lawsuits.

        As discussed in "Note 16—Commitments and Contingencies" to our consolidated financial statements, our former operating unit has been named as a defendant in a limited number of asbestos personal injury lawsuits. Neither we, nor our predecessors, ever mined, manufactured, produced or distributed asbestos fiber, the material that allegedly caused the injury underlying these actions. The bankruptcy court's discharge order issued upon our emergence from bankruptcy extinguished the claims made by all plaintiffs who had filed asbestos claims against us before that time. We believe the bankruptcy court's discharge order should serve as a bar against any later claim filed against us, including any of our subsidiaries, based on alleged injury from asbestos at any time before our emergence from bankruptcy. In all of the asbestos cases finalized post-bankruptcy, we have been successful in having such claims dismissed without liability. Moreover, during 2012, we secured insurance coverage that will help to reimburse the defense costs and potential indemnity obligations of our former operating unit relating to these claims. Nonetheless, findings of liability on our part in any of these cases that were filed against us after we emerged from bankruptcy that remain unresolved could have an adverse effect on our financial position, results of operations or liquidity.

Compliance with environmental laws and regulations is costly, and our ongoing operations may expose us to environmental liabilities.

        Our operations are subject to laws and regulations governing the discharge of materials into the environment or otherwise relating to the protection of the environment or human health and safety.

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We are subject to various U.S. federal statutes and the regulations implementing them, as well as similar laws and regulations at the state and local levels and in other countries in which we operate. If we fail to comply with environmental laws or regulations, we may be subject to significant liabilities for fines, penalties or damages, or lose or be denied significant operating permits.

        In addition, we may be subject to product liability allegations involving claims of personal injury or property damage. The sale and servicing of complex, large scale equipment used in a variety of locations and climates and integrating a variety of manufactured and purchased components entails an inherent risk of disputes and liabilities relating to the operation and performance of the equipment and the health and safety of the workers who operate and come into contact with the machinery. Because our products are used primarily in power plants, claims could arise in different contexts, including fires, explosions and power surges, which can result in significant property damage or personal injury, and equipment failure, which can result in personal injury or damage to other equipment in the power plant.

        The insurance policies we maintain to cover claims of this nature are subject to deductibles and recovery limitations as well as limitations on contingencies covered, and we may, therefore, suffer losses from these claims for which no insurance recovery is available. Such losses could have a material adverse effect on our business.

The effects of providing warranties for our products could result in significant unanticipated costs, and could adversely affect our financial condition.

        We generally provide warranties for terms of three years or less on our products. These warranties require us to repair or replace faulty products. The need to repair or replace products with design or manufacturing defects could temporarily delay the sale of new products and adversely affect our reputation. Any substantial payments made or costs incurred under our warranty program could have a material adverse effect on our business, financial condition, results of operations and cash flow.

Expiration of the Price-Anderson Act's indemnification authority could have adverse consequences for our Services segment.

        We provide services to the nuclear industry through our Services segment. The Price-Anderson Act promotes the nuclear industry by offering broad indemnification to commercial nuclear power plant operators and U.S. Department of Energy ("DOE") for liabilities arising out of nuclear incidents at power plants licensed by the NRC and at DOE nuclear facilities. That indemnification protects not only the NRC licensee or DOE prime contractor, but also others like us who may be doing work under contract or subcontract for a licensed power plant or under a DOE prime contract. The Energy Policy Act of 2005 extended the period of coverage to include all nuclear power reactors issued construction permits through December 31, 2025. If the Price-Anderson Act's indemnification authority expires, a problem related to our provision of services at a nuclear facility could lead to a damage claim against us for which we might not be entitled to indemnification. In addition, any well-publicized problem with those services, whether actual or perceived, could adversely affect our reputation and reduce demand for our services.

Our revenue would be adversely affected if our patents and other intellectual property rights are unable to protect our proprietary products.

        Our success depends significantly on our ability to protect our intellectual property rights to the technologies and know-how used in our proprietary products and software programs. We rely on patent protection, as well as a combination of trade secret, unfair competition and similar laws and nondisclosure, confidentiality and other contractual restrictions to protect our proprietary rights. However, these legal means afford only limited protection and may not adequately protect our rights or

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permit us to gain or keep any competitive advantage. We also rely on unpatented proprietary technology. We cannot provide assurance that we can meaningfully protect all of our rights in our unpatented proprietary technology, or that others will not independently develop substantially equivalent proprietary products or processes or otherwise gain access to our unpatented proprietary technology.

        If we were required to commence legal actions to enforce our intellectual property or proprietary rights or to defend ourselves against claims that we are infringing on the intellectual property or proprietary rights of others, we could incur substantial losses and/or costs and divert management's attention from operations. Any such losses or diverted attention could have a material adverse effect on our business, results of operations or cash flow.

Our failure to attract and retain qualified personnel, including engineers, skilled workers and key officers, could have an adverse effect on us.

        Our ability to attract and retain qualified professional and/or skilled personnel in accordance with our needs, either through direct hiring, subcontracting or acquisition of other firms employing such professionals, is an important factor in determining our future success. The market for these professionals is competitive, and there can be no assurance that we will be successful in our efforts to attract and retain needed personnel. Our ability to successfully execute our business strategy depends, in part, on our ability to attract and retain highly qualified, experienced mechanical, design, structural and software engineers, service technicians and marketing and sales personnel in our Mechanical Solutions, Electric Solutions and Services segments. Demand for these workers can, at times, be high and the supply extremely limited. Our success is also highly dependent upon the continued services of our key officers, and we do not maintain key employee insurance on any of our executive officers.

        The restatement of our historical financial results and the diminished value of our stock have made it more challenging to recruit qualified personnel. If we are unable to retain qualified personnel, the roles and responsibilities of those employees will need to be filled, which may require that we devote time and resources to identifying, hiring and integrating new employees. In addition, the failure to attract and retain key employees, including officers, could impair our ability to sustain or expand our operations, provide services to our customers and conduct our business effectively.

Demand for our products and services is cyclical and vulnerable to economic slowdowns and reductions in private industry and government spending. In times of general economic contraction, our revenue, profits and financial condition may be adversely affected and will not necessarily rise in tandem with general economic expansion.

        The industries we serve historically have been, and will likely continue to be, cyclical in nature and vulnerable to general slowdowns in the U.S. and international economies. Consequently, our results of operations have fluctuated and may continue to fluctuate depending on the level of demand for products and services from these industries.

        Orders for new electrical power generation capacity are placed by our customers and have long lead times. Consequently, our bookings and revenue may rise or fall sharply as total industry orders tend to follow pronounced cycles of general expansion and contraction. During a contraction phase, limited investment in new projects, deferrals of planned projects and project cancellations may significantly reduce our potential recognition of revenue and profits. At the end of an expansion phase, any existence of excess capacity will negatively affect power prices, which will result in a reduction in new orders. In addition to being cyclical in nature, our revenue does not correlate precisely with changes in actual or forecasted new capacity due to timing differences in revenue recognition.

        During periods of declining demand for power, many of our customers may face budget shortfalls or may delay capital expenditures, which could result in a decrease in the overall demand for our

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products and services. Our customers may find it more difficult to obtain project financing due to limitations on the availability of credit and other uncertainties in the global credit markets. In addition, our customers may demand better pricing terms and their ability to timely pay our invoices may still be affected in times of economic slowdown. Any such reduction in private industry or government spending could have a material adverse effect on our revenue, net income or overall financial condition.

Efforts to increase our size through acquisitions will involve risks that could result in a material adverse effect on our business.

        In the future, we may pursue additional acquisition opportunities, some of which may be material to our business and financial performance. We may not be able to grow our business in the future through acquisitions for a number of reasons, including:

•

acquisition financing not being available on acceptable terms or at all;



•

encountering difficulties identifying, executing and integrating acquisitions;



•

increased competition for targets, which may increase acquisition costs;



•

consolidation in our industry reducing the number of acquisition targets; and



•

competition laws and regulations preventing us from making certain acquisitions.

        In addition, there are potential risks associated with growing our business through acquisitions, including the failure to successfully integrate the new business and realize the expected benefits of an acquisition. For example, with any past or future acquisition, there is the possibility that:

•

the business culture of the acquired business may not match well with our culture;



•

technological and product synergies, economies of scale and cost reductions may not occur as expected;



•

management may be distracted from overseeing existing operations by the need to integrate acquired businesses;



•

we may acquire or assume unexpected or undisclosed liabilities or risks;



•

unforeseen difficulties may arise in integrating operations and systems;



•

we may fail to retain and assimilate employees of the acquired business;



•

we may experience problems in retaining customers; and



•

problems may arise in entering new markets in which we may have little or no experience.

        We experienced many of these difficulties in connection with our acquisition of certain businesses in 2012 and 2013, and such challenges continue. In the future, these risks could have a material adverse effect on our business, financial condition and results of operations.

Information technology vulnerabilities and cyberattacks on our networks could have a material adverse impact on our business.

        We rely upon information technology to manage and conduct business, both internally and with our customers, suppliers and other third parties. Internet transactions involve the transmission and storage of data, including, in certain instances, customer and supplier business information. Accordingly, maintaining the security of our computers and other electronic devices, computer networks and data storage resources is a critical issue for us and our customers and suppliers because security breaches could result in reduced or lost ability to carry on our business and loss of and/or unauthorized

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access to confidential information. We have limited personnel and other resources to address information technology reliability and security of our computer networks and respond to known security incidents to minimize potential adverse impact. Experienced hackers, cybercriminals and perpetrators of threats may be able to penetrate our network security and misappropriate or compromise our confidential information or that of third parties, create system disruptions or cause shutdowns. These perpetrators of cyberattacks also may be able to develop and deploy viruses, worms, malware and other malicious software programs that attack our information and networks or otherwise exploit any security vulnerabilities of our information and networks. Techniques used to obtain unauthorized access to or sabotage systems change frequently and often are not recognized until long after being launched against a target, so we may be unable to anticipate these techniques or to implement adequate preventative measures. A breach of our information technology systems and security measures as a result of third-party action, malware, employee error, malfeasance or otherwise could materially adversely impact our business and results of operations and expose us to customer, supplier and other third party liabilities. Any damage, security breach, delay or loss of critical data associated with our systems may delay or prevent certain operations and may have a material adverse effect on our financial condition, results of operations and cash flows.

Our failure to comply with applicable governmental privacy laws and regulations in the U.S. and internationally could substantially impact our business, operations, financial position and cash flows.

        We are subject to extensive and evolving federal, state and foreign privacy laws and regulations. Changes in privacy and data security laws or regulations or new interpretations of existing laws or regulations could have a negative effect on our operating methods and costs. Failure to comply with such regulations could result in the termination or loss of contracts, the imposition of contractual damages, private and government civil litigation, civil sanctions, damage to our reputation or, in certain circumstances, criminal penalties, any of which could have a material adverse effect on our results of operations, financial position, cash flows, business and prospects. Determining compliance with such regulations is complicated by the fact that many of these laws and regulations have not been fully interpreted by governing regulatory authorities or the courts, and many of the provisions of such laws and regulations are open to a range of interpretations. There can be no assurance that we are, or have been, in compliance with all applicable existing laws and regulations or that we will be able to comply with new laws or regulations.

        With respect to trans-border data flows from the European Economic Area (the "EEA"), we have historically relied on the U.S.-European Union ("E.U.") and the U.S.-Swiss Safe Harbor Frameworks, as agreed to by the U.S. Department of Commerce and the E.U. and Switzerland, respectively, as a means to legally transfer European personal information from Europe to the U.S. and to process that information in the U.S. However, on October 6, 2015, the European Court of Justice ("ECJ") invalidated the legal basis for the U.S.-E.U. Safe Harbor framework, and the Swiss data protection authorities later invalidated the U.S.-Swiss Safe Harbor framework. As a result, we have begun to undertake efforts to conform transfers of personal information from the EEA based on current regulatory obligations, the guidance of data protection authorities and evolving best practices. Despite these efforts, we may be unsuccessful in establishing conforming means of transferring such data from the EEA. The legitimacy of these alternate means are subject to differing interpretations among various European jurisdictions and, as such, we may experience hesitancy, reluctance or refusal by European or multi-national clients to use our services due to the potential risk exposure they may face as a result of the ECJ ruling and the current data protection obligations imposed on them by certain data protection authorities. Furthermore, the ECJ's decision may result in different European data protection regulators applying differing standards for the transfer of personal data, which could result in increased regulation, cost of compliance and limitations on data transfers for us and our clients. These developments could harm our business, financial condition and results of operations. The current and future status of the data protection laws, policies and enforcement within the United Kingdom are

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now increasingly uncertain in light of the vote to leave the E.U., exacerbating the potential impact of regulatory uncertainty.

        In 2016, the European Union invalidated the Safe Harbor framework and on July 12, 2016, the European Commission and U.S. Department of Commerce announced that the E.U.-U.S. Privacy Shield Framework had been accepted. We adopted a Privacy Shield Policy that is compliant with that framework on September 23, 2016 and received confirmation from the Commerce Department that our self-certification had been finalized and became effective January 26, 2017. We will be training our human resources and information technology teams on the Privacy Shield Policy and our obligations in the coming weeks. While we believe our efforts will allow us to comply with the requirements of the E.U.-U.S. Privacy Shield Framework, noncompliance or alleged noncompliance with European privacy laws could result in fines and other penalties and could have a negative effect on our existing business and on our ability to attract and retain new customers.

The supply and cost of materials we use in manufacturing our products fluctuate and could increase our operating costs.

        Steel is a significant portion of the raw materials used in our products. Local shortages of steel plate sometimes arise and it is possible that an adequate supply of steel will not continue to be available in all locations on terms acceptable to us. The materials we use in our products are subject to price fluctuations that we cannot control. Changes in the cost of raw materials can have a significant effect on our gross margins. Rapid increases in material prices are difficult to pass through to customers. An inability to pass on these higher costs could negatively impact our results of operations or financial condition.

Our participation in multiemployer pension plans could adversely impact our liquidity and results of operations.

        We contribute to over 150 multiemployer pension plans throughout the U.S. We believe that our responsibility for potential withdrawal liabilities associated with participating in multiemployer pension plans is limited because the building and construction trades exemption pursuant to the Employee Retirement Income Security Act of 1974 should apply to the substantial majority of our plan contributions. However, pursuant to the Pension Protection Act of 2006 and other applicable laws, we are exposed to other potential liabilities associated with plans that are underfunded. As of December 31, 2015, we had been notified that certain pension plans were in critical funding status. Currently, certain plans are developing, or have developed, a rehabilitation plan that may call for a reduction in participant benefits or an increase in future employer contributions. Therefore, in the future, we could be responsible for potential surcharges, excise taxes and/or additional contributions related to these plans, which could impact our liquidity and results of operations. While we continue to actively monitor, assess and take steps to limit our potential exposure to any surcharges, excise taxes, additional contributions and/or withdrawal liabilities, any market conditions or the number of participating employers remaining in each plan may result in a reorganization, insolvency or mass withdrawal that could have a material adverse effect on the funded status of multiemployer plans and our potential withdrawal liability.

Foreign exchange risks may affect our ability to realize a profit from certain projects or to obtain projects.

        We generally attempt to denominate our contracts in U.S. dollars or in the currencies of our expenditures. However, we do enter into contracts that subject us to foreign exchange risks, particularly to the extent contract revenue is denominated in a currency different than the contract costs. We may seek to minimize our exposure from foreign exchange risks by limiting foreign currency contracts to those currencies where we have ongoing operating expenditures or entering into hedge contracts if there are limited ongoing expenditures in the same currencies. However, these actions may not always

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eliminate all foreign exchange risks, and such risks have the potential to have an adverse effect on our business, financial condition, cash flow or profit.

Extensive government legislation and regulatory initiatives could increase costs and impose burdensome operating restrictions that may cause operational delays.

        Members of the U.S. Congress and the U.S. Environmental Protection Agency ("EPA") may implement more stringent regulations for hydraulic fracturing, the process of injecting water, sand and chemicals at high pressure underground, which releases natural gas. Currently, Congress and the EPA are studying environmental contamination related to hydraulic fracturing and the impact of fracturing on public health. In March 2015, Congress introduced legislation to regulate hydraulic fracturing and require disclosure of the chemicals used in the hydraulic fracturing process. Additionally, some states have adopted, and others are considering, regulations that could restrict hydraulic fracturing. In March 2015, the Bureau of Land Management issued a final rule to regulate hydraulic fracturing on federal and Indian land. Although the EPA finalized the rule, enforcement is delayed pending a legal challenge in the U.S. District Court of Wyoming.

        Additionally, the EPA has focused its energy on more rulemaking to curb emissions of methane, smog-forming volatile organic compounds and toxic air pollutants from oil and gas sources. Through the New Source Performance Standards, EPA has finalized and plans to finalize in 2016 rules that clarify definitions and implement more stringent emission controls on associated equipment like tanks and compressors used to process and transport natural gas. In August 2015, the EPA finalized rules that clarified the definitions of "low-pressure wells" and "storage vessel," which may affect plant construction. Any new laws, rules, regulations or permitting requirements regarding the oil and natural gas industries could lead to delays in the construction of new gas turbine power plants and/or increased operating costs for existing gas turbine power plants, which could negatively impact demand for our products.

A change in our product mix could adversely affect our results of operations.

        Our results may be affected by a change in our product mix on which our gross margin depends. Changes in our product mix may result from marketing activities to existing customers and needs communicated to us from existing and prospective customers. Our outlook, budgeting and strategic planning assume a certain product mix of sales. If actual results vary from this projected mix or products and services, our financial results could be negatively impacted.

We are subject to anti-bribery laws in the countries in which we operate. Failure to comply with these laws could result in our becoming subject to penalties and the disruption of our business activities.

        Many of the countries in which we transact business have laws that restrict the offer or payment of anything of value to government officials or other persons with the intent of gaining business or favorable government action. We are subject to these laws, as well as, being governed by the U.S. Foreign Corrupt Practices Act restricting these types of activities. In addition to prohibiting certain bribery-related activity with foreign officials and other persons, these laws provide for recordkeeping and reporting obligations. Any failure by us, our subcontractors, agents or others who work for us on our behalf to comply with these legal and regulatory obligations could impact us in a variety of ways that include, but are not limited to, significant criminal, civil and administrative penalties. The failure to comply with these legal and regulatory obligations could also result in the disruption of our business activities and have a material adverse effect on our business and results of operations.

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A change in tax laws, treaties or regulations, or their interpretation, of any country in which we operate could increase our tax burden and otherwise adversely affect our financial condition, results of operations and cash flows.

        A change in tax laws, treaties or regulations, or their interpretation, of any country in which we operate could result in a higher tax rate on our earnings, which could result in a significant negative impact on our earnings and cash flows from operations. We continue to assess the impact of various legislative proposals, including U.S. federal and state proposals, and modifications to existing tax treaties that could result in a material increase in our taxes. We cannot predict whether any specific legislation will be enacted or the terms of any such legislation. However, if such proposals were to be enacted, or if modifications were to be made to certain existing treaties, the consequences could have a material adverse impact on us, including increasing our tax burden, increasing costs of our tax compliance or otherwise adversely affecting our financial condition, results of operations and cash flows.

Work disruptions resulting from the expiration of our collective bargaining agreements or otherwise could result in increased operating costs and adversely affect our operating performance.

        Certain of our temporary Services segment craft employees are represented by labor unions with which we have collective bargaining agreements. There can be no assurance that we will not experience labor disruptions associated with a lengthy strike or the expiration or renegotiation of collective bargaining agreements or other work stoppage at our facilities or at our customer locations, which could adversely affect our operating performance and may result in additional expenses and possible loss of revenue.

Risk Factors Related to Our Common Stock

The market price for our common stock is volatile and our stockholders may not be able to resell their shares of common stock at or above the purchase price paid.

        The market price of our common stock fluctuates significantly and may be affected by numerous factors (some of which are beyond our control), including:

•

The risk factors described in this Item 1A;



•

Actual or anticipated fluctuations in our operating results and financial condition;



•

Changes in laws or regulations and court rulings and trends in our industry;



•

The significant concentration of ownership of our common stock in the hands of a small number of investors;



•

Changes in supply and demand of components and materials;



•

Changes in tax or accounting standards affecting our industry;



•

A shortfall in operating revenue or net income from that expected by securities analysts and investors;



•

Changes in securities analysts' estimates of our financial performance or the financial performance of our competitors or companies in our industry;



•

General conditions in our customers' industries; and



•

The degree of trading liquidity in our common stock and general market conditions.

        From December 31, 2012 to March 10, 2017, the closing price of our common stock ranged from $20.86 to $1.73 per share. Continued declines in the price of our common stock could impede our

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ability to obtain additional capital, attract and retain qualified employees and reduce the liquidity of our common stock. In addition, the reduced stock price also increases the cost to us, in terms of dilution, of using our equity for employee compensation.

        The stock market has from time to time experienced significant price and volume fluctuations that have particularly affected the market prices for the common stock of similarly situated companies. These broad market fluctuations may adversely affect the market price of our common stock.

        We are currently subject to securities class action law suits filed against us. If additional suits were to be filed against us, regardless of the outcome, it could result in substantial costs and a diversion of our management's attention and resources, which could also negatively impact the market price of our stock.

Delisting of our common stock from the New York Stock Exchange ("NYSE") and subsequent quotation on OTC Pink® Marketplace—Limited Information Tier ("OTC") operated by the OTC Markets Group Inc. may continue to decrease the value of our common stock and prevent certain investors from investing or achieving a meaningful degree of liquidity.

        On March 30, 2016, we announced that we expected the NYSE to initiate procedures to delist our common stock, including the issuance of a delisting notice, and that we planned to disclose the receipt of such notice in a subsequent Current Report on Form 8-K. We subsequently received that notice and the NYSE suspended trading in our common stock, effective March 30, 2016, and our common stock was subsequently delisted. As a result, our common stock is now quoted on the OTC. We cannot assure investors that our common stock will be listed on a national exchange such as the NASDAQ Stock Market, the NYSE or another securities exchange once we become current in our filing obligations with the SEC.

        Based upon the fact that our common stock is no longer registered for trading on a national exchange and that the value of our issued and outstanding common stock has decreased in value, there may be investment loss for stockholders or certain stockholders may no longer be permitted to invest in our common stock. Bid quotations on the OTC can be sporadic and may not provide any meaningful liquidity to investors. An investor may find it difficult to dispose of shares or obtain accurate quotations as to the market value of our common stock. As a result of these limitations, our common stock has fewer market makers, lower trading volumes and larger spreads between bid and asked prices than securities listed on a national stock exchange or automated quotation system would typically have.

        Because there may be a limited market and generally low volume of trading in our common stock, the share price of our common stock is more likely to be affected by broad market fluctuations, general market conditions, fluctuations in our operating results, changes in the market's perception of our business, and announcements made by us, our competitors, or parties with whom we have business relationships. There may also be fewer institutional investors willing to hold or acquire our common stock. The lack of liquidity in our common stock may make it difficult for us to issue additional securities for financing or other purposes or to otherwise arrange for any financing that we may need in the future.

        We are also no longer subject to the NYSE's rules, such as corporate governance requirements or the minimum market capitalization and stockholders' equity criteria. Without required compliance with such standards, investor interest in our common stock may decrease. The delisting of our common stock from the NYSE may also result in other negative implications, including the potential loss of confidence by customers, strategic partners and employees and the loss of investor and media interest in us and our common stock.

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We do not currently expect to pay any cash dividends on our common stock, so investors may not receive any return on investment unless investors sell their shares of common stock for a price greater than that which investors paid for them.

        On May 30, 2012, our Board adopted a dividend policy pursuant to which we would pay quarterly dividends on our common stock; however, we have not paid any dividends since March 2015. The costs associated with the restatement of our historical financial results, as well as related matters, has presented a significant financial burden on our company, and the continued operation and expansion of our business has required substantial funding. In addition, our Revolving Credit Facility, as amended, currently prohibits us from paying dividends. Therefore, we do not anticipate paying dividends on our common stock in the foreseeable future.

        Any future determination with respect to the payment of dividends will be at the discretion of the Board and will depend upon our financial condition, results of operations, capital requirements, general business conditions, terms of financing arrangements and other factors that our Board may deem relevant. Future dividends, their timing and amount will be subject to capital availability and periodic determinations by our Board that cash dividends are in the best interest of our stockholders and are in compliance with all of our respective laws and agreements applicable to the declaration and payment of cash dividends, and may be affected by, among other factors: our views on potential future capital requirements for organic initiatives and strategic transactions, including acquisitions; debt service requirements; our credit rating; changes to applicable tax laws or corporate laws; limitations in our Revolving Credit Facility; and changes to our business model. Our dividend payments may change from time to time, and we cannot provide assurance that we will declare dividends of any particular amounts or at all. If we do not pay dividends, then our common stock may be less valuable because a return on investment will occur only if our stock price increases, and such appreciation may not occur.

Actions of activist shareholders could be disruptive and potentially costly, and the possibility that activist shareholders may seek changes that conflict with our strategic direction could cause uncertainty about the strategic direction of our business.

        Activist investors may attempt to effect changes in our strategic direction and how our business is governed, or to acquire control over us to increase short-term stockholder value by advocating corporate actions such as financial restructuring, increased borrowing, special dividends, stock repurchases or even sales of assets or the entire company. In fact, in June 2016, we entered into a nomination agreement with certain of our significant stockholders that had filed a Schedule 13D with the SEC with respect to the Company. Pursuant to that agreement, we agreed to appoint two additional directors to our Board, one of whom would serve as a representative of those investors. Among other things, we also agreed to various standstill provisions and to include the investors' designees in our slate of nominees for election as directors at our next two annual meetings of shareholders. The agreement also provides that, because the Company has not held its 2016 Annual Meeting of stockholders, the significant stockholders have the right to terminate the agreement at any time after January 1, 2017.

        While we welcome varying opinions from all shareholders, activist campaigns that contest or conflict with our strategic direction could have an adverse effect on our results of operations and financial condition, as responding to proxy contests and other actions by activist shareholders can disrupt our operations, be costly and time-consuming and divert the attention of our Board and senior management from the pursuit of business strategies. In addition, perceived uncertainties as to our future direction as a result of changes to the composition of our Board may lead to the perception of a change in the direction of our business, instability or lack of continuity which may be exploited by our competitors, may cause concern to our current or potential customers, may result in the loss of potential business opportunities and may make it more difficult to attract and retain qualified personnel and business partners. These types of actions could cause significant fluctuations in our stock

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price based on temporary or speculative market perceptions or other factors that do not necessarily reflect the underlying fundamentals and prospects of our business.

Future sales of our common stock and any of our other efforts to raise additional capital may depress our stock price.

        Sales of a substantial number of shares of our common stock in the public market or otherwise, either by us, a member of management or a major stockholder, or the perception that these sales could occur, could depress the market price of our common stock and have a material adverse effect on our ability to raise capital through the sale of additional equity securities. We may seek additional capital through a combination of private and public equity and debt offerings. To the extent that we raise additional capital through the sale of equity or convertible debt securities, investor ownership interest will be diluted, and the terms may include liquidation or other preferences that adversely affect investor rights as a stockholder. Additional debt financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions such as incurring additional debt, making capital expenditures or declaring dividends. Any of the above could cause a decline in our stock price.

Item 1B.    Unresolved Staff Comments.

        None.

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Item 2.    Properties.

        Our corporate office is currently located in Irving, Texas. As of December 31, 2015, we had fifteen other U.S. facilities, as well as facilities in the Netherlands, Mexico and China.

        Subsequent to the date of this report, we either sold or engaged in a process to sell the facilities that are listed in the table below as "Owned." For additional information about our properties and transactions occurring subsequent to the date of this report, see "Explanatory Note—Subsequent Events" and "Note 21—Subsequent Events" to our consolidated financial statements.

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Item 3.    Legal Proceedings.

Shareholder Litigation

        A putative shareholder class action, captioned Budde v. Global Power Equipment Group Inc., is pending in the U.S. District Court for the Northern District of Texas. This action and another action were filed in May and June of 2015, and in July of 2015 the court consolidated the two actions and appointed a lead plaintiff. On March 1, 2017, the lead plaintiff filed a consolidated amended complaint that names the Company and two of our former officers as defendants. It alleges violations of the federal securities laws arising out of matters related to our restatement of certain financial periods and claims that we and certain former officers made material misrepresentations and omissions of material fact in our public disclosures concerning those periods in violation of Sections 10(b) and 20(a) of the Exchange Act and Rule 10b-5, as promulgated thereunder. The plaintiffs seek class certification on behalf of persons who acquired our stock between May 1, 2012 and March 30, 2016, more than $150 million of monetary damages on behalf of the putative class and an award of costs and expenses, including attorneys' fees and experts' fees. We intend to defend against this action, but litigation is subject to many uncertainties and the outcome of this action is not predictable with assurance. At this time, we are unable to predict the possible loss or range of loss, if any, associated with the resolution of this litigation, or any potential effect such may have on us or our business or operations.

SEC Investigation

        The Division of Enforcement of the SEC is conducting a formal investigation into possible securities law violations by Global Power relating to disclosures we made concerning certain financial information, including our cost of sales and revenue recognition, as well as related accounting issues. We are cooperating with the SEC in its investigation, including through the production of documents to, and the sharing of information with, the SEC Enforcement Staff. At this time, we cannot predict the outcome or the duration of the SEC investigation or any other legal proceedings or any enforcement actions or other remedies that may be imposed on us arising out of the SEC investigation.

        For a description of our material pending legal and regulatory proceedings and settlements, see "Note 16—Commitments and Contingencies" and "Note 21—Subsequent Events" to our consolidated financial statements.

Item 4.    Mine Safety Disclosures.

        Not applicable.

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Part II

Item 5.    Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.

Market Price of Our Common Stock

        As of December 31, 2015, our common stock was listed on the NYSE under the trading symbol "GLPW." The following table sets forth the high and low sale prices for our common stock based on intra-day high and low prices during the periods indicated:

        Our common stock traded on the NYSE through March 30, 2016. Effective March 30, 2016, the NYSE suspended trading in our securities. Our securities were officially delisted from the NYSE on April 18, 2016. Our shares are currently quoted on the OTC under the symbol "GLPW." The high and low bid information for each quarter since January 1, 2016, as traded on the NYSE through March 30, 2016 and on the OTC beginning March 31, 2016, is as follows:

        The OTC quotations above reflect inter-dealer prices, without retail mark-up, mark down or commissions and may not represent actual transactions. Such quotes are not necessarily representative of actual transactions or of the value of our securities.

        The trading volume for our common stock is relatively limited. An active trading market may not continue to provide adequate liquidity for our existing stockholders or for persons who may acquire our common stock in the future.

Holders

        As of March 10, 2017, there were 17,487,472 shares of our common stock outstanding and approximately 123 holders of record of our common stock. We believe that the number of beneficial holders of our common stock is substantially greater than the number of holders of record.

Dividends

        We have not paid dividends to holders of our common stock since March 2015, and the terms of our Revolving Credit Facility, as amended, currently prevent us from paying dividends. The declaration and payment of future dividends will depend on many factors, including, but not limited to, our earnings, financial condition, business development needs, regulatory considerations and the terms of

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our Revolving Credit Facility, and is at the discretion of our Board of Directors. We currently have no plan in place to pay cash dividends. See "Part I—Item 1A. Risk Factors—We do not currently expect to pay any cash dividends on our common stock, so investors may not receive any return on investment unless they sell their shares of common stock for a price greater than that which they paid for them."

Recent Sales of Unregistered Securities

        During the fiscal year ended December 31, 2015, we did not sell any of our equity securities in transactions that were not registered under the Securities Act of 1933, as amended.

Securities Authorized for Issuance under Equity Compensation Plans

        The disclosure required by this Item is included under "Part III—Item 11. Executive Compensation" of this Form 10-K.

Purchases of Equity Securities by the Company and Affiliated Purchasers

        Neither we, nor any "affiliated purchaser," as defined in SEC Rule 10b-18(a)(3), purchased any of our equity securities during the years ended December 31, 2015, 2014 or 2013.

Equity Compensation Plan Information

        For a discussion of our equity compensation plan information, see "Part III—Item 11. Executive Compensation."

Five-Year Stock Performance Table

        The stock price performance graph below shall not be deemed soliciting material or to be filed with the SEC or subject to Regulation 14A or 14C under the Exchange Act or to the liabilities of Section 18 of the Exchange Act, nor shall it be incorporated by reference into any past or future filing under the Securities Act of 1933 or the Exchange Act, except to the extent we specifically request that it be treated as soliciting material or specifically incorporate it by reference into a filing under the Securities Act or the Exchange Act.

        The following graph illustrates the five-year cumulative total return on investments in our common stock (GLPW), our peer group and the Russell 2000 Index. These indices are prepared by Zacks Investment Research, Inc. Our common stock is quoted on the OTC market and was previously listed on the NYSE. The shareholder return shown below is not necessarily indicative of future performance. Total return, as shown, assumes $100 invested on December 31, 2010 in shares of our peer group and the Russell 2000 Index, all with cash dividends reinvested. The calculations exclude trading commissions and taxes.

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Item 6.    Selected Financial Data (Restated)

Five-Year Summary of Selected Financial Data

        The following selected financial data are derived from the audited consolidated financial statements for the years ended December 31, 2015, 2014 (restated) and 2013 (restated) and from the unaudited restated consolidated financial statements of the Company for the years ended December 31, 2012 (restated) and 2011 (restated, as described below) and should be read in conjunction with "Part I—Item 1A. Risk Factors," "Part II—Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations," "Part II—Item 8. Financial Statements and Supplementary Data" and our consolidated financial statements and the related notes included in this Form 10-K.

        We have not amended our previously filed Annual Reports on Form 10-K or Quarterly Reports on Form 10-Q for the periods affected by the restatement. The financial information that has been previously filed or otherwise reported for these periods is superseded by the information in this Form 10-K, and the financial statements and related financial information contained in such previously filed reports should no longer be relied upon. The information presented in the following tables has been updated to reflect the effects of the restatement of our financial results, which is more fully described in "Note 2—Restatement" to our consolidated financial statements. For further information that will help investors better understand the summary data, please read this financial data in conjunction with "Part II—Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations" and our consolidated financial statements and related notes included in "Part II—Item 8. Financial Statements and Supplementary Data" and other financial information

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included elsewhere in this report. These historical results are not necessarily indicative of results to be expected for any future periods.

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Quarterly Financial Data—Unaudited

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