• TPI Composites, Inc. Announces Third Quarter 2024 Earnings Results – Operational Execution and Strategic Initiatives Drive Improved Profitability

    ソース: Nasdaq GlobeNewswire / 07 11 2024 16:05:02   America/New_York

    SCOTTSDALE, Ariz., Nov. 07, 2024 (GLOBE NEWSWIRE) -- TPI Composites, Inc. (Nasdaq: TPIC), today reported financial results for the third quarter ended September 30, 2024.

    “The third quarter marked a significant improvement for the company, showcasing improved profitability with positive adjusted EBITDA. This improvement was largely driven by 89% utilization in our plants as we made progress on transitioning/starting up ten lines with next-generation workhorse blades. Our results also benefited from eliminating losses that had been burdening our financial performance by divesting the Automotive business and shutting down the Nordex Matamoros plant at the end of the second quarter of this year. Sales reached $380.8 million, reflecting 23% sequential, quarterly growth, and positioning us well to achieve the mid-point of our full-year sales guidance,” said Bill Siwek, President and CEO of TPI Composites.”

    “We believe we are well positioned to capitalize on the long-term growth expected in the U.S. onshore wind market as well as to capitalize on the growth with the blades we now have in production. We expect strong demand in the U.S. in the near term that will push our plants in Mexico to near capacity utilization in 2025. We have also agreed with GE Vernova to reopen our Iowa plant in mid-2025 and we have secured additional capacity in the U.S. to meet the needs of our customers. Outside of the U.S. market, we expect that we will continue to face some inflationary challenges in Türkiye and brisk competitive challenges from Chinese manufacturers and therefore our near-term volumes in those regions are still a bit fluid. While our operating environment is pretty dynamic right now, we believe our strong focus on safety, quality, LEAN and technological innovation will allow us to continue to successfully compete at the highest level in the long term.”

    Third Quarter 2024 Results and Recent Business Highlights

    • Net Sales totaled $380.8 million for the three months ended September 30, 2024, an increase of 2.8% over the same period last year.
    • Net loss from continuing operations attributable to common stockholders was $38.6 million for the three months ended September 30, 2024, compared to a net loss of $43.0 million in the same period last year.
    • Adjusted EBITDA was $8.0 million for the three months ended September 30, 2024, compared to adjusted EBITDA of $0.2 million in the same period last year.
    • Line startup and transitions are fully executed with all ten lines producing next-generation blades.
           
    KPIs from continuing operations 
    		 3Q’24  3Q’23 
     Sets1 601  666 
     Estimated megawatts2 2,526  2,892 
     Utilization3 89%  85% 
     Dedicated manufacturing lines4 34  37 
     Manufacturing lines installed5 34  37 
     Wind Blade ASP (in $ thousands)6$199 $176 
    1. Number of wind blade sets (which consist of three wind blades) produced worldwide during the period.
    2. Estimated megawatts of energy capacity to be generated by wind blade sets produced during the period.
    3. Utilization represents the percentage of wind blades invoiced during the period compared to the total potential wind blade capacity of manufacturing lines installed during the period.
    4. Number of wind blade manufacturing lines that are dedicated to our customers under long-term supply agreements at the end of the period.
    5. Number of wind blade manufacturing lines installed and either in operation, startup or transition during the period.
    6. Wind blade ASP represents the average sales price during the period for a single wind blade that we manufacture for our customers.

    Third Quarter 2024 Financial Results from Continuing Operations

    Net sales for the three months ended September 30, 2024, increased 2.8% to $380.8 million as compared to $370.2 million in the same period in 2023 due to the following:

    • Net Sales of wind blades, tooling and other wind related sales (“Wind”) increased by $6.9 million, or 1.9%, to $369.1 million for the three months ended September 30, 2024, as compared to $362.2 million in the same period in 2023. The increase was primarily due to higher average sales prices of wind blades due to changes in the mix of wind blade models produced, in particular the startup of production at one of our previously idled facilities in Juarez, Mexico, favorable foreign currency fluctuations, and an increase in wind blade inventory included in contract assets driven by the startups and transitions. The increase in wind blade inventory directly correlates to higher sales under the cost-to-cost revenue recognition method for our wind blade contracts. This increase was partially offset by a 10% decrease in the number of wind blades produced due primarily to the number and pace of startups and transitions and expected volume declines based on market activity levels.
    • Field service, inspection and repair services (“Field Services”) sales increased $3.7 million, or 45.8%, to $11.7 million for the three months ended September 30, 2024, as compared to $8.0 million in the same period in 2023. The increase was due primarily to the return of technicians deployed to revenue generating projects versus time spent on non-revenue generating inspection and repair activities.

    Net loss from continuing operations attributable to common stockholders was $38.6 million for the three months ended September 30, 2024, compared to a net loss of $43.0 million in the same period in 2023. The decrease in net loss was primarily driven by the absence of losses from our Nordex Matamoros facility, which was shut down at the end of the second quarter of 2024, lower charges for changes in estimate for pre-existing warranties, a reduction in general and administrative cost due to lower employee compensation costs, an increase in revenue, benefits from foreign currency fluctuations, and a lower income tax provision. These improvements were partially offset by increased labor cost in Türkiye and Mexico, higher start up and transition costs, and higher asset impairments from our tooling business. In addition, the net loss from continuing operations attributable to common stockholders for the three months ended September 30, 2024 includes $24.2 million of interest expense compared to $1.6 million of interest expense and $16.0 million of preferred stock dividends and accretion in the same period in 2023 as result of the Oaktree refinancing of their preferred stock into a senior term loan in December of 2023.

    The net loss from continuing operations per common share was $0.81 for the three months ended September 30, 2024, compared to a net loss per common share of $1.01 for the same period in 2023.

    Adjusted EBITDA was $8.0 million for the three months ended September 30, 2024, as compared to adjusted EBITDA of $0.2 million during the same period in 2023. Adjusted EBITDA margin was 2.1% as compared to an adjusted EBITDA margin of 0.1% during the same period in 2023. The increase was primarily driven by the absence of losses from our Nordex Matamoros facility, which was shut down at the end of the second quarter of 2024, benefits from foreign currency fluctuations, lower charges for changes in estimate for pre-existing warranties, a reduction in general and administrative cost due to lower employee compensation costs, and an increase in revenue. These improvements were partially offset by increased labor cost in Türkiye and Mexico and higher start up and transition costs.

    Net cash provided by operating activities improved by $12.7 million for the three months ended September 30, 2024, as compared to the same period in 2023, primarily due to higher adjusted EBITDA in the current period and other working capital changes, partially offset by an increase in cash paid for taxes and interest.

    Net cash used in investing activities increased by $10.4 million for the three months ended September 30, 2024, as compared to the same period in 2023, primarily due to capital expenditures for the startup and transition of our manufacturing lines at our facilities in Mexico and Türkiye and the sale of our Taicang, China facility in the prior year.

    2024 Guidance

    Guidance for the full year ending December 31, 2024:

    GuidanceFull Year 2024
    Net Sales from Continuing OperationsApproximately $1.35 billion, previously guided in the range of $1.3 - $1.4 billion
    Adjusted EBITDA Margin % from Continuing OperationsA loss of approximately (2%), previously guided approximately 1%
    Utilization %75% to 80% (based on 34 lines installed)
    Capital ExpendituresApproximately $30 million, previously guided in the range of $25 - $30 million
      

    Conference Call and Webcast Information

    TPI Composites will host an investor conference call this afternoon, Thursday, November 7th, at 5:00 pm ET. Interested parties are invited to listen to the conference call which can be accessed live over the phone by dialing 1-800-343-4849, or for international callers, 1-203-518-9843. The Conference ID for the live call is “TPIC”. A replay will be available two hours after the call and can be accessed by dialing 1-844-512-2921, or for international callers, 1-412-317-6671. The passcode for the live call and the replay is 11157090. The replay will be available until November 21, 2024. Interested investors and other parties may also listen to a simultaneous webcast of the conference call by logging onto the Investors section of the Company’s website at www.tpicomposites.com. The online replay will be available for a limited time beginning immediately following the call.

    About TPI Composites, Inc.

    TPI Composites, Inc. is a global company focused on innovative and sustainable solutions to decarbonize and electrify the world. TPI delivers high-quality, cost-effective composite solutions through long-term relationships with leading OEMs in the wind markets. TPI is headquartered in Scottsdale, Arizona and operates factories in the U.S., Mexico, Türkiye and India. TPI operates additional engineering development centers in Denmark and Germany and global service training centers in the U.S. and Spain.

    Forward-Looking Statements

    This release contains forward-looking statements which are made pursuant to safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include statements, among other things, concerning: growth of the wind energy and electric vehicle markets and our addressable markets for our products and services; effects on our financial statements and our financial outlook; our business strategy, including anticipated trends and developments in and management plans for our business and the wind industry and other markets in which we operate; competition; future financial results, operating results, revenues, gross margin, operating expenses, profitability, products, projected costs, warranties, our ability to improve our operating margins, and capital expenditures. These forward-looking statements are often characterized by the use of words such as “estimate,” “expect,” “anticipate,” “project,” “plan,” “intend,” “seek,” “believe,” “forecast,” “foresee,” “likely,” “may,” “should,” “goal,” “target,” “might,” “will,” “could,” “predict,” “continue” and the negative or plural of these words and other comparable terminology. Forward-looking statements are only predictions based on our current expectations and our projections about future events. You should not place undue reliance on these forward-looking statements. We undertake no obligation to update any of these forward-looking statements for any reason. These forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance, or achievements to differ materially from those expressed or implied by these statements. These factors include, but are not limited to, the matters discussed in “Risk Factors,” in our Annual Report on Form 10-K and other reports that we will file with the SEC.

    Non-GAAP Definitions
    This press release includes unaudited non-GAAP financial measures, including EBITDA, adjusted EBITDA, net cash (debt) and free cash flow. We define EBITDA as net income (loss) plus interest expense (including losses on the extinguishment of debt and net of interest income), income taxes and depreciation and amortization, preferred stock dividends and accretion less gain on extinguishment on series A preferred stock. We define adjusted EBITDA as EBITDA plus any share-based compensation expense, any foreign currency income or losses, any gains or losses on the sale of assets and asset impairments and any restructuring charges. We define net cash (debt) as the total unrestricted cash and cash equivalents less the total principal amount of debt outstanding. We define free cash flow as net cash flow from operating activities less capital expenditures. We present non-GAAP measures when we believe that the additional information is useful and meaningful to investors. Non-GAAP financial measures do not have any standardized meaning and are therefore unlikely to be comparable to similar measures presented by other companies. The presentation of non-GAAP financial measures is not intended to be a substitute for, and should not be considered in isolation from, the financial measures reported in accordance with GAAP.

    We provide forward-looking statements in the form of guidance in our quarterly earnings releases and during our quarterly earnings conference calls. This guidance is provided on a non-GAAP basis and cannot be reconciled to the closest GAAP measures without unreasonable effort because of the unpredictability of the amounts and timing of events affecting the items we exclude from non-GAAP measures. For example, stock-based compensation is unpredictable for our performance-based awards, which can fluctuate significantly based on current expectations of future achievement of performance-based targets. Amortization of intangible assets and restructuring costs are all impacted by the timing and size of potential future actions, which are difficult to predict. In addition, from time to time, we exclude certain items that occur infrequently, which are also inherently difficult to predict and estimate. It is also difficult to predict the tax effect of the items we exclude and to estimate certain discrete tax items, like the resolution of tax audits or changes to tax laws. As such, the costs that are being excluded from non-GAAP guidance are difficult to predict and a reconciliation or a range of results could lead to disclosure that would be imprecise or potentially misleading. Material changes to any one of the exclusions could have a significant effect on our guidance and future GAAP results. See Table Four for a reconciliation of certain non-GAAP financial measures to the comparable GAAP measures.

    Investor Relations
    480-315-8742
    Investors@TPIComposites.com

              
    TPI COMPOSITES, INC. AND SUBSIDIARIES
    TABLE ONE - CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
    (UNAUDITED)
              
     Three Months Ended
    September 30,
    		 Nine Months Ended
    September 30,
    (in thousands, except per share data)20242023 20242023
    Net sales$380,762 $370,242  $984,625 $1,138,068 
    Cost of sales369,882 367,915  982,939 1,163,429 
    Startup and transition costs8,113 4,817  51,020 10,174 
    Total cost of goods sold377,995 372,732  1,033,959 1,173,603 
    Gross profit (loss)2,767 (2,490) (49,334)(35,535)
    General and administrative expenses4,717 8,817  22,331 22,618 
    Loss on sale of assets and asset impairments9,196 5,164  14,114 14,576 
    Restructuring charges, net428 710  908 2,934 
    Loss from continuing operations(11,574)(17,181) (86,687)(75,663)
    Other income (expense):         
    Interest expense, net(24,194)(1,625) (68,005)(6,026)
    Foreign currency loss(2,346)(511) (2,845)(3,257)
    Miscellaneous income759 376  3,461 1,491 
    Total other expense(25,781)(1,760) (67,389)(7,792)
    Loss before income taxes(37,355)(18,941) (154,076)(83,455)
    Income tax provision(1,241)(8,007) (6,895)(12,123)
    Net loss from continuing operations(38,596)(26,948) (160,971)(95,578)
    Preferred stock dividends and accretion- (16,031) - (46,802)
    Net loss from continuing operations attributable to common stockholders(38,596)(42,979) (160,971)(142,380)
    Net loss from discontinued operations(1,472)(29,867) (31,654)(48,601)
    Net loss attributable to common stockholders$(40,068)$(72,846) $(192,625)$(190,981)
              
    Weighted-average shares of common stock outstanding:         
    Basic47,556 42,570  47,422 42,448 
    Diluted47,556 42,570  47,422 42,448 
              
    Net loss from continuing operations per common share:         
    Basic$(0.81)$(1.01) $(3.39)$(3.36)
    Diluted$(0.81)$(1.01) $(3.39)$(3.36)
              
    Net loss from discontinued operations per common share:         
    Basic$(0.03)$(0.70) $(0.67)$(1.14)
    Diluted$(0.03)$(0.70) $(0.67)$(1.14)
              
    Net loss per common share:         
    Basic$(0.84)$(1.71) $(4.06)$(4.50)
    Diluted$(0.84)$(1.71) $(4.06)$(4.50)
              
    Non-GAAP Measures (unaudited):         
    EBITDA$(5,590)$(8,638) $(63,128)$(50,191)
    Adjusted EBITDA$8,014 $215  $(39,940)$(20,431)
              


    TPI COMPOSITES, INC. AND SUBSIDIARIES
    TABLE TWO - CONDENSED CONSOLIDATED BALANCE SHEETS
    (UNAUDITED)
     September 30,December 31,
    (in thousands)20242023
    Assets    
    Current assets:    
    Cash and cash equivalents$125,871 $161,059 
    Restricted cash9,576 10,838 
    Accounts receivable150,186 138,029 
    Contract assets124,851 112,237 
    Prepaid expenses19,940 17,621 
    Other current assets26,775 34,564 
    Inventories4,518 9,420 
    Assets held for sale4,966 - 
    Current assets of discontinued operations865 19,307 
    Total current assets467,548 503,075 
    Noncurrent assets:    
    Property, plant and equipment, net116,282 128,808 
    Operating lease right of use assets130,739 136,124 
    Other noncurrent assets38,076 36,073 
    Total assets$752,645 $804,080 
         
    Liabilities and Stockholders' Deficit    
    Current liabilities:    
    Accounts payable and accrued expenses$286,245 $227,723 
    Accrued warranty35,251 37,483 
    Current maturities of long-term debt139,845 70,465 
    Current operating lease liabilities26,100 22,017 
    Contract liabilities2,768 24,021 
    Liabilities held for sale1,073 - 
    Current liabilities of discontinued operations1,782 4,712 
    Total current liabilities493,064 386,421 
    Noncurrent liabilities:    
    Long-term debt, net of current maturities465,989 414,728 
    Noncurrent operating lease liabilities108,096 117,133 
    Other noncurrent liabilities7,491 8,102 
    Total liabilities1,074,640 926,384 
    Total stockholders’ deficit(321,995)(122,304)
    Total liabilities and stockholders’ deficit$752,645 $804,080 
         
    Non-GAAP Measure (unaudited):    
    Net debt$(479,228)$(323,218)
         


     TPI COMPOSITES, INC. AND SUBSIDIARIES
     TABLE THREE - CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
     (UNAUDITED)
     
     Three Months Ended
    September 30,
    		 Nine Months Ended
    September 30,
    (in thousands)20242023 20242023
              
    Net cash provided by (used in) operating activities$              1,065 $           (11,654) $           (74,843)$           (85,908)
    Net cash provided by (used in) investing activities(6,674)3,684  (22,079) (3,010)
    Net cash provided by financing activities31,369 920  60,776 109,029 
    Impact of foreign exchange rates on cash, cash equivalents and restricted cash(616) (214)  (485) 700 
    Cash, cash equivalents and restricted cash, beginning of period111,038 181,144  172,813 153,069 
    Cash, cash equivalents and restricted cash, end of period$           136,182 $           173,880  $           136,182 $           173,880 
              
    Non-GAAP Measure (unaudited):         
    Free cash flow$             (5,609) $           (20,806)  $           (96,922) $          (101,754)
              


     TPI COMPOSITES, INC. AND SUBSIDIARIES
     TABLE FOUR - RECONCILIATION OF NON-GAAP MEASURES
     (UNAUDITED)
              
    EBITDA and adjusted EBITDA are reconciled as follows:Three Months Ended
    September 30,
    		 Nine Months Ended
    September 30,
    (in thousands)20242023 20242023
    Net loss attributable to common stockholders$           (40,068)$           (72,846) $          (192,625)$          (190,981)
    Net loss from discontinued operations1,472 29,867  31,654 48,601 
    Net loss from continuing operations attributable to common stockholders(38,596) (42,979)  (160,971) (142,380)
    Preferred stock dividends and accretion- 16,031  - 46,802 
    Net loss from continuing operations(38,596) (26,948)  (160,971) (95,578)
    Adjustments:         
    Depreciation and amortization7,571 8,678  22,943 27,238 
    Interest expense, net24,194 1,625  68,005 6,026 
    Income tax provision1,241 8,007  6,895 12,123 
    EBITDA(5,590) (8,638)  (63,128) (50,191)
    Share-based compensation expense1,634 2,468  5,321 8,993 
    Foreign currency loss2,346 511  2,845 3,257 
    Loss on sale of assets and asset impairments9,196 5,164  14,114 14,576 
    Restructuring charges, net428 710  908 2,934 
    Adjusted EBITDA$              8,014 $                 215  $           (39,940) $           (20,431)
              
    Net debt is reconciled as follows:     September 30, December 31, 
    (in thousands)     2024 2023 
    Cash and cash equivalents     $           125,871 $           161,059 
    Cash and cash equivalents of discontinued operations     735 916 
    Total debt, net of debt issuance costs and debt discount     (605,834) (485,193)
    Net debt     $          (479,228) $          (323,218)
              
    Free cash flow is reconciled as follows:Three Months Ended
    September 30,    		 Nine Months Ended
    September 30,
    (in thousands)20242023 20242023
    Net cash provided by (used in) operating activities$              1,065 $           (11,654)  $           (74,843) $           (85,908)
    Capital expenditures(6,674) (9,152)  (22,079) (15,846)
    Free cash flow$             (5,609) $           (20,806)  $           (96,922) $          (101,754)
              

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