Core Viewpoint - TPI Composites, Inc. (TPIC) has filed for bankruptcy protection to facilitate a stable transition of its business operations [1] Group 1: Bankruptcy Filing - The bankruptcy filing aims to achieve a stable transition in business operations [1] - TPI plans to utilize financing to continue paying employee wages, maintain supplier relationships, and ensure the delivery of existing customer orders [1]

Core Points - TPI Composites, Inc. has received approval from the U.S. Bankruptcy Court for its voluntary chapter 11 proceedings, allowing the company to maintain operations and focus on long-term stability [1][2][3] - The court's approval includes interim debtor-in-possession financing of up to $82.5 million, ensuring employee wages and benefits continue, and allowing the company to pay critical prepetition obligations [2][3] - The CEO emphasized the priority of maintaining stability and support for employees, customers, and partners during the chapter 11 process [3] Company Overview - TPI Composites is a global company focused on innovative and sustainable solutions aimed at decarbonizing and electrifying the world, with operations in the U.S., Mexico, Türkiye, and India [4] - The company specializes in delivering high-quality, cost-effective composite solutions, particularly in the wind energy sector, through long-term relationships with leading OEMs [4]

Company Performance - TPI Composites reported a quarterly loss of $1.41 per share, significantly worse than the Zacks Consensus Estimate of a loss of $0.54, marking an earnings surprise of -161.11% [1] - The company posted revenues of $276.25 million for the quarter ended June 2025, missing the Zacks Consensus Estimate by 25.41%, and down from $309.82 million a year ago [2] - TPI Composites has not surpassed consensus EPS estimates over the last four quarters and has only topped consensus revenue estimates twice in that period [2] Stock Performance - TPI Composites shares have declined approximately 83.1% since the beginning of the year, contrasting with the S&P 500's gain of 8.6% [3] - The current consensus EPS estimate for the upcoming quarter is -$0.27 on revenues of $380.91 million, and for the current fiscal year, it is -$2.49 on revenues of $1.44 billion [7] Industry Outlook - The Industrial Services industry, to which TPI Composites belongs, is currently ranked in the top 29% of over 250 Zacks industries, indicating a favorable outlook compared to the bottom 50% [8] - The performance of TPI Composites may be influenced by the overall industry outlook, as empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions [5][8]

Financial Restructuring - TPI Composites filed for Chapter 11 bankruptcy to restructure its debt [1] - The restructuring is supported by lender Oaktree [1] Industry Impact - TPI Composites is a wind turbine blade manufacturer [1]

PART I. FINANCIAL INFORMATION [Item 1. Condensed Consolidated Financial Statements (Unaudited)](index=10&type=section&id=ITEM%201.%20Condensed%20Consolidated%20Financial%20Statements%20(Unaudited)) The unaudited condensed consolidated financial statements for the period ended June 30, 2025, reflect significant financial distress, culminating in a Chapter 11 bankruptcy filing, with a **$632.3 thousand** working capital deficiency, a **$485.4 thousand** stockholders' deficit, and a **$116.5 thousand** net loss - On August 11, 2025, the company and certain subsidiaries filed for Chapter 11 bankruptcy protection to facilitate a financial and operational restructuring, constituting an event of default and accelerating debt obligations[10](index=10&type=chunk)[11](index=11&type=chunk)[47](index=47&type=chunk) - Management has concluded that substantial doubt exists about the Company's ability to continue as a going concern, citing the Chapter 11 filing, a working capital deficiency of **$632.3 thousand**, a net loss of **$116.5 thousand** for the six-month period, and constrained liquidity[12](index=12&type=chunk)[45](index=45&type=chunk)[46](index=46&type=chunk) Key Financial Position Data (as of June 30, 2025) | Metric | June 30, 2025 (in thousands) | December 31, 2024 (in thousands) | | :--- | :--- | :--- | | Cash and cash equivalents | $106,419 | $196,518 | | Total Current Assets | $348,668 | $445,090 | | Total Assets | $591,709 | $692,464 | | Total Current Liabilities | $981,012 | $473,968 | | Long-term debt, net | $0 | $485,239 | | Total Liabilities | $1,077,146 | $1,065,700 | | Total stockholders' deficit | $(485,437) | $(373,236) | Condensed Consolidated Statements of Operations Highlights | Metric (in thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Net sales | $612,402 | $603,863 | | Gross loss | $(42,960) | $(52,101) | | Loss from continuing operations | $(62,198) | $(75,113) | | Net loss attributable to common stockholders | $(116,540) | $(152,557) | | Net loss per common share (Basic) | $(2.41) | $(3.22) | [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=40&type=section&id=ITEM%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management's discussion centers on the voluntary Chapter 11 bankruptcy filing on August 11, 2025, aimed at restructuring the company's finances, with operational challenges including a labor strike in Türkiye and a production stoppage in Mexico, leading to a **$90.6 thousand** cash decrease and a 'going concern' warning - The company filed for Chapter 11 bankruptcy on August 11, 2025, to restructure its business and balance sheet, continuing operations as a 'debtor-in-possession'[134](index=134&type=chunk)[135](index=135&type=chunk) - Significant operational challenges in Q2 2025 included an ongoing labor strike in Türkiye starting May 13, 2025, and a temporary production stoppage in Mexico, both of which negatively impacted production volumes and financial results[145](index=145&type=chunk)[146](index=146&type=chunk) - The company received a non-compliance notice from Nasdaq on August 8, 2025, for its stock price falling below the **$1.00** minimum bid requirement and expects to be delisted due to the Chapter 11 filing[138](index=138&type=chunk)[232](index=232&type=chunk) Key Financial Measures Summary | Metric (in thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Net sales | $612,402 | $603,863 | | Net loss from continuing operations | $(116,866) | $(122,375) | | Adjusted EBITDA | $(36,739) | $(47,953) | | Free cash flow | $(31,785) | $(91,313) | [Results of Operations](index=47&type=section&id=Results%20of%20Operations) For the six months ended June 30, 2025, net sales increased by 1.4% to **$612.4 thousand**, driven by a 24.1% increase in the Mexico segment offsetting declines in EMEA and India, with gross loss decreasing due to lower startup costs and facility shutdown, narrowing the loss from continuing operations to **$62.2 thousand** Net Sales by Segment (Six Months Ended June 30) | Segment | 2025 (in thousands) | 2024 (in thousands) | % Change | | :--- | :--- | :--- | :--- | | U.S. | $17,685 | $6,760 | 161.6% | | Mexico | $386,806 | $311,769 | 24.1% | | EMEA | $136,454 | $201,505 | (32.3)% | | India | $71,457 | $83,829 | (14.8)% | | **Total** | **$612,402** | **$603,863** | **1.4%** | - The decrease in EMEA sales was primarily due to a **41%** net decrease in wind blades produced in Türkiye, caused by an ongoing labor strike that commenced on May 13, 2025[160](index=160&type=chunk) - Total cost of goods sold decreased as a percentage of sales, mainly due to a **$25.9 million** (**60.3%**) reduction in startup and transition costs compared to the prior year[162](index=162&type=chunk)[164](index=164&type=chunk) [Liquidity and Capital Resources](index=55&type=section&id=Liquidity%20and%20Capital%20Resources) The company's liquidity has been severely strained, with unrestricted cash and equivalents falling to **$106.4 thousand** at June 30, 2025, from **$196.5 thousand** at year-end 2024, leading to a Chapter 11 filing that accelerated approximately **$600 million** in debt obligations and raised substantial doubt about going concern - Unrestricted cash and cash equivalents decreased by **$90.1 thousand**, from **$196.5 thousand** at Dec 31, 2024, to **$106.4 thousand** at June 30, 2025[181](index=181&type=chunk) - The Chapter 11 filing constituted an event of default, accelerating debt obligations of approximately **$465.9 million** under the Credit Agreement and **$132.5 million** under the Convertible Notes[184](index=184&type=chunk) Cash Flow Summary (Six Months Ended June 30) | Cash Flow Activity (in thousands) | 2025 | 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | $(21,569) | $(75,908) | | Net cash used in investing activities | $(10,216) | $(15,405) | | Net cash (used in) provided by financing activities | $(56,181) | $29,407 | | **Net change in cash** | **$(90,570)** | **$(61,775)** | [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=58&type=section&id=ITEM%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company is primarily exposed to market risks from foreign currency exchange rates and commodity prices, with a hypothetical **10%** change in exchange rates impacting income from operations by approximately **$9.4 million**, and a **10%** change in resin prices impacting income by about **$4.1 million** - A hypothetical **10%** change in foreign currency exchange rates would have resulted in a change to income from operations of approximately **$9.4 million** for the six months ended June 30, 2025[195](index=195&type=chunk) - A **10%** change in the price of resin and resin systems would impact income from operations by approximately **$4.1 million** for the six months ended June 30, 2025, after accounting for customer cost-sharing agreements[198](index=198&type=chunk) - As of June 30, 2025, all financing obligations are fixed-rate instruments, minimizing exposure to interest rate fluctuations[199](index=199&type=chunk) [Item 4. Controls and Procedures](index=60&type=section&id=ITEM%204.%20Controls%20and%20Procedures) Management, including the CEO and CFO, concluded that the company's disclosure controls and procedures were effective as of June 30, 2025, with no material changes to internal control over financial reporting during the quarter - The Chief Executive Officer and Chief Financial Officer concluded that the company's disclosure controls and procedures were effective as of June 30, 2025[201](index=201&type=chunk) - No material changes to the internal control over financial reporting were identified during the three months ended June 30, 2025[202](index=202&type=chunk) PART II. OTHER INFORMATION [Item 1. Legal Proceedings](index=61&type=section&id=ITEM%201.%20Legal%20Proceedings) The company is involved in a legal proceeding in Germany related to the Senvion insolvency, defending against a **$13.3 million** voidance claim, with the Chapter 11 filing resulting in an automatic stay on most legal proceedings - The company is defending against a **$13.3 million** voidance claim from the Senvion insolvency estate, with an independent expert's report in July 2025 largely supporting the company's position that Senvion was solvent when payments were made[106](index=106&type=chunk)[108](index=108&type=chunk) - The filing of the Chapter 11 Cases automatically stayed most legal proceedings against the company to recover on claims arising before the petition date[109](index=109&type=chunk) [Item 1A. Risk Factors](index=61&type=section&id=ITEM%201A.%20Risk%20Factors) This section introduces significant new risks arising from the Chapter 11 bankruptcy filing, including substantial doubt about the company's ability to continue as a going concern, the high probability of common stock cancellation, and numerous uncertainties of the bankruptcy process - The company has identified conditions that raise substantial doubt about its ability to continue as a going concern, which could adversely impact its business, reputation, and relationships[207](index=207&type=chunk) - It is expected that the company's common stock will be cancelled as part of the Chapter 11 cases, with no value distributed to shareholders, and trading in the stock is described as highly speculative[208](index=208&type=chunk) - The company is subject to numerous risks associated with the Chapter 11 process, including the ability to confirm a reorganization plan, the high costs of the proceedings, and potential loss of confidence from customers and suppliers[209](index=209&type=chunk)[210](index=210&type=chunk)[215](index=215&type=chunk) - The company expects its common stock to be delisted from Nasdaq as a result of the Chapter 11 filing, which will adversely affect the stock's liquidity and market price[224](index=224&type=chunk) [Item 3. Defaults Upon Senior Securities](index=69&type=section&id=ITEM%203.%20Defaults%20Upon%20Senior%20Securities) The company's Chapter 11 bankruptcy filing on August 11, 2025, constituted an event of default under certain debt agreements, accelerating principal and interest, though creditor enforcement actions are automatically stayed - The Chapter 11 filing on August 11, 2025, triggered an event of default and acceleration of debt under certain senior securities agreements[230](index=230&type=chunk) [Item 5. Other Information](index=69&type=section&id=ITEM%205.%20Other%20Information) On August 8, 2025, Nasdaq notified the company of non-compliance with the minimum **$1.00** bid price requirement, though the company anticipates imminent delisting due to the Chapter 11 filing, rendering the compliance period moot - On August 8, 2025, Nasdaq notified the company of non-compliance with the minimum **$1.00** bid price rule, giving it until February 4, 2026, to regain compliance[232](index=232&type=chunk)[233](index=233&type=chunk) - The company anticipates being delisted from Nasdaq imminently due to the Chapter 11 filing, which would supersede the bid price compliance issue[234](index=234&type=chunk) [Item 6. Exhibits](index=70&type=section&id=ITEM%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including CEO and CFO certifications pursuant to Sarbanes-Oxley Act Sections 302 and 906, and Inline XBRL data files

Core Points - TPI Composites, Inc. has initiated voluntary chapter 11 proceedings to pursue a comprehensive restructuring aimed at emerging as a stronger enterprise [2][3] - The company has secured a debtor-in-possession financing facility of up to $82.5 million from senior secured lenders, including Oaktree Capital Management, to support operations during the restructuring process [2][3] - TPI will continue normal operations throughout the chapter 11 process, ensuring no material operational impact [3][4] Financial Support and Restructuring - The DIP financing includes up to $27.5 million in new money for day-to-day operations and up to $55 million rolled up from the existing senior secured credit facility [2] - The anticipated cash collateral to be used is approximately $50 million, reflecting the lenders' confidence in the company's future [2] - The company aims to reach an agreement with stakeholders on a reorganization plan to right-size its balance sheet and enhance competitiveness [3] Operational Continuity - TPI will continue to honor obligations to key stakeholders, including employee wages and supplier payments, during the chapter 11 proceedings [4] - The company emphasizes its commitment to serving customers and collaborating with suppliers while maintaining manufacturing operations [3][4] Company Overview - TPI Composites is focused on innovative and sustainable solutions in the wind energy sector, operating globally with manufacturing facilities in the U.S., Mexico, Türkiye, and India [7] - The company has established long-term relationships with leading OEMs in the wind markets, positioning itself for future growth [7]

Core Insights - TPI Composites, Inc. is sponsoring the wind tunnel competition at the World KidWind Challenge during the CLEANPOWER Conference in Phoenix, Arizona from May 18-21, 2025 [1][2] - The World KidWind Challenge is designed to engage students in wind energy through hands-on design, building, and testing of small-scale wind turbines [2] - TPI Composites aims to support the next generation of renewable energy leaders through this sponsorship, emphasizing the importance of innovative solutions for a sustainable future [3] Company Overview - TPI Composites, Inc. focuses on innovative and sustainable solutions to decarbonize and electrify the world, delivering high-quality composite solutions through long-term relationships with leading OEMs in the wind market [4] - The company is headquartered in Scottsdale, Arizona, and operates factories in the U.S., Mexico, Türkiye, and India, along with engineering development centers in Denmark and Germany [4] Industry Context - The KidWind Project provides clean energy education for students and educators, aiming to inspire a new generation to address climate change through renewable energy technologies [5]

Financial Performance - Net sales increased by 143% to $3362 million in Q1 2025 compared to $2941 million in Q1 2024[19, 28] - Net loss from continuing operations attributable to common stockholders was ($483) million, an improvement from a net loss of ($609) million in Q1 2024[20] - Adjusted EBITDA loss was ($103) million in Q1 2025, compared to an adjusted EBITDA loss of ($230) million in Q1 2024, a 553% increase[19, 28] - The company had $1719 million in unrestricted cash at the end of Q1 2025[20, 31] - Free cash flow improved by $454 million year-over-year in Q1 2025[54] Operational Highlights - Q1 2025 utilization reached 70%[20, 28] - Six lines are in startup and transition, with Iowa expected to start production in Q2[20] - Operating cash flow was $46 million in Q1 2025[20] - The company produced 509 sets in Q1 2025, compared to 488 in Q1 2024[28] Guidance - The company projects sales from continuing operations to be in the range of $14 - $15 billion for 2025[35] - Adjusted EBITDA margin from continuing operations is expected to be approximately 0% - 2% for 2025[35] - Utilization is projected to be 80% - 85% on 34 lines for 2025[35] - Capital expenditures are expected to be in the range of $25 - $30 million for 2025[35]

Company Performance - TPI Composites reported a quarterly loss of $1.01 per share, which was worse than the Zacks Consensus Estimate of a loss of $0.50, representing an earnings surprise of -102% [1] - The company posted revenues of $336.16 million for the quarter ended March 2025, exceeding the Zacks Consensus Estimate by 7.39%, compared to revenues of $299.06 million a year ago [2] - Over the last four quarters, TPI Composites has not surpassed consensus EPS estimates and has topped consensus revenue estimates two times [2] Stock Outlook - TPI Composites shares have declined approximately 54% since the beginning of the year, while the S&P 500 has decreased by -3.8% [3] - The current consensus EPS estimate for the upcoming quarter is -$0.34 on revenues of $367.33 million, and for the current fiscal year, it is -$1.92 on revenues of $1.42 billion [7] Industry Context - The Industrial Services industry, to which TPI Composites belongs, is currently ranked in the bottom 37% of over 250 Zacks industries, indicating a challenging environment [8] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which could impact TPI Composites' stock performance [5][6]

Financial Data and Key Metrics Changes - Q1 revenue increased by 14% year over year, reaching $336.2 million, with positive cash flows of $4.6 million from operating activities and $172 million in cash at the end of the quarter [4][6][25] - Adjusted EBITDA was a loss of $10.3 million, an improvement from a loss of $23 million in the same period in 2024, with an adjusted EBITDA margin loss of 3.1% compared to 7.8% in 2024 [7][24] - Free cash flow was negative $1.9 million, an improvement from negative $47.3 million in Q1 2024 [26] Business Line Data and Key Metrics Changes - Net sales of wind blades, tooling, and other wind-related sales increased by 13.9% to $329 million, driven by higher average sales prices and a 4% increase in the number of wind blades produced [22][23] - Field service inspection and repair services sales increased by 38.4% to $7.1 million, attributed to more technicians deployed to revenue-generating projects [22] Market Data and Key Metrics Changes - Strong demand for the company's Mexico operations is expected to continue in 2025, with no change in demand profile for plants providing blades for the U.S. market [6][50] - The EU market presents long-term growth opportunities, although challenges persist due to competition from Chinese manufacturers and hyperinflation in Turkey [18] Company Strategy and Development Direction - The company is focused on leveraging investments made over the last year to achieve operational excellence and cost savings [5] - A strategic review of the business is underway to optimize capital structure, with the appointment of two new independent directors to assist in this process [19][20] Management Comments on Operating Environment and Future Outlook - Management acknowledged the complexities and uncertainties within the global wind market, including policy considerations in the U.S. and macroeconomic factors in Europe and Turkey [30] - The company remains committed to its sustainability goals, aiming for carbon neutrality by 2030 through renewable energy procurement [28][29] Other Important Information - The company received a notification from NASDAQ regarding non-compliance with the minimum bid price requirement, with a 180-day period to regain compliance [20][21] - The reopening of the Newton, Iowa facility is expected to create approximately 400 jobs, with plans for two production lines operational this year [17] Q&A Session Summary Question: Clarification on the strategic review process - Management indicated that the strategic review is a more formal process to evaluate optimal capital structures and right-size the balance sheet for both near-term and long-term health [35][36] Question: Initial views on the House reconciliation language - Management expressed concerns about the potential phase-out of certain provisions and the impact on wind energy compared to other technologies [37] Question: Demand for the Iowa restart and potential for more lines - Management noted ongoing discussions about capacity for up to five lines, dependent on demand dynamics and tariff situations [41] Question: Supply chain cost reductions target - Management confirmed that they are on track with supply chain cost reductions, although tariffs may have a small impact on the bill of materials [42][43] Question: Impact of 45X on manufacturing decisions - Management stated that the potential changes to 45X could influence decisions regarding adding lines or opening new sites, depending on demand dynamics [46][48] Question: Demand profile for 2025 and 2026 - Management reported no change in demand for 2025, with expectations for the U.S. market to remain flat in 2026 [50] Question: EBITDA margin trends for the year - Management expects Q2 to have higher volume but impacted by a safety stand down, with a peak in margins anticipated in Q3 [51][52]