Financial Performance - TPI Composites reported a quarterly loss of $0.81 per share, significantly worse than the Zacks Consensus Estimate of a loss of $0.39, and compared to earnings of $0.27 per share a year ago, indicating an earnings surprise of -107.69% [1] - The company posted revenues of $346.51 million for the quarter ended December 2024, missing the Zacks Consensus Estimate by 5.88%, and this represents an increase from year-ago revenues of $296.99 million [2] - Over the last four quarters, TPI Composites has not surpassed consensus EPS estimates and has topped consensus revenue estimates only once [2] Stock Performance - TPI Composites shares have declined approximately 24.9% since the beginning of the year, while the S&P 500 has gained 4.5% [3] - The current consensus EPS estimate for the upcoming quarter is -$0.30 on revenues of $365.97 million, and for the current fiscal year, it is -$0.90 on revenues of $1.53 billion [7] Industry Outlook - The Industrial Services industry, to which TPI Composites belongs, is currently ranked in the bottom 49% 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]

Sales and Revenue - TPI Composites, Inc. generated approximately 97% of total net sales from wind blade manufacturing for the years ended December 31, 2024, 2023, and 2022[23]. - Net sales for the year ended December 31, 2024, were $1,331,131, a decrease from $1,432,408 in 2023 and $1,478,739 in 2022[185]. - Total net sales decreased by 7.1% in 2024 to $1,331,131 thousand, down from $1,432,408 thousand in 2023, primarily due to a 16% decrease in the number of wind blades produced[204]. - The U.S. segment experienced a significant decline in net sales by 28.7% to $20,204 thousand in 2024, compared to $28,325 thousand in 2023[206]. - The Mexico segment saw an 18.2% increase in net sales to $696,762 thousand in 2024, driven by higher average sales prices and a shift to larger wind blade models[208]. - EMEA segment total net sales decreased by 21.9% to $447,881,000 in 2024 from $573,483,000 in 2023, primarily due to a 24% decrease in wind blade production[210]. - India segment total net sales also decreased by 31.0% to $166,284,000 in 2024 from $241,061,000 in 2023, attributed to a 24% decrease in wind blade production and lower average sales prices[211]. Manufacturing and Production - TPI's restructuring plan included ceasing production at its Yangzhou, China facility as of December 31, 2022, significantly impacting its global manufacturing footprint and financial results[19]. - The company operates wind blade manufacturing facilities in four locations: Mexico, Türkiye, India, and plans to restart operations in Iowa in the second half of 2025[78]. - The company has produced over 98,000 wind blades since 2001, showcasing a strong long-term field performance record[27]. - TPI's manufacturing capabilities allow for the production of wind blades ranging from 30 meters to over 80 meters in length, with flexibility to adapt to customer specifications[27]. - The company experienced significant production delays at the Matamoros, Mexico facility, which adversely impacted profitability and financial condition over the three-year supply agreement term[78]. - Estimated megawatts produced decreased to 9,116 in 2024 from 11,382 in 2023, reflecting a decline in production capacity[195]. - Utilization rate dropped to 77% in 2024 from 82% in 2023, indicating reduced operational efficiency[195]. Financial Performance - The net loss from continuing operations for 2024 was $(210,120), compared to $(151,966) in 2023 and $(17,119) in 2022[185]. - EBITDA for 2024 was $(75,267), an improvement from $(84,812) in 2023, while adjusted EBITDA was $(38,691) compared to $(44,889) in 2023[185]. - Free cash flow for 2024 was $(13,703), an improvement from $(117,109) in 2023[185]. - Total debt, net of debt issuance costs and debt discount, increased to $616,602 in 2024 from $485,193 in 2023[185]. - Net cash (debt) as of December 31, 2024, was $(418,582) thousand, compared to $(323,218) thousand in 2023, indicating increased leverage[193]. - The company recorded approximately $9.6 million in restructuring charges in Q4 2024 due to a workforce rationalization plan in Türkiye[86]. - The company reported higher startup and transition costs during the ramp-up of new wind blade models, impacting cost of goods sold[174]. Strategic Initiatives - The company completed the divestiture of its automotive subsidiary on June 30, 2024, marking a strategic shift to focus entirely on the wind industry[18]. - TPI plans to expand its field service inspection and repair business, expecting operating margins in this segment to surpass those of wind blade manufacturing in future periods[25]. - The company is exploring the divestiture of its tooling business to prioritize capital for growth in the wind blade sector, expected to be completed in 2025[33]. - The company has entered into supply agreements with GE Vernova, extending contracts through 2025 for three manufacturing facilities in Juarez, Mexico, and reopening the Iowa facility in the second half of 2025[26]. - The company extended supply agreements with Vestas through 2025, transitioning two manufacturing lines in Matamoros to a larger wind blade model[41]. - GE Vernova agreements were extended through December 2025, adding a third manufacturing facility in Juárez, Mexico for four new lines[42]. Market and Competition - Customers represented approximately 77% of the global onshore wind energy market (excluding China) and 88% of the U.S. onshore wind turbine market over the three years ended December 31, 2023[39]. - The competitive landscape includes significant pressure from Chinese manufacturers expanding into Europe and other regions, impacting market dynamics[51]. - The U.S. wind energy industry relies on governmental support through incentives, which may not be extended, posing risks to demand for wind blades[95][97]. - The company faces intense competition from other wind blade manufacturers and in-house production by wind turbine OEMs, limiting customer base[94]. Regulatory and Environmental Factors - The Inflation Reduction Act of 2022 extended the Production Tax Credit for Renewable Energy until at least 2032, which is expected to boost demand for wind energy[56]. - The company is subject to various environmental regulations, and non-compliance could result in fines and negatively impact its reputation[68]. - Regulatory changes and tariffs on goods imported from Mexico, effective March 2025, could adversely affect wind blade sales[81]. - The company has adopted environmental, health, and safety policies to promote accountability and eliminate unsafe behaviors in the workplace[68]. Workforce and Employment - As of December 31, 2024, the company employed over 11,700 full-time associates across various countries, with the majority located in Mexico[61]. - The overall turnover rate for the company declined in 2024, reflecting high retention levels across all geographies[67]. - Approximately 29% of the company's workforce is covered by collective bargaining agreements, which could lead to increased operating costs and potential work disruptions[113]. - The company has high levels of associate engagement and retention, supported by a strong culture of inclusion and diversity[65]. Research and Development - The company is collaborating on research and development projects focused on advanced manufacturing, sustainability, and innovative inspection technologies[46]. - The company is expanding its intellectual property portfolio and leveraging in-house expertise in machine learning and AI to enhance manufacturing processes[47]. - The company is developing BladeAssure™, a process integrating advanced technologies to ensure high-quality wind blade production, expected to be implemented across all factories by the end of 2025[36]. Corporate Governance and Risk Management - The company maintains a system of internal controls to ensure reliable financial reporting, but any failure could harm its business and lead to regulatory scrutiny[107]. - The company’s board of directors oversees strategic risk exposure, including cybersecurity risks, through the Audit Committee, which receives quarterly updates[138]. - The company is subject to counterparty risk related to capped call transactions, which could affect its financial stability if a counterparty defaults[126].

Financial Performance - Net sales for Q4 2024 totaled $346.5 million, an increase of 17.7% compared to $294.3 million in Q4 2023[6] - Net loss from continuing operations for Q4 2024 was ($49.1) million, compared to net income of $14.6 million in Q4 2023[8] - Adjusted EBITDA for Q4 2024 was $1.2 million, a significant improvement from an adjusted EBITDA loss of ($24.5) million in Q4 2023[10] - Full year 2024 net sales decreased by 7.1% to $1,331.1 million compared to $1,432.4 million in 2023[13] - The net loss from continuing operations attributable to common stockholders for the year ended December 31, 2024, was $210.1 million, compared to a loss of $127.8 million in 2023[28] - Adjusted EBITDA for the year ended December 31, 2024, was $(38,691) thousand, a decrease from $(44,889) thousand in 2023[34] Cash Flow and Liquidity - Free cash flow recovery in 2024 resulted in $197 million in unrestricted cash at year-end[2] - Free cash flow for Q4 2024 was $83.2 million, a significant improvement from a negative free cash flow of $15.4 million in Q4 2023[32] - Free cash flow improved to $83,219 thousand in 2024, compared to a negative $15,355 thousand in 2023[34] - Cash and cash equivalents at the end of Q4 2024 were $196.5 million, up from $161.1 million at the end of Q4 2023[29] - Cash and cash equivalents rose to $196,518 thousand in 2024, up from $161,059 thousand in 2023[34] - The company reported a net cash provided by operating activities of $87,341 thousand in 2024, a substantial increase from $4,936 thousand in 2023[34] Operational Changes - The company divested its Automotive business and shut down one of its Mexico facilities to optimize operations[2] - The company incurred restructuring charges of $10.0 million in Q4 2024, compared to $1.2 million in Q4 2023[27] Market Outlook - The company expects full year 2025 net sales from continuing operations to be between $1.4 billion and $1.5 billion[20] - Adjusted EBITDA margin for 2025 is projected to be between 2% and 4%[21] - Utilization rate for 2025 is expected to be approximately 85% based on 34 lines installed[21] - The company anticipates continued growth in the wind energy and electric vehicle markets, which are key areas for future expansion[26] Cost and Expenses - The total cost of goods sold for Q4 2024 was $350.2 million, resulting in a gross loss of $3.7 million, compared to a gross loss of $28.2 million in Q4 2023[27] - Interest expense, net, significantly increased to $24,415 thousand in 2024 from $6,075 thousand in the previous year[34] - Depreciation and amortization expenses were $6,940 thousand for the year ended December 31, 2024, compared to $8,151 thousand in 2023[34] - Capital expenditures decreased to $(4,122) thousand in 2024 from $(20,291) thousand in 2023, reflecting a reduction in investment[34] Assets and Liabilities - Total current assets decreased to $445.1 million in 2024 from $503.1 million in 2023, primarily due to a reduction in contract assets[29] - Total liabilities increased to $1.07 billion in 2024 from $926.4 million in 2023, with long-term debt rising to $485.2 million[31] - Net debt increased to $(418,582) thousand in 2024 from $(323,218) thousand in 2023, indicating a rise in total debt[34] Foreign Currency Impact - The company experienced a foreign currency loss of $(1,190) thousand in 2024, contrasting with a gain of $1,865 thousand in the previous year[34] Sales Price - The average sales price (ASP) of wind blades increased to $177, up from $148 in Q4 2023[4]

Core Insights - TPI Composites reported solid financial results for 2024 despite challenges in the global wind industry, with strategic decisions made to transition to next-generation blades and restructure operations [2][3] - The company ended 2024 with a recovery in free cash flow, achieving $197 million in unrestricted cash, which strengthened its liquidity position [2][3] - TPI Composites extended supply agreements with Vestas and GE Vernova through 2025, indicating strong demand for its products [2] Financial Performance - Fourth quarter net sales increased by 17.7% to $346.5 million compared to $294.3 million in Q4 2023, driven by a 19.2% increase in wind-related sales [5][6] - The net loss from continuing operations for Q4 2024 was ($49.1) million, a decline from a net income of $14.6 million in Q4 2023 [6][9] - Adjusted EBITDA improved to $1.2 million in Q4 2024 from a loss of ($24.5) million in the same period last year, reflecting operational improvements [10] Yearly Overview - For the full year 2024, net sales decreased by 7.1% to $1,331.1 million from $1,432.4 million in 2023, primarily due to a 16% decrease in wind blade production [13][15] - The net loss from continuing operations for the year was ($210.1) million, compared to a loss of ($127.8) million in 2023, influenced by restructuring charges and increased labor costs [15][16] - Adjusted EBITDA loss for 2024 was ($38.7) million, an improvement from a loss of ($44.9) million in 2023, driven by lower warranty charges and cost-saving initiatives [17] Operational Metrics - In Q4 2024, the company produced 613 sets of wind blades, a slight increase from 602 sets in Q4 2023, with utilization rising to 91% from 71% [4] - The average sales price (ASP) of wind blades increased to $177, up from $148 in Q4 2023, reflecting a shift in product mix [4] - The company operated 34 dedicated manufacturing lines, consistent with the previous year, indicating stable production capacity [4] Cash Flow and Investments - Net cash provided by operating activities improved by $82.4 million in Q4 2024 compared to the same period in 2023, attributed to better cash earnings and working capital management [11] - Net cash used in investing activities decreased by $16.1 million in Q4 2024, primarily due to reduced capital expenditures [12] - For the full year, net cash provided by operating activities increased by $93.5 million, reflecting improved working capital management [18] 2025 Guidance - The company provided guidance for 2025, projecting net sales from continuing operations between $1.4 billion and $1.5 billion, with an adjusted EBITDA margin of 2%-4% [20]

Group 1 - Analysts project TPI Composites (TPIC) will report a quarterly loss of $0.39 per share, a decline of 244.4% year over year, with revenues expected to reach $368.13 million, an increase of 24% from the same quarter last year [1] - The consensus EPS estimate for the quarter has remained unchanged over the past 30 days, indicating a reassessment of initial projections by covering analysts [1][2] - The average estimates for key metrics of TPI Composites show 'Net Sales- Field service, inspection and repair services' at $10.73 million, a decrease of 14.8% year over year, while 'Net Sales- Wind blade, tooling and other wind related' is expected to reach $352.59 million, reflecting a year-over-year increase of 25.1% [4] Group 2 - Analysts estimate 'Estimated megawatts' will be 2,588, down from 2,632 a year ago, and 'Sets' are projected to reach 636, compared to 602 in the same quarter last year [5] - The consensus for 'Utilization' is expected to be 91.8%, an increase from 87% reported in the same quarter of the previous year [5] - The consensus estimate for 'Manufacturing lines installed' stands at 34, down from 37 a year ago, with 'Dedicated manufacturing lines' also expected to be 34, compared to 37 in the same quarter last year [6] Group 3 - TPI Composites shares have shown a return of -15.4% over the past month, contrasting with the Zacks S&P 500 composite's +4.7% change, indicating expected underperformance in the near future [6]

Company Overview - TPI Composites, Inc. is a global company focused on innovative and sustainable solutions to decarbonize and electrify the world [4] - The company delivers high-quality, cost-effective composite solutions through long-term relationships with leading OEMs in the wind market [4] - TPI 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] Upcoming Financial Results - TPI Composites will release its fourth quarter and full year 2024 results after the market close on February 20, 2025 [1] - A conference call will follow at 5:00 p.m. (Eastern Time) on the same day [1] Conference Call Details - The conference call can be accessed live by dialing 1-800-579-2543 for domestic callers and 1-785-424-1789 for international callers, with Conference ID "TPIC" [2] - A replay of the call will be available two hours after it concludes, accessible by dialing 1-844-512-2921 for domestic and 1-412-317-6671 for international callers, with passcode 11157847 [2] - An online webcast of the conference call will be available on the Investor Relations section of the company's website [3]

Financial Data and Key Metrics Changes - In Q3 2024, net sales were $380.8 million, a 2.8% increase from $370.2 million in Q3 2023 [34] - Adjusted EBITDA was $8 million, compared to $0.2 million in Q3 2023, with an adjusted EBITDA margin of 2.1% versus 0.1% in the same period last year [37] - Free cash flow was negative $5.6 million in Q3 2024, an improvement from negative $20.8 million in Q3 2023 [38] Business Line Data and Key Metrics Changes - Wind blade tooling and other wind-related sales increased by $6.9 million or 1.9% to $369.1 million in Q3 2024, primarily due to higher average sales prices and favorable foreign currency fluctuations [34] - Field service inspection and repair service sales increased by $3.7 million or 45.8% to $11.7 million in Q3 2024, driven by a return to revenue-generating projects [36] Market Data and Key Metrics Changes - Utilization in Q3 2024 increased to 89%, with seven of the ten lines achieving full rate production [16] - The company anticipates all regions to be EBITDA positive in Q4 2024, with utilization rates expected to exceed 90% [17] Company Strategy and Development Direction - The company is focused on transitioning to next-generation workhorse blades and has plans to reopen the Iowa plant in mid-2025 to support GE Vernova [8][9] - TPI Composites is investing in innovation and technology to strengthen its competitive edge in the onshore market [18] - The company is also exploring expansion opportunities in the U.S. and international markets, particularly in India and Türkiye [9][10] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in meeting customer demand and anticipates a strong trajectory for 2025 despite challenges in Türkiye and inflation impacts [7][30] - The company expects to close 2024 with its best quarter financially and generate positive free cash flow [45] - Management acknowledged challenges in the European market, including inflation and regulatory issues, which may impact competitiveness [25][26] Other Important Information - The company is narrowing its full-year 2024 revenue guidance to approximately $1.35 billion and lowering adjusted EBITDA guidance to a loss of about 2% [40] - TPI Composites plans to reduce work-in-process inventory to free up cash on its balance sheet [41] Q&A Session Summary Question: Impact of potential tariffs on contracts with Mexican facilities - Management indicated that the impact of new tariffs would depend on contract terms, but they do not anticipate significant issues [49][50] Question: 2025 EBITDA target and volume expectations - Management stated that while there are challenges in Türkiye, they expect overall top-line growth in the U.S. market to offset volume declines in Türkiye [51][66] Question: Demand in Türkiye and Europe - Management noted that the 40% lower demand in Türkiye is influenced by both local and broader European market conditions, including competition from Chinese suppliers [54][55] Question: Service operations and maintenance business unit - Management confirmed that the service operations unit is expected to grow and is currently EBITDA positive [56] Question: Details on the Iowa facility and additional U.S. capacity - Management shared plans to ramp up two lines in Iowa with minimal CapEx and mentioned securing additional capacity in a brownfield facility in the U.S. [60][62]

Core Insights - TPI Composites reported revenue of $380.76 million for the quarter ended September 2024, reflecting a year-over-year increase of 2.1% [1] - The company's EPS was -$0.65, an improvement from -$1.71 in the same quarter last year [1] - Revenue exceeded the Zacks Consensus Estimate of $346.5 million by 9.89%, while EPS fell short of the consensus estimate of -$0.18 by 261.11% [1] Financial Performance Metrics - Estimated megawatts produced were 2,526, surpassing the average estimate of 2,440 by three analysts [3] - The number of dedicated manufacturing lines remained at 34, matching the average estimate [3] - Utilization rate was reported at 89%, exceeding the average estimate of 80.7% [3] - The number of manufacturing lines installed was 34, consistent with the average estimate [3] - Total sets produced were 601, higher than the average estimate of 591 by two analysts [3] - Net sales from wind blade, tooling, and other wind-related products reached $369.08 million, up 1.9% year-over-year and above the average estimate of $338.84 million [3] - Net sales from field service, inspection, and repair services were $11.68 million, representing a significant year-over-year increase of 45.8% compared to the average estimate of $9.95 million [3] Stock Performance - TPI Composites' shares have declined by 32.4% over the past month, contrasting with a 3.2% increase in the Zacks S&P 500 composite [4] - The stock currently holds a Zacks Rank 4 (Sell), indicating potential underperformance relative to the broader market in the near term [4]

TPI Composites (TPIC) came out with a quarterly loss of $0.65 per share versus the Zacks Consensus Estimate of a loss of $0.18. This compares to loss of $1.71 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of -261.11%. A quarter ago, it was expected that this maker of composite wind blades would post a loss of $0.69 per share when it actually produced a loss of $1.23, delivering a surprise of -78.26%.Over the last four quarters, ...

Q3 2024 Earnings Call November 7, 2024 & Electri 2 Q3 2024 Legal Disclaimer This presentation contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the Exchange Act). All statements other than statements of historical facts contained in this presentation, including statements regarding our future results of operations and financial position, business strategy and plans and objective ...