TPI Composites(TPIC) - 2025 Q1 - Quarterly Report

Financial Performance - Net sales of wind blades for Q1 2025 increased by approximately 14% to $336,157,000 compared to$294,046,000 in Q1 2024[110] - The net loss from continuing operations for Q1 2025 was $48,291,000, an improvement from a loss of$60,879,000 in Q1 2024[118] - Net sales for the three months ended March 31, 2025, increased by 14.3% to $336,157,000 compared to$294,046,000 in the same period in 2024[124] - Wind blade, tooling, and other wind-related sales rose by 13.9% to $329,041,000, driven by higher average sales prices and a 4$22,792,000, a 40.2% improvement from a loss of $38,098,000 in the same period last year[135] - The EMEA segment reported a significant increase in income from operations, rising to$1,564,000, compared to a loss of $4,311,000 in 2024, marking a 136.3$5,356,000, driven by tooling refurbishment sales related to the restart of production[126] - The Mexico segment experienced a 36.1% increase in net sales to $207,471,000, attributed to a 23$89,153,000, primarily due to a 12% decrease in the number of wind blades produced[128] - India segment net sales declined by 16.1% to $34,177,000, mainly due to a 20$350,109,000, an increase of 8.8% from $321,724,000 in the prior year[130] - General and administrative expenses decreased by 29.6$5,919,000, down from $8,403,000, primarily due to lower employee compensation costs[132] - Interest expense increased to$24,204,000, up 13.2% from $21,383,000 in the same period last year[141] - The Mexico segment's loss from operations decreased by 29.4$26,861,000 in 2024 to $18,956,000 in 2025[137] Strategic Initiatives - The company completed the divestiture of its automotive business in June 2024 and is exploring alternatives for the divestiture of its tooling business, expected to complete in 2025[107] - The company is assessing strategic alternatives to optimize its capital structure and maintain liquidity amid economic challenges[115] Market and Economic Conditions - Ongoing inflationary pressures have led to minimum wage increases in Mexico (12$4,625,000, a substantial increase of $43,629,000 compared to a cash outflow of$39,004,000 in the prior year[151] - The total principal amount of debt outstanding decreased to $696.4 million as of March 31, 2025, down from$705.2 million at the end of 2024[150] - The company had unrestricted cash and cash equivalents totaling $171.9 million as of March 31, 2025, down from$196.5 million at the end of 2024[148] Risk Management - The company is exposed to market risks primarily related to foreign currency exchange rates and commodity prices[159] - The company has not hedged its commodity price exposure but locks in pricing for key raw materials for 12 months to protect against price increases[161] - Approximately 37% of the resin and resin systems used are purchased under contracts controlled by customers, limiting the company's exposure to price fluctuations[162] - All remaining secured and unsecured financing and finance lease obligations are fixed rate instruments as of March 31, 2025, mitigating interest rate risk[164] - The current annual interest rates for accounts receivable assignment agreements range from SOFR plus 0.26% to EURIBOR plus 1.95% depending on the segment and year of agreement[156] Accounting and Compliance - There have been no significant changes to critical accounting policies as disclosed in the Annual Report for the year ended December 31, 2024[158] - A hypothetical 10% change in foreign currency exchange rates would have resulted in a change to income from operations of approximately $11.6 million for the three months ended March 31, 2025[160] - A 10$4.4 million for the three months ended March 31, 2025[163] - As of March 31, 2025, $169.4 million of receivables were sold under accounts receivable assignment agreements, compared to$95.0 million in the prior year period, representing an increase of approximately 78.4%[157]