TPI Composites(US:TPIC)2025-05-12 20:15Financial 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% increase in the number of wind blades produced[124] - Total income from continuing operations showed a loss of $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% change[138] Operational Metrics - Estimated megawatts of energy capacity generated by wind blade sets produced decreased to 1,933 in Q1 2025 from 2,050 in Q1 2024[122] - Utilization rate improved to 70% in Q1 2025, up from 67% in Q1 2024[122] - The U.S. segment reported a 27.5% increase in net sales to $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% increase in the number of wind blades produced[127] - EMEA segment net sales decreased by 7.7% to $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% decrease in the number of wind blades produced[129] Cost and Expenses - Total cost of goods sold for the three months ended March 31, 2025, was $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% to $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%, improving from a loss of $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% and 20%) and Türkiye (30% and 49%) in 2024 and 2025, impacting production costs[114] - The company received a notification from Nasdaq regarding non-compliance with the minimum bid price requirement, with a deadline to regain compliance by October 29, 2025[116] - The restructuring plan in Türkiye impacted approximately 20% of the Turkish workforce, with further rationalization expected in the second half of 2025[113] Cash Flow and Liquidity - Net cash provided by operating activities was $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% change in the forecasted price of resin and resin systems would impact income from operations by approximately $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]