TPI Composites(TPIC) - 2023 Q1 - Quarterly Report

Financial Performance - Net sales for Q1 2023 were $404.1 million, a 17.6% increase from $343.5 million in Q1 2022[124] - Net loss from continuing operations for Q1 2023 was $15.1 million, compared to a loss of $11.4 million in Q1 2022[124] - Adjusted EBITDA for Q1 2023 was $8.4 million, up from $6.1 million in Q1 2022, reflecting improved operational performance[124] - The company reported a total loss from continuing operations of $7,997,000, an improvement of 2.5% compared to the previous year[141] - The net loss from continuing operations for the three months ended March 31, 2023, was $15.1 million, an increase of 33.0% compared to a loss of $11.4 million in the same period in 2022[149] - The company reported a net loss from discontinued operations of $7.0 million for the three months ended March 31, 2023, which is a 58.4% increase from a loss of $4.4 million in the same period in 2022[150] Sales and Revenue Breakdown - Total net sales for the three months ended March 31, 2023, were $404,066,000, representing a 17.6% increase from $343,525,000 in the same period of 2022[128] - Wind blade, tooling, and other wind-related sales increased by 20.5% to $387,592,000, driven by a 20% increase in the number of wind blades produced and higher average sales prices[128] - Automotive sales decreased by 20.2% to $10,261,000, primarily due to a reduction in the number of composite bus bodies produced[128] - Field service, inspection, and repair services sales fell by 30.0% to $6,213,000, attributed to fewer technicians deployed to revenue-generating projects[129] - The U.S. segment reported a 27.5% decline in net sales to $15,620,000, while Mexico segment sales increased by 18.6% to $154,640,000[130] - EMEA segment sales rose by 11.9% to $167,513,000, despite a 4.6% unfavorable impact from currency fluctuations[134] - India segment sales surged by 58.3% to $66,293,000, mainly due to increased production capacity[135] Costs and Expenses - Total cost of goods sold increased by 17.2% to $401,361,000, with a cost of sales percentage of net sales at 99.3%[136] - General and administrative expenses decreased by 10.5% to $7,034,000, representing 1.7% of net sales[137] - Total other expense increased to $3.3 million for the three months ended March 31, 2023, primarily due to a rise in interest expense related to the issuance of $132.5 million of convertible senior unsecured notes[147] Debt and Financing - Total debt increased to $195.1 million as of March 31, 2023, compared to $61.2 million at the end of 2022[124] - The company issued convertible senior unsecured notes totaling $132.5 million in March 2023, with net proceeds of $109.1 million intended for green projects and working capital[122] - The company had $190.3 million in outstanding indebtedness as of March 31, 2023, compared to $61.2 million at the end of 2022[154] - The company reported net cash provided by financing activities of $107.7 million for the three months ended March 31, 2023, a significant increase compared to a net cash used of $23.3 million in the same period in 2022[164] Cash Flow and Capital Expenditures - Net cash used in operating activities was $83.9 million for the three months ended March 31, 2023, reflecting an increase of $2.8 million compared to the same period in 2022[161] - The company had unrestricted cash and cash equivalents totaling $164.2 million as of March 31, 2023, an increase from $133.6 million at the end of 2022[156] - The company anticipates capital expenditures for 2023 to be revised from $25 million to a range of $40 million to $45 million, driven by projects to acquire wind turbines and startup costs for manufacturing lines in India[163] Operational Performance - The utilization rate for manufacturing lines improved to 84% in Q1 2023, up from 71% in Q1 2022[126] - The company experienced a loss from operations of $6.7 million at its Matamoros, Mexico facility in Q1 2023, an increase from a $5.0 million loss in Q1 2022[119] Market Risks and Accounting - The company is exposed to market risks primarily related to foreign currency exchange rates and commodity prices[169] - A hypothetical 10% change in foreign currency exchange rates would have resulted in a change to income from operations of approximately $1.0 million for the three months ended March 31, 2023[170] - A 10% change in the forecasted price of resin and resin systems is estimated to impact income from operations by approximately $6.6 million for the full year 2023[174] - The company has not hedged its commodity price exposure but locks in pricing for most key raw materials for 12 months to mitigate price increases[171] - There have been no significant changes to the company's critical accounting policies as disclosed in the Annual Report for the year ended December 31, 2022[167] - Recent accounting pronouncements are discussed in the condensed consolidated financial statements, indicating ongoing compliance with accounting standards[168] Supply Chain and Investments - The company plans to invest an additional $10 million to $15 million in its automotive business in 2023, following previous investments of approximately $81 million from 2018 to 2022[121] - The company has entered into agreements to extend supply agreements in Türkiye, India, and Mexico, and plans to add two manufacturing lines in India[116] - The geopolitical situation and inflation have led to increased costs, with minimum wages in Mexico and Türkiye rising by approximately 20% and 55%, respectively, effective January 1, 2023[120]