Capital expenditures were $15.0 million for the three months ended June 30, 2020 compared to $19.0 million during the same period in 2019. Our capital expenditures have primarily related to machinery and equipment for new facilities and expansion and improvements at existing facilities.
We ended the quarter with $96.7 million of cash and cash equivalents and net debt was $142.5 million as compared to $71.8 million at December 31, 2019. For the quarter we used $29.6 million of cash flows in operations and invested $15.0 million in capital expenditures for a negative free cash flow of $44.6 million.
2020 Guidance
On April 23, 2020, TPI announced the withdrawal of its fiscal year 2020 financial guidance first issued on February 27, 2020. At this time, TPI will not be reinstating its fiscal year 2020 financial guidance due to the inability to forecast or quantify with reasonable accuracy the full duration and financial magnitude of the impact of the COVID-19 pandemic.
Conference Call and Webcast Information
TPI Composites will host an investor conference call this afternoon, Thursday, August 6, 2020 at 5:00 pm ET. Interested parties are invited to listen to the conference call which can be accessed live over the phone by dialing 1-855-327-6837, or for international callers, 1-631-891-4304. A replay will be available two hours after the call and can be accessed by dialing 1-844-512-2921, or for international callers, 1-412-317-6671. The passcode for the live call and the replay is 10010271. The replay will be available until August 13, 2020. Interested investors and other parties may also listen to a simultaneous webcast of the conference call by logging onto the Investors section of the Company's website at www.tpicomposites.com . The online replay will be available for a limited time beginning immediately following the call.
About TPI Composites, Inc.
TPI Composites, Inc. is the only independent manufacturer of composite wind blades for the wind energy market with a global manufacturing footprint. TPI delivers high-quality, cost-effective composite solutions through long-term relationships with leading OEMs in the wind and transportation markets. TPI is headquartered in Scottsdale, Arizona and operates factories in the U.S., China, Mexico, Turkey and India. TPI operates additional engineering development centers in Denmark and Germany.
Forward-Looking Statements
This release contains forward-looking statements which are made pursuant to safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include statements, among other things, concerning: the impact of the COVID-19 pandemic on our business, effects on our financial statements and our financial outlook; our business strategy, including anticipated trends and developments in and management plans for our business and the wind industry and other markets in which we operate; our projected annual revenue growth; competition; future financial results, operating results, revenues, gross margin, operating expenses, profitability, products, projected costs, warranties, our ability to improve our operating margins, and capital expenditures. These forward-looking statements are often characterized by the use of words such as "estimate," "expect," "anticipate," "project," "plan," "intend," "seek," "believe," "forecast," "foresee," "likely," "may," "should," "goal," "target," "might," "will," "could," "predict," "continue" and the negative or plural of these words and other comparable terminology. Forward-looking statements are only predictions based on our current expectations and our projections about future events. You should not place undue reliance on these forward-looking statements. We undertake no obligation to update any of these forward-looking statements for any reason. These forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to differ materially from those expressed or implied by these statements. These factors include, but are not limited to, the matters discussed in "Risk Factors," in our Annual Report on Form 10-K and other reports that we will file with the SEC.
Non-GAAP Definitions
This press release includes unaudited non-GAAP financial measures, including EBITDA, adjusted EBITDA, net cash (debt) and free cash flow. We define EBITDA as net income (loss) plus interest expense (including losses on extinguishment of debt and net of interest income), income taxes and depreciation and amortization. We define adjusted EBITDA as EBITDA plus any share-based compensation expense, any realized gains or losses from foreign currency remeasurement, any realized gains or losses from the sale of assets and asset impairments and any restructuring costs. We define net cash (debt) as the total unrestricted cash and cash equivalents less the total principal amount of debt outstanding. We define free cash flow as net cash flow from operating activities less capital expenditures. We present non-GAAP measures when we believe that the additional information is useful and meaningful to investors. Non-GAAP financial measures do not have any standardized meaning and are therefore unlikely to be comparable to similar measures presented by other companies. The presentation of non-GAAP financial measures is not intended to be a substitute for, and should not be considered in isolation from, the financial measures reported in accordance with GAAP. See below for a reconciliation of certain non-GAAP financial measures to the comparable GAAP measures as well as our Investor Presentation which can be found in the Investors section at www.tpicomposites.com .
Investor Relations
480-315-8742
investors@TPIComposites.com
TPI COMPOSITES, INC. AND SUBSIDIARIES
TABLE ONE - CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
Three Months Ended Six Months Ended
June 30, June 30,
(in thousands, except per share data) 2020 2019 2020 2019
Net sales $ 373,817 $ 330,771 $ 730,453 $ 630,551
Cost of sales 367,644 285,319 716,119 568,357
Startup and transition costs 10,920 22,901 22,954 41,079
Total cost of goods sold 378,564 308,220 739,073 609,436
Gross profit (loss) (4,747 ) 22,551 (8,620 ) 21,115
General and administrative expenses 6,887 9,208 16,383 17,193
Realized loss on sale of assets and asset impairments 1,440 4,972 3,358 7,207
Restructuring charges, net 181 3,874 298 3,874
Income (loss) from operations (13,255 ) 4,497 (28,659 ) (7,159 )
Other income (expense):
Interest income 8 31 40 82
Interest expense (2,553 ) (2,274 ) (4,356 ) (4,273 )
Realized loss on foreign currency remeasurement (1,928 ) (967 ) (968 ) (4,769 )
Miscellaneous income 939 1,016 1,634 1,718
Total other expense (3,534 ) (2,194 ) (3,650 ) (7,242 )
Income (loss) before income taxes (16,789 ) 2,303 (32,309 ) (14,401 )
Income tax benefit (provision) (49,312 ) (475 ) (34,284 ) 4,125
Net income (loss) $ (66,101 ) $ 1,828 $ (66,593 ) $ (10,276 )
Weighted-average common shares outstanding:
Basic 35,299 35,033 35,256 34,970
Diluted 35,299 36,369 35,256 34,970
Net income (loss) per common share:
Basic $ (1.87 ) $ 0.05 $ (1.89 ) $ (0.29 )
Diluted $ (1.87 ) $ 0.05 $ (1.89 ) $ (0.29 )
Non-GAAP Measures (unaudited):
EBITDA $ (2,628 ) $ 11,671 $ (5,349 ) $ 7,574
Adjusted EBITDA $ 3,295 $ 23,421 $ 4,591 $ 26,346
TPI COMPOSITES, INC. AND SUBSIDIARIES
TABLE TWO - CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
June 30, December 31,
(in thousands) 2020 2019
Assets
Current assets:
Cash and cash equivalents $ 96,657 $ 70,282
Restricted cash 312 992
Accounts receivable 133,147 184,012
Contract assets 214,556 166,515
Prepaid expenses 15,983 10,047
Other current assets 25,900 29,843
Inventories 12,368 6,731
Total current assets 498,923 468,422
Noncurrent assets:
Property, plant, and equipment, net 211,175 205,007
Operating lease right of use assets 162,767 122,351
Other noncurrent assets 22,420 30,897
Total assets $ 895,285 $ 826,677
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable and accrued expenses $ 267,833 $ 293,104
Accrued warranty 56,772 47,639
Current maturities of long-term debt 25,285 13,501
Current operating lease liabilities 21,918 16,629
Contract liabilities 2,447 3,008
Total current liabilities 374,255 373,881
Noncurrent liabilities:
Long-term debt, net of debt issuance costs and
current maturities 212,617 127,888
Noncurrent operating lease liabilities 154,759 113,883
Other noncurrent liabilities 24,809 5,975
Total liabilities 766,440 621,627
Total stockholders' equity 128,845 205,050
Total liabilities and stockholders' equity $ 895,285 $ 826,677
Non-GAAP Measure (unaudited):
Net debt $ (142,524 ) $ (71,779 )
TPI COMPOSITES, INC. AND SUBSIDIARIES
TABLE THREE - CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
Three Months Ended Six Months Ended
June 30, June 30,
(in thousands) 2020 2019 2020 2019
Net cash provided by (used in) operating activities $ (29,573 ) $ 10,573 $ (27,005 ) $ (1,518 )
Net cash used in investing activities (15,047 ) (19,030 ) (42,030 ) (37,739 )
Net cash provided by (used in) financing activities 32,173 (10,629 ) 97,255 10,446
Impact of foreign exchange rates on cash, cash equivalents and restricted cash (719 ) (297 ) (2,525 ) 696
Cash, cash equivalents and restricted cash, beginning of period 110,610 80,644 71,749 89,376
Cash, cash equivalents and restricted cash, end of period $ 97,444 $ 61,261 $ 97,444 $ 61,261
Non-GAAP Measure (unaudited):
Free cash flow $ (44,620 ) $ (8,457 ) $ (69,035 ) $ (39,257 )
TPI COMPOSITES, INC. AND SUBSIDIARIES
TABLE FOUR - RECONCILIATION OF NON-GAAP MEASURES
(UNAUDITED)
EBITDA and adjusted EBITDA are reconciled as follows: Three Months Ended Six Months Ended
June 30, June 30,
(in thousands) 2020 2019 2020 2019
Net income (loss) $ (66,101 ) $ 1,828 $ (66,593 ) $ (10,276 )
Adjustments:
Depreciation and amortization 11,616 7,125 22,644 17,784
Interest expense (net of interest income) 2,545 2,243 4,316 4,191
Income tax provision (benefit) 49,312 475 34,284 (4,125 )
EBITDA (2,628 ) 11,671 (5,349 ) 7,574
Share-based compensation expense 2,374 1,937 5,316 2,922
Realized loss on foreign currency remeasurement 1,928 967 968 4,769
Realized loss on sale of assets and asset impairments 1,440 4,972 3,358 7,207
Restructuring charges, net 181 3,874 298 3,874
Adjusted EBITDA $ 3,295 $ 23,421 $ 4,591 $ 26,346
Net debt is reconciled as follows: June 30, December 31,
(in thousands) 2020 2019
Cash and cash equivalents $ 96,657 $ 70,282
Less total debt, net of debt issuance costs (237,902 ) (141,389 )
Less debt issuance costs (1,279 ) (672 )
Net debt $ (142,524 ) $ (71,779 )
Free cash flow is reconciled as follows: Three Months Ended Six Months Ended
June 30, June 30,
(in thousands) 2020 2019 2020 2019
Net cash provided by (used in) operating activities $ (29,573 ) $ 10,573 $ (27,005 ) $ (1,518 )
Less capital expenditures (15,047 ) (19,030 ) (42,030 ) (37,739 )
Free cash flow $ (44,620 ) $ (8,457 ) $ (69,035 ) $ (39,257 )
COMTEX_368992485/2010/2020-08-06T16:32:23
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