TPIC - Earnings call transcript Q4 2021

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Operator

Good afternoon, and welcome to TPI Composites Fourth Quarter and Full Year 2021 Earnings Conference Call. Today’s call is being recorded.

We have allocated 1 hour for prepared remarks and Q&A. At this time, I’d like to turn the conference over to Christian Edin, Investor Relations for TPI Composites. Thank you.

begin. may You

Christian Edin

I’d fourth operator. welcome to everyone Thank and like full Composites quarter call. year TPI you, to XXXX earnings

Today’s be our differ with and can included materially. in during to the statements detailed discussion to Securities which making latest website, references risks that found presentation A cause non-GAAP be will is applicable could to subject will uncertainties, risks which report this results Exchange measures. actual our tpicomposites.com. Commission, of are include on and We call forward-looking financial and filings

to to slides With to measures. refer and Siwek, and President Bill the for should reconciliations the today’s information over financial GAAP that, You TPI information Composites let contained the definitional measures comparable CEO. accompanying me in of turn non-GAAP historical call presentation the

William Siwek

Thanks, everyone. good you our joining afternoon, for call. Christian, and Thank

chain by Christian, operations, quarter our Officer. will briefly joined In review Slide industry call before will results Chief results, broadly. review addition our CFO more XXXX then wind turn am market year Accounting fourth Adan Adan financial I to discuss Please and to and Q&A. our full and open our supply cover I Gossar, our I for the outlook Interim the including X. and we the global and

year of million, blades. while $X.X sales For of XX over EBITDA adjusted of $X.X XXXX, wind net full we delivered increase delivering the and billion, a XXXX X.X% gigawatts approximately

under of XXXX and and of due million XXX. of deferral for customer fourth to operations $XX primarily extensions and our to impacted complete estimates relating of results respectively, approximately to contracts revenue contracts cost were million, ASC Our the quarter adversely $XX by the

billings for fourth impact not exceeded basis did and as XXXX our and cash requirements. reflects a our flow have working quarter. the factors XXXX our actual business which on on capital manage these it However, an billings, We expectations

summary Now for of a XXXX highlights.

Nordex facility and we them for added our lines in wind Chennai, production four Matamoros, for two blade in During the on Mexico. lines started year, India

with Turkey. production half and also lines We in four start first new extended added to XXXX with plan in Yangzhou, three them lines in China, the in Vestas of

new with delivered billion contract now our $X.X more a minimum of revenue have value of extensions, XXXX, almost supply $X.X our and through times to compared up to value billion. lines these growth to a agreements global With under potential grew and XXX We service organization than two we technicians XXXX. of contract

center quarter we Spain. fourth During to a training Europe, opened the in accelerate in growth

further We expect XXXX. service in growth business in our

traction our strong transportation business. of experience the to in side continue We

whom Our of are to passenger ability per new customers, several develop TPI. a collaborate In pace. we first and for TPI, size commitment the our won composite fourth of quarter, and of meaningful accelerated program are at platform, major to seeing our solutions benefit milestone innovative an EV to the capabilities

have We production we customers, which expect with will entered future. longer-term into also several into in multiple the new agreements agreements turn development

in XX,XXX the electric of successfully launched to and anticipate parts an additional vehicle compression our line manufacturing manufacturer, XXXX, first parts nearly we delivered and During an XX,XXX molding automated half XXXX.

been for XXXX capabilities parts million-plus the to same continue and year, awarded and expand our this deliver a have manufacturing parts XXX,XXX in to We customer. approximately programs

our closed achieve innovative balance have demand Oaktree protection thermal faster upfront and market, with weight financing and shore enhanced $XXX up composite enable for potential growth ourselves customers and million committed. investment financing follow-on enabled our solutions to a us recovers. investment lower provide when sheet position $XXX Our We and additional time require to million market The to reductions.

chain our as operations, a you supply give quick of global Slide a market to Turning now as X, well I’ll update update.

plan on report around quarter, turned that I’m Nordex, to expectations and safety, Matamoros happy delivery. in fourth the our operation, our customer delivering the performance the we we meeting and quality for blades During of are

we multi no have made through annual we XXXX. the transition to still new realize and to during We met four India a transitions line a go and total work innovative Turkey this China. do pricing during already expect and a to transitions, respect of transition piece minimal challenges currently locations to significant transition have up of we plan cost to line in on to The progress our However, are of on in facility. for complete from will experienced customer with the we in well-planned Mexico the and requirements With we delivery our and output. and productivity to returns during or will quarter, the drive blade, new Turkey, and levels start we track XXXX five one is expect. our lines example a impact interruption is great startups to

assumptions in volatility the in with after Moving specifically the unpredictable of ways, supply the and effects on our unprecedented to continue logistic commodity sector. chain, pandemic chain and supply the to cost affect underlying and evolve

XXXX, raw we increases fiber, with as that there and well in logistics inbound use significant costs. and constraints key materials epoxy carbon both manufacture During to price increases resin as to were supply products, respect our

to Europe of continued to impact infrastructure, during We resin capacity XXX% bullish of construction, adversely constrained to fourth very by carbon costs America compared higher prices industries automotive, materials demand carbon prices and fourth also for expect of carbon rising cost in after is products XX% supported already carbon high up to builds. price were and North quarter and the remain energy supply energy-intensive, could from new containership the approximately fiber quarter XXXX. of use related as XXXX, additions. increases demand the of be and carbon certain like Epoxy XXXX continue continues as in products feedstocks and seeing for resin outpace we to Production

While Asia, suppliers environment often unreliable savings competitive available in associated costs potential resin offset current logistics price. and the are any on

XXX% resin remain XX% at levels elevated systems carbon fiber more XXXX. the under controlled resin the More use we and either contracts or of than any and supply than XX% decrease increase to and of our will expect the bear therefore, bear that increase. or price or borne XX% price price. customers fiber any is by agreements, customer or our receive respect of or customers purchased other material We raw resin customers of With our typically in and carbon of receive decrease these in

partnerships withstanding to environment, pricing ensure for flat chain build of the Now reduce remain on short, in expect still be We control localizing compared to medium to cost supply the of key relatively the impact to we the material the XXXX average high and of long-term provide costs, with the challenging supply for and suppliers best strategic cost regionalizing to bill which security we hold customers chain levels. logistics focused supply our long-term. and able

XXXX expiration heard back the customers in the from better compared of plan, of for uncertainty there stalled you’ve the the XXXX, some end recent PTC continue demand related near-term. weeks, to headwinds at in demand in build to supply As and our to which blades our is be U.S. of in the the chain to addition causing XXXX costs wind constraints, and decreased and in

that leading few states, see current as market in given years, meet and to and tax and we to credits other climate regions that that uniquely policy set continue legislative OEMs, we share grow necessity expand believe positioned strategic combat industry notwithstanding located been will wind demand our proposals growth countries are with the during the and the to decade goals has key the strengthen And the change. with decarbonize in extend forecast challenges, wind world, and/or we and the While our beyond. we by again, believe States for in footprint, to electrify to parts United global aggressive regulatory the for we begins demand of next geographies, to energy the to accelerate and monitor over

to continue with remain relationships and and address opportunities. we strong develop customers jointly the environment, future Our to competitiveness, plans current our strategic

execution is XXXX, our focus. For primary

underway safety will initiatives the and COVID-XX a which review our focused our while From initiatives We goals, and on have include operating we and executing to These XXXX. global we would multiple we be to blade logistics me financial standpoint, we expected and including in safely any inclusion, deal call With by prepared carbon-neutral that our become of expertise our and safety, all ESG growth the recycling. operating also to wind that virus. TPI our results. design, capitalize the confirm resurgences and let diversity, remain initiatives operate to that, of and turn advanced leveraging our normal to over continue to remain strategic while capabilities market, levels, business the Adan driving our focused at the associates facilities expanding with like are offerings and I in service to expanding XXXX. long-term are on to enable around on identified our health also and ensuring

Adan Gossar

year-over-year Thanks, the Slide Bill. a comparisons X. All in to basis on Please turn compared be today to same XXXX. met period will

our For sales blade wind the ended in of $XXX.X was driven of XX, to the per material, produced by impact in average an by customers the price supplied blade. on and currency the number net $XXX.X were wind blades our sales blades fourth due sales primarily XXXX, to production increase foreign due offset a million, in in wind fluctuations the quarter while raw The by shortages transition net million. Juarez, decline sales decrease December were of Mexico,

decreased by $X.X for to expenses million. administrative and general quarter million Our the $X.X

the income hedged in of of million same XXXX, the as the was cost was net impact non-cash under attributable the supplied million contract stockholders revenue revenue in of our XXXX. to shortages to continues costs, compared liability basis primarily deferral the common Matamoros, ASC net This estimates against restructuring The due related extension ramp Euro foreign primarily $XXX.X to exposure Foreign This currency million $X.X be exposure exchange to naturally Euro QX compared in in transition due QX was cash for quarter as and materials, income $XX.X to loss Net in Lira. XXX. in decrease to Juarez, in contract losses, the million due was the of XXXX. flow Euro $X.X raw change to and contracts. denominated net to customer loss a period on Turkish

on Slide XX. to Moving

estimates in a reduction year full wind in XXXX, the totaled for attributable was the million, billion. sales of as $X.XX $XXX.X driven sets increase blade, to produced. average For wind to year an blade by sales sales by blades increased price in increase raw under customer restructuring the materials, costs, of in billion ASC cost loss of loss $X.XX due logistics common non-cash and million The and and the Net in a blade offset net impact wind extensions $XX.X net was The inflation, the our stockholders and sales material net Matamoros, contract to shortages Bill? to of increase transition the to losses, revenue related compared XXX. supplied deferral exchange ramp raw in XXXX. was Juarez, foreign in primarily of contract

William Siwek

our and as is recognized enter contract QX Our adjusted agreements. extended loss not of full revenue impacted under for And contracts and earnings quarter million ASC the our QX $X.X cash resulted over by adding $XX.X do our was By and revenue our In flow. into may a was per terms. even $XXX and was because impact EBITDA of adjusted adversely revenue $XX million. adjusted they XXXX, EBITDA it extensions and approximately EBITDA million. improve for We year, contracts complete due under the period to certain third impact results and contract the negatively value primarily the they of way, and to customer extensions in additional amended potential over million, XXX to these terms contracts. cost modifications was these defer XXX Because current contractual long-term estimates of revenue extensions us the of though fourth customer built ASC customer extended almost impact in the not

to Slide Moving XX.

fourth full For through exceeded improved by the execution quarter. during $X.X expectations the profitability we million operational year,

and changes our EBITDA million contracts ASC on cost in reduced to to complete cash our $X.X However, of approximately revenue XXX but reported had no by adjusted impact the estimates flow. deferral $XX of under million,

business. capital working we actual on a billings our of the manage our to as reminder, reflects Slide XX. On cash a flow As basis requirements and business it

year sheet, balance million strong net cash ended a cash unrestricted debt. no with $XXX.X the of and equivalents we and Finally, including

Turning to Slide XX.

and we adjusted For under EBITDA market with certainty XXXX, contract changes or this potential our volatility, extensions, future XXX corresponding to modifications providing which related impacts volume, forecast long-term we or to revenue current given environment. in cannot are guidance, ASC not

million operational we and and to key $XXX,XXX questions. blade sales dedicated CapEx metrics of between of however, will, the between million. I’ll XX% and on set back wind some operator We XX%, provide of turn XX guidance manufacturing $XX average per call total $XXX,XXX, utilization blade price $XX follows: and have for the for now contract, of capacity X,XXX the as under between lines, lines

Operator

is Partners. Instructions] Our Thank you. from [Operator proceed. first Capital with ROTH Justin Please question Clare

Justin Clare

our Hi, everyone, questions. for taking thanks

that off guess provided ASPs. lines first I you So just and dedicated on utilization, you the guidance provided,

just metrics, it which down, like you slightly So to QX sales on is based those looks what flat had alluded be on to I net could the think call.

still year? going you the just that of So Can a through forward? with expectation uncertainty is and for sales that level this reasonable there talk

William Siwek

Yeah, Justin, uncertainty, market. nice especially you. a talk volatility market here lot again, to would say I and U.S. in to the of

Given that in statement that accurate. think QX is we know today, made what I still we

Justin Clare

at goal the turning look And the year, your of you could increase for And the year-over-year guide. ASPs, materials sounds Okay, looks in to X% they if that now or bill then based then at flat on XXXX, margins, your I good. like that’s hold or indicated it could here. least so you

could So the to indicate trend, to you that just that as what to expect be to have do cadence you could here, expand And you that’d how you visibility would wanted see, expanding talk helpful. if through margins but margins margins?

William Siwek

Justin, margins to Yeah, be think a in continue XXXX. bit compressed, I will

I the side, hardware heard us. customers that margins. think continue of different over the no We’ll a from compressed for number pressure margin several the weeks, you’ve our see to on last

have made but focus we have to in We challenging progress many areas, areas significant still on. some

margins say, see So expect through to would some I still XXXX. compressed

Justin Clare

more one me just in. maybe then And Okay. for

to forward million on do million in just know, you want you million $XXX here. thoughts another that? here. of on what the or have $XXX your would Oaktree, the Obviously, move What this with option make you’re to $XXX that are how about thinking check to the to sheet environment, lead but looking balance from given that capital? to add you decision raised So

William Siwek

Yeah.

that If was really drew point confident and for The this very $XXX the remember, in addition time. Million comfortable growth the we level of $XXX, million you of opportunities. to that. only with So feel we $XXX $XXX And in million marked at future

So we to move as but opportunities wouldn’t having anticipate tap for don’t we expect we anything, growth – forward. that or

Justin Clare

and for does That great. on. I’ll me, Okay, it it pass

William Siwek

Great, thanks.

Operator

West Our next Please with question James Evercore ISI. is from proceed.

James West

Hey, afternoon, good Bill.

William Siwek

Hey, James, you? are how

James West

doing I’m well.

Yourself?

William Siwek

great. Doing Thanks.

James West

progress about, provide what there. ship that big above that number, in should be mean, about of you of your there? size with you seeing to Yeah, of terms wind How in Well, award, the or on gave good. some, congratulations that me the year amount could trying kind should of but transportation we size think we you with units it to next are guys dollar But big round think I good award, the XXXX. if blades the I’m you can conceal maybe expect

William Siwek

nature per would I just tell there part Yeah, the it’s part. low, is price on – based the you relatively the of

James West

Right.

William Siwek

in very and us, are on this in and disclose for part point with both it however, But in will positive per time. good. can’t price margins at And that is the pleased what margin XXXX it XXXX. be exactly them Yeah, I we’re

James West

Okay.

Well, fair think, it. of I back get enough. into sort should Okay, we

mean, wind The York US. question some the now. the build better with comments we’re it. forward I then made in other stalled had We you right New here. offshore the about going on But back auction positive I got

on awarding kind the does in If And So acreage, play sure blades? working near I’m mean, to see to and this talking I states playing get kind the start sourcing start capacity mind? acreage. awarded then the out of to you’re this start your you you manufacturing of guys how already you’re out? we – do how all do and you

William Siwek

through work are the be for that so again, other we in conversations the can with the customers our you well sure and that Coast opportunities to on regions East as for world. the ongoing customers of – Yeah, on as have both

So, – discussions this we’ve continue. quite talked robust for time those we’ve been some about and and are

James West

Bill. me. Thanks, for Okay, that’s it

William Siwek

to talking Great. you. Thanks, James. Good

Operator

Our with proceed. next Joseph Guggenheim. question Osha from Please is

Unidentified Analyst

on Hello, [ph] Joe. this actually for Hillary is

question. First

could much context it. any improvement the of room efforts and provide just already been of there further so chain how on You far there? for for if kind And made wondering to you touched versus kind has supply progress I localize

William Siwek

Southeast. wind quite localizing Hey, and you. first of job in in made We’ve Hillary, and Juarez actually done well we’re Indian Yeah. suffice – key focus the our But us. nice progress. and on expect that. making good to in our area. some entrant that’s down as we’ve of a both there global started look of And Matamoros, significant additional the some as opportunities well, And the lot that market. a Northwest pretty talk job Mexico a say, to our of for a that We’ve has the on you nice suppliers, bit it of northeast, on progress in a think, India, make in done suppliers whereas suppliers, and some of if to we’re into entrance the introducing I working a sorry, I that XXXX team we’re the progress will, team in recent I as there. – were we’ll up – to relative And to

Unidentified Analyst

provide you. for to seems bit prepared but and said happen Matamoros, has Thank bit cost if timeline see a kind still more believe Okay, where that for then in they’re improvements, you and where like I it you And to was of of great. little kind what of in room just smoothly, of could get kind you come your up running a we it there? remarks,

William Siwek

Yeah, you bet.

a made it. significant additional progress, Last that was not as the So remarks, our some year, were throwing resources challenged bit we a about amount said And without I it. talked we’ve but we at with. one prepared that in of

high-quality now product I the today, are throughput we well. customer. time, as delivering cost work product drive of time on to, that cycle it’s our and it’s of to we And time down as as on down, to mentioned, So, as side

and second that balance quarter on quarter, cost the this focused we through into of So, driving side of are very it.

better the be would much I there. QX, we’ll down in of expect a So, by end position

Unidentified Analyst

for you. me. all That’s Great, thank

William Siwek

Thanks, Hillary.

Operator

next Our Laura Sanchez question proceed. Morgan is with from Stanley. Please

Laura Sanchez

Can you okay? hear thank for your Bill, me, Hi, time. you

William Siwek

loud to Laura. to you. Good hear and talk I you clear,

Laura Sanchez

likewise. you, Perfect. Thank

So the on wondering commitments? MVCs, those provide volumes today is are to the minimum volume I’m the volume side, if some – OEM there relative idea instability. to where

continue can wondering Or to I’m on if doing costs out? end? further so incur push their volumes OEM So would if

William Siwek

Yeah.

it by and what than, customer, would are by else yeah, So MVOs we a yeah, And your Laura, and we’re a bit MVO, the to the other above we’re guess little say in MVOs. cost if And lower, over MVO region varies some go I in for there we’re been I but require question, the – sure it places, be so what I’m your customer. not above in the to over sure. capacity contract cases, amounts. overall to other to below they the XXX% the did would yes, but

Laura Sanchez

Okay.

on And talking the were the side, of revenues Okay. The XXX incremental charge provided the to for revenues, were given in year the some line the the the being in in of relative range. you year, about related the in guidance to that guidance EBITDA last extensions – terms delay a contracts.

just out you? any does you how further maybe the and there extended offsets, terms pieces there discuss that of take were contracts the like So the moving revenue could or

William Siwek

Yeah.

year, a a extended by of So number we Yeah. year, a or lines right?

And a extended as were by I all well. revenue yes, of there a think corresponding So was year. them impact

amount So and defer EBITDA impacted certain what revenue, a we that’s had to of

Laura Sanchez

even that within revenue to some range? with on revenue you guided And were allowed the remain there the change side that offsets

William Siwek

can on standpoint, a There had nothing I think significantly volume significant different. revenue were that fairly but a I puts – range recall the so. don’t wide and side, We takes from

Laura Sanchez

Yeah.

Thank Understood. Okay. you.

William Siwek

Laura. Thanks, Yep.

Operator

next is with Eric Capital proceed. Group. question Craig-Hallum Please Our from Stine

Aaron Spychalla

for Hi, questions. Thanks it’s Aaron Spychalla on taking for Eric. the

William Siwek

Aaron. Hey,

Aaron Spychalla

and entering Hi. talk maybe [ph] just there those facilities Maybe there. an that Can merging And on market Vestas potentially starting OF you on the forward? with are replacing that update thoughts first of going but give or timeline China. and up, just kind about of kind lines us the on then

William Siwek

Yeah.

you of human a side when have consolidate to it’s So never factories and easy there’s it.

into phenomenal in a team effectively we’ve into our managing China Yangzhou. of Our did both that. blade of job merged And one now operations our

seven So operating lines have we now. there

we four were So the three have that then QX. year. already up starting new by there. we’re lines And We’ll of have end in lines those this operating

integration So very seven total. went But lines the smooth.

market a of Aaron, from to breaking very opportunities. cost expand for production has opportunities right found had at of discussions to do the And point, that opportunity with continue, task going haven’t a that OEM always been number difficult our at a into can profitably. if to customers, look make will a with in continue But China we existing or sure this standpoint. We our Yangzhou number to we Chinese We’ve China, do yet. we’re we that the

So capacity existing on have in to base with work we’ll filling the we that the balance our continue customer of Yangzhou.

Aaron Spychalla

anything Understood. mentioned And then recycling color helpful? kind share you just any of there that else any what just any be contribution, on CapEx can you would of might more or kind entail

William Siwek

early. Yeah, bit the of lot little it’s in industry a it. a about discussion There’s

different on might two you or And CapEx is think. working not end expensive solutions. as as the actually, We’re three

are But recycled, obviously, tower at you Now, need to scale. if be to point. volume got to you of this get that CapEx that you’ve the increase not crazy coming once down blades is

a $X can You could CapEx a – you from lot of for pure blades million, about standpoint. handle

we it’s we is are be able else, that, solutions couple challenge working the we transport to because everything interesting that the get back hope and on expensive, talk CapEx more But XXXX. to Now, of becomes not intensive. but half about of a as that for to

Aaron Spychalla

All I’ll in stay right. there. We’ll queue. hop Thanks. back the tuned

William Siwek

Aaron. Thanks, Great.

Operator

Please with Strouse Mark proceed. Our JPMorgan. next question is from

Mark Strouse

questions. we XXXX. thinking should color how Thanks our directionally gave in business, you Yeah. that on Good about blade some the of for be kind taking Bill, afternoon. speaking

business us Just revenue curious the color any on give you non-blade can this year? directional if

William Siwek

where this Yeah, we I think, over again, that transportation, grow were to we’re year. going

part But frankly. you’ll very good of business. building small I It’s up. overall we’re be still a our see quite think growth, pretty

and We’re to that. we’ll add winning production contracts some

a So we this say. by factor X.X did of more it’ll be year, times, I than would probably

line going by a On year, conservatively, kind that for that. another We business, go on aggressively but that’s times two by grow the we’re to year, where continue top we’re XX% this this top service to up directionally grew probably up of of headed.

Mark Strouse

in targeted just year past, of And a that a there that’s so over you’ve Okay, that Has I appropriate? you led kind the lastly, low EBITDA in that think to has then no structural industry or a think longer the double-digit anything margin. change helpful. last the been that number is

William Siwek

tell to – I better as in how with think, whether back sit is would build you, that’s needs Mark, fundamental happening the you we today, geopolitical from everything and Europe, in going What’s how a wind if it there be to on, here uncertainty priced. change listen given be our I a customers, stalled. standpoint

think do happen. are need structural I changes there some So to that

of question I of to think quarters because the last megawatt per And we’re answer starting couple starting of up. just – Long to back see that’s over that – yes. with your but turbines to yes. is, answer the input is go some that of the costs, not so price so

to I we speak. think do our that customers working need and changes there we’re some as be with structural on

Mark Strouse

Okay. Bill. you, Thank

William Siwek

You bet. Thanks, Mark.

Operator

Molchanov Pavel proceed. from is with question Raymond next Please James. Our

Pavel Molchanov

Turkish much Thanks facility? the Remind geopolitical in ago, you specifically markets A from European referenced the revenue context how of taking comes please, out for minute and question. I guess your Europe. the and specifically of the

William Siwek

Yeah.

go In stays built. does of built. Pavel. up what talk Europe blades it we that than world, of around probably Turkey to Europe, end to Turkey, in of Most in it’s the – it’s you, leave to leave EMEA. XX% that less lot a about our good of are We Turkey So XX% and

in that it’s So neighborhood.

Pavel Molchanov

on the mix, offshore fact as European seemed obviously most disproportionate most and in maybe for are logical history Okay. new $XX of we world adoption Do to gets natural in market, builds the electricity gas drive think land. of land expensive the envision you the the NCF natural in gas, more attention on both of wind in about offshore? When wind still

William Siwek

hope to now I of mean, so, installs, XX% Yeah, XXXX are new onshore. put they’re the between report that WindEurope going would today Pavel. a out them anticipating just I and of the be

of but remains gets amount do of I significant right, lot in Europe. a the and activity you’re the press, onshore challenge still citing. in So Europe – offshore there’s permitting a

the And pace with of could they so XX% Europe XXXX. industry be to estimate like to should gigawatts installs renewable needs and now up hit can much governments now, process, increase how and by to the that target speed significantly. XXXX. work It in their then the that a between Right out XX if twice and figure year

absolutely but your answer question, to the long So is answer yes.

Pavel Molchanov

correct? lastly, light contract basically maybe Proterra, And bodies then version you’re just buck smaller of the be referenced, supplying clarify that a to will duty vehicle that that you the

William Siwek

I components No, was body a passenger platform. mention didn’t light It vehicle. – it’s structural for an EV

that most component body body body it’s structural the part. is under – a a for a not it’s or and So weight

Pavel Molchanov

Okay.

much. Okay. That’s very clear. Thank you

William Siwek

Yeah. Thanks, Pavel.

Operator

from Cowen Please with question is and Our proceed. next Osborne Company. Jeff

Jeffrey Osborne

question a needed on Good or was notable to disclose those afternoon, there’s are you it any EVPs, million is, side. units Bill. A CapEx versus XXXX. established an couple OEM? then my about if if startup ambitious it’s secondary wondering could that a be of I on in questions the goals a And produce maybe would

William Siwek

First all, of incremental no CapEx, secondly, and it’s established platform. Jeff; an

Jeffrey Osborne

it. somewhere else? produced be will in Rhode Got Island And that or

William Siwek

a It is and its in that of in it – portion a Island a another produced Rhode partner supplier. with location with of we portion produced

Jeffrey Osborne

there just you I of Mexico? you are Are I experienced guided could segmented and that associated blade any that other they year. what the challenges multi a I’m transitions question if you for knowledge curious it. level to the or then And blade within those learnings with got that on the piece of locations? how had port quickly you had

William Siwek

Yeah, blade question. transitioning is the piece related no, it’s we’re blade. that The good the that transitions answer to multi is as is, to they’re them. Turkey, single But news Mexico piece in no, and we of two blade. not call – same They’re one would in fair the the one

of both those that’s helpful. And schedule now. we And as so right speak we’re of on ahead

in year. So that complete the did fashion very the we in at of those one optimistic the as efficient first very Turkey beginning we’ll

Jeffrey Osborne

Got it. Thank you all I had.

William Siwek

Thanks, Great. Jeff.

Operator

with question Please Curran next from is Our proceed. Tom Seaport.

Tom Curran

Hello?

William Siwek

Hey, you? Tom, how are

Tom Curran

A one them transitions. us those much to in where the when initiatives you’ve initiations of the of I we those had underway follow-up the and on to you might same know then good. understand, improve from from see? moving Could transitions I topic update intermodal and both are customer. customer – think at improvement Good, with you how you more try another efficiency several do to initiatives what transitions on

William Siwek

give Well, you an I’ll example.

it Turkey, for of an what line. already of an example give did how was is, that you was. for in and to north production a just that transition amount efficient existing transition customer, contractual XXXX estimate So our upped our will We’ve we

line would transitioning in as card about volume for second. not I’m a efficient is we’ve year you the for it. and COVID to a getting about is say – losing any as as if volume So and – the pull I fact, can do more going made

we the was et challenges. some a to because what XXXX, country, experts XXXX a certain control, and really well. our transitions on of our people executed was in of equipment little COVID, challenged under in country, pretty ability of the cetera, it bit created getting were some But the So get whether to

day So, every again, to better. get to I’m pressing guys the continue

much aggressive. more are schedules Our

gotten I better. collaboration our with think customers our has

if transition with deliverables those more them of what consequences part is are aren’t for their holding met. We accountable the

So progress I and feel this We’ve confident the in significant the expect transitions the made I balance to year. as continue very of make year. progress, the to we through go answer is,

Tom Curran

additional And be line remaining out to more consolidation, perhaps whether the Iowa encouraging. relinquished steps idling, savings, Juarez with FCRA? you then, course might year? over wring of or take might facility in we the And then in That been or cost you what you four with of just wondering all this by mothballing do had see sounds not able terms there’s could shutdown lines that the

William Siwek

for or build to back to talked that through But as the in of costs economic Iowa, at reason we about we there. we’ve regulatory the better kind to that lease the as stalled reopening one, The would I lease if provide point. as provisions from there to so standpoint, need was Yeah, did that plant, do there XXXX. be likely that before, number we less back came normal in, maintenance possibly think it build where it’s sense. minimized well made legislative of really this a least at that there a we’ve just With better extended

we much we’re for there, interest it And obviously year. there’s then from happens So do right as savings, nothing that now there’s some from facility, cost a can mothball we’ll But eliminate utilizing XXXX. this a more in other well. for there if that not work whereas cost

end a going not we we the early policy plan the I at when for feel unutilized it’s whether a U.S., what But a have space that I new that little pretty up play optimistic standpoint get quickly. completely. scooped there. have So better, will have from energy bipartisan exactly long-term more the next certainty year, build bit that better extenders once tax market get U.S. again, have the back certainty or clean year, remain about in of think is we But think the whether I we’ll a we a

Tom Curran

taking my for Thanks questions.

William Siwek

You bet. Thank you.

Operator

proceed. next Stephen [Operator Our from with Gengaro question Please Stifel. Instructions] is

Stephen Gengaro

gentlemen. Good afternoon, Thanks.

William Siwek

afternoon. Good

Stephen Gengaro

I disconnected apologize. I got earlier.

going of kind ramp and more the and maybe to kind give forward things a uncertainty. hearing hopefully, aggressive in kind bit your of but on mean, more talked again? I can be kind customers? – of obviously, release this can you of the But was near-term not about sense what So asked, little to bit you on press about are this they’re blade you a what’s a from waterfront restart talk what about the looking for you’re wind you of kind

William Siwek

market they again, publicly, are just and about from not chasing it’s it’s saying Yeah, chasing profitable share, what about business.

So with some of may and discipline seen I to them volumes, think, having QX some we with of think the the order price. I that have in

be us So that they can will well. profitable, help as certainly

share, chasing to So they’re what just discipline really but side, chasing being more share, on chase I’m to hearing diligent contracting. the chasing not just business. just chase from our again, business business, is And not profitable how customers and pricing

Stephen Gengaro

about as think the your Okay, is as some And speak, have picture bigger but positive you. balls the you over we you’re of when cloudy, the are, great. Thank know crystal all second a sort one, I of I when how us perspective. And just then that turn the of into XXXX next that and sort like, thinking just several get of sort you the – when EBITDA you in you kind about how got, of are quarters?

William Siwek

standpoint, and for will couple startup of QX I in be will quarter think a our – quarter. sequencing I us, transitions down because of all the happen from just our would our startups a say, and a No, Steve,

holidays then a see – and you. dip quarter, And bit, see is the quarter, primarily QX. little would a I sorry. will that’s so best we’ll have typical. of kind quarter And our sequence you’ll and – that’ll it be how EBITDA or the QX will because in over be of year, that’s likely build QX, what fairly then down the But and a which over

Stephen Gengaro

great. Okay, Thanks color. the for

William Siwek

you. Thank bet. You

Operator

Kashy with Harrison with Our Piper question. proceed next from your question is Sandler. Please

Kashy Harrison

taking and the for Good afternoon, question. thank you

William Siwek

You bet.

Kashy Harrison

for apologies this just would you slightly quick some full should little we me, in transition But a Thank directionally in one directional for down, answered form one be and just you. cost Just XXXX the in fashion year? startup the simplistically, Are or thinking great? I if how slightly about flattish, indicator earlier. bit some up, line think was

William Siwek

be our I of Juarez startups in in job Matamoros, will as Yeah, and that directionally, XXXX recognizing I would really probably had challenges – fact I of in say would that good given does China, the team we the transitions either really, the startups was it as number a and And well bit a are transitions in by down China or for think startups. impacted more year-over-year. the

Kashy Harrison

all Thank Got it. That’s needed. you. I

William Siwek

You Thanks, bet. Kashy.

Operator

is question America. of Adhok with next Bank our from Bellurkar And Please proceed.

Adhok Bellurkar

Thank of China of turbine you Europe, much. to I into outside OEMs taking of a had discussions expand question higher mainland, wind Chinese at Thank we’ve heard my guess the you level, first so the was looking some I Good for evening. question. for example.

about beyond that back an of expanding So potentially and as the with opportunity we partnership look base. customer get to your equation? like into current TPI pursue Does think interesting

William Siwek

Thanks for question. the

it – aggressive require, or they discussions from terms is the had earlier, and with the we’ve for request, OEMs, is that extremely our mentioned years the perspective. I Chinese As pricing

and of China the are is the they making China. wind world, market some mean, headway outside So largest in I

So a cost from will standpoint, of never I a But bit just for that as say right today, never, us yeah. look is putt at a long from opportunity. it pure now certainly I perspective, an it’s

Adhok Bellurkar

epoxy should or or materials, And best fiber was think wondering help puzzle could of versus extremely your Understood. whether status trading, in understanding wood XXXX, they fiberglass the their around was raw carbon how then That’s it? and tailwind complete resin terms helpful. commentary for you are about if I helpful. quo us how we of

William Siwek

Yeah.

that for would you costs tell I So that, from seeing of increasing we’re some the carbon. reasons

We’re capacity well a is seeing and some to PET as constraints as challenges with some and capacity PET some extent, a feedstock there well. both PET. as we’re acrylonitrile for is issue, carbon seeing

there, a contracts XXXX few good there a capacity And expect X% a next from can’t or pricing year-over-year for bit, bit shape this from manage remain challenge to in little that a but for think that standpoint, that’s but through. X% that of year. increase year, on to So our a But we we’re nothing a constraints probably XXXX. we pretty see based supply to Glassfibre, I we challenge.

Adhok Bellurkar

know then I only now? the the question for then the one $X.X the terms I current XXXX? guess would of does [EDI was I $XXX [ph] in parts just billion, linking the And that contracts long-term half? target order] have you I then have you. to just million where backlog guess year parts and last to you new that X multiple from right number touched had within the the Thank from upon the these Understood. XX,XXX angles. have And capture And be that the full this what’s second for million room it expand you they shared are

William Siwek

we not this value for I first which did or number. And those to so production, are contracts ability the part customer, the to mean, included led the Yeah, – we the successfully, in opportunity. expand, number made the first backlog or is very today which contract the

the opportunity to I relationship think the geographically. there’s expand

continue So right that ability is if in these I option. to that to innovative, customers, for certainly is upfront think be nimble, fast, demonstrate expand reduce front tooling of our our costs work an and we opportunity to But us.

Adhok Bellurkar

so helpful. much. really Thank That’s you it. Got

William Siwek

Thank you.

Operator

conference comments. have back session. the for reached end like of closing over would question-and-answer We Bill our I the hand to

William Siwek

Thank everybody, questions. you, and thanks, for your

mission for then solution again, remain customers commitment future. finally, execution the in to business on we our and the efforts to provider And global electrify. through once our thank to to as profitable and managing you, Thank near-term focused the and to TPI our decarbonize TPI the growth challenges and industry and dedication associates, want today. reiterate, in for preferred again, to their your our position I time to Just TPI our enable

Operator

does This Thank today’s conference. conclude you.

may time, participation. this your at thank You for you lines and disconnect your

TPI Composites (TPIC) 25 Feb 222021 Q4 Earnings call transcript