TPI Composites, Inc. Announces Fourth Quarter and Full Year 2020 Earnings Results – Double Digit Full Year Net Sales Growth
TPI Composites (Nasdaq: TPIC) reported strong fourth quarter results for 2020, achieving net sales of $465.6 million, a 10.3% increase, and a net income of $5.2 million or $0.14 per diluted share. The full year results showed net sales of $1,670.1 million despite a net loss of $19.0 million. Adjusted EBITDA rose to $40.8 million, with a margin expansion to 8.8%. For 2021, the company projects net sales between $1.75 billion and $1.85 billion and adjusted EBITDA of $110 million to $135 million, reflecting optimism in wind and transportation markets.
- 4Q 2020 net sales increased by 10.3% to $465.6 million.
- Adjusted EBITDA for 4Q 2020 rose to $40.8 million, a 27% increase year-over-year.
- Projected 2021 net sales guidance of $1.75 billion to $1.85 billion.
- Full year 2020 net loss of $19.0 million.
- COVID-19 related costs impacted net income by approximately $2 million.
- Negative free cash flow of $8.5 million in 4Q 2020.
SCOTTSDALE, Ariz., Feb. 25, 2021 (GLOBE NEWSWIRE) -- TPI Composites, Inc. (Nasdaq: TPIC), the only independent manufacturer of composite wind blades with a global footprint, today reported financial results for the fourth quarter and full year ended December 31, 2020.
Highlights
For the quarter ended December 31, 2020:
- Net sales of
$465.6 million - Net income of
$5.2 million or$0.14 per diluted share - EBITDA of
$30.5 million - Adjusted EBITDA of
$40.8 million
For the full year 2020:
- Net sales of
$1,670.1 million - Net loss of
$19.0 million or$0.54 per diluted share - EBITDA of
$52.3 million - Adjusted EBITDA of
$94.5 million
| KPIs | 4Q’20 | 4Q’19 | FY'20 | FY'19 | |||||
| Sets¹ | 988 | 953 | 3,544 | 3,189 | |||||
| Estimated megawatts² | 3,525 | 3,217 | 12,080 | 9,598 | |||||
| Utilization3 | 92 | % | 96 | % | 81 | % | 79 | % | |
| Dedicated manufacturing lines4 | 53 | 52 | 53 | 52 | |||||
| Manufacturing lines installed5 | 55 | 48 | 55 | 48 | |||||
- Number of wind blade sets (which consist of three wind blades) produced worldwide during the period.
- Estimated megawatts of energy capacity to be generated by wind blade sets produced during the period.
- Utilization represents the percentage of wind blades invoiced during the period compared to the total potential wind blade capacity of manufacturing lines installed during the period.
- Number of wind blade manufacturing lines that are dedicated to our customers under long-term supply agreements at the end of the period.
- Number of wind blade manufacturing lines installed and either in operation, startup or transition during the period.
“We finished 2020 strong with
“Strong long-term demand prospects for wind in the U.S. and globally, driven by economics as well as the acceleration of decarbonization initiatives, give us confidence in our global wind strategy as we continue to serve our customers in an efficient and cost-effective manner across our global manufacturing footprint. As it relates to our transportation business, we expect there will be an increased demand for composite components and structures for electric vehicles as composite material systems can be the key material building blocks for purpose built electric vehicles. Our composite solutions are ideally suited for transportation applications because of the benefits resulting from weight reduction and therefore extended range for EVs, corrosion resistance, strength, durability, a lower upfront production investment and lower total cost of ownership for end users. The level of interest in our capabilities continues to grow and we are collaborating with our customers to develop innovative composite solutions for vehicles across passenger automotive, bus, truck, and delivery vehicles. Today, we are building composite bodies for buses and delivery vehicles, components for multiple passenger automotive platforms under technology development and pilot production agreements, and while continuing to make the investments needed to build out our team, technology and infrastructure required to drive new innovations and capitalize on the accelerating EV and light weighting trends.”
“While it’s still a bit early to speculate on the ultimate impact the new U.S. administration will have on renewables, based on early actions and stated intentions, we view the long-term outlook under a Biden administration as very supportive and beneficial to renewables and therefore our business. On a global basis, Europe plans to cut emissions faster,
“Our success in 2020 was a result of the ability of our nearly 15,000 associates to navigate the COVID-19 pandemic with courage, purpose and efficiency. We are still closely monitoring the COVID-19 pandemic but have successfully dealt with resurgences across all regions in which we operate and will remain vigilant until we are through the pandemic. As of today, we continue to operate all of our plants at normal capacities.”
Fourth Quarter 2020 Financial Results
Net sales for the three months ended December 31, 2020 increased by
Total cost of goods sold for the three months ended December 31, 2020 was
General and administrative expenses for the three months ended December 31, 2020 totaled
Income taxes reflected a provision of
Net income for the three months ended December 31, 2020 was
Adjusted EBITDA for the three months ended December 31, 2020 increased to
Capital expenditures were
We ended the quarter with
2021 Guidance
For the full year ending December 31, 2021, we expect:
| Guidance | Full Year 2021 |
| Net Sales | |
| Adjusted EBITDA | |
| Dedicated Manufacturing Lines | 50 |
| Utilization % | |
| Wind Blade Set Capacity | 4,090 |
| Average Selling Price per Blade | |
| Non-Blade Sales | |
| Capital Expenditures | |
| Startup Costs |
Conference Call and Webcast Information
TPI Composites will host an investor conference call this afternoon, Thursday, February 25th 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 1-877-300-8521, or for international callers, 1-412-317-6026. 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 10152307. The replay will be available until March 4, 2021. 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 foreign currency income or losses, any 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.
Investor Relations
480-315-8742
Investors@TPIComposites.com
| TPI COMPOSITES, INC. AND SUBSIDIARIES | ||||||||||||||
| TABLE ONE - CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||||||||
| (UNAUDITED) | ||||||||||||||
| Three Months Ended December 31, | Year Ended December 31, | |||||||||||||
| (in thousands, except per share data) | 2020 | 2019 | 2020 | 2019 | ||||||||||
| Net sales | $ | 465,571 | $ | 422,113 | $ | 1,670,137 | $ | 1,436,500 | ||||||
| Cost of sales | 420,249 | 386,484 | 1,561,432 | 1,290,619 | ||||||||||
| Startup and transition costs | 13,076 | 4,827 | 44,606 | 68,033 | ||||||||||
| Total cost of goods sold | 433,325 | 391,311 | 1,606,038 | 1,358,652 | ||||||||||
| Gross profit | 32,246 | 30,802 | 64,099 | 77,848 | ||||||||||
| General and administrative expenses | 7,850 | 12,115 | 33,496 | 39,916 | ||||||||||
| Loss on sale of assets and asset impairments | 2,230 | 7,556 | 7,748 | 18,117 | ||||||||||
| Restructuring charges, net | 3,746 | 202 | 4,089 | 3,927 | ||||||||||
| Income from operations | 18,420 | 10,929 | 18,766 | 15,888 | ||||||||||
| Other income (expense): | ||||||||||||||
| Interest income | 47 | 32 | 102 | 157 | ||||||||||
| Interest expense | (3,037 | ) | (1,776 | ) | (10,501 | ) | (8,179 | ) | ||||||
| Foreign currency loss, net | (1,891 | ) | (3,057 | ) | (19,986 | ) | (4,107 | ) | ||||||
| Miscellaneous income | 983 | 1,413 | 3,876 | 3,648 | ||||||||||
| Total other expense | (3,898 | ) | (3,388 | ) | (26,509 | ) | (8,481 | ) | ||||||
| Income (loss) before income taxes | 14,522 | 7,541 | (7,743 | ) | 7,407 | |||||||||
| Income tax provision | (9,338 | ) | (8,402 | ) | (11,284 | ) | (23,115 | ) | ||||||
| Net income (loss) | $ | 5,184 | $ | (861 | ) | $ | (19,027 | ) | $ | (15,708 | ) | |||
| Weighted-average common shares outstanding: | ||||||||||||||
| Basic | 36,062 | 35,174 | 35,532 | 35,062 | ||||||||||
| Diluted | 38,100 | 35,174 | 35,532 | 35,062 | ||||||||||
| Net income (loss) per common share: | ||||||||||||||
| Basic | $ | 0.14 | $ | (0.02 | ) | $ | (0.54 | ) | $ | (0.45 | ) | |||
| Diluted | $ | 0.14 | $ | (0.02 | ) | $ | (0.54 | ) | $ | (0.45 | ) | |||
| Non-GAAP Measures (unaudited): | ||||||||||||||
| EBITDA | $ | 30,504 | $ | 20,133 | $ | 52,323 | $ | 54,009 | ||||||
| Adjusted EBITDA | $ | 40,776 | $ | 32,025 | $ | 94,498 | $ | 85,841 | ||||||
| TPI COMPOSITES, INC. AND SUBSIDIARIES | ||||
| TABLE TWO - CONDENSED CONSOLIDATED BALANCE SHEETS | ||||
| (UNAUDITED) | ||||
| December 31, | December 31, | |||
| (in thousands) | 2020 | 2019 | ||
| Assets | ||||
| Current assets: | ||||
| Cash and cash equivalents | $ | 129,857 | $ | 70,282 |
| Restricted cash | 339 | 992 | ||
| Accounts receivable | 132,768 | 184,012 | ||
| Contract assets | 216,928 | 166,515 | ||
| Prepaid expenses | 29,507 | 10,047 | ||
| Other current assets | 27,921 | 29,843 | ||
| Inventories | 10,839 | 6,731 | ||
| Total current assets | 548,159 | 468,422 | ||
| Noncurrent assets: | ||||
| Property, plant, and equipment, net | 209,001 | 205,007 | ||
| Operating lease right of use assets | 158,827 | 122,351 | ||
| Other noncurrent assets | 40,270 | 30,897 | ||
| Total assets | $ | 956,257 | $ | 826,677 |
| Liabilities and Stockholders' Equity | ||||
| Current liabilities: | ||||
| Accounts payable and accrued expenses | $ | 295,992 | $ | 293,104 |
| Accrued warranty | 50,852 | 47,639 | ||
| Current maturities of long-term debt | 32,551 | 13,501 | ||
| Current operating lease liabilities | 26,099 | 16,629 | ||
| Contract liabilities | 614 | 3,008 | ||
| Total current liabilities | 406,108 | 373,881 | ||
| Noncurrent liabilities: | ||||
| Long-term debt, net of debt issuance costs and | ||||
| current maturities | 184,316 | 127,888 | ||
| Noncurrent operating lease liabilities | 155,925 | 113,883 | ||
| Other noncurrent liabilities | 8,873 | 5,975 | ||
| Total liabilities | 755,222 | 621,627 | ||
| Total stockholders' equity | 201,035 | 205,050 | ||
| Total liabilities and stockholders' equity | $ | 956,257 | $ | 826,677 |
| TPI COMPOSITES, INC. AND SUBSIDIARIES | ||||||||||||||
| TABLE THREE - CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||||||||
| (UNAUDITED) | ||||||||||||||
| Three Months Ended December 31, | Year Ended December 31, | |||||||||||||
| (in thousands) | 2020 | 2019 | 2020 | 2019 | ||||||||||
| Net cash provided by (used in) operating activities | $ | 3,705 | $ | (5,651 | ) | $ | 37,570 | $ | 57,084 | |||||
| Net cash used in investing activities | (12,238 | ) | (15,316 | ) | (65,666 | ) | (75,510 | ) | ||||||
| Net cash provided by (used in) financing activities | (13,815 | ) | (1,388 | ) | 88,612 | 970 | ||||||||
| Impact of foreign exchange rates on cash,cash equivalents and restricted cash | 1,135 | (56 | ) | (2,069 | ) | (171 | ) | |||||||
| Cash, cash equivalents and restricted cash, beginning of period | 151,409 | 94,160 | 71,749 | 89,376 | ||||||||||
| Cash, cash equivalents and restricted cash, end of period | $ | 130,196 | $ | 71,749 | $ | 130,196 | $ | 71,749 | ||||||
| TPI COMPOSITES, INC. AND SUBSIDIARIES | |||||||||||||
| TABLE FOUR - RECONCILIATION OF NON-GAAP MEASURES | |||||||||||||
| (UNAUDITED) | |||||||||||||
| EBITDA and adjusted EBITDA are reconciled as follows: | Three Months Ended December 31, | Year Ended December 31, | |||||||||||
| (in thousands) | 2020 | 2019 | 2020 | 2019 | |||||||||
| Net income (loss) | $ | 5,184 | $ | (861 | ) | $ | (19,027 | ) | $ | (15,708 | ) | ||
| Adjustments: | |||||||||||||
| Depreciation and amortization | 12,992 | 10,848 | 49,667 | 38,580 | |||||||||
| Interest expense (net of interest income) | 2,990 | 1,744 | 10,399 | 8,022 | |||||||||
| Income tax provision | 9,338 | 8,402 | 11,284 | 23,115 | |||||||||
| EBITDA | 30,504 | 20,133 | 52,323 | 54,009 | |||||||||
| Share-based compensation expense | 2,405 | 1,077 | 10,352 | 5,681 | |||||||||
| Foreign currency loss, net | 1,891 | 3,057 | 19,986 | 4,107 | |||||||||
| Loss on sale of assets and asset impairments | 2,230 | 7,556 | 7,748 | 18,117 | |||||||||
| Restructuring charges, net | 3,746 | 202 | 4,089 | 3,927 | |||||||||
| Adjusted EBITDA | $ | 40,776 | $ | 32,025 | $ | 94,498 | $ | 85,841 | |||||
| Free cash flow is reconciled as follows: | Three Months Ended December 31, | Year Ended December 31, | |||||||||||
| (in thousands) | 2020 | 2019 | 2020 | 2019 | |||||||||
| Net cash provided by (used in) operating activities | $ | 3,705 | $ | (5,651 | ) | $ | 37,570 | $ | 57,084 | ||||
| Capital expenditures | (12,238 | ) | (15,316 | ) | (65,666 | ) | (74,408 | ) | |||||
| Free cash flow | $ | (8,533 | ) | $ | (20,967 | ) | $ | (28,096 | ) | $ | (17,324 | ) | |
| Net debt is reconciled as follows: | December 31, | ||||||||||||
| (in thousands) | 2020 | 2019 | |||||||||||
| Cash and cash equivalents | $ | 129,857 | $ | 70,282 | |||||||||
| Less total debt, net of debt issuance costs | (216,867 | ) | (141,389 | ) | |||||||||
| Less debt issuance costs | (1,051 | ) | (672 | ) | |||||||||
| Net debt | $ | (88,061 | ) | $ | (71,779 | ) | |||||||
| A reconciliation of the low end and high end ranges of projected net income to projected EBITDA and projected adjusted EBITDA for the full year 2021 is as follows: | 2021 Guidance Range (1) | ||||||||||||
| (in thousands) | Low End | High End | |||||||||||
| Projected net income | $ | 13,000 | $ | 22,000 | |||||||||
| Adjustments: | |||||||||||||
| Projected depreciation and amortization | 48,000 | 52,000 | |||||||||||
| Projected interest expense (net of interest income) | 12,000 | 14,000 | |||||||||||
| Projected income tax provision | 15,000 | 19,000 | |||||||||||
| Projected EBITDA | 88,000 | 107,000 | |||||||||||
| Projected share-based compensation expense | 7,000 | 9,000 | |||||||||||
| Projected restructuring charges | 9,000 | 11,000 | |||||||||||
| Projected loss on sale of assets and asset impairments | 6,000 | 8,000 | |||||||||||
| Projected Adjusted EBITDA | $ | 110,000 | $ | 135,000 | |||||||||
| (1) All figures presented are projected estimates for the full year ending December 31, 2021. | |||||||||||||
FAQ
What are TPI Composites' financial results for Q4 2020?
What is TPI Composites' 2021 guidance?
How did TPI Composites perform in 2020?
What were the adjusted EBITDA figures for TPI Composites?
