TPI Composites Reports 13.0% Increase in Net Sales for the Quarter Ended June 30, 2020

August 10 2020

Net sales for the three months ended June 30, 2020 increased by $43.0 million or 13.0% to $373.8 million compared to $330.8 million in the same period in 2019. Net sales of wind blades increased by 15.3% to $348.1 million for the three months ended June 30, 2020 as compared to $301.8 million in the same period in 2019. The increase in net sales was primarily driven by a 10% increase in the number of wind blades produced during the three months ended June 30, 2020 compared to the same period in 2019 largely as a result of increased production at our China facilities and our Matamoros, Mexico facility. The increase was also due to a higher average sales price due to the mix of wind blade models produced during the three months ended June 30, 2020 compared to the same period in 2019. Although TPI’s net sales increased for the three months ended June 30, 2020 compared to the same period in 2019, the company estimates that its net sales were adversely impacted by approximately $96 million.

Total cost of goods sold for the three months ended June 30, 2020 was $378.6 million and included $6.9 million related to lines in startup and $4.0 million related to lines in transition during the quarter. This compares to total cost of goods sold for the three months ended June 30, 2019 of $308.2 million and included $14.7 million related to lines in startup and $8.2 million related to lines in transition during the quarter. Total cost of goods sold as a percentage of net sales increased by approximately 8% during the three months ended June 30, 2020 as compared to the same period in 2019.

General and administrative expenses for the three months ended June 30, 2020 totaled $6.9 million, or 1.8% of net sales, compared to $9.2 million, or 2.8% of net sales, for the same period in 2019.

Income taxes reflected a provision of $49.3 million for the three months ended June 30, 2020 as compared to a provision of $0.5 million for the same period in 2019.

Net loss for the three months ended June 30, 2020 was $66.1 million as compared to net income of $1.8 million in the same period in 2019. TPI estimate that its net loss was adversely impacted by approximately $39 million, net of taxes. In addition, TPI incurred approximately $16 million, net of taxes, of COVID-19 related costs associated with the health and safety of our associates and non-productive labor. The net loss per share was $1.87 for the three months ended June 30, 2020, compared to a net income per share of $0.05 for the three months ended June 30, 2019. Adjusted EBITDA for the three months ended June 30, 2020 decreased to $3.3 million compared to $23.4 million during the same period in 2019. Adjusted EBITDA margin decreased to 0.9% compared to 7.1% during the same period in 2019. TPI estimates that its Adjusted EBITDA was adversely impacted for the three months ended June 30, 2020 by approximately $36 million.

Capital expenditures were $15.0 million for the three months ended June 30, 2020 as compared to $19.0 million during the same period in 2019.

TPI 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 the company 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 declared 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.

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