EDGAR 10-K Filing

Company CIK: 1455684
Filing Year: 2025
Filename: 1455684_10-K_2025_0000950170-25-024274.json

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ITEM 1. BUSINESS
Item 1. Business
Description of Business
TPI Composites, Inc. is the holding company that conducts substantially all of its business operations through its direct and indirect subsidiaries (collectively, the Company, TPI or we). The Company was founded in 1968 and has been producing composite wind blades since 2001. The Company is incorporated in the State of Delaware.
Discontinued Operations
On June 30, 2024, we completed the divestiture of our wholly-owned subsidiary, TPI, Inc. (the Automotive subsidiary). The Automotive subsidiary was engaged in the development, commercialization and implementation of the Company’s automotive industry related products. The Automotive subsidiary was previously classified as held for sale in the Company’s Consolidated Balance Sheets as of December 31, 2023. The divestiture constituted a strategic shift as the Company will focus entirely on executing on its core business in the wind industry going forward, and accordingly, the historical results of our Automotive subsidiary have been presented as discontinued operations in our Consolidated Statements of Operations and Consolidated Balance Sheets.
In December 2022, we committed to a restructuring plan to rebalance our organization and optimize our global manufacturing footprint. Changing economic and geopolitical factors, including increased logistics costs and tariffs imposed on components of wind turbines from China, including wind blades, had an adverse impact on demand and profitability for our wind blades manufactured in our Chinese facilities. In connection with our restructuring plan, we ceased production at our Yangzhou, China manufacturing facility as of December 31, 2022. Our business operations in China comprised the entirety of our "Asia" reporting segment. The shut down had a meaningful effect on our global manufacturing footprint and consolidated financial results. Accordingly, the historical results of our Asia reporting segment have been presented as discontinued operations in our Consolidated Statements of Operations and Consolidated Balance Sheets. Our China operations represented a geographic operating segment that included (1) the manufacturing of wind blades at our facilities in Dafeng, China and Yangzhou, China, (2) the manufacturing of precision molding and assembly systems at our Taicang Port, China facility and (3) wind blade inspection and repair services.
The following discussion reflects continuing operations only, unless otherwise indicated.
Overview
We are an independent manufacturer of composite wind blades for the wind energy market with a global manufacturing footprint. We enable many of the industry’s leading wind turbine original equipment manufacturers (OEM) to outsource the manufacturing of a portion of their wind blades through our global footprint of advanced manufacturing facilities strategically located to serve large wind markets in a cost-effective manner. Given the importance of wind energy capture, turbine reliability and cost to power producers, the size, quality and performance of wind blades is highly strategic to our OEM customers. As a result, we have become a key supplier to our OEM customers in the manufacture of wind blades and related precision molding and assembly systems. We have entered into supply agreements pursuant to which we dedicate capacity at our facilities to our customers and manufacture wind blade sets (each set consisting of three wind blades) for our customers. This collaborative dedicated supplier model provides us with contracted volumes that generate revenue visibility, drive capital efficiency and allow us to produce wind blades at a competitive cost, while ensuring critical dedicated capacity for our customers.
We also provide field service inspection and repair services to our OEM customers and wind farm owners and operators. Our field service inspection and repairs services include diagnostic, repair and maintenance service offerings for wind blades that have been installed on wind turbines located at wind farms. Our field service inspection and repair services can be performed up-tower, where a blade technician performs these services in the air or from the wind turbine tower on a wind turbine blade, or down tower, where a blade is first removed from a wind turbine and these services are performed on the ground at the wind farm site or in a repair facility.
Our wind blade manufacturing business accounted for approximately 97%, 97%, and 96% of our total net sales for each of the years ended December 31, 2024, 2023 and 2022, respectively.
Financial Information about Segments and Geographic Areas
We divide our business operations into four geographic operating segments - (1) the United States (U.S.), (2) Mexico, (3) Europe, the Middle East and Africa (EMEA) and (4) India as follows:
•Our U.S. segment includes (1) the manufacturing of wind blades at our Newton, Iowa facility in which production has been shut down since the end of the fourth quarter of 2021, and is expected to resume in the second half of 2025, (2) wind blade inspection and repair services in the U.S., (3) our advanced engineering center in Kolding, Denmark, which provides technical and engineering resources to our manufacturing facilities, (4) our engineering center in Berlin, Germany and (5) our corporate headquarters.
•Our Mexico segment includes (1) the manufacturing of wind blades at our three facilities in Juárez, Mexico and one facility in Matamoros, Mexico, (2) the manufacturing of precision molding and assembly systems at our fourth Juárez, Mexico facility and (3) wind blade inspection and repair services in Mexico.
•Our EMEA segment includes (1) the manufacturing of wind blades at our two facilities in Izmir, Türkiye, (2) wind blade inspection and repair services in Türkiye, (3) our wind blade inspection and repair service facility in Madrid, Spain, (4) wind blade inspection and repair services in the United Kingdom, and (5) wind blade inspection and repair services in France.
•Our India segment includes (1) the manufacturing of wind blades at our facility in Chennai, India, and (2) wind blade inspection and repair services in India.
For additional information regarding our discontinued operations, and operating segments and geographic areas, see Note 2 - Discontinued Operations, and Note 24 - Segment Reporting, respectively, of the Notes to Consolidated Financial Statements included in Part II, Item 8 of this Annual Report on Form 10-K.
Business Strategy
Our long-term success will be driven by our business strategy. The key elements of our business strategy are as follows:
•Capitalize on the long-term, global trends of decarbonization of the electric sector. We believe we are well-positioned to participate and benefit from the long term, global trend of decarbonization of the electric sector. Although regulatory uncertainty, including uncertainty related to the current U.S. Presidential administration's actions regarding clean energy, as well as permitting, siting and transmission challenges in the U.S. and Europe has tempered demand for wind energy in the near term, we expect global demand for renewable energy, and wind energy in particular, will continue to grow in the long term due to a multitude of factors, including: increased cost competitiveness of wind energy compared to fossil fuel generated electricity; increased demand from corporations and utility providers for renewable energy; the need for energy independence and security and recent international policy initiatives designed to promote the growth of renewable energy. We believe our global footprint of manufacturing facilities will allow us to capitalize on the expected long term, global growth of wind energy.
•Grow our existing relationships and develop new relationships with leading industry OEMs. We plan to continue growing and expanding our relationships with existing customers who, according to data from BloombergNEF (Bloomberg), represented approximately 77% of the global onshore wind energy market (excluding China), and 88% of the U.S. onshore wind turbine market over the three years ended December 31, 2023, based on megawatts (MWs) of energy capacity installed, as well as developing new relationships with other leading industry OEMs. We expect to be presented with opportunities to expand our existing relationships and develop new relationships with industry OEMs as they seek to capitalize on the benefits of outsourced wind blade manufacturing while maintaining high quality customization and dedicated capacity. In December 2022, we extended our supply agreements with GE Vernova at
two of our Juarez, Mexico manufacturing facilities through 2025. In December 2023, we added our third blade manufacturing facility in Juarez, Mexico to our agreement with GE Vernova for four new lines through 2025. In November 2024, we agreed with GE Vernova to reopen our Iowa manufacturing facility in the second half of 2025. In December 2024, we extended our supply agreements with Vestas in Mexico and India through 2025. In December 2024, we also extended our supply agreements with Nordex in Türkiye through 2025.
•Leverage our footprint in large and growing wind markets, capitalize on the continuing outsourcing trend and evaluate strategic acquisitions. As many wind turbine OEMs continue to shift towards increased outsourcing of wind blade manufacturing, we believe we are well-positioned with our global footprint, and we believe we have optimized this footprint to serve key customers in key markets. We utilize our strengths in composites technology and manufacturing, combined with our collaborative dedicated supplier model to provide our customers with an efficient solution for their expansion in large and growing onshore wind markets. In addition, our demonstrated ability to enter into new markets and the strength of our manufacturing capabilities afford us the optionality to build new factories or grow through strategic acquisitions.
•Continue to ensure that wind energy remains competitive with other energy sources. We continue to work with our customers on wind blade models that maximize the capture of wind energy so that the levelized cost of energy for wind energy remains competitive with other energy sources such as solar and natural gas. We also continue to utilize our advanced technology, regional manufacturing facilities strategically located to cost effectively serve large wind markets and ability to source materials globally at competitive costs to deliver high-performing, composite wind blades. Our collaborative engineering approach and our advanced precision molding and assembly systems allow us to integrate our customer’s design requirements with cost-efficient, replicable and scalable manufacturing processes. This collaborative engineering approach with our customers also allows us to reduce manufacturing cycle times, new line and factory start up times and new blade model transition times. We also continue to work with our customers to minimize the impacts of inflation, including increases in the cost of materials and production in a manner that further strengthens our customer relationships and mitigates the impact to our margins.
•Expand our field service inspection and repair business and introduce new ancillary products and services to help our customers better manage the full life cycle of a wind blade. We plan to continue to expand our field service inspection and repair business by leveraging our existing wind blade manufacturing and composites expertise and global footprint. We believe there is an increasing demand and growing market for experienced wind blade inspection and repair services worldwide as the number of wind turbines installed worldwide continues to grow and the fleet of existing wind turbines continues to age. We also expect that the operating margins at our field service inspection and repair business will improve in 2025 and will be higher than the operating margins of our wind blade manufacturing business in future periods. We also are seeking to develop a more comprehensive suite of products and services to help our customers better manage the full life cycle of a wind turbine blade.
•Focus on continuing innovation. We have a history of innovation in advanced composite technologies and production techniques and use several proprietary technologies related to wind blade manufacturing. With this culture of innovation and a collaborative “design for manufacturability” approach, we continue to address increasing physical dimensions, demanding technical specifications and strict quality control requirements for our customers’ most advanced wind blades.
Wind Blade Manufacturing Operations and Process
We have developed significant expertise in advanced composite technology and we use high performance composite materials, precision molding and assembly systems including modular tooling, and advanced process technology, as well as sophisticated measurement, inspection, testing and quality assurance tools, allowing us to produce over 98,000 wind blades since 2001 from our continuing and discontinued operations with a strong, long-term field performance record in a market where reliability is critical to our customers’ success. We manufacture or have manufactured wind blades ranging from 30 meters to over 80 meters in length across our global facilities and have the capability to manufacture wind blades of greater lengths as required by existing or new customers. In
combination with our advanced technologies, we seek to create manufacturing processes that are replicable and scalable in our manufacturing facilities located worldwide, regardless of cultural or language barriers. Using continuous improvement principles, we can customize each manufacturing step, from raw materials to finished products. This also allows us to systematically design for the entire manufacturing process so that we can achieve better quality control and increase production efficiencies. We believe that our focus on simplifying and, where feasible, automating production processes is critical to manufacturing high-precision, lightweight and durable products at a competitive cost for our customers. We produce high unit volumes of near-aerospace grade products at industrial costs.
Raw Materials
The key raw materials for the wind blades we manufacture include highly advanced fiberglass fabrics, select carbon reinforcements, foam, balsa wood, resin, adhesives for assembly of molded components, gel coat or paint for preparation of cosmetic surfaces and attachment hardware including steel components. Most of these materials are available in multiple geographic regions and in reasonably close proximity to our manufacturing facilities. Our agreements for the supply of raw materials are designed to secure volumes that we believe will be required to fulfill our customers’ wind blade commitments for fixed prices with limited contractual price adjustment provisions. A portion of our raw materials are subject to price volatility, such as the resins and carbon reinforcements used in our manufacturing processes.
Although the majority of materials incorporated into our products are available from a number of sources, certain materials are available only from a relatively limited number of suppliers. We seek multiple suppliers for our raw materials and continually evaluate potential new supplier relationships. However, one of our customers sources all of the critical raw materials that we use to produce such customers' wind blades. Since we do not source procurement of these raw materials for this customer, we have fewer controls and remedies to mitigate raw material and supply chain risks and disruptions relating to such raw materials for such customer.
Precision Molding and Assembly Systems
Over the last decade, we have produced hundreds of precision molding and assembly systems, ranging from 30 meters to over 80 meters in length, to support our global operations.
Our tooling solutions include precision wind blade patterns, precision molding and assembly systems, including modular tooling techniques. We believe that our technological and production expertise are key factors in our continued competitiveness, as we address continually increasing physical dimensions, demanding technical specifications, and strict quality control requirements for wind blades.
We are exploring alternatives for the divestiture of our tooling business as part of our continued prioritization of capital for growth in the wind blade business. We expect to complete the divestiture in 2025.
Wind Blade Production Process
Production of wind blades requires adherence to the unique specifications of each of our customers, who design their wind turbines and wind blades to optimize performance, reliability and total delivered cost. With our culture of innovation and a collaborative “design for manufacturability” approach, we have the capability and expertise to manufacture wind blades of different designs, utilizing fiberglass, carbon fiber, or other advanced composite materials to meet unique customer specifications. We also have the flexibility to quickly transition our manufacturing facilities to produce different wind blade models and sizes using our precision molding and assembly systems, including modular tooling techniques.
We have developed a highly dependable method for making high-quality wind blades. In conjunction with our continuous improvement principles, we design our proprietary manufacturing processes to be replicable, scalable and transferable to each of our advanced manufacturing facilities worldwide. As a result, we can repeatedly move a product from its design phase to serial production while maintaining quality, even in developing regions of the world. Similarly, we have developed the manual portions of our manufacturing processes based on proven
technologies and production methods that can be learned and implemented rapidly by line personnel. We are also developing BladeAssureTM, a process that integrates advanced technologies to ensure world-class wind blade quality and operational efficiency. These technologies include AI-aided vision solutions, selective automation and robotics, advanced sensors, and inspection technologies. These advancements are designed to document, verify, automate, and prevent manufacturing inconsistencies and abnormalities. We expect BladeAssure to be implemented across all of our factories by the end of 2025.
We focus on safety, consistency, quality control, lean principles and technological innovation across our facilities, using hands-on training methods and employing repeatable manufacturing processes, to drive down costs through operational improvements and efficiencies and eliminating waste.
We use an advanced form of vacuum-assisted resin transfer tooling process to pull liquid resin into a dry lay-up, resulting in light, strong, and reliable composite structures. In our manufacturing process, fiber reinforcements and core materials are laid up in a mold while dry, followed by a vacuum bag that is placed over the layup and sealed to the mold. The wind blade component is then placed under vacuum. The resin is introduced into the wind blade component via resin inlet ports and then distributed through the reinforcement and core materials via a flow medium and a series of channels, saturating the wind blade component. The vacuum removes air and gases during processing, thereby eliminating voids. Pressure differentials drive resin uniformly throughout the wind blade component, providing a consistent laminate. By using a variety of reinforcement and core materials, the structural characteristics of the wind blade can be highly engineered to suit the custom specifications of our customers. Although only occasionally required by our customers, we are also capable of employing additional composite fabrication processes, such as pre-impregnated laminates, in addition to our vacuum infusion process.
Wind Blade Supply Agreements
Our current wind blade customers, which include Vestas, GE Vernova, Nordex, and ENERCON GmbH (ENERCON), are some of the world’s largest wind turbine manufacturers. According to data from Bloomberg, our customers represented approximately 77% of the global onshore wind energy market (excluding China), and 88% of the U.S. onshore wind turbine market over the three years ended December 31, 2023, based on MWs of energy capacity installed. In our collaborative dedicated supplier model, our customers are incentivized to maximize the volume of wind blades purchased due to lower pricing at higher purchase volumes. Our supply agreements generally contain liquidated damages provisions in the event of late delivery, however, we generally do not bear the responsibility for transporting the wind blades we manufacture to our customers.
Some of our supply agreements with our customers provide us with downside protection through minimum annual volume commitments, as well as encourage our customers to maximize the volume of wind blades they purchase from us, since purchasing less than a specified amount typically triggers higher pricing. Some of our supply agreements also provide for annual sales price reductions reflecting assumptions regarding improvements in our manufacturing efficiency and increases in productivity. We work to continue to drive down or minimize the impact of increases in the cost of materials and production through innovation and global sourcing, a portion of the benefit of which we share with our customers contractually, further strengthening our deep customer relationships. Similarly, we typically share any raw material price increases with our customers. However, one of our customers sources all of the critical raw materials that we use to produce such customers' wind blades and this customer assumes 100% of any such raw material price increases or decreases. Wind blade pricing is based on annual commitments of volume as established in the customer’s contract, with orders less than committed volume resulting in additional costs per wind blade to the customer. Orders in excess of annual commitments may result in discounts to customers from the contracted price for the committed volume. Customers may utilize early payment discounts, which are reported as a reduction of revenue at the time the discount is taken.
Vestas
In December 2024, we extended our supply agreements with Vestas at our manufacturing facilities in India and in Matamoros, Mexico through 2025. Under the extended supply agreements, we will transition two manufacturing lines at our Matamoros facility to a larger wind blade model, for a total of six lines, and we will start up two manufacturing lines at our India facility, for a total of four lines.
GE Vernova
We have two supply agreements with GE Vernova to manufacture wind blades from three manufacturing facilities in Juárez, Mexico. In December 2022, we extended our supply agreements with GE Vernova for ten of our existing lines in two of our Juarez, Mexico manufacturing facilities through December 2025, and in December 2023, we added a third manufacturing facility in Juarez, Mexico for four new manufacturing lines, also through December 2025. In October 2022, we signed an agreement with GE Vernova that enabled us to secure a ten-year lease extension of our Iowa manufacturing facility. Under the agreement, we and GE Vernova plan to develop competitive blade manufacturing options. In November 2024, we agreed with GE Vernova to reopen the Iowa plant in the second half of 2025.
Nordex
Generally, our supply agreements with Nordex provide for a minimum number of wind blade sets to be purchased by Nordex each year during the term, and we commit to dedicate a specific number of manufacturing lines to them for each of the years under the supply agreements. We supply wind blades to Nordex from our two manufacturing facilities in Türkiye for a total of eight lines and in December 2024, we extended our supply agreements with Nordex for six lines at these facilities through 2025.
We previously supplied wind blades to Nordex under a supply agreement from our manufacturing facility in India, which expired at the end of 2024. We also previously supplied wind blades from a manufacturing facility in Matamoros, Mexico pursuant to a three-year supply agreement that expired on June 30, 2024, and we shut down the Matamoros, Mexico manufacturing for Nordex at the conclusion of the agreement.
ENERCON
We supply wind blades to ENERCON from one of our manufacturing facilities in Türkiye for a total of two lines. In September 2022, we extended this supply agreement with ENERCON for a three year period through the end of December 2025.
Research and Development
We conduct research and development in close collaboration with our customers and suppliers in areas of design for manufacturing and deployment of innovative manufacturing processes, including automation, advanced materials, and emerging product quality inspection tools. We have partnered with the U.S. Department of Energy, national laboratories, universities, suppliers, and our customers to innovate through cost-sharing and funded development of advanced manufacturing, sustainability (including material recycling) and other innovative programs. During the year ended December 31, 2024, we initiated projects on a variety of funded efforts with universities, government laboratories and private industry partners that include inspection technologies, additive manufacturing of modular wind blades, as well as manufacturing automation applying recycled materials to ensure movement toward a more sustainable, carbon neutral future. We continue to collaborate in national consortia including the Institute for Advanced Composite Manufacturing Innovation as a premium member with responsibility to direct research activity by our industrial, government laboratory and university members. We maintain a position on the Industrial Advisory Board for WindSTAR, a National Science Foundation Industry/University Collaborative Research Consortium, and study a broad range of wind energy related technologies with our customers and wind energy owner operators. One such set of activities is an internal and external collaborative development program to create a comprehensive multi-layered Artificial Intelligence powered vision system that supports production metrics such as cycle-time and labor headcount and will also drive quality by reducing infusion defects and ensuring uniform resin process across the entire surface of the wind turbine blade.
We continue to expand our intellectual property portfolio through funding internal research and development. Our manufacturing technology team is leveraging our in-house knowledge and expertise in modeling, data analysis, machine learning, artificial intelligence, and optical vision systems to implement an engineering configuration that allows for an effective roll-out of a closed-loop blade manufacturing system which we expect will positively impact quality, labor productivity and cycle-time. We are expanding and diversifying our Model-Based Manufacturing tools and techniques to cover broad technical areas including design, manufacturability, finishing processes and factory level repairs.
We employ a highly experienced workforce of engineers in various facets of our business, from research and development projects, to the ongoing, real-time development and implementation of incremental manufacturing and material improvements. We have an advanced engineering center based in Berlin, Germany which focuses on blade design, tooling, materials and process technology development. In addition, we have an advanced engineering center based in Kolding, Denmark which provides technical and engineering resources to our manufacturing facilities and our customers. Our research and development effort places a priority on improving quality through process and procedure improvement, in addition to reducing cost through specification changes and sourcing of more cost-effective suppliers. Other areas of emphasis include composite design, in-house fabrication of precision molding and assembly systems, prototyping, testing, optimization and volume production capabilities. We also encourage our associates to invent and develop new technologies to maintain our competitiveness in the marketplace. In addition to our internal research and development activities, from time to time, we also conduct research and development activities pursuant to funded development arrangements with our customers and other third parties and we intend to continue to seek opportunities for product development programs that could create recurring revenue and increase our overall profitability over the long term.
Competition
The wind blade market is highly concentrated, competitive and subject to evolving customer needs and expectations. Our competitors include LM Wind Power (a subsidiary of GE Vernova) and other independent wind blade manufacturers such as Sinoma Science & Technology Co. Ltd., Shanghai Aeolon Wind Energy Technology Development (Group) Co., Ltd., Aeris Industria E Comercio De Equipamentos Para Geracao De Energia S.A. and ZhongFu Lianzhong Composites Group Co., Ltd., as well as regional wind blade suppliers in geographic areas where our current or prospective manufacturing facilities are or will be located, such as Indutch Composites Technology Pvt. Ltd. in India.
We also compete with vertically integrated wind turbine OEMs that manufacture their own wind blades.
The principal competitive factors in the wind blade market include reliability, total delivered cost, manufacturing capability, product quality, engineering capability and on-time delivery of wind blades. We believe we compete favorably with our competitors with respect to each of these factors. However, while we have successfully competed with Chinese wind blade manufacturers for years, their recent aggressive push to expand their presence in Europe and other regions outside of North America, supported by the Chinese government, has added to the challenging competitive environment outside of the U.S. Our ability to compete will depend to a great extent upon our ongoing performance in the areas of manufacturing capability, total delivered costs, on-time delivery and product quality.
Competitive advantages in the wind blade service market include total delivered cost, speed of response, local footprint, repair quality, competitive labor pricing and capacity to work across regions as demand adapts to business seasonality. Our ability to improve our product and service offerings, including strengthening our response time, adding and managing labor resources, sourcing materials globally at competitive rates while further expanding into new countries, and offering additional value-added engineering support and technical solutions.
Intellectual Property
We have a variety of intellectual property (IP) rights, including trademarks, copyrights and patents issued, filed and applied-for in a number of jurisdictions, including the U.S., Germany, the European Union, Türkiye, India and China but we believe that our continued success and competitive position depend, in large part, on our proprietary materials, tooling, process and inspection technologies and our ability to innovate and not on our IP alone. Accordingly, we take measures to protect the confidentiality and control the disclosure of our proprietary technology. We rely primarily on a combination of patents, know-how and trade secrets to establish and protect our proprietary rights and preserve our competitive position. We also seek to protect our proprietary technology, in part, by confidentiality agreements with our customers, associates, consultants and other contractors. Trade secrets, however, are difficult to protect. These agreements may be breached, and we may not have adequate remedies for any breach. In addition, our trade secrets may otherwise become known or be independently discovered by competitors. To the extent that our customers, associates, consultants or contractors use IP owned by others in their work for us, disputes may arise as to the rights in related or resulting know-how and inventions.
Backlog
As of December 31, 2024 and 2023, our backlog for wind blades and related wind products totaled $377.3 million and $767.3 million, respectively. Our backlog includes purchase orders issued in connection with our supply agreements. We generally record a purchase order into backlog when the following requirements have been met: a signed supply agreement or other contractual agreement has been executed with our customer, a purchase order has been issued by our customer and we expect to ship wind blades to or produce the related wind products for such customer in satisfaction of any purchase order within 12 months. Backlog as of any particular date should not be relied upon as indicative of our revenue for any future period.
Regulation
Wind Energy
Our operations are subject to various foreign, federal, state and local regulations related to environmental protection, health and safety, labor relationships, general business practices and other matters. These regulations are administered by various foreign, federal, state and local environmental agencies and authorities, including the Environmental Protection Agency (EPA), the Occupational Safety and Health Administration of the U.S. Department of Labor and comparable agencies in Mexico, Türkiye, India and individual U.S. states. In addition, our manufacturing operations in Mexico, Türkiye and India are subject to those countries’ wage and price controls, currency exchange control regulations, investment and tax laws, laws restricting our ability to repatriate profits, trade restrictions and laws that may restrict foreign investment in certain industries. Some of these laws have only been recently adopted or are subject to further rulemaking or interpretation, and their impact on our operations, including the cost of complying with these laws, is uncertain. We believe that our operations currently comply, in all material respects, with applicable laws and regulations. Further, as a U.S. corporation, we are subject to The Foreign Corrupt Practices Act of 1977 (FCPA), which generally prohibits U.S. companies and their intermediaries from making improper payments to foreign officials for the purpose of obtaining or keeping business. Although FCPA enforcement was recently paused by the U.S. federal government, we plan to continue to comply with the provisions of the FCPA. As a U.S. corporation with global operations, we are also subject to foreign antibribery laws and regulations in the countries where we conduct business, including the U.K. Bribery Act and the India Prevention of Corruption Act.
Recent years have witnessed an increase in government support for renewable energy sources. As nations and companies take action to achieve net-zero emissions targets, we expect the demand for clean energy will continue to grow in the long term. We believe that policies focused on re-shoring manufacturing, and electrifying heating and transportation will further contribute to these projected demand increases. In August 2022, the U.S. Congress passed the Inflation Reduction Act of 2022 (IRA) which effectively extended the Production Tax Credit for Renewable Energy (PTC), which provides owners of wind turbines with a credit against its U.S. federal income tax obligations based on the amount of electricity generated by the wind turbine, until the later of 2032 or when greenhouse gas emissions have been reduced by 75% compared to 2022. In addition, a new advanced manufacturing production tax credit (AMPC) was created that can be claimed for the domestic production and sale of clean energy components, such as wind blades. We expect to utilize the AMPC when we restart our Newton, Iowa manufacturing facility, which is expected to occur in the second half of 2025.
At the state level, as of December 31, 2024, 30 states, the District of Columbia and Puerto Rico have implemented renewable portfolio standard (RPS) programs that generally require that, by a specified date, a certain percentage of a utility’s electricity supplied to consumers within such state is to be from renewable sources (ranging from 10% to 100% and from between the present and 2050).
Outside of the U.S., there are also increasing regulatory efforts globally to promote renewable power. In December 2020, the European Union (EU) agreed to reduce EU greenhouse gas emissions by at least 55% by 2030, compared to 1990 levels. Similarly, in November 2021, India targeted to increase its renewable energy capacity to 500 gigawatts by 2030 and to reach carbon neutrality by 2070. Additionally, Türkiye enacted Law No. 5346 in 2005, which was amended and extended in January 2021, to promote renewable-based electricity generation within their domestic electricity market through feed-in tariffs and purchase obligations for distribution companies requiring purchases from certified renewable energy producers. In May 2022, the EU announced the REPowerEU plan which seeks to rapidly reduce the EU's dependence on fossil fuels by 2027. Furthermore, the EU introduced the
Green Deal Industrial Plan that is expected to further accelerate the expansion of renewable energy and green technologies including easing state aid rules to enable higher subsidies. A key component of the Green Deal Industrial Plan is the Net-Zero Industry Act to simplify regulations, speed up permits and promote cross-border projects to accelerate climate neutrality. In November 2023, EU’s Renewable Energy Directive III entered into effect, which aims to raise the share of renewable power in the EU’s overall energy consumption to 42.5% by 2030, with an additional 2.5% indicative top up that would allow the overall share to reach 45%.
The IRA and EU policy frameworks are expected to help accelerate the transition to renewable energy sources in the long-term. However, there is market uncertainty in the near-term as the current U.S. Presidential administration has issued executive orders that have impacted the onshore wind market, including halting the issuance of permits and leases for new wind projects on public lands in the U.S. pending additional review from multiple federal agencies.
Human Capital
As of December 31, 2024, we employed more than 11,700 full-time associates, approximately 300 of whom were in the U.S., 7,400 in Mexico, 2,800 in Türkiye, 1,100 in India and 100 in other countries. Certain of our associates in Türkiye and at our manufacturing facility in Matamoros, Mexico are represented by labor unions. We believe that our relations with our associates are generally good.
Our human capital strategy focuses on creating an exceptional associate experience and ensuring that we foster a learning culture where our associates want to grow with us. Our primary focus areas of our human capital strategy are as follows:
Culture
We believe our unique culture is a key strategic advantage for us. Our associates are highly engaged, have a strong sense of inclusion and belonging, and are committed to the Company, their teams, and the jobs they perform based on our most recent associate engagement surveys which continue to show strong commitment from our associates. Our associate engagement is due in part to a strong sense of purpose given our role in the broader renewable energy supply chain. We believe associate engagement and feelings of inclusion and belonging translates into a strong quality focus and orientation. When we select new persons to join our team, we ensure that the individuals have high levels of adaptability in addition to the skills needed for the role. Our associates embrace our core values of safety, operational excellence, commitment, integrity and leadership. Our team members bring our values to life by applying their diverse backgrounds and skillsets to the jobs they are performing, demonstrating high discretionary effort, and embracing our values in their day-to-day lives.
Safety
Safety is our most important and first core value. We believe that all accidents are preventable and that every associate should return at the end of their shift to their families in the same healthy condition in which they showed up for work. To help drive these beliefs it is our goal to continuously improve our zero-harm culture and implement a global behavior-based safety (BBS) program resulting in zero unsafe behaviors. All of our manufacturing facilities have safety management systems in place that cover their associates and activities. We ensure the safety of our associates to support our zero-harm culture in a variety of ways, starting with safety education. Safety education is the foundation for our other safety measures. Associates receive regular training on environmental, health and safety (EHS) related topics. This training includes but is not limited to:
•general awareness EHS training
•ergonomics training
•compliance training
•hazard-specific training as required for the job or task
•fire hazard and prevention training
•hazardous material training
•equipment-specific safety training
•safety incident and corrective action training
Inclusion, Diversity, Equity and Awareness
We aspire to create an environment that recognizes and celebrates the benefits that come with a diverse workforce. We know that diversity of our associate population makes us better and we strive to continue to improve and act with intention in these areas. Most importantly we strive to create a culture of inclusion where everyone has a true sense of belonging and feels they can be themselves in the workplace.
As a global business, we have an incredible opportunity to benefit from the diversity we have in our Company. We can and will do more to maximize the positive impact that inclusion, diversity, equity, awareness and a feeling of belonging can bring. We believe that this and the rest of our vision statement for inclusion, diversity, equity, and awareness is a solid representation of what we believe in, are committed to, and how we will hold associates and leaders accountable.
Talent
We market open jobs across multiple platforms such as our website, LinkedIn, internal postings and local job boards to ensure that our candidate pool is as diverse as possible. We promote having diversity on the interviewing and selection panel to ensure different points of view are considered as part of the final selection process. We enjoy high levels of retention across all of our geographies. On a global basis, our overall turnover rate declined in 2024. We facilitate an annual talent review process in all regions and functional teams to promote the internal development and promotion of internal talent. We have enjoyed high participation in associate surveys, high engagement levels against industry normative data, and facilitated an inclusion survey in 2024, 2023 and 2022.
Environmental, Health and Safety
We are subject to various environmental, health and safety laws, regulations and permit requirements in the jurisdictions in which we operate governing, among other things, health, safety, pollution and protection of the environment and natural resources, the handling and use of hazardous substances, the generation, storage, treatment and disposal of wastes, and the cleanup of any contaminated sites. We are not aware of any pending environmental compliance or remediation matters that are reasonably likely to have a material adverse effect on our business, financial position or results of operations. However, failure by us to comply with applicable environmental and other requirements could result in fines, penalties, enforcement actions, third party claims, remediation actions, and could negatively impact our reputation with customers. We have adopted environmental, health and safety policies outlining our commitment to environmental responsibility and accountability and our desire to eliminate unsafe behaviors in the workplace. These policies apply to the Company as a whole, and our vendors and suppliers and are available on our website. We have a company-wide focus on safety and have implemented a number of measures to promote workplace safety. Customers are increasingly focused on safety records in their sourcing decisions due to increased regulations to report all incidents that occur at their sites and the costs associated with such incidents.
Available Information
Our website address is www.tpicomposites.com. All of our filings with the Securities and Exchange Commission (SEC), including this Annual Report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, statements of changes in beneficial ownership and amendments to those reports, along with any exhibits to such reports, are available free of charge on our website as soon as reasonably practicable after they are electronically filed with, or furnished to, the SEC. The information contained on our website is neither a part of, nor incorporated by reference into, this Annual Report on Form 10-K. The SEC also maintains an Internet website that contains reports, proxy and information statements, and other information regarding issuers, like us, that file electronically with the SEC. The address of that website is www.sec.gov.
Our investor relations website address is https://ir.tpicomposites.com/websites/tpicomposites/English/0/investor-relations.html and includes key information about our corporate governance initiatives, including our Nominating and Corporate Governance Committee charter, charters of the Audit and Compensation committees and our Code of Business Conduct & Ethics.
Information about our Executive Officers
The following table sets forth certain information regarding our Executive Officers as of February 20, 2025:
Name, Age
Position
Year Appointed as Executive
Officer of TPI Composites, Inc.
Business Experience since January 1, 2018
William Siwek, 62
President, Chief Executive Officer and Director
TPI Composites, Inc.: Chief Executive Officer since May 2020, President from May 2019 to May 2020, Chief Financial Officer from August 2013 to May 2019.
American Clean Power Association: Director since March 2021.
Charles Stroo, 49
Chief Operating Officer, Wind
TPI Composites, Inc.: Chief Operating Officer since November 2023.
Collins Aerospace: Vice President of Power & Controls Operations from March 2023 to November 2023, Vice President of Avionics Operations from February 2020 to March 2023, Senior Director Operations from March 2019 to February 2020, Director Mexicali Operations from November 2015 to March 2019.
Ryan Miller, 50
Chief Financial Officer
TPI Composites, Inc.: Chief Financial Officer since May 2022.
Collins Aerospace: Vice President and Chief Financial Officer of Avionics Division from November 2018 to February 2022.
Rockwell Collins: Vice President and Controller of the Commercial Systems Division from April 2017 to November 2019.
Steven Fishbach, 55
General Counsel and Secretary
TPI Composites, Inc.: General Counsel since January 2015.

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ITEM 1A. RISK FACTORS
Item 1A. Risk Factors
You should carefully consider the following risk factors. If any of the events contemplated by the following discussion of risks should occur, our business, results of operations, financial condition, growth prospects and cash flows could suffer significantly. Additional risks that we currently do not know about or that we currently believe to be immaterial may also impair our business. Certain statements below are forward-looking statements. See “Special Note Regarding Forward-Looking Statements” in this Annual Report on Form 10-K.
Risks Related to Our Wind Business
A significant portion of our business is derived from a small number of customers, therefore any loss of or reduction in purchase orders, failure of these customers to fulfill their obligations or our failure to secure supply agreement renewals from these customers could materially harm our business.
Substantially all of our revenues are derived from three wind blade customers. Vestas, GE Vernova and Nordex accounted for 24.4%, 34.9% and 33.2%, respectively, of our total net sales for the year ended December 31, 2024, and 36.3%, 25.0% and 30.8%, respectively, of our total net sales for the year ended December 31, 2023, and 37.3%, 21.4% and 33.6%, respectively, of our total net sales for the year ended December 31, 2022. Accordingly, we are substantially dependent on continued business from our current wind blade customers. If one or more of our wind blade customers were to reduce or delay wind blade orders, file for bankruptcy or become insolvent, fail to pay amounts due or satisfactorily perform their respective contractual obligations with us or otherwise terminate or fail to renew their supply agreements with us, our business, financial condition and results of operations could be materially harmed.
We do not have contractual volume commitments from our customers beyond 2025 and our customers may elect not to place new wind blade orders with us or may elect to substantially reduce the volume of wind blades ordered from us due to market conditions and other external factors impacting the demand for wind blades.
Our supply agreements expire at the end of 2025. Although we expect to extend our supply agreements beyond 2025, we currently do not have contractual commitments from our customers to purchase wind blades beyond 2025. Our supply agreements generally establish annual purchase requirements on which we rely for our future production and financial forecasts. However, the timing and volume of purchases, within certain parameters, may be subject to change by our customers. If one or more of our customers terminate or reduce the number of manufacturing lines and volumes of wind blades purchased, or fail to enter into new purchase commitments with us, it may materially harm our business, financial condition and results of operations.
Defects in materials and workmanship or wind blade failures could harm our reputation, expose us to product warranty or other liability claims, decrease demand for wind blades we manufacture, or materially harm existing or prospective customer relationships, and our reserves for warranty expenses might not be sufficient to cover all future costs.
Defects in the wind blades we manufacture are unpredictable and an inherent risk in manufacturing technically advanced products that involve a significant amount of manual labor and processes. Defects may arise from multiple causes, including design, engineering, materials, manufacturing and component failures as well as deficiencies in our manufacturing processes. Under our supply agreements, we warranty the materials and workmanship of the wind blades while our customers are responsible for the fitness of use and design of the wind blades. We have experienced multiple wind blade failures and defects at some of our facilities, and we may experience failures or defects in the future. Wind blades that we have manufactured have also failed in the field. Any wind blade failures or other product defects in the future could materially harm our existing and prospective customer relationships. Specifically, negative publicity about the quality of the wind blades we manufacture or defects in the wind blades supplied to our customers could result in a reduction in wind blade orders, increased warranty claims and reserves, product liability claims and other damages or termination of our supply agreements or business relationships with current or new customers. Any of the foregoing could materially harm our business, operating results and financial condition.
We provide warranties for all of the wind blades and precision molding and assembly systems we produce, including parts and labor, for periods that typically range from two to five years depending on the product sold. We
also have offered extended warranties in certain situations to resolve outstanding warranty claims and may offer extended warranties to our customers in the future. Our estimate of warranty expense requires us to make assumptions about matters that are highly uncertain, including future rates of product failure, repair costs, shipping and handling and de-installation and re-installation costs at customers’ sites. Our assumptions could be materially different from the actual performance of our products and these remediation expenses in the future. The expenses associated with wind blade repair and remediation activities can be substantial and may include changes to our manufacturing processes. If our estimates prove materially incorrect, we could incur warranty expenses that exceed our reserves, increase our future warranty reserves, and we could be required to make material unplanned cash expenditures, which could materially harm our business, operating results and financial condition.
We have experienced, and could in the future experience, quality or operational issues in connection with plant construction, expansion or assumption which could result in losses and cause delays in our ability to complete our projects and may therefore materially harm our business, financial condition and results of operations.
We dedicate most of the capacity of our current wind blade manufacturing facilities to existing customers and, as a result, we may need to build additional manufacturing capacity or facilities to serve the needs of new customers or expanded needs of existing customers. We currently conduct wind blade manufacturing operations at four facilities in Mexico, two in Türkiye, one in India, and expect to restart our wind blade manufacturing operations at our Iowa facility in the U.S. in the second half of 2025. The construction of new plants and the expansion or assumption of existing plants involves significant time, cost and other risks. We generally expect our plants to generate losses in their first 12 to 18 months of operations related to production startup costs. Additionally, numerous factors can contribute, and have in the past contributed, to delays or difficulties in the startup of, or the adoption of our manufacturing lines to produce larger wind blade models, which we refer to as model transitions, in our manufacturing facilities. These factors include permitting, construction or renovation delays, defects or issues with product tooling, the engineering and fabrication of specialized equipment, the modification of our general production know-how and customer-specific manufacturing processes to address the specific wind blades to be tested and built, changing and evolving customer specifications and expectations and the hiring and training of plant personnel. Any delays or difficulties in plant startup, expansion or assumption may result in cost overruns, production delays, contractual penalties, loss of revenues, reduced margins and impairment of customer relationships, which could materially harm our business, financial condition and results of operations. For example, we experienced significant production delays at the Matamoros, Mexico manufacturing facility that we took over from Nordex in July 2021 due to the poor condition of the facility and related equipment, which adversely impacted our profitability and financial condition over the three-year supply agreement term, which ended on June 30, 2024.
We have experienced in the past, and our future wind blade production could be affected by, operating problems at our facilities, which may materially harm our operating results and financial condition.
Our wind blade manufacturing processes and production capacity have in the past been, and could in the future be, disrupted by a variety of issues, including:
•production outages to conduct maintenance activities that cannot be performed safely during operations;
•prolonged power failures or reductions;
•breakdowns, failures or substandard performance of machinery and equipment;
•our inability to comply with material environmental requirements or permits;
•inadequate transportation infrastructure, including problems with railroad tracks, bridges, tunnels or roads;
•supply shortages of key raw materials and components;
•damage or production delays caused by earthquakes, fires, floods, tornadoes, hurricanes, extreme weather conditions such as windstorms, hailstorms, drought, temperature extremes, typhoons or other natural disasters or terrorism or health epidemics; and
•labor unrest or shortages in skilled labor.
The cost of repeated or prolonged interruptions, reductions in production capacity, or the repair or replacement of complex and sophisticated tooling and equipment may be considerable and could result in damages or the termination of our supply agreements or penalties for regulatory non-compliance, any of which could materially harm our business, operating results and financial condition.
Although a majority of our manufacturing facilities are located outside the U.S., our business is still heavily dependent upon the demand for wind energy in the U.S. and any downturn in demand for wind energy in the U.S. could materially harm our business.
We have developed a global footprint to serve the growing wind energy market worldwide and have wind blade manufacturing facilities in the U.S., Mexico, Türkiye and India. Although a majority of our manufacturing facilities are located outside of the U.S., historically more than half of the wind blades that we produced were deployed in wind farms located within the U.S. Our Iowa facility, where production has been shut down since the end of the fourth quarter of 2021 and is expected to restart in the second half of 2025, and substantially all of the wind blades manufactured at our Mexico are deployed within the U.S. In addition, many of our wind blades are exported from our Türkiye and India manufacturing facilities to the U.S. Consequently, demand for wind energy and our wind blade sales could be adversely affected by a variety of reasons and factors, including the recently announced tariffs on goods and products imported from Mexico that will go into effect in March 2025 and other regulatory or legal changes or developments relating to wind and renewable energy in the U.S. Any downturn in demand for wind energy in the U.S. could materially harm our business.
We have experienced volatility in the price and availability of raw materials and components that are critical to our manufacturing needs, as well as ongoing inflationary pressures impacting many of our labor and other costs, and we may continue to, or in the future, experience price increases, supply constraints, and inflationary pressures, which may hinder our ability to perform under our supply agreements and adversely impact our competitive position, profitability and financial condition.
We rely upon third parties for raw materials, such as fiberglass, carbon fiber, resins, foam core and balsa wood, and various components for the products we manufacture. Some of these raw materials and components may only be purchased from a limited number of suppliers. Current geopolitical climate, and the economic environment generally, including with respect to inflation and trade policies, continue to evolve and affect supply chain performance and underlying assumptions in various ways - specifically with volatility in commodity, energy, and logistics costs. However, the overall pricing for the raw materials that we source decreased in 2024 compared to 2023 due to decreases in pricing and logistics costs. We expect to see a further decrease in material pricing in 2025. If the prices for these raw materials and logistics costs revert back to the levels we experienced in 2021 and 2022, such elevated price levels could have a material impact on our results of operations.
Additionally, our ability to purchase the appropriate quantities of raw materials is impacted by our customers’ transitioning wind blade designs and specifications. As a result, we maintain, closely monitor and manage inventory and acquire raw materials and components as needed and with consideration to lead time factors. Due to fluctuating international demand for these raw materials from many industries, and extended logistics lead times, we may be unable to acquire sufficient quantities or secure a stable supply for our manufacturing needs. One of our customers sources all of the critical raw materials that we use to produce such customers' wind blades. Since we do not source procurement of these raw materials for this customer, we have fewer controls and remedies to mitigate raw material and supply chain risks and disruptions relating to such raw materials for such customer.
In 2024, we procured approximately 20% of our raw materials from China, so any ocean logistic delays, weather events, strikes, other force majeure events or geopolitical developments impacting China could disrupt our supply chain. In addition, a disruption in any aspect of our global supply chain caused by transportation delays, customs delays, cost issues or other factors could result in a shortage of raw materials or components critical to our manufacturing needs. Any supply shortages, delays in the shipment of materials or components from third party suppliers, or changes in the terms on which they are available could disrupt or materially harm our business, operating results and financial condition.
Ongoing inflationary pressures have caused and may continue to cause many of our material, labor, and other costs to increase, which can have adverse impacts on our results of operations. The government of Mexico increased minimum wages approximately 20%, 20% and 12%, effective January 1, 2023, 2024 and 2025, respectively. The government of Türkiye increased minimum wages approximately 55%, 34%, 49% and 30%, effective January 1,
2023, July 1, 2023, January 1, 2024 and January 1, 2025, respectively. While our customer contracts allow us to pass a portion of these increases to our customers, we were not be able to recover 100% of the wage inflation. As a result of the inflationary pressures in Türkiye and increased competition from Chinese wind blade manufacturers, our competitive position in Türkiye has been adversely impacted and demand for our wind blades in Europe has declined. In December 2024, we committed to a restructuring plan in Türkiye in order to rationalize our workforce in response to this lower forecasted demand. As a result, we recorded approximately $9.6 million in restructuring charges for severance and other one-time termination benefits during the fourth quarter of 2024. If our manufacturing facilities in these countries continue to experience wage inflation at these levels and the increased costs in local currency are not offset with favorable foreign currency fluctuations, such elevated wages could further deteriorate our competitive position, and have a material impact on our results of operations and financial condition.
Demand for the wind blades we manufacture may fluctuate for a variety of reasons, including the growth of the wind industry, and decreases in demand could materially harm our business and may not be sufficient to support our growth strategy.
Our revenues, business prospects and growth strategy heavily depend on the continued growth of the wind industry and our customers’ continuing demand for wind blades. Customer demand could decrease from anticipated levels due to numerous factors outside of our control that may affect the development of the wind energy market generally, portions of the market or individual wind project developments, including:
•general economic conditions;
•the general availability and demand for electricity;
•wind energy market volatility;
•cost-effectiveness, availability and reliability of alternative sources of energy and competing methods of producing electricity, including solar and non-renewable sources such as natural gas;
•foreign, federal and state governmental tariffs, subsidies and tax or regulatory policies;
•delays or cancellations of government tenders or auctions for wind energy projects;
•the availability of financing for wind development projects;
•the development of electrical transmission infrastructure, the ability to implement a proper grid connection for wind development projects, and the ability to obtain timely permitting approvals;
•permitting, siting and grid connection regulations and challenges;
•foreign, federal and state laws and regulations regarding avian protection plans, noise or turbine setback requirements and other environmental laws and regulations;
•our customers’ cost of transporting wind blades from our manufacturing facilities to wind farms;
•increases in the price or lack of availability of raw materials used to produce our wind blades;
•administrative and legal challenges to proposed wind development projects; and
•public perception and localized community responses to wind energy projects.
In 2024, we experienced a decline in demand for our wind blades due primarily to regulatory uncertainty as our customers and wind farm developers continued to defer investments into the future until inflationary pressure and global economies stabilize, and there is clearer regulatory guidance with respect to the IRA and actions proposed by the EU under the REPowerEU plan. This decline in demand adversely impacted our operating results for 2024. In addition to factors affecting the wind energy market generally, our customers’ demand may also fluctuate based on other factors beyond our control. Any decline in customer demand below anticipated levels could materially harm our revenues and operating results and could delay or impede our growth strategy.
We operate a substantial portion of our business in international markets and we may be unable to effectively manage a variety of currency, legal, regulatory, economic, social and political risks associated with our global operations and those in developing markets.
We currently operate manufacturing facilities in the U.S., Mexico, Türkiye, and India. For the years ended December 31, 2024, 2023 and 2022, approximately 98%, 98% and 97%, respectively, of our net sales were derived from our international operations. Our overall success depends, in part, upon our ability to succeed in differing legal, regulatory, economic, social and political conditions. The global nature of our operations is subject to a variety of risks, including:
•difficulties in staffing and managing multiple international locations;
•the risk of significant wage inflation in Türkiye, Mexico and other countries in which we operate, and continuing general inflationary pressures in these markets;
•increased exposure to foreign currency exchange rate risk or currency exchange controls imposed by foreign countries;
•the risk of import, export and transportation regulations and tariffs on foreign trade and investment, including boycotts and embargoes;
•taxation and revenue policies or other restrictions, including royalty and tax increases, retroactive tax claims and the imposition of unexpected taxes;
•the imposition of, or rapid or unexpected adverse changes in, foreign laws, regulatory requirements or trade policies;
•restrictions on repatriation of earnings or capital or transfers of funds into or out of foreign countries;
•limited protection for IP rights in some jurisdictions;
•inability to obtain adequate insurance;
•difficulty administering internal controls and legal and compliance practices in countries with different cultural norms and business practices;
•the possibility of being subjected to the jurisdiction of foreign courts in connection with legal disputes and the possible inability to subject foreign persons to the jurisdiction of courts in the U.S.;
•the misinterpretation of local contractual terms, renegotiation or modification of existing supply agreements and enforcement of contractual terms in disputes before local courts;
•the inability to maintain or enforce legal rights and remedies at a reasonable cost or at all; and
•the potential for political unrest, expropriation, nationalization, revolution, war or acts of terrorism in countries in which we operate.
As we continue to operate our business globally, our success will depend, in part, on our ability to anticipate and effectively manage these and other related risks. We may be unsuccessful in developing and implementing policies and strategies that will be effective in managing these risks in each country where we do business or conduct operations. Our failure to manage these risks successfully could materially harm our business, operating results and financial condition.
A drop in the price of energy sources other than wind energy, or our inability to deliver wind blades that compete with the price of other energy sources, may materially harm our business, financial condition and results of operations.
We believe that the decision to purchase wind energy is, to a significant degree, driven by the relative cost of electricity generated by wind turbines compared to the applicable price of electricity from traditional (i.e., thermal) and other renewable energy sources. Decreases in the prices of electricity from traditional or renewable energy sources other than wind energy, such as solar, could harm the market for wind energy. In particular, a drop in natural gas prices could lessen the appeal of wind-generated electricity. Technological advancements or the construction of a significant number of power generation plants, including nuclear, coal, natural gas or power plants utilizing other renewable energy technologies, government support for other forms of renewable energy or construction of additional electric transmission and distribution lines could reduce the price of electricity produced by competing methods, thereby making the purchase of wind energy less attractive. The ability of energy conservation
technologies, public initiatives and government incentives to reduce electricity consumption or support other forms of renewable energy could also lead to a reduction in the price of electricity, which would undermine the attractiveness of wind energy and thus wind turbines, and, ultimately wind blades. If prices for electricity generated by wind turbines are not competitive, our business, financial condition and results of operations may be materially harmed.
We encounter intense competition for limited customers from other wind blade manufacturers, as well as in-house production by wind turbine OEMs, which may make it difficult to enter into supply agreements, keep existing customers and potentially get new customers.
We face significant competition from other wind blade manufacturers, and this competition may intensify in the future. The wind turbine market is characterized by a relatively small number of large OEMs. The competitive environment in the wind energy industry recently has become more challenging primarily due to ongoing regulatory uncertainty and wage inflation. This challenging environment may lead to further consolidation in the industry, which could lead to us having even fewer customers. In addition, a significant percentage of wind turbine OEMs, including all of our current customers, produce some of their own wind blades in-house. As a result, we compete for business from a limited number of customers that outsource the production of wind blades. We also compete with a number of wind blade manufacturers in China, who are growing in terms of their technical capability and are in the process of expanding outside of China. Some of our competitors have more experience in the wind energy industry, as well as greater financial, technical or human resources than we do, which may limit our ability to compete effectively with them and maintain or improve our market share. Additionally, our supply agreements dedicate capacity at our facilities to our customers, which may also limit our ability to compete if our facilities cannot accommodate additional capacity. If we are unable to compete effectively for the limited number of customers that outsource production of wind blades, our ability to enter into supply agreements with potential new and existing customers may be materially harmed.
Various legislation, infrastructure, regulations including permitting and siting and incentives that are expected to support the growth of wind energy in the U.S. and around the world may not be extended or may be discontinued, phased out or changed, or may not be successfully implemented, which could materially harm wind energy programs and materially decrease demand for the wind blades we manufacture.
The U.S. wind energy industry has been dependent in part upon governmental support through certain incentives including federal tax incentives and state RPS programs and may not be economically viable if a large number of these incentives are not continued. Government-sponsored tax incentive programs including the PTC, and the Investment Tax Credit (ITC) have supported the U.S. growth of wind energy. In August 2022, the PTC was extended until the later of 2032 or when greenhouse gas emissions have been reduced by 75% compared to 2022. In addition, a new advanced manufacturing production tax credit (AMPC) was created that can be claimed for the domestic production and sale of clean energy components, such as wind blades. Although the IRA is expected to help accelerate the transition to renewable energy sources in the long-term, there is market uncertainty in the near-term as the current U.S. Presidential administration has issued executive orders that have impacted the onshore wind market, including halting the issuance of permits and leases for new wind projects on public lands in the U.S. pending additional review from multiple federal agencies.
There are also numerous policies and regulations in the EU and other international markets that are designed to promote wind and renewable energy. While long-term onshore market growth in Europe remains in sight, the economic viability of pursuing that demand with European-based manufacturing is becoming increasingly challenging. While we have successfully competed with Chinese wind blade manufacturers for years, their recent aggressive push to expand their presence in Europe and other regions outside of North America, supported by the Chinese government, has added to the challenging competitive environment outside of the U.S. Unlike the U.S., which has implemented tariffs to protect against unfair competition and tax laws to encourage near shoring and domestic manufacturing, we believe it is unlikely that European governments will take similar steps to meaningfully help suppliers like TPI that supply passive components to our OEM customers. The implementation of the Foreign Subsidies Regulation (FSR) by the EU and its recent aggressive actions to combat unfairly subsidized Chinese products are encouraging, but their focus to date has been on active parts of wind turbines versus the passive parts, such as the blades that we manufacture for our customers.
There can be no assurance that governmental programs or subsidies for renewable energy such as the IRA will remain in effect in their present form or at all, or that the required transmission infrastructure expansion occurs, and the elimination, reduction, or modification of these programs or subsidies could materially harm wind energy programs in the U.S. and international markets and materially decrease demand for the wind blades we manufacture and, in turn, materially harm our business, operating results and financial condition.
Risks Related to Our Business as a Whole
Our financial position, revenue, operating results, profitability and cash flows are difficult to predict and may vary from quarter to quarter, which could cause our share price to decline significantly.
Our quarterly revenue, operating results, profitability and cash flows have varied in the past and are likely to vary significantly from quarter to quarter in the future. The factors that are likely to cause these variations include:
•warranty expense;
•associate wage levels and wage inflation in Türkiye, Mexico and other countries in which we operate, and continuing general inflationary pressures in these markets;
•operating and startup costs of new manufacturing facilities;
•wind blade model transitions;
•differing quantities of wind blade production;
•unanticipated contract or project delays or terminations;
•changes in the costs of raw materials or disruptions in raw material supply;
•scrap of defective products;
•payment of liquidated damages to our customers for late deliveries of our products;
•availability of qualified personnel;
•costs incurred in the expansion, reopening or closure of our existing manufacturing facilities;
•volume reduction requests from our customers pursuant to our customer agreements;
•damage or production delays caused by earthquakes, fires, floods, tornadoes, hurricanes, extreme weather conditions such as windstorms, hailstorms, drought, temperature extremes, typhoons or other natural disasters or terrorism or health epidemics such as the COVID-19 pandemic;
•changes in our effective tax rate;
•general economic conditions; and
•the complexity of the financial assumptions we must use for forecasting our revenue, profitability and operating results under the revenue recognition standard and the impact that unanticipated blade transitions have on those estimates.
As a result, our revenue, operating results, profitability and cash flows for a particular period are difficult to predict and may decline in comparison to corresponding prior periods regardless of the strength of our business. It is also possible that in some future periods our revenue, operating results and profitability may not meet the expectations of securities analysts or investors. If this occurs, the trading price of our common stock could fall substantially, either suddenly or over time, and our business, operating results and financial condition would be materially harmed.
Our Credit Agreement with Oaktree contains, and any future loan agreements we may enter into may contain, operating and financial covenants that restrict our business and financing activities.
As of December 31, 2024, we had outstanding $441.1 million of senior, secured indebtedness under the Credit Agreement and Guaranty, dated as of December 14, 2023, between the Company and Oaktree Fund Administration, LLC (the Credit Agreement) and total outstanding principal indebtedness of $705.2 million. Our obligations under the Credit Agreement are secured by substantially all of our assets. In addition, from time to time, we enter into various loan, working capital and accounts receivable financing facilities to finance the construction and ongoing operations of our advanced manufacturing facilities and other capital expenditures. The Credit Agreement contains various financial covenants and other restrictions regarding, among other things, maintaining minimum cash balances, making capital expenditures and other restricted payments, incurring additional indebtedness, creating liens, and paying dividends. The operating and financial restrictions and covenants contained in the Credit Agreement, as well as our other existing and any future financing agreements that we may enter into, may restrict our ability to finance our operations, engage in business activities, expand or fully pursue our business strategies or respond to changing business and economic conditions. Our ability to comply with these covenants may be affected by events beyond our control. A breach of any of these covenants could result in a default under the Credit Agreement or one or more of our other loan facilities, which could cause all of the outstanding indebtedness under such agreements to become immediately due and payable by us and/or enable the applicable lender to terminate all commitments to extend further credit. If we are forced to refinance these borrowings on less favorable terms or if we cannot refinance these borrowings, our results of operations and financial condition could be adversely affected. In addition, if we were unable to repay the outstanding indebtedness upon a default, our lenders could proceed against the assets pledged as collateral to secure that indebtedness. Any acceleration of the amounts due under the Credit Agreement, or the exercise by the applicable lenders or agent of their rights under the related security documents, would likely have a material adverse effect on our business.
Our indebtedness may adversely affect our business, results of operations and financial condition.
Our indebtedness could adversely affect our business, results of operations and financial condition by, among other things:
•requiring us to dedicate a substantial portion of our cash flow from operations to pay principal and interest on our debt, which would reduce the availability of our cash flow to fund working capital, capital expenditures, acquisitions, execution of our growth strategy and other general corporate purposes;
•limiting our ability to borrow additional amounts to fund debt service requirements, working capital, capital expenditures, acquisitions, execution of our growth strategy and other general corporate purposes;
•making us more vulnerable to adverse changes in general economic, industry and regulatory conditions and in our business by limiting our flexibility in planning for, and making it more difficult to react quickly to, changing conditions;
•placing us at a competitive disadvantage compared with those of our competitors that have less debt and lower debt service requirements; and
•making it more difficult for us to satisfy our financial obligations.
In addition, we may not be able to generate sufficient cash flow from our operations to repay our outstanding indebtedness when it becomes due and to meet our other cash needs or to comply with the financial covenants set forth therein. If we are not able to pay our debts as they become due, we could be in default of the Credit Agreement or other indebtedness. We might also be required to pursue one or more alternative strategies to repay indebtedness, such as selling assets, refinancing or restructuring our indebtedness or obtaining additional debt financing or selling equity securities on terms that may be onerous or highly dilutive. We may not be able to refinance our debt or sell additional debt or equity securities or our assets on favorable terms, if at all, and if we must sell assets, it may negatively affect our ability to generate revenues.
The fluctuation of foreign currency exchange rates could materially harm our financial results.
Since we conduct a significant portion of our operations internationally, our business is subject to foreign currency risks, including currency exchange rate fluctuations. The exchange rates are affected by, among other
things, changes in political and economic conditions. For example, an increase in our Türkiye sales and operations will result in a larger portion of our net sales and expenditures being denominated in the Euro and Turkish Lira. Significant fluctuations in the exchange rate between the Turkish Lira and the U.S. dollar, the Turkish Lira and the Euro or the Euro and the U.S. dollar may adversely affect our revenue, expenses, as well as the value of our assets and liabilities. To the extent our future revenues and expenses are generated outside of the U.S. in currencies other than the U.S. dollar, including the Euro, the Turkish Lira, Mexican Peso or India Rupee, among others, we will be subject to increased risks relating to foreign currency exchange rate fluctuations which could materially harm our business, financial condition and operating results.
Our manufacturing operations and future growth are dependent upon the availability of capital, which may be insufficient to support our capital expenditures.
Our current wind blade manufacturing activities and future growth will require substantial capital investment. For the years ended December 31, 2024 and 2023, our capital expenditures, including those related to discontinued operations, were $26.2 million and $36.1 million, respectively. We plan to make continued investments in our U.S., Türkiye, Mexico, and India facilities. Our ability to grow our business is predicated on us making significant additional capital investments to expand our existing manufacturing facilities and build and operate new manufacturing facilities in existing and new markets or access capital to acquire new businesses. We may not have the capital to undertake these capital investments. In addition, our capital expenditures may be significantly higher if our estimates of future capital investments are incorrect and may increase substantially if we are required to undertake actions to comply with new regulatory requirements or compete with new technologies. The cost of some projects may also be affected by foreign exchange rates if any raw materials or other goods must be paid for in foreign currency. We cannot assure you that we will be able to raise funds on favorable terms, if at all, or that future financings would not be dilutive to holders of our capital stock. We also cannot assure you that completed capital expenditures will yield the anticipated results. The Credit Agreement contains covenants that limit the amount of capital expenditures that we can make, and if we raise additional funds by obtaining loans from third parties, the terms of those financing arrangements may include negative covenants, or other restrictions on our business that could impair our operational flexibility and would require us to fund additional interest expense. If we are unable to obtain sufficient capital at a reasonable cost or at all, we may not be able to expand our business to take advantage of changes in the marketplace or may be required to delay, reduce or eliminate some or all of our current operations, which could materially harm our business, operating results and financial condition.
Our business and reputation could be adversely impacted by any violations of the FCPA, the U.K. Bribery Act, and other foreign anti-corruption laws.
As a U.S. corporation, we are subject to the FCPA, which generally prohibits U.S. companies and their intermediaries from making improper payments to foreign officials for the purpose of obtaining or keeping business. Other countries in which we operate also have anti-corruption laws, some of which prohibit improper payments to government and non-government persons and entities, and others extend their application to activities outside their country of origin. Although FCPA enforcement was recently paused, we plan to continue to comply with the provisions of the FCPA. We have manufacturing facilities in Mexico, Türkiye and India, countries with a fairly high risk of corruption. Those facilities are subject to routine government oversight. In addition, a number of our raw materials and components suppliers are state-owned, particularly in China. Moreover, due to our need to import raw materials across international borders, we also routinely have interactions, directly or indirectly, with customs officials. In many foreign countries, under local custom, businesses engage in practices that may be prohibited by the FCPA or other similar laws and regulations. Additionally, we continue to hire associates around the world to support our international operations. Although we have implemented certain policies, procedures and controls designed to ensure compliance with the FCPA and similar laws, there can be no guarantee that all of our associates and agents, as well as those companies to which we outsource certain of our business operations, have not taken and will not take actions that violate our policies and the FCPA or other anti-corruption laws, which could subject us to fines, penalties, disgorgement, and loss of business, harm our reputation and impact our ability to compete in certain jurisdictions. In addition, these laws are complex and far-reaching in nature, and, as a result, we may be required in the future to alter one or more of our practices to be in compliance with these laws or any changes in these laws or the interpretation thereof. Moreover, our competitors may not be subject to the FCPA or similar laws, which could provide them with a competitive advantage in some jurisdictions.
Effective internal controls are necessary for us to provide reliable financial reports and effectively address fraud risks.
We maintain a system of internal controls to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U.S. generally accepted accounting principles (GAAP). The process of designing and implementing effective internal controls is a continuous effort that requires us to anticipate and react to changes in our business and the economic and regulatory environments and to expend significant resources to establish and maintain a system of internal controls that will be adequate to satisfy the reporting obligations of a public company. The effectiveness of our internal controls depends in part on the cooperation of senior managers worldwide.
Any system of controls, however well designed and operated, can provide only reasonable, and not absolute, assurance that the objectives of the system are met. Any failure to maintain that system, or consequent inability to produce accurate financial statements on a timely basis, could increase our operating costs and harm our business, and lead to our becoming subject to litigation, sanctions or investigations by The NASDAQ Global Market (NASDAQ), the SEC or other regulatory governmental agencies and bodies. Furthermore, investors’ perceptions that our internal controls are inadequate or that we are unable to produce accurate financial statements on a timely basis may harm our stock price.
Much of our intellectual property consists of trade secrets and know-how that is very difficult to protect. If we experience loss of protection for our trade secrets or know-how, our business would be substantially harmed.
We have a variety of IP rights, including patents, trademarks and copyrights, but much of our most important IP rights consist of trade secrets and know-how and effective IP protection may be unavailable, limited or outside the scope of the IP rights we pursue in the U.S. and in foreign countries where we operate. Although we strive to protect our IP rights, there is always a risk that our trade secrets or know-how will be compromised or that a competitor could lawfully reverse-engineer our technology or independently develop similar or more efficient technology. We have confidentiality agreements with each of our customers, suppliers, key associates and independent contractors in place to protect our IP rights, but it is possible that a customer, supplier, associate or contractor might breach the agreement, intentionally or unintentionally. It is also possible that our confidentiality agreements with customers, suppliers, associates and contractors will not be effective in preserving the confidential nature of our IP rights. The patents we own could be challenged, invalidated, narrowed or circumvented by others and may not be of sufficient scope or strength to provide us with any meaningful protection or commercial advantage. Once our patents expire, or if they are invalidated, narrowed or circumvented, our competitors may be able to utilize the inventions protected by our patents. Additionally, the existence of our IP rights does not guarantee that we will be successful in any attempt to enforce these rights against third parties in the event of infringement, misappropriation or other misuse, which may materially and adversely affect our business. Because our ability to effectively compete in our industry depends on our ability to protect our proprietary technology, we might lose business to competitors and our business, revenue, operating results and prospects could be materially harmed if we suffer loss of trade secret and know-how protection or breach of our confidentiality agreements.
We may be subject to significant liabilities and costs relating to environmental and health and safety requirements.
We are subject to various environmental, health and safety laws, regulations and permit requirements in the jurisdictions in which we operate governing, among other things, health, safety, pollution and protection of the environment and natural resources, the handling and use of hazardous substances, the generation, storage, treatment and disposal of wastes, and the cleanup of any contaminated sites.
We have incurred, and expect to continue to incur, capital and operating expenditures to comply with such laws, regulations and permit requirements. While we believe that we currently are in material compliance with all such laws, regulations and permit requirements, any noncompliance may subject us to a range of enforcement measures, including the imposition of monetary fines and penalties, other civil or criminal sanctions, remedial obligations, and the issuance of compliance requirements restricting our operations.
There can be no assurance that we will not in the future become subject to compliance requirements, obligations to undertake cleanup or related activities, or claims or proceedings relating to environmental, health or safety matters, hazardous substances or wastes, contaminated sites, or other environmental or natural resource damages, that could impose significant liabilities and costs on us and materially harm our business, operating results and financial condition.
Work disruptions resulting from our collective bargaining agreements could result in increased operating costs and materially harm our business, operating results and financial condition.
Certain of our associates in Türkiye and Matamoros, Mexico, which in the aggregate represented approximately 29% of our workforce as of December 31, 2024, are covered by collective bargaining agreements.
Our Türkiye manufacturing facilities have experienced significant wage inflation over the course of the past few years. For example, the government of Türkiye increased minimum wages approximately 55% effective January 1, 2023. In May 2023, we agreed to an amendment to our collective bargaining agreement with our associates in Türkiye which resulted in significantly increased wages for these associates. The government of Türkiye further increased minimum wages approximately 34%, 49% and 30% effective July 1, 2023, January 1, 2024 and January 1, 2025, respectively. Our collective bargaining agreement for our Türkiye facilities was in effect through December 2024 and we are in the process of negotiating an amendment to this agreement for calendar year 2025. Our collective bargaining agreement at our Matamoros, Mexico manufacturing facility is in effect through the end of March 2025.
Additionally, our other associates working at other manufacturing facilities may vote to be represented by a labor union in the future. There can be no assurance that we will not experience labor disruptions such as work stoppages or other slowdowns by workers at any of our facilities. Should significant industrial action, threats of strikes or related disturbances occur, or other challenges with negotiating and extending our collective bargaining agreements with our unionized associates, we could experience further disruptions of operations and increased labor costs in Türkiye, Mexico or other locations, which could materially harm our business, operating results or financial condition. Any such work stoppage or slow-down at any of our facilities could also result in additional expenses and possible loss of revenue for us.
Our information technology infrastructure could experience serious failures or cyber security attacks, the failure of which could materially harm our business, operating results and financial condition.
Information technology is part of our business strategy and operations. It enables us to streamline operation processes, facilitate the collection and reporting of business data, and provide for internal and external communications. There are risks that information technology system failures, network disruptions, breaches of data security and phishing and ransomware attacks could disrupt our operations. Any significant disruption or breach may materially harm our business, operating results and financial condition.
Risks Related to Ownership of Our Common Stock
The price of our common stock may fluctuate substantially and your investment may decline in value.
The market price of our common stock is likely to be highly volatile and may fluctuate substantially due to many factors, including:
•actual or anticipated fluctuations in our results of operations;
•loss of or changes in our relationship with one or more of our customers;
•failure to meet our earnings estimates;
•conditions and trends in the energy and manufacturing markets in which we operate and changes in estimates of the size and growth rate of these markets;
•announcements by us or our competitors of significant contracts, developments, acquisitions, strategic partnerships or divestitures;
•availability of equipment, labor and other items required for the manufacture of wind blades;
•changes in governmental policies;
•additions or departures of members of our senior management or other key personnel;
•changes in market valuation or earnings of our competitors;
•sales of our common stock, including sales of our common stock by our directors and officers or by our other principal stockholders;
•the trading volume of our common stock; and
•general market, industry and economic conditions.
These broad market and industry factors may materially harm the market price of our common stock, regardless of our operating performance. In the past, securities class-action litigation has often been instituted against a company following periods of volatility in the market price of that company’s securities. Securities class-action litigation, if instituted against us, could result in substantial costs or damages and a diversion of management’s attention and resources, which could materially harm our business and operating results.
A significant portion of our total outstanding shares may be sold into the public market in future sales, which could cause the market price of our common stock to drop significantly, even if our business is doing well.
Sales of a substantial number of shares of our common stock in the public market can occur at any time. These sales, or the market perception that the holders of a large number of shares intend to sell shares, could reduce the market price of our common stock. As of December 31, 2024, we had 47,609,136 shares of common stock outstanding. In addition, Oaktree owns approximately 9.7% of our outstanding common stock. All of the shares held by Oaktree can be sold, subject to any applicable volume limitations under federal securities laws. In addition, we may issue debt or equity securities in other registered or unregistered convertible debt or equity offerings.
In the future, we may also issue our securities in connection with investments or acquisitions. The amount of shares of our common stock issued in connection with an investment or acquisition could constitute a material portion of our then-outstanding shares of our common stock. Any issuance of additional securities in connection with investments or acquisitions may result in additional dilution to you and may cause the market price of our common stock to drop significantly.
The exercise of options and warrants and other issuances of shares of common stock or securities convertible into common stock under our equity compensation plans will dilute your interest.
Under our existing equity compensation plans, as of December 31, 2024, we had outstanding options to purchase 1,179,966 shares of our common stock, 1,491,925 restricted stock units and 537,806 performance stock units to our associates and non-employee directors. From time to time, we expect to grant additional options and other stock awards. The exercise of options at prices below the market price of our common stock could adversely affect the price of shares of our common stock. Additionally, any issuance of our common stock that is not made solely to then-existing stockholders proportionate to their interests, such as in the case of a stock dividend or stock split, will result in dilution to each stockholder by reducing their percentage ownership of the total outstanding shares. If we issue options or warrants to purchase our common stock in the future and those options or warrants are exercised or we issue stock, stockholders may experience further dilution.
We have indebtedness in the form of convertible senior notes, which could adversely affect our financial health and our ability to respond to changes in our business.
In March 2023, we issued and sold an aggregate of $132.5 million principal amount of convertible senior unsecured notes due in 2028 (the Notes) in a private placement offering. Our ability to repay our indebtedness, including the Notes, is significantly dependent on our generation of cash flow. Our indebtedness could have significant negative consequences for our security holders and our business, results of operations and financial condition by, among other things:
•increasing our vulnerability to adverse economic and industry conditions;
•limiting our ability to obtain additional financing;
•requiring the dedication of a substantial portion of our cash flow from operations to service our indebtedness, which will reduce the amount of cash available for other purposes;
•limiting our flexibility to plan for, or react to, changes in our business;
•diluting the interests of our existing stockholders as a result of issuing shares of our common stock upon conversion of the notes; and
•placing us at a possible competitive disadvantage with competitors that are less leveraged than us or have better access to capital.
Our business may not generate sufficient funds, and we may otherwise be unable to maintain sufficient cash reserves, to pay amounts due under our indebtedness, including the notes, and our cash needs may increase in the future.
Conversions or exchanges of our convertible senior notes may dilute the ownership interest of our stockholders or may otherwise affect the market price of our Common Stock.
The conversion of some or all the Notes will dilute the ownership interests of our stockholders to the extent we deliver shares of common stock upon conversion of any of the Notes. The notes may from time to time be convertible at the option of their holders prior to their scheduled terms under certain circumstances. On conversion of the Notes, we have the option to pay or deliver, as the case may be, cash, shares of our common stock, or a combination of cash and shares of our common stock. If we elect to settle our conversion obligation in shares of our common stock or a combination of cash and shares of our common stock, any sales in the public market of our common stock issuable on such conversion could adversely affect prevailing market prices of our common stock. In addition, the existence of the Notes may encourage short selling by market participants because the conversion of the Notes could be used to satisfy short positions, or anticipated conversion of the Notes into shares of our common stock, any of which could depress the market price of our common stock.
The Capped Call Transactions may affect the value of the Notes and our common stock.
In connection with the Notes’ issuance, we entered into capped call transactions with certain financial institutions (option counterparties). The capped call transactions are generally expected to reduce the potential dilution of our common stock upon any conversion of the Notes and/or offset any cash payments we are required to make in excess of the principal amount of converted Notes, with such reduction and/or offset subject to a cap. From time to time, the option counterparties or their respective affiliates may modify their hedge positions by entering into or unwinding derivative transactions with respect to our common stock and/or purchasing or selling our common stock or other securities of ours in secondary market transactions before the maturity of the Notes. This activity could cause a decrease in the market price of our common stock.
We are subject to counterparty risk with respect to the capped call transactions.
The counterparties to the capped call transactions entered into in connection with the offering of the Notes are financial institutions, and we are subject to the risk that one or more of the counterparties may default or otherwise fail to perform, or may exercise certain rights to terminate, their obligations under the capped call transactions. Our exposure to the credit risk of the counterparties will not be secured by any collateral. Global economic conditions have in the past resulted in the actual or perceived failure or financial difficulties of many financial institutions. If a counterparty to one or more capped call transactions becomes subject to bankruptcy or other insolvency proceedings, we will become an unsecured creditor in those proceedings with a claim equal to our exposure at the time under such transactions. Our exposure will depend on many factors but, generally, our exposure will increase if the market price or the volatility of our common stock increases. In addition, upon a default or other failure to perform, or a termination of obligations, by a counterparty, the counterparty may fail to deliver the shares of our common stock or cash required to be delivered to us under the capped call transactions and we may suffer adverse
tax consequences or experience more dilution than we currently anticipate with respect to our common stock. We can provide no assurances as to the financial stability or viability of the counterparties.
Provisions of Delaware law or our charter documents could delay or prevent an acquisition of our Company, even if the acquisition would be beneficial to our stockholders and could make it more difficult for you to change management.
Provisions of Delaware law and our amended and restated certificate of incorporation and amended and restated by-laws may discourage, delay or prevent a merger, acquisition or other change in control that stockholders may consider favorable, including transactions in which stockholders might otherwise receive a premium for their shares. These provisions may also prevent or delay attempts by stockholders to replace or remove our current management or members of our board of directors. These provisions include: a classified board of directors; limitations on the removal of directors; advance notice requirements for stockholder proposals and nominations; the inability of stockholders to act by written consent or to call special meetings; the ability of our board of directors to make, alter or repeal our amended and restated by-laws; and the authority of our board of directors to issue preferred stock with such terms as our board of directors may determine.
The affirmative vote of the holders of at least 75% of our shares of capital stock entitled to vote, and not less than 75% of the outstanding shares of each class entitled to vote thereon as a class, is necessary to amend or repeal the above provisions that are contained in our amended and restated certificate of incorporation. In addition, absent approval of our board of directors, our amended and restated by-laws may only be amended or repealed by the affirmative vote of the holders of at least 75% of our shares of capital stock entitled to vote.
In addition, we are subject to the provisions of Section 203 of the Delaware General Corporation Law, which limits business combination transactions with stockholders of 15% or more of our outstanding voting stock that our board of directors has not approved. These provisions and other similar provisions make it more difficult for stockholders or potential acquirers to acquire us without negotiation. These provisions may apply even if some stockholders may consider the transaction beneficial to them.
As a result, these provisions could limit the price that investors are willing to pay in the future for shares of our common stock. These provisions might also discourage a potential acquisition proposal or tender offer, even if the acquisition proposal or tender offer is at a premium over the then current market price for our common stock.

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ITEM 1B. UNRESOLVED STAFF COMMENTS
Item 1B. Unresolved Staff Comments
None.

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ITEM 2. PROPERTIES
Item 2. Properties
Our headquarters is located in Scottsdale, Arizona, and we lease various other facilities in the U.S., Mexico, Türkiye, India, Denmark, Germany and Spain. We believe that our properties are generally in good condition, are well maintained and are generally suitable and adequate to carry out our business at expected capacity for the foreseeable future. The table below lists various information regarding our facilities as of February 20, 2025:
Operating
Year
Leased or
Approximate
Location
Segment
Commenced
Owned
Square
Footage
Description of Use
Newton, IA, U.S.
U.S.
Leased
337,922
Wind Blade Manufacturing Facility
Juárez, Mexico
Mexico
Leased
345,984
Wind Blade Manufacturing Facility
Juárez, Mexico
Mexico
Leased
453,096
Wind Blade Manufacturing Facility
Juárez, Mexico
Mexico
Leased
339,386
Wind Blade Manufacturing Facility
Matamoros, Mexico
Mexico
Leased
527,442
Wind Blade Manufacturing Facility
Juárez, Mexico
Mexico
Leased
300,277
Precision Molding Manufacturing Facility
Izmir, Türkiye
EMEA
Leased
343,000
Wind Blade Manufacturing Facility
Izmir, Türkiye
EMEA
Leased
817,078
Wind Blade Manufacturing Facility
Warren, RI, U.S.
U.S.
Leased
108,750
Research and Development Facility
Santa Teresa, NM, U.S.
Mexico
Leased
503,710
Wind Blade Storage Facility
Kolding, Denmark
U.S.
Leased
2,583
Advanced Engineering Center
Chennai, India
India
Leased
776,280
Wind Blade Manufacturing Facility
Madrid, Spain
EMEA
Leased
26,124
Wind Blade Services Facility
Scottsdale, AZ, U.S.
U.S.
Leased
12,993
Corporate Headquarters
Berlin, Germany
U.S.
Leased
4,239
Engineering Center
Des Moines, IA, U.S.
U.S.
Leased
26,640
Wind Blade Services Facility

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ITEM 3. LEGAL PROCEEDINGS
Item 3. Legal Proceedings
For a discussion of our legal proceedings, refer to Note 18 - Commitments and Contingencies - Legal Proceedings of the Notes to Consolidated Financial Statements in Part II, Item 8 of this Annual Report on Form 10-K.

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ITEM 4. MINE SAFETY DISCLOSURE
Item 4. Mine Safety Disclosures
Not applicable.
PART II

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ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
Market Information
On July 22, 2016, our common stock began trading on NASDAQ under the symbol “TPIC.” Prior to that time, there was no public market for our stock.
Performance Graph
The following graph and table illustrate the total stockholder return from July 22, 2016 through December 31, 2024, on our common stock, the Russell 2000 Index, the S&P Small Cap 600 Energy (Sector) Index and the NASDAQ Clean Edge Green Energy Index, assuming an investment of $100.00 on July 22, 2016 including the reinvestment of dividends.
Base Period
7/22/16
12/30/16
12/29/17
12/31/18
12/31/19
12/31/20
12/31/21
12/30/22
12/29/23
12/31/24
TPI Composites, Inc.
$
100.00
$
118.29
$
150.88
$
181.27
$
136.50
$
389.23
$
110.32
$
74.78
$
30.53
$
13.94
Russell 2000
100.00
111.89
126.60
111.19
137.56
162.82
185.12
145.21
167.13
183.87
S&P Small Cap 600 Energy (Sector)
100.00
133.11
97.60
55.64
47.19
28.17
44.86
65.17
66.48
61.94
NASDAQ Clean Edge Green Energy
100.00
102.59
134.16
116.50
163.93
462.91
448.76
311.51
278.55
224.12
Holders
As of January 31, 2025, there were five stockholders of record of our common stock, although there is a much larger number of beneficial owners.
Dividends
We have never declared or paid any cash dividends on shares of our capital stock. We currently intend to retain earnings, if any, to finance the development and growth of our business and do not anticipate paying cash dividends on the common stock in the future. Any payment of any future dividends to holders of our common stock, will be at the discretion of the board of directors and subject to compliance with certain covenants in our loan agreements, after taking into account various factors, including our financial condition, operating results, capital requirements, restrictions contained in any future financing instruments, growth plans and other factors the board of directors deems relevant. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations - Liquidity and Capital Resources” included in Part II, Item 7 of this Annual Report on Form 10-K.
Securities Authorized for Issuance under Equity Compensation Plans
The information required in response to Item 201(d) of Regulation S-K is set forth in Part III, Item 12 of this Annual Report on Form 10-K which is incorporated herein by reference.
Recent Sales of Unregistered Securities
There were no unregistered sales of equity securities during the year ended December 31, 2024 and from the period from December 31, 2024 to the filing date of this Annual Report on Form 10-K which have not previously been disclosed in a Quarterly Report on Form 10-Q or in a Current Report on Form 8-K.
Use of Proceeds from Registered Securities
None.
Purchases of Equity Securities by the Issuer
The following table summarizes the total number of shares of our common stock that we repurchased during the three months ended December 31, 2024 from certain associates who surrendered common stock to pay the taxes in connection with the vesting of restricted stock units.
Period
Total Number
of Shares Purchased
Average Price
Paid per Share
Total Number
of Shares Purchased as Part of Publicly Announced Program
Maximum Number of Shares That May
Yet Be Purchased Under the Program
October (October 1 - October 31)
-
$
-
-
-
November (November 1 - November 30)
18,782
2.00
-
-
December (December 1 - December 31)
-
-
-
-
Total
18,782
$
2.00
-
-

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ITEM 6. SELECTED FINANCIAL DATA
Item 6. [Reserved]

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ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
You should read the following discussion and analysis of our financial condition and results of operations together with our consolidated financial statements and the related notes included in Part II, Item 8 of this Annual Report on Form 10-K and other financial information appearing elsewhere in this Annual Report on Form 10-K. Some of the information contained in this discussion and analysis or set forth elsewhere in this Annual Report on Form 10-K, including information with respect to plans and strategy for our business and related financing, includes forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those described in or implied by these forward-looking statements as a result of various factors, including those discussed below and elsewhere in this Annual Report on Form 10-K, particularly those under “Risk Factors” included in Part I, Item 1A of this Annual Report on Form 10-K.
OVERVIEW
Our Company
We are an independent manufacturer of composite wind blades for the wind energy market with a global manufacturing footprint. We deliver high-quality, cost-effective composite solutions through long-term relationships with leading original equipment manufacturers in the wind market. We also provide field service inspection and repair services to our OEM customers and wind farm owners and operators. We are headquartered in Scottsdale, Arizona and operate wind blade manufacturing facilities in the U.S., Mexico, Türkiye, and India. We operate additional engineering development centers in Denmark and Germany, and field services facilities in the U.S. and Spain. For a further overview of our Company, refer to the discussion in “Business-Overview” included in Part I, Item 1 of this Annual Report on Form 10-K.
In June 2024, the Company completed the divestiture of its wholly-owned subsidiary, TPI, Inc. (the Automotive subsidiary). The Automotive subsidiary was engaged in the development, commercialization and implementation of the Company’s automotive industry related products. The Automotive subsidiary was previously classified as held for sale in the Company’s Consolidated Balance Sheets as of December 31, 2023. The divestiture constituted a strategic shift as the Company will focus entirely on executing on its core business in the wind industry going forward, and accordingly, the historical results of our Automotive subsidiary have been presented as discontinued operations in our Consolidated Statements of Operations and Consolidated Balance Sheets.
In December 2022, the Company committed to a restructuring plan to rebalance our organization and optimize our global manufacturing footprint. Changing economic and geopolitical factors, including increased logistics costs and tariffs imposed on components of wind turbines from China, including wind blades, had an adverse impact on demand and profitability for our wind blades manufactured in our Chinese facilities. In connection with our restructuring plan, we ceased production at our Yangzhou, China manufacturing facility as of December 31, 2022. Our business operations in China comprised the entirety of our "Asia" reporting segment. The shut down had a meaningful effect on our global manufacturing footprint and consolidated financial results. Accordingly, the historical results of our Asia reporting segment have been presented as discontinued operations in our Consolidated Statements of Operations and Consolidated Balance Sheets. Our China operations represented a geographic operating segment that included (1) the manufacturing of wind blades at our facilities in Dafeng, China and Yangzhou, China, (2) the manufacturing of precision molding and assembly systems at our Taicang Port, China facility and (3) wind blade inspection and repair services.
The following discussion reflects continuing operations only, unless otherwise indicated. For further information regarding our discontinued operations, refer to Note 2 - Discontinued Operations of the Notes to Consolidated Financial Statements in Part II, Item 8 of this Annual Report on Form 10-K.
Our business operations are defined geographically into four operating segments - (1) the U.S., (2) Mexico, (3) Europe, the Middle East and Africa (EMEA) and (4) India. For further information regarding our operating segments, refer to Note 24 - Segment Reporting of the Notes to Consolidated Financial Statements in Part II, Item 8 of this Annual Report on Form 10-K.
KEY TRENDS AND RECENT DEVELOPMENTS AFFECTING OUR BUSINESS
Geopolitical events around the world have accelerated regional needs for energy independence and security. Climate change also continues to drive the need for renewable energy solutions and net-zero carbon emissions. The global demand for clean energy continues to rise, driven by factors such as the growing need for data centers, semiconductor chip manufacturers, the adoption of electric vehicles, and the electrification of buildings. Over the course of the past few years, we have seen numerous government policy initiatives aimed at expanding the use of renewable energy, including the passing of the Inflation Reduction Act of 2022 (IRA) in the U.S. and several policy initiatives in the European Union (EU) that are expected to simplify regulations, speed up permitting and promote cross-border projects to accelerate climate neutrality. We expect these trends in governmental policy will enable long-term revenue growth in the wind industry. As the majority of our wind blades are installed in the U.S. and Europe, these policy trends are expected to have a material impact on our business and the pace of long-term growth.
We expect sales of our wind blades to moderately increase in 2025 as several of our manufacturing lines that were in startup and transition in 2024 are expected to achieve serial production to meet projected customer demand for wind blades in the U.S. market, partially offset by lower forecasted demand for wind blades in the European market. This forecasted increase in sales may also be offset by a reduction in demand for blades manufactured in our Mexico manufacturing facilities that are imported into the U.S. as a result of the recently announced tariffs that are scheduled to go into effect in March 2025. However, we are not able to assess the full impact of such tariffs on our business at this time.
While long-term onshore market growth in Europe remains in sight, the economic viability of pursuing that demand with European-based manufacturing is becoming increasingly challenging. Historically, we have serviced the European market with our plants in Türkiye. The hyperinflationary environment we have experienced in Türkiye for the last number of years is not expected to subside any time soon. In addition, Türkiye’s monetary policy continues to limit Turkish Lira devaluation, resulting in a very challenging environment to export goods out of Türkiye. Furthermore, while we have successfully competed with Chinese wind blade manufacturers for years, their recent aggressive push to expand their presence in Europe and other regions outside of North America, supported by the Chinese government, has added to the challenging competitive environment outside of the U.S. Unlike the U.S., which has implemented tariffs to protect against unfair competition and tax laws to encourage near shoring and domestic manufacturing, we believe it is unlikely that European governments will take similar steps to meaningfully help suppliers like TPI that supply passive components to our OEM customers. The implementation of the Foreign Subsidies Regulation (FSR) by the EU and its recent aggressive actions to combat unfairly subsidized Chinese products are encouraging, but their focus to date has been on active parts of wind turbines versus the passive parts, such as the blades that we manufacture for our customers. In December 2024, we committed to a restructuring plan in Türkiye in order to rationalize our workforce in response to this lower forecasted demand amid intense Chinese competition and the continued hyperinflationary environment. As a result, we recorded approximately $9.6 million in restructuring charges for severance and other one-time termination benefits during the fourth quarter of 2024.
Ongoing inflationary pressures have caused and may continue to cause many of our production expenses to increase, which adversely impacts our results of operations. The government of Mexico increased minimum wages approximately 20%, 20% and 12%, effective January 1, 2023, 2024 and 2025, respectively. The government of Türkiye increased minimum wages approximately 55%, 34%, 49% and 30%, effective January 1, 2023, July 1, 2023, January 1, 2024 and January 1, 2025, respectively. While our customer contracts allow us to pass a portion of these increases to our customers, we will not be able to recover 100% of the increased labor costs caused by this wage inflation. If our manufacturing facilities in these countries continue to experience wage inflation at these levels and the increased costs in local currency are not offset with favorable foreign currency fluctuations, such elevated wages will have a material impact on our results of operations.
Effective June 30, 2024, we shut down the Matamoros, Mexico manufacturing facility for Nordex that we took over from them in July 2021. Our results of operations were adversely impacted by the performance of this facility in the first half of the year due to higher than anticipated losses driven by cancelled orders and production inefficiencies resulting from Nordex’s request for us to shut down the facility at the conclusion of the contract on June 30, 2024, including releasing all associates working in the facility. While Nordex funded all of our severance costs for the headcount reduction, our results of operations were negatively impacted by significantly less demand
from Nordex than expected and production inefficiencies relating to the closure of the facility. We experienced a loss from operations of $33.6 million, $45.6 million and $40.8 million at this facility, for the years ended December 31, 2024, 2023, and 2022 respectively.
We are exploring alternatives for the divestiture of our tooling business as part of our continued prioritization of capital for growth in the wind blade business. As of December 31, 2024, approximately $1.3 million of assets related to our tooling business were classified as held for sale in our consolidated balance sheets. The assets held for sale primarily relate to net property, plant and equipment and inventory. Upon classifying the assets as held for sale, we recognized $3.9 million of impairment charges during the year ended December 31, 2024. We expect to complete the divestiture in 2025.
COMPONENTS OF RESULTS OF OPERATIONS
Net Sales
We recognize revenue from the majority of our manufacturing services over time as our customers control the product as it is produced, and we may not use or sell the product to fulfill other customers’ contracts. Net sales include amounts billed to our customers for our products, including wind blades, precision molding and assembly systems and other products and services, as well as the progress towards the completion of the performance obligation for products in progress, which is determined on a ratio of direct costs incurred to date in fulfillment of the contract to the total estimated direct costs required to complete the performance obligation.
Cost of Goods Sold
Cost of goods sold includes the costs we incur at our production facilities to make products saleable on both products invoiced during the period as well as products in progress towards the satisfaction of the related performance obligations for which we have an enforceable right to payment upon termination and we may not use or sell the product to fulfill other customers’ contracts. All costs incurred at our production facilities, as well as the allocated portion to our production facilities of costs incurred at our corporate headquarters and our research facilities, are directly or indirectly related to the manufacturing of products or services and are presented in cost of goods sold. Cost of goods sold includes such items as raw materials, direct and indirect labor and facilities costs, including purchasing and receiving costs, plant management, inspection costs, production process improvement activities, product engineering and internal transfer costs. In addition, all depreciation associated with assets used in the production of our products is also included in cost of goods sold. Direct labor costs consist of salaries, benefits and other personnel related costs for associates engaged in the manufacturing of our products and services. All direct labor costs, excluding non-productive labor costs, are included in the measure of progress towards completion of the relevant performance obligation when determining revenue to be recognized during the period.
Startup and transition costs are primarily unallocated fixed overhead costs and underutilized direct labor costs incurred during the period production facilities are transitioning wind blade models and ramping up manufacturing. The cost of sales for the initial products from a new model manufacturing line is generally higher than when the line is operating at optimal production volume levels due to inefficiencies during ramp-up related to labor hours per blade, cycle times per blade and raw material usage. Additionally, these costs as a percentage of net sales are generally higher during the period in which a facility is ramping up to full production capacity due to underutilization of the facility. Manufacturing overhead at each of our facilities includes virtually all indirect costs (including share-based compensation costs) incurred at the plants, including engineering, finance, information technology, human resources and plant management.
General and Administrative Expenses
General and administrative expenses primarily relate to the unallocated portion of costs incurred at our corporate headquarters and our research facilities and include salaries, benefits and other personnel related costs for associates engaged in research and development, engineering, finance, internal audit, information technology, human resources, business development, global operational excellence, global supply chain, in-house legal and executive management. Other costs include outside legal and accounting fees, risk management (insurance), share-based compensation and certain other administrative and global resources costs.
The unallocated research and development expenses incurred at our Kolding, Denmark advanced engineering center and our Berlin, Germany engineering center are also included in general and administrative expenses. For the years ended December 31, 2024, 2023 and 2022, research and development expenses totaled $1.3 million, $1.4 million and $1.1 million, respectively.
Loss on Sale of Assets and Asset Impairments
Loss on sale of assets represents the losses on the sale of certain receivables, on a non-recourse basis under accounts receivable assignment agreements with our customers, to financial institutions and losses on the sale of other assets at our corporate and manufacturing facilities. Asset impairments represent the losses on the impairment of our assets at our corporate and manufacturing facilities.
Gain on extinguishment of Series A Preferred Stock
Gain on extinguishment of Series A Preferred Stock, par value $0.01 per share (the Series A Preferred Stock), represents the gain recognized as a result of the cashless exchange of all of the outstanding Series A Preferred Stock for the senior secured term loan (the Term Loan) under the Credit Agreement that we entered into in December 2023. See Note 13 - Debt and Note 16 - Mezzanine Equity for further discussion of the gain recognized.
Restructuring Charges
Restructuring charges primarily consist of associate severance, one-time termination benefits and ongoing benefits related to the reduction of our workforce and other costs associated with exit activities, which may include costs related to leased facilities to be abandoned and facility and associate relocation costs.
Other Income (Expense)
Other income (expense) consists of interest expense on our debt borrowings, the amortization of deferred financing costs on such borrowings, the amortization of the debt discount on our Term Loan, foreign currency income and losses, interest income on money market accounts, losses on extinguishment of debt and miscellaneous income and expense.
Income Taxes
Income taxes consists of federal, state, provincial, local and foreign taxes based on income in jurisdictions in which we operate, including in the U.S., Mexico, Türkiye, India and various countries within Europe. The income tax rate, tax provisions, deferred tax assets and liabilities vary according to the jurisdiction in which the income or loss arises. Tax laws are complex and subject to different interpretations by management and the respective governmental taxing authorities and require us to exercise judgment in determining our income tax provision, our deferred tax assets and liabilities and the valuation allowance recorded against our net deferred tax assets.
KEY METRICS USED BY MANAGEMENT TO MEASURE PERFORMANCE
In addition to measures of financial performance presented in our consolidated financial statements in accordance with GAAP, we use certain other financial measures and operating metrics to analyze our performance. These “non-GAAP” financial measures consist of EBITDA, adjusted EBITDA, free cash flow and net cash (debt), which help us evaluate growth trends, establish budgets, assess operational efficiencies, oversee our overall liquidity, and evaluate our overall financial performance. The key operating metrics consist of wind blade sets produced, estimated megawatts of energy capacity to be generated by wind blade sets produced, utilization, dedicated manufacturing lines, manufacturing lines installed, and weighted-average sales price (ASP) per wind blade, all of which help us evaluate our operational performance. We believe that these measures are useful to investors in evaluating our performance.
Key Financial Measures
The following discussion reflects continuing operations only, unless otherwise indicated. Certain prior period amounts have been reclassified to conform to the current period's presentation.
The key financial measures as of and for the years ended December 31 are as follows:
(in thousands)
Net sales
$
1,331,131
$
1,432,408
$
1,478,739
Net loss from continuing operations
(210,120
)
(151,966
)
(17,119
)
EBITDA(1)
(75,267
)
(84,812
)
55,826
Adjusted EBITDA(1)
(38,691
)
(44,889
)
75,265
Net cash provided by (used in) operating activities
12,498
(80,972
)
(62,272
)
Capital expenditures(2)
26,201
36,137
18,832
Free cash flow(1)(2)
(13,703
)
(117,109
)
(81,104
)
Total debt, net of debt issuance costs
and debt discount
616,602
485,193
61,173
Net cash (debt)(1)
(418,582
)
(323,218
)
82,042
(1)See below for more information and a reconciliation of EBITDA, adjusted EBITDA, free cash flow and net cash (debt) to net loss from continuing operations attributable to common stockholders, net cash provided by (used in) operating activities and total debt, net of debt issuance costs and debt discount, respectively, the most directly comparable financial measures calculated and presented in accordance with GAAP.
(2)Capital expenditures and free cash flow include amounts from discontinued operations. Refer to Consolidated Statements of Cash Flows for more information.
EBITDA and adjusted EBITDA
We define EBITDA, a non-GAAP financial measure, as net income or loss from continuing operations plus interest expense, income taxes and depreciation and amortization. We define adjusted EBITDA as EBITDA plus any share-based compensation expense, plus or minus any foreign currency losses or income, plus or minus any losses or gains from the sale of assets and asset impairments, plus any restructuring charges. Adjusted EBITDA is the primary metric used by our management and our board of directors to establish budgets and operational goals for managing our business and evaluating our performance. We monitor adjusted EBITDA as a supplement to our GAAP measures, and believe it is useful to present to investors, because we believe that it facilitates evaluation of our period-to-period operating performance by eliminating items that are not operational in nature, allowing comparison of our recurring core business operating results over multiple periods unaffected by differences in capital structure, capital investment cycles and fixed asset base. In addition, we believe adjusted EBITDA and similar measures are widely used by investors, securities analysts, ratings agencies, and other parties in evaluating companies in our industry as a measure of financial performance and debt-service capabilities.
Our use of adjusted EBITDA has limitations as an analytical tool and you should not consider it in isolation or as a substitute for analysis of our results as reported under GAAP. Some of these limitations are:
•adjusted EBITDA does not reflect the net income or loss from discontinued operations;
•adjusted EBITDA does not reflect changes in, or cash requirements for, our working capital needs;
•adjusted EBITDA does not reflect our cash expenditures for capital equipment or other contractual commitments;
•adjusted EBITDA does not reflect the interest expense or the cash requirements necessary to service interest or principal payments on our indebtedness;
•adjusted EBITDA does not reflect the dividends to our extinguished Series A Preferred Stockholders or accretion of the Series A Preferred Stock;
•adjusted EBITDA does not reflect the gain on extinguishment of our Series A Preferred Stock;
•adjusted EBITDA does not reflect losses on extinguishment of debt relating to prepayment penalties, termination fees and the write off of any remaining debt discount and debt issuance costs upon the repayment or refinancing of our debt;
•adjusted EBITDA does not reflect tax payments that may represent a reduction in cash available to us;
•although depreciation and amortization are non-cash charges, the assets being depreciated and amortized may have to be replaced in the future, and adjusted EBITDA does not reflect capital expenditure requirements relating to the future need to augment or replace those assets;
•adjusted EBITDA does not reflect share-based compensation expense on equity-based incentive awards to our officers, associates, directors and consultants;
•adjusted EBITDA does not reflect the foreign currency income or losses in our operations;
•adjusted EBITDA does not reflect the gains or losses on the sale of assets and asset impairments;
•adjusted EBITDA does not reflect restructuring charges; and
•other companies, including companies in our industry, may calculate EBITDA and adjusted EBITDA differently, which reduces their usefulness as comparative measures.
In evaluating EBITDA and adjusted EBITDA, you should be aware that in the future, we will incur expenses similar to the adjustments noted herein. Our presentations of EBITDA and adjusted EBITDA should not be construed as suggesting that our future results will be unaffected by these expenses or any unusual or non-recurring items. When evaluating our performance, you should consider EBITDA and adjusted EBITDA alongside other financial performance measures, including our net income (loss) and other GAAP measures.
Free cash flow
We define free cash flow as net cash provided by (used in) operating activities less capital expenditures. We believe free cash flow is a useful measure for investors because it portrays our ability to generate cash from our business for purposes such as repaying maturing debt and accrued interest paid in kind on debt and funding business acquisitions.
Net cash (debt)
We define net cash (debt) as total unrestricted cash and cash equivalents less the total amount of debt outstanding. The total amount of debt outstanding is comprised of the long-term debt and current maturities of long-term debt, net of debt issuance costs and debt discounts, as presented in our consolidated balance sheets. We believe that the presentation of net cash (debt) provides useful information to investors because our management reviews net cash (debt) as part of our oversight of overall liquidity, financial flexibility and leverage. Net cash (debt) is important when we consider opening new manufacturing facilities and expanding existing manufacturing facilities, as well as for capital expenditure requirements.
The following tables reconcile our non-GAAP key financial measures to the most directly comparable GAAP measures:
EBITDA and adjusted EBITDA for the years ended December 31 are reconciled as follows:
(in thousands)
Net loss attributable to common stockholders
$
(240,707
)
$
(177,612
)
$
(124,208
)
Net loss from discontinued operations
30,587
49,813
48,186
Net loss from continuing operations attributable
to common stockholders
(210,120
)
(127,799
)
(76,022
)
Preferred stock dividends and accretion
-
58,453
58,903
Gain on extinguishment of
Series A Preferred Stock
-
(82,620
)
-
Net loss from continuing operations
(210,120
)
(151,966
)
(17,119
)
Adjustments:
Depreciation and amortization
29,883
35,389
35,788
Interest expense, net
92,420
12,101
5,020
Income tax provision
12,550
19,664
32,137
EBITDA
(75,267
)
(84,812
)
55,826
Share-based compensation expense
6,741
9,740
14,347
Foreign currency loss (income), net
1,655
5,122
(4,695
)
Loss on sale of assets and asset impairments
17,230
20,931
9,817
Restructuring charges, net
10,950
4,130
(30
)
Adjusted EBITDA
$
(38,691
)
$
(44,889
)
$
75,265
Free cash flow, which includes discontinued operations, for the years ended December 31 is reconciled as follows:
(in thousands)
Net cash provided by (used in) operating activities
$
12,498
$
(80,972
)
$
(62,272
)
Less capital expenditures
(26,201
)
(36,137
)
(18,832
)
Free cash flow
$
(13,703
)
$
(117,109
)
$
(81,104
)
Net cash (debt) as of December 31 is reconciled as follows:
(in thousands)
Cash and cash equivalents
$
196,518
$
161,059
$
133,546
Cash and cash equivalents of
discontinued operations
1,502
9,669
Total debt, net of debt issuance costs
and debt discount
(616,602
)
(485,193
)
(61,173
)
Net cash (debt)
$
(418,582
)
$
(323,218
)
$
82,042
Key Operating Metrics (1)
The key operating metrics as of and for the year ended December 31 are as follows:
Sets
2,175
2,584
2,441
Estimated megawatts
9,116
11,382
10,736
Utilization
%
%
%
Dedicated manufacturing lines
Manufacturing lines installed
Wind blade ASP (in $ thousands)
$
$
$
(1)See below for more information on each of our key operating metrics.
Sets represents the number of wind blade sets, consisting of three wind blades each, which we produced worldwide during the period. We monitor sets and believe that presenting sets to investors is helpful because we believe that it is the most direct measurement of our manufacturing output during the period. Sets primarily impact net sales.
Estimated megawatts are the energy capacity to be generated by wind blade sets produced during the period. Our estimate is based solely on name-plate capacity of the wind turbine on which the wind blades we manufacture are expected to be installed. We monitor estimated megawatts and believe that presenting estimated megawatts to investors is helpful because we believe that it is a commonly followed measurement of energy capacity across our industry and provides an indication of our share of the overall wind blade market.
Utilization represents the percentage of the number of wind blades produced during the period compared to the total potential wind blade capacity of the manufacturing lines installed during the period. We monitor utilization because we believe it helps investors to better understand how close we are to operating at maximum production capacity.
Dedicated manufacturing lines are the number of wind blade manufacturing lines that we have dedicated to our customers pursuant to our supply agreements at the end of the period. We monitor dedicated manufacturing lines and believe that presenting this metric to investors is helpful because we believe that the number of dedicated manufacturing lines is the best indicator of demand for the wind blades we manufacture for customers under our supply agreements in any given period. Lines become dedicated upon the execution of a supply agreement; this means that lines are typically dedicated before they are installed.
Manufacturing lines installed represents the number of wind blade manufacturing lines installed and either in operation, startup or transition during the period. We believe that total manufacturing lines installed provides an understanding of the number of manufacturing lines installed and either in operation, startup or transition. From time to time, we have manufacturing lines installed that are not dedicated to our customers pursuant to a supply agreement.
Wind blade ASP represents the average sales price (ASP) during the period for a single wind blade that we manufacture for our customers. We monitor wind blade ASP and believe that presenting it to investors is helpful as it is the most direct measurement of our pricing structure with our customers under our supply agreements and directly impacts net sales.
RESULTS OF OPERATIONS
Year Ended December 31, 2024 Compared to Year Ended December 31, 2023
The following table summarizes certain of our operating results as a percentage of net sales for the years ended December 31 that have been derived from our consolidated statements of operations:
Net sales
100.0
%
100.0
%
Cost of sales
100.0
102.9
Startup and transition costs
4.0
1.5
Total cost of goods sold
104.0
104.4
Gross loss
(4.0
)
(4.4
)
General and administrative expenses
2.1
2.0
Loss on sale of assets and asset impairments
1.3
1.5
Restructuring charges, net
0.8
0.3
Loss from continuing operations
(8.2
)
(8.2
)
Total other expense
(6.6
)
(1.0
)
Loss before income taxes
(14.8
)
(9.2
)
Income tax provision
(1.0
)
(1.4
)
Net loss from continuing operations
(15.8
)
(10.6
)
Preferred stock dividends and accretion
-
(4.1
)
Gain on extinguishment of Series A Preferred Stock
-
5.8
Net loss attributable to common stockholders
from continuing operations
(15.8
)
(8.9
)
Net loss from discontinued operations
(2.3
)
(3.5
)
Net loss attributable to common stockholders
(18.1
)%
(12.4
)%
Net sales
Consolidated discussion
The following table summarizes our net sales by product/service for the years ended December 31:
Change
$
%
(in thousands)
Wind blade, tooling
and other wind
related sales
$
1,298,287
$
1,394,316
$
(96,029
)
(6.9
)%
Field service, inspection
and repair services
sales
32,844
38,092
(5,248
)
(13.8
)
Total net sales
$
1,331,131
$
1,432,408
$
(101,277
)
(7.1
)%
The decrease in wind blade, tooling, and other wind-related (collectively, Wind) sales for the year ended December 31, 2024, as compared to the same period in 2023, was primarily due to a 16% decrease in the number of wind blades produced due primarily to the number and pace of startups and transitions, expected volume declines based on market activity levels impacting our Türkiye and India facilities, and the shut-down of the Nordex Matamoros plant as of June 30, 2024. These decreases were partially offset by a 10% increase in average sales prices of wind blades due to changes in the mix of wind blade models produced, in particular the startup of production at one of our previously idled facilities in Juarez, Mexico, as well has higher sales volumes to support increased demand for the U.S. market. The decrease in field service, inspection and repair services (collectively, Field Services) sales for the year ended December 31, 2024, as compared to the same period in 2023, was primarily due to a reduction in technicians deployed to revenue generating projects due to an increase in time spent on non-revenue generating inspection and repair activities in the first half of 2024.
Segment discussion
The following table summarizes our net sales by our four geographic operating segments for the years ended December 31:
Change
$
%
(in thousands)
U.S.
$
20,204
$
28,325
$
(8,121
)
(28.7
)%
Mexico
696,762
589,539
107,223
18.2
EMEA
447,881
573,483
(125,602
)
(21.9
)
India
166,284
241,061
(74,777
)
(31.0
)
Total net sales
$
1,331,131
$
1,432,408
$
(101,277
)
(7.1
)%
U.S. Segment
The following table summarizes our net sales by product/service for the U.S. segment for the years ended December 31:
Change
$
%
(in thousands)
Wind blade, tooling
and other wind
related sales
$
$
-
$
NM
Field service, inspection
and repair services
sales
19,657
28,325
(8,668
)
(30.6
)
Total net sales
$
20,204
$
28,325
$
(8,121
)
(28.7
)%
NM - not meaningful.
The decrease in Field Services sales for the year ended December 31, 2024, as compared to the same period in 2023, was primarily due to a reduction in technicians deployed to revenue generating projects and more time spent on non-revenue generating inspection and repair activities in the first half of 2024.
Mexico Segment
The following table summarizes our net sales by product/service for the Mexico segment for the years ended December 31:
Change
$
%
(in thousands)
Wind blade, tooling
and other wind
related sales
$
693,939
$
587,628
$
106,311
18.1
%
Field service, inspection
and repair services
sales
2,823
1,911
47.7
Total net sales
$
696,762
$
589,539
$
107,223
18.2
%
The increase in the Mexico segment’s Wind sales for the year ended December 31, 2024, as compared to the same period in 2023, was primarily due to higher average sales prices of wind blades in Mexico due to changes in the mix of wind blade models produced, including the transition to larger wind blade models at one of our Matamoros, Mexico manufacturing facilities and the restart of production at one of our previously idled facilities in Juarez, and the impact of wage inflation on wind blade prices. This increase was partially offset by a 5% net
decrease in the number of wind blades produced across our Mexico facilities, primarily due to a decrease in the number of wind blades produced at the Nordex Matamoros facility that shut down at the conclusion of the contract on June 30, 2024.
EMEA Segment
The following table summarizes our net sales by product/service for the EMEA segment for the years ended December 31:
Change
$
%
(in thousands)
Wind blade, tooling
and other wind
related sales
$
437,517
$
565,627
$
(128,110
)
(22.6
)%
Field service, inspection
and repair services
sales
10,364
7,856
2,508
31.9
Total net sales
$
447,881
$
573,483
$
(125,602
)
(21.9
)%
The decrease in the EMEA segment’s Wind sales for the year ended December 31, 2024, as compared to the same period in 2023, was primarily due to a 24% decrease in the number of wind blades produced due to reduced demand from one of our customers and the transition of certain manufacturing lines to a different customers' wind blade model. This decrease was partially offset by slightly higher average sales prices of wind blades in Türkiye due to such changes in the mix of wind blade models produced. The fluctuating U.S. dollar relative to the Euro had a favorable impact of 0.1% on the EMEA segment's net sales during the year ended December 31, 2024, as compared to the same period in 2023.
India Segment
The following table summarizes our net sales by product/service for the India segment for the years ended December 31:
Change
$
%
(in thousands)
Wind blade, tooling
and other wind
related sales
$
166,284
$
241,061
$
(74,777
)
(31.0
)%
Total net sales
$
166,284
$
241,061
$
(74,777
)
(31.0
)%
The decrease in the India segment’s net sales of Wind for the year ended December 31, 2024, as compared to the same period in 2023, was primarily due to a 24% decrease in the number of wind blades produced due to a decrease in market demand for one of our customers' wind blades models produced at this facility, and lower average sales prices due to the impact of raw material and logistic cost reductions on wind blade prices.
Total cost of goods sold
The following table summarizes our total cost of goods sold for the years ended December 31:
Change
$
%
(in thousands)
Cost of sales
$
1,331,241
$
1,474,356
$
(143,115
)
(9.7
)%
Startup costs
18,277
4,399
13,878
315.5
Transition costs
34,612
17,358
17,254
99.4
Total cost of goods sold
$
1,384,130
$
1,496,113
$
(111,983
)
(7.5
)
% of net sales
104.0
%
104.4
%
(0.4
)%
Total cost of goods sold as a percentage of net sales decreased by approximately 0.4% for the year ended December 31, 2024, as compared to the same period in 2023, primarily driven by the shutdown of our Nordex Matamoros facility at the end of the second quarter of 2024, which had significant cost challenges in the prior comparative period, a decrease in warranty charges from those recorded in 2023, favorable foreign currency fluctuations, and cost savings initiatives. This decrease in cost of goods sold as a percentage of net sales was partially offset by an increase in costs for startup and transition activities that were completed in 2024, and increased labor costs in Mexico and Türkiye as a result of wage increases. The fluctuating U.S. dollar against the Euro, Turkish Lira, Mexican Peso and Indian Rupee had a combined favorable impact of 3.8% on consolidated cost of goods sold for the year ended December 31, 2024, as compared to the same period in 2023.
General and administrative expenses
The following table summarizes our general and administrative expenses for the years ended December 31:
Change
$
%
(in thousands)
General and
administrative expenses
$
27,536
$
28,205
$
(669
)
(2.4
)%
% of net sales
2.1
%
2.0
%
0.1
%
General and administrative expenses as a percentage of net sales for the year ended December 31, 2024, as compared to the same period in 2023 was flat, primarily due to lower employee compensation costs and cost savings initiatives, partially offset by increases in professional service and consulting fees.
Loss on sale of assets and asset impairments
The following table summarizes our loss on sale of assets and asset impairments for the years ended December 31:
Change
$
%
(in thousands)
Loss on sale of receivables
$
12,460
$
19,547
$
(7,087
)
(36.3
)%
Loss on sale of other assets
and asset impairments
4,770
1,384
3,386
244.7
Total loss on sale of assets
and asset impairments
$
17,230
$
20,931
$
(3,701
)
(17.7
)
% of net sales
1.3
%
1.5
%
(0.2
)%
The decrease in loss on sale of assets and asset impairments for the year ended December 31, 2024, as compared to the same period in 2023, was primarily due to a decrease in the volume of receivables sold through our accounts receivable financing arrangements with certain of our customers in 2024, partially offset by an increase in asset impairments related to the planned divestiture of our tooling business.
Restructuring charges, net
The following table summarizes our restructuring charges, net, for the years ended December 31:
Change
$
%
(in thousands)
Severance
$
10,950
$
4,155
$
6,795
163.5
%
Other restructuring costs
-
(25
)
NM
Total restructuring charges, net
$
10,950
$
4,130
$
6,820
165.1
% of net sales
0.8
%
0.3
%
0.5
%
The increase in restructuring charges, net for the year ended December 31, 2024, as compared to the same period in 2023 was primarily due to increased severance costs at our Türkiye facilities in the current period as part of our restructuring plan to rationalize our workforce in Türkiye in response to lower forecasted demand, as well as additional severance costs associated with the planned divestiture of our tooling business.
Income (loss) from continuing operations
Segment discussion
The following table summarizes our income (loss) from operations by our four geographic operating segments for the years ended December 31:
Change
$
%
(in thousands)
U.S.
$
(24,443
)
$
(17,130
)
$
(7,313
)
(42.7
)%
Mexico
(96,213
)
(160,807
)
64,594
40.2
EMEA
6,503
36,212
(29,709
)
(82.0
)
India
5,438
24,754
(19,316
)
(78.0
)
Total loss from
operations from
continuing operations
$
(108,715
)
$
(116,971
)
$
8,256
7.1
% of net sales
-8.2
%
-8.2
%
0.0
%
U.S. Segment
The increase in the loss from operations in the U.S. segment for the year ended December 31, 2024, as compared to the same period in 2023, was primarily due to a reduction in field services sales in the first half of 2024 as technicians spent more time on non-revenue generating inspection and repair activities, as well as increases in professional services and consulting fees.
Mexico Segment
The decrease in loss from operations in the Mexico segment for the year ended December 31, 2024, as compared to the same period in 2023, was primarily due earnings on higher average sales prices in the current period, lower warranty expense, the shutdown of our Nordex Matamoros facility at the end of the second quarter of 2024, which had significant cost challenges in the prior comparative period, cost savings initiatives, and favorable foreign currency fluctuations. These favorable items were partially offset by a decrease in the volume of wind blades produced, increased startup and transition costs, and increased labor costs. The fluctuating U.S. dollar relative to the
Mexican Peso had a favorable impact of 0.9% on the Mexico segment's cost of goods sold for the year ended December 31, 2024,as compared to the same period in 2023.
EMEA Segment
The decrease in income from operations in the EMEA segment for the year ended December 31, 2024, as compared to the same period in 2023, was primarily due to a 24% decrease in the volume of wind blades produced, increased startup and transition costs, inflation impacting operating costs that we were not able to pass on to our customers, and increased labor costs as a result of wage increases in Türkiye. These unfavorable items were partially offset by a slight increase in wind blade prices, cost savings initiatives, and favorable foreign currency fluctuations. The fluctuating U.S. dollar relative to the Turkish Lira and Euro had a favorable impact of 11.7% on the EMEA segment's cost of goods sold for the year ended December 31, 2024,as compared to the same period in 2023.
India Segment
The decrease in income from operations in the India segment for the year ended December 31, 2024, as compared to the same period in 2023, was primarily due to a 24% decrease in the volume of wind blades produced and lower average sales prices.
Other income (expense)
The following table summarizes our total other income (expense) for the years ended December 31:
Change
$
%
(in thousands)
Interest expense, net
$
(92,420
)
$
(12,101
)
$
(80,319
)
NM
Foreign currency
income (loss), net
(1,655
)
(5,122
)
3,467
67.7
Miscellaneous income
5,220
1,892
3,328
175.9
Total other expense
$
(88,855
)
$
(15,331
)
$
(73,524
)
NM
The change in total other income (expense) for the year ended December 31, 2024, as compared to the same period in 2023, was primarily due to an increase in interest expense and non-cash amortization of debt discount related to the refinancing and issuance of our Term Loan in the fourth quarter of 2023.
Income taxes
The following table summarizes our income taxes for the years ended December 31:
Change
$
%
(in thousands)
Income tax provision
$
(12,550
)
$
(19,664
)
$
7,114
36.2
%
Effective tax rate
6.4
%
14.9
%
Our income tax provision for the year ended December 31, 2024, as compared to the same period in 2023 decreased due to the mix of earnings of our operations in foreign jurisdictions and changes in our uncertain tax positions.
Net loss from continuing operations
The following table summarizes our net loss from continuing operations for the years ended December 31:
Change
$
%
(in thousands)
Net loss from
continuing operations
$
(210,120
)
$
(151,966
)
$
(58,154
)
(38.3
)%
The increase in the net loss for the year ended December 31, 2024 as compared to the same period in 2023 was due to the reasons set forth above, primarily an increase of $80.3 million in interest expense, including non-cash amortization of the debt discount related to the refinancing and issuance of our Term Loan (as defined below) in the fourth quarter of 2023.
Net loss from discontinued operations
The following table summarizes our net loss from discontinued operations for the years ended December 31:
Change
$
%
(in thousands)
Net loss from
discontinued operations
$
(30,587
)
$
(49,813
)
$
19,226
38.6
%
The decrease in net loss from discontinued operations for the year ended December 31, 2024, as compared to the same period in 2023, was primarily due to the impacts of credit losses and impairment charges at our Automotive subsidiary in the prior comparative period because of the Proterra bankruptcy in August 2023. This was partially offset by the impacts of the divestiture of our Automotive subsidiary in June 2024, which resulted in approximately $19.7 million of asset impairment charges related to property, plant and equipment, and $6.3 million of loss on the sale of discontinued operations.
Year Ended December 31, 2023 Compared to Year Ended December 31, 2022
For a comparison of our results of operations for the years ended December 31, 2023 and 2022, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations-Results of Operations” included in Part II, Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2023, filed with the SEC on February 22, 2024 and incorporated herein by reference.
LIQUIDITY AND CAPITAL RESOURCES
In November 2021, we entered into a Series A Preferred Stock Purchase Agreement with Oaktree Power Opportunities Fund V (Delaware) Holdings, L.P., OPPS TPIC Holdings, LLC, and Oaktree Phoenix Investment Fund L.P. (collectively, the Purchasers), pursuant to which we issued and sold to the Purchasers 350,000 shares of Series A Preferred Stock, par value $0.01 per share, for an aggregate purchase price of $350.0 million. We used $181.2 million of the net proceeds from the issuance and sale of the Series A Preferred Stock to repay all outstanding indebtedness under our previous senior secured credit facility and terminated such credit facility. The remainder of the net proceeds were used for general corporate purposes. In connection with the transaction, we also issued warrants to purchase 4,666,667 shares of common stock at an exercise price of $0.01 per share to the Series A Preferred Stockholders. In August 2022, the Series A Preferred Stockholders exercised the outstanding, fully vested warrants at a price of $0.01 per share to purchase an aggregate of 4,666,667 shares of common stock on a cashless basis, resulting in the net issuance to the Purchasers of an aggregate of 4,664,155 shares of common stock. On December 14, 2023, we entered into the Credit Agreement and a Common Stock Purchase Agreement with the Purchasers, pursuant to which all of the outstanding shares of Series A Preferred Stock, along with $86.0 million of accrued and unpaid dividends on the Series A Preferred Stock, were exchanged for the $393.0 million Term Loan (the Term Loan) and the issuance of 3,899,903 shares of common stock. The Term Loan contains certain covenants and rights including, but not limited to, amount of indebtedness, capital expenditure limitations, a U.S. cash on hand balance requirement of $50.0 million through maturity. See Note 13 - Debt and Note 16 - Mezzanine Equity to the
Consolidated Financial Statements in Part II, Item 8 of this Annual Report on Form 10-K, for further discussion on the Series A Preferred Stock Purchase Agreement.
Our primary needs for liquidity have been, and in the future will continue to be, capital expenditures, purchases of raw materials, new facility startup costs, the impact of transitions, working capital, debt service costs, warranty costs and restructuring costs associated with the optimization of our global footprint. Our capital expenditures have been primarily related to machinery and equipment for new facilities or facility expansions. Historically, we have funded our working capital needs through cash flows from operations, the proceeds received from our credit facilities and from proceeds received from the issuance of stock. We had net proceeds under our financing arrangements of $52.7 million for the year ended December 31, 2024 as compared to net proceeds of $124.6 million for the year ended December 31, 2023. As of December 31, 2024 and 2023, we had $616.6 million and $485.2 million in outstanding indebtedness, net of debt issuance costs and discounts, respectively. As of December 31, 2024, we had an aggregate of $25.2 million of remaining capacity of cash and non-cash financing, including $19.5 million of remaining availability for cash borrowing under our various credit facilities. Based upon current and anticipated levels of operations, we believe that cash on hand, access to and currently available credit facilities and cash flow from operations will be adequate to fund our working capital and capital expenditure requirements and to make required payments of principal and interest on our indebtedness over the next twelve months.
At December 31, 2024 and 2023, we had unrestricted cash and cash equivalents totaling $196.5 million and $161.1 million, respectively. The December 31, 2024 balance included $59.0 million of cash located outside of the U.S., $53.2 million in Türkiye, $1.8 million in India, $2.3 million in Mexico and $1.7 million in other countries. The December 31, 2023 balance included $45.0 million of cash located outside of the U.S., $40.6 million in Türkiye, $1.9 million in India, $1.2 million in Mexico and $1.3 million in other countries. In addition to these amounts, at December 31, 2024 and 2023, we had unrestricted cash and cash equivalents related to our discontinued operations of $1.5 million and $0.9 million, respectively, all located outside of the U.S.
We are not presently involved in any off-balance sheet arrangements, including transactions with unconsolidated special-purpose or other entities that would materially affect our financial position, results of operations, liquidity or capital resources, other than our accounts receivable assignment agreements described below. Furthermore, we do not have any relationships with special-purpose or other entities that provide off-balance sheet financing; liquidity, market risk or credit risk support; or engage in leasing or other services that may expose us to liability or risks of loss that are not reflected in the consolidated financial statements and related notes.
Our segments enter into accounts receivable assignment agreements with various financial institutions. Under these agreements, the financial institution buys, on a non-recourse basis, the accounts receivable amounts related to our segment’s customers at an agreed-upon discount rate.
The following table summarizes certain key details of our accounts receivable assignment agreements in place as of December 31, 2024:
Year Of Initial Agreement
Segment(s) Related To
Current Annual Interest Rate
Mexico
SOFR plus 0.26%
EMEA
EURIBOR plus 1.95%
India
SOFR plus 0.26%
U.S.
SOFR plus 0.29%
Mexico
SOFR plus 0.29%
EMEA
EURIBOR plus 1.97%
As the receivables are purchased by the financial institutions under the agreements noted above, the receivables are removed from our consolidated balance sheet. During the years ended December 31, 2024 and 2023, $648.2 million and $1,026.1 million, respectively, of receivables were sold under the accounts receivable assignment agreements described above.
Cash Flow Discussion
The following table summarizes our key cash flow activity for continuing and discontinued operations for the years ended December 31:
$ Change
(in thousands)
Net cash provided by (used in) operating activities
$
12,498
$
(80,972
)
$
93,470
Net cash used in investing activities
(26,201
)
(23,301
)
(2,900
)
Net cash provided by (used in) financing activities
50,964
121,994
(71,030
)
Impact of foreign exchange rates on cash, cash
equivalents and restricted cash
(2,415
)
2,023
(4,438
)
Net change in cash, cash equivalents
and restricted cash
$
34,846
$
19,744
$
15,102
Operating Cash Flows
Net cash provided by operating activities increased by $93.5 million for the year ended December 31, 2024 as compared to the same period in 2023 primarily due to a $59.5 million increase in gross contract liabilities related to customer advances for long-lead production materials, advances for line startup and transitions, and to support transitioning to a 24/7 operating cycle at our Mexico facilities, and a $25.3 million decrease in gross contract assets related to reductions in work-in-process inventory and the timing of amounts billed to customers for startup and transition fees. The increase in cash provided by operating activities was also due to higher payments in the first quarter of the prior comparative period related to restructuring activities associated with the shutdown of our China operations. This was partially offset by an increase in cash paid for interest and other working capital changes in the current year compared to the prior period.
Investing Cash Flows
Net cash used in investing activities increased by $2.9 million for the year ended December 31, 2024 as compared to the same period in 2023 primarily due to $12.8 million of proceeds associated with the sale of our Taicang, China facility that were received in the prior year. This was partially offset by a decrease in capital expenditures of $9.9 million. The decrease in capital expenditures was due to the construction of wind turbines in the prior period to provide renewable energy to our manufacturing facilities in Türkiye, partially offset by increased capital expenditures in Mexico in the current year to support startup and transitions.
We anticipate fiscal year 2025 capital expenditures of between $25 million to $30 million. We have used, and will continue to use, cash flows from operations, the proceeds received from our credit facilities and the proceeds received from the issuance of stock for the continued investment in our existing manufacturing facilities.
Financing Cash Flows
Net cash provided by financing activities decreased by $71.0 million for the year ended December 31, 2024 as compared to the same period in 2023 primarily due to the proceeds from the Notes in the prior comparative period, partially offset by increased borrowings under our Türkiye and India working capital facilities in the current period.
For a discussion and comparison of our cash flows for the years ended December 31, 2023 and 2022, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations-Results of Operations” included in Part II, Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2023, filed with the SEC on February 22, 2024 incorporated herein by reference.
Our Indebtedness
For a discussion of our indebtedness, refer to Note 13 - Debt, of the Notes to Consolidated Financial Statements in Part II, Item 8 of this Annual Report on Form 10-K.
Other Contingencies
For a discussion of our legal proceedings, refer to Note 18 - Commitments and Contingencies - Legal Proceedings, of the Notes to Consolidated Financial Statements in Part II, Item 8 of this Annual Report on Form 10-K.
The wind blades and other composite structures that we produce are subject to warranties against defects in workmanship and materials, generally for a period of two to five years. We are not responsible for the fitness for use of the wind blade or the overall wind turbine system. If a wind blade is found to be defective during the warranty period as a result of a defect in workmanship or materials, among other potential remedies, we may need to repair or replace the wind blade (which could include significant transportation and installation costs) at our sole expense. At December 31, 2024 and 2023, we had accrued warranty reserves totaling $38.8 million and $37.5 million, respectively.
As of December 31, 2024, we had no material operating expenditures for environmental matters, including government imposed remedial or corrective actions, during the year ended December 31, 2024.
CRITICAL ACCOUNTING POLICIES AND ESTIMATES
Our discussion and analysis of our financial condition and results of operations are based upon our consolidated financial statements, which have been prepared in accordance with GAAP. The preparation of these consolidated financial statements requires us to make estimates and judgments that affect the reported amount of our assets, liabilities, revenue and expenses and related disclosure of contingent assets and liabilities. We evaluate our estimates on an ongoing basis, including those related to revenue recognition and warranty expense. We base our estimates on our historical experience and on various other assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making the judgments we make about the carrying values of our assets and liabilities that are not readily apparent from other sources. Because these estimates can vary depending on the situation, actual results may differ from the estimates.
We believe the following critical accounting policies affect our more significant judgments used in the preparation of our consolidated financial statements.
Revenue Recognition. The majority of our revenue is generated from supply agreements associated with manufacturing of wind blades and related services. We account for a supply agreement when it has the approval from both parties, the rights of the parties are identified, payment terms are established, the contract has commercial substance and the collectability of consideration is probable. Our manufacturing services are customer specific and involve production of items that cannot be sold to other customers due to the customers’ protected IP.
Revenue is primarily recognized over time as we have an enforceable right to payment upon termination and we may not use or sell the product to fulfill other customers’ supply agreements. Because control transfers over time, revenue is recognized based on the extent of progress towards the completion of the performance obligation under the cost-to-cost input measure of progress as this method provides the best representation of the production progress towards satisfaction of the performance obligation. Under the cost-to-cost method, progress and the related revenue recognition is determined by a ratio of direct costs incurred to date in fulfillment of the performance obligation to the total estimated direct costs required to complete the performance obligation.
Determining the revenue to be recognized for services performed under our supply agreements involves judgments and estimates relating to the total consideration to be received and the expected direct costs to complete the performance obligation. Our estimates of variable consideration and determination of whether to include estimated amounts in the transaction price are based largely on an assessment of our anticipated performance and all information available to us at the time of the estimate and may materially change as additional information becomes known.
Under the cost-to-cost method, contract assets established primarily relate to our rights to consideration for work completed but not billed at the reporting date on our supply agreements. The contract assets are transferred to
accounts receivable when the rights become unconditional, which generally occurs when customers are invoiced upon the determination that a product conforms to the contract specifications.
See Note 1 - Summary of Operations and Summary of Significant Accounting Policies - (c) Revenue Recognition of the Notes to Consolidated Financial Statements in Part II, Item 8 of this Annual Report on Form 10-K, for further discussion of our accounting policies related to revenue recognition, including accounting policies surrounding our non-manufacturing related services.
Warranty Expense. The wind blades we manufacture are subject to warranties against defects in workmanship and materials, generally for a period of two to five years. We are not responsible for the fitness for use of the wind blade in the overall wind turbine system. If a wind blade is found to be defective during the warranty period as a result of a defect in workmanship or materials, among other potential remedies, we may need to repair or replace the wind blade at our sole expense. We provide warranties for all of our products with terms and conditions that vary depending on the product sold. We may offer extended warranties to our customers in limited situations. We record warranty expense based upon our estimate of future repairs using a probability-based methodology that considers previous warranty claims, identified quality issues and industry practices. Once the warranty period has expired, any remaining unused warranty accrual for the specific products is reversed against the current year warranty expense amount, provided that the warranty accrual for other products whose warranty period has not yet expired is sufficient to cover the estimated cost of future repairs for those other products.
Our estimate of warranty expense requires us to make assumptions about matters that are highly uncertain, including future rates of product failure, repair costs, availability of materials, shipping and handling, and de-installation and re-installation costs at customers’ sites, among others. When a potential or actual warranty claim arises, we may accrue additional warranty reserves for the estimated cost of remediation or proposed settlement. During the years ended December 31, 2024, 2023 and 2022, we accrued additional warranty expenses of approximately $22.9 million, $42.7 million and $7.2 million, respectively, beyond the normal warranty expense described above related to the remediation of specific wind blade models. Changes in warranty reserves could have a material effect on our consolidated financial statements. For example, as of December 31, 2024, a hypothetical change of 10% in the accrual rate of our warranty reserve would have resulted in a change to our warranty reserve of approximately $5.3 million.
Recent Accounting Pronouncements
For a discussion of recent accounting pronouncements, see Note 1 - Summary of Operations and Summary of Significant Accounting Policies of the Notes to Consolidated Financial Statements in Part II, Item 8 of this Annual Report on Form 10-K.

---

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Item 7A. Quantitative and Qualitative Disclosures About Market Risk
We are exposed to market risk in the ordinary course of our business. These market risks are principally limited to changes in foreign currency exchange rates and commodity prices.
Foreign Currency Risk. We conduct international manufacturing operations related to our continuing operations in Mexico, Türkiye and India. Our results of operations are subject to both currency transaction risk and currency translation risk. We incur currency transaction risk whenever we enter into either a purchase or sale transaction using a currency other than the local currency of the transacting entity. With respect to currency translation risk, our financial condition and results of operations are measured and recorded in the relevant functional currency and then translated into U.S. dollars for inclusion in our consolidated financial statements. In recent years, exchange rates between these foreign currencies and the U.S. dollar have fluctuated significantly and may do so in the future. A hypothetical change of 10% in the exchange rates for the countries above would have resulted in a change to loss from our continuing operations of approximately $17.9 million for the year ended December 31, 2024.
Commodity Price Risk. We are subject to commodity price risk under agreements for the supply of our raw materials. We have not hedged our commodity price exposure. We generally lock in pricing for our key raw materials for 12 months which protects us from price increases within that period. As many of our raw material supply agreements have meet or release clauses, if raw materials prices go down, we are able to benefit from the reductions in price. We believe that this adequately protects us from increases in raw material prices in the near term and also enables us to take full advantage of decreases.
Resin, resin systems and carbon fiber are the primary commodities for which we do not have fixed pricing. Approximately 52% of the resin and resin systems, and approximately 73% of the carbon fiber, we use is purchased under contracts either controlled or borne by two of our customers and therefore they receive/bear 100% of any increase or decrease in resin and carbon fiber costs further limiting our exposure to price fluctuations. With respect to our other customer supply agreements, our customers typically receive approximately 70% of the cost savings or increases resulting from a change in the price of resin, resin systems and carbon fiber. Taking into account the contractual obligations of our customers to share with us the cost savings or increases resulting from a change in the current forecasted price of resin, resin systems, and carbon fiber, we believe that a 10% change in the current forecasted price of resin, resin systems and carbon fiber for the customers in which we are exposed to fluctuating prices would have an impact to income from continuing operations of approximately $5.5 million for the year ended December 31, 2024.
Interest Rate Risk. As of December 31, 2024, all outstanding working capital loans, secured and unsecured financing and finance lease obligations are fixed rate instruments and are not subject to fluctuations in interest rates.

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ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Item 8. Financial Statements and Supplementary Data
The financial statements required to be filed pursuant to this Item 8 are appended to this Report. An index of those financial statements is found in Part IV, Item 15 of this Annual Report on Form 10-K.

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ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
None

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ITEM 9A. CONTROLS AND PROCEDURES
Item 9A. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
We maintain disclosure controls and procedures that are designed to provide reasonable assurance that information required to be disclosed in our reports under the Exchange Act is recorded, processed, summarized, and reported within the time period specified in the SEC’s rules and forms and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.
As required by Rule 13a-15(b) promulgated under the Exchange Act, our management, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the design and operating effectiveness as of December 31, 2024 of our disclosure controls and procedures, as defined in Rule 13a-15(e) promulgated under the Exchange Act. Based on this evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of December 31, 2024.
Management’s Report on Internal Control Over Financial Reporting
As required by Rules 13a-15(f) promulgated under the Exchange Act, our management is responsible for establishing and maintaining adequate internal control over financial reporting to provide reasonable assurance regarding the reliability of our financial reporting and the preparation of financial statements for external purposes in accordance with U.S. generally accepted accounting principles. Management assessed the effectiveness of our internal control over financial reporting as of December 31, 2024. Management based its assessment on criteria established in Internal Control-Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Management's assessment included evaluation of elements such as the
design and operating effectiveness of key financial reporting controls, process documentation, accounting policies and our overall control environment. Based on this assessment, management has concluded that our internal control over financial reporting was effective as of December 31, 2024 to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external reporting purposes in accordance with U.S. generally accepted accounting principles. We reviewed the results of management's assessment with the Audit Committee of our Board of Directors.
Our internal control over financial reporting as of December 31, 2024 has been audited by KPMG LLP, an independent registered public accounting firm, as stated in their report which is included herein.
Changes in Internal Control Over Financial Reporting
There have been no changes in our internal control over financial reporting during the three months ended December 31, 2024, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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ITEM 9B. OTHER INFORMATION
Item 9B. Other Information
Not applicable.

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ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
Item 10. Directors, Executive Officers and Corporate Governance
The information required by this Item is incorporated by reference to “Business - Information about our Executive Officers” included in Part 1, Item 1 of this Annual Report on Form 10-K and the information that will be contained in our proxy statement related to the 2025 Annual Meeting of Stockholders, which we intend to file with the SEC within 120 days of the fiscal year ended December 31, 2024.

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ITEM 11. EXECUTIVE COMPENSATION
Item 11. Executive Compensation
The information required by this Item is incorporated by reference to the information that will be contained in our proxy statement related to the 2025 Annual Meeting of Stockholders, which we intend to file with the SEC within 120 days of the fiscal year ended December 31, 2024.

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ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
The information required by this Item is incorporated by reference to the information that will be contained in our proxy statement related to the 2025 Annual Meeting of Stockholders, which we intend to file with the SEC within 120 days of the fiscal year ended December 31, 2024.

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ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Item 13. Certain Relationships and Related Transactions, and Director Independence
The information required by this Item is incorporated by reference to the information that will be contained in our proxy statement related to the 2025 Annual Meeting of Stockholders, which we intend to file with the SEC within 120 days of the fiscal year ended December 31, 2024.

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ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES
Item 14. Principal Accountant Fees and Services
Our independent registered public accounting firm is KPMG LLP, Auditor Firm ID: 185.
The information required by this Item is incorporated by reference to the information that will be contained in our proxy statement related to the 2025 Annual Meeting of Stockholders, which we intend to file with the SEC within 120 days of the fiscal year ended December 31, 2024.
PART IV

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ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES
Item 15. Exhibits and Financial Statement Schedules
(a)Financial Statements and Schedules
The financial statements listed in the accompanying Index to Consolidated Financial Statements are filed as part of this Annual Report on Form 10-K. All financial statement schedules have been omitted as the required information is not applicable or is not material to require presentation of the schedule, or because the information required is included in the Consolidated Financial Statements and notes thereto of this Annual Report on Form 10-K.
(b)Exhibits
See Exhibit Index.