TPI Composites (TPIC) 27 Feb 202019 Q4 Earnings call transcript

Good afternoon and welcome to TPI Composites' Fourth Quarter and Full Year 2019 Earnings Conference Call. Today's call is being recorded, and we have allocated 1 hour for prepared remarks and Q&A. At this time, I'd like to turn the conference over to Christian Edin, Investor Relations for TPI Composites. Thank you.

You may begin.

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

reports We during will annual assumptions today's to Commission, and be on XX-K on conference forward-looking any making latest any discussed materially forward-looking any statements call which during in statements forward-looking our this because found and Actual our could comments the and if Exchange which in will the statements. can we of and reports Securities on from uncertainties. factors undertake with duty our of current our this website release assumptions, are incorrect or Form to and earnings file subject Commission the key or that news our risks each www.tpicomposites.com. of results made update Exchange be differ not filings We are expectations Securities call with based in other do

Today's measures. presentation also includes financial references to non-GAAP

the the GAAP financial You reconciliations measures comparable the refer definitional slides to of historical contained and for presentation to measures. information should today's non-GAAP accompanying information in

that, turn the call Composites' CEO. over With let Steve Lockard, to me PBF

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

detail our to I Bryan this will joined by addition on President; then forward. path Q&A. of review open comment CFO. and our provide today we'll call In for the our then and financial summary call, Bill I'm Schumaker, will Siwek, Bryan up and in results Christian, On Bill the year our and

XXX% $XXX QX XX% QX and XXXX. turn over in million, adjusted good of the over results Slide of fourth XXXX delivered up with We of EBITDA increase million, very sales Please quarter $XX.X net a to X. increase

the XX% we of XXXX exercise cash over a debt senior additional and under feature delivered with of capacity increase of year and increase with our or XXXX. of total of the the sales $XX.X full over including credit million, $X.X $XX debt ended We year EBITDA billion the the of For added $XXX and million million net yesterday accordion million net facility. $XX liquidity XX% adjusted

wind windblade root world-class world XX completion our our produce XXXX to per through adjusted lines an next EBITDA gigawatts we target during under rate digits dedicated representing gigawatts have capacity gigawatts with have about installed startups facility We coming wind revenue and market of achieve of and new in under average of share around year utilization global Chennai, with annual in contract with the estimated billion transitions to have capacity the XX model year XX% With locations years over long-term and the about XX% XX and blades total of each double annual years. XX XXXX. with planning anticipated are India expect the currently we'll at several $X offshore to an gigawatts along on in we XX run late

remains critical levels to offshore the efficient the outsourcing. mass pipeline as onshore well reach for as lines Our volumes offshore with once add to strong lines provide potential

We stabilized XX%. operations and new XXXX Mexico in During plants our Matamoros, approximately market China. share including global grew globally our to we our Yongzhou,

and of new our the will Our all into startups additional that efforts operations India fully we XXXX earlier startup expect the in one in this results year plant and Chennai, planning put building began best team ever. during

support based former strengthening on through and and wind blade We We XXXX. of tooling for growth. our from GE advanced them. future Berlin extended capabilities to business Vestas each operations growing serving TBI acquired executed We with with technology agreement these our technology be to Turkey to pleased team locations development cooperatively Euros blade global materials our turbines. design, joint multiple with process development a an in in transition contract of agreement focused lines Nordex and signed in them the longer new and develop that's blades are our with to We technical

have less our We very budget. secured than better costs than overall transitions well times planned and with ramp

We in develop senior vehicle and diversified to and prototype the with and ground workforce well to produce global $XXX structure spearhead continue add experience, diversified breadth electric to million wind automotive purpose-built target as to initiative for to key as and XXXX. continue service a our adding chassis team to in added members agreement and process a and global board evolve this independence of diversity. time. over our We of of we executed an and delivery depth plan revenue our markets markets gain annual cap continue our both We directors leadership recycling and

need on long-term remain major and climate to customers building driven on buy, and want value sector the decarbonizing vehicle continue to in the fleet. more macros; the change. sustainable two affect want to Trends and electrifying capitalizing by invest investors focused positively to We by what more economics, what electric

call detailed Bill over provide the business a turn let's and more to Bill? update. market Now to

first Thanks Slide global Please and like X. wind to Pete. I'd markets. U.S. the brief update on give turn a

wind of the We energy energy. a and continue growth strong corporate We source five wind positive for year market also cost-effective drive cost levelized be will the be storage clean believe customers by reliable to four a wind, and renewable consumers like low as driven and The and with continue and to down strong by increased pleased demand future as decade demand of to the electricity continue it while state, combination utilities. over to to and the industrial of reliable and electricity as for in of industry the energy cost-effective next U.S. years. wind market additional will growth of see we net a remains decarbonization and added PTC goals the set we consumer The the transmission. the cities through solar

comments I'd now the the COVID-XX. our I made day like regarding to update at or Coronavirus Investor

our did weeks than of ago on of businesses may full this plans results in COVID-XX how impact our and or economy impact better today a Although have we global three cannot we our XXXX. we predict picture the

the and to China Our of in quarantine now up normal complete plants return process ramping in associates speed have already production our are and requirements. as we reopened

chain do production but our get supply volume the expect logistics lose Our plans will recover negatively Clearly China from to have QX we back and temporary be not resolved. impacted results the QX challenges all in gets to full if in shutdowns. place most to we in

of production can the non-China also fill increase We facilities gap. at to some our

is of Another global example where a such differentiator. footprint

impacted estimates million. be $XX will approximately down initial impact approximately we revenue know of will first of million by what quarter $XX the is by adjusted EBITDA Our be the based that today and

with XX year most the we're revenue not adjusted expect ultimate up make suppliers we as much full all the to in be will financial on share on more For as the to Bryan and details Therefore, mitigate our possible. we much are as impact impact a if as guidance. customers could XXXX now working and million the our this EBITDA bit. although adjusting

COVID-XX The challenges demand the to the will supply impact chain market wind during of overall market global on wind XXXX. some for and continue us create

ensure supply regional our alternative key consistent raw the of do of excellent strategy and to localization job of long-term and/or and supply through of agreements suppliers an However, materials. team the raw a execution supply to locations materials securing our critical global continues

of key challenges abate. logistics up in With our producing have suppliers are respect and backed to China, the done in most supply to been chain

any don't we COVID-XX. today material locations of as China in a as So issues result other anticipate or of

are fill that on initial and we to China rest Yongzhou the performance. of to we operationally, with in XXXX believe lines. QX our the Moving completed out facility lines in and We the execute drive XXXX well-positioned capacity new profitability in of facilities startup on improved the entering

the the not from one make notwithstanding We increased that we we the first of temporarily will the down. have up based quarter of today what during year lost meet to our we start customers demand two our up most if during while plants shut volume believe first will impact we half all COVID-XX the lines were know on the of and

more Matamoros, we challenges disruption stable XXXX finalized early strike our operations we We with also a entered or through a and situation including labor work to during wage our XXXX two-week weeks recently five union work XXXX without and startup in stoppages. our with negotiations Mexico the any

transitions we during well in we improve operating this overall while positioned the results the a customer. few of meeting or facility exceeding are XXXX to with demands will blade XXXX in we believe our significantly have Although location this

having are and it startup speak. have Construction team and phase of strong our strong moment we with of we nearly new experience. in and management facility XX% than near initial Chennai, is and is on as India a budget. the previously associates industrial and team experience place of more whom The very automotive manufacturing built We under balance is complete time

this additional one of be forward will confident facility soon. startups are we're adding best that of looking to and We this our executed lines

million the X With Yongzhou, X.X months. Chennai Matamoros and manufacturing of square nearly XX our addition feet the added we last over and gigawatts capacity plants of have

is in operating XXXX will be half a minimum minimum not then under contract new X, term the the larger the guarantee approximately supply Turning short volume transitions. of we it of impact that now contract from to slide and blade most two The produce China include potential value the billion. billion nor of and a XXXX up models under does for that lines XXXX we'll anticipated do include $X.X total potential X.X through we to our contract have agreements values

accelerate Moving X, now our excellence our and primary turned as cash slide levels operational flow. to quality safety, of our focus reductions throughput targeted to to on gigawatts and has drive nearing is XX free capacity global cost expansion margin to

speed cutting include times. significantly half advantage, startup turning a Our times imperatives and operating reducing in into competitive transition

and materials, improvement world-class on will opportunity continuing even recyclability ESG for technology the of manufacturability expand more transitions retain will for execution, thing balance cost-effective to our more maximize our customers scale to partnering regional and vision drive and and do customers, because in our composite down compiling drive our continue to performance. continuing not reaching build, efficient a drive raw to leverage and supply with better operational but the provide and our incentive business capacity deeply to continuity of material blades, to raw on our it design, which right us transition develop blade economics service, better turn make global Advancing costs, only enable and customers team to material of overtime it's credit our with for enable our tooling, design to

report publicly reported you will at some until and grow We an markets down operationalized The of you overall now. committed path Wind pace. time continuing of and are strong. first ago we what and and publishing our to are and see is will fundamentals markets model the but increasing be March the haven't fast-growing customers The U.S. just remain for very offered customers confident way that market. it a our trend remain around attractive business long outsourcing our serve to first many demanding of most business excited to time have a and our strong ESG We see this and globe quantities the emerging windblade potential strategy. are ESG of blades continue

to and Along customers we line with line ups. our continue invest new transitions in start existing will

in at profit above continue matured Our to our the levels or generate ability our expect. which operations expectations confidence perform we gives to us

With over me the turn that let Bryan. to call

year-over-year by XX.X% Please period as December ended wind for XXXX. of the with million increased a XX. million $XXX.X the The Net in XX% result Net as in in production Bill. Turkey. the XX, in to largely to our compared at same compared in Mexico, a increased wind months XXXX along or by through China $XXX new of a $XXX.X refer to the increased $XXX.X in driven sales increase three same to XX, three by the increase blades XXXX. Thanks number period in XXXX of produced $XXX.X December sales million XX slides million million primarily for increased was production XX.X% months blades ended to plants

compared a the decrease currency The sales to the on X.X% of with quarter the as impact net movement XXXX. for of consolidated net

period same $XX.X gross for the of X.X%. quarter and XXXX of million for $XX.X profit an total our increase Gross profit to margin increased the million,

XXXX for administrative million of $XX.X of general quarter period expenses the X% sales million or and the as compared X.X% sales. to Our or of were net $XX.X net in same

X.X% of and share in G&A Before X.X% respectively. compensation was XXXX of a based sales net QX percentage XXXX as and

XXXX. in quarter $X.X Our the [indiscernible] a $X.X quarter in primarily compared provision same in for to was to period for income same for of change jurisdictional million associated was provision taxes with million earnings The the as mix due compared as the period the to XXXX. the

loss $X.XX net above. was This XXXX. loss $X.X same in share compared for as compared $X.X was of discussed primarily loss to of in the share same quarter operating quarter the the $X.XX million results due in Diluted loss Net for period the to million was XXXX. a per in the per period to decrease

increased to during million compared EBITDA million period $XX.X the in Adjusted XXXX. $X.X to same

X.X% Our adjusted up for from EBITDA fourth in margin XXXX. was the X.X% quarter the of quarter

margin activities. in percentage points of XXX by the and transition startup primarily increase The driven basis was [up] decrease

year XXXX. blade in and to produced or billion produced $XXX.X increased by to compared million as primarily $X.X in blades in full average XXXX XXXX from the blades was in the of billion] sales to XXXX prices XXXX. more to Net year wind billion by the during of wind wind For increase billion driven selling $X.XX sales net XXXX to due compared [$X.X increased XX.X% XXXX. The X.XX XX% increased in an by models of XX.X% to compared for XXXX mix

was Gross profit up the in margin to gross the totaled profit percentage $XX.X gross margin from in period million, year X.X% decreased The and million decrease the $XX.X XXXX of from of for the our same X.X%. underutilization by due partially and in significant a the labor Mexico in Iowa strike cost. extended transportation challenges start-up at offset decrease by primarily transition our facility, driven Newton to Matamoros,

to General performance X.X% for million to or compared of our by or reduction a of a was related XXXX expenses of compensation lowered assumptions sales primarily sales and and $XX.X sales net the in driven shared plans. for certain net net $XX.X XXXX. X.X% compensation as million based decrease incentive A percentage administrative totaled

jurisdiction The for provision million for to year in taxes was compared ended XXXX. the Our increase $X XXXX as benefit of due taxes was December the million $XX.X income period XX, primarily a same to to changes to of period allowances mixed December compared the extent the to ended year XX, in as in [indiscernible] valuation the based by the and a on in impact XXXX. XXXX earnings same lesser

$XX.X income reasons million XXXX. set the year share Net XXXX for in was loss million above. as per same net income to in loss compared for primarily was to share $X.XX period XXXX. of decrease to above for the the compared of forth per $X.X Adjusted The $X.XX diluted net The was basis by and due investment or in million and increase in from was points in a of compared $XX X.X% primarily the of in million underutilization Mexico million above. increased in to as $XX.X margin Matamoros XXXX. XXXX X.X% margin a driven XXXX of $XX.X XXXX our The business component decrease in to noted XX transportation EBITDA

of Moving September We ended Total with $XX.X equivalents. cash net cash debt compared debt XX. $XXX.X to million of million of million of XX, net $XX.X and to slide outstanding $XX.X as debt and the year million XXXX.

on for while net the use of negative a cash million million. operating of For we million in from $X.X had activities $XX cash spending $XX.X flow quarter, up free CapEx quarter resulting the

free negative CapEx. had on we $XX.X flow million year the cash after million of $XX.X spending For

growth we demonstrate the under continue and we Our have from generated availability ability balance credit primarily line and to our to cash facility. of operations remains the strong with sheet our fund our

that we CapEx. have us on our revolver capital announcement the working and gives feature optionality The recorded for future exercised

approximately turn $XX continue by Slide as million impact and million. Bill monitor EBITDA we COVID-XX earlier revenue Please today of we QX to on impact to adjusted know what our approximately will noted operations. by XX, negatively Based COVID-XX $XX on the

be adjusted EBITDA approximately the For by could we to the to the adjusted million. the slightly impacted negative. up will of revenue recover Due impact year believe COVID-XX we EBITDA XX% and expect of QX to $XX be

previously year full our we guidance. provided are the of XXXX For maintaining

XX between billion million. of of of cash Utilization $XX set to impact XXX blades Startup million to between between XX% incurring associated $XXX cash Wind billion. the QX. and and XXXX the million and negative CapEx and sales of QX. million. EBITDA X,XXX. between be the and expect XX million. XX%. in per $XXX $X.XX Adjusted Non-blade expect million between capacity Due flow the XX between we CapEx expenditures cost Capital price of Approximately XXX,XXX. be free between and sales million. of will and sales of COVID-XX to We Average of XX out $X.XX net XXX,XXX blade million million flow purchases XX% with of $XX

to positive. we cash the free expect For still flow be year

With over will it we that then Steve and I up take wrap back questions. will to turn Steve? to your

Thanks Bryan.

remains Our and to onshore $XXX annual with overall global market XX% global wind approximately mission years market the wind estimated blade next billion of revenue achieved and $X in million we annual With XX to revenue transportation unchanged EBITDA establishing expect wind gigawatts gigawatts drive XX capacity global along levels. combined offshore have share. digits an of adjust over double few

We transitions, down leverage cost our all drive for for continue efficiencies and maintaining drive a global conservative to more while strong sheet. to plan buying to continue and scale speed operating during balance

to thank want our the your electrify. in please for will for with We decarbonize to I operator and line Thank that remain dedicated game open confident again and stay associates and multi-year our commitment plan for TPI today all of mission course. our questions. very to time that you their

Thank you.

We Please question Stine a session. now first ahead. Instructions] comes will Eric be Our conducting with [Operator Craig-Hallum. go question-and-answer from

back COVID-XX? because wondering lost able in those volumes. you making in part down little EBITDA your and up the curious up up you slowly between running just operations it being the for Hi locations called and it sounds that other like breaks talk your about and confidence of how revenue everyone. can I'm you've confidence that getting but it's have in just are make kind to bit out a for curious Hey if

it turn to I'll and Bryan. Yes Eric. This over is Bill

we of ramping them up. our all So your question the open is are answer process again, are in plants to

taking that said we're sure little make recommended of ahead good, have our supply if protected with procedures care but to as health of us back to associates chain We they're not well, proper what employees their of obviously is that all most schedule you quarantine. up following them production. the them are most hometowns we're the which all and from back Like they're ramping up is bringing opening back and as through in getting and are

in a not let of plants but up comment ultimately and our make have to on the may opportunity Bryan there we're mentioned comment shortfall Bryan to revenue EBITDA the you want other ramping the confident do I we back to the may any we're capacity up that. overdrive we year I'll only have. So with and as bit if of balance on

Yes.

areas As we the and then as side utilize we feel to income closely as revenue other we current over directions. on in they initiatives platform other up other we're confident basically teams and and with good with use the the adjusted side cost feel about with our side make we before we net and or plants on the customers work we'll have and that we work to find talked EBITDA other and sites see so that up able the utilize

keep we're why able that's our So same. guidance the to

some back the bit success good certain thinking of talk just of and having I got those the a of early sorts XXXX that. just localizing, things. initiatives there in and maybe a that the And supply about in materials, and you're and of way and make build to up Maybe little segue were that raw Okay. disruption materials know in the to hoping Mexico there

Yes.

and on that localization demands So for work with making sure full and one, we customers then and are going their just number what better but not the coordinated we securing and on capacity. are the out are needs year only our continuing to

the chain well job for So supply has customers as capacity we've taken different our that securing working there's that a need XXXX of a team supply of on volume the with of as we our number done great on chain initiatives collaboration.

we China potentially that XXXX. the are what in other some supply really closed I feel Again still need pretty are given challenges. chain we the that issues. in plants we've to in clear Core confident place what and for and mean at we very are of just there locations be bit we the as do XXXX done can't don't impact got major on a we I not but the challenge globe our be predict for any see to COVID-XX and or shipping other stuff know may orders what from a confident we're today remains around we spreads So our, that being supply a but where or the what on and may may confident again beyond. we've virus in have standpoint

Yes.

to adjusted this EBITDA? Okay. thing negative expect QX did say just Maybe you last me clarify for to

Yes Slightly Yes. that's correct. negative.

Okay. Thanks a lot.

Eric. Thanks

comes question ahead. go from next Paul Coster JPMorgan. Our with Please

Steve Yes. Bill Thanks and team. for and taking my question

nature obviously the XQ would a might supply handle about weigh So Can of how extent you little of you your talk and to around is with in your workforce. what what you that got they've on OEMs about COVID-XX own them talked be and think outside control beyond. dialogue and bit a because factor your it -- the a

our customers. Yes Steve. we specifics comment Paul Paul, really Thanks. around it’s on can't

I is markets. XXXX the think of and American in calendar and other lot North a demand market -- in general there's in what in

in So them. that we're that, what a for there's really can our of control with to specifics of to demand comfortable we we position serve this going of not a all in what terms as scrambling we're and Bill speak said, can But beyond to that's much we lot very pieces of as in industry-wide be as effect.

capacity? much of Can catch-up And cumulative so talk what that then, XX/X period us second means? in sort you the or get for terms to be of Okay. actually a going just presumably that working how having more you from your through you Are to going are available in quarter.

the XX/X time. work We all Yes.

All right.

that. it's quite as those that on with So, different it's on, said, schedules holidays as scheduled simple But not change.

to to customers. meet the our needs production the plan work we So, of try

we we in frankly So, might and changes that our conjunction is this with quite anticipating of customers, were that push year. out the in of some later some

XXXX. into them Push

in the maximize can we volume XXXX. for them So,

nature that in But thing just if of most fortunately year. won't happen process. manufacturing throughout the different of the have QX the volume of up our of talking we just see the that combination to we're been It'll all opportunity about. do because a make it's So, not

And of we'll beyond expectations sites, in go original what work. some our our

in the that's competent up So, making volume. why we're

to if I just Paul, And quick could. add real

though You've we're to are that. continue drive cycle larger, seen getting us continuing blades do even down to times

So, whenever we that, we through do as capacity of additional create quarter-by-quarter year. the kind go we

used So, the "overdrive" that's way more of cycle for as and all capacity time part probably creating about to capacity to Bill it the more we're the and word we're the in that using of reductions think year. you help that going makeup with through to throughout be

Good. And costs my on sort expedited last question is the really of here.

more everyone's any variables upon You fast play gauging is those that whether there. not catch-up area period. Can see for trucks just really and right, to means comment to going points a mentioned or and you storage more you want

Yes.

as with our from not more so our of I maybe the our as it et far cost discussion to some them it as of to think agreements supplier for location. cetera transportation our lies, think to that’s from relates much. want customer's others have standpoint, from have blades pass as But there expediting their as customers, we be doesn't a plants standpoint Again will I share on we costs.

you. thank right, All

Okay. Paul. Thanks,

Paul. Thanks,

Please The Molchanov next with question comes ahead. from go James. Raymond Pavel

taking question. for Thanks my Yes.

revenue be compared to the on QX 'XX? had or A QX down virus. Matamoros up you more Just expect one and the the disruption, the year now of Senvion ago we Do to it's guidance.

other up revenue from be based we are Bryan. plans is QX this this still of expect Matamoros Yes, on to the Yes, year. and Yangzhou better 'XX performing the

that's. So,

of whether of still to the okay. -- the from And is same what is mix about non-blade terms me be the in versus the was Analyst XXXX Day? tell Understood, talked and the guidance QX you the can any blade of going mix in what at you

Yes.

far as on we don’t disclose quarterly that a the split, As basis.

the K. have financial Monday. it will our be on released when will revenue You our split available on we

as As guidance. that far changed and basically guidance revenue revenue, has on changing not this blade provided non-blade and we as

very you, much. Thank Okay.

Thanks, Pavel.

Our Instructions] and question with Jeff ahead. [Operator from Cowen go comes Company. next Osborne Please

Yes, my good afternoon couple guys. on questions A of end.

that mentioned but figure I you the of Is number think you in lines share it strong the didn’t could something the of pipeline. I us? hear with was the pipeline

Yes, Jeff.

talked we we're transitioning pipeline is. last what about of number of from the lines As gigawatts the year,

from the pipeline contract far away as gigawatts and It what the line from about strong. of So, past remains in changed we're numbers and talking we the under but more capacity, hasn’t about utilization. as discussion gigawatts significantly talked moving

But it the does interesting strong, we're remain number. working still actively opportunity. Pretty

Jeff, Steve. it's And

to Just it. to add

think repeated times I you If Chennai. here, basically about are know big few numbers finishing we but a out we've these picture

XX roof. gigawatts of have under We floor space

lines We have turn four more call more XX in India, contract, into gigawatts to four so in that China, order lines in yet it. it's under

slow over the and percentage adequate growth smart time get just really out cash will, fill. point how when XX where additions couple years that made. if the XX the to you topline free XX to and and of XX harvest flow. there expect is really then contract, more it's rooftop on a those as into more under to about turn So, lines under show pipeline to than do by build and there to But lines basis And be then we've to next we said,

last So, as the you could we onshore in emergence lines delay China now with exactly in of could And made. said a how imagine see tariffs there the pipeline. in a lines both year, October of are there offshore might quickly China some and is from before, you be around bit 'XX,

what picture a change is you. to gigawatt the Bill moving does said move. us it for told as we just change to the utilization does It So, profile big accomplish overall demand

the maybe like was relative impression at over And under have there I potential is on That's it a lines? just China fully helpful. but always where any you elected offshore Matamoros, there maybe or offshore that is four you but turnoffs facility follow-up discussion. the the the occupied would that to sounds

current Yes, Matamoros the occupied. facility is fully

nearby You world. where be the imagine exist best likely for over could where blade we've access, site to before and I or production we we've offshore all think immediate the that where shared we blades ship locations are for to can water got us think about already

be So, low-cost and could could be certainly could China. Mexico, hubs India, Yangzhou, be

in the on We locations And on lot build of existing space cost growth at offshore, to interest opportunity. real to issue have in would remarks, is other there our be have as a the of said space in Yangzhou. lot competitive. we water there is prepared the a world-class We offshore, in and order

got it's what a out is the one on. where mass a that hubs our little still enough to volumes getting to really then working market. We of There we're get a a pull more or of big but in the point lot to bit world-class to that dedicated up serve one ours, market our that's like press operate off point critical hubs, world-class to and model your

Got I quick about it. questioning. clients are said that's two other just it,

XX So, XX. I the either XX% heard could you you can the only the right, potentially back revenue you but and the coronavirus one you so you of said five get mentioned of the lose XX EBITDA. of If EBITDA,

Just I margins European with that of to statistics process the misheard lack you maybe trying the or this trying the approach detrimental to guess. gain understand or were

our up and on million then the working then would QX and we we're XX for XX be year heard with to adjusted million. you've impact the Again, closely the No, EBITDA guidance, gave customers.

we've keep of the has that do labor to to that Some cost force going. additional QX with in incurred

safety just these other the of throughout of for cost associates and because then And some PP&E our move things facilities. the you other year at

either to the any your Got that is the Senvion one early initiatives highlight I last know it's Analyst it, you in or And time. is speed you Day I both indication there had Any deck want cycle other Bryan. and increase today's then the just R&D use through team to at that advantages. that's early but helpful

you're that Is to able and that out actually playing down drive cost?

Yes.

So, in right in going of already Investor laid got Where of transition. ask out some the we've been. ahead and have And a different transitions on our what tracked with now and lines are a Adrian first mess phases at the we quarter. the we're you'll base Day well

the to of reduction goal So, not we're on this way I well if the think year better. XX%

and place plan be are the the of bear new fruit. indications going kind early we the in the is answer approach the that to to put is transitions So,

It's hear, you. thank good to bro.

Jeff. Thanks, Yes.

Jeff. Thanks,

Ellison Our from Instructions] with comes next [Operator Please go ahead. Stanley. Morgan question Ethan

nine two or I'm expiring I not process through If XXXX. you me. think somehow? are quick guys, Could there in lines with extending GE talk just of contracts contracts these are or Hey mistaken the ones manufacturing that walk them from with backfilling

Yes obviously an Ethan, that's important thanks. It's those extend and Steve. this need objective We do year. for contracts to

are perhaps market. I Mexico and U.S. lines the of primarily the think serves Mexico builds. Iowa volume in XX% serving those

of competitiveness U.S. majority Mexico, Mexico to particularly serving strong. comes strong, the the U.S. market vast extremely is of the U.S. The is market

to So, which get confident in that done us timeframe. in this it's we're quite able important being you're an for objective right

follow-up then, you and better ramp planned or that transition this on the just talked activity a expected the had than perfect. Okay, for. six In months. the And maybe you've about trending we're times taking past, about

year? the by clarify to the end just XX% if expecting of are about So, improvement, take seeing see three transitions we're for we months to

Yes.

nature I So, by a as the is earlier transition, the looking Again, it the on year, this Ethan. of process yes, end of good. are very maybe. results But and depends said the

So, be high-end I land of come more to bit would from can a that. in those months three both six back it the down it be that months, can but expect

by year is and good expect end the answer year. yes the throughout to we So, of see results the the

all. Thanks, Okay.

Ethan. Thank you. Thanks,

like would Thank turn to floor now comments. over the to for closing you. management I

Yes.

update progress. for all you to as look your joining Thanks, call continued in continuing we thanks TPIC. forward much. for interest today So, make We our and so to

And This concludes you may you, disconnect thank at conference, time. participation. lines for your this today's your