TPI Composites (TPIC) 22 Feb 232022 Q4 Earnings call transcript

Good afternoon, and welcome to TPI Composites' Fourth Quarter and Full Year 2022 Earnings Conference Call. Today's call is being recorded.

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

begin. may You

operator. Thank you,

to like quarter to be TPI would results and A detailed to are our everyone can forward-looking which welcome full found Exchange year was Commission, applicable discussion filings and website, materially. fourth subject that latest on and our which call We'll during Composites' in and XXXX reports uncertainties, differ statements could tpicomposites.com. with I actual this to of risks earnings making risks cause included the Securities be call.

Today's measures. presentation non-GAAP will include references to financial

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

In our Yangzhou, December, business to facility this committed restructuring China. December note plan and connection footprint. production a our organization in we addition, our in China shut to now financial In please operation. that to rebalance our our we down ceased operations with In XX, plan manufacturing discontinued global optimize plan, XXXX, manufacturing and of statements include as a

historical consolidated of results. operations in effect balance presented in a entirety will of and and comprise statements manufacturing the operations have reporting discontinued of results on consolidated reporting sheets. Asia Asia segment Our business has footprint This operations a segment. the China meaningful Accordingly, our as our global shutdown financial been our consolidated

combination of and discuss we operations we year-over-year will As continuing comparisons, the please operations. to refer discontinued note,

CEO. to Siwek, With me that, TPI Composites' call let President and the Bill turn over

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

our Miller, with Christian, to addition In here Ryan I'm CFO.

then automotive and then including open full energy the for will fourth more the our broadly. review results, cover year call our Today, service results, our quarter chain and our financial global our and I'll then Ryan we'll market Q&A. wind supply operations, businesses, and discuss

Slide turn please So to X.

a very possible. made total of XX,XXX We quarter, extremely I'm the challenging fourth in proud we delivered associates $XX.X million. environment million our sales this finished that EBITDA year adjusted $XXX.X of and strong the of over For and dedicated

Our focus delivery fourth even cost, financial of difficult EBITDA environment. demonstrates X.X% quality, strong can safety, results a deliver relentless adjusted operating and margin in quarter that a on

sales year over steps slight and long-term a XXXX, XXXX in of success. we challenges and EBITDA the billion, to delivering gigawatts Considering while delivered are or $XX.X our X.X%, net the set execution full of faced of for the adjusted $X.XX with pleased taking For industry increase approximately XX.X up many XXXX, we blades. while results us million

some We Now of a We lines our summary in extended ENERCON XXXX. through key of lines Türkiye and Mexico successes GE XXXX. XXXX. with actions with quick in XX in extended through X

with that Iowa. facility our also TPI the GE enabled XXXX. Newton, We in expected and in extension options best start signed agreement, GE agreement in secure us serve to lease competitive manufacturing of GE's market production XX-year with to be will the U.S. developing a an manufacturing to commitments Under blade

with higher discussions provide capacity partnering us better that framework along the global manufacturing more capacity geographies utilization a serve along long-term of Vestas flexibility for utilization them, to agreement We flexibility long-term with for while with provide are to to aims announced in more in we for also enabling with our and We that GE capacity. GE, agreement a partner facility Vestas.

the in in X contract. remaining that while manufacturing to And other add in lines XXXX, of Nordex effectively Matamoros with Türkiye X the lines from X through deal term new a to agreed lines addition, X will India, in XXXX. be extended through the lines extend losses the limiting we'll of have X We over

We We a our activity our OEM last-mile automotive business components. our The have and far year-over-year a X covered programs total grew of $XX remains pack long-term structures have potential revenue net by contracts our now and XX% programs percent of growth with XXXX, during commercial for billion. service and XX.X%, and obviously business vehicles, operations markets. our in production services XXXX, by from continuing for international while delivery With X which customer, Class entering cab new priority, serial revenue nearly several business now expect excludes thus with all grew growth we in the XXXX for we X along by China. nearing an wind XX-plus vehicle development prototypes delivery battery and orders

success commercial customer. we lower bus volumes Notwithstanding we and sales expected our evaluating alternatives accelerate our strategic flat given solid of had we to in built enable XXXX, the are the the automotive us commercial business. in recent this success With year-over-year our business, from to expect growth to foundation be we

the and respect material and fourth headcount during quarter, announced and closing with China and operations additional Finally, restructuring in charges functions. our we recorded to our other facilities impairment corporate manufacturing reductions

structural in of $XX realized of the approximately X years. be while efficiencies savings over result to $XX XXXX over beyond, million to actions on and to in per we past focus year, which drive achieved continuing these savings consistently productivity expect annual cost million operational We to have

such initiatives, to to on Slide aimed green nearly of speeding all XXXX, IRA in EU, policies robust and awaits key proposed U.S. as clarity the plan the and European and up deal In while blade previous Green on Green our technologies, industrial the expansion into components shipments implementation of XX% REPowerEU. Deal such industry a energy Moving transition more building formal the as We were at while guidance Europe. renewable X. year, as the of XXXX see recently the the in around related the

implementation us, growth the independence accelerate an plan and energy we the of for Deal industrial the and security the is growing need it EU for region. important expect in to Green in the and market So our

quick update. a operations Now global for

still profitability in Our from plants China in and newest of challenged are year. Mexico, Juarez, cost our and fourth India Matamoros quarter and full in for ahead in plan the performed Türkiye, a the Operations facility standpoint.

the the contract. with reduce have to working to through quarter, our agreement we come of discussed end losses facility we impact will this we As an in the that and limit last our customer were

extremely blade well. our however, performed operations Overall, have

it As continues better situation supply but than be years. to our the relates significantly challenging, chain, last the X to

look XXXX. XXXX, compared XXXX into out to be our we have down contract in structure expect for With a to source materials overall shared expect approach we raw pricing to net we that benefit As we over XXXX. and pain-gain

Turning Slide X. to

industry contractual formal as XXXX. Given stability with and relates a to chain issuing more supply the guidance bit especially customers, arrangements our we're in it in

continuing per net double-digit up due are expect sales up U.S. well sales as with We as from of operations $X.X high blade compared in sales as primarily be with increased billion demand XXXX to approximately to $X.X low blade. to increasing, to billion, being $X,XXX percentage between the ASPs single

the that We related and costs higher entirely our XX% our about in of continuing cannot improved XXX includes from points to utilization in on of guidance Nordex, and This passed flow for wage sales impact adjusted as will of EBITDA offset structural expect facility. margin approximately XX% be with flat the to revenue margin excess and customers. Matamoros, to to Mexico to margin our contract-related volume negative operations be be inflation basis of cost on adjusted XXX EBITDA range XXXX savings adjustments by

this operations. that for is note guidance continuing Please

of For sales million. discontinued no loss expect operations, approximately adjusted $X and we expect an EBITDA

in expect XXXX of Lastly, XXXX, which expenditures the half we about we for as increase of start infrastructure in investing million is $XX expect U.S. an the over XXXX. to market second capital in

a for that near have IRA as independence While around likely demand we focus given EU's final more in industrial Green face will we wind energy continued security the move on energy as XXXX, we we that as well globally. Deal implementation industry of the clarity the recognize the remain the guidance, term, closer and wind challenges confident plan, strengthen continues the will to to

our global along key remains unique TPI position to suppliers with partnerships to demand accelerate our as wind profitably in geographies and the with a believe with strong We begins grow footprint in again. for customers strategic

X. billion, the cash EBITDA our excludes expanding revenue years, existing With free in approximately single-digit margin over Matamoros. as X the we a which XX eclipse the that high adjusted this lines in footprint of Turning Nordex of couple of said, flow sales percent digits, without to $X and yielding mid-single next globally, expect lines a wind to our Slide

to year or per expect of by fully end XX capacity. XX lines sets dedicated the these which X,XXX We gigawatts have XXXX, us of about give will

With that financial turn let our to the me said, call to review over results. Ryan

Thanks, Bill.

Please turn to Slide XX.

in process organization down ceased December production China. business As we December this are XX, manufacturing in at Christian of as to restructuring operations connection optimize to facility XXXX, manufacturing earlier, our and our rebalance global our footprint. our the all our shutting Yangzhou, with we mentioned China of we plan, of XXXX, In plan and committed in

presented result, So in of as have our as results operations reporting a our statements. segment financial historical discontinued Asia the been

will All total comparisons same period and discontinued discussed in be today compared continuing for a basis on operations to year-over-year XXXX. the

are results, total and as the entirety including We operations. operated continuing these aligned of with China the business comparisons believe in for we XXXX expectations making investors' and are discontinued total

an compared to the our XXXX, December same million December XXXX, primarily average continuing An in For in X as for for mix XXXX, higher the in X facilities compared wind increase $XXX.X Matamoros, as produced blade operations driven at ended the volume due in the and XX, sales at XX, and $XXX.X volume in manufacturing million net increase the to in XX.X% of sales XXXX, on an Türkiye X from our $XXX.X period increased XX.X%. manufacturing of operations months facility Mexico. and continuing prices by discontinued totaled million increase Nordex impact sales same period blade to the prices. inflation ended million from models of Net months $XXX.X to of

down were a an end our adjustment. of currency increases facility XXXX in in quarter impacted offset were XXXX the by decrease and cumulative sales catch-up the These that partially fluctuations. at by that also shut fourth foreign Note volume of negatively adverse at

ended in at prior ceasing from in in end of operations XXXX, primarily X discontinued production XX, the months sales million the increase XXXX, period driven $XX.X same $XX.X to increased million by the XXXX. Net to December compared XX.X% as for volume to an

Net attributed in XX, period $XX.X common the XXXX. was X in $XX.X to months same stockholders ended to December the for loss million compared loss a million of XXXX,

dividends million stockholders of XXXX. in X and stock our XX, For net $XX.X loss the includes accretion common to the million preferred period compared in same ended attributed $X December months to XXXX,

for ended December from same XXXX. to a the operations totaled EBITDA months discontinued $XX.X period in million continued of X compared loss XXXX, $XX.X Adjusted and million XX, the in

to adjusted X margin months EBITDA total X.X% ended a operations increased XX, of XXXX. December from and Our discontinued in continuing the

of catch-up XXXX. and adjustment adjustment period cumulative cumulative improved to compared to adverse same in offset As cost were costs by a transition XXXX, in X.X% in foreign the partially catch-up Matamoros. in favorable and recorded compared operating efficiencies an loss challenges fluctuations, favorable These to due benefits primarily facility in XXXX, start-up A at reduced cost prior period. that Nordex our recorded

XX. Turning to Slide

full due for from continuing December higher the primarily of due compared an in XXXX, blade volume inflation volume manufacturing year on X.X% net Nordex from XXXX, totaled in and XXXX, increase An to facility to in impact sales in year XX, compared and Net in an to billion X.X%. increase sales facilities wind XXXX, For to our as period to the Türkiye of discontinued continuing of the in billion our and $X.XX mix blade billion as X $X.XX sales models prices billion prices. increased Matamoros. $X.XX the of at average increase operations produced same ended $X.XX operations the in

our XXXX Note in partially currency cumulative increases offset of adverse shut by sales that XXXX. the These that in XXXX were down foreign a and fourth also at fluctuations. at negatively facilities an were volume decrease the by of end recorded impacted in adjustment catch-up quarter

$XXX.X discontinued XXXX prior from in at due facility million ceasing same lines the ended at primarily December $XXX.X in period volume to production XXXX, Yangzhou in XXXX. XXXX, sales XX, for decreased due operations end to in timing Net our early the to the year from X.X% of decrease the to a transition million of

compared million stockholders $XXX.X common in million to $XXX.X attributed of loss XXXX. to in a Net net XXXX loss was

attributed dividends includes accretion and stockholders in loss net in preferred Our XXXX. to $XX.X million XXXX common compared of to stock million $X

associated and adjustment and non-restructuring to compared with costs operations from partially EBITDA related Matamoros. XXXX, continuing operations $XX.X adverse stopped compared adjustment recorded as our costs were operating as operating to Nordex facility efficiencies. X.X% continuing cumulative and due adjusted production in in favorable cost $X.X the in has fluctuations, to foreign reduced million in that XXXX, XXXX, primarily the at catch-up XXXX, currency a from to in our start-up These EBITDA and Adjusted totaled transition catch-up by and an cumulative improved discontinued where X.X% margin discontinued increased offset benefits manufacturing favorable cost were million recorded locations challenges and

XX. Slide with cash of unrestricted to $XXX.X discontinued operations. including Moving debt, quarter equivalents We and and cash $XX.X of and ended both million million the continuing

for flow cash XXXX, XX, was free the X ended Our months $XX.X December million.

cash settlement of legacy $XX.X income wind accounts working from flow offset of these excess warranty ended million, was increases the were expenditures, business. XX, a capital of a Costs driven and tax receivable free revenue facility cash for by capital partially Nordex Matamoros, by our payments to in December claims. and our use at in earnings in core of Our year higher primarily due XXXX,

in the IRA what we policies the the As can we Bill our industry focused on and as robust formal control. awaits EU, to mentioned related are more in U.S. guidance earlier, implementation

our managing to this customers structure. quality an product our time the Specifically, delivering means and safety efficient on employees, maintaining a cost of

we to productivity look drive savings least annual per to structural while to over of of to continuing be realized and savings $XX to we beyond, operational As year. at XXXX, delivering million $XX efficiencies committed are in XXXX on focus million cost

back to Bill. you, that, With

Ryan. Thanks,

about energy Please business role solution managing vital to and preferred remain a transition remain We continue success Slide the turn a on our challenges the in ultimate are global very provider. believe in transition. pace focused will short-term as the the position we and XX. to industry We on bullish through the of play our excited and

achieving mid-single-digit is build win and a with automotive goal opportunities to single-digit footprint, revenue EBITDA billion-plus our mid-term margins sales, a maximizing scale percent flow while business while our Our to high our cash existing adjusted $X free business. as of

again dedication I to all TPI. want their and commitment, loyalty TPI associates to thank of for our once

it turn to the the call now open questions. I'll to operator back for

Justin question first from the Our Instructions] is line [Operator ahead. with you. MKM. Thank go ROTH of Clare Please

have wondering guess, just then of for if the expectations here, off to understand that the was the of are help start at I first you at and I your So XXXX. you operational XXXX lines us beginning going could

like are I here with that starting then XX lines. at XXXX Is think XX% X then with maybe that in in And India Nordex. in starting I you're expected? lines X and think Iowa

helpful. If you could just would help that us walk be through

Yes.

additional in relate India X Nordex. the So to

as Mexico in in lines as Iowa. have We well

GE mean dedicated, how said they'll XX So We're still was of the what timing all we we'd when on have Iowa would be operational. which those. as doesn't the with working we necessarily lines to many and operationalize

we'd dedicated, have So XX lines was be we still my that seen. point operational all but have to remains

Okay. where Treasury us it. can signed? forward process of to guidance there? kind domestic move And firm would the the are just on wait from you of content or Iowa, for then And manufacturing with That's signed understand you do contracts in helpful. you contracts on credits you getting help the before Got need getting

clearly, clarity So and the GE, working clarity having on will it's on having our helpful. but credit, be obviously, manufacturing domestic to right? with Well, certainly production up customer, content, that's we're customer advanced really the

there's anything from a matter start. and so GE's just when then determining of this finalizing point. preventing and And needs nothing at us It's we demands

Got Okay. are And IRA. qualified content Mexican domestic to one We've under then just heard steel more. steel lobbying it. get as the that Mexican suppliers

might Mexico you're qualify blades wondering aware in essentially as if possible is manufactured just a it's possibility that that content, that So domestic of?

early point. anything possibility, about not I sure mean, not There is that I was where this Justin, that's guess at aware. possible, some discussion

that. at I'll So leave it

of next line with James is from Our West question ISI. the Evercore

or and part the end the year. for big Or CapEx mentioned Coast that contract Is that through? you the we've with some [indiscernible] CapEx maybe some facility expansions is towards incremental seen on GE? or awards this come already additional awards Bill, of potentially the of curious, facility contract some where East about big

that East Mexico to bit It It's the and specific doesn't primarily Coast Yes. Iowa. little in anything a have in number.

when expect know would the to ground? it's you, along more would But of guess then I or be them. and And announced in the on -- you I already discussion you something move probably kind with you Coast customers to to when but breaking up East when -- your follow-up is would it's be

a while. We've question, quarter, saying That's next for Yes. good James. quarter next a been

So the obviously up still I'm we're quarter. you, going tell in will on to next give I discussions.

You Coast see what a on happens East the and little right. moved things, start bit, they stop the to

say there. as are dates point. So hard this But still to at customer active options with in as with discussions our far

next Our from of line Bank is question of America. Julien the with Dumoulin-Smith

team, well Good afternoon, done.

you're clarity to I expect you that et timeline going here, clarity bit year a respect think here in with little the for is on given to translate view but to going Obviously, little trying of Or you just for back really real get more the And that of get cetera? just by the When clarity would and I this you about end? IRS. quickly. long-term to from here to you this it's bit Again, then forward, things just year-end couple front wire mean, this So that the there. half down what ahead ask 'XX. getting think to be we needing a do related implies a on rehash that have 'XX. know IRS that now, to talk the of

both as to here got of that well some terms does imply cost IRS. 'XX commentary mid-year the just annualized, in time that as ongoing needing the coming You've savings What back and line for presuming contracting cost 'XX, 'XX, reductions. on

Yes.

thanks best I questions. probably Julien, is have guess that guess mid-year. the for think, I I by the

as a plan we is that D.C. back year That talked I to the in about bit our last forward X facilities. as IRA. of each as pretty successful the some question, know million I've 'XX last million anticipate we years. they're of closer it from that at that savings carrying go. been year-over-year. the the guidance in $XX on of are little of We from has And the And productivity probably of that we on been releasing identifying middle range have number each it the the savings year. heard people structural the far have we $XX But better we Treasury pieces over

already see of the again, U.S. as our signs at So pickup some seeing relates back that the into 'XX. from early volumes that We're carry you'll expect would of we're the in seeing some bulk I 'XX half forward customers. of And to it good market. 'XX

So I'm the guidance of get of that. And well. those beginning as impact middle to our through in 'XX, in optimistic the that the as put half we though, year, more by hopefully, likely start that again, 'XX, we'll pockets the savings of see back

got it. describe just Got some dynamics potentially in to terms out. margin obviously, you've here that here can the the retooling you quickly And improvement playing bottom-line, of

Just a the forward how bit EBITDA that from pace. margin little realizing walk, considering do the here, you cascading forward adjusted expectations think here say, 'XX

Yes.

a I stability, stability, when And we've utilized stability mean the I footprint say fully had is past. think that in more than I and policy.

you You but and shows of in do right the doing even that at lot savings type a look right market, can hard to in the it work productivity year-over-year. a It's we've cost been thing. of able what drive direction, margin difficult from a

in can or get there clarity, timeframe. And policy constraint better think in 'XX with, utilization at I higher that we Julien. level we demonstrated could again, capacity We've past, the be that and

next Craig-Hallum. question the is of Eric Our Stine from line with

versus incrementally in as XXXX. the year? same is that half that curious just call, back it was I more to improved then curious, the just minimal on it's last that is XXXX has mean, really And that outlook it and start-ups the still is read-through that it transitions I'm obviously, or but market optimum changes if seems So tough, 'XX? basically and

Yes.

Volumes in So it's us have Eric, I third call. especially actually market. a for think improved, since the bit, quarter the U.S. improved

a of think, a I we're could 'XX. bit seeing again, little precursor, see of in what So we

Yes. news. good that's So

just market still I remain I pickup an that improved another in it challenges of more bit mean, yes, how I fast well. our see has I So since But some third we're 'XX, up our with in picks quarter part concerned about think volume, about a back And that there. call. of optimistic. side to feel the the is important little sales as European do likely

beyond, feel guidance and year So we have provided last bullish year operations did our indicates better the headed. 'XX. where We've we but obviously and I I that stability remain customers and on where 'XX this are in certainly and confidence in our about the

correct India Yes. with wrong, if in lines the That's but thing, I'm Nordex. me and helpful. And one X

item. I think that is a new

just in supplies So China of mean, that. maybe are of to But you're closing India confirm remind rationalize what me OEMs India as you the I there, just operations OEMs add see obviously the in opportunity from, you I'm curious, as overall more and where coming can and kind there?

Yes.

have Nordex, is for Nordex and facility. we'll for X X-line it So lines that lines in X now Vestas and

will full, is So that which be completely interesting market. great. is facility India an

and think shipping been with come X back in that down maybe think starting with India to into a over cost inflation the back we've will markets, seen competitive costs. that I the or than I position bring it's with more year of last costs some other logistics

hub the world. for as see still of So a good the we rest manufacturing very it

costs India pricing to they're down of for in seeing customers remain our market of continue that but last the the for manufacturing come a to us, think couple especially is it I crack a as just from market market, good the bit shipping a tough will hub that because years.

last one for me. Maybe it. Got

accelerate to gears growth transportation. bit a alternatives of can to might might talk the that you some you avenues little strategic what look switching on I the Just look like there? just mean, at

be the challenge. wind strategic given partnerships. be constrained a could It I alliances. could been We've capital it market bit mean Yes. strategic there

developing there. outstanding and of past. that for you So converted Much different capitalize a that standpoint, the a from it's job lot really than But around, will, convert. way alternatives have will if already really been in our an of continue opportunity to team done business and of a looking commercial in we potentially to has turning

accelerate start an creating opportunity see here for to and space. try to get the rewarded we to that see we EV actually So in the opportunity that value we're

And a to by [indiscernible]? assume positives just due revenues mean, to lower being I year-over-year, number confirm, that really the would offset of flat volumes, is I

that. challenges some Yes, I'm are the space, supply And it's there chain sure in still of. think I automotive as aware you're

And the being on XXXX in relatively what XXXX. so we're volumes conservative given for happened

So it's as a on the conservative automotive combination bus just in as the of reduction well a side volume side.

[Operator Instructions].

Our next question is from the with line Webber of Greg Research. Wasikowski

talking eventually, thinking field high lift generally I and they drag potentially So of target? on the and driven about margin or mostly as single-digit target a Obviously, that a EBITDA wind. those would automotive being classify that's so that to more imagine adjusted target by about contribute speaking, but services how

actually OEMs blade of should -- with in might margins we're Both not some looking see as today, the you pretty lift, as mean, quite automotive just a high the are be at primarily service. our service, I because in frankly. attractive. And it's they're

So frankly. it's from of different be would lift that, quite bit them a little both perspective, but a on a margin

then momentum services on the XXXX. and Okay. Great. And staying into

its ultimately beast, So the policy own into getting CapEx up on less momentum what clarification, punted you? heading some is maybe the maybe of of seen end on just that Or services or reductions, that less have well, either OpEx business? from that is you as XXXX? the kind the Have any uncertainty sort on macro business or of -- side pause wind giving is it dependent dependent is

our perspective, it's From its beast. Yes. really own

not the impacted have -- Now in clarity the we're around doing. really around some repowering U.S. what that's some, but of could

it the is the being technicians. that's So overall us its it's by own economic really the there. and than or And for for out really, us to qualified train able industry. be challenge and more beast. legislation for the conditions It's would hire governor impacted That's

the of Raymond next Our Molchanov James. line Pavel with from is question

the me versus presence up Europe. up manufacturing manufacturing plan If what EU Green direct Let establishing a forward, you in would Turkey the you as today? on follow moving it ends about Deal in consider industrial is mentioned

onshore in talked about we've at too. Pavel, other Europe offshore locations geographies. before We've are before evaluating for looked there, opportunities there other

we So to that I that. think is answer the yes, short would consider

about just ought you the perspective also record to ever of as given demand prices, but from European high am or be missing Understood. through as the on headwinds, it we went And shortages, about when in you the talk When strong something? would demand gas side European the seem talk equation. that a market energy of period like I more

No, you're not.

I think some there, to market that reform prices the to as created caps or Pavel. put spike is have been been uncertainty gas temporary and things there's we have a next what's demand happen another in place investors for that going in and There's the time, issue. have

has issue market uncertainty think that some been you've by which Europe perfect and permitting maybe in issue So continuous an siting, quite of the I way. that than in And and they created for less got the reforms the remains put place time temporarily. then, got you've

investment place market uncertainty say, not that challenges there's some So of permitting it's in siting they've that the It's as reforms community. would the some, with well that and created as I the short-term have not demand. put

question next Cowen with line the of Jeff & from Our Company. Osborne is

that's protect of you're the just the was but on and it throughout on my how potentially share your sharing and talk the and you're discussions the puts more payments? the Two end. you quick you're around Can questions the have goal I just about the IRA waiting around takes with to wondering approaching fewer contract. entering clarity duration that that. customers on for, the how credit, having you're philosophical of margins Is changes

investment. ours. frank pricing we go factor you. is into Yes. manufacturing credit the with customer We're to It overall But will a the into varies by the the of conversation that blade. then, advanced bit And be little making that the

should So better, our be price customer. more the blade competitive should be to

of portion of portion it's goes the and it see it a say really we to go that's us. to that XX:XX. goes argue it's into a And not and customer conversation could we you So But our like how it.

that again, the want more where credit. Now discussion we becomes there how price that then a blade, may customers if credit conversations impact would on is are of more the percentage other But of the and of case.

So we've make been a of a couple Does sense? of a of having. that different bit little combination discussions

appreciate high I question gave of does. guidance it. mid-term sort That And of that single had EBITDA. then I on a the you digits the

I narrative at the corporate level was of more maybe factory EBITDA pre-COVID, XX%, at the and margins level. XX% sort XX% XX%, think the

Mexico just you been really just to the single-digit so narrative. area. And to it the has down, or Is in high inflationary hoping quantify environment what the your slowing I on in maybe wage is wanted could due understand that was inflation? labor, particular China I

bit to a closer like you boarder question sort changed years because walk of the maybe think than a think But ago. can us would just through answer years differently I few I more past centralized. you acute in that the X is what's

Yes.

bit being a we're think I little general. conservative more just in

the environment, an in OEM deliver inflationary are We are customers our pressure well. under as understanding to

of X. it minimum for combination things. in XX% have effective XX, a was wage to And it's this XX% year it, those But increase question, I was so a then direct on guess it seen increase. about And January your was Mexico, we Turkey,

passed Not currency gets by our but pressure some Again, all some customers. movement, gets that on offset there. to we that seeing are of of

drag on does have a a of little margin as well. that So bit us

so charges margin. to customers drive that can So and have continue or those we've of offset maintain we And productivity. our why on that's to got that's inflationary expand to about how can't emphasis we productivity we on pass some an do that continue we such

it. that And Got sense. makes

Remind what's follow-up. me, XX%, Just cost? a XX-ish percent of labor, that quick

it's like XX%-ish, little less maybe In Mexico, depending. a

pie. don't competitive the we relatively they it to to China, that were like But saw we got a they labor see piece we like small the the So been had it's point like saw, right? continue in where in China, overall cost the want of than less past.

Our of question next Julien from of the is Dumoulin-Smith with America. line Bank

are Just liquidity other comments could those this items? And look this sorry. as through few we burn you dedicated CapEx. that just here just see again, going of especially thinking year, cash comment utilization, how on that obviously, much about you in year But lines think and And at the for quick here? on EBITDA cash as How versus what course super burn moving for mean next I about a of your given a are like continuing that to specifically outlook EBITDA look deceleration you and year. pieces.

Hey, Julien. This Ryan. is

sequence of the of walking cash through kind year. for the Just

year, primarily see be we I some single-digit that. lined growing, of in burn kind driving to some to quarter. with will out that That's We've in expect China partially you'll think will it flat then too. EBITDA, but kind offset be be the first over cash us from of going our shutdown to And be are guided CapEx our of the low that there. activities

Our grow. will capital continuing operations actually That us. a working little strain on put

of So activities in those first remainder the primarily of little will a year, working of capital earnings cash bit of throughout CapEx. burn and China a I of by the a the think kind have that to related quarter, bit be pressure we'll offset

Got it.

Okay.

CapEx. on large items, hear nothing you sizable, from too EBITDA guys. So and The I

a standpoint. we're burn the like from year of suggested, liquidity pretty at feel we of out, we ending where be, bit Ryan million it No, in $XXX in we'll Yes. little then cash a and and good position a did then shape level where QX pretty as in Right. but good

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and of IRS and biased off How specifically outlook, expecting out perspective from I feels I when coming here versus if but a here? discovery. are next about a orders the play hand, folks The I get are sure if How this lot mean subsequent in as you that you 'XX. clearly the year, really and still not et about know versus we other think cetera, I'm dedicated at look a 'XX know 'XX itself talked here? to dynamic towards it I dynamic, years. different kicking year lines utilization out in even do very there's you with mean you of for of couple instance, the here that

fair Yes. I know, it's question. a

sitting that's about We've got think now. Mexico the factory factory in right idle Iowa. got in it, you If we've a

it I factories. will, So X a relates as you to fairly those 'XX year, heavy see as if start-up

you'll but So X utilization see factories in could we just other in those in effectively start-up think lines X of 'XX. good I our have really factories,

utilization what I have year, or be factories have we'll restarting and your next we contract see next point, high kind today under with to in that pretty year. today, So will those dedicated fold you'll of then think to

what But No, is wish that you it. how here. here. I guys flows understand Got was I absolutely. no, luck That's to trying of dynamic best the

Thank you.

As there over the floor Bill are no to further questions at to for Siwek this turn comments. time, I back would closing like

TPI. thank call. continued for you. and your interest Look to And you in time Thank again next our forward you, Thank today operator.

today's concludes This teleconference.

for time. your disconnect this at lines may you You your participation. Thank