december 2018s21.q4cdn.com/635504763/files/doc_presentations/2018/11/tpi-inve… · company...

| |

Company PresentationDecember 2018

| |

Legal Disclaimer

December 2018 2Company Presentation

This presentation contains forward-looking statements within the meaning of the federalsecurities laws. All statements other than statements of historical facts contained in thispresentation, including statements regarding our future results of operations andfinancial position, business strategy and plans and objectives of management for futureoperations, are forward-looking statements. In many cases, you can identify forward-looking statements by terms such as “may,” “should,” “expects,” “plans,” “anticipates,”“could,” “intends,” “target,” “projects,” “contemplates,” “believes,” “estimates,” “predicts,”“potential” or “continue” or the negative of these terms or other similar words. Forward-looking statements contained in this presentation include, but are not limited to,statements about (i) growth of the wind energy market and our addressable market; (ii)the potential impact of the increasing prevalence of auction-based tenders in the windenergy market and increased competition from solar energy on our gross margins andoverall financial performance; (iii) our future financial performance, including our netsales, cost of goods sold, gross profit or gross margin, operating expenses, ability togenerate positive cash flow, and ability to achieve or maintain profitability; (iv) changesin domestic or international government or regulatory policy, including without limitation,changes in trade policy; (v) the sufficiency of our cash and cash equivalents to meet ourliquidity needs; (vi) our ability to attract and retain customers for our products, and tooptimize product pricing; (vii) our ability to effectively manage our growth strategy andfuture expenses, including startup and transition costs; (viii) competition from other windblade turbine manufacturers; (ix) the discovery of defects in our products; (x) our abilityto successfully expand in our existing wind energy markets and into new internationalwind energy markets; (xi) our ability to successfully expand our transportation businessand execute upon our strategy of entering new markets outside of wind energy; (xii)worldwide economic conditions and their impact on customer demand; (xiii) our ability tomaintain, protect and enhance our intellectual property; (xiv) our ability to comply withexisting, modified or new laws and regulations applying to our business, including theimposition of new taxes, duties or similar assessments on our products; (xv) theattraction and retention of qualified employees and key personnel; and (xvi) thepotential impact of GE’s acquisition of LM Wind Power upon our business.

These forward-looking statements are only predictions. These statements relate tofuture events or our future financial performance and involve known and unknown risks,uncertainties and other important factors that may cause our actual results, levels ofactivity, performance or achievements to materially differ from any future results, levelsof activity, performance or achievements expressed or implied by these forward-lookingstatements. Because forward-looking statements are inherently subject to risks anduncertainties, some of which cannot be predicted or quantified, you should not rely onthese forward-looking statements as guarantees of future events. Further information onthe factors, risks and uncertainties that could affect our financial results and the forward-looking statements in this presentation are included in our filings with the Securities andExchange Commission and will be included in subsequent periodic and current reports

we make with the Securities and Exchange Commission from time to time, including inour Annual Report on Form 10-K for the year ended December 31, 2017.

The forward-looking statements in this presentation represent our views as of the dateof this presentation. We anticipate that subsequent events and developments will causeour views to change. However, while we may elect to update these forward-lookingstatements at some point in the future, we undertake no obligation to update anyforward-looking statement to reflect events or developments after the date on which thestatement is made or to reflect the occurrence of unanticipated events except to theextent required by applicable law. You should, therefore, not rely on these forward-looking statements as representing our views as of any date after the date of thispresentation. Our forward-looking statements do not reflect the potential impact of anyfuture acquisitions, mergers, dispositions, joint ventures, or investments we may make.

This presentation includes unaudited non-GAAP financial measures including totalbillings, EBITDA, adjusted EBITDA, net cash (debt) and free cash flow. We define totalbillings as the total amounts we have invoiced our customers for products and servicesfor which we are entitled to payment under the terms of our long-term supplyagreements or other contractual agreements. We define EBITDA as net income (loss)attributable to the Company plus interest expense (including losses on theextinguishment of debt and net of interest income), income taxes and depreciation andamortization. We define Adjusted EBITDA as EBITDA plus any share-basedcompensation expense, plus or minus any gains or losses from foreign currencyremeasurement. We define net cash (debt) as the total principal amount of debtoutstanding less unrestricted cash and cash equivalents. We define free cash flow asnet cash flow generated from operating activities less capital expenditures. We presentnon-GAAP measures when we believe that the additional information is useful andmeaningful to investors. Non-GAAP financial measures do not have any standardizedmeaning and are therefore unlikely to be comparable to similar measures presented byother companies. The presentation of non-GAAP financial measures is not intended tobe a substitute for, and should not be considered in isolation from, the financialmeasures reported in accordance with GAAP. See the appendix for the reconciliationsof certain non-GAAP financial measures to the comparable GAAP measures.

This presentation also contains estimates and other information concerning our industrythat are based on industry publications, surveys and forecasts. This information involvesa number of assumptions and limitations, and we have not independently verified theaccuracy or completeness of the information.

| |

Investment Thesis


Capitalizing on Wind Market Growth, Blade Outsourcing and Improving Economics

Only Independent Blade Manufacturer with a Global Footprint

Advanced Composite Technology and Production Expertise Provide Barrier to Entry

Collaborative Dedicated Supplier Model to Share Gain and Drive Down LCOE

Long-Term Supply Agreements Provide Significant Revenue Visibility

Compelling Return on Invested Capital

Seasoned Management Team with Significant Global Growth Experience

• Renewables and wind energy are mainstream, large, growing, competitive and desired by customers. • Emerging markets around the world are growing faster than mature markets.• Blades are being outsourced to access emerging growth markets, drive cost and efficiently utilize capital.• Same competitive dynamics in place today that put us in business.

• We’ve made good choices – customers, locations and markets. • Our factories are low cost, world class hubs that serve large, diverse and growing addressable markets,

reducing the effect of individual market fluctuations.

• TPI holds important IP that is difficult to replicate (materials, process, tooling, inspection and DFM)• >300 engineers and growing, opened new Denmark office to attract even more talent• 60-70 meter blades, larger than 787 wing span, with tolerances measured in millimeters

• Our business model helps TPI customers to gain market share in a cost effective and capital efficient manner by sharing the investment, spreading overhead, driving down material cost, improving productivity and sharing a large portion of that benefit with our customers.

• Current agreements provide up to $6.3B in potential revenue through 2023• Volume based pricing and shared investment motivate both parties to keep plants full• Shared gain/pain protects our margins

• Shared capital investment results in a “capital-light” model for TPI and our customers• New investments target an initial average five-year ROIC hurdle rate of 25%• Consolidated ROIC continuing to trend up from ~18% in 2014 to 31% in 2017

• TPI has become a destination for top talent. Pleased with the exceptional leaders and managers that have joined the TPI team

| |

Key Messages

• Applying our advanced composites technology to major growth trends including the decarbonization of the electric sector and clean transportation systems

• BNEF estimates that $11.5 trillion will be invested in renewable power generation capacity through 2050 the bulk of which will be for wind and solar

• BNEF estimates that by 2040 annual global EV sales will reach 65 million units representing 55% of all new car sales. 33% of the global fleet will be electric

• MarketsandMarkets projects the aerospace composites market to grow from $24.5 billion in 2016 to $43 billion by 2022, or a CAGR of 9.85% between 2017 and 2022

• Wind industry and market dynamics are rationalizing. Large global players are competing• TPI is a large global player with 13% global share, ~22% ex-China and ~43% ex-China outsourced and

a strong global reach• TPI has executed really well delivering revenue growth, market share growth, cost reduction,

operational improvements and profit expansion• 36% revenue CAGR 2013 through 2018 – estimate 50% revenue growth and 85% Adjusted EBITDA

growth in 2019• Will continue to advance TPI technology, further expand global footprint, and drive world class cost to

differentiate and win• Will utilize deep partnership business model to provide capacity, flexibility and share gain to help our

customers increase market share while we maintain and grow our profit• TPI strategy of strong and diversified growth will continue to build shareholder value


| |

Introduction to TPI Composites

Only independent manufacturer of composite wind blades for the high-growth wind energy market with a global footprint

Provides wind blades to some of the industry’s leading OEMs such as: Vestas, GE, Siemens/Gamesa, Nordex, Senvion and ENERCON

Operates nine wind blade manufacturing plants, with two more under construction, and three tooling and R&D facilities across four countries:

• United States • Mexico

• China • Turkey

Applying advanced composites technology to production of clean transportation solutions, including electric buses

Long-term supply agreements with customers, providing contracted volumes that generate significant revenue visibility and drive capital efficiency

Founded in 1968 and headquartered in Scottsdale, Arizona

Approximately 10,000 employees globally


Business Overview Strong Historical Financial Results

Revenue CAGR

44%

2013-2017

Adjusted EBITDA CAGR

86%

2013-2017

Adjusted EBITDA

Margin Growth

10.5%

2013 - 2017

3.9%

| |

TPI’s customers account for 99.8% of the U.S. onshore wind market and 54% of the global onshore market

Current Customer Mix – 50(3) Dedicated Lines


= TPI Customer

Global Onshore Wind Global Onshore Wind exc. China

Rank OEM2015–2017

Share(1) Rank OEM2015–2017

Share(1)

1 Vestas 15% Vestas 25%

2 SGRE(2) 13% SGRE(2) 21%

3 Goldwind 12% GE Wind 19%

4 GE Wind 11% Enercon 10%

5 Enercon 6% Nordex Group 10%

6 Nordex Group 6% Senvion 5%

7 United Power 5% Suzlon 3%

8 Envision 5% INOX 2%

9 Mingyang 4% Goldwind <1%

Senvion 3% ReGen Powertech <1%

TPI Customer Market Share ~54% TPI Customer

Market Share ~90%

1

2

4

5

7

3

6

8

9

= Chinese Players

1

2

5

6

3

4

9

7

8

10

Source: MAKE(1) Figures are rounded to nearest whole percent(2) Figures for Siemens/Gamesa are pro forma for the Apri l 2017 merger of Gamesa Corporatión Tecnológica and Siemens W ind Power(3) Reflects the number of dedicated l ines once the transi t ions for GE in Iowa and Mexico are completed.

40%

10%14%

28%

4% 4%

Key Customers with Significant Market Share

10

Strong Customer Base of Industry Leaders

| | December 2018 7Company Presentation

Existing Contracts Provide for ~$6.3 Billion in Revenue through 2023(1)

Minimum Volume Visibility Mitigates

Downside Risk

Minimum Volume Obligations (MVOs) in place requiring the customer to take an agreed upon percentage of total production capacity or pay TPI its equivalent gross margin and operating costs associated with the MVO

Incentivized Maximum

Customer Volume

Pricing mechanisms encourage customers to purchase 100% of the contract volume, as prices progressively increase as volumes decrease

Customers fund the molds for each production line incentivizing them to maximize TPI’s production capability to amortize their fixed cost

Attractive Contract

Negotiation Dynamic

TPI typically renegotiates and extends contracts more than a year in advance of expiration in conjunction with blade model transitions

Provisions allowing for reductions in lines generally provide for adequate time to replace a customer if a line reduction option is exercised

Demand in locations where TPI already has a foothold (China, Turkey, Mexico) provides a substantial opportunity for synergies in the construction of new facilities

TPI continues to expand its manufacturing facilities globally to meet increased demand

2017 2018 2019 2020 2021 2022 2023

Iowa

Turkey

Mexico

China

Note: Our contracts with some of our customers are subject to termination or reduction on short notice, generally with substantial penalties, and contain liquidated damages provisions, which may require us to make unanticipated payments to our customers or our customers to make payments to us.

(1) As of November 7, 2018. The chart depicts the term of the longest contract in each location.

Long-term supply agreements provide for estimatedminimum aggregate volume commitments from our customers

of ~$4.3 billion and encourage our customers to purchase additional volume up to, in the aggregate, an estimated total

contract value ~$6.3 billion through the end of 2023(1)

Key Contract Terms Long-term Supply Agreements (1)

Long-term contracts with minimum volume obligations provide strong revenue visibility

| |

Prioritized Pipeline


Annual Revenue Potential – Wind Only > $2.0 Billion Pipeline Opportunities

Prioritized Pipeline represents those opportunities we have prioritized to close by the end of 2020

Prioritized Pipeline – 23 lines

• 60-70m+ blades, >$40M/yr./line

• New and Existing Customers

• New and Existing Geographies

• Onshore and Offshore

Long-term Revenue Potential

Size of Total Addressable

MarketOEM(s) Share

(1) Annual revenue potential based on 50 lines under contract at the end of 2018 (assumes no more lines contracted during the balance of 2018t) at an average of $36 million per line per year at 85% utilization

(2) Annual revenue potential based on $40 million per line per year at 80% utilization.

$0.0

$0.2

$0.4

$0.6

$0.8

$1.0

$1.2

$1.4

$1.6

$1.8

$2.0

$ Bi

llion

s

LinesUnder

Contract48

Prioritized Pipeline

23

Lines Under Contract50

(2)

(1)

$1.5

$0.7

| |

TPI Financial Targets


20%-25%Revenue Growth2016 A – 2019 E

12+%Adj. EBITDA Margin

35+%ROIC(1)

.

(1) ROIC target is based on an estimate of tax effected income from operations plus implied interest on operating leases divided by beginning of the period capital which includes total stockholders’ equity less cash and cash equivalents plus total outstanding debt and the net present value of operating leases.

|


Global Cumulative Installed Wind Capacity – 2000-2017 (GW)(1)

Rapid growth driven by:

Increasing cost competitiveness through technological advancement

Supportive global policy initiatives

Global population growth and electricity demand

Increasing C&I and utility demand

Coal/nuclear decommissioning

Repowering

EV trends

From 2008 to 2017, the cumulative global power generating capacity of wind turbine installations has gone up more than 4.5 times, with compound annual growth in cumulative global installed wind capacity of 24% since 2000

Wind Power Generation Has Grown Rapidly and Expanded Globally in Recent Years

Source: Bloomberg New Energy Finance (1) Regional onshore and worldwide offshore figures presented for 2017 only

EMEA onshore

Americas onshore

Asia and rest of the world onshore

Offshore

166

122

232

18

15 22 29 36 44 54 6989

116155

191

232

279312

361

423

477

538

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Wind energy is a large and rapidly growing worldwide business

| |

Global Market Growth

December 2018Company Presentation 11

232


49.5

60.6 62.9 60.7 57.4 54.9 57.6 58.2 58.7 60.1

4.2

5.0 6.3

6.8 10.0

9.7 11.3

13.7 12.8 13.8

2018 2019 2020 2021 2022 2023 2024 2025 2026 2027

Source: MAKE Q2 2018 Global Wind Power Market Outlook Update

Annual Installed Global Wind Capacity (GW): 2018E – 2027E

Onshore Offshore

CAGR~ 20%

(2017 – 2027)

CAGR~ 8%

(2017 – 2027)

Annual installed wind capacity growth is projected to average 67GW between 2018 and 2027 and is propelled by offshore – 20% CAGR – andEmerging Markets - 26.7% CAGR. TPI is well positioned to participate in this growth

| |

U.S. Onshore Market Growth


166

122

232

18


8.4

11.0

12.9

6.7

3.2 2.9 3.2 3.5

11.012.5 12.8

8.0 7.7 8.0 8.5 9.0

2 0 1 8 2 0 1 9 2 0 2 0 2 0 2 1 2 0 2 2 2 0 2 3 2 0 2 4 2 0 2 5

UBS

Source: MAKE Q2 2018 Global Wind Power Market Outlook Update and UBS Securities LLC

• Economics of Onshore Wind• Corporate and Industrial Buyers• Utilities• Decarbonization• Economics of Offshore Wind • Repowering• Vehicle Electrification• State RPS/Country Renewable

Goals

Key Demand DriversMAKE

The U.S. wind market is expected to experience consistent near-term growth

U.S. Annual Installed Wind Capacity (GW): 2018E – 2025E

| |

Declining LCOEAllows Wind Energy to be More Competitive with Conventional PowerGeneration

December 2018Company Presentation

Source: Lazard Level ized Cost of Energy Analysis (version 12.0).(1) Costs are on an unsubsidized basis. Ranges reflect di fferences in resources, geography, fuel costs and cost of capi tal , among other factors.(2) Represents the average compound annual rate of decl ine of the high and low end of the LCOE range.(3) U.S. Department of Energy National Renewable Energy Laboratory (NREL)

$169

$148

$92 $95 $95$81 $77

$62 $60 $56

$101 $99

$50 $48 $45$37 $32 $32 $30 $29

$0

$63

$125

$188

$250

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Onshore windLCOE Mean

Onshore windLCOE Range

Global Onshore Wind LCOE Over Time(1)

— ($/MWh)

69% DECREASE over nine years – 12%

CAGR(2)

$0

$50

$100

$150

$200

$250

Onshorewind

Solar PVutility

CCGTgas

Fuel Cell Geo-thermal

Coal Solarthermal

w/storage

Fossil Fuels

Onshore WindOther Renewables

Global LCOE for onshore wind generation has become increasingly competitive and is now on par with new combined cycle gas turbines with an additional 50% decline expected by 2030(2)

Unsubsidized Global Levelized Cost of Power Generation Ranges by Technology(1)

— ($/MWh)

Global LCOE for onshore wind generation has become increasingly competitive at or below new combined cycle gas turbines, unsubsidized, with an additional 50% decline expected by 2030(3)

13

| |

LCOE Comparison – Alternative Energy versus Marginal Cost of Selected Existing Conventional Generation


Source: Lazard Level ized Cost of Energy Analysis (version 12.0).(1) Represents the marginal cost of operating, ful ly depreciated coal and nuclear faci l i t ies, inclusive of decommissioning costs for nuclear faci l i t ies. Analysis assumes that the salvage value for a decommissioned coal plant is equivalent to the decommissioning and si te restoration costs. Inputs are derived from a benchmark of operating, ful ly depreciated coal and nuclear assets across the U.S. Capaci ty factors, fuel , variable and fixed operating expenses are based on upper and lower quarti le estimates derived from Lazard’s research.(2) The subsidized analysis includes sensi t ivi t ies related to the TCJA and U.S. federal tax subsidies.

$0

$15

$30

$45

$60

$75

$90

Onshorewind

Onshore Wind(Subsidized)(2)

Solar PV - ThinFilm Utilitiy

Scale

Solar PV - ThinFilm Utilitiy

Scale(Subsidized)(2)

Coal Nuclear

Levelized Cost of New-Build Wind and Solar

Marginal Cost of Selected Existing Conventional

Generation(1)

Unsubsidized Wind

Subsidized Wind

Coal Nuclear Onshore Wind Solar PV - Thin Film Utility Scale

Global LCOE for onshore wind generation has become increasingly competitive and is now on par with new combined cycle gas turbines with an additional 50% decline expected by 2030(2)

Onshore wind, which became cost-competitive with conventional generation technologies several years ago, is, in some scenarios, approaching an LCOE that is at or below the marginal cost of operating existing conventional generation technologies.

14

Unsubsidized Solar PV

Subsidized Solar PV

| | December 2018Company Presentation

U.S.Policy

Initiatives

Global Policy Support Coupled with Corporate Initiatives and Repowering Expected to Drive Additional Growth

U.S. policy expected to support continued domestic wind capacity installation

• Extension of the Wind Production Tax Credit (PTC) through 2019 for both new turbines and repowering of existing turbines along with IRS clarifications that expand PTC eligibility allowing developers 100% PTC benefit as late as 2021

• Renewable Portfolio Standards

• Increased state programs/targets for offshore wind

1Increasing focus in board rooms regarding the economic and social benefits of adopting low-cost wind energy

• As of 2014 nearly 50% of Fortune 500 companies have set sustainability goals

• Furthermore, 154 leading multinationals such as GM, Nike, Walmart, IKEA, BMW, Coca Cola and Proctor & Gamble have taken the RE100 pledge, organized by the Climate Group, to transition to 100% renewable energy

Corporate and Utility

Procurement

2

International Policy

Initiatives

Recent global initiatives aimed at promoting the growth of renewable energy including wind

• European Union finalized new climate rules targeting an uplift in the share of renewable energy to 32% by 2030

• China is targeting 210 GW of grid-connected wind capacity by 20203

COP21Paris

ClimateTalks

Paris Agreement is a landmark deal marking a significant commitment by the international community to further reduce fossil fuel consumption

• Effective in 2020, took effect on November 4, 2016, thirty days after the date on which at least 55 parties accounting in total for at least an estimated 55% of the total greenhouse gas ratified the agreement

• 170 countries have ratified the agreement

4

Source: Bloomberg New Energy Finance, China National Development and Reform Commission, RE100

Longer term policy visibility and an increase in corporate and utility procurement is expected to drive additional growth over the next decade

15


The Industry is Shifting to a Predominantly Outsourced Wind Blade Manufacturing Model

(1) Source: MAKE – based on % of MW(2) TPI’s market share based on TPI MW relative to MAKE OEM total onshore MW for 2013, 2016 and 2017

38% 51%

62% 49%

0%

20%

40%

60%

80%

100%

2009 2017

Outsourced Insourced

Vertically integrated OEMs have begun to outsource wind blade manufacturing due to:

• global talent constraints

• the need for efficient capital allocation

• the need to accelerate access to emerging markets

• the need for supply chain optimization

Some have sold or shuttered in-house tower and blade manufacturing facilities in favor of an outsourced manufacturer

Geographically distributed, high precision blade manufacturing is more cost effective when performed by diversified, specialized manufacturers

TPI is the only independent manufacturer of composite wind blades with a global footprint and is well positioned to capitalize on global industry trends

Expected to continue to outsource a significant percentage of blade needs notwithstanding acquisition of LM Wind Power

TPI selected as manufacturer of Vestas-designed blades in China, Mexico and Turkey

Currently outsources to TPI in Mexico and Turkey

3%

9%

13%

2013 2016 2017

TPI Share Increase: ~4X

Future market share increases expected to be driven by:

Continuation of outsourcing

LM Wind Power customer attrition

Advantages from global footprint

Several of the wind industry’s largest participants have chosen TPI as their leading outsourced blade manufacturer

Outsourcing Trends Global Wind Blade Manufacturing: Outsourced vs. Insourced (1)

TPI Global Wind Blade Market Share 2013 – 2017 (2)


A typical wind turbine consists of many components, the most important being the wind blades, gear box, electric generator and tower

When the wind blows, the combination of the lift and drag of the air pressure on the wind blades rotate the rotor, which drives the gear-box and generator to create electricity

A Typical Wind Turbine

Blades and pitch systems remain the most important elements in reducing LCOE driven by ongoing improvements in aerodynamic efficiency, load controls and cost reductions

29%

22%13%

10%

6%

4%3%

8%

Blades TowerGearbox Hub & PitchConverter Bearing & ShaftGenerator BedplateBalance of Nacelle

TPI is Well Positioned to Take Advantage of the Market Movement Towards Larger Blades

The trend toward larger wind blades indicates the potential phase out of smaller wind blades, as larger blades have the greatest impact on energy efficiency and LCOE reduction

Global Blade Length Breakdown

22%23%

29%23%

22%28%

13%20%8%

2016A 2021E

<45.0m

45.0 – 49.9m

50.0 – 54.9m

55.0 – 59.9m

60.0 – 69.9m

>70.0m7%

Wind Turbine & Blade Overview Turbine Cost by Component Movement Towards Larger Blade Lengths

Turbine Cost Breakdown by Component (1)

Source: MAKE, American Wind Energy Association(1) Costs included in turbine cost breakdown represent 77% of total installed turbine costs. Remaining 23% not represented in chart.

Wind blades represent ~22% of total installed turbine costs

787 aircraft, 60m

On par with the movement toward larger wind blades, TPI blades are generally 50-60m in

length

Blade length and air foil shape contribute to efficiency in turning kinetic energy from the

rotor into electricity

1. Rotor Blade2. Pitch drive3. Nacelle4. Brake5. Low-speed shaft6. Gear box7. High-speed shaft8. Generator9. Heat exchanger10. Controller11. Anemometer12. Wind vane13. Yaw drive14. Tower

5%

5%

http://www.google.com/url?sa=i&rct=j&q=&esrc=s&source=images&cd=&cad=rja&uact=8&ved=0ahUKEwiqneGnl_PMAhUJXB4KHS7jD5wQjRwIBw&url=http://www.clker.com/clipart-plane-silhouette-grey.html&bvm=bv.122676328,d.dmo&psig=AFQjCNF-tP5MAa20jSSgytJkIaX8TMGoLA&ust=1464195421409796


Strong Barriers to Entry Will Allow TPI to Capture Additional Market ShareWind blades are a critical component of our customers’ strategy and, along with supply chain optimization, plays an integral role bringing down LCOEWe believe that our extensive experience and track-record in delivering high quality wind blades combined with our established global scale and strong customer relationships creates a significant barrier to entry and is the foundation of our leadership position

Strong track record of delivering high quality wind blades to diverse, global markets, and of developing replicable and scalable manufacturing facilities and processes

Extensive Expertise Reputation for Reliability

Established Global Scale Customer Stickiness

Over 43,000 wind blades produced since 2001, with an excellent field performance record in a market where reliability is critical to our customers’ success

We expand our manufacturing footprint in coordination with our customers’ needs, scaling our capacity to meet demand in markets across the globe

Dedicated capacity and collaborative approach of manufacturing wind blades to meet customer specifications promotes significant customer loyalty and creates higher switching costs

TPI’s ability to capitalize on recent growth trends in the wind energy market and outsourcing trends has allowed it to grow its revenue by over 300% from 2013 to 2017 while expanding its global manufacturing footprint over the same period


Source: MAKE Q1 2018 Global Wind Power Market Outlook - Onshore.

TPI has strategically built a strong global footprint that takes advantage of proximity to large existing regional markets, adjacent new markets and seaports for global export

Headquarters: Scottsdale, AZ Wind Blade Manufacturing Facilities Tooling / Engineering / R&D Facilities

Europe, the Middle East and Africa

2016 Capacity: 155 GWProj. Install ’18-’20 – 45 GW

CAGR: 4%

United States2017 Capacity: 81 GW

Proj. Install ’18-’20 – 32 GW CAGR: 26%

Asia and rest of the world2016 Capacity: 182 GW

Proj. Install ’18-’20 – 80 GWCAGR: 12%

Demonstrated ability of global expansion ▪ TPI has developed a strong

process to enter new markets, with an excellent track record of ramping and operating new facilities

▪ Significant “know how” in creating replicable and scalable manufacturing processes for ramping facilities globally

▪ Has successfully reduced costs and operational risks through the utilization of existing teams that have personally led similar startup processes

TPI’s operational expertise provides for a crucial competitive advantage as it continues to ramp new facilities in 2018 and beyond

LATAM (ex-Brazil)2016 Capacity: 8 GW

Proj. Install ’18-’20 – 8 GWCAGR: 43%

14 manufacturing facilities in 4 countries; over 4.9 million square feet of manufacturing facilities

Transportation Manufacturing Facility

Global Footprint Strategically Optimized for Regional Industry Demand

| |

TPI Technology

Collaborative Space


Customer Technology

Aero DesignDesign of external shape (airfoil)

Structural DesignDesign of internal structure

Material TechnologyDevelop new materials to reduce weight and cost

Prototype BuildManufacture of zero series blades

Tooling DesignAdvanced tooling design to manufacture bladesProcess Technology

Develop manufacturing process technology to enable manufacture

Design for ManufacturingTechnical Due Diligence

20

Advanced Technology

Enhanced TPI Customer Collaboration• Technology Partnership built on long-

term relationships and mutual dependency

• ‘True’ Partnerships with customers in their New Product Development process

• Move upstream - Collaborative due diligence on Design for Manufacturing and Risk Mitigation

• Customer Intimacy - Joint prototyping of blades with customers in customer facilities


Rhode Island, US•Deep historical partnerships with U.S. Gov’t agencies to advance composite manufacturing technologies

•Pilot projects to demonstrate new technologies like thermoplastics

Kolding, Denmark•Established Advanced Engineering Center to enhance capabilities to serve European customer base

•Expand technical resource base to enable growth

Izmir, Turkey•Established AR-GE program to leverage Turkish Gov’t R&D Funding

•R&D programs in tooling and process engineering

Taicang, China•Accredited materials lab

•Significant process and tooling development

•Tooling transition process expertise

Applied Development at all Manufacturing Sites Over 300 engineers globally. TPI is a destination for top talent.

21

Expanding Technology Development Footprint

| |

Approach• Standard Stage Gate Model• Clearly defined metrics and deliverables• Consistent processes based on lessons learned• Core team with functional expertise


Objective: Create replicable and scalable processes to launch new sites, new blades and transition technology

Results IN DAYS

0

5

10

15

20

25

30

2015 2017

FlexibilityTooling Transition / Existing Facility

27

14

48%REDUCTION

0

50

100

150

200

250

2015 2017

SpeedRamp up / Existing Facility

210

95

55%REDUCTION

050

100150200250300350400

2015 2017

SpeedRamp up / New Facility

365

180

51%REDUCTION

Benefits• Consistency, repeatability and scalability• Speed – time to market• Flexibility in dynamic environment• Reduction in start-up and transition costs

22

Industrialization


Dedicated Supplier Model Encourages Stable Long-Term Customers

Build-to-spec blades

Dedicated TPI capacity provides outsourced volume that customers can depend upon

Joint investment in manufacturing with tooling funded by customers

Long-term agreements with incentives for maximum volumes

Strong visibility into next fiscal year volumes

Shared pain/gain on increases and decreases of material costs and some production costs

Cooperative manufacturing and design efforts optimize performance,quality and cost

Global presence enables customers to repeat models in new markets

Dedicated capacity

Industry leading field performance

High quality, low cost

Global operations

Deeply Integrated Partnership Model High Customer Value Proposition Strong Customer Base of Leading OEMs

23

RENEWABLE ENERGY

| |

Multiple development programs in: • Passenger automotive• EVs• Commercial vehicles

Growing with Proterra

Diversification Strategy


CLEAN TRANSPORTATION: In EVs, lighter weight equates to longer range or fewer batteries which drives cost By 2040, 55% of all new car sales and 33% of global fleet will be electric(1)

(1) BloombergNEF – New Energy Outlook 2018

| |



• Offices and manufacturing in CA and SC• 465+ employees, strong executive management team• >70 customers; >625 vehicles sold• >190 vehicles delivered; >5,500,000 service miles• >30,300,000 pounds of CO2 emissions avoided• Demonstrated >1,100 miles on single charge

Proterra’s MissionAdvancing electric vehicle technology to deliver the world’s best-performing heavy-duty vehicles

Strong Transportation Expertise

World Class Financial Partners

Source: Proterra Inc.

25

| |

Large Market Opportunity

• Addresses large opportunity given mission-critical nature of transit

• Cusp of wide-spread adoption• Technology applicable everywhere• Compelling growth potential


20 50150

270

525

1,000

1,600

2,140

2015 2016 2017 2018 2019 2020 2021 2022

0% 1% 3% 5% 8% 16% 24% 31%

% share of total transit

North American Electric Bus Market (Units)

Source: Frost & Sul l ivan, HD Transi t Bus Market – Global Analysis, March 2016

95%CAGR

26

| |


$24.5B per year composites market growing to $43.0B by 2022 – CAGR of 9.85%(1)

• Replacing aluminum and other more expensive composites (e.g., carbon) with TPI’s solutions


AEROSPACE

(1) MarketsandMarkets – November 2017.

27

| |

Asia ~ 2,100

EMEA ~ 2,600Mexico ~ 4,100

US ~ 1,200

High Quality Management Team, Board and Workforce


Steve LockardPresident & ChiefExecutive Officer

Joined TPI in 1999. Prior to TPI, served as the Vice President of Satloc and was a founding officer of ADFlex solutions, a NASDAQ listed company

Chairman of the Board for the American Wind Energy Association (AWEA)

Joe KishkillChief Commercial

Officer

Joined TPI in 2017. Prior to TPI was President, International and Chief Commercial Officer of First Solar, Inc., President, Eastern Hemisphere and Latin America for Exterran Holdings

Bill SiwekChief Financial

Officer

Joined TPI in 2013. Prior to TPI, was CFO for T.W. Lewis Company, EVP of Talisker Inc., President & CFO of Lyle Anderson Company and was a Partner at Arthur Andersen in both Audit and Business Consulting

Steve FishbachGeneral Counsel

Joined TPI in 2015. Prior to TPI, was SVP, Deputy General Counsel of Global Cash Access Holdings, Inc. (NYSE: GCA) and various senior roles in the legal department of Fidelity National Information Services, Inc./eFunds Corporation (NYSE: FIS)

T.J. CastleSVP – N.A. Wind and Global OpEx

Joined TPI in 2015. Prior to TPI, held a number of positions with Honeywell including most recently VP of Integrated Supply Chain and prior to that was Global VP of the Honeywell Operating System for Aerospace

Ramesh Gopalakrishnan

SVP – Technology & Industrialization

Joined TPI in 2016. Prior to TPI, was EVP of Global Manufacturing for Senvion Wind Energy. Prior to that he was COO of Suzlon Energy Composites, Inc. and has also spent time at Haliburton Corp. and GE

Deane IlukowiczSVP – Global

Human Resources

Joined TPI in 2016. Prior to TPI, was VP of Organizational Effectiveness at TransUnion, Chief Human Resources Officer for Hypertherm, and held senior level roles at other financial services and manufacturing companies

Joe KerkhoveSVP – Strategic

Markets

Joined TPI in 2017. Prior to TPI, was Commercial Vice-President with Arconic (ALCOA) and has over 20 years of sales and marketing experience to TPI, including leadership positions in Aerospace, Defense and Automotive markets

Name Affiliation

Steve Lockard • President, Chief Executive Officer and Director• Chairman of the Board - AWEA

Stephen B. Bransfield

• Director• Previously VP, General Electric

Michael L. DeRosa• Director• MD, Element Partners

Jayshree S. Desai• Director• President, ConnectGen, LLC

Philip J. Deutch• Director• MP, NGP Energy Technology Partners

Paul G. Giovacchini

• Director and Chairman of the Board• Independent consulting advisor to Landmark Partners

Jack A. Henry• Director• MD, Sierra Blanca Ventures

James A. Hughes• Director• Former CEO and board member of First Solar, Inc.

Daniel G. Weiss• Director• MP, Angeleno Group

~10,0000employees worldwide

Management Team Board of Directors

Employees at a Glance

28

| |

Company Timeline

| Company Presentation December 2018 29

| |

FINANCIAL SUMMARY

| |

Financial Results


$14

$39

$66

$100

($0)

$20

$40

$60

$80

$100

$120

2014 2015 2016 2017

$321

$586

$755

$955

$363

$600

$764

$942

$0

$200

$400

$600

$800

$1,000

$1,200

2014 2015 2016 2017

Sales Billings

1. Total bi l l ings refers to the total amounts we have invoiced our customers for products and services for which we are enti t led to payment under the terms of our long-term supply agreements or other contractual agreements

2. See appendix for reconci l iations of non-GAAP financial data3. 2017 as restated per the Company’s retroactive adoption of ASC 606 and is unaudited.

GAAP Net Sales and Total Billings ($ in millions) (1) (2) (3) Adjusted EBITDA ($ in millions) (2) (3)

44%’13–’17 CAGR

86%’13–’17 CAGR

4.2% 6.7% 8.8% 10.5%Margin

| |

Q3 2018 Highlights


Q3 2018 Highlights and Recent Company News

• Operating results and year-over-year increases compared to 2017

• Net sales were $255.0 million for the quarter up slightly on lower volume but a higher average sales price

• Net income for the quarter of $9.5 million compared to net income of $21.7 million in 2017 driven by the reversal of the deferred tax asset valuation allowance and offset by higher startup and transition activity

• Adjusted EBITDA for the quarter was $17.6 million or 6.9% of sales

• Vestas exercised an option for 2 additional lines in our manufacturing hub in Matamoros, Mexico bringing the total number of lines in that facility to 6

• GE agreed to extend our supply agreement in one of our Mexico plants by two years to 2022 and will increase the number of lines in that facility to 5 from the current 3

• GE agreed to transition to a larger blade model in our Iowa plant in early 2019 and eliminate its option to terminate the Iowa supply agreement prior to its December 2020 expiration

Net Sales and Adjusted EBITDA ($ in millions)

Setsinvoiced 739 589

Est. MW 1,796 1,625Dedicated lines(1) 48 51

Lines installed(2) 38 39(1) Number of wind blade manufacturing lines dedicated to our customers under long-term supply agreements

at the end of the quarter.(2) Number of wind blade manufacturing lines installed that are either in operation, startup or transition at the

end of the quarter.

Net Sales Adjusted EBITDA

$254 $255

$28 $18

$0

$200

$400

Q3 '17 Q3 '18 Q3 '17 Q3 '18

| |

Q3 2018 Financial Highlights(1)

(unaudited)


(1) See pages 52 – 54 for reconciliations of non-GAAP financial data

| |

Income Statement Summary(1)

(unaudited)


(1) See pages 52 – 54 for reconciliations of Non-GAAP financial data

| |

Key Balance Sheet and Cash Flow Data(1)

(unaudited)


(1) See pages 53 - 54 for the reconciliations of net cash and free cash flow

| |

GUIDANCE FOR 2018 AND 2019 & 2020 KEY TARGETS

| |

• Cash flow from operations will continue to largely fund our growth

• Significant investment in 2018 will drive value creation and growth in 2019 and beyond

• Operational improvements will continue to drive profitability – Lean mindset globally

• Continued conversion of pipeline opportunities

• Improved speed and efficiency of startups and transitions

• Significant number of transitions and startups in 2018 (~15 transitions and ~17 startups) - short-term impact that drives long-term growth – longer blades equate to higher ASP and operational improvements drive throughput so revenue per line per year increases significantly

• Additional potential from diversified markets not reflected

• Startups in 2018 – include new plants (Mexico 4 and potential new plant openings), new & existing customers and offshore opportunities

• Loss of revenue from GE lines not renewed will not be fully replaced until 2019

• Margin pressure in the industry driven by auction-based systems in many parts of the world, U.S. market demand shifts driven by the current PTC cycle and increased competition from solar will put pressure on our pricing for new deals and may require us to share more gain from cost outs and productivity improvements than contractually obligated


Key Drivers for 2018 Performance


Note: All reference to lines is to wind blade manufacturing lines.

1) We have not reconciled our total expected billings for 2018 to expected net sales under GAAP because we have not yet finalized calculations necessary to provide the reconciliation and as such the reconciliation is not possible without unreasonable efforts.

2) As a result of the release of our valuation allowance in Q3, the effective tax rate for full year 2018 as calculated is not meaningful.

Key Guidance Metrics

38


Note: References to lines relate to wind blade manufacturing lines

Sets and Startup & Transition Costs Guidance Metrics

39

| |

Key Drivers for 2019 Performance

• Increase in dedicated manufacturing lines to between 62 and 65 through conversion of prioritized pipeline

• 50% growth in net sales and 85% increase in Adjusted EBITDA based on the mid-point of the guidance ranges

• Strong overall utilization of the assumed 50 lines under contract as of January 1, 2019• Free cash flow of between $20 million and $25 million and rigorous working capital management and

selective use of credit facilities when needed• Continue investments in 2019 to drive growth in 2020 and beyond – 10 lines in transition and 15 lines in

startup• Continued conversion of our pipeline will necessitate additional facility or campus expansion during

2019 and we expect entering a new geography during 2019 • Opening of a new tooling facility in Juarez, Mexico and expand our tooling resources on a global scale • Continued focus on day-to-day execution to continue driving down cycle times and direct labor hours

and collaborating with our supplier base for raw material pricing, certainty of supply and further innovation

• Continued use of productivity and throughput improvements • Leveraging of our investment in the automated pilot manufacturing line to advance our diversification

strategy and expand the number of transportation-related production contracts over time


| |

2019 Key Guidance Metrics and 2020 Targets


2019 Guidance

2019 TargetPrevious

2020 Target

Total Billings $1.5B – $1.6B $1.3B – $1.5B $1.7B – $1.9B

Net Sales $1.5B – $1.6B $1.7B – $1.9B

Adjusted EBITDA $120M – $130M $140M – $150M $170M – $190M

Earnings per Share - FD $1.24 – $1.35

Sets 3,300 – 3,500

Average Selling Price per Blade $135K – $140K

Non-Blade Billings $115M – $120M

G&A Costs as a % of Billings (incl. SBC) 4% – 4.25%

Estimated MW 9,800 – 10,400

Dedicated Lines - EOY 62 – 65

Share-Based Compensation $9.5M – $10M

Depreciation & Amortization $40M – $45M

Net Interest Expense $12M – $13M

Capital Expenditures $95M – $100M

Effective Tax Rate 20% – 25%


| |

2019 Startup and Transition Guidance Metrics


Q1 Q2 Q3 Q4 2019Guidance

Lines Installed – end of period 49 51 51 51 50 – 52

Lines in Startup –during period 13 10 5 – 15

Lines in Transition –during period 5 7 6 2 10

Startup Costs $14.0M –$15.0M

$10.0M –$11.0M

$3.0M –$3.5M

$3.0M –$3.5M $30.0M – $33.0M

Transition Costs $2.5M –$3.0M

$7.0M –$8.0M

$11.0M –$12.0M

$1.5M –$2.0M $22.0M – $25.0M

Line Utilization 68% – 70% 81% – 83% 94% – 96% 98% – 100% 86% – 88%

Sets 650 – 700 780 – 830 910 – 960 960 – 1,010 3,300 – 3,500


| |

$363

$600

$764

$942$1,025

$1,550

$1,800

$0

$200

$400

$600

$800

$1,000

$1,200

$1,400

$1,600

$1,800

$2,000

2014A 2015A 2016A 2017A 2018E 2019E 2020E

Total Billings(1) (2)

Strong Financial Performance and Outlook


24%2016 - 2020

CAGR

Adjusted EBITDA(1) (2) (3)

$14

$39

$66

$100

$68

$125

$180

$0

$20

$40

$60

$80

$100

$120

$140

$160

$180

$200

2014A 2015A 2016A 2017A 2018E 2019E 2020E

Note: Dollars in millions(1) Estimates for 2018, 2019 and 2020 are shown at the midpoint of ranges provided. See appendix for reconciliation of non-GAAP financial data.(2) We have not reconciled our total expected billings for 2018, 2019 or 2020 to expected net sales under GAAP or 2020 expected Adjusted EBITDA to expected Net Income because we have not

yet finalized calculations necessary to provide the reconciliation and as such the reconciliations are not possible without unreasonable efforts.(3) 2017 as restated per the Company’s retroactive adoption of ASC 606 and is unaudited.

28%2016 – 2020

CAGR

Margin % 4.2% 6.7% 8.8% 10.5% 6.6% 8.1% 10.0%

43

| |

Total Billings/Net Sales Bridge($ in millions)


| |

Adjusted EBITDA Bridge($ in millions)


$67.5

$125.0

$33.9

$31.2

$100.1

$32.5

$20.0

$37.5

$25

$35

$45

$55

$65

$75

$85

$95

$105

$115

$125

2017 EBITDA Increase in S&T Costs Impact of GE VolumeReduction

Growth & OperationalImprovements Offsetby Margin Impact ofVolume Lost during

Transitions

2018 EBITDA Decrease in S&T Costs Growth & OperationalImprovements Offsetby Margin Impact ofVolume Lost during

Transitions

2019 EBITDA

| |

2019 Total Billings/Net Sales – Target to Guidance Bridge($ in millions)


$1,550

$1,400 $25

$115 $10

$500

$600

$700

$800

$900

$1,000

$1,100

$1,200

$1,300

$1,400

$1,500

$1,600

$1,700

2019 Target Billings /Net Sales

Impact of Higher Volume Impact of Higher ASP Higher Non-blade Sales 2019 Guidance Billings /Net Sales

| |

2019 Adjusted EBITDA – Target to Guidance Bridge($ in millions)


$125

$28

$8

$145

$50

$75

$100

$125

$150

2019 Target EBITDA Increase in S&T Costs Growth & Operational ImprovementsOffset by Margin Impact of Volume Lost

during Transitions

2019 Guidance EBITDA

| |

Illustrative Manufacturing Facility Expansion Assumptions

Compelling Return on Invested Capital on New Plants


Illustrative Plant Financial ResultsYear 0 Year 1 Year 2 Year 3 Year 4 Year 5 Average

Net Sales $1 $132 $210 $210 $210 $210 $162

COGS (excluding depreciation) (8) (108) (174) (174) (174) (174) ($135)

EBITDA ($7) $24 $36 $36 $36 $36 $27

Taxes 0 (6) (9) (9) (9) (9) (7)

Tax-Effected EBITDA ($7) $18 $27 $27 $27 $27 $20

Depreciation (3) (5) (5) (5) (5) (5) (4)

Net Income ($10) $14 $23 $23 $23 $23 $16

Return on Invested Capital -17% 23% 38% 38% 38% 38% 26%

Invested Capital $60 $60 $60 $60 $60 $60 $60

Note: Return on Invested Capital (ROIC) is calculated as Net Income divided by Invested Capital

Financial Highlights• 6 lines per plant• Total invested capital of $60 million (CapEx and Startup Losses)• Gross margin of 15%• Illustrative effective tax rate of 25%• Full run-rate achieved by end of year 2• 500,000 sq. ft. per facility – leased by TPI• Assumes 5 production year supply agreement(s)• Assumes 25% - 30% of annual set volume from a line in startup during

the startup year • Average sets per line per year of 75

• Steady state revenue of $210M per year• $36M million of annual run-rate EBITDA • Target hurdle ROIC of 25% over the first five years of production

48

| |

APPENDIX

| |

Balance Sheets


Source: Year end 2015 and 2016 audited financial statements. 2017, as restated per the Company’s retroactive adoption of ASC 606, and the 2018 interim period are unaudited.

50

September 30,($ in thousands) 2015 2016 2017 2018

AssetsCurrent assets:

Cash and cash equivalents 45,917$ 119,066$ 148,113$ 110,838$ Restricted cash 1,760 2,259 3,849 2,845 Accounts receivable 72,913 67,842 121,576 117,066 Inventories 50,841 53,095 4,112 7,445 Inventories held for customer orders 49,594 52,308 — — Contract assets — — 105,619 122,265 Prepaid expenses and other current assets 31,337 30,657 27,507 25,036

Total current assets 252,362 325,227 410,776 385,495

Noncurrent assets:Property, plant, and equipment, net 67,732 91,166 123,480 150,931 Goodwill and other intangibles, net 3,226 3,072 3,915 6,884 Other noncurrent assets 6,600 17,741 18,391 31,386

Total assets 329,920$ 437,206$ 556,562$ 574,696$

Liabilities and Stockholders’ EquityCurrent liabilities:

Accounts payable and accrued expenses 101,108$ 112,281$ 167,175$ 168,039$ Accrued warranty 13,596 19,912 30,419 32,704 Current maturities of long-term debt 52,065 33,403 35,506 39,201 Deferred revenue 65,520 69,568 — — Contract liabilities — — 2,763 8,335 Customer deposits and customer advances 8,905 1,390 — —

Total current liabilities 241,194 236,554 235,863 248,279

Noncurrent liabilities:Long-term debt 77,281 89,752 85,879 93,583 Other noncurrent liabilities 3,812 4,393 4,938 4,284

Total liabilities 322,287 330,699 326,680 346,146 Convertible and senior redeemable preferred shares and warrants 198,830 — — — Total stockholders’ equity (deficit) (191,197) 106,507 229,882 228,550 Total liabilities and stockholders’ equity 329,920$ 437,206$ 556,562$ 574,696$

Non-GAAP Metric:Net cash (debt) (90,667)$ (6,379)$ 24,557$ (22,876)$

December 31,

| |

Income Statements


Source: Year end 2015 and 2016 audited financial statements. 2017 periods, as restated per the Company’s retroactive adoption of ASC 606, and the 2018 interim periods are unaudited.

51

($ in thousands) 2015 2016 2017 2017 2018 2017 2018

Net sales 585,852$ 754,877$ 955,199$ 253,498$ 254,976$ 701,695$ 739,567$ Cost of sales 528,247 659,745 804,099 210,840 216,594 592,495 625,817 Startup and transition costs 15,860 18,127 40,628 12,352 21,415 29,051 53,474

Total cost of goods sold 544,107 677,872 844,727 223,192 238,009 621,546 679,291 Gross profit 41,745 77,005 110,472 30,306 16,967 80,149 60,276

General and administrative expenses 14,126 33,892 40,373 9,315 9,756 28,373 31,908 Income from operations 27,619 43,113 70,099 20,991 7,211 51,776 28,368 Other income (expense) Interest income 161 344 95 48 45 78 129 Interest expense (14,565) (17,614) (12,381) (3,254) (2,323) (9,215) (8,376) Loss on extinguishment of debt - (4,487) - - - - (3,397) Realized gain (loss) on foreign currency remeasurement (1,802) (757) (4,471) 39 (8,181) (2,575) (12,957) Miscellaneous income 246 238 1,191 390 2,511 968 4,003

Total other expense (15,960) (22,276) (15,566) (2,777) (7,948) (10,744) (20,598) Income (loss) before income taxes 11,659 20,837 54,533 18,214 (737) 41,032 7,770

Income tax benefit (provision) (3,977) (6,995) (15,019) 3,523 10,269 (4,505) 6,357 Net income 7,682 13,842 39,514 21,737 9,532 36,527 14,127 Net income attributable to preferred shareholders 9,423 5,471 - - - - - Net income (loss) attributable to common shareholders (1,741)$ 8,371$ 39,514$ 21,737$ 9,532$ 36,527$ 14,127$

Non-GAAP Metrics:Total billings 600,107$ 764,424$ 941,565$ 256,404$ 240,699$ 698,833$ 701,755$ Adjusted EBITDA 39,281$ 66,150$ 100,111$ 27,851$ 17,572$ 71,681$ 58,422$

Year Ended December 31,Three Months Ended

September 30,Nine Months Ended

September 30,

| |

Cash Flow Statements



52

($ in thousands) 2015 2016 2017 2017 2018 2017 2018

Cash flows from operating activitiesNet income 7,682$ 13,842$ 39,514$ 21,737$ 9,532$ 36,527$ 14,127$

Depreciation and amortization 11,416 12,897 21,697 5,427 5,878 14,143 19,080 Share-based compensation expense - 9,902 7,124 1,043 1,972 4,794 6,971 Amortization of debt issuance costs and debt discount 4,319 4,681 573 144 24 430 284 Loss on extinguishment of debt - 4,487 - - - - 3,397 Loss on disposal of property and equipment 187 2 334 - - - - Deferred income taxes (765) (2,782) (1,068) (2,613) (10,898) (2,613) (10,898) Changes in assets and liabilities 8,454 10,812 6,426 (8,148) 8,152 (9,821) (15,766)

Net cash provided by operating activities 31,293 53,841 74,600 17,590 14,660 43,460 17,195

Cash flows from investing activitiesPurchase of property and equipment (26,361) (30,507) (44,828) (8,585) (8,326) (35,312) (50,636) Proceeds from sale of assets 146 - 850 - - - -

Net cash used in investing activities (26,215) (30,507) (43,978) (8,585) (8,326) (35,312) (50,636)

Cash flows from financing activities Proceeds from issuance of common stock sold in initial public offering, net of underwriters discount and offering costs - 67,199 - - - - - Net proceeds from (repayment of) debt 1,554 (15,370) (8,095) 380 (9,564) 5,302 (3,626) Debt issuance costs (1,113) - (454) - - - (281) Payment on acquisition of noncontrolling interest (1,875) - - - - - - Proceeds from exercise of stock options - - 1,430 988 904 988 2,211 Repurchase of common stock including shares withheld in lieu of income taxes - - (1,264) (1,264) (2,587) (1,264) (2,859) Restricted cash (989) (499) - - - - -

Net cash provided by (used in) financing activities (2,423) 51,330 (8,383) 104 (11,247) 5,026 (4,555) Impact of foreign exchange rates on cash, cash equivalents and restricted cash (330) (1,515) 335 141 170 305 (283)

Net change in cash, cash equivalents and restricted cash 2,325 73,149 22,574 9,250 (4,743) 13,479 (38,279) Cash, cash equivalents and restricted cash, beginning of period 43,592 45,917 129,863 134,092 118,901 129,863 152,437 Cash, cash equivalents and restricted cash, end of period 45,917$ 119,066$ 152,437$ 143,342$ 114,158$ 143,342$ 114,158$

Non-GAAP Metric:Free cash flow 4,932$ 23,334$ 29,772$ 9,005$ 6,334$ 8,148$ (33,441)$



September 30,

| |

Non-GAAP Reconciliations

Net sales is reconciled to total billings as follows:



Note: Footnote references are on the fol lowing page.

Net income is reconciled to adjusted EBITDA as follows:

53

($ in thousands) 2015 2016 2017 2017 2018 2017 2018

Net sales 585,852$ 754,877$ 955,199$ 253,498$ 254,976$ 701,695$ 739,567$ Blade-related deferred revenue at beginning of period (1) (59,476) (65,520) - - - - - Blade-related deferred revenue at end of period (1) 65,520 69,568 - - - - - Change in gross contract assets - - (13,437) 2,895 (1,434) (827) (24,526) Foreign exchange impact (2) 8,211 5,499 (197) 11 (12,843) (2,035) (13,286)

Total billings 600,107$ 764,424$ 941,565$ 256,404$ 240,699$ 698,833$ 701,755$



September 30,

($ in thousands) 2015 2016 2017 2017 2018 2017 2018

Net income 7,682$ 13,842$ 39,514$ 21,737$ 9,532$ 36,527$ 14,127$ Adjustments:

Depreciation and amortization 11,416 12,897 21,697 5,427 5,878 14,143 19,080 Interest expense (net of interest income) 14,404 17,270 12,286 3,206 2,278 9,137 8,247 Loss on extinguishment of debt - 4,487 - - - - 3,397 Income tax provision (benefit) 3,977 6,995 15,019 (3,523) (10,269) 4,505 (6,357) Share-based compensation expense - 9,902 7,124 1,043 1,972 4,794 6,971 Realized (gain) loss on foreign currency remeasurement 1,802 757 4,471 (39) 8,181 2,575 12,957

Adjusted EBITDA 39,281$ 66,150$ 100,111$ 27,851$ 17,572$ 71,681$ 58,422$



September 30,

| |

Non-GAAP Reconciliations (Continued)


1. Total billings is reconciled using the blade-related deferred revenue amounts at the beginning and the end of the year as follows:

Source: Year end 2015 and 2016 audited financial statements. 2017 periods, as restated per the Company’s retroactive adoption of ASC 606, and the 2018 interim period are unaudited.

2. Represents the effect of the difference between the exchange rate used by our various foreign subsidiaries on the invoice date versus the exchange rate used at the period-end balance sheet date.

Net cash (debt) is reconciled as follows:

54

($ in thousands) 2015 2016

Blade-related deferred revenue at beginning of year 59,476$ 65,520$ Non-blade related deferred revenue at beginning of year - - Total current and noncurrent deferred revenue at beginning of period 59,476$ 65,520$

Blade-related deferred revenue at end of year 65,520$ 69,568$ Non-blade related deferred revenue at end of year - - Total current and noncurrent deferred revenue at end of year 65,520$ 69,568$

Year Ended December 31,

($ in thousands) 2015 2016 2017 2017 2018

Cash and cash equivalents 45,917$ 119,066$ 148,113$ 139,065$ 110,838$ Less total debt, net of debt issuance costs & discount (129,346) (123,155) (121,385) (133,637) (132,784) Less debt issuance costs & discount (7,238) (2,290) (2,171) (1,860) (930)

Net cash (debt) (90,667)$ (6,379)$ 24,557$ 3,568$ (22,876)$

December 31, September 30,

| |

Non-GAAP Reconciliations(Continued)


(1) Source: Year end 2015 through 2016 audited financial statements. 2017 as restated per the Company’s retroactive adoption of ASC 606 and the 2018 periods are unaudited.(2) Figures presented are projected estimates for the ful l years ending December 31, 2018 and 2019.

Free cash flow is reconciled as follows(1):

A reconciliation of the low end and high end ranges of projected net income under ASC 606 to projected adjusted EBITDA is as follows(2):

55

($ in thousands) 2015 2016 2017 2017 2018 2017 2018

Net cash provided by operating activities 31,293$ 53,841$ 74,600$ 17,590$ 14,660$ 43,460$ 17,195$ Purchase of property and equipment (26,361) (30,507) (44,828) (8,585) (8,326) (35,312) (50,636) Free cash flow 4,932$ 23,334$ 29,772$ 9,005$ 6,334$ 8,148$ (33,441)$



September 30,

($ in thousands) Low End High End Low End High End

Projected net income 11,525$ 13,915$ 44,750$ 48,650$ Adjustments:

Projected depreciation and amortization 26,500 27,000 40,000 45,000 Projected interest expense (net of interest income) 10,850 10,850 12,500 12,500 Projected loss on extinguishment of debt 3,400 3,400 - - Projected income tax provision (benefit) (9,400) (7,290) 13,000 14,100 Projected share-based compensation expense 9,125 9,125 9,750 9,750 Projected realized loss on foreign currency remeasurement 13,000 13,000 - -

Projected Adjusted EBITDA 65,000$ 70,000$ 120,000$ 130,000$

2018 Adjusted EBITDA Guidance Range Guidance Range

2019 Adjusted EBITDA

december 2018s21.q4cdn.com/635504763/files/doc_presentations/2018/11/tpi-inve… · company...

Documents