United states

 

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Net debt is reconciled as follows:

 

		December 31,
		2016				2015				2014
		(in thousands)
Total debt, net of debt issuance costs and discount		$	123,155			$	129,346			$	120,849
Add debt issuance costs			2,290				4,220				4,256
Add discount on debt			—				3,018				6,034
Less cash and cash equivalents			(119,066	)			(45,917	)			(43,592	)
Net debt		$	6,379			$	90,667			$	87,547

Key Operating Metrics

Key operating metrics consist of sets invoiced, estimated megawatts of energy capacity for wind blade sets invoiced, dedicated manufacturing lines, total manufacturing lines installed, manufacturing lines in startup and manufacturing lines in transition. Sets represents the number of wind blade sets, consisting of three wind blades each that we invoiced worldwide during the period. We monitor sets and believe that presenting sets to investors is helpful because we believe that it is the most direct measurement of our manufacturing output during the period. Sets primarily impact net sales and total billings. Estimated megawatts are the energy capacity to be generated by wind blade sets sold in the period. Our estimate is based solely on name-plate capacity of the wind turbine on which our wind blades are expected to be installed. We monitor estimated megawatts and believe that presenting estimated megawatts to investors is helpful because we believe that it is a commonly followed measurement of energy capacity across our industry and provides an indication of our share of the overall wind blade market. Dedicated manufacturing lines are the number of manufacturing lines that we have dedicated to our customers pursuant to our long-term supply agreements. Total manufacturing lines installed represents the number of manufacturing lines installed and either in operation, startup or transition. We monitor dedicated manufacturing lines and total manufacturing lines installed and believe that presenting both of these metrics to investors is helpful because we believe that the number of dedicated manufacturing lines is the best indicator of demand for our wind blades from customers under our long-term supply agreements in any given period. Dedicated manufacturing lines primarily impacts our net sales and total billings. We believe that dedicated manufacturing lines provide an understanding of additional capacity within an existing facility and that total manufacturing lines installed provides an understanding of the number of manufacturing lines installed and either in operation, startup or transition. Manufacturing lines in startup is the number of dedicated manufacturing lines that were in a startup phase during the pre-production and production ramp up period, pursuant to the opening of a new manufacturing facility, the expansion of an existing manufacturing facility or the addition of new manufacturing lines in an existing manufacturing facility. We monitor and present this metric because we believe it helps investors to better understand the impact of the startup phase of our new manufacturing facilities on our gross profit (loss) and net income (loss). Manufacturing lines in transition is the number of dedicated manufacturing lines that were being transitioned to a new wind blade model during the period. We monitor and present this metric because we believe it helps investors to better understand the impact of these transitions on our gross profit (loss) and net income (loss).

 

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RESULTS OF OPERATIONS

Year Ended December 31, 2016 Compared to Year Ended December 31, 2015

The following table summarizes certain information relating to our operating results and related percentage of net sales for the years ended December 31, 2016 and 2015 that has been derived from our consolidated financial statements.

 

		Year Ended December 31,
		2016								2015
		(in thousands)
Net sales		$	754,877				100.0	%		$	585,852				100.0	%
Cost of sales			659,745				87.4				528,247				90.2
Startup and transition costs			18,127				2.4				15,860				2.7
Total cost of goods sold			677,872				89.8				544,107				92.9
Gross profit			77,005				10.2				41,745				7.1
General and administrative expenses			33,892				4.5				14,126				2.4
Income from operations			43,113				5.7				27,619				4.7
Other expense			(22,276	)			(3.0	)			(15,960	)			(2.7	)
Income before income taxes			20,837				2.7				11,659				2.0
Income tax provision			(6,995	)			(0.9	)			(3,977	)			(0.7	)
Net income			13,842				1.8				7,682				1.3
Net income attributable to preferred shareholders			5,471				0.7				9,423				1.6
Net income (loss) attributable to common shareholders		$	8,371				1.1	%		$	(1,741	)			(0.3	)%