United states securities and exchange commission

Operating Cash Flows

 

 

		Year Ended December 31,
		2017				2016				2015
		(in thousands)
Net income		$	43,690			$	13,842			$	7,682
Depreciation and amortization			20,878				12,897				11,416
Share-based compensation expense			7,124				9,902				—
Other non-cash items			(161	)			6,388				3,741
Changes in assets and liabilities			11,132				10,812				8,454
Net cash provided by operating activities		$	82,663			$	53,841			$	31,293

 

 

Net cash provided by operating activities totaled $82.7 million for the year ended December 31, 2017 and was primarily the result of net income of $43.7 million, non-cash depreciation and amortization charges totaling $20.9 million, share-based compensation costs of $7.1 as well as the net changes in working capital. The key components of the $11.1 million increase in working capital includes a $51.2 million increase in accounts payable and accrued expenses, an $11.5 million increase in deferred revenue, a $9.3 million increase in accrued warranty, an $8.7 million increase in customer deposits, a $7.5 million decrease in other noncurrent assets and a $3.2 million decrease in prepaid expenses and other current assets. This was partially offset by a $53.7 million increase in accounts receivable and a $26.5 million increase in inventory. The working capital changes in accounts receivable, inventory, accounts payable and accrued expenses, accrued warranty and deferred revenue are primarily the result of the material increase in and the timing of sales in the year ended December 31, 2017.

 

Net cash provided by operating activities totaled $53.8 million for the year ended December 31, 2016 and was primarily the result of net income of $13.8 million, non-cash depreciation and amortization charges totaling $12.9 million and other non-cash items of $16.3 million, as well as net changes in working capital. The key components of the $10.8 million increase in working capital includes a $15.0 million increase in accounts payable and accrued expenses, a $6.3 million increase in accrued warranty, a $5.1 million decrease in accounts receivable and a $4.0 million increase in deferred revenue. This was partially offset by an $8.3 million increase in other noncurrent assets, a $7.5 million increase in customer deposits and a $5.0 million increase in inventory. The working capital changes in accounts receivable, inventory, accounts payable and accrued expenses, accrued warranty and deferred revenue are primarily the result of the material increase in and the timing of sales in the year ended December 31, 2016.

Net cash provided by operating activities totaled $31.3 million for the year ended December 31, 2015 and was primarily the result of non-cash depreciation and amortization charges totaling $11.4 million and other non-cash items of $3.7 million, as well as net income of $7.7 million and net changes in working capital. The key components of the $8.5 million increase in working capital includes a $34.4 million increase in accounts payable and accrued expenses, a $7.7 million increase in accrued warranty, a $6.0 million increase in deferred revenue and a $4.2 million decrease in other noncurrent assets. This was partially offset by a $29.7 million increase in accounts receivable, an $11.0 million increase in prepaid expenses and other current assets and a $3.2 million decrease in customer deposits. The working capital changes in accounts receivable, inventory, accounts payable, accrued warranty and accrued expenses and deferred revenue are primarily the result of the material increase in and the timing of sales in the year ended December 31, 2015.

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Investing Cash Flows

 

		Year Ended December 31,
		2017				2016				2015
		(in thousands)
Purchase of property and equipment		$	(44,828	)		$	(30,507	)		$	(26,361	)
Proceeds from sale of assets			850				—				146
Net cash used in investing activities		$	(43,978	)		$	(30,507	)		$	(26,215	)

 

Net cash flows used in investing activities totaled $44.0 million, $30.5 million and $26.2 million in the years ended December 31, 2017, 2016 and 2015, respectively, driven primarily by capital expenditures for new facilities and expansion or improvements at existing facilities. The capital expenditures for the year ended December 31, 2017 primarily related to the construction and outfitting of our second and third wind blade plants in Mexico and our second wind blade plant in Turkey, the expansion and improvements at certain of our existing wind blade plants and costs at our corporate office to enhance our information technology systems. The capital expenditures for the year ended December 31, 2016 primarily related to the plant build outs of three new wind blade facilities, two in Mexico and one in Turkey. The capital expenditures for the year ended December 31, 2015 primarily related to the expansion of our China and Iowa wind blade facilities.

We anticipate fiscal year 2018 capital expenditures of between $85 million to $90 million. We estimate that the cost after December 31, 2017 that we will incur to complete our current projects in process is approximately $6.3 million. We have used and will continue to use cash flows from operations, the proceeds received from our credit facilities and the proceeds received from the issuance of stock for major projects currently being undertaken, which include new manufacturing facilities in Mexico and Iowa, continued investment in our existing China and Turkey wind blade facilities and costs at our corporate office to enhance our information technology systems.

Financing Cash Flows

 

		Year Ended December 31,
		2017				2016				2015
		(in thousands)
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) term loans			(3,750	)			(930	)			19,375
Net repayments of accounts receivable    financing			(1,020	)			(5,385	)			(2,472	)
Net repayments of working capital    loans			(4,638	)			(4,290	)			(12,572	)
Net proceeds from (repayments of) other debt			1,313				(4,765	)			(2,777	)
Debt issuance costs			(454	)			—				(1,113	)
Proceeds from exercise of stock options			1,430				—				—
Repurchase of common stock including shares    withheld in lieu of income taxes			(1,264	)			—				—
Restricted cash and other			(1,590	)			(499	)			(2,864	)
Net cash provided by (used in) financing activities		$	(9,973	)		$	51,330			$	(2,423	)

 

Net cash flows used in financing activities for the year ended December 31, 2017 totaled $10.0 million. The net cash flows provided by financing activities totaled $51.3 million for the year ended December 31, 2016. The net cash flows used in financing activities for the year ended December 31, 2015 totaled $2.4 million. Net cash flows used in financing activities for the year ended December 31, 2017 primarily reflects the net repayment of working capital loans, term loans and accounts receivable financings. Net cash flows provided by financing activities for the year ended December 31, 2016 primarily reflects the net proceeds received from our initial public offering, partially offset by repayments of working capital loans and accounts receivable loans. Net cash flows used in financing

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activities for the year ended December 31, 2015 primarily reflects the net repayments of working capital loans and accounts receivable loans as well as payments related to the acquisition of noncon trolling interest of our Turkey operation in 2013 and additions to restricted cash. This was partially offset by additional net proceeds from term loans.