United states

TPI COMPOSITES, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

 

		2015				2014
Tangible long-lived assets:
U.S.		$	13,805			$	9,039
Asia (China)			29,957				19,490
EMEA (Turkey)			11,370				13,569
Mexico			12,600				9,701
Total tangible long-lived assets		$	67,732			$	51,799
Total assets:
U.S.		$	121,113			$	61,386
Asia			92,804				98,666
EMEA			72,221				93,810
Mexico			48,002				24,098
Total assets		$	334,140			$	277,960

 

(1)	Revenues are attributable to countries based on the location where the product is manufactured or the services are performed.

Note 21. Subsequent Events

(a) Customer Advance

In January 2016, the Company’s Mexico segment entered into an agreement with GE, a related party, and received an advance of $2.0 million. These funds will be used to expand the existing Mexico manufacturing facility to accommodate larger wind blade models. The Mexico segment is obligated to repay the advance, without interest, by providing future credits against a specified number of wind blade sets sold to GE. If the Mexico segment fails to supply those wind blade sets by December 31, 2016, the then outstanding balance of the advance will be immediately due and payable. The advance will also be immediately due in full upon a change of control of the Company or within 30 days after the effective date of an initial public offering of the Company’s common stock.

(b) Stock Split

On July 6, 2016, the Company amended its amended and restated certificate of incorporation to effect a 360-for-1 stock split of its common stock. The stock split did not cause an adjustment to the par value of the authorized shares of common stock. As a result of the stock split, the Company has adjusted the share amounts authorized and issuable under the share-based compensation plans. All of the share and per share information for common stock (and the share-based compensation plans) referenced throughout the consolidated financial statements and notes thereto have been retroactively adjusted to reflect this stock split.

 

F-52

Table of Contents

SCHED ULE I—CONDENSED FINANCIAL INFORMATION OF THE REGISTRANT

TPI COMPOSITES, INC.

PARENT COMPANY BALANCE SHEETS

(In thousands, except share data)

 

		December 31,
		2015				2014
Assets
Current assets:
Cash and cash equivalents		$	18,222			$	16,227
Prepaid expenses and other current assets			3,673				580
Total current assets			21,895				16,807
Accounts receivable—intercompany			146,681				138,451
Investments in subsidiaries			(70,870	)			(88,017	)
Other noncurrent assets			4,220				4,256
Total assets		$	101,926			$	71,497
Liabilities and Shareholders’ Deficit
Current liabilities:
Accounts payable—intercompany		$	10,806			$	9,090
Current maturities of long-term debt, net of discount			1,848				940
Other current liabilities			2,129				1,184
Total current liabilities			14,783				11,214
Long-term debt, net of discount and current maturities			79,510				58,027
Total liabilities			94,293				69,241
Series A convertible preferred shares			50,901				49,138
Series B convertible preferred shares			41,200				39,600
Series B-1 convertible preferred shares			52,510				50,430
Series C convertible preferred shares			17,490				16,770
Senior redeemable preferred shares			27,585				25,065
Super senior redeemable preferred shares			8,060				7,262
Redeemable preferred share warrants			1,084				1,084
Total convertible and senior preferred shares and warrants			198,830				189,349
Shareholders’ deficit:
Accumulated other comprehensive income (loss)			(25	)			2,338
Accumulated deficit			(191,172	)			(189,431	)
Total shareholders’ deficit			(191,197	)			(187,093	)
Total liabilities and shareholders’ deficit		$	101,926			$	71,497

See accompanying notes to condensed financial statements.

 

F-53

Table of Contents

TPI COMPOSITES, INC.

PARENT COMPANY STATEMENTS OF OPERATIONS

(In thousands)

 

		Year ended December 31,
		2015				2014
Net sales		$	—			$	—
Total cost of goods sold			—				—
Gross profit			—				—
General and administrative expenses			203				167
Loss from operations			(203	)			(167	)
Other income (expense):
Equity in earnings of subsidiaries, net of tax			18,422				872
Interest expense, net of interest income			(10,533	)			(7,075	)
Total other income (expense)			7,889				(6,203	)
Income (loss) before income taxes			7,686				(6,370	)
Income tax provision			(4	)			(278	)
Net income (loss)			7,682				(6,648	)
Net income attributable to preferred shareholders			9,423				13,930
Net loss attributable to common shareholders		$	(1,741	)		$	(20,578	)

See accompanying notes to condensed financial statements.

 

F-54

Table of Contents

TPI COMPOSITES, INC.

PARENT COMPANY STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(In thousands)

 

		Year ended December 31,
		2015				2014
Net income (loss)		$	7,682			$	(6,648	)
Other comprehensive loss:
Subsidiaries’ other comprehensive loss			(2,363	)			(249	)
Comprehensive income (loss)		$	5,319			$	(6,897	)

See accompanying notes to condensed financial statements.

 

F-55

Table of Contents

TPI COMPOSITES, INC.

PARENT COMPANY STATEMENTS OF CASH FLOWS

(In thousands)

 

		Year ended December 31,
		2015				2014
Net cash used in operating activities		$	(12,140	)		$	(9,672	)
Net cash used in investing activities			(5,240	)			(32,103	)
Cash flows from financing activities:
Net proceeds from term loans			19,375				50,000
Proceeds from issuance of preferred stock			—				6,846
Net cash provided by financing activities			19,375				56,846
Net change in cash and cash equivalents			1,995				15,071
Cash and cash equivalents, beginning of year			16,227				1,156
Cash and cash equivalents, end of year		$	18,222			$	16,227

See accompanying notes to condensed financial statements.

 

F-56

Table of Contents

TPI COMPOSITES, INC.

NOTES TO PARENT COMPANY FINANCIAL STATEMENTS

Note 1. Description of Business and Basis of Presentation

TPI Composites, Inc., or TPI, is the holding company that conducts substantially all of its business operations through its direct and indirect subsidiaries. During the years ended December 31, 2015 and 2014, TPI did not receive any cash dividends from its subsidiaries in China. Accordingly, these condensed financial statements have been prepared on a “parent-only” basis. Under a parent-only presentation, TPI’s investments in its consolidated subsidiaries are presented under the equity method of accounting. These parent-only financial statements should be read in conjunction with TPI Composites, Inc. and Subsidiaries audited consolidated financial statements and related notes included elsewhere in this prospectus. There are material restrictions on TPI’s ability to obtain funds from its indirect subsidiaries in China through dividends, loans or advances.

Note 2. Debt

As of December 31, 2015, TPI had $81.4 million of debt outstanding. For more details on the composition of the balance and various debt transactions which took place during the year, see note 14 to the consolidated financial statements included elsewhere in this prospectus.

Note 3. Preferred Shares and Warrants

Since October 2007, TPI has issued preferred shares to investors and since June 2013 has issued warrants for the purchase of preferred shares in connection with certain debt and preferred share issuances. See note 15 to the consolidated financial statements included elsewhere in this prospectus for more details.

Note 4. Commitments and Contingencies

In addition to the debt amounts noted above, TPI has guaranteed the performance under certain agreements of its direct or indirect subsidiaries. See note 16 to the consolidated financial statements included elsewhere in this prospectus for more details.

 

F-57

Table of Contents

 

 

7,250,000 Shares

 
Common Stock

 

 

PROSPECTUS

 

 

J.P. Morgan		Morgan Stanley

 

Cowen and Company		Raymond James		Canaccord Genuity

Through and including                     , 2016 (the 25th day after the date of this prospectus), all dealers effecting transactions in these securities, whether or not participating in this offering, may be required to deliver a prospectus. This is in addition to the dealers’ obligation to deliver a prospectus when acting as an underwriter and with respect to an unsold allotment or subscription.

 

 

 

Table of Contents