United states

Operating Cash Flows

 

		Three Months Ended March 31,								Year Ended December 31,
		2017				2016				2016				2015				2014
		(unaudited)								(in thousands)
Net income (loss)		$	3,545			$	1,746			$	13,842			$	7,682			$	(6,648	)
Depreciation and amortization			3,829				3,011				12,897				11,416				7,441
Share-based compensation expense			1,707				—				9,902				—				—
Other non-cash items			143				1,167				6,388				3,741				2,995
Changes in assets and liabilities			6,714				(7,063	)			10,812				8,454				(37,005	)
Net cash provided by (used in) operating activities		$	15,938			$	(1,139	)		$	53,841			$	31,293			$	(33,217	)

Net cash provided by operating activities totaled $15.9 million for the three months ended March 31, 2017 and was primarily the result of net income for the period of $3.5 million, depreciation and amortization of $3.8 million, share-based compensation costs of $1.7 million and net changes in working capital. The key components of the $6.7 million increase in working capital include a $19.8 million increase in deferred revenue, a $11.2 million increase in accounts payable and accrued expenses, a $6.8 million decrease in prepaid expenses and other current assets, a $4.8 million increase in customer deposits, a $5.9 million decrease in other noncurrent assets and a $2.0 million increase in accrued warranty. This was partially offset by an increase in accounts receivable of $28.7 million and a $15.2 million increase in inventory. The working capital changes in accounts receivable, inventory, accounts payable and accrued expenses and deferred revenue are primarily the result of the material increase in and the timing of sales in the three months ended March 31, 2017.

Net cash used in operating activities totaled $1.1 million for the three months ended March 31, 2016 and was primarily the result of net changes in working capital, mostly offset by net income for the period of $1.7 million and non-cash depreciation and amortization of $3.0 million. The key components of the $7.1 million decrease in working capital include a $14.1 million increase in accounts receivable, an $8.3 million increase in prepaid expenses and other current assets, a $5.3 million increase in inventory and a $3.0 million increase in other noncurrent assets. This was partially offset by a $14.3 million increase in accrued warranty, a $6.8 million increase in accounts payable and accrued expenses, and a $2.5 million increase in customer deposits. The working capital changes in accounts receivable, inventory, accounts payable and accrued expenses and deferred revenue are primarily the result of the material increase in and the timing of sales in the three months ended March 31, 2016.

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, share-based compensation costs of $9.9 million and other non-cash items of $6.4 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

 

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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.

Net cash used in operating activities totaled $33.2 million for the year ended December 31, 2014. This cash usage was primarily the result of net changes in working capital and the net loss for the year ended December 31, 2014 of $6.6 million, partly offset by non-cash depreciation and amortization of $7.4 million. The key components of the working capital changes include a $60.3 million increase in inventory, a $31.7 million increase in accounts receivable and a $9.2 million increase in prepaid expenses and other current assets, partially reduced by $38.3 million increase in deferred revenue and a $26.1 million increase in accounts payable and accrued expenses. The working capital changes in accounts receivable, inventory, accounts payable 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, 2014.

Investing Cash Flows

 

		Three Months Ended March 31,								Year Ended December 31,
		2017				2016				2016				2015				2014
		(unaudited)								(in thousands)
Purchase of property and equipment		$	(16,922	)		$	(10,888	)		$	(30,507	)		$	(26,361	)		$	(18,924	)
Proceeds from sale of assets			—				—				—				146				—
Net cash used in investing activities		$	(16,922	)		$	(10,888	)		$	(30,507	)		$	(26,215	)		$	(18,924	)

Net cash flows used in investing activities totaled $16.9 million and $10.9 million for the three months ended March 31, 2017 and 2016, respectively, driven primarily by capital expenditures for new facilities and expansion or improvements at existing facilities. The capital expenditures for the three months ended March 31, 2017 primarily related to our second wind blade plants in Mexico and Turkey as well as the expansion of our wind blade facility in Dafeng, China. The capital expenditures for the three months ended March 31, 2016 primarily related to the construction of our second wind blade plants in Mexico and Turkey as well as the expansion of our original wind blade facilities in Mexico and Turkey.

Net cash flows used in investing activities totaled $30.5 million, $26.2 million and $18.9 million in the years ended December 31, 2016, 2015 and 2014, 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, 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. For the year ended December 31, 2014, the capital expenditures were primarily for the Turkey, Mexico and China plant build outs.

 

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We anticipate fiscal year 2017 capital expenditures of between $75 million to $85 million. We estimate that the cost after March 31, 2017 that we will incur to complete our current projects in process is approximately $13.9 million. We have used and will continue to use cash flow from operations and debt for major projects currently being undertaken, which include the new manufacturing facilities in Mexico and Turkey discussed above as well as our continued investment in our existing China and Turkey wind blade facilities.