TPI Composites, Inc. (NASDAQ:TPIC) Q4 2024 Earnings Call Transcript

TPI Composites, Inc. (NASDAQ:TPIC) Q4 2024 Earnings Call Transcript February 20, 2025

TPI Composites, Inc. misses on earnings expectations. Reported EPS is $-1.01 EPS, expectations were $-0.15.

Operator: Good afternoon, and welcome to the TPI Composites’ Fourth Quarter and Full Year 2024 Earnings Conference Call. At this time, I’d like to turn the conference over to Jason Wegmann, Investor Relations for TPI Composites. Thank you. You may begin.

Jason Wegmann: Thank you, operator. I would like to welcome everyone to TPI Composites’ Fourth Quarter 2024 Earnings Call. We will be making forward-looking statements during this call that are subject to risks and uncertainties, which could cause actual results to differ materially. A detailed discussion of applicable risks is included in our latest reports and filings with the Securities and Exchange Commission, which can be found on our website, tpicomposites.com. Today’s presentation will include references to non-GAAP financial measures. You should refer to the information contained in the slides accompanying today’s presentation for definitional information and reconciliations of historical non-GAAP measures to the comparable GAAP financial measures. With that, let me turn the call over to Bill Siwek, TPI Composites’ President and CEO.

Bill Siwek: Thanks, Jason. Good afternoon, everyone, and thank you for joining our call. In addition to Jason, I’m here with Ryan Miller, our CFO. Please turn to Slide 5. In the first half of the year, we took decisive action to restructure the TPI portfolio by divesting the automotive business and shutting down the Nordex Matamoros plant, both of which were loss-making businesses that had burdened our financial results. We also started up or transition 10 lines to next-generation blades which significantly improved our performance and utilization in the second half of the year. Building on the momentum from the third quarter, I’m pleased to report that our operational performance continues to improve. Fourth quarter revenue increased year-over-year by over 17% with utilization of 91%.

Free cash flow was also very strong in the quarter at $83 million, and we ended the year with $197 million of unrestricted cash. We continue to maintain ongoing dialogues with our customers and suppliers to align on short and midterm demand, operational priorities, quality expectations and cost targets. As we mentioned on our last call, our customers are asking for all the volume we can get out of our Mexico factories for the U.S. market in 2025. So we have responded by ramping up production lines in Mexico to support 24/7 operations. While we began investing in the additional shifts in the fourth quarter of 2024, the impact of the added volume won’t be realized until the second quarter, however, will continue to benefit our business moving forward.

Our commitment to continuous improvement driven by our lean culture and a relentless pursuit of operational excellence has put us on a trajectory in 2025 to realize an $80 million improvement in adjusted EBITDA over 2024. We will continue to explore opportunities for further footprint optimization with our customers. We recently signed an agreement with GE Venova to restart production at our Iowa facility later this year. this facility initially focused on supporting GE’s 2-megawatt platform is expected to create over 400 good-paying jobs with further additions expected as additional lines under discussion are added. Last quarter, we announced that we had secured rights to a strategically located manufacturing facility to support anticipated growth in the U.S. market.

Q&A Session

Interest in and discussions with OEMs regarding this facility have been strong. We anticipate announcing the next steps for this facility soon. Last quarter, we also announced an expansion of our relationship with Vestas at our India facility, while discussions with other OEMs regarding the remaining idle capacity at that facility are encouraging, both for an Indian onshore market experiencing significant growth as well as the cost competitiveness of our Indian operation to serve the global market. From a finance perspective, sales for the quarter were $346.5 million, adjusted EBITDA was $1.2 million and below our expectations for a few reasons. First, sales were impacted by a targeted reduction in wind blade inventory included in contract assets driven by working capital initiatives.

This inventory reduction impacted net sales for the quarter as lower blade inventory costs directly correlate to lower revenue under the cost-to-cost revenue recognition method for our blade contracts. Note that we lowered overall inventory by $54 million in the quarter, which favorably impacted free cash flow for the quarter as well. Next, we recorded a net $6 million change in estimate for legacy warranty matters to account for updated cost and execution plans. Finally, as I mentioned earlier, we also invested $2 million in additional resources to enable a 24/7 schedule at certain of our Mexico facilities to support our customers’ demand in the U.S. market in ’25 and beyond. When looking at our ongoing operations and without the items I just outlined, our adjusted EBITDA margin in the fourth quarter was approximately 5%.

Very nice progress towards our long-term EBITDA target. Please turn to Slide 6. As we continue our lean journey and focus on driving down costs through operational efficiencies and eliminating waste while delivering world-class quality no manufacturing initiative will ultimately be more impactful to TPI in the wind industry than the implementation of Blade Assure. Over the past 18 months, we have been working internally to establish manufacturing operations that will enable us to drive what we believe will be the industry’s gold standard for quality blades. Blade Assure represents a unique combination of technologies and processes to control and validate the manufacturing of utility-scale wind turbine blades. These technologies include methods to document, verify, automate and prevent inconsistencies or abnormalities from occurring during the manufacturing process.

Technologies unique to Blade Assure include AI aided vision solutions, selective automation and robotic systems, advanced sensors and inspection technologies. We are looking to move beyond trailing indicators that have been the norm of our industry since its inception to providing real-time feedback to correct and prevent issues from occurring during the manufacturing process. We are also evaluating the capabilities of the methods of manufacture and inspection used to validate the products produced today. It is only by understanding the unique intersection between requirements, manufacturing methods, inspection solutions and the capabilities of each can we build and validate products in a new and robust way. We are rolling out the initial features of Blade Assure now and expect to have all of our plants up and running by the end of the year.

We have also recently launched a centralized Lean Awareness hub, providing employees with access to training materials, dashboards and best practices across the organization. This one-stop resource will empower every member of the TPI family to contribute to continuous improvement and innovation in their daily work. Moving forward, we will continue to invest in innovation and technology to strengthen our competitive edge and solidify TPI’s position as a premier global blade provider in the onshore wind market. From a supply chain perspective, we continue to prioritize strong relationships with our supply chain partners and open communication is crucial as we navigate industry uncertainty to enable us to ensure timely delivery, cost optimization and operational flexibility.

While we faced logistics challenges in 2024, we anticipate a much smoother operating environment in 2025. Given the uncertainty potential tariffs may bring to the market, we will closely monitor new developments and continue our contingency planning with our customers. With that said, we expect our supply chain to deliver a projected year-over-year decrease in raw material costs of nearly 8%. With respect to the wind market, while acknowledging near-term challenges, including regulatory uncertainty and obstacles, such as permitting delays, interconnection issues, tariffs and siting restrictions as well as broader economic factors like elevated interest rates and nagging inflation, we remain confident in the long-term prospects of onshore wind.

With global energy demand expected to double in the coming years, driven by increased demand coming from AI and data centers along with expanded advanced manufacturing and all of the above approach will be required to meet that demand. Renewables, namely onshore wind, are able to cost effectively meet that demand right now. While the EU market also presents a long-term growth opportunity, significant challenges remain. Competition from Chinese manufacturers and the ongoing impact of hyperinflation in Türkiye continue to pose risks for TPI. Steps proposed by the EU like the Net Zero Industrial auction resilience guidelines could help to level the playing field for certain players, the ultimate benefit to component suppliers like TPI, however, is still uncertain.

In December, we committed to a restructuring plan in Net Türkiye to rationalize our workforce in response to lower forecasted near-term demand, primarily for the EU. Notwithstanding, we remain encouraged by the interest expressed from OEMs in our available capacity. Demand for domestically manufactured wind energy equipment at Türkiye remained strong, in part due to the resumption of the YEKA tender process announced late last year as well as Türkiye being one of Europe’s largest wind markets. Given the domestic content requirement for blades, we are optimistic that there will be continued demand for capacity in Türkiye. With the operational challenges of 2024 behind us, we anticipate significant financial improvement in 2025. We expect revenue from continuing operations to increase to a range of $1.4 billion to $1.5 billion, driven by increased blade shipments from Mexico for the U.S. market partially offset by reduced revenue from Türkiye and India, while adjusted EBITDA is expected to improve by $80-plus million over 2024 by higher sales volume, lower start-up and transition costs, the absence of losses from the Nordex Matamoros facility and cost savings.

As we enter 2025, the inflection point in the U.S. wind market continues to shift to the right and the ultimate impact of proposed tariffs and/or changes or modifications to existing regulations in the U.S. is presently unknown. This, coupled with the challenges in the creates uncertainty in the industry’s near-term outlook and has increased our focus on ensuring that we have sufficient liquidity to weather the storm and the right level of leverage relative to our EBITDA and free cash flow generation. Therefore, we are working with our Board of Directors and our external advisers to evaluate options to optimize our capital structure for the current environment. While definitive plans have not yet been finalized, this remains a priority. We anticipate providing further details of our plans throughout the year.

With that, I’ll turn the call over to Ryan to review our financial results.

Ryan Miller: Thanks, Bill. Please turn to Slide 8. In the fourth quarter of 2024, net sales were $346.5 million compared to $294.3 million for the same period in 2023, an increase of 17.7%. Net sales of wind blades, tooling and other wind-related sales increased by $54.2 million or 19.2% to $336 million for the 3 months ended December 31, 2024, as compared to $281.8 million for the same period in 2023. The increase was primarily driven by higher sales volume and higher average sales prices for wind blades due to a shift of product mix to new and longer blades, including the resumption of production at our previously idled facility in Juarez, Mexico. This increase also reflects the absence of a 4-week shutdown at one of our plants in the prior year due to a supply chain disruption caused by out-of-specification materials.

These increases were partially offset by lower volumes at our India facility as we began the transition of a blade type and the closure of our Nordic Matamoros plant. Field service inspection and repair services sales decreased $2.1 million or 19.9% to $10.5 million for the 3 months ended December 31, 2024, as compared to $12.6 million in the same period in 2023. The decrease was primarily due to the mix of revenue versus warranty activity in the quarter. Adjusted EBITDA was $1.2 million for the 3 months ended December 31, 2024, as compared to an adjusted EBITDA loss of $24.5 million during the same period in 2023. Adjusted EBITDA margin was 0.4% as compared to an adjusted EBITDA margin loss of 8.3% in the same period in 2023. The improvement was primarily driven by the absence of losses from our Nordex Matamoros facility, which was shut down at the end of the second quarter 2024, increased volume at our other Mexico locations, lower start-up and transition costs and cost savings initiatives.

These improvements were partially offset by unfavorable changes in estimate for pre-existing warranties and higher labor costs in Türkiye and Mexico. Moving to Slide 9. We ended the quarter with $197 million of unrestricted cash and cash equivalents and $617 million in net debt. Free cash flow was $83.2 million in the fourth quarter of 2024 compared to negative free cash flow of $15.4 million in the same period in 2023. The net generation of cash in the fourth quarter of 2024 was primarily due to improved cash earnings and working capital improvements focused on our contract asset balance where we decreased inventory levels and increased customer advances. We continue to believe our current cash position provides us with the flexibility to meet the near-term demands of the business and continue to invest in growth for lines under rooftop today.

A summary of our financial guidance for 2025 can be found on Slide 10. We anticipate sales from continuing operations in the range of $1.4 billion to $1.5 billion, representing a high single-digit year-over-year growth at the midpoint of the guidance. This projected growth is primarily driven by increased blade shipments from our Mexico facility to support the U.S. market and the planned reopening of our Iowa site, partially offset by projected reduced sales from our Türkiye and India facilities driven by — primarily by anticipated lower demand from our Nordex lines. We expect to have 6 lines in start-up and transition in 2025, and we expect average selling prices to remain relatively flat year-over-year. Field services revenue is expected to increase more than 50%, driven by a shift of technicians back to historical levels of revenue-generating activity.

We expect EBITDA margin from continuing operations to be in the range of 2% to 4%. This improvement from 2024 was primarily driven by higher sales volume, reduced start-up and transition costs, the absence of losses from the Nordics Matamoros facility and cost savings achieved through supply chain optimization and lean initiatives. We expect capital expenditures of about $25 million to $30 million in 2025. We concluded 2024 with 34 dedicated production lines and anticipate exiting 2025 at this level. Key line changes planned for 2025 include the start-up of 2 new lines in Iowa, the transition of 2 lines in Mexico in the first quarter, the addition of 2 new lines in India to replace 2 lines no longer under contract and a planned reduction in 2 production lines in Türkiye expected in the middle of the year.

2025 utilization expected to improve to the mid-80s compared to 77% in 2024, driven by reduced start-up and transition activity versus 2024. With that, I’ll turn the call back over to Bill.

Bill Siwek: Thanks, Ryan. Please turn to Slide 12. While acknowledging near-term global and industry challenges, including regulatory uncertainty in the U.S. and the EU, with global energy demand expected to double in the coming years and all of the above approach will be required to meet that demand. Onshore wind is able to cost-effectively meet a significant portion of that demand right now. We are a critical part of the onshore wind value chain for the long-term future of onshore wind remains a significant opportunity for us, and we will continue to focus on driving safety, quality, productivity and cost to remain a key player in the industry. Before we open the call for Q&A, I’ll conclude saying I’m encouraged by the progress we’ve made over the last year including shedding loss-making operations, starting up or transitioning 10 new manufacturing lines and significantly streamlining operations and improving quality, all while doing it as safely as we ever have.

And I want to once again extend my gratitude to all of our TPI associates for their continued commitment and dedication to TPI and our mission to safely decarbonize and electrify the world. I’ll now turn it back to the operator and open the call for questions.

Operator: [Operator Instructions] And we’ll move first to Mark Strouse with JPMorgan.

Mark Strouse: So I wanted to start with policy, Bill. I mean, as you said, there’s a lot of uncertainty about what may or may not happen with the IRA. But just curious if you can talk about with what has been enacted so far? Has there been any impact maybe from the day 1 executive orders with permitting, anything like that, that you can comment on?

Bill Siwek: Yes. Mark, I would say we haven’t felt the direct impact today. As we’ve talked about before, we are — we’re doing whatever we can to produce as much volume for the U.S. market this year. That has not changed from our — from a customer standpoint. We have heard, as you probably have in the press discussions about federal permitting on private land, et cetera, et cetera, whether that be FAA or 404 permits from Army Corps of Engineers, et cetera. But again, from our perspective, we have not seen a direct impact at this point.

Mark Strouse: Okay. And then just a couple of modeling questions, if I can. So the start-up going to 24/7 with a couple of lines in Mexico. It sounds fairly immaterial from a transition expense, but just wanted to see if you could quantify what that impact might be in 1Q. And then obviously, there was a lot going on in 2024 with utilization rates on a quarterly basis. Just curious how we should be thinking about — you’ve guided to 85% for the year, but how should we be thinking about that kind of on a quarterly cadence?

Ryan Miller: Mark, I’ll start with investments we’re making in 24/7. So it’s — as we move forward, we’re converting 4 factories down in Mexico, the 24/7 operations. And some of that’s behind us in Q4. It was — we invested a couple of million dollars towards the end of Q3 and then a couple of more million in Q4. It will probably end up being $4 million, $5 million that we’ll invest in that with most of that being in the first quarter, and then that will more than pay itself back in the second half of the year as we get that increased volumes. Mark, I apologize, I was staring another question. Can you repeat your second question?

Mark Strouse: Yes. Sorry, Ryan, try to jam it in there. Just how to think about utilization rates throughout the year on a quarterly basis?

Ryan Miller: Yes, so the first quarter is going to be kind of traditionally, it’s our weakest quarter as we get things ramp back up after the holidays. For the year, we’re expecting mid-80s. The second and third quarter will be our best quarters as they traditionally are and the third quarter will probably be a little bit better than the second. I would expect that our first quarter will be somewhere around the 70-ish percent range, maybe low 70s because we are — we have 6 lines in start-up and transition and 4 of those lines will be in existing plants that will be starting up in the first quarter. And then the other 2 lines are in Iowa that will start up probably towards the tail end of the second quarter. But for the first quarter, it will be our weakest kind of think in the low 70s and then migrating up to the mid- to upper 80s in the second and third quarter with some opportunity to go a little bit above that, depending on how successful we are in converting to 24/7 and how rapidly that pays off.

Fourth quarter will probably step down just a touch as it usually does with the holidays for us.

Operator: [Operator Instructions] We’ll go next to Andrew Percoco with Morgan Stanley.

Andrew Percoco: I wanted to start out with the question on demand at the onset or at the start of the call, you talked about strong demand out of your facilities in Mexico. And I guess I’m just trying to cross some commentary that we’re hearing out of one of your big customers in North America. Really highlighting that demand for onshore wind remains relatively soft outside of repowering. It feels like repowering might be the area of strength. So is it fair to conclude that the demand that you’re seeing in 2025 for North America is mostly driven by the repowering opportunity? And then, I guess, second to that, if that is true, and this is mostly repowering, how are you conversing with your customers to ensure that utilization remains steady beyond 2025, just given how lumpy repowering can be?

Bill Siwek: Yes. I guess I would say there’s probably a portion of our production that’s going to repowering, Andrew. But we’re working off their backlog. And I think the latest I heard was soft order volume in the first half, but that doesn’t mean that we’re not fulfilling orders from last year or the year before. So again, our demand from our customers for ’25 is, as I said, we’re all out in our Mexico plants. We don’t know what volumes look like yet from a firm perspective for ’26 and beyond. That we’ll learn about that a little bit more as we get through the first half of the year. But from a ’25 perspective, the demand remains strong. We haven’t seen any let down from that perspective. And my guess is there is a share of that, that is repowered just given the size blades we’re building. But again, I — we haven’t seen anything — any meaningful drop-off or indications of drop off for 2025 deliveries at this point.

Andrew Percoco: Okay. That’s helpful context. And maybe just a follow-up on the tariff point for a second. You obviously have a 90-day window here of delay on tariffs in Mexico. But curious how the conversations have gone with the customers. What are the sharing arrangements look like? Are they built into the contract? Or is it more a delivery by delivery, negotiation with the customer in terms of who’s bearing the risk associated with those tariffs?

Bill Siwek: Yes. Most of it are driven by the standard Incoterms in our Pos or our contracts. So in some cases, we are ex-works, which means as soon as we complete the blade and roll it out the doors of the factory, it becomes the responsibility of our customers. So they would be responsible for any import duties or export duties. And so that’s the case with our contracts, with our customers out of Mexico is that our customers today are responsible for tariffs or border taxes, if you will. So the discussions we’re having with our customers are, we don’t know what’s going to happen. We’ve looked at options as far as accelerating delivery or not. Obviously, we continue to look at footprint from a long-term standpoint. But right now, it’s business as usual.

And contingency planning in the background on what we may do if those tariffs come into play. And just remember, if you look at the overall cost of a blade compared to the entire turbine itself as well as balance of plant, it’s about 17%. So if you — even if it was a 25% tariff, and again, I’m not downplaying the impact, but it’s about a 3% to 4% impact on the overall cost. Wood Mackenzie just put out a study that said a 7% to 10% for the entire turbine if those 25% tariffs went into effect for both Canada and Mexico based on their estimate of what’s sourced from both countries. So again, when and if they come into play, we will have alternatives there, and we will look at options with our customers. But again, whether they come into play or not is still a big question at this point.

Operator: We’ll go next to Eric Stine with Craig-Hallum.

Eric Stine: So you had mentioned on your last call and also on this call, additional manufacturing capabilities that you’re looking for, I believe, in the United States to meet demand here in ’25, given that Mexico’s full conversations with potential partners. So just curious what are the next steps that maybe we should look for there? And then curious how do you balance that and the potential investment with some of the uncertainty beyond 2025?

Bill Siwek: Yes. So there’s two things there. We’ve got the facility in Iowa that we’ve talked about that we are in the process of ramping as we speak and expect to start production there in the middle of the year on 2 lines. So the question there is do we go to more than two lines? And when do we go there? And I think, Eric, to your point, our customer will wait until there’s a little bit more certainty with respect to policy and demand before we make a decision to expand beyond the two lines. The other facility, I think we are in discussions as far as timing on that. Again, that one will — the actual timing will probably — will depend on ultimate certainty with policy and when we have some certainty. That was really never meant for 2025 volume.

That was always a ’26 and beyond opportunity as far as from a volume perspective. So again, once we have a little bit more certainty from a policy standpoint, whether it’s related to the IRA tariffs, et cetera, then we’ll be able to finalize what the plans are for that second facility.

Eric Stine: Got it. Well, and I guess the fact that is thinking about 2026, I mean I guess that’s a little bit of a counter to the narrative that there is quite a bit of uncertainty into that versus ’25, but I guess we’ll wait and see on that. Maybe just on start-ups and transitions, I know 2024 was a heavy year, part of that by design expected for ’25 to be lower. Is it early enough? Is it too soon to have a view of what 2026 might look like? Just trying to judge without looking for an outlook, what your momentum might be entering the year?

Bill Siwek: Yes. I would — Eric, I think other than new capacity, if you will, or I’m sorry, filling existing capacity, so as you know, we have 4 lines of capacity available in India. And we’ll have — we have some capacity available in Turkey as well as then the capacity in Iowa. So I would say if demand — if we get some level of certainty and policy in the U.S. and demand rebounds after we have some certainty, then you could see some startup or transition if we — if the uncertainty remains and the demand for ’26 remains soft, my guess is you won’t see any lines being started or transitioned quite frankly. So kind of a long answer and kind of a depends answer. But if demand solidifies, you could see some activity, if demand remains soft because of uncertainty and policy then I would suggest there probably will be very few transitions.

Operator: We’ll move next to Jeff Osborne with TD Cowen.

Jeff Osborne: Bill, a couple of quick ones. On the — is there a way you could just give us a high-level walk between the 2% to 4% EBITDA margin guide relative, if I heard you right, I think you said 5% is what you reported in Q4 ex the numerous onetime items? Like what’s the drag relative to what you saw in Q4?

Ryan Miller: Yes, we can kind of start with just kind of as we think about where we ended for the year. Bill mentioned on the prepared remarks that we expect to be up $80 million plus in EBITDA from last year to this year. Probably a couple of things I’d point to is, one, the Nordex Matamoros losses are behind us. That’s in the range of 30-ish or so for the year — or for the impact this year. And the other thing is our start-up and transition costs will probably be — probably less than half of what they were this year. And then as we think about the other moving parts, volumes up, we’ll have good flow on that. We have a lot of cost savings initiatives. We expect warranty to be down a little bit, so that will be a benefit to us.

But to your question on what the drag is, it really relates to the underutilized factories we have in Turkey and India. Those factories as we look out at our volumes next year, they are a headwind for us. We have a lot of really good growth in Mexico and the start-up in Iowa, but the underutilization is the drag and in addition to that, is continued inflation in Turkey with the production that we do have. So that’s really where the drag is at with the underutilization of those factories and inflation.

Jeff Osborne: That’s helpful. And then just 2 rapid fire ones. Does the CapEx guide assume the second facility is built out in the U.S. or no?

Ryan Miller: It does not. No.

Jeff Osborne: Does not and remind me, what would that be if you proceeded with that? Or would you elect to do Iowa first and then build out after that?

Bill Siwek: Well, yes, that depends. But if you’re talking about the other facility, the CapEx is probably in the $30 million range.

Jeff Osborne: Got it. And then in your prepared remarks, Bill, you mentioned sort of a drag on EBITDA for reported numbers if I heard you right, a change to legacy warranty. What was the nature of that? Can you articulate what that was and what the remediation was?

Bill Siwek: It’s just kind of normal course warranty that we are working through and changes in estimates just based on inflation and cost and execution of the actual warranty program. So it’s just — it’s stuff from a few years back.

Jeff Osborne: Okay. So there’s no noticeable change in field performance or quality control or anything like that as it relates to the new program that you announced on the call, the Blade Assure program, I just want to make sure those 2 things aren’t linked.

Bill Siwek: No, they are definitely not linked. Our quality performance over the last year, two years, has been actually been very, very solid.

Operator: We’ll move next to Justin Clare with ROTH Capital Partners.

Justin Clare: So wanted to just start out on the Q4 results. So utilization in the quarter was actually quite strong at 91%, but the gross margins were negative 1%. So I would have anticipated something a bit higher there and you mentioned the cost-to-cost method that you use as well as a reduction in inventory, I just wanted to see if there were any other notable factors in the quarter, product mix, warranty charges that drove the margin results? And then do you see reversal potentially in the inventory as we move into Q1 that could support margin expansion.

Ryan Miller: Justin, I would start with — I think you got the moving parts there. What Bill talked about, was about a 5% margin without the reduction in work in process inventories that we had, without some of the investments we made in 24/7 operations and without the — there’s a — you’ll see in the warranty footnote, there’s a net $6 million charge in there that we took. So that was the amount. So if you back all those things out, it’s we’re around 5% or so in margins for the quarter. So that’s where we’re at as far as for the year. I would tell you that we also have a lot, as we look forward to ’25. There’s a lot of cost reduction initiatives that we’re working through in our Mexico operations. You’ll be able to follow those — our Mexico sites along as we get those all ramped up. We had a lot of start-ups and transitions that we’re now maturing. And so that will be an area as we move forward that you’ll see a large improvement on as we go forward.

Justin Clare: Okay. Got it. And then you also mentioned the underutilization in Turkey as a drag in 2025 here. Just wondering following the restructuring actions that you’ve taken, can you generate positive EBITDA in 2025 from that facility or do you need to take further actions? Or do you see any potential for policy changes in Turkey that might support that improvement there?

Ryan Miller: Yes, while we’re challenged there, we will have positive EBITDA in Turkey for the year for those 2 plants combined. So we do feel like we’ve taken the prudent actions to keep those factories in a cash positive position as we move forward. There are 2 lines, as we mentioned earlier, that we do plan that will likely go away in the middle of the year. And so that will drive a further headcount reduction at that time. That will happen around the middle of the summer in the June, July time frame.

Operator: [Operator Instructions] With no other questions holding, I will turn the program back over to Mr. Bill Siwek for any additional or closing remarks.

Bill Siwek: Thank you again for your time today and your continued interest and support of TPI until next quarter. Thank you.

Operator: Thank you, sir. Ladies and gentlemen, that does conclude today’s program. Thank you for your participation. You may disconnect at this time.