TPI Composites, Inc. (TPIC), a leader in wind blade manufacturing, reported a modest revenue increase in its third quarter of 2024 earnings call. President and CEO Bill Siwek highlighted a 2.8% rise in net sales to $380.8 million and a significant jump in Adjusted EBITDA to $8 million, up from $0.2 million the previous year.
The company is undergoing a strategic transition with 10 production lines shifting to next-generation blades and plans to reopen its Iowa plant by mid-2025. Despite a projected 40% drop in Turkish volumes for 2025 and a revised adjusted EBITDA outlook to a loss of about 2% for 2024, TPI remains positive about its long-term growth prospects in the U.S. market and its service operations.
Key Takeaways
- Net sales rose to $380.8 million in Q3 2024, a 2.8% increase from the same period in 2023.
- Adjusted EBITDA improved significantly to $8 million, compared to $0.2 million in Q3 2023.
- TPI is transitioning to next-generation blades and plans to reopen its Iowa plant by mid-2025.
- Revenue guidance for 2024 is approximately $1.35 billion, with adjusted EBITDA expected to show a loss of around 2%.
- The company faces a 40% reduction in demand from Türkiye, primarily due to lower orders from Nordex (ETR:NDXG).
- The service operations and maintenance business is now EBITDA positive.
- New board member Jennifer Lowery joined effective November 13, 2024.
Company Outlook
- TPI anticipates a strong U.S. market demand and is committed to achieving long-term growth targets.
- Plans for operational efficiency include transitioning plants to 24/7 schedules and reducing work-in-process inventory.
- The company is exploring the potential for capacity expansion at a brownfield site, with details expected in early 2024.
Bearish Highlights
- The company expects a significant volume drop in Türkiye, influenced by broader European market conditions.
- Adjusted EBITDA guidance for 2024 has been revised to a loss of around 2% due to challenges in the Turkish market.
Bullish Highlights
- TPI reported growth in wind blade tooling and related sales, driven by higher average sales prices and favorable currency fluctuations.
- Field service sales increased by 45.8% to $11.7 million.
- The company ended the quarter with $126 million in cash and improved negative free cash flow.
Misses
- Production decreased by 10% due to start-up challenges and market activity declines.
Q&A Highlights
- Siwek reported substantial growth in the service operations and maintenance business, now EBITDA positive.
- The Iowa facility is expected to reach full production by Q4 2023, with minimal capital expenditures.
- Ryan Miller addressed the tempered EBITDA guidance for 2024, citing dynamic conditions in Türkiye, but projected stronger U.S. market performance in 2025.
TPI Composites' third-quarter earnings reflect a company navigating through industry challenges while leveraging strategic growth opportunities. With a focus on operational efficiency and market demand, TPI aims to maintain its position in the renewable energy sector despite facing headwinds in the Turkish market.
InvestingPro Insights
TPI Composites' recent earnings report paints a picture of a company in transition, facing both challenges and opportunities. To provide additional context, let's examine some key metrics and insights from InvestingPro.
According to InvestingPro data, TPI Composites' market capitalization stands at $130.77 million, reflecting its current position in the wind blade manufacturing sector. The company's revenue for the last twelve months as of Q2 2024 was $1.29 billion, which aligns with the guidance of approximately $1.35 billion for 2024 mentioned in the earnings call.
However, the company's financial health presents some concerns. An InvestingPro Tip indicates that TPI Composites "operates with a significant debt burden" and "may have trouble making interest payments on debt." This is particularly relevant given the company's revised adjusted EBITDA outlook to a loss of about 2% for 2024, which could further strain its financial position.
The stock's recent performance has been challenging, with InvestingPro data showing a 38.16% price decline over the past month and a 27.31% drop over the last six months. This aligns with the InvestingPro Tip that the "stock has taken a big hit over the last six months." The current stock price represents only 46.96% of its 52-week high, suggesting significant downward pressure.
On a more positive note, an InvestingPro Tip points out that the "RSI suggests the stock is in oversold territory," which could indicate a potential for a price rebound if market sentiment shifts. This could be particularly relevant as the company moves forward with its strategic transitions and potential U.S. market growth.
It's worth noting that InvestingPro offers 13 additional tips for TPI Composites, providing a more comprehensive analysis for investors looking to delve deeper into the company's prospects.
As TPI Composites navigates through its operational challenges and market dynamics, these financial metrics and insights offer valuable context to the company's current situation and future outlook.
Full transcript - TPI Composites Inc (NASDAQ:TPIC) Q3 2024:
Operator: Good afternoon, and welcome to TPI Composites' Third Quarter 2024 Earnings Conference Call. At this time, I'd like to turn the conference over to Jason Wegmann, Investor Relations for TPI Composites. You may begin.
Jason Wegmann: Thank you, operator. I would like to welcome everyone to TPI Composites' third 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 am here with Ryan Miller our CFO. Please turn to slide 5. Our third quarter was a big improvement over the first half of the year as we were able to post positive adjusted EBITDA and operating cash flows, driven by the actions we've taken to restructure our portfolio and transition 10 lines to next-generation workhorse blades. It's also nice to get back to growth mode as our sales grew 23% sequentially over the second quarter of this year and 3% over the third quarter of last year. We believe our strategic positioning with our key customers will enable sustained long-term growth. We continue to engage in productive discussions with our customers to understand their priorities and collaborate on mutual success. As quality remains paramount, we have continued to maintain a measured and controlled approach to increasing production on new lines in Mexico to ensure a smooth transition. We remain confident in our ability to meet customer demand and anticipate finishing the year on a strong trajectory for 2025. Discussions with customers on further expansion of our footprint continue. We've agreed with GE Vernova to reopen our Iowa plant in mid-2025 to support their 2-megawatt platform, which has proven to be a popular option for repowering. Discussions with other OEMs are progressing based on expected US market expansion where we have recently secured additional US manufacturing capacity as well as to serve the burgeoning onshore wind market in India as well as the Türkiye market given the recent announcements by the Türkiye government to increase its wind capacity threefold to 30 gigawatts by 2035. Although the details on local content are still being finalized, it is anticipated that much of what will ultimately get installed in Türkiye will either require blades that are manufactured locally or will provide additional incentives from locally produced blades. We see this development as a potential positive for our long-term operations in Türkiye. From an operational perspective, sales for the quarter were $380.8 million, and while impacted by slower than originally planned production ramps, we were in line with our expectations and full year guidance. Adjusted EBITDA of $8 million in the quarter marks our expected return to positive EBITDA. However, it was lower than expected due to several factors. First, our measured approach to transitions and start-ups to ensure adherence to increase quality standards for new blades and complex blade models extended our start-up and transition time lines leading to about $15 million in lower sales along with higher start-up and transition costs at two of our facilities which impacted our adjusted EBITDA by approximately $5 million. This approach, however, ensures we can deliver increased volumes in 2025 and beyond, more efficiently and profitably. Second, inflation in Turkey led to a $4 million negative impact. Third, we recorded a $7 million change in estimate for legacy warranty matters to account for updated information revised inspection and repair procedures implemented during the quarter of course inflation. Finally, to support demand needs for the US market in 2025 and beyond, we began investing additional resources to enable a 24/7 schedule at certain of our Mexico facilities. This will enable additional volume off the same number of lines with no or minimal CapEx, which will drive lower per blade costs and improve our long-term competitiveness. When looking at our ongoing operations without the specific charges, I just outlined, our adjusted EBITDA margin in the third quarter would have been north of 6%, showing progress towards our long-term EBITDA targets. Utilization in the third quarter jumped to 89% as seven of the 10 lines in start-up or transition achieved full rate production with the remaining three lines expected to get there in the first half of the fourth quarter. Globally, we delivered 601 blade sets representing 2.5 gigawatts of capacity during the quarter. Please turn to Slide 6. As we move into the fourth quarter, all our regions are expected to be EBITDA positive with anticipated utilization rates over 90%. The fourth quarter is also expected to be our strongest free cash flow generation quarter of the year. Our continued focus on lean principles and quality management has enhanced our production quality and improve our cost structure, but we still have significant opportunities. So, we'll continue to focus on eliminating waste and streamlining processes to achieve higher efficiency and reduced operating costs. Moving forward, we will continue to invest in innovation and technology, ensuring we strengthen our competitive edge and position TPI as the premier blade provider in the onshore market. Our supply chain continues to operate effectively with overall raw materials estimated to decrease year-over-year in 2025 by nearly 8% while logistics costs have been somewhat volatile during 2024 given multiple global events our procurement strategies have minimized any operational and financial impacts. We expect the same during 2025. With respect to the wind market, geopolitical events around the world have accelerated regional needs for energy independence and security. The global demand for clean energy continues to rise, driven by factors such as the growing need for data centers, semiconductor chip manufacturers, the adoption of electric vehicles, the electrification of buildings, and the desire to provide for this through net zero sources. Over the course of the past few years, we have seen numerous government policy initiatives aimed at expanding the use of renewable energy including the passing of the IRA in the U.S. and several policy initiatives in the EU that are expected to simplify regulations, speed up permitting, and promote cross-border projects to accelerate climate neutrality. We expect these trends in governmental policy will enable long-term revenue growth in the global onshore wind industry. Notwithstanding the recent U.S. election results, we are encouraged by the near-term demand we are seeing from our customers and therefore, anticipate continued revenue growth for TPI in the U.S. in 2025. We expect this growth will be supported by blade lines operating at near full capacity throughout 2025, along with the planned reopening of our Iowa blade plant by mid-2025. While the past nine months have presented challenges, we believe we are strategically positioned with the right customers and blade types to thrive in the U.S. market for years to come. Although it is too early to assess the impact of the outcome of the U.S. election, many analysts believe that if President-elect Trump tries to roll back the current administration's climate agenda including the IRA in part or in full, U.S. wind and solar sectors will remain resilient due to a strong state level support including significant renewable manufacturing investment in red states, increasing private sector demand for power that will dictate an all-of-the-above approach to capacity deployment, and a relatively strong Republican support in Congress. Turning to Europe. Long-term onshore market growth remains in sight. However, these markets are dealing with many of the same issues as in the U.S., namely inflation, permitting, transmission, supply chain disruptions, and labor availability. Historically, we have serviced the European market from our plants in Türkiye. However, the hyperinflationary environment that we have experienced in recent years in Türkiye is not expected to subside anytime soon and although we can pass some of the incremental costs to our customers, these incremental costs make us less competitive into the EU as well as less profitable. Furthermore, while we have competed successfully with Chinese blade manufacturers for years, their recent aggressive push supported by the Chinese government to expand their capacity for Europe has added to the challenging competitive environment for supply into the EU. Unlike the U.S., which has implemented tariffs and generous tax loss to encourage near-shoring and domestic manufacturing, the EU has not yet taken as aggressive an approach to help level the playing field for component suppliers like TPI. Nordex our largest customer in Türkiye has eight production lines scheduled to expire by the end of 2025. Additionally, they have two lines in India that expire at the end of 2024. Nordex has informed us that they will not renew the two lines in India. However, we have already replaced those lines with two lines for Vestas. While we are committed to our long-term relationship with Nordex and Türkiye and elsewhere, it is uncertain whether or not they will extend their contracts beyond 2025 at this time. However, I would suggest that should the recently announced plans of the Turkish government play out as we expect, demand for that capacity should be robust and this would position Türkiye as one of the largest wind markets in the region, given the market share enjoyed by both Nordex and ENERCON both companies stand to benefit from this development. Given the challenges experienced in the third quarter along with the extended transitions and start-ups, we are reducing our adjusted EBITDA outlook for the year to a loss of approximately 2%. However, the fourth quarter is still expected to be EBITDA positive and the strongest free cash flow generation quarter of the year, leading us into what we expect to be a much stronger year financially in 2025. Our current thinking on 2025 in context of the adjusted EBITDA target, we have discussed the last few quarters has evolved based on updated information and customer decisions made in the last few months. While we are still working through our annual plan for 2025, some of these customer decisions are creating some headwinds that are going to be difficult to offset in the near term. The two biggest challenges are related to inflation particularly in Türkiye, and demand in both Türkiye and India from Nordex. While it's still too early to provide you with a lot of specificity and therefore, formal guidance for 2025, we currently expect volumes for lines under contract in Türkiye to be down approximately 40% in 2025, compared to previous expectations. These factors have created a volume shortfall for us compared to what we had previously anticipated in 2025. We are working to replace that volume as well as exploring other strategic alternatives to maximize the value of our Türkiye operations. 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 third quarter of 2024, net sales were $380.8 million compared to $370.2 million for the same period in 2023, an increase of 2.8%. Net sales of wind blade tooling and other wind-related sales increased by $6.9 million or 1.9% to $369.1 million for the three months ended September 30, 2024 as compared to $362.2 million in the same period in 2023. The increase was primarily due to higher average sales prices of wind blades due to changes in the mix of wind blade models produced, in particular the startup of production at one of our previously idled facilities in Juarez Mexico, favorable foreign currency fluctuations and an increase in wind blade inventory included in contract assets driven by the start-ups and transitions. The increase in wind blade inventory directly correlates to higher sales under the cost-to-cost revenue recognition method for our wind blade contracts. These increases were partially offset by a 10% decrease in the number of wind blades produced, due primarily to the number and pace of start-ups and transitions and expected volume declines based on market activity levels. Field service inspection and repair service sales increased by $3.7 million or 45.8% to $11.7 million for the three months ended September 30, 2024 as compared to $8 million in the same period in 2023. The increase was due primarily by the return of technicians deployed to revenue-generating projects versus time spent on nonrevenue-generating inspection and repair activities. Adjusted EBITDA was $8 million for the three months ended September 30, 2024 as compared to adjusted EBITDA of $0.2 million, during the same period in 2023. Adjusted EBITDA margin was 2.1% as compared to an adjusted EBITDA margin of 0.1% during the same period in 2023. The increase was primarily driven by the absence of losses from our Nordex, Matamoros facility, which was shut down at the end of the second quarter of 2024, benefits from foreign currency fluctuations, lower charges for changes in estimate for preexisting warranty campaigns, a reduction in general and administrative costs due to lower employee compensation costs and an increase in revenue. These improvements were partially offset by increased labor costs in Türkiye and Mexico and higher start-up and transition costs. Moving to Slide 9. We ended the quarter with $126 million of unrestricted cash and cash equivalents and $606 million of net debt. Free cash flow was a negative $5.6 million in the third quarter of 2024 compared to negative free cash flow of $20.8 million, in the same period in 2023. The net use of cash in the third quarter of 2024 was primarily due to interest and tax payments and capital expenditures, partially offset by positive adjusted EBITDA and other working capital changes. Notably, operating cash flow was a positive $1 million in the quarter. We believe our current cash position provides us the flexibility to meet near-term demands of the business and continue to invest in growth for lines under rooftop today. In the fourth quarter, we expect positive free cash flow on lower start-up and transition costs, working capital improvements and positive EBITDA. A summary of our financial guidance for 2024 can be found on Slide 10. We are narrowing our full year 2024 revenue guidance to about $1.35 billion, which is in the middle of the previously guided range of $1.3 billion to $1.4 billion. For adjusted EBITDA, we are lowering our guidance to a loss of approximately 2% compared to the previous guidance of a positive adjusted EBITDA margin of approximately 1%. This adjustment reflects the impact of our actual results in the third quarter, as well as the quality-focused moderation of our start-ups and transitions. This adjustment also reflects investments, we are making to divert some of our plants to 24/7 schedules, so we can produce more blades next year on our existing lines in Mexico to support strong demand in the U.S. And finally, similar to the fourth quarter of last year we are planning to reduce our work-in-process inventory, which will create negative cost absorption impacts in our factories. This reduction is partially driven by four lines that we'll be transitioning over year-end and we are also planning to drive our work-in-process inventory levels down to free up cash on our balance sheet. For the full year, our utilization guidance remains unchanged at 75% to 80% and we anticipate capital expenditures of around $30 million, which is at the top end of our previously guided range of $25 million to $30 million. These investments including significant investments in innovation and technology are driven by our continued focus on achieving our long-term growth targets, which also include investments in new lines in Iowa and India in the fourth quarter. With that, I'll turn the call back over to Bill.
Bill Siwek: Thanks, Ryan. Please turn to slide 12. While we remain optimistic about achieving our long-term targets the timing has shifted to the right a bit based on overall market conditions increased competition outside the US, and a more deliberate approach to transitions and start-ups, to ensure initial blade quality for new designs, and to ensure stability of the process to enable long-term successful serial production. We are encouraged by the progress we've made over the past year including shedding the losses from both the Nordex Matamoros plant and the automotive business starting up or transitioning 10 new lines with workhorse blades and making significant improvements in streamlining operations and improving quality all, while doing it as safely as we ever have. We expect to close out 2024 with our best quarter financially in the year, while generating positive free cash flow and setting us up for a strong 2025. Before we open the call for Q&A, I want to once again extend my gratitude to all our TPI associates for their continued commitment and dedication to TPI and our mission to safely decarbonize and electrify the world. And I want to welcome Jennifer Lowery, our newest member of the Board of Directors effective as of November 13, 2024. Jen brings over 25 years of experience in the energy sector, including senior positions with Exelon (NASDAQ:EXC), Constellation Energy (NASDAQ:CEG), and AES (NYSE:AES) among others and currently serves on the Boards of Clearway Energy (NYSE:CWENa) and MYR Group (NASDAQ:MYRG). Jen is a great addition to our Board, and I look forward to working with her in the future. I'll now turn the call back to the operator to open the call for questions.
Operator: Thank you. [Operator Instructions] We'll go first to Eric Stine with Craig-Hallum. Please go ahead. Your line is open. Mr. Stine, your line is open. Please check your mute button. We'll move next to Mark Strouse with JPMorgan.
Mark Strouse: Great. Thank you very much for taking our question. Bill I take your point that, it's too early to kind of have a whole lot of visibility post election. But one of the things that has been thrown out there is potential for increased tariffs coming into the US. Can you just remind us on your contracts that you have with your facilities in Mexico, how do those contracts work? If there are new tariffs that come on in the middle of a contract who bears that risk and then kind of a quick follow-up on that point is, I mean, are there any kind of contingency efforts that you're looking at as far as potentially moving that production into the US.
Bill Siwek: Yeah. Hey, Mark, thanks for the question. I mean we -- if you recall way back in the day there was a threat of tariffs before and we did a bunch of work there. It depends a little bit on the contract and on the terms. Generally, it would be included in the cost of the product the tariff. But again, it's a little bit -- it gets a little specific by customer depending. So I can't give you a precise answer on that right now. But we'll -- obviously we'll monitor that we'll look at that, but I don't anticipate that being a big issue for us. And we are continuing to look at additional -- you might have picked up. We did secure some additional capacity in the US. And so we will continue to look at US capacity as well but we don't anticipate we'll have any issues with what we've got in Mexico at this point.
Mark Strouse: Okay. Thanks, Bill. And then Ryan just a quick follow-up. So I take your point about kind of the volume in Türkiye down more than you're expecting -- more than you were previously expecting in 2025. The target that you've thrown out there for more than $100 million in EBITDA next year is that off the table now? Or are you able to provide any more color on what that could potentially look like?
Ryan Miller: I guess what I can do is a couple of things. One I think volume-wise we're still expecting growth next year on the top-line. The strength that we have in the US market and some of the investments we're making to go to 24/7 shifts in Mexico is a signal from us. We got a really strong demand in the US. So I expect that volume to outpace that reduction that we quantified for Turkey. I think it's a little too early for us right now. We're currently reacting and planning and figuring out where we can optimize things. And so I kind of put you on hold until we get to -- when we announce the fourth quarter earnings we'll give you an update there on the earnings side of things.
Mark Strouse: Okay. Thank you.
Operator: Our next question will come from Pavel Molchanov with Raymond (NS:RYMD) James. Please go ahead.
Pavel Molchanov: Thanks for taking my question. Let me zoom in on Turkey as well. The fact that you're seeing as you said 40% lower demand versus prior expectations is that relating to lower wind newbuilds in Turkey domestically? Or is it something happening in the broader European conversation?
Bill Siwek: Hey, Pavel, thanks for the question. I think it's more the latter. There's -- some of it is a shift to Chinese suppliers. And part of it is lower demand next year whether it be in Turkey or in the broader -- the wider European market. It's a combination of both.
Pavel Molchanov: Why do you think Europe is struggling? I mean I asked because it was less than two years ago Europe was running out of gas quite literally and we saw record new builds?
Bill Siwek: Yes, it's a lot of things. It's not that there's not demand. I mean they've got -- but they have similar challenges in Europe as we do in the U.S. as it relates to permitting transmission the grid. It's different country by country. So there are a lot of different factors there. So it's really -- there's a desire for it there's the demand for it. We've got the capacity to deliver it but it's really challenges around more of the regulatory side than anything that's creating the problems or the delays I should say.
Pavel Molchanov: Okay. Last question. What is the latest on the kind of service operations and maintenance business unit that you guys have been working on?
Bill Siwek: Yes. So you might have heard we grew fairly substantially the top-line this last quarter and that's partially just a shift of resources from some of the warranty and sparing inspection work we were doing into more revenue-generating work. We're going to continue to grow that business. We see pretty healthy growth next year both in the US and in Europe. So that is -- that does remain a focus for us Pavel to continue to grow that business alongside our manufacturing business.
Pavel Molchanov: And is that line item EBITDA positive?
Bill Siwek: Yes. It was pretty close to breakeven the last couple of quarters because of the amount of work that we were doing on inspection and repair. But moving forward it's certainly EBITDA positive.
Pavel Molchanov: Okay. Thanks very much.
Bill Siwek: Yes. Thanks, Pavel.
Operator: Our next question will come from Justin Clare with ROTH Capital Partners (WA:CPAP). Please go ahead.
Justin Clare: Yes. Hi. Good afternoon.
Bill Siwek: Hey, Justin.
Justin Clare: So I wanted to just dig into Iowa a little bit more here. I was wondering if you could just share specifically how many lines are being added in that facility and then if you could talk about CapEx requirements or the potential start-up costs that could be incurred in ramping that up? And then just in terms of the timing, how should we think about the revenue impact there? Could you be kind of ramping volumes in Q3 and then at full capacity in Q4? Or how should we think about that?
Bill Siwek: Yeah. So the current plan is two lines ramping in the back half of the year as you suggest. So ramping in Q3 getting up to kind of full production speed by the fourth quarter. Pretty minimal CapEx, Justin, I mean we're going to be building the same blade that we were building before in that factory. So there's not a ton of CapEx. There's a little bit of upgrade that we need to do but pretty minor. And then start-up costs will be pretty minor as well, a couple of million dollars. But for the year we'll be about breakeven from an EBITDA standpoint for next year. So we'll have some start-up costs early that will then recapture as we begin delivering blades in the back half of the year.
Justin Clare: Got it. Okay. And then I thought you mentioned earlier that you did secure some additional capacity in the US. It sounds like that's beyond this facility. I was wondering, if you could just elaborate on that a little bit. Is that a greenfield facility or another blade facility that you may be taking over? And then any sense for timing and the amount of capacity that could be added would be helpful.
Bill Siwek: Yeah ,it's a brownfield. So it's a former blade facility. The capacity depending on the size of the blade is upwards of four lines of capacity. And timing is still -- but we're working on a number of options there. But we do have the capacity and it does provide us with some -- it's a very good geographic location to serve some pretty important and large wind projects. So we're pretty excited about it long-term. But that's more to come on that probably early next year.
Justin Clare: Okay, got it. Appreciate it.
Bill Siwek: You bet.
Operator: [Operator Instructions] We'll return to Eric Stine with Craig-Hallum. Please go ahead.
Eric Stine: Hey, Bill, thanks for taking the questions
Bill Siwek: You bet.
Eric Stine: I'm jumping around on call. So I can pretty much guarantee, I'm asking one that you've already addressed. But I know you tempered 2024 EBITDA guidance a little bit. Just curious, I'm reading through the deck I didn't see it stated, but how you feel about -- you previously said $100 million plus in EBITDA in 2025. I mean given the confidence you are talking about in the US, is it fair to say that that is something that you feel good about?
Ryan Miller: Hi, Eric this is Ryan. I'll start with -- as far as where we think we're going next year, we're still digging into things right now. It's been a pretty dynamic environment with some of the volume in Türkiye. And I would also say the inflation impacts in Türkiye they're probably a little outsized from what we would have expected a few months back for what we're thinking we're going into the year with. So we're doing some pretty detailed planning right now. And again I'd just say stay tuned. We will provide guidance and our expectations as part of our Q4 call, but we do want to just make sure we're being as transparent as possible that we do see some volume that's weakened now in Türkiye particularly with Nordex.
Bill Siwek: With that said though Eric I mean with the volume decline in Türkiye we're actually going to see pretty significant growth in the U.S. So top line-wise we expect to be better in 2025 than we are in 2024. So, notwithstanding, the challenges for the European market, top line we look pretty good. But as Ryan mentioned there are some other headwinds that we're working through.
Eric Stine: Yes. Totally understand. But it is fair to say that -- I mean, it seems pretty clear to me that even in a quarter, I mean you were already positive about the U.S. but even a quarter later you are more positive, incrementally more positive on the US. Is that fair?
Bill Siwek: Yes. We feel -- again just based on what our customers are asking for we feel we're going to have a very strong 2025.
Eric Stine: Okay. Thank you.
Bill Siwek: You bet. Thank you.
Operator: [Operator Instructions] It appears that we have no further questions at this time. I'd like to turn the floor over to Bill Siwek for any additional or closing comments.
Bill Siwek: Thank you operator and thank you again everybody for your time today and the continued interest and support of TPI. Look forward to the next quarter. Thank you.
Operator: Thank you. Once again ladies and gentlemen that will conclude today's call. Thank you for your participation. You may disconnect at this time.
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