07
Feb

T.G.I.F.

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Market Sentiment Watch: Coronavirus fears continue to set the backdrop for commodity markets. In today's post please find the the natural gas review (supply is running down 2% YoY now due to off peak dry gas production and rising exports), pre game thoughts on the TPIC investory day (we will have live comments below the post during the 4 hour call today), an updated 4Q19 calendar, and some other odds and ends.  Next week we get the EIA STEO (expect downward revision to Lower 48 oil production), the OPEC monthly, and the IEA monthly (expect downward revision to global oil demand from all 3).

Ecodata Watch:

  • We get Nonfarm Payrolls at 8:30 am EST (F = 164,000, last read was 145,000),
  • We get the unemployment rate at 8:30 am EST (F = 3.5%, last read was 3.5%),
  • We get average hourly earnings at 8:30 am EST (F = 0.3%, last read was 0.1%),
  • We get wholesale inventories at 10 am EST (no forecast, last read was -0.1%),
  • We get consumer credit at 3 pm EST (no forecast, last read was $13 B).

In Today’s Post:

  1. Holdings Watch
  2. Commodity Watc​h
  3. Natural Gas Inventory Review
  4. Stuff We Care About Today - TPIC Investor Day, 4Q19 Calendar Update, PE
  5. Odds & Ends

 

Holdings Watch:

ZLT

Yesterday's Trades:

LBRT – increased exposure, added at $8.44 after the expected 4Q earnings miss. Demand for fleets is high, and they added one fleet after a long wait and have agreed to build another as their focus increasingly targets work for larger, more stable customers. Please see yesterday’s post for additional comments but know that we see 4Q19 results, as previously noted late last year, as the near term trough on a per fleet EBITDA generation basis. This is a Trading position add on top of our core position and LBRT remains our primary Service position in the ZLT.

The Blotter is updated.

Commodity Watch:

Crude oil closed up $0.20 yesterday at $50.95 after a volatile session in which the OPEC+ technical committee was said to recommend further production curtailment of 0.6 mm bopd but in which Russia voiced uncertainty as to need.  This morning crude is trading down slightly.

  • OPEC Watch: -Sources indicate OPEC expects to hear from Russia on whether or not it will agree to further cuts in the next few days.

Natural gas closed essentially flat at $1.86 after EIA reported a larger than expected withdrawal. Note that dry gas production remains over 2 Bcfgpd off recent weekly highs and that we saw another record high for LNG this week and that on a year over year basis, supply (production + net imports) is now down 2% (see supply/demand watch below).  We continue to see trough storage as on track for a sub 2 Tcf landing which as previously noted is far from the end of the world and suggests that prices are over done to the down side. This morning gas is trading flat.

LNG Watch:

  • China's CNOOC declare force majeure overnight,
  • As noted yesterday, this is likely an improper use of force majeure and Total rejected the claim after legal analysis as improper (Shell also received 1 FM notice),
  • The US exports NO LNG to China,
  • Nevertheless, this will weigh on commodity sentiment, (China also declared FM on copper),
  • As noted below, US LNG exports set another record this week, rising to 9.3 Bcfgpd.
  • A few Unowned names in the LNG (producing or transport) space to watch: LNG, GLNG, GMLP, GLOP (the last two are getting crushed sharply to new lows now)

NGL Price Watch:

Short Term Supply/Demand Watch:  Net U.S. natural gas supply now down 2% YoY

Natural Gas Storage Review 

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Stuff We Care About Today

TPIC Investor Day - 2020 Estimates Reduced

2019 Preliminary Results

  • Revenue: $1.42 to $1.44 B vs a previous range of $1.45 to $1.5 B
  • Adjusted EBITDA of $80 to $85 mm (unchanged)

Note: "Preliminary" guidance for 2020 was provided in November 2018.

  • At that time revenue was expected to be $1.7-$1.9 B with EBITDA of $170 to $190 mm.
  • The 2Q19 release saw a downward revision to 2020 guidance with revenue moves to $1.6 to $1.8 B and EBITDA of $140 to $160 mm.
  • The 3Q19 release saw the delay of the investor day due to uncertainty of timing of startups and transitions with some customers. This sent the shares lower initial and we added to our position.

2020 Outlook:

  • Revenue: $1.55 to $1.65 B
  • EBITDA: $100 to $125 mm
  • ASP range of $140 to $150,000 per blade
  • Guidance excludes impact of the Coronavirus though they expect most workers to return to work at the end of February.

Strategy Update:

  • Long term goal has been to have 18 GW of annual capacity in place and annual revenues of $1 B.
  • Long term goal is that EBITDA margins are expected to move to double digit %s (vs 7.2% as of 3Q19).

Market Overview:

  • Expect lengthy overview in today's presentation.

TPIC Initiatives:

  • Expect them to speak to less impact from line transitions

Other Items to keep in mind:

  • Debt: at 3Q19, net debt to annualized EBITDA was 0.3x,
  • Free cash flow for 3Q19 was $42.9 mm and they were $3.6 mm positive through the first 9 months,
  • Short interest is 9% of float,
  • Management has a recent history of reducing revenue guidance.
  • Nearly half of TPIC's sales are to Vestas (VWDRY),
  • As they note, they are the only independent makes of composite blades with a global footprint.
  • As Vestas noted the other day on their year end call, China coronavirus related supply chain delays could occur this year and they specifically noted that delays in things like blades are hard to make up due to curing times of the composites.  We could see incremental production from other non China blade facilities that TPIC has to help alleviate China work stoppages by others.
  • Yangzhou, China startup update: Look for an update during the presentation.
  • Chennai, India construction update: Same.

Presentation Link: Not available at post time.

Webcast: Today, 9 am to 1 pm EST.

Nutshell: Guidance reduction, something that should not be altogether surprising as this team has a recent history of downward revisions. 2020 revenue estimates were already in line with the new range so management has been telegraphing caution; EBITDA is also in line already and consensus is within the upper end of the new band. We have included new guidance in the cheat sheet below. Reaction to the guidance change may be negative initially and then depend on reasoning for the downshift.

4Q19 Calendar Update

Other Stuff

  • PE - priced $400 mm senior notes at par with a 4.125% coupon for 2028. Proceeds to help redeem 6.5% 2024 notes.

Odds & Ends

Analyst Watch:

  • TBA in comments

52 Responses to “T.G.I.F.”

  1. 1
    zman Says:

    MAJORITY OF U.S. FIRMS IN CHINA EXPECT REVENUE HIT DUE TO CORONAVIRUS OUTBREAK – AMERICAN CHAMBER OF COMMERCE SURVEY

  2. 2
    zman Says:

    RUSSIA’S NOVAK SAYS GLOBAL OIL DEMAND MAY DROP BY 150-200 THOUSAND BARRELS PER DAY IN 2020 VS 2019

  3. 3
    zman Says:

    Russian Energy Min Novak: US Oil Production Seen Rising By Less Than 1Mln BPD In 2020

  4. 4
    zman Says:

    TPIC investor day presentation will be here:

    https://www.tpicomposites.com/English/investors/Events-and-Presentations/events/event-details/2020/Investor-Day/default.aspx

  5. 5
    zman Says:

    We will have highlights from the TPIC day in chunks over the next 4 hours. No presentation has been released yet.

  6. 6
    zman Says:

    NFP = 225,000; well above.

    Unemployment = 3.6%.

  7. 7
    zman Says:

    Coronavirus update:

    https://bnonews.com/index.php/2020/02/the-latest-coronavirus-cases/

  8. 8
    zman Says:

    TPIC bid/ask marking lower. Won’t be in a rush to add on the dip, will let them speak.

  9. 9
    zman Says:

    Oil set to test $50 on Russia vs Corona

    https://www.dailyfx.com/crude-oil

    Russia out saying they have seen no impact on their own sales of oil and natural gas to China.

  10. 10
    zman Says:

    NG flat 45 minutes before equity open.

    https://www.investing.com/commodities/natural-gas

  11. 11
    Denise Says:

    Z would you agree .55 cents is accurate number regarding storage costs? From WSJ article about LNG this morning

    “Analysts at Bernstein Research estimate the floor for U.S. gas prices is around $1.70. The analysts arrive at that number by subtracting the cost of storing gas for a season—55 cents or so—from $2.25, which is the price at which they calculate most drillers could sustain production.

  12. 12
    zman Says:

    re 11

    Hey Denise, I don’t have anything current on that but have no reason to reason to dispute the 55 cent level. The methodology for calling a floor however is a bit suspect given that production has a number of drivers not limited to economics of the gas price itself. I think it’s overdone to the downside. I think the gassy side of the industry is taking steps to limit growth (though many capital budgets are yet to be set, we suspect they will be just above or below maintenance level).

    TPIC call should be starting, quiet so far, notes in a bit.

  13. 13
    zman Says:

    TPIC – down 10% at open.

    Taking notes on the presentation.

  14. 14
    zman Says:

    TPIC Investor Day – 1

    China – March 1 reopen of China plans expected. Working to get through it with least amount of issue. Impact uncertain now but thought to be temporary could impact

    54 lines in 2020 (vs the 52 lines show on slide 10). One customer asked for 2 more lines this year.

    Serve 5 of the top 5 OEMs – represent 90% of the ex China blade market, 99% of the US onshore.

    Speaking to challenges of line transitions. Rate of new product introductions has increased. See cutting transition cost times in half and sharing of costs with customers.

    Wind is cheapest form of new electricity in many markets.

    Increasingly less dependent on govt policies.

    LCOE has come down due to towers being taller (better to harvest at higher heights) and blades being bigger. Slide 11 on rotor diameter growth.

    2007 – 46 m
    2020 – 75 meter blades

    blades 15 to 20 tons apiece.

    Electric Vehicles – gaining traction – more on this later.
    – Goal is to build a $0.5 B annual business (bus and other EV composite shells)

    • compare $2 B annual revenue plan for wind.
      • bus products – working to optimize costs
      • announcing Workhorse box van product (looks like a UPS truck)
      • investing, building infrastructure.
      • automated pilot line for rapid composite component manufacture being installed now ($12mm) now in RI.

    Employees – now to 13,300 incl 300+ engineers.

    2019 – execution didn’t meet our expectations – Mexico
    – says Mexico no stabilized – they were cautious on this last call – now saying new labor deal signed 5 weeks early.
    – noted a free building but it was late.
    – bus manufacturing had some delays, all transferred back to RI now.

    • about 72 mm in net debt now, just dipped into the 2016 IPO proceeds during 2019.
    • most investment has come from cash flow.

    • considering future return of capital to shareholders (not this year we think).

    Board comments:
    – strong, independent, diverse board members.
    – noting FSLR (unowned) former CEO, Encap guy on board, clean energy, and auto background adds to board.

    Supply Chain – need to better leverage global scale.

  15. 15
    zman Says:

    TPIC Investor Day – 2

    Global Power Market

    2018 to 2050 – 62% growth

    Onshore wind cost continues to fall.

    Sees capacity factors rising by 50% over this time.

    Costs at best sites below coal, approaching natural gas.

    Wind Market
    – global – steady onshore 62 GW per year adds through 2028.
    offshore growth from 7 GW to 22 GW per year, ramping over the period.

    US market – slide 25 – onshore – right side slide – Iowa / Mexico serves
    EMEA market – steady 20 GW type growth onshore with higher offshore – Turkey facility.
    APAC – also 20 GW type growth – they break out India, on top of that which will grow and be served by the new facility.
    APAC offshore – on slide 28 – China facility on Y river.
    LAM – smaller, slide 29, capacity to serve out of Mexico.

    Safety, Quality, Delivery, and Cost.
    – Safety – slide 31, trend is improving and better than industry for both on recordable and lost time incidents.
    – Quality – decline in defects – slide 32, using a lot more auditing, cut non conformance blades by 24% over last 3 years. Everything transmitted across company to ensure lower defects.
    – Delivery – 24% drop in cycle time last 3 years here as well.
    – Cost – 65% of blade cost is materials, 10% is labor. Have focused with customers and suppliers to get this down. Bill of materials costs down 12% last 3 years and labor hours cut 11% last 3 years.

  16. 16
    zman Says:

    TPIC down 7.5% now.

  17. 17
    zman Says:

    BWEN piece under review at SA.

  18. 18
    zman Says:

    BWEN piece has edits needed as they want to make it an Editors Pick, will get to it this afternoon after TPIC call.

  19. 19
    zman Says:

    TPIC Investor Day – 3

    Start-up and Transition Execution – Speed

    If we cut the time of a transition by one week that’s $200K of EBITDA.
    – comments slide 35
    – key to improvement is collaboration between teams and with customer.

    Impact of transitions
    – slide 36
    – Blue line – EBITDA per line before, during, and after a transition. Shows rapid recovery after transition to higher level than pre transition (new blade presumably bigger)
    – yellow line shows minimum volume levels that occur when customers are not going for the transition but taking the min contract level EBITDA – much lower than just doing transition.

    Technology:
    – added Aero design – design of the external shape.
    – joint prototyping with customers; results in product going to reality faster.
    – see slide 40
    – basically just said investment in tech reduces cost of mats and time.

    Global Supply Chain:
    – slide 42
    – many better raw mats costs noted that slide.
    – core raw mats were up but see that falling in 2020.
    – expanding in low cost regions of Mex and Asia.
    – have been successful in getting suppliers to colocate and expand capacity.
    – India – see as low cost hub, working to qualify chem, fabric suppliers.

    Global Talent:
    – slide 45 – head count growth,
    – Mexico remains largest employee group (about half)
    – ramped up India.
    – hiring, developing, motivating and retaining talent. See slide 46, 47.

    Going to Q&A

  20. 20
    zman Says:

    TPIC Investor Day Q&A

    Q) Supply Chain
    A) we have unmatched global footprint and leverage that in the supply chain. We have a shared pain, shared gain system, we find good deals, we share some but not all of that with our customers.

    We buy more raw materials than any of our customers, so like in Mexico, we have a campus that we use to identify raw material alternatives and leverage one customer’s finds that across other customers.

    Q) Guidance and Corona – can you give us brackets?
    A) Too early, we don’t know it, good news/bad news it hit over Chinese NY, so we are not losing 4 weeks of production, it’s pushed only a couple of weeks and then we can leverage capacity in other parts of the world. But it’s too early to get into now.

    Outside of China impacts – we have very little supplied by China, so no impact on Iowa or Mexico. Turkey, there are some parts challenges that do come from China. We are very tied in with our suppliers and we understand our inventories as well. Logistics could be an issue over in China but we are seeing progress on getting things going. Our footprint allows us to pivot on parts that may not be available form China.

    Q) Transitions – looks like you guys are making great progress, can you quantify how much they have improved over the last year.
    A) Couple of different types – new startup vs just a tip switch. We are getting better, in general, we have a target to reduce time by 15 to 20% on one end to as much as a 45 to 50% reduction (guess that’s on the tip switch only).

    These are not small changes, they are talking about taking a third to a half out of the line transition times.

  21. 21
    zman Says:

    TPIC – its probably safe to buy at this level now, estimates won’t come off much most likely, risk is Corona now.

  22. 22
    zman Says:

    LBRT green.

    Taking copious notes on TPIC Q&A …

  23. 23
    zman Says:

    TPIC Investor Day Q&A 2

    • noted that if they fill the lines at China and India they are at their 18 GW per year capacity target.
    • noted that less of volumes were already coming to the US from China due to tariffs anyway.

    Q) Transition – shorten time by 40%, is that right?
    A) Should be around 30%. CEO jokes no, it’s a 50% goal. Ha. Says they’ve done very well with transitions, still improving, have to improve. With India, they arrive at 18 GW and then when they have transitions there it will go faster, trained workforce, etc.

    Again noting that if they don’t do a transition, they could be subject to minimum take for life of contract. So line transitions are necessary, also goes to their culture as transitions make better blades and they are all about getting LCOE down.

    Cautions you need to think about new startup and transitions as different.

    Q) Labor vs low unemployment. Wage pressure management?
    A) People want to come to us, we are wage competitive but people want to work here, so we can get people.

    Q) Why did you close the bus body plant in Iowa and move it to Rhode Island.
    A) Talent driven, couldn’t get enough, highly skilled labor as IA labor is super low and we already had talented labor in RI.

    Bus and blades seem similar but they are different in terms of skilled labor.

    Q) Transition
    A) setting some limits on when a transition can be done (limited time frame) and then contractually laying out what costs are and what our customers are responsible for. It is a matter of negotiation.

    Notes customers would like to slow it down some as well. Hard them to but it’s a competitive market.

    Q) How to think of transitions count going forward
    A) We think about it in terms of utilization of total lines. We are planning similar # of transitions on an annual basis for the foreseeable future. We think that slows over time but we are planning for it to not slow for some time.

    Customers – price stability, balance sheet strength, return of capital. Saying that’s a bit of push back by them on such rapid product transition.
    but notes competition with solar continues and comp between wind players continues.

    Q) TPIC cost vs customer cost.
    A) without giving names, cycle time is a better measure, and we are 30 to 35% faster than them. We are certainly faster and far more competitive than our customers are (were they to make their own blade).

    15 minute coffee break.

  24. 24
    zman Says:

    TPIC hanging out down 8% at half time on the guidance reduction.

    Quick thoughts:

    1) That they cut guidance is not surprising.
    2) They said Corona not in guidance and that likely scares some but that’s also an out later down the road on future reductions if needed.
    3) They gave strong commentary noted above about how the global footprint will help mitigate impact.
    4) Estimates were already in line with where they took 2020 – see post comments
    5) the cheat sheet above includes new lines for guidance and shows the change and current Street.
    6) Analyst tone is good. They care a lot of about transitions as line transitions are unproductive time that basically is a hit to utilization and EBITDA.
    7) The fact that Mexico now sounds solved and solved early is going without notice in the stock but that’s a big part of the 2019 story hiccup.

    Call to resume in a few minutes, notes to continue …

  25. 25
    zman Says:

    BWEN edits completed, under editorial review at SA again.

  26. 26
    zman Says:

    Oil back to $50.65, after holding $50 earlier.

    https://www.dailyfx.com/crude-oil

  27. 27
    zman Says:

    Someone sent in a note showing -$1.94 Waha (Permian) natural gas basis, yep, Waha has been red last couple of days.

    Also got a note some majors are reinjecting gas now, had not seen anything on that lately but YES PLEASE.

  28. 28
    zman Says:

    TPIC Investor Day – Part II – 1

    Global Service Market

    • massive $ growth expected next 10 years, – slide 62
    • they are becoming more proactive, mitigation of blade failure vs reaction to a blade failure.

    • certified, in house trained, professionals,
    • preventative maintenance
    • do ultrasound inspections in the field (not typical)
    • drone inspections
    • do more out of warranty work
    • field repairs – leading and trailing edge and structural, paint
    • blade enhancements as well – trying to extend blade life beyond 20 years for some operators.

    Recycling – we have heard a lot lately in the market. In some countries it has become illegal to landfill blades, so a market is starting for recycling. Owners want to know what they can do. We have a program started for this to partner with other organizations to address (no details).

  29. 29
    zman Says:

    Diversified Markets – Transportation Space
    – focus on clean transport
    – lighter weight, drives longer range in EVs
    – also non corrosive, allows for complex geometries
    – lower tooling vs metallic by a factor of 10x.
    – will detail the path to get to $0.5 B annual sales
    – focus on bus, truck, auto
    – unibody for bus and truck
    – stronger, lighter weight
    – making doors for GM – think in terms of 100,000’s of units
    – buses will transition quickly to EV, will be 1,200 units by 2025 vs under 400 in 2019. Upfront costs of electric buses are seen as < diesel by 2030.
    – Protera – partnership with them on buses, leading NAM EV buses. 900 on road in US now, placed with over 100 customers across US so far.
    – 40% lighter per bus

    • light truck – massive growth expected, see slide 57
    • collaboration with Navistar, will take learnings from that to other.
    • have a fully composite unibody van – showing orders for EVs from UPS, Amazon (Rivian), FedEx (not TPI, TPI addresses this market, demonstrating now).

    • Passenger EV – will be a player in the automotive EV component space. Says some announced, some not announced.

    • How to do it – investing in Rhode Island – automated pilot liquid compression molding line – is on a boat, on its way to RI.
      • wind blades are smooth.
      • on a bus, it’s a box, with 90 degree curves, saying what got us here, won’t get us there. The body is basically two halves, upper and lower, so in mass production you can’t do that, you have to move to a more highly automated process line, so this pilot line is move them towards that. Ups the volume curve and drops the cost curve.
    • said body build in 10 minutes vs many hours before. Whoa.
    • battery trays for EVs – better than metal for this (so could go into a Tesla); passed all tests (fire, emissions, crush).
  30. 30
    zman Says:

    On TPIC – EV is not really tied to this name but should be.

  31. 31
    zman Says:

    This just popped out of SA

    https://seekingalpha.com/article/4322429-broadwind-micro-cap-towering-potential

  32. 32
    zman Says:

    TPIC Investor Day – Part 2 – 2

    Guidance
    2019 – tax on the EPS drop
    Non blade sales up above prior.

    Output now at > 80 blade sets per line despite longer, heavier, more complex blades.

    Cost focus:
    – 12 plants now vs 6 plants at IPO.
    – 18 GW with completion of India and China plants.
    – 80% of utilization = 15 GW per year.
    – Global market share is 20%
    – Feel this is the right scale for now.
    – gaining more control of customer supply chains to help get raw costs (65% of total) down, 1% drop = $10 mm.

    2020 Guidance
    – as noted in post and again, Corona not included.
    – EBITDA will be lower in 1Q and increases through YE20.
    – non blade revenue is lower this year but that’s due to lower tooling related sales.
    – see slide 68 – EBITDA bridge from 2019 to 2020. Noting hit from an accounting rule, noting slightly up G&A, noting slightly less impact from the EV side of less investment this year vs last, and then the growth in wind.
    – slide 69 – 6 more lines to get to 18 GW will need $48 mm capex not in 2020 guidance yet.
    – think he said maintenance capex of $30 to $60 mm per year.
    – forecast ROIC of 25 to 30% (long term)
    – see free cash flow of 7 to 9% (long term)
    – Future estimated revenue of $4.3 B (under contract), has no consideration for future extension of contracts.

    • slide 70 – free cash of $10 to $20 mm.
    • slide 71 – average utilization has been 80%. Interesting chart of how this makes sense to be this high going forward with 60 lines.

  33. 33
    zman Says:

    TPIC Investor Day – Part 2 Q&A

    EV – focus is on driving down cost, driving up volume.

    Notes again they’ve grown at CAGR at 23% almost entirely from cash flow.

    Q) 1Q up or down
    A) vs 1Q it will be up.

    Q) acquisition market
    A) looking a wind blade manufacturing, we look at will it be world class next 5 or 10 or should we build our own? Answer has been no.

    On the EV body side, also no. We are building tech that’s never been done.

    Q) Long term 12% adj EBITDA target – how do we get there.
    A) Speeding up transitions and start ups. In 2017 we were close to that # before market changed from from feed in tariffs to an auction market. Sees big opportunity from an operations standpoint, and gaining more control of supply chain, and building out China and India, those are lower cost operations. Noting that their low cost areas like Mex and I assume Turkey are hitting those margin levels already. Also noted benefits of work forces that have already been through a transition doing another one. Noting in the low cost areas they had plants that went through line transitions and still stayed above the EBITDA margin corporate level.

    Q) 20 transitions in 2020
    A) Some will be less than thought to get more volume by year end 2020, 2021 picture is strengthening.

    Q) Bus market – weather impacts
    A) Weather does effect EVs in terms of range, will let Proterra speak to that, it does have effect, notes his own EV is impacted in summer.

    Q) revenue ramp in diversified markets
    A) not at this point but note that the lower diversified market revenue this year is blade tooling revenue being down, not reflecting of bus shells. We are working on more things than we expect to be 100% successful with. So can’t commit yet to the growth track but confident in it.

    Q) high volume automotive components – what do you see that’s not being satisfied by that space.
    A) We are taking out weight. There are not a lot of others doing that. These are structural parts, not the non structurals.

    Q) GM, Workhorse, and Navistar – those are the public pre revenue names.
    A) Those are the three that we have announced.
    – announcing today that Workhorse will be a revenue contributor this year.
    – next year we may have more
    – it’s going to be slow next two years.

    Q) China and Electric Buses are big, could your China plant focus on that.
    A) there could be, there is less weight related volume recognized there, but also the volume would be bigger, but we are not there yet.

    Lot of interest on EVs on this call …

  34. 34
    zman Says:

    TPIC Investor Day Part 2 – Q&A 2

    Q) liquidated damages from Corona possible.
    A) doesn’t look likely but possible. We do have force majeure provisions protection. We also have non China recovery capacity as we lose some time in 1Q.

    Call over.

  35. 35
    zman Says:

    This is Workhorse, that will generate revenue for TPIC this year. Note that Workhorse has a few hundred postal vans in operation now.

    Note the van in the video says “built with composites”

    https://workhorse.com/

    Founder of Workhorse has gone on to develop a new company, Lordstown, to compete with Tesla and Rivian in the Electric Pickup space.

    Wonder if TPIC will be involved there too. As this story notes, Workhorse and Lordstown are coordinating and Workhorse owns 10%.

    So if you see a hot new EV pickup and people are looking for a way to play they may just figure out that TPIC could be making structural composite parts for it.

    Also noted in the article is Workhorse’s attempt to get a $5 B US postal contract.

    https://gearjunkie.com/lordstown-endurance-electric-pickup-truck

  36. 36
    zman Says:

    Rig Count Watch – no big moves

    Oil up 1 to 676 vs 854 year ago
    NG down 1 to 111 (new cycle low) vs 195

    Horizontals flat at 711 vs 923.

    Permian down 1 to 405 vs 478
    Marcellus down 1 to 39 vs 63 (good, keep falling)
    Haynesville flat at 41 vs 54 year ago.

  37. 37
    zman Says:

    TPIC back above $20, down 5% on day from an earlier down 12%. I’m going to lunch. Back in a bit. Shout if you need something.

  38. 38
    zman Says:

    TPIC down 2.5% on day.

    I have to run an errand and will be back in about 45 minutes.

  39. 39
    zman Says:

    Hopefully someone grabbed a bit of TPIC today, back over $21 now. Back in a bit.

  40. 40
    tomdavis12 Says:

    High energy short positions: WLL 34.2%, RRC 30.6%, CLC 30.4%, SWN 26.3% and VAL 26.1%. If you want to try to make money from the short side of the market I would suggest looking at the offshore names. Balance sheets still very challenged.

  41. 41
    zman Says:

    re 40 – thanks.

    TPIC green, nice.

  42. 42
    zman Says:

    Getting on a call, back shortly.

  43. 43
    zman Says:

    Wondering if the potential for the EV side of the business is what lifted it off the floor, TPIC to $22.

  44. 44
    zman Says:

    TPIC up 4% now, $22.26 was our level that needed to be taken out to call this a break out, nice. 16% swing in the shares from low to high today, with the stock up a buck now. Pleased.

    Ok folks, I have a sick intern in my office and am taking beerthirty a little early. If you have questions I will be around off and on all weekend.

    The Wrap will likely be out Saturday night or Sunday morning.

    Have a good one. Beerthirty.

  45. 45
    zman Says:

    TPIC remains our largest position.

    Today’s Nutshell

    Nutshell: Guidance reduction, something that should not be altogether surprising as this team has a recent history of downward revisions. 2020 revenue estimates were already in line with the new range so management has been telegraphing caution; EBITDA is also in line already and consensus is within the upper end of the new band. We have included new guidance in the cheat sheet below. Reaction to the guidance change may be negative initially and then depend on reasoning for the downshift.

  46. 46
    zman Says:

    Test

  47. 47
    zman Says:

    CHINA GOVT. TELLS CITIZENS TO RETURN TO WORK FROM MONDAY

  48. 48
    zman Says:

    U.S. SECRETARY OF STATE POMPEO SAYS U.S. IS PREPARED TO SPEND UP TO $100 MLN TO ASSIST CHINA AND OTHER CORONAVIRUS-IMPACTED COUNTRIES

  49. 49
    Baylor Says:

    What does return to work from Monday mean?

  50. 50
    zman Says:

    re 49 – Chinese New Year. Fear has been they would extend it again. Runs the risk of further supply chain disruption the longer China stays out of work. Monday was the expected date by several names we track with operations there including VWDRY and TPIC. TPIC made the comment today they expect China ops to be back on by March 1 (comment #14 above).

  51. 51
    Wrap – Week Ended 02/07/20 | Zman's Energy Brain ~ oil, gas, stocks, etc… Says:

    […] zman on T.G.I.F. […]

  52. 52
    Wrap – Week Ended 2/14/20 | Zman's Energy Brain ~ oil, gas, stocks, etc… Says:

    […] – A week ago we outlined the guidance and related notes from the investor (our post last Friday (2/7) is still open to the public); look for a new piece here soon; still not expensive even as it punches new near term […]

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