Shoals Technologies Group, Inc. · NASDAQ:SHLS

Shoals Technologies — Q3 2024 Earnings Presentation

25 slides from Shoals Technologies's earnings presentation, Nov 12, 2024

1. Slide 1: Q3 Earnings Report Nov 2024

   Q3 EARNINGS REPORT NOV 2024

2. Slide 2: Forward-Looking Statements

   Disclaimer © 2024 Shoals Technologies Group Forward-Looking Statements This presentation contains forward-looking statements that are based on our management’s beliefs and assumptions and on information currently available to our management. Forward-looking statements include information concerning

3. Slide 3: Non-GAAP Financial Information

   Disclaimer © 2024 Shoals Technologies Group Non-GAAP Financial Information This presentation includes Adjusted Gross Profit, Adjusted Gross Profit Percentage, Adjusted EBITDA, Adjusted Net Income, Adjusted Diluted Earnings per Share (“EPS”) and Net Debt, which are unaudited financial measures that e

4. Slide 4: Agenda

   © 2024 Shoals Technologies Group Agenda O1 Current Events & Market Environment O2 Third Quarter Financial Highlights O3 Customer Momentum O4 New Product Innovation O5 Highlighted Growth Initiatives (CC&I and BESS) O6 Financial Overview 4 O7 Outlook & Closing Thoughts 2024 Q3 Report Shoals

5. Slide 5: Current Events & Market Environment

   Current Events & Market Environment: © 2024 Shoals Technologies Group OFF-THE-CHART ENERGY USE: The Current Market + Navigating volatile election cycle impacts Driven by + AI + On-shoring IRA's job creation has strong bipartisan backing — with + Volatile weather red districts seeing 3x more clean en

6. Slide 6: Q3 Financial Highlights

   © 2024 Shoals Technologies Group $102.2M Q3 Financial Highlights Q3 Revenue Strong Revenue increased 2.9% sequentially from Q2 and commercial declined 23.9% YoY activity and customer 37.9% Q3 Adjusted Gross Profit Percentage momentum. (24.8% including the wire shrinkback reserve change) Impacted by

7. Slide 7: Customer Momentum

   Customer Momentum © 2024 Shoals Technologies Group + Following the initial ITC ruling, DIVERSIFICATION & TRACTION we signed up 4 new EPC + Experienced team focused on customer service customers. + New state-of-the-art facility expected in 2025 + New seasoned business leaders + Four EPCs responsible

8. Slide 8: New Product Innovation

   © 2024 Shoals Technologies Group We expect the New Product Innovation industry to transition from “We believe solar is 1500V to 2kV extremely well equipped to technology Industry change meet the growing energy and Shoals is driven by needs of the US.” uniquely improvements in solar module positioned

9. Slide 9: Growth Initiative: CC&I

   Growth Initiative : CC&I © 2024 Shoals Technologies Group THE CC&I MARKET A great year so far: + Hired a commercial team and a product development manager. + Launched a catalog that includes + Leverages current strengths & expertise standardized harnesses specifically for this segment. + Utilizes cu

10. Slide 10: Growth Initiative: BESS Update

    Growth Initiative : BESS Update © 2024 Shoals Technologies Group BATTERY ENERGY STORAGE SOLUTIONS + Hired industry veteran to lead business unit 10 + Clear market positioning with recombiners and disconnects + Market expected to double in size by 20271 2024 Q3 Report + Building momentum for 2025 Sho

11. Slide 11: Top of Mind

    © 2024 Shoals Technologies Group Top of Mind Market disruptions are constant - what matters is how you navigate them High-quality companies consistently outperform market challenges Shoals' strengths are clear: - Marquis customer base 11 - Leading market share - Experienced leadership team - Proven

12. Slide 12: Third Quarter Financial Snapshot

    Third Quarter Financial Snapshot © 2024 Shoals Technologies Group $ Change % Change $102.2M 37.9% $ Thousands Q3 2024 Q3 2023 YoY YoY (except for EPS) Revenue $102,165 $134,209 ($32,044) (23.9%) Cost of Goods Sold 76,789 120,059 (43,270) (36.0%) Q3 Revenue Q3 Adjusted Gross Profit % Gross Profit $25

13. Slide 13: Warranty Remediation

    Warranty Remediation © 2024 Shoals Technologies Group Previous range of remediation cost We look $59.7M $184.9M forward to completing Low End High End the work $73M $160M in 2025. Current range of remediation cost1 13 Remaining liability $6.3M $53M Customers have been overwhelmingly 2024 Q3 Report s

14. Slide 14: Cash Flow

    Cash Flow © 2024 Shoals Technologies Group $15.7M Q3 Cash Flow from Share repurchase authorization $150M Operations No additional activity in Q3 $125M $2.4M Remaining under authorization 14 2024 Q3 Report Q3 Capital Expenditures $5 million of 2024 CAPEX delayed to 2025 Shoals

15. Slide 15: Debt & Liquidity

    Debt & Liquidity © 2024 Shoals Technologies Group Q3 2023 Q2 2024 Q3 2024 Cash & Cash Equivalents $9.2 $3.2 $11.1 “Optimizing our balance Term Loan Facility $193.8 $0.0 $0.0 sheet is crucial to Revolving Credit Facility $0.0 $146.8 $141.8 maximizing financial Total Long-term Debt $193.8 $146.8 $141.

16. Slide 16: Backlog & Awarded Orders

    Backlog & Awarded Orders © 2024 Shoals Technologies Group $597M As of September 30, 2024 in backlog & awarded orders a decrease of 5.8% YoY 16 With $455M 2024 Q3 Report to deliver in next 12 months $142M beyond Q3 2025 Shoals

17. Slide 17: Financial Outlook

    Financial Outlook © 2024 Shoals Technologies Group 2024 Revenue Full year 2024 expectations: $390-400M $390-400M $70-80M 2024 Full Yr Revenue 2024 Full Yr Operating Cash Flow 2024 Adj. EBITDA $96-101M $96-101M $8-12M 2024 Full Yr 2024 Capital Adjusted EBITDA Expenditures 17 $58-62M $12-16M $97-107M

18. Slide 18: Closing Thoughts

    Closing Thoughts © 2024 Shoals Technologies Group POSITIONED FOR ENERGY SECTOR GROWTH: “The transformation we have been talking about with you is beginning to change the look and feel of Shoals in ways that customers, investors, and employees Shoals: are noticing.” + Strong commercial momentum with

19. Slide 19: Q&A

    Q&A Shoals 2024 Q3 Report 19 © 2024 Shoals Technologies Group

20. Slide 20: Thank You!

    © 2024 Shoals Technologies Group 20 2024 Q3 Report Thank You! Reach out to Investors@Shoals.com Shoals with any further questions

21. Slide 21: Appendix

    Appendix Shoals 2024 Q3 Report 21 © 2024 Shoals Technologies Group

22. Slide 22: Non-GAAP Reconciliations, Adjusted Gross Profit

    Non-GAAP Reconciliations, Adjusted Gross Profit © 2024 Shoals Technologies Group Adjusted Gross Profit Three Months Ended September 30, Nine Months Ended September 30, 2024 2023 2024 2023 Revenue $ 102,165 $ 134,209 $ 292,221 $ 358,503 Cost of revenue 76,789 120,059 190,388 245,579 Gross profit $ 25

23. Slide 23: Non-GAAP Reconciliations, Adjusted EBITDA

    Non-GAAP Reconciliations, Adjusted EBITDA © 2024 Shoals Technologies Group Adjusted EBITDA Three Months Ended September 30, Nine Months Ended September 30, 2024 2023 2024 2023 Net income (loss) $ (267) $ (9,828) $ 16,309 $ 26,079 Interest expense, net 3,088 5,899 10,513 18,400 Income tax expense (be

24. Slide 24: Non-GAAP Reconciliations, Adjusted Net Income

    Non-GAAP Reconciliations, Adjusted Net Income © 2024 Shoals Technologies Group Adjusted Net Income Three Months Ended September 30, Nine Months Ended September 30, 2024 2023 2024 2023 Net income (loss) attributable to Shoals Technologies Group, Inc. $ (267) $ (9,828) $ 16,309 $ 23,392 Net income imp

25. Slide 25: Non-GAAP Reconciliations, Adjusted Diluted EPS

    Non-GAAP Reconciliations, Adjusted Diluted EPS © 2024 Shoals Technologies Group Adjusted Diluted EPS Three Months Ended September 30, Nine Months Ended September 30, 2024 2023 2024 2023 Diluted weighted average shares of Class A common stock outstanding, excluding Class B common stock 167,381 170,36

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