Shoals Technologies Group, Inc. · NASDAQ:SHLS
Shoals Technologies — Q4 2023 Earnings Presentation
21 slides from Shoals Technologies's earnings presentation, Feb 28, 2024
Slide 1: Shoals Technologies Group Q4 2023 Investor Presentation
February 2024 SHOALS TECHNOLOGIES GROUP, INC. Q4 2023 Investor Presentation
Slide 2: Disclaimer: Forward-Looking Statements
DISCLAIMER 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 our possible or assumed future re
Slide 3: Disclaimer: Non-GAAP Financial Information
DISCLAIMER 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”), Free Cash Flow and Net, which are unaudited financial measures that exclude items and there
Slide 4: Agenda
AGENDA 01 Fourth Quarter 2024 Update 02 Financial Overview and Business Update 03 Guidance 04 Appendix © 2023 Shoals Technologies Group 4
Slide 5: Shoals Business Update
SHOALS BUSINESS UPDATE Continued Strong Revenues and Adjusted EBITDA up 50% and 86%, respectively versus prior year period(1) Growth in 2023 Shoals expanding and centralizing capacity in Portland, Tennessee with 638,330 square foot facility New Plant Strong Backlog and awarded orders up 47% versus p
Slide 6: Key Takeaways
KEY TAKEAWAYS • Industry leading growth continues with fourth quarter revenues up 38% year-over year • Softer mix in the fourth quarter led to fourth quarter gross margin of 42.5%, down ~20 basis points year-over-year • Significant cash flow generation positioning company for growth • Further streng
Slide 7: Financial Highlights
FINANCIAL HIGHLIGHTS QTD Results vs. Prior Year YTD Results vs. Prior Year Q4 2023 Q4 2022 Change % Change 2023 2022 Change % Change $, thousands (except EPS) Actual Actual YoY YoY Actual Actual YoY YoY Net Revenue $130,436 $94,651 $35,785 37.8% $488,939 $326,940 $161,999 49.6% Cost of Revenue 75,05
Slide 8: Fourth Quarter Financial Snapshot
FOURTH QUARTER FINANCIAL SNAPSHOT Revenue ($mm) Adjusted gross profit % Adjusted EBITDA ($mm) $130.4 42.7% 42.5% $39.1 $94.7 $30.1 2022 2023 2022 2023 2022 2023 3-Mos ended December 31, 3-Mos ended December 31, 3-Mos ended December 31, Revenue ($mm) Adjusted Gross Profit % Adjusted EBITDA ($mm) Adju
Slide 9: Consistent Growth Post IPO
CONSISTENT GROWTH POST IPO Revenue, LTM Adjusted EBITDA, LTM $600 $200 $173.4 $453.2 $488.9 $164.4 $500 $143.0 $409.8 $150 $400 $364.1 $326.9 $114.6 $280.3 $93.0 $300 $249.4 $100 $213.2 $235.6 $62.9 $65.3 $64.5 $74.1 $200 $50 $100 $- $- 4Q21 1Q22 2Q22 3Q22 4Q22 1Q23 2Q23 3Q23 4Q23 4Q21 1Q22 2Q22 3Q2
Slide 10: Backlog & Awarded Orders
BACKLOG & AWARDED ORDERS BACKLOG & AWARDED ORDERS $, mm $700.0 $633.3 $631.3 $600.0 $546.1 $527.5 $500.0 $471.2 $428.6 $366.0 $242.4 $425.5 $400.0 $327.2 $299.9 $302.3 $271.9 $300.0 $259.7 $132.6 $152.2 $200.0 $303.7 $267.3 $100.0 $194.5 $199.3 $227.6 $205.8 $150.2 $168.9 $- Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
Slide 11: Debt & Liquidity
DEBT & LIQUIDITY $, mm Q4 2021 Q1 2022 Q2 2022 Q3 2022 Q4 2022 Q1 2023 Q2 2023 Q3 2023 Q4 2023 Cash & Cash Equivalents $5.0 $2.5 $10.1 $11.2 $8.8 $6.5 $5.9 $9.2 $22.7 Term Loan Facility $197.3 $196.8 $196.3 $195.8 $195.3 $194.8 $194.3 $193.8 $143.8 • Net debt decreased $73.5 million Revolving Credit
Slide 12: Free Cash Flow
FREE CASH FLOW $, mm Q4 2021 Q1 2022 Q2 2022 Q3 2022 Q4 2022 Q1 2023 Q2 2023 Q3 2023 Q4 2023 Net Cash Provided by (Used in) Operating Activities $2.6 ($25.9) $19.1 $11.8 $34.4 $9.9 $27.9 $27.7 $26.4 Net Cash Used in Investing Activities ($1.6) ($0.9) ($1.3) ($0.7) ($0.8) ($2.0) ($2.4) ($3.5) ($2.9)
Slide 13: Warranty Update
WARRANTY UPDATE • Our top priority is taking care of the customer. • Our underlying business is strong and will continue to thrive while we pursue legal action against the wire supplier, Prysmian Cables and Systems USA, LLC, and overcome this issue. • This issue appears to be limited to wire sold to
Slide 14: New Facility in Portland, TN
NEW FACILITY IN PORTLAND, TN • Over the next five years, Shoals has committed to invest a total of $80 million dollars to centralize our existing manufacturing and distribution operations into a new 638,330 square foot, state of the facility near the Company’s existing facilities. • The new plant wi
Slide 15: Guidance
GUIDANCE 1Q 2024, ($mm) Guidance Revenue $90 - $100 Adjusted EBITDA $15 - $20 2024, ($mm) Guidance Revenue $480 - $520 Adjusted EBITDA $150 - $170 Adjusted Net Income $90 - $110 Cash Flow from Operations $100 - $120 Capital Expenditures $15 - $20 Interest Expense $15 - $20 A reconciliation of Adjust
Slide 16: Appendix
APPENDIX
Slide 17: Reconciliation of Non-GAAP Measures: Adjusted Gross Profit
RECONCILIATION OF NON-GAAP MEASURES Adjusted Gross Profit 3 Months Ended December 31, 12 Months Ended December 31, 2023 2022 2023 2022 Net revenue $ 130,436 $ 94,651 $ 488,939 $ 326,940 Cost of revenue 75,056 54,272 320,635 195,629 Gross profit 55,380 40,379 168,304 131,311 Gross profit % 42.5% 42.7
Slide 18: Reconciliation of Non-GAAP Measures: Adjusted EBITDA
RECONCILIATION OF NON-GAAP MEASURES Adjusted EBITDA 3 Months Ended December 31, 12 Months Ended December 31, 2023 2022 2023 2022 Net income $ 16,582 $ 118,302 $ 42,661 $ 143,013 Interest expense, net 5,700 5,778 24,100 18,538 Income tax expense 9,588 3,502 12,274 8,987 Depreciation expense 889 487 2
Slide 19: Reconciliation of Non-GAAP Measures: Adjusted Net Income
RECONCILIATION OF NON-GAAP MEASURES Adjusted Net Income 3 Months Ended December 31, 12 Months Ended December 31, 2023 2022 2023 2022 Net income attributable to Shoals Technologies Group, Inc. $ 16,582 $ 112,611 $ 39,974 $ 127,611 Net income impact from assumed exchange of Class B common stock to Cla
Slide 20: Reconciliation of Non-GAAP Measures: Adjusted Diluted EPS
RECONCILIATION OF NON-GAAP MEASURES Adjusted Diluted Earnings per Share ("EPS") 3 Months Ended December 31, 12 Months Ended December 31, 2023 2022 2023 2022 Diluted weighted average shares of Class A common stock outstanding, excluding Class B common stock 170,287 120,998 164,504 114,803 Assumed exc
Slide 21: Reconciliation of Non-GAAP Measures: Quarterly Adjusted EBITDA
RECONCILIATION OF NON-GAAP MEASURES Adjusted EBITDA Three months ended, Year ended, March 31, 2023 June 30, 2023 September 30, 2023 December 31, 2023 December 31, 2023 Net income (loss) $ 16,983 $ 18,924 $ (9,828) $ 16,582 $ 42,661 Interest expense, net 5,996 6,505 5,899 5,700 24,100 Income tax expe
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