Shoals Technologies Group, Inc. · NASDAQ:SHLS
Shoals Technologies — Q3 2023 Earnings Presentation
18 slides from Shoals Technologies's earnings presentation, Nov 7, 2023
Slide 1: Q3 2023 Investor Presentation
November 2023 Q3 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, and Adjusted Diluted Earnings per Share (“EPS”) (which are shown in the reconciliations set forth in the Appendix hereto), which are una
Slide 4: Agenda
AGENDA 01 Third Quarter 2023 Update Financial Overview and Business 02 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 48% and 81%, respectively versus prior year period(1) Growth in Q3 Added 15 GW of capacity to year-end 2022 base of 20 GW, bringing total capacity to 35 GW, with the ability to scale the Capacity Update existing site footprint t
Slide 6: Key Takeaways
KEY TAKEAWAYS • Record bookings, backlog, sales and adjusted EBITDA • Industry-leading value proposition delivers margin expansion • Significant cash flow generation positioning company for growth • Lawsuit filed against Prysmian Cable related to wire insulation shrinkback • Raising 2023 outlook for
Slide 7: Financial Highlights
FINANCIAL HIGHLIGHTS QTD Results vs. Prior Year YTD Results vs. Plan & Prior Year Q3 2023 Q3 2022 % Change YTD 2023 YTD 2022 % Change $, thousands Actual Actual YoY Actual Actual YoY Net Revenue $134,209 $90,823 47.8% $358,503 $232,289 54.3% Adjusted Gross Profit $64,361 $36,047 78.5% $174,629 $90,9
Slide 8: Third Quarter Financial Snapshot
THIRD QUARTER FINANCIAL SNAPSHOT Revenue ($mm) Adjusted EPS Adjusted Gross Profit % $134.2 $0.20 48.0% $90.8 39.7% $0.10 2022 2023 2022 2023 2022 2023 3-Mos ended September 30, 3-Mos ended September 30, 3-Mos ended September 30, Adjusted EBITDA ($mm) Adjusted EBITDA Margin (%) Adjusted Net Income ($
Slide 9: Consistent Growth Post IPO
CONSISTENT GROWTH POST IPO Revenue, LTM Adjusted EBITDA, LTM $500 $453.4 $200 $409.8 $164.4 $400 $364.1 $143.0 $326.9 $150 $280.3 $112.6 $300 $235.6 $249.4 $93.0 $213.2 $100 $65.3 $74.1 $200 $62.9 $64.5 $50 $100 $- $- Q4 2021 Q1 2022 Q2 2022 Q3 2022 Q4 2022 Q1 2023 Q2 2023 Q3 2023 Q4 2021 Q1 2022 Q2
Slide 10: Backlog & Awarded Orders
BACKLOG & AWARDED ORDERS BACKLOG & AWARDED ORDERS $, (mm) $700 $633.3 $600 $546.1 $527.5 $471.2 $500 $428.6 $366.0 $242.4 $400 $327.2 $299.9 $299.0 $302.3 $271.9 $300 $259.7 $132.6 $179.7 $152.2 $200 $303.7 $267.3 $100 $194.5 $199.3 $227.6 $150.2 $168.9 $119.3 $0 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 2021 2022 20
Slide 11: Debt & Free Cash Flow
DEBT & FREE CASH FLOW $, m m Q4 20 21 Q1 20 22 Q2 20 22 Q3 20 22 Q4 20 22 Q1 20 23 Q2 20 23 Q3 20 23 Cash & Cash Eq u ivalen t s $5.0 $2.5 $10 .1 $11.2 $8.8 $6.5 $5.9 $9.2 Free Cash Flow, LTM ($mm) Term Loan $197.3 $196.8 $196.3 $195.8 $195.3 $194 .8 $194 .3 $193.8 $100 Revolvin g Loan $55.1 $90 .1
Slide 12: Warranty Liability Update
WARRANTY LIABILITY 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 wi
Slide 13: Capacity Overview
CAPACITY OVERVIEW • Completed third Tennessee facility in 3Q, adding 15 GW of new capacity to 2022 year-end base of 20 GW, bringing total Shoals’ capacity to 35 GW • Added 225,000 feet to footprint • Installed almost 100 new machines and hired 200+ operators, a 30% increase since January 2023 2024+:
Slide 14: Guidance
GUIDANCE Current $, m m Prior Guidance Com m ent s Guidance Reven u e $4 8 5 - $4 95 $4 8 0 - $510 Narrow ed Ad ju st ed EBITDA $165 - $175 $14 5 - $160 Raised Ad ju st ed Net In com e $110 - $120 $92 - $10 2 Raised In t erest Exp en se $22 - $26 $22 - $26 Un ch an g ed Cap it al Exp en d it u re $8
Slide 15: Appendix
APPENDIX
Slide 16: Reconciliation of Non-GAAP Measures
RECONCILIATION OF NON-GAAP MEASURES Adjusted Gross Profit 3 Months Ended September 30, 9 Months Ended September 30, $, millions 2023 2022 2023 2022 Net revenue $ 134.2 $ 90.8 $ 358.5 $ 232.3 Cost of revenue 120.1 54.8 245.6 141.4 Gross profit 14.2 36.0 112.9 90.9 Wire insulation shrinkback expenses
Slide 17: Reconciliation of Non-GAAP Measures
RECONCILIATION OF NON-GAAP MEASURES Adjusted EBITDA 3 Months Ended September 30, 9 Months Ended September 30, $, millions 2023 2022 2023 2022 Net income (loss) $ (9.8) $ 12.8 $ 26.1 $ 24.7 Interest expense, net 5.9 4.8 18.4 12.8 Income tax expense (benefit) (6.6) 2.5 2.7 5.5 Depreciation expense 0.7
Slide 18: Reconciliation of Non-GAAP Measures
RECONCILIATION OF NON-GAAP MEASURES Adjusted Net Income 3 Months Ended September 30, 9 Months Ended September 30, $, millions 2023 2022 2023 2022 Net income (loss) attributable to Shoals Technologies Group, Inc. $ (9.8) $ 8.0 $ 23.4 $ 15.0 Net income impact from pro forma conversion of Class B commo
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