Shoals Technologies Group, Inc. · NASDAQ:SHLS
Shoals Technologies — Q2 2024 Earnings Presentation
25 slides from Shoals Technologies's earnings presentation, Aug 6, 2024
Slide 1: Shoals Technologies Group August 2024
AUG 2024
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
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
Slide 4: Agenda
© 2024 Shoals Technologies Group Agenda O1 Second Quarter Financial Highlights O2 Solar Market Trends O3 New Products Introduced at Intersolar O4 Warranty Remediation / ITC Litigation O5 Market Share & Customer Momentum O6 Financial Overview 4 O7 2024 Outlook 2024 Q2 Report Shoals
Slide 5: Second Quarter Financial Highlights
Second Quarter Financial Highlights © 2024 Shoals Technologies Group “Second quarter results that exceeded expectations, both on revenue and adjusted EBITDA” $99.2M 40.3% $642.3M 5 Q2 Revenue Q2 Gross Margins Backlog & Awarded Orders 2024 Q2 Report Revenue declined 16.7% yoy, Declined by 210 bps yoy
Slide 6: Current Market Dynamics
Current Market Dynamics 56% of planned © 2024 Shoals Technologies Group installations in the U.S., in GW, are Incremental project delays pushed experiencing delays of 6 months approximately $40M of revenue from the or more1 current year into 2025 The source of delays remains consistent: + Permitting
Slide 7: Long Term Outlook for Solar is Bright
Long Term Outlook for Solar is Bright © 2024 Shoals Technologies Group strong tailwinds for LOAD Strong support for GROWTH a positive long-term outlook, despite near- term uncertainties. driven by… + AI & Datacenter + Weather volatility 7 “…we remain focused on + Electrification of transportation mo
Slide 8: Largest Ever New Product Introductions at Intersolar
Shoals Largest Ever New Product Introductions at Intersolar © 2024 Shoals Technologies Group New Products: Pre-Fab, Plug-&-Play Product Designed to: + SuperJumper + Eliminate insulation piercing connectors + Reduce risk + Trenched BLA + Ensure durability in extreme conditions + Accelerate timelines
Slide 9: Warranty and ITC Update
Warranty and ITC Update © 2024 Shoals Technologies Group Warranty Working with our customers ITC Intellectual Court’s initial ruling Update to remediate known issues Property delayed to August Litigation 16th, based on the We have become aware of court request for 2 additional sites additional time
Slide 10: Customer Traction Encouraging
Customer Traction Encouraging © 2024 Shoals Technologies Group Master Supply Agreement1 Initial Orders Received From BLATTNER NEW TOP EPC Which adds another plus new commercial agreement with another 12GW TOP EPC to the existing MSA signed during Q2 through June 2027 10 50% INCREASE 2024 Q2 Report i
Slide 11: COD vs Revenue Recognition
COD vs Revenue Recognition © 2024 Shoals Technologies Group of 2023 COD revenue Industry Capacity & recognized in 2021 Revenue Recognition Projects that went of 2023 COD revenue live (COD) in 2023 were recognized in 2022 recognized as revenue beginning in 2021 of 2023 COD revenue recognized in 2023
Slide 12: A Compelling Opportunity
A Compelling Opportunity © 2024 Shoals Technologies Group A broad and deep customer list + Blattner MSA: Protecting our core Opportunity: 30% business. Our served + New Customers: Growing our core addressable market business New Opportunity could expand by 30% or more* Go-to-market pod strategy 70%
Slide 13: Second Quarter Financial Snapshot
Second Quarter Financial Snapshot © 2024 Shoals Technologies Group $ Change % Change $ Thousands Q2 2024 Q2 2023 $99.2M 40.3% (except for EPS) YoY YoY Net Revenue $99,249 $119,208 ($19,959) (16.7%) Cost of Goods Sold 59,252 68,691 9,439 13.7% Q2 Net Revenue Q2 Gross Margin Gross Profit 39,997 50,517
Slide 14: Cash Flow & Capital Allocation
Cash Flow & Capital Allocation © 2024 Shoals Technologies Group $37.8M Share repurchase authorization $150M Q2 Cash Flow from Accelerated repurchase Operations $25M $2.0M 14 “We do not believe the current share price reflects the long-term value we are creating” 2024 Q2 Report “ASR utilized cash on
Slide 15: Debt & Liquidity
Debt & Liquidity © 2024 Shoals Technologies Group Q2 2023 Q1 2024 Q2 2024 Cash & Cash Equivalents $5.9 $15.2 $3.2 “Optimizing our balance Term Loan Facility $194.3 $0.0 $0.0 sheet is crucial to maximizing financial Revolving Credit Facility $20.0 $168.8 $146.8 flexibility” Total Long-term Debt $214.
Slide 16: Record Backlog & Awarded Orders
Record Backlog & Awarded Orders © 2024 Shoals Technologies Group BACKLOG & AWARDED ORDERS $642M $, mm $700.0 $633.3 $642.3 $631.3 $615.1 As of June 30, 2024 $600.0 in backlog & awarded orders $546.1 $527.5 $500.0 $471.2 18% $457.8 an increase of 366.0 242.4 425.5 435.6 $400.0 419.0 299.9 YoY 271.9 2
Slide 17: Financial Outlook
Financial Outlook © 2024 Shoals Technologies Group 2024 2024 Revenue $370-400M Full year expectations: $370-400M $62-82M 2024 Full Yr Revenue 2024 Full Yr Operating Cash Flow 2024 Adj. EBITDA $96-110M $96-110M $15-20M 2024 Full Yr 2024 Capital Adjusted EBITDA Expenditures 17 $62-76M $15-20M $95-105M
Slide 18: Closing Thoughts
Closing Thoughts © 2024 Shoals Technologies Group AI requires Weather More electric Shoals: enormous Volatility vehicles with + Strategic initiatives providing amounts of & rising rising power temperatures adoption unified playbook + Early Indications of improved customer traction + Expansion into n
Slide 19: © 2024 Shoals Technologies Group
Shoals 2024 Q2 Report 19 © 2024 Shoals Technologies Group
Slide 20: Thank You!
© 2024 Shoals Technologies Group 20 Thank You! Please join us on September 2024 Q2 Report 5th for our 2024 Investor Day live Webcast at Investors.Shoals.com Reach out to Investors@Shoals.com Shoals with any further questions
Slide 21: © 2024 Shoals Technologies Group
Shoals 2024 Q2 Report 21 © 2024 Shoals Technologies Group
Slide 22: Non-GAAP Reconciliations, Adjusted Gross Profit
Non-GAAP Reconciliations, Adjusted Gross Profit © 2024 Shoals Technologies Group 22 2024 Q2 Report (a) For the six months ended June 30, 2024, represents (i) $0.5 million of inventory write-downs of wire in connection with the identification, repair and replacement of a subset of wire harnesses pres
Slide 23: Non-GAAP Reconciliations, Adjusted EBITDA
Non-GAAP Reconciliations, Adjusted EBITDA © 2024 Shoals Technologies Group 23 (a) For the six months ended June 30, 2024, represents (i) $0.5 million of inventory write-downs of wire in connection with the identification, repair and replacement of a subset of wire harnesses presenting unacceptable l
Slide 24: Non-GAAP Reconciliations, Adjusted Net Income
Non-GAAP Reconciliations, Adjusted Net Income © 2024 Shoals Technologies Group 24 (a) For the six months ended June 30, 2024, represents (i) $0.5 million of inventory write-downs of wire in connection with the identification, repair and replacement of a subset of wire harnesses presenting unacceptab
Slide 25: Non-GAAP Reconciliations, Adjusted Diluted EPS
Non-GAAP Reconciliations, Adjusted Diluted EPS Shoals 2024 Q2 Report 25 © 2024 Shoals Technologies Group
Shoals Technologies Group — Q2 2024 Earnings Presentation on 6ix