Shoals Technologies Group, Inc. Reports Financial Results for Third Quarter 2024
Shoals Technologies Group (SHLS) reported Q3 2024 financial results with revenue of $102.2 million, down 24% year-over-year. The company posted a net loss of $0.3 million and Adjusted EBITDA of $24.5 million. Despite project delays affecting revenue, quoting volume increased nearly 50% from the prior year. The company's backlog and awarded orders stood at $596.6 million, with international markets comprising over 13%. Shoals raised its full-year 2024 revenue outlook to $390-400 million, with expected Adjusted EBITDA of $96-101 million.
Shoals Technologies Group (SHLS) ha pubblicato i risultati finanziari del terzo trimestre 2024, registrando un fatturato di 102,2 milioni di dollari, in calo del 24% rispetto all'anno precedente. L'azienda ha riportato una perdita netta di 0,3 milioni di dollari e un EBITDA rettificato di 24,5 milioni di dollari. Nonostante i ritardi nei progetti che hanno influito sul fatturato, il volume delle quotazioni è aumentato di quasi il 50% rispetto all'anno scorso. L'ordine di lavoro e gli ordini assegnati dell'azienda ammontano a 596,6 milioni di dollari, con i mercati internazionali che rappresentano oltre il 13%. Shoals ha alzato le previsioni di fatturato per l'intero anno 2024 a 390-400 milioni di dollari, con un EBITDA rettificato previsto di 96-101 milioni di dollari.
Shoals Technologies Group (SHLS) informó los resultados financieros del tercer trimestre de 2024, con ingresos de 102,2 millones de dólares, una disminución del 24% en comparación con el año anterior. La compañía reportó una pérdida neta de 0,3 millones de dólares y un EBITDA ajustado de 24,5 millones de dólares. A pesar de los retrasos en los proyectos que afectaron los ingresos, el volumen de cotizaciones aumentó casi un 50% con respecto al año anterior. La cartera de pedidos y los pedidos adjudicados de la empresa se situaron en 596,6 millones de dólares, con los mercados internacionales representando más del 13%. Shoals elevó sus perspectivas de ingresos para el año 2024 a 390-400 millones de dólares, con un EBITDA ajustado esperado de 96-101 millones de dólares.
쇼얼스 테크놀로지스 그룹 (SHLS)는 2024년 3분기 재무 결과를 발표하며 1억 2천 2백만 달러의 매출을 기록했으며, 이는 전년 대비 24% 감소한 수치입니다. 회사는 30만 달러의 순손실을 기록했으며, 조정 EBITDA는 2천 4백 5십만 달러입니다. 프로젝트 지연으로 인해 매출에 영향이 있었음에도 불구하고, 인용량은 전년도 대비 거의 50% 증가했습니다. 회사의 수주 잔고와 수주된 주문은 5억 9천 6백 6십만 달러에 달하며, 국제 시장은 13% 이상을 차지하고 있습니다. 쇼얼스는 2024년 전체 매출 전망을 3억 9천만 - 4억 달러로 상향 조정했으며, 예상 조정 EBITDA는 9천 6백만 - 1억 1백만 달러입니다.
Shoals Technologies Group (SHLS) a annoncé les résultats financiers du troisième trimestre 2024, avec un chiffre d'affaires de 102,2 millions de dollars, en baisse de 24 % par rapport à l'année précédente. L'entreprise a affiché une perte nette de 0,3 million de dollars et un EBITDA ajusté de 24,5 millions de dollars. Malgré les retards de projets affectant le chiffre d'affaires, le volume des devis a augmenté de près de 50 % par rapport à l'année dernière. Le carnet de commandes et les commandes attribuées de l'entreprise s'élevaient à 596,6 millions de dollars, les marchés internationaux représentant plus de 13 %. Shoals a relevé ses prévisions de chiffre d'affaires pour l'année 2024 à 390-400 millions de dollars, avec un EBITDA ajusté prévu de 96-101 millions de dollars.
Shoals Technologies Group (SHLS) berichtete über die Finanzergebnisse für das 3. Quartal 2024 mit einem Umsatz von 102,2 Millionen US-Dollar, was einem Rückgang von 24% im Jahresvergleich entspricht. Das Unternehmen verzeichnete einen Nettoverlust von 0,3 Millionen US-Dollar und ein bereinigtes EBITDA von 24,5 Millionen US-Dollar. Trotz Projektverzögerungen, die den Umsatz beeinflussten, stieg das Angebot um fast 50% im Vergleich zum Vorjahr. Der Auftragsbestand und die erteilten Aufträge des Unternehmens betrugen 596,6 Millionen US-Dollar, wobei internationale Märkte über 13% ausmachten. Shoals hob seine Umsatzprognose für das gesamte Jahr 2024 auf 390-400 Millionen US-Dollar an, mit einem erwarteten bereinigten EBITDA von 96-101 Millionen US-Dollar.
- Record quoting volume, up 50% year-over-year
- Gross profit increased to $25.4 million from $14.2 million YoY
- Gross profit percentage improved to 24.8% from 10.5% YoY
- International markets represent 13% of backlog
- Raised full-year revenue guidance
- Revenue declined 24% YoY to $102.2 million
- Net loss of $0.3 million
- Backlog decreased 5.8% YoY and 7.1% sequentially
- Higher labor costs and reduced leverage on fixed costs
- Project delays affecting revenue performance
Insights
The Q3 results present a mixed picture for Shoals Technologies. While revenue declined
The backlog decrease of
The
The solar sector faces significant macro challenges, with high interest rates and interconnection queues impacting project timelines. Shoals' performance reflects these industry-wide issues, but several indicators suggest underlying strength. The record quoting activity indicates potential pent-up demand, while international expansion provides diversification.
The company's focus on labor cost efficiency becomes increasingly valuable as the industry grapples with workforce availability issues. The reduced wire insulation shrinkback expenses demonstrate improved operational execution, though higher labor costs and reduced fixed cost leverage remain concerns.
– Secures Favorable Initial Ruling in ITC Case Against Voltage, LLC –
– Quarterly Revenue of
– Gross Profit Percentage of
– Net Loss of
– Adjusted EBITDA of
– Raises Midpoint of Full-Year Revenue Outlook –
PORTLAND, Tenn., Nov. 12, 2024 (GLOBE NEWSWIRE) -- Shoals Technologies Group, Inc. (“Shoals” or the “Company”) (Nasdaq: SHLS), a leading provider of electrical balance of system (“EBOS”) solutions for the energy transition market, today announced results for its third quarter ended September 30, 2024.
“I’m pleased with the robust engagement we experienced in the third quarter. Customers remain cautious yet constructive as we head into the end of 2024 and look into 2025. Quoting volume across our customer base is at record levels, increasing almost
“Uncertainty and volatility driven by persistently high interest rates, a long interconnection queue, labor availability, and supply chain disruptions, have elongated our sales cycle all year. And while the timing of project awards and construction is difficult to predict, we’re increasingly confident in our competitive position in the marketplace, especially as labor costs rise and quality is front and center. As we shared with you at our recent Investor Day, the transformation you see occurring at Shoals today is setting us up exceptionally well to lead our markets in the coming years and we remain very excited about the opportunity ahead,” added Mr. Moss.
Third Quarter 2024 Financial Results
Revenue decreased
Gross profit increased to
General and administrative expenses were
Income from operations was
Net loss was
Net loss attributable to Shoals Technologies Group, Inc. was
Adjusted gross profit* for the quarter was
Adjusted EBITDA* decreased
Adjusted net income* decreased
* A reconciliation of the Company’s non-GAAP measures to the most closely comparable U.S. generally accepted accounting principles (“GAAP”) measures are found within this release.
Backlog and Awarded Orders
The Company’s backlog and awarded orders as of September 30, 2024, were
Backlog represents signed purchase orders or contractual minimum purchase commitments with take-or-pay provisions and awarded orders are orders we are in the process of documenting a contract but for which a contract has not yet been signed.
Fourth Quarter 2024 Outlook
The Company is providing an outlook for the fourth quarter given the near-term uncertainty in the utility scale solar market, which has resulted in shifting order patterns. Based on current business conditions, business trends and other factors, for the quarter ending December 31, 2024, the Company expects:
- Revenue to be in the range of
$97 t o$107 million - Adjusted EBITDA to be in the range of
$23 t o$28 million
Full Year 2024 Outlook
Based on current business conditions, business trends and other factors, for the full year 2024, the Company expects:
- Revenue to be in the range of
$390 t o$400 million - Adjusted EBITDA* to be in the range of
$96 t o$101 million - Adjusted net income* to be in the range of
$58 t o$62 million - Cash Flow from operations to be in the range of
$70 t o$80 million - Capital expenditures to be in the range of
$8 t o$12 million - Interest expense to be in the range of
$12 t o$16 million
A reconciliation of Adjusted EBITDA guidance and Adjusted net income guidance, which are forward-looking measures that are non-GAAP measures, to the most closely comparable GAAP measures is not provided because we are unable to provide such reconciliation without unreasonable effort. The inability to provide a quantitative reconciliation is due to the uncertainty and inherent difficulty in predicting the occurrence, the financial impact and the periods in which the components of the applicable GAAP measures and non-GAAP adjustments may be recognized. The GAAP measures may include the impact of such items as non-cash share-based compensation, amortization of intangible assets and the tax effect of such items, in addition to other items we have historically excluded from Adjusted EBITDA and Adjusted net income. We expect to continue to exclude these items in future disclosures of these non-GAAP measures and may also exclude other similar items that may arise in the future.
Webcast and Conference Call Information
Company management will host a webcast and conference call on November 12, 2024 at 8:00 a.m. Eastern Time, to discuss the Company’s financial results.
Interested investors and other parties can listen to a webcast of the live conference call by logging onto the Investor Relations section of the Company’s website at https://investors.shoals.com. A replay will be made available shorty after the conclusion of the event.
About Shoals Technologies Group, Inc.
Shoals Technologies Group, Inc. is a leading provider of electrical balance of systems (EBOS) solutions for the energy transition market. Since its founding in 1996, the Company has introduced innovative technologies and systems solutions that allow its customers to substantially increase installation efficiency and safety while improving system performance and reliability. Shoals Technologies Group, Inc. is a recognized leader in the renewable energy industry whose solutions are deployed on over 62 GW of solar systems globally. For additional information, please visit: https://www.shoals.com.
Investor Relations Contact
Shoals Technologies Group, Inc.
Email: investors@shoals.com
Forward-Looking Statements
This report 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 results of operations; including our financial guidance for the fourth quarter of 2024 and for the full year ending December 31, 2024; expectations regarding the utility scale solar market and our share thereof; project delays; regulatory environment; the effects of competitive dynamics, volume discounts and customer mix in our key markets; pipeline and orders; expectations and plans regarding our long-term financial goals; business strategies; technology developments; financing and investment plans; warranty, litigation and liability accruals and estimates of loss or gains; litigation strategy and expected benefits or results from the current intellectual property and wire insulation shrinkback litigation; and potential growth opportunities, including international growth, production and capacity at our plants. Forward-looking statements include statements that are not historical facts and can be identified by terms such as “anticipate,” “believe,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” “seek,” “should,” “will,” “would” or similar expressions and the negatives of those terms.
Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements.
Some of the key factors that could cause actual results to differ from our expectations include, among others, if demand for solar energy projects does not continue to grow or grows at a slower rate than we anticipate, including as a result of industry project delays, we may not be able to achieve our anticipated level of growth and our business will suffer; if we fail to accurately estimate the potential losses related to the wire insulation shrinkback matter, or fail to recover the costs and expenses incurred by us from the supplier, our profit margins, financial results, business and prospects could be materially adversely impacted; defects or performance problems in our products or their parts, including those related to the wire insulation shrinkback matter, could result in loss of customers, reputational damage and decreased revenue, and may have a material adverse effect on our business, financial condition and results of operations; current macroeconomic events, including high inflation, high interest rates, a potential recession, uncertainty surrounding the impact of the election cycle and geopolitical instability could impact our business and financial results; a further increase in interest rates or a reduction in the availability of tax incentives or project debt capital in the global financial markets could make it difficult for end customers to finance the cost of a solar energy system and could reduce the demand for our products; existing electric utility industry, renewable energy and solar energy policies and regulations, and any subsequent changes, may present technical, regulatory and economic barriers to the purchase and use of solar energy systems that may significantly reduce demand for our products or harm our ability to compete; changes in the U.S. trade environment, including the imposition of trade restrictions, import tariffs, anti-dumping and countervailing duties could adversely affect the amount or timing of our revenue, results of operations or cash flows; we may experience delays, disruptions, quality control or reputational problems in our manufacturing operations in part due to our vendor concentration; if we or our suppliers face disputes with labor unions, we may not be able to achieve our anticipated level of growth and our business could suffer; if we fail to retain our key personnel and attract additional qualified personnel, our business strategy and prospects could suffer; our products are primarily manufactured and shipped from our production facilities in Tennessee, and any damage or disruption at these facilities may harm our business; we may face difficulties with respect to the planned consolidation and relocation of our Tennessee-based manufacturing and distribution operations, and may not realize the benefits thereof; unsatisfactory safety performance may subject us to penalties, negatively impact customer relationships, result in higher operating costs, and negatively impact employee morale and turnover; the market for our products is competitive, and we may face increased competition as new and existing competitors introduce EBOS system solutions and components, which could negatively affect our results of operations and market share; our industry has historically been cyclical and experienced periodic downturns; the interruption of the flow of raw materials from international vendors has disrupted our supply chain, including as a result of the imposition of additional duties, tariffs and other charges on imports and exports; we are subject to risks associated with legal proceedings and claims, including the patent infringement complaints that we filed with the U.S. International Trade Commission (the “ITC”) and two District Courts, the securities and derivative litigation initiated in 2024, and other legal proceedings and claims, which may or may not arise in the normal course of our business; if we fail to, or incur significant costs in order to, obtain, maintain, protect, defend or enforce our intellectual property and other proprietary rights, including those that are subject to the patent infringement complaints we filed with the ITC and two District Courts, our business and results of operations could be materially harmed; a loss of one or more of our significant customers, their inability to perform under their contracts, or their default in payment could harm our business and negatively impact revenue, results of operations, and cash flow; we may not repurchase all shares authorized for repurchase under our share Repurchase Program, we cannot guarantee that the Repurchase Program will enhance long-term stockholder value, and share repurchases could increase the volatility of the price of our Class A common stock; and our expansion outside the U.S. could subject us to additional business, financial, regulatory and competitive risks.
These and other important risk factors are described more fully in the Company’s most recent Annual Report on Form 10-K and subsequent Quarterly Reports on Form 10-Q and other documents filed with the Securities and Exchange Commission and could cause actual results to vary from expectations. Given these uncertainties, you should not place undue reliance on forward-looking statements. Also, forward-looking statements represent our management’s beliefs and assumptions only as of the date of this report. You should read this report with the understanding that our actual future results may be materially different from what we expect.
Except as required by law, we assume no obligation to update these forward-looking statements, or to update the reasons actual results could differ materially from those anticipated in these forward-looking statements, even if new information becomes available in the future.
Non-GAAP Financial Measures
Adjusted Gross Profit, Adjusted Gross Profit Percentage, Adjusted EBITDA, Adjusted Net Income, and Adjusted Diluted Earnings per Share (“EPS”)
We define Adjusted Gross Profit as gross profit plus wire insulation shrinkback expenses. We define Adjusted Gross Profit Percentage as Adjusted Gross Profit divided by revenue. We define Adjusted EBITDA as net income (loss) plus (i) interest expense, net, (ii) income tax benefit (expense), (iii) depreciation expense, (iv) amortization of intangibles, (v) equity-based compensation, (vi) wire insulation shrinkback expenses, and (vii) wire insulation shrinkback litigation expenses. We define Adjusted Net Income as net income (loss) attributable to Shoals Technologies Group, Inc. plus (i) net income impact from assumed exchange of Class B common stock to Class A common stock as of the beginning of the earliest period presented, (ii) adjustment to the provision for income tax, (iii) amortization of intangibles, (iv) amortization / write-off of deferred financing costs, (v) equity-based compensation, (vi) wire insulation shrinkback expenses, and (vii) wire insulation shrinkback litigation expenses, all net of applicable income taxes. We define Adjusted Diluted EPS as Adjusted Net Income divided by the diluted weighted average shares of Class A common stock outstanding for the applicable period, which assumes the exchange of all outstanding Class B common stock for Class A common stock as of the beginning of the earliest period presented.
Adjusted Gross Profit, Adjusted Gross Profit Percentage, Adjusted EBITDA, Adjusted Net Income, and Adjusted Diluted EPS are intended as supplemental measures of performance that are neither required by, nor presented in accordance with, GAAP. We present Adjusted Gross Profit, Adjusted Gross Profit Percentage, Adjusted EBITDA, Adjusted Net Income, and Adjusted Diluted EPS because we believe they assist investors and analysts in comparing our performance across reporting periods on a consistent basis by excluding items that we do not believe are indicative of our core operating performance. In addition, we use Adjusted Gross Profit, Adjusted Gross Profit Percentage, Adjusted EBITDA, Adjusted Net Income, and Adjusted Diluted EPS: (i) as factors in evaluating management’s performance when determining incentive compensation, as applicable; (ii) to evaluate the effectiveness of our business strategies; and (iii) because our credit agreement uses measures similar to Adjusted EBITDA, Adjusted Net Income and Adjusted Diluted EPS to measure our compliance with certain covenants.
Among other limitations, Adjusted Gross Profit, Adjusted Gross Profit Percentage, Adjusted EBITDA, Adjusted Net Income, and Adjusted Diluted EPS do not reflect our cash expenditures, or future requirements for capital expenditures or contractual commitments; do not reflect the impact of certain cash charges resulting from matters we consider not to be indicative of our ongoing operations; and may be calculated by other companies in our industry differently than we do or not at all, which may limit their usefulness as comparative measures.
Because of these limitations, Adjusted Gross Profit, Adjusted Gross Profit Percentage, Adjusted EBITDA, Adjusted Net Income, and Adjusted Diluted EPS should not be considered in isolation or as substitutes for performance measures calculated in accordance with GAAP. You should review the reconciliation of gross profit to Adjusted Gross Profit and Adjusted Gross Profit Percentage, net income (loss) to Adjusted EBITDA, and net income (loss) attributable to Shoals Technologies Group, Inc. to Adjusted Net Income and Adjusted Diluted EPS below and not rely on any single financial measure to evaluate our business.
| Shoals Technologies Group, Inc. Condensed Consolidated Balance Sheets (Unaudited) (in thousands, except shares and par value) | ||||||
| September 30, 2024 | December 31, 2023 | |||||
| Assets | ||||||
| Current Assets | ||||||
| Cash and cash equivalents | $ | 11,106 | $ | 22,707 | ||
| Accounts receivable, net | 95,301 | 107,118 | ||||
| Unbilled receivables | 13,792 | 40,136 | ||||
| Inventory, net | 65,854 | 52,804 | ||||
| Other current assets | 4,716 | 4,421 | ||||
| Total Current Assets | 190,769 | 227,186 | ||||
| Property, plant and equipment, net | 28,055 | 24,836 | ||||
| Goodwill | 69,941 | 69,941 | ||||
| Other intangible assets, net | 42,979 | 48,668 | ||||
| Deferred tax assets | 460,011 | 468,195 | ||||
| Other assets | 9,546 | 5,167 | ||||
| Total Assets | $ | 801,301 | $ | 843,993 | ||
| Liabilities and Stockholders’ Equity | ||||||
| Current Liabilities | ||||||
| Accounts payable | $ | 23,743 | $ | 14,396 | ||
| Accrued expenses and other | 12,865 | 22,907 | ||||
| Warranty liability—current portion | 34,743 | 31,099 | ||||
| Deferred revenue | 20,562 | 22,228 | ||||
| Long-term debt—current portion | — | 2,000 | ||||
| Total Current Liabilities | 91,913 | 92,630 | ||||
| Revolving line of credit | 141,750 | 40,000 | ||||
| Long-term debt, less current portion | — | 139,445 | ||||
| Warranty liability, less current portion | 20,000 | 23,815 | ||||
| Other long-term liabilities | 2,442 | 3,107 | ||||
| Total Liabilities | 256,105 | 298,997 | ||||
| Commitments and Contingencies | ||||||
| Stockholders’ Equity | ||||||
| Preferred stock, | — | — | ||||
| Class A common stock, | 2 | 2 | ||||
| Class B common stock, | — | — | ||||
| Additional paid-in capital | 479,764 | 470,542 | ||||
| Treasury stock, at cost, 3,908,387 and zero shares as of September 30, 2024 and December 31, 2023, respectively | (25,331 | ) | — | |||
| Retained earnings | 90,761 | 74,452 | ||||
| Total stockholders' equity | 545,196 | 544,996 | ||||
| Total Liabilities and Stockholders’ Equity | $ | 801,301 | $ | 843,993 | ||
| Shoals Technologies Group, Inc. Condensed Consolidated Statements of Operations (Unaudited) (in thousands, except per share amounts) | |||||||||||||||
| 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 | 25,376 | 14,150 | 101,833 | 112,924 | |||||||||||
| Operating expenses | |||||||||||||||
| General and administrative expenses | 18,743 | 22,551 | 60,733 | 59,266 | |||||||||||
| Depreciation and amortization | 2,109 | 2,170 | 6,411 | 6,493 | |||||||||||
| Total operating expenses | 20,852 | 24,721 | 67,144 | 65,759 | |||||||||||
| Income (loss) from operations | 4,524 | (10,571 | ) | 34,689 | 47,165 | ||||||||||
| Interest expense, net | (3,088 | ) | (5,899 | ) | (10,513 | ) | (18,400 | ) | |||||||
| Income (loss) before income taxes | 1,436 | (16,470 | ) | 24,176 | 28,765 | ||||||||||
| Income tax benefit (expense) | (1,703 | ) | 6,642 | (7,867 | ) | (2,686 | ) | ||||||||
| Net income (loss) | (267 | ) | (9,828 | ) | 16,309 | 26,079 | |||||||||
| Less: net income attributable to non-controlling interests | — | — | — | 2,687 | |||||||||||
| Net income (loss) attributable to Shoals Technologies Group, Inc. | $ | (267 | ) | $ | (9,828 | ) | $ | 16,309 | $ | 23,392 | |||||
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
| 2024 | 2023 | 2024 | 2023 | ||||||||||||
| Earnings (loss) per share of Class A common stock: | |||||||||||||||
| Basic | $ | (0.00 | ) | $ | (0.06 | ) | $ | 0.10 | $ | 0.14 | |||||
| Diluted | $ | (0.00 | ) | $ | (0.06 | ) | $ | 0.10 | $ | 0.14 | |||||
| Weighted average shares of Class A common stock outstanding: | |||||||||||||||
| Basic | 167,318 | 169,965 | 169,190 | 162,173 | |||||||||||
| Diluted | 167,381 | 169,965 | 169,310 | 162,611 | |||||||||||
| Shoals Technologies Group, Inc. Condensed Consolidated Statements of Cash Flows (Unaudited) (in thousands) | |||||||
| Nine Months Ended September 30, | |||||||
| 2024 | 2023 | ||||||
| Cash Flows from Operating Activities | |||||||
| Net income | $ | 16,309 | $ | 26,079 | |||
| Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
| Depreciation and amortization | 9,332 | 7,744 | |||||
| Amortization/write off of deferred financing costs | 2,937 | 1,032 | |||||
| Equity-based compensation | 10,392 | 17,060 | |||||
| Provision for credit losses | — | 296 | |||||
| Provision for obsolete or slow-moving inventory | 1,505 | 3,639 | |||||
| Provision for warranty expense | 15,203 | 59,723 | |||||
| Deferred taxes | 8,184 | 2,456 | |||||
| Changes in assets and liabilities: | |||||||
| Accounts receivable | 11,817 | (58,607 | ) | ||||
| Unbilled receivables | 26,344 | (11,793 | ) | ||||
| Inventory | (14,555 | ) | 8,254 | ||||
| Other assets | (2,668 | ) | (1,192 | ) | |||
| Accounts payable | 9,347 | 7,390 | |||||
| Accrued expenses and other | (10,707 | ) | 3,330 | ||||
| Warranty liability | (15,374 | ) | (3,669 | ) | |||
| Deferred revenue | (1,666 | ) | 3,766 | ||||
| Net Cash Provided by Operating Activities | 66,400 | 65,508 | |||||
| Cash Flows from Investing Activities | |||||||
| Purchases of property, plant and equipment | (6,862 | ) | (7,642 | ) | |||
| Other | — | (269 | ) | ||||
| Net Cash Used in Investing Activities | (6,862 | ) | (7,911 | ) | |||
| Cash Flows from Financing Activities | |||||||
| Distributions to non-controlling interests | — | (2,628 | ) | ||||
| Employee withholding taxes related to net settled equity awards | (1,170 | ) | (3,852 | ) | |||
| Payments on term loan facility | (143,750 | ) | (1,500 | ) | |||
| Proceeds from revolving credit facility | 148,750 | 5,000 | |||||
| Repayments of revolving credit facility | (47,000 | ) | (53,000 | ) | |||
| Deferred financing costs | (2,638 | ) | — | ||||
| Repurchase of Class A common stock | (25,331 | ) | — | ||||
| Other | — | (1,159 | ) | ||||
| Net Cash Used in Financing Activities | (71,139 | ) | (57,139 | ) | |||
| Net Increase (Decrease) in Cash and Cash Equivalents | (11,601 | ) | 458 | ||||
| Cash and Cash Equivalents—Beginning of Period | 22,707 | 8,766 | |||||
| Cash and Cash Equivalents—End of Period | $ | 11,106 | $ | 9,224 | |||
| Shoals Technologies Group, Inc. Adjusted Gross Profit, Adjusted Gross Profit Percentage, Adjusted EBITDA, Adjusted Net Income and Adjusted Diluted Earnings per Share (“EPS”) (Unaudited) | |||||||||||||||
| Reconciliation of Gross Profit to Adjusted Gross Profit and Adjusted Gross Profit Percentage (in thousands): | |||||||||||||||
| 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 | $ | 25,376 | $ | 14,150 | $ | 101,833 | $ | 112,924 | |||||||
| Gross profit percentage | 24.8 | % | 10.5 | % | 34.8 | % | 31.5 | % | |||||||
| Wire insulation shrinkback expenses(a) | $ | 13,298 | $ | 50,211 | $ | 13,765 | $ | 61,705 | |||||||
| Adjusted gross profit | $ | 38,674 | $ | 64,361 | $ | 115,598 | $ | 174,629 | |||||||
| Adjusted gross profit percentage | 37.9 | % | 48.0 | % | 39.6 | % | 48.7 | % | |||||||
Reconciliation of Net Income (Loss) to Adjusted EBITDA (in thousands):
| 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 (benefit) | 1,703 | (6,642 | ) | 7,867 | 2,686 | ||||||||
| Depreciation expense | 1,254 | 674 | 3,643 | 1,723 | |||||||||
| Amortization of intangibles | 1,897 | 1,978 | 5,689 | 6,021 | |||||||||
| Equity-based compensation | 1,282 | 5,092 | 10,392 | 17,060 | |||||||||
| Wire insulation shrinkback expenses(a) | 13,298 | 50,211 | 13,765 | 61,705 | |||||||||
| Wire insulation shrinkback litigation expenses(b) | 2,278 | 598 | 4,499 | 598 | |||||||||
| Adjusted EBITDA | $ | 24,533 | $ | 47,982 | $ | 72,677 | $ | 134,272 | |||||
Reconciliation of Net Income (Loss) Attributable to Shoals Technologies Group, Inc. to Adjusted Net Income (in thousands):
| 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 impact from assumed exchange of Class B common stock to Class A common stock (c) | — | — | — | 2,687 | |||||||||||
| Adjustment to the provision for income tax (d) | — | — | — | (653 | ) | ||||||||||
| Tax effected net income (loss) | (267 | ) | (9,828 | ) | 16,309 | — | 25,426 | ||||||||
| Amortization of intangibles | 1,897 | 1,978 | 5,689 | 6,021 | |||||||||||
| Amortization / write-off of deferred financing costs | 156 | 341 | 2,937 | 1,032 | |||||||||||
| Equity-based compensation | 1,282 | 5,092 | 10,392 | 17,060 | |||||||||||
| Wire insulation shrinkback expenses(a) | 13,298 | 50,211 | 13,765 | 61,705 | |||||||||||
| Wire insulation shrinkback litigation expenses(b) | 2,278 | 598 | 4,499 | 598 | |||||||||||
| Tax impact of adjustments (e) | (4,709 | ) | (15,039 | ) | (9,209 | ) | (21,969 | ) | |||||||
| Adjusted Net Income | $ | 13,935 | $ | 33,353 | $ | 44,382 | $ | 89,873 | |||||||
| (a) | For the three and nine months ended September 30, 2024, represents (i) | |
| (b) | For the three and nine months ended September 30, 2024, represents | |
| (c) | Reflects net income to Class A common stock from assumed exchange of corresponding shares of our Class B common stock formerly held by our founder and management. | |
| (d) | Shoals Technologies Group, Inc. is subject to U.S. Federal income taxes, in addition to state and local taxes. The adjustment to the provision for income tax reflects the effective tax rates below, and for the period prior to March 10, 2023, assumes Shoals Technologies Group, Inc. owned |
| Shoals Technologies Group, Inc. Adjusted Gross Profit, Adjusted Gross Profit Percentage, Adjusted EBITDA, Adjusted Net Income and Adjusted Diluted Earnings per Share (“EPS”) (Unaudited) | |||||||||||
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||
| 2024 | 2023 | 2024 | 2023 | ||||||||
| Statutory U.S. Federal income tax rate | 21.0 | % | 21.0 | % | 21.0 | % | 21.0 | % | |||
| Permanent adjustments | 1.0 | % | 1.8 | % | 0.9 | % | 1.4 | % | |||
| State and local taxes (net of federal benefit) | 2.9 | % | 3.3 | % | 2.8 | % | 3.2 | % | |||
| Effective income tax rate for Adjusted Net Income | 24.9 | % | 26.1 | % | 24.7 | % | 25.6 | % | |||
| (e) | Represents the estimated tax impact of all Adjusted Net Income add-backs, excluding those which represent permanent differences between book versus tax. | |
Reconciliation of Diluted Weighted Average Shares Outstanding to Adjusted Diluted Weighted Average Shares Outstanding (in thousands, except per share amounts):
| 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 | 170,365 | 169,310 | 162,611 | |||||||
| Assumed exchange of Class B common stock to Class A common stock | — | — | — | 7,619 | |||||||
| Adjusted diluted weighted average shares outstanding | 167,381 | 170,365 | 169,310 | 170,230 | |||||||
| Adjusted Net Income | $ | 13,935 | $ | 33,353 | $ | 44,382 | $ | 89,873 | |||
| Adjusted Diluted EPS | $ | 0.08 | $ | 0.20 | $ | 0.26 | $ | 0.53 | |||
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