FTC Solar, Inc. (NASDAQ:FTCI) Q2 2022 Earnings Conference Call August 9, 2022 8:30 AM ET Company Participants Bill Michalek - VP, IR Sean Hunkler - President & CEO Phelps Morris - CFO Patrick Cook - Chief Commercial Officer Conference Call Participants Kashy Harrison - Piper Sandler Donovan Schafer - Northland Capital Pavel Molchanov - Raymond James Jeffrey Osborne - Cowen and Company Maheep Mandloi - Credit Suisse Philip Shen - ROTH Capital Julien Dumoulin-Smith - Bank of America Operator Good day, and wel ...

August 9, 2022 Second Quarter 2022 Earnings Results 2 Forward-Looking Statements and Non-GAAP Financial Measures This presentation contains forward looking statements. These statements are not historical facts but rather are based on our current expectations and projections regarding our business, operations and other factors relating thereto. Words such as "may," "will," "could," "would," "should," "anticipate," "predict," "potential," "continue," "expects," "intends," "plans," "projects," "believes," "est ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2022 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Not Applicable Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report Securities registered pursuant to Section 12(b) of the Act: For the transition period from __________to__ ...

PART I [Item 1. Financial Statements (Unaudited)](index=4&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) The company reported a significant net loss and decreased assets, raising substantial doubt about its going concern ability [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets decreased to $211.4 million by March 31, 2022, driven by a significant reduction in cash and equivalents Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | March 31, 2022 | December 31, 2021 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $49,383 | $102,185 | | Accounts receivable, net | $132,230 | $107,548 | | Total current assets | $204,293 | $235,779 | | **Total assets** | **$211,408** | **$243,020** | | **Liabilities & Equity** | | | | Total current liabilities | $84,460 | $93,248 | | **Total liabilities** | **$91,240** | **$100,154** | | Accumulated deficit | $(177,025) | $(149,232) | | **Total stockholders' equity** | **$120,168** | **$142,866** | [Condensed Consolidated Statements of Comprehensive Loss](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Loss) Total revenue declined to $49.6 million, leading to a significant gross loss and a widened net loss of $27.8 million Q1 2022 vs Q1 2021 Performance (in thousands, except per share data) | Metric | Q1 2022 | Q1 2021 | | :--- | :--- | :--- | | Total revenue | $49,553 | $65,707 | | Gross profit (loss) | $(9,287) | $119 | | Loss from operations | $(27,778) | $(8,019) | | **Net loss** | **$(27,793)** | **$(7,442)** | | **Net loss per share (diluted)** | **$(0.28)** | **$(0.11)** | [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash used in operating activities significantly increased to $53.1 million, reducing cash and equivalents to $49.4 million Cash Flow Summary (in thousands) | Activity | Three months ended March 31, 2022 | Three months ended March 31, 2021 | | :--- | :--- | :--- | | Net cash used in operating activities | $(53,106) | $(25,904) | | Net cash used in investing activities | $(186) | $(85) | | Net cash provided by (used in) financing activities | $428 | $(2,045) | | **Net decrease in cash** | **$(52,802)** | **$(28,033)** | [Notes to Condensed Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) Notes highlight substantial doubt about going concern, management's mitigation plans, and details on reserves and legal proceedings - The company has determined there is **substantial doubt** about its ability to continue as a going concern within one year, based on recurring losses, the impact of the AD/CVD investigation, and expected continued operating losses[37](index=37&type=chunk) - Management has initiated actions to mitigate liquidity issues, including negotiating with lenders, improving operational performance, freezing non-essential hiring, negotiating payment terms, and exploring options for additional capital[38](index=38&type=chunk)[155](index=155&type=chunk) - The company is involved in a lawsuit with FCX Solar, LLC, which alleges breach of contract and patent infringement, but the company believes the claims are without merit and that a material loss is remote[84](index=84&type=chunk) - A **$5.0 million** reserve against revenue was recognized during the quarter for a potential customer concession[71](index=71&type=chunk) - In February 2022, the company engaged FEOC, a related party, for consulting services, incurring **$1.1 million** in general and administrative expenses for the quarter[92](index=92&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=18&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management attributes poor Q1 2022 performance to supply chain issues and trade investigations, impacting revenue, margins, and liquidity - Key factors negatively impacting performance include government trade actions (AD/CVD investigation), disruptions in transportation and supply chains leading to higher costs for steel and logistics, and the ongoing effects of the COVID-19 pandemic[99](index=99&type=chunk)[100](index=100&type=chunk)[103](index=103&type=chunk) - The U.S. Department of Commerce's AD/CVD investigation has caused developers to defer projects, which is expected to negatively impact the company's anticipated revenues and cash flows[35](index=35&type=chunk)[150](index=150&type=chunk) Non-GAAP Reconciliation Highlights (in thousands) | Metric | Q1 2022 | Q1 2021 | | :--- | :--- | :--- | | Net loss per GAAP | $(27,793) | $(7,442) | | Adjusted EBITDA | $(19,965) | $(6,664) | | Adjusted Net Loss | $(20,284) | $(6,676) | | Adjusted EPS (Diluted) | $(0.20) | $(0.10) | [Results of Operations](index=23&type=section&id=Results%20of%20Operations) Total revenue declined 24.6% to $49.6 million, with gross margin plummeting to -18.7% due to various cost pressures Revenue Breakdown by Type (in thousands) | Revenue Type | Q1 2022 | Q1 2021 | $ Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Product | $30,968 | $56,462 | $(25,494) | (45.2)% | | Service | $18,585 | $9,245 | $9,340 | 101.0% | | **Total revenue** | **$49,553** | **$65,707** | **$(16,154)** | **(24.6)%** | - The decrease in product revenue was primarily due to a customer concession reserve, a **34% decrease in MW produced**, and an **11% decrease in Average Selling Price (ASP)**[126](index=126&type=chunk) - Gross profit fell by **$9.4 million**, resulting in a gross loss of **$9.3 million** (**-18.7% margin**) in Q1 2022, compared to a gross profit of **$0.1 million** (**0.2% margin**) in Q1 2021[131](index=131&type=chunk)[132](index=132&type=chunk) - General and administrative expenses increased **171.8%** to **$13.8 million**, mainly due to higher stock-based compensation (**$3.2M**), payroll (**$2.9M**), and legal/professional fees (**$1.0M**)[139](index=139&type=chunk) [Liquidity and Capital Resources](index=26&type=section&id=Liquidity%20and%20Capital%20Resources) Liquidity significantly tightened with cash at $49.4 million and limited available liquidity due to debt covenants - As of March 31, 2022, the company had **$49.4 million** in cash, **$119.8 million** in working capital, and **$98.1 million** of unused borrowing capacity[148](index=148&type=chunk) - A minimum liquidity covenant of **$125.0 million** on the revolving credit facility restricts available liquidity, which was approximately **$22.4 million** as of March 31, 2022[148](index=148&type=chunk) - The company collected approximately **$62 million** of receivables subsequent to quarter-end, increasing its cash balance to around **$71 million** as of May 12, 2022[149](index=149&type=chunk) - The company may need to issue additional debt or equity to fund operations for the next twelve months if its initiatives are not successful or if market conditions deteriorate[153](index=153&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=33&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company faces market risks from commodity price fluctuations and customer concentrations, potentially impacting margins - The primary market risks are customer concentrations and fluctuations in the prices of steel, aluminum, and logistics/transportation[199](index=199&type=chunk) - The company is subject to indirect risk from fluctuating commodity prices (steel, aluminum) as its contract manufacturers procure these materials, where significant price increases could reduce operating margins[200](index=200&type=chunk) [Item 4. Controls and Procedures](index=33&type=section&id=Item%204.%20Controls%20and%20Procedures) Disclosure controls were ineffective due to material weaknesses in internal controls, with a remediation plan underway - Management concluded that disclosure controls and procedures were **not effective** as of March 31, 2022[201](index=201&type=chunk) - Three material weaknesses were identified: 1) Insufficient experienced personnel for public company accounting; 2) Inadequate controls over the period-end close and financial reporting process; 3) Ineffective information technology general controls[204](index=204&type=chunk)[205](index=205&type=chunk) - A remediation plan is in progress, including hiring a Director of SEC Reporting, a Corporate Controller, a Director of Internal Audit, and a CIO, as well as implementing new tools and formalizing policies[207](index=207&type=chunk) PART II – OTHER INFORMATION [Item 1. Legal Proceedings](index=35&type=section&id=Item%201.%20Legal%20Proceedings) The company is defending against FCX Solar lawsuits alleging breach of contract and patent infringement, deeming material loss remote - FCX Solar, LLC filed lawsuits alleging breach of contract, fraud, unjust enrichment, and patent infringement, though the fraud and unjust enrichment claims were dismissed[212](index=212&type=chunk) - The company believes the claims are without merit, plans to vigorously defend against them, and has determined that a material loss is remote[212](index=212&type=chunk) [Item 1A. Risk Factors](index=35&type=section&id=Item%201A.%20Risk%20Factors) Significant risks include a history of losses, intense competition, supply chain disruptions, and tight liquidity - Key business risks include a history of losses, competition from larger companies, and dependence on the solar industry's competitiveness[214](index=214&type=chunk) - Manufacturing and supply chain risks stem from reliance on contract manufacturers and their ability to source raw materials and deliver products in a timely, cost-effective manner[214](index=214&type=chunk) - Regulatory risks include changes in government incentives, tax credits, and international trade policies, such as tariffs, which could adversely affect business[220](index=220&type=chunk) - The company has a history of cash outflows and limited available liquidity of **$22.4 million** as of March 31, 2022, after considering debt covenants[215](index=215&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=36&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company completed its IPO in April 2021, generating $241.2 million in net proceeds for general corporate purposes - The company completed its IPO on April 30, 2021, with net proceeds of **$241.2 million**[217](index=217&type=chunk) - **$54.2 million** of IPO proceeds were used to purchase **4,455,384 shares** of common stock, with the remainder used for general corporate purposes[217](index=217&type=chunk)

Financial Performance - First Quarter 2022 revenue was $49553 thousand, compared to $65707 thousand in the same period of 2021[11] - Gross margin percentage for the first quarter of 2022 was negative 18.7%, compared to 0.2% in the first quarter of 2021[11] - Net loss for the first quarter of 2022 was $27793 thousand, compared to $7442 thousand in the first quarter of 2021[11] - Diluted loss per share for the first quarter of 2022 was $0.28, compared to $0.11 in the first quarter of 2021[11] - Second Quarter 2022 revenue guidance is $30 million to $35 million[13] - Second Quarter 2022 Non-GAAP gross margin is expected to be negative 29% to negative 19%[13] - Adjusted EBITDA for the second quarter of 2022 is projected to be negative $19.7 million to negative $16.7 million[13] Business Highlights - Bookings progress reached $664 million, with $112 million added since March 15[5] - Approximately 50% of recent bookings are international[5] - The international pipeline has reached 32 GW, representing a 20%+ year-to-date growth[5, 7, 16]

FTC Solar, Inc. (NASDAQ:FTCI) Q1 2022 Results Conference Call May 10, 2022 8:30 AM ET Company Participants Bill Michalek - Vice President, Investor Relations Sean Hunkler - President and Chief Executive Officer Phelps Morris - Chief Financial Officer Patrick Cook - Chief Commercial Officer Conference Call Participants Philip Shen - ROTH Capital Maheep Mandloi - Credit Suisse Pavel Molchanov - Raymond James Julien Dumoulin-Smith - Bank of America Donovan Schafer - Northland Capital Kashy Harrison - Piper San ...

For the fiscal year ended December 31, 2021 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM TO UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (Mark One) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File Number 001-40350 FTC SOLAR, INC. (Exact name of Registrant as specified in its Charter) Delaware 81-4816270 (State or other jurisdiction of inco ...

Financial Data and Key Metrics Changes - Fourth quarter revenue grew approximately 92% sequentially and 130% year-over-year, significantly exceeding guidance due to revenue pull forward from Q1 [9][30] - GAAP gross loss was $8.6 million, or 8.4% of sales, an improvement from a gross loss of $4.8 million in the prior year period [31] - GAAP net loss was $23.9 million, or $0.25 per share, compared to a loss of $9.7 million, or $0.15 per share in the year-ago quarter [33] - Adjusted EBITDA loss was $16.4 million, at the low end of the guidance range, primarily due to a $3 million reserve for potential customer credit [34] Business Line Data and Key Metrics Changes - The company added three more contracts to its SunPath offering, bringing the total to seven, and launched a new turnkey DG offering targeting the sub 20 megawatt segment [10][11] - Contracts and awarded orders as of March 14th totaled $606 million, with expected delivery dates in 2022 and beyond [35] Market Data and Key Metrics Changes - The company anticipates annual revenue growth of about 62% for 2022, significantly outpacing market growth [12][39] - The bidding activity has increased significantly following a seasonally slow holiday period, with expectations for resolution on WRO [36] Company Strategy and Development Direction - The company announced its intent to acquire HX Tracker, a strategic move to accelerate international expansion and enhance product offerings [12][19] - The acquisition is expected to generate $59 million in revenue and $4 million of EBITDA accretion in 2023, and $67 million in revenue and $7 million in 2024 [19] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about long-term growth opportunities in the U.S. and increasing traction internationally, despite challenges in the current operating environment [22][23] - The company is focused on improving gross margins through various initiatives, including reducing steel content and optimizing logistics [87] Other Important Information - The company completed its initial public offering in April 2021, strengthening its balance sheet [20] - Management announced a leadership change, with Patrick Cook transitioning to Chief Commercial Officer and Phelps Morris appointed as the new CFO [24][25] Q&A Session Summary Question: What drove the significant pull forward in revenues? - Management indicated that several factors contributed, including supplier collaboration and customer requests for additional project progress [43] Question: What is the geographic mix of revenue expected from the HX acquisition? - The acquisition is expected to have a robust mix across international markets, particularly in China, Africa, and the Middle East [65][69] Question: How is the company managing steel price fluctuations? - The company is refreshing project bids every two weeks to manage steel exposure and maintain margins [63] Question: What percentage of deliveries this year are expected for projects without modules? - Management confirmed that some developers are placing orders for trackers even without 100% certainty on module availability [82][85] Question: What are the risks associated with the transition from Q1 to Q2 margins? - Management acknowledged various risks, including external factors like WRO and AD/CVD, but emphasized a strong focus on controllable aspects to achieve margin improvement [88]

Financial Performance & Outlook - Fourth quarter revenue exceeded guidance, showing a 92% quarter-over-quarter (q/q) increase and a 130% year-over-year (y/y) increase[4] - The company is targeting approximately 62% revenue growth in 2022[4, 13] - First quarter 2022 revenue is projected to be between $55 million and $65 million[13] - Full year 2022 revenue is projected to be between $415 million and $460 million[13] - Non-GAAP gross margin for the first quarter of 2022 is expected to be between -7% and 0%, and for the full year 2022, between 11% and 14%[13] - Adjusted EBITDA for the first quarter of 2022 is projected to be between negative $175 million and negative $135 million, and for the full year 2022, between negative $4 million and $11 million[13] Acquisition of HX Tracker - The company announced the acquisition of HX Tracker, an international tracker company[4] - HX Tracker's pipeline is estimated at approximately 20 gigawatts[5, 6] - The upfront consideration for HX Tracker is $43 million in cash plus 14 million shares[9] - HX Tracker is projected to contribute $10 million in revenue in 2022, $59 million in 2023, and $67 million in 2024[7] - HX Tracker's adjusted EBITDA contribution is projected to be negative $1 million in 2022, $4 million in 2023, and $7 million in 2024[8]

November 10, 2021 Third Quarter 2021 Earnings Results 2 Forward-Looking Statements and Non-GAAP Financial Measures This presentation contains forward-looking statements that involve substantial risks and uncertainties. All statements, other than statements of historical facts, contained in this presentation, including statements regarding the Company's strategy, future operations, future financial position, future revenues, projected costs, prospects, plans and objectives of management, are forward-looking ...