Nikada/E+ via Getty Images Investment Thesis Shoals Technologies Group (NASDAQ:SHLS) is the leading utility scale electrical balance of systems (EBOS) manufacturer for solar, energy storage, and eMobility. Shoals has consistently achieved 50% to 60% year-over-year revenue growth since going public and is increasing their exposure to international markets. Shoals has incorrectly been sold off by the market alongside other solar stocks. While the general solar market sell-off is justified by lower sales and p ...

Shoals Technologies Group, Inc. (NASDAQ:SHLS) Q3 2023 Results Conference Call November 7, 2023 5:00 PM ET Company Participants Mehgan Peetz - Chief Legal Officer Brandon Moss - CEO Dominic Bardos - CFO Conference Call Participants Brian Lee - Goldman Sachs Philip Shen - ROTH MKM Jordan Levy - Truist Securities Colin Rusch - Oppenheimer Andrew Percoco - Morgan Stanley Christine Cho - Barclays Donovan Schafer - Northland Capital Markets Derek Soderberg - Cantor Fitzgerald Operator Good afternoon. And welcome ...

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 September 30, 2023 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _________ to _________ Commission File Number: 001-39942 Shoals Technologies Group, Inc. (Exact name of registrant as specified in its charter) | Delaware | | 85-377 ...

Shoals Technologies Group, Inc. (NASDAQ:SHLS) Q2 2023 Earnings Conference Call August 1, 2023 5:00 PM ET Company Participants Brandon Moss - Chief Executive Officer Jeff Tolnar - President Dominic Bardos - Chief Financial Officer Dhaval Patel - VP of Investor Relations Mehgan Peetz - Chief Legal Counsel Conference Call Participants Philip Shen - ROTH MKM Jordan Levy - Truist Securities Hilary Cauley - Guggenheim Brian Lee - Goldman Sachs Colin Rusch - Oppenheimer Luke Tilkens - Piper Sandler Derek Soderberg ...

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, 2023 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _________ to _________ Commission File Number: 001-39942 Shoals Technologies Group, Inc. (Exact name of registrant as specified in its charter) | Delaware | | 85-3774438 ...

Shoals Technologies Group, Inc. (NASDAQ:SHLS) Q1 2023 Earnings Conference Call May 8, 2023 5:00 PM ET Company Participants Mehgan Peetz - Chief Legal Officer Jeffery Tolnar - Interim Chief Executive Officer and President Dominic Bardos - Chief Financial Officer Conference Call Participants Philip Shen - ROTH MKM Mark Strouse - JPMorgan Andrew Percoco - Morgan Stanley Maheep Mandloi - Crédit Suisse Brian Lee - Goldman Sachs Jordan Levy - Truist Securities Colin Rusch - Oppenheimer Kashy Harrison - Piper Sand ...

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 March 31, 2023 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _________ to _________ Commission File Number: 001-39942 Shoals Technologies Group, Inc. (Exact name of registrant as specified in its charter) | Delaware | | 85-3774438 ...

Financial Data and Key Metrics Changes - In the fourth quarter, net income was $118.3 million compared to a net loss of $2.2 million in the prior year, significantly benefiting from a $110.9 million noncash gain related to the termination of a tax receivable agreement [68] - Fourth quarter revenue grew 97% year-over-year to $94.7 million, driven by increased demand for solar and EV solutions [74][136] - Adjusted EBITDA increased 167% to $30.1 million, with an adjusted EBITDA margin of 31.8%, reflecting higher gross margins [148] Business Line Data and Key Metrics Changes - System Solutions revenue grew 150% year-over-year, representing 86% of total revenue, up from 68% in the prior year [136] - The new wire management product line contributed to growth, with an attach rate to BLA continuing to increase [60] - Battery storage products also contributed to growth, with shipments beginning for a 1 gigawatt DC storage project [61] Market Data and Key Metrics Changes - Quoting volumes for international markets, particularly in Latin America, Australia, and EMEA, are increasing, indicating strong demand [63] - The solar market conditions are favorable, with early benefits from the Inflation Reduction Act driving demand for solar and storage offerings [64] - The EV market is seeing increased quote volumes related to fast charging solutions, driven by infrastructure bill funds [64] Company Strategy and Development Direction - The company aims to reach the next $500 million in revenue by fulfilling orders where customers are located, with a focus on international expansion [6] - Investments are being made in sales infrastructure and customer care to support growth and improve customer satisfaction [66][67] - The company is targeting a gross margin in the 40% range for 2023, with expectations for modest margin expansion [70][87] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving strong growth in 2023, with a revenue target range of $470 million to $510 million, representing a year-over-year increase of 44% to 56% [87] - The company has not seen significant delays in projects or installations due to supply chain issues, maintaining a strong outlook for revenue realization from backlog [93][125] - Management is optimistic about the adoption of new products and the overall market demand, particularly in the EV sector [118] Other Important Information - The company is in the process of transitioning its CEO, with Jeff Tolnar appointed as Interim CEO [75][76] - The company plans to continue investing in SG&A to support scalable long-term growth, anticipating a sequential increase in expenses throughout 2023 [88] Q&A Session Summary Question: Is there any additional upside in the potential revenue guidance should UFLPA resolve faster than expected? - Management is comfortable with the current guidance range and has not seen significant delays affecting revenue [93] Question: Can you talk about the ramp-up in your manufacturing facility and long-term margin expectations? - Management indicated that they expect a 40% gross margin to be achievable and are looking to expand production capacity [109] Question: What percentage of your backlog might be impacted by UFLPA? - Management stated that they do not expect significant impacts from UFLPA and anticipate realizing the backlog within the expected timeframe [98][125] Question: Can you provide an update on the EV charging business and its contribution to 2023 revenues? - The EV charging business is seeing strong adoption, particularly in fleet and school bus electrification, with increased quoting volumes [164]

Part I [Business](index=4&type=section&id=Item%201.%20Business) Shoals Technologies Group, Inc. is a leading U.S. provider of EBOS solutions for solar, battery storage, and EV charging applications [Overview](index=4&type=section&id=Overview) - The company is a leading provider of electrical balance of system (EBOS) solutions for solar, battery storage, and electric vehicle (EV) charging applications[16](index=16&type=chunk) FY2022 Key Business Metrics | Metric | Value | Source | | :--- | :--- | :--- | | Revenue from System Solutions | 77.8% of total revenue | For year ended Dec 31, 2022 | | Backlog & Awarded Orders | $428.6 million | As of Dec 31, 2022 | | - Backlog (signed orders) | $168.9 million | As of Dec 31, 2022 | | - Awarded Orders (contract pending) | $259.7 million | As of Dec 31, 2022 | | Backlog & Awarded Orders Growth (YoY) | 43% | vs. Dec 31, 2021 | - The company has expanded into the EV charging market, introducing four new product families in late 2021 and scaling production through 2022[20](index=20&type=chunk) [Our Proprietary EBOS System](index=5&type=section&id=Our%20Proprietary%20EBOS%20System) - The company invented a proprietary "combine-as-you-go" wiring architecture as an alternative to traditional "homerun" systems[24](index=24&type=chunk) - Key advantages of the "combine-as-you-go" system include: - Above-ground installation, eliminating costly trenching - Installation by general labor instead of licensed electricians - Significant reduction in wire runs (up to **95%**) and connection points (over **80%**) - Elimination of combiner boxes - Greater reliability and lower maintenance costs[25](index=25&type=chunk) [Products and Services](index=7&type=section&id=Products%20and%20Services) - The company offers complete EBOS "system solutions" for both traditional homerun and its proprietary combine-as-you-go architectures[27](index=27&type=chunk)[28](index=28&type=chunk) - New eMobility solutions for the EV charging market include power centers, quick connect solutions for chargers, BLA technology for EV applications, and a protective raceway system[31](index=31&type=chunk) - Individual components sold include combiners, connectors, fuses, disconnects, and junction boxes, with component sales constituting **22.2%** of revenue in FY2022[33](index=33&type=chunk)[34](index=34&type=chunk)[35](index=35&type=chunk)[36](index=36&type=chunk) [Customers and Competition](index=9&type=section&id=Customers%20and%20Competition) - Products are sold principally to engineering, procurement, and construction (EPC) firms that build solar energy projects[41](index=41&type=chunk) Customer Concentration (FY2022) | Customer Group | % of Total Revenue | | :--- | :--- | | Largest Customer | 8.4% | | Five Largest Customers | 35.8% | - Principal competitors include SolarBOS Inc., Bentek Corporation, Voltage, LLC, and Hikam America, Inc[43](index=43&type=chunk) [Manufacturing, R&D, and Intellectual Property](index=9&type=section&id=Manufacturing%2C%20R%26D%2C%20and%20Intellectual%20Property) - The company utilizes a proprietary manufacturing process involving resistance welding and a two-layer "undermold/overmold" seal, which it believes is unique in the industry, with facilities in Tennessee, Alabama, and California[45](index=45&type=chunk)[46](index=46&type=chunk) - The company focuses R&D on developing innovative products to reduce cost and improve reliability, commercializing most new EBOS products and methods in the U.S. solar industry over the past five years[48](index=48&type=chunk) Intellectual Property Portfolio (as of Dec 31, 2022) | IP Type | U.S. | Non-U.S. | | :--- | :--- | :--- | | Issued Patents | 19 | 16 | | Pending Patent Applications | 28 | N/A | | Trademark Registrations | 26 | N/A | | Pending Trademark Applications | 5 | N/A | - The average remaining life of the company's issued U.S. patents is approximately **12.0 years**[51](index=51&type=chunk) [Human Capital](index=10&type=section&id=Human%20Capital) - As of December 31, 2022, the company had approximately **835** full-time and temporary employees, the vast majority located in the United States[57](index=57&type=chunk) Full-Time Employee Diversity Metrics (mid-October 2022) | Metric | Percentage | | :--- | :--- | | Self-identified as ethnically diverse | 45% | | Self-identified as female | 39% | | Women in manager population | 28% | - None of the company's employees are represented by a labor union, and relations are considered to be good[59](index=59&type=chunk) [Risk Factors](index=14&type=section&id=Item%201A.%20Risk%20Factors) The company faces significant risks from solar market dependency, macroeconomic pressures, supply chain disruptions, and regulatory changes [Risks Related to Our Business and Our Industry](index=15&type=section&id=Risks%20Related%20to%20Our%20Business%20and%20Our%20Industry) - Business success is highly dependent on the continued growth in demand for solar energy projects, which can be cyclical and is influenced by factors like government subsidies and the cost of traditional energy sources[80](index=80&type=chunk)[84](index=84&type=chunk) - Macroeconomic events, including heightened inflation, rising interest rates, and potential recession, could negatively affect demand and increase operating and interest costs[85](index=85&type=chunk)[86](index=86&type=chunk) - A significant portion of operations is concentrated in Tennessee manufacturing facilities, making the business vulnerable to damage or disruption at these locations[95](index=95&type=chunk) - The business depends on a limited number of vendors, exposing it to risks of delays, disruptions, or quality control problems from vendor concentration[106](index=106&type=chunk) - Defects or performance problems in mission-critical products could lead to loss of customers, reputational damage, and significant warranty, indemnity, or product liability claims[118](index=118&type=chunk) [Risks Related to Regulatory Matters](index=27&type=section&id=Risks%20Related%20to%20Regulatory%20Matters) - Changes to electric utility industry policies and regulations, such as renewable portfolio standards (RPS) and net metering, could present barriers to the purchase of solar energy systems and reduce demand[138](index=138&type=chunk)[139](index=139&type=chunk)[140](index=140&type=chunk) - Changes in the U.S. trade environment, including the imposition of tariffs (e.g., Section 201, Section 301), antidumping duties, and regulations like the Uyghur Forced Labor Prevention Act (UFLPA), could adversely affect the cost and availability of solar components, impacting project viability and demand for the company's products[144](index=144&type=chunk)[147](index=147&type=chunk)[148](index=148&type=chunk) [Risks Related to Our Organizational Structure and Class A Common Stock](index=30&type=section&id=Risks%20Related%20to%20Our%20Organizational%20Structure%20and%20Class%20A%20Common%20Stock) - The company is a holding company with its principal asset being its interest in Shoals Parent LLC, making it dependent on distributions from Shoals Parent to fund its operations and pay taxes[151](index=151&type=chunk) - Future sales of Class A common stock by existing stockholders, or the perception of such sales, could cause the market price to decline[155](index=155&type=chunk) - The company does not intend to pay cash dividends on its Class A common stock in the foreseeable future, retaining earnings for business operations[163](index=163&type=chunk) [Properties](index=33&type=section&id=Item%202.%20Properties) The company owns and leases various facilities for office, manufacturing, warehousing, and shipping, primarily in Tennessee, Alabama, and California Material Facilities as of December 31, 2022 | Location | Status | Square Feet | Uses | | :--- | :--- | :--- | :--- | | 1400 Shoals Way, Portland, TN | Owned | 103,200 | Office, manufacturing, warehousing and shipping | | 1035 Fred White Blvd., Portland, TN | Owned | 75,360 | Office, manufacturing, warehousing and shipping | | 109 Kirby Drive, Portland, TN | Leased | 219,767 | Office, manufacturing, warehousing and shipping | | 215 Industrial Drive, Muscle Shoals, AL | Owned | 16,910 | Office, manufacturing, warehousing and shipping | | 13370 Kirkham Way, Poway, CA | Leased | 21,761 | Office, manufacturing, warehousing and shipping | | 13651 Danielson Street, Poway, CA | Leased | 15,411 | Office, manufacturing, warehousing and shipping | [Legal Proceedings](index=34&type=section&id=Item%203.%20Legal%20Proceedings) The company is not currently involved in any legal claims or proceedings expected to materially affect its business or financial condition - Currently, there are no claims or proceedings against the company that are believed to have a material adverse effect on the business[173](index=173&type=chunk) Part II [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=34&type=section&id=Item%205.%20Market%20for%20Registrant%27s%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) The company's Class A common stock trades on NASDAQ, with no current dividend plans, and saw significant Class B to Class A share exchanges - Class A common stock is traded on the NASDAQ Global Market under the symbol "**SHLS**"[176](index=176&type=chunk) - The company does not currently expect to pay any cash dividends and intends to retain all available funds for business operations[178](index=178&type=chunk) - During the quarter ended December 31, 2022, certain Continuing Equity Owners exchanged **22,396,301** LLC Units and an equal number of Class B shares for **22,396,301** newly-issued shares of Class A common stock[182](index=182&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=35&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) FY2022 revenue grew **53%** to **$326.9 million**, with net income surging to **$143.0 million** primarily due to a significant gain from TRA termination [Results of Operations](index=40&type=section&id=Results%20of%20Operations) Consolidated Results of Operations (in thousands) | | Year Ended Dec 31, 2022 (in thousands) | Year Ended Dec 31, 2021 (in thousands) | $ variance (in thousands) | % variance | | :--- | :--- | :--- | :--- | :--- | | **Revenue** | **$326,940** | **$213,212** | **$113,728** | **53%** | | Cost of revenue | $195,629 | $130,567 | $65,062 | 50% | | **Gross profit** | **$131,311** | **$82,645** | **$48,666** | **59%** | | Total operating expenses | $64,981 | $46,413 | $18,568 | 40% | | **Income from operations** | **$66,330** | **$36,232** | **$30,098** | **83%** | | Gain on termination of tax receivable agreement | $110,883 | $— | $110,883 | 100% | | **Net income** | **$143,013** | **$3,944** | **$139,069** | **3,526%** | | Net income attributable to Shoals Technologies Group, Inc. | $127,611 | $2,348 | $125,263 | 5,335% | - Revenue increased by **53%** in 2022, driven by higher sales volumes from increased demand for solar EBOS generally and the company's combine-as-you-go system solutions specifically[217](index=217&type=chunk) - Gross profit as a percentage of revenue increased from **38.8%** in 2021 to **40.2%** in 2022, attributed to a higher proportion of sales from higher-margin combine-as-you-go systems and increased leverage on fixed costs[218](index=218&type=chunk) - A gain of **$110.9 million** was recognized in 2022 from the termination of the Tax Receivable Agreement (TRA), significantly boosting net income[224](index=224&type=chunk) [Non-GAAP Financial Measures](index=41&type=section&id=Non-GAAP%20Financial%20Measures) Reconciliation of Net Income to Adjusted EBITDA (in thousands) | | 2022 (in thousands) | 2021 (in thousands) | | :--- | :--- | :--- | | Net income | $143,013 | $3,944 | | Adjustments | ($50,024) | $58,913 | | **Adjusted EBITDA** | **$92,989** | **$62,857** | Reconciliation of Net Income to Adjusted Net Income (in thousands) | | 2022 (in thousands) | 2021 (in thousands) | | :--- | :--- | :--- | | Net income attributable to Shoals | $127,611 | $2,348 | | Adjustments | ($65,208) | $33,566 | | **Adjusted Net Income** | **$62,403** | **$35,914** | Adjusted Diluted EPS | | 2022 | 2021 | | :--- | :--- | :--- | | Adjusted Net Income (in thousands) | $62,403 | $35,914 | | Adjusted diluted weighted average shares (in thousands) | 167,631 | 166,936 | | **Adjusted Diluted EPS ($)** | **$0.37** | **$0.22** | [Liquidity and Capital Resources](index=45&type=section&id=Liquidity%20and%20Capital%20Resources) Summary of Cash Flows (in thousands) | Cash Flow Activity | Year Ended Dec 31, 2022 (in thousands) | Year Ended Dec 31, 2021 (in thousands) | | :--- | :--- | :--- | | Net cash provided by (used in) operating activities | $39,455 | $(4,083) | | Net cash used in investing activities | $(3,657) | $(17,035) | | Net cash provided by (used in) financing activities | $(36,589) | $20,602 | - As of December 31, 2022, the company had **$8.8 million** in cash and cash equivalents, **$243.3 million** in outstanding borrowings, and **$102.0 million** available under its **$150.0 million** Revolving Credit Facility[239](index=239&type=chunk) - Cash from operations was **$39.5 million**, primarily driven by net income adjusted for non-cash items, offset by increases in inventory (**$36.9 million**) and accounts receivable (**$22.4 million**)[240](index=240&type=chunk) - Cash used in financing activities was **$36.6 million**, primarily due to a **$58.0 million** payment to terminate the TRA, offset by **$42.9 million** in net proceeds from a follow-on stock offering[242](index=242&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=48&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) Primary market risks include customer concentration, commodity price volatility, and interest rate fluctuations on variable-rate debt - The company has significant customer concentration risk, with the largest customer accounting for **8.4%** of revenue and the top five customers for **35.8%** in FY2022[258](index=258&type=chunk) - The business is subject to commodity price risk from fluctuating market prices of raw materials like copper, aluminum, and steel, and does not currently use hedging arrangements[259](index=259&type=chunk) - The company has interest rate risk on its **$243.3 million** of variable-rate long-term debt, where a **100 basis point** increase in interest rates would impact annual interest expense by approximately **$2.4 million**[260](index=260&type=chunk) [Controls and Procedures](index=49&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management concluded that disclosure controls and internal control over financial reporting were effective as of December 31, 2022 - Management, including the CEO and CFO, concluded that as of December 31, 2022, the company's disclosure controls and procedures were effective[264](index=264&type=chunk) - Management assessed the effectiveness of internal control over financial reporting and concluded that it was effective as of December 31, 2022, based on the COSO framework (2013)[266](index=266&type=chunk) Part III [Directors, Executive Officers, Corporate Governance, Compensation, and Related Party Transactions](index=50&type=section&id=Items%2010-14) Information for Items 10-14, including governance, compensation, and related party transactions, is incorporated by reference from the definitive proxy statement - The information required for Items 10, 11, 12, 13, and 14 is incorporated by reference from the company's definitive proxy statement to be filed with the SEC[273](index=273&type=chunk)[274](index=274&type=chunk)[275](index=275&type=chunk)[276](index=276&type=chunk)[277](index=277&type=chunk) Part IV [Exhibits and Financial Statement Schedules](index=51&type=section&id=Item%2015.%20Exhibits%20and%20Financial%20Statement%20Schedules) This section includes required financial statements starting on page F-1 and an index of all exhibits filed with the Form 10-K - The financial statements and supplementary data required by this item are included in the Annual Report on Form 10-K beginning on page F-1[279](index=279&type=chunk) Financial Statements and Notes to Consolidated Financial Statements The audited consolidated financial statements present the company's financial position and results, detailing key events like the TRA termination gain [Consolidated Financial Statements](index=60&type=section&id=Consolidated%20Financial%20Statements) Consolidated financial statements show significant growth in assets and revenue, with net income surging due to a one-time gain Consolidated Balance Sheets (in thousands) | | Dec 31, 2022 (in thousands) | Dec 31, 2021 (in thousands) | | :--- | :--- | :--- | | **Total Current Assets** | **$153,540** | **$93,448** | | Total Assets | $594,895 | $426,414 | | **Total Current Liabilities** | **$52,622** | **$31,554** | | Long-term debt, less current portion | $189,063 | $189,913 | | Payable pursuant to the tax receivable agreement | $— | $156,374 | | Total Liabilities | $293,906 | $433,912 | | **Total stockholders' equity (deficit)** | **$300,989** | **$(7,498)** | Consolidated Statements of Operations (in thousands) | | Year Ended Dec 31, 2022 (in thousands) | Year Ended Dec 31, 2021 (in thousands) | | :--- | :--- | :--- | | Revenue | $326,940 | $213,212 | | Gross profit | $131,311 | $82,645 | | Income from operations | $66,330 | $36,232 | | Gain on termination of tax receivable agreement | $110,883 | $— | | **Net income** | **$143,013** | **$3,944** | | **Net income attributable to Shoals Technologies Group, Inc.** | **$127,611** | **$2,348** | [Note 9. Long-Term Debt](index=79&type=section&id=Note%209.%20Long-Term%20Debt) As of December 31, 2022, total debt was **$243.3 million**, including a Term Loan and upsized Revolving Credit Facility Long-Term Debt Outstanding (in thousands) | Facility | Dec 31, 2022 (in thousands) | Dec 31, 2021 (in thousands) | | :--- | :--- | :--- | | Term Loan Facility | $195,250 | $197,250 | | Revolving Credit Facility | $48,000 | $55,140 | | **Total Principal** | **$243,250** | **$252,390** | - In May 2022, the company amended its Senior Secured Credit Agreement to increase the Revolving Credit Facility from **$100.0 million** to **$150.0 million**[427](index=427&type=chunk) - As of December 31, 2022, the interest rate on the Term Loan Facility was **7.51%** and the rate on the Revolving Credit Facility ranged from **7.00%** to **7.92%**[432](index=432&type=chunk) [Note 10. Earnings per Share (EPS)](index=82&type=section&id=Note%2010.%20Earnings%20per%20Share%20%28EPS%29) For FY2022, basic EPS was **$1.11** and diluted EPS was **$0.85**, reflecting potential dilution from Class B stock and stock units Earnings Per Share Calculation (FY2022) | Metric | Value | | :--- | :--- | | Net income attributable to Shoals (basic) | $127,611 thousand | | Weighted average shares (basic) | 114,495 thousand | | **Basic EPS ($)** | **$1.11** | | Net income attributable to Shoals (diluted) | $143,013 thousand | | Weighted average shares (diluted) | 167,631 thousand | | **Diluted EPS ($)** | **$0.85** | [Note 17. Payable Pursuant to the Tax Receivable Agreement](index=92&type=section&id=Note%2017.%20Payable%20Pursuant%20to%20the%20Tax%20Receivable%20Agreement) The company amended and terminated its Tax Receivable Agreement (TRA) in December 2022 for a **$58.0 million** payment, recognizing a **$110.9 million** gain - On November 29, 2022, the company entered into an amendment to its TRA, granting it the right to terminate the agreement for a cash payment of **$58.0 million**[505](index=505&type=chunk) - The company exercised its termination right on December 6, 2022, resulting in a remeasurement of the TRA liability to **$58.0 million** and the recognition of a **$110.9 million** gain on termination, which was recorded in the statement of operations[505](index=505&type=chunk) [Note 18. Revenue Recognition](index=93&type=section&id=Note%2018.%20Revenue%20Recognition) Revenue is disaggregated by system solutions (**77.8%** in 2022) and components (**22.2%**), primarily recognized over time based on units manufactured Revenue by Product Type (in thousands) | Product Type | 2022 (in thousands) | 2021 (in thousands) | 2020 (in thousands) | | :--- | :--- | :--- | :--- | | System solutions | $254,415 | $155,818 | $116,720 | | Components | $72,525 | $57,394 | $58,798 | | **Total revenue** | **$326,940** | **$213,212** | **$175,518** | - The company primarily recognizes revenue over time using the output method based on units manufactured, as this best depicts the continuous transfer of control to the customer for products that do not have an alternative use[367](index=367&type=chunk) [Note 20. Subsequent Events](index=95&type=section&id=Note%2020.%20Subsequent%20Events) Subsequent to year-end, the company entered a separation agreement with its CEO, effective March 15, 2023, accelerating unvested equity awards - On February 24, 2023, the company entered into a separation agreement with its CEO, effective March 15, 2023, due to his termination for disability for health reasons[516](index=516&type=chunk) - The separation will result in the acceleration of unvested RSUs and a prorated portion of unvested PSUs, leading to an estimated equity-based compensation expense of **$4.0 million** to be recognized in Q1 2023[516](index=516&type=chunk)

Shoals Technologies Group, Inc. (NASDAQ:SHLS) Q3 2022 Earnings Conference Call November 14, 2022 5:00 PM ET Company Participants Mehgan Peetz - General Counsel, Chief Legal Officer & Corporate Secretary Jason Whitaker - CEO, President & Director Dominic Bardos - CFO Conference Call Participants Mark Strouse - JPMorgan Chase & Co. Philip Shen - ROTH Capital Partners Maheep Mandloi - Crédit Suisse Martin Malloy - Johnson Rice & Company Colin Rusch - Oppenheimer Kashy Harrison - Piper Sandler Brian Lee - Goldm ...