Shoals Technologies (US:SHLS)2023-08-02 02:47Financial Data and Key Metrics Changes - The company reported a record backlog and awarded orders of $546.1 million, an increase of 67% year-over-year [2][57] - Second quarter revenue grew 62% year-over-year to $119.2 million, driven by strong demand for combine-as-you-go EBOS System Solutions [35][57] - Gross profit increased 77% to $50.5 million, with gross margin growing 350 basis points to 42.4% [25][26] - Adjusted EBITDA rose 96% to $38.7 million, with adjusted EBITDA margin expanding 550 basis points to 32.4% [26][8] Business Line Data and Key Metrics Changes - System Solutions revenue grew 80% year-over-year, comprising 86% of total revenue compared to 77% in the prior year [2][35] - The company converted one additional customer to its combine-as-you-go system, bringing the total number of BLA customers to 43 [19] Market Data and Key Metrics Changes - The solar market conditions remain favorable, with strong project visibility supported by quoting activity and order flow [23] - International revenue backlog and awarded orders continue to grow, with the company exploring international production options to meet demand [31][64] Company Strategy and Development Direction - The company is focused on expanding its product offerings, including the commercial launch of Snapshot I-V and high-capacity plug-and-play harnesses [20][21] - The company aims to enhance its international presence and is evaluating production options in targeted markets such as Australia and Europe [45][64] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's growth trajectory, citing strong demand and a robust backlog [57][74] - The company anticipates revenue for the full year to be in the range of $480 million to $510 million, with adjusted EBITDA expected between $145 million and $160 million [37] Other Important Information - The company recorded a $9.4 million charge for warranty expenses related to a wire issue with a supplier [56] - The company generated cash from operations of nearly $27.9 million and used excess cash to pay down $25.0 million of its revolver [57] Q&A Session Summary Question: Concerns about pricing competitiveness - Management acknowledged feedback regarding pricing but emphasized their value proposition based on total cost of deployment and ownership [39][40] Question: Future MSAs and customer engagement - Management is actively discussing MSAs with EPC and developer customers and expects to announce more agreements in the near term [41][42] Question: Outlook on international markets - Management is optimistic about international growth, particularly in Australia and Europe, and believes they have the products to compete effectively [64][65] Question: EV charging market performance - Management reported excitement about the EV market, noting that their products are resonating well with customers [67][70] Question: Impact of supply chain issues on projects - Management stated they have not seen delays in projects due to supply chain issues, including the Uyghur Forced Labor Prevention Act [121][122]