Good afternoon, and welcome to Shoals Technologies Group First Quarter 2022 Earnings Conference Call. Today's call is being recorded, and we have allocated one hour for prepared remarks and Q&A. At this time, I would like to turn the conference over to Mehgan Peetz, General Counsel for Shoals Technologies Group. Thank you. You may begin. Thank you, Operator. And thank you everyone for joining us today. Hosting the call with me are CEO Jason Whitaker and Interim CFO Kevin Hubbard. On this call, management will be making projections or other forward-looking statements based on current expectations and assumptions, which are subject to risks and uncertainties. As you listen and consider these comments, you should understand that these statements, including the guidance regarding full year 2022, are not guarantees of performance or results. Actual results could differ materially from our forward-looking statements if any of our assumptions are incorrect or because of other factors. These factors include, among other things, the risk factors described in our filings with the Securities and Exchange Commission, as well as economic and market circumstances, industry conditions, company performance and financial results, the COVID-19 pandemic, supply chain disruptions, availability and price of our components and materials, project cancellations, decreased demand for our products, and policy and regulatory changes. Although we may indicate and believe that the assumptions underlying the forward-looking statements are reasonable, any of the assumptions could prove inaccurate or incorrect, and therefore, there can be no assurance that the results contemplated in the forward-looking statements will be realized. We caution that any forward-looking statement included in this discussion is made as of the date of this discussion and do not undertake any duty to update any forward-looking statements. Today's presentation also includes references to non-GAAP financial measures. You should refer to the information contained in the company's first quarter press release for definitional information and reconciliations of historical non-GAAP measures to the comparable financial measures. With that, let me turn the call over to Jason. Thank you very much Mehgan, and good afternoon everyone. I'd like to start off by thanking Philip Garton, who stepped down earlier this month to pursue an opportunity with a private company. We appreciate all of Phil's hard work and his contribution to Shoals, especially in our first year as a public company. We wish Phil all the best in his future endeavors. We're very pleased to have Kevin Hubbard on board as our interim CFO while we search for Phil's successor. Prior to joining us, Kevin was a partner at Ham, Langston & Brezina, L.L.P. since 2017, and previously worked for Shoals on financial reporting. He has served in finance and accounting roles with other public companies, including as interim CFO at SAExploration Holdings, Incorporated. I'll start off by providing a snapshot of our Q1 performance and progress on our key growth initiatives. I'll talk about current conditions in the solar market and how they impact our outlook. After that, turn it over to Kevin, who'll provide an overview of our financial results for the first quarter. Our results for the first quarter were in line with the outlook we provided earlier this year, despite an increasingly challenging environment for solar. Revenues and gross profits were 49% and 40% versus the prior year's quarter, respectively, and represented new records for the company. More importantly, our gross margins increased more than 550 basis points sequentially to 38.7%, underscoring that the lower margins we experienced in the fourth quarter were a temporary phenomenon. Adjusted EBITDA grew at a slower rate than our revenues and gross profit as a result of our continued investment in SG&A to support our growth initiatives. We're investing heavily in people to expand our new product development capabilities, grow our international sales presence, scale up our EV business, and support our new 219,000 sq ft manufacturing facility, which became operational a little over a month ago. Components revenue increased 73% year-over-year, driven by a combination of battery storage shipments, as well as the onboarding of a significant number of new customers who started with component purchases before transitioning to system solutions. System solutions grew 40% year-over-year as a result of continued strong demand for BLA, as well as market share gains. The number of EPCs and developers using our system grew by seven to 25 total, which compares to just four at the time of our IPO last year. We're currently in the process of transitioning an additional 15 customers to our system. Not only are we converting customers to our system solutions at an accelerating rate, our average project size is also increasing. The seven customers we converted in Q1 represent as much as 2 GW of demand to be delivered this year. The new products that we introduced in late 2021 also contributed to our growth in the quarter. Our wire management solution continues to be very well received by customers, and we now have orders for that product to be used on over 745 MW of solar projects. Sales of our energy storage products also contributed to revenue growth in the quarter, and backlog in that part of our business continues to grow. Looking ahead, the certification process is underway for BLA 2.0 and high-capacity plug-and-play harnesses, and we continue to expect first shipments of those products to begin in the second half of this year. The former will have a higher average selling price per megawatt than our current product, and the latter will allow us to serve a new and fast-growing application. We're also making strides in our international expansion. During the quarter, we received BLA orders from three new international customers, demonstrating our ability to convert customers outside of the U.S. to BLA. Our European sales team is building backlog in the region now that our products are fully qualified in the EU. Outside of the EU, our recently appointed head of LatAm is starting to meet with customers in the region and build awareness for our products. We believe the sales opportunity in that region could be significant. Turning to our EV business, we're beginning to ramp up production following our successful product launch in Q4 2021. We generated revenue from EV charging products in Q1, and our backlog and award orders in this area are growing rapidly. The ease of installation and portability of our solution is attracting customers to our EV charging products who are pursuing school bus electrification projects. We see a big near-term opportunity in this area after the announcement of the EPA's $5 billion Clean School Bus Program earlier this month, which is expected to significantly accelerate school bus electrification in the U.S. We're also seeing good traction for our recently announced strategic partnerships with Ernst & Young and Brookfield Renewable, which are already resulting in sales opportunities. We're pursuing additional partnerships to expand our reach in the market, and we expect to announce new relationships in the near term. Now I'll take a moment to talk about current conditions in the solar market. The U.S. Department of Commerce's investigation of an AD/CVD claim on solar cells and panels supplied from certain Southeast Asian countries has caused some customers to pause their projects as they await the outcome. We speak with our customers regularly about their projects, and in most cases, we know who they are getting their modules from because that is an input to the eBOS design. We have determined that the vast majority of our backlog is not at risk. The customers either did not procure their panels from any of the countries in question, or they are already in possession of their panels and have decided to move forward with their projects regardless of the outcome of the investigation. As a result of that analysis, we feel confident in our revenue outlook. Importantly, however, we expect many new projects will be delayed until the investigation is resolved, which could impact our backlog growth in future quarters. We believe our current book of business is more than sufficient to meet our plan until the tariff situation is resolved. To wrap up, we did a lot of work last year to set ourselves up for continued growth in 2022 despite a challenging environment. That work is reflected in our first quarter results, as well as our backlog and awarded orders, which were up 67% year-over-year. I'll now turn it over to Kevin, who will discuss our first quarter 2022 financial results. Kevin. Thank you, Jason. I'm very excited to be here today and to be helping the Shoals team during this transition while they search for a permanent CFO. For the first quarter, revenue grew 49% versus the prior period to $68 million, driven by increases of 40% in system solutions and 73% in components. As Jason mentioned, the strength in components revenue was driven by the combination of battery storage shipments as well as the onboarding of a significant number of new customers, which can initially lead to more of a component-level opportunity as we work towards converting them over to our system solutions. Growth in system solutions reflects strong demand for Shoals's Combine- As- You- Go system. System solutions represented 69% of revenue in the quarter versus 73% in the prior period. Gross profit increased 40% to $26.3 million, compared to $18.8 million in the prior year period. Gross profit as a percentage of revenues was 38.7% compared to 41.2% in the prior year period, due to a higher mix of component sales in the quarter, which carry lower margins than system solutions, as well as higher raw material and logistics costs. First quarter general and administrative expenses were $13.9 million, compared to $6.8 million during the same period in the prior year. This change was primarily a result of higher stock-based compensation, planned increased payroll due to higher headcount to support our growth in product initiatives, and new public company cost. Adjusted EBITDA for the first quarter increased 17% to $16.5 million, compared to $14.1 million for the prior year period. Adjusted net income was $9 million in the first quarter, compared to $8.8 million in the prior year period. Please see the adjusted EBITDA and adjusted net income reconciliation tables in our first quarter press release for a bridge to our GAAP results. As of March 31, 2022, we had record backlog and awarded orders of $302.3 million, an increase of 67% year-over-year. The increase in backlog and awarded orders reflects continued robust customer demand for Shoals's products. Turning to our full year outlook. Based on current market conditions and input from our customers and team, we are reaffirming the low end of our revenue outlook despite industry challenges, and expect 2022 revenues to be in the range of $300 million-$325 million, up 41%-52% year-over-year. We expect adjusted EBITDA to be in the range of $77 million-$86 million, and adjusted net income to be in the range of $45 million-$53 million. Further, we expect 2022 capital expenditures to be in the range of $7 million-$8 million. The change in our adjusted net income outlook from what we previously provided is larger than the change in our adjusted EBITDA outlook. This is a result of our updated expectations regarding our book tax rate, as well as interest expense for the remainder of 2022 to support our growth and working capital requirements. As discussed last quarter, we pulled forward several investments, including the addition of our new facility and significant increase to engineering, sales, and HR headcount to support our multi-year growth outlook and growth initiatives over the next several years. While we saw a modest sequential increase in adjusted EBITDA margin in the first quarter, we are confident this is the substantial growth we are experiencing will support expansion in our adjusted EBITDA margin as we get leverage on SG&A exiting this year. Before I turn it back over to Jason, I want to briefly mention that earlier this month, we increased our existing credit facility by $50 million to $150 million. While we have not drawn on the added liquidity, the larger revolver gives us the flexibility to invest in working capital as our business continues to grow rapidly. Now back to Jason for closing remarks. Thanks, Kevin. I'd like to close by thanking all of our customers for their commitment to Shoals, our employees for their contributions to our company success, and our shareholders for their continued support. We are off to a strong start in 2022. Despite challenging macro conditions, we're delivering good results for our shareholders and making steady progress on our growth initiatives. With that, thank you, everyone. I appreciate your time today. We'll now open the line for questions. Thank you. We will now begin the question-and-answer session. To join the question queue, you may press Star, then one on your telephone keypad. You will hear a tone acknowledging your request. If you are using a speaker phone, please pick up your handset before pressing any keys. To withdraw your question, please press Star then two. We will pause for a moment as callers join the queue. The first question comes from Philip Shen with Roth Capital Partners. Please go ahead. Hey, guys. Thanks for taking my questions. Looks like you booked $71 million in Q1 versus $76 million in Q4 and $130 million of bookings in Q3. Can you ballpark how much of the $71 million was for the EV business versus solar? And can you quantify in some way what your significant growth was in the EV order book? Thanks. Hey, Phil. Jason here. Pleasure to speak with you again. You know, as of this point in time, Phil, we're not breaking out exact specifics from a revenue perspective, you know, as it correlates to a revenue opportunity perspective as it correlates to our backlog and award orders in the EV space. You know, very excited about the EV opportunity, you know, especially considering the fact that we just recently launched that. Again, no further details on that at the moment. Okay. Thanks, Jason. As it relates to 2023, I know you don't have official guidance and great job on maintaining the vast majority of your outlook for this year. You highlighted that, you know, the modules either are not impacted by the anti-circumvention case or have been secured. When you think about 2023, I can imagine you have good exposure for solar, and so that gives you some security. When you look at the bookings and the potential for 2023, can you talk about what risk there might be for a flattish year for 2023 in terms of revenue growth or, you know, what the impacts might be from project managers, you know, slowing down their activity given the anti-circumvention stalemate? Thanks. Yeah, no problem, Phil. I think first things first, just to kind of give a little bit of idea of, you know, how we came to the 2022 outlook that we just provided today. You know, essentially, we took a bottoms-up approach on a per project basis, you know, to go through the entire backlog and award orders to assess many different things, including things like, you know, panel manufacturer origin. As you mentioned, you know, obviously, whether customers had those panels in possession. Once that analysis was complete, what we did is we actually applied, you know, an incremental rigor to that information to make sure that we had, you know, some coverage for additional macro uncertainty. You know, the result of that is ultimately what led us to what we just discussed, which is, you know, slightly bringing down our high end of outlook, but being very comfortable with the low end, which is why we reiterated that today. You know, as far as specifics from a 2023 perspective, Phil, you know, we're not guiding out to 2023, and it's really hard to say. Okay. All right. I appreciate that, Jason. Thank you. One last, quick one. Is there any way you can quantify how much revenue from storage you had in Q1? You know, maybe even if it's like a high single digit type qualification, just for modeling purposes might be useful. Thanks. Understood. You know, appreciate that, Phil. You know, what I can say is that, you know, revenue opportunities continue to grow, as well as, you know, our backlog and award orders. You know, at this point, we're not breaking down any specifics for new products, including our storage side, Phil. The next question comes from Brian Lee with Goldman Sachs. Please go ahead. Hey, guys. Good afternoon. Thanks for taking the questions. I know it's a challenging backdrop, so kudos on the execution. Maybe just to follow up on Phil's question, I know you can't give us any, you know, views on 2023 necessarily, but Jason, you know, you did comment that, you know, backlog and awarded order trends may be a bit challenged in the near to medium term given project push out. I had two questions. One is, you know, this is the first time in a while we've seen sort of a flattish sequential trajectory. Should we kind of be bracing for a flattish to down trajectory in, you know, backlog and awarded orders over the next couple quarters just based on what you're hearing and seeing from customer activity and, you know, actions? Secondly, has there been anything beyond just project timing push outs? Have you seen anything actually fall out of the backlog, that, you know, maybe you hope to recapture, but as of right now, you're taking it out or you kind of consider to be a cancel? Yeah, no. Hey, Brian, a pleasure to speak with you. You know, a couple things I want to point out. You know, as we talked about in our prepared remarks, I'm absolutely excited about, you know, the record revenues we're able to stand up for this quarter, that we had. One other thing I want to point out as well is that, you know, our quoting activity in Q1 was 160% or up 162% year-over-year. A lot of different demand, a lot of exciting opportunity out there. Then, you know, even despite, you know, standing up record revenue for Q1, we were still able to grow our backlog, which we do continue to trend over time. You know, one thing that we did want to say is until AD/CVD is resolved, there is a possibility that we may see slower growth in backlog and award orders in the future. That's but a moment in time. It's hard to say right now. I think that if something like that does transpire, you know, once the industry moves past, you know, AD/CVD, I would expect that any of that, you know, pent-up demand would ultimately come back to benefit the industry. The other thing that you asked was, have we seen any particular projects cancel? We've not seen any particular projects cancel, Brian, when you look at the opportunities that we have in our backlog and award orders. Okay. That's great to hear. And then just a second question from me on margins, and I'll pass it on. You know, the 38%+ gross margin this quarter, you know, quite impressive, given all the supply chain issues as well as, you know, it sounds like mix wasn't ideal. You know, high 30%, I think we had anticipated based on the color you gave on margin trajectory last quarter that maybe, you know, that's where you'd be later this year. You know, given the mix and given what you're seeing in terms of supply chain, do you think we're, you know, headed back to, like, a 40% gross margin here in the next quarter? Are you gonna kind of hold serve at this, you know, 38% ± level for a few more quarters before we see any meaningful expansion on the gross margin line? Yeah. I think, you know, a couple of things. Number one, as I said before, you know, we expect that our gross margins will be somewhere in that 38%-40% range, you know, as we go throughout the year. I mean, obviously, you know, there could be blips along the way that are related to mix, you know, that we've seen in any particular quarter. Again, 38%-40% is where we expect to remain throughout this year. The next question comes from Maheep Mandloi with Credit Suisse. Please go ahead. Hey, good evening, and thanks for taking the questions. Just a question on the working capital here. Saw some usage in the quarter. Can you just talk about how should we think about working capital needs in Q2 and the second half, and will that require drawing down that revolver upsized this quarter? Thanks. Hey, Maheep. Pleasure to speak with you again. You know, Kevin, do you want to take that question? Sure. Thanks, Jason. I think when we look at our working capital requirements, just going through the next two quarters, we see ourself as a, you know, a use of working capital really going through Q2 and early in Q3. As we start to execute Q3 and into Q4, we start to see those working capital needs come down. As we look out, there may be a short draw in the end of Q2, early Q3, but certainly coming out of that in Q4. Thanks. Could you just like elaborate on that? Is that just in terms of accounts receivables as you ship these asset projects or just on inventory or something else on that? Yeah. It really is specifically related to the growth and some of the initiatives we've got going on. As we ramp up some AR in Q2, it starts to bleed back out in Q3, so. Got it. Just one last one from me on visibility. You kind of talked about some of the backlog visibility for later this year, but could you talk about how much visibility do you have today on 2023? I just want to understand, like, if the ADCVD is not announced, say, till March 2023, does that put some of that visibility into question or rather, say, at risk? Or do you have visibility into late 2023 as well? Thanks. Yeah, I think, you know, Maheep, going back and looking at visibility, you know, one of the things that we do, you know, we work intimately with our customers out there. From a backlog and award orders perspective, you know, that generally covers, you know, over the next nine months. Based upon where we are, you know, sitting now today in 2022, you know, it's hard to say exactly what 2023 will look like, you know, especially considering, you know, the fact that AD/CVD, you know, is a headwind that we're dealing with right now. The next question comes from Mark Strouse with JP Morgan. Please go ahead. Yep, good afternoon. Thank you very much for taking our questions. Given you were certified to begin selling in Europe back in February, I believe, and then the build-outs that you're making in your sales team in LatAm, just curious your comments about the backlog potentially coming down or at least slowing in the U.S. Do you think those international markets are enough to potentially offset that U.S kind of hiatus near term? When you look at the opportunity, you know, that we have in front of us, you know, one of the things that we had mentioned is that, you know, we actually stood up seven new customers from a conversion perspective with our BLA. You know, those seven customers had a combined opportunity of about 2 GW over calendar year 2022. With those seven customers, Mark, three of those specifically were outside of the U.S., which is very exciting. Just to recap, you know, our sales team is in place. As we talked about, you know, our product's fully qualified. One other thing I think is important to mention is that we just recently hired a new head of LatAm, which is something we've been talking about for a while, and very excited about the opportunities ahead, you know, due to that, bringing on that new team member. As we gain, you know, further traction on expanding, you know, our international business and our other growth initiatives, you know, including e-mobility, you know, we do expect our business to become more diversified over time. Got it. Okay. I'll take the rest offline. Thank you. Thanks, Mark. The next question comes from Colin Rusch with Oppenheimer & Co. Please go ahead. Thank you so much. Thanks so much, guys. Can you talk a little bit about the geographic diversity in the mix on the quotation activity? Just trying to get a sense of, you know, how broad the growth is going to be from a geographic perspective. Yeah. We haven't released on anything specific, Colin, as far as, you know, geographic location as it correlates to quotes at the moment. With the EV build-out in the U.S. and infrastructure, the infrastructure bill spending and, you know, that cash starting to flow likely in September, October this year, can you talk a little bit about some of the timelines that you're looking at with your EV infrastructure customers and what they're telling you right now in terms of expectation around inflection points for growth in that part of the business? Yeah. You know, when you look at the funding that is being, you know, infused into the EV side of things, you know, one of the things that's really a topic of conversation among many other exciting areas in the e-mobility is the $2.5 billion of funding that's dedicated specifically to school bus charging. I think it's roughly about $500 million a year. You know, we're seeing a lot of opportunity, a lot of conversations around that. It's a very exciting program because essentially it allows for grants and rebates up to 100% of the cost of replacement buses, you know, in certain areas. I think one of the very exciting things, you know, as you mentioned is that based upon that funding, you know, the expectation is that to start to play a fairly significant role in the incremental opportunity in that area as we go towards the latter part of the year. One thing that has been very well received is our solution specifically for many different reasons because of the significant reduction in labor and time on site, but also the permanent but portable aspect that we bring because it's a perfect fit because many of these school bus opportunities are lots or are on leased property. The next question comes from Donovan Schafer with Northland Capital Markets. Please go ahead. Hi, guys. Yeah, I want to follow up on the school bus stuff. I was at the ACT Expo earlier, I guess it was last week, and yeah, school buses were everywhere. I think there were five or six full-size school buses, you know, inside the physical conference space. So, you know, clearly a huge amount of interest there. I'm curious, you know, you just sort of touched on some of the benefits for a school fleet. Obviously, like you said, the flexibility of having some things that are skid mounted so you can rearrange the charging. You know, there's also, we talk about solar developers being a very risk-averse audience. I could see on the one hand, you know, school boards or whoever's making these purchase decisions being, you know, wanting to go with a company that has, you know, the under mold, over mold, you know, very highly tested product from a safety standpoint. Though at the same time, I also know, you know, historically from some checks, there are times when labor unions, if these were to have to go to labor contract, union labor contractors, for instance, that sometimes they prefer just sort of doing things the old-fashioned way that frankly doesn't make a lot of sense. I'm curious if things kind of net out one direction or another from, you know, the risk aversion, the safetiness you think of with the schools as a unique customer versus, you know, maybe some of the union things. Just any unique attributes or considerations there? Yeah. Hey, Donovan. Good to speak with you again. Glad to see you're out at ACT Expo. Sorry I missed you out there. I hear it was a very exciting show. No, those are all great questions. I think, you know, the reality is that, you know, at our core, you know, we really focus on, you know, quality, reliability, and safety. Being able to create that end-to-end solution in that plug-and-play fashion in our particular environment and ship that out in order to significantly reduce the amount of time on site, I think is seen as real value, you know, in this particular market, regardless of the labor type, you know, that you're consuming in that geographic location. I'm very excited about that, you know, about that opportunity. Again, you know, you look at the flexibility that we're able to bring in to these different areas. I think really gives us a leg up in that space. Okay. That's great. Thank you. I also wanna ask a question just about the international business. With the three international EPCs, you know, that you sort of converted, I just wanna confirm that, if in these cases, that means, you know, a committed sale for some kind of a solution, you know, in specific other countries. You know, they have a particular project, some 100 MW or whatever it is, you know, in you know Brazil or in you know another country, and that's all sort of been signed and agreed upon. Just kind of confirming that. The other thing would be, I'm sure you don't want to give, you know, specific EPCs, specific customer names, and may not want to give specific country names in case that gives anyone away, but I am curious if you could speak to sort of, you know, are there common attributes among the countries or, you know, are these, do these tend to be, you know, more high-wage, labor markets, or do they have similarities in terms of, maybe high, standards and requirements for electricians to do wiring, and so, you know, having that in place means that there's a huge gain to be had by being able to get around some of those requirements? Just are there patterns and commonalities among these geographies? Yeah. You know, I think touching base on the first question that you asked, Donovan, and I think this is where you were going. I mean, essentially the three opportunities that we talked about were customers in the international market, and we are serving an international project. They weren't specifically customers in the international market that were serving a project in North America. They were for an international customer in an international market, which is very exciting. You know, also, you know, when you look at, you know, the case, you know, the use case in the international market, you know, obviously, you know, the higher the labor, the higher the value proposition. The reality is, even outside of that, there's a lot of opportunities. We're seeing places, you know, that have very low or relatively low labor rates, that we're seeing success with as well. There's more than just the labor aspect when you look at the quality and the reliability of our product offering that's out there. The next question comes from Kashy Harrison with Piper Sandler. Please go ahead. Hi. Good afternoon, and thank you for taking the questions. So first one from me, Jason, you mentioned in your prepared remarks and I think in the press release that BLA 2.0 Is still on track to be released by the end of this year. Can you give us more specifics around the timing? Is that a Q3, Q4, or Q4? And then, how long do you think it's gonna take to fully transition your customer base towards BLA 2.0? Hey, Kashy. Yeah. First and foremost, when you look at, you know, our BLA 2.0, we are on track for that to be released out towards the second half of the year. You know, the expectation right now is that it would be towards the latter part of the second half of the year. As we've talked about in the past, you know, when you look at the value proposition that we're bringing by you're bringing additional value when you deploy that particular product, you know, the I would assume that it would actually deploy relatively quickly over the top of our current generation BLA, especially with customers that have already understand the BLA and how that BLA deploys. You know, just giving them additional value over the top of that, you know, is really a no-brainer. Got it. That was helpful. Maybe just a follow-up question on international. I know you're not breaking up your backlog, but can you just help us with 2022 revenues, the split between U.S. and rest of the world? Any thoughts on how much of that might be international versus domestic? When you look at the areas that we are, as we've talked about in the past, you know, we have presence in Australia. You know, we recently, just a couple of months ago, you know, finalized our certification to be able to support Europe and the like, and then just added our new team member to be able to support LatAm. Obviously that's growing. You know, we see a lot of opportunity now, but you know, as we play out calendar year 2022, you know, a meaningful portion of that revenue is still gonna come in the form of our North American opportunity. Ladies and gentlemen, this concludes the question and answer session and today's conference call. You may disconnect your lines. Thank you for participating, and have a pleasant day.