Good afternoon and welcome to the Shoals Technologies Group fourth quarter 2023 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, Chief Legal Officer 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 Brandon Moss and CFO Dominic Bardos. 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 first quarter and full year 2024, 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, including economic, market, and industry conditions, defects or performance problems in our products or their parts, including those related to the wire insulation shrinkback matter, failure to accurately estimate the potential losses related to such matter, and failure to recover those losses from the manufacturer, decreased demand for our products, policy and regulatory changes, supply chain disruptions, and availability and price of our components and materials. 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 we 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 fourth quarter Press Release for definitional information and reconciliations of historical non-GAAP measures to the comparable GAAP financial measures. With that, let me turn the call over to Shoals' CEO, Brandon Moss. Thank you very much, Mehgan, and good afternoon, everyone. I'll start today's call with some key highlights from the full year 2023 and the fourth quarter. I will follow with an overview of solar market conditions and then discuss our plan to expand and relocate operations to a new facility in Portland, Tennessee. I will then provide an update on the wire insulation shrinkback warranty investigation and remediation, and finally wrap up with a discussion of our strategic priorities before turning it over to Dominic, who will review our financial results and discuss our outlook for 2024. 2023 was another year of tremendous execution for Shoals, with revenue growing approximately 50% for the second consecutive year. In fact, Shoals has grown revenue at 41% CAGR since 2020, significantly outpacing the industry's growth of 17% over the same period. Our ability to drive operational leverage as we grew revenue contributed to full-year adjusted gross profit increasing 75% compared to the prior year. Adjusted EBITDA was up 86% year- over-y ear, while full-year adjusted gross margin and adjusted EBITDA margin both expanded almost 700 basis points compared to the prior year. Notably, with full-year 2023 adjusted EBITDA of $173.4 million, we achieved the high end of our outlook for 2023 adjusted EBITDA, which was raised when we reported third quarter earnings. As Dominic will discuss in greater detail, cash flow from operations was $92 million, up 133% from 2022. We are pleased that Shoals has transitioned into a company with strong cash flow generation. Turning to fourth quarter highlights, Shoals had another strong quarter, with revenue growing 38% year- over- year to $130.4 million. Backlog and awarded orders were $631.3 million, up 47% year-over-year and approximately flat sequentially, reflecting continued strong demand for our products. The company added over $128 million in orders in the quarter, which was an increase of 147% year-over-year. Further, our quote volumes remained very strong, growing 154% year-over-year. In addition, the number of quotes is also growing, while the size of the jobs continues to rise. Subsequent to quarter end, we bolstered our domestic leadership position after entering into a master supply agreement with a new top solar EPC, and international markets continue to develop as a growth driver, representing more than 13% of our backlog and awarded orders. Moving now to the solar market landscape. The long-term fundamentals for solar are incredibly strong. Demand for energy is steadily rising according to the EIA. Analysts expect U.S. demand for electric power to continue growing through 2050, driven by sustained economic growth and the shift toward electrification. Solar offers the lowest levelized cost of energy because it requires zero fuel costs. We expect the price of solar will continue decreasing due to reduced cost of solar panels, battery storage, and additional scale. We believe this trend will drive solar market growth in the coming decades. In fact, U.S. solar generation capacity is expected to double by 2030 and nearly double again by 2050. In addition, according to the EIA's short-term energy outlook published in January, solar is expected to be the leading source of new electricity generation over the next two years, with 36 gigawatts of new solar capacity across all solar segments coming online in 2024 and an additional 43 gigawatts in 2025. This incremental capacity is expected to boost the solar share of total generation to 6% in 2024 and 7% in 2025, up from the 4% in 2023. Shoals is excited to be a leader in the energy transition space with our market-leading solutions in electrical balance of systems. While the long-term solar market outlook is very strong, in our core utility-scale segment, project delays have contributed to slowdowns reported by our utility-scale peers in Q2 and Q3 of last year. Higher financing costs, extended equipment lead times, particularly for transformers and switchgear, and long interconnection queues are all exacerbating industry weakness. The industry slowdown is significant and will impact our results in the first half of 2024, but we expect this trend to reverse over time. When you look at the EIA data on project delays, there's been a significant increase over the course of the last two years, with delayed projects increasing from 36% in the first quarter of 2022 to 62% in the fourth quarter of 2023. As Dominic will discuss, we're providing first-quarter guidance to assist analysts with modeling. While short-term hurdles exist, we remain confident in the long-term fundamentals. The undeniable ongoing shift toward renewables, driven by cost competitiveness and sustainability goals, creates a significant growth opportunity for the industry. We believe we're well-positioned to capitalize on this trend through our focus on utility-scale projects and proactive approach to mitigating near-term challenges. Further, as we discussed on our last call, we see a compelling opportunity in the community-scale, commercial, and industrial segment. Though these projects are smaller than utility-scale, they share many of the same challenges, including high labor costs for deployment and supply chain challenges that our technology was developed to address. We believe our value proposition will remain attractive even in the context of smaller projects. To that end, we're excited about the Department of Energy's recent pledge to meet the National Community Solar Partnership target of 20 GW of community solar by 2025, which is almost triple today's 7 GW. Though it's still early days, we think this could provide an exciting opportunity to offset the delays and push-outs in utility-scale with projects that have a faster turnaround. We are currently building out focused teams to take advantage of this opportunity. Moving to international, the landscape is evolving. Following COP 28, there's been a fresh push for renewables as nations have realized they are not on target to meet emissions goals. This has resulted in some nations tripling their commitments by 2030. While the outlook for global growth in 2024 is more muted, primarily due to China's expected slowdown and a stabilizing European market post-energy crisis, we see bright spots. Specifically, Middle East and Africa are showcasing significant growth potential. We're actively exploring opportunities in these emerging markets, confident that our expertise translates well to new geographies. As we have discussed, international markets have the potential to be a major growth driver. In fact, as of year end, international represented more than 13% of our backlog and awarded orders. We remain largely focused on specific higher-growth markets within Europe, Africa, Latin America, and Australia, which combined are more than double the size of the U.S. market and growing at a 9% CAGR through 2026. We are pleased to report our sales team is making significant progress recently securing projects in Angola, Colombia, Nigeria, Peru, and Serbia. We expect growth to accelerate as international EPCs begin to appreciate the value proposition of our entire product suite. Looking ahead, we will continue strategically growing our international team and investing to support growth and further customer traction. Turning now to our recent announcement to invest in a new facility in Portland, Tennessee. Over the next five years, Shoals is committed to invest a total of $80 million to expand and centralize our existing manufacturing and distribution operations into a new 638,000 sq ft state-of-the-art facility near our existing facilities. Since the beginning of last year, we have been focused on increasing production capacity and enhancing operational efficiencies to meet the growing demand for our products. We believe that the new plant will allow us to achieve these objectives and marks a critical milestone in our journey. We are confident that it will pave the way for the company's continued long-term growth. We are also thrilled to be investing in our workforce, becoming the employer of choice in the region, and further contributing to the thriving economic landscape of Tennessee. We are grateful for the support of Governor Lee and the Tennessee Department of Economic and Community Development and look forward to a strong partnership in the years ahead. It's important to note that while this is our most significant capital investment, once complete, we expect the new plant will ultimately drive operational efficiencies. In addition, we are committed to keeping Shoals asset-light. I will now provide an update on where we stand with our investigation and remediation of the wire insulation shrinkback warranty issue. As disclosed in our third quarter earnings call, we filed a complaint to recover damages caused by defective wire that Prysmian Cables and Systems USA, LLC sold to Shoals between 2020 and approximately 2022. Through December 31st, 2023, Shoals had already expended $4.7 million of cash in the identification, repair, and replacement of defective wire and is seeking full recovery from Prysmian for those as well as future expenses related to the issue. Because of the pending litigation, we are limited to what we can discuss publicly. However, there are some important updates we can provide. First, initial wire insulation shrinkback issues were found on at least 20 sites of the approximately 300 sites that have had the defective Prysmian red wire. In addition, after we filed our complaint and customer service notices were issued to those approximately 300 sites, we were informed that approximately 10 incremental sites experienced shrinkback. Second, of those approximately 30 sites, four sites did not display insulation shrinkback upon inspection. In situations where there was shrinkback, we are working to remediate the issue as quickly as possible. Finally, as we continue to analyze all of the incoming information and remediation projections, we have determined that the range of expense we communicated last quarter is still appropriate. Dominic will cover in further detail. Shoals is committed to quality. As we work to remedy the Prysmian defective wire issue, our top priority is taking care of our customers. We are working to remedy the issue as efficiently as possible and seek to accelerate remediation where we can. As highlighted by our new top EPC engagement, we want to emphasize that our underlying business remains very strong, and we expect it to continue to flourish through the resolution of this issue. Moving to the patent infringement complaints filed by Shoals with the ITC in May of 2023, the evidentiary hearing is scheduled in March, with a final ruling expected in November. Our district court cases would resume after that time. As previously stated, we remain committed to vigorously defending and protecting our intellectual property rights. I'll now wrap up by highlighting our strategic priorities for 2024. We will continue to pursue markets that support global electrification and are impacted by skilled labor needs and supply chain constraints. Our core competency of engineering prefabricated plug-and-play solutions at scale align well with market needs. By delivering these high-value prefabricated solutions, we can protect our margins while providing a much higher quality product. Shoals will continue to protect and grow our core utility-scale solar business. This includes growing share within our domestic solar base and accelerating growth in international markets. We also expect to accelerate our diversification into new markets that support electrification. This includes leveraging our very strong balance sheet and cash flows by investing for both organic and inorganic growth. In fact, despite accelerating remediation efforts for the defective Prysmian wire, for which we plan to spend $31.1 million in 2024, we still expect to increase our cash from operations by 20%. As we make these investments, we will continue to drive operational excellence and build our organizational capacity to maintain our leadership position in domestic utility-scale solar and grow to a leadership position in newer market segments. Growth in new markets will require some reinvestment of profits from our core business, which we will do prudently as we strive to generate an attractive return on our investments for our shareholders. Shoals is an innovation leader with strong product development capability. While the industry is going through a period of transition, our long-term future is bright with record-quoting activity and strong orders. As market conditions improve, we expect Shoals will continue to take share and outgrow the market for many years to come. I'll now turn it over to Dominic, who will discuss fourth quarter 2023 financial results. Thanks, Brandon, and good afternoon to everyone on the call. Turning to our results, fourth quarter net revenue grew 38% to $130.4 million versus the same period in 2022. Our higher sales were driven by increased demand for our products in domestic Utility-Scale Solar projects. Gross profit increased to $55.4 million compared to $40.4 million in the prior year period. Gross profit, as a percentage of net revenue, was 42.5% compared to 42.7% in the prior year period, primarily due to higher labor costs. The increase in labor was slightly offset by increased leverage on fixed costs. During the quarter, we did not incur wire insulation shrinkback warranty liability expenses and our cost of goods sold, so there was no adjustment to GAAP gross profit necessary during the period. I would like to point out that we have added a quarterly reconciliation of 2023 Adjusted EBITDA to the appendix of our investor presentation. This reconciliation of Adjusted EBITDA illustrates the quarterly impact of the shrinkback expenses. As you may recall, we disclosed the Q3 and full year-to-date impact through Q3 last quarter, but we did not individually break out the elements incurred in the first and second quarters of 2023. I hope you find this additional information helpful. Further, as Brandon mentioned earlier, we continue to analyze all new information regarding the potential loss related to the defective Prysmian wire. While we investigated approximately 10 additional sites during the quarter, findings were consistent with assumptions incorporated in the remediation range we communicated last quarter, which is $59.7 million at the low end and $184.9 million at the high end. During the quarter, you will see that we incurred an additional $0.7 million of litigation expenses associated with this issue in the SG&A section of our income statement. That is why our Adjusted EBITDA reconciliation indicates $0.7 million associated with the insulation shrinkback issue in the fourth quarter. Also, during the quarter, we did expend $1.7 million in cash as we ramped up remediation efforts. You will see that the remaining warranty liability on our balance sheet is now $54.9 million. We believe we are positioned to move faster on remediation efforts in 2024, so we have reflected a current portion of the remaining liability at $31.1 million. This represents the amount of cash we estimate we will consume during the next four quarters to continue remediation efforts. Shifting to selling, general, and administrative expenses for the fourth quarter, we incurred $21.5 million of SG&A expense compared to $14.9 million during the same period in the prior year. The year-over-year increase in general and administrative expenses was primarily related to higher non-cash stock-based compensation, legal fees related to the patent infringement and wire insulation shrinkback complaints, and planned increases in payroll expense due to higher headcount supporting growth. As I mentioned earlier, $0.7 million of this expense was specifically related to the wire insulation shrinkback litigation. Net income was $16.6 million in the fourth quarter compared to $118.3 million during the same period in the prior year. The prior year period benefited from a $110.9 million gain on the termination of the tax receivable agreement. On a related note, we completed the simplification of our legal structure in Q4, transitioning from the prior Up-C structure to a traditional C Corp. Adjusted EBITDA in the fourth quarter increased 30% to $39.1 million compared to $30.1 million in the prior year period. Adjusted EBITDA margin was 30% compared to 31.8% a year ago, reflecting lower gross margin partially offset by operating expense leverage. I want to take a moment to clarify that when we raised our outlook for 2023 Adjusted EBITDA to $165 million-$175 million during the third quarter earnings, we did so on the basis that year-to-date Adjusted EBITDA was $134.3 million, implying a range for fourth quarter Adjusted EBITDA of $30.7 million-$40.7 million. Said another way, fourth quarter Adjusted EBITDA of $39.1 million came in at the high end of the implied fourth quarter range of $30.7 million-$40.7 million. I hope this and the additional detail in the investor deck materials assist you in tying out the numbers. Adjusted net income was $21.3 million in the fourth quarter compared to $25.0 million in the prior year period. Cash flow remained strong in the fourth quarter, with $26.4 million of cash flow from operations offset by $2.9 million of investment in capital expenditures. For the full year, cash flow from operations grew 133% to $92.0 million. After capital expenditures of $10.6 million, we used the majority of the remaining cash to pay down our revolver and term loan facilities. We are pleased to have continued our trend of improving our leverage ratio again during the period. As of December 31st, 2023, we had $631.3 million in backlog and awarded orders, an increase of 47% year-over-year as the company added over $128 million in orders during the period. It's important to note that some international orders have longer lead times than domestic orders, and we are also winning domestic jobs that extend beyond our historical revenue cycle of nine to 13 months to realize revenue from awarded orders. Approximately $175 million of our backlog and awarded orders at year-end have delivery dates beyond 2024. Turning now to the outlook. Given the current headwinds in the utility-scale solar market, some of our customers have experienced project delays. As a result of the current slowdown, we are providing an outlook for the first quarter to help set expectations, but note that it is not our intention to provide quarterly guidance on an ongoing basis. Based on current business conditions, business trends, and other factors, for the quarter ending March 31st, 2024, the company expects revenue to be in the range of $90 million-$100 million and Adjusted EBITDA to be in the range of $15 million-$20 million. 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 $480 million-$520 million, Adjusted EBITDA to be in the range of $150 million-$170 million, adjusted net income to be in the range of $90 million-$110 million, cash flow from operations to be in the range of $100 million-$120 million, capital expenditures to be in the range of $15 million-$20 million, and interest expense to also be in the range of $15 million-$20 million. Further, in thinking about the cadence of the year, we expect second quarter revenue to see modest improvement over the first quarter but still have an Adjusted EBITDA decline year-over-year prior to achieving operating leverage in the second half of the year. While it is always our goal to grow profitably, we will continue to invest in the business to maintain our leadership and position Shoals to take advantage of long-term opportunities to create shareholder value. To that end, we are continuing to invest to scale the business. Finally, with the significant cash flow we expect to generate in 2024 and beyond, Shoals has new balance sheet optionality to further drive shareholder value. Specifically, with 2024 cash flow from operations of $100 million-$120 million, up 20% at the midpoint, our capital deployment will continue to emphasize further deleveraging of the balance sheet and growing the business both organically and inorganically. With that, I'll turn it back over to Brandon for closing remarks. Thanks, Dominic. I'd like to close by thanking all of our customers for their confidence in Shoals, our employees for enabling us to effectively serve our customers, and our shareholders for their continuous support. With that, thank you, everyone. I appreciate your time today. We will now open the line for questions. Thank you. At this time, we will be conducting a question-and-answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment, please, as we pull four questions. Our first question comes from the line of Mark Strouse with JPMorgan Chase & Company. Please proceed with your question. Yes, good evening. Thank you very much for taking our questions. I wanted to start with the 2024 guide. Can you just talk about the visibility that you have into the backend-loaded year? And the cancellation or I'm sorry. Are there any cancellations, first of all? And then the delays that you're seeing, are they kind of indefinite delays, or do you have kind of fixed start dates in mind? Mark, hey, it's Brandon. Thank you for the question. I'll start maybe in reverse order of your questions. I guess, look, first and foremost, I want to first congratulate the team for a fantastic year. Revenue up 50%, earnings up 86%, and another significant year of improvement in operating cash. So fantastic year to build from into 2024. As far as project delays go, look, we see an industry-wide issue. We're seeing it across market. We believe it's transitory. The issues are the same as we've heard here in recent quarters: project financing, supply chain, interconnections, IRA confusion. And because of this, we've seen some reductions to multi-year growth rates in industry publications. We've also looked into EIA data specifically. We're seeing project delays going from 36% in early Q1 of 2022 to 62% in the backend. So really, what is happening for us is you're seeing a longer time from quote to purchase order. As we talked about in the prepared earnings, our order book is still robust, but we did see signs of slowdowns with project pushouts in late fourth quarter and in January. Maybe important to say, we have seen improvement in our quote- to- order conversion in February. It's too soon to call this a definitive recovery, but we have seen some improvement in February. So to the question, not necessarily order cancellations. It is just taking us longer to move from a "stage" to an actual purchase order. Dominic, maybe I'll kick it to you to answer the first part of the question. Yeah. With regards to the guide, one of the things that we kind of take pride on is being able to really build a bottoms-up guide as we look at our business. In 2023, I'm really pleased that the guide that we issued at the beginning of the year, we achieved within that range on every metric or exceeded. So as we look at our project-by-project workload, some of the pushouts that we've referred to have perhaps shifted quarters. Now, we normally would have projects move in and out of quarters, but we did see some heavier movement out of Q1 and Q2. With regards to our backlog and book of business and awarded orders at the end of the year, we always enter every year with some go-get. We feel like we have an opportunity to go chase additional revenue where we can book and build within the year. So we still have an opportunity from a sales standpoint. As Brandon mentioned, we've seen some improvements here recently in the quarter that we wanted to call out, where our activity in February was doing really well. And so I think the shorter answer would be, we do look at our projects, we look at our book of business, and we look at those jobs that are available to us in our pipeline that have not yet been awarded. We take all that into consideration as we issue our guide. Okay. And then that was helpful. Thank you. I think the order activity kind of speaks for itself, but just want to get your latest thoughts on market share dynamics. I mean, is this maybe kind of temporary pullback in the market here? Is it creating any aggressive pricing or anything like that from your competitors? Thank you. No, I appreciate the question. The issue is market-driven, not market share-driven. Our value proposition remains extremely strong, and I think we've shown a great example of that by adding another top EPC here after the first of the year. Our solutions of being more cost-efficient to reduce capital spend, reducing operating costs by delivering higher quality and durability after install, and our ability to be more sustainable on projects because we reduce the need of trenching, I think all holds very strong still in the marketplace. Our current customer base understands that value proposition and remains committed to us. Thank you. Thank you. Our next question comes from the line of Brian Lee with Goldman Sachs. Please proceed with your question. Hey, guys. Good afternoon. Thanks for taking the questions. Maybe just a quick follow-up to Mark's. Dominic or Brandon, can you quantify what you're seeing? It sounded like two quarters, right? First quarter, second quarter stuff moving heavier out to the right. But sort of what's the typical backlog conversion and cycle time prior to this year, and then kind of what you're seeing out there and embedding based on how you set up guidance for 2024? And then, Dominic, you also mentioned the book-and-burn business or get-go business. I think in the past, it's been 15%+- each year. So on the guidance baseline you're given today, that would imply $75 million. Or is that different this year in terms of what you're seeing or embedding into the numbers? Sure, Brian. So yeah, there's a couple of things to unpack in there. And I think from the project standpoint and the timelines it's taking, we have seen an increase. I think Brandon mentioned the EIA data that has project delays. Projects that are out there had 36% of them in Q1 of 2022 were experiencing delays. That number is up to 62% at the end of the year. So our timeline has extended. In the past, we would have said awarded orders become revenue within nine to 13 months. We've seen some extension on that. The number of days that it takes us to go from the quote to the actual purchase orders and revenue" has increased as a result of that. So when we look at Q1 and Q2, when we initially got these awarded orders and the delivery dates were expected to have delivery in the first half of the year, and now some of those projects may be in Q2 and Q3 or Q3 and Q4. So we are seeing some pushouts of projects. They haven't canceled. They're still in the book of business, but there are some delays in there. And that's one of the reasons why in the backlog, to your question about the go-gets, I don't want to always think about it in terms of a percentage. I think there's a fair amount of projects that we can win every year. As projects get larger, then yes, then actually that number will go up. But as our denominator gets larger, it's harder to keep getting 15% or 20% go-get every year. So we ended the year, as I mentioned, we had $631 million of backlog. $175 million of that is beyond 2024. So we do have some go-get to go finish out this year. And we believe that's one of the reasons why the second half is going to be the opportunity to have the increased lift because our normal sales cycle, it does take some time to secure the job, work with the EPCs, get it designed, and get the purchase orders and get the materials and build it. So it does take a little bit of time. We still have the opportunity to do that in the first half, and that's why we issued the guide that we did. Brian, probably also maybe worth mentioning just the international business with Backlog and Awarded Orders growing to 13%. The cycle times on those projects tend to be longer as well. So I think you've summed it up well of this project pushout moving to the right approximately two quarters. Okay. That's super helpful, guys. Maybe also on the guidance, just looking at the EBITDA, if we strip out Q1, it seems like the guidance for 2024 implies you'll be doing EBITDA margins well north of 35%, maybe even 40% range in the second half of the year. That's 500 basis points higher than 2023 levels. Is that fair, first off? And then I guess what's sort of the driver there? Is it just gross margin expansion? Is it the OpEx leverage? Maybe speak to some of the drivers and moving parts because it seems like the back half implied margins are quite meaningfully higher than what you saw for most of 2023. Yeah. So the operating leverage is, first and foremost, going to be critical. In the first half of the year, we are experiencing with the lower revenue and perhaps even negative growth year-over-year in the first half of the year, we are definitely going to be losing some leverage. We always look at all of our SG&A expense and where the investment is going to be made from that point down the line. And so it's a little bit of both. We're really gaining the leverage. There were some unusual, I would say, SG&A things that we had put into place last year. We completed some projects. We're not going to repeat those things. We've simplified our legal structure. We've gone through the filings and the secondary offerings that were necessary in the first half of the year. We're reviewing all of our external spend and look at SG&A to make sure it's as efficient as possible to drive value. So we do believe that the EBIT on margins that we're projecting that are implied for the back half are achievable, and that's what we're going after. All right. Great. Last one from me, if I could squeeze it in. Just the Shrinkback issue, you took a charge in Q3 or sorry, Q2. You took a bigger charge in Q3 and then no charge here in Q4, I guess, and you're keeping the overall liability range unchanged. So how should we interpret that? Does that mean you feel like you've kind of got this under control? We shouldn't see outside of some of the cash flow that you have to spend to remediate accruals on the P&L going forward? Is it sort of more ring-fenced at this point just based on the results you saw here in the quarter? Any kind of interpretation would be helpful there. Yeah, Brian. I would say because of our litigation, we're always limited to what we can say here. We are trying to disclose some more information here than I think we have in previous quarters. What I think is important to note, when we originally notified customers, we disclosed approximately 20 sites out of 300 sites that had the Prysmian red wire on it were displaying Shrinkback. Since we notified the customers, we've had an additional 10 sites that required some sort of additional inspection, and four of those sites displayed no evidence of Shrinkback wire. So we continue to work on our remediation effort of known sites. We are working with customers, their timelines, and obviously our internal production timelines. And we've got the opportunity this year to pull some remediation efforts forward a bit. I think as we've disclosed in the prepared remarks, we plan to spend $31.1 million this year on that remediation efforts. That's where things stand today. The final question that you had about where does it reside, that's the point. We have assumptions in the remediation range, and the results that we have thus far were consistent with those assumptions. That's why there was no charge necessary on the income statement. To your point, it would just play out on the balance sheet. The liability would come down as we expend the cash. That's where we stand at the end of 2023. All right. Thanks, guys. I'll pass it on. Thanks, Brian. Thank you. Our next question comes from the line of Philip Shen with Roth Capital Partners, LLC. Please proceed with your question. Hey, everyone. Thanks for taking my questions. First one is on the cadence of quarterly revenue. You've given us the Q1 guide. You said, I think, that the Q2 revenue might be a modest improvement over Q1. Do you anticipate Q1 to be the bottom? And right now, you expect things to accelerate in the back half. And I guess the question there is, do you see these headwinds relieving or being relieved in back half of this year? And if so, what's the basis of that thinking, and what is the risk that you think that these challenges could extend through into back half or even beyond? What's the confidence level that things really improve in the back half? Thanks, guys. Yeah. So let me start and unpack some of that, Phil. I think in terms of our cadence, we typically, as we've been growing the business, have seen about 40% of the revenues occur in the first half of the year, 60% is back half. So it's typically as we've been growing and ramping kind of a natural. A lot of orders get placed in the first quarter. As we mentioned, some of the signs that we had of slowdown in Q4 and into January, we've seen some improvement in quote-unquote "an order conversion" here in February. So as we look at the normal pacing of this, the first quarter would naturally be a lower quarter for us. So in terms of the bottom of our forecast for the year, I think that's a fair characterization from a quarterly revenue perspective. Clearly, we expect jobs to continue to close. We've seen some pushouts that were expected to be in the first half, as we mentioned, move to the back half. We do not have any reason to believe those jobs will cancel. So in terms of prognostication about how the industry recovers, there's a number of factors that Brandon mentioned. There was some wishful thinking on perhaps some of the interest rates or the financing costs right. Did folks have to go and chase down some new financing on power purchase agreements? The interconnection things, I think, are pretty much just there. People know that. I don't think that's driving necessary immediate corrections or slowdown in the space. With the project delays themselves, like I said, there's a number of reasons, a number of factors. But we are always going to work with our customers on their timelines. If they ask us to push a quarter out, we'll absolutely do that for them. Great. Thanks, Dominic. Second topic here is on the new top EPC. I was wondering if you could share a little bit more specifically, is there any way you can quantify the size of the order? What percentage of their business do you think you won? And then it sounds like because of the timing, it sounds like you won that in Q1 this quarter. So is it fair to say that it's not in year-end 2023 backlog, and it wasn't including the order book or the bookings for Q4? And then are the MSA terms similar to normal orders? And then finally, I think that's the last one. So I know it's a lot of questions, but they're all tied together. Phil, that's probably pushing into a realm that we really can't disclose publicly. We're very optimistic. It is a top EPC. I think some of your questions might logically make sense. We are not in a position to comment specifically about terms, about what was in, what's not. We just are very pleased that they recognize the quality Shoals can bring, and we're very pleased to be a part of their family going forward. It's worth saying, Phil, as I mentioned last call, we still believe there's room to grow here in the domestic market, both with new customers and to gain additional wallet share with current customers. This is great evidence of it. We're very excited as a team and a big win for Shoals. Great. One fault there. From a timing standpoint, is it fair to say that this bookings number will be in the Q1 period when you guys report next? Phil, we're not going to comment on the timing of when those specific projects go forward with that EPC. Got it. Okay. Thanks, guys. I'll pass it on. All right. You got it. Thank you. Our next question comes from the line of Andrew Percoco with Morgan Stanley. Please proceed with your question. Great. Thanks so much for taking the questions. Maybe just to kind of start out, just continuing with the revenue conversation for 2024, totally understand that you're calling for a back half in inflection and growth. But I was just curious if you could elaborate on potential retrofit opportunities. I think you have some interesting products that you guys have highlighted it from time to time in terms of potentially going to existing assets to deploy some of those products. What's the opportunity there? Is it meaningful enough to maybe drive additional revenue growth? And if you can also maybe elaborate on what you're seeing on the EV charging and battery storage side of the business in terms of what's embedded in the 2024 guide. Thank you. Yeah. I'll comment on that. This is Brandon. Great questions. I would say on our product base that things have been launched, like SnapShot in particular, that can be deployed post-installation. We are still very early launch with that product today. I would not expect that to be a huge factor in driving our back half growth. It is going to come from our core, mainly domestic utility-scale solar business. As it relates to EV, a lot of strong interest in that product today. Last call, we announced the partnership with Leidos. We are in the process of deploying that now, going well. But again, the back end growth of this year will come from our domestic solar business. Got it. That's super helpful. And then maybe just as my follow-up on the manufacturing expansion, can you just maybe remind us where your capacity stands today, the utilization rate on some of those facilities, and where this additional facility will bring you in terms of a total revenue or megawatt number in terms of total capacity once this facility is up and running? Yeah. As we disclosed last quarter, we took our production capacity from 20 gigawatts to approximately 35 with the ability to scale up to 42. This new facility, the reason that we are investing in it and we are excited about this investment, both for the local area in Portland and our employees, is really to have a purpose-built facility, which enables us to consolidate our operations in Tennessee. We have three plants today in the Tennessee area that are within probably five miles apart. This will enable us to have, again, a purpose-built facility that is self-sustaining. We have also recently announced the closure of our California manufacturing location, and that production will be moving into this new site. So we'll provide more specific details as we build out this facility in the coming quarters. Great. Thank you. Thank you. Our next question comes from the line of Jordan Levy with Truist Securities. Please proceed with your question. Afternoon, all. Appreciate all the details. I think you may have mentioned customer procurement as one of the challenges driving some delays here. I just wanted to get some color on where you're seeing the biggest pain points for customers on procurement. Is this consistent across the customer base or maybe limited to a select few? Yeah. I think, look, like probably everybody else in the industry has mentioned, the supply chain issues mostly center around transformers and switchgear products. So we hear that from many customers. But look, we also hear delays due to permitting, due to labor challenges, and due to long interconnection queue lead time. So again, I think it's an industry-wide phenomenon. Hopefully, we'll solve over the coming quarters, but a mixed bag across our customer base of what we're hearing and why. Appreciate that. Maybe just as a follow-up, even sort of in the transitory year for the industry, you have some strong guidance on cash flows and free cash flows. I'm sure a part of that you'd like to retain against the warranty potential. I just want to get your thoughts on utilization of cash flows at this point. Yeah. So a couple of things. First and foremost, I think you'll see that we've made another quarter improvement in our leverage ratios as we pay down and continue to retire some expensive debt. The term loan, if you recall, had an interest rate north of 11%. At the end of the quarter, you'll see on our balance sheet that we actually started doing a little interest rate arbitrage and utilizing our revolving line of credit to pay down our term loan once the prepayment penalties were gone. We have an opportunity to invest in this industry. We are a company that is innovative and well-respected in our space. We'll always be looking for ways to invest and grow the business both organically and inorganically. As we mentioned, yeah, this is a year when the revenues are a little softer across the marketplace, and we see that. We believe that we're going to continue to generate significant cash flows, grow the business, have been in a position to invest. We are positioning our balance sheet to be flexible. If we see the right opportunity for an acquisition, that is not something we're going to rule out. At this point in time, we do not have a plan for dividends or share repurchase, but we're always talking with our board about those options as well. Right now, the priority is probably going to be continue to invest in the business, pay down some debt, and be ready to strike if some opportunity comes forward. Thanks so much. Appreciate it. You got it, Jordan. Thank you. Our next question comes from the line of Joseph Osha with Guggenheim Partners. Please proceed with your question. Hello there, team. Two questions. First, there's been a lot of talk recently around data centers, data center resiliency, on-site storage, stuff like that. I'm wondering, looking at that end market, whether you all perceive any opportunities. And then I have one other question. Joe, thanks. Good to hear from you. Look, I guess first and foremost, the growth in data centers impacts our business because of power consumption, which is a good thing. I think we'll see consumption grow in the coming years at a faster rate than maybe what was previously modeled. It's a positive thing for our core business in Shoals. As it relates specifically to our interest in data centers, look, we are interested in markets that enable electrification, and data centers would be part of those markets. I believe that we've got a pretty unique value proposition to be able to build plug-and-play systems at scale and reduce labor costs in the field, also aggregating supply chain issues. I do believe that our value proposition translates. Like any large markets in the electrification space, Shoals is looking at data centers, among others. Okay. All right. That's good. Then second question, I think, as everyone on this call knows, there's a place-in-service requirement for solar modules brought into the country under the tariff moratorium that ends at the end of this year, which may or may not sort of create some pull forward as developers and owners try and hit that target. I'm wondering, as you look at your order book and timing and so forth, are you seeing any evidence that that place-in-service requirement is influencing project timing at all? Thank you. Look, I think that could have an impact on the growth that we're seeing in the back half of the year, certainly. So I think your intuition is correct there. So my feel is, on the market, hopefully, there's not a labor constraint there, as maybe that unfolds. If it does, we offer a unique opportunity to reduce labor costs. I think it bodes well for Shoals. Thank you very much. Thank you. Our next question comes from the line of Donovan Schafer with Northland Capital Markets. Please proceed with your question. Hey, guys. Thanks for taking the questions. So my first question is just kind of, I guess, I don't know if you can say maybe technical, but getting at the Shrinkback. The nature of a Shrinkback issue, is that something where I think when a new home gets built, there's usually in the first few months, it kind of settles or something, and you might get some cracks, but then it stabilizes? Is Shrinkback like that where the stuff gets deployed in the field, maybe it's exposed to the elements or whatever, and there's sort of an initial 12-24-month period of adjustment? And so either you see the Shrinkback in that first period or you don't, and you're basically good for the life of that deployment. Is that kind of the nature of it, or can Shrinkback issues rear their ugly head five years, 10 years later? Dominic or I'm sorry, Donovan, I think the way that you've explained that is accurate. We think about Shrinkback occurring after a number of thermal cycles. So as power on, power off, and then also there's a climate element that relates to that. I think we've outlined that really in our complaint. So you are correct in your assumption there. Okay. And then for the backlog, at Intersolar in January, talking to some of your peers, there was—because there's this awareness of the long lead-time items on transformers and high-voltage breakers and switchgear—that in some cases, companies aren't; they're more reluctant to maybe engage with a customer or a prospect or try to kind of win that business and add it into their schedule unless they can get some kind of proof or demonstrated some kind of evidence or something from the customer that shows that the customer has done what it needs to do, whether it's getting in their queue or placing the orders for the right pieces of equipment. In your case, for adding orders to the backlog, when you get a new purchase order and you're adding it to your backlog, are you applying some discretion in terms of deciding, "Do we add this to the backlog? Do we not? Can this customer show us that they've done the things they need to do to get that equipment in time for the project when they expect it to start? Yeah. So Donovan, this is Dominic. Yeah, there's a couple of interesting points in there. But fundamentally, when we have the purchase order, we're at a point along in the project where the EPC has already been selected. The EPC is typically our customer record. They're the ones that are working on the build, and so they know that they need our products. If other supply chain elements are coming up, it does not impact where we are from the purchase order standpoint. We are delivering our products on the timelines that we work with the EPCs. And if they struggle getting a transformer piece in or something's going to be delayed for them for a few months to finish the project, that still generally does not impact us unless the entire project is going to say, "Hey, we just realized we need to push it a few months. Can you guys hold your delivery dates for us?" That's where we always want to work with the customers. The other components of the solar field typically don't impact us from a purchase order standpoint because once we have it, we now know our delivery schedule. Thank you. Our next question comes from the line of Colin Rusch with Oppenheimer. Please proceed with your question. Thanks so much, guys. Can you talk about the opportunity to reduce your COGS, any of the billing materials, ex-copper at this point? As you scale up, are there some meaningful opportunities for you guys in the offense? Yeah. So Colin, appreciate the question on COGS. We actually are always working with our suppliers. When we have visibility to projects going longer terms out, it gives us the opportunity to negotiate discounts and better pricing. We do appreciate the MSAs that we negotiate with customers like Blattner that you've seen us announce because that gives us visibility into the demand so we can negotiate better pricing. But we have guided that we believe gross margin for this business long-term is that 40%-45% range. Not all products carry the same margin. We are introducing products in other jurisdictions, and there are some different cost structures with that. We always are looking to be as efficient as possible with COGS, but we also want to win business and grow the business. So we believe 40%-45% is still a good target for COGS for us. I mean, gross margin. All right. Excellent. Wrong side. That's super helpful. And then obviously, some of these larger MSA agreements are pretty important. Can you talk a little bit about, as you move into some of these international markets, how many customers you're in qualification with or testing with that we might be able to see some sort of agreement in the next 12 months with those folks and what you might need to see to commit to an international manufacturing operation? Yeah, that's a great question. I think we are always going to try to pursue master supply agreements for the reasons that Dominic just disclosed. Probably can't comment to where we stand either internationally or domestic on those. As we've talked about in the past, we intend to, and I think you will see us, put some sort of manufacturing or supply chain operations overseas. We are in the process of vetting where and when that happens right now. So I don't have a particular tipping point for you. But what we do know is, in order for us to continue to compete, we've got to offer our customers reduced lead times. And that would be the reason why we would put manufacturing outside of the United States. Thank you. Our next question comes from the line of Maheep Mandloi with Mizuho. Please proceed with your question. Hi. This is David Benjamin for Maheep. Thanks for squeezing me in here. I have a question on mix looking forward. It looks like system components in the second half of 2023 was down a little bit versus the first half. It was my understanding that we started with components, and then customers shifted over to system solutions. Should we expect that to go back up to those 85%, mid- to high 80s%, or can you guys just give us a little color on product mix? Yeah. So thanks, David. Yeah, this is Dominic. The main thing about mix is we do respond to the projects that are being awarded to us that we win the backlog for. In some cases, the EPCs are pass and go. They're going directly to full system solutions. In some cases, they might be doing home runs and getting to know the company and the quality of our work before making the switch. In some cases, components are just going to be what they want to do. They choose to do the business that way. So the EPC mix is going to have a lot to do with how the component and systems mix goes going forward. There is a baseline of that business, and it will shift quarter to quarter. But we're always trying to encourage folks to use the full solution because that is the maximum value generation for the customers. Our BLA solution is the best in the business, and having that solution for the customers is the best value for them. So it's a natural. We would love to keep it up in the high 80s, but we haven't guided specifically to what mix is going to be going forward. Great. Thanks for the color. You got it, David. Thank you. Our next question comes from the line of Vikram Bagri with Citi. Please proceed with your question. Good afternoon, everyone. I was trying to think about longer-term impact of the lead times you guys talked about. You added about $700 million of backlog in 2023. It sounds like quoting activity hasn't slowed down. The industry continues to project growth longer term. You continue to gain market share, as indicated by your comments, while you have a flat revenue year this year due to delays. So is it likely you end up with significantly higher backlog at the end of this year, and we see a potential step change in revenue next year? And staying on the same topic, when I look at the capacity expansions being planned, it appears you're preparing for this step change when deliveries catch up with quoting activity. And that's why you're sort of progressing towards 42 gigawatts of capacity, which is significant, perhaps allows you revenue generation capacity of $800 million-$900 million on an annual basis. Is the busy delivery schedule you see in front of you the reason for continued expansion? Yeah. So let me jump in there first, and then I'll have Brandon add his color. But in terms of backlog and awarded orders, and one of the things that you've noticed this year as we're starting to disclose more and more, some of the projects do have longer lead times. Some of the international projects and some of the domestic visibility that we have is longer and longer. So some of the growth that you're going to see this year may be that jobs are just going to sit in the awarded order status a bit longer. Some of it may be that there is a pent-up demand from the market itself, and we would see an increase to your hypothesis that you first laid out. But with regards to our facility, look, we have to be we keep our employees in mind. We keep our communities in mind and all of our stakeholders. We are set up like a business that grew from $60 million to $500 million in a few short years, and it's a little bit of a hodgepodge. We have an opportunity to improve the safety, have that purpose-built facility to really help us have a state-of-the-art thing. It does not mean that we're going to keep all of our facilities. We have three in the Portland area. We won't need that as we've now signed a fourth. So some of the facilities will shutter. They're not all owned. Some are owned. But we're looking for the maximum efficiency and being an employer of choice in our market. And I think the facility decision that we've made will have benefits across the board, but it's not necessarily geared towards any particular event. We do know that we need to get ahead of it. It will take time to outfit. And we can't just react on a dime if the demand spigot opens up in Q3. We have to take the time to set this thing up right. So Brandon, any other call you would add? Maybe just to start with your first comment or question, look, we remain very excited about our future. And I think your inclination around backlog growth is correct. We are seeing longer time from quote to purchase order. While saying that, our year-end Backlog and Awarded Orders, again, $631 million, 140% up in fourth quarter as we added $128 million in new orders. We are seeing our funnel as large as it's ever been in quote volume, again, up 154% over last year. I think it is natural as projects get pushed out and we have slower delivery and revenue recognition of projects, you could see an increase in backlog and awarded orders. It's just a natural occurrence. Thank you. Thank you. We have reached the end of the question and answer session. I'll now turn the call back over to management for closing remarks. I would just like to thank everybody for joining us today, and we look forward to connecting with you all over the coming weeks to have further conversations. Take care. This concludes today's conference, and you may disconnect your lines at this time. Thank you for your participation.