Shoals Technologies Group, Inc. (“Shoals” or the “Company”)
(Nasdaq: SHLS), a leading provider of electrical balance of system
(“EBOS”) solutions for solar, battery storage and electric vehicle
charging infrastructure, today announced results for its fourth
quarter ended December 31, 2021.
“Despite the challenges posed by the COVID-19
pandemic and unprecedented supply chain disruptions, Shoals
delivered record revenue and gross profit in 2021. Revenue and
gross profit grew 21% and 24%, respectively, and gross margin
increased to 38.8%. Adjusted EBITDA increased modestly
year-over-year as a result of investments we made in human capital
infrastructure to support our growth initiatives, including
international expansion, our new EV business unit, expanded storage
offerings, and new product development, as well as public company
costs,” said Jason Whitaker, Chief Executive Officer of Shoals.
Mr. Whitaker added, “The hard work we did in
2021 to convert more customers to BLA, introduce new products,
establish a presence in Europe and launch our EV business is going
to accelerate our growth in 2022. We now have four times as many
BLA customers as we did twelve months ago. Last month we received
our IEC certification in Europe, which was the last regulatory
hurdle before we could sell our products across the EU. We began
shipping our Phase 1 wire management solutions last year, started
manufacturing the first order of our Phase 2 IV curve benchmarking
product in the fourth quarter, and remain on schedule to introduce
BLA 2.0 and high capacity plug-and-play wire harnesses later this
year. Lastly, we have made tremendous progress over the past six
months in our new EV business, including commercializing our first
products, signing our first MSA with a charge point operator and
opening our eMobility Innovation Center, which serves as a showcase
to demonstrate our technology to prospective customers.”
“Our backlog and awarded orders of $299.0
million at year end 2021 is nearly twice what it was at the end of
2020 and underscores the momentum that is building across our
business. To support our growth, we continue to expand our
engineering and sales teams and will be opening an additional
manufacturing facility which will more than double our production
capacity,” said Mr. Whitaker.
“While demand for our products is accelerating,
the current environment is dynamic and we are closely monitoring
our supply chain, labor costs, materials costs and logistics
availability,” concluded Mr. Whitaker.
Fourth Quarter 2021 Financial
ResultsRevenue was $48.0 million, compared to $38.8
million for the prior-year period, an increase of 24%, driven by an
increase of 29% in System Solution revenue and a 15% increase in
Components revenue.
The growth in System Solutions reflects strong
demand for the Company’s combine-as-you-go system. System Solutions
represented 68% of revenue in the quarter versus 65% in the
prior-year period.
Gross profit increased 7% to $15.9 million,
compared to $14.8 million in the prior-year period. Gross profit as
a percentage of revenue was 33.1% compared to 38.3% in the
prior-year period, due to approximately $1.0 million of higher
material and logistics costs. The Company expects additional costs
of approximately $3.0 million in the first half of 2022, with gross
margin expected to normalize at levels in line with what the
Company has achieved historically.
General and administrative expenses were $11.0
million, compared to $5.6 million during the same period in the
prior year. This change was primarily a result of higher non-cash
stock-based compensation, planned increases in payroll expense due
to higher headcount to support growth and new product initiatives,
and new public company costs.
Income from operations was $2.7 million,
compared to $7.2 million during the same period in the prior
year.
Net loss was $2.2 million, compared to net
income of $4.2 million during the same period in the prior year.
This change was primarily due to higher general and administrative
expenses and higher interest expense partially offset by a tax
benefit. Net income for 2021 is not directly comparable to 2020
because prior to its IPO, the Company was organized as a tax
flow-through partnership rather than a corporation and did not
record income taxes. Basic and diluted loss per share was
$(0.04).
Adjusted EBITDA was $11.3 million, compared to
$14.1 million for the prior-year period.
Adjusted net income was $0.9 million, compared
to $9.0 million during the same period in the prior year. Adjusted
diluted earnings per share was $0.01.
Backlog and Awarded OrdersThe
Company’s backlog and awarded orders on December 31, 2021 were
$299.0 million, representing a new record for the company and an
increase of 94% and 10% versus the same time last year and
September 30, 2021, respectively. The increase in backlog and
awarded orders reflects continued robust demand for the company’s
products.
First Quarter 2022 and Full Year 2022
OutlookThe Company is updating its outlook for the quarter
ended March 31, 2022. It is not the Company’s intention to provide
quarterly guidance on an ongoing basis. Based on current market
conditions, business trends and other factors, for the quarter
ended March 31, 2022, the Company expects:
- Revenues to be in the range of $68
million to $74 million
- Adjusted EBITDA to be in the range
of $16 million to $20 million
- Adjusted net
income to be in the range of $10 to $13 million
Based on current business conditions, business
trends and other factors, for the full year 2022 ending December
31, 2022, the Company expects:
- Revenues to be in the range of $300
million to $350 million
- Adjusted EBITDA to be in the range
of $79 million to $97 million
- Adjusted net
income to be in the range of $54 to $69 million
A reconciliation of the Company’s non-GAAP
measures to the applicable GAAP measures are found within this
release.
Webcast and Conference Call
InformationCompany management will host a webcast and
conference call on March 10, 2022, at 5:00 p.m. Eastern Time, to
discuss the Company’s financial results.
Interested investors and other parties can
listen to a webcast of the live conference call by logging onto the
Investor Relations section of the Company’s website at
https://investors.shoals.com.
The conference call can be accessed live over
the phone by dialing 1-855-327-6837 (domestic) or + 1-631-891-4304
(international). A telephonic replay will be available
approximately two hours after the call by dialing 1-844-512-2921 or
for international callers, + 1-412-317-6671. The conference ID for
the live call and pin number for the replay is 10018280. The replay
will be available until 11:59 p.m. Eastern Time on March 24,
2021.
About Shoals Technologies Group,
Inc.Shoals Technologies Group, Inc. is a leading provider
of electrical balance of system (“EBOS”) solutions for solar,
battery storage and electric vehicle charging infrastructure. The
Company’s mission is to provide innovative products that reduce the
cost of installation while improving system performance,
reliability and safety. At least one Shoals’ product was used on
more than half of the solar energy projects installed in the U.S.
in 2020. To learn more about Shoals Technologies, please visit the
company’s website at https://www.shoals.com.
Investor Relations Contact Shoals Technologies
Group, Inc. Email: investors@shoals.com Phone: 615-323-9836
Forward-Looking StatementsThis report contains
forward-looking statements that are based on our management’s
beliefs and assumptions and on information currently available to
our management. Forward-looking statements include information
concerning our possible or assumed future results of operations,
business strategies, technology developments, financing and
investment plans, dividend policy, competitive position, industry
and regulatory environment, potential growth opportunities and the
effects of competition. Forward-looking statements include
statements that are not historical facts and can be identified by
terms such as “anticipate,” “believe,” “could,” “estimate,”
“expect,” “intend,” “may,” “plan,” “potential,” “predict,”
“project,” “seek,” “should,” “will,” “would” or similar expressions
and the negatives of those terms.
Forward-looking statements involve known and
unknown risks, uncertainties and other factors that may cause our
actual results, performance or achievements to be materially
different from any future results, performance or achievements
expressed or implied by the forward-looking statements. Given these
uncertainties, you should not place undue reliance on
forward-looking statements. Also, forward-looking statements
represent our management’s beliefs and assumptions only as of the
date of this report. You should read this report with the
understanding that our actual future results may be materially
different from what we expect.
Except as required by law, we assume no
obligation to update these forward-looking statements, or to update
the reasons actual results could differ materially from those
anticipated in these forward-looking statements, even if new
information becomes available in the future.
Non-GAAP Financial Measures(1) A reconciliation
of projected adjusted EBITDA, adjusted net income, and adjusted
diluted earnings per share, which are forward-looking measures that
are not prepared in accordance with GAAP, to the most directly
comparable GAAP financial measures, is not provided because we are
unable to provide such reconciliation without unreasonable effort.
The inability to provide a quantitative reconciliation is due to
the uncertainty and inherent difficulty in predicting the
occurrence, the financial impact and the periods in which the
components of the applicable GAAP measures and non-GAAP adjustments
may be recognized. The GAAP measures may include the impact of such
items as non-cash share-based compensation, amortization of
intangible assets and the tax effect of such items, in addition to
other items we have historically excluded from adjusted EBITDA and
adjusted net income per share. We expect to continue to exclude
these items in future disclosures of these non-GAAP measures and
may also exclude other similar items that may arise in the future
(collectively, “non-GAAP adjustments”).
Adjusted EBITDA, Adjusted Net Income and Adjusted
Diluted EPSWe define Adjusted EBITDA as net income (loss)
plus (i) interest expense, net, (ii) income taxes expense, (iii)
depreciation expense, (iv) amortization of intangibles, (v) payable
pursuant to the tax receivable agreement liability adjustment, (vi)
loss on debt repayment, (vii) equity-based compensation, (viii)
acquisition-related expenses (ix) COVID-19 expenses and (x)
non-recurring and other expenses. We define Adjusted Net Income as
net income (loss) plus (i) amortization of intangibles, (ii)
payable pursuant to the tax receivable agreement liability
adjustment, (iii) loss on debt repayment, (iv) amortization of
deferred financing costs, (v) equity-based compensation, (vi)
acquisition-related expenses (vii) COVID-19 expenses and (viii)
non-recurring and other expenses, all net of applicable income
taxes. We define Adjusted Diluted EPS as Adjusted Net Income
divided by the diluted weighted average shares of Class A common
shares outstanding for the applicable period, which assumes the pro
forma exchange of all outstanding Class B common shares for Class A
common shares.
Adjusted EBITDA, Adjusted Net Income and
Adjusted Diluted EPS are intended as supplemental measures of
performance that are neither required by, nor presented in
accordance with, GAAP. We present Adjusted EBITDA, Adjusted Net
Income and Adjusted Diluted EPS because we believe they assist
investors and analysts in comparing our performance across
reporting periods on a consistent basis by excluding items that we
do not believe are indicative of our core operating performance. In
addition, we use Adjusted EBITDA, Adjusted Net Income and Adjusted
Diluted EPS: (i) as factors in evaluating management’s performance
when determining incentive compensation; (ii) to evaluate the
effectiveness of our business strategies; and (iii) because our
credit agreement uses measures similar to Adjusted EBITDA, Adjusted
Net Income and Adjusted Diluted EPS to measure our compliance with
certain covenants.
Among other limitations, Adjusted EBITDA,
Adjusted Net Income and Adjusted Diluted EPS do not reflect our
cash expenditures, or future requirements for capital expenditures
or contractual commitments; do not reflect the impact of certain
cash charges resulting from matters we consider not to be
indicative of our ongoing operations; in the case of Adjusted
EBITDA, does not reflect income tax expense or benefit for periods
prior to the reorganization; and may be calculated by other
companies in our industry differently than we do or not at all,
which may limit their usefulness as comparative measures.
Because of these limitations, Adjusted EBITDA,
Adjusted Net Income and Adjusted Diluted EPS should not be
considered in isolation or as substitutes for performance measures
calculated in accordance with GAAP. You should review the
reconciliation of net income to Adjusted EBITDA, Adjusted Net
Income and Adjusted Diluted EPS below and not rely on any single
financial measure to evaluate our business.
Shoals Technologies Group,
Inc.Consolidated Balance Sheets (in
thousands, except shares)
|
December 31, |
|
|
2021 |
|
|
|
2020 |
|
Assets |
|
|
|
Current Assets |
|
|
|
Cash and cash equivalents |
$ |
5,006 |
|
|
$ |
10,073 |
|
Accounts receivable, net |
|
31,499 |
|
|
|
27,004 |
|
Unbilled receivables |
|
13,533 |
|
|
|
3,794 |
|
Inventory, net |
|
38,368 |
|
|
|
15,121 |
|
Other current assets |
|
5,042 |
|
|
|
155 |
|
Total Current Assets |
|
93,448 |
|
|
|
56,147 |
|
Property, plant and equipment, net |
|
15,574 |
|
|
|
12,763 |
|
Goodwill |
|
69,436 |
|
|
|
50,176 |
|
Other intangible assets, net |
|
65,236 |
|
|
|
71,988 |
|
Deferred tax assets |
|
176,958 |
|
|
|
— |
|
Other assets |
|
5,762 |
|
|
|
4,236 |
|
Total Assets |
$ |
426,414 |
|
|
$ |
195,310 |
|
|
|
|
|
Liabilities and Stockholders’ Deficit / Members’
Deficit |
|
|
|
Current Liabilities |
|
|
|
Accounts payable |
$ |
19,985 |
|
|
$ |
14,634 |
|
Accrued expenses |
|
9,569 |
|
|
|
5,967 |
|
Long-term debt—current portion |
|
2,000 |
|
|
|
3,500 |
|
Total Current Liabilities |
|
31,554 |
|
|
|
24,101 |
|
Revolving line of credit |
|
55,140 |
|
|
|
20,000 |
|
Long-term debt, less current portion |
|
189,913 |
|
|
|
335,332 |
|
Payable pursuant to the tax
receivable agreement |
|
156,374 |
|
|
|
— |
|
Other long-term
liabilities |
|
931 |
|
|
|
— |
|
Total Liabilities |
|
433,912 |
|
|
|
379,433 |
|
Commitments and Contingencies |
|
|
|
Stockholders’ Deficit / Members’ Deficit |
|
|
|
Members’ deficit |
|
— |
|
|
|
(184,123 |
) |
Preferred stock, $0.00001 par value - 5,000,000 shares authorized;
none issued and outstanding as of December 31, 2021 |
|
— |
|
|
|
— |
|
Class A common stock, $0.00001 par value - 1,000,000,000 shares
authorized; 112,049,981 shares issued and outstanding as of
December 31, 2021 |
|
1 |
|
|
|
— |
|
Class B common stock, $0.00001 par value - 195,000,000 shares
authorized; 54,794,479 shares issued and outstanding as of December
31, 2021 |
|
1 |
|
|
|
— |
|
Additional paid-in capital |
|
95,684 |
|
|
|
— |
|
Accumulated deficit |
|
(93,133 |
) |
|
|
— |
|
Total stockholders’ equity attributable to Shoals Technologies
Group, Inc. / members' equity (deficit) |
|
2,553 |
|
|
|
(184,123 |
) |
Non-controlling interests |
|
(10,051 |
) |
|
|
— |
|
Total stockholders’ deficit / members’ deficit |
|
(7,498 |
) |
|
|
(184,123 |
) |
Total Liabilities and Stockholders’ Deficit / Members’
Deficit |
$ |
426,414 |
|
|
$ |
195,310 |
|
Shoals Technologies Group,
Inc.Consolidated Statements of Operations
(in thousands, except per share amounts)
|
Three Months EndedDecember
31, |
|
Twelve Months EndedDecember
31, |
|
2021 |
|
2020 |
|
2021 |
|
2020 |
Revenue |
$ |
48,046 |
|
|
|
38,753 |
|
|
$ |
213,912 |
|
|
$ |
175,518 |
|
Cost of
revenue |
32,123 |
|
|
23,911 |
|
|
130,567 |
|
|
108,972 |
|
Gross
profit |
15,923 |
|
|
14,842 |
|
|
82,645 |
|
|
66,546 |
|
Operating
Expenses |
|
|
|
|
|
|
|
General and administrative expenses |
11,028 |
|
|
5,618 |
|
|
37,893 |
|
|
21,008 |
|
Depreciation and amortization |
2,215 |
|
|
2,068 |
|
|
8,520 |
|
|
8,262 |
|
Total Operating Expenses |
13,243 |
|
|
7,686 |
|
|
46,413 |
|
|
29,270 |
|
Income from
Operations |
2,680 |
|
|
7,156 |
|
|
36,232 |
|
|
37,276 |
|
Interest expense, net |
(3,638 |
) |
|
(2,909 |
) |
|
(14,549 |
) |
|
(3,510 |
) |
Payable pursuant to the tax
receivable agreement adjustment |
2,015 |
|
|
— |
|
|
(1,663 |
) |
|
— |
|
Loss on debt repayment |
— |
|
|
— |
|
|
(15,990 |
) |
|
— |
|
Income before income
taxes |
1,057 |
|
|
4,247 |
|
|
4,030 |
|
|
33,766 |
|
Income tax expense |
(3,209 |
) |
|
— |
|
|
(86 |
) |
|
— |
|
Net income
(loss) |
(2,152 |
) |
|
4,247 |
|
|
3,944 |
|
|
33,766 |
|
Less: net income (loss)
attributable to non-controlling interests |
(315 |
) |
|
— |
|
|
1,596 |
|
|
— |
|
Net income (loss)
attributable to Shoals Technologies Group, Inc. |
$ |
(1,837 |
) |
|
|
4,247 |
|
|
$ |
2,348 |
|
|
$ |
33,766 |
|
|
|
|
|
|
|
|
|
|
Three MonthsEndedDecember
31,2021 |
|
|
|
Period fromJanuary 27,2021 toDecember
31,2021 |
|
|
Loss per share of
Class A common stock: |
|
|
|
|
|
|
|
Basic |
$ |
(0.04 |
) |
|
|
|
$ |
0.00 |
|
|
|
Diluted |
$ |
(0.04 |
) |
|
|
|
$ |
0.00 |
|
|
|
Weighted average
shares of Class A common stock outstanding: |
|
|
|
|
|
|
|
Basic |
106,233 |
|
|
|
|
99,269 |
|
|
|
Diluted |
106,233 |
|
|
|
|
99,269 |
|
|
|
Shoals Technologies Group,
Inc.Consolidated Statements of Cash Flows
(in thousands)
|
Twelve Months Ended December
31, |
|
|
2021 |
|
|
|
2020 |
|
Cash Flows from
Operating Activities |
|
|
|
Net income |
$ |
3,944 |
|
|
$ |
33,766 |
|
Adjustments to reconcile net
income to net cash provided by (used in) operating activities: |
|
|
|
Depreciation and amortization |
|
10,053 |
|
|
|
9,405 |
|
Amortization/write off of deferred financing costs |
|
5,969 |
|
|
|
351 |
|
Equity-based compensation |
|
11,286 |
|
|
|
8,251 |
|
Provision for slow-moving inventory |
|
(1,418 |
) |
|
|
188 |
|
Deferred taxes |
|
(1,476 |
) |
|
|
— |
|
Payable pursuant to the TRA adjustment |
|
1,663 |
|
|
|
— |
|
Gain on sale of assets |
|
52 |
|
|
|
— |
|
Changes in assets and liabilities, net of business
acquisition: |
|
|
|
Accounts receivable |
|
818 |
|
|
|
288 |
|
Unbilled receivables |
|
(9,739 |
) |
|
|
(1,289 |
) |
Inventory |
|
(17,188 |
) |
|
|
(6,475 |
) |
Other assets |
|
341 |
|
|
|
643 |
|
Accounts payable |
|
(3,877 |
) |
|
|
4,251 |
|
Accrued expenses |
|
(4,511 |
) |
|
|
4,703 |
|
Net Cash Provided by
(Used in) Operating Activities |
|
(4,083 |
) |
|
|
54,082 |
|
Cash Flows Used In
Investing Activities |
|
|
|
Purchases of property, plant and equipment |
|
(4,126 |
) |
|
|
(3,236 |
) |
Acquisition of a business, net of cash acquired |
|
(12,909 |
) |
|
|
— |
|
Net Cash Used in
Investing Activities |
|
(17,035 |
) |
|
|
(3,236 |
) |
Cash Flows from
Financing Activities |
|
|
|
Member / non-controlling interest distributions |
|
(4,837 |
) |
|
|
(376,046 |
) |
Employee withholding taxes related to net settled equity
awards |
|
(137 |
) |
|
|
— |
|
Deferred financing costs |
|
(94 |
) |
|
|
(11,821 |
) |
Proceeds from term loan facility |
|
— |
|
|
|
350,000 |
|
Payments on term loan facility |
|
(152,750 |
) |
|
|
— |
|
Proceeds from revolving credit facility |
|
49,140 |
|
|
|
20,000 |
|
Repayments of revolving credit facility |
|
(14,000 |
) |
|
|
— |
|
Proceeds from issuance of Class A common stock sold in an IPO |
|
278,833 |
|
|
|
— |
|
Purchase of LLC Interests with proceeds from IPO |
|
(124,312 |
) |
|
|
— |
|
Proceeds from issuance of Class A common stock in follow-on
offering, net of underwriting discounts and commissions |
|
281,064 |
|
|
|
Purchase of LLC Interests with proceeds from follow-on
offering |
|
(281,064 |
) |
|
|
— |
|
Payment of debt assumed in acquisition |
|
(1,537 |
) |
|
|
— |
|
Deferred offering costs |
|
(9,704 |
) |
|
|
(3,738 |
) |
Payments on senior debt - term loan |
|
— |
|
|
|
(26,250 |
) |
Proceeds from senior debt - revolving line of credit |
|
— |
|
|
|
— |
|
Payments on senior debt - revolving line of credit |
|
— |
|
|
|
— |
|
Proceeds from delayed draw term loan facility |
|
— |
|
|
|
20,000 |
|
Payments on delayed draw term loan facility |
|
— |
|
|
|
(20,000 |
) |
Net Cash Provided by
(Used in) Financing Activities |
|
20,602 |
|
|
|
(47,855 |
) |
Net Increase
(Decrease) in Cash, Cash Equivalents and Restricted
Cash |
|
(516 |
) |
|
|
2,991 |
|
Cash, Cash Equivalents
and Restricted Cash—Beginning of Period |
|
10,073 |
|
|
|
7,082 |
|
Cash, Cash Equivalents
and Restricted Cash—End of Period |
$ |
9,557 |
|
|
$ |
10,073 |
|
Shoals Technologies Group,
Inc.Adjusted EBITDA and Adjusted Net Income
Reconciliation (Unaudited)(in thousands)
Reconciliation of Net Income (Loss) to Adjusted EBITDA (in
thousands):
|
Three Months EndedDecember
31, |
|
Twelve Months EndedDecember
31, |
|
2021 |
|
2020 |
|
2021 |
|
2020 |
Net income (loss) |
$ |
(2,152 |
) |
|
$ |
4,247 |
|
|
$ |
3,944 |
|
|
$ |
33,766 |
|
Interest expense, net |
3,638 |
|
|
2,909 |
|
|
14,549 |
|
|
3,510 |
|
Income tax expense |
3,209 |
|
|
— |
|
|
86 |
|
|
— |
|
Depreciation expense |
436 |
|
|
391 |
|
|
1,701 |
|
|
1,420 |
|
Amortization of
intangibles |
2,272 |
|
|
1,997 |
|
|
8,352 |
|
|
7,985 |
|
Payable pursuant to the TRA
adjustment (a) |
(2,015 |
) |
|
— |
|
|
1,663 |
|
|
— |
|
Loss on debt repayment |
— |
|
|
— |
|
|
15,990 |
|
|
— |
|
Equity-based compensation |
4,382 |
|
|
1,032 |
|
|
11,286 |
|
|
8,251 |
|
Acquisition-related
expenses |
652 |
|
|
— |
|
|
2,349 |
|
|
— |
|
COVID-19 expenses(b) |
70 |
|
|
884 |
|
|
339 |
|
|
2,890 |
|
Non-recurring and other
expenses(c) |
777 |
|
|
2,633 |
|
|
2,598 |
|
|
3,077 |
|
Adjusted EBITDA |
$ |
11,269 |
|
|
$ |
14,093 |
|
|
$ |
62,857 |
|
|
$ |
60,899 |
|
(a) Represents an adjustment to
eliminate the remeasurement of the payable pursuant to the TRA.
(b) Represents costs incurred as a
direct impact from the COVID-19 pandemic, disinfecting and
reconfiguration of facilities, medical professionals to conduct
daily screenings of employees, premium pay during the pandemic to
hourly workers in 2020 and direct legal costs associated with the
pandemic.
(c) Represents certain costs
associated with non-recurring professional services, Oaktree’s
expenses and other costs.
Reconciliation of Net Income (Loss) Attributable to Shoals
Technologies Group, Inc. to Adjusted Net Income (in thousands):
|
Three Months EndedDecember 31, |
|
Twelve Months EndedDecember
31, |
|
2021 |
|
2020 |
|
2021 |
|
2020 |
Net income (loss) attributable to Shoals Technologies Group,
Inc. |
$ |
(1,837 |
) |
|
$ |
4,247 |
|
|
$ |
2,348 |
|
|
$ |
33,766 |
|
Net income (loss) impact from
pro forma conversion of Class B common stock to Class A common
stock (a) |
(315 |
) |
|
— |
|
|
1,596 |
|
|
— |
|
Adjustment to the provision
for income tax (b) |
20 |
|
|
(862 |
) |
|
(456 |
) |
|
(7,327 |
) |
Tax effected net income
(loss) |
(2,132 |
) |
|
3,385 |
|
|
3,488 |
|
|
26,439 |
|
Amortization of
intangibles |
2,272 |
|
|
1,997 |
|
|
8,352 |
|
|
7,985 |
|
Amortization of deferred
financing costs |
277 |
|
|
320 |
|
|
1,230 |
|
|
351 |
|
Payable pursuant to TRA
adjustment(c) |
(2,015 |
) |
|
— |
|
|
1,663 |
|
|
— |
|
Loss on debt repayment |
— |
|
|
— |
|
|
15,990 |
|
|
— |
|
Equity-based compensation |
4,382 |
|
|
1,032 |
|
|
11,286 |
|
|
8,251 |
|
Acquisition-related
expenses |
652 |
|
|
— |
|
|
2,349 |
|
|
— |
|
COVID-19 expenses (d) |
70 |
|
|
884 |
|
|
339 |
|
|
2,890 |
|
Non-recurring and other
expenses (e) |
777 |
|
|
2,633 |
|
|
2,598 |
|
|
3,077 |
|
Tax impact of adjustments
(f) |
(3,409 |
) |
|
(1,266 |
) |
|
(11,381 |
) |
|
(3,104 |
) |
Adjusted Net Income |
$ |
874 |
|
|
$ |
8,985 |
|
|
$ |
35,914 |
|
|
$ |
45,889 |
|
(a) Reflects net income (loss) to
Class A common shares from pro forma exchange of corresponding
shares of our Class B common shares held by our Founder and
management.
(b) Shoals Technologies Group, Inc.
is subject to U.S. Federal income taxes, in addition to state and
local taxes with respect to its allocable share of any net taxable
income of Shoals Parent LLC. The adjustment to the provision for
income tax reflects the effective tax rates below, assuming Shoals
Technologies Group, Inc. owns 100% of the units in Shoals Parent
LLC.
|
|
Twelve Months EndedDecember
31, |
|
|
2021 |
|
2020 |
|
Statutory U.S. Federal income tax rate |
|
21.0 |
% |
|
21.0 |
% |
State and local taxes (net of
federal benefit) |
|
6.4 |
% |
|
0.7 |
% |
Permanent items, including
valuation adjustment |
|
1.2 |
% |
|
— |
% |
Effective income tax rate for
Adjusted Net Income |
|
28.6 |
% |
|
21.7 |
% |
(c) Represents an adjustment to eliminate the
remeasurement of the payable pursuant to the TRA.
(d) Represents costs incurred as a direct impact from
the COVID-19 pandemic, disinfecting and reconfiguration of
facilities, medical professionals to conduct daily screenings of
employees, premium pay during the pandemic to hourly workers in
2020 and direct legal costs associated with the pandemic.
(e) Represents certain costs
associated with non-recurring professional services, Oaktree’s
expenses and other costs.
(f) Represents the estimated tax
impact of all Adjusted Net Income add-backs, excluding those which
represent permanent differences between book versus tax.
Reconciliation of Diluted Weighted Average
Shares Outstanding to Adjusted Diluted Weighted Average Shares
Outstanding (in thousands, except per share):
|
Three Months EndedDecember
31, |
|
Twelve Months EndedDecember
31, |
|
2021 |
|
2020 |
|
2021 |
|
2020 |
Diluted weighted
average shares of Class A common shares outstanding, excluding
Class B common shares |
106,606 |
|
|
N/A (b) |
|
99,507 |
|
|
N/A (b) |
Assumed pro forma
conversion of Class B common shares to Class A common shares |
60,611 |
|
|
N/A (b) |
|
67,429 |
|
|
N/A (b) |
Adjusted diluted
weighted average shares outstanding |
167,217 |
|
|
N/A (b) |
|
166,936 |
|
|
N/A (b) |
|
|
|
|
|
|
|
|
Adjusted Net Income (a) |
$ |
874 |
|
|
N/A (b) |
|
$ |
35,914 |
|
|
N/A (b) |
Adjusted Diluted
EPS |
$ |
0.01 |
|
|
N/A (b) |
|
$ |
0.22 |
|
|
N/A (b) |
(a) Represents Adjusted Net Income for the
full period presented.
(b) This Non-GAAP measure is not
applicable for this period, as the reorganization transactions had
not yet occurred.
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