Shoals Technologies is now the latest solar manufacturer to adjust its guidance, blaming the US AD/CVD investigation.
Despite the adjustment balance of system provider Shoals does not expect the majority of its backlog will be affected by the AD/CVD investigation. This was stated by Jason Whitaker, Shoals CEO, during a conference phone call.
Whitaker stated that the outlook we provided earlier in the year reflected our expectation for continued industry headwinds. Whitaker said that while we remain comfortable with the low end revenue outlook, the uncertainty posed especially by the Commerce Department investigation has led to us to lower our high end outlook.
Whitaker said that new projects would be delayed until the investigation is complete. This could have an impact on future quarters’ backlog growth.
The revised revenue outlook is expected to range between US$300-325million in 2022, lowering its high-end from US$350million. Adjusted EBITDA was reviewed to US$77-86,000 million, up from US$79-997 million.
Due to increased expenses to support growth, and staff hiring, the net income of the company has fallen to US$45-53million from US$54-69million.
Shoals’ first quarter revenue increased 49% year-on–year.
Q1 2022 revenue was US$68m, compared with US$45.6m in Q1 20201. This was primarily driven by a 73% rise in components revenue.
System solutions accounted for 69% of the quarter’s total revenue, a decrease of four percentage points over Q1 2021. The company’s combination-as-you go system and component sales growth contributed to its revenue growth.
Whitaker stated that the company added seven customers to its Big Lead Assembly solution (BLA), which combines cable assemblies, combiner box and fusing into one product, which can represent as much as 2GW in demand, during the first three months.
Notably, three out of seven new customers are located outside the U.S., proving our ability to convert customers from other countries to BLA.
Shoals closed Q1 with a backlog of orders and was awarded orders totaling US$302.3 million. This is a record for the company, an increase of 67% & 1%, respectively, and a reflection of continued strong demand for its products.
Q1 adjusted EBITDA increased 17% over the prior-year period, to US$16.5 millions. The company’s continued investment in growth initiatives led to a slower growth rate. Meanwhile, gross profit increased 40%, to US$26.3million compared with US$18.8million Q1 2021.
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 square foot manufacturing facility, which became operational a little over a month ago, said Whitaker.
Conference call transcript from Motley Fool
