Shoals Technologies Group, a US based electrical balance of system (EBOS) solutions provider for the solar PV, battery storage and electric vehicle (EV) industries, has reported 21.5% increase in revenues for the year 2020. It said this was a 'record' year for the company. Growth in revenues of $175.5 million was attributed by the management to significantly higher sales volumes as a result of increased demand for solar electrical balance of system (EBOS), and combine-as-you-go products.
Reporting its financial results for the 1st time since launching itself as a public company through an initial public offering (IPO) in which it raised over $2.2 billion, Shoals grew group its net income by 34.3% to $33.8 million, up from $25.1 million, while adjusted EBITDA grew 65.6% to $60.9 million.
Q4/2020
During Q4/2020, its revenues grew slightly from $37.9 million a year back to $38.8 million. Higher proportion of revenue from combine-as-you-go system solutions, purchasing efficiencies from increased volumes, manufacturing efficiencies and the like were cited by the management as the reasons for its gross profit increasing 19% YoY to $14.8 million.
Net income, however, dropped to $4.2 million, compared to $7.8 million in Q4/2019.
Shoals' CEO Jason Whitaker said, "Our focus for 2021 is executing on the growth strategies that we described during our initial public offering which include converting more customers to our big lead assembly (BLA) solution, broadening our product offering into complementary categories of EBOS, expanding internationally and introducing new products for EV charging infrastructure."
Cowen Analyst Jeffrey Osborne had a word of appreciation for the company's business model which is its 'ability to reduce the cost to install EBOS solutions while offering a customized solution system for individual projects' that sets it apart from other EBOS suppliers enabling Shoals to capture continued market share gains.
Guidance – Over 30% revenue growth YoY
For the year 2021, Shoals has guided for revenues to be in the range of $230 million to $240 million, reflecting an annual growth of 31.0% to 36.7%, with adjusted EBITDA of $75 million to $80 million. Management expects adjusted net income in the range of $47 million to $51 million. At the end of 2020, Shoals has $157 million worth of backlog and awarded orders.
Roth Capital Partners' Philip Shen said the US company is likely to benefit from significant tailwinds as increasing battery attachment rates for utility scale solar, 5-year extension of Investment Tax Credit (ITC), secular growth, and other domestic and international incentives in place, are on the horizon.
Shen also pointed out that both Shoals and US tracker company Array Technologies have substantial investment by Oaktree Capital Partners and then both were taken public by Oaktree's private equity division, hence there are many overlapping and similar considerations.
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