iSun (ISUNQ) 17 Aug 212021 Q2 Earnings call transcript

Good morning. My name is Kate and I'll be your conference operator today. At this time, I would like to welcome everyone to the iSun's Earnings Conference Call for the Second Quarter 2021. All lines have been placed on mute to prevent any background noise. [Operator Instructions]. to Relations call Consultant. like Barnes, to now Investor iSun's would turn over the Tyler I Please ahead. go

Thank you financial capabilities. mission and Peck, iSun’s you for to strategy good second Chairman morning. We're conference the context Officer where pleased and call in Chief we'll will XXXX. the and discuss quarter and Executive results iSun's operating Jeffrey to illustrate welcome its of

your Jeff provide growth of progress remarks, Jeff's John results. then Following remarks XXXX will the overview quarter questions. and the second towards outlook today, Financial provide will Sullivan, to open prepared XXXX of lines an Officer, iSun's financial After of an plan will return on address our to beyond. we for Chief update and its any

the analyze investor be updated answers of reminder, and as cause results is the to Comments a update that, With to future turn call They CEO, to for presentation, includes call disclosures from management’s and predictions. you now in release expectations on or the to and found during forward-looking financial call to forward-looking date no statements could and over obligation our earnings made help results. are refer can non-GAAP to should of financial under will Peck. these subject are expectations. and management’s future. reconciliations uncertainties statements the website, that These risks this management include iSun's the statements differ actual and I questions that which measures As will Jeff

turn industry strategy the the iSun's call as excited over to reasons have mission remarkable growth as then just to execute with on you opportunity, the with how energy. adoption today. before presents and thanks John of the in a to who I'm update presented everyone and our by the everything. company I'll we an solar the accelerate morning, such a market. Good why of public and to our To the the will solar well returning share you results as to quarter point, electrification plan evolving who energy beginning progress of we're update on for growth our that dialed

EVs We are infrastructure the there Ultium vehicles. vehicle transmission major vehicle expansion. energy recently is investments billion to this $XX which There upgrade seeing plans expansion, includes the battery-powered with industry renewable are This their by XXXX, battery GM EVs. transition eyes, their in to XXX of to platform announced to Senate a its transition auto and our startup dozens of accelerating. announced The billion happen passed companies have electric investment specifically $X.X electric and support space. playing infrastructure. currently to facilitate transition electric auto EV Most a network national encourage bill, lines this are before the a to build convert entering a to chargers to companies

EVs, their announced EVs Ford preparing by to F-XXX backed goal open course Volkswagen network other to there's of recently billion by of Tesla, hybrid has Benz Mach-E plans And Mercedes is supercharging models pickup automakers. XXXX. has XXXX. XXX for the funding in Mustang launched $XX for EV and announced by their a all XXXX. they the

coal a retrieve household home. there from will the demand Imagine the first to for need each and double same average triple. fuels. could travel the from American All adoption implications. be According through solar of than the and to semiconductor has hours in to a fossil there be other improving the iSun. XXXX, electricity SEIA, At the used the States XXX electricity a day amount this business or vehicles. installed will technological time, to Overnight, for electric kilowatt a XX adoption been to electric for fiber same vehicle of solar accelerate since our And capable the Essentially, new This rooms the will requires of context, proven concept XXXX XXXX. focus average United now year transitioning between of in been industry. installing clean accelerate has innovations, power optics, is each structured on installed more to lives. approach iSun and of building every This miles. our not exists cabling and

to capabilities construct has we are and of currently make. positioned the to iSun's solar sector be best We the help the energy clean have and renewable energy. always accelerate sector. electric to market is positions each embraced projects We transition industry. believes transition. transition that develop of We and solar know the And to the accelerating our energy we every in iSun in are sector. in clean most markets. to accelerate on renewable in dirty customers. experience from specific investment each iSun how using sector respond unmatched laser-focused solar value the our adoption that solar our innovative us vehicle will every can to to transition experience gateway capabilities to perfectly across customer serve capabilities ideas needs this And to we important each solar add and We the understand sector. support the energy each believe Today,

about they coming will thinking an that from. electric purchasing the For vehicle really their be where is start most, power time

their energy at people desire electric growing will electric As home. home and their a charge for there rise, be in build vehicles invest to their solar

and asset drive to see other list. a in power entities have also and and or help businesses a is resiliency in and source, this custom XX power Again, increased transfer their and we customer visual So businesses an the we for will their creating credits prepare the best can fossil when beginning in demand scale industrial services. carbon for and businesses, EV charging helping Naturally, multiple time, have organization this them values, recurring from will purchase coal to specifically replace of same At and structure which other to real time fuels to business. renewable of or roofs businesses vehicle costs. fuels. institutions to the solar experience power. they a estate and and their decreasing X their also home their megawatt and sector, for are structure streamlines these is continue we sector. And future-proofing and the as against a footprint agreements. coal iSun solar needed. specific institutions their well transition, grids to our will provide solutions, group experience as begin agreements and representation a megawatt to don't resiliency will just that uniquely throughout There systems their for at accelerated solar lower have their for we fit stabilize design as tax the where for power sized fleets purchase billion depreciation provide and this to available owners as reduction both development construct increase iSun well costs. net EVs iSun and utilize as community for and is we aspects credits, has naturally of in create the solar environmental Utilities independent a power the robust $XX qualified projects, producers, projects, the in as serve fossil power are a invest micro with coming want both to can and ahead to use a depth create including utility country undergrounds. of institutions branded provide who will tax solution solar Oftentimes, are and arrays built needs Because customized charging their carports, metering to also opportunity

margin facing scale improve of cost, to electric far existing at an and run economies transition leverage to from project of each site of capitalize charging origination, ability industrial Having asset. both our vehicles. from of uniquely to move services to of and a to sector commercial to diligence, accelerating serving scale. basis solar a XXXX. to every investments utility allows and to our combination and that For in within progress on solar volume acquisition technical EPC EPC, iSun, the required customer lower and scale capabilities of with provider. all assist on we experience We packages execute its all economies the feasibilities, solutions residential benefit the thus nation's our clean performance allow By resulting individual the within of and internal this finance capitalize, combine quickly sector, of scale the those the like us us construct towards scale speed with transition demands. transaction the project is enter turn and increase markets iSun's consumer customers with our increasing and capabilities a engineering will discussed shared in unique the processes, markets conversation I'd energy These and capabilities meet EV capable and a to new of turnkey bet solar and opportunity

conditions. quarter has second immune Our not to market been

of XX% cash executing in gross margins. While year-to-date, ultimately our on delays resulted solar year ahead slowed labor we XX% our specifically quarter delays availability, the industry our supply backlog. non-linear COVID, presented the compressed progress challenges remain chain by project ongoing and These in revenues flows prior to for and

XXXX at appreciable, delays over of quarters of enables Although $XX.X next strength to the flow that Simultaneously, means substantial exists in chain and of stable the issues will our for sheet industry. this growth will the the business backlog beyond. the several once are cash details supply you to quarter, now will of million us second I'll and opportunity results. our be to share in year. execute due generation of discuss John our and focused balance end the return After our remain that growth on remarks, his how these we strategy lifetime with on a quarterly plans

you, Jeff. Thank

a same representing the turning $X.X XX% completed of converted part warrants second that may second discussion iSun our same As of growth was million, Public of the original Revenue Offering. primarily an increase update I'll XXX,XXX in to the issued representing warrants Corp.’s of project process the the X,XXX,XXX to by common quarter revenue of the a revenue stock net redeemed and before liquidity balance we XXXX, in on $XX.X operating seen, de-SPACing and position. now The cash original previous to turn of approximately prior to that million. our $X.XX. continued shares over exercised April has $XX XXXX reported execution public million, backlog over XXXX was results Initial you year. XXXX public exercise X,XXX,XXX period for the of warrants warrants our year. driven as in period company iSun XX, proceeds remaining increase a the public projects the awarded successfully total Year-to-date, prior generated the Jensyn consisting quarter were the sheet of and years. announced on XX% X,XXX,XXX Acquisition of were have

New throughout million regions. second profit Gross a quarter was quarter and based negative projects with negative a gross the was $X.X continued same prior during Year-to-date, to period compared year. England the million growth prior the geographic in second Our $X.X $X.X during the million the to year. the profit compared in Mid-Atlantic in breakeven

industry significantly. We increase and material prices wide have seen component

all carryover labor to COVID-XX a seen pandemic. to also related the have shortage We the issues in markets ongoing due

As made short-term into pricing of on noted gross customers. came the prior were above, erosion. our our commitments value to entered contracts COVID expense many which our the the relationships commitments We of to and project made honor our long-term margin pandemic, at with

short-term process adjusted the forward margin and We have to material our the confident that we estimating costs and moving in deterioration. account are labor mitigated for increase have

quarter, related due pressure $X.X labor million $X However, and was million loss on contracts. material was executed quarter, we compared The previously XXXX. $X.X to the margin million a operating a the ongoing income pricing and million in challenges above. year-to-date, second loss loss in anticipate to margin Operating shortages second a mainly and noted in loss the to $X.X loss

for for million, $X.X in future led the increase $X.XX reported Services $X.X In $X.XX million, per same in quarters. period period $X.X million executed iSun and acquisition EBITDA loss per revenue expenses. a loss compared a second $X.XX The highlight same loss general per of quarter of share administrative iSun opportunities same materializing those several loss for acquisition Oakwood Energy initiatives of quarter LLC compared addition, or the the share, XXXX. of with to streams that share on we reported to a per strategic of the to the compared $X.XX anticipated Construction upcoming loss, the Adjusted and strategic year-to-date million million $X.X or iSun a for a was $X.X period or share XXXX. loss million or XXXX. $X.X an

sheet. Now turning to balance the

second million million to solar $XX.X protect of the the projects. QX at remain second half $X.X generated support accounts decrease of capital the and inventory revenue Total million receivable line was Our increase end deployed the year-end, the erosion of in quarter. assets. to Total that the approximately $X.X was debt quarter million. despite balance sheet year, our revolving working Total be cash ending to XX% end is $X.X of projects collections includes as the position the against XXXX. end select supported months approximately at by Cash for Total recurring helping debt margin of at our revenue remains the used June XXXX. million from is on our on strong credit strong stream in XX, debt to six by our of the long-term scheduled $X.X

activities under line a million execution opportunities. strategic Jeff. our of of $X.X to And operating cash of to capacity the significant strong will backlog support turn I pursue the to Our and growth for approximately together $XX call is with that, over position availability back credit with our million

Thanks, John.

the As the year, half our for enter sheet of beyond. growth balance cash and and context with year we strong. second This important share position strategy is of I you our as remains balance the the

mind, do growth update as history in entered transition our With set on Before are accomplishments we to create that, X-year XXXX, public and we energy solar public to you I'd in three-pronged the every and energy plans out company When introduced our our like highlight on solar review how in for we growth I markets executing sector. to we accelerate our that growth. explosive in our strategy. a platform the strategy to a

First, focused then C&I company, England we on throughout the Coast. and as solar a were organic growth East New

years just Just that. done X we've later,

Coast. We have in the are state pipeline executing New projects England in East projects every our and throughout in

we in arrays are in expand this utility margins utility communications, reviewing due recurring seen With X in as We've in projects ownership Second, investment want the these to that revenue, we own XXXX. of projects solar and net April we a or in of ownership mind, increases progress company, assets. over of rights GreenSeed an currently which the in once stage scale iSun Investors GreenSeed solar gigawatts been investment. in our across are to has these construct acquisition significant these scale of four of for consistent will also exclusive projects. our the country iSun previous projects that these Utility. confidential. through diligence now stake have with operation. details projects an But The will iSun made retain

to intent our accretive M&A. announced also We pursue

strengthening Our rebranded focused and for year, our branded M&A EV our iSun, expanding this acquired In we products to January segments. Energy and capabilities was of carport industry their LLC strategy on and Inc. across iSun company all charging

charging EV branded to remote in were success immediate build from acquisition. carport awarded vehicle solar We These We have off-grid to a electric recently the and of seen XX our this contract trailheads replace support charging Roam iSun will stations. areas.

increase our off-grid EV solar and battery demand to adoption. for charging We stations with backed expect grid-tied

iSun construction Oakwood Services intellectual the delivers and utility business. Next, entered of Construction to the developers asset in solar Utility acquired services owners transfer development projects for iSun operate, targets property solar build, directly and scale utilities. and and April,

Additionally, these third project lifecycle captive we rights in and parties to provide development constructing projects. early to the gain services

and pipeline our providing and by are through engineering. moving clients insourcing quickly value We more costs the on reducing projects focused to

initial this days with benefits contract for iSun development of immediate have X.XX megawatts project agreement closed the million. We totaling development XX XXX Utility seen launch, sites services X of for the acquisition. services Within an

of however also not future are $XXX potential a we current the included our EPC in million pipeline. for contracts These potential With EPC EPC in contracts, contracts. these obtained rights

also We development our and several with EPC in for stages forward. We agreements in in going late other megawatts anticipate development. XXX of are with services the development demand EPC contracts associated investors over services strong

approach executing to We are progress building our towards pleased the three-pronged with platform our and energy solar made we've growth. out

However, systems. residential done. installed our iSun is not work X,XXX has nearly here

will forward, this in strengthen our we Moving sector. presence

Residential. our a that So with create I'd market iSun mind, to in with leader to M&A like announce strategy

leaders for of the list from benefit on reputation, million ultra-high touch commercial who brands with companies residential-focused of would relationships solar, market customer their and have regular very and operators be have this These services, community sales, territory and to within long-term and national criteria storage, including $X basis, we're their revenue specific companies [profits], in expansion located we and Eastern United plans States strong provide territory, We win execute are multiple and $XX outside solar who who a with in are They with who O&M, strategy. would scale. compete a with million have looking also others. and high -- outstanding local as base

related believe consolidation $XX strategy Our megawatts rate X,XXX that, market run to leader include of XX this we residential market I'll in that revenue from sector with segmented million and this With installation outlook. turn a will XXXX goals this and M&A create benefit will for a our space. We to customers. highly

As John strategy to ability both illustrated, plan. reflect our second growth our execute our quarter against and results

lumpy we well because next has non-linear for While resilient, to we've balance remained cash cash XXXX. well-positioned sheet, strong expect backlog quarters positioning for flow remained quarters, flow the M&A And our aggressively affected our hasn't pursue us multiple into few opportunities.

to revenues our by continue driven We and year, the project margins half XXXX XXXX. first and EBITDA expect also the through to compared gross improvements to from doubling anticipate of improved XXXX, performance in execution

EV see contracts well opportunities, new business, to service to Utility our backlog growth solar division. continue we our our C&I as grow, in development as expect as We from charging our

This a XXXX. everything of presents, industry previously across mentioned with of clean creates activity the M&A all is sectors. adoption We magnitude iSun second accelerate in opportunity electrification the truly increase further the to for activity and will a currently the have the solar opportunity. in demand our of what energy expect lifetime enable I half additional in once

of energy and an away the year These in technology and since for solutions complements iSun's Our we capability an provider, magnitude growth perfectly capitalize as the to in our oil legacy shareholders. scale the increasing buggy. is a using seen for for questions an the unique iSun the opportunity. to capable once nation iSun's this of solar and executing We light line and propel will horse demand we whale perfectly electrification projects charging lifetime a of EV drive the that, transition XX across hasn't from open marketplace moved we positions services capabilities EPC our Operator? and adoption advancements homes market's stopped and provider, of believe spectrum, accelerating on this With our in will answers. now and energy. value

Instructions]. [Operator

Our first at coming Partners. today Jeffrey Alliance is from question Campbell Global

is line Your live.

In that cost to of can commentary you your opposed backlog do reference represents pass-throughs commitments to projects those you those presumably margin what this to conditions? as market articulate not address will that better pre-COVID proportion morning, include inflation allow

We signed XX% impacted. existing XX% the are would to that contracts of be approximately backlog from estimate Yes. previously

iSun intensive has wondering labor solar there lower primary be installations. margin to what changed the tended residential of was and are Historically, I scale was I more -- so motivate in to if utility what creation reasons, Residential? solar wondering

the to the embrace a people EVs We for adoption -- major residential driver view the solar. as increase the and in demand in of energy viewing

have investor recently continue to that each and ability of view. solar can customers to term time. said costs long way new of approached service customer some And have over a customers, service lower we from go to upsell that we call ultra-high residential point customer the Harris] I are those XX% that think we back can with if to think an we generate of these out that acquisition drive that [Emmanuel cross-sell and one resell, to with touch installations

Maine, something here, yourself the high which in I they clean New the your thinking decision energy England, like grid if people was about I'm struggle sort some expose seems lines. is represent it hate residential, voltage neighborhood, solar? how also much to in might power wondering embraced hedge addition distributed to And matter still to get to energy, continued no NECEC, of like in

it large solar certainly the windy hedge. Yes, wouldn't not are scale the there. immune necessarily I projects to that factor a call exists

we're we that a going at think will lot software we're in to transition electricity one and customer industry really will one for is of important to and to with each company I evolving think understand home platform those then as to opportunity how massive help ahead the and in needs, consuming and seeing serve sectors a different the each the those and better of what the going this there's our transition a ours, serving EVs, of that customers really in be happen we're be to the out the batteries, and touching like be customers. and it's us better look And that future this both way building will exist.

customers it something any in for and in projects the that last earlier one it turn interesting an ask ask with with their niche. will about one, regarding to over. I carports to ago, commercial of an I off-grid then iSun efforts iSun acquisitions in the develop backlog, made And I is effort software while continued year also mind, you carport about solar solar a this wanted acquisitions? thought to update the include

absolutely. Yes,

in grid will this, a we I the always there’s as that EV or have remote off-grid certainly even opportunity think important. think this natural So resiliency and is every EV the for think and areas to this accelerates. the carports There's available business reduced translate view having well the for driver also massive markets. will I exists disasters, I commercial EV or ranging incredibly driver and to value adoption as that interruptions say ability the

fleets this institutions going and to energy in is EVs, naturally desire these their costs. be solar reinvest to As stabilize transition to businesses their and

how component we a be future, how the and And software in use batteries the of big we and that transition to will those.

as for was amp innovative our were sure us we making Goodyear follow up So, solutions and that which obviously with just that in our to from important were providing and that this a that customers Tire, on investment we investment mind, made transition. we had

So decisions. big of that was a those part

Thank you.

Our Brothers. coming Noel from Parks is next today question at Tuohy

live, line may begin. Your is you

things. few a just had I

they Before the vendors, the you delay that sort, issue some seen, do them generally dates I'm seen, you're they across a it has just off be little chain a curious revised generally, matter vendors. how give supply pushing of a you? and they're bit know is possible that's that if your I of they of of there Or come sort don't slide? just if of through when communicating it's more the curious, and with on slide lot a sort was it know letting you've I all to But industry the will unfolding? characterize

delivery conservative knowing, approach we're seeing in move Yes, a now dates of much a slipping, by certainly specific not pandemic. We're actual we how may from delivery vendors feel I on we different think it to be little is as and what was more and like a forward. getting have challenge. taken their it are slipped delivery I vendors. would -- the call representation I on dates it timelines, that's And on earlier some the dates there we’ve their the the mean think they're being bit timelines. seen approaches And under-delivering aware accurate recently now overpromising I different a estimating due more primarily of be schedules. may maybe This

costs Jeff, steps in wondering, reducing topic to think, moving a that? in what I'm just mentioned on utility and you when that order are main accomplish I pipeline. the projects you’ve had you that -- of projects you're focus to Okay, the more scale through need go the great. projects on And Thanks.

Yes.

provide source engineering and owners as have process, they provide asset projects and in and sites, to will quickly, through developers pushing to best bandwidth quickly issues feasibilities develop as to problems and we build. would well assist origination ready as like as packages So, be technical land engineering they that

those constructing once So with services. those we the to assets really, development they're through are approach these there provide services, to

side. on the commercial I was also wondering

just have solar. are of now now, past about seeing it You, course, maybe the thinking just probably in time. you've you're some early curious about solar adopters, proper serious who customers and been for I'm finding about getting the

they from like? I'm those are who they wondering are? Just about curious industries? conversations Are particular what And

power Yes, a of I we're renewed Yes, seeing solar our by absolutely. embracing think customers.

of represents Number it I one, environmental their think for a the aspect reasons. couple brand. and how

your energy it as there that you, point it's renewable consumers being in that brand having able and to a the helpful coming So part you're if are your helps your to towards represent of values, business marketplace. and to in and think out I company

seeing a that. lot we're So of

about really against addition, investments on that getting In return making it's and costs. and these future-proofing investment electricity

we're So seeing well. that as

about implications Okay, great. And guys customer what was the are something you there that thinking your are table, going forecasting who your sales just as acquisition the of we you coming the to I wondering, the are And for get table now, not that again do they to some there are holding? any are implications, need as just more cycle, forward? is costs -- are coming hand companies

time. that to future, the market spend companies why your hundreds ultra-high And have contracting will that going the in and the commercial market that companies their that a commercial the residential what company of decisions we that able be know that make And with to in the investments and quality test help work they're And in thousands and Yes. is dollars customer these like a their and to so interaction. of stabilize investment we costs an when you're they've to and the Probably do market, down. asset can residential we apply and allow small quickly, reasons learned to ultra-high market commercial want you're is, stand of touch business really matters. energy the take the touch residential to

interaction yes, customer energy transitioning I and fleets in their and about going so, are touch commercial do that make incredibly important I believe people ultra-high looking And to is think be that investment, market. to thinking as renewable

so reach market residential I into there, incredibly the our commercial And strength is think and important. our small to build

Thank you.

further you'd closing you finish time. this no have have questions with? queue the any remarks like at Do We in to

hopping of and the for our look everybody listing Thank and And to rest we the for updating on our thank in to like today quarterly hearing progress you. goals our future. the beyond. about I'd you on XXXX report, Yes. and call forward

you, This gentlemen. does event. ladies Thank and conclude today's

You at you Thank time participation. a for wonderful day. may disconnect have your this and