Shoals Technologies (SHLS) 28 Feb 232022 Q4 Earnings call transcript

Good afternoon, and welcome to Shoals Technologies Group Fourth Quarter 2022 Earnings Conference Call. Today's call is being recorded, and we have allocated 1 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 for and us operator, you, you, joining everyone, today. Thank CEO, call Bardos. President, with the Jason me Dominic Hosting CFO, are Whitaker; and Jeff Tolnar;

this subject to other and projections uncertainties. current be management risks and statements expectations are based on On or which assumptions, call, will forward-looking making

statements As and Actual from guarantees not of comments, or results. consider any you these materially understand that if are you including year the assumptions factors. forward-looking or XXXX, could our listen results our differ of statements, because guidance these are should regarding of full performance incorrect other

These the Exchange events, and industry conditions, our Commission and in chain among of for market factors and as regulatory filings changes, our disruptions and components well demand include, policy and economic other risk factors materials. supply availability products, macroeconomic as Securities current and circumstances, things, with price the decreased described our

that are or the underlying indicate the Although assumptions the will undertake the results statements may therefore, update contemplated forward-looking and incorrect statement date is could statements. statements this that forward-looking the no assumptions can in there and assurance we be that of any prove believe reasonable, any do as forward-looking in to this the realized. discussion We included made and discussion of any of be duty not caution forward-looking any inaccurate

includes measures. Today's financial also non-GAAP presentation to references

in company's of quarter fourth the contained press definitional information financial the measures non-GAAP historical reconciliations to to information for refer and should the You measures. release comparable

turn let me Jason. that, the call to over With

good everyone. Mehgan, and much, very afternoon, you Thank

that customers, your support, vendors past do achieved each today. that who remarks, several I the Shoals company the would has Before we we have to played years. tremendous I our in have like formal shareholders the not and Without make employees, success thank would contributions and over a role my

results full start discuss quarter some transition. and our CEO from with year key our on I'll and off progress then highlights fourth the

an then lines Dominic it our for conditions for update the will turn we an focus year. initiatives, of with to the on our up Jeff, operational over growth questions. provide quarter will current market wrap who before open results business, XXXX fourth this for and outlook and that, Following financial overview I'll for areas

demand Shoals set and EBITDA was full grew and underscored X fourth both adjusted profit, and year and for income quarter annual revenue EV more has Compared for having growing prior continued of by for products demand respectively. revenue, in fourth gross revenue full records revenue and new years. over adjusted year XX% by our The gains despite increase the net strength the year. fact and XX%, past to the solar quarter that the is periods, public, year driven in we've products. been increased for share doubled Shoals' since The each our than growth revenue

fixed proportion costs the in quarter period basis last points year, Versus we leverage was and expansion driven our and quarter to achieved XXX margin same of basis solution. attributable of margin XX.X%, XX.X%. on margin gross higher combine-as-you-go greater EBITDA result volumes fourth to increased The to points the revenues than increased XXX approximately the sales fourth increased by more adjusted

the reasons. down March In update company this to from announced transition. I XX. an turning CEO be last will role My November, day health for Shoals our year be that Now on will CEO stepping as my with

and was Solutions our Greenlots, cofounded startups, several Tolnar, has with Shoals, SVP President, appointed company led Interim Jeff successful launch Fortune acquired Jeff previously held business. and or management as Jeff Shoals. XXX of Shoals the EV announced, was EV which senior including to Prior led the previously positions Solutions As of by CEO. companies

accountable candidates are The the currently and engineering vet vetting President, new is with required goals are qualified as following to process. several global his highly to for Stuart to role search operations. Jeff sales, development, an working select responsible Spencer intends completion team a and strategic and product operational company's of achieve the ensuring his for He Board extensive met. permanent milestones is CEO In and

With that it Jeff. turn update, I'll over to

you, good to combined the our afternoon, a our Thank Jason, all our product you status everyone. be quarter pleasure new solutions today. of of performance the with a of for in discuss It's I'll start introductions then and core with review XXXX. as-you-go

are review we our operational in and new on that markets core update our initiatives an and close of provide I'll international then with efforts, EV some solar conditions that, implementing. overview Following expansion an

the grew gains Solutions XXXX, share by demand reflecting U.S. versus of utility growth products. in strong of fourth the solar XXXX quarter continued our and System XXX% in revenue fourth quarter scale

quarter, system EPCs our as-you-go the developers X XX, will the We XX combined be and number customers we converted EPCs to U.S. in During the in bringing total the and in majority of additional with developers of using that additional transition. system, our to XXXX. an believe BLA

line wire new product quarter. Our contributed growth in to the management

throughout Our conventional rate faster clips, recently wire that as we products' megawatts of XXX using surpassed and solutions. increasingly install for attach We management recognize and customers more projects BLA are deliveries grow has to continued continued XXXX. our they expect to reliable growth than

quarter for awarded products during the battery the battery to customers. quoting as shipments X our project fourth is Our incorporating sales products are XXXX. in solar gigawatt we storage solar for DC storage the battery began growth storage third projects of and Shoals team storage, our More actively to quarter also contributed

dedicated sales added recently we energy for We drive higher storage, which help resources sales believe volumes. will

half eMobility year. second plans energy the to also Our launch this of storage an offering in team

fulfill orders the our primary in The quarter school solutions orders received QX grew for those bus and fourth deliveries. as in QX team significantly electrification. uses EV fleet continued end for Our business to were

ship may and products. is orders in early quarters still contribution others, in when business we smaller uneven EV and its in certain growth our outsized on in As evolution, be receive contribution depending

planned our new product to Turning for XXXX. introductions

and revenues plug-and-play generate progressing. expect We high-capacity UL high-capacity high-capacity certification wire harness this year. the X.X the while development of slightly, was plug-and-play delayed to connectors from harnesses new BLA our is of

and to second deployed later with solution our mid-XXXX launch full year. prototypes recently to certification UL follow are quarter. now began and first We bundled revenues in to X.X be the expect expecting BLA in the record We our quoting market

of installation Shoals acquired rather of and further to the field than EPCs and from and BLA vendor. wire reduces our one least offering. a all X.X solution in system, integrated BLA amount to with combines racking Shoals the create to EBOS all required tensioning at components components the the BLA procure support attach systems comprehensive single developers wire This enables labor their other the management, to including and

enable includes BLA. X.X to through average We additional BLA migrating selling the X.X volume a it customers Because higher increased both has bundle and revenue components, ASPs. will price BLA believe higher grow us than to

to Latin We're volume America, activity. EMEA Australia led making progress by with expansion and on continuing grow, quoting our international

We United quote the XX-megawatt fulfillment of options the were project regional XXXX are mass. we Bank Export-Import approach third Notably, Year Honduras evaluating quarter production Energy awarded volumes the and of in the States. by of order in received as Deal of the Renewable a critical the

for specifically. Overall, the overview Shoals an conditions favorable, Moving whole for industry conditions. a market EV market solar of both to and are and solar as

bill the demand fast benefits to funds significant XXXX and related solar products. see the storage by are infrastructure both flow of solutions, which the from infrastructure bill Act early Reduction funds. We largely for form charging the offerings, is to in increasing are see for Inflation of while quote demand generating on-the-go We from volume beginning EV driven increasing charging

driving our merely same given the wage reduce environment their to hours skilled seek the the IRA demonstrated labor that is time, At a persistent ability of solar higher. prevailing combination inflation wage labor. required field for and project. to of install not cost faster solutions products ideal costs do Rising our labor the the of of and number require install labor caused the provision The is customers to

I'll wrap about working up operational that some by are of on. we initiatives the speaking

of our the in and my ensure have people, to growth. to we Shoals that as President of One continued support processes is systems place jobs

of capable million annual have $XXX supporting revenue. of We an built already organization

Our is can million the an us billion to $XXX support $X organization focus building take a revenue. and in now that next year

initiatives: working and efforts. manufacturing focusing operations, leaders infrastructure our X development product I'm efficiency new that, sales the our of with strengthening our our do to implement To increasing

increasing step in of every carefully the our identify manufacturing our areas efficiency increase production automation are manufacturing reviewing KPIs establishing We and operations and where can waste. process-level throughput by data process, deploying to or reduce we that using

production we record dividends achieved efforts daily of the levels We saw fourth in quarter. when from early our

to process that have are achieved positioned open driving manufacturing plants success We should deeper other that locations. in replicate we our existing in will efficiencies by facilities automation decide we the well confident and to new be we

infrastructure key sales our in strengthening We are ways. X

help First, with us to a our more sales Macias, to CRO, deploy Ben how efficiently. operation to and better when building assess new add team new them is sales resources systems

team sales revenues make already segments. specific need is see operations manager, adding provide to per those faster delivering record decisions faster. the information account grow but markets even and revenue potential in we we salespeople Sales the growing Our by will to

and are satisfied is installation, upgrades to customer Second, replacements base. focused existing or our also Their we not initial growing but opportunities installations. customers dedicated are well on customer identify Shoals' with to products a to care goal installed building only organization ensure beyond sell our for

engineering innovation improve velocity. our the lines excited will focusing agile continuing development known by about and product drive to of including Implementing that President be are and to while principles with product agile I'm of Shoals is predictability for. our very KPIs concepts, future. thrilled Shoals embracing new We development time results-driven new innovation

to turn financial fourth results. now quarter discuss I'll who it XXXX Dominic, over will

the to everyone solar for in primarily solutions System XX% and volume prior continued versus benefited earlier on by XXX% our grew Jeff, Thanks, charging were that XX% total increased but $XX.X driven afternoon prior EV launched combine-as-you-go demand represented sales the revenue Fourth of Solutions versus million. system. revenue year-over-year in gains to was for increased period, reflecting call. The solar from year revenue market the quarter and solutions year. period also our good higher XX% share year the

basis primarily costs leverage increased compared prior to to profit to XXX% Solutions. of XX.X% period. in than in compared driven and Gross year XX.X% percentage the XXX fixed profit a $XX.X proportion the higher as on million System to points revenue period from million net $XX.X increased grew by a Gross year of more revenue prior

$XX.X same and period expenses expense driven planned $XX.X The administrative year. quarter by incentive connection million the expenses Fourth was general and in increase with during payroll hires. prior general year-over-year new the in compared were administrative higher to in million compensation and largely

quarter $XXX.X period. the Net in year connection million loss net significantly compared the noncash fourth was of in to make $XXX the had we TRA, income Dean quarter in of prior million agreement, Shoals termination the us in income million to cash the than Oaktree payments $XXX.X life, Over tax with and Oaktree TRA could million with a recorded Net founder, benefited the have the our gain Solon. that $X.X to receivable in from or its Mr. and required more

eliminated for significant the a future Solon, agreement terminating liability company. so the

partially margins, income the quarter Adjusted to of XX.X%, discussed reflecting EBITDA $XX.X million in higher year million fourth prior increased net $X.X $XX.X by expenses grew earlier. compared margin general and EBITDA the basis Adjusted the by increased in million the I to million impact compared $XX.X gross in to year-over-year approximately offset to period. period. Adjusted prior higher XXX the XXX% year administrative points to

million, generated we reduce cash outstanding $XX us our revolver. which under quarter, the amount from debt the allowed operations of of During to

the cash cash our to subject and to as capital working distributions we or moderate investments in continue with no TRA. are capital restrictions improving expect and generation associated longer We expenditures

we slower pipeline $XXX.X of in quarter. decline orders, of and As X% result XXXX, million awarded projects year-over-year the of decrease the and awarded of increase The had quarter-over-quarter. was backlog orders consecutive volume into XX, an a higher-than-expected shipment December and XX% had of in we quarterly conversion

the rose pace January. all-time of weeks Following our first during activity of levels record orders awarded and in the to customer few backlog slower the holidays,

we and range input of outlook. Turning to our in XX% our year XX% the $XXX current $XXX customers, full conditions expect from year-over-year. to be XXXX now on million revenue million, to up Based market to

million million. to $XX $XXX to expect and We of net adjusted range $XX in $XXX the income to adjusted range of million, EBITDA be the million in be to

in range, For be XX% XXXX, targeting full XXXX, quarter margin or due we gross in with particular consistent lower the mix product margin year year although that the full are may in given gross period. higher any to

as the to We support include will our the XXXX in continue as continued in talent HR, for sequentially care a $X to stock-based growth. ourselves to our million due as quarter larger anticipate will throughout invest scalable initiatives starting SG&A build-out finance compensation. position well and in roughly quarter growth This investments long-term will teams of grow step-up per customer in scale. We XXXX, we higher with SG&A to first

likely help set our you half the not our do provide will quarterly XXXX. in are I to we the expectations more pacing of to guidance. revenue That want XXXX second As in generated results, information provide majority Similar of a to we be aware, said, XXXX. expect bit around

we For year, that our EBITDA net the with XX% second expect in income adjusted the XXXX, XX% be first remaining generated revenue, the and half. approximately will the of adjusted half in of

as increase rates. by million $XX expenditures result in in outlook. the interest will year-over-year for Full the full of finally, growth $X Further, we expect a our expense growth to expected interest to line the to quarterly roughly we anticipate fall range And XXXX to higher million $XX that million rate revenue year year $XX million. with implied of annual is capital

Now back closing Jason for to remarks.

our like and I'd Shoals, their support. of for effectively us our Dominic. close employees confidence serve our to customers enabling again Thanks, for their by shareholders customers to in for continuous thanking our all

the record As EV in XXXX, started about could BLA new our performance penetrate beyond on opportunity from be and still to more we only for solar not core we we've products, a ahead. our move opportunity the growing Furthermore, products. excited

line product global reach. we is the extend demand With our as increasing building,

Shoals incredibly over the of Importantly, past that financially question has company been. the stronger is of the the that bright. I we power years I'm several There only platform. we've and accomplished has commercially, future realize Shoals what started will leave proud it extremely believe operationally to is full and no the ever than

And We'll you, questions. with I line that, your now time open thank everyone. the today. for appreciate

[Operator Instructions].

from comes Maheep Credit question first of The Suisse. Mandloi

UFLPA in the expected. David is than I guidance Maheep potential guys. Benjamin if wondering quarter, resolve on the there's revenue Congrats additional for should in This any Mandloi. was upside faster

this is Dominic. Thanks, So David.

of that awarded we're our of terms to that in the range orders revenue guidance, our terms In comfortable number. very guidance with given, we've and ability drive backlog,

of seen before, talked our As haven't we've significant a associated revenues. and with about panels projects we delay

the guidance to we've firm holding we're So that issued today.

of for ramped? more one that's about a we what manufacturing question about margins Can could margins. when bit Okay. you Great. And about facility your ramp-up the expect talk in little long-term and talk fully kind

Yes.

our to perspective, for implied get margin a from So for this year. $XXX million that a capacity we we number, ready built actually you out about guide production as see guidance in our

We and another are looking to us to expand like things at facilities geographic level and at really look and that. take further diversity

we've we but XX% to, guided like margin do a a really and long-term margin. EBITDA having guidance, we and said gross haven't believe what But XX% we is achievable, issued

continue keep we'll facilities. that mind to as And additional look we so in for

of The ROTH next from question comes Shen Philip MKM.

was the talk that if It reached would like I push record the about first seems there first that the to think what you I the record you even activity. and that you can number wondering in prepared January. ultimately, perhaps could was drivers bookings big I if of look in part you you and could share year, And a that fantastic. be of backlog expect is, like you remarks importantly, bookings backlog how think talk of what about weeks trend. also few the mentioned your in those

and upside. thanks. outflows last really That also of February. book-to-bill note we so a was a important share was the of What And numbers wound the That's years. quarter. when I you prior look We shipping in That had year, won't we product with the up consistent we where is an from to is Phil, fourth positive. and X.X. specific at $XXX January think had million, additional then year

shifted And we of expecting of from order some into were weeks the pipeline convert couple January. of the orders to that to first awarded

also so that So couple this. a 'XX we'd And just about having far, throughout X in. very trend those weeks, having by has discussion weeks of different be continued

the the market very have feel we about that of strongly we products those. and So adoption

Great.

that do XX%, backlog of when to percentage to you guidance like but your feel a get covered the year? you high that you currently? It be would is as be as the sounds And then that. it wanted so think you for backlog for the this could And that what in of expect recognized XX%, vast have think year, about majority

And then about, you asking question I perhaps may. also think backlog percentage think the what percentage maybe if -- but do if share, can one What by more, if I product of I UFLPA, be any? that impacted was might you

typically the turn issued the the revenue. thing and bell realize little XX-month we've we thing year. consideration of consistent. to unpack in me XXXX. of And into end that backlog orders with guidance really the said mean really million XX, that, main we Phil. see that December that, changing we've takes -- of little let a million expect The There's don't at is range backlog to a a it's So of curve really is bit that always bit before, main X-, $XXX that $XXX It's is window a all. the I but that awarded into that fully the at

still So go there some have things we get. are that

don't here might those limited. secure of forward in and orders orders being haven't in we year, go we'll year We found. to that more to this have the yet likelihood do to that into able We to. few percentage really we the next breakdown be get the we be what the visibility believe those secure if exact But months, of is more able some be issued additional as

that range guided revenue comfortable we're we've So this time, the at point in very with to.

with we products even if significant impact our on point, our we've panels installations said of and refused. in Projects ordering being the forward year slightly The previous this haven't not panels, a were quarters, have gone delayed. To business. last our UFLPA, panels I'm aware seen as

I think delays. there were just

saw released. more being in even I think panels QX, some we

this things the point and time, are We that in guidance of there's we've those think we've very at So all sight good provided. line the variation got separation from really that comfortable that we've or no given. with range to

Great. one One here. last

X.X, forth, X.X? and in taking bit a the in be could that overall relates of over it BLA? sales you the more be premium percentage your of to maybe talk color BLA you what As so price little you're might share that X.X getting think 'XX now original you can BLA And terms could orders about

Yes. Phil. launched and X.X about Thanks for point. globally the question, excited being this pretty We're at BLA quoting

mentioned, expect bundled in we quarter. solution. As itself second revenues the is first Remember, product a

volume portions XX% the what in on We excited ASP by expect ASP year. taken portions to the expect base. kit So the that out that the increase the are bundle upon a the by of depend of throughout are quoting XX% customer gates, we and selected to base. even And the continue of will the do about we're the customer based

out Jeff just that at XXXX, it Jason of add and Jeff kind when end a as Phil, quick. combination is to at to call real we BLA said beginning stated, because what at look X.X want X.X, the you Dominic One quoting of pointing product, that back of awarded we represent backlog would and I really the what here orders thing year. is, out recently I BLA this the the of started closed doesn't

book about the at that end upon specifically So this last end the -- is XXXX, year, looked the of range exactly at particular what the like question of Phil. on based

Dominic Okay. And you, then Jason. you. thank well. Best wishes Jeff to and as Thanks,

from comes question of Levy Truist Jordan Securities. next The

the segment lumpiness also segment. and in to thoughts mentioned you and just to know thoughts there as could getting some contributions kind Maybe start through how has been you 'XX. by from about wanted customer your move the that of But out your I demand that broad be in get your there. business I remarks, trending that solutions ramp on there just EV

Thanks, That's my baby. Jordan. Yes.

launched We It's seen. the last infrastructure products business. the EV year. excited that. It's year charging very us pretty that by uptake We XXXX very a certainly eMobility, the the remain about past area focus excited we've I'm about So and for bill. excited been about the bolstered in

in seeing of we business charging that which of poured primary billion our If the mentioned into you seeing and are adopted And in those, of areas and recall, close by corridor electrification itself being we're fleets, eMobility offering upticks we're school both quote initial volumes electrification. there's the being evolutionary some bus the primarily for to well. also $X.X as

we're where about excited at. very feel we So

As mentioned, still post launch. early it's

So begin product any with any new new a offering, going be with. to to it's bit lumpy business,

our then we more we more predictability a As bit more certainty may in details. and forecasting, get release

great. quick follow-up That's And rollout. just wire harness then as the a on

quarter that I BLA really were complementary. X.X think last products you mentioned

wire product of harness kind if curious sales harness first any BLA X.X. impact just on the wire So the on extension has for -- new

our affect bundle. -- wire stand-alone can it is sold as be system of is really kit. what's doesn't a sold management system management subset And a It the wire about or be as the the nice can bundled it

our it deployments. of optionality in a gives bit So quite us

The Castelli next from of question comes Morningstar. Brett

here just international XXXX thoughts to manufacturing your potentially expanding your about on -- ask and abilities manufacturing I want abroad. potentially in

Yes.

have excited international. with to how As And and we with the we're Australia We're start -- and that, at we we're quoting I Latin orders fulfill serve those at can about customers. looking our in volumes increasing mentioned, getting where EMEA. America, very best

being focus and as orders to the by to of to million. part our customers And take remarks, fulfill $XXX I goal able growth, in us where that is mentioned is the So my are. next on the

look take So starting we are a to at that.

would awarded is expect, They'll growing and orders through and to backlog the the pipeline quotes. revenue. then into transition you then as And

where about international the I at So timed just really markets and has that with mentioned. be that all reiterate, appropriately. we're But we're excited to to

been then just between your Any customer -- side, Okay. on you've on domestic to historically, mix EPC can the been think, it's I you solar headway developers us with specifically? And update heavy. able make

Yes.

customers that as call domestically. growing our that EPC X we're working the the top proud We've is and base XX well. customer EPCs primary got on Our to of

more with long-term and more developers. And throughout our entering trend with seeing MSAs other and certainty is more to flow lock expanding up are as one we're into us want gives interface order the that capacity EPCs years. directly We them,

That's great. of luck, Jason. Best

next Rusch of Oppenheimer. comes question The from Colin

activity rates at sense that things, the the looking overall Could far have a you X then outside of U.S. just so you're the just give and awards in close us been the made? quotation that

Yes.

haven't mention We what rates, remarks that I released prepared the than we're close year-over-year. did quoting of specific in XX% the but seeing greater is volumes

volume So have the to our close have released and of that not number specifics quotes related the those quotes we've rates. continues Don't to grow. and we released,

then And -- helpful. that's

customers that the those in these versus crossover how into there With renewables offering? on you're to execution So terms the in folks gotten, EV of new many who any that is terms that? you've offering for are selling moving EV of of space

Yes. charge our the made by EPCs Colin. are that an those in now option. I focus of operators, exploring question, the Most being that that decisions been are EV But directly of appreciate as that's the primary the interesting. It's point most market space. eMobility go-to-market seeing and we're in

the then migrate into start EPCs our As base be eMobility, as prepared well business we'll over call their accounts. expand then and to to them there

on We now. right crossover They're domestic growing much market. the solar haven't as focusing seen

The of Goldman Brian Sachs. question next Lee from comes

your quarter forward. like piece. break best piece have the you looks backlog the on guys Jason, jumped out. broke but late, I hope orders for echo others' in well, going It last the K, I missed you guess out best you might awarded this, wishes. it as a I filed, did you I'll versus sentiments little

converted guess aggressively this maybe in more sequentially, So last have quarter grew awarded I quarter. given and orders that backlog also backlog awarded some orders grew relative would big to modestly. expected modestly bit jump that I of a the

the can to with term? maybe quarter then traditional had seeing the have wrong you following? backlog there is in uptick big a changing my in translated And what in conversion, about you're backlog orders And uptick presumption is medium anything So talk a that level high bigger awarded follow-ups. some maybe should I near into a if actual just respect to

times a and is orders seen up. is Appreciate in. go that heard What excited that be robust about the we've I've And to but weeks quarter-to-quarter, question, year January Brian. We're may flags any at a Dominic -- first have We're adoption. to And timing trend the come cautionary can we're now about what Jason when up X. January attribute and awarded the and that's say orders week And very where what down of seeing of or a our looking awarded number continues had we're mentioned seeing. it back I timing. and don't through side product few is of into this backlog on

The thing -- just Brian, if I add... could only

that is things not quick. remarks, to awarded year, weeks at other that Dominic throw I'm like I'd and the of were what may missed couple levels from record into Two the jump if please there literally real you adding you in things to. perspective. exactly just new in Dominic, have were going orders mentioned But that, one a we of prepared Brian, his in already in backlog

I'm there out maybe longer partners a So a out bit of there, companies took time too a Christmas holiday. little bit obviously, of not a shift little there, some sure.

point another quarter obviously, is thing want out, had But the as only throughout almost well. that record million other that revenue I we yet of to $XXX quarter, not again covering particular

and excited weeks year. else want few the add there? transpired year excited Dominic, even where you a new the about more anything also to we ended into very about just what So

in going some I only delays to kind first of is it. million, in that really QX, was of say achieved bit the the was other that thing Yes, half when year. there the $XXX we The of was little a

saw run-up. a So we

bit little we're very guidance with a XXXX. strong pleased is we issue today that it for So pleased growth the the we're ultimately, trajectory. lumpy, have but to And for the very

bit guess years. given great. discussions look been as growth a year like where again, the basically faster just And of your you've And what last your would growth. you revenue about model a I the third targeted growth. you're as growth for like this some long helpful. in you these super talked to a And growth. about matching was second actually the in the pulling several that seen be great on the forward had is Okay. because past. we've year, number January. I than revenue This growth That's had QX The revenue row, has for market. guiding -- Great. new and I we'll think in in EBITDA revenue or investments itself in though, mean little and That's some to then XX% question we've and you're EBITDA just targeting covered areas EPS earnings

just model operating 'XX get then there ahead the point see more and comments you're a earnings Any your where opportunities growth? leverage you EBITDA be eventually growth revenue of some good leverage, for starting to or in where well might to around to

Sure.

is some guess, do have we how I Brian, So good margin in. expansion look, enough, good baked right? So

If you going drive before, to real have our have to right continue midpoint margin continue basis to some just line we the objective probably that our I've is stated make. as we top investments to of XXX guidance, look now growth, at of points And expansion. we're and

finance building much large we the remarks, human still prepared we're be to scalable, that become in resources accelerated have have to As in organization. I really a We build said out capabilities still organization. my a to larger filer

drive care growth. sales and that have investments investments we're making customer We to

looking would that drive to of number historically. I've we're to say So the that guided there's top a things line. I

think expenses much to fashion looking be the drive are SG&A expansion. for many that EBITDA But XX% space leveraged. have because margin fundamentally, are growth. really I'm to in rapid I will of in looking margin not we too drive opportunity to margins We There

we're expansion, pleased very margin with incorporate does that. guidance and our So

And in at still future, we're our eye things think I so prize. will trying the point the there a number we're but that be, from there's of opportunities to that where on keep

As how $XXX mentioned, million? Jeff we get next to do that

and to we up multiyear really the best for not I investments I'm that's but an tell looking back have modest Analyst Until right that's we looking So that all. guidance, we to expansion, on margins. make. have now. Day want always can continue you give I'm to

and Cowen with Company. comes question The Osborne next from Jeff

just international couple Can facility preparing so can talk X ones, build and long it how a times it a would much there. growth. take side, the new you you had brief, quick on million your cost? keep would how $XXX you of for But team, the next about alluded to I to of answers

end test, It I to what spectrum, could specifically he months if and that takes months be won't be lower facility? let outfit sign Dominic overall, the going in wishes about is X is to X real on cost. and that I'll it. to that's typically, from the lease final done produced begin of question and the address faster. But it talk If assembly it is to to. the

Is it CapEx? locations any for include CapEx that's safe maintenance to and new more not guidance the say does year the

to facility, No, time unproductive I in would does include site, say, and if that issued say for the were pick go CapEx guidance find argument, of up or going to we've another something. sake we organically Texas a

we would that the but discussed time. We may does perhaps contemplate where guidance unproductive haven't have some released that and be,

capital, also the facility necessary production and would guidance step-up to include spent start the machinery the year, to in outfitting racking get ready. being CapEx this The does start a which

we're I this all that's So is would of, that if include our guidance anything exception in facility something, doesn't with year that or and acquire go overseas a not obviously, it the going say to encompassing, number.

Helpful, Dominic. Got it.

ones. other quick X Just

final what be? your Mackenzie Wood you in or from any market could I share, out. I 'XX 'XX. you figures Do XX% But that know statistics you have expectations share were would back-of-the-envelope aren't think the On for

Jeff, data share our we Wood Yes. use market for Mackenzie the calculations.

if and release we based those we quarter, on based recall, you out year, data. our that in second last come As --

same expect year. this We the happen to

incremental numbers would expecting Mackenzie on on that overall side. based data, out midyear. say growth share do we good Wood after release 'XX the the come I the we're our news to EPC some gain So expect numbers, the and

so. It would seem

comments Just about following up another question, margin. on Brian's

you margin. guided to XX-ish gross So percent

around are launching You gross with in obviously all things grow than to EV that year, around had about and the QX the range it? very side? right just downside of potential or on EBITDA in of last faster here you depending least is products bigger to or did in maybe mix. that at maybe assuming dilutive -- the upside have what multiple XX% I'm the accretive printed the a on battery well, strong and basis XQ. that in results you more to think as trying points and of Or target new they and Is way newer margins understand, terms hundreds

Yes.

as be incurred, just haven't would unproductive getting I'd facility, as them on And We the say of things incur a I this released there. some may drag Anything in mentioned think launched One that just want additional we product line is recognize the to margins. have that you to fact couple expenses the you they're year. incurred. There's I you COGS. generically, capacity be a

additional So be there. some there investments could

of markets As utilization are the get labor, want that we need. we obviously wage our to to want labor, competitive. We able hourly We stay the to labor evaluate talent growing. we and be

from to some that investments there. some become So there we've doing things may we're insurance There health are done be that competitive. more

is the the kind of products, So for. scheme look of that new the that's in range we what things, grand minimum XX%

our lines things you. than we're are that and some mark, sure sense of targeting that that around we that, lower. makes XX% always Some want if that to But are there higher to make are product

of The from next Malloy question comes Johnson Rice. Martin

in I was hoping capital terms us you of maybe could refresh allocation.

be going all flow to obviously a lot free You're cash of generating here.

Sure.

the end we us. look we the we looking And look $XX So climbing, at million are -- I of allocation, believe, would left. have of is as at our like first interest priority, rates we with still for what capital at revolver that have year,

are to a the we'll with of cash There It's it. position. opportunities thrilled some about that problem that going be generate Board be that as to great are in best that We I'm have. discussing we're our we generating cash. utilization

loan term a this it associated The expire did with have that does associated penalty a it prepayment year. -- with

leverage the well. some do as ratio always But well. as really there opportunity time there's things is to improving over our So

business. additional looking drive ahead. -- growth to in And for I'm the go So ways

sorry, I'm No, go ahead.

I was know. use that just we'll time, flow, of to going you our to we're say But as point we have have let at discussions guidance. best in in about just this cash that pleased the

Harrison Kashy The from of next Sandler. Piper comes question

progress wondering then on EV you update an receptiveness charging the to just associated some maybe charging is revenues with the was how And on the speak much with business. Can could provide with XXXX if I market? the of color you us from business. the EV

has asking. for been strong. adoption you The Thank

segments bill. uptick Infrastructure fast That coming and volume has for quoting corridor from would National increased. bus Our there the the primary school Vehicle And electrification. charging. market seeing a in Electric the We're infrastructure be funds are fleet greatly definite

that of excited We in be we're before and haven't released specific that. states substantial XX say But overall, waiting with financials I'm because predictable numbers we're more to the yet for deployed in U.S. than to large them we projects. do

So demand and seeing we're is expectations, continued customer growth. exceeding overall,

for maybe looking Martin's follow-up speak on of of earlier million Thanks the looks Dom, 'XX, can working expectations Just XXXX? to question. $XX a for million capital it there, use $XX 'XX, at color to Jeff. you then And your cash, use like cash.

be capital about how on would think for just sort to color great. working So 'XX of any

Sure.

saw of that I we things. So did customer back year. an last We've some the their made sure, And about I implemented and one down made deposits. inventories the progress of also We've QX said -- to in opportunity in think these shared for some a said, talking come of dent the we've had started in as you receivables, from from things in fact, our huge was we peaks I've things. some and that quarter optimize earlier new

million, So our you're investments growth when in to, there's you're There's when always to for call working going guidance yes, capital. range whatever, $XXX million, there. working it, we a million company, going believe investments from capital, required $XXX be $XXX

inefficiencies. to DPO sales to worst we've that continue But inventories as of manage the also changed believe I that effectively growth. continue some We'll manage the vendor last our we We'll talked about agreements with we our have quarter. seen

So modest. would they'll be say I

I models 'XX. in DPO, inventory a those think from some modest all 'XX DSO, in if you see should turns, look at categories improvement your versus you

question Northland comes next from The Markets. Schafer Capital Donovan of

said call success believe so you also at First, point guys raceway on you third when EV to I it and did over so sort some was or the ask drive on I -- on. think fully time, I available in reported have the yet want not demonstrable that certified you of but the side, quarter

not, be I And is guess raceway question drive do if expect the available? my to when be you over now So available? would that

drive standards The certified Donovan. is and over available raceway UL Thanks, the quoted. and being

this product there's quarter. believe In fact, I shipping

that one. So about excited

concludes Thank the conference call. and you. session This question-and-answer today's

and you pleasant participating, Thank lines. day. for your disconnect have may You a

Thanks, everybody.