iSun, Inc.

Greetings and welcome to the ISUN Energy fourth quarter and full year 2022 financial results call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. Please note this conference is being recorded. I will now turn the conference over to your host, Mary Conway, you may begin.

Thank you, Operator, and good morning. We are pleased to welcome you to ISUN's conference call, where we will discuss financial and operating results for the fourth quarter and full year 2022. Jeffrey Peck, Chairman and Chief Executive Officer, will provide an update on the overall solar energy landscape and how our broad solar platform addresses opportunities there today, along with our outlook for 2023. John Sullivan, Chief Financial Officer, will provide an overview of the fourth quarter and full year 2022 financial results and operating performance. After our prepared remarks, we will open the lines to address any questions. As a reminder, the earnings release that was issued this morning, which can be found on ISUN's investor website at www.isunenergy.com, includes financial disclosures and reconciliations for non-GAAP financial measures. Any comments that we make on today's call may include forward-looking statements that refer to management's expectations or future predictions. These statements are made as of today, and management undertakes no obligation to update these forward-looking statements in the future. Such statements are subject to risks and uncertainties that could cause actual results to differ from management's expectations. With that, I will now turn it over to our CEO, Jeff Peck. Jeff?

Good morning, everyone. Thanks for joining us today. I'm happy to be here to share Iceland's recent progress and our plans for the coming year with the investment community. During our last call, we discussed some of the project delays we were facing due to CPG extensions and utility delays in our key markets. At the time, we were confident that these projects were just delayed and not canceled. And I'm excited to report that since that last call, and as we had expected, we have seen $70 million of our backlog transition to sign contracts and active projects. Due to this positive development and other factors that I will discuss today, I'm confident that we are executing on our strategic plan and advancing the company towards achieving our mission to accelerate the nation's adoption of solar energy. In the fourth quarter of 2022, we made significant advances across our operations. The proof of our consistent execution and focused approach is clear in our strong 2022 revenue, which increased by 69% from 2021 and exceeded our guidance as well as the street's guidance. However, before I comment on our fourth quarter and four-year results, I want to review our strategic plan and our progress in executing on it. Our strategic plan upon going public was based upon executing our three-pronged approach to growth within each segment of the solar and electrification industry. This approach included organic growth, growth via acquisitions, and growth of owned solar assets to generate recurring revenue. In just a few short years, we are now operating in the EV infrastructure, residential, P&I, and utility segments, and providing services to our customers from project origination to completion, as well as ongoing O&M services. During this period, we expanded geographically, made acquisitions, and made key investments, both internally and externally. These external investments were designed to supercharge our growth, create recurring revenue, and expand asset ownership. The internal investments were made to build our team and systems, the infrastructure we need to support our growth plans and enable us to effectively execute on the recurring revenue opportunities created by these external investments. As we said before, this platform approach is a competitive and differentiating advantage for us and positions ISUN for long-term, sustainable growth. As important and focused as we have been on growing our top line, we also know how important it is to have process improvement and drive higher efficiency throughout the organization. With that in mind, we have begun several recent initiatives to increase our efficiency. On the residential front, we have improved our sales and marketing efforts by streamlining our sales offering to the most popular and in-demand offerings for our customers, reducing skews, improving our inventory, and decreasing delays as customers confront what can be a new and complicated energy market. Earlier this year, we combined our Suncommon and Legacy commercial operations, expanding the sales efforts, streamlined our design and engineering process, and eliminated duplicative operational roles. We believe that these steps will create an improved customer experience, provide us better flexibility, and will expand our labor utilization that will speed our delivery of services to customers and increase our efficiency and enhance our margin performance over time. We also continue to implement a shared services model to drive down costs throughout the organization. John will provide greater details on how internal investments will prepare us for the growth ahead and provide these savings and efficiencies needed to the organization. Now moving to the fourth quarter of the full year of 2022. For the full year, our revenues increased by 69% to a record $76.5 million, above the revenue range we provided in November of 2022, despite the industry dynamics and exceeding the street's consensus. Our fourth quarter revenue of $25.9 million grew sequentially by 36% from the third quarter. On a year-over-year basis, fourth quarter 2022 revenue was down slightly from what was a strong fourth quarter in the prior year at $27 million, and that benefited from end-of-year transaction surge. Our gross margin was strong in the fourth quarter at 21.0%, and our full-year gross margin increased 680 basis points to 20.9% compared to 14.1% for the full year 2021. This partly reflects the higher proportion of our revenues from the residential segment where gross margins tend to be higher and better project performance in our C&I division. Moreover, we remain confident that as we scale, drive synergies and efficiencies throughout the organization, we will continue to generate margin expansion in 2023. As of December 31st, 2022, our total backlog was $164.2 million, and our pipeline reached 1.6 gigawatts of projects at the end of 2022, up an impressive 1.1 gigawatts from the end of 2021. These backlog and pipeline numbers underscore the extent of the increased customer demand we're experiencing across the business, as well as the effectiveness of our strategic initiatives that I'll focus on further in a moment. We're very proud of the team's hard work in attaining these results. Much of the success is due to the high level of customer satisfaction, specifically in the residential segment, which generates a large referral business, which creates a lower customer acquisition cost. We also have strong customer relationships developed over years of collaboration through the depth of knowledge and services available from our team. The depth of services and knowledge and strong customer relationships have led to many recent contracts. Let me share additional details on a few of them. The first is a $16.4 million development project transaction signed late last year, which includes both the sale of the developed project to a partner for $4.8 million, as well as the execution of an EPC contract valued at $11.6 million. This project is a concrete example of our ability to use internal expertise to develop an asset that we can then sell while retaining the implementation capabilities, bringing our end-to-end approach to bear. We're delighted with the success. We expect the final closing of the EPC contract to begin in the third quarter of 2023. Similarly, another recent award for 5.9 megawatts, part of a three-contract win for us secured late last year, demonstrates our ability to work with significant new partners for sizable community solar projects in northern New England. Deepening our relationships with current customers and introducing new customers to our collaborative approach is how our team operates. And this is a key element of our strategic plan to drive growth and achieve our company's mission. Again, we're pleased with the team's hard work in achieving these important milestones. Lastly, as you may have seen earlier this week, through our most recent contract wins, we gained seven new projects with two existing customers in different locations. The first series of five projects amounts to 6.5 megawatts and $5.1 million in value, while the second of the two significant CNI projects comprises of 6.0 megawatts and valued at $4.9 million. We're very pleased to continue this high pace of contract wins this year, especially since all of these are expected to begin this spring and be completed this year or early in 2024. I just want to share a few words about the impact of the climate legislation enacted last summer. We said repeatedly that we believe that the long-term support and stability provided by the legislation removes uncertainty and impediments to financing and constructing solar energy projects. This should make it easier for customers to make the necessary commitments to build the alternative energy our country needs. Quite specifically, our mission is to make clean, renewable energy simple and affordable, and the IRA's focus on ensuring access to alternative energy particularly for more economically vulnerable communities, align very well with our mission. We remain convinced that this legislation will afford ISM and the industry genuine benefits as we move forward, even as we await finalized language and rules from the Treasury Department regarding tax credits and other elements. While we had hoped that the rules would be finalized earlier this year, it appears that the timeline for finalization has been extended. Our entire industry is monitoring the situation closely And once new language and rules are disseminated, we expect to evaluate them closely and share any updates as they impact our operations this year. Nonetheless, we remain convinced that more specific rules and the removal of uncertainty will increase the value of solar assets, those in development as well as those under construction, which in our case will lead to a higher value of our pipeline as it spurs increased demand that we will address in 2024 and beyond. In 2023, considering all the evolving macroeconomics factors, we expect to continue to demonstrate strong growth and attain operational profitability, along with expanding margins. Thus, we are reaffirming our expectations for total revenue in fiscal year 2023 of between 95 to 100 million, reflecting a 24 to 31 percent increase in total revenues from 2022, along with gross margin expansion and full-year EBITDA profitability. With that, I'll turn the floor over to John. After John provides his update, I'll follow up with an update on our external investments designed to expand our pipeline and supercharge our growth before we open the line for questions. John?