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spk06: At this time, I'd like to turn the conference call over to Megan Pease, Chief Legal Officer. Ma'am, please go ahead.
spk00: Thank you, Operator, and thank you, everyone, for joining us today. Hosting the call with me are CEO Jason Whitaker, PFO Philip Garden, and SVP of EV Solutions, Jeff Toner. On this call, management will be making projections or other forward-looking statements based on current expectations and assumptions, which are subject to risks and uncertainties. As you listen and consider these comments, you should understand that these statements, including the guidance regarding the fourth quarter of 2021 and the first quarter of 2022, are not guarantees of performance or results. Actual results could differ materially from our forward-looking statements if any of our assumptions are incorrect or because of other factors. These factors include, among other things, the risk factors described in our filings with the Securities and Exchange Commission. as well as economic and market circumstances, industry conditions, company performance and financial results, the COVID-19 pandemic, supply chain disruptions, availability and price of our components and materials, project cancellations, decreased demand for our products, and our policy and regulatory changes. Although we may indicate and believe that the assumptions underlying the forward-looking statements are reasonable, any of the assumptions could prove inaccurate or incorrect and therefore there can be no assurance that the results contemplated in the forward-looking statements will be realized. We caution that any forward-looking statement included in this discussion is made as of the date of this discussion and do not undertake any duty to update any forward-looking statements. Today's presentation also includes references to non-GAAP financial measures. You should refer to the information contained in the company's third quarter press release for definitional information and reconciliations of historical non-GAAP measures to the comparable financial measures. With that, let me turn the call over to Jason.
spk07: Thank you very much, Megan, and good afternoon, everyone. I'll start off with some highlights from the quarter, provide an overview of our acquisition of ConnectDV, and I'll wrap up with a progress report on our new EV business. Bill will then provide the financial details for the quarter and then turn it back over to me for an update on our outlook for the fourth and first quarters of 2022. During the third quarter, we continued to successfully convert customers to BLA. We now have four times as many customers using our system as we did at the time of our IPO earlier this year, and we don't see our market share gains slowing down. As of the end of the third quarter, we had 12 additional customers transitioning to our system. I couldn't be more pleased with customer conversion and the number of new customer prospects coming into our sales file. We have a lot more growth ahead of us. And we also made good progress during the quarter outside of our BLA with new products for solar. As of the end of the quarter, we were sold out of our new wire management solution. and we're currently manufacturing our first large order of our new IV curve benchmarking product. Both of these products have gross margins at or above our overall system solution margins, so we're very excited about their growth. The gains we are seeing in BLA, as well as the ramp of our new products for solar, was reflected in our record backlog and awarded orders of $270.7 million at the end of September. To put that number in perspective, we now have over 30% more backlog in awarded orders than we generated in revenues over the past 12 months. During the third quarter, we also completed our first acquisition, ConnectDV. ConnectDV is a California-based provider of solar and storage EBOS products. The acquisition accomplishes several things for Shoals. First, ConnectDV is a leader in eBOS for utility-scale battery energy storage systems, and their product line and expertise significantly strengthens our offerings for this rapidly growing market segment. ConnectDV was one of the first companies to introduce specialized eBOS for battery storage, and their products have been specified for some of the largest standalone storage projects in the U.S., We're very excited about what we can do with our products, leveraging our customer relationships and manufacturing cost structure. I should also mention that ConnectDV has a very strong expertise in AC solutions, which is another area we see an opportunity to introduce new products. Second, ConnectDV sells solar eBoss offerings to customers that we did not historically have relationships with. Making ConnectVV part of Shoals will allow us to convert these customers to our system more rapidly and accelerate our market share gains. Third, ConnectVV has excellent engineering talent that will help support our growth. The company's historical business model was to focus on more challenging projects where a significant amount of customization was required. They're very skilled at designing and specifying product. Having their engineers on the West Coast with our engineering team in Tennessee adds to our capability with two teams across time zones. We have more hours in the day to work with customers. The purchase price for ConnectBV was a combination of cash and stock and was not material to our financials. We expect the transaction to be accretive to our 2022 earnings per share. Now turning to our EV business. During the third quarter, we deployed our full EV solution set, skidded charging stations, quad charger, raceways, and EV BLA at a demonstration site outside of our headquarters. We are using the site to showcase our products for prospective customers. We've begun taking orders from customers and today have received orders from a charging network operator, a large investor-owned utility, and an EPC for one or more of our EV charging products. We expect to begin shipping products to our customers during the fourth quarter. The first public charging station to use our solution will be installed in the end of this year, and we expect that if it performs well, it could become the basis for the rollout of hundreds of more stations using our equipment. We remain very focused on the EV charging opportunity and are excited about the prospect of creating a significant business in EV to complement our core solar business. I'll now turn it over to Phil who will discuss our third quarter financial results.
spk09: Thank you, Jason. For the third quarter, revenues increased 14% versus the prior year period to 59.8 million, driven by an increase in revenue from solar components, as well as an increase in demand for solar EVOS generally and our combined as you go system solutions specifically. The strength in components revenue during the quarter was consistent with the expected change in mix driven by the addition of a significant number of new customers who typically start with component purchases. Sales of system solutions represented 65% of total revenue versus 70% in the prior year period. The acquisition of Connect TV closed on August 26, and its contribution during the quarter was immaterial. Prices across our product lines during the third quarter were comparable to the prior year. Gross margin in the third quarter was 36.4% compared to 39.3% in the prior year period. Due to a higher mix of component sales, which have lower margin than system solutions, as well as the impact of Connect PV during the quarter. Gross margins on components and system solution products were in line with prior periods. Connect PV's historical gross margins are lower than Shoal's historical gross margins, primarily due to the higher prices they pay for components used in their products. This results from the smaller size relative to Shoal's. Excluding the impact of Connect PV, gross margins would have been higher in the quarter. We expect to bring Connect PV's margins in line with Shoal's average gross margins as we migrate them to our suppliers. Third quarter general and administrative expenses were $10 million compared to $3.5 million in the prior year period. This increase was primarily a result of higher stock-based compensation, acquisition-related expenses for Connect PV, planned increased payroll expense due to higher headcount to support our growth and product initiatives, new public company costs, and non-recurring public offering expenses. Adjusted EBITDA for the third quarter was $16.9 million compared to $19.9 million in the prior year period. Adjusted net income was $11.6 million in the third quarter compared to $15.4 million in the prior year period. Please see the adjusted EBITDA and adjusted net income reconciliation tables in our third quarter press release for abridged ORGAP results. As of September 30th, 2021, we had backlog and awarded orders of $270.7 million, an increase of 101% year over year and 35% versus June 30th, 2021. The increase in backlog in awarded orders reflects continued robust demand for Shoals products from our customers.
spk07: Thanks, Phil. Now I'll provide an update on the current market environment in solar and how it is impacting our near-term results. The key challenge to our growth is the current supply chain environment. Our business model has effectively inflated us from most of the margin pressure that many of our peers are experiencing as a result of rising commodity prices. and the form factor of our products has limited the impact of shipping and logistics shortages on our business. But unfortunately, our customers still have to contend with these issues as they progress their projects. The result is very fluid delivery schedules with customers making frequent changes, both the product specifications and when they want the product on site. Recently, Some of our projects have been delayed to accommodate design updates as a result of panel changes or because other materials or components needed are not available. In both cases, the impact to us is to delay when we can produce and ship product, which will have the effect of shifting revenues that we expected to recognize in the fourth quarter of this year into the first quarter of next. While it is not our practice to provide quarterly guidance, we felt it was important to quantify for our shareholders the impact on our results of the changes that our customers have made, which is why we're providing our outlook for the next two quarters. Bill will take you through the numbers, but before I turn to him, I'd like to make three final points. First, this is truly a timing issue. We have not had a single order cancel, and candidly, our primary focus right now is making sure we have the capacity to deliver on the tremendous demand that we're seeing across our business. Second, we're not seeing any pressure on our margins. Our lower gross profit margin in Q3 is solely related to mix. We expected it and talked about it on our last call. I feel very good about our ability to continue to expand our margins based upon the order book we have in hand today. Third, this is a temporary situation. We have seen an extraordinary amount of disruption in the global supply chains. But it is clear to us that the market is slowly beginning to normalize. Suppliers are adapting. Customers are adapting. Logistics providers are adapting. This won't last forever. And now I'll turn it back to Phil to talk about the specifics of what we see for Q4 and Q1.
spk09: Based on what we are seeing in the market and feedback from our customers, we currently expect fourth quarter revenues to be in the range of $40 million to $50 million. We expect adjusted EBITDA to be in the range of $11 to $15 million and adjusted net income to be in the range of $3 million to $7 million. As for the first quarter of 2022, we expect revenues to be in the range of $71 million to $76 million. We expect adjusted EBITDA to be in the range of $22 million to $24 million, and adjusted net income to be in the range of $14 million to $17 million. While the mix of component sales is expected to remain high in the fourth quarter, which will reduce our gross margins in the quarter, We expect that to reverse in the first quarter of 2022, consistent with our outlook for adjusted EBITDA. Jason, back to you.
spk07: I'd like to close by thanking all of our customers for their commitment to Shoals, our employees for their contributions to our company's success, and our shareholders for their continuous support. With that, thank you, everyone, and I appreciate your time today. I'd like to ask the operator to open the line for questions.
spk06: Ladies and gentlemen, at this time, we'll begin the question and answer session. To ask a question, you may press star and then 1 using a touch-tone telephone. If you are using a speakerphone, we do ask that you please pick up the handset before pressing the keys to ensure the best sound quality. To withdraw your questions, you may press star and 2. Once again, that is star and then 1 to ask a question. We'll pause momentarily to assemble the roster. Our first question today comes from Brian Lee from Goldman Sachs. Please go ahead with your question.
spk01: Hey, guys. Thanks for taking the question. I appreciate the additional guidance here. I guess one of the questions I had was more around the gross margins. I know you had telegraphed that 3Q, the margins, would have a mixed impact. can you kind of talk to what you're seeing on the cost side and supply chain side of things outside of mix and whether or not any of that is impacting, you know, the view for gross margins in 4Q and into 1Q? And then I had a follow-up.
spk07: Hey, Brian, this is Jason speaking. Good to talk to you again. um you know i'll take that question so when you look at the margin profile uh first and foremost it is strictly a function of the mix shifting product and you know as we talked about before you know especially when you look at the success that our sales team has had and you know converting over customers to our full system bla when those customers are in the process of converting going from prospects and transition it's not uncommon for those initial product offerings to ultimately fall into that component category while we're working with them to transition them over.
spk01: Okay, fair enough. So it's all mix-related. And then I think you mentioned Connect PV. It's immaterial here in the near term, but it did impact margins in the quarter. Your margins would have been higher if you had not made that acquisition. Any sense of what that – magnitude of impact was on a, you know, basis point basis. And then is there going to be some connect PV margin headwind in the next couple of quarters? When do we start to see that maybe become more in line with the corporate average as you're as you're targeting?
spk09: Brian, I can answer that.
spk07: Go ahead, please.
spk09: Go ahead. Okay. Brian, that was approximately 100 basis points. We will. We're working through there. Suppliers are much higher cost. But we are transitioning those to our own suppliers. The impact, of course, there'll be a little bit, there'll be some impact in Q4 and rolling into Q1. But once again, their overall sales are immaterial. And we're integrating them into the Shoals manufacturing process quickly now. And so It'll be mitigated hopefully completely as we get through the first quarter.
spk01: Okay, fair enough. And maybe last one for me, and I'll pass it on. the timing here of the revenue. I know you're saying, Jason and Phil, that you haven't seen any orders be canceled. And I know that the Q1 guidance is supposed to give us some sense of what's slipping from the end of this year into the early part of next year. It would seem that There's still maybe, you know, $10 or $15 million of revenue that isn't getting captured across the two quarters that maybe, you know, we had been anticipating. So is all of the Q4 pushout being captured in Q1, or are we going to see some of that slip into the quarters following it? And just how would you kind of characterize your ability to capture – the risk of additional project slippage as we move through, you know, the next several quarters, not just into the early part of 22. Thanks, guys.
spk07: Yeah, no problem, Brian. So, you know, I'll take that. So looking at where we are, first of all, I'd like to point out that, you know, customer demand is very strong. You know, when you go back and look at our prepared remarks, quoting activity and average project size, we're up over 140%, 170% respectively. And when you consider our backlog and award orders up over 100% and 70% related to year-end 2020, you know, there's a lot of opportunity ahead. But when you look at, you know, Q4 and rolling into Q1, you know, we have a uniquely high level of demand book for Q1, even aside, you know, from the Q4 pushouts. So we're extremely comfortable with our particular forecast, and we've actually included potential for incremental industry headwinds in those particular numbers.
spk01: Okay. Thanks, guys.
spk07: I'll pass it on. Thanks, Ron.
spk06: Our next question comes from Colin Rush from Oppenheimer. Please go ahead with your question.
spk05: Thanks so much, guys. You know, with wage inflation at the labor level on these projects and in your own inflation, have you guys looked at, you know, where your relative value is in terms of labor savings and your pricing strategy here? Is there an opportunity for you to start increasing some prices as you displace more high-cost labor?
spk07: Yeah, that's a great question, Colin. You know, especially when you consider our full system solution offering abroad, you know, one of the key aspects is, you know, being able to provide real value with our offering in the form of savings and labor, not only the classification of labor but the amount of labor. So, you know, we're constantly evaluating that. But keep in mind, you know, when you look at where we are at this point in time, we're really focusing on growth. So, you know, from a project perspective, you know, we're keeping our pricing in line from that particular standpoint.
spk05: All right. And then, you know, just in terms of some of the smaller elements of the design that you guys have, you know, can you talk a little bit about the potential to diversify suppliers, you know, with some of these coatings around the wires or some of the clip systems? You know, certainly we're seeing shortages of basic materials, not just in metals, but all over the supply chain, but just want to understand, you know, how diverse and resilient you get your full supply chain to serve a global customer base.
spk07: Yeah, Colin, great question. So, you know, we have a vast AVL approved vendor list that we operate from. And, you know, one of the things that we're constantly doing is we're constantly adding to that particular list itself to be able to make sure that if something were to happen with one particular supplier, we could immediately pivot over to another. So that is something that we've been, you know, working on since day one, many, many, many years ago, and we continue to build that over time.
spk05: Okay, I'll take the rest offline. Thanks, guys.
spk07: Thanks, Collin.
spk06: Our next question comes from Kashi Harrison from Simmons Energy. Please go ahead with your question.
spk08: Good afternoon, guys, and thank you for taking the questions. Jason, you indicated that you expect delivery schedules to eventually normalize and in your prepared remarks, you said you're actually already seeing supply chains beginning to adjust. Can you go into maybe a little bit more detail on what you mean by that? Where are you seeing improvements in the supply chain? And then when do you expect things to maybe get a little bit closer back to normal?
spk07: That's a great question. So, you know, it's definitely hard to predict the exact timing. But when you take a look at the, you know, the raw material inputs that come into our facilities, you know, we are starting to see those normalized. And, you know, based upon, again, you know, the AVLs that we've actually built up, we're actually utilizing and going out and supporting more of those particular AVLs with additional orders to be able to de-risk the supply chain itself. But I think the key thing is working closely with your vendors themselves to make sure they understand what the actual expectations are so that they can make their changes based upon any of the inputs from a logistics perspective. You know, if it takes, let's just say, you know, five days longer to get somewhere, you know, be able to make those changes accordingly so that you can, you know, counteract that and actually receive the material when you need it so that ultimately we can make our commitments to our customers.
spk08: and what about from your customers uh perspective are you are you seeing them uh you know are they now able to get more components than before um have they are there are they starting to readjust or did you was that statement more in reference to you know inputs into your manufacturing capabilities yeah it's really hard to speak uh you know to all the exact uh you know items from a customer perspective
spk07: We were mainly just speaking more to our particular inputs in general.
spk08: Got it. Makes sense. And then my next question, the backlog increased 35% quarter over quarter, and the implied growth in bookings was quite pronounced. Is the increase just coming from these customers that you've been able to add, or is there something else going on that's driving such a meaningful increase over a quarter in bookings and backlog? And then how should we think about converting that backlog into revenue over the next several quarters or in the next several years? Thank you.
spk07: That's a great question. When you take a look at the contribution to backlog, it's really a function of several different things, one of which you pointed out, obviously, new customers that are coming on board, as well as supporting customers that we've been working with. But also, as we begin to win more of that particular pipeline from those customers, that also is very accretive to our backlog and award orders. And when you look at the timing of our particular backlog and award orders, it's very similar to what we've talked about in the past. you know, you're looking at roughly, give or take, you know, about a 12-month, you know, window, you know, nine to 12 months that we actually cover from that perspective. Some, you know, some particular projects may, you know, may actually span, you know, further than that, but that's a good, you know, rough average on what backlog looks like.
spk08: Helpful. Thank you.
spk06: Our next question comes from Mark Strauss from J.P. Morgan. Please go ahead with your question.
spk03: Yeah, good afternoon. Thanks for taking our questions. Jason, can you just comment about how kind of widely distributed the project timing issues are? Are these just a handful of larger projects that are causing kind of this near-term air bubble, or is it a broader issue?
spk07: You know, there's actually several projects, you know, larger projects that are out there. And I think a good example here, Mark, is when you take a look at a particular panel manufacturer, and let's say that one of our customers shifts from panel manufacturer A to panel manufacturer B. So it's the same form factor, same power levels. Just a simple shift like that could ultimately put us into a redesign that could cause project delays if for no other reason than the connector type itself, because we have to actually follow the connector's that are included with the panels themselves. But, you know, a large portion of what we're seeing, you know, it's a group of several projects that are out there, and a few of them are fairly large projects.
spk03: Okay. And can you remind me at least what kind of the contract language is as far as who's responsible for those projects? the expenses associated with those change orders. I mean, if you've already produced product and it's ready to go out the door and then you get a last minute change, is the customer bearing that cost?
spk07: Yeah, that's correct. You know, when you look at, you know, a couple of different things to point out, whenever there is a change on a particular project, a change order is associated with that and the customer is responsible for that. And one other thing I also want to point out, you know, based upon a margin perspective is, If, for example, that change itself requires additional, you know, raw material inputs like copper itself, that change order will also be reflected based upon the current, you know, COMEX price, not the COMEX price that was actually utilized at the initial receipt of PO.
spk03: Okay. Got it. Thank you.
spk06: Our next question comes from Phyllis Shen from Roth Capital Partners. Please go ahead with your question.
spk04: guys uh thanks for taking my questions um the first one is on uh 2022 i know you haven't provided official guidance but think back to your view of 2022 revenue and ebitda from your ipo and then think about it now so you know what we've seen since then is you know an accelerating of growth um offset in part by these project delays and change orders So as you think about the delta between what you saw a year and a half ago versus what you see now, are you incrementally more positive on your 2022 outlook or incrementally more concerned?
spk07: Yeah, that's a great question, Phil. So I can't specifically talk about 2022 outlook in general. We're only offering up information for Q4 and Q1, as you know. But one thing that I can tell you is I have never been more excited in what we've been able to accomplish specifically in solar as well as other areas I have been to date. And you can see that as a direct reflection when you look at the number of customers that we've converted over, the number of prospects that we've added in, and obviously the demand that we're getting, as you can see reflected in our backlog and award orders and the number of projects that we're quoting.
spk04: Okay, great. Thank you, Jason. And then as it relates to the upcoming reconciliation bill, there's the prevailing wage requirements to hit the 30% ITC. When you think about the change potentially in the labor pool for your customers, what I've heard is that you guys might be able to help reduce the labor. Because you've reduced the labor in the field, there actually might be more demand for your products and so forth, but wanted to understand if you have, if you can share your view on how that new potential requirement in the ITC for 30% may impact your business.
spk07: Yeah, Phil. So, you know, when you look at the prevailing wage requirement, you know, based upon, you know, the extension or the current ITC, it definitely helps, right? Because when you look at labor itself, you know, and the cost profile of labor, you know, whether it is, you know, general labor or licensed electrician in a prevailing wage or non-prevailing wage, anything that we can do to change that classification down, you know, significantly provides value to our customers themselves. So I think in that particular case, it'll provide even more additional value.
spk04: Okay, great. Thanks. And then one last one, if I may, as it relates to Connect TV, just in the past hour or so, I've done a few checks on the company and It seems like they may also offer traditional EBOS, and that their offering might be more labor-intensive than your offering. So I was wondering if you might be able to give us a little more color on the rationale beyond just energy storage, and then is part of it, for example, to acquire a customer base or something along those lines, or is there something that we might be missing that might be useful to understand? Thanks.
spk07: That's a good question. Really, when you look at the overlap, Phil, that traditional eBoss offering that we manufacture, that they also manufacture, there is overlap there. That's definitely not where the value is between the company. The value really comes in a lot of other synergies when you look at the team that they've assimilated. They have a lot of respect in the actual industry that we serve. They have phenomenal products from an energy storage perspective. As we talked about in our prepared remarks, you know, customers that they serve that we don't. So being able to, you know, merge the teams together to be able to, you know, continue to support, you know, the industry, both from a PV and a storage perspective with the combined product offerings that we have, you know, will definitely be, will definitely provide incremental value for our organization.
spk04: Great. Thanks for the coverage.
spk06: Our next question comes from Joseph Asha from JMP Securities. Please go ahead with your question.
spk10: Hi, and thanks. Just for the record, I'm with Guggenheim now. Hello, everybody. How's it going, Joseph? Hello. Just fine. Thanks. A couple questions. First, I know you said that the run rate on ConnectPB was de minimis, but are you able to give us some sense as to how much the Q1 outlook reflects their contribution from that company, or should we not be thinking that way?
spk07: Well, you know, I think, you know, first of all, you know, great question. You know, I want to further reiterate, you know, just like we've talked about, I'm very excited about, you know, the combined forces of ConnectBV and Shoals. But when you look at that forward outlook, you know, we've already begun integrating our operations together so that we can leverage our, you know, collective capacity, you know, with existing orders that we have. But if you take a look at, you know, the contribution, you know, to guidance, it was definitely immaterial.
spk10: Okay, great, thanks. And then secondly, your comment about people respeccing things is really, really interesting. So I've kind of got two sub-questions. The first, I would think, and Colin kind of alluded to this, if you're looking to take costs out, are you seeing people come back to you and say, hey, we want to do a complete BLA as opposed to just a component sale in an effort to get some of that – maybe get some of the labor cost out. And then the second question is, you know, on the panel front, if people are doing that, I would think that that would tend to be the thing that ends up, you know, having to push projects. So, you know, when you're seeing people talk about subbing panel suppliers out, I assume that also is pushing the project by a quarter or two.
spk07: Yeah, so great questions. Maybe I'll take these in reverse order. So when you talk about the panel supply itself, when you look at timing, obviously the timing that when there is a potential delay, it really varies depending upon what that delay looks like. If a customer is actually making a module change and they're going from one technology to another, that delay could be further out. And there are some instances where you know, a panel change itself is made and doesn't have any delay because, you know, the product offering just rolls right in. So there's really a combination, and it would be very hard to quantify, you know, the exact delay depending upon, you know, the changes that are made. And when you look specifically at BLA itself, I mean, you're spot on. I mean, that is the exact proposition, you know, that BLA brings when you look at the amount of savings that we get. And kind of pointing back to something we've talked about, you know, in prior conversations is, you're looking at just customers reported an average of 40% savings on labor, which is a remarkable amount when you look at the product itself.
spk10: Makes sense.
spk06: Thanks very much.
spk07: Thank you, Joseph.
spk06: Our next question comes from Moses Sutan from Barclays. Please go ahead with your question.
spk02: Hi, thanks for taking my question. Just going back to Connect PV and the margins. If I heard correctly, there was about 100 basis point impact on this quarter's margin from Connect PV, but also immaterial sales. So is there something in there that affected COGS from Connect PV? Are they at negative margins? How do we sort of bridge those two points?
spk09: Yeah, this is Philip. No, they are not at negative margins. They contribute positively to the bottom line, though minimally. Their cost structure is just different than ours. And a lot of their work is subcontracted out of what previously was. And we're working to bring that in-house. And there were minimal margins. But we are quickly going to be transitioning them to are much better cost structure, and we expect their products to be contributing approximately our margins or the Shoals' margins going forward in their products. So it'll be accretive to the business.
spk02: Got it. Got it. Thanks. And I think it was mentioned that some stock was issued. How much stock was issued to Connect TV?
spk09: To me, it was... 209,437 shares.
spk02: Perfect, perfect. And then just one last one for me. The mixed shift to components from systems affecting 3Q and 4Q, anything that was specifically discreet in there, so other than the effect of some of the EPC transitions and some of the mix that's bought initially, is there perhaps one big contract and they're just thinking it extended for more than a quarter, so just trying to get a sense of you know, how that sort of happened and then how we shipped back to a greater percentage from systems?
spk07: No, that's a great question. Again, kind of pointing out, you know, the mix shift in Q3 was something, you know, that we saw, we talked about on our last call. And obviously, you know, we see that mix shift, you know, continuing into Q4. You know, and kind of as we talked about before, you know, it's not necessarily just a contribution from one particular project. You know, there were, you know, a small handful of projects that actually did shift out, you know, that actually took, you know, that higher margin contribution with it from a BLA perspective.
spk06: Got it. Thank you. And, ladies and gentlemen, that will conclude today's question and answer session. I would now like to turn the conference call back over to Shoal's CEO, Jason Whitaker, for closing remarks.
spk07: I appreciate everybody's time today and look forward to having future conversations. Thank you very much.
spk06: Ladies and gentlemen, that does conclude today's conference call and presentation. We thank you very much for joining. You may now disconnect your lines.
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