Shoals Technologies Group, Inc.

Good afternoon, and welcome to Shoals Technologies Group's fourth quarter 2022 earnings conference call. Today's call is being recorded, and we have allocated one hour for prepared remarks and Q&A. At this time, I would like to turn the conference over to Megan Peet, Chief Legal Officer for Shoals Technologies Group. Thank you. You may begin.

Thank you, Operator, and thank you, everyone, for joining us today. Hosting the call with me are CEO Jason Whitaker, President Jeff Tonar, and CFO Dominic Mertes. 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 full year 2023, are not guarantees of performance or results. Actual results can 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, decreased demand for our products, policy and regulatory changes, industry conditions, current macroeconomic events, supply chain disruptions, and availability and price of our components and materials. 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 assurances 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 the 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 fourth 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.

Thank you very much, Megan. Good afternoon, everyone. Before I make my formal remarks, I would like to thank our employees, customers, vendors, and shareholders who have each played a role in the tremendous success that Shell has achieved over the past several years. Without your contributions and support, we would not have the company that we do today. I'll start off with some key highlights from our fourth quarter and four-year results, and then discuss the progress on our CEO transition. Following that, I'll turn it over to Jeff, who will provide an update on our business, growth initiatives, current market conditions, and operational focus areas for this year. Dominic will then wrap up with an overview of our financial results for the fourth quarter and outlook for 2023. before we open the lines for questions. Shoals set new records for revenue, gross profit, adjusted EBITDA, and adjusted net income in both the fourth quarter and full year. Compared to the prior year periods, fourth quarter and full year revenue grew 97% and 53% respectively. The increase in revenue was driven by growing demand for solar and EV and continued share gains of our product. The strength of demand for our products is underscored by the fact that Shoal's annual revenue growth has increased each year since we've been public, despite having more than doubled revenue over the past three years. Versus the same period last year, fourth quarter gross margin increased more than 950 basis points to 42.7%, and adjusted EBITDA margin increased approximately 840 basis points to 31.8%. The margin expansion we achieved in the fourth quarter was the result of greater leverage on fixed costs driven by higher sales volumes and increased proportion of revenues attributable to our combine-as-you-go solution. Now turning to an update on our CEO transition. In November, Shoals announced that I would be stepping down from my role as CEO this year for health reasons. My last day with the company will be March 15th. As previously announced, the company has appointed Shoals President Jeff Tonar as interim CEO. Jeff was previously SVP of EV Solutions and led the successful launch of our EV Solutions business. Prior to Shoals, Jeff held senior management positions with Fortune 100 companies and co-founded or led several startups, including GreenLots, which was acquired by Shoals. In his new role as president, Jeff is responsible for global sales, product development, engineering, and operations. He and his team are accountable for ensuring the operational milestones required to achieve the company's strategic goals are met. The Board is currently working with Spencer Stewart to vet several highly qualified candidates and intends to select a permanent CEO following completion of an extensive search and vetting process. With that update, I'll turn it over to Jeff.