Sunworks, Inc.

Good afternoon, and welcome to the SunWorks Third Quarter 2021 Earnings Call and Webcast. At this time, all participants have been placed on a listen-only mode, and the floor will be open for your questions and comments following the presentation. It is now my pleasure to turn the floor over to your host, Jeff Stanliss. Sir, the floor is yours.

Thank you, Operator. Good afternoon, everyone. And thank you all for joining SunWorks' third quarter 2021 earnings conference call. Participating on the call today are Galen Morris, Chief Executive Officer, Jason Bonfit, SunWorks' newly appointed Chief Financial Officer, and Paul McDonald, who, following Jason's appointment, transitioned from Interim CFO to Senior Vice President of Finance and Accounting. Before we start, I would like to remind everyone that during this call, management's remarks contain forward-looking statements which are subject to risks and uncertainties, and management may make additional forward-looking statements during the question and answer session. Therefore, the company claims the protection of the safe harbor for forward-looking statements that is contained in the Private Securities Litigation Reform Act of 1995. Actual results could differ materially from those contemplated by the forward-looking statements because of certain factors not limited to general economic and business conditions, competitive factors, changes in business strategy or development plans, the ability to attract and retain qualified personnel, and changes in legal and regulatory requirements. In addition, any projections as to the company's future performance represent management's estimates as of today, November 11, 2021. Sunworks assumes no obligations to update these projections in the future as market and business conditions may change. I would now like to turn the call over to Sunworks CEO, Galen Morris.

Thank you, Jeff. Good afternoon, everyone, and thank you for joining our call. This was a productive quarter for Sunworks as we continue to build out our team and integrate our platforms to enable us to scale profitably. As I discussed in the last quarterly conference call, as we have grown and matured as an organization, we have endeavored to improve all facets of our business. Progress continued in the third quarter as evidenced by a stronger and more professional marketing organization, as well as continued margin expansion reflecting more accurate estimating and improved execution. We are building an organization that can effectively scale, taking advantage of industry and regulatory tailwinds. We are encouraged by the proposed legislation to extend solar incentives for a meaningful period of time. If passed, this legislation would progress the ESG initiatives and associated mandates from CNI buyers to reduce reliance on fossil fuels, as well as offer lower cost renewable power to communities across the country. We are uniquely positioned to support both of these markets. First, on the residential side of our business, all new work is now being sold and performed under Solsius using their proven business processes. The availability of batteries, due to the supply chain challenges following the pandemic, continue to inhibit growth in our storage business, though our scale is enabling us to navigate this challenge better than many. Geographically, we are now offering residential solar storage solutions in 17 markets in 10 states. We have significantly expanded our presence in Texas, adding Laredo and Dallas during the third quarter. Additionally, we are assessing additional markets to enter into over the next several quarters. Geographic growth is a key initiative for some works, especially in the residential market, because the Solstice model enables us to quickly establish a presence in a new geography with limited initial cost. We continue to actively recruit for new sales channel partners throughout the United States to augment our other third-party sales partners. We believe our capabilities, notably our technology platform and proven ability to scale into new markets, will offer a compelling opportunity for sales channel partners seeking to expand their supply chain as well as support growth. Solcius recently launched a select program for new and existing sales channel partners, making us even more competitive on base install rates by streamlining what is included in the base rate to our most popular offerings and shifting more specialized selections to a list of add-ons. This will help us to increase the number and locations of our sales channel partners, rapidly expanding our channel revenue streams. To support our direct and indirect sales efforts, we continue to invest in comprehensive digital marketing activities and are increasing all of our marketing and branding efforts. These investments increase costs, but they are improving our lead generation capabilities and expanding our brand equity. Turning to our commercial and public sports businesses, margin improvement remains our key priority. As many of you know, lower margins were a significant challenge for SomeWorks in the past, and we are focused on accuracy in estimating and quoting, as well as enhancing our deployment execution to avoid costly project overruns. SomeWorks is now a margin-focused organization with compensation and evaluations based on margin, not just revenue. As a result, our estimated gross margin for public works already won, and our backlog is over 15%, and for commercial is now over 20%. Looking to the future, margins on our quoted work now exceed 20%. But I caution that until these projects are won, convert to backlog, and ultimately to revenue, this is speculative. It is, however, indicative of the progress we have made. In the near term, we continue to seek a national sales leader with the goal of injecting new energy and focus into our C&I sales efforts. We anticipate identifying that person by the end of the year. With that, I will ask Paul to provide more specifics related to our financial results in the quarter.