Shoals reports record second quarter revenue and profit despite challenges – pv magazine USA

U.S. system balance specialist Shoals reported record second-quarter revenue and gross profit on higher component sales and strong demand for its combine harvester system.

From pv world magazine

Despite the headwinds the U.S. solar industry faced in the second quarter of 2022, following the Department of Commerce’s (DoC) announcement of a solar energy anti-dumping investigation in late March, the solar maker Balance of System (BoS) Shoals reported record revenue and gross profit, and gross margin within its target range.

The US provider of BoS solutions for solar infrastructure, battery storage and electric vehicle charging attributed the results to a significant number of new customers buying components, as well as strong demand for its combine harvester system .

Earlier this year, Shoals adjusted its guidance for the year due to the “difficult environment” caused by the DoC’s March 28 decision to act on a petition filed by California-based solar module maker Auxin Solar. He asked the DoC to review imports of solar panels from Chinese companies in Cambodia, Malaysia, Thailand and Vietnam, which resulted in an anti-dumping investigation. Despite this, Shoals recorded robust growth across its business.

“Demand for our combine solution continues to grow,” said Jason Whitaker, general manager of Shoals. “During the quarter, we converted four additional customers, bringing the total BLA [Shoals’ in-line fuse and wire manufacturing technology] customers at 29. Customer interest in our recently introduced products is strong, particularly in battery storage, cable management and electric vehicle charging.

Turning

According to Whitaker, the White House’s two-year tariff exemption for solar panels made in Cambodia, Malaysia, Thailand and Vietnam was “a turning point in customer sentiment, and we’ve seen order patterns normalize accordingly”. The company’s revenue increased 23% year-over-year to $73.5 million, driven by increases in its components and system solutions divisions.

Component-related revenue growth was driven by increased shipments of battery storage and solar products to a significant number of new customers, the company said. He noted that new customers typically purchase components first, before moving on to system solutions.

The company said the growth in system solutions revenue underscored strong demand for its broadcast harvesting system. Its system solutions division accounted for 77% of revenue in the quarter, compared to 86% a year earlier and 69% in the previous quarter.

Gross profit increased 9% to $28.6 million from $26.2 million the previous year. Gross margin as a percentage of revenue was 38.9%, compared to 43.8% in the same period a year earlier. The company attributed this to a higher mix of component sales in the quarter, as they have lower margins than system solutions, as well as higher raw material prices and logistics costs.

For its full-year outlook, Shoals still expects revenue to be between $300 million and $325 million, adjusted EBITDA between $77 million and $86 million, and adjusted net income between $45 million and $53 million. of dollars.

Earlier this year, Shoals opened a new manufacturing facility in Tennessee. It is expected to double the company’s manufacturing capacity as demand continues to grow. He said his BoS solutions have now been deployed on more than 20 GW of solar systems around the world.

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