Cover
Cover - shares | 9 Months Ended | |
Sep. 30, 2021 | Nov. 08, 2021 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2021 | |
Document Transition Report | false | |
Entity File Number | 001-39942 | |
Entity Registrant Name | Shoals Technologies Group, Inc. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 85-3774438 | |
Entity Address, Address Line One | 1400 Shoals Way | |
Entity Address, City or Town | Portland | |
Entity Address, State or Province | TN | |
Entity Address, Postal Zip Code | 37148 | |
City Area Code | (615) | |
Local Phone Number | 451-1400 | |
Title of 12(b) Security | Class A Common Stock, $0.00001 Par Value | |
Trading Symbol | SHLS | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | false | |
Entity Shell Company | false | |
Amendment Flag | false | |
Entity Central Index Key | 0001831651 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2021 | |
Class A Common Stock | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 104,179,939 | |
Class B Common Stock | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 62,664,521 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Current Assets | ||
Cash and cash equivalents | $ 14,189 | $ 10,073 |
Accounts receivable, net | 44,588 | 27,004 |
Unbilled receivables | 10,554 | 3,794 |
Inventory, net | 27,832 | 15,121 |
Other current assets | 11,706 | 155 |
Total Current Assets | 108,869 | 56,147 |
Property, plant and equipment, net | 14,358 | 12,763 |
Goodwill | 69,321 | 50,176 |
Other intangible assets, net | 67,508 | 71,988 |
Deferred tax asset | 121,545 | 0 |
Other assets | 1,204 | 4,236 |
Total Assets | 382,805 | 195,310 |
Current Liabilities | ||
Accounts payable | 18,664 | 14,634 |
Accrued expenses | 15,112 | 5,967 |
Long-term debt—current portion | 2,000 | 3,500 |
Total Current Liabilities | 35,776 | 24,101 |
Revolving line of credit | 60,140 | 20,000 |
Long-term debt, less current portion | 190,136 | 335,332 |
Payable Pursuant to the Tax Receivable Agreement | 107,880 | 0 |
Total Liabilities | 393,932 | 379,433 |
Commitments and contingencies | ||
Stockholders’ Deficit / Members’ Deficit | ||
Members’ deficit | (184,123) | |
Preferred stock, $0.00001 par value - 5,000,000 shares authorized; none issued and outstanding as of September 30, 2021 | 0 | |
Additional paid-in capital | 92,149 | |
Accumulated deficit | (91,296) | |
Total stockholders’ equity attributable to Shoals Technologies Group, Inc. / members' deficit | 855 | |
Non-controlling interests | (11,982) | |
Total stockholders’ deficit / members’ deficit | (11,127) | |
Total Liabilities and Stockholders’ Deficit / Members’ Deficit | 382,805 | $ 195,310 |
Class A Common Stock | ||
Stockholders’ Deficit / Members’ Deficit | ||
Common stock | 1 | |
Class B Common Stock | ||
Stockholders’ Deficit / Members’ Deficit | ||
Common stock | $ 1 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) | Sep. 30, 2021$ / sharesshares |
Preferred stock, par value (in USD per share) | $ / shares | $ 0.00001 |
Preferred stock authorized (in shares) | 5,000,000 |
Preferred stock issued (in shares) | 0 |
Preferred stock outstanding (in shares) | 0 |
Class A Common Stock | |
Common stock, par value (in USD per share) | $ / shares | $ 0.00001 |
Common stock authorized (in shares) | 1,000,000,000 |
Common stock issued (in shares) | 104,179,939 |
Common stock outstanding (in shares) | 104,179,939 |
Class B Common Stock | |
Common stock, par value (in USD per share) | $ / shares | $ 0.00001 |
Common stock authorized (in shares) | 195,000,000 |
Common stock issued (in shares) | 62,664,521 |
Common stock outstanding (in shares) | 62,664,521 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Revenue | $ 59,840 | $ 52,598 | $ 165,166 | $ 136,765 |
Cost of revenue | 38,071 | 31,909 | 98,444 | 85,061 |
Gross profit | 21,769 | 20,689 | 66,722 | 51,704 |
Operating Expenses | ||||
General and administrative expenses | 10,031 | 3,515 | 26,865 | 15,390 |
Depreciation and amortization | 2,175 | 2,069 | 6,305 | 6,194 |
Total Operating Expenses | 12,206 | 5,584 | 33,170 | 21,584 |
Income from Operations | 9,563 | 15,105 | 33,552 | 30,120 |
Interest expense, net | (3,582) | (104) | (10,911) | (601) |
Tax receivable agreement liability adjustment | (2,014) | 0 | (3,678) | 0 |
Loss on debt repayment | 0 | 0 | (15,990) | 0 |
Income before income taxes | 3,967 | 15,001 | 2,973 | 29,519 |
Income tax benefit | 1,309 | 0 | 3,123 | 0 |
Net income | 5,276 | 15,001 | 6,096 | 29,519 |
Less: net income attributable to non-controlling interests | 2,790 | 0 | 1,911 | 0 |
Net income attributable to Shoals Technologies Group, Inc. | $ 2,486 | $ 15,001 | $ 4,185 | $ 29,519 |
Earnings per share of Class A common stock: | ||||
Basic (in USD per share) | $ 0.02 | |||
Diluted (in USD per share) | $ 0.02 | |||
Weighted average shares of Class A common stock outstanding: | ||||
Basic (in shares) | 101,890 | |||
Diluted (in shares) | 102,251 | |||
Class A Common Stock | ||||
Earnings per share of Class A common stock: | ||||
Basic (in USD per share) | $ 0.02 | |||
Diluted (in USD per share) | $ 0.02 | |||
Weighted average shares of Class A common stock outstanding: | ||||
Basic (in shares) | 101,890 | |||
Diluted (in shares) | 102,251 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Changes in Members' / Stockholders' Equity (Deficit) (Unaudited) - USD ($) $ in Thousands | Total | Members' Deficit | Common Stock | Common StockClass A Common Stock | Common StockClass B Common Stock | Additional Paid-In Capital | Accumulated Deficit | Non-Controlling Interest |
Members' equity at beginning of period at Dec. 31, 2019 | $ 149,906 | |||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Net income | 9,295 | |||||||
Member distributions | (214) | |||||||
Equity-based compensation | 0 | |||||||
Members' equity at end of period at Mar. 31, 2020 | 158,987 | |||||||
Members' equity at beginning of period at Dec. 31, 2019 | 149,906 | |||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Net income | $ 29,519 | |||||||
Members' equity at end of period at Sep. 30, 2020 | 175,288 | |||||||
Members' equity at beginning of period at Mar. 31, 2020 | 158,987 | |||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Net income | 5,223 | |||||||
Member distributions | 0 | |||||||
Equity-based compensation | 6,704 | |||||||
Members' equity at end of period at Jun. 30, 2020 | 170,914 | |||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Net income | 15,001 | 15,001 | ||||||
Member distributions | (11,142) | |||||||
Equity-based compensation | 515 | |||||||
Members' equity at end of period at Sep. 30, 2020 | 175,288 | |||||||
Members' equity at beginning of period at Dec. 31, 2020 | (184,123) | (184,123) | ||||||
Balance at beginning of period (in shares) at Dec. 31, 2020 | 0 | 0 | ||||||
Balance at beginning of period at Dec. 31, 2020 | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Effect of Organizational Transactions | 0 | 181,448 | $ 1 | $ 1 | (92,806) | (88,644) | ||
Effect of Organizational Transactions (in shares) | 81,977,751 | 78,300,817 | ||||||
Issuance of Class A common stock sold in IPO/follow-on offering, net of underwriting discounts and commissions and offering costs (in shares) | 11,550,000 | (5,234,210) | ||||||
Issuance of Class A common stock sold in IPO/follow-on offering, net of underwriting discounts and commissions and offering costs | 141,164 | 70,188 | 70,976 | |||||
Equity-based compensation and recognized subsequent to the Organizational Transactions | 1,392 | 1,392 | ||||||
Activity under stock compensation plan (in shares) | 11,941 | |||||||
Activity under stock compensation plan | (137) | (687) | 550 | |||||
Deferred tax adjustment related to Tax Receivable Agreement | 7,180 | 7,180 | ||||||
Members' equity at end of period at Mar. 31, 2021 | 0 | |||||||
Balance at end of period (in shares) at Mar. 31, 2021 | 93,539,692 | 73,066,607 | ||||||
Balance at end of period at Mar. 31, 2021 | (42,858) | $ 1 | $ 1 | 78,073 | (98,340) | (22,593) | ||
Members' equity at beginning of period at Dec. 31, 2020 | (184,123) | (184,123) | ||||||
Balance at beginning of period (in shares) at Dec. 31, 2020 | 0 | 0 | ||||||
Balance at beginning of period at Dec. 31, 2020 | $ 0 | $ 0 | 0 | 0 | 0 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Net income | 6,096 | |||||||
Distributions to Non-controlling interest | (4,800) | |||||||
Members' equity at end of period at Sep. 30, 2021 | 0 | |||||||
Balance at end of period (in shares) at Sep. 30, 2021 | 104,179,939 | 62,664,521 | ||||||
Balance at end of period at Sep. 30, 2021 | (11,127) | $ 1 | $ 1 | 92,149 | (91,296) | (11,982) | ||
Members' equity at beginning of period at Mar. 31, 2021 | 0 | |||||||
Balance at beginning of period (in shares) at Mar. 31, 2021 | 93,539,692 | 73,066,607 | ||||||
Balance at beginning of period at Mar. 31, 2021 | (42,858) | $ 1 | $ 1 | 78,073 | (98,340) | (22,593) | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Net income | 9,154 | 4,558 | 4,596 | |||||
Equity-based compensation and recognized subsequent to the Organizational Transactions | 1,955 | 1,955 | ||||||
Activity under stock compensation plan (in shares) | 5,872 | |||||||
Activity under stock compensation plan | 0 | (857) | 857 | |||||
Distributions to Non-controlling interest | (2,973) | (2,973) | ||||||
Reallocation of non-controlling interest | 0 | (288) | 288 | |||||
Members' equity at end of period at Jun. 30, 2021 | 0 | |||||||
Balance at end of period (in shares) at Jun. 30, 2021 | 93,545,564 | 73,066,607 | ||||||
Balance at end of period at Jun. 30, 2021 | (34,722) | $ 1 | $ 1 | 78,883 | (93,782) | (19,825) | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Net income | 5,276 | 2,486 | 2,790 | |||||
Purchase of LLC Interests and Class B common stock (in shares) | (10,402,086) | |||||||
Purchase of LLC Interests and Class B common stock | (281,064) | (281,064) | ||||||
Issuance of Class A common stock sold in IPO/follow-on offering, net of underwriting discounts and commissions and offering costs (in shares) | 10,402,086 | |||||||
Issuance of Class A common stock sold in IPO/follow-on offering, net of underwriting discounts and commissions and offering costs | 281,064 | 281,064 | ||||||
Equity-based compensation and recognized subsequent to the Organizational Transactions | 3,057 | 3,057 | ||||||
Activity under stock compensation plan (in shares) | 22,852 | |||||||
Activity under stock compensation plan | 0 | (1,200) | 1,200 | |||||
Deferred tax adjustment related to purchase of LLC Interests in follow-on offering | 11,031 | 11,031 | ||||||
Deferred tax adjustment related to ConnectPV LLC conversion | (405) | (405) | ||||||
Distributions to Non-controlling interest | (1,864) | (1,864) | ||||||
Reallocation of non-controlling interest | 0 | (5,717) | 5,717 | |||||
Issuance of Class A common stock in connection with an acquisition (in shares) | 209,437 | |||||||
Issuance of Class A common stock in connection with an acquisition | 6,500 | 6,500 | ||||||
Members' equity at end of period at Sep. 30, 2021 | $ 0 | |||||||
Balance at end of period (in shares) at Sep. 30, 2021 | 104,179,939 | 62,664,521 | ||||||
Balance at end of period at Sep. 30, 2021 | $ (11,127) | $ 1 | $ 1 | $ 92,149 | $ (91,296) | $ (11,982) |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Cash Flows from Operating Activities | ||
Net income | $ 6,096 | $ 29,519 |
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | ||
Depreciation and amortization | 7,345 | 7,017 |
Amortization/write off of deferred financing costs | 5,692 | 31 |
Equity-based compensation | 6,404 | 7,219 |
Provision for slow-moving inventory | 435 | 488 |
Deferred taxes | 640 | 0 |
Tax receivable agreement liability adjustment | 3,678 | 0 |
Gain on sale of assets | 61 | 0 |
Changes in assets and liabilities, net of business acquisition: | ||
Accounts receivable | (12,271) | (1,087) |
Unbilled receivables | (6,760) | (6,076) |
Inventory | (8,505) | (2,953) |
Other assets | (6,904) | 670 |
Accounts payable | (5,198) | 285 |
Accrued expenses | 2,608 | 3,002 |
Net Cash Provided by (Used in) Operating Activities | (6,679) | 38,115 |
Cash Flows Used In Investing Activities | ||
Purchases of property, plant and equipment | (2,483) | (2,786) |
Acquisition of a business, net of cash acquired | (12,909) | 0 |
Net Cash Used in Investing Activities | (15,392) | (2,786) |
Cash Flows from Financing Activities | ||
Member / non-controlling interest distributions | (4,837) | (11,356) |
Employee withholding taxes related to net settled equity awards | (137) | 0 |
Deferred financing costs | (94) | 0 |
Payments on term loan facility | (152,250) | 0 |
Proceeds from revolving credit facility | 40,140 | 0 |
Payments on senior debt - term loan | 0 | (21,810) |
Proceeds from issuance of Class A common stock sold in an IPO, net of underwriting discounts and commissions | 154,521 | 0 |
Proceeds from issuance of Class A common stock in follow-on offering, net of underwriting discounts and commissions | 281,064 | 0 |
Purchase of LLC Interests with proceeds from follow-on offering | (281,064) | 0 |
Payment of debt acquired in acquisition | (1,537) | 0 |
Deferred offering costs | (9,619) | 0 |
Net Cash Provided by (Used in) Financing Activities | 26,187 | (33,166) |
Net Increase in Cash and Cash Equivalents | 4,116 | 2,163 |
Cash and Cash Equivalents—Beginning of Period | 10,073 | 7,082 |
Cash and Cash Equivalents—End of Period | 14,189 | 9,245 |
Supplemental Cash Flows Information: | ||
Cash paid for interest | 7,683 | 631 |
Cash paid for taxes | 1,176 | 0 |
Non-cash financing activities: | ||
Reclassification of deferred offering costs to additional paid-in capital | 3,736 | 0 |
Initial establishment of deferred tax assets | 49,049 | 0 |
Initial establishment of amounts payable under tax receivable agreement | 41,692 | 0 |
Initial capital contribution related to tax receivable agreement | 7,178 | 0 |
Income tax receivable from merger due to former owner | 3,842 | 0 |
Establishment of deferred tax assets from follow-on offering | 73,541 | 0 |
Establishment of amounts payable under tax receivable agreement from follow-on offering | 62,510 | 0 |
Capital contribution related to tax receivable agreement from follow-on offering | 11,031 | 0 |
Deferred tax asset and additional paid-in capital from ConnectPV | 405 | 0 |
Class A common stock issued in ConnectPV acquisition | $ 6,500 | $ 0 |
Organization and Business
Organization and Business | 9 Months Ended |
Sep. 30, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Business | Organization and Business Shoals Technologies Group, Inc. (the “Company”) was formed as a Delaware corporation on November 4, 2020 for the purpose of facilitating an initial public offering ("IPO") and other related organizational transactions to carry on the business of Shoals Parent LLC and its subsidiaries (“Shoals Parent”). Shoals Parent is a Delaware limited liability company formed on May 9, 2017. The Company is headquartered in Portland, Tennessee and is a manufacturer of electrical balance of systems (“EBOS”) solutions and components related to solar fields selling to customers across the United States and internationally. Shoals Parent, through its wholly-owned subsidiaries, Shoals Intermediate Holdings LLC (“Intermediate”), Shoals Holdings LLC (“Holdings”) which owns five other subsidiaries through which it conducts substantially all operations: Shoals Technologies, LLC, Shoals Technologies Group, LLC, Solon, LLC, Shoals Structures, LLC and Shoals Connect LLC (collectively “Shoals”). Shoals Parent acquired Shoals on May 25, 2017. On August 26, 2021, the Company acquired 100% of the stock of ConnectPV, Inc. (“ConnectPV”) with cash and the issuance of Class A common stock. The acquisition was accounted for as a business combination and following the acquisition, the Company immediately converted ConnectPV to a limited liability company (Shoals Connect LLC) and contributed the entity to Shoals Parent, LLC through a series of transactions – see Note 3. Initial Public Offering On January 29, 2021, the Company closed an IPO of 11,550,000 shares of Class A common stock at a public offering price of $25.00 per share, including shares issued pursuant to the underwriters' over-allotment option. The Company received $278.8 million in proceeds, net of underwriting discounts and commissions of $9.9 million, which was used to purchase 6,315,790 newly-issued membership interests (the “LLC Interests”) from Shoals Parent and 5,234,210 LLC Interests from the founder and Class B unit holder in Shoals Parent at a price per interest equal to the IPO price of $25.00 per share. Organizational Transactions In connection with the IPO, the Company and Shoals Parent completed a series of transactions (the "Organizational Transactions") including the following: • the limited liability company agreement of Shoals Parent was amended and restated to, among other things, (i) provide for a new single class of common membership interests or the LLC Interests in Shoals Parent, (ii) exchange all of the then existing membership interests of the holders of Shoals Parent membership interests for LLC Interests and (iii) appoint the Company as the sole managing member of Shoals Parent; • the Company's certificate of incorporation was amended and restated to, among other things, (i) provide for Class A common stock with voting and economic rights (ii) provide for Class B common stock with voting rights but no economic rights and (iii) issue 78,300,817 shares of Class B common stock to the former Class B and Class C members of Shoals Parent (the “Continuing Equity Owners”) on a one-to-one basis with the number of LLC Interests they own; • the acquisition, by merger, of Shoals Investment CTB or the former Class A member of Shoals Parent (the "Class A Shoals Equity Owners"), for which the Company issued 81,977,751 shares Class A common stock as merger consideration (the "Merger"). Immediately following the completion of the IPO and Organizational Transactions, the Company owned 56.14% of Shoals Parent. The Continuing Equity Owners owned the remaining 43.86% of Shoals Parent. Follow On Offering / Tax Receivable Agreement On July 16, 2021, the Company completed a follow-on offering consisting of 4,989,692 shares of Class A common stock offered by the selling shareholders and 10,402,086 shares of Class A common stock offered by the Company. Following the closing of this offering, Oaktree Power Opportunities Fund IV (Delaware) Holdings, L.P. no longer beneficially owns any shares of our common stock. The Company used the proceeds of the sale of Class A common stock to purchase an equal number of LLC Interests and Class B common stock from our founder and management. The Company obtained an increase in its share of the tax basis of the assets of Shoals Parent when LLC Interests and Class B common stock were redeemed or exchanged. This increase in tax basis may have the effect of reducing the amounts that the Company would otherwise pay in the future to various tax authorities. The increase in tax basis may also decrease gains (or increase losses) on future dispositions of certain capital assets to the extent tax basis is allocated to those capital assets. The exchange of 10,402,086 LLC Interests and shares of Class B common stock triggered a tax basis increase subject to the provisions of the Tax Receivable Agreement. In the third quarter of fiscal year 2021, the Company recognized a deferred tax asset in the amount of $73.5 million, a corresponding increase in the tax receivable agreement liability of $62.5 million, representing 85% of the tax benefits and $11.0 million of additional-paid-in capital. |
Summary of Accounting Policies
Summary of Accounting Policies | 9 Months Ended |
Sep. 30, 2021 | |
Accounting Policies [Abstract] | |
Summary of Accounting Policies | Summary of Accounting Policies Basis of Accounting and Presentation The condensed consolidated financial statements have been prepared on the accrual basis of accounting in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). Principles of Consolidation The condensed consolidated financial statements include the accounts of the Company and its subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. Non-controlling Interest The non-controlling interest on the condensed consolidated statement of operations represents the portion of earnings or loss attributable to the economic interest in the Company's subsidiary, Shoals Parent, held by the Continuing Equity Owners. Non-controlling interest on the condensed consolidated balance sheet represents the portion of net assets of the Company attributable to the Continuing Equity Owners, based on the portion of the LLC Interests owned by such unit holders. As of September 30, 2021, the non-controlling interest was 37.56%. Acquisition Accounting The Company accounts for its business acquisitions under the acquisition method of accounting in ASC 805. The excess of the purchase price over the estimated fair values of the net assets acquired is recorded as goodwill. Determining the fair value of assets acquired and liabilities assumed requires management’s judgment and often involves the use of significant estimates and assumptions, including assumptions with respect to future cash inflows and outflows, discount rates, asset lives, and market multiples amongst other items. Unaudited Interim Financial Information The accompanying condensed consolidated balance sheets as of September 30, 2021 and December 31, 2020, the statements of operations, changes in stockholders’ deficit / members’ deficit and cash flows for the periods ended September 30, 2021 and 2020 are unaudited. The unaudited interim financial statements have been prepared on the same basis as the audited annual financial statements and, in the opinion of management, reflect all adjustments, which include only normal recurring adjustments, necessary for the fair statement of the Company’s financial position as of September 30, 2021 and the results of its operations and its cash flows for the periods ended September 30, 2021 and 2020. The financial data and other information disclosed in these notes related to the periods ended September 30, 2021 and 2020 are also unaudited. The results for the three and nine months ended September 30, 2021 are not necessarily indicative of results to be expected for the year ending December 31, 2021, any other interim periods, or any future year or period. The balance sheet as of December 31, 2020 included herein was derived from the audited financial statements as of that date. Certain disclosures have been condensed or omitted from the interim financial statements. These financial statements should be read in conjunction with the Company’s consolidated financial statements and related notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020. Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. Significant estimates include revenue recognition, allowance for doubtful accounts, useful lives of property, plant and equipment, other intangible assets, impairment of long-lived assets, reserve for excess and obsolete inventory, the tax receivable agreement and valuation allowance on deferred tax assets. Impact of COVID-19 Pandemic The global health crisis caused by the novel coronavirus COVID-19 pandemic and its resurgences has and may continue to negatively impact global economic activity, which, despite progress in vaccination efforts, remains uncertain and cannot be predicted with confidence. In addition, the Delta variant of COVID-19, which appears to be the most transmissible variant to date, has begun to spread globally and other variants of COVID-19 continue to emerge. To date, while the Company has maintained uninterrupted business operations with normal turnaround times for its delivery of solar EBOS solutions and components, the impact of delays for other parts of customer systems has pushed some projects to future quarters. The Company has implemented adjustments to its operations designed to keep employees safe and comply with federal, state and local guidelines, including those regarding social distancing. For the three and nine months ended September 30, 2021, the Company incurred $0.1 million and $0.3 million, respectively, in COVID-19 related costs (disinfecting and reconfiguration of facilities, medical professionals to conduct daily screening of employees and direct legal costs associated with the pandemic) which is included in general and administrative expenses in the accompanying condensed consolidated financial statements. For the three and nine months ended September 30, 2020, the Company incurred $1.2 million and $2.0 million, respectively, in COVID-19 related costs (disinfecting and reconfiguration of facilities, medical professionals to conduct daily screening of employees, premium pay during the pandemic to hourly workers and direct legal costs associated with the pandemic), of which $1.1 million and $1.9 million, respectively, is included in cost of revenues and $0.1 million and $0.1 million, respectively, is included in general and administrative expenses in the accompanying condensed consolidated financial statements. The impact of the Delta and other emerging variants cannot be predicted at this time, and could depend on numerous factors, including vaccination rates among the population, the effectiveness of the COVID-19 vaccines against the Delta and other emerging variants and the response by governmental bodies and regulators. Given the ongoing and dynamic nature of the circumstances, it is difficult to predict the impact of the COVID-19 pandemic on our business, including, but not limited to, component shortages, disruptions in transportation or other supply chain related constraints. Customer Concentrations The Company had the following revenue concentrations representing 10% or more of revenue for the nine months ended September 30, 2021 and 2020 and related accounts receivable concentrations as of September 30, 2021 and December 31, 2020: 2021 2020 Revenue % Accounts Revenue % Accounts Customer A 22.5 % 24.4 % 22.0 % 10.7 % Customer B 11.8 % 3.0 % 18.2 % 16.6 % Customer C 8.6 % 23.7 % 9.9 % 12.5 % Recent Accounting Pronouncements Adopted In December 2019, the FASB issued ASU No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes (“ASU No. 2019-12”), which is intended to simplify various aspects of the accounting for income taxes. ASU No. 2019-12 removes certain exceptions to the general principles in Topic 740 and also clarifies and amends existing guidance to improve consistent application. The Company adopted ASU No. 2019-12 as of January 1, 2021 and it did not have a material impact on its consolidated financial statements and related disclosures. Not Yet Adopted In February 2016, the FASB issued ASU No. 2016-02 (Topic 842) “Leases” which supersedes the lease recognition requirements in ASC Topic 840, “Leases.” Under ASU No. 2016-02, lessees are required to recognize assets and liabilities on the balance sheet for most leases and provide enhanced disclosures. Leases will continue to be classified as either finance or operating. For companies that are not emerging growth companies (“EGCs”), the ASU is effective for fiscal years beginning after December 15, 2018. For EGCs, the ASU is effective for fiscal years beginning after December 15, 2021. The Company plans to adopt the new standard using the modified retrospective method, under which the Company will apply Topic 842 to existing and new leases as of January 1, 2022, but prior periods will not be restated and will continue to be reported under Topic 840 guidance in effect during those periods. The Company anticipates that the adoption will not have a material impact on its statements of operations or its statements of cash flows but expects to recognize right-of-use assets and liabilities for lease obligations associated with its operating leases. In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments - Credit Losses , which was subsequently amended by ASU No. 2018-19 and ASU No. 2019-10, and which requires the measurement of expected credit losses for financial instruments carried at amortized cost held at the reporting date based on historical experience, current conditions and reasonable forecasts. The updated guidance also amends the current other-than-temporary impairment model for available-for-sale debt securities by requiring the recognition of impairments relating to credit losses through an allowance account and limits the amount of credit loss to the difference between a security’s amortized cost basis and its fair value. In addition, the length of time a security has been in an unrealized loss position will no longer impact the determination of whether a credit loss exists. The main objective of this ASU is to provide financial statement users with more decision-useful information about the expected credit losses on financial instruments and other commitments to extend credit held by a reporting entity at each reporting date. For EGC’s, the standard is effective for fiscal years and interim periods within those fiscal years, beginning after December 15, 2022. The Company will continue to assess the possible impact of this standard, but currently does not expect the adoption of this standard will have a significant impact on its financial statements and its limited history of bad debt expense relating to trade accounts receivable. |
Acquisition of ConnectPV
Acquisition of ConnectPV | 9 Months Ended |
Sep. 30, 2021 | |
Business Combination and Asset Acquisition [Abstract] | |
Acquisition of ConnectPV | Acquisition of ConnectPV On August 26, 2021, the Company acquired 100% of the common stock of ConnectPV. The acquisition of ConnectPV was accounted for as a business combination using the acquisition method of accounting. The aggregate purchase price was $13.8 million in cash (net of $0.8 million cash acquired) and 209,437 shares of Class A Common stock valued at $6.5 million. The cash portion of the purchase price was funded by borrowing under our Revolving Credit Facility. The purchase price paid has been preliminarily allocated to record the acquired assets and assumed liabilities based upon their estimated fair value. When determining the fair values of the assets acquired and assumed liabilities, management made significant estimates, judgements and assumptions. Management estimated that consideration paid exceeded the fair value of the net assets acquired. Therefore, goodwill of $19.1 million was recorded. The goodwill recognized was primarily attributable to synergies related to the Company’s EBOS solutions and components business that are expected to arise from the ConnectPV acquisition. The following table is the preliminary balance sheet of ConnectPV as of the acquisition date, August 26, 2021, and includes the estimated fair value of the assets acquired and assumed liabilities. The estimated fair value allocated to certain property, plant and equipment, identifiable intangible assets and goodwill was determined based on a combination of market, cost and income approaches with the assistance of a third-party valuation firm (in thousands): Preliminary Purchase Price Allocation Cash and cash equivalents $ 848 Accounts receivable 5,313 Inventory 4,641 Other current assets 1,732 Total current assets 12,534 Property, plant and equipment 438 Goodwill 19,145 Other intangible assets 1,600 Total Assets 33,717 Accounts payable 9,228 Accrued expenses 2,695 Debt 1,537 Total liabilities 13,460 Net assets acquired $ 20,257 The Company expensed acquisition-related costs of $1.7 million which are included in general and administrative expenses in the condensed consolidated statement of operations. The goodwill and acquisition costs are not deductible for tax purposes. |
Accounts Receivable
Accounts Receivable | 9 Months Ended |
Sep. 30, 2021 | |
Receivables [Abstract] | |
Accounts Receivable | Accounts Receivable Accounts receivable consists of the following (in thousands): September 30, December 31, 2020 Accounts receivable $ 45,104 $ 27,206 Less: allowance for doubtful accounts (516) (202) Accounts receivable, net $ 44,588 $ 27,004 |
Inventory
Inventory | 9 Months Ended |
Sep. 30, 2021 | |
Inventory Disclosure [Abstract] | |
Inventory | Inventory Inventory consists of the following (in thousands): September 30, December 31, 2020 Raw materials $ 29,827 $ 17,390 Allowance for slow-moving inventory (1,995) (2,269) Inventory, net $ 27,832 $ 15,121 |
Property, Plant and Equipment
Property, Plant and Equipment | 9 Months Ended |
Sep. 30, 2021 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant and Equipment | Property, Plant and Equipment Property, plant, and equipment, net consists of the following (in thousands): Estimated Useful Lives (Years) September 30, December 31, 2020 Land N/A $ 840 $ 840 Building and land improvements 5-40 6,638 5,621 Machinery and equipment 3-5 10,690 9,028 Furniture and fixtures 3-7 1,262 1,025 Vehicles 5 104 318 19,534 16,832 Less: accumulated depreciation (5,176) (4,069) Property, plant and equipment, net $ 14,358 $ 12,763 Depreciation expense for the three months ended September 30, 2021 and 2020 was $0.5 million and $0.4 million, respectively. During the three months ended September 30, 2021 and 2020, $0.4 million and $0.3 million, respectively, of depreciation expense was allocated to cost of revenue. During the three months ended September 30, 2021 and 2020, $0.1 million and $0.1 million, respectively, of depreciation expense was allocated to operating expenses. Depreciation expense for the nine months ended September 30, 2021 and 2020 was $1.3 million and $1.0 million, respectively. During the nine months ended September 30, 2021 and 2020, $1.0 million and $0.8 million, respectively, of depreciation expense was allocated to cost of revenue. During the nine months ended September 30, 2021 and 2020, $0.3 million and $0.2 million, respectively, of depreciation expense was allocated to operating expenses. |
Goodwill and Other Intangible A
Goodwill and Other Intangible Assets | 9 Months Ended |
Sep. 30, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Other Intangible Assets | Goodwill and Other Intangible Assets Goodwill Goodwill relates to the acquisition of Shoals and ConnectPV. As of September 30, 2021 and December 31, 2020, goodwill totaled $69.3 million and $50.2 million, respectively. Other Intangible Assets Other intangible assets consisted of the following (in thousands): Estimated Useful Lives (Years) September 30, December 31, 2020 Amortizable: Costs: Customer relationships 2-13 $ 53,100 $ 52,600 Developed technology 13 34,600 34,600 Trade names 2-13 11,900 11,400 Backlog 1 600 — Noncompete agreements 5 2,000 2,000 Total amortizable intangibles 102,200 100,600 Accumulated amortization: Customer relationships 17,555 14,499 Developed technology 11,533 9,537 Trade names 3,821 3,142 Backlog 50 — Noncompete agreements 1,733 1,434 Total accumulated amortization 34,692 28,612 Total amortizable intangibles, net $ 67,508 $ 71,988 Amortization expense related to intangible assets amounted to $2.1 million and $2.0 million for the three months ended September 30, 2021 and 2020 and $6.1 million and $6.0 million for the nine months ended September 30, 2021 and 2020, respectively. |
Long-Term Debt
Long-Term Debt | 9 Months Ended |
Sep. 30, 2021 | |
Debt Disclosure [Abstract] | |
Long-Term Debt | Long-Term Debt Long-term debt consists of the following (in thousands): September 30, December 31, 2020 Term Loan Facility $ 197,750 $ 350,000 Revolving Credit Facility 60,140 20,000 Senior Debt—term loan — — Less: deferred financing costs (5,614) (11,168) Total debt, net of deferred financing costs 252,276 358,832 Less: current portion (2,000) (3,500) Long-term debt, net current portion $ 250,276 $ 355,332 Senior Secured Credit Agreement On November 25, 2020 Shoals Holdings, entered into a senior secured credit agreement (the “Senior Secured Credit Agreement”), consisting of (i) a $350.0 million senior secured six-year term loan facility (the “Term Loan Facility”), (ii) a $30.0 million senior secured delayed draw term loan facility, which matures concurrently with the six-year Term Loan Facility (the “Delayed Draw Term Loan Facility”) and (iii) an uncommitted super senior first out revolving credit facility (the “Revolving Credit Facility”). The proceeds of the Term Loan Facility and a $10.0 million draw under the Delayed Draw Term Loan Facility were used to (i) make certain distributions from Shoals Holdings to Shoals Intermediate Holdings and from there to certain of the Company’s direct or indirect equity holders, (ii) pay transaction expenses, (iii) repay and terminate all outstanding commitments under the prior senior debt and (iv) finance working capital and general corporate purposes. In December 2020, Shoals Holdings entered into two amendments to the Senior Secured Credit Agreement in order to obtain a $100.0 million increase (the “Revolver Upsize”) to the Revolving Credit Facility and modify the terms of the interest rate and prepayment premium. As part of the first amendment the Company repaid and terminated all outstanding commitments under the Delayed Draw Term Loan Facility. On January 29, 2021, the Company used proceeds from the IPO to repay $150.0 million of outstanding borrowings under the Term Loan Facility. The repayment of a portion of the borrowings under the Term Loan Facility resulted in a $16.0 million loss on debt repayment as the result of the $11.3 million prepayment premium and $4.7 million write-off of a portion of the deferred financing costs. In August 2021, Holdings entered into an amendment to the Senior Secured Credit Agreement to permit the temporary joinder of a parent co-borrower in order to facilitate the acquisition of Connect PV. As of September 30, 2021, interest rates on the Term Loan Facility and the Revolving Credit Facility were 4.25% and 3.75%, respectively and the Company had $39.9 million of availability under the Revolving Credit Facility. The Senior Secured Credit Agreement contains affirmative and negative covenants, including covenants that restrict the Company’s incurrence of indebtedness, incurrence of liens, dispositions, investments, acquisitions, restricted payments, and transactions with affiliates. The Senior Secured Credit Agreement also includes customary events of default, including the occurrence of a change of control. As of September 30, 2021, the Company was in compliance with all the required covenants. Senior Debt Agreement Intermediate and subsidiaries were party to a credit agreement (the “Senior Debt Agreement” and obligations thereunder, the “Senior Debt”) under which Holdings and its subsidiaries were borrowers and Intermediate was a guarantor. The Senior Debt was collateralized by all of the assets of the guarantor and borrowers. The amended agreement provided a term loan of $35 million and a revolving line of credit of $25 million. On October 8, 2020, the Company paid the outstanding amount due on the Senior Debt and settled all obligations with respect to the Senior Debt Agreement. The Senior Debt provided for an interest rate to equal the base rate plus margin. The base rate charged was the highest rate of three defined methods as follows: 1) Federal Funds Rate plus 0.5%, 2) Fifth Third Bank N.A. Rate or 3) LIBOR Rate plus 1%. The base rate ranged from 1% to 2.5% depending on the EBITDA Rate calculation as defined in the Senior Debt Agreement (the “EBITDA Rate Calculation”) for the Federal Funds Rate. The base rate for the LIBOR Rate ranged from 2% to 3.5% depending on the EBITDA Rate Calculation. |
Earnings per Share
Earnings per Share | 9 Months Ended |
Sep. 30, 2021 | |
Earnings Per Share [Abstract] | |
Earnings per Share | Earnings per Share Basic earnings per share of Class A Common Stock is computed by dividing net income attributable to the Company by the weighted average number of shares of Class A Common Stock outstanding during the period. Diluted earnings per share of Class A Common Stock is computed similarly to basic earnings per share except the weighted average shares outstanding are increased to include additional shares from the redemption of Class B Common Stock under the if-converted method and the assumed exercise of any common stock equivalents using the treasury stock method, if dilutive. The Company’s restricted stock units are considered common stock equivalents for this purpose. All earnings prior to and up to January 26, 2021, the date of the IPO, were entirely allocable to non-controlling interest and, as a result, earnings per share information is not applicable for reporting periods prior to this date. Consequently, only the net income allocable to Shoals Technologies Group, Inc. from the period subsequent to January 26, 2021 is included in the net income attributable to the stockholders of Class A Common Stock for the periods ended September 30, 2021. Basic and diluted earnings per share of Class A Common Stock from January 27, 2021 to September 30, 2021 have been computed as follows (in thousands, except per share amounts): Three Months Ended September 30, 2021 Period from January 27, 2021 to September 30, 2021 Numerator: Net income attributable to Shoals Technologies Group, Inc. - basic $ 2,486 $ 1,510 Reallocation of net income attributable to non-controlling interests from the assumed conversion of Class B common stock — — Net income attributable to Shoals Technologies Group, Inc. - diluted $ 2,486 $ 1,510 Denominator: Weighted average shares of Class A common stock outstanding - basic 101,890 96,354 Effect of dilutive securities: Restricted Stock Units 361 173 Class B Common Stock — — Weighted average shares of Class A common stock outstanding - diluted 102,251 96,527 Earnings per share of Class A common stock - basic $ 0.02 $ 0.02 Earnings per share of Class A common stock - diluted $ 0.02 $ 0.02 For the three and nine months ended September 30, 2021 the reallocation of net income attributable to non-controlling interest from the assumed conversion of Class B common stock has been excluded along with the dilutive effect of the Class B common stock to the weighted average shares of Class A common stock outstanding – dilutive as it was antidilutive. |
Equity-Based Compensation
Equity-Based Compensation | 9 Months Ended |
Sep. 30, 2021 | |
Share-based Payment Arrangement [Abstract] | |
Equity-Based Compensation | Equity-Based Compensation On January 26, 2021, the Shoals Technologies Group, Inc. 2021 Long-Term incentive Plan (the “2021 Incentive Plan”) became effective. The 2021 Incentive Plan authorized 8,768,124 new shares, subject to adjustment pursuant to the 2021 Incentive Plan. Since January 26, 2021, the Company has granted 1,367,058 restricted stock units (“RSUs") to certain employees, officers and directors of the Company. The RSUs have grant date fair values ranging from $21.50 to $34.60 per unit and generally vest ratably over either 4 years or 3 years, except for some of the director grants which immediately vested or vest over 1 year. There were a limited number of awards with immediate vesting. The following table summarizes the RSUs activity for the nine months ended September 30, 2021: RSUs Weighted Average Price Outstanding at beginning of period — $ — Granted 1,367,058 $ 26.57 Forfeited (5,621) $ 29.37 Vested (44,724) $ 28.58 Outstanding at end of period 1,316,713 $ 26.49 For the three and nine months ended September 30, 2021, the Company recognized $2.7 million and $6.9 million, respectively, in equity-based compensation. As of September 30, 2021, the Company had $29.9 million of unrecognized compensation costs which is expected to be recognized over a period of 3.3 years. |
Stockholders' Deficit
Stockholders' Deficit | 9 Months Ended |
Sep. 30, 2021 | |
Equity [Abstract] | |
Stockholders' Deficit | Stockholders' Deficit Amendment and Restatement of Certificate of Incorporation As discussed in Note 1, on January 26, 2021, the Company's certificate of incorporation was amended and restated to, among other things, provide for the (i) authorization of 1,000,000,000 shares of Class A common stock with a par value of $0.00001 per share; (ii) authorization of 195,000,000 shares of Class B common stock with a par value of $0.00001 per share; (iii) authorization of 5,000,000 shares of preferred stock that may be issued from time to time by the Company's Board of Directors in one or more series; and (iv) establishment of a classified board of directors, divided into three classes, the members of which will serve for staggered terms. Holders of Class A common stock and Class B common stock are entitled to one vote per share and, except as otherwise required, will vote together as a single class on all matters on which stockholders generally are entitled to vote. Holders of Class B common stock are not entitled to receive dividends and will not be entitled to receive any distributions upon the liquidation, dissolution or winding up of the Company. Shares of Class B common stock may only be issued to the extent necessary to maintain the one-to-one ratio between the number of LLC Interests held by the Continuing Equity Owners and the number of shares of Class B common stock held by the Continuing Equity Owners. Shares of Class B common stock are transferable only together with an equal number of LLC Interests. Shares of Class B common stock will be canceled on a one-for-one basis if the Company, at the election of a Continuing Equity Owner, redeem or exchange LLC Interests. The Company must, at all times, maintain a one-to-one ratio between the number of shares of Class A common stock issued by the Company and the number of LLC Interests owned by the Company (subject to certain exceptions for treasury shares and shares underlying certain convertible or exchangeable securities). Initial Public Offering As discussed in Note 1, on January 29, 2021, the Company closed an IPO of 11,550,000 shares of the Class A common stock at a public offering price of $25.00 per share. The Company received $278.8 million in proceeds, net of underwriting discounts and commissions, which was used to purchase 6,315,790 LLC Interests from Shoals Parent and 5,234,210 LLC Interests from the founder and Class B unit holder in Shoals Parent at a price per interest equal to the IPO price of the Class A common stock of $25.00. Shoals Parent Recapitalization As noted above, in connection with the IPO, the limited liability company agreement of Shoals Parent was amended and restated to, among other things, (i) provide for a new single class of common membership interests in Shoals Parent, or the LLC Interests; (ii) exchange all of the then existing membership interests of the Continuing Equity Owners for LLC Interests (iii) exchange all the then existing membership interest of the Class A Shoals Equity Owners for LLC Interests and (iv) appoint the Company as the sole managing member of Shoals Parent. The Company has a majority economic interest in, is the sole managing member of, has the sole voting power in, and controls the management of Shoals Parent. The amendment also requires that Shoals Parent, at all times, maintain (i) a one-to-one ratio between the number of shares of Class A common stock issued by the Company and the number of LLC Interests owned by the Company and (ii) a one-to-one ratio between the number of shares of Class B common stock owned by the Continuing Equity Owners and the number of LLC Interests owned by the Continuing Equity Owners. Acquisition of Former Shoals Equity Owners |
Non-Controlling Interests
Non-Controlling Interests | 9 Months Ended |
Sep. 30, 2021 | |
Noncontrolling Interest [Abstract] | |
Non-Controlling Interests | Non-Controlling Interests On January 26, 2021, the Company used net proceeds from the IPO to purchase 6,315,790 LLC Interests from Shoals Parent and 5,234,210 LLC Interests from the founder and Class B unit holder in Shoals Parent. In addition, the Company issued 81,977,751 Class A common stock for the same number of LLC Interests as Merger consideration. As of September 30, 2021, the Company owned 62.44% of Shoals Parent. The following table summarizes the effects of the changes in ownership in Shoals Parent on equity: Three Months Ended Period from January 27, 2021 to September 30, 2021 Net income attributable to non-controlling interest $ 2,790 $ 1,911 Transfers to non-controlling interests Increase in accumulated deficit as a result of the Organizational Transactions — (88,644) Decrease in accumulated deficit as a result of newly issued LLC Interests in IPO — 70,976 Decrease in accumulated deficit as a result of activity under stock compensation plan 1,200 2,607 Distributions to non-controlling interest (1,864) (4,837) Reallocation of non-controlling interest 5,717 6,005 Change from net income attributable to non-controlling interest and transfers to non-controlling interest $ 7,843 $ (11,982) Issuance of Additional LLC Interests Under the first amended and restated limited liability company agreement of Shoals Parent, as amended (the "LLC Agreement'), the Company is required to cause Shoals Parent to issue additional LLC Interests to the Company when the Company issues additional shares of Class A Common Stock. Other than as it relates to the issuance of Class A Common Stock in connection with an equity incentive program, the Company must contribute to Shoals Parent net proceeds and property, if any, received by the Company with respect to the issuance of such additional shares of Class A Common Stock. The Company must cause Shoals Parent to issue a number of LLC Interests equal to the number of shares of Class A Common Stock issued such that, at all times, the number of LLC Interests held by the Company equals the number of outstanding shares of Class A Common Stock. During the nine months ended September 30, 2021, the Company caused Shoals Parent to issue to the Company a total of 6,315,790 LLC Interests in connection with the issuance of Class A common stock in the IPO, 10,402,086 LLC Interests in connection with the issuance of Class A common stock in the follow-on offering, 209,437 LLC Interests in connection with the acquisition of ConnectPV and 40,665 LLC Interests for the vesting of awards granted under the Shoals Technologies Group, Inc. 2021 Long-Term Incentive Plan. Distributions for Taxes As a limited liability company (treated as a partnership for income tax purposes), Shoals Parent does not incur significant federal, state or local income taxes, as these taxes are primarily the obligations of its members. As authorized by the LLC Agreement, Shoals Parent is required to distribute cash, to the extent that Shoals Parent has cash available, on a pro rata basis, to its members to the extent necessary to cover the members’ tax liabilities, if any, with respect to each member’s share of Shoals Parent taxable earnings. Shoals Parent makes such tax distributions to its members quarterly, based on the single highest marginal tax rate applicable to its members applied to projected year-to-date taxable income, with a final accounting once actual taxable income or loss has been determined. During the nine months ended September 30, 2021, tax distributions to non-controlling LLC Interests holders was $4.8 million. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Litigation The Company is from time to time subject to legal proceedings and claims, which arise in the normal course of its business. In the opinion of management and legal counsel, the amount of losses that may be sustained, if any, would not have a material effect on the financial position, results of operations or cash flows of the Company. Surety Bonds The Company provides surety bonds to various parties as required for certain transactions initiated during the ordinary course of business to guarantee the Company’s performance in accordance with contractual or legal obligations. As of September 30, 2021, the maximum potential payment obligation with regard to surety bonds was $12.6 million. |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2021 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The Company is taxed as a subchapter C corporation and is subject to federal and state income taxes. The Company’s sole material asset is Shoals Parent, which is a limited liability company that is taxed as a partnership for US federal and certain state and local income tax purposes. Shoals Parent’s net taxable income and related tax credits, if any, are passed through to its members and included in the member’s tax returns. Shoals Parent is subject to and reports an entity level tax in Tennessee and Texas. The income tax burden on the earnings taxed to the noncontrolling interest holders is not reported by the Company in its consolidated financial statements under U.S. GAAP. As a result, the Company’s effective tax rate differs materially from the statutory rate. The Company’s income tax provision was a benefit of $1.3 million and $3.1 million for the three and nine months ended September 30, 2021, respectively, and the effective tax rate is primarily impacted by the allocation of income taxes to the noncontrolling interest, benefit of the foreign derived intangible income and changes in our valuation allowance. The tax benefit for the three and nine months ended September 30, 2021 includes $2.0 million and $3.7 million, respectively, of deferred income tax benefit resulting from an increase in the blended state income tax rate. As of September 30, 2021, the Company had recorded a deferred tax asset related to the partnership basis differences in Shoals Parent of $121.5 million. The Company also recorded an income tax receivable of $8.6 million of which the Company estimates $3.8 million is owed to the prior owner related to taxes paid prior to the IPO transaction. In calculating the provision for interim income taxes, in accordance with ASC Topic 740, an estimated annual effective tax rate is applied to year-to-date ordinary income. At the end of each interim period, the Company estimates the effective tax rate expected to be applicable for the full fiscal year. This differs from the method utilized at the end of an annual period. For annual periods, the Company accounts for income taxes using the asset and liability method. Under this method, deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. In assessing the realizability of deferred tax assets, management considers whether it is more-likely-than-not that the deferred tax assets will be realized. Deferred tax assets and liabilities are calculated by applying existing tax laws and the rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in the year of the enacted rate change. The Company accounts for uncertainty in income taxes using a recognition and measurement threshold for tax positions taken or expected to be taken in a tax return, which are subject to examination by federal and state taxing authorities. The tax benefit from an uncertain tax position is recognized when it is more likely than not that the position will be sustained upon examination by taxing authorities based on the technical merits of the position. The amount of the tax benefit recognized is the largest amount of the benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. The effective tax rate and the tax basis of assets and liabilities reflect management’s estimates of the ultimate outcome of various tax uncertainties. The Company recognizes penalties and interest related to uncertain tax positions within the provision (benefit) for income taxes line in the accompanying consolidated statements of operations. As of the quarter ended September 30, 2021, no uncertain tax positions have been recorded. The Company will continue to monitor this position each interim period. The Company files U.S. federal and certain state income tax returns. The income tax returns of the Company are subject to examination by U.S. federal and state taxing authorities for various time periods, depending on those jurisdictions’ rules, generally after the income tax returns are filed. |
Tax Receivable Agreement
Tax Receivable Agreement | 9 Months Ended |
Sep. 30, 2021 | |
Tax Receivable Agreement [Abstract] | |
Tax Receivable Agreement | Tax Receivable Agreement In connection with the Organization Transactions and the IPO, the Company entered into a tax receivable agreement (the “TRA”) with the founder and former equity owners of Shoals Investment CTB (the “TRA Owners”). The TRA provides for the payment from time to time by the Company to the TRA Owners of 85% of the amount of the benefits, if any, that the Company has deemed to realize as a result of (i) increases in tax basis resulting from the purchase or exchange of LLC Interests and other qualifying transactions. These payment obligations are obligations of the Company and not of Shoals Parent. For purposes of the TRA, the benefit deemed realized by the Company will generally be computed by comparing the actual income tax liability of the Company (calculated with certain assumptions) to the amount of such taxes that the Company would have been required to pay had there been no increase to the tax basis of the assets of Shoals Parent as a result of the purchases or exchanges, and had the Company not entered into the TRA. The TRA further provides that, upon certain mergers, asset sales or other forms of business combinations or other changes of control, the Company (or its successor) would owe to the TRA Owners a lump-sum payment equal to the present value of all forecasted future payments that would have otherwise been made under the TRA that would be based on certain assumptions, including a deemed exchange of Shoals Parent LLC Interests and that the Company would have sufficient taxable income to fully utilize the deductions arising from the increased tax basis and other tax benefits related to entering into the TRA. The Company also is entitled to terminate the TRA, which, if terminated, would obligate the Company to make early termination payments to the TRA Owners. On January 26, 2021, the Company acquired 5,234,210 LLC Interests from the founder. This acquisition triggered a tax basis increase subject to the provisions of the TRA. The Company recognized (i) a deferred tax asset in the amount of $32.1 million, (ii) a corresponding liability of $27.2 million, representing 85% of the tax benefits to the TRA Owners and (iii) $4.9 million of additional paid-in capital. On January 26, 2021, in connection with the merger with Shoals Investment CTB, the Company distributed 85% of the value in the tax basis from the original acquisition of Shoals Parent by Shoals investment CTB in 2017 to the holders of the TRA. In the first quarter of fiscal year 2021, the Company recognized (i) a deferred tax asset of $16.9 million, (ii) a corresponding liability of $14.4 million representing 85% of the tax benefits to the TRA Owners and (iii) $2.5 million of additional paid-in capital. During 2021, the TRA liability was increased by $3.7 million resulting from an estimated increase in the Company’s blended state income tax rate. As a result of the adjustment to the Tax Receivable Agreement liability, the Company recorded approximately $2.0 million and $3.7 million of other expense in the Condensed Consolidated Statement of Operations for the three and nine months ended September 30, 2021, respectively. On July 16, 2021, the Company acquired 10,402,086 LLC Interests from the founder and selling shareholders. This acquisition triggered a tax basis increase subject to the provisions of the TRA. The Company recognized (i) a deferred tax asset in the amount of $73.5 million, (ii) a corresponding liability of $62.5 million, representing 85% of the tax benefits to the TRA Owners and (iii) $11.0 million of additional paid-in capital. As of September 30, 2021, the amount of Tax Receivable Agreement payments due under the Tax Receivable Agreement was $107.9 million. |
Revenue by Product
Revenue by Product | 9 Months Ended |
Sep. 30, 2021 | |
Revenue from Contract with Customer [Abstract] | |
Revenue by Product | Revenue by Product Based on Topic 606 provisions, the Company disaggregates its revenue from contracts with customers between system solutions and components. System solutions are contracts under which the Company provides multiple products typically in connection with the design and specification of an entire EBOS system. Components represents sales of individual solar components. The following table presents the Company’s revenue disaggregated by system solutions and solar components which are recorded over time as follows (in thousands): Three Months Ended Nine Months Ended 2021 2020 2021 2020 System solutions $ 38,641 $ 36,962 $ 123,252 $ 91,381 Solar components 21,199 15,636 41,914 45,384 Total revenue $ 59,840 $ 52,598 $ 165,166 $ 136,765 |
Summary of Accounting Policies
Summary of Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2021 | |
Accounting Policies [Abstract] | |
Basis of Accounting and Presentation | Basis of Accounting and PresentationThe condensed consolidated financial statements have been prepared on the accrual basis of accounting in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). |
Principles of Consolidation | Principles of Consolidation The condensed consolidated financial statements include the accounts of the Company and its subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. |
Non-controlling Interest | Non-controlling Interest The non-controlling interest on the condensed consolidated statement of operations represents the portion of earnings or loss attributable to the economic interest in the Company's subsidiary, Shoals Parent, held by the Continuing Equity Owners. Non-controlling interest on the condensed consolidated balance sheet represents the portion of net assets of the Company attributable to the Continuing Equity Owners, based on the portion of the LLC Interests owned by such unit holders. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. Significant estimates include revenue recognition, allowance for doubtful accounts, useful lives of property, plant and equipment, other intangible assets, impairment of long-lived assets, reserve for excess and obsolete inventory, the tax receivable agreement and valuation allowance on deferred tax assets. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Adopted In December 2019, the FASB issued ASU No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes (“ASU No. 2019-12”), which is intended to simplify various aspects of the accounting for income taxes. ASU No. 2019-12 removes certain exceptions to the general principles in Topic 740 and also clarifies and amends existing guidance to improve consistent application. The Company adopted ASU No. 2019-12 as of January 1, 2021 and it did not have a material impact on its consolidated financial statements and related disclosures. Not Yet Adopted In February 2016, the FASB issued ASU No. 2016-02 (Topic 842) “Leases” which supersedes the lease recognition requirements in ASC Topic 840, “Leases.” Under ASU No. 2016-02, lessees are required to recognize assets and liabilities on the balance sheet for most leases and provide enhanced disclosures. Leases will continue to be classified as either finance or operating. For companies that are not emerging growth companies (“EGCs”), the ASU is effective for fiscal years beginning after December 15, 2018. For EGCs, the ASU is effective for fiscal years beginning after December 15, 2021. The Company plans to adopt the new standard using the modified retrospective method, under which the Company will apply Topic 842 to existing and new leases as of January 1, 2022, but prior periods will not be restated and will continue to be reported under Topic 840 guidance in effect during those periods. The Company anticipates that the adoption will not have a material impact on its statements of operations or its statements of cash flows but expects to recognize right-of-use assets and liabilities for lease obligations associated with its operating leases. In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments - Credit Losses , which was subsequently amended by ASU No. 2018-19 and ASU No. 2019-10, and which requires the measurement of expected credit losses for financial instruments carried at amortized cost held at the reporting date based on historical experience, current conditions and reasonable forecasts. The updated guidance also amends the current other-than-temporary impairment model for available-for-sale debt securities by requiring the recognition of impairments relating to credit losses through an allowance account and limits the amount of credit loss to the difference between a security’s amortized cost basis and its fair value. In addition, the length of time a security has been in an unrealized loss position will no longer impact the determination of whether a credit loss exists. The main objective of this ASU is to provide financial statement users with more decision-useful information about the expected credit losses on financial instruments and other commitments to extend credit held by a reporting entity at each reporting date. For EGC’s, the standard is effective for fiscal years and interim periods within those fiscal years, beginning after December 15, 2022. The Company will continue to assess the possible impact of this standard, but currently does not expect the adoption of this standard will have a significant impact on its financial statements and its limited history of bad debt expense relating to trade accounts receivable. |
Summary of Accounting Policie_2
Summary of Accounting Policies (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Accounting Policies [Abstract] | |
Schedule of Revenue and Accounts Receivable Concentration Risks | The Company had the following revenue concentrations representing 10% or more of revenue for the nine months ended September 30, 2021 and 2020 and related accounts receivable concentrations as of September 30, 2021 and December 31, 2020: 2021 2020 Revenue % Accounts Revenue % Accounts Customer A 22.5 % 24.4 % 22.0 % 10.7 % Customer B 11.8 % 3.0 % 18.2 % 16.6 % Customer C 8.6 % 23.7 % 9.9 % 12.5 % |
Acquisition of ConnectPV (Table
Acquisition of ConnectPV (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Business Combination and Asset Acquisition [Abstract] | |
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | The estimated fair value allocated to certain property, plant and equipment, identifiable intangible assets and goodwill was determined based on a combination of market, cost and income approaches with the assistance of a third-party valuation firm (in thousands): Preliminary Purchase Price Allocation Cash and cash equivalents $ 848 Accounts receivable 5,313 Inventory 4,641 Other current assets 1,732 Total current assets 12,534 Property, plant and equipment 438 Goodwill 19,145 Other intangible assets 1,600 Total Assets 33,717 Accounts payable 9,228 Accrued expenses 2,695 Debt 1,537 Total liabilities 13,460 Net assets acquired $ 20,257 |
Accounts Receivable (Tables)
Accounts Receivable (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Receivables [Abstract] | |
Schedule of Accounts Receivable | Accounts receivable consists of the following (in thousands): September 30, December 31, 2020 Accounts receivable $ 45,104 $ 27,206 Less: allowance for doubtful accounts (516) (202) Accounts receivable, net $ 44,588 $ 27,004 |
Inventory (Tables)
Inventory (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventory | Inventory consists of the following (in thousands): September 30, December 31, 2020 Raw materials $ 29,827 $ 17,390 Allowance for slow-moving inventory (1,995) (2,269) Inventory, net $ 27,832 $ 15,121 |
Property, Plant and Equipment (
Property, Plant and Equipment (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property, Plant, and Equipment, Net | Property, plant, and equipment, net consists of the following (in thousands): Estimated Useful Lives (Years) September 30, December 31, 2020 Land N/A $ 840 $ 840 Building and land improvements 5-40 6,638 5,621 Machinery and equipment 3-5 10,690 9,028 Furniture and fixtures 3-7 1,262 1,025 Vehicles 5 104 318 19,534 16,832 Less: accumulated depreciation (5,176) (4,069) Property, plant and equipment, net $ 14,358 $ 12,763 |
Goodwill and Other Intangible_2
Goodwill and Other Intangible Assets (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Other Intangible Assets | Other intangible assets consisted of the following (in thousands): Estimated Useful Lives (Years) September 30, December 31, 2020 Amortizable: Costs: Customer relationships 2-13 $ 53,100 $ 52,600 Developed technology 13 34,600 34,600 Trade names 2-13 11,900 11,400 Backlog 1 600 — Noncompete agreements 5 2,000 2,000 Total amortizable intangibles 102,200 100,600 Accumulated amortization: Customer relationships 17,555 14,499 Developed technology 11,533 9,537 Trade names 3,821 3,142 Backlog 50 — Noncompete agreements 1,733 1,434 Total accumulated amortization 34,692 28,612 Total amortizable intangibles, net $ 67,508 $ 71,988 |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Debt Disclosure [Abstract] | |
Schedule of Long-term Debt | Long-term debt consists of the following (in thousands): September 30, December 31, 2020 Term Loan Facility $ 197,750 $ 350,000 Revolving Credit Facility 60,140 20,000 Senior Debt—term loan — — Less: deferred financing costs (5,614) (11,168) Total debt, net of deferred financing costs 252,276 358,832 Less: current portion (2,000) (3,500) Long-term debt, net current portion $ 250,276 $ 355,332 |
Earnings per Share (Tables)
Earnings per Share (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Earnings Per Share [Abstract] | |
Schedule of Basic and Diluted Net Loss per Share | Basic and diluted earnings per share of Class A Common Stock from January 27, 2021 to September 30, 2021 have been computed as follows (in thousands, except per share amounts): Three Months Ended September 30, 2021 Period from January 27, 2021 to September 30, 2021 Numerator: Net income attributable to Shoals Technologies Group, Inc. - basic $ 2,486 $ 1,510 Reallocation of net income attributable to non-controlling interests from the assumed conversion of Class B common stock — — Net income attributable to Shoals Technologies Group, Inc. - diluted $ 2,486 $ 1,510 Denominator: Weighted average shares of Class A common stock outstanding - basic 101,890 96,354 Effect of dilutive securities: Restricted Stock Units 361 173 Class B Common Stock — — Weighted average shares of Class A common stock outstanding - diluted 102,251 96,527 Earnings per share of Class A common stock - basic $ 0.02 $ 0.02 Earnings per share of Class A common stock - diluted $ 0.02 $ 0.02 |
Equity-Based Compensation (Tabl
Equity-Based Compensation (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Share-based Payment Arrangement [Abstract] | |
Schedule of Restricted Stock Unit Activity | The following table summarizes the RSUs activity for the nine months ended September 30, 2021: RSUs Weighted Average Price Outstanding at beginning of period — $ — Granted 1,367,058 $ 26.57 Forfeited (5,621) $ 29.37 Vested (44,724) $ 28.58 Outstanding at end of period 1,316,713 $ 26.49 |
Non-Controlling Interests (Tabl
Non-Controlling Interests (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Noncontrolling Interest [Abstract] | |
Schedule of Effects of Changes in Ownership | The following table summarizes the effects of the changes in ownership in Shoals Parent on equity: Three Months Ended Period from January 27, 2021 to September 30, 2021 Net income attributable to non-controlling interest $ 2,790 $ 1,911 Transfers to non-controlling interests Increase in accumulated deficit as a result of the Organizational Transactions — (88,644) Decrease in accumulated deficit as a result of newly issued LLC Interests in IPO — 70,976 Decrease in accumulated deficit as a result of activity under stock compensation plan 1,200 2,607 Distributions to non-controlling interest (1,864) (4,837) Reallocation of non-controlling interest 5,717 6,005 Change from net income attributable to non-controlling interest and transfers to non-controlling interest $ 7,843 $ (11,982) |
Revenue by Product (Tables)
Revenue by Product (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Revenue Disaggregated by Product | The following table presents the Company’s revenue disaggregated by system solutions and solar components which are recorded over time as follows (in thousands): Three Months Ended Nine Months Ended 2021 2020 2021 2020 System solutions $ 38,641 $ 36,962 $ 123,252 $ 91,381 Solar components 21,199 15,636 41,914 45,384 Total revenue $ 59,840 $ 52,598 $ 165,166 $ 136,765 |
Organization and Business (Deta
Organization and Business (Details) $ / shares in Units, $ in Thousands | Jul. 16, 2021USD ($)shares | Jan. 29, 2021USD ($)$ / sharesshares | Jan. 26, 2021USD ($)shares | Sep. 30, 2021USD ($)subsidiary | Sep. 30, 2020USD ($) | Aug. 26, 2021 | Dec. 31, 2020USD ($) |
Class of Stock [Line Items] | |||||||
Number of subsidiaries | subsidiary | 5 | ||||||
Underwriting discounts and commission payments | $ | $ 9,619 | $ 0 | |||||
Deferred tax asset | $ | $ 73,500 | $ 16,900 | $ 121,545 | $ 0 | |||
Payable pursuant to Tax Receivable Agreement related to distribution | $ | $ 62,500 | $ 14,400 | |||||
Tax Receivable Agreement, proportion of tax benefits to be paid to TRA Owners (as a percent) | 85.00% | 85.00% | |||||
Additional-paid-in-capital pursuant to Tax Receivable Agreement related to distribution | $ | $ 11,000 | $ 2,500 | |||||
Shoals Parent | |||||||
Class of Stock [Line Items] | |||||||
Ownership interest (as a percent) | 56.14% | 62.44% | |||||
Non-controlling ownership interest (as a percent) | 43.86% | 37.56% | |||||
Shoals Parent | |||||||
Class of Stock [Line Items] | |||||||
Interests purchased in subsidiaries (in shares) | 6,315,790 | 6,315,790 | |||||
Founder and Class B Unit Holder in Shoals Parent | |||||||
Class of Stock [Line Items] | |||||||
Interests purchased in subsidiaries (in shares) | 5,234,210 | ||||||
Class A Common Stock | |||||||
Class of Stock [Line Items] | |||||||
Stock issued for organizational transactions (in shares) | 81,977,751 | ||||||
Class B Common Stock | |||||||
Class of Stock [Line Items] | |||||||
Stock issued in conversion (in shares) | 78,300,817 | ||||||
Stock issued in conversion per share (in shares) | 1 | ||||||
Stock redeemed during period (shares) | 10,402,086 | ||||||
IPO | |||||||
Class of Stock [Line Items] | |||||||
Consideration received from stock issued in IPO | $ | $ 278,800 | ||||||
Underwriting discounts and commission payments | $ | $ 9,900 | ||||||
IPO | Class A Common Stock | |||||||
Class of Stock [Line Items] | |||||||
Stock issued in IPO (in shares) | 11,550,000 | ||||||
Price per share of stock issued in IPO (in USD per share) | $ / shares | $ 25 | ||||||
Stock Offering By Selling Shareholders | Class A Common Stock | |||||||
Class of Stock [Line Items] | |||||||
Stock issued in IPO (in shares) | 4,989,692 | ||||||
Stock Offering | Class A Common Stock | |||||||
Class of Stock [Line Items] | |||||||
Stock issued in IPO (in shares) | 10,402,086 | ||||||
ConnectPV | |||||||
Class of Stock [Line Items] | |||||||
Voting interests acquired (as a percent) | 100.00% |
Summary of Accounting Policie_3
Summary of Accounting Policies - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Jan. 29, 2021 | |
General and Administrative Expenses | |||||
Condensed Income Statements, Captions [Line Items] | |||||
COVID-19 related costs | $ 0.1 | $ 1.2 | $ 0.3 | $ 2 | |
Cost of Revenue | |||||
Condensed Income Statements, Captions [Line Items] | |||||
COVID-19 related costs | 1.1 | 1.9 | |||
Selling, General and Administrative Expenses | |||||
Condensed Income Statements, Captions [Line Items] | |||||
COVID-19 related costs | $ 0.1 | $ 0.1 | |||
Shoals Parent | |||||
Condensed Income Statements, Captions [Line Items] | |||||
Non-controlling ownership interest (as a percent) | 37.56% | 37.56% | 43.86% |
Summary of Accounting Policie_4
Summary of Accounting Policies - Revenue and Accounts Receivable Concentrations (Details) - Customer Concentration Risk | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
Revenue % | Customer A | ||
Concentration Risk [Line Items] | ||
Concentration risk (as a percent) | 22.50% | 22.00% |
Revenue % | Customer B | ||
Concentration Risk [Line Items] | ||
Concentration risk (as a percent) | 11.80% | 18.20% |
Revenue % | Customer C | ||
Concentration Risk [Line Items] | ||
Concentration risk (as a percent) | 8.60% | 9.90% |
Accounts Receivable % | Customer A | ||
Concentration Risk [Line Items] | ||
Concentration risk (as a percent) | 24.40% | 10.70% |
Accounts Receivable % | Customer B | ||
Concentration Risk [Line Items] | ||
Concentration risk (as a percent) | 3.00% | 16.60% |
Accounts Receivable % | Customer C | ||
Concentration Risk [Line Items] | ||
Concentration risk (as a percent) | 23.70% | 12.50% |
Acquisition of ConnectPV - Narr
Acquisition of ConnectPV - Narrative (Details) - ConnectPV $ in Millions | Aug. 26, 2021USD ($)shares |
Business Acquisition, Equity Interests Issued or Issuable [Line Items] | |
Voting interests acquired (as a percent) | 100.00% |
Aggregate purchase price in cash | $ 13.8 |
Cash acquired from acquisition | $ 0.8 |
Equity interest issued or issuable (in shares) | shares | 209,437 |
Value of equity interest issued or issuable | $ 6.5 |
Goodwill, acquired during period | 19.1 |
Acquisition related costs | $ 1.7 |
Acquisition of ConnectPV - Prel
Acquisition of ConnectPV - Preliminary Purchase Price Allocation (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Aug. 26, 2021 | Dec. 31, 2020 |
Business Acquisition [Line Items] | |||
Goodwill | $ 69,321 | $ 50,176 | |
ConnectPV | |||
Business Acquisition [Line Items] | |||
Cash and cash equivalents | $ 848 | ||
Accounts receivable | 5,313 | ||
Inventory | 4,641 | ||
Other current assets | 1,732 | ||
Total current assets | 12,534 | ||
Property, plant and equipment | 438 | ||
Goodwill | 19,145 | ||
Other intangible assets | 1,600 | ||
Total Assets | 33,717 | ||
Accounts payable | 9,228 | ||
Accrued expenses | 2,695 | ||
Debt | 1,537 | ||
Total liabilities | 13,460 | ||
Net assets acquired | $ 20,257 |
Accounts Receivable - Schedule
Accounts Receivable - Schedule of Accounts Receivable (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Receivables [Abstract] | ||
Accounts receivable | $ 45,104 | $ 27,206 |
Less: allowance for doubtful accounts | (516) | (202) |
Accounts receivable, net | $ 44,588 | $ 27,004 |
Inventory - Schedule of Invento
Inventory - Schedule of Inventory (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 29,827 | $ 17,390 |
Allowance for slow-moving inventory | (1,995) | (2,269) |
Inventory, net | $ 27,832 | $ 15,121 |
Property, Plant and Equipment -
Property, Plant and Equipment - Schedule of Property, Plant, and Equipment, Net (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2021 | Dec. 31, 2020 | |
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | $ 19,534 | $ 16,832 |
Less: accumulated depreciation | (5,176) | (4,069) |
Property, plant and equipment, net | 14,358 | 12,763 |
Land | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 840 | 840 |
Building and land improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | $ 6,638 | 5,621 |
Building and land improvements | Minimum | ||
Property, Plant and Equipment [Line Items] | ||
Estimated Useful Lives (Years) | 5 years | |
Building and land improvements | Maximum | ||
Property, Plant and Equipment [Line Items] | ||
Estimated Useful Lives (Years) | 40 years | |
Machinery and equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | $ 10,690 | 9,028 |
Machinery and equipment | Minimum | ||
Property, Plant and Equipment [Line Items] | ||
Estimated Useful Lives (Years) | 3 years | |
Machinery and equipment | Maximum | ||
Property, Plant and Equipment [Line Items] | ||
Estimated Useful Lives (Years) | 5 years | |
Furniture and fixtures | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | $ 1,262 | 1,025 |
Furniture and fixtures | Minimum | ||
Property, Plant and Equipment [Line Items] | ||
Estimated Useful Lives (Years) | 3 years | |
Furniture and fixtures | Maximum | ||
Property, Plant and Equipment [Line Items] | ||
Estimated Useful Lives (Years) | 7 years | |
Vehicles | ||
Property, Plant and Equipment [Line Items] | ||
Estimated Useful Lives (Years) | 5 years | |
Property, plant and equipment, gross | $ 104 | $ 318 |
Property, Plant and Equipment_2
Property, Plant and Equipment - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Property, Plant and Equipment [Abstract] | ||||
Depreciation expense | $ 0.5 | $ 0.4 | $ 1.3 | $ 1 |
Depreciation expense allocated to cost of revenue | 0.4 | 0.3 | 1 | 0.8 |
Depreciation expense allocated to operating expenses | $ 0.1 | $ 0.1 | $ 0.3 | $ 0.2 |
Goodwill and Other Intangible_3
Goodwill and Other Intangible Assets - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |||||
Goodwill | $ 69,321 | $ 69,321 | $ 50,176 | ||
Amortization expense of intangible assets | $ 2,100 | $ 2,000 | $ 6,100 | $ 6,000 |
Goodwill and Other Intangible_4
Goodwill and Other Intangible Assets - Other Intangible Assets (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2021 | Dec. 31, 2020 | |
Finite-Lived Intangible Assets [Line Items] | ||
Total amortizable intangibles | $ 102,200 | $ 100,600 |
Total accumulated amortization | 34,692 | 28,612 |
Total amortizable intangibles, net | 67,508 | 71,988 |
Customer relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Total amortizable intangibles | 53,100 | 52,600 |
Total accumulated amortization | $ 17,555 | 14,499 |
Customer relationships | Minimum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Estimated Useful Lives (Years) | 2 years | |
Customer relationships | Maximum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Estimated Useful Lives (Years) | 13 years | |
Developed technology | ||
Finite-Lived Intangible Assets [Line Items] | ||
Estimated Useful Lives (Years) | 13 years | |
Total amortizable intangibles | $ 34,600 | 34,600 |
Total accumulated amortization | 11,533 | 9,537 |
Trade names | ||
Finite-Lived Intangible Assets [Line Items] | ||
Total amortizable intangibles | 11,900 | 11,400 |
Total accumulated amortization | $ 3,821 | 3,142 |
Trade names | Minimum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Estimated Useful Lives (Years) | 2 years | |
Trade names | Maximum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Estimated Useful Lives (Years) | 13 years | |
Backlog | ||
Finite-Lived Intangible Assets [Line Items] | ||
Estimated Useful Lives (Years) | 1 year | |
Total amortizable intangibles | $ 600 | 0 |
Total accumulated amortization | $ 50 | 0 |
Noncompete agreements | ||
Finite-Lived Intangible Assets [Line Items] | ||
Estimated Useful Lives (Years) | 5 years | |
Total amortizable intangibles | $ 2,000 | 2,000 |
Total accumulated amortization | $ 1,733 | $ 1,434 |
Long-Term Debt - Schedule of Lo
Long-Term Debt - Schedule of Long-term Debt (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Debt Instrument [Line Items] | ||
Less: deferred financing costs | $ (5,614) | $ (11,168) |
Total debt, net of deferred financing costs | 252,276 | 358,832 |
Less: current portion | (2,000) | (3,500) |
Long-term debt, net current portion | 250,276 | 355,332 |
Senior Secured Credit Agreement | Line of Credit | Secured Debt | ||
Debt Instrument [Line Items] | ||
Long-term debt, gross | 197,750 | 350,000 |
Senior Secured Credit Agreement | Line of Credit | Revolving Credit Facility | ||
Debt Instrument [Line Items] | ||
Long-term debt, gross | 60,140 | 20,000 |
Senior Debt | Line of Credit | Term Loan | ||
Debt Instrument [Line Items] | ||
Long-term debt, gross | $ 0 | $ 0 |
Long-Term Debt - Narrative (Det
Long-Term Debt - Narrative (Details) | Jan. 29, 2021USD ($) | Nov. 25, 2020USD ($) | Dec. 31, 2020USD ($)amendment | Sep. 30, 2021USD ($) | Sep. 30, 2020USD ($) | Sep. 30, 2021USD ($) | Sep. 30, 2020USD ($) | Oct. 07, 2020USD ($) |
Debt Instrument [Line Items] | ||||||||
Loss on debt repayment | $ 0 | $ 0 | $ 15,990,000 | $ 0 | ||||
Senior Secured Credit Agreement | Line of Credit | ||||||||
Debt Instrument [Line Items] | ||||||||
Number of amendments to debt agreement | amendment | 2 | |||||||
Senior Secured Credit Agreement | Secured Debt | Line of Credit | ||||||||
Debt Instrument [Line Items] | ||||||||
Face amount of debt instrument | $ 350,000,000 | |||||||
Term of debt instrument | 6 years | |||||||
Repayments of outstanding borrowings | $ 150,000,000 | |||||||
Loss on debt repayment | (16,000,000) | |||||||
Prepayment premium | 11,300,000 | |||||||
Write-off of deferred financing costs | $ 4,700,000 | |||||||
Effective interest rate of debt instrument (as a percent) | 4.25% | 4.25% | ||||||
Senior Secured Credit Agreement | Delayed Draw Secured Debt | Line of Credit | ||||||||
Debt Instrument [Line Items] | ||||||||
Term of debt instrument | 6 years | |||||||
Maximum borrowing capacity of credit facility | $ 30,000,000 | |||||||
Draw on credit facility | $ 10,000,000 | |||||||
Senior Secured Credit Agreement | Revolving Credit Facility | Line of Credit | ||||||||
Debt Instrument [Line Items] | ||||||||
Increase in maximum borrowing capacity of credit facility | $ 100,000,000 | |||||||
Effective interest rate of debt instrument (as a percent) | 3.75% | 3.75% | ||||||
Remaining borrowing capacity under credit facility | $ 39,900,000 | $ 39,900,000 | ||||||
Senior Debt | Line of Credit | Federal Funds Rate | ||||||||
Debt Instrument [Line Items] | ||||||||
Basis spread on variable rate (as a percent) | 0.50% | |||||||
Senior Debt | Line of Credit | LIBOR Rate | ||||||||
Debt Instrument [Line Items] | ||||||||
Basis spread on variable rate (as a percent) | 1.00% | |||||||
Senior Debt | Line of Credit | LIBOR Rate | Minimum | ||||||||
Debt Instrument [Line Items] | ||||||||
Basis spread on variable rate (as a percent) | 2.00% | |||||||
Senior Debt | Line of Credit | LIBOR Rate | Maximum | ||||||||
Debt Instrument [Line Items] | ||||||||
Basis spread on variable rate (as a percent) | 3.50% | |||||||
Senior Debt | Line of Credit | Base Rate | Minimum | ||||||||
Debt Instrument [Line Items] | ||||||||
Basis spread on variable rate (as a percent) | 1.00% | |||||||
Senior Debt | Line of Credit | Base Rate | Maximum | ||||||||
Debt Instrument [Line Items] | ||||||||
Basis spread on variable rate (as a percent) | 2.50% | |||||||
Senior Debt | Revolving Credit Facility | Line of Credit | ||||||||
Debt Instrument [Line Items] | ||||||||
Face amount of debt instrument | $ 25,000,000 | |||||||
Senior Debt | Term Loan | Line of Credit | ||||||||
Debt Instrument [Line Items] | ||||||||
Face amount of debt instrument | $ 35,000,000 |
Earnings per Share - Schedule o
Earnings per Share - Schedule of Basic and Diluted Net Loss per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 8 Months Ended |
Sep. 30, 2021 | Sep. 30, 2021 | |
Numerator: | ||
Net income attributable to Shoals Technologies Group, Inc. - basic | $ 2,486 | $ 1,510 |
Reallocation of net income attributable to non-controlling interests from the assumed conversion of Class B common stock | 0 | 0 |
Net income attributable to Shoals Technologies Group, Inc. - diluted | $ 2,486 | $ 1,510 |
Denominator: | ||
Weighted average shares of Class A common stock outstanding - basic (in shares) | 101,890 | 96,354 |
Weighted average shares of Class A common stock outstanding - diluted (in shares) | 102,251 | 96,527 |
Earnings per share of Class A common stock - basic (in USD per share) | $ 0.02 | $ 0.02 |
Earnings per share of Class A common stock - diluted (in USD per share) | $ 0.02 | $ 0.02 |
Restricted Stock Units | ||
Denominator: | ||
Effect of dilutive securities (in shares) | 361 | 173 |
Class B Common Stock | ||
Denominator: | ||
Effect of dilutive securities (in shares) | 0 | 0 |
Equity-Based Compensation - Nar
Equity-Based Compensation - Narrative (Details) - USD ($) $ / shares in Units, $ in Millions | Jan. 26, 2021 | Sep. 30, 2021 | Sep. 30, 2021 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Equity-based compensation | $ 2.7 | $ 6.9 | |
Unrecognized compensation costs | $ 29.9 | $ 29.9 | |
Period for recognition of unrecognized compensation costs | 3 years 3 months 18 days | ||
Restricted Stock Units | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Restricted stock units granted (in shares) | 1,367,058 | 1,367,058,000 | |
Restricted Stock Units | Director | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Award vesting period | 1 year | ||
Restricted Stock Units | Minimum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share price (in USD per share) | $ 21.50 | ||
Award vesting period | 3 years | ||
Restricted Stock Units | Maximum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share price (in USD per share) | $ 34.60 | ||
Award vesting period | 4 years | ||
2021 Incentive Plan | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Number of shares authorized (in shares) | 8,768,124 |
Equity-Based Compensation - Res
Equity-Based Compensation - Restricted Stock Unit Activity (Details) - Restricted Stock Units - $ / shares | Jan. 26, 2021 | Sep. 30, 2021 |
RSUs | ||
Outstanding at beginning of period (in shares) | 0 | |
Granted (in shares) | 1,367,058 | 1,367,058,000 |
Forfeited (in shares) | (5,621,000) | |
Vested (in shares) | (44,724,000) | |
Outstanding at end of period (in shares) | 1,316,713,000 | |
Weighted Average Price | ||
Balance at beginning of period (in USD per share) | $ 0 | |
Granted (in USD per share) | 26.57 | |
Forfeited (in USD per share) | 29.37 | |
Vested (in USD per share) | 28.58 | |
Balance at end of period (in USD per share) | $ 26.49 |
Stockholders' Deficit (Details)
Stockholders' Deficit (Details) $ / shares in Units, $ in Millions | Jan. 29, 2021USD ($)$ / sharesshares | Jan. 26, 2021classvote$ / sharesshares | Sep. 30, 2021$ / sharesshares |
Class of Stock [Line Items] | |||
Preferred stock authorized (in shares) | 5,000,000 | 5,000,000 | |
Number of classes of directors | class | 3 | ||
Number of votes per share of common stock | vote | 1 | ||
Maximum ratio of class B common stock held to LLC interests held | 1 | ||
Ratio for cancellation of class B common stock when LLC interests are redeemed or exchanged | 1 | ||
Required ratio of class A common stock issued to LLC interests owned | 1 | ||
Required ratio of class B common stock owned by Continuing Equity Owners to number of LLC interests owned by Continuing Equity Owners | 1 | ||
Shoals Parent | |||
Class of Stock [Line Items] | |||
Interests purchased in subsidiaries (in shares) | 6,315,790 | 6,315,790 | |
Founder and Class B Unit Holder in Shoals Parent | |||
Class of Stock [Line Items] | |||
Interests purchased in subsidiaries (in shares) | 5,234,210 | ||
IPO | |||
Class of Stock [Line Items] | |||
Consideration received from stock issued in IPO | $ | $ 278.8 | ||
Class A Common Stock | |||
Class of Stock [Line Items] | |||
Common stock authorized (in shares) | 1,000,000,000 | 1,000,000,000 | |
Common stock, par value (in USD per share) | $ / shares | $ 0.00001 | $ 0.00001 | |
Stock issued for organizational transactions (in shares) | 81,977,751 | ||
Class A Common Stock | IPO | |||
Class of Stock [Line Items] | |||
Stock issued in IPO (in shares) | 11,550,000 | ||
Price per share of stock issued in IPO (in USD per share) | $ / shares | $ 25 | ||
Class B Common Stock | |||
Class of Stock [Line Items] | |||
Common stock authorized (in shares) | 195,000,000 | 195,000,000 | |
Common stock, par value (in USD per share) | $ / shares | $ 0.00001 | $ 0.00001 |
Non-Controlling Interests - Nar
Non-Controlling Interests - Narrative (Details) - USD ($) $ in Thousands | Aug. 26, 2021 | Jul. 16, 2021 | Jan. 26, 2021 | Sep. 30, 2021 | Jun. 30, 2021 | Sep. 30, 2021 | Jan. 29, 2021 |
Noncontrolling Interest [Line Items] | |||||||
Decrease in noncontrolling interest from vesting (in shares) | 40,665 | ||||||
Tax distributions to non-controlling LLC interest holders | $ 1,864 | $ 2,973 | $ 4,800 | ||||
ConnectPV | |||||||
Noncontrolling Interest [Line Items] | |||||||
Equity interest issued or issuable (in shares) | 209,437 | ||||||
Shoals Parent | |||||||
Noncontrolling Interest [Line Items] | |||||||
Ownership interest (as a percent) | 62.44% | 62.44% | 56.14% | ||||
Class A Common Stock | |||||||
Noncontrolling Interest [Line Items] | |||||||
Stock issued for organizational transactions (in shares) | 81,977,751 | ||||||
Class B Common Stock | |||||||
Noncontrolling Interest [Line Items] | |||||||
Stock redeemed during period (shares) | 10,402,086 | ||||||
Shoals Parent | |||||||
Noncontrolling Interest [Line Items] | |||||||
Interests purchased in subsidiaries (in shares) | 6,315,790 | 6,315,790 | |||||
Founder and Class B Unit Holder in Shoals Parent | |||||||
Noncontrolling Interest [Line Items] | |||||||
Interests purchased in subsidiaries (in shares) | 5,234,210 |
Non-Controlling Interests - Eff
Non-Controlling Interests - Effects of Changes in Ownership (Details) - USD ($) $ in Thousands | 3 Months Ended | 8 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2021 | Sep. 30, 2020 | |
Noncontrolling Interest [Abstract] | |||||
Net income attributable to non-controlling interest | $ 2,790 | $ 0 | $ 1,911 | $ 1,911 | $ 0 |
Increase in accumulated deficit as a result of the Organizational Transactions | 0 | (88,644) | |||
Decrease in accumulated deficit as a result of newly issued LLC Interests in IPO | 0 | 70,976 | |||
Decrease in accumulated deficit as a result of activity under stock compensation plan | 1,200 | 2,607 | |||
Distributions to non-controlling interest | (1,864) | (4,837) | |||
Reallocation of non-controlling interest | 5,717 | 6,005 | |||
Change from net income attributable to non-controlling interest and transfers to non-controlling interest | $ 7,843 | $ (11,982) |
Commitments and Contingencies (
Commitments and Contingencies (Details) | Sep. 30, 2021USD ($) |
Surety Bond | |
Loss Contingencies [Line Items] | |
Maximum potential payment obligation with regard to surety bonds | $ 12,600,000 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Income Tax Disclosure [Abstract] | ||||
Income tax benefit | $ (1,309) | $ 0 | $ (3,123) | $ 0 |
Deferred income tax benefit resulting from increase in the blended state income tax rate | 2,000 | 3,700 | ||
Deferred tax assets, net of valuation allowance | 121,500 | 121,500 | ||
Income taxes receivable | 8,600 | 8,600 | ||
Portion of income taxes receivable due for Tax Receivable Agreement | $ 3,800 | $ 3,800 |
Tax Receivable Agreement (Detai
Tax Receivable Agreement (Details) - USD ($) $ in Thousands | Jul. 16, 2021 | Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Jan. 26, 2021 | Dec. 31, 2020 |
Class of Stock [Line Items] | |||||||
Tax Receivable Agreement, proportion of tax benefits to be paid to TRA Owners (as a percent) | 85.00% | 85.00% | |||||
Deferred tax asset related to the Tax Receivable Agreement | $ 32,100 | ||||||
Payable pursuant to Tax Receivable Agreement related to redemption of interest | $ 107,880 | $ 107,880 | 27,200 | $ 0 | |||
Additional-paid-in-capital pursuant to Tax Receivable Agreement related to redemption of interest | 4,900 | ||||||
Deferred tax asset | $ 73,500 | 121,545 | 121,545 | 16,900 | $ 0 | ||
Payable pursuant to Tax Receivable Agreement related to distribution | 62,500 | 14,400 | |||||
Additional-paid-in-capital pursuant to Tax Receivable Agreement related to distribution | $ 11,000 | $ 2,500 | |||||
Tax receivable agreement liability adjustment | 2,014 | $ 0 | 3,678 | $ 0 | |||
Tax receivable agreement payments due | $ 107,900 | $ 107,900 | |||||
Class B Common Stock | |||||||
Class of Stock [Line Items] | |||||||
Stock redeemed during period (shares) | 10,402,086 | ||||||
Founder and Class B Unit Holder in Shoals Parent | |||||||
Class of Stock [Line Items] | |||||||
Interests purchased in subsidiaries (in shares) | 5,234,210 |
Revenue by Product - Schedule o
Revenue by Product - Schedule of Revenue Disaggregated by Product (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Disaggregation of Revenue [Line Items] | ||||
Revenue | $ 59,840 | $ 52,598 | $ 165,166 | $ 136,765 |
System solutions | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 38,641 | 36,962 | 123,252 | 91,381 |
Solar components | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | $ 21,199 | $ 15,636 | $ 41,914 | $ 45,384 |
Uncategorized Items - shls-2021
Label | Element | Value |
Noncontrolling Interest [Member] | ||
Net Income (Loss), Including Portion Attributable to Noncontrolling Interest | us-gaap_ProfitLoss | $ (5,475,000) |
Member Units [Member] | ||
Net Income (Loss), Including Portion Attributable to Noncontrolling Interest | us-gaap_ProfitLoss | 2,675,000 |
Retained Earnings [Member] | ||
Net Income (Loss), Including Portion Attributable to Noncontrolling Interest | us-gaap_ProfitLoss | $ (5,534,000) |