Shoals Technologies Group, Inc. (NASDAQ: SHLS) Second Quarter 2022 Earnings Conference Call August 15, 2022 5:00 p. m. Eastern Time
Participating companies
Mehgan Peetz – General Counsel
Jason Whitaker-CEO
Kevin Hubbard – Interim Chief Financial Officer
Conference Call Participants
Brian Lee-Goldman Sachs
Philip Shen – Capital ROTH
Maheep Mandloi – Credit Suisse
Colin Rusch – Oppenheimer
Kasope Harrison as Piper Sandler
Jeff Osborne – Cowen et Cie.
Brett Castelli – Morning Star
Operator
Thank you for staying there. He is the operator of the convention. Welcome to Shoals Technologies Group, Inc. ‘s second quarter 2022 earnings conference call. As a reminder, everyone is in listen-only mode and the convention is being recorded. [Operator Instructions]
Now I would like to speak with Mehgan Peetz, General Councilor. Continue.
mahgan peetz
Thank you, operator, and thank you all for joining us today. The host of the conmigo is CEO Jason Whitaker and interim CFO Kevin Hubbard.
By making this call, control will make forward-looking statements or other forward-looking statements based on existing expectations and assumptions, which are subject to dangers and uncertainties. Listening to and reviewing those comments, you deserve to perceive that those statements, adding forecasts for the full year 2022, are not promises of functionality or effects. Actual effects may differ materially from our forward-looking statements if any of our assumptions are or are due to other factors.
These points include, but are limited to, the threat points described in our filings with the Securities and Exchange Commission, as well as economic and market circumstances, industry conditions, company functionality and monetary results, the COVID-19 pandemic, supply chain disruptions, the availability and value of our parts and materials, the calculation of the project, the minimum demand for our products and the political and regulatory changes.
While we may imply that the assumptions underlying the forward-looking statements are reasonable, each of the assumptions may be erroneous or incorrect and therefore there can be no assurance that the weighted effects of the forward-looking statements will be realized. We caution that any forward-looking statements included in this discussion are made as of the date of this discussion and we assume no legal responsibility to update any forward-looking statements.
Today’s presentation also includes references to non-GAAP monetary measures. You may refer to the data contained in the company’s quarter press release for information on definitions and reconciliations of old non-GAAP measures with comparable monetary measures.
With that, let me pass the message on to Jason.
Jason Whitaker
Thank you very much, Mehgan, and good afternoon, everyone.
I will start by reviewing our functionality in the current quarter, follow up with an update on our expansion initiatives, and then conclude with our recent advancements in the U. S. solar market. USA I will then pass the floor to Kevin, who will provide a review of our monetary results.
We recorded record cash inflow and gross profit in the current quarter, which grew by 23% and 9%, respectively, year-over-year, despite significant demanding situations and uncertainties facing the industry. To put some attitude into this statement, this quarter represents the sixth consecutive quarter in which Shoals recorded record quarterly revenue and gross profit year-over-year.
Gross margin for the quarter 38. 9%. Gross margin decreased this quarter compared to last year, as the current quarter of 2021 benefited from an exceptionally superior combination of relative parts of BLA’s sales, while this quarter was more in line with our previous combination. We also had logistics prices and higher raw curtains as a percentage of sales this quarter than last year.
Adjusted EBITDA increased sequentially, but decreased slightly year over year, reflecting our continued investment in general and administrative expenses for our expansion initiatives. We’re starting to see a pullback in those investments and we expect the year-over-year rate of expansion of our general and administrative expenses to decline in the fourth quarter of this year.
Demand for our products remains very strong, and we ended the current quarter with a record order book and orders of $327. 2 million, a build-up of 63% year-over-year and 8% sequentially. 3rd quarter and is expected to continue growing the rest of the year.
Component sales increased 97% year-over-year, driven by higher shipments of workshop battery products, as well as shipments of solar products to a significant number of new customers. Bajios through the purchase of parts that will work with such systems.
By redefining the performance, quality, reliability, installation savings, and visitor service that Shoals offers, they open up to seeing our mixed architecture as they pass and purchase the BLA. Once consumers have made the transition, it regularly marks the beginning of a long term relationship.
System Solutions’ profit generation increased 11% year-over-year due to continued strong demand for BLA and market percentage gains. , representing a sevenfold increase in the number of BLA consumers since our IPO last year.
Customer interest in our newly introduced products continues to grow, with our garage ev control batteries and charging products experiencing the highest demand. We continue to increase our production with our new cable control products to meet visitor demand. The order book and orders placed for cable control products have more than tripled since the beginning of the year. Although these products contribute little to revenue, they generate higher gross margins and contribute to our profitability.
Sales of our machine shop products also contributed to the quarter’s earnings expansion, and the backlog of orders in this component of our business continues to grow. We are on track to complete the certification procedure for our high-capacity blah 2. 0 and plug-and-play harnesses. in the current part of the year. We expect these products to further drive our expansion, as BLA 2. 0 will have a sales value consistent with the average megawatts higher than our existing products and high-capacity plug-and-play homeowners will be consistent with us to serve a fast-growing new application.
We also continue to make progress in our overseas expansion. More recently, after the end of the quarter, we announced that we had made the effective transition from consumer to BLA in Honduras. This is the correct evidence given that Honduras is a hard and cheap labor market and provides strict approval of the benefits of our existing brands, even in spaces where professional hard work is less expensive than in the United States and Europe. BLA can reduce hard work costs, safety, build reliability and decrease maintenance expenses.
In Europe, our products are fully qualified and our sales team remains focused on building the pipeline and turning this pipeline into an order book. We are also beginning to see further traction in foreign markets as a result of poor management for export financing and import banks.
Now let’s move on to our business EV. La call from visitors exceeds our expectations and we are seeing immediate order growth, thanks in large part to the team’s progress with Scopus’ advertising fleets and operators. We recently obtained UL certification for many of our products and expect the rest to be qualified until the end of the year.
During the quarter, we placed orders for full-charge formulas for advertising fleets transitioning to electric vehicles. These orders constitute our first sales of charging formula responses and a key step in advertising our diversity of electric vehicle products. Prior to this quarter, we had sold components.
We also obtained our first orders from school bus electrification consumers who are attracted by the declaration option and ease of installation of our AV charging products.
Now I will take a moment to tell you about the recent positive developments in the solar market. The start of the quarter was marked by delays and uncertainties caused by the U. S. Department of Commerce’s investigation. through certain countries in Southeast Asia. Much of the uncertainty was eased when the White House announced a 2-year tariff exemption for solar panels. Our conversations with consumers imply that the tariff port created through President Biden’s executive action has been a vital sentiment turning point. And we have noticed that projects that have been overdue or put on hold are being recovered.
Although we cannot yet quantify the full impact of the recently enacted inflation cut, we see a huge advantage for the market. The creation and expansion of [indistinguishable] along with new incentives for garage NIVs deserve to boost demand for our products. Although how much and how fast is something we don’t know yet.
We’ve worked hard since early 2021 to position Shoals to succeed in the challenging and dubious landscape facing the solar industry in the early part of this year, and the company’s strong functionality is a reflection of that. Now that many of those headwinds are easing, we see the possibility of improving our market expectations. The low capital intensity and flexibility of our production procedure allow us to temporarily adapt to adjustments in demand.
We are well prepared to meet the increases in demand, as the production ramp of our new plant is advanced. And despite the tight task market, we are increasing our production workforce, adding more than a hundred teammates per hour in the quarter at the moment. It will be imperative as we continue to increase our production.
Finally, I am very pleased to welcome Dominic Bardos as my new CFO. Dominic brings more than 30 years of global finance and accounting experience across many industries, adding automotive, retail and commercial services. Dominic is most recently the CFO of Holley, a publicly traded designer, distributor and manufacturer of high-performance products for car enthusiasts. Dominic will begin early in the fourth quarter and we are delighted to have him on board.
Kevin has done a wonderful job at the helm of the finance team. Prior to serving as interim CFO, Kevin was a longtime representative of our company and will continue to assist us in this role during Dominic’s transition to our organization.
I am also pleased to announce the addition of Jeannette Mills and Robert Julian to our Board of Directors. Jeannette and Robert are experienced executives with a proven track record of corporate governance and leadership across a variety of purposes and industries. Jeannette will update Peter Jonna, who resigned from our board at the same time as Jeannette’s arrival.
I would like to thank Peter for his service and valuable contributions to Shoals as a director, and welcome Jeannette and Robert on board. We are very happy with the benefits that Jeannette and Robert’s significant delight can bring to our company.
Now I’ll turn the floor over to Kevin, who’s going to talk about our currency effects for the current quarter of 2022. Kevin?
Kevin Hubbard
Thank you Jason.
In the current quarter, earnings rose 23% from the same time last year to $73. 5 million, driven by 11% increases in formula responses and 97% in components. Garage shipments, as well as the addition of a significant number of new customers, which would likely lead in the first place to more opportunities at the component level as we move to turn them into our formula solutions.
The expansion of formula responses reflects the increased demand for the collection formula as Shoal progresses. System responses accounted for 77% of earnings in the quarter, up from 86% in the prior-year era and 69% in the prior quarter.
Gross profit increased 9% to $28. 6 million, compared to $26. 2 million in the prior-year era. Gross margin as a percentage of cash at 38. 9%, compared to 43. 8% in the same was last year. As Jason mentioned, the year-over-year decline in gross margin was based in part on the second quarter of 2021, with a higher proportion of BLA sales relative to components, while the second quarter of 2022 was more in line with our previous mix. We also had higher logistics prices and raw curtains as a percentage of sales this quarter than last year.
General and administrative expenses for the current quarter were $13. 3 million, compared to $10 million at the same time last year. This substitution is primarily the result of increased stock-based compensation, an expected buildup on payroll due to staff buildup. to our expansion and product initiatives, and the prices of the new public company.
Adjusted EBITDA for the current quarter was $19. 8 million, compared to $20. 6 million in the prior-year period. As mentioned above, we expect adjusted EBITDA to grow at a slower rate this year, reflecting the progression of several investments in -Year expansion clients and expansion projects in the coming years.
We remain confident that the really extensive expansion we are experiencing will increase our adjusted EBITDA margin as we gain leverage advantages in SG’s outflow.
Adjusted net revenue source of $11. 8 million in the current quarter, compared to $14. 7 million at the same time last year. Please refer to the adjusted NET income reconciliation tables in our current quarter press release for our GAAP results.
As of June 30, 2022, the order book and foreclosed orders amounted to $327. 2 million, representing a new record for the company and an accumulation of 63% and 8% over the same era of the year prior to March 31, 2022, respectively. The increase in the order book and foreclosed orders reflects the continued strong visitor demand for Shoal products.
Let’s move on to our perspective for the total year. Based on existing market situations and feedback from our consumers and team, we reaffirm our previous guidance and expect 2022 earnings to be between $300 million and $325 million, an increase from 41% to 52% year-over-year.
We expect adjusted EBITDA to be between $77 million and $86 million and adjusted net revenue stream to be between $45 million and $53 million. In addition, we expect capital expenditures in 2022 to be between $7 million and $8 million. In addition, at the midpoint of our outlook, we lately expect to generate between 45% and 50% of our revenue, adjusted EBITDA and adjusted net revenue stream in the third quarter.
Now let’s come back to you, Jason, for the closing remarks.
Jason Whitaker
Thank you, Kevin.
I would like to conclude by thanking all our consumers for their commitment to Shoals, our employees for their contribution to the good fortune of our company and our shareholders for their continued support.
The first part of 2022 has gone well and we will not face many of the headwinds we have faced in the first and final quarters of the current part of this year. This, combined with strong demand for solar and electric vehicles, the good fortune of our new products and sales initiatives, and the strong strength of our core BLA products, gives us optimism about what we can achieve for shareholders in the coming quarters.
And with that, thank you all, and I today your time. Now we will open the line for questions.
Q&A session
Operator
[Operator Instructions] The first comes from Brian Lee of Goldman Sachs.
Brian Lee
I guess the first one is correct: you talked about the backlog and assigned orders that accrue here through the third quarter and then you expect them to grow for the rest of the year. Maybe, Jason, can you give us a concept of what kind of expansion you’re talking about, if there’s a way to quantify that?
And then how do you think about the e-book order policy at this time of year?We’re sitting in mid-August when you start expecting expansion by 2023, what’s the typical point you hope to be?in terms of degrees of policy when thinking about the possible expansion of profits in the year off?Then I have a follow-up.
Jason Whitaker
So when you look at the global order book and orders that we’ve talked about in the past, on the right, our purpose is for it to continue to grow from quarter to quarter. seasonality, we have not experienced it in the not too distant past. But I’m very excited about what we can achieve in the current quarter, especially given the headwinds we had before the announcement of the 2-year tariff exemption. in solar panels.
And what I can tell you is that since that time, our consumers have indicated that this is definitely a turning point when you look at visitor sentiment and the fact that we have to see our order patterns normalize as a result of that. Mention that the ira’s recent announcement definitely accelerates this as well. But as for the precise main points right now, Brian, we don’t have anything to percent today about that.
Brian Lee
It is ok. That’s fine with me. And then, I guess, on the margin targets here. I appreciate the extra color. It turns out that the full-year forecast implies that you’ll be around 26% of the adjusted EBITDA margin point for the current part of the year. I think in the afterlife there was talk of some kind of 30% and more as the right kind of target diversity for the company.
So if you think about the progress of those investments, how temporarily do we see them translate into returns?Is this something where you go back to that 30% point in the first part of 23?Or will it take longer than that, maybe even in the middle or part of next year’s time?
Jason Whitaker
Brian, when you take a look at the margin profile, which we talked about, the expansion that we’ve noticed in the order book and the orders awarded the first component of this year, that also continues, this trend is very oriented towards our whole formula. solutions, in BLA components. And as we mentioned, our BLA had a top margin profile, actually. revenue, resulting in gross margins of almost 44%.
So as we continue to turn consumers into our full-system BLA solution, we expect our combine to continue and ultimately drive gross margins north, which is a downward flow.
And when we take a look at SG investments
Operator
The next one comes from Philip Shen of ROTH Capital.
Philip Shen
The first is the Inflation Reduction Act. I know you just talked about how things are speeding up. If there is a way to quantify the positive effect of IRAs on business, it would be interesting, especially when it comes to quotes.
And also, can you tell us what the benefits of IRA can be for you?Unlike other manufacturers, it turns out that it doesn’t necessarily have tax credits for production and perhaps the biggest merit is the 30% itc that its consumers do, as well as the additional ITC add-ons they enjoy. But maybe I was wondering if we missed something and if there’s anything else I see, maybe in the electric vehicle industry or somewhere else, that ultimately benefits you. to quantify that, that would be great.
Jason Whitaker
There’s no challenge, Phil. So, as you can imagine, I think a lot of other people would share that feeling. We are very excited about the clients that the Inflation Reduction Act creates for the industry as a whole. And I would say that this is arguably one of the most shocking laws that the sun industry has won so far. And we have already begun to have consumers touch us to communicate about domestic production and others.
I think two things I should point out, Phil, is that when you look at the prevailing wage effect, it will necessarily continue to increase the price of our production process and the savings we can offer compared to the labor force in the field. Not to mention, standalone IP food for the garage is definitely a tailwind when you check out our garage offering.
And on the electric vehicle side, tax credits were reinstated. I think they got rid of the 200,000 equipment limit along with about $3 billion provisioned for the electrification of the USPS fleet. And obviously, it will require a lot of infrastructure.
When you take a look, as you mentioned, on the right, when you take a look at some of the provisions that exist, I mean, there are a lot of provisions for manufacturers of e-books, metal components, inverters and the like. But what I need to point out The important thing is that the detailed assignments are yet to be defined. And I think there’s still an opportunity for us here. But anyway, as I said before, it’s a huge credit to the industry as a whole, especially since we’re a domestic manufacturer.
Philip Shen
My query at the moment considers the scenario of detention of the pla in the United States. Holdings have been happening since late June for some companies, some key companies. If this scenario continues, do you see a problem threat to your back income stream?Or do you think you are absolutely removed from this scenario? And in any case, if this LPA scenario in the US. UU. se solves faster than expected, could there be merit in his rear-end numbers?
Jason Whitaker
I believe, Phil, as we have already said, that our bottom-up research reinforces the option to reiterate the guidelines today. Look, I don’t need to forget the U. S. LPA. The effect of it, however, does not really see it directly. And what I mean by that, Phil, is that we continue to help what I would call multiple EBOS design optimization projects. of the U. S. LPA USA I actually think it was more motivated, based on what happened in the afterlife with WRO and some of the AD/CVD stuff. And I believe that the paintings made through the industry in total has so far allowed maximum projects to move forward without any specific delay. Therefore, I do not see a direct replacement in the industry as a direct result of the U. S. APA. UU. at this time.
Operator
The next one comes from Maheep Mandloi of Credit Suisse.
maheep mandloi
Here Maheep Mandloi of Credit Suisse. Just a query about the combined where we saw a strong expansion of components in the current quarter. And we deserve that we expect a similar combination for the time being part of 22 for you?
Jason Whittaker
So, as we have talked about in the past, over time we expect the parties to stabilize and be relatively strong from the absolute dollar attitude.
Thus, our relationships with new consumers begin with the acquisition of factors that will strengthen their ability to work in this type of infrastructure. And as I’ve already pointed out, the first component of the year, as it has continued, I’ve noticed a very strong expansion in our order ebook and orders placed that are actually based on the BLA aspect of things, creates a top margin profile.
So, coupled with the fact that in the current quarter of 21 we had a disproportionate quarter for full formula responses compared to parts this year, we expect that with the backlog and assigned orders containing a significant amount of BLA itself, this will eventually continue to grow as the parts begin to remain stable.
maheep mandloi
And only on the coin stage here. You said a great little quarter with $10 million here. Can you communicate about the coins? You said expansion in the current part of the year, how do we think about it?And any new current capital problems to foresee in case the U. S. PLA is not in the case of the U. S. EPL. Will the U. S. have problems with a contract later?
kevin hubbard
Yes, it’s Kevin. Working capital, I mean, certainly, we hoarded coins in the quarter and used them to pay off the debt. While we’re starting to look at the third quarter and fourth quarters, we’re looking at our inventory. begin to flatten out a bit at the end of the third trimester and fourth trimester. And then the need for current capital deserves to stabilize a bit. But keep in mind that as we continue to drive growth, we go to a user and use coins for some quarters and borrow coins for some quarters. So, we’re going to see some variability in that regard.
maheep mandloi
And then a follow-up, can you remind us of the liquidity you have lately?
Kevin Hubbard
Well, as of June 30, we had $10 million in cash. And we had, I think, about $75 million in the revolver available.
Operator
The next one comes from Colin Rusch of Oppenheimer.
colin hurry
Can you talk a little bit about the competitive environment and all sorts of new entrants or the evolution of that context that you see here over the last few weeks?
Jason Whitaker
So when you look at the competitive landscape in general, it’s true, it’s very similar to what we’ve talked about in the afterlife. I still don’t see a significant festival in the form of our EV formula solutions. And the competitive landscape remains the same on the sun side. So I haven’t noticed any change in this regard in the afterlife or even in recent times since the ANNOUNCEMENT of the IRA.
colin hurry
So when you take a look at your order book, can you know how much comes from the electric vehicle side?Or is it one hundred percent solar?
Jason Whitaker
So, in fact, it’s not one hundred percent solar. At this point, we are not detailing the main points of the order book, whether they are new products or new segments such as electric cars or even international. But what I can say is that we’re very, very excited about what we’ve done. been able to achieve on the side of electric mobility.
And when you know that we literally just launched this product offering, in fact, before the sales team-based plan that deals with fleet electrification, as well as the incentives for school buses out there. So, again, electric mobility continues to build up and we talk not only about new products in the form of cable control that have already been launched, but also about the garage aspect of things.
Operator
The next one comes from Joseph Osha of Guggenheim Partners.
unidentified analyst
So, it’s Hilary for Joe. La most of my questions have been answered. So just one thing I sought to address, and that was foreign markets, especially as they continue to gain traction. This quarter, however, I was just hoping that it would tell us when we could start to see foreign markets start to make up a larger percentage of the company.
Jason Whitaker
So, as you mentioned, okay, and we went back to our comments ready, we recently assigned a BLA opportunity to Honduras, which further reinforces the price our product offers when you look only at the look of things, but also the quality. , reliability, OR
From their point of view, our products, as we have mentioned in the past, are fully qualified, and the focus of our sales team today is to continue to build this channel and our goal is to turn this channel into an order book. , which the organization is also doing. And we also see, I should mention increased traction in foreign markets as a direct result of the Biden administration for financing import and export banks.
And as you do, listen, while we’re working on the precise main points right now, however, as we continue to gain traction in expanding our foreign side of things and other expansion initiatives, we expect our business to diversify geographically speaking over time. .
Operator
Our next one comes from Kasope Harrison of Piper Sandler.
Kasope Harrison
Maybe it’s just a follow-up to Maheep’s question. As you move beyond 2022 and think about this corporate structure 23 and beyond, how do you think about money?What does a smart money conversion cycle look like for Shoals on a consolidated basis?
Kevin Hubbard
When we think about. . . just looking at the long term and where we are in our loose money flow, on the right, we certainly have a couple of things. We look at our – the acquisition of tangible capital assets is actually the other What we are obliged to do is our distribution for non-controlling participation. So from that perspective, the money cycle is actually moving forward, and we hope to take credit for that and we’re actually seeing debt repayment as we go along. through the 3rd trimester and fourth trimester.
Kasope Harrison
It is ok. And not necessarily just with the time of year part, however, as you move beyond the moment part, what do you think that number looks like?Is it 100, 70? Any level would be useful.
Kevin Hubbard
Oui. Je, I think when we think about it, moving towards 2023, I don’t think we’ve looked that far, but we’ll have to answer you on that issue.
Kasope Harrison
That’s fine with me. And then just a follow-up of the EV product. Congratulations on the launch. I’m just wondering when you’ll expect to see a significant increase in orders to the point that you can reveal the proportion of your order eBook related to this new business. At what point do you expect to gain significant momentum in the electric vehicle sector.
Jason Whitaker
Oui. Je means, again, very satisfied and enthusiastic about what we were able to achieve in the short term. Again, we are well ahead in the plan based on our product that we offer. And I think that only solidifies the opportunity going forward when you take a look at how much infrastructure you want to deploy. And you’ll see the significant savings we can offer while increasing reliability at the time of installation. As with anything else, when you look at the benchmark, once we gain extra traction and a little more stability, it’s something that definitely comes out. But at the moment, we’re not doing that today.
Kasope Harrison
That seems fine to me. And just a little cleaning question. How are the systems/components matched for the current part of the year?
Jason Whitaker
We have not published a figure. But then again, what I can say is that a significant portion of the order book and attributed orders that were recorded this year come in the form of our full-formula solutions, especially BLA. Expect the BLA aspect of things to be a bigger contributor as we move into the third and fourth quarters and even early next year.
Operator
The next one comes from Jeff Osborne of Cowen and Co.
Jeff Osborne
Jason, I had 2 quick consultations after Phil’s consultation on the US LPA. USA I’m just curious about one of the new orders he’s won in recent weeks since President Biden’s announcement on June 6. Does someone delay orders or dictate that orders are subject to Customs Clearance?So I’m just looking to figure out some kind of mechanics with the possible uncertainty there?Does it lead to a small role or not?
Jason Whitaker
Excellent question, Jeff. For the attitude of the US LPA. In the US or just in general, we don’t see any orders delayed because of this, there are no permanent sun orders cancelled because of this. So, as I mentioned before, don’t look at what I would call direct effects that may characterize U. S. LPA in particular. USA today.
Jeff Osborne
they gave it to me And then what are the ? He discussed about a hundred additional workers with the short-time expansion. Can you remind us what they were when you were limited in the afterlife and what they are now or what you expect them to be for BLA and. . .
Jason Whitaker
I mean, the deadlines vary depending on where this task is located. I mean we haven’t published any accurate response time values because it varies so much from task to task. I mean, for example, Jeff, I mean you look at things as undeniable as one of the subcomponents as an input into the BLA aspect of things, maybe a connector, which is a meaningless component from the COGS POINT of view. But when you have a panel manufacturer that has been coupled to a quick connector, we want to consume that coupling component of that connector, which can lead to delays.
So it actually varies quite a bit. But again, you’re referring to the additional team members we can add. Very, very, very pleased to have them on board, and it continues to grow as we go through the year, I’m very excited about the plan. that the company as a whole has put in a position to be able to achieve by bringing those team members together and looking forward to what we can achieve in the coming quarters.
Jeff Osborne
good to hear And very quickly, is there a transition of your consumers with the release of the 2. 0 edition? Like any education or update with this, can this be something to look out for in the coming months?
Jason Whitaker
So we’re having some initial conversations, but we haven’t released a full product launch yet. But yes, I would keep an eye on how it progresses next month, yes.
Operator
Our next one comes from Brett Castelli of Morningstar.
Brett Castelli
Maybe it will only stay at the BLA 2. 0. I just think it discussed in the ready comments that it could have an increase consistent with the average selling value of one dollar per megawatt.
Jason Whitaker
We have not yet provided accurate figures related to BLA 2. 0. But again, when you take a step back and see that the product we’re introducing into the market incorporates more capacity into the product itself. it will result in further construction and will eventually allow us to have an increase in potential profit for example, which in the end equates to $2 per megawatt.
So, in doing so, it also provides an additional price that we will be able to return to our visitor in the form of an effect when they implement our product itself, with that feature itself, with the features we are reintegrating into. BLA 2. 0 will also allow them to achieve more savings in hard work in the field.
Brett Castelli
It is ok. And then on the EV charging side, can you remind me if your product is more in the Tier 2 or AC market or the fast-charging DC market?
Jason Whitaker
Like all of our other existing product lines, whether it’s solar, storage, or EV, we’re technology-agnostic. is a combination of Level 2 and Level 3 or DC fast chargers. Therefore, it depends on the specific features of the site and we can work with all configurations.
Operator
This concludes today’s question-and-answer consultation and convention call. You can disconnect your lines. Thank you for your participation and have a good day.