FTC Solar Inc Q4 2023 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Philip Shen - ROTH MKM - Analyst : Hi, everyone. Thanks for taking my questions. Couple of years ago, your business, customer wins, and momentum were rising pretty quickly in an oligopolistic market. I believe the Jinko and Longi module, UFLPA detentions really hurt you guys. That said, these module vendors have been cleared and are shipping actively into the US and have been for some time. Why haven't you been able to ramp your revenues with them? Were there previously awarded orders, for example, that you ended up losing to others? Can you give us some color on what's happening as these guys ramp up, although on your side, you're not able to ramp up as quickly? Thanks.

Question: Philip Shen - ROTH MKM - Analyst : Okay. Thanks, Patrick. Shifting over to -- I think you guys said, of the $1.7 billion of backlog, maybe $450 million or -ish, roughly that number is on contracted. Can you kind of correct that figure? And then also how much is expected to be delivered in '24. So if you just look at the contracted volumes, how much is set up for '24? Thanks.

Question: Philip Shen - ROTH MKM - Analyst : Right. Can you give it by year though if not quarterly. How much of that $415 million is in '24 versus '25 or beyond? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MARCH 13, 2024 / 9:00PM, FTCI.OQ - Q4 2023 FTC Solar Inc Earnings Call

Question: Philip Shen - ROTH MKM - Analyst : Okay. All right. I see the sequential growth. I just don't know what is the rate of growth. So it's a bit tough to get, I guess, with the breakeven and profitability in Q4 that helps. Execution has been tough, I know. Some of our recent checks suggests you may need to win back the trust of customers. How do you go about doing that? I know it's one step at a time in execution improvement, but have you guys thought through, or can you communicate what that plan might be? Thanks.

Question: Philip Shen - ROTH MKM - Analyst : Okay. Thank you for the color. And I, Patrick, Cathy, I'll pass it on.

Question: Pavel Molchanov - Raymond James & Associates, Inc. - Analyst : Yeah, thanks for taking the question. So you've clearly been taking quite a bit of corporate costs out of the system. That Q1 run rate of between $8 million and $9 million in non-GAAP operating expenses. Is that the the steady stage for the rest of the year? Or does it have further room to decline?

Question: Pavel Molchanov - Raymond James & Associates, Inc. - Analyst : You mentioned that bulk of the backlog and new additions are domestic. If we go back a few years, you were making a strong effort to diversify into Australia, parts of Africa and so forth. Given the amount of headcount that you've cut, are you able to play in these overseas geographies?

Question: Pavel Molchanov - Raymond James & Associates, Inc. - Analyst : Yeah. And then maybe just following up on the international aspect, last August, you announced good size deal with a developer in Italy and Spain. And I think the plan was to start delivering late '23 and continue through '24. Is that timetable still correct?

Question: Pavel Molchanov - Raymond James & Associates, Inc. - Analyst : All right. Thanks very much.

Question: Donovan Schafer - Northland Capital Markets - Analyst : Hey, guys. Thanks for taking my questions. So Ahmad, first I just want to clarify with your comment around, you're being at a rate -- you have a monthly registered run rate right now, booking $50 million per month or adding that to the backlog. Do those, do you mean $50 million that goes into that PO bucket, a purchase order that's for contracted or is it some of that. Does that include awards or projects that go into the awarded bucket? And if it's not one or the other, can you give any rough -- if it's not 100% one or 100% the other, can you give some rough sense of what kind of a mix we're talking there?

Question: Donovan Schafer - Northland Capital Markets - Analyst : Okay. Fantastic. And then for accounts receivable, yeah, I think in the past, so that's come down a bit, but not a lot just on a quarter-by-quarter basis. And given the fairly low level of revenues in Q3 and Q4, yeah, I would have expected it to maybe come down a bit more. And in the past, you've maybe even talked about improving those collections as a way of providing some of the near-term funding. So I'm just wondering if we can get an update there. It looks like there was -- I think Cathy mentioned that some of that was written down, but are there other REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MARCH 13, 2024 / 9:00PM, FTCI.OQ - Q4 2023 FTC Solar Inc Earnings Call amounts in the accounts receivable that are past 90 days or could be coming under pressure for additional write-downs? Just any updates or clarification, that would be helpful

Question: Donovan Schafer - Northland Capital Markets - Analyst : Okay. And then just, let's say, talking about Q1 as the trough, on the Q3 call, I looked back at the transcript and Patrick, you made the comment that you were expecting to improve revenue performance in the first quarter. And obviously with the guidance that's come out, that hasn't played out as expected. So what is it that gives you that -- what gives you confidence this time around that Q1 will be the trough and that you'll see that additional growth in Q2, Q3 that gets you to the breakeven. What do you see now that's different?

Question: Donovan Schafer - Northland Capital Markets - Analyst : Okay. Thank you. That's helpful. I'll take the rest of my questions offline.

Question: Amit Dayal - H. C. Wainwright & Co., LLC - Analyst : Thank you. Good afternoon, everyone. Most of my questions have been asked, but I just wanted to touch on the backlog number. In the footnotes in the press release, you indicate some of the backlog is verbal. Just wanted to understand what the extent of the backlog in that number is from the verbal side of things. And what are the triggers that convert this backlog into contracted orders? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MARCH 13, 2024 / 9:00PM, FTCI.OQ - Q4 2023 FTC Solar Inc Earnings Call

Question: Amit Dayal - H. C. Wainwright & Co., LLC - Analyst : Okay. Thank you for that. And maybe just last one for me. As you get into a recovery phase, revenue starts climbing, et cetera, to the $50 million-plus levels. How do you feel, with respect to your working capital situation, to meet that level of demand with what your balance sheet looks like right now?

Question: Amit Dayal - H. C. Wainwright & Co., LLC - Analyst : All right, guys, thank you. That's all I have. Appreciate it.