GlobeNewswire Inc | Aug 11, 2021 06:30AM EDT

August 11, 2021

Second Quarter Highlights and Recent Developments

-- Second quarter revenue of $50.1million; total 1H21 revenue up 39% y/y; -- Addedtoexecuted contracts and awarded orders,nowtotaling$419millionYTDthroughAug.1*; -- Continuingtowinnew customers, including another top5construction firm/EPC; -- Recognized firstrevenue for ourSunPathsoftwaresolution; -- Sold stake in minority investment (Dimension Energy) for $22 million;and -- Targeting significant 2H21 revenue growth,withincreased logisticscostimpact in Q3 followed bysignificant progresstoward profitabilityinQ4

AUSTIN, Texas , Aug. 11, 2021 (GLOBE NEWSWIRE) -- FTC Solar,Inc. (Nasdaq: FTCI), a fast-growing global provider of solar tracker systems, software and engineering services, today announced financial results for thesecondquarter endedJune 30, 2021.

Revenue for the second quarter came in above the high-end of our guidance rangefor the period, withlower-than-expectednon-GAAPoperating expenses, said Tony Etnyre, FTC Solar President and Chief Executive Officer.Despiteanadditional$10millionofexpenseincurred in a continued challenging and tighteningglobal logisticsenvironment,ourNon-GAAPnet loss was within our guidance range.

While the solar industry continues to contend withhighercommodities and logisticspricing,FTC Solar has takenmeaningfulactions to mitigate the impact toourbusiness,while providing compelling solutions for our customers.During thisdifficult time for the industry, we continue to work with our customerstolimit the impact of theseshort-termcost disruptions,whileat the same timedeveloping innovative logistics solutions that provide price certainty for our customersanddrivesignificant improvementtowardsprofitabilityforQ4.

Thisapproachhas helpedsupport acontinued growth indemandfor our products.This demand is reflected ingrowth of our contracted and awarded orders,which have grown385% on a year-to-date basis through August 1,with another $203million added sinceourlast update as ofJune 1. Excluding the amount included in reported first-half revenue, executed contracts and awarded orders as of August 1were$478million,with expected deliverydatesin 2021 and 2022.

Summary Financial Performance: Q2 2021 and Q2 2020 (in thousands, except per share data and percentages)

GAAP Non-GAAP Three Months Ended June 30, 2021 2020 2021 2020 Revenue $ 50,108 $ 51,157 $ 50,108 $ 51,157 Gross margin -32.04 % -2.70 % -16.82 % -2.54 %Operating $ 59,906 $ 4,576 $ 8,325 $ 4,179 expenseOperating loss $ (75,963 ) $ (5,958 ) $ (16,746 ) $ (5,479 )Net loss $ (55,841 ) $ (6,776 ) $ (16,971 ) $ (5,623 )Diluted EPS $ (0.70 ) $ (0.09 ) $ (0.21 ) $ (0.08 )

See reconciliations of all non-GAAP to GAAP measures presented in this release in the tables below.

*Includesamountsincludedinfirst andsecondquarter reported revenue.We define executed contracts and awarded ordersas orders that have been documented and signed through a contract or where we are in the process of documenting a contract but for which a contract has not yet been signed. Seepress release textfor current balance of executed contracts and awarded orders.

Second Quarter 2021 ResultsTotal second quarter revenue was $50.1million,ahead ofthe companystarget range.This representsa decline of approximately2%compared withthesecondquarter of 2020,on slightly lower product volume.

GAAPGross losswas $16.1million,up from $1.4millionin theprior year period, driven primarily by$10millioninincreased logistics expense that was not passed along to customers,a strong ramp up in employee count and other overhead expenses to support the companysstronggrowth trajectory,anda $7.2million increase instock-based compensationassociated with thetransition to a public company.

GAAP operating expenses were $59.9 million, including $49.0 million in stock-based compensation as a result of the companys IPO, relating to one-time or catch-up charges for prior-issued stock.On a non-GAAP basis, excluding stock-based compensation and certain otherexpenses, operating expenseswere$8.3million, better thanthe companysoriginalguidance rangedue totiming between quarters,whichcomparesto$4.2million in the year-ago quarter.Theyear-over-yearincreasewasdriven primarily by necessary growth in staffing and other public-company preparations. GAAPnetloss was $55.8million, or $0.70per share,compared toanetlossof $6.8million, or $0.09per share in the year-ago quarter.Non-GAAP net loss, which excludes a$20.6million gain from the sale ofaminority investment in Dimension Energy,anda$56.2millionimpact of stock-based compensation, IPO related expenses and consulting fees and other non-cash items, was $17.0million, or $0.21per share. This wasalso within the companysguidance range,despite absorbing an additional$10million in logistics expense in the quarter as the global logistics environment worsened,and notall ofthese costs wereable to be passed along tocustomers. This resultcomparestoanon-GAAP net loss of $5.6million, or $0.08 per share in the year-ago quarter.

Second Half 2021OutlookLooking ahead,the company expects to see sequential revenue growthfor the remainder of the year. The third quartershouldsee improved revenue;however,a continuedworsening of logistics costs will delay improvement in profitability until the fourthquarter. In the fourth quarter, the company expectsto see significant sequential revenue growthand a transitiontowardprofitability,driven by the timing of deliveries on contracted projects, cost-savinginitiativesand the implementation in the quarter of alternative shipping methods.

Severalfactors are included in FTC Solars outlook forthe second half of 2021, including:

-- Strong demand for the companys solar solutions,which isexpected to drive significant increase in 2H shipments,even in the face ofelevated steel,logisticsand other solarprojectinputcoststhatare causing solar developers to re-evaluate construction timelines for uncontractedprojects;

-- Innovative ways to reduce project logistics costsusingalternative shipping methods, whichwill helptomitigate themarginimpactsduringthe second half of the year,primarily in the fourth quarter. The anticipated logistics impact toQ3isapproximately $12-$15million;

-- Continued implementation of acost-reduction roadmap that is expected to yield measurable results in the second half of this year, further mitigatingpotentiallyunfavorablecommodity and logisticsimpacts;

-- Customerdecision and steel procurementtimelinesdriving more volume to Q4 vs. Q3; and

-- The potential for revenue shifts between periodswhich, givenFTC Solars size,fast pace of growth and the large size of several projects inthepipeline, can have ameaningfulimpact.

Based on these and other factors, including our current backlog and forecasts, and accounting for direct cost uncertainty for the third quarter, the company expects:

($ in millions) 2Q 2021 Actual 3Q 2021Revenue $50.1 $56.0-$62.0Non-GAAP Operating Expenses $8.3 $8.7-$9.7Adjusted EBITDA $(16.7) $(19.7)-$(14.7)

For the fourth quarter the company currently expects a significant increase in revenue relative to the third quarter. With the partial implementation of our new logistics methods beginning to take effect in the quarter, as well as our cost roadmap reduction initiatives, we are targeting significant progress toward profitability on an Adjusted EBITDA basis.

For the full year 2021, we expect revenue to exceed $310 million.

This outlook would result in full-year revenue growth in excess of 65% which is anticipated to be substantially faster than overall market growth expectations.

SecondQuarter 2021 Earnings Conference CallFTC Solars senior management will host a conference call for members of the investment community that will be held at 8:30 a.m. E.T. today, during which the company will discuss itssecondquarter results, its outlook and other business items. This call will be webcast and can be accessed within the Investor Relations section of the FTC Solar website at investor.ftcsolar.com. A replay of the conference call will also be available on the website for 30 days following the webcast.

About FTC Solar Inc.Founded in 2017 by a group of renewable energy industry veterans, FTC Solar is afast-growing, global provider of solar tracker systems, technology, software, and engineering services. Solar trackers significantly increase energy production at solar power installations by dynamically optimizing solarpanel orientation to the sun.FTC Solars innovative tracker designs provide compelling performance and reliability, with an industry-leading installation cost-per-watt advantage.

Forward-Looking StatementsThis press release contains forward looking statements. These statements are not historical facts but rather are based on our current expectations and projections regarding our business, operations and other factors relating thereto. Words such as may, will, could, would, should, anticipate, predict, potential, continue, expects, intends, plans, projects, believes, estimates and similar expressions are used to identify these forward-looking statements. These statements are only predictions and as such are not guarantees of future performance and involve risks, uncertainties and assumptions that are difficult to predict. You should not rely on our forward-looking statements as predictions of future events, as actual results may differ materially from those in the forward-looking statements because of several factors, including those described in more detail in our filings with the U.S. Securities and Exchange Commission, including the section entitled Risk Factors contained therein. FTC Solar undertakes no duty or obligation to update any forward-looking statements contained in this release as a result of new information, future events or changes in its expectations, except as required by law.

FTC Solar Investor Contact:Bill Michalek Vice President, Investor Relations FTC Solar T: (737) 241-8618 E: IR@FTCSolar.com

FTC Solar Media Contact:Scott Deitz On behalf of FTC Solar T: (336) 908-7759

FTC Solar, Inc.Condensed Consolidated Statements of Comprehensive Loss(in thousands, except share and per share data)(unaudited)

Three Months Ended June 30, Six Months Ended June 30, 2021 2020 2021 2020 Revenue: Product $ 35,755 $ 42,849 $ 92,217 $ 73,318 Service 14,353 8,308 23,598 10,215 Total revenue 50,108 51,157 115,815 83,533 Cost of revenue: Product 43,885 44,623 98,881 68,370 Service 22,280 7,916 32,872 9,565 Total cost of 66,165 52,539 131,753 77,935 revenueGross profit (16,057 ) (1,382 ) (15,938 ) 5,598 (loss)Operating expensesResearch and 5,585 1,515 7,539 2,609 developmentSelling and 3,258 818 4,358 1,333 marketingGeneral andadministrative 51,063 2,243 56,147 4,718 (Note. 9)Total operating 59,906 4,576 68,044 8,660 expensesLoss from (75,963 ) (5,958 ) (83,982 ) (3,062 )operationsInterest expense (200 ) (121 ) (214 ) (233 )Gain fromdisposal in 20,619 - 20,619 - equityinvestmentGain (loss) onextinguishment - (41 ) 790 (41 )of debtOther expense (46 ) - (46 ) - Loss before (55,590 ) (6,120 ) (62,833 ) (3,336 )income taxes(Expense)benefit from (115 ) (19 ) (96 ) 139 income taxesLoss fromunconsolidated (136 ) (637 ) (354 ) (159 )subsidiaryNet loss $ (55,841 ) $ (6,776 ) $ (63,283 ) $ (3,356 )Othercomprehensive income (loss):Foreign currencytranslation 7 (16 ) 6 (8 )adjustmentsComprehensive $ (55,834 ) $ (6,792 ) $ (63,277 ) $ (3,364 )lossNet loss per share:Basic $ (0.70 ) $ (0.09 ) $ (0.87 ) $ (0.05 )Diluted $ (0.70 ) $ (0.09 ) $ (0.87 ) $ (0.05 )Weighted-averagecommon shares outstanding:Basic 79,229,174 74,612,811 73,106,935 70,994,078 Diluted 79,229,174 74,612,811 73,106,935 70,994,078

FTC Solar, Inc.Condensed Consolidated Balance Sheets(in thousands, except share and per share data)(unaudited)

June 30, December 2021 31, 2020 ASSETS Current assets Cash $ 149,672 $ 32,359 Restricted cash ? 1,014 Accounts receivable, net 46,981 23,734 Inventories 7,810 1,686 Prepaid and other current assets 30,950 6,924 Total current assets 235,413 65,717 Investments in unconsolidated subsidiary ? 1,857 Other assets 5,252 3,819 Total assets $ 240,665 $ 71,393 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities Accounts payable $ 27,620 $ 17,127 Line of credit ? 1,000 Accrued expenses and other liabilities 19,525 18,495 Accrued interest ? related party ? 207 Deferred revenue 8,201 22,980 Total current liabilities 55,346 59,809 Long-term debt and other borrowings ? 784 Other non-current liabilities 4,547 3,349 Total liabilities 59,893 63,942 Commitments and contingencies (Note 8) Stockholders? equity Preferred stock par value of $0.0001 per share,10,000,000 shares ? ? authorized; none issued as of December 31, 2020and June 30, 2021Common stock par value of $0.0001 per share,850,000,000 sharesauthorized; 66,155,340 and 84,301,595 shares 8 1 issued and outstanding as of December 31, 2020 andJune 30, 2021Treasury stock, at cost; 9,896,666 and 10,762,566 ? ? shares as of December 31, 2020 and June 30, 2021Additional paid-in capital 286,687 50,096 Accumulated other comprehensive income (loss) 3 (3 )Accumulated deficit (105,926 ) (42,643 )Total stockholders? equity 180,772 7,451 Total liabilities and stockholders? equity $ 240,665 $ 71,393

FTC Solar, Inc.Condensed Consolidated Statements of Cash Flows(in thousands)(unaudited)

Six Months Ended June 30, 2021 2020 Cash flows from operating activities Net loss $ (63,283 ) $ (3,356 )Adjustments to reconcile net loss to cash used in operating activities:Stock-based compensation 56,641 933 Depreciation and amortization 42 40 Loss from unconsolidated subsidiary 354 160 Gain from disposal of equity investment (20,619 ) ? (Gain) loss on extinguishment of debt (790 ) 41 Warranty provision 1,627 4,091 Warranty asset (511 ) (447 )Bad debt expense 23 ? Deferred income taxes ? (2 )Other non-cash items ? 32 Changes in operating assets and liabilities: Accounts receivable, net (23,270 ) (29,067 )Inventories (6,123 ) 4,121 Prepaid and other current assets (23,892 ) (6,191 )Other assets 678 (137 )Accounts payable 9,719 149 Accruals and other current liabilities 190 16,684 Accrued interest ? related party debt (207 ) (153 )Deferred revenue (14,779 ) (9,836 )Other non-current liabilities 224 424 Other, net (319 ) (401 )Net cash used in operating activities (84,295 ) (22,915 )Cash flows from investing activities: Purchases of property and equipment (293 ) ? Proceeds from disposal of equity method investment 22,122 ? Net cash provided by investing activities: 21,829 ? Cash flows from financing activities: Proceeds from borrowings ? 784 Repayments of borrowings (1,000 ) (2,000 )Repurchase and retirement of common stock (54,155 ) ? Offering costs paid (5,334 ) ? Deferred financing costs for revolving credit (1,959 ) ? facilityProceeds from stock issuance 241,207 30,000 Net cash provided by financing activities 178,759 28,784 Effect of exchange rate changes on cash and 6 (8 )restricted cashNet increase in cash and restricted cash 116,299 5,861 Cash and restricted cash at beginning of period 33,373 8,235 Cash and restricted cash at end of period 149,672 14,096 Supplemental disclosures of cash flow information: Purchase of property and equipment included in $ 154 $ ? accounts payableUnpaid offering costs included in accounts payable $ 619 $ ? Non-cash gain on extinguishment of debt from PPP $ (790 ) $ ? loan forgivenessCash paid during the period for interest $ 247 $ 378 Reconciliation of cash and restricted cash at June December period end 30,2021 31, 2020Cash 149,672 32,359 Restricted cash ? 1,014 Total cash and restricted cash $ 149,672 $ 33,373

Because of these limitations, Non-GAAP Gross Margin, Non-GAAP Operating Expense, Non-GAAP Net Loss and Adjusted Non-GAAP Net Loss Per Share (Adjusted EPS) should not be considered in isolation or as substitutes for performance measures calculated in accordance with GAAP and you should not rely on any single financial measure to evaluate our business. These Non-GAAP financial measures, when presented, are reconciled to the most closely applicable GAAP measure as disclosed below.

The following table reconciles Non-GAAP Gross Margin for the three and six months ended June 30, 2021 and 2020, respectively:

Three Months Ended June Six Months Ended June 30, 30, 2021 2020 2021 2020 GAAP gross $ (16,057 ) $ (1,382 ) (15,938 ) $ 5,598 profit (loss)Stock-based 7,170 82 7,236 164 compensationOther costs 460 - 460 - Non-GAAPgross profit (8,427 ) (1,300 ) (8,242 ) 5,762 (loss)Non-GAAP $ 50,108 $ 51,157 115,815 $ 83,533 revenueNon-GAAP -16.82 % -2.54 % -7.12 % 6.90 %gross margin

The following table reconciles GAAP Operating Expense to Non-GAAP Operating Expense for the three and six months ended June 30, 2021 and 2020, respectively:

Three Months Ended June Six Months Ended June 30, 30, 2021 2020 2021 2020 GAAP Operating $ 59,906 $ 4,576 $ 68,044 $ 8,660 expenseDepreciation (19 ) (4 ) (28 ) (7 )expenseAmortization of - - - (33 )intangiblesStock-based (49,022 ) (393 ) (49,405 ) (769 )compensationOther costs (2,540 ) $ - (3,437 ) $ - Non-GAAPOperating $ 8,325 $ 4,179 $ 15,174 $ 7,851 expense

The following table reconciles GAAP Operating Loss to Non-GAAP Operating Loss for the three and six months ended June 30, 2021 and 2020, respectively:

Three Months Ended June Six Months Ended June 30, 30, 2021 2020 2021 2020 GAAPOperating $ (75,963 ) $ (5,958 ) $ (83,982 ) $ (3,062 )lossDepreciation 33 4 42 7 expenseAmortizationof - - - 33 intangiblesStock-based 56,192 475 56,641 933 compensationOther costs 2,992 $ - 3,889 $ - Non-GAAPOperating $ (16,746 ) $ (5,479 ) $ (23,410 ) $ (2,089 )loss

The following table reconciles Net Loss to Adjusted Non-GAAP Net Loss and Adjusted EPS for the three and six months ended June 30, 2021 and 2020, respectively. All shares and per share amounts have been adjusted for a 8.25-for-1 share forward stock split which took effect on April 27, 2021:

Three Months Ended Six Months Ended June 30, June 30, 2021 2020 2021 2020 (in thousands, except per share data) Net loss $ (55,841 ) $ (6,776 ) $ (63,283 ) $ (3,356 )Amortization of ? ? ? 33 intangiblesAmortization ofdebt issuance 115 ? 115 ? costsStock-based 56,192 475 56,641 933 compensation(Gain) loss onextinguishment ? 41 (790 ) 41 of debt(Gain) fromdisposal of (20,619 ) ? (20,619 ) ? equityinvestmentNon-routine 775 ? 775 ? legal feesSeverance 295 ? 295 ? Other costs 1,968 ? 2,865 ? Loss fromunconsolidated 136 637 354 159 subsidiaryIncome taxexpense of 8 ? ? (3 )adjustments (a)AdjustedNon-GAAP net $ (16,971 ) $ (5,623 ) $ (23,647 ) $ (2,193 )loss AdjustedNon-GAAP net loss per share(Adjusted EPS)Basic $ (0.21 ) $ (0.08 ) $ (0.32 ) $ (0.03 )Diluted $ (0.21 ) $ (0.08 ) $ (0.32 ) $ (0.03 ) Weighted-averageNon-GAAP common sharesoutstanding:Basic 79,229,174 74,612,811 73,106,935 70,994,078 Diluted 79,229,174 74,612,811 73,106,935 70,994,078

(a) Represents incremental tax expense of adjustments made to reconcile Net Loss to Adjusted Non-GAAP Net Loss driven from loss from unconsolidated subsidiary.

Notes to Reconciliations of Non-GAAP Financial Measures to Nearest Comparable GAAP Measures

We present Adjusted EBITDA, Adjusted Non-GAAP Net Loss and Adjusted EPS as supplemental measures of our performance. We define Adjusted EBITDA as net loss plus (i) income tax (benefit) or expense, (ii) interest expense, (iii) depreciation expense, (iv) amortization of intangibles, (v) amortization of debt issuance costs, (vi) stock-based compensation (vii) gain on extinguishment of debt, (viii) gain from disposal in equity investment, (ix) non-routine legal fees, (x) severance, (xi) other costs and (xii) loss from unconsolidated subsidiary. We define Adjusted Net Loss as net loss plus (i) amortization of intangibles, (ii) amortization of debt issuance costs (iii) stock-based compensation, (iv) gain on extinguishment of debt, (v) gain from disposal in equity investment, (vi) non-routine legal fees, (vii) severance, (viii) other costs, (ix) loss from unconsolidated subsidiary and (x) income tax expense of adjustments. Adjusted EPS is defined as Adjusted Non-GAAP Net Loss Per Share using the weighted average basic and diluted shares outstanding.

Adjusted EBITDA, Adjusted Non-GAAP Net Loss and Adjusted EPS are intended as supplemental measures of performance that are neither required by, nor presented in accordance with, U.S. generally accepted accounting principles (GAAP). We present Adjusted EBITDA, Adjusted Non-GAAP Net Loss and Adjusted EPS because we believe they assist investors and analysts in comparing our performance across reporting periods on an ongoing basis by excluding items that we do not believe are indicative of our core operating performance. In addition, we use Adjusted EBITDA, Adjusted Non-GAAP Net Loss and Adjusted EPS to evaluate the effectiveness of our business strategies.