Shoals Technologies Group, Inc. (SHLS) on Q1 2021 Results - Earnings Call Transcript
Operator: Good afternoon and welcome to Shoals Technologies Group, First Quarter 2021 Earnings Conference Call. . At this time, I would like to turn this conference over to Mehgan Peetz, General Counsel for Shoals Technologies. Thank you. Ma'am you may begin. Mehgan Peetz: Thank you operator and thank you everyone for joining us today. Hosting the call with me are Shoals Chairman Brad Forth, CEO Jason Whittaker, CFO Philip Garton and S VP of EV solutions. Jeff Toner. On this call management, we'll be making statements based on current expectations and assumptions, which are subject to risks and uncertainties. Actual results could differ materially from our forward-looking statements. If any of our key assumptions are incorrect because of other factors discussed in today's press news release regarding first quarter earnings and the comments made during this conference call or in our latest reports and filings with the Securities and Exchange Commission, each of which can be found on our website www.shoals.com. Brad Forth: Thank you very much, Megan, and good afternoon, everyone. We are excited to have completed our first quarter as a public company. We continue to execute and deliver on our strategy. We have a great team and an opportunity and not just domestically, but globally as we'll. With that, I'll now turn it over to Jason to provide an update on our business performance and strategy. Jason, Jason Whittaker: Thank you very much, Brett, and good afternoon, everyone. We have some important updates to share with you today. So I'll be referring to the slides that were posted to the investor relations section of our website earlier this afternoon, I'll start off with an update on our business and growth strategies then turned over to Shoals, Chief Financial Officer Philip Garton, who provide financial highlights from the first quarter and then our SVP of EV solutions. Jeff Toner will give an update on our easy business initiative. Turning to slide 7 of our presentation as most of you know, 2020 was a record year for Shoals, both in terms of revenues and profits that momentum continued into Q1. We generated more revenue and adjusted EBITDA in the first quarter of 2021 than in other first quarter in our history. Our results are driven by continued growth in our system solutions business, which was up 46% versus the first quarter of last year. That growth was the result of continued strong demand for utility scale solar, as well as market share gains more and more customers are seeing the value that our combined as you go system provides. And we're converting customers to belay in a much shorter period of time than it took us in the past. To give you some context for how much we've accelerated the customer conversion process, we had converted four of the top BPCs in the U S to DLA. When we went public in January, when he knows first four customers had taken us about three years and in just three months, since our IPO we've completed conversion of four additional EPC for our system, bringing our total to 8. We see the strong growth we experienced in the first quarter, continuing throughout the balance of this year. As of March 31st, 2021, we had backlog and awarded orders of $181 million, an increase of 42% from the same time last year and greater than our full year 2020 revenues. Philip Garton: So thank you, Jason. Revenues in the first quarter increased 12% versus the prior year period, the $45.6 million driven by a 46% year over year increase in our system solutions revenues, which was partially offset by a decline in components revenue. Our first quarter revenues exceeded our plan. The growth in system solutions revenues, reflect strong demand for a combined as you go system. The declining components revenue was in line with our plan and reflected a change in the timing of orders from our customers relative to last year and the conversion of certain customers from buyers of components to buyers of system solutions. Prices across our product lines during the first quarter were comparable to the prior year. Gross margins in the first quarter increased by 635 basis points versus the prior year period, the 41.2%. As a result of a higher portion of revenue coming from combined "EBOS" system solutions, purchasing efficiencies from increased volumes, improved material planning, which reduced logistics costs, enhancements to product design that lowered manufacturing costs and other manufacturing efficiencies resulting from higher production volume. Operating expenses were $8.9 million compared to $4.6 million in the prior period, this was driven by higher equity-based compensation, increased payroll expense related to additional head count that we added as part of our planned international growth and new product initiatives, COVID-19 related costs, new public company costs and non-recurring expenses related to our IPL. Adjusted EBITDA for the first quarter was $14.1 million of 17% from the $12.1 million in the prior year period with the adjusted EBITDA margin increasing more than 120 basis points year-over-year, with 30.9%. Adjusted net income was $8.8 million compared to $8.9 million during the same period in the prior year, this was primarily as a result of higher interest expense as compared with the first quarter of 2020. Adjusted EBITDA and adjusted net income exclude amortization of intangibles, stock-based compensation, COVID-19 related expenses and non-recurring items. Please, you see the adjusted EBITDA and adjusted net income reconciliation tables in the first quarter, press release for a bridge-draw GAAP results. Jason Whittaker: Thanks Phill. I'll now turn it over to Jeff Toner, our SVP of EV solutions. Jeff joined Shoals earlier this year. Previously he was the chief Commercial Officer for Greenland's, where he was responsible for sales relationships with major fleet operators, retailers, electric utilities, and municipalities. Greenland's was sold to Shell in 2019. Jeff has a reputation as an innovator in developing charging solutions and his knowledge and relationships are already helping us to accelerate our EV charging strategy. With that. I'll turn it to Jeff. Jeff Toner: Thanks Jason. Good afternoon, everyone. I'll start out on slide 14 of the presentation and talk about the opportunity that we see for Shoals in the EV charging market. First, EV charging has a lot of similarities to solar. The market potential is very large. Deployments are growing very rapidly and participants need to get more efficient to stay competitive. Installation is nearly half the cost of deployment for solar project. That is about 30% and the reasons the installation is so costly, revolve around a lot of the same issues, the need for trenching complex, interconnections, home-run cabling and the need for expensive skilled labor. Together those characteristics make the charging market right for innovation and the innovation it needs are exactly the areas where Shoals has unique expertise and manufacturing capabilities. Jason Whittaker: I think you can see from Jeff that we’re very active and fully committed to building out our EV business. We see an opportunity to bring real innovation to that market and build an entirely new leg for our company. I couldn't be more pleased with our team's execution thus far and we’re just getting started. We look forward to reporting on our progress in the coming quarters. With that, I'd like to ask the operator to open the line for questions. Operator: At this time, we'll be conducting a question-and-answer session. Our first question comes the line of Brian Lee with Goldman Sachs. You may proceed with your question. Brian Lee: Hey, guys, good afternoon. Thanks for taking the questions. First, on the gross margin, 41% plus, that's pretty impressive. It seems like you're running pretty ahead of plan. Is there any reason margins don't stay at these levels or grind even higher moving through the year because it sounds like you mentioned supply chain is not an issue for you. And if that's the case, does that make some of your profit targets for 2021 a bit on the conservative side or how should we just be thinking about that given how well you're doing on gross margins already and then I had a follow-up. Philip Garton: Hello, Brian, this is Philip. I do think our gross margins will be consistent through the year and do have upside. The big driver here is mix, we’re combined as you go system solutions do have excellent margins, because they provide excellent value. And we continue to see the market transitioning to those. And that's where the sales growth is going to happen this year. As far as conservative nature for the year, I think we're being prudent as we look at in our forecast for the year and guidance. And I'll turn it over to Jason in case he has any more comments on that. Jason Whittaker: I feel that's good. Go ahead, Brian. Brian Lee: All right. Yes, second question. That's helpful. I wanted to ask around the EV, which is great disclosure here. Nice to see you guys accelerating that and breaking it out a bit. I don't want to put you on the spot. But at the IPO, I think you talked about a $30 million annual opportunity for Shoals in the EV charging. If I take the new $5,000 per charging point, and assume the 25% market share, like you said at the IPO, that seems like it's an $80 million annual opportunity, just assuming a linear average. So first is that right? And then second, what's driving that much bigger potential here versus the prior view? Thanks, guys. Jason Whittaker: Good question. Brian, good to talk to you again. So first of all, I want to start off, there's a lot of tailwinds, as we all know, particularly behind EV, especially when you look at the Biden infrastructure plan. And when we first initiated our plan, from an EV perspective, we really focused on one of the products and as you can see here, we're updating to show what our full product launch looks like, as of right now in two different phases. So, based upon that, we have extended further into the opportunity within the EV space. And again, referring back to exactly what Jeff covered, what I can say at this point is, the opportunity ahead is about $1.3 billion when you look at that, cumulative opportunity from 2021 through 2025. And I think the most exciting thing about that is we believe that that's a very conservative estimate. And it definitely doesn't include the latest announcements from the Biden administration plan. But at this particular point, Brian, I can't go into any specific details, other than we see significant upside to what we've already talked about, and definitely look forward to providing more clear direction on that in quarters to come. Brian Lee: All right, thanks, guys. I'll pass it on. Appreciate it. Jason Whittaker: Thanks again, Brian. Operator: Our next question comes from the line of Shahriar Pourreza with Guggenheim, you may proceed with your question. Shahriar Pourreza: Hey guys, good evening. Jason Whittaker: Hey, Shahriar, how are you doing? Shahriar Pourreza: Good, so just a couple of questions here. First, the BLA conversion data that's on Slide 10 is super helpful, but sort of with the highlighted 21 incremental prospects in steel launch, especially with the 16 that have yet to place orders? Can you maybe frame the size of these opportunities, as we think about your backlog, and then the potential timing of these opportunities, we sort of think about revenue recognition? Clearly, your conversions have been very strong, and it's been happening at a much faster pace. But how do we sort of frame this? Jason Whittaker: Yes, that's a good question, Shahriar. So first of all, when you look at BLA specifically as a percentage of revenue and growth going forward. At this point in time, I can't go into any particular further details exactly what that looks like. But I think the key takeaway here is, when you look at what we've been able to accomplish in such a short window, right, especially we spent a lot of time in previous conversations talking about conversion time, a few other takeaway here is the fact that we've doubled the number of EPC developers that are converted. But I think the most exciting thing is when you go out and you look at the prospects that we've identified and we've been working on is that conversion from those 21 prospects were 16 still remained in that prospect category, so far almost immediately moved up to in transition. So we're very excited about that. And, as Phil also mentioned, we see a significant amount of the growth going forward from a revenue perspective, this particular year coming based upon the transition of our combined as you go BLA. Shahriar Pourreza: Got it. And then I know the sales team has seen an increase in coding on sort of that replace opportunities that remain kind of fully incremental to your forecasting, and that $500 million annual target that you set by ‘23 during deal launch, any sort of status there as we think about these incremental revenue recognition? Jason Whittaker: So at this point, we're not including that in our guidance going forward, Shahriar. From a return or replaced perspective, I can tell you that the conversations are not going away, if anything, they're being further increased, but at this point in time, again was not included in our guidance, because it's really hard to predict exactly when that opportunity might fall into our lap. And based upon that, we've excluded that potential upside as that transpires. Shahriar Pourreza: Got it. And then lastly for me is I know you guys this Slide 11, on sort of the new product introductions and the timing is super helpful. And you've talked about in the past about sort of thinking about the wallet share through these kind of complementary products, sort of increasing right, and when you think about EBOS, being about $0.05, $0.055 or 50 megawatt project, you already do $0.02 of that. Where you sort of as far as hitting your target for that incremental $0.015. So as we're thinking about the wallet share gains from where you’re today, and incorporating slide a lot of it. Where are you as far as hitting that $0.035 goal from a market share perspective? Jason Whittaker: Yes, how we think about that, when you look at the products specifically on Slide 11, first of all, I mean that's not all the products that we have currently in development, which the few that we highlighted, and when you look at those, and you take those into full consideration, those cover a large majority of that conversion with more specifically the high capacity plug and play harness and the BLA 2.0 having a higher weighted effect to that transition. Shahriar Pourreza: Okay, got it. But I guess I'm kind of curious is where are you as far as the wallet share gains versus where you are today from an EBOS perspective? Jason Whittaker: So wallet share as it correlates to the new product introduction, Shahriar? I want to make sure I understand your question. Shahriar Pourreza: Right, versus the $0.055 total EBOS wallet share that is out there. Jason Whittaker: Yes, sorry. So, when you look at the new products is we just touched based on from wire management, not compared to your BLA. So those are products that we are introducing into the market based upon the timeline that we've depicted on Slide 11. And that timeline would correlate with a significant portion of that conversion of that additional wallet share as we roll these products out. Shahriar Pourreza: Okay, perfect. That's what I was trying to get at. Thank you so much. Appreciate it. Operator: Our next question comes from the line of Colin Rusch with Oppenheimer. You may proceed with your question. Colin Rusch: Thanks so much. Guys, can you talk a little bit about the pipeline bookings and growth of the business in Europe. I know it's kind of early days, but want to get a sense of how much progress you're making at this point? Jason Whittaker: Yes, hey Colin, Jason here. Good to talk to you again. So, as we've talked about before, we have our VP of EMEA in place. And he's actually hitting the ground running, I'm very excited about, what he's been able to pull together over there. The number of customers that we've already reached out to and communicated with even the fact that our product offering has been very well received in those conversations. And I think the best thing to really correlate back to is the chart that really shows where we are in our BLA conversion, and more specifically, when you look at the prospects that we have in the customers that are in transition, two of the customers that are in transition reside in the international market. And more specifically, six of the customers that are in the prospects are in the international market as well. So that's how we kind of think about that, again, very excited about what we've been able to accomplish. But at this point, I can't provide any further details as far as the exact specifics on international. Colin Rusch: Awesome, that's actually super helpful. And then as you look at the domestic customers and the sell through, we're hearing various commentary around broken projects or delays in construction schedules. Can you just give us a sense of how close you're tracking that with your customers, any shifts in some of the delivery timeframes as you'd expected and how that works just in given that you'd lock in pricing on both commodities and the final products early in the process? Jason Whittaker: No, that's a good question. So, as of August first of all, we're in constant communication with our customers, and whether they would be direct or indirect, being an EPC, or direct developer or indirect. And, as of right now, were not seeing any significant change in the timing of projects. The reality is, as we all know projects do move from time to time, but we're seeing nothing that would force us to change our current outlook. Colin Rusch: All right, thanks so much, guys. Operator: Our next question comes from the line of Philip Shen with ROTH Capital Partners, you may proceed with your questions. Philip, you may proceed with your questions. Philip, are you on mute? Okay, our next question comes from the line of Michael Weinstein with Credit Suisse. You may proceed with your question. Michael Weinstein: Hi, guys. Thanks for the question. It’s six new international prospects out there. I'm wondering if you're planning to expand at all on manufacturing international markets as well. Is there anything you can say on that and along those lines? Jason Whittaker: Yes, hi Michael, Jason here, good to talk to you again. So when you look at the growth that we have right now, based upon our initial target markets that we've identified, we're going to serve those, those markets out of our current North American facilities, and how we really think about that going forward, is when we look at our next phase of growth internationally, one of the areas that might force us to look into expanding our manufacturing footprint internationally would be an area that would allow us to access certain markets that would require local content. Michael Weinstein: Got you. And along the same lines, any strategic partnership plans or M&A type discussions you can talk about, I mean, you never really had much competition out there. I’m just wondering if there's anybody out there worth taking a look at, in terms of strategic partnerships or acquisitions? Jason Whittaker: I think, Michael, there's really nothing to discuss at this time. I mean, we're always looking for potential M&A, especially if it would accelerate our growth plans, but nothing to talk about as of now. Brad Forth: And it's Brad. I wanted to just a little more color on the lack of need and here in for international factories, that's also a function of the fact that our products pack out, so well, that we can ship them anywhere in the world for 0.5% of revenue or less. So absent local content requirements, which Jason alluded to, that's not otherwise an economic necessity, like it is for many other things. And in a inflated freight environment, that's also proven to be just very helpful, even domestically. Michael Weinstein: So you guys haven't, or you're not anticipating any problems with shipping containers or lack of, I guess a kind of a squeeze on shipping services that are available out there right now? Brad Forth: Yes, we're unimpacted by that at this point, unlike many, many other industries, so we're in a nice place and highly vertically integrated, by the way in our manufacturing, and because the product packs out so well, we can get it where it needs to be quite readily. Michael Weinstein: Got you. Okay, thank you. Operator: Our next question comes from the line of Paul Coster with JPMorgan. You may proceed with your question. Paul Coster: Yes, thanks for taking my questions. It sounds like you're doing a great job of managing the supply chain. And you're minimizing the margin risk associated with quoting when commodity prices are rising, but I guess the question is, some of these deliveries are future dated somewhere out and between now and then you could experience some disruption or failure to deliver by your suppliers. To what extent do you have future dated risk here, if the supplies situation does deteriorate further? Jason Whittaker: Hi, Paul, this is Jason. Good talking to you again. I'll take the initial part of that and then Phil, if there's anything you want to add, feel free to jump in. So when you look at the supply, I think it's important to note that from an inbound perspective, a large portion of our input our raw materials in the like, really reside out of North America. So, when you look at delays there look, you could have a couple of days delay, but the reality is that’s not going to harm our operations. And really because of that, we've not seen any impacts that would actually strain our manufacturing environment nor have we seen any that resulted in delays that go out to our customers. And there are several other reasons for that, ABLs, multiple vendors that we can pull from, but very, very happy operationally speaking for how well the teams perform, and Phil, you can add anything if you'd like? Philip Garton: Sure, Paul, the other items, when we talk about commodity prices, and you get something that's out there nine months or something with some of the projects are, as you know in our process, we have great visibility what’s coming up, we've locked in that price, even if it's out there several months with both with the supplier that matches exactly what that purchase order ties to, because we have these projects down by week as we look out. So even though it may be a ways out, and you do see the commodity increasing or commodity volatility. We've stepped back from that, we've locked that in with the supplier. And it works very well for all parties. Paul Coster: Got it. Okay, and just something maybe it's a misunderstanding on my part. But obviously like, everyone's seen a lot of solar plus storage projects, all of a sudden, some very, very large. To what extent is the product identical for that application at your large scale customer sites? Philip Garton: Yes, sorry yes. So Paul, how I would think about that again, just from a very high level, and I'm obviously simplifying this, but from a very high level, both systems require EBOS, when you look at things, your panels are configured in a series and parallel configuration to harvest the energy, and the batteries are really in that same configuration to store the energy. So there's a lot of wiring that’s involved in that, there's also circuit protection devices, that are involved in that. So there's a lot of similarities, there are a few differences, when you look at the inrush current or the incidental energy that you actually have, because it is a energy storage, or it is a battery device. But, outside of that there's a lot of similarities and overlap between the two. Paul Coster: Okay, I know you're already seeing revenues associated with storage, or is it still, I mean, we've got it as beginning to kind of seep into revenues in the second half very modest. Philip Garton: Yes, I think as you mentioned, Paul, I'll confirm I mean we're excited about the growing number of solar projects that we're seeing in our pipeline that has storage attached. And really it's unfolding the way that we really thought in a way that a lot of the -- I guess a lot of the analysts and stuff are providing feedback. So, when you look at the projects that we have, we currently do have projects in our pipeline. And based upon those projects and their timing associated, we expect to convert those into our backlog and awarded orders towards the latter part of the year. Paul Coster: Okay, got you. Thanks so much. Philip Garton: Thanks, Paul. Operator: Our next question comes from the line of Philip Shen with Roth Capital Partners, you may proceed with your question. Philip Shen: Hi guys, thanks for having me jump back on. Sorry for the trouble earlier. As it relates to EV's, can you talk through how many target companies you're active with today similar to that Slide 10, kind of the bottom two buckets there of opportunities, who you're active with and then who you're prospecting? I know, you talked about how the customer base is highly concentrated. But how many are you actually actively involved with now? And when do you think we could see some announcements with some EV customers? Thanks. Jason Whittaker: Hi, Phil, Jason here, I'll start that. And Jeff, there's anything you want to add, feel free to join in. So when you look at the approach that we're taking, as Jeff highlighted in the presentation, it was very similar to what we did in renewables. So, first and foremost, we work with the EPCs very intimately so that they understand the product solution that we're bringing to market and we understand their needs to make sure that it addresses their needs. And as that really, as we start to capitalize on those relationships again, just like we've seen in the accelerated conversion on our full system combined as you go in BLA solar, we start working with, as Jeff referred to it, the charge point operators, which is very similar to like the developers and the owners in solar to make sure that they understand that full value proposition. So the phase that we're in now is working directly with those EPCs to make sure that the product that we're bringing to market, they completely understand what that is, and we're well aligned on that launch. But as far as the specifics are concerned, Phil, I can't go into any specific details as to exactly who we're talking to. But what I am very excited about is the multitude or the number of EPCs that we have spoken with, I've been very excited about the product offering that we're bringing to market. Jeff Tolnar: Okay, just one quick point to add, and we also have been working with CPOs. So it's both EPCs and CPOs and they're both very excited about what we're doing. Philip Shen: Okay, I thank you both on that. And when I am thinking about the U.S. utility scale market, a lot of our recent conversations with EPCs and developers is just how tight things are. And with module pricing, and the spot market increasing from call it high $0.20 per watt to $0.35, $0.38 per watt, and then it seems like all the EPCs are booked out, and there's just tightness everywhere through the chain, I was wondering how much of your backlog might be at risk as a result of projects that might be getting pushed out? Jason, I think you may have addressed part of this earlier, but want to kind of ask that question more specifically. And put a finer point on it. Thanks. Jason Whittaker: Yes, no issue, Phil. So, when you look, as I mentioned earlier, we do work very closely with our customers. And those include both EPCs and developers. And there are some shifting of projects, but nothing that based upon where projects currently sit right now, nothing that's meaningful enough that would cause us to change our outlook and what we plan on performing to for 2021. Philip Shen: Okay, great, really appreciate that color. And I'll pass it on. Thanks Jason. Jason Whittaker: Thanks, Phil. Operator Our next question comes from the line of Jeff Osborne with Cowen. You may proceed with your question. Good evening. Just a couple of questions on my end, I was wondering, I know you're limited in what you can say as it relates to combine as you go or BLA as a percentage of revenue. Jason, but I was wondering if you can give us a sense of context for the backlog? Is there a meaningful shift of the backlog to combine as you go relative to the percentage of revenue? Jason Whittaker: Yes, at this point, Jeff, that's something that that I can't really touch base on definitively, but again I think the exciting part about that is, I mean, that's really one of our main growth initiatives to capture share, and more specifically do that with our combiner product, and we're seeing a lot of growth in that particular area. But as of right now, I can't really touch based on that. But I do look forward to going over that level of detail with you. When we go through, we announced our fourth quarter earnings. Jeff Osborne: Got it. And then I don't think you touched on, but it's on the chart. But BLA 2.0, I imagine you introduce that at SPI just based on the timing, can you give us a sense of where you are in the development of that, and then what the commercialization process is for that? Jason Whittaker: Yes, so BLA 2.0, we're definitely on track for that, if not slightly ahead of schedule, going through, the product engineering portion of that, which transitions into our validation and certification. And depending upon exactly where that product is, we may or may not launch that at SPI and maybe one of the preceding shows following that. But very excited about, how the things performing on that product and absolutely look forward to bringing it to market. Jeff Osborne: Great, thank you. That's all I have. Operator: Ladies and gentlemen, we have reached the end of today's question-and-answer session. I’d like to turn this call back over to Mr. Jason Whittaker for closing remarks. Jason Whittaker: Yes, thank you everyone for joining us today. I’d like to close by thanking all of our team members for their contributions to our success, our shareholders for their support and our customers for their commitments. And we look forward to future discussions and updating you on our progress with quarters to come. Thank you very much. Operator: Thank you for joining us today. This concludes today’s conference. You may disconnect your lines at this time.SHLS Ratings Summary
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Shoals Technologies Shares Soar 21% on Strong Q3 Results
Shoals Technologies Group, Inc. (NASDAQ:SHLS) shares surged more than 21% on Tuesday following the company’s reported Q3 results, with EPS of $0.10 coming in better than the Street estimate of $0.08. Revenue was $90.8 million, beating the Street estimate of $83.03 million.
With the company posting strong numbers across the board including award and bookings growth of $144 million in the quarter, analysts at Oppenheimer said they believe investors will be increasingly confident in the company's growth trajectory.
The analysts believe the value of shortened construction timelines and skilled labor savings are driving outsized growth, supplementing a strong demand environment of solar where higher electricity prices are outpacing costs from inflation and increased interest rates.
The company provided its fiscal 2022 outlook, expecting revenue in the range of $310-325 million, compared to the Street estimate of $313 million. Adjusted EBITDA guidance was raised to the range of $80-$86 million from $77-$86 million.
Shoals Technologies Group Shares Surge 12% Despite Q1 Miss
Shoals Technologies Group, Inc. (NASDAQ:SHLS) shares were trading more than 12% higher in the afternoon despite the company’s reported Q1 earnings results, with EPS of $0.02 coming in worse than the consensus estimate of $0.07. Revenue was $68 million, compared to the consensus of $70.38 million.
Analysts at Oppenheimer said they are encouraged to see the company's new capacity coming online and new product development tracking as scheduled.
The analysts continue to expect the next 12 months to be crucial for the company in establishing its market position in the EU and Latin America, which could dictate its 3–5-year growth trajectory.
Given product is now certified, the analysts believe completing customer adoption will help signal growth in these geographies and understand the process is going well.
The company provided its Q2/22 outlook, expecting revenue in the range of $300-325 million, compared to the consensus estimate of $325.7 million.
