Sunworks Inc (SUNW) 2022 Q1 法說會逐字稿

Greetings. Welcome to the Sunworks first-quarter 2022 results conference call. (Operator Instructions) Please note this conference is being recorded. I will now turn the conference over to your host, CFO, Jason Bonfigt. You may begin.

問候。歡迎參加 Sunworks 2022 年第一季業績電話會議。 （操作員說明）請注意，本次會議正在錄製中。現在我將會議交給主持人、財務長 Jason Bonfigt。你可以開始了。

Thank you, operator. I am Jason Bonfigt, Chief Financial Officer of Sunworks. On behalf of our entire team, I'd like to welcome you to our first-quarter 2022 results conference call. Leading the call with me today is our President and CEO, Gaylon Morris. Today's discussion contains forward-looking statements about future business and financial expectations.

謝謝你，接線生。我是 Jason Bonfigt，Sunworks 財務長。我謹代表我們整個團隊歡迎您參加我們的 2022 年第一季業績電話會議。今天與我一起主持電話會議的是我們的總裁兼執行長蓋倫莫里斯 (Gaylon Morris)。今天的討論包含有關未來業務和財務預期的前瞻性陳述。

Actual results may differ significantly from those projected in today's forward-looking statements due to various risks and uncertainties, including the risks described in our periodic reports filed with the SEC. Except as required by law, we undertake no obligation to update our forward-looking statements. At the conclusion of our prepared remarks, we will open the line for questions.

由於各種風險和不確定性，包括我們向美國證券交易委員會提交的定期報告中所述的風險，實際結果可能與今天的前瞻性聲明中預測的結果有顯著差異。除法律要求外，我們不承擔更新前瞻性聲明的義務。在我們準備好的發言結束後，我們將開放提問熱線。

With that, I'd like to (technical difficulty) over to Gaylon.

說到這裡，我想（技術難度）轉向蓋倫。

Thank you, Jason, and welcome to those joining us today for our first-quarter results conference call. Before we move into a discussion of our first-quarter results, I'd like to begin with a high-level overview of the progress we're making to advance Sunwork's ongoing business transformation, together with those key areas of strategic focus that our team has prioritized.

謝謝傑森，並歡迎今天參加我們第一季業績電話會議的人。在我們開始討論第一季業績之前，我想先概述我們在推進 Sunwork 持續業務轉型方面所取得的進展，以及我們團隊所關注的戰略重點的關鍵領域已優先。

Demand within our residential end markets exceeded our expectations during the first quarter, as recent investments in marketing and business development capabilities resulted in strong new project originations, particularly in the west and midwest regions.

第一季住宅終端市場的需求超出了我們的預期，因為最近對行銷和業務開發能力的投資導致了強勁的新項目啟動，特別是在西部和中西部地區。

Demand within our commercial end markets took a pause in the first quarter as several customers deferred projects due to uncertainty related to NEM 3.0. Importantly, early in the second quarter, commercial activity has accelerated meaningfully while our pipeline of new project opportunities remains healthy.

由於 NEM 3.0 相關的不確定性，一些客戶推遲了項目，第一季我們商業終端市場的需求暫停。重要的是，在第二季初，商業活動顯著加速，而我們的新專案機會管道仍然健康。

On balance, we anticipate an acceleration in quoting, bookings, and backlogs across the business in the second quarter that should exceed both prior quarter and prior year levels. While the revenue story was positive in the first quarter, our margin capture was impacted by upfront investments in labor, together with component cost inflation.

總的來說，我們預計第二季整個業務的報價、預訂和積壓訂單將加速，將超過上一季和去年的水平。雖然第一季的收入情況樂觀，但我們的利潤率受到勞動力前期投資以及零件成本通膨的影響。

In response to rising labor and supply chain costs, we introduced a series of price increases in the first quarter and are introducing additional increases in the second quarter. These price increases, together with a continued focus on reduced lead times, improved closure rates, and disciplined expense management, are expected to help offset many of the inflationary headwinds evident across the market.

為了因應勞動力和供應鏈成本上升，我們在第一季進行了一系列漲價，並將在第二季進一步漲價。這些價格上漲，加上對縮短交貨時間、提高結案率和嚴格的費用管理的持續關注，預計將有助於抵消市場上明顯的許多通膨阻力。

Although inflationary pressures exist in the solar industry, we believe that customers will continue to pursue solar investments in the face of rising utility rates. In March, the Department of Commerce received a petition filed by California-based solar module manufacturer, Auxin Solar. The petition requested that the DOC review solar panel imports from Chinese companies working in Cambodia, Malaysia, Thailand and Vietnam related to anti-dumping.

儘管太陽能產業存在通膨壓力，但我們相信，面對公用事業費率上升，客戶將繼續尋求太陽能投資。今年三月，美國商務部收到了加州太陽能組件製造商澳新太陽能提交的請願書。請願書要求美國商務部對從在柬埔寨、馬來西亞、泰國和越南運營的中國公司進口的太陽能電池板進行反傾銷審查。

Many in our industry, including SEIA, our trade association, are concerned that the investigation could have an adverse impact on panel pricing and/or availability for the US solar supply chain, affecting everyone from panel producers and agencies to developers and IPPs. While these developments are potentially a headwind to the entire solar industry, reflecting a lack of support for the energy transition as a whole, we see no near-term impact from this investigation on our business.

我們行業的許多人，包括我們的貿易協會SEIA，都擔心調查可能會對美國太陽能供應鏈的電池板定價和/或可用性產生不利影響，影響到從電池板生產商和機構到開發商和獨立發電商的所有人。雖然這些發展可能對整個太陽能產業構成阻礙，反映出對整個能源轉型缺乏支持，但我們認為這項調查不會對我們的業務產生短期影響。

Beginning late last year, we began to build our solar module inventory above historical levels, a strategic action intended to mitigate supply chain risk in advance of growing customer demand. As part of this initiative, we expanded our direct and third-party supply relationships with both domestic and foreign partners.

從去年年底開始，我們開始將太陽能組件庫存建立在歷史水平之上，這是一項策略行動，旨在在客戶需求不斷增長之前減輕供應鏈風險。作為該計劃的一部分，我們擴大了與國內外合作夥伴的直接和第三方供應關係。

So while we couldn't have foreseen the potential for the DOC investigation around panel pricing and availability, our decision to create an inventory cushion during a period of pandemic-led supply chain volatility benefited us, ensuring a stable supply of comparatively low cost panels to support rising customer demand. Currently, barring any significant additional supply chain issues between our existing module inventory and contractual supplier commitments, we expect to have sufficient inventory to support anticipated customer demand well into Q2 '23.

因此，雖然我們無法預見美國商務部圍繞面板定價和可用性進行調查的可能性，但我們在大流行導致的供應鏈波動期間建立庫存緩衝的決定使我們受益，確保了成本相對較低的面板的穩定供應支援不斷增長的客戶需求。目前，除非我們現有的模組庫存和合約供應商承諾之間出現任何重大的額外供應鏈問題，否則我們預計將有足夠的庫存來支援 23 年第二季的預期客戶需求。

Turning now to a discussion of our strategic priorities as we look at the remainder of 2022 and beyond. Market fundamentals, including rising utility costs, remain strong across our key geographic markets, as residential and commercial adoption of reliable, low-cost renewable energy continues to accelerate. Sunworks is uniquely positioned to capitalize on this generational shift, leveraging our scale in what remains a highly fragmented market.

現在讓我們來討論 2022 年剩餘時間及以後的策略重點。隨著住宅和商業對可靠、低成本再生能源的採用不斷加速，包括公用事業成本上漲在內的市場基本面在我們的主要地理市場仍然強勁。 Sunworks 處於獨特的地位，可以利用這一代際轉變，在高度分散的市場中利用我們的規模。

Looking ahead, our team remains focused on five key strategic priorities. First, we remain focused on the rapidly growing scale within the residential solar installation market, building upon our 2021 platform acquisition of Solcius. Over the next five years, we anticipate annual residential PV megawatts installed will increase by 50% from 2022 levels, driven by increased consumers' adoption of renewables.

展望未來，我們的團隊仍專注於五個關鍵策略重點。首先，我們在 2021 年收購 Solcius 平台的基礎上，持續關注住宅太陽能安裝市場快速成長的規模。未來五年，由於消費者越來越多地採用再生能源，我們預計每年安裝的住宅光伏兆瓦數將比 2022 年的水準增加 50%。

Within commercial, we expect the US market will experience year-over-year double-digit growth in megawatts installed, supported by broad-based demand growth, together with the completion of planned and in-progress upgrades to grid interconnects. Our organic growth focus includes further expansion of our multichannel sales force, the introduction of new products and solutions, together with a demand-led pricing model. While inorganic growth is not a near-term priority, we do continue to evaluate potential bolt-on acquisitions that could accelerate expansion within specific regional markets.

在商業領域，我們預計，在廣泛的需求成長以及計劃和正在進行的電網互連升級完成的支持下，美國市場的裝置容量將實現兩位數的同比增長。我們的自然成長重點包括進一步擴大多通路銷售團隊、推出新產品和解決方案以及以需求為導向的定價模式。雖然無機成長不是近期的優先事項，但我們確實繼續評估可能加速特定區域市場擴張的潛在補強收購。

Second, we remain focused on expanding the percentage of revenue derived from our direct sales channel. Historically, the company's residential segment has relied heavily on third-party sales channel partners to originate new business. Beginning in 2021, we launched an initiative to develop a more robust internal sales capability, one designed to increase project origination while reducing compensation expense. By the end of 2022, we expect that approximately 25% of our residential revenue will be originated from our direct sales force, up from a 10% run rate exiting 2021.

其次，我們仍致力於擴大直銷通路收入的比例。從歷史上看，該公司的住宅部門嚴重依賴第三方銷售通路合作夥伴來開展新業務。從 2021 年開始，我們發起了一項旨在發展更強大的內部銷售能力的計劃，旨在增加專案發起，同時減少薪資費用。到 2022 年底，我們預計約 25% 的住宅收入將來自我們的直銷隊伍，高於 2021 年 10% 的運行率。

Third, we intend to build and develop a lean operating culture, one that will adopt an increasingly efficient approach to sourcing and procurement as well as project execution. This year, we intend to source more materials and equipment directly from US-based original equipment manufacturers while lessening our reliance on third-party distributors. We believe this approach will allow for improved surety of supply at a lower average cost.

第三，我們打算建立和發展一種精實營運文化，這種文化將採用越來越有效率的採購和專案執行方法。今年，我們打算直接從美國原始設備製造商採購更多材料和設備，同時減少對第三方經銷商的依賴。我們相信這種方法將以較低的平均成本提高供應的保證。

Fourth, even during a period of raw materials and labor inflation, we will seek to drive margin expansion. Margin expansion is central to our business transformation thesis and remains a significant catalyst capable of driving a positive rerating in our equity. Multiple margin-enhancing actions are currently underway in our business, including the implementation of programmatic price increases, targeted market share gains, optimization of our sales channel partner network and direct sales force, increased productivity resulting from recent headcount investments and the adoption of lean principles to reduce costs and lead times and drive continuous improvement, which we would expect to reduce cancellation rates and improve margin.

第四，即使在原物料和勞動力通膨時期，我們也會尋求推動利潤率擴張。利潤率擴張是我們業務轉型主題的核心，並且仍然是能夠推動我們股權積極重估的重要催化劑。我們的業務目前正在採取多項提高利潤率的行動，包括實施計劃性價格上漲、有針對性的市場份額增長、優化我們的銷售渠道合作夥伴網絡和直銷隊伍、透過最近的人員投資提高生產力以及採用精實原則降低成本和交貨時間並推動持續改進，我們預計這將降低取消率並提高利潤率。

Finally, during this period of transformation, we will continue to maintain adequate liquidity to support the ongoing growth of the business.

最後，在這個轉型時期，我們將繼續保持充足的流動性，以支持業務的持續成長。

During the first quarter of 2022, we sold 2.8 million shares of common equity under an existing at-the-market agreement, resulting in net cash proceeds to the company of $7.8 million. Cash proceeds were invested in working capital investments, including the purchase of additional inventory to support increasing demand together with headcount investments as we build our direct sales force.

2022 年第一季度，我們根據現有的市場協議出售了 280 萬股普通股，為公司帶來了 780 萬美元的淨現金收益。現金收益投資於營運資本投資，包括購買額外的庫存以支持不斷增長的需求以及我們建立直銷隊伍時的人員投資。

With that, I will hand the call over to Jason for a review of our first-quarter financial results.

這樣，我將把電話轉交給傑森，以審查我們第一季的財務表現。

Thank you, Gaylon. During the first quarter, our team continued to advance a multiyear business transformation designed to position Sunwork's solar business of scale, plus both domestic residential and commercial markets.

謝謝你，蓋倫。第一季度，我們的團隊繼續推動多年業務轉型，旨在定位 Sunwork 的規模太陽能業務以及國內住宅和商業市場。

Before we discuss our financial performance, please note that we have implemented a change in our segment reporting, one we believe will better reflect how we evaluate and manage our businesses. The primary changes at the previously reported Sunworks segment is now separated into corporate costs and commercial solar, which will show the financial performance of our commercial, industrial, and public works business.

在我們討論我們的財務表現之前，請注意，我們已經對分部報告進行了更改，我們相信這項更改將更好地反映我們評估和管理業務的方式。先前報告的 Sunworks 部門的主要變化現在分為企業成本和商業太陽能，這將顯示我們商業、工業和公共工程業務的財務表現。

We will not be able to provide year-over-year performance evaluation for the commercial solar and corporate overhead segments below gross profit. Our Solcius segment has been renamed to residential solar. Net sales, gross profit, bookings, and backlog all increased materially on a year-over-year basis in the first quarter as strong residential demand more than offset lower commercial activity.

我們將無法提供低於毛利的商業太陽能和企業管理費用部門的年比績效評估。我們的 Solcius 部門已更名為住宅太陽能部門。由於強勁的住宅需求足以抵銷商業活動的下降，第一季的淨銷售額、毛利、預訂量和積壓訂單均較去年同期大幅成長。

For the three months ended March 31, 2022, Sunworks reported total revenue of $31.2 million versus $6.2 million in the prior year period. The year-over-year growth was attributable mainly to increased contributions from the residential segment, which offset a revenue decline in the commercial solar segment.

截至 2022 年 3 月 31 日的三個月，Sunworks 報告總收入為 3,120 萬美元，而去年同期為 620 萬美元。同比增長主要歸因於住宅領域的貢獻增加，抵消了商業太陽能領域收入的下降。

During the first quarter, residential and commercial revenues represented 87% and 13% of total revenue, respectively. Total gross profit increased to $14 million in the first quarter versus $100,000 in the prior year period. The year-over-year variance is primarily attributable to the contributions from the Solcius acquisition. Additionally, improved estimating, cost management, and execution led to margin improvement in our commercial solar segment despite a reduction in comparable period revenue. As a result of these impacts, gross margin increased to 45% in the first quarter versus 1.5% in the prior year period.

第一季度，住宅和商業收入分別佔總收入的87%和13%。第一季總毛利增至 1,400 萬美元，去年同期為 10 萬美元。同比差異主要歸因於收購 Solcius 的貢獻。此外，儘管同期收入有所減少，但估算、成本管理和執行的改進導致我們的商業太陽能部門的利潤率提高。由於這些影響，第一季的毛利率增至 45%，而去年同期為 1.5%。

We reported an operating loss of $8.2 million in the first quarter versus a $4.8 million loss in the prior year period. The year-over-year variance was primarily attributable to $2.4 million of noncash expenses associated with the Solcius acquisition and continued strategic investments in building our direct sales team and onboarding COGS labor to support anticipated growth throughout the year, as well as the impacts of inflationary pressures.

我們報告第一季營運虧損 820 萬美元，而去年同期營運虧損 480 萬美元。同比差異主要歸因於與 Solcius 收購相關的 240 萬美元非現金費用，以及為支持全年預期增長而建立直銷團隊和引進 COGS 勞動力的持續戰略投資，以及通貨膨脹的影響壓力。

We reported a loss of $0.28 per basic share versus a net loss of $0.19 per basic share in the prior year period. Adjusted EBITDA was a loss of $5.6 million in the first quarter of 2022 compared to an adjusted EBITDA loss of $3.9 million in the first-quarter 2021.

我們報告每股基本股虧損 0.28 美元，而去年同期每股基本股淨虧損 0.19 美元。 2022 年第一季調整後 EBITDA 虧損 560 萬美元，而 2021 年第一季調整後 EBITDA 虧損 390 萬美元。

Turning to a review of our residential segment, which is our Solcius business, segment revenue increased 7.1% year over year on a pro forma basis to $26.4 million, driven by market expansion and executing our strategy of building a direct sales platform. In Q1 2022, approximately 10% of our revenue was generated through our direct sales channel platform compared to less than 1% of our business prior to the acquisition. We have grown our direct sales force to over 250 representatives within the past six months and are encouraged that our pipeline of opportunities from this channel is now approaching 20%.

回顧我們的住宅業務，即我們的 Solcius 業務，在市場擴張和執行我們建立直銷平台的策略的推動下，預計該業務的收入將同比增長 7.1% 至 2,640 萬美元。 2022 年第一季度，我們約 10% 的收入是透過我們的直銷通路平台產生的，而收購前我們的收入不到 1%。在過去六個月內，我們的直銷隊伍已發展到超過 250 名代表，令我們感到鼓舞的是，來自該管道的機會管道現已接近 20%。

Segment EBITDA loss was $2.3 million, driven by continued investments in our direct sales function, expanding our direct labor force to meet growing demand as well as inflationary pressures, which we expect to offset throughout the year through price actions and the positive effects of leverage.

部門EBITDA 損失為230 萬美元，這是由於我們對直接銷售職能的持續投資、擴大直接勞動力以滿足不斷增長的需求以及通膨壓力，我們預計全年將透過價格行為和槓桿的積極影響來抵消這些壓力。

Within our commercial segment, revenue declined 22% year over year to $4.8 million, driven by a pause in recent orders, given NEM 3.0 uncertainty. Our pipeline of opportunities is increasing, and we are encouraged that we have secured over $9 million of new projects at the end of Q1.

在我們的商業部門，由於 NEM 3.0 的不確定性，近期訂單暫停，營收年減 22% 至 480 萬美元。我們的機會正在增加，令我們感到鼓舞的是，我們在第一季末獲得了超過 900 萬美元的新項目。

Segment gross margin improved to 16.4% in the first quarter versus 1.6% in the prior year period, driven by the impacts of improved estimating and operational performance. The segment EBITDA loss was $1.5 million, primarily due to volume.

受估算和營運績效改善的影響，第一季分部毛利率提高至 16.4%，去年同期為 1.6%。該部門 EBITDA 虧損為 150 萬美元，主要是由於銷售量造成的。

Turning to our balance sheet, our cash and cash equivalents balance as of March 31, 2022 was $19.5 million compared to $19.7 million at the end of the fourth-quarter 2021. Total inventory at the end of the first quarter was $14 million compared to $10 million at the end of the year 2021. Given the AD/CVD issues Gaylon referenced earlier, we will continue to make investments in inventory from our expansive list of module suppliers and distributors who are not producing modules in the impacted countries. We have made both firm commitments and negotiated orders to be flexible with demand, and we believe that the sum of the commitments will support our demand into 2023.

轉向我們的資產負債表，截至2022 年3 月31 日，我們的現金和現金等價物餘額為1,950 萬美元，而2021 年第四季末為1,970 萬美元。第一季末的總庫存為1,400 萬美元，而2021 年第四季末的庫存總額為10 美元。到2021 年底將達到100 萬美元。鑑於Gaylon 之前提到的AD/CVD 問題，我們將繼續對不在受影響國家/地區生產模組的大量模組供應商和分銷商的庫存進行投資。我們已經做出了堅定的承諾和談判訂單，以靈活應對需求，我們相信這些承諾的總和將支持我們到 2023 年的需求。

Operator, that concludes our prepared remarks. Please open the line for questions as we begin our question-and-answer session.

接線員，我們準備好的發言到此結束。當我們開始問答環節時，請打開提問專線。

(Operator Instructions) Donovan Schafer, Northland Capital Markets.

（操作員說明）Donovan Schafer，Northland Capital Markets。

I like the new segmentations that you fit together. I'm curious if you can talk through kind of how we should look at that as investors or externally. Of course, it helps you managing for internal purposes and for performance assessment. But one thought -- my initial thought is the corporate segment might be something we would look at as sort of an isolated overhead sort of metric or number, where that's what needs to be absorbed with growth and then maybe the C&I and the residential segments on their own could be breakeven without additional growth just from other -- in a normalized environment or improving the customer acquisition costs through the direct sales effort.

我喜歡你們組合在一起的新細分。我很好奇你能否談談我們作為投資者或外部應該如何看待這個問題。當然，它可以幫助您進行內部管理和績效評估。但有一個想法——我最初的想法是，我們可能會將企業部門視為一種孤立的間接費用指標或數字，這就是需要吸收增長的部分，然後可能是工商業和住宅部門他們自己的公司可以在沒有其他公司額外成長的情況下實現收支平衡—在正常化的環境中或透過直接銷售努力提高客戶獲取成本。

And so I'm just trying to think about how, looking at that externally, should we kind of look at that and think about those different pieces and how they're going to be addressed to reach -- to progress towards profitability?

因此，我只是想思考一下，從外部角度來看，我們應該如何看待這一點並思考這些不同的部分以及如何解決它們以實現盈利？

I can start. I can start, Donovan. Good morning. Yes, the Sunworks -- the legacy Sunworks segment that we reported before was -- I think it was difficult for external readers to understand the commercial and industrial business and how that interplayed with our corporate overhead costs and the cost of being a public company. And we -- as we moved into 2022, we said, hey, we want to move towards profitability and EBITDA positive in all of our businesses.

我可以開始了。我可以開始了，多諾萬。早安.是的，Sunworks——我們之前報導過的傳統Sunworks部門——我認為外部讀者很難理解商業和工業業務以及它如何與我們的企業管理成本和上市公司成本相互作用。當我們進入 2022 年時，我們說，嘿，我們希望在我們所有的業務中實現盈利和 EBITDA 為正值。

And this was a reporting change that we made internally so that we can begin to evaluate our execution on that strategy. So what you see in corporate overhead costs today are really people that aren't tied necessarily into the day-to-day operations. This is really the executive team, which is the lead marketing, legal, myself and my team, and then Gaylon as well.

這是我們在內部進行的報告更改，以便我們可以開始評估我們對該戰略的執行情況。因此，您今天在企業管理費用中看到的實際上是不一定參與日常營運的人員。這其實是執行團隊，負責行銷、法務、我和我的團隊，還有蓋隆。

So a fairly small set of costs in our corporate -- [commercial] Board overhead as well. So I think it helps us from a comparability across -- when we evaluate our business and performance. And that was really the -- why we changed the structure for the business.

因此，我們公司的成本相當小—[商業]董事會管理費用。因此，我認為當我們評估我們的業務和績效時，它可以幫助我們進行比較。這確實是我們改變業務結構的原因。

Okay. And I guess maybe to kind of rephrase it a little bit. Do you feel that the residential segment and the C&I segment as they -- as you are now reporting them under this new segmentation, are they at a scale where with the other changes like the direct sales moving -- improving direct sales on the residential side and improving margins to quoting and bidding on the C&I side, are those at a scale?

好的。我想也許需要稍微改變一下措詞。您是否認為住宅細分市場和工商業細分市場——正如您現在在這個新的細分市場中報告的那樣——它們的規模是否與其他變化（如直銷的移動）一起改善了住宅方面的直銷？以及提高C&I方面的報價和投標利潤，這些是否具有規模？

I know you want to increase their scale, but are they already sort of at a scale where with those changes they can be -- they cover their own overhead and so the corporate overhead is kind of an isolated variable? Or is that reading too much into this?

我知道你想擴大他們的規模，但是他們是否已經達到了透過這些變化可以達到的規模——他們覆蓋了自己的管理費用，因此公司管理費用是一種孤立的變數？還是對這個的解讀太多了？

I'll just add that we believe we have the resources, the leadership, and the overhead resources in place to scale this business to be generating free cash flow.

我只想補充一點，我們相信我們擁有適當的資源、領導力和間接費用資源來擴展這項業務以產生自由現金流。

Okay. And then I want to ask about -- a lot has happened in the first quarter, just sort of macroeconomically and geopolitically. And, well, I guess real quick first, just -- you mentioned a 17% backlog increase in residential. Was that quarter over quarter or year over year? Just to clarify.

好的。然後我想問的是，第一季發生了很多事情，包括宏觀經濟和地緣政治方面。而且，好吧，我想首先真的很快，只是——你提到住宅積壓增加了 17%。該季度是環比還是同比？只是為了澄清。

That was just a sequential improvement. And again, that was --

這只是一個連續的改進。再說一遍，那是——

Sequential improvement, yeah.

循序漸進的進步，是的。

-- that's really driven by across all sales channels effectively, so we're seeing growth in our sales channel partner and the result of the direct sales channel.

——這實際上是由所有銷售管道有效推動的，因此我們看到我們的銷售通路合作夥伴的成長以及直接銷售管道的成果。

So in the middle of the first quarter, there's the invasion of Ukraine. And then there's also -- inflation is in the news every day. And those -- I think from just talking to people, a lot of people look at the Ukraine situation as just another proof point that we need to get off fossil fuels. I know inflation can be a powerful sort of sales pitch in terms of saying, purchase your system now, lock it in and control against rising electricity rates. And so with inflation being in the headlines and everything.

所以在第一季中期，就發生了對烏克蘭的入侵。此外，通貨膨脹每天都出現在新聞中。我認為，透過與人們的交談，許多人將烏克蘭的情況視為我們需要擺脫化石燃料的另一個證據。我知道通貨膨脹可以成為一種強有力的推銷手段，也就是說，現在購買您的系統，鎖定它並控制電價上漲。因此，通貨膨脹成為頭條新聞和一切。

So are you seeing these items like these or maybe even other ones I haven't thought of, actually translating into higher close rates or maybe more inbound calls from customers? Or is that part of where you're seeing the 17% backlog increase? Or are there certain key specific phenomena that are helping drive that?

那麼，您是否看到這些項目，甚至其他我沒有想到的項目，實際上轉化為更高的成交率或更多的客戶來電？或者您看到積壓訂單增加了 17%，這就是其中的一部分嗎？或者是否有某些關鍵的具體現像有助於推動這一趨勢？

I think there's a number of things that are contributing. And you mentioned a few of them, energy independence certainly being one of them and the theme that we pitch often. But at the same time, inflation is not only a pressure on people's finances from a cash availability standpoint, but also we see utility rates rising dramatically, sometimes in excess of the predictions of inflation.

我認為有很多因素在起作用。您提到了其中的一些，能源獨立當然是其中之一，也是我們經常宣傳的主題。但同時，從現金供應的角度來看，通膨不僅對人們的財務構成壓力，而且我們還看到公用事業費率急劇上升，有時超過了通膨的預測。

So I think it's still a very safe bet for people if they want to preserve the capital they have available to them to move towards clean renewable energy versus depending on the grid. And I will say that everybody we're talking to on the lending side, on our competitors, the messages that we're hearing are very consistent with ours. We are seeing increased demand, not decreased demand. We are seeing more people reaching out to us, more referrals from neighbors and friends.

因此，我認為，如果人們想保留可用於轉向清潔再生能源而不是依賴電網的資本，這對人們來說仍然是一個非常安全的選擇。我想說的是，我們在貸款方面、競爭對手方面與我們交談的每個人，我們聽到的信息都與我們的非常一致。我們看到需求增加，而不是減少。我們看到越來越多的人向我們伸出援手，越來越多的鄰居和朋友向我們推薦。

And then, of course, our direct sales channel is a mechanism that we haven't had before. And it's driving quite a bit of business into the front door as well. They have a telesales group that does a very good job of canvassing by phone, and then they've got a human out of the street type of group that's following a more traditional sales model. And between the two of those, we're definitely seeing an increase in customer demand.

當然，我們的直銷管道是我們以前沒有過的機制。它也為前門帶來了相當多的業務。他們有一個電話銷售小組，透過電話進行遊說，做得非常好，然後他們有一個來自街頭的人員，遵循更傳統的銷售模式。在這兩者之間，我們肯定會看到客戶需求的增加。

Okay. And following up on the direct sales effort. So I know you had a significant headcount increase because of that. I think it was about 250 employees. I think most of them are added this quarter. And so I guess two-part question would be, one, how should we think of that in relation to selling and marketing as a percentage of revenue? Because there is an uptick there.

好的。並跟進直接銷售工作。所以我知道你們因此大幅增加了員工人數。我認為大約有 250 名員工。我認為其中大部分是本季度添加的。所以我想由兩部分組成的問題是，第一，我們該如何看待銷售和行銷佔收入的百分比？因為那裡有上漲。

But of course, when somebody is newly hired, they're not necessarily going to be. And yes, there's a learning curve in terms of becoming a more and more effective salesperson. And then -- so should we sort of -- how should we expect that to trend?

但當然，當有人新聘用時，他們不一定會被聘用。是的，成為一名越來越有效率的銷售人員有一個學習曲線。然後——所以我們應該——我們應該如何預期這種趨勢？

And kind of related to that, do you expect significant or meaningful headcount additions through the rest of the year? Should we expect another 100 salespeople or so to be added before the end of this year? Or is this kind of what you wanted? To build up, to train them, and then improve the performance of this cohort, if you will.

與此相關的是，您預計今年剩餘時間會有大量或有意義的員工人數增加嗎？我們是否應該預計在今年年底前再增加 100 名左右的銷售人員？或者這就是你想要的嗎？如果你願意的話，去培養、訓練他們，然後提升這群人的表現。

Gaylon, I can --

蓋倫，我可以——

(multiple speakers) go ahead.

（多個發言者）繼續。

I can take it. I can start. So most of the sales reps that we're talking about are 1099s. So majority of that growth is not really salary related or compensation related. There's a piece of that certainly embedded in as we're building the leadership for the inside sales group.

我可以接受。我可以開始了。所以我們談論的大多數銷售代表都是 1099。因此，大部分成長實際上與工資或薪酬無關。當我們為內部銷售團隊建立領導力時，肯定會嵌入其中的一部分。

But I would say that as you think about modeling out the rest of the year, we'd like to be -- we were -- in the residential segment, we were around 42% of sales. We'd expect that to come down slightly throughout the year. I think historically, we've been at the 38% to 40% range.

但我想說的是，當你考慮對今年剩餘時間進行建模時，我們希望——我們確實——在住宅領域，我們佔銷售額的 42% 左右。我們預計這一數字全年會略有下降。我認為從歷史上看，我們一直處於 38% 到 40% 的範圍。

But again, we're going to continue to make these investments to build out this direct sales force. We think it's the right strategy for the company, and it's a good diversification play as well.

但同樣，我們將繼續進行這些投資來建立這支直銷隊伍。我們認為這對公司來說是正確的策略，也是一個很好的多元化策略。

Okay. And then I want to talk -- I want to turn to -- now we're faced with the prospect of rising interest rates, and I know -- I think you do decent amount of cash sales, but I think you also do some lease and loan. Could you remind us kind of the lease, loan, cash mix of your residential sales? And if possible, I think a lot of times with what's presented to a customer, a prospect or a customer, it's presented in what your monthly payments would be and comparing that to the utility rate.

好的。然後我想談談 - 我想談談 - 現在我們面臨著利率上升的前景，我知道 - 我認為你做了相當多的現金銷售，但我認為你也做了一些租賃和貸款。您能否提醒我們一下您的住宅銷售的租賃、貸款、現金組合狀況？如果可能的話，我認為很多時候，向客戶、潛在客戶或客戶提供的內容，都是以您的每月付款形式呈現的，並將其與公用事業費率進行比較。

And so I'm curious if you can give us any sense for how much you have to sell, $100 a month, $130 a month or whatever, how much would that increase based on like a 100 basis point increase in interest rates from the Federal Reserve?

所以我很好奇你能否告訴我們你必須賣多少錢，每月 100 美元，每月 130 美元或其他什麼，如果聯邦利率增加 100 個基點，那麼這個數字會增加多少預訂？

Just going back to the first part of your question. The first part of your question is what's our mix. We're predominantly loan. There are -- we do offer all three options to our customers, and they have that choice. But again, most of them move towards the loan equation.

回到你問題的第一部分。你問題的第一部分是我們的組合是什麼。我們主要是貸款。我們確實為客戶提供了所有三種選擇，他們有這樣的選擇。但同樣，他們中的大多數人都轉向了貸款等式。

Okay. And then, yes, if interest rates increase for your maybe most popular loan products, whatever maturity that is, a seven-year -- do you have a sense for the sensitivity of the monthly payments to rising interest rates?

好的。然後，是的，如果您可能最受歡迎的貸款產品的利率上升，無論期限是七年期，您是否了解每月付款對利率上升的敏感度？

I think the easiest way to put it is that we are confident that the utility rates and the customer demand is going to increase in the face of those -- in the face of those changes. As you know, I'm sure we pay the lending companies a fee to keep the interest rates at a certain point. And in the end, if we end up paying a slightly larger fee, that fee gets passed on in the sales price of the product.

我認為最簡單的說法是，我們有信心面對這些變化，公用事業費率和客戶需求將會增加。如您所知，我確信我們會向貸款公司支付一定費用，以將利率保持在某個水平。最後，如果我們最終支付稍高的費用，該費用就會轉嫁給產品的銷售價格。

So it isn't necessarily that the payment per month is going to go up necessarily, or it's not going to go up literally with the increase. But rather the fee will be rolled into the project costs. So it really kind of just -- there is a number -- I guess what I'm trying to say is there's a number of moving parts there.

因此，每月的付款不一定會增加，或不會隨著增加而實際增加。相反，該費用將計入專案成本。所以這確實是——有一個數字——我想我想說的是那裡有很多移動部件。

It's kind of hard to -- for each individual homeowner, with each individual homeowner's financial situation, to kind of understand, even in a trend, what 100 basis points change would do. I mean this is relatively unprecedented times from an inflation standpoint, and I think everybody's trying to anticipate where things are going. We're staying focused on the strong demand despite the interest rate changes and the inflationary pressures. And we're -- right now, at least for the short to medium term, it seems as though demand is being unaffected by those changes.

對於每個房主來說，根據每個房主的財務狀況，很難理解 100 個基點的變化會產生什麼影響，即使在趨勢中也是如此。我的意思是，從通貨膨脹的角度來看，這是一個相對史無前例的時期，我認為每個人都在試圖預測事情的發展方向。儘管存在利率變化和通膨壓力，但我們仍然關注強勁的需求。現在，至少在中短期內，需求似乎並未受到這些變化的影響。

Okay. That's helpful. And then with modules, you guys are building up inventory, and that seems like the right move, especially in this environment. But I'm curious to know if you have some perspective there, since you're doing both C&I projects and residential projects. When you're going out there in the market to procure modules, and with what's going on with the AD/CVD, with the Auxin Solar case, are you seeing any differences?

好的。這很有幫助。然後透過模組，你們正在建立庫存，這似乎是正確的舉動，尤其是在這種環境下。但我很想知道您是否對此有一些看法，因為您同時從事工商業項目和住宅項目。當您去市場採購組件時，對於 AD/CVD 的情況以及 Auxin Solar 的情況，您是否發現任何差異？

The narrative among analysts is sort of that it should be easier to get residential modules and maybe harder to get larger modules. Are you seeing any sort of differences in procurement? It's easier to build an inventory of one or the other?

分析師的說法是，獲得住宅模組應該更容易，而獲得更大的模組可能更困難。您是否發現採購上有任何差異？建立一個或另一個的庫存會更容易嗎？

I would say that we haven't had an incredible amount of difficulty in sourcing either. It has been more challenging, don't get me wrong. We are definitely making more phone calls and dealing with changing price, but we didn't necessarily deal with rates of change -- we're dealing with rates of change that we weren't used to dealing with.

我想說的是，我們在採購方面也沒有遇到令人難以置信的困難。這更具挑戰性，不要誤會我的意思。我們肯定會打更多的電話並處理價格變化，但我們不一定要處理變化率——我們正在處理我們不習慣處理的變化率。

But right now, we're not having -- it's not like we're out of luck on either, in commercial or the residential, through the end of this year and well into '23. That said, if the Auxin Solar situation becomes different come August when the decision is supposed to be made, the preliminary decision, that could change things; that could make it more difficult. But for now, the modules continue to flow. We are well committed with Tier 1 providers well into next year.

但現在，從今年年底到 23 年，我們在商業或住宅領域都沒有運氣不佳。也就是說，如果奧信太陽能的情況在八月應該做出決定時發生變化，即初步決定，這可能會改變事情；這可能會讓事情變得更加困難。但目前，這些模組仍在繼續流動。我們與一級供應商的承諾將持續到明年。

Okay. And then my last question and then I'll take the rest offline is just industry forecasters for the US markets seem to expect a pretty healthy surge for the C&I sector in kind of 2022, 2023. Some of it's this idea that I think the -- there have been more permitting and interconnect challenges on C&I. And so that's kind of created a bit of a bottleneck or a backlog that's accumulated. And then as that gets worked through, you can get this real accelerated or kind of a more impressive surge on the C&I side versus even residential and utility.

好的。然後我的最後一個問題，然後我將把剩下的問題放到線下，美國市場的行業預測者似乎預計 C&I 行業將在 2022 年、2023 年出現相當健康的增長。我認為其中一些想法是 - - C&I 面臨更多許可和互連挑戰。因此，這就造成了一些瓶頸或累積的積壓。然後，當這個問題得到解決時，你可以在工商業方面獲得真正的加速，或者說比住宅和公用事業方面更令人印象深刻的激增。

So I'm wondering, is that something you expect that you guys could benefit from? Or does it only apply to projects that have already been constructed and are just waiting on the interconnects so that they can get counted among these forecasts? And you mentioned upgrades to grid interconnects. I'm wondering if that kind of ties into the same -- if that's related to the same issue. Kind of, how does that play out, and what does that look like for you guys?

所以我想知道，你們希望你們能從中受益嗎？還是它只適用於已經建成並正在等待互連以便將其計入這些預測的項目？您提到了電網互連的升級。我想知道這種聯繫是否相同——是否與同一問題相關。有點，結果如何？你們覺得這是什麼樣的呢？

I think it is related to the question that you asked. The grid is maturing. And even though we hear all the time about instability and weaknesses, work is being done all the time to make the grid better. It may not be where we want it to be, but it is improving. And as that improves, that is beneficial for us as an installer who hooks up into the -- from the commercial industrial public works side.

我認為這與你問的問題有關。網格正在日趨成熟。儘管我們一直聽說不穩定和弱點，但我們一直在努力讓電網變得更好。它可能不是我們想要的樣子，但它正在改善。隨著這種情況的改善，這對我們作為連接到商業工業公共工程的安裝人員來說是有利的。

Additionally, solar is still a maturing market on the C&I side. And when -- and where you see that every day is permitting authorities becoming more comfortable with and understanding better and be more willing to standardize the requirements for permitting for commercial, industrial, and similar projects. So we are seeing an easing of pressures, even above and beyond just people going back to work after COVID and the permitting offices as such.

此外，對於工商業而言，太陽能仍然是一個成熟的市場。當你每天都看到許可當局變得更加適應和更好地理解並且更願意標準化商業、工業和類似項目的許可要求時，在哪裡。因此，我們看到壓力有所緩解，甚至超出了人們在新冠疫情結束後重返工作崗位和許可辦公室的壓力。

We're actually seeing an easier time getting things through those offices because we're having to explain less. We, as a vendor or construction company, better understand individual requirements of the individual regulatory bodies and the [AHAs] in there. And their requirements are becoming more standardized and less individual. So all of those are things that we're going to make this an easier business for us to be in.

事實上，我們發現透過這些辦公室處理事情變得更加容易，因為我們不必解釋得更少。作為供應商或建築公司，我們更了解各個監管機構和 [AHA] 的具體要求。他們的要求變得更加標準化，而不是個人化。因此，所有這些都是我們將使這項業務更容易進行的事情。

Rising rates, of course, are going to drive demand. I see a lot of numbers that talk about '24, '25, '26 being the renaissance for commercial solar and really taking off. We think it's going to be a little sooner than that, but we're certainly going to be well prepared for '24, '25, '26 when it really does take off.

當然，利率上升將推動需求。我看到很多數字都在談論「24」、「25」、「26」是商業太陽能的復興和真正的起飛。我們認為這會比這早一點，但我們肯定會為 24、25、26 年真正起飛時做好充分準備。

Okay, great. Thank you very much, guys. I'll take the rest offline.

好的，太好了。非常感謝你們。我會把剩下的部分離線。

And we have reached the end of the question-and-answer session. And I'll now turn the call back over to Gaylon Morris for closing remarks.

我們的問答環節已經結束了。現在我將把電話轉回給蓋倫·莫里斯（Gaylon Morris）做總結發言。

So once again, everybody, thank you for joining our call. Should you have any questions, feel free to contact us at ir@sunworksusa.com, and a member of our team will follow up with you. This concludes our call today. You may now disconnect. Thank you.

再次感謝大家加入我們的電話會議。如果您有任何疑問，請隨時透過 ir@sunworksusa.com 與我們聯繫，我們團隊的成員將與您聯繫。我們今天的電話會議到此結束。您現在可以斷開連線。謝謝。

And this concludes today's conference, and you may disconnect your lines at this time. Thank you for your participation.

今天的會議到此結束，大家可以掛斷電話了。感謝您的參與。