SAN DIEGO, May 15, 2024 (GLOBE NEWSWIRE) — Robbins Geller Rudman & Dowd LLP announces that purchasers of Shoals Technologies Group, Inc. (NASDAQ: SHLS) Class A common stock between January 27, 2021 and May 7, 2024, inclusive (the “Class Period”) including purchases directly in Shoals’ December 2022 secondary public offering of Class A common stock (the “SPO”) have until May 21, 2024 to seek appointment as lead plaintiff of the Shoals class action lawsuit. Captioned Kissimmee Utility Authority Employees’ Retirement Plan v. Shoals Technologies Group, Inc., No. 24-cv-00598 (M.D. Tenn.), the Shoals class action lawsuit charges Shoals, certain of Shoals’ current and former executives and directors, and underwriters of the SPO with violations of the Securities Act of 1933 and/or the Securities Exchange Act of 1934. A previously filed complaint is captioned Westchester Putnam Counties Heavy & Highway Laborers Local 60 Benefits Fund v. Shoals Technologies Group, Inc., No. 24-cv-00334 (M.D. Tenn.).
If you suffered substantial losses and wish to serve as lead plaintiff of the Shoals class action lawsuit, please provide your information here:
https://www.rgrdlaw.com/cases-shoals-technologies-group-inc-class-action-lawsuit-shls.html
You can also contact attorneys J.C. Sanchez or Jennifer N. Caringal of Robbins Geller by calling 800/449-4900 or via e-mail at info@rgrdlaw.com. Lead plaintiff motions for the Shoals class action lawsuit must be filed with the court no later than May 21, 2024.
CASE ALLEGATIONS: Shoals is a provider of electrical balance of systems solutions used in solar, storage, and electrical vehicle charging infrastructure.
The Shoals class action lawsuit alleges that defendants throughout the Class Period made false and/or misleading statements and/or failed to disclose that: (i) between 2020 and the end of 2022, Shoals had installed defective wires at approximately 300 sites impacting approximately 30% of all wire harnesses manufactured by Shoals during this time period; (ii) as a result, Shoals was facing tens of millions of dollars in shrinkback warranty liabilities; (iii) Shoals had not booked a sufficient warranty expense provision to cover the remediation costs for the shrinkback issue; (iv) Shoals’ historical reported revenue, gross profit, and net income had been generated in substantial part through the sale of defective products posing a risk of injury, death, and fire damage to Shoals’ customers; (v) Shoals’ ability to competitively differentiate its products through representations regarding the reliability, safety, and quality of its offerings had become materially impaired; (vi) several of Shoals’ customers had expressed concerns regarding Shoals’ defective wiring given the attendant risks of serious injury or death, fires, property damage, and increased governmental scrutiny; (vii) consequently, Shoals’ business and operations were acutely exposed to material, undisclosed risks of reputational harm and negative impacts to Shoals’ business, financial results, and prospects; and (viii) Shoals’ sale of defective wire harnesses had negatively impacted Shoals’ sales, customer relationships, and financial results and that defendants’ representations regarding Shoals’ business, sales, and prospects were materially misleading.
On August 1, 2023, Shoals revealed that it was recording a $9.4 million warranty expense primarily due to the shrinkback insulation issue. As a result, Shoals reported that its quarterly second quarter of 2023 gross profit margin had declined sequentially to 42.4% from approximately 46% reported in the prior quarter. On this news, the price of Shoals Class A common stock fell approximately 6%.
Then, on November 7, 2023, Shoals disclosed that its shrinkback warranty expenses had ballooned in the third quarter of 2023 to more than $50 million – representing a greater than five-fold increase. As a result, Shoals’ quarterly gross profit had declined more than 60% to $14 million from $36 million in the prior year quarter and Shoals suffered a net loss of $10 million in the quarter compared to net income of $13 million in the prior year period. On this news, the price of Shoals Class A common stock fell approximately 20% over two trading sessions.
Thereafter, on February 28, 2024, Shoals revealed that growth in its backlog and awarded orders had materially deteriorated in the fourth quarter of 2023, falling sequentially by $2 million to $631.3 million, down from $633.3 million in the prior quarter. In addition, Shoals issued quarterly revenue guidance of $90 million to $100 million, revealing that quarterly revenue was projected to decline sequentially by more than $35 million at the midpoint of the range. Shoals also provided 2024 annual revenue guidance of $480 to $520 million, which at the midpoint was approximately 19% below consensus analyst estimates of approximately $620 million. On this news, the price of Shoals Class A common stock fell more than 16%.
Finally, on May 7, 2024, Shoals disclosed that its backlog and awarded orders had fallen more than $16 million on a sequential basis to $615.2 million in the first quarter of 2024. Shoals also lowered its 2024 annual revenue guidance by 7% at the midpoint to a range of $440 million to $490 million. On this news, the price of Shoals Class A common stock fell nearly 15%, further damaging investors.
The plaintiff is represented by Robbins Geller, which has extensive experience in prosecuting investor class actions including actions involving financial fraud. You can view a copy of the complaint by clicking here.
THE LEAD PLAINTIFF PROCESS: The Private Securities Litigation Reform Act of 1995 permits any investor who purchased Shoals Class A common stock during the Class Period, including purchases directly in the SPO, to seek appointment as lead plaintiff in the Shoals class action lawsuit. A lead plaintiff is generally the movant with the greatest financial interest in the relief sought by the putative class who is also typical and adequate of the putative class. A lead plaintiff acts on behalf of all other class members in directing the Shoals class action lawsuit. The lead plaintiff can select a law firm of its choice to litigate the Shoals class action lawsuit. An investor’s ability to share in any potential future recovery is not dependent upon serving as lead plaintiff of the Shoals class action lawsuit.
ABOUT ROBBINS GELLER: Robbins Geller Rudman & Dowd LLP is one of the world’s leading complex class action firms representing plaintiffs in securities fraud cases. The Firm was ranked #1 on the ISS Securities Class Action Services Top 50 Report for recovering more than $1.75 billion for investors in 2022 – the third year in a row Robbins Geller topped the list. And in those three years alone, Robbins Geller recovered nearly $5.3 billion for investors, more than double the amount recovered by any other plaintiffs’ firm. With 200 lawyers in 10 offices, Robbins Geller is one of the largest plaintiffs’ firms in the world and the Firm’s attorneys have obtained many of the largest securities class action recoveries in history, including the largest securities class action recovery ever – $7.2 billion – in In re Enron Corp. Sec. Litig. Please visit the following page for more information:
https://www.rgrdlaw.com/services-litigation-securities-fraud.html
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Contact:
Robbins Geller Rudman & Dowd LLP
J.C. Sanchez, Jennifer N. Caringal
655 W. Broadway, Suite 1900, San Diego, CA 92101
800-449-4900
info@rgrdlaw.com
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