Array Technologies (NASDAQ: ARRY) (“Array” or “the Company”), a
leading provider of tracker solutions and services for
utility-scale solar energy projects, today announced financial
results for its second quarter ended June 30, 2023.
“Array delivered another strong performance in
the second quarter as we exceeded expectations across the board.
Revenue grew 21% from the prior year, anchored by 124%
year-over-year growth in our STI segment. Gross margin at 29.6% was
particularly strong as we took advantage of cost-saving
opportunities in the quarter and an increase in higher-margin
non-tracker sales. Capitalizing on the strong margin performance,
Adjusted EBITDA was $116 million for the second quarter, which was
a $95 million improvement from the prior year. And finally, we
generated $57 million of free cash flow in the first half of 2023,
leaving us with an ending cash balance at June 30, 2023 of $156
million, which represents an improvement of $105 million from June
30, 2022,” said Kevin Hostetler, Chief Executive Officer.
Mr. Hostetler continued, “We also saw a
meaningful increase in our sequential bookings, winning
approximately $600 million in the quarter. We were happy to see the
preliminary guidance come out on IRA domestic content which led to
an improved momentum in our conversion of pipeline to orders. That
said, we did see a larger proportion of these bookings represent
2024 deliveries than we had expected going into the quarter. This
fact, combined with larger than anticipated pushouts due to module
availability, further IRA clarity, and permitting issues, has
negatively impacted anticipated revenue for 2023. However, it is
important to note that despite a lower outlook for revenue, we are
increasing our forecasted Adjusted EBITDA and Adjusted EPS as we
have increased our full-year gross margin expectation. Further, by
delivering more earnings on less revenue, we are able to drive
better than forecasted free cash flow performance this year, which
we will use to accelerate our deleveraging.”
Mr. Hostetler concluded, “While we are
disappointed in the progression of the elements we cannot control,
we steadfastly remain focused on the execution of our strategy.
That includes delivering a strong 2023 while positioning ourselves
for success as the industry moves into its next phase of growth. We
will enter 2024 with strong bookings momentum, a much-improved
balance sheet, a multi-product offering enabling us to expand our
target market while delivering industry-leading gross margin, and a
stronger operating system that will continue to improve shareholder
returns.”
Second Quarter 2023 Financial
Results
Revenue increased 21% to $507.7 million,
compared to $419.9 million for the prior-year period resulting from
both an increase in the total number of MWs shipped and an increase
in ASP due to improved pass-through pricing to our customers.
Gross profit increased 276% to $150.0 million
compared to $39.9 million in the prior year period, driven by both
higher volume and an increase in gross profit as a percent of
revenue. Gross margin increased to 29.6% from 9.5% driven by an
improvement in pass-through pricing to customers, cost-saving
opportunities, and an increase in non-tracker sales.
Operating expenses increased to $53.8 million
compared to $53.3 million during the same period in the prior year.
The increase is primarily related to higher census and professional
fees, partly offset by $13.4 million in lower amortization expense
in 2023 compared to 2022, which had elevated amortization costs
related to the STI acquisition.
Net income to common stockholders was $52.0
million compared to a net loss of $17.2 million during the same
period in the prior year, and basic and diluted income per share
was $0.34 compared to basic and diluted loss per share of $0.11
during the same period in the prior year.
Adjusted EBITDA increased to $115.6 million,
compared to $20.9 million for the prior-year period.
Adjusted net income was $71.1 million compared
to adjusted net income of $12.9 million during the same period in
the prior year and adjusted basic and diluted adjusted net income
per share was $0.47 compared to adjusted diluted net income per
share of $0.09 during the same period in the prior year.
Executed Contracts and Awarded
Orders
Total executed contracts and awarded orders at
June 30, 2023 were $1.7 billion, with $1.4 billion from our Array
Legacy Operations segment and $0.3 billion from STI Norland.
Full Year 2023 Guidance
For the year ending December 31, 2023, the
company expects:
- Revenue to be in the range of
$1,650 million to $1,725 million
- Adjusted EBITDA(2) to be in the
range of $280 million to $295 million
- Adjusted net income per share(2) to
be in the range of $1.00 to $1.07
(2) A reconciliation of projected adjusted
EBITDA and adjusted net income per share, which are forward-looking
measures that are not prepared in accordance with GAAP, to the most
directly comparable GAAP financial measures, is not provided
because we are unable to provide such reconciliation without
unreasonable effort. The inability to provide a quantitative
reconciliation is due to the uncertainty and inherent difficulty
predicting the occurrence, the financial impact and the periods in
which the components of the applicable GAAP measures and non-GAAP
adjustments may be recognized. The GAAP measures may include the
impact of such items as non-cash share-based compensation,
revaluation of the fair-value of our contingent consideration, and
the tax effect of such items, in addition to other items we have
historically excluded from adjusted EBITDA and adjusted net income
per share. We expect to continue to exclude these items in future
disclosures of these non-GAAP measures and may also exclude other
similar items that may arise in the future (collectively, “non-GAAP
adjustments”). The decisions and events that typically lead to the
recognition of non-GAAP adjustments are inherently unpredictable as
to if or when they may occur. As such, for our 2023 outlook, we
have not included estimates for these items and are unable to
address the probable significance of the unavailable information,
which could be material to future results.
Conference Call Information
Array management will host a conference call
today at 5:00 p.m. Eastern Time to discuss the Company’s financial
results. The conference call can be accessed live over the phone by
dialing (877)-451-6152 (domestic) or (201)-389-0879
(international). A telephonic replay will be available
approximately three hours after the call by dialing (844)-512-2921,
or for international callers, (412)-317-6671. The passcode for the
live call and the replay is 13739433. The replay will be available
until 11:59 p.m. (ET) on August 22, 2023.
Interested investors and other parties can
listen to a webcast of the live conference call by logging onto the
Investor Relations section of the Company's website at
http://ir.arraytechinc.com. The online replay will be available for
30 days on the same website immediately following the call.
To learn more about Array Technologies, please
visit the company's website at http://ir.arraytechinc.com.
About Array Technologies,
Inc.
Array Technologies (NASDAQ: ARRY) is a leading
American company and global provider of utility-scale solar tracker
technology. Engineered to withstand the harshest conditions on the
planet, Array’s high-quality solar trackers and sophisticated
software maximize energy production, accelerating the adoption of
cost-effective and sustainable energy. Founded and headquartered in
the United States, Array relies on its diversified global supply
chain and customer-centric approach to deliver, commission and
support solar energy developments around the world, lighting the
way to a brighter, smarter future for clean energy. For more news
and information on Array, please visit arraytechinc.com.
Investor Relations Contact:
Array Technologies, Inc.Investor Relations
505-437-0010investors@arraytechinc.com
Forward-Looking
Statements This press release contains
forward-looking statements that are based on our management’s
beliefs and assumptions and on information currently available to
our management. Forward-looking statements include information
concerning our projected future results of operations, business
strategies, and industry and regulatory environment.
Forward-looking statements include statements that are not
historical facts and can be identified by terms such as
“anticipate,” “believe,” “could,” “estimate,” “expect,” “intend,”
“may,” “plan,” “potential,” “predict,” “project,” "seek," “should,”
“will,” “would” or similar expressions and the negatives of those
terms.
Array’s actual results and the timing of events
could materially differ from those anticipated in such
forward-looking statements as a result of certain risks,
uncertainties and other factors, including without limitation:
changes in the demand for solar energy projects; a loss of one or
more of our significant customers, their inability to perform under
their contracts, or their default in payment; failure to retain key
personnel or failure to attract additional qualified personnel;
defects or performance problems in our products that could result
in loss of customers, reputational damage, a loss of revenue, and
warranty, indemnity and product liability claims; a drop in the
price of electricity derived from the utility grid or from
alternative energy sources; challenges in our ability to
consolidate the financial reporting of our acquired foreign
subsidiaries; delays, disruptions or quality control problems in
our product development operations; the effects of a further
increase in interest rates, or a reduction in the availability of
tax equity or project debt capital in the global financial markets,
which could make it difficult for customers to finance the cost of
a solar energy system and could reduce the demand for our products;
changes to tax laws and regulations that are applied adversely to
us or our customers; existing electric utility industry policies
and regulations, and any subsequent changes, that may present
technical, regulatory and economic barriers to the purchase and use
of solar energy systems; the interruption of the flow of materials
from international vendors, including as a result of the imposition
of additional duties, tariffs and other charges or restrictions on
imports and exports; changes in the global trade environment,
including the imposition of import tariffs; economic, political and
market conditions, including the Russian-Ukraine conflict,
uncertain credit and global financial markets resulting from
increasing inflation and interest rates along with recent bank
failures, and the COVID-19 pandemic; the reduction, elimination or
expiration of government incentives for, or regulations mandating
the use of, renewable energy and solar energy specifically; our
ability to, obtain, maintain, protect, defend or enforce, our
intellectual property and other proprietary rights; significant
changes in the costs of raw materials; the implementation of the
IRA may not deliver as much growth as we are anticipating; our
ability to remediate our material weaknesses on a timely basis or
at all; the effect of our substantial indebtedness on our financial
condition; the occurrence of cybersecurity incidents, including
unauthorized disclosure of personal or sensitive data or theft of
confidential information; and the other risks and uncertainties
described in more detail in the Company’s most recent Annual Report
on Form 10-K and other documents on file with the SEC, each of
which can be found on our website www.arraytechinc.com.
Except as required by law, we assume no
obligation to update these forward-looking statements, or to update
the reasons actual results could differ materially from those
anticipated in these forward-looking statements, even if new
information becomes available in the future.
Non-GAAP
Financial InformationThis press
release includes certain financial measures that are not presented
in accordance with U.S. generally accepted accounting principles
(“GAAP”), including Adjusted EBITDA, Adjusted Net Income and
Adjusted Net Income per share. We define Adjusted EBITDA as net
income (loss) plus (i) other (income) expense, (ii) foreign
currency (gain) loss, (iii) preferred dividends and accretion, (iv)
interest expense, (v) income tax (benefit) expense, (vi)
depreciation expense, (vii) amortization of intangibles, (viii)
equity-based compensation, (ix) change in fair value of derivative
assets, (x) change in fair value of contingent consideration, (xi)
certain legal expense, (xii) certain acquisition costs, and (xiii)
other costs. We define Adjusted Net Income as net income (loss)
plus (i) amortization of intangibles, (ii) amortization of debt
discount and issuance costs (iii) preferred accretion, (iv)
equity-based compensation, (v) change in fair value of derivative
assets, (vi) change in fair value of contingent consideration,
(vii) certain legal expense, (viii) certain acquisition related
costs, (ix) other costs, and (x) income tax (expense) benefit of
adjustments. A detailed reconciliation between GAAP results and
results excluding special items (“non-GAAP”) is included within
this presentation. We calculate net income (loss) per
share as net income (loss) to common shareholders divided by the
basic and diluted weighted average number of shares outstanding for
the applicable period and we define Adjusted Net Income per share
as Adjusted Net Income (as detailed above) divided by the basic and
diluted weighted average number of shares outstanding for the
applicable period.
We believe that these non-GAAP financial
measures are provided to enhance the reader’s understanding of our
past financial performance and our prospects for the future. Our
management team uses these non-GAAP financial measures in assessing
the Company’s performance, as well as in planning and forecasting
future periods. The non-GAAP financial information is presented for
supplemental informational purposes only and should not be
considered a substitute for financial information presented in
accordance with GAAP, and may be different from similarly titled
non-GAAP measures used by other companies.
Among other limitations, Adjusted EBITDA and
Adjusted Net Income do not reflect our cash expenditures, or future
requirements, for capital expenditures or contractual commitments;
do not reflect the impact of certain cash charges resulting from
matters we consider not to be indicative of our ongoing operations;
do not reflect income tax expense or benefit; and other companies
in our industry may calculate Adjusted EBITDA and Adjusted Net
Income differently than we do, which limits their usefulness as
comparative measures. Because of these limitations, Adjusted EBITDA
and Adjusted Net Income should not be considered in isolation or as
substitutes for performance measures calculated in accordance with
GAAP. We compensate for these limitations by relying primarily on
our GAAP results and using Adjusted EBITDA and Adjusted Net Income
on a supplemental basis. You should review the reconciliation of
net income (loss) to Adjusted EBITDA and Adjusted Net Income below
and not rely on any single financial measure to evaluate our
business.
Array Technologies, Inc. and
Subsidiaries Consolidated Balance Sheets
(unaudited)(in thousands, except per share and share
amounts)
|
|
|
|
|
June 30, 2023 |
|
December 31, 2022 |
ASSETS |
Current assets |
|
|
|
Cash and cash equivalents |
$ |
155,966 |
|
|
$ |
133,901 |
|
Accounts receivable, net of allowance of $1,651 and $1,888,
respectively |
|
502,363 |
|
|
|
421,183 |
|
Inventories |
|
206,857 |
|
|
|
233,159 |
|
Income tax receivables |
|
312 |
|
|
|
3,532 |
|
Prepaid expenses and other |
|
42,740 |
|
|
|
39,434 |
|
Total current assets |
|
908,238 |
|
|
|
831,209 |
|
|
|
|
|
Property, plant and equipment,
net |
|
30,674 |
|
|
|
23,174 |
|
Goodwill |
|
441,255 |
|
|
|
416,184 |
|
Other intangible assets,
net |
|
375,527 |
|
|
|
386,364 |
|
Deferred income tax
assets |
|
— |
|
|
|
16,466 |
|
Derivative assets |
|
64,014 |
|
|
|
— |
|
Other assets |
|
33,076 |
|
|
|
32,655 |
|
Total assets |
$ |
1,852,784 |
|
|
$ |
1,706,052 |
|
|
|
|
|
LIABILITIES, REDEEMABLE PERPETUAL PREFERRED STOCK AND STOCKHOLDERS'
EQUITY |
Current liabilities: |
|
|
|
Accounts payable |
$ |
188,633 |
|
|
$ |
170,430 |
|
Accrued expenses and other |
|
61,156 |
|
|
|
54,895 |
|
Accrued warranty reserve |
|
1,540 |
|
|
|
3,690 |
|
Income tax payable |
|
16,711 |
|
|
|
6,881 |
|
Deferred revenue |
|
114,810 |
|
|
|
178,922 |
|
Current portion of contingent consideration |
|
1,809 |
|
|
|
1,200 |
|
Current portion of debt |
|
37,450 |
|
|
|
38,691 |
|
Other current liabilities |
|
12,844 |
|
|
|
10,553 |
|
Total current liabilities |
|
434,953 |
|
|
|
465,262 |
|
|
|
|
|
Deferred income tax liabilities |
|
74,902 |
|
|
|
72,606 |
|
Contingent consideration, net of current portion |
|
7,620 |
|
|
|
7,387 |
|
Other long-term liabilities |
|
16,117 |
|
|
|
14,808 |
|
Long-term warranty |
|
4,415 |
|
|
|
1,786 |
|
Long-term debt, net of current portion |
|
702,485 |
|
|
|
720,352 |
|
Total liabilities |
|
1,240,492 |
|
|
|
1,282,201 |
|
Commitments and contingencies
(Note 11) |
|
|
|
Series A Redeemable Perpetual Preferred Stock of $0.001 par value -
500,000 authorized; 419,259 and 406,389 shares issued as of June
30, 2023 and December 31, 2022, respectively; liquidation
preference of $419.3 million and $406.4 million at respective
dates |
|
324,838 |
|
|
|
299,570 |
|
Stockholders’ equity: |
|
|
|
Preferred stock of $0.001 par value - 4,500,000 shares authorized;
none issued at respective dates |
|
— |
|
|
|
— |
|
Common stock of $0.001 par
value - 1,000,000,000 shares authorized; 151,048,790 and
150,513,104 shares issued at respective dates |
|
151 |
|
|
|
150 |
|
Additional paid-in capital |
|
417,624 |
|
|
|
383,176 |
|
Accumulated deficit |
|
(176,530 |
) |
|
|
(267,470 |
) |
Accumulated other comprehensive income |
|
46,209 |
|
|
|
8,425 |
|
Total stockholders’
equity |
|
287,454 |
|
|
|
124,281 |
|
Total liabilities, redeemable
perpetual preferred stock and stockholders’ equity |
$ |
1,852,784 |
|
|
$ |
1,706,052 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Array Technologies, Inc. and
Subsidiaries Consolidated Statements of Operations
(unaudited) (in thousands, except per share amounts)
|
|
|
|
|
Three Months EndedJune 30, |
|
Six Months EndedJune 30, |
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
Revenue |
$ |
507,725 |
|
|
$ |
419,865 |
|
|
$ |
884,498 |
|
|
$ |
720,451 |
|
Cost of revenue |
|
357,683 |
|
|
|
379,919 |
|
|
|
633,277 |
|
|
|
653,918 |
|
Gross profit |
|
150,042 |
|
|
|
39,946 |
|
|
|
251,221 |
|
|
|
66,533 |
|
|
|
|
|
|
|
|
|
Operating expenses: |
|
|
|
|
|
|
|
General and
administrative |
|
40,250 |
|
|
|
28,936 |
|
|
|
78,392 |
|
|
|
74,361 |
|
Change in fair value of
contingent consideration |
|
705 |
|
|
|
(1,678 |
) |
|
|
2,043 |
|
|
|
(5,409 |
) |
Depreciation and
amortization |
|
12,846 |
|
|
|
26,020 |
|
|
|
27,087 |
|
|
|
49,257 |
|
Total operating expenses |
|
53,801 |
|
|
|
53,278 |
|
|
|
107,522 |
|
|
|
118,209 |
|
|
|
|
|
|
|
|
|
Income (loss) from
operations |
|
96,241 |
|
|
|
(13,332 |
) |
|
|
143,699 |
|
|
|
(51,676 |
) |
|
|
|
|
|
|
|
|
Other income (expense): |
|
|
|
|
|
|
|
Other income (expense),
net |
|
125 |
|
|
|
(371 |
) |
|
|
319 |
|
|
|
372 |
|
Foreign currency gain
(loss) |
|
260 |
|
|
|
(1,736 |
) |
|
|
66 |
|
|
|
2,127 |
|
Change in fair value of
derivative assets |
|
694 |
|
|
|
— |
|
|
|
(1,256 |
) |
|
|
— |
|
Interest expense |
|
(10,109 |
) |
|
|
(8,021 |
) |
|
|
(19,609 |
) |
|
|
(14,963 |
) |
Total other (expense) |
|
(9,030 |
) |
|
|
(10,128 |
) |
|
|
(20,480 |
) |
|
|
(12,464 |
) |
|
|
|
|
|
|
|
|
Income (loss) before income
tax (benefit) expense |
|
87,211 |
|
|
|
(23,460 |
) |
|
|
123,219 |
|
|
|
(64,140 |
) |
Income tax (benefit)
expense |
|
22,403 |
|
|
|
(18,436 |
) |
|
|
32,279 |
|
|
|
(33,179 |
) |
Net income (loss) |
|
64,808 |
|
|
|
(5,024 |
) |
|
|
90,940 |
|
|
|
(30,961 |
) |
Preferred dividends and
accretion |
|
12,784 |
|
|
|
12,182 |
|
|
|
25,268 |
|
|
|
23,788 |
|
Net income (loss) to common
shareholders |
$ |
52,024 |
|
|
$ |
(17,206 |
) |
|
$ |
65,672 |
|
|
$ |
(54,749 |
) |
|
|
|
|
|
|
|
|
Income (loss) per common
share |
|
|
|
|
|
|
|
Basic |
$ |
0.34 |
|
|
$ |
(0.11 |
) |
|
$ |
0.44 |
|
|
$ |
(0.37 |
) |
Diluted |
$ |
0.34 |
|
|
$ |
(0.11 |
) |
|
$ |
0.43 |
|
|
$ |
(0.37 |
) |
Weighted average number of
common shares outstanding |
|
|
|
|
|
|
|
Basic |
|
150,919 |
|
|
|
150,203 |
|
|
|
150,763 |
|
|
|
149,246 |
|
Diluted |
|
152,129 |
|
|
|
150,203 |
|
|
|
151,970 |
|
|
|
149,246 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Array Technologies, Inc. and
Subsidiaries Consolidated Statements of Cash
Flows (unaudited)(in thousands)
|
|
|
|
|
Three Months EndedJune 30, |
|
Six Months EndedJune 30, |
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
Operating
activities: |
|
|
|
|
|
|
|
Net income (loss) |
$ |
64,808 |
|
|
|
(5,024 |
) |
|
$ |
90,940 |
|
|
$ |
(30,961 |
) |
Adjustments to net income
(loss): |
|
|
|
|
|
|
|
Provision for bad debts |
|
(374 |
) |
|
|
365 |
|
|
|
(141 |
) |
|
|
510 |
|
Deferred tax expense |
|
(3,739 |
) |
|
|
(28,259 |
) |
|
|
816 |
|
|
|
(23,910 |
) |
Depreciation and amortization |
|
13,159 |
|
|
|
26,187 |
|
|
|
27,692 |
|
|
|
49,795 |
|
Amortization of debt discount and issuance costs |
|
2,172 |
|
|
|
1,576 |
|
|
|
4,998 |
|
|
|
3,286 |
|
Equity-based compensation |
|
4,945 |
|
|
|
2,964 |
|
|
|
8,311 |
|
|
|
7,472 |
|
Contingent consideration |
|
705 |
|
|
|
(1,678 |
) |
|
|
2,043 |
|
|
|
(5,409 |
) |
Warranty provision |
|
43 |
|
|
|
621 |
|
|
|
479 |
|
|
|
1,215 |
|
Write-down of inventories |
|
1,611 |
|
|
|
— |
|
|
|
3,458 |
|
|
|
409 |
|
Change in fair value of derivative assets |
|
(694 |
) |
|
|
— |
|
|
|
1,256 |
|
|
|
— |
|
Changes in operating assets and liabilities, net of business
acquisition: |
|
|
|
|
|
|
|
Accounts receivable |
|
(87,277 |
) |
|
|
(62,280 |
) |
|
|
(81,039 |
) |
|
|
(106,548 |
) |
Inventories |
|
46,156 |
|
|
|
(30,941 |
) |
|
|
22,844 |
|
|
|
(77,191 |
) |
Income tax receivables |
|
2,851 |
|
|
|
14,862 |
|
|
|
3,220 |
|
|
|
(7,062 |
) |
Prepaid expenses and other |
|
3,655 |
|
|
|
(6,543 |
) |
|
|
(3,292 |
) |
|
|
5,015 |
|
Accounts payable |
|
387 |
|
|
|
15,094 |
|
|
|
30,542 |
|
|
|
74,513 |
|
Accrued expenses and other |
|
3,197 |
|
|
|
(3,671 |
) |
|
|
7,097 |
|
|
|
3,356 |
|
Income tax payable |
|
4,878 |
|
|
|
1,543 |
|
|
|
9,830 |
|
|
|
(7,217 |
) |
Lease liabilities |
|
590 |
|
|
|
(1,385 |
) |
|
|
1,414 |
|
|
|
4,700 |
|
Deferred revenue |
|
(36,533 |
) |
|
|
65,902 |
|
|
|
(64,112 |
) |
|
|
47,263 |
|
Net cash provided by (used in) operating activities |
|
20,540 |
|
|
|
(10,667 |
) |
|
|
66,356 |
|
|
|
(60,764 |
) |
Investing
activities: |
|
|
|
|
|
|
|
Purchase of property, plant and equipment |
|
(5,541 |
) |
|
|
(1,538 |
) |
|
|
(9,424 |
) |
|
|
(3,895 |
) |
Acquisition of STI, net of cash acquired |
|
— |
|
|
|
(2 |
) |
|
|
— |
|
|
|
(373,818 |
) |
Net cash used in investing activities |
|
(5,541 |
) |
|
|
(1,540 |
) |
|
|
(9,424 |
) |
|
|
(377,713 |
) |
Financing
activities: |
|
|
|
|
|
|
|
Proceeds from Series A issuance |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
33,098 |
|
Proceeds from common stock issuance |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
15,885 |
|
Series A equity issuance costs |
|
(758 |
) |
|
|
(400 |
) |
|
|
(1,508 |
) |
|
|
(575 |
) |
Common stock issuance costs |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(450 |
) |
Payments on revolving credit facility |
|
— |
|
|
|
(33,000 |
) |
|
|
— |
|
|
|
(33,000 |
) |
Proceeds from revolving credit facility |
|
— |
|
|
|
49,000 |
|
|
|
— |
|
|
|
101,000 |
|
Proceeds from issuance of other debt |
|
17,332 |
|
|
|
24,370 |
|
|
|
23,801 |
|
|
|
30,599 |
|
Principal payments on term loan facility |
|
(11,075 |
) |
|
|
4,368 |
|
|
|
(22,150 |
) |
|
|
— |
|
Principal payments on other debt |
|
(21,051 |
) |
|
|
(22,377 |
) |
|
|
(38,257 |
) |
|
|
(22,377 |
) |
Contingent consideration payments |
|
— |
|
|
|
— |
|
|
|
(1,200 |
) |
|
|
(1,483 |
) |
Net cash provided by (used in) financing activities |
|
(15,552 |
) |
|
|
21,961 |
|
|
|
(39,314 |
) |
|
|
122,697 |
|
Effect of exchange rate changes
on cash and cash equivalent balances |
|
8,763 |
|
|
|
(8,199 |
) |
|
|
4,447 |
|
|
|
(844 |
) |
Net change in cash and cash
equivalents |
|
8,210 |
|
|
|
1,555 |
|
|
|
22,065 |
|
|
|
(316,624 |
) |
Cash and cash equivalents,
beginning of period |
|
147,756 |
|
|
|
49,491 |
|
|
|
133,901 |
|
|
|
367,670 |
|
Cash and cash equivalents, end of
period |
$ |
155,966 |
|
|
$ |
51,046 |
|
|
$ |
155,966 |
|
|
$ |
51,046 |
|
|
|
|
|
|
|
|
|
Supplemental Cash Flow
Information |
|
|
|
|
|
|
|
Cash paid for interest |
$ |
7,900 |
|
|
$ |
4,389 |
|
|
$ |
15,880 |
|
|
$ |
7,428 |
|
Cash paid for income taxes |
$ |
15,962 |
|
|
$ |
(230 |
) |
|
$ |
18,484 |
|
|
$ |
(230 |
) |
|
|
|
|
|
|
|
|
Non-cash Investing and
Financing Activities |
|
|
|
|
|
|
|
Dividends accrued on Series A Preferred |
$ |
6,521 |
|
|
$ |
6,417 |
|
|
$ |
12,871 |
|
|
$ |
12,606 |
|
Stock consideration paid for acquisition of STI |
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
200,224 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Array Technologies,
Inc.Adjusted EBITDA and Adjusted Net Income
Reconciliation (unaudited)(in thousands, except per share
amounts)
The following table reconciles net income (loss)
to Adjusted EBITDA:
|
|
|
|
|
Three Months EndedJune 30, |
|
Six Months EndedJune 30, |
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
Net income (loss) |
$ |
64,808 |
|
|
$ |
(5,024 |
) |
|
$ |
90,940 |
|
|
$ |
(30,961 |
) |
Preferred dividends and
accretion |
|
12,784 |
|
|
|
12,182 |
|
|
|
25,268 |
|
|
|
23,788 |
|
Net income (loss) to
common shareholders |
$ |
52,024 |
|
|
$ |
(17,206 |
) |
|
$ |
65,672 |
|
|
$ |
(54,749 |
) |
Other expense, net |
|
(125 |
) |
|
|
371 |
|
|
|
(319 |
) |
|
|
(372 |
) |
Foreign currency (gain)
loss |
|
(260 |
) |
|
|
1,736 |
|
|
|
(66 |
) |
|
|
(2,127 |
) |
Preferred dividends and
accretion |
|
12,784 |
|
|
|
12,182 |
|
|
|
25,268 |
|
|
|
23,788 |
|
Interest expense |
|
10,109 |
|
|
|
8,021 |
|
|
|
19,609 |
|
|
|
14,963 |
|
Income tax (benefit) expense |
|
22,403 |
|
|
|
(18,436 |
) |
|
|
32,279 |
|
|
|
(33,179 |
) |
Depreciation expense |
|
721 |
|
|
|
616 |
|
|
|
1,466 |
|
|
|
1,204 |
|
Amortization of intangibles |
|
12,437 |
|
|
|
25,794 |
|
|
|
26,225 |
|
|
|
48,932 |
|
Equity-based compensation |
|
5,240 |
|
|
|
2,971 |
|
|
|
8,580 |
|
|
|
7,479 |
|
Change in fair value of
derivative assets |
|
(694 |
) |
|
|
— |
|
|
|
1,256 |
|
|
|
— |
|
Change in fair value of
contingent consideration |
|
705 |
|
|
|
(1,678 |
) |
|
|
2,043 |
|
|
|
(5,409 |
) |
Legal expense(a) |
|
248 |
|
|
|
1,733 |
|
|
|
552 |
|
|
|
2,779 |
|
M&A(b) |
|
— |
|
|
|
(206 |
) |
|
|
— |
|
|
|
10,977 |
|
Other costs (c) |
|
— |
|
|
|
4,981 |
|
|
|
— |
|
|
|
7,327 |
|
Adjusted
EBITDA |
$ |
115,592 |
|
|
$ |
20,879 |
|
|
$ |
182,565 |
|
|
$ |
21,613 |
|
(a) Represents certain legal fees and other
related costs associated with (i) action against a competitor in
connection with violation of a non-competition agreement and
misappropriation of trade secrets for which a judgement has been
entered in our favor, (ii) actions filed against the company and
certain officers and directors alleging violations of the
Securities Exchange Acts of 1934 and 1933, which litigation was
dismissed with prejudice by the Court on May 19, 2023, and (iii)
other litigation. We consider these costs not representative of
legal costs that we will incur from time to time in the ordinary
course of our business.
(b) Represents fees related to the acquisition
of STI Norland.
(c) For the three months ended June 30, 2022,
other costs represent (i) $2.8 million in remediation and damages
incurred because of a shutdown of a key supplier due to a severe
weather event, (ii) $1.3 million associated with the transition of
CEOs as well as other one-time payroll related costs that we do not
anticipate repeating in the future, and (iii) $0.8 million related
to certain professional fees incurred related to the integration of
STI Norland. For the six months ended June 30, 2022, other costs
represent (i) $2.8 million in remediation and damages incurred
because of a shutdown of a key supplier due to a severe weather
event, (ii) $3.6 million associated with the transition of CEOs as
well as other one-time payroll related costs that we do not
anticipate repeating in the future, and (iii) $0.9 million related
to certain professional fees incurred related to the integration of
STI Norland.
The following table reconciles net income (loss)
to Adjusted Net Income:
|
Three Months EndedJune 30, |
|
Six Months EndedJune 30, |
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
Net income (loss) |
$ |
64,808 |
|
|
$ |
(5,024 |
) |
|
$ |
90,940 |
|
|
$ |
(30,961 |
) |
Preferred dividends and
accretion |
|
12,784 |
|
|
|
12,182 |
|
|
|
25,268 |
|
|
|
23,788 |
|
Net income (loss) to
common shareholders |
$ |
52,024 |
|
|
$ |
(17,206 |
) |
|
$ |
65,672 |
|
|
$ |
(54,749 |
) |
Amortization of
intangibles |
|
12,437 |
|
|
|
25,794 |
|
|
|
26,225 |
|
|
|
48,932 |
|
Amortization of debt discount
and issuance costs |
|
2,172 |
|
|
|
1,576 |
|
|
|
4,998 |
|
|
|
3,286 |
|
Preferred accretion |
|
6,263 |
|
|
|
5,765 |
|
|
|
12,398 |
|
|
|
11,118 |
|
Equity based compensation |
|
5,240 |
|
|
|
2,971 |
|
|
|
8,580 |
|
|
|
7,479 |
|
Change in fair value of
derivative assets |
|
(694 |
) |
|
|
— |
|
|
|
1,256 |
|
|
|
— |
|
Change in fair value of
contingent consideration |
|
705 |
|
|
|
(1,678 |
) |
|
|
2,043 |
|
|
|
(5,409 |
) |
Legal expense(a) |
|
248 |
|
|
|
1,733 |
|
|
|
552 |
|
|
|
2,779 |
|
M&A (b) |
|
— |
|
|
|
(206 |
) |
|
|
— |
|
|
|
10,977 |
|
Other costs(c) |
|
— |
|
|
|
4,981 |
|
|
|
— |
|
|
|
7,327 |
|
Income tax expense of
adjustments(d) |
|
(7,251 |
) |
|
|
(10,852 |
) |
|
|
(13,295 |
) |
|
|
(18,403 |
) |
Adjusted Net
Income |
$ |
71,144 |
|
|
$ |
12,878 |
|
|
$ |
108,429 |
|
|
$ |
13,337 |
|
|
|
|
|
|
|
|
|
Income (loss) per common
share |
|
|
|
|
|
|
|
Basic |
$ |
0.34 |
|
|
$ |
(0.11 |
) |
|
$ |
0.44 |
|
|
$ |
(0.37 |
) |
Diluted |
$ |
0.34 |
|
|
$ |
(0.11 |
) |
|
$ |
0.43 |
|
|
$ |
(0.37 |
) |
Weighted average number of
common shares outstanding |
|
|
|
|
|
|
|
Basic |
|
150,919 |
|
|
|
150,203 |
|
|
|
150,763 |
|
|
|
149,246 |
|
Diluted |
|
152,129 |
|
|
|
150,203 |
|
|
|
151,970 |
|
|
|
149,246 |
|
Adjusted net income (loss) per
common share |
|
|
|
|
|
|
|
Basic |
$ |
0.47 |
|
|
$ |
0.09 |
|
|
$ |
0.72 |
|
|
$ |
0.09 |
|
Diluted |
$ |
0.47 |
|
|
$ |
0.09 |
|
|
$ |
0.71 |
|
|
$ |
0.09 |
|
Weighted average number of
common shares outstanding |
|
|
|
|
|
|
|
Basic |
|
150,919 |
|
|
|
150,203 |
|
|
|
150,763 |
|
|
|
149,246 |
|
Diluted |
|
152,129 |
|
|
|
150,420 |
|
|
|
151,970 |
|
|
|
149,397 |
|
(a) Represents certain legal fees and other
related costs associated with (i) action against a competitor in
connection with violation of a non-competition agreement and
misappropriation of trade secrets for which a judgement has been
entered in our favor, (ii) actions filed against the company and
certain officers and directors alleging violations of the
Securities Exchange Acts of 1934 and 1933, which litigation was
dismissed with prejudice by the Court on May 19, 2023, and (iii)
other litigation. We consider these costs not representative of
legal costs that we will incur from time to time in the ordinary
course of our business.
(b) Represents fees related to the acquisition
of STI Norland.
(c) For the three months ended June 30, 2022,
other costs represent (i) $2.8 million in remediation and damages
incurred because of a shutdown of a key supplier due to a severe
weather event, (ii) $1.3 million associated with the transition of
CEOs as well as other one-time payroll related costs that we do not
anticipate repeating in the future, and (iii) $0.8 million related
to certain professional fees incurred related to the integration of
STI Norland. For the six months ended June 30, 2022, other costs
represent (i) $2.8 million in remediation and damages incurred
because of a shutdown of a key supplier due to a severe weather
event, (ii) $3.6 million associated with the transition of CEOs as
well as other one-time payroll related costs that we do not
anticipate repeating in the future, and (iii) $0.9 million related
to certain professional fees incurred related to the integration of
STI Norland.
(d) Represents the estimated tax impact of all
Adjusted Net Income add-backs, excluding those which represent
permanent differences between book versus tax.
Grafico Azioni Array Technologies (NASDAQ:ARRY)
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