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, 2024.
“We finished the second quarter with strong
performance and execution and are pleased with the continued demand
we’re seeing in our high-probability pipeline. Our orderbook
remains healthy at over $2 billion and we’re encouraged by our
customers’ interest in our portfolio of products and services and
the longer-term tailwinds supporting utility-scale solar as one of
the lowest cost options to satisfy rapidly growing energy needs,”
said Chief Executive Officer, Kevin Hostetler. “In the second
quarter we achieved revenue of $256 million, which was slightly
ahead of the expectations signaled on our last earnings call.
Adjusted gross margin continued to be strong at 35.0%, which
included incremental 45X benefits through June 30, 2024 that were
not previously factored in our guidance. Excluding these
incremental benefits, our second quarter adjusted gross margin
result was within the low-thirties guidance range previously
provided for the full-year. As we move through the remainder of the
year, we will continue to report gross margins inclusive of both
torque tube and structural fastener benefits derived from 45X, and
there is still more work being done around the maximization of
those credits and the eligibility of additional parts that may
qualify.”
Mr. Hostetler continued, “While we’re seeing
positive long-term momentum in the market, our customers continue
to report struggles with short-term dynamics causing project
delays, which has caused us to reduce our revenue outlook for the
year. Notably, the recent AD/CVD petitions and the interpretation
of the new IRA domestic content elective safe harbor table are new
factors that have created some uncertainty in the U.S. market and
changed timelines for some customers’ projects. Internationally,
we’ve also witnessed a rapid devaluation of the Brazilian real
which has caused developers to delay projects in Brazil as they
work through renegotiating power purchase agreements. Within this
challenging environment, we continue to focus on setting Array up
for success to support growth in 2025 and beyond, and remain
confident in our operational execution, continued innovation
through new product launches like SkyLink, and enhanced customer
and industry engagement.”
Executed Contracts and Awarded
Orders
Total executed contracts and awarded orders at
June 30, 2024 were $2.0 billion. New bookings for the quarter were
$429 million, but the total orderbook was also impacted by
adjustments related to items such as commodity price updates,
project scope changes, and F/X impacts.
Full Year 2024
Guidance
For the year ending December 31, 2024, the
Company expects:
- Revenue to be in the range of $900
million to $1,000 million
- Adjusted EBITDA(2) to be in the
range of $185 million to $210 million
- Adjusted net income per share(2) to
be in the range of $0.64 to $0.74
We now expect volume to be down, due to the
changes in expected customer project timing, with declining ASP
when compared to 2023. For the third quarter specifically, we
expect revenue between $220 to $235 million. Finally, we expect
adjusted gross margin to increase to low-to-mid-thirties percent of
sales for the year from our previous guidance of low-thirties
percent of sales, driven by the realization of torque tube and
structural fastener 45X benefits.
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)-869-3847 (domestic) or (201)-689-8261
(international). A telephonic replay will be available
approximately three hours after the call by dialing (877)-660-6853,
or for international callers, (201)-612-7415. The passcode for the
live call and the replay is 13747649. The replay will be available
until 11:59 p.m. (ET) on August 22, 2024.
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, project
timing, sales volume, 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 growth or rate of growth in demand for solar energy
projects; competitive pressures within our industry; a loss of one
or more of our significant customers, their inability to perform
under their contracts, or their default in payment; a drop in the
price of electricity derived from the utility grid or from
alternative energy sources; a failure to maintain effective
internal controls over financial reporting; 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; electric utility industry policies and regulations,
and any subsequent changes, may present technical, regulatory and
economic barriers to the purchase and use of solar energy systems,
which may significantly reduce demand for our products or harm our
ability to compete; the interruption of the flow of materials from
international vendors, which could disrupt our supply chain,
including as a result of the imposition of additional duties,
tariffs and other charges or restrictions on imports and exports;
geopolitical, macroeconomic and other market conditions unrelated
to our operating performance including the military conflict in
Ukraine and Russia, the Israel-Hamas war, attacks on shipping in
the Red Sea and rising inflation and interest rates; changes in the
global trade environment, including the imposition of import
tariffs or other import restrictions; our ability to convert our
orders in backlog into revenue; fluctuations in our
results of operations across fiscal periods, which could make our
future performance difficult to predict and could cause our results
of operations for a particular period to fall below expectations;
the reduction, elimination or expiration, or our failure to
optimize the benefits of government incentives for, or regulations
mandating the use of, renewable energy and solar energy,
particularly in relation to our competitors; failure
to, or incurrence of significant costs in order to,
obtain, maintain, protect, defend or enforce, our intellectual
property and other proprietary right; significant changes in the
cost of raw materials; defects or performance problems in our
products, which could result in loss of customers, reputational
damage and decreased revenue; delays, disruptions or quality
control problems in our product development operations; our ability
to obtain key personnel or failure to attract additional qualified
personnel; additional business, financial, regulatory and
competitive risks due to our continued planned expansion into new
markets; cybersecurity or other data incidents, including
unauthorized disclosure of personal or sensitive data or theft of
confidential information; failure to implement and maintain
effective internal controls over financial reporting; risks related
to actual or threatened public health epidemics, pandemics,
outbreaks or crises, such as the COVID-19 pandemic, which could
have a material and adverse effect on our business, results of
operations and financial condition; changes to tax laws and
regulations that are applied adversely to us or our customers,
which could materially adversely affect our business, financial
condition, results of operations and prospects, including our
ability to optimize those changes brought about by the passage of
the Inflation Reduction Act; 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 gross profit, Adjusted EBITDA,
Adjusted net income, Adjusted net income per share, and Free cash
flow. We define Adjusted gross profit as gross profit plus (i)
developed technology amortization and (ii) other costs if
applicable. We define Adjusted EBITDA as net income (loss) plus (i)
other (income) expense, (ii) foreign currency transaction (gain)
loss, (iii) preferred dividends and accretion, (iv) interest
expense, (v) income tax (benefit) expense, (vi) depreciation
expense, (vii) amortization of intangibles, (viii) amortization of
developed technology, (ix) equity-based compensation, (x) change in
fair value of contingent consideration, (xi) certain legal
expenses, (xii) certain acquisition related costs if applicable,
and (xiii) other costs. We define Adjusted net income as net income
plus (i) amortization of intangibles, (ii) amortization of
developed technology, (iii) amortization of debt discount and
issuance costs (iv) preferred accretion, (v) equity-based
compensation, (vi) change in fair value of derivative assets, (vii)
change in fair value of contingent consideration, (viii) certain
legal expenses, (ix) certain acquisition related costs if
applicable, (x) other costs, and (xi) income tax (benefit) expense
of adjustments. We define Free cash flow as Cash provided by (used
in) operating activities less purchase of property, plant and
equipment. 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 gross profit,
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
gross profit, Adjusted EBITDA and Adjusted net income differently
than we do, which limits their usefulness as comparative measures.
Because of these limitations, Adjusted gross profit, 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 gross
profit, Adjusted EBITDA and Adjusted net income on a supplemental
basis. You should review the reconciliation of gross profit to
Adjusted gross profit and net income (loss) to Adjusted EBITDA and
Adjusted net income below and not rely on any single financial
measure to evaluate our business.
(1) A reconciliation of the most comparable GAAP measure to its
Non-GAAP measure is included below.
(2) A reconciliation of projected Adjusted gross
margin, 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 2024 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.
Array Technologies, Inc. and Subsidiaries |
Consolidated Balance Sheets (unaudited) |
(in thousands, except per share and share amounts) |
|
|
|
|
|
June 30, 2024 |
|
December 31, 2023 |
ASSETS |
Current assets |
|
|
|
Cash and cash equivalents |
$ |
282,320 |
|
|
$ |
249,080 |
|
Accounts receivable, net of allowance of $4,911 and $3,824,
respectively |
|
309,719 |
|
|
|
332,152 |
|
Inventories |
|
165,639 |
|
|
|
161,964 |
|
Prepaid expenses and other |
|
91,259 |
|
|
|
89,085 |
|
Total current assets |
|
848,937 |
|
|
|
832,281 |
|
|
|
|
|
Property, plant and equipment,
net |
|
26,677 |
|
|
|
27,893 |
|
Goodwill |
|
402,501 |
|
|
|
435,591 |
|
Other intangible assets,
net |
|
307,591 |
|
|
|
354,389 |
|
Deferred income tax
assets |
|
13,369 |
|
|
|
15,870 |
|
Other assets |
|
52,447 |
|
|
|
40,717 |
|
Total assets |
$ |
1,651,522 |
|
|
$ |
1,706,741 |
|
|
|
|
|
LIABILITIES, REDEEMABLE PERPETUAL PREFERRED STOCK AND
STOCKHOLDERS' EQUITY |
Current liabilities |
|
|
|
Accounts payable |
$ |
112,489 |
|
|
$ |
119,498 |
|
Accrued expenses and other |
|
57,265 |
|
|
|
70,211 |
|
Accrued warranty reserve |
|
1,639 |
|
|
|
2,790 |
|
Income tax payable |
|
3,368 |
|
|
|
5,754 |
|
Deferred revenue |
|
90,982 |
|
|
|
66,488 |
|
Current portion of contingent consideration |
|
1,918 |
|
|
|
1,427 |
|
Current portion of debt |
|
29,221 |
|
|
|
21,472 |
|
Other current liabilities |
|
40,697 |
|
|
|
48,051 |
|
Total current liabilities |
|
337,579 |
|
|
|
335,691 |
|
|
|
|
|
Deferred income tax
liabilities |
|
54,512 |
|
|
|
66,858 |
|
Contingent consideration, net
of current portion |
|
6,786 |
|
|
|
8,936 |
|
Other long-term
liabilities |
|
18,613 |
|
|
|
20,428 |
|
Long-term warranty |
|
4,035 |
|
|
|
3,372 |
|
Long-term debt, net of current
portion |
|
651,522 |
|
|
|
660,948 |
|
Total liabilities |
|
1,073,047 |
|
|
|
1,096,233 |
|
|
|
|
|
Commitments and contingencies
(Note 11) |
|
|
|
|
|
|
|
Series A Redeemable Perpetual
Preferred Stock of $0.001 par value; 500,000 authorized; 446,541
and 432,759 shares issued as of June 30, 2024 and December 31,
2023, respectively; liquidation preference of $493.1 million at
both dates |
|
378,512 |
|
|
|
351,260 |
|
|
|
|
|
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; 151,875,097 and
151,242,120 shares issued at respective dates |
|
151 |
|
|
|
151 |
|
Additional paid-in capital |
|
320,379 |
|
|
|
344,517 |
|
Accumulated deficit |
|
(102,367 |
) |
|
|
(130,230 |
) |
Accumulated other comprehensive income |
|
(18,200 |
) |
|
|
44,810 |
|
Total stockholders’ equity |
|
199,963 |
|
|
|
259,248 |
|
Total liabilities, redeemable perpetual preferred stock and
stockholders’ equity |
$ |
1,651,522 |
|
|
$ |
1,706,741 |
|
|
|
|
|
|
|
|
|
Array Technologies, Inc. and Subsidiaries |
Consolidated Statements of Operations
(unaudited) |
(in thousands, except per share amounts) |
|
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
|
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
Revenue |
$ |
255,766 |
|
|
$ |
507,725 |
|
|
$ |
409,169 |
|
|
$ |
884,498 |
|
Cost of revenue |
|
|
|
|
|
|
|
Cost of product and service revenue |
|
166,173 |
|
|
|
357,683 |
|
|
|
260,847 |
|
|
|
633,277 |
|
Amortization of developed technology |
|
3,640 |
|
|
|
3,640 |
|
|
|
7,279 |
|
|
|
7,279 |
|
Total cost of revenue |
|
169,813 |
|
|
|
361,323 |
|
|
|
268,126 |
|
|
|
640,556 |
|
Gross profit |
|
85,953 |
|
|
|
146,402 |
|
|
|
141,043 |
|
|
|
243,942 |
|
|
|
|
|
|
|
|
|
Operating expenses |
|
|
|
|
|
|
|
General and administrative |
|
36,971 |
|
|
|
40,250 |
|
|
|
74,755 |
|
|
|
78,392 |
|
Change in fair value of contingent consideration |
|
503 |
|
|
|
705 |
|
|
|
(232 |
) |
|
|
2,043 |
|
Depreciation and amortization |
|
8,877 |
|
|
|
9,206 |
|
|
|
18,504 |
|
|
|
19,808 |
|
Total operating expenses |
|
46,351 |
|
|
|
50,161 |
|
|
|
93,027 |
|
|
|
100,243 |
|
|
|
|
|
|
|
|
|
Income from operations |
|
39,602 |
|
|
|
96,241 |
|
|
|
48,016 |
|
|
|
143,699 |
|
|
|
|
|
|
|
|
|
Other (loss) income, net |
|
(1,793 |
) |
|
|
125 |
|
|
|
(980 |
) |
|
|
319 |
|
Interest income |
|
4,782 |
|
|
|
1,468 |
|
|
|
8,462 |
|
|
|
2,699 |
|
Foreign currency (loss) gain, net |
|
(468 |
) |
|
|
260 |
|
|
|
(967 |
) |
|
|
66 |
|
Interest expense |
|
(8,614 |
) |
|
|
(11,577 |
) |
|
|
(17,554 |
) |
|
|
(22,308 |
) |
Total other expense, net |
|
(6,093 |
) |
|
|
(9,724 |
) |
|
|
(11,039 |
) |
|
|
(19,224 |
) |
|
|
|
|
|
|
|
|
Income before income tax
expense |
|
33,509 |
|
|
|
86,517 |
|
|
|
36,977 |
|
|
|
124,475 |
|
Income tax expense |
|
7,810 |
|
|
|
21,352 |
|
|
|
9,114 |
|
|
|
29,675 |
|
Net income |
|
25,699 |
|
|
|
65,165 |
|
|
|
27,863 |
|
|
|
94,800 |
|
Preferred dividends and
accretion |
|
13,749 |
|
|
|
12,784 |
|
|
|
27,251 |
|
|
|
25,268 |
|
Net income to common
shareholders |
$ |
11,950 |
|
|
$ |
52,381 |
|
|
$ |
612 |
|
|
$ |
69,532 |
|
|
|
|
|
|
|
|
|
Income per common share |
|
|
|
|
|
|
|
Basic |
$ |
0.08 |
|
|
$ |
0.34 |
|
|
$ |
— |
|
|
$ |
0.47 |
|
Diluted |
$ |
0.08 |
|
|
$ |
0.34 |
|
|
$ |
— |
|
|
$ |
0.46 |
|
Weighted average number of
common shares outstanding |
|
|
|
|
|
|
|
Basic |
|
151,797 |
|
|
|
150,919 |
|
|
|
151,574 |
|
|
|
150,763 |
|
Diluted |
|
152,207 |
|
|
|
152,129 |
|
|
|
152,170 |
|
|
|
151,970 |
|
|
|
|
|
|
|
|
|
Array Technologies, Inc. and Subsidiaries |
Consolidated Statements of Cash Flows
(unaudited) |
(in thousands) |
|
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
|
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
Operating
activities |
|
|
|
|
|
|
|
Net income |
$ |
25,699 |
|
|
$ |
65,165 |
|
|
$ |
27,863 |
|
|
$ |
94,800 |
|
Adjustments to net
income: |
|
|
|
|
|
|
|
Provision for bad debts |
|
800 |
|
|
|
(374 |
) |
|
|
1,696 |
|
|
|
(141 |
) |
Deferred tax benefit |
|
(3,488 |
) |
|
|
(4,798 |
) |
|
|
(3,501 |
) |
|
|
(1,796 |
) |
Depreciation and amortization |
|
9,331 |
|
|
|
9,519 |
|
|
|
19,456 |
|
|
|
20,413 |
|
Amortization of developed technology |
|
3,640 |
|
|
|
3,640 |
|
|
|
7,279 |
|
|
|
7,279 |
|
Amortization of debt discount and issuance costs |
|
1,548 |
|
|
|
2,172 |
|
|
|
3,101 |
|
|
|
4,998 |
|
Equity-based compensation |
|
910 |
|
|
|
4,945 |
|
|
|
4,836 |
|
|
|
8,311 |
|
Change in fair value of contingent consideration |
|
503 |
|
|
|
705 |
|
|
|
(232 |
) |
|
|
2,043 |
|
Warranty provision |
|
1,077 |
|
|
|
43 |
|
|
|
(61 |
) |
|
|
479 |
|
Write-down of inventories |
|
627 |
|
|
|
1,611 |
|
|
|
1,227 |
|
|
|
3,458 |
|
Changes in operating assets and liabilities, net of business
acquisition: |
|
— |
|
|
|
|
|
|
|
Accounts receivable |
|
(97,369 |
) |
|
|
(87,277 |
) |
|
|
(1,379 |
) |
|
|
(81,039 |
) |
Inventories |
|
4,335 |
|
|
|
46,156 |
|
|
|
(7,207 |
) |
|
|
22,844 |
|
Income tax receivables |
|
(1,315 |
) |
|
|
2,851 |
|
|
|
(1,313 |
) |
|
|
3,220 |
|
Prepaid expenses and other |
|
(1,234 |
) |
|
|
3,655 |
|
|
|
(3,453 |
) |
|
|
(3,292 |
) |
Accounts payable |
|
20,959 |
|
|
|
387 |
|
|
|
(2,932 |
) |
|
|
30,542 |
|
Accrued expenses and other |
|
35,397 |
|
|
|
3,197 |
|
|
|
(15,172 |
) |
|
|
7,097 |
|
Income tax payable |
|
(3,619 |
) |
|
|
4,886 |
|
|
|
(2,684 |
) |
|
|
9,838 |
|
Lease liabilities |
|
(663 |
) |
|
|
590 |
|
|
|
(3,135 |
) |
|
|
1,414 |
|
Deferred revenue |
|
6,820 |
|
|
|
(36,533 |
) |
|
|
27,070 |
|
|
|
(64,112 |
) |
Net cash provided by operating activities |
|
3,958 |
|
|
|
20,540 |
|
|
|
51,459 |
|
|
|
66,356 |
|
Investing
activities |
|
|
|
|
|
|
|
Purchase of property, plant and equipment |
|
(2,131 |
) |
|
|
(5,541 |
) |
|
|
(4,527 |
) |
|
|
(9,424 |
) |
Retirement/disposal of property, plant and equipment |
|
29 |
|
|
|
— |
|
|
|
39 |
|
|
|
— |
|
Net cash used in investing activities |
|
(2,102 |
) |
|
|
(5,541 |
) |
|
|
(4,488 |
) |
|
|
(9,424 |
) |
Financing
activities |
|
|
|
|
|
|
|
Series A equity issuance costs |
|
— |
|
|
|
(758 |
) |
|
|
— |
|
|
|
(1,508 |
) |
Tax withholding related to vesting of equity-based
compensation |
|
— |
|
|
|
— |
|
|
|
(580 |
) |
|
|
— |
|
Proceeds from issuance of other debt |
|
10,401 |
|
|
|
17,332 |
|
|
|
12,684 |
|
|
|
23,801 |
|
Principal payments on other debt |
|
(8,890 |
) |
|
|
(21,051 |
) |
|
|
(12,671 |
) |
|
|
(38,257 |
) |
Principal payments on term loan facility |
|
(1,080 |
) |
|
|
(11,075 |
) |
|
|
(2,150 |
) |
|
|
(22,150 |
) |
Contingent consideration payments |
|
— |
|
|
|
— |
|
|
|
(1,427 |
) |
|
|
(1,200 |
) |
Net cash (provided by) used in financing activities |
|
431 |
|
|
|
(15,552 |
) |
|
|
(4,144 |
) |
|
|
(39,314 |
) |
Effect of exchange rate
changes on cash and cash equivalent balances |
|
(7,586 |
) |
|
|
8,763 |
|
|
|
(9,587 |
) |
|
|
4,447 |
|
Net change in cash and cash
equivalents |
|
(5,299 |
) |
|
|
8,210 |
|
|
|
33,240 |
|
|
|
22,065 |
|
Cash and cash equivalents,
beginning of |
|
287,620 |
|
|
|
147,756 |
|
|
|
249,080 |
|
|
|
133,901 |
|
Cash and cash equivalents, end
of period |
$ |
282,321 |
|
|
$ |
155,966 |
|
|
$ |
282,320 |
|
|
$ |
155,966 |
|
|
|
|
|
|
|
|
|
Supplemental cash flow
information |
|
|
|
|
|
|
|
Cash paid for interest |
$ |
6,519 |
|
|
$ |
7,900 |
|
|
$ |
17,819 |
|
|
$ |
15,880 |
|
Cash paid for income taxes (net of refunds) |
$ |
16,599 |
|
|
$ |
15,962 |
|
|
$ |
17,001 |
|
|
$ |
18,484 |
|
|
|
|
|
|
|
|
|
Non-cash investing and
financing |
|
|
|
|
|
|
|
Dividends accrued on Series A |
$ |
6,945 |
|
|
$ |
6,521 |
|
|
$ |
13,782 |
|
|
$ |
12,871 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Array Technologies,
Inc.Adjusted Gross Profit, Adjusted EBITDA,
Adjusted Net Income, and Free Cash Flow Reconciliation
(unaudited)(in thousands, except per share amounts)
The following table reconciles Gross profit to
Adjusted gross profit:
|
Three Months EndedJune 30, |
|
Six Months EndedJune 30, |
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
Revenue |
255,766 |
|
|
507,725 |
|
|
409,169 |
|
|
884,498 |
|
Cost of revenue |
169,813 |
|
|
361,323 |
|
|
268,126 |
|
|
640,556 |
|
Gross profit |
85,953 |
|
|
146,402 |
|
|
141,043 |
|
|
243,942 |
|
Amortization of developed
technology |
3,640 |
|
|
3,640 |
|
|
7,279 |
|
|
7,279 |
|
Adjusted gross
profit |
89,593 |
|
|
150,042 |
|
|
148,322 |
|
|
251,221 |
|
Adjusted gross margin |
35.0 |
% |
|
29.6 |
% |
|
36.2 |
% |
|
28.4 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
The following table reconciles Net income to
Adjusted EBITDA:
|
Three Months EndedJune 30, |
|
Six Months EndedJune 30, |
|
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
Net income |
$ |
25,699 |
|
|
$ |
65,165 |
|
|
$ |
27,863 |
|
|
$ |
94,800 |
|
Preferred dividends and
accretion |
|
13,749 |
|
|
|
12,784 |
|
|
|
27,251 |
|
|
|
25,268 |
|
Net income to common
shareholders |
$ |
11,950 |
|
|
$ |
52,381 |
|
|
$ |
612 |
|
|
$ |
69,532 |
|
Other expense, net |
|
(2,989 |
) |
|
|
(1,593 |
) |
|
|
(7,482 |
) |
|
|
(3,018 |
) |
Foreign currency loss (gain),
net |
|
468 |
|
|
|
(260 |
) |
|
|
967 |
|
|
|
(66 |
) |
Preferred dividends and
accretion |
|
13,749 |
|
|
|
12,784 |
|
|
|
27,251 |
|
|
|
25,268 |
|
Interest expense |
|
8,614 |
|
|
|
11,577 |
|
|
|
17,554 |
|
|
|
22,308 |
|
Income tax expense |
|
7,810 |
|
|
|
21,352 |
|
|
|
9,114 |
|
|
|
29,675 |
|
Depreciation expense |
|
1,155 |
|
|
|
576 |
|
|
|
2,038 |
|
|
|
1,188 |
|
Amortization of
intangibles |
|
8,141 |
|
|
|
8,942 |
|
|
|
17,395 |
|
|
|
19,224 |
|
Amortization of developed
technology |
|
3,640 |
|
|
|
3,640 |
|
|
|
7,279 |
|
|
|
7,279 |
|
Equity-based compensation |
|
808 |
|
|
|
5,240 |
|
|
|
4,828 |
|
|
|
8,580 |
|
Change in fair value of
contingent consideration |
|
503 |
|
|
|
705 |
|
|
|
(232 |
) |
|
|
2,043 |
|
Certain legal expenses
(a) |
|
1,533 |
|
|
|
248 |
|
|
|
2,263 |
|
|
|
552 |
|
Other costs (b) |
|
— |
|
|
|
— |
|
|
|
42 |
|
|
|
— |
|
Adjusted
EBITDA |
$ |
55,382 |
|
|
$ |
115,592 |
|
|
$ |
81,629 |
|
|
$ |
182,565 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) Represents
certain legal fees and other related costs associated with (i)
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 subsequently appealed. The appeal has
been fully briefed, argued, and the Company is awaiting a decision,
and (ii) 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) For the six
months ended June 30, 2024, other costs represent costs related to
Capped-Call accounting treatment evaluation.
The following table reconciles Net income to Adjusted net
income:
|
Three Months EndedJune 30, |
|
Six Months EndedJune 30, |
|
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
Net income |
$ |
25,699 |
|
|
$ |
65,165 |
|
|
$ |
27,863 |
|
|
$ |
94,800 |
|
Preferred dividends and
accretion |
|
13,749 |
|
|
|
12,784 |
|
|
|
27,251 |
|
|
|
25,268 |
|
Net income to common
shareholders |
$ |
11,950 |
|
|
$ |
52,381 |
|
|
$ |
612 |
|
|
$ |
69,532 |
|
Amortization of intangibles |
|
8,141 |
|
|
|
8,942 |
|
|
|
17,395 |
|
|
|
19,224 |
|
Amortization of developed
technology |
|
3,640 |
|
|
|
3,640 |
|
|
|
7,279 |
|
|
|
7,279 |
|
Amortization of debt discount and
issuance costs |
|
1,549 |
|
|
|
2,172 |
|
|
|
3,101 |
|
|
|
4,998 |
|
Preferred accretion |
|
6,805 |
|
|
|
6,263 |
|
|
|
13,470 |
|
|
|
12,398 |
|
Equity based compensation |
|
808 |
|
|
|
5,240 |
|
|
|
4,828 |
|
|
|
8,580 |
|
Change in fair value of
contingent consideration |
|
503 |
|
|
|
705 |
|
|
|
(232 |
) |
|
|
2,043 |
|
Certain legal expenses(a) |
|
1,533 |
|
|
|
248 |
|
|
|
2,263 |
|
|
|
552 |
|
Other costs(b) |
|
— |
|
|
|
— |
|
|
|
42 |
|
|
|
— |
|
Income tax expense of
adjustments(c) |
|
(4,285 |
) |
|
|
(5,301 |
) |
|
|
(9,137 |
) |
|
|
(10,752 |
) |
Adjusted net
income |
$ |
30,644 |
|
|
$ |
74,290 |
|
|
$ |
39,621 |
|
|
$ |
113,854 |
|
|
|
|
|
|
|
|
|
Income per common share |
|
|
|
|
|
|
|
Basic |
$ |
0.08 |
|
|
$ |
0.34 |
|
|
$ |
— |
|
|
$ |
0.47 |
|
Diluted |
$ |
0.08 |
|
|
$ |
0.34 |
|
|
$ |
— |
|
|
$ |
0.46 |
|
Weighted average number of
common shares outstanding |
|
|
|
|
|
|
|
Basic |
|
151,797 |
|
|
|
150,919 |
|
|
|
151,574 |
|
|
|
150,763 |
|
Diluted |
|
152,207 |
|
|
|
152,129 |
|
|
|
152,170 |
|
|
|
151,970 |
|
Adjusted net income per common
share |
|
|
|
|
|
|
|
Basic |
$ |
0.20 |
|
|
$ |
0.49 |
|
|
$ |
0.26 |
|
|
$ |
0.76 |
|
Diluted |
$ |
0.20 |
|
|
$ |
0.49 |
|
|
$ |
0.26 |
|
|
$ |
0.75 |
|
Weighted average number of common
shares outstanding |
|
|
|
|
|
|
|
Basic |
|
151,797 |
|
|
|
150,919 |
|
|
|
151,574 |
|
|
|
150,763 |
|
Diluted |
|
152,207 |
|
|
|
152,129 |
|
|
|
152,170 |
|
|
|
151,970 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) Represents
certain legal fees and other related costs associated with (i)
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 subsequently appealed. The appeal has
been fully briefed, argued, and the Company is awaiting a decision,
and (ii) 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) For the six
months ended June 30, 2024, other costs represent costs related to
Capped-Call accounting treatment evaluation.
(c) Represents the
estimated tax impact of all Adjusted Net Income add-backs,
excluding those which represent permanent differences between book
versus tax.
The following table reconciles new cash provided
by operating activities to Free cash flow:
|
Three Months EndedJune 30, |
|
Six Months EndedJune 30, |
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
Net cash provided by operating
activities |
3,958 |
|
|
20,540 |
|
|
51,459 |
|
|
66,356 |
|
Purchase of property, plant
and equipment |
(2,131 |
) |
|
(5,541 |
) |
|
(4,527 |
) |
|
(9,424 |
) |
Free cash
flow |
1,827 |
|
|
14,999 |
|
|
46,932 |
|
|
56,932 |
|
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