Array Technologies, Inc. Reports Financial Results for the Second Quarter 2024 – Delivers strong results on continued gross margin strength
Array Technologies (NASDAQ: ARRY) reported strong Q2 2024 financial results, with revenue of $255.8 million and adjusted gross margin of 35.0%. The company's orderbook remains healthy at over $2 billion. However, due to project delays caused by market uncertainties, Array has reduced its full-year 2024 revenue outlook to $900 million - $1 billion. Adjusted EBITDA is expected to be $185 million - $210 million, with adjusted net income per share of $0.64 - $0.74. The company anticipates volume to be down compared to 2023, with declining ASP. Q3 2024 revenue is projected between $220 - $235 million. Despite short-term challenges, Array remains confident in its operational execution and long-term growth prospects.
Array Technologies (NASDAQ: ARRY) ha riportato risultati finanziari solidi per il secondo trimestre del 2024, con ricavi di 255,8 milioni di dollari e un margine lordo rettificato del 35,0%. Il portafoglio ordini dell'azienda rimane sano, superando i 2 miliardi di dollari. Tuttavia, a causa dei ritardi nei progetti causati da incertezze di mercato, Array ha rivisto al ribasso le previsioni di fatturato per l'intero anno 2024 a 900 milioni - 1 miliardo di dollari. L'EBITDA rettificato è previsto tra 185 milioni e 210 milioni di dollari, con un utile netto rettificato per azione di 0,64 - 0,74 dollari. L'azienda prevede un volume in calo rispetto al 2023, con un prezzo medio di vendita in diminuzione. I ricavi del terzo trimestre del 2024 sono stimati tra 220 e 235 milioni di dollari. Nonostante le sfide a breve termine, Array rimane fiduciosa nelle proprie capacità operative e nelle prospettive di crescita a lungo termine.
Array Technologies (NASDAQ: ARRY) reportó resultados financieros sólidos para el segundo trimestre de 2024, con ingresos de 255.8 millones de dólares y un margen bruto ajustado del 35.0%. El libro de pedidos de la empresa sigue siendo saludable, superando los 2 mil millones de dólares. Sin embargo, debido a retrasos en los proyectos causados por incertidumbres en el mercado, Array ha reducido su perspectiva de ingresos para todo el año 2024 a entre 900 millones y 1 mil millones de dólares. Se espera que el EBITDA ajustado sea de entre 185 millones y 210 millones de dólares, con un ingreso neto ajustado por acción de 0.64 - 0.74 dólares. La empresa anticipa que el volumen disminuirá en comparación con 2023, con una reducción en el precio promedio de venta. Se proyecta que los ingresos del tercer trimestre de 2024 se sitúen entre 220 y 235 millones de dólares. A pesar de los desafíos a corto plazo, Array se muestra confiada en su ejecución operativa y en sus perspectivas de crecimiento a largo plazo.
Array Technologies (NASDAQ: ARRY)는 2024년 2분기 재무 결과를 발표했으며, 수익은 2억 5,580만 달러, 조정된 총 마진은 35.0%입니다. 회사의 주문 잔고는 20억 달러를 초과하여 건강한 상태를 유지하고 있습니다. 그러나 시장 불확실성으로 인한 프로젝트 지연으로 인해 Array는 2024년 전체 매출 전망을 9억 달러에서 10억 달러로 하향 조정했습니다. 조정된 EBITDA는 1억 8,500만 달러에서 2억 1,000만 달러로 예상되며, 조정된 주당 순이익은 0.64 - 0.74 달러입니다. 회사는 2023년에 비해 물량이 감소할 것으로 예상하고 있으며, 평균 판매 가격이 감소할 것으로 보입니다. 2024년 3분기 매출은 2억 2천만 달러에서 2억 3,500만 달러 사이로 예상됩니다. 단기적인 어려움에도 불구하고 Array는 운영 실행력과 장기 성장 가능성에 대해 확신하고 있습니다.
Array Technologies (NASDAQ: ARRY) a annoncé de solides résultats financiers pour le deuxième trimestre 2024, avec des revenus de 255,8 millions de dollars et une marge brute ajustée de 35,0%. Le carnet de commandes de l'entreprise reste sain avec plus de 2 milliards de dollars. Cependant, en raison des retards de projets causés par des incertitudes sur le marché, Array a réduit ses prévisions de revenus pour l'année entière 2024 à 900 millions - 1 milliard de dollars. L'EBITDA ajusté est prévu entre 185 millions et 210 millions de dollars, avec un bénéfice net ajusté par action de 0,64 - 0,74 dollar. L'entreprise prévoit une baisse du volume par rapport à 2023, avec un prix de vente moyen en déclin. Les revenus du troisième trimestre 2024 sont projetés entre 220 et 235 millions de dollars. Malgré les défis à court terme, Array reste confiante dans son exécution opérationnelle et ses perspectives de croissance à long terme.
Array Technologies (NASDAQ: ARRY) hat starke Finanzdaten für das zweite Quartal 2024 berichtet, mit Einnahmen von 255,8 Millionen Dollar und einer angepassten Bruttomarge von 35,0%. Das Auftragsbuch des Unternehmens bleibt mit über 2 Milliarden Dollar gesund. Aufgrund von Projektverzögerungen, die durch Markunsicherheiten verursacht wurden, hat Array jedoch die Umsatzprognose für das Gesamtjahr 2024 auf 900 Millionen bis 1 Milliarde Dollar gesenkt. Das angepasste EBITDA wird zwischen 185 Millionen und 210 Millionen Dollar erwartet, mit einem angepassten Nettogewinn pro Aktie von 0,64 bis 0,74 Dollar. Das Unternehmen erwartet, dass das Volumen im Vergleich zu 2023 sinken wird, mit rückläufigem durchschnittlichem Verkaufspreis. Die Umsatzprognose für das dritte Quartal 2024 liegt zwischen 220 und 235 Millionen Dollar. Trotz kurzfristiger Herausforderungen bleibt Array zuversichtlich in Bezug auf die operative Ausführung und die langfristigen Wachstumschancen.
- Strong Q2 2024 performance with revenue of $255.8 million
- Adjusted gross margin of 35.0%, benefiting from 45X credits
- Healthy orderbook of over $2 billion
- New bookings of $429 million in Q2
- Increased full-year adjusted gross margin guidance to low-to-mid-thirties percent
- Reduced full-year 2024 revenue outlook due to project delays
- Expected volume decline compared to 2023
- Anticipated declining Average Selling Price (ASP)
- Market uncertainties affecting customer project timelines
- Rapid devaluation of Brazilian real causing project delays in Brazil
Insights
Array Technologies' Q2 2024 results show mixed signals. While revenue of
- AD/CVD petitions and IRA domestic content interpretations causing U.S. market uncertainty
- Brazilian real devaluation impacting international projects
- Reduced 2024 revenue guidance to
$900 million - $1 billion
The healthy orderbook of over
The solar industry is facing complex market dynamics. Array's results reflect both industry-wide challenges and company-specific strengths:
- Short-term project delays vs. long-term utility-scale solar demand
- Domestic content requirements creating temporary uncertainty
- International market volatility (e.g., Brazil) affecting global expansion
Array's focus on innovation (e.g., SkyLink product) and customer engagement could be key differentiators. The
Array's Q2 results highlight the critical role of innovation in navigating market challenges. The mention of SkyLink, a new product launch, suggests Array is actively developing solutions to maintain its competitive edge. This is important given the:
- Evolving regulatory landscape (IRA, AD/CVD petitions)
- Need for cost-effective solar solutions amidst project delays
- Potential for technological differentiation in a price-sensitive market
The company's ability to leverage 45X benefits for torque tubes and structural fasteners demonstrates adaptability to policy changes. As Array explores additional parts eligibility for these credits, it could further enhance margins. Investors should monitor how Array's technological innovations translate into market share and profitability, especially as the industry grapples with short-term uncertainties.
Second Quarter 2024 Highlights
- Revenue of
$255.8 million - Gross Margin of
33.6% - Adjusted gross margin of
35.0% (1) - Net income to common shareholders of
$12.0 million - Adjusted EBITDA(1) of
$55.4 million - Basic and diluted net income per share of
$0.08 - Adjusted diluted net income per share(1) of
$0.20
ALBUQUERQUE, N.M., Aug. 08, 2024 (GLOBE NEWSWIRE) -- 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
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
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 t o$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
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
505-437-0010
investors@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 Information
This 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 | 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 | 378,512 | 351,260 | |||||
| Stockholders’ equity | |||||||
| Preferred stock of | — | — | |||||
| Common stock of | 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 Ended June 30, | Six Months Ended June 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 Ended June 30, | Six Months Ended June 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 Ended June 30, | Six Months Ended June 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 Ended June 30, | Six Months Ended June 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 | |||||||
FAQ
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