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Array Technologies, Inc. Reports Financial Results for the Fourth Quarter and Full Year 2023; Full year 2023 net income of $86 million; Record full year Adjusted EBITDA of $288 million

Array Technologies, Inc.
Array Technologies, Inc.

Fourth Quarter 2023 Financial Highlights

  • Revenue of $341.6 million

  • Net income to common stockholders of $6.0 million

  • Adjusted EBITDA(1) of $48.2 million

  • Basic and diluted net income per share of $0.04

  • Adjusted diluted net income per share(1) of $0.21

  • $49.9 million of 45X benefit earned for 2023 torque tube deliveries; $9.3 million recognized during 2023 in the statement of operations

Full Year 2023 Financial Highlights

  • Revenue(2) of $1,576.6 million

  • Net income to common stockholders of $85.5 million

  • Adjusted EBITDA(1) of $288.1 million

  • Basic and diluted net income per share of $0.57 and $0.56

  • Adjusted diluted net income per share(1) of $1.13

  • Cash Flow from Operating Activities of $232.0 million

  • Free Cash Flow(3) of $215.0 million

  • Executed contracts and awarded orders at December 31, 2023 totaling $1.8 billion

ADVERTISEMENT

ALBUQUERQUE, N.M., Feb. 27, 2024 (GLOBE NEWSWIRE) -- Array Technologies (NASDAQ: ARRY) (“Array” or “the Company”), a leading provider of tracker solutions, software and services for utility-scale solar energy projects, today announced financial results for its fourth quarter and full year ended December 31, 2023.

“We finished 2023 on a strong note with revenue of $1,577 million, which was ahead of our expectations. Throughout the year we implemented many structural enhancements to our business which improved our margin profile and enabled us to more than double our Adjusted EBITDA to $288 million (4) and generate $215 million of free cash flow. We continued to execute on our commitment to strengthen our balance sheet and paid down $87 million of outstanding debt in 2023 while ensuring ample liquidity as shown by our year end cash balance of $250 million and total liquidity of $424 million, inclusive of our undrawn revolving credit facility,” said Kevin Hostetler, Chief Executive Officer.

Mr. Hostetler concluded, “We enter 2024 with strong momentum and meaningful additions to our U.S. pipeline which has tripled since the second quarter of 2023. Our global orderbook has increased to $1.8 billion fueled by $600 million in Q4 2023 bookings. This demonstrates the attractive ROI’s and levelized cost of energy (LCOE) enabled through our products, software and services.”

Executed Contracts and Awarded Orders

Total executed contracts and awarded orders at December 31, 2023 were $1.8 billion with $1.5 billion from our Array Legacy Operations segment and $0.3 billion from STI Norland.

Full Year 2024 Guidance

For the year ending December 31, 2024, the Company expects:

  • Revenue to be in the range of $1,250 million to $1,400 million

  • Adjusted EBITDA(5) to be in the range of $285 million to $315 million

  • Adjusted net income per share(5) to be in the range of $1.00 to $1.15

We expect relatively flat volume on a full-year basis in 2024 with declining ASP’s driven by lower commodity input costs, our ability to lower price from our reduced cost structure, and the pass-through of a portion of the 45X benefit to our customers. Based on expected project timing, our current orderbook is skewed towards the back half of 2024 and into 2025. As a result, 2024 revenue will be more weighted to the second half of the year compared to historical performance.

We are projecting another year of growth in our adjusted gross margin to the low thirties percent of sales driven by continued strength in our structural gross margin as well as the realization of certain 45X benefits. This will enable us to have our third consecutive year of delivering both adjusted EBITDA and adjusted EBITDA margin growth.

Conference Call Information

Array management will host a conference call to discuss their fourth quarter and full year 2023 financial results on February 27, 2024 at 5:00 p.m. Eastern Time. The conference call can be accessed live over the phone by dialing (877)-869-3847 (domestic) or 1-201-689-8261 (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 13743620. The replay will be available until 11:59 p.m. (ET) on March 12, 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.

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, 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 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 a 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 and Adjusted Net Income per share. We define Adjusted Gross Profit as gross profit plus (i) developed technology amortization and (ii) other costs. 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 costs, and (xiii) other costs. We define Adjusted Net Income as net income (loss) 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, (x) other costs, and (xi) income tax (benefit) expense 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 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) Excluded in 2023 revenue is $23.2 million regarding Brazil value-added tax benefit, or “ICMS.” Included in 2022 revenue is $12.3 million regarding Brazil value-added tax benefit, or “ICMS.” In 2023 the Company concluded that the ICMS benefit should be accounted for as a reduction to cost of sales, rather than an addition to revenue, based on the nature of the benefit, consistent with how we account for government incentives for 45X manufacturing credits under the Inflation Reduction Act.

(3) Free Cash Flow calculated as cash from (used in) operating activities less purchase of property, plant and equipment.

(4) We earned ~$50 million of torque tube 45X benefit in 2023. $9.3 million of that benefit was recognized as a reduction to cost of sales in the statement of operations in the fourth quarter of 2023. $40.6 million was recorded as a deferred credit on the balance sheet as of year-end, which will be recognized to the statement of operations throughout 2024.

(5) 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 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)

 

 

December 31,

 

 

2023

 

 

 

2022

 

ASSETS

Current assets

 

 

 

Cash and cash equivalents

$

249,080

 

 

$

133,901

 

Accounts receivable, net

 

332,152

 

 

 

421,183

 

Inventories

 

161,964

 

 

 

233,159

 

Income tax receivables

 

 

 

 

3,532

 

Prepaid expenses and other

 

89,085

 

 

 

39,434

 

Total current assets

 

832,281

 

 

 

831,209

 

 

 

 

 

Property, plant and equipment, net

 

31,886

 

 

 

23,174

 

Goodwill

 

435,591

 

 

 

416,184

 

Other intangible assets, net

 

350,396

 

 

 

386,364

 

Deferred income tax assets

 

15,870

 

 

 

16,466

 

Other assets

 

40,717

 

 

 

32,655

 

Total assets

$

1,706,741

 

 

$

1,706,052

 

 

 

 

 

LIABILITIES, REDEEMABLE PERPETUAL PREFERRED STOCK AND STOCKHOLDERS' EQUITY

Current liabilities

 

 

 

Accounts payable

$

119,498

 

 

$

170,430

 

Accrued expenses and other

 

70,211

 

 

 

54,895

 

Accrued warranty reserve

 

2,790

 

 

 

3,690

 

Income tax payable

 

5,754

 

 

 

6,881

 

Deferred revenue

 

66,488

 

 

 

178,922

 

Current portion of contingent consideration

 

1,427

 

 

 

1,200

 

Current portion of debt

 

21,472

 

 

 

38,691

 

Other current liabilities

 

48,051

 

 

 

10,553

 

Total current liabilities

 

335,691

 

 

 

465,262

 

 

 

 

 

Deferred income tax liabilities

 

66,858

 

 

 

72,606

 

Contingent consideration, net of current portion

 

8,936

 

 

 

7,387

 

Other long-term liabilities

 

20,428

 

 

 

14,808

 

Long-term warranty

 

3,372

 

 

 

1,786

 

Long-term debt, net of current portion

 

660,948

 

 

 

720,352

 

Total liabilities

 

1,096,233

 

 

 

1,282,201

 

 

 

 

 

Commitments and contingencies

 

 

 

 

 

 

 

Series A Redeemable Perpetual Preferred Stock: $0.001 par value; 500,000 shares authorized; 432,759 and 406,389 issued, respectively; liquidation preference of $493.1 million and $493.1 million, respectively

 

351,260

 

 

 

299,570

 

 

 

 

 

Stockholders’ equity

 

 

 

Preferred stock $0.001 par value - 4,500,000 shares authorized; none issued at respective dates

 

 

 

 

 

Common stock $0.001 par value - 1,000,000,000 shares authorized; 151,242,120 and 150,513,104 shares issued at respective dates

 

151

 

 

 

150

 

Additional paid-in capital

 

344,517

 

 

 

383,176

 

Accumulated deficit

 

(130,230

)

 

 

(267,470

)

Accumulated other comprehensive income

 

44,810

 

 

 

8,425

 

Total stockholders’ equity

 

259,248

 

 

 

124,281

 

Total liabilities, redeemable perpetual preferred stock and stockholders’ equity

$

1,706,741

 

 

$

1,706,052

 



Array Technologies, Inc. and Subsidiaries
Consolidated Statements of Operations (unaudited)
(in thousands, except per share amounts)

 

 

Three Months Ended
December 31,

 

Year Ended
December 31,

 

2023(a)

 

 

2022

 

 

 

2023

 

 

 

2022

 

Revenue

$

341,615

 

 

$

402,071

 

 

$

1,576,551

 

 

$

1,637,546

 

Cost of revenue:

 

 

 

 

 

 

 

Cost of product and service revenue

 

253,746

 

 

 

321,551

 

 

 

1,146,442

 

 

 

1,410,270

 

Amortization of developed technology

 

3,640

 

 

 

3,640

 

 

 

14,558

 

 

 

14,558

 

Total cost of revenue

 

257,386

 

 

 

325,191

 

 

 

1,161,000

 

 

 

1,424,828

 

Gross profit

 

84,229

 

 

 

76,880

 

 

 

415,551

 

 

 

212,718

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

General and administrative

 

43,710

 

 

 

37,713

 

 

 

159,535

 

 

 

150,777

 

Change in fair value of contingent consideration

 

732

 

 

 

1,474

 

 

 

2,964

 

 

 

(4,507

)

Depreciation and amortization

 

9,567

 

 

 

21,344

 

 

 

38,928

 

 

 

84,581

 

Total operating expenses

 

54,009

 

 

 

60,531

 

 

 

201,427

 

 

 

230,851

 

 

 

 

 

 

 

 

 

Income (loss) from operations

 

30,220

 

 

 

16,349

 

 

 

214,124

 

 

 

(18,133

)

 

 

 

 

 

 

 

 

Other (expense) income:

 

 

 

 

 

 

 

Other (expense) income, net

 

(888

)

 

 

5,084

 

 

 

(1,015

)

 

 

2,789

 

Interest income

 

2,206

 

 

 

810

 

 

 

8,330

 

 

 

3,181

 

Legal settlement

 

 

 

 

 

 

 

 

 

 

42,750

 

Foreign currency transaction (loss) gain, net

 

(326

)

 

 

(813

)

 

 

(53

)

 

 

1,155

 

Interest expense

 

(8,857

)

 

 

(12,882

)

 

 

(44,229

)

 

 

(36,694

)

Total other (expense) income

 

(7,865

)

 

 

(7,801

)

 

 

(36,967

)

 

 

13,181

 

 

 

 

 

 

 

 

 

Income (loss) before income tax expense (benefit)

 

22,355

 

 

 

8,548

 

 

 

177,157

 

 

 

(4,952

)

Income tax expense (benefit)

 

3,013

 

 

 

13,799

 

 

 

39,917

 

 

 

(9,384

)

Net income (loss)

 

19,342

 

 

 

(5,251

)

 

 

137,240

 

 

 

4,432

 

Preferred dividends and accretion

 

13,332

 

 

 

12,009

 

 

 

51,691

 

 

 

48,054

 

Net income (loss) to common shareholders

$

6,010

 

 

$

(17,260

)

 

$

85,549

 

 

$

(43,622

)

 

 

 

 

 

 

 

 

Income (loss) per common share

 

 

 

 

 

 

 

Basic

$

0.04

 

 

$

(0.11

)

 

$

0.57

 

 

$

(0.29

)

Diluted

$

0.04

 

 

$

(0.11

)

 

$

0.56

 

 

$

(0.29

)

 

 

 

 

 

 

 

 

Weighted average common shares outstanding

 

 

 

 

 

 

 

Basic

 

151,175

 

 

 

150,463

 

 

 

150,942

 

 

 

149,819

 

Diluted

 

152,110

 

 

 

150,463

 

 

 

152,022

 

 

 

149,819

 

(a) During the three months ended March 31, 2023, the Company began to account for the Capped Calls and Put Option as derivative assets, with subsequent changes in fair value being recorded through earnings. After consultation with the staff of the Office of the Chief Accountant of the SEC during the fourth quarter of 2023, the Company concluded that the Capped Calls and Put option could be equity classified. As a result, the Company reclassified the derivative asset recognized during the interim periods of 2023 as a reduction to equity and reversed the related mark to market adjustments recognized during the interim periods of 2023. As a result, the change in fair value of derivative assets is not reflected in the results for the three months ended December 31, 2023.



Array Technologies, Inc. and Subsidiaries
Consolidated Statements of Cash Flows (unaudited)
(in thousands)

 

 

Three Months Ended
December 31,

 

Year Ended
December 31,

 

 

2023

 

 

 

2022

 

 

 

2023

 

 

 

2022

 

Operating activities:

 

 

 

 

 

 

 

Net income (loss)

$

19,342

 

 

$

(5,251

)

 

$

137,240

 

 

$

4,432

 

Adjustments to net income (loss):

 

 

 

 

 

 

 

Provision for bad debts

 

2,644

 

 

 

1,939

 

 

 

2,527

 

 

 

2,599

 

Deferred tax expense

 

(6,534

)

 

 

(3,362

)

 

 

(8,862

)

 

 

(31,565

)

Depreciation and amortization

 

9,950

 

 

 

26,102

 

 

 

40,268

 

 

 

86,501

 

Amortization of developed technology

 

3,640

 

 

 

 

 

 

14,558

 

 

 

14,558

 

Amortization of debt discount and issuance costs

 

1,447

 

 

 

1,854

 

 

 

10,570

 

 

 

6,857

 

Gain on debt refinancing

 

(457

)

 

 

 

 

 

(457

)

 

 

 

Equity-based compensation

 

2,845

 

 

 

3,305

 

 

 

14,540

 

 

 

14,982

 

Contingent consideration

 

732

 

 

 

1,474

 

 

 

2,964

 

 

 

(4,507

)

Warranty provision

 

1,075

 

 

 

(189

)

 

 

4,666

 

 

 

4,152

 

Write-down of inventories

 

1,844

 

 

 

1,474

 

 

 

6,431

 

 

 

(859

)

Changes in operating assets and liabilities, net of business acquisition:

 

 

 

 

 

 

 

Accounts receivable

 

99,164

 

 

 

62,052

 

 

 

92,800

 

 

 

(76,984

)

Inventories

 

54,189

 

 

 

35,143

 

 

 

66,743

 

 

 

20,870

 

Income tax receivables

 

(3,156

)

 

 

9,221

 

 

 

9

 

 

 

5,611

 

Prepaid expenses and other

 

(8,700

)

 

 

2,795

 

 

 

(10,840

)

 

 

19,124

 

Accounts payable

 

(52,097

)

 

 

(29,406

)

 

 

(37,654

)

 

 

12,667

 

Accrued expenses and other

 

(10,019

)

 

 

(42,161

)

 

 

5,325

 

 

 

1,024

 

Income tax payable

 

2,666

 

 

 

(3,706

)

 

 

1,936

 

 

 

(755

)

Lease liabilities

 

9,227

 

 

 

1,870

 

 

 

1,177

 

 

 

3,784

 

Deferred revenue

 

(33,821

)

 

 

24,230

 

 

 

(111,986

)

 

 

59,002

 

Net cash provided by operating activities

 

93,981

 

 

 

87,384

 

 

 

231,955

 

 

 

141,493

 

 

 

 

 

 

 

 

 

Investing activities:

 

 

 

 

 

 

 

Purchase of property, plant and equipment

 

(5,374

)

 

 

(3,931

)

 

 

(16,989

)

 

 

(10,619

)

Retirement/disposal of PP&E

 

168

 

 

 

 

 

 

168

 

 

 

 

Acquisition of STI, net of cash acquired

 

 

 

 

 

 

 

 

 

 

(373,818

)

Net cash used in investing activities

 

(5,206

)

 

 

(3,931

)

 

 

(16,821

)

 

 

(384,437

)

 

 

 

 

 

 

 

 

Financing activities:

 

 

 

 

 

 

 

Proceeds from Series A issuance

 

 

 

 

 

 

 

 

 

 

33,098

 

Proceeds from common stock issuance

 

 

 

 

 

 

 

 

 

 

15,885

 

Series A equity issuance costs and commitment fees

 

 

 

 

(726

)

 

 

(1,509

)

 

 

(1,893

)

Common stock issuance costs

 

 

 

 

 

 

 

 

 

 

(450

)

Dividends paid on Series A Preferred

 

 

 

 

 

 

 

 

 

 

(18,670

)

Payments on revolving credit facility

 

 

 

 

 

 

 

 

 

 

(116,000

)

Proceeds from revolving credit facility

 

 

 

 

 

 

 

 

 

 

116,000

 

Proceeds from issuance of other debt

 

2,795

 

 

 

10,280

 

 

 

63,311

 

 

 

20,188

 

Proceeds from issuance of convertible notes

 

 

 

 

 

 

 

 

 

 

 

Premium paid on capped call

 

 

 

 

 

 

 

 

 

 

 

Fees paid on issuance of convertible notes

 

 

 

 

 

 

 

 

 

 

 

Principal payments on term loan facility

 

(1,075

)

 

 

(11,075

)

 

 

(74,300

)

 

 

(14,300

)

Principal payments on other debt

 

(19,039

)

 

 

(23,185

)

 

 

(88,063

)

 

 

(23,935

)

Contingent consideration payments

 

 

 

 

 

 

 

(1,200

)

 

 

(1,483

)

Net cash (used in) provided by financing activities

 

(17,319

)

 

 

(24,706

)

 

 

(101,761

)

 

 

8,440

 

Effect of exchange rate changes on cash and cash equivalent balances

 

3,614

 

 

 

10,089

 

 

 

1,806

 

 

 

735

 

Net change in cash and cash equivalents

 

75,070

 

 

 

68,836

 

 

 

115,179

 

 

 

(233,769

)

Cash and cash equivalents, beginning of period

 

174,010

 

 

 

62,778

 

 

 

133,901

 

 

 

367,670

 

Cash and cash equivalents, end of period

$

249,080

 

 

$

131,614

 

 

$

249,080

 

 

$

133,901

 

 

 

 

 

 

 

 

 

Supplemental Cash Flow Information

 

 

 

 

 

 

 

Cash paid for interest

$

8,995

 

 

$

892

 

 

$

43,949

 

 

$

23,118

 

Cash paid for income taxes

$

9,145

 

 

$

9,550

 

 

$

45,942

 

 

$

10,739

 

 

 

 

 

 

 

 

 

Non-cash Investing and Financing Activities

 

 

 

 

 

 

 

Dividends accrued on Series A Preferred

$

6,803

 

 

$

6,389

 

 

$

26,370

 

 

$

6,389

 

Stock consideration paid for acquisition of STI

$

 

 

$

 

 

$

 

 

$

200,224

 



Array Technologies, Inc.
Adjusted Gross Profit, Adjusted EBITDA, and Adjusted Net Income Reconciliation (unaudited)
(in thousands, except per share amounts)

 

The following table reconciles Gross profit to Adjusted gross profit:

 

 

Three Months Ended
December 31,

 

Year Ended
December 31,

 

 

2023

 

 

 

2022

 

 

 

2023

 

 

 

2022

 

Revenue

 

341,615

 

 

 

402,071

 

 

 

1,576,551

 

 

 

1,637,546

 

Cost of revenue

 

257,386

 

 

 

325,191

 

 

 

1,161,000

 

 

 

1,424,828

 

Gross profit

 

84,229

 

 

 

76,880

 

 

 

415,551

 

 

 

212,718

 

Amortization of developed technology

 

3,640

 

 

 

3,640

 

 

 

14,558

 

 

 

14,558

 

Other costs(a)

 

 

 

 

1,785

 

 

 

 

 

 

6,817

 

Adjusted gross profit

 

87,869

 

 

 

82,305

 

 

 

430,109

 

 

 

234,093

 

Adjusted gross margin

 

25.7

%

 

 

20.5

%

 

 

27.3

%

 

 

14.3

%

(a) For the three months ended December 31, 2022, other costs represent $1.8 million in remediation and damages incurred because of a shutdown of a key supplier due to a severe weather event. For the twelve months ended December 31, 2022, other costs represent $6.8 million in remediation and damages incurred because of a shutdown of a key supplier due to a severe weather event.


The following table reconciles Net income (loss) to Adjusted EBITDA:

 

 

Three Months Ended
December 31,

 

Year Ended
December 31,

 

 

2023

 

 

 

2022

 

 

 

2023

 

 

 

2022

 

Net income (loss)

$

19,342

 

 

$

(5,251

)

 

$

137,240

 

 

$

4,432

 

Preferred dividends and accretion

 

13,332

 

 

 

12,009

 

 

 

51,691

 

 

 

48,054

 

Net income (loss) to common shareholders

$

6,010

 

 

$

(17,260

)

 

$

85,549

 

 

$

(43,622

)

Other expense, net

 

(1,318

)

 

 

(5,894

)

 

 

(7,315

)

 

 

(5,970

)

Legal settlement(a)

 

 

 

 

 

 

 

 

 

 

(42,750

)

Foreign currency transaction (gain) loss

 

326

 

 

 

813

 

 

 

53

 

 

 

(1,155

)

Preferred dividends and accretion

 

13,332

 

 

 

12,009

 

 

 

51,691

 

 

 

48,054

 

Interest expense

 

8,857

 

 

 

12,882

 

 

 

44,229

 

 

 

36,694

 

Income tax (benefit) expense

 

3,013

 

 

 

13,799

 

 

 

39,917

 

 

 

(9,384

)

Depreciation expense

 

1,118

 

 

 

704

 

 

 

3,540

 

 

 

2,571

 

Amortization of intangibles

 

8,840

 

 

 

21,027

 

 

 

36,736

 

 

 

83,630

 

Amortization of developed technology

 

3,640

 

 

 

3,640

 

 

 

14,558

 

 

 

14,558

 

Equity-based compensation

 

2,648

 

 

 

3,091

 

 

 

14,578

 

 

 

14,768

 

Change in fair value of contingent consideration

 

732

 

 

 

1,474

 

 

 

2,964

 

 

 

(4,507

)

Certain legal expenses(b)

 

244

 

 

 

984

 

 

 

898

 

 

 

5,990

 

Certain acquisition costs(c)

 

 

 

 

(206

)

 

 

 

 

 

10,564

 

Other costs(d)

 

736

 

 

 

4,635

 

 

 

736

 

 

 

19,291

 

Adjusted EBITDA

$

48,178

 

 

$

51,698

 

 

$

288,134

 

 

$

128,732

 

.

(a) Settlement in our favor resulting from the action against a competitor in connection with violation of a non-competition agreement and misappropriation of trade secrets.

(b) 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.

(c) Represents fees related to the acquisition of STI Norland.

(d) For the three months ended December 31, 2023, other costs represent one-time costs related to an evaluation of our Capped Call and Put Options accounting treatment. For the three months ended December 31, 2022, other costs represent (i) $1.4 million related to certain professional fees incurred related to the integration of STI Norland, (ii) $1.8 million in remediation and damages incurred because of a shutdown of a key supplier due to a severe weather event, (iii) $1.4 million of executive transition and payroll related costs that we do not anticipate repeating in the future. For the twelve months ended December 31, 2022, (i) $7.2 million related to certain professional fees incurred related to integration, (ii) $6.8 million in remediation and damages incurred because of a shutdown of a key supplier due to a severe weather event, (iii) $5.3 million associated with the transition of CEOs as well as other one-time executive payroll related costs that we do not anticipate repeating in the future.


The following table reconciles Net income (loss) to Adjusted net income (loss):

 

 

Three Months Ended
December 31,

 

Year Ended
December 31,

 

 

2023

 

 

 

2022

 

 

 

2023

 

 

 

2022

 

Net income (loss)

$

19,342

 

 

$

(5,251

)

 

$

137,240

 

 

$

4,432

 

Preferred dividends and accretion

 

13,332

 

 

 

12,009

 

 

 

51,691

 

 

 

48,054

 

Net income (loss) to common shareholders

$

6,010

 

 

$

(17,260

)

 

$

85,549

 

 

$

(43,622

)

Amortization of intangibles

 

8,840

 

 

 

21,027

 

 

 

36,736

 

 

 

83,630

 

Amortization of developed technology

 

3,640

 

 

 

3,640

 

 

 

14,558

 

 

 

14,558

 

Amortization of debt discount and issuance costs

 

1,447

 

 

 

1,854

 

 

 

10,570

 

 

 

6,858

 

Preferred accretion

 

6,528

 

 

 

6,009

 

 

 

25,320

 

 

 

23,249

 

Equity based compensation

 

2,648

 

 

 

3,091

 

 

 

14,578

 

 

 

14,768

 

Change in fair value of contingent consideration

 

732

 

 

 

1,474

 

 

 

2,964

 

 

 

(4,507

)

Certain legal expenses(a)

 

244

 

 

 

984

 

 

 

898

 

 

 

5,990

 

Certain acquisition costs(b)

 

 

 

 

(206

)

 

 

 

 

 

10,564

 

Legal settlement(c)

 

 

 

 

 

 

 

 

 

 

(42,750

)

Other costs(d)

 

736

 

 

 

4,635

 

 

 

736

 

 

 

19,291

 

Income tax expense of adjustments(e)

 

563

 

 

 

(10,205

)

 

 

(20,659

)

 

 

(30,773

)

Adjusted net income

$

31,388

 

 

$

15,043

 

 

$

171,250

 

 

$

57,256

 

 

 

 

 

 

 

 

 

Loss per common share

 

 

 

 

 

 

 

Basic

$

0.04

 

 

$

(0.11

)

 

$

0.57

 

 

$

(0.29

)

Diluted

$

0.04

 

 

$

(0.11

)

 

$

0.56

 

 

$

(0.29

)

Weighted average common shares outstanding

 

 

 

 

 

 

 

Basic

 

151,175

 

 

 

150,463

 

 

 

150,942

 

 

 

149,819

 

Diluted

 

152,110

 

 

 

150,463

 

 

 

152,022

 

 

 

149,819

 

Adjusted income (loss) per common share

 

 

 

 

 

 

 

Basic

$

0.21

 

 

$

0.10

 

 

$

1.13

 

 

$

0.38

 

Diluted

$

0.21

 

 

$

0.10

 

 

$

1.13

 

 

$

0.38

 

Weighted average common shares outstanding

 

 

 

 

 

 

 

Basic

 

151,175

 

 

 

150,463

 

 

 

150,942

 

 

 

149,819

 

Diluted

 

152,110

 

 

 

150,463

 

 

 

152,022

 

 

 

149,819

 

(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) Settlement in our favor resulting from the action against a competitor in connection with violation of a non-competition agreement and misappropriation of trade secrets.

(d) For the three months ended December 31, 2023, other costs represent one-time costs related to an evaluation of our Capped Call and Put Options accounting treatment. For the three months ended December 31, 2022, other costs represent (i) $1.4 million related to certain professional fees incurred related to the integration of STI Norland, (ii) $1.8 million in remediation and damages incurred because of a shutdown of a key supplier due to a severe weather event, (iii) $1.4 million of executive transition and payroll related costs that we do not anticipate repeating in the future. For the twelve months ended December 31, 2022, (i) $7.2 million related to certain professional fees incurred related to integration, (ii) $6.8 million in remediation and damages incurred because of a shutdown of a key supplier due to a severe weather event, (iii) $5.3 million associated with the transition of CEOs as well as other one-time executive payroll related costs that we do not anticipate repeating in the future.

(e) Represents the estimated tax impact of all Adjusted Net Income add-backs, excluding those which represent permanent differences between book versus tax.