Second Quarter 2021 Financial Highlights
- Revenue of
$202.8 million - Net loss of
$17.0 thousand - Adjusted EBITDA of
$16.2 million (1) - Adjusted Basic and Diluted Net Income per share of
$0.07 (1)
(1) A reconciliation of the GAAP to the most comparable Non-GAAP results is included below.
“We delivered strong financial results in the second quarter, despite a challenging supply chain environment. Revenues grew 76% year-over-year to
Second Quarter 2021 Financial Results
Revenues increased 76% to
Gross profit increased 21% to
Operating expenses increased to
Net loss was
Adjusted EBITDA increased 23% to
Adjusted net income increased 19% to
Executed Contracts and Awarded Orders
Total executed contracts and awarded orders at
Second Quarter 2021 Highlights and Recent Developments
- Entered into supply agreements that fix approximately 85% of our input costs for the remainder of 2021, including nearly all of our steel requirements
- Changed business processes to significantly reduce any gap between the time when we agree on price with our customers and when we contract for materials and components from our suppliers
- Awarded more than
$300 million in new projects during the second quarter and an additional 18 new projects totaling approximately$135 million inJuly 2021 - Strengthened our executive team with the additions of
Erica Brinker as our Chief Marketing Officer,Tyson Hottinger as our new Chief Legal Officer, andKen Stacherski as our Senior Vice President of Operations - Entered into an agreement to sell up to
$500 million of perpetual preferred stock to private equity funds managed byBlackstone Energy Partners to support our internal and external growth plans
Full Year 2021 Guidance
For the full year 2021 ending
- Revenues to be in the range of
$850 million to$940 million - Adjusted EBITDA(2) to be in the range of
$55 million to$75 million - Adjusted diluted net income per share(2) to be in the range of
$0.15 to$0.25
“We are already seeing margins on new orders that are in line with our past performance and in some instances even higher. However, results for the balance of the year will continue to be impacted by the roll-off of backlog from the beginning of this year which is predominantly contracts that were priced prior to the current inflationary environment. The ‘hangover’ effect of older backlog should dissipate by the first quarter of 2022 at which point the new contracts we have signed will be reflected in our financial results,” said
(2) A reconciliation of projected adjusted EBITDA and adjusted net income per share, which are forward-looking measures that are not prepared in accordance with GAAP, to the most directly comparable GAAP financial measures, is not provided because we are unable to provide such reconciliation without unreasonable effort. The inability to provide a quantitative reconciliation is due to the uncertainty and inherent difficulty predicting the occurrence, the financial impact and the periods in which the components of the applicable GAAP measures and non-GAAP adjustments may be recognized. The GAAP measures may include the impact of such items as non-cash share-based compensation, revaluation of the fair-value of our contingent consideration, and the tax effect of such items, in addition to other items we have historically excluded from adjusted EBITDA and adjusted net income per share. We expect to continue to exclude these items in future disclosures of these non-GAAP measures and may also exclude other similar items that may arise in the future (collectively, “non-GAAP adjustments”). The decisions and events that typically lead to the recognition of non-GAAP adjustments are inherently unpredictable as to if or when they may occur. As such, for our 2021 outlook, we have not included estimates for these items and are unable to address the probable significance of the unavailable information, which could be material to future results.
Conference Call Information
Array management will host a conference call today at
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
About
Investor Relations Contact:
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 and uncertainties including those described in more detail in the Company’s most recent Annual Report on Form 10-K and other documents on file with the
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 presentation includes unaudited financial measures that exclude items and therefore are not in accordance with
Among other limitations, Adjusted EBITDA and Adjusted Net Income do not reflect our cash expenditures, or future requirements, for capital expenditures or contractual commitments; do not reflect the impact of certain cash charges resulting from matters we consider not to be indicative of our ongoing operations; do not reflect income tax expense or benefit; and other companies in our industry may calculate Adjusted EBITDA and Adjusted Net Income differently than we do, which limits their usefulness as comparative measures. Because of these limitations, Adjusted EBITDA and Adjusted Net Income should not be considered in isolation or as substitutes for performance measures calculated in accordance with GAAP. We compensate for these limitations by relying primarily on our GAAP results and using Adjusted EBITDA and Adjusted Net Income on a supplemental basis. You should review the reconciliation of net income (loss) to Adjusted EBITDA and Adjusted Net Income below and not rely on any single financial measure to evaluate our business.
Consolidated Balance Sheets (unaudited) (in thousands except share and per share amounts) | |||||||
2021 | 2020 | ||||||
ASSETS | |||||||
Current assets | |||||||
Cash and cash equivalents | $ | 17,682 | $ | 108,441 | |||
Accounts receivable, net | 153,610 | 118,694 | |||||
Inventories, net | 137,666 | 118,459 | |||||
Income tax receivables | 9,657 | 17,158 | |||||
Prepaid expenses and other | 11,597 | 12,423 | |||||
Total current assets | 330,212 | 375,175 | |||||
Property, plant and equipment, net | 9,763 | 9,774 | |||||
69,727 | 69,727 | ||||||
Other intangible assets, net | 186,507 | 198,260 | |||||
Other assets | 26,109 | 3,088 | |||||
Total assets | $ | 622,318 | $ | 656,024 | |||
LIABILITIES AND STOCKHOLDERS' DEFICIT | |||||||
Current Liabilities | |||||||
Accounts payable | $ | 81,377 | $ | 82,755 | |||
Accounts payable - related party | 610 | 2,232 | |||||
Accrued expenses and other | 19,129 | 29,164 | |||||
Accrued warranty reserve | 2,968 | 3,049 | |||||
Income tax payable | — | 8,814 | |||||
Deferred revenue | 51,458 | 149,821 | |||||
Current portion of contingent consideration | 1,908 | 8,955 | |||||
Current portion of term loan | 4,300 | 4,313 | |||||
Other current liabilities | 6,379 | — | |||||
Total current liabilities | 168,129 | 289,103 | |||||
Long-term liabilities | |||||||
Deferred tax liability | 14,472 | 13,114 | |||||
Contingent consideration, net of current portion | 10,108 | 10,736 | |||||
Other long-term liabilities | 4,273 | — | |||||
Long-term debt, net of current portion, debt discount and issuance costs | 493,945 | 423,970 | |||||
Total long-term liabilities | 522,798 | 447,820 | |||||
Total liabilities | 690,927 | 736,923 | |||||
Commitments and contingencies | |||||||
Preferred stock of 0.001 par value - 5,000,000 shares authorized; none issued as of | — | — | |||||
Common stock of 126,994,467 shares issued as of | 127 | 127 | |||||
Additional paid-in capital | 149,893 | 140,473 | |||||
Accumulated deficit | (218,629 | ) | (221,499 | ) | |||
Total stockholders’ deficit | (68,609 | ) | (80,899 | ) | |||
Total liabilities and stockholders’ deficit | $ | 622,318 | $ | 656,024 | |||
Consolidated Statements of Operations (unaudited) (in thousands, except share amounts) | |||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||
2021 | 2020 | 2021 | 2020 | ||||||||||||
Revenue | $ | 202,796 | $ | 114,916 | $ | 448,728 | $ | 552,634 | |||||||
Cost of revenue | 176,009 | 92,714 | 378,083 | 412,016 | |||||||||||
Gross profit | 26,787 | 22,202 | 70,645 | 140,618 | |||||||||||
Operating expenses | |||||||||||||||
General and administrative | 15,113 | 11,192 | 39,786 | 22,899 | |||||||||||
Contingent consideration | (13 | ) | 3,430 | 135 | 2,417 | ||||||||||
Depreciation and amortization | 5,981 | 6,369 | 11,965 | 12,743 | |||||||||||
Total operating expenses | 21,081 | 20,991 | 51,886 | 38,059 | |||||||||||
Income from operations | 5,706 | 1,211 | 18,759 | 102,559 | |||||||||||
Other expense | |||||||||||||||
Other expense, net | (122 | ) | (2,242 | ) | (200 | ) | (2,134 | ) | |||||||
Interest expense | (6,651 | ) | (2,411 | ) | (15,660 | ) | (7,640 | ) | |||||||
Total other expense | (6,773 | ) | (4,653 | ) | (15,860 | ) | (9,774 | ) | |||||||
Income (loss) before income tax expense | (1,067 | ) | (3,442 | ) | 2,899 | 92,785 | |||||||||
Income tax expense (benefit) | (1,050 | ) | (5,834 | ) | 29 | 16,708 | |||||||||
Net income (loss) | $ | (17 | ) | $ | 2,392 | $ | 2,870 | $ | 76,077 | ||||||
Earnings (loss) per share | |||||||||||||||
Basic | $ | — | $ | 0.02 | $ | 0.02 | $ | 0.63 | |||||||
Diluted | $ | — | $ | 0.02 | $ | 0.02 | $ | 0.63 | |||||||
Weighted average number of shares | |||||||||||||||
Basic | 126,994 | 119,994 | 126,994 | 119,994 | |||||||||||
Diluted | 126,994 | 119,994 | 127,203 | 119,994 | |||||||||||
Consolidated Statements of Cash Flows (unaudited) (in thousands) | ||||||||||||||||
Three Months Ended | Six Months Ended | |||||||||||||||
2021 | 2020 | 2021 | 2020 | |||||||||||||
Cash flows used in operating activities | ||||||||||||||||
Net income (loss) | $ | (17 | ) | $ | 2,392 | $ | 2,870 | $ | 76,077 | |||||||
Adjustments to reconcile net income to net cash used in operating activities: | ||||||||||||||||
Provision for (recovery of) bad debts | (16 | ) | 134 | (551 | ) | 223 | ||||||||||
Deferred tax benefit | 1,429 | 896 | 1,358 | (1,376 | ) | |||||||||||
Depreciation and amortization | 6,483 | 6,863 | 12,964 | 13,724 | ||||||||||||
Amortization of debt discount and issuance costs | 1,532 | — | 5,118 | 2,160 | ||||||||||||
Interest paid-in-kind | — | 1,752 | — | 3,073 | ||||||||||||
Equity-based compensation | 1,556 | 653 | 9,467 | 2,411 | ||||||||||||
Contingent consideration | (13 | ) | 3,430 | 135 | 2,417 | |||||||||||
Warranty provision | 123 | — | 425 | 597 | ||||||||||||
Provision for inventory obsolescence | 1,236 | 221 | 1,236 | 221 | ||||||||||||
Changes in operating assets and liabilities | ||||||||||||||||
Accounts receivable | (31,673 | ) | 16,925 | (34,365 | ) | (2,590 | ) | |||||||||
Inventories | (14,197 | ) | 15,090 | (20,443 | ) | 42,523 | ||||||||||
Income tax receivables | (5,502 | ) | (19,317 | ) | 7,501 | (18,689 | ) | |||||||||
Prepaid expenses and other | 4,042 | (304 | ) | 826 | 7,183 | |||||||||||
Accounts payable | 9,178 | (63,841 | ) | (1,378 | ) | (99,396 | ) | |||||||||
Accounts payable - related party | (1,622 | ) | (698 | ) | (1,622 | ) | — | |||||||||
Accrued expenses and other | (15,675 | ) | (17,343 | ) | (10,541 | ) | (4,365 | ) | ||||||||
Income tax payable | (10,224 | ) | 12,588 | (8,814 | ) | 35,824 | ||||||||||
Lease liabilities | (179 | ) | — | 68 | — | |||||||||||
Deferred revenue | (38,422 | ) | (6,765 | ) | (98,363 | ) | (307,917 | ) | ||||||||
Net cash used in operating activities | (91,961 | ) | (47,324 | ) | (134,109 | ) | (247,900 | ) | ||||||||
Cash flows used in investing activities | ||||||||||||||||
Purchase of property, plant and equipment | (630 | ) | (97 | ) | (1,200 | ) | (265 | ) | ||||||||
Investment in equity security | (1,975 | ) | — | (11,975 | ) | |||||||||||
Net cash used in investing activities | (2,605 | ) | (97 | ) | (13,175 | ) | (265 | ) | ||||||||
Cash flows from financing activities | ||||||||||||||||
Proceeds from revolving credit facility | 102,000 | 4,320 | 102,000 | 4,330 | ||||||||||||
Principal payments on term loan facility | (1,075 | ) | — | (31,075 | ) | (57,702 | ) | |||||||||
Payments on related party loans | — | (21,736 | ) | — | (21,736 | ) | ||||||||||
Contingent consideration | (7,810 | ) | — | (7,810 | ) | — | ||||||||||
Debt issuance costs | — | — | (6,590 | ) | — | |||||||||||
Net cash provided by (used in) financing activities | 93,115 | (17,416 | ) | 56,525 | (75,108 | ) | ||||||||||
Net decrease in cash, cash equivalents and restricted cash | (1,451 | ) | (64,837 | ) | (90,759 | ) | (323,273 | ) | ||||||||
Cash, cash equivalents and restricted cash, beginning of period | 19,133 | 102,821 | 108,441 | 361,257 | ||||||||||||
Cash, cash equivalents, and restricted cash, end of period | $ | 17,682 | $ | 37,984 | $ | 17,682 | $ | 37,984 |
Adjusted EBITDA Reconciliation (unaudited) (in thousands) | |||||||||||||||
The following table reconciles net income (loss) to Adjusted EBITDA: | |||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||
2021 | 2020 | 2021 | 2020 | ||||||||||||
Net income (loss) | $ | (17 | ) | $ | 2,392 | $ | 2,870 | $ | 76,077 | ||||||
Interest expense, net | 6,651 | 2,411 | 15,660 | 7,640 | |||||||||||
Other expense, net | 122 | 2,242 | 200 | 2,134 | |||||||||||
Income tax expense (benefit) | (1,050 | ) | (5,834 | ) | 29 | 16,708 | |||||||||
Depreciation expense | 608 | 550 | 1,212 | 1,099 | |||||||||||
Amortization of intangibles | 5,875 | 6,313 | 11,752 | 12,625 | |||||||||||
Equity-based compensation | 4,120 | 653 | 12,031 | 2,411 | |||||||||||
Contingent consideration | (13 | ) | 3,430 | 135 | 2,417 | ||||||||||
ERP implementation costs(a) | — | 477 | — | 1,571 | |||||||||||
Legal expense(b) | 99 | 367 | 143 | 835 | |||||||||||
Other costs(c) | (224 | ) | 115 | 6,591 | 335 | ||||||||||
Adjusted EBITDA | $ | 16,171 | $ | 13,116 | $ | 50,623 | $ | 123,852 |
(a) Represents consulting costs associated with our enterprise resource planning system implementation.
(b) Represents certain legal fees and other related costs associated with (i) a patent infringement action against a competitor for which a judgement has been entered in our favor and successful defense of a related matter and (ii) a pending action against a competitor in connection with violation of a non-competition agreement and misappropriation of trade secrets. 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) For the three months ended
Adjusted Net Income Reconciliation (Unaudited) (In thousands) | ||||||||||||||||
The following table reconciles net income (loss) to Adjusted Net Income: | ||||||||||||||||
Three Months Ended | Six Months Ended | |||||||||||||||
2021 | 2020 | 2021 | 2020 | |||||||||||||
Net income (loss) | $ | (17 | ) | $ | 2,392 | $ | 2,870 | $ | 76,077 | |||||||
Amortization of intangibles | 5,875 | 6,313 | 11,752 | 12,625 | ||||||||||||
Amortization of debt discount and issuance costs | 1,532 | — | 5,118 | 2,160 | ||||||||||||
Equity-based compensation | 4,120 | 653 | 12,031 | 2,411 | ||||||||||||
Contingent consideration | (13 | ) | 3,430 | 135 | 2,417 | |||||||||||
ERP implementation costs(a) | — | 477 | — | 1,571 | ||||||||||||
Legal expense(b) | 99 | 367 | 143 | 835 | ||||||||||||
Other costs(c) | (224 | ) | 2,347 | 6,590 | 2,567 | |||||||||||
Income tax expense of adjustments(d) | (2,858 | ) | (2,232 | ) | (6,470 | ) | (4,641 | ) | ||||||||
Non-recurring income tax adjustments related to the | — | (6,608 | ) | — | (6,608 | ) | ||||||||||
Adjusted Net Income | $ | 8,514 | $ | 7,139 | $ | 32,169 | $ | 89,414 |
(a) Represents consulting costs associated with our enterprise resource planning system implementation.
(b) Represents certain legal fees and other related costs associated with (i) a patent infringement action against a competitor for which a judgement has been entered in our favor and successful defense of a related matter and (ii) a pending action against a competitor in connection with violation of a non-competition agreement and misappropriation of trade secrets. 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) For the three months ended
(d) Represents the estimated tax impact of all Adjusted Net Income add-backs, excluding those which represent permanent differences between book versus tax.
Source:
2021 GlobeNewswire, Inc., source