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 first quarter ended March 31, 2023
“In the first quarter we grew revenue 25% from
the prior year as we had favorable project timing to close out
March in our Array Legacy Segment. Adjusted EBITDA for the quarter
was $67.0 million which was a $66.2 million improvement from the
prior year and was anchored by a 26.9% gross margin, which
represents the highest levels since first quarter 2020.
Additionally, in the first quarter we delivered $41.9 million of
free cash flow leaving our end of quarter cash balance at $147.8
million,” said Kevin Hostetler, Chief Executive Officer. “The
margin performance was driven by favorable project mix and one-time
benefits from lower-than-expected logistics costs as both ocean and
domestic trucking rates came in lower than forecasted. It does not
reflect benefits related to either the domestic content provisions
or manufacturing credits included in the IRA, which we continue to
view as potential upside.”
Mr. Hostetler continued, “When we compare
Array’s performance this quarter to a year ago, the contrast is
striking. We have not only continued to grow the business
organically but have improved profitability at the same time. The
meaningful expansion in our gross margin year over year represents
our improved contracting process but is also indicative of the
significant improvements we have made in our operational execution
and our product and pricing strategies. While there were some
one-time benefits this quarter, that should not overshadow the
maturing of our operating system, which has allowed us to identify
and take advantage of the opportunities as they arose.”
“I will note that we did have a slowdown in our
order activity this quarter, which was not unexpected. Our pipeline
remains strong, but many of our customers are still awaiting final
IRA guidelines around domestic content before issuing final award
and are delaying project start dates to provide more time to
evaluate its provisions. This dynamic was largely contemplated when
we evaluated our orderbook entering the year and reflected on the
lower end of the revenue range we provided. As we are now further
into the year and have a better understanding of how these delays
are impacting the second half of the year, we are slightly reducing
the top end of the revenue range to reflect this market dynamic.
That said, we remain confident in our gross margin outlook and on
the back of our strong first quarter performance, we are holding
our adjusted EBITDA and adjusted EPS ranges,” concluded Mr.
Hostetler.
First Quarter 2023 Financial
Results
Revenue increased 25% to $376.8 million,
compared to $300.6 million for the prior-year period resulting from
both an increase in the total number of MWs shipped and an increase
in ASP due to improved pass through pricing to our customers.
Gross profit increased 281% to $101.2 million
compared to $26.6 million in the prior year period, driven by both
higher volume and an increase in gross profit as a percent of
revenue in both operating segments. Gross margin increased to 26.9%
from 8.8% driven by an improvement in pass through pricing to
customers in addition to a one-time benefit from
lower-than-expected logistics costs in the first quarter of
2023.
Operating expenses decreased to $53.7 million
compared to $64.9 million during the same period in the prior year.
The decrease is primarily related to lower amortization expense
related to the STI acquisition in addition to costs related to the
STI acquisition in the first quarter of 2022 with no comparable
costs in the first quarter of 2023.
Net income to common stockholders was $13.6
million compared to a net loss of $37.5 million during the same
period in the prior year, and basic and diluted income per share
were $0.09 compared to basic and diluted loss per share of $0.25
during the same period in the prior year.
Adjusted EBITDA increased to $67.0 million,
compared to $0.7 million for the prior-year period.
Adjusted net income was $37.3 million compared
to adjusted net income of $0.5 million during the same period in
the prior year and adjusted basic and diluted adjusted net income
per share was $0.25 compared to adjusted diluted net income per
share of $0.00 during the same period in the prior year.
Executed Contracts and Awarded
Orders
Total executed contracts and awarded orders at
March 31, 2023 were $1.6 billion, with $1.3 billion from our Array
Legacy Operations segment and $0.3 billion from STI Norland.
Full Year 2023 Guidance
For the year ending December 31, 2023, the
company expects:
- Revenue to be in the range of
$1,800 million to $1,900 million
- Adjusted EBITDA(2) to be in the
range of $240 million to $265 million
- Adjusted net income per share(2) to
be in the range of $0.75 to $0.85
(2) A reconciliation of projected adjusted
EBITDA and adjusted net income per share, which are forward-looking
measures that are not prepared in accordance with GAAP, to the most
directly comparable GAAP financial measures, is not provided
because we are unable to provide such reconciliation without
unreasonable effort. The inability to provide a quantitative
reconciliation is due to the uncertainty and inherent difficulty
predicting the occurrence, the financial impact and the periods in
which the components of the applicable GAAP measures and non-GAAP
adjustments may be recognized. The GAAP measures may include the
impact of such items as non-cash share-based compensation,
revaluation of the fair-value of our contingent consideration, and
the tax effect of such items, in addition to other items we have
historically excluded from adjusted EBITDA and adjusted net income
per share. We expect to continue to exclude these items in future
disclosures of these non-GAAP measures and may also exclude other
similar items that may arise in the future (collectively, “non-GAAP
adjustments”). The decisions and events that typically lead to the
recognition of non-GAAP adjustments are inherently unpredictable as
to if or when they may occur. As such, for our 2023 outlook, we
have not included estimates for these items and are unable to
address the probable significance of the unavailable information,
which could be material to future results.
Conference Call Information
Array management will host a conference call
today at 5:00 p.m. Eastern Time to discuss the Company’s financial
results. The conference call can be accessed live over the
phone by dialing (877)-451-6152 (domestic) or (201)-389-0879
(international). A telephonic replay will be available
approximately three hours after the call by dialing (844)-512-2921,
or for international callers, (412)-317-6671. The passcode for the
live call and the replay is 13737846. The replay will be available
until 11:59 p.m. (ET) on May 23, 2023.
Interested investors and other parties can
listen to a webcast of the live conference call by logging onto the
Investor Relations section of the Company's website at
http://ir.arraytechinc.com. The online replay will be available for
30 days on the same website immediately following the call.
To learn more about Array Technologies, please
visit the company's website at http://ir.arraytechinc.com.
About Array Technologies,
Inc.
Array Technologies (NASDAQ: ARRY) is a leading
American company and global provider of utility-scale solar tracker
technology. Engineered to withstand the harshest conditions on the
planet, Array’s high-quality solar trackers and sophisticated
software maximize energy production, accelerating the adoption of
cost-effective and sustainable energy. Founded and headquartered in
the United States, Array relies on its diversified global supply
chain and customer-centric approach to deliver, commission and
support solar energy developments around the world, lighting the
way to a brighter, smarter future for clean energy. For more news
and information on Array, please visit arraytechinc.com.
Investor Relations
Contact: Array Technologies, Inc.Investor
Relations 505-437-0010investors@arraytechinc.com
Forward-Looking
Statements This press release contains
forward-looking statements that are based on our management’s
beliefs and assumptions and on information currently available to
our management. Forward-looking statements include information
concerning our projected future results of operations, business
strategies, our continued integration of STI Norland and industry
and regulatory environment. Forward-looking statements include
statements that are not historical facts and can be identified by
terms such as “anticipate,” “believe,” “could,” “estimate,”
“expect,” “intend,” “may,” “plan,” “potential,” “predict,”
“project,” "seek," “should,” “will,” “would” or similar expressions
and the negatives of those terms.
Array’s actual results and the timing of events
could materially differ from those anticipated in such
forward-looking statements as a result of certain risks,
uncertainties and other factors, including without limitation:
changes in the demand for solar energy projects; competition from
conventional and renewable energy sources that may offer products
and solutions that are less expensive or otherwise perceived to be
more advantageous than solar energy solutions; a loss of one or
more of our significant customers, their inability to perform under
their contracts, or their default in payment; failure to retain key
personnel or failure to attract additional qualified personnel;
defects or performance problems in our products that could result
in loss of customers, reputational damage, a loss of revenue, and
warranty, indemnity and product liability claims; a drop in the
price of electricity derived from the utility grid or from
alternative energy sources; our ability to successfully integrate
the business of STI Norland into our business or achieve the
anticipated benefits of the acquisition of STI Norland; challenges
in our ability to consolidate the financial reporting of our
acquired foreign subsidiaries; the effect of the capped call
transactions on the value of our 1.00% Convertible Senior Notes due
2028 (the “Convertible Notes”) and the market price of our common
stock; the potential of the fundamental change repurchase feature
of the Convertible Notes to delay or prevent an otherwise
beneficial attempt to acquire us; delays, disruptions or quality
control problems in our product development operations; the risks
of severe weather events, natural disasters and other catastrophic
events; our ability to manage the financial regulatory and
competitive risks of our continued expansion into new markets;
developments in alternative technologies that may have an effect on
demand for our offerings; the effects of a further increase in
interest rates, or a reduction in the availability of tax equity or
project debt capital in the global financial markets, which could
make it difficult for customers to finance the cost of a solar
energy system and could reduce the demand for our products; changes
to tax laws and regulations that are applied adversely to us or our
customers; existing electric utility industry policies and
regulations, and any subsequent changes, that may present
technical, regulatory and economic barriers to the purchase and use
of solar energy systems; the interruption of the flow of materials
from international vendors, including as a result of the imposition
of additional duties, tariffs and other charges or restrictions on
imports and exports; changes in the global trade environment,
including the imposition of import tariffs; economic, political and
market conditions, including the Russian-Ukraine conflict,
uncertain credit and global financial markets resulting from
increasing inflation and interest rates along with recent bank
failures, and the COVID-19 pandemic; the reduction, elimination or
expiration of government incentives for, or regulations mandating
the use of, renewable energy and solar energy specifically; our
ability to, obtain, maintain, protect, defend or enforce, our
intellectual property and other proprietary rights; significant
changes in the costs of raw materials; the determination to restate
prior period financial statements could negatively affect investor
confidence and raise reputational issues; the implementation of the
IRA may not deliver as much growth as we are anticipating; our
ability to remediate our material weaknesses on a timely basis or
at all; the effect of our substantial indebtedness on our financial
condition; the occurrence of cybersecurity incidents, including
unauthorized disclosure of personal or sensitive data or theft of
confidential information; and the other risks and uncertainties
described in more detail in the Company’s most recent Annual Report
on Form 10-K and other documents on file with the SEC, each of
which can be found on our website www.arraytechinc.com.
Except as required by law, we assume no
obligation to update these forward-looking statements, or to update
the reasons actual results could differ materially from those
anticipated in these forward-looking statements, even if new
information becomes available in the future.
Non-GAAP
Financial InformationThis press
release includes certain financial measures that are not presented
in accordance with U.S. generally accepted accounting principles
(“GAAP”), including Adjusted EBITDA, Adjusted Net Income and
Adjusted Net Income per share. We define Adjusted EBITDA as net
income (loss) plus (i) other (income) expense, (ii) foreign
currency (gain) loss, (iii) preferred dividends and accretion, (iv)
interest expense, (v) income tax (benefit) expense, (vi)
depreciation expense, (vii) amortization of intangibles, (viii)
equity-based compensation, (ix) change in fair value of derivative
assets, (x) change in fair value of contingent consideration, (xi)
certain legal expense, (xii) certain acquisition costs, and (xiii)
other costs. We define Adjusted Net Income as net income (loss)
plus (i) amortization of intangibles, (ii) amortization of debt
discount and issuance costs (iii) preferred accretion, (iv)
equity-based compensation, (v) change in fair value of derivative
assets, (vi) change in fair value of contingent consideration,
(vii) certain legal expense, (viii) certain acquisition related
costs, (ix) other costs, and (x) income tax (expense) benefit of
adjustments. A detailed reconciliation between GAAP results and
results excluding special items (“non-GAAP”) is included within
this presentation. We calculate net income (loss) per share as net
income (loss) to common shareholders divided by the basic and
diluted weighted average number of shares outstanding for the
applicable period and we define Adjusted Net Income per share as
Adjusted Net Income (as detailed above) divided by the basic and
diluted weighted average number of shares outstanding for the
applicable period.
We believe that these non-GAAP financial
measures are provided to enhance the reader’s understanding of our
past financial performance and our prospects for the future. Our
management team uses these non-GAAP financial measures in assessing
the Company’s performance, as well as in planning and forecasting
future periods. The non-GAAP financial information is presented for
supplemental informational purposes only and should not be
considered a substitute for financial information presented in
accordance with GAAP, and may be different from similarly titled
non-GAAP measures used by other companies.
Among other limitations, Adjusted EBITDA and
Adjusted Net Income do not reflect our cash expenditures, or future
requirements, for capital expenditures or contractual commitments;
do not reflect the impact of certain cash charges resulting from
matters we consider not to be indicative of our ongoing operations;
do not reflect income tax expense or benefit; and other companies
in our industry may calculate Adjusted EBITDA and Adjusted Net
Income differently than we do, which limits their usefulness as
comparative measures. Because of these limitations, Adjusted EBITDA
and Adjusted Net Income should not be considered in isolation or as
substitutes for performance measures calculated in accordance with
GAAP. We compensate for these limitations by relying primarily on
our GAAP results and using Adjusted EBITDA and Adjusted Net Income
on a supplemental basis. You should review the reconciliation of
net income (loss) to Adjusted EBITDA and Adjusted Net Income below
and not rely on any single financial measure to evaluate our
business.
Array Technologies, Inc. and
Subsidiaries Consolidated Balance Sheets
(unaudited)(in thousands, except per share and share
amounts)
|
March 31, 2023 |
|
December 31, 2022 |
ASSETS |
Current assets |
|
|
|
Cash and cash equivalents |
$ |
147,756 |
|
|
$ |
133,901 |
|
Accounts receivable, net |
|
414,712 |
|
|
|
421,183 |
|
Inventories |
|
254,624 |
|
|
|
233,159 |
|
Income tax receivables |
|
3,163 |
|
|
|
3,532 |
|
Prepaid expenses and other |
|
46,381 |
|
|
|
39,434 |
|
Total current assets |
|
866,636 |
|
|
|
831,209 |
|
|
|
|
|
Property, plant and equipment,
net |
|
25,864 |
|
|
|
23,174 |
|
Goodwill |
|
428,173 |
|
|
|
416,184 |
|
Other intangible assets,
net |
|
379,374 |
|
|
|
386,364 |
|
Deferred income tax
assets |
|
— |
|
|
|
16,466 |
|
Derivative assets |
|
63,320 |
|
|
|
— |
|
Other assets |
|
30,802 |
|
|
|
32,655 |
|
Total assets |
$ |
1,794,169 |
|
|
$ |
1,706,052 |
|
|
|
|
|
LIABILITIES, REDEEMABLE PERPETUAL PREFERRED STOCK AND STOCKHOLDERS'
EQUITY |
Current liabilities |
|
|
|
Accounts payable |
$ |
200,585 |
|
|
$ |
170,430 |
|
Accrued expenses and other |
|
58,795 |
|
|
|
54,895 |
|
Accrued warranty reserve |
|
1,443 |
|
|
|
3,690 |
|
Income tax payable |
|
11,833 |
|
|
|
6,881 |
|
Deferred revenue |
|
151,343 |
|
|
|
178,922 |
|
Current portion of contingent consideration |
|
1,811 |
|
|
|
1,200 |
|
Current portion of debt |
|
34,382 |
|
|
|
38,691 |
|
Other current liabilities |
|
10,393 |
|
|
|
10,553 |
|
Total current liabilities |
|
470,585 |
|
|
|
465,262 |
|
|
|
|
|
Deferred income tax liabilities |
|
73,051 |
|
|
|
72,606 |
|
Contingent consideration, net of current portion |
|
6,914 |
|
|
|
7,387 |
|
Other long-term liabilities |
|
13,939 |
|
|
|
14,808 |
|
Long-term warranty |
|
4,469 |
|
|
|
1,786 |
|
Long-term debt, net of current portion |
|
705,827 |
|
|
|
720,352 |
|
Total liabilities |
|
1,274,785 |
|
|
|
1,282,201 |
|
Commitments and contingencies
(Note 12) |
|
|
|
Series A Redeemable Perpetual Preferred Stock of $0.001 par value -
500,000 authorized; 412,739 and 406,389 shares issued as of March
31, 2023 and December 31, 2022, respectively; liquidation
preference of $412.7 million and $406.4 million at respective
dates |
|
312,054 |
|
|
|
299,570 |
|
Stockholders’ equity |
|
|
|
Preferred stock of $0.001 par value - 4,500,000 shares authorized;
none issued at respective dates |
|
— |
|
|
|
— |
|
Common stock of $0.001 par
value - 1,000,000,000 shares authorized; 150,822,974 and
150,513,104 shares issued at respective dates |
|
150 |
|
|
|
150 |
|
Additional paid-in capital |
|
426,221 |
|
|
|
383,176 |
|
Accumulated deficit |
|
(241,338 |
) |
|
|
(267,470 |
) |
Accumulated other comprehensive income |
|
22,297 |
|
|
|
8,425 |
|
Total stockholders’
equity |
|
207,330 |
|
|
|
124,281 |
|
Total liabilities, redeemable
perpetual preferred stock and stockholders’ equity |
$ |
1,794,169 |
|
|
$ |
1,706,052 |
|
|
|
|
|
|
|
|
|
Array Technologies, Inc. and
Subsidiaries Consolidated Statements of Operations
(unaudited) (in thousands, except per share amounts)
|
Three Months EndedMarch 31, |
|
|
2023 |
|
|
|
2022 |
|
Revenue |
$ |
376,773 |
|
|
$ |
300,586 |
|
Cost of revenue |
|
275,594 |
|
|
|
273,999 |
|
Gross profit |
|
101,179 |
|
|
|
26,587 |
|
|
|
|
|
Operating
expenses |
|
|
|
General and
administrative |
|
38,142 |
|
|
|
45,425 |
|
Change in fair value of
contingent consideration |
|
1,338 |
|
|
|
(3,731 |
) |
Depreciation and
amortization |
|
14,241 |
|
|
|
23,237 |
|
Total operating expenses |
|
53,721 |
|
|
|
64,931 |
|
|
|
|
|
Income (loss) from
operations |
|
47,458 |
|
|
|
(38,344 |
) |
|
|
|
|
Other income
(expense) |
|
|
|
Other income, net |
|
194 |
|
|
|
743 |
|
Foreign currency gain
(loss) |
|
(194 |
) |
|
|
3,863 |
|
Change in fair value of
derivative assets |
|
(1,950 |
) |
|
|
— |
|
Interest expense |
|
(9,500 |
) |
|
|
(6,942 |
) |
Total other (expense) |
|
(11,450 |
) |
|
|
(2,336 |
) |
|
|
|
|
Income (loss) before income
tax (benefit) expense |
|
36,008 |
|
|
|
(40,680 |
) |
Income tax (benefit)
expense |
|
9,876 |
|
|
|
(14,743 |
) |
Net income
(loss) |
|
26,132 |
|
|
|
(25,937 |
) |
Preferred dividends and
accretion |
|
12,484 |
|
|
|
11,606 |
|
Net income (loss) to
common shareholders |
$ |
13,648 |
|
|
$ |
(37,543 |
) |
|
|
|
|
Income (loss) per common
share |
|
|
|
Basic |
$ |
0.09 |
|
|
$ |
(0.25 |
) |
Diluted |
$ |
0.09 |
|
|
$ |
(0.25 |
) |
Weighted average number of
common shares outstanding |
|
|
|
Basic |
|
150,607 |
|
|
|
148,288 |
|
Diluted |
|
151,795 |
|
|
|
148,288 |
|
|
|
|
|
|
|
|
|
Array Technologies, Inc. and
Subsidiaries Consolidated Statements of Cash Flows
(unaudited)(in thousands)
|
Three Months EndedMarch 31, |
|
|
2023 |
|
|
|
2022 |
|
Operating activities: |
|
|
|
Net income (loss) |
$ |
26,132 |
|
|
$ |
(25,937 |
) |
Adjustments to net income
(loss): |
|
|
|
Provision for bad debts |
|
233 |
|
|
|
145 |
|
Deferred tax expense |
|
4,555 |
|
|
|
4,349 |
|
Depreciation and amortization |
|
14,533 |
|
|
|
23,608 |
|
Amortization of debt discount and issuance costs |
|
2,826 |
|
|
|
1,710 |
|
Equity-based compensation |
|
3,366 |
|
|
|
4,508 |
|
Contingent consideration |
|
1,338 |
|
|
|
(3,731 |
) |
Warranty provision |
|
436 |
|
|
|
594 |
|
Write-down of inventories |
|
1,847 |
|
|
|
409 |
|
Change in fair value of derivative assets |
|
1,950 |
|
|
|
— |
|
Changes in operating assets and liabilities, net of business
acquisition |
|
|
|
Accounts receivable |
|
6,238 |
|
|
|
(44,268 |
) |
Inventories |
|
(23,312 |
) |
|
|
(46,250 |
) |
Income tax receivables |
|
369 |
|
|
|
(21,924 |
) |
Prepaid expenses and other |
|
(6,947 |
) |
|
|
11,558 |
|
Accounts payable |
|
30,155 |
|
|
|
59,419 |
|
Accrued expenses and other |
|
3,900 |
|
|
|
7,027 |
|
Income tax payable |
|
4,952 |
|
|
|
(8,760 |
) |
Lease liabilities |
|
824 |
|
|
|
6,085 |
|
Deferred revenue |
|
(27,579 |
) |
|
|
(18,639 |
) |
Net cash provided by (used in) operating activities |
|
45,816 |
|
|
|
(50,097 |
) |
Investing activities: |
|
|
|
Purchase of property, plant and equipment |
|
(3,883 |
) |
|
|
(2,357 |
) |
Acquisition of STI, net of cash acquired |
|
— |
|
|
|
(373,816 |
) |
Net cash used in investing activities |
|
(3,883 |
) |
|
|
(376,173 |
) |
Financing activities: |
|
|
|
Proceeds from Series A issuance |
|
— |
|
|
|
33,098 |
|
Proceeds from common stock issuance |
|
— |
|
|
|
15,885 |
|
Series A equity issuance costs |
|
(750 |
) |
|
|
(175 |
) |
Common stock issuance costs |
|
— |
|
|
|
(450 |
) |
Proceeds from revolving credit facility |
|
— |
|
|
|
52,000 |
|
Proceeds from issuance of other debt |
|
6,469 |
|
|
|
6,229 |
|
Principal payments on term loan facility |
|
(11,075 |
) |
|
|
(4,368 |
) |
Principal payments on other debt |
|
(17,206 |
) |
|
|
— |
|
Contingent consideration payments |
|
(1,200 |
) |
|
|
(1,483 |
) |
Net cash provided by (used in) financing activities |
|
(23,762 |
) |
|
|
100,736 |
|
Effect
of exchange rate changes on cash and cash equivalent balances |
|
(4,316 |
) |
|
|
7,355 |
|
Net
change in cash and cash equivalents |
|
13,855 |
|
|
|
(318,179 |
) |
Cash and
cash equivalents, beginning of period |
|
133,901 |
|
|
|
367,670 |
|
Cash and
cash equivalents, end of period |
$ |
147,756 |
|
|
$ |
49,491 |
|
|
|
|
|
Supplemental Cash Flow Information |
|
|
|
Cash paid for interest |
$ |
7,980 |
|
|
$ |
3,039 |
|
Cash paid for income taxes |
$ |
2,522 |
|
|
$ |
— |
|
|
|
|
|
Non-cash Investing and Financing Activities |
|
|
|
Dividends accrued on Series A Preferred |
$ |
6,350 |
|
|
$ |
6,189 |
|
Stock consideration paid for acquisition of STI |
$ |
— |
|
|
$ |
200,224 |
|
|
|
|
|
|
|
|
|
Array Technologies,
Inc.Adjusted EBITDA and Adjusted Net Income
Reconciliation (unaudited)(in thousands, except per share
amounts)
The following table reconciles net income (loss) to Adjusted
EBITDA:
|
Three Months EndedMarch 31, |
|
|
2023 |
|
|
|
2022 |
|
Net
income (loss) |
$ |
26,132 |
|
|
$ |
(25,937 |
) |
Preferred dividends and accretion |
|
12,484 |
|
|
|
11,606 |
|
Net
income (loss) to common shareholders |
$ |
13,648 |
|
|
$ |
(37,543 |
) |
Other expense, net |
|
(194 |
) |
|
|
(743 |
) |
Foreign currency (gain)
loss |
|
194 |
|
|
|
(3,863 |
) |
Preferred dividends and
accretion |
|
12,484 |
|
|
|
11,606 |
|
Interest expense |
|
9,500 |
|
|
|
6,942 |
|
Income
tax (benefit) expense |
|
9,876 |
|
|
|
(14,743 |
) |
Depreciation expense |
|
745 |
|
|
|
588 |
|
Amortization of intangibles |
|
13,788 |
|
|
|
23,138 |
|
Equity-based compensation |
|
3,340 |
|
|
|
4,508 |
|
Change
in fair value of derivative assets |
|
1,950 |
|
|
|
— |
|
Change
in fair value of contingent consideration |
|
1,338 |
|
|
|
(3,731 |
) |
Legal
expense(a) |
|
303 |
|
|
|
1,046 |
|
M&A(b) |
|
— |
|
|
|
11,183 |
|
Other
costs (c) |
|
— |
|
|
|
2,346 |
|
Adjusted EBITDA |
$ |
66,972 |
|
|
$ |
734 |
|
|
|
|
|
|
|
|
|
(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, and
(iii) other litigation/settlements. We consider these costs not
representative of legal costs that we will incur from time to time
in the ordinary course of our business.
(b) Represents fees
related to the acquisition of STI Norland.
(c) For the three
months ended March 31, 2022, other costs represent costs associated
with the transition of CEOs as well as other one-time payroll
related costs that we do not anticipate to repeat in the
future.
The following table reconciles net income (loss) to Adjusted Net
Income:
|
Three Months EndedMarch 31, |
|
|
2023 |
|
|
|
2022 |
|
Net
income (loss) |
$ |
26,132 |
|
|
$ |
(25,937 |
) |
Preferred dividends and accretion |
|
12,484 |
|
|
|
11,606 |
|
Net
income (loss) to common shareholders |
$ |
13,648 |
|
|
$ |
(37,543 |
) |
Amortization of intangibles |
|
13,788 |
|
|
|
23,138 |
|
Amortization of debt discount and issuance costs |
|
2,826 |
|
|
|
1,710 |
|
Preferred accretion |
|
6,135 |
|
|
|
5,353 |
|
Equity
based compensation |
|
3,340 |
|
|
|
4,508 |
|
Change
in fair value of derivative assets |
|
1,950 |
|
|
|
— |
|
Change
in fair value of contingent consideration |
|
1,338 |
|
|
|
(3,731 |
) |
Legal
expense(a) |
|
303 |
|
|
|
1,046 |
|
M&A
(b) |
|
— |
|
|
|
11,183 |
|
Other
costs(c) |
|
— |
|
|
|
2,346 |
|
Income
tax expense of adjustments(d) |
|
(6,044 |
) |
|
|
(7,551 |
) |
Adjusted Net Income |
$ |
37,284 |
|
|
$ |
459 |
|
|
|
|
|
Income (loss) per common
share |
|
|
|
Basic |
$ |
0.09 |
|
|
$ |
(0.25 |
) |
Diluted |
$ |
0.09 |
|
|
$ |
(0.25 |
) |
Weighted average number of
common shares outstanding |
|
|
|
Basic |
|
150,607 |
|
|
|
148,288 |
|
Diluted |
|
151,795 |
|
|
|
148,288 |
|
Adjusted
net income (loss) per common share |
|
|
|
Basic |
$ |
0.25 |
|
|
$ |
— |
|
Diluted |
$ |
0.25 |
|
|
$ |
— |
|
Weighted
average number of common shares outstanding |
|
|
|
Basic |
|
150,607 |
|
|
|
148,288 |
|
Diluted |
|
151,795 |
|
|
|
148,288 |
|
|
|
|
|
|
|
|
|
(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, and
(iii) other litigation/settlements. We consider these costs not
representative of legal costs that we will incur from time to time
in the ordinary course of our business.
(b) Represents fees
related to the acquisition of STI Norland.
(c) For the three
months ended March 31, 2022, other costs represent costs associated
with the transition of CEOs as well as other one-time payroll
related costs that we do not anticipate to repeat in the
future.
(d) Represents the
estimated tax impact of all Adjusted Net Income add-backs,
excluding those which represent permanent differences between book
versus tax.
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