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.
Array Technologies, Inc, one of the world’s largest manufacturers of ground-mounted systems used in solar energy projects, announced financial results for its second quarter ended June 30, 2021 and full year 2021 guidance.
Array Technologies Chief Executive Officer Jim Fusaro said the company delivered strong financial results in the second quarter, despite a challenging supply chain environment.
“Revenues grew 76% year-over-year to $202.8 million reflecting continued strong demand for our products. Adjusted EBITDA grew 23% to $16.2 million compared to the same period last year. Our lower margins this quarter relative to last year reflect the higher input and logistics costs that continue to be a headwind for our industry” said Jim Fusaro.
Jim Fusaro continued saying he is pleased to report that given the hard work of the team to negotiate with customers and suppliers over the past several months, the company is now able to reintroduce guidance for the full year.
“More importantly, we have changed our business processes to reduce our exposure to future increases in commodity prices and shipping costs. That hard work and those changes are reflected in the profitability of the orders we have booked since May which have gross margins in line with what we generated last year. I am confident we are on a path to restore our gross margin to historical levels, but the improvement will be gradual as we still have legacy backlog at lower prices to burn off,” said Jim Fusaro.
He also said the company remains bullish on the long-term prospects for utility-scale solar and for Array. “The transition to renewable energy is only accelerating, we have more executed contracts and awarded orders than at any time in our history and we have taken the steps that were necessary to adapt our business to the current inflationary environment,” he said.
“I am confident that those changes, in combination with our relentless focus on supporting our customers, will see our company emerge even stronger from the current environment than we were before,” he said.
Second Quarter 2021 Financial Results
Revenues increased 76% to $202.8 million compared to $114.9 million for the prior-year period, primarily driven by strong demand for our products as well as favorable comparisons to the second quarter of last year which had lower shipments as a result of the pull forward of orders into the first quarter of 2020 related to the ITC step down.
Gross profit increased 21% to $26.8 million compared to $22.2 million in the prior year period, driven primarily by higher volume in the quarter. Gross margin decreased from 19.3% to 13.2%, driven by significantly higher input and freight costs, partially offset by greater absorption of fixed costs as a result of higher sales volumes when compared to the prior year period.
Operating expenses increased to $21.1 million compared to $21.0 million during the same period in the prior year, primarily as a result of higher costs associated with being a public company and increased payroll related costs due to higher headcount which was offset by lower contingent consideration expense.
Net loss was $17 thousand compared to net income of $2.4 million during the same period in the prior year, and basic and diluted income per share were $0.00 compared to basic and diluted earnings per share of $0.02 during the same period in the prior year.
Adjusted EBITDA increased 23% to $16.2 million, compared to $13.1 million for the prior-year period. Adjusted net income increased 19% to $8.5 million compared to $7.1 million during the same period in the prior year, and adjusted basic and diluted adjusted net income per share was $0.07 compared to $0.06 during the same period in the prior year.
Executed Contracts and Awarded Orders Total executed contracts and awarded orders at June 30, 2021 was $882 million, representing a record level for the company.
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 requirementsChanged 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 in July 2021
Strengthened our executive team with the additions of Erica Brinker as our Chief Marketing Officer, Tyson Hottinger as our new Chief Legal Officer, and Ken 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 by Blackstone Energy Partners to support our internal and external growth plansFull Year 2021 Guidance
For the full year 2021 ending December 31, 2021, the Company expects:
Revenues to be in the range of $850 million to $940 millionAdjusted 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 Nipul Patel, Chief Financial Officer of Array Technologies.