Cover Page
Cover Page - shares | 6 Months Ended | |
Jun. 30, 2022 | Aug. 08, 2022 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Jun. 30, 2022 | |
Document Transition Report | false | |
Entity File Number | 001-39613 | |
Entity Registrant Name | ARRAY TECHNOLOGIES, INC. | |
Entity Central Index Key | 0001820721 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2022 | |
Document Fiscal Period Focus | Q2 | |
Amendment Flag | false | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 83-2747826 | |
Entity Address, Address Line One | 3901 Midway Place NE | |
Entity Address, City or Town | Albuquerque | |
Entity Address, State or Province | NM | |
Entity Address, Postal Zip Code | 87109 | |
City Area Code | (505) | |
Local Phone Number | 881-7567 | |
Title of 12(b) Security | Common stock, $0.001 par value | |
Trading Symbol | ARRY | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock Shares Outstanding | 150,326,317 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (unaudited) - USD ($) $ in Thousands | Jun. 30, 2022 | Dec. 31, 2021 |
Current assets | ||
Cash and cash equivalents | $ 51,046 | $ 367,670 |
Accounts receivable, net | 457,900 | 236,009 |
Inventories, net | 329,951 | 205,653 |
Income tax receivables | 16,217 | 9,052 |
Prepaid expenses and other | 52,831 | 33,649 |
Total current assets | 907,945 | 852,033 |
Property, plant and equipment, net | 17,802 | 10,692 |
Goodwill | 378,706 | 69,727 |
Other intangible assets, net | 421,862 | 174,753 |
Deferred tax assets | 18,521 | 9,345 |
Other assets | 30,573 | 26,429 |
Total assets | 1,775,409 | 1,142,979 |
Current liabilities | ||
Accounts payable | 231,798 | 91,392 |
Accounts payable - related party | 478 | 610 |
Accrued expenses and other | 51,072 | 38,494 |
Accrued warranty reserve | 2,911 | 3,192 |
Income tax payable | 3,034 | 60 |
Deferred revenue | 167,556 | 99,575 |
Current portion of contingent consideration | 0 | 1,773 |
Current portion of debt | 51,494 | 4,300 |
Other current liabilities | 6,949 | 5,909 |
Total current liabilities | 515,292 | 245,305 |
Long-term liabilities | ||
Deferred tax liability | 84,819 | 0 |
Contingent consideration, net of current portion | 7,686 | 12,804 |
Other long-term liabilities | 9,723 | 5,557 |
Long-term warranty | 4,056 | 0 |
Long-term debt, net of current portion | 793,557 | 711,056 |
Total long-term liabilities | 899,841 | 729,417 |
Total liabilities | 1,415,133 | 974,722 |
Commitments and contingencies (Note 16) | ||
Series A Redeemable Perpetual Preferred Stock of $0.001 par value - 500,000 authorized; 412,606 and 350,000 shares issued as of June 30, 2022 and December 31, 2021, respectively; liquidation preference of $413.0 million and $350.0 million as of June 30, 2022 and December 31, 2021, respectively | 293,974 | 237,462 |
Stockholders’ equity (deficit) | ||
Preferred stock of $0.001 par value - 4,500,000 shares authorized; none issued as of June 30, 2022 and December 31, 2021 | 0 | 0 |
Common stock of $0.001 par value - 1,000,000,000 shares authorized; 150,279,160 and 135,026,940 shares issued as of June 30, 2022 and December 31, 2021, respectively | 150 | 135 |
Additional paid-in capital | 401,614 | 202,562 |
Accumulated deficit | (296,733) | (271,902) |
Accumulated other comprehensive income | (38,729) | 0 |
Total stockholders’ equity (deficit) | 66,302 | (69,205) |
Total liabilities, redeemable perpetual preferred stock and stockholders’ equity | $ 1,775,409 | $ 1,142,979 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (unaudited) - (Parenthetical) - USD ($) | Jun. 30, 2022 | Dec. 31, 2021 |
Statement of Financial Position [Abstract] | ||
Temporary equity, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Authorized temporary equity stock (in shares) | 500,000 | 500,000 |
Temporary equity, shares issued | 412,606 | 350,000 |
Temporary equity, liquidation preference | $ 413,000,000 | $ 350,000,000 |
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Authorized preferred stock (in shares ) | 4,500,000 | 4,500,000 |
Preferred stock, shares issued | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Authorized common stock (in shares) | 1,000,000,000 | 1,000,000,000 |
Common stock, shares issued | 150,279,160 | 135,026,940 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (unaudited) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Income Statement [Abstract] | ||||
Revenue | $ 424,929 | $ 196,516 | $ 725,515 | $ 444,756 |
Cost of revenue | 377,553 | 176,009 | 651,552 | 378,083 |
Gross profit | 47,376 | 20,507 | 73,963 | 66,673 |
Operating expenses | ||||
General and administrative | 31,509 | 15,113 | 71,336 | 39,786 |
Contingent consideration | (1,678) | (13) | (5,409) | 135 |
Depreciation and amortization | 24,389 | 5,981 | 47,041 | 11,965 |
Total operating expenses | 54,220 | 21,081 | 112,968 | 51,886 |
Income (loss) from operations | (6,844) | (574) | (39,005) | 14,787 |
Other expense | ||||
Other income (expense), net | (371) | (122) | 372 | (200) |
Foreign currency gain (loss) | (1,736) | 0 | 2,127 | 0 |
Interest expense | (8,021) | (6,651) | (14,963) | (15,660) |
Total other expense | (10,128) | (6,773) | (12,464) | (15,860) |
Loss before income tax benefit | (16,972) | (7,347) | (51,469) | (1,073) |
Income tax benefit | (14,195) | (1,830) | (26,638) | (132) |
Net loss | (2,777) | (5,517) | (24,831) | (941) |
Preferred dividends and accretion | 12,182 | 0 | 23,788 | 0 |
Net loss to common shareholders | $ (14,959) | $ (5,517) | $ (48,619) | $ (941) |
Loss per common share | ||||
Basic (in dollars per share) | $ (0.10) | $ (0.04) | $ (0.33) | $ (0.01) |
Diluted (in dollars per share) | $ (0.10) | $ (0.04) | $ (0.33) | $ (0.01) |
Weighted average number of common shares | ||||
Basic (in shares) | 150,203 | 126,994 | 149,246 | 126,994 |
Diluted (in shares) | 150,203 | 126,994 | 149,246 | 126,994 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive Income (Loss) (unaudited) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Statement of Comprehensive Income [Abstract] | ||||
Net loss | $ (2,777) | $ (5,517) | $ (24,831) | $ (941) |
Other Comprehensive Income (Loss), Net of Tax, Portion Attributable to Parent [Abstract] | ||||
Change in foreign currency translation adjustments | (29,718) | 0 | (38,729) | 0 |
Comprehensive loss | $ (32,495) | $ (5,517) | $ (63,560) | $ (941) |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Changes in Redeemable Perpetual Preferred Stock and Stockholders’ Deficit (unaudited) - USD ($) shares in Thousands, $ in Thousands | Total | Series A Preferred Stock | Common Stock | Common Stock Series A Preferred Stock | Additional Paid-In Capital | Additional Paid-In Capital Series A Preferred Stock | Accumulated Deficit | Accumulated Other Comprehensive Loss |
Beginning shares balance (in shares) at Dec. 31, 2020 | 126,994 | |||||||
Stockholders' equity beginning balance at Dec. 31, 2020 | $ (80,899) | $ 127 | $ 140,473 | $ (221,499) | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Equity-based compensation | 9,420 | 9,420 | ||||||
Net loss | (941) | (941) | ||||||
Ending shares balance (in shares) at Jun. 30, 2021 | 126,994 | |||||||
Stockholders' equity ending balance at Jun. 30, 2021 | (72,420) | $ 127 | 149,893 | (222,440) | ||||
Beginning shares balance (in shares) at Mar. 31, 2021 | 126,994 | |||||||
Stockholders' equity beginning balance at Mar. 31, 2021 | (68,426) | $ 127 | 148,370 | (216,923) | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Equity-based compensation | 1,523 | 1,523 | ||||||
Net loss | (5,517) | (5,517) | ||||||
Ending shares balance (in shares) at Jun. 30, 2021 | 126,994 | |||||||
Stockholders' equity ending balance at Jun. 30, 2021 | $ (72,420) | $ 127 | 149,893 | (222,440) | ||||
Beginning temporary equity shares balance (in shares) at Dec. 31, 2021 | 350 | |||||||
Temporary equity, beginning balance at Dec. 31, 2021 | $ 237,462 | |||||||
Increase (Decrease) in Temporary Equity [Roll Forward] | ||||||||
Issuance of Series A Redeemable Perpetual Preferred Stock, net of fees (in shares) | 50 | |||||||
Issuance of Series A Redeemable Perpetual Preferred Stock, net of fees | $ 32,724 | |||||||
Preferred cumulative dividends plus accretion (in shares) | 13 | |||||||
Preferred cumulative dividends plus accretion | $ 23,788 | |||||||
Ending temporary equity shares balance (in shares) at Jun. 30, 2022 | 413 | |||||||
Temporary equity, ending balance at Jun. 30, 2022 | $ 293,974 | |||||||
Beginning shares balance (in shares) at Dec. 31, 2021 | 135,027 | |||||||
Stockholders' equity beginning balance at Dec. 31, 2021 | (69,205) | $ 135 | 202,562 | (271,902) | $ 0 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Equity-based compensation (in shares) | 105 | |||||||
Equity-based compensation | 7,357 | 7,357 | ||||||
Issuance of Series A Redeemable Perpetual Preferred Stock, net of fees (in shares) | 15,252 | |||||||
Issuance of Series A Redeemable Perpetual Preferred Stock, net of fees | $ 215,498 | $ 15 | $ 215,483 | |||||
Issuance of common stock, net (in shares) | 15,252 | |||||||
Preferred cumulative dividends plus accretion | (23,788) | (23,788) | ||||||
Net loss | (24,831) | (24,831) | ||||||
Other comprehensive income | (38,729) | (38,729) | ||||||
Ending shares balance (in shares) at Jun. 30, 2022 | 150,279 | |||||||
Stockholders' equity ending balance at Jun. 30, 2022 | $ 66,302 | $ 150 | 401,614 | (296,733) | (38,729) | |||
Beginning temporary equity shares balance (in shares) at Mar. 31, 2022 | 400 | |||||||
Temporary equity, beginning balance at Mar. 31, 2022 | $ 281,792 | |||||||
Increase (Decrease) in Temporary Equity [Roll Forward] | ||||||||
Preferred cumulative dividends plus accretion | $ 12,182 | |||||||
Ending temporary equity shares balance (in shares) at Jun. 30, 2022 | 413 | |||||||
Temporary equity, ending balance at Jun. 30, 2022 | $ 293,974 | |||||||
Beginning shares balance (in shares) at Mar. 31, 2022 | 150,174 | |||||||
Stockholders' equity beginning balance at Mar. 31, 2022 | 108,415 | $ 150 | 411,232 | (293,956) | (9,011) | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Equity-based compensation | 2,944 | 2,944 | ||||||
Issuance of Series A Redeemable Perpetual Preferred Stock, net of fees | $ (380) | $ (380) | ||||||
Preferred cumulative dividends plus accretion | (12,182) | (12,182) | ||||||
Net loss | (2,777) | (2,777) | ||||||
Other comprehensive income | (29,718) | (29,718) | ||||||
Ending shares balance (in shares) at Jun. 30, 2022 | 150,279 | |||||||
Stockholders' equity ending balance at Jun. 30, 2022 | $ 66,302 | $ 150 | $ 401,614 | $ (296,733) | $ (38,729) |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Cash Flows (unaudited) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2021 | |
Statement of Cash Flows [Abstract] | ||
Net loss | $ (24,831) | $ (941) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Provision for (recovery of) bad debts | 510 | (551) |
Deferred tax expense | (19,984) | (538) |
Depreciation and amortization | 47,579 | 12,964 |
Amortization of debt discount and issuance costs | 3,286 | 5,118 |
Equity-based compensation | 7,472 | 9,467 |
Contingent consideration | (5,409) | 135 |
Warranty provision | 1,215 | 425 |
Provision for inventory obsolescence | 409 | 1,236 |
Changes in operating assets and liabilities, net of business acquisition | ||
Accounts receivable | (111,612) | (30,393) |
Inventories | (77,191) | (20,443) |
Income tax receivables | (7,062) | 9,236 |
Prepaid expenses and other | (376) | 826 |
Accounts payable | 74,645 | (1,378) |
Accounts payable - related party | (132) | (1,622) |
Accrued expenses and other | 3,356 | (10,541) |
Income tax payable | (4,602) | (8,814) |
Lease liabilities | 4,700 | 68 |
Deferred revenue | 47,263 | (98,363) |
Net cash used in operating activities | (60,764) | (134,109) |
Cash flows from investing activities | ||
Purchase of property, plant and equipment | (3,895) | (1,200) |
Acquisition of STI, net of cash acquired | (373,818) | 0 |
Investment in equity security | 0 | (11,975) |
Net cash used in investing activities | (377,713) | (13,175) |
Cash flows from financing activities | ||
Proceeds from Series A issuance | 33,098 | 0 |
Proceeds from common stock issuance | 15,885 | 0 |
Series A equity issuance costs | (575) | 0 |
Common stock issuance costs | (450) | 0 |
Payments on revolving credit facility | (33,000) | 0 |
Proceeds from issuance of other debt | 30,599 | 0 |
Proceeds from revolving credit facility | 101,000 | 102,000 |
Principal payments on debt | (22,377) | (31,075) |
Contingent consideration | (1,483) | (7,810) |
Debt issuance costs | 0 | (6,590) |
Net cash provided by financing activities | 122,697 | 56,525 |
Effect of exchange rate changes on cash and cash equivalent balances | (844) | 0 |
Net change in cash and cash equivalents | (316,624) | (90,759) |
Cash and cash equivalents, beginning of period | 367,670 | 108,441 |
Cash and cash equivalents, end of period | 51,046 | 17,682 |
Supplemental Cash Flow Information | ||
Stock consideration paid for acquisition of STI | $ 200,224 | $ 0 |
Organization and Business
Organization and Business | 6 Months Ended |
Jun. 30, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Business | Organization and Business Array Technologies, Inc. (the “Company”), formerly ATI Intermediate Holdings, LLC, is a Delaware corporation formed in December 2018 as a wholly owned subsidiary of ATI Investment Parent, LLC (“Former Parent”). On October 14, 2020, the Company converted from a Delaware limited liability company to a Delaware corporation and changed the Company’s name to Array Technologies, Inc. The Company is headquartered in Albuquerque, New Mexico, and manufactures and supplies solar tracking systems and related products for customers across the United States and internationally. The Company, through its wholly-owned subsidiary, ATI Investment Sub, Inc. (“ATI Investment”) owns subsidiaries through which it conducts substantially all operations. Acquisition of STI On January 11, 2022 (the “Acquisition Date”), the Company acquired 100% of the share capital of Soluciones Técnicas Integrales Norland, S.L.U., a Spanish private limited liability Company, and its subsidiaries (collectively, “STI”) with cash and common stock of the Company (the “STI Acquisition”). The STI Acquisition was accounted for as a business combination. See Note 3 – Acquisition of STI . |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2022 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Basis of Accounting and Presentation The accompanying unaudited condensed consolidated financial statements have been prepared on the accrual basis of accounting in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”), pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). The unaudited interim financial statements have been prepared on the same basis as the audited annual financial statements and, in the opinion of management, reflect all adjustments, which include only normal recurring adjustments, necessary for the fair statement of results for the interim periods reported. The results for the three and six months ended June 30, 2022 are not necessarily indicative of results to be expected for the year ending December 31, 2022 or any other interim periods, or any future year or period. The balance sheet as of December 31, 2021 included herein was derived from the audited financial statements as of that date. Certain disclosures have been condensed or omitted from the interim financial statements. These financial statements should be read in conjunction with the Company’s audited financial statements included in the Company’s Annual Report on Form 10-K filed with the SEC on April 6, 2022, as amended by the Form 10-K/A filed with the SEC on April 6, 2022 (the “2021 Annual Report”). Principles of Consolidation The condensed consolidated financial statements include the accounts of Array Technologies, Inc. and its subsidiaries. All intercompany accounts and transactions have been eliminated upon consolidation. Use of Estimates The preparation of condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. Significant estimates include evaluation for any impairment of goodwill, impairment of long-lived assets, fair value of contingent consideration, Series A Redeemable Perpetual Preferred Stock and the related future tranche, allowance for credit losses, reserve for excess or obsolete inventories, valuation of deferred tax assets and warranty reserve. Actual results may differ from previously estimated amounts, and such differences may be material to the condensed consolidated financial statements; however, management believes that these estimates and assumptions provide a reasonable basis for the fair presentation of the consolidated financial statements. Estimates and assumptions are reviewed periodically, and the effects of revisions are reflected in the period they occur. Impact of COVID-19 Pandemic In December 2019, a novel strain of coronavirus, SARS-CoV-2, which causes coronavirus disease 2019 (“COVID-19”), surfaced in Wuhan, China. Since then, COVID-19 has spread to multiple countries, including the United States. On March 11, 2020, the World Health Organization declared COVID-19 a pandemic. Due to economic conditions, the Company’s industry has seen rapid commodity price increases and strained logistics, causing the Company to experience decreased margins and thus decreased cash from operations which has adversely impacted the Company’s business. In addition, due to global tightening of supply chain and strained logistics issues the Company has experienced an increase in unbilled revenues and in some instances incurred liquidated damages. The Company has taken, and continues to take, mitigating steps to overcome the economic challenges and, therefore, believes the impact to be temporary, but cannot be certain the timing of when it will achieve better margins. The extent to which the COVID-19 pandemic and recent supply chain constraints and price increases may further impact the Company’s business, results of operations, financial condition and cash flows will depend on future developments, which are highly uncertain and cannot be predicted with confidence. The Company believes it has sufficient liquidity and financing options available and expects to have sufficient liquidity to operate for the next 12 months. The Company expects to use cash generated from operations and if needed, can access funds from the Revolving Credit Facility (as defined below). The Company also has $100 million in delayed draw ability under the Series A Redeemable Perpetual Preferred Stock (as defined below) future draw commitment; however, such a draw would increase the Company’s dividend obligations and outstanding common stock and failure to draw the delayed commitments will result in interest expense payable by the company. See Note 13 – Redeemable Perpetual Preferred . The Revolving Credit Facility has $96.7 million of availability; however, the Company may have limited ability to draw on the funds due to existing debt covenants. Impact of the Ongoing Conflict in Ukraine The ongoing conflict in Ukraine has reduced the availability of material that can be sourced in Europe and, as a result, increased logistics costs for the procurement of certain inputs and materials used in our products. We do not know ultimate severity or duration of the conflict in Ukraine, but we are continuously monitoring the situation and evaluating our procurement strategy and supply chain as to reduce any negative impact on our business, financial condition and results of operations. Inflation The Company could see an impact from inflationary pressures. Inflation has continued to accelerate in the wake of Russia’s invasion of Ukraine, driving up energy prices, freight premiums, and other operating costs. Interest rates, notably mature market government bond yields, remain low by historical standards but are rising as central banks around the world tighten monetary policy in response to inflation pressures, while government deficits and debt remain at high levels in many major markets. The eventual implications of higher government deficits and debt, tighter monetary policy, and potentially higher long-term interest rates may drive a higher cost of capital during our forecast period. Business Combinations The Company accounts for its business acquisitions under the acquisition method of accounting in accordance with the Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification (“ASC”) Topic 805 Business Combinations (“ASC 805”). The excess of the purchase price over the estimated fair values of the net assets acquired is recorded as goodwill. Determining the fair value of assets acquired and liabilities assumed requires management’s judgment and often involves the use of significant estimates and assumptions, including assumptions with respect to future cash inflows and outflows, discount rates, asset lives, and market multiples, amongst other items. Foreign Currency Translation For non-U.S. subsidiaries that operate in a local currency environment, assets and liabilities are translated into the U.S. dollar at period end exchange rates. Income, expense and cash flow items are translated at average exchange rates prevailing during the period. Translation adjustments for these subsidiaries are accumulated as a separate component of accumulated other comprehensive income in equity. For non-U.S. subsidiaries that use a U.S. dollar functional currency, local currency inventories and property, plant and equipment are translated into U.S. dollars at rates prevailing when acquired, and all other assets and liabilities are translated at period end exchange rates. Inventories charged to cost of sales and depreciation are remeasured at historical rates, and all other income and expense items are translated at average exchange rates prevailing during the period. Gains and losses which result from remeasurement are included in earnings. Recent Accounting Pronouncements Adopted In October 2021, the FASB issued ASU No. 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers (“ ASU 2021-08”). ASU 2021-08 requires the company acquiring contract assets and contract liabilities obtained in a business combination to recognize and measure them in accordance with ASC Topic 606, Revenue from Contracts with Customers (“ ASC 606”). At the acquisition date, the company acquiring the business should record related revenue, as if it had originated the contract. Before the recent update, such amounts were recognized by the acquiring company at fair value. The amendments in this update are effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. Early adoption is permitted, including in interim periods, for any financial statements that have not yet been issued. The Company early adopted ASU 2021-08 as of January 1, 2022. See Note 3 – Acquisition of STI for further information and disclosures related to the STI Acquisition. The standard was applied to the acquisition accounting for STI. A review of the deferred revenue of |
Acquisition of STI
Acquisition of STI | 6 Months Ended |
Jun. 30, 2022 | |
Business Combination and Asset Acquisition [Abstract] | |
Acquisition of STI | Acquisition of STI On the Acquisition Date, the Company completed the STI Acquisition pursuant to the purchase agreement, dated November 10, 2021, by and among Amixa Capital, S.L. and Aurica Trackers, S.L., each a company duly organized under the laws of the Kingdom of Spain (together, the “Sellers”) and Mr. Javier Reclusa Etayo (the “STI Purchase Agreement”). The STI Acquisition was funded primarily with borrowings from the Convertible Notes (as defined below) and the issuance of Series A redeemable perpetual preferred stock of the Company, par value $0.001 per share (the “Series A Redeemable Perpetual Preferred Stock”). The STI Acquisition provided the Company with an immediate presence in Brazil, Western Europe and South Africa. Transaction expenses incurred in connection with the acquisition are $5.6 million recorded in the General and administrative line item on the condensed consolidated statement of operations for the six months ended June 30, 2022. In accordance with the STI Purchase Agreement, the Company paid closing consideration to the Sellers consisting of $410.5 million in cash and 13,894,800 shares of the Company’s common stock. The fair value of the purchase consideration was $610.8 million and resulted in the Company owning 100% of the interests in STI. The Company has performed a valuation of the acquisition assets and liabilities and determined the related accounting impact. The purchase price consideration to acquire STI consisted of the following (in thousands): Cash consideration for STI $ 409,647 Cash consideration for transaction expenses of STI 896 Total cash consideration 410,543 Non-cash equity consideration 200,224 Total consideration transferred 610,767 Total purchase price consideration $ 610,767 The STI Acquisition was accounted for as a business combination applying ASC 805. The equity consideration transferred consisted of the Company’s common stock and was measured at fair value based on the closing stock price on the Acquisition Date. The purchase price was allocated to the assets acquired and liabilities assumed based on management’s estimate of the respective fair values at the Acquisition Date. Goodwill was calculated as the excess of the consideration transferred over the net assets recognized and represents the estimated future economic benefits arising from other assets acquired that could not be individually identified and separately recognized. The factors contributing to the recognition of goodwill were the expected synergies of the combined entities that are expected to be realized from the STI Acquisition. None of the goodwill is expected to be deductible for income tax purposes. The following table summarizes the preliminary estimates of fair values of the assets acquired and liabilities assumed as of the Acquisition Date (in thousands): Preliminary Fair Value of Net Assets Acquired and Liabilities Assumed: Acquisition Date Measurement Adjustment June 30, 2022 Cash and cash equivalents $ 36,725 $ — $ 36,725 Accounts receivable 110,789 — 110,789 Inventories 47,517 — 47,517 Prepaid expenses and other 23,399 — 23,399 Property, plant and equipment 4,434 — 4,434 Other intangible assets 318,365 — 318,365 Other assets 325 — 325 Total assets acquired $ 541,554 $ — $ 541,554 Accounts payable 65,761 — 65,761 Deferred revenue 20,345 — 20,345 Short-term debt 44,338 — 44,338 Other liabilities 10,115 — 10,115 Income tax payable 7,576 — 7,576 Deferred tax liability 93,823 7,611 101,434 Other long-term liabilities 4,524 — 4,524 Long-term debt 12,053 — 12,053 Total liabilities assumed $ 258,535 $ 7,611 $ 266,146 Preliminary fair value of net assets acquired 283,019 275,408 Preliminary allocation to goodwill $ 327,748 $ 335,359 The preliminary purchase price allocation was based upon a preliminary valuation, and the Company’s estimates and assumptions are subject to change within the measurement period (defined as the twelve months following the Acquisition Date). The primary areas of the preliminary purchase price allocation that are not yet finalized relate to the valuation of identifiable intangible assets acquired, the fair value of certain tangible assets acquired and liabilities assumed as well as the tax impact. The Company expects to continue to obtain information for the purpose of determining the fair value of the assets acquired and liabilities assumed on the Acquisition Date throughout the remainder of the measurement period. The purchase price allocation is subject to further adjustment until all pertinent information regarding the assets acquired is fully evaluated by the Company, including but not limited to, the fair value accounting. For assets and liabilities excluded from the scope of the intangible asset and property, plant and equipment valuation, the Company considered net book value to be a reasonable proxy as of the acquisition close date. The preliminary purchase price allocation includes $318.4 million of acquired identifiable intangible assets. Estimated Fair Value Estimated Weighted Average Useful Life in Years (in thousands, except useful lives) Backlog $ 51,165 1 Customer relationships 238,770 10 Trade name 28,430 20 Total $ 318,365 The preliminary fair value of the identifiable intangible assets has been estimated using the Excess Earnings Method (customer relationships and backlog) and Relief from Royalty Method (trade name). Significant inputs using the Excess Earnings Method include estimated revenue, expenses based on actuals and forecast, and a discount rate based on a weighted average cost of capital for customer relationships of 15% for Spain, 16.5% for Brazil and 14.0% for Spain foreign sourced projects and for order backlog of 8.5% for Spain, 9.5% for Brazil and 7.5% for Spain foreign sourced projects. Significant inputs to the Relief from Royalty method model include estimates of future revenue, economic life, estimated royalty rate of 1.25%, and a discount rate based on a weighted average cost of capital 15.2%. The intangible assets are being amortized over their estimated useful lives on a straight-line basis that reflects the economic benefit of the asset. The determination of the useful lives is based upon various industry studies, historical acquisition experience, economic factors, and future forecasted cash flows of the Company following the STI Acquisition. The amounts of revenue and net loss of STI included in the Company’s consolidated statement of operations from the Acquisition Date through June 30, 2022 are $122.6 million and $10.9 million, respectively. Pro Forma Financial Information (Unaudited) The following unaudited pro forma financial information presents the combined results of operations of the Company and STI as if the acquisition had occurred on January 1, 2021, after giving effect to certain unaudited pro forma adjustments. The unaudited pro forma adjustments reflected herein include only those adjustments that are directly attributable to the STI Acquisition including amortization of intangibles, debt financing expenses and tax benefits. The unaudited pro forma financial information does not reflect any adjustments for anticipated expense savings resulting from the STI Acquisition and is not necessarily indicative of the operating results that would have actually occurred had the STI Acquisition been consummated on January 1, 2021. Three Months Ended Six Months Ended (in millions) 2022 2021 2022 2021 Revenue $ 424.9 $ 263.1 $ 733.4 $ 536.9 Net income (loss) $ (2.8) $ 5.0 $ (23.9) $ (7.3) |
Accounts Receivable
Accounts Receivable | 6 Months Ended |
Jun. 30, 2022 | |
Receivables [Abstract] | |
Accounts Receivable | Accounts Receivable Accounts receivable consists of the following (in thousands): June 30, 2022 December 31, 2021 Accounts receivable $ 458,438 $ 236,149 Less: allowance for doubtful accounts (538) (140) Accounts receivable, net $ 457,900 $ 236,009 |
Inventories
Inventories | 6 Months Ended |
Jun. 30, 2022 | |
Inventory Disclosure [Abstract] | |
Inventories | Inventories Inventories consist of the following (in thousands): June 30, 2022 December 31, 2021 Raw materials $ 195,600 $ 85,470 Finished goods 142,402 127,598 Reserve for excess or obsolete inventory (8,051) (7,415) Total $ 329,951 $ 205,653 |
Property, Plant, and Equipment
Property, Plant, and Equipment | 6 Months Ended |
Jun. 30, 2022 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant and Equipment | Property, Plant and Equipment Property, plant and equipment consisted of the following (in thousands, except useful lives): Estimated Useful Lives (Years) June 30, 2022 December 31, 2021 Land N/A $ 1,550 $ 1,340 Buildings and land improvements 15-39 6,433 2,451 Manufacturing equipment 7 17,265 13,924 Furniture, fixtures and equipment 5-7 1,405 476 Vehicles 5 266 161 Hardware and software 3-5 2,305 1,683 Assets in progress 1,263 1,880 Total 30,487 21,915 Less: accumulated depreciation (12,685) (11,223) Property, plant and equipment, net $ 17,802 $ 10,692 Depreciation expense was $0.6 million and $0.6 million for the three months ended June 30, 2022 and 2021, respectively, of which $0.4 million and $0.5 million, respectively, was allocated to cost of revenue and $0.2 million and $0.1 million, respectively, was included in depreciation and amortization in the accompanying condensed consolidated statements of operations for the three months ended June 30, 2022 and 2021. |
Goodwill and Other Intangible A
Goodwill and Other Intangible Assets | 6 Months Ended |
Jun. 30, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Other Intangible Assets | Goodwill and Other Intangible Assets Goodwill Prior to the STI Acquisition, goodwill, related to Former Parent’s acquisition of the Company, was recorded as $121.6 million and was subsequently impaired. Total accumulated impairment as of June 30, 2022 was $51.9 million. With the STI Acquisition in January 2022, the Company recorded an additional $335.4 million of goodwill as a result of the STI acquisition and the Company’s reporting units became Array Legacy Operations and the newly acquired STI Operations, which had goodwill of $69.7 million and $309.0 million, respectively, at June 30, 2022 and $69.7 million and zero, respectively, at December 31, 2021. Goodwill is not deductible for tax purposes. Changes in the carrying amount of goodwill by operating segment during the six months ended June 30, 2022 are shown below (in thousands): Array Legacy Operations Segment STI Operations Segment Total Beginning Balance $ 69,727 $ — $ 69,727 Acquisition of STI — 335,359 $ 335,359 Foreign currency impact — (26,380) $ (26,380) Ending Balance $ 69,727 $ 308,979 $ 378,706 Each quarter the Company evaluates if facts and circumstances indicate that it is more-likely-than-not that the fair value of its reporting units is less than their carrying value, which would require the Company to perform an interim goodwill impairment test. During the quarter ended March 31, 2022, the Company determined it was necessary to perform an interim goodwill impairment test for the Array Legacy Operations reporting unit. The Company performed a quantitative goodwill impairment test and determined the estimated fair value of the reporting unit exceeded the carrying value assigned to that reporting unit; as a result, goodwill was not impaired. Other Intangible Assets Other intangible assets consisted of the following (in thousands, except useful lives): Estimated Useful Lives (Years) June 30, 2022 December 31, 2021 Amortizable: Costs: Developed technology 14 $ 203,800 $ 203,800 Customer relationships 10 309,601 89,500 Backlog 1 47,165 — Trade name 20 26,203 — Total amortizable intangibles 586,769 293,300 Accumulated amortization: Developed technology 87,069 79,790 Customer relationships 64,310 49,057 Backlog 23,099 — Trade name 729 — Total accumulated amortization 175,207 128,847 Total amortizable intangibles, net 411,562 164,453 Non-amortizable costs: Trade name 10,300 10,300 Total other intangible assets, net $ 421,862 $ 174,753 Amortization expense related to intangible assets amounted to $24.1 million and $5.9 million for the three months ended June 30, 2022 and 2021, respectively, and $46.7 million and $11.8 million for the six months ended June 30, 2022 and 2021, respectively. Estimated future annual amortization expense for the above amortizable intangible assets for the remaining periods through June 30, as follows (in thousands): Amount 2022 $ 47,086 2023 48,402 2024 47,007 2025 47,007 2026 42,700 Thereafter 179,360 $ 411,562 Long-lived assets, including intangible assets, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset group may not be recoverable. During the quarter ended March 31, 2022, the Company determined it was necessary to review long-lived assets, including intangible assets related to the Array Legacy Operations reporting unit, for impairment. The Company determined the undiscounted cash flows expected to result from the use of the asset group and its eventual disposition were greater than the carrying amount and therefore concluded there was no impairment. |
Investment in Equity Security
Investment in Equity Security | 6 Months Ended |
Jun. 30, 2022 | |
Investments, Debt and Equity Securities [Abstract] | |
Investment in Equity Security | Investment in Equity Security The Company made a $10.0 million and $2.0 million investment in preferred stock of a private company in February 2021 and April 2021, respectively. The investment is accounted for in accordance with ASC Topic 321 Investments—Equity Securities at its cost, less any impairment. The investment balance as of June 30, 2022 was $12.0 million and is recorded in other assets on the condensed consolidated balance sheets. There is no impairment recorded for the six months ended June 30, 2022. |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2022 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The Company follows guidance under ASC Topic 740-270 Income Taxes , which requires that an estimated annual effective tax rate is applied to year-to-date ordinary income (loss). At the end of each interim period, the Company estimates the effective tax rate expected to be applicable for the full fiscal year. The tax effect of discrete items is recorded in the quarter in which the discrete events occur. The Company recorded income tax benefit of $14.2 million and $1.8 million for the three months ended June 30, 2022 and 2021, respectively, and income tax benefit of $26.6 million and $0.1 million for the six months ended June 30, 2022 and 2021, respectively. The tax benefit in the three months ended June 30, 2022 was favorably impacted by non-taxable contingent income, lower transaction costs and mix of income. The tax benefit in the three months ended June 30, 2021 was unfavorably impacted by non-deductible amounts for equity-based compensation and Follow-on Offering costs. The tax benefit in the six months ended June 30, 2022 was favorably impacted by mix of earnings in foreign jurisdictions offset by non-deductible amounts for officers’ compensation and transaction costs. The tax benefit in the six months ended June 30, 2021 was unfavorably impacted by non-deductible equity based compensation as well as initial public offering and secondary offering costs. For the three and six months ended June 30, 2022 and 2021, no reserves for uncertain tax positions have been recorded. The Company will continue to monitor this position each interim period. |
Senior Secured Credit Facility
Senior Secured Credit Facility | 6 Months Ended |
Jun. 30, 2022 | |
Debt Disclosure [Abstract] | |
Senior Secured Credit Facility | Senior Secured Credit Facility Long-term senior secured credit facility consisted of the following (in thousands): June 30, 2022 December 31, 2021 Term loan facility $ 324,625 $ 326,775 Revolving credit facility 68,000 — 392,625 326,775 Less discount and issuance costs (21,206) (23,291) Long-term portion, net of debt discount and issuance costs 371,419 303,484 Less current portion of credit facility (4,300) (4,300) Long-term senior secured facility debt, net of current portion, debt discount and issuance costs $ 367,119 $ 299,184 Senior Secured Credit Facility On October 14, 2020, the Company entered into a senior secured credit facility, which was amended on February 23, 2021 (the “First Amendment”) and again on February 26, 2021 (the “Second Amendment”). The senior secured facility consisted originally of (i) a $575 million senior secured 7-year term loan facility (the “Term Loan Facility”) and (ii) a $150 million senior secured 5-year revolving credit facility (the “Revolving Credit Facility” and, together with the Term Loan Facility, the “Senior Secured Credit Facility”). The First Amendment, in the case of Eurocurrency borrowings, lowered the London interbank offered rate floor to 50 basis points from 100 basis points and lowered the applicable margin to 325 basis points from 400 basis points per annum. This resulted in the current rate on the Term Loan Facility decreasing to 3.75% down from 5% prior to the First Amendment. The Second Amendment increased the $150.0 million Revolving Credit Facility from $150.0 million to $200.0 million. Revolving Credit Facility Under the Revolving Credit Facility, the Company had $68.0 million and no outstanding balance as of June 30, 2022 and December 31, 2021, respectively, $35.3 million and $13.6 million in standby letters of credit at June 30, 2022 and December 31, 2021, respectively, and availability of $96.7 million and $186.4 million at June 30, 2022 and December 31, 2021, respectively. The Revolving Credit Facility pays interest depending on the contracted rate for the loan which is either for the Eurocurrency Rate Loans at LIBOR plus 3.25% and for Base Rate Loans at the higher of the Prime Rate, 1/2 of 1% above the Federal Funds Rate or the Eurocurrency rate for the Dollar deposits for one month Interest Period, after giving effect to any floor plus 1%, plus 2.25%. Term Loan Facility The Term Loan Facility had a balance of $324.6 million and $326.8 million as of June 30, 2022 and December 31, 2021, respectively. The balance of the Term Loan Facility is presented in the accompanying condensed consolidated balance sheets, net of debt discount and issuance costs of $21.2 million and $23.3 million as of June 30, 2022 and December 31, 2021, respectively. The debt discount and issuance costs are being amortized using the effective interest method and the rate as of June 30, 2022 is 6.03%. The Term Loan Facility has an annual excess cash flow calculation, for which the prescribed formula did not result in requiring the Company to make any advance principal payments for the six months ended June 30, 2022 and 2021. Convertible debt consisted of the following (in thousands): June 30, 2022 December 31, 2021 1.00% Senior unsecured convertible notes $ 425,000 $ 425,000 Less: unamortized discount and issuance costs (12,192) (13,137) 1.00% Senior unsecured convertible notes, net (1) $ 412,808 $ 411,863 (1) Effective interest rate for the Convertible Notes as of June 30, 2022 and December 31, 2021 was 1.5%. On December 3, 2021 and December 9, 2021, the Company completed a private offering of $375 million and $50 million over allotment, respectively, in aggregate principal amount of 1.00% Convertible Senior Notes due 2028 (the “Convertible Notes”), resulting in proceeds of $364.7 million and $48.6 million, respectively, after deducting the original issue discount of 2.75%. The Convertible Notes were issued pursuant to an indenture, dated December 3, 2021 (the “Indenture”), between the Company and U.S. Bank National Association, as trustee. The Convertible Notes are senior unsecured obligations of the Company and will mature on December 1, 2028, unless earlier converted redeemed or repurchased. The Convertible Notes bear interest at a rate of 1.00% per year, payable semiannually in arrears on June 1 and December 1 of each year, beginning on June 1, 2022. The Convertible Notes were not convertible during the six months ended June 30, 2022 and none have been converted to date. Also, given that the average market price of the Company’s common stock has not exceeded the exercise price since inception, there was no dilutive impact for the six months ended June 30, 2022. Capped Calls In connection with the issuances of the Convertible Notes, the Company paid $52.9 million, in aggregate, to enter into capped call option agreements to reduce the potential dilution to holders of the Company’s common stock after a conversion of the Convertible Notes. Specifically, upon the exercise of the capped call instruments issued pursuant to the agreements (the “Capped Calls”), the Company would receive shares of its common stock equal to approximately 17.8 million shares (a) multiplied by (i) the lower of $36.0200 or the then-current market price of its common stock, less (ii) the applicable exercise price, and (b) divided by the then-current market price of its common stock. The results of this formula are that the Company would receive more shares as the market price of its common stock exceeds the exercise price and approaches the cap, which was initially $36.0200 per share. Consequently, if the Convertible Notes are converted, then the number of shares to be issued by the Company would be effectively partially offset by the shares of common stock received by the Company under the Capped Calls as they are exercised. The formula above would be adjusted in the event of certain specified extraordinary events affecting the Company, including a merger; a tender offer; nationalization, insolvency or delisting of the Company’s common stock; changes in law; failure to deliver; insolvency filing; stock splits, combinations, dividends, repurchases or similar events; or an announcement of certain of the preceding actions. |
Convertible Debt
Convertible Debt | 6 Months Ended |
Jun. 30, 2022 | |
Debt Disclosure [Abstract] | |
Convertible Debt | Senior Secured Credit Facility Long-term senior secured credit facility consisted of the following (in thousands): June 30, 2022 December 31, 2021 Term loan facility $ 324,625 $ 326,775 Revolving credit facility 68,000 — 392,625 326,775 Less discount and issuance costs (21,206) (23,291) Long-term portion, net of debt discount and issuance costs 371,419 303,484 Less current portion of credit facility (4,300) (4,300) Long-term senior secured facility debt, net of current portion, debt discount and issuance costs $ 367,119 $ 299,184 Senior Secured Credit Facility On October 14, 2020, the Company entered into a senior secured credit facility, which was amended on February 23, 2021 (the “First Amendment”) and again on February 26, 2021 (the “Second Amendment”). The senior secured facility consisted originally of (i) a $575 million senior secured 7-year term loan facility (the “Term Loan Facility”) and (ii) a $150 million senior secured 5-year revolving credit facility (the “Revolving Credit Facility” and, together with the Term Loan Facility, the “Senior Secured Credit Facility”). The First Amendment, in the case of Eurocurrency borrowings, lowered the London interbank offered rate floor to 50 basis points from 100 basis points and lowered the applicable margin to 325 basis points from 400 basis points per annum. This resulted in the current rate on the Term Loan Facility decreasing to 3.75% down from 5% prior to the First Amendment. The Second Amendment increased the $150.0 million Revolving Credit Facility from $150.0 million to $200.0 million. Revolving Credit Facility Under the Revolving Credit Facility, the Company had $68.0 million and no outstanding balance as of June 30, 2022 and December 31, 2021, respectively, $35.3 million and $13.6 million in standby letters of credit at June 30, 2022 and December 31, 2021, respectively, and availability of $96.7 million and $186.4 million at June 30, 2022 and December 31, 2021, respectively. The Revolving Credit Facility pays interest depending on the contracted rate for the loan which is either for the Eurocurrency Rate Loans at LIBOR plus 3.25% and for Base Rate Loans at the higher of the Prime Rate, 1/2 of 1% above the Federal Funds Rate or the Eurocurrency rate for the Dollar deposits for one month Interest Period, after giving effect to any floor plus 1%, plus 2.25%. Term Loan Facility The Term Loan Facility had a balance of $324.6 million and $326.8 million as of June 30, 2022 and December 31, 2021, respectively. The balance of the Term Loan Facility is presented in the accompanying condensed consolidated balance sheets, net of debt discount and issuance costs of $21.2 million and $23.3 million as of June 30, 2022 and December 31, 2021, respectively. The debt discount and issuance costs are being amortized using the effective interest method and the rate as of June 30, 2022 is 6.03%. The Term Loan Facility has an annual excess cash flow calculation, for which the prescribed formula did not result in requiring the Company to make any advance principal payments for the six months ended June 30, 2022 and 2021. Convertible debt consisted of the following (in thousands): June 30, 2022 December 31, 2021 1.00% Senior unsecured convertible notes $ 425,000 $ 425,000 Less: unamortized discount and issuance costs (12,192) (13,137) 1.00% Senior unsecured convertible notes, net (1) $ 412,808 $ 411,863 (1) Effective interest rate for the Convertible Notes as of June 30, 2022 and December 31, 2021 was 1.5%. On December 3, 2021 and December 9, 2021, the Company completed a private offering of $375 million and $50 million over allotment, respectively, in aggregate principal amount of 1.00% Convertible Senior Notes due 2028 (the “Convertible Notes”), resulting in proceeds of $364.7 million and $48.6 million, respectively, after deducting the original issue discount of 2.75%. The Convertible Notes were issued pursuant to an indenture, dated December 3, 2021 (the “Indenture”), between the Company and U.S. Bank National Association, as trustee. The Convertible Notes are senior unsecured obligations of the Company and will mature on December 1, 2028, unless earlier converted redeemed or repurchased. The Convertible Notes bear interest at a rate of 1.00% per year, payable semiannually in arrears on June 1 and December 1 of each year, beginning on June 1, 2022. The Convertible Notes were not convertible during the six months ended June 30, 2022 and none have been converted to date. Also, given that the average market price of the Company’s common stock has not exceeded the exercise price since inception, there was no dilutive impact for the six months ended June 30, 2022. Capped Calls In connection with the issuances of the Convertible Notes, the Company paid $52.9 million, in aggregate, to enter into capped call option agreements to reduce the potential dilution to holders of the Company’s common stock after a conversion of the Convertible Notes. Specifically, upon the exercise of the capped call instruments issued pursuant to the agreements (the “Capped Calls”), the Company would receive shares of its common stock equal to approximately 17.8 million shares (a) multiplied by (i) the lower of $36.0200 or the then-current market price of its common stock, less (ii) the applicable exercise price, and (b) divided by the then-current market price of its common stock. The results of this formula are that the Company would receive more shares as the market price of its common stock exceeds the exercise price and approaches the cap, which was initially $36.0200 per share. Consequently, if the Convertible Notes are converted, then the number of shares to be issued by the Company would be effectively partially offset by the shares of common stock received by the Company under the Capped Calls as they are exercised. The formula above would be adjusted in the event of certain specified extraordinary events affecting the Company, including a merger; a tender offer; nationalization, insolvency or delisting of the Company’s common stock; changes in law; failure to deliver; insolvency filing; stock splits, combinations, dividends, repurchases or similar events; or an announcement of certain of the preceding actions. |
Other Debt
Other Debt | 6 Months Ended |
Jun. 30, 2022 | |
Debt Disclosure [Abstract] | |
Other Debt | Senior Secured Credit Facility Long-term senior secured credit facility consisted of the following (in thousands): June 30, 2022 December 31, 2021 Term loan facility $ 324,625 $ 326,775 Revolving credit facility 68,000 — 392,625 326,775 Less discount and issuance costs (21,206) (23,291) Long-term portion, net of debt discount and issuance costs 371,419 303,484 Less current portion of credit facility (4,300) (4,300) Long-term senior secured facility debt, net of current portion, debt discount and issuance costs $ 367,119 $ 299,184 Senior Secured Credit Facility On October 14, 2020, the Company entered into a senior secured credit facility, which was amended on February 23, 2021 (the “First Amendment”) and again on February 26, 2021 (the “Second Amendment”). The senior secured facility consisted originally of (i) a $575 million senior secured 7-year term loan facility (the “Term Loan Facility”) and (ii) a $150 million senior secured 5-year revolving credit facility (the “Revolving Credit Facility” and, together with the Term Loan Facility, the “Senior Secured Credit Facility”). The First Amendment, in the case of Eurocurrency borrowings, lowered the London interbank offered rate floor to 50 basis points from 100 basis points and lowered the applicable margin to 325 basis points from 400 basis points per annum. This resulted in the current rate on the Term Loan Facility decreasing to 3.75% down from 5% prior to the First Amendment. The Second Amendment increased the $150.0 million Revolving Credit Facility from $150.0 million to $200.0 million. Revolving Credit Facility Under the Revolving Credit Facility, the Company had $68.0 million and no outstanding balance as of June 30, 2022 and December 31, 2021, respectively, $35.3 million and $13.6 million in standby letters of credit at June 30, 2022 and December 31, 2021, respectively, and availability of $96.7 million and $186.4 million at June 30, 2022 and December 31, 2021, respectively. The Revolving Credit Facility pays interest depending on the contracted rate for the loan which is either for the Eurocurrency Rate Loans at LIBOR plus 3.25% and for Base Rate Loans at the higher of the Prime Rate, 1/2 of 1% above the Federal Funds Rate or the Eurocurrency rate for the Dollar deposits for one month Interest Period, after giving effect to any floor plus 1%, plus 2.25%. Term Loan Facility The Term Loan Facility had a balance of $324.6 million and $326.8 million as of June 30, 2022 and December 31, 2021, respectively. The balance of the Term Loan Facility is presented in the accompanying condensed consolidated balance sheets, net of debt discount and issuance costs of $21.2 million and $23.3 million as of June 30, 2022 and December 31, 2021, respectively. The debt discount and issuance costs are being amortized using the effective interest method and the rate as of June 30, 2022 is 6.03%. The Term Loan Facility has an annual excess cash flow calculation, for which the prescribed formula did not result in requiring the Company to make any advance principal payments for the six months ended June 30, 2022 and 2021. Convertible debt consisted of the following (in thousands): June 30, 2022 December 31, 2021 1.00% Senior unsecured convertible notes $ 425,000 $ 425,000 Less: unamortized discount and issuance costs (12,192) (13,137) 1.00% Senior unsecured convertible notes, net (1) $ 412,808 $ 411,863 (1) Effective interest rate for the Convertible Notes as of June 30, 2022 and December 31, 2021 was 1.5%. On December 3, 2021 and December 9, 2021, the Company completed a private offering of $375 million and $50 million over allotment, respectively, in aggregate principal amount of 1.00% Convertible Senior Notes due 2028 (the “Convertible Notes”), resulting in proceeds of $364.7 million and $48.6 million, respectively, after deducting the original issue discount of 2.75%. The Convertible Notes were issued pursuant to an indenture, dated December 3, 2021 (the “Indenture”), between the Company and U.S. Bank National Association, as trustee. The Convertible Notes are senior unsecured obligations of the Company and will mature on December 1, 2028, unless earlier converted redeemed or repurchased. The Convertible Notes bear interest at a rate of 1.00% per year, payable semiannually in arrears on June 1 and December 1 of each year, beginning on June 1, 2022. The Convertible Notes were not convertible during the six months ended June 30, 2022 and none have been converted to date. Also, given that the average market price of the Company’s common stock has not exceeded the exercise price since inception, there was no dilutive impact for the six months ended June 30, 2022. Capped Calls In connection with the issuances of the Convertible Notes, the Company paid $52.9 million, in aggregate, to enter into capped call option agreements to reduce the potential dilution to holders of the Company’s common stock after a conversion of the Convertible Notes. Specifically, upon the exercise of the capped call instruments issued pursuant to the agreements (the “Capped Calls”), the Company would receive shares of its common stock equal to approximately 17.8 million shares (a) multiplied by (i) the lower of $36.0200 or the then-current market price of its common stock, less (ii) the applicable exercise price, and (b) divided by the then-current market price of its common stock. The results of this formula are that the Company would receive more shares as the market price of its common stock exceeds the exercise price and approaches the cap, which was initially $36.0200 per share. Consequently, if the Convertible Notes are converted, then the number of shares to be issued by the Company would be effectively partially offset by the shares of common stock received by the Company under the Capped Calls as they are exercised. The formula above would be adjusted in the event of certain specified extraordinary events affecting the Company, including a merger; a tender offer; nationalization, insolvency or delisting of the Company’s common stock; changes in law; failure to deliver; insolvency filing; stock splits, combinations, dividends, repurchases or similar events; or an announcement of certain of the preceding actions. |
Redeemable Perpetual Preferred
Redeemable Perpetual Preferred Stock | 6 Months Ended |
Jun. 30, 2022 | |
Temporary Equity Disclosure [Abstract] | |
Redeemable Perpetual Preferred Stock | Redeemable Perpetual Preferred Stock Series A Redeemable Perpetual Preferred Stock On August 10, 2021, the Company entered into a Securities Purchase Agreement (the “Securities Purchase Agreement”) pursuant to which, on August 11, 2021, the Company issued and sold to certain investors (the “Purchasers”) 350,000 shares of its newly designated Series A Redeemable Perpetual Preferred Stock and 7,098,765 shares of the Company’s common stock for an aggregate purchase price of $346.0 million (the “Initial Closing”). Further, pursuant to the Securities Purchase Agreement, on September 27, 2021, the Company issued and sold to the Purchasers 776,235 shares of common stock for an aggregate purchase price of $776 (the “Prepaid Forward Contract”). The Company used net proceeds from the Initial Closing to repay the entire $102.0 million amount outstanding under its existing Revolving Credit Facility and prepay $100 million under the Company’s Term Loan. Additionally, the Securities Purchase Agreement entitles the Purchasers to designate one representative to be appointed to the Company’s board of directors (the “Board”) and to appoint three non-voting observers to the Board, in each case until such time as the Purchasers no longer beneficially own shares of the Series A Redeemable Perpetual Preferred Stock with at least $100 million aggregate Liquidation Preference (as defined below). The Series A Redeemable Perpetual Preferred Stock has no maturity date. On January 7, 2022, the Company issued and sold to the Purchasers 50,000 shares of Series A Redeemable Perpetual Preferred Stock and 1,125,000 shares of the Company’s common stock in an additional closing for an aggregate purchase price of $49.4 million (the “Additional Closing”). Additional Closings The Securities Purchase Agreement gives the Company the option to require the Purchasers to purchase, in one or more additional closings, up to 150,000 shares of Series A Redeemable Perpetual Preferred Stock until June 30, 2023 and up to 3,375,000 shares of common stock (or up to 6,100,000 shares of common stock in the event of certain price-related adjustments) (subject to certain equitable adjustments pursuant to any stock dividend, stock split, stock combination, reclassification or similar transaction) for an aggregate purchase price up to $148.0 million (the “Delayed Draw Commitment”). This commitment has been reduced by the Additional Closing. The Company evaluated the accounting for the instruments issued in the Securities Purchase Agreement and determined the Series A Redeemable Perpetual Preferred Stock and common stock issued in the Initial Closing, as well as the Prepaid Forward Contract, and Delayed Draw Commitment are freestanding instruments accounted for in equity. The Series A Redeemable Perpetual Preferred Stock is recorded in temporary equity on the condensed consolidated balance sheets as it has redemption features upon certain triggering events that are outside the Company’s control, such as a fundamental change. The proceeds of the Series A Redeemable Perpetual Preferred Stock, transactions costs and discount of $334.6 million have been allocated to each instrument based on its relative fair value. At the Initial Closing date, $229.8 million was allocated to the Series A Redeemable Perpetual Preferred Stock, $105.4 million to common stock, $12.4 million to the Delayed Draw Commitment, which was recorded as a debit to additional paid-in capital, and $11.7 million to the Prepaid Forward Contract. The Additional Closing carried issuance and original issuance discount costs of $1.3 million. The net proceeds were allocated amongst the Series A Redeemable Perpetual Preferred Stock and common stock based on the proceeds of $33.1 million and $15.9 million, respectively. Dividends On or prior to the fifth anniversary of the Initial Closing, the Company may pay dividends on the Series A Redeemable Perpetual Preferred Stock either in cash at the then-applicable Cash Regular Dividend Rate (as defined below), through accrual to the Liquidation Preference at the Accrued Regular Dividend Rate (as defined below) of 6.25% (the “Permitted Accrued Dividends”) or a combination thereof. Following the fifth anniversary of the Initial Closing, dividends are payable only in cash. To the extent the Company does not declare such dividends and pay in cash following the fifth anniversary of the Initial Closing, the dividends accrue to the Liquidation Preference (“Default Accrued Dividends”) at the then-applicable Cash Regular Dividend Rate plus 200 basis points. In the event there are Default Accrued Dividends outstanding for six consecutive quarters, the Company, at the option of the holders of the Series A Redeemable Perpetual Preferred Stock, will pay 100% of the amount of Default Accrued Dividends by delivering to such holder a number of shares of the Company’s common stock equal to the quotient of (i) the amount of Default Accrued Dividends divided by (ii) 95% of the 30-day VWAP of the Company’s common stock. As used herein, “Liquidation Preference” means, with respect to any shares of the Series A Redeemable Perpetual Preferred Stock, the initial liquidation preference of $1000 per share plus any Accrued Dividends of such share as the time of the determination. The “Cash Regular Dividend Rate” of the Series A Redeemable Perpetual Preferred Stock means (i) initially, 5.75% per annum on the Liquidation Preference and (ii) increased by (a) 50 basis points on each of the fifth, sixth and seventh anniversaries of the Initial Closing and (b) 100 basis points on each of the eighth, ninth and tenth anniversaries of the Initial Closing. The “Accrued Regular Dividend Rate” on the Series A Redeemable Perpetual Preferred Stock means 6.25% per annum on the Liquidation Preference. Permitted Accrued Dividends accrued as of June 30, 2022 are $12.2 million with no dividends paid for the six months ended June 30, 2022 as dividends are accruing to the Liquidation Preference. Permitted Accrued Dividends resulted in 13 shares of the Series A Redeemable Perpetual Preferred being issued as of June 30, 2022. Dividends declared and paid as of December 31, 2021 were $8.2 million. The shares of Series A Redeemable Perpetual Preferred Stock have similar characteristics of an “Increasing Rate Security” as described by SEC Staff Accounting Bulletin Topic 5Q, Increasing Rate Preferred Stock . As a result, the discount on Series A Redeemable Perpetual Preferred Stock is considered an unstated dividend cost that is amortized over the period preceding commencement of the perpetual dividend using the effective interest method, by charging imputed dividend cost against retained earnings, or additional paid in capital in the absence of retained earnings, and increasing the carrying amount of the Series A Redeemable Perpetual Preferred Stock by a corresponding amount. The discount of $120.2 million is therefore being amortized over five years using the effective yield method. The amortization in each period is the amount which, together with the stated dividend in the period, results in a constant rate of effective cost with regard to the carrying amount of the Series A Redeemable Perpetual Preferred Stock. The Company has presented the Series A Redeemable Perpetual Preferred Stock in temporary equity and is accreting the discount on the increasing rate dividends using the effective interest method. Such accretion totaled $11.1 million for the six months ended June 30, 2022. The Company had $12.2 million in dividends accreted on the carrying value of the Series A Redeemable Perpetual Preferred Stock at an accrual rate of 6.25% as of June 30, 2022. Fees Until June 30, 2023, the Company will pay the Purchasers a cash commitment premium on the unpurchased portion of Delayed Draw Commitment as follows: a. 0% through the six-month anniversary of the Initial Closing; b. 1.5% from the six-month anniversary of the Initial Closing through the 12-month anniversary of the Initial Closing; and c. 3.0% from the 12-month anniversary of the Initial Closing through June 30, 2023. The Company may terminate some or all of the Delayed Draw Commitment, from time to time, at its sole discretion. |
Revenue
Revenue | 6 Months Ended |
Jun. 30, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Revenue | Revenue Based on ASC 606 provisions, the Company disaggregates its revenue from contracts with customers by those sales recorded over-time and sales recorded at a point in time. The following table presents the Company’s revenue disaggregated by sales recorded over-time and sales recorded at a point in time (in thousands): Three Months Ended Six Months Ended 2022 2021 2022 2021 Over-time revenue $ 329,915 $ 114,548 $ 537,986 $ 232,398 Point in time revenue 95,014 81,968 187,529 212,358 Total revenue $ 424,929 $ 196,516 $ 725,515 $ 444,756 As discussed in the consolidated financial statements included in the 2021 Annual Report, contracts related to the Company’s federal investment tax credit (“ITC”) were determined to have multiple performance obligations satisfied at a point in time instead of one performance obligation satisfied over time. The disaggregated revenue information above for the six months ended June 30, 2021 has been restated to correct this error, which resulted in $185.1 million of revenue being reclassified from over-time revenue to point in time revenue for the six months ended June 30, 2021. Revenue recognized for the ITC-related contracts and standalone system component sales is recorded at a point in time and recognized when obligations under the terms of the contract with the Company’s customer are satisfied. Generally, this occurs with the transfer of control of the asset, which is typically upon delivery to the customer in line with shipping terms. In certain situations, the Company recognizes revenue under a bill-and-hold arrangement with its customers. When this occurs, the customers purchase material prior to the start of construction of a solar project in order to meet the Five Percent Safe Harbor test to qualify for the ITC. Because the customers lack sufficient storage capacity to accept a large amount of material prior to the start of construction, they request that the Company keep the product in its custody. The material is bundled or palletized in the Company’s warehouses, identified separately as belonging to the respective customer and is ready for immediate transport to the customer project upon customer request. Additionally, title and risk of loss has passed to the customer and the Company does not have the ability to use the product or direct it to another customer. As of June 30, 2022, the Company had no contracts with customers for the sale of goods and services that contained bill-and-hold obligations such as storage, handling and other custodial duties for the three and six months ended June 30, 2022. Any losses incurred on point-in-time projects are recognized as the goods are delivered . Contract Balances The timing of revenue recognition, billings and cash collections results in billed accounts receivable, unbilled receivables (contract assets), and deferred revenue (contract liabilities) on the condensed consolidated balance sheets. The majority of the Company’s contract amounts are billed as work progresses in accordance with agreed-upon contractual terms, which generally coincide with the shipment of one or more phases of the project. Billing sometimes occurs subsequent to revenue recognition, resulting in contract assets. The changes in contract assets (i.e., unbilled receivables) and the corresponding amounts recorded in revenue relate to fluctuations in the timing and volume of billings for the Company’s revenue recognized over-time. Contract assets consisting of unbilled receivables are recorded within accounts receivable on the condensed consolidated balance sheets on a contract-by-contract basis at the end of the reporting period and consisted of the following (in thousands): June 30, 2022 December 31, 2021 Unbilled receivables $ 111,908 $ 111,224 The Company also receives advances or deposits from its customers, before revenue is recognized, resulting in contract liabilities. The changes in contract liabilities (i.e., deferred revenue) relate to advanced orders and payments received by the Company. Contract liabilities consisting of deferred revenue recorded on a contract-by-contract basis at the end of each reporting period were as follows (in thousands): June 30, 2022 December 31, 2021 Deferred revenue $ 167,556 $ 99,575 During the six months ended June 30, 2022, the Company converted $61.8 million in deferred revenue to revenue, which represented 62% of the prior year’s deferred revenue balance. Remaining Performance Obligations |
Loss Per Share
Loss Per Share | 6 Months Ended |
Jun. 30, 2022 | |
Earnings Per Share [Abstract] | |
Loss Per Share | Loss Per Share The following table sets forth the computation of basic and diluted loss per share (in thousands, except per share amounts): Three Months Ended Six Months Ended 2022 2021 2022 2021 Net loss $ (2,777) $ (5,517) $ (24,831) $ (941) Preferred dividends and accretion 12,182 — 23,788 — Net loss to common shareholders $ (14,959) $ (5,517) $ (48,619) $ (941) Basic: Weighted average shares 150,203 126,994 149,246 126,994 Loss per share $ (0.10) $ (0.04) $ (0.33) $ (0.01) Diluted: Weighted average shares 150,203 126,994 149,246 126,994 Loss per share $ (0.10) $ (0.04) $ (0.33) $ (0.01) Potentially dilutive common shares issuable pursuant to equity-based awards of 2,413,230 and 970,424 were not included as of June 30, 2022 and 2021, respectively, as their potential effect was anti-dilutive as the Company generated a net loss. There were no potentially dilutive common shares issuable pursuant to the Convertible Notes as the stock price is below the strike price and the Company generated a net loss. |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Litigation The Company, in the normal course of business, is subject to claims and litigation. The Company reviews the status of each matter and assesses its potential financial exposure. If the potential loss from any claim or legal proceeding is considered probable and the amount can be reasonably estimated, the Company would accrue a liability for the estimated loss. On August 30, 2017, the Company filed its first amended complaint in the U.S. District Court for the District of New Mexico against Nextracker LLC, Daniel S. Shugar, Marco Garcia, Flextronics International U.S.A., Inc., Scott Graybeal and Colin Mitchell (collectively, the “Defendants”) asserting (among other claims) trade secret misappropriation, tortious interference with contract, fraud, and breach of contract (the “Nextracker Litigation”). On July 15, 2022, the Company settled its claims against Defendants for $42.8 million and received payment on August 4, 2022. On May 14, 2021, a putative class action was filed in the U.S. District Court for the Southern District of New York (the “Southern District of New York” or the “Court”) against the Company and certain officers and directors alleging violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5, promulgated thereunder, and Sections 11, 12(a)(2) and 15 of the Securities Exchange Act of 1933 (“Plymouth Action”). The Plymouth Action alleges misstatements and/or omissions in the Company’s registration statements and prospectuses related to the Company’s October 2020 initial public offering (“IPO”), the Company’s December 2020 offering (the “2020 Follow-On Offering”), and the Company’s March 2021 offering (the “2021 Follow-On Offering”) during the putative class period of October 14, 2020 through May 11, 2021. On June 30, 2021, a second putative class action was filed in the Southern District of New York against the Company and certain officers and directors alleging violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5, promulgated thereunder, and Sections 11 and 15 of the Securities Exchange Act of 1933 (“Keippel Action”). The Keippel Action similarly alleged misstatements and/or omissions in certain of the Company’s registration statements and prospectuses related to the Company’s IPO, the Company’s 2020 Follow-On Offering, and the Company’s 2021 Follow-On Offering during the putative class period of October 14, 2020 through May 11, 2021. On July 6, 2021, the Court entered an order that the Keippel Action was in all material respects substantially similar to the Plymouth Action that both actions arise out of the same or similar operative facts, and that the parties are substantially the same parties. The Court accordingly consolidated the Keippel Action with the Plymouth Action for all pretrial purposes and, ordered all filings to be made in the Plymouth Action. On July 16, 2021, a verified derivative complaint was filed in the Southern District of New York against certain officers and directors of the Company (“First Derivative Action”). The complaint alleges: (1) violations of Section 14(a) of the Securities Exchange Act of 1934 for misleading proxy statements, (2) breach of fiduciary duty, (3) unjust enrichment, (4) abuse of control, (5) gross mismanagement, (6) corporate waste, (7) aiding and abetting breach of fiduciary duty, and (8) contribution under sections 10(b) and 21D of the Securities Exchange Act of 1934. On July 30, 2021, a second and related verified derivative complaint was filed in the Southern District of New York against certain officers and directors of the Company (“Second Derivative Action”). The complaint alleges: (1) violations of Section 14(a) of the Securities Exchange Act of 1934 for causing the issuance of a false/ misleading proxy statement, (2) breach of fiduciary duty, and (3) aiding and abetting breaches of fiduciary duty. On August 24, 2021, the Second Derivative Action was consolidated with the First Derivative Action, the Court appointed co-lead counsel, and the case was temporarily stayed pending the entry of an order on all motions to dismiss directed at the pleadings filed in the Plymouth Action. The stay shall remain in effect until the later of (a) the entry of an order on any motions to dismiss the Plymouth Action or, (b) to the extent the complaint in the Plymouth Action is amended, the entry of an order on any motions to dismiss any such amended complaints in the Plymouth Action. On September 21, 2021, the Court in the Plymouth Action appointed a group comprised of institutional investors Plymouth County Retirement Association and Carpenters Pension Trust Fund for Northern California as lead plaintiff. On December 7, 2021, an amended class action complaint was filed by lead plaintiff in the Plymouth Action against the Company and certain officers and directors alleging violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5, promulgated thereunder, and Sections 11, 12(a)(2), and 15 of the Securities Exchange Act of 1933, on behalf of a putative class of persons and entities that purchased or otherwise acquired the Company’s securities during the period from October 14, 2020 through May 11, 2021 (the “Consolidated Amended Complaint”). The Consolidated Amended Complaint alleges misstatements and/or omissions in: (1) certain of the Company’s registration statements and prospectuses related to the Company’s IPO, the Company’s 2020 Follow-On Offering, and the Company’s 2021 Follow-On Offering; (2) in the Company’s Annual Report on Form 10-K and associated press release announcing results for the fourth quarter and full fiscal year 2020; and (3) in the Company’s November 5, 2020 and March 9, 2021 earnings calls. Consistent with the individual rules of practice for the Court in the Plymouth Action, on January 24, 2022, the defendants in the Plymouth Action, including the Company and certain of its officers and directors named as defendants therein, served on lead plaintiff and the Court a letter outlining why the Consolidated Amended Complaint should be dismissed in its entirety. Lead plaintiff responded to that letter on February 23, 2022 disagreeing with the ground for dismissal outlined in the defendants’ initial letter and contending that its Consolidated Amended Complaint should not be dismissed. Because the parties could not agree that the Consolidated Amended Complaint was deficient in any respect, the defendants, including the Company, submitted a letter to the Court on March 21, 2022 setting forth the reasons why the Consolidated Amended Complaint should be dismissed and requesting the Court’s leave to file a motion to dismiss. At this time the Company believes that the likelihood of any material loss related to these matters is remote given the preliminary stage of the claims and strength of the Company’s defenses. The Company has not recorded any material loss contingency in the condensed consolidated balance sheets as of June 30, 2022 or December 31, 2021. Contingent Consideration Tax Receivable Agreement Concurrent with the Former Parent’s acquisition of Array Technologies Patent Holdings Co., LLC on July 8, 2016, Array Tech, Inc. entered into a Tax Receivable Agreement (the “TRA”) with the former majority shareholder of Array. The TRA is valued based on the future expected payments under the agreement. The TRA provides for the payment by Array Tech, Inc. to the former owners for certain federal, state, local and non-U.S. tax benefits deemed realized in post-closing taxable periods by Array, from the use of certain deductions generated by the increase in the tax value of the developed technology. The TRA is accounted for as contingent consideration and subsequent changes in fair value of the contingent liability are recognized in contingent consideration in the condensed consolidated statements of operations. As of June 30, 2022 and December 31, 2021, the fair value of the TRA was $7.7 million and $14.6 million, respectively. Estimating the amount of payments that may be made under the TRA is by nature imprecise. The significant fair value inputs used to estimate the future expected TRA payments to the former owners include the timing of tax payments, a discount rate, book income projections, timing of expected adjustments to calculate taxable income and the projected rate of use for attributes defined in the TRA. Payments made under the TRA consider tax positions taken by the Company and are due within 125 days following the filing of the Company’s U.S. federal and state income tax returns under procedures described in the agreement. The current portion of the TRA liability is based on tax returns. The TRA will continue until all tax benefit payments have been made or the Company elects early termination under the terms described in the TRA. The following table summarizes the liability related to the estimated TRA (in thousands): Three Months Ended Six Months Ended 2022 2021 2022 2021 Beginning balance $ 9,364 $ 19,839 $ 14,577 $ 19,691 Payments — (7,810) (1,483) (7,810) Fair value adjustment (1,678) (13) (5,408) 135 Ending balance $ 7,686 $ 12,016 $ 7,686 $ 12,016 The TRA liability requires significant judgment and is classified as Level 3 in the fair value hierarchy. Surety Bonds As of June 30, 2022, the Company posted surety bonds in the total amount of approximately $189.8 million. The Company is required to provide surety bonds to various parties as required for certain transactions initiated during the ordinary course of business to guarantee the Company’s performance in accordance with contractual or legal obligations. These off-balance sheet arrangements do not adversely impact the Company’s liquidity or capital resources. |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 6 Months Ended |
Jun. 30, 2022 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The carrying values and the estimated fair values of debt financial instruments were as follows (in thousands): June 30, 2022 December 31, 2021 Carrying Value Fair Value Carrying Value Fair Value Convertible Notes $ 412,808 $ 299,506 $ 411,863 $ 410,771 The carrying values of the Revolving Credit Facility recorded in long-term debt on the condensed consolidated balance sheets approximate fair value due to the variable interest rate. The fair value of the Convertible Notes is estimated using Level 2 inputs, as they are not registered securities nor listed on any securities exchange but may be traded by qualified institutional buyers. |
Equity-Based Compensation
Equity-Based Compensation | 6 Months Ended |
Jun. 30, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
Equity-Based Compensation | Equity-Based Compensation 2020 Plan On October 14, 2020, the Company’s 2020 Equity Incentive Plan (the “2020 Plan”) became effective. The 2020 Plan authorized 6,683,919 new shares, subject to adjustments pursuant to the 2020 Plan. During the six months ended June 30, 2022, the Company granted an aggregate of 1,378,851 restricted stock units (“RSUs”) to employees and board of director members and 451,671 Performance Stock Units (“PSUs”) to certain executives. The fair value of the RSUs is determined using the market value of common stock on the grant date. The PSUs cliff vest after three years and upon meeting certain revenue and adjusted EPS targets. The PSUs also contain a modifier based on the total stock return (TSR) compared to a certain Index which modifies the number of PSUs that vest. The PSUs were valued using a Monte-Carlo simulation method with a volatility assumption of 66%, risk free interest rate of 0.28% based on the United States Treasury Constant Maturity rates and no dividends paid assumption. Activity under the 2020 Plan was as follows: RSUs Number of Shares Weighted Average Grant Date Fair Value Unvested, December 31, 2021 930,409 $ 21.66 Granted 1,378,851 $ 9.99 Vested (248,661) $ 19.14 Forfeited (99,040) $ 19.89 Unvested, June 30, 2022 1,961,559 $ 14.05 PSUs Number of Shares Weighted Average Grant Date Fair Value Unvested, December 31, 2021 147,687 $ 27.75 Granted 451,671 $ 10.63 Vested — $ — Forfeited (20,027) $ 30.74 Unvested, June 30, 2022 579,331 $ 14.30 Class B Units and Class C Units of Former Parent The Company accounted for equity grants to employees of Class B Units and Class C Units (collectively, the “Units”) of Former Parent as equity-based compensation under ASC 718, Compensation-Stock Compensation . The Units contain vesting provisions as defined in the agreement. Vested Units do not forfeit upon termination and represent a residual interest in Former Parent. Equity-based compensation cost is measured at the grant date fair value and is recognized on a straight-line basis over the requisite service period, including those Units with graded vesting with a corresponding credit to additional paid-in capital as a capital contribution from Former Parent. However, the amount of equity-based compensation at any date is equal to the portion of the grant date value of the award that is vested. The Units issued to employees are measured at fair value on the grant date using an option pricing model. The Company utilizes the estimated weighted average of the Company’s expected fund life dependent on various exit scenarios to estimate the expected term of the awards. Expected volatility is based on the average of historical and implied volatility of a set of comparable companies, adjusted for size and leverage. The risk-free rates are based on the yields of U.S. Treasury instruments with comparable terms. Actual results may vary depending on the assumptions applied within the model. On November 19, 2019 and May 19, 2020, Former Parent issued 22,326,653 and 4,344,941, respectively, Class B Units to certain employees of the Company. On March 28, 2020, Former Parent issued 1,000 Class C Units to a member of the board of directors of Array Technologies, Inc. On March 23, 2021, in connection with the closing of the 2021 Follow-on Offering, all of the outstanding Class B Units of Former Parent were immediately vested per the terms of the equity awards, resulting in the Company accelerating the recognition of equity-based compensation of $8.9 million for the six months ended June 30, 2021. For the three months ended June 30, 2022 and 2021, the Company recognized $3.0 million and $4.1 million in equity-based compensation, respectively. For the six months ended June 30, 2022 and 2021, the Company recognized $7.5 million and $12.0 million in equity-based compensation, respectively. As of June 30, 2022, the Company had $25.4 million of unrecognized compensation costs related to RSUs which is expected to be recognized over a period of 2.4 years. There were 119,067 forfeitures during the three and six months ended June 30, 2022 and 57,424 forfeitures during both the three and six months ended June 30, 2021. |
Related Party Transactions
Related Party Transactions | 6 Months Ended |
Jun. 30, 2022 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Related Party Transactions Accounts Payable-Related Party The Company had $0.5 million and $0.6 million as of June 30, 2022 and December 31, 2021, respectively, of accounts payable-related party with the former shareholders of Array. The payables relate to a federal tax refund related to the pre-acquisition periods and restricted cash related to Former Parent’s acquisition of the Company which were due to the sellers of Array upon release of the restriction offset by a receivable related to a sales/use tax audit from the pre-acquisition period for which the seller provided the Company with indemnification. Tax Receivable Agreement See Note 16 – Commitments and Contingencies – Tax Receivable Agreement. |
Segment Reporting
Segment Reporting | 6 Months Ended |
Jun. 30, 2022 | |
Segment Reporting [Abstract] | |
Segment Reporting | ASC 280 Segment Reporting establishes standards for reporting information about operating segments. Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker in deciding how to allocate resources and in assessing performance. Historically, the Company managed its business on the basis of one operating and reportable segment. During the six months ended June 30, 2022, the Company changed its reportable segments as a result of the STI Acquisition; the Company now operates as two segments; Array Legacy Operations and STI Operations. The following table provides a reconciliation of certain financial information for the Company’s reportable segments to information presented in its condensed consolidated financial statements for the three and six months ended June 30, 2022 and 2021 and as of June 30, 2022 and December 31, 2021 (in thousands): Three Months Ended June 30, 2022 Three Months Ended June 30, 2021 Array Legacy Operations STI Operations Total Array Legacy Operations Revenue $ 352,241 $ 72,688 $ 424,929 $ 196,516 Gross Profit $ 38,904 $ 8,472 $ 47,376 $ 20,507 Six Months Ended June 30, 2022 Six Months Ended June 30, 2021 Array Legacy Operations STI Operations Total Array Legacy Operations Revenue $ 602,893 $ 122,622 $ 725,515 $ 444,756 Gross Profit $ 60,172 $ 13,791 $ 73,963 $ 66,673 |
Subsequent Events
Subsequent Events | 6 Months Ended |
Jun. 30, 2022 | |
Subsequent Events [Abstract] | |
Subsequent Events | On July 15, 2022, the Company and Nextracker LLC, Daniel S. Shugar, Marco Garcia, Flextronics International U.S.A., Inc., Scott Graybeal and Colin Mitchell entered into a monetary settlement agreement (the “Settlement”) to resolve the Nextracker Litigation. The Company’s claims in the lawsuit included misappropriation of the Company’s trade secrets, tortious interference of contract, and breach of contract. The Settlement provides for, among other things, a payment of $42.8 million which was made by Defendants and received by the Company on August 4, 2022, in resolution of the Company’s claims and a mutual limited release of all claims asserted, or that could have been asserted, in connection with the Nextracker Litigation. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2022 | |
Accounting Policies [Abstract] | |
Basis of Accounting and Presentation | Basis of Accounting and PresentationThe accompanying unaudited condensed consolidated financial statements have been prepared on the accrual basis of accounting in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”), pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). The unaudited interim financial statements have been prepared on the same basis as the audited annual financial statements and, in the opinion of management, reflect all adjustments, which include only normal recurring adjustments, necessary for the fair statement of results for the interim periods reported. The results for the three and six months ended June 30, 2022 are not necessarily indicative of results to be expected for the year ending December 31, 2022 or any other interim periods, or any future year or period. The balance sheet as of December 31, 2021 included herein was derived from the audited financial statements as of that date. Certain disclosures have been condensed or omitted from the interim financial statements. These financial statements should be read in conjunction with the Company’s audited financial statements included in the Company’s Annual Report on Form 10-K filed with the SEC on April 6, 2022, as amended by the Form 10-K/A filed with the SEC on April 6, 2022 (the “2021 Annual Report”). |
Principles of Consolidation | Principles of Consolidation The condensed consolidated financial statements include the accounts of Array Technologies, Inc. and its subsidiaries. All intercompany accounts and transactions have been eliminated upon consolidation. |
Use of Estimates | Use of Estimates The preparation of condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. Significant estimates include evaluation for any impairment of goodwill, impairment of long-lived assets, fair value of contingent consideration, Series A Redeemable Perpetual Preferred Stock and the related future tranche, allowance for credit losses, reserve for excess or obsolete inventories, valuation of deferred tax assets and warranty reserve. Actual results may differ from previously estimated amounts, and such differences may be material to the condensed consolidated financial statements; however, management believes that these estimates and assumptions provide a reasonable basis for the fair presentation of the consolidated financial statements. Estimates and assumptions are reviewed periodically, and the effects of revisions are reflected in the period they occur. |
Impact of COVID-19 Pandemic | Impact of COVID-19 Pandemic In December 2019, a novel strain of coronavirus, SARS-CoV-2, which causes coronavirus disease 2019 (“COVID-19”), surfaced in Wuhan, China. Since then, COVID-19 has spread to multiple countries, including the United States. On March 11, 2020, the World Health Organization declared COVID-19 a pandemic. Due to economic conditions, the Company’s industry has seen rapid commodity price increases and strained logistics, causing the Company to experience decreased margins and thus decreased cash from operations which has adversely impacted the Company’s business. In addition, due to global tightening of supply chain and strained logistics issues the Company has experienced an increase in unbilled revenues and in some instances incurred liquidated damages. The Company has taken, and continues to take, mitigating steps to overcome the economic challenges and, therefore, believes the impact to be temporary, but cannot be certain the timing of when it will achieve better margins. The extent to which the COVID-19 pandemic and recent supply chain constraints and price increases may further impact the Company’s business, results of operations, financial condition and cash flows will depend on future developments, which are highly uncertain and cannot be predicted with confidence. The Company believes it has sufficient liquidity and financing options available and expects to have sufficient liquidity to operate for the next 12 months. The Company expects to use cash generated from operations and if needed, can access funds from the Revolving Credit Facility (as defined below). The Company also has $100 million in delayed draw ability under the Series A Redeemable Perpetual Preferred Stock (as defined below) future draw commitment; however, such a draw would increase the Company’s dividend obligations and outstanding common stock and failure to draw the delayed commitments will result in interest expense payable by the company. See Note 13 – Redeemable Perpetual Preferred . The Revolving Credit Facility has $96.7 million of availability; however, the Company may have limited ability to draw on the funds due to existing debt covenants. Impact of the Ongoing Conflict in Ukraine The ongoing conflict in Ukraine has reduced the availability of material that can be sourced in Europe and, as a result, increased logistics costs for the procurement of certain inputs and materials used in our products. We do not know ultimate severity or duration of the conflict in Ukraine, but we are continuously monitoring the |
Inflation | Inflation The Company could see an impact from inflationary pressures. Inflation has continued to accelerate in the wake of Russia’s invasion of Ukraine, driving up energy prices, freight premiums, and other operating costs. Interest rates, notably mature market government bond yields, remain low by historical standards but are rising as central banks around the world tighten monetary policy in response to inflation pressures, while government deficits and debt remain at high levels in many major markets. The eventual implications of higher government deficits and debt, tighter monetary policy, and potentially higher long-term interest rates may drive a higher cost of capital during our forecast period. |
Business Combinations | Business Combinations The Company accounts for its business acquisitions under the acquisition method of accounting in accordance with the Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification (“ASC”) Topic 805 Business Combinations (“ASC 805”). The excess of the purchase price over the estimated fair values of the net assets acquired is recorded as goodwill. Determining the fair value of assets acquired and liabilities assumed requires management’s judgment and often involves the use of significant estimates and assumptions, including assumptions with respect to future cash inflows and outflows, discount rates, asset lives, and market multiples, amongst other items. |
Foreign Currency Translation | Foreign Currency Translation For non-U.S. subsidiaries that operate in a local currency environment, assets and liabilities are translated into the U.S. dollar at period end exchange rates. Income, expense and cash flow items are translated at average exchange rates prevailing during the period. Translation adjustments for these subsidiaries are accumulated as a separate component of accumulated other comprehensive income in equity. For non-U.S. subsidiaries that use a U.S. dollar functional currency, local currency inventories and property, plant and equipment are translated into U.S. dollars at rates prevailing when acquired, and all other assets and liabilities are translated at period end exchange rates. Inventories charged to cost of sales and depreciation are remeasured at historical rates, and all other income and expense items are translated at average exchange rates prevailing during the period. Gains and losses which result from remeasurement are included in earnings. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Adopted In October 2021, the FASB issued ASU No. 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers (“ ASU 2021-08”). ASU 2021-08 requires the company acquiring contract assets and contract liabilities obtained in a business combination to recognize and measure them in accordance with ASC Topic 606, Revenue from Contracts with Customers (“ ASC 606”). At the acquisition date, the company acquiring the business should record related revenue, as if it had originated the contract. Before the recent update, such amounts were recognized by the acquiring company at fair value. The amendments in this update are effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. Early adoption is permitted, including in interim periods, for any financial statements that have not yet been issued. The Company early adopted ASU 2021-08 as of January 1, 2022. See Note 3 – Acquisition of STI for further information and disclosures related to the STI Acquisition. The standard was applied to the acquisition accounting for STI. A review of the deferred revenue of |
Acquisition of STI (Tables)
Acquisition of STI (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Business Combination and Asset Acquisition [Abstract] | |
Schedule of Business Acquisitions Purchase Price Consideration | The purchase price consideration to acquire STI consisted of the following (in thousands): Cash consideration for STI $ 409,647 Cash consideration for transaction expenses of STI 896 Total cash consideration 410,543 Non-cash equity consideration 200,224 Total consideration transferred 610,767 Total purchase price consideration $ 610,767 |
Schedule of business acquisitions, by acquisition | The following table summarizes the preliminary estimates of fair values of the assets acquired and liabilities assumed as of the Acquisition Date (in thousands): Preliminary Fair Value of Net Assets Acquired and Liabilities Assumed: Acquisition Date Measurement Adjustment June 30, 2022 Cash and cash equivalents $ 36,725 $ — $ 36,725 Accounts receivable 110,789 — 110,789 Inventories 47,517 — 47,517 Prepaid expenses and other 23,399 — 23,399 Property, plant and equipment 4,434 — 4,434 Other intangible assets 318,365 — 318,365 Other assets 325 — 325 Total assets acquired $ 541,554 $ — $ 541,554 Accounts payable 65,761 — 65,761 Deferred revenue 20,345 — 20,345 Short-term debt 44,338 — 44,338 Other liabilities 10,115 — 10,115 Income tax payable 7,576 — 7,576 Deferred tax liability 93,823 7,611 101,434 Other long-term liabilities 4,524 — 4,524 Long-term debt 12,053 — 12,053 Total liabilities assumed $ 258,535 $ 7,611 $ 266,146 Preliminary fair value of net assets acquired 283,019 275,408 Preliminary allocation to goodwill $ 327,748 $ 335,359 |
Schedule of purchase price allocation | The preliminary purchase price allocation includes $318.4 million of acquired identifiable intangible assets. Estimated Fair Value Estimated Weighted Average Useful Life in Years (in thousands, except useful lives) Backlog $ 51,165 1 Customer relationships 238,770 10 Trade name 28,430 20 Total $ 318,365 |
Business acquisition, pro forma information | Three Months Ended Six Months Ended (in millions) 2022 2021 2022 2021 Revenue $ 424.9 $ 263.1 $ 733.4 $ 536.9 Net income (loss) $ (2.8) $ 5.0 $ (23.9) $ (7.3) |
Accounts Receivable (Tables)
Accounts Receivable (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Receivables [Abstract] | |
Schedule of account receivable | Accounts receivable consists of the following (in thousands): June 30, 2022 December 31, 2021 Accounts receivable $ 458,438 $ 236,149 Less: allowance for doubtful accounts (538) (140) Accounts receivable, net $ 457,900 $ 236,009 |
Inventory (Tables)
Inventory (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Inventory Disclosure [Abstract] | |
Schedule of current inventory | Inventories consist of the following (in thousands): June 30, 2022 December 31, 2021 Raw materials $ 195,600 $ 85,470 Finished goods 142,402 127,598 Reserve for excess or obsolete inventory (8,051) (7,415) Total $ 329,951 $ 205,653 |
Property, Plant, and Equipment
Property, Plant, and Equipment (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Property, Plant and Equipment [Abstract] | |
Summary of property, plant and equipment | Property, plant and equipment consisted of the following (in thousands, except useful lives): Estimated Useful Lives (Years) June 30, 2022 December 31, 2021 Land N/A $ 1,550 $ 1,340 Buildings and land improvements 15-39 6,433 2,451 Manufacturing equipment 7 17,265 13,924 Furniture, fixtures and equipment 5-7 1,405 476 Vehicles 5 266 161 Hardware and software 3-5 2,305 1,683 Assets in progress 1,263 1,880 Total 30,487 21,915 Less: accumulated depreciation (12,685) (11,223) Property, plant and equipment, net $ 17,802 $ 10,692 |
Goodwill and Other Intangible_2
Goodwill and Other Intangible Assets (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of goodwill | Changes in the carrying amount of goodwill by operating segment during the six months ended June 30, 2022 are shown below (in thousands): Array Legacy Operations Segment STI Operations Segment Total Beginning Balance $ 69,727 $ — $ 69,727 Acquisition of STI — 335,359 $ 335,359 Foreign currency impact — (26,380) $ (26,380) Ending Balance $ 69,727 $ 308,979 $ 378,706 |
Schedule of finite-lived intangible assets | Other intangible assets consisted of the following (in thousands, except useful lives): Estimated Useful Lives (Years) June 30, 2022 December 31, 2021 Amortizable: Costs: Developed technology 14 $ 203,800 $ 203,800 Customer relationships 10 309,601 89,500 Backlog 1 47,165 — Trade name 20 26,203 — Total amortizable intangibles 586,769 293,300 Accumulated amortization: Developed technology 87,069 79,790 Customer relationships 64,310 49,057 Backlog 23,099 — Trade name 729 — Total accumulated amortization 175,207 128,847 Total amortizable intangibles, net 411,562 164,453 Non-amortizable costs: Trade name 10,300 10,300 Total other intangible assets, net $ 421,862 $ 174,753 |
Schedule of indefinite-lived intangible assets | Other intangible assets consisted of the following (in thousands, except useful lives): Estimated Useful Lives (Years) June 30, 2022 December 31, 2021 Amortizable: Costs: Developed technology 14 $ 203,800 $ 203,800 Customer relationships 10 309,601 89,500 Backlog 1 47,165 — Trade name 20 26,203 — Total amortizable intangibles 586,769 293,300 Accumulated amortization: Developed technology 87,069 79,790 Customer relationships 64,310 49,057 Backlog 23,099 — Trade name 729 — Total accumulated amortization 175,207 128,847 Total amortizable intangibles, net 411,562 164,453 Non-amortizable costs: Trade name 10,300 10,300 Total other intangible assets, net $ 421,862 $ 174,753 |
Schedule of future annual amortization expense of amortizable intangible assets | Estimated future annual amortization expense for the above amortizable intangible assets for the remaining periods through June 30, as follows (in thousands): Amount 2022 $ 47,086 2023 48,402 2024 47,007 2025 47,007 2026 42,700 Thereafter 179,360 $ 411,562 |
Senior Secured Credit Facility
Senior Secured Credit Facility (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Debt Disclosure [Abstract] | |
Schedule of long-term debt instruments | Long-term senior secured credit facility consisted of the following (in thousands): June 30, 2022 December 31, 2021 Term loan facility $ 324,625 $ 326,775 Revolving credit facility 68,000 — 392,625 326,775 Less discount and issuance costs (21,206) (23,291) Long-term portion, net of debt discount and issuance costs 371,419 303,484 Less current portion of credit facility (4,300) (4,300) Long-term senior secured facility debt, net of current portion, debt discount and issuance costs $ 367,119 $ 299,184 |
Convertible Debt (Tables)
Convertible Debt (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Debt Disclosure [Abstract] | |
Summary of convertible debt | Convertible debt consisted of the following (in thousands): June 30, 2022 December 31, 2021 1.00% Senior unsecured convertible notes $ 425,000 $ 425,000 Less: unamortized discount and issuance costs (12,192) (13,137) 1.00% Senior unsecured convertible notes, net (1) $ 412,808 $ 411,863 (1) Effective interest rate for the Convertible Notes as of June 30, 2022 and December 31, 2021 was 1.5%. |
Revenue (Tables)
Revenue (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation of revenue | The following table presents the Company’s revenue disaggregated by sales recorded over-time and sales recorded at a point in time (in thousands): Three Months Ended Six Months Ended 2022 2021 2022 2021 Over-time revenue $ 329,915 $ 114,548 $ 537,986 $ 232,398 Point in time revenue 95,014 81,968 187,529 212,358 Total revenue $ 424,929 $ 196,516 $ 725,515 $ 444,756 Contract assets consisting of unbilled receivables are recorded within accounts receivable on the condensed consolidated balance sheets on a contract-by-contract basis at the end of the reporting period and consisted of the following (in thousands): June 30, 2022 December 31, 2021 Unbilled receivables $ 111,908 $ 111,224 June 30, 2022 December 31, 2021 Deferred revenue $ 167,556 $ 99,575 |
Earnings (Loss) Per Share (Tabl
Earnings (Loss) Per Share (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Earnings Per Share [Abstract] | |
Schedule of earnings per share, basic and diluted | The following table sets forth the computation of basic and diluted loss per share (in thousands, except per share amounts): Three Months Ended Six Months Ended 2022 2021 2022 2021 Net loss $ (2,777) $ (5,517) $ (24,831) $ (941) Preferred dividends and accretion 12,182 — 23,788 — Net loss to common shareholders $ (14,959) $ (5,517) $ (48,619) $ (941) Basic: Weighted average shares 150,203 126,994 149,246 126,994 Loss per share $ (0.10) $ (0.04) $ (0.33) $ (0.01) Diluted: Weighted average shares 150,203 126,994 149,246 126,994 Loss per share $ (0.10) $ (0.04) $ (0.33) $ (0.01) |
Commitment and Contingencies (T
Commitment and Contingencies (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Summary of liability related to estimated contingent consideration | The following table summarizes the liability related to the estimated TRA (in thousands): Three Months Ended Six Months Ended 2022 2021 2022 2021 Beginning balance $ 9,364 $ 19,839 $ 14,577 $ 19,691 Payments — (7,810) (1,483) (7,810) Fair value adjustment (1,678) (13) (5,408) 135 Ending balance $ 7,686 $ 12,016 $ 7,686 $ 12,016 |
Fair Value of Financial Instr_2
Fair Value of Financial Instruments (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Fair Value Disclosures [Abstract] | |
Schedule of carrying values and estimated fair values of debt instruments | The carrying values and the estimated fair values of debt financial instruments were as follows (in thousands): June 30, 2022 December 31, 2021 Carrying Value Fair Value Carrying Value Fair Value Convertible Notes $ 412,808 $ 299,506 $ 411,863 $ 410,771 |
Equity-Based Compensation (Tabl
Equity-Based Compensation (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
Disclosure of share-based compensation arrangements by share-based payment award | Activity under the 2020 Plan was as follows: RSUs Number of Shares Weighted Average Grant Date Fair Value Unvested, December 31, 2021 930,409 $ 21.66 Granted 1,378,851 $ 9.99 Vested (248,661) $ 19.14 Forfeited (99,040) $ 19.89 Unvested, June 30, 2022 1,961,559 $ 14.05 PSUs Number of Shares Weighted Average Grant Date Fair Value Unvested, December 31, 2021 147,687 $ 27.75 Granted 451,671 $ 10.63 Vested — $ — Forfeited (20,027) $ 30.74 Unvested, June 30, 2022 579,331 $ 14.30 |
Segment Reporting (Tables)
Segment Reporting (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Segment Reporting [Abstract] | |
Schedule of segment reporting information, by segment | The following table provides a reconciliation of certain financial information for the Company’s reportable segments to information presented in its condensed consolidated financial statements for the three and six months ended June 30, 2022 and 2021 and as of June 30, 2022 and December 31, 2021 (in thousands): Three Months Ended June 30, 2022 Three Months Ended June 30, 2021 Array Legacy Operations STI Operations Total Array Legacy Operations Revenue $ 352,241 $ 72,688 $ 424,929 $ 196,516 Gross Profit $ 38,904 $ 8,472 $ 47,376 $ 20,507 Six Months Ended June 30, 2022 Six Months Ended June 30, 2021 Array Legacy Operations STI Operations Total Array Legacy Operations Revenue $ 602,893 $ 122,622 $ 725,515 $ 444,756 Gross Profit $ 60,172 $ 13,791 $ 73,963 $ 66,673 |
Organization and Business - Nar
Organization and Business - Narrative (Details) - segment | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2022 | Dec. 31, 2021 | Jan. 11, 2022 | |
Business Acquisition, Contingent Consideration [Line Items] | ||||
Number of operating segments | 2 | 2 | 1 | |
STI | ||||
Business Acquisition, Contingent Consideration [Line Items] | ||||
Percentage of share capital acquired | 100% |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Details) - USD ($) | Jun. 30, 2022 | Jan. 11, 2022 | Dec. 31, 2021 | Feb. 26, 2021 | Oct. 14, 2020 |
STI | |||||
Debt Instrument [Line Items] | |||||
Deferred revenue | $ 20,345,000 | $ 20,300,000 | |||
Revolving credit facility | |||||
Debt Instrument [Line Items] | |||||
Maximum borrowing capacity | $ 150,000,000 | $ 150,000,000 | |||
Available borrowing capacity | 96,700,000 | $ 186,400,000 | |||
Series A Redeemable Perpetual Preferred Stock | |||||
Debt Instrument [Line Items] | |||||
Maximum borrowing capacity | $ 100,000,000 |
Acquisition of STI - Narrative
Acquisition of STI - Narrative (Details) - USD ($) $ / shares in Units, $ in Thousands | 6 Months Ended | |||
Jan. 11, 2022 | Jun. 30, 2022 | Jun. 30, 2022 | Dec. 31, 2021 | |
Business Acquisition [Line Items] | ||||
Temporary equity, par value (in dollars per share) | $ 0.001 | $ 0.001 | $ 0.001 | |
Percentage, estimated royalty rate | 1.25% | |||
Percentage, weighted average cost of capital, discount rate | 15.20% | |||
SPAIN | Customer relationships | ||||
Business Acquisition [Line Items] | ||||
Percentage of weighted average cost of capital | 15% | |||
SPAIN | Customer Relationship for Foreign Sourced Projects | ||||
Business Acquisition [Line Items] | ||||
Percentage of weighted average cost of capital | 14% | |||
SPAIN | Backlog | ||||
Business Acquisition [Line Items] | ||||
Percentage of weighted average cost of capital | 8.50% | |||
SPAIN | Order Backlog for Foreign Sourced Projects | ||||
Business Acquisition [Line Items] | ||||
Percentage of weighted average cost of capital | 7.50% | |||
BRAZIL | Customer relationships | ||||
Business Acquisition [Line Items] | ||||
Percentage of weighted average cost of capital | 16.50% | |||
BRAZIL | Backlog | ||||
Business Acquisition [Line Items] | ||||
Percentage of weighted average cost of capital | 9.50% | |||
Series A Redeemable Perpetual Preferred Stock | ||||
Business Acquisition [Line Items] | ||||
Temporary equity, par value (in dollars per share) | $ 0.001 | |||
STI | ||||
Business Acquisition [Line Items] | ||||
Cash consideration for transaction expenses of STI | $ (896) | $ 5,600 | ||
Total cash consideration | $ 410,543 | |||
Business acquisition, equity interest issued or issuable, number of shares | 13,894,800 | |||
Total consideration transferred | $ 610,767 | |||
Pro forma information, net loss of acquiree since acquisition date, actual | $ 10,900 | |||
Percentage of share capital acquired | 100% | |||
Pro forma information, revenue of acquiree since acquisition Date, actual | $ 122,600 |
Acquisition of STI - Schedule o
Acquisition of STI - Schedule of Business Acquisitions Purchase Price Consideration (Details) - USD ($) $ in Thousands | 6 Months Ended | ||
Jan. 11, 2022 | Jun. 30, 2022 | Jun. 30, 2021 | |
Business Acquisition [Line Items] | |||
Non-cash equity consideration | $ 200,224 | $ 0 | |
STI | |||
Business Acquisition [Line Items] | |||
Cash consideration for STI | $ 409,647 | ||
Cash consideration for transaction expenses of STI | 896 | $ (5,600) | |
Total cash consideration | 410,543 | ||
Non-cash equity consideration | 200,224 | ||
Total consideration transferred | $ 610,767 |
Acquisition of STI - Schedule_2
Acquisition of STI - Schedule of Business Acquisitions, by Acquisition (Details) - USD ($) $ in Thousands | Jun. 30, 2022 | Jan. 11, 2022 | Dec. 31, 2021 |
Business Acquisition [Line Items] | |||
Preliminary allocation to goodwill | $ 378,706 | $ 69,727 | |
STI | |||
Business Acquisition [Line Items] | |||
Cash and cash equivalents | 36,725 | ||
Accounts receivable | 110,789 | ||
Inventories | 47,517 | ||
Prepaid expenses and other | 23,399 | ||
Property, plant and equipment | 4,434 | ||
Other intangible assets | 318,365 | $ 318,365 | |
Other assets | 325 | ||
Total assets acquired | 541,554 | ||
Accounts payable | 65,761 | ||
Deferred revenue | 20,345 | 20,300 | |
Short-term debt | 44,338 | ||
Other liabilities | 10,115 | ||
Income tax payable | 7,576 | ||
Deferred tax liability | 101,434 | ||
Other long-term liabilities | 4,524 | ||
Long-term debt | 12,053 | ||
Total liabilities assumed | 266,146 | ||
STI | Previously Reported | |||
Business Acquisition [Line Items] | |||
Cash and cash equivalents | 36,725 | ||
Accounts receivable | 110,789 | ||
Inventories | 47,517 | ||
Prepaid expenses and other | 23,399 | ||
Property, plant and equipment | 4,434 | ||
Other intangible assets | 318,365 | ||
Other assets | 325 | ||
Total assets acquired | 541,554 | ||
Accounts payable | 65,761 | ||
Deferred revenue | 20,345 | ||
Short-term debt | 44,338 | ||
Other liabilities | 10,115 | ||
Income tax payable | 7,576 | ||
Deferred tax liability | 93,823 | ||
Other long-term liabilities | 4,524 | ||
Long-term debt | 12,053 | ||
Total liabilities assumed | 258,535 | ||
STI | Revision of Prior Period, Adjustment | |||
Business Acquisition [Line Items] | |||
Income tax payable | 0 | ||
Deferred tax liability | 7,611 | ||
Total liabilities assumed | 7,611 | ||
STI | Preliminary | |||
Business Acquisition [Line Items] | |||
Preliminary fair value of net assets acquired | 275,408 | ||
Preliminary allocation to goodwill | $ 335,359 | ||
STI | Preliminary | Previously Reported | |||
Business Acquisition [Line Items] | |||
Preliminary fair value of net assets acquired | 283,019 | ||
Preliminary allocation to goodwill | $ 327,748 |
Acquisition of STI - Schedule_3
Acquisition of STI - Schedule of Purchase Price Allocation (Details) - STI - USD ($) $ in Thousands | Jan. 11, 2022 | Jun. 30, 2022 |
Business Acquisition [Line Items] | ||
Other intangible assets | $ 318,365 | $ 318,365 |
Trade name | ||
Business Acquisition [Line Items] | ||
Indefinite-lived intangible, estimated fair value | $ 28,430 | |
Intangible assets, estimated weighted average useful life (in years) | 20 years | |
Backlog | ||
Business Acquisition [Line Items] | ||
Finite-lived intangibles, estimated fair value | $ 51,165 | |
Intangible assets, estimated weighted average useful life (in years) | 1 year | |
Customer relationships | ||
Business Acquisition [Line Items] | ||
Finite-lived intangibles, estimated fair value | $ 238,770 | |
Intangible assets, estimated weighted average useful life (in years) | 10 years |
Acquisition of STI - Business A
Acquisition of STI - Business Acquisition, Pro Forma Information (Details) - STI - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Business Acquisition [Line Items] | ||||
Revenue | $ 424.9 | $ 263.1 | $ 733.4 | $ 536.9 |
Net income (loss) | $ (2.8) | $ 5 | $ (23.9) | $ (7.3) |
Accounts Receivable - Schedule
Accounts Receivable - Schedule of account receivable (Details) - USD ($) $ in Thousands | Jun. 30, 2022 | Dec. 31, 2021 |
Receivables [Abstract] | ||
Accounts receivable | $ 458,438 | $ 236,149 |
Less: allowance for doubtful accounts | (538) | (140) |
Accounts receivable, net | $ 457,900 | $ 236,009 |
Inventory (Details)
Inventory (Details) - USD ($) $ in Thousands | Jun. 30, 2022 | Dec. 31, 2021 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 195,600 | $ 85,470 |
Finished goods | 142,402 | 127,598 |
Reserve for excess or obsolete inventory | (8,051) | (7,415) |
Inventories, net | $ 329,951 | $ 205,653 |
Property, Plant, and Equipmen_2
Property, Plant, and Equipment - Summary of Property, Plant and Equipment (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2022 | Dec. 31, 2021 | |
Property, Plant and Equipment [Line Items] | ||
Property, plant, and equipment, gross | $ 30,487 | $ 21,915 |
Less: accumulated depreciation | (12,685) | (11,223) |
Property, plant and equipment, net | 17,802 | 10,692 |
Land | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant, and equipment, gross | 1,550 | 1,340 |
Buildings and land improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant, and equipment, gross | $ 6,433 | 2,451 |
Buildings and land improvements | Minimum | ||
Property, Plant and Equipment [Line Items] | ||
Estimated Useful Lives (Years) | 15 years | |
Buildings and land improvements | Maximum | ||
Property, Plant and Equipment [Line Items] | ||
Estimated Useful Lives (Years) | 39 years | |
Manufacturing equipment | ||
Property, Plant and Equipment [Line Items] | ||
Estimated Useful Lives (Years) | 7 years | |
Property, plant, and equipment, gross | $ 17,265 | 13,924 |
Furniture, fixtures and equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant, and equipment, gross | $ 1,405 | 476 |
Furniture, fixtures and equipment | Minimum | ||
Property, Plant and Equipment [Line Items] | ||
Estimated Useful Lives (Years) | 5 years | |
Furniture, fixtures and equipment | Maximum | ||
Property, Plant and Equipment [Line Items] | ||
Estimated Useful Lives (Years) | 7 years | |
Vehicles | ||
Property, Plant and Equipment [Line Items] | ||
Estimated Useful Lives (Years) | 5 years | |
Property, plant, and equipment, gross | $ 266 | 161 |
Hardware and software | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant, and equipment, gross | $ 2,305 | 1,683 |
Hardware and software | Minimum | ||
Property, Plant and Equipment [Line Items] | ||
Estimated Useful Lives (Years) | 3 years | |
Hardware and software | Maximum | ||
Property, Plant and Equipment [Line Items] | ||
Estimated Useful Lives (Years) | 5 years | |
Assets in progress | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant, and equipment, gross | $ 1,263 | $ 1,880 |
Property, Plant, and Equipmen_3
Property, Plant, and Equipment - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Property, Plant and Equipment [Abstract] | ||||
Depreciation expense | $ 0.6 | $ 0.6 | $ 1.2 | $ 1.2 |
Depreciation allocated to cost of revenue | 0.4 | 0.5 | 0.9 | 1 |
Depreciation included in depreciation and amortization | $ 0.2 | $ 0.1 | $ 0.3 | $ 0.2 |
Goodwill and Other Intangible_3
Goodwill and Other Intangible Assets - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | Dec. 31, 2021 | Jul. 08, 2016 | |
Goodwill [Line Items] | ||||||
Goodwill | $ 378,706 | $ 378,706 | $ 69,727 | |||
Accumulated impairment | 51,900 | 51,900 | ||||
Acquisition of STI | 335,359 | |||||
Amortization expense related to intangible assets | 24,100 | $ 5,900 | 46,700 | $ 11,800 | ||
Array Legacy Operations | ||||||
Goodwill [Line Items] | ||||||
Goodwill | 69,727 | 69,727 | 69,727 | |||
Acquisition of STI | 0 | |||||
STI Operations | ||||||
Goodwill [Line Items] | ||||||
Goodwill | $ 308,979 | 308,979 | $ 0 | |||
Array Legacy Operations | ||||||
Goodwill [Line Items] | ||||||
Goodwill | $ 121,600 | |||||
STI | ||||||
Goodwill [Line Items] | ||||||
Acquisition of STI | 335,400 | |||||
STI | STI Operations | ||||||
Goodwill [Line Items] | ||||||
Acquisition of STI | $ 335,359 |
Goodwill and Other Intangible_4
Goodwill and Other Intangible Assets - Schedule of goodwill (Details) $ in Thousands | 6 Months Ended |
Jun. 30, 2022 USD ($) | |
Goodwill [Roll Forward] | |
Goodwill, beginning balance | $ 69,727 |
Acquisition of STI | 335,359 |
Foreign currency impact | (26,380) |
Goodwill, ending balance | 378,706 |
Array Legacy Operations | |
Goodwill [Roll Forward] | |
Goodwill, beginning balance | 69,727 |
Acquisition of STI | 0 |
Foreign currency impact | 0 |
Goodwill, ending balance | 69,727 |
STI Operations | |
Goodwill [Roll Forward] | |
Goodwill, beginning balance | 0 |
Foreign currency impact | (26,380) |
Goodwill, ending balance | 308,979 |
STI | |
Goodwill [Roll Forward] | |
Acquisition of STI | 335,400 |
STI | STI Operations | |
Goodwill [Roll Forward] | |
Acquisition of STI | $ 335,359 |
Goodwill and Other Intangible_5
Goodwill and Other Intangible Assets - Schedule of other intangible assets (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2022 | Dec. 31, 2021 | |
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets, gross | $ 586,769 | $ 293,300 |
Finite-lived intangible assets, accumulated amortization | 175,207 | 128,847 |
Total amortizable intangibles, net | 411,562 | 164,453 |
Other intangible assets, net | 421,862 | 174,753 |
Trade name | ||
Finite-Lived Intangible Assets [Line Items] | ||
Non-amortizable costs: | $ 10,300 | 10,300 |
Developed technology | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible asset, estimated useful lives (years) | 14 years | |
Finite-lived intangible assets, gross | $ 203,800 | 203,800 |
Finite-lived intangible assets, accumulated amortization | $ 87,069 | 79,790 |
Customer relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible asset, estimated useful lives (years) | 10 years | |
Finite-lived intangible assets, gross | $ 309,601 | 89,500 |
Finite-lived intangible assets, accumulated amortization | $ 64,310 | 49,057 |
Backlog | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible asset, estimated useful lives (years) | 1 year | |
Finite-lived intangible assets, gross | $ 47,165 | 0 |
Finite-lived intangible assets, accumulated amortization | $ 23,099 | 0 |
Trade name | ||
Finite-Lived Intangible Assets [Line Items] | ||
Indefinite-lived intangible asset, estimated useful lives (years) | 20 years | |
Indefinite-lived intangible assets, gross | $ 26,203 | 0 |
Indefinite-lived intangible assets, accumulated amortization | $ 729 | $ 0 |
Goodwill and Other Intangible_6
Goodwill and Other Intangible Assets - Schedule of future annual amortization expense of amortizable intangible assets (Details) - USD ($) $ in Thousands | Jun. 30, 2022 | Dec. 31, 2021 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
2022 | $ 47,086 | |
2023 | 48,402 | |
2024 | 47,007 | |
2025 | 47,007 | |
2026 | 42,700 | |
Thereafter | 179,360 | |
Total amortizable intangibles, net | $ 411,562 | $ 164,453 |
Investment in Equity Security (
Investment in Equity Security (Details) - USD ($) | 1 Months Ended | 6 Months Ended | ||
Apr. 30, 2021 | Feb. 28, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Investments, Debt and Equity Securities [Abstract] | ||||
Investment in equity securities | $ 2,000,000 | $ 10,000,000 | $ 0 | $ 11,975,000 |
Balance of investment in equity securities | 12,000,000 | |||
Impairment recorded | $ 0 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Income Tax Disclosure [Abstract] | ||||
Income tax benefit | $ (14,195,000) | $ (1,830,000) | $ (26,638,000) | $ (132,000) |
Reserves for uncertain tax positions | $ 0 | $ 0 | $ 0 | $ 0 |
Senior Secured Credit Facilit_2
Senior Secured Credit Facility - Schedule of Long-Term Debt (Details) - USD ($) $ in Thousands | Jun. 30, 2022 | Jan. 07, 2022 | Dec. 31, 2021 |
Debt Instrument [Line Items] | |||
Less discount and issuance costs | $ (1,300) | ||
Less current portion of credit facility | $ (51,494) | $ (4,300) | |
Long-term debt, net of current portion | 793,557 | 711,056 | |
Senior Secured Credit Facility | |||
Debt Instrument [Line Items] | |||
Long-term debt, balance | 392,625 | 326,775 | |
Less discount and issuance costs | (21,206) | (23,291) | |
Long-term portion, net of debt discount and issuance costs | 371,419 | 303,484 | |
Less current portion of credit facility | (4,300) | (4,300) | |
Term loan facility | Senior Secured Credit Facility | |||
Debt Instrument [Line Items] | |||
Long-term debt, balance | 324,625 | 326,775 | |
Revolving credit facility | Senior Secured Credit Facility | |||
Debt Instrument [Line Items] | |||
Long-term debt, balance | 68,000 | 0 | |
Long-term debt, net of current portion | $ 367,119 | $ 299,184 |
Senior Secured Credit Facilit_3
Senior Secured Credit Facility - Narrative (Details) - USD ($) | 6 Months Ended | ||||||
Feb. 23, 2021 | Feb. 22, 2021 | Oct. 14, 2020 | Jun. 30, 2022 | Jan. 07, 2022 | Dec. 31, 2021 | Feb. 26, 2021 | |
Debt Instrument [Line Items] | |||||||
Less: unamortized discount and issuance costs | $ 1,300,000 | ||||||
Term loan facility | |||||||
Debt Instrument [Line Items] | |||||||
Maximum borrowing capacity | $ 575,000,000 | ||||||
Debt instrument term | 7 years | ||||||
Revolving Loan applicable margin | 3.75% | ||||||
Long-term debt, balance | $ 324,600,000 | $ 326,800,000 | |||||
Less: unamortized discount and issuance costs | $ 21,200,000 | 23,300,000 | |||||
Debt issuance costs and discounts, amortization rate | 6.03% | ||||||
Term loan facility | Revolving Credit Facility, First Amendment | |||||||
Debt Instrument [Line Items] | |||||||
Revolving Loan applicable margin | 5% | ||||||
Revolving credit facility | |||||||
Debt Instrument [Line Items] | |||||||
Maximum borrowing capacity | $ 150,000,000 | $ 150,000,000 | |||||
Debt instrument term | 5 years | ||||||
Long-term debt, balance | $ 68,000,000 | 0 | |||||
Available borrowing capacity | $ 96,700,000 | 186,400,000 | |||||
Revolving credit facility | Minimum | |||||||
Debt Instrument [Line Items] | |||||||
Revolving Loan applicable margin | 1% | ||||||
Revolving credit facility | Maximum | |||||||
Debt Instrument [Line Items] | |||||||
Revolving Loan applicable margin | 2.25% | ||||||
Revolving credit facility | Revolving Credit Facility, Second Amendment | |||||||
Debt Instrument [Line Items] | |||||||
Maximum borrowing capacity | $ 200,000,000 | ||||||
Revolving credit facility | London Interbank Offered Rate (LIBOR) | |||||||
Debt Instrument [Line Items] | |||||||
Revolving Loan applicable margin | 3.25% | ||||||
Revolving credit facility | Fed Funds Effective Rate Overnight Index Swap Rate | |||||||
Debt Instrument [Line Items] | |||||||
Revolving Loan applicable margin | 1% | ||||||
Senior Secured Credit Facility | London Interbank Offered Rate (LIBOR) | |||||||
Debt Instrument [Line Items] | |||||||
Monthly basis spread on variable rate | 0.50% | 1% | |||||
Senior Secured Credit Facility | Base Rate | |||||||
Debt Instrument [Line Items] | |||||||
Minimum annual variable rate | 0.0325 | 0.0400 | |||||
Standby Letters of Credit | |||||||
Debt Instrument [Line Items] | |||||||
Letters of credit outstanding | $ 35,300,000 | $ 13,600,000 |
Convertible Debt - Summary of c
Convertible Debt - Summary of convertible debt (Details) - USD ($) $ in Thousands | Jun. 30, 2022 | Jan. 07, 2022 | Dec. 31, 2021 |
Debt Instrument [Line Items] | |||
Less: unamortized discount and issuance costs | $ 1,300 | ||
Effective interest rate | 1% | ||
Convertible Debt | |||
Debt Instrument [Line Items] | |||
1.00% Senior unsecured convertible notes | $ 425,000 | $ 425,000 | |
Less: unamortized discount and issuance costs | (12,192) | (13,137) | |
1.00% Senior unsecured convertible notes, net (1) | $ 412,808 | $ 411,863 | |
Effective interest rate | 1.50% | 1.50% |
Convertible Debt - Narrative (D
Convertible Debt - Narrative (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 6 Months Ended | |||
Dec. 09, 2021 | Dec. 03, 2021 | Jun. 30, 2022 | Dec. 31, 2021 | |
Debt Instrument [Line Items] | ||||
Effective interest rate | 1% | |||
Convertible Debt | ||||
Debt Instrument [Line Items] | ||||
Effective interest rate | 1.50% | 1.50% | ||
Convertible Senior Notes due 2028 | Convertible Debt | ||||
Debt Instrument [Line Items] | ||||
Bridge loan facility aggregate principal amount | $ 50 | $ 375 | ||
Effective interest rate | 1% | 1% | ||
Proceeds from convertible debt | $ 48.6 | $ 364.7 | ||
Debt instrument, interest rate, effective percentage discount | 2.75% | 2.75% | ||
Debt instrument, annual interest rate | 1% | |||
Convertible Note Capped Call Transactions | ||||
Debt Instrument [Line Items] | ||||
Debt issuance costs | $ 52.9 | |||
Debt conversion, converted instrument, shares issued | 17.8 | |||
Derivatives, cap price | $ 36.02 |
Other Debt - Narrative (Details
Other Debt - Narrative (Details) - STI $ in Millions | Jun. 30, 2022 USD ($) |
Debt Instrument [Line Items] | |
Short-term debt | $ 47 |
Long-term debt | 13.6 |
Debt maturing in 2024 | 5.2 |
Debt maturing in 2027 | $ 8.4 |
Minimum | |
Debt Instrument [Line Items] | |
Stated interest rate | 0.55% |
Maximum | |
Debt Instrument [Line Items] | |
Stated interest rate | 2.76% |
Redeemable Perpetual Preferre_2
Redeemable Perpetual Preferred Stock (Details) | 6 Months Ended | ||||||||
Jan. 07, 2022 USD ($) $ / shares shares | Dec. 31, 2021 USD ($) $ / shares shares | Aug. 10, 2021 USD ($) representative shares | Jun. 30, 2022 USD ($) $ / shares shares | Mar. 31, 2022 USD ($) | Jan. 11, 2022 $ / shares | Jun. 30, 2021 USD ($) | Mar. 31, 2021 USD ($) | Dec. 31, 2020 USD ($) | |
Temporary Equity [Line Items] | |||||||||
Temporary equity, shares issued | shares | 350,000 | 412,606 | |||||||
Temporary equity, par value (in dollars per share) | $ / shares | $ 0.001 | $ 0.001 | |||||||
Stock issued (in shares) | shares | 1,125,000 | ||||||||
Net proceeds from sale of series A perpetual preferred stock | $ 49,400,000 | ||||||||
Temporary equity, liquidation preference | $ 350,000,000 | $ 413,000,000 | |||||||
Issuance of common stock, net (in shares) | shares | 50,000 | ||||||||
Temporary equity, carrying amount, attributable to parent | 237,462,000 | 293,974,000 | $ 281,792,000 | ||||||
Common stock, value, issued | 135,000 | 150,000 | |||||||
Stockholders' equity | (69,205,000) | 66,302,000 | $ 108,415,000 | $ (72,420,000) | $ (68,426,000) | $ (80,899,000) | |||
Less: unamortized discount and issuance costs | $ 1,300,000 | ||||||||
Percentage of variable weighted average price of temporary equity | 95% | ||||||||
Dividends payable | $ 12,200,000 | ||||||||
Distributed earnings | $ 8,200,000 | ||||||||
Temporary equity, amortization of discount, period | 5 years | ||||||||
Dividend rate, percentage | 6.25% | ||||||||
Anniversary Date One | |||||||||
Temporary Equity [Line Items] | |||||||||
Purchase commitment, percentage | 0% | ||||||||
Anniversary Date Two | |||||||||
Temporary Equity [Line Items] | |||||||||
Purchase commitment, percentage | 1.50% | ||||||||
Anniversary Date Three | |||||||||
Temporary Equity [Line Items] | |||||||||
Purchase commitment, percentage | 3% | ||||||||
Securities Purchase Agreement | |||||||||
Temporary Equity [Line Items] | |||||||||
Net proceeds from sale of series A perpetual preferred stock | $ 346,000,000 | ||||||||
Repayment of long term line of credit | $ 100,000,000 | ||||||||
Proceeds from Series A issuance | $ 334,600,000 | ||||||||
Temporary equity, carrying amount, attributable to parent | 229,800,000 | ||||||||
Common stock, value, issued | 105,400,000 | ||||||||
Stockholders' equity | 12,400,000 | ||||||||
Derivative instrument, prepaid forward contract | 11,700,000 | ||||||||
Securities Purchase Agreement, Voting and Consent Rights | |||||||||
Temporary Equity [Line Items] | |||||||||
Number of members eligible to be designated to board of directors | representative | 1 | ||||||||
Number of non-voting representatives designated to board of directors | representative | 3 | ||||||||
Securities Purchase Agreement, Additional Closings | |||||||||
Temporary Equity [Line Items] | |||||||||
Net proceeds from sale of series A perpetual preferred stock | $ 148,000,000 | ||||||||
Series A Redeemable Perpetual Preferred Stock | |||||||||
Temporary Equity [Line Items] | |||||||||
Temporary equity, shares issued | shares | 13 | ||||||||
Temporary equity, par value (in dollars per share) | $ / shares | $ 0.001 | ||||||||
Debt issuance costs | $ 15,900,000 | ||||||||
Initial liquidation preference (in dollars per share) | $ / shares | $ 1,000 | ||||||||
Temporary equity, amortization of discount | $ 120,200,000 | ||||||||
Temporary equity, accretion of interest | $ 11,100,000 | ||||||||
Series A Redeemable Perpetual Preferred Stock | Accrued Regular Dividend Rate | |||||||||
Temporary Equity [Line Items] | |||||||||
Dividend rate, percentage | 6.25% | ||||||||
Series A Redeemable Perpetual Preferred Stock | Cash Regular Dividend Rate | |||||||||
Temporary Equity [Line Items] | |||||||||
Dividend rate, percentage | 5.75% | ||||||||
Temporary equity dividend rate spread | 2% | ||||||||
Percent of the amount of default accrued dividends to be paid | 100% | ||||||||
Series A Redeemable Perpetual Preferred Stock | Cash Regular Dividend Rate | Fifth, Sixth, and Seventh Anniversaries | |||||||||
Temporary Equity [Line Items] | |||||||||
Temporary equity dividend rate spread | 0.50% | ||||||||
Series A Redeemable Perpetual Preferred Stock | Cash Regular Dividend Rate | Eighth, Ninth, and Tenth Anniversaries | |||||||||
Temporary Equity [Line Items] | |||||||||
Temporary equity dividend rate spread | 1% | ||||||||
Series A Redeemable Perpetual Preferred Stock | Securities Purchase Agreement | |||||||||
Temporary Equity [Line Items] | |||||||||
Temporary equity, shares issued | shares | 350,000 | ||||||||
Repayment of long term line of credit | $ 102,000,000 | ||||||||
Temporary equity, liquidation preference | $ 100,000,000 | ||||||||
Series A Redeemable Perpetual Preferred Stock | Securities Purchase Agreement, Additional Closings | |||||||||
Temporary Equity [Line Items] | |||||||||
Stock issued (in shares) | shares | 150,000 | ||||||||
Common Stock | |||||||||
Temporary Equity [Line Items] | |||||||||
Debt issuance costs | $ 33,100,000 | ||||||||
Common Stock | Securities Purchase Agreement | |||||||||
Temporary Equity [Line Items] | |||||||||
Stock issued (in shares) | shares | 7,098,765 | ||||||||
Common Stock | Securities Purchase Agreement, Expiry or Termination | BCP Helios Aggregator L.P. | |||||||||
Temporary Equity [Line Items] | |||||||||
Stock issued (in shares) | shares | 776,235 | ||||||||
Net proceeds from sale of series A perpetual preferred stock | $ 776 | ||||||||
Common Stock | Securities Purchase Agreement, Additional Closings | |||||||||
Temporary Equity [Line Items] | |||||||||
Stock issued (in shares) | shares | 3,375,000 | ||||||||
Common Stock | Securities Purchase Agreement, Additional Closings, Certain Pricing Adjustments | |||||||||
Temporary Equity [Line Items] | |||||||||
Stock issued (in shares) | shares | 6,100,000 |
Revenue (Details)
Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | Dec. 31, 2021 | |
Disaggregation of Revenue [Line Items] | |||||
Revenue | $ 424,929 | $ 196,516 | $ 725,515 | $ 444,756 | |
Unbilled receivables | 111,908 | 111,908 | $ 111,224 | ||
Deferred revenue | 167,556 | 167,556 | $ 99,575 | ||
Deferred revenue recognized | $ 61,800 | ||||
Percentage of deferred revenue recognized | 62% | ||||
Remaining performance obligation | $ 477,000 | $ 477,000 | |||
Percentage of performance obligation to be recognized | 100% | 100% | |||
Bill-and-hold Obligations | |||||
Disaggregation of Revenue [Line Items] | |||||
Revenue | $ 0 | ||||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-07-01 | |||||
Disaggregation of Revenue [Line Items] | |||||
Remaining performance obligation, period | 12 months | 12 months | |||
Over-time revenue | |||||
Disaggregation of Revenue [Line Items] | |||||
Revenue | $ 329,915 | 114,548 | $ 537,986 | 232,398 | |
Over-time revenue | Revision of Prior Period, Adjustment | |||||
Disaggregation of Revenue [Line Items] | |||||
Revenue | (185,100) | ||||
Point in time revenue | |||||
Disaggregation of Revenue [Line Items] | |||||
Revenue | $ 95,014 | $ 81,968 | $ 187,529 | 212,358 | |
Point in time revenue | Revision of Prior Period, Adjustment | |||||
Disaggregation of Revenue [Line Items] | |||||
Revenue | $ 185,100 |
Loss Per Share - Schedule of ea
Loss Per Share - Schedule of earnings per share, basic and diluted (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Earnings Per Share [Abstract] | ||||
Net loss | $ (2,777) | $ (5,517) | $ (24,831) | $ (941) |
Preferred dividends and accretion | 12,182 | 0 | 23,788 | 0 |
Net loss to common shareholders | $ (14,959) | $ (5,517) | $ (48,619) | $ (941) |
Basic: | ||||
Weighted-average shares (in shares) | 150,203 | 126,994 | 149,246 | 126,994 |
Loss per share (in dollars per share) | $ (0.10) | $ (0.04) | $ (0.33) | $ (0.01) |
Diluted: | ||||
Weighted average shares (in shares) | 150,203 | 126,994 | 149,246 | 126,994 |
Loss per share (in dollars per share) | $ (0.10) | $ (0.04) | $ (0.33) | $ (0.01) |
Loss Per Share - Narrative (Det
Loss Per Share - Narrative (Details) - shares | 6 Months Ended | 12 Months Ended |
Jun. 30, 2022 | Dec. 31, 2021 | |
Earnings Per Share [Abstract] | ||
Equity compensation anti-dilutive securities (in shares) | 2,413,230 | 970,424 |
Commitments and Contingencies -
Commitments and Contingencies - Narrative (Details) - USD ($) $ in Thousands | 6 Months Ended | ||||||
Jul. 15, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Dec. 31, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Dec. 31, 2020 | |
Nextracker Litigation | Settled Litigation | Subsequent event | |||||||
Business Acquisition, Contingent Consideration [Line Items] | |||||||
Loss contingency, damages awarded, value | $ 42,800 | ||||||
Surety Bond | |||||||
Business Acquisition, Contingent Consideration [Line Items] | |||||||
Contractual obligation | $ 189,800 | ||||||
Array Legacy Operations | Tax Receivable Agreement | |||||||
Business Acquisition, Contingent Consideration [Line Items] | |||||||
Contingent consideration | $ 7,686 | $ 9,364 | $ 14,577 | $ 12,016 | $ 19,839 | $ 19,691 | |
Tax Receivable Agreement, payment term | 125 days |
Commitments and Contingencies_2
Commitments and Contingencies - Summary of liability related to estimated contingent consideration (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Business Combination, Contingent Consideration Arrangements, Change In Amount Of Contingent Consideration [Roll Forward] | ||||
Payments | $ (1,483) | $ (7,810) | ||
Fair value adjustment | $ (1,678) | $ (13) | (5,409) | 135 |
Array Legacy Operations | Tax Receivable Agreement | ||||
Business Combination, Contingent Consideration Arrangements, Change In Amount Of Contingent Consideration [Roll Forward] | ||||
Beginning balance | 9,364 | 19,839 | 14,577 | 19,691 |
Payments | 0 | (7,810) | (1,483) | (7,810) |
Fair value adjustment | (1,678) | (13) | (5,408) | 135 |
Ending balance | $ 7,686 | $ 12,016 | $ 7,686 | $ 12,016 |
Fair Value of Financial Instr_3
Fair Value of Financial Instruments - Schedule of carrying values and estimated fair values of debt instruments (Details) - Convertible Debt - USD ($) $ in Thousands | Jun. 30, 2022 | Dec. 31, 2021 |
Fair Value, Concentration of Risk, Financial Statement Captions [Line Items] | ||
1.00% Senior unsecured convertible notes, net (1) | $ 412,808 | $ 411,863 |
Convertible senior notes, fair value | $ 299,506 | $ 410,771 |
Equity-Based Compensation - Nar
Equity-Based Compensation - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||||||
May 19, 2020 | Mar. 28, 2020 | Nov. 19, 2019 | Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | Oct. 14, 2020 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Expected volatility rate | 66% | |||||||
Risk free interest rate | 0.28% | |||||||
Forfeitures in period (in shares) | (119,067) | (57,424,000) | (119,067) | (57,424,000) | ||||
Class B units | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Equity based compensation | $ 8.9 | |||||||
RSUs | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Shares granted in period (in shares) | 1,378,851 | |||||||
PSUs | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Shares granted in period (in shares) | 451,671 | |||||||
Vesting period | 3 years | |||||||
Equity grants | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Equity based compensation | $ 3 | $ 4.1 | $ 7.5 | $ 12 | ||||
Equity grants | Class B units | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Shares granted in period (in shares) | 4,344,941 | 22,326,653 | ||||||
Unrecognized compensation costs | $ 25.4 | $ 25.4 | ||||||
Unrecognized compensation costs, period of recognition | 2 years 4 months 24 days | |||||||
Equity grants | Class C Units | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Shares granted in period (in shares) | 1,000 | |||||||
2020 Plan | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Authorized shares | 6,683,919 |
Equity-Based Compensation - Sch
Equity-Based Compensation - Schedule of RSU Activity (Details) | 6 Months Ended |
Jun. 30, 2022 $ / shares shares | |
RSUs | |
Number of Shares | |
Unvested, beginning balance (in shares) | shares | 930,409 |
Granted (in shares) | shares | 1,378,851 |
Vested (in shares) | shares | (248,661) |
Forfeited (in shares) | shares | (99,040) |
Unvested, ending balance (in shares) | shares | 1,961,559 |
Weighted Average Grant Date Fair Value | |
Unvested, weighted average grant date fair value, beginning balance (in dollars per share) | $ / shares | $ 21.66 |
Granted, weighted average grand date fair value (in dollars per share) | $ / shares | 9.99 |
Vested, weighted average grand date fair value (in dollars per share) | $ / shares | 19.14 |
Forfeited, weighted average grand date fair value (in dollars per share) | $ / shares | 19.89 |
Unvested, weighted average grant date fair value, ending balance (in dollars per share) | $ / shares | $ 14.05 |
PSUs | |
Number of Shares | |
Unvested, beginning balance (in shares) | shares | 147,687 |
Granted (in shares) | shares | 451,671 |
Vested (in shares) | shares | 0 |
Forfeited (in shares) | shares | (20,027) |
Unvested, ending balance (in shares) | shares | 579,331 |
Weighted Average Grant Date Fair Value | |
Unvested, weighted average grant date fair value, beginning balance (in dollars per share) | $ / shares | $ 27.75 |
Granted, weighted average grand date fair value (in dollars per share) | $ / shares | 10.63 |
Vested, weighted average grand date fair value (in dollars per share) | $ / shares | 0 |
Forfeited, weighted average grand date fair value (in dollars per share) | $ / shares | 30.74 |
Unvested, weighted average grant date fair value, ending balance (in dollars per share) | $ / shares | $ 14.30 |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) $ in Thousands | Jun. 30, 2022 | Dec. 31, 2021 |
Related Party Transactions [Abstract] | ||
Accounts payable - related party | $ 478 | $ 610 |
Segment Reporting - Narrative (
Segment Reporting - Narrative (Details) - segment | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2022 | Dec. 31, 2021 | |
Segment Reporting [Abstract] | |||
Number of operating segments | 2 | 2 | 1 |
Segment Reporting - Schedule of
Segment Reporting - Schedule of Segment Reporting Information, by Segment (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Segment Reporting Information [Line Items] | ||||
Revenue | $ 424,929 | $ 196,516 | $ 725,515 | $ 444,756 |
Gross profit | 47,376 | 20,507 | 73,963 | 66,673 |
Array Legacy Operations | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 352,241 | 196,516 | 602,893 | 444,756 |
Gross profit | 38,904 | $ 20,507 | 60,172 | $ 66,673 |
STI Operations | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 72,688 | 122,622 | ||
Gross profit | $ 8,472 | $ 13,791 |
Subsequent Events - Narrative (
Subsequent Events - Narrative (Details) $ in Millions | Jul. 15, 2022 USD ($) |
Nextracker Litigation | Settled Litigation | Subsequent event | |
Subsequent Event [Line Items] | |
Loss contingency, damages awarded, value | $ 42.8 |