What changed in this filing

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Item 1. Financial Statements

2024-11-07 compared with 2024-08-08 · 230 added, 173 removed, 576 unchanged (41% of the section changed)

3 unchanged sentences

(in thousands, except per share and share amounts)

June 30, 2024 December 31, 2023

September 30, 2024 December 31, 2023

Current assets

31 unchanged sentences

(in thousands, except per share and share amounts)

June 30, 2024 December 31, 2023

September 30, 2024 December 31, 2023

Commitments and contingencies (Note 11)

1 unchanged sentence

500,000 authorized;

446,541 and 432,759 shares issued as of June 30, 2024 and December 31, 2023, respectively;

453,674 and 432,759 shares issued as of September 30, 2024 and December 31, 2023, respectively;

liquidation preference of $ 493.1 million at both dates

14 unchanged sentences

(in thousands, except per share amounts)

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

2024 2023 2024 2023

9 unchanged sentences

Depreciation and amortization 8,880 9,552 27,384 29,361

Goodwill impairment 162,000 — 162,000 —

Total operating expenses 210,990 47,174 304,017 147,418

Income from operations 39,602 96,241 48,016 143,699

Other (loss) income, net ( 1,794 ) 125 ( 980 ) 319

(Loss) income from operations

( 132,675 ) 40,205 ( 84,659 ) 183,904

Other loss, net

( 682 ) ( 446 ) ( 1,662 ) ( 127 )

Interest income 4,223 3,425 12,685 6,124

2 unchanged sentences

Total other expense, net ( 4,829 ) ( 9,878 ) ( 15,868 ) ( 29,102 )

Income before income tax expense 33,508 86,517 36,977 124,475

(Loss) income before income tax expense

( 137,504 ) 30,327 ( 100,527 ) 154,802

Income tax expense 3,850 7,229 12,964 36,904

Net income 25,698 65,165 27,863 94,800

Net (loss) income

( 141,354 ) 23,098 ( 113,491 ) 117,898

Preferred dividends and accretion 14,080 13,091 41,332 38,359

Net income to common shareholders $ 11,949 $ 52,381 $ 612 $ 69,532

Income per common share

Net (loss) income to common shareholders

$ ( 155,434 ) $ 10,007 $ ( 154,823 ) $ 79,539

(Loss) income per common share

Basic $ ( 1.02 ) $ 0.07 $ ( 1.02 ) $ 0.52

7 unchanged sentences

(in thousands)

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

2024 2023 2024 2023

Net income $ 25,698 $ 65,165 $ 27,863 $ 94,800

Net (loss) income

$ ( 141,354 ) $ 23,098 $ ( 113,491 ) $ 117,898

Foreign currency translation (1)

6 unchanged sentences

(in thousands)

Three Months Ended June 30, 2024

Three Months Ended September 30, 2024

Temporary Equity Permanent Equity

1 unchanged sentence

Shares Amount Shares Amount Shares Amount Additional Paid-In Capital Accumulated Deficit Accumulated Other Comprehensive Income Total Stockholders’ Equity

Balance at March 31, 2024 439 $ 364,762 — $ — 151,727 $ 151 $ 333,570 $ ( 128,065 ) $ 25,568 $ 231,224

Balance at June 30, 2024 446 $ 378,512 — $ — 151,875 $ 151 $ 320,379 $ ( 102,367 ) $ ( 18,200 ) $ 199,963

Equity-based compensation — — — — 59 — 2,060 — — 2,060

1 unchanged sentence

Preferred cumulative dividends plus accretion 7 14,080 — — — — ( 14,080 ) — — ( 14,080 )

Net income — — — — — — — 25,698 — 25,698

— — — — — — — ( 141,354 ) — ( 141,354 )

Foreign currency translation — — — — — — — — 17,910 17,910

Balance at June 30, 2024 446 $ 378,512 — $ — 151,875 $ 151 $ 320,379 $ ( 102,367 ) $ ( 18,200 ) $ 199,963

Balance at September 30, 2024 453 $ 392,592 — $ — 151,934 $ 151 $ 308,347 $ ( 243,721 ) $ ( 290 ) $ 64,487

Array Technologies, Inc.

1 unchanged sentence

(in thousands)

Three Months Ended June 30, 2023

Three Months Ended September 30, 2023

Temporary Equity Permanent Equity

1 unchanged sentence

Shares Amount Shares Amount Shares Amount Additional Paid-In Capital Accumulated Deficit Accumulated Other Comprehensive Income Total Stockholders’ Equity

Balance at March 31, 2023 413 $ 312,054 — $ — 150,823 $ 150 $ 373,307 $ ( 237,835 ) $ 22,297 $ 157,919

Balance at June 30, 2023 419 $ 324,838 — $ — 151,049 $ 151 $ 364,710 $ ( 172,670 ) $ 46,209 $ 238,400

Equity-based compensation — — — — 22 — 3,383 — — 3,383

2 unchanged sentences

Other comprehensive income — — — — — — — ( 22,495 ) ( 22,495 )

Balance at June 30, 2023 419 $ 324,838 — $ — 151,049 $ 151 $ 364,710 $ ( 172,670 ) $ 46,209 $ 238,400

Balance at September 30, 2023 426 $ 337,929 — $ — 151,071 $ 151 $ 355,002 $ ( 149,572 ) $ 23,714 $ 229,295

Array Technologies, Inc.

1 unchanged sentence

(in thousands)

Six Months Ended June 30, 2024

Nine Months Ended September 30, 2024

Temporary Equity Permanent Equity

5 unchanged sentences

Preferred cumulative dividends plus accretion 21 41,332 — — — — ( 41,332 ) — — ( 41,332 )

Net income — — — — — — — 27,863 — 27,863

— — — — — — — ( 113,491 ) — ( 113,491 )

Foreign currency translation — — — — — — — — ( 45,100 ) ( 45,100 )

Balance at June 30, 2024 446 $ 378,512 — $ — 151,875 $ 151 $ 320,379 $ ( 102,367 ) $ ( 18,200 ) $ 199,963

Balance at September 30, 2024 453 $ 392,592 — $ — 151,934 $ 151 $ 308,347 $ ( 243,721 ) $ ( 290 ) $ 64,487

Array Technologies, Inc.

1 unchanged sentence

(in thousands)

Six Months Ended June 30, 2023

Nine Months Ended September 30, 2023

Temporary Equity Permanent Equity

Series A Redeemable Perpetual Preferred Stock Preferred Stock Common Stock

Shares Amount Shares Amount Shares Amount Additional Paid-In Capital Accumulated Deficit Accumulated Other Comprehensive Income Total Stockholders’ Equity

Shares Amount Shares Amount Shares Amount Additional Paid-In Capital Accumulated Deficit Accumulated Other Comprehensive Income

Total Stockholders’ Equity

Balance at December 31, 2022 406 $ 299,570 — $ — 150,513 150 383,176 ( 267,470 ) 8,425 124,281

3 unchanged sentences

Foreign currency translation — — — — — — — — 15,289 15,289

Balance at June 30, 2023 419 $ 324,838 — $ — 151,049 151 364,710 ( 172,670 ) 46,209 238,400

Balance at September 30, 2023 426 $ 337,929 — $ — 151,071 $ 151 $ 355,002 $ ( 149,572 ) $ 23,714 $ 229,295

See accompanying Notes to Condensed Consolidated Financial Statements.

2 unchanged sentences

(in thousands)

Six Months Ended June 30,

Nine Months Ended September 30,

Operating activities

Net income $ 27,863 $ 94,800

Net (loss) income $ ( 113,491 ) $ 117,898

Adjustments to net income:

Goodwill impairment 162,000 —

Provision for bad debts 3,415 ( 117 )

21 unchanged sentences

Retirement/disposal of property, plant and equipment 38 —

Net cash used in investing activities ( 4,488 ) ( 9,424 )

Sale of equity investment

Net cash provided by (used in) investing activities

6,409 ( 11,615 )

Financing activities

6 unchanged sentences

Net cash used in financing activities ( 12,241 ) ( 84,442 )

Effect of exchange rate changes on cash and cash equivalent balances ( 9,587 ) 4,447

Net change in cash and cash equivalents 33,240 22,065

Cash and cash equivalents, beginning of period 249,080 133,901

Array Technologies, Inc.

1 unchanged sentence

(in thousands)

Six Months Ended June 30,

Nine Months Ended September 30,

Effect of exchange rate changes on cash and cash equivalent balances ( 7,270 ) ( 1,808 )

Net change in cash and cash equivalents 83,292 40,109

Cash and cash equivalents, beginning of period 249,080 133,901

Cash and cash equivalents, end of period $ 332,372 $ 174,010

17 unchanged sentences

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, 2024, are not necessarily indicative of results to be expected for the year ending December 31, 2024, or any other interim periods, or any future year or period.

The results for the three and nine months ended September 30, 2024, are not necessarily indicative of results to be expected for the year ending December 31, 2024, or any other interim periods, or any future year or period.

The balance sheet as of December 31, 2023, included herein was derived from the audited financial statements as of that date.

1 unchanged sentence

These condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2023, filed with the SEC on February 28, 2024.

The preparation of these condensed consolidated financial statements and accompanying notes requires management to make estimates and assumptions that affect the amounts reported.

Actual results could differ materially from those estimates.

Unless expressly stated or the context otherwise requires, the terms “the Company”, “we”, “us”, “our”, “Array”, and “Array Technologies” refer to Array Technologies, Inc.

2 unchanged sentences

Software Implementation Costs

During the first quarter the Company reclassified capitalized software costs recorded as Property, plant and equipment, net to Intangible assets, net on the condensed consolidated balance sheets.

During the first quarter of 2024, the Company reclassified capitalized software costs recorded as Property, plant and equipment, net to Intangible assets, net on the condensed consolidated balance sheets.

The reclassification was recorded retrospectively and resulted in a $ 4.0 million increase to Intangible assets, net at December 31, 2023, with a corresponding decrease in the same amount to Property, plant and equipment, net.

These reclassifications did not impact the Company’s operating income (loss), net income (loss), earnings (loss) per share, or statements of cash flows for any current or historical periods.

Amortization of Developed Technology

Beginning in the third quarter of 2023, the Company retrospectively reclassified amounts recorded for amortization of certain acquired intangible assets in prior presentations from Total operating expenses under the caption "Depreciation and amortization" to Total cost of revenue under the caption "Amortization of developed technology" in the condensed consolidated statements of operations.

The Company believes this presentation enhances the comparability of the Company’s financial statements to industry peers.

These reclassifications did not impact the Company’s operating income (loss), net income (loss) or earnings (loss) per share for any current or historical periods.

These reclassifications also did not impact the condensed consolidated balance sheets or condensed consolidated statements of cash flows.

Brazil Value-Added Tax Benefit

Revenue in 2023, excludes a Brazil value-added tax benefit, Imposto sobre Circulação de Mercadorias e Servicos (“ICMS”), that has been reclassified and included in cost of revenues for all periods presented.

For the six months ended June 30, 2023, the Brazil ICMS value-added tax benefit was $ 13.2 million, which has been included in cost of sales.

Revenue in 2023, excludes a Brazil value-added tax benefit, Imposto sobre Circulação de Mercadorias e Servicos (“ICMS”), that has been reclassified and included in cost of product and service revenue for all periods presented.

For the nine months ended September 30, 2023, the Brazil ICMS value-added tax benefit was $ 19.9 million, which has been included in cost of product and service revenue.

This reclassification had no impact on the Company’s gross profit, income (loss) from operations, net income or income (loss) per common share in the current period.

These reclassifications also did not impact the condensed consolidated balance sheets or condensed consolidated statements of cash flows.

This reclassification also did not impact the condensed consolidated balance sheets or condensed consolidated statements of cash flows.

Divestiture of Investment in Equity Securities

In June 2024, we divested 100 % percent of our equity investment in preferred stock of a private company we purchased in 2021.

In June 2024, we divested 100 % of our equity investment in preferred stock of a private company we purchased in 2021.

We received $ 12.0 million in proceeds for the divestiture in July 2024.

We recorded a receivable in the amount of $ 12.0 million included in Prepaid expenses and other on the condensed consolidated balance sheet at June 30, 2024.

No gain or loss resulted from this transaction.

Principles of Consolidation

The condensed consolidated financial statements include the accounts of the Company 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, the disclosure of contingent assets and liabilities and the reported amounts of revenues and expenses during the reporting period.

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 condensed consolidated financial statements.

Estimates and assumptions are reviewed periodically, and the effects of revisions are reflected in the period they occur.

Goodwill and Indefinite-Lived Intangible Assets

Goodwill represents the excess of the consideration transferred over the estimated fair value of assets acquired and liabilities assumed in a business combination.

Intangible assets are measured at their respective fair values as of the acquisition date and may be subject to adjustment within the measurement period, which may be up to one year from the acquisition date.

The Company does not amortize goodwill but instead tests goodwill for impairment annually, or more frequently if events or changes in circumstances indicate that it is more likely than not that the asset is impaired.

Such triggering events potentially warranting an annual or interim goodwill impairment assessment include, among other factors, declines in historical or projected revenue, operating income or cash flows, and sustained decreases in the Company’s stock price or market capitalization.

Goodwill is assessed for impairment using either a qualitative assessment or quantitative approach to determine whether it is more likely than not that the fair value of the reporting unit is less than the carrying amount.

The qualitative assessment evaluates factors including macroeconomic conditions, industry-specific and company-specific considerations, legal and regulatory environments, and historical performance.

If the Company cannot determine if it is more likely than not that the fair value of a reporting unit is greater than its carrying value, a quantitative assessment is performed.

The quantitative approach compares the estimated fair value of the reporting unit to its carrying amount, including goodwill.

Impairment is indicated if the estimated fair value or the reporting unit is less than the carrying amount of the reporting unit, and an impairment charge is recognized for the differential.

When determining the fair value of a reporting unit using the quantitative approach, we determine the fair value of the reporting unit using an income approach based on discounted cash flows.

The fair value determined under the income approach is then compared to guideline publicly-traded companies (“GPC”) market place EBITDA multiples to corroborate the fair value of the reporting unit determined under the income approach.

During the three months ended September 30, 2024, the Company identified certain indicators of impairment, and as a result, performed an interim quantitative goodwill impairment test, which resulted in an impairment of goodwill of $ 162.0 million.

See Note 5 – Goodwill and Other Intangibles for additional information.

The Company has one indefinite-lived intangible asset for a Trade name it acquired as part of a past acquisition.

The Company performs an annual impairment test on its Trade name indefinite-lived intangible asset, utilizing a qualitative or quantitative impairment analysis during the fourth quarter of each year.

There were no indicators of impairment associated with this Trade name.

Long-Lived Assets

When events, circumstances or operating results indicate that the carrying values of long-lived assets, including our finite lived intangible assets, might not be recoverable through future operations, the Company prepares projections of the undiscounted future cash flows expected to be generated from the underlying asset group and the cash flows resulting from the asset groupings eventual disposition.

If the projections indicate that the underlying asset grouping is not expected to be recoverable, the asset group is reduced to its estimated fair value.

During the three months ended September 30, 2024, the Company identified indicators of impairment associated with certain asset groups, and as a result, performed an undiscounted cash flow test, which resulted in no impairment.

Refer to Note 5 for further information.

Revenue Recognition

A majority of our revenue is recognized over time as work progresses, and for single performance obligations, we use an input measure, the cost-to-cost method, to determine progress.

We review and update the contract related estimates on an ongoing basis and recognize adjustments for any project specific facts and circumstances that could impact the measurement of the extent of progress such as the total costs to complete the contracts, under the cumulative catch-up method.

Due to the relatively short duration of our outstanding performance obligations, and our ability to estimate the remaining costs to be incurred, which are substantially all material costs covered under our material supply agreements with our suppliers, we have not recorded any material catch-up adjustments for the periods presented that would have impacted revenues or EPS related to revisions in our measurement of remaining progress of our performance obligations.

Research and Development

2 unchanged sentences

The Company expenses these costs as incurred prior to a respective product being ready for commercial production.

Research and development expense was $ 1.8 million and $ 2.3 million during the three months ended June 30, 2024 and 2023, respectively, and $ 3.7 million and $ 4.4 million during the six months ended June 30, 2024 and 2023, respectively.

Impact of the Ongoing Russian-Ukraine Conflict

The ongoing Russian-Ukraine conflict 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 the ultimate severity or duration of the conflict, but we continue to monitor the situation and evaluate our procurement strategy and supply chain as to reduce any negative impact on our business, financial condition, and results of operations.

Impact of Attacks on Shipping in the Red Sea

The disruption of container shipping traffic through the Red Sea has created port congestion, especially in Asia, again temporarily elongating transit times, capacity, and shipping costs for routes connecting the rest of the world with Asia.

To address the challenges arising from prolonged transit times, we have increased our local sourcing efforts where feasible within certain regions.

These measures are required to ensure we fulfill our delivery commitments to customer projects on time.

There is still uncertainly on how long these disruptions and the severity of their impact on our operations will last, but we continue to monitor the situation and evaluate our procurement and supply chain strategies, as to reduce any negative impact on our business, financial condition, and results of operations.

Inflationary pressures persist and may continue to negatively impact our results of operations.

To mitigate the inflationary pressures on our business, despite our ASPs decreasing due to the current deflationary environment for steel more than offsetting the inflationary environment for aluminum, we have continued to accelerate our productivity initiatives, expanded our supplier base, and continued to execute on our cost containment practices.

Vendor Rebates

Research and development expense was $ 1.6 million and $ 2.0 million during the three months ended September 30, 2024 and 2023, respectively, and $ 5.3 million and $ 6.4 million during the nine months ended September 30, 2024 and 2023, respectively.

Inflation Reduction Act Vendor Rebates

On August 16, 2022, the Inflation Reduction Act of 2022 (“IRA”) was enacted into law, which includes numerous green energy credits.

2 unchanged sentences

The Company has, and will continue to enter into, arrangements with manufacturing vendors that produce 45X Credit eligible parts, in which the vendors agree to share a portion of the benefit received related to Array purchases, in the form of “Vendor Rebates.”

The Company accounts for these Vendor Rebates as a reduction of the purchase prices of the vendors’ products and therefore a reduction in the cost of inventory until the inventory is sold, at which time the Company recognizes such rebates as a reduction of cost of revenues on the consolidated statements of

As of June 30, 2024, the Company had outstanding Vendor Rebates of $ 68.4 million, of which $ 45.8 million was included in Prepaid expenses and other and $ 22.6 million was included in Other assets on the condensed consolidated balance sheets.

As of December 31, 2023, the Company had outstanding Vendor Rebates of $ 48.4 million included in Prepaid expenses and other.

As of September 30, 2024, the Company had outstanding Vendor Rebate receivable of $ 91.6 million, of which $ 54.3 million was included in Prepaid expenses and other (current) and $ 37.3 million was included in Other assets (non-current) on the condensed consolidated balance sheets.

As of December 31, 2023, the Company had outstanding Vendor Rebate receivable of $ 48.4 million included in Prepaid expenses and other.

Inflation Reduction Act 45X Credits

1 unchanged sentence

The reduction to production costs, from the 45X Advanced Manufacturing Tax credit, is excluded from federal and state income taxes.

The tax credit is included in Prepaid and other assets on the condensed consolidated balance sheet dated June 30, 2024.

During the three months ended June 30, 2024, the Company concluded that certain parts manufactured by the Company qualify for the 45X Advanced Manufacturing Production Credits.

As a result, the Company recorded it an immaterial cumulative catch-up for 45X Advanced Manufacturing Production Credits related to torque tubes manufactured by the Company and sold from January 1, 2023 through March 31, 2024.

The tax credit is included in Prepaid and other assets on the condensed consolidated balance sheet dated September 30, 2024.

During the second quarter of 2024, the Company concluded that certain parts manufactured by the Company qualify for the 45X Advanced Manufacturing Production Credits.

Foreign Currency Translation

14 unchanged sentences

Public entities with a single reportable segment will also be required to provide the new disclosures and all the disclosures required under ASC 280.

The guidance is effective for fiscal years beginning after December 15, 2023, and for interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted.

The amendments in this ASU should be applied retrospectively to all periods presented

unless it is impracticable.

The guidance is effective for fiscal years beginning after

December 15, 2023, and for interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted.

The amendments in this ASU should be applied retrospectively to all periods presented unless it is impracticable.

The Company is assessing the effect on our consolidated financial statement disclosures;

however, adoption will not impact our consolidated balance sheets or statements of operations.

In March 2023, the Company adopted ASU 2020-04 and 2022-06, Reference Rate Reform (Topic 848), and amended an existing debt agreement to replace the London Interbank Offered Rate (“LIBOR”) interest rate provisions with interest rate provisions based on a forward-looking term rate based on the secured overnight funding rate (“SOFR”) (see Note 7 – Debt ).

There were no other changes to the agreement.

There was no significant impact to the Company’s condensed consolidated financial statements.

In March 2024, the U.S.

Securities and Exchange Commission (“SEC”) adopted the final rule under SEC Release No.

33-11275, The Enhancement and Standardization of Climate-Related Disclosures for Investors.

The rule would require registrants to disclose certain climate-related information in registration statements and annual reports.

In April 2024, the SEC voluntarily stayed the final rule as a result of pending legal challenges.

The disclosure requirements would apply to the Company’s fiscal year beginning January 1, 2025, pending resolution of the stay.

The Company is currently evaluating the final rule to determine its impact on the Company’s disclosures.

Immaterial Correction of 2023 Interim Period Condensed Consolidated Financial Statements

6 unchanged sentences

During the three months ended December 31, 2023, after consultation with the staff of the Office of the Chief Accountant of the SEC, the Company concluded that the original equity classification accounting treatment was acceptable.

As a result, the Company reclassified the derivative asset recognized at June 30, 2023, as a reduction to equity and reversed the related mark to market adjustments recognized during the six months ended June 30, 2023.

As a result, the Company reclassified the derivative asset recognized at September 30, 2023, as a reduction to equity and reversed the related mark to market adjustments recognized during the nine months ended September 30, 2023.

Redeemable Perpetual Preferred Stock

2 unchanged sentences

During the fourth quarter of 2023, after consultation with the staff of the Office of the Chief Accountant of the SEC, the Company concluded that the original equity accounting classification was correct.

As a result, the Company reclassified the derivative asset recognized during the six months ended June 30, 2023, as a reduction of equity and also reversed the related fair value adjustments.

Management evaluated the above misstatements and concluded they were not material to the six months ended June 30, 2023, individually or in aggregate.

The following tables reflect the effects of the correction on all affected line items of the Company’s previously reported condensed consolidated financial statements to be presented as comparative in the Form 10-Q for the six months ended June 30, 2024:

As a result, the Company reclassified the derivative asset recognized during the nine months ended September 30, 2023, as a reduction of equity and also reversed the related fair value adjustments.

Management evaluated the above misstatements and concluded they were not material to the nine months ended September 30, 2023, individually or in aggregate.

Condensed Consolidated Statements of Operations (unaudited)

Three Months Ended June 30, 2023 Six Months Ended June 30, 2023

Three Months Ended September 30, 2023 Nine Months Ended September 30, 2023

(in thousands)

3 unchanged sentences

Total other income (expense)

( 9,762 ) ( 116 ) ( 9,878 ) ( 30,242 ) 1,140 ( 29,102 )

Income (loss) before income tax expense 30,443 ( 116 ) 30,327 153,662 1,140 154,802

1 unchanged sentence

7,229 — 7,229 39,508 ( 2,604 ) 36,904

Net income 64,808 357 65,165 90,940 3,860 94,800

Net income to common shareholders 52,024 357 52,381 65,672 3,860 69,532

Net income (loss)

23,214 ( 116 ) 23,098 114,154 3,744 117,898

Net income (loss) to common shareholders

10,123 ( 116 ) 10,007 75,795 3,744 79,539

Income per common share

2 unchanged sentences

Condensed Consolidated Statements of Comprehensive Income (Loss) (unaudited)

Three Months Ended June 30, 2023 Six Months Ended June 30, 2023

Three Months Ended September 30, 2023 Nine Months Ended September 30, 2023

(in thousands)

As Previously Reported Adjustments As Corrected As Previously Reported Adjustments As Corrected

Net income $ 64,808 $ 357 $ 65,165 $ 90,940 $ 3,860 $ 94,800

Comprehensive income $ 88,720 $ 357 $ 89,077 $ 128,724 $ 3,860 $ 132,584

Net income (loss)

$ 23,214 $ ( 116 ) $ 23,098 $ 114,154 $ 3,744 $ 117,898

Comprehensive income (loss)

$ 719 $ ( 116 ) $ 603 $ 129,443 $ 3,744 $ 133,187

Condensed Consolidated Statements of Changes in Redeemable Perpetual Preferred Stock and Stockholders’ Equity (unaudited)

Three Months Ended June 30, 2023

Three Months Ended September 30, 2023

(in thousands)

1 unchanged sentence

As Previously Reported

Balance at March 31, 2023 $ 426,221 $ ( 241,338 ) $ 207,330

Balance at June 30, 2023

$ 417,624 $ ( 176,530 ) $ 287,454

— 23,214 23,214

Balance at September 30, 2023

407,916 ( 153,316 ) 278,465

Balance at June 30, 2023

Balance at March 31, 2023 ( 52,914 ) 3,503 ( 49,411 )

Net income — 357 357

Balance at March 31, 2023 373,307 ( 237,835 ) 157,919

( 52,914 ) 3,860 ( 49,054 )

— ( 116 ) ( 116 )

Balance at June 30, 2023

Six Months Ended June 30, 2023

364,710 ( 172,670 ) 238,400

— 23,098 23,098

Balance at September 30, 2023

$ 355,002 $ ( 149,572 ) $ 229,295

Nine Months Ended September 30, 2023

(in thousands) Additional Paid-In Capital Accumulated Deficit Total Stockholders’ Equity

5 unchanged sentences

— 114,154 114,154

Balance at June 30, 2023 417,624 ( 176,530 ) 287,454

Balance at September 30, 2023

407,916 ( 153,316 ) 278,465

Correction of the Capped Call and Put Option errors

5 unchanged sentences

— 117,898 117,898

Balance at June 30, 2023 $ 364,710 $ ( 172,670 ) $ 238,400

Balance at September 30, 2023

$ 355,002 $ ( 149,572 ) $ 229,295

Condensed Consolidated Statements of Cash Flows (unaudited)

Six Months Ended June 30, 2023

Nine Months Ended September 30, 2023

(in thousands) As Previously Reported Adjustments As Corrected

7 unchanged sentences

Inventories consisted of the following (in thousands):

June 30, 2024 December 31, 2023

September 30, 2024 December 31, 2023

Raw materials $ 47,389 $ 86,614

2 unchanged sentences

The Company values a portion of its inventory using the moving average cost method that approximates the first-in, first-out method (“FIFO”).

As of June 30, 2024, inventory valued using moving average cost and FIFO was $ 137.1 million and $ 28.5 million, respectively.

As of September 30, 2024, inventory valued using moving average cost and FIFO was $ 154.6 million and $ 41.1 million, respectively.

As of December 31, 2023, inventory valued using moving average cost and FIFO, was $ 129.5 million and $ 32.5 million, respectively.

1 unchanged sentence

Property, plant and equipment consisted of the following (in thousands, except useful lives):

Estimated Useful Lives (Years) June 30, 2024 December 31, 2023

Estimated Useful Lives (Years) September 30, 2024 December 31, 2023

Land N/A $ 1,647 $ 1,634

8 unchanged sentences

Property, plant and equipment, net $ 27,629 $ 27,893

Depreciation expense was $ 1.1 million and $ 0.6 million for the three months ended June 30, 2024 and 2023, respectively, of which $ 0.4 million and $ 0.3 million, respectively, was included in cost of revenue and $ 0.7 million and $ 0.3 million, respectively, was included in depreciation and amortization on the accompanying condensed consolidated statements of operations.

Depreciation expense was $ 2.0 million and $ 1.2 million for the six months ended June 30, 2024 and 2023, respectively, of which $ 0.9 million and $ 0.6 million, respectively, was included in cost of revenue and $ 1.1 million and $ 0.6 million, respectively, was included in depreciation and amortization on the accompanying condensed consolidated statements of operations.

Depreciation expense was $ 1.3 million and $ 0.7 million for the three months ended September 30, 2024 and 2023, respectively, of which $ 0.7 million and $ 0.4 million, respectively, was included in cost of product and service revenue and $ 0.6 million and $ 0.3 million, respectively, was included in depreciation and amortization on the accompanying condensed consolidated statements of operations.

Depreciation expense was $ 3.3 million and $ 1.9 million for the nine months ended September 30, 2024 and 2023, respectively, of which $ 1.6 million and $ 1.0 million, respectively, was included in cost of product and service revenue and $ 1.7 million and $ 0.9 million, respectively, was included in depreciation and amortization on the accompanying condensed consolidated statements of operations.

Goodwill and Other Intangible Assets, Net

Changes in the carrying amount of goodwill by operating segment during the six months ended June 30, 2024, consisted of the following (in thousands):

Changes in the carrying amount of goodwill by operating segment during the nine months ended September 30, 2024, consisted of the following (in thousands):

Array Legacy Operations

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Foreign currency translation — ( 22,718 ) ( 22,718 )

Impairment charge

— ( 162,000 ) ( 162,000 )

Ending balance (1)

$ 69,727 $ 181,146 $ 250,873

(1) Goodwill attributable to Array Legacy Operations is net of impairment of $ 51.9 million.

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 our most recent evaluation, the Company noted facts and circumstances around its STI Operations, were indicative that the fair value of the STI reporting unit could be less than its carrying value.

Accordingly, with the assistance of a third-party specialist, the Company performed the first step of the goodwill impairment test (“Step One”).

Based on the results of the Step One test, the Company concluded there were no indicators of impairment as of June 30, 2024.

The Company concluded there were no indicators of impairment of the Array Legacy Operations operating unit as of June 30, 2024.

(1) Goodwill attributable to Array Legacy Operations is net of cumulative impairments of $ 51.9 million.

During the three months ended September 30, 2024, the Company experienced a sustained decline in its stock price, which hit a 52-week low during the quarter, resulting in a decrease in market capitalization.

In addition, the Company updated its long-term projections for the Company’s reporting units and further evaluated the execution risk associated with the Company’s projections.

As a result, the Company identified indicators of impairment related to the Company’s reporting units.

Management, with the assistance of a third-party valuation specialist, performed an interim quantitative goodwill impairment test of the Array Legacy Operations and STI Operations reporting unit as of September 30, 2024.

The fair value of the Array Legacy Operations and STI Operations reporting unit were determined using the income approach and then compared to the Guideline publicly traded companies (“GPC”) marketplace EBITDA multiples to corroborate the fair value of the reporting unit.

As a result of these tests, the Company recorded an impairment of goodwill of $ 162.0 million related to STI Operations based on an estimated fair value of the STI Operations reporting unit of $ 455.9 million.

Subsequent to recording the impairment of goodwill, the Company reconciled the overall market capitalization of the Company, within a reasonable range, to the sum of the estimated fair values of both of the Company’s reporting units.

The estimated fair value of the Array Legacy Operations reporting unit was significantly higher than the carrying balance of the reporting unit.

The significant assumptions used in determining the fair value of the STI Operations reporting unit primarily relate to the revenue growth rate, the forecasted EBITDA margin, and the selected discount rate used in the discounted cash flow model under the income approach.

Under the GPC method, the selection of EBITDA multiple to be used requires significant judgement.

To the extent that the discount rate used in determining the present value of our cash flows increases, if we do not meet the cash flow projections for the reporting unit, or GPC multiples in the future decrease, additional impairment charges may be recorded in the future.

In addition, a further decrease in the Company’s common stock share price and market capitalization could be an indication that there has been a further decrease in the fair value of the Company’s reporting units.

Long Lived Assets

As discussed above, there were indicators of impairment that required an interim impairment test for the Legacy Array and STI Operations reporting units.

Management considered these events to be a triggering event requiring the long-lived assets associated with the STI Operations reporting unit be tested for impairment (which includes the amortizable intangible assets) as of September 30, 2024.

Because the sum of future undiscounted cash flows for the underlying asset groups indicated that the carrying amount of the asset groups were recoverable, no impairment charge was recorded.

The difference between the undiscounted cash flows of the Company’s reporting groups and carrying balance of its reporting groups was significant as of September 30, 2024.

As of September 30, 2024, no events or circumstances were noted that would indicate the carrying amount of any of Legacy Array’s asset groups may not be recoverable.

Other Intangible Assets, Net

Other intangible assets consisted of the following (in thousands, except useful lives):

Estimated Useful Lives (Years) June 30, 2024 December 31, 2023

Estimated Useful Lives (Years) September 30, 2024 December 31, 2023

Developed technology 14 $ 203,800 $ 203,800

15 unchanged sentences

Total other intangible assets, net $ 301,599 $ 354,389

Amortization expense related to intangible assets was $ 11.8 million and $ 12.6 million for the three months ended June 30, 2024 and 2023, respectively, of which $ 3.6 million was included in amortization of developed technology, a component of cost of revenue, in both periods and $ 8.1 million and $ 9.0 million, respectively, was included in depreciation and amortization, on the accompanying condensed consolidated statements of operations.

Amortization expense related to intangible assets was $ 24.7 million and $ 26.5 million for the six months ended June 30, 2024 and 2023, respectively, of which $ 7.3 million was included in amortization of developed technology, a component of cost of revenue, in both periods and $ 17.4 million and $ 19.2 million, respectively, was included in depreciation and amortization, on the accompanying condensed consolidated statements of operations.

Estimated future amortization expense of intangible assets as of June 30, 2024, is as follows (in thousands):

Amortization expense related to intangible assets was $ 11.9 million and $ 12.8 million for the three months ended September 30, 2024 and 2023, respectively, of which $ 3.6 million was included in amortization of developed technology, a component of cost of revenue, in both periods and $ 8.3 million and $ 9.2 million, respectively, was included in depreciation and amortization, on the accompanying condensed consolidated statements of operations.

Amortization expense related to intangible assets was $ 36.6 million and $ 39.3 million for the nine months ended September 30, 2024 and 2023, respectively, of which $ 10.9 million was included in amortization of developed technology, a component of cost of revenue, in both periods and $ 25.7 million and $ 28.4 million, respectively, was included in depreciation and amortization, on the accompanying condensed consolidated statements of operations.

Estimated future amortization expense of intangible assets as of September 30, 2024, is as follows (in thousands):

Remainder of 2024 $ 11,987

Thereafter 109,649

Long-lived assets, including both amortizable and non-amortizable intangible assets, are reviewed for impairment whenever events or changes in circumstances indicate the carrying amount of an asset group may not be recoverable.

During the second quarter of 2024, the Company noted facts and circumstances around asset groups at its STI reporting unit were indicative that the fair value could be less than its carrying value.

The Company performed a recoverability test by comparing the sum of the estimated undiscounted future cash flows attributable to the STI asset groups to the net carrying value of the STI asset groups as of June 30, 2024.

The result of the recoverability test indicated the sum of the expected future undiscounted cash flows was greater than the carrying amount of the asset groups of the STI.

Accordingly, we concluded the asset groups of the STI reporting unit were not impaired as of June 30, 2024.

As of June 30, 2024, no events or circumstances were noted that would indicate the carrying amount of any of Legacy Array’s asset groups may not be recoverable.

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).

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The tax effect of discrete items is recorded in the quarter in which the discrete events occur.

The Company recorded income tax expense of $ 7.8 million and $ 21.4 million for the three months ended June 30, 2024 and 2023, respectively, and an expense of $ 9.1 million and $ 29.7 million for the six months ended June 30, 2024 and 2023, respectively.

The income tax expense for the six months ended June 30, 2024, was impacted by legislation in Brazil which resulted in a local tax incentive no longer being exempt from Federal income tax beginning in 2024.

Additionally, tax expense of $ 0.5 million was recorded discretely related to equity-based compensation.

The tax expense for the six months ended June 30, 2023, was unfavorably impacted by higher income reported in non-U.S.

jurisdictions, offset by a tax benefit of $ 1.2 million related to excess equity-based compensation recorded discretely.

For the six months ended June 30, 2024 and 2023, no reserves for uncertain tax positions have been recorded.

The Company recorded income tax expense of $ 3.9 million and $ 7.2 million for the three months ended September 30, 2024 and 2023, respectively, and an expense of $ 13.0 million and $ 36.9 million for the nine months ended September 30, 2024 and 2023, respectively.

The income tax expense for the nine months ended September 30, 2024 was favorably impacted by lower profits in non-US jurisdictions and additional tax credits recorded during the period.

This was partially offset by legislative changes in Brazil where a local tax incentive is no longer being exempt from Federal income tax beginning in 2024.

Additionally, tax expense of $ 0.5 million related to equity-based compensation, was recorded discretely.

No tax benefit was recorded on the goodwill impairment recorded in the nine months ended September 30, 2024, as the goodwill is non-deductible for income tax purposes.

The tax expense for the nine months ended September 30, 2023, was unfavorably impacted by higher income reported in non-U.S.

jurisdictions, offset by a tax benefit of $ 1.2 million related to equity-based compensation recorded discretely.

For the nine months ended September 30, 2024 and 2023, no reserves for uncertain tax positions have been recorded.

The Company will continue to monitor this position each interim period.

The following table summarizes the Company’s total debt (in thousands):

June 30, 2024 December 31, 2023

September 30, 2024 December 31, 2023

Senior Secured Credit Facility:

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Revolving Credit Facility

The Company had no outstanding balance under the Revolving Credit Facility as of both June 30, 2024 and December 31, 2023, $ 15.9 million and $ 24.8 million, respectively, in standby letters of credit, and $ 184.1 million and $ 175.2 million, respectively, available to withdraw.

The Company had no outstanding balance under the Revolving Credit Facility at September 30, 2024 and December 31, 2023.

At September 30, 2024 and December 31, 2023 the Company had $ 16.4 million and $ 24.8 million, respectively, in standby letters of credit, and $ 183.6 million and $ 175.2 million, respectively, available to withdraw.

In accordance with the Third Amendment, the Revolving Credit Facility pays interest at the Company’s election, at either (x) for SOFR Loans at Adjusted Term SOFR (as defined in the Credit Agreement) plus 3.25 % or (y) for Base Rate Loans at the higher of the Prime Rate, one half of 1.00 % above the Federal Funds Rate or the Adjusted Term SOFR for one-month interest period, after giving effect to any floor plus 1.00 %, plus 2.25 %.

Term Loan Facility

The outstanding balance on the Term Loan Facility was $ 236.0 million and $ 238.2 million as of June 30, 2024 and December 31, 2023, respectively.

The Term Loan Facility is presented in the accompanying condensed consolidated balance sheets, net of debt discount and issuance costs of $ 9.5 million and $ 11.3 million as of June 30, 2024 and December 31, 2023, respectively.

The outstanding balance on the Term Loan Facility was $ 235.0 million and $ 238.2 million as of September 30, 2024 and December 31, 2023, respectively.

The Term Loan Facility is presented in the accompanying condensed consolidated balance sheets, net of debt discount and issuance costs of $ 8.7 million and $ 11.3 million as of September 30, 2024 and December 31, 2023, respectively.

In accordance with the Third Amendment, the Term Loan Facility pays interest at the Company’s election, at either (x) for SOFR Loans at Adjusted Term SOFR (subject to a floor of 0.50 %) plus 3.25 % or (y) for Base Rate Loans at the higher of the Prime Rate, one half of 1.00 % above the Federal Funds Rate or the Adjusted Term SOFR for one-month interest period, after giving effect to any floor plus 1.00 %, plus 2.25 %.

The debt discount and issuance costs are being amortized using the effective interest method and the effective interest rate of the Term Loan Facility as of June 30, 2024, was

The debt discount and issuance costs

are being amortized using the effective interest method and the effective interest rate of the Term Loan Facility as of September 30, 2024, was 10.20 %.

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 an advance principal payment for the year ended December 31, 2023.

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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.

As of June 30, 2024 and December 31, 2023, the principal balance of the Convertible Notes was $ 425.0 million with unamortized discount and issuance costs of $ 8.4 million and $ 9.4 million, respectively, for a net carrying amount of $ 416.6 million and $ 415.6 million, respectively.

As of September 30, 2024 and December 31, 2023, the principal balance of the Convertible Notes was $ 425.0 million with unamortized discount and issuance costs of $ 8.0 million and $ 9.4 million, respectively, for a net carrying amount of $ 417.0 million and $ 415.6 million, respectively.

The conversion rate for the Convertible Notes was initially 41.9054 shares of the Company’s common stock per $ 1,000 principal amount of Convertible Notes, which was equivalent to an initial conversion price of approximately $ 23.86 per share of common stock or 10.1 million shares of common stock.

The Convertible Notes were not convertible during the six months ended June 30, 2024, 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 three and six months ended June 30, 2024.

The Convertible Notes were not convertible during the nine months ended September 30, 2024, 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 three and nine months ended September 30, 2024.

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.

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The Company can also elect to receive the equivalent value of cash in lieu of shares of common stock upon settlement, except in certain circumstances.

The Capped Calls expire on December 1, 2028, and terminate

upon the occurrence of certain extraordinary events such as a merger, tender offer, nationalization, insolvency, delisting, event of default, a change in law, failure to deliver, an announcement of certain of these events, or an early conversion of the Convertible Notes.

The Capped Calls expire on December 1, 2028, and terminate upon the occurrence of certain extraordinary events such as a merger, tender offer, nationalization, insolvency, delisting, event of default, a change in law, failure to deliver, an announcement of certain of these events, or an early conversion of the Convertible Notes.

Although intended to reduce the net number of shares of common stock issued after a conversion of the Convertible Notes, the Capped Calls were separately negotiated transactions, are not a part of the terms of the Convertible Notes, and do not affect the rights of the holders of the Convertible Notes.

See Note 2 – Summary of Significant Accounting Policies for information regarding the accounting for the Capped Calls.

Other debt consists of the debt obligations of STI (“Other Debt”).

Other debt consists of the debt obligations of STI (“Other Debt”) and the $ 33.0 million balance is denominated in Euros.

Interest rates on other debt range from 3.63 % to 4.53 % annually.

Of the $ 37.7 million Other Debt balance, the equivalent of $ 28.7 million is denominated in Euros and $ 9.0 million is denominated in Brazilian Real.

Redeemable Perpetual Preferred Stock

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The Company has classified the Series A Shares as temporary equity and is accreting the carrying amount to its full redemption amount from the date of issuance to the earliest redemption date using the effective interest method.

Such accretion totaled $ 13.5 million and $ 12.4 million for the six months ended June 30, 2024 and 2023, respectively.

On or prior to the fifth anniversary of the Initial Closing, the Company may pay dividends on the Series A Shares either in (i) cash at the then-applicable Cash Regular Dividend Rate (as defined below), (ii) through accrual to the Liquidation Preference at the Accrued Regular Dividend Rate of 6.25 % (the “Permitted Accrued

Dividends”), or (iii) a combination thereof.

Such accretion totaled $ 20.4 million and $ 18.8 million for the nine months ended September 30, 2024 and 2023, respectively.

accrual to the Liquidation Preference at the Accrued Regular Dividend Rate of 6.25 % (the “Permitted Accrued Dividends”), or (iii) a combination thereof.

Following the fifth anniversary of the Initial Closing, dividends are payable only in cash.

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As used herein, “Liquidation Preference” means, with respect to the Series A Shares, the initial liquidation preference of $ 1,000 per share, plus accrued dividends of such share at the time of the determination.

During the six months ended June 30, 2024, the Company accrued dividends on the Series A Shares at the Accrued Regular Dividend rate of 6.25 % totaling $ 13.8 million.

As of June 30, 2024, total accrued and unpaid dividends were $ 46.5 million.

During the nine months ended September 30, 2024, the Company accrued dividends on the Series A Shares at the Accrued Regular Dividend rate of 6.25 % totaling $ 20.9 million.

As of September 30, 2024, total accrued and unpaid dividends were $ 53.7 million.

The Series A Shares have similar characteristics of an “Increasing Rate Security” as described by SEC Staff Accounting Bulletin Topic 5Q, Increasing Rate Preferred Stock .

5 unchanged sentences

The following table presents the Company’s disaggregated revenues (in thousands):

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

2024 2023 2024 2023

5 unchanged sentences

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.

For certain customer contracts, billing can occur in advance of shipment, resulting in contract liabilities.

Billing sometimes occurs subsequent to revenue recognition, resulting in contract assets.

1 unchanged sentence

Contract assets consisting of unbilled receivables are recorded within accounts receivable, net 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, 2024 December 31, 2023

September 30, 2024 December 31, 2023

Unbilled receivables $ 77,492 $ 102,603

2 unchanged sentences

Contract liabilities are recorded on a contract-by-contract basis and consisted of the following at the end of each reporting period (in thousands):

June 30, 2024 December 31, 2023

September 30, 2024 December 31, 2023

Deferred revenue $ 112,618 $ 66,488

During the six months ended June 30, 2024, the Company converted $ 30.5 million in deferred revenue to revenue, which represented 45.8 % of the prior year’s deferred revenue balance.

During the nine months ended September 30, 2024, the Company converted $ 37.6 million in deferred revenue to revenue, which represented 56.7 % of the prior year’s deferred revenue balance.

Included in deferred revenue as of December 31, 2023 are cash advances for signed contracts that begin several months subsequent to receiving the advance.

In addition, deferred revenue includes paid extended warranty, that can be recognized upon expiration of the warranty.

Bill-and-Hold Arrangements

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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.

During the three and six months ended June 30, 2023, the Company recognized $ 3.5 million and $ 22.8 million, respectively, in revenue from one customer for the sale of goods and services under bill-and-hold arrangements.

During the three and six months ended June 30, 2024, the Company recognized $ 0.0 and $ 1.9

million, respectively, in revenue from one customer for the sale of goods and services under bill-and-hold arrangements.

During the three and nine months ended September 30, 2024, the Company recognized zero and $ 1.9 million, respectively, in revenue from one customer for the sale of goods and services under bill-and-hold arrangements.

During the three and nine months ended September 30, 2023, the Company recognized zero and $ 22.8 million, respectively, in revenue from one customer for the sale of goods and services under bill-and-hold arrangements.

Remaining Performance Obligations

As of June 30, 2024, the Company had $ 333.9 million of remaining performance obligations.

As of September 30, 2024, the Company had $ 466.9 million of remaining performance obligations.

The Company expects to recognize revenue on 94 % of these performance obligations in the next twelve months .

1 unchanged sentence

The following table sets forth the computation of basic and diluted (loss) income per share (in thousands, except per share amounts):

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

2024 2023 2024 2023

Net income $ 25,698 $ 65,165 $ 27,863 $ 94,800

Net (loss) income

$ ( 141,354 ) $ 23,098 $ ( 113,491 ) $ 117,898

preferred dividends and accretion 14,080 13,091 41,332 38,359

Net income to common shareholders $ 11,949 $ 52,381 $ 612 $ 69,532

Net (loss) income to common shareholders

$ ( 155,434 ) $ 10,007 $ ( 154,823 ) $ 79,539

Weighted average shares 151,923 151,068 151,691 150,865

3 unchanged sentences

Income per share $ ( 1.02 ) $ 0.07 $ ( 1.02 ) $ 0.52

Potentially dilutive common shares issuable pursuant to equity-based awards of 479,623 and 473,074 were not included for the three and six months ended June 30, 2024, respectively, as their potential impact was anti-dilutive.

Common shares issuable pursuant to equity-based awards of 52,609 and 57,263 were excluded from the Company’s diluted EPS calculation for the three and six months ended June 30, 2023, respectively, as their potential impact was anti-dilutive.

There were no potentially dilutive common shares issuable pursuant to the Convertible Notes for both the six months ended June 30, 2024 and 2023, as the average market price of the Company’s common stock has not exceeded the exercise price since their issuance.

Since the Company was in a loss position for the three and nine months ended September 30, 2024, basic net loss per share to common shareholders is the same as diluted net loss per share to common stockholders, as the inclusion of all potential shares of common stock outstanding would have been anti-dilutive.

At September 30, 2024 and 2023, 3,834,690 and 34,634 respectively, of common stock equivalents were excluded from the calculation of diluted net loss per share to common stockholders, as they had an antidilutive effect.

There were no potentially dilutive common shares issuable pursuant to the Convertible Notes for both the nine months ended September 30, 2024 and 2023, as the average market price of the Company’s common stock has not exceeded the exercise price since their issuance.

Commitments and Contingencies

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On May 14, 2021, a putative class action was filed in the U.S.

District Court for 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, 12(a)(2) and 15 of the Securities Exchange Act of 1933 (“Plymouth Action”).

District Court for 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, 12(a)(2) and 15 of the Securities Exchange Act of 1933 (“Plymouth Action”).

The complaint 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, and the Company’s March 2021 offering during the putative class period of October 14, 2020 through May 11, 2021.

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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.

(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 verified derivative complaint was filed in the Southern District of New York against certain officers and directors of the Company.

15 unchanged sentences

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, 2024.

The Company has not recorded any material loss contingency in the condensed consolidated balance sheets as of September 30, 2024.

Commercial Supplier Settlement

6 unchanged sentences

Legal costs are expensed as incurred.

It is possible that future results for any particular quarter or annual period may be materially affected by changes in our assumption or the effectiveness of the Company’s strategies relating to these proceedings.

possible that future results for any particular quarter or annual period may be materially affected by changes in our assumption or the effectiveness of the Company’s strategies relating to these proceedings.

Contingent Consideration

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The TRA is accounted for as contingent consideration and subsequent changes in fair value of the contingent liability are recognized in contingent consideration on the condensed consolidated statements of operations.

As of June 30, 2024 and December 31, 2023, the fair value of the TRA was $ 8.7 million and $ 10.4 million, respectively.

As of September 30, 2024 and December 31, 2023, the fair value of the TRA was $ 8.7 million and $ 10.4 million, respectively.

Estimating the amount of payments that may be made under the TRA is by nature imprecise.

5 unchanged sentences

The following table summarizes the activity related to the estimated TRA liability (in thousands):

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

2024 2023 2024 2023

4 unchanged sentences

The TRA liability requires significant judgment and is classified as Level 3 in the fair value hierarchy.

As of June 30, 2024, the Company posted surety bonds in the total amount of $ 197.8 million.

As of September 30, 2024, the Company posted surety bonds in the total amount of $ 198.2 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.

2 unchanged sentences

The carrying values and estimated fair values of the Company’s debt financial instruments were as follows (in thousands):

June 30, 2024 December 31, 2023

September 30, 2024 December 31, 2023

Carrying Value Fair Value Carrying Value Fair Value

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The fair value of the RSUs is determined using the market value of the Company’s common stock on the grant date.

RSU activity under the 2020 Plan during the six months ended June 30, 2024, was as follows:

RSU activity under the 2020 Plan during the nine months ended September 30, 2024, was as follows:

Number of Shares Weighted Average Grant Date Fair Value

3 unchanged sentences

Shares forfeited ( 318,594 ) 14.16

Outstanding non-vested, June 30, 2024 1,951,594 $ 13.57

Outstanding non-vested, September 30, 2024 2,820,085 $ 11.01

Performance Stock Units

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Treasury Constant Maturity rates.

The following assumptions were used in the Monte Carlo simulation for computing the grant date fair value of the PSUs issued during the six months ended June 30, 2024 and 2023:

The following assumptions were used in the Monte Carlo simulation for computing the grant date fair value of the PSUs issued during the nine months ended September 30, 2024 and 2023:

Volatility 79 % 90 %

1 unchanged sentence

Dividend yield — % — %

PSU activity under the 2020 Plan during the six months ended June 30, 2024, was as follows:

PSU activity under the 2020 Plan during the nine months ended September 30, 2024, was as follows:

Number of Shares Weighted Average Grant Date Fair Value

3 unchanged sentences

Shares forfeited ( 264,184 ) 15.35

Outstanding non-vested, June 30, 2024 1,150,390 $ 12.80

For three months ended June 30, 2024 and 2023, the Company recognized $ 0.8 million and $ 5.2 million, respectively, in equity-based compensation costs.

For six months ended June 30, 2024 and 2023, the Company recognized $ 4.8 million and $ 8.6 million, respectively, in equity-based compensation costs.

At June 30, 2024, the Company had $ 26.7 million of unrecognized compensation costs related to RSUs and PSUs, which are expected to be recognized over 2.2 years each.

Outstanding non-vested, September 30, 2024 1,014,605 $ 12.60

For three months ended September 30, 2024 and 2023, the Company recognized $ 2.0 million and $ 3.4 million, respectively, in equity-based compensation costs.

For nine months ended September 30, 2024 and 2023, the Company recognized $ 6.9 million and $ 11.9 million, respectively, in equity-based compensation costs.

At September 30, 2024, the Company had $ 24.9 million of unrecognized compensation costs related to RSUs and PSUs, which are expected to be recognized over 2.2 years and 2.3 years, respectively.

Deferred Compensation Plan

26 unchanged sentences

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, 2024 and 2023 (in thousands):

Three Months Ended June 30, Six Months Ended June 30,

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 nine months ended September 30, 2024 and 2023 (in thousands):

Three Months Ended September 30, Nine Months Ended September 30,

2024 2023 2024 2023

5 unchanged sentences

Total $ 78,315 $ 87,379 $ 219,358 $ 331,322

15 Subsequent Events

In May 2024, Array Technologies, Inc.

(“Array”, Lessee) entered into a triple net lease (“NNN term lease”) with GDC Sunshine, LLC (“GDC”, Lessor) for 13 ½ years ( 162 months) for a new manufacturing and office facility located in Bernalillo County, New Mexico.

Among other things, Array would be responsible for the payment of personal property taxes, if any, and all real property taxes related to the facility and real property that is subject to the NNN term lease.

The NNN term lease was contingent upon the closing of the Lessor’s successful financing to construct the facility.

On October 16, 2024, the Lessor closed the financing and consequently the lease agreement became effective.

The Lessee has an option to renew the lease for an additional ten years .

The new facility that is mixed use and built for general purposes will be approximately 216,000 square feet when constructed, and the NNN term lease commences upon the earliest occurrence of several events, including the Lessor’s completion of the construction of the building, which is currently expected to occur in the fourth quarter of 2025.

Under the construction agreement with GDC, Array also contributed approximately $ 11.2 million to the construction costs for the facility during October 2024.

In connection with this NNN term lease and the Company’s planned acquisition of machinery and equipment related to the new facility, GDC and the Company entered into a series of transactions with Bernalillo County (the “County”) related to a tax abatement plan.

These transactions had no net impact to the consolidated financial statements of the Company.

The tax abatement plan provides for the effective elimination of 75 % of the real property taxes and 100 % of the personal property taxes payable to the County by the Company and GDC during the term of the NNN term lease, and the abatement of 100 % of the sales and use taxes that would be incurred by the Company and GDC related to the purchase and use of machinery and equipment.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements