Core Viewpoint - Array Technologies, Inc. plans to offer $250 million in convertible senior notes due 2031, with an option for initial purchasers to buy an additional $37.5 million, subject to market conditions [1][4]. Group 1: Offering Details - The notes will be senior, unsecured obligations of Array Technologies, accruing interest payable semiannually [2]. - The interest rate and initial conversion rate will be determined at the time of pricing the offering [3]. - The net proceeds from the offering will be used to repay $150 million of outstanding indebtedness, fund capped call transactions, and for general corporate purposes [4]. Group 2: Capped Call Transactions - Array intends to enter into capped call transactions to cover the shares underlying the notes, which will help reduce potential dilution upon conversion [5]. - The option counterparties may purchase shares of Array's common stock or enter into derivative transactions, potentially affecting the market price of the stock [6]. Group 3: Existing Convertible Notes - Array may negotiate to repurchase a portion of its existing 1.00% Convertible Senior Notes due 2028 using proceeds from the offering [7]. - The terms of any repurchase of existing convertible notes will be negotiated individually with each holder [7]. Group 4: Company Overview - Array Technologies is a leading provider of solar tracking technology, focusing on maximizing energy production for utility-scale and distributed generation customers [10].

Transaction Overview - ARRAY Technologies is acquiring APA Solar for approximately $179 million, representing about 7.6x trailing 12 months EBITDA excluding 45X credits[14] - The acquisition is expected to be high single-digit-percentage accretive to Adjusted EPS in year 1 before synergies[14,19] - Closing is expected in the third quarter of 2025, funded with cash on hand[14] APA Solar Overview - APA Solar's 2024 revenues and EBITDA were approximately $129 million and $25 million, respectively[29] - APA Solar is a leading U S provider of Engineered Foundation Solutions and Fixed-Tilt Mounting Systems[14] - APA Solar has approximately 250 employees with headquarters and principal manufacturing located in Ridgeville Corners, Ohio[29] Strategic Rationale - The acquisition expands ARRAY's addressable market by nearly 40%[16] - The transaction is expected to create up to $49 million of undiscounted cash tax savings ($31 million on an NPV basis using a 10% discount rate)[21,63] - U S Utility-Scale tracker foundations are a $1 2 billion market that ARRAY has not historically participated in[24] - The acquisition provides access to the fixed-tilt market, which ARRAY has not historically participated in[24]

Summary of Array Technologies (ARRY) M&A Announcement Company and Industry - **Company**: Array Technologies (ARRY) - **Acquisition Target**: APA Solar - **Industry**: Solar Energy Solutions Core Points and Arguments 1. **Acquisition Announcement**: Array Technologies announced a definitive agreement to acquire APA Solar, valued at approximately $179 million, with an expected closing in Q3 2025, subject to regulatory approval [6][27]. 2. **Strategic Rationale**: The acquisition aims to enhance Array's competitive advantage by expanding its product portfolio beyond solar tracking systems to include engineered foundation solutions and fixed tilt racking systems [5][7]. 3. **Market Expansion**: The acquisition is expected to increase Array's addressable market by nearly 40%, allowing the company to serve a broader range of project types [9][21]. 4. **Cost and Revenue Synergies**: Anticipated cost synergies will arise from sourcing efficiencies and streamlined manufacturing processes, while revenue synergies will come from integrated offerings and increased access to utility-scale clients [10][11]. 5. **Financial Impact**: The transaction is expected to be accretive to Array's adjusted EPS in the first year before synergies, with an attractive valuation multiple [6][11][30]. 6. **Tax Benefits**: The acquisition is expected to provide tax advantages, including approximately $31 million in present value tax savings due to a step-up in basis on APA's assets [28][30]. 7. **APA's Financials**: APA Solar reported $129 million in revenue and $25 million in EBITDA for 2024, indicating a strong financial position that is expected to integrate well with Array's operations [13][28]. 8. **Product Integration**: The combination of Array's tracker technology with APA's engineered foundations is expected to optimize system design and improve project economics [22][24]. 9. **Market Trends**: The acquisition aligns with trends in the solar industry, where engineered foundations are becoming essential for projects in diverse geographies, particularly in challenging soil conditions [15][19]. 10. **Leadership Retention**: APA's leadership will remain with the company post-acquisition, incentivized to deliver financial results and contribute to Array's success [11][30]. Other Important Content 1. **Cultural Fit**: APA's family-owned culture and focus on collaboration and innovation are seen as a good match for Array's values [12]. 2. **Future Growth**: The acquisition supports Array's long-term growth strategy, particularly in the context of increasing demand for hybrid utility-scale projects that utilize both tracking and fixed tilt systems [29][30]. 3. **No Change to Guidance**: Array's standalone 2025 full-year guidance remains unchanged at this time, with updates expected post-transaction [30].

Core Viewpoint - ARRAY Technologies has announced the acquisition of APA Solar, enhancing its capabilities in engineered foundation solutions and fixed-tilt mounting systems for solar projects, which is expected to be accretive to its Adjusted EPS in the first year before synergies [1][4]. Acquisition Details - The acquisition transaction values APA at approximately $179 million, representing a multiple of 7.6x trailing 12 months EBITDA, excluding 45X credits [3][4]. - APA generated approximately $129 million in revenue and $25 million in EBITDA in 2024, excluding 45X credits [1]. - The deal includes $168 million in upfront cash consideration and $42 million in deferred consideration, with $31 million of net present value of tax benefits factored in [3][4]. Strategic Benefits - The acquisition allows ARRAY to offer an integrated tracker and foundation system, addressing challenging soil conditions without the need for specialized installation equipment [2][4]. - The addition of domestically manufactured engineered foundations and fixed-tilt solutions expands ARRAY's addressable market by nearly 40% [4]. - The partnership is expected to enhance operational excellence and provide expanded resources and expertise for both companies [3][6]. Management and Operations - Following the acquisition, APA's senior management team will remain in place and lead the new "Foundation Solutions Business" within ARRAY [6]. - The headquarters and principal manufacturing operations of APA will continue to be located in Ridgeville Corners, Ohio [6]. Timeline and Conditions - The transaction is expected to close in the third quarter of 2025, pending regulatory approvals and customary closing conditions [4][7].

Core Insights - The recent GOP tax bill has significant negative implications for the clean energy sector, particularly affecting solar companies and their business models [1][2][3] Group 1: Impact on Solar Stocks - Solar stocks experienced a sharp decline, with Sunrun falling over 35% due to the termination of key clean energy credits [1] - Enphase and SolarEdge saw a drop of approximately 18% as demand for rooftop solar is expected to decrease [2] - Array and Nextracker, which produce devices for solar panel tracking, fell by 14% and 5% respectively, reflecting the adverse impact on utility-scale solar projects [3] Group 2: Legislative Changes - The GOP bill ends investment and electricity production credits for clean energy facilities that begin construction after the legislation is enacted or enter service after December 31, 2028 [3] - Analysts describe the bill as a "sledgehammer" to the Inflation Reduction Act, indicating a severe setback for the rooftop solar industry, where 70% of installations use lease arrangements [2] Group 3: Company-Specific Outcomes - First Solar's stock only decreased by 1% as the manufacturing tax credit remains intact, which is seen as a positive outcome for the company [4] - First Solar is noted as the largest producer of solar panels in the U.S., benefiting from a strong domestic manufacturing presence [4]

Group 1: Market Performance - Solar stocks generally rose, with Array up 7.64%, Canadian Solar ADR up 5.62%, Sunrun up 4.96%, First Solar up 4.32%, SolarEdge up 3.23%, and JinkoSolar ADR up 2.72% [1][2] - The S&P 500 index is currently down 0.45%, the Dow Jones is down 104 points (0.49%), while the Nasdaq is up 13 points (0.31%) [1] Group 2: Regulatory Environment - The U.S. believes that imports of solar products from Southeast Asia harm the domestic industry, laying the groundwork for tariffs on these imports [1]

Core Insights - ARRAY Technologies has launched DuraTrack Hail XP™, an advanced solar tracker designed to withstand extreme hail and wind events, enhancing the reliability of solar assets in hail-prone regions [1][3] - The development of Hail XP involved direct input from customers, insurers, and industry partners, addressing severe weather risks that solar projects face today [2][3] - Hail XP features industry-leading protective stow angles and strong stow reliability, aiming to reduce downtime and damage to solar installations [3][6] Product Features - Hail XP operates without relying on batteries, ensuring maximum readiness when hail approaches [6] - It has a 77-degree stow capability, allowing modules to be positioned at a high tilt to mitigate hail impact regardless of wind conditions [6] - The product integrates seamlessly with ARRAY's SmarTrack® Hail Alert Response and patented Passive Wind Stow technologies, enhancing its protective features [6] - Enhanced durability is achieved through a reinforced bearing housing, larger gear rack, and upgraded damper, ensuring performance in harsh conditions [6] - Hail XP is expected to be available for first shipments in early 2026 [6] Company Overview - ARRAY Technologies is a leading global provider of solar tracking technology, focusing on utility-scale and distributed generation customers [4] - The company emphasizes its commitment to manufacturing and technology, leveraging a diversified global supply chain and a customer-centric approach [4]

Core Insights - ARRAY Technologies has launched DuraTrack Hail XP™, an advanced solar tracker designed to withstand extreme hail and wind events, enhancing the reliability of solar assets in hail-prone regions [1][3] - The development of Hail XP involved direct input from customers, insurers, and industry partners, addressing severe weather risks that solar projects face today [2][3] - Hail XP sets a new benchmark for tracker reliability, featuring industry-leading protective stow angles and strong stow reliability to reduce downtime and damage [3] Product Features - Hail XP operates without batteries, ensuring maximum readiness when hail approaches [6] - It has a 77-degree stow capability, allowing modules to be positioned at a high tilt to mitigate hail impact regardless of wind conditions [6] - The product integrates seamlessly with ARRAY's SmarTrack® Hail Alert Response and patented Passive Wind Stow technologies, enhancing its protective features [6] - Enhanced durability is achieved through a reinforced bearing housing, larger gear rack, and upgraded damper, ensuring performance in harsh conditions [6] - Hail XP is expected to be available for first shipments in early 2026 [6] Company Overview - ARRAY Technologies is a leading global provider of solar tracking technology, focusing on utility-scale and distributed generation customers [4] - The company emphasizes its commitment to manufacturing and technology, leveraging a diversified global supply chain and a customer-centric approach [4]

Company Overview - Array Technologies, Inc. was founded in 1989 and is based in Albuquerque, NM, specializing in solar tracking equipment and technology for the solar power industry, primarily for utility-scale installations [1] Industry Insights - The company provides solar trackers, which are systems that position solar panels to maximize sunlight exposure, thereby enhancing energy production [1] Investment Philosophy - The investment approach emphasizes the slow accumulation of high-quality assets, blending steady investment with high-risk, high-reward opportunities, and transformative technologies [1]

Revenue and Growth - Revenue for Q1 2025 reached $302.36 million, a 97% increase from $153.40 million in Q1 2024[173]. - Consolidated revenue increased by $149.0 million, or 97%, for the three months ended March 31, 2025, driven by Array Legacy Operations (86%) and STI Operations (128%) growth[175]. - Array Legacy Operations revenue grew by 86% to $213.21 million in Q1 2025, while STI Operations revenue increased by 128% to $89.15 million[174]. - Array Legacy Operations revenue rose by $98.8 million, or 86%, primarily due to a 116% increase in volume, despite a 14% decrease in average selling prices[176]. - STI Operations revenue increased by $50.1 million, or 128%, mainly from a 212% rise in volume, offset by a 17% decrease in average selling prices and a 10% unfavorable foreign currency impact[177]. Profitability - Gross profit for Q1 2025 was $76.43 million, reflecting a 39% increase from $55.09 million in Q1 2024[173]. - Consolidated gross profit increased by $21.3 million, or 39%, but gross margin decreased to 25.3% from 35.9% year-over-year[179]. - Net income surged to $16.75 million in Q1 2025, a 673% increase from $2.17 million in Q1 2024[173]. - Income from operations rose significantly by 224% to $27.28 million in Q1 2025, compared to $8.41 million in Q1 2024[173]. Costs and Expenses - Cost of revenue increased by 130% to $225.94 million in Q1 2025, compared to $98.31 million in Q1 2024[173]. - Operating expenses totaled $49.14 million in Q1 2025, a 5% increase from $46.68 million in Q1 2024[173]. - Consolidated general and administrative expenses rose by $6.2 million, or 16%, due to higher personnel expenses and credit risk allowances[182]. - Consolidated income tax expense increased by $5.2 million, or 401%, with an effective tax rate of 28.1% for the three months ended March 31, 2025[188][189]. Research and Development - Research and development costs for the three months ended March 31, 2025, were $2.4 million, compared to $1.9 million for the same period in 2024, with total engineering expenses at $4.4 million in 2025[138]. - Total engineering expenses were $4.4 million for Q1 2025, with R&D costs representing a significant portion of this expenditure[138]. Market and Economic Factors - The Inflation Reduction Act (IRA) raised the Investment Tax Credit (ITC) to 30% with no step downs before 2032, which is expected to influence customer orders positively[142]. - The ongoing Russian-Ukraine war has increased logistics costs for material procurement, impacting the company's supply chain[147]. - The company is focused on reducing costs and aligning its operations in Brazil with current market conditions due to economic pressures affecting power purchase agreements[140]. Product Development and Innovation - The company’s flagship tracker design allows one motor to drive multiple rows of solar panels, resulting in greater reliability and lower installation costs compared to competitors' designs[134]. - The company has added a dual-row tracker design to its product portfolio through the acquisition of STI, enhancing its offerings for irregular project areas[135]. - The company’s core U.S. patent on a linked-row, single-driving apparatus for solar trackers does not expire until February 5, 2030, providing a competitive advantage[134]. Financial Position - As of March 31, 2025, the cash balance was $348.3 million, with $567.8 million in net working capital and $232.8 million in outstanding borrowings[191]. - Cash used in operating activities was $13.1 million for the three months ended March 31, 2025, compared to cash provided of $47.5 million in the same period of 2024[190][196]. - The Company refinanced its Revolving Credit Facility, reducing the Consolidated First Lien Secured Leverage Ratio from 7.10:1.00 to 5.50:1.00[192]. - Surety bonds posted as of March 31, 2025, totaled approximately $269.9 million, which do not adversely impact liquidity or capital resources[205]. Supplier and Cost Management - The company has successfully negotiated agreements with key suppliers to share the economic benefits of the section 45X manufacturing tax credit, which applies to certain components[143]. - The company continues to expand its supplier base and productivity initiatives to mitigate inflationary pressures on operations[149]. - The average selling price (ASP) and cost per watt (CPW) metrics are utilized to evaluate pricing trends and customer profitability[158].