Array Technologies, Inc.

on our growth initiatives before turning it over to NIPL to talk about the quarter. Array Technologies is first and foremost a technology company. We are one of the world's largest manufacturing of ground mounting systems used in utility-scale solar energy projects. Our principal product is an integrated system of steel supports, electric motors, gearboxes, electronic controllers, and software, commonly referred to as a single-axis tracker. Trackers move solar panels throughout the day to maintain an optimum orientation to the sun, which significantly increase their energy production up to 25%. Our product is patent protected and has a compelling value proposition. In fact, we have approximately 10 years left on our core patent and more than 10 years left on other patents. Since Array's inception, we've shipped over 21 gigawatts of product. To put some context around the scale of our business, Over the last 12 months, we've shipped over 26,000 miles of trackers, which is enough to circle the globe. Finally, we are proud that more than one in every four solar modules in operation today in the U.S. is on our product. We established a track record that is evidenced by our strong financial results having delivered $692 million in revenue and $140 million in adjusted EBITDA during the nine months ending September of this year. which represents 64% growth in revenue and 96% growth in adjusted EBITDA compared to the first nine months in 2019. With that background, I'd like to pivot to our growth initiatives. As many of you know from meeting with us during our IPO Roadshow, there are three components to our growth strategy. Continued growth and market share gains in our core U.S. business, international expansion, and bolt-on acquisitions. I'm pleased to report that we have made progress on all three since our IPO price. First, U.S. demand for our products continues to grow. Our order book, which we define as signed contracts and awarded orders, was $703 million on September 30th, which represents an increase of 31 percent over the same time last year, but we are currently in advanced discussions on several large new projects some of which we hope to be announcing soon. We believe that the ease of installation, superior reliability, and lower LCOE of our products is increasingly becoming recognized by customers and that we will continue to grow our share of demand here in the U.S. Second, we are beginning to see early returns on our investment in international sales resources. Of the orders that we are currently in advanced discussions on, a number of them are projects outside the U.S. Further, as evidence of our commitment to international expansion, over the last nine months, we've increased the size of our international footprint by more than 50%, with resources now located in the UK, Spain, Brazil, Mexico, China, and Australia. And we remain committed to add strategic resources around the globe in the coming months as needed. Third, we are actively pursuing our bolt-on acquisition strategy. Outside of panels, inverters, and mounting systems, our customers purchase as much as 13 cents per watt in other products and components, many of which work directly with or are complementary to our tracker. Acquiring companies that make these products can be highly accretive to our margins because we can eliminate duplicate selling expenses since, in most cases, we'd be selling more product to the same customers we already have relationships with. While we cannot guarantee we'll be able to identify or execute any acquisitions, we are currently pursuing several targets. Now I will turn it over to Nipal for an update on the quarter.

Thanks, Jim. I would like to begin by providing some context for comparing our 2019 versus 2020 results. As most of you know, 2020 was the first of three annual step-downs in the ITC, or Investment Tax Credit, for solar. As a reminder, the ITC was originally put in place to support the economics of solar and provide the runway for the industry to become increasingly competitive to other forms of generation through innovation and economies of scale. This has largely been accomplished as the marginal cost of utility-scale solar is now lower than that of natural gas without subsidies in many parts of the country. While there is a potential for the ITC to be extended at the original level, The current legislation gradually reduces the size of the credit over three years, eventually to 10%. The result of these step-downs is to incentivize customers to place orders in Q3 and Q4 and then take delivery in Q1 and Q2 of the following year. As previously disclosed in our S1 and Roadshow, the impact on us is to concentrate more of our revenues in the first half than the second half, and that is what we saw this year and expect to see again next year. As a result, comparing a single quarter in 2020 to the same quarter in 2019 is not necessarily indicative of the trajectory of our business since revenues in 2020 are skewed more to Q1 and Q2, while revenues in 2019 were more evenly distributed. It's also important to note that because of the large size of many of our orders, results in a single quarter are not necessarily indicative of what we may achieve over a full year. Given the ITC change, I will provide a brief summary of our third quarter results, including some commentary around how our results compared to our plans, since there are not yet any consensus estimates available for our company, and then provide comparatives for the nine-month periods. For the third quarter, we generated revenues of $139.5 million which was a decrease over the prior year period as a result of the changes in seasonal order patterns that I discussed earlier. Relative to our plan, third quarter revenues beat our expectations, primarily as a result of faster than anticipated conversion and delivery of projects, in addition to more sales to smaller size projects. We are seeing tractors being used in all size ranges of projects with growing demand from the sub-50 megawatt market. ASPs from third quarter were largely unchanged from the second quarter. Gross margins in the third quarter were lower than prior year period as a result of having less revenue to absorb fixed costs as well as higher logistics costs largely driven by the global shipping constraints due to COVID-19. Importantly, we view both of these dynamics as short-term in nature and not indicative of longer-term margin pressure. Operating expenses were roughly flat compared to prior period, excluding professional fees related to our IPO and change for contingent consideration, reflecting tight controls on expenses. We recorded an operating loss in the quarter of $5.1 million, primarily as a result of the $13.6 million charge we took for the fair value of contingent consideration as well as $1.8 million of professional fees and expenses related to our IPO and recapitalization. The charge for the contingent consideration relates primarily to an earn-out obligation we have with our founder in connection with his sale of the company to Oak Tree in 2016. Adjusted EBITDA, which excludes the impact of the earn-out obligation, the IPO expenses, and approximately $1 million of other non-recurring and non-cash costs, was $16.6 million for the third quarter, which exceeded our plan by a double-digit margin. Now, turning to our nine-month results. Revenues for the nine months ended September 30, 2020 increased 64% to $692.1 million, compared to $423.2 million for the prior year period, driven by increases in the volume of trackers delivered. Gross profit increased 86% to $167.3 million compared to $90.2 million in the prior year period, driven primarily by higher revenues. Gross margins increased 24.2% from 21.3% in the prior year period, driven by reductions in purchased materials resulting from improved supplier arrangements and shifting volumes for certain components to new, lower-cost suppliers, and greater leverage of fixed costs against higher sales volumes. Operating expenses increased to $69.9 million compared to $47.3 million during the same period in the prior year, primarily as a result of the $13.6 million charge for contingent consideration and $1.8 million of professional fees related to our recapitalization and initial public offering in the third quarter that I discussed earlier. Income from operations increased 127% to $97.5 million compared to $42.9 million during the same period in the prior year. Net income increased 431% to $68.8 million compared to $13 million during the same period in the prior year, and basic and diluted income per share was $0.57 compared to $0.11 during the same period in the prior year. Adjusted net income increased 116% to $93.4 million compared to $43.2 million during the same period in the prior year, and adjusted net income per share was 78 cents compared to 36 cents during the same period in the prior year. Adjusted EBITDA increased 96% to $140.5 million compared to $71.8 million for the prior year period. We decided to provide guidance for the full year 2020 to give our new public investors additional insight into our outlook for the remainder of the year. Going forward, we will be providing annual guidance as part of our fourth quarter and full year earnings announcements. We will not be providing quarterly guidance in future periods. For the full year 2020 ending December 31st, 2020, we expect revenues to be in the range of $845 million to $865 million. Adjusted EBITDA to be in the range of $156 million to $160 million. Adjusted net income per share to be in the range of 82 cents to 86 cents. This assumes diluted shares outstanding for the three months ending December 31st, 2020 of 126,123,723 shares. And diluted shares outstanding for the 12 months ending December 31st, 2020 of $121,535,154. Our guidance excludes the impact of any one-time charges, expenses related to the recapitalization and IPO, income or expense related to contingent consideration, as well as any related tax impacts. Now, I will turn it back over to Jim for some closing remarks.

Thanks, Meeple. I'd like to wrap up by saying we are incredibly optimistic about the future of this company. The drive to decarbonize energy is only accelerating and we are a direct beneficiary of that transition. Solar with single axis trackers has proven to be one of the cleanest and lowest cost forms of generation and we see demand for trackers growing faster than the overall market for solar as customers convert from fixed tilt. Customers are increasingly recognizing the superior reliability and durability of our tracking system, and that is leading to market share gains for our products. These factors, combined with our strong order book, give us confidence that we are very well positioned to have another year of substantial growth in 2021. Thank you. Operator, please open the line for questions.