Table of Contents
☒ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Delaware | 36-5047383 | |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
Class A Common Stock, $0.0001 par value | NXT | The Nasdaq Stock Market LLC |
Large accelerated filer | ☐ | Accelerated filer | ☐ | |||
Non-accelerated filer | ☒ | Smaller reporting company | ☐ | |||
Emerging growth company | ☐ |
Table of Contents
PART I. FINANCIAL INFORMATION
Page | ||||||
Item 1. | ||||||
1 | ||||||
2 | ||||||
Unaudited Condensed Combined Balance Sheets as of December 31, 2022 and March 31, 2022 | 6 | |||||
7 | ||||||
8 | ||||||
9 | ||||||
Notes to the Unaudited Condensed Combined Financial Statements | 10 | |||||
Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 25 | ||||
Item 3. | 39 | |||||
Item 4. | 40 | |||||
PART II. OTHER INFORMATION | ||||||
Item 1. | Legal Proceedings | 41 | ||||
Item 1A. | Risk Factors | 41 | ||||
Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds | 41 | ||||
Item 3. | Defaults Upon Senior Securities | 42 | ||||
Item 4. | Mine Safety Disclosures | 42 | ||||
Item 5. | Other Information | 42 | ||||
Item 6. | Exhibits | 42 | ||||
Signatures | 45 |
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ITEM 1. | FINANCIAL STATEMENTS |
(In thousands, except share and per share amounts) | As of December 31, 2022 | |||
ASSETS | ||||
Cash and cash equivalents | $ | — | ||
Total assets | $ | — | ||
LIABILITIES AND STOCKHOLDER’S EQUITY | ||||
Total liabilities | $ | — | ||
Stockholder’s equity: | ||||
Common stock, $0.01 par value per share, 100 shares authorized, 100 issued and outstanding | — | |||
Additional paid-in capital | — | |||
Total liabilities and stockholder’s equity | $ | — |
• | Immediately prior to the 128,794,522closing of the IPO, the Company issued shares of its Class B common stock to Yuma, Yuma Subsidiary, Inc., a Delaware corporation and wholly-owned subsidiary of Yuma (“Yuma Sub”), and TPG Rise Flash, L.P. (“TPG Rise”), an affiliate of the private equity firm TPG (“TPG”), in exchange for cash consideration, which number of shares was equal to the number of common units of the LLC (the “LLC Common Units”) held directly or indirectly by Yuma, Yuma Sub and TPG Rise immediately following the Transactions and before giving effect to the IPO. |
• | Immediately prior to the closing of the IPO, the LLC made a 175.0cash distribution in an aggregate amount of $ million (the “Distribution”). With respect to such Distribution, $ 21.7 million was distributed to TPG Rise and $ 153.3 million to Yuma and Yuma Sub in accordance with their pro rata LLC units. The Distribution was financed, in part, with net proceeds from the $ 150.0 million term loan under the 2023 Credit Agreement, as further discussed below, together with cash on hand. |
• | The Company used all of the net proceeds from the IPO ($ 693.8 million) as consideration for Yuma’s transfer to the Company of 30,590,000 LLC Common Units at a price per unit equal to $, and, as a result, did not retain any of the net proceeds from the IPO. |
• | In connection with Yuma’s transfer to the Company of 30,590,000 LLC Common Units , a corresponding number of shares of the Company’sClass B common stock held by Yuma was canceled. |
• | In connection with the IPO, the LLC’s redeemable preferred units designated as “Series A Preferred Units” held by TPG Rise were automatically converted into LLC Common Units which are exchangeable, together with a corresponding number of shares of the Company’s Class B common stock, for shares of the Company’s Class A common stock (or cash). Notwithstanding the foregoing, as permitted under and in accordance with the limited liability company agreement of the LLC in effect prior to the IPO (the “Prior LLC Agreement”), on February 8, 2023, TPG Rise exercised its right to have certain blocker corporations affiliated with TPG Rise each merge with a separate direct, wholly-owned subsidiary of the Company, with the blocker corporations surviving each such merger, in a transaction intended to qualify as a tax-free transaction. In connection with such blocker corporations’ mergers, the investors in each such blocker corporation received a number of shares of the Company’s Class A common stock with a value based on the Series A Preferred Units held by such blocker corporation for a total of 15,279,190 shares of the Company’s Class A common stock. |
• | In connection with the IPO, the Company repurchased all 100 shares of common stock previously issued to Yuma for an immaterial amount. |
(In thousands, except unit and per unit amounts) | As of December 31, 2022 | As of March 31, 2022 | ||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash | $ | 100,081 | $ | 29,070 | ||||
Accounts receivable, net of allowance of $1,926 and $3,574, respectively | 285,800 | 168,303 | ||||||
Contract assets | 267,665 | 292,407 | ||||||
Inventories | 251,198 | 172,208 | ||||||
Other current assets | 49,593 | 52,074 | ||||||
Total current assets | 954,337 | 714,062 | ||||||
Property and equipment, net | 7,910 | 7,423 | ||||||
Goodwill | 265,153 | 265,153 | ||||||
Other intangible assets, net | 1,383 | 2,528 | ||||||
Other assets | 30,912 | 28,123 | ||||||
Total assets | $ | 1,259,695 | $ | 1,017,289 | ||||
LIABILITIES, REDEEMABLE PREFERRED UNITS AND PARENT COMPANY EQUITY (DEFICIT) | ||||||||
Current liabilities: | ||||||||
Accounts payable | 311,354 | 266,596 | ||||||
Accrued expenses | 44,189 | 26,176 | ||||||
Deferred revenue | 173,219 | 77,866 | ||||||
Due to related parties | 41,185 | 39,314 | ||||||
Other current liabilities | 34,665 | 63,419 | ||||||
Total current liabilities | 604,612 | 473,371 | ||||||
Other liabilities | 35,907 | 42,785 | ||||||
Total liabilities | 640,519 | 516,156 | ||||||
Redeemable preferred units, $0.001 par value, 23,809,524 units and 238,096 units issued and outstanding, respectively | 522,918 | 504,168 | ||||||
Parent company equity (deficit): | ||||||||
Accumulated net parent investment | 96,258 | (3,035 | ) | |||||
Total parent company equity (deficit) | 96,258 | (3,035 | ) | |||||
Total liabilities, redeemable preferred units and parent company equity (deficit) | $ | 1,259,695 | $ | 1,017,289 | ||||
Three-Month Periods Ended | Nine-Month Periods Ended | |||||||||||||||
(In thousands) | December 31, 2022 | December 31, 2021 | December 31, 2022 | December 31, 2021 | ||||||||||||
Revenue | $ | 513,370 | $ | 337,607 | $ | 1,383,742 | $ | 1,017,779 | ||||||||
Cost of sales | 431,111 | 303,843 | 1,187,081 | 909,700 | ||||||||||||
Gross profit | 82,259 | 33,764 | 196,661 | 108,079 | ||||||||||||
Selling, general and administrative expenses | 18,613 | 13,009 | 55,475 | 39,149 | ||||||||||||
Research and development | 4,984 | 3,649 | 13,283 | 10,600 | ||||||||||||
Operating income | 58,662 | 17,106 | 127,903 | 58,330 | ||||||||||||
Interest and other (income) expense, net | (2,366 | ) | 91 | (1,118 | ) | 371 | ||||||||||
Income before income taxes | 61,028 | 17,015 | 129,021 | 57,959 | ||||||||||||
Provision for income taxes | 18,442 | 4,469 | 35,218 | 12,840 | ||||||||||||
Net income and comprehensive income | $ | 42,586 | $ | 12,546 | $ | 93,803 | $ | 45,119 | ||||||||
Three-Month Periods ended December 31, 2022 and 2021 | Net Parent Investment | Redeemable Preferred Units | ||||||
(In thousands) | ||||||||
BALANCE AT SEPTEMBER 30, 2022 | $ | 86,400 | $ | 516,668 | ||||
Stock-based compensation expense | 940 | — | ||||||
Net income | 42,586 | — | ||||||
Paid-in-Kind | (6,250 | ) | 6,250 | |||||
Net transfers from Parent | (27,418 | ) | — | |||||
BALANCE AT DECEMBER 31, 2022 | $ | 96,258 | $ | 522,918 | ||||
BALANCE AT OCTOBER 1, 2021 | $ | 463,578 | $ | — | ||||
Stock-based compensation expense | 842 | — | ||||||
Net income | 12,546 | — | ||||||
Net transfers to Parent | 11,550 | — | ||||||
BALANCE AT DECEMBER 31, 2021 | $ | 488,516 | $ | — | ||||
Nine-Month Periods ended December 31, 2022 and 2021 | Net Parent Investment | Redeemable Preferred Units | ||||||
(In thousands) | ||||||||
BALANCE AT MARCH 31, 2022 | $ | (3,035 | ) | $ | 504,168 | |||
Stock-based compensation expense | 2,790 | — | ||||||
Net income | 93,803 | — | ||||||
Paid-in-Kind | (18,750 | ) | 18,750 | |||||
Net transfers from Parent | 21,450 | — | ||||||
BALANCE AT DECEMBER 31, 2022 | $ | 96,258 | $ | 522,918 | ||||
BALANCE AT MARCH 31, 2021 | $ | 456,047 | $ | — | ||||
Stock-based compensation expense | 2,222 | — | ||||||
Net income | 45,119 | — | ||||||
Net transfers to Parent | (14,872 | ) | — | |||||
BALANCE AT DECEMBER 31, 2021 | $ | 488,516 | $ | — | ||||
Nine-Month Periods Ended | ||||||||
(In thousands) | December 31, 2022 | December 31, 2021 | ||||||
Cash flows from operating activities: | ||||||||
Net income | $ | 93,803 | $ | 45,119 | ||||
Depreciation and amortization | 3,594 | 9,889 | ||||||
Changes in working capital and other, net | (25,015 | ) | (160,750 | ) | ||||
Net cash provided by (used in) operating activities | 72,382 | (105,742 | ) | |||||
Cash flows from investing activities: | ||||||||
Purchases of property and equipment | (2,653 | ) | (5,123 | ) | ||||
Proceeds from the disposition of property and equipment | 24 | 167 | ||||||
Net cash used in investing activities | (2,629 | ) | (4,956 | ) | ||||
Cash flows from financing activities: | ||||||||
Net transfers (to) from Parent | 1,258 | (14,872 | ) | |||||
Net cash provided by (used in) financing activities | 1,258 | (14,872 | ) | |||||
Net increase (decrease) in cash | 71,011 | (125,570 | ) | |||||
Cash beginning of period | 29,070 | 190,589 | ||||||
Cash end of period | $ | 100,081 | $ | 65,019 | ||||
Non-cash investing activity: | ||||||||
Unpaid purchases of property and equipment | $ | 422 | $ | 480 | ||||
Non-cash financing activity: | ||||||||
Capitalized offering costs | $ | 2,534 | $ | 3,815 | ||||
Legal settlement paid by Parent, net of insurance recoveries | $ | 20,428 | $ | — |
1. | Organization of Nextracker |
2. | Summary of accounting policies |
Three-month periods ended | Nine-month periods ended | |||||||||||||||
(In thousands) | December 31, 2022 | December 31, 2021 | December 31, 2022 | December 31, 2021 | ||||||||||||
Beginning balance | $ | 11,431 | $ | 16,213 | $ | 10,485 | $ | 17,085 | ||||||||
Provision (release) for warranties issued (1) | 8,582 | (2,373 | ) | 9,974 | (2,608 | ) | ||||||||||
Payments | (117 | ) | (404 | ) | (563 | ) | (1,041 | ) | ||||||||
Ending balance | $ | 19,896 | $ | 13,436 | $ | 19,896 | $ | 13,436 | ||||||||
(1) | During the three- and nine-month periods ended December 31, 2022, the Company identified a specific design issue with a non-core product, and recorded an additional $8.7 million charge to cost of sales on its condensed combined statement of operations and comprehensive income, related to future remediation costs, which may include replacement parts and services. |
3. | Revenue |
Three-month periods ended | Nine-month periods ended | |||||||||||||||
(In thousands) | December 31, 2022 | December 31, 2021 | December 31, 2022 | December 31, 2021 | ||||||||||||
Timing of Transfer | ||||||||||||||||
Point in time | $ | 7,618 | $ | 41,220 | $ | 40,771 | $ | 63,024 | ||||||||
Over time | 505,752 | 296,387 | 1,342,971 | 954,755 | ||||||||||||
Total revenue | $ | 513,370 | $ | 337,607 | $ | 1,383,742 | $ | 1,017,779 | ||||||||
4. | Goodwill and intangible assets |
As of December 31, 2022 | As of March 31, 2022 | |||||||||||||||||||||||
(In thousands) | Gross carrying amount | Accumulated amortization | Net carrying amount | Gross carrying amount | Accumulated amortization | Net carrying amount | ||||||||||||||||||
Intangible assets: | ||||||||||||||||||||||||
Trade name and other intangibles | $ | 15,900 | $ | (14,517 | ) | $ | 1,383 | $ | 15,900 | $ | (13,372 | ) | $ | 2,528 | ||||||||||
Total | $ | 15,900 | $ | (14,517 | ) | $ | 1,383 | $ | 15,900 | $ | (13,372 | ) | $ | 2,528 | ||||||||||
Three-month periods ended | Nine-month periods ended | |||||||||||||||
(In thousands) | December 31, 2022 | December 31, 2021 | December 31, 2022 | December 31, 2021 | ||||||||||||
Cost of sales | $ | 63 | $ | 63 | $ | 188 | $ | 3,980 | ||||||||
Selling general and administrative expense | — | 478 | 957 | 3,944 | ||||||||||||
Total amortization expense | $ | 63 | $ | 541 | $ | 1,145 | $ | 7,924 | ||||||||
(In thousands) | Amount | |||
Fiscal year ending March 31, | ||||
2023 (1) | $ | 62 | ||
2024 | 250 | |||
2025 | 250 | |||
2026 | 250 | |||
2027 | 250 | |||
Thereafter | 321 | |||
Total amortization expense | $ | 1,383 | ||
(1) | Represents estimated amortization for the remaining fiscal three-month period ending March 31, 2023. |
5. | Stock-based compensation |
Three-month periods ended | Nine-month periods ended | |||||||||||||||
(In thousands) | December 31, 2022 | December 31, 2021 | December 31, 2022 | December 31, 2021 | ||||||||||||
Cost of sales | $ | 350 | $ | 426 | $ | 1,105 | $ | 1,105 | ||||||||
Selling, general and administrative expenses | 590 | 416 | 1,685 | 1,117 | ||||||||||||
Total stock-based compensation expense | $ | 940 | $ | 842 | $ | 2,790 | $ | 2,222 | ||||||||
6. | Relationship with parent and related parties |
Three-month periods ended | Nine-month periods ended | |||||||||||||||
(In thousands) | December 31, 2022 | December 31, 2021 | December 31, 2022 | December 31, 2021 | ||||||||||||
Corporate allocations (excluding stock-based compensation expense) | $ | 65 | $ | 2,604 | $ | 1,463 | $ | 7,849 | ||||||||
Transfer of operations to Nextracker (1) | (51,527 | ) | 4,558 | (8,440 | ) | 401 | ||||||||||
Net cash pooling activities (2) | 10,154 | (655 | ) | (1,195 | ) | (37,843 | ) | |||||||||
Income taxes | 13,890 | 5,043 | 29,622 | 14,721 | ||||||||||||
Net transfers (to) from Parent | $ | (27,418 | ) | $ | 11,550 | $ | 21,450 | $ | (14,872 | ) | ||||||
(1) | Primarily represents certain international operations where related income and/or losses are included in Nextracker’s condensed combined statements of operations. Cash was also collected by the international operations on behalf of Nextracker, for which Nextracker and Flex do not intend to settle in the future. For the nine-month period ended December 31, 2022, the balance includes the legal settlement paid by Flex as further disclosed in Note 7. |
(2) | Primarily represents financing activities for cash pooling and capital transfers. |
7. | Commitments and contingencies |
8. | Income taxes |
Three-month periods ended | Nine-month periods ended | |||||||||||||||
(In thousands) | December 31, 2022 | December 31, 2021 | December 31, 2022 | December 31, 2021 | ||||||||||||
Income tax | 18,442 | 4,469 | 35,218 | 12,840 | ||||||||||||
Effective tax rates | 30.2 | % | 26.3 | % | 27.3 | % | 22.2 | % |
9. | Segment reporting |
Three-month periods ended | Nine-month periods ended | |||||||||||||||
(In thousands) | December 31, 2022 | December 31, 2021 | December 31, 2022 | December 31, 2021 | ||||||||||||
Revenue: | ||||||||||||||||
U.S. | $ | 327,548 | $ | 161,703 | $ | 908,361 | $ | 605,743 | ||||||||
Rest of the World | 185,822 | 175,904 | 475,381 | 412,036 | ||||||||||||
Total | $ | 513,370 | $ | 337,607 | $ | 1,383,742 | $ | 1,017,779 | ||||||||
10. | Subsequent events |
• | Immediately prior to the closing of the IPO, Nextracker Inc. issued 128,794,522 shares of its Class B common stock to Yuma, Yuma Subsidiary, Inc., a Delaware corporation and wholly-owned subsidiary of Yuma (“Yuma Sub”), and TPG Rise in exchange for cash consideration, which number of shares was equal to the number of common units of the LLC held directly or indirectly by Yuma, Yuma Sub and TPG Rise immediately following the Transactions and before giving effect to the IPO. |
• | Immediately prior to the closing of the IPO, the LLC made a distribution in an aggregate amount of $175.0 million (the “Distribution”). With respect to such Distribution, $21.7 million was distributed to TPG Rise and $153.3 million to Yuma and Yuma Sub in accordance with their pro rata LLC units. The Distribution was financed, in part, with net proceeds from the $150.0 million term loan under the 2023 Credit Agreement, as further discussed below. |
• | Nextracker Inc. used all of the net proceeds from the IPO ($693.8 million ) as consideration for Yuma’s transfer to Nextracker Inc. of 30,590,000LLC common units (the “LLC Common Units”) at a price per unit equal to $ 22.68. |
• | In connection with Yuma’s transfer to Nextracker Inc. of 30,590,000 LLC Common Units, a corresponding number of shares of Nextracker Inc.’s Class B common stock held by Yuma was canceled. |
• | In connection with the IPO, the Series A Preferred Units held by TPG Rise were automatically converted into 25,026,093 LLC Common Units which are exchangeable, together with a corresponding number of shares of Nextracker Inc.’s Class B common stock, for shares of Nextracker Inc.’s Class A common stock (or cash). Notwithstanding the foregoing, as permitted under and in accordance with the limited liability company agreement of the LLC in effect prior to the IPO (the “Prior LLC Agreement”), on February 8, 2023, TPG Rise exercised its right to have certain blocker corporations affiliated with TPG Rise each merge with a separate direct, wholly-owned subsidiary of Nextracker Inc., with the blocker corporations surviving each such merger, in a transaction intended to qualify as a tax-free transaction. In connection with such blocker corporations’ mergers, the investors in each such blocker corporation received a number of shares of Nextracker Inc.’s Class A common stock with a value based on the Series A Preferred Units held by such blocker corporation for a total of 15,279,190 shares of Nextracker Inc.’s Class A common stock. |
• | In connection with the IPO, Nextracker Inc.’s repurchased all 100 shares of common stock previously issued to Yuma for an immaterial amount. |
TPG Rise and the following affiliates of TPG Rise: TPG Rise Climate Flash Cl BDH, L.P., TPG Rise Climate BDH, L.P. and The Rise Fund II BDH, L.P. (collectively, the “TPG Affiliates”). The Tax Receivable Agreement provides for the payment by Nextracker Inc. to Yuma, Yuma Sub, TPG and
the TPG Affiliates (or certain permitted transferees thereof) of
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ITEM 2. | MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS |
Unless the context otherwise requires, references in this Management’s Discussion and Analysis of Financial Condition and Results of Operations to “Nextracker”, the “Company”, “we”, “us” and “our” shall mean the LLC (formerly known as NEXTracker Inc.), together with its consolidated subsidiaries and with the operations that comprise the legacy solar tracker business of Flex Ltd. (“Flex”), which conducts all operations and all of the business operations of Nextracker Inc. (which was formed on December 19, 2022, for the purpose of completing the IPO and related Transactions, as further described in Note 1, “Description of the business and summary of significant accounting policies,” and Note 4, “Subsequent events,” in the notes to the Nextracker Inc. unaudited condensed financial statement, and Note 1, “Organization of Nextracker,” and Note 10, “Subsequent events,” in the notes to the unaudited condensed combined financial statements included elsewhere in this quarterly report Form 10-Q (the “Quarterly Report”). References in this Management’s Discussion and Analysis of Financial Condition and Results of Operations to “Flex” or “Parent” refer to Flex Ltd., a Singapore incorporated public company limited by shares and having a registration no. 199002645H, and its consolidated subsidiaries, unless the context otherwise indicates.
This Management’s Discussion and Analysis of Financial Condition and Results of Operations is designed to provide a reader of our combined financial statements with a narrative from the perspective of the Company’s management. You should read the following discussion in conjunction with our unaudited condensed combined financial statements and the related notes and other information included elsewhere in this Quarterly Report, as well as our audited combined financial statements and related notes included in the prospectus dated February 8, 2023 that forms a part of Nextracker Inc.’s Registration Statement on Form S-1 (File No. 333-269238), as filed with the SEC pursuant to Rule 424(b)(4) promulgated under the Securities Act of 1933, as amended (the “Prospectus”). In addition to historical financial information, the following discussion and analysis contains forward- looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Such statements are based upon current expectations that involve risks, uncertainties and assumptions. Any statements contained herein that are not statements of historical fact may be deemed to be forward-looking statements. For example, the words “believes,” “anticipates,” “plans,” “expects,” “intends” and similar expressions are intended to identify forward-looking statements. Our actual results and timing of selected events may differ materially from those results anticipated and discussed in the forward-looking statements as a result of many factors, Factors that might cause such a discrepancy include, but are not limited to, those discussed under the sections entitled “Liquidity and Capital Resources” below and “Risk Factors”. All forward-looking statements in this document are based on information available to us as of the date of this Quarterly Report and we assume no obligation to update any such forward-looking statements.
OVERVIEW
We are a leading provider of intelligent, integrated solar tracker and software solutions used in utility-scale and ground-mounted distributed generation solar projects around the world. Our products enable solar panels, also known as modules, in utility-scale power plants to follow the sun’s movement across the sky and optimize plant performance. We have led the solar industry based on gigawatts (“GW”) shipped globally from 2015 to 2021 and in the U.S. from 2016 to 2021. We delivered 15 GW, 12 GW and over 10 GW to our customers in fiscal years 2022, 2021 and 2020, respectively. In addition, we delivered 13.2 GW during the nine-month period ended December 31, 2022 compared to approximately 10.7 GW during the nine-month period ended December 31, 2021.
We were founded in 2013 by our Chief Executive Officer, Dan Shugar, and were acquired by Flex Ltd. in 2015. Flex provides design, manufacturing and supply chain services through a network of over 100 locations in approximately 30 countries across five continents. Flex’s expertise in global supply chains and procurement and its strong financial backing has helped us accelerate our penetration of our end markets and run a more optimized supply chain, and we intend to continue leveraging these learnings from Flex now that we are a standalone company. Over time, we have developed new and innovative hardware and software products and services to scale our capabilities. In 2016, Flex acquired BrightBox Technologies on our behalf to further our machine learning capabilities.
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We have shipped approximately 75 GW of solar tracker systems as of December 31, 2022 to projects on six continents. Our customers include engineering, procurement and construction firms (“EPCs”), as well as solar project developers and owners. Developers originate projects, select and acquire sites, obtain permits, select contractors, negotiate power offtake agreements, and oversee the building of projects. EPCs design and optimize the system, procure components, build and commission the plant, and operate the plant for a limited time until transfer to a long- term owner. Owners, which are often independent power producers, own and operate the plant, typically as part of a portfolio of similar assets. Owners generate cash flows through the sale of electricity to utilities, wholesale markets, or end users.
For the majority of our projects, our direct customer is the EPC. We also engage with project owners and developers and enter into master supply agreements that cover multiple projects. We are a qualified, preferred provider to some of the largest solar EPCs, project owners, and developers in the world. We had revenues of $1.4 billion for the nine-month period ended December 31, 2022 and $1.5 billion in fiscal year 2022.
The following tables set forth geographic information of revenue based on the locations to which the products are shipped:
Three-month periods ended | Nine-month periods ended | |||||||||||||||||||||||||||||||
(In thousands) (Unaudited) | December 31, 2022 | December 31, 2021 | December 31, 2022 | December 31, 2021 | ||||||||||||||||||||||||||||
Revenue: | ||||||||||||||||||||||||||||||||
U.S. | $ | 327,548 | 64 | % | $ | 161,703 | 48 | % | $ | 908,361 | 66 | % | $ | 605,743 | 60 | % | ||||||||||||||||
Rest of the World | 185,822 | 36 | % | 175,904 | 52 | % | 475,381 | 34 | % | 412,036 | 40 | % | ||||||||||||||||||||
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Total | $ | 513,370 | $ | 337,607 | $ | 1,383,742 | $ | 1,017,779 | ||||||||||||||||||||||||
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The following table sets forth the revenue from customers that individually accounted for greater than 10% of our revenue during the periods included below:
Three-month periods ended | Nine-month periods ended | |||||||||||||||
(In millions) | December 31, 2022 | December 31, 2021 | December 31, 2022 | December 31, 2021 | ||||||||||||
Customer A* | $ | 131.8 | $ | 35.4 | $ | 295.1 | $ | 140.6 |
* | SOLV Energy |
Initial Public Offering
On February 8, 2023, Nextracker Inc.’s registration statement on Form S-1 relating to its initial public offering (“IPO”) was declared effective by the Securities and Exchange Commission (“SEC”) and the shares of our Class A common stock began trading on the Nasdaq Global Select Market on February 9, 2023. At the closing of the IPO on February 13, 2023, Nextracker Inc. issued and sold 30,590,000 shares of its Class A common stock (including 3,990,000 shares issued to the underwriters upon the exercise in full of their option to purchase additional shares) at a public offering price of $24.00 per share. Nextracker Inc. received net proceeds of $693.8 million, after deducting $40.4 million in underwriting discount. Nextracker Inc. used all of the net proceeds from the offering to purchase 30,590,000 LLC Common Units from Yuma, Inc., a Delaware corporation and indirect wholly-owned subsidiary of Flex Ltd. (“Yuma”) at a price per share of $22.68, or $24.00 less the underwriting discount. Upon closing of the IPO, approximately $8.3 million of offering costs were paid by Flex. See further discussion of the Transactions related to the IPO in Note 4, “Subsequent events,” in the notes to the Nextracker Inc. unaudited condensed financial statement, and, Note 10, “Subsequent events,” in the notes to the unaudited condensed combined financial statements included elsewhere in this Quarterly Report.
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Reverse Unit Split
The Board of Managers and the members of Nextracker LLC approved an amendment to the LLC Agreement in effect prior to the IPO, effecting a 1-for-2.1 reverse unit split of the units issued by the LLC. The reverse split was effected on January 30, 2023.
Our business model
We generate revenue from the sale of solar trackers, such as NX Horizon and NX Gemini, and from licensing our TrueCapture software product. Our most significant source of revenue is the sale of solar tracking products. Our customers include EPCs, as well as solar project developers and owners. We usually enter into a different contract with our customers for each individual solar project. Contracts typically stipulate total price, technical solution, specifications of the system sold, delivery and activation schedule, warranty terms and related services provided. The delivery period for a specific contract can range from days to several months depending on the size of the project. Our contract prices range from a few hundred thousand dollars for the smallest projects to over one hundred million dollars for the largest.
Demand for our products is largely driven by installations of utility-scale solar projects around the world. The volume of solar projects installations is dependent on a variety of factors, including, but not limited to, the cost of solar plants in comparison to other forms of power generation, prevailing electricity prices, conventional power generation plant retirement, global renewable energy targets, government regulations, and public incentives promoting solar energy. Our revenue is subject to variability as these factors change over time, and as a result may cause variability in our quarterly shipments. Increases in competitive tracker pricing pressure can also affect our revenue by lowering the average selling price (“ASP”) of our products.
We operate in nearly all significant tracker markets around the world. We have dedicated sales staff in the United States, Mexico, Spain, Australia, Brazil, Singapore, India and the United Arab Emirates to support our sales activities in those geographies. Our local presence is complemented with the following go-to-market strategies:
• | Our sales and marketing strategy is focused on building long-term relationships with key stakeholders involved in developing, building, owning, and maintaining utility-scale solar projects. We educate those stakeholders on the benefits of our solutions, including increased energy yield performance, superior constructability, reliability, ease of maintenance, and advanced software and sensor capabilities compared to competing products. |
• | In the United States and more mature international markets, our sales team maintains active relationships with key stakeholders and customers such as developers and builders of utility-scale solar systems. We leverage these relationships and knowledge of the available project pipeline, inbound requests for proposals (“RFPs”) from potential customers, and competitive dynamics. Frequently we are either awarded the project outright or become ‘short-listed’ among a group of eligible bidders. In each case we create a detailed proposal that leverages our project engineering expertise to offer a compelling project and/or project portfolio-specific value proposition. |
• | In less mature international markets, we leverage a variety of broad and account-based marketing techniques to acquire customers. These include conducting thought leadership seminars and developer forums, installation training programs, and participation in industry conferences, events, and trade associations. |
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• | We set pricing for our products based on the long-term value derived from energy yield performance and total cost of ownership. For our core tracker products, we offer differing pricing to address multiple market segments based on site characteristics and weather protection requirements, among other factors. |
Basis of presentation
We have historically operated as part of Flex and not as a separate, publicly-traded company. Our unaudited condensed combined financial statements have been derived from Flex’s historical accounting records and are presented on a carve-out basis. All sales and costs as well as assets and liabilities directly associated with our business activity are included as a component of the unaudited condensed combined financial statements. The unaudited condensed combined financial statements also include allocations of certain general, administrative, sales and marketing expenses and cost of sales from Flex’s corporate office and allocations of related assets, liabilities and Flex’s investment, as applicable. The allocations have been determined on what we believe to be a reasonable basis; however, the amounts are not necessarily representative of the amounts that would have been reflected in the unaudited condensed combined financial statements had we been an entity that operated separately from Flex during these periods presented. Further, the historical condensed combined financial statements may not be reflective of what our final position, results of operations, or cash flows will be in the future as a separate public company. During the fourth quarter of fiscal year 2022, we entered into a transition service agreement with Flex, whereby Flex agreed to provide, or cause to be provided, certain services to us, which were previously included as part of the allocations from Flex. As consideration, we agreed to pay Flex the amount specified for each service as described in the transition service agreement. Related-party allocations, including the method for such allocations, are discussed further in Note 6, “Relationship with parent and related parties” in the notes to the unaudited condensed combined financial statements included elsewhere in this Quarterly Report.
For example, our historical condensed combined financial statements in this Quarterly Report include expense allocations for certain support functions that are provided on a centralized basis within Flex, such as corporate costs, shared services and other selling, general and administrative costs that benefit the Company, among others. Under the transition service agreement Flex will continue to provide us with some of the services related to these functions on a transitional basis in exchange for agreed-upon fees, we will incur other costs to replace the services and resources that will not be provided by Flex. Since our IPO, we have incurred and will continue to incur additional costs as a separate public company. Our total costs related to such support functions may differ from the costs that were historically allocated to us from Flex. These additional costs are primarily for the following:
• | additional personnel costs, including salaries, benefits and potential bonuses and/or stock-based compensation awards for staff, including staff additions to replace support provided by Flex that is not covered by the transition services agreement; and |
• | corporate governance costs, including director and officer insurance costs, board of director compensation and expenses, audit and other professional services fees, annual report and proxy statement costs, SEC filing fees, transfer agent fees, consulting and legal fees and Nasdaq fees, bank fees or other costs related to existing or future financing arrangements. |
Certain factors could impact the nature and amount of these separate public company costs, including the finalization of our staffing and infrastructure needs. We expect to incur additional separate public company costs in excess of the costs that have been historically allocated to us.
As part of Flex, we have been dependent upon Flex for all of our working capital and financing requirements as Flex used a centralized approach to cash management and financing of its operations. Our financial transactions are accounted for through our “net parent investment” account and none of Flex’s debt at the corporate level has been assigned to us in the financial statements. Historically, as we generated cash flows from operations, cash has been swept by Flex into global cash accounts managed at the parent level. In March 2021, the U.S. cash pooling arrangement between us and Flex was terminated, and we executed a new cash pooling agreement. For as long as Nextracker is a controlled entity of Flex, Nextracker’s U.S. operations may continue to participate in the Flex cash pooling management programs intra-quarter, and all outstanding positions are settled or scheduled for settlement as of each quarter end. We have also historically utilized Flex for financial support in the form of parent guarantees and letters of financial support to execute certain arrangements with our customers.
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Key business and operational metrics
In addition to information related to our financial performance, we use certain operating metrics to evaluate our business. These metrics, together with our financial statements, are used by our management to measure our performance, identify trends impacting our business and formulate projections. The primary operating metric we use to evaluate our sales performance and to track market acceptance of our products from year to year is GW delivered generally and the change in GWs delivered from period to period specifically. GWs delivered is the only operational metric that directly relates to our revenues. GWs delivered is a commonly used operational metric by analysts and competitors in our industry and can provide additional information to investors related to the relative size of our operations as well as a basis to measure our market share. GWs is calculated specifically for each project and represents the nameplate, or maximum, power output capacity of the project under optimized conditions once the project is fully operational. GWs delivered for a project is calculated as the total nameplate capacity of the project multiplied by the cost of materials delivered to the project as a percentage of the total materials cost of the project.
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GW delivered | 5.2 | 3.8 | 37 | % | 13.2 | 10.7 | 23 | % |
Key components of our results of operations
The following discussion describes certain line items in our combined statements of operations and comprehensive income.
Revenue
We derive our revenue from the sale of solar trackers and software products to our customers. Our revenue growth is dependent on (i) our ability to maintain and expand our market share, (ii) total market growth and (iii) our ability to develop and introduce new products driving performance enhancements and cost efficiencies throughout the solar power plant.
Cost of sales and gross profit
Cost of sales consists primarily of purchased components, shipping and other logistics costs, applicable tariffs, standard product warranty costs, amortization of certain acquired intangible assets, stock-based compensation and direct labor. Direct labor costs represent expenses of personnel directly related to project execution such as supply chain, logistics, quality, tooling, operations and customer satisfaction. Amortization of intangibles consists of developed technology and certain acquired patents over its expected period of use and is also included under cost of sales.
Steel prices, cost of transportation, and labor costs in countries where our suppliers perform manufacturing activities affect our cost of sales. Our ability to lower our cost of sales depends on implementation and design improvements to our products as well as on driving more cost-effective manufacturing processes with our suppliers. We generally do not directly purchase raw materials such as steel or electronic components and do not hedge against changes in their price. Most of our cost of sales are directly affected by sales volume. Personnel costs related to our supply chain, logistics, quality, tooling and operations are not directly impacted by our sales volume.
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Operating expenses
Selling, general and administrative expenses
Selling, general and administrative expenses consist primarily of personnel-related costs associated with our administrative and support functions. These costs include, among other things, personnel costs, stock-based compensation, facilities charges including depreciation associated with administrative functions, professional services, travel expenses, and allowance for bad debt. Professional services include audit, legal, tax and other consulting services. We have expanded our sales organization and expect to continue growing our sales headcount to support our planned growth. We have incurred and expect to continue to incur on an ongoing basis certain new costs related to the requirements of being a separate publicly-traded company, including insurance, accounting, tax, legal and other professional services costs, which could be material. Amortization of intangibles consists of customer relationships and trade names over their expected period of use and is also included under selling, general and administrative expenses.
If the performance-based vesting condition for our equity-based compensation awards issued under the Restated 2022 Nextracker LLC Equity Incentive Plan had occurred on December 31, 2022, we would have recognized $10.4 million of equity-based compensation expense for the awards that had satisfied or partially satisfied the time-based vesting condition on that date and would have approximately $37.1 million of unrecognized compensation cost that represents the awards which have not met the time-based vesting condition as of December 31, 2022.
Research and development
Research and development expenses consist primarily of personnel-related costs associated with our engineering employees as well as third party consulting. Research and development activities include improvements to our existing products, development of new tracker products and software products. We expense substantially all research and development expenses as incurred. We expect that the dollar amount of research and development expenses will increase in amount over time.
Non-operating expenses
Income tax expense
We expect our taxable income to primarily be from the allocation of taxable income from the LLC. We are subject to federal and state income taxes in the United States on the income allocated to us from the LLC. In addition, while the majority of the LLCs taxable income will be from United States sources and will not be subject to LLC level income tax, the LLC will have taxable income in some foreign subsidiaries that will be subject to tax at the level of the LLC. We may be entitled to foreign tax credits in the United States for our share of the foreign tax paid by the LLC.
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RESULTS OF OPERATIONS
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(In thousands, except percentages) (Unaudited) | December 31, 2022 | December 31, 2021 | % change | December 31, 2022 | December 31, 2021 | % change | ||||||||||||||||||
Condensed Combined Statement of Operations and Comprehensive Income Data: | ||||||||||||||||||||||||
Revenue | $ | 513,370 | $ | 337,607 | 52 | % | $ | 1,383,742 | $ | 1,017,779 | 36 | % | ||||||||||||
Cost of sales | 431,111 | 303,843 | 42 | 1,187,081 | 909,700 | 30 | ||||||||||||||||||
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Gross profit | 82,259 | 33,764 | 144 | 196,661 | 108,079 | 82 | ||||||||||||||||||
Selling, general and administrative expenses | 18,613 | 13,009 | 43 | 55,475 | 39,149 | 42 | ||||||||||||||||||
Research and development | 4,984 | 3,649 | 37 | 13,283 | 10,600 | 25 | ||||||||||||||||||
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Operating income | 58,662 | 17,106 | 243 | 127,903 | 58,330 | 119 | ||||||||||||||||||
Interest and other (income) expense, net | (2,366 | ) | 91 | (2,700 | ) | (1,118 | ) | 371 | (401 | ) | ||||||||||||||
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Income before income taxes | 61,028 | 17,015 | 259 | 129,021 | 57,959 | 123 | ||||||||||||||||||
Provision for income taxes | 18,442 | 4,469 | 313 | 35,218 | 12,840 | 174 | ||||||||||||||||||
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Net income and comprehensive income | $ | 42,586 | $ | 12,546 | 239 | % | $ | 93,803 | $ | 45,119 | 108 | % | ||||||||||||
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Non-GAAP measures
We present Non-GAAP gross profit, Non-GAAP operating income, Non-GAAP net income, Adjusted EBITDA, Adjusted EBITDA Margin and Adjusted free cash flow as supplemental measures of our performance. We define Non-GAAP gross profit as gross profit plus stock-based compensation expense and intangible amortization. We define Non-GAAP operating income as operating income plus stock-based compensation expense and intangible amortization. We define Non-GAAP net income as net income (loss) plus stock-based compensation expense, intangible amortization, and certain nonrecurring legal costs and other discrete events as applicable, net of their tax effects. We define Adjusted EBITDA as net income (loss) plus (i) interest, net, (ii) provision for income taxes, (iii) depreciation expense, (iv) intangible amortization, (v) stock-based compensation expense, and (vi) certain nonrecurring legal costs and other discrete events as applicable. Future adjustments to net income related to the Tax Receivable Agreement may be added back to or subtracted from net income to calculate Adjusted EBITDA. We define Adjusted EBITDA Margin as the percentage derived from Adjusted EBITDA divided by revenue. We define Adjusted free cash flow as net cash provided by (used in) operating activities less cash used for purchases of property and equipment plus proceeds from the disposition of property and equipment.
Non-GAAP gross profit, Non-GAAP operating income, Non-GAAP net income, Adjusted EBITDA, Adjusted EBITDA Margin and Adjusted free cash flow are intended as supplemental measures of performance that are neither required by, nor presented in accordance with, GAAP. We present these non-GAAP financial measures because we believe they assist investors and analysts in comparing our performance across reporting periods on a consistent basis by excluding items that we do not believe are indicative of our core operating performance. In addition, we may use all or any combination of Non-GAAP gross profit, Non-GAAP operating income, Non-GAAP net income, Adjusted EBITDA, Adjusted EBITDA Margin and Adjusted free cash flow as factors in evaluating management’s performance when determining incentive compensation and to evaluate the effectiveness of our business strategies.
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Among other limitations, Non-GAAP gross profit, Non-GAAP operating income, Non-GAAP net income, Adjusted EBITDA, Adjusted EBITDA Margin and Adjusted free cash flow do not reflect our cash expenditures or future capital expenditures or contractual commitments (including under the Tax Receivable Agreement), do not reflect the impact of certain cash or non-cash charges resulting from matters we consider not to be indicative of our ongoing operations and do not reflect the associated income tax expense or benefit related to those charges. In addition, other companies in our industry may calculate Non-GAAP gross profit, Non-GAAP operating income, Non-GAAP net income, Adjusted EBITDA, Adjusted EBITDA Margin and Adjusted free cash flow differently from us, which further limits their usefulness as comparative measures.
Because of these limitations, Non-GAAP gross profit, Non-GAAP operating income, Non-GAAP net income, Adjusted EBITDA, Adjusted EBITDA Margin and Adjusted free cash flow should not be considered in isolation or as substitutes for performance measures calculated in accordance with GAAP. We compensate for these limitations by relying primarily on our GAAP results and using non-GAAP financial measures on a supplemental basis. You should review the reconciliation to the most directly comparable GAAP measure of Non-GAAP gross profit, Non-GAAP operating income, Non-GAAP net income, Adjusted EBITDA, Adjusted EBITDA Margin and Adjusted free cash flow below and not rely on any single financial measure to evaluate our business.
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(In thousands, except percentages) | December 31, 2022 | December 31, 2021 | December 31, 2022 | December 31, 2021 | ||||||||||||
Other Financial Information: | ||||||||||||||||
Non-GAAP gross profit | $ | 82,672 | $ | 34,253 | $ | 197,954 | $ | 113,164 | ||||||||
Non-GAAP operating income | 59,665 | 18,489 | 133,279 | 68,476 | ||||||||||||
Non-GAAP net income | 43,396 | 13,772 | 97,196 | 52,763 | ||||||||||||
Adjusted EBITDA | 62,703 | 19,033 | 136,467 | 70,105 | ||||||||||||
Net income (% of revenue) | 8.3 | % | 3.7 | % | 6.8 | % | 4.4 | % | ||||||||
Adjusted EBITDA (% of revenue) | 12.2 | % | 5.6 | % | 9.9 | % | 6.9 | % | ||||||||
Adjusted free cash flow | 18,603 | (76,239 | ) | 69,753 | (110,698 | ) |
The following table provides a reconciliation of Non-GAAP gross profit to gross profit, Non-GAAP operating income to operating income, Non-GAAP net income to net income, Adjusted EBITDA to net income, and adjusted free cash flow to net cash provided by (used in) operating activities for each period presented.
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Reconciliation of GAAP to Non-GAAP Financial Measures: | ||||||||||||||||
GAAP gross profit | $ | 82,259 | $ | 33,764 | $ | 196,661 | $ | 108,079 | ||||||||
Stock-based compensation expense | 350 | 426 | 1,105 | 1,105 | ||||||||||||
Intangible amortization | 63 | 63 | 188 | 3,980 | ||||||||||||
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Non-GAAP gross profit | $ | 82,672 | $ | 34,253 | $ | 197,954 | $ | 113,164 | ||||||||
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GAAP operating income | $ | 58,662 | $ | 17,106 | $ | 127,903 | $ | 58,330 | ||||||||
Stock-based compensation expense | 940 | 842 | 2,790 | 2,222 | ||||||||||||
Intangible amortization | 63 | 541 | 1,145 | 7,924 | ||||||||||||
Legal costs (1) | — | — | 1,528 | — | ||||||||||||
Other | — | — | (87 | ) | — | |||||||||||
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Non-GAAP operating income | $ | 59,665 | $ | 18,489 | $ | 133,279 | $ | 68,476 | ||||||||
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GAAP net income | $ | 42,586 | $ | 12,546 | $ | 93,803 | $ | 45,119 | ||||||||
Stock-based compensation expense | 940 | 842 | 2,790 | 2,222 | ||||||||||||
Intangible amortization | 63 | 541 | 1,145 | 7,924 | ||||||||||||
Adjustment for taxes | (193 | ) | (157 | ) | (1,983 | ) | (2,502 | ) | ||||||||
Legal costs (1) | — | — | 1,528 | — | ||||||||||||
Other | — | — | (87 | ) | — | |||||||||||
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Non-GAAP net income | $ | 43,396 | $ | 13,772 | $ | 97,196 | $ | 52,763 | ||||||||
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Net income | $ | 42,586 | $ | 12,546 | $ | 93,803 | $ | 45,119 | ||||||||
Interest, net | (215 | ) | 1 | (380 | ) | 35 | ||||||||||
Provision for income taxes | 18,442 | 4,469 | 35,218 | 12,840 | ||||||||||||
Depreciation expense | 887 | 634 | 2,450 | 1,965 | ||||||||||||
Intangible amortization | 63 | 541 | 1,145 | 7,924 | ||||||||||||
Stock-based compensation expense | 940 | 842 | 2,790 | 2,222 | ||||||||||||
Legal costs (1) | — | — | 1,528 | — | ||||||||||||
Other | — | — | (87 | ) | — | |||||||||||
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Adjusted EBITDA | $ | 62,703 | $ | 19,033 | $ | 136,467 | $ | 70,105 | ||||||||
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Net income (% of revenue) | 8.3 | % | 3.7 | % | 6.8 | % | 4.4 | % | ||||||||
Adjusted EBITDA (% of revenue) | 12.2 | % | 5.6 | % | 9.9 | % | 6.9 | % | ||||||||
Net cash provided by (used in) operating activities | $ | 19,921 | $ | (74,555 | ) | $ | 72,382 | $ | (105,742 | ) | ||||||
Purchase of property and equipment | (1,318 | ) | (1,684 | ) | (2,653 | ) | (5,123 | ) | ||||||||
Proceeds from the disposition of property and equipment | — | — | 24 | 167 | ||||||||||||
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Adjusted free cash flow | $ | 18,603 | $ | (76,239 | ) | $ | 69,753 | $ | (110,698 | ) | ||||||
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(1) | Represents additional charges incurred in relation to the litigation with Array Technologies, Inc (“ATI”), as further described in Note 7, “Commitments and contingencies” in the notes to the unaudited condensed combined financial statements included elsewhere in this Quarterly Report. The estimated net settlement and direct legal costs in aggregate are excluded from the Company’s Non-GAAP income. Based on historical experience we do not believe that the settlement and associated charges are normal, recurring operating expenses indicative of our core operating performance, nor were these charges taken into account as factors in evaluating management’s performance when determining incentive compensation or to evaluate the effectiveness of the Company’s business strategies. |
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Comparison of the three-month periods ended December 31, 2022 and 2021
Revenue
Revenue increased by $175.8 million, or 52%, for the three-month period ended December 31, 2022 compared to the three-month period ended December 31, 2021. Approximately $130 million of the increase was the result of a 37% increase in gigawatts delivered as we delivered 5.2 GW for the three-month period ended December 31, 2022, compared to 3.8 GW for the three-month period ended December 31, 2021, coupled with a slight increase in our average selling price directly associated with higher freight and logistics costs included in our selling price compared to the prior year period. Revenue increased approximately $165.8 million, or 103%, in the U.S. and $9.9 million or 6% in the Rest of the World for the three-month period ended December 31, 2022 compared to the three-month period ended December 31, 2021.
Cost of sales and gross profit
Cost of sales increased by $127.3 million, or 42%, for the three-month period ended December 31, 2022 compared to the three-month period ended December 31, 2021 primarily due to the increase in sales noted above, partially offset by a decrease in freight and logistics costs. Freight and logistics costs as a percentage of cost of sales decreased by approximately 220 basis points for the three-month period ended December 31, 2022 compared to the three-month period ended December 31, 2021.
Gross profit increased by $48.5 million, or 144%, for the three-month period ended December 31, 2022 compared to the three-month period ended December 31, 2021 primarily resulting from the increase in sales noted above coupled with higher recovery of freight and logistics costs.
Selling, general and administrative expenses
Selling, general and administrative expenses increased $5.6 million, or 43%, to $18.6 million for the three-month period ended December 31, 2022, from approximately $13.0 million in the three-month period ended December 31, 2021, while remaining somewhat flat at approximately 4% as a percent of revenue in both periods. The increase in selling, general and administrative expenses was primarily the result of our continued expansion of our sales organization in line with the growth in the global market.
Research and development
Research and development expenses increased $1.3 million, or 37%, to $5.0 million for the three-month period ended December 31, 2022 from approximately $3.6 million in the three-month period ended December 31, 2021 as a result of continuous product innovation and development, including software enhancements.
Income tax expense
We accrue and pay the appropriate amount of income taxes according to the laws and regulations of each jurisdiction in which we operate. The majority of our revenue and profits are generated in the United States with a statutory income tax rate of approximately 21% in the three-month periods ended December 31, 2022 and 2021. For the three-month periods ended December 31, 2022 and 2021, we recorded total income tax expense of $18.4 million and $4.5 million, respectively, which reflected effective tax rates of 30.2% and 26.3%, respectively. These effective tax rates differ from the U.S. domestic statutory income tax rate of 21% primarily due to the U.S state and local income taxes coupled with the jurisdictional mix of income between the U.S. and other operating jurisdictions. We may in the future be subject to tax return audits and examinations by various taxing jurisdictions around the world, and there can be no assurance that the final determination of any tax examinations will not be materially different than that which is reflected in our income tax provisions and accruals. Should additional taxes be assessed as a result of a current or future examination, there could be a material adverse effect on our tax position, operating results, financial position and cash flows.
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Comparison of the nine-month periods ended December 31, 2022 and 2021
Revenue
Revenue increased by $366.0 million, or 36%, for the nine-month period ended December 31, 2022 compared to the nine-month period ended December 31, 2021. Approximately $250 million of the increase was the result of a 23% increase in gigawatts delivered as we delivered 13.2 GW for the nine-month period ended December 31, 2022, compared to 10.7 GW for the nine-month period ended December 31, 2021. The remaining increase was a result of an approximate 9% increase in our average selling price directly associated with higher freight and logistics costs included in our selling price compared to the prior year period. Revenue increased approximately $302.6 million, or 50%, in the U.S. and $63.3 million or 15% in the Rest of the World for the nine-month period ended December 31, 2022 compared to the nine-month period ended December 31, 2021. The growth from the Rest of the World was driven primarily from larger projects in Brazil.
Cost of sales and gross profit
Cost of sales increased by $277.4 million, or 30%, for the nine-month period ended December 31, 2022 compared to the nine-month period ended December 31, 2021 primarily due to the increase in sales noted above, and to a lesser extent, an increase in freight and logistics costs. Freight and logistics costs as a percentage of cost of sales increased by approximately 190 basis points for the nine-month period ended December 31, 2022 compared to the nine-month period ended December 31, 2021.
Gross profit increased by $88.6 million, or 82%, for the nine-month period ended December 31, 2022 compared to the nine-month period ended December 31, 2021 primarily resulting from the increase in sales noted above coupled with improved pricing on contracts allowing higher recovery of freight and logistics costs.
Selling, general and administrative expenses
Selling, general and administrative expenses increased $16.3 million, or 42%, to $55.5 million for the nine-month period ended December 31, 2022, from approximately $39.1 million in the nine-month period ended December 31, 2021, while remaining somewhat flat at approximately 4% as a percent of revenue in both periods. The increase in selling, general and administrative expenses was primarily the result of our continued expansion of our sales organization in line with the growth in the global market.
Research and development
Research and development expenses increased $2.7 million, or 25%, to $13.3 million for the nine-month period ended December 31, 2022 from approximately $10.6 million in the nine-month period ended December 31, 2021 as a result of continuous product innovation and development, including software enhancements.
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Income tax expense
We accrue and pay the appropriate amount of income taxes according to the laws and regulations of each jurisdiction in which we operate. The majority of our revenue and profits are generated in the United States with a statutory income tax rate of approximately 21% in the nine-month periods ended December 31, 2022 and 2021. For the nine-month periods ended December 31, 2022 and 2021, we recorded total income tax expense of $35.2 million and $12.8 million, respectively, which reflected effective tax rates of 27.3% and 22.2%, respectively. These effective tax rates differ from the U.S. domestic statutory income tax rate of 21% primarily due to the U.S state and local income taxes coupled with the jurisdictional mix of income between the U.S. and other operating jurisdictions. We may in the future be subject to tax return audits and examinations by various taxing jurisdictions around the world, and there can be no assurance that the final determination of any tax examinations will not be materially different than that which is reflected in our income tax provisions and accruals. Should additional taxes be assessed as a result of a current or future examination, there could be a material adverse effect on our tax position, operating results, financial position and cash flows.
LIQUIDITY AND CAPITAL RESOURCES
We have historically financed our operations primarily with cash provided by operations and net parent contributions. Our principal uses of cash have been to fund our operations and invest in research and development. Excess cash has historically been distributed pursuant to a centralized cash management program administered by Flex. For as long as Nextracker is a controlled entity of Flex, Nextracker’s U.S. operations will continue to participate in the Flex cash pooling management programs intra-quarter and all outstanding positions are settled or scheduled for settlement as of each quarter end. On February 13, 2023, we borrowed $150.0 million in term loan that we entered into in connection with the IPO. We used the proceeds of the term loan, together with cash on hand, to make a distribution of $175.0 million to Flex (through Yuma and Yuma Subsidiary, Inc., a Delaware corporation and wholly-owned subsidiary of Yuma (“Yuma Sub”)) and TPG Rise Flash, L.P. (“TPG Rise”), an affiliate of the private equity firm TPG, (the “Distribution”) on February 13, 2023, immediately prior to the closing of the IPO. The revolving credit facility, which is available in U.S. dollars and euros on a revolving basis until the maturity date, will be available to fund working capital, capital expenditures and other general corporate purposes. See “Credit Facilities” below.
Credit Facilities
In connection with the IPO, Nextracker Inc. and the LLC, as the borrower, entered into a senior credit facility with a syndicate of banks (the “2023 Credit Agreement”) comprised of (i) a term loan in the aggregate principal amount of $150.0 million (the “Term Loan”), and (ii) a revolving credit facility in an aggregate principal amount of $500.0 million (the “RCF”). The LLC borrowed the Term Loan, and used the proceeds to finance, in part, the Distribution.
The RCF is available in U.S. dollars, euros and such currencies as mutually agreed on a revolving basis during the five-year period through February 11, 2028 and is available to fund working capital and other general corporate purposes. A portion of the RCF not to exceed $300.0 million is available for the issuance of letters of credit. A portion of the RCF not to exceed $50.0 million is available for swing line loans. Subject to the satisfaction of certain conditions, the LLC will be permitted to incur incremental term loan facilities or increase the RCF commitment in an aggregate principal amount equal to $100.0 million plus an additional amount such that the secured net leverage ratio or total net leverage ratio, as applicable, is equal to or less than a specified threshold after giving pro forma effect to such incurrence.
The obligations of the LLC under the 2023 Credit Agreement and related loan documents are jointly and severally guaranteed by Nextracker Inc., certain other holding companies (collectively, the “Guarantors”) and, subject to certain exclusions, certain of the LLC’s existing and future direct and indirect wholly-owned domestic subsidiaries.
As of the closing of the 2023 Credit Agreement, all obligations of the LLC and the guarantors are secured by certain equity pledges by the LLC and the Guarantors. However, if the LLC’s total net leverage ratio exceeds a specified threshold, the collateral will include substantially all of the assets of the LLC and the Guarantors and, if the LLC meets certain investment grade conditions, such lien will be released.
The Term Loan requires quarterly principal payments beginning on June 30, 2024 in an amount equal to 0.625% of the original aggregate principal amount of the Term Loan. From June 30, 2025, the quarterly principal payment will increase to 1.25% of the original aggregate principal amount of the Term Loan. The remaining balance of the Term Loan and the outstanding balance of any RCF loans will be repayable on February 11, 2028. Borrowings under the 2023 Credit Agreement are prepayable and commitments subject to being reduced in each case at the LLC’s option without premium or penalty. The 2023 Credit Agreement contains certain mandatory prepayment provisions in the event that the LLC or its restricted subsidiaries incur certain types of indebtedness or, subject to certain reinvestment rights, receive net cash proceeds from certain asset sales or other dispositions of property.
Borrowings in U.S. dollars under the 2023 Credit Agreement bear interest at a rate based on either (a) a term secured overnight financing rate (“SOFR”)-based formula (including a credit spread adjustment of 10 basis points) plus a margin of 162.5 basis points to 200 basis points, depending on the LLC’s total net leverage ratio, or (b) a base rate formula plus a margin of 62.5 basis point to 100 basis points, depending on the LLC’s total net leverage ratio. Borrowings under the RCF in euros will bear interest based on the adjusted EURIBOR rate plus a margin of 162.5 basis points to 200 basis points, depending on the LLC’s total net leverage ratio. The LLC will also be required to pay a quarterly commitment fee on the undrawn portion of the RCF commitments of 20 basis points to 35 basis points, depending on the LLC’s total net leverage ratio. The interest rate for the Term Loan is 5.12% (SOFR rate of 3.49% plus a margin of 1.63%).
The 2023 Credit Agreement contains certain affirmative and negative covenants that, among other things and subject to certain exceptions, limit the ability of the LLC and its restricted subsidiaries to incur additional indebtedness or liens, to dispose of assets, change their fiscal year or lines of business, pay dividends and other restricted payments, make investments and other acquisitions, make optional payments of subordinated and junior lien debt, enter into transactions with affiliates and enter into restrictive agreements. In addition, the 2023 Credit Agreement requires the LLC to maintain a maximum consolidated total net leverage ratio.
Tax Receivable Agreement
In connection with the IPO, on February 13, 2023, Nextracker Inc. also entered into a Tax Receivable Agreement that provided for the payment by us to Yuma, Yuma Sub, TPG Rise, and the following affiliates of TPG Rise: TPG Rise Climate Flash Cl BDH, L.P., TPG Rise Climate BDH, L.P. and The Rise Fund II BDH, L.P. (or certain permitted transferees thereof) of 85% of the tax benefits, if any, that we are deemed to realize under certain circumstances, as more fully described in Note 4, “Subsequent events,” in the notes to the Nextracker Inc. unaudited condensed financial statement, and Note 10, “Subsequent events,” in the notes to the unaudited condensed combined financial statements included elsewhere in this Quarterly Report. There may be a material negative effect on our liquidity if, as a result of timing discrepancies or otherwise, the payments under the Tax Receivable Agreement exceed the actual benefits we realize in respect of the tax attributes subject to the Tax Receivable Agreement or distributions to us by the LLC are not sufficient to permit us to make payments under the Tax Receivable Agreement after we have paid taxes.
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We believe that our cash provided by operations and other existing and committed sources of liquidity, including our revolving credit facility, will provide adequate liquidity for ongoing operations, planned capital expenditures and other investments, potential debt service requirements and payments under the Tax Receivable Agreement for at least the next 12 months. We did not retain the proceeds of the IPO.
Cash Flows Analysis
Nine-month periods ended | ||||||||
(In thousands) | December 31, 2022 | December 31, 2021 | ||||||
(Unaudited) | ||||||||
Net cash provided by (used in) operating activities | $ | 72,382 | $ | (105,742 | ) | |||
Net cash used in investing activities | (2,629 | ) | (4,956 | ) | ||||
Net cash provided by (used in) financing activities | 1,258 | (14,872 | ) |
Nine-month period ended December 31, 2022
Net cash provided by operating activities was $72.4 million during the nine-month period ended December 31, 2022. Total cash provided during the period was driven by net income of $93.8 million adjusted for non-cash charges of approximately $3.6 million related to depreciation and amortization. Cash from net income was decreased by the overall increase in our net operating assets and liabilities, primarily our net working capital accounts, resulting in an outflow of approximately $25.0 million. Accounts receivable and contract assets in aggregate increased approximately $93.7 million during the nine-month period ended December 31, 2022, resulting from longer billing and collection periods. Inventory increased by $79.0 million and other assets increased by $24.0 million primarily due to advance payments to suppliers to secure product with longer lead times and expansion of supplier capacity in the United States, continued logistics constraints and increased operations. Offsetting the cash outflows were increases in deferred revenue of approximately $88.4 million, primarily resulting from upfront funding of new contracts, increases in account payable of approximately $44.5 million directly associated with the increased inventory level, and increases in other liabilities of approximately $30.9 million.
Net cash used in investing activities was approximately $2.6 million and directly attributable to the purchase of property and equipment.
Net cash provided by financing activities was $1.3 million resulting from net cash transfers from Flex primarily pursuant to the centralized cash management function performed by Flex.
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Nine-month period ended December 31, 2021
Net cash used in operating activities was $105.7 million during the nine-month period ended December 31, 2021. Net working capital and other was a net use of approximately $160.8 million. Cash used for inventory, accounts receivable and contract assets was approximately $234.9 million in the nine-month period ended December 31, 2021, as we funded increased operations and expansion of supplier capacity in the United States. Additionally, approximately $13.7 million in cash was used for other current and noncurrent assets during the nine-month period ended December 31, 2021, primarily due to increased advance payments made to suppliers for future procurement of inventory. This increase was offset by increased accounts payable of approximately $78.0 million directly associated with the increased inventory level, in addition to increased deferred revenue of approximately $19.2 million, primarily resulting from upfront funding of new contracts and timing of cash collections coupled with delays in projects as a result of logistics constraints. Further offsetting cash used for net working capital and other, net was net income of approximately $45.1 million adjusted for noncash charges of approximately $9.9 million related to depreciation and amortization.
Net cash used in investing activities was approximately $5.0 million and directly attributable to the purchase of property and equipment.
Net cash used in financing activities was $14.9 million resulting primarily from net cash transfers to Flex pursuant to the centralized cash management function performed by Flex.
Cash management and financing
We have historically participated in a centralized cash management program administered by Flex; disbursements are independently managed by us. The cash balance reflected in the combined balance sheets as of December 31, 2022 and March 31, 2022 and 2021 consist of the cash managed and controlled by us that is not part of the Flex centralized cash management pool. For as long as Nextracker is a controlled entity of Flex, Nextracker’s U.S. operations may continue to participate in the Flex cash pooling management programs intra-quarter, and all outstanding positions are settled or scheduled for settlement as of each quarter end. “Due to related parties” are balances resulting from transactions between us and Flex subsidiaries that have historically been cash settled and are treated as operating activities in the statement of cash flows. Flex intercompany balances resulting from transactions between us and Flex that have not been historically cash settled are reflected within net parent investment on the combined balance sheets as these are deemed to be internal financing transactions and accordingly are treated as financing activities in the statement of cash flows.
Contractual obligations and commitments
As discussed in the “Credit Facilities” section above, we borrowed $150.0 million under the term loan in February 2023. There have been no other material changes to our contractual obligations and commitments from those disclosed in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” set forth in the Prospectus.
Off-Balance sheet arrangements
We did not have any off-balance sheet arrangements as of December 31, 2022.
Critical accounting policies and significant management estimates
Our unaudited condensed combined financial statements and the related notes thereto included elsewhere in this Quarterly Report are prepared in accordance with GAAP. The preparation of condensed combined financial statements in conformity with GAAP requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues, costs, and expenses during the reporting period. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances. To the extent that there are differences between our estimates and actual results, our future financial statement presentation, financial condition, results of operations and cash flows will be affected.
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Our critical accounting policies and significant management estimates are described under the heading “Management’s discussion and analysis of financial condition and results of operations—Critical accounting policies and significant management estimates” in the Prospectus and the notes to the audited combined financial statements appearing elsewhere in the Prospectus. During the three- and nine months ended December 31, 2022, there were no material changes to our critical accounting policies and significant management estimates from those discussed in our Prospectus, except for the estimated additional product warranty reserve of $8.7 million as discussed in Note 2, “Summary of accounting policies–Product warranty,” in the notes to our unaudited condensed combined financial statements included elsewhere in this Quarterly Report.
Recently adopted accounting pronouncements
See Note 2 “Summary of accounting policies - Recently issued accounting pronouncement” in the notes to our unaudited condensed combined financial statements included elsewhere in this Quarterly Report for recently adopted accounting pronouncements.
ITEM 3. | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK |
We are exposed to market risk in the ordinary course of our business. Market risk represents the risk of loss that may impact our financial position due to adverse changes in financial market prices and rates. Our market risk exposure is primarily a result of fluctuations in commodity prices, such as steel and customer concentrations. We do not hold or issue financial instruments for trading purposes and had no outstanding indebtedness for borrowed money as of December 31, 2022. On February 13, 2023, we borrowed $150.0 million under the term loan. For more information, see note 10 “Subsequent events” in the notes to the unaudited condensed combined final statements in this Quarterly Report.
There were no material changes in our exposure to market risks for changes in interest and foreign currency exchange rates for the nine-month period ended December 31, 2022 as compared to the fiscal year ended March 31, 2022.
Concentration of major customers
Our customer base consists primarily of EPC, as well as solar project owners and developers. We do not require collateral on our trade receivables. The loss of any one of our top five customers could have a materially adverse effect on the revenue and profits of the Company.
The following table sets forth the revenue from our customers that exceeded 10% of our total revenue and the total revenue from our five largest customers by percentage of our total revenue during the periods included below:
Three-month periods ended | Nine-month periods ended | |||||||||||||||
December 31, 2022 | December 31, 2021 | December 31, 2022 | December 31, 2021 | |||||||||||||
Customer A* | 25.7 | % | 10.5 | % | 21.3 | % | 13.8 | % | ||||||||
Top five largest customers | 56.1 | % | 41.4 | % | 40.6 | % | 37.6 | % |
* | SOLV Energy |
Our trade accounts receivables and contract assets are from companies within the solar industry and, as such, we are exposed to normal industry credit risks. We periodically evaluate our reserves for potential credit losses and establish reserves for such losses.
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The following table sets forth the total accounts receivable, net of allowance for doubtful accounts and contract assets, from our largest customers that exceeded 10% of such total, and the total accounts receivable, net of allowance and contract assets, from our top five customers by percentage during the periods included below:
As of | ||||||||
December 31, 2022 | March 31, 2022 | |||||||
(Unaudited) | ||||||||
Customer A* | 16.3 | % | 10.3 | % | ||||
Customer E | — | 13.0 | % | |||||
Customer F | 10.0 | % | — | |||||
Top five largest customers | 42.5 | % | 45.5 | % |
* | SOLV Energy |
Commodity price risk
We are subject to risk from fluctuating market prices of certain commodity raw materials, such as steel, that are used in our products. Prices of these raw materials may be affected by supply restrictions or other market factors from time to time, and we do not enter into hedging arrangements to mitigate commodity risk. Significant price changes for these raw materials could reduce our operating margins if we are unable to recover such increases from our customers, and could harm our business, financial condition and results of operations.
In addition, we are subject to risk from fluctuating logistics costs. As a result of disruptions caused by COVID-19, consumer and commercial demand for shipped goods has increased across multiple industries, which in turn has reduced the availability and capacity of shipping containers and available ships worldwide. These disruption have caused, and may continue to cause, increased logistics costs and shipment delays affecting the timing of our project deliveries, the timing of our recognition of revenue and our profitability.
Foreign currency exchange risk
We transact business in various foreign countries and are, therefore, subject to risk of foreign currency exchange rate fluctuations. We have established a foreign currency risk management policy to manage this risk. We intend to manage our foreign currency exposure by evaluating and using non-financial techniques, such as currency of invoice, leading and lagging payments and receivables management.
Based on our overall currency rate exposures as of December 31, 2022 and March 31, 2022, including the derivative financial instruments intended to hedge the nonfunctional currency-denominated monetary assets, liabilities and cash flows, and other factors, a 10% appreciation or depreciation of the U.S. dollar from its cross-functional rates would not be expected, in the aggregate, to have a material effect on our financial position, results of operations and cash flows in the near-term.
ITEM 4. | CONTROLS AND PROCEDURES |
Evaluation of Disclosure Controls and Procedures
We maintain “disclosure controls and procedures,” as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), that are designed to ensure that information required to be disclosed by us in reports that we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in Securities and Exchange Commission rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and our Principal Financial Officer, to allow timely decisions regarding required disclosure. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that as of December 31, 2022, disclosure controls and procedures were effective as required by the Exchange Act. The design of any disclosure controls and procedures also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.
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Change in Internal Control Over Financial Reporting
There were no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during the quarter ended December 31, 2022 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
PART II. OTHER INFORMATION
ITEM 1. | LEGAL PROCEEDINGS |
In the ordinary course of conducting our business, we have in the past and may in the future become involved in various legal actions and other claims. We may also become involved in other judicial, regulatory and arbitration proceedings concerning matters arising in connection with the conduct of our businesses. Some of these matters may involve claims of substantial amounts. In addition, from time to time, third parties may assert intellectual property infringement claims against us in the form of letters and other forms of communication. These legal proceedings may be subject to many uncertainties and there can be no assurance of the outcome of any individual proceedings. We do not believe that these matters, and we are not a party to any other legal proceedings that we believe, if determined adversely to us, would have a material adverse effect on our business, financial condition or results of operations.
For more information, see note 7 “Commitments and contingencies” in the notes to the unaudited condensed combined final statements included elsewhere in this Quarterly Report.
ITEM 1A. | RISK FACTORS |
There have been no material changes to our risk factors that we believe are material to our business, results of operations and financial condition, from the risk factors previously disclosed in the section entitled “Risk factors” included in the Prospectus.
ITEM 2. | UNREGISTERED SALE OF EQUITY SECURITIES AND USE OF PROCEEDS |
Recent Sales of Unregistered Securities; Purchases of Equity Securities by the Issuer or Affiliated Purchaser
On December 19, 2022, we issued 100 shares of common stock, par value $0.001 per share, to Yuma in exchange for $0.10, which shares were repurchased from Yuma and cancelled upon the filing our amended and restated certificate of incorporation and the completion of the Transactions. The issuance was exempt from registration under Section 4(a)(2) of the Securities Act, as a transaction by an issuer not involving any public offering.
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Use of Proceeds
On February 13, 2023, the Company closed the IPO and issued 30,590,000 shares of its Class A common stock to the purchaser of the offering (including 3,990,000 shares of Class A common stock issued to the underwriters upon exercise in full of their option to purchase such additional shares), at a public offering price of $24.00 per share. The Company received net proceeds of $693.8 million, after deducting $40.4 million in underwriting discount, and before offering expenses. The estimated total expenses for the IPO were $8.3 million which were paid by Flex. The underwriters agreed to pay a portion of the expenses incurred in the IPO.
The Company used all of the net proceeds from the IPO as consideration for Yuma’s transfer to the Company of 30,590,000 LLC common units at a price per unit equal to $22.68, representing the initial public offering price per share of Class A common stock, less the underwriting discount. Yuma is an indirect, wholly-owned subsidiary of Flex Ltd. which owns through one or more subsidiaries 60.91% of the Company’s total outstanding shares of Class A common stock. J.P. Morgan Securities LLC, BofA Securities, Inc., Citigroup Global Markets Inc. and Barclays Capital Inc. acted as joint book-running managers in the IPO.
For additional details on the IPO, refer to the section “The Initial Public Offering” in Note 1, “Organization of Nextracker,” and to the section “The Transactions” in Note 10 “Subsequent events” in the notes to the unaudited condensed combined financial statements included elsewhere in this Quarterly Report.
Dividend Restrictions
Restrictions Relating to the 2023 Credit Agreement
The 2023 Credit Agreement includes covenants limiting our ability to pay dividends or make distributions on our capital stock if a default exists under the 2023 Credit Agreement or would be caused by giving effect to such dividend.
Restrictions Relating to the Separation Agreement
Pursuant to the Second Amended and Restated Separation Agreement by and among Flex, the Company, the LLC, and Flextronics International USA, Inc., the Company may not declare or pay any dividend on Nextracker securities without the prior written consent of Flex unless expressly authorized by the Company’s governing documents in effect as of February 1, 2022.
ITEM 3. | DEFAULTS UPON SENIOR SECURITIES |
None.
ITEM 4. | MINE SAFETY DISCLOSURES |
Not applicable.
ITEM 5. | OTHER INFORMATION |
None.
ITEM 6. | EXHIBITS |
Incorporated by reference | ||||||||||||
Exhibit Number | Description | Filed Herewith | Form | File No. | Exhibit | Filing Date | ||||||
3.1 | Amended and Restated Certificate of Incorporation of Nextracker Inc. | x | ||||||||||
3.2 | Restated Bylaws of Nextracker Inc. | x | ||||||||||
10.1 | Form of Third Amended and Restated Limited Liability Company Agreement of Nextracker LLC. | S-1/A | 333-269238 | 10.1 | February 1, 2023 | |||||||
10.2 | Form of Exchange Agreement. | S-1 | 333-269238 | 10.2 | January 13, 2023 | |||||||
10.3 | Form of Tax Receivable Agreement. | S-1/A | 333-269238 | 10.3 | January 24, 2023 | |||||||
10.4 | Form of Letter Agreement. | S-1/A | 333-269238 | 10.4 | January 24, 2023 |
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31.2 | Certification of Principal Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.4 | x | ||||||||||
32.1 | Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | x | ||||||||||
32.2* | Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | x | ||||||||||
101 | The following financial statements from Nextracker Inc.’s Quarterly Report on Form 10-Q for the nine months ended December 31, 2022, filed with the Securities and Exchange Commission on March 8 2023, formatted in iXBRL (Inline eXtensible Business Reporting Language): (i) the Unaudited condensed combined balance sheets, (ii) the Unaudited condensed combined statements of operations and comprehensive income (Loss), (iii) the Unaudited condensed combined statements of parent company equity (deficit) and redeemable preferred units, (iv) the Unaudited condensed combined statements of cash flows, and (v) the Notes to the Unaudited condensed Combined Financial Statements. | x | ||||||||||
104 | Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101). | x |
* | The certifications furnished in Exhibits 32.1 and 32.2 hereto are deemed to accompany this Form 10-Q and are not deemed “filed” for purposes of Section 18 of the Exchange Act, or otherwise subject to the liability of that section, nor shall they be deemed incorporated by reference into any filing under the Securities Act or the Exchange Act. |
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
Nextracker Inc. | ||||||
Date: March 8, 2023 | By: | /s/ David Bennett | ||||
David Bennett | ||||||
Chief Financial Officer | ||||||
(Principal Financial and Accounting Officer) |
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