- Added 20,400 customers in Q2, entering Q3 with backlog of
20,000 retrofit customers and 39,000 New Homes customers
- Increased GAAP Revenue 11% year-over-year
- Reported Q2 GAAP Net Loss of ($30) million, Adjusted EBITDA
of ($3) million
- Previously announced updated Guidance to reflect current
market conditions
- SunPower Financial™ to become ADT Solar's exclusive lease
and PPA provider
RICHMOND, Calif., Aug. 1, 2023
/PRNewswire/ -- SunPower Corp. (NASDAQ: SPWR), a leading
residential solar technology and energy services provider, today
announced financial results for the second quarter, ending
July 2, 2023.
"In the second quarter, we saw a softer market for residential
solar taking shape as higher interest rates create near-term stress
on the value proposition in regions with comparatively lower
utility rates such as the Southeast and Southwest. Nevertheless,
SunPower continues to outperform competitors in customer experience
as well as customer acquisition. We expect the value of solar will
continue to increase as equipment prices decline, tax credit
programs are implemented, and retail utility rates continue to
rise," said Peter Faricy, SunPower
CEO.
"We enter the third quarter focused on prioritizing efficiency
and operational excellence to drive profitability. Energy costs are
rising significantly faster than inflation for most households.
With energy affordability, grid reliability, and climate change
increasingly on the minds of consumers, SunPower remains
well-positioned to deliver solutions for clean energy independence
through solar, storage and home electrification."
SECOND QUARTER BUSINESS HIGHLIGHTS
World-class customer experience
- Highest-rated solar company: In the second quarter,
SunPower again held its position as the top rated solar company in
the U.S.1
- Setting the bar for installation experience: The company
also increased its Net Promoter Score (NPS) for customers one year
post-install to 51, one of the industry's highest scores. In their
reviews, customers cited the company's product quality and
installation experience.
Best, most affordable products
- SunVault® storage is now more powerful, more modular: In
the second quarter, SunPower made its most powerful SunVault energy
storage solution generally available. With a 19.5 kWh version and
configuration up to 39 kWh, SunVault now offers a nearly 50%
increase in energy storage capacity. For homeowners, this means
they can purchase a battery solution that can provide even more
savings and backup power.
Growth
- Increasing solar plus storage adoption: In the second
quarter, SunPower grew its SunVault energy storage attach rate 55%
year-over-year (YoY) in the retrofit category. The company more
than doubled its SunVault attach rate in California YoY, as
solar-powered batteries maximize savings following the NEM 3.0
implementation. In July, SunVault attach rates in California have been consistently above 60% in
the SunPower Direct channel.
- New Homes growth accelerating ahead of expectations:
SunPower's New Homes business secured a record $108 million in bookings in the second quarter,
11% growth YoY. Record sales were driven in part by the growth of
solar standard communities outside California and an improved market for
builders. In July, SunPower also completed its 100,000th New Homes
solar installation, more than any other solar company.
Digital innovation
- Helping customers save more with storage: SunPower
released an advanced cost-savings mode for SunVault users. It
provides seamless integration with the homeowner's local utility
and enables the battery to discharge at peak times. This mode
limits use of grid electricity during the costliest hours and
enables storage customers to increase their savings under complex
billing rates such as California NEM 3.0.
- Making it easier to sell and buy solar under NEM 3.0:
This quarter, SunPower upgraded functionality in its sales and
proposal tools to better capture the utility bill savings that can
be created with SunVault. By pairing new NEM 3.0 rates with a
battery's ability to maximize savings, customers can now easily
view expected bill savings and payback period.
- Simplifying VPP enrollment: SunPower released new
functionality that allows customers to enroll in available SunPower
Virtual Power Plants (VPPs) directly through their mySunPower® app,
making participation easy.
World-class financial solutions
- Growing financial services business: In July, SunPower
announced that ADT Solar, a division of ADT Inc. (NYSE: ADT), has
entered into an agreement in principle with SunPower Financial™ to
become the lease and PPA provider for ADT Solar customers. Through
this arrangement, ADT Solar expects to begin offering customers a
lease option for the first time this year.
- Lease expansion: SunPower launched lease products in
three new states: Texas,
Pennsylvania, and New Mexico. All have a significant population
of single-family homes eligible for the Energy Communities bonus
credit, as defined by the Department of Treasury under the
Inflation Reduction Act. In the second quarter, the company's lease
business grew 95% YoY.
Financial
Highlights
|
|
($ Millions, except
percentages, residential customers, and per-share
data)
|
2nd Quarter
2023
|
2nd Quarter
2022
|
GAAP revenue from
continuing operations
|
$463.9
|
$417.8
|
GAAP gross margin from
continuing operations
|
13.8 %
|
19.5 %
|
GAAP net (loss) income
from continuing operations
|
$(30.3)
|
$(42.5)
|
GAAP net (loss) income
from continuing operations per diluted share
|
$(0.17)
|
$(0.24)
|
Non-GAAP revenue from
continuing operations1, 4
|
$461.3
|
$425.0
|
Non-GAAP gross margin
from continuing operations1, 3, 4
|
13.7 %
|
21.2 %
|
Non-GAAP net (loss)
income from continuing operations1, 3, 4
|
$(23.5)
|
$1.7
|
Non-GAAP net (loss)
income from continuing operations per diluted share1, 3,
4
|
$(0.13)
|
$0.01
|
Adjusted EBITDA1,
3, 4
|
$(2.8)
|
$11.8
|
Residential
customers
|
551,700
|
463,600
|
Cash2
|
$114.1
|
$206.4
|
|
The sale of our C&I
Solutions business met the criteria for classification as
"discontinued operations" in accordance with U.S. GAAP beginning
the first quarter of fiscal 2022. For all periods presented, the
financial results of C&I Solutions are excluded in the table
above.
|
|
1
Information about SunPower's use of non-GAAP financial information,
including a reconciliation to U.S. GAAP, is provided under "Use of
Non-GAAP Financial Measures" below.
|
|
2 Includes
cash and cash equivalents, excluding restricted cash.
|
|
3 Beginning
in the second quarter of fiscal 2023, we are no longer excluding
non-GAAP adjustments related to "Transition Costs" from our
non-GAAP results, and have adjusted all comparative periods to
reflect the current presentation.
|
|
4 Beginning in the second quarter of
fiscal 2023, we are no longer excluding non-GAAP adjustments
related to "Results of operations of businesses exited/to be
exited" from our non-GAAP results, with the exception of certain
charges related to our legacy power plant and development projects
sold in fiscal 2018 and 2019. All comparative periods have been
adjusted to reflect the current presentation.
|
2023 Financial Outlook
On July, 26, 2023, SunPower
updated its FY 2023 guidance in a preliminary earnings announcement
to $1,450-$1,650 Adjusted EBITDA per customer before
platform investment and 70,000–90,000 incremental customers,
resulting in $55–$75 million Adjusted EBITDA for the
year.
Earnings Conference Call Information
SunPower will
discuss its second quarter 2023 financial results on Tuesday, August 1 at 8:00
a.m. Eastern Time. Analysts intending to participate in the
Q&A session must register for a personal link and dial-in at
https://register.vevent.com/register/BI48b45e1a95444ba288520060aea99e7c. The
live audio webcast and supplemental financial information will be
available on SunPower's investor website at
http://investors.sunpower.com/events.cfm.
About SunPower
SunPower (NASDAQ: SPWR) is a leading residential solar technology
and energy services provider in North
America. SunPower offers solar + storage solutions designed
and warranted by one company that give customers control over
electricity consumption and resiliency during power outages while
providing cost savings. For more information, visit
www.sunpower.com.
Forward-Looking Statements
This press release contains
forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995, including, but not
limited to, statements regarding: (a) expectations regarding demand
and our future performance based on backlog, bookings, projected
consumer demand, and pipelines in our sales channels and for our
products, and our ability to meet consumer demand; (b) our plans
and expectations with respect to our strategic partnerships and
initiatives, and the anticipated business and financial impacts
thereof; (c) our strategic plans and areas of investment and focus,
both current and future, and expectations for the results thereof,
including improved customer experience, lease and loan funding
capacity, increased installation capacity, and development of new
products and services; (d) our expectations regarding projected
demand and growth in 2023 and beyond, our positioning for future
success, and our ability to capture demand and deliver long-term
value to our shareholders; (e) our expectations for industry trends
and factors, and the impact thereof on our business and strategic
plans; (f) the availability and sufficiency of the supply of
products and raw materials to meet consumer demand; and (g) our
guidance for fiscal year 2023, including Net Loss, Adjusted EBITDA
per customer, incremental customers, and Adjusted EBITDA, as well
as platform investments and related assumptions.
These forward-looking statements are based on our current
assumptions, expectations, and beliefs and involve substantial
risks and uncertainties that may cause results, performance, or
achievement to materially differ from those expressed or implied by
these forward-looking statements. Factors that could cause or
contribute to such differences include, but are not limited to: (1)
regulatory changes and the availability of economic incentives
promoting use of solar energy; (2) potential disruptions to our
operations and supply chain that may result from epidemics or
natural disasters, and other factors; (3) competition in the solar
and general energy industry, supply chain constraints, interest
rates, inflation, and pricing pressures; (4) changes in public
policy, including the imposition and applicability of tariffs and
duties; (5) our dependence on sole- or limited-source supply
relationships, including for our solar panels and other components
of our products; (6) risks related to the introduction of new or
enhanced products, including potential technical challenges, lead
times, and our ability to match supply with demand while
maintaining quality, sales, and support standards; (7) the success
of our ongoing research and development efforts and our ability to
commercialize new products and services, including products and
services developed through strategic partnerships; (8) our
liquidity, indebtedness, and ability to obtain additional financing
for our projects and customers; (9) challenges managing our
acquisitions, joint ventures, and partnerships, including our
ability to successfully manage acquired assets and supplier
relationships; and (10) the timing and execution of restructuring
plans. A detailed discussion of these factors and other risks that
affect our business is included in filings we make with the
Securities and Exchange Commission (SEC) from time to time,
including our most recent reports on Form 10-K and Form 10-Q,
particularly under the heading "Risk Factors." Copies of these
filings are available online from the SEC or on the SEC Filings
section of our Investor Relations website at
investors.sunpower.com. All forward-looking statements in this
press release are based on information currently available to us,
and we assume no obligation to update these forward-looking
statements in light of new information or future events.
©2023 SunPower Corporation. All rights reserved. SUNPOWER, the
SUNPOWER logo, SUNPOWER FINANCIAL, MYSUNPOWER and SUNVAULT are
trademarks or registered trademarks of SunPower Corporation in the
U.S.
SUNPOWER CORPORATION
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
(In
thousands)
|
(Unaudited)
|
|
|
July 2,
2023
|
|
January 1,
2023
|
Assets
|
|
|
|
Current
assets:
|
|
|
|
Cash and cash
equivalents
|
$
114,104
|
|
$
377,026
|
Restricted cash and
cash equivalents, current portion
|
1,233
|
|
9,855
|
Short-term
investments
|
—
|
|
132,480
|
Accounts receivable,
net
|
214,378
|
|
174,577
|
Contract
assets
|
49,357
|
|
50,692
|
Loan receivables held
for sale, net
|
12,917
|
|
—
|
Inventories
|
424,040
|
|
316,815
|
Advances to suppliers,
current portion
|
1,895
|
|
9,309
|
Prepaid expenses and
other current assets
|
228,283
|
|
197,760
|
Total current
assets
|
1,046,207
|
|
1,268,514
|
|
|
|
|
Restricted cash and
cash equivalents, net of current portion
|
15,937
|
|
15,151
|
Property, plant and
equipment, net
|
95,715
|
|
74,522
|
Operating lease
right-of-use assets
|
35,219
|
|
36,926
|
Solar power systems
leased, net
|
39,767
|
|
41,779
|
Goodwill
|
126,338
|
|
126,338
|
Other intangible
assets, net
|
20,682
|
|
24,192
|
Other long-term
assets
|
193,912
|
|
192,585
|
Total assets
|
$
1,573,777
|
|
$
1,780,007
|
|
|
|
|
Liabilities and
Equity
|
|
|
|
Current
liabilities:
|
|
|
|
Accounts
payable
|
$
229,008
|
|
$
242,229
|
Accrued
liabilities
|
131,694
|
|
145,229
|
Operating lease
liabilities, current portion
|
11,501
|
|
11,356
|
Contract liabilities,
current portion
|
223,302
|
|
144,209
|
Short-term
debt
|
42,285
|
|
82,404
|
Convertible debt,
current portion
|
—
|
|
424,919
|
Total current
liabilities
|
637,790
|
|
1,050,346
|
|
|
|
|
Long-term
debt
|
305,709
|
|
308
|
Operating lease
liabilities, net of current portion
|
26,873
|
|
29,347
|
Contract liabilities,
net of current portion
|
11,024
|
|
11,555
|
Other long-term
liabilities
|
114,705
|
|
112,797
|
Total
liabilities
|
1,096,101
|
|
1,204,353
|
|
|
|
|
Equity:
|
|
|
|
Common
stock
|
175
|
|
174
|
Additional paid-in
capital
|
2,847,884
|
|
2,855,930
|
Accumulated
deficit
|
(2,149,927)
|
|
(2,066,175)
|
Accumulated other
comprehensive income
|
11,586
|
|
11,568
|
Treasury stock, at
cost
|
(232,940)
|
|
(226,646)
|
Total stockholders'
equity
|
476,778
|
|
574,851
|
Noncontrolling
interests in subsidiaries
|
898
|
|
803
|
Total
equity
|
477,676
|
|
575,654
|
Total liabilities and
equity
|
$
1,573,777
|
|
$
1,780,007
|
SUNPOWER CORPORATION
|
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
|
(In thousands,
except per share data)
|
(Unaudited)
|
|
|
|
THREE MONTHS
ENDED
|
|
SIX MONTHS
ENDED
|
|
|
July 2,
2023
|
|
July 3,
2022
|
|
July 2,
20231
|
|
July 3,
2022
|
Total
revenues
|
|
$
463,851
|
|
$
417,772
|
|
$
904,729
|
|
$
768,049
|
Total cost of
revenues
|
|
399,724
|
|
336,273
|
|
769,667
|
|
614,241
|
Gross profit
|
|
64,127
|
|
81,499
|
|
135,062
|
|
153,808
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
Research and
development
|
|
6,508
|
|
7,405
|
|
13,755
|
|
12,415
|
Sales, general, and
administrative
|
|
82,709
|
|
93,043
|
|
173,054
|
|
170,039
|
Restructuring charges
(credits)
|
|
—
|
|
(494)
|
|
—
|
|
133
|
Expense (income) from
transition services agreement, net
|
|
84
|
|
(494)
|
|
(140)
|
|
(228)
|
Total operating
expenses
|
|
89,301
|
|
99,460
|
|
186,669
|
|
182,359
|
Operating (loss)
income
|
|
(25,174)
|
|
(17,961)
|
|
(51,607)
|
|
(28,551)
|
Other (expense) income,
net:
|
|
|
|
|
|
|
|
|
Interest
income
|
|
329
|
|
92
|
|
1,160
|
|
134
|
Interest
expense
|
|
(5,786)
|
|
(5,964)
|
|
(11,464)
|
|
(11,008)
|
Other, net
|
|
289
|
|
(14,652)
|
|
(10,694)
|
|
(13,208)
|
Other (expense)
income, net
|
|
(5,168)
|
|
(20,524)
|
|
(20,998)
|
|
(24,082)
|
(Loss) income from
continuing operations before income taxes
and equity in earnings (losses) of unconsolidated
investees
|
|
(30,342)
|
|
(38,485)
|
|
(72,605)
|
|
(52,633)
|
(Provision for)
benefits from income taxes
|
|
(227)
|
|
(3,226)
|
|
(1,454)
|
|
8,417
|
Equity in earnings
(losses) of unconsolidated investees
|
|
311
|
|
—
|
|
558
|
|
—
|
Net (loss) income from
continuing operations
|
|
(30,258)
|
|
(41,711)
|
|
(73,501)
|
|
(44,216)
|
(Loss) income from
discontinued operations before income taxes
and equity in earnings (losses) of unconsolidated
investees
|
|
(2,796)
|
|
(20,857)
|
|
(10,156)
|
|
(47,155)
|
Benefits from
(provision for) income taxes from discontinued
operations
|
|
—
|
|
241
|
|
—
|
|
584
|
Net (loss) income from
discontinued operations, net of taxes
|
|
(2,796)
|
|
(20,616)
|
|
(10,156)
|
|
(46,571)
|
Net (loss)
income
|
|
(33,054)
|
|
(62,327)
|
|
(83,657)
|
|
(90,787)
|
Net (income) loss from
continuing operations attributable to noncontrolling
interests
|
|
(14)
|
|
(785)
|
|
(95)
|
|
(446)
|
Net loss (income) from
discontinued operations attributable to noncontrolling
interests
|
|
—
|
|
—
|
|
—
|
|
250
|
Net (income) loss
attributable to noncontrolling interests
|
|
(14)
|
|
(785)
|
|
(95)
|
|
(196)
|
Net (loss) income from
continuing operations attributable to stockholders
|
|
(30,272)
|
|
(42,496)
|
|
(73,596)
|
|
(44,662)
|
Net (loss) income from
discontinued operations attributable to stockholders
|
|
(2,796)
|
|
(20,616)
|
|
(10,156)
|
|
(46,321)
|
Net (loss) income
attributable to stockholders
|
|
$
(33,068)
|
|
$
(63,112)
|
|
$
(83,752)
|
|
$
(90,983)
|
|
|
|
|
|
|
|
|
|
Net (loss) income per
share attributable to stockholders - basic and diluted:
|
|
|
|
|
|
|
|
|
Continuing
operations
|
|
$
(0.17)
|
|
$
(0.24)
|
|
$
(0.42)
|
|
$
(0.26)
|
Discontinued
operations
|
|
$
(0.02)
|
|
$
(0.12)
|
|
$
(0.06)
|
|
$
(0.27)
|
Net (loss) income per
share – basic and diluted
|
|
$
(0.19)
|
|
$
(0.36)
|
|
$
(0.48)
|
|
$
(0.53)
|
|
|
|
|
|
|
|
|
|
Weighted-average
shares:
|
|
|
|
|
|
|
|
|
Basic
|
|
175,042
|
|
173,951
|
|
174,785
|
|
173,664
|
Diluted
|
|
175,042
|
|
173,951
|
|
174,785
|
|
173,664
|
|
1 For
the three months ended April 2, 2023, warranty claims of
$6.8 million, and legal expenses of $0.5 million,
previously included in the financial statement line items "total
cost of revenues" and "sales, general, and administrative expense",
respectively, should be included in the line item "net loss from
discontinued operations." Accordingly, the prior presentation for
the three months ended April 2, 2023 has been corrected in the six
months ended July 2, 2023. The correction has no effect on "net
income (loss) attributable to stockholders" or the condensed
consolidated statements of cash flows.
|
SUNPOWER CORPORATION
|
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
(In
thousands)
|
(Unaudited)
|
|
|
|
THREE MONTHS
ENDED
|
|
SIX MONTHS
ENDED
|
|
|
July 2,
2023
|
|
July 3,
2022
|
|
July 2,
2023
|
|
July 3,
2022
|
Cash flows from
operating activities:
|
|
|
|
|
|
|
|
|
Net (loss)
income
|
|
$
(33,054)
|
|
$
(62,327)
|
|
$
(83,657)
|
|
$
(90,787)
|
Adjustments to
reconcile net (loss) income to net cash used in operating
activities:
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
15,235
|
|
10,985
|
|
25,224
|
|
15,155
|
Amortization of cloud
computing arrangements
|
|
1,005
|
|
1,398
|
|
2,678
|
|
1,893
|
Stock-based
compensation
|
|
8,659
|
|
7,072
|
|
15,536
|
|
12,499
|
Non-cash interest
expense
|
|
546
|
|
833
|
|
1,163
|
|
1,559
|
Equity in (earnings)
losses of unconsolidated investees
|
|
(311)
|
|
—
|
|
(558)
|
|
—
|
Loss (gain) on equity
investments
|
|
—
|
|
15,255
|
|
10,805
|
|
13,940
|
Unrealized (gain) loss
on derivatives
|
|
(3,628)
|
|
—
|
|
(294)
|
|
—
|
Dividend from equity
method investee
|
|
225
|
|
—
|
|
596
|
|
—
|
Deferred income
taxes
|
|
283
|
|
2,554
|
|
(532)
|
|
(11,196)
|
Loss (gain) on loan
receivables held for sale
|
|
2,163
|
|
—
|
|
2,163
|
|
—
|
Other, net
|
|
484
|
|
104
|
|
575
|
|
949
|
Changes in operating
assets and liabilities:
|
|
|
|
|
|
|
|
|
Accounts
receivable
|
|
(20,635)
|
|
(25,585)
|
|
(40,380)
|
|
(37,939)
|
Contract
assets
|
|
9,253
|
|
13,852
|
|
1,335
|
|
7,333
|
Inventories
|
|
(42,193)
|
|
18,022
|
|
(107,225)
|
|
(17,059)
|
Project
assets
|
|
—
|
|
(2,597)
|
|
—
|
|
295
|
Loan receivables held
for sale
|
|
(15,081)
|
|
—
|
|
(15,081)
|
|
—
|
Prepaid expenses and
other assets
|
|
(12,642)
|
|
(83,296)
|
|
(24,841)
|
|
(169,798)
|
Operating lease
right-of-use assets
|
|
2,806
|
|
3,017
|
|
5,516
|
|
5,432
|
Advances to
suppliers
|
|
10,612
|
|
150
|
|
7,414
|
|
(2,072)
|
Accounts payable and
other accrued liabilities
|
|
1,344
|
|
5,074
|
|
(25,213)
|
|
46,518
|
Contract
liabilities
|
|
61,732
|
|
44,207
|
|
78,562
|
|
66,273
|
Operating lease
liabilities
|
|
(4,071)
|
|
(4,545)
|
|
(6,134)
|
|
(7,572)
|
Net cash (used in)
provided by operating activities
|
|
(17,268)
|
|
(55,827)
|
|
(152,348)
|
|
(164,577)
|
Cash flows from
investing activities:
|
|
|
|
|
|
|
|
|
Purchases of property,
plant and equipment
|
|
(14,340)
|
|
(12,947)
|
|
(26,283)
|
|
(21,583)
|
Investments in
software development costs
|
|
(1,429)
|
|
(1,204)
|
|
(2,320)
|
|
(2,725)
|
Cash paid for working
capital settlement related to C&I Solutions sale
|
|
(30,892)
|
|
—
|
|
(30,892)
|
|
—
|
Cash received from
C&I Solutions sale, net of de-consolidated cash
|
|
—
|
|
146,303
|
|
—
|
|
146,303
|
Cash paid for equity
investments under the Dealer Accelerator Program and
other
|
|
(7,500)
|
|
(9,420)
|
|
(7,500)
|
|
(16,420)
|
Proceeds from sale of
equity investment
|
|
—
|
|
—
|
|
121,675
|
|
149,830
|
Cash paid for
investments in unconsolidated investees
|
|
(6,223)
|
|
(3,164)
|
|
(7,677)
|
|
(3,318)
|
Dividend from equity
method investee, in excess of cumulative earnings
|
|
—
|
|
—
|
|
149
|
|
—
|
Net cash (used in)
provided by investing activities
|
|
(60,384)
|
|
119,568
|
|
47,152
|
|
252,087
|
Cash flows from
financing activities:
|
|
|
|
|
|
|
|
|
Proceeds from bank
loans and other debt
|
|
193,337
|
|
78,818
|
|
439,101
|
|
100,276
|
Repayment of bank
loans and other debt
|
|
(123,427)
|
|
(74,100)
|
|
(171,573)
|
|
(98,044)
|
Repayment of
convertible debt
|
|
—
|
|
—
|
|
(424,991)
|
|
—
|
Payments for financing
leases
|
|
(1,031)
|
|
(118)
|
|
(1,806)
|
|
(118)
|
Purchases of stock for
tax withholding obligations on vested restricted stock
|
|
(1,223)
|
|
(2,256)
|
|
(6,293)
|
|
(9,588)
|
Net cash provided by
(used in) financing activities
|
|
67,656
|
|
2,344
|
|
(165,562)
|
|
(7,474)
|
Net (decrease) increase
in cash, cash equivalents, and restricted cash
|
|
(9,996)
|
|
66,085
|
|
(270,758)
|
|
80,036
|
Cash, cash equivalents
and restricted cash, beginning of period
|
|
141,270
|
|
162,564
|
|
402,032
|
|
148,613
|
Cash, cash equivalents,
and restricted cash, end of period
|
|
$
131,274
|
|
$
228,649
|
|
$
131,274
|
|
$
228,649
|
|
|
|
|
|
|
|
|
|
Reconciliation of
cash, cash equivalents, and restricted cash to the
condensed consolidated balance sheets, including discontinued
operations:
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
114,104
|
|
$
206,355
|
|
$
114,104
|
|
$
206,355
|
Restricted cash and
cash equivalents, current portion
|
|
1,233
|
|
1,024
|
|
1,233
|
|
1,024
|
Restricted cash and
cash equivalents, net of current portion
|
|
15,937
|
|
21,270
|
|
15,937
|
|
21,270
|
Total cash, cash
equivalents, and restricted cash
|
|
$
131,274
|
|
$
228,649
|
|
$
131,274
|
|
$
228,649
|
|
|
|
|
|
|
|
|
|
Supplemental
disclosure of non-cash activities:
|
|
|
|
|
|
|
|
|
Property, plant and
equipment acquisitions funded by liabilities (including financing
leases)
|
|
$
5,212
|
|
$
3,713
|
|
$
8,717
|
|
$
4,635
|
Right-of-use assets
obtained in exchange of lease obligations
|
|
1,723
|
|
649
|
|
3,809
|
|
1,526
|
Net working capital
settlement related to C&I Solutions sale
|
|
—
|
|
6,265
|
|
—
|
|
6,265
|
Supplemental cash
flow disclosures:
|
|
|
|
|
|
|
|
|
Cash paid for
interest
|
|
6,035
|
|
1,312
|
|
18,004
|
|
11,186
|
Cash paid for income
taxes
|
|
1,052
|
|
2,250
|
|
1,236
|
|
2,500
|
Use of Non-GAAP Financial Measures
To supplement its consolidated financial results presented in
accordance with United States Generally Accepted Accounting
Principles ("GAAP"), the company uses non-GAAP measures that are
adjusted for certain items from the most directly comparable GAAP
measures. The specific non-GAAP measures listed below are: revenue;
gross margin; net (loss) income; net (loss) income per diluted
share; and adjusted earnings before interest, taxes, depreciation
and amortization ("Adjusted EBITDA"). Management believes that each
of these non-GAAP measures are useful to investors, enabling them
to better assess changes in each of these key elements of the
company's results of operations across different reporting periods
on a consistent basis, independent of certain items as described
below. Thus, each of these non-GAAP financial measures provide
investors with another method to assess the company's operating
results in a manner that is focused on its ongoing, core operating
performance, absent the effects of these items. Management uses
these non-GAAP measures internally to assess the business, its
financial performance, current and historical results, as well as
for strategic decision-making and forecasting future results. Many
of the analysts covering the company also use these non-GAAP
measures in their analysis. Given management's use of these
non-GAAP measures, the company believes these measures are
important to investors in understanding the company's operating
results as seen through the eyes of management. These non-GAAP
measures are not prepared in accordance with GAAP or intended to be
a replacement for GAAP financial data; and therefore, should be
reviewed together with the GAAP measures and are not intended to
serve as a substitute for results under GAAP, and may be different
from non-GAAP measures used by other companies.
We exclude the following adjustments from our non-GAAP financial
measures:
Non-GAAP Adjustments Based on International Financial
Reporting Standards ("IFRS")
The company's non-GAAP results include adjustments under IFRS
that are consistent with the adjustments made in connection with
the company's internal reporting process as part of its status as a
subsidiary and equity method investee of TotalEnergies SE, a
foreign public registrant that reports under IFRS. Differences
between GAAP and IFRS reflected in the company's non-GAAP results
are further described below. In these situations, management
believes that IFRS enables investors to better evaluate the
company's performance, and assists in aligning the perspectives of
the management with those of TotalEnergies SE.
- Mark-to-market loss (gain) in equity investments: We recognize
adjustments related to the fair value of equity investments with
readily determinable fair value based on the changes in the stock
price of these equity investments at every reporting period. Under
U.S. GAAP, mark-to-market gains and losses due to changes in stock
prices for these securities are recorded in earnings while under
IFRS, an election can be made to recognize such gains and losses in
other comprehensive income. Such an election was made by
TotalEnergies SE. Further, we elected the Fair Value Option ("FVO")
for some of our equity method investments, and we adjust the
carrying value of those investments based on their fair market
value calculated periodically. Such option is not available under
IFRS, and equity method accounting is required for those
investments. We believe that excluding these adjustments on equity
investments is consistent with our internal reporting process as
part of its status as a subsidiary and equity method investee of
TotalEnergies SE and better reflects our ongoing results.
Other Non-GAAP Adjustments
- Legacy power plant and development projects: We exclude from
our Non-GAAP results adjustments to variable consideration
resulting from the true-up of estimated milestone payments for two
legacy power plant projects sold in fiscal 2018 and 2019. We
believe that it is appropriate to exclude such charges from our
non-GAAP results as they are not reflective of ongoing operating
results.
- Loss/Gain on sale and impairment of residential lease assets:
In fiscal 2018 and 2019, in an effort to sell all the residential
lease assets owned by us, we sold membership units representing a
49% membership interest in majority of our residential lease
business and retained a 51% membership interest. We recorded
impairment charges based on the expected fair value for a portion
of residential lease assets portfolio that was retained.
Depreciation savings from the unsold residential lease assets
resulting from their exclusion from non-GAAP results historically,
are excluded from our non-GAAP results as they are not reflective
of ongoing operating results.
- Stock-based compensation: Stock-based compensation relates
primarily to our equity incentive awards. Stock-based compensation
is a non-cash expense that is dependent on market forces that are
difficult to predict. We believe that this adjustment for
stock-based compensation provides investors with a basis to measure
the company's core performance, including compared with the
performance of other companies, without the period-to-period
variability created by stock-based compensation.
- Litigation: We may be involved in various instances of
litigation, claims and proceedings that result in payments or
recoveries. We exclude gains or losses associated with such events
because the gains or losses do not reflect our underlying financial
results in the period incurred. We also exclude expenses pertaining
to litigation relating to businesses that discontinued as a result
of spin-off of Maxeon Solar, for which we are indemnifying them. We
believe that it is appropriate to exclude such charges from our
non-GAAP results as they are not reflective of ongoing operating
results.
- Transaction-related costs: In connection with material
transactions such as acquisition or divestiture of a business, the
company incurred transaction costs including legal and accounting
fees. We believe that it is appropriate to exclude these costs from
our non-GAAP results as they would not have otherwise been incurred
as part of the business operations and therefore is not reflective
of ongoing operating results.
- Amortization of intangible assets and software: We incur
amortization of intangible assets as a result of acquisitions,
primarily from the Blue Raven acquisition, which includes brand,
non-compete arrangements, and purchased technology. In addition, we
also incur amortization of our capitalized internal-use software
costs once the software has been placed into service, until the end
of the useful life of the software. We believe that it is
appropriate to exclude these amortization charges from our non-GAAP
results as they are non-recurring in nature, and are therefore not
reflective of ongoing operating results.
- Acquisition-related costs: We incurred certain costs in
connection with the acquisition of Blue Raven, that are either paid
as part of the transaction or will be paid in the coming year, but
are considered post-acquisition compensation under the applicable
GAAP framework due to the nature of such items. For fiscal 2022,
other post-combination expenses include change in fair value of
contingent consideration as well as deferred post-combination
employment expense payable to certain Blue Raven employees and
sellers. We believe that it is appropriate to exclude these from
our non-GAAP results as they are directly related to the
acquisition transaction and non-recurring in nature, and are
therefore not reflective of ongoing operating results.
- Business reorganization costs: In connection with the spin-off
of Maxeon into an independent, publicly traded company, we incurred
non-recurring charges on third-party legal and consulting expenses,
primarily to enable in separation of shared information technology
systems and applications. In addition, we incurred certain
non-recurring costs upon amendment, settlement or termination of
historical agreements with Maxeon to fully enable separate
independent operations of the two companies that is focused on our
respective core business. We believe that it is appropriate to
exclude these from our non-GAAP results as it is not reflective of
ongoing operating results.
- Restructuring charges (credits): We incur restructuring
expenses related to reorganization plans aimed towards realigning
resources consistent with the company's global strategy and
improving its overall operating efficiency and cost structure.
Although the company has engaged in restructuring activities in the
past, each has been a discrete event based on a unique set of
business objectives. We believe that it is appropriate to exclude
these from our non-GAAP results as it is not reflective of ongoing
operating results.
- Equity (income) loss from unconsolidated investees: We account
for our minority investments in dealers included in the Dealer
Accelerator Program using the equity method of accounting and
recognize our proportionate share of the reported earnings or
losses of the investees through net income. We do not control or
manage the investees' business operations and operating and
financial policies. Therefore, we believe that it is appropriate to
exclude these from our non-GAAP results as it is not reflective of
ongoing operating results.
- Mark-to-market loss (gain) on interest rate swaps: We recognize
changes in fair value of our interest rate swaps as mark-to-market
gains or losses, excluding final settlements, and record within
"interest expense" and "total revenues" within our condensed
consolidated statements of operations dependent on the risk that is
being economically hedged and mitigated by the interest rate swap.
Such fair value changes are not necessarily indicative of the
actual settlement value of the underlying interest rate swap, thus,
we believe that excluding these adjustments from our non-GAAP
results is appropriate and allows investors to better understand
and analyze our ongoing operating results.
- Tax effect: This amount is used to present each of the
adjustments described above on an after-tax basis in connection
with the presentation of non-GAAP net income (loss) and non-GAAP
net income (loss) per diluted share. Our non-GAAP tax amount is
based on estimated cash tax expense and reserves. We forecast our
annual cash tax liability and allocates the tax to each quarter in
a manner generally consistent with its GAAP methodology. This
approach is designed to enhance investors' ability to understand
the impact of our tax expense on its current operations, provide
improved modeling accuracy, and substantially reduce fluctuations
caused by GAAP to non-GAAP adjustments, which may not reflect
actual cash tax expense, or tax impact of non-recurring items.
- Adjusted EBITDA adjustments: When calculating Adjusted EBITDA,
in addition to adjustments described above, we exclude the impact
of the following items during the period:
- Cash interest expense, net of interest income
- Provision for income taxes
- Depreciation
For more information about these non-GAAP financial measures,
please see the tables captioned "Reconciliations of GAAP Measures
to Non-GAAP Measures" set forth at the end of this release, which
should be read together with the preceding financial statements
prepared in accordance with GAAP.
SUNPOWER CORPORATION
|
RECONCILIATIONS OF GAAP MEASURES TO NON-GAAP
MEASURES
|
(In thousands,
except percentages and per share data)
|
(Unaudited)
|
|
Adjustments to
Revenue:
|
|
|
|
THREE MONTHS
ENDED
|
|
SIX MONTHS
ENDED
|
|
|
July 2,
2023
|
|
July 3,
2022
|
|
July 2,
2023
|
|
July 3,
2022
|
GAAP revenue
|
|
$
463,851
|
|
$
417,772
|
|
$
904,729
|
|
$
768,049
|
Other
adjustments:
|
|
|
|
|
|
|
|
|
Legacy power plant and
development projects1
|
|
—
|
|
7,239
|
|
—
|
|
7,239
|
Mark-to-market (gain)
loss on interest rate swaps
|
|
(2,505)
|
|
—
|
|
(80)
|
|
—
|
Non-GAAP
revenue
|
|
$
461,346
|
|
$
425,011
|
|
$
904,649
|
|
$
775,288
|
|
1 Beginning
in the second quarter of fiscal 2023, we are no longer excluding
non-GAAP adjustments related to "Results of operations of
businesses exited/to be exited" from our non-GAAP results, with the
exception of certain charges related to our legacy power plant and
development projects sold in fiscal 2018 and 2019. All comparative
periods have been adjusted to reflect the current
presentation.
|
Adjustments to Gross
Profit Margin:
|
|
|
|
THREE MONTHS
ENDED
|
|
SIX MONTHS
ENDED
|
|
|
July 2,
2023
|
|
July 3,
2022
|
|
July 2,
2023
|
|
July 3,
2022
|
GAAP gross profit from
continuing operations
|
|
$
64,127
|
|
$
81,499
|
|
$ 135,062
|
|
$ 153,808
|
Other
adjustments:
|
|
|
|
|
|
|
|
|
Legacy power plant and
development projects1
|
|
—
|
|
7,239
|
|
—
|
|
7,239
|
(Gain) loss on sale
and impairment of residential lease assets
|
|
(267)
|
|
(278)
|
|
(534)
|
|
(557)
|
Stock-based
compensation expense
|
|
1,904
|
|
1,398
|
|
3,142
|
|
2,297
|
Business
reorganization costs
|
|
—
|
|
11
|
|
—
|
|
11
|
Transaction-related
costs
|
|
—
|
|
56
|
|
—
|
|
56
|
Mark-to-market (gain)
loss on interest rate swaps
|
|
(2,505)
|
|
—
|
|
(80)
|
|
—
|
Litigation
|
|
62
|
|
—
|
|
62
|
|
—
|
Non-GAAP gross
profit2
|
|
$
63,321
|
|
$
89,925
|
|
$ 137,652
|
|
$ 162,854
|
|
|
|
|
|
|
|
|
|
GAAP gross margin
(%)
|
|
13.8 %
|
|
19.5 %
|
|
14.9 %
|
|
20.0 %
|
Non-GAAP gross margin
(%)
|
|
13.7 %
|
|
21.2 %
|
|
15.2 %
|
|
21.0 %
|
|
1 Beginning in the second quarter of
fiscal 2023, we are no longer excluding non-GAAP adjustments
related to "Results of operations of businesses exited/to be
exited" from our non-GAAP results, with the exception of certain
charges related to our legacy power plant and development projects
sold in fiscal 2018 and 2019. All comparative periods have been
adjusted to reflect the current presentation.
|
2 Beginning
in the second quarter of fiscal 2023, we are no longer excluding
non-GAAP adjustments related to "Transition Costs" from our
non-GAAP results, and have adjusted all comparative periods to
reflect the current presentation.
|
Adjustments to Net
(Loss) Income:
|
|
|
|
THREE MONTHS
ENDED
|
|
SIX MONTHS
ENDED
|
|
|
July 2,
2023
|
|
July 3,
2022
|
|
July 2,
2023
|
|
July 3,
2022
|
GAAP net (loss) income
from continuing operations attributable to stockholders
|
|
$
(30,272)
|
|
$
(42,496)
|
|
$
(73,596)
|
|
$
(44,662)
|
Adjustments based on
IFRS:
|
|
|
|
|
|
|
|
|
Mark-to-market loss
(gain) on equity investments
|
|
—
|
|
15,255
|
|
10,805
|
|
13,940
|
Other
adjustments:
|
|
|
|
|
|
|
|
|
Legacy power plant and
development projects1
|
|
—
|
|
7,239
|
|
—
|
|
7,239
|
(Gain) loss on sale
and impairment of residential lease assets
|
|
(267)
|
|
(278)
|
|
(534)
|
|
(557)
|
Litigation
|
|
(413)
|
|
3,166
|
|
157
|
|
3,343
|
Stock-based
compensation expense
|
|
8,659
|
|
7,054
|
|
15,503
|
|
12,383
|
Amortization of
intangible assets and software
|
|
2,796
|
|
2,786
|
|
5,582
|
|
4,764
|
Transaction-related
costs
|
|
122
|
|
259
|
|
766
|
|
1,223
|
Business
reorganization costs
|
|
—
|
|
4,521
|
|
—
|
|
4,521
|
Restructuring charges
(credits)
|
|
—
|
|
(639)
|
|
—
|
|
(453)
|
Acquisition-related
costs
|
|
(200)
|
|
2,310
|
|
(197)
|
|
8,118
|
Equity (income) loss
from unconsolidated investees
|
|
(311)
|
|
—
|
|
(558)
|
|
—
|
Mark-to-market (gain)
loss on interest rate swaps
|
|
(3,628)
|
|
—
|
|
(294)
|
|
—
|
Tax effect
|
|
29
|
|
2,531
|
|
851
|
|
(9,655)
|
Non-GAAP net (loss)
income from continuing operations attributable to
stockholders2
|
|
$
(23,485)
|
|
$
1,708
|
|
$
(41,515)
|
|
$
204
|
|
1 Beginning
in the second quarter of fiscal 2023, we are no longer excluding
non-GAAP adjustments related to "Results of operations of
businesses exited/to be exited" from our non-GAAP results, with the
exception of certain charges related to our legacy power plant and
development projects sold in fiscal 2018 and 2019. All comparative
periods have been adjusted to reflect the current
presentation.
|
2 Beginning
in the second quarter of fiscal 2023, we are no longer excluding
non-GAAP adjustments related to "Transition Costs" from our
non-GAAP results, and have adjusted all comparative periods to
reflect the current presentation.
|
Adjustments to Net
(Loss) Income per diluted share:
|
|
|
|
THREE MONTHS
ENDED
|
|
SIX MONTHS
ENDED
|
|
|
July 2,
2023
|
|
July 3,
2022
|
|
July 2,
2023
|
|
July 3,
2022
|
Net (loss) income per
diluted share
|
|
|
|
|
|
|
|
|
Numerator:
|
|
|
|
|
|
|
|
|
GAAP net (loss) income
from continuing operations attributable to
stockholders1
|
|
$
(30,272)
|
|
$
(42,496)
|
|
$
(73,596)
|
|
$
(44,662)
|
GAAP net (loss) income
from continuing operations attributable to
stockholders1
|
|
$
(30,272)
|
|
$
(42,496)
|
|
$
(73,596)
|
|
$
(44,662)
|
|
|
|
|
|
|
|
|
|
Non-GAAP net (loss)
income from continuing operations attributable to
stockholders1, 2, 3
|
|
$
(23,485)
|
|
$
1,708
|
|
$
(41,515)
|
|
$
204
|
|
|
|
|
|
|
|
|
|
Denominator:
|
|
|
|
|
|
|
|
|
GAAP weighted-average
shares
|
|
175,042
|
|
173,951
|
|
174,785
|
|
173,664
|
GAAP dilutive
weighted-average common shares:
|
|
175,042
|
|
173,951
|
|
174,785
|
|
173,664
|
|
|
|
|
|
|
|
|
|
Non-GAAP
weighted-average shares
|
|
175,042
|
|
173,951
|
|
174,785
|
|
173,664
|
Effect of dilutive
securities:
|
|
|
|
|
|
|
|
|
Restricted stock
units
|
|
—
|
|
770
|
|
—
|
|
790
|
Non-GAAP dilutive
weighted-average common shares1
|
|
175,042
|
|
174,721
|
|
174,785
|
|
174,454
|
|
|
|
|
|
|
|
|
|
GAAP dilutive net
(loss) income per share - continuing operations
|
|
$
(0.17)
|
|
$
(0.24)
|
|
$
(0.42)
|
|
$
(0.26)
|
Non-GAAP dilutive net
(loss) income per share - continuing operations2,
3
|
|
$
(0.13)
|
|
$
0.01
|
|
$
(0.24)
|
|
$
—
|
|
1 In
accordance with the if-converted method, net (loss) income
available to common stockholders excludes interest expense related
to the 4.00% debentures if the debentures are considered converted
in the calculation of net (loss) income per diluted share. If the
conversion option for a debenture is not in the money for the
relevant period, the potential conversion of the debenture under
the if-converted method is excluded from the calculation of
non-GAAP net income (loss) per diluted share.
|
2 Beginning in the second quarter of
fiscal 2023, we are no longer excluding non-GAAP adjustments
related to "Results of operations of businesses exited/to be
exited" from our non-GAAP results, with the exception of certain
charges related to our legacy power plant and development projects
sold in fiscal 2018 and 2019. All comparative periods have been
adjusted to reflect the current presentation.
|
3 Beginning
in the second quarter of fiscal 2023, we are no longer excluding
non-GAAP adjustments related to "Transition Costs" from our
non-GAAP results, and have adjusted all comparative periods to
reflect the current presentation.
|
Adjusted
EBITDA:
|
|
|
THREE MONTHS
ENDED
|
|
SIX MONTHS
ENDED
|
|
|
July 2,
2023
|
|
July 3,
2022
|
|
July 2,
2023
|
|
July 3,
2022
|
GAAP net (loss) income
from continuing operations attributable to stockholders
|
|
$
(30,272)
|
|
$
(42,496)
|
|
$
(73,596)
|
|
$
(44,662)
|
Adjustments based on
IFRS:
|
|
|
|
|
|
|
|
|
Mark-to-market loss
(gain) on equity investments
|
|
—
|
|
15,255
|
|
10,805
|
|
13,940
|
Other
adjustments:
|
|
|
|
|
|
|
|
|
Legacy power plant and
development projects1
|
|
—
|
|
7,239
|
|
—
|
|
7,239
|
(Gain) loss on sale
and impairment of residential lease assets
|
|
(267)
|
|
(278)
|
|
(534)
|
|
(557)
|
Litigation
|
|
(413)
|
|
3,166
|
|
157
|
|
3,343
|
Stock-based
compensation expense
|
|
8,659
|
|
7,054
|
|
15,503
|
|
12,383
|
Amortization of
intangible assets and software
|
|
2,796
|
|
2,786
|
|
5,582
|
|
4,764
|
Transaction-related
costs
|
|
122
|
|
259
|
|
766
|
|
1,223
|
Business
reorganization costs
|
|
—
|
|
4,521
|
|
—
|
|
4,521
|
Restructuring charges
(credits)
|
|
—
|
|
(639)
|
|
—
|
|
(453)
|
Acquisition-related
costs
|
|
(200)
|
|
2,310
|
|
(197)
|
|
8,118
|
Equity (income) loss
from unconsolidated investees
|
|
(311)
|
|
—
|
|
(558)
|
|
—
|
Mark-to-market (gain)
loss on interest rate swaps
|
|
(3,628)
|
|
—
|
|
(294)
|
|
—
|
Cash interest expense,
net of interest income
|
|
6,581
|
|
5,835
|
|
10,518
|
|
10,716
|
Provision for (benefit
from) income taxes
|
|
227
|
|
3,226
|
|
1,455
|
|
(8,450)
|
Depreciation
|
|
13,913
|
|
3,571
|
|
22,590
|
|
6,444
|
Adjusted
EBITDA2
|
|
$
(2,793)
|
|
$
11,809
|
|
$
(7,803)
|
|
$
18,569
|
|
1 Beginning
in the second quarter of fiscal 2023, we are no longer excluding
non-GAAP adjustments related to "Results of operations of
businesses exited/to be exited" from our non-GAAP results, with the
exception of certain charges related to our legacy power plant and
development projects sold in fiscal 2018 and 2019. All comparative
periods have been adjusted to reflect the current
presentation.
|
2 Beginning
in the second quarter of fiscal 2023, we are no longer excluding
non-GAAP adjustments related to "Transition Costs" from our
non-GAAP results, and have adjusted all comparative periods to
reflect the current presentation.
|
FY 2023
GUIDANCE
|
|
|
FY
2023
|
Net Loss
(GAAP)
|
($90) million - ($70)
million
|
Residential
Customers
|
70,000 -
90,000
|
Residential Adjusted
EBITDA/Customer1
|
$1,450 -
$1,650
|
Adjusted
EBITDA2
|
$55 million - $75
million
|
|
1 Excluding
Platform Investment, which is primarily Product, Digital, and
Corporate Operating Expense.
|
2 Adjusted
EBITDA guidance for FY 2023 includes net adjustments that
decrease GAAP net loss by approximately $145 million primarily
relating to the following adjustments: stock-based compensation
expense of $34 million, restructuring charges of $5 million,
mark-to-market (gain) loss on equity investments, net of $11
million, amortization of intangible assets and software of $11
million, interest expense of $25 million, depreciation of $49
million, income taxes of $3 million, and other non-recurring
adjustments of $7 million.
|
View original content to download
multimedia:https://www.prnewswire.com/news-releases/sunpower-reports-second-quarter-2023-results-301890111.html
SOURCE SunPower Corp.