- Added 21,000 customers in Q1, 27% growth year-over-year;
enters Q2 with backlog of 23,000 retrofit customers
- Increased Revenue 26% and 32% year-over-year on a GAAP
and non-GAAP basis, respectively
- Reported Q1 GAAP Net Loss of $51M, Adjusted EBITDA of $1M
- Invested in Wolf River Energy, accelerating coverage in
Midwest
- Secured new capital to fund $1B of solar loans
RICHMOND, Calif., May 3, 2023
/PRNewswire/ -- SunPower Corp. (NASDAQ:SPWR), a leading solar
technology and energy services provider, today announced financial
results for the first quarter, ending April
2, 2023.
"We exited the first quarter with high customer growth,
significant new financing commitments, and unprecedented retrofit
backlog driven by our efforts securing customers under NEM
2.0. This progress, despite challenging weather in
California, validates the strength
of the residential solar market and SunPower's ability to capture
growing demand," said Peter Faricy,
SunPower CEO. "As retail electricity rates continue to rise and
consumers urgently seek a more affordable and reliable source of
energy, the solar value proposition remains strong."
FIRST QUARTER BUSINESS HIGHLIGHTS
World-class customer experience
- Highest rated solar company: In the first quarter,
SunPower again held its position as the number one rated solar
company in the U.S.1
Best, most affordable products
- Launched unique VPP offering in California: In April, SunPower and
OhmConnect announced a new virtual power plant (VPP) offering.
Eligible California homeowners
with solar and SunVault® battery storage can connect with
OhmConnect through the mySunPower® app to automatically dispatch
excess stored energy at key times. Participants can earn rewards
while they help stabilize the grid, all while reserving a set
amount of energy to meet their home's energy needs.
- Continued to diversify panel supply: With three new
agreements in place, SunPower has secured panel supply to fully
address its anticipated 2023 demand and beyond.
Growth
- Historic growth in SunPower Direct: The company grew
SunPower Direct bookings by 97% year-over-year and doubled channel
revenue quarter-over-quarter.
- Invested in high-growth Midwest dealer: In April,
SunPower finalized an investment in Minnesota-based Wolf River Electric through
its Dealer Accelerator Program. Wolf
River, the company's newest and now third-largest dealer,
will sell SunPower panels, storage, EV charging equipment and
financial products. With this relationship, SunPower is expected to
significantly expand its geographic footprint across Minnesota, Wisconsin and Iowa.
- Expanding multifamily coverage: SunPower grew its New
Homes multifamily business, surpassing full year 2022 category
bookings in the first quarter of 2023. SunPower's growth in
multifamily illustrates the company's efforts to make it easy for
developers to adopt solar while enabling them to pass along energy
savings to their tenants.
Digital innovation
- Enhanced scheduling capabilities: The company piloted
new scheduling software in the first quarter which will enable more
reliable appointment times and provide customers with real-time
tracking of technicians who are traveling to their site. SunPower
expects it will gain financial benefit from better algorithms to
manage drive time, distance and utilization.
- Added features to dealer tools: SunPower updated its
tools for dealers with advancements designed to make managing
inventory faster, easier and more accurate.
World-class financial solutions
- Record lease growth: SunPower's lease business grew 268%
year-over-year in the first quarter. SunPower plans to expand its
lease offering in 2023 following the passage of the Inflation
Reduction Act and U.S. Department of Treasury guidance related to
the three various federal bonus tax credits.
- Scaling loan business to meet demand: In 2023 to date,
SunPower has secured financing commitments from HASI, Credit
Agricole CIB and credit funds and accounts managed by KKR to
fund a total of $1 billion of
incremental solar loans for its customers. Through these
non-recourse vehicles, SunPower Financial™ will continue to provide
customers with attractive loan options for the transition to clean
energy.
1
|
Based on average of
BBB, Yelp, ConsumerAffairs, BestCompany, Google, SolarReviews and
EnergySage reviews scores as of 3/31/23
|
Financial
Highlights
|
|
($ Millions, except
percentages, residential
customers, and per-share data)
|
1st Quarter
2023
|
4th Quarter
2022
|
1st Quarter
2022
|
GAAP revenue from
continuing operations
|
$440.9
|
$497.3
|
$350.3
|
GAAP gross margin from
continuing operations
|
14.5 %
|
21.0 %
|
20.6 %
|
GAAP net (loss) income
from continuing operations
|
$(50.7)
|
$7.6
|
$(2.2)
|
GAAP net (loss) income
from continuing operations
per diluted share
|
$(0.29)
|
$0.04
|
$(0.01)
|
Non-GAAP revenue from
continuing operations1
|
$442.5
|
$492.4
|
$336.1
|
Non-GAAP gross margin
from continuing operations1
|
17.1 %
|
21.3 %
|
21.7 %
|
Non-GAAP net (loss)
income from continuing
operations1, 3
|
$(12.5)
|
$26.2
|
$2.9
|
Non-GAAP net (loss)
income from continuing
operations per diluted share1, 3
|
$(0.07)
|
$0.15
|
$0.02
|
Adjusted
EBITDA1
|
$0.6
|
$36.2
|
$11.2
|
Residential
customers
|
531,300
|
510,400
|
443,800
|
Cash2
|
$116.5
|
$377.0
|
$142.3
|
|
|
|
The sale of our C&I
Solutions business met the criteria for classification as
"discontinued operations" in accordance with the guidance in ASC
205-20, Discontinued Operations, 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
|
Non-GAAP results for
fiscal 2022 have been recast to exclude the mark-to-market loss
(gain) related to our interest rate swaps which are recorded within
"interest expense" in our condensed consolidated statement of
operations.
|
2023 Financial Outlook
SunPower affirmed 2023 guidance
of $2,450–$2,900 Adjusted EBITDA per
customer before platform investment and 90,000–110,000 incremental
customers, resulting in $125–$155 million Adjusted EBITDA for the
year.
Earnings Conference Call Information
SunPower will
discuss its first quarter 2023 financial results on Wednesday, May 3 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/BIa4c7eb85f74b4d2da88bb20026d52c3c.
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 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, including our relationship with OhmConnect, our dealer
accelerator program, and suppliers, 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 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, including impacts of the COVID-19 pandemic, 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; and (9) challenges managing our
acquisitions, joint ventures, and partnerships, including our
ability to successfully manage acquired assets and supplier
relationships. 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 report on Form 10-K, 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,
SUNPOWER FINANCIAL, SUNVAULT, and the SUNPOWER logo are trademarks
or registered trademarks of SunPower Corporation in the U.S.
SUNPOWER
CORPORATION
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
(In
thousands)
|
(Unaudited)
|
|
|
April 2,
2023
|
|
January 1,
2023
|
Assets
|
|
|
|
Current
assets:
|
|
|
|
Cash and cash
equivalents
|
$
116,478
|
|
$
377,026
|
Restricted cash and
cash equivalents, current portion
|
9,634
|
|
9,855
|
Short-term
investments
|
—
|
|
132,480
|
Accounts receivable,
net
|
194,231
|
|
174,577
|
Contract
assets
|
58,610
|
|
50,692
|
Inventories
|
381,847
|
|
316,815
|
Advances to suppliers,
current portion
|
12,508
|
|
9,309
|
Prepaid expenses and
other current assets
|
212,970
|
|
197,760
|
Total current
assets
|
986,278
|
|
1,268,514
|
|
|
|
|
Restricted cash and
cash equivalents, net of current portion
|
15,158
|
|
15,151
|
Property, plant and
equipment, net
|
82,117
|
|
74,522
|
Operating lease
right-of-use assets
|
36,302
|
|
36,926
|
Solar power systems
leased, net
|
40,768
|
|
41,779
|
Goodwill
|
126,338
|
|
126,338
|
Other intangible
assets, net
|
22,435
|
|
24,192
|
Other long-term
assets
|
183,015
|
|
192,585
|
Total assets
|
$
1,492,411
|
|
$
1,780,007
|
|
|
|
|
Liabilities and
Equity
|
|
|
|
Current
liabilities:
|
|
|
|
Accounts
payable
|
$
225,143
|
|
$
242,229
|
Accrued
liabilities
|
164,210
|
|
145,229
|
Operating lease
liabilities, current portion
|
11,589
|
|
11,356
|
Contract liabilities,
current portion
|
161,289
|
|
144,209
|
Short-term
debt
|
121,473
|
|
82,404
|
Convertible debt,
current portion
|
—
|
|
424,919
|
Total current
liabilities
|
683,704
|
|
1,050,346
|
|
|
|
|
Long-term
debt
|
155,969
|
|
308
|
Operating lease
liabilities, net of current portion
|
28,362
|
|
29,347
|
Contract liabilities,
net of current portion
|
11,305
|
|
11,555
|
Other long-term
liabilities
|
109,782
|
|
112,797
|
Total
liabilities
|
989,122
|
|
1,204,353
|
|
|
|
|
Equity:
|
|
|
|
Common
stock
|
175
|
|
174
|
Additional paid-in
capital
|
2,839,233
|
|
2,855,930
|
Accumulated
deficit
|
(2,116,859)
|
|
(2,066,175)
|
Accumulated other
comprehensive income
|
11,573
|
|
11,568
|
Treasury stock, at
cost
|
(231,717)
|
|
(226,646)
|
Total stockholders'
equity
|
502,405
|
|
574,851
|
Noncontrolling
interests in subsidiaries
|
884
|
|
803
|
Total
equity
|
503,289
|
|
575,654
|
Total liabilities and
equity
|
$
1,492,411
|
|
$
1,780,007
|
SUNPOWER
CORPORATION
|
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
|
(In thousands,
except per share data)
|
(Unaudited)
|
|
|
|
THREE MONTHS
ENDED
|
|
|
April 2,
2023
|
|
January 1,
2023
|
|
April 3,
2022
|
Total
revenues
|
|
$
440,878
|
|
$
497,312
|
|
$
350,277
|
Total cost of
revenues
|
|
376,767
|
|
392,664
|
|
277,968
|
Gross profit
|
|
64,111
|
|
104,648
|
|
72,309
|
Operating
expenses:
|
|
|
|
|
|
|
Research and
development
|
|
7,247
|
|
5,560
|
|
5,010
|
Sales, general, and
administrative
|
|
90,881
|
|
82,160
|
|
76,996
|
Restructuring charges
(credits)
|
|
—
|
|
—
|
|
627
|
(Income) expense from
transition services agreement, net
|
|
(224)
|
|
1,356
|
|
266
|
Total operating
expenses
|
|
97,904
|
|
89,076
|
|
82,899
|
Operating (loss)
income
|
|
(33,793)
|
|
15,572
|
|
(10,590)
|
Other (expense) income,
net:
|
|
|
|
|
|
|
Interest
income
|
|
831
|
|
2,922
|
|
42
|
Interest
expense
|
|
(5,678)
|
|
(6,342)
|
|
(5,044)
|
Other, net
|
|
(10,983)
|
|
(6,755)
|
|
1,444
|
Other (expense)
income, net
|
|
(15,830)
|
|
(10,175)
|
|
(3,558)
|
(Loss) income from
continuing operations before income taxes and equity
in earnings (losses) of unconsolidated investees
|
|
(49,623)
|
|
5,397
|
|
(14,148)
|
(Provision for)
benefits from income taxes
|
|
(1,227)
|
|
2,856
|
|
11,643
|
Equity in earnings
(losses) of unconsolidated investees
|
|
247
|
|
365
|
|
—
|
Net (loss) income from
continuing operations
|
|
(50,603)
|
|
8,618
|
|
(2,505)
|
(Loss) income from
discontinued operations before income taxes and
equity in earnings (losses) of unconsolidated investees
|
|
—
|
|
—
|
|
(26,298)
|
Benefits from
(provision for) income taxes from discontinued
operations
|
|
—
|
|
—
|
|
343
|
Net (loss) income from
discontinued operations, net of taxes
|
|
—
|
|
—
|
|
(25,955)
|
Net (loss)
income
|
|
(50,603)
|
|
8,618
|
|
(28,460)
|
Net (income) loss from
continuing operations attributable to
noncontrolling interests
|
|
(81)
|
|
(1,005)
|
|
339
|
Net loss (income) from
discontinued operations attributable to
noncontrolling interests
|
|
—
|
|
—
|
|
250
|
Net (income) loss
attributable to noncontrolling interests
|
|
(81)
|
|
(1,005)
|
|
589
|
Net (loss) income from
continuing operations attributable to stockholders
|
|
(50,684)
|
|
7,613
|
|
(2,166)
|
Net (loss) income from
discontinued operations attributable to stockholders
|
|
—
|
|
—
|
|
(25,705)
|
Net (loss) income
attributable to stockholders
|
|
$
(50,684)
|
|
$
7,613
|
|
$
(27,871)
|
|
|
|
|
|
|
|
Net (loss) income per
share attributable to stockholders - basic:
|
|
|
|
|
|
|
Continuing
operations
|
|
$
(0.29)
|
|
$
0.04
|
|
$
(0.01)
|
Discontinued
operations
|
|
$
—
|
|
$
—
|
|
$
(0.15)
|
Net (loss) income per
share – basic
|
|
$
(0.29)
|
|
$
0.04
|
|
$
(0.16)
|
|
|
|
|
|
|
|
Net (loss) income per
share attributable to stockholders - diluted:
|
|
|
|
|
|
|
Continuing
operations
|
|
$
(0.29)
|
|
$
0.04
|
|
$
(0.01)
|
Discontinued
operations
|
|
$
—
|
|
$
—
|
|
$
(0.15)
|
Net (loss) income per
share – diluted
|
|
$
(0.29)
|
|
$
0.04
|
|
$
(0.16)
|
|
|
|
|
|
|
|
Weighted-average
shares:
|
|
|
|
|
|
|
Basic
|
|
174,528
|
|
174,231
|
|
173,376
|
Diluted
|
|
174,528
|
|
175,518
|
|
173,376
|
SUNPOWER
CORPORATION
|
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
(In
thousands)
|
(Unaudited)
|
|
|
|
THREE MONTHS
ENDED
|
|
|
April 2,
2023
|
|
January 1,
2023
|
|
April 3,
2022
|
Cash flows from
operating activities:
|
|
|
|
|
|
|
Net (loss)
income
|
|
$
(50,603)
|
|
$
8,618
|
|
$
(28,460)
|
Adjustments to
reconcile net (loss) income to net cash used in operating
activities:
|
|
|
|
|
|
|
Depreciation and
amortization (excluding amortization of cloud computing
arrangements)
|
|
9,989
|
|
7,781
|
|
4,170
|
Amortization of cloud
computing arrangements
|
|
1,673
|
|
1,723
|
|
495
|
Stock-based
compensation
|
|
6,877
|
|
7,378
|
|
5,427
|
Non-cash interest
expense
|
|
617
|
|
1,108
|
|
726
|
Equity in (earnings)
losses of unconsolidated investees
|
|
(247)
|
|
(365)
|
|
—
|
Loss (gain) on equity
investments
|
|
10,805
|
|
6,255
|
|
(1,315)
|
Unrealized loss (gain)
on derivatives
|
|
3,334
|
|
11
|
|
—
|
Dividend from equity
method investees
|
|
371
|
|
(13)
|
|
—
|
Deferred income
taxes
|
|
(815)
|
|
(1,367)
|
|
(13,750)
|
Other, net
|
|
91
|
|
1,081
|
|
845
|
Changes in operating
assets and liabilities:
|
|
|
|
|
|
|
Accounts
receivable
|
|
(19,745)
|
|
2,643
|
|
(12,354)
|
Contract
assets
|
|
(7,918)
|
|
(11,943)
|
|
(6,519)
|
Inventories
|
|
(65,032)
|
|
(88,562)
|
|
(35,081)
|
Project
assets
|
|
—
|
|
—
|
|
2,892
|
Prepaid expenses and
other assets
|
|
(12,199)
|
|
9,690
|
|
(86,502)
|
Operating lease
right-of-use assets
|
|
2,710
|
|
2,833
|
|
2,415
|
Advances to
suppliers
|
|
(3,198)
|
|
(2,877)
|
|
(2,222)
|
Accounts payable and
other accrued liabilities
|
|
(26,557)
|
|
45,142
|
|
41,444
|
Contract
liabilities
|
|
16,830
|
|
1,921
|
|
22,066
|
Operating lease
liabilities
|
|
(2,063)
|
|
(2,673)
|
|
(3,027)
|
Net cash (used in)
provided by operating activities
|
|
(135,080)
|
|
(11,616)
|
|
(108,750)
|
Cash flows from
investing activities:
|
|
|
|
|
|
|
Purchases of property,
plant and equipment
|
|
(11,943)
|
|
(11,849)
|
|
(8,636)
|
Investments in
software development costs
|
|
(891)
|
|
(1,465)
|
|
(1,521)
|
Cash paid for equity
investments under the Dealer Accelerator Program and
other
|
|
—
|
|
—
|
|
(7,000)
|
Proceeds from sale of
equity investment
|
|
121,675
|
|
—
|
|
149,830
|
Cash paid for
investments in unconsolidated investees
|
|
(1,454)
|
|
(2,431)
|
|
(154)
|
Dividend from equity
method investees
|
|
149
|
|
13
|
|
—
|
Net cash provided by
(used in) investing activities
|
|
107,536
|
|
(15,732)
|
|
132,519
|
Cash flows from
financing activities:
|
|
|
|
|
|
|
Proceeds from bank
loans and other debt
|
|
245,764
|
|
21,482
|
|
21,458
|
Repayment of bank
loans and other debt
|
|
(48,146)
|
|
(15,271)
|
|
(23,944)
|
Distributions to
noncontrolling interests and redeemable noncontrolling
interests attributable to residential projects
|
|
—
|
|
(9,201)
|
|
—
|
Repayment of
convertible debt
|
|
(424,991)
|
|
—
|
|
—
|
Payments for financing
leases
|
|
(775)
|
|
(666)
|
|
—
|
Purchases of stock for
tax withholding obligations on vested restricted stock
|
|
(5,070)
|
|
(943)
|
|
(7,332)
|
Net cash (used in)
provided by financing activities
|
|
(233,218)
|
|
(4,599)
|
|
(9,818)
|
Net (decrease) increase
in cash, cash equivalents, and restricted cash
|
|
(260,762)
|
|
(31,947)
|
|
13,951
|
Cash, cash equivalents
and restricted cash, beginning of period
|
|
402,032
|
|
433,979
|
|
148,613
|
Cash, cash equivalents,
and restricted cash, end of period
|
|
$
141,270
|
|
$
402,032
|
|
$
162,564
|
|
|
|
|
|
|
|
Reconciliation of
cash, cash equivalents, and restricted cash to the condensed
consolidated balance sheets, including discontinued
operations:
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
116,478
|
|
$
377,026
|
|
$
142,250
|
Restricted cash and
cash equivalents, current portion
|
|
9,634
|
|
9,855
|
|
681
|
Restricted cash and
cash equivalents, net of current portion
|
|
15,158
|
|
15,151
|
|
12,857
|
Cash, cash
equivalents, and restricted cash from discontinued
operations
|
|
—
|
|
—
|
|
6,776
|
Total cash, cash
equivalents, and restricted cash
|
|
$
141,270
|
|
$
402,032
|
|
$
162,564
|
|
|
|
|
|
|
|
Supplemental
disclosure of cash flow information:
|
|
|
|
|
|
|
Property, plant and
equipment acquisitions funded by liabilities (including
financing leases)
|
|
$
3,505
|
|
$
3,298
|
|
$
922
|
Right-of-use assets
obtained in exchange of lease obligations
|
|
2,086
|
|
1,464
|
|
877
|
Net working capital
settlement related to C&I Solutions sale
|
|
23,880
|
|
—
|
|
—
|
Cash paid for
interest
|
|
11,969
|
|
741
|
|
9,874
|
Cash paid for income
taxes
|
|
184
|
|
2,250
|
|
250
|
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
- Results of operations of businesses exited/to be exited: We
exclude the results of operations of our legacy businesses that we
have exited, or to be exited, from our Non-GAAP results. These
legacy businesses include our light commercial business that we
exited starting in the first fiscal quarter of 2022 to reinforce
the Company's strategic direction to focus solely on the
residential solar market, Hillsboro,
Oregon facility that ceased manufacturing and revenue
generation in the first quarter of 2021, as well as, results of our
legacy power plant and legacy O&M businesses. We are not doing
new activities for these businesses, and the remaining activities
comprise of fulfillment of existing outstanding orders, true-up of
estimated milestones payments, settlement of certain warranty
obligations on projects and other wind-down activities. As such,
these are excluded from our non-GAAP results as they are not
reflective of our 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.
- Transition costs: We incur non-recurring charges related to the
hiring and transition of new executive officers, members of
management, and other employees. During fiscal 2021, we appointed a
new chief executive officer, as well as other chief executives, and
we are investing resources in those executive transitions, and in
developing new members of management as we complete our
transformation. We believe that it is appropriate to exclude these
from our non-GAAP results as they are 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 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
|
|
|
April 2,
2023
|
|
January 1,
2023
|
|
April 3,
2022
|
GAAP revenue
|
|
$
440,878
|
|
$
497,312
|
|
$
350,277
|
Other
adjustments:
|
|
|
|
|
|
|
Results of operations
of businesses exited/to be exited
|
|
(759)
|
|
(4,893)
|
|
(14,208)
|
Mark-to-market loss
(gain) on interest rate swaps
|
|
2,425
|
|
—
|
|
—
|
Non-GAAP
revenue
|
|
$
442,544
|
|
$
492,419
|
|
$
336,069
|
Adjustments to Gross
Profit Margin:
|
|
|
|
THREE MONTHS
ENDED
|
|
|
April 2,
2023
|
|
January 1,
2023
|
|
April 3,
2022
|
GAAP gross profit from
continuing operations
|
|
$
64,111
|
|
$
104,648
|
|
$
72,309
|
Other
adjustments:
|
|
|
|
|
|
|
Results of operations
of businesses exited/to be exited
|
|
7,890
|
|
(403)
|
|
(260)
|
Transition
costs
|
|
262
|
|
(321)
|
|
378
|
(Gain) loss on sale
and impairment of residential lease assets
|
|
(267)
|
|
(268)
|
|
(279)
|
Stock-based
compensation expense
|
|
1,238
|
|
1,257
|
|
899
|
Business
reorganization costs
|
|
—
|
|
—
|
|
—
|
Transaction-related
costs
|
|
—
|
|
—
|
|
—
|
Mark-to-market loss
(gain) on interest rate swaps
|
|
2,425
|
|
—
|
|
—
|
Non-GAAP gross
profit
|
|
$
75,659
|
|
$
104,913
|
|
$
73,047
|
|
|
|
|
|
|
|
GAAP gross margin
(%)
|
|
14.5 %
|
|
21.0 %
|
|
20.6 %
|
Non-GAAP gross margin
(%)
|
|
17.1 %
|
|
21.3 %
|
|
21.7 %
|
Adjustments to Net
(Loss) Income:
|
|
|
|
THREE MONTHS
ENDED
|
|
|
April 2,
2023
|
|
January 1,
2023
|
|
April 3,
2022
|
GAAP net (loss) income
from continuing operations attributable to stockholders
|
|
$
(50,684)
|
|
$
7,613
|
|
$
(2,166)
|
Adjustments based on
IFRS:
|
|
|
|
|
|
|
Mark-to-market loss
(gain) on equity investments
|
|
10,805
|
|
6,255
|
|
(1,315)
|
Other
adjustments:
|
|
|
|
|
|
|
Results of operations
of businesses exited/to be exited
|
|
9,810
|
|
708
|
|
2,933
|
(Gain) loss on sale
and impairment of residential lease assets
|
|
(267)
|
|
(268)
|
|
(279)
|
Litigation
|
|
570
|
|
1,242
|
|
177
|
Stock-based
compensation expense
|
|
6,844
|
|
7,372
|
|
5,329
|
Amortization of
intangible assets and software
|
|
2,786
|
|
2,780
|
|
1,978
|
Transaction-related
costs
|
|
644
|
|
44
|
|
964
|
Transition
costs
|
|
3,119
|
|
3,599
|
|
1,469
|
Business
reorganization costs
|
|
—
|
|
1
|
|
—
|
Restructuring charges
(credits)
|
|
—
|
|
—
|
|
186
|
Acquisition-related
costs
|
|
3
|
|
114
|
|
5,808
|
Equity (income) loss
from unconsolidated investees
|
|
(247)
|
|
(364)
|
|
—
|
Mark-to-market loss
(gain) on interest rate swaps
|
|
3,334
|
|
11
|
|
—
|
Tax effect
|
|
790
|
|
(2,858)
|
|
(12,186)
|
Non-GAAP net (loss)
income attributable to stockholders
|
|
$
(12,493)
|
|
$
26,249
|
|
$
2,898
|
Adjustments to Net
(Loss) Income per diluted share:
|
|
|
|
THREE MONTHS
ENDED
|
|
|
April 2,
2023
|
|
January 1,
2023
|
|
April 3,
2022
|
Net (loss) income per
diluted share
|
|
|
|
|
|
|
Numerator:
|
|
|
|
|
|
|
GAAP net (loss) income
available to common stockholders1
|
|
$
(50,684)
|
|
$
7,613
|
|
$
(2,166)
|
|
|
|
|
|
|
|
Non-GAAP net (loss)
income available to common stockholders1
|
|
$
(12,493)
|
|
$
26,249
|
|
$
2,898
|
|
|
|
|
|
|
|
Denominator:
|
|
|
|
|
|
|
GAAP weighted-average
shares
|
|
174,258
|
|
174,231
|
|
173,376
|
Effect of dilutive
securities:
|
|
|
|
|
|
|
Restricted stock
units
|
|
—
|
|
1,287
|
|
—
|
GAAP dilutive
weighted-average common shares:
|
|
174,258
|
|
175,518
|
|
173,376
|
|
|
|
|
|
|
|
Non-GAAP
weighted-average shares
|
|
174,258
|
|
174,231
|
|
173,376
|
Effect of dilutive
securities:
|
|
|
|
|
|
|
Restricted stock
units
|
|
—
|
|
1,287
|
|
1,399
|
Non-GAAP dilutive
weighted-average common shares1
|
|
174,258
|
|
175,518
|
|
174,775
|
|
|
|
|
|
|
|
GAAP dilutive net
(loss) income per share - continuing operations
|
|
$
(0.29)
|
|
$
0.04
|
|
$
(0.01)
|
Non-GAAP dilutive net
(loss) income per share - continuing operations
|
|
$
(0.07)
|
|
$
0.15
|
|
$
0.02
|
|
|
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.
|
Adjusted
EBITDA:
|
|
|
|
THREE MONTHS
ENDED
|
|
|
April 2,
2023
|
|
January 1,
2023
|
|
April 3,
2022
|
GAAP net (loss) income
from continuing operations attributable to stockholders
|
|
$
(50,684)
|
|
$
7,613
|
|
$
(2,166)
|
Adjustments based on
IFRS:
|
|
|
|
|
|
|
Mark-to-market loss
(gain) on equity investments
|
|
10,805
|
|
6,255
|
|
(1,315)
|
Other
adjustments:
|
|
|
|
|
|
|
Results of operations
of businesses exited/to be exited
|
|
9,810
|
|
708
|
|
2,933
|
(Gain) loss on sale
and impairment of residential lease assets
|
|
(267)
|
|
(268)
|
|
(279)
|
Litigation
|
|
570
|
|
1,242
|
|
177
|
Stock-based
compensation expense
|
|
6,844
|
|
7,372
|
|
5,329
|
Amortization of
intangible assets and software
|
|
2,786
|
|
2,780
|
|
1,978
|
Transaction-related
costs
|
|
644
|
|
44
|
|
964
|
Transition
costs
|
|
3,119
|
|
3,599
|
|
1,469
|
Business
reorganization costs
|
|
—
|
|
1
|
|
—
|
Restructuring charges
(credits)
|
|
—
|
|
—
|
|
186
|
Acquisition-related
costs
|
|
3
|
|
114
|
|
5,808
|
Equity (income) loss
from unconsolidated investees
|
|
(247)
|
|
(364)
|
|
—
|
Mark-to-market loss
(gain) on CS interest rate swaps
|
|
3,334
|
|
11
|
|
—
|
Cash interest expense,
net of interest income
|
|
3,996
|
|
3,469
|
|
4,878
|
Provision for (benefit
from) income taxes
|
|
1,196
|
|
(2,883)
|
|
(11,676)
|
Depreciation
|
|
8,677
|
|
6,476
|
|
2,873
|
Adjusted
EBITDA
|
|
$
586
|
|
$
36,169
|
|
$
11,159
|
FY 2023
GUIDANCE
|
(in
thousands)
|
FY
2023
|
Residential
Customers
|
90,000 -
110,000
|
Residential Adjusted
EBITDA/Customer1
|
$2,450 -
$2,900
|
Adjusted
EBITDA2
|
$125 million - $155
million
|
Net Loss
(GAAP)
|
($31) million - ($1)
million
|
- Excluding Product & Digital operating expenses for
Residential only.
- Adjusted EBITDA guidance for FY 2023 includes net adjustments
that decrease GAAP net loss by approximately $156 million primarily relating to the following
adjustments: stock-based compensation expense, results of
operations of businesses exited/to be exited, mark-to-market (gain)
loss on equity investments, net, amortization of intangible assets
and software, interest expense, depreciation, income taxes, and
other non-recurring adjustments.
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SOURCE SunPower Corp.