SINGAPORE, Oct. 10,
2023 /PRNewswire/ -- Maxeon Solar Technologies, Ltd.
(NASDAQ: MAXN) ("Maxeon" or "the Company"), a global leader in
solar innovation and channels, today provided a business update
following the end of the third quarter, during which the Company's
performance was impacted by reduced shipments to its largest
distributed generation (DG) customer located in the United States and an industry-wide demand
slowdown in the global DG markets.
Maxeon's CEO Bill Mulligan commented, "as disclosed in
our last earnings call, our largest US DG customer breached their
payment obligations under our current Master Supply Agreement (MSA)
and we paused shipments in late July as a result. While
this customer has recently made several payments on their
outstanding balance and is now close to becoming current, we
continue to pause our shipments and engage in good faith
towards resolution of certain ongoing claims of breach under the
MSA. We do not have visibility into how quickly such
resolution can be achieved. It is our position that we have
firm quantity and pricing contracts in place."
The Company currently expects third quarter 2023 revenues to be
in the range of $224 to $229 million, and shipments to be in the range of
622 to 632 megawatts. As a result, the range of our Adjusted EBITDA
guidance we provided for the third quarter is expected to shift
downward by approximately $30
million, due to the factors mentioned above as well as
certain inventory adjustments.
"In light of the current market environment, Maxeon is taking
decisive action to re-engineer its IBC manufacturing capacity and
strengthen the fundamentals of our DG business while maintaining
full pace and unchanged direction in our U.S. large scale
business," Mulligan continued. "Instead of refurbishing our Fab 5
facility in the Philippines, which
we now plan to utilize for the scale-up of our next-generation
Maxeon 8 technology, we will convert our legacy Maxeon 3 capacity
in the Philippines to Maxeon 7
technology. This will allow us to accelerate market
introduction of world-record efficiency Maxeon 7 panels by several
months and reduce capital expenditures by about $100 million."
Through the acquisition of Solaria's sales channel assets, the
Company intends to not only accelerate its IBC product sales
through its own Maxeon-branded in the US, but also to enable
introduction of a "value" offering, complementary to our premium
IBC product. This is the same two-tiered product strategy the
Company successfully employs in Europe today.
Maxeon also plans to use this opportunity to begin the
preparation of its Fab 3 facility in Malaysia to install a TOPCon solar cell pilot
line ahead of the start-up of our planned manufacturing facility in
Albuquerque. This pilot line will de-risk our planned US factory
ramp.
Maxeon's Albuquerque solar cell and module factory remains on
track. Engineering and pre-construction work are in progress and
environmental surveys have been completed. Customer negotiations
and due diligence on our DOE loan application are proceeding as
planned.
Restructuring actions are expected to result in a reduction of
approximately 15% of the Company's global workforce, with most of
the reductions expected to occur by the end of the year.
"As a result of rapidly changing market and industry conditions,
we have acted decisively to streamline our operations, invest in
new technology, and adjust our mix between the DG and utility-scale
markets. We believe that Maxeon is well positioned to weather
this market disruption and come out stronger on the other side,"
said Mulligan.
"Maxeon's strategy is to deliver premium, differentiated
products and a superior customer experience across a balanced
global portfolio of DG and utility scale markets. The current
industry disruption provides an opportunity to re-engineer and
rebalance our technology portfolio. I'm confident that this is the
right strategy for Maxeon, and that our highly experienced teams,
industry-leading technology, and strong track record and presence
in attractive high-growth markets provide us with the tools to
successfully execute this strategy."
The Company will provide further detail on its third quarter
2023 results and fourth quarter 2023 guidance, as well as on the
impacts of the above-mentioned restructuring activities, during its
third quarter 2023 earnings call, which is currently scheduled for
November 15, 2023.
About Maxeon Solar Technologies
Maxeon Solar
Technologies (NASDAQ: MAXN) is Powering Positive Change™.
Headquartered in Singapore, Maxeon
designs and manufactures Maxeon® and SunPower® brand solar panels,
and has sales operations in more than 100 countries, operating
under the SunPower brand in certain countries outside the United States. The Company is a leader in
solar innovation with access to over 1,000 patents and two
best-in-class solar panel product lines. Maxeon products span the
global rooftop and solar power plant markets through a network of
more than 1,700 trusted partners and distributors. A pioneer in
sustainable solar manufacturing, Maxeon leverages a 35-plus-year
history in the solar industry and numerous awards for its
technology. For more information about how Maxeon is Powering
Positive Change™ visit us at www.maxeon.com, on LinkedIn and on
Twitter @maxeonsolar.
Forward-Looking Statements
This press release 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, including, statements
regarding our expectations for our third quarter 2023 revenues,
shipments and Adjusted EBITDA and the assumptions underlying those
expectations. Additional forward-looking statements include,
but are not limited, to statements regarding our expectations for
market and industry conditions, our restructuring plans, including
those to streamline our operations, invest in new technology, and
adjust our mix between the DG and utility-scale markets as
described herein, our relationship with SunPower Corporation and
the resolution of claims of breach of the MSA, as well as our
ability to execute on our plans and strategy.
Additional forward-looking statements can be identified by
terminology such as "may," "might," "could," "will," "aims,"
"expects," "anticipates," "future," "intends," "plans," "believes,"
"estimates" and similar statements. 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.
These statements are not guarantees of future performance and are
subject to a number of risks. The reader should not place undue
reliance on these forward-looking statements, as there can be no
assurances that the plans, initiatives or expectations upon which
they are based will occur. Factors that could cause or contribute
to such differences include, but are not limited to: (1) challenges
in executing transactions key to our strategic plans, including
executing of restructuring plans, regulatory and other challenges
that may arise; (2) our liquidity, substantial indebtedness, terms
and conditions upon which our indebtedness is incurred, and ability
to obtain additional financing for our projects, customers and
operations; (3) our ability to manage supply chain shortages and/or
excess inventory and cost increases and operating expenses; (4)
potential disruptions to our operations and supply chain that may
result from damage or destruction of facilities operated by our
suppliers, difficulties in hiring or retaining key personnel,
epidemics, natural disasters, including impacts of the war in
Ukraine; (5) our ability to manage
our key customers and suppliers; (6) 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; (7) competition in the
solar and general energy industry and downward pressure on selling
prices and wholesale energy pricing, including impacts of
inflation, economic recession and foreign exchange rates upon
customer demand; (8) changes in regulation and public policy,
including the imposition and applicability of tariffs; (9) our
ability to comply with various tax holiday requirements as well as
regulatory changes or findings affecting the availability of
economic incentives promoting use of solar energy and availability
of tax incentives or imposition of tax duties; (10) fluctuations in
our operating results and in the foreign currencies in which we
operate; (11) appropriately sizing, or delays in expanding our
manufacturing capacity and containing manufacturing and logistics
difficulties that could arise; (12) unanticipated impact to
customer demand and sales schedules due, among other factors, to
the war in Ukraine, economic
recession and environmental disasters; (13) challenges managing our
acquisitions, joint ventures and partnerships, including our
ability to successfully manage acquired assets and supplier
relationships; (14) reaction by securities or industry analysts to
our annual and/or quarterly guidance, in combination with our
results of operations or other factors, and/ or third party reports
or publications, whether accurate or not, which may cause such
securities or industry analysts to cease publishing research or
reports about us, or adversely change their recommendations
regarding our ordinary shares, which may negatively impact the
market price of our ordinary shares and volume of our stock
trading; (15) reaction by investors to our annual and/or quarterly
guidance, in combination with our results of operations or other
factors, and/ or third party reports or publications, whether
accurate or not, which may negatively impact the market price of
our ordinary shares and volume of our stock trading; (16)
unpredictable outcomes resulting from our litigation activities or
other disputes; and (17) the actual numbers and timing of employee
reductions are subject to, and will be dependent on, applicable
laws and regulations.. 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 20-F, particularly
under the heading "Risk Factors". Copies of these filings are
available online from the SEC at www.sec.gov, or on the SEC Filings
section of our Investor Relations website at
https://corp.maxeon.com/investor-relations. 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.
Statement Regarding Preliminary Unaudited Financial
Information
This press release includes certain preliminary,
unaudited financial information for the three months ended
October 1, 2023. The unaudited
revenue and shipment information for the quarter ended October 1, 2023, is preliminary, based on the
information available at this time and subject to change in
connection with the completion of the Company's financial closing
procedures for the quarter ended October 1,
2023. The Company's actual results and financial condition
as reflected in the financial statements that will be included in
the Company's earnings release to be filed with the SEC on Form
6-K, may be adjusted or presented differently from the financial
information herein and the variations could be material. Please see
"Forward-Looking Statements" for additional information about the
preliminary information.
© 2023 Maxeon Solar Technologies, Ltd. All Rights Reserved.
MAXEON is a registered trademark of Maxeon Solar Technologies, Ltd.
Visit https://corp.maxeon.com/trademarks for more
information.
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