- Added 16,000 customers in Q4, 75,900 new customers in FY
2023
- Reported Q4 revenue of $357
million; FY 2023 revenue of $1.7
billion
- Reported Q4 GAAP Net Loss of ($124) million and Adjusted EBITDA of
($68) million; FY 2023 GAAP Net Loss
of ($247) million and Adjusted EBITDA
of ($84) million
- Announced $175 million of
additional capital and $25 million of
additional revolving debt capacity
RICHMOND, Calif., Feb. 15, 2024 /PRNewswire/ --
SunPower Corp. (NASDAQ:SPWR), a leading solar technology and energy
services provider, today announced financial results for the fourth
quarter and full year ending December 31, 2023.
"With the recent infusion of capital, SunPower is focused on
driving positive free cash flow and profitability," said
Peter Faricy, SunPower CEO. "This is
a new opportunity for SunPower to reinforce our strong foundation
as we continue to navigate an uncertain market in early 2024. With
this funding and industry tailwinds of extended tax credits and
lower equipment costs, we believe SunPower is positioned to execute
on maximizing the value proposition of solar and storage for our
customers."
On February 15, the company
announced it raised $175 million in
new capital financing from TotalEnergies and Global Infrastructure
Partners, including $45 million of
prior bridge financing, $80 million
in new investment, and $50 million
that is available to be borrowed upon the satisfaction of certain
conditions. As a part of the transaction, the Company also received
$25 million of revolving debt
capacity as part of new long-term waivers from key financial
partners.
"$48 million of the Adjusted
EBITDA delta between guidance and our final reporting can be
attributed to restatement impacts and items we believe are one-time
charges or not expected to recur," said Beth Eby, SunPower CFO.
"For 2024, we are focused on profitability and free cash flow, and
we expect to be cash flow positive in the second half of 2024 and
beyond. We will provide additional guidance later in the year,
after we assess the implications of the recapitalization and
restructuring."
FY 2024 GUIDANCE
|
|
|
|
Net Loss (GAAP)
|
($160) million - ($80)
million
|
Gross Margin (Non-GAAP)
|
17% - 19%
|
Free Cash Flow1
|
Positive in second half
2024
|
1 Cash from
operations minus capital expenditures
|
|
Financial Highlights
|
|
|
|
|
|
|
|
|
|
($ Millions, except percentages, residential
customers, and per-share data)
|
4th Quarter 2023
|
4th Quarter 2022
|
Fiscal Year 2023
|
Fiscal Year 2022
|
GAAP revenue from
continuing operations
|
$356.9
|
$498.0
|
$1,685.2
|
$1,741.9
|
GAAP gross margin from
continuing operations
|
3.1 %
|
22.8 %
|
14.1 %
|
23.1 %
|
GAAP net (loss) income
from continuing operations
|
$(115.6)
|
$5.1
|
$(227.1)
|
$93.7
|
GAAP net (loss) income
from continuing operations per diluted share
|
$(0.66)
|
$0.03
|
$(1.30)
|
$0.54
|
Non-GAAP revenue from
continuing operations1, 4
|
$361.3
|
$498.0
|
$1,689.7
|
$1,749.2
|
Non-GAAP gross margin
from continuing operations1, 3, 4
|
4.5 %
|
23.0 %
|
14.6 %
|
23.7 %
|
Non-GAAP net (loss)
income from continuing operations1, 3, 4
|
$(89.5)
|
$19.5
|
$(158.5)
|
$30.0
|
Non-GAAP net (loss)
income from continuing operations per diluted share1, 3,
4
|
$(0.51)
|
$0.11
|
$(0.91)
|
$0.17
|
Adjusted EBITDA1,
3, 4
|
$(67.6)
|
$30.6
|
$(84.2)
|
$70.0
|
Residential
customers
|
586,250
|
427,300
|
586,250
|
427,300
|
Cash2
|
$87.4
|
$123.7
|
$87.4
|
$123.7
|
|
The sale of our C&I
Solutions business met the criteria for classification as
"discontinued operations" in accordance with 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 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.
|
Earnings Conference Call Information
SunPower will discuss its full year and fourth quarter 2023
financial results on Thursday, Feb.
15 at 8 a.m. ET. Analysts
intending to participate in the Q&A session must register for a
personal link and dial-in at:
https://register.vevent.com/register/BI49f0f6c1dcda48db936395f3333e1574.
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, storage
and energy services provider in North
America. SunPower offers solar + storage solutions that give
customers control over electricity consumption and resiliency
during power outages while providing cost savings to homeowners.
For more information, visit www.sunpower.com.
Forward-Looking Statements
This release includes information that constitutes
forward-looking statements. Forward-looking statements often
address expected future business and financial performance, and
often contain words such as "believe," "expect," "anticipate,"
"intend," "plan," or "will." By their nature, forward-looking
statements address matters that are subject to risks and
uncertainties. Any such forward-looking statements may involve risk
and uncertainties that could cause actual results to differ
materially from any future results encompassed within the
forward-looking statements. All statements, other than statements
of historical fact, are forward-looking statements. Examples of
such forward-looking statements include, but are not limited to,
statements regarding: the Company's anticipated results, cash flow
and financial outlook; expectations regarding growth, demand and
our future performance and our ability to capture or meet consumer
demand; the Company's ability to continue as a going concern;
expectations regarding our recent recapitalization, including our
ability to satisfy conditions precedent to additional funding; our
plans and expectations with respect to our strategic partnerships
and initiatives; our strategic plans and areas of investment and
focus; and our expectations for industry trends and factors, and
the impact on our business and strategic plans.
The anticipated results, financial outlook and other
forward-looking statements presented in this release are estimates
based on information available to management as of the date of this
release and are subject to change. There can be no assurance that
the Company's actual results will not differ from the anticipated
results, financial outlook and other forward-looking statements
presented in this release. Factors that could cause or contribute
to such differences include, but are not limited to the Company's
ability to realize the anticipated benefits of capital received and
project financings; the Company's ability to comply with its
financing agreements, including debt covenants or cure any
defaults; the Company's ability to repay its obligations as they
come due; and our liquidity, indebtedness, and ability to obtain
additional financing for our projects and customers; challenges
managing our acquisitions, joint ventures, and partnerships,
including our ability to successfully manage acquired assets and
supplier relationships; the timing and execution of any
restructuring plans; and the risks and other important
factors discussed under the caption "Risk Factors" in the Company's
Annual Report on Form 10-K/A for the fiscal year ended January 1, 2023 and the Quarterly Report on Form
10-Q for the quarterly period ended October
1, 2023, and the Company's other filings with the SEC. These
forward-looking statements should not be relied upon as
representing the Company's views as of any subsequent date, and the
Company is under no obligation to, and expressly disclaims any
responsibility to, update or alter its forward-looking statements,
whether as a result of new information, future events, or
otherwise, except as required by applicable law.
©2024 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
CONSOLIDATED
BALANCE SHEETS
(In
thousands)
(Unaudited)
|
|
December 31, 2023
|
|
January 1, 2023
|
Assets
|
|
|
|
Current
assets:
|
|
|
|
Cash and cash
equivalents
|
$
87,424
|
|
$
377,026
|
Restricted cash and
cash equivalents, current portion
|
1,949
|
|
10,668
|
Short-term
investments
|
—
|
|
132,480
|
Accounts receivable,
net
|
169,556
|
|
169,674
|
Contract
assets
|
45,638
|
|
57,070
|
Loan receivables held
for sale, net
|
4,467
|
|
—
|
Inventories
|
260,909
|
|
295,731
|
Advances to suppliers,
current portion
|
659
|
|
12,059
|
Prepaid expenses and
other current assets
|
258,164
|
|
197,811
|
Total current
assets
|
828,766
|
|
1,252,519
|
|
|
|
|
Restricted cash and
cash equivalents, net of current portion
|
9,111
|
|
18,812
|
Property, plant and
equipment, net
|
108,198
|
|
76,473
|
Operating lease
right-of-use assets
|
31,290
|
|
36,926
|
Solar power systems
leased, net
|
37,892
|
|
41,779
|
Goodwill
|
125,998
|
|
125,998
|
Other intangible
assets, net
|
14,018
|
|
24,192
|
Other long-term
assets
|
191,811
|
|
186,927
|
Total assets
|
$
1,347,084
|
|
$
1,763,626
|
|
|
|
|
Liabilities and Equity
|
|
|
|
Current
liabilities:
|
|
|
|
Accounts
payable
|
$
220,356
|
|
$
243,139
|
Accrued
liabilities
|
154,589
|
|
148,119
|
Operating lease
liabilities, current portion
|
11,176
|
|
11,356
|
Contract liabilities,
current portion
|
153,466
|
|
141,863
|
Short-term
debt
|
344,332
|
|
82,240
|
Convertible debt,
current portion
|
—
|
|
424,919
|
Total current
liabilities
|
883,919
|
|
1,051,636
|
|
|
|
|
Long-term
debt
|
249
|
|
308
|
Operating lease
liabilities, net of current portion
|
23,619
|
|
29,347
|
Contract liabilities,
net of current portion
|
10,553
|
|
11,588
|
Other long-term
liabilities
|
122,075
|
|
114,702
|
Total
liabilities
|
1,040,415
|
|
1,207,581
|
|
|
|
|
Equity:
|
|
|
|
Common
stock
|
175
|
|
174
|
Additional paid-in
capital
|
2,858,046
|
|
2,855,930
|
Accumulated
deficit
|
(2,332,763)
|
|
(2,085,784)
|
Accumulated other
comprehensive income (loss)
|
13,996
|
|
11,568
|
Treasury stock, at
cost
|
(233,755)
|
|
(226,646)
|
Total stockholders'
equity
|
305,699
|
|
555,242
|
Noncontrolling
interests in subsidiaries
|
970
|
|
803
|
Total
equity
|
306,669
|
|
556,045
|
Total liabilities and
equity
|
$
1,347,084
|
|
$
1,763,626
|
SUNPOWER
CORPORATION
CONSOLIDATED
STATEMENTS OF OPERATIONS
(In thousands,
except per share data)
(Unaudited)
|
|
|
THREE MONTHS ENDED
|
|
TWELVE MONTHS ENDED
|
|
|
December 31, 2023
|
|
January 1, 2023
|
|
December 31, 2023
|
|
January 1, 2023
|
Total
revenues
|
|
$
356,905
|
|
$
497,968
|
|
$
1,685,222
|
|
$
1,741,943
|
Total cost of
revenues
|
|
345,926
|
|
384,204
|
|
1,446,767
|
|
1,338,942
|
Gross profit
|
|
10,979
|
|
113,764
|
|
238,455
|
|
403,001
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
Research and
development
|
|
4,799
|
|
5,560
|
|
23,960
|
|
24,759
|
Sales, general, and
administrative
|
|
104,865
|
|
92,848
|
|
393,026
|
|
387,260
|
Restructuring charges
(credits)
|
|
6,806
|
|
—
|
|
12,679
|
|
244
|
Expense (income) from
transition services
agreement,
net
|
|
79
|
|
1,356
|
|
109
|
|
69
|
Total operating
expenses
|
|
116,549
|
|
99,764
|
|
429,774
|
|
412,332
|
Operating (loss)
income
|
|
(105,570)
|
|
14,000
|
|
(191,319)
|
|
(9,331)
|
Other (expense) income,
net:
|
|
|
|
|
|
|
|
|
Interest
income
|
|
490
|
|
2,922
|
|
2,746
|
|
3,200
|
Interest
expense
|
|
(9,832)
|
|
(6,342)
|
|
(28,956)
|
|
(21,565)
|
Other, net
|
|
(1,242)
|
|
(6,755)
|
|
(11,833)
|
|
115,405
|
Other (expense)
income, net
|
|
(10,584)
|
|
(10,175)
|
|
(38,043)
|
|
97,040
|
(Loss) income from
continuing operations before
income taxes and equity
in earnings (losses) of
unconsolidated
investees
|
|
(116,154)
|
|
3,825
|
|
(229,362)
|
|
87,709
|
Benefits from
(provision for) income taxes
|
|
623
|
|
1,903
|
|
(946)
|
|
8,383
|
Equity in earnings
(losses) of unconsolidated investees
|
|
(36)
|
|
336
|
|
3,374
|
|
2,272
|
Net (loss) income from
continuing operations
|
|
(115,567)
|
|
6,064
|
|
(226,934)
|
|
98,364
|
(Loss) income from
discontinued operations before
income taxes and
equity in (losses) earnings of
unconsolidated
investees
|
|
(7,926)
|
|
(1,476)
|
|
(20,006)
|
|
(51,729)
|
(Provision for)
benefits from income taxes
|
|
(363)
|
|
(158)
|
|
—
|
|
640
|
Net (loss) income from
discontinued operations
|
|
(8,289)
|
|
(1,634)
|
|
(20,006)
|
|
(51,089)
|
Net (loss)
income
|
|
(123,856)
|
|
4,430
|
|
(246,940)
|
|
47,275
|
Net (income) loss from
continuing operations
attributable to
noncontrolling interests
|
|
(43)
|
|
(1,005)
|
|
(167)
|
|
(4,676)
|
Net loss (income) from
discontinued operations
attributable to
noncontrolling interests
|
|
—
|
|
—
|
|
—
|
|
250
|
Net (income) loss
attributable to noncontrolling
interests
|
|
(43)
|
|
(1,005)
|
|
(167)
|
|
(4,426)
|
Net (loss) income from
continuing operations
attributable to
stockholders
|
|
(115,610)
|
|
5,059
|
|
(227,101)
|
|
93,688
|
Net (loss) income from
discontinued operations
attributable to
stockholders
|
|
(8,289)
|
|
(1,634)
|
|
(20,006)
|
|
(50,839)
|
Net (loss) income
attributable to stockholders
|
|
$
(123,899)
|
|
$
3,425
|
|
$
(247,107)
|
|
$
42,849
|
|
|
|
|
|
|
|
|
|
Net (loss) income per
share attributable to
stockholders - basic
and diluted:
|
|
|
|
|
|
|
|
|
Continuing
operations
|
|
$
(0.66)
|
|
$
0.03
|
|
$
(1.30)
|
|
$
0.54
|
Discontinued
operations
|
|
$
(0.05)
|
|
$
(0.01)
|
|
$
(0.11)
|
|
$
(0.29)
|
Net (loss) income per
share - basic and diluted
|
|
$
(0.71)
|
|
$
0.02
|
|
$
(1.41)
|
|
$
0.25
|
|
|
|
|
|
|
|
|
|
Weighted-average
shares:
|
|
|
|
|
|
|
|
|
Basic
|
|
175,354
|
|
174,231
|
|
175,041
|
|
173,919
|
Diluted
|
|
175,354
|
|
175,518
|
|
175,041
|
|
174,603
|
SUNPOWER
CORPORATION
CONSOLIDATED
STATEMENTS OF CASH FLOWS
(In
thousands)
(Unaudited)
|
|
|
THREE MONTHS ENDED
|
|
TWELVE MONTHS ENDED
|
|
|
December 31, 2023
|
|
January 1, 2023
|
|
December 31, 2023
|
|
January 1, 2023
|
Cash flows from operating
activities:
|
|
|
|
|
|
|
|
|
Net (loss)
income
|
|
$
(123,856)
|
|
$
4,430
|
|
$
(246,940)
|
|
$
47,275
|
Adjustments to
reconcile net (loss) income to net cash used in operating
activities:
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
15,448
|
|
8,030
|
|
52,442
|
|
30,291
|
Amortization of cloud
computing arrangements
|
|
1,454
|
|
1,790
|
|
5,705
|
|
5,339
|
Impairment
losses
|
|
5,631
|
|
—
|
|
5,631
|
|
—
|
Stock-based
compensation
|
|
5,064
|
|
7,378
|
|
26,203
|
|
26,434
|
Amortization of debt
issuance costs
|
|
416
|
|
1,108
|
|
1,948
|
|
3,664
|
Equity in losses
(earnings) of unconsolidated investees
|
|
36
|
|
(335)
|
|
(3,374)
|
|
(2,271)
|
Loss (gain) on equity
investments
|
|
—
|
|
6,255
|
|
10,805
|
|
(114,710)
|
Unrealized loss (gain)
on derivatives
|
|
6,455
|
|
11
|
|
5,125
|
|
(2,293)
|
Distributions from
equity investees
|
|
143
|
|
(13)
|
|
739
|
|
120
|
Net (gain) loss from
lease terminations
|
|
(780)
|
|
—
|
|
(780)
|
|
—
|
Deferred income
taxes
|
|
453
|
|
(1,314)
|
|
(83)
|
|
(13,973)
|
Loss (gain) on loan
receivables held for sale
|
|
991
|
|
—
|
|
1,352
|
|
—
|
Other, net
|
|
5,754
|
|
1,081
|
|
6,689
|
|
1,209
|
Changes in operating
assets and liabilities:
|
|
|
|
|
|
|
|
|
Accounts
receivable
|
|
28,380
|
|
5,833
|
|
(6,574)
|
|
(59,969)
|
Contract
assets
|
|
(8,492)
|
|
(13,856)
|
|
11,450
|
|
(14,174)
|
Inventories
|
|
63,575
|
|
(75,463)
|
|
34,822
|
|
(90,227)
|
Project
assets
|
|
—
|
|
—
|
|
3
|
|
295
|
Loan receivables held
for sale
|
|
9,984
|
|
—
|
|
(5,820)
|
|
—
|
Prepaid expenses and
other assets
|
|
(26,541)
|
|
4,301
|
|
(49,953)
|
|
(200,687)
|
Operating lease
right-of-use assets
|
|
2,959
|
|
2,833
|
|
11,357
|
|
11,445
|
Advances to
suppliers
|
|
5,828
|
|
(5,627)
|
|
11,400
|
|
(11,915)
|
Accounts payable and
other accrued liabilities
|
|
47,760
|
|
45,887
|
|
(22,572)
|
|
120,518
|
Contract
liabilities
|
|
(78,376)
|
|
(397)
|
|
10,569
|
|
97,900
|
Operating lease
liabilities
|
|
(2,329)
|
|
(3,340)
|
|
(11,860)
|
|
(15,168)
|
Net cash (used in)
provided by operating activities
|
|
(40,043)
|
|
(11,408)
|
|
(151,716)
|
|
(180,897)
|
Cash flows from investing
activities:
|
|
|
|
|
|
|
|
|
Purchases of property,
plant, and equipment
|
|
(10,929)
|
|
(11,849)
|
|
(50,438)
|
|
(48,807)
|
Investments in
software development costs
|
|
(1,810)
|
|
(1,465)
|
|
(6,459)
|
|
(5,690)
|
Proceeds from sale of
property, plant, and equipment
|
|
10
|
|
—
|
|
35
|
|
—
|
Cash paid for working
capital settlement related to C&I Solutions sale
|
|
—
|
|
—
|
|
(30,892)
|
|
—
|
Cash received from
C&I Solutions sale, net of de-consolidated cash
|
|
—
|
|
—
|
|
—
|
|
146,303
|
Cash paid for equity
investments under the Dealer
Accelerator Program and other
|
|
—
|
|
—
|
|
(7,500)
|
|
(30,920)
|
Proceeds from sale of
equity investment
|
|
—
|
|
—
|
|
121,675
|
|
440,108
|
Cash paid for
investments in unconsolidated investees
|
|
(1,501)
|
|
(2,431)
|
|
(10,571)
|
|
(8,173)
|
Distributions from
equity investees, in excess of cumulative earnings
|
|
—
|
|
13
|
|
149
|
|
150
|
Net cash (used in)
provided by investing activities
|
|
(14,230)
|
|
(15,732)
|
|
15,999
|
|
492,971
|
Cash flows from financing
activities:
|
|
|
|
|
|
|
|
|
Proceeds from bank
loans and other debt
|
|
50,000
|
|
21,482
|
|
543,440
|
|
146,211
|
Repayment of bank
loans and other debt
|
|
(12,465)
|
|
(15,439)
|
|
(279,947)
|
|
(182,340)
|
Distributions to
noncontrolling interests attributable to residential
projects
|
|
—
|
|
(9,201)
|
|
—
|
|
(9,201)
|
Repayment of
convertible debt
|
|
—
|
|
—
|
|
(424,991)
|
|
—
|
Proceeds from lease
terminations
|
|
780
|
|
—
|
|
780
|
|
—
|
Payments for financing
leases
|
|
(1,388)
|
|
(668)
|
|
(4,479)
|
|
(1,432)
|
Purchases of stock for
tax withholding obligations on vested restricted stock
|
|
(129)
|
|
(943)
|
|
(7,108)
|
|
(11,405)
|
Net cash provided by
(used in) financing activities
|
|
36,798
|
|
(4,769)
|
|
(172,305)
|
|
(58,167)
|
Effect of exchange rate
changes on cash, cash equivalents, and restricted cash
|
|
—
|
|
—
|
|
—
|
|
—
|
Net (decrease) increase
in cash, cash equivalents, and restricted cash
|
|
(17,475)
|
|
(31,909)
|
|
(308,022)
|
|
253,907
|
Cash, cash equivalents,
and restricted cash, beginning of period
|
|
115,959
|
|
438,415
|
|
406,506
|
|
152,599
|
Cash, cash equivalents,
and restricted cash, end of period
|
|
$
98,484
|
|
$
406,506
|
|
$
98,484
|
|
$
406,506
|
|
|
|
|
|
|
|
|
|
Reconciliation of cash, cash equivalents,
and
restricted cash to the consolidated balance
sheets,
including discontinued
operations:
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
87,424
|
|
$
377,026
|
|
$
87,424
|
|
$
377,026
|
Restricted cash and
cash equivalents, current portion
|
|
1,949
|
|
10,668
|
|
1,949
|
|
10,668
|
Restricted cash and
cash equivalents, net of current portion
|
|
9,111
|
|
18,812
|
|
9,111
|
|
18,812
|
Total cash, cash
equivalents, and restricted cash
|
|
$
98,484
|
|
$
406,506
|
|
$
98,484
|
|
$
406,506
|
|
|
|
|
|
|
|
|
|
Supplemental disclosure of non-cash
activities:
|
|
|
|
|
|
|
|
|
Property, plant, and
equipment acquisitions
funded by liabilities
(including financing leases)
|
|
$
3,874
|
|
$
3,298
|
|
$
18,830
|
|
$
12,380
|
Right-of-use assets
obtained in exchange for lease obligations
|
|
$
2,044
|
|
$
1,464
|
|
$
6,050
|
|
$
14,452
|
Net working capital
settlement related to C&I Solutions sale
|
|
$
—
|
|
$
—
|
|
$
—
|
|
$
7,005
|
Accrued contingent
consideration on equity method investment
|
|
$
2,857
|
|
$
—
|
|
$
2,857
|
|
$
—
|
Supplemental cash flow
disclosures:
|
|
|
|
|
|
|
|
|
Cash paid for
interest
|
|
$
8,124
|
|
$
741
|
|
$
33,385
|
|
$
21,064
|
Cash paid for income
taxes
|
|
$
297
|
|
$
2,250
|
|
$
1,739
|
|
$
7,437
|
Cash received for
interest
|
|
$
270
|
|
$
1,474
|
|
$
2,739
|
|
$
1,474
|
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
- 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
GAAP, mark-to-market gains and losses due to changes in stock
prices for these securities are recorded in earnings while under
International Financial Reporting Standards ("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.
- 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 the 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 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
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
|
|
TWELVE MONTHS ENDED
|
|
|
December 31, 2023
|
|
January 1, 2023
|
|
December 31, 2023
|
|
January 1, 2023
|
GAAP revenue
|
|
$
356,905
|
|
$
497,968
|
|
$
1,685,222
|
|
$
1,741,943
|
Legacy power plant and
development projects1
|
|
—
|
|
—
|
|
—
|
|
7,239
|
Mark to market loss
(gain) on interest rate swaps
|
|
4,345
|
|
—
|
|
4,435
|
|
—
|
Non-GAAP
revenue
|
|
$
361,250
|
|
$
497,968
|
|
$
1,689,657
|
|
$
1,749,182
|
|
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 (Loss) / Margin:
|
|
|
THREE MONTHS ENDED
|
|
TWELVE MONTHS ENDED
|
|
|
December 31,
2023
|
|
January 1,
2023
|
|
December 31,
2023
|
|
January 1,
2023
|
GAAP gross profit from
continuing operations
|
|
$
10,979
|
|
$
113,764
|
|
$
238,455
|
|
$
403,001
|
Legacy power plant and
development projects1
|
|
—
|
|
—
|
|
—
|
|
7,239
|
(Gain) loss on sale
and impairment of residential lease assets
|
|
(266)
|
|
(268)
|
|
(1,066)
|
|
(1,101)
|
Mark to market loss
(gain) on interest rate swaps
|
|
4,345
|
|
—
|
|
4,435
|
|
—
|
Stock-based
compensation expense
|
|
1,217
|
|
1,257
|
|
5,258
|
|
4,689
|
Litigation
|
|
—
|
|
—
|
|
62
|
|
—
|
Transaction-related
costs
|
|
—
|
|
—
|
|
—
|
|
162
|
Business
reorganization costs
|
|
—
|
|
—
|
|
—
|
|
11
|
Non-GAAP gross
profit2
|
|
$
16,275
|
|
$
114,753
|
|
$
247,144
|
|
$
414,001
|
|
|
|
|
|
|
|
|
|
GAAP gross margin
(%)
|
|
3.1 %
|
|
22.8 %
|
|
14.1 %
|
|
23.1 %
|
Non-GAAP gross margin
(%)
|
|
4.5 %
|
|
23.0 %
|
|
14.6 %
|
|
23.7 %
|
|
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
|
|
TWELVE MONTHS ENDED
|
|
|
December 31,
2023
|
|
January 1,
2023
|
|
December 31,
2023
|
|
January 1,
2023
|
GAAP net (loss) income
from continuing operations attributable to stockholders
|
|
$
(115,610)
|
|
$
5,059
|
|
$
(227,101)
|
|
$
93,688
|
Mark-to-market (gain)
loss on equity investments
|
|
(374)
|
|
6,255
|
|
8,254
|
|
(117,038)
|
Legacy power plant and
development projects1
|
|
—
|
|
—
|
|
—
|
|
7,239
|
(Gain) loss on sale
and impairment of residential lease assets
|
|
(266)
|
|
(268)
|
|
(1,066)
|
|
(1,101)
|
Impairment of
property, plant, and equipment
|
|
957
|
|
—
|
|
957
|
|
—
|
Litigation
|
|
5,606
|
|
1,242
|
|
6,025
|
|
4,813
|
Stock-based
compensation expense
|
|
5,064
|
|
7,372
|
|
26,203
|
|
26,305
|
Amortization of
intangible assets and software
|
|
2,844
|
|
2,847
|
|
11,410
|
|
10,554
|
Transaction-related
costs
|
|
76
|
|
44
|
|
918
|
|
1,601
|
Mark to market loss
(gain) on interest rate swaps
|
|
6,455
|
|
11
|
|
5,125
|
|
(2,293)
|
Business
reorganization costs
|
|
—
|
|
—
|
|
—
|
|
4,526
|
Restructuring charges
(credits)
|
|
6,799
|
|
1
|
|
12,679
|
|
(452)
|
Acquisition-related
costs
|
|
(359)
|
|
114
|
|
(556)
|
|
11,570
|
Tax effect
|
|
(1,110)
|
|
(2,831)
|
|
(558)
|
|
(8,951)
|
Equity loss (income)
from unconsolidated investees
|
|
410
|
|
(335)
|
|
(823)
|
|
(471)
|
Non-GAAP net (loss)
income attributable to stockholders2
|
|
$
(89,508)
|
|
$
19,511
|
|
$
(158,533)
|
|
$
29,990
|
|
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
|
|
TWELVE MONTHS ENDED
|
|
|
December 31,
2023
|
|
January 1,
2023
|
|
December 31,
2023
|
|
January 1,
2023
|
Net (loss) income per
diluted share
|
|
|
|
|
|
|
|
|
Numerator:
|
|
|
|
|
|
|
|
|
GAAP net (loss) income
from continuing operations attributable to
stockholders1
|
|
$
(115,610)
|
|
$
5,059
|
|
$
(227,101)
|
|
$
93,688
|
|
|
|
|
|
|
|
|
|
Non-GAAP net (loss)
income from continuing operations attributable to
stockholders1, 2, 3
|
|
$
(89,508)
|
|
$
1,435
|
|
$
(158,533)
|
|
$
29,990
|
|
|
|
|
|
|
|
|
|
Denominator:
|
|
|
|
|
|
|
|
|
GAAP weighted-average
shares
|
|
175,354
|
|
174,231
|
|
175,041
|
|
173,919
|
Effect of dilutive
securities:
|
|
|
|
|
|
|
|
|
Restricted stock
units
|
|
—
|
|
1,287
|
|
—
|
|
684
|
GAAP dilutive
weighted-average common shares:
|
|
175,354
|
|
175,518
|
|
175,041
|
|
174,603
|
|
|
|
|
|
|
|
|
|
Non-GAAP
weighted-average shares
|
|
175,354
|
|
174,231
|
|
175,041
|
|
173,919
|
Effect of dilutive
securities:
|
|
|
|
|
|
|
|
|
Restricted stock
units
|
|
—
|
|
1,287
|
|
—
|
|
684
|
Non-GAAP dilutive
weighted-average common shares1
|
|
175,354
|
|
175,518
|
|
175,041
|
|
174,603
|
|
|
|
|
|
|
|
|
|
GAAP dilutive net
(loss) income per share - continuing operations
|
|
$
(0.66)
|
|
$
0.03
|
|
$
(1.30)
|
|
$
0.54
|
Non-GAAP dilutive net
(loss) income per share - continuing operations2,
3
|
|
$
(0.51)
|
|
$
0.11
|
|
$
(0.91)
|
|
$
0.17
|
|
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
|
|
TWELVE MONTHS ENDED
|
|
|
December 31,
2023
|
|
January 1,
2023
|
|
December 31,
2023
|
|
January 1,
2023
|
GAAP net (loss) income
from continuing operations attributable to stockholders
|
|
$
(115,610)
|
|
$
5,059
|
|
$
(227,101)
|
|
$
93,688
|
Mark-to-market loss
(gain) on equity investments
|
|
(374)
|
|
6,255
|
|
8,254
|
|
(117,038)
|
Legacy power plant and
development projects1
|
|
—
|
|
—
|
|
—
|
|
7,239
|
(Gain) loss on sale
and impairment of residential lease assets
|
|
(266)
|
|
(268)
|
|
(1,066)
|
|
(1,101)
|
Impairment of
property, plant, and equipment
|
|
957
|
|
—
|
|
957
|
|
—
|
Litigation
|
|
5,606
|
|
1,242
|
|
6,025
|
|
4,813
|
Stock-based
compensation expense
|
|
5,064
|
|
7,372
|
|
26,203
|
|
26,305
|
Amortization of
intangible assets and software
|
|
2,844
|
|
2,847
|
|
11,410
|
|
10,554
|
Transaction-related
costs
|
|
76
|
|
44
|
|
918
|
|
1,601
|
Mark to market loss
(gain) on interest rate swaps
|
|
6,455
|
|
11
|
|
5,125
|
|
(2,293)
|
Business
reorganization costs
|
|
—
|
|
—
|
|
—
|
|
4,526
|
Restructuring charges
(credits)
|
|
6,799
|
|
1
|
|
12,679
|
|
(452)
|
Acquisition-related
costs
|
|
(359)
|
|
114
|
|
(556)
|
|
11,570
|
Equity loss (income)
from unconsolidated investees
|
|
410
|
|
(335)
|
|
(823)
|
|
(471)
|
Cash interest expense,
net of interest income
|
|
7,234
|
|
3,406
|
|
25,522
|
|
20,493
|
(Benefit from)
provision for income taxes
|
|
(623)
|
|
(1,903)
|
|
946
|
|
(8,383)
|
Depreciation
|
|
14,215
|
|
6,726
|
|
47,262
|
|
18,983
|
Adjusted
EBITDA2
|
|
$
(67,572)
|
|
$
30,571
|
|
$
(84,245)
|
|
$
70,034
|
|
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.
|
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SOURCE SunPower Corp.