SPWR
$5.92
Sunpower
($.37)
(5.88%)
Earnings Details
4th Quarter December 2018
Wednesday, February 13, 2019 4:05:00 PM
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Summary

Sunpower Beats but Guides Lower

Sunpower (SPWR) reported a 4th Quarter December 2018 loss of $0.25 per share on revenue of $456.8 million. The consensus estimate was a loss of $0.38 per share on revenue of $586.5 million. The Earnings Whisper number was for a loss of $0.40 per share. Revenue fell 30.6% compared to the same quarter a year ago.

The company said it expects first quarter revenue of $350.0 million to $390.0 million and 2019 revenue of $1.90 billion to $2.00 billion. The current consensus estimate is revenue of $425.0 million for the quarter ending March 31, 2019 and revenue of $2.33 billion for the year ending December 31, 2019.

SunPower Corp is engaged in designing, manufacturing, installation and ongoing maintenance and monitoring of solar system.

Results
Reported Earnings
($0.25)
Earnings Whisper
($0.40)
Consensus Estimate
($0.38)
Reported Revenue
$456.8 Mil
Revenue Estimate
$586.5 Mil
Growth
Earnings Growth
Revenue Growth
Power Rating
Grade
Earnings Release

SunPower Reports Fourth Quarter and Fiscal Year 2018 Results

SAN JOSE, Calif., Feb. 13, 2019 /PRNewswire/ -- SunPower Corp. (NASDAQ:SPWR) today announced financial results for its fourth quarter ended December 30, 2018.

SunPower Logo. (PRNewsFoto/SunPower Corp.)

Fourth Quarter Highlights

  • Solid financial performance: strong cash generation quarter
  • Significantly delevered balance sheet: more than 50 percent sequential net debt reduction
  • Completed previously announced business re-segmentation
    • SunPower Energy Services (SPES)
      • North American residential annual deployments increased 15 percent
      • Record commercial bookings quarter: 80 percent of 2019 forecast in backlog
    • SunPower Technologies (SPT)
      • Initial production of company's Next Generation Technology (NGT) panels
      • Expanding NGT capacity: initiated process for second manufacturing line

($ Millions, except percentages and per-share data)

4th Quarter 2018

3rd Quarter 2018

4th Quarter 20173

FY 2018

FY 20173

GAAP revenue

$456.8

$428.3

$651.1

$1,726.1

$1,794.0

GAAP gross margin

(1.7%)

2.3%

(2.0%)

(17.2%)4

(1.0%)

GAAP net loss

$(158.2)

$(89.8)

$(572.7)

$(811.1)4

$(929.9)

GAAP net loss per diluted share

$(1.12)

$(0.64)

$(4.1)

$(5.76)4

$(6.67)

Non-GAAP revenue1

$525.4

$443.4

$824.0

$1,814.9

$2,128.6

Non-GAAP gross margin1,2

6.9%

4.7%

11.9%

7.5%

11.1%

Non-GAAP net income (loss)1,2

$(30.3)

$(40.9)

$35.8

$(101.4)

$(34.4)

Non-GAAP net income (loss) per diluted share1,2

$(0.21)

$(0.29)

$0.25

$(0.72)

$(0.25)

Adjusted EBITDA1,2

$13.6

$6.7

$100.3

$111.2

$189.7

Net debt

$589.6

$1,254.4

$1,169.8

$589.6

$1,169.8

1Information 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.

2Excludes polysilicon costs related to its above market polysilicon contracts

3The company adopted the new revenue recognition standard effective January 1, 2018. The prior periods presented here have been restated to reflect adoption of the new standard.

4Includes impairment charges of approximately $369.2 million for legacy manufacturing assets of which $355.1 million is recorded in GAAP gross margin in second quarter 2018.


"I'm pleased we were able to post solid financial performance for the quarter while achieving a number of strategic milestones including re-segmenting our business structure to improve transparency and accountability, the initial production of our NGT cell and panel technology, as well as further delevering our balance sheet through the successful deconsolidation of our residential lease portfolio," said Tom Werner, SunPower CEO and chairman of the board.

SunPower Energy Services (SPES) – North American Residential and Commercial Businesses

"We executed well in our North American distributed generation (DG) business as demand remained strong in the fourth quarter. In particular, our U.S. residential business saw annual deployment growth of more than 15 percent. We saw increased demand for our complete residential Equinox solution , further traction for our loan product, and expanded our leadership position in the new homes channel with partnerships with 17 of the top 20 U.S. new home builders. Finally, we continue to see strong interest in our residential storage and services offerings and remain on plan to launch our Equinox residential storage solution this year. 

"In Commercial, we remain the market share leader. For the quarter, we posted record bookings from both new and repeat customers including Cabot and Walmart. With the addition of these orders, we now have material revenue and volume visibility for the second half of 2019 with more than 80 percent of our 2019 commercial forecast already in backlog.

"We also continue to see significant interest in our Helix solar-plus-storage solution with attach rates of 35 percent. With the continuing success of the rollout of our Helix storage solution, we see significant opportunity in bringing this industry leading technology to our commercial installed base of more than 1.3 gigawatts (GW).

SunPower Technologies (SPT) – Manufacturing, International DG / Power Plant panel businesses

"First, we were pleased to appoint Jeff Waters as our new SPT business unit CEO during the quarter. Jeff brings a wealth of technology, operational and international business expertise to our team and we look forward to working together as he leads our manufacturing, research and development (R&D) and international downstream activities.

"We made significant progress on NGT as we started initial customer shipments for this industry leading technology in the fourth quarter of 2018. Additionally, we have already started the process to ramp our second manufacturing line which will more than double our NGT name plate capacity to approximately 250 MW by the end of 2019. Also, we recently began production of our P-Series technology at our manufacturing facility in Oregon and expect to ship up to 150 MW of P-Series from this facility this year, expanding our DG product offering in the U.S.

"SPT demand also remained solid in the quarter as we saw continued strength in our EMEA DG business and increased bookings in our international power plant supply agreement business. With these orders, we now have more than 750 MW of our 2019 international business in backlog. 

Business Segmentation

"Finally, we materially completed our corporate transformation efforts during the quarter. As we have mentioned, over the last year, we have successfully simplified our business model, delevered our balance sheet and reduced operating expenses. We focused our investments in those areas that we believe offer the best opportunities for growth including our industry leading NGT cell and panel technology, solar-plus-storage solutions for our DG business, our digital platform to improve customer service and satisfaction, as well our energy services offerings," Werner concluded. 

"Strong execution enabled us to achieve our strategic initiatives for the quarter," said Manavendra Sial, SunPower chief financial officer. "With the sale and deconsolidation of our residential lease portfolio during the quarter, we have simplified our financial statements and reduced our net debt by more than 50 percent to less than $600 million by the end of the year. Additionally, we improved our cash position and prudently managed our operating expenses while further investing in our growth initiatives. With the completion of our strategic transformation, DG-focused strategy and commitment to technological innovation, we are well positioned for sustainable profitability in 2019." 

Fourth quarter fiscal year 2018 non-GAAP results exclude net adjustments that, in the aggregate, improved non-GAAP earnings by $127.9 million, including $81.3 million related to impairment and sale of residential lease assets, $37.2 million related to cost of above-market polysilicon, $11.0 million related to sale-leaseback transactions, $6.4 million related to stock-based compensation expense, $1.9 million related to intangibles, $1.3 million related to business reorganization costs and, partially offset by $6.6 million related to tax effect, $3.1 million acquisition-related and other costs, $1.1 million related to restructuring expense, and $0.5 million related to utility and power plant projects.

Financial Outlook

The company expects financial performance to improve on a quarterly basis throughout fiscal year 2019 with performance weighted towards the second half of the year given its record commercial bookings in the fourth quarter of 2018 as well as normal seasonality in its residential business. The company also expects fiscal year 2019 adjusted EBITDA to increase approximately 60 percent on a normalized basis adjusting for non-controlling interest due to the sale of its residential lease portfolio, as well as the impact of Section 201 tariffs paid during the year, both of which will not occur in 2019. The company believes that the change in its leasing business structure will improve lease economics starting in 2019. The company will provide additional details on its 2019 financial guidance at its Capital Markets Day on March 27, 2019

Specifically, the company's first quarter fiscal year 2019 GAAP and non-GAAP guidance is as follows:  On a GAAP basis, revenue of $290 million to $330 million, gross margin of (3) percent to 0 percent and a net loss of $70 million to $50 million. On a non-GAAP basis, the company expects revenue of $350 million to $390 million, gross margin of 3 percent to 5 percent, Adjusted EBITDA of $(40) million to $(20) million and MW deployed in the range of 360 MW to 400 MW.  

The company's fiscal year 2019 GAAP and non-GAAP guidance is as follows:  revenue of $1.8 billion to $1.9 billion on a GAAP basis and $1.9 billion to $2.0 billion on a non-GAAP basis, GW deployed in the range of 1.9 GW to 2.1 GW, non-GAAP operational expenses of less than $280 million, capital expenditures of approximately $75 million and Adjusted EBITDA of $80 million to $110 million.   

Capital Markets Day

SunPower will discuss its strategic outlook as well as provide additional details related to its fiscal year 2019 financial performance at its Capital Markets Day to be held on March 27, 2019 in New York City starting at 9:00 a.m. Eastern Time. Please note that the entire event will be webcast and relevant materials will be posted to the company's website prior to the event. To register for and listen to the webcast, investors are encouraged to visit the company's Events and Presentations section of the SunPower Investor Relations page at http://investors.sunpower.com/events.cfm prior to the event.

The company will also host a conference call for investors this afternoon to discuss its fourth quarter 2018 performance at 1:30 p.m. Pacific Time. The call will be webcast and can be accessed from SunPower's website at http://investors.sunpower.com/events.cfm.

This press release contains both GAAP and non-GAAP financial information. Non-GAAP figures are reconciled to the closest GAAP equivalent categories in the financial attachment of this press release. Please note that the company has posted supplemental information and slides related to its fourth quarter 2018 performance on the Events and Presentations section of SunPower's Investor Relations page at http://investors.sunpower.com/events.cfm. The capacity of power plants in this release is described in approximate MW on a direct current (dc) basis unless otherwise noted.

About SunPower

As one of the world's most innovative and sustainable energy companies, SunPower Corporation (NASDAQ:SPWR) provides a diverse group of customers with complete solar solutions and services. Residential customers, businesses, governments, schools and utilities around the globe rely on SunPower's more than 30 years of proven experience. From the first flip of the switch, SunPower delivers maximum value and superb performance throughout the long life of every solar system. Headquartered in Silicon Valley, SunPower has dedicated, customer-focused employees in Africa, Asia, Australia, Europe, North and South America. For more information about how SunPower is changing the way our world is powered, 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) our plans and expectations regarding manufacturing expansion, and production goals and ramps, including the timing of our ramp of NGT production and planned product shipments, and plans for P-Series manufacturing and product shipments from our facility in Oregon; (b) the impact of our corporate transformation initiatives, including efforts to delever our balance sheet, simplify our financial statements, and re-segment our business structure, on our transparency, profitability, financial performance, and results of operations; (c) our expectations and plans regarding demand, revenue and volume, market opportunity, product focus and adoption, and market share growth; (d) our expected areas of focus, including with respect to specific products and offerings and lines of business; (e) our expectations regarding our future financial performance, including with respect to EBITDA, margins, profitability, and tariff impact; (f) predictions regarding trends and seasonality in our overall results and those of our business lines; (g) our positioning for future success and profitability and long-term competitiveness, and our ability to achieve our financial and strategic goals; (h) our plans for a Capital Markets Day and the topics we expect to discuss; (i) our first quarter fiscal 2019 guidance, including GAAP revenue, gross margin, and net loss, as well as non-GAAP revenue, gross margin, Adjusted EBITDA, and MW deployed, and related assumptions; and (j) fiscal year 2019 guidance, including expected quarterly performance improvement and weighting, GAAP revenue, gross margin, and net loss, as well as non-GAAP GW deployed, Adjusted EBITDA, non-GAAP revenue, gross margin, Adjusted EBITDA and MW deployed, 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) competition in the solar and general energy industry and downward pressure on selling prices and wholesale energy pricing; (2) our liquidity, substantial indebtedness, and ability to obtain additional financing for our projects and customers; (3) changes in public policy, including the imposition and applicability of tariffs; (4) regulatory changes and the availability of economic incentives promoting use of solar energy; (5) challenges inherent in constructing certain of our large projects, including regulatory hurdles and other difficulties that may arise; (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) fluctuations in our operating results; (8) appropriately sizing our manufacturing capacity and containing manufacturing and logistics difficulties that could arise; (9) challenges managing our acquisitions, joint ventures and partnerships, including our ability to successfully manage acquired assets and supplier relationships; (10) challenges in executing transactions key to our strategic plans; and (11) our ability to successfully implement actions to complete our restructuring plan and associated initiatives, including plans to streamline our business and focus.  A detailed discussion of these factors and other risks that affect our business is included in filings we make with the Securities and Exchange Commission (SEC) from time to time, including our most recent reports on Form 10-K and Form 10-Q, particularly under the heading "Risk Factors."  Copies of these filings are available online from the SEC or on the SEC Filings section of our Investor Relations website at investors.sunpower.com. All forward-looking statements in this press release are based on information currently available to us, and we assume no obligation to update these forward-looking statements in light of new information or future events.

 

©2019 SunPower Corporation. All rights reserved. SUNPOWER, the SUNPOWER logo, EQUINOX and HELIX are trademarks or registered trademarks of SunPower Corporation in the U.S. and other countries as well.

 

 

SUNPOWER CORPORATION

 CONSOLIDATED BALANCE SHEETS 

 (In thousands) 

 (Unaudited) 






Dec. 30,


Dec. 31,


2018


2017

Assets




Current assets:




Cash and cash equivalents

$            309,407


$            435,097

Restricted cash and cash equivalents, current portion

41,762


43,709

Accounts receivable, net

175,605


204,966

Contract assets

58,994


35,074

Inventories

308,146


352,829

Advances to suppliers, current portion

37,878


30,689

Project assets - plants and land, current portion

10,796


103,063

Prepaid expenses and other current assets

131,183


146,209

Total current assets

1,073,771


1,351,636





Restricted cash and cash equivalents, net of current portion

12,594


65,531

Restricted long-term marketable securities

5,955


6,238

Property, plant and equipment, net

839,871


1,147,845

Solar power systems leased and to be leased, net

92,557


369,218

Advances to suppliers, net of current portion

133,694


185,299

Long-term financing receivables, net

19,592


330,672

Other intangible assets, net

12,582


25,519

Other long-term assets

162,033


546,698

Total assets

$         2,352,649


$         4,028,656





Liabilities and Equity




Current liabilities:




Accounts payable

$            325,550


$            406,902

Accrued liabilities

235,252


231,771

Contract liabilities, current portion

104,130


101,723

Short-term debt

40,074


58,131

Convertible debt, current portion

-


299,685

Total current liabilities

705,006


1,098,212





Long-term debt

40,528


430,634

Convertible debt, net of current portion

818,356


816,454

Contract liabilities, net of current portion

99,509


133,390

Other long-term liabilities

839,136


842,342

Total liabilities

2,502,535


3,321,032





Redeemable noncontrolling interests in subsidiaries

-


15,236





Equity:




Preferred stock

-


-

Common stock

141


140

Additional paid-in capital

2,463,370


2,442,513

Accumulated deficit

(2,480,988)


(1,669,897)

Accumulated other comprehensive loss

(4,150)


(3,008)

Treasury stock, at cost

(187,069)


(181,539)

Total stockholders' equity

(208,696)


588,209

Noncontrolling interests in subsidiaries

58,810


104,179

Total equity

(149,886)


692,388

Total liabilities and equity

$         2,352,649


$         4,028,656





 

SUNPOWER CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share data)

(Unaudited)















THREE MONTHS ENDED


TWELVE MONTHS ENDED



Dec. 30,


Sep. 30,


Dec. 31,



Dec. 30,


Dec. 31,



2018


2018


2017



2018


2017













Revenue:












   SunPower Energy Services revenue


$           265,427


$           263,576


$           259,260



$         1,045,614


$        910,206

   SunPower Technologies revenue


277,256


289,630


541,415



1,069,010


1,350,790

Intersegment eliminations


(85,846)


(124,943)


(149,541)



(388,539)


(466,949)

Total revenue


456,837


428,263


651,134



1,726,085


1,794,047

Cost of revenue:












   SunPower Energy Services cost of revenue


245,301


217,196


249,688



889,410


820,628

   SunPower Technologies cost of revenue


296,872


307,527


553,222



1,496,909


1,430,539

Intersegment eliminations


(77,765)


(106,337)


(138,999)



(363,153)


(438,475)

Total cost of revenue


464,408


418,386


663,911



2,023,166


1,812,692

Gross profit (loss)


(7,571)


9,877


(12,777)



(297,081)


(18,645)

Operating expenses:












Research and development


15,481


15,898


20,400



81,705


82,247

Sales, general and administrative


53,839


76,069


72,765



260,111


278,645

Restructuring charges


(1,107)


3,923


2,769



17,497


21,045

Impairment and sale of residential lease assets


81,086


53,537


624,335



251,984


624,335

Gain on business divestitures


-


(59,347)


-



(59,347)


-

Total operating expenses


149,299


90,080


720,269



551,950


1,006,272

Operating loss


(156,870)


(80,203)


(733,046)



(849,031)


(1,024,917)

Other income (expense), net:












Interest income


777


1,087


139



3,057


2,100

Interest expense


(30,214)


(25,973)


(24,851)



(108,011)


(90,288)

Other, net


6,539


(3,642)


1,468



55,314


(87,645)

Other expense, net


(22,898)


(28,528)


(23,244)



(49,640)


(175,833)

Loss before income taxes and equity in earnings (losses) of unconsolidated investees


(179,768)


(108,731)


(756,290)



(898,671)


(1,200,750)

Benefit from (provision for) income taxes


8,379


(3,680)


2,870



(1,010)


3,944

Equity in earnings (losses) of unconsolidated investees


(757)


(1,500)


(146)



(17,815)


25,938

Net loss  


(172,146)


(113,911)


(753,566)



(917,496)


(1,170,868)

  Net loss attributable to noncontrolling interests and redeemable noncontrolling interests


13,972


24,085


180,915



106,405


241,747

Net loss attributable to stockholders


$        (158,174)


$           (89,826)


$        (572,651)



$          (811,091)


$      (929,121)

Net loss per share attributable to stockholders:












- Basic


$               (1.12)


$               (0.64)


$               (4.10)



$                 (5.76)


$             (6.67)

- Diluted


$               (1.12)


$               (0.64)


$               (4.10)



$                 (5.76)


$             (6.67)













Weighted-average shares:












- Basic


141,136


141,027


139,613



140,825


139,370

- Diluted


141,136


141,027


139,613



140,825


139,370













 

SUNPOWER CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)












THREE MONTHS ENDED


TWELVE MONTHS ENDED


Dec. 30,


Sep. 30,


Dec. 31,


Dec. 30,


Dec. 31,


2018


2018


2017


2018


2017











Cash flows from operating activities:










Net loss

$         (172,146)


$         (113,911)


$         (753,566)


$         (917,497)


$     (1,170,868)

Adjustments to reconcile net loss to net cash used in operating activities:










Depreciation and amortization

24,060


24,743


54,292


127,204


185,283

Stock-based compensation

6,266


6,390


9,294


26,353


34,674

Non-cash interest expense

3,213


3,871


5,837


15,346


18,390

Dividend from equity method investees

-


-


7,859


3,947


30,091

Equity in (earnings) losses of unconsolidated investees

756


1,501


145


17,815


(25,939)

Gain on sale of equity investments, net

2,212


(543)


(5,346)


(48,356)


(5,346)

Gain on sale of cost method investment

(5,840)


-


-


(5,840)


-

Gain on business divestitures

-


(59,347)


-


(59,347)


-

Deferred income taxes

(9,868)


1,575


(8,541)


(6,862)


(6,966)

Unrealized loss on equity investments with readily determinable fair value

150


6,225


-


6,375


-

Impairment of equity method investment

-


-


7,993


-


89,564

Impairment of property, plant and equipment

-


-


-


369,168



Loss on sale and impairment of residential lease assets

81,086


53,537


624,335


251,984


624,335

Other, net

(1,059)


(3,294)


(3,881)


(6,796)


1,299

Changes in operating assets and liabilities:










Accounts receivable

18,916


(15,057)


(40,469)


(174)


(1,191)

Contract assets

(5,495)


(2,639)


7,104


(43,509)


10,660

Inventories

64,617


(27,942)


28,776


(39,174)


(38,236)

Project assets

48,652


(20,226)


71,536


39,512


2,393

Prepaid expenses and other assets

(17,161)


5,616


14,103


22,763


110,530

Long-term financing receivables, net

(31,006)


(42,775)


(32,308)


(182,937)


(123,674)

Advances to suppliers

15,236


14,059


16,075


44,417


68,767

Accounts payable and other accrued liabilities

(58,230)


10,387


4,281


(127,286)


(216,349)

Contract liabilities

9,328


(3,904)


40,373


(30,495)


145,171

Net cash used in operating activities

(26,313)


(161,734)


47,892


(543,389)


(267,412)

Cash flows from investing activities:










Purchases of property, plant and equipment

(7,198)


(12,346)


(12,177)


(44,906)


(69,791)

Cash paid for solar power systems, leased and to be leased

(12,953)


(16,971)


(22,007)


(68,612)


(86,539)

Cash paid for solar power systems

(37,468)


(904)


(88,306)


(41,808)


(126,548)

Cash paid for acquisitions, net of cash acquired

(17,000)


-


-


(17,000)


-

Purchases of marketable securities

-


-


-


-


(1,306)

Dividend from equity method investees

-


-


882


12,952


3,773

Proceeds from business divestiture

10,000


13,257


-


23,257


-

Proceeds from sale of cost method investment

33,402


-


-


33,402


-

Proceeds from sale of equity method investments

2,540


-


5,954


420,306


5,954

Proceeds from sale of equity interest in residential lease portfolio, net of transaction costs

(28,004)


-


-


(28,004)


-

Cash paid for investments in unconsolidated investees

(626)


-


(2,680)


(14,687)


(18,627)

Net cash provided by (used in) investing activities

(57,307)


(16,964)


(118,334)


274,900


(293,084)

Cash flows from financing activities:










Proceeds from bank loans and other debt

60,199


51,018


56,104


227,676


339,253

Repayment of 0.75% debentures due 2018, bank loans and other debt

(59,023)


(56,702)


(54,755)


(535,252)


(358,317)

Proceeds from issuance of non-recourse residential financing, net of issuance costs

5,079


120,099


6,435


192,287


89,612

Repayment of non-recourse residential financing

(2,427)


(5,032)


(2,133)


(17,358)


(6,888)

Contributions from noncontrolling interests and redeemable noncontrolling interests attributable to residential projects

43,526


34,388


55,591


151,204


196,628

Distributions to noncontrolling interests and redeemable noncontrolling interests attributable to residential projects

(2,742)


(6,594)


(5,200)


(21,918)


(18,228)

Proceeds from issuance of non-recourse power plant and commercial financing, net of issuance costs

75,754


27,980


209,222


126,020


527,897

Repayment of non-recourse power plant and commercial financing

(26,383)


(221)


(27,463)


(31,282)


(176,069)

Contributions from noncontrolling interests attributable to power plant and commercial projects

-


-


-


-


800

Purchases of stock for tax withholding obligations on vested restricted stock

(281)


(349)


(366)


(5,530)


(4,756)

Net cash (used in) provided by financing activities

93,702


164,587


237,435


85,847


589,932

Effect of exchange rate changes on cash, cash equivalents, restricted cash and restricted cash equivalents

1,296


1,896


(609)


2,068


689

Net increase (decrease) in cash, cash equivalents, restricted cash and restricted cash equivalents

11,378


(12,215)


166,384


(180,574)


30,125

Cash, cash equivalents, restricted cash and restricted cash equivalents, beginning of period

352,385


364,600


377,953


544,337


514,212

Cash, cash equivalents, restricted cash and restricted cash equivalents, end of period

$           363,763


$           352,385


$           544,337


$           363,763


$            544,337

Non-cash transactions:










Assignment of residential lease receivables to third parties

$                       -


$                       -


 

$                       -


$                       -


$                  129

Stock consideration received due to business divestiture

 

$                       -


$             42,600


$                       -


$             42,600


$                       -

Costs of solar power systems, leased and to be leased, sourced from existing inventory

$               5,975


$               8,769


$             15,296


$             36,384


$             57,688

Costs of solar power systems, leased and to be leased, funded by liabilities

$               3,631


$               4,903


$               5,527


$               3,631


$               5,527

Costs of solar power systems under sale-leaseback financing arrangements, sourced from project assets 

$             54,967


$             14,628


$             44,490


$             87,307


$           110,375

Property, plant and equipment acquisitions funded by liabilities

$               8,214


$             11,453


$             15,706


$             46,863


$             15,706

Contractual obligations satisfied with inventory

$               7,924


$               8,035


$             14,820


$             56,840


$             34,675

Accounts receivable due to business divestiture

$                       -


$             10,000


$                       -


$                       -


$                       -

Acquisition of noncontrolling interests funded by Mezzanine Loan proceeds

$                       -


$             12,400


$                       -


$             12,400


$                       -

Assumption of debt by buyer upon sale of equity interest

$                       -


$                       -


$                       -


$             27,321


$                       -

Assumption of mezzanine loan by SunStrong in connection with sale of residential lease assets

$           106,958


$                       -


$                       -


$           106,958


$                       -

Assumption of back leverage loans by SunStrong in connection with sale of residential lease assets

$           454,630


$                       -


$                       -


$           454,630


$                       -

Acquisition funded by liabilities

$               9,000


$                       -


$                       -


$               9,000


$                       -

Retained interest in SunStrong lease portfolio

$               9,750


$                       -


$                       -


$               9,750


$                       -

Net reclassification of cash proceeds offset by project assets in connection with the deconsolidation of assets sold to the 8point3 Group

$                       -


$                       -


$                       -


$                       -


$               4,918

Assumption of debt by buyer upon sale of projects

$                       -


$                       -


$           196,104


$                       -


$           196,104

Receivables in connection with sale of residential lease portfolio

$             12,510


$                       -


$                       -


$             12,510


$                       -











Supplemental information:










Cash paid for interest, net of amount capitalized

$             54,996


$                       -


$                       -


 

$             54,996


$             59,885

Cash paid for income taxes

$               6,710


$                       -


$                       -


$               6,710


$             12,795

 

Use of Non-GAAP Financial Measures

To supplement its consolidated financial results presented in accordance with GAAP, the company uses non-GAAP measures that are adjusted for certain items from the most directly comparable GAAP measures, as described below. The specific non-GAAP measures listed below are: revenue; gross profit/margin; net income (loss); net income (loss) per diluted share; and adjusted earnings before interest, taxes, depreciation and amortization ("Adjusted EBITDA"). Management believes that each of these non-GAAP measures is 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 provides 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 analyses. 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; the non-GAAP measures 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.

Non-GAAP revenue includes adjustments relating to 8point3, legacy utility and power plant projects, sale-leaseback transactions and unrealized loss on equity investments, each as described below. In addition to those same adjustments, Non-GAAP gross profit/margin includes adjustments relating to impairment of property, plant and equipment, impairment and sale of residential lease assets, cost of above-market polysilicon, stock-based compensation, amortization of intangible assets, depreciation of idle equipment, and non-cash interest expense, each as described below. In addition to those same adjustments, non-GAAP net income (loss) and non-GAAP net income (loss) per diluted share are adjusted for adjustments relating to gain on business divestiture, acquisition-related and other costs, business reorganization costs, restructuring expense, IPO-related costs, the tax effect of these non-GAAP adjustments, and other items, each as described below. In addition to the same adjustments as non-GAAP net income (loss), Adjusted EBITDA includes adjustments relating to cash interest expense (net of interest income), provision for (benefit from) income taxes, and depreciation.

Non-GAAP Adjustments Based on International Financial Reporting Standards ("IFRS")

The company's non-GAAP results include adjustments to recognize revenue and profit under IFRS that are consistent with the adjustments made in connection with the company's reporting process as part of its status as a consolidated subsidiary of Total S.A., a foreign public registrant which 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 revenue and profit generation performance, and assists in aligning the perspectives of our management and noncontrolling shareholders with those of Total S.A., our controlling shareholder.

  • Intersegment Gross Margin. To increase efficiencies and the competitive advantage of our technologies, SunPower Technologies sells solar modules to SunPower Energy Services based on transfer prices determined based on management's assessment of market-based pricing terms. Such intersegment sales and related costs are eliminated at the corporate level to derive our consolidated financial results.

  • 8point3. In 2015, 8point3 Energy Partners LP ("8point3 Energy Partners"), a joint YieldCo vehicle, was formed by the company and First Solar, Inc. ("First Solar" and, together with the company, the "Sponsors") to own, operate and acquire solar energy generation assets. Class A shares of 8point3 Energy Partners are now listed on the NASDAQ Global Select Market under the trading symbol "CAFD."  Immediately after the IPO, the company contributed a portfolio of 170 MW of its solar generation assets (the "SPWR Projects") to 8point3 Operating Company, LLC ("OpCo"), 8point3 Energy Partners' primary operating subsidiary.  In exchange for the SPWR Projects, the company received cash proceeds as well as equity interests in several 8point3 Energy Partners affiliated entities: primarily common and subordinated units representing a 40.7% (since reduced to 36.5% via a secondary issuance of shares in fiscal 2016) stake in OpCo and a 50.0% economic and management stake in 8point3 Holding Company, LLC ("Holdings"), the parent company of the general partner of 8point3 Energy Partners and the owner of incentive distribution rights in OpCo.  Holdings, OpCo, 8point3 Energy Partners and their respective subsidiaries are referred to herein as the "8point3 Group" or "8point3."
    The company includes adjustments related to the sales of projects contributed to 8point3 previously based on the difference between the fair market value of the consideration received and the net carrying value of the projects contributed, of which, a portion is deferred in proportion to the company's retained equity stake in 8point3. Prior to the adoption of ASC 606, these sales are recognized under either real estate, lease, or consolidation accounting guidance depending upon the nature of the individual asset contributed, with outcomes ranging from no, partial, or full profit recognition. The company adopted ASC 606 on January 1, 2018, using the full retrospective method, which required the company to restate each prior period presented. The company recorded a material amount of deferred profit associated with projects sold to 8point3 in 2015, the majority of which had previously been deferred under real estate accounting.  Accordingly, the company's carrying value in the 8point3 materially increased upon adoption which required the company to evaluate its investment in 8point3 for other-than-temporary impairment ("OTTI"). In accordance with such evaluation, the company recognized a non-cash impairment charge on the 8point3 investment balance in the prior periods that were affected. On June 19, 2018, the company sold its equity interest in 8point3.

  • Legacy utility and power plant projects. The company includes adjustments related to the revenue recognition of certain utility and power plant projects based on the ratio of costs incurred to date to the total estimated costs at completion of the performance obligations and, when relevant, the allocation of revenue and margin to the company's project development efforts at the time of initial project sale. Prior to the adoption of ASC 606, such projects are accounted for under real estate accounting guidance, under which no separate allocation to the company's project development efforts occurs and the amount of revenue and margin that is recognized may be limited in circumstances where the company has certain forms of continuing involvement in the project. Under ASC 606, such projects are accounted for when the customer obtains control of the promised goods or services which generally results in earlier recognition of revenue and profit than previous GAAP. Over the life of each project, cumulative revenue and gross profit will eventually be equivalent under both ASC 606 and non-GAAP once these projects are completed.

  • Sale-leaseback transactions. The company includes adjustments primarily related to the revenue recognition on certain sale-leaseback transactions based on the net proceeds received from the buyer-lessor. Under GAAP, these transactions are accounted for under the financing method in accordance with real estate accounting guidance. Under such guidance, no revenue or profit is recognized at the inception of the transaction, and the net proceeds from the buyer-lessor are recorded as a financing liability. Imputed interest is recorded on the liability equal to the company's incremental borrowing rate adjusted solely to prevent negative amortization.

  • Unrealized loss in equity investments. In connection with the divestment of the Company's microinverters business in the third quarter of fiscal 2018, the Company received a portion of the consideration in the form of common stock. The Company recognizes 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, unrealized 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 Total S.A., a foreign registrant which reports under the IFRS. Management believes that excluding the unrealized gain or loss on the equity investments is consistent with the Company's reporting process as part of its status as a consolidated subsidiary of Total S.A. and better reflects the Company's ongoing segment results.

Other Non-GAAP Adjustments

  • Impairment and sale of residential lease assets. In the fourth quarter of fiscal 2017, the company made the decision to sell or refinance its interest in the residential lease portfolio and as a result of this triggering event, determined it was necessary to evaluate the potential for impairment in its ability to recover the carrying amount of the residential lease portfolio. In accordance with such evaluation, the company recognized a non-cash impairment charge on its solar power systems leased and to be leased and an allowance for losses related financing receivables. In connection with the impairment loss, the carrying values of the company's solar power systems leased and to be leased were reduced which resulted in lower depreciation charges. In the fourth quarter of fiscal 2018, we entered into a joint venture with HA SunStrong Capital LLC ("HA SunStrong Parent"), an affiliate of Hannon Armstrong Sustainable Infrastructure Capital, Inc., to acquire, own, manage, operate, finance, and maintain a portfolio of residential rooftop or ground-mounted solar photovoltaic electric generating systems ("Solar Assets"). Pursuant to the terms of the Purchase and Sale Agreement (the "PSA"), we sold to HA SunStrong Parent, in exchange for consideration of $10.0 million, membership units representing a 49.0% membership interest in SunStrong Capital Holdings, LLC ("SunStrong"), formerly our wholly-owned subsidiary. Following the closing of the PSA, we deconsolidated certain entities that have historically held the assets and liabilities comprising our residential lease business (the "Residential Lease Portfolio"), as part of our previously announced decision to sell a portion of our interest in the portfolio of residential lease assets, and retained membership units representing a 51% membership interest in SunStrong. The loss on divestment and the remaining unsold residential lease asset impairment with its corresponding depreciation savings are excluded from the company's segment results as they are non-cash in nature and not reflective of ongoing operating results.

  • Impairment of property, plant, and equipment. In the second quarter of fiscal 2018, the company announced its proposed plan to change the corporate structure into the Upstream business unit and Downstream business unit, and long-term strategy to replace IBC technology to NGT.  Accordingly, the company expects to upgrade the equipment associated with our manufacturing operations for the production of NGT over the next several years. In connection with these events, the company determined indicators of impairment existed and therefore performed an evaluation of the recoverability of the asset group. In accordance with such evaluation, the company recognized a non-cash impairment charge on its property, plant and equipment. Such asset impairment is excluded from the company's segment results as it is non-cash in nature and not reflective of ongoing segment results.

  • Cost of above-market polysilicon. The company has entered into multiple long-term, fixed-price supply agreements to purchase polysilicon for periods of up to 10 years. The prices in select legacy supply agreements, which incorporate a cash portion and a non-cash portion attributable to the amortization of prepayments made under the agreements, significantly exceed current market prices. Additionally, in order to reduce inventory and improve working capital, the company has periodically elected to sell polysilicon inventory in the marketplace at prices below the company's purchase price, thereby incurring a loss. Management believes that it is appropriate to exclude the impact of its above-market cost of polysilicon, including the effect of above-market polysilicon on product costs, losses incurred on sales of polysilicon to third parties, and inventory reserves and project asset impairments from the company's non-GAAP financial measures as they are not reflective of ongoing operating results and do not contribute to a meaningful evaluation of a company's past operating performance.

  • Stock-based compensation. Stock-based compensation relates primarily to the company's equity incentive awards. Stock-based compensation is a non-cash expense that is dependent on market forces that are difficult to predict. Management believes 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.

  • Amortization of intangible assets. The company incurs amortization of intangible assets as a result of acquisitions, which includes patents, purchased technology, project pipeline assets, and in-process research and development. Management believes that it is appropriate to exclude these amortization charges from the company's non-GAAP financial measures as they arise from prior acquisitions, are not reflective of ongoing operating results, and do not contribute to a meaningful evaluation of a company's past operating performance.

  • Depreciation of idle equipment. In the fourth quarter of 2017, the company changed the deployment plan for its next generation of solar cell technology, and revised its depreciation estimates to reflect the use of certain assets over its shortened useful life. Such asset depreciation is excluded from the company's non-GAAP financial measures as it is non-cash in nature and not reflective of ongoing operating results. Excluding this data provides investors with a basis to compare the company's performance against the performance of other companies without such charges.

  • Gain on business divestiture. In the third quarter of fiscal 2018, the Company entered into a transaction pursuant to which the Company sold certain assets and intellectual property related to the production of microinverters for purchase consideration comprised of both cash and stock. In connection with this sale, the Company recognized a gain relating to this business divestiture. Management believes that it is appropriate to exclude this gain from the Company's Non-GAAP financial measures as it is non-cash in nature and not reflective of ongoing operating results.

  • Acquisition-related and other costs. In connection with the acquisition of certain assets of SolarWorld Americas, Inc. ("SolarWorld Americas"), which closed on October 1, 2018, the Company incurred legal and accounting fees. In addition to the legal and accounting fees incurred, a gain Management believes that it is appropriate to exclude these from the Company's Non-GAAP financial measures as they would not have otherwise been incurred as part of its business operations and are therefore not reflective of ongoing operating results.

  • Business reorganization costs. In connection with the reorganization of our business into an upstream and downstream business unit structure, we incurred and expect to continue incurring expenses in the upcoming quarters associated with reclassifying prior period segment information, reorganization of corporate functions and responsibilities to the business units, updating accounting policies and processes and implementing systems to fulfill the requirements of the master supply agreement between the segments. Management believes that it is appropriate to exclude these from the Company's Non-GAAP financial measures as they would not have otherwise been incurred as part of its business operations and are therefore not reflective of ongoing operating results.

  • Non-cash interest expense. The company incurs non-cash interest expense related to the amortization of items such as original issuance discounts on its debt.  The company excludes non-cash interest expense because the expense does not reflect its financial results in the period incurred. Management believes that this adjustment for non-cash interest expense provides investors with a basis to evaluate the company's performance, including compared with the performance of other companies, without non-cash interest expense.

  • Restructuring expense. The company incurs 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.  Restructuring charges are excluded from non-GAAP financial measures because they are not considered core operating activities and such costs have historically occurred infrequently. 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. As such, management believes that it is appropriate to exclude restructuring charges from the company's non-GAAP financial measures as they are not reflective of ongoing operating results or contribute to a meaningful evaluation of a company's past operating performance.

  • IPO-related costs. Costs incurred related to the IPO of 8point3 included legal, accounting, advisory, valuation, and other expenses.  As these costs are non-recurring in nature, excluding this data provides investors with a basis to evaluate the company's performance, including compared with the performance of other companies, without similar impacts.

  • 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. The company's non-GAAP tax amount is based on estimated cash tax expense and reserves. The company forecasts its 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 the company's 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.

  • Adjusted EBITDA adjustments. When calculating Adjusted EBITDA, in addition to adjustments described above, the company excludes the impact during the period of the following items:

    • Cash interest expense, net of interest income
    • Provision for (benefit from) income taxes
    • Depreciation

      Management presents this non-GAAP financial measure to enable investors to evaluate the company's performance, including compared with the performance of other companies.

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



Dec. 30,


Sep. 30,


Dec. 31,


Dec. 30,


Dec. 31,



2018


2018


2017


2018


2017

GAAP revenue


$           456,837


$           428,263


$           651,134


$       1,726,085


$       1,794,047

Adjustments based on IFRS:











8point3


-


-


-


(8,588)


7,198

Legacy utility and power plant projects


(691)


(361)


9,024


(4,145)


54,659

Sale-leaseback transactions


69,254


15,529


163,837


101,581


272,654

Non-GAAP revenue


$           525,400


$           443,431


$           823,995


$       1,814,933


$       2,128,558












Adjustments to Gross Profit (Loss) / Margin:













THREE MONTHS ENDED


TWELVE MONTHS ENDED



Dec. 30,


Sep. 30,


Dec. 31,


Dec. 30,


Dec. 31,



2018


2018


2017


2018


2017

GAAP gross profit (loss)


$             (7,571)


$                9,877


$           (12,777)


$         (297,081)


$           (18,645)

Adjustments based on IFRS:











8point3


-


-


(62)


(8,337)


(2,656)

Legacy utility and power plant projects


(569)


162


(3,538)


(1,244)


41,746

Sale-leaseback transactions


6,132


(2,492)


25,839


242


31,094

Other adjustments:











Impairment and sale of residential lease assets


(2,163)


(4,679)


-


(14,847)


-

Impairment of property, plant and equipment


-


-


-


355,107


-

Cost of above-market polysilicon


37,231


14,628


81,804


87,228


166,906

Stock-based compensation expense


1,236


1,239


2,145


4,996


5,489

Amortization of intangible assets


1,889


2,142


2,505


8,966


10,206

Depreciation of idle equipment 


-


-


2,300


721


2,300

Non-cash interest expense


-


-


2


-


32

Non-GAAP gross profit


$             36,185


$             20,877


$             98,218


$           135,751


$           236,472












GAAP gross margin (%)


-1.7%


2.3%


-2.0%


-17.2%


-1.0%

Non-GAAP gross margin (%)


6.9%


4.7%


11.9%


7.5%


11.1%












Adjustments to Net income (loss):













THREE MONTHS ENDED


TWELVE MONTHS ENDED



Dec. 30,


Sep. 30,


Dec. 31,


Dec. 30,


Dec. 31,



2018


2018


2017


2018


2017

GAAP net loss attributable to stockholders


$         (158,174)


$           (89,826)


$         (572,651)


$         (811,091)


$         (929,121)

Adjustments based on IFRS:











8point3


-


-


8,130


(8,485)


78,990

Legacy utility and power plant projects


(569)


162


(3,538)


(1,244)


41,746

Sale-leaseback transactions


10,984


2,258


28,491


18,802


39,318

Unrealized loss on equity investments 


150


6,225


-


6,375


-

Other adjustments:











Impairment and sale of residential lease assets


81,273


50,735


473,709


227,507


473,709

Impairment of property, plant and equipment


-


-


-


369,168


-

Cost of above-market polysilicon


37,231


14,628


81,804


87,228


166,906

Stock-based compensation expense


6,424


6,390


9,294


28,215


34,674

Amortization of intangible assets


1,889


2,142


8,769


8,966


19,048

Depreciation of idle equipment 


-


-


2,300


721


2,300

Gain on business divestitures


-


(59,347)


-


(59,347)


-

Acquisition-related and other costs


(3,142)


20,869


-


17,727


-

Business reorganization costs


1,330


-


-


1,330


-

Non-cash interest expense


10


13


25


68


128

Restructuring expense


(1,107)


3,923


2,769


17,497


21,045

IPO-related costs


-


-


-


-


(82)

Tax effect


(6,605)


906


(3,338)


(4,797)


16,932

Non-GAAP net income (loss) attributable to stockholders


$           (30,306)


$           (40,922)


$             35,764


$         (101,360)


$           (34,407)























Adjustments to Net income (loss) per diluted share:













THREE MONTHS ENDED


TWELVE MONTHS ENDED



Dec. 30,


Sep. 30,


Dec. 31,


Dec. 30,


Dec. 31,



2018


2018


2017


2018


2017

Net income (loss) per diluted share











Numerator:











GAAP net loss available to common stockholders1


$         (158,174)


$           (89,826)


$         (572,651)


$         (811,091)


$         (929,121)

Non-GAAP net income (loss) available to common stockholders1


$           (30,306)


$           (40,922)


$             35,764


$         (101,360)


$           (34,407)












Denominator:











GAAP weighted-average shares


141,136


141,027


139,613


140,825


139,370

Effect of dilutive securities:











Restricted stock units


-


-


1,570


-


-

Upfront warrants (held by Total)


-


-


49


-


-

Non-GAAP weighted-average shares1


141,136


141,027


141,232


140,825


139,370












GAAP net loss per diluted share


$                (1.12)


$                (0.64)


$                (4.10)


$                (5.76)


$                (6.67)

Non-GAAP net income (loss) per diluted share


$                (0.21)


$                (0.29)


$                  0.25


$                (0.72)


$                (0.25)












1In accordance with the if-converted method, net income (loss) available to common stockholders excludes interest expense related to the 0.75%, 0.875%, and 4.0% debentures if the debentures are considered converted in the calculation of net income (loss) 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


TWELVE MONTHS ENDED



Dec. 30,


Sep. 30,


Dec. 31,


Dec. 30,


Dec. 31,



2018


2018


2017


2018


2017

GAAP net loss attributable to stockholders


$         (158,174)


$           (89,826)


$         (572,651)


$         (811,091)


$         (929,121)

Adjustments based on IFRS:











8point3


-


-


8,130


(8,485)


78,990

Legacy utility and power plant projects


(569)


162


(3,538)


(1,244)


41,746

Sale-leaseback transactions


10,984


2,258


28,491


18,802


39,318

Unrealized loss on equity securities


150


6,225


-


6,375


-

Other adjustments:











Impairment and sale of residential lease assets


81,273


50,735


473,709


227,507


473,709

Impairment of property, plant and equipment


-


-


-


369,168


-

Cost of above-market polysilicon


37,231


14,628


81,804


87,228


166,906

Stock-based compensation expense


6,424


6,390


9,294


28,215


34,674

Amortization of intangible assets


1,889


2,142


8,769


8,966


19,048

Depreciation of idle equipment 


-


-


2,300


721


2,300

Gain on business divestitures


-


(59,347)


-


(59,347)


-

Acquisition-related and other costs


(3,142)


20,869


-


17,727


-

Business reorganization costs


1,330


-


-


1,330


-

Non-cash interest expense


10


13


25


68


128

Restructuring expense


(1,107)


3,923


2,769


17,497


21,045

IPO-related costs


-


-


-


-


(82)

Cash interest expense, net of interest income


24,584


20,136


22,058


86,394


79,965

Provision for (benefit from) income taxes


(8,379)


3,680


(2,870)


1,010


(3,943)

Depreciation


21,054


24,754


41,960


120,367


164,970

Adjusted EBITDA


$             13,558


$                6,742


$           100,250


$           111,208


$           189,653












Q1 2019 and FY 2019 GUIDANCE

(in thousands except percentages)

Q1 2019

FY 2019

Revenue (GAAP)

$290,000-$330,000

$1,800,000-$1,900,000

Revenue (non-GAAP)1

$350,000-$390,000

$1,900,000-$2,000,000

Gross margin (GAAP)

(3)% - 0%

N/A

Gross margin (non-GAAP)2

3% - 5%

N/A

Net loss (GAAP)

$50,000-$70,000

$150,000-$175,000

Adjusted EBITDA3

$(40,000)-$(20,000)

$80,000-$110,000

 

1.

Estimated non-GAAP amounts above for Q1 2019 and fiscal 2019 include net adjustments that increase revenue by approximately $60 million and $100 million, respectively related to construction services for residential customer contracts.



2.

Estimated non-GAAP amounts above for Q1 2019 include net adjustments that increase (decrease) gross margin by approximately $(1) million related to construction services for residential customer contracts, $22 million related to cost of above-market polysilicon, $2 million related to stock-based compensation expense, and $1 million related to amortization of intangible assets.



3.

Estimated Adjusted EBITDA amounts above for Q1 2019 include net adjustments that decrease (increase) net loss by approximately $(12) million related to construction services for residential customer contracts, $(40) million related to sale-leaseback transactions, $22 million related to cost of above-market polysilicon, $9.5 million related to impairment of lease assets, $8 million related to stock-based compensation expense, $15 million related to depreciation, $1 million related to amortization of intangible assets, $13 million related to restructuring, $10.5 million related to interest expense, and $3 million related to income taxes. Estimated non-GAAP amounts above for fiscal 2019 include net adjustments that decrease (increase) net loss by approximately $(10) million related to construction services for residential customer contracts, $(40) million related to sale-leaseback transactions, $(6) million related to impairment of property, plant and equipment, $120 million related to cost of above-market polysilicon, $9.5 million related to impairment of lease assets, $31 million related to stock-based compensation expense, $60 million related to depreciation, $7 million related to amortization of intangible assets, $32 million related to restructuring, $36 million related to interest expense, and $18 million related to income taxes.

 



SUNPOWER CORPORATION



(In thousands, except percentages)









































THREE MONTHS ENDED









































December 30, 2018



 Revenue 


 Gross profit / margin 


 Operating expenses 













SPES


SPT


Intersegment
revenue
eliminations


SPES


SPT


Intersegment
revenue
eliminations



 Research and
development


 Sales, general
and
administrative 


 Restructuring
charges 


 Impairment and
sale of
residential lease
asset 


 Gain on business
divestitures 


Other income
(expense), net 


Benefit from
(provision for)
income taxes 


Equity in
earnings of
unconsolidated
investees 


Gain (Loss)
attributable to
non-controlling
interests 


Net income (loss)
attributable to
stockholders 

GAAP


$                     265,427


$                 277,256


$                 (85,846)


$                    20,126


7.6%


$                 (19,616)


-7.1%


$                    (8,081)





















$                (158,174)

Adjustments based on IFRS:






































Legacy utility and power plant projects


(240)


(451)


-


(472)




(97)




-



-


-


-


-


-


-


-


-


-


(569)

Sale-leaseback transactions


69,254


-


-


6,113




19




-



-


-


-


-


-


4,852


-


-


-


10,984

Unrealized loss on equity investments


-


-


-


-




-




-



-


-


-


-


-


150


-


-


-


150

Other adjustments:






































Impairment and sale of residential lease assets


-


-


-


(2,163)




-




-



-


-


-


81,086


-


-


-


-


2,350


81,273

Cost of above-market polysilicon


-


-


-


2,055




35,176




-



-


-


-


-


-


-


-


-


-


37,231

Stock-based compensation expense


-


-


-


610




626




-



907


4,281


-


-


-


-


-


-


-


6,424

Amortization of intangible assets


-


-


-


616




1,273




-



-


-


-


-


-


-


-


-


-


1,889

Business reorganization costs
















-





1,330


-


-


-


-


-


-


-


1,330

Acquisition-related and other costs


-


-


-


-




-




-



-


(3,142)


-


-


-


-


-


-


-


(3,142)

Non-cash interest expense


-


-


-


-




-




-





10


-


-


-


-


-


-


-


10

Restructuring expense


-


-


-


-




-




-



-


-


(1,107)


-


-


-


-


-


-


(1,107)

Tax effect


-


-


-


-




-




-



-


-


-


-


-


-


(6,605)


-


-


(6,605)

Non-GAAP


$                     334,441


$                 276,805


$                 (85,846)


$                    26,885


8.0%


$                    17,381


6.3%


$                    (8,081)





















$                   (30,306)






September 30, 2018



 Revenue 


 Gross profit / margin 


 Operating expenses 













SPES


SPT


Intersegment
revenue
eliminations


SPES


SPT


Intersegment
revenue
eliminations



 Research and
development


 Sales, general
and
administrative 


 Restructuring charges 


 Impairment and sale of residential lease asset 


 Gain on business divestitures 


Other income (expense), net 


 Benefit from (provision for) income taxes 


Equity in earnings of unconsolidated investees 


Gain (Loss) attributable to non-controlling interests 


 Net income (loss)
attributable to
stockholders 

GAAP


$                     263,576


$                 289,630


$               (124,943)


$                    46,380


17.6%


$                 (17,897)


-6.2%


$                 (18,606)





















$                   (89,826)

Adjustments based on IFRS:






































Legacy utility and power plant projects


(114)


(247)


-


141




21




-



-


-


-


-


-


-


-


-


-


162

Sale-leaseback transactions


15,529


-


-


(2,054)




(438)




-



-


-


-


-


-


4,750


-


-


-


2,258

Unrealized loss on equity investments


-


-


-


-




-




-



-


-


-


-


-


6,225


-


-


-


6,225

Other adjustments:






































Impairment and sale of residential lease assets


-


-


-


(4,679)




-




-



-


-


-


53,537


-


-


-


-


1,877


50,735

Cost of above-market polysilicon


-


-


-


(2,336)




16,964




-



-


-


-


-


-


-


-


-


-


14,628

Stock-based compensation expense


-


-


-


598




641




-



806


4,345


-


-


-


-


-


-


-


6,390

Amortization of intangible assets


-


-


-


972




1,170




-



-


-


-


-


-


-


-


-


-


2,142

Gain on business divestitures


-


-


-


-




-




-



-


-


-


-


(59,347)


-


-


-


-


(59,347)

Acquisition-related and other costs


-


-


-


-




-




-



-


20,869


-


-


-


-


-


-


-


20,869

Non-cash interest expense


-


-


-


-




-




-



1


12


-


-


-


-


-


-


-


13

Restructuring expense


-


-


-


-




-




-



-


-


3,923


-


-


-


-


-


-


3,923

Tax effect


-


-


-


-




-




-



-


-


-


-


-


-


906


-


-


906

Non-GAAP


$                     278,991


$                 289,383


$               (124,943)


$                    39,022


14.0%


$                          461


0.2%


$                 (18,606)





















$                   (40,922)






December 31, 2017



 Revenue 


 Gross profit / margin 


 Operating expenses 













SPES


SPT


Intersegment
revenue
eliminations


SPES


SPT


Intersegment
revenue
eliminations



 Research and
development 


 Sales, general
and
administrative 


 Restructuring charges 


 Impairment and sale of residential lease asset 


 Gain on business divestitures 


Other income (expense), net


Benefit from (provision for) income taxes 


Equity in earnings of unconsolidated investees 


Gain (Loss) attributable to non-controlling interests 


Net income (loss)
attributable to
stockholders 

GAAP


$                     259,260


$                 541,415


$               (149,541)


$                      9,572


3.7%


$                 (11,807)


-2.2%


$                 (10,542)





















$                (572,651)

Adjustments based on IFRS:






































8point3


-


-


-


(62)




-




-



-


-


-


-


-


8,086


-


106


-


8,130

Legacy utility and power plant projects


10,344


(1,320)


-


373




(3,911)




-



-


-


-


-


-


-


-


-


-


(3,538)

Sale-leaseback transactions


163,837


-


-


25,839




-




-



-


-


-


-


-


2,652


-


-


-


28,491

Other adjustments:






































Impairment and sale of residential lease assets


-


-


-


-




-




-



-


-


-


624,335


-


-


-


-


(150,626)


473,709

Cost of above-market polysilicon


-


-


-


4




81,800




-



-


-


-


-


-


-


-


-


-


81,804

Stock-based compensation expense


-


-


-


1,105




1,040




-



1,565


5,584


-


-


-


-


-


-


-


9,294

Amortization of intangible assets


-


-


-


1,390




1,115




-



-


6,264


-


-


-


-


-


-


-


8,769

Depreciation of idle equipment 


-


-


-


930




1,370




-



-


-


-


-


-


-


-


-


-


2,300

Non-cash interest expense


-


-


-


1




1




-



4


19


-


-


-


-


-


-


-


25

Restructuring expense


-


-


-


-




-




-



-


-


2,769


-


-


-


-


-


-


2,769

IPO-related costs


-


-


-


-




-




-



-


-


-


-


-


-


-


-


-


-

Other


-


-


-


-




-




-



-


-


-


-


-


-


-


-


-


-

Tax effect


-


-


-


-




-




-



-


-


-


-


-


-


(3,338)


-


-


(3,338)

Non-GAAP


$                     433,441


$                 540,095


$               (149,541)


$                    39,152


9.0%


$                    69,608


12.9%


$                 (10,542)





















$                     35,764






TWELVE MONTHS ENDED









































December 30, 2018



 Revenue 


 Gross profit / margin 


 Operating expenses 













SPES


SPT


Intersegment
revenue
eliminations


SPES


SPT


Intersegment
revenue
eliminations



 Research and
development 


 Sales, general
and
administrative 


 Restructuring charges 


 Impairment and sale of residential lease asset 


 Gain on business divestitures 


Other income (expense), net


Benefit from (provision for) income taxes 


Equity in earnings of unconsolidated investees 


Gain (Loss) attributable to non-controlling interests 


Net income (loss)
attributable to
stockholders 

GAAP


$                 1,045,614


$              1,069,010


$               (388,539)


$                 156,204


14.9%


$               (427,899)


-40.0%


$                 (25,386)





















$                (811,091)

Adjustments based on IFRS:






































8point3


(2,400)


(6,188)


-


(2,149)




(6,188)




-



-


-


-


-


-


-


-


(148)


-


(8,485)

Legacy utility and power plant projects


(828)


(3,317)


-


(787)




(457)




-



-


-


-


-


-


-


-


-


-


(1,244)

Sale-leaseback transactions


101,581


-


-


661




(419)




-



-


-


-


-


-


18,560


-


-


-


18,802

Unrealized loss on equity investments


-


-


-


-




-




-



-


-


-


-


-


6,375


-


-


-


6,375

Other adjustments:

























-


-











Impairment and sale of residential lease assets


-


-


-


(14,847)




-




-



-


-


-


251,984


-


-


-


-


(9,630)


227,507

Impairment of property, plant and equipment


-


-


-


33




355,074




-



12,832


1,229


-


-


-


-


-


-


-


369,168

Cost of above-market polysilicon


-


-


-


(3,795)




91,023




-



-


-


-


-


-


-


-


-


-


87,228

Stock-based compensation expense


-


-


-


2,370




2,626




-



5,496


17,723


-


-


-


-


-


-


-


28,215

Amortization of intangible assets


-


-


-


4,109




4,857




-



-


-


-


-


-


-


-


-


-


8,966

Business reorganization costs


-


-


-


-




-




-



-


1,330


-


-


-


-


-


-


-


1,330

Depreciation of idle equipment 


-


-


-


289




432




-



-


-


-


-


-


-


-


-


-


721

Gain on business divestitures


-


-


-


-




-




-



-


-


-


-


(59,347)


-


-


-


-


(59,347)

Acquisition-related and other costs


-


-


-


-




-




-



-


17,727


-


-


-


-


-


-


-


17,727

Non-cash interest expense


-


-


-


-




-




-



7


61


-


-


-


-


-


-


-


68

Restructuring expense


-


-


-


-




-




-



-


-


17,497


-


-


-


-


-


-


17,497

Tax effect


-


-


-


-




-




-



-


-


-


-


-


-


(4,797)


-


-


(4,797)

Non-GAAP


$                 1,143,967


$              1,059,505


$               (388,539)


$                 142,088


12.4%


$                    19,049


1.8%


$                 (25,386)





















$                (101,360)






December 31, 2017



 Revenue 


 Gross profit / margin 



 Operating expenses 













SPES


SPT


Intersegment
revenue
eliminations


SPES




SPT




Intersegment
revenue
eliminations



 Research and
development 


 Sales, general
and
administrative 


 Restructuring charges 


 Impairment and sale of residential lease asset 


 Gain on business divestitures 


Other income (expense), net 


Benefit from (provision for) income taxes 


 Equity in earnings of unconsolidated investees 


Gain (Loss) attributable to non-controlling interests 


Net income (loss)
attributable to
stockholders 

GAAP


$                     910,206


$              1,350,790


$               (466,949)


$                    89,578


9.8%


$                 (79,749)


-5.9%


$                 (28,474)





















$                (929,121)

Adjustments based on IFRS:






































8point3


7,164


34


-


(2,553)




(103)




-



-


-


-


-


-


86,050


-


(4,404)


-


78,990

Legacy utility and power plant projects


10,665


43,994


-


1,443




40,303




-



-


-


-


-


-


-


-


-


-


41,746

Sale-leaseback transactions


242,217


30,437


-


31,573




(479)




-



-


-


-


-


-


8,224


-


-


-


39,318

Other adjustments:






































Impairment and sale of residential lease assets


-


-


-


-




-




-



-


-


-


624,335


-


-


-


-


(150,626)


473,709

Cost of above-market polysilicon


-


-


-


(1)




166,907




-



-


-


-


-


-


-


-


-


-


166,906

Stock-based compensation expense


-


-


-


2,600




2,889




-



6,448


22,737


-


-


-


-


-


-


-


34,674

Amortization of intangible assets


-


-


-


5,790




4,416




-



1,201


7,641


-


-


-


-


-


-


-


19,048

Depreciation of idle equipment 


-


-


-


930




1,370




-



-


-


-


-


-


-


-


-


-


2,300

Non-cash interest expense


-


-


-


13




19




-



16


80


-


-


-


-


-


-


-


128

Restructuring expense


-


-


-


-




-




-



-


-


21,045


-


-


-


-


-


-


21,045

IPO-related costs


-


-


-


-




-




-



-


(82)


-


-


-


-


-


-


-


(82)

Tax effect


-


-


-


-




-




-



-


-


-


-


-


-


16,932


-


-


16,932

Non-GAAP


$                 1,170,252


$              1,425,255


$               (466,949)


$                 129,373


11.1%


$                 135,573


9.5%


$                 (28,474)





















$                   (34,407)

 

Cision View original content to download multimedia:http://www.prnewswire.com/news-releases/sunpower-reports-fourth-quarter-and-fiscal-year-2018-results-300795318.html

SOURCE SunPower Corp.