SunPower Reports Fourth Quarter and Fiscal Year 2019 Results

Strong Distributed Generation Market Demand, Materially Delivered Balance Sheet

SAN JOSE, Calif., Feb. 12, 2020 /PRNewswire/ -- SunPower Corp. (NASDAQ:SPWR) today announced financial results for its fourth quarter ended Dec. 29, 2019.

SunPower Corp logo

Fourth Quarter Company Highlights

  • Strong demand in U.S. and international distributed generation (DG) markets
  • Exceeded fourth quarter cash target, successful capital raise, business unit cash generation
  • Announced decision to create two strategically-aligned, and independent companies

SunPower Energy Services (SPES)

  • Record fourth quarter residential revenue with 27 percent megawatt (MW) growth versus fourth quarter 2018
  • Positive field results from residential Equinox Storage product beta tests
  • Strong commercial direct origination performance - restructuring commercial execution organization

SunPower Technologies (SPT)

  • Record global shipments - more than 80 percent year over year volume growth
  • Announced proposed spin-off of Maxeon Solar Technologies (Maxeon Solar) to shareholders
  • $298 million TZS equity investment in Maxeon Solar to accelerate Maxeon-5 capacity ramp
($ Millions, except percentages and per-share data) 4th Quarter 2019 3rd Quarter 2019 4th Quarter 2018 Fiscal Year 2019 Fiscal Year 2018
GAAP revenue $603.8 $476.0 $456.8 $1,864.2 $1,726.1
GAAP gross margin 15.8% 10.1% (1.7%) 6.8% (17.2%)
GAAP net income (loss) $5.4 $(15.0) $(158.2) $22.2 $(811.1)
GAAP net income (loss) per diluted share $0.03 $(0.11) $(1.12) $0.15 $(5.76)
Non-GAAP revenue1 $607.0 $491.7 $525.4 $1,992.1 $1,814.9
Non-GAAP gross margin1 20.8% 15.9% 6.9% 14.0% 7.5%
Non-GAAP net income (loss)1 $35.8 $10.6 $(30.3) $(42.2) $(101.4)
Non-GAAP net income (loss) per diluted share1 $0.23 $0.07 $(0.21) $(0.29) $(0.72)
Adjusted EBITDA1 $71.5 $42.0 $13.6 $97.8 $111.2
MW Recognized 707 586 461 2,455 1,355
Cash2 $423.0 $189.0 $309.4 $423.0 $309.4
1. Information about SunPower's use of non-GAAP financial information, including a reconciliation to U.S. GAAP, is provided under "Use of Non-GAAP Financial Measures" below.
2. Includes cash, and cash equivalents, excluding restricted cash

Fourth Quarter 2019 Results

"Overall, we exited the year with solid fourth quarter financial performance despite execution challenges in our commercial direct business," said Tom Werner, SunPower CEO and chairman of the board. "We also achieved a number of important strategic milestones during the quarter.  These included the announcement of our proposed Maxeon Solar spin-off and planned equity investment from TZS, initial installations of our residential Equinox Storage system, as well as a successful capital raise and partial convertible bond retirement to further strengthen our balance sheet."

SunPower Energy Services (SPES)

"The strategic decision to combine our residential and commercial dealer operations into a combined channels business is paying dividends as we posted strong financial results for this unit in the fourth quarter.  Our residential business achieved record revenue and installation volume, and in new homes, we remain the market leader as we grew this business by more than 50 percent last year and exited 2019 with a backlog of 45,000 homes. We expect new homes volume growth to exceed 50 percent in 2020 as we leverage the current California new home solar mandate. Finally, we remain very excited about the launch of our Equinox Storage product as we added to our beta installations in the fourth quarter and see strong demand for Equinox Storage in 2020.

"In Commercial Direct, we maintained our market share lead and increased installation volume year over year.  Our origination teams once again performed well, but deployment execution remained challenged.  As a result of this underperformance, we have taken a number of steps to improve results including changes to our reporting structure, instituting new processes to streamline permitting and regulatory requirements and actions to improve installation execution.  We now expect our commercial direct business to return to profitability in the second half of this year.  Demand for our Helix Storage solution remains strong as evidenced by our plan to add 20 megawatt hours (MWh) of storage to the Chevron Lost Hills solar project, our largest commercial storage award to date.  Additionally, our storage pipeline continues to expand, now exceeding 175-MW with attach rates of 35 percent.

SunPower Technologies (SPT)

"SPT posted a very strong quarter, beating our financial targets across the board including volume, revenue, margin, EBITDA, and cash flow. Growth was driven primarily by demand in the global DG markets, with DG volume up over 95 percent year-over-year. For the full year 2019, DG shipments grew approximately 75 percent. During the fourth quarter, we completed commercialization of our Maxeon 5 technology, ramping our first line-pair to full production. Customer demand for this product is strong, and the technology is ready for accelerated ramp consistent with the planned $298 million equity investment from TZS. Demand for our Performance Series (P-Series) product also remains high, comprising approximately half of our fourth quarter and full year 2019 shipment volume.

"Finally, we were pleased to announce the strategic decision to separate into two independent, complementary, strategically-aligned and publicly-traded companies: SunPower and Maxeon Solar. This separation will enable each company to focus on distinct offerings built on extensive experience across the solar value chain while, we believe, unlocking long-term shareholder value. We remain on track to complete the separation in the second quarter of fiscal 2020, subject to closing conditions," Werner concluded.

Consolidated Financials

"Our solid fourth quarter performance reflects the results of our focus on the DG market and increased operational discipline," said Manavendra Sial, SunPower chief financial officer. "In relation to the balance sheet, we increased our liquidity as we generated positive cash at the business unit level, completed a successful capital raise and retired more than $30 million of convertible debt in the first quarter of 2020. We also continued to prudently manage our expenses while meeting our cost reduction targets.  We remain committed to achieving positive cash flow this year while continuing to improve our profitability throughout 2020."

Fourth quarter fiscal year 2019 non-GAAP results exclude net adjustments that, in the aggregate, increased non-GAAP earnings by $30.4 million, including $27.5 million related to the cost of above-market polysilicon, $18.7 million related to business reorganization costs and restructuring charges, $8.0 million related to stock-based compensation expense, $1.8 million related to amortization of intangible assets, and $2.6 million related to other non-recurring items, partially offset by $28.2 million related to mark-to-market gain on equity investments, and tax effect of these items.

Financial Outlook

The company's first quarter 2020 GAAP and non-GAAP guidance is as follows: on a GAAP basis, revenue of $435 million to $470 million, gross margin of 3 percent to 6 percent and net loss of $85 million to $70 million. On a non-GAAP basis, the company expects revenue of $435 million to $470 million, gross margin of 9 percent to 12 percent, Adjusted EBITDA of ($15) million to $0 million and MW deployed in the range of 520 MW to 570 MW.

The company's fiscal year 2020 GAAP and non-GAAP guidance is as follows: on a GAAP basis, revenue of $2.1 billion to $2.3 billion and a net loss of $195 million to $145 million. On a non-GAAP basis, revenue of $2.1 billion to $2.3 billion and operational expenses of less than $260 million. Gigawatts recognized is expected to be in the range of 2.5 GW to 2.75 GW and capital expenditures of approximately $100 million.

As a result of the restructuring of its commercial direct business, the company expects fiscal year 2020 Adjusted EBITDA guidance in the range of $125 million to $175 million.

The company will host a conference call for investors this afternoon to discuss its fourth quarter and fiscal year 2019 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 and fiscal year 2019 performance on the Events and Presentations section of SunPower's Investor Relations page at http://investors.sunpower.com/events.cfm.

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) statements regarding the anticipated spin-off of Maxeon Solar, including timing and certainty, the associated benefits and costs to the newly separated companies, and the equity investment by TZS into Maxeon Solar and the use of proceeds from such investment; (b) our plans and expectations regarding expansion of Maxeon 5 production; (c) our expectations regarding business restructuring and anticipated impact on financial performance; (d) our expectations and plans regarding market traction, growth, demand, and volume; (e) our plans and expectations for our products and planned products, including anticipated markets and demand, cost impacts, and impacts on our financial performance and our ability to meet our targets and goals; (f) our plans and expectations for initiatives to improve execution and performance in our Commercial Direct business, including timing and anticipated impact on financial performance and the anticipated timing of returning to profitability; (g) our plans and expectations regarding manufacturing expansion, and production goals and ramps, including the timing of our Maxeon 5 and P-Series production expansion; (h) our expectations regarding 2020 financial performance, including plans to achieve positive cash flow and improve profitability;  (i) our first quarter fiscal 2020 guidance, including GAAP revenue, gross margin, and net income/(loss), as well as non-GAAP revenue, gross margin, Adjusted EBITDA, and MW deployed, and related assumptions; and (j) fiscal year 2020 guidance, including, GAAP and non-GAAP revenue, net income/(loss), non-GAAP operational expenses, non-GAAP GW deployed, non- GAAP capital expenditures, and Adjusted EBITDA, 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) challenges in executing transactions key to our strategic plans, including regulatory and other challenges that may arise; (2) 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; (3) competition in the solar and general energy industry and downward pressure on selling prices and wholesale energy pricing; (4) our liquidity, substantial indebtedness, and ability to obtain additional financing for our projects and customers; (5) changes in public policy, including the imposition and applicability of tariffs; (6) regulatory changes and the availability of economic incentives promoting use of solar energy; (7) fluctuations in our operating results; (8) potential disruptions to our operation and supply chain that may result from epidemics or natural disasters; (9) appropriately sizing our manufacturing capacity and containing manufacturing and logistics difficulties that could arise; and (10) challenges managing our acquisitions, joint ventures and partnerships, including our ability to successfully manage acquired assets and supplier relationships. In addition, the proposed and the associated investment by TZS in Maxeon Solar may not be consummated within the anticipated period or at all and the ultimate results of any separation depend on a number of factors, including the development of final plans and the impact of local regulatory requirements.  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.

©2020 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. 29, 2019
Dec. 30, 2018
Assets


Current assets:


Cash and cash equivalents $422,955
$309,407
Restricted cash and cash equivalents, current portion 26,348
41,762
Restricted short-term marketable securities 6,187
-
Accounts receivable, net 226,476
175,605
Contract assets 99,426
58,994
Inventories 358,257
308,146
Advances to suppliers, current portion 107,388
37,878
Project assets - plants and land, current portion 12,650
10,796
Prepaid expenses and other current assets 121,244
131,183
Total current assets 1,380,931
1,073,771




Restricted cash and cash equivalents, net of current portion 9,354
12,594
Restricted long-term marketable securities -
5,955
Property, plant and equipment, net 323,726
839,871
Operating lease right-of-use assets 51,258
-
Solar power systems leased and to be leased, net 54,338
92,557
Advances to suppliers, net of current portion 13,993
133,694
Long-term financing receivables, net - held for sale -
19,592
Other intangible assets, net 7,466
12,582
Other long-term assets 330,855
162,033
Total assets $2,171,921
$2,352,649




Liabilities and Equity


Current liabilities:


Accounts payable $441,759
$325,550
Accrued liabilities 203,890
235,252
Operating lease liabilities, current portion 9,463
-
Contract liabilities, current portion 138,441
104,130
Short-term debt 104,856
40,074
Total current liabilities 898,409
705,006




Long-term debt 113,827
40,528
Convertible debt 820,259
818,356
Operating lease liabilities, net of current portion 46,089
-
Contract liabilities, net of current portion 67,538
99,509
Other long-term liabilities 204,300
839,136
Total liabilities 2,150,422
2,502,535




Equity:


Preferred stock -
-
Common stock 168
141
Additional paid-in capital 2,661,819
2,463,370
Accumulated deficit (2,449,679)
(2,480,988)
Accumulated other comprehensive loss (9,512)
(4,150)
Treasury stock, at cost (192,633)
(187,069)
Total stockholders' deficit 10,163
(208,696)
Noncontrolling interests in subsidiaries 11,336
58,810
Total deficit 21,499
(149,886)
Total liabilities and equity $2,171,921
$2,352,649

SUNPOWER CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(Unaudited)













THREE MONTHS ENDED TWELVE MONTHS ENDED


Dec. 29, 2019
Sep. 29, 2019
Dec. 30, 2018
Dec. 29, 2019
Dec. 30, 2018











Revenue:









   SunPower Energy Services
$352,226
$277,688
$265,427
$1,019,861
$1,045,614
   SunPower Technologies
434,708
333,896
277,256
1,314,379
1,069,010
Intersegment eliminations
(183,173)
(135,626)
(85,846)
(470,015)
(388,539)
Total revenue
603,761
475,958
456,837
1,864,225
1,726,085
Cost of revenue:









   SunPower Energy Services
306,698
248,417
245,301
915,455
889,410
   SunPower Technologies 
369,363
315,293
296,872
1,285,241
1,496,909
Intersegment eliminations
(167,439)
(136,003)
(77,765)
(462,376)
(363,153)
Total cost of revenue
508,622
427,707
464,408
1,738,320
2,023,166
Gross profit (loss)
95,139
48,251
(7,571)
125,905
(297,081)
Operating expenses:









Research and development
18,262
16,101
15,481
67,515
81,705
Sales, general and administrative
70,875
64,734
53,839
260,443
260,111
Restructuring charges 
8,039
4,283
(1,107)
14,110
17,497
Loss on sale and impairment of residential lease assets
(2,931)
10,756
81,086
25,352
251,984
Gain on business divestiture
-
-
-
(143,400)
(59,347)
Total operating expenses
94,245
95,874
149,299
224,020
551,950
Operating income (loss)
894
(47,623)
(156,870)
(98,115)
(849,031)
Other income (expense), net:









Interest income
259
1,025
777
2,702
3,057
Interest expense
(9,489)
(10,649)
(30,214)
(53,353)
(108,011)
Other, net
28,709
45,184
6,539
174,734
55,314
Other income (expense), net
19,479
35,560
(22,898)
124,083
(49,640)
Income (loss) before income taxes and equity in losses of unconsolidated investees 
20,373
(12,063)
(179,768)
25,968
(898,671)
(Provision) benefit for income taxes
(9,388)
(5,378)
8,379
(26,631)
(1,010)
Equity in losses of unconsolidated investees
(5,008)
(1,767)
(757)
(7,058)
(17,815)
Net income (loss)
5,977
(19,208)
(172,146)
(7,721)
(917,496)
    Net income (loss) attributable to noncontrolling interests and redeemable noncontrolling interests
(537)
4,191
13,972
29,880
106,405
Net income (loss) attributable to stockholders
$5,440
$(15,017)
$(158,174)
$22,159
$(811,091)






















Basic net income (loss) per share attributable to stockholders
$ 0.04
$ (0.11)
$ (1.12)
$ 0.15
$ (5.76)
Diluted net income (loss) per share attributable to stockholders
$ 0.03
$ (0.11)
$ (1.12)
$ 0.15
$ (5.76)











Basic weighted-average shares
152,439
142,553
141,136
144,796
140,825
Diluted weighted-average shares
156,004
142,553
141,136
147,525
140,825

SUNPOWER CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)













THREE MONTHS ENDED TWELVE MONTHS ENDED


Dec. 29, 2019
Sep. 29, 2019
Dec. 30, 2018
Dec. 29, 2019
Dec. 30, 2018











Cash flows from operating activities:









Net income (loss)
$5,977
$(19,208)
$(172,146)
$(7,721)
$(917,496)
Adjustments to reconcile net income (loss) to net cash used in operating activities:









Depreciation and amortization
18,059
15,298
24,060
80,081
127,204
Stock-based compensation
8,008
6,991
6,266
26,935
26,353
Non-cash interest expense
2,005
2,542
3,213
9,472
15,346
Non-cash restructuring charges
-
3,528
-
5,874
-
Dividend from equity method investee
-
-
-
-
3,947
Equity in losses of unconsolidated investees
5,008
1,767
756
7,058
17,815
Mark-to-market (gain) loss on equity investment with readily determinable fair value
(29,250)
(28,538)
150
(158,288)
6,375
Gain on business divestiture
-
-
-
(143,400)
(59,347)
Gain on sale of investments without readily determinable fair value
-
(17,275)
(3,628)
(17,275)
(54,196)
Deferred income taxes
4,567
(1,545)
(9,868)
5,067
(6,862)
Impairment of equity method investment
-
-
-
-
-
Impairment of property, plant and equipment
-
-
-
777
369,168
(Gain) Loss on sale and impairment of residential lease assets
(2,931)
10,755
81,086
33,778
251,984
Gain on sale of assets
(3,829)
(21,383)
-
(25,212)
-
Other, net
-
-
(1,059)
-
(6,796)
Accounts receivable
(20,484)
2,921
18,916
(66,194)
(175)
Contract assets
(20,139)
(25,516)
(5,495)
(38,246)
(43,509)
Inventories
(20,311)
(45,989)
64,617
(128,404)
(39,174)
Project assets
7,050
(3,040)
48,652
(2,188)
39,512
Prepaid expenses and other assets
(10,228)
16,967
(17,161)
(8,746)
22,763
Operating lease right-of-use assets
2,311
14,999
-
8,530
-
Long-term financing receivables, net - held for sale
-
481
(31,006)
(473)
(182,937)
Advances to suppliers
16,899
8,518
15,236
50,191
44,417
Accounts payable and other accrued liabilities
15,384
52,810
(58,230)
79,394
(127,286)
Contract liabilities
19,404
4,709
9,328
27,531
(30,495)
Operating lease liabilities
(1,752)
(15,865)
-
(8,954)
-
Net cash used in operating activities
(4,252)
(36,073)
(26,313)
(270,413)
(543,389)
Cash flows from investing activities:









Purchases of property, plant and equipment
(12,295)
(16,896)
(7,198)
(47,395)
(44,906)
Cash paid for solar power systems, leased, net
-
-
(12,953)
-
(68,612)
Cash paid for solar power systems
(1,458)
(8,503)
(37,468)
(53,284)
(41,808)
Cash outflow from sale of residential lease portfolio, net of cash sold
-
-
-
-
-
Proceeds from sale of cost method investment
-
-
-
-
-
Cash paid for acquisitions, net of cash acquired
-
-
(17,000)
-
(17,000)
Dividend from equity method investee
-
-
-
-
12,952
Proceeds from sale of investments
-
42,957
35,942
42,957
453,708
Proceeds from sale of assets
20,000
39,742
-
59,970
-
Proceeds from business divestiture, net of cash sold
-
-
10,000
40,491
23,257
Proceeds from sale of distribution rights of debt refinancing
1,950
-
-
1,950
-
Cash outflow from sale of residential lease portfolio, net of cash received
5,474
(16,397)
(28,004)
(10,923)
(28,004)
Cash paid for investments in unconsolidated investees
-
(2,400)
(626)
(12,400)
(14,687)
Net cash provided by (used in) investing activities
13,671
38,503
(57,307)
21,366
274,900
Cash flows from financing activities:









Proceeds from bank loans and other debt
150,439
87,823
60,199
381,928
227,676
Repayment of 0.75% debentures due 2018, bank loans and other debt
(61,920)
(84,035)
(59,023)
(271,015)
(535,252)
Proceeds from issuance of non-recourse residential financing, net of issuance costs
-
6,528
5,079
72,259
192,287
Repayment of non-recourse residential financing
-
(1,803)
(2,427)
(2,959)
(17,358)
Contributions from noncontrolling interests and redeemable noncontrolling interests attributable to residential projects
4,371
1,842
43,526
35,790
151,204
Distributions to noncontrolling interests and redeemable noncontrolling interests attributable to residential projects
-
-
(2,742)
(316)
(21,918)
Proceeds of common stock equity offering, net of offering costs
171,834
-
-
171,834
-
Proceeds from issuance of non-recourse power plant and commercial financing, net of issuance costs
3,004
-
75,754
3,004
126,020
Repayment of non-recourse power plant and commercial financing
-
-
(26,383)
-
(31,282)
Payment for prior business combination
(30,000)
-
-
(39,000)
-
Settlement of contingent consideration arrangement, net of cash received
802
-
-
(1,646)
-
Purchases of stock for tax withholding obligations on vested restricted stock
(908)
(292)
(281)
(5,565)
(5,530)
Net cash provided by (used in) financing activities
237,622
10,063
93,702
344,314
85,847
Effect of exchange rate changes on cash, cash equivalents, restricted cash and restricted cash equivalents
881
(1,510)
1,296
(374)
2,068
Net increase (decrease) in cash, cash equivalents, restricted cash and restricted cash equivalents
247,922
10,983
11,378
94,893
(180,574)
Cash, cash equivalents, restricted cash and restricted cash equivalents, beginning of period
210,735
199,752
352,385
363,763
544,337
Cash, cash equivalents, restricted cash and restricted cash equivalents, end of period
$458,657
$210,735
$363,763
$458,657
$363,763

































Non-cash transactions:









Stock consideration received from business divestiture
$ -
$ -
$ -
$ -
$42,600
Costs of solar power systems, leased, sourced from existing inventory
$ -
$ -
$  5,975
$ -
$36,384
Costs of solar power systems, leased, funded by liabilities
$ -
$ -
$  3,631
$ -
$3,631
Costs of solar power systems sourced from existing inventory
$21,173
$8,033
$ -
$29,206
$  -
Costs of solar power systems funded by liabilities
$2,671
$3,604
$ -
$2,671
$  -
Costs of solar power systems under sale-leaseback financing arrangements, sourced from project assets 
$ -
$ -
$56,332
$ -
$86,540
Property, plant and equipment acquisitions funded by liabilities
$13,745
$11,911
$ 8,214
$13,745
$8,214
Contractual obligations satisfied with inventory
$ -
$ -
$ 7,924
$ -
$56,840
Acquisition of noncontrolling interests funded by Mezzanine Loan proceeds
$ -
$ -
$ -
$ -
$12,400
Assumption of debt by buyer upon sale of equity interest
$ -
$ -
$ -
$ -
$27,321
Assumption of debt by buyer in connection with sale of residential lease assets
$ -
$69,076
$561,588
$69,076
$561,588
Acquisition funded by liabilities
$ -
$ -
$ 9,000
$ -
$ 9,000
Retained interest in SunStrong lease portfolio
$ -
$ -
$ 9,750
$ -
$ 9,750
Receivables in connection with sale of residential lease assets
$2,570
$8,043
$12,510
$2,570
$12,510
Right-of-use assets obtained in exchange for lease obligations
$7,398
$8,939
$ -
$111,142
$ -
Derecognition of financing obligations upon business divestiture
$ -
$ -
$ -
$590,884
$ -
Holdback related to business divestiture
$1,927
$ -
$ -
$1,927
$ -
Holdback related to sale of manufacturing facility
$ -
$18,300
$ -
$ -
$ -
Aged supplier financing balances reclassified from AP to short-term debt
$22,500
$22,852
$ -
$45,352
$ -
Settlement of prior debt obligation with inventory
$1,701
$ -
$ -
$1,701
$ -

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; net loss 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.

Non-GAAP revenue includes adjustments relating to 8point3, legacy utility and power plant projects, legacy sale-leaseback transactions and construction services for residential customer contracts, each of which is described below. In addition to the above adjustments, non-GAAP gross margin includes adjustments relating to business process improvement costs, loss on sale and impairment of residential lease assets, impairment of property, plant, and equipment, cost of above-market polysilicon, litigation, stock-based compensation, amortization of intangible assets, and depreciation of idle equipment, each of which is described below. In addition to the above adjustments, non-GAAP net loss and non-GAAP net loss per diluted share are adjusted for adjustments relating to mark to market (gain) loss on equity investments, gain on business divestiture, transaction-related costs, business reorganization costs, non-cash interest expense, restructuring charges, and tax effect of these non-GAAP adjustments, each of which is described below. In addition to the above adjustments , Adjusted EBITDA includes adjustments relating to cash interest expense (net of interest income), provision for income taxes, and depreciation.

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

The company's non-GAAP results include adjustments under IFRS that are consistent with the adjustments made in connection with the company's internal reporting process as part of its status as a consolidated subsidiary of Total S.A., our controlling shareholder and a foreign public registrant that reports under IFRS. Differences between GAAP and IFRS reflected in the company's non-GAAP results are further described below. In these situations, management believes that IFRS enables investors to better evaluate the company's performance, and assists in aligning the perspectives of the management with those of Total S.A.

  • 8point3: Historically, the company included adjustments related to the sales of projects contributed to 8point3 Group, an equity method investee ("8point3") 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. The deferred profit was subsequently recognized over time. Under GAAP, these sales were 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. IFRS profit, less deferrals associated with retained equity, is recognized for sales related to the residential lease portfolio. Revenue for other projects sold was deferred until those projects reach commercial operation. On June 19, 2018, the company sold its equity interest in the 8point3 Group.
  • Legacy utility and power plant projects: The company included adjustments related to the revenue recognition of certain utility and power plant projects based on percentage-of-completion accounting and, when relevant, the allocation of revenue and margin to our project development efforts at the time of initial project sale. Under IFRS, such projects were accounted for when the customer obtains control of the promised goods or services which generally results in earlier recognition of revenue and profit than U.S. GAAP. Over the life of each project, cumulative revenue and gross margin are eventually equivalent under both GAAP and IFRS; however, revenue and gross margin is generally recognized earlier under IFRS.
  • Legacy sale-leaseback transactions: The company included adjustments related to the revenue recognition on certain legacy sale-leaseback transactions entered into before December 31, 2018, based on the net proceeds received from the buyer-lessor. Under U.S. GAAP, these transactions were accounted for under the financing method in accordance with the applicable 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 our incremental borrowing rate adjusted solely to prevent negative amortization. Under IFRS, such revenue and profit is recognized at the time of sale to the buyer-lessor if certain criteria are met. Upon adoption of IFRS 16, Leases, on December 31, 2018, IFRS is aligned with GAAP.
  • Mark-to-market (gain) loss in equity investments: 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, mark-to-market gains and losses due to changes in stock prices for these securities are recorded in earnings while under IFRS, an election can be made to recognize such gains and losses in other comprehensive income. Such an election was made by Total S.A. 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 such investments. Management believes that excluding these adjustments on equity investments is consistent with our internal reporting process as part of its status as a consolidated subsidiary of Total S.A. and better reflects our ongoing results.

Other Non-GAAP Adjustments

  • Business process improvement costs: During fiscal 2019, the company initiated a project to improve its manufacturing and related processes to improve gross margin in coming years and engaged third party experts to consult on business process improvements. Management believes it is appropriate to exclude these consulting expenses from our non-GAAP results as they are non-recurring in nature, and are not reflective of the company's ongoing operating results.
  • Loss (gain) on sale and impairment 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, the company sold membership units representing a 49% membership interest in its residential lease business and retained a 51% membership interest. The loss on divestment and the remaining unsold residential lease assets impairment with its corresponding depreciation savings are excluded from the company's non-GAAP results as they are non-cash in nature and not reflective of ongoing operating results. Additionally, in the third quarter of fiscal 2019, in continuation with our intention to deconsolidate all the residential lease assets owned by us, we sold the remainder of residential lease assets still owned by us, that were not previously sold. Gain/loss from such activity is excluded from the company's non-GAAP results as it is non-cash in nature and not reflective of ongoing operating results.
  • Impairment of property, plant, and equipment: The Company evaluates property, plant and equipment for impairment whenever certain triggering events or changes in circumstances arise. This evaluation includes consideration of technology obsolescence that may indicate that the carrying value of such assets may not be recoverable.  In accordance with such evaluation, the company recognizes a non-cash impairment charge when the asset group's fair value is lower than its carrying value. Such impairment charge is excluded from the company's non-GAAP results as it is non-recurring in nature and not reflective of ongoing operating results. Any such non-recurring impairment charge recorded by our equity method or other unconsolidated investees is also excluded from our non-GAAP results as it is not reflective of their ongoing operating results.
  • Construction revenue on solar services contracts: Upon adoption of the new lease accounting guidance ("ASC 842") in the first quarter of fiscal 2019, revenue and cost of revenue on solar services contracts with residential customers are recognized ratably over the term of those contracts, once the projects are placed in service. For non-GAAP results, the company recognizes revenue and cost of revenue upfront based on the expected cash proceeds to align with the legacy lease accounting guidance. Management believes it is appropriate to recognize revenue and cost of revenue upfront based on total expected cash proceeds, as it better reflects the company's ongoing results as such method aligns revenue and costs incurred most accurately in the same period.
  • 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 results as they are not reflective of ongoing operating results.
  • 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, which are not reflective of ongoing operating results.
  • 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 results as it is non-cash in nature and not reflective of ongoing operating results.
  • Gain on business divestiture: In the second quarter of fiscal 2019, the company entered into a transaction pursuant to which it sold membership interest in certain of its subsidiaries that own leasehold interests in projects subject to sale-leaseback financing arrangements. In connection with this sale, the company recognized a gain relating to this 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 both of these gains from the company's non-GAAP results as it is not reflective of ongoing operating results.
  • Litigation: The company may be involved in various litigations, claims and proceedings that result in payments or recoveries from such proceedings. The company excludes any gains or losses on such litigation recoveries or payments from the non-GAAP results as it is not reflective of ongoing operating results.
  • Transaction-related costs: In connection with material non-recurring transactions such as acquisition or divestiture of a business, the company incurred transaction costs including legal and accounting fees. Management believes that it is appropriate to exclude these costs from the company's non-GAAP results as it is not reflective of ongoing operating results.
  • Business reorganization costs: In connection with the reorganization of our business into an upstream and downstream, and subsequent announcement of the separation transaction to separate the Company into two independent, and publicly traded companies, we incurred and expect to continue to incur in upcoming quarters, non-recurring charges on third-party legal and consulting expenses to close the separation transaction. The company believes that it is appropriate to exclude these from company's non-GAAP results as it is 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 charges: 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. 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. The company believes that it is appropriate to exclude these from company's non-GAAP results as it is not reflective of 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. 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 of the following items during the period:
  • Cash interest expense, net of interest income
  • Provision for income taxes
  • Depreciation

For more information about these non-GAAP financial measures, please see the tables captioned "Reconciliations of GAAP Measures to Non-GAAP Measures" set forth at the end of this release, which should be read together with the preceding financial statements prepared in accordance with GAAP.

SUNPOWER CORPORATION
RECONCILIATIONS OF GAAP MEASURES TO NON-GAAP MEASURES
(In thousands, except percentages and per share data)
(Unaudited)










Adjustments to Revenue:










THREE MONTHS ENDED
TWELVE MONTHS ENDED


Dec. 29, 2019
Sep. 29, 2019 Dec. 30, 2018
Dec. 29, 2019
Dec. 30, 2018


               
GAAP revenue
$603,761
$475,958 $456,837
$1,864,225
$1,726,085
Adjustments based on IFRS:








8point3
-
- -
-
(8,588)
Legacy utility and power plant projects
(44)
(65) (691)
(303)
(4,145)
Legacy sale-leaseback transactions
-
- 69,254
-
101,581
Other adjustments:








Construction revenue on solar services contracts
3,235
15,790 -
128,144
-
Non-GAAP revenue
$ 606,952
$ 491,683 $525,400
$1,992,066
$1,814,933




















Adjustments to Gross Profit (Loss) / Margin:










THREE MONTHS ENDED
TWELVE MONTHS ENDED


Dec. 29, 2019
Sep. 29, 2019 Dec. 30, 2018
Dec. 29, 2019
Dec. 30, 2018


               
GAAP gross profit (loss)
$95,139
$48,251 $(7,571)
$125,905
$ (297,081)
Adjustments based on IFRS:








8point3
-
- -
-
(8,337)
Legacy utility and power plant projects
-
(7) (569)
993
(1,244)
Legacy sale-leaseback transactions
(75)
(181) 6,132
(4,763)
242
Other adjustments:








Business process improvement costs
1,091
2,279 -
3,370
-
Construction revenue on solar service contracts
1,966
1,160 -
20,018
-
(Gain) loss on sale and impairment of residential lease assets
(435)
(511) (2,163)
(1,703)
(14,847)
Impairment of property, plant and equipment
-
- -
-
355,107
Cost of above-market polysilicon
27,549
23,878 37,231
126,805
87,228
Litigation
(2,515)
- -
(2,515)
-
Stock-based compensation expense
1,559
1,522 1,236
4,382
4,996
Amortization of intangible assets
1,783
1,783 1,889
7,135
8,966
Depreciation of idle equipment 
-
- -
-
721
Non-GAAP gross profit
$126,062
$78,174 $36,185
279,627
$135,751










GAAP gross margin (%)
15.8%
10.1% -1.7%
6.8%
-17.2%
Non-GAAP gross margin (%)
20.8%
15.9% 6.9%
14.0%
7.5%




















Adjustments to Net income (loss):










THREE MONTHS ENDED
TWELVE MONTHS ENDED


Dec. 29, 2019
Sep. 29, 2019 Dec. 30, 2018
Dec. 29, 2019
Dec. 30, 2018


               
GAAP net income (loss) attributable to stockholders
$5,440
$ (15,017) $(158,174)
$22,159
$ (811,091)
Adjustments based on IFRS:








8point3
-
- -
-
(8,485)
Legacy utility and power plant projects
-
(7) (569)
993
(1,244)
Legacy sale-leaseback transactions
(75)
(181) 10,984
5,680
18,802
Mark-to-market (gain) loss on equity investments
(28,250)
(27,595) 150
(156,345)
6,375
Other adjustments:








Business process improvements costs
1,091
2,279 -
3,370
-
Construction revenue on solar services contracts
1,966
1,160 -
(7,012)
-
(Gain) Loss on sale and impairment of residential lease assets
(3,366)
5,135 81,273
25,636
227,507
Impairment of property, plant and equipment
4,053
- -
4,053
369,168
Cost of above-market polysilicon
27,549
23,878 37,231
126,805
87,228
Litigation
(2,509)
- -
(2,509)
-
Stock-based compensation expense
8,006
6,992 6,424
26,934
28,215
Amortization of intangible assets
1,783
1,783 1,889
7,135
8,966
Depreciation of idle equipment 
-
- -
-
721
Gain on business divestiture
-
- -
(143,400)
(59,347)
Transaction-related costs
1,723
976 (3,142)
5,294
17,727
Business reorganization costs
10,696
6,066 1,330
23,567
1,330
Non-cash interest expense
3
10 10
33
68
Restructuring charges
8,039
4,283 (1,107)
14,110
17,497
Tax effect
(384)
880 (6,605)
1,345
(4,797)
Non-GAAP net loss attributable to stockholders
$35,765
$10,642 $(30,306)
$(42,152)
$(101,360)




















Adjustments to Net income (loss) per diluted share:










THREE MONTHS ENDED
TWELVE MONTHS ENDED


Dec. 29, 2019
Sep. 29, 2019 Dec. 30, 2018
Dec. 29, 2019
Dec. 30, 2018


               
Net income (loss) per diluted share








Numerator:








GAAP net income (loss) available to common stockholders
$5,440
$(15,017) $(158,174)
$22,159
$(811,091)
          GAAP net income (loss) available to common stockholders
 

$5,440
$(15,017) $(158,174)
$22,159
$(811,091)
Non-GAAP net income (loss) available to common stockholders
$35,765
$10,642 $(30,306)
$(42,152)
$(101,360)










Denominator:








GAAP weighted-average shares
152,439
142,553 141,136
144,796
140,825
Effect of dilutive securities:








Restricted stock units
3,565
- -
2,729
-
GAAP dilutive weighted-average common shares:
156,004
142,553 141,136
147,525
140,825










Non-GAAP weighted-average shares1
152,439
142,533 141,136
144,796
140,825
Effect of dilutive securities:








Restricted stock units
3,565
4,826 -
-
-
Non-GAAP weighted-average shares1
156,004
147,379 141,136
144,796
140,835










GAAP net income (loss) per diluted share
$0.03
$(0.11) $(1.12)
$0.15
$(5.76)
Non-GAAP net loss per diluted share
$0.23
$0.07 $(0.21)
$(0.29)
$(0.72)










1. In 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. 29, 2019
Sep. 29, 2019 Dec. 30, 2018
Dec. 29, 2019
Dec. 30, 2018


               
GAAP net income (loss) attributable to stockholders
$5,440
$(15,017) $(158,174)
$22,159
$(811,091)
Adjustments based on IFRS:








8point3
-
- -
-
(8,485)
Legacy utility and power plant projects
-
(7) (569)
993
(1,244)
Legacy sale-leaseback transactions
(75)
(181) 10,984
5,680
18,802
Mark-to-market (gain) loss on equity investment
(28,250)
(27,595) 150
(156,345)
6,375
Other adjustments:








Business process improvement costs
1,091
2,279 -
3,370
-
Construction revenue on solar services contracts
1,966
1,160 -
(7,012)
-
(Gain) loss on sale and impairment of residential lease assets
(3,366)
5,135 81,273
25,636
227,507
Impairment of property, plant and equipment
4,053
- -
4,053
369,168
Cost of above-market polysilicon
27,549
23,878 37,231
126,805
87,228
Litigation
(2,509)
- -
(2,509)
-
Stock-based compensation expense
8,006
6,992 6,424
26,934
28,215
Amortization of intangible assets
1,783
1,783 1,889
7,135
8,966
Depreciation of idle equipment 
-
- -
-
721
Gain on business divestiture
-
- -
(143,400)
(59,347)
Transaction-related costs
1,723
976 (3,142)
5,294
17,727
Business reorganization costs
10,696
6,066 1,330
23,567
1,330
Non-cash interest expense
3
10 10
33
68
Restructuring charges
8,039
4,283 (1,107)
14,110
17,497
Cash interest expense, net of interest income
9,229
9,624 24,584
40,207
86,394
Provision for income taxes
9,388
5,378 (8,379)
26,631
1,010
Depreciation
16,773
17,205 21,054
74,445
120,367
Adjusted EBITDA
$71,539
$41,969 $13,558
$97,786
$111,208

FY 2020 GUIDANCE

(in thousands except percentages) Q1 2020 FY 2020
Revenue (GAAP) $435,000-$470,000 $2,100,000-$2,300,000
Revenue (non-GAAP) $435,000-$470,000 $2,100,000-$2,300,000
Gross margin (GAAP) 3% - 6% N/A
Gross margin (non-GAAP)1 9% - 12% N/A
Net loss (GAAP) $(85,000)-$(70,000) $(195,000)-$(145,000)
Adjusted EBITDA2 $(15,000)-$0 $125,000-$175,000
1. Estimated non-GAAP amounts above for Q1 2020 include net adjustments that increase gross margin by approximately $22 million related to cost of above-market polysilicon, $1 million related to stock-based compensation expense, and $2 million related to amortization of intangible assets.
2. Estimated Adjusted EBITDA amounts above for Q1 2020 include net adjustments that decrease net loss by approximately $22 million related to cost of above-market polysilicon, $16 million related to depreciation, $10 million in business reorganization costs, $10 million related to stock-based compensation expense, $8 million related to interest expense, $2 million related to amortization of intangible assets, $1 million related to restructuring charges, and $1 million related to income taxes. Estimated non-GAAP amounts above for fiscal 2020 include net adjustments that decrease net loss by approximately $115 million related to cost of above-market polysilicon, $64 million related to depreciation, $40 million related to stock-based compensation expense, $37 million related to interest expense, $37 million related to business reorganization charges, $15 million related to income taxes, $8 million related to amortization of intangible assets, and $4 million related to restructuring charges.













































































SUNPOWER CORPORATION


(In thousands, except percentages)


THREE MONTHS ENDED







































December 29, 2019




Revenue 
Gross profit / margin 
Operating expenses






 




SunPower Energy Services
SunPower Technologies
Intersegment eliminations
SunPower Energy Services
SunPower Technologies
Intersegment eliminations

Research and
development 

Sales, general
and administrative 

Restructuring charges 
Loss on sale and impairment of residential lease assets 
Other income (expense), net 
Provision for income taxes 
Equity in earnings of unconsolidated investees 
Net income (loss) attributable to non-controlling interests 

GAAP
$352,226
$434,708
$(183,173)
$45,528
12.9%
$65,345
15.0%
$(15,734)















$5,440


Adjustments based on IFRS:



































Legacy utility and power plant projects
-
(44)
-
-


-


-

-
-
-
-
-
-
-
-


Legacy sale-leaseback transactions
-
-
-
(75)


-


-

-
-
-
-
-
-
-
(75)


Mark-to-market gain on equity investments
-
-
-
-


-


-

-
-
-
-
(29,250)
-
1,000
(28,250)


Other adjustments:



































Business process improvement costs
-
-
-
-


1,091


-

-
-
-
-
-
-
-
1,091


Loss on sale and impairment of residential lease assets
-
-
-
(435)


-


-

-
-
-
(2,931)
-
-
-
(3,366)


Construction revenue on solar services contracts
3,235
-
-
1,966


-


-

-
-
-
-
-
-
-
1,966


Impairment of property, plant & equipment
-
-
-
-


-


-

-
-
-
-
-
-
4,053
4,053


Cost of above-market polysilicon
-
-
-
-


29,181


(1,632)

-
-
-
-
-
-
-
27,549


Litigation
-
-
-
709


(3,224)


-

-
6
-
-
-
-
-
(2,509)


Stock-based compensation expense
-
-
-
1,020


539


-

824
5,623
-
-
-
-
-
8,006


Amortization of intangible assets
-
-
-
-


1,783


-

-
(0)
-
-
-
-
-
1,783


Business reorganization costs
-
-
-
-


-


-

569
10,127
-
-
-
-
-
10,696


Transaction-related costs
-
-
-
-


-


-

-
1,723
-
-
-
-
-
1,723


Non-cash interest expense
-
-
-
-


-


-

-
3
-
-
-
-
-
3


Restructuring charges
-
-
-
-


-


-

-
-
8,039
-
-
-
-
8,039


Tax effect
-
-
-
-


-


-

-
-
-
-
-
(384)
-
(384)


Non-GAAP
$355,461
$434,664
$ (183,173)
$48,713
13.7%
$94,715
21.8%
$(17,366)















$35,765














































































September 29, 2019


Revenue 
Gross profit / margin 
Operating expenses 











SunPower Energy Services
SunPower Technologies
Intersegment eliminations
SunPower Energy Services
SunPower Technologies
Intersegment eliminations

 Research and
development 

 Sales, general
and administrative 

 Restructuring charges 
 Loss on sale and impairment of residential lease assets 
 Other income (expense), net 
 Benefit from income taxes 
Equity in earnings of unconsolidated investees
 Loss attributable to non-controlling interests 
 Net income (loss) attributable to stockholders 
GAAP
$277,688
$333,896
$(135,626)
$29,271
10.5%
$18,603
5.6%
$  377

















$ (15,017)
Adjustments based on IFRS:



































Legacy utility and power plant projects
-
(65)
-
(7)


-


-

-
-
-
-
-
-
-
-
(7)
Legacy sale-leaseback transactions
-
-
-
(181)


-


-

-
-
-
-
-
-
-
-
(181)
Mark-to-market gain on equity investments
-
-
-
-


-


-

-
-
-
-
(28,548)
-
953
-
(27,595)
Other adjustments:



































Business process improvement costs
-
-
-
-


2,279


-

-
-
-
-
-
-
-
-
2,279
Loss on sale and impairment of residential lease assets
-
-
-
(511)


-


-

-
-
-
10,756
-
-
-
(5,110)
5,135
Construction revenue on solar services contracts
15,790
-
-
1,160


-


-

-
-
-
-
-
-
-
-
1,160
Cost of above-market polysilicon
-
-
-
-


29,633


(5,755)

-
-
-
-
-
-
-
-
23,878
Stock-based compensation expense
-
-
-
741


781


-

903
4,567
-
-
-
-
-
-
6,992
Amortization of intangible assets
-
-
-
-


1,783


-

-
-
-
-
-
-
-
-
1,783
Business reorganization costs
-
-
-
-


-


-

-
6,066
-
-
-
-
-
-
6,066
Transaction-related costs
-
-
-
-


-


-

-
976
-
-
-
-
-
-
976
Non-cash interest expense
-
-
-
-


-


-

-
10
-
-
-
-
-
-
10
Restructuring charges
-
-
-
-


-


-

-
-
4,283
-
-
-
-
-
4,283
Tax effect
-
-
-
-


-


-

-
-
-
-
-
880
-
-
880
Non-GAAP
$293,478
$333,831
$ (135,626)
$30,473
10.4%
$53,079
15.9%
$(5,378)

















$10,642

















































































































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 
 Loss on sale and impairment and sale of residential lease asset 
 Other income (expense), net 
 Benefit from  income taxes 
 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)


Legacy sale-leaseback transactions
69,254
-
-
6,113


19


-

-
-
-
-
4,852
-
-
10,984


Mark-to-market gain on equity investments
-
-
-
-


-


-

-
-
-
-
150
-
-
150


Other adjustments:



































Loss on sale and impairment 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 charges
-
-
-
-


-


-

-
-
(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)
























































































































































TWELVE MONTHS ENDED







































December 29, 2019


 Revenue 
 Gross profit / margin 
 Operating expenses 
Other income (expense), net 
Benefit from (provision for)  income taxes 
Equity in losses of unconsolidated investees 
Loss attributable to non-controlling interests  Net income (loss) attributable to stockholders 


SunPower Energy Services
SunPower Technologies
Intersegment eliminations
SunPower Energy Services
SunPower Technologies
Intersegment eliminations

Research and
development 

Sales, general
and administrative 

Restructuring charges 
Loss on sale and impairment of residential lease assets 
Gain on business divestiture 



GAAP
$1,019,861
$1,314,379
$(470,015)
$104,406
10.2%
$29,138
2.2%
$(7,639)


















$22,159
Adjustments based on IFRS:



































8point3
-
-
-
-


-


-

-
-
-
-
-
-
-
-
- -
Legacy utility and power plant projects
-
(303)
-
118


875


-

-
-
-
-
-
-
-
-
- 993
Legacy sale-leaseback transactions
-
-
-
(4,764)


1


-

-
-
-
-
-
10,443
-
-
- 5,680
Mark-to-market gain on equity investments
-
-
-
-


-


-

-
-
-
-
-
(158,298)
-
1,953
- (156,345)
Other adjustments:
-
-
-
-


-


-

-
-
-
-
-
-
-
-
-
Business process improvement costs
-
-
-
-


3,370


-

-
-
-
-
-
-
-
-
- 3,370
Intersegment mark-up
-
-
-
-


-


-

-
-
-
-
-
-
-
-
- -
Loss on sale and impairment of residential lease assets
-
-
-
(1,703)


-


-

-
-
-
33,779
-
-
-
-
(6,440) 25,636
Construction revenue on solar services contracts
128,144
-
-
20,018


-


-

-
-
-
-
-
-
-
-
(27,030) (7,012)
Cost of above-market polysilicon
-
-
-
-


132,117


(5,312)

-
-
-
-
-
-
-
-
- 126,805
Litigation
-
-
-
709


(3,224)


-

-
6
-
-
-
-
-
-
- (2,509)
Impairment of property, plant & equipment
-
-
-
-


-


-

-
-
-
-
-
-
-
4,053
- 4,053
Stock-based compensation expense
-
-
-
2,389


1,993


-

3,199
19,353
-
-
-
-
-
-
- 26,934
Amortization of intangible assets
-
-
-
-


7,135


-

-
(0)
-
-
-
-
-
-
- 7,135
Gain on business divestiture
-
-
-
-


-


-

-
-
-
-
(143,400)
-
-
-
- (143,400)
Business reorganization costs
-
-
-
-


-


-

1,346
22,221
-
-
-
-
-
-
- 23,567
Transaction-related costs
-
-
-
-


-


-

-
5,294
-
-
-
-
-
-
- 5,294
Non-cash interest expense
-
-
-
-


-


-

-
33
-
-
-
-
-
-
- 33
Restructuring charges
-
-
-
-


-


-

-
-
14,110
-
-
-
-
-
- 14,110
Tax effect
-
-
-
-


-


-

-
-
-
-
-
-
1,345
-
- 1,345
Non-GAAP
$1,148,005
$1,314,076
$(470,015)
$121,173
10.6%
$171,405
13.0%
$(12,951)


















$(42,152)

















































































































December 30, 2018


 Revenue 
 Gross profit / margin 
 Operating expenses 
 Other income (expense), net 
 Benefit from (provision for) income taxes 
 Equity in earnings of unconsolidated investees 
 Loss attributable to non-controlling interests   Net income (loss) attributable to stockholders 


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 



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
Mark-to-market loss on equity investments
-
-
-
-


-


-

-
-
-
-
-
6,375
-
-
- 6,375
Other adjustments:



































Loss on sale and 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)

SOURCE: SunPower Corp.