RICHMOND, Calif., Nov. 1, 2023 /PRNewswire/ -- SunPower Corp. (NASDAQ:SPWR), a leading residential solar technology and energy services provider, today announced preliminary financial results for the third quarter, ending October 1, 2023.
"We are reducing our 2023 guidance due to lower-than-expected consumer demand as well as delayed revenue recognition from longer cycle times," said Peter Faricy, SunPower CEO. "We are focused on continuing to reduce costs while prudently managing cash. With this emphasis, we are prioritizing our efforts to build a stronger and more resilient company that can withstand changing market conditions."
"Under these conditions, SunPower is competing effectively in a difficult market and continues to gain market share†. There are also some early signs of recovery in September and October, and our battery and financial products customer attachment rates are at all-time highs," continued Faricy.
Updated 2023 Guidance
Net Loss (GAAP) | $(175) million - $(165) million |
Residential Customers | 70,000-80,000 |
Residential Adjusted EBITDA/Customer1 | $600 - $700 |
Adjusted EBITDA2 | $(35) million - $(25) million |
1. | Excluding Product & Digital operating expenses for Residential only. |
2. | Adjusted EBITDA guidance for FY 2023 includes net adjustments that decrease GAAP net loss by approximately $140 million primarily relating to the following adjustments: stock-based compensation expense of $29 million, restructuring charges of $13 million, mark-to-market (gain) loss on equity investments, net of $11 million, amortization of intangible assets and software of $12 million, interest expense of $23 million, depreciation of $46 million, income taxes of $1 million, and other non-recurring adjustments of $5 million. |
The company reduced 2023 guidance for GAAP net loss to $(175) million to $(165) million.
Guidance for Adjusted EBITDA per customer before platform investment was reduced to $600 - $700 to reflect installation and other costs spread over fewer customers than anticipated, delayed revenue recognition from longer cycle-times as well as higher year-over-year installation cost, and cost of goods sold impacted by inventory carried at cost higher than current market.
The company increased guidance for Platform Investment to $70 million - $90 million for the year, primarily to reflect higher legacy business unit costs and the restatement of prior-period inventory value.
Guidance for adjusted EBITDA for the year was reduced to $(35) million to $(25) million.
Form 8-K regarding Non-Reliance on Previously Issued Financial Statements
The company recently announced in a Form 8-K filing that it plans to restate, as soon as practicable, the financial statements for fiscal year 2022, first quarter 2023 and second quarter 2023. In connection with the preparation of the financial statements, the company preliminarily determined that the value of consignment inventory of microinverter components at certain third-party locations had been overstated in the above periods in the range of approximately $16 million to $20 million, resulting in the associated cost of revenue being understated. At this time, the Company has not fully completed its review, and the expected financial impact of the restatement described above is preliminary and subject to change.
THIRD QUARTER BUSINESS HIGHLIGHTS
"While the industry-wide softness continued into the third quarter, we saw positive signs in September and early October, including our highest-ever month for storage sales, strong growth in SunPower Financial, and improvement in consumer demand," continued Faricy.
World-class customer experience
Best, most affordable products
Growth
Digital innovation
World-class financial solutions
†Ohm Analytics Permit Data Trends (September 2023) and SunPower/Blue Raven permit data by state, excluding New Homes. |
^ Based on average of BBB, Yelp, ConsumerAffairs, BestCompany, Google, SolarReviews and EnergySage reviews scores as of 9/30/23 |
Financial Highlights
($ Millions, except percentages, residential customers, and per-share data) | 3rd Quarter 2023 | 3rd Quarter 20221 |
(As Restated) | ||
GAAP revenue from continuing operations | $432.0 | $476.3 |
GAAP gross margin from continuing operations | 15.4 % | 22.2 % |
GAAP net (loss) income from continuing operations | $(30.0) | $137.6 |
GAAP net (loss) income from continuing operations per diluted share | $(0.17) | $0.73 |
Non-GAAP revenue from continuing operations2, 5 | $432.2 | $476.3 |
Non-GAAP gross margin from continuing operations2, 4, 5 | 15.5 % | 22.4 % |
Non-GAAP net (loss) income from continuing operations2, 4, 5 | $(20.3) | $14.0 |
Non-GAAP net (loss) income from continuing operations per diluted share2, 4, 5 | $(0.12) | $0.08 |
Adjusted EBITDA2, 4, 5 | $(0.8) | $25.3 |
Residential customers | 570,500 | 486,700 |
Cash3 | $103.7 | $396.5 |
The sale of our C&I Solutions business met the criteria for classification as "discontinued operations" in accordance with U.S. GAAP beginning the first quarter of fiscal 2022. For all periods presented, the financial results of C&I Solutions are excluded in the table above. |
1 Historical comparisons are preliminary estimates ahead of the forthcoming restatement of current and prior-period financials as disclosed in our Oct 24, 2023 8-K filing. |
2 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. |
3 Includes cash and cash equivalents, excluding restricted cash. |
4 Beginning in the second quarter of fiscal 2023, we are no longer excluding non-GAAP adjustments related to "Transition Costs" from our non-GAAP results, and have adjusted all comparative periods to reflect the current presentation. |
5 Beginning in the second quarter of fiscal 2023, we are no longer excluding non-GAAP adjustments related to "Results of operations of businesses exited/to be exited" from our non-GAAP results, with the exception of certain charges related to our legacy power plant and development projects sold in fiscal 2018 and 2019. All comparative periods have been adjusted to reflect the current presentation. |
Earnings Conference Call Information
SunPower will discuss its third quarter 2023 financial results on Wednesday, Nov. 1 at 8:00 a.m. ET. Analysts intending to participate in the Q&A session must register for a personal link and dial-in at: https://register.vevent.com/register/BI96173d8484274738917b9dc19795f661.
The results are scheduled to be released at 7:45 a.m. ET. The live audio webcast and supplemental financial information will be available on SunPower's investor website at http://investors.sunpower.com/events.cfm.
About SunPower
SunPower (NASDAQ:SPWR) is a leading residential solar technology and energy services provider in North America. SunPower offers solar + storage solutions designed and warranted by one company that give customers control over electricity consumption and resiliency during power outages while providing cost savings. For more information, visit www.sunpower.com.
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements often address expected future business and financial performance, and often contain words such as "believe," "expect," "anticipate," "intend," "plan," or "will." By their nature, forward-looking statements address matters that are subject to risks and uncertainties. Any such forward-looking statements may involve risk and uncertainties that could cause actual results to differ materially from any future results encompassed within the forward-looking statements. All statements, other than statements of historical fact, are forward-looking statements. Examples of such forward-looking statements include, but are not limited to, statements regarding: (a) our guidance for fiscal year 2023, including, but not limited to, Net Loss (GAAP), residential customers, residential Adjusted EBITDA per customer, incremental customers, and Adjusted EBITDA, as well as platform investments and related assumptions; (b) expectations regarding demand and our future performance based on backlog, bookings, projected consumer demand, and pipelines in our sales channels and for our products, and our ability to meet consumer demand; (c) our plans and expectations with respect to our strategic partnerships and initiatives, and the anticipated business and financial impacts thereof; (d) our strategic plans and areas of investment and focus, both current and future, and expectations for the results thereof, including improved customer experience, lease and loan funding capacity, increased installation capacity, and development of new products and services; (e) our expectations regarding projected demand and growth in 2023 and beyond, our positioning for future success, and our ability to capture demand and deliver long-term value to our shareholders; (f) our expectations for industry trends and factors, and the impact thereof on our business and strategic plans; (g) the availability and sufficiency of the supply of products and raw materials to meet consumer demand; (h) our expectations with regard to any restated items in our financial statements for the periods disclosed herein and the estimated amounts and impacts thereof, and the anticipated timing of the filing of our financial statements for such periods with the Securities and Exchange Commission (SEC); (i) expectations regarding the terms and conditions of any potential consent or waiver under the Credit Agreement, and the timing thereof; and (j) the effectiveness of the company's disclosure controls and procedures and internal control over financial reporting.
These forward-looking statements are based on our current assumptions, expectations, and beliefs and involve substantial risks and uncertainties that may cause results, performance, or achievement to materially differ from those expressed or implied by these forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to: (1) regulatory changes and the availability of economic incentives promoting use of solar energy; (2) potential disruptions to our operations and supply chain that may result from epidemics or natural disasters, and other factors; (3) competition in the solar and general energy industry, supply chain constraints, interest rates, inflation, and pricing pressures; (4) changes in public policy, including the imposition and applicability of tariffs and duties; (5) our dependence on sole- or limited-source supply relationships, including for our solar panels and other components of our products; (6) risks related to the introduction of new or enhanced products, including potential technical challenges, lead times, and our ability to match supply with demand while maintaining quality, sales, and support standards; (7) the success of our ongoing research and development efforts and our ability to commercialize new products and services, including products and services developed through strategic partnerships; (8) our liquidity, indebtedness, and ability to obtain additional financing for our projects and customers; (9) challenges managing our acquisitions, joint ventures, and partnerships, including our ability to successfully manage acquired assets and supplier relationships; (10) the time and effort required to complete the restatement and amend the related Form 10-K and Form 10-Q filings, and the subsequent discovery of additional adjustments to our previously issued financial statements; (11) the timing and execution of restructuring plans; (12) our ability to obtain a waiver and consent to our Credit Agreement, and the timing and outcome thereof; and (13) our ability to remediate the material weakness related to internal control over financial reporting.
A detailed discussion of these factors and other risks that affect our business is included in filings we make with the 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.
©2023 SunPower Corporation. All rights reserved. SUNPOWER, the SUNPOWER logo, SUNPOWER FINANCIAL, MYSUNPOWER and SUNVAULT are trademarks or registered trademarks of SunPower Corporation in the U.S.
SUNPOWER CORPORATION | |||
CONDENSED CONSOLIDATED BALANCE SHEETS | |||
(In thousands) | |||
(Unaudited) | |||
October 1, 2023 | January 1, 2023 | ||
(As Restated) | |||
Assets | |||
Current assets: | |||
Cash and cash equivalents | $ 103,683 | $ 377,026 | |
Restricted cash and cash equivalents, current portion | 2,728 | 9,855 | |
Short-term investments | — | 132,480 | |
Accounts receivable, net | 203,640 | 169,614 | |
Contract assets | 37,128 | 57,070 | |
Loan receivables held for sale, net | 17,041 | — | |
Inventories | 327,754 | 297,263 | |
Advances to suppliers, current portion | 6,487 | 12,059 | |
Prepaid expenses and other current assets | 232,926 | 195,846 | |
Total current assets | 931,387 | 1,251,213 | |
Restricted cash and cash equivalents, net of current portion | 9,548 | 15,151 | |
Property, plant and equipment, net | 106,069 | 76,361 | |
Operating lease right-of-use assets | 32,534 | 36,786 | |
Solar power systems leased, net | 38,845 | 41,779 | |
Goodwill | 125,998 | 125,998 | |
Other intangible assets, net | 19,830 | 24,192 | |
Other long-term assets | 195,429 | 191,340 | |
Total assets | $ 1,459,640 | $ 1,762,820 | |
Liabilities and Equity | |||
Current liabilities: | |||
Accounts payable | $ 181,359 | $ 243,050 | |
Accrued liabilities | 107,556 | 126,125 | |
Operating lease liabilities, current portion | 10,846 | 11,289 | |
Contract liabilities, current portion | 231,019 | 140,776 | |
Short-term debt | 4,080 | 82,240 | |
Convertible debt, current portion | — | 424,919 | |
Current liabilities of discontinued operations | 25,096 | 20,781 | |
Total current liabilities | 559,956 | 1,049,180 | |
Long-term debt | 302,550 | 308 | |
Operating lease liabilities, net of current portion | 24,328 | 29,274 | |
Contract liabilities, net of current portion | 9,746 | 10,529 | |
Other long-term liabilities | 117,994 | 103,495 | |
Long-term liabilities of discontinued operations | 11,930 | 12,412 | |
Total liabilities | 1,026,504 | 1,205,198 | |
Equity: | |||
Common stock | 175 | 174 | |
Additional paid-in capital | 2,853,487 | 2,855,930 | |
Accumulated deficit | (2,199,397) | (2,084,207) | |
Accumulated other comprehensive income | 11,569 | 11,568 | |
Treasury stock, at cost | (233,626) | (226,646) | |
Total stockholders' equity | 432,208 | 556,819 | |
Noncontrolling interests in subsidiaries | 928 | 803 | |
Total equity | 433,136 | 557,622 | |
Total liabilities and equity | $ 1,459,640 | $ 1,762,820 |
SUNPOWER CORPORATION | ||||||||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||
(In thousands, except per share data) | ||||||||
(Unaudited) | ||||||||
THREE MONTHS ENDED | NINE MONTHS ENDED | |||||||
October 1, 2023 | October 2, 2022 | October 1, 2023 | October 2, 2022 | |||||
(As Restated) | (As Restated) | |||||||
Total revenues | $ 432,000 | $ 476,250 | $ 1,331,717 | $ 1,245,137 | ||||
Total cost of revenues | 365,640 | 370,575 | 1,131,187 | 994,764 | ||||
Gross profit | 66,360 | 105,675 | 200,530 | 250,373 | ||||
Operating expenses: | ||||||||
Research and development | 5,406 | 6,784 | 19,161 | 19,199 | ||||
Sales, general, and administrative | 83,076 | 89,737 | 254,786 | 257,955 | ||||
Restructuring charges (credits) | 5,873 | 111 | 5,873 | 244 | ||||
Expense (income) from transition services agreement, net | 170 | (1,059) | 30 | (1,287) | ||||
Total operating expenses | 94,525 | 95,573 | 279,850 | 276,111 | ||||
Operating (loss) income | (28,165) | 10,102 | (79,320) | (25,738) | ||||
Other (expense) income, net: | ||||||||
Interest income | 1,096 | 144 | 2,256 | 278 | ||||
Interest expense | (6,596) | (3,712) | (18,060) | (15,224) | ||||
Other, net | 103 | 135,368 | (10,591) | 122,160 | ||||
Other (expense) income, net | (5,397) | 131,800 | (26,395) | 107,214 | ||||
(Loss) income from continuing operations before income taxes and equity in earnings (losses) of unconsolidated investees | (33,562) | 141,902 | (105,715) | 81,476 | ||||
Benefits from (provision for) income taxes | 202 | (3,055) | (1,192) | 5,425 | ||||
Equity in earnings (losses) of unconsolidated investees | 3,362 | 1,958 | 3,920 | 1,958 | ||||
Net (loss) income from continuing operations | (29,998) | 140,805 | (102,987) | 88,859 | ||||
(Loss) income from discontinued operations before income taxes and equity in earnings (losses) of unconsolidated investees | (1,924) | (2,395) | (12,080) | (49,550) | ||||
Benefits from (provision for) income taxes from discontinued operations | — | — | — | 584 | ||||
Net (loss) income from discontinued operations | (1,924) | (2,395) | (12,080) | (48,966) | ||||
Net (loss) income | (31,922) | 138,410 | (115,067) | 39,893 | ||||
Net (income) loss from continuing operations attributable to noncontrolling interests | (29) | (3,225) | (124) | (3,671) | ||||
Net loss (income) from discontinued operations attributable to noncontrolling interests | — | — | — | 250 | ||||
Net (income) loss attributable to noncontrolling interests | (29) | (3,225) | (124) | (3,421) | ||||
Net (loss) income from continuing operations attributable to stockholders | (30,027) | 137,580 | (103,111) | 85,188 | ||||
Net (loss) income from discontinued operations attributable to stockholders | (1,924) | (2,395) | (12,080) | (48,716) | ||||
Net (loss) income attributable to stockholders | $ (31,951) | $ 135,185 | $ (115,191) | $ 36,472 | ||||
Net (loss) income per share attributable to stockholders - basic: | ||||||||
Continuing operations | $ (0.17) | $ 0.79 | $ (0.59) | $ 0.49 | ||||
Discontinued operations | $ (0.01) | $ (0.01) | $ (0.07) | $ (0.28) | ||||
Net (loss) income per share – basic | $ (0.18) | $ 0.78 | $ (0.66) | $ 0.21 | ||||
Net (loss) income per share attributable to stockholders - diluted: | ||||||||
Continuing operations | $ (0.17) | $ 0.73 | $ (0.59) | $ 0.44 | ||||
Discontinued operations | $ (0.01) | $ (0.01) | $ (0.07) | $ (0.25) | ||||
Net (loss) income per share – diluted | $ (0.18) | $ 0.72 | $ (0.66) | $ 0.19 | ||||
Weighted-average shares: | ||||||||
Basic | 175,241 | 174,118 | 174,937 | 173,815 | ||||
Diluted | 175,241 | 192,497 | 174,937 | 174,521 |
SUNPOWER CORPORATION | ||||||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||
(In thousands) | ||||||||
(Unaudited) | ||||||||
THREE MONTHS ENDED | NINE MONTHS ENDED | |||||||
October 1, 2023 | October 2, 2022 | October 1, 2023 | October 2, 2022 | |||||
(As Restated) | (As Restated) | |||||||
Cash flows from operating activities: | ||||||||
Net (loss) income | $ (31,922) | $ 138,410 | $ (115,067) | $ 39,893 | ||||
Adjustments to reconcile net (loss) income to net cash used in operating activities: | ||||||||
Depreciation and amortization | 14,017 | 6,720 | 37,193 | 22,208 | ||||
Amortization of cloud computing arrangements | 1,439 | 1,557 | 4,251 | 3,549 | ||||
Stock-based compensation | 5,603 | 6,557 | 21,139 | 19,056 | ||||
Amortization of debt issuance costs | 369 | 997 | 1,532 | 2,556 | ||||
Equity in (earnings) losses of unconsolidated investees | (3,362) | (1,958) | (3,920) | (1,958) | ||||
(Gain) loss on equity investments | — | (134,905) | 10,805 | (120,965) | ||||
Unrealized (gain) loss on derivatives | (1,036) | (2,808) | (1,330) | (2,304) | ||||
Dividend from equity method investee | — | 133 | 596 | 133 | ||||
Deferred income taxes | 58 | (1,410) | (474) | (12,606) | ||||
(Gain) loss on loan receivables held for sale | 972 | — | 1,430 | — | ||||
Other, net | 360 | (821) | 935 | 128 | ||||
Changes in operating assets and liabilities: | ||||||||
Accounts receivable | 16,148 | (27,271) | (34,964) | (65,035) | ||||
Contract assets | 12,229 | (6,371) | 19,942 | (318) | ||||
Inventories | 75,877 | (7,103) | (30,492) | (14,202) | ||||
Project assets | 3 | — | 3 | 295 | ||||
Loan receivables held for sale | (5,096) | — | (18,471) | — | ||||
Prepaid expenses and other assets | (4,600) | (38,245) | (28,255) | (206,387) | ||||
Operating lease right-of-use assets | 2,882 | 3,133 | 8,258 | 8,757 | ||||
Advances to suppliers | (1,842) | (4,216) | 5,572 | (6,288) | ||||
Accounts payable and other accrued liabilities | (35,086) | 32,843 | (65,951) | 77,871 | ||||
Contract liabilities | 7,465 | 31,196 | 89,460 | 97,614 | ||||
Operating lease liabilities | (3,397) | (4,090) | (9,391) | (11,972) | ||||
Net cash (used in) provided by operating activities | 51,081 | (7,652) | (107,199) | (169,975) | ||||
Cash flows from investing activities: | ||||||||
Purchases of property, plant and equipment | (13,226) | (12,961) | (39,509) | (36,958) | ||||
Investments in software development costs | (2,329) | (1,500) | (4,649) | (4,225) | ||||
Cash paid for working capital settlement related to C&I Solutions sale | — | — | (30,892) | — | ||||
Cash received from C&I Solutions sale, net of de-consolidated cash | — | — | — | 146,303 | ||||
Cash paid for equity investments under the Dealer Accelerator Program and other | — | (14,500) | (7,500) | (30,920) | ||||
Proceeds from sale of equity investment | — | 290,278 | 121,675 | 440,108 | ||||
Cash paid for investments in unconsolidated investees | (1,393) | (2,424) | (9,070) | (5,742) | ||||
Dividend from equity method investee, in excess of cumulative earnings | — | 137 | 149 | 137 | ||||
Net cash (used in) provided by investing activities | (16,923) | 259,030 | 30,229 | 508,703 | ||||
Cash flows from financing activities: | ||||||||
Proceeds from bank loans and other debt | 54,339 | 24,453 | 493,440 | 124,729 | ||||
Repayment of bank loans and other debt | (101,841) | (69,010) | (267,482) | (166,901) | ||||
Repayment of convertible debt | — | — | (424,991) | — | ||||
Payments for financing leases | (1,285) | (617) | (3,091) | (728) | ||||
Purchases of stock for tax withholding obligations on vested restricted stock | (686) | (874) | (6,979) | (10,462) | ||||
Net cash (used in) provided by financing activities | (49,473) | (46,048) | (209,103) | (53,362) | ||||
Net (decrease) increase in cash, cash equivalents, and restricted cash | (15,315) | 205,330 | (286,073) | 285,366 | ||||
Cash, cash equivalents and restricted cash, beginning of period | 131,274 | 228,649 | 402,032 | 148,613 | ||||
Cash, cash equivalents, and restricted cash, end of period | $ 115,959 | $ 433,979 | $ 115,959 | $ 433,979 | ||||
Reconciliation of cash, cash equivalents, and restricted cash to the condensed consolidated balance sheets, including discontinued operations: | ||||||||
Cash and cash equivalents | $ 103,683 | $ 396,510 | $ 103,683 | $ 396,510 | ||||
Restricted cash and cash equivalents, current portion | 2,728 | 13,204 | 2,728 | 13,204 | ||||
Restricted cash and cash equivalents, net of current portion | 9,548 | 24,265 | 9,548 | 24,265 | ||||
Total cash, cash equivalents, and restricted cash | $ 115,959 | $ 433,979 | $ 115,959 | $ 433,979 | ||||
Supplemental disclosure of non-cash activities: | ||||||||
Property, plant and equipment acquisitions funded by liabilities (including financing leases) | $ 6,239 | $ 4,495 | $ 14,956 | $ 9,082 | ||||
Right-of-use assets obtained in exchange of lease obligations | 197 | 12,479 | 4,006 | 12,988 | ||||
Net working capital settlement related to C&I Solutions sale | — | 740 | — | 7,005 | ||||
Supplemental cash flow disclosures: | ||||||||
Cash paid for interest | 7,257 | 9,137 | 25,261 | 20,323 | ||||
Cash paid for income taxes | 206 | 2,687 | 1,442 | 5,187 |
Use of Non-GAAP Financial Measures
To supplement its consolidated financial results presented in accordance with United States Generally Accepted Accounting Principles ("GAAP"), the company uses non-GAAP measures that are adjusted for certain items from the most directly comparable GAAP measures. The specific non-GAAP measures listed below are: revenue; gross margin; net (loss) income; net (loss) income per diluted share; and adjusted earnings before interest, taxes, depreciation and amortization ("Adjusted EBITDA"). Management believes that each of these non-GAAP measures are useful to investors, enabling them to better assess changes in each of these key elements of the company's results of operations across different reporting periods on a consistent basis, independent of certain items as described below. Thus, each of these non-GAAP financial measures provide investors with another method to assess the company's operating results in a manner that is focused on its ongoing, core operating performance, absent the effects of these items. Management uses these non-GAAP measures internally to assess the business, its financial performance, current and historical results, as well as for strategic decision-making and forecasting future results. Many of the analysts covering the company also use these non-GAAP measures in their analysis. Given management's use of these non-GAAP measures, the company believes these measures are important to investors in understanding the company's operating results as seen through the eyes of management. These non-GAAP measures are not prepared in accordance with GAAP or intended to be a replacement for GAAP financial data; and therefore, should be reviewed together with the GAAP measures and are not intended to serve as a substitute for results under GAAP, and may be different from non-GAAP measures used by other companies.
We exclude the following adjustments from our non-GAAP financial measures:
Non-GAAP Adjustments Based on International Financial Reporting Standards ("IFRS")
The company's non-GAAP results include adjustments under IFRS that are consistent with the adjustments made in connection with the company's internal reporting process as part of its status as a subsidiary and equity method investee of TotalEnergies SE, a foreign public registrant that reports under IFRS. Differences between GAAP and IFRS reflected in the company's non-GAAP results are further described below. In these situations, management believes that IFRS enables investors to better evaluate the company's performance, and assists in aligning the perspectives of the management with those of TotalEnergies SE.
Other Non-GAAP Adjustments
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 | NINE MONTHS ENDED | |||||||
October 1, | October 2, | October 1, | October 2, | |||||
(As Restated) | (As Restated) | |||||||
GAAP revenue | $ 432,000 | $ 476,250 | $ 1,331,717 | $ 1,245,137 | ||||
Other adjustments: | ||||||||
Legacy power plant and development projects1 | — | — | — | 7,239 | ||||
Mark-to-market loss (gain) on interest rate swaps | 171 | — | 91 | — | ||||
Non-GAAP revenue | $ 432,171 | $ 476,250 | $ 1,331,808 | $ 1,252,376 |
1 Beginning in the second quarter of fiscal 2023, we are no longer excluding non-GAAP adjustments related to "Results of operations of businesses exited/to be exited" from our non-GAAP results, with the exception of certain charges related to our legacy power plant and development projects sold in fiscal 2018 and 2019. All comparative periods have been adjusted to reflect the current presentation. |
Adjustments to Gross Profit Margin: | ||||||||
THREE MONTHS ENDED | NINE MONTHS ENDED | |||||||
October 1, | October 2, | October 1, | October 2, | |||||
(As Restated) | (As Restated) | |||||||
GAAP gross profit from continuing operations | $ 66,360 | $ 105,675 | $ 200,530 | $ 250,373 | ||||
Other adjustments: | ||||||||
Legacy power plant and development projects1 | — | — | — | 7,239 | ||||
(Gain) loss on sale and impairment of residential lease assets | (266) | (276) | (800) | (833) | ||||
Stock-based compensation expense | 887 | 1,135 | 4,041 | 3,432 | ||||
Business reorganization costs | — | — | — | 11 | ||||
Transaction-related costs | — | — | — | 162 | ||||
Mark-to-market loss (gain) on interest rate swaps | 171 | — | 91 | — | ||||
Litigation | — | — | 62 | — | ||||
Non-GAAP gross profit2 | $ 67,152 | $ 106,534 | $ 203,924 | $ 260,384 | ||||
GAAP gross margin (%) | 15.4 % | 22.2 % | 15.1 % | 20.1 % | ||||
Non-GAAP gross margin (%) | 15.5 % | 22.4 % | 15.3 % | 20.8 % |
1 Beginning in the second quarter of fiscal 2023, we are no longer excluding non-GAAP adjustments related to "Results of operations of businesses exited/to be exited" from our non-GAAP results, with the exception of certain charges related to our legacy power plant and development projects sold in fiscal 2018 and 2019. All comparative periods have been adjusted to reflect the current presentation. |
2 Beginning in the second quarter of fiscal 2023, we are no longer excluding non-GAAP adjustments related to "Transition Costs" from our non-GAAP results, and have adjusted all comparative periods to reflect the current presentation. |
Adjustments to Net (Loss) Income: | ||||||||
THREE MONTHS ENDED | NINE MONTHS ENDED | |||||||
October 1, | October 2, | October 1, | October 2, | |||||
(As Restated) | (As Restated) | |||||||
GAAP net (loss) income from continuing operations attributable to stockholders | $ (30,027) | $ 137,580 | $ (103,111) | $ 85,188 | ||||
Adjustments based on IFRS: | ||||||||
Mark-to-market (gain) loss on equity investments | (2,177) | (137,233) | 8,628 | (123,293) | ||||
Other adjustments: | ||||||||
Legacy power plant and development projects1 | — | — | — | 7,239 | ||||
(Gain) loss on sale and impairment of residential lease assets | (266) | (276) | (800) | (833) | ||||
Litigation | 291 | 488 | 419 | 3,571 | ||||
Stock-based compensation expense | 5,603 | 6,550 | 21,140 | 18,933 | ||||
Amortization of intangible assets and software | 2,850 | 2,853 | 8,566 | 7,707 | ||||
Transaction-related costs | 76 | 144 | 842 | 1,557 | ||||
Business reorganization costs | — | 5 | — | 4,526 | ||||
Restructuring charges (credits) | 5,880 | — | 5,880 | (453) | ||||
Acquisition-related costs | — | 3,338 | (197) | 11,456 | ||||
Equity (income) loss from unconsolidated investees | (1,185) | (158) | (1,743) | (158) | ||||
Mark-to-market (gain) loss on interest rate swaps | (1,035) | (2,808) | (1,329) | (2,304) | ||||
Tax effect | (299) | 3,535 | 552 | (6,120) | ||||
Non-GAAP net (loss) income from continuing operations attributable to stockholders2 | $ (20,289) | $ 14,018 | $ (61,153) | $ 7,016 |
1 Beginning in the second quarter of fiscal 2023, we are no longer excluding non-GAAP adjustments related to "Results of operations of businesses exited/to be exited" from our non-GAAP results, with the exception of certain charges related to our legacy power plant and development projects sold in fiscal 2018 and 2019. All comparative periods have been adjusted to reflect the current presentation. |
2 Beginning in the second quarter of fiscal 2023, we are no longer excluding non-GAAP adjustments related to "Transition Costs" from our non-GAAP results, and have adjusted all comparative periods to reflect the current presentation. |
Adjustments to Net (Loss) Income per diluted share: | ||||||||
THREE MONTHS ENDED | NINE MONTHS ENDED | |||||||
October 1, | October 2, | October 1, | October 2, | |||||
(As Restated) | (As Restated) | |||||||
Net (loss) income per diluted share | ||||||||
Numerator: | ||||||||
GAAP net (loss) income from continuing operations attributable to stockholders1 | $ (30,027) | $ 137,580 | $ (103,111) | $ 85,188 | ||||
Add: Interest expense on 4.00% debenture due 2023, net of tax | — | 3,026 | — | — | ||||
GAAP net (loss) income from continuing operations attributable to stockholders1 | $ (30,027) | $ 140,606 | $ (103,111) | $ 85,188 | ||||
Non-GAAP net (loss) income from continuing operations attributable to stockholders1, 2, 3 | $ (20,289) | $ 14,018 | $ (61,153) | $ 7,016 | ||||
Denominator: | ||||||||
GAAP weighted-average shares | 175,241 | 174,118 | 174,937 | 173,815 | ||||
Effect of dilutive securities: | ||||||||
Restricted stock units | — | 1,311 | — | 706 | ||||
4.00% debentures due 2023 | — | 17,068 | — | — | ||||
GAAP dilutive weighted-average common shares: | 175,241 | 192,497 | 174,937 | 174,521 | ||||
Non-GAAP weighted-average shares | 175,241 | 174,118 | 174,937 | 173,815 | ||||
Effect of dilutive securities: | ||||||||
Restricted stock units | — | 1,311 | — | 706 | ||||
Non-GAAP dilutive weighted-average common shares1 | 175,241 | 175,429 | 174,937 | 174,521 | ||||
GAAP dilutive net (loss) income per share - continuing operations | $ (0.17) | $ 0.73 | $ (0.59) | $ 0.49 | ||||
Non-GAAP dilutive net (loss) income per share - continuing operations2, 3 | $ (0.12) | $ 0.08 | $ (0.35) | $ 0.04 |
1 In accordance with the if-converted method, net (loss) income available to common stockholders excludes interest expense related to the 4.00% debentures if the debentures are considered converted in the calculation of net (loss) income per diluted share. If the conversion option for a debenture is not in the money for the relevant period, the potential conversion of the debenture under the if-converted method is excluded from the calculation of non-GAAP net income (loss) per diluted share. |
2 Beginning in the second quarter of fiscal 2023, we are no longer excluding non-GAAP adjustments related to "Results of operations of businesses exited/to be exited" from our non-GAAP results, with the exception of certain charges related to our legacy power plant and development projects sold in fiscal 2018 and 2019. All comparative periods have been adjusted to reflect the current presentation. |
3 Beginning in the second quarter of fiscal 2023, we are no longer excluding non-GAAP adjustments related to "Transition Costs" from our non-GAAP results, and have adjusted all comparative periods to reflect the current presentation. |
Adjusted EBITDA: | ||||||||
THREE MONTHS ENDED | NINE MONTHS ENDED | |||||||
October 1, | October 2, | October 1, | October 2, | |||||
(As Restated) | (As Restated) | |||||||
GAAP net (loss) income from continuing operations attributable to stockholders | $ (30,027) | $ 137,580 | $ (103,111) | $ 85,188 | ||||
Adjustments based on IFRS: | ||||||||
Mark-to-market (gain) loss on equity investments | (2,177) | (137,233) | 8,628 | (123,293) | ||||
Other adjustments: | ||||||||
Legacy power plant and development projects1 | — | — | — | 7,239 | ||||
(Gain) loss on sale and impairment of residential lease assets | (266) | (276) | (800) | (833) | ||||
Litigation | 291 | 488 | 419 | 3,571 | ||||
Stock-based compensation expense | 5,603 | 6,550 | 21,140 | 18,933 | ||||
Amortization of intangible assets and software | 2,850 | 2,853 | 8,566 | 7,707 | ||||
Transaction-related costs | 76 | 144 | 842 | 1,557 | ||||
Business reorganization costs | — | 5 | — | 4,526 | ||||
Restructuring charges (credits) | 5,880 | — | 5,880 | (453) | ||||
Acquisition-related costs | — | 3,338 | (197) | 11,456 | ||||
Equity (income) loss from unconsolidated investees | (1,185) | (158) | (1,743) | (158) | ||||
Mark-to-market (gain) loss on interest rate swaps | (1,035) | (2,808) | (1,329) | (2,304) | ||||
Cash interest expense, net of interest income | 6,706 | 6,371 | 17,224 | 17,087 | ||||
(Benefit from) provision for income taxes | (202) | 3,055 | 1,192 | (5,425) | ||||
Depreciation | 12,703 | 5,417 | 33,247 | 12,205 | ||||
Adjusted EBITDA2 | $ (783) | $ 25,326 | $ (10,042) | $ 37,003 |
1 Beginning in the second quarter of fiscal 2023, we are no longer excluding non-GAAP adjustments related to "Results of operations of businesses exited/to be exited" from our non-GAAP results, with the exception of certain charges related to our legacy power plant and development projects sold in fiscal 2018 and 2019. All comparative periods have been adjusted to reflect the current presentation. |
2 Beginning in the second quarter of fiscal 2023, we are no longer excluding non-GAAP adjustments related to "Transition Costs" from our non-GAAP results, and have adjusted all comparative periods to reflect the current presentation. |
FY 2023 GUIDANCE | |
FY 2023 | |
Net Loss (GAAP) | $(175) million - $(165) million |
Residential Customers | 70,000 - 80,000 |
Residential Adjusted EBITDA/Customer1 | $600 - $700 |
Adjusted EBITDA2 | $(35) million - $(25) million |
1. | Excluding Product & Digital operating expenses for Residential only. |
2. | Adjusted EBITDA guidance for FY 2023 includes net adjustments that decrease GAAP net loss by approximately $140 million primarily relating to the following adjustments: stock-based compensation expense of $29 million, restructuring charges of $13 million, mark-to-market (gain) loss on equity investments, net of $11 million, amortization of intangible assets and software of $12 million, interest expense of $23 million, depreciation of $46 million, income taxes of $1 million, and other non-recurring adjustments of $5 million. |
The company reduced 2023 guidance for GAAP net loss to ($175) million to ($165) million.
Guidance for Adjusted EBITDA per customer before platform investment was reduced to $600 - $700 to reflect installation and other costs spread over fewer customers than anticipated, delayed revenue recognition from longer cycle times as well as higher year-over-year installation cost, and cost of goods sold impacted by inventory carried at cost higher than current market.
The company increased guidance for Platform Investment to $70 million - $90 million for the year, primarily to reflect higher legacy business unit costs and the restatement of prior-period inventory value.
Guidance for adjusted EBITDA for the year was reduced to ($35) million to ($25) million.
Last Trade: | US$0.12 |
Daily Volume: | 0 |
Market Cap: | US$21.550M |
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