SunPower Reports Third Quarter 2020 Results
Company Raises FY 2020 Net Income and Adjusted EBITDA Guidance
Strong Execution in Residential / C&I Business Posts Positive Adjusted EBITDA

SAN JOSE, Calif., Oct. 28, 2020 /PRNewswire/ -- SunPower Corp. (NASDAQ:SPWR) today announced financial results for its third quarter ended September 27, 2020.

Third Quarter Company Highlights

  • Successfully completed spin-off of Maxeon Solar Technologies; new segmentation announced
  • Exceeded revenue and Adjusted EBITDA guidance; expanded gross margin per watt
  • Ended quarter with $325 million in cash

Residential and Light Commercial (RLC)

  • Residential strength – $15 million Adjusted EBITDA, added 10,000 customers
  • New product success – significant SunVault™ storage demand; >100 OneRoof™ installs to date
  • Closed new residential solar plus storage financing facility to drive substantially better economics
  • Secured committed tax equity capacity to meet demand through mid-2021

Commercial and Industrial Solutions (C&I Solutions)

  • Posted positive Adjusted EBITDA for the quarter
  • More than doubled gross margin per watt year over year
  • Storage adding $0.20/w to pipeline, > 30 percent attach rates for projects in backlog
  • Fully booked for the fourth quarter; >275 megawatts (MW) projects contracted / awarded

 

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

3rd Quarter 2020

2nd Quarter 2020

3rd Quarter 2019

GAAP revenue

$274.8

$217.7

$286

GAAP gross margin from continuing operations

13.5%

11.8%

15.9%

GAAP net income from continuing operations

$109.5

$55.9

$18.6

GAAP net income (loss) from continuing operations per diluted share

$0.57

$0.31

$0.12

Non-GAAP revenue1

$274.8

$217.7

$301.8

Non-GAAP gross margin1

14.0%

12.6%

16.1%

Non-GAAP net (loss) income1

$(6.5)

$(17.2)

$9.1

Non-GAAP net (loss) income from continuing operations per diluted share1

$(0.04)

$(0.10)

$0.06

Adjusted EBITDA1

$8.6

$(4.3)

$25.1

MW Recognized

108

91

124

Cash2

$324.7

$235.3

$189.0

Information presented above is for continuing operations only and excludes results of Maxeon for all periods presented, other than Cash for 2nd quarter 2020 and 3rd quarter 2019. 

1Information about SunPower's use of non-GAAP financial information, including a reconciliation to U.S. GAAP, is provided under "Use of Non-GAAP Financial Measures" below
2Includes cash, and cash equivalents, excluding restricted cash

Third Quarter 2020 Results
"Our solid third quarter results reflect the strong demand for our industry-leading solutions in both our residential and commercial markets," said Tom Werner, SunPower CEO and chairman of the board.

"Overall, we executed well as MW recognized grew 20% sequentially, we further expanded our gross margin, generated positive cash flow and added to our significant backlog. Additionally, we are pleased with the customer response to our recent product introductions as demand for our SunVault residential storage solution remains very strong while we continue to add partners for our OneRoof product for the new homes market. We expect these positive trends to continue in the fourth quarter. Further, we remain confident in our 2021 targets that we presented at our Capital Markets Day in September given improving industry trends, our integrated The Power of One® platform, the company's new product's and our continued focus on maximizing long term cash flow".

RLC
"Our RLC business executed well for the quarter with sequential improvement in MW recognized, gross margin and Adjusted EBITDA. Our residential business performed well with MW recognized up 33% sequentially as we benefited from the continued improvement in demand throughout the quarter with significant demand for our new loan product in partnership with Technology Credit Union. Also, customer interest for our SunVault residential storage remains very high with current attach rates in California exceeding 20%. In new homes, we continued to expand our market leading footprint as we saw record bookings during the quarter and our backlog grew to more than 50,000 homes, another record. Finally, we continue to expect 30-50% revenue growth in both our residential and new homes businesses for fiscal year 2021."

C&I Solutions
"Our C&I Solutions business also performed well as installs rose 30% sequentially in addition to posting positive Adjusted EBITDA for the quarter. We added to our $3.5 billion pipeline and expanded our footprint in the fast-growing community solar market as we secured 13MW of community solar projects.  Helix® storage demand remains high with our pipeline now exceeding 630 MWh and Q4 attach rates of 50%." 

Consolidated Financials
"Solid execution in the third quarter enabled us to exceed our revenue and Adjusted EBITDA financial guidance, strengthen our cash position and further invested in our storage and services initiatives," said Manavendra Sial, SunPower chief financial officer. "We also closed our second innovative residential lease financing facility with Bank of America during the quarter which materially lowers our cost of capital while providing funding through the middle of next year. Additionally, we are building our Powerco with the recurring revenue pipeline continuing to grow and SunStrong's retained value above forecast at $358 million at the end of the third quarter. Related to the balance sheet, our cash increased by approximately $90 million to $325 million. Additionally, we expect total cash flow to be positive in the fourth quarter. With our current cash position and expected cash flow in the fourth quarter, we now have the ability to pay off the convert early if we so choose."

Third quarter of fiscal year 2020 non-GAAP results exclude net adjustments that, in the aggregate, increased GAAP income by $115.9 million, including $155.4 million related to a mark-to-market gain on equity investments. This was partially offset by $33.8 for income taxes, $4.5 million related to stock-based compensation expense, and $1.2 million related to amortization of intangible assets and other non-recurring items.

Financial Outlook
The company's fourth quarter and fiscal year 2020 guidance is as follows:

Fourth quarter GAAP revenue of $330 to $370 million, GAAP net income of $11 million to $21 million, and MW recognized in the range of 145 MW to 175 MW. 

For fiscal year 2020, the company expects GAAP revenue of $1.12 billion to $1.16 billion, compared to its previous fiscal year 2020 guidance of $1.06 billion to $1.10.  Fiscal year 2020 GAAP net income of $190 million to $200 million and MW recognized in the range of 465 MW to 515 MW.  

The company now expects fourth quarter Adjusted EBITDA to be in the range of $26 million to $36 million and fiscal year 2020 Adjusted EBITDA to be in the range of $30 million to $40 million compared to its previous fiscal year 2020 guidance of $20 million to $30 million.

The company will host a conference call for investors this afternoon to discuss its third quarter 2020 performance at 1:30 p.m. Pacific Time. The call will be webcast and can be accessed from SunPower's website at
https://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 third quarter 2020 performance on the Events and Presentations section of SunPower's Investor Relations page at
https://investors.sunpower.com/events.cfm.

About SunPower
Headquartered in California's Silicon Valley, SunPower (NASDAQ:SPWR) is a leading Distributed Generation Storage and Energy Services provider in North America. SunPower offers the only solar + storage solution designed by one company that gives customers complete control over energy consumption, delivering grid independence, resiliency during power outages and cost savings to homeowners, businesses, governments, schools and utilities. 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, including, but not limited to, statements regarding: (a) our plans and expectations for our products, including anticipated demand and impacts on our market position and our ability to meet our targets and goals; (b) the anticipated financial impacts of our new residential leasing facility and expectations for demand, capacity and timing of full utilization; (c) expectations regarding our future performance based on bookings, backlog, and pipelines in our sales channels; (d) our expectations regarding our industry and market factors, including market and industry trends, and anticipated demand and volume; (e) the expected performance of our business lines, including confidence in 2021 forecasts, areas of focus, and new product cycles, as well as projected growth and attach rates; (f) our expectations for our SunStrong joint venture, including recurring revenue and anticipated retained value; (g) our fourth quarter fiscal 2020 guidance, including GAAP revenue, net income, MW recognized, and Adjusted EBITDA, and related assumptions; and (h) our fiscal 2020 guidance, including GAAP revenue, net income, MW recognized, 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) potential disruptions to our operations and supply chain that may result from epidemics or natural disasters, including impacts of the Covid-19 pandemic; (2) competition in the solar and general energy industry and downward pressure on selling prices and wholesale energy pricing; (3) regulatory changes and the availability of economic incentives promoting use of solar energy; (4) 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; (5) changes in public policy, including the imposition and applicability of tariffs; (6) our dependence on sole- or limited-source supply relationships, including our exclusive supply relationship with Maxeon Solar Technologies; (7) our liquidity, substantial indebtedness, and ability to obtain additional financing for our projects and customers; and (8) challenges managing our acquisitions, joint ventures and partnerships, including our ability to successfully manage acquired assets and supplier relationships. 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, HELIX, SUNVAULT, ONEROOF and THE POWER OF ONE are trademarks or registered trademarks of SunPower Corporation in the U.S.

SUNPOWER CORPORATION

 CONSOLIDATED BALANCE SHEETS 

 (In thousands) 

 (Unaudited) 






Sep. 27


Dec. 29,


2020


2019

Assets




Current assets:




Cash and cash equivalents

$            324,741


$            301,999

Restricted cash and cash equivalents, current portion

16,605


26,348

Accounts receivable, net

94,756


127,878

Contract assets

126,474


99,426

Inventories

178,139


163,405

Advances to suppliers, current portion

-


31,843

Project assets - plants and land, current portion

24,366


12,650

Prepaid expenses and other current assets

96,247


86,755

Current assets of discontinued operations

-


530,627

Total current assets

861,328


1,380,931





Restricted cash and cash equivalents, net of current portion

8,419


9,354

Property, plant and equipment, net

50,397


57,349

Operating lease right-of-use assets

53,716


40,699

Solar power systems leased, net

51,179


54,338

Advances to suppliers, net of current portion

-


-

Other intangible assets, net

1,073


7,121

Other long-term assets

423,197


277,805

Long-term assets of discontinued operations

-


344,324

Total assets

$         1,449,309


$         2,171,921





Liabilities and Equity




Current liabilities:




Accounts payable

$            162,499


$            207,062

Accrued liabilities

128,647


116,276

Operating lease liabilities, current portion

9,995


7,559

Contract liabilities, current portion

55,274


91,345

Short-term debt

96,625


44,473

Convertible debt, current portion

301,258


-

Current liabilities of discontinued operations

-


431,694

Total current liabilities

754,298


898,409





Long-term debt

68,386


112,340

Convertible debt

422,132


820,259

Operating lease liabilities, net of current portion

44,100


36,657

Contract liabilities, net of current portion

29,478


31,922

Other long-term liabilities

137,981


157,774

Long-term liabilities of discontinued operations

-


93,061

Total liabilities

1,456,375


2,150,422





Equity:




Common stock

170


168

Additional paid-in capital

2,679,960


2,661,819

Accumulated deficit

(2,497,409)


(2,449,679)

Accumulated other comprehensive income (loss)

8,070


(9,512)

Treasury stock, at cost

(201,090)


(192,633)

Total stockholders' equity

(10,299)


10,163

Noncontrolling interests in subsidiaries

3,233


11,336

Total equity

(7,066)


21,499

Total liabilities and equity

$         1,449,309


$         2,171,921

 

SUNPOWER CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share data)

(Unaudited)














THREE MONTHS ENDED


NINE MONTHS ENDED



Sep. 27,


Jun. 28,


Sep. 29,


Sep. 27,


Sep. 29,



2020


2020


2019


2020


2019












Revenue:











   Solar power systems, components, and other


$        267,619


$        212,408


$        277,280


$        765,316


$         665,623

   Residential leasing


1,284


1,329


3,523


3,937


9,083

Solar services


5,903


3,930


5,239


13,766


15,902

Total revenue


274,806


217,667


286,042


783,019


690,608

Cost of revenue:








-



   Solar power systems, components, and other


233,144


189,868


236,991


681,649


600,947

   Residential leasing


1,209


1,217


1,567


3,722


5,939

Solar services


3,313


930


1,989


5,672


6,319

Total cost of revenue


237,666


192,015


240,547


691,043


613,205

Gross profit 


37,140


25,652


45,495


91,976


77,403

Operating expenses:











Research and development


5,344


5,994


8,837


19,106


26,494

Sales, general and administrative


35,462


36,014


41,428


112,193


129,582

Restructuring charges


(97)


1,259


4,252


2,738


6,626

Loss on sale and impairment of residential lease assets


386


141


10,756


253


28,283

Income from Transition Services Agreement, net


(1,889)


-


-


(1,889)


-

Gain on business divestiture


-


(10,458)


-


(10,458)


(143,400)

Total operating expenses


39,206


32,950


65,273


121,943


47,585

Operating income (loss)


(2,066)


(7,298)


(19,778)


(29,967)


29,818

Other income (expense), net:








-



Interest income


104


174


951


682


2,184

Interest expense


(7,090)


(8,448)


(8,930)


(24,731)


(40,570)

Other, net


155,457


71,205


45,111


277,100


145,343

Other income, net


148,471


62,931


37,132


253,051


106,957

Income before income taxes and equity in losses of unconsolidated investees 


146,405


55,633


17,354


223,084


136,775

Provision for income taxes


(36,725)


(1,106)


(2,928)


(38,716)


(10,074)

Equity in losses of unconsolidated investees


-


-


(960)


-


(716)

Net income from continuing operations


109,680


54,527


13,466


184,368


125,985

Loss from discontinued operations


(70,761)


(33,278)


(29,417)


(125,599)


(131,181)

Provision for income taxes


6,137


(1,962)


(2,450)


3,191


(7,169)

Equity in earnings (losses) of unconsolidated investees


58


(889)


(807)


(586)


(1,334)

Net loss from discontinued operations, net of taxes


(64,566)


(36,129)


(32,674)


(122,994)


(139,684)

Net income (loss)


$            45,114


$            18,398


$          (19,208)


$            61,374


$          (13,699)

Net income (loss) from continuing operations attributable to noncontrolling interests and redeemable noncontrolling interests


$                (230)


$              1,363


$              5,178


$              2,512


$            33,474

Net loss from discontinued operations attributable to noncontrolling interests and redeemable noncontrolling interests


$                (258)


$                (383)


$                (987)


$             (1,313)


$             (3,057)

    Net income (loss) attributable to noncontrolling interests and redeemable noncontrolling interests


$                (488)


$                 980


$              4,191


$              1,199


$            30,417

Net income from continuing operations attributable to stockholders


$          109,450


$            55,890


$            18,644


$          186,880


$          159,459

Net loss from discontinued operations attributable to stockholders


$           (64,824)


$           (36,512)


$           (33,661)


$         (124,307)


$         (142,741)

Net income (loss) attributable to stockholders


$             44,626


$            19,378


$           (15,017)


$            62,573


$             16,718












Net income (loss) per share attributable to stockholders - basic:











Continuing operations


$                 0.64


$                 0.33


$                0.13


$                1.10


$                 1.12

Discontinued operations


$               (0.38)


$               (0.21)


$               (0.24)


$               (0.73)


$                (1.00)

Net income (loss) per share - basic


$                 0.26


$                 0.11


$               (0.11)


$                 0.37


$                  0.12












Net income (loss) per share attributable to stockholders - diluted:











Continuing operations


$                 0.57


$                 0.31


$               0.12


$                0.99


$                  1.03

Discontinued operations


$                (0.33)


$                (0.19)


$              (0.22)


$               (0.62)


$                 (0.86)

Net income (loss) per share - diluted


$                 0.24


$                 0.12


$              (0.10)


$                0.37


$                  0.17












Weighted-average shares:











Basic











Diluted


170,113


170,003


142,553


169,646


142,248



198,526


192,040


155,583


200,124


166,861

 

SUNPOWER CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)















THREE MONTHS ENDED


NINE MONTHS ENDED



Sep. 27,


Jun. 28,


Sep. 29,



Sep. 27,


Sep. 29,



2020


2020


2019



2020


2019













Cash flows from operating activities:












Net income (loss)


$            45,114


$             18,398


$           (19,208)



$         61,374


$           (13,699)

Adjustments to reconcile net income (loss) to net cash used in operating activities:












Depreciation and amortization


11,927


16,918


15,298



45,737


62,022

Stock-based compensation


6,042


5,879


6,991



18,788


18,927

Non-cash interest expense


1,747


1,838


2,542



5,495


7,468

Non-cash restructuring charges


-


-


3,528



-


5,874

Bad debt expense


(2,568)


1,326


(341)



998


1,319

Equity in (earnings) losses of unconsolidated investees


(58)


889


1,767



586


2,050

Gain on equity investments


(155,431)


(71,062)


(28,538)



(275,645)


(129,038)

Gain on retirement of convertible debt


(104)


-


-



(3,060)


-

Gain on business divestiture


-


(10,458)


-



(10,458)


(143,400)

Gain on sale of investments without readily determinable fair value


-


-


(17,275)



-


(17,275)

Deferred income taxes


607


1,381


(1,545)



1,639


500

Gain (loss) on sale and impairment of residential lease assets


386


140


10,755



815


36,709

Impairment of property, plant and equipment


-


-


-



-


777

Gain on sale of assets


-


-


(21,383)



-


(21,383)

Changes in operating assets and liabilities:












Accounts receivable


54,119


79,029


3,262



113,029


(47,029)

Contract assets


(19,902)


(3,164)


(25,516)



(22,771)


(18,107)

Inventories


(5,382)


36,336


(45,989)



(12,107)


(108,093)

Project assets


703


(3,024)


(3,040)



(11,202)


(9,238)

Prepaid expenses and other assets


(32,362)


9,403


16,967



(4,324)


1,482

Operating lease right-of-use assets


2,112


4,863


14,999



9,898


6,219

Long-term financing receivables, net - held for sale


-


-


481



-


(473)

Advances to suppliers


4,267


3,093


8,518



16,296


33,292

Accounts payable and other accrued liabilities


51,095


(33,637)


52,810



(75,141)


64,009

Contract liabilities


(3,364)


(34,324)


4,709



(53,818)


8,127

Operating lease liabilities


(2,620)


(3,173)


(15,865)



(8,642)


(7,202)

Net cash provided by (used in) operating activities


(43,672)


20,651


(36,073)



(202,513)


(266,162)

Cash flows from investing activities:












Purchases of property, plant and equipment


(2,369)


(4,592)


(16,896)



(13,174)


(35,100)

Cash paid for solar power systems


(2,747)


(2,037)


(8,503)



(5,394)


(51,826)

Proceeds from business divestiture, net of de-consolidated cash


-


15,418


-



15,418


40,491

Proceeds from sale of assets


-


-


39,742



-


39,970

Cash outflow upon Maxeon Solar Spin-off, net of proceeds


(140,132)


-


-



(140,132)


-

Proceeds from maturities of marketable securities


6,588


-


-



6,588


-

Purchases of marketable securities


(1,338)


-


-



(1,338)


-

Cash outflow from sale of residential lease portfolio


-


-


(16,397)



-


(16,397)

Proceeds from return of capital of equity investments with fair value option


-


7,724


-



7,724


-

Proceeds from sale of investments


73,290


-


42,957



119,439


42,957

Cash paid for investments in unconsolidated investees


-


-


(2,400)



-


(12,400)

Net cash provided by (used in) investing activities


(66,708)


16,513


38,503



(10,869)


7,695

Cash flows from financing activities:












Proceeds from bank loans and other debt


62,233


44,954


87,823



183,731


231,489

Repayment of bank loans and other debt


(63,735)


(53,605)


(84,035)



(183,070)


(209,095)

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


-


-


6,528



13,434


72,259

Repayment of non-recourse residential financing


(7,231)


-


(1,803)



(7,231)


(2,959)

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


22


-


1,842



22


31,413

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


(302)


-


-



(302)


(316)

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


2,790


890


-



-


-

Cash paid for repurchase of convertible debt


(8,037)


-


-



(95,178)


-

Payment for prior business combination


-


-


-



-


(9,000)

Proceeds from issuance of convertible debt


200,000


-


-



200,000


-

Settlement of contingent consideration arrangement, net of cash received


11


1,811


-



2,245


(2,448)

Equity offering costs paid


-


-


-



(928)


-

Purchases of stock for tax withholding obligations on vested restricted stock


(74)


(1,467)


(292)



(8,455)


(4,657)

Net cash (used in) provided by financing activities


185,677


(7,417)


10,063



104,268


106,686

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


109


330


(1,510)



222


(1,247)

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


75,406


30,077


10,983



(108,892)


(153,028)

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


274,359


244,282


199,752



458,657


363,763

Cash, cash equivalents, restricted cash and restricted cash equivalents, end of period1


$         349,765


$           274,359


$           210,735



$       349,765


$           210,735





































Non-cash transactions:












Costs of solar power systems sourced from existing inventory


$                      -


$                        -


$                8,033



$                   -


$             29,206

Costs of solar power systems funded by liabilities


$                 598


$                1,716


$                3,604



$              598


$               3,604

Property, plant and equipment acquisitions funded by liabilities


$                   36


$                5,452


$              11,911



$                36


$             11,911

Assumption of debt by buyer in connection with sale of residential lease assets


$                      -


$                        -


$              69,076



$                   -


$             69,076

Right-of-use assets obtained in exchange of lease obligations2


$              7,875


$                   963


$                8,939



$         21,786


$           103,744

Derecognition of financing obligations upon business divestiture


$                      -


$                        -


$                        -



$                   -


$           590,884

Assumption of liabilities in connection with business divestiture


$              9,056


$                9,056


$                        -



$           9,056


$                       -

Holdbacks in connection with business divestiture


$              7,199


$                7,199


$                        -



$           7,199


$               2,425

Holdback related to sale of manufacturing facility


$                      -


$                        -


$              18,300



$                   -


$             18,300

Contractual obligations satisfied by inventory


$                      -


$                        -


$                8,043



$                   -


$               8,043

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 gross margin includes adjustments relating to gain/loss on sale and impairment of residential lease assets, litigation, stock-based compensation, and amortization of intangible assets, 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 on equity investments, gain on business divestiture, impairment of property, plant, and equipment, transaction-related costs, non-cash interest expense, restructuring charges (credits), gain on convertible debt repurchased, 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 SE, 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 SE.

  • 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 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 SE. Further, we elected the Fair Value Option ("FVO") for some of our equity method investments, and we adjust the carrying value of those investments based on their fair market value calculated periodically. Such option is not available under IFRS, and equity method accounting is required for 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 SE. and better reflects our ongoing results.

Other Non-GAAP Adjustments

  • Gain/loss on sale and impairment of residential lease assets: In fiscal 2018 and 2019, in an effort to deconsolidate all the residential lease assets owned by us, 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, including adjustments to contingent consideration shortly after the closure of the transaction, 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-recurring in nature and not reflective of 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. Starting in second quarter of fiscal 2020, we no longer have this non-GAAP measure.
  • 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.
  • Gain on business divestiture: In second quarter of fiscal 2020, the company sold its Operations and Maintenance ("O&M") contracts business to a third-party buyer. Similarly, in fiscal 2019, the company sold all of its membership interests in certain subsidiaries that own leasehold interests in projects subject to sale-leaseback financing arrangements. In connection with these divestitures, the company recognized gain within its income statement in the period in which the sale was completed. The company believe that it is appropriate to exclude this gain from its segment results as it is not reflective of ongoing operating results.
  • Litigation: The company may be involved in various litigation, 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.
  • 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 (credits): 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.
  • Gain on convertible debt repurchased: In connection with the early repurchase of a portion of our 0.875% Convertible debentures due June 1, 2021, we recognized a gain, represented by the difference between the book value of the convertible debentures, net of the remaining unamortized discount prior to repurchase and the reacquisition price of the convertible notes upon repurchase. The company believes that it is appropriate to exclude these from our 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, or tax impact of non-recurring items.
  • 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


NINE MONTHS ENDED



Sep. 27,


Jun. 28,


Sep. 29,


Sep. 27,


Sep. 29,



2020


2020


2019


2020


2019

GAAP revenue


$           274,806


$  217,667


$  286,042


$  783,019


$           690,608

Adjustments based on IFRS:











Legacy utility and power plant projects


-


-


(65)


(207)


(259)

Other adjustments:











Construction revenue on solar services contracts


-


-


15,790


5,392


124,909

Non-GAAP revenue


$           274,806


$  217,667


$  301,767


$  788,204


$           815,258












Adjustments to Gross Profit (Loss) / Margin:













THREE MONTHS ENDED


NINE MONTHS ENDED



Sep. 27,


Jun. 28,


Sep. 29,


Sep. 27,


Sep. 29,



2020


2020


2019


2020


2019

GAAP gross profit (loss)


$             37,140


$    25,652


$    45,495


$    91,976


$             77,403

Adjustments based on IFRS:











Legacy utility and power plant projects


-


-


(7)


(34)


993

Legacy sale-leaseback transactions


-


-


(181)


20


(4,688)

Other adjustments:











Construction revenue on solar service contracts


-


-


1,160


4,735


18,052

Gain on sale and impairment of residential lease assets


(469)


(458)


(511)


(1,375)


(1,268)

Stock-based compensation expense


623


471


741


1,653


1,370

Amortization of intangible assets


1,189


1,783


1,783


4,757


5,352

Non-GAAP gross profit


$             38,483


$    27,448


$    48,480


$  101,732


$             97,214












GAAP gross margin (%)


13.5%


11.8%


15.9%


11.7%


11.2%

Non-GAAP gross margin (%)


14.0%


12.6%


16.1%


12.9%


11.9%












Adjustments to Net income (loss):













THREE MONTHS ENDED


NINE MONTHS ENDED



Sep. 27,


Jun. 28,


Sep. 29,


Sep. 27,


Sep. 29,



2020


2020


2019


2020


2019

GAAP net income (loss) attributable to stockholders


$           109,450


$    55,890


$    18,644


$  186,880


$           159,459

Adjustments based on IFRS:











Legacy utility and power plant projects


-


-


(7)


(34)


993

Legacy sale-leaseback transactions


-


-


(181)


20


5,755

Mark-to-market gain on equity investments


(155,431)


(71,060)


(27,595)


(274,362)


(128,095)

Other adjustments:











Business process improvements costs


-


-


-


-


-

Construction revenue on solar services contracts


-


-


1,160


4,735


(8,978)

Gain on sale and impairment of residential lease assets


(83)


(317)


5,135


(1,122)


29,002

Litigation


395


-


-


880


-

Stock-based compensation expense


4,454


3,955


4,975


13,387


13,682

Amortization of intangible assets


1,189


1,784


1,783


4,759


5,352

Gain on business divestiture


-


(10,529)


-


(10,529)


(143,400)

Transaction-related costs


-


1,382


976


1,863


3,571

Restructuring charges


(97)


659


4,283


2,138


6,071

Gain on convertible debt repurchased


(104)


-


-


(3,060)


-

Tax effect


33,769


994


(118)


35,614


1,817

Non-GAAP net loss attributable to stockholders


$             (6,458)


$  (17,242)


$      9,055


$  (38,832)


$           (54,771)












Adjustments to Net income (loss) per diluted share:













THREE MONTHS ENDED


NINE MONTHS ENDED



Sep. 27,


Jun. 28,


Sep. 29,


Sep. 27,


Sep. 29,



2020


2020


2019


2020


2019

Net income (loss) per diluted share











Numerator:











GAAP net income available to stockholders


$           109,450


$    55,890


$    18,644


$  186,880


$           159,459

     Add: Interest expense on 4.00% debenture due 2023, net of tax


3,358


3,358


691


10,066


10,073

     Add: Interest expense on 0.875% debenture due 2021, net of tax


467


535


-


1,507


2,074

          GAAP net income available to common stockholders


113,275


59,783


19,335


198,453


$           171,606

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


$             (6,458)


$  (17,242)


$      9,055


$  (38,832)


$           (54,771)












Denominator:











GAAP weighted-average shares


170,113


170,003


142,553


169,646


142,248

Effect of dilutive securities:











Restricted stock units


3,560


1,765


4,827


3,354


2,488

0.875% debentures due 2021


7,785


6,350


8,203


10,056


8,203

4.00% debentures due 2023


17,068


13,922


-


17,068


13,922

GAAP dilutive weighted-average common shares:


198,526


192,040


155,583


200,124


166,861












Non-GAAP weighted-average shares


170,113


170,003


142,553


169,646


142,248

Effect of dilutive securities:


-


-


4,827


-


-

Non-GAAP dilutive weighted-average shares1


170,113


170,003


147,380


169,646


142,248












GAAP net income (loss) per diluted share 


$                  0.57


$        0.31


$         0.12


$        0.99


$                  1.03

Non-GAAP net income (loss) per diluted share 


$                (0.04)


$      (0.10)


$         0.06


$      (0.23)


$                (0.39)












1In accordance with the if-converted method, net income (loss) available to common stockholders excludes interest expense related to the 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


NINE MONTHS ENDED



Sep. 27,


Jun. 28,


Sep. 29,


Sep. 27,


Sep. 29,



2020


2020


2019


2020


2019

GAAP net income (loss) attributable to stockholders


$           109,450


$    55,890


$    18,644


$  186,880


$           159,459

Adjustments based on IFRS:











Legacy utility and power plant projects


-


-


(7)


(34)


993

Legacy sale-leaseback transactions


-


-


(181)


20


5,755

Mark-to-market gain on equity investment


(155,431)


(71,060)


(27,595)


(274,362)


(128,095)

Other adjustments:











Construction revenue on solar services contracts


-


-


1,160


4,735


(8,978)

(Gain) loss on sale and impairment of residential lease assets


(83)


(317)


5,135


(1,122)


29,002

Litigation


395


-


-


880


-

Stock-based compensation expense


4,454


3,955


4,975


13,387


13,682

Amortization of intangible assets


1,189


1,784


1,783


4,759


5,352

Gain on business divestiture


-


(10,529)


-


(10,529)


(143,400)

Transaction-related costs


-


1,382


976


1,863


3,571

Restructuring charges (credits)


(97)


1,259


4,283


2,738


6,071

Gain on convertible debt repurchased


(104)


-


-


(3,060)


-

Cash interest expense, net of interest income


6,918


8,317


7,635


24,102


25,691

Provision for income taxes


36,725


1,106


2,928


38,716


10,074

Depreciation


5,156


3,933


5,373


12,589


22,916

Adjusted EBITDA


$                8,572


$    (4,280)


$    25,109


$      1,562


$                2,093

 

Q4 2020 and FY 2020 GUIDANCE

(in thousands)

Q4 2020

FY 2020

Revenue (GAAP and Non-GAAP)

$330,000-$370,000

$1,120,000-$1,160,000

Net income (GAAP)

$11,000-$21,000

$190,000-$200,000

Adjusted EBITDA1

$26,000-$36,000

$30,000-$40,000

 

  1. Estimated Adjusted EBITDA amount above for Q4 2020 includes net adjustments that decrease net income by approximately $5 million related to stock-based compensation expense, $1 million in transaction-related costs, $4 million related to depreciation expense, $10 million related to interest expense, and $1 million related to income taxes. Estimated Adjusted EBITDA amount above for fiscal 2020 includes net adjustments that decrease (increase) net income by approximately $(274) million related to mark-to-market gain on equity investments, $(11) million related to gain on business divestiture, $17 million related to stock-based compensation expense, $34 million related to interest expense,  $18 million related to depreciation expense, $40 million related to income taxes, $5 million related to construction revenue on solar service contracts, $5 million amortization of intangible assets, $3 million related to transaction-related costs, and $2 million related to restructuring charges.

 



SUNPOWER CORPORATION







(In thousands, except percentages)














































THREE MONTHS ENDED














































September 27, 2020







 Revenue 


 Gross profit / margin 


 Operating expenses 















Residential, Light
Commercial


Commercial and
Industrial
Solutions


Others

Intersegment
Eliminations


Residential, Light
Commercial

Commercial and
Industrial
Solutions


Others

Intersegment
Eliminations



 Research and
development 


 Sales, general
and
administrative 


 Restructuring
charges 


 (Gain)/loss on
sale and
impairment of
residential
lease assets 


 Gain on business
divestiture 


Other income
(expense), net 


 Equity in
earnings of
unconsolidat
ed investees 


Provision for
income taxes 


Net income (loss)
attributable to
stockholders 





GAAP


$                     197,710


$                    74,333


$                  10,056

$                    (7,293)


$                         34,625


$                      3,931


$                    (3,168)


$                      1,752



$                             -


$                             -


$                             -


$                             -


$                                          -


$                             -


$                      -


$                             -

$                        109,450





Adjustments based on IFRS:







































Mark-to-market gain on equity investments


-


-


-

-


-


-


-


-



-


-


-


-


-


(155,431)


-


-


(155,431)





Other adjustments:







































(Gain)/loss on sale and impairment of residential lease assets


-


-


-

-


(469)


-


-


-



-


-


-


386


-


-


-


-


(83)





Litigation


-


-


-

-


-


-


-


-



-


395


-


-


-


-


-


-


395





Stock-based compensation expense


-


-


-

-


623


-


-


-



-


3,831


-


-


-


-


-


-


4,454





Amortization of intangible assets


-


-


-

-


-


1,189


-


-



-


-


-


-


-


-


-


-


1,189





Restructuring charges


-


-


-

-


-


-


-


-



-


-


(97)


-


-


-


-


-


(97)





Gain on convertible notes repurchased


-


-


-

-


-


-


-


-



-


-


-


-


-


(104)


-


-


(104)





Tax effect


-


-


-

-


-


-


-


-



-


-


-


-


-


-


-


33,769


33,769





Non-GAAP


$                     197,710


$                    74,333


$                  10,056

$                    (7,293)


$                         34,779


$                      5,120


$                    (3,168)


$                      1,752



















$                          (6,458)





















































































June 28, 2020







 Revenue 


 Gross profit / margin 


 Operating expenses 















Residential, Light
Commercial


Commercial and Industrial
Solutions


Others

Intersegment
Eliminations


Residential, Light
Commercial

Commercial and
Industrial
Solutions


Others

Intersegment
Eliminations



 Research and
development 


 Sales, general
and
administrative 


 Restructuring
charges 


 (Gain)/loss on
sale and
impairment of
residential
lease assets 


 Gain on business
divestiture 


Other income
(expense), net


 Equity in
earnings of
unconsolidat
ed investees 


Provision for
income taxes 


Net income (loss)
attributable to
stockholders 





GAAP


$                     160,169


$                    50,319


$                  12,822

$                    (5,643)


$                         26,204


$                      8,924


$                    (6,283)


$                    (3,194)



$                             -


$                             -


$                             -


$                             -


$                                          -


$                             -


$                      -


$                             -


$                          55,890





Adjustments based on IFRS:







































Mark-to-market gain on equity investments


-


-


-

-


-


-


-


-



-


-


-


-


-


(71,060)


-


-


(71,060)





Other adjustments:







































Gain on business divestiture


-


-


-

-


-


-


-


-



-


-


-


-


(10,458)


(71)


-


-


(10,529)





(Gain)/loss on sale and impairment of residential lease assets


-


-


-

-


(458)


-


-


-



-


-


-


141


-


-


-


-


(317)





Stock-based compensation expense


-


-


-

-


471


-


-


-



-


3,484


-


-


-


-


-


-


3,955





Amortization of intangible assets


-


-


-

-


-


1,784


-


-



-


-


-


-


-


-


-


-


1,784





Transaction-related costs


-


-


-

-


-


-


-


-



-


1,382


-


-


-


-


-


-


1,382





Restructuring charges


-


-


-

-


-


-


-


-



-


-


659


-


-


-


-


-


659





Tax effect


-


-


-

-


-


-


-


-



-


-


-


-


-


-


-


994


994





Non-GAAP


$                     160,169


$                    50,319


$                  12,822

$                    (5,643)


$                         26,217


$                   10,708


$                    (6,283)


$                    (3,194)



















$                        (17,242)





















































































September 29, 2019





 Revenue 


 Gross profit / margin 


 Operating expenses 















Residential, Light
Commercial


Commercial and Industrial
Solutions


Others

Intersegment
Eliminations


Residential, Light
Commercial

Commercial and
Industrial

Solutions


Others

Intersegment
Eliminations



 Research and
development 


 Sales, general
and
administrative 


 Restructuring
charges 


 Loss on sale
and impairment
of residential
lease assets 


 Gain on business
divestiture 


Other income
(expense), net 


 Equity in
earnings of
unconsolidat
ed investees 


Provision for
income taxes


 

 Gain (Loss)
attributable to non-
controlling interests 


Net income
(loss)
attributable to stockholders 



GAAP


$                     204,090


$                    63,589


$                  33,975

$                 (15,612)


$                         27,407


$                         289


$                    16,860


$                          939



$                             -


$                             -


$                             -


$                             -


$                                          -


$                             -


$                      -


$                             -


$                                   -


$                    18,644



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:







































(Gain)/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



Stock-based compensation expense


-


-


-

-


741


-


-


-



-


4,234


-


-


-


-


-


-


-


4,975



Amortization of intangible assets


-


-


-

-


-


1,783


-


-



-


-


-


-


-


-


-


-


-


1,783



Transaction-related costs


-


-


-

-


-


-


-


-



-


976


-


-


-


-


-


-


-


976



Restructuring charges


-


-


-

-


-


-


-


-



-


-


4,283


-


-


-


-


-


-


4,283



Tax effect


-


-


-

-


-


-


-


-



-


-


-


-


-


-


-


(118)


-


(118)



Non-GAAP


$                     219,880


$                    63,524


$                  33,975

$                 (15,612)


$                         28,609


$                      2,072


$                    16,860


$                          939





















$                      9,055








































































































































































































NINE MONTHS ENDED














































September 27, 2020







 Revenue 


 Gross profit / margin 


 Operating expenses 















Residential, Light
Commercial


Commercial and Industrial
Solutions


Others

Intersegment
Eliminations


Residential, Light
Commercial

Commercial and
Industrial
Solutions


Others

Intersegment
Eliminations



 Research and
development 


 Sales, general
and
administrative 


Restructuring
charges 


(Gain)/loss on
sale and
impairment of
residential
lease assets 


 Gain on business
divestiture 


Other income
(expense), net 


Equity in
earnings of
unconsolidat
ed investees 


Provision for 
income taxes 


Net income (loss)
attributable to
stockholders 





GAAP


$                     584,749


$                 175,471


$                  55,613

$                 (32,815)


$                         89,470


$                      9,808


$                 (18,906)


$                    11,604



$                             -


$                             -


$                             -


$                             -


$                                          -


$                             -


$                      -


$                             -


$                        186,880





Adjustments based on IFRS:







































Legacy utility and power plant projects


-


(207)


-

-


-


(34)


-


-



-


-


-


-


-


-


-


-


(34)





Legacy sale-leaseback transactions


-


-


-

-


20


-


-


-



-


-


-


-


-


-


-


-


20





Mark-to-market gain on equity investments


-


-


-

-


-


-


-


-



-


-


-


-


-


(274,362)


-


-


(274,362)





Other adjustments:







































(Gain)/loss on sale and impairment of residential lease assets


-


-


-

-


(1,375)


-


-


-



-


-


-


253


-


-


-


-


(1,122)





Construction revenue on solar services contracts


5,392


-


-

-


4,735


-


-


-



-


-


-


-


-


-


-


-


4,735





Litigation


-


-


-

-


-


-


-


-



-


880


-


-


-


-


-


-


880





Stock-based compensation expense


-


-


-

-


1,653


-


-


-



-


11,734


-


-


-


-


-


-


13,387





Amortization of intangible assets


-


-


-

-


-


4,759


-


-



-


-


-


-


-


-


-


-


4,759





Gain on business divestiture


-


-


-

-


-


-


-


-



-


-


-


-


(10,458)


(71)


-


-


(10,529)





Business reorganization costs


-


-


-

-


-


-


-


-



-


1,863


-


-


-


-


-


-


1,863





Restructuring charges


-


-


-

-


-


-


-


-



-


-


2,138


-


-


-


-


-


2,138





Gain on convertible debt repurchased


-


-


-

-


-


-


-


-



-


-


-


-


-


(3,060)


-


-


(3,060)





Tax effect


-


-


-

-


-


-


-


-



-


-


-


-


-


-


-


35,614


35,614





Non-GAAP


$                     590,141


$                 178,195


$                  55,613

$                 (32,815)


$                         94,503


$                   14,533


$                 (18,906)


$                    11,604



















$                        (38,831)



































































































































































September 29, 2019





 Revenue 


 Gross profit / margin 


 Operating expenses 















Residential, Light
Commercial


Commercial and Industrial
Solutions


Others

Intersegment
Eliminations


Residential, Light
Commercial

Commercial and
Industrial
Solutions


Others

Intersegment
Eliminations



 Research and
development 


 Sales, general
and
administrative 


 Restructuring
charges 


 (Gain)/loss on
sale and
impairment of
residential
lease assets 


 Gain on business
divestiture 


Other income
(expense), net


 Equity in
earnings of
unconsolidat
ed investees 


Provision for
income taxes 


Gain (Loss)
attributable to non-
controlling interests 


Net income (loss) attributable to stockholders



GAAP


$                     482,085


$                 156,032


$                  78,728

$                 (26,237)


$                         49,969


$                      2,679


$                      5,751


$                    19,004



$                             -


$                             -


$                             -


$                             -


$                                          -


$                             -


$                      -


$                             -


$                                   -


$                 159,459



Adjustments based on IFRS:







































Legacy utility and power plant projects


-


(259)


-

-


993


-


-


-



-


-


-


-


-


-


-


-


-


993



Legacy sale-leaseback transactions


-


-


-

-


(4,688)


-


-


-



-


-


-


-


-


10,443


-


-


-


5,755



Mark-to-market gain on equity investments


-


-


-

-


-


-


-


-



-


-


-


-


-


(129,048)


953


-


-


(128,095)



Other adjustments:







































(Gain)/loss on sale and impairment of residential lease assets


-


-


-

-


(1,268)


-


-


-



-


-


-


36,710


-


-


-


-


(6,440)


29,002



Construction revenue on solar services contracts


124,909


-


-

-


18,052


-


-


-



-


-


-


-


-


-


-


-


(27,030)


(8,978)



Stock-based compensation expense


-


-


-

-


1,370


-


-


-



-


12,312


-


-


-


-


-


-


-


13,682



Amortization of intangible assets


-


-


-

-


-


5,352


-


-



-


-


-


-


-


-


-


-


-


5,352



Business reorganization costs


-


-


-

-


-


-


-


-



-


-


-


-


(143,250)


(150)


-


-


-


(143,400)



Transaction-related costs


-


-


-

-


-


-


-


-



-


3,571


-


-


-


-


-


-


-


3,571



Restructuring charges


-


-


-

-


-


-


-


-



-


-


6,071


-


-


-


-


-


-


6,071



Tax effect


-


-


-

-


-


-


-


-



-


-


-


-


-


-


-


1,817


-


1,817



Non-GAAP


$                     606,994


$                 155,773


$                  78,728

$                 (26,237)


$                         64,428


$                      8,031


$                      5,751


$                    19,004





















$                 (54,771)



 

SOURCE SunPower Corp.

For further information: Investors: Bob Okunski, 408-240-5447, Bob.Okunski@sunpower.com; Media: Tara Klein, 650-270-9454, Tklein@bateman.agency