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Solar PV Corporate News Release
Hanwha Q CELLS Reports Fourth Quarter and Full Year 2016 Results
Mar 23, 2017
JA Solar Announces Fourth Quarter and Fiscal Year 2016 Results
Mar 16, 2017
Higher yield of solar wafers and enhanced solar cell efficiency with new HeraGlaze coating by Heraeus
Mar 01, 2017
Heraeus enables significant higher efficiency gains with three new metallization pastes
Mar 01, 2017
First Solar, Inc. Announces Fourth Quarter & Full Year 2016 Financial Results
Feb 22, 2017
SunPower Reports Fourth Quarter 2016 Results
Feb 16, 2017
Trina Solar Announces Third Quarter 2016 Results
Nov 23, 2016
Canadian Solar Reports Third Quarter 2016 Results
Nov 21, 2016
JASolar Announces Third Quarter 2016 Financial Results
Nov 17, 2016
JinkoSolar Announces Third Quarter 2016 Financial Results
Nov 16, 2016
SunPower Reports Third Quarter 2016 Results
Nov 10, 2016
First Solar, Inc. Announces Third Quarter 2016 Financial Results
Nov 03, 2016
Hanwha Q CELLS Reports Second Quarter 2016 Results
Aug 23, 2016
Yingli Green Energy Reports Second Quarter 2016 Results
Aug 23, 2016
Canadian Solar Reports Second Quarter 2016 Results
Aug 18, 2016
JA Solar Announces Second Quarter 2016 Results
Aug 17, 2016
SunPower Reports Second Quarter 2016 Results
Aug 10, 2016
First Solar, Inc. Announces Second Quarter 2016 Financial Results
Aug 04, 2016
First Solar, Inc. Announces First Quarter 2016 Financial Results
Apr 27, 2016
JinkoSolar Announces Fourth Quarter and Full Year 2015 Financial Results
Mar 01, 2016
First Solar, Inc. Announces Fourth Quarter & Full Year 2015 Financial Results
Feb 24, 2016
SunPower Corp. announced financial results for its fourth quarter and fiscal year ended Jan. 3, 2016
Feb 18, 2016
Trina Solar Announces Receipt of a Preliminary Non-Binding Proposal to Acquire the Company
Dec 14, 2015
Hanwha Q CELLS Reports Third Quarter 2015 Results
Nov 19, 2015
JinkoSolar Announces Third Quarter 2015 Financial Results
Nov 19, 2015
JA Solar Announces Third Quarter 2015 Results
Nov 17, 2015
SunPower Announces Fiscal Year 2016 Guidance
Nov 12, 2015
SunEdison Reports Third Quarter 2015 Results
Nov 10, 2015
Canadian Solar Reports Third Quarter 2015 Results
Nov 10, 2015
Yingli Green Energy Reports Second Quarter 2015 Results
Sep 08, 2015
Hanwha Q CELLS Reports Second Quarter 2015 Results
Aug 27, 2015
TSMC to Cease Solar Manufacturing Operations
Aug 25, 2015
JinkoSolar Announces Better-Than-Expected Second Quarter 2015 Financial Results
Aug 20, 2015
Trina Solar Announces $43.1 million of Net Profits for Second Quarter 2015 Results
Aug 18, 2015
First Solar, Inc. Announces Second Quarter 2015 Financial Results with $896 million of Net sales.
Aug 05, 2015
Sunpower announced financial results of 377 million net profits for its second fiscal quarter ended June 28, 2015.
Jul 29, 2015
8point3 Energy Partners LP, a YieldCo Formed by First Solar, Inc. and SunPower Corporation, Announces Pricing of its Ini
Jun 19, 2015
JA Solar and Essel Infraprojects Limited Sign MOU on 500MW PV Joint Venture
May 25, 2015
First Solar, Inc. Announces First Quarter 2015 Financial Results with net loss of USD 62 million
May 01, 2015
Israeli Parliament Solar Project Adopts JA Solar Modules
Apr 07, 2015
JA Solar Supplies Modules Again to First Large-Scale Solar Farm in Central America
Mar 16, 2015
Hyundai offers compact 250W high-performance modules for UK rooftop market
Mar 12, 2015
JA Solar Launching 1500V PV Module
Mar 09, 2015
Trina Solar Announces New Efficiency Records for Silicon Solar Cells
Mar 05, 2015
Canadian Solar Reports Fourth Quarter and Full Year 2014 Results
Mar 05, 2015
JA Solar Makes Breakthrough in South Pacific Market in 2014
Feb 05, 2015
First Solar Achieves Efficiency, Durability Milestones
Feb 05, 2015
JA Solar Reaches 100MWp of PV Module Shipments to Solarcentury for UK Projects in 2014
Jan 05, 2015
JA Solar Supplies 100MW of Modules to First Large-Scale Solar Farm in Pakistan
Jan 05, 2015
Hanwha Solarone Files Shareholder Circular for Acquisition of Hanwha Q CELLS
Dec 29, 2014
Motech and Topcell Announced the Signing of Merger Agreement
Dec 26, 2014
JA Solar Supplies 100MW of Modules to First Large-Scale Solar Farm in Pakistan
Dec 08, 2014
Yingli Green Energy Reports Third Quarter 2014 Results
Nov 25, 2014
Trina Solar Announces Third Quarter 2014 Results
Nov 24, 2014
Hanwha SolarOne Reports Third Quarter 2014 Results
Nov 21, 2014
JA Solar Announces Third Quarter 2014 Results
Nov 19, 2014
Trina Solar Announces New Efficiency Records for Silicon Solar Cells
Nov 17, 2014
JA Solar Sets Power Output Record of over 280W for Multi-Si 60-cells Solar Modules
Nov 17, 2014
SunPower Announces Fiscal Year 2015 Guidance
Nov 13, 2014
WINAICO launches patented micro-crack preventing HeatCap technology at PV Taiwan
Oct 22, 2014
Trina Solar Announces Fourth Quarter and Full Year 2014 Results
Jan 01, 1970

SunPower Reports Second Quarter 2016 Results

Company Announces Realignment of Power Plant Segment and Manufacturing Operations

Updates Fiscal Year 2016 Guidance

SAN JOSE, Calif., Aug. 9, 2016 -- SunPower Corp. (NASDAQ: SPWR) today announced financial results for its second quarter ended July 3, 2016.

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

2nd Quarter

2016

1st Quarter

2016

2nd  Quarter

2015

GAAP revenue

$420.5

$384.9

$381.0

GAAP gross margin

9.8%

13.4%

18.6%

GAAP net loss

($70.0)

($85.4)

$6.5

GAAP net loss per diluted share

($0.51)

($0.62)

$0.04

Non-GAAP revenue1

$401.8

$433.6

$376.7

Non-GAAP gross margin1

13.1%

13.6%

17.6%

Non-GAAP net income (loss)1

($30.1)

($41.2)

$27.2

Non-GAAP net income (loss) per diluted share1

($0.22)

($0.30)

$0.18

EBITDA1

$29.9

$6.3

$63.6

 

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

 "Our second quarter execution was solid as we met our financial targets and achieved key milestones across the company," said Tom Werner, SunPower president and CEO.  "During the quarter we saw significant customer demand for our recently introduced Helix™ and SunPower Equinox™ complete commercial and residential solutions, respectively. We are also seeing stronger than anticipated demand and price premium for our highest efficiency, next generation X-21 and X-22 Series solar panels.  In our upstream solar cell and panel manufacturing operations, we delivered strong yields and panel output in our fabs, continued our technology leadership with the announcement of our world record 24.1 percent efficient rooftop solar panel and successfully started up our first high volume, Performance Series production lines in Mexico.  

"In our distributed generation business for the second quarter, we saw solid execution in both the residential and commercial segments.  In commercial, our performance was above plan as we successfully ramped our Helix product deployment to approximately 20 megawatts (MW) in the second quarter while signing over 25 MW of new contracts for customers such as the U.S. Army.  We were also pleased to complete the drop down of our Macy's project to 8point3 Energy Partners, and we continue to believe that 8point3 Energy Partners will be a key strategic vehicle for the company going forward.  With a record pipeline of more than $1.3 billion, strong bookings, currently stable pricing and the continued successful ramp of our Helix solution, we are well positioned to gain share in the commercial market.  Our residential segment also performed well, with solid fundamentals in the U.S. and improving traction in Europe and Japan.  In the U.S., we are seeing a pronounced shift to our new SunPower Equinox complete solution which accounted for 50 percent of bookings by the end of the quarter.  Total U.S. residential MW deployment was up approximately 25 percent year-over-year, and we continued to expand our utility channel initiatives, most recently a new solar plus storage partnership with Consolidated Edison.

"In our power plant segment, we expanded our international project backlog with the announcement of more than 250 MW of projects in Chile, bringing our total Latin America signed Power Purchase Agreement (PPA) portfolio to over 800 MW.  Additionally, we secured 40 MW of innovative solar plus battery storage projects for deployment in the French overseas territories.  In the U.S., we were pleased to announce the sale of a controlling interest in our 102-MW Henrietta project to Southern Company and added to our public sector footprint as we started construction of our 9.5-MW project for the California Department of Water Resources.

"However, while the long-term fundamentals for solar power remain strong, we see a number of near-term industry challenges, primarily in our power plant segment, that we expect to impact our business and financial performance in the second half of 2016.  The extension of the Investment Tax Credit, as well as the bonus depreciation credit, while beneficial to the long-term health of the industry, has reduced the urgency to complete new solar projects by the end of 2016, with many customers adopting a longer-term timeline for project completion.  Additionally, near-term economic returns have deteriorated due to aggressive PPA pricing by new market entrants, including a number of large, global independent power companies.  We are also seeing customer project IRRs rising in the near term as buyers have increased their hurdle rates due to industry conditions.  Finally, the continued market disruption in the YieldCo environment has impacted our assumptions related to monetizing deferred profits.

"As a result, we have proactively decided to streamline our power plant development segment while shifting investment to our distributed generation (DG) segments.  We intend to focus our development resources on a limited number of core markets, primarily in the Americas, where we believe we have a sustainable competitive advantage and a project pipeline of over 9 gigawatts (GW). Outside these core markets, we will focus our power plant business on the sale of our new Oasis complete solution incorporating Performance Series panel technology to developers and Engineering, Procurement and Construction companies in global markets, including Total.  We also plan to delay the timing of certain projects in our 2016 and 2017 pipeline to take advantage of planned cost reduction efforts over the next two years.   We expect these actions to significantly lower operating expense and capital deployment in our power plant business while maintaining leadership in our core markets. 

"Additionally, we are realigning our manufacturing operations to increase the relative mix of X-Series capacity due to expected strong customer demand in our DG business as well as adjusting our panel assembly capacity to be closer to our core markets.  We plan to utilize equipment from some of our older solar cell manufacturing lines in Fab 2 to debottleneck capacity of our latest generation technology in order to increase the supply of X-Series panels.  These initiatives will enable us to increase X-Series output by up to 100 MW by the end of 2017.  Additionally, in connection with the realignment of our power plant segment principally around our core markets, we have made the decision to close our Philippine panel assembly facility and transfer the equipment to our latest generation, lower cost facilities in Mexico. This change will optimize our supply chain and move final panel assembly closer to our key markets.

"Overall, we expect these initiatives will strengthen our overall competitive position and enable us to profitably capitalize on the anticipated global growth of solar power as a long term, mainstream energy source.  The core foundation of our long-term strategy remains unchanged, namely, developing innovative, complete customer solutions based on differentiated technology and deploying these solutions across a diversified portfolio of applications and geographic markets," concluded Werner.

"Our solid second quarter performance reflects the benefits of our diversified go-to-market strategy" said Chuck Boynton, SunPower Chief Financial Officer.  "Our balance sheet remains strong as we exited the quarter with more than $590 million in cash.  Looking forward, we believe our realignment plan will enable us to expand our leadership position in distributed generation, further strengthen our presence in our core power plant markets, improve cash flow and lower our annual operating expenses by up to 10 percent."

As a result of the announced realignment, the company expects the following:

  • Workforce reduction of approximately 15 percent or 1,200 employees, primarily related to its Philippine facility closure
  • Restructuring charges totaling $30-$45 million
  • Substantial portion of charges to be incurred in the third quarter of 2016 with more than 50 percent of the total charges to be cash
  • Annual operating expense reductions of approximately 10 percent

Additionally, second quarter fiscal 2016 non-GAAP results include net adjustments that, in the aggregate, decreased (increased) non-GAAP net loss by $39.9 million, including $18.0 million related to 8point3 Energy Partners, $4.1 million related to utility and power plant projects, $3.0 million related to sale of operating lease assets, $3.0 million related to sale-leaseback transactions, $16.5 million related to stock-based compensation expense, $(2.2) million related to other adjustments, and $(2.5) million related to tax effect.

Financial Outlook

As a result of the challenges described above, the company is updating its previously disclosed fiscal year 2016 guidance, as well as providing selected forecasts for fiscal year 2017.

On a GAAP basis, the company now expects 2016 revenue of $2.8 billion to $3.0 billion, gross margin of 9.5 percent to 11.5 percent and net loss of $175 million to $125 million.   Fiscal year 2016 GAAP guidance includes the impact of the company's HoldCo asset strategy and revenue and timing deferrals due to real estate accounting.

The company's updated 2016 non-GAAP financial guidance is as follows:  revenue of $3.0 billion to $3.2 billion, gross margin of 10.5 percent to 12.5 percent, EBITDA of $275 million to $325 million, capital expenditures of $225 million to $245 million and gigawatts deployed in the range of 1.45 GW to 1.65 GW. 

For 2017, the company expects a GAAP net loss of $200 million to $100 million and EBITDA in the range of $300 million to $400 million.  The company expects that at the lower end of the guidance range, 2017 EBITDA would be generated almost entirely from the company's DG business and believes that with the announced realignment, it will be well positioned to capitalize on the long term growth potential in the global power plant market. 

The company's third quarter fiscal 2016 GAAP guidance is as follows: revenue of $700 million to $800 million, gross margin of 14.5 percent to 16.5 percent and net loss of $5 million to net income of $20 million.  Third quarter 2016 GAAP guidance includes the impact of the company's HoldCo asset strategy and revenue and timing deferrals due to real estate accounting.  On a non-GAAP basis, the company expects revenue of $750 million to $850 million, gross margin of 16.5 percent to 18.5 percent, EBITDA of $115 million to $140 million and megawatts deployed in the range of 380 MW to 420 MW. 

The company will host a conference call for investors this afternoon to discuss its second quarter 2016 performance at 1:30 p.m. Pacific Time.  The call will be webcast and can be accessed from SunPower's website at http://investors.sunpower.com/events.cfm.

This press release contains both GAAP and non-GAAP financial information.  Non-GAAP figures are reconciled to the closest GAAP equivalent categories in the financial attachment of this press release.  Please note that the company has posted supplemental information and slides related to its second quarter 2016 performance on the Events and Presentations section of SunPower's Investor Relations page at http://investors.sunpower.com/events.cfm.  The capacity of power plants in this release is described in approximate megawatts on a direct current (dc) basis unless otherwise noted.

About SunPower

As one of the world's most innovative and sustainable energy companies, SunPower Corp. (NASDAQ: SPWR) provides a diverse group of customers with complete solar solutions and services. Residential customers, businesses, governments, schools and utilities around the globe rely on SunPower's more than 30 years of proven experience. From the first flip of the switch, SunPower delivers maximum value and performance throughout the long life of every solar system. Headquartered in Silicon Valley, SunPower has dedicated, customer-focused employees in Africa, Asia, Australia, Europe, and North and South America. For more information about how SunPower is changing the way our world is powered, visit www.sunpower.com.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including, but not limited to, statements regarding: (a) our positioning for future success, gains in market share, competitive advantage, and ability to profitably capitalize on future market growth, including in our core markets; (b) the long-term fundamentals for solar power; (c) our plans for realignment of our manufacturing operations and power plant segment, including the anticipated increase in X-series output; (d) our expectations for the success and financial impact of our planned realignment, including impact on our balance sheet, long term cash flow and annual operating expenses; (e) our ability to reduce costs, including operating expense and capital deployment in our power plant business; (f) our project pipeline;  (g) 8point3's role within our company strategy; (h) the ramp of our Helix solution; (i) third quarter fiscal 2016 guidance, including GAAP revenue, gross margin, and net income (loss), as well as non-GAAP revenue, gross margin, EBITDA, and MW deployed; (j) full year fiscal 2016 guidance, including GAAP revenue, gross margin and net loss, as well as non-GAAP revenue, gross margin, capital expenditures, EBITDA, and gigawatts deployed and (k) our full year fiscal 2017 selected forecasts.  These forward-looking statements are based on our current assumptions, expectations and beliefs and involve substantial risks and uncertainties that may cause results, performance or achievement to materially differ from those expressed or implied by these forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to: (1) competition in the solar and general energy industry and downward pressure on selling prices and wholesale energy pricing; (2) our liquidity, substantial indebtedness, and ability to obtain additional financing for our projects and customers; (3) regulatory changes and the availability of economic incentives promoting use of solar energy; (4) challenges inherent in constructing certain of our large projects; (5) 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; (6) fluctuations in our operating results; (7) maintaining or increasing our manufacturing capacity and containing manufacturing difficulties that could arise; (8) challenges managing our joint ventures and partnerships; (9) challenges executing on our HoldCo and YieldCo strategies, including the risk that 8point3 Energy Partners may be unsuccessful; (10) fluctuations or declines in the performance of our solar panels and other products and solutions; (11) our ability to meet our cost reduction targets and implement the planned realignment of our manufacturing operations and power plant segment and (12) the outcomes of previously disclosed litigation.  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.

©2016 SunPower Corporation. All rights reserved. SUNPOWER, the SUNPOWER logo, SUNPOWER EQUINOX, HELIX and OASIS are trademarks or registered trademarks of SunPower Corporation in the U.S. and other countries as well.

SUNPOWER CORPORATION

 CONSOLIDATED BALANCE SHEETS 

 (In thousands) 

 (Unaudited) 

Jul. 3,

Jan. 3,

2016

2016

Assets

Current assets:

Cash and cash equivalents

$        590,091

$          954,528

Restricted cash and cash equivalents, current portion

23,091

24,488

Accounts receivable, net

211,753

190,448

Costs and estimated earnings in excess of billings

32,677

38,685

Inventories

467,914

382,390

Advances to suppliers, current portion

72,061

85,012

Project assets - plants and land, current portion

904,429

479,452

Prepaid expenses and other current assets

306,616

359,517

Total current assets

2,608,632

2,514,520

Restricted cash and cash equivalents, net of current portion

45,891

41,748

Restricted long-term marketable securities

6,362

6,475

Property, plant and equipment, net

818,711

731,230

Solar power systems leased and to be leased, net

594,266

531,520

Project assets - plants and land, net of current portion

26,282

5,072

Advances to suppliers, net of current portion

246,468

274,085

Long-term financing receivables, net

429,910

334,791

Goodwill and other intangible assets, net

107,547

119,577

Other long-term assets

317,095

297,975

Total assets

$     5,201,164

$      4,856,993

Liabilities and Equity

Current liabilities:

Accounts payable

$        518,598

$          514,654

Accrued liabilities

373,874

313,497

Billings in excess of costs and estimated earnings

92,295

115,739

Short-term debt

350,764

21,041

Customer advances, current portion

41,544

33,671

Total current liabilities

1,377,075

998,602

Long-term debt

578,231

478,948

Convertible debt

1,112,127

1,110,960

Customer advances, net of current portion

112,663

126,183

Other long-term liabilities

578,917

564,557

Total liabilities

3,759,013

3,279,250

Redeemable noncontrolling interests in subsidiaries

90,551

69,104

Equity:

Preferred stock

-

-

Common stock

138

137

Additional paid-in capital

2,391,912

2,359,917

Accumulated deficit

(903,018)

(747,617)

Accumulated other comprehensive loss

(12,601)

(8,023)

Treasury stock, at cost

(174,937)

(155,265)

Total stockholders' equity

1,301,494

1,449,149

Noncontrolling interests in subsidiaries

50,106

59,490

Total equity

1,351,600

1,508,639

Total liabilities and equity

$     5,201,164

$      4,856,993

 

SUNPOWER CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share data)

(Unaudited)

THREE MONTHS ENDED

SIX MONTHS ENDED

Jul. 3,

Apr. 3,

Jun. 28, 

Jul. 3,

Jun. 28, 

2016

2016

2015

2016

2015

Revenue:

Residential 

$   177,715

$   151,807

$   152,205

$     329,522

$   307,529

Commercial

97,846

52,241

62,984

150,087

112,047

Power Plant

144,891

180,827

165,831

325,718

402,315

Total revenue

420,452

384,875

381,020

805,327

821,891

Cost of revenue:

Residential 

138,959

118,160

116,979

257,119

239,751

Commercial

89,523

45,226

58,842

134,749

105,722

Power Plant

150,676

169,952

134,318

320,628

314,719

Total cost of revenue

379,158

333,338

310,139

712,496

660,192

Gross margin

41,294

51,537

70,881

92,831

161,699

Operating expenses:

Research and development

31,411

32,706

20,560

64,117

41,728

Selling, general and administrative

84,683

97,791

81,520

182,474

158,734

Restructuring charges

117

96

1,749

213

5,330

   Total operating expenses

116,211

130,593

103,829

246,804

205,792

Operating loss

(74,917)

(79,056)

(32,948)

(153,973)

(44,093)

  Other income (expense), net

(18,966)

(18,416)

6,959

(37,382)

(10,786)

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

(93,883)

(97,472)

(25,989)

(191,355)

(54,879)

Benefit from (provision for) income taxes

(6,648)

(3,181)

659

(9,829)

(1,692)

Equity in earnings (loss) of unconsolidated investees

8,350

(764)

1,864

7,586

4,055

Net loss  

(92,181)

(101,417)

(23,466)

(193,598)

(52,516)

  Net loss attributable to noncontrolling interests and redeemable noncontrolling interests

22,189

16,008

29,975

38,197

49,444

Net income (loss) attributable to stockholders

$   (69,992)

$   (85,409)

$        6,509

$   (155,401)

$      (3,072)

Net income (loss) per share attributable to stockholders:

- Basic

$        (0.51)

$        (0.62)

$          0.05

$          (1.13)

$        (0.02)

- Diluted

$        (0.51)

$        (0.62)

$          0.04

$          (1.13)

$        (0.02)

Weighted-average shares:

- Basic

138,084

137,203

134,376

137,644

133,205

- Diluted

138,084

137,203

156,995

137,644

133,205

 

SUNPOWER CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

THREE MONTHS ENDED

SIX MONTHS ENDED

Jul. 3,

Apr. 3,

Jun. 28,

Jul. 3,

Jun. 28,

2016

2016

2015

2016

2015

Cash flows from operating activities:

Net loss

$     (92,181)

$   (101,417)

$      (23,466)

$    (193,598)

$      (52,516)

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

Depreciation and amortization expense

40,898

42,117

31,442

83,015

60,005

Stock-based compensation

16,475

16,520

14,040

32,995

27,586

Non-cash interest expense

309

346

571

655

5,251

Equity in loss (earnings) of unconsolidated investees

(8,350)

764

(1,864)

(7,586)

(4,055)

Excess tax benefit from stock-based compensation

-

-

(6,155)

-

(6,727)

Deferred income taxes

2,018

(1,169)

6,874

849

(367)

Gain on sale of residential lease portfolio to 8point3 Energy Partners LP

-

-

(27,915)

-

(27,915)

Other, net

909

890

522

1,799

1,377

Changes in operating assets and liabilities, net of effect of acquisitions:

Accounts receivable

(35,856)

12,561

32,467

(23,295)

65,202

Costs and estimated earnings in excess of billings

23,826

(17,525)

(2,332)

6,301

138,638

Inventories

(96,799)

(18,248)

(22,654)

(115,047)

(130,726)

Project assets

(254,007)

(179,376)

(218,624)

(433,383)

(311,774)

Prepaid expenses and other assets

93,743

(45,034)

54,515

48,709

29,425

Long-term financing receivables, net

(51,108)

(44,011)

(40,060)

(95,119)

(69,258)

Advances to suppliers

28,656

11,913

11,191

40,569

25,094

Accounts payable and other accrued liabilities

82,051

(69,974)

(21,911)

12,077

(71,529)

Billings in excess of costs and estimated earnings

(49,915)

26,866

3,709

(23,049)

9,330

Customer advances

(760)

(5,124)

(2,383)

(5,884)

(12,482)

Net cash used in operating activities

(300,091)

(369,901)

(212,033)

(669,992)

(325,441)

Cash flows from investing activities:

Increase in restricted cash and cash equivalents

(941)

(1,806)

(9,579)

(2,747)

(28,407)

Purchases of property, plant and equipment

(46,280)

(47,044)

(44,214)

(93,324)

(68,778)

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

(22,918)

(23,238)

(22,429)

(46,156)

(41,832)

Cash paid for solar power systems

(2,282)

-

(10,007)

(2,282)

(10,007)

Proceeds from (payments to) 8point3 Energy Partners LP attributable to real estate projects and residential lease portfolio

130

(9,968)

341,174

(9,838)

341,174

Cash paid for investments in unconsolidated investees

(557)

(9,752)

(7,092)

(10,309)

(7,092)

Cash paid for intangibles

-

-

-

-

(526)

Net cash provided by (used in) investing activities

(72,848)

(91,808)

247,853

(164,656)

184,532

Cash flows from financing activities:

Cash paid for repurchase of convertible debt

-

-

-

-

(324,273)

Proceeds from settlement of 4.50% Bond Hedge

-

-

-

-

74,628

Payments to settle 4.50% Warrants

-

-

(574)

-

(574)

Repayment of bank loans and other debt

(162)

(7,725)

(7,873)

(7,887)

(15,819)

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

24,889

28,339

54,830

53,228

54,830

Repayment of non-recourse residential financing

(1,101)

(1,065)

(29,858)

(2,166)

(40,802)

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

33,083

24,082

46,046

57,165

91,936

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

(1,596)

(5,309)

(2,307)

(6,905)

(4,567)

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

354,052

79,440

116,992

433,492

207,710

Repayment of non-recourse power plant and commercial financing

(51)

(37,301)

(226,488)

(37,352)

(226,578)

Proceeds from 8point3 Energy Partners LP attributable to operating leases and unguaranteed sales-type lease residual values

-

-

29,300

-

29,300

Proceeds from exercise of stock options

-

-

175

-

178

Excess tax benefit from stock-based compensation

-

-

6,155

-

6,727

Purchases of stock for tax withholding obligations on vested restricted stock

(795)

(18,876)

(1,622)

(19,671)

(40,326)

Net cash provided by (used in) financing activities

408,319

61,585

(15,224)

469,904

(187,630)

Effect of exchange rate changes on cash and cash equivalents

(467)

774

874

307

(4,593)

Net increase (decrease) in cash and cash equivalents

34,913

(399,350)

21,470

(364,437)

(333,132)

Cash and cash equivalents, beginning of period

555,178

954,528

601,573

954,528

956,175

Cash and cash equivalents, end of period

$     590,091

$     555,178

$      623,043

$      590,091

$      623,043

Non-cash transactions:

Assignment of residential lease receivables to third parties

$          1,379

$          1,097

$              382

$          2,476

$          1,689

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

14,806

15,085

15,764

29,891

30,428

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

6,282

9,050

3,971

6,282

3,971

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

7,375

-

5,026

7,375

6,076

Property, plant and equipment acquisitions funded by liabilities

73,247

81,369

37,017

73,247

37,017

Sale of residential lease portfolio in exchange for non-controlling equity interests in the 8point3 Group

-

-

68,273

-

68,273

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

-

8,726

-

8,726

-

Exchange of receivables for an investment in an unconsolidated investee

2,890

-

-

2,890

-

 

Use of Non-GAAP Financial Measures

To supplement its consolidated financial results presented in accordance with GAAP, the company uses non-GAAP measures that are adjusted for certain items from the most directly comparable GAAP measures, as described below. The specific non-GAAP measures listed below are: revenue; gross margin; net income; net income per diluted share; and earnings before interest, taxes, depreciation and amortization ("EBITDA"). Management believes that each of these non-GAAP measures is useful to investors, enabling them to better assess changes in each of these key elements of the company's results of operations across different reporting periods on a consistent basis, independent of certain items as described below. Thus, each of these non-GAAP financial measures provides investors with another method to assess the company's operating results in a manner that is focused on its ongoing, core operating performance, absent the effects of these items. Management uses these non-GAAP measures internally to assess the business, its financial performance, current and historical results, as well as for strategic decision-making and forecasting future results. Many of the analysts covering the company also use these non-GAAP measures in their analyses. Given management's use of these non-GAAP measures, the company believes these measures are important to investors in understanding the company's operating results as seen through the eyes of management. These non-GAAP measures are not prepared in accordance with GAAP or intended to be a replacement for GAAP financial data; the non-GAAP measures should be reviewed together with the GAAP measures and are not intended to serve as a substitute for results under GAAP, and may be different from non-GAAP measures used by other companies.

Non-GAAP revenue includes adjustments relating to 8point3, utility and power plant projects, the sale of operating lease assets, and sale-leaseback transactions, each as described below. Non-GAAP gross margin includes adjustments relating to 8point3, utility and power plant projects, the sale of operating lease assets, sale-leaseback transactions, stock-based compensation, and other items, each as described below. In addition to those same adjustments, non-GAAP net income and non-GAAP net income per diluted share are adjusted for the tax effect of these non-GAAP adjustments as described below. In addition to the same adjustments as non-GAAP net income, 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")

Management utilizes IFRS guidance for non-GAAP purposes to record the revenue and profit recognition of certain transactions, each of which are further described below. In these situations, management believes that the IFRS standards enable investors to better evaluate the company's revenue and profit generation performance.

  • 8point3. In 2015, 8point3 Energy Partners LP ("8point3 Energy Partners"), a joint YieldCo vehicle, was formed by the company and First Solar, Inc. ("First Solar" and, together with the company, the "Sponsors") to own, operate and acquire solar energy generation assets. Class A shares of 8point3 Energy Partners are now listed on the NASDAQ Global Select Market under the trading symbol "CAFD." Immediately after the IPO, the company contributed a portfolio of 170 MW of its solar generation assets (the "SPWR Projects") to 8point3 Operating Company, LLC ("OpCo"), 8point3 Energy Partners' primary operating subsidiary. In exchange for the SPWR Projects, the company received cash proceeds as well as equity interests in several 8point3 Energy Partners affiliated entities: primarily common and subordinated units representing a 40.7% stake in OpCo and a 50.0% economic and management stake in 8point3 Holding Company, LLC ("Holdings"), the parent company of the general partner of 8point3 Energy Partners and the owner of incentive distribution rights in OpCo. Holdings, OpCo, 8point3 Energy Partners and their respective subsidiaries are referred to herein as the "8point3 Group" or "8point3."

    The company includes adjustments related to the sales of projects contributed to 8point3 based on the difference between the fair market value of the consideration received and the net carrying value of the projects contributed, of which, a portion is deferred in proportion to the company's retained equity stake in 8point3. The deferred profit is subsequently recognized over time. This treatment is consistent with the accounting rules relating to the sale of such projects under IFRS. Under these rules, with certain exceptions such as for projects already in operation, the company's revenue is equal to the fair market value of the consideration received, and cost of goods sold is equal to the net carrying value plus a partial deferral of profit proportionate with the retained equity stake. Under GAAP, these sales are recognized under either real estate, lease, or consolidation accounting guidance depending upon the nature of the individual asset contributed, with outcomes ranging from no profit recognition to full profit recognition. IFRS profit, less deferrals associated with retained equity, is recognized for sales related to the residential lease portfolio. Revenue recognition for other projects sold to 8point3 is deferred until these projects reach commercial operations, consistent with IFRS rules. Equity in earnings of unconsolidated investees also includes the impact of the company's share of 8point3's earnings related to sales of projects receiving sales recognition under IFRS but not GAAP.
  • Utility and power plant projects. The company includes adjustments related to the revenue recognition of utility and power plant projects based on the separately-identifiable components of transactions in order to reflect the substance of the transactions. This treatment is consistent with accounting rules relating to such projects under IFRS. Under GAAP, such projects are accounted for under real estate accounting guidance. Management calculates separate revenue and cost of revenue amounts each fiscal period in accordance with the two treatments above and the aggregate difference for the company's affected projects is included in the relevant reconciliation tables below. Over the life of each project, cumulative revenue and gross margin will be equivalent under the two treatments; however, revenue and gross margin will generally be recognized earlier under the company's non-GAAP treatment than under the company's GAAP treatment. Among other factors, this is due to the attribution of non-GAAP revenue and margin to the company's project development efforts at the time of initial project sale as required under IFRS accounting rules, whereas no separate attribution to this element occurs under GAAP real estate accounting guidance. Within each project, the relationship between the adjustments to revenue and gross margins is generally consistent. However, as the company may have multiple utility and power plant projects in progress at any given time, the relationship in the aggregate will occasionally appear otherwise.
  • Sale of operating lease assets. The company includes adjustments related to the revenue recognition of the sale of certain solar assets subject to an operating lease (or of solar assets that are leased by or intended to be leased by the third-party purchaser to another party) based on the net proceeds received from the purchaser. This treatment is consistent with accounting rules relating to the sale of such assets under IFRS. Under GAAP, these sales are accounted for as borrowing transactions in accordance with lease accounting guidance. Under such guidance, revenue and profit recognition is based on rental payments made by the end lessee, and the net proceeds from the purchaser are recorded as a non-recourse borrowing liability, with imputed interest expense recorded on the liability. This treatment continues until the company has transferred the substantial risks of ownership, as defined by lease accounting guidance, to the purchaser, at which point the sale is recognized.
  • Sale-leaseback transactions. The company includes adjustments related to the revenue recognition of certain sale-leaseback transactions based on the net proceeds received from the buyer-lessor. This treatment is consistent with accounting rules relating to such transactions under IFRS. Under GAAP, these transactions are accounted for under the financing method in accordance with real estate accounting guidance. Under such guidance, no revenue or profit is recognized at the inception of the transaction, and the net proceeds from the buyer-lessor are recorded as a financing liability. Imputed interest is recorded on the liability equal to the company's incremental borrowing rate adjusted solely to prevent negative amortization.

Other Non-GAAP Adjustments

  • Stock-based compensation. Stock-based compensation relates primarily to the company's equity incentive awards. Stock-based compensation is a non-cash expense that varies from period to period and is dependent on market forces that are difficult to predict. Due to this unpredictability, management excludes this item from its internal operating forecasts and models. 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.
  • Other. The company combines amounts previously disclosed under separate captions into "Other" when amounts do not have a significant impact on the current fiscal period. Management believes that these adjustments provide investors with a basis to evaluate the company's performance, including compared with the performance of other companies, without similar impacts.

    The amounts recorded in "Other" during the second quarter of fiscal 2016 are driven by adjustments which would have previously been disclosed under other non-GAAP adjustment captions, including "FPSC arbitration ruling," "IPO related costs," "Amortization of intangible assets," "Non-cash interest expense," and "Restructuring."
  • 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 and non-GAAP net income 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.
  • EBITDA adjustments. When calculating EBITDA, in addition to adjustments described above, the company excludes the impact during the period of the following items:
    • Cash interest expense, net of interest income
    • Provision for income taxes
    • Depreciation

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

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

 

SUNPOWER CORPORATION

RECONCILIATIONS OF GAAP MEASURES TO NON-GAAP MEASURES

(In thousands, except percentages and per share data)

(Unaudited)

Adjustments to Revenue:

THREE MONTHS ENDED

SIX MONTHS ENDED

Jul. 3,

Apr. 3,

Jun. 28,

Jul. 3,

Jun. 28,

2016

2016

2015

2016

2015

GAAP revenue

$      420,452

$       384,875

$       381,020

$       805,327

$       821,891

Adjustments based on IFRS:

8point3

(1,400)

(15,174)

-

(16,574)

-

Utility and power plant projects

(40,085)

53,538

(4,313)

13,453

(14,583)

Sale of operating lease assets

10,183

10,403

-

20,586

-

Sale-leaseback transactions

12,646

-

-

12,646

-

Non-GAAP revenue

$      401,796

$       433,642

$       376,707

$       835,438

$       807,308

Adjustments to Gross margin:

THREE MONTHS ENDED

SIX MONTHS ENDED

Jul. 3,

Apr. 3,

Jun. 28,

Jul. 3,

Jun. 28,

2016

2016

2015

2016

2015

GAAP gross margin

$         41,294

$         51,537

$         70,881

$         92,831

$       161,699

Adjustments based on IFRS:

8point3

(210)

(4,642)

-

(4,852)

-

Utility and power plant projects

4,128

3,557

(4,328)

7,685

(15,579)

Sale of operating lease assets

2,966

3,112

-

6,078

-

Sale-leaseback transactions

2,988

-

-

2,988

-

Other adjustments:

Stock-based compensation expense

5,464

4,125

3,259

9,589

5,825

Other

(4,038)

1,333

(3,669)

(2,705)

2,359

Non-GAAP gross margin

$         52,592

$         59,022

$         66,143

$       111,614

$       154,304

GAAP gross margin (%)

9.8%

13.4%

18.6%

11.5%

19.7%

Non-GAAP gross margin (%)

13.1%

13.6%

17.6%

13.4%

19.1%

Adjustments to Net income (loss):

THREE MONTHS ENDED

SIX MONTHS ENDED

Jul. 3,

Apr. 3,

Jun. 28,

Jul. 3,

Jun. 28,

2016

2016

2015

2016

2015

GAAP net income (loss) attributable to stockholders

$      (69,992)

$       (85,409)

$            6,509

$     (155,401)

$         (3,072)

Adjustments based on IFRS:

8point3

18,039

10,719

(4,688)

28,758

(4,688)

Utility and power plant projects

4,128

3,557

(4,328)

7,685

(15,579)

Sale of operating lease assets

2,979

3,120

-

6,099

-

Sale-leaseback transactions

2,988

-

-

2,988

-

Other adjustments:

Stock-based compensation expense

16,475

16,520

14,040

32,995

27,586

Other

(2,235)

8,608

13,838

6,373

37,908

Tax effect

(2,454)

1,684

1,797

(770)

4,737

Non-GAAP net income (loss) attributable to stockholders

$      (30,072)

$       (41,201)

$         27,168

$       (71,273)

$         46,892

Adjustments to Net income (loss) per diluted share:

THREE MONTHS ENDED

SIX MONTHS ENDED

Jul. 3,

Apr. 3,

Jun. 28,

Jul. 3,

Jun. 28,

2016

2016

2015

2016

2015

Net income (loss) per diluted share

Numerator:

GAAP net income (loss) available to common stockholders1

$      (69,992)

$       (85,409)

$            7,021

$     (155,401)

$         (3,072)

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

$      (30,072)

$       (41,201)

$         27,679

$       (71,273)

$         47,954

Denominator:

GAAP weighted-average shares

138,084

137,203

156,995

137,644

133,205

Effect of dilutive securities:

Stock options

-

-

-

-

39

Restricted stock units

-

-

-

-

2,239

Upfront warrants (held by Total)

-

-

-

-

7,055

Warrants (under the CSO2015)

-

-

-

-

1,827

0.75% debentures due 2018

-

-

-

-

12,026

Non-GAAP weighted-average shares1

138,084

137,203

156,995

137,644

156,391

GAAP net income (loss) per diluted share

$           (0.51)

$            (0.62)

$              0.04

$            (1.13)

$            (0.02)

Non-GAAP net income (loss) per diluted share

$           (0.22)

$            (0.30)

$              0.18

$            (0.52)

$              0.31

1In accordance with the if-converted method, net income (loss) available to common stockholders excludes interest expense related to the 0.75%, 0.875%, and 4.0% debentures if the debentures are considered converted in the calculation of net income (loss) per diluted share.  If the conversion option for a debenture is not in the money for the relevant period, the potential conversion of the debenture under the if-converted method is excluded from the calculation of non-GAAP net income (loss) per diluted share.

EBITDA:

THREE MONTHS ENDED

SIX MONTHS ENDED

Jul. 3,

Apr. 3,

Jun. 28,

Jul. 3,

Jun. 28,

2016

2016

2015

2016

2015

GAAP net income (loss) attributable to stockholders

$      (69,992)

$       (85,409)

$            6,509

$     (155,401)

$         (3,072)

Adjustments based on IFRS:

8point3

18,039

10,719

(4,688)

28,758

(4,688)

Utility and power plant projects

4,128

3,557

(4,328)

7,685

(15,579)

Sale of operating lease assets

2,979

3,120

-

6,099

-

Sale-leaseback transactions

2,988

-

-

2,988

-

Other adjustments:

Stock-based compensation expense

16,475

16,520

14,040

32,995

27,586

Cash interest expense, net of interest income

13,144

12,184

8,023

25,328

19,115

Provision for (benefit from) income taxes

6,648

3,181

(659)

9,829

1,692

Depreciation

37,730

33,826

30,820

71,556

59,424

Other

(2,235)

8,608

13,838

6,373

37,908

EBITDA

$         29,904

$            6,306

$         63,555

$         36,210

$       122,386

 

Q3 2016, FY 2016, and FY 2017

GUIDANCE

(in thousands except percentages)

Q3 2016

FY 2016

FY 2017

Revenue (GAAP)

$700,000-$800,000

$2,800,000-$3,000,000

N/A

Revenue (non-GAAP) (1)

$750,000-$850,000

$3,000,000-$3,200,000

N/A

Gross margin (GAAP)

14.5%-16.5%

9.5%-11.5%

N/A

Gross margin (non-GAAP) (2)

16.5%-18.5%

10.5%-12.5%

N/A

Net income (loss) (GAAP)

($5,000)-$20,000

($175,000)-($125,000)

($200,000)-($100,000)

EBITDA (3)

$115,000-$140,000

$275,000-$325,000

$300,000-$400,000

 

(1)

Estimated non-GAAP amounts above for Q3 2016 include net adjustments that increase revenue by approximately $35 million related to 8point3, $10 million related to sale of operating lease assets, and $5 million related to sale-leaseback transactions. Estimated non-GAAP amounts above for fiscal 2016 include net adjustments that increase (decrease) revenue by approximately $20 million related to 8point3, $5 million related to utility and power plant projects, ($5) million related to sale of operating lease assets, and $180 million related to sale-leaseback transactions.

(2)

Estimated non-GAAP amounts above for Q3 2016 include net adjustments that increase gross margin by approximately $13 million related to 8point3, $3 million related to sale of operating lease assets, $1 million related to sale-leaseback transactions, $5 million related to stock-based compensation expense, and $1 million related to other items. Estimated non-GAAP amounts above for fiscal 2016 include net adjustments that increase (decrease) gross margin by approximately $15 million related to 8point3, ($2) million related to sale of operating lease assets, $20 million related to sale-leaseback transactions, and $20 million related to stock-based compensation expense.

(3)

Estimated EBITDA amounts above for Q3 2016 include net adjustments that increase (decrease) net income by approximately $16 million related to 8point3, $3 million related to sale of operating lease assets, $1 million related to sale-leaseback transactions, $17 million related to stock-based compensation expense, $20 million related to restructuring, $5 million related to other items, $15 million related to interest expense, ($2) million related to income taxes, and $45 million related to depreciation. Estimated EBITDA amounts above for fiscal 2016 include net adjustments that increase (decrease) net loss by approximately ($60) million related to 8point3, $2 million related to sale of operating lease assets, ($20) million related to sale-leaseback transactions, ($70) million related to stock-based compensation expense, ($30) million related to restructuring, ($17) million related to other items, ($55) million related to interest expense, ($20) million related to income taxes, and ($180) million related to depreciation.  Estimated EBITDA amounts above for fiscal 2017 include net adjustments that decrease net loss by approximately ($65) million related to sale-leaseback transactions, ($70) million related to stock-based compensation expense, ($25) million related to other items, ($65) million related to interest expense, ($25) million related to income taxes, and ($250) million related to depreciation.

 

For further information: Investors, Bob Okunski, 408-240-5447, Bob.Okunski@sunpower.com or Media, Natalie Wymer, 408-457-2348, Natalie.Wymer@sunpower.com

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