SunPower Reports Second Quarter 2017 Results
SAN JOSE, Calif., Aug. 1, 2017 /PRNewswire/ -- SunPower Corp. (NASDAQ:SPWR) today announced financial results for its second quarter ended July 2, 2017.
($
Millions,
except
percentages
and
per-
share
data) 2nd Quarter 1st Quarter 2nd Quarter
2017 2017 2016
--- ---- ---- ----
GAAP
revenue $337.4 $399.1 $420.5
-------- ------ ------ ------
GAAP
gross
margin 4.5% (7.8%) 9.8%
------- --- ----- ---
GAAP
net
loss ($93.8) ($134.5) ($70.0)
----- ------ ------- ------
GAAP
net
loss
per
diluted
share ($0.67) ($0.97) ($0.51)
-------- ------ ------ ------
Non-
GAAP
revenue(1) $341.5 $429.5 $401.8
----------- ------ ------ ------
Non-
GAAP
gross
margin1,2 12.2% 6.5% 17.0%
---------- ---- --- ----
Non-
GAAP
net
loss1,2 ($49.3) ($50.4) ($14.2)
-------- ------ ------ ------
Non-
GAAP
net
loss
per
diluted
share1,2 ($0.35) ($0.36) ($0.10)
--------- ------ ------ ------
Adjusted
EBITDA1,2 $13.5 $8.6 $45.8
--------- ----- ---- -----
Operating
cash
flow ($161.8) ($126.9) ($300.1)
--------- ------- ------- -------
(1) Information about SunPower's
use of non-GAAP financial
information, including a
reconciliation to U.S. GAAP, is
provided under "Use of Non-GAAP
Financial Measures" below.
2 Excludes polysilicon costs
related to above market
polysilicon contracts.
"Our strong execution enabled us to meet our financial goals for the quarter despite the continued challenging industry conditions," said Tom Werner, SunPower president and CEO. "Our distributed generation business remains a key driver of our performance as demand for our complete solution products in both our residential and commercial segments remains robust. In power plant, we expect to deliver more than 500 MW of projects in the second half of this year. We are also seeing growing traction in our global SunPower® Solutions business as we booked or contracted more than 250 megawatts (MW) of agreements in the quarter. Operationally, we achieved our cost reduction targets for the quarter. Fab utilization is at 100 percent and we expect to remain fully utilized for the balance of the year. We also continued the successful ramp of our P-Series product in Mexico while starting initial P-Series production at our recently announced Chinese joint venture facility. Finally, we are benefitting from our investments in our next generation cell and module technology as we recently produced our first panels utilizing this technology on our new, leading-edge manufacturing line at our Silicon Valley research facility.
"Strategically, we continue to believe that our restructuring program will enable us to successfully navigate the current market transition while positioning us for improved financial performance. In the near-term, our focus remains on maximizing cash flow through project sales, lower operating expenses, and the potential monetization of non-core assets. In relation to 8point3 Energy Partners, our strategic review process is continuing, but we have received significant initial interest in the acquisition of our general partnership stake or in the sale of the entire partnership. Thus, we have made the decision not to actively seek a replacement partner for First Solar and to focus our efforts on the monetization of our ownership stake in the partnership. In the event we complete a sale of our ownership stake in 8point3, we believe the proceeds will provide us with additional resources to deleverage our balance sheet and retire our 2018 convertible bonds to minimize shareholder dilution and continue to execute on our restructuring plan. Additionally, depending on market conditions, we may have the opportunity to refinance our 2018 convertible bonds as well. We have also recently offered our Boulder Solar 1 project to 8point3 and potentially will offer other Right of First Offer (ROFO) projects to the partnership as well. In the event the partnership waives its rights to acquire these projects, we would sell them to third parties. In either case, we expect the sale of these ROFO projects to generate additional cash proceeds to fund our growth initiatives.
"Looking forward, we will continue to invest in innovative technologies and allocate resources to those areas that offer significant growth opportunities including our next generation cell and module technology, our complete solution product suite, energy storage, digital platforms and Smart Energy strategy, as we believe these initiatives will best position the company for long-term success. Also, our more focused approach to our power plant development activities will allow us to further invest in our leadership position in our distributed generation segments while building continuing momentum in our SunPower Solutions business. We expect these initiatives will improve our competitive position, strengthen our balance sheet and enable us to return to long-term sustained profitability." concluded Werner.
"Our second quarter results reflect our ability to execute on our diversified model in a challenging industry environment while benefitting from our corporate restructuring initiatives," said Chuck Boynton, SunPower chief financial officer. "In the near term, we continue to remain focused on prudently managing our working capital and strengthening our balance sheet. With our decision to monetize our ownership of 8point3 and expected additional non-core asset sales, we anticipate having the resources to retire our 2018 convertible bond while continuing to invest in our strategic initiatives. Given our restructuring, flexible business model and demonstrated continued support from Total, we believe we are well positioned for the future."
Second quarter fiscal 2017 non-GAAP results include net adjustments that, in the aggregate, decreased (increased) non-GAAP net loss by $44.5 million, including $2.5 million related to 8point3 Energy Partners, $2.4 million related to utility and power plant projects, $8.6 million related to stock-based compensation expense, $4.2 million related to amortization of intangible assets, $5.0 million related to restructuring expense, $21.8 million related to cost of above-market polysilicon, $(0.4) million related to other adjustments, and $0.4 million related to tax effect.
Financial Outlook
The company is updating its fiscal year 2017 revenue and gigawatt (GW) deployed guidance. The company now expects revenue of $1.9 billion to $2.1 billion on a GAAP basis and $2.1 billion to $2.3 billion on a non-GAAP basis with GW deployed in the range of 1.3 GW to 1.45 GW. This change is due to project schedule adjustments in Mexico to allow for improved project economics. Additionally, the company now expects lower than forecasted GAAP restructuring charges which will be in the range of $20 million to $60 million for the year. The balance of the company's previously disclosed fiscal year 2017 guidance remains unchanged: non-GAAP operational expenses of less than $350 million and capital expenditures of approximately $120 million. Additionally, the company continues to expect to generate positive operating cash flow through the end of fiscal year 2017 and exit the year with approximately $300 million in cash excluding any proceeds from the potential divestiture of non-core assets. The company is also forecasting positive Adjusted EBITDA for the full year 2017 and continues to believe that cash flow and liquidity remain the key evaluation metrics for investors in the near term.
The company's third quarter fiscal 2017 GAAP guidance is as follows: revenue of $300 million to $350 million, gross margin of negative 3 percent to negative 1 percent and net loss of $120 million to $100 million. Third quarter 2017 GAAP guidance includes the impact of the company's HoldCo asset strategy and revenue and timing deferrals due to real estate accounting as well as the impact of charges related to the company's restructuring initiatives. On a non-GAAP basis, the company expects revenue of $320 million to $370 million, gross margin of 5 percent to 7 percent, Adjusted EBITDA of breakeven to $20 million and megawatts deployed in the range of 405 MW to 435 MW.
The company expects to deliver more than 500 MW of power plant projects in the second half of the year with a significant majority to be recognized in the fourth quarter of 2017.
The company will host a conference call for investors this afternoon to discuss its second quarter 2017 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 first quarter 2017 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
With more than 30 years of proven experience, SunPower is a global leader in solar innovation and sustainability. Our unique approach emphasizes the seamless integration of advanced SunPower technologies, delivering The Power of One® complete solar solutions and lasting customer value. SunPower provides outstanding service and impressive electricity cost savings for residential, commercial and power plant customers. At SunPower, we are passionately committed to changing the way our world is powered. And as we continue shaping the future of Smart Energy, we are guided by our legacy of innovation, optimism, perseverance and integrity. Headquartered in Silicon Valley, SunPower has dedicated, customer-focused employees in Africa, Asia, Australia, Europe, North America and South America. Since 2011, we've been majority-owned by Total, the fourth largest publicly-listed energy company in the world. 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) anticipated project timelines; (b) expected fab utilization; (c) our expectations for the timing, success, and financial impact of our restructuring plan and associated initiatives, including plans to sell projects and monetize certain non-core assets, and the impact of these initiatives on our financial performance, cash flow, and operating expenses; (c) the outcome of our ongoing strategic review of options for 8point3, our ability to complete a sale of our ownership stake in 8point3, and our plans for the proceeds of such a sale; (d) our ability to complete planned project sales, deleverage our balance sheet, retire our 2018 convertible bonds, strengthen our balance sheet, and generate additional cash proceeds to fund our planned growth initiatives; (e) our plans to invest in technologies and strategic initiatives and allocate resources; (f) our positioning for future success, long-term competitiveness, and our ability to return to sustained profitability; (g) our expectations regarding future support from Total; (h) our expectations for the solar industry and the markets we serve, including market conditions, recovery, and long-term prospects for improvement; (i) full year fiscal 2017 guidance, including GAAP and non-GAAP revenue, gigawatts deployed, operational expenditures, capital expenditures, restructuring charges, cash flow and ending cash, and Adjusted EBITDA; and (j) our third quarter fiscal 2017 guidance, including GAAP revenue, gross margin, and net loss, as well as non-GAAP revenue, gross margin, Adjusted EBITDA, cash flow, and MW deployed. 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) appropriately sizing 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, or that we may not be able to successfully monetize our interest in 8point3 Energy Partners; (10) fluctuations or declines in the performance of our solar panels and other products and solutions; and (11) our ability to identify and successfully implement concrete actions to meet our cost reduction targets, reduce capital expenditures, and implement our restructuring plan and associated initiatives, including plans to sell projects, monetize assets, streamline our business and focus investment and resources.? 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.
©2017 SunPower Corporation. All rights reserved. SUNPOWER, the SUNPOWER logo, EQUINOX and HELIX are trademarks or registered trademarks of SunPower Corporation in the U.S. and other countries as well.
SUNPOWER CORPORATION
CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
Jul. 2, Jan. 1,
2017 2017
---- ----
Assets
Current assets:
Cash and cash
equivalents $327,281 $425,309
Restricted cash and
cash equivalents,
current portion 20,313 33,657
Accounts receivable,
net 195,871 219,638
Costs and estimated
earnings in excess of
billings 19,623 32,780
Inventories 444,990 401,707
Advances to suppliers,
current portion 106,820 111,479
Project assets -
plants and land,
current portion 373,751 374,459
Prepaid expenses and
other current assets 175,005 315,670
------- -------
Total current assets 1,663,654 1,914,699
Restricted cash and
cash equivalents, net
of current portion 53,429 55,246
Restricted long-term
marketable securities 4,860 4,971
Property, plant and
equipment, net 1,049,856 1,027,066
Solar power systems
leased and to be
leased, net 677,515 621,267
Project assets -
plants and land, net
of current portion 40,771 33,571
Advances to suppliers,
net of current
portion 145,154 173,277
Long-term financing
receivables, net 569,848 507,333
Goodwill and other
intangible assets,
net 36,713 44,218
Other long-term assets 114,920 185,519
Total assets $4,356,720 $4,567,167
========== ==========
Liabilities and Equity
Current liabilities:
Accounts payable $425,909 $540,295
Accrued liabilities 243,254 391,226
Billings in excess of
costs and estimated
earnings 11,707 77,140
Short-term debt 127,565 71,376
Convertible debt,
current portion 299,235 -
Customer advances,
current portion 41,261 10,138
------ ------
Total current
liabilities 1,148,931 1,090,175
Long-term debt 550,973 451,243
Convertible debt 815,503 1,113,478
Customer advances, net
of current portion 74,331 298
Other long-term
liabilities 785,549 721,032
Total liabilities 3,375,287 3,376,226
--------- ---------
Redeemable
noncontrolling
interests in
subsidiaries 114,045 103,621
Equity:
Preferred stock - -
Common stock 139 139
Additional paid-in
capital 2,426,134 2,410,395
Accumulated deficit (1,492,264) (1,218,681)
Accumulated other
comprehensive loss (6,635) (7,238)
Treasury stock, at
cost (180,998) (176,783)
-------- --------
Total stockholders'
equity 746,376 1,007,832
Noncontrolling
interests in
subsidiaries 121,012 79,488
Total equity 867,388 1,087,320
------- ---------
Total liabilities and
equity $4,356,720 $4,567,167
========== ==========
SUNPOWER CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(Unaudited)
THREE MONTHS ENDED SIX MONTHS ENDED
------------------ ----------------
Jul. 2, Apr. 2, Jul. 3, Jul. 2, Jul. 3,
2017 2017 2016 2017 2016
---- ---- ---- ---- ----
Revenue:
Residential $157,125 $136,031 $177,715 $293,156 $329,522
Commercial 100,105 108,263 97,846 208,368 150,087
Power Plant 80,216 154,782 144,891 234,998 325,718
------ ------- ------- ------- -------
Total revenue 337,446 399,076 420,452 736,522 805,327
Cost of revenue:
Residential 130,987 120,757 138,959 251,744 257,119
Commercial 97,530 110,629 89,523 208,159 134,749
Power Plant 93,694 198,622 150,676 292,316 320,628
------ ------- ------- ------- -------
Total cost of revenue 322,211 430,008 379,158 752,219 712,496
Gross margin 15,235 (30,932) 41,294 (15,697) 92,831
Operating expenses:
Research and development 19,754 20,515 31,411 40,269 64,117
Selling, general and administrative 68,703 67,403 84,683 136,106 182,474
Restructuring charges 4,969 9,790 117 14,759 213
----- ----- --- ------ ---
Total operating expenses 93,426 97,708 116,211 191,134 246,804
------ ------ ------- ------- -------
Operating loss (78,191) (128,640) (74,917) (206,831) (153,973)
Other income (expense), net:
Interest income 387 938 806 1,325 1,503
Interest expense (22,370) (20,769) (13,950) (43,139) (26,831)
Other, net (15,744) (2,190) (5,822) (17,934) (12,054)
Other expense, net (37,727) (22,021) (18,966) (59,748) (37,382)
------- ------- ------- ------- -------
Loss before income taxes and equity
in earnings of unconsolidated
investees (115,918) (150,661) (93,883) (266,579) (191,355)
Provision for income taxes (2,353) (2,031) (6,648) (4,384) (9,829)
Equity in earnings of unconsolidated
investees 5,449 1,052 8,350 6,501 7,586
----- ----- ----- ----- -----
Net loss (112,822) (151,640) (92,181) (264,462) (193,598)
Net loss attributable to
noncontrolling interests and
redeemable noncontrolling interests 19,062 17,161 22,189 36,223 38,197
------ ------
Net loss attributable to stockholders $(93,760) $(134,479) $(69,992) $(228,239) $(155,401)
======== ========= ======== ========= =========
Net loss per share attributable to
stockholders:
- Basic $(0.67) $(0.97) $(0.51) $(1.64) $(1.13)
- Diluted $(0.67) $(0.97) $(0.51) $(1.64) $(1.13)
Weighted-average shares:
- Basic 139,448 138,902 138,084 139,175 137,644
- Diluted 139,448 138,902 138,084 139,175 137,644
SUNPOWER CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
THREE MONTHS ENDED SIX MONTHS ENDED
------------------ ----------------
Jul. 2, Apr. 2, Jul. 3, Jul. 2, Jul. 3,
2017 2017 2016 2017 2016
---- ---- ---- ---- ----
Cash flows from operating activities:
Net loss $(112,822) $(151,640) $(92,181) $(264,462) $(193,598)
Adjustments to reconcile net loss to net cash
provided by (used in) operating activities:
Depreciation and amortization 45,269 42,084 40,898 87,353 83,015
Stock-based compensation 8,606 7,375 16,475 15,981 32,995
Non-cash interest expense 4,777 2,958 309 7,735 655
Impairment of equity method investment 8,607 - - 8,607 -
Dividend from 8point3 Energy Partners LP 7,409 7,192 - 14,601 -
Equity in earnings of unconsolidated
investees (5,449) (1,052) (8,350) (6,501) (7,586)
Deferred income taxes 1,058 227 1,701 1,285 939
Other, net (617) 4,777 909 4,160 1,799
Changes in operating assets and liabilities,
net of effect of acquisitions:
Accounts receivable (27,224) 51,669 (35,856) 24,445 (23,295)
Costs and estimated earnings in excess of
billings 1,859 11,298 23,826 13,157 6,301
Inventories (29,772) (40,004) (96,799) (69,776) (115,047)
Project assets (97,022) 37,192 (254,007) (59,830) (433,383)
Prepaid expenses and other assets 53,852 85,251 94,060 139,103 48,619
Long-term financing receivables, net (31,872) (30,643) (51,108) (62,515) (95,119)
Advances to suppliers 19,081 13,701 28,656 32,782 40,569
Accounts payable and other accrued
liabilities (16,422) (198,119) 82,051 (214,541) 12,077
Billings in excess of costs and estimated
earnings (4,411) (61,022) (49,915) (65,433) (23,049)
Customer advances 13,294 91,863 (760) 105,157 (5,884)
------
Net cash used in operating activities (161,799) (126,893) (300,091) (288,692) (669,992)
-------- -------- -------- -------- --------
Cash flows from investing activities:
Purchases of property, plant and equipment (17,246) (27,877) (46,281) (45,123) (93,325)
Cash paid for solar power systems, leased and
to be leased (22,811) (18,217) (22,918) (41,028) (46,156)
Cash paid for solar power systems (3,407) (4,605) (2,282) (8,012) (2,282)
Payments to 8point3 Energy Partners LP
attributable to real estate projects and
residential lease portfolio - - 130 - (9,838)
Dividend from equity method investee 1,421 - - 1,421 -
Cash paid for investments in unconsolidated
investees (1,461) (10,142) (557) (11,603) (10,309)
Net cash used in investing activities (43,504) (60,841) (71,908) (104,345) (161,910)
------- ------- ------- -------- --------
Cash flows from financing activities:
Proceeds from bank loans and other debt 90,637 110,763 - 201,400 -
Repayment of bank loans and other debt (99,913) (129,027) (162) (228,940) (7,887)
Proceeds from issuance of non-recourse
residential financing, net of issuance costs 10,062 20,580 24,889 30,642 53,228
Repayment of non-recourse residential
financing (1,726) (1,298) (1,101) (3,024) (2,166)
Contributions from noncontrolling interests
and redeemable noncontrolling interests
attributable to residential projects 47,595 49,030 33,083 96,625 57,165
Distributions to noncontrolling interests and
redeemable noncontrolling interests
attributable to residential projects (4,691) (3,763) (1,596) (8,454) (6,905)
Proceeds from issuance of non-recourse power
plant and commercial financing, net of
issuance costs 104,843 121,818 354,052 226,661 433,492
Repayment of non-recourse power plant and
commercial financing (3,057) (28,964) (51) (32,021) (37,352)
Purchases of stock for tax withholding
obligations on vested restricted stock (153) (4,062) (795) (4,215) (19,671)
Net cash provided by financing activities 143,597 135,077 408,319 278,674 469,904
------- ------- ------- ------- -------
Effect of exchange rate changes on cash, cash
equivalents, restricted cash and restricted
cash equivalents 386 788 (467) 1,174 307
--- --- ---- ----- ---
Net increase (decrease) in cash, cash
equivalents, restricted cash and restricted
cash equivalents (61,320) (51,869) 35,853 (113,189) (361,691)
Cash, cash equivalents, restricted cash and
restricted cash equivalents, beginning of
period 462,343 514,212 623,220 514,212 1,020,764
------- ------- ------- ------- ---------
Cash, cash equivalents, restricted cash and
restricted cash equivalents, end of period $401,023 $462,343 $659,073 $401,023 $659,073
======== ======== ======== ======== ========
Non-cash transactions:
Assignment of residential lease receivables
to third parties $7 $18 $1,379 $25 $2,476
Costs of solar power systems, leased and to
be leased, sourced from existing inventory $14,078 $13,389 $14,806 $27,467 $29,891
Costs of solar power systems, leased and to
be leased, funded by liabilities $7,016 $3,169 $6,282 $7,016 $6,282
Costs of solar power systems under sale-
leaseback financing arrangements, sourced
from project assets $2,702 $52,917 $7,375 $55,619 $7,375
Property, plant and equipment acquisitions
funded by liabilities $40,669 $44,966 $73,247 $40,669 $73,247
Net reclassification of cash proceeds offset
by project assets in connection with the
deconsolidation of assets sold to the
8point3 Group $1,858 $2,615 $ - $4,473 $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 (loss); net income (loss) per diluted share; and adjusted earnings before interest, taxes, depreciation and amortization ("Adjusted EBITDA"). Management believes that each of these non-GAAP measures is useful to investors, enabling them to better assess changes in each of these key elements of the company's results of operations across different reporting periods on a consistent basis, independent of certain items as described below. Thus, each of these non-GAAP financial measures provides investors with another method to assess the company's operating results in a manner that is focused on its ongoing, core operating performance, absent the effects of these items. Management uses these non-GAAP measures internally to assess the business, its financial performance, current and historical results, as well as for strategic decision-making and forecasting future results. Many of the analysts covering the company also use these non-GAAP measures in their analyses. Given management's use of these non-GAAP measures, the company believes these measures are important to investors in understanding the company's operating results as seen through the eyes of management. These non-GAAP measures are not prepared in accordance with GAAP or intended to be a replacement for GAAP financial data; the non-GAAP measures should be reviewed together with the GAAP measures and are not intended to serve as a substitute for results under GAAP, and may be different from non-GAAP measures used by other companies.
Non-GAAP revenue includes adjustments relating to 8point3, utility and power plant projects, the sale of operating lease assets, and sale-leaseback transactions, each as described below. In addition to those same adjustments, Non-GAAP gross margin includes adjustments relating to stock-based compensation, amortization of intangible assets, non-cash interest expense, arbitration ruling, cost of above-market polysilicon, and other items, each as described below. In addition to those same adjustments, non-GAAP net income (loss) and non-GAAP net income (loss) per diluted share are adjusted for adjustments relating to restructuring expense, IPO-related costs, and the tax effect of these non-GAAP adjustments as described below. In addition to the same adjustments as non-GAAP net income (loss), Adjusted EBITDA includes adjustments relating to cash interest expense (net of interest income), provision for (benefit from) income taxes, and depreciation.
Non-GAAP Adjustments Based on International Financial Reporting Standards ("IFRS")
The company's non-GAAP results include adjustments to recognize revenue and profit under IFRS that are consistent with the adjustments made in connection with the company's reporting process as part of its status as a consolidated subsidiary of Total S.A., a foreign public registrant which reports under IFRS. Differences between GAAP and IFRS reflected in the company's non-GAAP results are further described below. In these situations, management believes that IFRS enables investors to better evaluate the company's revenue and profit generation performance, and assists in aligning the perspectives of our management and noncontrolling shareholders with those of Total S.A., our controlling shareholder.
-- 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. 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, partial, or 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. 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 certain utility and power plant
projects based on percentage-of-completion accounting and, when
relevant, the allocation of revenue and margin to the company's project
development efforts at the time of initial project sale. Under GAAP,
such projects are accounted for under real estate accounting guidance,
under which no separate allocation to the company's project development
efforts occurs and the amount of revenue and margin that is recognized
may be limited in circumstances where the company has certain forms of
continuing involvement in the project. Over the life of each project,
cumulative revenue and gross margin will eventually be equivalent under
both GAAP and IFRS; however, revenue and gross margin will generally be
recognized earlier under IFRS. 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 differing stages of 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 on 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. 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 on certain sale-leaseback transactions based on
the net proceeds received from the buyer-lessor. Under GAAP, these
transactions are accounted for under the financing method in accordance
with real estate accounting guidance. Under such guidance, no revenue or
profit is recognized at the inception of the transaction, and the net
proceeds from the buyer-lessor are recorded as a financing liability.
Imputed interest is recorded on the liability equal to the company's
incremental borrowing rate adjusted solely to prevent negative
amortization.
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 is dependent on market forces that are difficult
to predict. Management believes that this adjustment for stock-based
compensation provides investors with a basis to measure the company's
core performance, including compared with the performance of other
companies, without the period-to-period variability created by
stock-based compensation.
-- Amortization of intangible assets. The company incurs amortization of
intangible assets as a result of acquisitions, which includes patents,
purchased technology, project pipeline assets, and in-process research
and development. Management believes that it is appropriate to exclude
these amortization charges from the company's non-GAAP financial
measures as they arise from prior acquisitions, are not reflective of
ongoing operating results, and do not contribute to a meaningful
evaluation of a company's past operating performance.
-- Non-cash interest expense. The company incurs non-cash interest expense
related to the amortization of items such as original issuance discounts
on its debt. The company excludes non-cash interest expense because the
expense does not reflect its financial results in the period incurred.
Management believes that this adjustment for non-cash interest expense
provides investors with a basis to evaluate the company's performance,
including compared with the performance of other companies, without
non-cash interest expense.
-- Restructuring expense. The company incurs restructuring expenses related
to reorganization plans aimed towards realigning resources consistent
with the company's global strategy and improving its overall operating
efficiency and cost structure. Restructuring charges are excluded from
non-GAAP financial measures because they are not considered core
operating activities and such costs have historically occurred
infrequently. Although the company has engaged in restructuring
activities in the past, each has been a discrete event based on a unique
set of business objectives. As such, management believes that it is
appropriate to exclude restructuring charges from the company's non-GAAP
financial measures as they are not reflective of ongoing operating
results or contribute to a meaningful evaluation of a company's past
operating performance.
-- Arbitration ruling. On January 28, 2015, an arbitral tribunal of the
International Court of Arbitration of the International Chamber of
Commerce declared a binding partial award in the matter of an
arbitration between First Philippine Electric Corporation ("FPEC") and
First Philippine Solar Corporation ("FPSC") against SunPower Philippines
Manufacturing, Ltd. ("SPML"), the Company's wholly-owned subsidiary. The
tribunal found SPML in breach of its obligations under its supply
agreement with FPSC, and in breach of its joint venture agreement with
FPEC. The second partial and final awards dated July 14, 2015 and
September 30, 2015, respectively, reduced the estimated amounts to be
paid to FPEC, and on July 22, 2016, SPML entered into a settlement with
FPEC and FPSC and paid a total of $50.5 million in settlement of all
claims between the parties. As a result, the Company recorded its best
estimate of probable loss related to this case at the time of the
initial ruling and updated the estimate as circumstances warranted. As
this loss is nonrecurring in nature, excluding this data provides
investors with a basis to evaluate the company's performance, including
compared with the performance of other companies, without similar
impacts.
-- IPO-related costs. Costs incurred related to the IPO of 8point3 included
legal, accounting, advisory, valuation, and other expenses, as well as
modifications to or terminations of certain existing financing
structures in preparation for the sale to 8point3. As these costs are
non-recurring in nature, excluding this data provides investors with a
basis to evaluate the company's performance, including compared with the
performance of other companies, without similar impacts.
-- Cost of above-market polysilicon. The Company has entered in previous
years into multiple long-term, fixed-price supply agreements to purchase
polysilicon for periods of up to 10 years. The prices in these supply
agreements, which incorporate a cash portion and a non-cash portion
attributable to the amortization of prepayments made under the
agreements, significantly exceed market prices. Additionally, in order
to reduce inventory and improve working capital, the Company has
periodically elected to sell polysilicon inventory in the marketplace at
prices below the Company's purchase price, thereby incurring a loss.
Management believes that it is appropriate to exclude the impact of its
above-market cost of polysilicon, including the effect of above-market
polysilicon on product costs, losses incurred on sales of polysilicon to
third parties, and inventory reserves and project asset impairments from
the company's non-GAAP financial measures as they are not reflective of
ongoing operating results and does not contribute to a meaningful
evaluation of a company's past operating performance.
-- Other. The company combines amounts previously disclosed under separate
captions into "Other" when amounts do not have a significant impact on
the presented fiscal periods. 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.
-- 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.
-- Adjusted EBITDA adjustments. When calculating Adjusted EBITDA, in
addition to adjustments described above, the company excludes the impact
during the period of the following items:
-- Cash interest expense, net of interest income
-- Provision for (benefit from) income taxes
-- Depreciation
Management presents this non-GAAP financial measure to enable investors to evaluate the company's performance, including compared with the performance of other companies.
For more information about these non-GAAP financial measures, please see the tables captioned "Reconciliations of GAAP Measures to Non-GAAP Measures" set forth at the end of this release, which should be read together with the preceding financial statements prepared in accordance with GAAP.
SUNPOWER CORPORATION
RECONCILIATIONS OF GAAP MEASURES TO NON-GAAP MEASURES
(In thousands, except percentages and per share data)
(Unaudited)
Adjustments to Revenue:
THREE MONTHS ENDED SIX MONTHS ENDED
------------------ ----------------
Jul. 2, Apr. 2, Jul. 3, Jul. 2, Jul. 3,
2017 2017 2016 2017 2016
---- ---- ---- ---- ----
GAAP revenue $337,446 $399,076 $420,452 $736,522 $805,327
Adjustments based on IFRS:
8point3 (223) 713 (1,400) 490 (16,574)
Utility and power plant projects 335 (23,780) (40,085) (23,445) 13,453
Sale of operating lease assets - - 10,183 - 20,586
Sale-leaseback transactions 3,927 53,478 12,646 57,405 12,646
Non-GAAP revenue $341,485 $429,487 $401,796 $770,972 $835,438
======== ======== ======== ======== ========
Adjustments to Gross margin:
THREE MONTHS ENDED SIX MONTHS ENDED
------------------ ----------------
Jul. 2, Apr. 2, Jul. 3, Jul. 2, Jul. 3,
2017 2017 2016 2017 2016
---- ---- ---- ---- ----
GAAP gross margin $15,235 $(30,932) $41,294 $(15,697) $92,831
Adjustments based on IFRS:
8point3 870 1,189 (210) 2,059 (4,852)
Utility and power plant projects 2,378 27,174 4,128 29,552 7,685
Sale of operating lease assets - - 2,966 - 6,078
Sale-leaseback transactions (2,270) (3,144) 2,988 (5,414) 2,988
Other adjustments:
Stock-based compensation expense 1,052 1,184 5,464 2,236 9,589
Amortization of intangible assets 2,567 2,567 1,530 5,134 2,544
Non-cash interest expense 10 10 284 20 603
Cost of above-market polysilicon 21,826 29,815 15,901 51,641 28,615
Arbitration ruling - - (5,852) - (5,852)
Non-GAAP gross margin $41,668 $27,863 $68,493 $69,531 $140,229
======= ======= ======= ======= ========
GAAP gross margin (%) 4.5% -7.8% 9.8% -2.1% 11.5%
Non-GAAP gross margin (%) 12.2% 6.5% 17.0% 9.0% 16.8%
Adjustments to Net income (loss):
THREE MONTHS ENDED SIX MONTHS ENDED
------------------ ----------------
Jul. 2, Apr. 2, Jul. 3, Jul. 2, Jul. 3,
2017 2017 2016 2017 2016
---- ---- ---- ---- ----
GAAP net loss attributable to stockholders $(93,760) $(134,479) $(69,992) $(228,239) $(155,401)
Adjustments based on IFRS:
8point3 2,458 8,101 18,039 10,559 28,758
Utility and power plant projects 2,378 27,174 4,128 29,552 7,685
Sale of operating lease assets - - 2,979 - 6,099
Sale-leaseback transactions (173) (1,842) 2,988 (2,015) 2,988
Other adjustments:
Stock-based compensation expense 8,606 7,375 16,475 15,981 32,995
Amortization of intangible assets 4,227 3,026 3,168 7,253 11,333
Non-cash interest expense 35 35 309 70 655
Restructuring expense 4,969 9,790 117 14,759 213
Arbitration ruling - - (5,852) - (5,852)
IPO-related costs (196) 114 35 (82) 35
Cost of above-market polysilicon 21,826 29,815 15,901 51,641 28,615
Other - - (12) - (11)
Tax effect 350 513 (2,454) 863 (770)
Non-GAAP net loss attributable to stockholders $(49,280) $(50,378) $(14,171) $(99,658) $(42,658)
======== ======== ======== ======== ========
Adjustments to Net income (loss) per diluted share:
THREE MONTHS ENDED SIX MONTHS ENDED
------------------ ----------------
Jul. 2, Apr. 2, Jul. 3, Jul. 2, Jul. 3,
2017 2017 2016 2017 2016
---- ---- ---- ---- ----
Net income (loss) per diluted share
Numerator:
GAAP net loss available to common stockholders(1) $(93,760) $(134,479) $(69,992) $(228,239) $(155,401)
======== ========= ======== ========= =========
Non-GAAP net loss available to common stockholders(1) $(49,280) $(50,378) $(14,171) $(99,658) $(42,658)
======== ======== ======== ======== ========
Denominator:
GAAP weighted-average shares 139,448 138,902 138,084 139,175 137,644
Effect of dilutive securities:
Stock options - - - - -
Restricted stock units - - - - -
Upfront warrants (held by Total) - - - - -
Warrants (under the CSO2015) - - - - -
0.75% debentures due 2018 - - - - -
Non-GAAP weighted-average shares(1) 139,448 138,902 138,084 139,175 137,644
======= ======= ======= ======= =======
GAAP net loss per diluted share $(0.67) $(0.97) $(0.51) $(1.64) $(1.13)
====== ====== ====== ====== ======
Non-GAAP net loss per diluted share $(0.35) $(0.36) $(0.10) $(0.72) $(0.31)
====== ====== ====== ====== ======
(1)In accordance with the if-converted method, net income (loss) available to common stockholders excludes interest expense related to the 0.75%, 0.875%, and 4.0% debentures if the debentures are considered converted in the calculation of net income (loss) per diluted share. If the conversion
option for a debenture is not in the money for the relevant period, the potential conversion of the debenture under the if-converted method is excluded from the calculation of non-GAAP net income (loss) per diluted share.
Adjusted EBITDA:
THREE MONTHS ENDED SIX MONTHS ENDED
------------------ ----------------
Jul. 2, Apr. 2, Jul. 3, Jul. 2, Jul. 3,
2017 2017 2016 2017 2016
---- ---- ---- ---- ----
GAAP net loss attributable to stockholders $(93,760) $(134,479) $(69,992) $(228,239) $(155,401)
Adjustments based on IFRS:
8point3 2,458 8,101 18,039 10,559 28,758
Utility and power plant projects 2,378 27,174 4,128 29,552 7,685
Sale of operating lease assets - - 2,979 - 6,099
Sale-leaseback transactions (173) (1,842) 2,988 (2,015) 2,988
Other adjustments:
Stock-based compensation expense 8,606 7,375 16,475 15,981 32,995
Amortization of intangible assets 4,227 3,026 3,168 7,253 11,333
Non-cash interest expense 35 35 309 70 655
Restructuring expense 4,969 9,790 117 14,759 213
Arbitration ruling - - (5,852) - (5,852)
IPO-related costs (196) 114 35 (82) 35
Cost of above-market polysilicon 21,826 29,815 15,901 51,641 28,615
Other - - (12) - (11)
Cash interest expense, net of interest income 19,886 18,529 13,144 38,415 25,328
Provision for income taxes 2,353 2,031 6,648 4,384 9,829
Depreciation 40,917 38,932 37,730 79,849 71,556
Adjusted EBITDA $13,526 $8,601 $45,805 $22,127 $64,825
======= ====== ======= ======= =======
Q3 2017 and FY 2017 GUIDANCE
(in
thousands
except
percentages) Q3 2017 FY 2017
Revenue
(GAAP) $300,000-$350,000 $1,850,000-$2,050,000
Revenue
(non-
GAAP) (1) $320,000-$370,000 $2,100,000-$2,300,000
Gross
margin
(GAAP) (3)%-(1)% N/A
Gross
margin
(non-
GAAP) (2) 5%-7% N/A
Net loss
(GAAP) $(120,000)-$(100,000) N/A
Adjusted
EBITDA
(3) $0-$20,000 N/A
(1) Estimated non-GAAP amounts above
for Q3 2017 include net adjustments
that increase revenue by
approximately $20 million related
to sale-leaseback transactions.
Estimated non-GAAP amounts above
for fiscal 2017 include net
adjustments that increase
(decrease) revenue by approximately
$(60) million related to 8point3,
and $310 million related to sale-
leaseback transactions.
(2) Estimated non-GAAP amounts above
for Q3 2017 include net adjustments
that increase gross margin by
approximately $6 million related to
utility and power plant projects,
$3 million related to sale-
leaseback transactions, $3 million
related to stock-based
compensation expense, $1 million
related to amortization of
intangible assets, and $21 million
related to cost of above-market
polysilicon.
(3) Estimated Adjusted EBITDA amounts
above for Q3 2017 include net
adjustments that decrease net loss
by approximately $6 million related
to utility and power plant
projects, $3 million related to
sale-leaseback transactions, $10
million related to stock-based
compensation expense, $3 million
related to amortization of
intangible assets, $1 million
related to non-cash interest
expense, $10 million related to
restructuring, $21 million related
to interest expense, $2 million
related to income taxes, $43
million related to depreciation,
and $21 million related to cost of
above-market polysilicon.
The following supplemental data represent the adjustments, individual charges and credits that are included or excluded from SunPower's non-GAAP revenue, gross margin, net income (loss) and net income (loss) per diluted share measures for each period presented in the Consolidated Statements of Operations contained herein.
SUPPLEMENTAL DATA
(In thousands, except percentages)
THREE MONTHS ENDED
July 2, 2017
------------
Revenue Gross margin Operating expenses Other income Benefit from Equity in earnings Net income (loss)
(expense), net (provision for) of unconsolidated attributable to
income taxes investees stockholders
------------ --------- ------------
Residential Commercial Power Plant Residential Commercial Power Plant Research and Selling, general Restructuring charges
development and administrative
----------- ------------------
GAAP $157,125 $100,105 $80,216 $26,138 16.6% $2,575 2.6% $(13,478) -16.8% $(93,760)
Adjustments based on
IFRS:
8point3 (1,319) 1,470 (374) (477) 891 456 - - - 1,060 - 528 2,458
Utility and power
plant projects - 327 8 - 327 2,051 - - - - - - 2,378
Sale-leaseback
transactions - 3,927 - - (2,225) (45) - - - 2,097 - - (173)
Other adjustments:
Stock-based
compensation expense - - - 314 293 445 1,036 6,518 - - - - 8,606
Amortization of
intangible assets - - - 870 672 1,025 1,201 459 - - - - 4,227
Non-cash interest
expense - - - 2 2 6 4 21 - - - - 35
Restructuring expense - - - - - - - - 4,969 - - - 4,969
IPO-related costs - - - - - - - (196) - - - - (196)
Cost of above-market
polysilicon - - - 4,731 5,000 12,095 - - - - - - 21,826
Tax effect - - - - - - - - - - 350 - 350
Non-GAAP $155,806 $105,829 $79,850 $31,578 20.3% $7,535 7.1% $2,555 3.2% $(49,280)
======== ======== ======= ======= ====== ====== ========
April 2, 2017
-------------
Revenue Gross margin Operating expenses Other income (expense), net Benefit from (provision for) income Equity in earnings of unconsolidated
taxes investees Net income (loss)
attributable to
stockholders
------------
Residential Commercial Power Plant Residential Commercial Power Plant Research and Selling, general Restructuring
development and administrative charges
----------- ------------------ -------
GAAP $136,031 $108,263 $154,782 $15,274 11.2% $(2,366) -2.2% $(43,840) -28.3% $(134,479)
Adjustments based on
IFRS:
8point3 (1,337) 2,667 (617) (503) 1,693 (1) - - - 6,066 - 846 8,101
Utility and power
plant projects - - (23,780) - - 27,174 - - - - - - 27,174
Sale-leaseback
transactions - 23,041 30,437 - (2,665) (479) - - - 1,302 - - (1,842)
Other adjustments:
Stock-based
compensation expense - - - 210 249 725 1,528 4,663 - - - - 7,375
Amortization of
intangible assets - - - 1,214 836 517 - 459 - - - - 3,026
Non-cash interest
expense - - - 4 3 3 4 21 - - - - 35
Restructuring expense - - - - - - - - 9,790 - - - 9,790
IPO-related costs - - - - - - - 114 - - - - 114
Cost of above-market
polysilicon - - - 4,351 7,132 18,332 - - - - - - 29,815
Tax effect - - - - - - - - - - 513 - 513
Non-GAAP $134,694 $133,971 $160,822 $20,550 15.3% $4,882 3.6% $2,431 1.5% $(50,378)
======== ======== ======== ======= ====== ====== ========
July 3, 2016
------------
Revenue Gross margin Operating expenses Other income (expense), net Benefit from (provision for) income Equity in earnings of unconsolidated
taxes investees Net income (loss) attributable to stockholders
------- ------------ ------------------ --------------------------- ----------------------------------- ------------------------------------- ----------------------------------------------
Residential Commercial Power Plant Residential Commercial Power Plant Research and Selling, general Restructuring
development and administrative charges
----------- ------------------ -------
GAAP $177,715 $97,846 $144,891 $38,756 21.8% $8,323 8.5% $(5,785) -4.0% $(69,992)
Adjustments based on
IFRS:
8point3 (1,287) - (113) (419) 179 30 - # - # - # 1,061 # - 17,188 18,039
Utility and power
plant projects - - (40,085) - - 4,128 - # - # - # - # - - 4,128
Sale of operating
lease assets 10,183 - - 2,966 - - - # - # - # 13 # - - 2,979
Sale-leaseback
transactions - 12,646 - - 2,988 - - - - - - - 2,988
Other adjustments:
Stock-based
compensation expense - - - 1,652 745 3,067 2,965 8,046 - - - - 16,475
Amortization of
intangible assets - - - 576 608 346 1,187 451 - - - - 3,168
Non-cash interest
expense - - - 63 52 169 3 22 - - - - 309
Restructuring expense - - - - - - - - 117 - - - 117
Arbitration ruling - - - (1,345) (922) (3,585) - - - - - - (5,852)
IPO-related costs - - - - - - - 35 - - - - 35
Cost of above-market
polysilicon - - - 3,619 2,531 9,751 - - - - - - 15,901
Other - - - - - - - - - (12) - - (12)
Tax effect - - - - - - - - - - (2,454) - (2,454)
Non-GAAP $186,611 $110,492 $104,693 $45,868 24.6% $14,504 13.1% $8,121 7.8% $(14,171)
======== ======== ======== ======= ======= ====== ========
SIX MONTHS ENDED
July 2, 2017
------------
Revenue Gross margin Operating expenses Other income (expense), net Benefit from (provision for) income Equity in earnings of unconsolidated
taxes investees Net income (loss) attributable to stockholders
------- ------------ ------------------ --------------------------- ----------------------------------- ------------------------------------- ----------------------------------------------
Residential Commercial Power Plant Residential Commercial Power Plant Research and Selling, general Restructuring
development and administrative charges
----------- ------------------ -------
GAAP $293,156 $208,368 $234,998 $41,412 14.1% $209 0.1% $(57,318) -24.4% $(228,239)
Adjustments based on
IFRS:
8point3 (2,656) 4,137 (991) (980) 2,584 455 - - - 7,126 - 1,374 10,559
Utility and power
plant projects - 327 (23,772) - 327 29,225 - - - - - - 29,552
Sale-leaseback
transactions - 26,968 30,437 - (4,890) (524) - - - 3,399 - - (2,015)
Other adjustments:
Stock-based
compensation expense - - - 524 542 1,170 2,564 11,181 - - - - 15,981
Amortization of
intangible assets - - - 2,084 1,508 1,542 1,201 918 - - - - 7,253
Non-cash interest
expense - - - 6 5 9 8 42 - - - - 70
Restructuring expense - - - - - - - - 14,759 - - - 14,759
IPO-related costs - - - - - - - (82) - - - - (82)
Cost of above-market
polysilicon - - - 9,082 12,132 30,427 - - - - - - 51,641
Tax effect - - - - - - - - - - 863 - 863
Non-GAAP $290,500 $239,800 $240,672 $52,128 17.9% $12,417 5.2% $4,986 2.1% $(99,658)
======== ======== ======== ======= ======= ====== ========
July 3, 2016
------------
Revenue Gross margin Operating expenses Other income (expense), net Benefit from (provision for) income Equity in earnings of unconsolidated
taxes investees Net income (loss) attributable to stockholders
------- ------------ ------------------ --------------------------- ----------------------------------- ------------------------------------- ----------------------------------------------
Residential Commercial Power Plant Residential Commercial Power Plant Research and Selling, general Restructuring charges
development and administrative
----------- ------------------
GAAP $329,522 $150,087 $325,718 $72,403 22.0% $15,338 10.2% $5,090 1.6% $(155,401)
Adjustments based on
IFRS:
8point3 (2,599) - (13,975) (904) 179 (4,127) - - - 2,123 - 31,487 28,758
Utility and power
plant projects - - 13,453 - - 7,685 - - - - - - 7,685
Sale of operating
lease assets 20,586 - - 6,078 - - - - - 21 - - 6,099
Sale-leaseback
transactions - 12,646 - - 2,988 - - - - - - - 2,988
Other adjustments:
Stock-based
compensation expense - - - 2,479 1,397 5,713 5,997 17,409 - - - - 32,995
Amortization of
intangible assets - - - 987 1,234 323 3,007 5,782 - - - - 11,333
Non-cash interest
expense - - - 134 91 378 10 42 - - - - 655
Restructuring expense - - - - - - - - 213 - - - 213
Arbitration ruling - - - (1,345) (922) (3,585) - - - - - - (5,852)
IPO-related costs - - - - - - - 35 - - - - 35
Cost of above-market
polysilicon - - - 7,054 4,070 17,491 - - - - - - 28,615
Other - - - - - - - 1 - (12) - - (11)
Tax effect - - - - - - - - - - (770) - (770)
Non-GAAP $347,509 $162,733 $325,196 $86,886 25.0% $24,375 15.0% $28,968 8.9% $(42,658)
======== ======== ======== ======= ======= ======= ========
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SOURCE SunPower Corp.
