SunPower Reports Third Quarter 2019 Results
SAN JOSE, Calif., Oct. 30, 2019 /PRNewswire/ -- SunPower Corp. (NASDAQ:SPWR) today announced financial results for its third quarter ended Sept. 29, 2019.
Third Quarter Company Highlights
-- Continued strength in U.S. and international distributed generation (DG)
markets
-- Generated positive cash at the business unit level for the quarter
SunPower Energy Services (SPES)
-- Record residential and new homes bookings - strong traction in
California ahead of 2020 new home solar mandate
-- Formally launched Equinox Storage solution for the residential market
SunPower Technologies (SPT)
-- Record shipments into international DG markets - more than 70 percent of
volume
-- Tracking to a fourth quarter agreement on potential investment to expand
Maxeon 5 production
($ Millions,
except
percentages and
per-share data)
3rd Quarter 2019
2nd Quarter 2019
3rd Quarter 2018
GAAP revenue $476.0 $436.3 $428.3
GAAP gross margin 10.1% 4.5% 2.3%
GAAP net income
(loss) $(15.0) $121.5 $(89.8)
GAAP net income
(loss) per
diluted share $(0.11) $0.75 $(0.64)
Non-GAAP
revenue(1) $491.7 $481.9 $443.4
Non-GAAP gross
margin(1) 15.9% 10.5% 4.7%
Non-GAAP net
income (loss)(1) $10.6 $(31.1) $(40.9)
Non-GAAP net
income (loss) per
diluted share(1) $0.07 $(0.22) $(0.29)
Adjusted EBITDA(1) $42.0 $8.0 $6.7
MW Deployed 586 622 346
(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.
Third Quarter 2019 Results
"Our third quarter results reflect continuing execution of our strategic plan," said Tom Werner, SunPower CEO and chairman of the board. "We met our financial outlook for the quarter and demonstrated ongoing progress against our key growth initiatives including the further ramp of our Maxeon 5 technology scale-up, adding to our storage and services offerings, and expanding our digital platforms.
SunPower Energy Services (SPES)
"We executed well in our North American residential business with revenue growth of more than 12 percent year-over-year and record bookings during the quarter as we benefitted from the strength of our channel model. Also, building on the success of our commercial Helix Storage solution, we officially launched our residential Equinox Storage product in the third quarter. Our Equinox platform is the industry's only fully integrated solar and storage solution designed, engineered and warranted by one company. In new homes, we continued to expand our commanding position in the market ahead of California's 2020 new home solar mandate as we posted another record bookings and shipments quarter with a backlog now exceeding 40,000 homes.
"In Commercial, we maintained our market share lead as year-over-year deployments rose. Our channel and origination teams are executing well as our backlog continues to grow. However, project deployment execution has been disappointing and we are undertaking a number of initiatives in our direct business that we believe will drive stronger financial performance starting in the fourth quarter. Finally, demand for our Helix Storage solution remains high as our pipeline exceeds 145 megawatts (MW) with attach rates of 35 percent.
SunPower Technologies (SPT)
"SPT posted another strong quarter driven primarily by ongoing growth in our global DG supply business, especially in Europe, Korea and Australia. We also continued to build solid power plant supply agreement backlog into 2020. The ramp of our industry leading Maxeon 5 cell and panel technology continues as we commenced production on our second production line this quarter. Also, we have made progress toward finalizing a potential investment to accelerate Maxeon 5 production and expect to be in a position to announce this agreement in the fourth quarter. Finally, we are pleased to see strong escalating demand for our Performance Series (P-Series) product as we expect to ship a combined volume of over 1.3 gigawatts (GW) of P-Series panels in 2019 from our joint venture and our Oregon manufacturing facility," Werner concluded.
Consolidated Financials
"We were pleased with our third quarter financial performance," said Manavendra Sial, SunPower chief financial officer. "In relation to the balance sheet, we increased our liquidity, generating positive cash at the business unit level while further reducing our legacy liabilities. Finally, we were pleased to announce our second partnership with Hannon Armstrong that enables a highly capital efficient and flexible structure to finance our 200 MW of safe harbor inventory."
Third quarter fiscal year 2019 non-GAAP results exclude net adjustments that, in the aggregate, increased non-GAAP earnings by $25.7 million, including $23.9 million related to the cost of above-market polysilicon, $7.0 million related to stock-based compensation expense, $6.1 million related to business reorganization costs, $5.1 million related to loss on sale and impairment of residential lease assets, $4.3 million restructuring expense, $2.2 million related to business process improvement costs, $1.8 million related to amortization of intangible assets, $1.2 million related to construction revenue on solar services contracts, $1.0 million transaction-related costs, and $0.9 million related to tax effect, partially offset by $27.6 million related to mark-to-market gain on equity investment and $0.2 million related to legacy sale-leaseback transactions.
Financial Outlook
The company's fourth quarter 2019 GAAP and non-GAAP guidance is as follows: on a GAAP basis, revenue of $520 million to $720 million, gross margin of 11 percent to 12 percent and net loss of $28 million to $8 million. On a non-GAAP basis, the company expects revenue of $520 million to $720 million, gross margin of 16 percent to 19 percent, Adjusted EBITDA of $74 million to $94 million and MW deployed in the range of 445 MW to 645 MW.
The company's fiscal year 2019 GAAP and non-GAAP guidance is as follows: on a GAAP basis, revenue of $1.8 billion to $2.0 billion and a net loss of $20 million to $0 million. On a non-GAAP basis, revenue of $1.9 billion to $2.1 billion and operational expenses of less than $270 million. Gigawatts deployed is expected to be in the range of 2.1 GW to 2.3 GW in addition to the company's safe harbor program and capital expenditures of approximately $65 million. The company's fourth quarter and fiscal year 2019 guidance includes approximately $20 million in gross margin attributable to certain legacy power plant projects.
The company is maintaining its fiscal year 2019 Adjusted EBITDA guidance to the range of $100 million to $120 million.
The company will host a conference call for investors this afternoon to discuss its third quarter 2019 performance at 1:30 p.m. Pacific Time. The call will be webcast and can be accessed from SunPower's website at http://investors.sunpower.com/events.cfm.
This press release contains both GAAP and non-GAAP financial information. Non-GAAP figures are reconciled to the closest GAAP equivalent categories in the financial attachment of this press release. Please note that the company has posted supplemental information and slides related to its third quarter 2019 performance on the Events and Presentations section of SunPower's Investor Relations page at http://investors.sunpower.com/events.cfm.
About SunPower
As one of the world's most innovative and sustainable energy companies, SunPower Corporation (NASDAQ: SPWR) provides a diverse group of customers with complete solar solutions and services. Residential customers, businesses, governments, schools and utilities around the globe rely on SunPower's more than 30 years of proven experience. From the first flip of the switch, SunPower delivers maximum value and superb performance throughout the long life of every solar system. Headquartered in Silicon Valley, SunPower has dedicated, customer-focused employees in Africa, Asia, Australia, Europe, North and South America. For more information about how SunPower is changing the way our world is powered, visit www.sunpower.com.
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including, but not limited to, statements regarding: (a) our plans and expectations regarding potential investment to expand Maxeon 5 production, including timing, certainty and impact; (b) our expectations and plans regarding market traction, growth, demand, and volume; (c) our plans and expectations for our products and planned products, including anticipated markets and demand, cost impacts, and impacts on our financial performance and our ability to meet our targets and goals; (d) our plans and expectations for initiatives to improve execution and performance in our commercial business, including timing and anticipated impact on financial performance; (e) our plans and expectations regarding manufacturing expansion, and production goals and ramps, including the timing of our ramp of Maxeon 5 and P-Series production expansion; (f) our plans and expectations for our safe harbor program and our joint venture with Hannon Armstrong; (g) the expected sale of certain legacy power plant projects, including timing and impact on financial statements; (h) our positioning for future success and profitability and long-term competitiveness, and our ability to achieve our financial and strategic goals; (i) our fourth quarter fiscal 2019 guidance, including GAAP revenue, gross margin, and net loss, as well as non-GAAP revenue, gross margin, Adjusted EBITDA, and MW deployed, and related assumptions; and (j) fiscal year 2019 guidance, including, GAAP and non-GAAP revenue, net loss, non-GAAP operational expenses, non-GAAP GW deployed, non- GAAP capital expenditures, and Adjusted EBITDA, and related assumptions.
These forward-looking statements are based on our current assumptions, expectations and beliefs and involve substantial risks and uncertainties that may cause results, performance or achievement to materially differ from those expressed or implied by these forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to: (1) challenges in executing transactions key to our strategic plans, including regulatory and other challenges that may arise; (2) the success of our ongoing research and development efforts and our ability to commercialize new products and services, including products and services developed through strategic partnerships; (3) competition in the solar and general energy industry and downward pressure on selling prices and wholesale energy pricing; (4) our liquidity, substantial indebtedness, and ability to obtain additional financing for our projects and customers; (5) changes in public policy, including the imposition and applicability of tariffs; (6) regulatory changes and the availability of economic incentives promoting use of solar energy; (7) fluctuations in our operating results; (8) appropriately sizing our manufacturing capacity and containing manufacturing and logistics difficulties that could arise; and (9) challenges managing our acquisitions, joint ventures and partnerships, including our ability to successfully manage acquired assets and supplier relationships. A detailed discussion of these factors and other risks that affect our business is included in filings we make with the Securities and Exchange Commission (SEC) from time to time, including our most recent reports on Form 10-K and Form 10-Q, particularly under the heading "Risk Factors." Copies of these filings are available online from the SEC or on the SEC Filings section of our Investor Relations website at investors.sunpower.com. All forward-looking statements in this press release are based on information currently available to us, and we assume no obligation to update these forward-looking statements in light of new information or future events.
©2019 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)
Sep. 29,
Dec. 30,
2019 2018
Assets
Current assets:
Cash and cash
equivalents $188,983 $309,407
Restricted cash
and cash
equivalents,
current
portion 10,097 41,762
Restricted
short-term
marketable
securities 6,033 -
Accounts
receivable,
net 205,667 175,605
Contract assets 78,868 58,994
Inventories 388,508 308,146
Advances to
suppliers,
current
portion 75,366 37,878
Project assets
-plants and
land, current
portion 20,260 10,796
Prepaid
expenses and
other current
assets 132,643 131,183
Total current
assets 1,106,425 1,073,771
Restricted cash
and cash
equivalents,
net of current
portion 11,655 12,594
Restricted
long-term
marketable
securities - 5,955
Property, plant
and equipment,
net 335,375 839,871
Operating lease
right-of-use
assets 46,283 -
Solar power
systems leased
and to be
leased, net 55,444 92,557
Advances to
suppliers, net
of current
portion 62,914 133,694
Long-term
financing
receivables,
net - held
for sale - 19,592
Other
intangible
assets, net 9,504 12,582
Other long-
term assets 262,072 162,033
Total assets $1,889,672 $2,352,649
===
Liabilities and Equity
Current liabilities:
Accounts
payable $440,267 $325,550
Accrued
liabilities 194,367 235,252
Operating lease
liabilities,
current
portion 8,644 -
Contract
liabilities,
current
portion 118,644 104,130
Short-term
debt 80,297 40,074
Total current
liabilities 842,219 705,006
Long-term debt 48,460 40,528
Convertible
debt 819,783 818,356
Operating lease
liabilities,
net of current
portion 44,807 -
Contract
liabilities,
net of current
portion 67,930 99,509
Other long-
term
liabilities 226,729 839,136
Total
liabilities 2,049,928 2,502,535
Equity:
Preferred stock -
Common stock 143 141
Additional
paid-in
capital 2,483,815 2,463,370
Accumulated
deficit (2,455,119) (2,480,988)
Accumulated
other
comprehensive
loss (3,791) (4,150)
Treasury stock,
at cost (191,725) (187,069)
Total
stockholders'
deficit (166,677) (208,696)
Noncontrolling
interests in
subsidiaries 6,421 58,810
Total deficit (160,256) (149,886)
Total
liabilities
and equity $1,889,672 $2,352,649
===
SUNPOWER CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(Unaudited)
THREE MONTHS ENDED NINE MONTHS ENDED
Sep. 29,
Jun. 30,
Sep. 30,
Sep. 29,
Sep. 30,
2019 2019 2018 2019 2018
Revenue:
SunPower Energy Services $277,688 $211,726 $263,576 $667,635 $780,187
SunPower Technologies 333,896 314,971 289,630 879,671 791,754
Intersegment eliminations (135,626) (90,416) (124,943) (286,842) (302,693)
Total revenue 475,958 436,281 428,263 1,260,464 1,269,248
Cost of revenue:
SunPower Energy Services 248,417 189,262 217,196 608,757 644,109
SunPower Technologies 315,293 317,717 307,527 915,878 1,200,037
Intersegment eliminations (136,003) (90,498) (106,337) (294,937) (285,388)
Total cost of revenue 427,707 416,481 418,386 1,229,698 1,558,758
Gross profit (loss) 48,251 19,800 9,877 30,766 (289,510)
Operating expenses:
Research and development 16,101 18,159 15,898 49,253 66,225
Sales, general and administrative 64,734 61,978 76,069 189,569 206,272
Restructuring charges 4,283 2,453 3,923 6,071 18,604
Loss on sale and impairment of
residential lease assets 10,756 8,301 53,537 28,283 170,898
Gain on business divestiture (137,286) (59,347) (143,400) (59,347)
Total operating expenses (income) 95,874 (46,395) 90,080 129,776 402,652
Operating income (loss) (47,623) 66,195 (80,203) (99,010) (692,162)
Other income (expense), net:
Interest income 1,025 566 1,087 2,443 2,280
Interest expense (10,649) (16,424) (25,972) (43,864) (77,796)
Other, net 45,184 67,768 (3,643) 146,025 48,775
Other income (expense), net 35,560 51,910 (28,528) 104,604 (26,741)
Income (loss) before income taxes
and equity in losses of
unconsolidated investees (12,063) 118,105 (108,731) 5,594 (718,903)
Provision for income taxes (5,378) (6,068) (3,680) (17,243) (9,389)
Equity in losses of unconsolidated
investees (1,767) (1,963) (1,500) (2,050) (17,059)
Net income (loss) (19,208) 110,074 (113,911) (13,699) (745,351)
Net loss attributable to
noncontrolling interests and
redeemable noncontrolling
interests 4,191 11,385 24,085 30,417 92,434
Net income (loss) attributable to
stockholders $(15,017) $121,459 $(89,826) $16,718 $(652,917)
Basic net income (loss) per share
attributable to stockholders $(0.11) $0.85 $(0.64) $0.12 $(4.64)
Diluted net income (loss) per
share attributable to
stockholders $(0.11) $0.75 $(0.64) $0.12 $(4.64)
Basic weighted-average shares 142,553 142,471 141,027 142,248 140,722
Diluted weighted-average shares 142,553 166,837 141,027 144,736 140,722
SUNPOWER CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
THREE MONTHS ENDED NINE MONTHS ENDED
Sep. 29,
Jun. 30,
Sep. 30,
Sep. 29,
Sep. 30,
2019 2019 2018 2019 2018
Cash flows from operating
activities:
Net income (loss) $(19,208) $110,074 $(113,911) $(13,699) $(745,351)
Adjustments to reconcile net income
(loss) to net cash used in
operating activities:
Depreciation and amortization 15,298 22,534 24,743 62,022 103,144
Stock-based compensation 6,991 6,270 6,390 18,927 20,087
Non-cash interest expense 2,542 2,510 3,871 7,468 12,133
Non-cash restructuring charges 3,528 2,346 5,874
Dividend from equity method
investee 3,947
Equity in losses of unconsolidated
investees 1,767 1,963 1,501 2,050 17,059
Mark-to-market (gain) loss on
equity investment with readily
determinable fair value (28,538) (67,500) 6,225 (129,038) 6,225
Gain on business divestiture (137,286) (59,347) (143,400) (59,347)
Gain on sale of investments without
readily determinable fair value (17,275) (543) (17,275) (50,568)
Deferred income taxes (1,545) (4) 1,575 500 3,006
Impairment of property, plant and
equipment 777 777 369,168
Loss on sale and impairment of
residential lease assets 10,755 16,728 53,537 36,709 170,898
Gain on sale of assets (21,383) (21,383)
Other, net (3,294) (5,737)
Changes in operating assets and
liabilities: 10,995 (39,473) (82,481) (75,694) (361,740)
Accounts receivable 2,921 (60,827) (15,057) (45,710) (19,090)
Contract assets (25,516) 5,697 (2,639) (18,107) (38,014)
Inventories (45,989) (20,386) (27,942) (108,093) (103,791)
Project assets (3,040) (6,974) (20,226) (9,238) (9,140)
Prepaid expenses and other assets 16,967 (27,212) 5,616 1,482 39,924
Operating lease right-of-use
assets 14,999 (11,383) 6,219
Long-term financing receivables,
net - held for sale 481 657 (42,775) (473) (151,931)
Advances to suppliers 8,518 11,719 14,059 33,292 29,181
Accounts payable and other accrued
liabilities 52,810 40,018 10,387 64,009 (69,056)
Contract liabilities 4,709 17,996 (3,904) 8,127 (39,823)
Operating lease liabilities (15,865) 11,222 (7,202)
Net cash used in operating
activities (36,073) (81,061) (161,734) (266,162) (517,076)
Cash flows from investing
activities:
Purchases of property, plant and
equipment (16,896) (11,656) (12,346) (35,100) (37,708)
Cash paid for solar power systems,
leased, net (16,971) (55,659)
Cash paid for solar power systems (8,503) (15,723) (904) (51,826) (4,340)
Dividend from equity method
investee 12,952
Proceeds from sale of investments 42,957 42,957 417,766
Proceeds from sale of assets 39,742 228 39,970
Proceeds from business divestiture,
net of cash sold 30,814 13,257 40,491 13,257
Cash outflow from the sale of
residential lease portfolio (16,397) (16,397)
Cash paid for investments in
unconsolidated investees (2,400) (10,000) (12,400) (14,061)
Net cash provided by (used in)
investing activities 38,503 (6,337) (16,964) 7,695 332,207
Cash flows from financing
activities:
Proceeds from bank loans and other
debt 87,823 75,687 51,018 231,489 167,477
Repayment of 0.75% debentures due
2018, bank loans and other debt (84,035) (66,688) (56,702) (209,095) (476,229)
Proceeds from issuance of non-
recourse residential financing,
net of issuance costs 6,528 43,476 120,099 72,259 187,208
Repayment of non-recourse
residential financing (1,803) (1,156) (5,032) (2,959) (14,931)
Contributions from noncontrolling
interests and redeemable
noncontrolling interests
attributable to residential
projects 1,842 8,590 34,388 31,413 107,678
Distributions to noncontrolling
interests and redeemable
noncontrolling interests
attributable to residential
projects (316) (6,594) (316) (19,176)
Proceeds from issuance of non-
recourse power plant and
commercial financing, net of
issuance costs 27,980 50,266
Repayment of non-recourse power
plant and commercial financing (221) (4,899)
Payment for prior business
combination (9,000) (9,000)
Settlement of contingent
consideration arrangement (2,448)
Purchases of stock for tax
withholding obligations on vested
restricted stock (292) (493) (349) (4,657) (5,249)
Net cash provided by (used in)
financing activities 10,063 50,100 164,587 106,686 (7,855)
Effect of exchange rate changes on
cash, cash equivalents, restricted
cash and restricted cash
equivalents (1,510) 147 1,896 (1,247) 772
Net increase (decrease) in cash,
cash equivalents, restricted cash
and restricted cash equivalents 10,983 (37,151) (12,215) (153,028) (191,952)
Cash, cash equivalents, restricted
cash and restricted cash
equivalents, beginning of period 199,752 236,903 364,600 363,763 544,337
Cash, cash equivalents, restricted
cash and restricted cash
equivalents, end of period $210,735 $199,752 $352,385 $210,735 $352,385
Non-cash transactions:
Costs of solar power systems,
leased, sourced from existing
inventory
$ -
$ - $8,769
$ - $30,409
Costs of solar power systems,
leased, funded by liabilities
$ -
$ - $4,903
$ - $4,903
Costs of solar power systems
sourced from existing inventory $8,033 $4,767
$ - $29,206
$ -
Costs of solar power systems funded
by liabilities $3,604 $4,529
$ - $3,604
$ -
Costs of solar power systems under
sale-leaseback financing
arrangements, sourced from project
assets
$ -
$ - $14,628
$ - $30,208
Property, plant and equipment
acquisitions funded by liabilities $11,911 $22,560 $11,453 $11,911 $11,453
Contractual obligations satisfied
with inventory
$ -
$ - $8,035
$ - $48,916
Accounts receivable due to business
divestiture
$ -
$ - $10,000
$ - $10,000
Acquisition of noncontrolling
interests funded by Mezzanine Loan
proceeds
$ -
$ - $12,400
$ - $12,400
Accounts reivable due to disposal
of shares in joint venture
$ -
$ - $4,635
$ - $4,635
Stock consideration received due to
business divestiture
$ -
$ - $42,600
$ - $42,600
Assumption of debt by buyer upon
sale of equity interest
$ -
$ -
$ -
$ - $27,321
Assumption of debt by buyer in
connection with sale of
residential lease assets $69,076
$ -
$ - $69,076
$ -
Receivables in connection with sale
of residential lease portfolio $8,043
$ -
$ - $8,043
$ -
Right-of-use assets obtained in
exchange for lease obligations $8,939 $13,280
$ - $103,744
$ -
Derecognition of financing
obligations upon business
divestiture
$ - $590,884
$ - $590,884
$ -
Holdback related to business
divestiture
$ - $2,425
$ - $2,425
$ -
Holdback related to sale of assets $18,300
$ -
$ - $18,300
$ -
Aged supplier financing balances
reclassified from AP to short-
term debt $22,852
$ -
$ - $22,852
$ -
Use of Non-GAAP Financial Measures
To supplement its consolidated financial results presented in accordance with United States Generally Accepted Accounting Principles ("GAAP"), the company uses non-GAAP measures that are adjusted for certain items from the most directly comparable GAAP measures. The specific non-GAAP measures listed below are: revenue; gross margin; net loss; net loss per diluted share; and adjusted earnings before interest, taxes, depreciation and amortization ("Adjusted EBITDA"). Management believes that each of these non-GAAP measures are useful to investors, enabling them to better assess changes in each of these key elements of the company's results of operations across different reporting periods on a consistent basis, independent of certain items as described below. Thus, each of these non-GAAP financial measures provide investors with another method to assess the company's operating results in a manner that is focused on its ongoing, core operating performance, absent the effects of these items. Management uses these non-GAAP measures internally to assess the business, its financial performance, current and historical results, as well as for strategic decision-making and forecasting future results. Many of the analysts covering the company also use these non-GAAP measures in their analysis. Given management's use of these non-GAAP measures, the company believes these measures are important to investors in understanding the company's operating results as seen through the eyes of management. These non-GAAP measures are not prepared in accordance with GAAP or intended to be a replacement for GAAP financial data; and therefore, should be reviewed together with the GAAP measures and are not intended to serve as a substitute for results under GAAP, and may be different from non-GAAP measures used by other companies.
Non-GAAP revenue includes adjustments relating to 8point3, legacy utility and power plant projects, legacy sale-leaseback transactions and construction services for residential customer contracts, each of which is described below. In addition to the above adjustments, non-GAAP gross margin includes adjustments relating to impairment and sale of residential lease assets, impairment of property, plant, and equipment, cost of above-market polysilicon, stock-based compensation, amortization of intangible assets, and depreciation of idle equipment, each of which is described below. In addition to the above adjustments, non-GAAP net loss and non-GAAP net loss per diluted share are adjusted for adjustments relating to gain on business divestiture, transaction-related costs, business reorganization costs, non-cash interest expense, restructuring expense, the tax effect of these non-GAAP adjustments, and other items, each of which is described below. In addition to the above adjustments as non-GAAP net loss, Adjusted EBITDA includes adjustments relating to cash interest expense (net of interest income), provision for income taxes, and depreciation.
Non-GAAP Adjustments Based on International Financial Reporting Standards ("IFRS")
The company's non-GAAP results include adjustments under IFRS that are consistent with the adjustments made in connection with the company's internal reporting process as part of its status as a consolidated subsidiary of Total S.A., our controlling shareholder and a foreign public registrant that reports under IFRS. Differences between GAAP and IFRS reflected in the company's non-GAAP results are further described below. In these situations, management believes that IFRS enables investors to better evaluate the company's performance, and assists in aligning the perspectives of the management with those of Total S.A.
-- 8point3: The company includes adjustments related to the sales of
projects contributed to 8point3 Group, an equity method investee
("8point3") based on the difference between the fair market value of the
consideration received and the net carrying value of the projects
contributed, of which, a portion is deferred in proportion to the
company's retained equity stake in 8point3. The deferred profit is
subsequently recognized over time. 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 for other
projects sold is deferred until those projects reach commercial
operation. On June 19, 2018, the company sold its equity interest in the
8point3 Group.
-- Legacy utility and power plant projects: The company included
adjustments related to the revenue recognition of certain utility and
power plant projects based on percentage-of-completion accounting and,
when relevant, the allocation of revenue and margin to our project
development efforts at the time of initial project sale. Under IFRS,
such projects are accounted for when the customer obtains control of the
promised goods or services which generally results in earlier
recognition of revenue and profit than U.S. GAAP. Over the life of each
project, cumulative revenue and gross margin will eventually be
equivalent under both GAAP and IFRS; however, revenue and gross margin
will generally be recognized earlier under IFRS.
-- Legacy sale-leaseback transactions: The company included adjustments
related to the revenue recognition on certain legacy sale-leaseback
transactions entered into before December 31, 2018, based on the net
proceeds received from the buyer-lessor. Under U.S. GAAP, these
transactions were accounted for under the financing method in accordance
with the applicable accounting guidance. Under such guidance, no revenue
or profit is recognized at the inception of the transaction, and the net
proceeds from the buyer-lessor are recorded as a financing liability.
Imputed interest is recorded on the liability equal to our incremental
borrowing rate adjusted solely to prevent negative amortization. Under
IFRS, such revenue and profit is recognized at the time of sale to the
buyer-lessor if certain criteria are met. Upon adoption of IFRS 16,
Leases, on December 31, 2018, IFRS is aligned with GAAP.
-- Mark-to-market (gain) loss in equity investments: The company recognizes
adjustments related to the fair value of equity investments with readily
determinable fair value based on the changes in the stock price of these
equity investments at every reporting period. Under GAAP, mark-to-market
gains and losses due to changes in stock prices for these securities are
recorded in earnings while under IFRS, an election can be made to
recognize such gains and losses in other comprehensive income. Such an
election was made by Total S.A. Further, we elected the Fair Value
Option ("FVO") for some of our equity method investments, and we adjust
the carrying value of those investments based on their fair market value
calculated periodically. Such option is not available under IFRS, and
equity method accounting is required for such investments. Management
believes that excluding these adjustments on equity investments is
consistent with our internal reporting process as part of its status as
a consolidated subsidiary of Total S.A. and better reflects our ongoing
results.
Other Non-GAAP Adjustments
-- Business process improvement costs: During prior quarter ended June 30,
2019, the company initiated a project to improve its manufacturing and
related processes to improve gross margin in coming years and engaged
third party experts to consult on business process improvements.
Management believes it is appropriate to exclude these consulting
expenses from our Non-GAAP financial measures as they are non-recurring
in nature, and are not reflective of the company's ongoing operating
results
-- Loss (gain) on sale and impairment of residential lease assets: In the
fourth quarter of fiscal 2017, the company made the decision to sell or
refinance its interest in the residential lease portfolio and as a
result of this triggering event, determined it was necessary to evaluate
the potential for impairment in its ability to recover the carrying
amount of the residential lease portfolio. In accordance with such
evaluation, the company recognized a non-cash impairment charge on its
solar power systems leased and to be leased and an allowance for losses
related financing receivables. In connection with the impairment loss,
the carrying values of the company's solar power systems leased and to
be leased were reduced which resulted in lower depreciation charges. In
the fourth quarter of fiscal 2018, the company sold membership units
representing a 49% membership interest in its residential lease business
and retained a 51% membership interest. The loss on divestment and the
remaining unsold residential lease assets impairment with its
corresponding depreciation savings are excluded from the company's
non-GAAP results as they are non-cash in nature and not reflective of
ongoing operating results. Additionally, in the third quarter of fiscal
2019, in continuation with our intention to deconsolidate all the
residential lease assets owned by us, we sold the remainder of
residential lease assets still owned by us, that were not previously
sold. Such activity is excluded from the company's non-GAAP financial
measures as it is non-cash in nature and not reflective of ongoing
non-GAAP results.
-- Impairment of property, plant, and equipment: In the second quarter of
fiscal 2018, the company announced its proposed plan to change the
corporate structure into the Upstream business unit and Downstream
business unit, and long-term strategy to replace IBC technology to NGT.
Accordingly, the company expects to upgrade the equipment associated
with our manufacturing operations for the production of NGT over the
next several years. In connection with these events, the company
determined indicators of impairment existed and therefore performed an
evaluation of the recoverability of the asset group. In accordance with
such evaluation, the company recognized a non-cash impairment charge on
its property, plant and equipment. Such asset impairment is excluded
from the company's non-GAAP financial measures as it is non-cash in
nature and not reflective of ongoing segment results.
-- Construction revenue on solar services contracts: Upon adoption of the
new lease accounting guidance ("ASC 842") in the first quarter of fiscal
2019, revenue and cost of revenue on solar services contracts with
residential customers are recognized ratably over the term of those
contracts, once the projects are placed in service. For non-GAAP
results, the company recognizes revenue and cost of revenue upfront
based on the expected cash proceeds to align with the legacy lease
accounting guidance. Management believes it is appropriate to recognize
revenue and cost of revenue upfront based on total expected cash
proceeds, as it better reflects the company's ongoing results as such
method aligns revenue and costs incurred most accurately in the same
period.
-- Cost of above-market polysilicon: The company has entered into multiple
long-term, fixed-price supply agreements to purchase polysilicon for
periods of up to 10 years. The prices in select legacy supply
agreements, which incorporate a cash portion and a non-cash portion
attributable to the amortization of prepayments made under the
agreements, significantly exceed current market prices. Additionally, in
order to reduce inventory and improve working capital, the company has
periodically elected to sell polysilicon inventory in the marketplace at
prices below the company's purchase price, thereby incurring a loss.
Management believes that it is appropriate to exclude the impact of its
above-market cost of polysilicon, including the effect of above-market
polysilicon on product costs, losses incurred on sales of polysilicon to
third parties, and inventory reserves and project asset impairments from
the company's non-GAAP financial measures as they are not reflective of
ongoing operating results and do not contribute to a meaningful
evaluation of a company's past operating performance.
-- 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.
-- Depreciation of idle equipment: In the fourth quarter of 2017, the
company changed the deployment plan for its next generation of solar
cell technology, and revised its depreciation estimates to reflect the
use of certain assets over its shortened useful life. Such asset
depreciation is excluded from the company's non-GAAP financial measures
as it is non-cash in nature and not reflective of ongoing operating
results. Excluding this data provides investors with a basis to compare
the company's performance against the performance of other companies
without such charges.
-- Gain on business divestiture: In the second quarter of fiscal 2019, the
company entered into a transaction pursuant to which it sold membership
interest in certain of its subsidiaries that own leasehold interests in
projects subject to sale-leaseback financing arrangements. In connection
with this sale, the company recognized a gain relating to this business
divestiture. In the third quarter of fiscal 2018, the company entered
into a transaction pursuant to which the company sold certain assets and
intellectual property related to the production of microinverters for
purchase consideration comprised of both cash and stock. In connection
with this sale, the company recognized a gain relating to this business
divestiture. Management believes that it is appropriate to exclude both
of these gains from the company's non-GAAP results as it is not
reflective of ongoing operating results.
-- Transaction-related costs: In connection with material transactions such
as acquisition or divestiture of a business, the company incurred
transaction costs including legal and accounting fees. Management
believes that it is appropriate to exclude these costs from the
company's non-GAAP financial measures as they would not have otherwise
been incurred as part of its business operations and are therefore not
reflective of ongoing operating results.
-- Business reorganization costs: In connection with the reorganization of
our business into an upstream and downstream business unit structure,
the company incurred and expects to continue incurring expenses in the
upcoming quarters associated with reorganization of corporate functions
and responsibilities to the business units, updating accounting policies
and processes and implementing systems. The company also incurred and
expects to incur costs in financing its Next Generation Technology
("NGT") business. The company believes that it is appropriate to exclude
these from our segment results as they would not have otherwise been
incurred as part of its business operations and are therefore not
reflective of ongoing operating results.
-- Non-cash interest expense: The company incurs non-cash interest expense
related to the amortization of items such as original issuance discounts
on its debt. The company excludes non-cash interest expense because the
expense does not reflect its financial results in the period incurred.
Management believes that this adjustment for non-cash interest expense
provides investors with a basis to evaluate the company's performance,
including compared with the performance of other companies, without
non-cash interest expense.
-- Restructuring expenses: 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.
-- Tax effect: This amount is used to present each of the adjustments
described above on an after-tax basis in connection with the
presentation of non-GAAP net income (loss) and non-GAAP net income
(loss) per diluted share. The company's non-GAAP tax amount is based on
estimated cash tax expense and reserves. The company forecasts its
annual cash tax liability and allocates the tax to each quarter in a
manner generally consistent with its GAAP methodology. This approach is
designed to enhance investors' ability to understand the impact of the
company's tax expense on its current operations, provide improved
modeling accuracy, and substantially reduce fluctuations caused by GAAP
to non-GAAP adjustments, which may not reflect actual cash tax expense.
-- Adjusted EBITDA adjustments: When calculating Adjusted EBITDA, in
addition to adjustments described above, the company excludes the impact
of the following items during the period:
-- Cash interest expense, net of interest income
-- Provision for income taxes
-- Depreciation
For more information about these non-GAAP financial measures, please see the tables captioned "Reconciliations of GAAP Measures to Non-GAAP Measures" set forth at the end of this release, which should be read together with the preceding financial statements prepared in accordance with GAAP.
SUNPOWER CORPORATION
RECONCILIATIONS OF GAAP MEASURES TO NON-GAAP MEASURES
(In thousands, except percentages and per share data)
(Unaudited)
Adjustments to Revenue:
THREE MONTHS ENDED NINE MONTHS ENDED
Sep. 29,
Jun. 30,
Sep. 30,
Sep. 29,
Sep. 30,
2019 2019 2018 2019 2018
GAAP revenue $475,958 $436,281 $428,263 $1,260,464 $1,269,248
Adjustments based on IFRS:
8point3 (8,588)
Legacy utility and power plant projects (65) (23) (361) (259) (3,454)
Legacy sale-leaseback transactions 15,529 32,327
Other adjustments:
Construction revenue on solar services contracts 15,790 45,614 124,909
Non-GAAP revenue $491,683 $481,872 $443,431 $1,385,114 $1,289,533
Adjustments to Gross Profit (Loss) /Margin:
THREE MONTHS ENDED NINE MONTHS ENDED
Sep. 29,
Jun. 30,
Sep. 30,
Sep. 29,
Sep. 30,
2019 2019 2018 2019 2018
GAAP gross profit (loss) $48,251 $19,800 $9,877 $30,766 $(289,510)
Adjustments based on IFRS:
8point3 (8,337)
Legacy utility and power plant projects (7) 884 162 993 (675)
Legacy sale-leaseback transactions (181) (3,684) (2,492) (4,688) (5,890)
Other adjustments:
Business process improvement costs 2,279 2,279
Loss on sale and impairment of residential lease assets (511) (632) (4,679) (1,268) (12,683)
Construction revenue on solar service contracts 1,160 5,506 18,052
Impairment of property, plant and equipment 355,106
Cost of above-market polysilicon 23,878 25,950 14,628 99,256 49,997
Stock-based compensation expense 1,522 1,133 1,239 2,823 3,760
Amortization of intangible assets 1,783 1,783 2,142 5,352 7,077
Depreciation of idle equipment 721
Non-GAAP gross profit $78,174 $50,740 $20,877 $153,565 $99,566
GAAP gross margin (%) 10.1% 4.5% 2.3% 2.4% -22.8%
Non-GAAP gross margin (%) 15.9% 10.5% 4.7% 11.1% 7.7%
Adjustments to Net income (loss):
THREE MONTHS ENDED NINE MONTHS ENDED
Sep. 29,
Jun. 30,
Sep. 30,
Sep. 29,
Sep. 30,
2019 2019 2018 2019 2018
GAAP net income (loss) attributable to stockholders $(15,017) $121,459 $(89,826) $16,718 $(652,917)
Adjustments based on IFRS:
8point3 (8,485)
Legacy utility and power plant projects (7) 884 162 993 (675)
Legacy sale-leaseback transactions (181) 1,025 2,258 5,755 7,818
Mark-to-market (gain) loss on equity investments (27,595) (67,500) 6,225 (128,095) 6,225
Other adjustments:
Business process improvements 2,279 2,279
Loss on sale and impairment of residential lease assets 5,135 15,554 50,735 29,002 146,234
Construction revenue on solar services contracts 1,160 (6,398) (8,978)
Impairment of property, plant and equipment 369,168
Cost of above-market polysilicon 23,878 25,950 14,628 99,256 49,997
Stock-based compensation expense 6,992 6,270 6,390 18,928 21,791
Amortization of intangible assets 1,783 1,783 2,142 5,352 7,077
Depreciation of idle equipment 721
Gain on business divestiture (137,286) (59,347) (143,400) (59,347)
Transaction-related costs 976 1,173 20,869 3,571 20,869
Business reorganization costs 6,066 4,156 12,871
Non-cash interest expense 10 10 13 30 58
Restructuring charges 4,283 2,453 3,923 6,071 18,604
Tax effect 880 (669) 906 1,729 1,808
Non-GAAP net loss attributable to stockholders $10,642 $(31,136) $(40,922) $(77,918) $(71,054)
Adjustments to Net income (loss) per diluted share:
THREE MONTHS ENDED NINE MONTHS ENDED
Sep. 29,
Jun. 30,
Sep. 30,
Sep. 29,
Sep. 30,
2019 2019 2018 2019 2018
Net income (loss) per diluted share
Numerator:
GAAP net income (loss) available to common stockholders $(15,017) $121,459 $(89,826) $16,718 $(652,917)
Add: Interest expense on 4.00% debenture due 2023, net of tax 3,358
Add: Interest expense on 0.875%% debenture due 2021, net of tax 691
GAAP net income (loss) available to common stockholders $(15,017) $125,508 $(89,826) $16,718 $(652,917)
Non-GAAP net income (loss) available to common stockholders $10,642 $(31,136) $(40,922) $(77,918) $(71,054)
Denominator:
GAAP weighted-average shares 142,553 142,471 141,027 142,248 140,722
Effect of dilutive securities:
Restricted stock units 2,241 2,488
0.875% debentures due 2021 13,922
4.00% debentures due 2023 8,203
GAAP dilutive weighted-average common shares: 142,553 166,837 141,027 144,736 140,722
Non-GAAP weighted-average shares 142,533 142,471 141,027 142,248 140,722
Effect of dilutive securities:
Restricted stock units 4,826
Non-GAAP weighted-average shares(1) 147,379 142,471 141,027 142,248 140,722
GAAP net income (loss) per diluted share $(0.11) $0.75 $(0.64) $0.12 $(4.64)
Non-GAAP net income (loss) per diluted share $0.07 $(0.22) $(0.29) $(0.55) $(0.50)
(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 NINE MONTHS ENDED
Sep. 29,
Jun. 30,
Sep. 30,
Sep. 29,
Sep. 30,
2019 2019 2018 2019 2018
GAAP net income (loss) attributable to stockholders $(15,017) $121,459 $(89,826) $16,718 $(652,917)
Adjustments based on IFRS:
8point3 (8,485)
Legacy utility and power plant projects (7) 884 162 993 (675)
Legacy sale-leaseback transactions (181) 1,025 2,258 5,755 7,818
Mark-to-market (gain) loss on equity investments (27,595) (67,500) 6,225 (128,095) 6,225
Other adjustments:
Business process improvement costs 2,279 2,279
Loss on sale and impairment of residential lease assets 5,135 15,554 50,735 29,002 146,234
Construction revenue on solar services contracts 1,160 (6,398) (8,978)
Impairment of property, plant and equipment 369,168
Cost of above-market polysilicon 23,878 25,950 14,628 99,256 49,997
Stock-based compensation expense 6,992 6,270 6,390 18,928 21,791
Amortization of intangible assets 1,783 1,783 2,142 5,352 7,077
Depreciation of idle equipment 721
Gain on business divestiture (137,286) (59,347) (143,400) (59,347)
Transaction-related costs 976 1,173 20,869 3,571 20,869
Business reorganization costs 6,066 4,156 12,871
Non-cash interest expense 10 10 13 30 58
Restructuring charges 4,283 2,453 3,923 6,071 18,604
Cash interest expense, net of interest income 9,624 11,148 20,136 30,978 61,810
Provision for income taxes 5,378 6,068 3,680 17,243 9,389
Depreciation 17,205 21,286 24,754 57,672 99,313
Adjusted EBITDA $41,969 $8,035 $6,742 $26,246 $97,650
Q4 2019 and FY 2019 GUIDANCE
(in
thousands
except
percentages) Q4 2019
FY 2019
Revenue
(GAAP)
$520,000-$720,000
$1,800,000-$2,000,000
Revenue
(non-
GAAP)(1)
$520,000-$720,000
$1,900,000-$2,100,000
Gross
margin
(GAAP) 11% - 12% N/A
Gross
margin
(non-
GAAP)(2) 16% - 19% N/A
Net
income
(loss)
(GAAP)
$(28,000)-$(8,000)
$(20,000)-$0
Adjusted
EBITDA(3)
$74,000-$94,000
$100,000-$120,000
1. Estimated non-GAAP amounts above for fiscal 2019 include net adjustments
that increase revenue by approximately $125 million, related to
construction revenue on solar services contracts.
2. Estimated non-GAAP amounts above for Q4 2019 include net adjustments that
increase gross margin by approximately $40 million related to cost of
above-market polysilicon, $2 million related to stock-based compensation
expense, and $2 million related to amortization of intangible assets.
3. Estimated Adjusted EBITDA amounts above for Q4 2019 include net
adjustments that decrease (increase) net income by approximately $40
million related to cost of above-market polysilicon, $15 million related
to depreciation, $10 million related to interest expense, $10 million
related to stock-based compensation expense, $9 million related to
restructuring, $5 million related to income taxes, $11 million related to
business reorganization costs, $2 million related to amortization of
intangible assets. Estimated non-GAAP amounts above for fiscal 2019
include net adjustments that decrease (increase) net loss by
approximately $139 million related to cost of above-market polysilicon,
$73 million related to depreciation, $40 million related to interest
expense, $29 million related to impairment of lease assets, $29 million
related to stock-based compensation expense, $24 million related to
business reorganization costs, $22 million related to income taxes, $15
million related to restructuring, $7 million related to amortization of
intangible assets, $6 million on sale-leaseback, $4 million related to
transaction-related costs, $3 million related to business process
improvement costs, $(143) million related to the gain on business
divestiture, $(128) million related to mark-to-market gain on equity
investments, and $(9) million related to construction revenue on solar
services contracts.
SUNPOWER CORPORATION
(In thousands, except percentages)
THREE MONTHS ENDED
September 29, 2019
---
Revenue
Gross profit / margin
Operating expenses
SunPower Energy
SunPower
Intersegment SunPower Energy Services
SunPower Technologies
Intersegment
Research and
Sales, general
Restructuring
Loss on sale and
Other income
Benefit from
Equity in
Loss attributable to
Net income (loss)
Services Technologies eliminations eliminations development and charges impairment of (expense), net income taxes earnings of non-controlling attributable to
administrative residential lease unconsolidated interests stockholders
assets investees
GAAP $277,688 $333,896 $(135,626) $29,271 10.5% $18,603 5.6% $377 $(15,017)
Adjustments based on
IFRS:
Legacy utility and
power plant projects (65) (7) (7)
Legacy sale-
leaseback
transactions (181) (181)
Mark-to-market gain
on equity
investments (28,548) 953 (27,595)
Other adjustments:
Business process
improvement costs 2,279 2,279
Loss on sale and
impairment of
residential lease
assets (511) 10,756 (5,110) 5,135
Construction revenue
on solar services
contracts 15,790 1,160 1,160
Cost of above-market
polysilicon 29,633 (5,755) 23,878
Stock-based
compensation expense 741 781 903 4,567 6,992
Amortization of
intangible assets 1,783 1,783
Business
reorganization costs 6,066 6,066
Transaction-related
costs 976 976
Non-cash interest
expense 10 10
Restructuring charges 4,283 4,283
Tax effect 880 880
Non-GAAP $293,478 $333,831 $(135,626) $30,473 10.4% $53,079 15.9% $(5,378) $10,642
June 30, 2019
---
Revenue
Gross profit / margin
Operating expenses
Other income
Provision for
Gain (Loss)
Net income (loss)
(expense), net income taxes attributable to non- attributable to
controlling interests stockholders
SunPower Energy
SunPower
Intersegment SunPower Energy Services
SunPower Technologies
Intersegment
Research and
Sales, general
Restructuring
Loss on sale and
Gain on business
Services Technologies eliminations eliminations development and charges impairment of divestiture
administrative residential lease
assets
GAAP $211,726 $314,971 $(90,416) $22,464 10.6% $(2,746) -0.9% $82 $121,459
Adjustments based on
IFRS:
Legacy utility and
power plant projects (23) 884 884
Legacy sale-
leaseback
transactions (3,684) 4,709 1,025
Mark-to-market gain
on equity
investments (67,500) (67,500)
Other adjustments:
Gain (loss) on sale
and impairment of
residential lease
assets (632) 16,728 (542) 15,554
Construction revenue
on solar services
contracts 45,614 5,506 (11,904) (6,398)
Cost of above-market
polysilicon 23,875 2,075 25,950
Stock-based
compensation expense 460 673 879 4,258 6,270
Amortization of
intangible assets 1,783 1,783
Gain on business
divestiture (137,286) (137,286)
Business
reorganization costs 777 3,379 4,156
Transaction-related
costs 1,173 1,173
Non-cash interest
expense 10 10
Restructuring charges 2,453 2,453
Tax effect (669) (669)
Non-GAAP $257,340 $314,948 $(90,416) $24,114 9.4% $24,469 7.8% $2,157 $(31,136)
September 30, 2018
---
Revenue
Gross profit / margin
Operating expenses
Other income
Benefit from
Gain attributable to
Net income (loss)
(expense), net income taxes non-controlling attributable to
interests stockholders
SPES
SPT
Intersegment
SPES
SPT
Intersegment
Research and
Sales, general
Restructuring
Impairment of
Gain on business
revenue revenue development and charges residential lease divestitures
eliminations eliminations administrative assets
GAAP $263,576 $289,630 $(124,943) $46,380 17.6% $(17,897) -6.2% $(18,606) $(89,826)
Adjustments based on
IFRS:
Legacy utility and
power plant projects (114) (247) 141 21 162
Legacy sale-
leaseback
transactions 15,529 (2,054) (438) 4,750 2,258
Mark-to-market loss
on equity
investments 6,225 6,225
Other adjustments:
Impairment of
residential lease
assets (4,679) 53,537 1,877 50,735
Cost of above-market
polysilicon (2,336) 16,964 14,628
Stock-based
compensation expense 598 641 806 4,345 6,390
Amortization of
intangible assets 972 1,170 2,142
Gain on business
divestitures (59,347) (59,347)
Acquisition-related
and other costs 20,869 20,869
Non-cash interest
expense 1 12 13
Restructuring charges 3,923 3,923
Tax effect 906 906
Non-GAAP $278,991 $289,383 $(124,943) $39,022 14.0% $461 0.2% $(18,606) $(40,922)
NINE MONTHS ENDED
September 29, 2019
---
Revenue
Gross profit / margin
Operating expenses
Other income
Benefit income
Equity in earnings of
Loss attributable
Net income (loss)
(expense), net taxes unconsolidated to non-controlling attributable to
investees interests stockholders
SunPower Energy
SunPower
Intersegment SunPower Energy Services
SunPower Technologies
Intersegment
Research and
Sales, general
Restructuring
Loss on sale and
Gain on business
Services Technologies eliminations eliminations development and charges impairment of divestiture
administrative residential lease
assets
GAAP $667,635 $879,671 $(286,842) $58,878 8.8% $(36,207) -4.1% $8,095 $16,718
Adjustments based on
IFRS:
Legacy utility and
power plant projects (259) 118 875 993
Legacy sale-
leaseback
transactions (4,689) 1 10,443 5,755
Mark-to-market gain
on equity
investments (129,048) 953 (128,095)
Other adjustments:
Business process
improvement costs 2,279 2,279
Loss on sale and
impairment of
residential lease
assets (1,268) 36,710 (6,440) 29,002
Construction revenue
on solar services
contracts 124,909 18,052 (27,030) (8,978)
Cost of above-market
polysilicon 102,936 (3,680) 99,256
Stock-based
compensation expense 1,369 1,454 2,375 13,730 18,928
Amortization of
intangible assets 5,352 5,352
Business
reorganization costs 777 12,094 12,871
Gain on business
divestiture (143,400) (143,400)
Transaction-related
costs 3,571 3,571
Non-cash interest
expense 30 30
Restructuring charges 6,071 6,071
Tax effect 1,729 1,729
Non-GAAP $792,544 $879,412 $(286,842) $72,460 9.1% $76,690 8.7% $4,415 $(77,918)
September 30, 2018
---
Revenue
Gross profit / margin
Operating expenses
Other income
Benefit from
Equity in losses of
Loss attributable
Net income (loss)
(expense), net income taxes unconsolidated to non-controlling attributable to
investees interests stockholders
SunPower Energy
SunPower
Intersegment SunPower Energy Services
SunPower Technologies
Intersegment
Research and
Sales, general
Restructuring
Impairment of
Gain on business
Services Technologies eliminations eliminations development and charges residential lease divestiture
administrative assets
GAAP $780,187 $791,754 $(302,693) $136,078 17.4% $(408,283) -51.6% $(17,305) $(652,917)
Adjustments based on
IFRS:
8point3 (2,400) (6,188) (2,149) (6,188) (148) (8,485)
Legacy utility and
power plant projects (588) (2,866) (315) (360) (675)
Legacy sale-
leaseback
transactions 32,327 (5,452) (438) 13,708 7,818
Mark-to-market loss
on equity
investments 6,225 6,225
Other adjustments:
Impairment of
property, plant and
equipment 33 355,074 12,832 1,229 369,168
Impairment of
residential lease
assets (12,684) 170,898 (11,980) 146,234
Cost of above-market
polysilicon (5,850) 55,847 49,997
Stock-based
compensation expense 1,760 2,000 4,589 13,442 21,791
Amortization of
intangible assets 3,493 3,584 7,077
Depreciation of idle
equipment 289 432 721
Gain on business
divestitures (59,347) (59,347)
Acquisition-related
and other costs 20,869 20,869
Non-cash interest
expense 7 51 58
Restructuring charges 18,604 18,604
Tax effect 1,808 1,808
Non-GAAP $809,526 $782,700 $(302,693) $115,203 14.2% $1,668 0.2% $(17,305) $(71,054)
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SOURCE SunPower Corp.
