Maxeon Solar Technologies Announces Third Quarter 2024 Financial Results
SINGAPORE, Dec. 5, 2024 /PRNewswire/ -- Maxeon Solar Technologies, Ltd. (NASDAQ:MAXN) ("Maxeon" or "the Company"), a global leader in solar innovation and channels, today announced its financial results for the third quarter ended September 29, 2024.
Maxeon's Chief Executive Officer George Guo stated, "Third quarter results were distorted due to deliveries detained by the United States Customs and Border Protection ("CBP"), fixed costs associated with factory shutdowns and low production levels, and costs and write-offs from our ongoing restructuring. On top of this, we continue to observe depressed prices as a result of the global oversupply and intense competition. The average market price for high efficiency and mainstream crystalline modules like our IBC products and Performance line products has dropped by approximately 43.5% and 28.6%, respectively, since January 2024. We recently announced some of the key strategic initiatives undertaken to optimize Maxeon's business portfolio and geographic market focus. Moving forward, we intend to re-create Maxeon as a world leader in solar, focused exclusively in the United States where we believe our market presence and planned local manufacturing create a strong platform to drive growth and profitability in the future. We appreciate the support and patience of our investors as we translate our strategic thinking into concrete actions."
Maxeon's Chief Financial Officer Dmitri Hu added, "As we establish our new strategy to transform Maxeon, we are highly focused on our financial position. We intend to reserve sufficient liquidity for daily operations, while we recapitalize the company to fund our restructuring and growth. However, considering the continued uncertainties around CBP detentions, we are unable to provide financial guidance for fourth quarter of 2024. We will defer holding a conference call to discuss quarterly financial results, until the ongoing restructuring is complete and we can provide a more comprehensive view of our go-forward strategy."
Selected Q3 Unaudited Financial Summary
(In thousands, except shipments) Fiscal Q3 2024 Revised Fiscal Q2 2024 Fiscal Q3 2023
Shipments, in MW 199 526 628
Revenue $88,560 $184,219 $227,630
Gross (loss) profit(1) (179,101) (7,785) 2,728
GAAP Operating expenses 153,218 61,670 66,562
Net loss attributable to the stockholders(1) (393,944)
(34,231)(2) (108,257)
Capital expenditures 11,129 17,707 15,127
Other Financial Data(1)
(In thousands) Fiscal Q3 2024 Revised Fiscal Q2 2024 Fiscal Q3 2023
Non-GAAP Gross (loss) profit $(174,742) $(5,794) $2,728
Non-GAAP Operating expenses 42,861 40,180 37,535
Adjusted EBITDA (225,705) (36,574) (19,923)
(1) The Company'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) Reflects the correction of an error in the gain on extinguishment of debt reported in our second quarter Form 6-K,
filed with the SEC on September 3, 2024, due to incorrect valuation methodology and assumptions used on the ratio of
warrants to number of shares. The revised gain on extinguishment of debt should be $35.3 million instead of the
previously reported $77.3 million. In addition, $24.8 million of warrants were erroneously classified as equity that
should have been classified as liabilities, as the fixed-for-fixed criteria was not met until the three months ended
September 29, 2024.Consequently, interest expense, net should be $14.1 million instead of $10.1 million as reported
previously. Total effect on net loss attributable to the stockholders is $45.9 million.
For more information
Maxeon's third quarter 2024 financial results and management commentary can be found on Form 6-K by accessing the Financials & Filings page of the Investor Relations section of Maxeon's website at: https://corp.maxeon.com/investor-relations. The Form 6-K and Company's other filings are also available online from the Securities and Exchange Commission at www.sec.gov.
About Maxeon Solar Technologies
Maxeon Solar Technologies (NASDAQ: MAXN) is Powering Positive Change(TM). Headquartered in?Singapore, Maxeon leverages nearly 40 years of solar energy leadership and over 2,000 granted patents to design innovative and sustainably made solar panels and energy solutions for residential, commercial, and power plant customers. For more information about how Maxeon is Powering Positive Change(TM) visit us at?www.maxeon.com, and on?LinkedIn.
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, including, but not limited to, statements regarding: (a) our ability to (i) meet short-term and long-term material cash requirements, (ii) service our outstanding debts and make payments as they come due and (iii) continue as a going concern; (b) the success of our ongoing restructuring initiatives and our ability to execute on our plans and strategy; (c) our expectations regarding product pricing trends, demand and growth projections, including our efforts to enforce our intellectual property rights against our competitors; (d) disruptions to our operations and supply chain resulting from, among other things, government regulatory or enforcement actions, such as the detentions of our products by the U.S. Customs Border and Protection (CBP) for an unforeseeable amount of time, epidemics, natural disasters or military conflicts, including the duration, scope and impact on the demand for our products, market disruptions from the war in Ukraine and the Israel-Hamas-Iran conflict; (e) anticipated product launch timing and our expectations regarding ramp, customer acceptance and demand, upsell and expansion opportunities; (f) our expectations and plans for short- and long-term strategy, including our anticipated areas of focus and investment, market expansion, product and technology focus, implementation of restructuring plans and projected growth and profitability; (g) our technology outlook, including anticipated fab capacity expansion and utilization and expected ramp and production timelines for the Company's next-generation Maxeon 7 and Performance line solar panels, expected cost reductions, and future performance; (h) our strategic goals and plans, including statements regarding restructuring of our business portfolio, the Company's anticipated manufacturing facility in the U.S., our transformation initiatives and plans regarding supply chain adaptation, improved costs and efficiencies, capacity expansion, partnership discussions with respect to the Company's next-generation technology, and our relationship with our existing customers, suppliers and partners, and our ability to achieve and maintain them; (i) our expectations regarding our future performance and revenues resulting from contracted orders, bookings, backlog, and pipelines in our sales channels and feedback from our partners; and (j) our projected effective tax rate and changes to the valuation allowance related to our deferred tax assets.
The forward-looking statements can be also identified by terminology such as "may," "might," "could," "will," "aims," "expects," "anticipates," "future," "intends," "plans," "believes," "estimates" and similar statements. Among other things, the quotations from management in this press release and Maxeon's operations and business outlook contain forward-looking statements.
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. These statements are not guarantees of future performance and are subject to a number of risks. The reader should not place undue reliance on these forward-looking statements, as there can be no assurances that the plans, initiatives or expectations upon which they are based will occur. 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, and other restructuring plans, as well as challenges in addressing regulatory and other obstacles that may arise; (2) our liquidity, substantial indebtedness, terms and conditions upon which our indebtedness is incurred, and ability to obtain additional financing for our projects, customers and operations; (3) an adverse final determination of the CBP investigation related to CBP's examination of Maxeon's compliance with the Uyghur Forced Labor Prevention Act; (4) our ability to manage supply chain shortages and/or excess inventory and cost increases and operating expenses; (5) potential disruptions to our operations and supply chain that may result from damage or destruction of facilities operated by our suppliers, difficulties in hiring or retaining key personnel, epidemics, natural disasters, including impacts of the war in Ukraine; (6) our ability to manage our key customers and suppliers; (7) the success of our ongoing research and development efforts and our ability to commercialize new products and services, including products and services developed through strategic partnerships; (8) competition in the solar and general energy industry and downward pressure on selling prices and wholesale energy pricing, including impacts of inflation, economic recession and foreign exchange rates upon customer demand; (9) changes in regulation and public policy, including the imposition and applicability of tariffs; (10) our ability to comply with various tax holiday requirements as well as regulatory changes or findings affecting the availability of economic incentives promoting use of solar energy and availability of tax incentives or imposition of tax duties; (11) fluctuations in our operating results and in the foreign currencies in which we operate; (12) appropriate sizing, or delays in expanding our manufacturing capacity and containing manufacturing and logistical difficulties that could arise; (13) unanticipated impact to customer demand and sales schedules due, among other factors, to the war in Ukraine, economic recession and environmental disasters; (14) reaction by securities or industry analysts to our annual and/or quarterly guidance, in combination with our results of operations or other factors, and/ or third party reports or publications, whether accurate or not, which may cause such securities or industry analysts to cease publishing research or reports about us, or adversely change their recommendations regarding our ordinary shares, which may negatively impact the market price of our ordinary shares and volume of our stock trading; and (15) unpredictable outcomes resulting from our litigation activities and other disputes. Forward-looking and other statements in this report may also address our corporate sustainability or responsibility progress, plans, and goals (including environmental matters), and the inclusion of such statements is not an indication that these contents are necessarily material to investors or required to be disclosed in the Company's filings with the SEC. In addition, historical, current, and forward-looking sustainability-related statements may be based on standards for measuring progress that are still developing, internal controls and processes that continue to evolve, and assumptions that are subject to change in the future. 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 report on Form 20-F, particularly under the heading "Risk Factors" and Form 6-K filings discussing our quarterly earnings results. Copies of these filings are available online from the SEC at www.sec.gov, or on the SEC Filings section of our Investor Relations website at https://corp.maxeon.com/investor-relations. 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.
Use of Non-GAAP Financial Measures
We present certain non-GAAP measures such as non-GAAP gross (loss) profit, non-GAAP operating expenses and earnings before interest, taxes, depreciation and amortization ("EBITDA") adjusted for stock-based compensation, provision for expected credit losses, restructuring charges and fees, remeasurement loss on prepaid forward, physical delivery forward and warrants, gain on extinguishment of debt and equity in income of unconsolidated investees and associated gains ("Adjusted EBITDA") to supplement our consolidated financial results presented in accordance with GAAP. Non-GAAP gross (loss) profit is defined as gross (loss) profit excluding stock-based compensation and restructuring charges and fees. Non-GAAP operating expenses is defined as operating expenses excluding stock-based compensation, provision for expected credit losses and restructuring charges and fees.
We believe that non-GAAP gross (loss) profit, non-GAAP operating expenses and Adjusted EBITDA provide greater transparency into management's view and assessment of the Company's ongoing operating performance by removing items management believes are not representative of our continuing operations and may distort our longer-term operating trends. We believe these measures are useful to help enhance the comparability of our results of operations across different reporting periods on a consistent basis and with our competitors, distinct from items that are infrequent or not associated with the Company's core operations as presented above. We also use these non-GAAP measures internally to assess our business, financial performance and current and historical results, as well as for strategic decision-making and forecasting future results. Given our use of non-GAAP measures, we believe that these measures may be important to investors in understanding our operating results as seen through the eyes of management. These non-GAAP measures are neither prepared in accordance with GAAP nor are they intended to be a replacement for GAAP financial data, should be reviewed together with GAAP measures and may be different from non-GAAP measures used by other companies.
As presented in the "Reconciliation of Non-GAAP Financial Measures" section, each of the non-GAAP financial measures excludes one or more of the following items in arriving to the non-GAAP measures:
-- Stock-based compensation expense. Stock-based compensation relates
primarily to equity incentive awards. Stock-based compensation is a
non-cash expense that is dependent on market forces that are difficult
to predict and is excluded from non-GAAP gross (loss) profit, non-GAAP
operating expense and Adjusted EBITDA. Management believes that this
adjustment for stock-based compensation expense provides investors with
a basis to measure our core performance, including the ability to
compare our performance with the performance of other companies, without
the period-to-period variability created by stock-based compensation
-- Provision for expected credit losses. This relates to the expected
credit loss in relation to the financial assets under the Separation and
Distribution Agreement dated November 8, 2019 (the "SDA") entered into
with SunPower Corporation ("SunPower") in connection with the Company's
spin-off from SunPower. Such loss is excluded from non-GAAP operating
expense and Adjusted EBITDA as this relates to SunPower's business which
Maxeon did not and will not have economic benefits to, as the Company's
involvement is solely through SunPower's indemnification obligations set
forth in the SDA. As such, management believes that this is not part of
core operating activity and it is appropriate to exclude the provision
for expected credit losses from our non-GAAP financial measures as it is
not reflective of ongoing operating results nor do these charges
contribute to a meaningful evaluation of our past operating performance.
-- Restructuring charges and fees. We incur restructuring charges,
inventory impairment and other inventory related costs associated with
the re-engineering of our IBC capacity, and fees related to
reorganization plans aimed towards realigning resources consistent with
our global strategy and improving its overall operating efficiency and
cost structure. Restructuring charges and fees are excluded from
non-GAAP operating expenses and Adjusted EBITDA because they are not
considered core operating activities. Although we have engaged in
restructuring activities and initiatives, past activities have been
discrete events based on unique sets of business objectives. As such,
management believes that it is appropriate to exclude restructuring
charges and fees from our non-GAAP financial measures as they are not
reflective of ongoing operating results nor do these charges contribute
to a meaningful evaluation of our past operating performance.
-- Gain on extinguishment of debt. This relates to the gain that arose from
the substantial modification in June 2024 of our Green Convertible
Senior Notes due 2025 (the "2025 Notes") and First Lien Senior Secured
Convertible Notes due 2027. Gain on debt extinguishment is excluded from
Adjusted EBITDA because it is not considered part of core operating
activities. Such activities are discrete events based on unique sets of
business objectives. As such, management believes that it is appropriate
to exclude the gain on extinguishment of debt from our non-GAAP
financial measures as it is not reflective of ongoing operating results
nor do these charges contribute to a meaningful evaluation of our past
operating performance.
-- Remeasurement loss (gain) on prepaid forward and physical delivery
forward. This relates to the mark-to-market fair value remeasurement of
privately negotiated prepaid forward and physical delivery transactions.
The transactions were entered into in connection with the issuance on
July 17, 2020 of the 2025 Notes for an aggregate principal amount of
$200 million. The prepaid forward is remeasured to fair value at the end
of each reporting period, with changes in fair value booked in earnings.
The fair value of the prepaid forward is primarily affected by the
Company's share price. The physical delivery forward was remeasured to
fair value at the end of the note valuation period on September 29,
2020, and was reclassified to equity after remeasurement, and will not
be subsequently remeasured. The fair value of the physical delivery
forward was primarily affected by the Company's share price. The
remeasurement loss (gain) on prepaid forward and physical delivery
forward is excluded from Adjusted EBITDA because it is not considered
core operating activities. As such, management believes that it is
appropriate to exclude the mark-to-market adjustments from our Adjusted
EBITDA as it is not reflective of ongoing operating results nor do the
loss contribute to a meaningful evaluation of our past operating
performance.
-- Remeasurement loss (gain) on warrants. This relates to the
mark-to-market fair value remeasurement of the exchange warrants and
investor warrants. The transactions were entered into in connection with
the exchange of 99.25% of the 2025 Notes with aggregate notional amount
of $200 million and the 9.00% Convertible First Lien Senior Secured
Notes due 2029 of $97.5 million, both entered on June 20, 2024. The
investor warrants were remeasured to fair value prior to them being
exercised and were reclassified to equity, and will not be subsequently
remeasured. The exchange warrants were remeasured to fair value on
September 12, 2024, and were reclassified to equity after on such date,
and will not be subsequently remeasured. The fair value of the warrants
was primarily affected by the Company's share price. The remeasurement
loss on warrants is excluded from Adjusted EBITDA because it is not
considered a core operating activity. As such, management believes that
it is appropriate to exclude the mark-to-market adjustments from our
Adjusted EBITDA as it is not reflective of ongoing operating results nor
do the loss contribute to a meaningful evaluation of our past operating
performance.
-- Equity in (income) losses of unconsolidated investees and related gains.
This relates to the loss on our former unconsolidated equity investment
Huansheng JV and gains on such investment on divestment. This is
excluded from our Adjusted EBITDA financial measure as it is non-cash in
nature and not reflective of our core operational performance. As such,
management believes that it is appropriate to exclude such charges as
they do not contribute to a meaningful evaluation of our performance.
Reconciliation of Non-GAAP Financial Measures
Three Months Ended
(In thousands) September 29, 2024 June 30, 2024 October 1, 2023
Gross (loss) profit $(179,101) $(7,785) $2,728
Stock-based compensation 1,596 166
Restructuring charges and fees 2,763 1,825
Non-GAAP Gross (loss) profit (174,742) (5,794) 2,728
GAAP Operating expenses 153,218 61,670 66,562
Stock-based compensation (4,293) (5,070) (4,888)
Reversal of (provision for) expected credit losses 165 (11,462)
Restructuring charges and fees (106,229) (4,958) (24,139)
Non-GAAP Operating expenses 42,861 40,180 37,535
Net loss attributable to the stockholders (393,944) (34,231)
(*) (108,257)
Interest expense, net 11,784 14,064(*) 7,734
Provision for (benefit from) income taxes 18,925 3,212 (2,554)
Depreciation 15,886 10,338 14,495
Amortization 169 220 38
EBITDA (347,180) (6,397) (88,544)
Stock-based compensation 5,889 5,236 4,888
(Reversal of) provision for expected credit losses (165) 11,462
Gain on extinguishment of debt - (35,326)(*)
Restructuring charges and fees 108,992 6,783 24,139
Remeasurement loss on prepaid forward 1,793 5,751 37,137
Remeasurement loss on warrants 4,966
Equity in (income) losses of unconsolidated investees and related gains - (24,083) 2,457
Adjusted EBITDA (225,705) (36,574) (19,923)
(*) Reflects the correction of an error in the gain on extinguishment of debt reported in our second quarter Form 6-K,
filed with the SEC on September 3, 2024, due to incorrect valuation methodology and assumptions used on the ratio of
warrants to number of shares. The revised gain on extinguishment of debt should be $35.3 million instead of the
previously reported $77.3 million. In addition, $24.8 million of warrants were erroneously classified as equity that
should have been classified as liabilities, as the fixed-for-fixed criteria was not met until the three months ended
September 29, 2024.Consequently, interest expense, net should be $14.1 million instead of $10.1 million as reported
previously. Total effect on net loss attributable to the stockholders is $45.9 million.
©2024 Maxeon Solar Technologies, Ltd. All rights reserved. MAXEON is a registered trademark of Maxeon Solar Technologies, Ltd. Visit https://corp.maxeon.com/trademarks for more information.
MAXEON SOLAR TECHNOLOGIES, LTD.
CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited)
(In thousands, except for shares data)
As of
September 29, 2024 December 31, 2023
Assets
Current assets:
Cash and cash equivalents $51,223 $190,169
Restricted short-term marketable securities 1,399 1,403
Accounts receivable, net 18,625 62,687
Inventories 149,456 308,948
Prepaid expenses and other current assets 41,412 55,812
Total current assets $262,115 $619,019
Property, plant and equipment, net 138,707 280,025
Operating lease right of use assets 17,574 22,824
Other intangible assets, net 587 3,352
Other long-term assets 22,379 68,910
Total assets $441,362 $1,002,009
Liabilities and Equity
Current liabilities:
Accounts payable $116,161 $153,020
Accrued liabilities 78,654 113,456
Contract liabilities, current portion 31,841 134,171
Short-term debt 2,193 25,432
Convertible debt, current portion 801
Operating lease liabilities, current portion 7,427 5,857
Total current liabilities $237,077 $431,936
Long-term debt 855 1,203
Contract liabilities, net of current portion 48,038 113,564
Operating lease liabilities, net of current portion 20,257 19,611
Convertible debt 286,971 385,558
Deferred tax liabilities 6,994 7,001
Other long-term liabilities 46,904 38,494
Total liabilities $647,096 $997,367
Commitments and contingencies
Equity:
Common stock, no par value (1,522,138,260 and 53,959,109 issued and
$ -
$ -
outstanding as of September 29, 2024 and December 31, 2023, respectively)
Additional paid-in capital 1,107,063 811,361
Accumulated deficit (1,304,415) (796,092)
Accumulated other comprehensive loss (13,712) (16,378)
Equity attributable to the Company (211,064) (1,109)
Noncontrolling interests 5,330 5,751
Total equity (205,734) 4,642
Total liabilities and equity $441,362 $1,002,009
MAXEON SOLAR TECHNOLOGIES, LTD.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
(In thousands, except per share data)
Three Months Ended Nine Months Ended
September 29, 2024 October 1, 2023 September 29, 2024 October 1, 2023
Revenue $88,560 $227,630 $460,235 $894,335
Cost of revenue 267,661 224,902 661,992 781,759
Gross (loss) profit (179,101) 2,728 (201,757) 112,576
Operating expenses:
Research and development 8,962 11,627 28,284 35,715
Sales, general and administrative 38,296 31,771 126,330 97,291
Restructuring charges 105,960 23,164 108,942 23,307
Total operating expenses 153,218 66,562 263,556 156,313
Operating loss (332,319) (63,834) (465,313) (43,737)
Other (expense) income, net
Interest expense (12,170) (10,464) (36,302) (*) (32,337)
Interest income 386 2,730 1,713 6,701
Gain on extinguishment of debt - 35,326 (*)
Other, net (30,702) (36,904) (20,828) (7,911)
Other expense, net (42,486) (44,638) (20,091) (33,547)
Loss before income taxes and equity in losses of unconsolidated investees (374,805) (108,472) (485,404) (77,284)
(Provision for) benefit from income taxes (18,925) 2,554 (23,340) (9,323)
Equity in losses of unconsolidated investees - (2,457) (2,811)
Net loss (393,730) (108,375) (508,744) (89,418)
Net (income) loss attributable to noncontrolling interests (214) 118 421 (77)
Net loss attributable to the stockholders $(393,944) $(108,257) $(508,323) $(89,495)
Net loss per share attributable to stockholders:
Basic and diluted $(0.47) $(2.21) $(1.63) $(1.98)
Weighted average shares used to compute net loss per share:
Basic and diluted 832,620 48,925 311,441 45,157
(*) Reflects the correction of an error in the gain on extinguishment of debt reported in our second quarter Form 6-K,
filed with the SEC on September 3, 2024, due to incorrect valuation methodology and assumptions used on the ratio of
warrants to number of shares. The revised gain on extinguishment of debt should be $35.3 million instead of the
previously reported $77.3 million. In addition, $24.8 million of warrants were erroneously classified as equity that
should have been classified as liabilities, as the fixed-for-fixed criteria was not met until the three months ended
September 29, 2024. Consequently, interest expense should be $14.6 million instead of $10.6 million as reported
previously. Total effect on net loss attributable to the stockholders is $45.9 million.
MAXEON SOLAR TECHNOLOGIES, LTD.
CONDENSED CONSOLIDATED STATEMENTS OF EQUITY
(unaudited)
(In thousands)
Shares Amount Additional Accumulated Accumulated Equity Noncontrolling Total
Paid In Deficit Other Attributable Equity
Capital Comprehensive to the Interests
Loss Company
Balance at December 31, 2023 53,959
$ - $811,361 $(796,092) $(16,378) $(1,109) $5,751 $4,642
Net loss - (80,148) (80,148) (56) (80,204)
Issuance of common stock for stock-based compensation 725
Recognition of stock-based compensation - 7,027 7,027 7,027
Other comprehensive income - 1,019 1,019 1,019
Balance at March 31, 2024 54,684
$ - $818,388 $(876,240) $(15,359) $(73,211) $5,695 $(67,516)
Net loss -
$ -
$ - $(34,231)
$ - $(34,231) $(579) $(34,810)
Issuance of common stock for stock-based compensation 201
Issuance of common stock for settlement of obligation 821 4,140 4,140 4,140
Recognition of stock-based compensation - 5,865 5,865 5,865
Other comprehensive loss - (155) (155) (155)
Balance at June 30, 2024 55,706 828,393 * (910,471) * (15,514) (97,592) 5,116 (92,476)
Net loss (income) - (393,944) (393,944) 214 (393,730)
Issuance of common stock, net of issuance cost 829,187 95,101 95,101 95,101
Issuance of common stock for settlement of obligation 19,076 2,829 2,829 2,829
Issuance of common stock for stock-based compensation 363
Issuance of common stock through exercise of warrants 134,566 28,162 28,162 28,162
Reclassification of warrants from liability to equity - 47,384 47,384 47,384
Conversion of convertible debts to equity 483,240 100,463 100,463 100,463
Recognition of stock-based compensation - 4,731 4,731 4,731
Other comprehensive income - 1,802 1,802 1,802
Balance at September 29, 2024 1,522,138 1,107,063 (1,304,415) (13,712) (211,064) 5,330 (205,734)
Shares Amount Additional Accumulated Accumulated Equity Noncontrolling Total
Paid In Deficit Other Attributable Interests Equity
Capital Comprehensive to the
Loss Company
Balance at January 1, 2023 45,033
$ - $584,808 $(520,263) $(22,108) $42,437 $5,633 $48,070
Net loss - 20,271 20,271 147 20,418
Issuance of common stock for stock-based compensation 377
Distribution to noncontrolling interest -
Recognition of stock-based compensation - 4,033 4,033 4,033
Other comprehensive income - 1,627 1,627 1,627
Balance at April 2, 2023 45,410
$ - $588,841 $(499,992) $(20,481) $68,368 $5,780 $74,148
Net (loss) income - (1,509) (1,509) 48 (1,461)
Issuance of common stock, net of issuance cost 7,120 193,491 193,491 193,491
Issuance of common stock for stock-based compensation 116
Recognition of stock-based compensation - 6,980 6,980 6,980
Other comprehensive loss - (65) (65) (65)
Balance at July 2, 2023 52,646 789,312 (501,501) (20,546) 267,265 5,828 273,093
Net loss - (108,257) (108,257) (118) (108,375)
Issuance of common stock for stock-based compensation 134
Recognition of stock-based compensation - 5,906 5,906 5,906
Other comprehensive income - 4,936 4,936 4,936
Balance at October 1, 2023 52,780 795,218 (609,758) (15,610) 169,850 5,710 175,560
(*) Reflects the correction of an error in the gain on extinguishment of debt reported in our second quarter Form 6-K,
filed with the SEC on September 3, 2024, due to incorrect valuation methodology and assumptions used on the ratio of
warrants to number of shares. The revised gain on extinguishment of debt should be $35.3 million instead of the
previously reported $77.3 million. In addition, $24.8 million of warrants were erroneously classified as equity that
should have been classified as liabilities, as the fixed-for-fixed criteria was not met until the three months ended
September 29, 2024.Consequently, interest expense, net should be $14.1 million instead of $10.1 million as reported
previously. Total effect on net loss attributable to the stockholders is $45.9 million.
MAXEON SOLAR TECHNOLOGIES, LTD.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
(In thousands)
Nine Months Ended
September 29, 2024 October 1, 2023
Cash flows from operating activities
Net loss $(508,744) $(89,418)
Adjustments to reconcile net loss to operating cash flows
Depreciation and amortization 37,162 43,579
Stock-based compensation 18,003 17,145
Non-cash interest expense 7,850 7,042
Gain on disposal of equity in unconsolidated investees (24,083)
Equity in losses of unconsolidated investees - 2,811
Deferred income taxes 17,710 (472)
Loss on impairment of property, plant and equipment 157,673 442
Loss on impairment of operating lease right of use assets 7,432
Loss on impairment of intangible assets 2,167
Loss on impairment of goodwill 7,879
Loss on disposal of property, plant and equipment 260 33
Write-off of other assets 21,401
Gain on debt extinguishment (35,326)
Remeasurement loss on prepaid forward 16,082 8,570
Remeasurement loss on warrants 4,966
Provision for (reversal of) expected credit losses 11,504 (208)
Provision for (utilization of) inventory reserves 132,474 (1,351)
Other, net 1,807 271
Changes in operating assets and liabilities
Accounts receivable 35,132 (37,353)
Inventories 23,953 (110,646)
Prepaid expenses and other assets 1,139 5,498
Operating lease right-of-use assets 4,347 3,766
Advances to suppliers - 730
Accounts payable and other accrued liabilities (31,913) (52,808)
Contract liabilities (167,670) 27,404
Operating lease liabilities (4,313) (2,917)
Net cash used in operating activities (263,108) (177,882)
Cash flows from investing activities
Purchases of property, plant and equipment (48,052) (55,796)
Proceeds from disposal of equity in unconsolidated investees 24,000
Purchases of intangible assets (10) (136)
Proceeds from maturity of short-term securities - 76,000
Purchase of short-term securities - (60,000)
Purchase of restricted short-term marketable securities - (10)
Proceeds from maturity of restricted short-term marketable securities - 971
Proceeds from disposal of property, plant and equipment 664
Proceeds from disposal of asset held for sale 462
Net cash used in investing activities (22,936) (38,971)
Cash flows from financing activities
Proceeds from debt 51,249 148,992
Repayment of debt (74,572) (175,942)
Repayment of finance lease obligations (386) (477)
Net proceeds from issuance and modification of convertible notes and warrants 71,418
Net proceeds from issuance of common stock 97,270 193,531
Net cash provided by financing activities 144,979 166,104
Effect of exchange rate changes on cash, cash equivalents and restricted cash (94) 124
Net decrease in cash, cash equivalents and restricted cash (141,159) (50,625)
Cash, cash equivalents and restricted cash, beginning of period 195,511 267,961
Cash, cash equivalents and restricted cash, end of period $54,352 $217,336
Non-cash transactions
Property, plant and equipment purchases funded by liabilities $5,755 $10,158
Interest paid in shares 6,969
Interest paid by issuance of convertible notes 7,977
Right-of-use assets obtained in exchange for lease obligations 8,025 10,743
The following table reconciles our cash and cash equivalents and restricted cash reported on our Condensed Consolidated Balance Sheets and the cash, cash equivalents and restricted cash reported on our Condensed Consolidated Statements of Cash Flows as of September 29, 2024 and October 1, 2023:
(In thousands) September 29, 2024 October 1, 2023
Cash and cash equivalents $51,223 $208,100
Restricted cash, current portion, included in Prepaid 3,028 9,234
expenses and other current assets
Restricted cash, net of current portion, included 101 2
in Other long-term assets
Total cash, cash equivalents and restricted cash shown $54,352 $217,336
in Condensed Consolidated Statements of Cash Flows
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SOURCE Maxeon Solar Technologies, Ltd.
