UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
___________________
FORM
8-K
___________________
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of the
Securities
Exchange Act of 1934
Date
of report (Date of earliest event reported): October 22, 2009
___________________
|
SunPower
Corporation
|
|
(Exact
Name of Registrant as Specified in
Charter)
|
___________________
|
Delaware
|
001-34166
|
94-3008969
|
|
(State
or Other Jurisdiction
|
(Commission
|
(IRS
Employer
|
|
of
Incorporation)
|
File
No.)
|
Identification
No.)
|
|
3939
North First Street, San Jose, California 95134
|
|
(Address
of Principal Executive Offices) (Zip
Code)
|
Registrant’s
telephone number, including area code: (408) 240-5500
|
N/A
|
|
(Former
Name or Former Address, if Changed Since Last
Report)
|
___________________
|
Check
the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any
of the following provisions (see General Instruction
A.2. below):
|
|
|
|
Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
|
|
|
Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
|
|
|
Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
|
|
|
Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
|
|
Item 2.02.
|
Results
of Operations and Financial
Condition.
|
On
October 22, 2009, SunPower Corporation issued the press release attached as
Exhibit 99.1 hereto announcing its results of operations for the third quarter
of 2009.
The
information contained in Item 2.02 and Item 9.01 of this report on Form 8-K and
Exhibit 99.1 hereto shall not be deemed "filed" for purposes of Section 18 of
the Securities Exchange Act of 1934 (the "Exchange Act") or otherwise subject to
the liabilities of that section, nor shall it be deemed incorporated by
reference in any filing under the Securities Act of 1933 or the Exchange Act,
except as expressly set forth by specific reference in such filing.
|
Item 9.01.
|
Financial
Statements and Exhibits.
|
(d)
Exhibits
|
Exhibit No.
|
Description
|
|
|
99.1
|
Press
Release dated October 22, 2009
|
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
|
SUNPOWER
CORPORATION
|
|
|
Date:
October 22, 2009
|
By:
/s/ DENNIS V. ARRIOLA
|
|
Name:
Dennis V. Arriola
|
|
|
Title:
Senior Vice President and Chief Financial
Officer
|
|
Exhibit No.
|
Description
|
|
|
99.1
|
Press
Release dated October 22, 2009
|
FOR
IMMEDIATE RELEASE
SunPower
Contacts:
Investors
Bob
Okunski
408-240-5447
Bob.Okunski@sunpowercorp.com
Media
Helen
Kendrick
408-240-5585
Helen.Kendrick@sunpowercorp.com
SunPower
Reports Third-Quarter 2009 Results
|
·
|
Record
Q3 2009 revenue of $466 million, record production of 110
megawatts
|
|
·
|
GAAP
EPS of $0.13 and non-GAAP EPS of
$0.42
|
|
·
|
24-megawatt
Montalto power plant in Italy financed – expected completion Q4
2009
|
|
·
|
Grew
global dealer network to approximately 900
partners
|
|
·
|
Signed
a 14-megawatt supply agreement with Casino Group in
France
|
|
·
|
Commissioned
25-megawatt project for Florida Power & Light and began construction
of an additional 10-megawatt power
plant
|
|
·
|
Fab
3 construction in Malaysia on plan; production scheduled for the second
half of 2010
|
|
·
|
Further
strengthened balance sheet – more than $800 million in cash and
investments
|
SAN JOSE, Calif., -- October 22,
2009 – SunPower Corp. (NASDAQ: SPWRA, SPWRB) today announced financial
results for its 2009 third quarter which ended September 27,
2009. Revenue for the 2009 third quarter was $466 million which
compares to $298 million in the second quarter of 2009 and $378 million in the
third quarter of 2008. The company’s Components and Systems segments
accounted for 64% and 36% of third-quarter 2009 revenue,
respectively.
“Our
third-quarter results demonstrate the value of our diversified market and
vertical integration strategy as we benefitted from our growing dealer channel
and successfully executed on our large scale project commitments,” said Tom
Werner, SunPower’s CEO. “We further expanded our dealer partner
network into countries such as France, Korea and Canada, and added new partners
to our existing markets. As we build our utility and power plant
business around the world, our superior technology performance and rapid
deployment capability continues to make SunPower a preferred partner with
customers and financiers.
“Operationally,
our global Engineering, Procurement and Construction team achieved a new record
in the third quarter with more than 60 megawatt (MW) of SunPower power plants
under construction. The 25-MW DeSoto power plant, commissioned for
Florida Power & Light, has now surpassed Nellis Air Force Base as the
largest operating solar photovoltaic power plant in North America. In
Europe, the financing of our Montalto project, the largest power plant in Italy,
demonstrates SunPower’s bankability as a fully integrated
supplier. With strong market demand continuing, all of our
manufacturing facilities are now fully operational, resulting in unit cost
reductions in line with our plan,” concluded Werner.
On a
Generally Accepted Accounting Principles (GAAP) basis for the 2009 third
quarter, SunPower reported gross margin of 19.1%, operating income of $34.6
million and net income per diluted share of $0.13. GAAP net income
per share for the third quarter of 2009 includes $5.3 million, or $0.03 per
share, of non-cash interest charges associated with the adoption of the new
accounting guidance, which impacts how companies account for interest expense on
convertible bonds.
On a
non-GAAP basis, adjusted to exclude non-cash charges for amortization of
intangible assets of $4.1 million, stock-based compensation of $13.1 million and
non-cash interest expense of $5.3 million, SunPower reported total gross margin
of 20.7%. Operating income for the quarter was $52.1 million and net
income per share was $0.42. This compares with second-quarter 2009
non-GAAP gross margin of 22.6%, operating income of $26.8 million and $0.24 net
income per share. For the 2009 third quarter, the Components segment
non-GAAP gross margin was 23.4% and Systems segment gross margin was
16.0%.
2009
Guidance
The
company updated its fiscal year 2009 total company non-GAAP guidance as follows:
total revenue of $1.425 billion to $1.50 billion, net income per diluted share
of $1.15 to $1.25, capital expenditures of $200 million to $225 million, and
production of approximately 400 MW.
“The
company’s continued focus on working capital management is showing positive
results as we successfully managed inventory levels and ended the quarter with a
stronger balance sheet and more than $800 million in cash and investments,” said
Dennis Arriola, SunPower’s CFO. “Although the financing markets
remain challenging, we’re starting to see some improvement in the availability
of financing for our projects. By starting the fourth quarter with a
solid backlog of business and a growing pipeline of opportunities, we are
confident that SunPower will finish the year strongly and is well positioned for
growth in 2010.”
For
fiscal year 2009, the company expects the following total company GAAP results:
revenue of $1.425 billion to $1.50 billion and net income per diluted share of
$0.50 to $0.60. GAAP earnings per share guidance for 2009 includes a
$0.21 per share one-time, non-taxable gain related to the company’s
second-quarter 2009 capital raise and approximately $0.13 per share for non-cash
charges related to the company’s adoption of new accounting
guidance.
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 2009 performance on the
Events and Presentations section of the SunPower Investor Relations page at
http://investors.sunpowercorp.com/events.cfm. The capacity of power
plants in this release is described in approximate MW on an alternating current
(ac) basis.
About
SunPower
Founded
in 1985, SunPower Corp. (Nasdaq: SPWRA, SPWRB) designs, manufactures and
delivers the planet's most powerful solar technology broadly available today.
Residential, business, government and utility customers rely on the company's
experience and proven results to maximize return on investment. With
headquarters in San Jose, Calif., SunPower has offices in North America, Europe,
Australia and Asia. For more information, visit
www.sunpowercorp.com.
Forward-Looking
Statements
This
press release contains forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995. Forward-looking
statements are statements that do not represent historical facts and may be
based on underlying assumptions. The company uses words and phrases such as
“expected,” “plan,” “scheduled,” “growing,” “build,” “continues,” “will,”
“continuing,” “guidance,” “improvement,” “backlog,” “pipeline,” “growth,”
“improvement,” and “expects” to identify forward-looking statements in this
press release, including forward-looking statements regarding: (a)
completion of the Montalto project; (b) construction schedule for Fab 3; (c) the
company’s dealer channel; (d) the company’s utility and power plant business;
(e) the company’s status as a preferred partner with customers and financiers;
(f) market demand; (g) the company’s cost reduction plan; (h) GAAP and non-GAAP
fiscal year 2009 total revenue and net income per diluted share; (i)
availability of financing for projects; (j) backlog of business and pipeline of
opportunities; (k) 2009 expected production; and (l) non-cash interest charges
associated with the adoption of the new accounting guidance. Such
forward-looking statements are based on information available to the company as
of the date of this release and involve a number of risks and uncertainties,
some beyond the company’s control, that could cause actual results to differ
materially from those anticipated by these forward-looking statements, including
risks and uncertainties such as: (i) the company’s ability to obtain and
maintain an adequate supply of raw materials and components, as well as the
price it pays for such items; (ii) general business and economic conditions,
including seasonality of the industry; (iii) growth trends in the solar power
industry; (iv) the continuation of governmental and related economic incentives
promoting the use of solar power; (v) the improved availability of third-party
financing arrangements for the company’s customers; (vi) construction
difficulties or potential delays, including permitting and transmission access
and upgrades; (vii) the company’s ability to ramp new production lines and
realize expected manufacturing efficiencies; (viii) manufacturing difficulties
that could arise; (ix) the success of the company’s ongoing research and
development efforts to compete with other companies and competing technologies;
(x) unanticipated changes in the GAAP expense for non-cash charges related to
the adoption of new accounting guidance; and (xi) other risks described in the
company’s Annual Report on Form 10-K for the year ended December 28, 2008, its
Quarterly Report on Form 10-Q for the quarter ended June 29, 2009, and other
filings with the Securities and Exchange Commission. These forward-looking
statements should not be relied upon as representing the company's views as of
any subsequent date, and the company is under no obligation to, and expressly
disclaims any responsibility to, update or alter its forward-looking statements,
whether as a result of new information, future events or otherwise.
Segment
Reporting Information
For
third quarter 2009 reporting purposes, the Systems segment generally represents
products and services sold directly to the system
owner. Additionally, both SunPower and third-party solar panels sold
through the Systems segment channels are recorded as Systems segment revenue.
The Components segment primarily represents products sold to installers and
resellers.
Non-GAAP
Measures
To
supplement the consolidated financial results prepared under GAAP, SunPower uses
non-GAAP measures which are adjusted from the most directly comparable GAAP
results to exclude non-cash charges related to amortization of intangible
assets, stock-based compensation, impairment of long-lived assets and interest
expense, non-cash gain on purchased options related to the company’s convertible
debt offering, and its related tax effects. Management
does not consider these charges in evaluating the core operational activities of
SunPower. Management uses these non-GAAP measures internally to make
strategic decisions, forecast future results and evaluate SunPower’s current
performance. Most analysts covering SunPower use the non-GAAP
measures as well. Given management’s use of these non-GAAP measures,
SunPower believes these measures are important to investors in understanding
SunPower’s current and future operating results as seen through the eyes of
management. In addition, management believes these non-GAAP measures
are useful to investors in enabling them to better assess changes in SunPower’s
core business across different time periods. These non-GAAP measures
are not in accordance with or an alternative for GAAP financial data and may be
different from non-GAAP measures used by other companies.
Fiscal
Periods
The
Company reports on a fiscal-year basis and ends its quarters on the Sunday
closest to the end of the applicable calendar quarter, except in a 53-week
fiscal year, in which case the additional week falls into the fourth quarter of
that fiscal year. Fiscal year 2009 consists of 53 weeks while fiscal year 2008
consists of 52 weeks. The third quarter of fiscal 2009 ended on September 27,
2009 and the third quarter of fiscal 2008 ended on September 29,
2008.
# # #
SunPower
is a registered trademark of SunPower Corp. All other trademarks are the
property of their respective owners.
|
SUNPOWER
CORPORATION
|
||||||||
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
||||||||
|
(In
thousands)
|
||||||||
|
(Unaudited)
|
||||||||
|
Sep.
27,
|
Dec.
28,
|
|||||||
|
2009
|
2008
|
|||||||
|
ASSETS
|
||||||||
|
Cash
and cash equivalents
|
$
|
472,126
|
$
|
202,331
|
||||
|
Restricted
cash
|
320,788
|
175,277
|
||||||
|
Investments
|
9,222
|
40,756
|
||||||
|
Accounts
receivable, net
|
243,528
|
194,222
|
||||||
|
Costs
and estimated earnings in excess of billings
|
73,519
|
30,326
|
||||||
|
Inventories
|
239,211
|
251,542
|
||||||
|
Prepaid
expenses and other assets
|
197,131
|
175,005
|
||||||
|
Advances
to suppliers
|
137,853
|
162,610
|
||||||
|
Property,
plant and equipment, net
|
695,409
|
629,247
|
||||||
|
Goodwill
and other intangible assets, net
|
227,444
|
236,210
|
||||||
|
Total
assets
|
$
|
2,616,231
|
$
|
2,097,526
|
||||
|
LIABILITIES
AND STOCKHOLDERS' EQUITY
|
||||||||
|
Accounts
payable
|
$
|
232,547
|
$
|
263,241
|
||||
|
Accrued
and other liabilities
|
195,561
|
191,140
|
||||||
|
Long-term
debt
|
188,915
|
54,598
|
||||||
|
Convertible
debt
|
530,956
|
357,173
|
||||||
|
Billings
in excess of costs and estimated earnings
|
17,484
|
11,806
|
||||||
|
Customer
advances
|
97,142
|
110,394
|
||||||
|
Total
liabilities
|
1,262,605
|
988,352
|
||||||
|
Stockholders'
equity
|
1,353,626
|
1,109,174
|
||||||
|
Total
liabilities and stockholders' equity
|
$
|
2,616,231
|
$
|
2,097,526
|
||||
|
SUNPOWER
CORPORATION
|
||||||||||||||||||||
|
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
|
||||||||||||||||||||
|
(In
thousands, except per share data)
|
||||||||||||||||||||
|
(Unaudited)
|
||||||||||||||||||||
|
THREE
MONTHS ENDED
|
NINE
MONTHS ENDED
|
|||||||||||||||||||
|
Sep.
27,
|
Jun.
28,
|
Sep.
28,
|
Sep.
27,
|
Sep.
28,
|
||||||||||||||||
|
2009
|
2009
|
2008
|
2009
|
2008
|
||||||||||||||||
|
Revenue:
|
||||||||||||||||||||
|
Systems
|
$
|
168,412
|
$
|
108,724
|
$
|
193,330
|
$
|
383,233
|
$
|
642,774
|
||||||||||
|
Components
|
297,895
|
188,920
|
184,170
|
594,505
|
391,178
|
|||||||||||||||
|
466,307
|
297,644
|
377,500
|
977,738
|
1,033,952
|
||||||||||||||||
|
Cost
of revenue:
|
||||||||||||||||||||
|
Cost
of systems revenue
|
144,859
|
91,793
|
158,829
|
325,003
|
511,316
|
|||||||||||||||
|
Cost
of components revenue
|
232,164
|
147,388
|
113,358
|
457,240
|
271,288
|
|||||||||||||||
|
377,023
|
239,181
|
272,187
|
782,243
|
782,604
|
||||||||||||||||
|
Gross
margin
|
89,284
|
58,463
|
105,313
|
195,495
|
251,348
|
|||||||||||||||
|
Operating
expenses:
|
||||||||||||||||||||
|
Research
and development
|
8,250
|
6,853
|
6,049
|
23,067
|
15,504
|
|||||||||||||||
|
Selling,
general and administrative
|
46,473
|
41,755
|
46,075
|
130,511
|
123,141
|
|||||||||||||||
|
Total
operating expenses
|
54,723
|
48,608
|
52,124
|
153,578
|
138,645
|
|||||||||||||||
|
Operating
income
|
34,561
|
9,855
|
53,189
|
41,917
|
112,703
|
|||||||||||||||
|
Other
income (expense):
|
||||||||||||||||||||
|
Gain
on purchased options
|
—
|
21,193
|
—
|
21,193
|
—
|
|||||||||||||||
|
Interest
and other income (expense), net
|
(9,269
|
)
|
(5,956
|
)
|
(8,784
|
)
|
(27,319
|
)
|
(17,597
|
)
|
||||||||||
|
Other
income (expense), net
|
(9,269
|
)
|
15,237
|
(8,784
|
)
|
(6,126
|
)
|
(17,597
|
)
|
|||||||||||
|
Income
before income taxes and equity in earnings of unconsolidated
investees
|
25,292
|
25,092
|
44,405
|
35,791
|
95,106
|
|||||||||||||||
|
Income
tax provision
|
15,088
|
4,054
|
21,856
|
10,580
|
31,275
|
|||||||||||||||
|
Income
before equity in earnings of unconsolidated investees
|
10,204
|
21,038
|
22,549
|
25,211
|
63,831
|
|||||||||||||||
|
Equity
in earnings of unconsolidated investees, net of taxes
|
2,627
|
3,133
|
2,132
|
7,005
|
4,006
|
|||||||||||||||
|
Net
income
|
$
|
12,831
|
$
|
24,171
|
$
|
24,681
|
$
|
32,216
|
$
|
67,837
|
||||||||||
|
Net
income per share of class A and class B common stock:
|
||||||||||||||||||||
|
-
Basic
|
$
|
0.14
|
$
|
0.27
|
$
|
0.30
|
$
|
0.36
|
$
|
0.84
|
||||||||||
|
-
Diluted
|
$
|
0.13
|
$
|
0.26
|
$
|
0.29
|
$
|
0.35
|
$
|
0.80
|
||||||||||
|
Weighted-average
shares:
|
||||||||||||||||||||
|
-
Basic
|
94,668
|
90,873
|
80,465
|
89,764
|
79,614
|
|||||||||||||||
|
-
Diluted
|
96,319
|
98,412
|
84,064
|
91,513
|
83,477
|
|||||||||||||||
|
SUNPOWER
CORPORATION
|
||||||||||||||||||||
|
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
||||||||||||||||||||
|
(In
thousands)
|
||||||||||||||||||||
|
(Unaudited)
|
||||||||||||||||||||
|
THREE
MONTHS ENDED
|
NINE
MONTHS ENDED
|
|||||||||||||||||||
|
Sep.
27,
|
Jun.
28,
|
Sep.
28,
|
Sep.
27,
|
Sep.
28,
|
||||||||||||||||
|
2009
|
2009
|
2008
|
2009
|
2008
|
||||||||||||||||
|
Cash
flows from operating activities:
|
||||||||||||||||||||
|
Net
income
|
$
|
12,831
|
$
|
24,171
|
$
|
24,681
|
$
|
32,216
|
$
|
67,837
|
||||||||||
|
Adjustments
to reconcile net income to net cash provided by operating
activities:
|
||||||||||||||||||||
|
Stock-based
compensation
|
13,074
|
11,647
|
18,911
|
34,204
|
52,026
|
|||||||||||||||
|
Depreciation
|
21,414
|
20,569
|
13,688
|
60,348
|
35,741
|
|||||||||||||||
|
Amortization
of other intangible assets
|
4,146
|
4,098
|
4,201
|
12,296
|
12,552
|
|||||||||||||||
|
Impairment
of long-lived assets
|
190
|
489
|
(2,353
|
)
|
1,997
|
3,136
|
||||||||||||||
|
Non-cash
interest expense
|
5,250
|
5,915
|
4,038
|
16,186
|
12,717
|
|||||||||||||||
|
Amortization
of debt issuance costs
|
733
|
1,184
|
537
|
2,454
|
1,611
|
|||||||||||||||
|
Gain
on purchased options
|
-
|
(21,193
|
)
|
-
|
(21,193
|
)
|
-
|
|||||||||||||
|
Equity
in earnings of unconsolidated investees
|
(2,627
|
)
|
(3,133
|
)
|
(2,132
|
)
|
(7,005
|
)
|
(4,006
|
)
|
||||||||||
|
Excess
tax benefits from stock-based award activity
|
(12,134
|
)
|
(2,610
|
)
|
(19,260
|
)
|
(14,744
|
)
|
(33,899
|
)
|
||||||||||
|
Deferred
income taxes and other tax liabilities
|
10,151
|
(3,505
|
)
|
19,658
|
277
|
29,738
|
||||||||||||||
|
Changes
in operating assets and liabilities, net of effect of
acquisitions:
|
||||||||||||||||||||
|
Accounts
receivable
|
(18,794
|
)
|
(65,422
|
)
|
47,808
|
(43,285
|
)
|
(55,324
|
)
|
|||||||||||
|
Costs
and estimated earnings in excess of billings
|
(60,787
|
)
|
23,168
|
(7,556
|
)
|
(41,416
|
)
|
(17,700
|
)
|
|||||||||||
|
Inventories
|
28,977
|
87,807
|
19,498
|
20,914
|
(48,301
|
)
|
||||||||||||||
|
Prepaid
expenses and other assets
|
13,938
|
(35,291
|
)
|
(4,604
|
)
|
(9,440
|
)
|
(29,636
|
)
|
|||||||||||
|
Advances
to suppliers
|
3,435
|
13,449
|
15,461
|
24,877
|
19,102
|
|||||||||||||||
|
Accounts
payable and other accrued liabilities
|
98,997
|
(101,114
|
)
|
(5,853
|
)
|
(31,345
|
)
|
76,513
|
||||||||||||
|
Billings
in excess of costs and estimated earnings
|
(33,479
|
)
|
42,968
|
(21,178
|
)
|
4,877
|
(60,064
|
)
|
||||||||||||
|
Customer
advances
|
(5,553
|
)
|
774
|
41,754
|
(13,639
|
)
|
45,884
|
|||||||||||||
|
Net
cash provided by operating activities
|
79,762
|
3,971
|
147,299
|
28,579
|
107,927
|
|||||||||||||||
|
Cash
flows from investing activities:
|
||||||||||||||||||||
|
Increase
in restricted cash and cash equivalents
|
(103,247
|
)
|
(33,151
|
)
|
(26,202
|
)
|
(145,583
|
)
|
(42,153
|
)
|
||||||||||
|
Purchases
of property, plant and equipment
|
(38,426
|
)
|
(59,566
|
)
|
(55,224
|
)
|
(150,093
|
)
|
(150,302
|
)
|
||||||||||
|
Proceeds
from sale of equipment to third-party
|
1,976 | 7,902 |
—
|
9,878 |
—
|
|||||||||||||||
|
Purchases
of available-for-sale securities
|
—
|
—
|
(14,778
|
)
|
—
|
(65,748
|
)
|
|||||||||||||
|
Proceeds
from sales or maturities of available-for-sale securities
|
9,867
|
1,501
|
12,027
|
29,545
|
133,948
|
|||||||||||||||
|
Cash
paid for acquisitions, net of cash acquired
|
—
|
—
|
(4,827
|
)
|
—
|
(18,311
|
)
|
|||||||||||||
|
Cash
paid for investments in joint ventures and other non-public
companies
|
—
|
—
|
(2,000
|
)
|
—
|
(24,625
|
)
|
|||||||||||||
|
Net
cash used in investing activities
|
(129,830
|
)
|
(83,314
|
)
|
(91,004
|
)
|
(256,253
|
)
|
(167,191
|
)
|
||||||||||
|
Cash
flows from financing activities:
|
||||||||||||||||||||
|
Proceeds
from issuance of long-term debt, net of issuance costs
|
54,701
|
29,773
|
—
|
137,735
|
—
|
|||||||||||||||
|
Proceeds
from issuance of convertible debt, net of issuance costs
|
—
|
225,018
|
—
|
225,018
|
—
|
|||||||||||||||
|
Proceeds
from offering of class A common stock, net of offering
expenses
|
(114
|
)
|
218,895
|
—
|
218,781
|
—
|
||||||||||||||
|
Cash
paid for repurchased convertible debt
|
(7,687
|
)
|
(67,949
|
)
|
—
|
(75,636
|
)
|
—
|
||||||||||||
|
Cash
paid for purchased options
|
—
|
(97,336
|
)
|
—
|
(97,336
|
)
|
—
|
|||||||||||||
|
Proceeds
from warrant transactions
|
—
|
71,001
|
—
|
71,001
|
—
|
|||||||||||||||
|
Proceeds
from exercise of stock options
|
570
|
442
|
1,451
|
1,408
|
3,786
|
|||||||||||||||
|
Excess
tax benefits from stock-based award activity
|
12,134
|
2,610
|
19,260
|
14,744
|
33,899
|
|||||||||||||||
|
Purchases
of stock for tax withholding obligations on vested restricted
stock
|
(586
|
)
|
(763
|
)
|
(1,659
|
)
|
(3,708
|
)
|
(5,853
|
)
|
||||||||||
|
Net
cash provided by financing activities
|
59,018
|
381,691
|
19,052
|
492,007
|
31,832
|
|||||||||||||||
|
Effects
of exchange rate changes on cash and equivalents
|
6,341
|
5,377
|
(8,273
|
)
|
5,462
|
(1,166
|
)
|
|||||||||||||
|
Net
increase (decrease) in cash and cash equivalents
|
15,291
|
307,725
|
67,074
|
269,795
|
(28,598
|
)
|
||||||||||||||
|
Cash
and cash equivalents at beginning of period
|
456,835
|
|
149,110
|
189,542
|
202,331
|
285,214
|
||||||||||||||
|
Cash
and cash equivalents at end of period
|
$
|
472,126
|
$
|
456,835
|
$
|
256,616
|
$
|
472,126
|
$
|
256,616
|
||||||||||
|
Non-cash
transactions:
|
||||||||||||||||||||
|
Additions
to property, plant and equipment included in accounts payable and other
accrued liabilities
|
$
|
—
|
$
|
—
|
$
|
42,942
|
$
|
—
|
$
|
46,780
|
||||||||||
|
Non-cash
interest expense capitalized and added to the cost of qualified
assets
|
873
|
1,510
|
2,547
|
4,456
|
6,367
|
|||||||||||||||
|
Issuance
of common stock for purchase acquisition
|
—
|
1,471
|
3,054
|
1,471
|
3,054
|
|||||||||||||||
|
Change
in goodwill relating to adjustments to acquired net assets
|
—
|
—
|
—
|
—
|
231
|
|||||||||||||||
| (In thousands, except per share data) | |||||||||||||||||||||||||||||||||||||||||
|
THREE
MONTHS ENDED
|
NINE
MONTHS ENDED
|
THREE
MONTHS ENDED
|
NINE
MONTHS ENDED
|
||||||||||||||||||||||||||||||||||||||
|
Sep.
27,
|
Jun.
28,
|
Sep.
28,
|
Sep.
27,
|
Sep.
28,
|
Sep.
27,
|
Jun.
28,
|
Sep.
28,
|
Sep.
27,
|
Sep.
28,
|
||||||||||||||||||||||||||||||||
|
2009
|
2009
|
2008
|
2009
|
2008
|
2009
|
2009
|
2008
|
2009
|
2008
|
||||||||||||||||||||||||||||||||
|
(Presented
on a GAAP Basis)
|
(Presented
on a non-GAAP Basis)
|
||||||||||||||||||||||||||||||||||||||||
|
Gross
margin
|
$
|
89,284
|
$
|
58,463
|
$
|
105,313
|
$
|
195,495
|
$
|
251,348
|
$
|
96,753
|
$
|
67,128
|
$
|
110,093
|
$
|
215,745
|
$
|
276,812
|
|||||||||||||||||||||
|
Operating
income
|
$
|
34,561
|
$
|
9,855
|
$
|
53,189
|
$
|
41,917
|
$
|
112,703
|
$
|
52,146
|
$
|
26,840
|
$
|
73,259
|
$
|
90,522
|
$
|
179,961
|
|||||||||||||||||||||
|
Net
income per share of class A and class B common stock:
|
|||||||||||||||||||||||||||||||||||||||||
|
-Basic
|
$
|
0.14
|
$
|
0.27
|
$
|
0.30
|
$
|
0.36
|
$
|
0.84
|
$
|
0.42
|
$
|
0.25
|
$
|
0.59
|
$
|
0.75
|
$
|
1.62
|
|||||||||||||||||||||
|
-Diluted
|
$
|
0.13
|
$
|
0.26
|
$
|
0.29
|
$
|
0.35
|
$
|
0.80
|
$
|
0.42
|
$
|
0.24
|
$
|
0.57
|
$
|
0.73
|
$
|
1.55
|
|||||||||||||||||||||
About
SunPower’s Non-GAAP Financial Measures
To
supplement its consolidated financial results presented in accordance with GAAP,
SunPower uses non-GAAP measures which are adjusted from the most directly
comparable GAAP results to exclude non-cash charges related to amortization of
intangible assets, stock-based compensation, impairment of long-lived
assets and interest expense, non-cash gain on purchased options related to its
convertible debt offering, and the related tax effects of these non-GAAP
adjustments. The specific non-GAAP measures listed below are gross
margin, operating income and net income per share. Management believes that each
of these non-GAAP measures (gross margin, operating income and net income
per share) are useful to investors by enabling them to better assess changes in
each of these key elements of SunPower's results of operations across different
reporting periods on a consistent basis, independent of these non-cash items.
Thus, each of these non-GAAP financial measures provides investors
with another method for assessing SunPower's operating results in a manner
that is focused on its ongoing core operating performance, absent the effects of
amortization of intangible assets, stock-based compensation, impairment of
long-lived assets, interest expense and a gain on purchased options related to
its convertible debt offering. Management also uses these non-GAAP measures
internally to assess the business and financial performance of current and
historical results, for strategic decision making, forecasting future results
and evaluating the company's current performance. Many of the analysts
covering SunPower also use these non-GAAP measures in their analyses. These
non-GAAP measures are not in accordance with or an alternative for GAAP
financial data, the non-GAAP results should be reviewed together with the GAAP
results 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.
o Non-GAAP
gross margin. The use of this non-GAAP financial measure allows management to
evaluate the gross margin of the company's core businesses and trends across
different reporting periods on a consistent basis, independent of non-cash items
including amortization of intangible assets, stock-based compensation,
impairment of long-lived assets and interest expense. In addition, it is an
important component of management's internal performance measurement process as
it is used to assess the current and historical financial results of the
business, for strategic decision making, preparing budgets and forecasting
future results. Management presents this non-GAAP financial measure to enable
investors and analysts to evaluate SunPower’s revenue generation performance
relative to the direct costs of revenue of its core businesses.
o Non-GAAP
operating income. The use of this non-GAAP financial measure allows management
to evaluate the operating results of the company's core businesses and trends
across different reporting periods on a consistent basis, independent of
non-cash items including amortization of intangible assets, stock-based
compensation, impairment of long-lived assets and interest expense. In
addition, it is an important component of management's internal performance
measurement process as it is used to assess the current and historical financial
results of the business, for strategic decision making, preparing budgets and
forecasting future results. Management presents this non-GAAP financial measure
to enable investors and analysts to understand the results of operations of the
company’s core businesses and to compare results of operations on a more
consistent basis against that of other companies in the industry.
o Non-GAAP
net income per share. Management presents this non-GAAP financial measure to
enable investors and analysts to assess the company's operating results and
trends across different reporting periods on a consistent basis, independent of
non-cash items including amortization of intangible assets, stock-based
compensation, impairment of long-lived assets, interest expense, a gain on
purchased options related to its convertible debt offering and the tax effects
of these non-GAAP adjustments. In addition, investors and analysts can compare
SunPower's operating results on a more consistent basis against that of other
companies in the industry. It
should be noted that diluted weighted-average shares are determined on a GAAP
basis and the resulting share count is used for computing both GAAP and Non-GAAP
diluted net income per share.
Non-Cash
Items
o Amortization
of intangible assets. SunPower incurs amortization of intangible assets as a
result of acquisitions, which includes in-process research and development,
purchased technology, patents and tradenames. SunPower excludes these items
because these expenses are not reflective of ongoing operating results in the
period incurred. These amounts arise from prior acquisitions and have no direct
correlation to the operation of SunPower’s core businesses.
o Stock-based
compensation. Stock-based compensation relates primarily to SunPower stock
awards such as stock options and restricted stock. Stock-based compensation is a
non-cash expense that varies in amount from period to period and is dependent on
market forces that are difficult to predict. As a result of this
unpredictability, management excludes this item from its internal operating
forecasts and models. Management believes that non-GAAP measures adjusted for
stock-based compensation provide investors with a basis to measure the
company’s core performance against the performance of other companies without
the variability created by stock-based compensation.
o Impairment
of long-lived assets. SunPower incurred an impairment of long-lived assets in
the first quarter of fiscal 2008 totaling $5.5 million, which relates to the
discontinuation of its imaging detector product line and for the write-off of
certain solar manufacturing equipment which became obsolete due to new
processes. The costs associated with a $3.3 million write-off of certain solar
product manufacturing equipment were recovered from the vendor in the third
quarter of fiscal 2008. SunPower excluded this item because the expense is
not reflective of its ongoing operating results in the period incurred.
Excluding this data provides investors with a basis to compare the company’s
performance against the performance of other companies without non-cash expenses
such as impairment of long-lived assets.
o Non-cash
interest expense. Under new accounting guidance, SunPower separately
accounts for the liability and equity components of its convertible debt in a
manner that reflects interest expense equal to its non-convertible debt
borrowing rate. As a result, SunPower incurs interest expense that is
substantially higher than interest payable on its 1.25% senior convertible
debentures and 0.75% senior convertible debentures. SunPower excludes
non-cash interest expense because the expense is not reflective of its
ongoing financial results in the period incurred. Excluding this data provides
investors with a basis to compare the company’s performance against the
performance of other companies without non-cash interest expense.
o Gain
on purchased options related to SunPower’s convertible debt offering. In
connection with the issuance of its 4.75% senior convertible debentures in May
2009, SunPower entered into certain convertible debenture hedge transactions
with respect to its class A common stock intended to reduce the potential
dilution that would occur upon conversion of the debentures. The convertible
debenture hedge transactions consisting of call option instruments are deemed to
be a mark-to-market derivative during the period in which the over-allotment
option in favor of the debenture underwriters is unexercised. SunPower entered
into the underwriting agreement on April 28, 2009 and the debenture underwriters
exercised the over-allotment option on April 29, 2009. During the one-day period
that the underwriters’ over-allotment option was outstanding, SunPower’s class A
common stock price increased substantially. SunPower excluded the $21.2 million
gain relating to the purchased options from its non-GAAP results because it was
not realized in cash and it is not reflective of the company’s ongoing financial
results. Excluding this data provides investors with a basis to compare the
company’s performance against the performance of other companies without
non-cash income from a gain on purchased options.
o Tax
effect. This amount is used to present each of the amounts described above on an
after-tax basis with the presentation of non-GAAP net income per
share.
For more
information on these non-GAAP financial measures, please see the tables
captioned "Reconciliations of GAAP results of operations measures to non-GAAP
measures" set forth at the end of this release and 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
|
||||||||||||||||||||
|
(Unaudited)
|
||||||||||||||||||||
|
(In
thousands, except per share data)
|
||||||||||||||||||||
|
STATEMENT
OF OPERATIONS DATA:
|
||||||||||||||||||||
|
THREE
MONTHS ENDED
|
NINE
MONTHS ENDED
|
|||||||||||||||||||
|
Sep.
27,
|
Jun.
28,
|
Sep.
28,
|
Sep.
27,
|
Sep.
28,
|
||||||||||||||||
|
2009
|
2009
|
2008
|
2009
|
2008
|
||||||||||||||||
|
GAAP
gross margin
|
$
|
89,284
|
$
|
58,463
|
$
|
105,313
|
$
|
195,495
|
$
|
251,348
|
||||||||||
|
Amortization
of intangible assets
|
2,802
|
2,795
|
2,947
|
8,390
|
9,066
|
|||||||||||||||
|
Stock-based
compensation expense
|
4,302
|
4,630
|
4,875
|
9,755
|
13,718
|
|||||||||||||||
|
Impairment
of long-lived assets
|
—
|
—
|
(3,286
|
)
|
—
|
2,203
|
||||||||||||||
|
Non-cash
interest expense
|
365
|
1,240
|
244
|
2,105
|
477
|
|||||||||||||||
|
Non-GAAP
gross margin
|
$
|
96,753
|
$
|
67,128
|
$
|
110,093
|
$
|
215,745
|
$
|
276,812
|
||||||||||
|
GAAP
operating income
|
$
|
34,561
|
$
|
9,855
|
$
|
53,189
|
$
|
41,917
|
$
|
112,703
|
||||||||||
|
Amortization
of intangible assets
|
4,146
|
4,098
|
4,201
|
12,296
|
12,552
|
|||||||||||||||
|
Stock-based
compensation expense
|
13,074
|
11,647
|
18,911
|
34,204
|
52,026
|
|||||||||||||||
|
Impairment
of long-lived assets
|
—
|
—
|
(3,286
|
)
|
—
|
2,203
|
||||||||||||||
|
Non-cash
interest expense
|
365
|
1,240
|
244
|
2,105
|
477
|
|||||||||||||||
|
Non-GAAP
operating income
|
$
|
52,146
|
$
|
26,840
|
$
|
73,259
|
$
|
90,522
|
$
|
179,961
|
||||||||||
|
NET
INCOME PER SHARE:
|
||||||||||||||||||||
|
THREE
MONTHS ENDED
|
NINE
MONTHS ENDED
|
|||||||||||||||||||
|
Sep.
27,
|
Jun.
28,
|
Sep.
28,
|
Sep.
27,
|
Sep.
28,
|
||||||||||||||||
|
2009
|
2009
|
2008
|
2009
|
2008
|
||||||||||||||||
|
Basic:
|
||||||||||||||||||||
|
GAAP
net income per share
|
$
|
0.14
|
$
|
0.27
|
$
|
0.30
|
$
|
0.36
|
$
|
0.84
|
||||||||||
|
Reconciling
items:
|
||||||||||||||||||||
|
Amortization
of intangible assets
|
0.04
|
0.04
|
0.05
|
0.14
|
0.16
|
|||||||||||||||
|
Stock-based
compensation expense
|
0.13
|
0.13
|
0.23
|
0.38
|
0.64
|
|||||||||||||||
|
Impairment
of long-lived assets
|
—
|
—
|
(0.04
|
)
|
—
|
0.03
|
||||||||||||||
|
Non-cash
interest expense
|
0.06
|
0.06
|
0.05
|
0.18
|
0.16
|
|||||||||||||||
|
Gain
on purchased options
|
—
|
(0.23
|
)
|
—
|
(0.24
|
)
|
—
|
|||||||||||||
|
Tax
effect
|
0.05
|
(0.02
|
)
|
—
|
(0.07
|
)
|
(0.21
|
)
|
||||||||||||
|
Non-GAAP
net income per share
|
$
|
0.42
|
$
|
0.25
|
$
|
0.59
|
$
|
0.75
|
$
|
1.62
|
||||||||||
|
Diluted:
|
||||||||||||||||||||
|
GAAP
net income per share
|
$
|
0.13
|
$
|
0.26
|
$
|
0.29
|
$
|
0.35
|
$
|
0.80
|
||||||||||
|
Reconciling
items:
|
||||||||||||||||||||
|
Amortization
of intangible assets
|
0.04
|
0.04
|
0.05
|
0.13
|
0.15
|
|||||||||||||||
|
Stock-based
compensation expense
|
0.14
|
0.11
|
0.22
|
0.37
|
0.62
|
|||||||||||||||
|
Impairment
of long-lived assets
|
—
|
—
|
(0.04
|
)
|
—
|
0.03
|
||||||||||||||
|
Non-cash
interest expense
|
0.06
|
0.06
|
0.05
|
0.18
|
0.15
|
|||||||||||||||
|
Gain
on purchased options
|
—
|
(0.21
|
)
|
—
|
(0.23
|
)
|
—
|
|||||||||||||
|
Tax
effect
|
0.05
|
(0.02
|
)
|
—
|
(0.07
|
)
|
(0.20
|
)
|
||||||||||||
|
Non-GAAP
net income per share
|
$
|
0.42
|
$
|
0.24
|
$
|
0.57
|
$
|
0.73
|
$
|
1.55
|
||||||||||
|
Weighted-average
shares:
|
||||||||||||||||||||
|
GAAP
net income per share:
|
||||||||||||||||||||
|
-
Basic
|
94,668
|
90,873
|
80,465
|
89,764
|
79,614
|
|||||||||||||||
|
-
Diluted
|
96,319
|
98,412
|
84,064
|
91,513
|
83,477
|
|||||||||||||||
|
Non-GAAP
net income per share:
|
||||||||||||||||||||
|
-
Basic
|
94,668
|
90,873
|
80,465
|
89,764
|
79,614
|
|||||||||||||||
|
-
Diluted
|
96,319
|
98,412
|
84,064
|
91,513
|
83,477
|
|||||||||||||||
The
following supplemental data represents the individual charges and credits that
are excluded from SunPower’s non-GAAP financial measures for each period
presented in the Condensed Consolidated Statements of Operations contained
herein.
|
SUPPLEMENTAL
DATA
|
||||||||||||||||||||||||
|
(In
thousands)
|
||||||||||||||||||||||||
|
THREE
MONTHS ENDED
|
||||||||||||||||||||||||
|
September
27, 2009
|
||||||||||||||||||||||||
|
Gross
Margin
|
Research
and
development
|
Selling,
general
and
administrative
|
Interest
and other income (expense), net
|
Income
tax provision
|
||||||||||||||||||||
|
Systems
|
Components
|
|||||||||||||||||||||||
|
Amortization
of intangible assets
|
$
|
1,841
|
$
|
961
|
$
|
—
|
$
|
1,344
|
$
|
—
|
$
|
—
|
||||||||||||
|
Stock-based
compensation expense
|
1,494
|
2,808
|
1,736
|
7,036
|
—
|
—
|
||||||||||||||||||
|
Non-cash
interest expense
|
87
|
278
|
—
|
—
|
4,885
|
—
|
||||||||||||||||||
|
Tax
effect
|
—
|
—
|
—
|
—
|
—
|
4,969
|
||||||||||||||||||
|
$
|
3,422
|
$
|
4,047
|
$
|
1,736
|
$
|
8,380
|
$
|
4,885
|
$
|
4,969
|
|||||||||||||
|
June
28, 2009
|
||||||||||||||||||||||||
|
Gross
Margin
|
Research
and
development
|
Selling,
general
and
administrative
|
Interest
and other income (expense), net
|
Income
tax provision
|
||||||||||||||||||||
|
Systems
|
Components
|
|||||||||||||||||||||||
|
Amortization
of intangible assets
|
$
|
1,841
|
$
|
954
|
$
|
—
|
$
|
1,303
|
$
|
—
|
$
|
—
|
||||||||||||
|
Stock-based
compensation expense
|
1,474
|
3,156
|
1,482
|
5,535
|
—
|
—
|
||||||||||||||||||
|
Non-cash
interest expense
|
347
|
893
|
—
|
—
|
4,675
|
—
|
||||||||||||||||||
|
Gain
on purchased options
|
—
|
—
|
—
|
—
|
(21,193
|
)
|
—
|
|||||||||||||||||
|
Tax
effect
|
—
|
—
|
—
|
—
|
—
|
(1,873
|
)
|
|||||||||||||||||
|
$
|
3,662
|
$
|
5,003
|
$
|
1,482
|
$
|
6,838
|
$
|
(16,518
|
)
|
$
|
(1,873
|
)
|
|||||||||||
|
September
28, 2008
|
||||||||||||||||||||||||
|
Gross
Margin
|
Research
and
development
|
Selling,
general
and
administrative
|
Interest
and other income (expense), net
|
Income
tax provision
|
||||||||||||||||||||
|
Systems
|
Components
|
|||||||||||||||||||||||
|
Amortization
of intangible assets
|
$
|
1,841
|
$
|
1,106
|
$
|
—
|
$
|
1,254
|
$
|
—
|
$
|
—
|
||||||||||||
|
Stock-based
compensation expense
|
2,911
|
1,964
|
987
|
13,049
|
—
|
—
|
||||||||||||||||||
|
Impairment
of long-lived assets
|
(1,343
|
)
|
(1,943
|
)
|
—
|
—
|
—
|
—
|
||||||||||||||||
|
Non-cash
interest expense
|
100
|
144
|
—
|
—
|
3,794
|
—
|
||||||||||||||||||
|
Tax
effect
|
—
|
—
|
—
|
—
|
—
|
(337
|
)
|
|||||||||||||||||
|
$
|
3,509
|
$
|
1,271
|
$
|
987
|
$
|
14,303
|
$
|
3,794
|
$
|
(337
|
)
|
||||||||||||
|
NINE
MONTHS ENDED
|
||||||||||||||||||||||||
|
September
27, 2009
|
||||||||||||||||||||||||
|
Gross
Margin
|
Research
and
development
|
Selling,
general
and
administrative
|
Interest
and other income (expense), net
|
Income
tax provision
|
||||||||||||||||||||
|
Systems
|
Components
|
|||||||||||||||||||||||
|
Amortization
of intangible assets
|
$
|
5,523
|
$
|
2,867
|
$
|
—
|
$
|
3,906
|
$
|
—
|
$
|
—
|
||||||||||||
|
Stock-based
compensation expense
|
3,266
|
6,489
|
4,649
|
19,800
|
—
|
—
|
||||||||||||||||||
|
Non-cash
interest expense
|
664
|
1,441
|
—
|
—
|
14,081
|
—
|
||||||||||||||||||
|
Gain
on purchased options
|
—
|
—
|
—
|
—
|
(21,193
|
)
|
—
|
|||||||||||||||||
|
Tax
effect
|
—
|
—
|
—
|
—
|
—
|
(6,451
|
)
|
|||||||||||||||||
|
$
|
9,453
|
$
|
10,797
|
$
|
4,649
|
$
|
23,706
|
$
|
(7,112
|
)
|
$
|
(6,451
|
)
|
|||||||||||
|
September
28, 2008
|
||||||||||||||||||||||||
|
Gross
Margin
|
Research
and
development
|
Selling,
general
and
administrative
|
Interest
and other income (expense), net
|
Income
tax provision
|
||||||||||||||||||||
|
Systems
|
Components
|
|||||||||||||||||||||||
|
Amortization
of intangible assets
|
$
|
5,850
|
$
|
3,216
|
$
|
—
|
$
|
3,486
|
$
|
—
|
$
|
—
|
||||||||||||
|
Stock-based
compensation expense
|
7,661
|
6,057
|
2,770
|
35,538
|
—
|
—
|
||||||||||||||||||
|
Impairment
of long-lived assets
|
—
|
2,203
|
—
|
—
|
—
|
—
|
||||||||||||||||||
|
Non-cash
interest expense
|
201
|
276
|
—
|
—
|
12,240
|
—
|
||||||||||||||||||
|
Tax
effect
|
—
|
—
|
—
|
—
|
—
|
(16,591
|
)
|
|||||||||||||||||
|
$
|
13,712
|
$
|
11,752
|
$
|
2,770
|
$
|
39,024
|
$
|
12,240
|
$
|
(16,591
|
)
|
||||||||||||