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): July 19, 2007
SUNPOWER
CORPORATION
(Exact
Name of Registrant as Specified in Charter)
|
Delaware
|
|
000-51593
|
|
94-3008969
|
|
(State
or Other Jurisdiction
of
Incorporation)
|
|
(Commission
File No.)
|
|
(I.R.S.
Employer
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:
|
¨
|
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.
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Results
of Operations and Financial Condition.
|
On
July
19, 2007, SunPower Corporation (the "Registrant") issued the press release
attached as Exhibit 99.1 hereto announcing its results of operations for the
second quarter of 2007.
The
information contained in 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.
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Financial
Statements and Exhibits.
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(d)
Exhibits
The
following exhibit is furnished with this report on Form 8-K:
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Exhibit No.
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|
Description
|
|
99.1
|
|
SunPower
Corporation Press Release dated July 19,
2007
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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.
Date:
July 19, 2007
|
SunPower
Corporation
|
|||
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By:
|
|
/s/
Emmanuel Hernandez
|
|
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Name:
|
|
Emmanuel
Hernandez
|
|
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Title:
|
|
Chief
Financial Officer
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EXHIBIT
INDEX
|
Exhibit No.
|
|
Description
|
|
99.1
|
|
SunPower
Corporation Press Release dated July 19,
2007
|
FOR
IMMEDIATE RELEASE
Contacts:
Julie
Blunden
SunPower
Corporation
408-240-5577
Manny
Hernandez
SunPower
Corporation
408-240-5560
SunPower
Reports Second Quarter 2007 Results
| - |
Q2
2007 revenue of $173.8 million
|
| - |
500
megawatt solar cell Fab 3 planned, first line to begin production
in late
2009
|
| - |
2
gigawatt, 10-year silicon supply agreement signed with Hemlock in
July
|
| - |
330
megawatt solar cell Fab 2 complete, first line to begin production
third
quarter
|
| - |
300
megawatt solar panel factory, first line expected to begin production
late
2007
|
| - |
Next
generation SunPower Tracker technology
introduced
|
| - |
Construction
started at Nellis Air Force Base, largest U.S. solar photovoltaic
plant
|
| - |
Wal-Mart
and Macy’s signed contracts for SunPower AccessTM
power purchase agreements
|
SAN
JOSE, Calif., July 19, 2007
-
SunPower Corporation (NASDAQ: SPWR) today announced financial results for the
2007 second quarter ended July 1, 2007. This press release contains both GAAP
and non-GAAP financial information. Non-GAAP figures presented herein are
reconciled to the closest GAAP equivalent figures on the final page of this
press release.
On
a GAAP
basis, SunPower reported revenue for the second quarter of $173.8 million,
gross
margin of 17.1 percent, an operating loss of $13.2 million and a net loss of
$5.3 million resulting in a loss of $0.07 per share. These figures include
operating expenses for impairment of acquired intangible assets of $14.1 million
related to brand unification, amortization of purchase accounting intangible
assets of $7.6 million and non-cash, stock-based compensation of $13.2 million.
On
a
non-GAAP basis, which excludes non-cash purchase accounting revenue adjustments,
revenue for the second quarter was $174.1 million, a 22 percent increase from
the prior quarter’s revenue of $143.2 million. The Systems business segment
accounted for $104.3 million of the second quarter revenue, while the Components
business segment accounted for $69.7 million. For purposes of this segmentation,
the Systems segment generally represents products and services sold directly
to
the system owner, while the Components segment includes products sold to
installers and resellers. Revenue associated with SunPower solar panels sold
through the Systems segment is recorded in the Systems segment.
On
a
non-GAAP basis, adjusted to exclude non-cash charges for amortization and
impairment of intangible assets, purchase accounting revenue adjustment,
stock-based compensation and the related tax effects, SunPower realized a
combined gross margin of 23.0 percent in the second quarter of 2007, compared
with gross margin of 29.0 percent in the first quarter of 2007. Also, in the
second quarter of 2007, the Systems segment achieved a gross margin of 19.7
percent while the Components segment reported a gross margin of 27.8 percent.
Gross margin in the first quarter of 2007 included a non-recurring benefit
of
$1.1 million as well as a favorable geographic and products and services mix
in
our Systems segment.
On
a
non-GAAP basis, excluding the items noted above, SunPower achieved a combined
second quarter net income of $19.8 million, or $0.25 diluted earnings per share.
This compares with the prior quarter’s non-GAAP net income of $23.3 million, or
$0.29 diluted earnings per share.
“SunPower
again achieved outstanding quarterly results,” said Tom Werner, SunPower’s CEO.
“In the second quarter both our Components and our Systems business segments
performed well, now unified under the SunPower brand. Our robust revenue
performance reflects another quarter of increasing manufacturing volume coupled
with strong demand for our industry-leading components and systems. Increasing
sequential quarterly average selling prices (ASPs) for our solar cells and
solar
panels reflect the value of our high-efficiency solar technology.
“We
expect global silicon supply to increase during the next year as new capacity
comes on line,” said Werner. “We congratulate our partner, M.Setek, on the
success of their first polysilicon manufacturing plant which began production
in
the second quarter of this year. As our long-term silicon supply contracts
go into effect over the next year, we expect SunPower's silicon
costs on average to improve compared to current short-term pricing.
“We
continue to seek opportunities to expand our silicon supply portfolio,” said
Werner. “Yesterday we announced a major new silicon supply agreement with
Hemlock Semiconductor Corporation. This agreement is a threshold step in moving
along SunPower’s manufacturing expansion roadmap. We expect Hemlock’s silicon
will support our planned third solar cell fabrication facility, or cell Fab
3
which we expect to be capable of producing 500 megawatts or more of
high-efficiency solar cells annually, with production beginning on the first
line in that facility in late 2009. We expect to manufacture more than 2
gigawatts of solar cells with the polysilicon Hemlock will deliver to us from
2010 through 2019. In combination with our other agreements with silicon
suppliers we expect to have sufficient silicon supply to produce 110 megawatts
of solar cells in 2007, 250 megawatts or more in 2008, and 400 megawatts or
more
in 2009.”
SunPower’s
Silicon Supply Agreement Position and Capacity Expansion
Plan
|
2007
|
2008
|
2009
|
|
|
Beginning
of Year, Nameplate Capacity (megawatts)
|
108
|
207
|
372
|
|
Annual
Production Capacity Supported by Silicon Agreed to Date
(megawatts)
|
110
|
250+
|
400+
|
|
Annual
Cash Required for Silicon Prepayments in Advance of Delivery ($
millions)
|
$86.0
|
$56.0
|
$48.8
|
“Our
cell
Fab 1 now has an installed production capacity of 108 megawatts and our cell
Fab
2 will be inaugurated later this month as we begin production on schedule and
on
budget in the third quarter,” said Werner. “Fab 2 will exclusively manufacture
Gen 2 solar cells, already being mass-produced in Fab 1 with median efficiencies
above 22 percent. High-efficiency solar cell technology coupled with 165 micron
wafer thickness allowed us to achieve a polysilicon utilization rate of less
than seven grams of polysilicon per watt of factory output during the second
quarter. We anticipate that superior polysilicon utilization will offer us
powerful cost leverage.
“The
progress in our solar panel manufacturing factory has spurred us to begin
construction of a larger 300 megawatt, 10-line panel manufacturing factory,”
said Werner. “The first lines are scheduled to begin production in the fourth
quarter of 2007. This facility is located adjacent to cell Fab 1 in the
Philippines and will initially house the three solar panel manufacturing lines
we have on order. We expect to eventually move our first solar panel line to
this facility.
“Our
Systems segment also had an excellent quarter,” said Werner. “We have recently
announced a number of major agreements and milestones that demonstrate the
breadth and scope of our Systems business.”
| · |
Nevada:
Construction started on an approximately 15 megawatt central-station
solar
electric power plant located at Nellis Air Force Base outside of
Las
Vegas, Nevada
|
| · |
Spain:
Supply of 61 megawatts of solar power plant equipment and services
announced using SunPower Tracker solar systems
technology
|
| · |
California:
SunPower Access power purchase contracts signed with Macy’s and financing
completed with Morgan Stanley for Wal-Mart systems -- a combined
total of
more than 12 megawatts
|
| · |
Homebuilders:
Grupe Homes and Lennar Corp. reported that new solar homes using
SunPower
SunTile® sell approximately twice as fast as non-solar
homes
|
| · |
US:
Large-scale solar systems announced in New Jersey, Colorado, and
Hawaii,
extending SunPower’s lead as the largest solar systems provider in the
U.S.
|
| · |
Korea:
Construction completed on the 2.2 megawatt Mungyeong SP Solar Mountain
solar system
|
| · |
Technology:
Introduced next generation SunPower Tracker system utilizing a tilted
one-axis design to produce up to 30 percent more energy than fixed-tilt
systems of the same rated capacity
|
“We
also
expect production from our three new solar cell manufacturing lines in the
second half of 2007 to contribute to our continued growth,” said Werner. “Taking
into account the use of SunPower solar panels by our Systems segment, we expect
to generate the following non-GAAP results in the third quarter of 2007: revenue
of $205 million to $215 million; gross margin of 20 percent to 22 percent;
and
diluted net income per of share of $0.25 to $0.29. For the full year 2007,
we
expect the company to generate revenue of $730 million to $750 million and
diluted net income per share of $1.13 to $1.20.1
“As
a
result of robust bookings, we expect our Systems segment to be a larger
percentage of total company revenue in the third quarter of 2007,” said Werner.
“Due to this factor as well the effect of ramping two lines during the quarter,
we expect a slightly lower average gross margin for the company. However, we
expect total company gross margin to continue expanding again, commencing with
the fourth quarter of 2007. Our Systems segment is expected to generate the
following non-GAAP results in the third quarter: revenue of $130 million to
$135
million with expected gross margin of 18 percent to 20 percent, while we expect
our Components segment to generate revenue between $75 million to $80 million
with expected gross margin of 24 percent to 26 percent.2
“In
2008
we expect to achieve non-GAAP revenue of approximately $1.0 billion to $1.2
billion and diluted net income per share of approximately $1.80 to $2.00 as
we
bring on five more solar cell manufacturing lines and respond to the expanding
solar market across three continents,” said Werner. “Taking advantage of our
vertical integration efficiencies, we believe we will achieve our stated
business model financial goals of 30 percent gross margin, 10 percent operating
expenses and 20 percent operating margin on a non-GAAP basis by the end of
2008
or early 2009.”3
About
SunPower
SunPower
Corporation (Nasdaq: SPWR) designs, manufactures and delivers high-performance
solar electric systems worldwide for residential, commercial and utility-scale
power plant customers. SunPower high-efficiency solar cells and solar
panels generate up to 50 percent more power than conventional solar technologies
and have a uniquely attractive, all-black appearance. With headquarters in
San
Jose, Calif., SunPower has offices in North America, Europe and Asia. For more
information, visit www.sunpowercorp.com.
SunPower is a majority-owned subsidiary of Cypress Semiconductor Corp. (NYSE:
CY).
1
For
the
third quarter of 2007, we expect the combined company to generate revenue on
a
GAAP basis of $205 million to $215 million; GAAP gross margin of approximately
16 percent to 18 percent and GAAP net income to be at or near break even. For
the full year 2007, we expect combined revenue on a GAAP basis of $729 million
to $750 million and diluted GAAP net (loss)
income per share of $(0.07) to $0.03.
2
For
the
third quarter of 2007, we expect the Systems segment to generate
GAAP gross margin of approximately 18 percent to 21 percent and the
Components segment to generate GAAP gross margin of approximately
20 percent to 22 percent.
3 For
the
full year 2008, we expect combined revenue on a GAAP basis of $1.0 billion
to
$1.2 billion and diluted GAAP net income
per share of $0.64 to $0.84.
Forward-Looking
Statements
This
press release contains forward-looking statements within the meaning of Section
27A of the Securities Act of 1933 and Section 21E of the Securities Exchange
Act
of 1934, and as defined in the Private Securities Litigation Reform Act of
1995.
Forward-looking statements are statements that do not represent historical
facts. We use words such as "expect,” “believe,” “plan,” “will,” “should,”
“anticipate,” and similar expressions to identify forward-looking statements.
Forward-looking statements in this press release include, but are not limited
to, the company’s plans and expectations regarding (a) production at SunPower’s
330 megawatt and 500 megawatt solar cell fabrication facilities and 300 megawatt
panel factory; (b) changes in silicon supply and costs during the next year;
(c)
delivery of silicon to SunPower under long-term supply contracts with Hemlock,
M. Setek, DC Chemical and other parties; (d) SunPower’s silicon supply agreement
position and capacity expansion plan; (e) SunPower’s superior polysilicon
utilization and associated cost leverage; (f) the megawatt size of the Systems
segment’s projects; (g) company gross margin trends in the third and fourth
quarters of 2007; (h) the company’s quarterly financial results for the third
quarter of 2007 as well as annual financial results for 2007, including revenue,
gross margin, and diluted net income per share; (i) the company’s Component and
Systems segments’ separate contributions to third quarter consolidated results,
including revenue and gross margin; (j) annual financial results for 2008,
including revenue and diluted net income per share; and (k) goals to achieve
a
certain gross margin, operating expense and operating margin by the end of
2008
or early 2009. Such statements are based on our current expectations as of
the
date of the release, which could change or not materialize as expected. Our
actual results may differ materially due to a variety of uncertainties and
risk
factors, including but not limited to risks associated with (i) our ability
to
ramp new production lines; (ii) our ability to realize expected manufacturing
efficiencies; (iii) our ability to reduce kerf loss and otherwise achieve
anticipated reductions in silicon usage efficiency (iv) production difficulties
that could arise; (v) the success of our ongoing research and development
efforts; (vi) our ability to obtain adequate supply of polysilicon, ingots
and
wafers to manufacture our products and the price we pay for such materials;
(vii) the price and availability of cells and solar panels; (viii) business
and
economic conditions and growth trends in the solar power industry; (ix) the
continuation of governmental and related economic incentives promoting the
use
of solar power; (x) our ability to compete with other companies and competing
technologies; (xi) the potential renegotiation of or non-performance by parties
to our supply and customer contracts; (xii) unforeseen manufacturing equipment
delays at our fabrication facilities and panel factories; (xiii) our ability
to
obtain structured financing for our power purchase agreement business
activities; and (xiv) other risks described in our Annual Report on Form 10-K
for the year ended December 31, 2006, our Quarterly Report on Form 10-Q for
the
quarter ended April 1, 2007, and other filings with the Securities and Exchange
Commission. You should also carefully review reports that we file with the
Securities and Exchange Commission, including without limitation such Form
10-K
and Form 10-Q. Except as required by law, we assume no obligation to update
any
such forward-looking statements.
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 items related to amortization of intangible assets,
stock-based compensation and the related tax effects. Management does not
consider these charges in evaluating the core operational activities of the
company. Management uses these non-GAAP measures internally to make strategic
decisions, forecast future results and evaluate the company’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 the company’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 operates on a fiscal calendar comprised of four thirteen-week quarters
that end at midnight Pacific Time on the Sunday nearest the calendar
quarter-end.
# # #
SunPower
is a registered trademark of SunPower Corp. Cypress is a registered trademark
of
Cypress Semiconductor Corp. All other trademarks are the property of their
respective owners.
|
SUNPOWER
CORPORATION
|
|||
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
|||
|
(In
thousands)
|
|
(Unaudited)
|
|
Jul.
1,
|
Dec.
31,
|
||||||
|
2007
|
2006
|
||||||
|
ASSETS
|
|||||||
|
|
|||||||
|
Cash
and cash equivalents
|
$
|
150,352
|
$
|
165,596
|
|||
|
Short-term
investments
|
25,555
|
16,496
|
|||||
|
Accounts
receivable, net
|
93,053
|
51,680
|
|||||
|
Costs
and estimated earnings in excess of billings
|
23,459
|
-
|
|||||
|
Deferred
project costs
|
24,935
|
-
|
|||||
|
Inventories
|
100,771
|
22,780
|
|||||
|
Prepaid
expenses and other assets
|
58,499
|
23,288
|
|||||
|
Advances
to suppliers
|
93,222
|
77,636
|
|||||
|
Property,
plant and equipment, net
|
295,776
|
202,428
|
|||||
|
Goodwill
and other intangible assets, net
|
239,043
|
16,932
|
|||||
|
|
|||||||
|
Total
assets
|
$
|
1,104,665
|
$
|
576,836
|
|||
|
|
|||||||
|
|
|||||||
|
LIABILITIES
AND STOCKHOLDERS' EQUITY
|
|||||||
|
|
|||||||
|
Accounts
payable
|
$
|
115,625
|
$
|
26,534
|
|||
|
Accrued
and other liabilities
|
61,615
|
21,540
|
|||||
|
Convertible
debt
|
200,000
|
-
|
|||||
|
Billings
in excess of costs and estimated earnings
|
48,574
|
-
|
|||||
|
Customer
advances
|
29,828
|
39,991
|
|||||
|
Total
liabilities
|
455,642
|
88,065
|
|||||
|
Stockholders'
equity
|
649,023
|
488,771
|
|||||
|
Total
liabilities and stockholders' equity
|
$
|
1,104,665
|
$
|
576,836
|
|||
|
SUNPOWER
CORPORATION
|
|
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
|
|
(In
thousands, except per share data)
|
|
(Unaudited)
|
|
THREE
MONTHS ENDED
|
|
SIX
MONTHS ENDED
|
|
|||||||||||||
|
|
|
Jul.
1,
|
|
Apr
1,
|
|
Jul.
2,
|
|
Jul.
1,
|
|
Jul.
2,
|
|
|||||
|
|
|
2007
|
|
2007
|
|
2006
|
|
2007
|
|
2006
|
||||||
|
Revenue
|
||||||||||||||||
|
Systems
|
$
|
104,037
|
$
|
78,495
|
$
|
-
|
$
|
182,532
|
$
|
-
|
||||||
|
Components
|
69,729
|
63,852
|
54,695
|
133,581
|
96,653
|
|||||||||||
|
|
173,766
|
142,347
|
54,695
|
316,113
|
96,653
|
|||||||||||
|
Cost
of systems revenue
|
89,701
|
67,389
|
-
|
157,090
|
-
|
|||||||||||
|
Cost
of components revenue
|
54,273
|
42,533
|
43,248
|
96,806
|
79,514
|
|||||||||||
|
143,974
|
109,922
|
43,248
|
253,896
|
79,514
|
||||||||||||
|
Gross
margin
|
29,792
|
32,425
|
11,447
|
62,217
|
17,139
|
|||||||||||
|
Operating
expenses:
|
||||||||||||||||
|
Research
and development
|
2,821
|
2,936
|
2,588
|
5,757
|
4,584
|
|||||||||||
|
Selling,
general and administrative
|
26,109
|
22,371
|
4,985
|
48,480
|
9,366
|
|||||||||||
|
Purchased
in-process research and development
|
-
|
9,575
|
-
|
9,575
|
-
|
|||||||||||
|
Impairment
of acquisition-related intangibles
|
14,068
|
-
|
-
|
14,068
|
-
|
|||||||||||
|
Total
operating expenses
|
42,998
|
34,882
|
7,573
|
77,880
|
13,950
|
|||||||||||
|
Operating
income (loss)
|
(13,206
|
)
|
(2,457
|
)
|
3,874
|
(15,663
|
)
|
3,189
|
||||||||
|
Interest
and other income, net
|
594
|
1,139
|
1,922
|
1,733
|
2,893
|
|||||||||||
|
Income
(loss) before income taxes
|
(12,612
|
)
|
(1,318
|
)
|
5,796
|
(13,930
|
)
|
6,082
|
||||||||
|
Income
tax provision (benefit)
|
(7,267
|
)
|
(2,558
|
)
|
412
|
(9,825
|
)
|
443
|
||||||||
|
Net
income (loss)
|
$
|
(5,345
|
)
|
$
|
1,240
|
$
|
5,384
|
$
|
(4,105
|
)
|
$
|
5,639
|
||||
|
Net
income (loss) per share:
|
||||||||||||||||
|
-
Basic
|
($0.07
|
)
|
$
|
0.02
|
$
|
0.08
|
($0.06
|
)
|
$
|
0.09
|
||||||
|
-
Diluted
|
($0.07
|
)
|
$
|
0.02
|
$
|
0.08
|
($0.06
|
)
|
$
|
0.08
|
||||||
|
|
||||||||||||||||
|
Shares
used in calculation of net income (loss) per share:
|
||||||||||||||||
|
-
Basic
|
75,123
|
73,732
|
64,040
|
74,428
|
62,583
|
|||||||||||
|
-
Diluted
|
75,123
|
79,126
|
69,408
|
74,428
|
68,172
|
|||||||||||
|
(In
thousands, except per share data)
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||
|
|
THREE
MONTHS ENDED
|
SIX
MONTHS ENDED
|
THREE
MONTHS ENDED
|
SIX
MONTHS ENDED
|
|||||||||||||||||||||||||||
|
|
Jul.
1,
|
Apr.
1,
|
Jul.
2,
|
Jul.
1,
|
Jul.
2,
|
Jul.
1,
|
Apr.
1,
|
Jul.
2,
|
Jul.
1,
|
Jul.
2,
|
|||||||||||||||||||||
|
|
2007
|
2007
|
2006
|
2007
|
2006
|
2007
|
2007
|
2006
|
2007
|
2006
|
|||||||||||||||||||||
|
(In
thousands, except per
share data)
|
(Presented
on a GAAP Basis)
|
(Presented
on a non-GAAP Basis)*
|
|||||||||||||||||||||||||||||
|
Total
revenue
|
$
|
173,766
|
$
|
142,347
|
$
|
54,695
|
$
|
316,113
|
$
|
96,653
|
$
|
174,075
|
$
|
143,180
|
$
|
54,695
|
$
|
317,255
|
$
|
96,653
|
|||||||||||
|
Gross
margin
|
$
|
29,792
|
$
|
32,425
|
$
|
11,447
|
$
|
62,217
|
$
|
17,139
|
$
|
39,986
|
$
|
41,577
|
$
|
12,856
|
$
|
81,563
|
$
|
19,917
|
|||||||||||
|
Operating
income (loss)
|
$
|
(13,206
|
)
|
$
|
(2,457
|
)
|
$
|
3,874
|
$
|
(15,663
|
)
|
$
|
3,189
|
$
|
22,041
|
$
|
25,465
|
$
|
6,186
|
$
|
47,506
|
$
|
8,088
|
||||||||
|
Net
income (loss)
|
$
|
(5,345
|
)
|
$
|
1,240
|
$
|
5,384
|
$
|
(4,105
|
)
|
$
|
5,639
|
$
|
19,811
|
$
|
23,278
|
$
|
7,534
|
$
|
43,089
|
$
|
10,376
|
|||||||||
|
Net
income (loss) per share:
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
|
-Basic
|
$
|
(0.07
|
)
|
$
|
0.02
|
$
|
0.08
|
$
|
(0.06
|
)
|
$
|
0.09
|
$
|
0.26
|
$
|
0.32
|
$
|
0.12
|
$
|
0.58
|
$
|
0.17
|
|||||||||
|
-Diluted
|
$
|
(0.07
|
)
|
$
|
0.02
|
$
|
0.08
|
$
|
(0.06
|
)
|
$
|
0.08
|
$
|
0.25
|
$
|
0.29
|
$
|
0.11
|
$
|
0.54
|
$
|
0.15
|
|||||||||
| * |
All
non-GAAP measures presented above exclude stock-based compensation
expenses, amortization of intangibles, fair value adjustments to
deferred
revenue and in-process research and development expenses relating
to
purchase accounting, impairment of acquisition-related intangibles,
and
related tax effects. For further details on non-GAAP financial
measures,
please refer to the reconciliation table and a detailed discussion
of
management's use of non-GAAP information
below.
|
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 items related to stock-based compensation
expenses, amortization of intangibles, fair value adjustments to deferred
revenue and in-process research and development expenses relating to purchase
accounting, impairment of acquisition-related intangibles, and related tax
effects. The specific non-GAAP measures included herein are revenue, gross
margin, operating income (loss), net income (loss) and net income (loss)
per
share. Management believes that each of these non-GAAP measures is useful
to
investors for the following reasons:
| · |
Revenue
- SunPower’s non-GAAP revenue includes a purchase accounting fair value
adjustment to deferred revenue in accordance with EITF 01-03. This
results
in elimination of revenue that would have been recognized by the
subsidiary SunPower Corporation, Systems (formerly known as PowerLight
Corporation) had SunPower not acquired it. Management believes this
non-GAAP measure is useful to investors because it shows the revenue
that
would have been reflected in our Systems segment absent the effect
of
purchase accounting. In addition, management uses this metric to
assess
the business and financial performance of the company and as one
element
in determining employees’ incentive
compensation.
|
| · |
Gross
Margin - SunPower’s non-GAAP gross margin excludes the effects of purchase
accounting fair value adjustment to deferred revenue, amortization
of
acquired intangible assets and stock-based compensation charges.
Management believes this non-GAAP measure is useful to investors
because
it shows the company’s gross margin across different reporting periods on
a consistent basis, independent of stock-based compensation expenses
and
the effects of purchase accounting. In addition, management uses
this
metric to assess the business and financial performance of the company
and
as one element in determining certain employees’ incentive
compensation.
|
| · |
Operating
Income (Loss) - SunPower’s non-GAAP operating income or loss excludes the
effects of purchase accounting fair value adjustment to deferred
revenue,
amortization of acquired intangible assets and stock-based compensation
charges. Management believes this non-GAAP measure is useful to investors
because it shows the company’s operating income or loss across different
reporting periods on a consistent basis, independent of stock-based
compensation expenses and the effects purchase accounting. In addition,
management uses this metric to assess the business and financial
performance of the company and as one element in determining certain
employees’ incentive compensation.
|
| · |
Net
Income (Loss) and Net Income (Loss) per share - SunPower’s non-GAAP net
income or loss and net income or loss per share excludes items related
to
stock-based compensation expenses, amortization of acquired intangibles,
fair value adjustments to deferred revenue and in-process research
and
development expenses relating to purchase accounting, impairment
of
acquisition-related intangibles, and related tax effects. Management
believes this non-GAAP measure is useful to investors because it
shows the
company’s net income or loss across different reporting periods on a
consistent basis, independent of stock-based compensation expenses
and the
effects purchase accounting. In addition, management uses this metric
to
assess the business and financial performance of the company and
as one
element in determining certain employees’ incentive
compensation.
|
SunPower
believes that each of the non-GAAP financial measures described above provides
investors with another method for assessing SunPower's operating results
in a
manner that is focused on the performance of its ongoing operations. 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.
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.
These
non-GAAP statements of operations measures are important to the company for
the
reasons noted above and they exclude the following items:
| · |
Stock-based
compensation. Stock-based compensation relates primarily to SunPower
stock
awards such as stock options, restricted stock and related tax
effects.
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.
|
| · |
Amortization
of intangibles, impairment of intangibles, fair value adjustments
to
deferred revenue and in-process research and development expenses
relating
to purchase accounting, and related tax effects. These adjustments
are
acquisition-related charges. Amortization of acquisition-related
intangibles relates to purchased technology in acquisitions such
as
existing technology, patents, brand names and trademarks. Impairment
of
acquisition-related intangibles relates to the net book value of
the
PowerLight trade name being written off in its entirety as a result
of the
change in branding strategy. Fair value adjustment to deferred
revenue is
an acquisition-related adjustment that results in certain revenues
never
being recognized under GAAP by either the acquiring company or
the company
being acquired. In-process research and development relates to
projects in
process as of the acquisition date that have not reached technological
feasibility and are immediately expensed. These acquisition-related
charges are not factored into management’s evaluation of potential
acquisitions or its performance after completion of acquisitions,
because
they are not related to our core operating performance, and the
frequency
and amount of such charges can vary significantly based on the
size and
timing of acquisitions and the maturities of the businesses being
acquired. Excluding this data provides investors with a basis to
compare
the company against the performance of other companies without
the
variability caused by purchase
accounting.
|
|
SUNPOWER
CORPORATION
|
||||||||||
|
RECONCILIATIONS
OF GAAP RESULTS OF OPERATIONS MEASURES TO NON-GAAP MEASURES
(Unaudited)
|
||||||||||
|
(In
thousands, except per share
data)
|
|
STATEMENT
OF OPERATIONS DATA:
|
||||||||||||||||
|
THREE
MONTHS ENDED
|
|
SIX
MONTHS ENDED
|
|
|||||||||||||
|
|
|
Jul.
1,
|
|
Apr.
1,
|
|
Jul.
2,
|
|
Jul.
1,
|
|
Jul.
2,
|
|
|||||
|
|
|
2007
|
|
2007
|
|
2006
|
|
2007
|
|
2006
|
||||||
|
Total
GAAP revenue
|
$
|
173,766
|
$
|
142,347
|
$
|
54,695
|
$
|
316,113
|
$
|
96,653
|
||||||
|
Fair
value adjustment to deferred revenue
|
309
|
833
|
-
|
1,142
|
-
|
|||||||||||
|
Total
non-GAAP revenue
|
$
|
174,075
|
$
|
143,180
|
$
|
54,695
|
$
|
317,255
|
$
|
96,653
|
||||||
|
GAAP
gross margin
|
$
|
29,792
|
$
|
32,425
|
$
|
11,447
|
$
|
62,217
|
$
|
17,139
|
||||||
|
Fair
value adjustment to deferred revenue
|
309
|
833
|
-
|
1,142
|
-
|
|||||||||||
|
Amortization
of intangible assets
|
6,687
|
6,069
|
1,175
|
12,756
|
2,350
|
|||||||||||
|
Stock-based
compensation expense
|
3,198
|
2,250
|
234
|
5,448
|
428
|
|||||||||||
|
Non-GAAP
gross margin
|
$
|
39,986
|
$
|
41,577
|
$
|
12,856
|
$
|
81,563
|
$
|
19,917
|
||||||
|
GAAP
operating income (loss)
|
$
|
(13,206
|
)
|
$
|
(2,457
|
)
|
$
|
3,874
|
$
|
(15,663
|
)
|
$
|
3,189
|
|||
|
Fair
value adjustment to deferred revenue
|
309
|
833
|
-
|
1,142
|
-
|
|||||||||||
|
Amortization
of intangible assets
|
7,640
|
6,911
|
1,175
|
14,551
|
2,350
|
|||||||||||
|
Stock-based
compensation expense
|
13,230
|
10,603
|
1,137
|
23,833
|
2,549
|
|||||||||||
|
Purchased
in-process research and development
|
-
|
9,575
|
-
|
9,575
|
-
|
|||||||||||
|
Impairment
of acquisition-related intangibles
|
14,068
|
-
|
-
|
14,068
|
-
|
|||||||||||
|
Non-GAAP
operating income
|
$
|
22,041
|
$
|
25,465
|
$
|
6,186
|
$
|
47,506
|
$
|
8,088
|
||||||
|
GAAP
net income (loss)
|
$
|
(5,345
|
)
|
$
|
1,240
|
$
|
5,384
|
$
|
(4,105
|
)
|
$
|
5,639
|
||||
|
Fair
value adjustment to deferred revenue
|
309
|
833
|
-
|
1,142
|
-
|
|||||||||||
|
Amortization
of intangible assets
|
7,640
|
6,911
|
1,175
|
14,551
|
2,350
|
|||||||||||
|
Stock-based
compensation expense
|
13,230
|
10,603
|
1,137
|
23,833
|
2,549
|
|||||||||||
|
Purchased
in-process research and development
|
-
|
9,575
|
-
|
9,575
|
-
|
|||||||||||
|
Impairment
of acquisition-related intangibles
|
14,068
|
-
|
-
|
14,068
|
-
|
|||||||||||
|
Tax
effect
|
(10,091
|
)
|
(5,884
|
)
|
(162
|
)
|
(15,975
|
)
|
(162
|
)
|
||||||
|
Non-GAAP
net income
|
$
|
19,811
|
$
|
23,278
|
$
|
7,534
|
$
|
43,089
|
$
|
10,376
|
||||||
|
NET
INCOME PER SHARE:
|
||||||||||||||||
|
|
THREE
MONTHS ENDED
|
SIX
MONTHS ENDED
|
||||||||||||||
|
|
July
1,
|
|
|
Apr.
1,
|
|
|
July
2,
|
|
|
July
1,
|
|
|
July
2,
|
|
||
|
|
|
|
2007
|
|
|
2007
|
|
|
2006
|
|
|
2007
|
|
|
2006
|
|
|
Basic:
|
||||||||||||||||
|
GAAP
net income (loss) per share
|
($0.07
|
)
|
$
|
0.02
|
$
|
0.08
|
($0.06
|
)
|
$
|
0.09
|
||||||
|
Reconciling
items:
|
||||||||||||||||
|
Stock-based
compensation expense
|
0.18
|
0.15
|
0.02
|
0.33
|
0.04
|
|||||||||||
|
Purchase
accounting:
|
||||||||||||||||
|
Fair
value adjustment to deferred revenue
|
-
|
0.01
|
-
|
0.01
|
-
|
|||||||||||
|
Amortization
of intangible assets
|
0.10
|
0.09
|
0.02
|
0.19
|
0.04
|
|||||||||||
|
Purchased
in-process research and development
|
-
|
0.13
|
-
|
0.13
|
-
|
|||||||||||
|
Impairment
of acquisition-related intangibles
|
0.18
|
-
|
-
|
0.18
|
-
|
|||||||||||
|
Tax
effect
|
(0.13
|
)
|
(0.08
|
)
|
-
|
(0.20
|
)
|
-
|
||||||||
|
Non-GAAP
net income per share
|
$
|
0.26
|
$
|
0.32
|
$
|
0.12
|
$
|
0.58
|
$
|
0.17
|
||||||
|
Diluted:
|
||||||||||||||||
|
GAAP
net income (loss) per share
|
($0.07
|
)
|
$
|
0.02
|
$
|
0.08
|
($0.06
|
)
|
$
|
0.08
|
||||||
|
Reconciling
items:
|
||||||||||||||||
|
Stock-based
compensation expenses
|
0.17
|
0.12
|
0.01
|
0.30
|
0.03
|
|||||||||||
|
Purchase
accounting:
|
||||||||||||||||
|
Fair
value adjustment to deferred revenue
|
-
|
0.01
|
-
|
0.01
|
-
|
|||||||||||
|
Amortization
of intangible assets
|
0.10
|
0.09
|
0.02
|
0.19
|
0.04
|
|||||||||||
|
Purchased
in-process research and development
|
-
|
0.12
|
-
|
0.12
|
-
|
|||||||||||
|
Impairment
of acquisition-related intangibles
|
0.18
|
-
|
-
|
0.18
|
-
|
|||||||||||
|
Tax
effect
|
(0.13
|
)
|
(0.07
|
)
|
-
|
(0.20
|
)
|
-
|
||||||||
|
Non-GAAP
net income per share
|
$
|
0.25
|
$
|
0.29
|
$
|
0.11
|
$
|
0.54
|
$
|
0.15
|
||||||
|
Shares
used in calculation of GAAP net income (loss) per share:
|
||||||||||||||||
|
-
Basic
|
75,123
|
73,732
|
64,040
|
74,428
|
62,583
|
|||||||||||
|
-
Diluted
|
75,123
|
79,126
|
69,408
|
74,428
|
68,172
|
|||||||||||
|
|
||||||||||||||||
|
Shares
used in calculation of non-GAAP net income per share:
|
||||||||||||||||
|
-Basic
|
75,123
|
73,732
|
64,040
|
74,428
|
62,583
|
|||||||||||
|
-Diluted
|
79,843
|
79,126
|
69,408
|
79,485
|
68,172
|
|||||||||||