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): January 24,
2008
___________________
|
SunPower
Corporation
|
|
(Exact
Name of Registrant as Specified in
Charter)
|
___________________
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Delaware
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000-51593
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94-3008969
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|
(State
or Other Jurisdiction
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(Commission
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(IRS
Employer
|
|
of
Incorporation)
|
File
No.)
|
Identification
No.)
|
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3939
North First Street, San Jose, California 95134
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|
(Address
of Principal Executive Offices) (Zip
Code)
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Registrant’s
telephone number, including area code: (408) 240-5500
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N/A
|
|
(Former
Name or Former Address, if Changed Since Last
Report)
|
___________________
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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):
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|
|
r
|
Written
communications pursuant to Rule 425 under the Securities Act (17
CFR
230.425)
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|
r
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
|
|
r
|
Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17
CFR
240.14d-2(b))
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|
r
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Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17
CFR
240.13e-4(c))
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Item
2.02.
Results
of Operations and Financial Condition.
On
January 24, 2008, SunPower Corporation (the "Registrant") issued the press
release attached as Exhibit 99.1 hereto announcing its results of operations
for
the fourth 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. Financial
Statements and Exhibits.
(d)
Exhibits
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Exhibit No.
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|
Description
|
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99.1
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Press
Release dated January 24, 2008
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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.
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SUNPOWER
CORPORATION
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|
|
|
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Date:
January 24, 2008
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By:
/s/ Emmanuel Hernandez
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|
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Name:
Emmanuel Hernandez
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Title: Chief
Financial Officer
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Exhibit No.
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|
Description
|
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99.1
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|
Press
Release dated January 24, 2008
|
FOR
IMMEDIATE RELEASE
Contacts:
Julie
Blunden
SunPower
Corporation
408-240-5577
Manny
Hernandez
SunPower
Corporation
408-240-5560
SunPower
Reports Fourth-Quarter and Year-End 2007 Results
|
·
|
2007
revenue of $774.8 million, up 227.6 percent
year-on-year
|
|
·
|
Q4
2007 revenue of $224.3 million, up 201.1 percent
year-on-year
|
|
·
|
Solar
Solutions acquisition expands market position in
Italy
|
|
·
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14
megawatt Nellis AFB solar system completed: largest in North
America
|
|
·
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60
megawatts booked by SunPower Systems for solar power plants in
Spain
|
|
·
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$200
million Project Finance Facility closed with Morgan Stanley for
U.S.
systems
|
|
·
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8
megawatt GE Energy Financial Services financing closed serving
five U.S.
customers
|
|
·
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Fab
2 and second solar panel manufacturing facility achieve scale
economies
|
|
·
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Next-generation
T20 Trackers delivered to 18 MW Olivenza project in
Spain
|
|
·
|
First
polysilicon received from DC Chemical in January
2008
|
SAN
JOSE, Calif., January 24, 2008– SunPower Corporation (NASDAQ: SPWR)
today announced financial results for the fourth quarter 2007, which ended
December 30, 2007. This press release contains both GAAP and non-GAAP
financial information. Non-GAAP figures are reconciled to the closest
GAAP equivalent figures on the final page of this press release.
Revenue
for the 2007 fourth quarter was $224.3 million, down 4.3 percent from
prior-quarter revenue of $234.3 million and up 201.1 percent from year-ago
fourth-quarter revenue of $74.5 million. The Components segment
accounted for $100.4 million of fourth-quarter revenue, a 31.1 percent increase
from prior-quarter revenue of $76.6 million. The Systems segment
accounted for $123.9 million of fourth-quarter revenue, a 21.4 percent decrease
from prior-quarter revenue of $157.7 million. Third-quarter 2007
revenue was significantly influenced by large scheduled project installations,
particularly the Nellis Air Force Base project. 2007 fourth-quarter
revenue growth, compared to the fourth quarter of 2006, was primarily driven
by
continued strong demand for SunPower products and systems across market segments
and channels. For reporting purposes, the Systems segment generally
represents products and services sold directly to the system owner, while
the
Components segment represents primarily products sold to installers and
resellers. Additionally, both SunPower and third-party solar panels
sold through the Systems segment channels are recorded as Systems segment
revenue.
On
a
GAAP basis, SunPower reported total operating income of $11.2 million and
diluted net income per share of $0.06. These figures include non-cash
operating expenses for amortization of purchase accounting intangible assets
of
$7.1 million and non-cash, stock-based compensation of $14.0 million. Fourth
quarter 2007 GAAP results also include a non-cash charge of $8.2 million
representing the write-off of unamortized debt issuance costs related to
the
issuance of SunPower’s convertible debentures which became convertible in the
first fiscal quarter of 2008 starting December 31, 2007. This also
resulted in the reclassification of the convertible debentures from long-term
to
current liabilities as of December 30, 2007.
On
a
non-GAAP basis, adjusted to exclude non-cash charges for amortization of
intangible assets, stock-based compensation, write-off of unamortized debt
issuance costs, and the related tax effects, SunPower reported total operating
income of $32.4 million and diluted net income per share of
$0.39. This compares with prior-quarter total operating income of
$27.0 million and $0.33 diluted net income per share.
Also
on
a non-GAAP basis, SunPower reported total gross margin for the fourth quarter
2007 of 25.3 percent, compared with total gross margin of 20.4 percent in
the
prior quarter. Fourth-quarter non-GAAP total gross margin was
influenced by the higher gross margin in the Systems segment, which achieved
gross margin of 26.8 percent, while the Components segment reported gross
margin
of 23.4 percent.
“SunPower
achieved record operating results again in the fourth quarter of 2007,” said Tom
Werner, SunPower’s CEO. “SunPower’s investments in channel
development, brand building, technology, and people yielded great results
this
quarter. We have purposefully chosen to vertically integrate and
build a portfolio of customer segments, channels and applications to leverage
our proprietary high-performance solar technology. Our brand and
technology platforms improve our response time to new market opportunities
and
limit our individual market risk. Upstream we have also followed a
portfolio strategy, developing a diversified set of silicon suppliers from
polysilicon to ingots and wafers. We believe that our scale and
flexibility places SunPower on the leading edge of the cost reduction roadmap
as
we address a rapidly evolving market.
“The
global solar market delivered strong, dynamic growth in 2007. In the
latter part of 2008 and beyond, we expect our industry’s silicon feedstock to
become more abundant, leading to lower solar panel prices which will
redistribute the power and profit pools in the value chain. SunPower
has been preparing for this development for the last two years by vertically
integrating downstream. In that vein, earlier this month we closed
the acquisition of Solar Solutions – now named SunPower Italia – an Italian
systems integrator. The investment in Italy and channel development
in Southern Europe is aligned with SunPower’s vertically integrated model, our
portfolio approach to customer market segments and our global geographic
reach. We welcome SunPower Italia to our team.
“SunPower
continues to benefit from strong demand for our industry-leading solar
technology in Europe, the United States and Asia. In the fourth
quarter of 2007 we announced solar systems serving a wide variety of customers
in Korea and the United States, in addition to power plants totaling
approximately 60 megawatts in Spain. Powering our growth in sales,
SunPower announced financing facilities with Morgan Stanley and GE Energy
Financial Systems for the United States, designed to increase the speed and
reduce the cost of financing our customers’ solar systems.
“In
December, SunPower teamed with the United States Air Force and MMA Renewable
Ventures to dedicate the largest photovoltaic power plant in the North America
at the Nellis Air Force Base, located near Las Vegas. At more than 14
megawatts, and built on top of a landfill, SunPower deployed our proprietary
single-axis SunPower® T20 Tracker solar tracking system which delivers up to 30
percent more energy than traditional fixed-tilt systems. Our tracking
technology offers the highest energy delivery for our customers when paired
with
SunPower panels using Generation 2 solar cells which achieve median sunlight
conversion efficiencies exceeding 22 percent. SunPower’s
industry-leading solar system performance yields important benefits to our
customers by reducing the amount of land, material and site work needed to
install a given capacity solar system or by enabling significantly higher
capacity systems to be installed within given site area’s
constraints. SunPower is building a brand based on the substantial
technology benefits we offer our customers.
“Technology
advantages also position SunPower as a cost reduction leader among silicon-based
solar companies. We are making steady progress on our plan to reduce
installed system costs by 50 percent from 2006 levels by year-end
2012. SunPower’s U.S. Department of Energy contract under the Solar
America Initiative is now active with a comprehensive roadmap for research
and
development aimed at installed system cost reduction based on efficiencies
spanning the solar value chain. We expect to achieve several major
manufacturing milestones in 2008, including substantially greater manufacturing
scale, a successful transition to second-generation products and to thinner,
145
micron wafers. New supply agreements that begin delivery in 2008 will
support manufacturing cost reductions by reducing our average feedstock price
for the first time since we began commercial solar cell production.
“We
expect SunPower’s median solar cell efficiency to increase over the course of
2008 as we add five more Gen 2 lines in Fab 2. Our Fab 2 expansion
will nearly double our nameplate solar cell manufacturing capacity from 214
megawatts at the end of 2007 to 414 megawatts at the end 2008. Our
start-up team has done a tremendous job transferring our learning from Fab
1 to
Fab 2. We have now completed our production ramp on the first two
lines in Fab 2 which will exclusively produce our industry-leading Gen 2
solar
cells. Our Gen 2 solar cells increase the power generated by each
solar cell by 10 percent compared to our A-300 solar
cell. Concurrently we are reducing our manufacturing unit cost by
increasing equipment throughput and achieving manufacturing scale.
“In
panel manufacturing, we have started production on two more solar panel
manufacturing lines and began ramping a third at the end of Q4, all of which
are
automated and contribute to scale economies. These lines will
manufacture our larger-format, 96-cell solar panels which have achieved the
highest rated solar panel efficiency ever measured, at more than 20
percent. Likewise, in systems technology manufacturing, we are now
shipping our cost-optimized, factory-assembled next-generation T20 tracker
to
our Olivenza project in Spain combining improved product design with
manufacturing scale.
“Over
the past two months our silicon suppliers have met major milestones that
lay the
foundation for our expansion by substantially increasing our silicon supply
in
2008. In the fourth quarter 2007, M.Setek transitioned to polysilicon
manufacturing using internally-produced TCS gas which we believe will stabilize
ingot deliveries from M.Setek materially going forward. In the fourth
quarter 2007, M.Setek’s transition to in-house TCS manufacturing resulted in
non-linear deliveries of silicon ingot to SunPower which limited our total
solar
cell production. In January 2008, DC Chemical delivered its first
sample of polysilicon to Woongjin Energy, our ingot-pulling joint venture
in
Korea, which produced ingots meeting our specifications. Woongjin
Energy began production in the fourth quarter of 2007 with outstanding
performance, delivering twice the expected ingot volume during its first
months
of production.
“SunPower
continues to add to our portfolio of silicon agreements across the supply
chain. After dedicating our Woongjin Energy joint venture
ingot-pulling plant in November, we announced an ingot-pulling and wafering
agreement in December with Jiawei SolarChina, a company affiliated with our
long-term solar panel partner in China. Last week we announced a 2500
megawatt set of polysilicon agreements with NorSun and its joint venture
partners to be delivered from a new polysilicon plant in Saudi
Arabia. Across our portfolio of silicon supply agreements, we expect
to have sufficient silicon in 2010 to achieve more than six times our 2007
production.”
SunPower’s
Silicon Supply Agreement Position and Capacity Expansion
Plan
|
2008
|
2009
|
2010
|
|
|
Beginning
of Year, Nameplate Capacity (megawatts)
|
214
|
414
|
574
|
|
Annual
Production Capacity Supported by Silicon Agreements to Date
(megawatts)
|
250+
|
430+
|
650+
|
|
Annual
Cash Required for Silicon Prepayments in Advance of Delivery ($
millions)
|
$58.4
|
$48.8
|
$11.1
|
“With
our strong finish in 2007, we are raising our guidance for the fiscal year
2008
and expect the following non-GAAP results: Total revenue of $1.2
billion to $1.3 billion and diluted net income per share of $2.00 to $2.10,”
continued Werner. “We expect our 2009 total revenue to increase 40
percent to 50 percent from 2008 levels. Following our protocol to
offer guidance for the current quarter, we expect first quarter of 2008 non-GAAP
total revenue of $230 million to $250 million, company non-GAAP gross margin
of
24 percent to 25 percent and non-GAAP diluted net income per share of $0.33
to
$0.36 reflecting a higher non-GAAP average tax rate of 24 percent to 25 percent
in 2008 than in 2007 which ended at 11.0 percent.1
“On
a
business segment basis, we expect the following non-GAAP results for the
first
quarter 2008: Components segment revenue of $75.0 million to $77.5 million,
driven by a planned increase in allocation of SunPower panels to the Systems
segment, and gross margin of 26.5 percent to 27.5 percent; Systems segment
revenue of $155.0 million to $172.5 million and gross margin of 23 percent
to 24
percent with a lower mix of higher-margin systems sales expected than in
the
fourth quarter 2007. We expect the Components segment to benefit from
the continued manufacturing ramp of our next-generation technology and the
Systems segment to benefit from an increase in allocation of SunPower panels
to
the segment during the quarter2.”
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 full year 2008, we expect the following total company GAAP results: Revenue
of $1.2 billion to $1.3 billion and diluted net income per share of $1.17
to
$1.27. For the first quarter of 2008, we expect the following total company
GAAP
results: Revenue of $230 million to $250 million; gross margin of approximately
21 percent to 22 percent and diluted net income per share of $0.13 to
$0.16.
2
For
the first quarter of 2008, we expect the Components business segment to generate
GAAP revenue of $75.0 million to $77.5 million and gross margin of approximately
23 percent to 24 percent and the Systems business segment to generate GAAP
revenue of $155.0 million to $172.5 million and gross margin of approximately
20
percent to 21 percent.
Forward-Looking
Statements
This
press release contains forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995, Section 27A of the Securities
Act of 1933 and Section 21E of the Securities Exchange Act of 1934.
Forward-looking statements are statements that do not represent historical
facts. SunPower Corporation uses words and phrases such as "expect," "will,"
“plan,” and similar expressions to identify forward-looking statements.
Forward-looking statements in this press release include, but are not limited
to, SunPower’s plans and expectations regarding: (a) the industry’s
silicon feedstock becoming more abundant, leading to lower solar panel prices
which will redistribute the power and profit pools in the value change; (b)
SunPower’s reducing installed system costs by 50 percent from 2006 levels by
year-end 2012; (c) SunPower’s achieving substantially greater manufacturing
scale, and a successful transition to second generation products and to thinner,
145 micron wafers; (d) new supply agreements beginning in 2008 supporting
manufacturing cost reductions by reducing SunPower’s average feedstock price;
(e) SunPower’s median solar cell efficiency increasing over the course of 2008
as it adds 5 more Gen 2 lines in Fab 2; (f) SunPower’s Fab 2 expansion nearly
doubling its nameplate solar cell manufacturing capacity from 214 megawatts
at
the end of 2007 to 414 megawatts at the end of 2008; (g) Fab 2 exclusively
producing SunPower’s industry-leading Gen 2 solar cells; (h) three additional
lines manufacturing SunPower’s larger-format 96-cell solar panels; (i) M.Setek’s
transitioning to polysilicon manufacturing using internally-produced TCS
gas
increasing ingot deliveries from M.Setek materially going forward; (j)
SunPower’s having sufficient silicon in 2010 to achieve more than six times its
2007 production; (k) SunPower’s achieving certain GAAP and
non-GAAP results, including revenue and diluted net income per share
for the full year 2008, revenue for the full year 2009, revenue, gross margin,
diluted net income per share, and non-GAAP average tax rate for the first
quarter 2008, Components and Systems segment revenue and gross margin for
the
first quarter 2008; (l) SunPower’s
increasing
allocation of SunPower panels to its Systems
segment;
and (m) SunPower’s Components segment benefiting from the continued
manufacturing ramp of its next-generation technology and the Systems segment
benefiting from an increase in allocation of SunPower panels to the segment
during the quarter. These forward-looking statements are based on
information available to SunPower as of the date of this release and current
expectations, forecasts and assumptions and involve a number of risks and
uncertainties that could cause actual results to differ materially from those
anticipated by these forward-looking statements. Such risks and uncertainties
include a variety of factors, some of which are beyond SunPower’s control. In
particular, risks and uncertainties that could cause actual results to differ
include (i)
SunPower’s
ability to ramp new
production lines; (ii) SunPower’s
ability to realize expected
manufacturing efficiencies; (iii) SunPower’s
ability to reduce kerf loss
and otherwise achieve anticipated
reductions in
polysilicon usage efficiency (iv) production difficulties that could arise;
(v)
the success of SunPower’s
ongoing research and
development efforts; (vi) SunPower’s
ability to obtain adequate
supply of polysilicon, ingots and wafers to
manufacture its products and
the price it pays 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) SunPower’s
ability to compete with
other companies and competing technologies; (xi) the potential renegotiation
of
or non-performance by parties to SunPower’s
supply and customer
contracts;
(xii) unforeseen
manufacturing equipment delays at SunPower’s
fabrication facilities and
panel factories; (xiii) unanticipated changes in the mix of balance of systems
sales; and (xiv) other risks described in SunPower’s
Quarterly Report on Form
10-Q for the
quarter ended September
30, 2007, and other filings with the Securities and Exchange Commission.
These forward-looking statements should not be relied upon as representing
SunPower’s
views
as of any
subsequent date, and SunPower 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.
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 items related to stock-based compensation, amortization
of
intangible assets, impairment of acquisition-related intangibles, fair value
adjustments to deferred revenue, purchased in-process research and development
expenses, write-off of unamortized debt issuance costs, and their
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
SunPower
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)
|
||||||||
|
Dec.
30,
|
Dec.
31,
|
|||||||
|
2007
|
2006
|
|||||||
|
ASSETS
|
||||||||
|
Cash
and cash equivalents
|
$ |
285,214
|
$ |
165,596
|
||||
|
Restricted
cash
|
67,887
|
-
|
||||||
|
Investments
|
134,503
|
16,496
|
||||||
|
Accounts
receivable, net
|
138,250
|
51,680
|
||||||
|
Costs
and estimated earnings in excess of billings
|
39,667
|
-
|
||||||
|
Inventories
|
140,504
|
22,780
|
||||||
|
Deferred
project costs
|
8,316
|
-
|
||||||
|
Prepaid
expenses and other assets
|
75,009
|
23,288
|
||||||
|
Advances
to suppliers
|
161,220
|
77,636
|
||||||
|
Property,
plant and equipment, net
|
377,994
|
202,428
|
||||||
|
Goodwill
and other intangible assets, net
|
235,577
|
16,932
|
||||||
|
Total
assets
|
$ |
1,664,141
|
$ |
576,836
|
||||
|
LIABILITIES
AND STOCKHOLDERS' EQUITY
|
||||||||
|
Accounts
payable
|
$ |
123,108
|
$ |
26,534
|
||||
|
Accrued
and other liabilities
|
112,639
|
21,540
|
||||||
|
Convertible
debt
|
425,000
|
-
|
||||||
|
Billings
in excess of costs and estimated earnings
|
69,900
|
-
|
||||||
|
Customer
advances
|
69,404
|
39,991
|
||||||
|
Total
liabilities
|
800,051
|
88,065
|
||||||
|
Stockholders'
equity
|
864,090
|
488,771
|
||||||
|
Total
liabilities and stockholders' equity
|
$ |
1,664,141
|
$ |
576,836
|
||||
|
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
|
||||||||||||||||||||
|
(In
thousands, except per share data)
|
||||||||||||||||||||
|
(Unaudited)
|
||||||||||||||||||||
|
THREE
MONTHS ENDED
|
TWELVE
MONTHS ENDED
|
|||||||||||||||||||
|
Dec.
30,
|
Sept.
30,
|
Dec.
31,
|
Dec.
30,
|
Dec.
31,
|
||||||||||||||||
|
2007
|
2007
|
2006
|
2007
|
2006
|
||||||||||||||||
|
Revenue
|
||||||||||||||||||||
|
Systems
|
$ |
123,912
|
$ |
157,734
|
$ |
-
|
$ |
464,178
|
$ |
-
|
||||||||||
|
Components
|
100,431
|
76,600
|
74,509
|
310,612
|
236,510
|
|||||||||||||||
|
224,343
|
234,334
|
74,509
|
774,790
|
236,510
|
||||||||||||||||
|
Cost
of systems revenue
|
97,416
|
135,111
|
-
|
386,511
|
-
|
|||||||||||||||
|
Cost
of components revenue
|
79,745
|
60,818
|
56,364
|
240,475
|
186,042
|
|||||||||||||||
|
177,161
|
195,929
|
56,364
|
626,986
|
186,042
|
||||||||||||||||
|
Gross
margin
|
47,182
|
38,405
|
18,145
|
147,804
|
50,468
|
|||||||||||||||
|
Operating
expenses:
|
||||||||||||||||||||
|
Research
and development
|
3,904
|
3,902
|
2,564
|
13,563
|
9,684
|
|||||||||||||||
|
Selling,
general and administrative
|
32,068
|
27,708
|
6,105
|
108,256
|
21,677
|
|||||||||||||||
|
Purchased
in-process research and development
|
-
|
-
|
-
|
9,575
|
-
|
|||||||||||||||
|
Impairment
of acquisition-related intangibles
|
-
|
-
|
-
|
14,068
|
-
|
|||||||||||||||
|
Total
operating expenses
|
35,972
|
31,610
|
8,669
|
145,462
|
31,361
|
|||||||||||||||
|
Operating
income
|
11,210
|
6,795
|
9,476
|
2,342
|
19,107
|
|||||||||||||||
|
Interest
and other income (expense), net
|
(3,825 | ) |
3,032
|
2,503
|
940
|
9,354
|
||||||||||||||
|
Income
before income taxes
|
7,385
|
9,827
|
11,979
|
3,282
|
28,461
|
|||||||||||||||
|
Income
tax provision (benefit)
|
2,509
|
1,396
|
670
|
(5,920 | ) |
1,945
|
||||||||||||||
|
Net
income
|
$ |
4,876
|
$ |
8,431
|
$ |
11,309
|
$ |
9,202
|
$ |
26,516
|
||||||||||
|
Net
income per share:
|
||||||||||||||||||||
|
-
Basic
|
$ |
0.06
|
$ |
0.11
|
$ |
0.16
|
$ |
0.12
|
$ |
0.40
|
||||||||||
|
-
Diluted
|
$ |
0.06
|
$ |
0.10
|
$ |
0.15
|
$ |
0.11
|
$ |
0.37
|
||||||||||
|
Shares
used in calculation of net income per share:
|
||||||||||||||||||||
|
-
Basic
|
79,023
|
77,693
|
69,339
|
76,393
|
65,864
|
|||||||||||||||
|
-
Diluted
|
85,796
|
82,610
|
74,108
|
81,769
|
71,087
|
|||||||||||||||
|
(In
thousands, except per share data)
|
|||||||||||||||||||||||||||||||||||||||
|
THREE
MONTHS ENDED
|
TWELVE
MONTHS ENDED
|
THREE
MONTHS ENDED
|
TWELVE
MONTHS ENDED
|
||||||||||||||||||||||||||||||||||||
|
Dec.
30,
|
Sept.
30,
|
Dec.
31,
|
Dec.
30,
|
Dec.
31,
|
Dec.
30,
|
Sept.
30,
|
Dec.
31,
|
Dec.
30,
|
Dec.
31,
|
||||||||||||||||||||||||||||||
|
2007
|
2007
|
2006
|
2007
|
2006
|
2007
|
2007
|
2006
|
2007
|
2006
|
||||||||||||||||||||||||||||||
|
(Presented
on a GAAP Basis)
|
(Presented
on a non-GAAP Basis)*
|
||||||||||||||||||||||||||||||||||||||
|
Gross
margin
|
$ |
47,182
|
$ |
38,405
|
$ |
18,145
|
$ |
147,804
|
$ |
50,468
|
$ |
56,731
|
$ |
47,904
|
$ |
19,527
|
$ |
186,198
|
$ |
56,004
|
|||||||||||||||||||
|
Operating
income
|
11,210
|
6,795
|
9,476
|
2,342
|
19,107
|
32,357
|
27,017
|
11,798
|
106,879
|
28,661
|
|||||||||||||||||||||||||||||
|
Net
income per share:
|
|||||||||||||||||||||||||||||||||||||||
|
-Basic
|
$ |
0.06
|
$ |
0.11
|
$ |
0.16
|
$ |
0.12
|
$ |
0.40
|
$ |
0.42
|
$ |
0.35
|
$ |
0.20
|
$ |
1.35
|
$ |
0.55
|
|||||||||||||||||||
|
-Diluted
|
0.06
|
0.10
|
0.15
|
0.11
|
0.37
|
0.39
|
0.33
|
0.18
|
1.26
|
0.51
|
|||||||||||||||||||||||||||||
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 items related to stock-based
compensation expenses, amortization of intangibles, impairment of
acquisition-related intangibles, fair value adjustments to deferred revenue,
purchased in-process research and development expenses, and their related
tax
effects. The non-GAAP adjustments included herein are primarily the
result of our acquisition of SunPower Corporation, Systems or SP Systems
(formerly known as PowerLight Corporation) on January 10, 2007. 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 purchase accounting, stock-based
compensation charges and write-off of unamortized debt issuance costs.
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 stock-based compensation expenses, amortization
of intangibles and fair value adjustments to deferred revenue.
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 our revenue generation performance relative to the
direct
costs of revenue of SunPower’s 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 stock-based compensation
expenses, amortization of intangibles, impairment of acquisition-related
intangibles, and all other purchase accounting charges. 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 our
results of operations on a more consistent basis against that
of other
companies in our 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 stock-based compensation
expenses,
amortization of intangibles, impairment of acquisition-related
intangibles, all other purchase accounting charges and the tax
effects of
these non-GAAP adjustments. In addition, investors and analysts
can
compare the Company's operating results on a more consistent
basis against
that of other companies in our
industry.
|
Non-Cash
Items
|
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
|
Amortization
of intangibles. SunPower incurs amortization of intangibles as
a result of
Cypress acquiring the Company in November 2004, in which Cypress’ cost of
purchased technology, patents, trademarks and a distribution
agreement is
reflected in our financial statements. In addition, SunPower
incurs
amortization of intangibles as a result of our acquisition of
SP Systems,
which includes purchased technology such as existing technology,
patents,
brand names and trademarks. 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
|
Impairment
of acquisition-related intangibles. SunPower incurred an impairment
of
acquisition-related intangibles in June 2007, which relates to
the net
book value of the PowerLight tradename being written off in its
entirety
as a result of the change in branding strategy. SunPower excluded
this
item because the expense is not reflective of its core operating
performance after completion of its acquisition of SP Systems.
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 acquisition-related
intangibles.
|
|
o
|
Purchase
accounting charges. Purchase accounting charges as a result of
the
acquisition of SP Systems include: (1) amortization of intangibles,
which
includes purchased technology related to acquisitions such as
existing
technology, patents, brand names and trademarks; (2) fair value
adjustments to deferred revenue, which 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
and (3)
purchased in-process research and development expenses, which
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 SunPower’s performance against the
performance of other companies without the variability caused
by purchase
accounting.
|
|
o
|
Write-off
of unamortized debt issuance costs. The market price trigger
condition was met for our senior convertible debentures in December
2007,
giving holders of the convertible debt the right to convert the
convertible debt. As a result, SunPower accelerated the
amortization of deferred debt issuance costs. Excluding this
non-cash
charge provides investors with a basis to compare SunPower’s
period-over-period operating results because the charge is not
reflective
of SunPower’s historical results or its expected future expenses after
such costs are fully amortized on January 2,
2008.
|
|
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
|
TWELVE
MONTHS ENDED
|
|||||||||||||||||||
|
Dec.
30,
|
Sept.
30,
|
Dec.
31,
|
Dec.
30,
|
Dec.
31,
|
||||||||||||||||
|
2007
|
2007
|
2006
|
2007
|
2006
|
||||||||||||||||
|
GAAP
gross margin
|
$ |
47,182
|
$ |
38,405
|
$ |
18,145
|
$ |
147,804
|
$ |
50,468
|
||||||||||
|
Fair
value adjustment to deferred revenue
|
-
|
-
|
-
|
1,142
|
-
|
|||||||||||||||
|
Amortization
of intangible assets
|
6,185
|
5,911
|
1,164
|
24,852
|
4,690
|
|||||||||||||||
|
Stock-based
compensation expense
|
3,364
|
3,588
|
218
|
12,400
|
846
|
|||||||||||||||
|
Non-GAAP
gross margin
|
$ |
56,731
|
$ |
47,904
|
$ |
19,527
|
$ |
186,198
|
$ |
56,004
|
||||||||||
|
GAAP
operating income
|
$ |
11,210
|
$ |
6,795
|
$ |
9,476
|
$ |
2,342
|
$ |
19,107
|
||||||||||
|
Fair
value adjustment to deferred revenue
|
-
|
-
|
-
|
1,142
|
-
|
|||||||||||||||
|
Amortization
of intangible assets
|
7,132
|
6,858
|
1,164
|
28,540
|
4,690
|
|||||||||||||||
|
Stock-based
compensation expense
|
14,015
|
13,364
|
1,158
|
51,212
|
4,864
|
|||||||||||||||
|
Purchased
in-process research and development
|
-
|
-
|
-
|
9,575
|
-
|
|||||||||||||||
|
Impairment
of acquisition-related intangibles
|
-
|
-
|
-
|
14,068
|
-
|
|||||||||||||||
|
Non-GAAP
operating income
|
$ |
32,357
|
$ |
27,017
|
$ |
11,798
|
$ |
106,879
|
$ |
28,661
|
||||||||||
|
NET
INCOME PER SHARE:
|
||||||||||||||||||||
|
THREE
MONTHS ENDED
|
TWELVE
MONTHS ENDED
|
|||||||||||||||||||
|
Dec.
30,
|
Sept.
30,
|
Dec.
31,
|
Dec.
30,
|
Dec.
31,
|
||||||||||||||||
|
2007
|
2007
|
2006
|
2007
|
2006
|
||||||||||||||||
|
Basic:
|
||||||||||||||||||||
|
GAAP
net income per share
|
$ |
0.06
|
$ |
0.11
|
$ |
0.16
|
$ |
0.12
|
$ |
0.40
|
||||||||||
|
Reconciling
items:
|
||||||||||||||||||||
|
Stock-based
compensation expense
|
0.18
|
0.17
|
0.02
|
0.67
|
0.08
|
|||||||||||||||
|
Purchase
accounting:
|
||||||||||||||||||||
|
Fair
value adjustment to deferred revenue
|
-
|
-
|
-
|
0.01
|
-
|
|||||||||||||||
|
Amortization
of intangible assets
|
0.09
|
0.09
|
0.02
|
0.37
|
0.07
|
|||||||||||||||
|
Purchased
in-process research and development
|
-
|
-
|
-
|
0.13
|
-
|
|||||||||||||||
|
Impairment
of acquisition-related intangibles
|
-
|
-
|
-
|
0.18
|
-
|
|||||||||||||||
|
Write-off
of unamortized debt issuance costs
|
0.10
|
-
|
-
|
0.11
|
-
|
|||||||||||||||
|
Tax
effect
|
(0.01 | ) | (0.02 | ) |
-
|
(0.24 | ) |
-
|
||||||||||||
|
Non-GAAP
net income per share
|
$ |
0.42
|
$ |
0.35
|
$ |
0.20
|
$ |
1.35
|
$ |
0.55
|
||||||||||
|
Diluted:
|
||||||||||||||||||||
|
GAAP
net income per share
|
$ |
0.06
|
$ |
0.10
|
$ |
0.15
|
$ |
0.11
|
$ |
0.37
|
||||||||||
|
Reconciling
items:
|
||||||||||||||||||||
|
Stock-based
compensation expenses
|
0.16
|
0.16
|
0.01
|
0.63
|
0.07
|
|||||||||||||||
|
Purchase
accounting:
|
||||||||||||||||||||
|
Fair
value adjustment to deferred revenue
|
-
|
-
|
-
|
0.01
|
-
|
|||||||||||||||
|
Amortization
of intangible assets
|
0.08
|
0.09
|
0.02
|
0.35
|
0.07
|
|||||||||||||||
|
Purchased
in-process research and development
|
-
|
-
|
-
|
0.12
|
-
|
|||||||||||||||
|
Impairment
of acquisition-related intangibles
|
-
|
-
|
-
|
0.17
|
-
|
|||||||||||||||
|
Write-off
of unamortized debt issuance costs
|
0.10
|
-
|
-
|
0.10
|
-
|
|||||||||||||||
|
Tax
effect
|
(0.01 | ) | (0.02 | ) |
-
|
(0.23 | ) |
-
|
||||||||||||
|
Non-GAAP
net income per share
|
$ |
0.39
|
$ |
0.33
|
$ |
0.18
|
$ |
1.26
|
$ |
0.51
|
||||||||||
|
Shares
used in calculation of GAAP net income per share:
|
||||||||||||||||||||
|
-
Basic
|
79,023
|
77,693
|
69,339
|
76,393
|
65,864
|
|||||||||||||||
|
-
Diluted
|
85,796
|
82,610
|
74,108
|
81,769
|
71,087
|
|||||||||||||||
|
Shares
used in calculation of non-GAAP net income per share:
|
||||||||||||||||||||
|
-Basic
|
79,023
|
77,693
|
69,339
|
76,393
|
65,864
|
|||||||||||||||
|
-Diluted
|
85,796
|
82,610
|
74,108
|
81,769
|
71,087
|
|||||||||||||||
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
|
|||||||
|
December
30, 2007
|
|||||||
|
Gross
Margin
|
Research
and
development
|
Selling,
general
and
administrative
|
Other
Acquisition Related Charges
|
Interest
and other income, net
|
Income
tax provision (benefit)
|
||
|
Systems
|
Components
|
||||||
|
Amortization
of intangible assets
|
$ 4,788
|
$ 1,397
|
$ -
|
$ 947
|
$ -
|
$ -
|
$ -
|
|
Stock-based
compensation expense
|
1,952
|
1,412
|
564
|
10,087
|
-
|
-
|
-
|
|
Write-off
of unamortized debt issuance costs
|
-
|
-
|
-
|
-
|
-
|
8,260
|
|
|
Tax
effect
|
-
|
-
|
-
|
-
|
-
|
-
|
(993)
|
|
$ 6,740
|
$ 2,809
|
$ 564
|
$ 11,034
|
$ -
|
$ 8,260
|
$ (993)
|
|
|
September
30, 2007
|
|||||||
|
Gross
Margin
|
Research
and
development
|
Selling,
general
and
administrative
|
Other
Acquisition Related Charges
|
Interest
and other income, net
|
Income
tax provision (benefit)
|
||
|
Systems
|
Components
|
||||||
|
Amortization
of intangible assets
|
$ 4,788
|
$ 1,123
|
$ -
|
$ 947
|
$ -
|
$ -
|
$ -
|
|
Stock-based
compensation expense
|
2,049
|
1,539
|
404
|
9,372
|
-
|
-
|
-
|
|
Tax
effect
|
-
|
-
|
-
|
-
|
-
|
-
|
(1,786)
|
|
$ 6,837
|
$ 2,662
|
$ 404
|
$ 10,319
|
$ -
|
$ -
|
$ (1,786)
|
|
|
December
31, 2006
|
|||||||
|
Gross
Margin
|
Research
and
development
|
Selling,
general
and
administrative
|
Other
Acquisition Related Charges
|
Interest
and other income, net
|
Income
tax provision (benefit)
|
||
|
Systems
|
Components
|
||||||
|
Amortization
of intangible assets
|
$ -
|
$ 1,164
|
$ -
|
$ -
|
$ -
|
$ -
|
$ -
|
|
Stock-based
compensation expense
|
-
|
218
|
178
|
762
|
-
|
-
|
-
|
|
Tax
effect
|
-
|
-
|
-
|
-
|
-
|
-
|
(33)
|
|
$ -
|
$ 1,382
|
$ 178
|
$ 762
|
$ -
|
$ -
|
$ (33)
|
|
|
TWELVE
MONTHS ENDED
|
|||||||
|
December
30, 2007
|
|||||||
|
Gross
Margin
|
Research
and
development
|
Selling,
general
and
administrative
|
Other
Acquisition Related Charges
|
Interest
and other income, net
|
Income
tax provision (benefit)
|
||
|
Systems
|
Components
|
||||||
|
Fair
value adjustment to deferred revenue
|
$ 1,142
|
$ -
|
$ -
|
$ -
|
$ -
|
$ -
|
$ -
|
|
Amortization
of intangible assets
|
20,085
|
4,767
|
-
|
3,688
|
-
|
-
|
-
|
|
Stock-based
compensation expense
|
8,187
|
4,213
|
1,817
|
36,995
|
-
|
-
|
-
|
|
Purchased
in-process research and development
|
-
|
-
|
-
|
-
|
9,575
|
-
|
-
|
|
Impairment
of acquisition-related intangibles
|
-
|
-
|
-
|
-
|
14,068
|
-
|
-
|
|
Write-off
of unamortized debt issuance costs
|
-
|
-
|
-
|
-
|
-
|
8,260
|
-
|
|
Tax
effect
|
-
|
-
|
-
|
-
|
-
|
-
|
(18,754)
|
|
$ 29,414
|
$ 8,980
|
$ 1,817
|
$ 40,683
|
$ 23,643
|
$ 8,260
|
$ (18,754)
|
|
|
December
31, 2006
|
|||||||
|
Gross
Margin
|
Research
and
development
|
Selling,
general
and
administrative
|
Other
Acquisition Related Charges
|
Interest
and other income, net
|
Income
tax provision (benefit)
|
||
|
Systems
|
Components
|
||||||
|
Amortization
of intangible assets
|
$ -
|
$ 4,690
|
$ -
|
$ -
|
$ -
|
$ -
|
$ -
|
|
Stock-based
compensation expense
|
-
|
846
|
1,197
|
2,821
|
-
|
-
|
-
|
|
Tax
effect
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
|
$ -
|
$ 5,536
|
$ 1,197
|
$ 2,821
|
$ -
|
$ -
|
$ -
|
|