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 16, 2008
___________________
|
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):
|
|
|
r
|
Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
|
|
r
|
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))
|
|
r
|
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 16, 2008, SunPower Corporation issued the press release attached as
Exhibit 99.1 hereto announcing its results of operations for the third quarter
of 2008.
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
|
Exhibit No.
|
Description
|
|
|
99.1
|
Press
Release dated October 16, 2008
|
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 16, 2008
|
By:
/s/ Emmanuel Hernandez
|
|
Name:
Emmanuel Hernandez
|
|
|
Title: Chief
Financial Officer
|
|
Exhibit No.
|
Description
|
|
|
99.1
|
Press
Release dated October 16, 2008
|
FOR
IMMEDIATE RELEASE
SunPower
Contacts:
Bob
Okunski
408-240-5447
Bob.okunski@sunpowercorp.com
Manny
Hernandez
408-240-5560
Emmanuel.hernandez@sunpowercorp.com
SunPower
Reports Third-Quarter 2008 Results
|
·
|
Generated
third quarter 2008 revenue of $377.5 million, up 61%
year-on-year
|
|
·
|
Achieved
$0.26 GAAP net income per share, $0.60
non-GAAP
|
|
·
|
Announced
agreements with Pacific Gas and Electric Co., and Florida Power &
Light Co., for power plants totaling 250 megawatts and 35 megawatts
respectively
|
|
·
|
Grew
residential and small-commercial rooftop dealer network by more than 25%
sequentially
|
|
·
|
500
systems representing 400 megawatts installed or under contract to date
worldwide
|
|
·
|
Dedicated
8.4-megawatt power plant in Isla Major, Spain – total Spanish systems
exceed 165 megawatts completed or under
contract
|
|
·
|
Completed
Cypress Semiconductor distribution of SunPower class B
shares
|
|
·
|
Achieved
free cash flow positive. Increased cash, cash equivalents and
investments by $95 million in Q3, business plan fully
funded.
|
SAN JOSE, Calif., October 16,
2008 – SunPower Corporation (NASDAQ: SPWRA, SPWRB) today announced
financial results for the third quarter 2008, which ended September 28,
2008. 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. Please
note that the company has posted additional, supplemental information related to
its third-quarter 2008 performance on the Events and Presentations section of
the Investor Relations page located on the SunPower website at www.sunpowercorp.com.
Revenue
for the 2008 third quarter was $377.5 million and compares to $382.8 million in
the second quarter of 2008 and $234.3 million in the third quarter of last
year. The Components and Systems segments accounted for 49% and 51%
of third quarter revenue, respectively.
For
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.
On a GAAP
basis, for the 2008 third-quarter, SunPower reported gross margin of 27.1%,
total operating income of $50.2 million and diluted net income per share of
$0.26. These figures include non-cash operating expenses for
amortization of purchase accounting intangible assets of $4.2 million, and
non-cash and stock-based compensation of $18.9 million.
On a
non-GAAP basis, adjusted to exclude non-cash charges for amortization of
intangible assets and stock-based compensation, SunPower reported total gross
margin of 29.2%, operating income of $73.3 million and diluted net income per
share of $0.60. This compares with prior-quarter non-GAAP gross
margin of 26.4%, total operating income of $67.6 million and $0.61 diluted net
income per share. Overall gross margin improvement reflected
continued growth in Components segment gross margin. For the 2008
third quarter, Components segment gross margin reached 39.2%, benefitting from
higher average conversion efficiency and better silicon utilization, continued
reduction in silicon costs, higher volume, and slightly higher average selling
prices. System segment gross margin was 19.7%, reflecting a shift in both
geographic and product mix.
“In the
third-quarter, SunPower continued to demonstrate the advantage of a
multi-segment, multi-geographic, vertical integration strategy as we executed
very well in an evolving policy environment,” said Tom Werner, SunPower’s
CEO. “By leveraging our flexible model, we expanded our global
footprint, opened up new markets and laid the foundation for long-term
success. Overall, global industry fundamentals remain strong and
demand is increasing across multiple geographies. Our cost reduction
roadmap is paying dividends as we are now selling at a levelized cost of energy
which is cost-effective for our customers as evidenced by our recent
utility-scale announcements with Pacific Gas and Electric Co. (PG&E), and
Florida Power & Light Co. With the recent extension of the U.S. Investment
Tax Credit, we now have a national solar market in the U.S. with long-term
visibility and significant additional demand potential in all three market
segments – residential, commercial and utility. We also saw
uncertainty removed from the Spanish market in the third
quarter. These developments make us even more confident in our
planned performance as we look into next year.
“In the
Components business segment, during the third quarter, we grew our worldwide
dealer network by more than 25 percent. This business is scaling very
rapidly building on our multi-year investment in the infrastructure to serve a
wide variety of markets using a core backbone of technology and
services. With this channel investment, we offer our customers not
only the best technology solutions but also the best customer experience which
is a key platform for the SunPower brand. In addition, our Components
business segment has further expanded its global footprint by delivering sales
into the Middle East.
“Our
Systems business segment recorded another strong quarter in the power plant and
commercial rooftop segments. To date, SunPower has installed, or has
under contract, more than 165 megawatts of solar capacity in Spain including our
recent dedication announcement of our 8.4 megawatt project in Isla Major,
Spain. Additionally, we continued to expand our leadership position
in the U.S. commercial market as Applied Materials activated a two-megawatt
combination of roof and parking lot systems at their corporate campus in the
third quarter, and we completed the largest single roof solar installation in
the U.S. for Toyota Motor Sales. We also announced a
building-integrated solar system surrounding the Living Roof at the new
California Academy of Sciences, and dedicated our SunPower PowerGuard® system on
the roof of the headquarters of the U.S. Department of Energy in Washington,
D.C.
“Our cost
reduction programs remain on track, enabling us to open up new markets such as
the U.S. utility market where the combination of our tracking and industry
leading cell technologies offer utilities a very competitive levelized cost of
energy. In a watershed announcement for the industry, we were
selected by PG&E to supply the California utility with 250-megawatts of
solar power by 2012. This project will be the first, true
utility-scale photovoltaic power plant in the world when completed, delivering
an average of 550,000 megawatt-hours of clean electricity
annually. The project is contracted to begin power delivery in 2010
and be fully operational in 2012. This win demonstrates that photovoltaic
technology is competitive with other utility-scale generation options
today. SunPower’s success in the utility-scale market is a
direct result of our high-efficiency solar panels paired with high-capacity
SunPower tracker technology, which generates up to 30 percent more energy than
fixed tilt systems.
“Due to
strong industry fundamentals, continued execution of our vertical integration
strategy, expected gross margin expansion, and our progress on our cost
reduction programs, we will materially meet our target operating model in the
fourth quarter. We are strategically well positioned for 2009 and
remain on track to realize our mission of reducing installed systems cost by 50%
from 2006 to 2012.
“Based on
the strong global demand trends that we are seeing, as well as our internal
execution on our goal of reducing system installed costs by 50% from 2006 to
2012, we expect the following fiscal year 2008 non-GAAP
results: total revenue of $1.44 billion to $1.46 billion and diluted
net income per share of $2.34 to $2.41. Consistent with our practice
of offering guidance for the current quarter, we expect fourth quarter 2008
non-GAAP total revenue of $405 million to $435 million, company non-GAAP gross
margin of 29% to 30% and non-GAAP diluted net income per share of $0.73 to
$0.80. We
also expect our 2009 total revenue to be in of the range of $2.05 billion to
$2.15 billion, production capacity of 450+ megawatts and non-GAAP diluted net
income per share of at least $3.501.
“On a
business segment basis, we expect the following non-GAAP results for the fourth
quarter 2008: Components segment revenue of $235 million to $255 million, and
gross margin of 37% to 37.5%; Systems segment revenue of $170 million to $180
million and gross margin of 18% to 19%2. We
expect the Components segment to benefit from the continued manufacturing ramp
of our next-generation technology and lower silicon cost and the Systems segment
to reflect a combination of changes in project and regional mix,” concluded
Werner.
About
SunPower
SunPower
Corporation (Nasdaq: SPWRA, SPWRB) 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,
Australia, and Asia. For more information, visit
www.sunpowercorp.com.
1 For the
full year 2008, we expect the following total company GAAP results: Revenue of
$1.44 billion to $1.46 billion and diluted net income per share of $1.08 to
$1.15. For the fourth quarter of 2008, we expect the following total company
GAAP results: Revenue of $405 million to $435 million; gross margin of
approximately 26.8 percent to 27.8 percent and diluted net income per share of
$0.34 to $0.41. For the full year 2009, we expect the following total company
GAAP results: Revenue of $2.05 billion to $2.15 billion and diluted net income
per share of at least $2.10.
2 For the
fourth quarter of 2008, we expect the Components business segment to generate
GAAP revenue of $235 million to $255 million and gross margin of approximately
35.5 percent to 36 percent and the Systems business segment to generate GAAP
revenue of $170 million to $180 million and gross margin of approximately 15
percent to 16 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 and may be based on underlying assumptions that that are
forward-looking. The company uses words and phrases such as “plan,”
“increasing,” “roadmap,” “visibility,” potential,” “is scaling,” “will,” “to
begin,” “to realize,” “expect,” 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) business plan being fully funded; (b) demand
increasing across multiple geographies; (c) the company’s cost reduction roadmap
paying dividends; (d) recent extension of U.S. investment tax credit providing a
national solar market in the U.S. with long-term visibility and significant
additional demand potential in all three market segments – residential,
commercial and utility;
(e)
components business scaling very rapidly building on the company’s multi-year
investment in the infrastructure to serve a wide variety of markets using a core
backbone of technology and services; (f) the company’s constructing a 250
megawatt solar power plant between 2010 and 2012, ultimately delivering an
average of 550,000 megawatt-hours of clean electricity annually; (g) the company
achieving certain GAAP and non-GAAP results, including (1) total revenue and
diluted net income per share for fiscal years 2008 and 2009, (2) total revenue,
gross margin percentage, and diluted net income per share for the fourth quarter
of fiscal year 2008, and (3) Components segment and Systems segment revenue and
gross margin percentage for the fourth quarter of fiscal year 2008; (h) the
company materially meeting its target operating model in the fourth quarter; (i)
the company realizing its mission of reducing installed systems cost by 50% from
2006 to 2012; (j) production capacity of 450+ megawatts for 2009; and (k) the
preliminary results the company is reporting for its third fiscal quarter, which
remain subject to regular quarter-end review and later audit by its independent
auditors. These forward-looking statements are based on information
available to the company as of the date of this release and management’s 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 the company's control. In
particular, risks and uncertainties that could cause actual results to differ
include: (i) the company’s ability to obtain and maintain an adequate
supply of polysilicon, ingots, wafers and other materials, components and
products to manufacture its component products and design and construct its
systems, as well as the price it pays for such materials, components and
products; (ii) business and economic conditions and growth trends in the solar
power industry; (iii) the continuation of governmental and related economic
incentives promoting the use of solar power; (iv) the continued availability of
third-party financing arrangements for the company’s customers; (v) construction
difficulties or potential delays in the project implementation process,
including transmission access and upgrades; (vi) unanticipated delays or
difficulties securing necessary permits, licenses or other governmental
approvals, including approval of the contracts by the California Public
Utilities Commission; (vii) the risk of continuation of supply of products and
components from suppliers; (viii) unanticipated problems with deploying the
system on the sites; (ix) the company’s ability to ramp new production lines and
realize expected manufacturing efficiencies; (x) unforeseen manufacturing
equipment delays at the company’s fabrication facilities and panel factories;
(xi) the company’s ability to utilize thinner wafers, reduce kerf loss and
otherwise achieve anticipated improvements in polysilicon usage efficiency;
(xii) production difficulties that could arise; (xiii) the success of the
company’s ongoing research and development efforts; (xiv) the company’s ability
to compete with other companies and competing technologies; (xv) liquidated
damages or customer refunds for late installations arising on large scale solar
projects (xvi) unanticipated changes in the mix of balance of systems sales;
(xvii) the company’s ability to successfully transition to its new ERP and
accounting system and the potential impact of such on its reported results in
this press release (which remain subject to regular quarter-end review by its
internal auditors) and its periodic reports; and (xviii) other risks described
in the company’s Quarterly Report on Form 10-Q for the quarter ended June 29,
2008, 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.
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, impairment of
long-lived assets, 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. All other trademarks are the
property of their respective owners.
|
SUNPOWER
CORPORATION
|
||||||||
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
||||||||
|
(In
thousands)
|
||||||||
|
(Unaudited)
|
||||||||
|
Sept.
28,
|
Dec.
30,
|
|||||||
|
2008
|
2007
|
|||||||
|
ASSETS
|
||||||||
|
Cash
and cash equivalents
|
$
|
271,394
|
$
|
285,214
|
||||
|
Restricted
cash
|
110,040
|
67,887
|
||||||
|
Investments
|
49,221
|
134,503
|
||||||
|
Accounts
receivable, net
|
195,339
|
138,250
|
||||||
|
Costs
and estimated earnings in excess of billings
|
56,717
|
39,136
|
||||||
|
Inventories
|
190,487
|
140,504
|
||||||
|
Deferred
project costs
|
12,031
|
8,316
|
||||||
|
Prepaid
expenses and other assets
|
121,937
|
65,084
|
||||||
|
Advances
to suppliers
|
144,915
|
161,220
|
||||||
|
Property,
plant and equipment, net
|
536,713
|
377,994
|
||||||
|
Goodwill
and other intangible assets, net
|
240,641
|
235,630
|
||||||
|
Total
assets
|
$
|
1,929,435
|
$
|
1,653,738
|
||||
|
LIABILITIES
AND STOCKHOLDERS' EQUITY
|
||||||||
|
Accounts
payable
|
$
|
259,093
|
$
|
119,869
|
||||
|
Accrued
and other liabilities
|
122,721
|
105,476
|
||||||
|
Convertible
debt
|
425,000
|
425,000
|
||||||
|
Billings
in excess of costs and estimated earnings
|
9,640
|
69,900
|
||||||
|
Customer
advances
|
116,572
|
69,403
|
||||||
|
Total
liabilities
|
933,026
|
789,648
|
||||||
|
Stockholders'
equity
|
996,409
|
864,090
|
||||||
|
Total
liabilities and stockholders' equity
|
$
|
1,929,435
|
$
|
1,653,738
|
||||
|
SUNPOWER
CORPORATION
|
||||||||||||||||||||
|
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
|
||||||||||||||||||||
|
(In
thousands, except per share data)
|
||||||||||||||||||||
|
(Unaudited)
|
||||||||||||||||||||
|
THREE
MONTHS ENDED
|
NINE
MONTHS ENDED
|
|||||||||||||||||||
|
Sept.
28,
|
Jun.
29,
|
Sept.
30,
|
Sept.
28,
|
Sept.
30,
|
||||||||||||||||
|
2008
|
2008
|
2007
|
2008
|
2007
|
||||||||||||||||
|
Revenue
|
||||||||||||||||||||
|
Systems
|
$
|
193,330
|
$
|
270,593
|
$
|
157,734
|
$
|
642,774
|
$
|
340,266
|
||||||||||
|
Components
|
184,170
|
112,158
|
76,600
|
391,178
|
210,181
|
|||||||||||||||
|
377,500
|
382,751
|
234,334
|
1,033,952
|
550,447
|
||||||||||||||||
|
Cost
of systems revenue
|
160,073
|
209,137
|
135,111
|
512,423
|
289,095
|
|||||||||||||||
|
Cost
of components revenue
|
115,092
|
80,584
|
60,818
|
272,844
|
160,730
|
|||||||||||||||
|
275,165
|
289,721
|
195,929
|
785,267
|
449,825
|
||||||||||||||||
|
Gross
margin
|
102,335
|
93,030
|
38,405
|
248,685
|
100,622
|
|||||||||||||||
|
Operating
expenses:
|
||||||||||||||||||||
|
Research
and development
|
6,049
|
4,813
|
3,902
|
15,504
|
9,659
|
|||||||||||||||
|
Selling,
general and administrative
|
46,075
|
43,208
|
27,708
|
123,141
|
76,188
|
|||||||||||||||
|
Purchased
in-process research and development
|
—
|
—
|
—
|
—
|
9,575
|
|||||||||||||||
|
Impairment
of acquisition-related intangibles
|
—
|
—
|
—
|
—
|
14,068
|
|||||||||||||||
|
Total
operating expenses
|
52,124
|
48,021
|
31,610
|
138,645
|
109,490
|
|||||||||||||||
|
Operating
income (loss)
|
50,211
|
45,009
|
6,795
|
110,040
|
(8,868
|
)
|
||||||||||||||
|
Interest
and other income (expense), net
|
(803
|
)
|
(1,362
|
)
|
3,032
|
805
|
4,765
|
|||||||||||||
|
Income
(loss) before income taxes
|
49,408
|
43,647
|
9,827
|
110,845
|
(4,103
|
)
|
||||||||||||||
|
Income
tax provision (benefit)
|
27,019
|
15,039
|
1,396
|
47,091
|
(8,429
|
)
|
||||||||||||||
|
Net
income
|
$
|
22,389
|
$
|
28,608
|
$
|
8,431
|
$
|
63,754
|
$
|
4,326
|
||||||||||
|
Net
income per share:
|
||||||||||||||||||||
|
-
Basic
|
$
|
0.28
|
$
|
0.36
|
$
|
0.11
|
$
|
0.80
|
$
|
0.06
|
||||||||||
|
-
Diluted
|
$
|
0.26
|
$
|
0.34
|
$
|
0.10
|
$
|
0.76
|
$
|
0.05
|
||||||||||
|
Shares
used in calculation of net income per share:
|
||||||||||||||||||||
|
-
Basic
|
80,465
|
79,412
|
77,693
|
79,614
|
75,516
|
|||||||||||||||
|
-
Diluted
|
84,488
|
84,036
|
82,610
|
84,061
|
80,526
|
|||||||||||||||
|
(In
thousands, except per share data)
|
|||||||||||||||||||||||||||||||||||||||||
|
THREE
MONTHS ENDED
|
NINE
MONTHS ENDED
|
THREE
MONTHS ENDED
|
NINE
MONTHS ENDED
|
||||||||||||||||||||||||||||||||||||||
|
Sept.
28,
|
Jun.
29,
|
Sept.
30,
|
Sept.
28,
|
Sept.
30,
|
Sept.
28,
|
Jun.
29,
|
Sept.
30,
|
Sept.
28,
|
Sept.
30,
|
||||||||||||||||||||||||||||||||
|
2008
|
2008
|
2007
|
2008
|
2007
|
2008
|
2008
|
2007
|
2008
|
2007
|
||||||||||||||||||||||||||||||||
|
(Presented
on a GAAP Basis)
|
(Presented
on a non-GAAP Basis)
|
||||||||||||||||||||||||||||||||||||||||
|
Gross
margin
|
$
|
102,335
|
$
|
93,030
|
$
|
38,405
|
$
|
248,685
|
$
|
100,622
|
$
|
110,157
|
$
|
101,066
|
$
|
47,904
|
$
|
276,958
|
$
|
129,468
|
|||||||||||||||||||||
|
Operating
income (loss)
|
$
|
50,211
|
$
|
45,009
|
$
|
6,795
|
$
|
110,040
|
$
|
(8,868
|
)
|
$
|
73,323
|
$
|
67,650
|
$
|
27,017
|
$
|
180,107
|
$
|
74,522
|
||||||||||||||||||||
|
Net
income per share:
|
|||||||||||||||||||||||||||||||||||||||||
|
-Basic
|
$
|
0.28
|
$
|
0.36
|
$
|
0.11
|
$
|
0.80
|
$
|
0.06
|
$
|
0.63
|
$
|
0.64
|
$
|
0.35
|
$
|
1.69
|
$
|
0.93
|
|||||||||||||||||||||
|
-Diluted
|
$
|
0.26
|
$
|
0.34
|
$
|
0.10
|
$
|
0.76
|
$
|
0.05
|
$
|
0.60
|
$
|
0.61
|
$
|
0.33
|
$
|
1.60
|
$
|
0.87
|
|||||||||||||||||||||
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, impairment of long-lived assets, 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. 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, impairment of long-lived assets 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,
impairment of long-lived assets 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, impairment of
long-lived assets, 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, impairment of
long-lived assets, write-off of unamortized debt issuance
costs, 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 Impairment
of long-lived assets. SunPower incurred an impairment of long-lived assets in
the first quarter of fiscal 2008, which relates to the discontinuation of our
imaging detector product line and for the write-off of certain solar
manufacturing equipment which became obsolete due to new processes. 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 Write-off
of unamortized debt issuance costs. The market price trigger condition was
met for our senior convertible debentures in late December 2007, giving holders
of the convertible debt the right to convert the convertible debt in the first
quarter of fiscal 2008. 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 were fully amortized on
January 2, 2008.
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 acquisitions, 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 prior
acquisitions 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 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
|
|||||||||||||||||||
|
Sept.
28,
|
Jun.
29,
|
Sept.
30,
|
Sept.
28,
|
Sept.
30,
|
||||||||||||||||
|
2008
|
2008
|
2007
|
2008
|
2007
|
||||||||||||||||
|
GAAP
gross margin
|
$
|
102,335
|
$
|
93,030
|
$
|
38,405
|
$
|
248,685
|
$
|
100,622
|
||||||||||
|
Fair
value adjustment to deferred revenue
|
—
|
—
|
—
|
—
|
1,142
|
|||||||||||||||
|
Amortization
of intangible assets
|
2,947
|
2,907
|
5,911
|
9,066
|
18,668
|
|||||||||||||||
|
Stock-based
compensation expense
|
4,875
|
5,129
|
3,588
|
13,718
|
9,036
|
|||||||||||||||
|
Impairment
of long-lived assets
|
—
|
—
|
—
|
5,489
|
—
|
|||||||||||||||
|
Non-GAAP
gross margin
|
$
|
110,157
|
$
|
101,066
|
$
|
47,904
|
$
|
276,958
|
$
|
129,468
|
||||||||||
|
GAAP
operating income (loss)
|
$
|
50,211
|
$
|
45,009
|
$
|
6,795
|
$
|
110,040
|
$
|
(8,868
|
)
|
|||||||||
|
Fair
value adjustment to deferred revenue
|
—
|
—
|
—
|
—
|
1,142
|
|||||||||||||||
|
Amortization
of intangible assets
|
4,201
|
4,034
|
6,858
|
12,552
|
21,408
|
|||||||||||||||
|
Stock-based
compensation expense
|
18,911
|
18,607
|
13,364
|
52,026
|
37,197
|
|||||||||||||||
|
Purchased
in-process research and development
|
—
|
—
|
—
|
—
|
9,575
|
|||||||||||||||
|
Impairment
of acquisition-related intangibles
|
—
|
—
|
—
|
—
|
14,068
|
|||||||||||||||
|
Impairment
of long-lived assets
|
—
|
—
|
—
|
5,489
|
—
|
|||||||||||||||
|
Non-GAAP
operating income
|
$
|
73,323
|
$
|
67,650
|
$
|
27,017
|
$
|
180,107
|
$
|
74,522
|
||||||||||
|
NET
INCOME PER SHARE:
|
||||||||||||||||||||
|
THREE
MONTHS ENDED
|
NINE
MONTHS ENDED
|
|||||||||||||||||||
|
Sept.
28,
|
Jun.
29,
|
Sept.
30,
|
Sept.
28,
|
Sept.
30,
|
||||||||||||||||
|
2008
|
2008
|
2007
|
2008
|
2007
|
||||||||||||||||
|
Basic:
|
||||||||||||||||||||
|
GAAP
net income per share
|
$
|
0.28
|
$
|
0.36
|
$
|
0.11
|
$
|
0.80
|
$
|
0.06
|
||||||||||
|
Reconciling
items:
|
||||||||||||||||||||
|
Stock-based
compensation expense
|
0.24
|
0.23
|
0.17
|
0.65
|
0.49
|
|||||||||||||||
|
Impairment
of long-lived assets
|
—
|
—
|
—
|
0.07
|
—
|
|||||||||||||||
|
Purchase
accounting:
|
||||||||||||||||||||
|
Fair
value adjustment to deferred revenue
|
—
|
—
|
—
|
—
|
0.02
|
|||||||||||||||
|
Amortization
of intangible assets
|
0.05
|
0.05
|
0.09
|
0.16
|
0.28
|
|||||||||||||||
|
Purchased
in-process research and development
|
—
|
—
|
—
|
—
|
0.13
|
|||||||||||||||
|
Impairment
of acquisition-related intangibles
|
—
|
—
|
—
|
—
|
0.19
|
|||||||||||||||
|
Write-off
of unamortized debt issuance costs
|
—
|
—
|
—
|
0.01
|
—
|
|||||||||||||||
|
Tax
effect
|
0.06
|
—
|
(0.02
|
)
|
—
|
(0.24
|
)
|
|||||||||||||
|
Non-GAAP
net income per share
|
$
|
0.63
|
$
|
0.64
|
$
|
0.35
|
$
|
1.69
|
$
|
0.93
|
||||||||||
|
Diluted:
|
||||||||||||||||||||
|
GAAP
net income per share
|
$
|
0.26
|
$
|
0.34
|
$
|
0.10
|
$
|
0.76
|
$
|
0.05
|
||||||||||
|
Reconciling
items:
|
||||||||||||||||||||
|
Stock-based
compensation expenses
|
0.23
|
0.22
|
0.16
|
0.62
|
0.46
|
|||||||||||||||
|
Impairment
of long-lived assets
|
—
|
—
|
—
|
0.06
|
—
|
|||||||||||||||
|
Purchase
accounting:
|
||||||||||||||||||||
|
Fair
value adjustment to deferred revenue
|
—
|
—
|
—
|
—
|
0.01
|
|||||||||||||||
|
Amortization
of intangible assets
|
0.05
|
0.05
|
0.09
|
0.15
|
0.27
|
|||||||||||||||
|
Purchased
in-process research and development
|
—
|
—
|
—
|
—
|
0.12
|
|||||||||||||||
|
Impairment
of acquisition-related intangibles
|
—
|
—
|
—
|
—
|
0.17
|
|||||||||||||||
|
Write-off
of unamortized debt issuance costs
|
—
|
—
|
—
|
0.01
|
—
|
|||||||||||||||
|
Tax
effect
|
0.06
|
—
|
(0.02
|
)
|
—
|
(0.21
|
)
|
|||||||||||||
|
Non-GAAP
net income per share
|
$
|
0.60
|
$
|
0.61
|
$
|
0.33
|
$
|
1.60
|
$
|
0.87
|
||||||||||
|
Shares
used in calculation of GAAP net income per share:
|
||||||||||||||||||||
|
-
Basic
|
80,465
|
79,412
|
77,693
|
79,614
|
75,516
|
|||||||||||||||
|
-
Diluted
|
84,488
|
84,036
|
82,610
|
84,061
|
80,526
|
|||||||||||||||
|
Shares
used in calculation of non-GAAP net income per share:
|
||||||||||||||||||||
|
-Basic
|
80,465
|
79,412
|
77,693
|
79,614
|
75,516
|
|||||||||||||||
|
-Diluted
|
84,488
|
84,036
|
82,610
|
84,061
|
80,526
|
|||||||||||||||
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
28, 2008
|
||||||||||||||||||||||||||||
|
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
|
$
|
1,841
|
$
|
1,106
|
$
|
—
|
$
|
1,254
|
$
|
—
|
$
|
—
|
$
|
—
|
||||||||||||||
|
Stock-based
compensation expense
|
2,911
|
1,964
|
987
|
13,049
|
—
|
—
|
—
|
|||||||||||||||||||||
|
Tax
effect
|
—
|
—
|
—
|
—
|
—
|
—
|
5,186
|
|||||||||||||||||||||
|
$
|
4,752
|
$
|
3,070
|
$
|
987
|
$
|
14,303
|
$
|
—
|
$
|
—
|
$
|
5,186
|
|||||||||||||||
|
June
29, 2008
|
||||||||||||||||||||||||||||
|
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
|
$
|
1,841
|
$
|
1,066
|
$
|
—
|
$
|
1,127
|
$
|
—
|
$
|
—
|
$
|
—
|
||||||||||||||
|
Stock-based
compensation expense
|
2,239
|
2,890
|
972
|
12,506
|
—
|
—
|
—
|
|||||||||||||||||||||
|
Tax
effect
|
—
|
—
|
—
|
—
|
—
|
—
|
(118
|
)
|
||||||||||||||||||||
|
$
|
4,080
|
$
|
3,956
|
$
|
972
|
$
|
13,633
|
$
|
—
|
$
|
—
|
$
|
(118
|
)
|
||||||||||||||
|
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
|
)
|
||||||||||||||
|
NINE
MONTHS ENDED
|
||||||||||||||||||||||||||||
|
September
28, 2008
|
||||||||||||||||||||||||||||
|
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
|
$
|
5,850
|
$
|
3,216
|
$
|
—
|
$
|
3,486
|
$
|
—
|
$
|
—
|
$
|
—
|
||||||||||||||
|
Stock-based
compensation expense
|
7,661
|
6,057
|
2,770
|
35,538
|
—
|
—
|
—
|
|||||||||||||||||||||
|
Impairment
of long-lived assets
|
1,343
|
4,146
|
—
|
—
|
—
|
—
|
—
|
|||||||||||||||||||||
|
Write-off
of unamortized debt issuance costs
|
—
|
—
|
—
|
—
|
—
|
972
|
—
|
|||||||||||||||||||||
|
Tax
effect
|
—
|
—
|
—
|
—
|
—
|
—
|
(415
|
)
|
||||||||||||||||||||
|
$
|
14,854
|
$
|
13,419
|
$
|
2,770
|
$
|
39,024
|
$
|
—
|
$
|
972
|
$
|
(415
|
)
|
||||||||||||||
|
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
|
|||||||||||||||||||||||||||
|
Fair
value adjustment to deferred revenue
|
$
|
1,142
|
$
|
—
|
$
|
—
|
$
|
—
|
$
|
—
|
$
|
—
|
$
|
—
|
||||||||||||||
|
Amortization
of intangible assets
|
15,298
|
3,370
|
—
|
2,740
|
—
|
—
|
—
|
|||||||||||||||||||||
|
Stock-based
compensation expense
|
6,235
|
2,801
|
1,253
|
26,908
|
—
|
—
|
—
|
|||||||||||||||||||||
|
Purchased
in-process research and development
|
—
|
—
|
—
|
—
|
9,575
|
—
|
—
|
|||||||||||||||||||||
|
Impairment
of acquisition-related intangibles
|
—
|
—
|
—
|
—
|
14,068
|
—
|
—
|
|||||||||||||||||||||
|
Tax
effect
|
—
|
—
|
—
|
—
|
—
|
—
|
(17,761
|
)
|
||||||||||||||||||||
|
$
|
22,675
|
$
|
6,171
|
$
|
1,253
|
$
|
29,648
|
$
|
23,643
|
$
|
—
|
$
|
(17,761
|
)
|
||||||||||||||