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 29,
2009
___________________
|
SunPower
Corporation
|
|
(Exact
Name of Registrant as Specified in
Charter)
|
___________________
|
Delaware
|
001-34166
|
94-3008969
|
|
(State
or Other Jurisdiction
|
(Commission
|
(IRS
Employer
|
|
of
Incorporation)
|
File
No.)
|
Identification
No.)
|
|
3939
North First Street, San Jose, California 95134
|
|
(Address
of Principal Executive Offices) (Zip
Code)
|
Registrant’s
telephone number, including area code: (408) 240-5500
|
N/A
|
|
(Former
Name or Former Address, if Changed Since Last
Report)
|
___________________
|
Check
the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any
of the following provisions (see General Instruction
A.2. below):
|
|
|
|
Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
|
|
|
Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
|
|
|
Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
|
|
|
Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
|
Item
2.02. Results of Operations and Financial Condition.
On
January 29, 2009, SunPower Corporation issued the press release attached as
Exhibit 99.1 hereto announcing its results of operations for the fourth 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 January 29, 2009
|
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
|
SUNPOWER
CORPORATION
|
|
|
Date:
January 29, 2009
|
By:
/s/ DENNIS V. ARRIOLA
|
|
Name:
Dennis V. Arriola
|
|
|
Title:
Senior Vice President and Chief Financial
Officer
|
|
Exhibit No.
|
Description
|
|
|
99.1
|
Press
Release dated January 29, 2009
|
FOR
IMMEDIATE RELEASE
SunPower
Contacts
Investors
Bob
Okunski
408-240-5447
Bob.Okunski@sunpowercorp.com
Media
Helen
Kendrick
408-240-5585
Helen.Kendrick@sunpowercorp.com
SunPower
Reports Record Fourth-Quarter and
Fiscal
Year 2008 Results
|
·
|
Generated
fourth quarter 2008 revenue of $401 million, up 79%
year-on-year
|
|
·
|
Recorded
fiscal year 2008 revenue of $1.43 billion, up 85%
year-on-year
|
|
·
|
Achieved
fourth quarter 2008 GAAP net income per share of $0.35, $0.70
non-GAAP
|
|
·
|
Announced
two multi-year agreements with European integrators totaling 230
megawatts
|
|
·
|
Added
more than 350 residential and small-commercial dealers worldwide in
2008
|
|
·
|
Appointed
Dennis Arriola as the company’s new chief financial
officer
|
|
·
|
Maintained
strong liquidity with over $436 million in cash and
investments
|
|
·
|
Expects
fiscal year 2009 revenue of $1.6 billion to $2.0
billion
|
SAN JOSE, Calif., January 29,
2009 – SunPower Corporation (NASDAQ: SPWRA, SPWRB) today announced record
financial results for its 2008 fourth quarter and fiscal year, which ended Dec.
28, 2008. Revenue for the 2008 fourth quarter was $401 million and
compares to $378 million in the third-quarter of 2008 and $224 million in the
fourth-quarter of last year. The Components and Systems segments
accounted for 56% and 44% of fourth-quarter revenue, respectively.
“Our
fourth-quarter performance reflects the continued strength of our vertically
integrated business model, broad channel reach and geographic diversification,”
said Tom Werner, SunPower’s CEO. “Our flexible model enables us to
rapidly deploy our solutions across multiple geographies, especially in our
worldwide dealer network where we continue to see strong demand both in the
United States and Europe. Our Systems business also executed well in
the fourth quarter as we commissioned dozens of large scale solar projects
globally.”
On a GAAP
basis for the 2008 fourth quarter, SunPower reported gross margin of 27.9%,
total operating income of $55 million and net income per diluted share of
$0.35.
On a
non-GAAP basis, adjusted to exclude non-cash charges for amortization of
intangible assets of $4.2 million and stock-based compensation of $18.2 million,
SunPower reported total gross margin of 29.9%, operating income of $77.5 million
and net income per diluted share of $0.70. This compares with
prior-quarter non-GAAP gross margin of 29.2%, total operating income of $73
million and $0.58 net income per diluted share. For the 2008 fourth
quarter, Components segment gross margin was 35.6% and Systems segment gross
margin was 22.7%. The company’s GAAP and Non-GAAP fourth-quarter
results include a $6.3 million, or $0.07 net income per diluted share, foreign
currency gain related to its Korean joint venture.
“Long-term
solar market fundamentals remain in place and we are encouraged by the
commitment to renewable energy by President Obama and Congressional leadership,”
continued Werner. “Given these factors, we are well positioned to
take advantage of growing global demand for solar this year and in the future,
despite uncertainty in today’s economic and credit environment.”
2009
Guidance
The
company expects the following fiscal year 2009 non-GAAP
results: total revenue of $1.6 billion to $2.0 billion, net income
per diluted share of $2.20 to $2.801 and
production capacity of more than 450 megawatts.
“The
long-term solar industry fundamentals remain very positive and the company’s
2009 sales pipeline is made up of identifiable customers and projects,” said
Dennis Arriola, SunPower’s chief financial officer. “Given the
continuing weak credit environment, our ability to meet the high-end of the
revenue and earnings-per-share ranges will be dependent on improved access to
the project financing markets. We expect our first-half of 2009
performance to be materially affected by seasonal factors and the continuing
impact of the credit crisis.”
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 supplemental information related to its
fourth-quarter 2008 performance on the Events and Presentations section of the
Investor Relations page located on the SunPower website at www.sunpowercorp.com.
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 2009, we expect the following total company GAAP results: Revenue of
$1.6 billion to $2.0 billion and net income per diluted share of $1.40 to
$1.90.
Forward-Looking
Statements
This
press release contains forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995. Forward-looking
statements are statements that do not represent historical facts and may be
based on underlying assumptions. The company uses words and phrases such as
“expects,” “continue,” “growing,” “will,” to identify forward-looking statements
in this press release, including forward-looking statements regarding: (a)
GAAP and non-GAAP fiscal year 2009 total revenue and net income per diluted
share; (b) strong demand in the US and Europe; (c) growing global demand for
solar this year and in the future, despite uncertainty in today’s economic and
credit environment; (d) 2009 annual production capacity of more than 450
megawatts; and (e) first-half of 2009 performance being materially affected by
seasonal factors and the continuing impact of the credit crisis. Such
forward-looking statements are based on information available to the company as
of the date of this release and involve a number of risks and uncertainties,
some beyond the company’s control, that could cause actual results to differ
materially from those anticipated by these forward-looking statements, including
risks and uncertainties such as: (i) the company’s ability to obtain and
maintain an adequate supply of raw materials and components, as well as the
price it pays for such; (ii) general business and economic conditions, including
seasonality of the industry; (iii) growth trends in the solar power industry;
(iv) the continuation of governmental and related economic incentives promoting
the use of solar power; (v) the improved availability of third-party financing
arrangements for the company’s customers; (vi) construction difficulties or
potential delays, including permitting and transmission access and upgrades;
(vii) the company’s ability to ramp new production lines and realize expected
manufacturing efficiencies; (viii) manufacturing difficulties that could arise;
(ix) the success of the company’s ongoing research and development efforts to
compete with other companies and competing technologies; and (x) other risks
described in the company’s Quarterly Report on Form 10-Q for the quarter ended
September 28, 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.
Segment
Reporting Information
For
fourth-quarter and fiscal year 2008 reporting purposes, the Systems segment
generally represents products and services sold directly to the system
owner. Additionally, both SunPower and third-party solar panels sold
through the Systems segment channels are recorded as Systems segment revenue.
The Components segment primarily represents products sold to installers and
resellers.
Non-GAAP
Measures
To
supplement the consolidated financial results prepared under GAAP, SunPower uses
non-GAAP measures which are adjusted from the most directly comparable GAAP
results to exclude 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)
|
||||||||
|
Dec.
28,
|
Dec.
30,
|
|||||||
|
2008
|
2007
|
|||||||
|
ASSETS
|
||||||||
|
Cash
and cash equivalents
|
$
|
219,774
|
$
|
285,214
|
||||
|
Restricted
cash
|
175,277
|
67,887
|
||||||
|
Investments
|
40,756
|
134,503
|
||||||
|
Accounts
receivable, net
|
194,222
|
138,250
|
||||||
|
Costs
and estimated earnings in excess of billings
|
30,326
|
39,136
|
||||||
|
Inventories
|
251,388
|
148,820
|
||||||
|
Prepaid
expenses and other assets
|
170,328
|
65,084
|
||||||
|
Advances
to suppliers
|
162,610
|
161,220
|
||||||
|
Property,
plant and equipment, net
|
612,687
|
377,994
|
||||||
|
Goodwill
and other intangible assets, net
|
236,210
|
235,630
|
||||||
|
Total
assets
|
$
|
2,093,578
|
$
|
1,653,738
|
||||
|
LIABILITIES
AND STOCKHOLDERS' EQUITY
|
||||||||
|
Accounts
payable
|
$
|
280,684
|
$
|
119,869
|
||||
|
Accrued
and other liabilities
|
191,114
|
105,476
|
||||||
|
Long-term
debt
|
54,598
|
—
|
||||||
|
Convertible
debt
|
423,608
|
425,000
|
||||||
|
Billings
in excess of costs and estimated earnings
|
11,806
|
69,900
|
||||||
|
Customer
advances
|
110,394
|
69,403
|
||||||
|
Total
liabilities
|
1,072,204
|
789,648
|
||||||
|
Stockholders'
equity
|
1,021,374
|
864,090
|
||||||
|
Total
liabilities and stockholders' equity
|
$
|
2,093,578
|
$
|
1,653,738
|
||||
|
SUNPOWER
CORPORATION
|
||||||||||||||||||||
|
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
|
||||||||||||||||||||
|
(In
thousands, except per share data)
|
||||||||||||||||||||
|
(Unaudited)
|
||||||||||||||||||||
|
THREE
MONTHS ENDED
|
TWELVE
MONTHS ENDED
|
|||||||||||||||||||
|
Dec.
28,
|
Sept.
28,
|
Dec.
30,
|
Dec.
28,
|
Dec.
30,
|
||||||||||||||||
|
2008
|
2008
|
2007
|
2008
|
2007
|
||||||||||||||||
|
Revenue
|
||||||||||||||||||||
|
Systems
|
$
|
177,858
|
$
|
193,330
|
$
|
123,912
|
$
|
820,632
|
$
|
464,178
|
||||||||||
|
Components
|
223,109
|
184,170
|
100,431
|
614,287
|
310,612
|
|||||||||||||||
|
400,967
|
377,500
|
224,343
|
1,434,919
|
774,790
|
||||||||||||||||
|
Cost
of systems revenue
|
142,489
|
158,730
|
97,416
|
653,569
|
386,511
|
|||||||||||||||
|
Cost
of components revenue
|
146,768
|
113,149
|
79,745
|
417,669
|
240,475
|
|||||||||||||||
|
289,257
|
271,879
|
177,161
|
1,071,238
|
626,986
|
||||||||||||||||
|
Gross
margin
|
111,710
|
105,621
|
47,182
|
363,681
|
147,804
|
|||||||||||||||
|
Operating
expenses:
|
||||||||||||||||||||
|
Research
and development
|
5,970
|
6,049
|
3,904
|
21,474
|
13,563
|
|||||||||||||||
|
Selling,
general and administrative
|
50,599
|
46,075
|
32,068
|
173,740
|
108,256
|
|||||||||||||||
|
Purchased
in-process research and development
|
—
|
—
|
—
|
—
|
9,575
|
|||||||||||||||
|
Impairment
of acquisition-related intangibles
|
—
|
—
|
—
|
—
|
14,068
|
|||||||||||||||
|
Total
operating expenses
|
56,569
|
52,124
|
35,972
|
195,214
|
145,462
|
|||||||||||||||
|
Operating
income
|
55,141
|
53,497
|
11,210
|
168,467
|
2,342
|
|||||||||||||||
|
Interest
and other income (expense), net
|
(16,165
|
)
|
(4,452
|
)
|
(3,761
|
)
|
(20,883
|
)
|
1,218
|
|||||||||||
|
Income
before income taxes and equity in earnings of unconsolidated
investees
|
38,976
|
49,045
|
7,449
|
147,584
|
3,560
|
|||||||||||||||
|
Income
tax provision (benefit)
|
19,499
|
29,797
|
2,509
|
69,368
|
(5,920
|
)
|
||||||||||||||
|
Income
before equity in earnings of unconsolidated investees
|
19,477
|
19,248
|
4,940
|
78,216
|
9,480
|
|||||||||||||||
|
Equity
in earnings of unconsolidated investees, net of taxes
|
10,072
|
2,131
|
(64
|
)
|
14,077
|
(278
|
)
|
|||||||||||||
|
Net
income
|
$
|
29,549
|
$
|
21,379
|
$
|
4,876
|
$
|
92,293
|
$
|
9,202
|
||||||||||
|
Net
income per share:
|
||||||||||||||||||||
|
-
Basic
|
$
|
0.35
|
$
|
0.27
|
$
|
0.06
|
$
|
1.15
|
$
|
0.12
|
||||||||||
|
-
Diluted
|
$
|
0.35
|
$
|
0.25
|
$
|
0.06
|
$
|
1.09
|
$
|
0.11
|
||||||||||
|
Shares
used in calculation of net income per share:
|
||||||||||||||||||||
|
-
Basic
|
83,244
|
80,465
|
78,164
|
80,522
|
75,413
|
|||||||||||||||
|
-
Diluted
|
85,599
|
84,488
|
85,588
|
84,446
|
81,227
|
|||||||||||||||
|
(In
thousands, except per share data)
|
|||||||||||||||||||||||||||||||||||||||||
|
THREE
MONTHS ENDED
|
TWELVE
MONTHS ENDED
|
THREE
MONTHS ENDED
|
TWELVE
MONTHS ENDED
|
||||||||||||||||||||||||||||||||||||||
|
Dec.
28,
|
Sep.
28,
|
Dec.
30,
|
Dec.
28,
|
Sept.
30,
|
Dec.
28,
|
Sep.
28,
|
Dec.
30,
|
Dec.
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
|
$
|
111,710
|
$
|
105,621
|
$
|
47,182
|
$
|
363,681
|
$
|
147,804
|
$
|
119,811
|
$
|
110,157
|
$
|
56,731
|
$
|
396,769
|
$
|
186,198
|
|||||||||||||||||||||
|
Operating
income
|
$
|
55,141
|
$
|
53,497
|
$
|
11,210
|
$
|
168,467
|
$
|
2,342
|
$
|
77,545
|
$
|
73,323
|
$
|
32,357
|
$
|
257,652
|
$
|
106,879
|
|||||||||||||||||||||
|
Net
income per share:
|
|||||||||||||||||||||||||||||||||||||||||
|
-Basic
|
$
|
0.35
|
$
|
0.27
|
$
|
0.06
|
$
|
1.15
|
$
|
0.12
|
$
|
0.72
|
$
|
0.61
|
$
|
0.43
|
$
|
2.39
|
$
|
1.37
|
|||||||||||||||||||||
|
-Diluted
|
$
|
0.35
|
$
|
0.25
|
$
|
0.06
|
$
|
1.09
|
$
|
0.11
|
$
|
0.70
|
$
|
0.58
|
$
|
0.39
|
$
|
2.28
|
$
|
1.27
|
|||||||||||||||||||||
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. 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
|
TWELVE
MONTHS ENDED
|
|||||||||||||||||||
|
Dec.
28,
|
Sept.
28,
|
Dec.
30,
|
Dec.
28,
|
Dec.
30,
|
||||||||||||||||
|
2008
|
2008
|
2007
|
2008
|
2007
|
||||||||||||||||
|
GAAP
gross margin
|
$
|
111,710
|
$
|
105,621
|
$
|
47,182
|
$
|
363,681
|
$
|
147,804
|
||||||||||
|
Fair
value adjustment to deferred revenue
|
—
|
—
|
—
|
—
|
1,142
|
|||||||||||||||
|
Amortization
of intangible assets
|
2,930
|
2,947
|
6,185
|
11,995
|
24,852
|
|||||||||||||||
|
Stock-based
compensation expense
|
5,171
|
4,875
|
3,364
|
18,890
|
12,400
|
|||||||||||||||
|
Impairment
of long-lived assets
|
—
|
(3,286
|
)
|
—
|
2,203
|
—
|
||||||||||||||
|
Non-GAAP
gross margin
|
$
|
119,811
|
$
|
110,157
|
$
|
56,731
|
$
|
396,769
|
$
|
186,198
|
||||||||||
|
GAAP
operating income
|
$
|
55,141
|
$
|
53,497
|
$
|
11,210
|
$
|
168,467
|
$
|
2,342
|
||||||||||
|
Fair
value adjustment to deferred revenue
|
—
|
—
|
—
|
—
|
1,142
|
|||||||||||||||
|
Amortization
of intangible assets
|
4,210
|
4,201
|
7,132
|
16,762
|
28,540
|
|||||||||||||||
|
Stock-based
compensation expense
|
18,194
|
18,911
|
14,015
|
70,220
|
51,212
|
|||||||||||||||
|
Purchased
in-process research and development
|
—
|
—
|
—
|
—
|
9,575
|
|||||||||||||||
|
Impairment
of acquisition-related intangibles
|
—
|
—
|
—
|
—
|
14,068
|
|||||||||||||||
|
Impairment
of long-lived assets
|
—
|
(3,286
|
)
|
—
|
2,203
|
—
|
||||||||||||||
|
Non-GAAP
operating income
|
$
|
77,545
|
$
|
73,323
|
$
|
32,357
|
$
|
257,652
|
$
|
106,879
|
||||||||||
|
NET
INCOME PER SHARE:
|
||||||||||||||||||||
|
THREE
MONTHS ENDED
|
TWELVE
MONTHS ENDED
|
|||||||||||||||||||
|
Dec.
28,
|
Sept.
28,
|
Dec.
30,
|
Dec.
28,
|
Dec.
30,
|
||||||||||||||||
|
2008
|
2008
|
2007
|
2008
|
2007
|
||||||||||||||||
|
Basic:
|
||||||||||||||||||||
|
GAAP
net income per share
|
$
|
0.35
|
$
|
0.27
|
$
|
0.06
|
$
|
1.15
|
$
|
0.12
|
||||||||||
|
Reconciling
items:
|
||||||||||||||||||||
|
Stock-based
compensation expense
|
0.22
|
0.24
|
0.18
|
0.87
|
0.67
|
|||||||||||||||
|
Impairment
of long-lived assets
|
—
|
(0.04
|
)
|
—
|
0.03
|
—
|
||||||||||||||
|
Purchase
accounting:
|
||||||||||||||||||||
|
Fair
value adjustment to deferred revenue
|
—
|
—
|
—
|
—
|
0.02
|
|||||||||||||||
|
Amortization
of intangible assets
|
0.05
|
0.05
|
0.09
|
0.21
|
0.38
|
|||||||||||||||
|
Purchased
in-process research and development
|
—
|
—
|
—
|
—
|
0.13
|
|||||||||||||||
|
Impairment
of acquisition-related intangibles
|
—
|
—
|
—
|
—
|
0.19
|
|||||||||||||||
|
Write-off
of unamortized debt issuance costs
|
—
|
—
|
0.11
|
0.01
|
0.11
|
|||||||||||||||
|
Tax
effect
|
0.10
|
0.09
|
(0.01
|
)
|
0.12
|
(0.25
|
)
|
|||||||||||||
|
Non-GAAP
net income per share
|
$
|
0.72
|
$
|
0.61
|
$
|
0.43
|
$
|
2.39
|
$
|
1.37
|
||||||||||
|
Diluted:
|
||||||||||||||||||||
|
GAAP
net income per share
|
$
|
0.35
|
$
|
0.25
|
$
|
0.06
|
$
|
1.09
|
$
|
0.11
|
||||||||||
|
Reconciling
items:
|
||||||||||||||||||||
|
Stock-based
compensation expenses
|
0.21
|
0.23
|
0.16
|
0.83
|
0.64
|
|||||||||||||||
|
Impairment
of long-lived assets
|
—
|
(0.04
|
)
|
—
|
0.03
|
—
|
||||||||||||||
|
Purchase
accounting:
|
||||||||||||||||||||
|
Fair
value adjustment to deferred revenue
|
—
|
—
|
—
|
—
|
0.01
|
|||||||||||||||
|
Amortization
of intangible assets
|
0.05
|
0.05
|
0.08
|
0.20
|
0.35
|
|||||||||||||||
|
Purchased
in-process research and development
|
—
|
—
|
—
|
—
|
0.12
|
|||||||||||||||
|
Impairment
of acquisition-related intangibles
|
—
|
—
|
—
|
—
|
0.17
|
|||||||||||||||
|
Write-off
of unamortized debt issuance costs
|
—
|
—
|
0.10
|
0.01
|
0.10
|
|||||||||||||||
|
Tax
effect
|
0.09
|
0.09
|
(0.01
|
)
|
0.12
|
(0.23
|
)
|
|||||||||||||
|
Non-GAAP
net income per share
|
$
|
0.70
|
$
|
0.58
|
$
|
0.39
|
$
|
2.28
|
$
|
1.27
|
||||||||||
|
Shares
used in calculation of GAAP net income per share:
|
||||||||||||||||||||
|
-
Basic
|
83,244
|
80,465
|
78,164
|
80,522
|
75,413
|
|||||||||||||||
|
-
Diluted
|
85,599
|
84,488
|
85,588
|
84,446
|
81,227
|
|||||||||||||||
|
Shares
used in calculation of non-GAAP net income per share:
|
||||||||||||||||||||
|
-Basic
|
83,244
|
80,465
|
78,164
|
80,522
|
75,413
|
|||||||||||||||
|
-Diluted
|
85,599
|
84,488
|
85,588
|
84,446
|
81,227
|
|||||||||||||||
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
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
|
$
|
1,089
|
$
|
-
|
$
|
1,280
|
$
|
-
|
$
|
-
|
$
|
-
|
||||||||||||||
|
Stock-based
compensation expense
|
3,084
|
2,087
|
1,218
|
11,805
|
-
|
-
|
-
|
|||||||||||||||||||||
|
Tax
effect
|
-
|
-
|
-
|
-
|
-
|
-
|
8,089
|
|||||||||||||||||||||
|
$
|
4,925
|
$
|
3,176
|
$
|
1,218
|
$
|
13,085
|
$
|
-
|
$
|
-
|
$
|
8,089
|
|||||||||||||||
|
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
|
-
|
-
|
-
|
|||||||||||||||||||||
|
Impairment
of long-lived assets
|
(1,343
|
)
|
(1,943
|
)
|
-
|
-
|
-
|
-
|
-
|
|||||||||||||||||||
|
Tax
effect
|
-
|
-
|
-
|
-
|
-
|
-
|
7,604
|
|||||||||||||||||||||
|
$
|
3,409
|
$
|
1,127
|
$
|
987
|
$
|
14,303
|
$
|
-
|
$
|
-
|
$
|
7,604
|
|||||||||||||||
|
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
|
)
|
||||||||||||||
|
TWELVE
MONTHS ENDED
|
||||||||||||||||||||||||||||
|
December
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
|
$
|
7,691
|
$
|
4,305
|
$
|
-
|
$
|
4,766
|
$
|
-
|
$
|
-
|
$
|
-
|
||||||||||||||
|
Stock-based
compensation expense
|
10,745
|
8,144
|
3,988
|
47,343
|
-
|
-
|
-
|
|||||||||||||||||||||
|
Impairment
of long-lived assets
|
-
|
2,203
|
-
|
-
|
-
|
-
|
-
|
|||||||||||||||||||||
|
Write-off
of unamortized debt issuance costs
|
-
|
-
|
-
|
-
|
-
|
972
|
-
|
|||||||||||||||||||||
|
Tax
effect
|
-
|
-
|
-
|
-
|
-
|
-
|
10,092
|
|||||||||||||||||||||
|
$
|
18,436
|
$
|
14,652
|
$
|
3,988
|
$
|
52,109
|
$
|
-
|
$
|
972
|
$
|
10,092
|
|||||||||||||||
|
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
|
)
|
||||||||||||||