Document
false0000867773SUNPOWER CORP 0000867773 2020-02-12 2020-02-12


 

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): February 12, 2020
 
 
SunPower Corporation
(Exact name of registrant as specified in its charter)

 
 
001-34166
(Commission File Number)
 
Delaware
94-3008969
(State or other jurisdiction
of incorporation)
(I.R.S. Employer
Identification No.)

51 Rio Robles, San Jose, California 95134
(Address of principal executive offices, with zip code)

(408) 240-5500
(Registrant’s telephone number, including area code)
 
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))

Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading Symbol
Name of exchange on which registered
Common Stock
SPWR
NASDAQ





Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
 







Item 2.02.
Results of Operations and Financial Condition.

On February 12, 2020, SunPower Corporation, a Delaware corporation (the “Company”), issued a press release, included as Exhibit 99.1 hereto, announcing its results of operations for its fourth quarter ended December 29, 2019.

The information furnished in Item 2.02 and Item 9.01 of this Current 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





SIGNATURE
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
 
 
 
February 12, 2020
By:
/S/ MANAVENDRA S. SIAL
 
Name:
Manavendra S. Sial
 
Title:
Executive Vice President and
Chief Financial Officer




Exhibit


Exhibit 99.1

Contacts:

Investors
Bob Okunski
408-240-5447
Bob.Okunski@sunpower.com

Media
Natalie Wymer
408-457-2348
Natalie.Wymer@sunpower.com

SunPower Reports Fourth Quarter and Fiscal Year 2019 Results
Strong Distributed Generation Market Demand, Materially Delevered Balance Sheet

SAN JOSE, Calif., Feb. 12, 2020 - SunPower Corp. (NASDAQ: SPWR) today announced financial results for its fourth quarter ended Dec. 29, 2019.

Fourth Quarter Company Highlights
Strong demand in U.S. and international distributed generation (DG) markets
Exceeded fourth quarter cash target, successful capital raise, business unit cash generation
Announced decision to create two strategically-aligned, and independent companies
SunPower Energy Services (SPES)
Record fourth quarter residential revenue with 27 percent megawatt (MW) growth versus fourth quarter 2018
Positive field results from residential Equinox Storage product beta tests
Strong commercial direct origination performance - restructuring commercial execution organization
SunPower Technologies (SPT)
Record global shipments - more than 80 percent year over year volume growth
Announced proposed spin-off of Maxeon Solar Technologies (Maxeon Solar) to shareholders
$298 million TZS equity investment in Maxeon Solar to accelerate Maxeon-5 capacity ramp







($ Millions, except percentages and per-share data)
4th Quarter 2019
3rd Quarter 2019
 4th Quarter 2018
Fiscal Year 2019
Fiscal Year 2018
GAAP revenue
$603.8
$476.0
$456.8
$1,864.2
$1,726.1
GAAP gross margin
15.8%
10.1%
(1.7%)
6.8%
(17.2%)
GAAP net income (loss)
$5.4
$(15.0)
$(158.2)
$22.2
$(811.1)
GAAP net income (loss) per diluted share
$0.03
$(0.11)
$(1.12)
$0.15
$(5.76)
Non-GAAP revenue1
$607.0
$491.7
$525.4
$1,992.1
$1,814.9
Non-GAAP gross margin1
20.8%
15.9%
6.9%
14.0%
7.5%
Non-GAAP net income (loss)1
$35.8
$10.6
$(30.3)
$(42.2)
$(101.4)
Non-GAAP net income (loss) per diluted share1
$0.23
$0.07
$(0.21)
$(0.29)
$(0.72)
Adjusted EBITDA1
$71.5
$42.0
$13.6
$97.8
$111.2
MW Recognized
707
586
461
2,455
1,355
Cash2
$423.0
$189.0
$309.4
$423.0
$309.4
1Information about SunPower's use of non-GAAP financial information, including a reconciliation to U.S. GAAP, is provided under "Use of Non-GAAP Financial Measures" below.
2Includes cash, and cash equivalents, excluding restricted cash

Fourth Quarter 2019 Results
“Overall, we exited the year with solid fourth quarter financial performance despite execution challenges in our commercial direct business,” said Tom Werner, SunPower CEO and chairman of the board. “We also achieved a number of important strategic milestones during the quarter. These included the announcement of our proposed Maxeon Solar spin-off and planned equity investment from TZS, initial installations of our residential Equinox Storage system as well as a successful capital raise and partial convertible bond retirement to further strengthen our balance sheet.”

SunPower Energy Services (SPES)
“The strategic decision to combine our residential and commercial dealer operations into a combined channels business is paying dividends as we posted strong financial results for this unit in the fourth quarter. Our residential business achieved record revenue and installation volume, and in new homes, we remain the market leader as we grew this business by more than 50 percent last year and exited 2019 with a backlog of 45,000 homes. We expect new homes volume growth to exceed 50 percent in 2020 as we leverage the current California new home solar mandate. Finally, we remain very excited about the launch of our Equinox Storage product as we added to our beta installations in the fourth quarter and see strong demand for Equinox Storage in 2020.

“In Commercial Direct, we maintained our market share lead and increased installation volume year over year. Our origination teams once again performed well, but deployment execution remained challenged. As a result of this underperformance, we have taken a number of steps to improve results including changes to our reporting structure, instituting new processes to streamline permitting and regulatory requirements and actions to improve installation execution. We now expect our commercial direct business to return to profitability in the second half of this year. Demand for our Helix Storage solution remains strong as evidenced by our plan to add 20 megawatt hours (MWh) of storage to the Chevron Lost Hills solar project, our largest commercial storage award to date. Additionally, our storage pipeline continues to expand, now exceeding 175-MW with attach rates of 35 percent.





SunPower Technologies (SPT)
“SPT posted a very strong quarter, beating our financial targets across the board including volume, revenue, margin, EBITDA, and cash flow. Growth was driven primarily by demand in the global DG markets, with DG volume up over 95 percent year-over-year. For the full year 2019, DG shipments grew approximately 75 percent. During the fourth quarter, we completed commercialization of our Maxeon 5 technology, ramping our first line-pair to full production. Customer demand for this product is strong, and the technology is ready for accelerated ramp consistent with the planned $298 million equity investment from TZS. Demand for our Performance Series (P-Series) product also remains high, comprising approximately half of our fourth quarter and full year 2019 shipment volume.

“Finally, we were pleased to announce the strategic decision to separate into two independent, complementary, strategically-aligned and publicly-traded companies: SunPower and Maxeon Solar. This separation will enable each company to focus on distinct offerings built on extensive experience across the solar value chain while, we believe, unlocking long-term shareholder value. We remain on track to complete the separation in the second quarter of fiscal 2020, subject to closing conditions,” Werner concluded.

Consolidated Financials
“Our solid fourth quarter performance reflects the results of our focus on the DG market and increased operational discipline,” said Manavendra Sial, SunPower chief financial officer. “In relation to the balance sheet, we increased our liquidity as we generated positive cash at the business unit level, completed a successful capital raise and retired more than $30 million of convertible debt in the first quarter of 2020. We also continued to prudently manage our expenses while meeting our cost reduction targets. We remain committed to achieving positive cash flow this year while continuing to improve our profitability throughout 2020.”

Fourth quarter fiscal year 2019 non-GAAP results exclude net adjustments that, in the aggregate, increased non-GAAP earnings by $30.4 million, including $27.5 million related to the cost of above-market polysilicon, $18.7 million related to business reorganization costs and restructuring charges, $8.0 million related to stock-based compensation expense, $1.8 million related to amortization of intangible assets, and $2.6 million related to other non-recurring items, partially offset by $28.2 million related to mark-to-market gain on equity investments, and tax effect of these items.

Financial Outlook
The company’s first quarter 2020 GAAP and non-GAAP guidance is as follows: on a GAAP basis, revenue of $435 million to $470 million, gross margin of 3 percent to 6 percent and net loss of $85 million to $70 million. On a non-GAAP basis, the company expects revenue of $435 million to $470 million, gross margin of 9 percent to 12 percent, Adjusted EBITDA of ($15) million to $0 million and MW deployed in the range of 520 MW to 570 MW.

The company's fiscal year 2020 GAAP and non-GAAP guidance is as follows: on a GAAP basis, revenue of $2.1 billion to $2.3 billion and a net loss of $195 million to $145 million. On a non-GAAP basis, revenue of $2.1 billion to $2.3 billion and operational expenses of less than $260 million. Gigawatts recognized is expected to be in the range of 2.5 GW to 2.75 GW and capital expenditures of approximately $100 million.






As a result of the restructuring of its commercial direct business, the company expects fiscal year 2020 Adjusted EBITDA guidance in the range of $125 million to $175 million.

The company will host a conference call for investors this afternoon to discuss its fourth quarter and fiscal year 2019 performance at 1:30 p.m. Pacific Time. The call will be webcast and can be accessed from SunPower’s website at http://investors.sunpower.com/events.cfm.

This press release contains both GAAP and non-GAAP financial information. Non-GAAP figures are reconciled to the closest GAAP equivalent categories in the financial attachment of this press release. Please note that the company has posted supplemental information and slides related to its fourth quarter and fiscal year 2019 performance on the Events and Presentations section of SunPower’s Investor Relations page at http://investors.sunpower.com/events.cfm.

About SunPower
As one of the world's most innovative and sustainable energy companies, SunPower Corporation (NASDAQ:SPWR) provides a diverse group of customers with complete solar solutions and services. Residential customers, businesses, governments, schools and utilities around the globe rely on SunPower's more than 30 years of proven experience. From the first flip of the switch, SunPower delivers maximum value and superb performance throughout the long life of every solar system. Headquartered in Silicon Valley, SunPower has dedicated, customer-focused employees in Africa, Asia, Australia, Europe, North and South America. For more information about how SunPower is changing the way our world is powered, visit www.sunpower.com.

Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including, but not limited to, statements regarding: (a) statements regarding the anticipated spin-off of Maxeon Solar, including timing and certainty, the associated benefits and costs to the newly separated companies, and the equity investment by TZS into Maxeon Solar and the use of proceeds from such investment; (b) our plans and expectations regarding expansion of Maxeon 5 production; (c) our expectations regarding business restructuring and anticipated impact on financial performance; (d) our expectations and plans regarding market traction, growth, demand, and volume; (e) our plans and expectations for our products and planned products, including anticipated markets and demand, cost impacts, and impacts on our financial performance and our ability to meet our targets and goals; (f) our plans and expectations for initiatives to improve execution and performance in our Commercial Direct business, including timing and anticipated impact on financial performance and the anticipated timing of returning to profitability; (g) our plans and expectations regarding manufacturing expansion, and production goals and ramps, including the timing of our Maxeon 5 and P-Series production expansion; (h) our expectations regarding 2020 financial performance, including plans to achieve positive cash flow and improve profitability; (i) our first quarter fiscal 2020 guidance, including GAAP revenue, gross margin, and net income/(loss), as well as non-GAAP revenue, gross margin, Adjusted EBITDA, and MW deployed, and related assumptions; and (j) fiscal year 2020 guidance, including, GAAP and non-GAAP revenue, net income/(loss), non-GAAP operational expenses, non-GAAP GW deployed, non- GAAP capital expenditures, and Adjusted EBITDA, and related assumptions.
These forward-looking statements are based on our current assumptions, expectations and beliefs and involve substantial risks and uncertainties that may cause results, performance or achievement to materially differ from those expressed or implied by these forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to: (1) challenges in executing





transactions key to our strategic plans, including regulatory and other challenges that may arise; (2) the success of our ongoing research and development efforts and our ability to commercialize new products and services, including products and services developed through strategic partnerships; (3) competition in the solar and general energy industry and downward pressure on selling prices and wholesale energy pricing; (4) our liquidity, substantial indebtedness, and ability to obtain additional financing for our projects and customers; (5) changes in public policy, including the imposition and applicability of tariffs; (6) regulatory changes and the availability of economic incentives promoting use of solar energy; (7) fluctuations in our operating results; (8) potential disruptions to our operation and supply chain that may result from epidemics or natural disasters; (9) appropriately sizing our manufacturing capacity and containing manufacturing and logistics difficulties that could arise; and (10) challenges managing our acquisitions, joint ventures and partnerships, including our ability to successfully manage acquired assets and supplier relationships. In addition, the proposed and the associated investment by TZS in Maxeon Solar may not be consummated within the anticipated period or at all and the ultimate results of any separation depend on a number of factors, including the development of final plans and the impact of local regulatory requirements. A detailed discussion of these factors and other risks that affect our business is included in filings we make with the Securities and Exchange Commission (SEC) from time to time, including our most recent reports on Form 10-K and Form 10-Q, particularly under the heading “Risk Factors.”  Copies of these filings are available online from the SEC or on the SEC Filings section of our Investor Relations website at investors.sunpower.com. All forward-looking statements in this press release are based on information currently available to us, and we assume no obligation to update these forward-looking statements in light of new information or future events.


©2020 SunPower Corporation. All rights reserved. SUNPOWER, the SUNPOWER logo, EQUINOX and HELIX are trademarks or registered trademarks of SunPower Corporation in the U.S. and other countries as well.










SUNPOWER CORPORATION
CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
 
December 29, 2019
 
December 30, 2018
Assets
 
 
 
Current assets:
 
 
 
Cash and cash equivalents
$
422,955

 
$
309,407

Restricted cash and cash equivalents, current portion
26,348

 
41,762

Restricted short-term marketable securities
6,187

 

Accounts receivable, net
226,476

 
175,605

Contract assets
99,426

 
58,994

Inventories
358,257

 
308,146

Advances to suppliers, current portion
107,388

 
37,878

Project assets - plants and land, current portion
12,650

 
10,796

Prepaid expenses and other current assets
121,244

 
131,183

Total current assets
1,380,931

 
1,073,771

 
 
 
 
Restricted cash and cash equivalents, net of current portion
9,354

 
12,594

Restricted long-term marketable securities

 
5,955

Property, plant and equipment, net
323,726

 
839,871

Operating lease right-of-use assets
51,258

 

Solar power systems leased and to be leased, net
54,338

 
92,557

Advances to suppliers, net of current portion
13,993

 
133,694

Long-term financing receivables, net - held for sale

 
19,592

Other intangible assets, net
7,466

 
12,582

Other long-term assets
330,855

 
162,033

Total assets
$
2,171,921

 
$
2,352,649

 
 
 
 
Liabilities and Equity
 
 
 
Current liabilities:
 
 
 
Accounts payable
$
441,759

 
$
325,550

Accrued liabilities
203,890

 
235,252

Operating lease liabilities, current portion
9,463

 

Contract liabilities, current portion
138,441

 
104,130

Short-term debt
104,856

 
40,074

Total current liabilities
898,409

 
705,006

 
 
 
 
Long-term debt
113,827

 
40,528

Convertible debt
820,259

 
818,356

Operating lease liabilities, net of current portion
46,089

 

Contract liabilities, net of current portion
67,538

 
99,509

Other long-term liabilities
204,300

 
839,136

Total liabilities
2,150,422

 
2,502,535

 
 
 
 
Equity:
 
 
 
Preferred stock

 

Common stock
168

 
141






Additional paid-in capital
2,661,819

 
2,463,370

Accumulated deficit
(2,449,679
)
 
(2,480,988
)
Accumulated other comprehensive loss
(9,512
)
 
(4,150
)
Treasury stock, at cost
(192,633
)
 
(187,069
)
Total stockholders' deficit
10,163

 
(208,696
)
Noncontrolling interests in subsidiaries
11,336

 
58,810

Total deficit
21,499

 
(149,886
)
Total liabilities and equity
$
2,171,921

 
$
2,352,649







SUNPOWER CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(Unaudited)
 
 
THREE MONTHS ENDED
 
TWELVE MONTHS ENDED
 
 
December 29, 2019
 
September 29, 2019
 
December 30, 2018
 
December 29, 2019
 
December 30, 2018
Revenue:
 
 
 
 
 
 
 
 
 
 
SunPower Energy Services
 
$
352,226

 
$
277,688

 
$
265,427

 
$
1,019,861

 
$
1,045,614

SunPower Technologies
 
434,708

 
333,896

 
277,256

 
1,314,379

 
1,069,010

Intersegment eliminations
 
(183,173
)
 
(135,626
)
 
(85,846
)
 
(470,015
)
 
(388,539
)
Total revenue
 
603,761

 
475,958

 
456,837

 
1,864,225

 
1,726,085

Cost of revenue:
 
 
 
 
 
 
 
 
 
 
SunPower Energy Services
 
306,698

 
248,417

 
245,301

 
915,455

 
889,410

SunPower Technologies
 
369,363

 
315,293

 
296,872

 
1,285,241

 
1,496,909

Intersegment eliminations
 
(167,439
)
 
(136,003
)
 
(77,765
)
 
(462,376
)
 
(363,153
)
Total cost of revenue
 
508,622

 
427,707

 
464,408

 
1,738,320

 
2,023,166

Gross profit (loss)
 
95,139

 
48,251

 
(7,571
)
 
125,905

 
(297,081
)
Operating expenses:
 
 
 
 
 
 
 
 
 
 
Research and development
 
18,262

 
16,101

 
15,481

 
67,515

 
81,705

Sales, general and administrative
 
70,875

 
64,734

 
53,839

 
260,443

 
260,111

Restructuring charges
 
8,039

 
4,283

 
(1,107
)
 
14,110

 
17,497

Loss on sale and impairment of residential lease assets
 
(2,931
)
 
10,756

 
81,086

 
25,352

 
251,984

Gain on business divestiture
 

 

 

 
(143,400
)
 
(59,347
)
Total operating expenses
 
94,245

 
95,874

 
149,299

 
224,020

 
551,950

Operating income (loss)
 
894

 
(47,623
)
 
(156,870
)
 
(98,115
)
 
(849,031
)
Other income (expense), net:
 
 
 
 
 
 
 
 
 
 
Interest income
 
259

 
1,025

 
777

 
2,702

 
3,057

Interest expense
 
(9,489
)
 
(10,649
)
 
(30,214
)
 
(53,353
)
 
(108,011
)
Other, net
 
28,709

 
45,184

 
6,539

 
174,734

 
55,314

Other income (expense), net
 
19,479

 
35,560

 
(22,898
)
 
124,083

 
(49,640
)
Income (loss) before income taxes and equity in losses of unconsolidated investees
 
20,373

 
(12,063
)
 
(179,768
)
 
25,968

 
(898,671
)
(Provision) benefit for income taxes
 
(9,388
)
 
(5,378
)
 
8,379

 
(26,631
)
 
(1,010
)
Equity in losses of unconsolidated investees
 
(5,008
)
 
(1,767
)
 
(757
)
 
(7,058
)
 
(17,815
)
Net income (loss)
 
5,977

 
(19,208
)
 
(172,146
)
 
(7,721
)
 
(917,496
)
Net income (loss) attributable to noncontrolling interests and redeemable noncontrolling interests
 
(537
)
 
4,191

 
13,972

 
29,880

 
106,405

Net income (loss) attributable to stockholders
 
$
5,440

 
$
(15,017
)
 
$
(158,174
)
 
$
22,159

 
$
(811,091
)






Net income (loss) per share attributable to stockholders:
 
 
 
 
 
 
 
 
 
 
Basic
 
$
0.04

 
$
(0.11
)
 
$
(1.12
)
 
$
0.15

 
$
(5.76
)
Diluted
 
$
0.03

 
$
(0.11
)
 
$
(1.12
)
 
$
0.15

 
$
(5.76
)
Weighted-average shares:
 
 
 
 
 
 
 
 
 
 
Basic
 
152,439

 
142,553

 
141,136

 
144,796

 
140,825

Diluted
 
156,004

 
142,553

 
141,136

 
147,525

 
140,825







SUNPOWER CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
 
 
THREE MONTHS ENDED
 
TWELVE MONTHS ENDED
 
 
December 29, 2019
 
September 29, 2019
 
December 30, 2018
 
December 29, 2019
 
December 30, 2018
Cash flows from operating activities:
 
 
 
 
 
 
 
 
 
 
Net income (loss)
 
$
5,977

 
$
(19,208
)
 
$
(172,146
)
 
$
(7,721
)
 
$
(917,496
)
Adjustments to reconcile net income (loss) to net cash used in operating activities:
 
 
 
 
 
 
 
 
 
 
Depreciation and amortization
 
18,059

 
15,298

 
24,060

 
80,081

 
127,204

Non-cash restructuring charges
 

 
3,528

 

 
5,874

 

Stock-based compensation
 
8,008

 
6,991

 
6,266

 
26,935

 
26,353

Non-cash interest expense
 
2,005

 
2,542

 
3,213

 
9,472

 
15,346

Dividend from equity method investee
 

 

 

 

 
3,947

Equity in losses of unconsolidated investees
 
5,008

 
1,767

 
756

 
7,058

 
17,815

Mark-to-market (gain) loss on equity investment with readily determinable fair value
 
(29,250
)
 
(28,538
)
 
150

 
(158,288
)
 
6,375

Gain on business divestiture
 

 

 

 
(143,400
)
 
(59,347
)
Gain on sale of investments without readily determinable fair value
 

 
(17,275
)
 
(3,628
)
 
(17,275
)
 
(54,196
)
Deferred income taxes
 
4,567

 
(1,545
)
 
(9,868
)
 
5,067

 
(6,862
)
Impairment of property, plant and equipment
 

 

 

 
777

 
369,168

(Gain) loss on sale and impairment of residential lease assets
 
(2,931
)
 
10,755

 
81,086

 
33,778

 
251,984

Gain on sale of assets
 
(3,829
)
 
(21,383
)
 

 
(25,212
)
 

Other, net
 

 

 
(1,059
)
 

 
(6,796
)
Changes in operating assets and liabilities:
 
 
 
 
 
 
 
 
 
 
Accounts receivable
 
(20,484
)
 
2,921

 
18,916

 
(66,194
)
 
(175
)
Contract assets
 
(20,139
)
 
(25,516
)
 
(5,495
)
 
(38,246
)
 
(43,509
)
Inventories
 
(20,311
)
 
(45,989
)
 
64,617

 
(128,404
)
 
(39,174
)
Project assets
 
7,050

 
(3,040
)
 
48,652

 
(2,188
)
 
39,512

Prepaid expenses and other assets
 
(10,228
)
 
16,967

 
(17,161
)
 
(8,746
)
 
22,763

Operating lease right-of-use assets
 
2,311

 
14,999

 

 
8,530

 

Long-term financing receivables, net
 

 
481

 
(31,006
)
 
(473
)
 
(182,937
)
Advances to suppliers
 
16,899

 
8,518

 
15,236

 
50,191

 
44,417






 
 
THREE MONTHS ENDED
 
TWELVE MONTHS ENDED
 
 
December 29, 2019
 
September 29, 2019
 
December 30, 2018
 
December 29, 2019
 
December 30, 2018
Accounts payable and other accrued liabilities
 
15,384

 
52,810

 
(58,230
)
 
79,394

 
(127,286
)
Contract liabilities
 
19,404

 
4,709

 
9,328

 
27,531

 
(30,495
)
Operating lease liabilities
 
(1,752
)
 
(15,865
)
 

 
(8,954
)
 

Net cash used in operating activities
 
(4,252
)
 
(36,073
)
 
(26,313
)
 
(270,413
)
 
(543,389
)
Cash flows from investing activities:
 
 
 
 
 
 
 
 
 
 
Purchases of property, plant and equipment
 
(12,295
)
 
(16,896
)
 
(7,198
)
 
(47,395
)
 
(44,906
)
Cash paid for solar power systems, leased, net
 

 

 
(12,953
)
 

 
(68,612
)
Cash paid for solar power systems
 
(1,458
)
 
(8,503
)
 
(37,468
)
 
(53,284
)
 
(41,808
)
Cash paid for acquisitions, net of cash acquired
 

 

 
(17,000
)
 

 
(17,000
)
Proceeds from business divestiture
 

 

 
10,000

 
40,491

 
23,257

Dividend from equity method investee
 

 

 

 

 
12,952

Proceeds from sale of assets
 
20,000

 
39,742

 

 
59,970

 

Cash outflow from sale of residential lease portfolio, net of cash received
 
5,474

 
(16,397
)
 
(28,004
)
 
(10,923
)
 
(28,004
)
Proceeds from sale of distribution rights of debt financing
 
1,950

 

 

 
1,950

 

Proceeds from sale of investments
 

 
42,957

 
35,942

 
42,957

 
453,708

Cash paid for investments in unconsolidated investees
 

 
(2,400
)
 
(626
)
 
(12,400
)
 
(14,687
)
Net cash provided by (used in) investing activities
 
13,671

 
38,503

 
(57,307
)
 
21,366

 
274,900

Cash flows from financing activities:
 
 
 
 
 
 
 
 
 
 
Proceeds from bank loans and other debt
 
150,439

 
87,823

 
60,199

 
381,928

 
227,676

Repayment of 0.75% debentures due 2018, bank loans and other debt
 
(61,920
)
 
(84,035
)
 
(59,023
)
 
(271,015
)
 
(535,252
)
Proceeds from issuance of non-recourse residential financing, net of issuance costs
 

 
6,528

 
5,079

 
72,259

 
192,287

Repayment of non-recourse residential financing
 

 
(1,803
)
 
(2,427
)
 
(2,959
)
 
(17,358
)





 
 
THREE MONTHS ENDED
 
TWELVE MONTHS ENDED
 
 
December 29, 2019
 
September 29, 2019
 
December 30, 2018
 
December 29, 2019
 
December 30, 2018
Contributions from noncontrolling interests and redeemable noncontrolling interests attributable to residential projects
 
4,371

 
1,842

 
43,526

 
35,790

 
151,204

Distributions to noncontrolling interests and redeemable noncontrolling interests attributable to residential projects
 

 

 
(2,742
)
 
(316
)
 
(21,918
)
Proceeds from issuance of non-recourse power plant and commercial financing, net of issuance costs
 
3,004

 

 
75,754

 
3,004

 
126,020

Repayment of non-recourse power plant and commercial financing
 

 

 
(26,383
)
 

 
(31,282
)
Proceeds of common stock equity offering, net of offering costs
 
171,834

 

 

 
171,834

 

Payment for prior business combination
 
(30,000
)
 

 

 
(39,000
)
 

Settlement of contingent consideration arrangement, net of cash received
 
802

 

 

 
(1,646
)
 

Purchases of stock for tax withholding obligations on vested restricted stock
 
(908
)
 
(292
)
 
(281
)
 
(5,565
)
 
(5,530
)
Net cash provided by (used in) financing activities
 
237,622

 
10,063

 
93,702

 
344,314

 
85,847

Effect of exchange rate changes on cash, cash equivalents, restricted cash and restricted cash equivalents
 
881

 
(1,510
)
 
1,296

 
(374
)
 
2,068

Net increase (decrease) in cash, cash equivalents, restricted cash and restricted cash equivalents
 
247,922

 
10,983

 
11,378

 
94,893

 
(180,574
)
Cash, cash equivalents, restricted cash and restricted cash equivalents, beginning of period1
 
210,735

 
199,752

 
352,385

 
363,763

 
544,337

Cash, cash equivalents, restricted cash and restricted cash equivalents, end of period1
 
$
458,657

 
$
210,735

 
$
363,763

 
$
458,656

 
$
363,763

 
 
 
 
 
 
 
 
 
 
 
Non-cash transactions:
 
 
 
 
 
 
 
 
 
 
Stock consideration received from business divestiture

 
$

 
$

 
$

 
$

 
$
42,600






 
 
THREE MONTHS ENDED
 
TWELVE MONTHS ENDED
 
 
December 29, 2019
 
September 29, 2019
 
December 30, 2018
 
December 29, 2019
 
December 30, 2018
Acquisition of noncontrolling interests funded by Mezzanine Loan proceeds

 
$

 
$

 
$

 
$

 
$
12,400

Costs of solar power systems, leased, sourced from existing inventory
 
$

 
$

 
$
5,975

 
$

 
$
36,384

Costs of solar power systems, leased, funded by liabilities
 
$

 
$

 
$
3,631

 
$

 
$
3,631

Costs of solar power systems sourced from existing inventory
 
$
21,173

 
$
8,033

 
$

 
$
29,206

 
$

Costs of solar power systems funded by liabilities
 
$
2,671

 
$
3,604

 
$

 
$
2,671

 
$

Costs of solar power systems under sale-leaseback financing arrangements, sourced from project assets
 
$

 
$

 
$
56,332

 
$

 
$
86,540

Property, plant and equipment acquisitions funded by liabilities
 
$
13,745

 
$
11,911

 
$
8,214

 
$
13,745

 
$
8,214

Acquisition funded by liabilities
 
$

 
$

 
$
9,000

 
$

 
$
9,000

Contractual obligations satisfied with inventory
 
$

 
$

 
$
7,924

 
$

 
$
56,840

Assumption of debt by buyer upon sale of equity interest
 
$

 
$

 
$

 
$

 
$
27,321

Assumption of debt by buyer in connection with sale of residential lease assets
 
$

 
$
69,076

 
$
561,588

 
$
69,076

 
$
561,588

Right-of-use assets obtained in exchange of lease obligations
 
$
7,398

 
$
8,939

 
$

 
$
111,142

 
$

Derecognition of financing obligations upon business divestiture
 
$

 
$

 
$

 
$
590,884

 
$

Holdback related to business divestiture
 
$
1,927

 
$

 
$

 
$
1,927

 
$

Holdback related to sale of assets
 
$

 
$
18,300

 
$

 
$

 
$

Receivables in connection with sale of residential lease portfolio
 
$
2,570

 
$
8,043

 
$
12,510

 
$
2,570

 
$
12,510

Aged supplier financing balances reclassified from AP to short-term debt
 
$
22,500

 
$
22,852

 
$

 
$
45,352

 
$

Retained interest in SunStrong lease portfolio
 
$

 
$

 
$
9,750

 
$

 
$
9,750

Settlement of prior debt obligation with inventory
 
$
1,701

 
$

 
$

 
$
1,701

 
$







Use of Non-GAAP Financial Measures

To supplement its consolidated financial results presented in accordance with United States Generally Accepted Accounting Principles ("GAAP"), the company uses non-GAAP measures that are adjusted for certain items from the most directly comparable GAAP measures. The specific non-GAAP measures listed below are: revenue; gross margin; net loss; net loss per diluted share; and adjusted earnings before interest, taxes, depreciation and amortization (“Adjusted EBITDA”). Management believes that each of these non-GAAP measures are useful to investors, enabling them to better assess changes in each of these key elements of the company's results of operations across different reporting periods on a consistent basis, independent of certain items as described below. Thus, each of these non-GAAP financial measures provide investors with another method to assess the company's operating results in a manner that is focused on its ongoing, core operating performance, absent the effects of these items. Management uses these non-GAAP measures internally to assess the business, its financial performance, current and historical results, as well as for strategic decision-making and forecasting future results. Many of the analysts covering the company also use these non-GAAP measures in their analysis. Given management's use of these non-GAAP measures, the company believes these measures are important to investors in understanding the company's operating results as seen through the eyes of management. These non-GAAP measures are not prepared in accordance with GAAP or intended to be a replacement for GAAP financial data; and therefore, should be reviewed together with the GAAP measures 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.

Non-GAAP revenue includes adjustments relating to 8point3, legacy utility and power plant projects, legacy sale-leaseback transactions and construction services for residential customer contracts, each of which is described below. In addition to the above adjustments, non-GAAP gross margin includes adjustments relating to business process improvement costs, loss on sale and impairment of residential lease assets, impairment of property, plant, and equipment, cost of above-market polysilicon, litigation, stock-based compensation, amortization of intangible assets, and depreciation of idle equipment, each of which is described below. In addition to the above adjustments, non-GAAP net loss and non-GAAP net loss per diluted share are adjusted for adjustments relating to mark to market (gain) loss on equity investments, gain on business divestiture, transaction-related costs, business reorganization costs, non-cash interest expense, restructuring charges, and tax effect of these non-GAAP adjustments, each of which is described below. In addition to the above adjustments , Adjusted EBITDA includes adjustments relating to cash interest expense (net of interest income), provision for income taxes, and depreciation.

Non-GAAP Adjustments Based on International Financial Reporting Standards (“IFRS”)

The company’s non-GAAP results include adjustments under IFRS that are consistent with the adjustments made in connection with the company’s internal reporting process as part of its status as a consolidated subsidiary of Total S.A., our controlling shareholder and a foreign public registrant that reports under IFRS. Differences between GAAP and IFRS reflected in the company’s non-GAAP results are further described below. In these situations, management believes that IFRS enables investors to better evaluate the company’s performance, and assists in aligning the perspectives of the management with those of Total S.A.

8point3: Historically, the company included adjustments related to the sales of projects contributed to 8point3 Group, an equity method investee ("8point3") based on the difference between the fair market value of the consideration received and the net carrying value of the projects contributed, of which, a portion is deferred in proportion to the company’s retained equity stake in 8point3. The deferred profit was subsequently recognized over time. Under GAAP, these sales were recognized under either real estate, lease, or consolidation accounting guidance depending upon the nature of the individual asset contributed, with outcomes ranging from no, partial, or full profit recognition. IFRS profit, less deferrals associated with retained equity, is recognized for sales related to the residential lease portfolio. Revenue for other projects sold was deferred until those projects reach commercial operation. On June 19, 2018, the company sold its equity interest in the 8point3 Group.

Legacy utility and power plant projects: The company included adjustments related to the revenue recognition of certain utility and power plant projects based on percentage-of-completion accounting and,





when relevant, the allocation of revenue and margin to our project development efforts at the time of initial project sale. Under IFRS, such projects were accounted for when the customer obtains control of the promised goods or services which generally results in earlier recognition of revenue and profit than U.S. GAAP. Over the life of each project, cumulative revenue and gross margin are eventually equivalent under both GAAP and IFRS; however, revenue and gross margin is generally recognized earlier under IFRS.

Legacy sale-leaseback transactions: The company included adjustments related to the revenue recognition on certain legacy sale-leaseback transactions entered into before December 31, 2018, based on the net proceeds received from the buyer-lessor. Under U.S. GAAP, these transactions were accounted for under the financing method in accordance with the applicable accounting guidance. Under such guidance, no revenue or profit is recognized at the inception of the transaction, and the net proceeds from the buyer-lessor are recorded as a financing liability. Imputed interest is recorded on the liability equal to our incremental borrowing rate adjusted solely to prevent negative amortization. Under IFRS, such revenue and profit is recognized at the time of sale to the buyer-lessor if certain criteria are met. Upon adoption of IFRS 16, Leases, on December 31, 2018, IFRS is aligned with GAAP.

Mark-to-market (gain) loss in equity investments: The company recognizes adjustments related to the fair value of equity investments with readily determinable fair value based on the changes in the stock price of these equity investments at every reporting period. Under GAAP, mark-to-market gains and losses due to changes in stock prices for these securities are recorded in earnings while under IFRS, an election can be made to recognize such gains and losses in other comprehensive income. Such an election was made by Total S.A. Further, we elected the Fair Value Option (“FVO”) for some of our equity method investments, and we adjust the carrying value of those investments based on their fair market value calculated periodically. Such option is not available under IFRS, and equity method accounting is required for such investments. Management believes that excluding these adjustments on equity investments is consistent with our internal reporting process as part of its status as a consolidated subsidiary of Total S.A. and better reflects our ongoing results.

Other Non-GAAP Adjustments

Business process improvement costs: During fiscal 2019, the company initiated a project to improve its manufacturing and related processes to improve gross margin in coming years and engaged third party experts to consult on business process improvements. Management believes it is appropriate to exclude these consulting expenses from our non-GAAP results as they are non-recurring in nature, and are not reflective of the company’s ongoing operating results.

Loss (gain) on sale and impairment of residential lease assets: In the fourth quarter of fiscal 2017, the company made the decision to sell or refinance its interest in the residential lease portfolio and as a result of this triggering event, determined it was necessary to evaluate the potential for impairment in its ability to recover the carrying amount of the residential lease portfolio. In accordance with such evaluation, the company recognized a non-cash impairment charge on its solar power systems leased and to be leased and an allowance for losses related financing receivables. In connection with the impairment loss, the carrying values of the company's solar power systems leased and to be leased were reduced which resulted in lower depreciation charges. In the fourth quarter of fiscal 2018, the company sold membership units representing a 49% membership interest in its residential lease business and retained a 51% membership interest. The loss on divestment and the remaining unsold residential lease assets impairment with its corresponding depreciation savings are excluded from the company’s non-GAAP results as they are non-cash in nature and not reflective of ongoing operating results. Additionally, in the third quarter of fiscal 2019, in continuation with our intention to deconsolidate all the residential lease assets owned by us, we sold the remainder of residential lease assets still owned by us, that were not previously sold. Gain/loss from such activity is excluded from the company’s non-GAAP results as it is non-cash in nature and not reflective of ongoing operating results.






Impairment of property, plant, and equipment: The Company evaluates property, plant and equipment for impairment whenever certain triggering events or changes in circumstances arise. This evaluation includes consideration of technology obsolescence that may indicate that the carrying value of such assets may not be recoverable. In accordance with such evaluation, the company recognizes a non-cash impairment charge when the asset group’s fair value is lower than its carrying value. Such impairment charge is excluded from the company’s non-GAAP results as it is non-recurring in nature and not reflective of ongoing operating results. Any such non-recurring impairment charge recorded by our equity method or other unconsolidated investees is also excluded from our non-GAAP results as it is not reflective of their ongoing operating results.

Construction revenue on solar services contracts: Upon adoption of the new lease accounting guidance (“ASC 842”) in the first quarter of fiscal 2019, revenue and cost of revenue on solar services contracts with residential customers are recognized ratably over the term of those contracts, once the projects are placed in service. For non-GAAP results, the company recognizes revenue and cost of revenue upfront based on the expected cash proceeds to align with the legacy lease accounting guidance. Management believes it is appropriate to recognize revenue and cost of revenue upfront based on total expected cash proceeds, as it better reflects the company's ongoing results as such method aligns revenue and costs incurred most accurately in the same period.

Cost of above-market polysilicon: The company has entered into multiple long-term, fixed-price supply agreements to purchase polysilicon for periods of up to 10 years. The prices in select legacy supply agreements, which incorporate a cash portion and a non-cash portion attributable to the amortization of prepayments made under the agreements, significantly exceed current market prices. Additionally, in order to reduce inventory and improve working capital, the company has periodically elected to sell polysilicon inventory in the marketplace at prices below the company’s purchase price, thereby incurring a loss. Management believes that it is appropriate to exclude the impact of its above-market cost of polysilicon, including the effect of above-market polysilicon on product costs, losses incurred on sales of polysilicon to third parties, and inventory reserves and project asset impairments from the company's non-GAAP results as they are not reflective of ongoing operating results.

Stock-based compensation: Stock-based compensation relates primarily to the company’s equity incentive awards. Stock-based compensation is a non-cash expense that is dependent on market forces that are difficult to predict. Management believes that this adjustment for stock-based compensation provides investors with a basis to measure the company's core performance, including compared with the performance of other companies, without the period-to-period variability created by stock-based compensation.

Amortization of intangible assets: The company incurs amortization of intangible assets as a result of acquisitions, which includes patents, purchased technology, project pipeline assets, and in-process research and development. Management believes that it is appropriate to exclude these amortization charges from the company’s non-GAAP financial measures as they arise from prior acquisitions, which are not reflective of ongoing operating results.

Depreciation of idle equipment: In the fourth quarter of 2017, the company changed the deployment plan for its next generation of solar cell technology, and revised its depreciation estimates to reflect the use of certain assets over its shortened useful life. Such asset depreciation is excluded from the company's non-GAAP results as it is non-cash in nature and not reflective of ongoing operating results.

Gain on business divestiture: In the second quarter of fiscal 2019, the company entered into a transaction pursuant to which it sold membership interest in certain of its subsidiaries that own leasehold interests in projects subject to sale-leaseback financing arrangements. In connection with this sale, the company recognized a gain relating to this business divestiture. In the third quarter of fiscal 2018, the company entered into a transaction pursuant to which the company sold certain assets and intellectual property related to the production of microinverters for purchase consideration comprised of both cash and stock. In





connection with this sale, the company recognized a gain relating to this business divestiture. Management believes that it is appropriate to exclude both of these gains from the company's non-GAAP results as it is not reflective of ongoing operating results.

Litigation: The company may be involved in various litigations, claims and proceedings that result in payments or recoveries from such proceedings. The company excludes any gains or losses on such litigation recoveries or payments from the non-GAAP results as it is not reflective of ongoing operating results.

Transaction-related costs: In connection with material non-recurring transactions such as acquisition or divestiture of a business, the company incurred transaction costs including legal and accounting fees. Management believes that it is appropriate to exclude these costs from the company's non-GAAP results as it is not reflective of ongoing operating results.

Business reorganization costs: In connection with the reorganization of our business into an upstream and downstream, and subsequent announcement of the separation transaction to separate the Company into two independent, and publicly traded companies, we incurred and expect to continue to incur in upcoming quarters, non-recurring charges on third-party legal and consulting expenses to close the separation transaction. The company believes that it is appropriate to exclude these from company's non-GAAP results as it is not reflective of ongoing operating results.

Non-cash interest expense: The company incurs non-cash interest expense related to the amortization of items such as original issuance discounts on its debt. The company excludes non-cash interest expense because the expense does not reflect its financial results in the period incurred. Management believes that this adjustment for non-cash interest expense provides investors with a basis to evaluate the company's performance, including compared with the performance of other companies, without non-cash interest expense.

Restructuring charges: The company incurs restructuring expenses related to reorganization plans aimed towards realigning resources consistent with the company’s global strategy and improving its overall operating efficiency and cost structure. Although the company has engaged in restructuring activities in the past, each has been a discrete event based on a unique set of business objectives. The company believes that it is appropriate to exclude these from company's non-GAAP results as it is not reflective of ongoing operating results.

Tax effect: This amount is used to present each of the adjustments described above on an after-tax basis in connection with the presentation of non-GAAP net income (loss) and non-GAAP net income (loss) per diluted share. The company's non-GAAP tax amount is based on estimated cash tax expense and reserves. The company forecasts its annual cash tax liability and allocates the tax to each quarter in a manner generally consistent with its GAAP methodology. This approach is designed to enhance investors’ ability to understand the impact of the company's tax expense on its current operations, provide improved modeling accuracy, and substantially reduce fluctuations caused by GAAP to non-GAAP adjustments, which may not reflect actual cash tax expense.

Adjusted EBITDA adjustments: When calculating Adjusted EBITDA, in addition to adjustments described above, the company excludes the impact of the following items during the period:

Cash interest expense, net of interest income
Provision for income taxes
Depreciation

For more information about these non-GAAP financial measures, please see the tables captioned "Reconciliations of GAAP Measures to Non-GAAP Measures" set forth at the end of this release, 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
(In thousands, except percentages and per share data)
(Unaudited)
Adjustments to Revenue: 
 
 
THREE MONTHS ENDED
 
TWELVE MONTHS ENDED
 
 
December 29, 2019
 
September 29, 2019
 
December 30, 2018
 
December 29, 2019
 
December 30, 2018
GAAP revenue
 
$
603,761

 
$
475,958

 
$
456,837

 
$
1,864,225

 
$
1,726,085

Adjustments based on IFRS:
 
 
 
 
 
 
 
 
 
 
8point3
 

 

 

 

 
(8,588
)
Legacy utility and power plant projects
 
(44
)
 
(65
)
 
(691
)
 
(303
)
 
(4,145
)
Legacy sale-leaseback transactions
 

 

 
69,254

 

 
101,581

Other adjustments:
 
 
 
 
 
 
 
 
 
 
Construction revenue on solar services contracts
 
3,235

 
15,790

 

 
128,144

 

Non-GAAP revenue
 
$
606,952

 
$
491,683

 
$
525,400

 
$
1,992,066

 
$
1,814,933












































Adjustments to Gross Profit (Loss) / Margin: 
 
 
THREE MONTHS ENDED
 
TWELVE MONTHS ENDED
 
 
December 29, 2019
 
September 29, 2019
 
December 30, 2018
 
December 29, 2019
 
December 30, 2018
GAAP gross profit (loss)
 
$
95,139

 
$
48,251

 
$
(7,571
)
 
$
125,905

 
$
(297,081
)
Adjustments based on IFRS:
 
 
 
 
 
 
 
 
 
 
8point3
 

 

 

 

 
(8,337
)
Legacy utility and power plant projects
 

 
(7
)
 
(569
)
 
993

 
(1,244
)
Legacy sale-leaseback transactions
 
(75
)
 
(181
)
 
6,132

 
(4,763
)
 
242

Other adjustments:
 
 
 
 
 
 
 
 
 
 
Business process improvement costs
 
1,091

 
2,279

 

 
3,370

 

Construction revenue on solar service contracts
 
1,966

 
1,160

 

 
20,018

 

(Gain) loss on sale and impairment of residential lease assets

 
(435
)
 
(511
)
 
(2,163
)
 
(1,703
)
 
(14,847
)
Impairment of property, plant and equipment
 

 

 

 

 
355,107

Cost of above-market polysilicon
 
27,549

 
23,878

 
37,231

 
126,805

 
87,228

Litigation
 
(2,515
)
 

 

 
(2,515
)
 

Stock-based compensation expense
 
1,559

 
1,522

 
1,236

 
4,382

 
4,996

Amortization of intangible assets
 
1,783

 
1,783

 
1,889

 
7,135

 
8,966

Depreciation of idle equipment
 

 

 

 

 
721

Non-GAAP gross profit
 
$
126,062

 
$
78,174

 
$
36,185

 
$
279,627

 
$
135,751

 
 
 
 
 
 
 
 
 
 
 
GAAP gross margin (%)
 
15.8
%
 
10.1
%
 
(1.7
)%
 
6.8
%
 
(17.2
)%
Non-GAAP gross margin (%)
 
20.8
%
 
15.9
%
 
6.9
 %
 
14.0
%
 
7.5
 %



























Adjustments to Net Income (Loss): 
 
 
THREE MONTHS ENDED
 
TWELVE MONTHS ENDED
 
 
December 29, 2019
 
September 29, 2019
 
December 30, 2018
 
December 29, 2019
 
December 30, 2018
GAAP net income (loss) attributable to stockholders
 
$
5,440

 
$
(15,017
)
 
$
(158,174
)
 
$
22,159

 
$
(811,091
)
Adjustments based on IFRS:
 
 
 
 
 
 
 
 
 
 
8point3
 

 

 

 

 
(8,485
)
Legacy utility and power plant projects
 

 
(7
)
 
(569
)
 
993

 
(1,244
)
Legacy sale-leaseback transactions
 
(75
)
 
(181
)
 
10,984

 
5,680

 
18,802

Mark-to-market (gain) loss on equity investments
 
(28,250
)
 
(27,595
)
 
150

 
(156,345
)
 
6,375

Other adjustments:
 
 
 
 
 
 
 
 
 
 
Business process improvement costs

 
1,091

 
2,279

 

 
3,370

 

Construction revenue on solar service contracts
 
1,966

 
1,160

 

 
(7,012
)
 

(Gain) loss on sale and impairment of residential lease assets
 
(3,366
)
 
5,135

 
81,273

 
25,636

 
227,507

Impairment of property, plant and equipment
 
4,053

 

 

 
4,053

 
369,168

Cost of above-market polysilicon
 
27,549

 
23,878

 
37,231

 
126,805

 
87,228

Litigation
 
(2,509
)
 

 

 
(2,509
)
 

Stock-based compensation expense
 
8,006

 
6,992

 
6,424

 
26,934

 
28,215

Amortization of intangible assets
 
1,783

 
1,783

 
1,889

 
7,135

 
8,966

Depreciation of idle equipment
 

 

 

 

 
721

Gain on business divestiture
 

 

 

 
(143,400
)
 
(59,347
)
Transaction-related costs
 
1,723

 
976

 
(3,142
)
 
5,294

 
17,727

Business reorganization costs
 
10,696

 
6,066

 
1,330

 
23,567

 
1,330

Non-cash interest expense
 
3

 
10

 
10

 
33

 
68

Restructuring charges
 
8,039

 
4,283

 
(1,107
)
 
14,110

 
17,497

Tax effect
 
(384
)
 
880

 
(6,605
)
 
1,345

 
(4,797
)
Non-GAAP net income (loss) attributable to stockholders
 
$
35,765

 
$
10,642

 
$
(30,306
)
 
$
(42,152
)
 
$
(101,360
)


















Adjustments to Net Income (loss) per diluted share
 
 
THREE MONTHS ENDED
 
TWELVE MONTHS ENDED
 
 
December 29, 2019
 
September 29, 2019
 
December 30, 2018
 
December 29, 2019
 
December 30, 2018
Net income (loss) per diluted share
 
 
 
 
 
 
 
 
 
 
Numerator:
 
 
 
 
 
 
 
 
 
 
GAAP net income (loss) available to common stockholders1
 
$
5,440

 
$
(15,017
)
 
$
(158,174
)
 
$
22,159

 
$
(811,091
)
GAAP net income (loss) available to common stockholders1
 
$
5,440

 
$
(15,017
)
 
$
(158,174
)
 
$
22,159

 
$
(811,091
)
 
 
 
 
 
 
 
 
 
 
 
Non-GAAP net income (loss) available to common stockholders1
 
$
35,765

 
$
10,642

 
$
(30,306
)
 
$
(42,152
)
 
$
(101,360
)
 
 
 
 
 
 
 
 
 
 
 
Denominator:
 
 
 
 
 
 
 
 
 
 
GAAP weighted-average shares
 
152,439

 
142,553

 
141,136

 
144,796

 
140,825

Effect of dilutive securities:
 
 
 
 
 
 
 
 
 
 
Restricted stock units
 
3,565

 

 

 
2,729

 

GAAP dilutive weighted-average common shares:
 
156,004

 
142,553

 
141,136

 
147,525

 
140,825

 
 
 
 
 
 
 
 
 
 
 
Non-GAAP weighted-average shares
 
152,439

 
142,553

 
141,136

 
144,796

 
140,825

Effect of dilutive securities:
 
 
 
 
 
 
 
 
 
 
Restricted stock units
 
3,565

 
4,826

 

 

 

Non-GAAP dilutive weighted-average common shares1
 
156,004

 
147,379

 
141,136

 
144,796

 
140,825

 
 
 
 
 
 
 
 
 
 
 
GAAP net income (loss) per diluted share
 
$
0.03

 
$
(0.11
)
 
$
(1.12
)
 
$
0.15

 
$
(5.76
)
Non-GAAP net income (loss) per diluted share
 
$
0.23

 
$
0.07

 
$
(0.21
)
 
$
(0.29
)
 
$
(0.72
)





1In accordance with the if-converted method, net loss available to common stockholders excludes interest expense related to the 0.875% and 4.0% debentures if the debentures are considered converted in the calculation of net loss per diluted share. If the conversion option for a debenture is not in the money for the relevant period, the potential conversion of the debenture under the if-converted method is excluded from the calculation of non-GAAP net loss per diluted share.

Adjusted EBITDA:
 
 
THREE MONTHS ENDED
 
TWELVE MONTHS ENDED
 
 
December 29, 2019
 
September 29, 2019
 
December 30, 2018
 
December 29, 2019
 
December 30, 2018
GAAP net income (loss) attributable to stockholders
 
$
5,440

 
$
(15,017
)
 
$
(158,174
)
 
$
22,159

 
$
(811,091
)
Adjustments based on IFRS:
 
 
 
 
 
 
 
 
 
 
8point3
 

 

 

 

 
(8,485
)
Legacy utility and power plant projects
 

 
(7
)
 
(569
)
 
993

 
(1,244
)
Legacy sale-leaseback transactions
 
(75
)
 
(181
)
 
10,984

 
5,680

 
18,802

Mark-to-market (gain) loss on equity investments
 
(28,250
)
 
(27,595
)
 
150

 
(156,345
)
 
6,375

Other adjustments:
 
 
 
 
 
 
 
 
 
 
Business process improvement costs
 
1,091

 
2,279

 

 
3,370

 

Construction revenue on solar service contracts
 
1,966

 
1,160

 

 
(7,012
)
 

(Gain) loss on sale and impairment of residential lease assets

 
(3,366
)
 
5,135

 
81,273

 
25,636

 
227,507

Impairment of property, plant and equipment
 
4,053

 

 

 
4,053

 
369,168

Cost of above-market polysilicon
 
27,549

 
23,878

 
37,231

 
126,805

 
87,228

Litigation
 
(2,509
)
 

 

 
(2,509
)
 

Stock-based compensation expense
 
8,006

 
6,992

 
6,424

 
26,934

 
28,215

Amortization of intangible assets
 
1,783

 
1,783

 
1,889

 
7,135

 
8,966

Depreciation of idle equipment
 

 

 

 

 
721

Gain on business divestiture
 

 

 

 
(143,400
)
 
(59,347
)
Transaction-related costs
 
1,723

 
976

 
(3,142
)
 
5,294

 
17,727

Business reorganization costs
 
10,696

 
6,066

 
1,330

 
23,567

 
1,330

Non-cash interest expense
 
3

 
10

 
10

 
33

 
68

Restructuring charges
 
8,039

 
4,283