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United States securities and exchange commission logo
May 21, 2020
Manavendra S. Sial
Executive Vice President and Chief Financial Officer
SUNPOWER CORP
4353 North 1st Street, Suite 100
San Jose, California 95134
Re: SUNPOWER CORP
Form 10-K for the
Year Ended December 29, 2019
Form 8-K furnished
on May 7, 2020
File No. 001-34166
Dear Mr. Sial:
We have reviewed your filing and have the following comments. In
some of our
comments, we may ask you to provide us with information so we may better
understand your
disclosure.
Please respond to these comments within ten business days by
providing the requested
information or advise us as soon as possible when you will respond. If
you do not believe our
comments apply to your facts and circumstances, please tell us why in
your response.
After reviewing your
response to these comments, we may have additional comments.
Form 10-K for the Year Ended December 29, 2019
Notes to the Financial Statements
Note 1. Organization and Summary of Significant Accounting Policies
Summary of Significant Accounting Policies
Revenue Recognition, page 105
1. We note from page 9
that you offer financing programs that are designed to offer
customers a variety of
options to obtain high efficiency solar products and systems,
including loans
arranged through your third-party lending partners. Please revise your
revenue recognition
policy in future filings to disclose the material payment terms of your
contracts, to address
whether your contracts have a significant financing component and,
if so, to describe your
accounting for the significant financing component. Refer to ASC
606-10-50-12 and ASC
606-10-32-15 through 32-20.
Manavendra S. Sial
FirstName LastNameManavendra S. Sial
SUNPOWER CORP
Comapany NameSUNPOWER CORP
May 21, 2020
Page 2
May 21, 2020 Page 2
FirstName LastName
Note 4. Business Divestiture and Sale of Assets, page 116
2. We note from your disclosure on page 118 that in connection with the
sale and leaseback
of the Hillsboro facility, you recognized a net gain of $25.2 million
which is included
within "cost of revenue: solar power systems, components, other." In
light of the fact that
this is material to your gross profit for 2019, please explain to us
why you believe it was
appropriate to recognize this gain as a reduction to cost of revenues.
Note 9. Commitments and Contingencies
Product Warranties, page 130
3. We note from your warranty accrual activity disclosed at the top of
page 133, that your
settlements and adjustments during 2019 significantly exceeded prior
years, as well as the
amount you accrued for warranties during the period. Please explain to
us the nature of
the significant increase in the amount of warranty settlements and
adjustments recognized
in 2019 and support your conclusion that your product warranty
liability is adequate as of
December 29, 2019.
Selected Unaudited Quarterly Financial Data, page 160
4. We note that your disclosure of selected unaudited quarterly amounts
reflects material
fluctuations between quarters during 2019. In future filings, please
revise to disclose the
nature of any significant or unusual amounts that affected your
quarterly earnings such as
the gain on sale of commercial sales-leaseback properties, the gain on
the mark to market
investment, and the impairment of residential lease assets. See
guidance in Item 302(a)(3)
of Regulation S-K.
Form 8-K filed on May 7, 2020
Exhibit 99.1 Earnings Release, page 1
5. We note that you present a non-GAAP revenue measure that reflects
certain IFRS-based
adjustments and an adjustment for construction revenue on solar
services contracts that
recognizes the related revenue upfront based on the expected cash
proceeds to align with
the legacy lease accounting guidance, and not ratably over the term of
the contract as
required by ASC 842. Your measures appear to substitute individually
tailored revenue
recognition and measurement methods for those of GAAP, which is not
consistent
with Rule 100(b) of Regulation G and Question 100.04 of the Compliance
and Disclosure
Interpretations on Non-GAAP Financial Measures. Please remove this
non-GAAP
measure from your future presentations, or advise us. Our comment also
applies to your
non-GAAP gross profit, non-GAAP net income (loss) attributable to
stockholders, and
Adjusted EBITDA measures, which all reflect similar adjustments to
GAAP revenue.
Manavendra S. Sial
SUNPOWER CORP
May 21, 2020
Page 3
6. We note that your non-GAAP gross profit, non-GAAP net income (loss)
attributable to
stockholders, and Adjusted EBITDA financial measures, all include an
adjustment for cost
of above-market polysilicon that management believes is appropriate to
exclude as the
amounts ares not reflective of ongoing operating results. In light of
the fact that these are
inventory related items that you have recorded in each of the last
several years, please
explain to us why they would not be considered "normal, recurring,
cash operating
expenses" and tell us how you considered the guidance in Question
100.01 of
the Compliance and Disclosure Interpretations on Non-GAAP Financial
Measures.
Alternatively, revise your future filings to remove this adjustment
from your non-GAAP
financial measures.
We remind you that the company and its management are responsible for
the accuracy
and adequacy of their disclosures, notwithstanding any review, comments, action
or absence of
action by the staff.
You may contact Claire Erlanger at (202) 551-3301 or Martin James at
(202) 551-3671 if
you have questions regarding comments on the financial statements and related
matters.
FirstName LastNameManavendra S. Sial Sincerely,
Comapany NameSUNPOWER CORP
Division of
Corporation Finance
May 21, 2020 Page 3 Office of
Manufacturing
FirstName LastName