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 15, 2023
SunPower Corporation
(Exact name of registrant as specified in its charter)
(Commission File Number)
| (State or other jurisdiction of incorporation) | (I.R.S. Employer Identification No.) | ||||
(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 | ||||||
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 15, 2023, 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 and fiscal year ended January 1, 2023.
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 | |||||
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document). | ||||
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 15, 2023 | By: | /S/ GUTHRIE DUNDAS | ||||||
| Name: | Guthrie Dundas | |||||||
| Title: | Interim Chief Financial Officer | |||||||
FINAL. FOR IMMEDIATE RELEASE
Contacts:
Investors
Mike Weinstein
510-260-8585
Mike.Weinstein@sunpower.com
Media
Sarah Spitz
832-444-7151
Sarah.Spitz@sunpower.com
SunPower Reports Fourth Quarter and Fiscal Year 2022 Results
•Achieved record Q4: added nearly 24,000 customers; Revenue of $497 million, 43% growth YoY
•Reported Q4 GAAP Net Income of $8 million and Adjusted EBITDA of $36 million
•Added 83,000 customers and drove Revenue of $1.7 billion in 2022, 53% growth YoY
•Reported 2022 GAAP Net Income of $56 million and Adjusted EBITDA of $95 million
•Entered 2023 with strong balance sheet: $48 million Net Recourse Debt, repaid $425 million Convertible Debt in January
•Secured new panel supply agreements to meet rising demand
RICHMOND, Calif., February 15, 2023 - SunPower Corp. (NASDAQ: SPWR), a leading solar technology and energy services provider, today announced financial results for the fourth quarter, ending January 1, 2023.
“Solar helps customers reduce and stabilize their escalating electricity bills while making a positive impact on the planet. With more consumers transitioning toward full home electrification, and new incentives to support that transition, the solar value proposition is more compelling than it’s ever been,” said Peter Faricy, SunPower CEO. “This is evident in our 2022 results: we beat our topline guidance for customer growth, closing the year with SunPower on more than half a million roofs in the U.S. We enter 2023 with our lowest level of net debt since first issuing convertible debt after the IPO over 15 years ago, diverse new supply agreements, and a clear strategy to remain the industry leader in customer experience.”
BUSINESS HIGHLIGHTS
World-class customer experience
•Highest rated solar company: In the fourth quarter of 2022, SunPower remained the top-rated1 solar company in the U.S. In 2022, the company also improved its overall Net Promoter Score (NPS) related to end-to-end experience in a customer’s first year from 35 to 45, a 29% improvement. These scores reflect the company’s focus on building software that makes it simpler to get solar and resolve issues more seamlessly, including transparent progress reports and self-service options.
Best, most affordable products
•Secured new supply to meet customer demand: In December, SunPower signed a new supply agreement with Maxeon (NASDAQ: MAXN) securing significant additional quantities of Maxeon's premium, high efficiency interdigitated back contact (IBC) solar panels through 2025. Today the company also announced it is sourcing panels from Hanwha Qcells out of its Dalton, Georgia facility.
Growth
•Continued record growth trend: SunPower achieved record customer growth for the third consecutive quarter. It added 23,700 customers in the final quarter of the year, a 39% year-over-year (YoY) increase.
•Growing new homes across the U.S.: In the fourth quarter, SunPower achieved record installations across the new homes business: California, national and multifamily and is preparing to operate successfully under tighter homebuilding market conditions in 2023 and possibly beyond.
1 Based on public solar providers in the U.S. Includes average of BBB, Yelp, ConsumerAffairs, BestCompany, Google, SolarReviews and EnergySage reviews scores as of 12/31/22.
Digital innovation
•Making switching to solar easy: The company enhanced its digital tools to create a better customer experience from the very first step. The mySunPower Installation Tracker now offers customers transparent status tracking on each stage of their home solar installation, prompts users with friendly reminders about upcoming milestones and enables them to easily upload required documentation. Monthly active users of mySunPower Installation Tracker reached 87%, nearly doubling from 45% at the end of 2021.
World-class financial solutions
•Scaling lease business: SunPower’s lease business grew 55% YoY in the fourth quarter, enabling the company to scale full-year 2022 lease and loan net bookings by 81% YoY. SunPower plans to expand its lease offerings in 2023 following the passage of the Inflation Reduction Act and release of U.S. Department of Treasury guidance related to various federal bonus tax credits and has adequate funding capacity to support anticipated lease and PPA growth.
Financial Highlights
| ($ Millions, except percentages, residential customers, and per-share data) | 4th Quarter 2022 | 3rd Quarter 2022 | 4th Quarter 2021 | Fiscal Year 2022 | Fiscal Year 2021 | ||||||||||||
| GAAP revenue from continuing operations | $497.3 | $475.7 | $347.8 | $1,741.1 | $1,132.0 | ||||||||||||
| GAAP gross margin from continuing operations | 21.0% | 22.2% | 17.3% | 20.9% | 20.3% | ||||||||||||
| GAAP net income (loss) from continuing operations | $7.6 | $139.4 | $38.9 | $102.4 | $6.1 | ||||||||||||
| GAAP net income (loss) from continuing operations per diluted share | $0.04 | $0.74 | $0.22 | $0.59 | $0.03 | ||||||||||||
Non-GAAP revenue from continuing operations1 | $492.4 | $469.8 | $347.5 | $1,712.4 | $1,121.2 | ||||||||||||
Non-GAAP gross margin from continuing operations1 | 21.3% | 22.8% | 17.9% | 21.8% | 21.0% | ||||||||||||
Non-GAAP net income (loss) from continuing operations1 | $26.2 | $23.6 | $4.1 | $57.9 | $46.8 | ||||||||||||
Non-GAAP net income (loss) from continuing operations per diluted share1 | $0.15 | $0.13 | $0.02 | $0.33 | $0.27 | ||||||||||||
Adjusted EBITDA1 | $36.2 | $32.6 | $7.7 | $95.1 | $75.3 | ||||||||||||
| Residential customers | 510,400 | 486,700 | 427,300 | 510,400 | 427,300 | ||||||||||||
Cash2 | $377.0 | $396.5 | $123.7 | $377.0 | $123.7 | ||||||||||||
The sale of our C&I Solutions business met the criteria for classification as “discontinued operations” in accordance with the guidance in ASC 205-20, Discontinued Operations, beginning the first quarter of fiscal 2022. For all periods presented, the financial results of C&I Solutions are excluded in the table above.
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
Looking toward 2023
“We will continue to invest in the business in 2023 to ensure SunPower remains at the forefront of home electrification while expanding access to solar so more Americans can realize its benefits,” said Faricy. “Among our many advancements this year, we plan to launch a bi-directional charging product through our collaboration with GM and introduce more of their customers to solar; roll out our work with OhmConnect as well as add more Virtual Power Plant (VPP) offerings that enable customers to save more money while helping improve grid stability; expand our multifamily footprint; make more enhancements to SunVault storage; and elevate the digital experience to make it easier than ever to switch to solar.”
2023 Financial Outlook
SunPower initiated 2023 guidance of $2,450-$2,900 adjusted EBITDA per customer before platform investment and 90,000-110,000 incremental customers, resulting in $125-$155 million Adjusted EBITDA for the year.
Earnings Conference Call Information
SunPower will discuss its fourth quarter 2022 financial results on Wednesday, February 15 at 5 p.m. Eastern Time. The conference call can be accessed live by registering at https://edge.media-server.com/mmc/p/kqr37kfz.
About SunPower
SunPower (NASDAQ: SPWR) is a leading solar technology and energy services provider in North America. SunPower offers the only solar + storage solution designed and warranted by one company that gives customers control over electricity consumption and resiliency during power outages. For more information, 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) expectations regarding demand and our future performance based on backlog, bookings, projected consumer demand, and pipelines in our sales channels and for our products, and our ability to meet consumer demand; (b) our plans and expectations with respect to our strategic partnerships and initiatives, including our relationship with General Motors, OhmConnect, and Maxeon and other suppliers, and the anticipated business and financial impacts thereof; (c) our strategic plans and areas of investment and focus, both current and future, and expectations for the results thereof, including improved customer experience, lease and loan funding capacity, increased installation capacity, and development of new products and services; (d) our expectations regarding projected demand and growth in 2023 and beyond, our positioning for future success, and our ability to capture demand and deliver long-term value to our shareholders; (e) our expectations for industry trends and factors, and the impact thereof on our business and strategic plans; (f) the availability and sufficiency of the supply of products and raw materials to meet consumer demand; and (g) our guidance for fiscal year 2023, including Adjusted EBITDA per customer, incremental customers, and Adjusted EBITDA, as well as platform investments 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) regulatory changes and the availability of economic incentives promoting use of solar energy; (2) potential disruptions to our operations and supply chain that may result from epidemics or natural disasters, including impacts of the COVID-19 pandemic, and other factors; (3) competition in the solar and general energy industry, supply chain constraints, interest rates, inflation, and pricing pressures; (4) changes in public policy, including the imposition and applicability of tariffs and duties; (5) our dependence on sole- or limited-source supply relationships, including for our solar panels and other components of our products; (6) risks related to the introduction of new or enhanced products, including potential technical challenges, lead times, and our ability to match supply with demand while maintaining quality, sales, and support standards; (7) 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; (8) our liquidity, indebtedness, and ability to obtain additional financing for our projects and customers; and (9) challenges managing our acquisitions, joint ventures, and partnerships, including our ability to successfully manage acquired assets and supplier relationships. 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.
©2023 SunPower Corporation. All rights reserved. SUNPOWER, SUNPOWER FINANCIAL, SUNVAULT, and the SUNPOWER logo are trademarks or registered trademarks of SunPower Corporation in the U.S.
###
SUNPOWER CORPORATION
CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
| January 1, 2023 | January 2, 2022 | ||||||||||
| Assets | |||||||||||
| Current assets: | |||||||||||
| Cash and cash equivalents | $ | 377,026 | $ | 123,735 | |||||||
| Restricted cash and cash equivalents, current portion | 9,855 | 691 | |||||||||
| Short-term investments | 132,480 | 365,880 | |||||||||
| Accounts receivable, net | 174,577 | 121,268 | |||||||||
| Contract assets | 50,692 | 25,994 | |||||||||
| Inventories | 316,815 | 214,432 | |||||||||
| Advances to suppliers, current portion | 9,309 | 462 | |||||||||
| Prepaid expenses and other current assets | 197,760 | 100,212 | |||||||||
| Current assets of discontinued operations | — | 120,792 | |||||||||
| Total current assets | 1,268,514 | 1,073,466 | |||||||||
| Restricted cash and cash equivalents, net of current portion | 15,151 | 14,887 | |||||||||
| Property, plant and equipment, net | 74,522 | 33,560 | |||||||||
| Operating lease right-of-use assets | 36,926 | 31,654 | |||||||||
| Solar power systems leased, net | 41,779 | 45,502 | |||||||||
| Goodwill | 126,338 | 126,338 | |||||||||
| Other intangible assets, net | 24,192 | 24,879 | |||||||||
| Other long-term assets | 192,585 | 156,994 | |||||||||
| Long-term assets of discontinued operations | — | 47,526 | |||||||||
| Total assets | $ | 1,780,007 | $ | 1,554,806 | |||||||
| Liabilities and Equity | |||||||||||
| Current liabilities: | |||||||||||
| Accounts payable | $ | 242,229 | $ | 138,514 | |||||||
| Accrued liabilities | 145,229 | 101,980 | |||||||||
| Operating lease liabilities, current portion | 11,356 | 10,753 | |||||||||
| Contract liabilities, current portion | 144,209 | 62,285 | |||||||||
| Short-term debt | 82,404 | 109,568 | |||||||||
| Convertible debt, current portion | 424,919 | — | |||||||||
| Current liabilities of discontinued operations | — | 86,496 | |||||||||
| Total current liabilities | 1,050,346 | 509,596 | |||||||||
| Long-term debt | 308 | 380 | |||||||||
| Convertible debt, net of current portion | — | 423,677 | |||||||||
| Operating lease liabilities, net of current portion | 29,347 | 28,566 | |||||||||
| Contract liabilities, net of current portion | 11,555 | 18,705 | |||||||||
| Other long-term liabilities | 112,797 | 141,197 | |||||||||
| Long-term liabilities of discontinued operations | — | 42,661 | |||||||||
| Total liabilities | 1,204,353 | 1,164,782 | |||||||||
| Equity: | |||||||||||
| Common stock | 174 | 173 | |||||||||
| Additional paid-in capital | 2,855,930 | 2,714,500 | |||||||||
| Accumulated deficit | (2,066,175) | (2,122,212) | |||||||||
| Accumulated other comprehensive income (loss) | 11,568 | 11,168 | |||||||||
| Treasury stock, at cost | (226,646) | (215,240) | |||||||||
| Total stockholders' equity | 574,851 | 388,389 | |||||||||
| Noncontrolling interests in subsidiaries | 803 | 1,635 | |||||||||
| Total equity | 575,654 | 390,024 | |||||||||
| Total liabilities and equity | $ | 1,780,007 | $ | 1,554,806 | |||||||
SUNPOWER CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(Unaudited)
| THREE MONTHS ENDED | TWELVE MONTHS ENDED | |||||||||||||||||||||||||||||||
| January 1, 2023 | October 2, 2022 | January 2, 2022 | January 1, 2023 | January 2, 2022 | ||||||||||||||||||||||||||||
| Total revenues | $ | 497,312 | $ | 475,711 | $ | 347,830 | $ | 1,741,072 | $ | 1,132,029 | ||||||||||||||||||||||
| Total cost of revenues | 392,664 | 370,264 | 287,585 | 1,377,169 | 902,718 | |||||||||||||||||||||||||||
| Gross profit | 104,648 | 105,447 | 60,245 | 363,903 | 229,311 | |||||||||||||||||||||||||||
| Operating expenses: | ||||||||||||||||||||||||||||||||
| Research and development | 5,560 | 6,784 | 4,214 | 24,759 | 15,711 | |||||||||||||||||||||||||||
| Sales, general, and administrative | 82,160 | 87,124 | 68,717 | 339,323 | 204,166 | |||||||||||||||||||||||||||
| Restructuring charges (credits) | — | 111 | 175 | 244 | 4,519 | |||||||||||||||||||||||||||
| (Gain) loss on sale and impairment of residential lease assets | — | — | — | — | (294) | |||||||||||||||||||||||||||
| (Gain) loss on business divestitures, net | — | — | — | — | (5,290) | |||||||||||||||||||||||||||
| Expense (income) from transition services agreement, net | 1,356 | (1,059) | 956 | 69 | (4,255) | |||||||||||||||||||||||||||
| Total operating expenses | 89,076 | 92,960 | 74,062 | 364,395 | 214,557 | |||||||||||||||||||||||||||
| Operating income (loss) | 15,572 | 12,487 | (13,817) | (492) | 14,754 | |||||||||||||||||||||||||||
| Other income (expense), net: | ||||||||||||||||||||||||||||||||
| Interest income | 2,922 | 144 | — | 3,200 | 168 | |||||||||||||||||||||||||||
| Interest expense | (6,342) | (4,216) | (5,203) | (21,566) | (24,031) | |||||||||||||||||||||||||||
| Other, net | (6,755) | 135,368 | 68,871 | 115,405 | 22,332 | |||||||||||||||||||||||||||
| Other (expense) income, net | (10,175) | 131,296 | 63,668 | 97,039 | (1,531) | |||||||||||||||||||||||||||
| Income (loss) from continuing operations before income taxes and equity in earnings (losses) of unconsolidated investees | 5,397 | 143,783 | 49,851 | 96,547 | 13,223 | |||||||||||||||||||||||||||
| Benefits from (provision for) income taxes | 2,856 | (3,109) | (10,814) | 8,164 | (7,267) | |||||||||||||||||||||||||||
| Equity in earnings (losses) of unconsolidated investees | 365 | 1,958 | — | 2,323 | — | |||||||||||||||||||||||||||
| Net income (loss) from continuing operations | 8,618 | 142,632 | 39,037 | 107,034 | 5,956 | |||||||||||||||||||||||||||
| (Loss) income from discontinued operations before income taxes | — | — | (18,645) | (47,155) | (46,046) | |||||||||||||||||||||||||||
| Benefits from (provision for) income taxes | — | — | 602 | 584 | 2,048 | |||||||||||||||||||||||||||
| Net (loss) income from discontinued operations | — | — | (18,043) | (46,571) | (43,998) | |||||||||||||||||||||||||||
| Net income (loss) | 8,618 | 142,632 | 20,994 | 60,463 | (38,042) | |||||||||||||||||||||||||||
| Net (income) loss from continuing operations attributable to noncontrolling interests | (1,005) | (3,225) | (176) | (4,676) | 145 | |||||||||||||||||||||||||||
| Net (income) loss from discontinued operations attributable to noncontrolling interests | — | — | (622) | 250 | 539 | |||||||||||||||||||||||||||
| Net (income) loss attributable to noncontrolling interests | (1,005) | (3,225) | (798) | (4,426) | 684 | |||||||||||||||||||||||||||
| Net income (loss) from continuing operations attributable to stockholders | 7,613 | 139,407 | 38,861 | 102,358 | 6,101 | |||||||||||||||||||||||||||
| Net (loss) income from discontinued operations attributable to stockholders | — | — | (18,665) | (46,321) | (43,459) | |||||||||||||||||||||||||||
| Net income (loss) attributable to stockholders | $ | 7,613 | $ | 139,407 | $ | 20,196 | $ | 56,037 | $ | (37,358) | ||||||||||||||||||||||
| Net income (loss) per share attributable to stockholders - basic: | ||||||||||||||||||||||||||||||||
| Continuing operations | $ | 0.04 | $ | 0.80 | $ | 0.22 | $ | 0.59 | $ | 0.03 | ||||||||||||||||||||||
| Discontinued operations | $ | — | $ | — | $ | (0.11) | $ | (0.27) | $ | (0.25) | ||||||||||||||||||||||
| Net income (loss) per share - basic | $ | 0.04 | $ | 0.80 | $ | 0.11 | $ | 0.32 | $ | (0.22) | ||||||||||||||||||||||
| Net income (loss) per share attributable to stockholders - diluted: | ||||||||||||||||||||||||||||||||
| Continuing operations | $ | 0.04 | $ | 0.74 | $ | 0.22 | $ | 0.59 | $ | 0.03 | ||||||||||||||||||||||
| Discontinued operations | $ | — | $ | — | $ | (0.11) | $ | (0.27) | $ | (0.25) | ||||||||||||||||||||||
| Net income (loss) per share - diluted | $ | 0.04 | $ | 0.74 | $ | 0.11 | $ | 0.32 | $ | (0.22) | ||||||||||||||||||||||
| Weighted-average shares: | ||||||||||||||||||||||||||||||||
| Basic | 174,231 | 174,118 | 173,019 | 173,919 | 172,436 | |||||||||||||||||||||||||||
| Diluted | 175,518 | 192,497 | 192,875 | 174,603 | 175,116 | |||||||||||||||||||||||||||
SUNPOWER CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
| THREE MONTHS ENDED | TWELVE MONTHS ENDED | |||||||||||||||||||||||||||||||
| January 1, 2023 | October 2, 2022 | January 2, 2022 | January 1, 2023 | January 2, 2022 | ||||||||||||||||||||||||||||
| Cash flows from operating activities: | ||||||||||||||||||||||||||||||||
| Net income (loss) | $ | 8,618 | $ | 142,632 | $ | 20,994 | $ | 60,463 | $ | (38,042) | ||||||||||||||||||||||
Adjustments to reconcile net income (loss) to net cash used in operating activities: | ||||||||||||||||||||||||||||||||
| Depreciation and amortization | 9,504 | 8,048 | 4,008 | 34,600 | 11,506 | |||||||||||||||||||||||||||
| Stock-based compensation | 7,378 | 6,557 | 6,126 | 26,434 | 25,902 | |||||||||||||||||||||||||||
| Non-cash interest expense | 1,108 | 997 | 947 | 3,664 | 5,042 | |||||||||||||||||||||||||||
| Equity in (earnings) losses of unconsolidated investees | (365) | (1,958) | — | (2,323) | — | |||||||||||||||||||||||||||
| Loss (gain) on equity investments | 6,255 | (134,905) | (68,950) | (114,710) | (21,712) | |||||||||||||||||||||||||||
| (Gain) loss on sale of investments | — | — | — | — | (1,162) | |||||||||||||||||||||||||||
| (Gain) loss on business divestitures, net | — | — | — | — | (224) | |||||||||||||||||||||||||||
| Unrealized loss (gain) on derivatives | 11 | (2,304) | — | (2,293) | — | |||||||||||||||||||||||||||
| Dividend from equity method investees | (13) | 133 | — | 120 | — | |||||||||||||||||||||||||||
| Deferred income taxes | (1,367) | (1,410) | 9,797 | (13,973) | 5,688 | |||||||||||||||||||||||||||
| (Gain) loss on sale and impairment of residential lease assets | — | — | — | — | (226) | |||||||||||||||||||||||||||
| Other, net | 1,081 | (821) | 439 | 1,209 | (5,670) | |||||||||||||||||||||||||||
| Changes in operating assets and liabilities: | ||||||||||||||||||||||||||||||||
| Accounts receivable | 2,643 | (28,315) | (14,099) | (63,611) | (18,549) | |||||||||||||||||||||||||||
| Contract assets | (11,943) | (5,007) | 6,163 | (9,617) | 34,850 | |||||||||||||||||||||||||||
| Inventories | (88,562) | (5,728) | (1,567) | (111,349) | (5,325) | |||||||||||||||||||||||||||
| Project assets | — | — | 1,581 | 295 | 4,398 | |||||||||||||||||||||||||||
| Prepaid expenses and other assets | 9,690 | (42,366) | (21,786) | (202,474) | (32,701) | |||||||||||||||||||||||||||
| Operating lease right-of-use assets | 2,833 | 2,992 | 2,548 | 11,257 | 11,257 | |||||||||||||||||||||||||||
| Advances to suppliers | (2,877) | (4,216) | 225 | (9,165) | (462) | |||||||||||||||||||||||||||
| Accounts payable and other accrued liabilities | 45,142 | 31,326 | 39,976 | 122,986 | (16,269) | |||||||||||||||||||||||||||
| Contract liabilities | 1,921 | 32,390 | 13,736 | 100,584 | 10,229 | |||||||||||||||||||||||||||
| Operating lease liabilities | (2,673) | (3,334) | (2,549) | (13,579) | (13,006) | |||||||||||||||||||||||||||
| Net cash (used in) provided by operating activities | (11,616) | (5,289) | (2,411) | (181,482) | (44,476) | |||||||||||||||||||||||||||
| Cash flows from investing activities: | ||||||||||||||||||||||||||||||||
| THREE MONTHS ENDED | TWELVE MONTHS ENDED | |||||||||||||||||||||||||||||||
| January 1, 2023 | October 2, 2022 | January 2, 2022 | January 1, 2023 | January 2, 2022 | ||||||||||||||||||||||||||||
| Purchases of property, plant, and equipment | (11,849) | (15,375) | (6,090) | (48,807) | (10,024) | |||||||||||||||||||||||||||
| Investments in software development costs | (1,465) | (1,500) | (1,051) | (5,690) | (3,519) | |||||||||||||||||||||||||||
| Proceeds from sale of property, plant, and equipment | — | — | — | — | 900 | |||||||||||||||||||||||||||
| Cash paid for solar power systems | — | — | — | — | (635) | |||||||||||||||||||||||||||
| Cash received from sale of investments | — | — | — | — | 1,200 | |||||||||||||||||||||||||||
| Proceeds from business divestitures, net of de-consolidated cash | — | — | — | 146,303 | 10,516 | |||||||||||||||||||||||||||
| Cash paid for acquisitions, net of cash acquired | — | — | (124,200) | — | (124,200) | |||||||||||||||||||||||||||
| Cash paid for equity investments under the Dealer Accelerator Program and other | — | (14,500) | — | (30,920) | — | |||||||||||||||||||||||||||
| Proceeds from sale of equity investment | — | 290,278 | — | 440,108 | 177,780 | |||||||||||||||||||||||||||
| Proceeds from return of capital from equity investments | — | — | — | — | 2,276 | |||||||||||||||||||||||||||
| Cash paid for investments in unconsolidated investees | (2,431) | (2,424) | — | (8,173) | — | |||||||||||||||||||||||||||
| Dividend from equity method investees | 13 | 137 | — | 150 | — | |||||||||||||||||||||||||||
Net cash (used in) provided by investing activities | (15,732) | 256,616 | (131,341) | 492,971 | 54,294 | |||||||||||||||||||||||||||
| Cash flows from financing activities: | ||||||||||||||||||||||||||||||||
| Proceeds from bank loans and other debt | 21,482 | 24,453 | 28,412 | 146,211 | 152,081 | |||||||||||||||||||||||||||
| Repayment of bank loans and other debt | (15,271) | (68,959) | (24,385) | (182,274) | (180,771) | |||||||||||||||||||||||||||
| Repayment of non-recourse residential and commercial financing | — | — | — | — | (9,798) | |||||||||||||||||||||||||||
| Distributions to noncontrolling interests attributable to residential projects | (9,201) | — | — | (9,201) | — | |||||||||||||||||||||||||||
| Repayment of convertible debt | — | — | — | — | (62,757) | |||||||||||||||||||||||||||
| Payments for financing leases | (666) | (617) | — | (1,401) | — | |||||||||||||||||||||||||||
| Issuance of common stock to executive | — | — | — | — | 2,998 | |||||||||||||||||||||||||||
| Purchases of stock for tax withholding obligations on vested restricted stock | (943) | (874) | (2,500) | (11,405) | (9,762) | |||||||||||||||||||||||||||
| Net cash (used in) provided by financing activities | (4,599) | (45,997) | 1,527 | (58,070) | (108,009) | |||||||||||||||||||||||||||
| Effect of exchange rate changes on cash, cash equivalents, and restricted cash | — | — | — | — | — | |||||||||||||||||||||||||||
| THREE MONTHS ENDED | TWELVE MONTHS ENDED | |||||||||||||||||||||||||||||||
| January 1, 2023 | October 2, 2022 | January 2, 2022 | January 1, 2023 | January 2, 2022 | ||||||||||||||||||||||||||||
| Net (decrease) increase in cash, cash equivalents, and restricted cash | (31,947) | 205,330 | (132,225) | 253,419 | (98,191) | |||||||||||||||||||||||||||
| Cash, cash equivalents, and restricted cash, beginning of period | 433,979 | 228,649 | 280,838 | 148,613 | 246,804 | |||||||||||||||||||||||||||
| Cash, cash equivalents, and restricted cash, end of period | $ | 402,032 | $ | 433,979 | $ | 148,613 | $ | 402,032 | $ | 148,613 | ||||||||||||||||||||||
| Reconciliation of cash, cash equivalents, and restricted cash to the consolidated balance sheets, including discontinued operations: | ||||||||||||||||||||||||||||||||
| Cash and cash equivalents | $ | 377,026 | $ | 396,510 | $ | 127,130 | $ | 377,026 | $ | 127,130 | ||||||||||||||||||||||
| Restricted cash and cash equivalents, current portion | 9,855 | 13,204 | 4,157 | 9,855 | 4,157 | |||||||||||||||||||||||||||
| Restricted cash and cash equivalents, net of current portion | 15,151 | 24,265 | 17,326 | 15,151 | 17,326 | |||||||||||||||||||||||||||
| Total cash, cash equivalents, and restricted cash | $ | 402,032 | $ | 433,979 | $ | 148,613 | $ | 402,032 | $ | 148,613 | ||||||||||||||||||||||
| Supplemental disclosure of cash flow information: | ||||||||||||||||||||||||||||||||
| Property, plant, and equipment acquisitions funded by liabilities (including financing leases) | $ | 3,298 | $ | 4,495 | $ | (1,210) | $ | 12,428 | $ | 1,320 | ||||||||||||||||||||||
| Right-of-use assets obtained in exchange for lease obligations | $ | 1,464 | $ | 12,479 | $ | 3,671 | $ | 15,469 | $ | 19,628 | ||||||||||||||||||||||
| Working capital adjustment related to C&I Solutions sale | $ | — | $ | 740 | $ | — | $ | 7,005 | $ | — | ||||||||||||||||||||||
| Accrued legal expenditures on equity method investment | $ | 130 | $ | 5 | $ | — | $ | 298 | $ | — | ||||||||||||||||||||||
| Accrued debt issuance costs | $ | (437) | $ | 919 | $ | — | $ | 482 | $ | — | ||||||||||||||||||||||
| De-consolidation of right-of-use assets and lease obligations | $ | — | $ | — | $ | — | $ | — | $ | 3,340 | ||||||||||||||||||||||
| Debt repaid in sale of commercial projects | $ | — | $ | — | $ | — | $ | — | $ | 5,585 | ||||||||||||||||||||||
| Fair value of contingent consideration for business combination | $ | — | $ | — | $ | 11,100 | $ | — | $ | 11,100 | ||||||||||||||||||||||
| Cash paid for interest | $ | 741 | $ | 9,137 | $ | 1,555 | $ | 21,064 | $ | 25,289 | ||||||||||||||||||||||
| Cash paid for income taxes | $ | 2,250 | $ | 2,687 | $ | 2,509 | $ | 7,437 | $ | 22,825 | ||||||||||||||||||||||
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 results of operations of legacy business exited/to be exited. Non-GAAP gross margin includes adjustments relating to gain/loss on sale and impairment of residential lease assets, litigation, stock-based compensation, and amortization of intangible assets, 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 on equity investments, gain on business divestitures, impairment of property, plant, and equipment, transaction-related costs, non-cash interest expense, restructuring charges (credits), gain on convertible debt repurchased 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 subsidiary and equity method investee of TotalEnergies SE, 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 TotalEnergies SE.
•Mark-to-market loss (gain) in equity investments: We recognize 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 U.S. 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 TotalEnergies SE. 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 those investments. We believe that excluding these adjustments on equity investments is consistent with our internal reporting process as part of its status as a subsidiary and equity method investee of TotalEnergies SE and better reflects our ongoing results.
Other Non-GAAP Adjustments
•Results of operations of businesses exited/to be exited: We exclude the results of operations of our legacy businesses that we have exited, or to be exited, from our Non-GAAP results. These legacy businesses include our light commercial business that we exited starting in the first fiscal quarter of 2022 to reinforce the Company’s strategic direction to focus solely on the residential solar market, Hillsboro, Oregon facility that ceased manufacturing and revenue generation in the first quarter of 2021, as well as, results of our legacy power plant and legacy O&M businesses. We are not doing new activities for these businesses, and the remaining activities comprise of fulfillment of existing outstanding orders, true-up of estimated milestones payments, settlement of certain warranty obligations on projects and other wind-down activities. As such, these are excluded from our non-GAAP results as they are not reflective of our ongoing operating results.
•Loss/Gain on sale and impairment of residential lease assets: In fiscal 2018 and 2019, in an effort to sell all the residential lease assets owned by us, we sold membership units representing a 49% membership interest in majority of our residential lease business and retained a 51% membership interest. We recorded impairment charges based on the expected fair value for a portion of residential lease assets portfolio that was retained. Depreciation savings from the unsold residential lease assets resulting from their exclusion from non-GAAP results historically are excluded from our non-GAAP results as they are not reflective of ongoing operating results.
•Stock-based compensation: Stock-based compensation relates primarily to our equity incentive awards. Stock-based compensation is a non-cash expense that is dependent on market forces that are difficult to predict. We believe 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.
•Litigation: We may be involved in various instances of litigation, claims and proceedings that result in payments or recoveries. We exclude gains or losses associated with such events because the gains or losses do not reflect our underlying financial results in the period incurred. We also exclude expenses pertaining to litigation relating to businesses that discontinued as a result of the spin-off of Maxeon Solar, for which we are indemnifying them. We believe that it is appropriate to exclude such charges from our non-GAAP results as they are not reflective of ongoing operating results.
•Transaction-related costs: In connection with material transactions such as acquisition or divestiture of a business, the company incurred transaction costs including legal and accounting fees. We believe that it is appropriate to exclude these costs from our non-GAAP results as they would not have otherwise been incurred as part of the business operations and therefore are not reflective of ongoing operating results.
•Amortization of intangible assets and software: We incur amortization of intangible assets as a result of acquisitions, primarily from the Blue Raven acquisition, which includes brand, non-compete arrangements, and purchased technology. In addition, we also incur amortization of our capitalized internal-use software costs once the software has been placed into service, until the end of the useful life of the software. These capitalized internal-use software costs are related to the implementation of our new enterprise resource planning ("ERP") system we implemented during fiscal 2022. We believe that it is appropriate to exclude these amortization charges from our non-GAAP results as they are non-recurring in nature, and are therefore not reflective of ongoing operating results.
•Gain/Loss on business divestitures, net: In the second quarter of fiscal 2021, we sold a portion of our residential lease business and certain commercial projects. We recognized a gain and a loss relating to these business divestitures, respectively. We believe that it is appropriate to exclude such gain and loss from the company's non-GAAP financial measures as it is not reflective of ongoing operating results.
•Executive transition costs: We incur non-recurring charges related to the hiring and transition of new executive officers. During fiscal 2021, we appointed a new chief executive officer, as well as other chief executives, and we are investing resources in those executive transitions, and in developing new members of management as we complete our transformation. We believe that it is appropriate to exclude these from our non-GAAP results as they are not reflective of ongoing operating results.
•Acquisition-related costs: We incurred certain costs in connection with the acquisition of Blue Raven, that are either paid as part of the transaction or will be paid in the coming year, but are considered post-acquisition compensation under the applicable GAAP framework due to the nature of such items. A majority of the expense incurred in fourth quarter of fiscal 2021 represents cash paid to certain employees of Blue Raven for settlement of their pre-existing share-based payment plan, in excess of the respective fair value. For fiscal 2022, other post-combination expenses include change in fair value of contingent consideration as well as deferred post-combination employment expense payable to certain Blue Raven employees and sellers. We believe that it is appropriate to exclude these from our non-GAAP results as they are directly related to the acquisition transaction and non-recurring in nature, and are therefore not reflective of ongoing operating results.
•Business reorganization costs: In connection with the spin-off of Maxeon into an independent, publicly traded company, we incurred non-recurring charges on third-party legal and consulting expenses, primarily to enable in separation of shared information technology systems and applications. In addition, we incurred certain non-recurring costs upon amendment, settlement or termination of historical agreements with Maxeon to fully enable separate independent operations of the two companies that is focused on our respective core business. We believe that it is appropriate to exclude these from our non-GAAP results as it is not reflective of ongoing operating results.
•Restructuring charges (credits): We incur 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. We believe that it is appropriate to exclude these from our non-GAAP results as it is not reflective of ongoing operating results.
•Equity income from unconsolidated investees: We account for our minority investments in dealers included in the Dealer Accelerator Program using the equity method of accounting and recognize our proportionate share of the reported earnings or losses of the investees through net income. We do not control or manage the investees’ business operations and operating and financial policies. Therefore, we believe that it is appropriate to exclude these from our 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. Our non-GAAP tax amount is based on estimated cash tax expense and reserves. We forecast our 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 our 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, or tax impact of non-recurring items.
•Adjusted EBITDA adjustments: When calculating Adjusted EBITDA, in addition to adjustments described above, we exclude 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 | |||||||||||||||||||||||||||||||
| January 1, 2023 | October 2, 2022 | January 2, 2022 | January 1, 2023 | January 2, 2022 | ||||||||||||||||||||||||||||
| GAAP revenue | $ | 497,312 | $ | 475,711 | $ | 347,830 | $ | 1,741,072 | $ | 1,132,029 | ||||||||||||||||||||||
| Other adjustments: | ||||||||||||||||||||||||||||||||
| Results of operations of legacy business to be exited | (4,893) | (5,894) | (318) | (28,669) | (10,824) | |||||||||||||||||||||||||||
| Non-GAAP revenue | $ | 492,419 | $ | 469,817 | $ | 347,512 | $ | 1,712,403 | $ | 1,121,205 | ||||||||||||||||||||||
Adjustments to Gross Profit (Loss) / Margin:
| THREE MONTHS ENDED | TWELVE MONTHS ENDED | |||||||||||||||||||||||||||||||
| January 1, 2023 | October 2, 2022 | January 2, 2022 | January 1, 2023 | January 2, 2022 | ||||||||||||||||||||||||||||
| GAAP gross profit from continuing operations | $ | 104,648 | $ | 105,447 | $ | 60,245 | $ | 363,903 | $ | 229,310 | ||||||||||||||||||||||
| Other adjustments: | ||||||||||||||||||||||||||||||||
| Results of operations of legacy business to be exited | (403) | 659 | 1,586 | 5,344 | 5,180 | |||||||||||||||||||||||||||
| (Gain) loss on sale and impairment of residential lease assets | (268) | (276) | (275) | (1,101) | (1,537) | |||||||||||||||||||||||||||
| Executive transition costs | (321) | 60 | — | 202 | — | |||||||||||||||||||||||||||
| Stock-based compensation expense | 1,257 | 1,135 | 708 | 4,689 | 2,549 | |||||||||||||||||||||||||||
| Transaction-related costs | — | — | — | 56 | — | |||||||||||||||||||||||||||
| Business reorganization costs | — | — | — | 11 | — | |||||||||||||||||||||||||||
| Non-GAAP gross profit | $ | 104,913 | $ | 107,025 | $ | 62,264 | $ | 373,104 | $ | 235,502 | ||||||||||||||||||||||
| GAAP gross margin (%) | 21.0 | % | 22.2 | % | 17.3 | % | 20.9 | % | 20.3 | % | ||||||||||||||||||||||
| Non-GAAP gross margin (%) | 21.3 | % | 22.8 | % | 17.9 | % | 21.8 | % | 21.0 | % | ||||||||||||||||||||||
Adjustments to Net Income (Loss):
| THREE MONTHS ENDED | TWELVE MONTHS ENDED | |||||||||||||||||||||||||||||||
| January 1, 2023 | October 2, 2022 | January 2, 2022 | January 1, 2023 | January 2, 2022 | ||||||||||||||||||||||||||||
| GAAP net income (loss) from continuing operations attributable to stockholders | $ | 7,613 | $ | 139,407 | $ | 38,861 | $ | 102,358 | $ | 6,101 | ||||||||||||||||||||||
| Adjustments based on IFRS: | ||||||||||||||||||||||||||||||||
| Mark-to-market loss (gain) on equity investments | 6,255 | (137,233) | (68,950) | (117,038) | (21,712) | |||||||||||||||||||||||||||
| Other adjustments: | ||||||||||||||||||||||||||||||||
| Results of operations of legacy business to be exited | 708 | 3,388 | 2,661 | 14,532 | 11,683 | |||||||||||||||||||||||||||
| (Gain) loss on sale and impairment of residential lease assets | (268) | (276) | (275) | (1,101) | (6,494) | |||||||||||||||||||||||||||
| Litigation | 1,242 | 488 | (9,311) | 5,073 | 892 | |||||||||||||||||||||||||||
| Stock-based compensation expense | 7,372 | 6,550 | 5,217 | 26,305 | 22,752 | |||||||||||||||||||||||||||
| Amortization of intangible assets and software | 2,780 | 2,786 | 1,579 | 10,331 | 1,579 | |||||||||||||||||||||||||||
| (Gain) loss on business divestitures, net | — | — | — | — | (5,290) | |||||||||||||||||||||||||||
| Transaction-related costs | 44 | 144 | (22) | 1,411 | 72 | |||||||||||||||||||||||||||
| Executive transition costs | 3,599 | 1,685 | 1,254 | 10,437 | 2,583 | |||||||||||||||||||||||||||
| Business reorganization costs | 1 | 5 | (129) | 4,527 | 2,771 | |||||||||||||||||||||||||||
| Restructuring (credits) charges | — | — | 190 | (453) | 802 | |||||||||||||||||||||||||||
| Acquisition-related costs | 114 | 3,338 | 18,764 | 11,570 | 18,764 | |||||||||||||||||||||||||||
| Tax effect | (2,858) | 3,507 | 14,257 | (9,512) | 12,307 | |||||||||||||||||||||||||||
| Equity (income) loss from unconsolidated investees | (364) | (158) | — | (522) | — | |||||||||||||||||||||||||||
| Non-GAAP net income (loss) attributable to stockholders | $ | 26,238 | $ | 23,631 | $ | 4,096 | $ | 57,918 | $ | 46,810 | ||||||||||||||||||||||
Adjustments to Net Income (loss) per diluted share
| THREE MONTHS ENDED | TWELVE MONTHS ENDED | |||||||||||||||||||||||||||||||
| January 1, 2023 | October 2, 2022 | January 2, 2022 | January 1, 2023 | January 2, 2022 | ||||||||||||||||||||||||||||
| Net income (loss) per diluted share | ||||||||||||||||||||||||||||||||
| Numerator: | ||||||||||||||||||||||||||||||||
GAAP net income (loss) available to common stockholders1 | $ | 7,613 | $ | 139,407 | $ | 38,861 | $ | 102,358 | $ | 6,101 | ||||||||||||||||||||||
| Add: Interest expense on 4.00% debenture due 2023, net of tax | — | 3,026 | 3,026 | — | — | |||||||||||||||||||||||||||
GAAP net income (loss) available to common stockholders1 | $ | 7,613 | $ | 142,433 | $ | 41,887 | $ | 102,358 | $ | 6,101 | ||||||||||||||||||||||
Non-GAAP net income (loss) available to common stockholders1 | $ | 26,238 | $ | 23,631 | $ | 4,096 | $ | 57,918 | $ | 46,810 | ||||||||||||||||||||||
| Denominator: | ||||||||||||||||||||||||||||||||
| GAAP weighted-average shares | 174,231 | 174,118 | 173,019 | 173,919 | 172,436 | |||||||||||||||||||||||||||
| Effect of dilutive securities: | ||||||||||||||||||||||||||||||||
| Restricted stock units | 1,287 | 1,311 | 2,788 | 684 | 2,680 | |||||||||||||||||||||||||||
| 4.00% debentures due 2023 | — | 17,068 | 17,068 | — | — | |||||||||||||||||||||||||||
| GAAP dilutive weighted-average common shares: | 175,518 | 192,497 | 192,875 | 174,603 | 175,116 | |||||||||||||||||||||||||||
| Non-GAAP weighted-average shares | 174,231 | 174,118 | 173,019 | 173,919 | 172,436 | |||||||||||||||||||||||||||
| Effect of dilutive securities: | ||||||||||||||||||||||||||||||||
| Restricted stock units | 1,287 | 1,311 | 2,788 | 684 | 2,680 | |||||||||||||||||||||||||||
Non-GAAP dilutive weighted-average common shares1 | 175,518 | 175,429 | 175,807 | 174,603 | 175,116 | |||||||||||||||||||||||||||
| GAAP dilutive net income (loss) per share - continuing operations | $ | 0.04 | $ | 0.74 | $ | 0.22 | $ | 0.59 | $ | 0.03 | ||||||||||||||||||||||
| Non-GAAP dilutive net income (loss) per share - continuing operations | $ | 0.15 | $ | 0.13 | $ | 0.02 | $ | 0.33 | $ | 0.27 | ||||||||||||||||||||||
1In accordance with the if-converted method, net (loss) income available to common stockholders excludes interest expense related to the 4.00% debentures if the debentures are considered converted in the calculation of net (loss) income 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 income (loss) per diluted share.
Adjusted EBITDA:
| THREE MONTHS ENDED | TWELVE MONTHS ENDED | |||||||||||||||||||||||||||||||
| January 1, 2023 | October 2, 2022 | January 2, 2022 | January 1, 2023 | January 2, 2022 | ||||||||||||||||||||||||||||
| GAAP net income (loss) from continuing operations attributable to stockholders | $ | 7,613 | $ | 139,407 | $ | 38,861 | $ | 102,358 | $ | 6,101 | ||||||||||||||||||||||
| Adjustments based on IFRS: | ||||||||||||||||||||||||||||||||
| Mark-to-market loss (gain) on equity investments | 6,255 | (137,233) | (68,950) | (117,038) | (21,712) | |||||||||||||||||||||||||||
| Other adjustments: | ||||||||||||||||||||||||||||||||
| Results of operations of legacy business to be exited | 708 | 3,388 | 2,661 | 14,532 | 11,683 | |||||||||||||||||||||||||||
| (Gain) loss on sale and impairment of residential lease assets | (268) | (276) | (275) | (1,101) | (6,494) | |||||||||||||||||||||||||||
| Litigation | 1,242 | 488 | (9,311) | 5,073 | 892 | |||||||||||||||||||||||||||
| Stock-based compensation expense | 7,372 | 6,550 | 5,217 | 26,305 | 22,752 | |||||||||||||||||||||||||||
| Amortization of intangible assets and software | 2,780 | 2,786 | 1,579 | 10,331 | 1,579 | |||||||||||||||||||||||||||
| (Gain) loss on business divestitures, net | — | — | — | — | (5,290) | |||||||||||||||||||||||||||
| Transaction-related costs | 44 | 144 | (22) | 1,411 | 72 | |||||||||||||||||||||||||||
| Executive transition costs | 3,599 | 1,685 | 1,254 | 10,437 | 2,583 | |||||||||||||||||||||||||||
| Business reorganization costs | 1 | 5 | (129) | 4,527 | 2,771 | |||||||||||||||||||||||||||
| Restructuring charges | — | — | 190 | (453) | 802 | |||||||||||||||||||||||||||
| Acquisition-related costs | 114 | 3,338 | 18,764 | 11,570 | 18,764 | |||||||||||||||||||||||||||
| Equity (income) loss from unconsolidated investees | (364) | (158) | — | (522) | — | |||||||||||||||||||||||||||
| Cash interest expense, net of interest income | 3,480 | 4,108 | 5,141 | 18,295 | 23,634 | |||||||||||||||||||||||||||
| (Benefit from) provision for income taxes | (2,883) | 3,082 | 10,242 | (8,757) | 6,657 | |||||||||||||||||||||||||||
| Depreciation | 6,476 | 5,257 | 2,508 | 18,177 | 10,500 | |||||||||||||||||||||||||||
| Adjusted EBITDA | $ | 36,169 | $ | 32,571 | $ | 7,730 | $ | 95,145 | $ | 75,294 | ||||||||||||||||||||||
FY 2023 GUIDANCE
| (in thousands) | FY 2023 | ||||
| Residential Customers | 90,000 - 110,000 | ||||
Residential Adjusted EBITDA/Customer1 | $2,450 - $2,900 | ||||
Adjusted EBITDA2 | $125 million - $155 million | ||||
| Net Income (GAAP) | $52 million - $82 million | ||||
1.Excluding Product & Digital operating expenses for Residential only.
2.Adjusted EBITDA guidance for FY 2023 includes net adjustments that increase GAAP net income by approximately $73 million primarily relating to the following adjustments: stock-based compensation expense, results of operations of businesses exited/to be exited, acquisition-related costs, interest expense, depreciation and amortization, income taxes, and other non-recurring adjustments.