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SunPower Reports First Quarter 2022 Results

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  • Recorded $350 million GAAP revenue, including record-high $336 million non-GAAP residential revenue, 41% year-over-year residential growth

  • Added 16,500 customers, 40% year-over-year growth

  • Entered second quarter with a record 13,800 backlog, up 169% year-over-year

  • Advancing industry leadership with late-stage discussions to develop world's most innovative residential panel with First Solar

SAN JOSE, Calif., May 5, 2022 /PRNewswire/ -- SunPower Corp. (NASDAQ:SPWR), a leading solar technology and energy services provider, today announced financial results for the first quarter, ending April 3, 2022.

SunPower Logo. (PRNewsFoto/SunPower Corp.)
SunPower Logo. (PRNewsFoto/SunPower Corp.)

"SunPower delivered strong first quarter results, driven by a record $336 million non-GAAP residential revenue, representing 41% growth year-over-year. Demand is accelerating as consumers look to solar as a more stable, secure and sustainable energy source, and this is evident as we enter the second quarter with a record backlog and pipeline for new homes," said Peter Faricy, SunPower CEO. "We are executing across our key growth pillars and making strategic investments to ensure SunPower can capture this demand. This includes securing nationwide coverage through our direct business and dealer network, creating a world-class customer experience, building out our installation capacity, and developing industry leading financial products, hardware and software solutions."

SunPower reported first quarter net loss of $2M and Adjusted EBITDA of $11 million.

Capturing Demand by Executing Across Strategic Pillars

Energy share-of-wallet is increasing faster than other spending categories, according to a 2021 Deloitte Insights Consumer Spending Forecast, which predicts customers will increase spending on energy products and services by more than 20% from 2021 to 2026 compared to a total 7% increase in projected disposable personal income during that time. Demand for cleaner, more reliable energy is higher than ever, yet less than 5% of the 100 million home addressable market have adopted solar, presenting a land-grab opportunity for solar providers.

SunPower made significant strides towards capturing this demand in the first quarter, adding 16,500 customers in the period, up 40% from the previous year, with a record customer backlog of 13,800 bookings and a 70,000-customer new homes pipeline, setting the company up for high growth in 2022. SunPower is executing across the strategic pillars described at its recent Analyst Day to ensure it can capture this unprecedented demand through the rest of 2022 and beyond. First quarter updates include:

  1. SunPower is in late-stage discussions with First Solar (NASDAQ: FSLR) to co-develop the world's most advanced residential solar panel, exclusively for SunPower. This initiative is expected to support SunPower's strategy to expand its catalog of suppliers while remaining the leader in superior products and tech innovation.

  2. SunPower launched its Dealer Accelerator Program, through which it is making investments in local solar dealers to advance their growth and expand into new territory. As part of the program, participating dealers agree to sell SunPower® solar systems, SunVault™ battery storage and SunPower Financial™ solutions, with the goal of accelerating adoption of solar through SunPower's ecosystem of products. To date, the company has made minority investments in Freedom Solar, which serves Texas, the Front Range of Colorado and central Florida; and Sea Bright Solar, which serves New Jersey, New York and Southern California. SunPower also added 83 new dealers to its network in the last quarter.

  3. New Homes continues to be a key pillar of SunPower's business, providing meaningful growth in the first quarter and a record-high pipeline of more than 70,000 single and multifamily homes. SunPower currently holds a 41% market share among the top 60 builders in California and has five national agreements with the top 20 U.S. homebuilders. SunPower is actively expanding its new homes leadership across the country; in March, the company announced a multi-year exclusive agreement with builder Landsea Homes (NASDAQ: LSEA) covering California, Texas, Arizona and Florida.

  4. SunPower Financial closed the Dorado 1 lease/PPA fund, adding approximately $350 million of capacity to support customer demand and growth, reducing the combined cost of capital for lease and loan to less than 5.25%.

  5. SunPower's Net Promoter Score improved from 35 to 49, a 32% improvement year-over-year. Phone and Chat Service Levels also improved, reducing customer wait times 48% to less than one minute. The company's digital efforts also resulted in improved App Store ratings for the mySunPower mobile app and web page, with the App Store rating up from 4.2 to 4.4.

Financial Highlights

($ Millions, except percentages, residential
customers, and per-share data)

1st Quarter 2022

4th Quarter 2021

1st Quarter 2021

GAAP revenue from continuing operations

$350.3

$347.8

$240.1

GAAP gross margin from continuing operations

20.6%

17.3%

19.1%

GAAP net income (loss) from continuing operations

$(2.2)

$38.9

$(47.1)

GAAP net income (loss) from continuing operations
per diluted share

$(0.01)

$0.22

$(0.28)

Non-GAAP revenue from continuing operations1

$336.1

$347.5

$237.9

Non-GAAP gross margin from continuing operations1

21.7%

17.9%

22.2%

Non-GAAP net income (loss) from continuing operations1

$2.9

$4.1

$10.2

Non-GAAP net income (loss) from continuing
operations per diluted share1

$0.02

$0.02

$0.05

Adjusted EBITDA1

$11.2

$7.7

$18.8

Residential customers

443,800

427,300

363,000

Cash2

$142.3

$123.7

$209.8


The pending 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 for 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


"Closing out a strong first quarter we continue to perform well, with GAAP gross margin of 20.6% and non-GAAP residential gross margins above 20% for six quarters in a row. Additionally, our direct business is growing rapidly and outperforming the market," said Manavendra Sial, chief financial officer at SunPower. "In the first half of the year, you'll see us investing heavily in our platform to sustain strong customer demand and ensure our ability to capture the nation's growing interest in home solar. We expect to reap the rewards of that investment as we look towards the second half of the year and beyond, and we are on track to meet our 2022 guidance."

Financial highlights include:

  1. Added 16,500 customers in this quarter, bringing total install base to 443,800

  2. Recorded GAAP gross margin of 20.6% and non-GAAP residential gross margin of 23.0%

  3. Achieved SunPower Financial attachment rate greater than 40%

Financial Outlook
SunPower affirmed prior 2022 guidance of $2,000-$2,400 Adjusted EBITDA per customer and 73,000-80,000 incremental customers, resulting in $90-$110 million Adjusted EBITDA for the year.

Earnings Conference Call Information
SunPower will discuss its first quarter 2022 financial results on a conference call, today, Thursday, May 5 at 1:30 p.m. Pacific Time. The call-in number is (877) 371-5747 conference ID 5479606, passcode: SunPower, or the webcast 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.

About SunPower
Headquartered in California's Silicon Valley, SunPower (NASDAQ: SPWR) is a leading Distributed Generation Storage 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 our strategic partnerships and initiatives, including our proposed partnership with First Solar, our agreement with Landsea Homes, and our dealer accelerator program, 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 expansion of our direct business and dealer network, improving customer experience, increasing installation capacity, and development of new products and services; (d) our expectations regarding projected demand and growth in 2022 and beyond, our positioning for future success, and 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; and (f) our guidance for fiscal year 2022, including Adjusted EBITDA per customer, incremental customers, 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) 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, and pricing pressures; (4) changes in public policy, including the imposition and applicability of tariffs; (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 report on Form 10-K, 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.

©2022 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

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands)

(Unaudited)



April 3, 2022


January 3, 2021

Assets




Current assets:




Cash and cash equivalents

$ 142,250


$ 123,735

Restricted cash and cash equivalents, current portion

681


691

Short-term investments

308,835


365,880

Accounts receivable, net

116,354


121,268

Contract assets

35,721


25,994

Inventories

245,612


214,432

Advances to suppliers, current portion

2,685


462

Prepaid expenses and other current assets

128,271


100,212

Current assets of discontinued operations

179,484


120,792

Total current assets

1,159,893


1,073,466





Restricted cash and cash equivalents, net of current portion

12,857


14,887

Property, plant and equipment, net

42,495


33,560

Operating lease right-of-use assets

30,337


31,654

Solar power systems leased, net

44,550


45,502

Goodwill

126,338


126,338

Other intangible assets, net

24,776


24,879

Other long-term assets

129,529


156,994

Long-term assets of discontinued operations


47,526

Total assets

$ 1,570,775


$ 1,554,806





Liabilities and Equity




Current liabilities:




Accounts payable

$ 179,069


$ 138,514

Accrued liabilities

129,569


101,980

Operating lease liabilities, current portion

11,439


10,753

Contract liabilities, current portion

66,127


62,285

Short-term debt

107,863


109,568

Convertible debt, current portion

423,987


Current liabilities of discontinued operations

138,153


86,496

Total current liabilities

1,056,207


509,596





Long-term debt

338


380

Convertible debt, net of current portion


423,677

Operating lease liabilities, net of current portion

26,215


28,566

Contract liabilities, net of current portion

19,059


18,705

Other long-term liabilities

109,295


141,197

Long-term liabilities of discontinued operations


42,661

Total liabilities

1,211,114


1,164,782





Equity:




Common stock

174


173

Additional paid-in capital

2,719,927


2,714,500

Accumulated deficit

(2,150,083)


(2,122,212)

Accumulated other comprehensive income

11,170


11,168

Treasury stock, at cost

(222,573)


(215,240)

Total stockholders' equity

358,615


388,389

Noncontrolling interests in subsidiaries

1,046


1,635

Total equity

359,661


390,024

Total liabilities and equity

$ 1,570,775


$ 1,554,806

SUNPOWER CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share data)

(Unaudited)




THREE MONTHS ENDED



April 3, 2022


January 2, 2022


April 4, 2021

Total revenues


$ 350,277


$ 347,830


$ 240,136

Total cost of revenues


277,968


287,585


194,170

Gross profit


72,309


60,245


45,966

Operating expenses:







Research and development


5,010


4,214


4,624

Sales, general, and administrative


76,996


68,717


42,267

Restructuring charges (credits)


627


175


3,766

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




(226)

(Income) expense from transition services agreement, net


266


956


(3,087)

Total operating expenses


82,899


74,062


47,344

Operating income (loss)


(10,590)


(13,817)


(1,378)

Other (expense) income, net:







Interest income


42



52

Interest expense


(5,044)


(5,203)


(7,027)

Other, net


1,444


68,871


(44,515)

Other (expense) income, net


(3,558)


63,668


(51,490)

(Loss) income from continuing operations before income
taxes and equity in earnings of unconsolidated investees


(14,148)


49,851


(52,868)

Benefits from (provision for) income taxes


11,643


(10,814)


5,126

Net (loss) income from continuing operations


(2,505)


39,037


(47,742)

(Loss) income from discontinued operations before income
taxes and equity in losses of unconsolidated investees1


(26,298)


(18,645)


(1,854)

Benefits from (provision for) income taxes from
discontinued operations


343


602


98

Net (loss) income from discontinued operations, net of taxes


(25,955)


(18,043)


(1,756)

Net (loss) income


(28,460)


20,994


(49,498)

Net loss (income) from continuing operations attributable
to noncontrolling interests


339


(176)


595

Net loss (income) from discontinued operations attributable
to noncontrolling interests


250


(622)


518

Net loss (income) attributable to noncontrolling interests


589


(798)


1,113

Net (loss) income from continuing operations attributable to
stockholders


(2,166)


38,861


(47,147)

Net (loss) income from discontinued operations attributable to
stockholders


(25,705)


(18,665)


(1,238)

Net (loss) income attributable to stockholders


$ (27,871)


$ 20,196


$ (48,385)








Net (loss) income per share attributable to stockholders -
basic:







Continuing operations


$ (0.01)


$ 0.22


$ (0.28)

Discontinued operations


$ (0.15)


$ (0.11)


$ (0.01)

Net (loss) income per share – basic


$ (0.16)


$ 0.11


$ (0.29)








Net (loss) income per share attributable to stockholders -
diluted:







Continuing operations


$ (0.01)


$ 0.22


$ (0.28)

Discontinued operations


$ (0.15)


$ (0.11)


$ (0.01)

Net (loss) income per share – diluted


$ (0.16)


$ 0.11


$ (0.29)








Weighted-average shares:







Basic


173,376


173,019


171,200

Diluted


173,376


192,875


171,200

SUNPOWER CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)




THREE MONTHS ENDED



April 3, 2022


January 2, 2022


April 4, 2021

Cash flows from operating activities:







Net (loss) income


$ (28,460)


$ 20,994


$ (49,498)

Adjustments to reconcile net (loss) income to net cash used in
operating activities:







Depreciation and amortization


4,665


4,008


2,849

Stock-based compensation


5,427


6,126


5,437

Non-cash interest expense


726


947


1,505

Loss (gain) on equity investments


(1,315)


(68,950)


44,730

(Gain) loss on sale of investments




(1,162)

Deferred income taxes


(13,750)


9,797


(3,901)

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




(226)

Other, net


845


439


(5,054)








Changes in operating assets and liabilities:







Accounts receivable


(12,354)


(14,099)


4,114

Contract assets


(6,519)


6,163


487

Inventories


(35,081)


(1,567)


(8,271)

Project assets


2,892


1,581


9,197

Prepaid expenses and other assets


(86,502)


(21,786)


1,429

Operating lease right-of-use assets


2,415


2,548


2,875

Advances to suppliers


(2,222)


225


(3,852)

Accounts payable and other accrued liabilities


41,444


39,976


(24,152)

Contract liabilities


22,066


13,736


(13,461)

Operating lease liabilities


(3,027)


(2,549)


(3,429)

Net cash (used in) provided by operating
activities


(108,750)


(2,411)


(40,383)

Cash flows from investing activities: