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SunPower Reports Third Quarter 2021 Results

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  • SPWR

- Strong third quarter Residential demand with record lead generation.

- Growing demand for storage, third quarter storage bookings run rate at $80 million, on track for $100 million run rate by year end.

- Reported third quarter financials consistent with previous October 5th business update.

- Geographic expansion with Blue Raven brings solar to more homeowners across U.S.

SAN JOSE, Calif., Nov. 3, 2021 /PRNewswire/ -- SunPower Corp. (NASDAQ:SPWR), a leading solar technology and energy services provider, today announced financial results for its third quarter ended October 3, 2021.

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

Residential demand remains strong with record lead generation and 14,200 new customers, up 29% versus a year earlier. New homes market accelerated growth with 5,700 new customers in the quarter, more than double when compared to the previous year.

"Our decision to increase our focus on the residential market was validated by strong sequential third quarter solar and storage demand and deployment, combined with continued margin expansion," said Peter Faricy, CEO of SunPower. "The time is now for homeowners to adopt solar energy and storage, with flexible financing options and favorable clean energy incentives currently under consideration by Congress that make it easier for consumers to help fight against the increasing impact of climate change. Along with our recent acquisition of Blue Raven Solar and new leadership hires, there is a bright future for the next phase of SunPower."

Making Solar Accessible to All
To meet the goals of a clean energy future in which nearly half of the U.S. is powered by solar, policymakers and corporations must work together to make solar accessible for all customers. With 108 MW of Residential bookings in the quarter, up 36% versus the prior year, the company's total residential install base has grown to nearly 390,000, not including 20,000 from the recent acquisition of Blue Raven Solar in October. SunPower's recent efforts to further expand the reach of solar include:

  • Geographic expansion into underpenetrated areas including the Northwest and Mid-Atlantic regions with Blue Raven Solar.

  • Continued leadership in the new homes market with two new agreements with homebuilders, including a multi-year exclusive agreement with Toll Brothers to provide solar, storage and services to new homes and communities.

  • Under SunPower's ESG program, the company launched the SunPower 25X25 initiatives— spanning workforce diversity, solar access expansion and dealer diversity programs — to ensure the resilience and economic benefits of distributed solar and battery storage serve historically underserved communities.

Widespread Storage Adoption
Amidst increasing power outages and rising energy prices, consumers are increasingly seeking resiliency with battery storage. According to Wood Mackenzie, annual global storage deployments will nearly triple year-over-year. SunPower is meeting increased market demand for storage solutions through both the direct and dealer channels, with dealers ramping up on sales. The company is on track to achieve a $100 million energy storage bookings run rate by the end of 2021 with 27% of solar customers purchasing storage through SunPower's Direct sales channel.

SunPower was also awarded a $6.65 million grant by the U.S. Department of Energy to participate in its Connected Communities program, working with partners to build two new communities that will compare the benefits of community-level versus residential-level energy storage while providing grid services to the local utility. SunPower will oversee the project and provide energy services technology.

Financial Highlights

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

3rd Quarter 2021

2nd Quarter 2021

3rd Quarter 2020

GAAP revenue

$323.6

$308.9

$274.8

GAAP gross margin from continuing operations

18.4%

19.8%

13.5%

GAAP net income (loss) from continuing operations

$(84.4)

$75.2

$109.5

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

$(0.49)

$0.40

$0.57

Non-GAAP revenue1

$323.6

$308.9

$274.8

Non-GAAP gross margin1

18.7%

20.6%

14.0%

Non-GAAP net income (loss)1

$9.8

$10.4

$(6.5)

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

$0.06

$0.06

$(0.04)

Adjusted EBITDA1

$17.5

$22.2

$8.6

MW Recognized

121

125

108

Cash2

$268.6

$140.5

$324.7


Information presented for 3rd quarter 2020 above is for continuing operations only, and excludes results of Maxeon, other than Cash.


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

"SunPower concludes the third quarter with plans to focus intently on the fast growing and largely untapped U.S. residential market," said Manavendra Sial, chief financial officer at SunPower. "As we head into the fourth quarter and 2022, we are seeing exceptional performance in lead generation and new customer bookings for residential solar and storage. Commercial & Industrial Solutions (CIS) business also had strong bookings for the third quarter. Our cash position is strong, and there is potential to further reduce our cost of capital. The strength of our balance sheet will also enable us to look toward new product and digital investment, leading to continued growth and market share expansion."

SunPower reported, in line with the company's October 5th update, an Adjusted EBITDA of $17.5 million for this quarter including $(8) million from the CIS segment and a net loss of $84.4 million primarily driven by the non-cash mark-to-market adjustment of the company's holdings of Enphase shares. The company is considering strategic options for CIS and will provide an update in the fourth quarter of 2021.

Other quarter highlights include:

  • Recognized 121 MW, including 92 MW for residential. The pipeline for new homes systems is robust with visibility toward an incremental 58,000 homes (up to 230 MW), including multi-family housing.

  • Residential gross margin was at $0.69/w for the third quarter, up 50% compared to prior year.

Third quarter non-GAAP results exclude net adjustments that, in the aggregate, increased GAAP loss by $94 million, resulting from $86 million related to a mark-to-market loss on equity investments, $5 million related to stock-based compensation expense, and $3 million related to other non-recurring items.

Financial Outlook
To provide additional clarity to investors, the company has provided separate guidance for CIS and Legacy business segments for the fourth quarter of 2021.

Fourth quarter GAAP revenue guidance for SunPower, excluding CIS and Legacy business, is $330 to $380 million and Adjusted EBITDA guidance is $28 to $46 million. Separately for CIS and Legacy business, fourth quarter revenue guidance is $31 to $41 million and Adjusted EBITDA guidance is $(10) to $(5) million due to project schedules and supply chain impacts, similar to that experienced in the third quarter. Fourth quarter GAAP net income guidance, which includes all segments, is $(5) to $15 million.

For the Full Year 2021, revenue and Adjusted EBITDA guidance for SunPower, including CIS and Legacy business, is below the prior guidance of $1,410 to $1,490 and $110 to $130 million, respectively, primarily due to CIS project schedule delays impacting both revenue and Adjusted EBITDA and lower revenues from Light Commercial.

SunPower's residential business continues to be strong, and the company expects 345 to 375 MW recognized for the full year 2021, with 55,000 to 60,000 new residential customers and expects to exit 2021 at >$0.70/w gross margin run rate, consistent with prior guidance.

Given strong residential demand, the company's color on Full Year 2022 Adjusted EBITDA growth for SunPower excluding CIS and Legacy business remains consistent with the October 5th update, including plans for incremental investment in operating expense.

The company will host a conference call for investors this afternoon to discuss its third quarter 2021 performance at 1:30 p.m. Pacific Time. The call will be webcast and can be accessed from SunPower's Investor Relations along with supplemental financial information 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 while providing cost savings to homeowners, businesses, governments, schools and utilities. 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 achievement of our 2021 goals and our future performance based on bookings, backlog, and pipelines in our sales channels and for our products; (b) our expectations for the policy and regulatory environment, including legislation and prospects for final passage and contents, and the impacts thereof on our business and financial results; (c) our plans and expectations for our products and solutions, including anticipated demand and our ability to meet it, and our ability to meet our targets and goals; (d) our expectations for the impacts of the acquisition of Blue Raven Solar on our business and financial results, our competitive positioning, and positioning for future success following the acquisition; (e) our strategic plans and areas of investment, both current and future, and expectations for the results thereof; (f) our expectations regarding the impact of our 25X25 initiative to help ensure historically underserved communities benefit from solar and storage; (g) our plans and expectations regarding strategic partnerships and initiatives, including our agreement with Toll Brothers and our grant from the Department of Energy, and the anticipated impacts thereof on our business and financial results, as well as our ability to develop cost-effective products and solutions and drive wider adoption; (h) the anticipated future success of our growth initiatives, including our ability to expand into new markets and increase adoption of our financial products, including impacts on our business and financial results; and (i) our fourth quarter financial guidance, including GAAP revenue and Adjusted EBITDA excluding the CIS and Legacy business, GAAP revenue and Adjusted EBITDA for the CIS and Legacy business, and GAAP net income, and related assumptions; (j) our fiscal 2021 guidance, including GAAP revenue and Adjusted EBITDA, as well as expectations for residential MW recognized, new residential customers, and residential gross margin, and related assumptions; and (l) our expectations for fiscal 2022, including Adjusted EBITDA growth and plans for incremental investment, 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) 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; (2) competition in the solar and general energy industry and downward pressure on selling prices and wholesale energy pricing; (3) regulatory changes and the availability of economic incentives promoting use of solar energy; (4) 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; (5) changes in public policy, including the imposition and applicability of tariffs; (6) our dependence on sole- or limited-source supply relationships, including our exclusive supply relationship with Maxeon Solar Technologies; (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.

©2021 SunPower Corporation. All rights reserved. SUNPOWER 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)



October 3, 2021


January 3, 2021

Assets




Current assets:




Cash and cash equivalents

$

268,574



$

232,765


Restricted cash and cash equivalents, current portion

7,438



5,518


Short-term investments

310,720




Accounts receivable, net

112,059



108,864


Contract assets

90,235



114,506


Inventories

241,425



210,582


Advances to suppliers, current portion

3,501



2,814


Project assets - plants and land, current portion

12,080



21,015


Prepaid expenses and other current assets

93,381



94,251


Total current assets

1,139,413



790,315






Restricted cash and cash equivalents, net of current portion

4,826



8,521


Property, plant and equipment, net

29,751



46,766


Operating lease right-of-use assets

57,978



54,070


Solar power systems leased, net

46,561



50,401


Other long-term assets

150,205



696,409


Total assets

$

1,428,734



$

1,646,482






Liabilities and Equity




Current liabilities:




Accounts payable

$

157,742



$

166,066


Accrued liabilities

87,298



121,915


Operating lease liabilities, current portion

12,609



9,736


Contract liabilities, current portion

70,515



72,424


Short-term debt

66,304



97,059


Convertible debt, current portion



62,531


Total current liabilities

394,468



529,731






Long-term debt

42,082



56,447


Convertible debt, net of current portion

423,370



422,443


Operating lease liabilities, net of current portion

36,099



43,608


Contract liabilities, net of current portion

28,241



30,170


Other long-term liabilities

137,469



157,597


Total liabilities

1,061,729



1,239,996






Equity:




Common stock

172



170


Additional paid-in capital

2,711,769



2,685,920


Accumulated deficit

(2,142,408)



(2,085,246)


Accumulated other comprehensive income

9,375



8,799


Treasury stock, at cost

(212,740)



(205,476)


Total stockholders' equity

366,168



404,167


Noncontrolling interests in subsidiaries

837



2,319


Total equity

367,005



406,486


Total liabilities and equity

$

1,428,734



$

1,646,482


SUNPOWER CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share data)

(Unaudited)




THREE MONTHS ENDED


NINE MONTHS ENDED



October 3,
2021


July 4, 2021


September
27, 2020


October 3,
2021


September
27, 2020

Revenues:











Solar power systems, components, and other


$

318,607



$

303,408



$

267,619



$

923,252



$

765,316


Residential leasing


1,291



1,354



1,284



3,765



3,937


Solar services


3,738



4,165



5,903



11,944



13,766


Total revenues


323,636



308,927



274,806



938,961



783,019


Cost of revenues:











Solar power systems, components, and other


260,251



246,053



233,144



760,408



681,649


Residential leasing


935



678



1,209



2,214



3,722


Solar services


2,800



1,165



3,313



5,784



5,672


Total cost of revenues


263,986



247,896



237,666



768,406



691,043


Gross profit


59,650



61,031



37,140



170,555



91,976


Operating expenses:











Research and development


2,979



4,711



5,344



12,705



19,106


Sales, general, and administrative


51,169



56,730



35,462



155,643



112,193


Restructuring (credits) charges


(230)



808



(97)



4,344



2,738


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




(68)



386



(294)



253


(Gain) loss on business divestitures, net




(224)





(224)



(10,458)


Income from transition services agreement, net


(468)



(1,656)



(1,889)



(5,211)



(1,889)


Total operating expenses


53,450



60,301



39,206



166,963



121,943


Operating income (loss)


6,200



730



(2,066)



3,592



(29,967)


Other income (expense), net:











Interest income


83



114



104



249



682


Interest expense


(6,710)



(7,721)



(7,090)



(22,396)



(24,731)


Other, net


(86,074)



84,071



155,457



(45,474)



277,100


Other income (expense), net


(92,701)



76,464



148,471



(67,621)



253,051


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


(86,501)



77,194



146,405

...