SAN JOSE, Calif., Oct. 16, 2012 /PRNewswire/ -- SunPower Corp. (NASDAQ: SPWR) today announced a reorganization plan to restructure its Philippines manufacturing operations and reduce its workforce.
As part of this initiative, the company will temporarily idle six of the 12 lines in its Fab 2 cell manufacturing plant and 20 percent of panel manufacturing in the Philippines to significantly reduce inventory, lower operational costs and improve efficiency. As a result, the overall blended utilization for the fourth quarter will be approximately 60 percent. Additionally, the company will reduce its workforce by approximately 900 employees with the reductions occurring primarily in the Philippines.
"Industry conditions continue to be challenging and while it is never an easy decision to reduce positions, we must make prudent decisions to effectively compete in an industry with significant overcapacity. Additionally, we'll further our efforts to reduce costs and improve operational efficiencies," said Tom Werner, SunPower chief executive officer and president. "With this aggressive reorganization plan, SunPower is well positioned to lead the solar market due to our world leading technology and products, significant downstream presence in multiple end segments and ability to open new market opportunities."
The company continues to make strong progress on its cost reduction roadmap and remains committed to reaching its cost per watt goal of less than $0.75 per watt on an efficiency adjusted basis for SunPower's lowest cost solar panels by the end of 2012. The company's previously disclosed Fiscal Year 2012 earnings guidance remains unchanged. SunPower will provide additional details on its strategic initiatives during its third quarter 2012 earnings conference call on Nov. 1, 2012.
SunPower expects to record restructuring charges totaling $10 million to $17 million, composed of severance benefits, lease and related termination costs and other associated costs, the majority of which will likely be in the fourth quarter 2012. The company expects that greater than 90 percent of these charges will be cash.
SunPower Corp. (NASDAQ: SPWR) designs, manufactures and delivers the highest efficiency, highest reliability solar panels and systems available today. Residential, business, government and utility customers rely on the company's quarter century of experience and guaranteed performance to provide maximum return on investment throughout the life of the solar system. Headquartered in San Jose, Calif., SunPower has offices in North America, Europe, Australia, Africa and Asia. For more information, visit www.sunpowercorp.com.
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are statements that do not represent historical facts and may be based on underlying assumptions. The company uses words and phrases such as "will," "well positioned," "committed to," "guidance," "expects" and similar expressions to identify forward-looking statements in this press release, including forward-looking statements regarding: (a) being well position to lead the solar market; (b) reaching its cost per watt goal of less than $0.75 per watt on an efficiency adjusted basis by the end of 2012; (c) fiscal year 2012 earnings guidance; and (d) expected restructuring charges, amount of such charges that is cash and the amount of such charges in Q4 2012. Such forward-looking statements are based on information available to the company as of the date of this release and involve a number of risks and uncertainties, some beyond the company's control, that could cause actual results to differ materially from those anticipated by these forward-looking statements, including risks and uncertainties such as: (i) increasing supply and competition in the industry and lower average selling prices, impact on gross margins, and any revaluation of inventory as a result of decreasing ASP or reduced demand;(ii) the impact of regulatory changes and the continuation of governmental and related economic incentives promoting the use of solar power, and the impact of such changes on our revenues, financial results, and any potential impairments or write off to intangible assets, project assets, long-lived assets and goodwill; (iii) the company's ability to meet its cost reduction plans and reduce it operating expenses; (iv) the company's ability to obtain and maintain an adequate supply of raw materials, components, and solar panels, as well as the price it pays for such items and third parties' willingness to renegotiate or cancel above market contracts; (v) general business and economic conditions, including seasonality of the solar industry and growth trends in the solar industry; (vi) the company's ability to revise its portfolio allocation geographically and across downstream channels to respond to regulatory changes; (vii) the company's ability to increase or sustain its growth rate; (viii) construction difficulties or potential delays, including obtaining land use rights, permits, license, other governmental approvals, and transmission access and upgrades, and any litigation relating thereto; (ix) timeline for revenue recognition and impact on the company's operating results; (x) the significant investment required to construct power plants and the company's ability to sell or otherwise monetize power plants, including the company's success in completing the design, construction and maintenance of CVSR and the AVSP power plant project; (xi) fluctuations in the company's operating results and its unpredictability; (xii) the availability of financing arrangements for the company's projects and the company's customers; (xiii) potential difficulties associated with operating the joint venture with AUO and the company's ability to achieve the anticipated synergies from the Tenesol acquisition; (xiv) success in achieving cost reduction, and the company's ability to remain competitive in its product offering, obtain premium pricing while continuing to reduce costs and achieve lower targeted cost per watt; (xv) the company's liquidity, substantial indebtedness, and its ability to obtain additional financing; (xvi) manufacturing difficulties that could arise;(xvii) the company's ability to achieve the expected benefits from its relationship with Total; (xviii) the success of the company's ongoing research and development efforts and the acceptance of the company's new products and services; (xix) the company's ability to protect its intellectual property; (xx) the company's exposure to foreign exchange, credit and interest rate risk; (xxi) the company's estimate of restructuring charges, and possible impairment or write off of goodwill, intangible assets, long-lived assets and project assets; (xxii) the success of the residential lease program; (xxiii) the accuracy of assumptions and compliance with treasury grant guidance and timing and amount of cash grant; (xxiv) possible consolidation of the joint venture AUO SunPower; and (xxv) other risks described in the company's Annual Report on Form 10-K for the year ended January 1, 2012, Quarterly Reports on Form 10-Q for the quarters ended April 1, 2012 and July 1, 2012, and other filings with the Securities and Exchange Commission. These forward-looking statements should not be relied upon as representing the company's views as of any subsequent date, and the company is under no obligation to, and expressly disclaims any responsibility to, update or alter its forward-looking statements, whether as a result of new information, future events or otherwise.
SOURCE SunPower Corp.