SunPower Reports First-Quarter 2013 Results Q1 2013 GAAP Revenue of $635 million, Non-GAAP Revenue of $575 million

SAN JOSE, Calif., May 2, 2013 /PRNewswire/ -- SunPower Corp. (NASDAQ: SPWR) today announced financial results for its 2013 first quarter ended March 31, 2013. 

($ Millions except per-share data)

1st Quarter

2013

4th Quarter

2012

1st Quarter

2012

GAAP revenue(1)

$635.4

$678.5

$494.1

GAAP gross margin

9.3%

6.9%

9.2%

GAAP net loss(2)

($54.7)

($144.8)

($74.5)

GAAP net loss per diluted share(2)

($0.46)

($1.22)

($0.67)

Non-GAAP gross margin(3)

22.7%

18.7%

12.7%

Non-GAAP net income (loss) per diluted share(3)

$0.22

$0.18

($0.12)

Megawatts (MW) produced

208

153

297



(1)

GAAP revenue includes $60.8 million for the first quarter of fiscal 2013 and excludes $106.1 million and $86.2 million for the fourth and first quarter of fiscal 2012, respectively, in revenue related to the construction of utility power plant projects and construction activities. See details in the non-GAAP measures disclosure included in this press release.

(2)

GAAP results include approximately $90.4 million, $179.3 million and $54.0 million for the first quarter of fiscal 2013, the fourth quarter of fiscal 2012 and the first quarter of fiscal 2012, respectively, in net, pre-tax charges and adjustments excluded from non-GAAP results.  See details in the non-GAAP measures disclosure included in this press release.

(3)

A reconciliation of GAAP to non-GAAP results is included at the end of this press release.

"SunPower started 2013 with strong quarterly performance.  Our results reflect the benefits of our superior solar panel technology combined with strong performance from both our rooftop and ground mount teams," said Tom Werner, SunPower president and CEO.  "Regionally, North America posted excellent results in all end segments.  In our power plant business, we started initial construction of the 579-megawatt (MW) Antelope Valley Solar Projects (AVSP) for MidAmerican Solar and reached 90 percent completion on the California Valley Solar Ranch (CVSR) project owned by NRG Energy.  With installation at CVSR expected to be finished by the end of the second quarter, we are on plan for full project completion by the end of the year. Demand in the residential lease business remained solid and once again exceeded our finance capacity in the first quarter. 

"Additionally, demand in Japan remains very strong as Toshiba and Sharp accounted for approximately 25 percent of total first-quarter shipments.  Finally, in Europe, we saw modest improvement in industry conditions during the quarter and are on track to return to profitability in the region by the end of 2013," concluded Werner.

Key milestones achieved by the company since the fourth quarter of 2012 include:

  • Initiated construction activities for the 579-MW AVSP for MidAmerican Solar
  • Installed more than 225-MW to date for the 250-MW CVSR project 
  • Dedicated first MW-scale SunPower® C7 Tracker deployment for Salt River Project in Arizona
  • SunPower and its partners awarded 65-MW in recent French tender
  • Signed 5-MW agreement with Verizon to be deployed over six states 
  • Residential lease program – 16,200 customers with approximately 130-MW booked to date
  • Generated $216 million in free cash flow including lease financings

"As a result of solid execution, we exceeded our financial targets for the quarter while further strengthening our balance sheet," said Chuck Boynton, SunPower CFO.  "We also continued to prudently manage our working capital needs as we reduced inventory and generated $216 million in free cash flow during the quarter.  With our strong project backlog, continued growth in residential lease and global focus on improving our cost structure, we remain confident in achieving our 2013 financial targets."

First quarter fiscal 2013 GAAP results include pre-tax charges, expenses and adjustments totaling approximately $90.4 million, including a $68.1 million gross margin adjustment related to the timing of revenue recognition from utility power plant projects and construction activities; $8.5 million in stock-based compensation expense; $11.9 million in non-cash interest expense; a benefit of $0.6 million in restructuring related to the October 2012 restructuring plan, and $2.3 million of other adjustments.  These adjustments and charges are excluded from the company's non-GAAP results.  Additionally, first quarter GAAP results include an adjustment of approximately $60.8 million in revenue related to GAAP real estate accounting requirements.

Second Quarter 2013 Financial Outlook
SunPower will provide the company's second quarter and fiscal year 2013 outlook at its Analyst Day to be held on May 15, 2013 in New York City starting at 10:00 a.m. Eastern Time.  Please note that the entire event will be webcast and relevant materials will be posted to the company's website prior to the commencement of the event.  To listen to the webcast, investors are encouraged to visit the company's Events and Presentations section of the SunPower Investor Relations page at http://investors.sunpowercorp.com/events.cfm to register.

The company will host a conference call for investors this afternoon to discuss its first quarter 2013 performance at 1:30 p.m. Pacific Time.  The call will be webcast and can be accessed from SunPower's website at http://investors.sunpowercorp.com/events.cfm.

This press release contains both GAAP and non-GAAP financial information.  Non-GAAP historical figures are reconciled to the closest GAAP equivalent categories in the financial attachment of this press release.  Please note that the company has posted supplemental information and slides related to its first quarter 2013 performance on the Events and Presentations section of the SunPower Investor Relations page at http://investors.sunpowercorp.com/events.cfm.  The capacity of power plants in this release is described in approximate megawatts on an alternating current (ac) basis unless otherwise noted.

About SunPower
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.

Forward-Looking Statements
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 "strategy," "roadmap," "expected," "on plan," "on track," " continue to," "continued," "remain confident," "outlook" and similar expressions to identify forward-looking statements in this press release, including forward-looking statements regarding:  (a) remaining on plan to complete the construction of CVSR by end of 2013, (b) on track to return to profitability by end of 2013 in Europe, (c) prudent management of working capital needs, (d) being able to recognize revenue on project backlog, (e) growing the residential lease program, and (f) achieving 2013 financial targets. 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 revenues, 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 our intangible assets, project assets and long-lived assets; (iii) company's success in completing the design, construction and maintenance of CVSR and Antelope Valley Solar Ranch, and any early termination in the agreements between NRG or MidAmerican and SunPower for these projects, and any liquidated damages that are payable under these agreements; (iv) the company's ability to meet its cost reduction plans and reduce its operating expenses; (v) 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, third parties' willingness to renegotiate or cancel above market contracts, and the resolution of any disputes, arbitration or litigation relating to suppliers; (vi) general business and economic conditions, including seasonality of the solar industry and growth trends in the solar industry; (vii) the company's ability to obtain additional financing for its residential lease program and its ability to grow the residential lease program in NA and globally; (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; (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; (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 S.A.; (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 joint venture in China's ability to obtain all required government approvals and the company's ability to successfully operate the joint venture in China; (xx) being able to manage market conditions in Europe and reach profitability in Europe; (xxi) the accuracy of assumptions and compliance with treasury cash grant and IRS guidance, and the timing and amount of cash grant and investment tax credit received, including the impact of sequestration; (xxii) possible consolidation of the joint venture AUO SunPower; and (xxiii) other risks described in the company's Annual Report on Form 10-K for the year ended December 30, 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

SunPower is a registered trademark of SunPower Corp. All other trademarks are the property of their respective owners.


 SUNPOWER CORPORATION 

 CONDENSED CONSOLIDATED BALANCE SHEETS 

 (In thousands) 






 (Unaudited) 







Mar. 31,


Dec. 30,



2013


2012







ASSETS







Cash and cash equivalents

$     505,587


$     457,487


Restricted cash and cash equivalents

29,167


46,964


Investments

10,860


10,885


Accounts receivable, net

303,009


398,150


Costs and estimated earnings in excess of billings

37,244


36,395


Inventories

281,367


291,386


Advances to suppliers

355,724


351,405


Prepaid expenses and other assets

734,226


889,116


Property, plant and equipment, net

806,143


774,909


Project assets - plants and land

98,793


83,507


Other intangible assets, net

597


744







Total assets

$  3,162,717


$  3,340,948












LIABILITIES AND EQUITY 







Accounts payable

$     333,684


$     414,335


Accrued and other liabilities

693,044


582,991


Billings in excess of costs and estimated earnings

222,853


225,550


Bank loans and other debt

233,717


390,361


Convertible debt

442,710


438,629


Customer advances

293,955


295,730







Total liabilities

2,219,963


2,347,596







Stockholders' equity 

937,712


993,352


Noncontrolling interest in subsidiary

5,042


-







Total equity

942,754


993,352







Total liabilities and equity

$  3,162,717


$  3,340,948





SUNPOWER CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share data)

(Unaudited)











THREE MONTHS ENDED




Mar. 31,


Dec. 30,


Apr. 1,




2013


2012


2012










Revenue:








AMERICAS


$   484,122


$   520,200


$   281,493


EMEA


68,652


89,410


156,110


APAC


82,659


68,915


56,528


Total revenue


635,433


678,525


494,131










Cost of revenue:








AMERICAS


416,081


437,355


242,119


EMEA


91,494


137,071


156,845


APAC


68,545


57,222


49,919


Total cost of revenue


576,120


631,648


448,883










Gross margin


59,313


46,877


45,248










Operating expenses:








Research and development


13,170


17,670


16,726


Selling, general and administrative


70,092


101,858


76,194


Restructuring charges


(337)


39,634


3,046










Total operating expenses


82,925


159,162


95,966










Operating loss


(23,612)


(112,285)


(50,718)










  Other income (expense), net


(35,035)


(24,443)


(19,031)










Loss before income taxes and equity in earnings (loss) of unconsolidated investees


(58,647)


(136,728)


(69,749)










Provision for income taxes


(2,989)


(9,300)


(1,356)


Equity in earnings (loss) of unconsolidated investees


(333)


1,257


(3,425)










Net loss


(61,969)


(144,771)


(74,530)










  Net loss attributable to noncontrolling interest (1)


7,273


-


-










Net loss attributable to stockholders


$   (54,696)


$  (144,771)


$    (74,530)










Net loss per share attributable to stockholders:








Net loss per share – basic


$       (0.46)


$        (1.22)


$        (0.67)


Net loss per share – diluted 


$       (0.46)


$        (1.22)


$        (0.67)










Weighted-average shares:








- Basic


119,553


119,148


111,785


- Diluted


119,553


119,148


111,785










(1) Under GAAP, this represents income to stockholders






SUNPOWER CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(In thousands)

(Unaudited)











THREE MONTHS ENDED




Mar. 31,


Dec. 30,


Apr. 1,




2013


2012


2012


















Net loss


$  (61,969)


$  (144,771)


$  (74,530)


Components of comprehensive loss:








Translation adjustment


(1,343)


843


5,998


Net unrealized gain (loss) on derivatives


2,835


22


(5,750)


Income taxes


(533)


(4)


1,080










Net change in accumulated other comprehensive income (loss)


959


861


1,328










Total comprehensive loss


(61,010)


(143,910)


(73,202)










Comprehensive loss attributable to noncontrolling interest (1)


7,273


-


-










Comprehensive loss attributable to stockholders


$  (53,737)


$  (143,910)


$  (73,202)










(1) Under GAAP, this represents comprehensive income to stockholders





SUNPOWER CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)











THREE MONTHS ENDED




Mar. 31,


Dec. 30,


Apr. 1,




2013


2012


2012








(1)


Cash flows from operating activities:








Net loss


$     (61,969)


$    (144,771)


$    (74,530)


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








Stock-based compensation


8,516


9,260


12,541


Depreciation


23,620


25,909


29,071


Loss on retirement of property, plant and equipment


-


21,408


-


Amortization of other intangible assets


147


1,015


2,782


Gain on mark-to-market derivatives


-


-


(13)


Non-cash interest expense


11,890


8,841


7,099


Amortization of debt issuance costs


1,094


946


1,019


Third-party inventories write-down


-


-


9,045


Equity in (earnings) loss of unconsolidated investees


333


(1,257)


3,425


Deferred income taxes and other tax liabilities


4,724


(4,442)


(2,306)


Changes in operating assets and liabilities:








Accounts receivable


60,340


(113,343)


87,672


Costs and estimated earnings in excess of billings


(849)


29,167


2,784


Inventories


(5,606)


78,400


(86,539)


Project assets


(35,250)


78,520


(39,027)


Prepaid expenses and other assets


197,489


(100,720)


(67,498)


Advances to suppliers


(4,319)


6,110


(15,724)


Accounts payable and other accrued liabilities


(28,825)


134,572


9,140


Billings in excess of costs and estimated earnings


(2,697)


85,926


(665)


Customer advances


(1,775)


25,663


1,016


Net cash provided by (used in) operating activities


166,863


141,204


(120,708)










Cash flows from investing activities:








Decrease (increase) in restricted cash and cash equivalents


17,797


(21,750)


43,944


Purchases of property, plant and equipment


(12,042)


(25,753)


(32,782)


Cash paid for solar power systems, leased and to be leased


(41,688)


(49,791)


(15,921)


Proceeds from sale of equipment to third-party


11


5


416


Cash received for sale of investment in unconsolidated investee


-


-