SunPower to Report Third Quarter 2020 Results

Third Quarter Company Highlights

  • Successfully completed spin-off of Maxeon Solar Technologies; new segmentation announced
  • Exceeded revenue and Adjusted EBITDA guidance; expanded gross margin per watt
  • Ended quarter with $325 million in cash

Residential and Light Commercial (RLC)

  • Residential strength – $15 million Adjusted EBITDA, added 10,000 customers
  • New product success – significant SunVault™ storage demand; >100 OneRoof™ installs to date
  • Closed new residential solar plus storage financing facility to drive substantially better economics
  • Secured committed tax equity capacity to meet demand through mid-2021

Commercial and Industrial Solutions (C&I Solutions)

  • Posted positive Adjusted EBITDA for the quarter
  • More than doubled gross margin per watt year over year
  • Storage adding $0.20/w to pipeline, > 30 percent attach rates for projects in backlog
  • Fully booked for the fourth quarter; >275 megawatts (MW) projects contracted / awarded
($ Millions, except percentages and per-share data)3rd Quarter 20202nd Quarter 20203rd Quarter 2019
GAAP revenue$274.8$217.7$286
GAAP gross margin from continuing operations13.5%11.8%15.9%
GAAP net income from continuing operations$109.5$55.9$18.6
GAAP net income (loss) from continuing operations per diluted share$0.57$0.31$0.12
Non-GAAP revenue1$274.8$217.7$301.8
Non-GAAP gross margin114.0%12.6%16.1%
Non-GAAP net (loss) income1$(6.5)$(17.2)$9.1
Non-GAAP net (loss) income from continuing operations per diluted share1$(0.04)$(0.10)$0.06
Adjusted EBITDA1$8.6$(4.3)$25.1
MW Recognized10891124

Information presented above is for continuing operations only and excludes results of Maxeon for all periods presented, other than Cash for 2nd quarter 2020 and 3rd quarter 2019. 

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

Third Quarter 2020 Results
“Our solid third quarter results reflect the strong demand for our industry-leading solutions in both our residential and commercial markets,” said Tom Werner, SunPower CEO and chairman of the board.

“Overall, we executed well as MW recognized grew 20% sequentially, we further expanded our gross margin, generated positive cash flow and added to our significant backlog. Additionally, we are pleased with the customer response to our recent product introductions as demand for our SunVault residential storage solution remains very strong while we continue to add partners for our OneRoof product for the new homes market. We expect these positive trends to continue in the fourth quarter. Further, we remain confident in our 2021 targets that we presented at our Capital Markets Day in September given improving industry trends, our integrated The Power of One® platform, the company’s new product’s and our continued focus on maximizing long term cash flow”.

“Our RLC business executed well for the quarter with sequential improvement in MW recognized, gross margin and Adjusted EBITDA. Our residential business performed well with MW recognized up 33% sequentially as we benefited from the continued improvement in demand throughout the quarter with significant demand for our new loan product in partnership with Technology Credit Union. Also, customer interest for our SunVault residential storage remains very high with current attach rates in California exceeding 20%. In new homes, we continued to expand our market leading footprint as we saw record bookings during the quarter and our backlog grew to more than 50,000 homes, another record. Finally, we continue to expect 30-50% revenue growth in both our residential and new homes businesses for fiscal year 2021.”

C&I Solutions
“Our C&I Solutions business also performed well as installs rose 30% sequentially in addition to posting positive Adjusted EBITDA for the quarter. We added to our $3.5 billion pipeline and expanded our footprint in the fast-growing community solar market as we secured 13MW of community solar projects.  Helix® storage demand remains high with our pipeline now exceeding 630 MWh and Q4 attach rates of 50%.” 

Consolidated Financials
“Solid execution in the third quarter enabled us to exceed our revenue and Adjusted EBITDA financial guidance, strengthen our cash position and further invested in our storage and services initiatives,” said Manavendra Sial, SunPower chief financial officer. “We also closed our second innovative residential lease financing facility with Bank of America during the quarter which materially lowers our cost of capital while providing funding through the middle of next year. Additionally, we are building our Powerco with the recurring revenue pipeline continuing to grow and SunStrong’s retained value above forecast at $358 million at the end of the third quarter. Related to the balance sheet, our cash increased by approximately $90 million to $325 million. Additionally, we expect total cash flow to be positive in the fourth quarter. With our current cash position and expected cash flow in the fourth quarter, we now have the ability to pay off the convert early if we so choose.”

Third quarter of fiscal year 2020 non-GAAP results exclude net adjustments that, in the aggregate, increased GAAP income by $115.9 million, including $155.4 million related to a mark-to-market gain on equity investments. This was partially offset by $33.8 for income taxes, $4.5 million related to stock-based compensation expense, and $1.2 million related to amortization of intangible assets and other non-recurring items.

Financial Outlook
The company’s fourth quarter and fiscal year 2020 guidance is as follows:

Fourth quarter GAAP revenue of $330 to $370 million, GAAP net income of $11 million to $21 million, and MW recognized in the range of 145 MW to 175 MW. 

For fiscal year 2020, the company expects GAAP revenue of $1.12 billion to $1.16 billion, compared to its previous fiscal year 2020 guidance of $1.06 billion to $1.10.  Fiscal year 2020 GAAP net income of $190 million to $200 million and MW recognized in the range of 465 MW to 515 MW.  

The company now expects fourth quarter Adjusted EBITDA to be in the range of $26 million to $36 million and fiscal year 2020 Adjusted EBITDA to be in the range of $30 million to $40 million compared to its previous fiscal year 2020 guidance of $20 million to $30 million.




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