SunPower Corp. today announced financial results for its second quarter ended June 30, 2019.
Second Quarter Highlights
- Continued strength in distributed generation (DG), expanded international power plant footprint
- Partnered with Bank of America Merrill Lynch and Hannon Armstrong on residential lease funding structure to lower capital costs and improve economics
- SunPower Energy Services (SPES)
● Commenced U.S. shipments of 415-watt residential Maxeon 5, A-Series panel
● Commercial and industrial (C&I) Helix storage solutions pipeline increased to 135MW with about 30 percent attach rate
- SunPower Technologies (SPT)
● Record quarterly shipment volume into international DG markets
● Expected production on second Maxeon 5 manufacturing line in third quarter with 250-MW nameplate capacity by end of 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.
"In the second quarter, we continued to see the benefits of our corporate transformation as we met or exceeded our financial guidance metrics while positioning the company for significant profitability improvement in the second half of the year," said Tom Werner, SunPower CEO and chairman of the board.
SunPower Energy Services (SPES) - North American Residential and Commercial Businesses
"We executed well in our North American residential business, with demand strength driving sequential deployment growth of more than 30 percent. Customer and dealer response to the launch of our new 415w, Maxeon 5, A-Series residential panel last quarter has been very favorable and we expect this to continue in the second half of the year. We expanded our new homes leadership position with backlog now in excess of 38,000 homes, and our loan offering continues to gain traction, accounting for 30 percent of our residential revenue in the second quarter. We continue to lead in the development of financial products, recently closing an innovative residential lease fund with Bank of America Merrill Lynch that will improve economics and help us meet our lease funding needs into 2020. Finally, we remain on plan to launch our Equinox residential storage and services platform later this year.
"In Commercial, we expanded our market leadership position during the quarter, with deployments up more than 50 percent compared to the first quarter. We added significantly to our backlog and are now 75 percent booked for the balance of the year with a pipeline that remains in excess of $3 billion. Specifically, interest in our Helix solar-plus-storage solution remains high as our storage pipeline now exceeds 135MW with attach rates of approximately 30 percent. We also successfully executed on our customer commitments for the quarter including the recent commissioning of our largest solar, storage and services project, a multi-site enterprise solution for Whole Foods.
SunPower Technologies (SPT) - Manufacturing, International DG / Power Plant Panel Businesses
"We were pleased with SPT's performance, exceeding our volume targets while continuing to execute on our technology and cost roadmaps. Demand in the global DG market remains strong, especially in Europe, where customer response to our recently launched residential products remains very favorable. We expect to remain on allocation in this market for the balance of the year. In power plants, we met our panel delivery schedules, added to our backlog and remain fully booked for the second half of the year. Operationally, the ramp of our industry leading Maxeon 5 cell and panel technology continues and we expect to start production on a second Maxeon 5 manufacturing line this quarter. Finally, we are seeing strong traction for our Performance Series product with increasing volume from both our Oregon and DZS factories," Werner concluded.
"Given our solid performance in the second quarter as well as continued positive industry trends, we are well positioned to meet our second half financial and operational targets," said Manavendra Sial, SunPower chief financial officer. "We also prudently managed our expenses while further investing in our growth initiatives. Additionally, we expanded our leadership in project finance, signing agreements to improve our residential lease economics, as well as reducing our working capital requirements in our commercial business. We remain committed to achieving positive cash flow at the business unit level in the second half of the year while continuing to improve our profitability throughout 2019."
Second quarter fiscal year 2019 non-GAAP results exclude net adjustments that, in the aggregate, decreased non-GAAP earnings by $152.6 million, including $26.0 million related to the cost of above-market polysilicon, $15.6 million related to impairment and sale of residential lease assets, $6.3 million related to stock-based compensation expense, $4.2 million related to business reorganization costs, $2.5 million restructuring charge, $1.8 million related to intangibles, $1.2 million transaction-related costs, $1.0 million related to legacy sale-leaseback transactions, and $0.9 million related to utility and power plant projects, partially offset by $137.3 million related to gain on business divestiture, $67.5 million related to unrealized gain on equity investment, $6.4 million related to construction revenue on solar services contracts, and $0.7 million related to tax effect.
The company continues to expect financial performance to improve on a quarterly basis throughout fiscal year 2019.
The company's third quarter 2019 GAAP and non-GAAP guidance is as follows: on a GAAP basis, revenue of $430 million to $470 million, gross margin of 8 percent to 12 percent and net loss of $55 million to $35 million. On a non-GAAP basis, the company expects revenue of $450 million to $490 million, gross margin of 14 percent to 17 percent, Adjusted EBITDA of $30 million to $50 million andMW deployed in the range of 550MW to 600MW.
The company's fiscal year 2019 GAAP and non-GAAP guidance is as follows: on a GAAP basis, revenue of $1.8 billion to $2.0 billion and a net loss of $20 million to $0 million. On a non-GAAP basis, revenue of $1.9 billion to $2.1 billion and operational expenses of less than $270 million. Gigawatts deployed is expected to be in the range of 2.05GW to 2.25GW in addition to the company's safe harbor program and capital expenditures of approximately $65 million.
The company is also raising its fiscal year 2019 Adjusted EBITDA guidance to the range of $100 million to $120 million compared to previous guidance of $90 million to $110 million.