SunPower Corp. today announced financial results for its first quarter ended March 31, 2019.
First Quarter Highlights
- Launched new portfolio of Maxeon and Performance Series (P-Series) panels in U.S. and international markets
- Agreement to monetize commercial sale-leaseback portfolio for $87 million; sold first C&I project under innovative financing partnership with Goldman Sachs Renewable Power
- SunPower Energy Services (SPES)
Commenced U.S. shipments of 415-watt residential A-Series panel
Helix storage solutions pipeline increased to 110MW with 35 percent attach rate
- SunPower Technologies (SPT)
World record 25 percent Maxeon Gen 5 solar cells in volume production; initiated tool install for second manufacturing line
Strong volume growth in international distributed generation markets
"We executed well as we met or exceeded our key financial guidance metrics for the first quarter while laying the foundation for improved profitability in the second half of the year," said Tom Werner, SunPower CEO and chairman of the board.
"Demand in our global DG business remains strong and we expanded shipments into the international power plant market. In the first quarter, we introduced exciting new products in both the upstream and downstream parts of the value chain. Upstream, we introduced a new portfolio of residential Maxeon and P-Series panels for both U.S. and international residential markets and we are already seeing significant demand for these new products in our global DG business. We also began shipment of P-Series panels from our Oregon factory and the ramp of our 25 percent efficient Maxeon Gen 5 cell technology in Fab 3 is continuing. In our downstream business we unveiled a revolutionary online, instant design platform for our North American residential market that will improve customer experience while reducing costs.
SunPower Energy Services - North American Residential and Commercial Businesses
"In the first quarter, our residential business was impacted by unusually severe weather and related installation delays in several key markets which limited MW volume. However, we offset this impact due to our prudent management of expenses, improved operational efficiency and a stable pricing environment. Customer response to the launch of our new A-Series panel, the industry's first 415-watt residential module, has been very strong and we expect to allocate all of our capacity for this product to the U.S. market at least through the end of 2019. Additionally, we continued to see further traction for our loan product as deployed MW tripled year over year. With forecasted MW growth of 15 percent, our New Homes backlog of 35,000 customers and the launch of both our Equinox storage and services platform and our instant design digital application in the second half of the year, we are confident in our ability to meet our residential installation targets in 2019.
"In Commercial, we continued to build on our market leadership position, adding both new and existing customers to our 1.3GW installed base. Interest in our Helix solar-plus-storage solution remains high as our storage pipeline now exceeds 110MW with attach rates in excess of 35 percent. We are also well positioned for significant growth in the second half of the year given our first quarter bookings, with more than 80 percent of our 2019 volume forecast now in backlog.
SunPower Technologies - Manufacturing, International DG / Power Plant panel businesses
"SunPower Technologies, which manufactures, designs and sells the world's most efficient solar cells and panels, also posted solid financial performance for the quarter, exceeding revenue and shipment forecasts. The ramp of our Maxeon Gen 5 solar cell and panel technology is continuing and we recently commenced tool installation for our second manufacturing line which will bring nameplate Maxeon Gen 5 capacity to approximately 250MW by the end of the year. Additionally, the ramp of P-Series production in Oregon is also continuing with U.S. shipments planned for up to 150MW this year. In our panel sales business, we are benefitting from our new, DG-focused international channel strategy as Europe, Japan and Australia all exceeded their revenue and shipment plans in the first quarter. Customer response in our core international DG markets to our new 400-watt Maxeon and new P-19 residential panels has been very strong, and we are currently fully allocated for both of these products in the second quarter with bookings now building for the second half of 2019. We are also executing on our robust pipeline of P-19 demand for the global power plant business, where we are fully booked for the balance of 2019. Finally, we are operating our fabs at 100 percent utilization to meet the strong demand for our products as well as the production of up to 200 MW of panels for our 2019 U.S. safe harbor program," Werner concluded.
"Solid execution enabled us to meet or exceed our key financial guidance targets for the quarter as we positioned ourselves for a strong second half of the year," said Manavendra Sial, SunPower chief financial officer. "We continued our focus on improving cash flow while further investing in our growth initiatives. We also expect to receive $87 million from closings under the previously announced sale of our commercial sale-leaseback portfolio in the second quarter, as well as finalizing certain strategic DG financing programs that we believe are more capital efficient while improving margins. We remain committed to achieving positive cash flow at the business unit level in the second half of the year while improving our profitability throughout 2019."
First quarter fiscal year 2019 non-GAAP results exclude net adjustments that, in the aggregate, improved non-GAAP earnings by $32.3 million, including $49.4 million related to cost of above-market polysilicon, $8.3 million related to impairment and sale of residential lease assets, $5.7 million related to stock-based compensation expense, $4.9 million related to legacy sale-leaseback transactions, $2.6 million related to business reorganization costs, $1.8 million related to intangibles, $1.5 million related to tax effect, $1.4 million transaction-related costs, and $0.1 million related to utility and power plant projects, partially offset by $33.0 million related to unrealized gain on equity investment, $6.1 million related to gain on business divestiture, $3.7 million related to construction revenue on solar services contracts, and $0.6 million related to restructuring expense.
The company continues to expect financial performance to improve on a quarterly basis throughout fiscal year 2019 with performance weighted towards the second half of the year.
The company's second quarter 2019 GAAP and non-GAAP guidance is as follows: on a GAAP basis, revenue of $370 million to $410 million, gross margin of 0 percent to 3 percent and net income of $0 million to $20 million. On a non-GAAP basis, the company expects revenue of $420 million to $460 million, gross margin of 7 percent to 10 percent, Adjusted EBITDA of $(5) million to $15 million and MW 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 $1.9 billion and a net loss of $120 million to $100 million. On a non-GAAP basis, revenue of $1.9 billion to $2.0 billion and operational expenses of less than $270 million. Gigawatts deployed is expected to be in the range of 1.9 GW to 2.1GW 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 $90 million to $110 million compared to previous guidance of $80 million to $110 million.