SINGAPORE, April 6, 2021 /PRNewswire/ -- Maxeon
Solar Technologies, Ltd. (NASDAQ:MAXN) ("Maxeon" or "the Company"),
a global leader in solar innovation and channels, today announced
its financial results for its fourth quarter and fiscal year ended
January 3, 2021.
Maxeon Chief Executive Officer Jeff
Waters commented, "In our first full quarter as an
independent public company we delivered financial results
consistent with our guidance while making progress on each of the
three pillars of our strategy: our differentiated global brand and
channel, our panel technology, and our focused approach to the
large-scale market. In the fourth quarter we saw strong growth in
both distributed generation and our large-scale businesses, with
sequential revenue increases of 12% and 35%, respectively. Gross
profit in Q4 was slightly higher than anticipated due primarily to
higher than planned ASPs and improved product mix."
Discussing brand and channel, Waters noted: "Leveraging our
industry-leading brand, channel, and solar panel technology, we
took the first steps in our 'Beyond the Panel' strategy by
introducing AC Modules with factory integrated micro-inverters.
These Maxeon AC modules are currently shipping into seventeen
European countries and Australia.
We expect this initiative to drive significant margin uplift in the
quarters ahead. To further drive our distributed generation effort,
we announced that Ralf Elias will
join our executive team to lead our distributed generation product
initiatives. Ralf will solidify our strategy to build incremental
revenue from integrated energy products and services on top of our
current business."
Turning to technology, Waters elaborated: "We met key objectives
on our next generation Maxeon 7 technology roadmap, achieving
meaningful progress in efficiency and product safety attributes.
These R&D successes further solidify our confidence that we can
commercialize and ramp Maxeon 7 starting in late 2022."
Regarding the Company's large-scale focus, Waters remarked: "We
are launching a strategic initiative to broaden our engagement in
the U.S. market with our Performance line. We plan to leverage our
large and growing sales pipeline and North American manufacturing
assets to drive significant incremental sales in the region beyond
our current rooftop distributed generation sales through
SunPower."
Selected Q4 and Fiscal Year Financial Summary
($
Thousands)
|
Fiscal Q4
2020
|
|
Fiscal Q3
2020
|
|
Fiscal Q4
2019
|
|
Fiscal Year
2020
|
|
Fiscal Year
2019
|
Module shipments, in
MW
|
655
|
|
|
531
|
|
|
740
|
|
|
2,145
|
|
|
2,430
|
|
Revenue
|
245,564
|
|
|
206,620
|
|
|
368,128
|
|
|
844,836
|
|
|
1,198,301
|
|
Gross profit
(loss)1
|
7,313
|
|
|
(12,302)
|
|
|
27,606
|
|
|
(9,781)
|
|
|
(2,309)
|
|
Net income (loss)
attributable to stockholders1
|
3,458
|
|
|
(67,755)
|
|
|
(32,039)
|
|
|
(142,631)
|
|
|
(183,059)
|
|
Adjusted
EBITDA1,2,3
|
26,943
|
|
|
(38,808)
|
|
|
(2,529)
|
|
|
(44,067)
|
|
|
(83,138)
|
|
Capital
investment
|
13,301
|
|
|
4,889
|
|
|
10,382
|
|
|
27,689
|
|
|
41,905
|
|
1
|
The Company's GAAP
and Non-GAAP results were impacted by the effects of certain items.
For the fourth quarter 2020 results, these items include a $44
million gain on its stock borrowing facilities, and a $21 million
loss on its long-term polysilicon contract. Refer to "Use of
Non-GAAP Financial Measures" below.
|
2
|
The Company's use of
non-GAAP financial information, including a reconciliation to U.S.
GAAP, is provided under "Use of Non-GAAP Financial Measures"
below.
|
3
|
In addition to the
reconciliation provided here, please also refer to "Reconciliation
of Non-GAAP Financial Measures" in Maxeon's Form 6-K furnished on
November 19, 2020 for the reconciliation of Adjusted EBITDA for
fiscal Q3 2020.
|
Information presented is for continuing operations only and
excludes results of lines of business retained by SunPower after
the spin-off for all periods presented.
First Quarter 2021
The solar industry faces pervasive upstream supply chain cost
challenges, which did not improve in the first quarter of
2021. The Company expects that elevated costs for glass,
solar cells, freight, and other items may persist well into the
second half of 2021. In addition, the distributed generation
business is traditionally very seasonal with the first half volumes
typically delivering only 40% of the annual total, and the first
quarter being the lowest. For the first quarter of fiscal year
2021, the Company anticipates the following results:
- Module shipments of approximately 375 MW.
- Revenue of approximately $160
million.
- Gross profit in a range of a loss of $5
million to a loss of $15
million. This includes out-of-market polysilicon cost of
approximately $15 million.
- Operating expense of approximately $38
million.
- Capital expenditures for the first quarter will be around
$10 million, directed mainly to
upgrading Maxeon's manufacturing facilities. For fiscal year 2021,
previously planned capital expenditures of $90 million are expected to be increased by
another $80 million for the
U.S.-focused Performance line initiative, subject to obtaining
financing.
CEO Waters summarized: "Against a backdrop of strong and growing
global distributed generation market demand, we are excited about
the opportunity to expand and extend our leading go-to-market
channel platform. In our large-scale business, we believe that the
upstream supply chain disruptions will ease, although the exact
timing is difficult to predict. We are well positioned to begin
converting our 38 gigawatt global sales pipeline into orders as
this occurs. Finally, we are excited by the prospect of becoming
even more broadly engaged in the U.S. market with our Performance
line."
The Company's business outlook is based on management's current
views and estimates with respect to market conditions, production
capacity, the uncertainty of the continuing impact of the COVID-19
pandemic, and the global economic environment. Please refer to the
Forward-Looking Statements section below. Management's views and
estimates are subject to change without notice.
For More Information
Maxeon's fiscal year 2020 financial results and management
commentary can be found on Form 20-F by accessing the Financials
& Filings page of the Investor Relations section of Maxeon's
website at https://www.maxeon.com/investor-relations. The Form 20-F
and Company's other filings are also available online from the
Securities and Exchange Commission at www.sec.gov.
Conference Call Details
The Company will also hold a conference call on April 6,
2021, at 6:00 PM U.S. EDT /
April 7, 2021, at 6:00 AM Singapore Time, to discuss results and
provide an update on the business. Conference call details are
below.
Dial-in:
North America (toll-free): +1
(833) 301-1154
International: +1 (914) 987-7395
Conference ID: 7896717
A simultaneous webcast of the conference call will also be
available on Maxeon's website at
https://www.maxeon.com/events-and-presentations.
Listeners should dial in or log on approximately 10 minutes in
advance. A replay will be available online within 24 hours after
the event.
A replay of the conference call is also available by phone at
the following numbers until April 13,
2021. To access the replay, please reference the following
numbers:
North America (toll-free): +1
(855) 859-2056 or +1 (800) 585-8367
International: +1 (404) 537-3406
Conference ID: 7896717
About Maxeon Solar Technologies
Maxeon Solar Technologies, Ltd. (NASDAQ:MAXN) is Powering
Positive ChangeTM. Headquartered in Singapore, Maxeon designs, manufactures and
sells SunPower® brand solar panels in more than 100 countries,
operating the SunPower brand worldwide except the United States and Canada. The Company is a leader in solar
innovation with access to over 900 patents and two best-in-class
solar panel product lines. With operations in Africa, Asia,
Oceania, Europe and Mexico, Maxeon's products span the global
rooftop and solar power plant markets through a network of more
than 1,100 trusted partners and distributors. A pioneer in
sustainable solar manufacturing, Maxeon leverages a 35-year history
in the solar industry and numerous awards for its technology. For
more information about how Maxeon is Powering Positive
ChangeTM visit us at https://www.maxeon.com/, on
LinkedIn and on Twitter.
Forward-Looking Statements
This press release contains forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of
1995, including, but not limited to, statements regarding: (a) our
expectations regarding pricing trends, demand and growth
projections; (b) potential disruptions to our operations and supply
chain that may result from epidemics or natural disasters,
including the duration, scope and impact on the demand for our
products and the pace of recovery from the COVID-19 pandemic; (c)
anticipated product launch timing and our expectations regarding
ramp, customer acceptance and demand, upsell and expansion
opportunities; (d) our expectations and plans for short- and
long-term strategy, including our anticipated areas of focus and
investment, market expansion, product and technology focus, and
projected growth and profitability; (e) our liquidity, substantial
indebtedness, and ability to obtain additional financing; (f) our
upstream technology outlook, including anticipated fab utilization
and expected ramp and production timelines for the Company's Maxeon
5 and 6, next-generation Maxeon 7 and Performance line solar
panels, expected cost reductions, and future performance; (g) our
strategic goals and plans, including partnership discussions with
respect to the Company's next generation technology, and our
relationships with existing customers, suppliers and partners, and
our ability to achieve and maintain them; (h) our
expectations regarding our future performance based on bookings,
backlog, and pipelines in our sales channels; (i) our first quarter
fiscal 2021 guidance, including GAAP revenue, gross profit, and MW
deployed, and related assumptions; (j) expected demand recovery and
market traction for Maxeon as a result of anticipated product
launches; (k) our expectations regarding the potential outcome, or
financial or other impact on our business, as a result of the
Spin-off from SunPower Corporation; (l) our projected effective tax
rate and changes to the valuation allowance related to our deferred
tax assets. The forward-looking statements can be also identified
by terminology such as "may," "might," "could," "will," "aims,"
"expects," "anticipates," "future," "intends," "plans," "believes,"
"estimates" and similar statements.
These forward-looking statements are based on our current
assumptions, expectations and beliefs and involve substantial risks
and uncertainties that may cause results, performance or
achievement to materially differ from those expressed or implied by
these forward-looking statements. These statements are not
guarantees of future performance and are subject to a number of
risks. The reader should not place undue reliance on these
forward-looking statements, as there can be no assurances that the
plans, initiatives or expectations upon which they are based will
occur. Factors that could cause or contribute to such differences
include, but are not limited to: (1) challenges in executing
transactions key to our strategic plans, including regulatory and
other challenges that may arise; (2) potential disruptions to our
operations and supply chain that may result from damage or
destruction of facilities operated by our suppliers, epidemics or
natural disasters, including impacts of the COVID-19 pandemic; (3)
the success of our ongoing research and development efforts and our
ability to commercialize new products and services, including
products and services developed through strategic partnerships; (4)
competition in the solar and general energy industry and downward
pressure on selling prices and wholesale energy pricing; (5) our
liquidity, substantial indebtedness, and ability to obtain
additional financing for our projects and customers; (6) changes in
public policy, including the imposition and applicability of
tariffs; (7) regulatory changes and the availability of economic
incentives promoting use of solar energy; (8) fluctuations in our
operating results; (9) appropriately sizing our manufacturing
capacity and containing manufacturing and logistics difficulties
that could arise; (10) unanticipated impact to customer demand and
sales schedules due to, among other factors, the spread of COVID-19
and other environmental disasters; (11) challenges in managing our
acquisitions, joint ventures and partnerships, including our
ability to successfully manage acquired assets and supplier
relationships; and (12) unpredictable outcomes resulting from our
litigation activities. A detailed discussion of these factors and
other risks that affect our business is included in filings we make
with the Securities and Exchange Commission ("SEC") from time to
time, including our most recent report on Form 20-F, particularly
under the heading "Risk Factors". Copies of these filings are
available online from the SEC at www.sec.gov, or on the SEC Filings
section of our Investor Relations website at
https://www.maxeon.com/investor-relations. All forward-looking
statements in this press release are based on information currently
available to us, and we assume no obligation to update these
forward-looking statements considering new information or future
events.
MAXEON SOLAR
TECHNOLOGIES, LTD.
CONSOLIDATED AND COMBINED BALANCE SHEETS
(unaudited)
(In thousands, except for shares data)
|
|
|
|
As
of
|
|
|
January 3,
2021
|
|
December 29,
2019
|
Assets
|
|
|
|
|
Current
assets
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
206,744
|
|
|
$
|
120,956
|
|
Restricted short-term
marketable securities
|
|
1,359
|
|
|
6,187
|
|
Accounts receivable,
net
|
|
76,702
|
|
|
150,365
|
|
Inventories
|
|
169,240
|
|
|
194,852
|
|
Advances to supplier,
current portion
|
|
43,680
|
|
|
107,388
|
|
Prepaid expenses and
other current assets
|
|
49,470
|
|
|
38,369
|
|
Total current
assets
|
|
$
|
547,195
|
|
|
$
|
618,117
|
|
Property, plant and
equipment, net
|
|
246,908
|
|
|
281,200
|
|
Operating lease right
of use assets
|
|
13,482
|
|
|
18,759
|
|
Intangible assets,
net
|
|
456
|
|
|
5,092
|
|
Advances to supplier,
net of current portion
|
|
49,228
|
|
|
13,993
|
|
Other long-term
assets
|
|
123,074
|
|
|
53,050
|
|
Total
assets
|
|
$
|
980,343
|
|
|
$
|
990,211
|
|
Liabilities and
Equity
|
|
|
|
|
Current
liabilities
|
|
|
|
|
Accounts
payable
|
|
$
|
159,184
|
|
|
$
|
286,464
|
|
Accrued
liabilities
|
|
77,307
|
|
|
92,570
|
|
Contract liabilities,
current portion
|
|
20,756
|
|
|
78,939
|
|
Short-term
debt
|
|
48,421
|
|
|
60,383
|
|
Operating lease
liabilities, current portion
|
|
2,464
|
|
|
2,365
|
|
Total current
liabilities
|
|
$
|
308,132
|
|
|
$
|
520,721
|
|
Long-term
debt
|
|
962
|
|
|
1,487
|
|
Contract liabilities,
net of current portion
|
|
33,075
|
|
|
35,616
|
|
Operating lease
liabilities, net of current portion
|
|
12,064
|
|
|
18,338
|
|
Convertible
debt
|
|
135,071
|
|
|
—
|
|
Other long-term
liabilities
|
|
51,752
|
|
|
46,526
|
|
Total
liabilities
|
|
$
|
541,056
|
|
|
$
|
622,688
|
|
Commitments and
contingencies
|
|
|
|
|
Equity
|
|
|
|
|
Common stock, no par
value (33,995,116 issued and outstanding at
January 3, 2021)
|
|
$
|
—
|
|
|
$
|
—
|
|
Net parent
investment
|
|
—
|
|
|
369,837
|
|
Additional paid-in
capital
|
|
451,474
|
|
|
—
|
|
Accumulated
deficit
|
|
(8,441)
|
|
|
—
|
|
Accumulated other
comprehensive loss
|
|
(10,391)
|
|
|
(7,618)
|
|
Equity attributable
to the Company
|
|
432,642
|
|
|
362,219
|
|
Noncontrolling
interests
|
|
6,645
|
|
|
5,304
|
|
Total
equity
|
|
$
|
439,287
|
|
|
$
|
367,523
|
|
Total liabilities
and equity
|
|
$
|
980,343
|
|
|
$
|
990,211
|
|
MAXEON SOLAR
TECHNOLOGIES, LTD.
CONSOLIDATED AND COMBINED STATEMENTS OF OPERATIONS
(unaudited)
(In thousands, except per share data)
|
|
|
Three Months
Ended
|
|
Fiscal Year
Ended
|
|
January 3,
2021
|
|
December 29,
2019
|
|
January 3,
2021
|
|
December 29,
2019
|
Revenue
|
$
|
245,564
|
|
|
$
|
368,128
|
|
|
$
|
844,836
|
|
|
$
|
1,198,301
|
|
Cost of
revenue
|
238,251
|
|
|
340,522
|
|
|
854,617
|
|
|
1,200,610
|
|
Gross profit
(loss)
|
7,313
|
|
|
27,606
|
|
|
(9,781)
|
|
|
(2,309)
|
|
Operating
expenses
|
|
|
|
|
|
|
|
Research and
development
|
8,763
|
|
|
11,584
|
|
|
34,194
|
|
|
36,997
|
|
Sales, general and
administrative
|
24,051
|
|
|
26,824
|
|
|
86,202
|
|
|
96,857
|
|
Restructuring
(benefits) charges
|
(9)
|
|
|
41
|
|
|
—
|
|
|
(517)
|
|
Total operating
expenses
|
32,805
|
|
|
38,449
|
|
|
120,396
|
|
|
133,337
|
|
Operating
loss
|
(25,492)
|
|
|
(10,843)
|
|
|
(130,177)
|
|
|
(135,646)
|
|
Other income
(expense), net
|
|
|
|
|
|
|
|
Interest
expense
|
(8,127)
|
|
|
(6,782)
|
|
|
(31,859)
|
|
|
(25,831)
|
|
Other, net
|
44,443
|
|
|
(6,291)
|
|
|
36,349
|
|
|
(1,961)
|
|
Other income
(expense), net
|
36,316
|
|
|
(13,073)
|
|
|
4,490
|
|
|
(27,792)
|
|
Income (loss) before
income taxes and equity in losses of unconsolidated
investees
|
10,824
|
|
|
(23,916)
|
|
|
(125,687)
|
|
|
(163,438)
|
|
Provision for income
taxes
|
(4,737)
|
|
|
(2,954)
|
|
|
(12,127)
|
|
|
(10,122)
|
|
Equity in losses of
unconsolidated investees
|
(2,612)
|
|
|
(4,001)
|
|
|
(3,198)
|
|
|
(5,342)
|
|
Net income
(loss)
|
$
|
3,475
|
|
|
$
|
(30,871)
|
|
|
$
|
(141,012)
|
|
|
$
|
(178,902)
|
|
Net income
attributable to noncontrolling interests
|
(17)
|
|
|
(1,168)
|
|
|
(1,619)
|
|
|
(4,157)
|
|
Net income (loss)
attributable to stockholders
|
$
|
3,458
|
|
|
$
|
(32,039)
|
|
|
$
|
(142,631)
|
|
|
$
|
(183,059)
|
|
|
|
|
|
|
|
|
|
Net income (loss) per
share attributable to stockholders:
|
|
|
|
|
|
|
|
Basic
|
$
|
0.11
|
|
|
$
|
(1.51)
|
|
|
$
|
(5.82)
|
|
|
$
|
(8.61)
|
|
Diluted
|
$
|
0.11
|
|
|
$
|
(1.51)
|
|
|
$
|
(5.82)
|
|
|
$
|
(8.61)
|
|
|
|
|
|
|
|
|
|
Weighted average
shares used to compute net income (loss) per share:
|
|
|
|
|
|
|
|
Basic
|
30,267
|
|
|
21,265
|
|
|
24,502
|
|
|
21,265
|
|
Diluted
|
30,963
|
|
|
21,265
|
|
|
24,502
|
|
|
21,265
|
|
|
|
|
|
|
|
|
|
MAXEON SOLAR
TECHNOLOGIES, LTD.
CONSOLIDATED AND COMBINED STATEMENTS OF CASH FLOWS
(unaudited)
(In thousands)
|
|
|
Fiscal Year
Ended
|
|
January 3,
2021
|
|
December 29,
2019
|
Cash flows from
operating activities
|
|
|
|
Net loss
|
$
|
(141,012)
|
|
|
$
|
(178,902)
|
|
Adjustments to
reconcile net loss to net cash used in operating
activities
|
|
|
|
Depreciation and
amortization
|
47,328
|
|
|
53,448
|
|
Stock-based
compensation
|
7,250
|
|
|
7,135
|
|
Non-cash interest
expense
|
19,851
|
|
|
23,841
|
|
Equity in losses of
unconsolidated investees
|
3,198
|
|
|
5,342
|
|
Gain on retirement of
property, plant and equipment
|
(641)
|
|
|
—
|
|
Deferred income
taxes
|
(1,330)
|
|
|
804
|
|
Gain on equity
investments
|
(1,822)
|
|
|
—
|
|
Remeasurement gain on
physical delivery forward and prepaid forward
|
(38,236)
|
|
|
—
|
|
Other, net
|
3,078
|
|
|
249
|
|
Changes in operating
assets and liabilities
|
|
|
|
Accounts
receivable
|
71,231
|
|
|
(77,830)
|
|
Contract
assets
|
(1,806)
|
|
|
264
|
|
Inventories
|
25,212
|
|
|
28,415
|
|
Prepaid expenses and
other assets
|
(5,590)
|
|
|
960
|
|
Operating lease
right-of-use assets
|
2,264
|
|
|
2,449
|
|
Advances to
suppliers
|
28,473
|
|
|
50,163
|
|
Accounts payable and
other accrued liabilities
|
(143,462)
|
|
|
53,451
|
|
Contract
liabilities
|
(61,344)
|
|
|
6,460
|
|
Operating lease
liabilities
|
(1,804)
|
|
|
(2,589)
|
|
Net cash used in
operating activities
|
$
|
(189,162)
|
|
|
$
|
(26,340)
|
|
Cash flows from
investing activities
|
|
|
|
Purchases of property,
plant and equipment
|
(27,689)
|
|
|
(41,905)
|
|
Proceeds from disposal
of short-term investments
|
6,572
|
|
|
—
|
|
Purchase of short-term
investments
|
(1,340)
|
|
|
—
|
|
Proceeds from sale of
assets
|
1,283
|
|
|
265
|
|
Purchases of
intangibles
|
—
|
|
|
(231)
|
|
Installment payment
for acquisition of subsidiary
|
(30,000)
|
|
|
—
|
|
Proceeds from sale of
unconsolidated investee
|
3,220
|
|
|
—
|
|
Proceeds from
dividends and partial return of capital by an unconsolidated
investee
|
2,462
|
|
|
—
|
|
Net cash used in
investing activities
|
$
|
(45,492)
|
|
|
$
|
(41,871)
|
|
Cash flows from
financing activities
|
|
|
|
Proceeds from
debt
|
236,446
|
|
|
253,314
|
|
Repayment of
debt
|
(226,664)
|
|
|
(254,649)
|
|
Net proceeds from
issuance of convertible debt
|
190,330
|
|
|
—
|
|
Net proceeds from
issuance of common stock
|
296,765
|
|
|
—
|
|
Payment for realized
amount on underwriting physical delivery forward
|
(1,606)
|
|
|
—
|
|
Payment for prepaid
forward
|
(40,000)
|
|
|
—
|
|
Distribution to
noncontrolling interest
|
(278)
|
|
|
—
|
|
Repayment of finance
lease obligations & other debt
|
(651)
|
|
|
(1,190)
|
|
Net parent
(distribution) contribution
|
(133,996)
|
|
|
92,409
|
|
Net cash provided by
financing activities
|
$
|
320,346
|
|
|
$
|
89,884
|
|
Effect of exchange
rate changes on cash, cash equivalents, restricted cash and
restricted cash equivalents
|
77
|
|
|
381
|
|
Net increase in cash,
cash equivalents, restricted cash and restricted cash
equivalents
|
85,769
|
|
|
22,054
|
|
Cash, cash
equivalents, restricted cash and restricted cash equivalents,
beginning of period
|
123,803
|
|
|
101,749
|
|
Cash, cash
equivalents, restricted cash and restricted cash equivalents, end
of period
|
$
|
209,572
|
|
|
$
|
123,803
|
|
Non-cash
transactions
|
|
|
|
Property, plant and
equipment purchases funded by liabilities
|
$
|
27,736
|
|
|
$
|
13,377
|
|
Right-of-use assets
obtained in exchange for lease obligations1
|
$
|
4,791
|
|
|
$
|
21,209
|
|
Interest expense
financed by SunPower
|
$
|
11,333
|
|
|
$
|
17,000
|
|
Aged supplier
financing balances reclassified from accounts payable to short-term
debt
|
$
|
23,933
|
|
|
$
|
45,352
|
|
The following table reconciles our cash and cash equivalents and
restricted cash and restricted cash equivalents reported on our
Consolidated and Combined Balance Sheets and the cash, cash
equivalents, restricted cash and restricted cash equivalents
reported on our Consolidated and Combined Statements of Cash Flows
for fiscal years 2020 and 2019:
|
As
of
|
(In
thousands)
|
January 3,
2021
|
|
December 29,
2019
|
Cash and cash
equivalents
|
$
|
206,744
|
|
|
$
|
120,956
|
|
Restricted cash and
restricted cash equivalents, current portion, included in prepaid
expenses and other current assets
|
2,483
|
|
|
2,845
|
|
Restricted cash and
restricted cash equivalents, net of current portion, included in
other long-term assets
|
345
|
|
|
2
|
|
Total cash, cash
equivalents, restricted cash and restricted cash equivalents shown
in statement of cash flows
|
$
|
209,572
|
|
|
$
|
123,803
|
|
1
|
Amounts for fiscal
year 2019 include the transition adjustment for the adoption of ASC
842 and new Right-of-Use ("ROU") asset additions.
|
Use of Non-GAAP Financial Measures
We present earnings before interest, taxes, depreciation and
amortization ("EBITDA") and EBITDA adjusted for specified
additional items identified below ("Adjusted EBITDA"), which are
non-GAAP measures to supplement our consolidated and combined
financial results presented in accordance with GAAP. We believe
that EBITDA and Adjusted EBITDA are useful to investors, enabling
them to better assess changes in our results of operations across
different reporting periods on a consistent basis, independent of
certain items as presented above. Thus, EBITDA and Adjusted EBITDA
provide investors with additional methods to assess our operating
results in a manner that is focused on our ongoing, core operating
performance, absent the effects of these items. We also use EBITDA
and Adjusted EBITDA internally to assess our business, financial
performance and current and historical results, as well as for
strategic decision-making and forecasting future results. Given our
use of EBITDA and Adjusted EBITDA, we believe that these measures
may be important to investors in understanding our operating
results as seen through the eyes of management. EBITDA and Adjusted
EBITDA are not prepared in accordance with GAAP or intended to be a
replacement for GAAP financial data, should be reviewed together
with GAAP measures and may be different from non-GAAP measures used
by other companies.
We adjust our EBITDA for the following items in arriving to the
Adjusted EBITDA:
- Stock-based compensation expense. Stock-based
compensation relates primarily to equity incentive awards.
Stock-based compensation is a non-cash expense that is dependent on
market forces that are difficult to predict. Management believes
that this adjustment for stock-based compensation expense provides
investors with a basis to measure our core performance, including
the ability to compare our performance with the performance of
other companies, without the period-to-period variability created
by stock-based compensation.
- Restructuring charges (benefits). We incurred
restructuring expenses related to reorganization plans implemented
by our former parent, SunPower, aimed towards realigning resources
consistent with SunPower's global strategy and improving its
overall operating efficiency and cost structure. Restructuring
charges are excluded from Adjusted EBITDA financial measures
because they are not considered core operating activities and such
costs have historically occurred infrequently. Although we have
engaged in restructuring activities in the past, past activities
have been discrete events based on unique sets of business
objectives. As such, management believes that it is appropriate to
exclude restructuring charges from our Adjusted EBITDA financial
measures as they are not reflective of ongoing operating results
nor do these charges contribute to a meaningful evaluation of our
past operating performance.
Reconciliation of
Non-GAAP Financial Measures
|
|
|
Three Months
Ended
|
|
Fiscal Year
Ended
|
(In
thousands)
|
January 3,
2021
|
|
September 27,
2020
|
|
December 29,
2019
|
|
January 3,
2021
|
|
December 29,
2019
|
Selected GAAP
Financial Data
|
|
|
|
|
|
|
|
|
Revenue
|
$
|
245,564
|
|
|
$
|
206,620
|
|
|
$
|
368,128
|
|
|
$
|
844,836
|
|
|
$
|
1,198,301
|
|
Cost of
revenue1
|
(238,251)
|
|
|
(218,922)
|
|
|
(340,522)
|
|
|
(854,617)
|
|
|
(1,200,610)
|
|
Gross profit
(loss)1
|
7,313
|
|
|
(12,302)
|
|
|
27,606
|
|
|
(9,781)
|
|
|
(2,309)
|
|
Operating
loss1
|
(25,492)
|
|
|
(39,163)
|
|
|
(10,843)
|
|
|
(130,177)
|
|
|
(135,646)
|
|
Provision for income
taxes
|
(4,737)
|
|
|
(5,043)
|
|
|
(2,954)
|
|
|
(12,127)
|
|
|
(10,122)
|
|
GAAP net income
(loss)1
|
3,475
|
|
|
(67,208)
|
|
|
(30,871)
|
|
|
(141,012)
|
|
|
(178,902)
|
|
GAAP net income
(loss) attributable to stockholders1
|
$
|
3,458
|
|
|
$
|
(67,755)
|
|
|
$
|
(32,039)
|
|
|
$
|
(142,631)
|
|
|
$
|
(183,059)
|
|
|
|
|
|
|
|
|
|
|
Selected Non-GAAP
Financial Data
|
|
|
|
|
|
|
|
|
GAAP net income
(loss) attributable to stockholders1
|
$
|
3,458
|
|
|
$
|
(67,755)
|
|
|
$
|
(32,039)
|
|
|
$
|
(142,631)
|
|
|
$
|
(183,059)
|
|
Interest
expense
|
8,127
|
|
|
11,509
|
|
|
6,782
|
|
|
31,859
|
|
|
25,831
|
|
Provision for income
taxes
|
4,737
|
|
|
5,043
|
|
|
2,954
|
|
|
12,127
|
|
|
10,122
|
|
Depreciation
|
9,068
|
|
|
9,182
|
|
|
11,939
|
|
|
42,332
|
|
|
46,007
|
|
Amortization
|
39
|
|
|
1,290
|
|
|
1,805
|
|
|
4,996
|
|
|
7,290
|
|
EBITDA1
|
$
|
25,429
|
|
|
$
|
(40,731)
|
|
|
$
|
(8,559)
|
|
|
$
|
(51,317)
|
|
|
$
|
(93,809)
|
|
|
|
|
|
|
|
|
|
|
|
Additional
adjustments
|
|
|
|
|
|
|
|
|
|
Impairment
|
—
|
|
|
—
|
|
|
4,053
|
|
|
—
|
|
|
4,053
|
|
Stock-based
compensation
|
1,514
|
|
|
1,923
|
|
|
1,889
|
|
|
7,250
|
|
|
7,135
|
|
Restructuring charges
(benefits)
|
—
|
|
|
—
|
|
|
88
|
|
|
—
|
|
|
(517)
|
|
Adjusted
EBITDA1
|
$
|
26,943
|
|
|
$
|
(38,808)
|
|
|
$
|
(2,529)
|
|
|
$
|
(44,067)
|
|
|
$
|
(83,138)
|
|
1
|
The Company's GAAP
and Non-GAAP results were impacted by the effects of certain items.
Refer to supplementary information in the table below.
|
Supplementary
information affecting GAAP and Non-GAAP results
|
|
|
|
Three Months
Ended
|
|
Fiscal Year
Ended
|
|
Financial
statements
item
affected
|
January 3,
2021
|
|
September 27,
2020
|
|
December 29,
2019
|
|
January 3,
2021
|
|
December 29,
2019
|
Incremental cost of
above market polysilicon1
|
Cost of
revenue
|
18,202
|
|
|
38,138
|
|
|
20,682
|
|
|
77,950
|
|
|
88,658
|
|
Loss on ancillary
sales of excess polysilicon2
|
Cost of
revenue
|
2,544
|
|
|
1,993
|
|
|
14,322
|
|
|
8,517
|
|
|
56,479
|
|
Remeasurement (gain)
loss of physical delivery forward and prepaid
forward3
|
Other, net
|
(43,969)
|
|
|
5,734
|
|
|
—
|
|
|
(38,236)
|
|
|
—
|
|
Accommodation fee
associated with the long-term polysilicon supply
contract4
|
Other, net
|
—
|
|
|
5,900
|
|
|
—
|
|
|
5,900
|
|
|
—
|
|
1
|
Relates to the
difference between our contractual cost for the polysilicon under
the long-term fixed supply agreements with supplier and the price
of polysilicon available in the market as derived from publicly
available information at the time, multiplied by the volume of
polysilicon we have consumed.
|
2
|
In order to reduce
inventory and improve working capital, we have periodically elected
to sell polysilicon inventory procured under the long-term fixed
supply agreements in the market at prices below our purchase price,
thereby incurring a loss.
|
3
|
Relates to the
mark-to-market fair value remeasurement of privately negotiated
prepaid forward and physical delivery forward transactions. For the
three months ended January 3, 2021, the gain for the prepaid
forward and physical delivery forward was $31.6 million and $12.4
million (three months ended September 27, 2020: loss of $1.8
million and $3.9 million) respectively. For fiscal year 2020, the
gain for the prepaid forward and physical delivery forward was
$29.7 million and $8.5 million. The transactions were entered in
connection with the issuance of the $200.0 million aggregate
principal amount 6.50% Green Convertible Senior Notes due 2025. The
prepaid forward is remeasured to fair value at the end of each
reporting period, with changes in fair value booked in earnings.
The fair value of the prepaid forward is affected by the Company's
share price and other factors impacting the valuation model. The
physical delivery forward was remeasured to fair value at the end
of the Note Valuation Period on September 29, 2020, and was
reclassified to equity after remeasurement, and will not be
subsequently remeasured. The fair value of the physical delivery
forward was affected by the Company's share price and other factors
impacting the valuation model.
|
4
|
Relates to long-term
fixed supply agreements with a polysilicon supplier which is
structured as "take or pay" contract, that specify future
quantities and pricing of products to be supplied. We negotiated an
extension of our long-term fixed supply agreements with the
supplier which resulted in a one-time accommodation fees recognized
during fiscal year 2020.
|
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SOURCE Maxeon Solar Technologies, Ltd.