--$228 Million
Revenue, $2.7 Million Gross
Income--
--SunPower Dispute Settled--
SINGAPORE, Nov. 15,
2023 /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
the third quarter ended October 1, 2023.
Maxeon's Chief Executive Officer Bill
Mulligan noted, "Maxeon's Chief Executive Officer
Bill Mulligan commented, "As
indicated in our preliminary results announcement of our third
quarter financials, the third quarter was significantly impacted by
the absence of shipments to SunPower for a majority of the quarter
as well as by the industry-wide supply and demand imbalance in
Europe. Maxeon has responded by taking decisive action to
adjust its market focus and manufacturing footprint to reposition
Maxeon for success."
Continued Mulligan, "We are increasingly focused on the
favorable landscape for our US utility-scale products. In early
October, we announced our plan to build a TOPCon pilot line in our
Malaysian Fab 3. We believe that this will accelerate and de-risk
the ramp of our planned solar cell manufacturing facility in
New Mexico, which we have decided
to expand from 3.0 to 3.5 GW of capacity. Engineering and
pre-construction work are on track, and we have hired several key
leadership positions, including human resources, facilities, and a
site General Manager. Negotiations on offtake contracts are
progressing per plan, and we are closely engaged with the
Department of Energy Loan Program Office to complete the loan
process. We expect to announce material updates on both the product
offtake and financing fronts by our fourth quarter 2023 earnings
call."
"In DG, our business was negatively impacted by SunPower falling
behind on payments, which caused Maxeon to suspend shipments to
them starting in July. I am pleased to announce that we have
reached a settlement with SunPower that has allowed us to resume
shipments, while mutually releasing all outstanding claims. The
settlement calls for SunPower to purchase 85 MW of IBC panels at
contracted pricing through February
2024 and to post a $30 million
payment security bond. Under the settlement terms, both existing
supply agreements with SunPower will be terminated. The settlement
also contemplates Maxeon receiving a warrant to purchase 1.7
million shares of SunPower's common stock, resolves outstanding
claims and contract breaches, and ends constraints on Maxeon
product sales to SunPower installers at the end of this quarter,
clearing the way for Maxeon to aggressively ramp sales into the US
market by leveraging its acquisition of Solaria Corporation and
accelerated ramp plans for Maxeon 7 capacity."
"We expect 2024 to be a pivotal year for Maxeon. Our US
utility-scale business is expected to contribute material margins
for the first time since we entered the market in 2022, and we plan
to break ground on our transformational New Mexico Facility.
Efforts to restructure and rejuvenate the DG business are in full
gear, and we project to exit the year with a portfolio of our
latest-generation products, gross margins into the teens and
decreased customer concentration."
Selected Q3 Unaudited Financial Summary
(In thousands,
except shipments)
|
Fiscal Q3
2023
|
|
Fiscal Q2
2023
|
|
Fiscal Q3
2022
|
Shipments, in
MW
|
628
|
|
807
|
|
605
|
Revenue
|
$
227,630
|
|
$
348,373
|
|
$
275,449
|
Gross profit
(loss)(1)
|
2,728
|
|
56,223
|
|
(15,747)
|
GAAP Operating
expenses
|
66,562
|
|
47,830
|
|
41,196
|
GAAP Net loss
attributable to the stockholders(1)
|
(108,257)
|
|
(1,509)
|
|
(44,691)
|
Capital
expenditures
|
15,127
|
|
24,169
|
|
16,110
|
|
Other Financial
Data(1), (2)
|
(In
thousands)
|
Fiscal Q3
2023
|
|
Fiscal Q2
2023
|
|
Fiscal Q3
2022
|
Non-GAAP Gross profit
(loss)
|
$
2,728
|
|
$
56,748
|
|
$
(15,492)
|
Non-GAAP Operating
expenses
|
37,535
|
|
40,883
|
|
34,651
|
Adjusted
EBITDA
|
(19,923)
|
|
30,240
|
|
(34,501)
|
|
|
(1)
|
The Company's GAAP and
Non-GAAP results were impacted by the effects of certain items.
Refer to "Supplementary information affecting GAAP and Non-GAAP
results" 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.
|
Supplementary information affecting GAAP and Non-GAAP
results
|
|
Three Months
Ended
|
(In
thousands)
|
Financial
statements item
affected
|
October 1,
2023
|
|
July 2,
2023
|
|
October 2,
2022
|
Incremental cost of
above market polysilicon(1)
|
Cost of
revenue
|
104
|
|
184
|
|
603
|
|
|
(1)
|
Relates to the
difference between our contractual cost for the polysilicon under
the long-term fixed supply agreements with our supplier, which
ended in the fiscal year 2022, and the price of polysilicon
available in the market as derived from publicly available
information at the beginning of each quarter, multiplied by the
volume of modules sold within the quarter.
|
Fourth Quarter 2023 and Fiscal Year 2023 Outlook
For the fourth quarter of 2023, the Company anticipates the
following results:
(In millions, except
shipments)
|
Outlook
|
Shipments, in
MW
|
610 - 650
|
Revenue(5)
|
$220 - $260
|
Gross
loss(5)
|
$5 - $15
|
Non-GAAP gross
loss(1)(5)
|
$5 - $15
|
Operating
expenses
|
$113 ± $4
|
Non-GAAP operating
expenses(2)
|
$38 ± $2
|
Adjusted
EBITDA(3)(5)
|
$(27) -
$(37)
|
Capital
expenditures(4)
|
$10 - $20
|
For fiscal year 2023, the Company is revising its annual
guidance to reflect the near term softening of residential demand,
the recent SunPower settlement and the challenging market
conditions which the Company expects to persist through the fourth
quarter:
– Revenue to be within a range of $1,114
million to $1,154 million.
– Adjusted EBITDA to be within a range of $4 million to $14
million.
– Capital expenditures(4) to be within a range
of $66 million to $76 million.
(1)
|
The Company's Non-GAAP
gross loss is impacted by the effects of adjusting for stock-based
compensation expense.
|
(2)
|
The Company's Non-GAAP
operating expenses are impacted by the effects of adjusting for
stock-based compensation expense.
|
(3)
|
The Company cannot
provide a reconciliation between its Adjusted EBITDA projection and
the most directly comparable GAAP measures without unreasonable
efforts because it is unable to predict with reasonable certainty
the ultimate outcome of the remeasurement gain or loss of the
prepaid forward and the equity in gain or loss of unconsolidated
investees.
|
(4)
|
Capital expenditures
mainly relate to the conversion of our Fab 4 in the Philippines to
our new Maxeon 7 technology and remaining payments to the equipment
suppliers of the Performance series lines in Malaysia and Mexico
for the US utility segment. We are also investing into development
of our next generation cell technology (Maxeon 8), in addition to
the various programs to enhance our IT infrastructure and security,
as well as to support the Beyond the Panel offering. The above also
includes capital expenditures for preparatory activities in
connection with the investment plan to deploy a multi-GW factory in
the United States to manufacture solar products for the
utility-scale power plant market.
|
(5)
|
The Company's Shipment,
Revenue, Gross loss, Non-GAAP gross loss and Adjusted EBITDA has
included transactions with SunPower based on the contracted volume
pursuant to the settlement agreement.
|
These anticipated results for the fourth quarter of 2023 are
preliminary, unaudited and represent the most current information
available to management. The Company's business outlook is based on
management's current views and estimates with respect to market
conditions, production capacity and the global economic
environment. Please refer to Forward Looking Statements section
below. Management's views and estimates are subject to change
without notice.
For more information
Maxeon's third quarter 2023 financial results and management
commentary can be found on Form 6-K by accessing the Financials
& Filings page of the Investor Relations section of Maxeon's
website at: https://corp.maxeon.com/investor-relations. The Form
6-K 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 hold a conference call on November 15, 2023, at 5:00
PM U.S. ET / November 16,
2023, at 6:00 AM Singapore
Time, to discuss results and to provide an update on the
business.
To join the live conference call, participants must first
register here, where a dial-in number will be provided.
A simultaneous audio-only webcast of the conference call will be
available on Maxeon's website here. A webcast replay will be
available on Maxeon's website for one year at
https://corp.maxeon.com/events-and-presentations.
About Maxeon Solar Technologies
Maxeon Solar Technologies Ltd (NASDAQ: MAXN) is Powering
Positive Change™. Headquartered in Singapore, Maxeon designs and manufactures
Maxeon® and SunPower® brand solar panels, and has sales operations
in more than 100 countries, operating under the SunPower brand in
certain countries outside the United
States. The Company is a leader in solar innovation with
over 1,600 patents and two best-in-class solar panel product lines.
Maxeon products span the global rooftop and solar power plant
markets through a network of more than 1,700 trusted partners and
distributors. A pioneer in sustainable solar manufacturing, Maxeon
leverages a 35-plus-year history in the solar industry and numerous
awards for its technology. For more information about how Maxeon is
Powering Positive Change™ visit us at https://www.maxeon.com/, on
LinkedIn and on Twitter @maxeonsolar.
Forward-Looking Statements
This press release contains forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as
amended, 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, natural disasters or military
conflicts, including the duration, scope and impact on the demand
for our products, market disruptions from the war in Ukraine and the Israel-Hamas conflict; (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,
implementation of restructuring plans and projected growth and
profitability; (e) our ability to meet short term and long term
material cash requirements, our ability to complete an equity or
debt offering or financing at favorable terms, if at all, and our
overall liquidity, substantial indebtedness and ability to obtain
additional financing; (f) our technology outlook, including
anticipated fab capacity expansion and utilization and expected
ramp and production timelines for the Company's next-generation
Maxeon 7 and Performance line solar panels, expected cost
reductions, and future performance; (g) our strategic goals and
plans, including capacity expansion, partnership discussions with
respect to the Company's next-generation technology, and our
relationship with our existing customers, suppliers and partners,
and our ability to achieve and maintain them; (h) our expectations
regarding our future performance and revenues resulting from
contracted orders, bookings, backlog, and pipelines in our sales
channels and feedback from our partners; (i) our projected
effective tax rate and changes to the valuation allowance related
to our deferred tax assets; and (j) our fourth quarter and annual
fiscal year 2023 guidance, including shipments, revenue, gross
loss, non-GAAP gross loss, operating expenses, non-GAAP operating
expenses, Adjusted EBITDA, capital expenditures, and related
assumptions.
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. Among other things, the
quotations from management in this press release and Maxeon's
operations and business outlook contain forward-looking
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) our liquidity, substantial
indebtedness, terms and conditions upon which our indebtedness is
incurred, and ability to obtain additional financing for our
projects, customers and operations; (3) our ability to manage
supply chain shortages and/or excess inventory and cost increases
and operating expenses; (4) potential disruptions to our operations
and supply chain that may result from damage or destruction of
facilities operated by our suppliers, difficulties in hiring or
retaining key personnel, epidemics, natural disasters, including
impacts of the war in Ukraine and
the Israel-Hamas conflict; (5) our ability to manage our key
customers and suppliers, including the impact of the termination of
the supply agreements with one of the Company's biggest customers,
SunPower Corporation; (6) 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; (7) competition in the solar and general
energy industry and downward pressure on selling prices and
wholesale energy pricing, including impacts of inflation, economic
recession and foreign exchange rates upon customer demand; (8)
changes in regulation and public policy, including the imposition
and applicability of tariffs; (9) our ability to comply with
various tax holiday requirements as well as regulatory changes or
findings affecting the availability of economic incentives
promoting use of solar energy and availability of tax incentives or
imposition of tax duties; (10) fluctuations in our operating
results and in the foreign currencies in which we operate; (11)
appropriately sizing, or delays in expanding our manufacturing
capacity and containing manufacturing and logistics difficulties
that could arise; (12) unanticipated impact to customer demand and
sales schedules due, among other factors, to the war in
Ukraine and the Israel-Hamas
conflict, economic recession and environmental disasters; (13)
challenges managing our acquisitions, joint ventures and
partnerships, including our ability to successfully manage acquired
assets and supplier relationships; (14) reaction by securities or
industry analysts to our annual and/or quarterly guidance, in
combination with our results of operations or other factors, and/
or third party reports or publications, whether accurate or not,
which may cause such securities or industry analysts to cease
publishing research or reports about us, or adversely change their
recommendations regarding our ordinary shares, which may negatively
impact the market price of our ordinary shares and volume of our
stock trading; (15) reaction by investors to our annual and/or
quarterly guidance, in combination with our results of operations
or other factors, and/ or third party reports or publications,
whether accurate or not, which may negatively impact the market
price of our ordinary shares and volume of our stock trading and
(16) unpredictable outcomes resulting from our litigation
activities or other disputes. 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://corp.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 in light of new information or future
events.
Use of Non-GAAP Financial Measures
We present certain non-GAAP measures such as non-GAAP gross
profit (loss), non-GAAP operating expenses and earnings before
interest, taxes, depreciation and amortization ("EBITDA") adjusted
for stock-based compensation, restructuring (charges and fees)
benefits, remeasurement (loss) gain on prepaid forward and physical
delivery forward and equity in losses (income) of unconsolidated
investees ("Adjusted EBITDA") to supplement our consolidated
financial results presented in accordance with GAAP. Non-GAAP gross
profit (loss) is defined as gross profit (loss) excluding
stock-based compensation. Non-GAAP operating expenses is defined as
operating expenses excluding stock-based compensation and
restructuring (charges and fees) benefits.
We believe that non-GAAP gross profit (loss), non-GAAP operating
expenses and Adjusted EBITDA provide greater transparency into
management's view and assessment of the Company's ongoing operating
performance by removing items management believes are not
representative of our continuing operations and may distort our
longer-term operating trends. We believe these measures are useful
to help enhance the comparability of our results of operations
across different reporting periods on a consistent basis and with
our competitors, distinct from items that are infrequent or not
associated with the Company's core operations as presented above.
We also use these non-GAAP measures 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 non-GAAP measures, we believe that these
measures may be important to investors in understanding our
operating results as seen through the eyes of management. These
non-GAAP measures are neither prepared in accordance with GAAP nor
are they 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.
As presented in the "Reconciliation of Non-GAAP Financial
Measures" section, each of the non-GAAP financial measures excludes
one or more of the following items in arriving to the non-GAAP
measures:
- 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 and is excluded from
non-GAAP gross profit (loss), non-GAAP operating expense and
Adjusted EBITDA. 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 and fees) benefits. We incur
restructuring (charges and fees) benefits related to reorganization
plans and business acquisition aimed towards realigning resources
consistent with our global strategy and improving its overall
operating efficiency and cost structure. Restructuring (charges and
fees) benefits are excluded from non-GAAP operating expenses and
Adjusted EBITDA because they are not considered core operating
activities. Although we have engaged in restructuring activities
and initiatives, 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 and fees)
benefits from our non-GAAP 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.
- Remeasurement loss (gain) on prepaid forward and
physical delivery forward. This relates to the mark-to-market
fair value remeasurement of privately negotiated prepaid forward
and physical delivery transactions. The transactions were entered
into in connection with the issuance on July
17, 2020 of the 6.50% Green Convertible Senior Notes due
2025 for an aggregate principal amount of $200 million. 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 primarily affected by the Company's share price. 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 primarily affected by
the Company's share price. The remeasurement loss (gain) on prepaid
forward and physical delivery forward is excluded from Adjusted
EBITDA because it is not considered core operating activities. As
such, management believes that it is appropriate to exclude the
mark-to-market adjustments from our Adjusted EBITDA as it is not
reflective of ongoing operating results nor do the loss contribute
to a meaningful evaluation of our past operating performance.
- Equity in (losses) income of unconsolidated investees.
This relates to the (loss) income on our unconsolidated equity
investment Huansheng JV. This is excluded from our Adjusted EBITDA
financial measure as it is non-cash in nature and not reflective of
our core operational performance. As such, management believes that
it is appropriate to exclude such charges as they do not contribute
to a meaningful evaluation of our performance.
Reconciliation of
Non-GAAP Financial Measures
|
|
|
Three Months
Ended
|
(In
thousands)
|
October 1,
2023
|
|
July 2,
2023
|
|
October 2,
2022
|
Gross profit
(loss)
|
$
2,728
|
|
$
56,223
|
|
$
(15,747)
|
Stock-based
compensation
|
—
|
|
525
|
|
255
|
Non-GAAP Gross
profit (loss)
|
2,728
|
|
56,748
|
|
(15,492)
|
|
|
|
|
|
|
GAAP Operating
expenses
|
66,562
|
|
47,830
|
|
41,196
|
Stock-based
compensation
|
(4,888)
|
|
(7,071)
|
|
(5,918)
|
Restructuring (charges
and fees) benefits
|
(24,139)
|
|
124
|
|
(627)
|
Non-GAAP Operating
expenses
|
37,535
|
|
40,883
|
|
34,651
|
|
|
|
|
|
|
GAAP Net loss
attributable to the stockholders
|
(108,257)
|
|
(1,509)
|
|
(44,691)
|
Interest expense,
net
|
7,734
|
|
8,903
|
|
8,035
|
(Benefit from)
provision for income taxes
|
(2,554)
|
|
5,893
|
|
2,399
|
Depreciation
|
14,495
|
|
14,546
|
|
13,845
|
Amortization
|
38
|
|
45
|
|
50
|
EBITDA
|
(88,544)
|
|
27,878
|
|
(20,362)
|
Stock-based
compensation
|
4,888
|
|
7,596
|
|
6,173
|
Restructuring charges
and fees (benefits)
|
24,139
|
|
(124)
|
|
627
|
Remeasurement loss
(gain) on prepaid forward
|
37,137
|
|
(4,718)
|
|
(24,521)
|
Equity in losses
(income) of unconsolidated investees
|
2,457
|
|
(392)
|
|
3,582
|
Adjusted
EBITDA
|
(19,923)
|
|
30,240
|
|
(34,501)
|
Reconciliation of
Non-GAAP Outlook
|
|
(In
millions)
|
Outlook
|
Gross
loss
|
$5 - $15
|
Stock-based
compensation
|
—
|
Non-GAAP gross
loss
|
$5 -
$15
|
|
|
Operating
expenses
|
$113 ± $4
|
Stock-based
compensation
|
$(5)
|
Restructuring charges
and fees
|
$(70) ± 2
|
Non-GAAP operating
expenses
|
$38 ±
$2
|
©2023 Maxeon Solar Technologies, Ltd. All rights reserved.
MAXEON is a registered trademark of Maxeon Solar Technologies, Ltd.
Visit https://corp.maxeon.com/trademarks for more
information.
MAXEON SOLAR
TECHNOLOGIES, LTD. CONDENSED CONSOLIDATED BALANCE
SHEETS (unaudited) (In thousands, except for
shares data)
|
|
|
As of
|
|
October 1,
2023
|
|
January 1,
2023
|
Assets
|
|
|
|
Current
assets:
|
|
|
|
Cash and cash
equivalents
|
$
208,100
|
|
$
227,442
|
Short-term
securities
|
60,000
|
|
76,000
|
Restricted short-term
marketable securities
|
—
|
|
968
|
Accounts receivable,
net
|
91,332
|
|
54,301
|
Inventories
|
386,140
|
|
303,230
|
Advances to suppliers,
current portion
|
1,407
|
|
2,137
|
Prepaid expenses and
other current assets
|
92,383
|
|
126,971
|
Total current
assets
|
$
839,362
|
|
$
791,049
|
Property, plant and
equipment, net
|
357,993
|
|
380,468
|
Operating lease right
of use assets
|
24,821
|
|
17,844
|
Other intangible
assets, net
|
276
|
|
291
|
Deferred tax
assets
|
10,239
|
|
10,348
|
Other long-term
assets
|
68,057
|
|
60,418
|
Total
assets
|
$
1,300,748
|
|
$
1,260,418
|
Liabilities and
Equity
|
|
|
|
Current
liabilities:
|
|
|
|
Accounts
payable
|
$
180,929
|
|
$
247,870
|
Accrued
liabilities
|
101,745
|
|
135,157
|
Contract liabilities,
current portion
|
204,494
|
|
139,267
|
Short-term
debt
|
23,434
|
|
50,526
|
Operating lease
liabilities, current portion
|
5,946
|
|
3,412
|
Total current
liabilities
|
$
516,548
|
|
$
576,232
|
Long-term
debt
|
1,314
|
|
1,649
|
Contract liabilities,
net of current portion
|
125,353
|
|
161,678
|
Operating lease
liabilities, net of current portion
|
20,649
|
|
15,603
|
Convertible
debt
|
383,788
|
|
378,610
|
Deferred tax
liabilities
|
14,333
|
|
14,913
|
Other long-term
liabilities
|
63,203
|
|
63,663
|
Total
liabilities
|
$
1,125,188
|
|
$
1,212,348
|
Commitments and
contingencies
|
|
|
|
Equity:
|
|
|
|
Common stock, no par
value (52,780,052 and 45,033,027 issued and outstanding as of
October 1, 2023 and January 1, 2023, respectively)
|
$
—
|
|
$
—
|
Additional paid-in
capital
|
795,218
|
|
584,808
|
Accumulated
deficit
|
(609,758)
|
|
(520,263)
|
Accumulated other
comprehensive loss
|
(15,610)
|
|
(22,108)
|
Equity attributable to
the Company
|
169,850
|
|
42,437
|
Noncontrolling
interests
|
5,710
|
|
5,633
|
Total equity
|
175,560
|
|
48,070
|
Total liabilities
and equity
|
$
1,300,748
|
|
$
1,260,418
|
MAXEON SOLAR
TECHNOLOGIES, LTD.
CONDENSED
CONSOLIDATED STATEMENTS OF
OPERATIONS (unaudited) (In thousands, except
per share data)
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
October 1,
2023
|
|
October 2,
2022
|
|
October 1,
2023
|
|
October 2,
2022
|
Revenue
|
$
227,630
|
|
$
275,449
|
|
$
894,335
|
|
$
736,610
|
Cost of
revenue
|
224,902
|
|
291,196
|
|
781,759
|
|
804,645
|
Gross profit
(loss)
|
2,728
|
|
(15,747)
|
|
112,576
|
|
(68,035)
|
Operating
expenses:
|
|
|
|
|
|
|
|
Research and
development
|
11,627
|
|
11,968
|
|
35,715
|
|
38,278
|
Sales, general and
administrative
|
31,771
|
|
29,143
|
|
97,291
|
|
74,414
|
Restructuring
charges
|
23,164
|
|
85
|
|
23,307
|
|
1,615
|
Total operating
expenses
|
66,562
|
|
41,196
|
|
156,313
|
|
114,307
|
Operating
loss
|
(63,834)
|
|
(56,943)
|
|
(43,737)
|
|
(182,342)
|
Other (expense) income,
net
|
|
|
|
|
|
|
|
Interest
expense
|
(10,464)
|
|
(8,821)
|
|
(32,337)
|
|
(19,544)
|
Other, net
|
(34,174)
|
|
27,267
|
|
(1,210)
|
|
25,391
|
Other (expense)
income, net
|
(44,638)
|
|
18,446
|
|
(33,547)
|
|
5,847
|
Loss before income
taxes and equity in losses of unconsolidated investees
|
(108,472)
|
|
(38,497)
|
|
(77,284)
|
|
(176,495)
|
Benefit from
(provision for) income taxes
|
2,554
|
|
(2,399)
|
|
(9,323)
|
|
(4,161)
|
Equity in losses of
unconsolidated investees
|
(2,457)
|
|
(3,582)
|
|
(2,811)
|
|
(10,784)
|
Net loss
|
(108,375)
|
|
(44,478)
|
|
(89,418)
|
|
(191,440)
|
Net loss (income)
attributable to noncontrolling interests
|
118
|
|
(213)
|
|
(77)
|
|
(283)
|
Net loss attributable
to the stockholders
|
$
(108,257)
|
|
$
(44,691)
|
|
$
(89,495)
|
|
$
(191,723)
|
|
|
|
|
|
|
|
|
Net loss per share
attributable to stockholders:
|
|
|
|
|
|
|
|
Basic and
diluted
|
$
(2.21)
|
|
$
(1.09)
|
|
$
(1.98)
|
|
$
(4.70)
|
|
|
|
|
|
|
|
|
Weighted average shares
used to compute net loss per share:
|
|
|
|
|
|
|
|
Basic and
diluted
|
48,925
|
|
40,951
|
|
45,157
|
|
40,818
|
MAXEON SOLAR
TECHNOLOGIES, LTD. CONDENSED CONSOLIDATED STATEMENTS OF
EQUITY (unaudited) (In
thousands)
|
|
|
Shares
|
|
Amount
|
|
Additional Paid In
Capital
|
|
Accumulated
Deficit
|
|
Accumulated Other
Comprehensive Loss
|
|
Equity Attributable
to the Company
|
|
Noncontrolling
Interests
|
|
Total
Equity
|
Balance at January
1, 2023
|
45,033
|
|
$
—
|
|
$
584,808
|
|
$
(520,263)
|
|
$
(22,108)
|
|
$
42,437
|
|
$
5,633
|
|
$
48,070
|
Net income
|
—
|
|
—
|
|
—
|
|
20,271
|
|
—
|
|
20,271
|
|
147
|
|
20,418
|
Issuance of common
stock for stock-based compensation, net of tax withheld
|
377
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
Recognition of
stock-based compensation
|
—
|
|
—
|
|
4,033
|
|
—
|
|
—
|
|
4,033
|
|
—
|
|
4,033
|
Other comprehensive
income
|
—
|
|
—
|
|
—
|
|
—
|
|
1,627
|
|
1,627
|
|
—
|
|
1,627
|
Balance at April 2,
2023
|
45,410
|
|
$
—
|
|
$
588,841
|
|
$
(499,992)
|
|
$
(20,481)
|
|
$
68,368
|
|
$
5,780
|
|
$
74,148
|
Net loss
(income)
|
—
|
|
$
—
|
|
$
—
|
|
$
(1,509)
|
|
$
—
|
|
$
(1,509)
|
|
$
48
|
|
$
(1,461)
|
Issuance of common
stock, net of issuance cost
|
7,120
|
|
—
|
|
193,491
|
|
—
|
|
—
|
|
193,491
|
|
—
|
|
193,491
|
Issuance of common
stock for stock-based compensation, net of tax withheld
|
116
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
Recognition of
stock-based compensation
|
—
|
|
—
|
|
6,980
|
|
—
|
|
—
|
|
6,980
|
|
—
|
|
6,980
|
Other comprehensive
loss
|
—
|
|
—
|
|
—
|
|
—
|
|
(65)
|
|
(65)
|
|
—
|
|
(65)
|
Balance at July 2,
2023
|
52,646
|
|
—
|
|
789,312
|
|
(501,501)
|
|
(20,546)
|
|
267,265
|
|
5,828
|
|
273,093
|
Net loss
|
—
|
|
—
|
|
—
|
|
(108,257)
|
|
—
|
|
(108,257)
|
|
(118)
|
|
(108,375)
|
Issuance of common
stock for stock-based compensation, net of tax withheld
|
134
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
Recognition of
stock-based compensation
|
—
|
|
—
|
|
5,906
|
|
—
|
|
—
|
|
5,906
|
|
—
|
|
5,906
|
Other comprehensive
income
|
—
|
|
—
|
|
—
|
|
—
|
|
4,936
|
|
4,936
|
|
—
|
|
4,936
|
Balance at October
1, 2023
|
52,780
|
|
—
|
|
795,218
|
|
(609,758)
|
|
(15,610)
|
|
169,850
|
|
5,710
|
|
175,560
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares
|
|
Amount
|
|
Additional Paid In
Capital
|
|
Accumulated
Deficit
|
|
Accumulated Other
Comprehensive Loss
|
|
Equity Attributable
to the Company
|
|
Noncontrolling
Interests
|
|
Total
Equity
|
Balance at January
2, 2022
|
44,247
|
|
$
—
|
|
$
624,261
|
|
$
(262,961)
|
|
$
(11,844)
|
|
$
349,456
|
|
$
5,419
|
|
$
354,875
|
Effect of adoption of
ASU 2020-06
|
—
|
|
—
|
|
(52,189)
|
|
10,122
|
|
—
|
|
(42,067)
|
|
—
|
|
(42,067)
|
Net loss
|
—
|
|
—
|
|
—
|
|
(59,112)
|
|
—
|
|
(59,112)
|
|
(85)
|
|
(59,197)
|
Issuance of common
stock for stock-based compensation, net of tax withheld
|
354
|
|
—
|
|
(2)
|
|
—
|
|
—
|
|
(2)
|
|
—
|
|
(2)
|
Distribution to
noncontrolling interest
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(64)
|
|
(64)
|
Recognition of
stock-based compensation
|
—
|
|
—
|
|
1,466
|
|
—
|
|
—
|
|
1,466
|
|
—
|
|
1,466
|
Other comprehensive
income
|
—
|
|
—
|
|
—
|
|
—
|
|
(803)
|
|
(803)
|
|
—
|
|
(803)
|
Balance at April 3,
2022
|
44,601
|
|
$
—
|
|
$
573,536
|
|
$
(311,951)
|
|
$
(12,647)
|
|
$
248,938
|
|
$
5,270
|
|
$
254,208
|
Net (loss)
income
|
—
|
|
—
|
|
—
|
|
(87,920)
|
|
—
|
|
(87,920)
|
|
155
|
|
(87,765)
|
Issuance of common
stock for stock-based compensation, net of tax withheld
|
108
|
|
—
|
|
(21)
|
|
—
|
|
—
|
|
(21)
|
|
—
|
|
(21)
|
Recognition of
stock-based compensation
|
—
|
|
—
|
|
2,844
|
|
—
|
|
—
|
|
2,844
|
|
—
|
|
2,844
|
Other comprehensive
loss
|
—
|
|
—
|
|
—
|
|
—
|
|
(755)
|
|
(755)
|
|
—
|
|
(755)
|
Balance at July 3,
2022
|
44,709
|
|
—
|
|
576,359
|
|
(399,871)
|
|
(13,402)
|
|
163,086
|
|
5,425
|
|
168,511
|
Net (loss)
income
|
—
|
|
—
|
|
—
|
|
(44,691)
|
|
—
|
|
(44,691)
|
|
213
|
|
(44,478)
|
Issuance of common
stock for stock-based compensation, net of tax withheld
|
288
|
|
|
|
(233)
|
|
—
|
|
—
|
|
(233)
|
|
—
|
|
(233)
|
Recognition of
stock-based compensation
|
—
|
|
—
|
|
5,272
|
|
—
|
|
—
|
|
5,272
|
|
—
|
|
5,272
|
Other comprehensive
income
|
—
|
|
—
|
|
—
|
|
—
|
|
1,406
|
|
1,406
|
|
—
|
|
1,406
|
Balance at October
2, 2022
|
44,997
|
|
—
|
|
581,398
|
|
(444,562)
|
|
(11,996)
|
|
124,840
|
|
5,638
|
|
130,478
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
MAXEON SOLAR
TECHNOLOGIES, LTD. CONDENSED CONSOLIDATED STATEMENTS OF
CASH FLOWS (unaudited) (In
thousands)
|
|
|
Nine Months
Ended
|
|
October 1,
2023
|
|
October 2,
2022
|
Cash flows from
operating activities
|
|
|
|
Net loss
|
$
(89,418)
|
|
$
(191,440)
|
Adjustments to
reconcile net loss to operating cash flows
|
|
|
|
Depreciation and
amortization
|
43,579
|
|
42,263
|
Stock-based
compensation
|
17,145
|
|
11,015
|
Non-cash interest
expense
|
7,042
|
|
4,735
|
Equity in losses of
unconsolidated investees
|
2,811
|
|
10,784
|
Deferred income
taxes
|
(472)
|
|
2,540
|
Loss on impairment of
property, plant and equipment
|
442
|
|
—
|
Loss on disposal of
property, plant and equipment
|
33
|
|
260
|
Remeasurement loss
(gain) on prepaid forward
|
8,570
|
|
(20,137)
|
Gain on liquidation of
subsidiaries
|
—
|
|
(235)
|
(Utilization of)
provision for inventory reserves
|
(1,351)
|
|
25,899
|
Other, net
|
63
|
|
886
|
Changes in operating
assets and liabilities
|
|
|
|
Accounts
receivable
|
(37,353)
|
|
(20,150)
|
Inventories
|
(110,646)
|
|
(113,883)
|
Prepaid expenses and
other assets
|
5,498
|
|
(22,907)
|
Operating lease
right-of-use assets
|
3,766
|
|
2,104
|
Advances to
suppliers
|
730
|
|
37,892
|
Accounts payable and
other accrued liabilities
|
(52,808)
|
|
68,609
|
Contract
liabilities
|
27,404
|
|
127,814
|
Operating lease
liabilities
|
(2,917)
|
|
(2,341)
|
Net cash used in
operating activities
|
(177,882)
|
|
(36,292)
|
Cash flows from
investing activities
|
|
|
|
Purchases of property,
plant and equipment
|
(55,796)
|
|
(56,023)
|
Purchases of
intangible assets
|
(136)
|
|
(41)
|
Proceeds from maturity
of short-term securities
|
76,000
|
|
—
|
Purchase of short-term
securities
|
(60,000)
|
|
(76,000)
|
Purchase of restricted
short-term marketable securities
|
(10)
|
|
—
|
Proceeds from maturity
of restricted short-term marketable securities
|
971
|
|
—
|
Proceeds from disposal
of property, plant and equipment
|
—
|
|
33
|
Net cash used in
investing activities
|
(38,971)
|
|
(132,031)
|
Cash flows from
financing activities
|
|
|
|
Proceeds from
debt
|
148,992
|
|
196,388
|
Repayment of
debt
|
(175,942)
|
|
(171,141)
|
Repayment of finance
lease obligations
|
(477)
|
|
(433)
|
Payment for tax
withholding obligations for issuance of common stock upon vesting
of restricted stock units
|
—
|
|
(257)
|
Net proceeds from
issuance of convertible debt
|
—
|
|
188,812
|
Net proceeds from
issuance of common stock
|
193,531
|
|
—
|
Distribution to
noncontrolling interest
|
—
|
|
(64)
|
Net cash provided by
financing activities
|
166,104
|
|
213,305
|
Effect of exchange rate
changes on cash, cash equivalents and restricted cash
|
124
|
|
348
|
Net (decrease) increase
in cash, cash equivalents and restricted cash
|
(50,625)
|
|
45,330
|
Cash, cash equivalents
and restricted cash, beginning of period
|
267,961
|
|
192,232
|
Cash, cash equivalents
and restricted cash, end of period
|
$
217,336
|
|
$
237,562
|
Non-cash
transactions
|
|
|
|
Property, plant and
equipment purchases funded by liabilities
|
$
10,158
|
|
$
40,154
|
Property, plant and
equipment obtained through capital lease
|
—
|
|
2,127
|
Right-of-use assets
obtained in exchange for lease obligations
|
10,743
|
|
4,778
|
The following table reconciles our cash and cash equivalents and
restricted cash reported on our Condensed Consolidated Balance
Sheets and the cash, cash equivalents and restricted cash reported
on our Condensed Consolidated Statements of Cash Flows as of
October 1, 2023 and October 2, 2022:
(In
thousands)
|
October 1,
2023
|
|
October 2,
2022
|
Cash and cash
equivalents
|
$
208,100
|
|
$
199,085
|
Restricted cash,
current portion, included in Prepaid expenses and other current
assets
|
9,234
|
|
35,968
|
Restricted cash, net of
current portion, included in Other long-term assets
|
2
|
|
2,509
|
Total cash, cash
equivalents and restricted cash shown in Condensed Consolidated
Statements of Cash Flows
|
$
217,336
|
|
$
237,562
|
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SOURCE Maxeon Solar Technologies, Ltd.