SunPower Corp. (NASDAQ: SPWR) today announced financial results for its fourth quarter and fiscal year ended Dec.
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Non-GAAP gross margin1
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1Information about SunPower’s use of non-GAAP financial information is provided under “Use of Non-GAAP Financial Measures” below.
“2014 was a very important year for SunPower in terms of our strategic development. We significantly expanded our international power plant market footprint while constructing the world’s largest solar power plant in California. On the distributed generation (DG) side of our business, we made a number of acquisitions and strategic investments that we believe position SunPower as a leader in the emerging smart energy eco-system,” said Tom Werner, SunPower president and CEO.
Exiting the year, we saw continued strength in both our power plant and DG businesses while executing well against our long term cost reduction roadmap. We also expect production of our first PV cell from our new Fab 4 facility mid-year 2015 as we continue our capacity expansion plans.
Yesterday we announced another important strategic development, that we are in advanced negotiations to form a joint YieldCo vehicle with First Solar, Inc. into which each company expects to contribute a portfolio of selected solar generation assets. We believe that this joint venture will drive significant long-term value for our shareholders and we will provide additional details about the joint venture when they are finalized.
“North America was again our highest contributing region in the fourth quarter. Construction of the 579-megawatt (MW) ac Solar Star Projects for Berkshire Hathaway Energy and Southern California Edison is on plan with more than 412-MWac now connected to the grid, and with substantial completion expected by the end of the second quarter. Construction of our 135-MW Quinto project is proceeding with expected completion by the end of this year,” continued Werner.
“The company continued to see significant demand in the commercial sector during the fourth quarter with strong repeat customer bookings as we added to our $1.4 billion pipeline. In the residential channel, bookings rose sequentially for cash, loan and lease. Customers clearly value our broad range of financing options that are tailored to their particular circumstances and desires.
“SunPower also announced several strategic investments during the quarter that enhanced our capabilities in what we call Smart Energy. Our exclusive commercial relationships with Sunverge Energy, Inc. in the area of residential battery storage and Tendril, Inc. in energy information and management software, position SunPower very well to offer comprehensive solar-based energy solutions that allow our customers greater control over their daily energy consumption and their overall energy bill. When combined with our recent acquisitions of SolarBridge Technologies, Inc. micro-inverter technology, and our new dealer operations software suite, we are rapidly broadening our differentiated residential Smart Energy platform.
In EMEA, we saw volume increases and stable pricing in our distributed generation business and we are close to completing the restructuring of our European DG business aimed at improving profitability. In power plants, our strong position in France continues to yield promising momentum and solid bookings. In South Africa, construction of our 86-MWac Prieska project remains on plan as we ramp our 160-MW South African panel manufacturing facility to support our large scale project efforts in this region.
“We remain very positive on Asia Pacific. Our high efficiency panel technology with industry leading quality and reliability has allowed us to maintain a leading position in the Japanese rooftop market. In China, we are seeing significant traction through our manufacturing and project development joint ventures. With 250-MW of expected installations in 2015 and a pipeline of more than 4-GW, these two joint ventures uniquely position SunPower to participate meaningfully in the world’s largest solar power market,” Werner concluded.
“SunPower exited 2014 on a very strong note as our solid execution and demand for our high efficiency technology enabled us to meet or exceed our financial targets for the quarter,” said Chuck Boynton, SunPower CFO.
We ended the year with total liquidity of $1.2 billion and successfully managed our working capital needs. We continued to add assets to our holdco project portfolio during the quarter and were pleased to announce our intention to form a joint YieldCo vehicle with First Solar. We believe this strategic approach will enable both companies to maximize project economics, lower the cost of capital and generate significant long term shareholder returns.
Fourth-quarter fiscal 2014 non-GAAP results include net adjustments that, in the aggregate, decrease net income by $95.3 million, including gross margin adjustments of ($196.0) million and $56.8 million related to the timing of revenue recognition from utility and power plant projects, and, loss on arbitration ruling, respectively, $13.7 million in stock-based compensation expense, $5.6 million in non-cash interest expense, $13.1 million in restructuring charges related to the November 2014 Restructuring Plan, $2.1 million of other adjustments and $9.4 million in tax effect.
First Quarter 2015 Financial Outlook
The company’s first quarter 2015 consolidated non-GAAP guidance is as follows: revenue of $410 million to $460 million, gross margin of 18 percent to 20 percent, net income per diluted share of $0.05 to $0.15 and megawatts recognized in the range of 240 megawatts to 270 megawatts. On a GAAP basis, the company expects revenue of $420 million to $470 million, gross margin of 18 percent to 20 percent and net loss per diluted share of $0.20 to $0.10.
SunPower believes that its underlying business fundamentals for 2015 remain strong. However, as a result of company’s announcement on February 23, 2015 of its intention to form a joint YieldCo vehicle with First Solar, the company is withdrawing its previously disclosed fiscal year 2015 guidance until such time the company can finalize the impact of the proposed YieldCo vehicle on its expected financial performance. The company will provide an update at a later date.
The company will host a conference call for investors this morning to discuss its fourth-quarter and fiscal year 2014 performance at 5:30 a.m. Pacific Time. The call will be webcast and can be accessed from SunPower’s website at http://investors.sunpower.com/events.cfm.
This press release contains both GAAP and non-GAAP financial information. Non-GAAP historical figures are reconciled to the closest GAAP equivalent categories in the financial attachment of this press release. Please note that the company has posted supplemental information and slides related to its fourth-quarter 2014 performance on the Events and Presentations section of the SunPower Investor Relations page at http://investors.sunpower.com/events.cfm. The capacity of power plants in this release is described in approximate megawatts on a direct current (dc) basis unless otherwise noted.