SunPower Reports First-Quarter 2008 Results

Company Raises FY 2008 Guidance

SAN JOSE, Calif., April 17 /PRNewswire-FirstCall/ -- SunPower Corporation
(Nasdaq: SPWR) today announced financial results for the first quarter 2008,
which ended March 30, 2008. This press release contains both GAAP and
non-GAAP financial information. Non-GAAP figures are reconciled to the
closest GAAP equivalent figures on the final page of this press release.
Please note that the company has posted additional, supplemental information
related to its first quarter 2008 performance on the Events and Presentations
section of the Investor Relations page on the SunPower website.
Revenue for the 2008 first quarter was $273.7 million, up 22% from
prior-quarter revenue of $224.3 million and up 92% from year-ago first-quarter
revenue of $142.3 million. The Components and Systems segments accounted for
35% and 65% of first-quarter revenue, respectively.
For reporting purposes, the Systems segment generally represents products
and services sold directly to the system owner, while the Components segment
primarily represents products sold to installers and resellers. Additionally,
both SunPower and third-party solar panels sold through the Systems segment
channels are recorded as Systems segment revenue.
On a GAAP basis, SunPower reported gross margin of 19.5%, total operating
income of $14.8 million and diluted net income per share of $0.15. These
figures include non-cash operating expenses for amortization of purchase
accounting intangible assets of $4.3 million and non-cash, stock-based
compensation of $14.5 million. Additionally, for the three months ended March
30, 2008, GAAP cost of revenue includes $2.2 million of one-time asset
impairment charges relating to the discontinuation of our imaging detector
product line and $3.3 million for write-offs of certain solar manufacturing
equipment which became obsolete due to new processes.
On a non-GAAP basis, adjusted to exclude non-cash charges for amortization
of intangible assets, stock-based compensation, asset impairments and
equipment write-offs, SunPower reported total gross margin of 24.0%, operating
income of $39.1 million and diluted net income per share of $0.39. This
compares with prior-quarter non-GAAP gross margin of 25.3%, total operating
income of $32.4 million and $0.39 diluted net income per share. The first
quarter's non-GAAP gross margin was influenced by a higher mix of revenue from
our Systems segment which posted a gross margin of 23.3% for that quarter and
our Component segment's 200 basis points sequential improvement over the 2007
fourth quarter gross margin to 25.4%. Our Component segment's gross margin
benefitted from higher volume and modestly higher average selling prices. The
increase in Components gross margin was tempered by stable silicon costs,
rather than expected slightly declining silicon costs, as we secured
incremental silicon supply to improve factory linearity in the first and
second quarters of 2008. Looking forward to the second quarter, we expect our
first meaningful reduction in average silicon cost which will contribute to
our estimated 510 to 610 basis point improvement in our Component segment's
gross margin.
"Our first quarter performance reflects the value our customers attribute
to SunPower's high-performance solar solutions," said Tom Werner, SunPower's
CEO. "SunPower's market leadership will continue to be driven through our
focus on brand, technology, cost and people. We are building a strong brand
based on sound fundamentals: the world's highest performance solar technology,
deployed aggressively across the leading global markets using scalable,
responsive channel platforms.
"During the first quarter of 2008, SunPower demonstrated the strength of
its channel diversification. Our dealer network continued to expand, not only
in the United States, but also in three key European markets as well: Germany,
Italy and Spain. We now have more than 200 dealers serving residential and
commercial rooftop markets globally with a rapidly increasing presence in
Europe. In Asia, we expanded our customer footprint with our first volume
shipments into Japan and shipment of components to Samsung in Korea. Our
vertical integration strategy provides us with the visibility and flexibility
to serve a variety of end-markets, responding quickly to both new market
opportunities as well as risks.
"SunPower is positioned to meet the needs of the market with
industry-leading solar technology across the entire customer spectrum -- from
large-scale systems designed for utilities and large commercial clients to
homeowners. Our proprietary technology delivers the highest output per unit
area of any commercially available solar system and we intend to leverage this
technology by aggressively expanding our solar cell production by more than
150% in 2008 compared to 2007. This scale, combined with lower silicon costs,
higher efficiencies, thinner wafers and on-going quality and cost improvements
in our factories, will drive unit cost reduction. During the first quarter of
2008, we continued to meet or exceed our manufacturing targets across both of
our fabs and our panel manufacturing facility. First quarter accomplishments
include:
-- The capacity ramp at Fab 2 remains on schedule and is expected to be
completed by the end of 2009;
-- Almost half of cell production was Gen2 solar cell technology with a
minimum conversion efficiency of 22%;
-- Conversion from 165 micron to 145 micron wafers remains on schedule
with 100% of solar cell lines expected to be using thinner wafers by
year-end 2008;
-- Silicon utilization improved to 6.3 grams per watt due to higher
average solar cell efficiency and thinner wafers;
-- The fourth solar panel manufacturing line completed its production ramp
allowing the company to produce more than half of its panels in-house;
-- The SunPower(R) T20 Tracker manufacturing facility in Spain entered
volume production, supporting more than 45 MW of power plant projects
currently under construction. The T20 Tracker generates up to 30% more
energy than fixed-tilt systems and has been customized for the European
market;
-- The first European commercial market installation was completed using
our non-roof penetrating, rapid assembly SunPower(R) T10 Solar Roof
Tile product.

"SunPower has pursued a portfolio strategy for silicon procurement, using
a combination of short, intermediate and long-term supply agreements and a
variety of incumbent suppliers as well as new entrants. We have not assumed
technology risk for new polysilicon refining techniques. Our solar cell and
panel manufacturing expansion plans are predicated on risk-adjusted,
contracted silicon. We believe that 100% of our projected solar cell
production is secured with contracted silicon through 2010."
SunPower's Silicon Supply Agreement Position and Capacity Expansion Plan

2008 2009 2010
Beginning of Year, Nameplate
Capacity (megawatts) 214 414 574
Annual Production Capacity
Supported by Silicon
Agreements to Date (megawatts) 255 450+ 650+

"We expect SunPower's silicon supply costs to decline by approximately 10%
during 2008 compared to 2007," continued Werner. "This cost improvement will
amplify our silicon utilization benefits achieved through higher cell
efficiency and thinner wafers. We are on track to achieve our planned
improvements in our cost structure, and therefore we expect to reach our
target financial model of 30% gross margin, 10% operating expenses and 20%
operating margin, on a non-GAAP basis, no later than the first quarter of
2009. We are also on track to realize our mission of reducing installed
systems cost by 50% by 2012.
"Based on the strong demand trends we saw in the first quarter of 2008, we
are raising our guidance for the fiscal year 2008 and expect the following
non-GAAP results: Total revenue of $1.3 billion to $1.375 billion, diluted
net income per share of $2.10 to $2.20. We are also reconfirming our 2009
forecast for total revenue to increase at least 40% from 2008 levels.
Consistent with our practice of offering guidance for the current quarter, we
expect second quarter of 2008 non-GAAP total revenue of $330 million to $350
million, company non-GAAP gross margin of 23% to 24% and non-GAAP diluted net
income per share of $0.48 to $0.52, reflecting a higher non-GAAP average tax
rate of 24% to 25% in 2008 as compared to the tax rate in 2007 which ended at
11.0%(1).
"On a business segment basis, we expect the following non-GAAP results for
the second quarter 2008: Components segment revenue of $95 million to $100
million, driven by a planned increase in allocation of SunPower panels to the
Systems segment, and gross margin of 30.5% to 31.5%; Systems segment revenue
of $235 million to $250 million and gross margin of 20% to 21%," said Werner.
"We expect the Components segment to benefit from the continued manufacturing
ramp of our next-generation technology and lower silicon cost and the Systems
segment to benefit from an increase in allocation of SunPower panels to the
segment during the quarter(2)."
About SunPower
SunPower Corporation (Nasdaq: SPWR) designs, manufactures and delivers
high-performance solar-electric systems worldwide for residential, commercial
and utility-scale power plant customers. SunPower high-efficiency solar cells
and solar panels generate up to 50 percent more power than conventional solar
technologies and have a uniquely attractive, all-black appearance. With
headquarters in San Jose, Calif., SunPower has offices in North America,
Europe and Asia. For more information, visit http://www.sunpowercorp.com.
SunPower is a majority-owned subsidiary of Cypress Semiconductor Corp.
(NYSE: CY).
(1) For the full year 2008, we expect the following total company GAAP
results: Revenue of $1.3 billion to $1.375 billion and diluted net income per
share of $1.10 to $1.20. For the second quarter of 2008, we expect the
following total company GAAP results: Revenue of $330 million to $350 million;
gross margin of approximately 21 percent to 22 percent and diluted net income
per share of $0.24 to $0.28, reflecting a higher GAAP average tax rate of 33%
to 34% in 2008.
(2) For the second quarter of 2008, we expect the Components business
segment to generate GAAP revenue of $95 million to $100 million and gross
margin of approximately 28 percent to 29 percent and the Systems business
segment to generate GAAP revenue of $235 million to $250 million and gross
margin of approximately 18.5 percent to 19.5 percent.
Forward-Looking Statements
This press release contains forward-looking statements within the meaning
of the Private Securities Litigation Reform Act of 1995, Section 27A of the
Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934.
Forward-looking statements are statements that do not represent historical
facts. The company uses words and phrases such as "will," "to serve," "to
meet," intend," "expected," "believe," "plan," "expect," "to achieve," "to
realize," "to increase," and similar expressions to identify forward-looking
statements. Forward-looking statements in this press release include, but are
not limited to, the company's plans and expectations regarding (a) the
company's first meaningful reduction in average silicon cost, during the
second fiscal quarter of 2008, contributing to the company's estimated 510 to
610 basis point improvement in Component segment's gross margin; (b)
SunPower's market leadership continuing to be driven through the company's
focus on brand, technology, cost and people; (c) the company's vertical
integration strategy providing visibility and flexibility to serve a variety
of end-markets, responding quickly to both new market opportunities as well as
risks; (d) the company meeting the needs of the market with industry-leading
solar technology across the entire customer spectrum; (e) the company
leveraging its proprietary technology by aggressively expanding its solar cell
production by more than 150% in 2008 compared to 2007; (f) unit cost reduction
being driven by scale, combined with lower silicon costs, higher efficiencies,
thinner wafers and on-going quality and cost improvements in the company's
factories; (g) capacity ramp at Fab 2 completing by the end of 2009; (h) 100%
of solar cell lines using thinner wafers by year-end 2008; (i) 100% of the
company's solar cell production being secured with contracted silicon through
2010; (j) the company's future silicon supply expectations and capacity
expansion plans, (k) the company's silicon supply costs declining by
approximately 10% during 2008 compared to 2007; (l) cost improvements
amplifying the company's silicon utilization benefits achieved through higher
cell efficiency and thinner wafers; (m) the company's achieving its planned
improvements in its cost structure; (n) the company reaching its target
financial model of 30% gross margin, 10% operating expenses and 20% operating
margin, on a non-GAAP basis, no later than the first quarter of 2009; (o) the
company realizing its mission of reducing installed systems costs by 50% by
2012; (p) the company achieving certain GAAP and non-GAAP results, including
(1) total revenue and diluted net income per share for fiscal year 2008, (2)
total revenue for fiscal year 2009, (3) total revenue, gross margin, and
diluted net income per share for the second quarter of fiscal year 2008, (4)
the average tax rate for 2008, and (5) Components segment and Systems segment
revenue and gross margin for the second quarter of fiscal year 2008; and (q)
the Components segment benefiting from the continued manufacturing ramp of the
company's next-generation technology and lower silicon cost and the Systems
segment benefiting from an increase in allocation of SunPower panels to the
segment during the second quarter of fiscal year 2008. These forward-looking
statements are based on information available to the company as of the date of
this release and management's current expectations, forecasts and assumptions,
and involve a number of risks and uncertainties that could cause actual
results to differ materially from those anticipated by these forward-looking
statements. Such risks and uncertainties include a variety of factors, some of
which are beyond the company's control. In particular, risks and uncertainties
that could cause actual results to differ include (i) the company's ability to
obtain a adequate supply of polysilicon, ingots and wafers to manufacture its
products and the price it pays for such materials; (ii) business and economic
conditions and growth trends in the solar power industry; (iii) the
continuation of governmental and related economic incentives promoting the use
of solar power; (iv) increases in the available supply of third party solar
panels, (v) the continued availability of third-party financing arrangements
for the company's customers; (vi) the company's ability to ramp new production
lines and realize expected manufacturing efficiencies; (vii) unforeseen
manufacturing equipment delays at the company's fabrication facilities and
panel factories; (viii) the company's ability to utilize thinner wafers,
reduce kerf loss and otherwise achieve anticipated improvements in polysilicon
usage efficiency; (ix) production difficulties that could arise; (x) the
success of the company's ongoing research and development efforts; (xi) the
company's ability to compete with other companies and competing technologies;
(xii) the potential renegotiation of or non-performance by parties to the
company's supply and customer contracts; (xiii) the price and availability of
third-party cells and solar panels; (xiv) liquidated damages or customer
refunds for late installations arising on large scale solar projects (xv)
unanticipated changes in the mix of balance of systems sales; and (xvi) other
risks described in the company's Annual Report on Form 10-K for the year ended
December 30, 2007, and other filings with the Securities and Exchange
Commission. These forward-looking statements should not be relied upon as
representing the company's views as of any subsequent date, and the company is
under no obligation to, and expressly disclaims any responsibility to, update
or alter its forward-looking statements, whether as a result of new
information, future events or otherwise.
Non-GAAP Measures
To supplement the consolidated financial results prepared under GAAP,
SunPower uses non-GAAP measures which are adjusted from the most directly
comparable GAAP results to exclude items related to stock-based compensation,
amortization of intangible assets, impairment of long-lived assets, fair value
adjustments to deferred revenue, purchased in-process research and development
expenses, write-off of unamortized debt issuance costs, and their related tax
effects. Management does not consider these charges in evaluating the core
operational activities of SunPower. Management uses these non-GAAP measures
internally to make strategic decisions, forecast future results and evaluate
SunPower's current performance. Most analysts covering SunPower use the non-
GAAP measures as well. Given management's use of these non-GAAP measures,
SunPower believes these measures are important to investors in understanding
SunPower's current and future operating results as seen through the eyes of
management. In addition, management believes these non-GAAP measures are
useful to investors in enabling them to better assess changes in SunPower's
core business across different time periods. These non-GAAP measures are not
in accordance with or an alternative for GAAP financial data and may be
different from non-GAAP measures used by other companies.
Fiscal Periods
SunPower operates on a fiscal calendar comprised of four thirteen-week
quarters that end at midnight Pacific Time on the Sunday nearest the calendar
quarter-end.
SunPower is a registered trademark of SunPower Corp. Cypress is a
registered trademark of Cypress Semiconductor Corp. All other trademarks are
the property of their respective owners.

SUNPOWER CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)

(Unaudited)

Mar. 30, Dec. 30,
2008 2007

ASSETS

Cash and cash equivalents $132,522 $285,214
Restricted cash 123,437 67,887
Investments 101,367 134,503
Accounts receivable, net 159,083 138,250
Costs and estimated earnings
in excess of billings 61,675 39,136
Inventories 188,203 140,504
Deferred project costs 7,101 8,316
Prepaid expenses and other assets 88,570 65,084
Advances to suppliers 164,678 161,220
Property, plant and equipment, net 420,124 377,994
Goodwill and other intangible assets, net 245,185 235,630

Total assets $1,691,945 $1,653,738

LIABILITIES AND STOCKHOLDERS' EQUITY

Accounts payable $152,558 $119,869
Accrued and other liabilities 114,743 105,476
Convertible debt 425,000 425,000
Billings in excess of costs and
estimated earnings 28,251 69,900
Customer advances 69,810 69,403
Total liabilities 790,362 789,648
Stockholders' equity 901,583 864,090

Total liabilities and stockholders' equity $1,691,945 $1,653,738

SUNPOWER CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)

(Unaudited)

THREE MONTHS ENDED
Mar. 30, Apr. 1, Dec. 30,
2008 2007 2007

Revenue
Systems $178,851 $78,495 $123,912
Components 94,850 63,852 100,431

273,701 142,347 224,343

Cost of systems revenue 143,213 62,443 97,416
Cost of components revenue 77,168 47,479 79,745

220,381 109,922 177,161

Gross margin 53,320 32,425 47,182

Operating expenses:
Research and development 4,642 2,936 3,904
Selling, general and administrative 33,858 22,371 32,068
Purchased in-process research and
development -- 9,575 --

Total operating expenses 38,500 34,882 35,972

Operating income (loss) 14,820 (2,457) 11,210

Interest and other income (expense), net 2,970 1,139 (3,825)

Income (loss) before income taxes 17,790 (1,318) 7,385

Income tax provision (benefit) 5,033 (2,558) 2,509

Net income $12,757 $1,240 $4,876

Net income per share:
- Basic $0.16 $0.02 $0.06
- Diluted $0.15 $0.02 $0.06

Shares used in calculation of
net income per share:
- Basic 78,965 73,732 78,164
- Diluted 83,661 79,126 85,588

(In thousands, except per share data)
THREE MONTHS ENDED
Mar. 30, Apr. 1, Dec. 30,
2008 2007 2007
(Presented on a GAAP Basis)
Gross margin $53,320 $32,425 $47,182
Operating income (loss) 14,820 (2,457) 11,210
Net income per share:
-Basic 0.16 0.02 0.06
-Diluted 0.15 0.02 0.06

THREE MONTHS ENDED
Mar. 30, Apr. 1, Dec. 30,
2008 2007 2007
(Presented on a non-GAAP Basis)*
Gross margin $65,735 $41,577 $56,731
Operating income (loss) 39,134 25,465 32,357
Net income per share:
-Basic 0.41 0.32 0.43
-Diluted 0.39 0.29 0.39

About SunPower's Non-GAAP Financial Measures
To supplement its consolidated financial results presented in accordance
with GAAP, SunPower uses non-GAAP measures which are adjusted from the most
directly comparable GAAP results to exclude non-cash items related to stock-
based compensation expenses, amortization of intangibles, impairment of long-
lived assets, fair value adjustments to deferred revenue, purchased in-process
research and development expenses, write-off of unamortized debt issuance
costs, and their related tax effects. The non-GAAP adjustments included
herein are primarily the result of our acquisition of SunPower Corporation,
Systems or SP Systems (formerly known as PowerLight Corporation) on January
10, 2007. The specific non-GAAP measures listed below are gross margin,
operating income and net income per share. Management believes that each of
these non-GAAP measures (gross margin, operating income and net income per
share) are useful to investors by enabling them to better assess changes in
each of these key elements of SunPower's results of operations across
different reporting periods on a consistent basis, independent of these non-
cash items. Thus, each of these non-GAAP financial measures provides investors
with another method for assessing SunPower's operating results in a manner
that is focused on its ongoing core operating performance, absent the effects
of purchase accounting, stock-based compensation charges, impairment of long-
lived assets and write-off of unamortized debt issuance costs. Management also
uses these non-GAAP measures internally to assess the business and financial
performance of current and historical results, for strategic decision making,
forecasting future results and evaluating the Company's current performance.
Many of the analysts covering SunPower also use these non-GAAP measures in
their analyses. These non-GAAP measures are not in accordance with or an
alternative for GAAP financial data, the non-GAAP results should be reviewed
together with the GAAP results and are not intended to serve as a substitute
for results under GAAP, and may be different from non-GAAP measures used by
other companies.
o Non-GAAP gross margin. The use of this non-GAAP financial measure
allows management to evaluate the gross margin of the company's core
businesses and trends across different reporting periods on a consistent
basis, independent of non-cash items including stock-based compensation
expenses, amortization of intangibles, impairment of long-lived assets and
fair value adjustments to deferred revenue. In addition, it is an
important component of management's internal performance measurement
process as it is used to assess the current and historical financial
results of the business, for strategic decision making, preparing budgets
and forecasting future results. Management presents this non-GAAP
financial measure to enable investors and analysts to evaluate our revenue
generation performance relative to the direct costs of revenue of
SunPower's core businesses.

o Non-GAAP operating income. The use of this non-GAAP financial measure
allows management to evaluate the operating results of the Company's core
businesses and trends across different reporting periods on a consistent
basis, independent of non-cash items including stock-based compensation
expenses, amortization of intangibles, impairment of long-lived assets,
and all other purchase accounting charges. In addition, it is an important
component of management's internal performance measurement process as it
is used to assess the current and historical financial results of the
business, for strategic decision making, preparing budgets and forecasting
future results. Management presents this non-GAAP financial measure to
enable investors and analysts to understand the results of operations of
the Company's core businesses and to compare our results of operations on
a more consistent basis against that of other companies in our industry.

o Non-GAAP net income per share. Management presents this non-GAAP
financial measure to enable investors and analysts to assess the Company's
operating results and trends across different reporting periods on a
consistent basis, independent of non-cash items including stock-based
compensation expenses, amortization of intangibles, impairment of
long-lived assets, write-off of unamortized debt issuance costs, all other
purchase accounting charges and the tax effects of these non-GAAP
adjustments. In addition, investors and analysts can compare the Company's
operating results on a more consistent basis against that of other
companies in our industry.

Non-Cash Items
o Stock-based compensation. Stock-based compensation relates primarily to
SunPower stock awards such as stock options and restricted stock.
Stock-based compensation is a non-cash expense that varies in amount from
period to period and is dependent on market forces that are difficult to
predict. As a result of this unpredictability, management excludes this
item from its internal operating forecasts and models. Management believes
that non-GAAP measures adjusted for stock-based compensation provide
investors with a basis to measure the company's core performance against
the performance of other companies without the variability created by
stock-based compensation.

o Amortization of intangibles. SunPower incurs amortization of
intangibles as a result of Cypress acquiring the company in November 2004,
in which Cypress' cost of purchased technology, patents, trademarks and a
distribution agreement is reflected in our financial statements. In
addition, SunPower incurs amortization of intangibles as a result of our
acquisitions, which includes purchased technology such as existing
technology, patents, brand names and trademarks. SunPower excludes these
items because these expenses are not reflective of ongoing operating
results in the period incurred. These amounts arise from prior
acquisitions and have no direct correlation to the operation of SunPower's
core businesses.

o Impairment of long-lived assets. SunPower incurred an impairment of
long-lived assets in the first quarter of fiscal 2008, which relates to
the discontinuation of our imaging detector product line and for the
write-off of certain solar manufacturing equipment which became obsolete
due to new processes. SunPower excluded this item because the expense is
not reflective of its ongoing operating results in the period incurred.
Excluding this data provides investors with a basis to compare the
company's performance against the performance of other companies without
non-cash expenses such as impairment of long-lived assets.

o Purchase accounting charges. Purchase accounting charges as a result of
prior acquisitions include: (1) amortization of intangibles, which
includes purchased technology related to acquisitions such as existing
technology, patents, brand names and trademarks; (2) fair value
adjustments to deferred revenue, which is an acquisition-related
adjustment that results in certain revenues never being recognized under
GAAP by either the acquiring company or the company being acquired and (3)
purchased in-process research and development expenses, which relates to
projects in process as of the acquisition date that have not reached
technological feasibility and are immediately expensed. These
acquisition-related charges are not factored into management's evaluation
of potential acquisitions or its performance after completion of
acquisitions, because they are not related to our core operating
performance, and the frequency and amount of such charges can vary
significantly based on the size and timing of acquisitions and the
maturities of the businesses being acquired. Excluding this data provides
investors with a basis to compare SunPower's performance against the
performance of other companies without the variability caused by purchase
accounting.

o Write-off of unamortized debt issuance costs. The market price trigger
condition was met for our senior convertible debentures in late December
2007, giving holders of the convertible debt the right to convert the
convertible debt in the first quarter of fiscal 2008. As a result,
SunPower accelerated the amortization of deferred debt issuance costs.
Excluding this non-cash charge provides investors with a basis to compare
SunPower's period-over-period operating results because the charge is not
reflective of SunPower's historical results or its expected future
expenses after such costs were fully amortized on January 2, 2008.

o Tax effect. This amount is used to present each of the amounts
described above on an after-tax basis with the presentation of non-GAAP
net income per share.

For more information on these non-GAAP financial measures, please see the
tables captioned "Reconciliations of GAAP results of operations measures to
non-GAAP measures" set forth at the end of this release and which should be
read together with the preceding financial statements prepared in accordance
with GAAP.

SUNPOWER CORPORATION
RECONCILIATIONS OF GAAP MEASURES TO NON-GAAP MEASURES
(Unaudited)
(In thousands, except per share data)

STATEMENT OF OPERATIONS DATA:
THREE MONTHS ENDED
Mar. 30, Apr. 1, Dec. 30,
2008 2007 2007

GAAP gross margin $53,320 $32,425 $47,182
Fair value adjustment to deferred revenue -- 833 --
Amortization of intangible assets 3,212 6,069 6,185
Stock-based compensation expense 3,714 2,250 3,364
Impairment of long-lived assets 5,489 -- --
Non-GAAP gross margin $65,735 $41,577 $56,731

GAAP operating income (loss) $14,820 $(2,457) $11,210
Fair value adjustment to deferred revenue -- 833 --

Amortization of intangible assets 4,317 6,911 7,132
Stock-based compensation expense 14,508 10,603 14,015
Impairment of long-lived assets 5,489 -- --

Purchased in-process research
and development -- 9,575 --

Non-GAAP operating income $39,134 $25,465 $32,357

NET INCOME PER SHARE:
THREE MONTHS ENDED
Mar. 30, Apr. 1, Dec. 30,
2008 2007 2007

Basic:

GAAP net income per share $0.16 $0.02 $0.06
Reconciling items:
Stock-based compensation expense 0.18 0.15 0.18
Impairment of long-lived assets 0.07 -- --

Purchase accounting:
Fair value adjustment to deferred revenue -- 0.01 --
Amortization of intangible assets 0.06 0.09 0.09
Purchased in-process research
and development -- 0.13 --

Write-off of unamortized debt issuance costs 0.01 -- 0.11
Tax effect (0.07) (0.08) (0.01)
Non-GAAP net income per share $0.41 $0.32 $0.43

Diluted:
GAAP net income per share $0.15 $0.02 $0.06
Reconciling items:
Stock-based compensation expenses 0.18 0.12 0.16
Impairment of long-lived assets 0.07 -- --

Purchase accounting:
Fair value adjustment to deferred revenue -- 0.01 --

Amortization of intangible assets 0.05 0.09 0.08
Purchased in-process research
and development -- 0.12 --
Write-off of unamortized debt issuance costs 0.01 -- 0.10
Tax effect (0.07) (0.07) (0.01)

Non-GAAP net income per share $0.39 $0.29 $0.39

Shares used in calculation of GAAP
net income per share:
- Basic 78,965 73,732 78,164
- Diluted 83,661 79,126 85,588

Shares used in calculation of non-GAAP
net income per share:
-Basic 78,965 73,732 78,164
-Diluted 83,661 79,126 85,588

The following supplemental data represents the individual charges and
credits that are excluded from SunPower's non-GAAP financial measures for each
period presented in the Condensed Consolidated Statements of Operations
contained herein.

SUPPLEMENTAL DATA
(In thousands)

THREE MONTHS ENDED

March 30, 2008
Selling Other Interest
Research general Aqui- and Income
Gross Margin and and sition other tax
Compo- develo- admini- Related income, provision
Systems nents pment strative Charges net (benefit)

Amortization
of
intangible
assets $2,168 $1,044 $ -- $1,105 $-- $-- $--
Stock-based
compensation
expense 2,511 1,203 811 9,983 -- -- --
Impairment of
long-lived
assets 1,343 4,146 -- -- -- -- --
Write-off of
unamortized
debt issuance
costs -- -- -- -- -- 972 --
Tax effect -- -- -- -- -- -- (5,483)
$6,022 $6,393 $811 $11,088 $-- $972 $(5,483)

April 1, 2007
Selling Other Interest
Research general Aqui- and Income
Gross Margin and and sition other tax
Compo- develo- admini- Related income, provision
Systems nents pment strative Charges net (benefit)
Fair value
adjustment
to deferred
revenue $833 $-- $-- $-- $-- $-- $--
Amortization
of intangible
assets 4,946 1,123 -- 842 -- -- --
Stock-based
compensation
expense 1,997 253 501 7,852 -- -- --
Purchased
in-process
research
and
development -- -- -- -- 9,575 -- --
Tax effect -- -- -- -- -- -- (5,884)
$7,776 $1,376 $501 $8,694 $9,575 $-- $(5,884)

December 30, 2007
Selling Other Interest
Research general Aqui- and Income
Gross Margin and and sition other tax
Compo- develo- admini- Related income, provision
Systems nents pment strative Charges net (benefit)
Amortization
of
intangible
assets $4,788 $1,397 $-- $947 $-- $-- $--
Stock-based
compensation
expense 1,952 1,412 564 10,087 -- -- --
Write-off of
unamortized
debt issuance
costs -- -- -- -- -- 8,260 --
Tax effect -- -- -- -- -- -- (993)
$6,740 $2,809 $564 $11,034 $-- $8,260 $(993)

SOURCE SunPower Corporation

Bob Okunski, +1-408-240-5447, or Manny Hernandez, +1-408-240-5560, both of
SunPower Corporation