Fourth Quarter 2008 and Fiscal Year 2009 Guidance Adjusted
SAN JOSE, Calif., Nov. 4 /PRNewswire-FirstCall/ -- SunPower Corporation
(Nasdaq: SPWRA, SPWRB) today announced that substantial strengthening of the
U.S. dollar relative to the Euro during the fourth quarter is expected to
reduce earnings growth in the current quarter and fiscal year 2009.
SunPower has historically operated under a hedging policy to minimize its
exposure to changes in the foreign exchange rate between the U.S. dollar and
other currencies. In connection with its global tax planning the company
recently changed the functional currency of certain European subsidiaries from
dollars to Euros, resulting in greater exposure to changes in the value of the
Euro. Implementation of this tax strategy had, and will continue to have, the
ancillary effect of limiting SunPower's ability to hedge certain
Euro-denominated revenue. As a result of the U.S. dollar's recent substantial
appreciation relative to the Euro, the company became under-hedged during the
fourth quarter of 2008 and for the fiscal year 2009. SunPower believes that
it has adjusted its hedging positions to limit its net income exposure to
currency fluctuations and believes that it will be hedged for 80 to 90 percent
of Euro-denominated net income in the fourth quarter of 2008 and more than
50 percent for the first three quarters of 2009.
The aggregate foreign exchange impact on fourth quarter results is
expected to be approximately $17 million on revenue, $15 million on GAAP and
non-GAAP gross profit and $0.15 on non-GAAP net income per share. For the
fiscal year 2009 the company anticipates the impact to be approximately
$50 million in revenue and $0.50 on non-GAAP net income per share.
These adjustments reflect only the impact of exceptional foreign exchange
fluctuations. Excluding these adjustments, SunPower's previously announced
guidance for the fourth quarter of 2008 and fiscal year 2009 remains
unchanged. The company expects the foreign exchange impact to be weighted
significantly toward its Components business segment.
SunPower expects fourth quarter 2008 total revenue of $388 million to
$418 million, company non-GAAP gross margin of 25 percent to 26 percent and
non-GAAP diluted net income per share of $0.58 to $0.65.(1) For 2009, the
company expects total revenue of $2.0 billion to $2.1 billion and non-GAAP
diluted net income per share of at least $3.00.(2)
About SunPower Corporation
SunPower Corporation (Nasdaq: SPWRA, SPWRB) 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, Australia, and Asia. For more information, visit
http://www.sunpowercorp.com.
(1) For the fourth quarter of 2008, SunPower expects the following total
company GAAP results: revenue of $388 million to $418 million, gross
margin of 24 percent to 25 percent and diluted net income per share
of $0.24 to $0.31.
(2) For the fiscal year 2009, SunPower expects the following total
company GAAP results: revenue of $2.0 billion to $2.1 billion and
diluted net income per share of at least $1.68.
Forward-Looking Statement
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 and the assumptions underlying or relating to these statements. The
company uses words and phrases such as "expect," "will," "guidance,"
"believes," "anticipates," 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
reduction in earnings growth in the current quarter caused by substantial
strengthening in the U.S. dollar relative to the Euro during the fourth
quarter and fiscal year 2009; (b) the adequacy of the adjustments in its
hedging positions to limit its net income exposure to currency fluctuations;
(c) the percentages of Euro-denominated net income in the fourth quarter of
2008 and for the first three quarters of 2009; (d) the aggregate foreign
exchange impact on the fourth quarter being $17 million on revenue, $15
million on gross profit and $0.15 on non-GAAP net income per share; (e) the
foreign exchange impact of approximately $50 million in revenue and $0.50 on
non-GAAP income per share for 2009; (f) the company achieving certain GAAP and
non-GAAP results, including (1) total revenue and diluted net income per share
for fiscal year 2009 and (2) total revenue, gross margin percentage, and
diluted net income per share for the fourth quarter of fiscal year 2008; and
(g) the Company's expectation that the foreign exchange impact will be
weighted significantly toward its components business segment. 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 and maintain an adequate supply
of polysilicon, ingots, wafers and other materials, components and products to
manufacture its component products and design and construct its systems, as
well as the price it pays for such materials, components and products; (ii)
business and economic conditions, including the current uncertain economic
environment and credit crisis, and growth trends in the solar power industry;
(iii) the continuation of governmental and related economic incentives
promoting the use of solar power; (iv) the continued availability of
third-party financing arrangements for the company's customers; (v)
construction difficulties or potential delays in the project implementation
process, including transmission access and upgrades; (vi) unanticipated delays
or difficulties securing necessary permits, licenses or other governmental
approvals; (vii) the risk of continuation of supply of products and components
from suppliers; (viii) unanticipated problems with deploying the system on the
sites; (ix) the company's ability to ramp new production lines and realize
expected manufacturing efficiencies; (x) unforeseen manufacturing equipment
delays at the company's fabrication facilities and panel factories; (xi) the
company's ability to utilize thinner wafers, reduce kerf loss and otherwise
achieve anticipated improvements in polysilicon usage efficiency; (xii)
production difficulties that could arise; (xiii) the success of the company's
ongoing research and development efforts; (xiv) the company's ability to
compete with other companies and competing technologies; (xv) liquidated
damages or customer refunds for late installations arising on large scale
solar projects (xvi) unanticipated changes in the mix of balance of systems
sales; (xvii) the company's ability to successfully transition to its new ERP
and accounting system and the potential impact of such on its operations and
financial results; (xviii) currency fluctuations in the Euro, Philippine peso
or the South Korean won relative to the U.S. dollar; (xix) the risk that our
current and future hedging policies and hedges will not protect us adequately
against the effect of currency fluctuations; and (xx) other risks described in
the company's Quarterly Report on Form 10-Q for the quarter ended
June 29, 2008, 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
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 and their related tax
effects. Management does not consider these charges in evaluating the core
operational activities of SunPower. The specific non-GAAP measures we use in
this press release are gross margin and net income per share. 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.
-- 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 and amortization of intangible assets. 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.
-- 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 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
-- 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.
-- Amortization of intangibles. 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.
-- Tax effects. 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.
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. All other trademarks
are the property of their respective owners.
SOURCE SunPower Corporation
Bob Okunski, +1-408-240-5447, Bob.okunski@sunpowercorp.com, or Helen Kendrick,
+1-408-240-5585, hkendrick@sunpowercorp.com, both of SunPower Corporation
