SunPower Reports Fourth-Quarter, Year-End 2009 Results

SAN JOSE, Calif., March 18, 2010 /PRNewswire via COMTEX News Network/ -- SunPower Corp. (Nasdaq: SPWRA, SPWRB) today announced financial results for its 2009 fourth quarter and fiscal year 2009 which ended January 3, 2010. Revenue for the 2009 fourth quarter was $548 million which compares to $465 million in the third quarter of 2009 and $398 million in the fourth quarter of 2008. The company's Components and Systems segments accounted for 62% and 38% of fourth-quarter 2009 revenue, respectively. The company also issued a press release reporting the results of its audit committee investigation concurrent with this release.

"Our 2009 year-end results reflect the continued success of our portfolio strategy to channels and geographic markets as we further expanded our global dealer presence and completed construction of more than 40 megawatts (MW) of large scale power plant projects during the fourth quarter," said Tom Werner, SunPower's CEO. "In the past four years, we have invested heavily in our long-term strategy of building our brand and channel, and this investment continues to pay off. In the residential channel, our strong brand enabled us to double the number of dealer partners in 2009 and we are selling our high-efficiency systems to approximately 1,000 dealer partners in eight countries. Additionally, as a result of our rapid growth and expanding customer base, we have started to re-align our business units into Residential and Commercial (R&C) and Utilities and Power Plants (UPP). As part of this strategy, we have appointed Jim Pape, former vice president of North America for Trane Commercial Systems, to lead our R&C business group. With more than 25 years of management experience, we are excited to have Jim join the team.

"In the systems segment, we added to our industry-leading installed base by delivering on our engineering, procurement and construction (EPC) commitments, installing more than 100 MW of rooftop and ground mounted systems in 2009. In the fourth quarter, we completed the largest Italian photovoltaic (PV) power plant to date at 24 MW, installed 10 MW for Florida Power & Light at the Kennedy Space Center, and substantially completed our 8- MW project for Exelon in Chicago. We are also encouraged by the continued improvement in credit conditions as evidenced by the recent financing of our 19-MW project with Xcel Energy in Colorado.

"Additionally, our global UPP pipeline continues to grow as customers are choosing SunPower for our industry-leading technology, bankability, significant EPC experience, and ability to offer a competitive levelized cost of energy. With the acquisition of SunRay Renewable Energy, we will significantly increase our demand visibility by adding more than 1,200 MW of Europe, Middle East and Africa (EMEA) power plant opportunities to our pipeline with more than 80 MW planned for delivery in Italy in 2010. This acquisition of the premiere European developer and financing team complements our established European team, enabling us to offer our customers a world-class utility power plant development expertise in both the United States and Europe. Looking forward, we see demand remaining strong for 2010 across all segments. Our recent wins with Toshiba and Southern California Edison position us well for multi-year supply agreements in our UPP business on top of our continued success in R&C," Werner concluded.

On a Generally Accepted Accounting Principles (GAAP) basis for the 2009 fourth quarter, SunPower reported gross margin of 20.3%, operating income of $43.0 million and net income per diluted share of $0.09. This compares to gross margin of 21.5%, operating income of $46.2 million and net income per diluted share of $0.20 in the third quarter of 2009. As a result of the restatement, the fourth quarter of 2009 includes a $2.6 million benefit, or $0.02 earnings per share. The company's fourth-quarter GAAP results include $3.6 million, or $0.03 per diluted share, in expenses related to its recently completed accounting investigation.

On a non-GAAP basis for the fourth quarter of 2009, SunPower reported a total gross margin of 21.7%. Operating income for the quarter was $60.3 million and net income per share was $0.47. The company's fourth-quarter non-GAAP results include $3.6M million, or $0.03 per diluted share, in expenses related to the completed accounting investigation. As a result of the restatement, the fourth quarter of 2009 includes a $2.6 million benefit, or $0.02 earnings per share. In the third quarter 2009, the company reported non-GAAP gross margin of 23.1%, operating income of $63.8 million and $0.46 net income per share. For the 2009 fourth quarter, the Components segment non-GAAP gross margin was 21.5% and Systems segment gross margin was 21.9%. Non-GAAP figures are reconciled to the closest GAAP equivalent categories in the financial attachment of this press release.

"We improved our working capital efficiency during the fourth quarter reducing inventories by 12%, generating positive operating cash flow and ending the year with more than $925 million in cash and investments," said Dennis Arriola, SunPower's CFO. "Despite the difficult industry conditions in the first half of 2009, we grew revenue by 6% versus 2008. With the completion of the audit committee investigation, our efforts will focus on strengthening the trust with our stakeholders, customers and employees while driving increased shareholder value.

"Looking forward, our acquisition of SunRay positions us for more predictable growth in the second half of 2010 and into 2011. By extending into the development business, we expect to expand our gross profits as we monetize these power plants. We will strategically use our balance sheet to accelerate the development of these projects. This strategy will significantly shift the timing of revenue of these projects from the first half of the year to the second half of 2010," concluded Arriola.

2010 Guidance

For fiscal year 2010, the company's non-GAAP guidance is as follows: revenue of $2.0 billion to $2.25 billion, net income per diluted share of $1.25 to $1.65, capital expenditures of $375 million to $475 million, and solar cell production of approximately 550 MW. For fiscal year 2010, the company's GAAP guidance is as follows: revenue of $2.00 billion to $2.25 billion and net income per diluted share of $0.05 to $0.35.

For the first quarter of 2010, the company's non-GAAP guidance is as follows: revenue of $330 million to $350 million and net income per diluted share of approximately $0.05. Guidance for the first quarter of 2010 includes the negative impact of $3.3 million or $0.03 per diluted share in SunRay acquisition costs and $5.3 million or $0.04 per diluted share in costs associated with the company's accounting investigation.

For the first quarter of 2010, the company's GAAP guidance is as follows: revenue of $330 million to $350 million and net income per diluted share of approximately breakeven. Guidance includes the negative impact from the company's accounting investigation and SunRay acquisition referenced above.

This press release contains both GAAP and non-GAAP financial information. Non-GAAP 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 2009 performance on the Events and Presentations section of the SunPower Investor Relations page at http://investors.sunpowercorp.com/events.cfm . The capacity of power plants in this release is described in approximate MW on an alternating current (ac) basis while supply agreements are expressed in direct current (dc).

About SunPower

Founded in 1985, SunPower Corp. (Nasdaq: SPWRA, SPWRB) designs, manufactures and delivers the planet's most powerful solar technology broadly available today. Residential, business, government and utility customers rely on the company's experience and proven results to maximize return on investment. With headquarters in San Jose, Calif., SunPower has offices in North America, Europe, Australia and Asia. For more information, visit www.sunpowercorp.com .