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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended July 3, 2022

OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number: 001-34166


spwr-20220703_g1.gif
SunPower Corporation
(Exact Name of Registrant as Specified in Its Charter)

Delaware94-3008969
(State or Other Jurisdiction of Incorporation or Organization)(I.R.S. Employer Identification No.)
51 Rio RoblesSan JoseCalifornia95134
(Address of Principal Executive Offices)(Zip Code)

(408) 240-5500
(Registrant's Telephone Number, Including Area Code)

_________________________________________

Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading SymbolName of exchange on which registered
Common Stock, $0.001 par value per shareSPWRThe Nasdaq Stock Market LLC

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Sections 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes  x    No  o

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes  x    No  o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large accelerated filer Accelerated filer
Emerging growth company Non-accelerated filer
Smaller reporting company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.   o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes  ☐ No  x

The total number of outstanding shares of the registrant’s common stock as of July 29, 2022 was 174,092,855.

1

SunPower Corporation
Form 10-Q for the quarterly period ended July 3, 2022



2

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS


SunPower Corporation
Condensed Consolidated Balance Sheets
(In thousands, except share par values)
(unaudited)

 July 3, 2022January 2, 2022
Assets
Current assets:
Cash and cash equivalents$206,355 $123,735 
Restricted cash and cash equivalents, current portion2
1,024 691 
Short-term investments293,580 365,880 
Accounts receivable, net1
149,166 121,268 
Contract assets30,358 25,994 
Inventories222,524 214,432 
Advances to suppliers, current portion2,216 462 
Prepaid expenses and other current assets1
166,364 100,212 
Current assets of discontinued operations1
 120,792 
Total current assets1,071,587 1,073,466 
Restricted cash and cash equivalents, net of current portion2
21,270 14,887 
Property, plant and equipment, net50,675 33,560 
Operating lease right-of-use assets28,809 31,654 
Solar power systems leased, net43,510 45,502 
Goodwill126,338 126,338 
Other intangible assets, net24,401 24,879 
Other long-term assets1
169,882 156,994 
Long-term assets of discontinued operations 47,526 
Total assets$1,536,472 $1,554,806 
Liabilities and Equity  
Current liabilities:  
Accounts payable1
$148,147 $138,514 
Accrued liabilities1
155,273 101,980 
Operating lease liabilities, current portion10,506 10,753 
Contract liabilities, current portion1
102,778 62,285 
Short-term debt62,089 109,568 
Convertible debt, current portion1
424,298  
Current liabilities of discontinued operations1
 86,496 
Total current liabilities903,091 509,596 
Long-term debt54,130 380 
Convertible debt, net of current portion1
 423,677 
Operating lease liabilities, net of current portion23,544 28,566 
Contract liabilities, net of current portion18,674 18,705 
Other long-term liabilities1
117,942 141,197 
Long-term liabilities of discontinued operations1
 42,661 
Total liabilities1,117,381 1,164,782 
Commitments and contingencies (Note 9)
Equity:  
Preferred stock, $0.001 par value; 10,000 shares authorized; none issued and outstanding as of July 3, 2022 and January 2, 2022
  
Common stock, $0.001 par value, 367,500 shares authorized; 188,011 shares issued and 174,081 shares outstanding as of July 3, 2022; 186,452 shares issued and 173,051 shares outstanding as of January 2, 2022
174 173 
Additional paid-in capital2,840,028 2,714,500 
Accumulated deficit(2,213,195)(2,122,212)
Accumulated other comprehensive income11,139 11,168 
Treasury stock, at cost: 13,931 shares of common stock as of July 3, 2022; 13,401 shares of common stock as of January 2, 2022
(224,829)(215,240)
Total stockholders' equity413,317 388,389 
Noncontrolling interests in subsidiaries5,774 1,635 
Total equity419,091 390,024 
Total liabilities and equity$1,536,472 $1,554,806 

1 We have related-party balances for transactions made with TotalEnergies SE and its affiliates, Maxeon Solar Technologies, Ltd. (“Maxeon Solar”), and unconsolidated entities in which we have a direct equity investment. These related-party balances are recorded within the “accounts receivable, net,” “prepaid expenses and other current assets,” “other long-term assets,” “accounts payable,” “accrued liabilities,” “convertible debt, current portion,” “contract liabilities, current portion,” “convertible debt, net of current portion,” “other long-term liabilities,” “current assets of discontinued operations,” “current liabilities of discontinued operations,” and “long-term liabilities of discontinued operations” financial statement line items on our condensed consolidated balance sheets (see Note 3, Note 9, Note 10, Note 11, and Note 12).

2 Amounts included in the “Restricted cash and cash equivalents, current portion” and “Restricted cash and cash equivalents, net of current portion” financial statement line items on our condensed consolidated balance sheets include cash balances set aside for various financial obligations including loans, distributions, letter of credit facilities, and other projects’ related cash transactions.


The accompanying notes are an integral part of these condensed consolidated financial statements.
3


SunPower Corporation
Condensed Consolidated Statements of Operations
(In thousands, except per share data)
(unaudited)

 Three Months EndedSix Months Ended
 July 3, 2022July 4, 2021July 3, 2022July 4, 2021
Total revenues1
$417,772 $260,751 $768,049 $500,887 
Total cost of revenues336,273 200,040 614,241 394,210 
Gross profit81,499 60,711 153,808 106,677 
Operating expenses:
Research and development1
7,405 4,258 12,415 8,882 
Sales, general, and administrative1
93,043 49,478 170,039 91,745 
Restructuring (credits) charges(494)808 133 4,574 
(Gain) loss on sale and impairment of residential lease assets (68) (294)
(Gain) loss on business divestitures, net (5,290) (5,290)
(Income) expense from transition services agreement, net1
(494)(1,656)(228)(4,743)
 Total operating expenses99,460 47,530 182,359 94,874 
Operating (loss) income(17,961)13,181 (28,551)11,803 
Other (expense) income, net:
Interest income92 73 134 125 
Interest expense1
(5,964)(6,630)(11,008)(13,657)
Other, net(14,652)84,075 (13,208)39,560 
Other (expense) income, net(20,524)77,518 (24,082)26,028 
(Loss) income from continuing operations before income taxes(38,485)90,699 (52,633)37,831 
(Provision for) benefits from income taxes(3,226)(3,594)8,417 1,532 
Net (loss) income from continuing operations(41,711)87,105 (44,216)39,363 
(Loss) income from discontinued operations before income taxes1
(20,857)(13,505)(47,155)(15,359)
Benefits from (provision for) income taxes from discontinued operations241 1,169 584 1,267 
Net (loss) income from discontinued operations, net of taxes(20,616)(12,336)(46,571)(14,092)
Net (loss) income(62,327)74,769 (90,787)25,271 
Net (income) loss from continuing operations attributable to noncontrolling interests(785)(11)(446)584 
Net (income) loss from discontinued operations attributable to noncontrolling interests 449 250 967 
Net (income) loss attributable to noncontrolling interests(785)438 (196)1,551 
Net (loss) income from continuing operations attributable to stockholders(42,496)87,094 (44,662)39,947 
Net (loss) income from discontinued operations attributable to stockholders(20,616)(11,887)(46,321)(13,125)
Net (loss) income attributable to stockholders$(63,112)$75,207 $(90,983)$26,822 
Net (loss) income per share attributable to stockholders - basic:
Continuing operations$(0.24)$0.50 $(0.26)$0.23 
Discontinued operations$(0.12)$(0.07)$(0.27)$(0.08)
Net (loss) income per share – basic
$(0.36)$0.43 $(0.53)$0.15 
Net (loss) income per share attributable to stockholders - diluted:
Continuing operations$(0.24)$0.46 $(0.26)$0.23 
Discontinued operations$(0.12)$(0.07)$(0.27)$(0.08)
Net (loss) income per share – diluted
$(0.36)$0.39 $(0.53)$0.15 
Weighted-average shares:
Basic173,951 172,640 173,664 171,920 
Diluted173,951 194,363 173,664 176,794 

1 We have related-party transactions with TotalEnergies SE and its affiliates, Maxeon Solar, and unconsolidated entities in which we have a direct equity investment. These related-party transactions are recorded within the “total revenues,” “operating expenses: research and development,” “operating expenses: sales, general, and administrative,” “operating expenses: (income) expense transition services agreement, net,” “other income (expense), net: interest expense,” and “(loss) income from discontinued operations before income taxes” financial statement line items in our condensed consolidated statements of operations (see Note 3, Note 10, and Note 12).


The accompanying notes are an integral part of these condensed consolidated financial statements.
4


SunPower Corporation
Condensed Consolidated Statements of Comprehensive (Loss) Income
(In thousands)
(unaudited)

 Three Months EndedSix Months Ended
July 3, 2022July 4, 2021July 3, 2022July 4, 2021
Net (loss) income$(62,327)$74,769 $(90,787)$25,271 
Components of other comprehensive (loss) income:
Translation adjustment(31)6 (29)4 
Net change in derivatives 423  570 
Benefits from (provision for) income taxes 63  16 
Total other comprehensive (loss) income(31)492 (29)590 
Total comprehensive (loss) income(62,358)75,261 (90,816)25,861 
Comprehensive (income) loss attributable to noncontrolling interests(785)438 (196)1,551 
Comprehensive (loss) income attributable to stockholders$(63,143)$75,699 $(91,012)$27,412 


The accompanying notes are an integral part of these condensed consolidated financial statements.

5


SunPower Corporation
Condensed Consolidated Statements of Equity
(In thousands)
(unaudited)


 Common Stock     
 SharesValueAdditional
Paid-in
Capital
Treasury
Stock
Accumulated Other
Comprehensive Income (Loss)
Accumulated DeficitTotal
Stockholders’
Equity
Noncontrolling Interests in SubsidiariesTotal Equity
Balances at January 2, 2022173,051 $173 $2,714,500 $(215,240)$11,168 $(2,122,212)$388,389 $1,635 $390,024 
Net income (loss)— — — — — (27,871)(27,871)(589)(28,460)
Other comprehensive income— — — — 2 — 2 — 2 
Issuance of restricted stock to employees, net of cancellations1,201 1 — — — — 1 — 1 
Stock-based compensation expense— — 5,427 — — — 5,427 — 5,427 
Purchases of treasury stock(407)— — (7,333)— — (7,333)— (7,333)
Balances at April 3, 2022173,845 174 2,719,927 (222,573)11,170 (2,150,083)358,615 1,046 359,661 
Net income (loss)— — — — — (63,112)(63,112)785 (62,327)
Other comprehensive income— — — — (31)— (31)— (31)
Issuance of restricted stock to employees, net of cancellations359 — — — — — — — — 
Stock-based compensation expense— — 7,071 — — — 7,071 — 7,071 
Purchases of treasury stock(123)— — (2,256)— — (2,256)— (2,256)
Income taxes impact of sale of C&I Solutions business— — (1,371)— — — (1,371)— (1,371)
Gain on sale of C&I Solutions business1
— — 114,401 — — — 114,401 3,943 118,344 
Balances at July 3, 2022174,081 $174 $2,840,028 $(224,829)$11,139 $(2,213,195)$413,317 $5,774 $419,091 

1 As TotalEnergies Renewables is a subsidiary of TotalEnergies SE, our parent company, the sale of our C&I Solutions business was a transaction under common control. As such, total gain on sale of our C&I Solutions business was included in Additional Paid-in-Capital within our condensed consolidated statements of equity. Refer to Note 2. Discontinued Operations for further details.

6



SunPower Corporation
Condensed Consolidated Statements of Equity
(In thousands)
(unaudited)


 Common Stock     
 SharesValueAdditional
Paid-in
Capital
Treasury
Stock
Accumulated Other
Comprehensive Income (Loss)
Accumulated DeficitTotal
Stockholders’
Equity
Noncontrolling Interests in SubsidiariesTotal Equity
Balances at January 3, 2021170,428 $170 $2,685,920 $(205,476)$8,799 $(2,085,246)$404,167 $2,319 $406,486 
Net income (loss)— — — — — (48,385)(48,385)(1,113)(49,498)
Other comprehensive income— — — — 98 — 98 — 98 
Issuance of restricted stock to employees, net of cancellations1,908 2 — — — — 2 — 2 
Stock-based compensation expense— — 5,437 — — — 5,437 — 5,437 
Bond/debentures conversion4 — 155 — — — 155 — 155 
Purchases of treasury stock(76)— — (2,120)— — (2,120)— (2,120)
Other adjustments— — (89)— — 392 303 — 303 
Balances at April 4, 2021172,264 172 2,691,423 (207,596)8,897 (2,133,239)359,657 1,206 360,863 
Net income (loss)— — — — — 75,207 75,207 (438)74,769 
Other comprehensive income— — — — 492 — 492 — 492 
Issuance of restricted stock to employees, net of cancellations664 — — — — — — — — 
Issuance of common stock to executive101 — 2,999 — — — 2,999 — 2,999 
Stock-based compensation expense— — 9,225 — — — 9,225 — 9,225 
Purchases of treasury stock(187)— — (4,310)— — (4,310)— (4,310)
Other adjustments— — — (25)— — (25)— (25)
Balances at July 4, 2021172,842 $172 $2,703,647 $(211,931)$9,389 $(2,058,032)$443,245 $768 $444,013 



The accompanying notes are an integral part of these condensed consolidated financial statements.
7


SunPower Corporation
Condensed Consolidated Statements of Cash Flows
(In thousands)
(unaudited)
    
Six Months Ended
 July 3, 2022July 4, 2021
Cash flows from operating activities:
Net (loss) income$(90,787)$25,271 
Adjustments to reconcile net (loss) income to net cash used in operating activities:
Depreciation and amortization17,048 5,817 
Stock-based compensation12,499 15,050 
Non-cash interest expense1,559 3,155 
Loss (gain) on equity investments13,940 (39,016)
(Gain) loss on sale of investments (1,162)
(Gain) loss on business divestitures, net (224)
Deferred income taxes(11,196)(1,637)
Other, net949 (6,215)
Changes in operating assets and liabilities:
       Accounts receivable(37,939)(2,909)
       Contract assets7,333 24,498 
       Inventories(17,059)1,825 
       Project assets295 6,305 
       Prepaid expenses and other assets(169,798)5,180 
       Operating lease right-of-use assets5,432 6,365 
       Advances to suppliers(2,072)(3,284)
       Accounts payable and other accrued liabilities46,518 (42,229)
       Contract liabilities66,273 (8,554)
       Operating lease liabilities(7,572)(6,589)
Net cash used in operating activities(164,577)(18,353)
Cash flows from investing activities:
Purchases of property, plant, and equipment(21,583)(6,894)
Investment in software development costs(2,725) 
Proceeds from sale of property, plant, and equipment 900 
Cash paid for solar power systems (635)
Cash received from sale of investments 1,200 
Proceeds from business divestitures, net of de-consolidated cash 10,516 
Cash received from C&I Solutions sale, net of deconsolidated cash146,303  
Cash paid for equity investments(16,420) 
Proceeds from sale of equity investment149,830  
Proceeds from return of capital from equity investments  2,276 
Cash paid for investments in unconsolidated investees(3,318) 
Net cash provided by investing activities252,087 7,363 
Cash flows from financing activities:
Proceeds from bank loans and other debt100,276 95,396 
Repayment of bank loans and other debt(98,044)(103,573)
Repayment of non-recourse residential and commercial financing debt (9,798)
Repayment of convertible debt (62,757)
Payments for financing leases(118) 
Issuance of common stock to executive 2,998 
Purchases of stock for tax withholding obligations on vested restricted stock(9,588)(6,453)
Net cash used in financing activities(7,474)(84,187)
Effect of exchange rate changes on cash, cash equivalents, and restricted cash  
Net increase (decrease) in cash, cash equivalents, and restricted cash80,036 (95,177)
Cash, cash equivalents, and restricted cash, beginning of period148,613 246,804 
Cash, cash equivalents, and restricted cash, end of period$228,649 $151,627 
Reconciliation of cash, cash equivalents, and restricted cash to the condensed consolidated balance sheets, including discontinued operations:
Cash and cash equivalents$206,355 $140,462 
Restricted cash and cash equivalents, current portion1,024 5,818 
Restricted cash and cash equivalents, net of current portion21,270 5,347 
Total cash, cash equivalents, and restricted cash$228,649 $151,627 
Supplemental disclosure of cash flow information:
Property, plant and equipment acquisitions funded by liabilities (including financing leases)$4,635 $1,174 
Right-of-use assets obtained in exchange for lease obligations$1,526 $11,528 
Working capital adjustment related to C&I Solutions sale$6,265 $ 
Accrued legal expenditures on equity method investment$163 $ 
Deconsolidation of right-of-use assets and lease obligations$ $3,340 
Debt repaid in sale of commercial projects$ $