Press Release
SINGAPORE, Nov. 17, 2021 /PRNewswire/ -- Maxeon Solar Technologies, Ltd. (NASDAQ:MAXN) ("Maxeon" or "the Company"), a global leader in solar innovation and channels, today announced its financial results for the third quarter ended October 3, 2021.
Maxeon's Chief Executive Officer Jeff Waters noted, "The team executed very well in the third quarter on near and long term initiatives despite unprecedented supply chain conditions. Our Distributed Generation channel set another record in Europe and the transition to sales Beyond the Panel accelerated with microinverter sales increasing 50%. In Utility-Scale, we booked our first major project in India totaling nearly 200MW, and added up to approximately 400MW to the United States backlog.
We are thrilled to announce that we safely re-opened our Malaysia facility after a 15 day shutdown during the quarter due to a COVID-19 outbreak, and that as of today, 99% of those employees are fully vaccinated. We are also supporting vaccinations for our employees in the Philippines and Mexico where national rates are still far behind Europe and the United States. The global pandemic is having a well publicized impact on global supply chain conditions. We are weathering these events, and delivered third quarter financial results within our guidance range. We also stayed on schedule for our long term transformation initiatives including the ramps of Maxeon 6 and North America Performance lines.
In the United States, we remain supportive of the Biden Administration's efforts to incentivize domestic manufacturing. If the Solar Energy Manufacturing for America Act passes this year, Maxeon is setup to move fast thanks to our longtime presence in the United States, decades of experience ramping cell and module facilities, and our DOE Loan Guarantee Application for a 3 Gigawatt facility which has already progressed to Part 2 of the process. This is the next of several steps in the DOE process which could ultimately result in a conditional commitment and final loan agreement from the DOE,"
Selected Q3 Financial Summary
(In thousands, except shipments) | Fiscal Q3 2021 | Fiscal Q2 2021 | Fiscal Q3 2020 | ||||||||
Shipments, in MW | 566 | 434 | 531 | ||||||||
Revenue | $ | 220,488 | $ | 175,895 | $ | 206,620 | |||||
Gross loss(1) | (16,708) | (2,812) | (12,302) | ||||||||
GAAP Operating expenses | 32,639 | 38,069 | 26,861 | ||||||||
GAAP Net loss attributable to the stockholders(1) | (65,363) | (77,011) | (67,755) | ||||||||
Capital investment | 54,140 | 51,703 | 4,889 | ||||||||
Other Financial Data(1), (2) | |||||||||||
(In thousands) | Fiscal Q3 2021 | Fiscal Q2 2021 | Fiscal Q3 2020 | ||||||||
Non-GAAP Gross loss | $ | (16,353) | $ | (2,629) | $ | (11,665) | |||||
Non-GAAP Operating expenses | 29,678 | 31,200 | 25,575 | ||||||||
Adjusted EBITDA | (33,099) | (27,341) | (33,074) | ||||||||
(1) | The Company's GAAP and Non-GAAP results were impacted by the effects of certain items. Refer to "Supplementary information affecting GAAP and Non-GAAP results" below. |
(2) | The Company's use of Non-GAAP financial information, including a reconciliation to U.S. GAAP, is provided under "Use of Non-GAAP Financial Measures" below. |
Supplementary information affecting GAAP and Non-GAAP results
Three Months Ended | |||||||||
(In thousands) | Financial statements | October 3, 2021 | July 4, 2021 | September 27, 2020 | |||||
Incremental cost of above market polysilicon(1) | Cost of revenue | 11,490 | 12,538 | 38,138 | |||||
Loss on ancillary sales of excess polysilicon(2) | Cost of revenue | 7,425 | 2,498 | 1,993 | |||||
Accommodation fee associated with the long-term polysilicon supply contract(3) | Other, net | — | — | 5,900 | |||||
(1) | Relates to the difference between our contractual cost for the polysilicon under the long-term fixed supply agreements with our supplier and the price of polysilicon available in the market as derived from publicly available information at the beginning of each quarter, multiplied by the volume of modules sold within the quarter. |
(2) | In order to reduce inventory and improve working capital, we have periodically elected to sell polysilicon inventory procured under the long-term fixed supply agreements in the market at prices below our purchase price, thereby incurring a loss. |
(3) | Relates to long-term fixed supply agreements with a polysilicon supplier which is structured as "take or pay" contract, that specify future quantities and pricing of products to be supplied. We negotiated an extension of our long-term fixed supply agreements with the supplier which resulted in a one-time accommodation fee recognized in the quarter ended September 27, 2020. |
Fourth Quarter 2021 Outlook
For the fourth quarter of 2021, the Company anticipates the following results:
(In millions, except shipments) | Outlook |
Shipments, in MW | 540 - 570 MW |
Revenue | $215 - $235 |
Gross loss(1) | $5 - $15 |
Non-GAAP gross loss(1), (2) | $5 - $15 |
Operating expenses | $35 ± $2 |
Non-GAAP operating expenses(3) | $31 ± $2 |
Adjusted EBITDA(1), (4) | $(32) - $(42) |
Capital investments(5) | $45 - $50 |
Out-of-market polysilicon cost(1) | $13 - $17 |
Restructuring charges(3), (6) | $2 - $3 |
(1) | Outlook for Gross loss, Non-GAAP gross loss and Adjusted EBITDA includes out-of-market polysilicon cost. |
(2) | The Company's Non-GAAP gross loss is impacted by the effects of adjusting for stock-based compensation expense. The Company does not provide a reconciliation between its gross loss and Non-GAAP gross loss outlook as the outlook is rounded to the nearest million and hence the adjustment does not result in a difference to Non-GAAP gross loss outlook. |
(3) | The Company's Non-GAAP operating expenses are impacted by the effects of adjusting for stock-based compensation expense and restructuring charges. |
(4) | The Company cannot provide a reconciliation between its Adjusted EBITDA projection and the most directly comparable GAAP measures without unreasonable efforts because it is unable to predict with reasonable certainty the ultimate outcome of the remeasurement gain or loss of the prepaid forward. |
(5) | Capital investments are directed mainly to upgrading production from Maxeon 2 to Maxeon 6 in our Malaysia factory, the purchase of cell and module equipment for our 1.8 GW of Performance line capacity for the U.S., as well as Maxeon 7 pilot line investment. |
(6) | We are in the process of closing our module factory in Toulouse, France resulting in anticipated restructuring charges. Additional restructuring charges are anticipated for the continued restructuring of our manufacturing network. The restructuring charges are included in operating expenses. |
These anticipated results for the fourth quarter of 2021 are preliminary, unaudited and represent the most current information available to management. The Company's business outlook is based on management's current views and estimates with respect to market conditions, production capacity, the uncertainty of the continuing impact of the COVID-19 pandemic, and the global economic environment. Please refer to Forward Looking Statements section below. Management's views and estimates are subject to change without notice.
For more information
Maxeon's third quarter 2021 financial results and management commentary can be found on Form 6-K by accessing the Financials & Filings page of the Investor Relations section of Maxeon's website at: https://corp.maxeon.com/investor-relations. The Form 6-K and Company's other filings are also available online from the Securities and Exchange Commission at www.sec.gov.
Conference Call Details
The Company will hold a conference call on November 17, 2021, at 5:30 PM U.S. ET / November 18, 2021, at 6:30 AM Singapore Time, to discuss results and to provide an update on the business. Conference call details are below.
Dial-in:
North America (toll-free): +1 (833) 301-1154
International: +1 (914) 987-7395
Singapore: +65 3165-4607
Conference ID: 5978769
A simultaneous webcast of the conference call will be available on Maxeon's website at https://corp.maxeon.com/events-and-presentations.
Listeners should dial in or log on 10 minutes in advance. A replay will be available online within 24 hours after the event.
A replay of the conference call may be accessed by phone at the following numbers until November 24, 2021. To access the replay, please reference the following numbers:
North America (toll-free): +1 (855) 859-2056 / +1 (800) 585-8367
International: +1 (404) 537-3406
Conference ID: 5978769
About Maxeon Solar Technologies
Maxeon Solar Technologies Ltd (NASDAQ: MAXN) is Powering Positive ChangeTM. Headquartered in Singapore, Maxeon designs and manufactures Maxeon® and SunPower® brand solar panels, and has sales operations in more than 100 countries, operating under the SunPower brand in certain countries outside the United States. The Company is a leader in solar innovation with access to over 1,000 patents and two best-in-class solar panel product lines. Maxeon products span the global rooftop and solar power plant markets through a network of more than 1,200 trusted partners and distributors. A pioneer in sustainable solar manufacturing, Maxeon leverages a 35-year history in the solar industry and numerous awards for its technology. For more information about how Maxeon is Powering Positive ChangeTM visit us at https://www.maxeon.com/, on LinkedIn and on Twitter.
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including, but not limited to, statements regarding: (a) our expectations regarding pricing trends, demand and growth projections; (b) potential disruptions to our operations and supply chain that may result from epidemics or natural disasters, including the duration, scope and impact on the demand for our products and the pace of recovery from the COVID-19 pandemic; (c) anticipated product launch timing and our expectations regarding ramp, customer acceptance and demand, upsell and expansion opportunities; (d) our expectations and plans for short- and long-term strategy, including our anticipated areas of focus and investment, market expansion, product and technology focus, and projected growth and profitability; (e) our ability to meet short term and long term material cash requirements, our ability to complete an equity or debt offering at favorable terms, if at all, and our overall liquidity, substantial indebtedness and ability to obtain additional financing; (f) our technology outlook, including anticipated fab utilization and expected ramp and production timelines for the Company's Maxeon 5 and 6, next-generation Maxeon 7 and Performance line solar panels, expected cost reduction, and future performance; (g) our strategic goals and plans, including partnership discussions with respect to the Company's next generation technology, and our relationships with existing customers, suppliers and partners, and our ability to achieve and maintain them; (h) expectations regarding our future performance and revenues resulting from contracted orders, bookings, backlog, and pipelines in our sales channels; and (i) our fourth quarter fiscal year 2021 guidance, including shipments, revenue, gross profit, non-GAAP gross profit, operating expenses, non-GAAP operating expenses, Adjusted EBITDA, capital investments, restructuring charges, out-of-market polysilicon cost, and related assumptions.
The forward-looking statements can be also identified by terminology such as "may," "might," "could," "will," "aims," "expects," "anticipates," "future," "intends," "plans," "believes," "estimates" and similar statements. Among other things, the quotations from management in this press release and Maxeon's operations and business outlook contain forward-looking statements.
These forward-looking statements are based on our current assumptions, expectations and beliefs and involve substantial risks and uncertainties that may cause results, performance or achievement to materially differ from those expressed or implied by these forward-looking statements. These statements are not guarantees of future performance and are subject to a number of risks. The reader should not place undue reliance on these forward-looking statements, as there can be no assurances that the plans, initiatives or expectations upon which they are based will occur. Factors that could cause or contribute to such differences include, but are not limited to: (1) challenges in executing transactions key to our strategic plans, including regulatory and other challenges that may arise; (2) our liquidity, substantial indebtedness, and ability to obtain additional financing for our projects, customers and operations; (3) our ability to manage supply chain cost increases and operating expenses; (4) potential disruptions to our operations and supply chain that may result from damage or destruction of facilities operated by our suppliers, epidemics or natural disasters, including impacts of the COVID-19 pandemic; (5) our ability to manage our key customers and suppliers; (6) the success of our ongoing research and development efforts and our ability to commercialize new products and services, including products and services developed through strategic partnerships; (7) competition in the solar and general energy industry and downward pressure on selling prices and wholesale energy pricing; (8) changes in regulation and public policy, including the imposition and applicability of tariffs; (9) our ability to comply with various tax holiday requirements as well as regulatory changes or findings affecting the availability of economic incentives promoting use of solar energy and the availability of tax incentives or the imposition of tax duties; (10) fluctuations in our operating results; (11) appropriately sizing our manufacturing capacity and containing manufacturing and logistics difficulties that could arise; (12) unanticipated impact to customer demand and sales schedules due, among other factors, to the spread of COVID-19 and other environmental disasters; (13) challenges managing our acquisitions, joint ventures and partnerships, including our ability to successfully manage acquired assets and supplier relationships; (14) reaction by securities or industry analysts to our quarterly guidance which, in combination with our results of operations, may cause them to cease publishing research or reports about us, or adversely change their recommendations regarding our common stock, which may negatively impact the market price of our common stock and volume of our stock trading; and (15) unpredictable outcomes resulting from our litigation activities. A detailed discussion of these factors and other risks that affect our business is included in filings we make with the Securities and Exchange Commission ("SEC") from time to time, including our most recent report on Form 20-F, particularly under the heading "Risk Factors". Copies of these filings are available online from the SEC at www.sec.gov, or on the SEC Filings section of our Investor Relations website at https://corp.maxeon.com/investor-relations. All forward-looking statements in this press release are based on information currently available to us, and we assume no obligation to update these forward-looking statements in light of new information or future events.
Use of Non-GAAP Financial Measures
We present certain non-GAAP measures such as non-GAAP gross profit, non-GAAP operating expenses and earnings before interest, taxes, depreciation and amortization ("EBITDA") adjusted for stock-based compensation, restructuring charges, remeasurement gain on prepaid forward and physical delivery forward and loss on extinguishment of debt ("Adjusted EBITDA") to supplement our condensed consolidated and combined financial results presented in accordance with GAAP. Non-GAAP gross profit is defined as gross profit excluding stock-based compensation. Non-GAAP operating expenses is defined as operating expenses excluding stock-based compensation and restructuring charges.
We believe that non-GAAP gross profit, non-GAAP operating expenses and Adjusted EBITDA provide greater transparency into management's view and assessment of the Company's ongoing operating performance by removing items management believes are not representative of our continuing operations and may distort our longer-term operating trends. We believe these measures are useful to help enhance the comparability of our results of operations across different reporting periods on a consistent basis and with our competitors, distinct from items that are infrequent or not associated with the Company's core operations as presented above. We also use these non-GAAP measures internally to assess our business, financial performance and current and historical results, as well as for strategic decision-making and forecasting future results. Given our use of non-GAAP measures, we believe that these measures may be important to investors in understanding our operating results as seen through the eyes of management. These non-GAAP measures are neither prepared in accordance with GAAP nor are they intended to be a replacement for GAAP financial data, should be reviewed together with GAAP measures and may be different from non-GAAP measures used by other companies.
As presented in the "Reconciliation of Non-GAAP Financial Measures" section, each of the non-GAAP financial measures excludes one or more of the following items in arriving to the non-GAAP measures:
- Stock-based compensation expense. Stock-based compensation relates primarily to equity incentive awards. Stock-based compensation is a non-cash expense that is dependent on market forces that are difficult to predict and is excluded from non-GAAP gross profit, non-GAAP operating expense and Adjusted EBITDA. Management believes that this adjustment for stock-based compensation expense provides investors with a basis to measure our core performance, including the ability to compare our performance with the performance of other companies, without the period-to-period variability created by stock-based compensation.
- Restructuring charges (benefits). We incur restructuring charges related to reorganization plans aimed towards realigning resources consistent with our global strategy and improving its overall operating efficiency and cost structure. Restructuring charges are excluded from non-GAAP operating expenses and Adjusted EBITDA because they are not considered core operating activities. Although we have engaged in restructuring activities in the past, past activities have been discrete events based on unique sets of business objectives. As such, management believes that it is appropriate to exclude restructuring charges from our non-GAAP financial measures as they are not reflective of ongoing operating results nor do these charges contribute to a meaningful evaluation of our past operating performance.
- Remeasurement loss (gain) on prepaid forward and physical delivery forward. This relates to the mark-to-market fair value remeasurement of privately negotiated prepaid forward and physical delivery transactions. The transactions were entered into in connection with the issuance on July 17, 2020 of the 6.50% Green Convertible Senior Notes due 2025 for an aggregate principal amount of $200.0 million. The prepaid forward is remeasured to fair value at the end of each reporting period, with changes in fair value booked in earnings. The fair value of the prepaid forward is primarily affected by the Company's share price. The physical delivery forward was remeasured to fair value at the end of the Note Valuation Period on September 29, 2020, and was reclassified to equity after remeasurement, and will not be subsequently remeasured. The fair value of the physical delivery forward was primarily affected by the Company's share price. The remeasurement gain on prepaid forward and physical delivery forward is excluded from Adjusted EBITDA because it is not considered core operating activities. As such, management believes that it is appropriate to exclude these mark-to-market adjustments from our Adjusted EBITDA as they are not reflective of ongoing operating results nor do these gains contribute to a meaningful evaluation of our past operating performance.
- Loss on extinguishment of debt. This relates to the loss that arose from the termination of our $50.0 million working capital facility in September 2021 and the expiration of the availability period for draw down of our $75.0 million term loans in August 2021. Loss on debt extinguishment is excluded from Adjusted EBITDA because it is not considered part of core operating activities. Such activities are discrete events based on unique sets of business objectives. As such, management believes that it is appropriate to exclude the loss on extinguishment of debt from our non-GAAP financial measures as it is not reflective of ongoing operating results nor do these charges contribute to a meaningful evaluation of our past operating performance.
Reconciliation of Non-GAAP Financial Measures | |||||||||||
Three Months Ended | |||||||||||
(In thousands) | October 3, 2021 | July 4, 2021 | September 27, 2020 | ||||||||
Gross loss | $ | (16,708) | $ | (2,812) | $ | (12,302) | |||||
Stock-based compensation | 355 | 183 | 637 | ||||||||
Non-GAAP Gross loss | (16,353) | (2,629) | (11,665) | ||||||||
GAAP Operating expenses | 32,639 | 38,069 | 26,861 | ||||||||
Stock-based compensation | (1,447) | (1,708) | (1,286) | ||||||||
Restructuring charges | (1,514) | (5,161) | — | ||||||||
Non-GAAP Operating expenses | 29,678 | 31,200 | 25,575 | ||||||||
GAAP Net loss attributable to the stockholders | (65,363) | (77,011) | (67,755) | ||||||||
Interest expense, net | 6,671 | 7,054 | 11,509 | ||||||||
Provision for (benefit from) income taxes | 174 | (1,217) | 5,043 | ||||||||
Depreciation | 10,999 | 9,681 | 9,182 | ||||||||
Amortization | 68 | 65 | 1,290 | ||||||||
EBITDA | (47,451) | (61,428) | (40,731) | ||||||||
Stock-based compensation | 1,802 | 1,891 | 1,923 | ||||||||
Restructuring charges | 1,514 | 5,161 | — | ||||||||
Remeasurement loss on physical delivery forward and prepaid forward | 5,961 | 27,035 | 5,734 | ||||||||
Loss on extinguishment of debt | 5,075 | — | — | ||||||||
Adjusted EBITDA | (33,099) | (27,341) | (33,074) | ||||||||
Reconciliation of Non-GAAP Outlook | |
(In millions) | Outlook |
Operating expenses | $35 ± $2 |
Stock-based compensation | (1.5) |
Restructuring charges | (2.5) |
Non-GAAP operating expenses | $31 ± $2 |
©2021 Maxeon Solar Technologies, Ltd. All rights reserved. MAXEON is a registered trademark of Maxeon Solar Technologies, Ltd. Visit https://corp.maxeon.com/trademarks for more information.
MAXEON SOLAR TECHNOLOGIES, LTD. | |||||
CONDENSED CONSOLIDATED BALANCE SHEETS | |||||
(unaudited) | |||||
(In thousands, except for shares data) | |||||
As of | |||||
October 3, 2021 | January 3, 2021 | ||||
Assets | |||||
Current assets: | |||||
Cash and cash equivalents | $ | 174,940 | $ | 206,744 | |
Restricted short-term marketable securities | — | 1,359 | |||
Accounts receivable, net | 59,369 | 76,702 | |||
Inventories | 220,419 | 169,240 | |||
Advances to suppliers, current portion | 51,688 | 43,680 | |||
Prepaid expenses and other current assets | 55,843 | 49,470 | |||
Total current assets | $ | 562,259 | $ | 547,195 | |
Property, plant and equipment, net | 338,932 | 246,908 | |||
Operating lease right of use assets | 16,025 | 13,482 | |||
Other intangible assets, net | 342 | 456 | |||
Advances to suppliers, net of current portion | 9,916 | 49,228 | |||
Other long-term assets | 144,801 | 123,074 | |||
Total assets | $ | 1,072,275 | $ | 980,343 | |
Liabilities and Equity | |||||
Current liabilities: | |||||
Accounts payable | $ | 254,608 | $ | 159,184 | |
Accrued liabilities | 76,622 | 77,307 | |||
Contract liabilities, current portion | 31,321 | 20,756 | |||
Short-term debt | 20,751 | 48,421 | |||
Operating lease liabilities, current portion | 2,626 | 2,464 | |||
Total current liabilities | $ | 385,928 | $ | 308,132 | |
Long-term debt | 385 | 962 | |||
Contract liabilities, net of current portion | 35,116 | 33,075 | |||
Operating lease liabilities, net of current portion | 13,783 | 12,064 | |||
Convertible debt | 142,955 | 135,071 | |||
Other long-term liabilities | 66,245 | 51,752 | |||
Total liabilities | $ | 644,412 | $ | 541,056 | |
Commitments and contingencies | |||||
Equity: | |||||
Common stock, no par value (44,232,455 and 33,995,116 issued and outstanding as of October 3, 2021 and January 3, 2021, respectively) | $ | — | $ | — | |
Additional paid-in capital | 622,569 | 451,474 | |||
Accumulated deficit | (189,629) | (8,441) | |||
Accumulated other comprehensive loss | (10,758) | (10,391) | |||
Equity attributable to the Company | 422,182 | 432,642 | |||
Noncontrolling interests | 5,681 | 6,645 | |||
Total equity | 427,863 | 439,287 | |||
Total liabilities and equity | $ | 1,072,275 | $ | 980,343 | |
MAXEON SOLAR TECHNOLOGIES, LTD. | |||||||||||||||
CONDENSED CONSOLIDATED AND COMBINED STATEMENTS OF OPERATIONS | |||||||||||||||
(unaudited) | |||||||||||||||
(In thousands, except per share data) | |||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||
October 3, 2021 | September 27, 2020 | October 3, 2021 | September 27, 2020 | ||||||||||||
Revenue | $ | 220,488 | $ | 206,620 | $ | 561,800 | $ | 599,272 | |||||||
Cost of revenue | 237,196 | 218,922 | 580,269 | 616,366 | |||||||||||
Gross loss | (16,708) | (12,302) | (18,469) | (17,094) | |||||||||||
Operating expenses: | |||||||||||||||
Research and development | 12,632 | 9,819 | 35,827 | 25,431 | |||||||||||
Sales, general and administrative | 18,493 | 17,042 | 64,554 | 62,160 | |||||||||||
Restructuring charges | 1,514 | — | 7,534 | — | |||||||||||
Total operating expenses | 32,639 | 26,861 | 107,915 | 87,591 | |||||||||||
Operating loss | (49,347) | (39,163) | (126,384) | (104,685) | |||||||||||
Other expense, net | |||||||||||||||
Interest expense, net | (6,671) | (11,509) | (21,337) | (23,732) | |||||||||||
Loss on extinguishment of debt | (5,075) | — | (5,075) | — | |||||||||||
Other, net | (5,663) | (11,551) | (23,119) | (8,094) | |||||||||||
Other expense, net | (17,409) | (23,060) | (49,531) | (31,826) | |||||||||||
Loss before income taxes and equity in losses of unconsolidated investees | (66,756) | (62,223) | (175,915) | (136,511) | |||||||||||
Provision for income taxes | (174) | (5,043) | (1,219) | (7,390) | |||||||||||
Equity in income (losses) of unconsolidated investees | 917 | 58 | (5,018) | (586) | |||||||||||
Net loss | (66,013) | (67,208) | (182,152) | (144,487) | |||||||||||
Net loss (income) attributable to noncontrolling interests | 650 | (547) | 964 | (1,602) | |||||||||||
Net loss attributable to the stockholders | $ | (65,363) | $ | (67,755) | $ | (181,188) | $ | (146,089) | |||||||
Net loss per share attributable to stockholders: | |||||||||||||||
Basic | $ | (1.62) | $ | (2.74) | $ | (4.97) | $ | (6.51) | |||||||
Diluted | (1.62) | (2.74) | (4.97) | (6.51) | |||||||||||
Weighted average shares used to compute net loss per share: | |||||||||||||||
Basic | 40,420 | 24,767 | 36,462 | 22,432 | |||||||||||
Diluted | 40,420 | 24,767 | 36,462 | 22,432 | |||||||||||
MAXEON SOLAR TECHNOLOGIES, LTD. | ||||||||||||||||||||||||||||||||||
CONDENSED CONSOLIDATED AND COMBINED STATEMENTS OF EQUITY | ||||||||||||||||||||||||||||||||||
(unaudited) | ||||||||||||||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||||||||||
Shares | Amount | Additional | Net Parent | Accumulated | Accumulated | Equity | Noncontrolling | Total Equity | ||||||||||||||||||||||||||
Balance at January 3, 2021 | 33,995 | $ | — | $ | 451,474 | $ | — | $ | (8,441) | $ | (10,391) | $ | 432,642 | $ | 6,645 | $ | 439,287 | |||||||||||||||||
Net loss | — | — | — | — | (38,814) | — | (38,814) | 98 | (38,716) | |||||||||||||||||||||||||
Issuance of common stock for stock-based compensation, net of tax withheld | 229 | — | (2,550) | — | — | — | (2,550) | — | (2,550) | |||||||||||||||||||||||||
Recognition of stock-based compensation | — | — | 1,570 | — | — | — | 1,570 | — | 1,570 | |||||||||||||||||||||||||
Other comprehensive income | — | — | — | — | (79) | (79) | — | (79) | ||||||||||||||||||||||||||
Balance at April 4, 2021 | 34,224 | $ | — | $ | 450,494 | $ | — | $ | (47,255) | $ | (10,470) | $ | 392,769 | $ | 6,743 | $ | 399,512 | |||||||||||||||||
Net loss | — | $ | — | $ | — | $ | — | $ | (77,011) | $ | — | $ | (77,011) | $ | (412) | $ | (77,423) | |||||||||||||||||
Issuance of common stock, net of issuance cost | 9,916 | — | 169,684 | — | — | — | 169,684 | — | 169,684 | |||||||||||||||||||||||||
Issuance of common stock for stock-based compensation, net of tax withheld | 57 | — | (1,262) | — | — | — | (1,262) | — | (1,262) | |||||||||||||||||||||||||
Recognition of stock-based compensation | — | — | 2,097 | — | — | — | 2,097 | — | 2,097 | |||||||||||||||||||||||||
Other comprehensive income | — | — | — | — | — | (473) | (473) | — | (473) | |||||||||||||||||||||||||
Balance at July 4, 2021 | 44,197 | $ | — | $ | 621,013 | $ | — | $ | (124,266) | $ | (10,943) | $ | 485,804 | $ | 6,331 | $ | 492,135 | |||||||||||||||||
Net loss | — | $ | — | $ | — | $ | — | $ | (65,363) | $ | — | $ | (65,363) | $ | (650) | $ | (66,013) | |||||||||||||||||
Issuance of common stock for stock-based compensation, net of tax withheld | 35 | — | (263) | — | — | — | (263) | — | (263) | |||||||||||||||||||||||||
Recognition of stock-based compensation | — | — | 1,819 | — | — | — | 1,819 | — | 1,819 | |||||||||||||||||||||||||
Other comprehensive income | — | — | — | — | — | 185 | 185 | — | 185 | |||||||||||||||||||||||||
Balance at October 3, 2021 | 44,232 | — | 622,569 | — | (189,629) | (10,758) | 422,182 | 5,681 | 427,863 | |||||||||||||||||||||||||
Shares | Amount | Additional | Net Parent | Accumulated | Accumulated | Equity | Noncontrolling | Total Equity | ||||||||||||||||||||||||||
Balance at December 29, 2019 | — | $ | — | $ | — | $ | 369,837 | $ | — | $ | (7,618) | $ | 362,219 | $ | 5,304 | $ | 367,523 | |||||||||||||||||
Net loss | — | — | — | (31,749) | — | — | (31,749) | 672 | (31,077) | |||||||||||||||||||||||||
Other comprehensive income | — | — | — | — | — | 1,612 | 1,612 | — | 1,612 | |||||||||||||||||||||||||
Net Parent contribution | — | — | — | 35,958 | — | — | 35,958 | — | 35,958 | |||||||||||||||||||||||||
Balance at March 29, 2020 | — | $ | — | $ | — | $ | 374,046 | $ | — | $ | (6,006) | $ | 368,040 | $ | 5,976 | $ | 374,016 | |||||||||||||||||
Net loss | — | — | — | (46,585) | — | — | (46,585) | 383 | (46,202) | |||||||||||||||||||||||||
Other comprehensive income | — | — | — | — | — | 93 | 93 | — | 93 | |||||||||||||||||||||||||
Net Parent contribution | — | — | — | (19,585) | — | — | (19,585) | — | (19,585) | |||||||||||||||||||||||||
Balance at June 28, 2020 | — | $ | — | $ | — | $ | 307,876 | $ | — | $ | (5,913) | $ | 301,963 | $ | 6,359 | $ | 308,322 | |||||||||||||||||
Net loss | — | — | — | (55,856) | (11,899) | — | (67,755) | 547 | (67,208) | |||||||||||||||||||||||||
Issuance of common stock, net of issuance cost | 8,916 | — | 297,675 | — | — | — | 297,675 | — | 297,675 | |||||||||||||||||||||||||
Issuance of physical delivery forwards | 3,313 | — | 50,660 | — | — | — | 50,660 | — | 50,660 | |||||||||||||||||||||||||
Issuance of convertible debt, net of issuance cost | — | — | 52,167 | — | — | — | 52,167 | — | 52,167 | |||||||||||||||||||||||||
Conversion of Net parent investment into common stock, net of issuance cost | 21,268 | — | 105,351 | (106,127) | — | — | (776) | — | (776) | |||||||||||||||||||||||||
Distribution to non-controlling interest | — | — | — | — | — | — | — | (278) | (278) | |||||||||||||||||||||||||
Recognition of stock-based compensation | — | — | 610 | — | — | — | 610 | — | 610 | |||||||||||||||||||||||||
Other comprehensive income | — | — | — | — | — | (10,143) | (10,143) | — | (10,143) | |||||||||||||||||||||||||
Net Parent contribution | — | — | — | (145,893) | — | — | (145,893) | — | (145,893) | |||||||||||||||||||||||||
Balance at September 27, 2020 | 33,497 | $ | — | $ | 506,463 | $ | — | $ | (11,899) | $ | (16,056) | $ | 478,508 | $ | 6,628 | $ | 485,136 | |||||||||||||||||
MAXEON SOLAR TECHNOLOGIES, LTD. | |||||
CONDENSED CONSOLIDATED AND COMBINED STATEMENTS OF CASH FLOWS | |||||
(unaudited) | |||||
(In thousands) | |||||
Nine Months Ended | |||||
October 3, 2021 | September 27, 2020 | ||||
Cash flows from operating activities | |||||
Net loss | $ | (182,152) | $ | (144,487) | |
Adjustments to reconcile net loss to net cash used in operating activities | |||||
Depreciation and amortization | 30,095 | 38,221 | |||
Stock-based compensation | 5,197 | 5,736 | |||
Non-cash interest expense | 10,518 | 15,858 | |||
Equity in losses of unconsolidated investees | 5,018 | 586 | |||
Gain from dilution of interest in joint venture | (2,975) | — | |||
Deferred income taxes | 1,926 | 712 | |||
Gain on equity investments | — | (1,822) | |||
Loss (Gain) on disposal of property, plant and equipment | 2,216 | (641) | |||
Loss on debt extinguishment | 5,075 | — | |||
Remeasurement loss on prepaid forward | 24,641 | 5,734 | |||
Other, net | (1,728) | 847 | |||
Changes in operating assets and liabilities | |||||
Accounts receivable | 18,378 | 76,620 | |||
Contract assets | 172 | (2,563) | |||
Inventories | (50,884) | 15,356 | |||
Prepaid expenses and other assets | (13,748) | 2,366 | |||
Operating lease right-of-use assets | 1,812 | 1,725 | |||
Advances to suppliers | 31,304 | 18,217 | |||
Accounts payable and other accrued liabilities | 52,922 | (98,759) | |||
Contract liabilities | 35,914 | (59,619) | |||
Operating lease liabilities | (2,175) | (1,387) | |||
Net cash used in operating activities | (28,474) | (127,300) | |||
Cash flows from investing activities | |||||
Purchases of property, plant and equipment | (116,801) | (14,388) | |||
Proceeds from disposal of short-term investments | 1,318 | 6,572 | |||
Purchase of short-term investments | — | (1,340) | |||
Cash paid for disposal of property, plant and equipment | (283) | — | |||
Proceeds from sale of assets | — | 1,283 | |||
Proceeds from dividends and partial return of capital by an unconsolidated investee | — | 2,462 | |||
Net cash used in investing activities | (115,766) | (5,411) | |||
Cash flows from financing activities | |||||
Proceeds from debt | 130,265 | 164,968 | |||
Repayment of debt | (157,812) | (164,533) | |||
Repayment of finance lease obligations | (535) | (412) | |||
Payment for tax withholding obligations for issuance of common stock upon vesting of restricted stock units | (4,075) | — | |||
Net proceeds from issuance of common stock | 169,684 | 296,899 | |||
Net proceeds from issuance of convertible debt | 190,253 | ||||
Payment of Prepaid Forward | (40,000) | ||||
Distribution to noncontrolling interest | (278) | ||||
Net Parent contribution | — | (125,000) | |||
Net cash provided by financing activities | 137,527 | 321,897 | |||
Effect of exchange rate changes on cash, cash equivalents and restricted cash | 67 | (187) | |||
Net (decrease) increase in cash, cash equivalents and restricted cash | (6,646) | 188,999 | |||
Cash, cash equivalents and restricted cash, beginning of period | 209,572 | 123,803 | |||
Cash, cash equivalents and restricted cash, end of period | $ | 202,926 | $ | 312,802 | |
Non-cash transactions | |||||
Property, plant and equipment purchases funded by liabilities | $ | 36,724 | $ | 8,638 | |
Cost from issuance of common stock paid in shares | 1,078 | — | |||
Interest expense financed by SunPower | — | 11,333 | |||
Aged supplier financing balances reclassified from accounts payable to short-term debt | — | 23,933 | |||
Right-of-use assets obtained in exchange for lease obligations | 5,020 | — | |||
The following table reconciles our cash and cash equivalents and restricted cash reported on our Condensed Consolidated Balance Sheets and the cash, cash equivalents and restricted cash reported on our Condensed Consolidated and Combined Statements of Cash Flows as of October 3, 2021 and September 27, 2020:
(In thousands) | October 3, 2021 | September 27, 2020 | |||||
Cash and cash equivalents | $ | 174,940 | $ | 309,917 | |||
Restricted cash, current portion, included in Prepaid expenses and other current assets | 3,962 | 2,883 | |||||
Restricted cash, net of current portion, included in Other long-term assets | 24,024 | 2 | |||||
Total cash, cash equivalents and restricted cash shown in Condensed Consolidated and Combined Statements of Cash Flows | $ | 202,926 | $ | 312,802 | |||
SOURCE Maxeon Solar Technologies, Ltd.
