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Sunpower Reports Third Quarter 2015 Results SAN JOSE, Calif.,

The following excerpt is from the company's SEC filing.

- SunPower Corp. (NASDAQ: SPWR) today announced financial results for its third fiscal quarter ended September 27, 2015.

($ Millions, except percentages and per-share data)

3rd Quarter 2015

2nd Quarter 2015

3rd Quarter 2014

GAAP revenue

$380.2

$381.0

$662.7

GAAP gross margin

GAAP net income (loss)

$(56.3)

GAAP net income (loss) per diluted share

$(0.41)

Non-GAAP revenue

$441.4

$376.7

$704.2

Non-GAAP gross margin

Non-GAAP net income

Non-GAAP net income p er diluted share

EBITDA

Information about SunPower's use of non-GAAP financial information is provided under "Use of Non-GAAP Financial Measures" below.

“Our strong quarterly results reflect the continued success of our customer first, complete solution strategy as we executed well on our project commitments and exceeded our key financial targets for the quarter,” said Tom Werner, SunPower president and CEO. “Demand trends in both the power plant and distributed generation segments remain robust and we are well positioned to capitalize on positive market fundamentals for 2016. Operationally, we met our cell and balance of systems cost targets and shipments of our industry leading technology now exceed one million cells per day. With Fab 4 scheduled for large volume production next year, we believe we will have the capacity to meet customer demand for our high efficiency, high quality solutions.

“In the power plant segment, we successfully met our commitments and further built out our holdco asset base in preparation for project drop downs to 8point3 Energy Partners. Specifically, our 135-megawatt (MW) Quinto project, which is now owned by 8point3 Energy Partners, remains on plan for non-GAAP revenue recognition in the fourth quarter. Additionally, we completed the construction of our 8-MW Riverside Public Utilities project as well as expanded our international footprint with the completion of our 12-MW Roc du Doun power plant in France and 40 MW of projects developed for Apple in China. Finally, we were awarded a 20-MW project for Sulphur Springs Valley Electric Cooperative in Arizona, scheduled for delivery in 2016.

“We also executed well in our distributed generation business as demand for our industry leading solutions remained solid during the quarter. In our commercial segment, our new and repeat customer bookings trend remained positive and we see strong fundamentals continuing through 2016. Our 13-MW University of California Davis project, owned by 8point3 Energy

Partners, achieved commercial operation date in September and contributed to our strong financial performance for the quarter. We also launched our Helix platform, the world’s first fully-integrated solar solution for commercial customers. Designed for the rooftop, carport and commercial ground-mount markets, Helix delivers significantly lower costs and improved reliability while accelerating installation times. When combined with our proprietary energy information services offering, this solution gives customers unprecedented visibility and control over their solar energy production and consumption.

“Our residential business was our best performing segment for the quarter. In particular, North American demand remains high as customers continue to choose SunPower for our industry leading quality, reliability and performance. As a result, non-GAAP revenue and gross margin exceeded our forecasts. Additionally, our PV-integrated residential microinverter offering is gaining significant traction in the marketplace and we continue to invest in our next generation solutions including building out our Smart Energy platform,” Werner concluded.

“The solid execution of our downstream strategy enabled us to post strong financial results for the quarter, including generating $54 million in EBITDA,” said Chuck Boynton, SunPower CFO. “In relation to working capital, we increased inventory in the third quarter in preparation to meet our significant 2016 backlog while adding assets to our holdco asset base.

With solid industry fundamentals, a diversified end channel strategy, new product introductions and further commitment to our manufacturing cost reduction roadmaps, we are well positioned for profitable growth in 2016.”

Third quarter fiscal 2015 non-GAAP results include net adjustments that, in the aggregate, increase net income by $76.8 million, including $19.4 million related to 8point3 Energy Partners, ($0.5) million related to utility and power plant projects, ($7.5) million related to the First Philippine Solar Corporation arbitration ruling, $14.9 million related to stock-based compensation expense, $1.0 million related to our November 2014 Restructuring Plan, $1.2 million related to the 8point3 Energy Partners Initial Public Offering , $1.3 million related to other adjustments, and $47.0 million related to tax effect.

Financial Outlook

The company’s fourth quarter fiscal 2015 non-GAAP guidance is as follows: revenue of $1.25 billion to $1.30 billion, gross margin of 28 percent to 29 percent, EBITDA of $300 to $325 million and megawatts deployed in the range of 275 MW to 305 MW. On a GAAP basis, the company expects revenue of $300 million to $350 million, gross margin of 5 percent to 6 percent and net loss per diluted share of $1.25 to $1.15. Fourth quarter 2015 GAAP guidance includes the impact of the company’s holdco strategy and deferrals due to real estate accounting.

For fiscal year 2015, the company’s non-GAAP expectations are as follows: revenue of $2.50 billion to $2.55 billion, gross margin of 23 percent to 24 percent, net income per diluted share of $1.95 to $2.05, capital expenditures of $250 million to $300 million and gigawatts

deployed in the range of 1.15 GW to 1.18 GW. On a GAAP basis, the company expects 2015 revenue of $1.50 billion to $1.55 billion, gross margin of 15 percent to 16 percent and net loss per diluted share of $1.70 to $1.60. Fiscal year 2015 GAAP guidance includes the impact of the company’s holdco strategy and deferrals due to real estate accounting.

The company is also raising its fiscal year 2015 EBITDA guidance to $475 million to $500 million, an increase from its previous guidance of $425 million to $475 million.

The company will host a conference call for investors this afternoon to discuss its third-quarter 2015 performance at 1:30 p.m. Pacific Time. The call will be webcast and can be accessed from SunPower’s website at

http://investors.sunpower.com/events.cfm

SunPower will provide its fiscal year 2016 outlook at its Analyst Day to be held on November 12, 2015 in New York City starting at 9:00 a.m. Eastern Time. Please note that the entire event will be webcast and relevant materials will be posted to the company’s website before the event. To register for and listen to the webcast, investors are encouraged to visit the company’s Events and Presentations section of the SunPower Investor Relations page at

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 third-quarter 2015 performance on the Events and Presentations section of the SunPower Investor Relations page at

. The capacity of power plants in this release is described in approximate megawatts on a direct current (dc) basis unless otherwise noted.

About SunPower

As one of the world’s most innovative and sustainable energy companies, SunPower Corp. (NASDAQ: SWPR) provides a diverse group of customers with complete solar solutions and services. Residential customers, businesses, governments, schools and utilities around the globe rely on SunPower’s more than 30 years of proven experience. From the first flip of the

switch, SunPower delivers maximum value and performance throughout the long life of every solar system. Headquartered in Silicon Valley, SunPower has dedicated, customer-focused employees in Africa, Asia, Australia, Europe, North and South America. For more information about how SunPower is changing the way our world is powered, visit

www.sunpower.com

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) expectations concerning the effect that 8point3 Energy Partners will have on our revenues cost of capital, future cash flows and the value we are able to generate for our shareholders; (b) anticipated construction timelines and milestones for certain of our commercial projects and for our major power plant projects, such as the Quinto project; (c) expansion of our international footprint and expanding our manufacturing capacity, including related to Fab 4, and our ability to meet customer demand; (d) the strength of the solar market and in particular, current and expected fourth quarter fiscal 2015 and fiscal year 2016 customer demand in our commercial and residential segments including in new and repeat bookings; (e) our positioning for long-term profitability; (f) strategically managing cash; (g) reducing operating expenses; (h) generating free cash flow; (i) expected benefits of our new Helix platform; (j) the expected adoption and benefits of our Smart Energy solutions; (k) fourth quarter fiscal 2015 non-GAAP guidance, including non-GAAP revenue, gross margin, EBITDA, and MW deployed; and fourth quarter fiscal 2015 GAAP guidance, including revenue, gross margin, and net loss per diluted share; (l) fiscal year 2015 non-GAAP guidance, including non-GAAP revenue, gross margin, capital expenditures, EBITDA, net income per diluted share, and GW deployed; and (m) fiscal year 2015 GAAP guidance, including GAAP revenue, gross margin, and net loss per diluted share. 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. Factors that could cause or contribute to such differences include, but are not limited to: (1) competition in the industry and downward pressure on average selling prices; (2) our liquidity, substantial indebtedness, and our ability to obtain additional financing for our projects and our customers; (3) risks relating to our residential lease business, including risks of customer default, challenges securing lease financing, and declining conventional electricity prices; (4) our ability to meet our cost reduction targets; (5) regulatory changes and the availability of economic incentives promoting use of solar energy; (6) challenges inherent in constructing and maintaining certain of our large projects, such as the Quinto project; (7) the success of our ongoing research and development efforts and our ability to commercialize of new products and services, including products and services developed through strategic partnerships; (8) fluctuations in our operating results; (9) maintaining or increasing our manufacturing capacity, containing manufacturing costs, and other manufacturing difficulties that could arise; (10) challenges managing our joint ventures and partnerships; (11) challenges executing on our holdco and YieldCo strategies, including the risk that 8point3 Energy Partners may be unsuccessful; (12) fluctuations or declines in the performance of our solar panels and other products and solutions; and (13) fluctuations or declines in the prices of conventional electricity. 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 reports on Form 10-K and Form 10-Q, particularly under the heading “Risk Factors.” Copies of these filings are available online from the SEC or on the SEC Filings...


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