Maxeon Solar Technologies Announces Preliminary Fourth Quarter and Fiscal Year 2023 Results
Maxeon's CEO
"As disclosed in our last earnings call, Maxeon has been executing a transformation of our IBC capacity timed to coincide with the current DG market slowdown. As part of this initiative, we made the decision to ramp down all of our Maxeon 6 capacity faster than we had originally expected, resulting in higher than initially planned restructuring costs in the fourth quarter."
"The Maxeon team is highly focused on reducing manufacturing costs, OPEX rationalization and liquidity-management to enable a return to profitability. Our strategy continues to be to focus on designing and building premium, differentiated products and delivering a superior customer experience across a balanced portfolio of global DG and
The Company will separately announce the date for its next earnings call.
Preliminary Selected Q4 Unaudited Financial Summary
(In millions, except shipments) |
Fiscal Q4 2023 |
|
Fiscal Q3 2023 |
|
Fiscal Q4 2022 |
|
Fiscal Year 2023 |
|
Fiscal Year 2022 |
Shipments, in MW |
653 |
|
628 |
|
734 |
|
2,862 |
|
2,348 |
Revenue |
$ 229 |
|
$ 228 |
|
$ 324 |
|
$ 1,123 |
|
$ 1,060 |
Gross (loss) profit |
(32) |
|
3 |
|
20 |
|
80 |
|
(48) |
GAAP Operating expenses |
142 |
|
67 |
|
38 |
|
298 |
|
152 |
GAAP Net loss attributable to the stockholders |
(184) |
|
(108) |
|
(76) |
|
(274) |
|
(267) |
Cash, cash equivalent, restricted cash and short-term securities |
196 |
|
277 |
|
344 |
|
196 |
|
344 |
|
Other Financial Data(1) |
||||||||
(In millions) |
Fiscal Q4 2023 |
|
Fiscal Q3 2023 |
|
Fiscal Q4 2022 |
|
Fiscal Year 2023 |
|
Fiscal Year 2022 |
Non-GAAP Gross (loss) profit |
$ (7) |
|
$ 3 |
|
$ 21 |
|
$ 106 |
|
$ (31) |
Non-GAAP Operating expenses |
36 |
|
38 |
|
34 |
|
153 |
|
134 |
Restructuring expenses and charges |
128 |
|
24 |
|
1 |
|
152 |
|
6 |
Adjusted EBITDA |
(35) |
|
(20) |
|
(4) |
|
6 |
|
(109) |
|
|||||||||
(1) The Company's use of Non-GAAP financial information, including a reconciliation to |
For the first quarter of 2024, the Company expects the following results:
Shipments, in MW |
508 (approx.) |
Revenue, in USD millions |
186 (approx.) |
Use of Non-GAAP Financial Measures
We present certain non-GAAP measures such as non-GAAP gross (loss) profit, non-GAAP operating expenses and earnings before interest, taxes, depreciation and amortization ("EBITDA") adjusted for stock-based compensation, restructuring charges and fees, remeasurement (loss) gain on prepaid forward and physical delivery forward and equity in losses (income) of unconsolidated investees ("Adjusted EBITDA") to supplement our consolidated financial results presented in accordance with GAAP. Non-GAAP gross (loss) profit is defined as gross (loss) profit excluding stock-based compensation, restructuring charges and fees, and loss related to settlement of price escalation dispute. Non-GAAP operating expenses is defined as operating expenses excluding stock-based compensation and restructuring charges and fees.
We believe that non-GAAP gross (loss) 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 "Preliminary 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 (loss) 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 and fees. We incur restructuring charges, inventory impairment and other inventory related costs associated with the re-engineering of our IBC capacity, and fees related to reorganization plans and business acquisition aimed towards realigning resources consistent with our global strategy and improving its overall operating efficiency and cost structure. Restructuring charges and fees are excluded from non-GAAP gross (loss) profit, non-GAAP operating expenses and Adjusted EBITDA because they are not considered core operating activities. Although we have engaged in restructuring activities and initiatives, 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 and fees 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 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 onSeptember 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 loss (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 the mark-to-market adjustments from our Adjusted EBITDA as it is not reflective of ongoing operating results nor do the loss contribute to a meaningful evaluation of our past operating performance. -
Equity in (losses) income of unconsolidated investees. This relates to the (losses) income on our unconsolidated equity investment Huansheng JV. This is excluded from our Adjusted EBITDA financial measure as it is non-cash in nature and not reflective of our core operational performance. As such, management believes that it is appropriate to exclude such charges as they do not contribute to a meaningful evaluation of our performance.
- Loss related to settlement of price escalation dispute. This relates to loss arising from the settlement of price escalation dispute with a polysilicon supplier related to our long term, firm commitment polysilicon supply agreement. This is excluded from our Adjusted EBITDA financial measure as it is non-recurring and not reflective of ongoing operating results. As such, management believes that it is appropriate to exclude such charges as the loss does not contribute to a meaningful evaluation of our past operating performance.
Preliminary Reconciliation of Non-GAAP Financial Measures
(In millions) |
Fiscal Q4 2023 |
|
Fiscal Q3 2023 |
|
Fiscal Q4 2022 |
|
Fiscal Year 2023 |
|
Fiscal Year 2022 |
GAAP Gross (loss) profit |
$ (32) |
|
$ 3 |
|
$ 20 |
|
$ 80 |
|
$ (48) |
Stock-based compensation |
— |
|
— |
|
1 |
|
1 |
|
2 |
Restructuring charges and fees |
25(1) |
|
— |
|
— |
|
25(2) |
|
— |
Loss related to settlement of price escalation dispute |
— |
|
— |
|
— |
|
— |
|
15 |
Non-GAAP Gross (loss) profit |
(7) |
|
3 |
|
21 |
|
106 |
|
(31) |
|
|
|
|
|
|
|
|
|
|
GAAP Operating expenses |
142 |
|
67 |
|
38 |
|
298 |
|
152 |
Stock-based compensation |
(2) |
|
(5) |
|
(3) |
|
(18) |
|
(13) |
Restructuring charges and fees |
(103)(1) |
|
(24) |
|
(1) |
|
(127)(2) |
|
(5) |
Others(3) |
(1) |
|
— |
|
— |
|
— |
|
— |
Non-GAAP Operating expenses |
36 |
|
38 |
|
34 |
|
153 |
|
134 |
|
|
|
|
|
|
|
|
|
|
(In millions) |
Fiscal Q4 2023 |
|
Fiscal Q3 2023 |
|
Fiscal Q4 2022 |
|
Fiscal Year 2023 |
|
Fiscal Year 2022 |
GAAP Net loss attributable to the stockholders |
(184) |
|
(108) |
|
(76) |
|
(274) |
|
(267) |
Interest expense, net |
7 |
|
8 |
|
9 |
|
33 |
|
28 |
(Benefit from) provision for income taxes |
(10) |
|
(3) |
|
28 |
|
(1) |
|
32 |
Depreciation |
12 |
|
14 |
|
14 |
|
56 |
|
56 |
Amortization |
— |
|
— |
|
— |
|
— |
|
— |
Others(3) |
— |
|
— |
|
1 |
|
— |
|
— |
EBITDA |
(175) |
|
(89) |
|
(24) |
|
(186) |
|
(151) |
Stock-based compensation |
2 |
|
5 |
|
4 |
|
19 |
|
15 |
Loss related to settlement of price escalation dispute |
— |
|
— |
|
— |
|
— |
|
15 |
Restructuring charges and fees |
128(1) |
|
24 |
|
1 |
|
152(2) |
|
6 |
Remeasurement loss (gain) on physical delivery forward and prepaid forward |
10 |
|
37 |
|
18 |
|
18 |
|
(2) |
Equity in losses (income) of unconsolidated investees and related gain |
— |
|
2 |
|
(2) |
|
3 |
|
9 |
Others(3) |
— |
|
1 |
|
(1) |
|
— |
|
(1) |
Adjusted EBITDA |
(35) |
|
(20) |
|
(4) |
|
6 |
|
(109) |
|
|
(1) |
For fiscal Q4 2023, included in the GAAP gross loss is |
|
|
|
For fiscal Q4 2023, included in the GAAP operating expenses is |
|
|
(2) |
For fiscal year 2023, included in the GAAP gross loss is |
|
|
|
For fiscal year 2023, included in the GAAP operating expenses is |
|
|
(3) |
Relates to rounding differences as the components are presented to the nearest million. |
About
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, including, statements regarding our expectations for our first quarter 2024 revenues and shipments and the assumptions underlying those expectations. Additional forward-looking statements include, but are not limited, to statements regarding our expectations for market and industry conditions, our restructuring plans, including those to streamline our operations, invest in new technology, and adjust our mix between the DG and utility-scale markets as described herein, as well as our ability to execute on our plans and strategy.
Additional forward-looking statements can be identified by terminology such as "may," "might," "could," "will," "aims," "expects," "anticipates," "future," "intends," "plans," "believes," "estimates" and similar 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 executing of restructuring plans, building of our distribution channels, regulatory and other challenges that may arise; (2) our liquidity, substantial indebtedness, terms and conditions upon which our indebtedness is incurred, and ability to obtain additional financing for our projects, customers and operations; (3) our ability to manage supply chain shortages and/or excess inventory and 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, difficulties in hiring or retaining key personnel, epidemics, natural disasters, including impacts of the war in
Statement Regarding Preliminary Unaudited Financial Information
This press release includes certain preliminary, unaudited financial information for the three months and fiscal year ended December 31, 2023, as well as for the three months ended
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