SunPower Corp. (Nasdaq: SPWR) reported financial results for the first quarter of 2007 ended March 31, 2007 – the first quarterly report of SunPower’s combined operations since the acquisition of PowerLight Corp., which closed on January 10, 2007.
Revenue was $142.3 million with gross margins of 22.8%, an operating loss of $2.5 million and net income of $1.2 million resulting in fully diluted income of $0.02 per share. These figures include operating expenses for acquired in-process research and development of $9.6 million, amortization of purchase accounting intangible assets of $6.9 million and non-cash stock-based compensation of $10.6 million
“SunPower had tremendous success during our first quarter as a combined company with PowerLight” said Tom Werner, SunPower’s CEO. “In the first quarter we closed our acquisition of PowerLight, raised a $200 million offering of senior convertible debentures, and executed against our financial and operational targets. Much of our effort during the quarter was focused on a smooth and efficient combination of SunPower’s and PowerLight’s operations. We are already validating that the combination of SunPower’s high-efficiency solar cell technology with PowerLight’s systems expertise is key to achieving our goal of reducing installed solar system cost by 50 percent by 2012.”
“We recently announced a number of major project wins and milestones that demonstrate the breadth and scope of our systems business segment footprint:
— Portugal: Dedication of an 11 megawatt central-station solar electric power plant located in Serpa;
— Spain: Supply of 61 megawatts of solar power plant equipment and services using PowerTracker ® solar systems technology;
— California: Announcement by homebuilder Lennar Corp. (LEN: NYSE) of three major communities totaling more than 1,900 homes, all utilizing SunPower solar systems;
— Nevada: Groundbreaking of nation’s largest solar photovoltaic system at Nellis Air Force Base of approximately 15 megawatts;
— New Jersey: Dedication of rooftop systems totaling 1.3 megawatts on two Tiffany’s distribution warehouses;
— San Jose: Agreement signed with Applied Materials to install an approximately 1 megawatt rooftop solar system at its Maydan Technology Campus in Silicon Valley.
“Our components business also delivered strong results during the first quarter,” continued Werner. “ASPs for our solar cells and panels were up approximately three percent compared to the previous quarter, reflecting the strong global demand for SunPower’s high-efficiency products.
“We are on-time and on-budget with the construction of our second solar cell manufacturing facility that is scheduled to begin production in the third quarter of 2007. We have agreements in place for sufficient silicon supply to produce 110 megawatts of solar cells in 2007, at least 250 megawatts in 2008, and 400 MW in 2009.”
“On the technology side, the first quarter saw increased production of our 22 percent efficient Gen2 solar cell technology that delivers a full two percentage point improvement over our first generation A-300 solar cells,” said Werner. “All four lines are now running 165 micron thick wafers. This reduced wafer thickness in combination with our increasing efficiency and strong manufacturing yields, improved silicon utilization efficiency to between 7 and 7.5 grams-per-watt in the first quarter. The success of our first in-house panel manufacturing facility provided us with the confidence to order two more lines, which will bring our in-house panel manufacturing capacity to 90 megawatts annually by year-end 2007.
“We launched 2007 with an outstanding first quarter, driven by robust execution across our company,” continued Werner. “Our first quarter revenue was almost double that of the preceding quarter with expansion in our gross margin and non-GAAP net income. By the end of 2007, we expect to add three new cell manufacturing lines and further improve our silicon efficiency as we increase production of higher efficiency cells using thinner wafers. We also plan to establish SunPower as the leading solar dealer network in the U.S., and complete construction on our substantial pipeline of large systems.
“In 2008 we expect to achieve in excess of $1 billion in revenue as we bring on five more solar cell manufacturing lines and respond to the expanding solar market across three continents,” said Werner. “As a combined company, we believe we will achieve our stated business model financial goals of 30 percent gross margin, 10 percent operating expenses, and 20 percent operating margin on a non-GAAP basis by the end of 2008 or early 2009.”
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