PR Newswire | Nov 3, 2021 04:06PM EDT

11/03 15:05 CDT

SunPower Reports Third Quarter 2021 Results- Strong third quarter Residential demand with record lead generation.- Growing demand for storage, third quarter storage bookings run rate at $80 million, on track for $100 million run rate by year end.- Reported third quarter financials consistent with previous October 5th business update.- Geographic expansion with Blue Raven brings solar to more homeowners across U.S. SAN JOSE, Calif., Nov. 3, 2021

SAN JOSE, Calif., Nov. 3, 2021 /PRNewswire/ -- SunPower Corp. (NASDAQ:SPWR), a leading solar technology and energy services provider, today announced financial results for its third quarter ended October 3, 2021.

Residential demand remains strong with record lead generation and 14,200 new customers, up 29% versus a year earlier. New homes market accelerated growth with 5,700 new customers in the quarter, more than double when compared to the previous year.

"Our decision to increase our focus on the residential market was validated by strong sequential third quarter solar and storage demand and deployment, combined with continued margin expansion," said Peter Faricy, CEO of SunPower. "The time is now for homeowners to adopt solar energy and storage, with flexible financing options and favorable clean energy incentives currently under consideration by Congress that make it easier for consumers to help fight against the increasing impact of climate change. Along with our recent acquisition of Blue Raven Solar and new leadership hires, there is a bright future for the next phase of SunPower."

Making Solar Accessible to AllTo meet the goals of a clean energy future in which nearly half of the U.S. is powered by solar, policymakers and corporations must work together to make solar accessible for all customers. With 108 MW of Residential bookings in the quarter, up 36% versus the prior year, the company's total residential install base has grown to nearly 390,000, not including 20,000 from the recent acquisition of Blue Raven Solar in October. SunPower's recent efforts to further expand the reach of solar include:

* Geographic expansion into underpenetrated areas including the Northwest and Mid-Atlantic regions with Blue Raven Solar. * Continued leadership in the new homes market with two new agreements with homebuilders, including a multi-year exclusive agreement with Toll Brothers to provide solar, storage and services to new homes and communities. * Under SunPower's ESG program, the company launched the SunPower 25X25 initiatives- spanning workforce diversity, solar access expansion and dealer diversity programs - to ensure the resilience and economic benefits of distributed solar and battery storage serve historically underserved communities.

Widespread Storage AdoptionAmidst increasing power outages and rising energy prices, consumers are increasingly seeking resiliency with battery storage. According to Wood Mackenzie, annual global storage deployments will nearly triple year-over-year. SunPower is meeting increased market demand for storage solutions through both the direct and dealer channels, with dealers ramping up on sales. The company is on track to achieve a $100 million energy storage bookings run rate by the end of 2021 with 27% of solar customers purchasing storage through SunPower's Direct sales channel.

SunPower was also awarded a $6.65 million grant by the U.S. Department of Energy to participate in its Connected Communities program, working with partners to build two new communities that will compare the benefits of community-level versus residential-level energy storage while providing grid services to the local utility. SunPower will oversee the project and provide energy services technology.

Financial Highlights

($ Millions, except percentages and per-share 3rd Quarter 20212nd Quarter 20213rd Quarter 2020data)

GAAP revenue $323.6 $308.9 $274.8

GAAP gross margin from 18.4% 19.8% 13.5% continuing operations

GAAP net income (loss) $(84.4) $75.2 $109.5 from continuing operations

GAAP net income (loss) from continuing operations$(0.49) $0.40 $0.57 per diluted share

Non-GAAP revenue^1 $323.6 $308.9 $274.8

Non-GAAP gross margin^1 18.7% 20.6% 14.0%

Non-GAAP net income (loss)$9.8 $10.4 $(6.5) ^1

Non-GAAP net income (loss) from continuing operations$0.06 $0.06 $(0.04) per diluted share^1

Adjusted EBITDA^1 $17.5 $22.2 $8.6

MW Recognized 121 125 108

Cash^2 $268.6 $140.5 $324.7

Information presented for 3^rd quarter 2020 above is for continuing operationsonly, and excludes results of Maxeon, other than Cash.

^1Information about SunPower's use of non-GAAP financial information, includinga reconciliation to U.S. GAAP, is provided under "Use of Non-GAAP FinancialMeasures" below

^2Includes cash and cash equivalents, excluding restricted cash

"SunPower concludes the third quarter with plans to focus intently on the fast growing and largely untapped U.S. residential market," said Manavendra Sial, chief financial officer at SunPower. "As we head into the fourth quarter and 2022, we are seeing exceptional performance in lead generation and new customer bookings for residential solar and storage. Commercial & Industrial Solutions (CIS) business also had strong bookings for the third quarter. Our cash position is strong, and there is potential to further reduce our cost of capital. The strength of our balance sheet will also enable us to look toward new product and digital investment, leading to continued growth and market share expansion."

SunPower reported, in line with the company's October 5th update, an Adjusted EBITDA of $17.5 million for this quarter including $(8) million from the CIS segment and a net loss of $84.4 million primarily driven by the non-cash mark-to-market adjustment of the company's holdings of Enphase shares. The company is considering strategic options for CIS and will provide an update in the fourth quarter of 2021.

Other quarter highlights include:

* Recognized 121 MW, including 92 MW for residential. The pipeline for new homes systems is robust with visibility toward an incremental 58,000 homes (up to 230 MW), including multi-family housing. * Residential gross margin was at $0.69/w for the third quarter, up 50% compared to prior year.

Third quarter non-GAAP results exclude net adjustments that, in the aggregate, increased GAAP loss by $94 million, resulting from $86 million related to a mark-to-market loss on equity investments, $5 million related to stock-based compensation expense, and $3 million related to other non-recurring items.

Financial OutlookTo provide additional clarity to investors, the company has provided separate guidance for CIS and Legacy business segments for the fourth quarter of 2021.

Fourth quarter GAAP revenue guidance for SunPower, excluding CIS and Legacy business, is $330 to $380 million and Adjusted EBITDA guidance is $28 to $46 million. Separately for CIS and Legacy business, fourth quarter revenue guidance is $31 to $41 million and Adjusted EBITDA guidance is $(10) to $(5) million due to project schedules and supply chain impacts, similar to that experienced in the third quarter. Fourth quarter GAAP net income guidance, which includes all segments, is $(5) to $15 million.

For the Full Year 2021, revenue and Adjusted EBITDA guidance for SunPower, including CIS and Legacy business, is below the prior guidance of $1,410 to $1,490 and $110 to $130 million, respectively, primarily due to CIS project schedule delays impacting both revenue and Adjusted EBITDA and lower revenues from Light Commercial.

SunPower's residential business continues to be strong, and the company expects 345 to 375 MW recognized for the full year 2021, with 55,000 to 60,000 new residential customers and expects to exit 2021 at >$0.70/w gross margin run rate, consistent with prior guidance.

Given strong residential demand, the company's color on Full Year 2022 Adjusted EBITDA growth for SunPower excluding CIS and Legacy business remains consistent with the October 5th update, including plans for incremental investment in operating expense.

The company will host a conference call for investors this afternoon to discuss its third quarter 2021 performance at 1:30 p.m. Pacific Time. The call will be webcast and can be accessed from SunPower's Investor Relations along with supplemental financial information at http://investors.sunpower.com/events.cfm.

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.

About SunPowerHeadquartered in California's Silicon Valley, SunPower (NASDAQ:SPWR) is a leading Distributed Generation Storage and Energy Services provider in North America. SunPower offers the only solar + storage solution designed and warranted by one company that gives customers control over electricity consumption and resiliency during power outages while providing cost savings to homeowners, businesses, governments, schools and utilities. For more information, visit www.sunpower.com

Forward-Looking StatementsThis 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 regarding achievement of our 2021 goals and our future performance based on bookings, backlog, and pipelines in our sales channels and for our products; (b) our expectations for the policy and regulatory environment, including legislation and prospects for final passage and contents, and the impacts thereof on our business and financial results; (c) our plans and expectations for our products and solutions, including anticipated demand and our ability to meet it, and our ability to meet our targets and goals; (d) our expectations for the impacts of the acquisition of Blue Raven Solar on our business and financial results, our competitive positioning, and positioning for future success following the acquisition; (e) our strategic plans and areas of investment, both current and future, and expectations for the results thereof; (f) our expectations regarding the impact of our 25X25 initiative to help ensure historically underserved communities benefit from solar and storage; (g) our plans and expectations regarding strategic partnerships and initiatives, including our agreement with Toll Brothers and our grant from the Department of Energy, and the anticipated impacts thereof on our business and financial results, as well as our ability to develop cost-effective products and solutions and drive wider adoption; (h) the anticipated future success of our growth initiatives, including our ability to expand into new markets and increase adoption of our financial products, including impacts on our business and financial results; and (i) our fourth quarter financial guidance, including GAAP revenue and Adjusted EBITDA excluding the CIS and Legacy business, GAAP revenue and Adjusted EBITDA for the CIS and Legacy business, and GAAP net income, and related assumptions; (j) our fiscal 2021 guidance, including GAAP revenue and Adjusted EBITDA, as well as expectations for residential MW recognized, new residential customers, and residential gross margin, and related assumptions; and (l) our expectations for fiscal 2022, including Adjusted EBITDA growth and plans for incremental investment, and related assumptions.

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) potential disruptions to our operations and supply chain that may result from epidemics or natural disasters, including impacts of the Covid-19 pandemic, and other factors; (2) competition in the solar and general energy industry and downward pressure on selling prices and wholesale energy pricing; (3) regulatory changes and the availability of economic incentives promoting use of solar energy; (4) risks related to the introduction of new or enhanced products, including potential technical challenges, lead times, and our ability to match supply with demand while maintaining quality, sales, and support standards; (5) changes in public policy, including the imposition and applicability of tariffs; (6) our dependence on sole- or limited-source supply relationships, including our exclusive supply relationship with Maxeon Solar Technologies; (7) 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; (8) our liquidity, indebtedness, and ability to obtain additional financing for our projects and customers; and (9) challenges managing our acquisitions, joint ventures, and partnerships, including our ability to successfully manage acquired assets and supplier relationships. 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 section of our Investor Relations website at investors.sunpower.com. 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.

(c)2021 SunPower Corporation. All rights reserved. SUNPOWER and the SUNPOWER logo are trademarks or registered trademarks of SunPower Corporation in the U.S.

SUNPOWER CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands)

(Unaudited)

October 3, January 3, 2021 2021

Assets

Current assets:

Cash and cash equivalents $ 268,574 $ 232,765

Restricted cash and cash equivalents, current 7,438 5,518portion

Short-term investments 310,720 -

Accounts receivable, net 112,059 108,864

Contract assets 90,235 114,506

Inventories 241,425 210,582

Advances to suppliers, current portion 3,501 2,814

Project assets - plants and land, current portion 12,080 21,015

Prepaid expenses and other current assets 93,381 94,251

Total current assets 1,139,413 790,315

Restricted cash and cash equivalents, net of 4,826 8,521current portion

Property, plant and equipment, net 29,751 46,766

Operating lease right-of-use assets 57,978 54,070

Solar power systems leased, net 46,561 50,401

Other long-term assets 150,205 696,409

Total assets $ 1,428,734 $ 1,646,482

Liabilities and Equity

Current liabilities:

Accounts payable $ 157,742 $ 166,066

Accrued liabilities 87,298 121,915

Operating lease liabilities, current portion 12,609 9,736

Contract liabilities, current portion 70,515 72,424

Short-term debt 66,304 97,059

Convertible debt, current portion - 62,531

Total current liabilities 394,468 529,731

Long-term debt 42,082 56,447

Convertible debt, net of current portion 423,370 422,443

Operating lease liabilities, net of current portion 36,099 43,608

Contract liabilities, net of current portion 28,241 30,170

Other long-term liabilities 137,469 157,597

Total liabilities 1,061,729 1,239,996

Equity:

Common stock 172 170

Additional paid-in capital 2,711,769 2,685,920

Accumulated deficit (2,142,408) (2,085,246)

Accumulated other comprehensive income 9,375 8,799

Treasury stock, at cost (212,740) (205,476)

Total stockholders' equity 366,168 404,167

Noncontrolling interests in subsidiaries 837 2,319

Total equity 367,005 406,486

Total liabilities and equity $ 1,428,734 $ 1,646,482

SUNPOWER CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share data)

(Unaudited)

THREE MONTHS ENDED NINE MONTHS ENDED

October 3, July 4, September October 3, September 2021 2021 27, 2020 2021 27, 2020

Revenues:

Solar power systems, components, and $ 318,607 $ 303,408 $ 267,619 $ 923,252 $ 765,316other

Residential leasing 1,291 1,354 1,284 3,765 3,937

Solar services 3,738 4,165 5,903 11,944 13,766

Total revenues 323,636 308,927 274,806 938,961 783,019

Cost of revenues:

Solar power systems, components, and 260,251 246,053 233,144 760,408 681,649other

Residential leasing 935 678 1,209 2,214 3,722

Solar services 2,800 1,165 3,313 5,784 5,672

Total cost of revenues 263,986 247,896 237,666 768,406 691,043

Gross profit 59,650 61,031 37,140 170,555 91,976

Operating expenses:

Research and development 2,979 4,711 5,344 12,705 19,106

Sales, general, and administrative 51,169 56,730 35,462 155,643 112,193

Restructuring (credits) charges (230) 808 (97) 4,344 2,738

(Gain) loss on sale and impairment of - (68) 386 (294) 253residential lease assets

(Gain) loss on business divestitures, net - (224) - (224) (10,458)

Income from transition services (468) (1,656) (1,889) (5,211) (1,889)agreement, net

Total operating expenses 53,450 60,301 39,206 166,963 121,943

Operating income (loss) 6,200 730 (2,066) 3,592 (29,967)

Other income (expense), net:

Interest income 83 114 104 249 682

Interest expense (6,710) (7,721) (7,090) (22,396) (24,731)

Other, net (86,074) 84,071 155,457 (45,474) 277,100

Other income (expense), net (92,701) 76,464 148,471 (67,621) 253,051

(Loss) income from continuing operationsbefore income taxes and equity in (86,501) 77,194 146,405 (64,029) 223,084earnings of unconsolidated investees

Benefits from (provision for) income 2,194 (2,425) (36,725) 4,993 (38,716)taxes

Net (loss) income from continuing (84,307) 74,769 109,680 (59,036) 184,368operations

(Loss) income from discontinuedoperations before income taxes and equity - - (70,761) - (125,599)in losses of unconsolidated investees

Benefits from (provision for) income - - 6,137 - 3,191taxes from discontinued operations

Equity in earnings (losses) of - - 58 - (586)unconsolidated investees

Net (loss) income from discontinued - - (64,566) - (122,994)operations, net of taxes

Net (loss) income (84,307) 74,769 45,114 (59,036) 61,374

Net (income) loss from continuingoperations attributable to noncontrolling (69) 438 (230) 1,482 2,512interests

Net (income) loss from discontinuedoperations attributable to noncontrolling - (258) - (1,313)interests

Net (income) loss attributable to (69) 438 (488) 1,482 1,199noncontrolling interests

Net (loss) income from continuing (84,376) 75,207 109,450 (57,554) 186,880operations attributable to stockholders

Net (loss) income from discontinued - - (64,824) - (124,307)operations attributable to stockholders

Net (loss) income attributable to $ (84,376) $ 75,207 $ 44,626 $ (57,554) $ 62,573stockholders

Net (loss) income per share attributableto stockholders - basic:

Continuing operations $ (0.49) 0.44 $ 0.64 $ (0.33) $ 1.10

Discontinued operations $ - - $ (0.38) $ - $ (0.73)

Net (loss) income per share - basic $ (0.49) 0.44 $ 0.26 $ (0.33) $ 0.37

Net (loss) income per share attributableto stockholders - diluted:

Continuing operations $ (0.49) 0.40 $ 0.57 $ (0.33) $ 0.99

Discontinued operations $ - - $ (0.33) $ - $ (0.62)

Net (loss) income per share - diluted $ (0.49) 0.40 $ 0.24 $ (0.33) $ 0.37

Weighted-average shares:

Basic 172,885 172,640 170,113 172,242 169,646

Diluted 172,885 194,363 198,526 172,242 200,124

SUNPOWER CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

THREE MONTHS ENDED NINE MONTHS ENDED

October 3, July 4, September October 3, September 2021 2021 27, 2020 2021 27, 2020

Cash flows from operatingactivities:

Net (loss) income $ (84,307) $ 74,769 $ 45,114 $ (59,036) $ 61,374

Adjustments to reconcile net (loss) income to net cash used inoperating activities:

Depreciation and amortization 1,681 2,968 11,927 7,498 45,737

Stock-based compensation 4,726 9,613 6,042 19,776 18,788

Non-cash interest expense 940 1,650 1,747 4,095 5,495

Equity in losses (earnings) of - - (58) - 586unconsolidated investees

Loss (gain) on equity investments 86,254 (83,746) (155,431) 47,238 (275,645)

(Gain) loss on retirement of - - (104) - (3,060)convertible debt

(Gain) loss on sale of investments - - - (1,162) -

(Gain) loss on business - (224) - (224) (10,458)divestitures, net

Deferred income taxes (2,472) 2,264 607 (4,109) 1,639

Other, net (120) (935) (2,182) (6,335) 1,813

Changes in operating assets andliabilities:

Accounts receivable (1,541) (7,023) 54,119 (4,450) 113,029

Contract assets 4,189 24,011 (19,902) 28,687 (22,771)

Inventories (5,583) 10,096 (5,382) (3,758) (12,107)

Project assets (3,488) (2,892) 703 2,817 (11,202)

Prepaid expenses and other assets (11,512) 702 (32,362) (10,915) (4,324)

Operating lease right-of-use assets 2,344 3,490 2,112 8,709 9,898

Advances to suppliers 2,597 568 4,267 (687) 16,296

Accounts payable and other accrued (14,016) (18,077) 51,095 (56,245) (75,141)liabilities

Contract liabilities 5,047 4,907 (3,364) (3,507) (53,818)

Operating lease liabilities (3,868) (3,160) (2,620) (10,457) (8,642)

Net cash (used in) provided by (19,129) 18,981 (43,672) (42,065) (202,513)operating activities

Cash flows from investingactivities:

Purchases of property, plant and (1,623) (1,881) (2,369) (3,934) (13,174)equipment

Investments in software development (2,468) - - (2,468) -costs

Proceeds from sale of property, - 900 - 900 -plant and equipment

Cash paid for solar power systems - - (2,747) (635) (5,394)

Purchases of marketable securities - - (1,338) - (1,338)

Proceeds from maturities of - - 6,588 - 6,588marketable securities

Cash outflow upon Maxeon Solar - - (140,132) - (140,132)Spin-off, net of proceeds

Cash received from sale of - - - 1,200 -investments

Proceeds from businessdivestitures, net of - 10,516 - 10,516 15,418de-consolidated cash

Proceeds from sale of equity 177,780 - 73,290 177,780 119,439investment

Proceeds from return of capital - 2,276 - 2,276 7,724from equity investments

Net cash provided by (used in) 173,689 11,811 (66,708) 185,635 (10,869)investing activities

Cash flows from financingactivities:

Proceeds from bank loans and other 28,273 24,073 62,233 123,669 183,731debt

Repayment of bank loans and other (52,813) (68,497) (63,735) (156,386) (183,070)debt

Proceeds from issuance ofnon-recourse residential and - - 2,790 - 13,434commercial financing, net ofissuance costs

Repayment of non-recourseresidential and commercial - (85) (7,231) (9,798) (7,231)financing debt

Contributions from noncontrollinginterests and redeemable - - 22 - 22noncontrolling interests toresidential projects

Distributions to noncontrollinginterests and redeemablenoncontrolling interests - - (302) - (302)attributable to residentialprojects

Repayment of convertible debt - (62,757) (8,037) (62,757) (95,178)

Proceeds from issuance of Maxeon - - 200,000 - 200,000Solar green convertible debt

Receipt of contingent asset of a - - 11 - 2,245prior business combination

Issuance of common stock to - 2,998 - 2,998 -executive

Equity offering costs paid - - - - (928)

Purchases of stock for taxwithholding obligations on vested (809) (4,335) (74) (7,262) (8,455)restricted stock

Net cash (used in) provided by (25,349) (108,603) 185,677 (109,536) 104,268financing activities

Effect of exchange rate changes oncash, cash equivalents, and - - 109 - 222restricted cash

Net increase (decrease) in cash,cash equivalents, and restricted 129,211 (77,810) 75,406 34,034 (108,892)cash

Cash, cash equivalents andrestricted cash, Beginning of 151,627 229,437 274,359 246,804 458,657period

Cash, cash equivalents, and $ 280,838 $ 151,627 $ 349,765 $ 280,838 $ 349,765restricted cash, End of period

Reconciliation of cash, cashequivalents, and restricted cash tothe unaudited condensedconsolidated balance sheets:

Cash and cash equivalents $ 268,574 $ 140,462 $ 324,741 $ 268,574 $ 324,741

Restricted cash and cash 7,438 5,818 16,605 7,438 16,605equivalents, current portion

Restricted cash and cash 4,826 5,347 8,419 4,826 8,419equivalents, net of current portion

Total cash, cash equivalents, and $ 280,838 $ 151,627 $ 349,765 $ 280,838 $ 349,765restricted cash

Supplemental disclosure of cashflow information:

Costs of solar power systems funded $ - - (1,118) $ - $ 598by liabilities

Property, plant and equipment 1,356 (473) (5,416) 2,530 36acquisitions funded by liabilities

Right-of-use assets obtained in 4,429 - 8,362 15,957 21,786exchange of lease obligations

Deconsolidation of right-of-use - 3,340 - 3,340 -assets and lease obligations

Debt repaid in sale of commercial - 5,585 - 5,585 -projects

Assumption of liabilities inconnection with business - - (29) - 9,056divestitures

Holdbacks in connection with - - - - 7,199business divestitures

Accounts payable balances - - (23,933) - -reclassified to short-term debt

Cash paid for interest 10,168 2,090 11,064 23,734 27,587

Cash paid for income taxes 83 20,144 5,480 20,316 17,181

Use of Non-GAAP Financial MeasuresTo supplement its consolidated financial results presented in accordance with United States Generally Accepted Accounting Principles ("GAAP"), the company uses non-GAAP measures that are adjusted for certain items from the most directly comparable GAAP measures. The specific non-GAAP measures listed below are: revenue; gross margin; net loss; net loss per diluted share; and adjusted earnings before interest, taxes, depreciation and amortization ("Adjusted EBITDA"). Management believes that each of these non-GAAP measures are useful to investors, enabling them to better assess changes in each of these key elements of the company's results of operations across different reporting periods on a consistent basis, independent of certain items as described below. Thus, each of these non-GAAP financial measures provide investors with another method to assess the company's operating results in a manner that is focused on its ongoing, core operating performance, absent the effects of these items. Management uses these non-GAAP measures internally to assess the business, its financial performance, current and historical results, as well as for strategic decision-making and forecasting future results. Many of the analysts covering the company also use these non-GAAP measures in their analysis. Given management's use of these non-GAAP measures, the company believes these measures are important to investors in understanding the company's operating results as seen through the eyes of management. These non-GAAP measures are not prepared in accordance with GAAP or intended to be a replacement for GAAP financial data; and therefore, should be reviewed together with the GAAP measures and are not intended to serve as a substitute for results under GAAP, and may be different from non-GAAP measures used by other companies.

Non-GAAP gross margin includes adjustments relating to gain/loss on sale and impairment of residential lease assets, litigation, stock-based compensation, and amortization of intangible assets, each of which is described below. In addition to the above adjustments, non-GAAP net loss and non-GAAP net loss per diluted share are adjusted for adjustments relating to mark to market gain on equity investments, gain on business divestitures, impairment of property, plant, and equipment, transaction-related costs, non-cash interest expense, restructuring charges (credits), gain on convertible debt repurchased, tax effect of these non-GAAP adjustments, each of which is described below. In addition to the above adjustments, Adjusted EBITDA includes adjustments relating to cash interest expense (net of interest income), provision for income taxes, and depreciation.

Non-GAAP Adjustments Based on International Financial Reporting Standards ("IFRS")The company's non-GAAP results include adjustments under IFRS that are consistent with the adjustments made in connection with the company's internal reporting process as part of its status as a consolidated subsidiary of TotalEnergies SE, our controlling shareholder and a foreign public registrant that reports under IFRS. Differences between GAAP and IFRS reflected in the company's non-GAAP results are further described below. In these situations, management believes that IFRS enables investors to better evaluate the company's performance, and assists in aligning the perspectives of the management with those of TotalEnergies SE.

* Mark-to-market loss (gain) in equity investments: We recognize adjustments related to the fair value of equity investments with readily determinable fair value based on the changes in the stock price of these equity investments at every reporting period. Under U.S. GAAP, mark-to-market gains and losses due to changes in stock prices for these securities are recorded in earnings while under IFRS, an election can be made to recognize such gains and losses in other comprehensive income. Such an election was made by TotalEnergies SE. Further, we elected the Fair Value Option ("FVO") for some of our equity method investments, and we adjust the carrying value of those investments based on their fair market value calculated periodically. Such option is not available under IFRS, and equity method accounting is required for those investments. We believe that excluding these adjustments on equity investments is consistent with our internal reporting process as part of its status as a consolidated subsidiary of TotalEnergies SE. and better reflects our ongoing results.

Other Non-GAAP Adjustments

* Results of operations of Legacy business to be exited: Following the announcement of closure of our Hillsboro, Oregon facility in the first fiscal quarter of 2021, we prospectively exclude its results of operations from Non-GAAP results given that revenue will cease starting first fiscal quarter of 2021 and all subsequent activities are focused on the wind down of operations. We believe that it is appropriate to exclude these from our non-GAAP results as it is not reflective of ongoing operating results. * Loss/Gain on sale and impairment of residential lease assets: In fiscal 2018 and 2019, in an effort to sell all the residential lease assets owned by us, we sold membership units representing a 49% membership interest in majority of its residential lease business and retained a 51% membership interest. We record an impairment charge based on the expected fair value for a portion of residential lease assets portfolio that was retained. Any charges or credits on these remaining unsold residential lease assets impairment, as well as its corresponding depreciation savings, are excluded from our non-GAAP results as they are not reflective of ongoing operating results. * Stock-based compensation: Stock-based compensation relates primarily to our equity incentive awards. Stock-based compensation is a non-cash expense that is dependent on market forces that are difficult to predict. We believe that this adjustment for stock-based compensation provides investors with a basis to measure the company's core performance, including compared with the performance of other companies, without the period-to-period variability created by stock-based compensation. * Amortization of intangible assets: We incur amortization of intangible assets as a result of acquisitions, which includes patents, purchased technology, project pipeline assets, and in-process research and development. We believe that it is appropriate to exclude these amortization charges from the company's non-GAAP financial measures, as they are not reflective of ongoing operating results. * Litigation: We may be involved in various instances of litigation, claims and proceedings that result in payments or recoveries. We exclude gains or losses associated with such events because the gains or losses do not reflect our underlying financial results in the period incurred. We also exclude all expenses pertaining to litigation relating to businesses that discontinued as a result of spin-off of Maxeon Solar, for which we are indemnifying them. We believe that it is appropriate to exclude such charges from our non-GAAP results as they are not reflective of ongoing operating results. * Transaction-related costs: In connection with material transactions such as acquisition or divestiture of a business, the company incurred transaction costs including legal and accounting fees. We believe that it is appropriate to exclude these costs from our segment results as they would not have otherwise been incurred as part of the business operations and therefore is not reflective of ongoing operating results. * Gain/Loss on business divestitures, net: In the second quarter of fiscal 2021, we sold a portion of our residential lease business and certain commercial projects. We recognized a gain and a loss relating to these business divestitures, respectively. We believe that it is appropriate to exclude such gain and loss from the company's non-GAAP financial measures as it is not reflective of ongoing operating results. * Executive transition costs: We incur non-recurring charges related to the hiring and transition of new executive officers. During the second quarter of fiscal 2021, we appointed a new chief executive officer and chief legal officer, and are investing resources in those executive transitions, and in developing new members of management as we complete our restructuring transformation. We believe that it is appropriate to exclude these from our non-GAAP results as they are not reflective of ongoing operating results. * Business reorganization costs: In connection with the spin-off of Maxeon into an independent, publicly traded company, we incurred and expect to continue to incur, non-recurring charges on third-party legal and consulting expenses, primarily to enable in separation of shared information technology systems and applications. We believe that it is appropriate to exclude these from our non-GAAP results as it is not reflective of ongoing operating results. * Restructuring charges (credits): We incur restructuring expenses related to reorganization plans aimed towards realigning resources consistent with the company's global strategy and improving its overall operating efficiency and cost structure. Although the company has engaged in restructuring activities in the past, each has been a discrete event based on a unique set of business objectives. We believe that it is appropriate to exclude these from our non-GAAP results as it is not reflective of ongoing operating results. * Tax effect: This amount is used to present each of the adjustments described above on an after-tax basis in connection with the presentation of non-GAAP net income (loss) and non-GAAP net income (loss) per diluted share. Our non-GAAP tax amount is based on estimated cash tax expense and reserves. We forecast our annual cash tax liability and allocates the tax to each quarter in a manner generally consistent with its GAAP methodology. This approach is designed to enhance investors' ability to understand the impact of our tax expense on its current operations, provide improved modeling accuracy, and substantially reduce fluctuations caused by GAAP to non-GAAP adjustments, which may not reflect actual cash tax expense, or tax impact of non-recurring items. * Adjusted EBITDA adjustments: When calculating Adjusted EBITDA, in addition to adjustments described above, we exclude the impact of the following items during the period: * Cash interest expense, net of interest income * Provision for income taxes * Depreciation

For more information about these non-GAAP financial measures, please see the tables captioned "Reconciliations of GAAP Measures to Non-GAAP Measures" set forth at the end of this release, which should be read together with the preceding financial statements prepared in accordance with GAAP.

SUNPOWER CORPORATION

RECONCILIATIONS OF GAAP MEASURES TO NON-GAAP MEASURES

(In thousands, except percentages and per share data)

(Unaudited)

Adjustments to Revenue:

THREE MONTHS ENDED NINE MONTHS ENDED

October 3, July 4, September October 3, September 2021 2021 27, 2020 2021 27, 2020

GAAP revenue $ 323,636 308,927 $ 274,806 $ 938,961 $ 783,019

Adjustments based on IFRS:

Legacy utility and power plant projects - - - - (207)

Other adjustments:

Results of operations of legacy business to - (4) - (625) -be exited

Construction revenue on solar services - - - - 5,392contracts

Non-GAAP revenue $ 323,636 308,923 $ 274,806 $ 938,336 $ 788,204

Adjustments to Gross Profit Margin:

THREE MONTHS ENDED NINE MONTHS ENDED

October 3, July 4, September October 3, September 2021 2021 27, 2020 2021 27, 2020

GAAP gross profit from continuing operations $ 59,650 $ 61,031 $ 37,140 $ 170,555 $ 91,976

Adjustments based on IFRS:

Legacy utility and power plant projects - - - - (34)

Legacy sale-leaseback transactions - - - - 20

Other adjustments:

Results of operations of legacy business to 82 2,031 - 9,179 -be exited

Construction revenue on solar service - - - - 4,735contracts

(Gain) loss on sale and impairment of (249) (519) (469) (1,262) (1,375)residential lease assets

Stock-based compensation expense 1,055 1,069 623 3,011 1,653

Loss (gain) on business divestitures, net 81 - - 81 -

Amortization of intangible assets - - 1,189 - 4,757

Non-GAAP gross profit $ 60,619 $ 63,612 $ 38,483 $ 181,564 $ 101,732

GAAP gross margin (%) 18.4 % 19.8 % 13.5 % 18.2 % 11.7 %

Non-GAAP gross margin (%) 18.7 % 20.6 % 14.0 % 19.3 % 12.9 %

Adjustments to Net Income (Loss):

THREE MONTHS ENDED NINE MONTHS ENDED

October 3, July 4, September October 3, September 2021 2021 27, 2020 2021 27, 2020

GAAP net income (loss) from continuing $ (84,376) $ 75,207 $ 109,450 $ (57,554) $ 186,880operations attributable to stockholders

Adjustments based on IFRS:

Legacy utility and power plant projects - - - - (34)

Legacy sale-leaseback transactions - - - - 20

Mark-to-market (gain) loss on equity 86,254 (83,746) (155,431) 47,238 (274,362)investments

Other adjustments:

Results of operations of legacy business to 82 2,031 - 9,179 -be exited

Construction revenue on solar service - - - - 4,735contracts

(Gain) loss on sale and impairment of (249) (587) (83) (6,219) (1,122)residential lease assets

Litigation 1,623 3,493 395 10,326 880

Stock-based compensation expense 4,726 10,037 4,454 19,776 13,387

Amortization of intangible assets - - 1,189 - 4,759

(Gain) loss on business divestitures, net 81 (224) - (143) (10,529)

Transaction-related costs 1,328 225 - 1,683 1,863

Executive transition costs 827 502 - 1,329 -

Business reorganization costs 1,045 904 - 2,903 -

Restructuring (credits) charges (230) 808 (97) 4,344 2,138

(Gain) loss on convertible debt repurchased - - (104) - (3,060)

Tax effect (1,292) 1,772 33,769 (3,359) 35,614

Non-GAAP net income (loss) attributable to $ 9,819 $ 10,422 $ (6,458) $ 29,503 $ (38,831)stockholders

Adjustments to Net Income (loss) per diluted share:

THREE MONTHS ENDED NINE MONTHS ENDED

October 3, July 4, September October 3, September 2021 2021 27, 2020 2021 27, 2020

Net income (loss) per diluted share

Numerator:

GAAP net income (loss) available to common $ (84,376) $ 75,207 $ 109,450 $ (57,554) $ 186,880stockholders^1

Add: Interest expense on 4.00% debenture due - 3,126 3,358 - 10,0662023, net of tax

Add: Interest expense on 0.875% debenture due - 67 467 - 1,5072021, net of tax

GAAP net income (loss) available to common $ (84,376) $ 78,400 $ 113,275 $ (57,554) $ 198,453stockholders^1

Non-GAAP net income (loss) available to $ 9,819 $ 10,422 $ (6,458) $ 29,503 $ (38,831)common stockholders^1

Denominator:

GAAP weighted-average shares 172,885 172,640 170,113 172,242 169,646

Effect of dilutive securities:

Restricted stock units - 3,084 3,560 - 3,354

0.875% debentures due 2021 - 1,571 7,785 - 10,056

4.00% debentures due 2023 - 17,068 17,068 - 17,068

GAAP dilutive weighted-average common shares: 172,885 194,363 198,526 172,242 200,124

Non-GAAP weighted-average shares 172,885 172,640 170,113 172,242 169,646

Effect of dilutive securities:

Restricted stock units 2,680 3,084 - 2,864 -

4.00% debentures due 2023 - - - - -

Non-GAAP dilutive weighted-average common 175,565 175,724 170,113 175,106 169,646shares^1

GAAP dilutive net income (loss) per share - $ (0.49) $ 0.40 $ 0.57 $ (0.33) $ 0.99continuing operations

Non-GAAP dilutive net income (loss) per share $ 0.06 $ 0.06 $ (0.04) $ 0.17 $ (0.23)- continuing operations

^1In accordance with the if-converted method, net loss available to commonstockholders excludes interest expense related to the 0.875% and 4.00%debentures if the debentures are considered converted in the calculation of netloss per diluted share. If the conversion option for a debenture is not in themoney for the relevant period, the potential conversion of the debenture underthe if-converted method is excluded from the calculation of non-GAAP net lossper diluted share.

Adjusted EBITDA:

THREE MONTHS ENDED NINE MONTHS ENDED

October 3, July 4, September October 3, September 2021 2021 27, 2020 2021 27, 2020

GAAP net income (loss) from continuing $ (84,376) $ 75,207 $ 109,450 $ (57,554) $ 186,880operations attributable to stockholders

Adjustments based on IFRS:

Legacy utility and power plant projects - - - - (34)

Legacy sale-leaseback transactions - - - - 20

Mark-to-market (gain) loss on equity 86,254 (83,746) (155,431) 47,238 (274,362)investments

Other adjustments:

Results of operations of legacy business to 82 2,031 - 9,179 -be exited

Construction revenue on solar service - - - - 4,735contracts

(Gain) loss on sale and impairment of (249) (587) (83) (6,219) (1,122)residential lease assets

Litigation 1,623 3,493 395 10,326 880

Stock-based compensation expense 4,726 10,037 4,454 19,776 13,387

Amortization of intangible assets - - 1,189 - 4,759

(Gain) loss on business divestitures, net 81 (224) - (143) (10,529)

Transaction-related costs 1,328 225 - 1,683 1,863

Executive transition costs 827 502 - 1,329 -

Business reorganization costs 1,045 904 - 2,903 -

Restructuring (credits) charges (230) 808 (97) 4,344 2,738

(Gain) loss on convertible debt repurchased - - (104) - (3,060)

Cash interest expense, net of interest income 6,628 7,607 6,918 22,149 24,102

Provision for (benefit from) income taxes (2,193) 2,427 36,725 (4,988) 38,716

Depreciation 1,929 3,486 5,156 8,757 12,588

Adjusted EBITDA $ 17,475 $ 22,170 $ 8,572 $ 58,780 $ 1,561

Q4 2021 GUIDANCE

(in thousands) Q4 2021

Revenue, excluding CIS and Legacy segments (GAAP and $330 million -$380 Non-GAAP) million

Adjusted EBITDA, excluding CIS and Legacy segments $28 million -$46 million

CIS and Legacy segments Revenue (GAAP and Non-GAAP) $31 million -$41 million

CIS and Legacy segments Adjusted EBITDA $(10) million -$(5) million

Net Income (GAAP) $(5) million -$15 million

* Consistent with prior quarters, Adjusted EBITDA guidance for Q4 2021 for all segments include net adjustments that increase GAAP net loss by approximately $25 million primarily relating to the following adjustments: stock-based compensation expense, restructuring charges, litigation, interest expense, depreciation, amortization, income taxes, and other non-recurring adjustments.SUPPLEMENTAL DATA

(In thousands, except percentages)

The following supplemental data represent the adjustments that are included orexcluded from SunPower's non-GAAP revenue, gross profit/margin, net income(loss) and net income (loss) per diluted share measures for each periodpresented in the Consolidated Statements of Operations contained herein.

THREE MONTHS ENDED

October 3, 2021

Revenue Gross Profit / Margin Operating expenses (Benefits Sales, Other from) Net income Commercial Commercial Research expense provision (loss) Residential, and Intersegment Residential, and Intersegment general Restructuring (income), for income attributable Light Industrial Others eliminations Light Industrial Others eliminations and (credits) to Commercial Solutions Commercial Solutions and charges net taxes stockholders development administrative

GAAP $ 281,635 $ 40,324 $ 1,677 $ - $ 62,680 $ (2,739) $ (208) $ (83) $ - $ - $ - $ - $ - $ (84,376)

Adjustments based on IFRS:

Mark-to-market (gain) loss on equity investments - - - - - - - - - - - 86,254 - 86,254

Other adjustments:

Results of operations of legacy business to be exited - - - - - - 82 - - - - - - 82

(Gain) loss on sale and impairment of residential lease assets - - - - (249) - - - - - - - - (249)

Litigation - - - - - - - - - 1,623 - - - 1,623

Executive transition costs - - - - - - - - - 827 - - - 827

Stock-based compensation expense - - - - 677 352 26 - 624 3,047 - - - 4,726

(Gain) loss on business divestitures, net - - - - - - 81 - - - - - - 81

Business reorganization costs - - - - - - - - - 1,045 - - - 1,045

Transaction-related costs - - - - - - - - - 1,396 - (68) - 1,328

Restructuring (credits) charges - - - - - - - - - - (230) - - (230)

Tax effect - - - - - - - - - - - - (1,292) (1,292)

Non-GAAP $ 281,635 $ 40,324 $ 1,677 $ - $ 63,108 $ (2,387) $ (19) $ (83) $ 9,819

July 4, 2021

Revenue Gross Profit / Margin Operating expenses (Benefits Sales, (Gain) loss Other expense from) Net income (loss) Commercial Research Restructuringon sale and (income), provision attributable Residential,and Intersegment Residential, Commercial and Intersegment general impairment (Gain) loss on for incometo Light Industrial Others eliminations Light Commercial Industrial SolutionsOthers eliminations and charges of business divestitures,net stockholders Commercial Solutions and (credits) residential net taxes development lease assets administrative

GAAP $254,119 $48,176 $6,632$ - $ 57,102 $ 321 $3,189$ 419 $ - $ - $ - $ - $ - $ - $ - $ 75,207

Adjustments based on IFRS:

Mark-to-market (gain) loss on equity investments - - - - - - - - - - - - - (83,746) - (83,746)

Other adjustments:

Results of operations of legacy business to be exited- - (4) - - - 2,031 - - - - - - - - 2,031

(Gain) loss on sale and impairment of residential - - - - (519) - - - - - - (68) - - - (587) lease assets

Litigation - - - - - - - - - 3,493 - - - - - 3,493

Executive transition costs - - - - - - - - - 502 - - - - - 502

Stock-based compensation expense - - - - 627 382 60 - 1,456 7,512 - - - - - 10,037

(Gain) loss on business divestitures, net - - - - - - - - - - - - (224) - - (224)

Business reorganization costs - - - - - - - - - 904 - - - - - 904

Transaction-related costs - - - - - - - - - 375 - - - (150) - 225

Restructuring charges (credits) - - - - - - - - - - 808 - - - - 808

Tax effect - - - - - - - - - - - - - - 1,772 1,772

Non-GAAP $254,119 $48,176 $6,628$ - $ 57,210 $ 703 $5,280$ 419 $ 10,422

September 27, 2020

Revenue Gross Profit / Margin Operating expenses Provision Other for Sales, (Gain) loss expense Net income Commercial Restructuringon sale and (benefits(loss) Residential,and Intersegment Residential, Light Commercial and Intersegment general impairment (income), from) attributable Light Industrial Others elimination Commercial Industrial Others elimination (credits) of income to Commercial Solutions Solutions and charges residential net stockholders lease assets taxes administrative

GAAP $ 197,710 $74,333 $10,056$(7,293) $ 34,625 $ 3,931 $(3,168)$ 1,752 - - - - - $ 109,450

Adjustments based on IFRS:

Mark-to-market (gain) loss on equity investments - - - - - - - - - - - (155,431)- (155,431)

Other adjustments:

(Gain) loss on sale and impairment of residential lease assets- - - - (469) - - - - - 386 - - (83)

Litigation - - - - - - - - 395 - - - - 395

Stock-based compensation expense - - - - 623 - - - 3,831 - - - - 4,454

Amortization of intangible assets - - - - - 1,189 - - - - - - - 1,189

Restructuring (credits) charges - - - - - - - - - (97) - - - (97)

(Gain) loss on convertible debt repurchased - - - - - - - - - - - (104) - (104)

Tax effect - - - - - - - - - - - - 33,769 33,769

Non-GAAP $ 197,710 $74,333 $10,056$(7,293) $ 34,779 $ 5,120 $(3,168)$ 1,752 $ (6,458)

NINE MONTHS ENDED

October 3, 2021

Revenue Gross Profit / Margin Operating expenses (Benefits Sales, (Gain) loss (Gain) Other expense from) Net income Commercial Research Restructuring on sale and loss (income), provision (loss) Residential, and Intersegment Residential, Commercial and Intersegment general impairment on for income attributable Light Industrial Others eliminations Light Industrial Others eliminations and charges of business net to Commercial Solutions Commercial Solutions and (credits) residential divestitures, taxes stockholders development lease assets net administrative

GAAP $ 773,691 $ 154,763 $ 10,496 $ 11 $ 172,356 $ 1,793 $ (5,191) $ 1,597 $ - $ - $ - $ - $ - $ - $ - $ (57,554)

Adjustments based on IFRS:

Mark-to-market (gain) loss on equity investments - - - - - - - - - - - - - 47,238 - 47,238

Other adjustments:

Results of operations of legacy business to be - - (625) - - - 9,991 (812) - - - - - - - 9,179exited

(Gain) loss on sale and impairment of - - - - (1,262) - - - - (4,663) - (294) - - (6,219)residential lease assets

Litigation - - - - - - - - - 10,326 - - - - - 10,326

Executive transition costs - - - - - - - - - 1,329 - - - - 1,329

Stock-based compensation expense - - - - 2,145 734 132 - 2,450 14,315 - - - - - 19,776

(Gain) loss on business divestitures, net - - - - - - 81 - - - - - (224) - - (143)

Business reorganization costs - - - - - - - - - 2,903 - - - - - 2,903

Transaction-related costs - - - - - - - - - 1,930 - - - (247) - 1,683

Restructuring charges (credits) - - - - - - - - - - 4,344 - - - - 4,344

Tax effect - - - - - - - - - - - - - - (3,359) (3,359)

Non-GAAP $ 773,691 $ 154,763 $ 9,871 $ 11 $ 173,239 $ 2,527 $ 5,013 $ 785 $ 29,503

September 27, 2020

Revenue Gross Profit / Margin Operating expenses Provision Other for Sales, Loss (gain) expense (benefits Net income Commercial Commercial Research Restructuringon sale and from) (loss) Residential,and Intersegment Residential,and Intersegment general impairment (Gain) loss on business (income), attributable Light Industrial Others elimination Light Others elimination and charges of divestitures, net income to Commercial Solutions Commercial Industrial and (credits) residential net stockholders Solutions development lease assets taxes administrative

GAAP $584,748 $175,471 $55,615$(32,815) $89,468 $9,808 $(18,906)$11,604 $ - $ - $ - $ - $ - $ - $ - $186,880

Adjustments based on IFRS:

Legacy utility and power plant projects - (207) - - - (34) - - - - - - - - - (34)

Legacy sale-leaseback transactions - - - - 20 - - - - - - - - - - 20

Mark-to-market (gain) loss on equity investments- - - - - - - - - - - - - (274,362)- (274,362)

Other adjustments:

(Gain) loss on sale and impairment of - - - - (1,375) - - - - - - 253 - - - (1,122) residential lease assets

Construction revenue on solar services contracts5,392 - - - 4,735 - - - - - - - - - - 4,735

Litigation - - - - - - - - - 880 - - - - - 880

Stock-based compensation expense - - - - 1,653 - - - - 11,734 - - - - - 13,387

Amortization of intangible assets - - - - - 4,759 - - - - - - - - - 4,759

(Gain) loss on business divestitures, net - - - - - - - - - - - - (10,458) (71) - (10,529)

Transaction-related costs - - - - - - - - - 1,863 - - - - - 1,863

Restructuring charges (credits) - - - - - - - - - - 2,138 - - - - 2,138

(Gain) loss on convertible debt repurchased - - - - - - - - - - - - - (3,060) - (3,060)

Tax effect - - - - - - - - - - - - - - 35,614 35,614

Non-GAAP $590,140 $175,264 $55,615$(32,815) $94,501 $14,533 $(18,906)$11,604 $(38,831)

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SOURCE SunPower Corp.