Benzinga | Jan 21, 2022 05:21AM EST

SunPower Sees Prelim. GAAP Revenue Within Previously-Guided Range Of $361M-$421M; Adj. EBITDA Expected To Be At Low End Of $18M-$41M Range

SAN JOSE, Calif. (January 20, 2022) -- SunPower Corp. (NASDAQ:SPWR), a leading solar technology and energy services provider, today announced it is taking proactive measures to enhance customer care by replacing certain third-party connectors within its Light Commercial Value-Added Reseller (CVAR) and Commercial & Industrial Solutions (CIS) systems.

Through a product quality assessment, the company has identified a cracking issue that developed over time in certain factory-installed connectors within third-party commercial equipment supplied to SunPower. There have been no reported safety incidents attributed to this issue, nor has there been any degradation of performance. Nevertheless, to avoid potential longer-term complications and ensure an excellent lifetime customer experience, SunPower is proactively replacing all of these connectors. The company plans to replace the connectors in impacted equipment largely during 2022. Based on SunPower's testing, the company expects systems to continue to operate safely while awaiting replacement.

SunPower expects approximately $27 million of supplier-quality related charges in fourth quarter 2021 and approximately $4 million in the first quarter of 2022 as it pursues recovery of costs from the suppliers. The charges are expected to be funded with cash on hand.

GAAP Revenue for fourth quarter 2021 is expected to fall within the previously guided range of $361 to $421 million. Excluding the charge, fourth quarter adjusted EBITDA results are expected to be at the low end of SunPower's previously disclosed guidance range of $18 to $41 million1. Factors affecting fourth quarter adjusted EBITDA include approximately $6.5 million of Residential EBITDA effectively pushed into 2022 as the result of weather in California and COVID impacts. Another $3 million was invested in sales and marketing to rapidly expand SunPower's serviceable solar market to more customers in underpenetrated areas nationally.

These unaudited results are preliminary and prior to the completion of the company's annual independent audit and therefore are subject to adjustment. The company is not able to provide a quantitative reconciliation of the adjusted EBITDA guidance non-GAAP measures to the corresponding GAAP revenue measure without unreasonable efforts due to the preliminary nature of the results.

"We plan to fundamentally change how consumers engage with energy by providing the highest quality products and services available. This includes ensuring our customers are taken care of before potential problems arise," said Peter Faricy, CEO of SunPower. "With high-growth opportunities spanning our existing

and evolving markets, customers can count on us for transparency and the right tools to power the world with solar. It's part of our commitment to do the right thing."