SPWR - Earnings call transcript Q1 2018

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Operator

Welcome to the SunPower First Quarter 2018 Earnings Call. At this time, all participants will be in a listen-only mode until the question-and-answer portion of today's conference.

Now, I'll turn the meeting over to your host, Bob Okunski, Vice President of Investor Relations with SunPower.

You may begin.

Bob Okunski

Thank you, Ryan. everyone first welcome conference XXXX to call. like to quarter our earnings I'd

today, off call followed will and the results review we On call XXXX quarter start Tom our who from financial for Werner, our first Boynton, turning strategic Tom with to our Chuck CEO the by before CFO, will back review operational an guidance.

the website. reminder, will be today on call replay our available of this Investor of a page As a Relations later

Relations Events statements forward-looking as location, the that subject today's enhance affect may data the of on some Tom regarding call, posted quarterly make that, During page Form Please of a on that begin statements. this during our our in forward-looking will risks these reports various described today's release, XX-Q. information uncertainties have sheet set those call, SunPower, our see Safe of are Investor factors call, In and to slide like over XX-K of Tom? I'd X. Werner, reference With press call PowerPoint & we metrics to a this historical supplemental To Presentations we'll we of to slide and those that XXXX have on who'll posted additional also presentation, documents which are website. today's Harbor the the well. detailing slides, turn our CEO we same for

Thomas H. Werner

performance quarter. to of I'd board. an our On on SolarWorld acquisition you the well us. XXXX review for particular, this posted thank business including a performance first and highlight which In strong like QX joining QX initiatives, with executed We the our record U.S. financial update we Bob, residential provide segment in call, quarter across Thanks, Americas. our strategic and proposed will

key SunPower expanding We plant milestones while global and power Solutions commercial in our businesses, met our footprint. also further

Accomplishments as into performance. our fourth U.S., our quarter. share move slide performance Please beat believe we of I'll DG during Outside surpassed expanding Residential, the again our posted our well Soup. Campbell and for key plan reduced and key for and year-over-year In include expenses. a momentum year-over-year of operating as with carport, review the growing to commercial, our forecasts and in we've In on and pricing strong the share Europe executed that X Finally, as the deployment for record both executed growth. QX demand Japan Energy, the well X-megawatt quarter U.S., EBITDA markets segment now QX, despite our number completion forecast turn remain In revenue X-megawatt and seasonality over number business. XX% carried XX%. market of a both megawatt of ground-mount in QX system well in favorable. rooftop exceeded project sale we and we by projects, markets. as gained including we we Constellation JBAB in QX our all one for We megawatt to

interest We Helix storage approaching in rates with see solutions, continue our attach to XX%. strong solar-plus-storage particularly

international further of XXXX. booked our U.S. to of visibility strong, is expected in the Demand pipeline awarded. XX% growth XXXX in leading consolidate intend in already we DG our either by and in segment XXX% $X.X markets commercial of forward, Looking key role commercial, particularly megawatt virtue with or billion deployment U.S. annual with our forecast

over growth the XXX-megawatt to later in were shipments year. quarter SunPower X. current our turn in continues plant Please review year-over-year than shipment recently this project to expected awards EBITDA more exceeded start revenue megawatt, a and XXX awarded initial X Hawaii our rapidly, SunPower and and volume megawatts. project for grow Oasis business. We of with very power Solutions SPS totaling and times with QX Solutions Now, to let's side targets

our Our sale project the project executed of well plant our Boulder also as in the legacy Solar Mexico. completed as well during we as development XXX-megawatt power quarter team

planned Looking XXXX, in XXX% forward, approximately we up year-on-year. expect continued strong of X SPS with growth shipments in the gigawatt

P-Series incremental ramps multi-gigawatt to also will this capacity, year serve our As to DG utilize increasingly capacity demand. we JV DZS market international this

expect We margin expansion in meaningful drive to this SPS.

and turn Fab targets. upstream yield to X for on and cost Moving beating again the OEE technology, quarter overall We slide X. our again with targets and volume output, please achieved the

times call We X next of cost to equipment previous NGT. with aggressively solar manufacturing technology, efficiency our produce capital our industry-leading products, around SunPower generation to NGT continue enable our IBC generation utilizing with will panels similar we develop the which IBC commodity to technology.

key We R&D volume first in in San NGT with X first during silicon are QX. ramp our from in line milestones technology expect June line our pilot Jose all production hitting and Fab

I acquire X. briefly slide to Americas. would Now, on to comment like recent announcement our turn Please to SolarWorld

decision signed As follows. we behind is announced, strategic XXX% SolarWorld an Americas purchase logic agreement this of shares. as The to

invest segment. right it U.S. see to driving sustainable First, domestic in particularly economics, in we the is time in as we DG feel long-term demand the market the manufacturing favorable

the the explicitly tariff Second, by which catalyzed XXX ruling was decision manufacturing. rewards U.S.

on acquisition address demand increasing domestic SolarWorld's directly us will for enable market industry-leading the in current plant DG PERC technology our and this Third, segments, power both capacity. P-Series to capitalizing

competitive SolarWorld the structure. combining a forces, synergies believe We in of operations become manufacturer. there go-to-market are can Finally, believe and Americas that solar more we by areas significant

details; do to the various Some cash reasons, specifics material the purchase for consideration I not price, we financials. consider of give our but the cannot

Oregon in solar cell nameplate assembly SolarWorld's facility mono-PERC manufacturing fab capacity, megawatts XXX of XXX-megawatt approximately capacity. and module comprises of

one-third approximately the capacity U.S. of closing will the manufacturing Following acquisition, be based. of SunPower's proposed

retrofit improvements, for continue portion are and to with we In working industry-leading a IBC factory the modco to our tariff summary, and the plan technology. P-Series XXX panel exclusion also U.S. technology. through make capital to manufacturing process of our committed work increase some We we

take of Now, X. Please I to slide to strategy. evolution few to a would like long-term the minutes review our turn

of key operational been for have initiatives. the through strategic working we over a a know, the of transform to you of many number year and As implementation company

solid of involves phase for the our to now last increased our XX the and with which company initiatives restructuring turning are over Given the accelerated profitability. months, strategy these next progress the attention growth we positioning

Specifically, plan believe around operational and that upstream with increasingly we autonomy several our benefits. structure units to business and this have will flexibility. downstream greater We organization align

First, focus we believe this long-term approach strategic drive and transparency. improved financial will operational

operating we accountability our thereby expect to Second, of cost costs two the level. down to for moving most OpEx BUs, reduce by corporate the driving into overhead

can potential industry in with structure, this agility. each the increased and parts Finally, speed of to developments react with relevant value chain strategic BU

detail. large-scale market DG largely manufacturing strategy which by SunPower's on where that market this a expected unit upstream forecast. can evolved five-year our believe segment the that will distributed and XX%. a I'll years are would for like I demand due business There towards will technology attributes. remain shows in believe deployment. portfolio Slide our We markets, power stable our we comprise product around superior over with expand this capture generation to product shift towards support growth X the factors solar Now, plants focus increasingly current start to highly DG number past has broad period, biased while we margins two in in of the differentiated strategy greater to

value with pressure on particularly power to electricity chain. prices puts penetration. wholesale entire continue markets of all, the solar midday mature in plant margin fall, solar significant This, First turn, in

Secondly, limited of of can farms make buildable constrained conventional system solar some transmission availability locations, large-scale in large difficult. and sites capacity development

structures. the electricity decreasing interest to rate that (XX:XX) propositions makers cost retail, battery are of driving major to and the wholesale, approximate on-site relate self-consumption policy of options. is world, demand not Finally, around storage increasingly the solar many Therefore, rules favor markets peak deployment behind-the-meter, biasing in shaving power load of value in

XX, and extremely positioned market high-efficiency, a to shift In building with durability capitalize high-efficiency efficiencies to be As the in from and homeowner perspective. a long SunPower products technologies. long-term Most XX% of product technology products, levels are interest to turn thereby IBC benefit our DG DG DG will from more the general, vested is likely with a and owned system DG market panel our towards and commercial SunPower's by panel of on solar line been industry. in safety. highest shows residential expected for the choice reliability, well Please solar be customers systems solar leader evolution to systems of reliability the or also applications. up in slide high-reliability light the the which site-constrained have

products Our X-Series new NGT to technology XX% will offer customers with up similar manufacturing cost. lower performance our to

we this capacity over on our we have our second expect we older are in half specific our more unique Day, provide margin accretive We years, year. our planning Analyst retrofit P-Series process. details scale-up two new to generation We'll plans the past existing of fabs NGT at this which Also, and the successfully be to commercialized NGT for highly ramped as technology.

panel offer also currently at compared efficiency in superior with the reliability with conventional products XX% in and solar average benefits efficiency P-Series to a map future. Our road near XX% panels

increasingly Our our suitable focus applications products power for introducing plan was DG we capacity global for DG products initial global business. With through are new group. plant the sales ramp P-Series available now, and solar more to solutions

has footprint. offer will recently of downstream to broaden U.S. be our our will Americas, market. residential SunPower coverage SolarWorld panels also into with announced product to where position the DG conventional Finally, This U.S. portfolio acquire in the leading market and we plans further mono-PERC business a

strategy, say particularly business. like relation I'd a Now, words in to to Please downstream our XX. about turn DG our slide to domestic few

toward segments. that unique SunPower development strong leading we has more years. As forefront Over what technology at DG on their the trend have both and puts market business expected in product time, most the build residential the U.S. and to deployments five in are of capitalize of to years. commercial you franchise have channel we leveraged over position than a DG strategy become been for the XX coming DG in the aware, the This

each a DG segments. closer Let's take look of at our

expand leader flexible U.S. First, have been complete of margins. and all solution, financing and we that a channel in (XX:XX) technology, our currently our building market customer options, Equinox satisfaction broad share are XXXX in further we since residential portfolio and industry-leading segment. maintaining this while will strong We product believe our differentiated residential;

solution that storage tools Our costs. further will design to battery We the of Equinox decrease efficiency includes customer addition drive of sophisticated adoption believe dealer complete improve acquisition Equinox. and

flexibility enables and market and conditions. fixed to cost, Our unique quickly channel dealer loyalty brand changing builds to adjust exposure, minimizes

planned our distribution of Our will their of SolarWorld go-to-market acquisition expand virtue platform further by legacy network. Americas

commercial commercial. country turn industry, in me including to private X.X We commercial projects roof, improves remain in the the We and finding to the offer cost than one market share our driven incorporated economics commercial customers the Last both energy broadest across and prices. number product Helix Helix for performance. that reduces carport and standardized installation lowers let the product to the by the public all systems, demand architecture charges XX%. player and today, our with sectors. attach the customers allow operation more in Now, our of compelling reduce are offering gigawatt to as Customers line into of year, product has rate storage climbed our we time, peak storage ability ground-mount

turning business, channel specifically with call benefits on to would I integration. cross-platform to few in storage Chuck, Before we respect like a to and words DG some over see structure the say our

U.S. competitors. Let's start sells nearest residential and our volume downstream combined our about On compared DG megawatt with twice with the basis, business scale. currently a commercial,

and As cost DG our believe we share operating further that scale advantage widen. our increase platform, across we continue will drive to market

our solar-plus-storage developing commercial been have solutions for we XXXX channel. in use since storage; Secondly,

America We and one maximum have two installed decide across has understands of country system system learn the forecast when than do. performance we given largest algorithms the DG electricity solar solar developed customer quantity benefit. benefits. dispatch patterns, and output, stored for a to This economic has SunPower in software usage proprietary better no fleet energy to

in smarter deep is tools First, customers and to business. software have same our storage step higher can to algorithms in us understanding commercial allowed our system the developed less the for require guarantee performance for second, benefit. customer has residential system confidence. us leverage performance with And deployed the segment develop we systems to our we next that The

internal both commercial such organizations. continuing and commercial of networks integration the the operations. residential and and energy Finally, short, DG data resources we and believe channel share across financial see residential and from common platform, synergy as our U.S. as that platform, increasing product capture can synergy In we as increasing scale-up monitoring our as management reseller tools, operational well development our we

contributor I and for want great member service excellent to eight I thank his He has Before team executive the years to of conclude, Chuck of the to SunPower. been company. partner, Boynton an key

wish him call that, to turn to be the like Chuck? over we best future While would Chuck missed, financials. to the his With of he endeavors. will review want the to luck in I

Charles D. Boynton

Good Tom. afternoon. Thanks,

Tom allowing eight I'd have like is company Before great the the with getting and started, I world-class to to last and for of directors serve the me thank company a enjoyed SunPower working board a years. team.

financial remain to a reins With break. completion footing, our made of followed this year CFO by of XpointX. I transformation will we the our to our made on this over are sheet step a transformation but the complete other time right felt for phase I is generate our the this is ago, after de-lever will the Manavendra hand that to remind on was and months transformation take I'll a a decided decision to assets SunPower this statements. and everyone, have plan, new asset we filed, in smooth progress the officially we sales we more as sell plan and new a our now to the significant This Sial. solid to simplify with I To company ensure our down. to couple our sell comment later. started XX-Q cash, CFO, transition balance to near But

and In we CEO sale. agreed remain addition, the Chairman to I've XpointX the as of complete until

financials. Now, turn slide review the Please let me XX. to

for pleased with forecasts. margin our the results as our are we exceeded and We EBITDA adjusted quarter revenue,

due but to above project the non-GAAP than all QX, sale project. planned guidance [XXX-megawatt] (XX:XX) plants large executed XXX-megawatt Our sequentially lower was segments. of (sic) we revenue Power to our was better in Guajiro development in well as sale due a

line North commercial was X.X%, our was QX. a of line We team material in bookings. in prior American after a with and consolidated record margin Our solid business one-time tariffs even with year gross our posted year-over-year in last ahead our Overall, strong business a year growth plan saw as charge. residential absorbing with non-GAAP

system of In was Overall, with sales North while XX%, effects. up due the the XX% million mix were products power OpEx and we plan. project continued reduce excluding by mentioned, related due this Overall, Commercial Specifically, We remain as in our and the down seasonal last the both seasonality and with and were the our plant America, to was total, from cash least our our as ago. XX down versus XX% plant loan sequentially. Europe Japan our margin were of forecasts. a year-over-year saw operating yet timing year-over-year, up at company the was Non-GAAP one-time charge U.S. shipments, sale record of completions. we expenses with line globally, expenses. for costs track fixed up results to megawatts ahead and I a a million power $XX In of and impairment segment leased residential, margins U.S. overhead to year XX% in on we install reduce sequentially In in charge, significantly in quarter assets quarter, were as this of margins $XX again change year. residential to to deployed

was for our cash forecast. Finally, few financial the a quarter overall to of the profitability. XX. generate to slide and sustained transformation below Please CapEx now I is turn $X would like to for The quarter. million goal discuss our plan return to highlights

sales on well and in the great making cutting half are as of second XXXX. our QX progress asset to cost close expect significant We with as

and is cost debt up million. event we undrawn a sale $XXX of delayed, positioned bridge sale the of with pay we have XpointX. lined facility we our our that from In convertible have cash for We the position, maturity cash a the XpointX low June current pending off X well to are believe on revolver

making in solid expect approximately our lease both assets on the we to cash financial plans portfolios. our incremental commercial specifically statements, and are residential we plan simplify deconsolidation. progress We to achieve selling million existing of $XXX our complete, from and generate When

have to sale we lease systems, new In addition, up for front GAAP plan full treatment.

to our of believe performance materially QX. NCI fundamental financial no reported but longer in this will Tom complete, with phases to after will easier the this several statements. and adjusted investors to make is transaction the SunPower first for this record EBITDA. which will income, in expect this our we transaction it We simplify impact one in We understand our reduce guidance, is discuss close much change expect

sheet, a under recognition historical to Finally, standard, be shareholder full we accounting. pick-up balance estate is in adopted material on equity the our prior accounting due new and the ASC method, standard new by elected impact so deferral had million. $XXX of XXX, will retrospective revenue real This equity comparative. improving periods positive The

that is development on expected now approximately brief sale Now like we've plant would books. well our the XpointX at on as status transaction, price power a I XXX, our provide pipeline. XpointX ASC as adopted reflected to

was For for All shareholder other this expect to closed, cash $XXX When XpointX, to scheduled the effective, the we SunPower. regulatory generate proxy and in declared partnership million vote is approximately approvals in May transaction process. are XX.

As discussed away been Solutions. from past, development power we we in SunPower have the transitioning have to plant

have We in this segment. decided stop portfolio new million and pursuing impairment of GAAP sell to development the change, recorded plan of both power and power $XX projects to projects. a our plant Because in non-GAAP plant charge we now remaining

in sale completing making these progress one project in of are in QX. the Mexico We assets, sale

expect We $XXX also expect of When balance QX. substantially sales non-recourse sheet. to to our we QX significant from but more generate million to complete, asset close are monetizations only in approximately eliminate and the sales lease cash, by debt be of complete not

maturity major addition, convert, In reduce XX% debt we recourse our XXXX with maturity our not approximately the until will next of with XXXX. the by

the performance that, summary, with capital were for sustained regain will these business, With Tom? pleased our our further as made profitability. to we Tom the progress turn QX, call as in long-term in improve we our transactions, resources guidance. I'll SunPower. the structure to we provide transformation well our de-risk the and With back of In

Thomas H. Werner

Thanks, guidance year discuss Chuck. for I would now our and to fiscal XXXX. the second like quarter

QX XXXX XX. our guidance impact reminder, as turn a the for of and As whole. estimated our slide XXX ruling assumes a Please to

of Second loss million $XXX X.X%; million; a gross million. as $XXX $XXX guidance XXXX $XXX quarter of follows: revenue to to margin net to and GAAP of million fiscal is X.X%

as expects also basis, On million deferrals XXXX gross quarter million sale-leaseback transactions, of the of GAAP as $XXX well $XX X%, million, company's deployed to X% the of initiatives. range of timing to impact $XXX revenue due restructuring guidance and of Second the $XX the revenue to a company megawatts non-GAAP the to charges includes in margin impact related EBITDA to million, XXX. XXX of to and

non-GAAP to plant quarter the differences of during quarter. related Second recognition guidance revenue the projects reflects timing certain power

XXXX XXXX, billion expect revenue For to and non-GAAP $X.X to expenses $XXX billion expenditures on X.X X.X. XX, less billion million company's as million. slide of and than balance approximately of the of follows: is $X.X range basis The on of billion non-GAAP a we in turn to of deployed gigawatts capital $XXX the with fiscal basis operational $X.X guidance to a please year GAAP $X

We'll does million guidance further from of case same tariffs guidance income XXX as XXXX associated negative range $XXX adjusted of non-controlling to interest and of in of impact sale proposed improvement comparative year-over-year our On half the $XX million the section the to questions please. $XX the under the EBITDA well basis, Our expect acquisition This to the in XX% as from Also, of $XX EBITDA second expect related now, approximately year. a a assumptions, take Americas. with to year we in XX% XXXX adjusted we impact anticipated reflects fiscal lease growth, a of reduction portfolio the EBITDA now include company's assumes resulting million. the range trade not XXXX. SolarWorld be million

Operator

At session. this the time, now you. we question-and-answer are to Thank ready begin

name. Our first and Frank, state question your please comes from Tyler company

Tyler Charles Frank

outlook Can focus. ramp and here that off seems XXX? Mexico SolarWorld? a you're then after to for potentially of think to P-Series U.S. getting we Is Robert completely? in discuss And you. the you given U.S. now the just overall the taking transfer like more both question. then, for the an Baird. about should How Thanks of exemption the in for the going table Section it acquisition that Thank

Thomas H. Werner

All right.

going We tariffs really So, you think interpret tariffs we We be this do absolutely year We of down that to that we the the clear from bigger anyone. just about number, a need we than chose and the the excluded. be to think absolutely incorporated be it. size to rest just we to should rather than go year into better not criteria not that were expect of subtracted exempted.

So, it if exempted, anybody is be SunPower. should

criteria we've are familiar those the Chinese. by been never think Obviously, subsidized to most. I

what technology, has unique consumer It's wants make a have The We only it. USTR can we asked. American exactly it.

having the Thursday, that Now, again communicated of and, this will don't know that, making be of answer. said know course, I be any needed D.C. the to timing we've we that and in we answered answered. don't Washington questions sure that

to In say because it are be terms concentration, U.S. fair say of would I increasingly on focused U.S. a company. U.S. we the is we're would that what that

Our that U.S. great to strength. market. is DG SunPower's market plays market this works in a product increasingly The

power technology, importantly, as plant you we module the in that most other international the market. market the technologies, P-Series point being However, address and, your have and that question, out

that of So, we any And dependent think diversified. on continue I we've know have tracked company change. And region. well because overly focused I to policies as being us that on that a always wouldn't can you be say we're those diversified regionally

Tyler Charles Frank

Excellent. Thank you.

Operator

Please your Our comes Brian from next state question name. Lee. company

Hank Elder

This is Brian Elder Hank on for Goldman Lee Hey, from guys. Sachs.

solar some pick the is of and states, results to suggest beginning your up year-over-year. then data are in strong trends improving So,

does the industry DG then and for compare will quantify how the that the segment of residential year-over-year what expect, growth can kind you but is So, you I think know you to can we expectations? said XX% do,

Charles D. Boynton

Thank Hank. you,

we're U.S. believe taking we're I resi think a We in seeing that has share. what been QX. record

be the there we the is and in various light than faster policies we gains. have would U.S. to expect say market for number growth of to We will market. grow we're I in that And share one Also, think expect the commercial. what continued

to share grow We and that maintain expect in commercial.

Hank Elder

did think or through get that in year? you can the towards Do guys that XX% you you XQ we kind down of to expect XX% continue, that as do head

Thomas H. Werner

growth, say the it Yeah. products, that that particularly it at moderate. quarter a is we're our I won't which latter but did expect What pointing rate. will still the be light that would our well. that We solar products particularly for seasonally solutions, and QX to is industry,

comes as favorably, As it months, we'll the grow market back normally does during the as still not fast. summer but

Hank Elder

out the helpful. guess, then, I phases of with XQ. That's called Okay. $XXX first but sticking from proceeds with one lease And monetization in you coming resi, in in the million the total,

much $XXX the what's how the we of in realizing quarter could So, timeline that and $XXX full for then the third expect of million? million kind

Charles D. Boynton

of we out. than Yeah. haven't should that quarter QX, the A half guided so million, say, in I spill It half $XXX we rest more into far QX. the little than balance in and more could and the But out third QX. QX the be in expect of would

Hank Elder

and that guess, the Got and on. was much going power into model pass to segment last forward? it. project then megawatts, you but one one how I what P&L sale? we the is it impact just in the should from And this I'll But the how Mexico, one sold development plant the left

Charles D. Boynton

in impairment charge an would for I U.S. roughly took U.S. model the at We it neutral the

but land sell And in likely not portfolio. that third of interconnections. the a We X-gigawatt have to expect It's sell and have took will gains portfolio We various near-term We to in a charge. the is another are P&L about quarter. around positions, second in world would that in we gain in a not expect the could and charge we horizon. There or substantial elsewhere QX. future, Mexico the that portfolio those

Thomas H. Werner

on of And of... in the terms QX impact

Charles D. Boynton

$XX small for charge million the a Guajiro. of then in and gain sale there was impairment Mexico

Hank Elder

you Thank guys much. very

Charles D. Boynton

Hank. you, Thank

Thomas H. Werner

Thanks, Hank.

Operator

Thank you.

Pavel from and Molchanov, comes company please name. question next state Our your

Pavel S. Molchanov

Raymond no would tariff? you James. A SolarWorld were Section simple if XXX do question, there deal the

Thomas H. Werner

Unlikely.

Pavel S. Molchanov

enough. Clear Okay.

at want price on not any purchase SolarWorld, guess think on us metrics? the we you're that this from transaction advance since or any know I do how point the this accretion/dilution other the that guidance to uplift Given in incremental you about of guidance, giving the of don't financials of

Thomas H. Werner

enough. you'd materiality What financials. say sense we which gave our let Fair purchase Yeah. would is color not on the Chuck is, I the I'll some and of like. to you all, some add I first What would of if say price,

couple-fold. improvement Next, question can products. We're with it much fundamental our on much SolarWorld existing fronts. how make will complementary and to the is how One, we both be of optimistic

So, our customers distribution channel. we our did their be of prepared gain their This and share think that a comprehensive remarks. by market mention virtue product in gives DG there'll offering a product as we

favorable. we would So, be expect that to

absorb the are the need to some On we'll OpEx would facility to other there hand, that from that require us have sales. complementary

announcement. acquisition is that we're post a just think weeks net We're few of the I optimistic.

Of at (XX:XX) and point approval. this which mostly government closing has on course, focused we're CPs

on. that's that So, focused Pavel. was what we're Hopefully, helpful, mostly

Charles D. Boynton

Yeah.

we a know We technical improve what is I extremely will and to how you that the the run case We is of we next quite to couple think, high. tell can't not think world-class bull operations material. And I over are disclose accretive. price would Pavel, the but due what on would And can unfold I and is years. is the the improve reliability say cash accretion/dilution, again, level, factories terms quality. synergies purchase at the confidentiality, and

there's downside And very case, very don't we so put the cases high. and great a bull

that we from we neutral do would it and better standpoint, really think can profits and but a say planning I so make significantly drive good And accretive time. over

Pavel S. Molchanov

Thank Okay. very you much.

Charles D. Boynton

Pavel. Thanks,

Operator

you. Thank

Dumoulin-Smith, name. your company please and comes question state next Julien Our from

Julien Dumoulin-Smith

Hi, me? you BAML. Can hear

Charles D. Boynton

Yeah.

Thomas H. Werner

Yeah, Julien.

Julien Dumoulin-Smith

on here back the impact NCI Hey, solar to excellent. go Could we piece? just the residential

Charles D. Boynton

Sure.

Julien Dumoulin-Smith

adjusted a initial XXXX? backlog then X And talk about how to for much into the gigawatts reflected you annualizes is also in of of talk EBITDA little about the how XXXX. Can the that

there, limited I impact said to want but think sure. make relatively just you

Charles D. Boynton

That's correct.

in I'll We likely QX. the a the impact on some up be first do would rest a pipeline XXXX. sale. they but charge So, on $XX down to There think gains or modest in the going material took the it's international million have We in of impact year. be portfolios, could don't

a So, not asset I from say, that one, operating core their EBITDA would divestitures. the is modeling core standpoint, performance,

P&L. Julien, it rate you impact course, a run we that cases, What monetizing is guiding quarter we're we a is leases and, million And as, residential expect forward. some we would be can million there know, to benefit basis, commercial. by that seasonality. NCI of QX not $XX generate NCI in that leases $XX would adverse effectively and take it's for as to because no NCI you there NCI, QX that going As will equity and relates has income, to in a of the On is, tax some deconsolidate NCI to tax or and income historically, is income our negative look HLBV benefit

So, be going we would booking forward, not that.

is and on to XXXX, XXXX EBITDA view core Our generally we'll again have year-over-year, will we growth into have XXXX. growth

We expect growth even XXXX. into more

I not we and And going have guide overall operating little tell is wanted the bit if we core in like or performance. forward that to noise recording position performance we be you adds things what would a likely the well, turning NCI we'll so, is the we're would to that in of NCI to out would you of go that QX kind take And and out. corner feel that the so complexity income. core improving on and system be

Julien Dumoulin-Smith

of basis, residential the half year. of rate on altogether about off? respect What to just sort solar composition about the the kind to you to understand it. run a back the there, were of piece (XX:XX) net rolling EBITDA if think Just like Got with of adjusted

Charles D. Boynton

business We really it's We a good is business are, the had I'd XX%. residential near we're as I'd is a way. seen good margins quarter, we business. taking XX% good We've The just we expansion term. And But Europe QX What Yeah. to in a in being a well. strong residential, out quarter think that in you margin core to quite rapid see really a in U.S. costs fairly Europe, quarter. in see frankly, tell not that call that that this really the past XX% business. is XX%, XX% in

globally, general, a and in residential DG, business. terrific is So,

Julien Dumoulin-Smith

Excellent. Thank you, all.

Thomas H. Werner

it's take I question. We're Colin. Okay. going one from believe to more

Operator

Rusch, name. more One state and your please comes Colin company from question

Colin Rusch

Oppenheimer you the continue for sale? the about & on technology portfolio equipment Can the those portfolio that And negotiate sale? do you relationship assigned with SunPower to conjunction expect in, the for squeezing an with into be Will basis Company. utility in pricing talk guys. projects? ongoing technology sale Thanks me that's just to with

Thomas H. Werner

we So, sell would have SunPower we'll Solutions the and of determined. rule, two, its lots solution. all a great the own given as installed separate experience will I which a to merits of multi-gigawatts say, think, capacity, be on in, the I

banking separate So, and not by that those things, the We're what Solutions, have the way. two to we're in to of SunPower Solutions. going would on it's hard guidance attach SunPower rate project percent for our

Colin Rusch

run quarters than ready here the to cleaned a there's then two away, sense do lot for And for seeing of the timeline rate? think Do company and that moving that? sustainable Great. on longer of of take pieces the that up And you quarters of business. full three it's you Is going kind away? a restructuring the have

Thomas H. Werner

quarter. we're this So, corner turning I the think

a We that year to through to reduction We've into back the at or are this and asset we're we course, half expense go and year. the going for of had materially materially divestitures Chuck, in the significant that. operations on least of see you, as next accomplishing benefit thank they're get and

or year we're businesses, of effort, two. quarter happens And So, that the in culmination the greater of we next and focus over fourth XXXX. profitability that plus going upstream being think by into this downstream, quarter two on sustained the

Colin Rusch

much, Thanks guys. Great. so

Thomas H. Werner

everyone. much we next an in half year, time, very I of Analyst you the there. Day second We our for mention, the should will Thank have to we also, so look forward seeing call. look to And your forward you

Operator

This today's disconnect. now Thank for concludes joining and conference. you may you

Sunpower (SPWRQ) 8 May 182018 Q1 Earnings call transcript