5-Year Agreement Expected to Accelerate Global
Adoption of AC Modules as the De Facto Residential Solution
Enphase Energy, Inc. (NASDAQ:ENPH), and SunPower Corporation
(NASDAQ:SPWR), today announced a definitive agreement for Enphase
to acquire SunPower’s microinverter business for $25 million in
cash and 7.5 million shares of Enphase common stock. Key highlights
of the acquisition include:
- Advances AC Modules (ACM) as the future of residential
solar
- Enhances SunPower’s Equinox™ Home Solar System with a custom
line of Enphase’s IQ microinverters for use with SunPower AC
Modules
- Enphase expects to add $60-$70 million annualized revenue in
second half of 2019 at 33%-35% gross margin
- Adds over 140 patents to Enphase’s strong IP portfolio
- Expects to close by end of the third quarter of 2018 with
initial IQ shipments in the fourth quarter
- $25 million cash to be funded from Enphase’s balance sheet in
two installments
“We are pleased to become the microinverter supplier for
SunPower’s AC Modules,” said Badri Kothandaraman, president and CEO
of Enphase Energy. “The IQ 7XS 320W AC microinverter in an ACM
strongly complements SunPower’s high efficiency solar cells,
communication and racking to create a high performance, high
quality and easy-to-use Equinox™ Home Solar System, providing
exceptional value to homeowners, dealers and architects.”
IQ 7 is Enphase’s seventh-generation microinverter platform
leading the industry with its software-defined architecture, broad
regulatory compliance, advanced “Smart Grid” features, and a high
fire safety rating. The IQ 7XS microinverter offers 97.5% CEC
efficiency and was designed specifically for the SunPower’s X
Series 96-cell PV modules with peak AC output power of 320W and a
Maximum Power Point (MPP) tracking range of 53-64V.
“SunPower customers will continue to see the same quality, high
performance that they see now as Enphase exclusively co-develops
microinverters for our industry leading residential Equinox solar
product,” said SunPower CEO Tom Werner. “As a result of this
strategic partnership, SunPower looks forward to benefitting from
Enphase’s expertise, allowing us to continue containing costs,
leveraging R&D support and helping streamline our business
priorities.”
The transaction is expected to close at the end
of the third quarter of 2018 subject to product qualification and
other closing conditions under the definitive asset purchase
agreement.
Conference Call Information
Enphase Energy will host a conference call today
for analysts and investors to discuss this acquisition at 4:30 p.m.
Eastern Time (1:30 p.m. Pacific Time). The call is open to the
public by dialing (877) 644-1284; participant passcode
5949319. A live webcast of the conference call and
presentation slides for download will also be accessible from the
“Investor Relations” section under Events & Presentations of
the Company's website at investor.enphase.com. Following the
webcast, an archived version will be available on the website for
30 days. In addition, an audio replay of the conference call will
be available by calling (855) 859-2056; participant passcode
5949319, beginning approximately one hour after the call.
The presentation to be discussed on the
conference call will be filed with the SEC and made available on
the Company’s website.
About Enphase Energy, Inc.
Enphase Energy, a global energy technology company, delivers
smart, easy-to-use solutions that connect solar generation, storage
and management on one intelligent platform. The Company
revolutionized solar with its microinverter technology and produces
the world’s only truly integrated solar plus storage solution.
Enphase has shipped approximately 17 million microinverters, and
more than 760,000 Enphase systems have been deployed in over 110
countries. For more information, visit www.enphase.com and
follow the company on Facebook, LinkedIn and Twitter.
Enphase Energy®, the Enphase logo and other trademarks or
service names are the trademarks of Enphase Energy, Inc.
About SunPower Corporation
As one of the world's most innovative and sustainable energy
companies, SunPower (NASDAQ:SPWR) provides a diverse group of
customers with complete solar solutions and services. Residential
customers, businesses, governments, schools and utilities around
the globe rely on SunPower's more than 30 years of proven
experience. From the first flip of the switch, SunPower delivers
maximum value and superb performance throughout the long life of
every solar system. Headquartered in Silicon Valley, SunPower has
dedicated, customer-focused employees
in Africa, Asia, Australia, Europe, and North
and South America. For more information about how SunPower is
changing the way our world is powered,
visit www.sunpower.com.
Forward-Looking Statements
The statements contained in this press release which are
financial projections or which are not historical facts (such as
statements in the future tense and statements including “advance,”
“anticipate,” “believe,” “enhance,” “expect” and similar terms and
concepts), including all discussions of future periods which are
not yet completed, statements related to Enphase Energy's expected
incremental annualized revenues as a result of the SunPower
transaction, Enphase’s future financial performance, market demand
and expected availability dates for Enphase products, expected
performance and advantages of Enphase’s technology, and market
trends are forward-looking statements. These forward-looking
statements are based on Enphase's current expectations and
inherently involve significant risks and uncertainties, including,
but not limited to, the risk that the SunPower asset purchase
agreement is terminated prior to closing or the related transaction
(including the transactions under the master supply agreement with
SunPower) do not otherwise close (or close on terms different than
what has been agreed as of the date hereof), that the acquired
assets and the master supply agreement with SunPower do not result
in the revenues or margins currently anticipated by Enphase, risks
relating to supplier delays, changes, cancellations or forecast
inaccuracies for products to be delivered to Enphase and to
SunPower, interruptions in supply, and the parties’ failure or
inability to perform their respective obligations under the master
supply agreement, asset purchase agreement and related agreements.
Actual results and the timing of events could differ materially
from those anticipated in such forward-looking statements as a
result of the foregoing risks and uncertainties, and risks and
uncertainties including those risks described in more detail in
Enphase’s most recent Annual Report on Form 10-K and other
documents on file with the SEC and available on the SEC's website
at www.sec.gov. Enphase Energy undertakes no duty or obligation to
update any forward-looking statements contained in this release as
a result of new information, future events or changes in its
expectations, except as required by law.
Non-GAAP Financial Measures
The financial measures included in this press release have not
been prepared in accordance with generally accepted accounting
principles (GAAP). In particular, this press
release includes information relating to incremental annualized
revenue, which amount reflects annualized incremental run-rate
revenue anticipated to be earned by Enphase solely from sales of
products under the master supply agreement with SunPower based on
currently anticipated supply levels and pricing in accordance with
the master supply agreement. The non-GAAP financial measures used
in this press release were derived using Enphase’s current
estimates of the incremental volumes and selling prices, future
costs of products and incremental operating expenses required to
support its operations following the integration of the acquired
business and the effectiveness of the master supply agreement with
SunPower. In addition to these uncertainties and risks, actual
results could differ from the forward-looking non-GAAP financial
measures included in this press release as a result of the
following factors. Enphase expects the transaction with SunPower to
be accounted for as a business combination. Accordingly, the
purchase consideration will be allocated to the assets acquired,
including goodwill. The net purchase consideration is partially
dependent upon the value of Enphase’s stock on the date the
transaction closes (which is currently anticipated to be in
September 2018), and, as such, is subject to volatility and other
market factors. An increase in Enphase’s stock price before the
transaction closes would result in an increase in the purchase
consideration, which could be material and impact the valuation of
the assets acquired. Also, Enphase excludes employee stock-based
compensation expense from its non-GAAP measures primarily
because they are non-cash in nature. Moreover, the impact of
this expense is significantly affected by Enphase’s stock price at
the time of an award over which management has limited to no
control. Further, acquisition-related charges have not been
included in the non-GAAP measures used in this press release and
are expected to primarily include the amortization of acquired
intangibles, which are expected to consist primarily of
intellectual property to be acquired and intangibles related to
customer relationships. These items relate specifically to the
SunPower acquisition and are not reflective of Enphase’s ongoing
financial performance. The valuation of these assets has not been
completed at this time, and the purchase accounting methodology is
being reviewed. Thus, the impact, which is expected to be material,
and the resulting accounting has not been determined. A full
valuation of the assets acquired will be performed as of the
closing date of the transaction. Enphase is in the process of
reviewing the transaction and determining the appropriate
accounting methodology for the purchase. The final valuation and
determination of purchase accounting could cause the GAAP and
non-GAAP incremental impact of the transaction to materially differ
from any and all of the non-GAAP financial measures included in
this press release. As a result of the uncertainties and other
factors described above, Enphase is unable to present a
quantitative reconciliation of the forward-looking non-GAAP
financial measures included in this press release to the most
directly comparable GAAP financial measure because Enphase
management cannot reliably predict all necessary components for the
reconciliations. For the same reasons, Enphase is unable to address
the probable significance of the unavailable information, which
could be material to Enphase’s future financial results.
Enphase
Contacts:InvestorsChristina Carrabino
Investor Relationsir@enphaseenergy.com+1-707-763-4784 x7294
MediaChristian
Zdebelpr@enphaseenergy.com+1-484-788-2384
SunPower Contacts:InvestorsBob
Okunski Bob.Okunski@sunpower.com408-240-5447
MediaNatalie
WymerNatalie.Wymer@sunpower.com408-457-2348
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