--First Quarter Revenue of $187 Million-- --Financing Commitments Secured from Largest Shareholder-- SINGAPORE, May 30, 2024 /PRNewswire/ -- Maxeon Solar Technologies, Ltd. (NASDAQ:MAXN) ("Maxeon" or "the Company"), a global leader in solar innovation and channels, today announced its financial results for the first quarter ended March 31, 2024. Maxeon's Chief Executive Officer Bill Mulligan noted, "Maxeon has been facing a very difficult market environment since the third quarter of last year, with challenging industry pricing conditions and demand disruptions in our DG business due to higher interest rates and policy changes, as well as project pushouts by two of our large-scale customers in the US. These external factors led to underutilized manufacturing operations, increased product costs, and lower revenue and profit than planned. While the Company is making progress on our announced restructuring initiatives and we are seeing some positive trends in the market, we determined that Maxeon requires additional capital to support its continuing operations. After conducting a thorough analysis with the help of financial advisors, management and the board determined that the most viable financing option to support our immediate liquidity needs was from our largest shareholder, TCL Zhonghuan Renewable Energy Technology Co. Ltd. (TZE)." "TZE has agreed to invest $97.5 million via a debt investment and has committed to an additional $100 million equity investment, in each case subject to regulatory approvals. In addition, substantially all of the holders of the $200 million 2025 convertible notes have agreed to exchange their bonds and accrued interest into new bonds due in 2028, which are convertible into equity at the noteholders' option starting July 2nd and $137.2 million of which must be converted into equity upon TZE's equity investment. We believe that these transactions are necessary to provide sufficient liquidity to enable the Company to return to profitability. These transactions, however, will result in substantial dilution to existing public shareholders, with TZE ultimately becoming a controlling shareholder, subject to regulatory approvals." "Our distributed generation (DG) business faced ongoing price and demand headwinds in both the U.S. and Europe. Against this challenging industry backdrop we were able to execute on several key strategic initiatives, including completion of all deliveries to SunPower Corporation under the Settlement Agreement. In parallel, our new U.S. Dealer channel added more than 100 new partners with additions from many key installers that have been selling our product effectively for more than a decade. In Europe, the team successfully introduced our 7th generation Performance Series module which is our first product utilizing TOPCon cell technology." "We recently sold our stake in the Huansheng Photovoltaic (Jiangsu) Co., Ltd (HSPV) joint venture, along with executing an IP-license for shingling technology for their use in utility-scale markets outside of the United States, for $34 million. In addition, we entered into a new supply agreement with HSPV for continued support of our international DG business. Going forward, our activities in utility-scale will be focused exclusively on the U.S. market, where our longstanding customer relationships, track record of execution, supply chain structure, differentiated products and leading sustainability profile makes us a supplier of choice for many developers. Our operations teams have been working hard to manage the effects of two significant customer project delays which led to reduced near-term manufacturing volumes and impacted our Q1 financial performance. While current pricing and demand conditions remain challenging, we are seeing some positive trade policy trends and we are cautiously optimistic that these could result in stronger pricing power, improved demand and incremental bookings. On the technology front, we're seeing competitors rapidly shift to TOPCon products which we believe infringe on U.S. intellectual property we developed over 15 years ago. We recently initiated patent infringement lawsuits against three competitors and we are in discussions with several other companies relating to potential TOPCon licensing opportunities." "For the balance of 2024, the Company will be focused on rebuilding our balance sheet while undergoing further transformation to return the core business to profitability with reduced customer concentration risk."  Selected Q1 Unaudited Financial Summary (In thousands, except shipments) Fiscal Q1 2024 Fiscal Q4 2023 Fiscal Q1 2023 Shipments, in MW 488 653 774 Revenue $                   187,456 $                   228,775 $                   318,332 Gross (loss) profit (1) (14,871) (34,461) 53,625 GAAP Operating expenses 48,668 141,007 41,921 GAAP Net (loss) income attributable to the stockholders(1) (80,148) (186,334) 20,271 Capital expenditures 19,216 11,656 16,500 Other Financial Data(1) (In thousands) Fiscal Q1 2024 Fiscal Q4 2023 Fiscal Q1 2023 Non-GAAP Gross (loss) profit $                   (12,888) $                     (9,675) $                     54,142 Non-GAAP Operating expenses 38,520 36,654 38,056 Adjusted EBITDA (38,977) (37,631) 30,984 (1) The Company's use of Non-GAAP financial information, including a reconciliation to U.S. GAAP, is provided under "Use of Non-GAAP Financial Measures" below.   Second Quarter 2024 and Fiscal Year 2024 Outlook For the second quarter of 2024, the Company anticipates the following results: (In millions, except shipments)  Outlook Shipments, in MW 520 - 600 MW Revenue $160 - $200 Gross loss $(20) - $0 Non-GAAP gross loss(1) $(20) - $0 Operating expenses $45 ± $2 Non-GAAP operating expenses(1) $37 ± $2 Adjusted EBITDA(2) $(51) - $(31) Capital expenditures(3) $15 - $25 For fiscal year 2024, the Company's annual guidance is below: – Revenue to be within a range of $640 million to $800 million. – Adjusted EBITDA to be within a range of $(160) million to $(110) million. –  Capital expenditures(3) to be within a range of $70 million to $100 million. (1) The Company's Non-GAAP operating expenses are impacted by the effects of adjusting for stock-based compensation expense and restructuring charges and fees. (2) The Company cannot provide a reconciliation between its Adjusted EBITDA projection and the most directly comparable GAAP measures without unreasonable efforts because it is unable to predict with reasonable certainty the ultimate outcome of the remeasurement gain or loss of the prepaid forward. (3) Capital expenditures are directed mainly to conversion of our legacy Maxeon 3 capacity in the Philippines to Maxeon 7 technology and equipment for manufacture of our Performance line products in Malaysia and Mexico. We are also investing in the development of our next generation Maxeon 8 technology, various programs to enhance our IT infrastructure and security, as well as to support our Beyond the Panel offering. These anticipated results for the second quarter of 2024 are preliminary, unaudited and represent the most current information available to management. The Company's business outlook is based on management's current views and estimates with respect to market conditions, production capacity and the global economic environment. Please refer to Forward Looking Statements section below. Management's views and estimates are subject to change without notice. For more information Maxeon's first quarter 2024 financial results and management commentary can be found on Form 6-K by accessing the Financials & Filings page of the Investor Relations section of Maxeon's website at: https://corp.maxeon.com/investor-relations. The Form 6-K and Company's other filings are also available online from the Securities and Exchange Commission at www.sec.gov. Conference Call Details The Company will hold a conference call on May 30, 2024, at 8:00 AM U.S. ET / May 30, 2024, at 8:00 PM Singapore Time, to discuss results and to provide an update on the business. To join the live conference call, participants must first register here, where a dial-in number will be provided. A simultaneous audio-only webcast of the conference call will be available on Maxeon's website at https://corp.maxeon.com/events-and-presentations. A webcast replay will be available on Maxeon's website for one year at https://corp.maxeon.com/events-and-presentations. About Maxeon Solar Technologies Maxeon Solar Technologies Ltd (NASDAQ:MAXN) is Powering Positive ChangeTM. Headquartered in Singapore, Maxeon leverages over 35 years of solar energy leadership and over 1,900 patents to design innovative and sustainably made solar panels and energy solutions for residential, commercial and power plant customers. Maxeon's integrated home energy management is a flexible ecosystem of products and services, built around the award-winning Maxeon® and SunPower® brand solar panels. With a network of more than 1,700 trusted partners and distributors, and more than one million customers worldwide, the Company is a global leader in solar. For more information, visit us at www.maxeon.com, on LinkedIn and on Twitter. Forward-Looking Statements This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, including, but not limited to, statements regarding: (a) our ability to (i) meet short-term and long-term material cash requirements, (ii) complete an equity, debt or other financing at favorable terms, if at all, (iii) refinance our quickly maturing outstanding debt and (iv) continue as a going concern; (b) the success of our ongoing restructuring initiatives; (c) our expectations regarding product pricing trends, demand and growth projections, including our efforts to enforce our intellectual property rights against our competitors; (d) potential disruptions to our operations and supply chain that may result from epidemics, natural disasters or military conflicts, including the duration, scope and impact on the demand for our products, market disruptions from the war in Ukraine and the Israel-Hamas-Iran conflict; (e) anticipated product launch timing and our expectations regarding ramp, customer acceptance and demand, upsell and expansion opportunities; (f) our expectations and plans for short- and long-term strategy, including our anticipated areas of focus and investment, market expansion, product and technology focus, implementation of restructuring plans and projected growth and profitability; (g) our technology outlook, including anticipated fab capacity expansion and utilization and expected ramp and production timelines for the Company's next-generation Maxeon 7 and Performance line solar panels, expected cost reductions, and future performance; (h) our strategic goals and plans, including capacity expansion, partnership discussions with respect to the Company's next-generation technology, and our relationship with our existing customers, suppliers and partners, and our ability to achieve and maintain them; (i) our expectations regarding our future performance and revenues resulting from contracted orders, bookings, backlog, and pipelines in our sales channels and feedback from our partners; (j) our projected effective tax rate and changes to the valuation allowance related to our deferred tax assets; and (k) our second quarter and annual fiscal year 2024 guidance, including shipments, revenue, gross loss, non-GAAP gross loss, operating expenses, non-GAAP operating expenses, Adjusted EBITDA, capital expenditures, and related assumptions. The forward-looking statements can be also identified by terminology such as "may," "might," "could," "will," "aims," "expects," "anticipates," "future," "intends," "plans," "believes," "estimates" and similar statements. Among other things, the quotations from management in this press release and Maxeon's operations and business outlook contain forward-looking statements. 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. These statements are not guarantees of future performance and are subject to a number of risks. The reader should not place undue reliance on these forward-looking statements, as there can be no assurances that the plans, initiatives or expectations upon which they are based will occur. Factors that could cause or contribute to such differences include, but are not limited to: (1) challenges in executing transactions key to our strategic plans, including regulatory and other challenges that may arise; (2) our liquidity, substantial indebtedness, terms and conditions upon which our indebtedness is incurred, and ability to obtain additional financing for our projects, customers and operations; (3) our ability to manage supply chain shortages and/or excess inventory and cost increases and operating expenses; (4) potential disruptions to our operations and supply chain that may result from damage or destruction of facilities operated by our suppliers, difficulties in hiring or retaining key personnel, epidemics, natural disasters, including impacts of the war in Ukraine and the Israel-Hamas conflict; (5) our ability to manage our key customers and suppliers, including the impact of the termination of the supply agreements with one of the Company's biggest customers, SunPower Corporation; (6) 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; (7) competition in the solar and general energy industry and downward pressure on selling prices and wholesale energy pricing, including impacts of inflation, economic recession and foreign exchange rates upon customer demand; (8) changes in regulation and public policy, including the imposition and applicability of tariffs; (9) our ability to comply with various tax holiday requirements as well as regulatory changes or findings affecting the availability of economic incentives promoting use of solar energy and availability of tax incentives or imposition of tax duties; (10) fluctuations in our operating results and in the foreign currencies in which we operate; (11) appropriately sizing, or delays in expanding our manufacturing capacity and containing manufacturing and logistics difficulties that could arise; (12) unanticipated impact to customer demand and sales schedules due, among other factors, to the war in Ukraine and the Israel-Hamas-Iran conflict, economic recession and environmental disasters; (13) challenges managing our acquisitions, joint ventures and partnerships, including our ability to successfully manage acquired assets and supplier relationships; (14) reaction by securities or industry analysts to our annual and/or quarterly guidance, in combination with our results of operations or other factors, and/ or third party reports or publications, whether accurate or not, which may cause such securities or industry analysts to cease publishing research or reports about us, or adversely change their recommendations regarding our ordinary shares, which may negatively impact the market price of our ordinary shares and volume of our stock trading; and (15) unpredictable outcomes resulting from our litigation activities, including enforcement of certain intellectual property rights, or other disputes. Forward-looking and other statements in this report may also address our corporate sustainability or responsibility progress, plans, and goals (including environmental matters), and the inclusion of such statements is not an indication that these contents are necessarily material to investors or required to be disclosed in the Company's filings with the SEC. In addition, historical, current, and forward-looking sustainability-related statements may be based on standards for measuring progress that are still developing, internal controls and processes that continue to evolve, and assumptions that are subject to change in the future. 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 report on Form 20-F, particularly under the heading "Risk Factors". Copies of these filings are available online from the SEC at www.sec.gov, or on the SEC Filings section of our Investor Relations website at https://corp.maxeon.com/investor-relations. 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. On April 8, 2024, the Company issued a press release and furnished a Report on Form 6-K announcing its preliminary unaudited financial results for the fourth quarter and fiscal year ended December 31, 2023. Subsequent to the issuance of such preliminary financial information, the Company revised the presentation of gross loss, GAAP operating expenses, GAAP net loss attributable to the stockholders, non-GAAP gross loss, non-GAAP operating expenses and Adjusted EBITDA as follows: Additional inventory reserve of $2.3 million to write down inventories to market value which affected gross loss, GAAP net loss attributable to the stockholders, non-GAAP gross loss and Adjusted EBITDA Adjustment of estimate on employee compensation based on final payout which resulted in lower gross loss of $0.3 million, lower GAAP operating expenses of $0.5 million, lower GAAP net loss attributable to stockholders of $0.8 million, higher non-GAAP operating expenses and Adjusted EBITDA of $0.4 million Adjustment of uncertain tax position which resulted in higher GAAP net loss attributable to stockholders of $0.5 million Use of Non-GAAP Financial Measures We present certain non-GAAP measures such as non-GAAP gross (loss) profit, non-GAAP operating expenses and earnings before interest, taxes, depreciation and amortization ("EBITDA") adjusted for stock-based compensation, restructuring charges and fees, remeasurement loss on prepaid forward and physical delivery forward and equity in losses of unconsolidated investees ("Adjusted EBITDA") to supplement our consolidated financial results presented in accordance with GAAP. Non-GAAP gross (loss)  profit is defined as gross (loss) profit excluding stock-based compensation and restructuring charges and fees. Non-GAAP operating expenses is defined as operating expenses excluding stock-based compensation and restructuring charges and fees. We believe that non-GAAP gross (loss) profit, non-GAAP operating expenses and Adjusted EBITDA provide greater transparency into management's view and assessment of the Company's ongoing operating performance by removing items management believes are not representative of our continuing operations and may distort our longer-term operating trends. We believe these measures are useful to help enhance the comparability of our results of operations across different reporting periods on a consistent basis and with our competitors, distinct from items that are infrequent or not associated with the Company's core operations as presented above. We also ...