Maxeon Solar Technologies(MAXN) - 2024 Q2 - Quarterly Report

Financial Performance - Maxeon reported second quarter 2024 revenue of $184 million, with total shipments of 526 MW[4] - For the three months ended June 30, 2024, revenue was $184,219, a decrease from $348,373 for the same period in 2023, representing a decline of approximately 47%[30] - Gross loss for the three months ended June 30, 2024, was $(7,785), compared to a gross profit of $56,223 for the same period in 2023[30] - Operating expenses increased to $61,670 for the three months ended June 30, 2024, from $47,830 in the same period of 2023, marking an increase of about 29%[30] - Net income attributable to stockholders for the three months ended June 30, 2024, was $11,664, a significant improvement from a net loss of $(1,509) in the same period of 2023[30] - The company reported an adjusted EBITDA of $(36,574) for the three months ended June 30, 2024, compared to $30,240 for the same period in 2023[30] - The company reported a net loss of $80,204 thousand for the quarter ending March 31, 2024, compared to a net loss of $20,418 thousand for the same period last year, indicating a significant increase in losses[32] Revenue Breakdown - The utility scale business revenue increased by 12% sequentially to $109 million, driven by higher volume shipments to U.S. customers[5] - The distributed generation (DG) business revenue reached $75 million, representing 11% sequential growth[6] Debt and Equity - Maxeon's total debt decreased from $366 million to $278 million on a pro forma basis after recent recapitalization efforts[8] - TZE made a $100 million equity investment in Maxeon, becoming the controlling shareholder[1] - As of June 30, 2024, total equity attributable to the company was $853,164 thousand, with an accumulated deficit of $864,576 thousand[33] - The company’s total paid-in capital increased to $55,706 thousand as of June 30, 2024, reflecting ongoing capital raising efforts[33] Operational Challenges - The company withdrew its full year 2024 revenue and adjusted EBITDA guidance due to significant market uncertainties[2] - The company is facing challenges due to Customs and Border Protection detentions affecting over 60% of its second quarter revenue from U.S. shipments[1] - The company is undergoing restructuring initiatives aimed at improving operational efficiency and cost structure, which includes capacity expansion and supply chain adaptation[17] - Maxeon is facing challenges related to supply chain disruptions and regulatory actions, including product detentions by U.S. Customs[19] - The company anticipates at least $100 million in charges related to the potential shutdown of its Malaysian Fab 3[5] Strategic Initiatives - Maxeon established a Strategy and Transformation Office to drive initiatives aimed at restoring profitability[10] - The company is focused on expanding its next-generation Maxeon 7 and Performance line solar panels, with anticipated cost reductions and improved production timelines[17] - Maxeon expects to maintain compliance with Nasdaq continued listing standards, including an anticipated reverse share split[17] - The company is projecting future performance and revenues based on contracted orders, bookings, and sales pipelines[17] Cash Flow and Assets - Total current assets decreased to $389,095 as of June 30, 2024, down from $619,019 as of December 31, 2023, reflecting a decline of approximately 37%[29] - Total assets were $764,156 as of June 30, 2024, compared to $1,002,009 as of December 31, 2023, indicating a decrease of about 24%[29] - Total liabilities decreased to $785,966 as of June 30, 2024, from $997,367 as of December 31, 2023, a reduction of approximately 21%[29] - Cash and cash equivalents were $81,381 as of June 30, 2024, down from $190,169 as of December 31, 2023, a decrease of about 57%[29] - The company experienced a net cash used in operating activities of $147,176 thousand for the six months ended June 30, 2024, compared to $26,309 thousand for the same period last year, reflecting increased operational challenges[35] - Cash, cash equivalents, and restricted cash at the end of the period on June 30, 2024, were $84,953 thousand, a decrease from $395,906 thousand at the end of the previous year[37] Non-GAAP Measures - Non-GAAP measures such as Adjusted EBITDA are used to provide greater transparency into the company's ongoing operating performance[20] - The company emphasizes the importance of excluding non-core items from financial measures to better reflect ongoing operational results[21] - The company incurred restructuring charges and fees related to re-engineering its IBC capacity, which are excluded from non-GAAP financial measures[24] - The company reported a gain on extinguishment of debt related to modifications of its Green Convertible Senior Notes, which is also excluded from Adjusted EBITDA[25]