SunPower Corporation (NASDAQ:SPWR) Files An 8-K Costs Associated with Exit or Disposal Activities
Item 2.05. Costs Associated with Exit or Disposal Activities.
On December 27, 2019, SunPower Corporation (the “Company”) adopted a restructuring plan to realign and optimize workforce requirements in light of recent changes to its business, including the previously announced planned spin-off of Maxeon Solar Technologies, Pte. Ltd. (the “Spin-Off”). In connection with the restructuring plan, which includes actions implemented in the fourth quarter of 2019 and is expected to be completed by mid-2023, the Company expects between 145 and 160 non-manufacturing employees, representing approximately 3% of the Company’s global workforce, to exit the company over a period of approximately 12 to 18 months. Between 65 and 70 of these employees in the SunPower Technologies business unit and corporate have largely been informed and are expected to exit the Company following the Spin-Off and completion of transition services. As the SunPower Energy Services business unit hones its focus on distributed generation, storage, and energy services, 80 to 90 employees exited or are expected to exit the Company during the fourth fiscal quarter of 2019 and the first half of 2020. The Company expects to incur restructuring charges totaling approximately $16 million to $22 million, consisting primarily of severance benefits (between $8 million and $11 million) and retention benefits (between $8 million and $11 million) primarily associated with the retention of employees impacted by the spin-off transaction and certain key research and development employees. A substantial portion of such charges have been and are expected to be incurred in the fourth quarter of fiscal 2019 and the first quarter of fiscal 2020, and the Company expects between $14 million and $19 million of the charges to be cash. The actual timing and costs of the plan may differ from the Company’s current expectations and estimates.
The above information contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including, but not limited to, statements regarding the Spin-Off and the Company’s forecasts or projections of the extent or timing of restructuring charges and related actions. These forward-looking statements are based on the Company’s 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. Factors that could cause or contribute to such differences include but are not limited to: (1) the timing and execution of restructuring plans; (2) employee management and retention issues that may arise; and (3) estimates and assumptions related to the cost of exiting employees and other associated costs. A detailed discussion of these factors and other risks that affect the Company’s business is included in filings the Company makes with the Securities and Exchange Commission (the “SEC”) from time to time, including the Company’s most recent reports on Form 10-K and Form 10-Q, particularly under the heading “Risk Factors.” Copies of these filings are available online from the SEC or on the SEC Filings section of the Company’s Investor Relations website at investors.sunpower.com. All forward-looking statements in this Current Report on Form 8-K are based on information currently available to the Company, and the Company assumes no obligation to update these forward-looking statements in light of new information or future events.
About SunPower Corporation (NASDAQ:SPWR)
SunPower Corporation is a global energy company. The Company provides solar technology to residential, commercial and utility customers worldwide. The Company operates through three segments: Residential Segment, Commercial Segment and Power Plant Segment. The Company designs, manufactures, and sells rooftop and ground-mounted solar power systems under construction and development agreements. It offers post-installation systems monitoring and maintenance in connection with its construction contracts and commercial power purchase. The Company offers SunPower InvisiMount residential mounting system in its product portfolio. The Company offers Helix system, which is a pre-engineered, modular solution that combines its solar module technology with plug-and-play power stations, cable management systems and mounting hardware that enables customers to scale their solar programs with minimal business disruption. It offers modular solar power block, the Oasis system.
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