SunPower Plan to Streamline Manufacturing Operations, Lower Costs and Improve Efficiency

SunPower Plan to Streamline Manufacturing Operations, Lower Costs and Improve
                                  Efficiency

Allows Company to Effectively Compete During Industry Transition and
Oversupply Environment

PR Newswire

SAN JOSE, Calif., Oct. 16, 2012

SAN JOSE, Calif., Oct. 16, 2012 /PRNewswire/ --SunPower Corp. (NASDAQ: SPWR)
today announced a reorganization plan to restructure its Philippines
manufacturing operations and reduce its workforce.

As part of this initiative, the company will temporarily idle six of the 12
lines in its Fab 2 cell manufacturing plant and 20 percent of panel
manufacturing in the Philippines to significantly reduce inventory, lower
operational costs and improve efficiency. As a result, the overall blended
utilization for the fourth quarter will be approximately 60 percent.
Additionally, the company will reduce its workforce by approximately 900
employees with the reductions occurring primarily in the Philippines.

"Industry conditions continue to be challenging and while it is never an easy
decision to reduce positions, we must make prudent decisions to effectively
compete in an industry with significant overcapacity. Additionally, we'll
further our efforts to reduce costs and improve operational efficiencies,"
said Tom Werner, SunPower chief executive officer and president. "With this
aggressive reorganization plan, SunPower is well positioned to lead the solar
market due to our world leading technology and products, significant
downstream presence in multiple end segments and ability to open new market
opportunities."

The company continues to make strong progress on its cost reduction roadmap
and remains committed to reaching its cost per watt goal of less than $0.75
per watt on an efficiency adjusted basis for SunPower's lowest cost solar
panels by the end of 2012. The company's previously disclosed Fiscal Year 2012
earnings guidance remains unchanged. SunPower will provide additional details
on its strategic initiatives during its third quarter 2012 earnings conference
call on Nov. 1, 2012.

SunPower expects to record restructuring charges totaling $10 million to $17
million, composed of severance benefits, lease and related termination costs
and other associated costs, the majority of which will likely be in the fourth
quarter 2012. The company expects that greater than 90 percent of these
charges will be cash.

About SunPower

SunPower Corp. (NASDAQ: SPWR) designs, manufactures and delivers the highest
efficiency, highest reliability solar panels and systems available today.
Residential, business, government and utility customers rely on the company's
quarter century of experience and guaranteed performance to provide maximum
return on investment throughout the life of the solar system. Headquartered in
San Jose, Calif., SunPower has offices in North America, Europe, Australia,
Africa and Asia. For more information, visit www.sunpowercorp.com.

Forward-Looking Statement

This press release contains forward-looking statements within the meaning of
the Private Securities Litigation Reform Act of 1995. Forward-looking
statements are statements that do not represent historical facts and may be
based on underlying assumptions. The company uses words and phrases such as
"will," "well positioned," "committed to,""guidance," "expects" and similar
expressions to identify forward-looking statements in this press release,
including forward-looking statements regarding: (a) being well position to
lead the solar market; (b) reaching its cost per watt goal of less than $0.75
per watt on an efficiency adjusted basis by the end of 2012; (c) fiscal year
2012 earnings guidance; and (d) expected restructuring charges, amount of such
charges that is cash and the amount of such charges in Q4 2012. Such
forward-looking statements are based on information available to the company
as of the date of this release and involve a number of risks and
uncertainties, some beyond the company's control, that could cause actual
results to differ materially from those anticipated by these forward-looking
statements, including risks and uncertainties such as: (i) increasing supply
and competition in the industry and lower average selling prices, impact on
gross margins, and any revaluation of inventory as a result of decreasing ASP
or reduced demand;(ii) the impact of regulatory changes and the continuation
of governmental and related economic incentives promoting the use of solar
power, and the impact of such changes on our revenues, financial results, and
any potential impairments or write off to intangible assets, project assets,
long-lived assets and goodwill; (iii) the company's ability to meet its cost
reduction plans and reduce it operating expenses; (iv) the company's ability
to obtain and maintain an adequate supply of raw materials, components, and
solar panels, as well as the price it pays for such items and third parties'
willingness to renegotiate or cancel above market contracts; (v) general
business and economic conditions, including seasonality of the solar industry
and growth trends in the solar industry; (vi) the company's ability to revise
its portfolio allocation geographically and across downstream channels to
respond to regulatory changes; (vii) the company's ability to increase or
sustain its growth rate; (viii) construction difficulties or potential delays,
including obtaining land use rights, permits, license, other governmental
approvals, and transmission access and upgrades, and any litigation relating
thereto; (ix) timeline for revenue recognition and impact on the company's
operating results; (x) the significant investment required to construct power
plants and the company's ability to sell or otherwise monetize power plants,
including the company's success in completing the design, construction and
maintenance of CVSR and the AVSP power plant project; (xi) fluctuations in the
company's operating results and its unpredictability; (xii) the availability
of financing arrangements for the company's projects and the company's
customers; (xiii) potential difficulties associated with operating the joint
venture with AUO and the company's ability to achieve the anticipated
synergies from the Tenesol acquisition; (xiv) success in achieving cost
reduction, and the company's ability to remain competitive in its product
offering, obtain premium pricing while continuing to reduce costs and achieve
lower targeted cost per watt; (xv) the company's liquidity, substantial
indebtedness, and its ability to obtain additional financing; (xvi)
manufacturing difficulties that could arise;(xvii) the company's ability to
achieve the expected benefits from its relationship with Total; (xviii) the
success of the company's ongoing research and development efforts and the
acceptance of the company's new products and services; (xix) the company's
ability to protect its intellectual property; (xx) the company's exposure to
foreign exchange, credit and interest rate risk; (xxi) the company's estimate
of restructuring charges, and possible impairment or write off of goodwill,
intangible assets, long-lived assets and project assets; (xxii) the success of
the residential lease program; (xxiii) the accuracy of assumptions and
compliance with treasury grant guidance and timing and amount of cash grant;
(xxiv) possible consolidation of the joint venture AUO SunPower; and (xxv)
other risks described in the company's Annual Report on Form 10-K for the year
ended January 1, 2012, Quarterly Reports on Form 10-Q for the quarters ended
April 1, 2012 and July 1, 2012, and other filings with the Securities and
Exchange Commission. These forward-looking statements should not be relied
upon as representing the company's views as of any subsequent date, and the
company is under no obligation to, and expressly disclaims any responsibility
to, update or alter its forward-looking statements, whether as a result of new
information, future events or otherwise.

SOURCE SunPower Corp.

Website: http://www.sunpowercorp.com
Contact: Media, Helen Kendrick, +1-408-240-5585,
Helen.Kendrick@sunpowercorp.com, or Investors, Bob Okunski, +1-408-240-5447,
Bob.Okunski@sunpowercorp.com
 
Press spacebar to pause and continue. Press esc to stop.