 Filed
by SunPower Corporation Pursuant to Rule 425 Under the Securities Act of 1933 And Deemed Filed Pursuant to 14a-12 Under the Securities Act of 1934 Subject Company: SunPower Corporation Commission File No.: 000-51593 |
 PowerLight Acquisition November, 2006 |
 This
presentation contains forward looking statements as defined in the Private
Securities Litigation Reform Act of 1995. This press release contains
forward looking statements as defined in the Private Securities Litigation Reform Act of 1995. We use words such as “believes,” “plans” and “expects” and similar expressions to identify forward-looking statements.
Forward-looking statements in this presentation include, but are not
limited to, statements related to the benefits of the proposed transaction
between SunPower and PowerLight, the completion of the transaction, our
plans and expectations for financial performance, the accretive nature of
the transaction and our ability to meet our long term financial model and margin projections, and the development and future cost structure of the solar power industry. These
forward-looking statements involve a number of risks and uncertainties
that could cause actual results to differ materially from those anticipated by these forward-looking statements, including difficulties encountered in integrating the merged businesses; the risk that the transaction does not close, including the risk that requisite stockholder and regulatory approvals may not be obtained; the possibility that expected synergies and cost savings will not be obtained; the uncertainty of business and economic conditions and
growth trends in the solar power industry; our ability to obtain adequate supply of polysilicon and silicon ingots to manufacture our products and the price we pay for such material, our ability to ramp new production lines, our ability to realize expected
manufacturing efficiencies, the possibility of production difficulties, the
risk of continuation of supply of products and components from suppliers to PowerLight, including competitors of SunPower, and the continuation of existing large-scale PowerLight
customer projects, and other risk factors are contained in documents that
the company files with the SEC, including the Form 10-K for fiscal 2005 and its recent 10-Qs, as well as filings we make with regard to this transaction. SunPower 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. Note that the financial information includes and identifies as such, non-GAAP
financial information. Management will provide a reconciliation to
GAAP for this financial information. Safe Harbor Statement
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 SunPower plans to file with the SEC a Registration Statement on Form S-4 in
connection with the transaction. The Registration Statement will contain important information about SunPower,
PowerLight, the transaction and related matters. Investors and security holders
are urged to read the Registration Statement carefully when they are available. Investors and security holders will be able to obtain free copies of the Registration Statement and other documents filed with the SEC by SunPower through the web site maintained by the SEC at www.sec.gov. In addition, investors and security holders will be able to obtain free copies of the Registration Statement from SunPower by contacting Investor Relations at 408-240-5588 or http://investors.sunpowercorp.com/sec.cfm. Important Registration Information |
 PowerLight Agreement Summary • $265 MM upfront consideration • $67.5 MM retention carve-out vesting over 2-4 years • Tax-free merger; 40% cash and 60% stock • Definitive agreement signed November 15, 2006 • Closing Q1 ’07 subject to customary closing conditions
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 PowerLight Acquisition Benefits • Investor Value – Accelerate revenue and EPS growth – EPS accretive (Non-GAAP) – Maintain long-term financial model objectives: 30/10/20
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 PowerLight Acquisition Benefits • Investor Value – Accelerate revenue and EPS growth – EPS accretive (Non-GAAP) – Maintain long-term financial model: 30/10/20 • Strategic Objectives – Extend leadership in key applications and markets – Apply technology leadership across the value chain – Accelerate product innovation to drive channel efficiency – Radically simplify & improve customer experience |
 SunPower
/ PowerLight Goals • Market Leadership – Commercial & residential in target markets – US production homes – Top solar brand • Technology Leadership – Highest efficiency solar cells and panels – Lowest cost / kWh system solutions • Compete with retail electric rates – Reduce installed system cost 50% by 2012 |
 Residential Retrofit New Production Homes Commercial & Public Power Plants SunPower and PowerLight Applications |
 Wafer Solar Cell Solar Panel System Ingot • Highest conversion efficiency • Unique, proprietary technology • Manufacturing excellence • Low engineering labor cost locations Polysilicon SunPower Value Chain Focus |
 PowerLight System Value Chain • Large-scale customer focus • Differentiated, high-value technology • More than 50 U.S. and international patents • Innovative financial solutions tailored to application Engineering Proj. Mngt. Monitor Service Finance |
 Commercial Public Sector Marquee Customer Base Home Builders |
 Germany New Jersey Broad Geographic Footprint Nevada Hawaii Portugal Serpa Ground Breaking Q2 ‘06 California Spain Korea November 2006 |
 • #1 US solar roofing product • Light-weight, no roof penetrations • Rapid installation, low labor cost • Insulation and protection value • Leverages high-efficiency panels PowerLight Technology Leadership: PowerGuard® |
 PowerLight Software Tools • Web-based solar system performance monitoring • Includes real-time home power consumption data • Automated design software facilitates system layout • Reduces system design and costing effort • Web-based solar system performance simulation • Validated with 100s of systems over 20 years System Design Tools PVGrid Home Services Network |
 SunPower Technology Leadership SunPower 215 Watt Panel Conventional 165 Watt Panel Superior Performance Superior Aesthetics solar |
 PowerLight’s Bavaria Solarpark 6.3 MW: Conventional 8.3 MW: SunPower |
 Synergy
Example: PowerTilt • Patented next-gen commercial roofing system • Product design incorporates mounting functionality • Factory assembled by SunPower • Integrated design reduces site labor • Lowest cost / kWh system solution TM |
 Synergy
Example: SunTile® • Attractive aesthetics • Maximum power • Space efficient • Easy-install design PowerLight SunTile® Roof Integrated System |
 2007* Revenue > $600 MM EPS (Non-GAAP) Immediately accretive Acquisition Financials Post Acquisition Post Acquisition Short – Term Impact Accelerates revenue and earnings growth Gross margin deviates by 250 – 350 bps from model during 2007 Long – Term Goals $1 billion run-rate revenue (2008) Achieve 30 / 10 / 20 financial model by late 2008 *Assumes consolidation in the beginning of Q1’07. |
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 Appendix Slides |
 PowerLight Profile • Over 100 MW deployed or in deployment • Global presence: US, Germany, Southern Europe, Korea • Strong market position for U.S. commercial systems • Strong market position for US solar production new homes • Early market leader in solar power plants • Complementary team and scope, low integration risk • Executive leaders: 50 + years of solar expertise |
 System
Design Leadership Opportunities Components: Supply chain: Monitoring: Features: Assembly: Mark-ups: Five Efficient Performance + load Integrated and efficient Factory 30% gross margin model Today Today Tomorrow Tomorrow Nine Complex Performance Redundancy Field & factory Multiple Opportunity Opportunity |
 • Lowest cost tracker • Up to 35% more energy • Single controller drives 250 kW • Leverages high-efficiency cells Extend Technology Leadership : PowerTracker® |
 Radically Simplify and Improve the Experience • Educate solar customers • Reduce design and order time • Rationalize equipment delivery • Design to limit installation time • Design to meet needs – Roof life – Insulation value – Aesthetics • Develop and train installers • Integrate performance monitoring • Reward customers |
 ($40) ($20) $0 $20 $40 $60 1 3 5 7 9 11 13 15 17 19 21 23 25 Year 2006 - CA Incentives 2016 - No Incentives 2016 – Goal: No Incentives 2006 – CA Incentives Solar Customer Cash Flow ($ Thousands) California Residential Solar Customer Economics |
 $0 $10 $20 $30 $40 $50 $60 $70 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4F Quarterly Revenue ($ Millions) $11 $16 $22 $29 $55 2005 2006 $70-72 SunPower Revenue Growth $42 $65 |
 Actual 9/30/05 Actual 9/30/05 Sales (1) Gross Margin Operating Expense Operating Margin 19% 18% 0.4% $22 Actual 9/30/06 Actual 9/30/06 25% 12% 13% $65 Q4 2006 (Street) Q4 2006 (Street) 26% 11% 15% $71 Long Term Target Long Term Target 30% 10% 20% Note: Excludes non-cash charges. (1) Sales estimates are First Call Consensus estimates. 30%+ CAGR ($ Millions) SunPower Financial Results and Plan |
 0 100 200 300 400 At IPO Today Q4 2006 2007F 2008F Installed Capacity (MW / year) Line 1 Lines 1-3 Lines 1-4 Lines 8-12 Lines 5-7 Cell Manufacturing Ramp Plan |
 Wafer Solar Cell Solar Panel System Ingot Polysilicon Upstream Landscape • High concentration of poly and ingot suppliers • Poly prices and margins are attracting new entrants – Approach: partner with new capacity providers • Ingot manufacturing is next supply bottleneck – Approach: JV in ingot manufacturing for 2007 and beyond |
 Growth
Aligned With Silicon Supply Silicon Supply Position (MW) 0 50 100 150 200 250 2007F 2008F Jan 1 Capacity Annual Silicon |
 Conventional Solar Cell 14 - 17% Efficiency SunPower’s Solar Cell 20 - 22% Efficiency P N Light Electrical contacts P P P N N N Electrical contacts Backside mirror Light Solar Cell Technology Comparison Silicon wafer Silicon wafer |