Document




UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934

July 27, 2017
Date of Report (Date of earliest event reported)

FIRST SOLAR, INC.
(Exact name of registrant as specified in its charter)

Delaware
 
001-33156
 
20-4623678
(State or other jurisdiction of incorporation)
 
(Commission File Number)
 
(IRS Employer Identification No.)

350 West Washington Street
Suite 600
Tempe, Arizona 85281
(Address of principal executive offices, including zip code)

(602) 414-9300
(Registrant’s telephone number, including area code)

Not applicable
(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company o

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o





Item 2.02.    Results of Operations and Financial Condition

On July 27, 2017, First Solar, Inc. is issuing a press release and holding a conference call regarding its financial results for the second quarter ended June 30, 2017. A copy of the press release is furnished as Exhibit 99.1 to this Form 8-K.

The information in this Form 8-K and in Exhibit 99.1 attached hereto shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liability of that Section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.

Item 9.01.    Financial Statements and Exhibits

(d) Exhibits.
Exhibit Number
 
Description
99.1
 
Press Release of First Solar, Inc. dated July 27, 2017


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SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 
FIRST SOLAR, INC.
 
 
 
 
Date: July 27, 2017
By:
 
/s/ PAUL KALETA
 
Name:
 
Paul Kaleta
 
Title:
 
Executive Vice President, General Counsel and Secretary


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Exhibit


EXHIBIT 99.1
http://api.tenkwizard.com/cgi/image?quest=1&rid=23&ipage=11714335&doc=3
 
 
 
 
News Release

First Solar, Inc. Announces Second Quarter 2017 Financial Results
Net sales of $623 million
GAAP EPS of $0.50 and non-GAAP EPS of $0.64
Cash and marketable securities of $2.2 billion, net cash of $1.9 billion
Quarterly bookings of 1.5GWdc and new year-to-date bookings of 2.1GWdc 
Raise 2017 revenue, EPS, operating cash flow and net cash guidance

TEMPE, Ariz., July 27, 2017 First Solar, Inc. (Nasdaq: FSLR) today announced financial results for the second quarter of 2017. Net sales for the second quarter were $623 million, a decrease of $269 million from the prior quarter primarily due to lower systems sales, partially offset by higher third-party module sales.

The Company reported second quarter earnings of $0.50 per share, compared to earnings of $0.09 per share in the prior quarter. The second quarter was impacted by pre-tax restructuring and asset impairment charges of $18 million, related to previously announced actions. Restructuring and asset impairment charges in the first quarter were $20 million. Net income increased versus the prior quarter primarily as a result of improved gross margin and a discrete income tax benefit, partially offset by a decrease in other income. Second quarter non-GAAP earnings per share, adjusted for restructuring and asset impairment charges, were $0.64, compared to $0.25 in the first quarter.

Cash and marketable securities at the end of the second quarter decreased to $2.2 billion from $2.4 billion in the prior quarter. The decrease primarily resulted from a higher accounts receivable balance associated with the timing of certain recent module and project sales where payment is expected to be received in the third quarter. Cash flows used in operations were $168 million in the second quarter.

“We executed well in the second quarter with solid non-GAAP earnings of $0.64, record quarterly shipments of nearly 900MWdc and bookings of 1.5GWdc since our last earnings call,” said Mark Widmar, CEO of First Solar. “We are encouraged by the continuing strong demand for our Series 4 product and are focused on meeting our customers’ current needs. At the same time, our efforts to ensure the manufacturing and market readiness of Series 6 remains our highest priority. With the first Series 6 equipment being installed at our Ohio factory, and an increasing number of mid-to-late stage Series 6 bookings opportunities, we are pleased with our progress thus far.”

The Company raised its revenue, earnings per share, operating cash flow and net cash guidance for the year as a result of improved visibility into the sale of systems projects, a discrete tax benefit in the second quarter and continuing operational improvements.
2017 Guidance
Prior GAAP
Current GAAP
Prior Non-GAAP
Current Non-GAAP
Net Sales
$2.85B to $2.95B
$3.0B to $3.1B
 
 
Gross Margin %
12.5% to 14.5%
17.0% to 18.0%
 
 
Operating Expenses
$360M to $405M
$370M to $395M
$320M to $340M
$330M to $340M
Operating Income
$(25M) to $40M
$115M to $180M
$40M to $80M
$170M to $220M
Earnings per Share
$(0.30) to $0.40
$1.55 to $2.20
$0.25 to $0.75
$2.00 to $2.50
Net Cash Balance1
$1.5B to $1.7B
$2.1B to $2.3B
 
 
Operating Cash Flow
$350M to $450M
$850M to $950M
 
 
Capital Expenditures
$525M to $625M
$400M to $500M
 
 
Shipments
2.4GW to 2.6GW
2.6GW to 2.7GW
 
 

1.
Defined as cash and marketable securities less expected debt at the end of 2017.


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For a reconciliation of the non-GAAP measures presented above to measures presented in accordance with generally accepted accounting principles in the United States (“GAAP”), see the tables below.

First Solar has scheduled a conference call for today, July 27, 2017 at 4:30 p.m. ET to discuss this announcement. A live webcast of this conference call is available at http://investor.firstsolar.com/events.cfm. An audio replay of the conference call will also be available approximately two hours after the conclusion of the call. The audio replay will remain available until Aug 3, 2017 at 7:30 p.m. ET and can be accessed by dialing 888-203-1112 if you are calling from within the United States or 719-457-0820 if you are calling from outside the United States and entering the replay pass code 6484224. A replay of the webcast will be available on the Investors section of the Company’s website approximately two hours after the conclusion of the call and will remain available for approximately 90 calendar days.

About First Solar, Inc.

First Solar is a leading global provider of comprehensive photovoltaic (“PV”) solar systems which use its advanced module and system technology. The Company's integrated power plant solutions deliver an economically attractive alternative to fossil-fuel electricity generation today. From raw material sourcing through end-of-life module recycling, First Solar's renewable energy systems protect and enhance the environment. For more information about First Solar, please visit www.firstsolar.com.

For First Solar Investors

This release contains forward-looking statements which are made pursuant to safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include statements, among other things, concerning: effects on our financial statements and guidance resulting from certain module manufacturing changes and associated restructuring activities; our business strategy, including anticipated trends and developments in and management plans for our business and the markets in which we operate; future financial results, operating results, revenues, gross margin, operating expenses, products, projected costs (including estimated future module collection and recycling costs), warranties, solar module technology and cost reduction roadmaps, restructuring, product reliability, investments in unconsolidated affiliates and capital expenditures; our ability to continue to reduce the cost per watt of our solar modules; the impact of public policies, such as tariffs or other trade remedies imposed on solar cells and modules; our ability to expand manufacturing capacity worldwide; our ability to reduce the costs to construct PV solar power systems; research and development programs and our ability to improve the conversion efficiency of our solar modules; sales and marketing initiatives; and competition. These forward-looking statements are often characterized by the use of words such as "estimate," "expect," "anticipate," "project," "plan," "intend," "seek," "believe," "forecast," "foresee," "likely," "may," "should," "goal," "target," "might," "will," "could," "predict," "continue" and the negative or plural of these words and other comparable terminology. Forward-looking statements are only predictions based on our current expectations and our projections about future events. You should not place undue reliance on these forward-looking statements. We undertake no obligation to update any of these forward-looking statements for any reason. These forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to differ materially from those expressed or implied by these statements. These factors include, but are not limited to, the matters discussed in Item 1A "Risk Factors," of our most recent Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, and other filings with the Securities and Exchange Commission.

Contacts

First Solar Investors
Steve Haymore
+1 602-414-9315
stephen.haymore@firstsolar.com

First Solar Media
Steve Krum
+1 602-427-3359
steve.krum@firstsolar.com


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FIRST SOLAR, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share data)
(Unaudited)
 
 
 
June 30,
2017
 
December 31,
2016
ASSETS
 
 
 
 
Current assets:
 
 
 
 
Cash and cash equivalents
 
$
1,509,516

 
$
1,347,155

Marketable securities
 
719,569

 
607,991

Accounts receivable trade, net
 
260,994

 
266,687

Accounts receivable, unbilled and retainage
 
347,920

 
206,739

Inventories
 
344,473

 
363,219

Balance of systems parts
 
26,147

 
62,776

Project assets
 
35,992

 
700,800

Notes receivable, affiliate
 
19,600

 
15,000

Prepaid expenses and other current assets
 
172,701

 
217,462

Total current assets
 
3,436,912

 
3,787,829

Property, plant and equipment, net
 
784,937

 
629,142

PV solar power systems, net
 
461,617

 
448,601

Project assets
 
786,207

 
762,148

Deferred tax assets, net
 
262,879

 
255,152

Restricted cash and investments
 
383,722

 
371,307

Investments in unconsolidated affiliates and joint ventures
 
225,967

 
234,610

Goodwill
 
14,462

 
14,462

Other intangibles, net
 
83,834

 
87,970

Inventories
 
101,748

 
100,512

Notes receivable, affiliates
 
49,996

 
54,737

Other assets
 
88,005

 
77,898

Total assets
 
$
6,680,286

 
$
6,824,368

LIABILITIES AND STOCKHOLDERS’ EQUITY
 
 
 
 
Current liabilities:
 
 

 
 

Accounts payable
 
$
118,075

 
$
148,730

Income taxes payable
 
1,554

 
12,562

Accrued expenses
 
190,453

 
262,977

Current portion of long-term debt
 
13,574

 
27,966

Deferred revenue
 
31,503

 
308,704

Other current liabilities
 
148,689

 
146,942

Total current liabilities
 
503,848

 
907,881

Accrued solar module collection and recycling liability
 
175,001

 
166,277

Long-term debt
 
307,459

 
160,422

Other liabilities
 
402,669

 
371,439

Total liabilities
 
1,388,977

 
1,606,019

Commitments and contingencies
 
 
 
 
Stockholders’ equity:
 
 
 
 
Common stock, $0.001 par value per share; 500,000,000 shares authorized; 104,395,532 and 104,034,731 shares issued and outstanding at June 30, 2017 and December 31, 2016, respectively
 
104

 
104

Additional paid-in capital
 
2,779,294

 
2,765,310

Accumulated earnings
 
2,523,934

 
2,462,842

Accumulated other comprehensive loss
 
(12,023
)
 
(9,907
)
Total stockholders’ equity
 
5,291,309

 
5,218,349

Total liabilities and stockholders’ equity
 
$
6,680,286

 
$
6,824,368




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FIRST SOLAR, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
(Unaudited)
 
 
Three Months Ended
June 30,
 
Six Months Ended
June 30,
 
 
2017
 
2016
 
2017
 
2016
Net sales
 
$
623,326

 
$
1,016,424

 
$
1,515,117

 
$
1,892,492

Cost of sales
 
512,433

 
834,373

 
1,320,040

 
1,432,830

Gross profit
 
110,893

 
182,051

 
195,077

 
459,662

Operating expenses:
 
 
 
 
 
 
 
 
Research and development
 
21,341

 
32,931

 
44,140

 
63,118

Selling, general and administrative
 
48,957

 
63,776

 
97,156

 
131,279

Production start-up
 
8,381

 
55

 
9,531

 
55

Restructuring and asset impairments
 
18,286

 
85,532

 
38,317

 
85,532

Total operating expenses
 
96,965

 
182,294

 
189,144

 
279,984

Operating income (loss)
 
13,928

 
(243
)
 
5,933

 
179,678

Foreign currency loss, net
 
(2,444
)
 
(2,723
)
 
(2,198
)
 
(5,963
)
Interest income
 
7,555

 
6,529

 
13,972

 
12,935

Interest expense, net
 
(6,374
)
 
(7,151
)
 
(15,543
)
 
(11,793
)
Other (loss) income, net
 
(2,699
)
 
6,753

 
23,162

 
42,306

Income before taxes and equity in earnings of unconsolidated affiliates
 
9,966

 
3,165

 
25,326

 
217,163

Income tax benefit (expense)
 
40,028

 
(7,288
)
 
34,349

 
(35,319
)
Equity in earnings of unconsolidated affiliates, net of tax
 
1,969

 
(7,292
)
 
1,417

 
2,377

Net income (loss)
 
$
51,963

 
$
(11,415
)
 
$
61,092

 
$
184,221

Net income (loss) per share:
 
 
 
 
 
 
 
 
Basic
 
$
0.50

 
$
(0.11
)
 
$
0.59

 
$
1.80

Diluted
 
$
0.50

 
$
(0.11
)
 
$
0.58

 
$
1.78

Weighted-average number of shares used in per share calculations:
 
 
 
 
 
 
 
 
Basic
 
104,338

 
102,287

 
104,221

 
102,070

Diluted
 
104,611

 
102,287

 
104,511

 
103,378




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Non-GAAP Financial Measures

In the press release above, we provided non-GAAP earnings per share for the three months ended June 30, 2017 and March 31, 2017. We have included these non-GAAP financial measures to adjust for (i) restructuring, asset impairment and related charges primarily associated with the transition from Series 4 to Series 6 production and (ii) the tax effect associated with these items. We believe non-GAAP earnings per share, when taken together with corresponding GAAP financial measures, to be relevant and useful information to our investors because it provides them with additional information in assessing our financial operating results. Our management uses this non-GAAP financial measure in evaluating our operating performance. However, this measure has limitations, including that it excludes the effect of certain changes to our assets and liabilities and certain amounts that we may ultimately have to pay in cash. Accordingly, this non-GAAP financial measure should be considered in addition to, and not as a substitute for, or superior to earnings per share prepared in accordance with GAAP. The following is the reconciliation of earnings per share prepared in accordance with GAAP to non-GAAP earnings per share for each period presented (in millions, except per share amounts):
 
 
Three Months Ended
June 30, 2017
Net income
 
$
52.0

 
 
 
Restructuring and asset impairments
 
18.3

Tax effect*
 
(3.8
)
Non-GAAP net income
 
$
66.5

 
 
 
Weighted-average number of shares used for diluted earnings per share
 
104.6

 
 

Diluted GAAP earnings per share
 
$
0.50

Diluted Non-GAAP earnings per share
 
$
0.64


*
Restructuring treated as a non-discrete item for tax purposes and will be reflected in the effective tax rate over the duration of 2017.

 
 
Three Months Ended
March 31, 2017
Net income
 
$
9.1

 
 
 
Restructuring and asset impairments
 
20.0

Tax effect*
 
(2.7
)
Non-GAAP net income
 
$
26.4

 
 
 
Weighted-average number of shares used for diluted earnings per share
 
104.4

 
 
 
Diluted GAAP earnings per share
 
$
0.09

Diluted Non-GAAP earnings per share
 
$
0.25


*
Restructuring treated as a non-discrete item for tax purposes and will be reflected in the effective tax rate over the duration of 2017.


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In the press release above, we provided non-GAAP guidance as of the date of this press release for our operating expenses, operating income and earnings per share for the year ending December 31, 2017. We have included these forward-looking non-GAAP financial measures to adjust our GAAP projections of such financial measures for, as applicable, (i) restructuring, asset impairment and related charges primarily associated with the transition from Series 4 to Series 6 production and (ii) additional restructuring activities expected during the remainder of the year. Other GAAP charges, including those related to certain asset impairments or restructuring programs, that would be excluded from non-GAAP earnings per share are possible for the periods presented, but such amounts are dependent on numerous factors that we currently cannot ascertain with sufficient certainty or are presently unknown. These GAAP charges are also dependent upon future events and valuations that have not yet occurred or been performed. We believe these forward-looking non-GAAP financial measures, when taken together with our corresponding financial guidance based on GAAP, to be relevant and useful information to our investors because they provide them with additional information in assessing our financial operating results. Our management also uses such non-GAAP guidance in evaluating our operating performance. However, such measures have limitations, including that they exclude the effect of certain changes to our assets and liabilities, certain amounts that we may ultimately have to pay in cash and certain tax impacts. Accordingly, these forward-looking non-GAAP financial measures that exclude the aforementioned items should be considered in addition to, and not as substitutes for or superior to, financial guidance based on GAAP. The following are the reconciliations of our current and prior non-GAAP 2017 guidance to our current and prior GAAP 2017 guidance (in millions, except per share amounts):

Reconciliation of Non-GAAP 2017 Guidance to GAAP 2017 Guidance
 
 
GAAP Guidance
 
Restructuring Charges1
 
Non-GAAP Guidance
Operating Expenses
 
$370 to $395
 
$(40) to $(55)
 
$330 to $340
Operating Income
 
$115 to $180
 
$55 to $40
 
$170 to $220
Earnings per Share
 
$1.55 to $2.20
 
$0.45 to $0.30
 
$2.00 to $2.50

1.
$40 to $55 million of restructuring related charges associated with our transition from Series 4 to Series 6 module manufacturing.

Reconciliation of Prior Non-GAAP 2017 Guidance to Prior GAAP 2017 Guidance
 
 
GAAP Guidance
 
Restructuring Charges1
 
Non-GAAP Guidance
Operating Expenses
 
$360 to $405
 
$(40) to $(65)
 
$320 to $340
Operating Income
 
$(25) to $40
 
$65 to $40
 
$40 to $80
Earnings per Share
 
$(0.30) to $0.40
 
$0.55 to $0.35
 
$0.25 to $0.75

1.
$40 to $65 million of restructuring related charges associated with our transition from Series 4 to Series 6 module manufacturing.



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