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

October 26, 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 October 26, 2017, First Solar, Inc. is issuing a press release and holding a conference call regarding its financial results for the third quarter ended September 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
 


2



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: October 26, 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=11854850&doc=3
 
 
 
 
News Release

First Solar, Inc. Announces Third Quarter 2017 Financial Results
Net sales of $1.1 billion
GAAP EPS of $1.95
Cash and marketable securities of $2.7 billion, net cash of $2.4 billion
4.5GWdc quarterly net bookings, 6.7GWdc YTD net bookings
Raises EPS guidance for 2017

TEMPE, Ariz., October 26, 2017 First Solar, Inc. (Nasdaq: FSLR) today announced financial results for the third quarter of 2017. Net sales for the third quarter were $1.1 billion, an increase of $464 million from the prior quarter primarily due to the sale of the California Flats and Cuyama projects and higher third-party module sales.

The Company reported third quarter earnings per share (“EPS”) of $1.95, compared to EPS of $0.50 in the prior quarter. The third quarter was impacted by pre-tax restructuring and asset impairment charges of less than $1 million, compared to $18 million in the second quarter. Net income increased versus the prior quarter primarily as a result of higher net sales, improved gross margin and lower restructuring charges. Third quarter non-GAAP EPS, adjusted for restructuring and asset impairment charges, was $1.95, compared to $0.64 in the second quarter.

Cash and marketable securities at the end of the third quarter increased to $2.7 billion from $2.2 billion in the prior quarter. The increase primarily resulted from cash received from projects sold in the third quarter. Cash flows from operations were $581 million in the third quarter.

“Third quarter results were highlighted by record bookings and strong earnings resulting from the sale of our California Flats project,” said Mark Widmar, CEO of First Solar. “Our 4.5GWdc of bookings demonstrates both the robust market demand for our Series 4 and Series 6 module technology and the acceleration of procurement timing by certain customers. Closing the sale of our California Flats project was also an important milestone towards achieving our financial guidance for the year. While we are pleased with our recent results, we continue to be intently focused on the success of our Series 6 transition.”

Based on results for the third quarter, the Company updated 2017 guidance as follows:
2017 Guidance
Prior GAAP
Current GAAP
Prior Non-GAAP
Current Non-GAAP
Net Sales
$3.0B to $3.1B
Unchanged
 
 
Gross Margin %
17.0% to 18.0%
~18.0%
 
 
Operating Expenses
$370M to $395M
$370M to $385M
$330M to $340M
Unchanged
Operating Income
$115M to $180M
$165M to $190M
$170M to $220M
$210M to $230M
Earnings per Share
$1.55 to $2.20
$2.05 to $2.30
$2.00 to $2.50
$2.40 to $2.60
Net Cash Balance1
$2.1B to $2.3B
Unchanged
 
 
Operating Cash Flow
$850M to $950M
Unchanged
 
 
Capital Expenditures
$400M to $500M
Unchanged
 
 
Shipments
2.6GW to 2.7GW
Unchanged
 
 

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

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.



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First Solar has scheduled a conference call for today, October 26, 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. 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 Nov 2, 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 6807520. 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)
 
 
 
September 30,
2017
 
December 31,
2016
ASSETS
 
 
 
 
Current assets:
 
 
 
 
Cash and cash equivalents
 
$
2,019,073

 
$
1,347,155

Marketable securities
 
699,544

 
607,991

Accounts receivable trade, net
 
344,645

 
266,687

Accounts receivable, unbilled and retainage
 
455,118

 
206,739

Inventories
 
217,555

 
363,219

Balance of systems parts
 
20,892

 
62,776

Project assets
 
67,263

 
700,800

Note receivable, affiliate
 

 
15,000

Prepaid expenses and other current assets
 
142,404

 
217,462

Total current assets
 
3,966,494

 
3,787,829

Property, plant and equipment, net
 
940,119

 
629,142

PV solar power systems, net
 
454,483

 
448,601

Project assets
 
406,396

 
762,148

Deferred tax assets, net
 
276,423

 
255,152

Restricted cash and investments
 
408,873

 
371,307

Investments in unconsolidated affiliates and joint ventures
 
227,661

 
234,610

Goodwill
 
14,462

 
14,462

Other intangibles, net
 
81,765

 
87,970

Inventories
 
110,412

 
100,512

Notes receivable, affiliates
 
69,432

 
54,737

Other assets
 
98,173

 
77,898

Total assets
 
$
7,054,693

 
$
6,824,368

LIABILITIES AND STOCKHOLDERS’ EQUITY
 
 
 
 
Current liabilities:
 
 

 
 

Accounts payable
 
$
130,704

 
$
148,730

Income taxes payable
 
4,396

 
12,562

Accrued expenses
 
317,325

 
262,977

Current portion of long-term debt
 
13,451

 
27,966

Deferred revenue
 
69,095

 
308,704

Other current liabilities
 
44,046

 
146,942

Total current liabilities
 
579,017

 
907,881

Accrued solar module collection and recycling liability
 
163,707

 
166,277

Long-term debt
 
330,209

 
160,422

Other liabilities
 
469,364

 
371,439

Total liabilities
 
1,542,297

 
1,606,019

Commitments and contingencies
 
 
 
 
Stockholders’ equity:
 
 
 
 
Common stock, $0.001 par value per share; 500,000,000 shares authorized; 104,431,990 and 104,034,731 shares issued and outstanding at September 30, 2017 and December 31, 2016, respectively
 
104

 
104

Additional paid-in capital
 
2,788,467

 
2,765,310

Accumulated earnings
 
2,729,681

 
2,462,842

Accumulated other comprehensive loss
 
(5,856
)
 
(9,907
)
Total stockholders’ equity
 
5,512,396

 
5,218,349

Total liabilities and stockholders’ equity
 
$
7,054,693

 
$
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
September 30,
 
Nine Months Ended
September 30,
 
 
2017
 
2016
 
2017
 
2016
Net sales
 
$
1,087,026

 
$
681,276

 
$
2,602,143

 
$
2,573,768

Cost of sales
 
795,226

 
510,368

 
2,115,266

 
1,943,198

Gross profit
 
291,800

 
170,908

 
486,877

 
630,570

Operating expenses:
 
 
 
 
 
 
 
 
Selling, general and administrative
 
50,546

 
60,345

 
147,702

 
191,624

Research and development
 
20,850

 
32,173

 
64,990

 
95,291

Production start-up
 
12,624

 
752

 
22,155

 
807

Restructuring and asset impairments
 
791

 
4,314

 
39,108

 
89,846

Total operating expenses
 
84,811

 
97,584

 
273,955

 
377,568

Operating income
 
206,989

 
73,324

 
212,922

 
253,002

Foreign currency loss, net
 
(3,968
)
 
(2,296
)
 
(6,166
)
 
(8,259
)
Interest income
 
8,392

 
5,894

 
22,364

 
18,829

Interest expense, net
 
(4,149
)
 
(5,563
)
 
(19,692
)
 
(17,356
)
Other income, net
 
2,018

 
6,419

 
25,180

 
48,725

Income before taxes and equity in earnings of unconsolidated affiliates
 
209,282

 
77,778

 
234,608

 
294,941

Income tax (expense) benefit
 
(7,580
)
 
68,205

 
26,769

 
32,886

Equity in earnings of unconsolidated affiliates, net of tax
 
4,045

 
4,474

 
5,462

 
6,851

Net income
 
$
205,747

 
$
150,457

 
$
266,839

 
$
334,678

Net income per share:
 
 
 
 
 
 
 
 
Basic
 
$
1.97

 
$
1.46

 
$
2.56

 
$
3.27

Diluted
 
$
1.95

 
$
1.45

 
$
2.54

 
$
3.25

Weighted-average number of shares used in per share calculations:
 
 
 
 
 
 
 
 
Basic
 
104,432

 
103,339

 
104,287

 
102,496

Diluted
 
105,660

 
103,684

 
104,889

 
103,110




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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 September 30, 2017 and June 30, 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
September 30, 2017
Net income
 
$
205.7

 
 
 
Restructuring and asset impairments
 
0.8

Tax effect*
 
(0.1
)
Non-GAAP net income
 
$
206.4

 
 
 
Weighted-average number of shares used for diluted earnings per share
 
105.7

 
 

Diluted GAAP earnings per share
 
$
1.95

Diluted Non-GAAP earnings per share
 
$
1.95


*
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
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.


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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 $385
 
$(40) to $(45)
 
$330 to $340
Operating Income
 
$165 to $190
 
$45 to $40
 
$210 to $230
Earnings per Share
 
$2.05 to $2.30
 
$0.35 to $0.30
 
$2.40 to $2.60

1.
$40 to $45 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
 
$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.



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