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

April 26, 2018
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 April 26, 2018, First Solar, Inc. is issuing a press release and holding a conference call regarding its financial results for the first quarter ended March 31, 2018. 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
 


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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: April 26, 2018
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=12206559&doc=3
 
 
 
 
News Release

First Solar, Inc. Announces First Quarter 2018 Financial Results
Net sales of $567 million
GAAP EPS of $0.78
Cash and marketable securities of $2.9 billion, net cash of $2.4 billion
YTD net bookings of 3.3GWDC; 2.0GWDC booked since prior earnings call
Series 6 module production commenced in early April

TEMPE, Ariz., April 26, 2018 First Solar, Inc. (Nasdaq: FSLR) today announced financial results for the first quarter 2018. Net sales for the first quarter were $567 million, an increase of $228 million from the prior quarter due to the sale of international projects in India and Japan and the sale of the Rosamond project in the U.S., partially offset by lower third-party module sales.

The Company reported first quarter GAAP earnings per share (“EPS”) of $0.78, compared to a GAAP loss per share of $(4.14) in the fourth quarter of 2017. The previous quarter non-GAAP loss per share, adjusted for restructuring and asset impairment charges and the impact of U.S. tax reform, was $(0.25). Net income increased compared to the prior quarter primarily as a result of lower tax expense, improved net sales, the mix of higher gross profit projects and higher other income.

Cash and marketable securities at the end of the first quarter decreased slightly to $2.9 billion from $3.0 billion at the end of the fourth quarter. The decrease primarily resulted from capital expenditures to support the Series 6 manufacturing ramp, partially offset by a reimbursement of overfunded amounts from our module collection and recycling trust.

“Our first quarter earnings and continued bookings momentum provide a positive start to the year,” said Mark Widmar, CEO of First Solar. “Our earnings for the quarter were supported by the sale of both domestic and international projects, combined with efficient management of core operating expenses. Customer demand for our Series 6 product continues to be strong as evidenced by our year-to-date net bookings of 3.3GWDC. We also achieved significant technology milestones this month with the start of Series 6 production in Ohio and the first commercial module shipments to systems projects. We remain focused on leveraging the advantages of our differentiated technology and applying our disciplined operating approach to achieve our near-term and long-term priorities.”

The Company lowered its 2018 net cash guidance by $100 million primarily as a result of higher capital expenditures for additional Series 6 capacity.

2018 GAAP Guidance
Prior
Current
Net Sales
$2.45B to $2.65B
Unchanged
Gross Margin %1
21.5% to 22.5%
Unchanged
Operating Expenses2
$400M to $410M
Unchanged
Operating Income
$130M to $180M
Unchanged
Earnings per Share
$1.50 to $1.90
Unchanged
Net Cash Balance3
$2.1B to $2.3B
$2.0B to $2.2B
Operating Cash Flow
$100M to $200M
$0 to $100M
Capital Expenditures
$700M to $800M
$850M to $950M
Shipments
2.9GW to 3.0GW
Unchanged


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1.
Includes approximately $60 million of ramp penalty costs
2.
Includes approximately $120 million of production start-up expense
3.
Defined as cash and marketable securities less expected debt at the end of 2018

For a reconciliation of the non-GAAP measure presented above to the corresponding measure 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, April 26, 2018 at 4:30 p.m. ET to discuss this announcement. A live webcast of this conference call is available at 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 May 3, 2018 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 1693973. 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. All statements in this release, other than statements of historical fact, are forward-looking statements. These forward-looking statements include, but are not limited to, statements concerning: our financial guidance for 2018; the impact of U.S. tax reform; the transition to Series 6 module manufacturing in 2018; and our business and financial objectives for 2018. 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 and therefore speak only as of the date of this release. 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, whether as a result of new information, future developments or otherwise. 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: structural imbalances in global supply and demand for PV solar modules; the market for renewable energy, including solar energy; our competitive position and other key competitive factors; reduction, elimination, or expiration of government subsidies, policies, and support programs for solar energy projects; our ability to execute on our long-term strategic plans; our ability to execute on our solar module technology and cost reduction roadmaps; interest rate fluctuations and both our and our customers’ ability to secure financing; our ability to attract new customers and to develop and maintain existing customer and supplier relationships; our ability to successfully develop and complete our systems business projects; our ability to convert existing production facilities to support new product lines, such as Series 6 module manufacturing; general economic and business conditions, including those influenced by U.S., international, and geopolitical events; environmental responsibility, including with respect to cadmium telluride (“CdTe”) and other semiconductor materials; claims under our limited warranty obligations; changes in, or the failure to comply with, government regulations and environmental, health, and safety requirements; effects resulting from pending litigation; future collection and recycling costs for solar modules covered by our module collection and recycling program; our ability to protect our intellectual property; our ability to prevent and/or minimize the impact of cyber-attacks or other breaches of our information systems; our continued investment in research and development; the supply and price of components and raw materials, including CdTe; our ability to attract and retain key executive officers and associates; and the matters discussed under the captions “Risk Factors” and “Management’s Discussion and Analysis of Financial Conditions and Results of Operations” of


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our most recent Annual Report on Form 10-K and our subsequently filed Quarterly Reports on Form 10-Q, as supplemented by our other filings with the Securities and Exchange Commission.

Contacts

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

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


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FIRST SOLAR, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands, except share data)
(Unaudited)
 
 
 
March 31,
2018
 
December 31,
2017
ASSETS
 
 
 
 
Current assets:
 
 
 
 
Cash and cash equivalents
 
$
1,858,338

 
$
2,268,534

Marketable securities
 
1,020,136

 
720,379

Accounts receivable trade, net
 
273,277

 
211,797

Accounts receivable, unbilled and retainage
 
151,393

 
174,608

Inventories
 
174,070

 
172,370

Balance of systems parts
 
65,374

 
28,840

Project assets
 
10,094

 
77,931

Notes receivable, affiliate
 
20,411

 
20,411

Prepaid expenses and other current assets
 
197,206

 
157,902

Total current assets
 
3,770,299

 
3,832,772

Property, plant and equipment, net
 
1,311,642

 
1,154,537

PV solar power systems, net
 
355,143

 
417,108

Project assets
 
430,678

 
424,786

Deferred tax assets, net
 
64,427

 
51,417

Restricted cash and investments
 
354,082

 
424,783

Equity method investments
 
200,955

 
217,230

Goodwill
 
14,462

 
14,462

Intangibles assets, net
 
79,607

 
80,227

Inventories
 
116,397

 
113,277

Note receivable, affiliate
 
47,798

 
48,370

Other assets
 
94,699

 
85,532

Total assets
 
$
6,840,189

 
$
6,864,501

LIABILITIES AND STOCKHOLDERS’ EQUITY
 
 
 
 
Current liabilities:
 
 
 
 
Accounts payable
 
$
136,897

 
$
120,220

Income taxes payable
 
10,164

 
19,581

Accrued expenses
 
297,446

 
366,827

Current portion of long-term debt
 
6,062

 
13,075

Deferred revenue
 
67,336

 
81,816

Other current liabilities
 
35,833

 
48,757

Total current liabilities
 
553,738

 
650,276

Accrued solar module collection and recycling liability
 
170,352

 
166,609

Long-term debt
 
431,817

 
380,465

Other liabilities
 
524,911

 
568,454

Total liabilities
 
1,680,818

 
1,765,804

Commitments and contingencies
 
 
 
 
Stockholders’ equity:
 
 
 
 
Common stock, $0.001 par value per share; 500,000,000 shares authorized; 104,762,691 and 104,468,460 shares issued and outstanding at March 31, 2018 and December 31, 2017, respectively
 
105

 
104

Additional paid-in capital
 
2,797,671

 
2,799,107

Accumulated earnings
 
2,380,178

 
2,297,227

Accumulated other comprehensive (loss) income
 
(18,583
)
 
2,259

Total stockholders’ equity
 
5,159,371

 
5,098,697

Total liabilities and stockholders’ equity
 
$
6,840,189

 
$
6,864,501




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FIRST SOLAR, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
(Unaudited)
 
 
Three Months Ended
 
 
March 31,
2018
 
December 31,
2017
 
March 31,
2017
Net sales
 
$
567,265

 
$
339,181

 
$
891,791

Cost of sales
 
394,467

 
277,111

 
807,607

Gross profit
 
172,798

 
62,070

 
84,184

Operating expenses:
 
 
 
 
 
 
Selling, general and administrative
 
41,126

 
54,997

 
48,199

Research and development
 
20,324

 
23,583

 
22,799

Production start-up
 
37,084

 
20,488

 
1,150

Restructuring and asset impairments
 

 
(1,927
)
 
20,031

Total operating expenses
 
98,534

 
97,141

 
92,179

Operating income (loss)
 
74,264

 
(35,071
)
 
(7,995
)
Foreign currency (loss) gain, net
 
(2,517
)
 
(3,474
)
 
246

Interest income
 
11,824

 
13,340

 
6,417

Interest expense, net
 
(5,182
)
 
(6,073
)
 
(9,169
)
Other income (expense), net
 
17,934

 
(1,215
)
 
25,861

Income (loss) before taxes and equity in earnings
 
96,323

 
(32,493
)
 
15,360

Income tax expense
 
(11,625
)
 
(398,765
)
 
(5,679
)
Equity in earnings, net of tax
 
(1,747
)
 
(1,196
)
 
(552
)
Net income (loss)
 
$
82,951

 
$
(432,454
)
 
$
9,129

 
 
 
 
 
 
 
Net income (loss) per share:
 
 
 
 
 
 
Basic
 
$
0.79

 
$
(4.14
)
 
$
0.09

Diluted
 
$
0.78

 
$
(4.14
)
 
$
0.09

Weighted-average number of shares used in per share calculations:
 
 
 
 
 
 
Basic
 
104,550

 
104,448

 
104,103

Diluted
 
106,305

 
104,448

 
104,410




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Non-GAAP Financial Measures

In this release, we provide non-GAAP earnings per share for the three months ended December 31, 2017. We have included this non-GAAP financial measure to adjust for (i) restructuring, asset impairment and related charges primarily associated with the transition from Series 4 to Series 6 production, (ii) the tax effect associated with these items and (iii) the tax effect associated with U.S. tax reform. We believe non-GAAP earnings per share, when taken together with corresponding GAAP financial measure, is 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 the period presented (in millions, except per share amounts):
 
 
Three Months Ended
December 31, 2017
Net loss
 
$
(432.5
)
 
 
 
Restructuring and asset impairments
 
(1.9
)
Tax effect of restructuring and asset impairments*
 
0.2

Tax effect of U.S. tax reform
 
$
408.1

Non-GAAP net loss
 
$
(26.1
)
 
 
 
Weighted-average number of shares used for diluted earnings per share
 
104.4

 
 

GAAP loss per share
 
$
(4.14
)
Non-GAAP loss per share
 
$
(0.25
)

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




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