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 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 July 26, 2018, First Solar, Inc. is issuing a press release and holding a conference call regarding its financial results for the second quarter ended June 30, 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: July 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=12371880&doc=3
 
 
 
 
News Release

First Solar, Inc. Announces Second Quarter 2018 Financial Results
Net sales of $309 million
Net loss per share of $(0.46)
Cash and marketable securities of $3.1 billion, net cash of $2.7 billion
YTD net bookings of 4.1GWDC; 0.9GWDC booked since prior earnings call
Series 6 commercial shipments commenced from second factory location
Maintain 2018 EPS guidance and raise 2018 net cash guidance

TEMPE, Ariz., July 26, 2018 First Solar, Inc. (Nasdaq: FSLR) today announced financial results for the second quarter of 2018. Net sales for the second quarter were $309 million, a decrease of $258 million from the prior quarter due to lower system and third-party module sales. Second quarter system sales were impacted by the timing of certain project sales, which are now anticipated to close in the second half of the year.

The Company reported a second quarter loss per share of $(0.46), compared to earnings per share of $0.78 in the first quarter of 2018. Net income decreased compared to the prior quarter primarily due to lower revenue and a decrease in gross margin.

Cash and marketable securities at the end of the second quarter increased to $3.1 billion from $2.9 billion at the end of the first quarter. The increase primarily resulted from proceeds received from the sale of the Company’s interests in 8point3 Energy Partners, partially offset by ongoing capital investment in Series 6 manufacturing capacity.

“We have taken another important step forward in our Series 6 transition with the first commercial shipments from our Malaysia factory,” said Mark Widmar, CEO of First Solar. “With two factories now producing Series 6 modules and a third factory on the cusp of starting production we have made significant progress during the past quarter. Customer demand for our Series 6 product continues to be solid with nearly 900 megawatts of new contracts signed since our last earnings update. With year-to-date bookings of 4.1GWDC and total contracted volume of 10.9GWDC that extends to the end of 2020, we continue to have good visibility to future demand.”

2018 guidance was updated to reflect a narrower expected range of net sales and a decrease in gross margin primarily due to near-term increases in Series 6 module cost per watt. Earnings per share guidance is unchanged as a result of lower operating expenses and other items offsetting the revised gross margin forecast. The complete update to the guidance ranges is as follows:
2018 GAAP Guidance
Prior
Current
Net Sales
$2.45B to $2.65B
$2.5B to $2.6B
Gross Margin % (1)
21.5% to 22.5%
20.5% to 21.5%
Operating Expenses (2)
$400M to $410M
$390M to $400M
Operating Income
$130M to $180M
$120M to $160M
Earnings per Share
$1.50 to $1.90
$1.50 to $1.90
Net Cash Balance (3)
$2.0B to $2.2B
$2.2B to $2.4B
Operating Cash Flow
$0M to $100M
$100M to $200M
Capital Expenditures
$850M to $950M
$800M to $900M
Shipments
2.9GW to 3.0GW
2.8GW to 2.9GW


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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

First Solar has scheduled a conference call for today, July 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 August 2, 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 6703587. 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 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 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.



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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)
 
 
 
June 30,
2018
 
December 31,
2017
ASSETS
 
 
 
 
Current assets:
 
 
 
 
Cash and cash equivalents
 
$
2,024,491

 
$
2,268,534

Marketable securities
 
1,110,421

 
720,379

Accounts receivable trade, net
 
125,379

 
211,797

Accounts receivable, unbilled and retainage
 
177,711

 
174,608

Inventories
 
234,201

 
172,370

Balance of systems parts
 
72,411

 
28,840

Project assets
 
62,475

 
77,931

Notes receivable, affiliate
 
21,398

 
20,411

Prepaid expenses and other current assets
 
157,553

 
157,902

Total current assets
 
3,986,040

 
3,832,772

Property, plant and equipment, net
 
1,484,177

 
1,154,537

PV solar power systems, net
 
316,564

 
417,108

Project assets
 
500,863

 
424,786

Deferred tax assets, net
 
93,730

 
51,417

Restricted cash and investments
 
332,043

 
424,783

Equity method investments
 
8,110

 
217,230

Goodwill
 
14,462

 
14,462

Intangibles assets, net
 
77,095

 
80,227

Inventories
 
119,160

 
113,277

Note receivable, affiliate
 

 
48,370

Other assets
 
93,448

 
85,532

Total assets
 
$
7,025,692

 
$
6,864,501

LIABILITIES AND STOCKHOLDERS’ EQUITY
 
 
 
 
Current liabilities:
 
 

 
 

Accounts payable
 
$
161,139

 
$
120,220

Income taxes payable
 
29,822

 
19,581

Accrued expenses
 
381,053

 
366,827

Current portion of long-term debt
 
7,741

 
13,075

Deferred revenue
 
199,482

 
81,816

Other current liabilities
 
36,175

 
48,757

Total current liabilities
 
815,412

 
650,276

Accrued solar module collection and recycling liability
 
166,837

 
166,609

Long-term debt
 
448,554

 
380,465

Other liabilities
 
484,061

 
568,454

Total liabilities
 
1,914,864

 
1,765,804

Commitments and contingencies
 
 
 
 
Stockholders’ equity:
 
 
 
 
Common stock, $0.001 par value per share; 500,000,000 shares authorized; 104,797,535 and 104,468,460 shares issued and outstanding at June 30, 2018 and December 31, 2017, respectively
 
105

 
104

Additional paid-in capital
 
2,809,272

 
2,799,107

Accumulated earnings
 
2,331,688

 
2,297,227

Accumulated other comprehensive (loss) income
 
(30,237
)
 
2,259

Total stockholders’ equity
 
5,110,828

 
5,098,697

Total liabilities and stockholders’ equity
 
$
7,025,692

 
$
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
 
Six Months Ended
 
 
June 30,
2018
 
March 31,
2018
 
June 30,
2017
 
June 30,
2018
 
June 30,
2017
Net sales
 
$
309,318

 
$
567,265

 
$
623,326

 
$
876,583

 
$
1,515,117

Cost of sales
 
317,376

 
394,467

 
512,433

 
711,843

 
1,320,040

Gross (loss) profit
 
(8,058
)
 
172,798

 
110,893

 
164,740

 
195,077

Operating expenses:
 
 
 
 
 
 
 
 
 
 
Selling, general and administrative
 
50,854

 
41,126

 
48,957

 
91,980

 
97,156

Research and development
 
20,370

 
20,324

 
21,341

 
40,694

 
44,140

Production start-up
 
24,352

 
37,084

 
8,381

 
61,436

 
9,531

Restructuring and asset impairments
 

 

 
18,286

 

 
38,317

Total operating expenses
 
95,576

 
98,534

 
96,965

 
194,110

 
189,144

Operating (loss) income
 
(103,634
)
 
74,264

 
13,928

 
(29,370
)
 
5,933

Foreign currency gain (loss), net
 
2,422

 
(2,517
)
 
(2,444
)
 
(95
)
 
(2,198
)
Interest income
 
16,865

 
11,824

 
7,555

 
28,689

 
13,972

Interest expense, net
 
(6,065
)
 
(5,182
)
 
(6,374
)
 
(11,247
)
 
(15,543
)
Other (loss) income, net
 
(4,328
)
 
17,934

 
(2,699
)
 
13,606

 
23,162

(Loss) income before taxes and equity in earnings
 
(94,740
)
 
96,323

 
9,966

 
1,583

 
25,326

Income tax benefit (expense)
 
6,164

 
(11,625
)
 
40,028

 
(5,461
)
 
34,349

Equity in earnings, net of tax
 
40,085

 
(1,747
)
 
1,969

 
38,338

 
1,417

Net (loss) income
 
$
(48,491
)
 
$
82,951

 
$
51,963

 
$
34,460

 
$
61,092

 
 
 
 
 
 
 
 
 
 
 
Net (loss) income per share:
 
 
 
 
 
 
 
 
 
 
Basic
 
$
(0.46
)
 
$
0.79

 
$
0.50

 
$
0.33

 
$
0.59

Diluted
 
$
(0.46
)
 
$
0.78

 
$
0.50

 
$
0.32

 
$
0.58

Weighted-average number of shares used in per share calculations:
 
 
 
 
 
 
 
 
 
 
Basic
 
104,776

 
104,550

 
104,338

 
104,664

 
104,221

Diluted
 
104,776

 
106,305

 
104,611

 
106,234

 
104,511




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