- 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.--(BUSINESS WIRE)--Jul. 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.
|
|
|
|
|
|
|
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.
|
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
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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.
|
|
|
|
|
|
|
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.
|
View source version on businesswire.com: http://www.businesswire.com/news/home/20170727006497/en/
Source: First Solar, Inc.
First Solar Investors
Steve Haymore
+1 602-414-9315
stephen.haymore@firstsolar.com
or
First
Solar Media
Steve Krum
+1 602-427-3359
steve.krum@firstsolar.com