- Net sales of $688 million
- GAAP earnings per share of
$1.49
- Non-GAAP earnings per share of
$1.22
- Cash and marketable securities of
$2.1 billion, net cash of $1.3 billion
- Maintain 2016 EPS guidance; Revenue
guidance lowered for revised project sale timing
First Solar, Inc. (Nasdaq: FSLR) today announced financial
results for the third quarter of 2016. Net sales were $688 million,
a decrease of $246 million from the prior quarter, due to the
completion of multiple systems projects during the quarter,
partially offset by higher module-only sales.
The Company reported third quarter earnings per share of $1.49,
compared to $0.13 in the prior quarter. The third quarter was
impacted by pre-tax charges of $4 million, related to previously
announced restructuring actions. Restructuring related charges in
the second quarter were $86 million. Third quarter non-GAAP
earnings per share, adjusted for restructuring charges and a
foreign tax benefit, were $1.22, compared to $0.87 in the second
quarter. Net income was higher versus the prior quarter as a result
of lower restructuring charges and the aforementioned foreign tax
benefit.
Cash and marketable securities at the end of the third quarter
increased to $2.1 billion, primarily due to borrowing under the
Company’s revolving credit facility. The short-term borrowing is a
result of the ongoing construction of large scale projects which
have not yet been sold. Cash flows used in operations were $76
million in the third quarter.
“In the third quarter our operational and financial results were
solid,” said Mark Widmar, CEO of First Solar. “Our entire fleet
module efficiency for the past quarter was 16.5% and our lead line
efficiency exited the quarter at 16.9%, demonstrating continued
execution on our technology roadmap. We are pleased with our
current year financial performance; however, current market
conditions are extremely challenging and require us to carefully
assess our short and long-term strategic response.”
The Company updated its 2016 guidance based on third quarter
results and the revised sale timing for the California Flats and
Moapa projects. These projects are now expected to be sold in 2017.
The updated guidance is as follows:
2016 Guidance Prior GAAP
Current GAAP Prior Non-GAAP
Current Non-GAAP Net Sales $3.8B to
$4.0B
$2.8B to $2.9B
Gross Margin % 18.5% to
19.0%
25.5% to 26.0%
Operating Expenses $485M
to $520M
$480M to $500M $380M to
$400M
$375M to $385M Operating Income
$205M to $250M
$235M to $255M
$310M to $370M
$340M to $370M
Effective Tax Rate 4% to 6%
(5%) to (3%) 16% to 18%
8% to
10% Earnings per Share1 $3.65 to
$3.90
$3.75 to $3.90 $4.20 to
$4.50
$4.30 to $4.50 Net Cash
Balance2 $1.9B to $2.2B
$1.4B to $1.5B
Operating Cash Flow3 $500M to $650M
($100M) to $0M
Capital Expenditures $275M to
$325M
$225M to $275M
Shipments 2.9GW to 3.0GW
2.8GW to 2.9GW
1. Includes a gain of approximately $110 million, net
of tax, from the expected sale of an equity method investment and
our share of 8point3 earnings and a gain in other income of
approximately $20 million, net of tax, from the sale of restricted
investments in Q1 2016 2. Defined as cash and marketable securities
less expected debt at the end of 2016 3. Excludes cash from the
sale of an equity method investment treated as an investing cash
flow
For a reconciliation of the non-GAAP measures presented above to
measures presented in accordance with generally accepted accounting
principles in the U.S. (“GAAP”), see the tables below.
First Solar has scheduled a conference call for today, November
2, 2016, 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 November 9, 2016 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
4525767. 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 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; 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
efficiency and balance of systems 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; 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; our ability to expand
manufacturing capacity worldwide; 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, Current Reports on Form 8-K and other reports
filed with the SEC.
FIRST SOLAR, INC. AND
SUBSIDIARIESCONDENSED CONSOLIDATED BALANCE SHEETS(In
thousands, except share data)(Unaudited)
September 30, 2016
December 31, 2015
ASSETS Current assets: Cash and cash equivalents $ 1,414,219
$ 1,126,826 Marketable securities 675,985 703,454 Accounts
receivable trade, net 323,049 500,629 Accounts receivable, unbilled
and retainage 245,782 59,171 Inventories 369,086 380,424 Balance of
systems parts 77,942 136,889 Deferred project costs 94,549 187,940
Notes receivable, affiliate — 1,276 Prepaid expenses and other
current assets 264,806 248,977 Total current assets
3,465,418 3,345,586 Property, plant and equipment, net 1,266,337
1,284,136 PV solar power systems, net 487,246 93,741 Project assets
and deferred project costs 1,312,081 1,111,137 Deferred tax assets,
net 347,081 357,693 Restricted cash and investments 409,640 333,878
Investments in unconsolidated affiliates and joint ventures 448,963
399,805 Goodwill 78,888 84,985 Other intangibles, net 72,386
110,002 Inventories 102,162 107,759 Notes receivable, affiliates
20,313 17,887 Other assets 77,145 69,722 Total assets $
8,087,660 $ 7,316,331
LIABILITIES AND STOCKHOLDERS’
EQUITY Current liabilities: Accounts payable $ 201,835 $
337,668 Income taxes payable 10,486 1,330 Accrued expenses 328,969
409,452 Current portion of long-term debt 626,026 38,090 Billings
in excess of costs and estimated earnings 80,830 87,942 Payments
and billings for deferred project costs 103,337 28,580 Other
current liabilities 55,841 57,738 Total current liabilities
1,407,324 960,800 Accrued solar module collection and recycling
liability 169,679 163,407 Long-term debt 161,131 251,325 Other
liabilities 403,767 392,312 Total liabilities 2,141,901
1,767,844 Commitments and contingencies Stockholders’
equity:
Common stock, $0.001 par value per share;
500,000,000 shares authorized; 103,912,069 and101,766,797 shares
issued and outstanding at September 30, 2016 and December 31,
2015,respectively
104 102 Additional paid-in capital 2,767,562 2,742,795 Accumulated
earnings 3,128,229 2,790,110 Accumulated other comprehensive income
49,864 15,480 Total stockholders’ equity 5,945,759
5,548,487 Total liabilities and stockholders’ equity $ 8,087,660
$ 7,316,331
FIRST SOLAR, INC. AND
SUBSIDIARIESCONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS(In thousands, except per share
amounts)(Unaudited)
Three Months EndedSeptember
30,
Nine Months EndedSeptember
30,
2016 2015 2016 2015 Net
sales $ 688,029 $ 1,271,245 $ 2,470,894 $ 2,636,671 Cost of sales
501,749 786,880 1,830,504 1,948,842
Gross profit 186,280 484,365 640,390 687,829 Operating expenses:
Research and development 32,173 29,630 95,291 93,865 Selling,
general and administrative 60,345 53,716 191,624 192,305 Production
start-up 752 3,198 807 16,818 Restructuring and asset impairments
4,314 — 89,846 — Total operating
expenses 97,584 86,544 377,568 302,988
Operating income 88,696 397,821 262,822 384,841 Foreign currency
loss, net (2,296 ) (1,803 ) (8,259 ) (4,981 ) Interest income 5,894
5,322 18,829 16,444 Interest expense, net (5,563 ) (1,775 ) (17,356
) (2,795 ) Other income (expense), net 6,419 (1,678 ) 48,725
(3,729 ) Income before taxes and equity in earnings of
unconsolidated affiliates 93,150 397,887 304,761 389,780 Income tax
benefit (expense) 50,522 (48,454 ) 7,711 (9,134 ) Equity in
earnings of unconsolidated affiliates, net of tax 10,474
(115 ) 25,647 1,640 Net income $ 154,146 $
349,318 $ 338,119 $ 382,286 Net income per
share: Basic $ 1.49 $ 3.46 $ 3.30 $ 3.80
Diluted $ 1.49 $ 3.41 $ 3.28 $ 3.75
Weighted-average number of shares used in per share
calculations: Basic 103,339 100,906 102,496
100,713 Diluted 103,733 102,299 103,062
101,845
Non-GAAP Financial Measures
In the press release above, we provided non-GAAP earnings per
share for the three months ended September 30, 2016. We have
included this non-GAAP financial measure to adjust for (i)
restructuring and asset impairment charges primarily related to
severance benefits to terminated employees and certain other
actions unrelated to the end of our crystalline silicon module
production, (ii) write-downs of certain crystalline silicon module
inventories, (iii) the reversal of a liability associated with an
uncertain tax position related to the income of a foreign
subsidiary and (iv) the tax benefits 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 net 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 (in millions, except per share amounts):
Three Months EndedSeptember 30,
2016
Net income $ 154.1 Restructuring and asset impairments 4.3
Write-downs of crystalline silicon module inventories 4.9 Foreign
tax benefit
(35.4
)
Tax effect* (1.3 ) Non-GAAP net income $ 126.6
Weighted-average number of shares used for diluted earnings per
share 103.7 GAAP earnings per share $ 1.49 Non-GAAP earnings
per share $ 1.22 * Restructuring treated as a
non-discrete item for tax purposes and will be reflected in the
effective tax rate over the duration of 2016.
In the press release above, we provided non-GAAP guidance for
our operating expenses, operating income, effective tax rate and
earnings per share for the year ending December 31, 2016 as of the
date of this press release (“current non-GAAP 2016 guidance”) and
as of the date of the press release announcing our earnings for the
quarter ended June 30, 2016 (“prior non-GAAP 2016 guidance”). We
have included these forward-looking non-GAAP financial measures to
adjust our GAAP projections of such financial measures for (i)
restructuring and asset impairment charges primarily associated
with the end of our crystalline silicon operations, (ii) additional
restructuring activities expected during the remainder of the year
and (iii) the reversal of a liability associated with an uncertain
tax position related to the income of a foreign subsidiary. Other
GAAP charges, including those related to asset impairments,
restructuring programs or litigation, that would be excluded from
non-GAAP earnings per share are possible for the year ending
December 31, 2016, 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 benefits.
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
non-GAAP 2016 guidance and our prior non-GAAP 2016 guidance to the
corresponding GAAP 2016 guidance as of the applicable date (in
millions, except per share amounts):
Reconciliation of Current Non-GAAP 2016
Guidance to Current GAAP 2016 Guidance
GAAP
Guidance
RestructuringCharges1
Foreign
TaxBenefit2
Non-GAAPGuidance
Operating Expenses $480 to $500 ($105 to $115) - $375 to $385
Operating Income $235 to $255 $105 to $115 - $340 to $370 Effective
Tax Rate3 (5%) to (3%) $15 to $20 $35 8% to 10% Earnings per share
$3.75 to $3.90 $0.85 to $0.90 ($0.30) $4.30 to $4.50 1.
$90 to $95 million of restructuring, asset impairment and
related charges primarily associated with the end of our
crystalline silicon module production and $15 to $20 million
associated with other actions 2. Tax benefit in Q3 2016 from the
reversal of a liability associated with an uncertain tax position
related to the income of a foreign subsidiary 3. Effective tax rate
reconciliation provides the estimated tax benefit associated with
restructuring and asset impairment charges and the reversal of an
uncertain tax position liability
Reconciliation of Prior Non-GAAP 2016
Guidance to Prior GAAP 2016 Guidance
GAAP Guidance
RestructuringCharges1
Foreign
TaxBenefit2
Non-GAAPGuidance
Operating Expenses $485 to $520 ($105 to $120) - $380 to $400
Operating Income $205 to $250 $105 to $120 - $310 to $370 Effective
Tax Rate3 4% to 6% $15 to $25 $35 16% to 18% Earnings per share
$3.65 to $3.90 $0.85 to $0.90 ($0.30) $4.20 to $4.50 1.
$90 to $100 million of restructuring, asset impairment and
related charges primarily associated with the end of our
crystalline silicon module production and $15 to $20 million
associated with other actions 2. Expected tax benefit in Q3 2016
from the reversal of a liability associated with an uncertain tax
position related to the income of a foreign subsidiary 3. Effective
tax rate reconciliation provides the estimated tax benefit
associated with restructuring and asset impairment charges and the
reversal of an uncertain tax position liability
View source
version on businesswire.com: http://www.businesswire.com/news/home/20161102006679/en/
First Solar InvestorsSteve Haymore+1
602-414-9315stephen.haymore@firstsolar.comorFirst Solar
MediaSteve Krum+1 602-427-3359steve.krum@firstsolar.com
First Solar (NASDAQ:FSLR)
Historical Stock Chart
From Mar 2024 to Apr 2024
First Solar (NASDAQ:FSLR)
Historical Stock Chart
From Apr 2023 to Apr 2024