- Net sales of $892 million
- GAAP EPS of $0.09 and non-GAAP EPS
of $0.25
- Cash and marketable securities of
$2.4 billion, net cash of $2.2 billion
- Raises 2017 revenue, EPS, operating
cash flow and net cash guidance
First Solar, Inc. (Nasdaq: FSLR) today announced financial
results for the first quarter of 2017. Net sales for the first
quarter were $892 million, an increase of $561 million from the
prior quarter primarily due to the sale of the Moapa project,
partially offset by lower third-party module sales.
The Company reported first quarter earnings of $0.09 per share,
compared to a loss of $(7.22) per share in the prior quarter. The
first quarter was impacted by pre-tax restructuring and asset
impairment charges of $20 million, related to previously announced
actions. Restructuring and asset impairment charges in the fourth
quarter were $729 million. Net income increased versus the prior
quarter primarily as a result of higher net sales, lower
restructuring and asset impairment charges and an increase in other
income. First quarter non-GAAP earnings per share, adjusted for
restructuring and asset impairment charges, were $0.25.
Cash and marketable securities at the end of the first quarter
increased to $2.4 billion from $2.0 billion in the prior quarter.
The increase was primarily due to receipt of the remaining payments
for the Moapa project and other project receipts. Cash flows from
operations were $493 million in the first quarter.
“Our first quarter results and the sale of our Moapa project are
a solid start to 2017,” said Mark Widmar, CEO of First Solar. “The
transition to our Series 6 product continues to progress from both
a technology and commercial standpoint. We are excited about the
competitive position of Series 6 and the long-term opportunities it
enables.”
The Company raised its revenue, EPS, operating cash flow and net
cash guidance based on improved operational performance and
increased visibility into certain upcoming project sales. GAAP EPS
was also raised due to a decrease in expected remaining
restructuring and asset impairment charges. Operating expenses
increased as a result of certain costs previously forecasted to be
recorded in cost of sales that are now expected to impact
production start-up.
2017 Guidance Prior GAAP
Current GAAP Prior Non-GAAP
Current Non-GAAP Net Sales $2.8B to
$2.9B
$2.85B to $2.95B
Gross Margin % 11% to 13%
12.5% to 14.5%
Operating Expenses $335M to
$380M
$360M to $405M $280M to
$300M
$320M to $340M Operating Income
$(40M) to $25M
$(25M) to $40M
$40M to $80M
Unchanged
Earnings per Share $(0.80) to $(0.05)
$(0.30) to $0.40 $0.00 to $0.50
$0.25 to $0.75 Net Cash Balance1
$1.4B to $1.6B
$1.5B to $1.7B
Operating Cash Flow
$250M to $350M
$350M to $450M
Capital
Expenditures $525M to $625M
Unchanged
Shipments 2.4GW to 2.6GW
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.
First Solar has scheduled a conference call for today, May 2,
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 May 9, 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
8971725. 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; 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)
March 31, 2017
December 31, 2016
ASSETS Current assets: Cash $ 1,656,245 $ 1,347,155
Marketable securities 789,442 607,991 Accounts receivable trade,
net 151,186 266,687 Accounts receivable, unbilled and retainage
70,536 206,739 Inventories 432,602 363,219 Balance of systems parts
33,269 62,776 Project assets — 700,800 Notes receivable, affiliate
19,600 15,000 Prepaid expenses and other current assets 177,358
217,462 Total current assets 3,330,238 3,787,829
Property, plant and equipment, net 691,767 629,142 PV solar power
systems, net 452,074 448,601 Project assets 960,089 762,148
Deferred tax assets, net 251,453 255,152 Restricted cash and
investments 355,237 371,307 Investments in unconsolidated
affiliates and joint ventures 228,469 234,610 Goodwill 14,462
14,462 Other intangibles, net 85,902 87,970 Inventories 99,714
100,512 Notes receivable, affiliates 49,994 54,737 Other assets
85,104 77,898 Total assets $ 6,604,503 $
6,824,368
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities: Accounts payable $ 143,455 $ 148,730 Income
taxes payable 5,002 12,562 Accrued expenses 185,337 262,977 Current
portion of long-term debt 11,540 27,966 Deferred revenue 24,754
308,704 Other current liabilities 156,963 146,942
Total current liabilities 527,051 907,881 Accrued solar module
collection and recycling liability 169,071 166,277 Long-term debt
265,823 160,422 Other liabilities 414,752 371,439
Total liabilities 1,376,697 1,606,019 Commitments and
contingencies Stockholders’ equity: Common stock, $0.001 par value
per share; 500,000,000 shares authorized; 104,289,617 and
104,034,731 shares issued and outstanding at March 31, 2017 and
December 31, 2016, respectively 104 104 Additional paid-in capital
2,767,941 2,765,310 Accumulated earnings 2,471,971 2,462,842
Accumulated other comprehensive loss (12,210 ) (9,907 ) Total
stockholders’ equity 5,227,806 5,218,349 Total
liabilities and stockholders’ equity $ 6,604,503 $ 6,824,368
FIRST SOLAR, INC. AND
SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS
(In thousands, except per share
amounts)
(Unaudited)
Three Months EndedMarch
31,
2017 2016 Net sales $ 891,791 $ 876,068
Cost of sales 807,607 598,457 Gross profit 84,184
277,611 Operating expenses: Research and development 22,799 30,187
Selling, general and administrative 48,199 67,503 Production
start-up 1,150 — Restructuring and asset impairments 20,031
— Total operating expenses 92,179 97,690
Operating (loss) income (7,995 ) 179,921 Foreign currency gain
(loss), net 246 (3,240 ) Interest income 6,417 6,406 Interest
expense, net (9,169 ) (4,642 ) Other income, net 25,861
35,553 Income before taxes and equity in earnings of
unconsolidated affiliates 15,360 213,998 Income tax expense (5,679
) (28,031 ) Equity in earnings of unconsolidated affiliates, net of
tax (552 ) 9,669 Net income $ 9,129 $ 195,636
Net income per share: Basic $ 0.09 $ 1.92 Diluted $
0.09 $ 1.90 Weighted-average number of shares used in
per share calculations: Basic 104,103 101,853 Diluted
104,410 102,919
Adjustments to Previously Reported Financial Statement from
the Adoption of Accounting Standards Update 2014-09
The following table presents the effect of the adoption of
Accounting Standards Update ("ASU") 2014-09 on our condensed
consolidated statement of operations for the three months ended
December 31, 2016 (in thousands, except per share amounts):
Three Months Ended December 31, 2016 As
Reported
Adoption ofASU 2014-09
As Adjusted Net sales $ 480,434 $ (149,639 ) $
330,795 Cost of sales 416,845 (93,898 ) 322,947 Gross profit 63,589
(55,741 ) 7,848 Operating loss (765,412 ) (55,741 ) (821,153 ) Loss
before taxes and equity in earnings of unconsolidated affiliates
(776,451 ) (55,741 ) (832,192 ) Income tax expense (89,707 ) 33,654
(56,053 ) Equity in earnings of unconsolidated affiliates, net of
tax 146,298 (8,843 ) 137,455 Net loss (719,860 ) (30,930 ) (750,790
) Basic net loss per share $ (6.92 ) $
(0.30
) $ (7.22 ) Diluted net loss per share $ (6.92 ) $
(0.30
) $ (7.22 )
Non-GAAP Financial Measures
In the press release above, we provided non-GAAP earnings per
share for the three months ended March 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 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 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 for each period presented (in
millions, except per share amounts):
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,
restructuring programs or litigation, 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
GAAPGuidance
RestructuringCharges1
Non-GAAPGuidance
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 the acceleration of our transition to Series 6
module manufacturing.
Reconciliation of Prior Non-GAAP 2017
Guidance to Prior GAAP 2017 Guidance
GAAPGuidance
RestructuringCharges1
Non-GAAPGuidance
Operating Expenses $335 to $380 $(55) to $(80) $280 to $300
Operating Income $(40) to $25 $80 to $55 $40 to $80 Earnings per
Share
$(0.80) to $(0.05)
$0.80 to $0.55 $0.00 to $0.50
1. $55 to $80 million of restructuring related charges
associated with the acceleration of our transition to Series 6
module manufacturing.
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version on businesswire.com: http://www.businesswire.com/news/home/20170502006804/en/
First Solar InvestorsSteve Haymore+1
602-414-9315stephen.haymore@firstsolar.comorFirst Solar
MediaSteve Krum+1 602-427-3359steve.krum@firstsolar.com
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