- 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
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
SUBSIDIARIESCONDENSED 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; 104,395,532and 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
SUBSIDIARIESCONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS(In thousands, except per share
amounts)(Unaudited)
Three Months EndedJune
30,
Six Months EndedJune 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 EndedJune 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 EndedMarch 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
RestructuringCharges1
Non-GAAPGuidance
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
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 our
transition from Series 4 to Series 6 module manufacturing.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20170727006497/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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