- Net sales of $1.1 billion
- GAAP EPS of $1.95
- Cash and marketable securities of
$2.7 billion, net cash of $2.4 billion
- 4.5GWdc quarterly net
bookings, 6.7GWdc YTD net bookings
- Raises EPS guidance for
2017
First Solar, Inc. (Nasdaq: FSLR) today announced financial
results for the third quarter of 2017. Net sales for the third
quarter were $1.1 billion, an increase of $464 million from the
prior quarter primarily due to the sale of the California Flats and
Cuyama projects, and higher third-party module sales.
The Company reported third quarter earnings per share (“EPS”) of
$1.95, compared to EPS of $0.50 in the prior quarter. The third
quarter was impacted by pre-tax restructuring and asset impairment
charges of less than $1 million, compared to $18 million in the
second quarter. Net income increased versus the prior quarter
primarily as a result of higher net sales, improved gross margin
and lower restructuring charges. Third quarter non-GAAP EPS,
adjusted for restructuring and asset impairment charges, was $1.95,
compared to $0.64 in the second quarter.
Cash and marketable securities at the end of the third quarter
increased to $2.7 billion from $2.2 billion in the prior quarter.
The increase primarily resulted from cash received from projects
sold in the third quarter. Cash flows from operations were $581
million in the third quarter.
“Third quarter results were highlighted by record bookings and
strong earnings resulting from the sale of our California Flats
project,” said Mark Widmar, CEO of First Solar. “Our 4.5GWdc of
bookings demonstrates both the robust market demand for our Series
4 and Series 6 module technology, and the acceleration of
procurement timing by certain customers. Closing the sale of our
California Flats project was also an important milestone toward
achieving our financial guidance for the year. While we are pleased
with our recent results, we continue to be intently focused on the
success of our Series 6 transition.”
Based on results for the third quarter, the Company updated 2017
guidance as follows:
2017 Guidance Prior GAAP
Current GAAP Prior Non-GAAP
Current Non-GAAP Net Sales $3.0B to
$3.1B
Unchanged
Gross Margin % 17.0% to 18.0%
~18.0% Operating
Expenses $370M to $395M
$370M to $385M $330M to $340M
Unchanged Operating Income $115M to $180M
$165M to
$190M $170M to $220M
$210M to $230M Earnings per
Share $1.55 to $2.20
$2.05 to $2.30 $2.00 to $2.50
$2.40 to $2.60 Net Cash Balance1 $2.1B to
$2.3B
Unchanged Operating Cash Flow $850M to $950M
Unchanged Capital Expenditures $400M to $500M
Unchanged Shipments 2.6GW to 2.7GW
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, October
26, 2017 at 4:30 p.m. ET to discuss this announcement. A live
webcast of this conference call will be available at
http://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 Nov 2, 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 6807520. 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)
September 30, 2017
December 31, 2016
ASSETS Current assets: Cash and cash equivalents $ 2,019,073
$ 1,347,155 Marketable securities 699,544 607,991 Accounts
receivable trade, net 344,645 266,687 Accounts receivable, unbilled
and retainage 455,118 206,739 Inventories 217,555 363,219 Balance
of systems parts 20,892 62,776 Project assets 67,263 700,800 Note
receivable, affiliate — 15,000 Prepaid expenses and other current
assets 142,404 217,462 Total current assets 3,966,494
3,787,829 Property, plant and equipment, net 940,119 629,142 PV
solar power systems, net 454,483 448,601 Project assets 406,396
762,148 Deferred tax assets, net 276,423 255,152 Restricted cash
and investments 408,873 371,307 Investments in unconsolidated
affiliates and joint ventures 227,661 234,610 Goodwill 14,462
14,462 Other intangibles, net 81,765 87,970 Inventories 110,412
100,512 Notes receivable, affiliates 69,432 54,737 Other assets
98,173 77,898 Total assets $ 7,054,693 $
6,824,368
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities: Accounts payable $ 130,704 $ 148,730 Income
taxes payable 4,396 12,562 Accrued expenses 317,325 262,977 Current
portion of long-term debt 13,451 27,966 Deferred revenue 69,095
308,704 Other current liabilities 44,046 146,942
Total current liabilities 579,017 907,881 Accrued solar module
collection and recycling liability 163,707 166,277 Long-term debt
330,209 160,422 Other liabilities 469,364 371,439
Total liabilities 1,542,297 1,606,019 Commitments and
contingencies Stockholders’ equity:
Common stock, $0.001 par value per share;
500,000,000 shares authorized; 104,431,990and 104,034,731 shares
issued and outstanding at September 30, 2017 andDecember 31, 2016,
respectively
104 104 Additional paid-in capital 2,788,467 2,765,310 Accumulated
earnings 2,729,681 2,462,842 Accumulated other comprehensive loss
(5,856 ) (9,907 ) Total stockholders’ equity 5,512,396
5,218,349 Total liabilities and stockholders’ equity $
7,054,693 $ 6,824,368
FIRST SOLAR, INC. AND
SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS(In thousands, except per share
amounts)(Unaudited)
Three Months EndedSeptember
30,
Nine Months EndedSeptember
30,
2017 2016 2017 2016
Net sales $ 1,087,026 $ 681,276 $ 2,602,143 $ 2,573,768 Cost
of sales 795,226 510,368 2,115,266 1,943,198
Gross profit 291,800 170,908 486,877 630,570 Operating
expenses: Selling, general and administrative 50,546 60,345 147,702
191,624 Research and development 20,850 32,173 64,990 95,291
Production start-up 12,624 752 22,155 807 Restructuring and asset
impairments 791 4,314 39,108 89,846
Total operating expenses 84,811 97,584 273,955
377,568 Operating income 206,989 73,324 212,922 253,002
Foreign currency loss, net (3,968 ) (2,296 ) (6,166 ) (8,259 )
Interest income 8,392 5,894 22,364 18,829 Interest expense, net
(4,149 ) (5,563 ) (19,692 ) (17,356 ) Other income, net 2,018
6,419 25,180 48,725 Income before taxes
and equity in earnings of unconsolidated affiliates 209,282 77,778
234,608 294,941 Income tax (expense) benefit (7,580 ) 68,205 26,769
32,886 Equity in earnings of unconsolidated affiliates, net of tax
4,045 4,474 5,462 6,851 Net income $
205,747 $ 150,457 $ 266,839 $ 334,678
Net income per share: Basic $ 1.97 $ 1.46 $ 2.56
$ 3.27 Diluted $ 1.95 $ 1.45 $ 2.54
$ 3.25 Weighted-average number of shares used in per
share calculations: Basic 104,432 103,339 104,287
102,496 Diluted 105,660 103,684 104,889
103,110
Non-GAAP Financial Measures
In the press release above, we provided non-GAAP earnings per
share for the three months ended September 30, 2017 and June 30,
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 EndedSeptember 30,
2017
Net income $ 205.7 Restructuring and asset
impairments 0.8 Tax effect* (0.1 ) Non-GAAP net income $ 206.4
Weighted-average number of shares used for diluted
earnings per share 105.7 Diluted GAAP earnings per share $
1.95 Diluted Non-GAAP earnings per share $ 1.95
* Restructuring treated as a
non-discrete item for tax purposes and will be reflected in the
effective tax rate over theduration of 2017.
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 theduration 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
RestructuringCharges
Non-GAAP Guidance
Operating Expenses $370 to $385 $(40) to $(45) $330 to $340
Operating Income $165 to $190 $45 to $40 $210 to $230 Earnings per
Share $2.05 to $2.30 $0.35 to $0.30 $2.40 to $2.60
1. $40 to $45 million of
restructuring related charges associated with our transition from
Series 4 to Series 6 modulemanufacturing.
Reconciliation of Prior Non-GAAP 2017
Guidance to Prior GAAP 2017 Guidance
GAAP Guidance
RestructuringCharges1
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 modulemanufacturing.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20171026006538/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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