First Solar, Inc. (Nasdaq: FSLR) today announced financial results
for the third quarter ended September 30, 2021.
“I would like to thank our associates for their
dedication and continued execution during the third quarter,” said
Mark Widmar, CEO of First Solar. “Operationally, despite the
challenging freight and COVID-19 environment our manufacturing team
continues to deliver on their commitments. In the third quarter we
produced 2.0 GWDC of modules, and in October we increased our top
production bin to 465 watts. In parallel we started construction of
the building for our third Ohio factory, and began ordering
equipment for our first factory in India. Commercially, we had a
good quarter, increasing our record year-to-date bookings to 10.5
GWDC. From a financial standpoint, while extended transit times for
ocean freight impacted our third quarter results, we are
reiterating our 2021 EPS guidance.”
Net sales for the third quarter were $584
million, a decrease of $46 million from the prior quarter,
primarily due to lower systems segment revenue, which was partially
offset by an increase in module segment revenue.
Operating income for the third quarter was
$51 million. Third quarter operating income included
depreciation and amortization of $66 million, underutilization
and production start-up of $9 million, and share-based
compensation of $6 million.
Net income per diluted share for the third
quarter was $0.42, compared to $0.77 in the prior quarter.
Cash, cash equivalents, restricted cash, and
marketable securities at the end of the third quarter totaled
$1.9 billion, a decrease of $111 million from the prior
quarter. This decrease was primarily due to capital expenditures
and reinvestment of restricted cash, which was partially offset by
operating cash flows and collection of accounts receivables related
to legacy systems activities.
2021 guidance has been updated as
follows:
|
Prior |
Current |
Net Sales |
$2.875B to $3.1B |
Unchanged |
Gross Margin ($) (1) |
$695M to $760M |
Unchanged |
Operating Expenses (2) |
$285M to $300M |
Unchanged |
Operating Income (3)(4) |
$545M to $625M |
Unchanged |
Earnings per Share |
$4.00 to $4.60 |
Unchanged |
Net Cash Balance (5) |
$1.35B to $1.45B |
$1.45B to $1.55B |
Capital Expenditures |
$825M to $875M |
$675M to $725M |
Shipments |
7.6GW to 8.0GW |
Unchanged |
—————————— |
|
(1) |
|
Includes of $1
million of related ramp expense (unchanged) and $40 million of
impact due to underutilization and reduced throughput
(unchanged) |
|
(2) |
|
Includes $20 million to $25 million of production start-up
expense (unchanged) |
|
(3) |
|
Includes $61 million to $66 million of related ramp expense,
production start-up expense, underutilization and reduced
throughput impact (unchanged) |
|
(4) |
|
Includes a $147 million pre-tax gain related to the sales of
the North American O&M and U.S. project development businesses
($149 million previously) |
|
(5) |
|
Defined as cash, cash equivalents, marketable securities, and
restricted cash less expected debt at the end of 2021 |
Conference Call Details
First Solar has scheduled a conference call for
today, November 4, 2021 at 4:30 p.m. ET, to discuss this
announcement. A live webcast of this conference call and
accompanying materials are available at
investor.firstsolar.com.
Investors are encouraged to listen to the
conference call and to review the accompanying materials, which
contain more information about First Solar’s third quarter
financial results and financial outlook.
An audio replay of the conference call will be
available through Thursday, November 11, 2021 and can be accessed
by dialing +1 (800) 585-8367 if you are calling from within the
United States or +1 (416) 621-4642 if you are calling from outside
the United States and entering the replay passcode 4672976. A
replay of the webcast will also be available on the Investors
section of the Company’s website approximately five hours after the
conclusion of the call and remain available for 90 days.
About First Solar, Inc.
First Solar is a leading American solar
technology company and global provider of responsibly-produced
eco-efficient solar modules advancing the fight against climate
change. Developed at R&D labs in California and Ohio, the
company’s advanced thin film photovoltaic (PV) modules represent
the next generation of solar technologies, providing a competitive,
high-performance, lower-carbon alternative to conventional
crystalline silicon PV panels. From raw material sourcing and
manufacturing through end-of-life module recycling, First Solar’s
approach to technology embodies sustainability and a responsibility
towards people and the planet. For more information, 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. All statements in this
release, other than statements of historical fact, are
forward-looking statements. These forward-looking statements
include, but are not limited to, statements concerning: demand for
our technology; our financial guidance for 2021, net sales, gross
margin, operating expenses, operating income, net income per share,
earnings per share, net cash balance, capital expenditures,
shipments, bookings, products and our business and financial
objectives for 2021. 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,” “contingent” 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
and therefore speak only as of the date of this release. 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, whether as a result of new information,
future developments or otherwise. 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 our forward-looking statements. These factors include,
but are not limited to: structural imbalances in global supply and
demand for PV solar modules; our competitive position and other key
competitive factors; the market for renewable energy, including
solar energy; the reduction, elimination, expiration or
introduction of government subsidies, policies, and support
programs for solar energy projects; the impact of public policies,
such as tariffs or other trade remedies imposed on solar cells and
modules; interest rate fluctuations and both our and our customers’
ability to secure financing; our ability to execute on our
long-term strategic plans; the loss of any of our large customers,
or the ability of our customers and counterparties to perform under
their contracts with us; our ability to execute on our solar module
technology and cost reduction roadmaps; our ability to improve the
wattage of our solar modules; the creditworthiness of our offtake
counterparties and the ability of our offtake counterparties to
fulfill their contractual obligations to us; the satisfaction of
conditions precedent in our sales agreements; our ability to
attract new customers and to develop and maintain existing customer
and supplier relationships; our ability to successfully develop and
complete our systems business projects; our ability to convert
existing production facilities to support new product lines, such
as Series 6 module manufacturing; general economic and business
conditions, including those influenced by U.S., international, and
geopolitical events; environmental responsibility, including with
respect to CdTe and other semiconductor materials; claims under our
limited warranty obligations; changes in, or the failure to comply
with, government regulations and environmental, health, and safety
requirements; effects resulting from pending litigation; future
collection and recycling costs for solar modules covered by our
module collection and recycling program; supply chain disruption,
including the availability of shipping containers, port congestion,
canceled shipments by logistic providers, and the cost of fuel, all
of which may be exacerbated by the COVID-19 pandemic; our ability
to protect our intellectual property; our ability to prevent and/or
minimize the impact of cyber-attacks or other breaches of our
information systems; our continued investment in research and
development; the supply and price of components and raw materials,
including CdTe; our ability to convert existing or construct
production facilities to support new product lines; our ability to
attract and retain key executive officers and associates; the
severity and duration of the COVID-19 pandemic, including its
potential impact on our business, financial condition, and results
of operations; and the matters discussed under the captions “Risk
Factors” and “Management’s Discussion and Analysis of Financial
Conditions and Results of Operations” of our most recent Annual
Report on Form 10-K and our subsequently filed Quarterly Reports on
Form 10-Q, as supplemented by our other filings with the Securities
and Exchange Commission.
Contacts
First Solar
Investorsinvestor@firstsolar.com
First Solar
Mediamedia@firstsolar.com
FIRST SOLAR,
INC.CONDENSED CONSOLIDATED BALANCE
SHEETS(In thousands, except share
data)(Unaudited)
|
September 30,2021 |
|
December 31,2020 |
ASSETS |
|
|
|
Current assets: |
|
|
|
Cash and cash equivalents |
$ |
1,367,464 |
|
|
$ |
1,227,002 |
|
Marketable securities (amortized cost of $554,897 and $519,844 and
allowance for credit losses of $133 and $121 at September 30, 2021
and December 31, 2020, respectively) |
554,601 |
|
|
520,066 |
|
Accounts receivable trade |
249,771 |
|
|
269,095 |
|
Less: allowance for credit losses |
(1,430 |
) |
|
(3,009 |
) |
Accounts receivable trade, net |
248,341 |
|
|
266,086 |
|
Accounts receivable, unbilled |
25,053 |
|
|
26,673 |
|
Less: allowance for credit losses |
(51 |
) |
|
(303 |
) |
Accounts receivable, unbilled, net |
25,002 |
|
|
26,370 |
|
Inventories |
647,439 |
|
|
567,587 |
|
Assets held for sale |
— |
|
|
155,685 |
|
Prepaid expenses and other current assets |
203,478 |
|
|
251,739 |
|
Total current assets |
3,046,325 |
|
|
3,014,535 |
|
Property, plant and equipment,
net |
2,505,921 |
|
|
2,402,285 |
|
PV solar power systems,
net |
230,423 |
|
|
243,396 |
|
Project assets |
335,259 |
|
|
373,377 |
|
Deferred tax assets, net |
108,387 |
|
|
104,099 |
|
Restricted marketable
securities (amortized cost of $254,659 and $247,628 and allowance
for credit losses of $53 and $13 at September 30, 2021 and
December 31, 2020, respectively) |
251,379 |
|
|
265,280 |
|
Goodwill |
14,462 |
|
|
14,462 |
|
Intangible assets, net |
47,935 |
|
|
56,138 |
|
Inventories |
236,446 |
|
|
201,229 |
|
Other assets |
492,093 |
|
|
434,130 |
|
Total assets |
$ |
7,268,630 |
|
|
$ |
7,108,931 |
|
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
Current liabilities: |
|
|
|
Accounts payable |
$ |
170,041 |
|
|
$ |
183,349 |
|
Income taxes payable |
12,984 |
|
|
14,571 |
|
Accrued expenses |
231,163 |
|
|
310,467 |
|
Current portion of long-term debt |
37,129 |
|
|
41,540 |
|
Deferred revenue |
238,810 |
|
|
188,813 |
|
Liabilities held for sale |
— |
|
|
25,621 |
|
Other current liabilities |
25,109 |
|
|
83,037 |
|
Total current liabilities |
715,236 |
|
|
847,398 |
|
Accrued solar module
collection and recycling liability |
140,019 |
|
|
130,688 |
|
Long-term debt |
241,483 |
|
|
237,691 |
|
Other liabilities |
341,817 |
|
|
372,226 |
|
Total liabilities |
1,438,555 |
|
|
1,588,003 |
|
Commitments and
contingencies |
|
|
|
Stockholders’ equity: |
|
|
|
Common stock, $0.001 par value per share; 500,000,000 shares
authorized; 106,326,000 and 105,980,466 shares issued and
outstanding at September 30, 2021 and December 31, 2020,
respectively |
106 |
|
|
106 |
|
Additional paid-in capital |
2,865,628 |
|
|
2,866,786 |
|
Accumulated earnings |
3,053,085 |
|
|
2,715,762 |
|
Accumulated other comprehensive loss |
(88,744 |
) |
|
(61,726 |
) |
Total stockholders’ equity |
5,830,075 |
|
|
5,520,928 |
|
Total liabilities and stockholders’ equity |
$ |
7,268,630 |
|
|
$ |
7,108,931 |
|
FIRST SOLAR,
INC.CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS(In thousands, except per share
amounts)(Unaudited)
|
Three Months Ended |
|
Nine Months Ended |
|
September 30,2021 |
|
June 30,2021 |
|
September 30,2020 |
|
September 30,2021 |
|
September 30,2020 |
Net sales |
$ |
583,504 |
|
|
$ |
629,180 |
|
|
$ |
927,565 |
|
|
$ |
2,016,058 |
|
|
$ |
2,102,100 |
|
Cost of sales |
458,924 |
|
|
455,062 |
|
|
634,550 |
|
|
1,532,593 |
|
|
1,581,287 |
|
Gross profit |
124,580 |
|
|
174,118 |
|
|
293,015 |
|
|
483,465 |
|
|
520,813 |
|
Operating expenses: |
|
|
|
|
|
|
|
|
|
Selling, general and administrative |
43,476 |
|
|
36,346 |
|
|
49,861 |
|
|
131,909 |
|
|
160,218 |
|
Research and development |
25,426 |
|
|
23,935 |
|
|
22,972 |
|
|
69,234 |
|
|
71,068 |
|
Production start-up |
2,945 |
|
|
1,715 |
|
|
13,019 |
|
|
16,014 |
|
|
23,812 |
|
Litigation loss |
— |
|
|
— |
|
|
— |
|
|
— |
|
|
6,000 |
|
Total operating expenses |
71,847 |
|
|
61,996 |
|
|
85,852 |
|
|
217,157 |
|
|
261,098 |
|
Gain on sales of businesses,
net |
(1,866 |
) |
|
(1,745 |
) |
|
— |
|
|
147,284 |
|
|
— |
|
Operating income |
50,867 |
|
|
110,377 |
|
|
207,163 |
|
|
413,592 |
|
|
259,715 |
|
Foreign currency loss,
net |
(1,018 |
) |
|
(1,000 |
) |
|
(1,852 |
) |
|
(4,613 |
) |
|
(3,549 |
) |
Interest income |
1,752 |
|
|
1,288 |
|
|
2,109 |
|
|
3,996 |
|
|
15,113 |
|
Interest expense, net |
(2,958 |
) |
|
(4,623 |
) |
|
(10,975 |
) |
|
(10,577 |
) |
|
(21,018 |
) |
Other (expense) income,
net |
(2,603 |
) |
|
(3,247 |
) |
|
(3,236 |
) |
|
2,598 |
|
|
(8,653 |
) |
Income before taxes and equity
in earnings |
46,040 |
|
|
102,795 |
|
|
193,209 |
|
|
404,996 |
|
|
241,608 |
|
Income tax (expense)
benefit |
(837 |
) |
|
(20,346 |
) |
|
(38,107 |
) |
|
(67,673 |
) |
|
40,894 |
|
Equity in earnings, net of
tax |
— |
|
|
$ |
— |
|
|
(65 |
) |
|
— |
|
|
150 |
|
Net income |
$ |
45,203 |
|
|
$ |
82,449 |
|
|
$ |
155,037 |
|
|
$ |
337,323 |
|
|
$ |
282,652 |
|
|
|
|
|
|
|
|
|
|
|
Net income per share: |
|
|
|
|
|
|
|
|
|
Basic |
$ |
0.43 |
|
|
$ |
0.78 |
|
|
$ |
1.46 |
|
|
$ |
3.18 |
|
|
$ |
2.67 |
|
Diluted |
$ |
0.42 |
|
|
$ |
0.77 |
|
|
$ |
1.45 |
|
|
$ |
3.16 |
|
|
$ |
2.65 |
|
Weighted-average number of
shares used in per share calculations: |
|
|
|
|
|
|
|
|
|
Basic |
106,320 |
|
|
106,313 |
|
|
105,967 |
|
|
106,241 |
|
|
105,830 |
|
Diluted |
106,899 |
|
|
106,836 |
|
|
106,751 |
|
|
106,879 |
|
|
106,537 |
|
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