First Solar, Inc. Announces Third Quarter 2017 Financial Results
- 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
- 4.5GW dc quarterly net bookings, 6.7GW dc
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 Balance 1 |
|
|
$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 SUBSIDIARIES
CONDENSED 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; 104,431,990
and 104,034,731 shares issued and outstanding at September 30, 2017 and
December 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 Ended
September 30,
|
|
|
Nine Months Ended
September 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 Ended
September 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 the
duration of 2017.
|
|
|
|
|
Three Months Ended
June 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.
|
|
|
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 |
|
|
Restructuring
Charges
|
|
|
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 module
manufacturing.
|
|
|
Reconciliation of Prior Non-GAAP 2017 Guidance to Prior GAAP 2017 Guidance
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP Guidance |
|
|
Restructuring
Charges 1
|
|
|
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 module
manufacturing.
|
|
First Solar Investors
Steve Haymore
+1 602-414-9315
stephen.haymore@firstsolar.com
or
First Solar Media
Steve Krum
+1 602-427-3359
steve.krum@firstsolar.com
View source version on businesswire.com: http://www.businesswire.com/news/home/20171026006538/en/