First Solar, Inc. Announces First Quarter 2018 Financial Results
- Net sales of $567 million
- GAAP EPS of $0.78
- Cash and marketable securities of $2.9 billion, net cash of $2.4 billion
- YTD net bookings of 3.3GWDC; 2.0GWDC booked since prior earnings call
- Series 6 module production commenced in early April
TEMPE, Ariz., April 26, 2018 (GLOBE NEWSWIRE) -- First Solar, Inc. (Nasdaq: FSLR) today announced financial results for the first quarter 2018. Net sales for the first quarter were $567 million, an increase of $228 million from the prior quarter due to the sale of international projects in India and Japan and the sale of the Rosamond project in the U.S., partially offset by lower third-party module sales.
The Company reported first quarter GAAP earnings per share (“EPS”) of $0.78, compared to a GAAP loss per share of $(4.14) in the fourth quarter of 2017. The previous quarter non-GAAP loss per share, adjusted for restructuring and asset impairment charges and the impact of U.S. tax reform, was $(0.25). Net income increased compared to the prior quarter primarily as a result of lower tax expense, improved net sales, the mix of higher gross profit projects and higher other income.
Cash and marketable securities at the end of the first quarter decreased slightly to $2.9 billion from $3.0 billion at the end of the fourth quarter. The decrease primarily resulted from capital expenditures to support the Series 6 manufacturing ramp, partially offset by a reimbursement of overfunded amounts from our module collection and recycling trust.
“Our first quarter earnings and continued bookings momentum provide a positive start to the year,” said Mark Widmar, CEO of First Solar. “Our earnings for the quarter were supported by the sale of both domestic and international projects, combined with efficient management of core operating expenses. Customer demand for our Series 6 product continues to be strong as evidenced by our year-to-date net bookings of 3.3GWDC. We also achieved significant technology milestones this month with the start of Series 6 production in Ohio and the first commercial module shipments to systems projects. We remain focused on leveraging the advantages of our differentiated technology and applying our disciplined operating approach to achieve our near-term and long-term priorities.”
The Company lowered its 2018 net cash guidance by $100 million primarily as a result of higher capital expenditures for additional Series 6 capacity.
| 2018 GAAP Guidance | Prior | Current |
| Net Sales | $2.45B to $2.65B | Unchanged |
| Gross Margin %1 | 21.5% to 22.5% | Unchanged |
| Operating Expenses2 | $400M to $410M | Unchanged |
| Operating Income | $130M to $180M | Unchanged |
| Earnings per Share | $1.50 to $1.90 | Unchanged |
| Net Cash Balance3 | $2.1B to $2.3B | $2.0B to $2.2B |
| Operating Cash Flow | $100M to $200M | $0 to $100M |
| Capital Expenditures | $700M to $800M | $850M to $950M |
| Shipments | 2.9GW to 3.0GW | Unchanged |
- Includes approximately $60 million of ramp penalty costs
- Includes approximately $120 million of production start-up expense
- Defined as cash and marketable securities less expected debt at the end of 2018
For a reconciliation of the non-GAAP measure presented above to the corresponding measure 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, April 26, 2018 at 4:30 p.m. ET to discuss this announcement. A live webcast of this conference call is available at 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 May 3, 2018 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 1693973. 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. 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: our financial guidance for 2018; the impact of U.S. tax reform; the transition to Series 6 module manufacturing in 2018; and our business and financial objectives for 2018. 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 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 these statements. These factors include, but are not limited to: structural imbalances in global supply and demand for PV solar modules; the market for renewable energy, including solar energy; our competitive position and other key competitive factors; reduction, elimination, or expiration of government subsidies, policies, and support programs for solar energy projects; our ability to execute on our long-term strategic plans; our ability to execute on our solar module technology and cost reduction roadmaps; interest rate fluctuations and both our and our customers’ ability to secure financing; 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 cadmium telluride (“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; 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 attract and retain key executive officers and associates; 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 InvestorsSteve Haymore602-414-9315[email protected]
First Solar MediaSteve Krum602-427-3359[email protected]
FIRST SOLAR, INC. AND SUBSIDIARIESCONSOLIDATED BALANCE SHEETS(In thousands, except share data)(Unaudited)
| March 31, 2018 | December 31, 2017 | |||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 1,858,338 | $ | 2,268,534 | ||||
| Marketable securities | 1,020,136 | 720,379 | ||||||
| Accounts receivable trade, net | 273,277 | 211,797 | ||||||
| Accounts receivable, unbilled and retainage | 151,393 | 174,608 | ||||||
| Inventories | 174,070 | 172,370 | ||||||
| Balance of systems parts | 65,374 | 28,840 | ||||||
| Project assets | 10,094 | 77,931 | ||||||
| Notes receivable, affiliate | 20,411 | 20,411 | ||||||
| Prepaid expenses and other current assets | 197,206 | 157,902 | ||||||
| Total current assets | 3,770,299 | 3,832,772 | ||||||
| Property, plant and equipment, net | 1,311,642 | 1,154,537 | ||||||
| PV solar power systems, net | 355,143 | 417,108 | ||||||
| Project assets | 430,678 | 424,786 | ||||||
| Deferred tax assets, net | 64,427 | 51,417 | ||||||
| Restricted cash and investments | 354,082 | 424,783 | ||||||
| Equity method investments | 200,955 | 217,230 | ||||||
| Goodwill | 14,462 | 14,462 | ||||||
| Intangibles assets, net | 79,607 | 80,227 | ||||||
| Inventories | 116,397 | 113,277 | ||||||
| Note receivable, affiliate | 47,798 | 48,370 | ||||||
| Other assets | 94,699 | 85,532 | ||||||
| Total assets | $ | 6,840,189 | $ | 6,864,501 | ||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | 136,897 | $ | 120,220 | ||||
| Income taxes payable | 10,164 | 19,581 | ||||||
| Accrued expenses | 297,446 | 366,827 | ||||||
| Current portion of long-term debt | 6,062 | 13,075 | ||||||
| Deferred revenue | 67,336 | 81,816 | ||||||
| Other current liabilities | 35,833 | 48,757 | ||||||
| Total current liabilities | 553,738 | 650,276 | ||||||
| Accrued solar module collection and recycling liability | 170,352 | 166,609 | ||||||
| Long-term debt | 431,817 | 380,465 | ||||||
| Other liabilities | 524,911 | 568,454 | ||||||
| Total liabilities | 1,680,818 | 1,765,804 | ||||||
| Commitments and contingencies | ||||||||
| Stockholders’ equity: | ||||||||
| Common stock, $0.001 par value per share; 500,000,000 shares authorized; 104,762,691 and 104,468,460 shares issued and outstanding at March 31, 2018 and December 31, 2017, respectively | 105 | 104 | ||||||
| Additional paid-in capital | 2,797,671 | 2,799,107 | ||||||
| Accumulated earnings | 2,380,178 | 2,297,227 | ||||||
| Accumulated other comprehensive (loss) income | (18,583) | 2,259 | ||||||
| Total stockholders’ equity | 5,159,371 | 5,098,697 | ||||||
| Total liabilities and stockholders’ equity | $ | 6,840,189 | $ | 6,864,501 | ||||
FIRST SOLAR, INC. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF OPERATIONS(In thousands, except per share amounts)(Unaudited)
| Three Months Ended | ||||||||||||
| March 31, 2018 | December 31, 2017 | March 31, 2017 | ||||||||||
| Net sales | $ | 567,265 | $ | 339,181 | $ | 891,791 | ||||||
| Cost of sales | 394,467 | 277,111 | 807,607 | |||||||||
| Gross profit | 172,798 | 62,070 | 84,184 | |||||||||
| Operating expenses: | ||||||||||||
| Selling, general and administrative | 41,126 | 54,997 | 48,199 | |||||||||
| Research and development | 20,324 | 23,583 | 22,799 | |||||||||
| Production start-up | 37,084 | 20,488 | 1,150 | |||||||||
| Restructuring and asset impairments | — | (1,927) | 20,031 | |||||||||
| Total operating expenses | 98,534 | 97,141 | 92,179 | |||||||||
| Operating income (loss) | 74,264 | (35,071) | (7,995) | |||||||||
| Foreign currency (loss) gain, net | (2,517) | (3,474) | 246 | |||||||||
| Interest income | 11,824 | 13,340 | 6,417 | |||||||||
| Interest expense, net | (5,182) | (6,073) | (9,169) | |||||||||
| Other income (expense), net | 17,934 | (1,215) | 25,861 | |||||||||
| Income (loss) before taxes and equity in earnings | 96,323 | (32,493) | 15,360 | |||||||||
| Income tax expense | (11,625) | (398,765) | (5,679) | |||||||||
| Equity in earnings, net of tax | (1,747) | (1,196) | (552) | |||||||||
| Net income (loss) | $ | 82,951 | $ | (432,454) | $ | 9,129 | ||||||
| Net income (loss) per share: | ||||||||||||
| Basic | $ | 0.79 | $ | (4.14) | $ | 0.09 | ||||||
| Diluted | $ | 0.78 | $ | (4.14) | $ | 0.09 | ||||||
| Weighted-average number of shares used in per share calculations: | ||||||||||||
| Basic | 104,550 | 104,448 | 104,103 | |||||||||
| Diluted | 106,305 | 104,448 | 104,410 | |||||||||
Non-GAAP Financial Measures
In this release, we provide non-GAAP earnings per share for the three months ended December 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, (ii) the tax effect associated with these items and (iii) the tax effect associated with U.S. tax reform. We believe non-GAAP earnings per share, when taken together with corresponding GAAP financial measure, is 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 the period presented (in millions, except per share amounts):
| Three Months EndedDecember 31, 2017 | |||
| Net loss | $ | (432.5) | |
| Restructuring and asset impairments | (1.9) | ||
| Tax effect of restructuring and asset impairments* | 0.2 | ||
| Tax effect of U.S. tax reform | $ | 408.1 | |
| Non-GAAP net loss | $ | (26.1) | |
| Weighted-average number of shares used for diluted earnings per share | 104.4 | ||
| GAAP loss per share | $ | (4.14) | |
| Non-GAAP loss per share | $ | (0.25) | |
* Restructuring treated as a non-discrete item for tax purposes and reflected in the effective tax rate over the duration of 2017.