- Net sales of $3.0 billion for 2016
and $480 million for the fourth quarter
- GAAP loss per share of $(3.48) for
2016 and $(6.92) for the fourth quarter
- Non-GAAP EPS of $5.17 for 2016 and
$1.24 for the fourth quarter
- Cash and marketable securities of
$2.0 billion, net cash of $1.8 billion
- Maintain Non-GAAP 2017 EPS
guidance
First Solar, Inc. (Nasdaq: FSLR) today announced financial
results for the fourth quarter and year ended December 31, 2016.
Net sales for the fourth quarter were $480 million, a decrease of
$208 million from the prior quarter due to the completion of
multiple systems projects during the quarter, partially offset by
higher module-only sales.
The Company reported a fourth quarter loss per share of $(6.92),
compared to earnings per share of $1.63 in the prior quarter. The
fourth quarter was impacted by pre-tax charges of $729 million,
primarily related to previously announced restructuring actions.
Restructuring related charges in the third quarter were $4 million.
Fourth quarter non-GAAP earnings per share, adjusted for
restructuring charges and a tax expense associated with a
distribution of cash to the United States, were $1.24. Net income
decreased versus the prior quarter as a result of lower net sales,
higher restructuring charges and an increase in tax expense,
partially offset by an increase in equity in earnings. During the
fourth quarter, the Company completed the sale of its remaining
interest in the Desert Stateline project and recognized $125
million of profit, net of tax, in equity in earnings.
Cash and marketable securities at the end of the fourth quarter
decreased slightly to $2.0 billion from $2.1 billion in the prior
quarter. The decrease was due to the repayment in full of the
Company’s borrowing under its revolving credit facility, largely
offset by cash from project sales. Cash flows from operations were
$268 million in the fourth quarter. The approximately $280 million
of proceeds received in the quarter from the sale of the remaining
interest in the Desert Stateline project were treated as an
investing cash flow.
“Despite the difficult restructuring decisions that we undertook
in the fourth quarter, we ended the year with strong operational
results,” said Mark Widmar, CEO of First Solar. “Our best line
exited the quarter running above 16.9% conversion efficiency, and
for the full year our fleet averaged 16.4% efficiency, an 80 basis
point improvement over the prior year. From a financial perspective
we delivered full year non-GAAP earnings per share of $5.17,
exceeding our guidance for the year. We ended the year with $1.8
billion of net cash and are well positioned as we move forward with
our Series 6 transition.”
The Company updated its 2017 revenue guidance, operating
expenses and earnings per share as reflected in the following
table. The revised net sales guidance incorporates the final
structuring of the Moapa project sale, which allowed for full
revenue recognition on the project, while the revised operating
expenses guidance reflects the timing of certain restructuring
charges that are now anticipated in 2017.
2017 Guidance Prior GAAP
Current GAAP Prior Non-GAAP
Current Non-GAAP Net Sales $2.5B to
$2.6B
$2.8B to $2.9B
Gross Margin % 12.5% to
14.5%
11% to 13%
Operating Expenses $290M to
$305M
$335M to $380M $280M to
$300M
Unchanged Operating Income
$30M to $75M
($40M) to $25M
$40M to $80M
Unchanged Earnings per
Share ($0.10) to $0.45
($0.80)
to ($0.05) $0.00 to $0.50
Unchanged Net Cash Balance $1.4B to
$1.6B
Unchanged
Operating Cash Flow1
$550M to $650M
$250M to $350M
Capital Expenditures
$525M to $625M
Unchanged
Shipments 2.4GW to
2.6GW
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, February
21, 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 February 28, 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
6887174. 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; 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; our ability to expand
manufacturing capacity worldwide; 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
SUBSIDIARIESCONSOLIDATED BALANCE SHEETS(In thousands,
except share data)(Unaudited)
December 31, 2016
December 31, 2015
ASSETS Current assets: Cash and cash equivalents $ 1,347,155 $
1,126,826 Marketable securities 607,991 703,454 Accounts receivable
trade, net 266,687 500,629 Accounts receivable, unbilled and
retainage 205,530 59,171 Inventories 363,219 380,424 Balance of
systems parts 62,776 136,889 Deferred project costs 701,105 187,940
Notes receivable, affiliates 15,000 1,276 Prepaid expenses and
other current assets 217,157 248,977 Total current assets
3,786,620 3,345,586 Property, plant and equipment, net 629,142
1,284,136 PV solar power systems, net 448,601 93,741 Project assets
and deferred project costs 800,770 1,111,137 Deferred tax assets,
net 252,655 357,693 Restricted cash and investments 371,307 333,878
Investments in unconsolidated affiliates and joint ventures 242,361
399,805 Goodwill 14,462 84,985 Other intangibles, net 87,970
110,002 Inventories 100,512 107,759 Notes receivable, affiliates
54,737 17,887 Other assets 78,076 69,722 Total assets $
6,867,213 $ 7,316,331 LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities: Accounts payable $ 148,730 $ 337,668 Income
taxes payable 5,288 1,330 Accrued expenses 262,977 409,452 Current
portion of long-term debt 27,966 38,090 Billings in excess of costs
and estimated earnings 115,623 87,942 Payments and billings for
deferred project costs 284,440 28,580 Other current liabilities
54,683 57,738 Total current liabilities 899,707 960,800
Accrued solar module collection and recycling liability 166,277
163,407 Long-term debt 160,422 251,325 Other liabilities 428,120
392,312 Total liabilities 1,654,526 1,767,844
Commitments and contingencies Stockholders’ equity:
Common stock, $0.001 par value per share;
500,000,000 shares authorized; 104,034,731 and101,766,797 shares
issued and outstanding at December 31, 2016 and 2015,
respectively
104 102 Additional paid-in capital 2,759,211 2,742,795 Accumulated
earnings 2,463,279 2,790,110 Accumulated other comprehensive (loss)
income (9,907
)
15,480 Total stockholders’ equity 5,212,687 5,548,487 Total
liabilities and stockholders’ equity $ 6,867,213 $ 7,316,331
FIRST SOLAR, INC. AND
SUBSIDIARIESCONSOLIDATED STATEMENTS OF OPERATIONS(In
thousands, except per share amounts)(Unaudited)
Three Months EndedDecember
31,
Years EndedDecember 31, 2016
2015 2016 2015 Net sales $ 480,434 $
942,324 $ 2,951,328 $ 3,578,995 Cost of sales 416,845
710,886 2,247,349 2,659,728 Gross profit
63,589 231,438 703,979 919,267 Operating expenses: Research and
development 29,471 36,728 124,762 130,593 Selling, general and
administrative 70,370 62,887 261,994 255,192 Production start-up
214 — 1,021 16,818 Restructuring and asset impairments 728,946
— 818,792 — Total operating expenses
829,001 99,615 1,206,569 402,603
Operating (loss) income (765,412 ) 131,823 (502,590 ) 516,664
Foreign currency loss, net (5,748 ) (1,887 ) (14,007 ) (6,868 )
Interest income 6,364 6,072 25,193 22,516 Interest expense, net
(3,182 ) (4,180 ) (20,538 ) (6,975 ) Other (expense) income, net
(8,473 ) (1,773 ) 40,252 (5,502 ) (Loss) income before taxes
and equity in earnings of unconsolidated affiliates (776,451 )
130,055 (471,690 ) 519,835 Income tax (expense) benefit (89,707 )
15,290 (58,219 ) 6,156 Equity in earnings of unconsolidated
affiliates, net of tax 146,298 18,790 171,945
20,430 Net (loss) income $ (719,860 ) $ 164,135 $
(357,964 ) $ 546,421 Net (loss) income per share: Basic $
(6.92 ) $ 1.62 $ (3.48 ) $ 5.42 Diluted $ (6.92 ) $
1.60 $ (3.48 ) $ 5.37 Weighted-average number of
shares used in per share calculations: Basic 103,970 101,400
102,866 100,886 Diluted 103,970 102,293
102,866 101,815
Non-GAAP Financial Measures
In the press release above, we provided non-GAAP earnings per
share for the three months and year ended December 31, 2016. 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 the end of our crystalline silicon operations, (ii) write-downs
of certain crystalline silicon module inventories, (iii) contingent
consideration adjustments related to the likelihood of achieving
certain crystalline silicon module shipment milestones in
connection with our TetraSun acquisition, (iv) the reversal of a
liability associated with an uncertain tax position related to the
income of a foreign subsidiary, (v) the tax expense associated with
a distribution of cash to the United States from a foreign
subsidiary and (vi) 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 net 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 December 31, 2016
Net loss $ (719.9 ) Restructuring and asset impairments 728.9
Write-downs of crystalline silicon module inventories 2.6 Tax
expense on cash distribution 195.6 Tax effect (78.1 )
Non-GAAP net income $ 129.1 Weighted-average number
of shares used for diluted earnings per share 104.0 GAAP loss per
share $ (6.92 ) Weighted-average number of shares used for
diluted earnings per share 104.3 Non-GAAP earnings per share $ 1.24
Year Ended December 31, 2016 Net loss $
(358.0 ) Restructuring and asset impairments 818.8 Write-downs of
crystalline silicon module inventories 16.0 TetraSun contingent
consideration adjustments (7.4 ) Foreign tax benefit (35.4 ) Tax
expense on cash distribution 195.6 Tax effect (94.7 )
Non-GAAP net income $ 534.9 Weighted-average number
of shares used for diluted earnings per share 102.9 GAAP loss per
share $ (3.48 ) Weighted-average number of shares used for
diluted earnings per share 103.4 Non-GAAP earnings per share $ 5.17
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 (“non-GAAP 2017 guidance”). 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, restructuring programs or litigation,
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
non-GAAP 2017 guidance to our current and prior GAAP guidance (in
millions, except per share amounts):
Reconciliation of Non-GAAP 2017
Guidance to GAAP 2017 Guidance
GAAPGuidance
RestructuringCharges1
Non-GAAPGuidance
Operating Expenses $335 to $380 $(55) to $(80) $280 to $300
Operating Income $(40) to $25 $80 to $55 $40 to $80 Earnings per
Share $(0.80) to $(0.05) $0.80 to $0.55 $0.00 to $0.50 1.
$55 to $80 million of restructuring related charges associated with
the acceleration of our transition to Series 6 module manufacturing
Reconciliation of Prior Non-GAAP 2017
Guidance to Prior GAAP 2017 Guidance
GAAPGuidance
RestructuringCharges1
Non-GAAPGuidance
Operating Expenses $290 to $305 $(10) to $(5) $280 to $300
Operating Income $30 to $75 $10 to $5 $40 to $80 Earnings per Share
$(0.10) to $0.45 $0.10 to $0.05 $0.00 to $0.50 1. $5 to $10
million of other charges related to restructuring of manufacturing
operations
View source
version on businesswire.com: http://www.businesswire.com/news/home/20170221006657/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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