- Net sales of $934 million
- GAAP earnings per share of
$0.13
- Non-GAAP earnings per share of
$0.87
- Cash and marketable securities of
$1.7 billion, net cash of $1.4 billion
- 1.4GWdc bookings year-to-date;
0.8GWdc of new bookings
First Solar, Inc. (Nasdaq: FSLR) today announced financial
results for the second quarter of 2016. Net sales were $934 million
in the quarter, an increase of $86 million from the prior quarter.
The increase was due to higher module only sales, the sale of the
Kingbird project and revenue recognition across multiple systems
projects, partially offset by lower revenue from the Silver State
South and Stateline projects which reached or neared completion in
the quarter.
The Company reported second quarter earnings per share of $0.13,
compared to $1.66 in the prior quarter. The second quarter was
impacted by pre-tax restructuring charges of $86 million related
primarily to the previously announced decision to end production of
the TetraSun crystalline silicon product. Non-GAAP earnings per
share, adjusted for TetraSun related charges, were $0.87. Net
income was also lower versus the prior quarter due to the mix of
systems projects sold and under construction and a gain on the sale
of certain restricted investments in the first quarter. In
addition, results for the second quarter excluded approximately $20
million of profit on the Kingbird sale, which was not recognized in
earnings during the period.
Cash and marketable securities at the end of the second quarter
decreased to $1.7 billion. Cash flows used in operations were $75
million in the second quarter.
“Our operational execution in 2016 continues to be strong and
resulted in another quarter of solid financial results,” said Mark
Widmar, CEO of First Solar. “Our lead line module efficiency exited
the quarter at over 16.6%, and we further lowered our module cost
per watt. We sold our Kingbird project in Q2, and our steady
execution across our portfolio of systems projects resulted in
significant cost reductions. With our recent decision to reallocate
capacity to focus on our Series 5 assembly capabilities we continue
to position the Company for future success.”
The Company updated its 2016 earnings per share guidance and
updated other forecasted items as follows:
2016 Guidance Prior GAAP
Current GAAP Current Non-GAAP Net
Sales $3.8B to $4.0B
Unchanged Gross Margin %
18% to 19%
18.5% to 19%
Operating Expenses $380M to $400M
$485M to $520M $380M to
$400M Operating Income $300M to $370M
$205M to $250M $310M to
$370M Effective Tax Rate 16% to 18%
4% to 6% 16% to 18% Earnings
per Share1 $4.10 to $4.50
$3.65 to $3.90 $4.20 to $4.50 Net
Cash Balance2 $1.9B to $2.2B
Unchanged Operating Cash
Flow3 $500M to $700M
$500M to $650M
Capital Expenditures
$300M to $400M
$275M to $325M
Shipments 2.9GW to 3.0GW
Unchanged
- Includes a gain of approximately $145
million, net of tax, from the expected sale of an equity method
investment and our share of 8point3 earnings and a gain in other
income of approximately $20 million, net of tax, from the sale of
restricted investments in Q1 2016
- Defined as cash and marketable
securities less expected debt at the end of 2016
- Excludes approximately $320 million
from the expected sale of an equity method investment treated as an
investing cash flow
For a reconciliation of non-GAAP measures to measures presented
in accordance with generally accepted accounting principles in the
U.S. (“GAAP”), see the table below.
First Solar has scheduled a conference call for today, Aug 3,
2016 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 Aug 10, 2016 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
1037324. 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 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 tax
matters; 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 efficiency and balance
of systems 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, Current
Reports on Form 8-K and other reports filed with the SEC.
FIRST SOLAR, INC. AND
SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE
SHEETS
(In thousands, except share
data)
(Unaudited)
June 30, 2016
December 31, 2015 ASSETS Current assets: Cash
and cash equivalents $ 916,660 $ 1,126,826 Marketable securities
750,779 703,454 Accounts receivable trade, net 369,135 500,629
Accounts receivable, unbilled and retainage 172,892 59,171
Inventories 384,504 380,424 Balance of systems parts 92,796 136,889
Deferred project costs 112,512 187,940 Notes receivable, affiliate
372 1,276 Prepaid expenses and other current assets 276,971
248,977
Total current assets
3,076,621 3,345,586 Property, plant and equipment, net 1,268,267
1,284,136 PV solar power systems, net 410,759 93,741 Project assets
and deferred project costs 1,247,114 1,111,137 Deferred tax assets,
net 351,714 357,693 Restricted cash and investments 414,019 333,878
Investments in unconsolidated affiliates and joint ventures 427,243
399,805 Goodwill 78,888 84,985 Other intangibles, net 68,218
110,002 Inventories 103,885 107,759 Notes receivable, affiliates
22,254 17,887 Other assets 75,038 69,722 Total assets $
7,544,020 $ 7,316,331
LIABILITIES AND STOCKHOLDERS’
EQUITY Current liabilities: Accounts payable $ 263,062 $
337,668 Income taxes payable 1,518 1,330 Accrued expenses 354,525
409,452 Current portion of long-term debt 71,591 38,090 Billings in
excess of costs and estimated earnings 110,514 87,942 Payments and
billings for deferred project costs 94,316 28,580 Other current
liabilities 56,503 57,738 Total current liabilities 952,029
960,800 Accrued solar module collection and recycling liability
167,740 163,407 Long-term debt 161,839 251,325 Other liabilities
457,767 392,312 Total liabilities 1,739,375 1,767,844
Commitments and contingencies Stockholders’ equity: Common stock,
$0.001 par value per share; 500,000,000 shares authorized;
102,349,660 and 101,766,797 shares issued and outstanding at June
30, 2016 and December 31, 2015, respectively 102 102 Additional
paid-in capital 2,773,821 2,742,795 Accumulated earnings 2,974,083
2,790,110 Accumulated other comprehensive income 56,639
15,480 Total stockholders’ equity 5,804,645 5,548,487 Total
liabilities and stockholders’ equity $ 7,544,020 $ 7,316,331
FIRST SOLAR, INC. AND
SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS
(In thousands, except per share
amounts)
(Unaudited)
Three Months Ended June 30,
Six Months Ended June 30, 2016
2015 2016 2015 Net sales $ 934,381 $
896,217 $ 1,782,865 $ 1,365,426 Cost of sales 743,216
731,734 1,328,755 1,161,962 Gross profit
191,165 164,483 454,110 203,464 Operating expenses: Research and
development 32,931 29,479 63,118 64,235 Selling, general and
administrative 63,776 70,901 131,279 138,589 Production start-up 55
6,970 55 13,620 Restructuring and asset impairments 85,532 —
85,532 — Total operating expenses 182,294
107,350 279,984 216,444 Operating
income (loss) 8,871 57,133 174,126 (12,980 ) Foreign currency loss,
net (2,723 ) (2,957 ) (5,963 ) (3,178 ) Interest income 6,529 6,058
12,935 11,122 Interest expense, net (7,151 ) (826 ) (11,793 )
(1,020 ) Other income (expense), net 6,753 (792 ) 42,306
(2,051 ) Income (loss) before taxes and equity in earnings
of unconsolidated affiliates 12,279 58,616 211,611 (8,107 ) Income
tax (expense) benefit (9,047 ) 33,340 (42,811 ) 39,320 Equity in
earnings of unconsolidated affiliates, net of tax 10,176
1,929 15,173 1,755 Net income $ 13,408
$ 93,885 $ 183,973 $ 32,968 Net income per
share: Basic $ 0.13 $ 0.93 $ 1.80 $ 0.33
Diluted $ 0.13 $ 0.92 $ 1.78 $ 0.33
Weighted-average number of shares used in per share
calculations: Basic 102,287 100,852 102,070
100,615 Diluted 103,875 101,607 103,281
101,631
Non-GAAP Financial Measures
In the press release above, we provided non-GAAP earnings per
share for the three months ended June 30, 2016. We have included
this non-GAAP financial measure to adjust for (i) restructuring and
asset impairment charges associated primarily with the end of our
crystalline silicon module production, (ii) write-downs of our
crystalline silicon module inventories, (iii) contingent
consideration adjustments related to the likelihood of achieving
certain crystalline silicon module shipment milestones and (iv) the
tax benefit 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 such
non-GAAP financial measures 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 measure that excludes certain
restructuring and asset impairment charges 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 (in millions, except per share
amounts):
Three MonthsEndedJune 30,
2016
Net income $ 13.4 Restructuring and asset impairments 85.5
Write-downs of crystalline silicon module inventories 8.5 TetraSun
contingent consideration adjustments (7.4) Tax benefit* (9.8)
Non-GAAP net income $ 90.2 Weighted-average number of shares
used for diluted earnings per share 103.9 GAAP earnings per
share $ 0.13 Non-GAAP earnings per share $ 0.87
*Restructuring treated as a non-discrete item for tax purposes
and will be reflected in the effective tax rate over the duration
of 2016. The $9.8 million benefit is the year-to-date tax impact
and the full year benefit is approximately $15 million.
In the press release above, we also provided non-GAAP guidance
for our operating expenses, operating income, effective tax rate
and earnings per share for the year ending December 31, 2016. We
have included these forward-looking non-GAAP financial measures to
adjust our GAAP projections of such financial measures for (i)
restructuring and asset impairment charges primarily associated
with the end of our crystalline silicon operations as described
above, (ii) additional restructuring activities expected during the
remainder of the year and (iii) the reversal of a liability
associated with an uncertain tax position related to the income of
a foreign subsidiary. Other GAAP charges, including those related
to asset impairments, restructuring programs or litigation, that
would be excluded from non-GAAP earnings per share are possible for
the year ending December 31, 2016, 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 the resolution of certain
matters with tax authorities. Accordingly, these forward-looking
non-GAAP financial measures that exclude the aforementioned items
should be considered in addition to, and not as a substitute for,
or superior to financial guidance based on GAAP. The following is
the reconciliation of financial guidance based on GAAP to the
corresponding non-GAAP information (in millions, except per share
amounts):
2016 GAAP to Non-GAAP Guidance
Reconciliation
GAAP Guidance
Restructuring Charges1 Foreign Tax
Benefit2 Non-GAAP Guidance
Operating Expenses $485 to $520 ($105 to $120) - $380 to $400
Operating Income $205 to $250 $105 to $120 - $310 to $370 Effective
Tax Rate3 4% to 6% $15 to $25 $35 16% to 18% Earnings per share
$3.65 to $3.90 $0.85 to $0.90 ($0.30) $4.20 to $4.50
- $90 to $100 million of restructuring,
asset impairment and related charges primarily associated with the
end of our crystalline silicon module production and $15 to $20
million associated with other actions
- Expected tax benefit in Q3 2016 from
the reversal of a liability associated with an uncertain tax
position related to the income of a foreign subsidiary
- Effective tax rate reconciliation
provides the estimated tax benefit associated with restructuring
and asset impairment charges and the reversal of an uncertain tax
position liability
View source
version on businesswire.com: http://www.businesswire.com/news/home/20160803006552/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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