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First Solar, Inc. Announces Second Quarter 2019 Financial Results

  • Net sales of $585 million
  • Net loss per share of $(0.18)
  • Cash, restricted cash and marketable securities of $2.1 billion, net cash of $1.7 billion
  • YTD net bookings of 4.3GWDC; 2.0 GWDC since prior earnings call
  • Maintain 2019 net sales, EPS and cash guidance

TEMPE, Ariz., Aug. 01, 2019 (GLOBE NEWSWIRE) -- First Solar, Inc. (FSLR) today announced financial results for the second quarter ended June 30, 2019. Net sales for the second quarter were $585 million, an increase of $53 million from the prior quarter, primarily due to increased module and system sales in the U.S. and Australia.

The Company reported a second quarter loss per share of $(0.18), compared to a loss per share of $(0.64) in the first quarter of 2019.

Cash, restricted cash and marketable securities at the end of the second quarter decreased to $2.1 billion from $2.3 billion at the end of the prior quarter, primarily as a result of continued capital investments in Series 6 manufacturing capacity.

“We continued to make significant progress in our Series 6 transition during Q2, with improvements across all manufacturing metrics,” said Mark Widmar, CEO of First Solar. “We had record module production and shipments during the second quarter, and with our recent bookings success we are now essentially sold out through 2020, with significant bookings visibility into 2021.”

2019 guidance has been updated as follows:

           
    2019 Guidance Prior Current  
    Net Sales $3.5B to $3.7B Unchanged  
    Gross Margin % (1) 18% to 19% 18.5% to 19.5%  
    Operating Expenses (2) $370M to $390M $360M to $380M  
    Operating Income $260M to $310M $290M to $340M  
    Earnings per Share $2.25 to $2.75 Unchanged  
    Net Cash Balance (3) $1.7B to $1.9B Unchanged  
    Capital Expenditures $650M to $750M Unchanged  
    Shipments 5.4GW to 5.6GW Unchanged  
           
(1)   Includes $60 to $70 million of ramp costs ($45 to $55 million previously)  
(2)   Includes $55 to $65 million of production start-up expense ($70 to $80 million previously)  
(3)   Defined as cash, restricted cash and marketable securities less expected debt at the end of 2019  
           

First Solar has scheduled a conference call for today, August 1, 2019 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.

The guidance figures presented above are subject to a variety of assumptions and estimates. Investors are encouraged to listen to the conference call and to review the accompanying materials which contain more information about First Solar’s 2019 guidance.

An audio replay of the conference call will be available approximately two hours after the conclusion of the call. The audio replay will remain available through Thursday, August 8, 2019 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 pass code 2308858. 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 approximately 90 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 2019; the transition to Series 6 module manufacturing in 2019; net sales, gross margin, operating expenses, operating income, earnings per share, net cash balance, capital expenditures, shipments, bookings, products and our business and financial objectives for 2019. 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; the impact of public policies, such as tariffs or other trade remedies imposed on solar cells and modules; our ability to execute on our long-term strategic plans; our ability to execute on our solar module technology and cost reduction roadmaps; our ability to improve the wattage of our solar modules; interest rate fluctuations and both our and our customers’ ability to secure financing; the creditworthiness of our offtake counterparties and the ability of our offtake counterparties to fulfill their contractual obligations to us; the ability of our customers to perform under their contracts with us; 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, including the class action lawsuit against us; 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 Investors
investor@firstsolar.com

First Solar Media
media@firstsolar.com

 
FIRST SOLAR, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands, except share data)
(Unaudited)
 
    June 30,   December 31,
    2019   2018
ASSETS        
Current assets:        
Cash and cash equivalents   $ 1,221,568     $ 1,403,562  
Marketable securities   807,561     1,143,704  
Accounts receivable trade, net   269,527     128,282  
Accounts receivable, unbilled and retainage   127,972     458,166  
Inventories   586,621     387,912  
Balance of systems parts   91,728     56,906  
Project assets   1,703     37,930  
Prepaid expenses and other current assets   305,566     243,061  
Total current assets   3,412,246     3,859,523  
Property, plant and equipment, net   2,006,334     1,756,211  
PV solar power systems, net   304,657     308,640  
Project assets   528,246     460,499  
Deferred tax assets, net   76,892     77,682  
Restricted cash and investments   328,591     318,390  
Goodwill   14,462     14,462  
Intangible assets, net   69,119     74,162  
Inventories   149,157     130,083  
Notes receivable, affiliate       22,832  
Other assets   248,103     98,878  
Total assets   $ 7,137,807     $ 7,121,362  
LIABILITIES AND STOCKHOLDERS’ EQUITY        
Current liabilities:        
Accounts payable   $ 242,541     $ 233,287  
Income taxes payable   15,293     20,885  
Accrued expenses   421,595     441,580  
Current portion of long-term debt   28,312     5,570  
Deferred revenue   112,237     129,755  
Other current liabilities   23,341     14,380  
Total current liabilities   843,319     845,457  
Accrued solar module collection and recycling liability   136,275     134,442  
Long-term debt   452,976     461,221  
Other liabilities   570,113     467,839  
Total liabilities   2,002,683     1,908,959  
Commitments and contingencies        
Stockholders’ equity:        
Common stock, $0.001 par value per share; 500,000,000 shares authorized; 105,390,383 and 104,885,261 shares issued and outstanding at June 30, 2019 and December 31, 2018, respectively   105     105  
Additional paid-in capital   2,826,533     2,825,211  
Accumulated earnings   2,355,406     2,441,553  
Accumulated other comprehensive loss   (46,920 )   (54,466 )
Total stockholders’ equity   5,135,124     5,212,403  
Total liabilities and stockholders’ equity   $ 7,137,807     $ 7,121,362  
 


FIRST SOLAR, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
(Unaudited)
 
  Three Months Ended   Six Months Ended
  June 30,   March 31,   June 30,   June 30,   June 30,
  2019   2019   2018   2019   2018
Net sales $ 584,956     $ 531,978     $ 309,318     $ 1,116,934     $ 876,583  
Cost of sales 507,774     531,866     317,376     1,039,640     711,843  
Gross profit (loss) 77,182     112     (8,058 )   77,294     164,740  
Operating expenses:                  
Selling, general and administrative 50,934     45,352     50,854     96,286     91,980  
Research and development 24,395     21,877     20,370     46,272     40,694  
Production start-up 10,437     9,522     24,352     19,959     61,436  
Total operating expenses 85,766     76,751     95,576     162,517     194,110  
Operating loss (8,584 )   (76,639 )   (103,634 )   (85,223 )   (29,370 )
Foreign currency gain (loss), net 1,726     172     2,422     1,898     (95 )
Interest income 13,510     14,259     16,865     27,769     28,689  
Interest expense, net (8,921 )   (10,121 )   (6,065 )   (19,042 )   (11,247 )
Other (loss) income, net (4,438 )   3,509     (4,328 )   (929 )   13,606  
(Loss) income before taxes and equity in earnings (6,707 )   (68,820 )   (94,740 )   (75,527 )   1,583  
Income tax (expense) benefit (11,744 )   1,394     6,164     (10,350 )   (5,461 )
Equity in earnings, net of tax (97 )   (173 )   40,085     (270 )   38,338  
Net (loss) income $ (18,548 )   $ (67,599 )   $ (48,491 )   $ (86,147 )   $ 34,460  
                   
Net (loss) income per share:                  
Basic $ (0.18 )   $ (0.64 )   $ (0.46 )   $ (0.82 )   $ 0.33  
Diluted $ (0.18 )   $ (0.64 )   $ (0.46 )   $ (0.82 )   $ 0.32  
Weighted-average number of shares used in per share calculations:                  
Basic 105,369     105,046     104,776     105,208     104,664  
Diluted 105,369     105,046     104,776     105,208     106,234