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First Solar, Inc. Announces Second Quarter 2021 Financial Results

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·12 min read
In this article:
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  • Net sales of $629 million

  • Net income per share of $0.77

  • Cash, cash equivalents, restricted cash, and marketable securities of $2.1 billion

  • YTD net bookings of 9.0 GWDC; 4.1 GWDC since prior earnings call

  • Started site preparation for previously announced 3.3 GWDC factory in Ohio

  • Announced additional 3.3 GWDC manufacturing expansion in India, contingent upon permitting and pending approval of governmental incentives that are satisfactory to First Solar

  • Nameplate manufacturing capacity expected to increase to 16 GWDC in 2024

  • World record CdTe module efficiency validated

  • Earnings guidance lowered primarily due to freight costs

TEMPE, Ariz., July 29, 2021 (GLOBE NEWSWIRE) -- First Solar, Inc. (Nasdaq: FSLR) today announced financial results for the second quarter ended June 30, 2021.

“I would like to thank our associates for their passion, continued excellence, and their many achievements in the second quarter.” said Mark Widmar, CEO of First Solar. “Operationally, we started site preparation for the new factory in Ohio and today announced additional capacity expansion in India. These factories of the future are expected to produce our next-generation module with a fleet-leading highest efficiency and wattage, at a lower cost per watt produced and environmental footprint. Commercially, market demand for our cadmium telluride, or CdTe, technology is at a record level, with year-to-date bookings of 9 GWDC. From a technology standpoint, we recently validated a world record CdTe module. This momentum we have cultivated, paired with an increasingly favorable policy environment, presents a compelling growth opportunity in the near-to mid-term.”

Net sales for the second quarter were $629 million, a decrease of $174 million from the prior quarter, primarily due to the sale of the Sun Streams 2, 4, and 5 projects in the prior quarter, which were partially offset by an increase in module segment revenue and revenue related to a settlement agreement for a legacy systems project.

Operating income for the second quarter was $110 million, compared to $252 million in the prior quarter. Second quarter operating income included depreciation and amortization of $66 million, revenue and gross margin related to the aforementioned settlement agreement of $65 million, $9 million related to underutilization and production start-up, and share-based compensation of $5 million.

Net income per diluted share for the second quarter was $0.77, compared to $1.96 in the prior quarter.

Cash, cash equivalents, restricted cash, and marketable securities at the end of the second quarter totaled $2.1 billion, an increase of $255 million from the prior quarter. This increase was primarily due to proceeds from the sale of our U.S. project development business and operating cash flows during the second quarter, which were partially offset by capital expenditures and operating expenses.

2021 guidance has been updated as follows:

Prior

Current

Net Sales

$2.85B to $3.025B

$2.875B to $3.1B

Gross Margin ($) (1)

$695M to $775M

$695M to $760M

Operating Expenses (2)

$285M to $300M

Unchanged

Operating Income (3)(4)

$545M to $640M

$545M to $625M

Earnings per Share

$4.05 to $4.75

$4.00 to $4.60

Net Cash Balance (5)

$1.8B to $1.9B

$1.35B to $1.45B

Capital Expenditures

$425M to $475M

$825M to $875M

Shipments

7.8GW to 8.0GW

7.6GW to 8.0GW


(1)

Includes $1 million of related ramp expense (unchanged) and $40 million of impact due to underutilization and reduced throughput (unchanged)

(2)

Includes $20 million to $25 million of production start-up expense (unchanged)

(3)

Includes $61 million to $66 million of related ramp expense, production start-up expense, underutilization and reduced throughput impact (unchanged)

(4)

Includes a $149 million pre-tax gain related to the sales of the North American O&M and U.S. project development businesses ($151 million previously)

(5)

Defined as cash, cash equivalents, marketable securities, and restricted cash less expected debt at the end of 2021

Conference Call Details

First Solar has scheduled a conference call for today, July 29, 2021 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.

Investors are encouraged to listen to the conference call and to review the accompanying materials, which contain more information about First Solar’s second quarter financial results and financial outlook.

An audio replay of the conference call will be available through Thursday, August 12, 2021 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 passcode 4994223. A replay of the webcast will also be available on the Investors section of First Solar’s website approximately five hours after the conclusion of the call and remain available for 90 days.

About First Solar, Inc.

First Solar is a leading American solar technology company and global provider of responsibly-produced eco-efficient solar modules advancing the fight against climate change. Developed at R&D labs in California and Ohio, the company’s advanced thin film photovoltaic (PV) modules represent the next generation of solar technologies, providing a competitive, high-performance, lower-carbon alternative to conventional crystalline silicon PV panels. From raw material sourcing and manufacturing through end-of-life module recycling, First Solar’s approach to technology embodies sustainability and a responsibility towards people and the planet. For more information, 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: the potential construction of our third factory in Ohio and first factory in India, including the estimated manufacturing capacity of the factories; the company’s anticipated nameplate manufacturing capacity in 2024; our financial guidance for 2021, net sales, gross margin, operating expenses, operating income, net income per share, earnings per share, net cash balance, capital expenditures, shipments, bookings, products and our business and financial objectives for 2021. 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,” “contingent” 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 our forward-looking statements. These factors include, but are not limited to: structural imbalances in global supply and demand for PV solar modules; our competitive position and other key competitive factors; the market for renewable energy, including solar energy; the reduction, elimination, expiration or introduction 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; interest rate fluctuations and both our and our customers’ ability to secure financing; our ability to execute on our long-term strategic plans; the loss of any of our large customers, or the ability of our customers and counterparties to perform under their contracts with us; our ability to execute on our solar module technology and cost reduction roadmaps; our ability to improve the wattage of our solar modules; the creditworthiness of our offtake counterparties and the ability of our offtake counterparties to fulfill their contractual obligations to us; the satisfaction of conditions precedent in our sales agreements; 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 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 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 convert existing or construct production facilities to support new product lines; our ability to attract and retain key executive officers and associates; the severity and duration of the COVID-19 pandemic, including its potential impact on our business, financial condition, and results of operations; 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.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share data)
(Unaudited)

June 30,
2021

December 31,
2020

ASSETS

Current assets:

Cash and cash equivalents

$

1,346,888

$

1,227,002

Marketable securities (amortized cost of $418,450 and $519,844 and allowance for credit losses of $87 and $121 at June 30, 2021 and December 31, 2020, respectively)

418,505

520,066

Accounts receivable trade

585,507

269,095

Less: allowance for credit losses

(2,479

)

(3,009

)

Accounts receivable trade, net

583,028

266,086

Accounts receivable, unbilled

14,633

26,673

Less: allowance for credit losses

(37

)

(303

)

Accounts receivable, unbilled, net

14,596

26,370

Inventories

603,057

567,587

Assets held for sale

155,685

Prepaid expenses and other current assets

189,402

251,739

Total current assets

3,155,476

3,014,535

Property, plant and equipment, net

2,396,641

2,402,285

PV solar power systems, net

233,370

243,396

Project assets

310,816

373,377

Deferred tax assets, net

107,450

104,099

Restricted marketable securities (amortized cost of $247,628 and allowance for credit losses of $13 at December 31, 2020)

265,280

Goodwill

14,462

14,462

Intangible assets, net

50,669

56,138

Inventories

226,719

201,229

Other assets

752,870

434,130

Total assets

$

7,248,473

$

7,108,931

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current liabilities:

Accounts payable

$

148,326

$

183,349

Income taxes payable

21,671

14,571

Accrued expenses

216,556

310,467

Current portion of long-term debt

3,239

41,540

Deferred revenue

237,244

188,813

Liabilities held for sale

25,621

Other current liabilities

33,887

83,037

Total current liabilities

660,923

847,398

Accrued solar module collection and recycling liability

129,726

130,688

Long-term debt

276,084

237,691

Other liabilities

398,105

372,226

Total liabilities

1,464,838

1,588,003

Commitments and contingencies

Stockholders’ equity:

Common stock, $0.001 par value per share; 500,000,000 shares authorized; 106,318,905 and 105,980,466 shares issued and outstanding at June 30, 2021 and December 31, 2020, respectively

106

106

Additional paid-in capital

2,859,108

2,866,786

Accumulated earnings

3,007,882

2,715,762

Accumulated other comprehensive loss

(83,461

)

(61,726

)

Total stockholders’ equity

5,783,635

5,520,928

Total liabilities and stockholders’ equity

$

7,248,473

$

7,108,931

FIRST SOLAR, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
(Unaudited)

Three Months Ended

Six Months Ended

June 30,
2021

March 31,
2021

June 30,
2020

June 30,
2021

June 30,
2020

Net sales

$

629,180

$

803,374

$

642,411

$

1,432,554

$

1,174,535

Cost of sales

455,062

618,607

504,951

1,073,669

946,737

Gross profit

174,118

184,767

137,460

358,885

227,798

Operating expenses:

Selling, general and administrative

36,346

52,087

51,770

88,433

110,357

Research and development

23,935

19,873

22,483

43,808

48,096

Production start-up

1,715

11,354

6,311

13,069

10,793

Litigation loss

6,000

6,000

Total operating expenses

61,996

83,314

86,564

145,310

175,246

Gain on sales of businesses, net

(1,745

)

150,895

149,150

Operating income

110,377

252,348

50,896

362,725

52,552

Foreign currency loss, net

(1,000

)

(2,595

)

(1,299

)

(3,595

)

(1,697

)

Interest income

1,288

956

3,674

2,244

13,004

Interest expense, net

(4,623

)

(2,996

)

(3,254

)

(7,619

)

(10,043

)

Other (expense) income, net

(3,247

)

8,448

(3,195

)

5,201

(5,417

)

Income before taxes and equity in earnings

102,795

256,161

46,822

358,956

48,399

Income tax (expense) benefit

(20,346

)

(46,490

)

(10,214

)

(66,836

)

79,001

Equity in earnings, net of tax

303

215

Net income

$

82,449

$

209,671

$

36,911

$

292,120

$

127,615

Net income per share:

Basic

$

0.78

$

1.98

$

0.35

$

2.75

$

1.21

Diluted

$

0.77

$

1.96

$

0.35

$

2.73

$

1.20

Weighted-average number of shares used in per share calculations:

Basic

106,313

106,088

105,927

106,201

105,761

Diluted

106,836

106,890

106,473

106,866

106,429