First Solar, Inc. Announces Third Quarter 2020 Financial Results
Net sales of $928 million
Net income per share of $1.45
Cash, restricted cash, and marketable securities of $1.7 billion, net cash of $1.4 billion
1.6 GWDC of bookings since prior earnings call
Strong fleet-wide production with capacity utilization averaging over 100% at all factories
Reinstate financial guidance for the fourth quarter 2020
TEMPE, Ariz., Oct. 27, 2020 (GLOBE NEWSWIRE) -- First Solar, Inc. (Nasdaq: FSLR) today announced financial results for the third quarter ended September 30, 2020.
“We delivered strong financial results for the third quarter,” said Mark Widmar, CEO of First Solar. “The dedication we continue to witness from our associates enabled us to expand module segment gross margin, close the sales of our Ishikawa, Miyagi, and Anamizu projects in Japan, and increase earnings per share quarter-over-quarter. This result reflects the strengths of our competitively advantaged CdTe modules and vertically integrated manufacturing process.”
Net sales for the third quarter were $928 million, an increase of $285 million from the prior quarter, primarily due to international project sales, and an increase in the volume of modules sold to third parties.
Net income per share for the third quarter was $1.45, compared to net income per share of $0.35 in the second quarter of 2020.
Cash, restricted cash, and marketable securities at the end of the third quarter totaled $1,671 million, an increase of $29 million from the prior quarter, primarily due to cash inflows from international project sales and module segment operating cash flows. This was partially offset by capital expenditures and loan repayments associated with international project sales.
Fourth Quarter 2020 Financial Guidance
The Company previously withdrew its full-year 2020 guidance on May 7, 2020 given the significant uncertainties regarding the severity and duration of the COVID-19 pandemic and its impact on the Company’s operations and financial results, as well as on energy and capital markets. As of the date of this release, the Company and its financial results have not been materially impacted by COVID-19. The Company today is reinstating financial guidance for the fourth quarter 2020 and providing implied full-year 2020 guidance based on its financial results through the third quarter 2020 and reinstated guidance for the fourth quarter 2020. The fourth quarter 2020 and implied full-year 2020 guidance are as follows:
Fourth Quarter 2020 | Implied Full Year 2020 | |
Net Sales | $540M to $790M | $2.6B to $2.9B |
Gross Margin % (1) | 26.5% to 27.0% | 25% |
Operating Expenses (2) | $90M to $95M | $351M to $356M |
Operating Income (3) | $50M to $120M | $310M to $380M |
Earnings per Share | $1.00 to $1.50 | $3.65 to $4.15 |
Net Cash Balance (4) | $1.2B to $1.3B | - |
Capital Expenditures | $123M to $223M | $450M to $550M |
Shipments | 1.8GW to 2.0GW | 5.5GW to 5.7GW |
(1) Includes $5 million of ramp costs for FY’20;
(2) Includes $15 million of plant start-up expense for Q4’20 and $39 million for FY’20;
(3) Includes $44 million of ramp costs and plant start-up expense for FY’20 and $27 million of Series 4 shutdown and other severance costs for FY’20;
(4) Defined as cash, cash equivalents, marketable securities, and restricted cash less expected debt at the end of 2020.
Conference Call Details
First Solar has scheduled a conference call for today, October 27, 2020 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 third quarter financial results and financial outlook.
An audio replay of the conference call will be available through Tuesday, November 10, 2020 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 3369808. 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 90 days.
About First Solar, Inc.
First Solar is a leading global provider of comprehensive photovoltaic (“PV”) solar energy solutions, 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 the fourth quarter 2020 and implied full-year 2020 guidance, net sales, gross margin, operating expenses, operating income, earnings per share, loss per share, net cash balance, capital expenditures, shipments, bookings, production, products and our business and financial objectives for 2020. 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: the severity and duration of the COVID-19 pandemic, including its potential impact on our business, results of operations, and financial condition; 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 off-take counterparties and the ability of our off-take counterparties to fulfill their contractual obligations to us; the ability of our customers and counterparties to perform under their contracts with 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 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 Condition 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. You should carefully consider the risks and uncertainties described in these reports.
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)
September 30, | December 31, | |||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 1,277,054 | $ | 1,352,741 | ||||
Marketable securities (amortized cost of $353,413 and allowance for credit losses of $48 at September 30, 2020) | 353,819 | 811,506 | ||||||
Accounts receivable trade | 221,196 | 476,425 | ||||||
Less: allowance for credit losses | (2,413 | ) | (1,386 | ) | ||||
Accounts receivable trade, net | 218,783 | 475,039 | ||||||
Accounts receivable, unbilled and retainage | 89,368 | 183,473 | ||||||
Less: allowance for credit losses | (919 | ) | — | |||||
Accounts receivable, unbilled and retainage, net | 88,449 | 183,473 | ||||||
Inventories | 567,785 | 443,513 | ||||||
Balance of systems parts | 34,280 | 53,583 | ||||||
Project assets | 1,222 | 3,524 | ||||||
Assets held for sale | 35,009 | — | ||||||
Prepaid expenses and other current assets | 224,092 | 276,455 | ||||||
Total current assets | 2,800,493 | 3,599,834 | ||||||
Property, plant and equipment, net | 2,386,591 | 2,181,149 | ||||||
PV solar power systems, net | 257,400 | 476,977 | ||||||
Project assets | 362,777 | 333,596 | ||||||
Deferred tax assets, net | 210,340 | 130,771 | ||||||
Restricted marketable securities (amortized cost of $245,351 and allowance for credit losses of $0 at September 30, 2020) | 261,507 | 223,785 | ||||||
Goodwill | 14,462 | 14,462 | ||||||
Intangible assets, net | 58,469 | 64,543 | ||||||
Inventories | 197,520 | 160,646 | ||||||
Other assets | 435,658 | 329,926 | ||||||
Total assets | $ | 6,985,217 | $ | 7,515,689 | ||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 153,925 | $ | 218,081 | ||||
Income taxes payable | 32,172 | 17,010 | ||||||
Accrued expenses | 298,133 | 351,260 | ||||||
Current portion of long-term debt | 40,412 | 17,510 | ||||||
Deferred revenue | 115,592 | 323,217 | ||||||
Accrued litigation | — | 363,000 | ||||||
Liabilities held for sale | 12,721 | — | ||||||
Other current liabilities | 78,136 | 28,130 | ||||||
Total current liabilities | 731,091 | 1,318,208 | ||||||
Accrued solar module collection and recycling liability | 125,594 | 137,761 | ||||||
Long-term debt | 220,456 | 454,187 | ||||||
Other liabilities | 511,963 | 508,766 | ||||||
Total liabilities | 1,589,104 | 2,418,922 | ||||||
Commitments and contingencies | ||||||||
Stockholders’ equity: | ||||||||
Common stock, $0.001 par value per share; 500,000,000 shares authorized; 105,974,984 and 105,448,921 shares issued and outstanding at September 30, 2020 and December 31, 2019, respectively | 106 | 105 | ||||||
Additional paid-in capital | 2,855,645 | 2,849,376 | ||||||
Accumulated earnings | 2,600,059 | 2,326,620 | ||||||
Accumulated other comprehensive loss | (59,697 | ) | (79,334 | ) | ||||
Total stockholders’ equity | 5,396,113 | 5,096,767 | ||||||
Total liabilities and stockholders’ equity | $ | 6,985,217 | $ | 7,515,689 | ||||
FIRST SOLAR, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
(Unaudited)
Three Months Ended | Nine Months Ended | |||||||||||||||||||
September 30, | June 30, | September 30, | September 30, | September 30, | ||||||||||||||||
Net sales | $ | 927,565 | $ | 642,411 | $ | 546,806 | $ | 2,102,100 | $ | 1,663,740 | ||||||||||
Cost of sales | 634,550 | 504,951 | 408,443 | 1,581,287 | 1,448,083 | |||||||||||||||
Gross profit | 293,015 | 137,460 | 138,363 | 520,813 | 215,657 | |||||||||||||||
Operating expenses: | ||||||||||||||||||||
Selling, general and administrative | 49,861 | 51,770 | 53,542 | 160,218 | 149,828 | |||||||||||||||
Research and development | 22,972 | 22,483 | 24,912 | 71,068 | 71,184 | |||||||||||||||
Production start-up | 13,019 | 6,311 | 18,605 | 23,812 | 38,564 | |||||||||||||||
Litigation loss | — | 6,000 | — | 6,000 | — | |||||||||||||||
Total operating expenses | 85,852 | 86,564 | 97,059 | 261,098 | 259,576 | |||||||||||||||
Operating income (loss) | 207,163 | 50,896 | 41,304 | 259,715 | (43,919 | ) | ||||||||||||||
Foreign currency (loss) income, net | (1,852 | ) | (1,299 | ) | 1,209 | (3,549 | ) | 3,107 | ||||||||||||
Interest income | 2,109 | 3,674 | 11,454 | 15,113 | 39,223 | |||||||||||||||
Interest expense, net | (10,975 | ) | (3,254 | ) | (4,976 | ) | (21,018 | ) | (24,018 | ) | ||||||||||
Other expense, net | (3,236 | ) | (3,195 | ) | (3,399 | ) | (8,653 | ) | (4,328 | ) | ||||||||||
Income (loss) before taxes and equity in earnings | 193,209 | 46,822 | 45,592 | 241,608 | (29,935 | ) | ||||||||||||||
Income tax (expense) benefit | (38,107 | ) | (10,214 | ) | (15,035 | ) | 40,894 | (25,385 | ) | |||||||||||
Equity in earnings, net of tax | (65 | ) | 303 | 65 | 150 | (205 | ) | |||||||||||||
Net income (loss) | $ | 155,037 | $ | 36,911 | $ | 30,622 | $ | 282,652 | $ | (55,525 | ) | |||||||||
Net income (loss) per share: | ||||||||||||||||||||
Basic | $ | 1.46 | $ | 0.35 | $ | 0.29 | $ | 2.67 | $ | (0.53 | ) | |||||||||
Diluted | $ | 1.45 | $ | 0.35 | $ | 0.29 | $ | 2.65 | $ | (0.53 | ) | |||||||||
Weighted-average number of shares used in per share calculations: | ||||||||||||||||||||
Basic | 105,967 | 105,927 | 105,397 | 105,830 | 105,272 | |||||||||||||||
Diluted | 106,751 | 106,473 | 106,227 | 106,537 | 105,272 | |||||||||||||||
