First Solar, Inc. (Nasdaq: FSLR) today announced financial results
for the fourth quarter and year ended December 31, 2019. Net
sales for the fourth quarter were $1.4 billion, an increase of $0.9
billion from the prior quarter. The increase was primarily a result
of project sales in the United States and increased module
shipments.
The Company reported a fourth quarter GAAP loss
per share of $(0.56), compared to GAAP earnings per share (“EPS”)
of $0.29 in the prior quarter, and full year GAAP loss per share of
$(1.09). On a non-GAAP basis, adjusting for litigation losses
and the associated tax effect, the Company reported full year EPS
of $1.48.
Cash, restricted cash and marketable securities
at the end of the fourth quarter increased to $2.3 billion from
$1.6 billion at the end of the prior quarter. The increase was
primarily a result of cash received from project sales in the
United States, module sales and advance payments received for sales
of modules prior to the step down of the investment tax credit in
the United States.
“Despite our reported loss, I am pleased with
the continued execution of our Series 6 roadmap,” said Mark Widmar,
CEO of First Solar. “With ongoing improvements in throughput and
efficiency across our fleet, strong demand for Series 6, and our
pipeline of contracted shipments as far out as 2023, we are well
positioned for the future.”
For a reconciliation of the non-GAAP measure
presented above to the most directly comparable measure presented
in accordance with generally accepted accounting principles in the
United States (“GAAP”), see the table below.
First Solar has scheduled a conference call for
today, February 20, 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.
An audio replay of the conference call will be
available through Thursday, February 27, 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 pass code 5717879. 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 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 solutions 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: the
transition to Series 6 module manufacturing in 2020; net sales,
gross margin, operating expenses, operating income, earnings per
share, loss per share, net cash balance, capital expenditures,
shipments, bookings, 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: 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 and
counterparties to perform under their contracts with us; the
satisfaction of conditions precedent in our project 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, including
the opt-out action 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
Investorsinvestor@firstsolar.com
First Solar
Mediamedia@firstsolar.com
FIRST SOLAR, INC. AND
SUBSIDIARIESCONSOLIDATED BALANCE
SHEETS(In thousands, except share
data)(Unaudited)
|
|
December 31, |
|
|
2019 |
|
2018 |
ASSETS |
|
|
|
|
Current assets: |
|
|
|
|
Cash and cash equivalents |
|
$ |
1,352,741 |
|
|
$ |
1,403,562 |
|
Marketable securities |
|
811,506 |
|
|
1,143,704 |
|
Accounts receivable trade, net |
|
475,039 |
|
|
128,282 |
|
Accounts receivable, unbilled and retainage |
|
183,473 |
|
|
458,166 |
|
Inventories |
|
443,513 |
|
|
387,912 |
|
Balance of systems parts |
|
53,583 |
|
|
56,906 |
|
Project assets |
|
3,524 |
|
|
37,930 |
|
Prepaid expenses and other current assets |
|
276,455 |
|
|
243,061 |
|
Total current assets |
|
3,599,834 |
|
|
3,859,523 |
|
Property, plant and equipment,
net |
|
2,181,149 |
|
|
1,756,211 |
|
PV solar power systems,
net |
|
476,977 |
|
|
308,640 |
|
Project assets |
|
333,596 |
|
|
460,499 |
|
Deferred tax assets, net |
|
130,771 |
|
|
77,682 |
|
Restricted cash and
investments |
|
303,857 |
|
|
318,390 |
|
Goodwill |
|
14,462 |
|
|
14,462 |
|
Intangible assets, net |
|
64,543 |
|
|
74,162 |
|
Inventories |
|
160,646 |
|
|
130,083 |
|
Notes receivable,
affiliate |
|
— |
|
|
22,832 |
|
Other assets |
|
249,854 |
|
|
98,878 |
|
Total assets |
|
$ |
7,515,689 |
|
|
$ |
7,121,362 |
|
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
|
Current liabilities: |
|
|
|
|
Accounts payable |
|
$ |
218,081 |
|
|
$ |
233,287 |
|
Income taxes payable |
|
17,010 |
|
|
20,885 |
|
Accrued expenses |
|
351,260 |
|
|
441,580 |
|
Current portion of long-term debt |
|
17,510 |
|
|
5,570 |
|
Deferred revenue |
|
323,217 |
|
|
129,755 |
|
Accrued litigation |
|
363,000 |
|
|
— |
|
Other current liabilities |
|
28,130 |
|
|
14,380 |
|
Total current liabilities |
|
1,318,208 |
|
|
845,457 |
|
Accrued solar module
collection and recycling liability |
|
137,761 |
|
|
134,442 |
|
Long-term debt |
|
454,187 |
|
|
461,221 |
|
Other liabilities |
|
508,766 |
|
|
467,839 |
|
Total liabilities |
|
2,418,922 |
|
|
1,908,959 |
|
Commitments and
contingencies |
|
|
|
|
Stockholders’ equity: |
|
|
|
|
Common stock, $0.001 par value per share; 500,000,000 shares
authorized; 105,448,921 and 104,885,261 shares issued and
outstanding at December 31, 2019 and 2018, respectively |
|
105 |
|
|
105 |
|
Additional paid-in capital |
|
2,849,376 |
|
|
2,825,211 |
|
Accumulated earnings |
|
2,326,620 |
|
|
2,441,553 |
|
Accumulated other comprehensive loss |
|
(79,334 |
) |
|
(54,466 |
) |
Total stockholders’ equity |
|
5,096,767 |
|
|
5,212,403 |
|
Total liabilities and stockholders’ equity |
|
$ |
7,515,689 |
|
|
$ |
7,121,362 |
|
|
|
|
|
|
|
|
|
|
FIRST SOLAR, INC. AND
SUBSIDIARIESCONSOLIDATED STATEMENTS OF
OPERATIONS(In thousands, except per share
amounts)(Unaudited)
|
|
Three Months Ended |
|
Year Ended |
|
|
December 31, 2019 |
|
September 30, 2019 |
|
December 31, 2018 |
|
December 31, 2019 |
|
December 31, 2018 |
Net sales |
|
$ |
1,399,377 |
|
|
$ |
546,806 |
|
|
$ |
691,241 |
|
|
$ |
3,063,117 |
|
|
$ |
2,244,044 |
|
Cost of sales |
|
1,065,822 |
|
|
408,443 |
|
|
592,931 |
|
|
2,513,905 |
|
|
1,851,867 |
|
Gross profit |
|
333,555 |
|
|
138,363 |
|
|
98,310 |
|
|
549,212 |
|
|
392,177 |
|
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
Selling, general and administrative |
|
55,643 |
|
|
53,542 |
|
|
51,338 |
|
|
205,471 |
|
|
176,857 |
|
Research and development |
|
25,427 |
|
|
24,912 |
|
|
21,388 |
|
|
96,611 |
|
|
84,472 |
|
Production start-up |
|
7,351 |
|
|
18,605 |
|
|
14,576 |
|
|
45,915 |
|
|
90,735 |
|
Litigation loss |
|
363,000 |
|
|
— |
|
|
— |
|
|
363,000 |
|
|
— |
|
Total operating expenses |
|
451,421 |
|
|
97,059 |
|
|
87,302 |
|
|
710,997 |
|
|
352,064 |
|
Operating (loss) income |
|
(117,866 |
) |
|
41,304 |
|
|
11,008 |
|
|
(161,785 |
) |
|
40,113 |
|
Foreign currency (loss)
income, net |
|
(816 |
) |
|
1,209 |
|
|
1,908 |
|
|
2,291 |
|
|
(570 |
) |
Interest income |
|
9,663 |
|
|
11,454 |
|
|
14,643 |
|
|
48,886 |
|
|
59,788 |
|
Interest expense, net |
|
(3,048 |
) |
|
(4,976 |
) |
|
(11,476 |
) |
|
(27,066 |
) |
|
(25,921 |
) |
Other income (expense),
net |
|
21,873 |
|
|
(3,399 |
) |
|
32,102 |
|
|
17,545 |
|
|
39,737 |
|
(Loss) income before taxes and
equity in earnings |
|
(90,194 |
) |
|
45,592 |
|
|
48,185 |
|
|
(120,129 |
) |
|
113,147 |
|
Income tax benefit
(expense) |
|
30,865 |
|
|
(15,035 |
) |
|
4,416 |
|
|
5,480 |
|
|
(3,441 |
) |
Equity in earnings, net of
tax |
|
(79 |
) |
|
65 |
|
|
(485 |
) |
|
(284 |
) |
|
34,620 |
|
Net (loss) income |
|
$ |
(59,408 |
) |
|
$ |
30,622 |
|
|
$ |
52,116 |
|
|
$ |
(114,933 |
) |
|
$ |
144,326 |
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss) income per
share: |
|
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
(0.56 |
) |
|
$ |
0.29 |
|
|
$ |
0.50 |
|
|
$ |
(1.09 |
) |
|
$ |
1.38 |
|
Diluted |
|
$ |
(0.56 |
) |
|
$ |
0.29 |
|
|
$ |
0.49 |
|
|
$ |
(1.09 |
) |
|
$ |
1.36 |
|
Weighted-average number of
shares used in per share calculations: |
|
|
|
|
|
|
|
|
|
|
Basic |
|
105,425 |
|
|
105,397 |
|
|
104,845 |
|
|
105,310 |
|
|
104,745 |
|
Diluted |
|
105,425 |
|
|
106,227 |
|
|
105,819 |
|
|
105,310 |
|
|
106,113 |
|
Non-GAAP Financial Measure
In this release, we provide non-GAAP earnings
per share for the year ended December 31, 2019. We have
included this non-GAAP financial measure to adjust for losses
associated with our class action and opt-out legal proceedings and
the associated tax effects. We believe non-GAAP earnings per share,
when taken together with the corresponding GAAP financial measure,
is relevant and useful information to our investors because it
provides them with additional information in assessing our
financial operating results independent of the litigation loss
described below. 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
the $350 million that, subject to court approval, we will pay in
cash pursuant to the class action settlement and the amount of
costs that we may ultimately have to pay in cash to resolve the
opt-out action. As of December 31, 2019, we accrued $13
million of estimated losses for the opt-out action, which
represents our best estimate of the lower bound of the costs to
resolve this case. The ultimate amount of loss may be materially
higher. Accordingly, this non-GAAP financial measure 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 for the year
ended December 31, 2019 (in millions, except per share
amounts):
|
|
Year EndedDecember 31, 2019 |
Net loss |
|
$ |
(114.9 |
) |
|
|
|
Litigation loss |
|
363.0 |
|
Tax effect of litigation
loss |
|
(90.9 |
) |
Non-GAAP net income |
|
$ |
157.2 |
|
|
|
|
Weighted-average number of
shares used for diluted earnings per share |
|
105.3 |
|
GAAP loss per share |
|
$ |
(1.09 |
) |
|
|
|
Weighted-average number of
shares used for diluted earnings per share |
|
106.1 |
|
Non-GAAP earnings per
share |
|
$ |
1.48 |
|
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