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First Solar, Inc. Announces Third Quarter 2012 Financial Results

  First Solar, Inc. Announces Third Quarter 2012 Financial Results

Net sales of $839 million

GAAP EPS of $1.00 per fully diluted share including restructuring charges of
$0.27 per share

Non-GAAP EPS per fully diluted share of $1.27, excluding restructuring charges

Tightens 2012 EPS guidance range to $4.40 to $4.70, increasing guidance
midpoint to $4.55

Business Wire

TEMPE, Ariz. -- November 01, 2012

First Solar, Inc. (Nasdaq: FSLR) today announced financial results for the
third quarter of 2012. Net sales were $839 million in the quarter, a decrease
of $118 million from the second quarter of 2012 and $167 million from the
third quarter of 2011. The decrease in net sales from the second quarter of
2012 was primarily due to project-specific decreases including Silver State
North, which was completed in the second quarter, and reduced construction
activity at Agua Caliente, consistent with the Company's planned construction
schedule. The decrease was partially offset by initial revenue recognition for
the 550-megawatt[ac] Topaz Solar Farms project, which began construction in
late 2011.

The Company reported third quarter net income of $1.00 per fully diluted
share, compared to net income of $1.27 per fully diluted share in the second
quarter of 2012 and net income of $2.25 per fully diluted share in the third
quarter of 2011. The third quarter of 2012 was impacted by pre-tax charges of
$24.2 million (reducing EPS by $0.27), relating to previously announced
restructuring actions.

Cash and Marketable Securities at the end of the third quarter were $717
million, down slightly from $744 million at the end of the second quarter of
2012.

The Company also updated its 2012 guidance as follows:

  *Net sales of $3.5 to $3.8 billion, compared to prior guidance of $3.6 to
    $3.9 billion. The reduction is due to weather-related disruptions in our
    supply chain and at certain project sites which may push the expected
    closing of the project sales from Q4 2012 into Q1 2013.
  *Non-GAAP earnings per fully diluted share of $4.40 to $4.70, compared to
    prior guidance of $4.20 to $4.70, in each case excluding restructuring and
    impairment charges and certain costs in excess of normal warranty expense
    related to the previously announced manufacturing excursion expected,
    which are expected to reduce 2012 earnings per fully diluted share by
    approximately $6.00. On a GAAP basis, earnings per fully diluted share are
    expected to be in the range of $(1.60) to $(1.30).
  *Operating Cash Flows of $650 to $850 million, compared to our previous
    guidance of $850 to $950 million, primarily due to the aforementioned
    weather-related disruptions for certain projects.

“Despite continued uncertainties and over-supply conditions in the market,
First Solar delivered another strong quarterly performance,” said Jim Hughes,
CEO. “Our quarterly performance coupled with our recent project wins in
sustainable markets demonstrates we are making meaningful progress in
achieving our strategic plan for long-term growth and value creation.”

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 today, Nov. 1, 2012 at 4:30 p.m.
EDT to discuss this announcement. Investors may access a live webcast of this
conference call by visiting 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 Wed., Nov. 7, 2012 at midnight EST and can be accessed by
dialing 888-203-1112 if you are calling from within the United States, or
+1-719-457-0820 if you are calling from outside the United States, and
entering the replay pass code 606422. A replay of the webcast will be
available on the Investors section of the company's web site 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 thin-film modules. 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
the safe harbor provisions of Section 21E of the Securities Exchange Act of
1934. The forward-looking statements in this release do not constitute
guarantees of future performance. Those statements involve a number of factors
that could cause actual results to differ materially, including risks
associated with the company's business involving the company's products, their
development and distribution, economic and competitive factors and the
company's key strategic relationships and other risks detailed in the
company's filings with the Securities and Exchange Commission. First Solar
assumes no obligation to update any forward-looking information contained in
this press release or with respect to the announcements described herein.

                                                             
FIRST SOLAR, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share data)
(Unaudited)
                                                                             
                                             September 30,    December 31, 
                                              2012              2011
ASSETS
Current assets:
Cash and cash equivalents                     $  614,699        $  605,619
Marketable securities                         102,295           66,146
Accounts receivable trade, net                467,640           310,568
Accounts receivable, unbilled                 398,945           533,399
Inventories                                   537,567           475,867
Balance of systems parts                      125,012           53,784
Deferred project costs                        143,392           197,702
Deferred tax assets, net                      37,361            41,144
Assets held for sale                          49,521            —
Note receivable, affiliate                    17,408            —
Prepaid expenses and other current assets    216,196           329,032      
Total current assets                         2,710,036         2,613,261    
Property, plant and equipment, net            1,549,689         1,815,958
Project assets                                250,812           374,881
Deferred project costs                        374,941           122,688
Deferred tax assets, net                      328,263           340,274
Marketable securities                         —                 116,192
Restricted cash and investments               285,573           200,550
Goodwill                                      65,444            65,444
Inventories                                   136,896           60,751
Other assets                                  280,075          67,615       
Total assets                                  $  5,981,729     $  5,777,614 
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable                              $  235,744        $  176,448
Income tax payable                            6,982             9,541
Accrued expenses                              575,156           406,659
Current portion of long-term debt             61,398            44,505
Deferred revenue                              534               41,925
Other current liabilities                     260,013          294,646      
Total current liabilities                     1,139,827         973,724
Accrued solar module collection and           213,407           167,378
recycling liability
Long-term debt                                468,294           619,143
Other liabilities                             702,047          373,506      
Total liabilities                             2,523,575        2,133,751    
Commitments and contingencies
Stockholders’ equity:
Common stock, $0.001 par value per share;
500,000,000 shares authorized; 86,961,313
and 86,467,873 shares issued and              87                86
outstanding at June 30, 2012 and December
31, 2011, respectively
Additional paid-in capital                    2,084,257         2,022,743
Accumulated earnings                          1,375,555         1,626,071
Accumulated other comprehensive loss          (1,745        )   (5,037       )
Total stockholders’ equity                    3,458,154        3,643,863    
Total liabilities and stockholders’ equity    $  5,981,729     $  5,777,614 

                                                              
FIRST SOLAR, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
(Unaudited)
                                                                   
                    Three Months Ended            Nine Months Ended
                    September      September 30,   September 30,   September
                   30,                                            30,
                                   2011            2012
                    2012                                           2011
Net sales           $  839,147     $ 1,005,788     $ 2,293,534     $ 2,105,855
Cost of sales       600,431       626,624        1,734,332      1,272,228
Gross profit        238,716        379,164         559,202         833,627
Operating
expenses:
Research and        32,372         38,164          100,821         102,617
development
Selling, general
and                 73,507         112,743         217,511         286,615
administrative
Production          1,595          5,514           6,186           27,739
start-up
Restructuring       24,197        —              444,262        —
Total operating     131,671       156,421        768,780        416,971
expenses
Operating income    107,045        222,743         (209,578    )   416,656
Foreign currency    3              (1,857      )   34              752
gain (loss)
Interest income     3,405          3,225           9,695           9,665
Interest expense,   (2,902     )   —               (11,194     )   —
net
Other income        3,210         (1,346      )   665            656
(expense), net
Income before       110,761        222,765         (210,378    )   427,729
income taxes
Income tax          22,844        26,251         40,138         54,109
expense
Net income          $  87,917     $ 196,514      $ (250,516  )   $ 373,620
Net income per
share:
Basic               $  1.01       $ 2.28         $ (2.89     )   $ 4.35
Diluted             $  1.00       $ 2.25         $ (2.89     )   $ 4.29
Weighted-average
number of shares
used in per share
calculations:
Basic               86,992        86,338         86,785         85,946
Diluted             87,765        87,151         86,785         87,114
                                                                   

Non-GAAP Financial Measures

The non-GAAP financial measures included in the table below are non-GAAP net
income and non-GAAP net income per share, which adjust for the following
items: Restructuring. We believe the presentation of these non-GAAP financial
measures, when taken together with the corresponding GAAP financial measures,
provides meaningful supplemental information regarding the Company’s operating
performance. Our management uses these non-GAAP financial measures in
assessing the Company’s performance to prior periods and investors benefit
from an understanding of these non-GAAP financial measures. The use of
non-GAAP financial measures has limitations and you should not consider these
performance measures in isolation from or as an alternative to measures
presented in accordance with GAAP such as net income and net income per share.

Restructuring: Included in our GAAP presentation of operating expenses,
restructuring costs represent asset impairment and related costs and severance
and termination related costs primarily due to a series of restructuring
initiatives intended to align the organization with our long-term strategic
plan including expected sustainable market opportunities and to reduce costs.
We exclude restructuring from our non-GAAP measures because the asset
impairment portion of the charges does not reflect our cash position or our
cash flows from operating activities, and the restructuring charges overall do
not reflect future operating expenses, are not indicative of our core
operating performance, and are not meaningful in comparing to our past
operating performance.


Three Months Ended September 30, 2012 (In thousands except per share data)

                                  GAAP         Restructuring      Non-GAAP
Net income before income taxes     $ 110,761     $  24,197           $ 134,958
Income tax expense                 22,844       582          (1)  $ 23,426
Net income                         $ 87,917     $  23,615          $ 111,532
                                                                     
Net income per fully diluted       $ 1.00       $  0.27            $ 1.27
share
                                                                     
Weighted-average shares            87,765       87,765             87,765
outstanding

(1) Amount adjusts the provision for income taxes to reflect the effect of the
non-GAAP adjustments on non-GAAP net income.

Contact:

First Solar, Inc.
Investors
David Brady
+1 (602) 414-9315
dbrady@firstsolar.com
or
Media
Ted Meyer
+1 (602) 427-3318
ted.meyer@firstsolar.com
 
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