First Solar, Inc. Announces Fourth Quarter and Full-Year 2012 Financial Results

  First Solar, Inc. Announces Fourth Quarter and Full-Year 2012 Financial
  Results

Record net sales of $1.1 billion for the fourth quarter and $3.4 billion for
2012

GAAP earnings per fully diluted share of $1.74 for the fourth quarter and loss
of $1.11 for 2012

Non-GAAP earnings per fully diluted share of $2.04 for the fourth quarter and
$4.90 for 2012

Cash and marketable securities of $1 billion   

Guidance of $0.70 to $0.90 per fully diluted share for first quarter 2013

Business Wire

TEMPE, Ariz. -- February 26, 2013

First Solar, Inc. (Nasdaq: FSLR) today announced financial results for the
quarter and year ended Dec. 31, 2012. Net sales were a record $1.1 billion in
the quarter, an increase of $236 million from the third quarter of 2012 and
$415 million from the fourth quarter of 2011. The increase in net sales from
the third quarter of 2012 was primarily due to increased revenue recognition
for the Topaz project, and an increase in third-party module sales. Net sales
for 2012 were $3.4 billion, up 22% from 2011.

The Company reported fourth quarter GAAP net income per fully diluted share of
$1.74, compared to $1.00 in the third quarter of 2012 and a loss of $4.78 in
the fourth quarter of 2011, which included $454 million in pre-tax goodwill
impairment and restructuring charges. The fourth quarter of 2012 was impacted
by pre-tax charges of $25 million (reducing EPS by $0.30), relating to
previously announced restructuring actions. The Company reported a full-year
GAAP loss of $1.11 per share for 2012, including the impact of pre-tax charges
of $529 million (reducing EPS by $5.99), relating to previously announced
restructuring actions and costs in excess of normal warranty. Non-GAAP net
income per fully diluted share was $2.04 for the fourth quarter and $4.90 for
full-year 2012.

Cash and Marketable Securities at the end of 2012 were $1 billion, up from
$717 million at the end of the third quarter of 2012. Cash flows from
operations were $328 million in the fourth quarter, and $762 million for the
full-year 2012.

The Company also provided guidance for the first quarter of 2013 as follows:

  * Net Sales of $650 to $750 million
  * Gross Margin of 25-27%
  * OPEX of $90 to $100 million
  * Operating income of $70 to $100 million
  * Tax rate between 11% and 13%
  * EPS of $0.70 to $0.90 per fully diluted share
  * Cash flow from Operations of $0 to $100 million
  * CAPEX of $80 to $100 million

“Despite a very challenging market environment, we continued to make
meaningful progress in all critical value drivers for the Company,” said Jim
Hughes, CEO of First Solar. “We exceeded our module and balance-of-systems
cost reduction targets for 2012, as announced in December 2011, further
increased module efficiency and field performance, and achieved several key
objectives in our strategy to develop and service new sustainable energy
markets. We expect the market will remain turbulent for some time to come, but
we have seen some evidence of improvement and believe we have the right
strategy in place to retain our industry leadership by providing the best
value for our customers.”

First Solar achieved several milestones over the past year:

  * Acquired Solar Chile and established subsidiaries in India, the Middle
    East, South Africa and Thailand.
  * Set new world record for CdTe cell efficiency at 18.7%.
  * Increased average module efficiency to 12.9% for the fourth quarter of
    2012, up 0.7 percentage points from the fourth quarter of 2011.
  * Reduced the average module manufacturing costs on its best lines to $0.64
    per watt (excluding underutilization), down from $0.69 in the fourth
    quarter of 2011.
  * Surpassed 250 MW[AC] of grid-connected power at Agua Caliente, making it
    the world's largest operational solar power plant.
  * Surpassed 7 GW[DC] of cumulative production, enough to provide clean
    electricity for approximately 3.5 million homes and displace 4.7 million
    metric tons of CO₂ annually.

For a reconciliation of non-GAAP measures to measures presented in accordance
with generally accepted accounting principles in the U.S. (“GAAP”), see the
tables below.

First Solar has scheduled a conference call today, Feb. 26, 2013 at 4:30 p.m.
EST 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 Monday, March 4, 2013 at 11:59 p.m. EST and can be accessed by
dialing 888-203-1112 if you are calling from within the United States or
719-457-0820 if you are calling from outside the United States and entering
the replay pass code 4625647. A replay of the webcast will be available on the
Investors section of the Company's website 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 collection and 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
CONSOLIDATED BALANCE SHEETS
(In thousands, except share data)
(Unaudited)
                                                                
                                                 December 31,    December 31,
                                                 2012            2011
ASSETS
Current assets:
Cash and cash equivalents                        $ 901,294       $ 605,619
Marketable securities                            102,578         66,146
Accounts receivable trade, net                   553,567         310,568
Accounts receivable, unbilled                    400,987         533,399
Inventories                                      434,921         475,867
Balance of systems parts                         98,903          53,784
Deferred project costs                           21,390          197,702
Deferred tax assets, net                         44,070          41,144
Assets held for sale                             49,521          —
Note receivable, affiliate                       17,725          —
Prepaid expenses and other current assets        207,368         329,032      
Total current assets                             2,832,324       2,613,261
Property, plant and equipment, net               1,525,382       1,815,958
Project assets                                   358,824         374,881
Deferred project costs                           486,654         122,688
Deferred tax assets, net                         317,473         340,274
Marketable securities                            —               116,192
Restricted cash and investments                  301,400         200,550
Goodwill                                         65,444          65,444
Inventories                                      134,375         60,751
Other assets                                     326,816         67,615       
Total assets                                     $ 6,348,692     $ 5,777,614  
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable                                 $ 350,230       $ 176,448
Income taxes payable                             5,474           9,541
Accrued expenses                                 554,433         406,659
Current portion of long-term debt                62,349          44,505
Deferred revenue                                 2,056           41,925
Other current liabilities                        126,832         294,646      
Total current liabilities                        1,101,374       973,724
Accrued solar module collection and recycling    212,835         167,378
liability
Long-term debt                                   500,223         619,143
Payments and billings for deferred project       636,518         167,374
costs
Other liabilities                                292,216         206,132      
Total liabilities                                2,743,166       2,133,751    
Commitments and contingencies
Stockholders’ equity:
Common stock, $0.001 par value per share;
500,000,000 shares authorized; 87,145,323 and
86,467,873 shares issued and outstanding at      87              86
December 31, 2012 and December 31, 2011,
respectively
Additional paid-in capital                       2,065,527       2,022,743
Accumulated earnings                             1,529,733       1,626,071
Accumulated other comprehensive income (loss)    10,179          (5,037      )
Total stockholders’ equity                       3,605,526       3,643,863    
Total liabilities and stockholders’ equity       $ 6,348,692     $ 5,777,614  

 
FIRST SOLAR, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
(Unaudited)
                                                                 
                   Three Months Ended             Year Ended
                   December 31,    December 31,   December 31,    December 31,
                   2012            2011           2012            2011
Net sales          $ 1,075,011     $ 660,352      $ 3,368,545     $ 2,766,207
Cost of sales      781,464         522,228        2,515,796       1,794,456    
Gross profit       293,547         138,124        852,749         971,751
Operating
expenses:
Research and       31,639          37,906         132,460         140,523
development
Selling, general
and                63,417          125,926        280,928         412,541
administrative
Production         1,637           5,881          7,823           33,620
start-up
Goodwill           —               393,365        —               393,365
impairment
Restructuring      24,839          60,366         469,101         60,366       
Total operating    121,532         623,444        890,312         1,040,415    
expenses
Operating income   172,015         (485,320   )   (37,563     )   (68,664     )
(loss)
Foreign currency   (2,156      )   243            (2,122      )   995
(loss) gain
Interest income    3,129           3,726          12,824          13,391
Interest           (2,694      )   (100       )   (13,888     )   (100        )
expense, net
Other income,      280             9              945             665          
net
Income (loss)
before income      170,574         (481,442   )   (39,804     )   (53,713     )
taxes
Income tax
expense            16,396          (68,329    )   56,534          (14,220     )
(benefit)
Net income         $ 154,178       $ (413,113 )   $ (96,338   )   $ (39,493   )
(loss)
Net income
(loss) per
share:
Basic              $ 1.77          $ (4.78    )   $ (1.11     )   $ (0.46     )
Diluted            $ 1.74          $ (4.78    )   $ (1.11     )   $ (0.46     )
Weighted-average
number of shares
used in per
share
calculations:
Basic              87,084          86,428         86,860          86,067       
Diluted            88,549          86,428         86,860          86,067       

Non-GAAP Financial Measures

The non-GAAP financial measures included in the tables below are non-GAAP net
income and non-GAAP net income per share, which adjust for the following
items: Costs in Excess of Normal Warranty Expense and 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.

Costs in Excess of Normal Warranty Expense: Included in our GAAP presentation
of cost of sales and operating expense, costs in excess of normal warranty
expense reflect estimated costs related to our remediation of a manufacturing
excursion that occurred between June 2008 and June 2009. We exclude this
expense from our non-GAAP measures because we do not believe they reflect
expected long-term future costs.

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 costs 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 December 31, 2012 (In thousands except per share data)
                                                                    
                                GAAP          Restructuring          Non-GAAP
Net income before income        $ 170,574     $  24,839              $ 195,413
taxes
Income tax expense (benefit)    16,396        (1,357     )    (1 )   15,039
Net income                      $ 154,178     $  26,196              $ 180,374
                                                                      
Net income per fully diluted    $ 1.74        $  0.30                $ 2.04
share (2)
                                                                      
Weighted-average shares         88,549        88,549                 88,549
outstanding

(1)   Amount adjusts the provision for income taxes to reflect the effect of
      the non-GAAP adjustments on non-GAAP net income.
      Amount is calculated based upon Net income divided by Weighted-average
(2)   shares outstanding. The sum of Net income per fully diluted share across
      the table may not equal the calculated amount due to rounding.

 
Year Ended December 31, 2012 (In thousands except per share data)
                                                                           
                                                        Costs in
                                                        Excess of
                   GAAP          Restructuring          Normal              Non-GAAP
                                                        Warranty
                                                        Cost
Net (loss)
income before      $ (39,804 )   $  473,785      (1 )   $ 55,443     (2 )   $ 489,424
income taxes
Income tax         56,534        1,142           (3 )   1,687        (3 )   59,363
expense
Net (loss)         $ (96,338 )   $  472,643             $ 53,756            $ 430,061
income
                                                                             
Net (loss)
income per fully   $ (1.11   )   $  5.38                $ 0.61              $ 4.90
diluted share
(4)
                                                                             
Weighted-average
shares             86,860        87,844                 87,844              87,844
outstanding

      Balance includes $469.1 million of restructuring expense and $4.7
(1)   million of costs associated with the repayment of debt for our German
      manufacturing center.
      Balance includes (i) $35.1 million related to estimated expenses
      associated with certain remediation efforts related to the manufacturing
      excursion that occurred between June 2008 and June 2009. The remaining
      increase was primarily related to a change in estimate for the market
      value of the modules that we estimate will be returned to us under the
      voluntary remediation efforts that meet the required performance
(2)   standards to be re-sold as refurbished modules, (ii) $15.9 million in
      estimated compensation payments to customers, under certain
      circumstances, for power lost prior to remediation of the customer's
      system under our remediation program, and (iii) $4.4 million in
      estimated expenses for remediation efforts related to module removal,
      replacement and logistical services committed to and undertaken by us
      beyond the normal product warranty.
(3)   Amount adjusts the provision for income taxes to reflect the effect of
      non-GAAP adjustments on non-GAAP net income.
      Amount is calculated based upon Net (loss) income divided by
      Weighted-average shares outstanding. The sum of Net (loss) income per
(4)   fully diluted share across the table may not equal the calculated amount
      due to rounding and differences in the Weighted-average shares
      outstanding.

Contact:

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