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| 8-K - 8-K - FIRST SOLAR, INC. | a8-kfinancialresultsq3x13.htm |
EXHIBIT 99.1
News Release | ||||
First Solar, Inc. Announces Third Quarter 2013 Financial Results
• | Record Quarterly Net sales of $1.3 billion |
• | GAAP EPS of $1.94 per fully diluted share, Non-GAAP EPS of $2.28 per fully diluted share |
• | Cash and Marketable Securities of $1.5 billion, Net Cash of $1.3 billion |
TEMPE, Ariz., Oct. 31, 2013 - First Solar, Inc. (Nasdaq: FSLR) today announced financial results for the third quarter of 2013. Net sales were $1.3 billion in the quarter, an increase of $746 million from the prior quarter and an increase of $427 million from the third quarter of 2012. The sequential increase in net sales is primarily attributable to higher systems business project revenues, which included initial revenue recognition of Desert Sunlight and the sale of the ABW projects in Canada. Compared to the third quarter of 2012, the increase in net sales was also attributable to the Desert Sunlight and ABW projects and higher sales volume to third-party module-only customers in the third quarter of 2013, partially offset by initial revenue recognition for Topaz, achieved in the third quarter of 2012.
Revenues for the first nine months of 2013 were $2.5 billion compared to $2.3 billion for the first nine months of 2012.
The Company reported third quarter net income per fully diluted share of $1.94, compared to $0.37 in the second quarter of 2013 and $1.00 in the third quarter of 2012. The third quarter of 2013 was impacted by pre-tax asset impairment charges of $56.6 million related to the recently announced agreement to sell the Company’s facility in Mesa, Arizona. The sale of the facility is expected to provide additional liquidity to the Company in the form of cash sale proceeds, net of costs to sell, of approximately $115 million, and is expected to result in a net reduction in annual operating expenses (including both depreciation expense and cash expenditures) of approximately $10 million. The Company expects the Net cash proceeds from the sale to be received in the fourth quarter of this year. Excluding the impact of the asset impairment charge, Non-GAAP net income per fully diluted share was $2.28. The sequential increase in Non-GAAP earnings is primarily attributable to the initial revenue recognition of Desert Sunlight, the sale of the ABW projects, and higher sales volumes to third-party module-only customers in the third quarter compared to the second quarter. The year over year increase in earnings was primarily due to higher systems business project revenue, higher manufacturing utilization and higher module sales to third-party customers in the third quarter of 2013 compared to the third quarter of 2012.
Cash and Marketable Securities at the end of the third quarter were approximately $1.5 billion, an increase of approximately $247 million compared to the end of the second quarter of 2013. The Company’s Net Cash grew to approximately $1.3 billion, an increase of approximately $274 million from the second quarter of 2013. Cash flows from operations were $375 million in the third quarter, compared to $222 million for the second quarter of 2013.
The Company also posted its Earnings Call Presentation, which included updated guidance for 2013 on the Company’s website at http://investor.firstsolar.com.
The updated guidance is as follows:
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2013 Guidance Update | Current | Prior |
Net Sales | $3.4B to $3.6B | $3.6B to $3.8B |
Gross Margin (%) | 24% to 26% | 22% to 23% |
Operating Expenses | No Change | $390M to $410M |
Operating Income | $470M to $490M | $405M to $435M |
Effective Tax Rate | 14% to 16% | 15% to 17% |
Earnings Per Share* | $4.25 to $4.50 | $3.75 to $4.25 |
Operating Cash Flow | $0.7B to $0.9B | $0.8B to $1.0B |
Capital Expenditures | $300M to $350M | $350M to $400M |
Working Capital** | $50M to $150M | $50M to $200M |
* Includes per-share impact of Equity Offering and GE Shares ** Expected decrease in working capital from Dec. 31, 2012 | ||
“The third quarter marks a key milestone in our Company’s progress in achieving the strategic objectives we outlined during our Analyst Day event in April,” said Jim Hughes, CEO of First Solar. “During the quarter we delivered on several key objectives, including additional bookings of 860MWdc, significant reductions to our module manufacturing cost, and strong financial performance. With these encouraging results achieved, we move forward, focusing on strengthening our leadership position in the marketplace and achieving our strategic objectives for future success.”
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 for today, October 31, 2013 at 4:30 p.m. ET 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 Wednesday, November 6, 2013 at 11:59 p.m. ET 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 6970466. 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 module and systems 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. These forward-looking statements include statements, among other things, concerning: our business strategy, including anticipated trends and developments in and management plans for our business and the markets in which we operate; future financial results, operating results, revenues, gross margin, operating expenses, products, projected costs, warranties, solar module efficiency and balance of systems (“BoS”) cost reduction roadmaps, restructuring, product reliability and capital expenditures; our ability to continue to reduce the cost per watt of our solar modules; our ability to reduce the costs to construct photovoltaic (“PV”) solar power systems; research and development programs and our ability to improve the conversion efficiency of our solar modules; sales and marketing initiatives; and competition. These forward-looking statements are often characterized by the use of words such as “estimate,” “expect,” “anticipate,” “project,” “plan,” “intend,” “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. 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. 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 matters discussed in Item 1A: “Risk Factors,” of our Annual Report on Form 10-K for the year ended December 31, 2012, as updated and supplemented by risk factors included in our Prospectus dated June 12, 2013 filed with the SEC pursuant to Rule 424(b)(5) (the “Prospectus”), Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and other reports filed with the SEC.
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Contacts
First Solar Investors
David Brady
+1 602 414-9315
dbrady@firstsolar.com
or
Ryan Ferguson
+1 602 414-9315
rferguson@firstsolar.com
First Solar Media
Steve Krum
+1 602-427-3359
steve.krum@firstsolar.com
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FIRST SOLAR, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share data)
(Unaudited)
September 30, 2013 | December 31, 2012 | |||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 1,192,648 | $ | 901,294 | ||||
Marketable securities | 339,236 | 102,578 | ||||||
Accounts receivable trade, net | 147,741 | 553,567 | ||||||
Accounts receivable, unbilled and retainage | 436,773 | 400,987 | ||||||
Inventories | 311,700 | 434,921 | ||||||
Balance of systems parts | 139,937 | 98,903 | ||||||
Deferred project costs | 752,241 | 21,390 | ||||||
Deferred tax assets, net | 24,649 | 44,070 | ||||||
Assets held for sale | 164,358 | 49,521 | ||||||
Note receivable affiliate | — | 17,725 | ||||||
Prepaid expenses and other current assets | 87,283 | 207,368 | ||||||
Total current assets | 3,596,566 | 2,832,324 | ||||||
Property, plant and equipment, net | 1,397,784 | 1,525,382 | ||||||
Project assets and deferred project costs | 590,897 | 845,478 | ||||||
Deferred tax assets, net | 324,275 | 317,473 | ||||||
Restricted cash and investments | 278,753 | 301,400 | ||||||
Goodwill | 84,985 | 65,444 | ||||||
Inventories | 130,811 | 134,375 | ||||||
Retainage | 277,960 | 270,364 | ||||||
Other assets | 180,679 | 56,452 | ||||||
Total assets | $ | 6,862,710 | $ | 6,348,692 | ||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 184,837 | $ | 350,230 | ||||
Income taxes payable | 6,337 | 5,474 | ||||||
Accrued expenses | 364,545 | 554,433 | ||||||
Current portion of long-term debt | 60,329 | 62,349 | ||||||
Payments and billings for deferred project costs | 888,124 | 94,535 | ||||||
Other current liabilities | 132,014 | 34,353 | ||||||
Total current liabilities | 1,636,186 | 1,101,374 | ||||||
Accrued solar module collection and recycling liability | 214,262 | 212,835 | ||||||
Long-term debt | 168,885 | 500,223 | ||||||
Payments and billings for deferred project costs | 10,502 | 636,518 | ||||||
Other liabilities | 413,500 | 292,216 | ||||||
Total liabilities | 2,443,335 | 2,743,166 | ||||||
Commitments and contingencies | ||||||||
Stockholders’ equity: | ||||||||
Common stock, $0.001 par value per share; 500,000,000 shares authorized; 99,438,507 and 87,145,323 shares issued and outstanding at September 30, 2013 and December 31, 2012, respectively | 99 | 87 | ||||||
Additional paid-in capital | 2,629,137 | 2,065,527 | ||||||
Accumulated earnings | 1,817,511 | 1,529,733 | ||||||
Accumulated other comprehensive (loss) income | (27,372 | ) | 10,179 | |||||
Total stockholders’ equity | 4,419,375 | 3,605,526 | ||||||
Total liabilities and stockholders’ equity | $ | 6,862,710 | $ | 6,348,692 | ||||
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FIRST SOLAR, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
(Unaudited)
Three Months Ended | Nine Months Ended | |||||||||||||||
September 30, 2013 | September 30, 2012 | September 30, 2013 | September 30, 2012 | |||||||||||||
Net sales | $ | 1,265,587 | $ | 839,147 | $ | 2,540,552 | $ | 2,293,534 | ||||||||
Cost of sales | 901,553 | 600,431 | 1,867,094 | 1,734,332 | ||||||||||||
Gross profit | 364,034 | 238,716 | 673,458 | 559,202 | ||||||||||||
Operating expenses: | ||||||||||||||||
Research and development | 34,984 | 32,372 | 95,879 | 100,821 | ||||||||||||
Selling, general and administrative | 63,870 | 73,507 | 204,600 | 217,511 | ||||||||||||
Production start-up | — | 1,595 | 2,768 | 6,186 | ||||||||||||
Restructuring and asset impairments | 57,276 | 24,197 | 62,004 | 444,262 | ||||||||||||
Total operating expenses | 156,130 | 131,671 | 365,251 | 768,780 | ||||||||||||
Operating income (loss) | 207,904 | 107,045 | 308,207 | (209,578 | ) | |||||||||||
Foreign currency (loss) gain | (705 | ) | 3 | (155 | ) | 34 | ||||||||||
Interest income | 4,197 | 3,405 | 12,549 | 9,695 | ||||||||||||
Interest expense, net | (275 | ) | (2,902 | ) | (1,900 | ) | (11,194 | ) | ||||||||
Other income (expense), net | (2,433 | ) | 3,210 | (2,762 | ) | 665 | ||||||||||
Income (loss) before income taxes | 208,688 | 110,761 | 315,939 | (210,378 | ) | |||||||||||
Income tax expense | 13,650 | 22,844 | 28,161 | 40,138 | ||||||||||||
Net income (loss) | $ | 195,038 | $ | 87,917 | $ | 287,778 | $ | (250,516 | ) | |||||||
Net income (loss) per share: | ||||||||||||||||
Basic | $ | 1.98 | $ | 1.01 | $ | 3.14 | $ | (2.89 | ) | |||||||
Diluted | $ | 1.94 | $ | 1.00 | $ | 3.08 | $ | (2.89 | ) | |||||||
Weighted-average number of shares used in per share calculations: | ||||||||||||||||
Basic | 98,720 | 86,992 | 91,751 | 86,785 | ||||||||||||
Diluted | 100,378 | 87,765 | 93,517 | 86,785 | ||||||||||||
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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 Restructuring and Asset Impairments Expense. 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 and Asset Impairments: Included in our GAAP presentation of operating expenses, restructuring and asset impairment 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 and asset impairment 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 September 30, 2013 (In thousands except per share data) | ||||||||||||
GAAP | Restructuring and Asset Impairments | Non-GAAP | ||||||||||
Income before income taxes | $ | 208,688 | $ | 57,276 | $ | 265,964 | ||||||
Income tax (benefit) expense | 13,650 | 22,972 | (1) | 36,622 | ||||||||
Net income | $ | 195,038 | $ | 34,304 | $ | 229,342 | ||||||
Net income per fully diluted share (2) | $ | 1.94 | $ | 0.34 | $ | 2.28 | ||||||
Weighted-average shares outstanding | 100,378 | 100,378 | 100,378 | |||||||||
(1) Amount adjusts the provision for income taxes to reflect the effect of the non-GAAP adjustments on non-GAAP net income.
(2) Amount is calculated based upon Net income divided by Weighted-average shares outstanding. The sum of Net income per fully diluted share across the table may not equal the calculated amount due to rounding.
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