First Solar, Inc. announces First Quarter 2013 Financial Results

Net sales of $755 million
Non-GAAP EPS of $0.69 per fully diluted share
GAAP EPS of $0.66 per fully diluted share
Cash and Marketable Securities of $1 billion
Maintains full-year 2013 guidance

First Solar, Inc. (Nasdaq: FSLR) today announced financial results for the first quarter of 2013. Net sales were $755 million in the quarter, a decrease of $320 million from the fourth quarter of 2012 and an increase of $258 million from the first quarter of 2012. The decrease in net sales from the fourth quarter of 2012 was primarily due to less revenue recognition from our systems business projects primarily related to the Topaz project, while the increase over the first quarter of 2012 was primarily due to higher sales volumes for third-party module sales and an increase in revenue from systems projects.

The Company reported first quarter net income per fully diluted share of $0.66, compared to $1.74 in the fourth quarter of 2012 and a loss of $5.20 in the first quarter of 2012, which included $444 million in pre-tax restructuring charges and costs in excess of normal warranty. The first quarter of 2013 was impacted by pre-tax restructuring charges of $2 million (reducing EPS by $0.03), compared to $25 million (reducing EPS by $0.30) in the fourth quarter of 2012. In both cases the pre-tax charges related to previously announced restructuring actions. The sequential decrease in earnings was primarily due to higher revenue recognition for Topaz in the fourth quarter of 2012, temporary construction delays at the AVSR project, and previously planned lower manufacturing utilization as the Company accelerated efforts to upgrade production lines, which is expected to enable the Company to achieve near term targets on its module cost and efficiency improvement roadmaps.

Cash and Marketable Securities at the end of the first quarter were approximately $1 billion, essentially unchanged compared to the end of the fourth quarter of 2012, and an increase of $262 million over the first quarter of 2012. Cash flows from operations were $66 million in the first quarter, compared to $328 million for the fourth quarter of 2012.

The Company also maintained its full year 2013 financial guidance as issued during the 2013 Analyst Day event held April 9, 2013. Copies of the presentation materials for both the Analyst Day event and the first quarter 2013 earnings call are posted in the Investor section of its website at www.firstsolar.com.

“We demonstrated progress on several fronts during the first quarter, including continued strengthening of our balance sheet and additions to our pipeline,” said Jim Hughes, CEO of First Solar. “We remain on track for the year and reaffirm our full-year 2013 financial guidance and are focused on achieving our goal of new bookings to shipments ratio of one-to-one.”

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 for today, May 6, 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 Friday, May 10, 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 7149955. 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.

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 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)

March 31, 2013

December 31, 2012

ASSETS

Current assets:

Cash and cash equivalents

$

842,753

$

901,294

Marketable securities

168,993

102,578

Accounts receivable trade, net

279,131

553,567

Accounts receivable, unbilled and retainage

480,131

400,987

Inventories

388,509

434,921

Balance of systems parts

135,374

98,903

Deferred project costs

617,540

21,390

Deferred tax assets, net

41,456

44,070

Assets held for sale

49,521

49,521

Note receivable affiliate

17,725

Prepaid expenses and other current assets

106,518

207,368

Total current assets

3,109,926

2,832,324

Property, plant and equipment, net

1,553,205

1,525,382

Project assets and deferred project costs

573,901

845,478

Deferred tax assets, net

321,420

317,473

Restricted cash and investments

286,325

301,400

Goodwill

68,833

65,444

Inventories

133,264

134,375

Retainage

188,681

270,364

Other assets

58,870

56,452

Total assets

$

6,294,425

$

6,348,692

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current liabilities:

Accounts payable

$

209,019

$

350,230

Income taxes payable

2,068

5,474

Accrued expenses

430,503

554,433

Current portion of long-term debt

61,106

62,349

Deferred revenue

2,614

2,056

Payments and billings for deferred project costs

778,651

94,535

Other current liabilities

49,480

32,297

Total current liabilities

1,533,441

1,101,374

Accrued solar module collection and recycling liability

228,779

212,835

Long-term debt

501,111

500,223

Payments and billings for deferred project costs

25,746

636,518

Other liabilities

331,366

292,216

Total liabilities

2,620,443

2,743,166

Commitments and contingencies

Stockholders’ equity:

Common stock, $0.001 par value per share;
500,000,000 shares

authorized;
87,624,484 and 87,145,323 shares issued and

outstanding
at March 31, 2013 and December 31, 2012,

respectively

88

87

Additional paid-in capital

2,094,104

2,065,527

Accumulated earnings

1,588,875

1,529,733

Accumulated other comprehensive income (loss)

(9,085

)

10,179

Total stockholders’ equity

3,673,982

3,605,526

Total liabilities and stockholders’ equity

$

6,294,425

$

6,348,692

FIRST SOLAR, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF

OPERATIONS
(In thousands, except per share amounts)
(Unaudited)

Three Months Ended

March 31, 2013

March 31, 2012

Net sales

$

755,205

$

497,055

Cost of sales

585,879

420,310

Gross profit

169,326

76,745

Operating expenses:

Research and development

29,931

36,084

Selling, general and administrative

74,465

91,820

Production start-up

1,376

4,058

Restructuring

2,347

401,065

Total operating expenses

108,119

533,027

Operating income (loss)

61,207

(456,282

)

Foreign currency gain (loss)

1,618

(984

)

Interest income

4,947

2,911

Interest expense, net

(750

)

(920

)

Other expense, net

(833

)

(1,211

)

Income (loss) before income taxes

66,189

(456,486

)

Income tax expense (benefit)

7,047

(7,070

)

Net income (loss)

$

59,142

$

(449,416

)

Net income (loss) per share:

Basic

$

0.68

$

(5.20

)

Diluted

$

0.66

$

(5.20

)

Weighted-average number of shares used in per share calculations:

Basic

87,206

86,507

Diluted

89,377

86,507

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 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: 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 March 31, 2013 (In thousands except per share

data)

GAAP

Restructuring

Non-GAAP

Income before income taxes

$

66,189

$

2,347

$

68,536

Income tax expense

7,047

25

(1)

7,022

Net income

$

59,142

$

2,372

$

61,514

Net income per fully diluted share (2)

$

0.66

$

0.03

$

0.69

Weighted-average shares outstanding

89,377

89,377

89,377

(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.

Three Months Ended December 31, 2012 (In thousands except per

share data)

GAAP

Restructuring

Non-GAAP

Income before income taxes

$

170,574

$

24,839

$

195,413

Income tax (benefit) expense

16,396

(1,357

)

(1

)

15,039

Net income

$

154,178

$

26,196

$

180,374

Net income per fully diluted share (2)

$

1.74

$

0.30

$

2.04

Weighted-average shares outstanding

88,549

88,549

88,549

(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.

Source: First Solar

For more information on: First Solar