First Solar, Inc. Announces Second Quarter 2010 Financial Results

  • Net Sales $588 million
  • PV module cost $0.76/watt
  • EPS $1.84 per fully diluted share
  • Increased 2010 EPS guidance to $7.00-$7.40 per diluted share

TEMPE, Ariz. — (BUSINESS WIRE) — July 29, 2010 — First Solar, Inc. (Nasdaq: FSLR) today announced its financial results for the second quarter ended June 26, 2010. Quarterly net sales were $587.9 million, up 12% from $525.9 million in the second quarter of 2009, due to increased production volumes and systems revenue, partially offset by a decline in pricing and lower euro exchange rates. Second quarter 2010 net sales increased $19.9 million from the first quarter of 2010, primarily due to increased turnkey system sales.

Second quarter net income per fully diluted share was $1.84, down from $2.11 in the second quarter of 2009 and down from $2.00 in the first quarter of 2010. Year over year, the declines were primarily driven by lower module average selling prices, and higher operating expenses that were partially offset by increased module production and lower module cost per watt. Quarter over quarter, the declines were primarily driven by higher operating expenses.

PV module manufacturing cost was reduced to $0.76/watt, down $0.05 from the prior quarter and 13% year over year. Annual throughput per line was up 6% quarter over quarter to 59.0 MW. This increases announced or operating capacity from 2.1 to 2.2 GW by 2012.

For 2010, First Solar forecasts net sales of $2.5 to $2.6 billion, reflecting reallocation of module capacity from our systems business to meet stronger module demand by our European customers. Earnings per fully diluted share are increased to a projected range of $7.00 to $7.40 which includes a $0.20-$0.23 reduction for a foreign exchange assumption change from $1.30/euro to $1.20/euro and $0.09-$0.10 per share dilution for the completed acquisition of NextLight Renewable Power, LLC. Total capital spending is projected to be $575 to $625 million. The company expects to generate $575 to $625 million of operating cash flow. First Solar has posted its Second Quarter Earnings Call Presentation, which includes guidance for fiscal 2010 and additional details regarding the key assumptions relating to this guidance, in the Investor section of its website at www.firstsolar.com.

First Solar will discuss these results and outlook for fiscal 2010 in a conference call scheduled for today at 4:30 p.m. ET. Investors may access a live audio webcast of this conference call and the earnings call presentation in the investors section of the Company’s website at www.firstsolar.com.

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 Tuesday, August 3, 2010, at 7:30 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 7770641. A replay of the webcast will be available on the Investor section on the Company’s website approximately two hours after the conclusion of the call and remain available for approximately 90 calendar days. If you are a subscriber of FactSet or Thomson One, you can obtain a written transcript within two hours.

About First Solar, Inc.

First Solar manufactures solar modules with an advanced semiconductor technology and provides comprehensive photovoltaic (PV) system solutions. The company is delivering an economically viable alternative to fossil-fuel generation today. From raw material sourcing through end-of-life collection and recycling, First Solar is focused on creating cost-effective, renewable energy solutions that protect and enhance the environment. For more information about First Solar, please visit http://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 STATEMENTS OF OPERATIONS

(In thousands, except per share amounts)

(Unaudited)

 
  Three Months Ended   Six Months Ended

 

June 26,
2010

 

June 27,
2009

June 26,
2010

 

June 27,
2009

Net sales $ 587,854 $ 525,876 $ 1,155,815 $ 944,084
Cost of sales 303,660   227,780   589,585   410,704  
Gross profit 284,194 298,096 566,230 533,380
Operating expenses:
Research and development 22,836 18,605 45,724 30,309
Selling, general and administrative 78,597 72,926 145,461 122,241
Production start-up 2,288   2,524   3,431   8,733  
Total operating expenses 103,721   94,055   194,616   161,283  
Operating income 180,473 204,041 371,614 372,097
Foreign currency (loss) gain (2,625 ) 239 (3,321 ) 2,073
Interest income 3,035 1,948 8,683 4,051
Interest expense, net (6 ) (3,827 ) (6 ) (4,762 )
Other expense, net (439 ) (1,103 ) (1,173 ) (2,429 )
Income before income taxes 180,438 201,298 375,797 371,030
Income tax expense 21,395   20,719   44,409   25,856  
Net income $ 159,043   $ 180,579   $ 331,388   $ 345,174  
Net income per share:
Basic $ 1.87   $ 2.16   $ 3.91   $ 4.17  
Diluted $ 1.84   $ 2.11   $ 3.84   $ 4.10  
Weighted-average number of shares used in per share calculations:
Basic 84,852   83,723   84,679   82,704  
Diluted 86,401   85,668   86,247   84,140  

FIRST SOLAR, INC. AND SUBSIDIARIES

 

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except share data)

(Unaudited)

 

   

June 26,
2010

   

December 26,
2009

ASSETS
Current assets:
Cash and cash equivalents $ 510,482 $ 664,499
Marketable securities and investments 285,993 120,236
Accounts receivable trade, net 256,344 226,826
Accounts receivable, unbilled 105,333 58
Inventories 194,308 152,821
Project assets 109 1,081
Deferred tax asset, net 19,248 21,679
Prepaid expenses and other current assets 244,053   164,071  
Total current assets 1,615,870 1,351,271
Property, plant and equipment, net 1,094,877 988,782
Project assets 140,065 131,415
Deferred tax asset, net 157,778 130,515
Marketable securities 164,017 329,608
Restricted cash and investments 81,103 36,494
Investment in related party 25,000 25,000
Goodwill 286,515 286,515
Inventories 30,655 21,695
Other assets 35,435   48,217  
Total assets $ 3,631,315   $ 3,349,512  
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 68,268 $ 75,744
Income tax payable 28,552 8,740
Accrued expenses 183,889 193,277
Current portion of long-term debt 24,465 28,559
Other current liabilities 20,045   88,607  
Total current liabilities 325,219 394,927
Accrued solar module collection and recycling liability 101,757 92,799
Long-term debt 114,168 146,399
Other liabilities 77,925   62,600  
Total liabilities 619,069   696,725  
Stockholders' equity:

Common stock, $0.001 par value per share; 500,000,000 shares authorized; 85,546,131 and 85,208,199 shares issued and outstanding at June 26, 2010 and December 26, 2009, respectively

86 85
Additional paid-in capital 1,694,607 1,658,091
Contingent consideration 1,607 2,844
Accumulated earnings 1,332,750 1,001,363
Accumulated other comprehensive loss (16,804 ) (9,596 )
Total stockholders' equity 3,012,246   2,652,787  
Total liabilities and stockholders' equity $ 3,631,315   $ 3,349,512  

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