First Solar, Inc. Announces Fourth Quarter & Full Year 2015 Financial Results

  • Record annual net sales of $3.6 billion for 2015. Fourth quarter net sales of $942 million.
  • Full year earnings per share of $5.37. Fourth quarter EPS of $1.60.
  • Cash and marketable securities of $1.8 billion, net cash of $1.5 billion.
  • Maintain 2016 EPS guidance at $4.00 to $4.50.
  • Record annual bookings of 3.4GWdc in 2015. 2016 year-to-date bookings of over 160MWdc.

TEMPE, Ariz.--()--First Solar, Inc. (Nasdaq: FSLR) today announced financial results for the fourth quarter and year ended December 31, 2015. Net sales were $942 million in the quarter, a decrease of $329 million from the third quarter of 2015. The decrease in net sales from the prior quarter was primarily attributable to lower revenue from the Desert Stateline project, which achieved initial revenue recognition in the third quarter. In addition, sales of third party module and module plus offerings decreased.

“We exit 2015 with record annual revenues, record new bookings and earnings per share of over five dollars”

The Company reported fourth quarter earnings per share of $1.60, compared to $3.41 in the prior quarter. The decrease in net income from the third quarter was due to lower net sales, a decrease in gross margins and higher operating expenses. In the third quarter, gross margins and operating expenses benefited from a decrease in the Company’s module collection and recycling obligation. Partially offsetting the decrease in net income versus the prior quarter was a benefit from lower tax expense, which resulted from a favorable mix of jurisdictional income.

Cash and marketable securities at the end of the fourth quarter remained at $1.8 billion. Cash flows from operations were $53 million in the fourth quarter.

“We exit 2015 with record annual revenues, record new bookings and earnings per share of over five dollars,” said Jim Hughes, CEO of First Solar. “As we look back to the 2015 targets first provided to investors at our Analyst Day nearly three years ago, we recognize that we have achieved the efficiency, cost per watt and earnings targets outlined at that time. We enter 2016 with tremendous technology, a strong pipeline and an ongoing commitment to achieve the long-term objectives we have communicated to our investors.”

The Company maintained 2016 earnings per share guidance of $4.00 to $4.50 and updated forecasted financial items as follows:

2016 Guidance   Prior   Current
Net Sales   $3.9B to $4.1B   $3.8B to $4.0B
Gross Margin %   16% to 18%   17% to 18%
Operating Expenses   $380M to $400M   Unchanged
Operating Income   $260M to $330M   Unchanged
Effective Tax Rate   16% to 18%   Unchanged
Earnings per Share1   $4.00 to $4.50   Unchanged
Net Cash Balance2   $2.0B to $2.3B   $1.9B to $2.2B
Operating Cash Flow3   $500M to $700M   $400M to $600M
Capital Expenditures   $300M to $400M   Unchanged
Shipments   2.9GW to 3.0GW   Unchanged
1 – Includes a gain of approximately $200 million, net of tax, from the expected sale of an equity method investment and share of 8point3 earnings
2 – Cash and marketable securities less expected debt at the end of 2016
3 – Does not include approximately $450 million from the expected sale of an equity method investment treated as an investing cash flow
 

First Solar has scheduled a conference call for today, February 23, 2016 at 4:30 p.m. ET to discuss this announcement. A live webcast of this conference call is available at 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 Tuesday, March 1, 2016 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 8287868. 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 will 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 module and system 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: effects on our financial statements and guidance resulting from pending tax matters; 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 (including estimated future module collection and recycling costs), warranties, solar module efficiency and balance of systems cost reduction roadmaps, restructuring, product reliability, investments in unconsolidated affiliates 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 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," "seek," "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 most recent Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and other reports filed with the SEC.

FIRST SOLAR, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands, except share data)
(Unaudited)

       

December 31,
2015

December 31,
2014
ASSETS
Current assets:
Cash and cash equivalents $ 1,126,826 $ 1,482,054
Marketable securities 703,454 509,032
Accounts receivable trade, net 500,629 135,434
Accounts receivable, unbilled and retainage 59,171 76,971
Inventories 380,424 505,088
Balance of systems parts 136,889 125,083
Deferred project costs 187,940 29,354
Notes receivable, affiliate 1,276 12,487
Prepaid expenses and other current assets 248,977   202,151
Total current assets 3,345,586 3,077,654
Property, plant and equipment, net 1,284,136 1,419,988
PV solar power systems, net 93,741 46,393
Project assets and deferred project costs 1,111,137 810,348
Deferred tax assets, net 357,693 313,891
Restricted cash and investments 333,878 407,053
Investments in unconsolidated affiliates and joint ventures 399,805 255,029
Goodwill 84,985 84,985
Other intangibles, net 110,002 119,236
Inventories 107,759 115,617
Notes receivable, affiliates 17,887 9,127
Other assets 69,722   61,670
Total assets $ 7,316,331   $ 6,720,991
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable $ 337,668 $ 214,656
Income taxes payable 1,330 1,727
Accrued expenses 409,452 388,156
Current portion of long-term debt 38,090 51,399
Billings in excess of costs and estimated earnings 87,942 195,346
Payments and billings for deferred project costs 28,580 60,591
Other current liabilities 57,738   88,664
Total current liabilities 960,800 1,000,539
Accrued solar module collection and recycling liability 163,407 246,307
Long-term debt 251,325 162,074
Other liabilities 392,312   320,584
Total liabilities 1,767,844   1,729,504
Commitments and contingencies
Stockholders’ equity:

Common stock, $0.001 par value per share; 500,000,000 shares authorized; 101,766,797 and
100,288,942 shares issued and outstanding at December 31, 2015 and 2014, respectively

102 100
Additional paid-in capital 2,742,795 2,697,558
Accumulated earnings 2,790,110 2,243,689
Accumulated other comprehensive income 15,480   50,140
Total stockholders’ equity 5,548,487   4,991,487
Total liabilities and stockholders’ equity $ 7,316,331   $ 6,720,991
 

FIRST SOLAR, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
(Unaudited)

       
Three Months Ended
December 31,
Years Ended
December 31,
2015   2014 2015   2014
Net sales $ 942,324 $ 1,007,993 $ 3,578,995 $ 3,391,187
Cost of sales 710,886   699,611   2,659,728   2,566,246  
Gross profit 231,438 308,382 919,267 824,941
Operating expenses:
Research and development 36,728 34,944 130,593 143,969
Selling, general and administrative 62,887 70,968 255,192 253,827
Production start-up   3,249   16,818   5,146  
Total operating expenses 99,615   109,161   402,603   402,942  
Operating income 131,823 199,221 516,664 421,999
Foreign currency loss, net (1,887 ) (1,269 ) (6,868 ) (1,461 )
Interest income 6,072 4,879 22,516 18,030
Interest expense, net (4,180 ) (553 ) (6,975 ) (1,982 )
Other (expense) income, net (1,773 ) 213   (5,502 ) (4,485 )
Income before taxes and equity in earnings of unconsolidated affiliates 130,055 202,491 519,835 432,101
Income tax benefit (expense) 15,290 (10,545 ) 6,156 (31,188 )
Equity in earnings of unconsolidated affiliates, net of tax 18,790   1,372   20,430   (4,949 )
Net income $ 164,135   $ 193,318   $ 546,421   $ 395,964  
Net income per share:
Basic $ 1.62   $ 1.93   $ 5.42   $ 3.96  
Diluted $ 1.60   $ 1.90   $ 5.37   $ 3.90  
Weighted-average number of shares used in per share calculations:
Basic 101,400   100,246   100,886   100,048  
Diluted 102,293   101,509   101,815   101,643  

Contacts

First Solar Investors
Steve Haymore, +1 602-414-9315
stephen.haymore@firstsolar.com
or
First Solar Media
Steve Krum, +1 602-427-3359
steve.krum@firstsolar.com

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