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First Solar, Inc. Announces Third Quarter 2010 Financial Results

TEMPE, Ariz.--First Solar, Inc. today announced its financial results for the third quarter ended September 25, 2010. Third quarter 2010 net sales were $797.9 million, an increase of $210.0 million from the second quarter of 2010, primarily due to increased system sales (driven principally by the sale of the 60 megawatt (AC) Sarnia Phase 2 project in Canada), partially offset by a decline in our module average selling prices and lower blended euro exchange rates. Quarterly net sales grew 66% from $480.9 million in the third quarter of 2009, due to increased systems revenue and module production volumes, partially offset by a decline in our module average selling prices and lower blended euro exchange rates.

“Our investment in research and development combined with plans to nearly double our manufacturing capacity will help us meet robust customer demand while continuing to drive down the cost of solar power.”

Third quarter net income per fully diluted share was $2.04, up from $1.84 in the second quarter of 2010 and up from $1.79 in the third quarter of 2009. The third quarter net income includes a one-time tax expense of $14.7 million, or $0.17 per fully diluted share, relating to the Company’s decision to repatriate $300 million of earnings from certain of its foreign subsidiaries. Quarter over quarter, the net income increase was primarily driven by higher net sales partially offset by the one-time tax expense. Year over year, the net income increase was primarily driven by higher module production, lower module cost per watt and increased system sales, partially offset by reduced module average selling prices and the above one-time tax expense.

“We continue to execute on our growth strategy and to develop sustainable markets for solar electricity,�?? said Rob Gillette, CEO of First Solar. “Our investment in research and development combined with plans to nearly double our manufacturing capacity will help us meet robust customer demand while continuing to drive down the cost of solar power.�??

For 2010, First Solar projects:

  • Net sales of $2.58 to $2.61 billion, increased from the previous guidance range of $2.5 to 2.6 billion.
  • Earnings per fully diluted share of $7.50 to $7.65, increased from the previous guidance range of $7.00 to $7.40.
  • Total capital spending of $550 to $600 million.
  • Operating cash flow of $595 to $620 million.

First Solar has posted its Third Quarter Earnings Call Presentation, which includes 2010 guidance and additional details regarding the key assumptions relating to this guidance, in the Investors section of its website at www.firstsolar.com.

First Solar will discuss these results and the outlook for 2010 in a conference call scheduled for today at 4:30 p.m. EDT. 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, November 2, 2010 at 7:30 p.m. EDT 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 8458462. 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. If you are a subscriber of FactSet or Thomson One, you can obtain a written transcript approximately two hours after the conclusion of the call.

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 Nine Months Ended

 

September 25,
2010 		  September 26,
2009 		September 25,
2010 		  September 26,
2009
Net sales $ 797,899 $ 480,851 $ 1,953,714 $ 1,424,935
Cost of sales 476,007   235,858   1,065,592   646,562  
Gross profit 321,892 244,993 888,122 778,373
Operating expenses:
Research and development 21,472 24,136 67,196 54,445
Selling, general and administrative 84,961 53,990 230,422 176,231
Production start-up 3,821   4,076   7,252   12,809  
Total operating expenses 110,254   82,202   304,870   243,485  
Operating income 211,638 162,791 583,252 534,888
Foreign currency (loss) gain (1,001 ) 114 (4,322 ) 2,187
Interest income 2,658 2,398 11,341 6,449
Interest expense, net — (89 ) (6 ) (4,851 )
Other expense, net (380 ) (247 ) (1,553 ) (2,676 )
Income before income taxes 212,915 164,967 588,712 535,997
Income tax expense 36,046   11,623   80,455   37,479  
Net income $ 176,869   $ 153,344   $ 508,257   $ 498,518  
Net income per share:
Basic $ 2.08   $ 1.82   $ 5.99   $ 5.99  
Diluted $ 2.04   $ 1.79   $ 5.88   $ 5.88  

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

Basic 85,072   84,179   84,810   83,196  
Diluted 86,610   85,892   86,368   84,724  
 

FIRST SOLAR, INC. AND SUBSIDIARIES

 

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except share data)

(Unaudited)

       

 

September 25,
2010 		December 26,
2009
ASSETS
Current assets:
Cash and cash equivalents $ 621,216 $ 664,499
Marketable securities and investments 212,200 120,236
Accounts receivable trade, net 316,172 226,826
Accounts receivable, unbilled 148,452 58
Inventories 184,006 152,821
Project assets 109 1,081
Deferred tax assets, net 256 21,679
Prepaid expenses and other current assets 132,430   164,071  
Total current assets 1,614,841 1,351,271
Property, plant and equipment, net 1,244,598 988,782
Project assets 296,521 131,415
Deferred tax assets, net 257,683 130,515
Marketable securities 163,546 329,608
Restricted cash and investments 95,024 36,494
Investment in related party 25,000 25,000
Goodwill 433,288 286,515
Inventories 36,380 21,695
Other assets 34,890   48,217  
Total assets $ 4,201,771   $ 3,349,512  
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 71,135 $ 75,744
Income tax payable 17,612 8,740
Accrued expenses 282,832 193,277
Current portion of long-term debt 26,639 28,559
Other current liabilities 59,560   88,607  
Total current liabilities 457,778 394,927
Accrued solar module collection and recycling liability 128,664 92,799
Long-term debt 223,756 146,399
Other liabilities 90,227   62,600  
Total liabilities 900,425   696,725  
Stockholders' equity:

Common stock, $0.001 par value per share; 500,000,000
 shares authorized; 85,710,763 and 85,208,199 shares
 issued and outstanding at September 25, 2010 and
 December 26, 2009, respectively

86 85
Additional paid-in capital 1,820,268 1,658,091
Contingent consideration 1,607 2,844
Accumulated earnings 1,509,619 1,001,363
Accumulated other comprehensive loss (30,234 ) (9,596 )
Total stockholders' equity 3,301,346   2,652,787  
Total liabilities and stockholders' equity $ 4,201,771   $ 3,349,512 Â