First Solar, Inc. Announces Fourth Quarter and Full Year 2020 Financial Results and 2021 Guidance
First Solar, Inc. (Nasdaq: FSLR) today announced financial results for the fourth quarter and year ended December 31, 2020. Net sales for the fourth quarter were $0.6 billion, a decrease of $0.3 billion from the prior quarter. The decrease was primarily a result of higher international project sales in the third quarter, which were partially offset by increased module sales in the fourth quarter.
The Company reported fourth quarter net income per share of $1.08, and full year net income per share of $3.73.
Cash, restricted cash, and marketable securities at the end of the fourth quarter increased to $1.8 billion from $1.7 billion at the end of the prior quarter. The increase was primarily a result of module segment operating cash flows, which were partially offset by capital expenditures and operating expenses.
“Although 2020 was a very challenging year, I’m proud of the way our team responded,” said Mark Widmar, CEO of First Solar. “Despite continued intense competition across the crystalline PV supply chain, and unforeseen challenges related to the pandemic, we are pleased with our financial and operational results in 2020. The momentum that we cultivated in 2020 has continued in 2021 with year-to-date bookings of 1.9 GW.”
Forecasted net sales for 2021 are $2.85 billion to $3.0 billion, which includes $2.45 billion to $2.55 billion of module segment net sales. Operating income is forecasted to be $545 million to $640 million, which includes ramp expense of $5 million to $10 million, production start-up expense of $15 million to $20 million, underutilization losses related to factory upgrades of $40 million, and a pre-tax gain related to the sales of the U.S. project development and North American O&M businesses of approximately $140 million. Forecasted net income per share is $4.05 to $4.75. The year-end 2021 ending net cash balance is projected to be in the range of $1.8 billion to $1.9 billion. The complete 2021 guidance is as follows:
(1) Includes $5 million to $10 million of ramp expense and $40 million of underutilization losses
(2) Includes $15 million to $20 million of production start-up expense
(3) Includes $60 million to $70 million of ramp expense, production start-up expense, and underutilization losses
(4) Includes an approximately $140 million pre-tax gain related to the sales of the U.S. project development and North American O&M businesses
(5) Defined as cash, cash equivalents, marketable securities, and restricted cash less expected debt at the end of 2021
“Since our company’s founding over 20 years ago, the PV industry has been through periods of rapid growth, declining costs, and technology evolutions,” said Mark Widmar, CEO of First Solar. “As one of the few solar companies that both entered and exited this last decade, and the only U.S. headquartered company among the ten largest PV module manufacturers globally, we have continued to adapt our business model to remain competitive and differentiated in a constantly evolving market. As we look into the future, our pace of technological innovation will be critical to our competitive strength, enabling us to leverage our points of differentiation and capture compelling value for our technology.”
Conference Call Details
First Solar has scheduled a conference call for today, February 25, 2021 at 4:30 p.m. ET to discuss this announcement. A live webcast of this conference call and accompanying materials are available at investor.firstsolar.com.
The guidance figures presented above are forward-looking statements that are subject to a variety of assumptions and estimates. Investors are encouraged to listen to the conference call and to review the accompanying materials, which contain more information about First Solar’s 2021 guidance.
An audio replay of the conference call will be available through Thursday, March 11, 2021 and can be accessed by dialing +1 (800) 585-8367 if you are calling from within the United States, or +1 (416) 621-4642 if you are calling from outside the United States, and entering the replay pass code 1671209. A replay of the webcast will also be available on the Investors section of the Company’s website approximately five hours after the conclusion of the call and remain available for 90 days.
FIRST SOLAR, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands, except share data)
(Unaudited)
| December 31, | ||||||||||
| 2020 | 2019 | |||||||||
| ASSETS | ||||||||||
| Current assets: | ||||||||||
| Cash and cash equivalents | $ | 1,227,002 | $ | 1,352,741 | ||||||
| Marketable securities (amortized cost of $519,844 and allowance for credit losses of $121 at December 31, 2020) | 520,066 | 811,506 | ||||||||
| Accounts receivable trade | 269,095 | 476,425 | ||||||||
| Less: allowance for credit losses | (3,009 | ) | (1,386 | ) | ||||||
| Accounts receivable trade, net | 266,086 | 475,039 | ||||||||
| Accounts receivable, unbilled and retainage | 26,673 | 183,473 | ||||||||
| Less: allowance for credit losses | (303 | ) | — | |||||||
| Accounts receivable, unbilled and retainage, net | 26,370 | 183,473 | ||||||||
| Inventories | 567,587 | 443,513 | ||||||||
| Balance of systems parts | 30 | 53,583 | ||||||||
| Project assets | — | 3,524 | ||||||||
| Assets held for sale | 155,685 | — | ||||||||
| Prepaid expenses and other current assets | 251,709 | 276,455 | ||||||||
| Total current assets | 3,014,535 | 3,599,834 | ||||||||
| Property, plant and equipment, net | 2,402,285 | 2,181,149 | ||||||||
| PV solar power systems, net | 243,396 | 476,977 | ||||||||
| Project assets | 373,377 | 333,596 | ||||||||
| Deferred tax assets, net | 104,099 | 130,771 | ||||||||
| Restricted marketable securities (amortized cost of $247,628 and allowance for credit losses of $13 at December 31, 2020) | 265,280 | 223,785 | ||||||||
| Goodwill | 14,462 | 14,462 | ||||||||
| Intangible assets, net | 56,138 | 64,543 | ||||||||
| Inventories | 201,229 | 160,646 | ||||||||
| Other assets | 434,130 | 329,926 | ||||||||
| Total assets | $ | 7,108,931 | $ | 7,515,689 | ||||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||||
| Current liabilities: | ||||||||||
| Accounts payable | $ | 183,349 | $ | 218,081 | ||||||
| Income taxes payable | 14,571 | 17,010 | ||||||||
| Accrued expenses | 310,467 | 351,260 | ||||||||
| Current portion of long-term debt | 41,540 | 17,510 | ||||||||
| Deferred revenue | 188,813 | 323,217 | ||||||||
| Accrued litigation | — | 363,000 | ||||||||
| Liabilities held for sale | 25,621 | — | ||||||||
| Other current liabilities | 83,037 | 28,130 | ||||||||
| Total current liabilities | 847,398 | 1,318,208 | ||||||||
| Accrued solar module collection and recycling liability | 130,688 | 137,761 | ||||||||
| Long-term debt | 237,691 | 454,187 | ||||||||
| Other liabilities | 372,226 | 508,766 | ||||||||
| Total liabilities | 1,588,003 | 2,418,922 | ||||||||
| Commitments and contingencies | ||||||||||
| Stockholders’ equity: | ||||||||||
| Common stock, $0.001 par value per share; 500,000,000 shares authorized; 105,980,466 and 105,448,921 shares issued and outstanding at December 31, 2020 and 2019, respectively | 106 | 105 | ||||||||
| Additional paid-in capital | 2,866,786 | 2,849,376 | ||||||||
| Accumulated earnings | 2,715,762 | 2,326,620 | ||||||||
| Accumulated other comprehensive loss | (61,726 | ) | (79,334 | ) | ||||||
| Total stockholders’ equity | 5,520,928 | 5,096,767 | ||||||||
| Total liabilities and stockholders’ equity | $ | 7,108,931 | $ | 7,515,689 | ||||||
FIRST SOLAR, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
(Unaudited)
| Three Months Ended | Year Ended | ||||||||||||||||||||||||
| December 31, 2020 |
September 30, 2020 |
December 31, 2019 |
December 31, 2020 |
December 31, 2019 |
|||||||||||||||||||||
| Net sales | $ | 609,232 | $ | 927,565 | $ | 1,399,377 | $ | 2,711,332 | $ | 3,063,117 | |||||||||||||||
| Cost of sales | 449,372 | 634,550 | 1,065,822 | 2,030,659 | 2,513,905 | ||||||||||||||||||||
| Gross profit | 159,860 | 293,015 | 333,555 | 680,673 | 549,212 | ||||||||||||||||||||
| Operating expenses: | |||||||||||||||||||||||||
| Selling, general and administrative | 62,700 | 49,861 | 55,643 | 222,918 | 205,471 | ||||||||||||||||||||
| Research and development | 22,670 | 22,972 | 25,427 | 93,738 | 96,611 | ||||||||||||||||||||
| Production start-up | 16,716 | 13,019 | 7,351 | 40,528 | 45,915 | ||||||||||||||||||||
| Litigation loss | — | — | 363,000 | 6,000 | 363,000 | ||||||||||||||||||||
| Total operating expenses | 102,086 | 85,852 | 451,421 | 363,184 | 710,997 | ||||||||||||||||||||
| Operating income (loss) | 57,774 | 207,163 | (117,866 | ) | 317,489 | (161,785 | ) | ||||||||||||||||||
| Foreign currency (loss) income, net | (1,341 | ) | (1,852 | ) | (816 | ) | (4,890 | ) | 2,291 | ||||||||||||||||
| Interest income | 1,446 | 2,109 | 9,663 | 16,559 | 48,886 | ||||||||||||||||||||
| Interest expense, net | (3,018 | ) | (10,975 | ) | (3,048 | ) | (24,036 | ) | (27,066 | ) | |||||||||||||||
| Other (expense) income, net | (3,279 | ) | (3,236 | ) | 21,873 | (11,932 | ) | 17,545 | |||||||||||||||||
| Income (loss) before taxes and equity in earnings | 51,582 | 193,209 | (90,194 | ) | 293,190 | (120,129 | ) | ||||||||||||||||||
| Income tax benefit (expense) | 66,400 | (38,107 | ) | 30,865 | 107,294 | 5,480 | |||||||||||||||||||
| Equity in earnings, net of tax | (2,279 | ) | (65 | ) | (79 | ) | (2,129 | ) | (284 | ) | |||||||||||||||
| Net income (loss) | $ | 115,703 | $ | 155,037 | $ | (59,408 | ) | $ | 398,355 | $ | (114,933 | ) | |||||||||||||
| Net income (loss) per share: | |||||||||||||||||||||||||
| Basic | $ | 1.09 | $ | 1.46 | $ | (0.56 | ) | $ | 3.76 | $ | (1.09 | ) | |||||||||||||
| Diluted | $ | 1.08 | $ | 1.45 | $ | (0.56 | ) | $ | 3.73 | $ | (1.09 | ) | |||||||||||||
| Weighted-average number of shares used in per share calculations: | |||||||||||||||||||||||||
| Basic | 105,976 | 105,967 | 105,425 | 105,867 | 105,310 | ||||||||||||||||||||
| Diluted | 106,944 | 106,751 | 105,425 | 106,686 | 105,310 | ||||||||||||||||||||
Source: First Solar