First Solar, Inc. Announces Second Quarter 2014 Financial Results

TEMPE, Ariz.--(BUSINESS WIRE)--

First Solar, Inc. FSLR today announced financial results for the second quarter of 2014. Net sales were $544 million in the quarter, a decrease of $406 million from the first quarter of 2014. The sequential decrease in net sales is primarily attributable to achieving revenue recognition on our Campo Verde project in the prior quarter and project delays in the second quarter which resulted in the deferral of some revenue recognition to the second half of the year.

The Company reported a second quarter GAAP earnings per fully diluted share of $0.04, compared to earnings of $1.10 in the prior quarter. The decrease in net income compared to the prior quarter was due to the aforementioned Campo Verde project sale in the first quarter and project delays, partially offset by lower operating expenses.

Cash and Marketable Securities at the end of the second quarter were approximately $1.3 billion, a decrease of approximately $30 million compared to the prior quarter. Cash flows from operations were $118 million in the second quarter.

The company also maintained its full year 2014 earnings per share guidance of $2.40 to $2.80 and operating cash flow guidance of $300 to $500 million. This guidance is highly dependent on, among other factors, the construction progress and sales process related to certain utility scale power plants. Any changes in expected timing of these activities would defer earnings and operating cash flow to subsequent fiscal periods and result in a substantial impact on these guidance targets.

First Solar also announced a new record cell efficiency of 21.0%, which improves upon the prior record of 20.4% announced earlier this year. This new record represents a milestone as CdTe cell efficiency now exceeds the world records for both multi-crystalline silicon and CIGS thin film technologies.

“While project delays in Q2 resulted in deferring some earnings to later in the year we remain on track to our financial targets for the year and reaffirm our full-year 2014 EPS and operating cash flow guidance,” said Jim Hughes, CEO of First Solar. “In addition I am proud of the execution by the organization as demonstrated by a new record cell efficiency and new bookings of over 800MW_dc.”

First Solar has scheduled a conference call for today, August 5, 2014 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 Monday, August 11, 2014 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 8760188. A replay of the webcast will be available on the Investors section of the Company's web site approximately two hours after the conclusion of the call and 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: 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, warranties, solar module efficiency and balance of systems ("BoS") cost reduction roadmaps, restructuring, product reliability 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 photovoltaic ("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," "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 Annual Report on Form 10-K for the year ended December 31, 2013, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and other reports filed with the SEC.

FIRST SOLAR, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands, except share data) (Unaudited)
				Jun 30, 2014						Dec 31, 2013
ASSETS
Current assets:
Cash and cash equivalents				$	851,346					$	1,325,072
Marketable securities				497,521						439,102
Accounts receivable trade, net				237,924						136,383
Accounts receivable, unbilled and retainage				564,887						521,323
Inventories				385,247						388,951
Balance of systems parts				58,816						133,731
Deferred project costs				312,065						556,957
Deferred tax assets, net				107,265						63,899
Assets held for sale				20,728						132,626
Prepaid expenses and other current assets				134,470						94,720
Total current assets				3,170,269						3,792,764
Property, plant and equipment, net				1,369,659						1,385,084
PV solar power systems, net				48,547						—
Project assets and deferred project costs				1,002,494						720,916
Deferred tax assets, net				245,080						296,603
Restricted cash and investments				370,594						279,441
Goodwill				84,985						84,985
Other intangible assets, net				116,935						117,416
Inventories				124,520						129,664
Other assets				78,932						76,629
Total assets				$	6,612,015					$	6,883,502
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable				$	187,530					$	261,333
Income taxes payable				40,708						6,707
Accrued expenses				294,668						320,077
Current portion of long-term debt				60,838						60,543
Payments and billings for deferred project costs				425,654						642,214
Other current liabilities				201,845						297,187
Total current liabilities				1,211,243						1,588,061
Accrued solar module collection and recycling liability				249,990						225,163
Long-term debt				133,836						162,780
Other liabilities				348,991						404,381
Total liabilities				1,944,060						2,380,385
Commitments and contingencies
Stockholders' equity:
Common stock, $0.001 par value per share; 500,000,000 shares authorized; 100,177,488 and 99,506,941 shares issued and outstanding at June 30, 2014 and December 31, 2013, respectively				100						100
Additional paid-in capital				2,661,120						2,646,022
Accumulated earnings				1,999,306						1,882,771
Accumulated other comprehensive income (loss)				7,429						(25,776		)
Total stockholders' equity				4,667,955						4,503,117
Total liabilities and stockholders' equity				$	6,612,015					$	6,883,502

FIRST SOLAR, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per share amounts) (Unaudited)
				Three Months Ended June 30,											Six Months Ended June 30,
				2014					2013						2014					2013
Net sales				$	544,353				$	519,760					$	1,494,511				$	1,274,965
Cost of sales				451,628					379,662						1,165,075					965,541
Gross profit				92,725					140,098						329,436					309,424
Operating expenses:
Research and development				32,659					30,964						71,432					60,895
Selling, general and administrative				57,667					66,265						116,331					140,730
Production start-up				491					1,392						491					2,768
Restructuring and asset impairments				—					2,381						—					4,728
Total operating expenses				90,817					101,002						188,254					209,121
Operating income				1,908					39,096						141,182					100,303
Foreign currency gain (loss)				21					(1,068		)				(558		)			550
Interest income				4,533					3,405						8,854					8,352
Interest expense, net				(930		)			(875		)				(1,340		)			(1,625		)
Other (expense) income, net				(3,170		)			504						(4,916		)			(329		)
Income before income taxes				2,362					41,062						143,222					107,251
Income tax (benefit) expense				(2,166		)			7,464						26,687					14,511
Net income				$	4,528				$	33,598					$	116,535				$	92,740
Net income per share:
Basic				$	0.05				$	0.38					$	1.17				$	1.05
Diluted				$	0.04				$	0.37					$	1.14				$	1.03
Weighted-average number of shares used in per share calculations:
Basic				100,148					89,201						99,871					88,209
Diluted				101,814					91,142						101,820					90,265