8-K - FSLR - Equibles

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934

February 20, 2020

Date of Report (Date of earliest event reported)

FIRST SOLAR, INC.

(Exact name of registrant as specified in its charter)

Delaware	001-33156	20-4623678
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

350 West Washington Street, Suite 600

Tempe, Arizona 85281

(Address of principal executive offices, including zip code)

(602) 414-9300

(Registrant’s telephone number, including area code)

Not applicable

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading symbol(s)	Name of each exchange on which registered
Common stock, $0.001 par value	FSLR	The NASDAQ Stock Market LLC

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Item 2.02. Results of Operations and Financial Condition

On February 20, 2020, First Solar, Inc. (the “Company”) issued a press release and held a conference call regarding its financial results for the fourth quarter and year ended December 31, 2019. A copy of the press release is furnished as Exhibit 99.1 to this Form 8-K.

Item 7.01. Regulation FD Disclosure

On February 20, 2020, the Company issued a press release and on the conference call referenced above discussed information regarding its full-year 2020 guidance and a review of options for its U.S. project development business. A copy of the press release is furnished as Exhibit 99.2 to this Form 8-K.

The information in this Form 8-K and in Exhibits 99.1 and 99.2 attached hereto shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liability of that Section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.

Item 9.01. Financial Statements and Exhibits

(d) Exhibits.

Exhibit Number	Description
99.1	Press Release of First Solar, Inc. dated February 20, 2020, “First Solar, Inc. Announces Fourth Quarter & Full-Year 2019 Financial Results”
99.2	Press Release of First Solar, Inc. dated February 20, 2020, “First Solar, Inc. Announces Full-Year 2020 Guidance”
104	Cover Page Interactive Data File (embedded within the Inline XBRL document)

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	FIRST SOLAR, INC.
Date: February 20, 2020	By:	/s/ PAUL KALETA
	Name:	Paul Kaleta
	Title:	Executive Vice President, General Counsel and Secretary

		Exhibit

EXHIBIT 99.1

News Release

First Solar, Inc. Announces Fourth Quarter & Full Year 2019 Financial Results

•	Net sales of $3.1 billion for 2019 and $1.4 billion for the fourth quarter
•	GAAP loss per share of $(1.09) for 2019 and $(0.56) for the fourth quarter
---	---
•	Non-GAAP EPS, adjusting for litigation losses, of $1.48 for 2019
---	---
•	Cash, restricted cash, and marketable securities of $2.3 billion; net cash of $1.8 billion
---	---
•	6.1 GWDC of 2019 net bookings; 0.7 GWDC of 2020 YTD net bookings
---	---

TEMPE, Ariz., February 20, 2020 – First Solar, Inc. (Nasdaq: FSLR) today announced financial results for the fourth quarter and year ended December 31, 2019. Net sales for the fourth quarter were $1.4 billion, an increase of $0.9 billion from the prior quarter. The increase was primarily a result of project sales in the United States and increased module shipments.

The Company reported a fourth quarter GAAP loss per share of $(0.56), compared to GAAP earnings per share (“EPS”) of $0.29 in the prior quarter, and full year GAAP loss per share of $(1.09). On a non-GAAP basis, adjusting for litigation losses and the associated tax effect, the Company reported full year EPS of $1.48.

Cash, restricted cash, and marketable securities at the end of the fourth quarter increased to $2.3 billion from $1.6 billion at the end of the prior quarter. The increase was primarily a result of cash received from project sales in the United States, module sales, and advance payments received for sales of modules prior to the step down of the investment tax credit in the United States.

“Despite our reported loss, I am pleased with the continued execution of our Series 6 roadmap,” said Mark Widmar, CEO of First Solar. “With ongoing improvements in throughput and efficiency across our fleet, strong demand for Series 6, and our pipeline of contracted shipments as far out as 2023, we are well positioned for the future.”

For a reconciliation of the non-GAAP measure presented above to the most directly comparable measure presented in accordance with generally accepted accounting principles in the United States (“GAAP”), see the table below.

First Solar has scheduled a conference call for today, February 20, 2020 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.

An audio replay of the conference call will be available through Thursday, February 27, 2020 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 5717879. 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.

About First Solar, Inc.

First Solar is a leading global provider of comprehensive photovoltaic (“PV”) solar solutions 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 solutions protect and enhance the environment. For more information about First Solar, please visit www.firstsolar.com.

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. All statements in this release, other than statements of historical fact, are forward-looking statements. These forward-looking statements include, but are not limited to, statements concerning: the transition to Series 6 module manufacturing in 2020; net sales, gross margin, operating expenses, operating income, earnings per share, loss per share, net cash balance, capital expenditures, shipments, bookings, products and our business and financial objectives for 2020. 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 and therefore speak only as of the date of this release. 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, whether as a result of new information, future developments or otherwise. 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: structural imbalances in global supply and demand for PV solar modules; the market for renewable energy, including solar energy; our competitive position and other key competitive factors; reduction, elimination, or expiration of government subsidies, policies, and support programs for solar energy projects; the impact of public policies, such as tariffs or other trade remedies imposed on solar cells and modules; our ability to execute on our long-term strategic plans; our ability to execute on our solar module technology and cost reduction roadmaps; our ability to improve the wattage of our solar modules; interest rate fluctuations and both our and our customers’ ability to secure financing; the creditworthiness of our offtake counterparties and the ability of our offtake counterparties to fulfill their contractual obligations to us; the ability of our customers and counterparties to perform under their contracts with us; the satisfaction of conditions precedent in our project sales agreements; our ability to attract new customers and to develop and maintain existing customer and supplier relationships; our ability to successfully develop and complete our systems business projects; our ability to convert existing production facilities to support new product lines, such as Series 6 module manufacturing; general economic and business conditions, including those influenced by U.S., international, and geopolitical events; environmental responsibility, including with respect to cadmium telluride (“CdTe”) and other semiconductor materials; claims under our limited warranty obligations; changes in, or the failure to comply with, government regulations and environmental, health, and safety requirements; effects resulting from pending litigation, including the opt-out action against us; future collection and recycling costs for solar modules covered by our module collection and recycling program; our ability to protect our intellectual property; our ability to prevent and/or minimize the impact of cyber-attacks or other breaches of our information systems; our continued investment in research and development; the supply and price of components and raw materials, including CdTe; our ability to attract and retain key executive officers and associates; and the matters discussed under the captions “Risk Factors” and “Management’s Discussion and Analysis of Financial Conditions and Results of Operations” of our most recent Annual Report on Form 10-K and our subsequently filed Quarterly Reports on Form 10-Q, as supplemented by our other filings with the Securities and Exchange Commission.

Contacts

First Solar Investors

investor@firstsolar.com

First Solar Media

media@firstsolar.com

www.firstsolar.com

FIRST SOLAR, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(In thousands, except share data)

(Unaudited)

	December 31,
	2019			2018
ASSETS
Current assets:
Cash and cash equivalents	$	1,352,741		$	1,403,562
Marketable securities	811,506			1,143,704
Accounts receivable trade, net	475,039			128,282
Accounts receivable, unbilled and retainage	183,473			458,166
Inventories	443,513			387,912
Balance of systems parts	53,583			56,906
Project assets	3,524			37,930
Prepaid expenses and other current assets	276,455			243,061
Total current assets	3,599,834			3,859,523
Property, plant and equipment, net	2,181,149			1,756,211
PV solar power systems, net	476,977			308,640
Project assets	333,596			460,499
Deferred tax assets, net	130,771			77,682
Restricted cash and investments	303,857			318,390
Goodwill	14,462			14,462
Intangible assets, net	64,543			74,162
Inventories	160,646			130,083
Notes receivable, affiliate	—			22,832
Other assets	249,854			98,878
Total assets	$	7,515,689		$	7,121,362
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	218,081		$	233,287
Income taxes payable	17,010			20,885
Accrued expenses	351,260			441,580
Current portion of long-term debt	17,510			5,570
Deferred revenue	323,217			129,755
Accrued litigation	363,000			—
Other current liabilities	28,130			14,380
Total current liabilities	1,318,208			845,457
Accrued solar module collection and recycling liability	137,761			134,442
Long-term debt	454,187			461,221
Other liabilities	508,766			467,839
Total liabilities	2,418,922			1,908,959
Commitments and contingencies
Stockholders’ equity:
Common stock, $0.001 par value per share; 500,000,000 shares authorized; 105,448,921 and 104,885,261 shares issued and outstanding at December 31, 2019 and 2018, respectively	105			105
Additional paid-in capital	2,849,376			2,825,211
Accumulated earnings	2,326,620			2,441,553
Accumulated other comprehensive loss	(79,334		)	(54,466		)
Total stockholders’ equity	5,096,767			5,212,403
Total liabilities and stockholders’ equity	$	7,515,689		$	7,121,362

www.firstsolar.com

FIRST SOLAR, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share amounts)

(Unaudited)

	Three Months Ended									Year Ended
	December 31, <br>2019			September 30, <br>2019			December 31, <br>2018			December 31, <br>2019			December 31, <br>2018
Net sales	$	1,399,377		$	546,806		$	691,241		$	3,063,117		$	2,244,044
Cost of sales	1,065,822			408,443			592,931			2,513,905			1,851,867
Gross profit	333,555			138,363			98,310			549,212			392,177
Operating expenses:
Selling, general and administrative	55,643			53,542			51,338			205,471			176,857
Research and development	25,427			24,912			21,388			96,611			84,472
Production start-up	7,351			18,605			14,576			45,915			90,735
Litigation loss	363,000			—			—			363,000			—
Total operating expenses	451,421			97,059			87,302			710,997			352,064
Operating (loss) income	(117,866		)	41,304			11,008			(161,785		)	40,113
Foreign currency (loss) income, net	(816		)	1,209			1,908			2,291			(570		)
Interest income	9,663			11,454			14,643			48,886			59,788
Interest expense, net	(3,048		)	(4,976		)	(11,476		)	(27,066		)	(25,921		)
Other income (expense), net	21,873			(3,399		)	32,102			17,545			39,737
(Loss) income before taxes and equity in earnings	(90,194		)	45,592			48,185			(120,129		)	113,147
Income tax benefit (expense)	30,865			(15,035		)	4,416			5,480			(3,441		)
Equity in earnings, net of tax	(79		)	65			(485		)	(284		)	34,620
Net (loss) income	$	(59,408	)	$	30,622		$	52,116		$	(114,933	)	$	144,326
Net (loss) income per share:
Basic	$	(0.56	)	$	0.29		$	0.50		$	(1.09	)	$	1.38
Diluted	$	(0.56	)	$	0.29		$	0.49		$	(1.09	)	$	1.36
Weighted-average number of shares used in per share calculations:
Basic	105,425			105,397			104,845			105,310			104,745
Diluted	105,425			106,227			105,819			105,310			106,113

www.firstsolar.com

Non-GAAP Financial Measure

In this release, we provide non-GAAP earnings per share for the year ended December 31, 2019. We have included this non-GAAP financial measure to adjust for losses associated with our class action and opt-out legal proceedings and the associated tax effects. We believe non-GAAP earnings per share, when taken together with the corresponding GAAP financial measure, is relevant and useful information to our investors because it provides them with additional information in assessing our financial operating results independent of the litigation loss described below. Our management uses this non-GAAP financial measure in evaluating our operating performance. However, this measure has limitations, including that it excludes the effect of the $350 million that, subject to court approval, we will pay in cash pursuant to the class action settlement and the amount of costs that we may ultimately have to pay in cash to resolve the opt-out action. As of December 31, 2019, we accrued $13 million of estimated losses for the opt-out action, which represents our best estimate of the lower bound of the costs to resolve this case. The ultimate amount of loss may be materially higher. Accordingly, this non-GAAP financial measure should be considered in addition to, and not as a substitute for, or superior to earnings per share prepared in accordance with GAAP. The following is the reconciliation of earnings per share prepared in accordance with GAAP to non-GAAP earnings per share for the year ended December 31, 2019 (in millions, except per share amounts):

	Year Ended<br><br>December 31, 2019
Net loss	$	(114.9	)
Litigation loss	363.0
Tax effect of litigation loss	(90.9		)
Non-GAAP net income	$	157.2
Weighted-average number of shares used for diluted earnings per share	105.3
GAAP loss per share	$	(1.09	)
Weighted-average number of shares used for diluted earnings per share	106.1
Non-GAAP earnings per share	$	1.48

www.firstsolar.com

		Exhibit

EXHIBIT 99.2

News Release

First Solar, Inc. Announces Full-Year 2020 Guidance

•	Net sales of $2.7 to $2.9 billion
•	EPS of $3.25 to $3.75, inclusive of ramp costs, start-up expenses, Series 4 shutdown costs, and other severance costs of approximately $95 million
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•	Ending net cash of $1.3 to $1.5 billion
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•	Company to review options for its U.S. project development business
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TEMPE, Ariz., February 20, 2020 – First Solar, Inc. (Nasdaq: FSLR) today announced full-year 2020 guidance.

Forecasted net sales for 2020 are $2.7 to $2.9 billion, with third party module net sales expected to comprise approximately 70% of the total net sales. Earnings per share (“EPS”) is forecasted to be between $3.25 and $3.75. The EPS guidance provided is inclusive of production ramp costs of $5 to $15 million, production start-up expenses of $50 to $60 million associated with the deployment of Series 6 capacity in 2020, and approximately $30 million of Series 4 shutdown and other severance costs. The 2020 ending net cash balance is projected to be in the range of $1.3 to $1.5 billion. The complete 2020 guidance is as follows:

	2020 Guidance
Net Sales	$2.7B to $2.9B
Gross Margin % ^(1)^	26% to 27%
Operating Expenses ^(2)^	$340M to $360M
Operating Income ^(3)^	$360M to $420M
Earnings per Share	$3.25 to $3.75
Net Cash Balance ^(4)^	$1.3B to $1.5B
Capital Expenditures	$450M to $550M
Shipments	5.8GW to 6.0GW

——————————

(1)	Includes $5 to $15 million of ramp costs
(2)	Includes $50 to $60 million of plant start-up expense
---	---
(3)	Includes $55 to $75 million of ramp costs and plant start-up expense, and $30 million of Series 4 shutdown and other severance costs
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(4)	Defined as cash, marketable securities, and restricted cash less expected debt at the end of 2020
---	---

First Solar also announced today that it, working together with advisors, is reviewing options for its U.S. project development business.

“First Solar, at its core, is a technology and module manufacturing company,” said Mark Widmar, CEO of First Solar. “Given the significant evolution of developing utility-scale PV projects in the United States, we believe now is an appropriate time to evaluate our options with respect to our U.S. project development business line.”

The consideration of potential options for its U.S. project development business by First Solar is at a preliminary stage and may not result in any transaction being consummated. First Solar does not intend to disclose further developments with respect to this evaluation process except to the extent the process is concluded or it is required by law or otherwise deemed appropriate.

www.firstsolar.com

The guidance figures presented above 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 2020 Guidance.

About First Solar, Inc.

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. All statements in this release, other than statements of historical fact, are forward-looking statements. These forward-looking statements include, but are not limited to, statements concerning: our financial guidance for 2020; the transition to Series 6 module manufacturing in 2020; net sales, gross margin, gross margin percentage, operating expenses, operating income, earnings per share, net cash balance, capital expenditures, shipments, bookings, products; the review of options for our U.S. project development business; and our business and financial objectives for 2020. 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 and therefore speak only as of the date of this release. 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, whether as a result of new information, future developments or otherwise. 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: structural imbalances in global supply and demand for PV solar modules; the market for renewable energy, including solar energy; our competitive position and other key competitive factors; reduction, elimination, or expiration of government subsidies, policies, and support programs for solar energy projects; the impact of public policies, such as tariffs or other trade remedies imposed on solar cells and modules; our ability to execute on our long-term strategic plans; our ability to execute on our solar module technology and cost reduction roadmaps; our ability to improve the wattage of our solar modules; interest rate fluctuations and both our and our customers’ ability to secure financing; the creditworthiness of our offtake counterparties and the ability of our offtake counterparties to fulfill their contractual obligations to us; the ability of our customers and counterparties to perform under their contracts with us; the satisfaction of conditions precedent in our project sales agreements; our ability to attract new customers and to develop and maintain existing customer and supplier relationships; our ability to successfully develop and complete our systems business projects; our ability to convert existing production facilities to support new product lines, such as Series 6 module manufacturing; general economic and business conditions, including those influenced by U.S., international, and geopolitical events; environmental responsibility, including with respect to cadmium telluride (“CdTe”) and other semiconductor materials; claims under our limited warranty obligations; changes in, or the failure to comply with, government regulations and environmental, health, and safety requirements; effects resulting from pending litigation, including the opt-out action against us; future collection and recycling costs for solar modules covered by our module collection and recycling program; our ability to protect our intellectual property; our ability to prevent and/or minimize the impact of cyber-attacks or other breaches of our information systems; our continued investment in research and development; the supply and price of components and raw materials, including CdTe; our ability to attract and retain key executive officers and associates; and the matters discussed under the captions “Risk Factors” and “Management’s Discussion and Analysis of Financial Conditions and Results of

www.firstsolar.com

Operations” of our most recent Annual Report on Form 10-K and our subsequently filed Quarterly Reports on Form 10-Q, as supplemented by our other filings with the Securities and Exchange Commission.

Contacts

First Solar Investors

investor@firstsolar.com

First Solar Media

media@firstsolar.com