10-KPeriod: FY2020

FIRST SOLAR, INC. Annual Report, Year Ended Dec 31, 2020

Filed February 26, 2021For Securities:FSLR

Summary

First Solar, Inc. (FSLR) filed its 2020 10-K on February 26, 2021, reporting on its financial and operational performance for the year ended December 31, 2020. The company is a leading global provider of photovoltaic (PV) solar energy solutions, focusing on thin-film semiconductor technology. The report highlights a strategic shift in its business, with planned sales of its North American O&M operations and U.S. project development business, aimed at focusing on its core module manufacturing capabilities and optimizing its business structure. Financially, net sales decreased by 11% to $2.7 billion compared to 2019, primarily due to the completion of large projects in the prior year. However, gross profit margin significantly improved to 25.1% from 17.9% in 2019, driven by higher gross profit on third-party module sales and improved manufacturing throughput from the ramp-up of its Series 6 module technology. The company also reported a net income of $398.4 million for 2020, a substantial turnaround from a net loss in 2019, largely influenced by a significant litigation settlement recorded in 2019.

Financial Highlights

54 data points
Beta

Revenue

$2.71B

25.1% Gross Margin

Net Income

$398.36M

14.7% Net Margin

EPS (Diluted)

$3.73

Total Assets

$7.11B

Cash & Equivalents

$1.23B

Free Cash Flow

-$379.51M

Financial Statements
Beta
Revenue$2.71B
Cost of Revenue$2.03B
Gross Profit$680.67M
R&D Expenses$93.74M
SG&A Expenses$222.92M
Operating Expenses$363.18M
Operating Income$317.49M
Interest Expense$24.04M
Net Income$398.36M
EPS (Basic)$3.76
EPS (Diluted)$3.73
Shares Outstanding (Basic)105.87M
Shares Outstanding (Diluted)106.69M

Key Highlights

  • 1Net sales decreased by 11% to $2.7 billion in 2020 from $3.1 billion in 2019, attributed to project completions in the prior year.
  • 2Gross profit margin improved significantly to 25.1% in 2020, up from 17.9% in 2019, driven by higher module sales profitability and manufacturing efficiencies.
  • 3The company achieved net income of $398.4 million in 2020, a significant recovery from a net loss of $114.9 million in 2019, partly due to litigation settlements.
  • 4First Solar is strategically divesting its North American O&M operations and U.S. project development business to focus on its core module manufacturing and technology.
  • 5Manufacturing capacity for Series 6 modules expanded, with 6.3 GWDC of installed nameplate production capacity by year-end 2020, a 59% increase in Series 6 module production from 2019.
  • 6The company continues to invest in R&D to improve module efficiency, lower costs, and maintain its technological edge against competitors.

Frequently Asked Questions

First Solar is strategically selling its North American Operations & Maintenance (O&M) operations and its U.S. project development business. This move is intended to allow the company to focus on its core competency in designing and manufacturing advanced thin-film PV solar modules.

Net sales decreased by 11% to $2.7 billion in 2020 compared to $3.1 billion in 2019. However, profitability improved significantly, with gross profit margin increasing to 25.1% from 17.9%. The company also reported a net income of $398.4 million in 2020, a substantial improvement from a net loss in 2019, partly due to a large litigation settlement in the prior year.

The Series 6 module technology represents First Solar's latest generation of flagship modules. The company has significantly ramped up production and capacity for these modules, which offer competitive efficiency, lower manufacturing costs, and improved real-world energy yield compared to crystalline silicon modules. The successful ramp-up of Series 6 production contributed to improved manufacturing throughput and gross profit margin.

Key risks include intense competition in the solar market leading to pricing pressure, potential reduction or expiration of government subsidies and incentives, reliance on a limited number of suppliers for key raw materials, product quality or performance issues, and the inherent uncertainties of global market dynamics and technological advancements.