10-QPeriod: Q1 FY2013

FIRST SOLAR, INC. Quarterly Report for Q1 Ended Mar 31, 2013

Filed May 7, 2013For Securities:FSLR

Summary

First Solar, Inc. (FSLR) reported a significant turnaround in its financial performance for the first quarter of 2013 compared to the same period in 2012. Revenue increased by 52% year-over-year, reaching $755.2 million, driven by strong growth in both the components and systems segments. Notably, the components segment saw a 112% revenue increase due to a substantial rise in module sales volume, while the systems segment grew by 21%, benefiting from increased project construction and completion. The company swung to a net income of $59.1 million ($0.66 per diluted share) from a net loss of $449.4 million ($5.20 per diluted share) in the prior year's first quarter. This improvement was largely attributed to a significant reduction in restructuring charges, lower operating expenses, and improved gross profit margins, which expanded by 7 percentage points. Despite challenges in the competitive solar market, First Solar demonstrates a strengthened financial position and improved operational efficiency.

Financial Highlights

54 data points
Beta

Revenue

$755.21M

22.4% Gross Margin

Net Income

$59.14M

7.8% Net Margin

EPS (Diluted)

$0.66

Total Assets

$6.29B

Cash & Equivalents

$842.75M

Free Cash Flow

-$5.21M

Financial Statements
Beta
Revenue$755.21M
Cost of Revenue$585.88M
Gross Profit$169.33M
R&D Expenses$29.93M
SG&A Expenses$74.47M
Operating Expenses$108.12M
Operating Income$61.21M
Interest Expense$750K
Net Income$59.14M
EPS (Basic)$0.68
EPS (Diluted)$0.66
Shares Outstanding (Basic)87.21M
Shares Outstanding (Diluted)89.38M

Key Highlights

  • 1Revenue increased by 52% to $755.2 million in Q1 2013 compared to Q1 2012.
  • 2The company returned to profitability, reporting a net income of $59.1 million, a substantial improvement from a net loss of $449.4 million in the prior year.
  • 3Gross profit margin improved significantly, increasing by 7.0 percentage points to 22.4%.
  • 4Restructuring charges decreased dramatically from $401.1 million in Q1 2012 to $2.3 million in Q1 2013, contributing to the improved net income.
  • 5Operating expenses (excluding restructuring) decreased by 19% year-over-year, reflecting cost control measures.
  • 6Net cash provided by operating activities turned positive at $66.5 million, a significant improvement from negative $16.1 million in the prior year's quarter.
  • 7Acquisition of Solar Chile in January 2013 and TetraSun in April 2013, indicating strategic growth initiatives.

Frequently Asked Questions

The primary driver was a substantial reduction in restructuring charges, which were significantly higher in Q1 2012 due to previously announced restructuring initiatives. Additionally, improved revenue, lower operating expenses, and better gross profit margins contributed to the company's return to profitability.

Revenue increased by 52% year-over-year, with both segments showing growth. The components segment saw a 112% increase in net sales, driven by a 197% rise in module sales volume, albeit with a 29% decrease in average selling prices. The systems segment's net sales grew by 21%, attributed to increased project construction and milestone completions.

First Solar acknowledges the challenging market characterized by intense pricing competition and overcapacity. However, the company believes its differentiated, vertically integrated business model, focus on utility-scale projects in sustainable markets, and continuous efforts to reduce costs (both module manufacturing and Balance of Systems) position it favorably to navigate these challenges and compete on an economic basis with conventional energy sources.

Yes, First Solar completed two strategic acquisitions: Solar Chile S.A. in January 2013, a Chilean solar project development company, and TetraSun, Inc. in April 2013, a company developing high-efficiency crystalline silicon technology. These acquisitions aim to expand market reach and technological capabilities.