Summary
First Solar, Inc. (FSLR) announced the sale of its Mesa, Arizona facility on October 3, 2013, with the transaction expected to close in Q4 2013. This facility, originally intended for manufacturing but never commissioned, houses the Company's Operations & Maintenance (O&M) capabilities, certain equipment, and inventory. The sale is strategically important as it will generate over $100 million in net cash proceeds, bolstering liquidity. Additionally, it is projected to reduce annual operating expenses by approximately $10 million, encompassing both depreciation and cash expenditures. Investors should note that the sale will result in a pre-tax loss against book value estimated between $55 million and $60 million, which will be recognized in the third quarter of 2013. Furthermore, the company anticipates incurring relocation costs of $5 million to $10 million, primarily through the end of 2013, for moving personnel, equipment, and inventory. Key O&M functions and about 80 employees will be moved to the company's Tempe, Arizona headquarters.
Key Highlights
- 1First Solar is selling its Mesa, Arizona facility for net cash proceeds exceeding $100 million.
- 2The sale is expected to reduce annual operating expenses by approximately $10 million (including depreciation and cash costs).
- 3A pre-tax loss against book value of $55-$60 million is expected in Q3 2013.
- 4Relocation costs estimated at $5-$10 million will be incurred primarily through the end of 2013.
- 5The Mesa facility was originally designed for manufacturing but was never commissioned.
- 6Operations & Maintenance (O&M) functions and approximately 80 employees will be relocated to the Tempe, Arizona headquarters.
- 7Manufacturing equipment stored at the Mesa facility remains available for future deployment if market conditions warrant.