FIRST SOLAR, INC. Reports Operating Results (10-Q)

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Nov 01, 2010
FIRST SOLAR, INC. (FSLR, Financial) filed Quarterly Report for the period ended 2010-09-25.

First Solar, Inc. has a market cap of $11.65 billion; its shares were traded at around $137.68 with a P/E ratio of 18.7 and P/S ratio of 5.6. FSLR is in the portfolios of Louis Moore Bacon of Moore Capital Management, LP, Ruane Cunniff of Ruane & Cunniff & Goldfarb Inc, Steven Cohen of SAC Capital Advisors, George Soros of Soros Fund Management LLC, RS Investment Management, Jean-Marie Eveillard of First Eagle Investment Management, LLC.

Highlight of Business Operations:

On October 15, 2010, we amended our existing revolving credit facility. The amended and restated agreement increases the aggregate amount available under this facility from $300.0 million to $600.0 million. Subject to certain conditions, we have the right to request an increase in the aggregate commitments under the credit facility up to $750.0 million. In addition, the term for this facility has been extended from three to five years and will mature in 2015. See also Note 13. "Debt" for further information about this revolving credit facility.

Cash received from customers increased to $1,673.1 million during the nine months ended September 25, 2010 compared with $1,169.3 million during the nine months ended September 26, 2009, primarily due to an increase in net sales from $1,424.9 million during the nine months ended September 26, 2009 to $1,953.7 million during the nine months ended September 25, 2010. The increase in cash received from customers was offset by an increase in cash paid to suppliers and associates to $1,170.1 million during the nine months ended September 25, 2010 from $771.0 million during the nine months ended September 26, 2009, mainly due to an increase in raw material and component purchases, an increase in personnel-related costs due to higher headcount, and other costs supporting our growth. Excess tax benefits from share-based compensation arrangements increased to $102.4 million during the nine months ended September 25, 2010 compared with $9.5 million during the nine months ended September 26, 2009.

Cash used in investing activities was $584.3 million during the nine months ended September 25, 2010, compared with $605.0 million during the nine months ended September 26, 2009. Cash used in investing activities during the nine months ended September 25, 2010 included capital expenditures of $377.1 million, which increased by $166.4 million from $210.8 million during the nine months ended September 26, 2009. The increase in capital expenditures was primarily due to the construction of two new plants adjacent to our existing plants in Malaysia and the expansion of our plants in Perrysburg, Ohio and Frankfurt/Oder, Germany. Also, during the nine months ended September 25, 2010, we increased cash by reducing our investment in marketable securities by $69.5 million and used cash to fund $43.1 million for estimated future end-of-life collection and recycling costs of solar modules that we sold during fiscal 2009. Amounts that we set aside for future solar module collection and recycling costs are deposited in a custodial account, under the name of a trust, with a large bank as investment advisor. Amounts in this account are invested in long-term marketable securities, which we classify as restricted investments on our balance sheet. During the nine months ended September 25, 2010, cash provided by investing activities included principal payments of $61.7 million received on our notes receivable. On July 12, 2010, we completed the acquisition of NextLight Renewable Power in an all cash transaction of $296.5 million, net of cash acquired.

Cash used in investing activities during the nine months ended September 26, 2009 resulted primarily from capital expenditures of $210.8 million, the net purchase of marketable securities of $357.8 million, the net investment in notes receivable of $30.6 million, and an increase in our restricted cash and investments of $4.4 million. Capital expenditures were primarily for the construction of new plants in Malaysia and the expansion of our plant in Perrysburg, Ohio. The increase in our restricted cash and investments was primarily due to the repayment of our term loan with IKB Deutsche Industriebank AG subsequent to September 26, 2009; based on the loan agreement, the amount to be repaid was transferred into a restricted account and was included in our restricted investments as of September 26, 2009.

Cash provided by financing activities during the nine months ended September 25, 2010 resulted primarily from proceeds received from draw downs on our revolving credit agreement of $100.0 million, excess tax benefits from share-based compensation arrangements of $102.4 million, and by cash received from employee stock option exercises of $6.8 million, offset by the repayment of long-term debt of $14.4 million.

of $44.8 million related to the equipment export financing agreement for our Malaysian manufacturing center. Proceeds from the issuance of employee stock options during the nine months ended September 26, 2009 were $4.7 million. Excess tax benefits from share-based compensation arrangements during the nine months ended September 26, 2009 were $9.5 million.

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