FIRST SOLAR, INC. (NASDAQ:FSLR) Files An 8-K Costs Associated with Exit or Disposal Activities

ME Staff
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FIRST SOLAR, INC. (NASDAQ:FSLR) Files An 8-K Costs Associated with Exit or Disposal Activities

Item 2.05. Costs Associated with Exit or Disposal Activities

The information set forth in Item 2.06 of this Current Report on
Form 8-K is incorporated by reference into this Item 2.05.
Item 2.06. Material Impairments
On November 10, 2016, the Board of Directors of First Solar, Inc.
(First Solar or the Company) approved a set of initiatives
intended to accelerate the Companys transition to Series 6 module
manufacturing and restructure its operations in order to reduce
costs and align the Companys organization with its long-term
strategic plan. Accordingly, the Company expects to upgrade and
replace its existing manufacturing fleet over time with Series 6
manufacturing equipment, thereby enabling the production of solar
modules with a larger form factor, better product attributes, and
a lower cost structure. These initiatives to accelerate
production of a more competitive product were approved in light
of the current market environment, which is characterized by
decreases in demand, increases in sector manufacturing capacity,
and declines in module average selling prices.
The restructuring and related initiatives are expected to result
in pre-tax charges between $500 million and $700 million,
including: (i) between $350 million and $450 million in asset
impairments and other charges related to Series 4 and Series 5
manufacturing equipment at the Companys Perrysburg, Ohio and
Kulim, Malaysia manufacturing facilities and the cancellation of
open purchase orders; (ii) between $125 million and $135 million
in asset impairments and other charges related to stored Series 4
manufacturing equipment originally intended for use in previously
planned manufacturing capacity expansions; (iii) between $10
million and $15 million in employee severance charges; (iv) up to
$80 million of goodwill impairments; and (v) between $15 million
and $20 million of other charges associated with these actions.
Such pre-tax restructuring and asset impairment charges are
expected to have an offsetting tax benefit between $50 million
and $100 million.
As part of these initiatives, First Solar will substantially
reduce its workforce at its domestic and international
manufacturing facilities. These actions, combined with additional
reductions in administrative and other staff, are expected to
reduce First Solars workforce by approximately 1,600 associates,
or 27% of its approximately 6,000 global total.
The above-referenced charges will be incurred primarily in the
fourth quarter of 2016 with remaining amounts being incurred in
2017 and 2018. Of these expected charges, between $70 million and
$100 million are expected to result in cash expenditures.
Item 7.01. Regulation FD Disclosure
On November 16, 2016, First Solar issued a press release
regarding the above-referenced initiatives and updated 2016
guidance and full-year 2017 guidance, and will hold a conference
call regarding these initiatives and such guidance. A copy of the
press release is furnished as Exhibit 99.1 to this Form 8-K.
The information in this Item 7.01 of Form 8-K and in Exhibit 99.1
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 filing.
Item 9.01. Financial Statements and Exhibits
(d) Exhibits.
Exhibit Number
Description
99.1
Press Release of First Solar, Inc. dated November 16,
2016


About FIRST SOLAR, INC. (NASDAQ:FSLR)

First Solar, Inc. is a provider of photovoltaic (PV) solar energy solutions. The Company designs, manufactures and sells PV solar modules with thin-film semiconductor technology, and also develops, designs, constructs and sells PV solar power solutions. The Company operates through two segments: components and systems. The Company’s components segment designs, manufactures and sells solar modules, which convert sunlight into electricity. The Company’s systems segment provides PV solar power systems or solar solutions for systems, which use the Company’s solar modules. The Company provides operations and maintenance (O&M) services to plant owners that use solar modules manufactured by the Company or by other third-party manufacturers. The Company has approximately 30 manufacturing lines around the world and over 2.8 gigawatts (GW) of annual manufacturing capacity with lines having a production capability of approximately 2,500 modules per day.

FIRST SOLAR, INC. (NASDAQ:FSLR) Recent Trading Information

FIRST SOLAR, INC. (NASDAQ:FSLR) closed its last trading session down -0.37 at 32.82 with 3,594,629 shares trading hands.