Shareholders of First Solar Inc. are reminded of the securities class action lawsuit filed against First Solar and certain of its officers. The class action, (Smilovits v. First Solar, Inc. et al. 12-cv-00555), filed in the United States District Court, District of Arizona, is on behalf of a class consisting of all persons or entities who purchased First Solar securities between April 30, 2008 and February 28, 2012, inclusive (the "Class Period"). This class action is brought under Sections 10(b) and 20(a) of the Securities Exchange Act, 15 U.S.C. Sections 78j(b) and 78t(a); and SEC Rule 10b-5 promulgated thereunder by the SEC, 17 C.F.R. Section 240.10b-5.
First Solar designs and manufactures solar modules. The Company uses a thin film semiconductor technology to manufacture electricity-producing solar modules.The Complaint alleges that, throughout the Class Period, Defendants made false and/or misleading statements, as well as failed to disclose material adverse facts about the Company's business, operations, and prospects. Specifically, Defendants made false and/or misleading statements and/or failed to disclose: (1) the full impact of certain manufacturing flaws on the Company's earnings; (2) the Company was improperly recognizing revenue concerning certain products in its systems business; (3) the Company lacked adequate internal and financial controls; and (4) as a result of the foregoing, the Company's statements were materially false and misleading at all relevant times.
On February 29, 2012, the Company announced its financial results for the fourth quarter and year ended December 31, 2011. Specifically, First Solar reported a decrease of $345 million in net sales for the fourth quarter, as compared to the previous quarter, "primarily due to the timing of revenue recognition in our systems business and lower for module-only sales." In addition, the Company disclosed various charges to earnings, including a charge of $164 million for warranty payments to replace equipment that caused premature power loss in certain panels. The Company spent $125.8 million in the fourth quarter on warranty claims and has put aside $37.5 million to cover future claims.