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LDK Solar Reports Financial Results for Third Quarter of Fiscal 2012

December 3, 2012

XINYU CITY, China and SUNNYVALE, Calif., Dec. 3, 2012 /PRNewswire/ — LDK Solar Co., Ltd. (“LDK Solar”; NYSE: LDK), a leading vertically integrated manufacturer of photovoltaic products, today reported its unaudited financial results for the third quarter ended September 30, 2012.

All financial results are reported in U.S. dollars on a U.S. GAAP basis.

Third Quarter Highlights:

  • Net sales of $291.5 million; and
  • Shipped 230.2 megawatts (MW) of wafers and 161.9 MW of cells and modules in the third quarter.

Net sales for the third quarter of fiscal 2012 were $291.5 million, compared to $235.4 million for the second quarter of fiscal 2012, and $471.9 million for the third quarter of fiscal 2011.

Gross loss for the third quarter of fiscal 2012 was $32.5 million, compared to gross loss of $92.0 million in the second quarter of fiscal 2012, and gross loss of $17.0 million for the third quarter of fiscal 2011.

Gross margin for the third quarter of fiscal 2012 was negative 11.2%, compared to negative 39.1% in the second quarter of fiscal 2012, and negative 3.6% in the third quarter of fiscal 2011.

During the preparation of its third quarter 2012 financial results, LDK Solar’s management determined that an inventory write-down of $37.8 million was required as a result of a continuous drop in the market price for polysilicon, wafers, cells and modules. As a result, gross margin and results from operations were negatively impacted in the third quarter of fiscal 2012.

Loss from operations for the third quarter of fiscal 2012 was $75.7 million, compared to loss from operations of $172.7 million for the second quarter of fiscal 2012, and loss from operations of $77.1 million for the third quarter of fiscal 2011.

Operating margin for the third quarter of fiscal 2012 was negative 26.0% compared to negative 73.4% in the second quarter of fiscal 2012, and negative 16.3% in the third quarter of fiscal 2011.

Income tax benefit for the third quarter of fiscal 2012 was $25.4 million, compared to income tax benefit of $23.7 million in the second quarter of fiscal 2012 and income tax benefit of $1.7 million in the third quarter of fiscal 2011.

Net loss available to LDK Solar’s shareholders for the third quarter of fiscal 2012 was $136.9 million, or a loss of $1.08 per diluted ADS, compared to net loss of $254.3 million, or a loss of $2.00 per diluted ADS for the second quarter of fiscal 2012 and net loss of $114.5 million, or a loss of $0.87 per diluted ADS for the third quarter of fiscal 2011. The number of shares for calculating diluted ADS was approximately 127.2 million for the third quarter of fiscal 2012.

LDK Solar ended the third quarter of fiscal 2012 with $111.9 million in cash and cash equivalents and $340.7 million in short-term pledged bank deposits.

“We were pleased to deliver third quarter results that were in line with expectations,” stated Xingxue Tong, President and CEO of LDK Solar. “While we saw improvement to our top and bottom line in the third quarter, our results continue to reflect the industry-wide pricing pressure and demand weakness that is negatively impacting the entire solar supply chain.”

“Over the past several weeks, we have taken a number of steps to increase operating efficiencies and improve our liquidity, including realigning the management team and the share purchase agreement with Heng Rui Xin Energy. We are making progress on our strategy to streamline operations, prudently manage expenses and diversify our business. We plan to continue to actively manage our business to adapt to market developments and position the company for future growth,” concluded Mr. Tong.

Business Outlook

The following statements are based upon management’s current expectations. These statements are forward-looking in nature, and the actual results may differ materially. You should read the “Safe Harbor Statement” below with respect to the risks and uncertainties relating to these forward-looking statements.

For the fourth quarter of fiscal 2012, LDK Solar estimates its revenue to be in the range of $230 million to $290 million, wafer shipments between 200 MW and 250 MW, cells and module shipments between 50 MW and 80 MW.

For fiscal 2012, LDK Solar estimates its revenue to be in the range of $950 million to $1 billion, wafer shipments between 910 MW and 960 MW, cell and module shipments between 500 MW and 530 MW and inverter shipments between 150 MW to 200 MW. LDK Solar expects PV system project construction to be in the range of 200 MW to 300 MW and to recognize between 50 MW and 100 MW through project sales and EPC services for third party customers.

Conference Call Details

The LDK Solar Third Quarter 2012 teleconference and webcast is scheduled to begin at 8:00 a.m. Eastern Time (ET), on December 3, 2012. To listen to the live conference call, please dial 877-941-1427 (within U.S.) or 480-629-9664 (outside U.S.) at 8:00 a.m. ET on December 3, 2012. An audio replay of the call will be available through December 13, 2012, by dialing 800-406-7325 (within U.S.) or 303-590-3030 (outside U.S.) and entering the pass code 4574985#.

A live webcast of the call will be available on the company’s investor relations website at http://investor.ldksolar.com.

                                                                                        LDK Solar Co., Ltd.
                                                                     Unaudited Condensed Consolidated Balance Sheet Information
                                                                                            (In US$'000)

                                                                                                                                           09/30/2012                              06/30/2012
                                                                                                                                           ----------                              ----------
    Assets
    Current assets
        Cash and cash equivalents                                                                                                             111,859                                 296,193
        Pledged bank deposits                                                                                                                 340,651                                 523,383
        Trade accounts and bills receivable, net                                                                                              290,211                                 342,174
        Inventories                                                                                                                           324,512                                 467,148
        Prepayments to suppliers, net                                                                                                          27,085                                  37,035
        Other current assets                                                                                                                  346,972                                 350,320
                                                                                                                                              -------                                 -------
    Total current assets                                                                                                                    1,441,290                               2,016,253
    Property, plant and equipment, net                                                                                                      3,658,189                               3,728,797
    Deposits for purchases of property, plant and equipment                                                                                   159,898                                 169,442
      and land use rights
    Land use rights                                                                                                                           282,978                                 285,214
    Prepayments to suppliers expected to be utilized beyond                                                                                     8,701                                   9,519
      one year, net
    Pledged bank deposits - non-current                                                                                                        30,820                                  30,713
    Investments in associates                                                                                                                  11,035                                  11,893
    Other non-current assets                                                                                                                  170,438                                 149,407
                                                                                                                                              -------                                 -------
    Total assets                                                                                                                            5,763,349                               6,401,238
                                                                                                                                            =========                               =========

    Liabilities and equity
    Current liabilities
        Short-term borrowings and current installments of                                                                                   2,206,374                               2,430,973
           long-term borrowings and short-term PRC notes
        Trade accounts and bills payable                                                                                                    1,043,623                               1,032,861
        Advance payments from customers, current
           installments                                                                                                                       129,838                                 181,823
        Accrued expenses and other payables                                                                                                   782,124                                 783,859
        Convertible senior notes, less debt discount - current                                                                                 23,766                                  23,755
        Other financial liabilities                                                                                                            64,220                                  65,221
                                                                                                                                               ------                                  ------
    Total current liabilities                                                                                                               4,249,945                               4,518,492

    Long-term borrowings, excluding current installments                                                                                      645,367                                 854,172
      and long-term PRC notes
    RMB-denominated US$-settled senior notes, less debt
      discount and Convertible senior notes - non-current                                                                                     257,228                                 257,870
    Advance payments from customers - non-current                                                                                              50,219                                 101,033
    Other liabilities                                                                                                                         215,655                                 223,055
                                                                                                                                              -------                                 -------
    Total liabilities                                                                                                                       5,418,414                               5,954,622
                                                                                                                                            ---------                               ---------

    Redeemable non-controlling interests                                                                                                      299,025                                 254,444
                                                                                                                                              -------                                 -------

    Equity

    Total LDK Solar Co., Ltd. shareholders' equity                                                                                             29,697                                 171,917
    Non-controlling interests                                                                                                                  16,213                                  20,255
                                                                                                                                               ------                                  ------

    Total equity                                                                                                                               45,910                                 192,172
                                                                                                                                               ------                                 -------

    Total liabilities and equity                                                                                                            5,763,349                               6,401,238
                                                                                                                                            =========                               =========
                               LDK Solar Co., Ltd.
     Unaudited Condensed Consolidated Statements of Operations Information
                        (In US$'000, except per ADS data)

                                                               For the 3 Months
                                                             Ended
                                                09/30/2012                      06/30/2012

    Net sales                                      291,520                         235,361
    Cost of goods sold                            (324,048)                       (327,356)
                                                  --------                        --------
    Gross loss                                     (32,528)                        (91,995)
    Selling expenses                               (10,373)                        (11,043)
    General and
     administrative
     expenses                                      (29,518)                        (34,410)
    Research and
     development expenses                           (3,300)                         (4,707)
    Impairment loss for property,
     plant and
     equipment                                           -                         (30,504)
                                                       ---                         -------
    Total operating
     expenses                                      (43,191)                        (80,664)
                                                   -------                         -------
    Loss from operations                           (75,719)                       (172,659)
    Other income (expenses):
       Interest income                               4,477                           3,414
       Interest expense and
        amortization of debt                       (61,045)                        (75,547)
        issuance costs and debt discount
       Foreign currency
        exchange gain (loss),
        net                                          1,339                          (6,913)
       Others, net                                   9,619                            (435)
                                                     -----                            ----
    Loss before income tax                        (121,329)                       (252,140)
    Income tax benefit                              25,396                          23,707
                                                    ------                          ------
    Net loss                                       (95,933)                       (228,433)
    Loss attributable to
     non-controlling                                 3,925                           1,037
      interests
    Loss attributable to
     redeemable non-                                 6,222                           6,082
      controlling interests
    Net loss attributable
     to LDK Solar Co.,
     Ltd.                                          (85,786)                       (221,314)
      shareholders

    Accretion to
     redemption value of                           (51,157)                        (33,027)
      redeemable non-controlling
       interests
                                                                                       ---
    Net loss available to
     LDK Solar Co., Ltd.                          (136,943)                       (254,341)
      shareholders
                                                                                       ---

    Net lossper ADS,
     Diluted                                        $(1.08)                         $(2.00)
                                                    ------                          ------

                   Unaudited Condensed Consolidated Statement
                       of Comprehensive Income Information

                                                   (95,933)                       (228,433)
    Net loss
    Other comprehensive loss
    Foreign currency
     exchange translation                           (7,033)                         (6,486)
      adjustment, net of nil tax
    Fair value changes in
     available-for-sale
     equity                                           (930)                         (2,693)
      security, net of tax effect
    Comprehensive loss                            (103,896)                       (237,612)
    Less: comprehensive
     loss attributable to                           (3,663)                         (1,368)
      noncontrolling interests
    Less: comprehensive
     loss attributable to                           (6,576)                         (6,801)
      redeemable noncontrolling
       interests

    Comprehensive loss
     attributable to LDK                           (93,657)                       (229,443)
      Solar Co., Ltd. shareholders

About LDK Solar (NYSE: LDK)

LDK Solar Co., Ltd. (NYSE: LDK) is a leading vertically integrated manufacturer of photovoltaic (PV) products. LDK Solar manufactures polysilicon, mono and multicrystalline ingots, wafers, cells, modules, systems, power projects and solutions. LDK Solar’s headquarters and principal manufacturing facilities are located in Hi-Tech Industrial Park, Xinyu City, Jiangxi Province in the People’s Republic of China. LDK Solar’s office in the United States is located in Sunnyvale, California. For more information about LDK Solar and its products, please visit www.ldksolar.com.

Safe Harbor Statement

This press release contains forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact in this press release are forward-looking statements, including but not limited to, LDK Solar’s ability to raise additional capital to finance its operating activities, the effectiveness, profitability and marketability of its products, the future trading of its securities, the ability of LDK Solar to operate as a public company, the period of time during which its current liquidity will enable LDK Solar to fund its operations, its ability to protect its proprietary information, the general economic and business environment and conditions, the volatility of LDK Solar’s operating results and financial condition, its ability to attract and retain qualified senior management personnel and research and development staff, its ability to timely and efficiently complete its ongoing projects, and other risks and uncertainties disclosed in LDK Solar’s filings with the Securities and Exchange Commission. These forward-looking statements involve known and unknown risks and uncertainties and are based on information available to LDK Solar’s management as of the date hereof and on its current expectations, assumptions, estimates and projections about LDK Solar and the PV industry. Actual results may differ materially from the anticipated results because of such and other risks and uncertainties. LDK Solar undertakes no obligation to update forward-looking statements to reflect subsequent events or circumstances, or changes in its expectations, assumptions, estimates and projections except as may be required by law.

SOURCE LDK Solar Co., Ltd.


Source: PR Newswire