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LDK Solar Reports Financial Results for Fourth Quarter of Fiscal 2012

April 18, 2013

XINYU CITY, China and SUNNYVALE, Calif., April 18, 2013 /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 fourth quarter ended December 31, 2012.

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

Fourth Quarter Highlights:

  • Net sales of $135.9 million; and
  • Shipped 184.7 megawatts (MW) of wafers, 69.1 MW of cells and modules in the fourth quarter.

Net sales for the fourth quarter of fiscal 2012 were $135.9 million, compared to $291.5 million for the third quarter of fiscal 2012, and $420.2 million for the fourth quarter of fiscal 2011.

Gross loss for the fourth quarter of fiscal 2012 was $82.2 million, compared to gross loss of $32.5 million in the third quarter of fiscal 2012, and gross loss of $275.2 million for the fourth quarter of fiscal 2011.

Gross margin for the fourth quarter of fiscal 2012 was negative 60.5%, compared to negative 11.2% in the third quarter of fiscal 2012, and negative 65.5% in the fourth quarter of fiscal 2011.

During the preparation of its fourth quarter 2012 financial results, LDK Solar’s management determined that an inventory write-down of $25.1 million was required as a result of a continuous weakness in market price for polysilicon, wafers, cells, modules and PV projects caused by industry-wide over capacity and much heated market competition. As a result, gross margin and results from operations were negatively impacted in the fourth quarter of fiscal 2012.

Loss from operations for the fourth quarter of fiscal 2012 was $408.7 million, compared to loss from operations of $75.7 million for the third quarter of fiscal 2012, and loss from operations of $531.4 million for the fourth quarter of fiscal 2011. During the fourth quarter of 2012, LDK Solar’s management determined that a provision for doubtful trade receivables and a loss on prepayments of $50.6 million was required in view of the deteriorating solar market which negatively affected our customers and suppliers, of which $12.1 million was incurred in our subsidiary located in Hefei City. The Company also made a non-cash provision totaling $46.7 million for an arbitration decision made against the Company by the China International Economic and Trade Arbitration Commission in favor of Beijing Jingyuntong Technology Co., Ltd..

During the fourth quarter of 2012, LDK Solar’s management made the decision to sell its subsidiary in Hefei, Anhui Province. The assets and liabilities of this Hefei subsidiary were classified as held for sale and liabilities directly associated with assets classified as held for sale respectively, and $74.2 million of impairment loss on assets held for sale was recorded for the excess of carrying amount to fair value less cost to sell. Additionally, LDK Solar’s management determined that an impairment loss for property, plant and equipment of $78.2 million and an impairment loss for goodwill and intangible assets of $26.7 million were required to reflect the decline in solar industry and change of business plan of certain production facilities.

Operating margin for the fourth quarter of fiscal 2012 was negative 300.8% compared to negative 26.0% in the third quarter of fiscal 2012, and negative 126.5% in the fourth quarter of fiscal 2011.

Income tax expense for the fourth quarter of fiscal 2012 was $73.5 million, compared to income tax benefit of $25.4 million in the third quarter of fiscal 2012 and income tax benefit of $45.1 million in the fourth quarter of fiscal 2011. The increase in income tax expense during the fourth quarter of fiscal 2012 was mainly because of a valuation allowance for deferred tax assets.

Net loss available to LDK Solar’s shareholders for the fourth quarter of fiscal 2012 was $517.0 million, or a loss of $3.68 per diluted ADS, compared to net loss of $136.9 million, or a loss of $1.08 per diluted ADS for the third quarter of fiscal 2012 and net loss of $588.7 million, or a loss of $4.63 per diluted ADS for the fourth quarter of fiscal 2011. The weighted average number of shares for calculating diluted ADS was approximately 140.4 million for the fourth quarter of fiscal 2012.

LDK Solar ended the fourth quarter of fiscal 2012 with $98.3 million in cash and cash equivalents and $167.2 million in short-term pledged bank deposits.

“Our business continued to be affected by the significant challenges that remained pervasive throughout the solar industry,” stated Xingxue Tong, President and CEO of LDK Solar. “Our fourth quarter results reflect the industry-wide overcapacity and resulting pressure to ASP’s and margins. Amidst these challenging market conditions, we are dedicated to working closely with our stakeholders and the relevant governmental agencies to adapt our strategy to position LDK Solar for recovery and long-term growth.

“In 2013, we are focused on emerging solar markets in China, Africa, India and the United States. We believe these markets represent the strongest growth potential. We will also continue to focus on improving our cost structure by further driving down production costs and tightly managing our operating expenses. While the weak demand environment is expected to persist in the near-term, we continue to believe that the considerable opportunities to meet global energy needs with solar power will drive long-term market 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 first quarter of fiscal 2013, LDK Solar estimates its revenue to be in the range of $80 million to $100 million, wafer shipments between 260 MW and 270 MW and cell and module shipments between 30 MW and 40 MW.

Conference Call Details
The LDK Solar Fourth Quarter 2012 teleconference and webcast is scheduled to begin at 8:00 a.m. Eastern Time (ET), on April 18, 2013. 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 April 18, 2013. An audio replay of the call will be available through April 28, 2013, by dialing 800-406-7325 (within U.S.) or 303-590-3030 (outside U.S.) and entering the pass code 4610990#.

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)

                                                                                                                           12/31/2012      09/30/2012
                                                                                                                       --------------  --------------

    Assets

    Current assets

        Cash and cash equivalents                                                                                              98,283         111,859

        Pledged bank deposits                                                                                                 167,185         340,651

        Trade accounts and bills receivable, net                                                                              183,767         290,211

        Inventories                                                                                                           270,812         324,512

        Prepayments to suppliers, net                                                                                          81,278          27,085

        Assets classified as held for sale                                                                                    646,965               -

        Other current assets                                                                                                  241,402         346,972
                                                                                                                              -------         -------

    Total current assets                                                                                                    1,689,692       1,441,290

    Property, plant and equipment, net                                                                                      3,089,802       3,658,189

    Deposits for purchases of property, plant and equipment and land use rights

                                                                                                                              159,277         159,898

    Land use rights                                                                                                           243,084         282,978

    Prepayments to suppliers expected to be utilized beyond one year, net

                                                                                                                                7,978           8,701

    Pledged bank deposits - non-current                                                                                        17,845          30,820

    Investments in associates                                                                                                  11,078          11,035

    Other non-current assets                                                                                                   55,825         170,438
                                                                                                                               ------         -------

    Total assets                                                                                                            5,274,581       5,763,349
                                                                                                                            =========       =========

    Liabilities and equity

    Current liabilities

        Short-term borrowings and current installments of long-term borrowings and short-term PRC notes

                                                                                                                            2,091,660       2,206,374

        Trade accounts and bills payable                                                                                      702,857       1,043,623

        Advance payments from customers, current installments

                                                                                                                              246,115         129,838

        Accrued expenses and other payables                                                                                   716,978         782,124

        Liabilities directly associated with assets classified as held for sale                                               632,546               0

        Convertible senior notes, less debt discount                                                                           23,779          23,766

        Other financial liabilities                                                                                            77,489          64,220
                                                                                                                               ------          ------

    Total current liabilities                                                                                               4,491,424       4,249,945

    Long-term borrowings, excluding current installments and long-term PRC notes

                                                                                                                              409,215         645,367

    RMB-denominated US$-settled senior notes, less debt discount                                                              259,513         257,228

    Advance payments from customers - non-current                                                                              43,700          50,219

    Other liabilities                                                                                                         214,227         215,655
                                                                                                                              -------         -------

    Total liabilities                                                                                                       5,418,079       5,418,414
                                                                                                                            ---------       ---------

    Redeemable non-controlling interests                                                                                      323,294         299,025
                                                                                                                              -------         -------

    Equity

    Total LDK Solar Co., Ltd. shareholders' equity                                                                           (452,729)         29,697

    Non-controlling interests                                                                                                 (14,063)         16,213
                                                                                                                              -------          ------

    Total equity                                                                                                             (466,792)         45,910
                                                                                                                             --------          ------

    Total liabilities and equity                                                                                            5,274,581       5,763,349
                                                                                                                            =========       =========
                           LDK Solar Co., Ltd.

    Unaudited Condensed Consolidated Statements of Operations Information

                    (In US$'000, except per ADS data)

                                              For the 3 Months Ended

                                                12/31/2012                09/30/2012

    Net sales                                      135,898                   291,520

    Cost of goods sold                            (218,136)                 (324,048)
                                                  --------                  --------

    Gross loss                                     (82,238)                  (32,528)

    Selling expenses                               (14,424)                  (10,373)

    General and administrative
     expenses                                     (130,057)                  (29,518)

    Research and development
     expenses                                       (2,926)                   (3,300)

    Impairment loss for goodwill and
     intangible assets

                                                   (26,743)                        -

    Impairment loss for assets
     held for sales                                (74,178)                        -

    Impairment loss for property, plant and
     equipment

                                                   (78,170)                        -
                                                   -------                       ---

    Total operating expenses                      (326,498)                  (43,191)
                                                  --------                   -------

    Loss from operations                          (408,736)                  (75,719)

    Other income (expenses):

       Interest income                               1,876                     4,477

       Interest expense and
        amortization of debt
        issuance costs and debt
        discount                                   (56,574)                  (61,045)

       Foreign currency exchange
        (loss) gain, net                            (1,838)                    1,339

       Others, net                                  24,074                     9,619
                                                    ------                     -----

    Loss before income tax                        (441,198)                 (121,329)

    Income tax (expense) benefit                   (73,547)                   25,396
                                                   -------                    ------

    Net loss                                      (514,745)                  (95,933)

    Loss attributable to non-controlling
     interests

                                                    29,515                     3,925

    Loss attributable to
     redeemable non-controlling
     interests                                      22,162                     6,222
                                                    ------                     -----

    Net loss attributable to LDK
     Solar Co., Ltd.
     shareholders                                 (463,068)                  (85,786)

    Accretion to redemption
     value of redeemable non-
     controlling interests                         (53,954)                  (51,157)
                                                   -------                   -------

    Net loss available to LDK
     Solar Co., Ltd.
     shareholders                                 (517,022)                 (136,943)
                                                  ========                  ========

    Net loss per ADS, Diluted                       $(3.68)                   $(1.08)
                                                    ------                    ------

              Unaudited Condensed Consolidated Statement

                 of Comprehensive Income Information

                                                  (514,745)                  (95,933)

    Net loss
                                                                                 ---

    Other comprehensive loss

    Foreign currency exchange
     translation adjustment, net
     of nil tax                                     12,404                    (7,033)

    Fair value changes in
     available-for-sale equity
     security, net of tax effect                      (351)                     (930)
                                                      ----                      ----

    Comprehensive loss                            (502,692)                 (103,896)

    Less: comprehensive loss
     attributable to
     noncontrolling interests                      (29,620)                   (3,663)

    Less: comprehensive loss
     attributable to redeemable
     noncontrolling interests                      (20,936)                   (6,576)
                                                   -------                    ------

    Comprehensive loss
     attributable to LDK Solar
     Co., Ltd. shareholders                       (452,136)                  (93,657)
                                                  ========                   =======

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