LDK Solar Reports Financial Results for Fourth Quarter of Fiscal 2012
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.
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.