XINYU CITY, China and SUNNYVALE, Calif., May 21 /PRNewswire-FirstCall/ -- LDK Solar Co., Ltd. ("LDK Solar") , a leading manufacturer of multicrystalline solar wafers, today reported its unaudited financial results for the first quarter ended March 31, 2009.
All financial results are reported in U.S. dollars on a U.S. GAAP basis. Recent Financial Highlights: -- First quarter 2009 revenue was $283.3 million, up 21.4% year-over-year; -- Secured RMB 200 million loan from China Development Bank and received approval for RMB 1 billion credit line from Agricultural Development Bank of China; -- And shipped 206 MW of wafers, up 72.8% year-over-year.
Net sales for the first quarter of fiscal 2009 were $283.3 million, down 33.6% from $426.6 million for the fourth quarter of fiscal 2008, and up 21.4% from $233.4 million for the first quarter of fiscal 2008.
For the first quarter of fiscal 2009, gross profit was $4.9 million, compared to negative $211.4 million in the fourth quarter of fiscal 2008, and $64.6 million for the first quarter of fiscal 2008.
During the course of the preparation of LDK Solar's 2008 annual report, LDK Solar determined that a further write-down of approximately $87.5 million to its inventories and an additional provision for doubtful recoveries of approximately $12.3 million for its prepayments to suppliers at December 31, 2008 are required to properly adjust previously announced preliminary unaudited financial results for the fourth quarter and fiscal year ended December 31, 2008. In addition, LDK Solar's previously reported unaudited fourth quarter 2008 financial results have been revised to reflect an increase in interest expense from $8.3 million to $9.7 million in the fourth quarter of 2008 due to the adoption and retroactive application of Financial Accounting Standards Board Staff Position Accounting Principles Board 14-1 ("FSP APB 14-1"), "Accounting for Convertible Debt Instruments That May Be Settled in Cash upon Conversion (Including Partial Cash Settlement)". As a result of these, gross loss and loss from operations for fourth quarter of fiscal 2008 were adjusted accordingly.
Gross margin for the first quarter of fiscal 2009 was 1.7%, compared to negative 49.6% in the fourth quarter of fiscal 2008 and 27.7% in the first quarter of fiscal 2008.
Loss from operations for the first quarter of fiscal 2009 was $16.1 million, compared to a loss of $251.6 million for the fourth quarter of 2008, and compared to income from operations of $52.5 million for the first quarter of fiscal 2008.
Operating margin for the first quarter of fiscal 2009 was negative 5.7% compared to negative 59.0% in the fourth quarter of fiscal 2008 and 22.5% in the first quarter of fiscal 2008.
Income tax benefit for the first quarter of fiscal 2009 was $1.6 million, compared to income tax benefit of $30.5 million in the fourth quarter of fiscal 2008.
Net loss for the first quarter of fiscal 2009 was $22.5 million, or $0.21 per diluted ADS, compared to a net loss of $219.0 million, or $2.05 per diluted ADS for the fourth quarter of fiscal 2008.
LDK Solar ended the first quarter of 2009 with $184.4 million in cash and cash equivalents and $114.4 million in short-term pledged bank deposits.
"As expected, the first quarter of 2009 was characterized by a continued challenging operating environment for economies and industries globally, not precluding the solar industry," stated Xiaofeng Peng, Chairman and CEO of LDK Solar. "During the quarter, we remained focused on positioning the company for future growth, while aligning our operations and near-term strategies to be more reflective of the current business conditions.
"Our management team demonstrated a continued focus on monitoring capital spending, enhancing cost savings and managing our cash position in the first quarter. We continue to adjust our expansion plans in order to most effectively reduce near-term capital expenditure outlays and to best align with the decrease in demand seen industry-wide. We continued to ramp polysilicon production in our 1,000 MT polysilicon plant and are pleased with the progress in the construction our 15,000 MT plant and look forward to the increasing cost savings that in-house polysilicon production will afford as our polysilicon production grows," continued Mr. Peng.
"Additionally, we secured a loan for RMB 200 million from China Development Bank and received approval for a RMB 1 billion credit line from Agricultural Development Bank of China in April. We are proud of our ability to enhance our financial resources at a time when credit remains retracted and believe that the support from China reflects their continued commitment to fostering growth within the local solar industry."
"We continue to be confident in our positioning within the solar industry as we believe that our lean cost structure and economies of scale are important differentiators as we pursue our long-term growth strategy," concluded Mr. Peng.
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 second quarter of fiscal 2009, LDK Solar estimates its wafer shipments between 200 MW to 220 MW.
Conference Call Details
The LDK Solar First Quarter 2009 teleconference and webcast is scheduled to begin at 5:00 p.m. Eastern Time (ET), on May 21, 2009. To listen to the live conference call, please dial 877-941-2069 (within U.S.) or 480-629-9713 (outside U.S.) at 4:50 p.m. ET on May 21, 2009. An audio replay of the call will be available through May 23, 2009, by dialing 800-406-7325 (within U.S.) or 303-590-3030 (outside U.S.) and entering the pass code 4069162#.
LDK Solar Co., Ltd. Unaudited Condensed Consolidated Balance Sheets (In US$'000, except share and per share data) 3/31/2009 12/31/2008 --------- ---------- Assets Current assets Cash and cash equivalents 184,382 255,523 Pledged bank deposits 114,358 83,383 Trade accounts receivable 187,157 94,733 Bills receivable 3,291 3,075 Inventories 548,812 616,901 Prepayments to suppliers, net 140,953 71,214 Other current assets 105,490 68,123 Deferred income tax assets, net 47,560 44,690 ------ ------ Total current assets 1,332,003 1,237,642 Property, plant and equipment, net 1,968,828 1,697,203 Deposits for purchases of property, plant and equipment 215,954 233,296 Intangible asset, net 1,001 1,037 Land use rights 111,192 99,162 Prepayments to suppliers expected to be utilized beyond one year, net 32,702 33,617 Pledged bank deposits - non-current 49,918 49,686 Debt issuance costs, net 7,562 8,408 Investment in an associate 13,582 5,630 Deposits relating to sales and leaseback transactions 7,314 7,316 Deferred income tax assets 375 375 --- --- Total assets 3,740,431 3,373,372 --------- --------- Liabilities and shareholders' equity Current liabilities Short-term bank borrowings and current installments of long-term bank borrowings 972,294 666,200 Bills payable 94,009 11,406 Trade accounts payable 132,618 124,066 Advance payments from customers, current portion 267,416 256,411 Accrued expenses and other payables 470,623 425,669 Due to a related party 2,193 4,359 Income tax payable 883 4,299 Other financial liabilities 18,783 18,545 ------ ------ Total current liabilities 1,958,819 1,510,955 Convertible senior notes 400,000 400,000 Debt discount (12,875) (14,315) Long-term bank borrowings, excluding current installments 139,606 154,252 Obligations under capital leases, excluding current installments 35,292 40,083 Advance payments from customers - non-current 441,866 487,577 Other liabilities 3,419 3,485 Deferred income tax liability 2,704 1,468 ----- ----- Total liabilities 2,968,831 2,583,505 Shareholders' equity Ordinary shares: US$0.10 par value; 499,580,000 shares authorized; 113,501,049 shares issued; 113,110,516 and 113,110,396 shares outstanding as of March 31, 2009 and December 31, 2008, respectively 11,311 11,311 Additional paid-in capital 468,541 464,101 Statutory reserve 29,676 29,676 Accumulated other comprehensive income 83,102 83,314 Retained earnings 178,970 201,465 ------- ------- Total shareholders' equity 771,600 789,867 ------- ------- Total liabilities and shareholders' equity 3,740,431 3,373,372 --------- --------- LDK Solar Co., Ltd. Unaudited Condensed Consolidated Statements of Operations (In US$'000, except per ADS data) For the 3 Months Ended --------------------------- 3/31/2009 12/31/2008 Net sales 283,262 426,612 Cost of goods sold (278,339) (638,030) -------- -------- Gross profit / (loss) 4,923 (211,418) Selling expenses (702) (1,139) General and administrative expenses (17,250) (34,965) Research and development expenses (3,106) (4,114) ------ ------ Total operating expenses (21,058) (40,218) ------- ------- Loss from operations (16,135) (251,636) Other income/(expenses): Interest income 693 979 Interest expense and amortization of discount on exchange notes and convertible senior notes issuance costs (11,370) (9,662) Foreign currency exchange (loss) / gain, net (508) 4,950 Government subsidy 3,247 5,366 Change in fair value of prepaid forward contracts - - Others (61) 567 --- --- Loss before income tax (24,134) (249,436) Income tax benefit 1,639 30,473 ----- ------ Net loss attributable to ordinary shareholders (22,495) (218,963) ------- -------- Net loss per ADS, Diluted $(0.21) $(2.05) ------ ------
On January 1, 2009, LDK Solar adopted FSP No. APB 14-1 "Accounting for Convertible Debt Instruments That May Be Settled in Cash Upon Conversion (Including Partial Cash Settlement)" concerning convertible debt accounting. This rule requires restatement of prior periods to conform to current account.
About LDK Solar
LDK Solar Co., Ltd. is a leading manufacturer of multicrystalline solar wafers, which are the principal raw material used to produce solar cells. LDK Solar sells multicrystalline wafers globally to manufacturers of photovoltaic products, including solar cells and solar modules. In addition, LDK Solar provides wafer processing services to monocrystalline and multicrystalline solar cell and module manufacturers. LDK Solar's headquarters and 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.
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 construction projects, including its polysilicon plants, 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 solar 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.
LDK Solar Co., Ltd.
CONTACT: Lisa Laukkanen of The Blueshirt Group, +1-415-217-4967,
lisa@blueshirtgroup.com, for LDK Solar; or Jack Lai, Executive VP and CFO of
LDK Solar Co., Ltd., +1-408-245-8801, IR@ldksolar.com
