LDK Solar Reports Financial Results for First Quarter of Fiscal 2011

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LDK Solar Co., Ltd.

Jun 07, 2011, 04:15 ET

XINYU CITY, China and SUNNYVALE, Calif., June 7, 2011 /PRNewswire/ -- LDK Solar Co., Ltd. ("LDK Solar";NYSE: LDK), a leading manufacturer of multicrystalline solar wafers and PV products, today reported its unaudited financial results for the first quarter ended March 31, 2011.

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

First Quarter Highlights:

  • Quarterly revenue of $766.3 million, a decrease of 16.8% sequentially and an increase of 120.5% year-over-year;
  • Shipped 631.5 MW of wafers, 118.7 MW of modules in the first quarter;
  • Gross margin for the first quarter was 31.5%;
  • Operating margin for the first quarter was 25.6%;
  • Net income was $135.4 million, or $0.95 per diluted ADS for the first quarter;
  • Increased wafer capacity to 3.5 GW in March 2011;
  • Produced a total of approximately 2,479 MT of polysilicon during the first quarter; and
  • Entered into several new supply agreements for wafers, modules and polysilicon.

Net sales for the first quarter of fiscal 2011 were $766.3 million, compared to $920.9 million for the fourth quarter of fiscal 2010, and $347.6 million for the first quarter of fiscal 2010.

Gross profit for the first quarter of fiscal 2011, was $241.6 million, compared to $251.4 million in the fourth quarter of fiscal 2010, and $54.5 million for the first quarter of fiscal 2010.

Gross margin for the first quarter of fiscal 2011 was 31.5%, compared to 27.3% in the fourth quarter of fiscal 2010 and 15.7% in the first quarter of fiscal 2010.  

Income from operations for the first quarter of fiscal 2011 was $196.1 million, compared to income from operations of $203.8 million for the fourth quarter of 2010, and $33.0 million for the first quarter of fiscal 2010.  

Operating margin for the first quarter of fiscal 2011 was 25.6% compared to 22.1% in the fourth quarter of fiscal 2010 and 9.5% in the first quarter of fiscal 2010.

Income tax expense for the first quarter of fiscal 2011 was $44.2 million, compared to income tax expense of $40.5 million in the fourth quarter of fiscal 2010 and income tax expense of $3.2 million in the first quarter of fiscal 2010.

Net income for the first quarter of fiscal 2011 was $135.4 million, or $0.95 per diluted ADS, compared to net income of $145.2 million, or $1.09 per diluted ADS for the fourth quarter of fiscal 2010 and $7.2 million, or $0.06 per diluted ADS for the first quarter of fiscal 2010. The number of shares for calculating diluted ADS was approximately 148.1 million for the first quarter of fiscal 2011, 137.5 million for the fourth quarter of fiscal 2010 and 125.8 million for the first quarter of fiscal 2010.

LDK Solar ended the first quarter of fiscal 2011 with $515.1 million in cash and cash equivalents and $637.9 million in short-term pledged bank deposits.

"During the first quarter, we made notable progress and executed on our growth strategy while improving our margin profile.  This progress was made despite seasonality in the macro environment and regulatory uncertainties in Europe," stated Xiaofeng Peng, Chairman and CEO of LDK Solar.  "The significant improvement in our margins demonstrates the success of our vertical integration strategy and strong market position.  

"We experienced continued solid contributions from our wafer and polysilicon businesses and increased gross margins across all of our PV product segments.   In addition, we increased our customer base and diversified our geographic mix, reflecting the quality and performance of our PV products.

"We remain focused on managing our operations to drive profitability.  Going forward, we expect to continue to use free cash flow to pay down debt, while also continuing to evaluate opportunities to convert short-term to long-term obligations.  We are encouraged by the progress we made during the quarter in further differentiating LDK Solar in the global PV market," 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 2011, LDK Solar estimates its revenue to be in the range of $710 million to $760 million with wafer shipments between 500 MW and 550 MW, and module shipments between 200 MW and 220 MW, in-house polysilicon production between 2,650 MT and 2,750 MT, in-house cell production between 120 MW and 130 MW and gross margin between 22% and 26%.

Conference Call Details

The LDK Solar First Quarter 2011 teleconference and webcast is scheduled to begin at 5:00 p.m. Eastern Time (ET), on June 7, 2011.  To listen to the live conference call, please dial 877-941-1427 (within U.S.) or 480-629-9664 (outside U.S.) at 4:50 p.m. ET on June 7, 2011. An audio replay of the call will be available through June 14, 2011, by dialing 800-406-7325 (within U.S.) or 303-590-3030 (outside U.S.) and entering the pass code 4441460#.

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)

      3/31/2011

    12/31/2010

Assets


Current assets


 Cash and cash equivalents

515,081

202,127

 Pledged bank deposits

637,943

503,721

 Trade accounts and bills receivable, net

452,442

384,265

 Inventories

612,783

474,612

 Prepayments to suppliers, net

114,682

112,448

 Other current assets

231,029

298,248

Total current assets

2,563,960

1,975,421

Property, plant and equipment, net

3,298,766

2,993,213

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

187,805

144,298

Land use rights

223,143

220,405

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

13,849

14,318

Pledged bank deposits – non-current

47,166

43,965

Investments in an associate and a jointly-controlled entity

56,617

52,275

Other non-current assets

50,050

48,262

Total assets                                      

6,441,356

5,492,157




Liabilities and equity


Current liabilities


  Short-term borrowings and current installments of long-term borrowings

1,552,198

1,501,588

 Convertible senior notes, less debt discount

351,489

355,445

 Trade accounts and bills payable

794,695

719,367

 Advance payments from customers, current

   installments                                    

229,888

196,812

 Accrued expenses and other payables

818,190

751,272

 Other financial liabilities

51,473

53,338

Total current liabilities

3,797,933

3,577,822




Long-term borrowings, excluding current installments

794,658

604,495

Convertible senior notes and Senior Notes, less debt discount

217,711

34,658

Advance payments from customers – non-current

163,099

148,022

Other liabilities

115,669

107,422

Total liabilities

5,089,070

4,472,419




Equity






Total LDK Solar Co., Ltd. shareholders' equity

1,338,627

1,019,240

Non-controlling interests

13,659

498




Total equity

1,352,286

1,019,738








Total liabilities and equity

6,441,356

5,492,157

LDK Solar Co., Ltd.

Unaudited Condensed Consolidated Statements of Operations Information

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

For the 3 Months Ended

  3/31/2011

  12/31/2010




Net sales

766,337

920,876

Cost of goods sold

(524,745)

(669,450)

Gross profit

241,592

251,426

Selling expenses

(7,427)

(9,260)

General and administrative expenses

(30,038)

(34,750)

Research and development expenses

(7,998)

(3,579)

Total operating expenses

(45,463)

(47,589)

Profit from operations

196,129

203,837

Other income (expenses):


 Interest income

1,057

1,417

 Interest expense and amortization of senior notes issuance costs and debt discount

(31,351)

(24,861)

 Foreign currency exchange gain, net

8,840

5,378

 Government subsidies

3,455

445

 Others, net

1,558

3,562

Earnings before income tax

179,688

189,778

Income tax expense

(44,168)

(40,538)

Net income

135,520

149,240

Earnings attributable to non-controlling interests

(82)

(4,036)

Net income attributable to LDK Solar Co., Ltd. shareholders

135,438

145,204




Net income per ADS, Diluted

$  0.95

$  1.09

About LDK Solar (NYSE: LDK)

LDK Solar Co., Ltd. (NYSE: LDK) is a leading vertically integrated manufacturer of photovoltaic (PV) products and a leading manufacturer of solar wafers in terms of capacity. LDK Solar manufactures polysilicon, mono and multicrystalline ingots, wafers, modules and cells. The Company also engages in project development activities in selected segments of the PV market. Through its broad product offering, LDK Solar provides its customers with a full spectrum of PV solutions. 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. 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 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.

SOURCE LDK Solar Co., Ltd.