LDK Solar Reports Financial Results for Third Quarter of Fiscal 2011
Xinyu City, China and Sunnyvale, California, November 22, 2011 – 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, 2011.
All financial results are reported in U.S. dollars on a U.S. GAAP basis.
Third Quarter Highlights:
Net sales for the third quarter of fiscal 2011 were $471.9 million, compared to $499.4 million for the second quarter of fiscal 2011, and $675.6 million for the third quarter of fiscal 2010.
Gross loss for the third quarter of fiscal 2011 was $17.0 million, compared to gross profit of $11.0 million in the second quarter of fiscal 2011, and gross profit of $150.0 million for the third quarter of fiscal 2010.
Gross margin for the third quarter of fiscal 2011 was negative 3.6%, compared to positive 2.2% in the second quarter of fiscal 2011, and positive 22.2% in the third quarter of fiscal 2010.
During the preparation of its third quarter 2011 financial results, LDK Solar's management determined that an inventory write-down of $47.3 million was required as a result of the significant drop in market price for wafers and modules during the third quarter. As a result, gross margin and results from operations were negatively impacted in the third quarter of fiscal 2011.
Loss from operations for the third quarter of fiscal 2011 was $77.1 million, compared to loss from operations of $47.9 million for the second quarter of fiscal 2011, and income from operations of $119.5 million for the third quarter of fiscal 2010.
Operating margin for the third quarter of fiscal 2011 was negative 16.3% compared to negative 9.6% in the second quarter of fiscal 2011, and positive 17.7% in the third quarter of fiscal 2010.
Income tax benefit for the third quarter of fiscal 2011 was $1.7 million, compared to income tax expense of $6.7 million in the second quarter of fiscal 2011 and income tax expense of $14.8 million in the third quarter of fiscal 2010.
Net loss attributable to LDK Solar's shareholders for the third quarter of fiscal 2011 was $114.5 million, or a loss of $0.87 per diluted ADS, compared to a net loss of $87.7 million, or a loss of $0.62 per diluted ADS for the second quarter of fiscal 2011 and net income of $93.4 million, or $0.72 per diluted ADS for the third quarter of fiscal 2010. The number of shares for calculating diluted ADS was approximately 131.0 million for the third quarter of fiscal 2011.
LDK Solar ended the third quarter of fiscal 2011 with $262.6 million in cash and cash equivalents and $605.6 million in short-term pledged bank deposits.
"During the third quarter, our business was impacted by the continued downturn in the solar industry," stated Xiaofeng Peng, Chairman and CEO of LDK Solar. "Weak market demand and rapidly declining average selling prices throughout the solar supply chain resulted in shipment volumes and revenues lower than what we previously anticipated.
"While we continue to believe that the significant opportunities to meet global energy needs with solar power will drive long-term market growth, in the near-term we expect challenging conditions in the solar industry to continue. As such, we remain focused on strengthening our balance sheet, increasing our operating efficiencies and improving our cost structure," concluded Mr. Peng.
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 2011, LDK Solar estimates its revenue to be in the range of $440 million to $520 million with wafer shipments between 200 MW and 270 MW, and module shipments between 180 MW and 270 MW, in-house polysilicon production between 2,200 MT and 2,800 MT, in-house cell production between 220 MW and 250 MW and gross margin between 2% and 7%.
For fiscal 2011, LDK Solar estimates its revenue to be in the range of $2.20 billion to $2.25 billion, wafer shipments between 1.55 gigawatts (GW) and 1.65 GW, module shipments between 550 MW and 650 MW, in-house polysilicon production between 10,000 MT and 11,000 MT, in-house cell production between 600 MW and 700 MW and gross margins between 9% and 12%.
Conference Call Details
The LDK Solar Third Quarter 2011 teleconference and webcast is scheduled to begin at 8:00 a.m. Eastern Time (ET), on November 22, 2011. To listen to the live conference call, please dial 877-941-2321 (within U.S.) or 480-629-9666 (outside U.S.) at 8:00 a.m. ET on November 22, 2011. An audio replay of the call will be available through December 6, 2011, by dialing 800-406-7325 (within U.S.) or 303-590-3030 (outside U.S.) and entering the pass code 4487352#.
A live webcast of the call will be available on the company's investor relations website at http://investor.ldksolar.com.
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.
For more information contact:
The Blueshirt Group for LDK Solar
Executive VP and CFO
LDK Solar Co., Ltd.