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From: OmertaSoldier10/13/2008 10:59:05 AM
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From: OmertaSoldier3/10/2009 6:46:43 PM
   of 79
 
STV 4Q 2008
China Digital TV Announces Unaudited Fourth Quarter and Full Year 2008 Results
Tuesday March 10, 2009, 5:00 pm EDT
Buzz up! Print Related:China Digital TV Holding Co., Ltd.
BEIJING, March 10 /PRNewswire-Asia/ -- China Digital TV Holding Co., Ltd. (NYSE: STV - News; "China Digital TV" or the "Company"), the leading provider of conditional access ("CA") systems to China's rapidly growing digital television market, today announced its unaudited financial results for the fourth quarter and full year ended December 31, 2008.

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STV 7.08 +0.58


{"s" : "stv","k" : "c10,l10,p20,t10","o" : "","j" : ""}
Highlights for Fourth Quarter 2008
-- Net revenues in the fourth quarter were US$16.8 million, a 13.8%
decrease from the corresponding period in 2007 and in line with the
third quarter of 2008.
-- Gross profit in the fourth quarter was US$13.4 million, a decrease of
14.0% from the corresponding period of 2007 and a decrease of 2.9% from
the third quarter of 2008. Gross margin was 79.6% in the fourth quarter
of 2008, compared to 79.8% in the corresponding period of 2007 and
81.8% in the third quarter of 2008.
-- Operating margin, defined as income from operations divided by net
revenues, for the fourth quarter of 2008 was 45.4%, compared to 54.0%
in the corresponding period of 2007, and 49.1% in the third quarter of
2008.
-- Diluted earnings per ADS (one ADS representing one ordinary share) in
the fourth quarter were US$0.21, compared to US$0.22 in the
corresponding period of 2007 and US$0.14 in the third quarter of 2008.
-- China Digital TV shipped approximately 2.66 million smart cards during
the fourth quarter, an increase of 2.1% from the corresponding period
in 2007 and an increase of 20.1% from the third quarter of 2008.
-- According to market data collected by the Company, China Digital TV
entered into 16 out of a total of 34 new contracts to install CA
systems in China during the fourth quarter of 2008.

Highlights for Full Year 2008
-- Net revenues in 2008 were US$70.3 million, a 26.8% increase from 2007.
-- Gross Profit in 2008 was US$56.6 million, a 25.2% increase from 2007.
-- Diluted earnings per ADS in 2008 were US$0.72, compared to US$0.68 in
2007.
-- China Digital TV shipped 9.86 million smart cards in 2008, an increase
of 34.8% from 2007. Between the beginning of 2004 and the end of 2008,
China Digital TV shipped a total of over 22.8 million smart cards.
-- According to market data collected by the Company, China Digital TV
entered into 36 out of a total of 66 new contracts to install CA
systems in 2008.

"Despite a tough quarter in which the slowing Chinese economy impacted the entire cable TV industry, we achieved growth in smart card shipment and maintained our market-leading position in China's CA industry," said Mr. Jianhua Zhu, China Digital TV's chief executive officer.

"We believe that China remains on track to complete the mass migration to TV digitalization by 2015 and with our leading position in the CA industry, China Digital TV is well positioned to benefit from this," continued Mr. Zhu. "In the near term, as customer needs continue to evolve, we will remain focused on developing our CA system solutions and service capabilities. We also expect opportunities to arise from consolidation in the CA industry as cable TV network operators choose to work with reliable domestic CA systems suppliers who understand local operator needs. Looking ahead, we believe that the next generation of digital value-added services has the potential to become an important contributor to our growth and we will continue to invest in related technologies and explore viable business models in this area."

China Digital TV's chief financial officer, Mr. Mason Xu, commented, "In 2008, both our net revenues and gross profit increased more than 25% compared to 2007, despite a challenging business environment in the second half of the year. While 2009 will likely be a difficult year, we expect that overall card shipment will continue to grow. Supported by our strong balance sheet, we will continue to invest in value-added services to ensure we capture long-term gains from the promising digitalization industry. At the same time, we will manage our cost structure in a prudent fashion, including tightened control over headcount growth and less essential expenses."

Fourth Quarter 2008 Results

(Note: Unless otherwise stated, all financial statement measures stated in this press release are based on U.S. GAAP.)

In the fourth quarter of 2008, China Digital TV reported net revenues of US$16.8 million, a decrease of 13.8% from US$19.5 million in the fourth quarter of 2007 and in line with US$16.9 million in the third quarter of 2008. The year-over-year decrease in net revenues was primarily attributable to decreases in the average selling price ("ASP") of smart cards in 2008 as the Company adopted a more aggressive pricing strategy to strengthen its market-leading position. The flat quarter-over-quarter revenues largely reflected ASP decline offset by shipment growth.

Revenues from smart cards and related products were US$15.4 million in the fourth quarter of 2008, a decrease of 13.6% from the corresponding period of 2007 and an increase of 2.1% from the third quarter of 2008. Sales of smart cards and related products accounted for 91.4% of total revenues for the quarter, up from 88.9% in the third quarter of 2008.

In the fourth quarter of 2008, out of the Company's approximately 200 existing operator customers, 162 bought smart cards from the Company, compared with 152 in the third quarter of 2008. Revenues from the top five customers accounted for 30.4% of total revenues in the fourth quarter of 2008, compared to 23.8% in the third quarter of 2008.

Revenues from services were US$1.4 million in the fourth quarter of 2008, a decrease of 20.2% from the corresponding period in 2007 and a decrease of 22.8% from the third quarter of 2008. Service revenues accounted for 8.6% of total revenues for the quarter. The year-over-year and quarter-over-quarter decreases were primarily due to declines in licensing and royalty revenues collected from set-top box manufacturers.

Gross profit in the fourth quarter of 2008 was US$13.4 million, a decrease of 14.0% from US$15.6 million in the corresponding period of 2007 and a decrease of 2.9% from US$13.8 million in the third quarter of 2008. Gross margin was 79.6% in the fourth quarter of 2008, compared to 79.8% in the corresponding period in 2007 and 81.8% in the third quarter of 2008. The year-over-year decline in gross profit was mainly due to the decrease in ASP of smart cards. The quarter-over-quarter decline in gross profit was due to the decrease in ASP and the increase in unit costs of smart cards.

In the fourth quarter of 2008, ASP for smart cards decreased by 10.8% compared to the third quarter. The unit cost for smart cards in the fourth quarter increased by 11.7% compared to the third quarter due to an increase in fees associated with monitoring for counterfeiting and other questionable activities in the CA industry.

Operating expenses for the fourth quarter of 2008 were US$5.8 million, an increase of 14.4% from US$5.0 million in the same period of 2007 and an increase of 4.3% from US$5.5 million in the third quarter of 2008.

-- Research and development expenses in the fourth quarter increased 28.9%
to US$1.9 million from US$1.5 million in the corresponding period of
2007 and decreased 1.9% from US$2.0 million in the third quarter of
2008. The year-over-year increase was mainly due to an increase in
headcount. The quarter-over-quarter trend was relatively flat as the
number of R&D staff remained stable during the period.

-- Sales and marketing expenses for the fourth quarter of 2008 were in
line with the corresponding period of 2007 and decreased 18.0% to
US$1.7 million from US$2.1 million in the third quarter of 2008. The
quarter-over-quarter decrease was primarily due to reduced marketing
activities and an adjustment associated with the actual year-end bonus
being less than the sum of quarterly provisions.

-- General and administrative expenses for the fourth quarter of 2008
increased 14.2% to US$2.2 million from US$1.9 million in the
corresponding period of 2007 and increased 42.7% from US$1.5 million in
the third quarter of 2008. The annual and sequential increases were
mainly due to a US$0.4 million bad debt provision recorded in the
fourth quarter of 2008, and to a lesser extent increases in share-based
compensation expenses and tax-related consulting fees.

Income from operations in the fourth quarter was US$7.6 million, a 27.6% decrease from the corresponding period of 2007 and a 7.7% decrease from the third quarter of 2008.

Operating margin, defined as income from operations divided by net revenue, in the fourth quarter of 2008 was 45.4%, compared to 54.0% in the corresponding period of 2007 and 49.1% in the third quarter of 2008.

Income tax benefit in the fourth quarter of 2008 was US$ 1.6 million, compare to income tax expenses of US$0.46 million in the corresponding period of 2007 and US$2.0 million in the third quarter of 2008. In the fourth quarter, Beijing Super TV Co., Ltd., a subsidiary of the Company, and Beijing Novel-Super Digital TV Technology Co., Ltd. (together with Beijing Super TV Co., Ltd., the "Entities"), a consolidated affiliate of the Company, successfully obtained their respective New and High-Tech Enterprise Certificates under the PRC Enterprise Income Tax Law. The Entities, therefore, are qualified to enjoy a preferential tax rate of 15% with a further 50% reduction, since they are located in a high-tech zone in Beijing, starting from January 1, 2008 to December 31, 2009. The Company pre-calculated income tax expenses of the two Entities based on a 12.5% statutory tax rate in the first and second quarters, and a 25% statutory tax rate in the third quarter. A tax benefit of US$1.6 million was recorded in the fourth quarter to reflect the impact of applying the 7.5% preferential tax rate to the full year of 2008.

Net income in the fourth quarter of 2008 was US$12.2 million, a decrease of 5.2% from US$12.9 million in the corresponding period of 2007 and an increase of 48.2% from US$8.2 million in the third quarter of 2008. The year-over-year decrease was primarily due to the decline in net revenues and increase in operating expenses. The quarter-over-quarter increase was primarily due to the tax benefit resulting from the downward adjustment of the applicable tax rate.

Non-GAAP net income, defined as net income excluding certain non-cash expenses, including share-based compensation expenses and amortization related to business acquisitions, in the fourth quarter of 2008 was US$12.7 million, a decrease of 3.9% from US$13.2 million in the corresponding period of 2007 and an increase of 49.2% from US$8.5 million in the third quarter of 2008.

As of December 31, 2008, China Digital TV had cash and cash equivalents, restricted cash and deposits with maturity over three months totaling US$273.4 million. Operating cash flow in the fourth quarter of 2008 was approximately US$11.1 million.

On September 17, 2008, the Company's board of directors authorized a share repurchase program. As of December 31, 2008 the Company had bought back 2,307,566 ADSs at a total cost of approximately US$16.1 million (including transaction costs) under the share repurchase program.

On December 19, 2008, the Company declared a special cash dividend of US$1.00 per share on the Company's ordinary shares. As of the end of February 2009, the dividend was paid to shareholders of record as of the close of business on January 8, 2009.

Full Year 2008 Results

Net revenues in 2008 increased 26.8% to US$70.3 million from US$55.5 million in 2007, primarily due to the growth of the Company's CA business as reflected by a 34.8% increase in smart card shipments in 2008.

According to market data collected by the Company, China Digital TV entered into 36 out of a total of 66 new contracts to install CA systems in 2008.

Revenues from smart cards and related products in 2008 were US$64.4 million, an increase of 29.5% from 2007, reflecting an increase in smart card shipments, which was partially offset by a decrease in ASP. Sales of smart cards and related products accounted for 91.1% of total revenues for the year.

Revenues from services were US$6.3 million in 2008, an increase of 4.6% from 2007. Revenues from services represented 8.9% of total revenues in 2008.

Gross profit was US$56.6 million in 2008, an increase of 25.2% from US$45.2 million in 2007. Gross margin was 80.5% in 2008, compared to 81.5% in 2007.

Operating expenses in 2008 were US$19.4 million, an increase of 59.9% from US$12.1 million in 2007. The increase in operating expenses was due to a combination of factors including a significant increase in the number of employees, increases in other R&D and marketing expenses and an increase in general and administrative expenses associated with the Company being in its first full year of operations as a public company.

-- Research and development expenses in 2008 increased 49.1% to US$6.9
million from US$4.6 million in 2007. Compensation costs, accounting
for more than 70% of total R&D expenses, increased by 45% due to
substantial increases in headcount.

-- Sales and marketing expenses in 2008 increased 61.3% to US$6.1 million
from US$3.8 million in 2007. The increase was primarily due to
substantially higher compensation costs associated with strategic hires
in sales and increases in marketing expenditures.

-- General and administrative expenses in 2008 increased 71.9% to US$6.4
million from US$3.7 million in 2007. The increase was primarily due to
substantially higher compensation costs associated with strategic hires
in the finance and legal departments and substantial increases in
consulting fees associated with being a public company.

Income from operations in 2008 was US$37.3 million, a 12.6% increase from 2007.

Operating margin in 2008 was 53.0%, compared to 59.7% in 2007.

Net income in 2008 was US$43.1 million, an increase of 27.3% from US$33.8 million in 2007. Basic and diluted earnings per ADS in 2008 were US$0.75 and US$0.72 respectively.

Business Outlook

Based on information available on March 10, 2009, China Digital TV expects smart card shipments for the first quarter of 2009 to be in the range of 2.1 million to 2.3 million. Net revenues for the first quarter of 2009 are expected to be in the range of US$13.5 million to US$14.5 million, representing a year-over-year decrease in the range of 16% to 21%. This decrease reflects a weaker ASP compared to the first quarter of 2008 and lack of growth in shipments resulting from the general economic downturn.

For full year 2009, the Company expects overall smart card shipments to increase approximately 20% compared to full year 2008. While ASP for smart cards may continue to face downward pressure in 2009, the Company does not expect ASP to decline significantly from the level of fourth quarter 2008.

Conference Call Information

The Company will hold an earnings conference call at 8:00 p.m. on Tuesday, March 10, 2009 Eastern Daylight Time (8:00 a.m. on Wednesday, March 11, Beijing/Hong Kong Time).

Conference Call Dial-in Information

United States Toll Free: +1-866-953-0757
International: +1-617-399-3487
Hong Kong: +852-3002-1672
China Toll Free: +10-800-130-0399

Passcode: China Digital TV Earnings Call

Please dial-in 10 minutes before the call is scheduled to begin and provide the passcode to join the call.

A replay of the call will be available for one week between 10:00 p.m. on March 10, 2009 and 10:00 p.m. on March 17, 2009 Eastern Daylight Time.

Replay Information

United States: +1-888-286-8010
International: +1-617-801-6888

Passcode: 71120949

Additionally, a live and archived webcast of this conference call will be accessible through the Investor Relations section of China Digital TV's website at ir.chinadtv.cn .

Safe Harbor Statements

This announcement contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Such forward-looking statements are made under the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995.

These forward-looking statements can be identified by terminology such as "will," "expects," "anticipates," "future," "intends," "plans," "believes," "estimates," "may," "should" and similar expressions. Such forward-looking statements include, without limitation, statements regarding the outlook for the first quarter of 2009 and full year 2009 and comments by management in this announcement about trends in the CA systems, digital television, cable television and related industries in the PRC and China Digital TV's strategic and operational plans and future market positions. China Digital TV may also make forward-looking statements in its periodic reports to the U.S. Securities and Exchange Commission, in its annual report to shareholders, in press releases and other written materials and in oral statements made by its officers, directors or employees to third parties. Statements that are not historical facts, including statements about China Digital TV's beliefs and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties. A number of factors could cause actual results to differ materially from projections contained or implied in any forward-looking statement, including but not limited to the following: competition in the CA systems, digital television, cable television and related industries in the PRC and the impact of such competition on prices, our ability to implement our business strategies, changes in technology, the structure of the cable television industry or television viewer preferences, changes in PRC laws, regulations or policies with respect to the CA systems, digital television, cable television and related industries, including the extent of non-PRC companies' participation in such industries, and changes in political, economic, legal and social conditions in the PRC, including the government's policies with respect to economic growth, foreign exchange and foreign investment.

Further information regarding these and other risks and uncertainties is included in our annual report on Form 20-F and other documents filed with the U.S. Securities and Exchange Commission. China Digital TV does not assume any obligation to update any forward-looking statements, which apply only as of the date of this press release.

About China Digital TV

Founded in 2004, China Digital TV is the leading provider of conditional access ("CA") systems to China's rapidly growing digital television market. CA systems enable television network operators to manage the delivery of customized content and services to their subscribers. China Digital TV conducts substantially all of its business through its subsidiaries, Beijing Super TV Co., Ltd. and Beijing Novel-Super Media Investment Co., Ltd, and its affiliate, Beijing Novel-Super Digital TV Technology Co., Ltd.

For more information please visit the Investor Relations section of China Digital TV's website at ir.chinadtv.cn .

For investor and media inquiries, please contact:

In China:

Eric Yuan
China Digital TV
Tel: +86-10-8279-0021
Email: ir@novel-supertv.com

Cynthia He
Brunswick Group LLC
Tel: +86-10-6566-9504
Email: che@brunswickgroup.com

In the US:

Kate Tellier
Brunswick Group LLC
Tel: +1-212-706-7879
Email: ktellier@brunswickgroup.com

China Digital TV Holding Co., Ltd.
Unaudited Condensed Consolidated Statements of Operations
(in U.S. dollars in thousands, except share data)

For the three months ended
December 31, September 30, December 31,
2008 2008 2007
Revenues:
Products $ 15,422 $ 15,099 $ 17,851
Services 1,449 1,878 1,815
Total revenues 16,871 16,977 19,666
Business taxes (28) (115) (121)
Net revenue 16,843 16,862 19,545

Cost of Revenues:
Products (3,050) (2,295) (3,613)
Services (390) (766) (339)
Total Cost of
Revenues (3,440) (3,061) (3,952)
Gross Profit 13,403 13,801 15,593

Operating expenses:
Research and
development expenses (1,915) (1,953) (1,486)
Sales and
marketing expenses (1,693) (2,064) (1,666)
General and
administrative
expenses (2,154) (1,509) (1,886)
Total Operating
Expense (5,762) (5,526) (5,038)

Income from operation 7,641 8,275 10,555

Interest income 2,604 2,377 2,522
Other income / (expense) 385 (392) 263
Income before income tax 10,630 10,260 13,340
Income tax benefits/(expenses)
Income tax-current 2,054 (2,547) (612)
Income tax-deferred (480) 504 148
Net income before minority
interest and net (loss)
income from equity
method investments 12,204 8,217 12,876

Minority interest 5 8 --
Net (loss) income
from equity method
investments (11) 6 (6)
Net income $ 12,198 $ 8,231 $ 12,870

Net income per share:
Basic ordinary shares $ 0.22 $ 0.14 $ 0.23
Basic preferred shares -- -- 0.30
Diluted ordinary shares $ 0.21 $ 0.14 $ 0.22

Weighted average shares
used in computation:
Basic ordinary shares 56,272,562 57,643,602 54,511,429
Basic preferred shares -- -- 1,135,503
Diluted ordinary shares 57,613,559 60,627,807 58,377,611

China Digital TV Holding Co., Ltd.
Unaudited Condensed Consolidated Statements of Operations
(in U.S. dollars in thousands, except share data)

For the twelve months ended
December 31, December 31,
2008 2007
Revenues:
Products $ 64,412 $ 49,741
Services 6,285 6,011
Total revenues 70,697 55,752
Business taxes (363) (299)
Net revenue 70,334 55,453

Cost of Revenues:
Products (10,877) (8,100)
Services (2,828) (2,135)
Total Cost of
Revenues (13,705) (10,235)
Gross Profit 56,629 45,218

Operating expenses:
Research and development expenses (6,921) (4,643)
Sales and marketing expenses (6,063) (3,758)
General and administrative expenses (6,372) (3,706)
Total Operating
Expense (19,356) (12,107)

Income from operation 37,273 33,111

Interest income 9,138 2,790
Other (expense)/income (124) 263
Income before income tax 46,287 36,164
Income tax benefits / (expenses)
Income tax-current (3,271) (2,554)
Income tax-deferred 36 212
Net income before minority
interest and net loss from
equity method investments 43,052 33,822

Minority interest 14 --
Net loss from equity
method investments (4) (6)
Net income $ 43,062 $ 33,816

Net income per share:
Basic ordinary shares $ 0.75 $ 0.74
Basic preferred shares -- 0.66
Diluted ordinary shares $ 0.72 $ 0.68

Weighted average shares
used in computation:
Basic ordinary shares 57,138,985 39,170,004
Basic preferred shares -- 7,389,394
Diluted ordinary shares 60,058,724 42,773,590

China Digital TV Holding Co., Ltd.
Unaudited Condensed Consolidated Balance Sheets
(in U.S. dollars in thousands)

December 31, December 31,
ASSETS 2008 2007
Current assets:
Cash and cash equivalents $ 202,947 $ 228,958
Restricted cash 24 706
Deposits with maturity over three months 70,468 17,948
Accounts receivable, net 12,509 6,118
Inventories, net 4,014 2,967
Prepaid expenses and other current assets 2,393 1,254
Amounts due from related parties -- 1,277
Deferred costs-current 326 541
Deferred income taxes - current 201 184
Total current assets 292,882 259,953
Property and equipment, net 1,880 1,379
Intangible assets, net 1,854 1,002
Goodwill 499 467
Long-term investments 437 396
Deferred costs-non-current 338 488
Deferred income taxes - non-current 86 50
Total assets 297,976 263,735

LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable 1,103 485
Accrued expenses and other
current liabilities 7,888 4,757
Deferred revenue - current 3,704 4,784

Payable to shareholders 57,210 --
Income tax payable 1,088 722
Total current liabilities 70,993 10,748
Deferred revenue-non-current 957 1,136
Deferred income taxes - non-current -- --
Total Liabilities 71,950 11,884
Minority interest 1,564 4,000
Shareholders' equity:
Ordinary shares 29 29
Additional paid-in capital 154,643 224,863
Statutory reserve 10,184 5,688
Accumulated profit 52,910 14,344
Accumulated other comprehensive income 6,696 2,927
Total shareholders' equity 224,462 247,851

TOTAL LIABILITIES, MINORITY
INTEREST, AND SHAREHOLDERS' EQUITY $ 297,976 $ 263,735

Reconciliation of Non-GAAP Measures

Non-GAAP net income excludes certain non-cash expenses, including share-based compensation expenses and amortization related to business acquisitions. We believe that these non-GAAP financial measures provide meaningful supplemental information regarding our performance and liquidity by excluding certain non-cash expenses that may not be indicative of our operating performance from a cash perspective. We believe that both management and investors benefit from referring to this additional information in assessing our performance and when planning and forecasting future periods.

For the three months ended
December 31, September 30, December 31,
2008 2008 2007

Net Income - GAAP $ 12,198 $ 8,231 $ 12,870
Share-based compensation 386 116 230
Amortization related to
business acquisitions 103 155 97

Net Income - Non-GAAP $ 12,687 $ 8,502 $ 13,197

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From: OmertaSoldier3/11/2009 11:16:03 AM
   of 79
 
LDK 4Q 2008

LDK Solar Reports Financial Results for Fourth Quarter and Fiscal 2008
Wednesday March 11, 2009, 7:00 am EDT
Buzz up! Print Related:LDK Solar Co.Ltd.
XINYU CITY, China and SUNNYVALE, Calif., March 11 /PRNewswire-FirstCall/ -- LDK Solar Co., Ltd. ("LDK Solar") (NYSE: LDK - News), a leading manufacturer of multicrystalline solar wafers, today reported its unaudited financial results for the fourth quarter and fiscal year ended December 31, 2008.

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LDK 4.40 -0.31


{"s" : "ldk","k" : "c10,l10,p20,t10","o" : "","j" : ""} All financial results are reported in U.S. dollars on a U.S. GAAP basis.

Fiscal Year 2008 Financial Highlights:

Fiscal year 2008 revenue of $1.6 billion, up 214% year-over-year;
Annualized wafer production capacity expanded by over 1 GW, reaching 1.46 GW at the end of 2008;
Annual wafer shipments increased nearly four-fold to 818 MW in 2008;
Commenced in-house polysilicon production in early January, 2009 for additional cost savings; and
Signed 14 long-term wafer supply agreements during the year, achieving a sales backlog of over 14 GW through 2018.

Net sales for the fourth quarter of fiscal 2008 were $426.6 million, down 21.3% from $541.8 million for the third quarter of fiscal 2008, and up 121% from $192.8 million for the fourth quarter of fiscal 2007.

During the fourth quarter, LDK Solar recorded a write-down of $216.7 million against the cost of inventories for a decline in net realizable value of inventories resulting from the rapid market price decline for solar wafers. As a result, gross profit and income from operations were negatively impacted in the fourth quarter of fiscal 2008.

For the fourth quarter of fiscal 2008, gross profit was negative $126.8 million, compared to $122.9 million in the third quarter of fiscal 2008, and $58.0 million for the fourth quarter of fiscal 2007.

Excluding the inventory write-down, gross profit was $89.9 million, or a gross margin of 21.1% for the fourth quarter and operating profit was $61.7 million, or an operating margin of 14.5% for the fourth quarter.

Gross margin for the fourth quarter of fiscal 2008 was negative 29.7% compared to 22.7% in the third quarter of fiscal 2008 and 30.1% in the fourth quarter of fiscal 2007.

Loss from operation for the fourth quarter of fiscal 2008 was $155.1 million, compared to income from operation of $107.8 million for the third quarter of fiscal 2008, and income from operation of $46.7 million for the fourth quarter of fiscal 2007.

Operating margin for the fourth quarter of fiscal 2008 was negative 36.3% compared to 19.9% in the third quarter of fiscal 2008 and 24.2% in the fourth quarter of fiscal 2007.

Income tax benefit for the fourth quarter of fiscal 2008 was $18.4 million, compared to income tax expense of $13.8 million in the third quarter of fiscal 2008.

Net loss for the fourth quarter of fiscal 2008 was $133.1 million, or $1.25 per diluted ADS, compared to net income of $88.4 million, or $0.77 per diluted ADS, for the third quarter of fiscal 2008.

Revenue for the fiscal year ended December 31, 2008 was $1.6 billion, up 214% from revenue of $523.9 million for 2007. Gross profit for the year ended December 31, 2008 was $173.0 million, compared to $170.2 million for fiscal 2007. Gross margin for the year ended December 31, 2008 was 10.5%, compared to 32.5% for fiscal 2007.

Operating profit for the year ended December 31, 2008 was $105.6 million, compared to $146.8 million for fiscal 2007.

Operating margin for the year ended December 31, 2008 was 6.4%, compared to 28.0% for fiscal 2007.

Excluding the inventory write-down, gross profit was $389.7 million, or a gross margin of 23.7% for fiscal 2008 and operating profit was $322.3 million, or an operating margin of 19.6% for fiscal 2008.

For the year ended December 31, 2008, income tax expense was $17.2 million, compared to income tax benefit of $0.8 million for fiscal 2007.

For the year ended December 31, 2008, net income was $154.7 million, or $1.42 per diluted ADS, compared to net income of $144.1 million, or $1.37 per diluted ADS, for fiscal 2007.

LDK Solar ended fiscal 2008 with $255.5 million in cash and cash equivalents and $83.4 million in short-term pledged bank deposits.

"Despite its challenges, 2008 was a year of impressive and rapid growth for LDK Solar," stated Xiaofeng Peng, Chairman and CEO of LDK Solar. "We successfully executed on aggressive expansion plans, increasing wafer capacity from 420 MW in 2007 to 1.46 GW at the end of 2008 which was correlated by a dramatic increase in wafer sales year over year.

"Additionally, we completed the construction of and commenced polysilicon production in our 1,000 MT polysilicon plant, and are very pleased with the high quality output produced to date. We continue to progress in the construction of our 15,000 MT plant and expect the first 5,000 MT train to reach mechanical completion at the end of the second quarter of 2009. We look forward to realizing the cost saving benefits of in-house polysilicon production as we work towards our current targets of between 2,000 and 3,000 MT of polysilicon output in 2009," continued Mr. Peng.

"We enter 2009 with conservative optimism. In light of the continued economic slowdown and global credit crisis, we recently amended our expansion plans to lower capital expenditure needs in the near term and to better reflect muted market expectations for 2009. As the credit markets continue to contract, we believe that conservative cash management is imperative and will focus on closely monitoring capital spending to protect our healthy cash position and unused credit facilities, which were $850 million at the end of 2008. While the business environment has been challenging, we believe we are uniquely positioned within the solar industry and going forward will benefit from our lean cost structure and economies of scale. As we brace for continued challenges in the current marketplace, we remain confident in the core strengths of our business model and long-term growth strategies," 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 first quarter of fiscal 2009, LDK Solar estimates its revenue to be in the range of $240 million to $280 million with wafer shipments between 170 MW to 200 MW and gross margin between 3% and 6%. For the full year of fiscal 2009, LDK Solar currently estimates:

Revenue to be in the range of $1.4 billion to $1.8 billion;
Wafer shipments in the range of 1.2 GW to 1.45 GW;
Gross margin between 12% and 19%; and
Production of between 2,000 and 3,000 MT of polysilicon in 2009.

Conference Call Details

The LDK Solar Fourth Quarter and Fiscal Year 2008 teleconference and webcast is scheduled to begin at 8:00 a.m. Eastern Time (ET), on March 11, 2009. To listen to the live conference call, please dial 800-366-7449 (within U.S.) or 303-228-2965 (outside U.S.) at 7:50 a.m. ET on March 11, 2009. An audio replay of the call will be available to investors through March 16, 2009, by dialing 800-405-2236 (within U.S.) or 303-590-3000 (outside U.S.) and entering the passcode 11126850#.

LDK Solar Co., Ltd.
Unaudited Condensed Consolidated Balance Sheet Information
(In US$'000, except share and per share data)

12/31/2008 9/30/2008 12/31/2007
Assets
Current assets
Cash and cash equivalents 255,523 347,762 83,470
Pledged bank deposits 83,383 115,028 135,950
Trade accounts receivable 94,733 40,286 3,767
Bills receivable 3,075 - -
Inventories 704,439 702,314 349,997
Prepayments to suppliers, net 83,561 294,855 138,193
Other current assets 68,123 47,800 29,825
Deferred income tax assets, net 32,205 1,965 546
------ ----- ---
Total current assets 1,325,042 1,550,010 741,748
Property, plant and equipment, net 1,697,203 1,138,539 336,763
Deposits for purchases of property,
plant and equipment 233,296 301,252 151,233
Intangible asset, net 1,037 1,074 1,096
Land use rights 99,162 97,818 29,259
Inventories to be processed beyond
one year - 7,678 29,981
Prepayments to suppliers expected
to be utilized beyond one year,
net 33,617 22,082 18,994
Pledged bank deposits - non-current 49,686 49,476 -
Debt issuance costs, net 8,764 9,657 -
Investment in an associate 5,630 2,579 -
Other financial assets - - 525
Deposits relating to sales and
leaseback transactions 7,316 - -
Deferred income tax assets 375 1,052 387
--- ----- ---
Total assets 3,461,128 3,181,217 1,309,986
--------- --------- ---------

Liabilities and shareholders'
equity
Current liabilities
Short-term bank borrowings and
current portion of long-term bank
borrowings 666,200 451,940 264,101
Bills payable 11,406 - -
Trade accounts payable 124,066 59,165 18,032
Advance payments from customers,
current portion 256,411 342,879 141,223
Accrued expenses and other payables 429,968 331,418 95,301
Due to a related party 4,359 - -
Other financial liabilities 18,545 500 3,357
------ --- -----
Total current liabilities 1,510,955 1,185,902 522,014
Convertible senior notes 400,000 400,000 -
Long-term bank borrowings, excluding
current portions 154,252 159,465 25,125
Obligations under capital leases,
excluding current installments 40,083 - -
Advance payments from customers -
non-current 487,577 434,303 67,554
Other liabilities 3,485 2,172 2,222
Deferred income tax liability 1,468 - -
----- --- ---
Total liabilities 2,597,820 2,181,842 616,915
Shareholders' equity

Ordinary shares: US$0.10 par value;
499,580,000 shares authorized;
113,501,049, 113,501,049 and
106,044,700 shares issued as of
December 31, 2008, September 30,
2008 and December 31, 2007,
respectively; 113,110,396,
113,109,250 and 106,044,700 shares
outstanding as of December 31,
2008, September 30, 2008 and
December 31, 2007, respectively 11,311 11,311 10,604
Additional paid-in capital 446,327 441,913 486,253
Statutory reserve 29,676 18,697 18,697
Accumulated other comprehensive
income 86,219 93,610 31,481
Retained earnings 289,775 433,844 146,036
------- ------- -------
Total shareholders' equity 863,308 999,375 693,071

Total liabilities and shareholders'
equity 3,461,128 3,181,217 1,309,986
--------- --------- ---------

LDK Solar Co., Ltd.
Unaudited Condensed Consolidated Income Statement Information
(In US$'000, except per ADS data)

For the 3 Months Ended Fiscal Year
12/31/2008 9/30/2008 2008 2007

Net sales 426,612 541,819 1,643,495 523,946
Cost of
goods sold (553,402) (418,906) (1,470,511) (353,709)
--------- --------- ----------- ---------
Gross (loss) /
profit (126,790) 122,913 172,984 170,237
Selling expenses (1,139) (1,567) (3,786) (873)
General and
Administrative
expenses (23,028) (10,904) (56,073) (19,360)
Research and
development expenses (4,114) (2,648) (7,570) (3,202)
------- ------- ------- -------
Total operating
expenses (28,281) (15,119) (67,429) (23,435)
-------- -------- -------- --------
(Loss) / income
from operations (155,071) 107,794 105,555 146,802
Other
income/(expenses):
Interest income 979 1,872 5,875 4,109
Interest expense
and amortization
of discount on
exchange notes and
convertible senior
notes issuance
costs (8,284) (10,612) (34,347) (9,419)
Decrease in fair
value of warrants - - - 2
Foreign currency
exchange gain /
(loss), net 4,950 (1,617) 14,495 (1,654)
Government subsidy 5,366 5,431 19,665 3,461
Change in fair
value of
prepaid forward
contracts - - 60,028 -
Others 567 (641) 656 -
--- ----- --- -
(Loss) / income
before income tax (151,493) 102,227 171,927 143,301
Income tax benefit /
(expenses) 18,403 (13,779) (17,209) 758
------ -------- -------- ---
Net income (133,090) 88,448 154,718 144,059
Accretion of
Series A - - - (860)
Accretion of
Series B - - - (2,726)
Accretion of
Series C - - - (1,351)
--- --- --- -------
Net (loss) / income
Available to
ordinary
shareholders (133,090) 88,448 154,718 139,122
--------- ------ ------- -------

Net (loss) /
Income per
ADS, Diluted $(1.25) $0.77 $1.42 $1.37
----------- ---------- ---------- ----------

About LDK Solar (NYSE: LDK - News)

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From: OmertaSoldier3/12/2009 2:56:43 PM
   of 79
 
seek alpha take Q4

LDK Solar (LDK) reported Q4 and FY08 financial results this morning. The results weren’t too surprising, given the fact that the company has taken a couple opportunities in the past months to lower guidance in the face of eroding ASPs (which is an industry wide phenomenon) and the current global economic crisis which is slowing the pace of solar projects. Against a backdrop of challenging conditions, LDK, like so many of its peers has seen its multiples compressed to the extent that almost all future growth is fully discounted. That being said, based on management’s guidance yesterday morning we are adjusting our expectations for FY09 downward as well as our target trading range for the stock.

Results: LDK Solar reported a 21.3% decline in Q4 sales on a sequential basis to $426.6 million, and a 121% increase on a Y/Y basis. Gross profit in the Q4 was negative $126.8 million, impacted by an inventory write-down. Backing the write-down out, GP would have been $89.9 million for the quarter, or a GM of 21.1%. However, with the write-down, GM in Q4 was a negative 29.7%. Net loss of the Q4 was $133.1 million, or $1.25 per diluted ADS, compared to net income of $88.4 million for the same period last year. For the FY08, revenue was $1.6 billion, a 214% Y/Y increase. Gross profit was $173 million, representing GM of 10.5%, down from 32.5% in FY07. Net income for the year was $154.7 million, or $1.42 per diluted ADS, compared to net income of $144.1 million in FY07. In terms of guidance, management said it expects Q1 revenue in the range of $240 to $280 million with wafer shipments between 170MW and 200MW and gross margin between 3% and 6%. For the FY09, it expects revenue in a range of $1.4 billion to $1.8 billion, with wafer shipments in a range of 1.2GW and 1.45GW, gross margin between 12% and 19% and poly production of between 2,000 and 3,000MT. Reducing cap ex plans for 2009 in a range of $190 to $245 million.

Our Take: We listened in on the conference call, where managed provided further color:

Q4 ASP per watt $2.18 decrease of $0.30 from prior quarter – result of rapid wafer decline in prices;
Management expects prepayments to decline in the face of global financial crisis , and continues to undertake cost cutting initiatives to compensate for lower anticipated cash flow and pricing pressures;
Conditions will continue to be challenging in the near term for LDK, as they are with other solar firms facing headwinds.
The biggest concerns we have, which seemed to be consistent with the analyst questions on the call, are that there is another write down ahead. Piper’s Jesse Pichel focused in on this risk in his line of questioning, with management stating its average poly costs were in the range of $170 to $180, Pichel implied with poly prices continuing to decline there is potential for another write down. In the worst case scenario, we wouldn’t expect a second write down on inventory to mirror the $216.7 million write down in the Q4, but it would likely be material to the company’s results and this risk will inevitably continue to be priced into LDK’s stock, which is trading this morning down to $4.30.

Another concern we have from a liquidity standpoint, primarily, is that management said it expects deposits against backlog orders to decline going forward. Here again, Pichel noted that his understanding was that LDK was set to receive an additional $300 to $400 million in deposits which would be used to help finance the build-out of its 15,000MT poly plant. As it stands, management has said it is slowing down its plans for this plant, focusing now 100% on the first 5,000MT train, delaying installation of its second and third trains. The strategy is primarily one of cash preservation, but it creates some additional concerns as well. Namely, when poly production facilities are brought online, it takes some time to iron out the inefficiencies and this early period typically inflates operating costs, on a relative basis. The additional 10,000MT from the other two trains would presumably bring sufficient volume and economies of scale to help offset this effect. So with an anticipation of higher initial poly production costs, in a market where poly prices are widely expected to continue to decline, the implication for operating margins and further write offs is a concern.

On the positive side, management seems to have found a level of conservatism in its guidance and planning at this point that should serve it better. In addition to continued cost cutting measures, its liquidity position is relatively strong, with a cash balance of about $300 million, or roughly $2.50 per ADS, expected operating cash flow (based on 12% to 19% gross margin expectations), and more than $500 million available on its Line of Credit, the company should be able to navigate through the year without raising addition capital through equity. It intends to control cap ex through maintaining relatively level wafer capacity through the year (at about 1.5GW), monitoring market demand to determine when it makes sense to plan for further expansion. Management also indicated it is talking with Chinese banks about moving some of its short term debt into long-term bonds. Its revenue guidance this year is based on wafer shipment guidance of 1.45GW, even though it has a backlog this year of 1.7GW.

So management is being cautious and acknowledging risk in its forecasts for slippage from customers facing issues of their own. That being said, there is some additional upside to the guidance built in here as well if they are able to fulfill their backlog. Poly production has begun at the 1,000MT plant and management reiterated that it expects to reach full production capacity by mid-year. It is about 95% complete with respect to train 1 on its 15,000MT facility, and, as noted above, plans are to produce about 2,000 to 3,000MT of poly in 2009, which will bring cost benefits to the business as well. Though not as significant as it would have been if LDK had been able to stick to its guidance of 5,000 to 7,000MT for the year.

But in this environment, it makes sense to preserve cash and avoid trying to tap the capital markets – especially at current levels. Keep in mind last September it raised capital north of $40 per share. And don’t forget that LDK is the largest and lowest-cost wafer producer in the world. At $4.30, the company’s market cap is a paltry $513 million, or 0.32x FY09E revenue of $1.6 billion and 3.21x FY09E income of $160 million. It has about $2.50 in cash per share, and it is valuing its raw materials at about $500 million. Its backlog is massive, about 20GW in total. To put that in perspective, the management anticipates driving about $240 to $280 million in revenue on 200MW in the first quarter.

We are lowering our expected FY09 revenues to $1.6 billion from $2 billion, and income expectations for the year to $160 million, assuming 10% net margins. As we noted above, there are some legitimate reasons for concern over LDK’s near-term outlook, but at $4.30 we think the risk has been more than factored in, given the points made in the previous paragraph. We think a reasonable set of metrics for the stock, until visibility gets better in the solar sector, and until LDK can demonstrate that write offs and lowered guidance is behind us, is .8x FY09E revenues and 6xFY09E income, which would yield an implied market cap range of $960 million to $1.28 billion, and a target trading range of $8 to $10.

Disclosure: Todd Pitcher/Aspire is LONG LDK. The information provided here and in the comments are for informational purposes only and are not a solicitation to buy or sell any of these securities.
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Print this article with comments This article has 2 comments:
Register or Login to rate comments » caviar 1 Comment What is the likelihood of poly prices going back up sooner than expected? If it happens, could it reverse sensitively LDK's losses in the short term? Mar 12 11:02 AM | Link | Reply 00 dzr_greg 9 Comments Here is my take on this :
Poly price is like commodity. So if there is a little turnaround in the economy, Poly price will increase.
Concerning LDK,
The management looks more cautious, but their outlook on Poly production aren't reliable. They changed their position on it every month (their Earning statement is different then last month downside forecast).
Because of all that, i'm just worry about the accuracy of the management, i do feel that the market is more pricing lack of confident on the management then more LDK issue.

Now i also hope that they will reflect Poly stock price more on the margin then on write downs (i think it is perhaps the reason why margin will be around 6-8pct in Q1).
Long term is still bullish on LDK if they make through this crisis.... (that is closer to the end then the beginning i think and hope).
But renegociation of the debt will be important (long term debt over short term) and .... regain credibility from the management is the most important element. Mar 12 02:07 PM |

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From: OmertaSoldier5/22/2009 12:19:54 AM
   of 79
 
Q1 2009 report LDK Solar Reports Financial Results for First Quarter 2009
On Thursday May 21, 2009, 4:05 pm EDT
Buzz up! Print Related:LDK Solar Co.Ltd.
XINYU CITY, China and SUNNYVALE, Calif., May 21 /PRNewswire-FirstCall/ -- LDK Solar Co., Ltd. ("LDK Solar") (NYSE: LDK - News), a leading manufacturer of multicrystalline solar wafers, today reported its unaudited financial results for the first quarter ended March 31, 2009.

Related Quotes
Symbol Price Change
LDK 9.30 -0.55

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 (NYSE: LDK - News)

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

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From: OmertaSoldier5/23/2009 9:55:33 AM
   of 79
 
from alaph.......

May 22, 2009 – We sat in on LDK’s Q1 2009 conference call yesterday (notes below) and weren’t too surprised by anything we heard – declining ASPs, risk of further write-downs on poly inventory (although management thinks it can avoid this), and potential need to raise more capital through equity. All of these factors will continue to pressure the stock in the near term, until the company shows it is back on track with wafer shipment growth, works through some of that inventory which is priced in the $150 range and begins to prove out its poly manufacturing plan.

Based on management’s comments yesterday, we still think our target revenue for the company of $1.4 billion is attainable but we doubt the company will be able to post a profit this year, and have lowered our expectations from $98 million in income to a net loss of about $40 million. On a pro forma ratio basis, we are adjusting our target multiple of sales for a valuation down from 1 to 0.8, which would lower the high end of our price target from $11-12 down to the $9-$10 level, but we wouldn’t be surprised to see the stock dip lower than yesterday’s close at $9.30 in the near term.

Longer-term, we remain bullish on LDK, given it is the largest wafer company in the world, and it is the low-cost producer. As it brings its poly production on line, we think that it will achieve economies of scale promised by a vertical integration model which should drive margins higher. The problem is the near-term for the stock. We would be aggressively buying under $6 and continue to write out-of-the money covered calls when the stock pushes over $10. We last wrote September 15 (strike price) on the stock, and are feeling pretty good about that trade at this point.
Results

LDK reported a 33.6% Y/Y decline in Q1 revenues to $283.3 million, with gross margins of 1.7% and a net loss of $22.5 million, or $0.21 per share, compared with a net loss of $219 million in the prior quarter. Total wafer shipments decreased to 206MW from 254.3MW in Q4. Wafer sales increase slightly to 170.2MW from 157.6MW in Q4. ASP per watt in Q1 was $1.54, a decrease of 29.4% from the prior quarter. The company had $184.4 million in cash and equivalents at March 31, 2009, and $114.4 million in short-term pledged banks. It also has a RMB 1 billion credit line form the Ag Development Bank of China, and a loan for RMB 200 million from China Development Bank.
In terms of updates on expansion, management said it has scaled back plans to best reflect current demand levels and focus on cost reduction. It is maintaining wafer capacity at 1.5GW. In terms of poly, it began production in its 1,000MT facility in Q1. For its 15,000MT plan, focusing on first 5,000MT train, and is on track to achieve mechanical completion by Q2, 2009. It expects the second train to reach mechanical completion by Q3, 2009. The forecast for combined 2009 production will be between 2,000 and 3,000MT of poly. Management doesn’t expect the production to have a material impact on costs until 2010.
In terms of Q2 shipments, management expects to ship between 200 and 220MW.
Q&A
· Barclays – asked for additional color on gross margin and for comments on outlook for polysilicon.
A: Inventory write-downs were in Q4, 2008. Gross margins were pressured by ASP declines. Seeing price between $1.10 to $1.30 per watt. In the short term, the low price range will persist, but heading into the second half, expect prices to stabilize. In terms of poly prices, seeing price coming down to below $100 but it still at a pretty wide range.

· Morgan Stanley – wanted to understand balance sheet items, receivables, inventory… - receivables have gone up a lot. Wanted to know why AR is moving higher. On inventory, wanted to understand mix (raw materials vs. finished goods). On the receivables, customers have been challenged for working capital and LDK is selectively providing open terms for certain long-term customers. Management said AR is about $180 (roughly 2 months operations). The inventory is still primarily raw material. In terms of metric tons, it has about 1,700 to 1,800MT of raw material.

· Lazard – wanted to know price of raw materials that make up inventory, and whether there is any risk to further writedowns. Management said at current market price ($1.10 to $1.30) it doesn’t feel any need to write down any more inventory. Also asked about liquidity position of company. Management said it is working on L-T financing to replace S-T borrowings, and also working with commercial banks to replace S-T debt. Management said also, with improving market conditions, it may also issue further equity in a raise. Asked where they see wafer ASPs by the end of the year. Management said it has L-T contracts with certain prices already set up, but that they are working with their customers on pricing as well to help average down. It said its ASP is better than overall market average.

· Piper Jaffray – asked about annual audited report and when it will be available. Tomorrow. Asked also about Q4 adjustment and poly basis price before and after revision. Price was in the mid-$100 range. Asked about how much poly inventory they have. Said in the range of 1,700 to 1,800MT in inventory. Asked about whether there are any covenants associated with loans and credit line. Answered yes, and that they are in compliance, and the covenants will be published in annual report. Asked if ASP was $1.54 and costs were $1.50 and non-silicon costs were about $0.30 to $0.40…that means your poly price at 6 grams a watt was mid-$100s. Then you will have ASPs go down a bit, but what is the outlook for the poly price. Will you have to write down that inventory from $170 now to below $100 in order to maintain a break even gross margin? Answered that market price is below $100 and they are getting new purchase at such a level that they believe in next few quarters that prices will continue to drop.
Asked if we should expect to write down another $50/kg. Management said at this point, doesn’t expect further write downs based on current market price. Asked how can there not be another write down. Said price in Q1 was $1.54. Even at $100 cost, would still manage to have break even margins, but very thin, until the market condition improves.

· Needham – asked about inventory costs. Management said at end of Q1 at close to mid-$100 and right now closer to $100 and below.

· Oppenheimer – what makes you feel so comfortable about selling at $1.10 to $1.30 this year when many of your competitors are selling lower? Said that they have L-T contracts with market leaders, and products have strong quality. This enables them to have a premium. Asked about assuming macro market to remain sluggish, will the L-T take or pay contracts be renegotiated? Said contracts vary but most are priced on wafer. Asked about BP Solar deal. Said they don’t discuss specifics with contracts. Asked about how much tolling MW this year? Said about 15% of capacity.
Asked about what they expect cost/kg for poly out of the plant this year. Said still in startup phase. Objective is to move it down to $30+. But this year, in the high $80 range for poly production. Asked about, in the case that they fail to get costs down, if there are any strategic alternatives? Said this is one of the reasons that they are building the plant they are building, which will enable them to get to the price levels to be competitive in poly in markets like this.

· Soleil – follow up on production costs for poly. At $80, assumption this is fully-loaded. Answered yes. Asked to talk about what true variable cost of production will be and how this will decline over time. Answered that they have the reactors in place. Thinks they need a period of time to stabilize the process. They think they can get this process down pretty quickly and start producing poly at least at levels they are paying on the market now. Asked about capital spending for FY2009. Answered on wafer side, have 1.5GW capacity and should have sufficient capacity to run. As far as poly plant, the focus is on the first 5,000MT train and second train is almost complete. The spending here to finish this shouldn’t be too much at this point. Said capital spending could be as low as $600 million this year.

· Cowen – asked about cash flow from operations for the quarter. Answered negative $75 million.
Disclosure: Todd Pitcher is long LDK.

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