LDK Solar Co., Ltd. - Asia Europe Clean Energy (Solar) Advisory Co ...

Year Ended
December 31, 2006
(in thousands) (% of net sales)
Accretion of Series A preferred shares to redemption valueÏÏÏ (814)
Accretion of Series B preferred shares to redemption value ÏÏÏ (1,799)
Accretion of Series C preferred shares to redemption valueÏÏÏ (116)
Deemed dividend to Series A preferred shareholders ÏÏÏÏÏÏÏÏ (1,568)
Net income available to ordinary shareholders ÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $ 25,885
Since we made our first commercial sale of multicrystalline wafers in April 2006, we experienced
significant growth in sales volume in the second, third and last quarters of 2006.
For the year ended December 31, 2006, we had net sales of $105.5 million, gross profit of $41.5 million,
net income of $30.2 million and net income available to ordinary shareholders of $25.9 million. Our gross
margin for the year ended December 31, 2006 was 39.3%; our operating margin for the year was 35.2%; and
our net margin for the year was 28.6%.
Selected unaudited quarterly financial data
The following table provides a comparison of our quarterly results of operations for the periods indicated
and as a percentage of our net sales for the respective periods indicated:
Three Months Ended Three Months Ended Three Months Ended Three Months Ended
June 30, 2006 September 30, 2006 December 31, 2006 March 31, 2007
(in thousands, (% of net sales) (in thousands, (% of net sales) (in thousands, (% of net sales) (in thousands, (% of net sales)
except per except per except per except per
share and per share and per share and per share and per
ADS data) ADS data) ADS data) ADS data)
Net salesÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $12,144 100.0% $ 31,450 100.0% $61,860 100.0% $73,400 100.0%
Cost of goods sold ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (9,588) (79.0) (19,069) (60.6) (35,305) (57.1) (45,020) (61.3)
Gross profitÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 2,556 21.0 12,381 39.4 26,555 42.9 28,380 38.7
Selling expenses ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (85) (0.7) (117) (0.4) (84) (0.1) (183) (0.2)
General and administrative expensesÏÏ (345) (2.8) (1,633) (5.2) (1,664) (2.7) (1,819) (2.5)
Research and development expenses ÏÏ (15) (0.1) (76) (0.2) (199) (0.3) (261) (0.4)
Total operating expensesÏÏÏÏÏÏÏÏÏÏ (445) (3.6) (1,826) (5.8) (1,947) (3.1) (2,263) (3.1)
Income from operations ÏÏÏÏÏÏÏÏÏÏÏÏ
Other income/(expenses):
2,111 17.4 10,555 33.6 24,608 39.8 26,117 35.6
Interest income ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ
Interest expense and amortization of
22 0.2 26 0.1 26 0.0 25 0.0
discount on exchangeable notes ÏÏ (837) (6.9) (4,961) (15.8) (995) (1.6) (1,529) (2.1)
Decrease in fair value of warrants ÏÏ Ì Ì 9 0.0 Ì Ì Ì Ì
Foreign currency exchange loss, net (36) (0.3) (667) (2.1) (566) (0.9) (516) (0.7)
Government subsidy ÏÏÏÏÏÏÏÏÏÏÏÏÏ Ì Ì Ì Ì 1,268 2.0 437 0.6
Income before income tax benefit ÏÏÏÏ 1,260 10.4 4,962 15.8 24,341 39.3 24,534 33.4
Income tax benefitÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 57 0.5 Ì Ì 2 (0.0) Ì Ì
Net incomeÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ
Accretion of Series A preferred shares
$ 1,317 10.9% $ 4,962 15.8% $24,343 39.3% $24,534 33.4%
to redemption valueÏÏÏÏÏÏÏÏÏÏÏÏÏÏ
Accretion of Series B preferred shares
Ì (262) (552) (512)
to redemption valueÏÏÏÏÏÏÏÏÏÏÏÏÏÏ
Accretion of Series C preferred shares
Ì (267) (1,532) (1,625)
to redemption valueÏÏÏÏÏÏÏÏÏÏÏÏÏÏ
Deemed dividend to Series A
Ì Ì (116) (805)
preferred shareholders ÏÏÏÏÏÏÏÏÏÏÏÏ
Net income available to ordinary
Ì (1,568) Ì Ì
shareholders ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ
Net income per ordinary share
$ 1,317 $ 2,865 $22,143 $21,592
Basic ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $ 0.02 $ 0.04 $ 0.30 $ 0.29
Diluted ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ
Net income per ADS
$ 0.02 $ 0.04 $ 0.28 $ 0.27
Basic ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $ 0.02 $ 0.04 $ 0.30 $ 0.29
Diluted ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $ 0.02 $ 0.04 $ 0.28 $ 0.27
56