CHONGQING, China, Aug. 7, 2018 /PRNewswire/ -- Daqo New Energy
Corp. (NYSE: DQ) ("Daqo New Energy", the "Company" or "we"), a
leading manufacturer of high-purity polysilicon for the global
solar PV industry, today announced its unaudited financial results
for the second quarter of 2018.
Second Quarter 2018 Financial and Operating
Highlights
- Polysilicon production volume of 5,659
MT in Q2 2018, compared to 5,657
MT in Q1 2018
- Polysilicon external sales volume(1) of 3,881 MT in
Q2 2018, compared to 5,411 MT in Q1
2018
- Polysilicon average total production cost(2) of
$9.05/kg in Q2 2018, compared to
$9.19/kg in Q1 2018
- Polysilicon average cash cost(2) of $7.43/kg in Q2 2018, compared to $7.53/kg in Q1 2018
- Polysilicon average selling price (ASP) was $16.22/kg in Q2 2018, compared to $17.68/kg in Q1 2018
- Solar wafer sales volume of 9.8 million pieces in Q2 2018,
compared to 13.3 million pieces in Q1 2018
- Revenue of $67.0 million in Q2
2018, compared to $103.3 million in
Q1 2018
- Gross profit of $27.2 million in
Q2 2018, compared to $46.2 million in
Q1 2018. Gross margin was 40.6% in Q2 2018, compared to 44.8% in Q1
2018
- Non-GAAP gross margin(3) of 41.2% in Q2 2018,
compared to 45.2% in Q1 2018
- EBITDA (non-GAAP)(3) of $31.0
million in Q2 2018, compared to $51.7
million in Q1 2018
- EBITDA margin (non-GAAP)(3) of 46.3% in Q2 2018,
compared to 50.0% in Q1 2018
- Net income attributable to Daqo New Energy shareholders of
$13.4 million in Q2 2018, compared to
$31.6 million in Q1 2018 and
$12.1 million in Q2 2017
- Earnings per basic American Depository Share (ADS) of
$1.06 in Q2 2018, compared to
$2.91 in Q1 2018, and $1.15 in Q2 2017
- Adjusted net income (non-GAAP)(3) attributable to
Daqo New Energy shareholders of $18.2
million in Q2 2018, compared to $32.9
million in Q1 2018 and $13.8
million in Q2 2017
- Adjusted earnings per basic ADS (non-GAAP)(3) of
$1.44 in Q2 2018, compared to
$3.03 in Q1 2018, and $1.31 in Q2 2017
`
|
Three months
ended
|
US$
millions except as indicated
otherwise
|
June 30,
2018
|
March 31,
2018
|
June 30,
2017
|
Revenues
|
67.0
|
103.3
|
76.0
|
Gross
profit
|
27.2
|
46.2
|
24.2
|
Gross
margin
|
40.6%
|
44.8%
|
31.9%
|
Operating
income
|
21.0
|
41.7
|
20.2
|
Net income
attributable to Daqo New
Energy Corp. shareholders
|
13.4
|
31.6
|
12.1
|
Earnings per basic ADS
($ per ADS)
|
1.06
|
2.91
|
1.15
|
Adjusted net income
(non-GAAP)(3)
attributable to Daqo New Energy
Corp. shareholders
|
18.2
|
32.9
|
13.8
|
Adjusted earnings per
basic ADS (non-
GAAP)(3) ($ per ADS)
|
1.44
|
3.03
|
1.31
|
Non-GAAP gross
profit(3)
|
27.6
|
46.6
|
24.8
|
Non-GAAP gross
margin(3)
|
41.2%
|
45.2%
|
32.6%
|
EBITDA
(non-GAAP)(3)
|
31.0
|
51.7
|
29.8
|
EBITDA
margin(3) (non-GAAP)
|
46.3%
|
50.0%
|
39.2%
|
Polysilicon sales
volume (MT) (1)
|
3,881
|
5,411
|
4,497
|
Polysilicon production
cost ($/kg)(2)
|
9.05
|
9.19
|
8.53
|
Polysilicon cash cost
(excl. dep'n)
($/kg)(2)
|
7.43
|
7.53
|
6.77
|
|
|
|
|
Notes:
(1) The Company's polysilicon external
sales volume excludes internal sales to Daqo New Energy's
Chongqing wafer manufacturing
subsidiary, which utilizes polysilicon as raw material for the
production of solar wafers. The sales volume is the quantity of
goods that have been received by external customers, and thus the
corresponding revenue has been recognized during the period
indicated.
(2) Production cost and cash cost only
refer to production in our Xinjiang polysilicon facilities.
Production cost is calculated by the inventoriable costs relating
to production of polysilicon in Xinjiang divided by the production
volume in the period indicted. Cash cost is calculated by the
inventoriable costs relating to production of polysilicon excluding
depreciation expense in Xinjiang, divided by the production volume
in the period indicated.
(3) Daqo New Energy provides non-GAAP gross profit,
non-GAAP gross margin, EBITDA, EBITDA margin, adjusted net income
attributable to Daqo New Energy Corp. shareholders and adjusted
earnings per ADS on a non-GAAP basis to provide supplemental
information regarding its financial performance. For more
information on these non-GAAP financial measures, please see the
section captioned "Use of Non-GAAP Financial Measures" and the
tables captioned "Reconciliation of non-GAAP financial measures to
comparable US GAAP measures" set forth at the end of this press
release.
Management Remarks
"We remain confident in the long-term sustainable growth of the
polysilicon industry despite the impact by the new solar PV
policies issued by the Chinese government on May 31, 2018," commented Mr. Longgen Zhang, CEO
of Daqo New Energy. "The new solar policies caused uncertainty in
the domestic solar market and impacted downstream demand in June.
Leveraging our strong cash position and efficient corporate
management, we maintained full production capacity and resumed
shipments when customer demand and pricing stabilized in early
July. With our production facilities now running at full capacity
and inventory at low levels, we are reiterating our full year
polysilicon production guidance of 22,000 to 23,000 MT."
"Utilization levels and demand from our downstream customers
improved in July. According to the China Silicon Association,
approximately 30-35% of China's
domestic polysilicon production capacity has been shut down as
those producers are unable to survive at the current market prices.
With supply becoming increasingly limited and demand gradually
recovering, polysilicon ASPs began to improve during July."
"Despite the challenging market environment in China, demand for solar PV products remains
healthy and robust for the rest of the world. New emerging markets
in Latin America and the
Middle East are booming with
growing demand. India in
particular is expected to grow rapidly. With grid parity
approaching in many markets, such as Europe and the US, project developers are more
aggressive in their bids. With solar PV markets outside of
China accounting for an increasing
percentage of our downstream customer's shipments, we are confident
in the long-term sustainable growth of the polysilicon industry and
our ability to benefit from this growth by increasing our
production capacity and improving our cost structure and
polysilicon purity."
"I am pleased with our performance in this quarter and our
ability to remain flexible and rapidly adapt our business to a
challenging market environment. EBITDA during the quarter was
$31.0 million and we generated
$67.1 million in cash flow from
operations during the first half of 2018. We are one of the very
few polysilicon producers able to continuously generate positive
EBIT, net income, and operation cash flow in this challenging
market environment. In addition, we expect to complete our Phase
3B expansion project and start pilot
production in the fourth quarter of 2018, which will increase our
annual capacity to 30,000 MT and
further reduce our polysilicon production cost by approximately
$1 per kilogram across our entire
production facility. We believe that demand for our high-quality
polysilicon products will continue to grow over the long-term as
solar PV is becoming increasingly cost competitive and less
dependent on government policies and subsidies. Our strong balance
sheet, sufficient operating cash flow and newly added capacity
coming online will help us to further solidify our position as the
polysilicon manufacturing leader."
Other Corporate Developments
In April 2018, the Company issued
2,064,379 ADSs, representing 51,609,475 ordinary shares, through a
follow-on offering, at $55.00 per
ADS. The proceeds, net of underwriting commission and issuance
cost, were $106.6 million.
In May 2018, Xinjiang Daqo New Energy, one of the Company's
subsidiaries, voluntarily delisted from the China New Third
Board for better use of our resources and to save unnecessary
listing costs, because the effectiveness and efficiency of
financing activities on the China New Third Board did not meet the
Company's expectations.
Outlook and guidance
The Company will begin a scheduled maintenance shutdown for its
Xinjiang polysilicon facility in September, which is expected to
impact polysilicon production by approximately 2 to 3 weeks based
on current maintenance plans. During this period, in additional to
the scheduled annual maintenance work, the Company will also
connect the newly constructed phase 3B facility to its existing facilities, upgrade
technology across all of its facilities and install various
manufacturing efficiency projects. As such, the Company
expects to produce approximately 4,100
MT to 4,300 MT of polysilicon
and sell approximately 5,900 MT to
6,100 MT of polysilicon to external
customers during the third quarter of 2018. The above external
sales guidance excludes shipments of polysilicon to be used
internally by the Company's Chongqing solar wafer facility, which utilizes
polysilicon for its wafer manufacturing operation. Wafer sales
volume is expected to be approximately 7.0 million to 8.0 million
pieces for the third quarter of 2018. For the full year 2018, the
Company expects to produce approximately 22,000 to 23,000 MT of polysilicon, inclusive of the impact of
our annual facility maintenance.
This outlook reflects Daqo New Energy's current and preliminary
view as of the date of this press release and may be subject to
change. The Company's ability to achieve these projections is
subject to risks and uncertainties. See "Safe Harbor Statement" at
the end of this press release.
Second Quarter 2018 Results
Revenues
Revenues were $67.0 million,
compared to $103.3 million in the
first quarter of 2018 and $76.0
million in the second quarter of 2017.
Revenues from polysilicon sales to external customers were
$63.0 million, compared to
$95.6 million in the first quarter of
2018 and $61.1 million in the second
quarter of 2017. External polysilicon sales volume was 3,881 MT,
compared to 5,411 MT in the first
quarter of 2018, and 4,497 MT in the second quarter of 2017. The
decrease in revenues from polysilicon was primarily due to lower
polysilicon sales volumes and lower ASPs. The Chinese government
issued new solar PV policies on May 31,
2018, which are expected to reduce solar installation quotas
and feed-in tariffs in China
during the second half of 2018. This created uncertainty in the
domestic solar market and negatively impacted downstream
demand.
Revenues from wafer sales were $4.0
million, compared to $7.6
million in the first quarter of 2018 and $14.9 million in the second quarter of 2017.
Wafer sales volume was 9.8 million pieces, compared to 13.3 million
pieces in the first quarter of 2018 and 27.0 million pieces in the
second quarter of 2017. The sequential decrease in revenues from
wafer sales was primarily due to lower sales volumes and lower
ASPs.
Gross profit and margin
Gross profit was approximately $27.2
million, compared to $46.2
million in the first quarter of 2018 and $24.2 million in the second quarter of 2017.
Non-GAAP gross profit, which excludes costs related to the
non-operational polysilicon assets in Chongqing, was approximately $27.6 million, compared to $46.6 million in the first quarter of 2018 and
$24.8 million in the second quarter
of 2017.
Gross margin was 40.6%, compared to 44.8% in the first quarter
of 2018 and 31.9% in the second quarter of 2017. The sequential
decrease was primarily due to a decrease in ASPs which was
partially offset by a decrease in average polysilicon production
cost.
In the second quarter of 2018, total costs related to the
non-operational Chongqing
polysilicon assets including depreciation were $0.4 million, compared to $0.4 million in the first quarter of 2018 and
$0.5 million in the second quarter of
2017. Excluding such costs, non-GAAP gross margin was approximately
41.2%, compared to 45.2% in the first quarter of 2018 and 32.6% in
the second quarter of 2017.
Selling, general and administrative expenses
Selling, general and administrative (SG&A) expenses were
$7.8 million, compared to
$4.8 million in the first quarter of
2018 and $4.5 million in the second
quarter of 2017. The increase in SG&A was primarily due to the
increase of non-cash share-based compensation costs related to the
Company's 2018 share incentive plan.
Research and development expenses
Research and development (R&D) expenses were approximately
$0.2 million, compared to
$0.1 million in the first quarter of
2017 and $0.3 million in the second
quarter of 2017. Research and development expenses can vary from
period to period and reflect R&D activities that took place
during each period.
Other operating income
Other operating income was $1.9
million, compared to $0.4
million in the first quarter of 2018 and $0.8 million in the second quarter of 2017. Other
operating income mainly consists of unrestricted cash incentives
that the Company received from local government authorities, the
amount of which varies from period to period.
Operating income and margin
As a result of the foregoing, operating income was $21.0 million, compared to $41.7 million in the first quarter of 2018 and
$20.2 million in the second quarter
of 2017. Operating margin was 31.4%, compared to 40.4% in the first
quarter of 2017 and 26.6% in the second quarter of 2017.
Interest expense
Interest expense was $3.4 million,
compared to $4.1 million in the first
quarter of 2018 and $5.3 million in
the second quarter of 2017.
EBITDA
EBITDA was $31.0 million, compared
to $51.7 million in the first quarter
of 2018 and $29.8 million in the
second quarter of 2017. EBITDA margin was 46.3%, compared to 50.0%
in the first quarter of 2018 and 39.2% in the second quarter of
2017.
Net income attributable to Daqo New Energy Corp.
shareholders and earnings per ADS
As a result of the foregoing, net income attributable to Daqo
New Energy Corp. shareholders was $13.4
million, compared to $31.6
million in the first quarter of 2018 and $12.1 million in the second quarter of 2017.
Earnings per basic ADS were $1.06,
compared to $2.91 in the first
quarter of 2018 and $1.15 in the
second quarter of 2017.
Financial Condition
As of June 30, 2018, the Company
had $179.3 million in cash, cash
equivalents and restricted cash, compared to $83.0 million as of March
31, 2018 and $49.8 million as
of June 30, 2017. As of June 30, 2018, the accounts receivable balance
was $0.3 million, compared to
$2.0 million as of March 31, 2018 and $3.8
million as of June 30, 2017.
As of June 30, 2018, the notes
receivable balance was $19.3 million,
compared to $49.7 million as of
March 31, 2018 and $10.5 million as of June
30, 2017. As of June 30, 2018,
total borrowings were $195.7 million,
of which $92.9 million were long-term
borrowings, compared to total borrowings of $217.8 million, including $108.4 million long-term borrowings, as of
March 31, 2018 and total borrowings
of $219.3 million, including
$123.1 million long-term borrowings,
as of June 30, 2017.
In April 2018, the Company issued
2,064,379 ADSs, representing 51,609,475 ordinary shares, through a
follow-on offering, at $55.00 per
ADS. The proceeds, net of underwriting commission and issuance
cost, were $106.6 million.
Cash Flows
For the six months ended June 30,
2018, net cash provided by operating activities was
$67.1 million, compared to
$73.6 million in the same period of
2017. The decrease was primarily due to an increase of inventory
balance, as well as payment of tax expense.
For the six months ended June 30,
2018, net cash used in investing activities was $52.5 million, compared to $32.9 million in the same period of 2017. The net
cash used in investing activities in the first half of 2018 and
2017 was primarily related to the capital expenditure on the
Xinjiang polysilicon projects.
For the six months ended June 30,
2018, net cash provided by financing activities was
$93.2 million, compared to net cash
used in financing activities of $23.4
million in the same period of 2017. The increase was
primarily due to net proceeds from follow-on offering.
Use of Non-GAAP Financial Measures
To supplement Daqo New Energy's consolidated financial results
presented in accordance with United States Generally Accepted
Accounting Principles ("US GAAP"), the Company uses certain
non-GAAP financial measures that are adjusted for certain items
from the most directly comparable GAAP measures including non-GAAP
gross profit and non-GAAP gross margin; earnings before interest,
taxes, Depreciation & Amortization ("EBITDA") and EBITDA
margin; adjusted net income attributable to Daqo New Energy Corp.
shareholders and adjusted earnings per basic ADS. Management
believes that each of these non-GAAP measures is useful to
investors, enabling them to better assess changes in key element of
the Company's results of operations across different reporting
periods on a consistent basis, independent of certain items as
described below. Thus, management believes that, used in
conjunction with US GAAP financial measures, these non-GAAP
financial measures provide investors with meaningful supplemental
information to assess the Company's operating results in a manner
that is focused on its ongoing, core operating performance.
Management uses these non-GAAP measures internally to assess the
business, its financial performance, current and historical
results, as well as for strategic decision-making and forecasting
future results. Given management's use of these non-GAAP
measures, the Company believes these measures are important to
investors in understanding the Company's operating results as seen
through the eyes of management. These non-GAAP measures are
not prepared in accordance with US GAAP or intended to be
considered in isolation or as a substitute for the financial
information prepared and presented in accordance with US GAAP; the
non-GAAP measures should be reviewed together with the US GAAP
measures, and may be different from non-GAAP measures used by other
companies.
Non-GAAP gross profit and non-GAAP gross margin includes
adjustments for costs related to the non-operational polysilicon
assets in Chongqing. Such costs
mainly consist of non-cash depreciation costs, as well as utilities
and maintenance costs associated with the temporarily idle
polysilicon machinery and equipment, which will be or are in the
process of being relocated to the Company's Xinjiang polysilicon
manufacturing facility. The Company expects a majority of these
costs, such as depreciation, will continue to occur as part of the
production cost at the Xinjiang facilities subsequent to the
completion of the relocation plan. Once these assets are placed
back in service, the Company will remove this adjustment from the
non-GAAP reconciling item. The Company also uses EBITDA, which
represents earnings before interest, taxes, depreciation and
amortization, and EBITDA margin, which represents the proportion of
EBITDA in revenues. Adjusted net income attributable to Daqo
New Energy Corp. shareholders and adjusted earnings per basic ADS
exclude costs related to the non-operational polysilicon assets in
Chongqing as described
above. Adjusted net income attributable to Daqo New Energy
Corp. shareholders and adjusted earnings per basic ADS also exclude
costs related to share-based compensation. Share-based compensation
is a non-cash expense that varies from period to period. As a
result, management excludes this item from its internal operating
forecasts and models. Management believes that this adjustment for
share-based compensation provides investors with a basis to measure
the company's core performance, including compared with the
performance of other companies, without the period-to-period
variability created by share-based compensation.
A reconciliation of non-GAAP financial measures to comparable US
GAAP measures is presented later in this document.
Conference Call
The Company has scheduled a conference call to discuss the
results at 8:00 AM Eastern Time on
August 7, 2018.
The dial-in details for the live conference call are as
follows:
Participant dial in
(toll free):
|
+1-888-346-8982
|
Participant
international dial in:
|
+1-412-902-4272
|
China mainland toll
free:
|
4001-201203
|
Hong Kong toll
free:
|
800-905945
|
Hong Kong-local
toll:
|
+852-301-84992
|
Participants please
ask to be joined into the Daqo New Energy Corp. call.
|
|
|
|
|
A replay of the call will be available 1 hour after the end of
the conference through August 14,
2018.
The conference call replay numbers are as follows:
US Toll
Free:
|
+1-877-344-7529
|
International
Toll:
|
+1-412-317-0088
|
Canada Toll
Free:
|
855-669-9568
|
Replay access
code:
|
10122848
|
To access the replay using an international dial-in number,
please select the link below.
https://services.choruscall.com/ccforms/replay.html
Participants will be required to state their name and company
upon entering the call.
ABOUT DAQO NEW ENERGY CORP.
Daqo New Energy Corp. (NYSE: DQ) ("Daqo" or the "Company) is a
leading manufacturer of high-purity polysilicon for the global
solar PV industry. Founded in 2008, the Company is one of the
world's lowest cost producers of high-purity polysilicon and solar
wafers. Daqo primarily sells its products to solar cell and solar
module manufacturers across the globe and is also a leading
supplier of ultra-high-quality polysilicon for the production of
high-efficiency mono-crystalline solar products. Daqo's
highly-efficient and technically advanced manufacturing facility in
Xinjiang Province currently has annual polysilicon production
capacity of 18,000 metric tons, and the Company is undergoing
capacity expansion to reach annual polysilicon production capacity
of 30,000 metric tons by the end of 2018. The Company also operates
a solar wafer manufacturing facility in Chongqing, China.
For more information, please visit http://daqo.gotoip1.com/
Safe Harbor Statement
This announcement contains forward-looking statements. These
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" and similar statements. Among other things,
the outlook for the third quarter of 2018 and quotations from
management in this announcement, as well as Daqo New Energy's
strategic and operational plans, contain forward-looking
statements. The Company may also make written or oral
forward-looking statements in its reports filed or furnished to the
U.S. Securities and Exchange Commission, in its annual reports 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 the Company'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 those contained in any
forward-looking statement, including but not limited to the
following: the demand for photovoltaic products and the development
of photovoltaic technologies; global supply and demand for
polysilicon; alternative technologies in cell manufacturing; our
ability to significantly expand our polysilicon production capacity
and output; the reduction in or elimination of government subsidies
and economic incentives for solar energy applications; and our
ability to lower our production costs. Further information
regarding these and other risks is included in the reports or
documents we have filed with, or furnished to, the Securities and
Exchange Commission. Daqo New Energy does not undertake any
obligation to update any forward-looking statement, except as
required under applicable law. All information provided in this
press release and in the attachments is as of the date of this
press release, and Daqo New Energy undertakes no duty to update
such information, except as required under applicable law.
Daqo New Energy
Corp.
|
Unaudited
Condensed Consolidated Statement of Operations and Comprehensive
Income
|
(US dollars in
thousands, except ADS and per ADS data)
|
|
|
|
|
|
|
|
|
|
|
Three months
Ended
|
|
|
|
Jun 30,
2018
|
|
Mar 31,
2018
|
|
Jun 30,
2017
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
$66,953
|
|
$103,274
|
|
$76,002
|
|
Cost of
revenues
|
|
(39,783)
|
|
(57,052)
|
|
(51,757)
|
|
Gross
profit
|
|
27,170
|
|
46,222
|
|
24,245
|
|
Operating
expenses
|
|
|
|
|
|
|
|
Selling, general and
administrative expenses
|
|
(7,810)
|
|
(4,806)
|
|
(4,514)
|
|
Research and
development expenses
|
|
(209)
|
|
(121)
|
|
(279)
|
|
Other operating
income
|
|
1,855
|
|
446
|
|
751
|
|
Total operating
expenses
|
|
(6,164)
|
|
(4,481)
|
|
(4,042)
|
|
Income from
operations
|
|
21,006
|
|
41,741
|
|
20,203
|
|
Interest
expense
|
|
(3,403)
|
|
(4,054)
|
|
(5,288)
|
|
Interest
income
|
|
380
|
|
156
|
|
111
|
|
Foreign exchange gain
(loss)
|
|
(5)
|
|
(6)
|
|
2
|
|
Income before income
taxes
|
|
17,978
|
|
37,837
|
|
15,028
|
|
Income tax
expense
|
|
(4,377)
|
|
(5,864)
|
|
(2,768)
|
|
Net income
|
|
13,601
|
|
31,973
|
|
12,260
|
|
Net income
attributable to non-controlling interest
|
|
195
|
|
339
|
|
135
|
|
Net income
attributable to Daqo New Energy Corp.
shareholders
|
|
$13,406
|
|
$31,634
|
|
$12,125
|
|
|
|
|
|
|
|
|
|
Net income
|
|
13,601
|
|
31,973
|
|
12,260
|
|
Other comprehensive
income:
|
|
|
|
|
|
|
|
Foreign currency
translation adjustments
|
|
(23,412)
|
|
14,826
|
|
4,904
|
|
Total other
comprehensive income
|
|
(23,412)
|
|
14,826
|
|
4,904
|
|
Comprehensive income
(loss)
|
|
(9,811)
|
|
46,799
|
|
17,164
|
|
Comprehensive income
attributable to non-controlling interest
|
|
19
|
|
446
|
|
167
|
|
Comprehensive income
(loss) attributable to Daqo New
Energy Corp. shareholders
|
|
$(9,830)
|
|
$46,353
|
|
$16,997
|
|
|
|
|
|
|
|
|
|
Income per
ADS
|
|
|
|
|
|
|
|
Basic
|
|
1.06
|
|
2.91
|
|
1.15
|
|
Diluted
|
|
1.00
|
|
2.79
|
|
1.14
|
|
Weighted average ADS
outstanding
|
|
|
|
|
|
|
|
Basic
|
|
12,630,578
|
|
10,853,166
|
|
10,529,730
|
|
Diluted
|
|
13,364,509
|
|
11,341,860
|
|
10,678,845
|
|
Daqo New Energy
Corp.
|
Unaudited
Consolidated Balance Sheet
|
(US dollars in
thousands)
|
|
|
|
|
|
|
|
|
|
|
Jun 30,
2018
|
|
Mar 31,
2018
|
|
Jun 30,
2017
|
|
|
|
|
|
|
|
|
|
ASSETS:
|
|
|
|
|
|
|
|
Current
Assets:
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$160,298
|
|
$62,386
|
|
$30,443
|
|
Restricted
cash
|
|
18,964
|
|
20,592
|
|
19,403
|
|
Accounts receivable,
net
|
|
294
|
|
2,035
|
|
3,796
|
|
Notes
receivable
|
|
19,332
|
|
49,723
|
|
10,540
|
|
Prepaid expenses and
other current assets
|
|
8,496
|
|
8,278
|
|
7,011
|
|
Advances to
suppliers
|
|
1,755
|
|
2,054
|
|
1,688
|
|
Inventories
|
|
33,657
|
|
19,502
|
|
15,981
|
|
Amount due from related
parties
|
|
11,121
|
|
4,964
|
|
1,386
|
|
Total current
assets
|
|
253,917
|
|
169,534
|
|
90,248
|
|
Property, plant and
equipment, net
|
|
597,388
|
|
601,758
|
|
554,062
|
|
Prepaid land use
right
|
|
25,155
|
|
26,686
|
|
25,125
|
|
Deferred tax
assets
|
|
702
|
|
740
|
|
600
|
|
Investment in an
affiliate
|
|
675
|
|
712
|
|
596
|
|
TOTAL
ASSETS
|
|
877,837
|
|
799,430
|
|
670,631
|
|
|
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
|
Short-term borrowings,
including current portion of
long-term borrowings
|
|
102,746
|
|
109,485
|
|
96,158
|
|
Accounts
payable
|
|
19,729
|
|
21,854
|
|
20,972
|
|
Notes
payable
|
|
26,971
|
|
31,826
|
|
26,080
|
|
Advances from
customers
|
|
19,208
|
|
9,664
|
|
10,483
|
|
Payables for
purchases of property, plant and
equipment
|
|
19,161
|
|
17,996
|
|
25,839
|
|
Accrued expenses and
other current liabilities
|
|
7,222
|
|
14,471
|
|
9,426
|
|
Amount due to related
parties
|
|
6,635
|
|
7,078
|
|
12,612
|
|
Income tax
payable
|
|
5,233
|
|
11,650
|
|
6,386
|
|
Total current
liabilities
|
|
206,905
|
|
224,024
|
|
207,506
|
|
Long-term
borrowings
|
|
92,915
|
|
108,360
|
|
123,145
|
|
Other long-term
liabilities
|
|
23,399
|
|
24,861
|
|
23,509
|
|
Advance from
customers - long term portion
|
|
11,181
|
|
-
|
|
-
|
|
TOTAL
LIABILITIES
|
|
334,400
|
|
357,245
|
|
354,160
|
|
|
|
|
|
|
|
|
|
EQUITY:
|
|
|
|
|
|
|
|
Ordinary
shares
|
|
33
|
|
27
|
|
27
|
|
Treasury
stock
|
|
(1,749)
|
|
(1,749)
|
|
(1,749)
|
|
Additional paid-in
capital
|
|
358,992
|
|
247,935
|
|
242,372
|
|
Accumulated
gains
|
|
178,313
|
|
164,907
|
|
75,451
|
|
Accumulated other
comprehensive income
|
|
4,590
|
|
27,826
|
|
(1,697)
|
|
Total Daqo New Energy
Corp.'s shareholders' equity
|
|
540,179
|
|
438,946
|
|
314,404
|
|
Non-controlling
interest
|
|
3,258
|
|
3,239
|
|
2,067
|
|
Total
equity
|
|
543,437
|
|
442,185
|
|
316,471
|
|
TOTAL LIABILITIES
& EQUITY
|
|
877,837
|
|
799,430
|
|
670,631
|
|
Daqo New Energy
Corp.
|
Unaudited
Consolidated Statements of Cash Flows
|
(US dollars in
thousands)
|
|
|
|
For the six months
ended June 30,
|
|
|
2018
|
|
2017
|
|
Operating
Activities:
|
|
|
|
|
|
Net income
|
|
$45,573
|
|
$35,411
|
|
Adjustments to
reconcile net income to net cash provided by
operating activities:
|
|
|
|
|
|
Share-based compensation
|
|
5,243
|
|
1,985
|
|
Inventory
write-down
|
|
412
|
|
-
|
|
Reversal
of allowance for doubtful accounts
|
|
-
|
|
(3)
|
|
Depreciation of property, plant and equipment
|
|
19,644
|
|
19,208
|
|
Disposal
of assets loss
|
|
-
|
|
23
|
|
|
|
|
|
|
|
Changes in operating
assets and liabilities:
|
|
|
|
|
|
Accounts
receivable
|
|
2,732
|
|
1,161
|
|
Notes
receivable
|
|
7,786
|
|
2,800
|
|
Prepaid
expenses and other current assets
|
|
(1,039)
|
|
1,211
|
|
Advances
to suppliers
|
|
889
|
|
76
|
|
Inventories
|
|
(15,371)
|
|
(3,403)
|
|
Amount due
from related parties
|
|
2,852
|
|
182
|
|
Amount due
to related parties
|
|
637
|
|
275
|
|
Prepaid
land use rights
|
|
304
|
|
285
|
|
Accounts
payable
|
|
(2,383)
|
|
1,776
|
|
Notes
payable
|
|
2,665
|
|
8,302
|
|
Accrued
expenses and other current liabilities
|
|
(8,981)
|
|
904
|
|
Income tax
payable
|
|
(8,041)
|
|
958
|
|
Advances
from customers
|
|
14,537
|
|
2,782
|
|
Deferred
government subsidies
|
|
(356)
|
|
(334)
|
|
Net cash provided by
operating activities
|
|
67,103
|
|
73,599
|
|
|
|
|
|
|
|
Investing
activities:
|
|
|
|
|
|
Purchases of property,
plant and equipment
|
|
(52,537)
|
|
(32,894)
|
|
Net cash used in
investing activities
|
|
(52,537)
|
|
(32,894)
|
|
|
|
|
|
|
|
Financing
activities:
|
|
|
|
|
|
Proceeds from related
parties loans
|
|
53,049
|
|
39,697
|
|
Repayment of related
parties loans
|
|
(52,957)
|
|
(59,565)
|
|
Proceeds from bank
borrowings
|
|
13,353
|
|
32,953
|
|
Repayment of bank
borrowings
|
|
(27,492)
|
|
(36,800)
|
|
Cash received from
exercise of options
|
|
625
|
|
275
|
|
Proceeds from
follow-on offering
|
|
113,541
|
|
-
|
|
Issuance
cost
|
|
(6,919)
|
|
-
|
|
Net cash provided by
(used in) financing activities
|
|
93,200
|
|
(23,440)
|
|
|
|
|
|
|
|
Effect of exchange
rate changes
|
|
(1,171)
|
|
701
|
|
Net increase in cash,
cash equivalents and restricted cash
|
|
106,595
|
|
17,966
|
|
Cash, cash
equivalents and restricted cash at the beginning of the
period
|
|
72,667
|
|
31,880
|
|
Cash, cash
equivalents and restricted cash at the end of the period
|
|
179,262
|
|
49,846
|
|
The following table provides a reconciliation of cash, cash
equivalents, and restricted cash reported within the statement of
financial position that sum to the total of the same such amounts
shown in the statement of cash flows.
|
|
Jun 30,
2018
|
|
Jun 30,
2017
|
Cash and cash
equivalents
|
|
$160,298
|
|
$30,443
|
Restricted
cash
|
|
18,964
|
|
19,403
|
Total cash, cash
equivalents, and restricted cash shown in the
statement of cash flows
|
|
179,262
|
|
49,846
|
Daqo New Energy
Corp.
|
Reconciliation of
non-GAAP financial measures to comparable US GAAP
measures
|
(US dollars in
thousands)
|
|
|
|
Three months
Ended
|
|
|
Jun 30,
2018
|
|
Mar 31,
2018
|
|
Jun 30,
2017
|
|
Gross
profit
|
|
27,170
|
|
46,222
|
|
24,245
|
|
Costs related to the
non-operational Chongqing
polysilicon operations
|
|
388
|
|
389
|
|
544
|
|
Non-GAAP gross
profit
|
|
27,558
|
|
46,611
|
|
24,789
|
|
|
Three months
Ended
|
|
|
Jun 30,
2018
|
|
Mar 30,
2018
|
|
Jun 30,
2017
|
|
Gross
margin
|
|
40.6%
|
|
44.8%
|
|
31.9%
|
|
Costs related to the
non-operational Chongqing
polysilicon
operations (proportion of revenue)
|
|
0.6%
|
|
0.4%
|
|
0.7%
|
|
Non-GAAP gross
margin
|
|
41.2%
|
|
45.2%
|
|
32.6%
|
|
|
|
|
|
|
|
|
|
|
|
Three months Ended
|
|
|
Jun 30,
2018
|
|
Mar 31,
2018
|
|
Jun 30,
2017
|
|
Net
income
|
|
13,601
|
|
31,973
|
|
12,260
|
|
Income tax
expense
|
|
4,377
|
|
5,864
|
|
2,768
|
|
Interest
expense
|
|
3,403
|
|
4,054
|
|
5,288
|
|
Interest
income
|
|
(380)
|
|
(156)
|
|
(111)
|
|
Depreciation &
Amortization
|
|
10,011
|
|
9,937
|
|
9,621
|
|
EBITDA
(non-GAAP)
|
|
31,012
|
|
51,672
|
|
29,826
|
|
EBITDA margin
(non-GAAP)
|
|
46.3%
|
|
50.0%
|
|
39.2%
|
|
|
|
|
|
|
|
|
|
|
|
Three months
Ended
|
|
|
Jun 30,
2018
|
|
Mar 31,
2017
|
|
Jun 30,
2018
|
|
Net income
attributable to Daqo New Energy
Corp. shareholders
|
|
13,406
|
|
31,634
|
|
12,125
|
|
Costs related to the
non-operational Chongqing
polysilicon operations
|
|
388
|
|
389
|
|
544
|
|
Share-based
compensation
|
|
4,384
|
|
859
|
|
1,104
|
|
Adjusted net
income (non-GAAP) attributable to
Daqo New Energy Corp.
shareholders
|
|
18,178
|
|
32,882
|
|
13,773
|
|
Adjusted earnings
per basic ADS (non-GAAP)
|
|
$1.44
|
|
$3.03
|
|
$1.31
|
|
Adjusted earnings
per diluted ADS (non-GAAP)
|
|
$1.36
|
|
$2.90
|
|
$1.29
|
|
For further information, please contact:
Daqo New Energy Corp.
Investor Relations Department
Phone: +86-187-1658-5553
Email: dqir@daqo.com
Christensen
In China
Mr. Christian Arnell
Phone: +86-10- 5900-1548
E-mail: carnell@christensenir.com
In US
Mr. Tip Fleming
Phone: +1-917-412-3333
Email: tfleming@Christensenir.com
For more information about Daqo New Energy, please visit
http://daqo.gotoip1.com/
View original
content:http://www.prnewswire.com/news-releases/daqo-new-energy-announces-unaudited-second-quarter-2018-results-300693011.html
SOURCE Daqo New Energy Corp.