CHONGQING, China, March 7, 2017 /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 fourth quarter and fiscal year of 2016.
Fourth Quarter 2016 Financial and Operating
Highlights
- The Company successfully completed annual maintenance and
several efficiency improvement projects, which affected polysilicon
production for approximately three weeks during Q4 2016.
Polysilicon production volume of 2,456 MT in Q4 2016, compared to
3,636 MT in Q3 2016
- Polysilicon external sales volume(1) of 2,209 MT in
Q4 2016, compared to 2,838 MT in Q3 2016
- Polysilicon average total production cost(2) of
$9.98/kg in Q4 2016, compared to
$8.66/kg in Q3 2016
- Polysilicon average cash cost(2) of $7.34/kg in Q4 2016, compared to $6.88/kg in Q3 2016
- Average selling price (ASP) of polysilicon was $14.96/kg in Q4 2016, compared to $15.64/kg in Q3 2016
- Solar Wafer sales volume of 21.3 million pieces in Q4 2016,
compared to 14.4 million pieces in Q3 2016
- Revenue of $46.1 million in Q4
2016, compared to $54.3 million in Q3
2016
- Gross margin of 30.7% in Q4 2016, compared to 37.1% in Q3
2016
- Non-GAAP gross margin(3) of 34.1% in Q4 2016,
compared to 39.9% in Q3 2016
- EBITDA (non-GAAP)(3) of $17.6
million in Q4 2016, compared to $25.0
million in Q3 2016
- EBITDA margin (non-GAAP)(3) of 38.3% in Q4 2016,
compared to 46.0% in Q3 2016
- Net income attributable to Daqo New Energy shareholders of
$4.1 million in Q4 2016, compared to
$11.2 million in Q3 2016 and
$9.6 million in Q4 2015
- Earnings per basic ADS of $0.39
in Q4 2016, compared to $1.07 in Q3
2016, and $0.92 in Q4 2015
- Adjusted net income (non-GAAP)(3) attributable to
Daqo New Energy shareholders of $6.2
million in Q4 2016, compared to $13.2
million in Q3 2016 and $11.9
million in Q4 2015
- Adjusted earnings per basic ADS (non-GAAP)(3) of
$0.59, compared to $1.26 in Q3 2016, and $1.14 Q4 2015
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Three months
ended
|
US$ millions
except as indicated otherwise
|
December 31,
2016
|
September 30,
2016
|
December 31,
2015
|
Revenues
|
46.1
|
54.3
|
59.3
|
Gross profit
|
14.2
|
20.1
|
16.9
|
Gross margin
|
30.7%
|
37.1%
|
28.5%
|
Operating
income
|
9.6
|
16.4
|
14.3
|
Net income attributable
to
Daqo New Energy Corp. shareholders
|
4.1
|
11.2
|
9.6
|
Earnings per basic ADS
($ per ADS)
|
0.39
|
1.07
|
0.92
|
Adjusted net income
(non-GAAP)(3)
attributable to Daqo New Energy Corp.
shareholders
|
6.2
|
13.2
|
11.9
|
Adjusted earnings per
basic ADS
(non-GAAP)(3) ($ per ADS)
|
0.59
|
1.26
|
1.14
|
Non-GAAP gross
profit(3)
|
15.8
|
21.6
|
18.9
|
Non-GAAP gross
margin(3) (%)
|
34.1%
|
39.9%
|
31.8%
|
EBITDA
(non-GAAP)(3)
|
17.6
|
25.0
|
23.4
|
EBITDA
margin(3) (non-GAAP)
|
38.3%
|
46.0%
|
39.5%
|
Polysilicon sales
volume (MT) (1)
|
2,209
|
2,838
|
3,092
|
Polysilicon production
cost ($/kg)(2)
|
9.98
|
8.66
|
9.74
|
Polysilicon cash cost
(excl. dep'n) ($/kg)(2)
|
7.34
|
6.88
|
7.69
|
Full Year 2016 Financial and Operating Highlights
- Polysilicon production volume of 13,068 MT in 2016, an increase
of 33.7% from 9,771 MT in 2015
- Polysilicon external sales volume(1) of 10,883 MT in
2016, an increase of 32.2% from 8,234 MT in 2015
- Solar Wafer sales volume of 82.8 million pieces in 2016, an
increase of 8.4% from 76.4 million pieces in 2015
- Revenue of $229.1 million in
2016, an increase of 25.9% $182.0
million in 2015
- Gross margin of 35.1% in 2016, increased from 20.6% in
2015
- Non-GAAP gross margin(3) of 38.1% in 2016, increased
from 26.5% in 2015
- EBITDA (non-GAAP)(3) of $
99.3million in 2016, an increase of 70.6% from $58.2 million in 2015
- EBITDA margin (non-GAAP)(3) of 43.3% in 2016,
increased from 32.0% in 2015
- Net income attributable to Daqo New Energy Corp. shareholders
of $43.5 million in 2016, an increase
of 234.6% from $13.0 million in
2015
- Earnings per basic ADS of $4.15
in 2016, an increase of 229.4% from $1.26 in 2015
- Adjusted net income (non-GAAP)(3) attributable to
Daqo New Energy Corp. shareholders of $ 53.1
million in 2016, an increase of 93.8% from $ 27.4 million in 2015
- Adjusted earnings per basic ADS (non-GAAP)(3) of
$5.07 in 2016, an increase of 91.3%
from $2.65 in 2015
Notes:
|
|
(1) Our
polysilicon external sales volume excludes internal sales to our
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 accepted by
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 (loss) attributable to
Daqo New Energy Corp. shareholders and adjusted earnings (loss) 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.
|
Commentary
"The fourth quarter of 2016 was an important milestone for Daqo
New Energy. During the quarter, we successfully completed our
annual maintenance work and interconnections between our new
facilities and existing facilities in Xinjiang at the same
time. We also successfully completed all the construction and
installation work related to Phase 3A polysilicon expansion.
As maintenance, construction, installation of new equipment,
and interconnection of facilities were conducted concurrently, our
annual maintenance for 2016 took longer than usual to complete.
However, the combination of these efforts allowed us to start
initial production of our expanded production capacity in the first
quarter of 2017, months ahead of our original schedule. We have
already reached full production throughput of 18,000 MT per annum
by the end of February 2017," said Dr. Gongda Yao, Chief Executive
Officer of Daqo New Energy.
"During the fourth quarter of 2016, we saw robust demand for
polysilicon products, and the strong momentum continued into the
first quarter of 2017. Based on industry forecasts, the size
of the solar market was approximately 70GW in 2016, with demand
from China and India exceeding expectations. The PV
market is expected to continue its growth in 2017, with the market
size expected to be 73 to 79GW for the year. In particular,
the India PV market is expected to grow from approximately 5 or 6GW
in 2016 to more than 10GW in 2017. With a growing PV market
and major downstream PV manufacturers continuing to add
manufacturing capacities, this bodes well for continued strong
demand for high-purity polysilicon products. In particular, we are
seeing a shift in industry trend, with rising demand and increasing
manufacturing capacities for high-efficiency mono crystalline solar
wafers and solar cells. This has translated to increased
demand for high-purity semiconductor-grade polysilicon, which only
very few Chinese domestic manufacturers are able to supply. Daqo
New Energy, with our upgraded process and high-purity products, is
uniquely positioned to address this growing high-efficiency mono
crystalline solar market."
"Based on feedback from our customers, we believe that orders
and shipments of downstream PV module products are currently
healthy and strong. We are witnessing strong orders and robust
pricing for our high quality polysilicon products from our
customers, and despite our expanded capacities and production
volume, customer demand is still exceeding our production
volume. In fact, certain customers are now willing to make
prepayments so that they can take priority in product delivery.
This is a testament to both the strong market demand and the high
quality of our products. As a result, we expect polysilicon
ASP in the first quarter of 2017 will be higher as compared to the
fourth quarter of 2016."
"We are also proud of the financial performance we achieved for
the year 2016. In 2016, we had revenues of $229 million, net income attributable to Daqo New
Energy Corp. shareholders of $43.5
million, and earnings per basic ADS of $4.15, all higher as compared to 2015. We
generated non-GAAP EBITDA of $99.3
million and net cash provided by operating activities of
$98.7 million in 2016. The
strong cash flow has allowed us to fund and complete the current
phase of capacity expansion without significantly increasing bank
borrowings."
Outlook and Q1 2017 guidance
With the successful initial production of the Phase 3A capacity,
the Company expects polysilicon production volume will reach 4,300
MT to 4,500 MT in the first quarter of 2017. The company
expects to sell approximately 3,800 MT to 4,000 MT of polysilicon
to external customers during the first quarter of 2017, a record
high for the Company. The above external sales guidance
excludes shipments of polysilicon to be used internally by our
Chongqing solar wafer facility,
which utilizes polysilicon for its wafer manufacturing
operation. Wafer sales volume is expected to be approximately
23.5 million to 24 million pieces for the first quarter of
2017.
This outlook reflects our current and preliminary view as of the
date of this press release and may be subject to change. Our
ability to achieve these projections is subject to risks and
uncertainties. See "Safe Harbor Statement" at the end of this press
release.
Fourth Quarter 2016 Results
Revenues
Revenues were $46.1 million,
compared to $54.3 million in the
third quarter of 2016 and $59.3
million in the fourth quarter of 2015.
Revenues from polysilicon sales to external customers were
$32.8 million, compared to
$44.4 million in the third quarter of
2016 and $42.9 million in the fourth
quarter of 2015. External polysilicon sales volume was 2,209 MT,
compared to 2,838 MT in the third quarter of 2016, and 3,092 MT in
the fourth quarter of 2015.
The decrease in polysilicon revenues as compared to the third
quarter of 2016 was primarily due to lower polysilicon sales volume
and lower ASPs. The Company successfully completed annual
maintenance and several efficiency improvement projects, which
affected polysilicon production for approximately three weeks
during the fourth quarter of 2016. As a result, both of our
polysilicon production volume and sales volume were lower in the
fourth quarter of 2016 as compared to the third quarter of
2016. However, we successfully resumed production in
November 2016.
Revenues from wafer sales were $13.4
million, compared to $9.9
million in the third quarter of 2016 and $16.4 million in the fourth quarter of 2015.
Wafer sales volume was 21.3 million pieces, compared to 14.4
million pieces in the third quarter of 2016 and 21.0 million pieces
in the fourth quarter of 2015. The increase in wafer revenues from
the third quarter of 2016 was primarily due to higher sales volume
offset by lower wafer ASPs.
Gross profit and margin
Gross profit was approximately $14.2
million, compared to $20.1
million in the third quarter of 2016 and $16.9 million in the fourth quarter of 2015.
Non-GAAP gross profit, which excludes costs related to the
non-operational polysilicon assets in Chongqing, was approximately $15.8 million, compared to $21.6 million in the third quarter of 2016 and
$18.9 million in the fourth quarter
of 2015.
Gross margin was 30.7%, compared to 37.1% in the third quarter
of 2016 and 28.5% in the fourth quarter of 2015. The decrease in
gross margin as compared to the third quarter of 2016 was primarily
due to slightly lower quarterly polysilicon ASPs and higher
polysilicon production cost affected by annual maintenance, as well
as lower quarterly wafer ASPs.
In the fourth quarter of 2016, total costs related to the
non-operational Chongqing
polysilicon assets including depreciation were $1.6 million, compared to $1.5 million in the third quarter of 2016 and
$2.0 million in the fourth quarter of
2015. Excluding such costs, the non-GAAP gross margin was
approximately 34.1%, compared to 39.9% in the third quarter of 2016
and 31.8% in the fourth quarter of 2015.
Selling, general and administrative expenses
Selling, general and administrative expenses were $3.5 million, compared to $4.9 million in the third quarter of 2016 and
$2.3 million in the fourth quarter of
2015.
Research and development expenses
Research and development expenses were approximately
$2.8 million, compared to
$1.0 million in the third quarter of
2016 and $0.5 million in the fourth
quarter of 2015. The increase in R&D expenses as compared to
the third quarter of 2016 was primarily due to increased research
and development activities and process upgrades for quality
enhancement, increased manufacturing throughput, energy efficiency
improvement, and cost deduction.
Other operating income
Other operating income was $1.9
million, compared to $2.2
million in the third quarter of 2016 and $1.7 million in the fourth quarter of 2015. Other
operating income was mainly composed of unrestricted cash
incentives that the Company received from local government
authorities, the amount of which varies from period to period.
Impairment of long-lived assets
The Company recognized $0.2
million and $1.6 million fixed
assets impairment loss for its Wanzhou polysilicon facilities in
the fourth quarter of 2016 and 2015, respectively. The Company is
currently in the process of relocating the Company's temporarily
idle polysilicon machinery and equipment in Chongqing to the Company's Xinjiang
polysilicon manufacturing facility, and repurposing such assets.
The impairment loss incurred was attributable to the identified
relocation assets in Chongqing
that were not transferrable and could not be reutilized by its
Xinjiang polysilicon expansion project.
Operating income and margin
As a result of the foregoing, operating income was $9.6 million, compared to $16.4 million in the third quarter of 2016 and
$14.3 million in the fourth quarter
of 2015.
Operating margin was 20.7%, compared to 30.3% in the third
quarter of 2016 and 24.1% in the fourth quarter of 2015.
Interest expense
Interest expense was $4.1 million,
compared to $3.1 million in the third
quarter of 2016 and $4.3 million in
the fourth quarter of 2015.
EBITDA
EBITDA was $17.6 million, compared
to $25.0 million in the third quarter
of 2016 and $23.4 million in the
fourth quarter of 2015. EBITDA margin was 38.3%, compared to 46.0%
in the third quarter of 2016 and 39.5% in the fourth quarter of
2015.
Net income attributable to Daqo New Energy Corp.
shareholders and earnings per ADS
As a result of the aforementioned, net income attributable to
Daqo New Energy Corp. shareholders was $4.1
million, compared to $11.2
million in the third quarter of 2016 and $9.6 million in the fourth quarter of 2015.
Earnings per basic ADS were $0.39,
compared to $1.07 in the third
quarter of 2016 and $0.92 in the
fourth quarter of 2015.
Financial Condition
As of December 31, 2016, the
Company had $31.9 million in cash and
cash equivalents and restricted cash, compared to $29.2 million as of September 30, 2016 and $33.6 million as of December 31, 2015. As of December 31, 2016, the accounts receivable
balance was $4.8 million, compared to
$4.6 million as of September 30, 2016. As of December 31, 2016, the notes receivable balance
was $13.0 million, compared to
$17.0 million as of September 30, 2016. As of December 31, 2016, total borrowings were
$217.9 million, of which $111.9 million were long-term borrowings,
compared to total borrowings of $227.6
million, including $129.0
million long-term borrowings, as of September 30, 2016.
Cash Flows
For the twelve months ended December 31,
2016, net cash provided by operating activities was
$98.7 million, an increase of 48.6%
from $66.4 million in the same period
of 2015.
For the twelve months ended December 31,
2016, net cash used in investing activities was $66.1 million, compared to $74.1 million in the same period of 2015. The net
cash used in investing activities in 2015 and 2016 was primarily
related to the capital expenditure of Xinjiang Phase 2B and Phase
3A polysilicon projects.
For the twelve months ended December 31,
2016, net cash used in financing activities was $30.3 million, compared to net cash provided by
financing activities of $15.2 million
in the same period of 2015. The net cash used in financing
activities in 2016 primarily consists of repayment of related
parties loans and bank borrowings. The net cash provided by
financing activities in 2015 was primarily contributed by the net
proceeds from the follow-on offering in February 2015 and net bank loan borrowings.
Full Year 2016 Results
Revenues
Revenues were $229.1 million in
2016, an increase of 25.9% from $182.0
million in 2015.
Revenues from polysilicon sales to external customers were
$167.5 million in 2016, an increase
of 33.0% from $125.9 million in 2015.
In the third quarter of 2015, we successfully ramped up our Phase
2B expansion project which increased our annual capacity from 6,150
MT to 12,150 MT. During the whole year of 2016, we were running our
Xinjiang polysilicon facilities at full capacity. As a result, our
annual polysilicon production volume increased by 33.7% from 9,771
MT in 2015 to 13,068 MT in 2016. Our external polysilicon sales
volume increased by 32.2% from 8,234 MT in 2015 to 10,883 MT in
2016. In addition, our annual polysilicon average selling prices
also improved slightly from $15.29/kg
in 2015 to $15.42/kg in 2016.
Revenues from wafer sales were $61.6
million in 2016, an increase of 9.7% from $56.1 million in 2015. Wafer sales volume was
82.8 million pieces, an increase of 8.3% from 76.4 million pieces
in 2015. The increase in wafer revenues as compared to 2015 was
primarily due to higher sales volume.
Gross profit and margin
Gross profit was $80.4 million in
2016, an increase of 114.2% from $37.6
million in 2015. Gross margin was 35.1% in 2016, increased
from 20.6% in 2015. The improvement in gross profit and gross
margin was primarily attributable to our polysilicon segment.
In 2016, gross profit of our polysilicon segment excluding costs
related to the Chongqing idle
polysilicon facilities, was $78.2
million, an increase of 100.9% from $38.9 million in 2015. Gross margin of our
polysilicon segment was 46.7%, increased from 30.9% in 2015. The
increase in polysilicon gross profit and gross margin excluding
costs related to the Chongqing
idle polysilicon facilities was primarily due to higher sales
volume and significant improvement in our polysilicon cost
structure. We sold 10,883 MT of polysilicon in 2016, an increase of
32.2% from 8,234 MT in 2015. Our annual average polysilicon
production cost (including depreciation) decreased by 17.8% from
$11.23/kg in 2015 to $9.23/kg in 2016.
In 2016, gross profit of our wafer sector was $9.2 million, decreased from $9.4 million in 2015. Gross margin of our wafer
sector was 14.9%, compared to 16.7% in 2015.
In 2016, total costs related to the non-operational Chongqing polysilicon plant including
depreciation were $6.9 million,
decreased from $10.7 million in 2015.
Excluding such costs, the non-GAAP gross margin was approximately
38.1% in 2016, increased from 26.5% in 2015.
Selling, general and administrative expenses
Selling, general and administrative expenses were $16.1 million in 2016, compared to $12.6 million in 2015. The increase in selling,
general and administrative expenses was primarily due to increased
shipping cost, as a result of higher polysilicon shipping volume
and higher relocation and moving expenses related to the relocation
of the idle polysilicon manufacturing machinery and equipment from
Chongqing to Xinjiang, which
amounted to $2.6 million and $nil in
2016 and 2015 respectively.
Research and development expenses
Research and development expenses were $4.0 million in 2016, compared to $0.9 million in 2015. The increase in research
and development expenses primarily resulted from continuous
research and development activities for improvements in
manufacturing efficiency and cost deduction.
Other operating income
Other operating income was $5.3
million in 2016, compared to $3.8
million in 2015, which mainly consisted of unrestricted cash
incentives that we received from local government authorities,
which varies from period to period at the discretion of the
government.
Impairment of long-lived assets
The Company recognized a $0.2
million and $1.6 million in
impairment loss related to the long-lived assets of its
Chongqing polysilicon facilities
in 2016 and 2015, respectively.
Operating income and margin
As a result of the foregoing, operating income was $65.4 million in 2016, an increase of 149.6% from
$26.2 million in 2015. Operating
margin was 28.6% in 2016, increased from 14.4% in 2015.
Interest expense
Interest expense was $14.6 million
in 2016, compared to $13.2 million in
2015. The increase was primarily due to the decrease of capitalized
interest expense.
Income tax expense
Income tax expenses were $7.4
million in 2016, compared to $1.1
million in 2015.
Net income attributable to Daqo New Energy Corp.
shareholders and earnings per ADS
As a result of the factors described above, we had net income
attributable to Daqo New Energy Corp. shareholders of $43.5 million in 2016, an increase of 236.7% from
$13.0 million in 2015. Earnings per
basic ADS were $4.15 in 2016, an
increase of 229.4% from $1.26 in
2015.
Adjusted net income (non-GAAP) attributable to Daqo New Energy
Corp. shareholders was $ 53.1 million
in 2016, an increase of 94.0% from $27.4
million in 2015. Adjusted earnings per basic ADS (non-GAAP)
were of $5.07 in 2016, an increase of
91.3% from $2.65 in 2015.
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 and 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
March 7, 2017.
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
|
China Beijing local
toll:
|
+86-105-357-3132
|
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.
|
You can also listen to the conference call via Webcast through
the URL: http://mms.prnasia.com/DQ/20170307/default.aspx
A replay of the call will be available 1 hour after the end of
the conference through March 15,
2016.
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:
|
10102282
|
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.
Founded in 2008, Daqo New Energy Corp. (NYSE: DQ) is a leading
manufacturer of high-purity polysilicon for the global solar PV
industry. As one of the world's lowest cost producers of
high-purity polysilicon and solar wafers, the Company primarily
sells its products to solar cell and solar module manufacturers.
The Company has built a manufacturing facility that is technically
advanced and highly efficient with a nameplate capacity of 18,000
metric tons in Xinjiang, China. The Company also operates a
solar wafer manufacturing facility in Chongqing, China.
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 first quarter of 2017 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
Preliminary Condensed Consolidated Statement of Operations and
Comprehensive Income
(US dollars in
thousands, except ADS and per ADS data)
|
|
|
|
|
Three months
Ended
|
Year Ended Dec
31,
|
|
|
Dec 31,
2016
|
|
Sep 30,
2016
|
|
Dec 31,
2015
|
|
2016
|
|
2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
$46,116
|
|
$54,289
|
|
$59,277
|
|
$229,101
|
|
$182,041
|
|
Cost of
revenues
|
|
(31,941)
|
|
(34,152)
|
|
(42,362)
|
|
(148,673)
|
|
(144,491)
|
|
Gross
profit
|
|
14,175
|
|
20,137
|
|
16,915
|
|
80,428
|
|
37,550
|
|
Operating
expenses
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general
and
administrative expenses
|
|
(3,512)
|
|
(4,858)
|
|
(2,261)
|
|
(16,104)
|
|
(12,604)
|
|
Research and
development
expenses
|
|
(2,775)
|
|
(997)
|
|
(516)
|
|
(4,001)
|
|
(924)
|
|
Other operating
income
|
|
1,862
|
|
2,166
|
|
1,745
|
|
5,325
|
|
3,825
|
|
Impairment of
long-lived
assets
|
|
(199)
|
|
-
|
|
(1,623)
|
|
(199)
|
|
(1,623)
|
|
Total operating
expenses
|
|
(4,624)
|
|
(3,689)
|
|
(2,655)
|
|
(14,979)
|
|
(11,326)
|
|
Income from
operations
|
|
9,551
|
|
16,448
|
|
14,260
|
|
65,449
|
|
26,224
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
expense
|
|
(4,099)
|
|
(3,076)
|
|
(4,260)
|
|
(14,568)
|
|
(13,174)
|
|
Interest
income
|
|
17
|
|
123
|
|
258
|
|
408
|
|
494
|
|
Foreign exchange gain
(loss)
|
|
(4)
|
|
(1)
|
|
(6)
|
|
(7)
|
|
641
|
|
|
Income before income
taxes
|
|
5,465
|
|
13,494
|
|
10,252
|
|
51,282
|
|
14,185
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax
expense
|
|
(1,281)
|
|
(2,163)
|
|
(542)
|
|
(7,358)
|
|
(1,138)
|
|
Net income
|
|
4,184
|
|
11,331
|
|
9,710
|
|
43,924
|
|
13,047
|
|
Net income
attributable to
noncontrolling interest
|
|
55
|
|
135
|
|
91
|
|
430
|
|
91
|
|
Net income
attributable to Daqo
New Energy Corp. shareholders
|
|
$4,129
|
|
$11,196
|
|
$9,619
|
|
$43,494
|
|
$12,956
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
4,184
|
|
11,331
|
|
9,710
|
|
43,924
|
|
13,047
|
|
Other comprehensive
income (loss):
|
|
|
|
|
|
|
|
|
|
|
|
Foreign currency
translation
adjustments
|
|
(10,625)
|
|
(882)
|
|
(5,333)
|
|
(17,605)
|
|
(11,286)
|
|
Total other
comprehensive
income (loss)
|
|
(10,625)
|
|
(882)
|
|
(5,333)
|
|
(17,605)
|
|
(11,286)
|
|
Comprehensive income
(loss)
|
|
(6,441)
|
|
10,449
|
|
4,377
|
|
26,319
|
|
1,761
|
|
Comprehensive income
(loss)
attributable to noncontrolling
interest
|
|
(9)
|
|
129
|
|
61
|
|
327
|
|
61
|
|
Comprehensive income
(loss)
attributable to Daqo New Energy
Corp. shareholders
|
|
($6,432)
|
|
$10,320
|
|
$4,316
|
|
$25,992
|
|
$1,700
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income per
ADS
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
0.39
|
|
1.07
|
|
0.92
|
|
4.15
|
|
1.26
|
|
Diluted
|
|
0.39
|
|
1.05
|
|
0.91
|
|
4.11
|
|
1.24
|
|
Weighted average ADS
outstanding
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
10,508,261
|
|
10,478,671
|
|
10,447,744
|
|
10,469,690
|
|
10,320,634
|
|
Diluted
|
|
10,642,404
|
|
10,642,235
|
|
10,570,777
|
|
10,592,710
|
|
10,456,477
|
|
Daqo New Energy
Corp.
Unaudited
Consolidated Balance Sheet
(US dollars in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
Dec 31,
2016
|
|
Sep 30,
2016
|
|
Dec 31,
2015
|
|
|
|
|
|
|
|
|
|
|
|
ASSETS:
|
|
|
|
|
|
|
|
|
Current
Assets:
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$15,987
|
|
$21,630
|
|
$14,490
|
|
|
Restricted
cash
|
|
15,893
|
|
7,531
|
|
19,063
|
|
|
Accounts receivable,
net
|
|
4,836
|
|
4,585
|
|
19,850
|
|
|
Notes
Receivable
|
|
13,026
|
|
17,037
|
|
11,110
|
|
|
Prepaid expenses and
other current assets
|
|
8,028
|
|
6,849
|
|
12,235
|
|
|
Advances to
suppliers
|
|
1,723
|
|
1,805
|
|
1,028
|
|
|
Inventories
|
|
12,281
|
|
14,905
|
|
10,716
|
|
|
Amount due from related
party
|
|
1,529
|
|
1,869
|
|
285
|
|
|
Total current
assets
|
|
73,303
|
|
76,211
|
|
88,777
|
|
|
Property, plant and
equipment, net
|
|
557,428
|
|
561,324
|
|
544,326
|
|
|
Prepaid land use
right
|
|
24,810
|
|
25,971
|
|
27,122
|
|
|
Deferred tax
assets
|
|
586
|
|
610
|
|
627
|
|
|
Investment accounted
for under cost-method
|
|
582
|
|
182
|
|
-
|
|
|
TOTAL
ASSETS
|
|
656,709
|
|
664,298
|
|
660,852
|
|
|
|
|
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
|
|
Short-term borrowings,
including current portion of
long-term borrowings
|
|
105,980
|
|
98,630
|
|
123,937
|
|
|
Accounts
payable
|
|
18,745
|
|
17,698
|
|
17,492
|
|
|
Notes
payable
|
|
25,732
|
|
14,440
|
|
20,153
|
|
|
Advances from
customers
|
|
7,520
|
|
4,189
|
|
8,183
|
|
|
Payables for
purchases of property, plant and equipment
|
|
51,323
|
|
43,696
|
|
49,675
|
|
|
Accrued expenses and
other current liabilities
|
|
8,320
|
|
8,744
|
|
8,617
|
|
|
Amount due to related
party
|
|
26,830
|
|
41,390
|
|
46,397
|
|
|
Income tax
payable
|
|
5,300
|
|
4,658
|
|
941
|
|
|
Total current
liabilities
|
|
249,750
|
|
233,445
|
|
275,395
|
|
|
Long-term
borrowings
|
|
111,949
|
|
128,975
|
|
118,548
|
|
|
Other long Term
Liabilities
|
|
23,280
|
|
24,252
|
|
25,253
|
|
|
TOTAL
LIABILITIES
|
|
384,979
|
|
386,672
|
|
419,196
|
|
|
EQUITY:
|
|
|
|
|
|
|
|
|
Ordinary
shares
|
|
27
|
|
26
|
|
26
|
|
|
Treasury
stock
|
|
(1,749)
|
|
(1,749)
|
|
(1,749)
|
|
|
Additional paid-in
capital
|
|
240,112
|
|
239,566
|
|
236,358
|
|
|
Accumulated gains
(losses)
|
|
40,432
|
|
36,304
|
|
(3,061)
|
|
|
Accumulated other
comprehensive income
|
|
(8,721)
|
|
1,841
|
|
8,780
|
|
|
Total Daqo New Energy
Corp.'s shareholders' equity
|
|
270,101
|
|
275,988
|
|
240,354
|
|
|
Noncontrolling
interest
|
|
1,629
|
|
1,638
|
|
1,302
|
|
|
Total
equity
|
|
271,730
|
|
277,626
|
|
241,656
|
|
|
TOTAL LIABILITIES
& EQUITY
|
|
656,709
|
|
664,298
|
|
660,852
|
|
|
|
|
|
|
|
|
|
|
|
Daqo New Energy
Corp.
Unaudited
Consolidated Statements of Cash Flows
(US dollars in
thousands)
|
|
|
For the twelve months
ended December 31,
|
|
|
2016
|
|
2015
|
|
Operating
Activities:
|
|
|
|
|
|
Net income
|
|
$43,924
|
|
$13,047
|
|
Adjustments to
reconcile net income to net cash provided by
operating activities:
|
|
|
|
|
|
Long-lived
assets impairment
|
|
199
|
|
1,623
|
|
Share-based compensation
|
|
2,702
|
|
3,688
|
|
Inventory
write-down
|
|
-
|
|
62
|
|
Allowance
(reversal) for doubtful accounts
|
|
(1,053)
|
|
(2,027)
|
|
Depreciation of property, plant and equipment
|
|
33,822
|
|
31,361
|
|
Disposal
of Assets Loss
|
|
181
|
|
166
|
|
|
|
|
|
|
|
Changes in
operating assets and liabilities:
|
|
|
|
|
|
Accounts
receivables
|
|
14,891
|
|
(10,399)
|
|
Notes
receivables
|
|
(2,635)
|
|
36,898
|
|
Prepaid
expenses and other current assets
|
|
3,416
|
|
30
|
|
Advances
to suppliers
|
|
(761)
|
|
264
|
|
Inventories
|
|
(2,258)
|
|
(1,622)
|
|
Amount due
from related parties
|
|
(1,318)
|
|
5,481
|
|
Amount due
to related parties
|
|
1,815
|
|
2,178
|
|
Prepaid
land use rights
|
|
557
|
|
596
|
|
Other
non-current assets
|
|
-
|
|
162
|
|
Accounts
payable
|
|
2,386
|
|
1,453
|
|
Notes
payable
|
|
(1,404)
|
|
(14,733)
|
|
Accrued
expenses and other current liabilities
|
|
261
|
|
59
|
|
Income tax
payable
|
|
4,420
|
|
941
|
|
Advances
from customers
|
|
(134)
|
|
(2,051)
|
|
Deferred
tax assets
|
|
-
|
|
(627)
|
|
Deferred
government subsidies
|
|
(339)
|
|
(125)
|
|
Net cash provided by
operating activities
|
|
98,672
|
|
66,425
|
|
|
|
|
|
|
|
Investing
activities:
|
|
|
|
|
|
Purchases of property,
plant and equipment
|
|
(67,477)
|
|
(81,364)
|
|
Proceeds from
disposition of Nanjing Daqo
|
|
-
|
|
5,110
|
|
Investment accounted
for under cost-method
|
|
(582)
|
|
-
|
|
Increase in restricted
cash
|
|
1,936
|
|
2,122
|
|
Net cash used in
investing activities
|
|
(66,123)
|
|
(74,132)
|
|
|
|
|
|
|
|
Financing
activities:
|
|
|
|
|
|
Proceeds from related
parties loans
|
|
126,401
|
|
245,958
|
|
Repayment of related
parties loans
|
|
(148,463)
|
|
(276,575)
|
|
Proceeds from bank
borrowings
|
|
106,987
|
|
237,032
|
|
Repayment of bank
borrowings
|
|
(116,255)
|
|
(220,611)
|
|
Proceeds from
follow-on equity offering
|
|
-
|
|
30,030
|
|
Issuance cost for
follow-on equity offering
|
|
-
|
|
(2,033)
|
|
Cash received from
exercise of options
|
|
1,052
|
|
276
|
|
Repurchase
stock
|
|
-
|
|
(1,350)
|
|
Proceeds from the sale
of ownership interests by Xinjiang Daqo
|
|
-
|
|
2,516
|
|
Net cash (used in)
provided by financing activities
|
|
(30,278)
|
|
15,243
|
|
|
|
|
|
|
|
Effect of exchange
rate changes
|
|
(774)
|
|
(114)
|
|
Net increase in cash
and cash equivalents
|
|
1,497
|
|
7,422
|
|
Cash and cash
equivalents at the beginning of the year
|
|
14,490
|
|
7,068
|
|
Cash and cash
equivalents at the end of the year
|
|
15,987
|
|
14,490
|
|
Daqo New Energy
Corp.
Reconciliation of
non-GAAP financial measures to comparable US GAAP
measures
(US dollars in
thousands)
|
|
|
Three months
Ended
|
Twelve
months ended
|
|
|
Dec. 31,
2016
|
|
Sep. 30,
2016
|
|
Dec. 31,
2015
|
|
Dec. 31,
2016
|
|
Dec. 31,
2015
|
|
Gross
profit
|
|
14,175
|
|
20,137
|
|
16,915
|
|
80,428
|
|
37,550
|
|
Costs related to
the
non-operational Chongqing
polysilicon operations
|
|
1,588
|
|
1,501
|
|
1,976
|
|
6,913
|
|
10,725
|
|
Non-GAAP gross
profit
|
|
15,763
|
|
21,638
|
|
18,891
|
|
87,341
|
|
48,275
|
|
|
|
Three months
Ended
|
Twelve months
ended
|
|
|
Dec. 31,
2016
|
|
Sep. 30,
2016
|
|
Dec. 31,
2015
|
|
Dec. 31,
2016
|
|
Dec. 31,
2015
|
Gross
margin
|
|
30.7%
|
|
37.1%
|
|
28.5%
|
|
35.1%
|
|
20.6%
|
Costs related to
the
non-operational Chongqing
polysilicon operations
(proportion of revenue)
|
|
3.4%
|
|
2.8%
|
|
3.3%
|
|
3.0%
|
|
5.9%
|
Non-GAAP gross
margin
|
|
34.1%
|
|
39.9%
|
|
31.8%
|
|
38.1%
|
|
26.5%
|
|
|
Three months
Ended
|
Twelve months
ended
|
|
|
Dec. 31,
2016
|
|
Sep. 30,
2016
|
|
Dec. 31,
2015
|
|
Dec. 31,
2016
|
|
Dec. 31,
2015
|
Net
income
|
|
4,184
|
|
11,331
|
|
9,710
|
|
43,924
|
|
13,047
|
Income tax
expense
|
|
1,281
|
|
2,163
|
|
542
|
|
7,358
|
|
1,138
|
Interest
expense
|
|
4,099
|
|
3,076
|
|
4,260
|
|
14,568
|
|
13,174
|
Interest
income
|
|
(17)
|
|
(123)
|
|
(258)
|
|
(408)
|
|
(494)
|
Depreciation
|
|
8,095
|
|
8,522
|
|
9,131
|
|
33,822
|
|
31,361
|
EBITDA
(non-GAAP)
|
|
17,642
|
|
24,969
|
|
23,385
|
|
99,264
|
|
58,226
|
EBIDTA margin
(non-GAAP)
|
|
38.3%
|
|
46.0%
|
|
39.5%
|
|
43.3%
|
|
32.0%
|
|
|
Three months
Ended
|
Twelve months
ended
|
|
|
Dec. 31,
2016
|
|
Sep. 30,
2016
|
|
Dec. 31,
2015
|
|
Dec. 31,
2016
|
|
Dec. 31,
2015
|
Net income
attributable
to Daqo New Energy
Corp. shareholders
|
|
4,129
|
|
11,196
|
|
9,619
|
|
43,494
|
|
12,956
|
Costs related to
the
non-operational Chongqing
polysilicon operations
|
|
1,588
|
|
1,501
|
|
1,976
|
|
6,913
|
|
10,725
|
Share-based
compensation
|
|
443
|
|
522
|
|
275
|
|
2,702
|
|
3,688
|
Adjusted net
income
(non-GAAP)
attributable to Daqo
New Energy Corp.
shareholders
|
|
6,160
|
|
13,219
|
|
11,870
|
|
53,109
|
|
27,369
|
Adjusted earnings
per
basic ADS (non-GAAP)
|
|
$0.59
|
|
$1.26
|
|
$1.14
|
|
$5.07
|
|
$2.65
|
Adjusted earnings
per
diluted ADS (non-GAAP)
|
|
$0.58
|
|
$1.24
|
|
$1.12
|
|
$5.01
|
|
$2.62
|
For further information, please contact:
Daqo New Energy Corp.
Investor Relations
Phone: +86-187-1658-5553
dqir@daqo.com
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/daqo-new-energy-announces-unaudited-fourth-quarter-and-fiscal-year-2016-results-300419101.html
SOURCE Daqo New Energy Corp.