SHIHEZI, China, Nov. 13, 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 third quarter of 2018.
Third Quarter 2018 Financial and Operating Highlights
- Polysilicon production volume of 4,734
MT in Q3 2018, compared to 5,659
MT in Q2 2018
- Polysilicon external sales volume(1) of 6,199 MT in
Q3 2018, compared to 3,881 MT in Q2 2018
- Polysilicon average total production cost(2) of
$8.94/kg in Q3 2018, compared to
$9.05/kg in Q2 2018
- Polysilicon average cash cost(2) of $7.12/kg in Q3 2018, compared to $7.43/kg in Q2 2018
- Polysilicon average selling price (ASP) was $10.79/kg in Q3 2018, compared to $16.22/kg in Q2 2018
- Solar wafer sales volume of 8.7 million pieces in Q3 2018,
compared to 9.8 million pieces in Q2 2018
- Revenue from continuing operations of $67.4 million in Q3 2018, compared to
$63.0 million in Q2 2018
- Gross profit from continuing operations of $12.8 million in Q3 2018, compared to
$25.2 million in Q2 2018. Gross
margin from continuing operations was 19.1% in Q3 2018, compared to
40.1% in Q2 2018
- EBITDA (non-GAAP)(3) from continuing operations of
$14.8 million in Q3 2018, compared to
$27.4 million in Q2 2018
- EBITDA margin (non-GAAP)(3) from continuing
operations of 22.0% in Q3 2018, compared to 43.6% in Q2 2018
- Net income from continuing operations was $4.2 million in Q3 2018, compared to $10.9 million in Q2 2018 and $14.6 million in Q3 2017.
- Net loss from discontinued operations was $22.4 million in Q3 2018, compared to net income
from discontinued operations of $2.7
million in Q2 2018 and $9.7
million in Q3 2017
- Net loss attributable to Daqo New Energy shareholders of
$18.3 million in Q3 2018, compared to
net income attributable to Daqo New Energy shareholders of
$13.4 million in Q2 2018 and
$24.1 million in Q3 2017
- Loss per basic American Depository Share (ADS) of $1.39 in Q3 2018, compared to earnings per basic
ADS of $1.06 in Q2 2018, and
$2.28 in Q3 2017
- Adjusted net income (non-GAAP)(3) attributable to
Daqo New Energy shareholders of $4.3
million in Q3 2018, compared to $18.2
million in Q2 2018 and $25.6
million in Q3 2017
- Adjusted earnings per basic ADS (non-GAAP)(3) of
$0.33 in Q3 2018, compared to
$1.44 in Q2 2018, and $2.42 in Q3 2017
|
Three months
ended
|
|
US$
millions
except as indicated
otherwise
|
Sept 30,
2018
|
Jun 30,
2018
|
Sept 30,
2017
|
|
Revenues
|
67.4
|
63.0
|
72.9
|
|
Gross
profit
|
12.8
|
25.2
|
26.8
|
|
Gross
margin
|
19.1%
|
40.1%
|
36.7%
|
|
Operating
income
|
4.0
|
18.0
|
22.8
|
|
Net income from
continuing operations
|
4.2
|
10.9
|
14.6
|
|
(Loss)/income from
discontinued operations, net
of tax
|
(22.4)
|
2.7
|
9.7
|
|
Net (loss)/income
attributable to Daqo New Energy
Corp. shareholders
|
(18.3)
|
13.4
|
24.1
|
|
(Loss)/Earnings per
basic ADS ($ per ADS)
|
(1.39)
|
1.06
|
2.28
|
|
Adjusted net income
(non-GAAP)(3) attributable
to Daqo New Energy Corp. shareholders
|
4.3
|
18.2
|
25.6
|
|
Adjusted earnings per
basic ADS (non-GAAP)(3)
($ per ADS)
|
0.33
|
1.44
|
2.42
|
|
EBITDA from
continuing operations (non-GAAP)(3)
|
14.8
|
27.4
|
31.9
|
|
EBITDA
margin(3) from continuing operations (non-
GAAP)
|
22.0%
|
43.6%
|
43.8%
|
|
Polysilicon sales
volume (MT) (1)
|
6,199
|
3,881
|
4,500
|
|
Polysilicon
production cost ($/kg)(2)
|
8.94
|
9.05
|
8.95
|
|
Polysilicon cash cost
(excl. dep'n) ($/kg)(2)
|
7.12
|
7.43
|
7.16
|
|
Notes:
|
|
(1) The Company's
polysilicon external sales volume excludes internal sales to Daqo
New Energy's Chongqing wafer manufacturing subsidiary, which
utilized polysilicon as raw material for the production of solar
wafers and which the Company discontinued in September 2018. 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 EBITDA from continuing operations, EBITDA margin from
continuing operations, 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
Mr. Longgen Zhang, CEO of Daqo New Energy, commented, "We are
pleased to report another solid quarter. In spite of weak market
demands, we sold 6,199 MT of polysilicon during the third quarter,
with polysilicon inventory returning to lean levels, which
demonstrates our product's superior quality and our strong
relationships with downstream customers. We successfully completed
annual maintenance in September and resumed production earlier than
originally scheduled to minimize its impact on production volumes
and our cost structure. In addition, we also began pilot production
for Phase 3B project in October ahead
of schedule. We are in the process of optimizing throughput,
efficiency and quality and expect to ramp up Phase 3B to full capacity early in the first quarter of
2019. With lower electricity rates, higher manufacturing
efficiency, greater economies of scale and enhanced equipment and
processes, we expect the overall total cost of polysilicon
production from our Xinjiang facilities to decrease to
approximately US$7.50 per kilogram
when fully ramped up. Moreover, Phase 3B will not only increase our capacity and reduce
costs, but also allow us to improve product quality with
approximately 80% of our production capacity devoted to
mono-crystalline grade polysilicon, of which approximately half will be applicable
for use in N-type mono-crystalline solar cells."
"Despite the impact of the new solar PV policy issued on
May 31, 2018, China will still be the largest solar PV
market this year with 34.5 GW already installed during the first
three quarters of 2018. In late September, China's National Development and Reform
Commission released the second draft of renewable energy portfolio
standard, which is expected to lay a solid foundation for the
nation's goals of increasing non-fossil energies as percentage of
total primary energy to 15% in 2020 and 20% in 2030, respectively.
In addition, China National Energy Administration held an informal
gathering on November 2, in which it
reiterated the government's continuous support to the solar PV
industry and hinted that it might increase China's cumulative solar installation target by 2020
to at least 210 GW or higher. Subsidies will also continue until
2022 when grid parity is expected to be achieved. Several
government agencies have also started to evaluate potential
opportunities to effectively reduce the soft cost of solar PV
projects so that an increasing number of grid-parity projects will
become feasible in China as soon
as possible. Solar PV is becoming one of the most
cost-effective and feasible forms of renewable energy generation in
many global markets, including China. With cost reduction efforts continuing
throughout the entire solar PV value chain, we believe the new era
of grid parity in the global solar PV market is just around the
corner."
"As one of the industry's leading suppliers, Daqo New Energy
benefits from its strong cost structure advantage and quality,
which are continuously being improved upon with the addition of our
Phase 3B and 4A projects. Our Phase
4A project is currently under construction and is expected to begin
pilot production in the fourth quarter of 2019. We expect to ramp
up Phase 4A to full production in the first quarter of 2020 which
will expand our total production capacity to 70,000 MT and reduce the overall total cost of
polysilicon production for our Xinjiang facilities to approximately
US$6.80 per kilogram. We believe the
combination of our cost structure advantage, high quality products
and increasing capacity will allow us to benefit from future
sustainable growth of global solar PV markets."
Corporate Developments
In September 2018, the Company
made a strategic decision to discontinue its Chongqing business subsidiary, including its
solar wafer manufacturing operations, to accommodate the
increasingly challenging market conditions. Accordingly, the
Company has incurred $6.8 million in
fixed-asset impairment and $1.3
million in employee severance related to wafer sector in the
third quarter. For financial reporting purpose, the Chongqing subsidiary has been classified as
"discontinued operations." Furthermore, the company recognized
$11.4 million fixed assets impairment
loss for its Chongqing polysilicon
facilities in the third quarter, which resulted from assets
identified as non-transferrable and/or not able to be reutilized by
its Xinjiang polysilicon manufacturing or expansion projects. The
operational results of the Chongqing business have been excluded from the
Company's financial results from continuing operations and have
been separately presented under discontinued operations.
Retrospective adjustments to the historical statements have also
been made to provide a consistent basis of comparison for the
financial results. Going forward, the Company will focus all of its
resources and expertise on its core polysilicon manufacturing
business.
Outlook and guidance
The Company expects to produce approximately 7,000 MT to 7,100 MT
of polysilicon and sell approximately 6,800
MT to 6,900 MT of polysilicon
to external customers during the fourth quarter of 2018. For the
full year 2018, the Company expects to produce approximately
23,000 MT of polysilicon.
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.
Third Quarter 2018 Results
Revenues
Revenues were $67.4 million,
compared to $63.0 million in the
second quarter of 2018 and $72.9
million in the third quarter of 2017. The sequential
increase in revenues was primarily due to higher polysilicon sales
volumes offset in part by lower ASPs.
Gross profit and margin
Gross profit was approximately $12.8
million, compared to $25.2
million in the second quarter of 2018 and $26.8 million in the third quarter of 2017.
Gross margin was 19.1%, compared to 40.1% in the second quarter
of 2018 and 36.7% in the third quarter of 2017. The sequential
decrease was primarily due to lower ASPs partially offset by lower
average polysilicon production cost.
Selling, general and administrative expenses
Selling, general and administrative (SG&A) expenses were
$7.6 million, compared to
$7.5 million in the second quarter of
2018 and $4.0 million in the third
quarter of 2017. The year-over-year increase in SG&A was
primarily due to an 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
$1.4 million, compared to
$0.2 million in the second quarter of
2018 and $0.1 million in the third
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 $0.1
million, compared to $0.5
million in the second quarter of 2018 and $0.1 million in the third quarter of 2017. Other
operating income mainly consists of unrestricted cash incentives
that the Company receives 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 $4.0 million, compared to $18.0 million in the second quarter of 2018 and
$22.8 million in the third quarter of
2017. Operating margin was 5.9%, compared to 28.6% in the second
quarter of 2018 and 31.3% in the third quarter of 2017.
Interest expense
Interest expense was $2.1 million,
compared to $3.1 million in the
second quarter of 2018 and $4.0
million in the third quarter of 2017.
Foreign exchange gain/ (loss)
Foreign exchange gain was $1.9
million, compared to $0.1
million in the second quarter of 2018 and loss of
$0.1 million in the third quarter of
2017. The Company realized exchange gain of $1.9 million occurred in the third quarter due to
depreciation of RMB against USD in relation to the exchange
settlement of proceeds from the Company's following-on offering in
the second quarter of 2018.
EBITDA
EBITDA from continuing operations was $14.8 million, compared to $27.4 million in the second quarter of 2018 and
$31.9 million in the third quarter of
2017. EBITDA margin was 22.0%, compared to 43.6% in the second
quarter of 2018 and 43.8% in the third quarter of 2017.
Income (loss) from discontinued operations, net of
tax
During the third quarter, the Company decided to discontinue its
solar wafer manufacturing operations. Results of the discontinued
operations of the previous quarter and comparative quarter were
represented accordingly. Loss on discontinued operations was
$22.4 million in the third quarter of
2018, compared to net income from discontinued operations of
$2.7 million in the second quarter of
2018 and $9.7 million in the third
quarter of 2017.
Net income (loss) attributable to Daqo New Energy Corp.
shareholders and earnings/ (loss) per ADS
As a result of the foregoing, net loss attributable to Daqo New
Energy Corp. shareholders was $18.3
million, compared to net income attributable to Daqo New
Energy Corp. Shareholders of $13.4
million in the second quarter of 2018 and $24.1 million in the third quarter of 2017. Loss
per basic ADS was $1.39, compared to
earning per basic ADS of $1.06 in the
second quarter of 2018 and $2.28 in
the third quarter of 2017.
Adjusted net income attributable to Daqo New Energy Corp.
shareholders and adjusted earnings per basic ADS
Excluding the impact of non-cash costs and expenses such as
costs related to the Chongqing
polysilicon operations, share-based compensation costs and
long-lived assets impairment, adjusted net income attributable to
Daqo New Energy Corp. shareholders was $4.3
million, compared to $18.2
million in the second quarter of 2018 and $25.6 million in the third quarter of 2017.
Adjusted earnings per basic ADS was $0.33, compared to $1.44 in the second quarter of 2018 and
$2.42 in the third quarter of
2017.
Financial Condition
As of September 30, 2018, the
Company had $110.3 million in cash,
cash equivalents and restricted cash, compared to $155.3 million as of June
30, 2018 and $39.9 million as
of September 30, 2017. As of
September 30, 2018, the accounts
receivable balance was $1 thousand,
compared to $8 thousand as of
June 30, 2018 and $1.3 million as of September 30, 2017. As of September 30, 2018, the notes receivable balance
was $22.5 million, compared to
$17.0 million as of June 30, 2018 and $11.9
million as of September 30,
2017. As of September 30,
2018, total borrowings were $165.3
million, of which $119.4
million were long-term borrowings, compared to total
borrowings of $171.5 million,
including $92.9 million long-term
borrowings, as of June 30, 2018 and
total borrowings of $190.0 million,
including $117.2 million long-term
borrowings, as of September 30,
2017.
Cash Flows
For the nine months ended September 30,
2018, net cash provided by operating activities from
continuing operations was $48.7
million, compared to $69.7
million in the same period of 2017.
For the nine months ended September 30,
2018, net cash used in investing activities from continuing
operations was $90.1 million,
compared to $19.9 million in the same
period of 2017. The net cash used in investing activities from
continuing operations in the first nine months of 2018 and 2017 was
primarily related to the capital expenditure on the Xinjiang
polysilicon projects.
For the nine months ended September 30,
2018, net cash provided by financing activities from
continuing operations was $96.5
million, compared to net cash used in financing activities
of $21.3 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 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.
The Company 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. 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; the
Company will remove this adjustment from the non-GAAP reconciling
items begging from the fourth quarter of 2018, since as of the end
of the third quarter of 2018, all of the polysilicon machinery and
equipment have been either relocated to Xinjiang, disposed of, or
planned to be disposed of. Adjusted net income attributable to Daqo
New Energy Corp. shareholders and adjusted earnings per basic ADS
also exclude costs related to share-based compensation and
long-lived assets impairment. Share-based compensation is a
non-cash expense that varies from period to period. Long-lived
assets impairment during the third quarter of 2018 is a non-cash
write-off related to the discontinued solar wafer and polysilicon
manufacturing facilities in Chongqing. As a result, management excludes
these items from its internal operating forecasts and models.
Management believes that this adjustment for share-based
compensation and long-lived assets impairment related to the
discontinued operations 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
November 13, 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
|
|
|
Please dial in 10
minutes before the call is scheduled to begin and ask to join the
Daqo New Energy Corp. call.
|
You can also listen to the conference call via Webcast through
the URL: https://services.choruscall.com/links/dq181113.html
A replay of the call will be available 1 hour after the end of
the conference through November 20,
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:
|
10125917
|
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.
Daqo's highly-efficient and technically advanced manufacturing
facility in Xinjiang, China
currently has a nameplate annual polysilicon production capacity of
30,000 metric tons, and the Company is undergoing a debottlenecking
project and a capacity expansion project and expects to increase
its annual polysilicon production capacity to 70,000 metric tons in
the first quarter of 2020.
For more information, please visit http://daqo.gotoip1.com/
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
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 fourth 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; the
Company's ability to significantly expand its polysilicon
production capacity and output; the reduction in or elimination of
government subsidies and economic incentives for solar energy
applications; and the Company's ability to lower its production
costs. Further information regarding these and other risks is
included in the reports or documents the Company has filed with, or
furnished to, the Securities and Exchange Commission. All
information provided in this press release is as of the date
hereof, and the Company undertakes no duty to update such
information or any forward-looking statement, except as required
under applicable law.
|
Daqo New Energy
Corp.
|
|
Unaudited
Condensed Consolidated Statement of Operations and Comprehensive
Income/(Loss)
|
|
(US dollars in
thousands, except ADS and per ADS data)
|
|
|
|
Three months
ended
|
Nine months
ended
|
|
|
Sept 30,
2018
|
|
Jun 30,
2018
|
|
Sept 30,
2017
|
|
Sept 30,
2018
|
|
Sept 30,
2017
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
$67,390
|
|
$62,963
|
|
$72,855
|
|
$225,997
|
|
$204,279
|
|
Cost of
revenues
|
|
(54,543)
|
|
(37,717)
|
|
(46,105)
|
|
(144,821)
|
|
(128,368)
|
|
Gross
profit
|
|
12,847
|
|
25,246
|
|
26,750
|
|
81,176
|
|
75,911
|
|
Operating
expenses
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and
administrative expenses
|
|
(7,567)
|
|
(7,516)
|
|
(3,962)
|
|
(18,837)
|
|
(11,560)
|
|
Research and
development expenses
|
|
(1,437)
|
|
(209)
|
|
(101)
|
|
(1,767)
|
|
(629)
|
|
Other operating
income
|
|
138
|
|
480
|
|
118
|
|
650
|
|
499
|
|
Total operating
expenses
|
|
(8,866)
|
|
(7,245)
|
|
(3,945)
|
|
(19,954)
|
|
(11,690)
|
|
Income from
operations
|
|
3,981
|
|
18,001
|
|
22,805
|
|
61,222
|
|
64,221
|
|
Interest
expense
|
|
(2,126)
|
|
(3,083)
|
|
(4,047)
|
|
(8,872)
|
|
(12,561)
|
|
Interest
income
|
|
276
|
|
374
|
|
111
|
|
795
|
|
284
|
|
Foreign exchange gain
(loss)
|
|
1,937
|
|
5
|
|
(2)
|
|
1,938
|
|
(4)
|
|
Income before income
taxes
|
|
4,068
|
|
15,297
|
|
18,867
|
|
55,083
|
|
51,940
|
|
Income tax
(expense)/benefit
|
|
87
|
|
(4,377)
|
|
(4,218)
|
|
(10,154)
|
|
(11,728)
|
|
Net income from
continuing operations
|
|
4,155
|
|
10,920
|
|
14,649
|
|
44,929
|
|
40,212
|
|
(Loss)/income from
discontinued operations, net of tax
|
|
(22,410)
|
|
2,681
|
|
9,702
|
|
(17,612)
|
|
19,550
|
|
Net
(loss)/income
|
|
(18,255)
|
|
13,601
|
|
24,351
|
|
27,317
|
|
59,762
|
|
Net income
attributable to non-controlling interest
|
|
41
|
|
195
|
|
242
|
|
575
|
|
634
|
|
Net (loss)/income
attributable to Daqo New Energy Corp.
shareholders
|
|
$(18,296)
|
|
$13,406
|
|
24,109
|
|
26,742
|
|
59,128
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
(loss)/income
|
|
(18,255)
|
|
13,601
|
|
24,351
|
|
27,317
|
|
59,762
|
|
Other comprehensive
income:
|
|
|
|
|
|
|
|
|
|
|
|
Foreign currency
translation adjustments
|
|
(18,706)
|
|
(23,412)
|
|
6,004
|
|
(27,291)
|
|
13,074
|
|
Total other
comprehensive (loss)/income
|
|
(18,706)
|
|
(23,412)
|
|
6,004
|
|
(27,291)
|
|
13,074
|
|
Comprehensive
(loss)/income
|
|
(36,961)
|
|
(9,811)
|
|
30,355
|
|
26
|
|
72,836
|
|
Comprehensive
(loss)/income attributable to non-
controlling interest
|
|
(34)
|
|
19
|
|
281
|
|
432
|
|
719
|
|
Comprehensive
(loss)/income attributable to Daqo New
Energy Corp. shareholders
|
|
$ (36,927)
|
|
$(9,830)
|
|
$30,074
|
|
$(406)
|
|
72,117
|
|
|
|
|
|
|
|
|
|
|
|
|
(Loss)/Earnings
per ADS
|
|
|
|
|
|
|
|
|
|
|
|
- continuing
operations
|
|
0.32
|
|
0.85
|
|
1.36
|
|
3.63
|
|
3.75
|
|
- discontinued
operations
|
|
(1.71)
|
|
0.21
|
|
0.92
|
|
(1.44)
|
|
1.85
|
|
Basic
|
|
(1.39)
|
|
1.06
|
|
2.28
|
|
2.19
|
|
5.60
|
|
|
|
|
|
|
|
|
|
|
|
|
- continuing
operations
|
|
0.31
|
|
0.80
|
|
1.33
|
|
3.45
|
|
3.69
|
|
- discontinued
operations
|
|
(1.67)
|
|
0.20
|
|
0.89
|
|
(1.37)
|
|
1.82
|
|
Diluted
|
|
(1.36)
|
|
1.00
|
|
2.22
|
|
2.08
|
|
5.51
|
|
Weighted average ADS
outstanding
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
13,122,403
|
|
12,630,578
|
|
10,570,485
|
|
12,208,626
|
|
10,560,197
|
|
Diluted
|
|
13,444,935
|
|
13,364,509
|
|
10,874,914
|
|
12,829,410
|
|
10,728,539
|
|
Daqo New Energy
Corp.
|
|
Unaudited
Consolidated Balance Sheets
|
|
(US dollars in
thousands)
|
|
|
|
Sept 30,
2018
|
|
Jun 30,
2018
|
|
Sept 30,
2017
|
|
|
|
|
|
|
|
|
ASSETS:
|
|
|
|
|
|
|
|
Current
Assets:
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$110,322
|
|
$155,262
|
|
$39,937
|
|
Restricted
cash
|
|
2,913
|
|
17,215
|
|
18,774
|
|
Short-term
investment
|
|
14,561
|
|
-
|
|
-
|
|
Accounts receivable,
net
|
|
1
|
|
8
|
|
1,314
|
|
Notes
receivable
|
|
22,500
|
|
16,997
|
|
11,937
|
|
Prepaid expenses and
other current assets
|
|
9,029
|
|
7,426
|
|
5,934
|
|
Advances to
suppliers
|
|
2,225
|
|
1,295
|
|
3,111
|
|
Inventories
|
|
17,021
|
|
29,643
|
|
13,768
|
|
Amount due from related
parties
|
|
4,560
|
|
5,137
|
|
95
|
|
Current assets
associated with discontinued operations
|
|
9,641
|
|
20,934
|
|
29,358
|
|
Total current
assets
|
|
192,773
|
|
253,917
|
|
124,228
|
|
Property, plant and
equipment, net
|
|
536,131
|
|
511,590
|
|
465,586
|
|
Prepaid land use
right
|
|
22,415
|
|
23,395
|
|
23,673
|
|
Deferred tax
assets
|
|
676
|
|
702
|
|
611
|
|
Investment in an
affiliate
|
|
651
|
|
675
|
|
607
|
|
Non-current assets
associated with discontinued operations
|
|
62,454
|
|
87,558
|
|
94,672
|
|
TOTAL
ASSETS
|
|
815,100
|
|
877,837
|
|
709,377
|
|
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
|
Short-term borrowings,
including current portion of long-term borrowings
|
|
45,867
|
|
78,571
|
|
72,583
|
|
Accounts
payable
|
|
9,580
|
|
18,309
|
|
14,041
|
|
Notes
payable
|
|
5,237
|
|
26,521
|
|
27,726
|
|
Advances from
customers
|
|
16,380
|
|
19,205
|
|
16,614
|
|
Payables for purchases
of property, plant and equipment
|
|
39,097
|
|
17,516
|
|
23,586
|
|
Accrued expenses and
other current liabilities
|
|
8,356
|
|
5,461
|
|
8,799
|
|
Amount due to related
parties
|
|
1,925
|
|
1,173
|
|
7,617
|
|
Income tax
payable
|
|
3,821
|
|
5,233
|
|
7,951
|
|
Current liabilities
associated with discontinued operations
|
|
23,228
|
|
34,916
|
|
38,981
|
|
Total current
liabilities
|
|
153,491
|
|
206,905
|
|
217,898
|
|
Long-term
borrowings
|
|
119,399
|
|
92,915
|
|
117,208
|
|
Other long-term
liabilities
|
|
21,642
|
|
22,608
|
|
22,935
|
|
Advance from customers
– long term portion
|
|
9,028
|
|
11,181
|
|
-
|
|
Non-current liabilities
associated with discontinued operations
|
|
744
|
|
791
|
|
2,952
|
|
TOTAL
LIABILITIES
|
|
304,304
|
|
334,400
|
|
360,993
|
|
|
|
|
|
|
|
|
EQUITY:
|
|
|
|
|
|
|
|
Ordinary
shares
|
|
33
|
|
33
|
|
27
|
|
Treasury
stock
|
|
(1,749)
|
|
(1,749)
|
|
(1,749)
|
|
Additional paid-in
capital
|
|
363,312
|
|
358,992
|
|
243,930
|
|
Accumulated
gains
|
|
160,017
|
|
178,313
|
|
99,560
|
|
Accumulated other
comprehensive income
|
|
(14,041)
|
|
4,590
|
|
4,268
|
|
Total Daqo New Energy
Corp.'s shareholders' equity
|
|
507,572
|
|
540,179
|
|
346,036
|
|
Non-controlling
interest
|
|
3,224
|
|
3,258
|
|
2,348
|
|
Total
equity
|
|
510,796
|
|
543,437
|
|
348,384
|
|
TOTAL LIABILITIES
& EQUITY
|
|
815,100
|
|
877,837
|
|
709,377
|
|
Daqo New Energy
Corp.
|
|
Unaudited
Consolidated Statements of Cash Flows
|
|
(US dollars in
thousands)
|
|
|
|
For the nine months
ended Sept 30,
|
|
|
2018
|
|
2017
|
|
Operating
Activities:
|
|
|
|
|
|
Net income
|
|
27,317
|
|
59,762
|
|
Less: (Loss)/income
from discontinued operations, net of tax
|
|
(17,612)
|
|
19,550
|
|
Net income from
continuing operations
|
|
44,929
|
|
40,212
|
|
Adjustments to
reconcile net income to net cash provided by operating
activities:
|
|
|
|
|
|
Share-based compensation
|
|
9,510
|
|
3,031
|
|
Depreciation of property, plant and equipment
|
|
20,368
|
|
20,440
|
|
|
|
|
|
|
Changes in operating
assets and liabilities:
|
|
|
|
|
|
Accounts
receivable
|
|
699
|
|
549
|
|
Notes
receivable
|
|
(2,973)
|
|
(1,933)
|
|
Prepaid
expenses and other current assets
|
|
(3,417)
|
|
562
|
|
Advances
to suppliers
|
|
(773)
|
|
(1,599)
|
|
Inventories
|
|
(4,000)
|
|
(7,117)
|
|
Amount due
from related parties
|
|
-
|
|
1,447
|
|
Amount due
to related parties
|
|
5,566
|
|
(11,514)
|
|
Prepaid
land use rights
|
|
414
|
|
396
|
|
Accounts
payable
|
|
(9,201)
|
|
(721)
|
|
Notes
payable
|
|
(11,286)
|
|
12,323
|
|
Accrued
expenses and other current liabilities
|
|
(2,001)
|
|
2,808
|
|
Income tax
payable
|
|
(9,159)
|
|
2,367
|
|
Advances
from customers
|
|
10,445
|
|
8,916
|
|
Deferred
government subsidies
|
|
(461)
|
|
(441)
|
|
Net cash provided by
operating activities – continuing operations
|
|
48,660
|
|
69,726
|
|
Net cash provided by
operating activities – discontinued operations
|
|
14,939
|
|
28,689
|
|
Net cash provided by
operating activities
|
|
63,599
|
|
98,415
|
|
|
|
|
|
|
Investing
activities:
|
|
|
|
|
|
Purchases of property,
plant and equipment
|
|
(74,774)
|
|
(19,870)
|
|
Purchase of short-term
investment
|
|
(15,373)
|
|
-
|
|
Net cash used in
investing activities – continuing operations
|
|
(90,147)
|
|
(19,870)
|
|
Net cash used in
investing activities – discontinued operations
|
|
(9,783)
|
|
(21,114)
|
|
Net cash used in
investing activities
|
|
(99,930)
|
|
(40,984)
|
|
|
|
|
|
|
Financing
activities:
|
|
|
|
|
|
Proceeds from related
parties loans
|
|
35,358
|
|
19,245
|
|
Repayment of related
parties loans
|
|
(35,358)
|
|
(19,245)
|
|
Proceeds from bank
borrowings
|
|
27,979
|
|
47,546
|
|
Repayment of bank
borrowings
|
|
(38,741)
|
|
(69,654)
|
|
Cash received from
exercise of options
|
|
685
|
|
788
|
|
Proceeds from
follow-on offering
|
|
113,541
|
|
-
|
|
Issuance
cost
|
|
(6,919)
|
|
-
|
|
Net cash provided by
(used in) financing activities – continuing operations
|
|
96,545
|
|
(21,320)
|
|
Net cash used in
financing activities – discontinued operations
|
|
(12,271)
|
|
(8,313)
|
|
Net cash provided by
(used in) financing activities
|
|
84,274
|
|
(29,633)
|
|
|
|
|
|
|
Effect of exchange
rate changes
|
|
(5,636)
|
|
1,881
|
|
Net increase in cash,
cash equivalents and restricted cash
|
|
42,307
|
|
29,679
|
|
Cash, cash
equivalents and restricted cash at the beginning of the
period
|
|
72,667
|
|
31,881
|
|
Cash, cash
equivalents and restricted cash at the end of the period
|
|
114,974
|
|
61,560
|
|
|
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.
|
|
|
|
Sept 30,
2018
|
|
Sept 30,
2017
|
|
Cash and cash
equivalents
|
|
111,956
|
|
40,903
|
|
Restricted
cash
|
|
3,018
|
|
20,657
|
|
Total cash, cash
equivalents, and restricted cash shown in the
statement of cash flows
|
|
114,974
|
|
61,560
|
|
Daqo New Energy
Corp.
|
|
Reconciliation of
non-GAAP financial measures to comparable US GAAP
measures
|
|
(US dollars in
thousands)
|
|
|
|
Three months
Ended
|
|
Nine months
Ended
|
|
|
Sept 30,
2018
|
|
Jun 30,
2018
|
|
Sept 30,
2017
|
|
Sept 30,
2018
|
|
Sept 30,
2017
|
|
Net income
from continuing operations
|
|
4,155
|
|
10,920
|
|
14,649
|
|
44,929
|
|
40,212
|
|
Income tax
expense/(benefit)
|
|
(87)
|
|
4,377
|
|
4,218
|
|
10,154
|
|
11,728
|
|
Interest
expense
|
|
2,126
|
|
3,083
|
|
4,047
|
|
8,872
|
|
12,561
|
|
Interest
income
|
|
(276)
|
|
(374)
|
|
(111)
|
|
(795)
|
|
(284)
|
|
Depreciation &
Amortization
|
|
8,891
|
|
9,439
|
|
9,103
|
|
27,679
|
|
27,439
|
|
EBITDA from
continuing operations (non-GAAP)
|
|
14,809
|
|
27,445
|
|
31,906
|
|
90,839
|
|
91,656
|
|
EBITDA margin
from continuing operations
(non-GAAP)
|
|
22.0%
|
|
43.6%
|
|
43.8%
|
|
40.2%
|
|
44.9%
|
|
|
|
Three months
Ended
|
|
Nine months
Ended
|
|
|
Sept 30,
2018
|
|
Jun 30,
2018
|
|
Sept 30,
2017
|
|
Sept 30,
2018
|
|
Sept 30,
2017
|
|
Net income (loss)
attributable to Daqo New Energy Corp. shareholders
|
|
(18,296)
|
|
13,406
|
|
24,109
|
|
26,742
|
|
59,128
|
|
Costs related to the
non-operational Chongqing polysilicon operations
|
|
128
|
|
388
|
|
454
|
|
968
|
|
2,001
|
|
Share-based
compensation
|
|
4,267
|
|
4,384
|
|
1,045
|
|
9,510
|
|
3,031
|
|
Impairment of
long-lived assets
|
|
18,221
|
|
-
|
|
-
|
|
18,221
|
|
-
|
|
Adjusted net
income (non-GAAP) attributable to Daqo New Energy Corp.
shareholders
|
|
4,320
|
|
18,178
|
|
25,608
|
|
55,441
|
|
64,160
|
|
Adjusted earnings
per basic ADS (non-GAAP)
|
|
0.33
|
|
1.44
|
|
2.42
|
|
4.54
|
|
6.08
|
|
Adjusted earnings
per diluted ADS (non-GAAP)
|
|
0.32
|
|
1.36
|
|
2.35
|
|
4.32
|
|
5.98
|
View original
content:http://www.prnewswire.com/news-releases/daqo-new-energy-announces-unaudited-third-quarter-2018-results-300748997.html
SOURCE Daqo New Energy Corp.