October 20, 2020

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Daqo New Energy Announces Unaudited Second Quarter 2020 Results


SHIHEZI, China, Aug. 18, 2020 /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 2020.

Second Quarter 2020 Financial and Operating Highlights

  • Polysilicon production volume was 18,097 MT in Q2 2020, compared to 19,777 MT in Q1 2020
  • Polysilicon sales volume was 18,881 MT in Q2 2020, compared to 19,101 MT in Q1 2020
  • Polysilicon average total production cost(1) was $5.79/kg in Q2 2020, compared to $5.86/kg in Q1 2020
  • Polysilicon average cash cost(1) was $4.87/kg in Q2 2020, compared to $5.01/kg in Q1 2020
  • Polysilicon average selling price (ASP) was $7.04/kg in Q2 2020, compared to $8.79/kg in Q1 2020
  • Revenue from continuing operations was $133.5 million in Q2 2020, compared to $168.8 million in Q1 2020
  • Gross profit from continuing operations was $22.7 million in Q2 2020, compared to $56.6 million in Q1 2020. Gross margin from continuing operations was 17.0% in Q2 2020, compared to 33.5% in Q1 2020
  • EBITDA (non-GAAP)(2) from continuing operations was $26.8 million in Q2 2020, compared to $63.1 million in Q1 2020. EBITDA margin (non-GAAP)(2) from continuing operations was 20.0% in Q2 2020, compared to 37.4% in Q1 2020
  • Net income attributable to Daqo New Energy Corp. shareholders was $2.4 million in Q2 2020, compared to $33.2 million in Q1 2020
  • Earnings per basic American Depositary Share (ADS) was $0.17 in Q2 2020, compared to $2.37 in Q1 2020
  • Adjusted net income (non-GAAP)(2) attributable to Daqo New Energy Corp. shareholders was $6.9 million in Q2 2020, compared to $37.7 million in Q1 2020
  • Adjusted earnings per basic ADS (non-GAAP)(2) was $0.49 in Q2 2020, compared to $2.69 in Q1 2020

Three months ended

US$ millions

except as indicated otherwise

Jun 30,
2020

Mar 31,
2020

Jun 30,
2019

Revenues

133.5

168.8

66.0

Gross profit

22.7

56.6

8.6

Gross margin

17.0%

33.5%

13.0%

Income / (loss) from operations

10.8

45.8

(0.4)

Net income / (loss) attributable to Daqo New Energy
Corp. shareholders

2.4

33.2

(2.2)

Earnings / (loss) per basic ADS ($ per ADS)

0.17

2.37

(0.16)

Adjusted net income (non-GAAP)(2) attributable to
Daqo New Energy Corp. shareholders

6.9

37.7

2.3

Adjusted earnings per basic ADS (non-GAAP)(2)
($ per ADS)

0.49

2.69

0.17

EBITDA (non-GAAP)(2) from continuing operations

26.8

63.1

10.2

EBITDA margin (non-GAAP)(2) from continuing
operations

20.0%

37.4%

15.5%

Polysilicon sales volume (MT)

18,881

19,101

7,130

Polysilicon average total production cost ($/kg)(1)

5.79

5.86

8.12

Polysilicon average cash cost (excl. dep’n) ($/kg)(1)

4.87

5.01

6.65

Notes:

(1) 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 indicated. Cash cost
is calculated by the inventoriable costs relating to production of polysilicon excluding depreciation expense, divided by the production
volume in the period indicated.

(2) 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, “The second quarter of 2020 was a particularly challenging time for the polysilicon industry. Beginning in late March, the global spread of COVID-19 and related lockdowns, particularly in the U.S., Europe and certain emerging markets, resulted in significant disruptions to demand for solar PV products. End-market customers delayed module orders and shipments due to uncertainties about the duration and economic impact of the pandemic, as well as logistical challenges. This led to short-term market uncertainty and volatility across the entire solar PV industry during the second quarter. This abnormal market environment, with its sharp and sudden drop in demand, resulted in significant negative impact to polysilicon pricing for the quarter. Fortunately, the impact was temporary, and the market began to recover in May with orders and demand normalizing in June, supported by a strong end-market in China and abroad. We are pleased that despite such challenges faced by the industry during the period, Daqo New Energy was able to generate positive net income for the quarter, further demonstrating the strength and resilience of our business model and our proven low cost structure.”

“Towards the end of the second quarter, we began to see very positive momentum in solar PV demand in both domestic and overseas markets, supported by further capacity expansions by downstream mono-wafer customers. This has translated into meaningful demand improvement for polysilicon, which has driven a significant increase in polysilicon ASPs recently. Current market ASPs for mono-grade polysilicon are approximately $11~$12/kg, a significant improvement from approximately $7.5/kg in the second quarter. We expect polysilicon supply to remain tight as the overall demand for PV solar continues to grow, supported by continued mono-wafer production capacity expansion and limited additional supply of polysilicon over the next 15 months.”

“In the second quarter, we produced and sold 18,097 MT and 18,881 MT of polysilicon, respectively, exceeding our guidance. We conducted annual maintenance for our manufacturing facility in the second quarter. However, some technology upgrade projects, as well as equipment modification, have been re-scheduled to August due to the delayed delivery of some key equipment and long-lead time maintenance parts. This will have some impact on the third quarter production volume. As a result, we expect to produce approximately 17,500 MT to 18,000 MT of polysilicon during the third quarter. We expect to resume to 100% utilization rate in September after the completion of such projects. Our expected annual production volume for 2020 remains unchanged at 73,000 MT to 75,000 MT.”

“During the quarter, we continued to make strong progress towards quality improvement and cost structure. Approximately 95% of our polysilicon production reached mono-grade quality during the quarter. At the same time, we continued to improve our cost structure, with further reductions in energy and material usage per unit of production. Despite the impact of annual maintenance during the quarter, we achieved a historically-low cash cost of $4.87/kg.”

“We believe the solar PV market has entered a new phase of sustained growth as grid parity has been achieved in many countries and regions around the globe. Solar PV is one of the very few energy resources which are clean, sustainable and cost effective, even compared with traditional fossil fuel power generation methods. It is playing an increasingly important role in meeting the growing global energy demand and addressing critical environmental issues such as climate change and sustainable development. We will continue our commitment to provide high quality polysilicon products to better serve the fast-growing demand for solar PV energy.”

Outlook and guidance

The Company expects to produce approximately 17,500 MT to 18,000 MT of polysilicon and sell approximately 17,000 MT to 17,500 MT of polysilicon to external customers during the third quarter of 2020. For the full year of 2020, the Company expects to produce approximately 73,000 MT to 75,000 MT of polysilicon, inclusive of the impact of the Company’s 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 changes. 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 2020 Results

Revenues

Revenues were $133.5 million, compared to $168.8 million in the first quarter of 2020 and $66.0 million in the second quarter of 2019. The sequential decrease in revenues was primarily due to lower ASP combined with lower polysilicon sales volume.

Gross profit and margin

Gross profit was $22.7 million, compared to $56.6 million in the first quarter of 2020 and $8.6 million in the second quarter of 2019. Gross margin was 17.0%, compared to 33.5% in the first quarter of 2020 and 13.0% in the second quarter of 2019. The decrease in gross margin was primarily due to lower ASP despite the improvement in production costs.

Selling, general and administrative expenses

Selling, general and administrative expenses were $10.1 million, compared to $8.9 million in the first quarter of 2020 and $7.8 million in the second quarter of 2019. SG&A expenses during the quarter included $4.0 million in non-cash share-based compensation costs related to the Company’s share incentive plan.

Research and development expenses

Research and development (R&D) expenses were $2.0 million, compared to $1.7 million in the first quarter of 2020 and $1.5 million in the second quarter of 2019. Research and development expenses can vary from period to period and reflect R&D activities that take place during the quarter.

Income / loss from operations and operating margin

As a result of the foregoing, income from operations was $10.8 million, compared to $45.8 million in the first quarter of 2020 and loss from operations of $0.4 million in the second quarter of 2019. Operating margin was 8.1%, compared to 27.1% in the first quarter of 2020.

Interest expense

Interest expense was $6.7 million, compared to $6.3 million in the first quarter of 2020 and $1.9 million in the second quarter of 2019.

EBITDA (non-GAAP)

EBITDA (non-GAAP) from continuing operations was $26.8 million, compared to $63.1 million in the first quarter of 2020 and $10.2 million in the second quarter of 2019. EBITDA margin (non-GAAP) was 20.0%, compared to 37.4% in the first quarter of 2020 and 15.5% in the second quarter of 2019.

Net income / loss attributable to Daqo New Energy Corp. shareholders and earnings / loss per ADS

As a result of the aforementioned, net income attributable to Daqo New Energy Corp. shareholders was $2.4 million in the second quarter of 2020, compared to net income attributable to Daqo New Energy Corp. shareholders of $33.2 million in the first quarter of 2020 and net loss attributable to Daqo New Energy Corp. shareholders of $2.2 million in the second quarter of 2019.

Earnings per basic ADS was $0.17 in the second quarter of 2020, compared to earnings per basic ADS of $2.37 in the first quarter of 2020, and loss per basic ADS of $0.16 in the second quarter of 2019.

Financial Condition

As of June 30, 2020, the Company had $115.8 million in cash and cash equivalents and restricted cash, compared to $120.8 million as of March 31, 2020 and $79.6 million as of June 30, 2019. As of June 30, 2020, the notes receivable balance was $8.2 million, compared to $4.4 million as of March 31, 2020 and $9.4 million as of June 30, 2019. As of June 30, 2020, total borrowings were $264.8 million, of which $116.9 million were long-term borrowings, compared to total borrowings of $265.6 million, including $149.0 million long-term borrowings, as of March 31, 2020 and total borrowings of $243.2 million, including $151.5 million long-term borrowings, as of June 30, 2019.

Cash Flows

For the six months ended June 30, 2020, net cash provided by operating activities was $47.0 million, compared to $67.8 million in the same period of 2019.

For the six months ended June 30, 2020, net cash used in investing activities was $60.4 million, compared to $144.9 million in the same period of 2019. The net cash used in investing activities in 2020 and 2019 was primarily related to the capital expenditures on Xinjiang Phase 3B and 4A polysilicon projects.

For the six months ended June 30, 2020, net cash provided by financing activities was $16.2 million, compared to $61.3 million in the same period of 2019.

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 and amortization (“EBITDA”) and EBITDA margin; adjusted net income attributable to Daqo New Energy Corp. shareholders and adjusted earnings per basic and diluted ADS. Our 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, our 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. Our 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 our 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 our 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 and diluted 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, and the Company had removed this adjustment from the non-GAAP reconciling item since the fourth quarter of 2018, because as of the end of the third quarter of 2018, all of the polysilicon machinery and equipment had been either relocated to Xinjiang, disposed, or planned to be disposed of in due course. Adjusted net income attributable to Daqo New Energy Corp. shareholders and adjusted earnings per basic and diluted 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, our management excludes this item from our internal operating forecasts and models. Our 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 18, 2020. (8:00 PM Beijing / Hong Kong time on the same day).

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 dial in 10 minutes before the call is scheduled to begin and ask to be joined into the Daqo New Energy Corp. call.

You can also listen to the conference call via Webcast through the URL:
https://services.choruscall.com/links/dq200818.html

A replay of the call will be available 1 hour after the end of the conference through August 25, 2020.

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:

10147211

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 70,000 metric tons.

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 and the full year of 2020 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; the Company’s ability to lower its production costs; and the duration of COVID-19 outbreaks in China and many other countries and the impact of the outbreaks and the quarantines and travel restrictions instituted by relevant governments on economic and market conditions, including potentially weaker global demand for solar PV installations that could adversely affect the Company’s business and financial performance. Further information regarding these and other risks is included in the reports or documents the Company has filed with, or furnished to, the U.S. 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

(US dollars in thousands, except ADS and per ADS data)

Three months ended

Six months ended

Jun 30,
2020

Mar 31,
2020

Jun 30,
2019

Jun 30,
2020

Jun 30,
2019

Revenues

$133,518

$168,831

$65,959

$302,349

$147,163

Cost of revenues

(110,820)

(112,277)

(57,390)

(223,097)

(120,253)

Gross profit

22,698

56,554

8,569

79,252

26,910

Operating expenses

Selling, general and administrative
expenses

(10,120)

(8,892)

(7,806)

(19,012)

(15,742)

Research and development expenses

(1,958)

(1,654)

(1,527)

(3,612)

(2,824)

Other operating income / (expense)

133

(215)

365

(82)

434

Total operating expenses

(11,945)

(10,761)

(8,968)

(22,706)

(18,132)

Income / (loss) from operations

10,753

45,793

(399)

56,546

8,778

Interest expense

(6,653)

(6,287)

(1,889)

(12,940)

(3,910)

Interest income

368

151

258

519

582

Foreign exchange loss

(1)

(189)

Income / (loss) before income taxes

4,468

39,657

(2,031)

44,125

5,261

Income tax expense

(2,037)

(6,344)

(662)

(8,381)

(2,091)

Net income / (loss) from continuing
operations

2,431

33,313

(2,693)

35,744

3,170

(Loss) / income from discontinued
operations, net of tax

(55)

(86)

504

(141)

1,282

Net income / (loss)

2,376

33,227

(2,189)

35,603

4,452

Net loss attributable to non-controlling
interest

(7)

(3)

(10)

Net income / (loss) attributable to Daqo
New Energy Corp. shareholders

$2,383

$33,230

$(2,189)

$35,613

$4,452

Net income / (loss)

2,376

33,227

(2,189)

35,603

4,452

Other comprehensive income/ (loss):

Foreign currency translation adjustments

1,213

(9,819)

(12,271)

(8,606)

744

Total other comprehensive income / (loss)

1,213

(9,819)

(12,271)

(8,606)

744

Comprehensive income / (loss)

3,589

23,408

(14,460)

26,997

5,196

Comprehensive loss attributable to non-
controlling interest

(6)

(9)

(15)

Comprehensive income / (loss)
attributable to Daqo New Energy Corp.
shareholders

$ 3,595

$23,417

$(14,460)

$27,012

$5,196

Earnings / (loss) per ADS

– continuing operations

0.17

2.38

(0.20)

2.55

0.23

– discontinued operations

(0.01)

0.04

(0.01)

0.10

Basic

0.17

2.37

(0.16)

2.54

0.33

– continuing operations

0.16

2.28

(0.20)

2.44

0.23

– discontinued operations

(0.01)

0.04

(0.01)

0.09

Diluted

0.16

2.27

(0.16)

2.43

0.32

Weighted average ADS outstanding

Basic

14,109,241

13,991,847

13,492,010

14,042,495

13,426,612

Diluted

14,682,134

14,669,820

13,936,671

14,664,055

13,846,728

Daqo New Energy Corp.

Unaudited Consolidated Balance Sheets

(US dollars in thousands)

Jun 30, 2020

Mar 31, 2020

Jun 30, 2019

ASSETS:

Current Assets:

Cash and cash equivalents

$88,215

$63,168

$31,250

Restricted cash

27,551

57,639

48,375

Accounts receivable, net

65

213

86

Notes receivable

8,163

4,402

9,435

Prepaid expenses and other current assets

13,476

13,249

13,765

Advances to suppliers

6,712

8,962

8,688

Inventories, net

26,824

33,234

19,871

Amount due from related parties

12

4,572

Current assets associated with discontinued
operation

667

664

1,133

Total current assets

171,685

181,531

137,175

Property, plant and equipment, net

956,675

968,418

763,388

Prepaid land use right

28,826

28,936

22,029

Deferred tax assets

1,332

1,330

823

Investment in affiliate

633

631

651

Operating lease Right-of-use assets

153

173

158

Non-current asset associated with discontinued
operation

181

197

55,175

TOTAL ASSETS

1,159,485

1,181,216

979,399

Current liabilities:

Short-term borrowings, including current portion of
long-term borrowings

147,839

116,602

91,760

Accounts payable

18,833

17,716

11,106

Notes payable

49,143

89,614

73,135

Advances from customers-short term portion

23,500

11,640

25,654

Payables for purchases of property, plant and
equipment

97,239

106,208

25,213

Accrued expenses and other current liabilities

18,262

11,284

9,340

Amount due to related parties

8,169

43,363

683

Income tax payable

4,414

10,975

1,975

Lease liabilities – short term portion

74

85

115

Current liabilities associated with discontinued
operation

877

1,164

6,879

Total current liabilities

368,350

408,651

245,860

Long-term borrowings

116,911

149,018

151,475

Advance from customers – long term portion

1,132

1,624

3,496

Amount due to related parties – long term portion

16,247

16,022

Other long-term liabilities

20,067

20,536

21,213

Deferred tax liabilities

5,459

6,271

1,159

Lease liabilities – long term portion

77

58

Non-current liabilities associated with discontinued
operation

702

TOTAL LIABILITIES

528,166

586,177

439,985

EQUITY:

Ordinary shares

36

35

34

Treasury stock

(1,749)

(1,749)

(1,749)

Additional paid-in capital

396,445

391,843

377,767

Accumulated gains

236,535

234,152

175,851

Accumulated other comprehensive loss

(28,538)

(29,750)

(12,489)

Total Daqo New Energy Corp.’s shareholders’ equity

602,729

594,531

539,414

Non-controlling interest

28,590

508

Total equity

631,319

595,039

539,414

TOTAL LIABILITIES & EQUITY

1,159,485

1,181,216

979,399

Daqo New Energy Corp.

Unaudited Consolidated Statements of Cash Flows

(US dollars in thousands)

For the six months ended June 30,

2020

2019

Operating Activities:

Net income

$ 35,603

$4,452

Less: (loss) / income from discontinued operations, net of tax

(141)

1,282

Net income from continuing operations

35,744

3,170

Adjustments to reconcile net income to net cash provided by
operating activities

44,865

30,418

Changes in operating assets and liabilities

(33,599)

32,229

Net cash provided by operating activities-continuing operations

47,010

65,817

Net cash (used in) / provided by operation activities-discontinued
operations

(50)

1,992

Net cash provided by operating activities

46,960

67,809

Investing activities:

Net cash used in investing activities-continuing operations

(60,195)

(146,547)

Net cash (used in) / provided by investing activities-discontinuing
operations

(195)

1,647

Net cash used in investing activities

(60,390)

(144,873)

Financing activities:
Cash received from minority investors
Cash (used in) / received from other financing activities

28,088
(11,796)

72,263

Net cash provided by financing activities – continuing operations

16,292

72,263

Net cash used in financing activities – discontinued operations

(64)

(10,971)

Net cash provided by financing activities

16,228

61,292

Non-cash transactions

Effect of exchange rate changes

(1,667)

357

Net increase / (decrease) in cash, cash equivalents and restricted cash

1,131

(15,415)

Cash, cash equivalents and restricted cash at the beginning of the period

115,294

95,120

Cash, cash equivalents and restricted cash at the end of the period

116,425

79,705

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, 2020

Jun 30, 2019

Cash and cash equivalents

88,874

31,330

Restricted cash

27,551

48,375

Total cash, cash equivalents, and restricted cash shown in the
statement of cash flows

116,425

79,705

Daqo New Energy Corp.

Reconciliation of non-GAAP financial measures to comparable US GAAP measures

(US dollars in thousands)

Three months Ended

Six months Ended

Jun 30,
2020

Mar 31,
2020

Jun 30,
2019

Jun 30,
2020

Jun 30,
2019

Net income / (loss) from continuing operation

2,431

33,313

(2,693)

35,744

3,170

Income tax expense

2,037

6,344

662

8,381

2,091

Interest expense

6,653

6,287

1,889

12,940

3,910

Interest income

(368)

(151)

(258)

(519)

(582)

Depreciation & Amortization

16,004

17,275

10,637

33,279

21,647

EBITDA from continuing operation (non-GAAP)

26,757

63,068

10,237

89,825

30,236

EBITDA margin from continuing operation (non-GAAP)

20.0%

37.4%

15.5%

29.7%

20.5%

Three months Ended

Six months Ended

Jun 30,
2020

Mar 31,
2020

Jun 30,
2019

Jun 30,
2020

Jun 30,
2019

Net income / (loss) attributable to Daqo New Energy Corp.
shareholders

2,383

33,230

(2,189)

35,613

4,452

Share-based compensation

4,491

4,461

4,486

8,952

8,960

Adjusted net income (non-GAAP) attributable to Daqo New
Energy Corp. shareholders

6,874

37,691

2,297

44,565

13,412

Adjusted earnings per basic ADS (non-GAAP)

$0.49

$2.69

$0.17

$3.17

$1.00

Adjusted earnings per diluted ADS (non-GAAP)

$0.47

$2.57

$0.16

$3.04

$0.97

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. Rene Vanguestaine
Phone: +86 178 1749 0483
E-mail: rvanguestaine@christensenir.com

In US
Mr. Tip Fleming
Phone: +1-917-412-3333
Email: tfleming@Christensenir.com

For more information, please visit www.dqsolar.com

Related Links :

http://www.xjdqsolar.com


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