Daqo New Energy Q4 revenues $49.5 million
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The company generated revenues of $33.8 million from polysilicon, compared to $32.8 million in the third quarter of 2014, and $24.2 million in the fourth quarter of 2013. The increase from the third quarter of 2014 was primarily due to higher sales volume offset by lower average selling prices.
The company generated $15.7 million from sales of wafers, compared to $14.5 million in the third quarter of 2014 and $11.0 million in the fourth quarter of 2013. The increase from the third quarter of 2014 was primarily due to higher sales volume.
Gross profit was approximately $12.6 million, compared to $11.6 million in the third quarter of 2014 and approximately $1.0 million in the fourth quarter of 2013.
Gross margin was 25.4%, compared to 24.5% in the third quarter of 2014 and 2.6% in the fourth quarter of 2013.
In the fourth quarter of 2014, total costs related to the non-operational Chongqing polysilicon plant including depreciation were $3.3 million, compared to $3.4 million in the third quarter of 2014 and $5.9 million in the fourth quarter of 2013. Excluding such costs, the non-GAAP gross margin was approximately 32.1%, compared to 31.7% in the third quarter of 2014 and 18.5% in the fourth quarter of 2013.
Selling, general and administrative expenses were $4.7 million, compared to $2.5 million in the third quarter of 2014 and $4.0 million in the fourth quarter of 2013.
The increase in selling, general and administrative expenses from the third quarter of 2014 was primarily due to relocation expenses for moving the idle equipment in Chongqing to Xinjiang; the decrease in reversal of bad debt provision in the fourth quarter; and the provision of equipment prepayment in the fourth quarter.
Research and development expenses were approximately $0.2 million, compared to $0.2 million in the third quarter of 2014 and $1.1 million in the fourth quarter of 2013.
Other operating expense was $0.1 million, compared to other operating income of $0.6 million in the third quarter of 2014 and other operating income of $0.1 million in the fourth quarter of 2013. Other operating income was mainly composed of unrestricted cash incentives that the company received from local government authorities, the amount of which fluctuates from period to period.
As a result of the foregoing, operating income was $7.6 million, compared to $9.5 million in the third quarter of 2014 and operating loss of $4.1 million in the fourth quarter of 2013.
Operating margin was 15.4%, compared to 20.0% in the third quarter of 2014 and negative 11.0% in the fourth quarter of 2013.
Net interest expenses were $4 million for the quarter, compared to $3.5 million in the third quarter of 2014. The increase was primarily due to interest charge for discounting bank notes in the fourth quarter of 2014.
EBITDA was $14.7 million in the fourth quarter of 2014, compared to $16.4 million in the third quarter of 2014 and $8.1 million in the fourth quarter of 2013. EBITDA margin was 29.6% in the fourth quarter of 2014, compared to 34.7% in the third quarter of 2014 and 21.9% in the fourth quarter of 2013.
As a result of the aforementioned, net income attributable to Daqo New Energy Corp. shareholders was $3.6 million in the fourth quarter of 2014, compared to $5.9 million in the third quarter of 2014 and net loss attributable to Daqo New Energy Corp. shareholders of $8.0 million in the fourth quarter of 2013.
Net income per ADS was $0.40 in the fourth quarter of 2014, compared to $0.66 in the third quarter of 2014, and loss per ADS of $1.16 in the fourth quarter of 2013.
As of December 31, 2014, the company had $29.2 million in cash and cash equivalents and restricted cash, compared to $30.0 million as of September 30, 2014 and $16.7 million as of December 31, 2013.
As of December 31, 2014, the accounts receivable balance was $8.7 million, compared to $6.8 million as of September 30, 2014. As of December 31, 2014, the notes receivable balance was $50.2 million, compared to $36.8 million as of September 30, 2014.
As of December 31, 2014, total borrowings were $237.1 million, of which $77.3 million were long-term borrowings, compared to total borrowings of $246.4 million, including $116.6 million long-term borrowings as of September 30, 2014.
For the twelve months ended December 31, 2014, net cash provided by operating activities was $45.6 million, compared to net cash used in operating activities of $16.5 million in the same period of 2013.
For the twelve months ended December 31, 2014, net cash used in investing activities was $90.6 million, compared to $30.7 million in the same period of 2013. The increase was primarily related to the capital expenditure of Xinjiang Phase 2b polysilicon project.
For the twelve months ended December 31, 2014, net cash provided by financing activities was $44.3 million, compared to $48.8 million in the same period of 2013. The net cash provided by financing activities in 2014 was primarily contributed by the net proceeds from the follow-on offering in May 2014 offset by net bank loan repayment.
Full year 2014 results
Revenues increased by 67.5% from $109.0 million in 2013 to $182.6 million in 2014. The increase in total revenues was primarily attributable to higher sales volumes, as well as higher average selling prices in both polysilicon and wafers.
The company shipped approximately 5,962 MT of polysilicon and 70.4 million pieces of wafer during 2014, compared to 4,240 MT of polysilicon and 33.5 million pieces of wafer during 2013.
Gross profit for 2014 was $43.3 million, compared to gross loss of $26.1 million in 2013. Gross margin was 23.7% in 2014, compared to negative 23.9% in 2013. The improvement in gross profit and gross margin from 2013 was primarily due to improved cost structures and higher average selling prices for both polysilicon and wafer.
Selling, general and administrative expenses were $10.3 million in 2014, compared to $18.1 million in 2013. The decrease in selling, general and administrative expenses was primarily due to reversal of provisions for bad debts in 2014 with the settlement of long aging receivables.
Research and development expenses decreased from $3.4 million in 2013 to $1.5 million in 2014, and decreased as a percentage of total revenues from 3.1% in 2013 to 0.8% in 2014. The research and development expenses in 2014 and 2013 primarily resulted from continuous technology improvement projects for polysilicon and wafer production.
In 2014, no long-lived assets impairment loss was recognized. In the second quarter of 2013, the company recognized a $158.4 million impairment loss for the long-lived assets of its Chongqing polysilicon facilities. Such loss was made to reflect the adverse effects market challenges had on the profit-generating ability of the assets.
Other operating income decreased from $5.4 million in 2013 to $0.6 million in 2014, which mainly consisted of unrestricted cash incentives that we received from local government authorities, which fluctuates from period to period at the discretion of the government.
As a result of the foregoing, operating income was $32.0 million in 2014, compared to operating loss of $200.6 million in 2013. The company recognized a $158.4 million impairment loss for the long-lived assets of its Chongqing polysilicon facilities in the second quarter of 2013. No such loss was recognized in 2014. Operating margin was 17.5% in 2014, compared to negative 184.1% in 2013.
Net interest expenses decreased from $19.2 million in 2013 to $15.3 million in 2014. The decrease from 2013 was primarily due to a decrease in bank borrowing balance.
Income tax expenses were $nil million in 2014, compared to $1.3 million in 2013. In consideration of the uncertainty in the solar market, we determined it was more likely than not that our deferred tax assets would not be fully utilized before they expire.
As a result of the factors described above, we had net income attributable to our shareholders of $16.7 million, compared to net loss attributable to our shareholders of $70.9 million for 2013. ■