Daqo Breaks Record of Quarterly Polysilicon Production Volume

Daqo New Energy, a Chinese polysilicon manufacturer, has announced its unaudited financial results for the first quarter of 2015. Its polysilicon production volume again broke its own record, reaching 1,801 MT. However, revenues, gross profit and gross margin dropped from the previous quarter and the same quarter in 2014. It shipped less polysilicon in 1Q15 compared to 4Q14.

First Quarter 2015 Financial and Operating Highlights

• Record-high polysilicon production volume of 1,801 MT in Q1 2015, compared to 1,791 MT in Q4 2014
• Polysilicon shipments of 1,532 MT in Q1 2015, compared to 1,537 MT in Q4 2014
• Record-low polysilicon production cost(2) of $12.80/kg in Q1 2015, compared to $13.23/kg in Q4 2014; cash cost of $10.53/kg in Q1 2015, compared to $10.88/kg in Q4 2014
• Wafer shipments of 18.8 million pieces in Q1 2015, compared to 17.8 million pieces in Q4 2014
• Non-GAAP gross margin(1) of 28.0% in Q1 2015, compared to 32.1% in Q4 2014
• EBITDA(non-GAAP)(1)of $11.4 million in Q1 2015, compared to $14.7 million in Q4 2014
• Net income attributable to Daqo shareholders of $1.2 million in Q1 2015, compared to $3.6 million in Q4 2014

Note:

(1) Daqo New Energy provides non-GAAP gross profit, non-GAAP gross margin, EBITDA and EBITDA margin on a non-GAAP basis to provide supplemental information regarding its operating performance. For more information on these non-GAAP financial measures, please see the section captioned "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.

(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 quarter. 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 quarter.