ACM Research Reports First Quarter 2019 Results
May 07 2019 - 4:30PM
ACM Research, Inc. (“ACM” or the “Company”) (NASDAQ:ACMR), a
provider of single-wafer wet cleaning equipment used by
manufacturers of advanced semiconductors, today reported financial
results for its first fiscal quarter ended March 31, 2019.
ACM’s President and Chief Executive Officer Dr. David Wang
commented, “Business momentum continued, and we executed well
relative to our expectations. We delivered solid revenue
growth and profitability, and we introduced two new electrochemical
plating products. First quarter results demonstrate the
competitive strength of our technical expertise, product
differentiation and production scale. All of our products, from
SAPS, TEBO and Tahoe to our new Ultra ECP products, incorporate our
innovative and differentiated technologies, which we have committed
to continuously develop to exceed the expectations of our
customers.”
Dr. Wang continued, “As we look ahead to the remainder of 2019,
we are excited by our business prospects and are committed to
continuing to gain market share with new products, new customers,
and more production steps. We are executing our strategy, and
remain focused on achieving our vision of becoming a major player
in the semiconductor equipment market.”
Operating Highlights
- Shipments. Total shipments in the first
quarter of 2019 were $14 million, versus $10 million in the first
quarter of 2018. Shipments include deliveries for revenue in
the quarter and deliveries of systems awaiting customer acceptance
for potential revenue in future quarters.
- Ultra-C Tahoe. ACM delivered its first
Ultra-C Tahoe evaluation tool to an important strategic customer in
January of 2019. Evaluation of this first tool is on
schedule. The Ultra-C Tahoe tool incorporates innovative and
patented technology to deliver high cleaning performance, but uses
10% or less of the sulfuric acid typically consumed by conventional
high temperature single wafer cleaning tools.
- New Product Introduction. ACM introduced
two electro-plating products at SEMICON China in March of 2019 -
Ultra ECP AP and Ultra ECP MAP. Ultra ECP AP is a back-end
assembly tool used for bumping, or applying copper, tin and nickel
to wafers at the die level before packaging. Ultra ECP MAP is
used in front-end wafer fabrication processes and designed to
deliver world-class electrochemical copper plating for advanced
copper interconnect applications. Both ECP tools offer
significant performance advantages relative to available
competitive products, including greater performance, increased
flexibility, and improved cycle times.
Financial Summary
|
Three Months Ended March 31, |
|
GAAP |
|
Non-GAAP(1) |
|
2019 |
|
2018 |
|
2019 |
|
2018 |
|
(dollars in thousands, except per share data) |
Revenue |
$ |
20,479 |
|
|
$ |
9,743 |
|
|
$ |
20,479 |
|
|
$ |
9,743 |
|
Gross margin(2) |
|
43.1 |
% |
|
|
52.6 |
% |
|
|
43.2 |
% |
|
|
52.7 |
% |
Income from operations(2) |
$ |
2,251 |
|
|
$ |
(1,904 |
) |
|
$ |
2,995 |
|
|
$ |
271 |
|
Net income attributable to ACM
Research, Inc.(2) |
$ |
1,857 |
|
|
$ |
(2,780 |
) |
|
$ |
2,601 |
|
|
$ |
(605 |
) |
Basic EPS(2) |
$ |
0.12 |
|
|
$ |
(0.18 |
) |
|
$ |
0.16 |
|
|
$ |
(0.04 |
) |
Diluted EPS(2) |
$ |
0.10 |
|
|
$ |
(0.18 |
) |
|
$ |
0.14 |
|
|
$ |
(0.04 |
) |
(1) |
Reconciliations to U.S. generally accepted accounting principles
(“GAAP”) financial measures from non-GAAP financial measures are
presented below under “Reconciliation of GAAP to Non-GAAP Financial
Measures.” |
(2) |
Non-GAAP financial measures exclude stock-based compensation. |
The following figures refer to the first quarter of 2019, unless
noted otherwise. All comparisons are with the first quarter
of 2018, unless otherwise noted.
- Revenue increased 110% to $20.5 million, due
to an increased volume of tools shipped for revenue and higher
prices associated with these tools. Revenue for the first
quarter included repeat shipments, and several customer acceptances
of tools shipped in previous quarters.
- Gross margin was 43.1%, compared to 52.6% in
the first quarter of 2018. Gross margin was within the range
of 40.0% to 45.0% set forth in the Company’s long-term business
model. Gross margin in the year-ago period was elevated due
to a concentrated mix of higher-margin SAPS-II tools.
The Company expects gross margin to continue to vary from period to
period due to a variety of factors, such as sales volume and
product mix.
- Operating expenses were $6.6 million, a
decrease of 6%. Non-GAAP operating expenses, which remove
stock-based compensation, were $5.9 million, up 21%. Non-GAAP
operating expenses as a percent of revenue decreased to 29%,
compared to 50% in the first quarter of 2018.
- Net income was $1.9 million,
compared to a net loss of $2.8 million in the first quarter of
2018. Non-GAAP net income was $2.6 million, compared to a
non-GAAP net loss of $0.6 million in the first quarter of
2018.
- Net income per diluted share was $0.10, versus
a net loss of $0.18 in the first quarter of 2018. Non-GAAP
net income per diluted share was $0.14, versus a net loss of $0.04
in the first quarter of 2018.
- Cash and equivalents at quarter-end were $27.4
million, up from $27.1 million at the end of the fourth quarter of
2018 and $15.2 million at the end of the first quarter of
2018.
Outlook
For fiscal year 2019, the Company continues to expect revenue to
be approximately $100 million.
Conference Call Details
A conference call to discuss results will be held on Thursday,
May 8, 2019, at 8:00 a.m. Eastern Time (8:00 p.m. China Time).
Dial-in details for the call are as follows. Please reference
conference ID 6982685.
|
|
|
|
Phone Number |
Toll-Free Number |
|
|
|
United States |
+1 (845) 675-0437 |
+1 (866) 519-4004 |
Hong Kong |
+852 3018 6771 |
+852 8009 06601 |
Mainland China |
+86 (800) 819 0121 |
|
|
+86 (400) 620 8038 |
|
Other International |
+65 6713 5090 |
|
|
|
|
A recording of the webcast will be available on the investor
page of the ACM website at www.acmrcsh.com for one week following
the call.
Use of Non-GAAP Financial Measures
ACM presents non-GAAP gross margin, operating income, net income
(loss), and basic and diluted earnings per share as supplemental
measures to GAAP financial measures regarding ACM’s operational
performance. These supplemental measures exclude the impact of
stock-based compensation, which ACM does not believe is indicative
of its core operating results. A reconciliation of each non-GAAP
financial measure to the most directly comparable GAAP financial
measure is provided below under “Reconciliation of Non-GAAP to GAAP
Financial Measures.”
ACM believes these non-GAAP financial measures are useful to
investors in assessing its operating performance. ACM uses these
financial measures internally to evaluate its operating performance
and for planning and forecasting of future periods. Financial
analysts may focus on and publish both historical results and
future projections based on the non-GAAP financial measures. ACM
also believes it is in the best interests of investors for ACM to
provide this non-GAAP information.
While ACM believes these non-GAAP financial measures provide
useful supplemental information to investors, there are limitations
associated with the use of these non-GAAP financial measures. These
non-GAAP financial measures may not be reported by competitors, and
they may not be directly comparable to similarly titled measures of
other companies due to differences in calculation methodologies.
The non-GAAP financial measures are not an alternative to GAAP
information and are not meant to be considered in isolation or as a
substitute for comparable GAAP financial measures. They should be
used only as a supplement to GAAP information and should be
considered only in conjunction with ACM’s consolidated financial
statements prepared in accordance with GAAP.
Forward-Looking Statements
Information presented in the second and third paragraphs of this
press release and under the heading “Outlook” above contains
forward-looking statements for purposes of the safe harbor
provisions of the Private Securities Litigation Reform Act of 1995.
Actual results may vary significantly from ACM’s expectations based
on a number of risks and uncertainties, including but not limited
to the following: anticipated customer orders or identified market
opportunities may not grow or develop as anticipated; customer
orders already received may be postponed or canceled; suppliers may
not be able to meet ACM’s demands on a timely basis; volatile
global economic, market, industry and other conditions could result
in sharply lower demand for products containing semiconductors and
for the company's products and in disruption of capital and credit
markets; ACM’s failure to successfully manage its operations; and
trade regulations, currency fluctuations, political instability and
war may materially adversely affect ACM due to its substantial
non-U.S. customer and supplier base and its substantial non-U.S.
manufacturing operations. ACM cannot guarantee any future results,
levels of activity, performance or achievements. ACM expressly
disclaims any obligation to update forward-looking statements after
the date of this press release.
About ACM Research, Inc.
ACM develops, manufactures and sells single-wafer wet cleaning
equipment, which semiconductor manufacturers can use in numerous
manufacturing steps to remove particles, contaminants and other
random defects, and thereby improve product yield, in fabricating
advanced integrated circuits.
© ACM Research, Inc. The ACM logo, SAPS, TEBO and ULTRA C are
trademarks of ACM Research, Inc. For convenience, these trademarks
appear in this press release without ™ symbols, but that practice
does not mean that ACM will not assert, to the fullest extent under
applicable law, its rights to the trademarks. This press release
also contains other companies’ trademarks, registered marks and
trade names, which are the property of those companies.
For investor and media inquiries, please
contact:
In the United
States: |
The Blueshirt
Group |
|
Ralph Fong |
|
+1 (415) 489-2195 |
|
ralph@blueshirtgroup.com |
|
|
In China: |
The Blueshirt Group Asia |
|
Gary Dvorchak, CFA |
|
+86 (138) 1079-1480 |
|
gary@blueshirtgroup.com |
|
ACM Research, Inc. |
Condensed Consolidated Balance Sheets |
(unaudited) |
|
|
|
March 31, 2019 |
|
December 31, 2018 |
|
(unaudited) |
|
(in thousands, except share and per share data) |
Assets |
|
|
|
Current assets: |
|
|
|
Cash and cash equivalents |
$27,367 |
|
$27,124 |
Accounts receivable, less allowance for doubtful
accounts of $0 as of March 31, 2019 and $0 as of December 31,
2018 |
25,070 |
|
24,608 |
Other receivables |
2,982 |
|
3,547 |
Inventories |
42,253 |
|
38,764 |
Prepaid expenses |
1,833 |
|
1,985 |
Total current assets |
99,505 |
|
96,028 |
Property, plant and equipment, net |
3,719 |
|
3,708 |
Operating lease right-of-use assets, net |
4,787 |
|
- |
Intangible assets, net |
263 |
|
274 |
Deferred tax assets |
1,669 |
|
1,637 |
Investment in affiliates, equity method |
1,476 |
|
1,360 |
Other long-term assets |
- |
|
40 |
Total assets |
$111,419 |
|
$103,047 |
Liabilities and Stockholders’ Equity |
|
|
|
Current liabilities: |
|
|
|
Short-term borrowings |
12,829 |
|
9,447 |
Accounts payable |
13,333 |
|
16,673 |
Advances from customers |
8,469 |
|
8,417 |
Income taxes payable |
1,228 |
|
1,193 |
Other payables and accrued expenses |
11,834 |
|
10,410 |
Current portion of operating lease liability |
1,326 |
|
- |
Total current liabilities |
49,019 |
|
46,140 |
Long-term operating lease liability |
3,462 |
|
- |
Other long-term liabilities |
3,296 |
|
4,583 |
Total liabilities |
55,777 |
|
50,723 |
Commitments and contingencies |
|
|
|
Stockholders’ equity: |
|
|
|
Common stock – Class A, par value $0.0001: 100,000,000
shares authorized as of March 31, 2019 and December 31, 2018;
14,176,690 shares issued and outstanding as of March 31, 2019 and
14,110,315 shares issued and outstanding as of December 31,
2018 |
1 |
|
1 |
Common stock–Class B, par value $0.0001: 7,303,533
shares authorized as of March 31, 2019 and December 31, 2018;
1,898,423 shares issued and outstanding as of March 31, 2019 and
1,898,423 shares issued and outstanding as of December 31,
2018 |
- |
|
- |
Additional paid in capital |
57,371 |
|
56,567 |
Accumulated deficit |
(1,530) |
|
(3,387) |
Accumulated other comprehensive loss |
(200) |
|
(857) |
Total stockholders’ equity |
55,642 |
|
52,324 |
Total liabilities and stockholders’ equity |
$111,419 |
|
$103,047 |
|
|
|
|
ACM
RESEARCH, INC. |
Condensed
Consolidated Statements of Operations and Comprehensive Income
(Loss) |
|
|
Three Months Ended March 31, |
|
2019 |
|
2018 |
|
(unaudited) |
|
( In thousands, except share and per share data) |
|
|
|
|
|
|
Revenue |
$ |
20,479 |
|
$ |
9,743 |
Cost of revenue |
11,653 |
|
4,621 |
Gross profit |
8,826 |
|
5,122 |
Operating expenses: |
|
|
|
Sales and marketing |
1,869 |
|
1,855 |
Research and development |
2,765 |
|
1,541 |
General and administrative |
1,941 |
|
3,630 |
Total operating expenses, net |
6,575 |
|
7,026 |
Income (loss) from operations |
2,251 |
|
(1,904) |
Interest income |
9 |
|
3 |
Interest expense |
(139) |
|
(103) |
Other expense, net |
(261) |
|
(755) |
Equity income in net income of affiliates |
116 |
|
1 |
Income
(loss) before income taxes |
1,976 |
|
(2,758) |
Income tax expense |
(119) |
|
(22) |
Net income (loss) |
$ |
1,857 |
|
$ |
(2,780) |
Comprehensive income
(loss): |
|
|
|
Net income (loss) |
1,857 |
|
(2,780) |
Foreign currency translation adjustment |
657 |
|
705 |
Total comprehensive income (loss) |
$ |
2,514 |
|
$ |
(2,075) |
|
|
|
|
Net income
(loss) per common share : |
|
|
|
Basic |
$ |
0.12 |
|
$ |
(0.18) |
Diluted |
$ |
0.10 |
|
$ |
(0.18) |
|
|
|
|
Weighted
average common shares outstanding used in computing per share amounts: |
|
|
Basic |
16,044,655 |
|
15,383,086 |
Diluted |
18,225,317 |
|
15,383,086 |
|
|
|
|
ACM RESEARCH,
INC.Reconciliation of GAAP to Non-GAAP Financial
Measures
As described under “Use of Non-GAAP Financial
Measures” above, ACM presents non-GAAP gross margin, operating
income and net income (loss) as supplemental measures to GAAP
financial measures, each of which excludes stock-based compensation
(“SBC”) from the equivalent GAAP financial line items. The
following table reconciles gross margin, operating income and net
income (loss) to the related non-GAAP financial measures:
|
|
Three Months Ended March 31, |
|
2019 |
2018 |
|
Actual |
|
Adjusted |
Actual |
|
Adjusted |
|
(GAAP) |
|
(Non-GAAP) |
(GAAP) |
|
(Non-GAAP) |
|
(in thousands) |
|
|
|
|
|
|
|
Revenue |
$ |
20,479 |
$ |
- |
$ |
20,479 |
$ |
9,743 |
|
|
$ |
9,743 |
Cost of revenue |
(11,653) |
(30) |
(11,623) |
(4,621) |
(8) |
(4,613) |
Gross profit |
8,826 |
(30) |
8,856 |
5,122 |
(8) |
5,130 |
Operating expenses: |
|
|
|
|
|
|
Sales and marketing |
(1,869) |
(34) |
(1,835) |
(1,855) |
(34) |
(1,821) |
Research and development |
(2,765) |
(86) |
(2,679) |
(1,541) |
(27) |
(1,514) |
General and administrative |
(1,941) |
(594) |
(1,347) |
(3,630) |
(2,106) |
(1,524) |
Income (Loss) from operations |
$ |
2,251 |
$ |
(744) |
$ |
2,995 |
$ |
(1,904) |
$ |
(2,175) |
$ |
271 |
Net income (loss) |
$ |
1,857 |
$ |
(744) |
$ |
2,601 |
$ |
(2,780) |
$ |
(2,175) |
$ |
(605) |
|
|
|
|
|
|
|
|
|
|
|
|
|
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