ACM Research Reports Second Quarter 2018 Results
August 07 2018 - 6:00AM
ACM Research, Inc. (“ACM Research” 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 second fiscal quarter ended June 30, 2018.
ACM Research’s President and Chief Executive Officer Dr. David
Wang commented, “Our business momentum accelerated in the second
quarter, with record revenue, strong profitability, and new product
development. We also made excellent progress on the capacity
expansion at our new Shanghai facility, which is intended to
support demand for many quarters to come.”
Dr. Wang continued, “We are thrilled with the market interest in
our product offerings, as demonstrated by a purchase order from a
new strategic DRAM customer during the quarter, and evaluation of
our platforms by major global semiconductor manufacturers.
ACM Research remains focused on its mission to become a significant
player by producing the most advanced cleaning tools for the next
generation of semiconductor manufacturing.”
Second Quarter Operating Highlights
- Expanding Customer Base in Memory. ACM
Research received a purchase order for wafer-cleaning tools based
on its proprietary Space Alternated Phase Shift (SAPS) technology
from a leading manufacturer of DRAM memory chips in China.
The Company intends to ship the initial SAPS tool in the third
quarter of 2018, with revenue recognition in future periods upon
qualification and acceptance. This platform can also support
TEBO capability to enable the megasonic cleaning of pattern
wafers.
- Capacity additions to support our growth
objectives. During the second quarter, ACM Research
completed the first phase of its capacity expansion project at an
additional facility in Shanghai, China. The $1.5 million
investment by ACM Research has provided approximately 50,000
additional square feet of production space intended to support more
than $250 million of revenue, when fully-tooled. Initial
production is expected to begin in the third quarter of 2018, with
a gradual ramp up in future quarters.
- Strengthens Executive Leadership Team.
The Company announced the appointment of Mark McKechnie as Vice
President of Finance. Mr. McKechnie brings more than 25 years
of experience in product management, corporate finance, and public
equity markets, and will lead the Company’s Financial Planning and
Analysis (FP&A), Investor Relations, Strategy, and Capital
Markets efforts.
Financial Summary
All figures refer to the second quarter of 2018, unless noted
otherwise. All comparisons are with the second quarter of
2017, unless otherwise noted.
|
|
Three Months Ended June 30, |
|
|
GAAP |
|
Non-GAAP(1) |
|
|
2018 |
|
2017 |
|
2018 |
|
2017 |
| |
(dollars in thousands) |
| Revenue |
$ |
20,873 |
|
|
$ |
8,763 |
|
|
$ |
20,873 |
|
|
$ |
8,763 |
|
| Gross
margin(2) |
|
41.8 |
% |
|
|
39.4 |
% |
|
|
41.8 |
% |
|
|
39.4 |
% |
| Income (loss)
from operations(2) |
$ |
2,331 |
|
|
$ |
(202 |
) |
|
$ |
2,515 |
|
|
$ |
312 |
|
| Net income
(loss) attributable to ACM Research, Inc.(2) |
$ |
3,215 |
|
|
$ |
(658 |
) |
|
$ |
3,399 |
|
|
$ |
(144 |
) |
| Basic
EPS |
$ |
0.20 |
|
|
$ |
(0.13 |
) |
|
$ |
0.21 |
|
|
$ |
(0.03 |
) |
| Diluted
EPS |
$ |
0.18 |
|
|
$ |
(0.13 |
) |
|
$ |
0.19 |
|
|
$ |
(0.03 |
) |
|
|
Six Months Ended June 30, |
|
|
GAAP |
|
Non-GAAP(1) |
|
|
2018 |
|
2017 |
|
2018 |
|
2017 |
| |
(dollars in thousands) |
| Revenue |
$ |
30,616 |
|
|
$ |
14,423 |
|
|
$ |
30,616 |
|
|
$ |
14,423 |
|
| Gross
margin(2) |
|
45.2 |
% |
|
|
40.6 |
% |
|
|
45.3 |
% |
|
|
40.6 |
% |
| Income (loss)
from operations(2) |
$ |
427 |
|
|
$ |
(1,755 |
) |
|
$ |
2,787 |
|
|
$ |
(407 |
) |
| Net income
(loss) attributable to ACM Research, Inc.(2) |
$ |
435 |
|
|
$ |
(2,747 |
) |
|
$ |
2,795 |
|
|
$ |
(1,399 |
) |
| Basic
EPS |
$ |
0.03 |
|
|
$ |
(0.56 |
) |
|
$ |
0.18 |
|
|
$ |
(0.28 |
) |
| Diluted
EPS |
$ |
0.02 |
|
|
$ |
(0.56 |
) |
|
$ |
0.16 |
|
|
$ |
(0.28 |
) |
________________________ (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.
- Revenue increased 138.2% to $20.9 million, due
to increased volume of tools shipped, coupled with higher prices
associated with the higher value of the equipment sold.
- Gross margin was 41.8%, compared to 39.4% in
the second quarter of 2017. The improvement in gross margin
was due to better absorption of fixed costs on higher product
sales. Gross margin was within the range of 40.0% to 45.0%
set forth in the Company’s long-term business model. The
Company expects gross margin to vary from period to period due to a
variety of factors, such as sales volume and product mix.
- Operating expenses were $6.4 million.
Non-GAAP operating expense, which removes stock-based compensation,
was $6.2 million, up 98%. Non-GAAP operating expenses as a
percent of revenue decreased to 30%, versus 36% in the second
quarter of 2017.
- Net income attributable to
ACM Research, Inc. was $3.2 million. Non-GAAP net income was
$3.4 million, versus a non-GAAP net loss of $0.1 million in the
second quarter of 2017.
- Cash and equivalents at quarter-end were $17.4
million, up from $15.2 million at the end of last quarter.
Outlook
The Company has raised its full year 2018 revenue guidance to
$70 million. This represents an increase of $5 million versus
the Company’s previous 2018 revenue guidance.
Conference Call Details
A conference call to discuss results will be held today 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
5172047.
| |
|
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 Research website at www.acmrcsh.com for one week
following the call.
Use of Non-GAAP Financial Measures
ACM Research presents non-GAAP gross margin, operating income
(loss) and net loss as supplemental measures to GAAP financial
measures regarding ACM Research’s operational performance. These
supplemental measures exclude the impact of stock-based
compensation, which ACM Research 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 Research believes these non-GAAP financial measures are
useful to investors in assessing its operating performance. ACM
Research 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 Research also believes it is in the best
interests of investors for ACM Research to provide this non-GAAP
information.
While ACM Research 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 Research’s consolidated financial statements prepared in
accordance with GAAP.
Forward-Looking Statements
Information presented above under “Second Quarter Operating
Highlights—Capacity additions to support our growth objectives”
with respect to revenue expected to be generated from the Company’s
new facility in Shanghai, China, under “Financial Summary—Gross
Margin” with respect to the expected range of gross margin for the
foreseeable future, and under “Outlook” 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 Research’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 Research’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 Research’s failure to successfully
manage its operations; and trade regulations, currency
fluctuations, political instability and war may materially
adversely affect ACM Research due to its substantial non-U.S.
customer and supplier base and its substantial non-U.S.
manufacturing operations. ACM Research cannot guarantee any future
results, levels of activity, performance or achievements. ACM
Research expressly disclaims any obligation to update
forward-looking statements after the date of this press
release.
About ACM Research, Inc.
ACM Research 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. SAPS, TEBO and the ACM Research logo are
trademarks of ACM Research, Inc. All rights reserved. Any other
trademarks are the property of their respective owners.
|
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) |
|
| |
|
|
|
|
June 30, |
|
December 31, |
|
| |
2018 |
|
2017 |
|
| |
(Unaudited) |
|
|
|
| |
(in thousands, except share and per share data) |
|
|
Assets |
|
|
|
|
|
Current assets: |
|
|
|
|
|
Cash and cash equivalents |
$ |
17,435 |
|
|
$ |
17,681 |
|
|
|
Accounts receivable, less allowance for doubtful accounts of $ nil as of June
30, 2018 and $ nil as of
December 31, 2017 |
|
33,289 |
|
|
|
26,762 |
|
|
|
Other receivables |
|
1,308 |
|
|
|
2,491 |
|
|
|
Inventories |
|
27,531 |
|
|
|
15,388 |
|
|
|
Prepaid expenses |
|
2,316 |
|
|
|
546 |
|
|
|
Other current assets |
|
- |
|
|
|
46 |
|
|
|
Total current assets |
|
81,879 |
|
|
|
62,914 |
|
|
|
Property, plant and equipment, net |
|
3,050 |
|
|
|
2,340 |
|
|
|
Intangible assets, net |
|
231 |
|
|
|
106 |
|
|
|
Deferred tax assets |
|
1,278 |
|
|
|
1,294 |
|
|
|
Investment in affiliates, equity method |
|
1,355 |
|
|
|
1,237 |
|
|
| Other long
term assets |
|
40 |
|
|
|
- |
|
|
|
Total assets |
$ |
87,833 |
|
|
$ |
67,891 |
|
|
|
|
|
|
|
|
|
Liabilities and Stockholders’ Equity |
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
Short-term borrowings |
$ |
9,932 |
|
|
$ |
5,095 |
|
|
|
Warrant liability |
|
- |
|
|
|
3,079 |
|
|
|
Accounts payable |
|
17,755 |
|
|
|
7,419 |
|
|
|
Advances from customers |
|
1,931 |
|
|
|
143 |
|
|
|
Income taxes payable |
|
231 |
|
|
|
44 |
|
|
|
Other payables and accrued expenses |
|
6,518 |
|
|
|
6,037 |
|
|
|
Total current liabilities |
|
36,367 |
|
|
|
21,817 |
|
|
|
Other long-term liabilities |
|
5,869 |
|
|
|
6,217 |
|
|
|
Total liabilities |
|
42,236 |
|
|
|
28,034 |
|
|
|
Commitments and contingencies |
|
|
|
|
| Shareholder's
equity: |
|
|
|
|
|
Common stock – Class A,
par value $0.0001: 100,000,000
shares authorized as of June 30, 2018 and
2017; 13,957,339 shares issued and
outstanding as of June 30, 2018
and 12,935,546 shares issued and outstanding as of December 31, 2017 |
|
1 |
|
|
|
1 |
|
|
| |
|
|
|
|
|
|
|
|
|
Common stock–Class
B, par value $0.0001: 7,303,533
shares authorized as of June 30, 2018 and
2017; 1,920,173 shares issued and
outstanding as of June
30, 2018 and 2,409,738 shares issued and outstanding as of December 31, 2017 |
|
- |
|
|
|
- |
|
|
| |
|
|
|
|
|
|
|
|
|
Additional paid in capital |
|
55,331 |
|
|
|
49,695 |
|
|
|
Accumulated deficit |
|
(9,526 |
) |
|
|
(9,961 |
) |
|
|
Accumulated other comprehensive income (loss) |
|
(209 |
) |
|
|
122 |
|
|
|
Total stockholders’ equity |
|
45,597 |
|
|
|
39,857 |
|
|
|
Total liabilities and stockholders’ equity |
$ |
87,833 |
|
|
$ |
67,891 |
|
|
| |
|
|
|
|
|
|
|
| ACM RESEARCH, INC. |
|
| Condensed Consolidated Statements of
Operations and Comprehensive Loss |
|
|
|
|
| |
Three Months Ended June 30, |
|
Six Months Ended June 30, |
|
| |
2018 |
|
2017 |
|
2018 |
|
2017 |
|
| |
(Unaudited) |
|
(Unaudited) |
|
| |
(in thousands, except share and per share data) |
|
(in thousands, except share and per share data) |
|
| Revenue |
$ |
20,873 |
|
|
$ |
8,763 |
|
|
$ |
30,616 |
|
|
$ |
14,423 |
|
|
|
Cost of revenue |
|
12,149 |
|
|
|
5,312 |
|
|
|
16,770 |
|
|
|
8,570 |
|
|
|
Gross profit |
|
8,724 |
|
|
|
3,451 |
|
|
|
13,846 |
|
|
|
5,853 |
|
|
|
Operating expenses: |
|
|
|
|
|
|
|
|
|
Sales and marketing |
|
2,682 |
|
|
|
1,420 |
|
|
|
4,537 |
|
|
|
2,583 |
|
|
|
Research and development |
|
2,419 |
|
|
|
939 |
|
|
|
3,960 |
|
|
|
1,867 |
|
|
|
General and administrative |
|
1,292 |
|
|
|
1,294 |
|
|
|
4,922 |
|
|
|
3,158 |
|
|
|
Total operating expenses, net |
|
6,393 |
|
|
|
3,653 |
|
|
|
13,419 |
|
|
|
7,608 |
|
|
|
Income (loss) from operations |
|
2,331 |
|
|
|
(202 |
) |
|
|
427 |
|
|
|
(1,755 |
) |
|
|
Interest income |
|
14 |
|
|
|
3 |
|
|
|
17 |
|
|
|
5 |
|
|
|
Interest expense |
|
(149 |
) |
|
|
(86 |
) |
|
|
(252 |
) |
|
|
(164 |
) |
|
|
Other expense, net |
|
1,066 |
|
|
|
(228 |
) |
|
|
311 |
|
|
|
(292 |
) |
|
|
Equity income in net income of affiliates |
|
117 |
|
|
|
- |
|
|
|
118 |
|
|
|
- |
|
|
|
Income
(loss) before income taxes |
|
3,379 |
|
|
|
(513 |
) |
|
|
621 |
|
|
|
(2,206 |
) |
|
|
Income tax benefit (expense) (note 15) |
|
(164 |
) |
|
|
32 |
|
|
|
(186 |
) |
|
|
(749 |
) |
|
|
Net income
(loss) attributable to ACM Research, Inc. |
|
3,215 |
|
|
|
(481 |
) |
|
|
435 |
|
|
|
(2,955 |
) |
|
|
Less: Net income
(loss) attributable to non-controlling interests |
|
- |
|
|
|
177 |
|
|
|
- |
|
|
|
(208 |
) |
|
|
Net income
(loss) attributable to ACM Research, Inc. |
$ |
3,215 |
|
|
$ |
(658 |
) |
|
$ |
435 |
|
|
$ |
(2,747 |
) |
|
|
Comprehensive income (loss) |
|
|
|
|
|
|
|
|
| Net
income (loss) |
|
3,215 |
|
|
|
(481 |
) |
|
|
435 |
|
|
|
(2,955 |
) |
|
|
Foreign currency translation adjustment |
|
(1,036 |
) |
|
|
220 |
|
|
|
(331 |
) |
|
|
264 |
|
|
|
Comprehensive income (loss) |
|
2,179 |
|
|
|
(261 |
) |
|
|
104 |
|
|
|
(2,691 |
) |
|
|
Less: Comprehensive income
(loss) attributable to non-controlling interests |
|
- |
|
|
|
259 |
|
|
|
- |
|
|
|
(110 |
) |
|
|
Total comprehensive income
(loss) attributable to ACM Research, Inc. |
$ |
2,179 |
|
|
$ |
(520 |
) |
|
$ |
104 |
|
|
$ |
(2,581 |
) |
|
| |
|
|
|
|
|
|
|
|
|
Net income (loss) attributable to ACM Research, Inc.
per common share : |
|
|
|
|
|
|
|
|
|
Basic |
$ |
0.20 |
|
|
$ |
(0.13 |
) |
|
$ |
0.03 |
|
|
$ |
(0.56 |
) |
|
|
Diluted |
$ |
0.18 |
|
|
$ |
(0.13 |
) |
|
$ |
0.02 |
|
|
$ |
(0.56 |
) |
|
|
|
|
|
|
|
|
|
|
|
| Weighted
average common shares outstanding used in computing per share amounts: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
15,838,540 |
|
|
|
5,086,989 |
|
|
|
15,611,863 |
|
|
|
4,927,973 |
|
|
|
Diluted |
|
18,119,733 |
|
|
|
5,086,989 |
|
|
|
17,669,650 |
|
|
|
4,927,973 |
|
|
| |
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
ACM RESEARCH,
INC.Reconciliation of GAAP to Non-GAAP Financial
Measures
As described under “Use of Non-GAAP Financial Measures” above,
ACM Research 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 tables
reconcile gross margin, operating income and net income (loss) to
the related non-GAAP financial measures:
| |
Three Months Ended June 30, |
|
| |
2018 |
|
2017 |
|
| |
Actual |
SBC |
Adjusted |
|
Actual |
SBC |
Adjusted |
|
| (GAAP) |
(Non-GAAP) |
|
(GAAP) |
(Non-GAAP) |
|
| |
(in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
Revenue |
$ |
20,873 |
|
$ |
- |
|
$ |
20,873 |
|
|
$ |
8,763 |
|
$ |
- |
|
$ |
8,763 |
|
|
| Cost of
revenue |
|
(12,149 |
) |
|
(11 |
) |
|
(12,138 |
) |
|
|
(5,312 |
) |
|
(5 |
) |
|
(5,307 |
) |
|
| Gross
profit |
|
8,724 |
|
|
(11 |
) |
|
8,735 |
|
|
|
3,451 |
|
|
(5 |
) |
|
3,456 |
|
|
| Operating
expenses: |
|
|
|
|
|
|
|
|
| Sales and
marketing |
|
(2,682 |
) |
|
(39 |
) |
|
(2,643 |
) |
|
|
(1,420 |
) |
|
(13 |
) |
|
(1,407 |
) |
|
| Research
and development |
|
(2,419 |
) |
|
(40 |
) |
|
(2,379 |
) |
|
|
(939 |
) |
|
(13 |
) |
|
(926 |
) |
|
| General
and administrative |
|
(1,292 |
) |
|
(94 |
) |
|
(1,198 |
) |
|
|
(1,294 |
) |
|
(483 |
) |
|
(811 |
) |
|
| Income
(Loss) from operations |
$ |
2,331 |
|
$ |
(184 |
) |
$ |
2,515 |
|
|
$ |
(202 |
) |
$ |
(514 |
) |
$ |
312 |
|
|
| Net
income (loss) attributable to ACM Research, Inc. |
$ |
3,215 |
|
$ |
(184 |
) |
$ |
3,399 |
|
|
$ |
(658 |
) |
$ |
(514 |
) |
$ |
(144 |
) |
|
| |
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
| |
Six Months Ended June 30, |
|
| |
2018 |
|
2017 |
|
|
|
Actual |
SBC |
Adjusted |
|
Actual |
SBC |
Adjusted |
|
| (GAAP) |
(Non-GAAP) |
|
(GAAP) |
(Non-GAAP) |
|
| |
(in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
Revenue |
$ |
30,616 |
|
$ |
- |
|
$ |
30,616 |
|
|
$ |
14,423 |
|
$ |
- |
|
$ |
14,423 |
|
|
| Cost of
revenue |
|
(16,770 |
) |
|
(19 |
) |
|
(16,751 |
) |
|
|
(8,570 |
) |
|
(10 |
) |
|
(8,560 |
) |
|
| Gross
profit |
|
13,846 |
|
|
(19 |
) |
|
13,865 |
|
|
|
5,853 |
|
|
(10 |
) |
|
5,863 |
|
|
| Operating
expenses: |
|
|
|
|
|
|
|
|
| Sales and
marketing |
|
(4,537 |
) |
|
(73 |
) |
|
(4,464 |
) |
|
|
(2,583 |
) |
|
(18 |
) |
|
(2,565 |
) |
|
| Research
and development |
|
(3,960 |
) |
|
(67 |
) |
|
(3,893 |
) |
|
|
(1,867 |
) |
|
(26 |
) |
|
(1,841 |
) |
|
| General
and administrative |
|
(4,922 |
) |
|
(2,201 |
) |
|
(2,721 |
) |
|
|
(3,158 |
) |
|
(1,294 |
) |
|
(1,864 |
) |
|
| Income
(Loss) from operations |
$ |
427 |
|
$ |
(2,360 |
) |
$ |
2,787 |
|
|
$ |
(1,755 |
) |
$ |
(1,348 |
) |
$ |
(407 |
) |
|
| Net
income (loss) attributable to ACM Research, Inc. |
$ |
435 |
|
$ |
(2,360 |
) |
$ |
2,795 |
|
|
$ |
(2,747 |
) |
$ |
(1,348 |
) |
$ |
(1,399 |
) |
|
| |
|
|
|
|
|
|
|
|
ACM Research (NASDAQ:ACMR)
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