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 third fiscal quarter ended September 30, 2019.
ACM’s President and Chief Executive Officer Dr. David Wang
commented, "We delivered record revenue and shipments,
demonstrating our ability to scale production to major customers.
We had several important deliveries in the quarter, including a
“first tool” to our newest customer, an emerging China-based DRAM
manufacturer, and several ECP AP tools to a major packaging
customer. With a successful U.S. capital raise, we now have $47
million in cash, which puts us in a good position to support our
growth plans.”
Dr. Wang continued, “Our lead customer for Tahoe has confirmed
good cleaning performance and significant sulfuric acid savings in
a production environment. Development work continues on TEBO, and
significant technical progress has been made to meet customer
requirements for the combined removal of big and small particles
for 3D-patterned structures without damage. Finally, we expanded
our global sales team, with key hires in North America and
Southeast Asia, and we are in advanced negotiations to acquire new
land in Shanghai to support our longer term production plans.”
Recent Operating Highlights
- Shipments. Total shipments in the third
quarter of 2019 were $43 million, compared to $33 million last
quarter and $32 million in the third quarter of 2018.
Shipments include deliveries for revenue in the quarter and
deliveries of systems awaiting customer acceptance for potential
revenue in future quarters.
- SAPS-V “First Tool” delivered to new DRAM
customer. ACM delivered a SAPS-V single wafer
cleaning tool to an emerging manufacturer of DRAM memory chips in
China in the third quarter of 2019, with revenue recognition upon
qualification and acceptance.
- Equity Raise. In August 2019, ACM
completed a successful US capital raise, raising approximately $23
million in net proceeds. This transaction provides an important
capital infusion, enabling ACM to further execute its growth
strategy, support customer development efforts, and strengthen its
balance sheet.
Financial Summary
|
Three Months Ended September 30, |
|
GAAP |
|
Non-GAAP(1) |
|
2019 |
|
2018 |
|
2019 |
|
2018 |
|
|
|
|
|
|
|
|
|
(dollars in thousands) |
Revenue |
$ |
33,427 |
|
|
$ |
23,179 |
|
|
$ |
33,427 |
|
|
$ |
23,179 |
|
Gross margin |
|
48.6 |
% |
|
|
44.4 |
% |
|
|
49.1 |
% |
|
|
44.5 |
% |
Income from operations |
$ |
7,030 |
|
|
$ |
3,404 |
|
|
$ |
8,587 |
|
|
$ |
3,815 |
|
Net income attributable to ACM Research, Inc. |
$ |
8,782 |
|
|
$ |
3,853 |
|
|
$ |
10,339 |
|
|
$ |
4,264 |
|
Basic EPS |
$ |
0.52 |
|
|
$ |
0.24 |
|
|
$ |
0.61 |
|
|
$ |
0.27 |
|
Diluted EPS |
$ |
0.45 |
|
|
$ |
0.21 |
|
|
$ |
0.53 |
|
|
$ |
0.23 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended September 30, |
|
GAAP |
|
Non-GAAP(1) |
|
2019 |
|
2018 |
|
2019 |
|
2018 |
|
|
|
|
|
|
|
|
|
(dollars in thousands) |
Revenue |
$ |
82,916 |
|
|
$ |
53,795 |
|
|
$ |
82,916 |
|
|
$ |
53,795 |
|
Gross margin |
|
46.1 |
% |
|
|
44.9 |
% |
|
|
46.3 |
% |
|
|
44.9 |
% |
Income from operations |
$ |
13,942 |
|
|
$ |
3,831 |
|
|
$ |
16,861 |
|
|
$ |
6,602 |
|
Net income attributable to ACM Research, Inc. |
$ |
14,950 |
|
|
$ |
4,288 |
|
|
$ |
17,869 |
|
|
$ |
7,059 |
|
Basic EPS |
$ |
0.91 |
|
|
$ |
0.27 |
|
|
$ |
1.09 |
|
|
$ |
0.45 |
|
Diluted EPS |
$ |
0.80 |
|
|
$ |
0.24 |
|
|
$ |
0.96 |
|
|
$ |
0.40 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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.” Non-GAAP financial measures
(excluding revenue) exclude stock-based compensation.
The following figures refer to the third quarter of 2019
compared with the third quarter of 2018, unless otherwise
noted.
- Revenue increased 44.2% to $33.4 million, due
to an increased volume of tools shipped for revenue and higher
prices associated with these tools. Revenue for the quarter
was entirely driven by repeat shipments, with no acceptances
contributing to revenue for the period.
- Gross margin was 48.6%, compared to 44.4% in
the third quarter of 2018. Gross margin was above the
high-end of the range of 40.0% to 45.0% set forth in the Company’s
long-term business model. The strong gross margin performance
was due to a higher mix of higher-margin products. 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 $9.2 million, an
increase of 34%. GAAP operating expenses as a percent of
revenue decreased to 27.6%, compared to 29.7% in the third quarter
of 2018. Non-GAAP operating expenses, which remove
stock-based compensation, were $7.8 million, an increase of
20.4%. Non-GAAP operating expenses as a percent of revenue
decreased to 23.4%, compared to 28.0% in the third quarter of
2018.
- Net income
attributable to ACM Research, Inc. was $8.8
million, compared to $3.9 million in the third quarter of
2018. Non-GAAP net income attributable to ACM Research, Inc.
was $10.3 million, compared to $4.3 million in the third quarter of
2018. Third quarter net income attributable to ACM Research, Inc
included currency fluctuations, which contributed approximately
$1.7 million (adjusted for a 10% normalized tax rate), and a
one-time tax benefit from a reduced tax valuation, which
contributed approximately $1.4 million.
- Net income attributable to ACM Research, Inc. per
diluted share was $0.45, compared to $0.21 in the third
quarter of 2018. Non-GAAP net income attributable to ACM
Research, Inc. per diluted share was $0.53, compared to $0.23 in
the third quarter of 2018.
- Cash and equivalents at quarter-end were $47.3
million, up from $27.6 million at the end of the second quarter of
2019 and $18.2 million at the end of the third quarter of
2018.
Outlook
For fiscal year 2019, the Company continues to expect revenue to
be approximately $105 million.
Conference Call Details
A conference call to discuss results will be held on Thursday,
November 7, 2019, at 8:00 a.m. Eastern Time (9:00 p.m. China Time).
Dial-in details for the call are as follows. Please reference
conference ID 9483075.
|
|
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 expenses,
operating income, net income, 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, regulatory 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, and TEBO 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 |
|
|
|
September 30, 2019 |
|
December 31, 2018 |
|
(Unaudited) |
|
(In thousands, except share and per share data) |
Assets |
|
|
|
Current assets: |
|
|
|
Cash and cash equivalents |
$ |
47,264 |
|
|
$ |
27,124 |
|
Restricted cash |
|
26,582 |
|
|
|
Accounts receivable, less
allowance for doubtful accounts of $0 as of September 30, 2019 and
$0 as of December 31, 2018 |
|
43,144 |
|
|
|
24,608 |
|
Other receivables |
|
2,152 |
|
|
|
3,547 |
|
Inventories |
|
43,506 |
|
|
|
38,764 |
|
Prepaid expenses |
|
1,006 |
|
|
|
1,985 |
|
Total current assets |
|
163,654 |
|
|
|
96,028 |
|
Property, plant and equipment,
net |
|
3,573 |
|
|
|
3,708 |
|
Operating lease right-of-use
assets, net |
|
4,205 |
|
|
|
- |
|
Intangible assets, net |
|
285 |
|
|
|
274 |
|
Deferred tax assets |
|
2,309 |
|
|
|
1,637 |
|
Long-term investments |
|
5,968 |
|
|
|
1,360 |
|
Other long-term assets |
|
222 |
|
|
|
40 |
|
Total assets |
|
180,216 |
|
|
|
103,047 |
|
Liabilities, Redeemable Non-controlling Interest and
Stockholders’ Equity |
|
|
|
Current liabilities: |
|
|
|
Short-term borrowings |
|
15,665 |
|
|
|
9,447 |
|
Accounts payable |
|
15,440 |
|
|
|
16,673 |
|
Advances from customers |
|
8,397 |
|
|
|
8,417 |
|
Income taxes payable |
|
1,326 |
|
|
|
1,193 |
|
Other payables and accrued expenses |
|
13,970 |
|
|
|
10,410 |
|
Current portion of operating lease liability |
|
1,350 |
|
|
|
- |
|
Total current liabilities |
|
56,148 |
|
|
|
46,140 |
|
Long-term operating lease liability |
|
2,855 |
|
|
|
- |
|
Other long-term liabilities |
|
2,980 |
|
|
|
4,583 |
|
Total liabilities |
|
61,983 |
|
|
|
50,723 |
|
Commitments and
contingencies |
|
|
|
Redeemable Non-controlling
interests |
|
26,888 |
|
|
|
- |
|
Stockholders’ equity: |
|
|
|
Common stock – Class A, par
value $0.0001: 50,000,000 shares authorized as of September 30,
2019 and December 31, 2018; 16,179,058 shares issued and
outstanding as of September 30, 2019 and 14,110,315 shares issued
and outstanding as of December 31, 2018 |
|
2 |
|
|
|
1 |
|
Common stock–Class B, par
value $0.0001: 2,409,738 shares authorized as of September 30, 2019
and December 31, 2018; 1,862,608 shares issued and outstanding as
of September 30, 2019 and 1,898,423 shares issued and outstanding
as of December 31, 2018 |
|
- |
|
|
|
- |
|
Additional paid in
capital |
|
82,857 |
|
|
|
56,567 |
|
Accumulated surplus
(deficit) |
|
11,563 |
|
|
|
(3,387 |
) |
Accumulated other
comprehensive income (loss) |
|
(3,077 |
) |
|
|
(857 |
) |
Total stockholders’
equity |
|
91,345 |
|
|
|
52,324 |
|
Total liabilities,
redeemable non-controlling interests, and stockholders'
equity |
$ |
180,216 |
|
|
$ |
103,047 |
|
|
|
|
|
|
ACM RESEARCH, INC. |
Condensed Consolidated Statements of Operations and
Comprehensive Income |
|
|
|
|
|
Three Months Ended September
30, |
|
Nine Months Ended September
30, |
|
2019 |
|
2018 |
|
2019 |
|
2018 |
|
|
|
|
|
|
|
|
|
(Unaudited) |
|
(Unaudited) |
|
( In thousands, except share and per share data) |
|
( In thousands, except share and per share data) |
Revenue |
$ |
33,427 |
|
|
$ |
23,179 |
|
|
$ |
82,916 |
|
|
$ |
53,795 |
|
Cost of revenue |
|
17,173 |
|
|
|
12,892 |
|
|
|
44,705 |
|
|
|
29,662 |
|
Gross profit |
|
16,254 |
|
|
|
10,287 |
|
|
|
38,211 |
|
|
|
24,133 |
|
Operating expenses: |
|
|
|
|
|
|
|
Sales and marketing |
|
3,886 |
|
|
|
3,229 |
|
|
|
8,679 |
|
|
|
7,766 |
|
Research and development |
|
3,492 |
|
|
|
2,264 |
|
|
|
9,598 |
|
|
|
6,224 |
|
General and administrative |
|
1,846 |
|
|
|
1,390 |
|
|
|
5,992 |
|
|
|
6,312 |
|
Total operating expenses, net |
|
9,224 |
|
|
|
6,883 |
|
|
|
24,269 |
|
|
|
20,302 |
|
Income from operations |
|
7,030 |
|
|
|
3,404 |
|
|
|
13,942 |
|
|
|
3,831 |
|
Interest income |
|
95 |
|
|
|
3 |
|
|
|
128 |
|
|
|
20 |
|
Interest expense |
|
(205 |
) |
|
|
(112 |
) |
|
|
(538 |
) |
|
|
(364 |
) |
Other income, net |
|
1,850 |
|
|
|
902 |
|
|
|
2,132 |
|
|
|
1,213 |
|
Equity income
(loss) in net income of affiliates |
|
(9 |
) |
|
|
117 |
|
|
|
260 |
|
|
|
235 |
|
Income before income taxes |
|
8,761 |
|
|
|
4,314 |
|
|
|
15,924 |
|
|
|
4,935 |
|
Income tax (expense)
benefit |
|
328 |
|
|
|
(461 |
) |
|
|
(667 |
) |
|
|
(647 |
) |
Net income |
|
9,089 |
|
|
|
3,853 |
|
|
|
15,257 |
|
|
|
4,288 |
|
Less: Net income
attributable to non-controlling interest |
|
307 |
|
|
|
- |
|
|
|
307 |
|
|
|
- |
|
Net income
attributable to ACM Research, Inc. |
$ |
8,782 |
|
|
$ |
3,853 |
|
|
$ |
14,950 |
|
|
$ |
4,288 |
|
Comprehensive income: |
|
|
|
|
|
|
|
Net income |
|
9,089 |
|
|
|
3,853 |
|
|
|
15,257 |
|
|
|
4,288 |
|
Foreign currency translation adjustment |
|
(2,591 |
) |
|
|
(746 |
) |
|
|
(2,902 |
) |
|
|
(1,077 |
) |
Total comprehensive income |
|
6,498 |
|
|
|
3,107 |
|
|
|
12,355 |
|
|
|
3,211 |
|
Less: Comprehensive income
attributable to non-controlling interests |
|
307 |
|
|
|
- |
|
|
|
307 |
|
|
|
- |
|
Total comprehensive income
attributable to ACM Research, Inc. |
$ |
6,191 |
|
|
$ |
3,107 |
|
|
$ |
12,048 |
|
|
$ |
3,211 |
|
|
|
|
|
|
|
|
|
Net income attributable
to ACM Research, Inc. per common share : |
|
|
|
|
|
|
|
Basic |
$ |
0.52 |
|
|
$ |
0.24 |
|
|
$ |
0.91 |
|
|
$ |
0.27 |
|
Diluted |
$ |
0.45 |
|
|
$ |
0.21 |
|
|
$ |
0.80 |
|
|
$ |
0.24 |
|
|
|
|
|
|
|
|
|
Weighted
average common shares outstanding used in computing per share amounts: |
Basic |
|
16,999,746 |
|
|
|
15,915,864 |
|
|
|
16,381,944 |
|
|
|
15,714,310 |
|
Diluted |
|
19,354,214 |
|
|
|
18,169,807 |
|
|
|
18,699,010 |
|
|
|
17,816,101 |
|
|
|
|
|
|
|
|
|
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) attributable to ACM Research, Inc. 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) attributable to ACM Research, Inc. to the related
non-GAAP financial measures:
|
Three Months Ended September 30, |
|
2019 |
2018 |
|
Actual |
|
|
|
Adjusted |
Actual |
|
|
|
Adjusted |
|
(GAAP) |
|
|
|
(Non-GAAP) |
(GAAP) |
|
|
|
(Non-GAAP) |
|
(In thousands) |
|
|
|
|
|
|
|
Revenue |
$ |
33,427 |
|
$ |
- |
|
$ |
33,427 |
|
$ |
23,179 |
|
$ |
- |
|
$ |
23,179 |
|
Cost of revenue |
|
(17,173 |
) |
|
(154 |
) |
|
(17,019 |
) |
|
(12,892 |
) |
|
(25 |
) |
|
(12,867 |
) |
Gross profit |
|
16,254 |
|
|
(154 |
) |
|
16,408 |
|
|
10,287 |
|
|
(25 |
) |
|
10,312 |
|
Operating expenses: |
|
|
|
|
|
|
Sales and marketing |
|
(3,886 |
) |
|
(172 |
) |
|
(3,714 |
) |
|
(3,229 |
) |
|
(42 |
) |
|
(3,187 |
) |
Research and development |
|
(3,492 |
) |
|
(759 |
) |
|
(2,733 |
) |
|
(2,264 |
) |
|
(64 |
) |
|
(2,200 |
) |
General and administrative |
|
(1,846 |
) |
|
(472 |
) |
|
(1,374 |
) |
|
(1,390 |
) |
|
(280 |
) |
|
(1,110 |
) |
Income from operations |
$ |
7,030 |
|
$ |
(1,557 |
) |
$ |
8,587 |
|
$ |
3,404 |
|
$ |
(411 |
) |
$ |
3,815 |
|
Net income attributable to ACM Research, Inc. |
$ |
8,782 |
|
$ |
(1,557 |
) |
$ |
10,339 |
|
$ |
3,853 |
|
$ |
(411 |
) |
$ |
4,264 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended September
30, |
|
2019 |
2018 |
|
Actual |
|
|
|
Adjusted |
Actual |
|
|
|
Adjusted |
|
(GAAP) |
|
|
|
(Non-GAAP) |
(GAAP) |
|
|
|
(Non-GAAP) |
|
(In thousands) |
|
|
|
|
|
|
|
Revenue |
$ |
82,916 |
|
$ |
- |
|
$ |
82,916 |
|
$ |
53,795 |
|
|
$ |
53,795 |
|
Cost of revenue |
|
(44,705 |
) |
|
(213 |
) |
|
(44,492 |
) |
|
(29,662 |
) |
|
(44 |
) |
|
(29,618 |
) |
Gross profit |
|
38,211 |
|
|
(213 |
) |
|
38,424 |
|
|
24,133 |
|
|
(44 |
) |
|
24,177 |
|
Operating expenses: |
|
|
|
|
|
|
Sales and marketing |
|
(8,679 |
) |
|
(252 |
) |
|
(8,427 |
) |
|
(7,766 |
) |
|
(115 |
) |
|
(7,651 |
) |
Research and development |
|
(9,598 |
) |
|
(939 |
) |
|
(8,659 |
) |
|
(6,224 |
) |
|
(131 |
) |
|
(6,093 |
) |
General and administrative |
|
(5,992 |
) |
|
(1,515 |
) |
|
(4,477 |
) |
|
(6,312 |
) |
|
(2,481 |
) |
|
(3,831 |
) |
Income from operations |
$ |
13,942 |
|
$ |
(2,919 |
) |
$ |
16,861 |
|
$ |
3,831 |
|
$ |
(2,771 |
) |
$ |
6,602 |
|
Net income attributable to ACM Research, Inc. |
$ |
14,950 |
|
$ |
(2,919 |
) |
$ |
17,869 |
|
$ |
4,288 |
|
$ |
(2,771 |
) |
$ |
7,059 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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