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ACM Research Reports Fourth Quarter and Fiscal Year 2019 Results
ACM’s President and Chief Executive Officer Dr.
Three Months Ended |
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GAAP | Non-GAAP(1) | ||||||||||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||||||||||
(dollars in thousands, except per share amounts) | |||||||||||||||||||||||
Revenue | $ | 24,608 | $ | 20,848 | $ | 24,608 | $ | 20,848 | |||||||||||||||
Gross margin(2) | 50.6 | % | 49.5 | % | 50.7 | % | 49.6 | % | |||||||||||||||
Income from operations(2) | $ | 3,849 | $ | 2,640 | $ | 4,502 | $ | 3,232 | |||||||||||||||
Net income attributable to |
$ | 3,944 | $ | 2,286 | $ | 4,597 | $ | 2,878 | |||||||||||||||
Basic EPS(2) | $ | 0.22 | $ | 0.14 | $ | 0.25 | $ | 0.18 | |||||||||||||||
Diluted EPS(2) | $ | 0.19 | $ | 0.13 | $ | 0.23 | $ | 0.16 |
Years Ended |
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GAAP | Non-GAAP(1) | ||||||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||||||
(dollars in thousands, except per share amounts) | |||||||||||||||||||
Revenue | $ | 107,524 | $ | 74,643 | $ | 107,524 | $ | 74,643 | |||||||||||
Gross margin(2) | 47.1 | % | 46.2 | % | 47.3 | % | 46.2 | % | |||||||||||
Income from operations(2) | $ | 17,791 | $ | 6,471 | $ | 21,363 | $ | 9,834 | |||||||||||
Net income (loss) attributable to |
$ | 18,894 | $ | 6,574 | $ | 22,466 | $ | 9,937 | |||||||||||
Basic EPS(2) | $ | 1.12 | $ | 0.42 | $ | 1.34 | $ | 0.63 | |||||||||||
Diluted EPS(2) | $ | 0.99 | $ | 0.37 | $ | 1.17 | $ | 0.55 |
(1) Reconciliations to
(2) Non-GAAP financial measures exclude stock-based compensation.
Outlook
For fiscal year 2020, the Company expects revenue to be in the range of
Operating Highlights
- Shipments. Total shipments in 2019 were
$115 million , versus$95 million in 2018. Total shipments in the fourth quarter of 2019 were$25 million , versus$32 million in the fourth quarter of 2018 and$43 million in the third quarter of 2019. Total shipments include deliveries for revenue in the quarter, and deliveries of systems awaiting customer acceptance for potential revenue in future quarters. - New Products. ACM completed delivery of a new stress-free polishing (SFP)/electropolishing and CMP integrated tool to a major packaging customer in the fourth quarter of 2019. This new product is designed to save more than 80% of slurry for metal polishing in 2.5D and 3D package applications.
- Expanded Global Sales Effort. In
October 2019 , ACM announced two new additions to its global sales team to help the Company penetrate potential customers inNorth America andSoutheast Asia . - ACM Shanghai Pre-IPO activities. In
December 2019 , ACM announced it had completed the second tranche of private equity investments in ACM Shanghai, with an additional$32.4 million invested. This brings the total to$60.2 million invested (at year-end exchange rates) for both tranches, representing an aggregate of 8.3% of redeemable non-controlling interests in ACM Shanghai. Plans remain on track to submit ACM Shanghai’s application for an initial public offering of its shares on the STAR market in the mid-2020 timeframe. - Proposed R&D and Production Center in Shanghai’s
Lingang Region . InDecember 2019 , ACM Shanghai entered into a framework agreement to acquire land rights in the Lingang region ofShanghai , for the construction of a new R&D center and production facility on the land, located approximately 30 miles from ACM Shanghai’s headquarters in Zhangjiang.
Financial Summary
- Revenue. Revenue for 2019 was
$107.5 million , up 44% from 2018, due primarily to an increase in revenue from single-wafer wet cleaning tools. Revenue for the fourth quarter of 2019 was$24.6 million , up 18% from the fourth quarter of 2018, due to an increased volume of tools shipped for revenue and higher prices associated with those tools. - Gross margin. Gross margin for 2019 was 47.1%, versus 46.2% in 2018. Gross margin for the fourth quarter of 2019 was 50.6%, versus 49.5% in 2018. Gross margin was above 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. Operating expenses for 2019 were
$32.9 million , compared to$28.0 million in 2018. The increase in operating expenses for 2019 was due to higher R&D, sales and marketing, and general and administrative expenses. Operating expenses in the fourth quarter of 2019 were$8 .6 million, up from$7.7 million in the fourth quarter of 2018. - Net income attributable to
ACM Research, Inc. Net income for 2019 was$18.9 million , compared to$6.6 million in 2018. Net income in the fourth quarter of 2019 was$3.9 million , compared to$2.3 million in the fourth quarter of 2018. Tax items and effects of foreign-exchange fluctuations on operating results provided net benefits of$4.7 million and$1.7 million in 2019 and 2018, respectively, and$1.1 million and$0.3 million in the fourth quarters of 2019 and 2018, respectively. - Net income per diluted share attributable to
ACM Research, Inc. Net income per diluted share for 2019 was$0.99 , compared to$0.37 in 2018. Non-GAAP net income per diluted share (excluding stock-based compensation) for 2019 was$1.17 compared to$0.55 in 2018. Tax items and effects of foreign-exchange fluctuations on operating results provided net benefits per share of$0.25 and$0.10 in 2019 and 2018, respectively, and$0.05 and 0.01 in the fourth quarters of 2019 and 2018, respectively. - Cash and cash equivalents at year-end were
$58.3 million , up from$47.3 million at the end of the third quarter of 2019 and$27.1 million at the end of 2018.
Conference Call Details
A conference call to discuss results will be held on
Phone Number | Toll-Free Number | |||
+1 (845) 675-0437 | +1 (866) 519-4004 | |||
+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, and basic and diluted earnings per share as supplemental measures to GAAP financial measures regarding its 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 third paragraph 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, any of which could be exacerbated even further by the continuing COVID-19 outbreak in
About
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.
©
For investor and media inquiries, please contact:
In |
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+1 (415) 489-2195 | ||||||
ralph@blueshirtgroup.com | ||||||
In China: | The Blueshirt Group Asia | |||||
+86 (138) 1079-1480 | ||||||
gary@blueshirtgroup.com | ||||||
Condensed Consolidated Balance Sheets | ||||||||
(Unaudited) | ||||||||
(In thousands, except share and per share data) | ||||||||
Assets | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 58,261 | $ | 27,124 | ||||
Restricted cash | 59,598 | |||||||
Accounts receivable, less allowance for doubtful accounts of |
31,091 | 24,608 | ||||||
Other receivables | 2,603 | 3,547 | ||||||
Inventories | 44,796 | 38,764 | ||||||
Prepaid expenses | 2,047 | 1,985 | ||||||
Total current assets | 198,396 | 96,028 | ||||||
Property, plant and equipment, net | 3,619 | 3,708 | ||||||
Operating lease right-of-use assets, net | 3,887 | - | ||||||
Intangible assets, net | 344 | 274 | ||||||
Deferred tax assets | 5,331 | 1,637 | ||||||
Long-term investments | 5,934 | 1,360 | ||||||
Other long-term assets | 192 | 40 | ||||||
Total assets | 217,703 | 103,047 | ||||||
Liabilities, Redeemable Non-controlling Interest and Stockholders’ Equity | ||||||||
Current liabilities: | ||||||||
Short-term borrowings | 13,753 | 9,447 | ||||||
Accounts payable | 13,262 | 16,673 | ||||||
Advances from customers | 9,129 | 8,417 | ||||||
Income taxes payable | 3,129 | 1,193 | ||||||
Other payables and accrued expenses | 12,874 | 10,410 | ||||||
Current portion of operating lease liability | 1,355 | - | ||||||
Total current liabilities | 53,502 | 46,140 | ||||||
Long-term operating lease liability | 2,532 | - | ||||||
Other long-term liabilities | 4,186 | 4,583 | ||||||
Total liabilities | 60,220 | 50,723 | ||||||
Commitments and contingencies | ||||||||
Redeemable Non-controlling interests | 60,162 | - | ||||||
Stockholders’ equity: | ||||||||
Common stock – Class A, par value |
2 | 1 | ||||||
Common stock–Class B, par value |
- | - | ||||||
Additional paid in capital | 83,487 | 56,567 | ||||||
Accumulated surplus (deficit) | 15,507 | (3,387 | ) | |||||
Accumulated other comprehensive loss | (1,675 | ) | (857 | ) | ||||
Total stockholders’ equity | 97,321 | 52,324 | ||||||
Total liabilities, redeemable non-controlling interests, and stockholders' equity | $ | 217,703 | $ | 103,047 | ||||
Condensed Consolidated Statements of Operations and Comprehensive Income | ||||||||||||||||
Three Months Ended |
Twelve Months Ended |
|||||||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||||||
(Unaudited) | (Unaudited) | |||||||||||||||
( In thousands, except share and per share data) | ( In thousands, except share and per share data) | |||||||||||||||
Revenue | $ | 24,608 | $ | 20,848 | $ | 107,524 | $ | 74,643 | ||||||||
Cost of revenue | 12,165 | 10,532 | 56,870 | 40,194 | ||||||||||||
Gross profit | 12,443 | 10,316 | 50,654 | 34,449 | ||||||||||||
Operating expenses: | ||||||||||||||||
Sales and marketing | 3,223 | 1,845 | 11,902 | 9,611 | ||||||||||||
Research and development | 3,302 | 4,156 | 12,900 | 10,380 | ||||||||||||
General and administrative | 2,069 | 1,675 | 8,061 | 7,987 | ||||||||||||
Total operating expenses, net | 8,594 | 7,676 | 32,863 | 27,978 | ||||||||||||
Income from operations | 3,849 | 2,640 | 17,791 | 6,471 | ||||||||||||
Interest income | 205 | 9 | 333 | 29 | ||||||||||||
Interest expense | (207 | ) | (134 | ) | (745 | ) | (498 | ) | ||||||||
Other income , net | (739 | ) | 42 | 1,393 | 1,255 | |||||||||||
Equity income (loss) in net income of affiliates | (92 | ) | (112 | ) | 168 | 123 | ||||||||||
Income before income taxes | 3,016 | 2,445 | 18,940 | 7,380 | ||||||||||||
Income tax (expense ) benefit | 1,185 | (159 | ) | 518 | (806 | ) | ||||||||||
Net income | 4,201 | 2,286 | 19,458 | 6,574 | ||||||||||||
Less: Net income attributable to redeemable non-controlling interest | 257 | - | 564 | - | ||||||||||||
Net income attributable to ACM Research, Inc. | $ | 3,944 | $ | 2,286 | $ | 18,894 | $ | 6,574 | ||||||||
Comprehensive income: | ||||||||||||||||
Net income | 4,201 | 2,286 | 19,458 | 6,574 | ||||||||||||
Foreign currency translation adjustment | 2,003 | 98 | (899 | ) | (979 | ) | ||||||||||
Total comprehensive income | 6,204 | 2,384 | 18,559 | 5,595 | ||||||||||||
Less: Comprehensive income attributable to redeemable non-controlling interests | 176 | - | 483 | - | ||||||||||||
Total comprehensive income attributable to ACM Research, Inc. | $ | 6,028 | $ | 2,384 | $ | 18,076 | $ | 5,595 | ||||||||
Net income attributable to |
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Basic | $ | 0.22 | $ | 0.14 | $ | 1.12 | $ | 0.42 | ||||||||
Diluted | $ | 0.19 | $ | 0.13 | $ | 0.99 | $ | 0.37 | ||||||||
Weighted average common shares outstanding used in computing per share amounts: | ||||||||||||||||
Basic | 18,043,007 | 16,004,781 | 16,800,623 | 15,788,460 | ||||||||||||
Diluted | 20,373,336 | 18,115,071 | 19,135,497 | 17,912,105 | ||||||||||||
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 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 to the related non-GAAP financial measures:
Three Months Ended |
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2019 | 2018 | ||||||||||||||||||
Actual | SBC | Adjusted | Actual | SBC | Adjusted | ||||||||||||||
(GAAP) | (Non-GAAP) | (GAAP) | (Non-GAAP) | ||||||||||||||||
(In thousands) | |||||||||||||||||||
Revenue | $ | 24,608 | $ | - | $ | 24,608 | $ | 20,848 | $ | - | $ | 20,848 | |||||||
Cost of revenue | (12,165 | ) | (37 | ) | (12,128 | ) | (10,532 | ) | (27 | ) | (10,505 | ) | |||||||
Gross profit | 12,443 | (37 | ) | 12,480 | 10,316 | (27 | ) | 10,343 | |||||||||||
Operating expenses: | |||||||||||||||||||
Sales and marketing | (3,223 | ) | (76 | ) | (3,147 | ) | (1,845 | ) | (5 | ) | (1,840 | ) | |||||||
Research and development | (3,302 | ) | (154 | ) | (3,148 | ) | (4,156 | ) | (124 | ) | (4,032 | ) | |||||||
General and administrative | (2,069 | ) | (386 | ) | (1,683 | ) | (1,675 | ) | (436 | ) | (1,239 | ) | |||||||
Income from operations | $ | 3,849 | $ | (653 | ) | $ | 4,502 | $ | 2,640 | $ | (592 | ) | $ | 3,232 | |||||
Net income attributable to |
$ | 3,944 | $ | (653 | ) | $ | 4,597 | $ | 2,286 | $ | (592 | ) | $ | 2,878 | |||||
Year Ended |
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2019 | 2018 | ||||||||||||||||||
Actual | SBC | Adjusted | Actual | SBC | Adjusted | ||||||||||||||
(GAAP) | (Non-GAAP) | (GAAP) | (Non-GAAP) | ||||||||||||||||
(In thousands) | |||||||||||||||||||
Revenue | $ | 107,524 | $ | - | $ | 107,524 | $ | 74,643 | $ | 74,643 | |||||||||
Cost of revenue | (56,870 | ) | (250 | ) | (56,620 | ) | (40,194 | ) | (71 | ) | (40,123 | ) | |||||||
Gross profit | 50,654 | (250 | ) | 50,904 | 34,449 | (71 | ) | 34,520 | |||||||||||
Operating expenses: | |||||||||||||||||||
Sales and marketing | (11,902 | ) | (328 | ) | (11,574 | ) | (9,611 | ) | (120 | ) | (9,491 | ) | |||||||
Research and development | (12,900 | ) | (1,093 | ) | (11,807 | ) | (10,380 | ) | (255 | ) | (10,125 | ) | |||||||
General and administrative | (8,061 | ) | (1,901 | ) | (6,160 | ) | (7,987 | ) | (2,917 | ) | (5,070 | ) | |||||||
Income from operations | $ | 17,791 | $ | (3,572 | ) | $ | 21,363 | $ | 6,471 | $ | (3,363 | ) | $ | 9,834 | |||||
Net income attributable to |
$ | 18,894 | $ | (3,572 | ) | $ | 22,466 | $ | 6,574 | $ | (3,363 | ) | $ | 9,937 | |||||
Source: ACM Research (Shanghai), Inc.