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ACM Research Reports Second Quarter 2018 Results
ACM Research’s President and Chief Executive Officer Dr.
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.
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 inShanghai , China. The$1.5 million investment byACM 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
Conference Call Details
A conference call to discuss results will be held today at
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
Use of Non-GAAP Financial Measures
While
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
About
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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 | ||||||||||||
Reconciliation of GAAP to Non-GAAP Financial Measures
As described under “Use of Non-GAAP Financial Measures” above,
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 | ) | ||||