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ACM Research Reports First Quarter 2020 Results
ACM’s President and Chief Executive Officer Dr.
|Three Months Ended
|(dollars in thousands, except per share data)|
|Income from operations(2)||$||1,218||$||2,251||$||1,907||$||2,995|
|Net income attributable to
(1) Reconciliations to
(2) Non-GAAP financial measures exclude stock-based compensation.
For fiscal year 2020, the Company continues to expect revenue to be in the range of
Q1 Operating Highlights and Recent Announcements
- Shipments. Total shipments in the first quarter of 2020 were
$12 million, versus $14 millionin the first quarter of 2019 and $25 millionin the fourth 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.
- Ultra Furnace Product Introduced. On
April 28, 2020, ACM introduced the Ultra Furnace. The initial system was developed for low-pressure chemical vapor deposition (LPCVD), and is intended to serve as a base platform for other dry processing applications, including oxidation, annealing processes, and atomic layer deposition (ALD). This achievement is the result of a two-year collaboration between ACM’s R&D teams located in Chinaand Korea.
- Broadened product offering with a suite of Semi-Critical Cleaning Systems. On
May 6, 2020, ACM announced a suite of three Ultra™ C wet cleaning tools: the “Ultra C b” for backside clean, “Ultra C wb” automated wet bench, and “Ultra C s” scrubber for front and backside processes.
- Expanded Global Sales Effort. In
April 2020, ACM announced the appointment of Jim Strausas Vice President of Sales for North Americato accelerate the effort to expand adoption of ACM's core technologies at major semiconductor companies in North America.
- ACM Shanghai Pre-IPO activities. Plans remain on track to submit ACM Shanghai’s application for an initial public offering of its shares on the Shanghai Stock Exchange’s STAR Market in mid-2020, and to price the transaction by year-end pending timely approvals.
- Proposed R&D and Production Center in Shanghai’s
Lingang Region. In December 2019, ACM Shanghai entered into a framework agreement to acquire land rights in the Lingang region of Shanghai, for the construction of a new R&D center and production facility on the land. The Company expects to finalize a definitive agreement for land rights for the proposed site in the near future, followed by plans to start construction activities in late 2020, with initial production activities to commence in late 2022.
The following figures refer to the first quarter of 2020, unless noted otherwise. All comparisons are with the first quarter of 2019, unless otherwise noted.
- Revenue was
$24.3 million, up 18.9%, reflecting an increase in revenue from single wafer wet cleaning and other front-end processing equipment, offset in part by a decrease in revenue from back-end wafer assembly and packaging equipment.
- Gross margin was 42.0%, compared to 43.1% in the first quarter of 2019. 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
$9.0 million, an increase of 37%. Non-GAAP operating expenses, which remove stock-based compensation, were $8.4 million, up 43%. Non-GAAP operating expenses as a percent of revenue increased to 34%, compared to 29% in the first quarter of 2019. Higher spending on new products and sales-related activities, preparation for the STAR Market IPO, and COVID-19 related items contributed to the increase from the prior-year period.
- Operating income of
$1.2 milliondeclined 46% due to the increase in operating expenses, which represented a substantial investment in the development and marketing of new product introductions.
- Net income attributable to
ACM Research, Inc.was $1.7 million, compared to $1.9 millionin the first quarter of 2019. Non-GAAP net income attributable to ACM Research, Inc.was $2.4 million, compared to $2.6 millionin the first quarter of 2019. Tax expense versus a normalized 12% tax-rate, and the effects of foreign-exchange fluctuations on operating results provided a net benefit of $0.6 millionin the first quarter of 2020, and a net expense of $0.1 millionin the first quarter of 2019.
- Net income per diluted share attributable to
ACM Research, Inc.was $0.08, versus $0.10in the first quarter of 2019. Non-GAAP net income per diluted share attributable to ACM Research, Inc.was $0.11, versus $0.14in the first quarter of 2019. Tax expense versus a normalized 12% tax rate, and the effects of foreign-exchange fluctuations on operating results provided a net benefit of $0.03per share in the first quarter of 2020, and a net expense of $0.01in the first quarter of 2019.
- Cash and equivalents at quarter-end were
$52.3 million, versus $58.3 millionat the end of the fourth quarter of 2019 and $27.4 millionat the end of the first quarter of 2019. The quarter-on-quarter decline was primarily due to the reduction of short-term borrowings, net of positive cash flow from operations and other items during the quarter.
Conference Call Details
A conference call to discuss results will be held on
Please register in advance to join the conference call using the link provided below and dial in 10 minutes before the call is scheduled to begin. Conference call access information will be provided upon registration.
Participant Online Registration: http://apac.directeventreg.com/registration/event/1594794
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.
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, any of which could be exacerbated even further by the continuing COVID-19 outbreak in
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:
|+1 (415) 489-2195|
|In China:||The Blueshirt Group Asia|
|+86 (138) 1079-1480|
Condensed Consolidated Balance Sheets
|(In thousands, except share and per share data)|
|Cash and cash equivalents||$||52,283||$||58,261|
|Accounts receivable, less allowance for doubtful accounts of
|Total current assets||198,477||198,396|
|Property, plant and equipment, net||3,495||3,619|
|Operating lease right-of-use assets, net||3,547||3,887|
|Intangible assets, net||307||344|
|Deferred tax assets||5,212||5,331|
|Other long-term assets||155||192|
|Liabilities, Redeemable Non-controlling Interest and Stockholders’ Equity|
|Advances from customers||9,236||9,129|
|Income taxes payable||3,347||3,129|
|Other payables and accrued expenses||14,331||12,874|
|Current portion of operating lease liability||1,345||1,355|
|Total current liabilities||50,767||53,502|
|Long-term operating lease liability||2,202||2,532|
|Other long-term liabilities||5,830||4,186|
|Commitments and contingencies|
|Redeemable Non-controlling interests||59,467||60,162|
|Common stock – Class A, par value
|Common stock–Class B, par value
|Additional paid in capital||84,351||83,487|
|Accumulated other comprehensive loss||(2,623||)||(1,675||)|
|Total stockholders’ equity||98,942||97,321|
|Total liabilities, redeembable non-controlling interests, and stockholders' equity||$||217,208||$||217,703|
Condensed Consolidated Statements of Operations and Comprehensive Income
|Three Months Ended
|( In thousands, except share and per share data)|
|Cost of revenue||14,120||11,653|
|Sales and marketing||3,005||1,869|
|Research and development||3,677||2,765|
|General and administrative||2,328||1,941|
|Total operating expenses, net||9,010||6,575|
|Income from operations||1,218||2,251|
|Other income (expense), net||677||(261||)|
|Equity income in net income of affiliates||148||116|
|Income before income taxes||2,267||1,976|
|Income tax expense||(304||)||(119||)|
|Less: Net income attributable to redeemable non-controlling interests||258||-|
|Net income attributable to ACM Research, Inc.||$||1,705||$||1,857|
|Foreign currency translation adjustment||(1,900||)||657|
|Total comprehensive income||63||2,514|
|Less: Comprehensive income attributable to redeemable non-controlling interests||(694||)||-|
|Total comprehensive income attributable to ACM Research, Inc.||$||757||$||2,514|
|Net income attributable to
|Weighted average common shares outstanding used in computing per share amounts:|
Reconciliation of GAAP to Non-GAAP Financial Measures
As described under “Use of Non-GAAP Financial Measures” above, ACM presents non-GAAP gross margin, operating income and net income (loss) as supplemental measures to GAAP financial measures, each of which excludes stock-based compensation (“SBC”) from the equivalent GAAP financial line items. The following table reconciles gross margin, operating income and net income (loss) to the related non-GAAP financial measures:
|Three Months Ended
|Cost of revenue||(14,120||)||(45||)||(14,075||)||(11,653||)||(30||)||(11,623||)|
|Sales and marketing||(3,005||)||(94||)||(2,911||)||(1,869||)||(34||)||(1,835||)|
|Research and development||(3,677||)||(187||)||(3,490||)||(2,765||)||(86||)||(2,679||)|
|General and administrative||(2,328||)||(363||)||(1,965||)||(1,941||)||(594||)||(1,347||)|
|Income from operations||$||1,218||$||(689||)||$||1,907||$||2,251||$||(744||)||$||2,995|
|Net income attributable to
Source: ACM Research (Shanghai), Inc.