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ACM Research Reports Fourth Quarter and Fiscal Year 2017 Results
ACM Research’s President and Chief Executive Officer Dr.
Recent Operating Highlights
- First Commercial Copper Plating Equipment for Mass Production. In the fourth quarter of 2017, the Company successfully shipped its first commercial copper plating equipment for mass production. The tool was shipped to a leading supplier of advanced packaging services in
China . - Two TEBO-related Patent Applications. ACM further strengthened its core TEBO (Timely Energized Bubble Oscillation) technology portfolio by filing two TEBO-related patent applications in the fourth quarter of 2017.
- Multiple Orders for SAPS-based tools. In
December 2017 andJanuary 2018 ,ACM Research received binding purchase commitments from five existing customers to purchase$38.1 million of wafer-cleaning tools based on the Company’s SAPS (Space Alternated Phase Shift) technology. The Company expects to recognize revenue from these purchases beginning in the second quarter of 2018 and continuing into the third quarter.
Financial Summary
Quarter | Three Months December 31, 2017 | ||||||||||||||
GAAP | Non-GAAP(1) | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
(dollars in thousands) | |||||||||||||||
Revenue | $ | 17,192 | $ | 14,344 | $ | 17,192 | $ | 14,344 | |||||||
Gross margin(2) | 53.4 | % | 52.9 | % | 53.4 | % | 52.9 | % | |||||||
Income (loss) from operations(2) | $ | 3,764 | $ | 4,266 | $ | 3,695 | $ | 4,456 | |||||||
Net income (loss) attributable to ACM Research, Inc.(2) | $ | 3,384 | $ | 1,223 | $ | 3,315 | $ | 1,413 | |||||||
Year to Date | |||||||||||||||
For the Year Ended December 31, | |||||||||||||||
GAAP | Non-GAAP(1) | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
(dollars in thousands) | |||||||||||||||
Revenue | $ | 36,506 | $ | 27,371 | $ | 36,506 | $ | 27,371 | |||||||
Gross margin(2) | 47.2 | % | 48.7 | % | 47.2 | % | 48.7 | % | |||||||
Income (loss) from operations(2) | $ | 700 | $ | 3,490 | $ | 2,323 | 3,873 | ||||||||
Net income (loss) attributable to ACM Research, Inc.(2) | $ | (316 | ) | $ | 1,031 | $ | 1,307 | $ | 1,414 |
________________________
(1) Reconciliations to U.S. generally accepted accounting principles (“GAAP”) financial measures from non-GAAP financial measures are presented below under “Unaudited Reconciliation of GAAP to Non-GAAP Financial Measures.”
(2) Non-GAAP financial measures exclude stock-based compensation.
- Revenue. Revenue in the fourth quarter of 2017 increased 19.9% from the comparable quarter in 2016 to
$17.2 million . The increase was due to greater sales of single-wafer cleaning equipment and from the first sale of copper plating equipment. Revenue for fiscal year 2017 totaled$36.5 million , an increase of 33.4% from fiscal year 2016, due largely to a higher volume of shipments of single-wafer cleaning equipment. - Gross Margin. Gross margins of 53.4% and 47.2%, respectively, in the three and twelve months ended
December 31, 2017 were above the range of 40.0% to 45.0% generally anticipated by the Company for the foreseeable future. Gross margin may vary from period to period, primarily related to the level of utilization and the timing and mix of purchase orders. The strong gross margin performance in the fourth quarter of 2017 was due to the sale of the first copper plating equipment, which was manufactured under PRC governmental subsidies. - Operating Expenses. Operating expenses in the fourth quarter of 2017 were
$5.4 million , up from$3.3 million in the fourth quarter of 2016. Operating expenses in fiscal year 2017 totaled$16.5 million , compared to$9.8 million in fiscal 2016. The increases in operating expenses in the fourth quarter and fiscal year 2017 were due to higher R&D spending, sales and marketing expenses, the cost of preparing for the Company’s initial public offering (“IPO”), and an increase in stock-based compensation. - Net Income (Loss) attributable to
ACM Research . Net income in the fourth quarter 2017 was$3.4 million , up from$1.2 million in the fourth quarter of 2016. Net loss for fiscal year 2017 was$0.3 million , compared to net income of$1.0 million in fiscal year 2016. Net loss in 2017 reflected increased spending on research and development and customer support, as well as expenses associated with preparation for the IPO as well as an increase in stock-based compensation. - Cash and Capital Stock. In
November 2017 ACM Research sold 2,233,000 shares of Class A common stock in its initial public offering and an additional 1,333,334 shares in a concurrent private placement, for aggregate gross proceeds of$20 .0 million. The Company held$17.7 million in cash as of December 31, 2017.
2018 Revenue Outlook
For fiscal year 2018, the Company expects revenue to be approximately
Conference Call Details
A conference call to discuss fourth quarter and fiscal year 2017 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 800906601 |
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 “Financial Summary—Gross Margin” with respect to the expected range of gross margin for the foreseeable future and under “Fiscal 2018 Revenue 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
About
©
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 | ||||||
December 31, | ||||||
2017 | 2016 |
|||||
(in thousands) | ||||||
Assets | ||||||
Current assets: | ||||||
Cash and cash equivalents | $ | 17,681 | $ | 10,119 | ||
Accounts receivable, less allowance for doubtful accounts of $0 and $0 as of December 31, 2017 and 2016, respectively | 26,762 | 16,026 | ||||
Other receivables | 2,491 | 1,763 | ||||
Inventory | 15,388 | 11,666 | ||||
Prepaid expenses | 546 | 720 | ||||
Other current assets | 46 | 53 | ||||
Total current assets | 62,914 | 40,347 | ||||
Property, plant and equipment, net | 2,340 | 2,262 | ||||
Intangible assets, net | 106 | 17 | ||||
Deferred tax assets | 1,294 | 1,841 | ||||
Investment in equity method affiliates | 1,237 | - | ||||
Total assets | $ | 67,891 | $ | 44,467 | ||
Liabilities, Redeemable Convertible Preferred Stock and Stockholders’ Equity (Deficit) | ||||||
Current liabilities: | ||||||
Short-term borrowings | $ | 5,095 | $ | 4,761 | ||
Notes payable | 11 | 11 | ||||
Investors’ deposit | - | 2,902 | ||||
Warrant liability | 3,079 | - | ||||
Accounts payable (including amounts due to a related party of $1,925 and $508 at December 31, 2017 and 2016, respectively) | 7,419 | 5,173 | ||||
Advances from customers | 143 | 215 | ||||
Income tax payable | 44 | 44 | ||||
Other payables and accrued expenses (including amounts due to a related-party of $2,024 and $1,883 as of December 31, 2017 and 2016, respectively) | 6,026 | 3,963 | ||||
Total current liabilities | 21,817 | 17,069 | ||||
Other long-term liabilities | 6,217 | 6,879 | ||||
Total liabilities | 28,034 | 23,948 | ||||
Total redeemable convertible preferred stock (note 15) | - |
18,034 | ||||
Total ACM Research, Inc. stockholders’ (deficit) equity | 39,857 | (2,434 | ) | |||
Non-controlling interests | - | 4,919 | ||||
Total stockholders’ equity (deficit) | 39,857 | 2,485 | ||||
Total liabilities, redeemable convertible preferred stock and stockholders’ equity | $ | 67,891 | $ | 44,467 | ||
ACM RESEARCH, INC. | |||||||||||||||
Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) | |||||||||||||||
Three Months Ended December 31, |
Twelve Months Ended December 31, |
||||||||||||||
2017 |
2016 |
2017 |
2016 |
||||||||||||
(in thousands, except share and per share data) | |||||||||||||||
Revenue | $ | 17,192 | $ | 14,344 | $ | 36,506 | $ | 27,371 | |||||||
Cost of revenue | 8,020 | 6,761 | 19,281 | 14,042 | |||||||||||
Gross profit | 9,172 | 7,583 | 17,225 | 13,329 | |||||||||||
Operating expenses, net: | |||||||||||||||
Sales and marketing | 1,881 | 1,379 | 5,500 | 3,907 | |||||||||||
Research and development | 2,062 | 960 | 5,138 | 3,259 | |||||||||||
General and administrative | 1,465 | 978 | 5,887 | 2,673 | |||||||||||
Total operating expenses, net | 5,408 | 3,317 | 16,525 | 9,839 | |||||||||||
Income from operations | 3,764 | 4,266 | 700 | 3,490 | |||||||||||
Interest income | 2 | 4 | 9 | 16 | |||||||||||
Interest expense | (80 | ) | (64 | ) | (277 | ) | (181 | ) | |||||||
Equity in net income of affiliates | 16 | - | 37 | - | |||||||||||
Non-operating income (expense), net | (261 | ) | (814 | ) | (792 | ) | (343 | ) | |||||||
Income (loss) before income taxes | 3,441 | 3,392 | (323 | ) | 2,982 | ||||||||||
Income tax benefit (expense) | (76 | ) | (536 | ) | (547 | ) | (595 | ) | |||||||
Net income (loss) | 3,365 | 2,856 | (870 | ) | 2,387 | ||||||||||
Less: Net income (loss) attributable to non-controlling interests | (19 | ) | 1,633 | (554 | ) | 1,356 | |||||||||
Net income (loss) attributable to ACM Research, Inc. | $ | 3,384 | $ | 1,223 | $ | (316 | ) | $ | 1,031 | ||||||
Comprehensive income (loss): | |||||||||||||||
Net income (loss) | $ | 3,365 | $ | 2,856 | $ | (870 | ) | $ | 2,387 | ||||||
Foreign currency translation adjustment | (21 | ) | (325 | ) | 472 | (522 | ) | ||||||||
Comprehensive income (loss) | 3,344 | 2,531 | (398 | ) | 1,865 | ||||||||||
Less: Comprehensive income (loss) attributable to non‑controlling interests | (22 | ) | 1,512 | (369 | ) | 1,161 | |||||||||
Total comprehensive income (loss) attributable to ACM Research, Inc. | $ | 3,366 | $ | 1,019 | $ | (29 | ) | $ | 704 | ||||||
Net income (loss) per common shares: | |||||||||||||||
Basic | $ | 0.28 | $ | 0.31 | $ | (0.05 | ) | $ | 0.30 | ||||||
Diluted | $ | 0.23 | $ | 0.21 | $ | (0.05 | ) | $ | 0.18 | ||||||
Weighted average common stocks outstanding used in computing per share amounts: | |||||||||||||||
Basic | 12,013,651 | 2,475,654 | 6,865,390 | 2,176,315 | |||||||||||
Diluted | 14,978,998 | 3,713,008 | 6,865,390 | 3,792,137 | |||||||||||
Reconciliation of GAAP to Non-GAAP Financial Measures
As described under “Use of Non-GAAP Financial Measures” above,
Three Months Ended December 31, | ||||||||||||||||
2017 | 2016 |
|||||||||||||||
Actual | Adjusted | Actual | Adjusted | |||||||||||||
(GAAP) | SBC | (Non-GAAP) | (GAAP) | SBC | (Non-GAAP) | |||||||||||
(in thousands) | ||||||||||||||||
Revenue | $ | 17,192 | $ | - | $ | 17,192 | $ | 14,344 | $ | - | $ | 14,344 | ||||
Cost of revenue | 8,020 | (6 | ) | 8,014 | 6,761 | (3 | ) | 6,758 | ||||||||
Gross profit | 9,172 | (6 | ) | 9,178 | 7,583 | (3 | ) | 7,586 | ||||||||
Operating expenses: | ||||||||||||||||
Sales and marketing | 1,881 | (18 | ) | 1,863 | 1,379 | (1 | ) | 1,378 | ||||||||
Research and development | 2,062 | (12 | ) | 2,050 | 960 | (1 | ) | 959 | ||||||||
General and administrative | 1,465 | 105 | 1,570 | 978 | (185 | ) | 793 | |||||||||
Income (loss) from operations | $ | 3,764 | $ | 69 | $ | 3,695 | $ | 4,266 | $ | (190 | ) | $ | 4,456 | |||
Net income attributable to ACM Research, Inc. | $ | 3,384 | $ | 69 | $ | 3,315 | $ | 1,223 | $ | (190 | ) | $ | 1,413 | |||
Year ended December 31, | ||||||||||||||||
2017 |
2016 |
|||||||||||||||
Actual | Adjusted | Actual | Adjusted | |||||||||||||
(GAAP) | SBC | (Non-GAAP) | (GAAP) | SBC | (Non-GAAP) | |||||||||||
(in thousands) | ||||||||||||||||
Revenue | $ | 36,506 | $ | - | $ | 36,506 | $ | 27,371 | $ | - | $ | 27,371 | ||||
Cost of revenue | 19,281 | (21 | ) | 19,260 | 14,042 | (11 | ) | 14,031 | ||||||||
Gross profit | 17,225 | (21 | ) | 17,246 | 13,329 | (11 | ) | 13,340 | ||||||||
Operating expenses: | ||||||||||||||||
Sales and marketing | 5,500 | (53 | ) | 5,447 | 3,907 | (5 | ) | 3,902 | ||||||||
Research and development | 5,138 | (50 | ) | 5,088 | 3,259 | (5 | ) | 3,254 | ||||||||
General and administrative | 5,887 | (1,499 | ) | 4,388 | 2,673 | (362 | ) | 2,311 | ||||||||
Income from operations | $ | 700 | $ | (1,623 | ) | $ | 2,323 | $ | 3,490 | $ | (383 | ) | $ | 3,873 | ||
Net income (loss) attributable to ACM Research, Inc. | $ | (316 | ) | $ | (1,623 | ) | $ | 1,307 | $ | 1,031 | $ | (383 | ) | $ | 1,414 | |