ACM Research Reports Third Quarter 2017 Results
December 07 2017 - 6:00AM
ACM Research, Inc. (NASDAQ:ACMR), a provider of single-wafer wet
cleaning equipment used by manufacturers of advanced
semiconductors, today reported unaudited financial results for its
third fiscal quarter, ended September 30, 2017.
ACM’s President and Chief Executive Officer Dr. David Wang
stated, “The recent public offering of our stock demonstrates our
commitment to our customers, both current and future. We now have
more resources to drive product innovation and world-class service
levels, and we expect our financial and other public company
disclosures will instill confidence in the sustainability of our
business. We intend to be a major global player in semiconductor
manufacturing equipment by producing the most effective wafer
cleaning tools, which will enable our customers to realize higher
yields and better economic returns on their fab investments.”
Operating Highlights
- Ultra C TEBO II Qualified at Customer Production
Line. The company’s Ultra C TEBO (Timely Energized Bubble
Oscillation) II tool, which uses ACM’s proprietary technology to
provide effective, damage-free cleaning for both conventional 2D
wafers and advanced 3D patterned wafers, was qualified and used in
a production line at a foundry/logic customer.
- Ultra C SAPS V Deployed by Memory Chip
Manufacturers. Several of the company’s Ultra C SAPS
(Space Alternated Phase Shift) V tools, equipped with twelve
cleaning chambers, were deployed at a leading memory chip producer
in Korea and an emerging memory chip producer in China.
Financial Summary
Quarter
|
Three Months Ended September 30, |
|
GAAP |
|
Non-GAAP(1) |
|
|
2017 |
|
|
|
2016 |
|
|
|
2017 |
|
|
|
2016 |
|
|
(dollars in thousands) |
Revenue |
$ |
4,891 |
|
|
$ |
4,904 |
|
|
$ |
4,891 |
|
|
$ |
4,904 |
|
Gross margin(2) |
|
45.0 |
% |
|
|
59.4 |
% |
|
|
45.1 |
% |
|
|
59.5 |
% |
Income (loss) from
operations(2) |
$ |
(1,310 |
) |
|
$ |
788 |
|
|
$ |
(967 |
) |
|
$ |
788 |
|
Net income (loss)
attributable to ACM Research, Inc.(2) |
$ |
(955 |
) |
|
$ |
362 |
|
|
$ |
(611 |
) |
|
$ |
362 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year to Date
|
Nine Months Ended September 30, |
|
GAAP |
|
Non-GAAP(1) |
|
|
2017 |
|
|
|
2016 |
|
|
|
2017 |
|
|
|
2016 |
|
|
(dollars in thousands) |
Revenue |
$ |
19,314 |
|
|
$ |
13,026 |
|
|
$ |
19,314 |
|
|
$ |
13,026 |
|
Gross margin(2) |
|
41.7 |
% |
|
|
44.1 |
% |
|
|
41.8 |
% |
|
|
44.2 |
% |
Income (loss) from
operations(2) |
$ |
(3,065 |
) |
|
$ |
(775 |
) |
|
$ |
(1,373 |
) |
|
$ |
(582 |
) |
Net income (loss)
attributable to ACM Research, Inc.(2) |
$ |
(3,702 |
) |
|
$ |
(191 |
) |
|
$ |
(2,010 |
) |
|
$ |
2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
________________________ (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. Revenue in the third quarter of 2017
was essentially flat with the prior year period, reflecting a
decrease in revenue from advanced packaging equipment that was
substantially offset by an increase in revenue from single-wafer
cleaning equipment. Revenue in the first nine months of 2017
increased 48.3% from the first nine months of 2016, due to a higher
volume of shipments of single-wafer cleaning equipment during the
first half of 2017.
- Gross Margin. Gross margins of 45.0% and
41.7%, respectively, in the three and nine months ended September
30, 2017 were within 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 three and nine months ended
September 30, 2016 was due to the sale of one higher‑margin
single-wafer wet cleaning equipment tool.
- Net Income (Loss). Net losses for the three
and nine months ended September 30, 2017 reflected increased
spending on research and development and customer support, as well
as expenses associated with preparation for the company’s initial
public offering.
- Non-controlling Interests. In the third
quarter of 2017 ACM acquired 18.77% of the outstanding equity
interest in ACM’s operating company ACM Research (Shanghai), Inc.,
increasing ACM’s holdings to a total of 81.64% of the operating
company’s equity interests. Subsequent to quarter end, ACM closed
the commitment to acquire the remaining 18.36% of the operating
company’s equity interests.
- Cash and Capital Stock. In November 2017 ACM
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 $20.3 million in cash as of December 1, 2017. The
stock offerings, including the automatic conversion of ACM’s
convertible preferred stock upon completion of the initial public
offering, will be reflected in ACM’s financial statements for the
fourth quarter of 2017.
Fourth Quarter 2017 Revenue Outlook
For the fourth quarter of 2017, the company expects revenue to
be in the range of $11 million to $12 million.
Conference Call Detail
A conference call to discuss third quarter 2017 results will be
held today at 8:00 a.m. EDT. Dial-in details for the call are as
follows. Please reference conference ID 8992699.
|
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 ACM Research 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 (loss) and
net income (loss) 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 paragraph of this press
release and under “Financial Summary—Gross Margin” above with
respect to the expected range of gross margin for the foreseeable
future 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 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 completed its initial public
offering on November 7, 2017, and its Class A common stock
began trading on The Nasdaq Global Market Stock Exchange on
November 3, 2017.
© ACM Research, Inc. SAPS, TEBO, ULTRA C and the ACM Research
logo are trademarks of ACM Research, Inc. All rights reserved. Any
other trademarks are the property of their respective owners.
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. |
Unaudited Condensed Consolidated Balance
Sheets |
|
|
September 30, 2017 |
|
December 31, 2016 |
|
(in thousands) |
Assets |
|
|
|
|
|
Current assets: |
|
|
|
|
|
Cash and
cash equivalents |
$ |
17,074 |
|
$ |
10,119 |
|
Restricted cash |
|
433 |
|
|
- |
|
Accounts
receivable |
|
15,784 |
|
|
16,026 |
|
Loans
receivable – related party |
|
946 |
|
|
- |
|
Other
receivables |
|
2,017 |
|
|
1,763 |
|
Inventory |
|
18,077 |
|
|
11,666 |
|
Prepaid
expenses |
|
801 |
|
|
720 |
|
Other
current assets |
|
890 |
|
|
53 |
|
Total current
assets |
|
56,022 |
|
|
40,347 |
|
Property, plant and
equipment, net |
|
2,346 |
|
|
2,262 |
|
Intangible assets,
net |
|
35 |
|
|
17 |
|
Deferred tax
assets |
|
1,433 |
|
|
1,841 |
|
Investment in equity
method affiliates |
|
1,220 |
|
|
- |
|
Total assets |
$ |
61,056 |
|
$ |
44,467 |
|
|
|
|
|
|
|
Liabilities, Redeemable Convertible Preferred Stock and
Stockholders’ Equity |
|
|
|
Current
liabilities: |
|
|
|
|
|
Short-term borrowings |
$ |
3,472 |
|
$ |
4,761 |
|
Notes
payable |
|
11 |
|
|
11 |
|
Investors’ deposit |
|
- |
|
|
2,902 |
|
Warrant
liability |
|
3,033 |
|
|
- |
|
Accounts
payable |
|
8,667 |
|
|
5,173 |
|
Advances
from customers |
|
75 |
|
|
215 |
|
Income
tax payable |
|
44 |
|
|
44 |
|
Other
payables and accrued expenses |
|
5,264 |
|
|
3,963 |
|
Total current
liabilities |
|
20,566 |
|
|
17,069 |
|
Other long-term
liabilities |
|
6,682 |
|
|
6,879 |
|
Total liabilities |
|
27,248 |
|
|
23,948 |
|
Total redeemable
convertible preferred stock |
|
23,834 |
|
|
18,034 |
|
Total ACM Research,
Inc. stockholders’ equity (deficit) |
|
5,793 |
|
|
(2,434 |
) |
Non-controlling
interests |
|
4,181 |
|
|
4,919 |
|
Total stockholders’
equity |
|
9,974 |
|
|
2,485 |
|
Total liabilities, redeemable convertible preferred stock
and stockholders’ equity |
$ |
61,056 |
|
$ |
44,467 |
|
|
|
|
|
|
|
|
|
ACM RESEARCH, INC. |
Unaudited Condensed Consolidated Statements of
Operations and Comprehensive Income (Loss) |
|
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
|
2017 |
|
|
2016 |
|
|
2017 |
|
|
2016 |
|
|
(in thousands, except share and per share data) |
Revenue |
$ |
4,891 |
|
|
$ |
4,904 |
|
|
$ |
19,314 |
|
|
$ |
13,026 |
|
Cost of revenue |
|
2,692 |
|
|
|
1,989 |
|
|
|
11,262 |
|
|
|
7,281 |
|
Gross profit |
|
2,199 |
|
|
|
2,915 |
|
|
|
8,052 |
|
|
|
5,745 |
|
Operating expenses,
net: |
|
|
|
|
|
|
|
|
|
|
|
Sales and
marketing |
|
1,036 |
|
|
|
709 |
|
|
|
3,619 |
|
|
|
2,527 |
|
Research
and development |
|
1,209 |
|
|
|
813 |
|
|
|
3,076 |
|
|
|
2,299 |
|
General
and administrative |
|
1,264 |
|
|
|
605 |
|
|
|
4,422 |
|
|
|
1,694 |
|
Total operating expenses,
net |
|
3,509 |
|
|
|
2,127 |
|
|
|
11,117 |
|
|
|
6,520 |
|
Income (loss) from operations |
|
(1,310 |
) |
|
|
788 |
|
|
|
(3,065 |
) |
|
|
(775 |
) |
Interest income |
|
2 |
|
|
|
7 |
|
|
|
7 |
|
|
|
13 |
|
Interest expense |
|
(33 |
) |
|
|
(67 |
) |
|
|
(197 |
) |
|
|
(118 |
) |
Equity in net income of
affiliates |
|
20 |
|
|
|
- |
|
|
|
20 |
|
|
|
- |
|
Non-operating income
(expense), net |
|
(239 |
) |
|
|
(35 |
) |
|
|
(531 |
) |
|
|
471 |
|
Income (loss) before income
taxes |
|
(1,560 |
) |
|
|
693 |
|
|
|
(3,766 |
) |
|
|
(409 |
) |
Income tax benefit
(expense) |
|
278 |
|
|
|
(132 |
) |
|
|
(471 |
) |
|
|
(59 |
) |
Net income (loss) |
|
(1,282 |
) |
|
|
561 |
|
|
|
(4,237 |
) |
|
|
(468 |
) |
Less: Net income (loss)
attributable to non-controlling interests |
|
(327 |
) |
|
|
199 |
|
|
|
(535 |
) |
|
|
(277 |
) |
Net income (loss)
attributable to ACM Research, Inc.... |
$ |
(955 |
) |
|
$ |
362 |
|
|
$ |
(3,702 |
) |
|
$ |
(191 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive income
(loss): |
|
|
|
|
|
|
|
|
|
|
|
Net
income (loss) |
$ |
(1,282 |
) |
|
$ |
561 |
|
|
$ |
(4,237 |
) |
|
$ |
(468 |
) |
Foreign
currency translation adjustment |
|
228 |
|
|
|
(66 |
) |
|
|
492 |
|
|
|
(199 |
) |
Comprehensive income (loss) |
|
(1,054 |
) |
|
|
495 |
|
|
|
(3,745 |
) |
|
|
(667 |
) |
Less: Comprehensive
income (loss) attributable to non‑controlling interests |
|
(237 |
) |
|
|
175 |
|
|
|
(347 |
) |
|
|
(351 |
) |
Total comprehensive income (loss)
attributable to ACM Research, Inc. |
$ |
(817 |
) |
|
$ |
320 |
|
|
$ |
(3,398 |
) |
|
$ |
(316 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) per
common shares: |
|
|
|
|
|
|
|
|
|
|
|
Basic |
$ |
(0.17 |
) |
|
$ |
0.07 |
|
|
$ |
(0.72 |
) |
|
$ |
(0.09 |
) |
Diluted |
$ |
(0.17 |
) |
|
$ |
0.05 |
|
|
$ |
(0.72 |
) |
|
$ |
(0.09 |
) |
Weighted average common
stocks outstanding used in computing per share amounts: |
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
5,581,637 |
|
|
|
2,108,324 |
|
|
|
5,148,255 |
|
|
|
2,077,115 |
|
Diluted |
|
5,581,637 |
|
|
|
3,372,505 |
|
|
|
5,148,255 |
|
|
|
2,077,115 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ACM RESEARCH,
INC.Reconciliation of GAAP to Non-GAAP Financial
Measures (Unaudited)
As described under “Use of Non-GAAP Financial Measures” above,
ACM presents non-GAAP gross margin, operating income (loss) 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 tables
reconcile gross margin, operating income (loss) and net income
(loss) to the related non-GAAP financial measures:
|
|
|
Three Months Ended September 30, |
|
2017 |
|
2016 |
|
Actual (GAAP) |
|
SBC |
|
Adjusted (Non-GAAP) |
|
Actual (GAAP) |
|
SBC |
|
Adjusted (Non-GAAP) |
|
(in thousands) |
Adjusted Gross
Margin: |
|
|
|
|
|
|
|
|
|
|
|
Revenue |
$ |
4,891 |
|
|
$ |
─ |
|
|
$ |
4,891 |
|
|
$ |
4,904 |
|
|
$ |
─ |
|
|
$ |
4,904 |
|
Cost of revenue |
|
(2,692 |
) |
|
|
5 |
|
|
|
(2,687 |
) |
|
|
(1,989 |
) |
|
|
3 |
|
|
|
(1,986 |
) |
Gross profit |
$ |
2,199 |
|
|
$ |
5 |
|
|
$ |
2,204 |
|
|
$ |
2,915 |
|
|
$ |
3 |
|
|
$ |
2,918 |
|
Gross margin |
|
45.0 |
% |
|
|
0.1 |
% |
|
|
45.1 |
% |
|
|
59.4 |
% |
|
|
0.1 |
% |
|
|
59.5 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
Operating Income (Loss): |
|
|
|
|
|
|
|
|
|
|
|
Gross profit |
$ |
2,199 |
|
|
$ |
5 |
|
|
$ |
2,204 |
|
|
$ |
2,915 |
|
|
$ |
3 |
|
|
$ |
2,918 |
|
Operating expenses |
|
(3,509 |
) |
|
|
338 |
|
|
|
(3,171 |
) |
|
|
(2,127 |
) |
|
|
(3 |
) |
|
|
(2,130 |
) |
Income (loss) from
operations |
$ |
(1,310 |
) |
|
$ |
343 |
|
|
$ |
(967 |
) |
|
$ |
788 |
|
|
$ |
─ |
|
|
$ |
788 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Net
Income (Loss): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
attributable to ACM Research, Inc. |
$ |
(955 |
) |
|
$ |
343 |
|
|
$ |
(612 |
) |
|
$ |
362 |
|
|
$ |
─ |
|
|
$ |
362 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended September 30, |
|
2017 |
|
2016 |
|
Actual (GAAP) |
|
SBC |
|
Adjusted (Non-GAAP) |
|
Actual (GAAP) |
|
SBC |
|
Adjusted (Non-GAAP) |
|
(in thousands) |
Adjusted Gross
Margin: |
|
|
|
|
|
|
|
|
|
|
|
Revenue |
$ |
19,314 |
|
|
$ |
─ |
|
|
$ |
19,314 |
|
|
$ |
13,026 |
|
|
$ |
─ |
|
|
$ |
13,026 |
|
Cost of revenue |
|
(11,262 |
) |
|
|
15 |
|
|
|
(11,247 |
) |
|
|
(7,281 |
) |
|
|
8 |
|
|
|
(7,273 |
) |
Gross profit |
$ |
8,052 |
|
|
$ |
15 |
|
|
$ |
8,067 |
|
|
$ |
5,745 |
|
|
$ |
8 |
|
|
$ |
5,753 |
|
Gross margin |
|
41.7 |
% |
|
|
0.1 |
% |
|
|
41.8 |
% |
|
|
44.1 |
% |
|
|
0.1 |
% |
|
|
44.2 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
Operating Income (Loss): |
|
|
|
|
|
|
|
|
|
|
|
Gross profit |
$ |
8,052 |
|
|
$ |
15 |
|
|
$ |
8,067 |
|
|
$ |
5,745 |
|
|
$ |
8 |
|
|
$ |
5,753 |
|
Operating expenses |
|
(11,117 |
) |
|
|
1,677 |
|
|
|
(9,440 |
) |
|
|
(6,520 |
) |
|
|
185 |
|
|
|
(2,130 |
) |
Income (loss) from
operations |
$ |
(3,065 |
) |
|
$ |
1,692 |
|
|
$ |
(1,373 |
) |
|
$ |
(775 |
) |
|
$ |
193 |
|
|
$ |
(582 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Net
Income (Loss): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
attributable to ACM Research, Inc. |
$ |
(3,702 |
) |
|
$ |
1,692 |
|
|
$ |
(2,010 |
) |
|
$ |
(191 |
) |
|
$ |
193 |
|
|
$ |
2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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