ACM Research Reports Fourth Quarter and Fiscal Year 2017 Results
March 05 2018 - 7:00AM
ACM Research, Inc. (“ACM Research” or the “Company”) (NASDAQ:ACMR),
a provider of single-wafer wet cleaning equipment used by
manufacturers of advanced semiconductors, today reported financial
results for its fourth quarter and fiscal year ended December 31,
2017.
ACM Research’s President and Chief Executive Officer Dr. David
Wang stated, “We delivered solid fourth quarter top-line results,
topping off a strong 2017 for us. We achieved our 2017
financial goals with revenue growing 33%. Our success this
year was a result of strong execution, differentiated technology,
and continued expansion of the customer base. We enter 2018
on a high note with a strengthened leadership position in our
targeted segment of the semiconductor manufacturing equipment
space. We are optimistic about our business outlook, and look
forward to further building upon our success in the years
ahead.”
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 and January 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 $65 million.
Conference Call Details
A conference call to discuss fourth quarter and fiscal year 2017
results will be held today at 8:00 a.m. U.S Eastern Time (9:00 p.m.
China Time). Dial-in details for the call are as follows.
Please reference conference ID 9376915.
|
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 Research presents non-GAAP gross margin, operating income
and net income (loss) as supplemental measures to GAAP financial
measures regarding ACM Research’s operational performance. These
supplemental measures exclude the impact of stock-based
compensation, which ACM Research 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 Research believes these non-GAAP financial measures are
useful to investors in assessing its operating performance. ACM
Research 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 Research also believes it is in the best
interests of investors for ACM Research to provide this non-GAAP
information.
While ACM Research 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 Research’s consolidated financial statements prepared in
accordance with GAAP.
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 ACM Research due to its substantial
non-U.S. customer and supplier base and its substantial non-U.S.
manufacturing operations. ACM Research cannot guarantee any future
results, levels of activity, performance or achievements. ACM
Research expressly disclaims any obligation to update
forward-looking statements after the date of this press
release.
About ACM Research, Inc.
ACM Research 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 Research, Inc. SAPS, TEBO 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. |
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 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ACM RESEARCH,
INC.Reconciliation of GAAP to Non-GAAP Financial
Measures
As described under “Use of Non-GAAP Financial Measures” above,
ACM Research 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 tables
reconcile gross margin, operating income and net income (loss) to
the related non-GAAP financial measures:
|
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 |
|
|
|
|
|
|
|
|
|
ACM Research (NASDAQ:ACMR)
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ACM Research (NASDAQ:ACMR)
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