ACM Research Reports Fourth Quarter and Fiscal Year 2019 Results
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ACM Research Reports Fourth Quarter and Fiscal Year 2019 Results

FREMONT, Calif., March 18, 2020 (GLOBE NEWSWIRE) -- ACM Research, Inc. (“ACM” or the “Company”) (NASDAQ:ACMR), a leading supplier of wafer cleaning technologies for advanced semiconductor devices, today reported financial results for its fourth quarter and fiscal year ended December 31, 2019.

ACM’s President and Chief Executive Officer Dr. David Wang commented, “2019 was a remarkable year for ACM Research as we expanded our customer base, launched new products, and ramped production capacity at our second factory. We delivered 44% revenue growth, expanded operating margins, and generated more than $9 million in cash flow from operations. We grew our cash balance to $58 million at year-end, with an additional $60 million of proceeds held in restricted cash from the private equity funding into our ACM Shanghai subsidiary.”

Dr. Wang continued, “Our operating plans for 2020 anticipate solid growth from our core SAPS product offering, and meaningful contributions from our new Ultra C Tahoe, TEBO, ECP AP and ECP MAP products. The COVID-19 outbreak is impacting our first quarter results, but to date has not changed our outlook for the year. We expect business activities to normalize as we progress through the year, with visibility now extending into our third quarter. Regardless of the pace of the recovery, we remain committed to becoming a major player in the semiconductor equipment market. We are investing in R&D to support current and new products, we are growing our global sales team to penetrate new customers, and we are in advanced stages in our plans to expand our long-term production capacity.”

 Three Months Ended December 31,
 GAAP Non-GAAP(1)
  2019   2018     2019  2018 
  
 (dollars in thousands, except per share amounts)
Revenue$24,608  $20,848   $ 24,608     $ 20,848 
Gross margin(2) 50.6%  49.5%  50.7%  49.6%
Income from operations(2)$  3,849  $  2,640  $  4,502  $  3,232 
Net income attributable to ACM Research, Inc.(2)$  3,944  $  2,286  $  4,597  $  2,878 
Basic EPS(2)$  0.22  $  0.14  $  0.25  $  0.18 
Diluted EPS(2)$  0.19  $  0.13  $  0.23  $  0.16 


   
 Years Ended December 31, 
 GAAP Non-GAAP(1) 
  2019  2018  2019 2018 
   
 (dollars in thousands, except per share amounts) 
Revenue$107,524 $74,643 $107,524 $74,643 
Gross margin(2) 47.1%  46.2%  47.3%   46.2%
Income from operations(2)$  17,791 $  6,471 $  21,363 $  9,834 
Net income (loss) attributable to ACM Research, Inc.(2)$  18,894 $  6,574 $  22,466 $  9,937 
Basic EPS(2)$  1.12 $  0.42 $  1.34 $  0.63 
Diluted EPS(2)$  0.99 $  0.37 $  1.17 $  0.55 

(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.

Outlook

For fiscal year 2020, the Company expects revenue to be in the range of $130 million to $150 million, unchanged from its January 13, 2020 announcement. This view assumes the COVID-19 situation continues to improve in China and stabilizes in the coming months on a global basis.

Operating Highlights

Financial Summary

Conference Call Details

A conference call to discuss results will be held on Thursday, March 19, 2020, at 8:00 a.m. Eastern Time (8:00 p.m. China Time). Dial-in details for the call are as follows. Please reference conference ID 7487329.

  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 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, and basic and diluted earnings per share as supplemental measures to GAAP financial measures regarding its 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 third paragraph 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 China and globally: 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 Research’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 Research, Inc. The ACM logo is a trademark of ACM Research, Inc. For convenience, this trademark appears in this release without a ™ symbol, but that practice does not mean that ACM will not assert, to the fullest extent under applicable law, its rights to the trademark.

For investor and media inquiries, please contact:

 In the United States: The Blueshirt Group   
   Ralph Fong   
   +1 (415) 489-2195   
    Email Contact   
       
 In China: The Blueshirt Group Asia   
   Gary Dvorchak, CFA   
   +86 (138) 1079-1480   
    Email Contact   
       


  
ACM RESEARCH, INC. 
Condensed Consolidated Balance Sheets 
  
   
 December 31, 2019 December 31, 2018 
 (Unaudited) 
 (In thousands, except share and per share data) 
Assets    
Current assets:    
Cash and cash equivalents$58,261  $27,124  
Restricted cash 59,598    
Accounts receivable, less allowance for doubtful accounts of $0 as of December 31, 2019 and $0 as of December 31, 2018 31,091   24,608  
Other receivables 2,603   3,547  
Inventories 44,796   38,764  
Prepaid expenses 2,047   1,985  
  Total current assets 198,396   96,028  
Property, plant and equipment, net 3,619   3,708  
Operating lease right-of-use assets, net 3,887   -  
Intangible assets, net 344   274  
Deferred tax assets 5,331   1,637  
Long-term investments 5,934   1,360  
Other long-term assets 192   40  
  Total assets 217,703   103,047  
Liabilities, Redeemable Non-controlling Interest and Stockholders’ Equity    
Current liabilities:    
  Short-term borrowings 13,753   9,447  
Accounts payable 13,262   16,673  
  Advances from customers 9,129   8,417  
Income taxes payable 3,129   1,193  
  Other payables and accrued expenses 12,874   10,410  
  Current portion of operating lease liability 1,355   -  
  Total current liabilities 53,502   46,140  
Long-term operating lease liability 2,532   -  
  Other long-term liabilities 4,186   4,583  
  Total liabilities 60,220   50,723  
Commitments and contingencies     
Redeemable Non-controlling interests 60,162   -  
Stockholders’ equity:    
Common stock – Class A, par value $0.0001: 50,000,000 shares authorized as of September 30, 2019 and December 31, 2018; 16,179,058 shares issued and outstanding as of December 31, 2019 and 14,110,315 shares issued and outstanding as of December 31, 2018 2   1  
Common stock–Class B, par value $0.0001: 2,409,738 shares authorized as of September 30, 2019 and December 31, 2018; 1,862,608 shares issued and outstanding as of September 30, 2019 and 1,898,423 shares issued and outstanding as of December 31, 2018   -     -  
Additional paid in capital 83,487   56,567  
Accumulated surplus (deficit) 15,507   (3,387) 
Accumulated other comprehensive loss (1,675)  (857) 
Total stockholders’ equity 97,321   52,324  
Total liabilities, redeemable non-controlling interests, and stockholders' equity$217,703  $103,047  
     


ACM RESEARCH, INC. 
Condensed Consolidated Statements of Operations and Comprehensive Income 
  
 Three Months Ended December 31,  Twelve Months Ended December 31,  
  2019   2018   2019   2018  
 (Unaudited) (Unaudited) 
 ( In thousands, except share and per share data) ( In thousands, except share and per share data) 
Revenue$24,608  $20,848  $107,524  $74,643  
Cost of revenue 12,165   10,532   56,870   40,194  
  Gross profit 12,443   10,316   50,654   34,449  
Operating expenses:        
  Sales and marketing 3,223   1,845   11,902   9,611  
  Research and development 3,302   4,156   12,900   10,380  
  General and administrative 2,069   1,675   8,061   7,987  
  Total operating expenses, net 8,594   7,676   32,863   27,978  
  Income from operations 3,849   2,640   17,791   6,471  
Interest income 205   9   333   29  
Interest expense (207)  (134)  (745)  (498) 
Other income , net (739)  42   1,393   1,255  
Equity income (loss) in net income of affiliates (92)  (112)  168   123  
  Income before income taxes 3,016   2,445   18,940   7,380  
Income tax (expense ) benefit 1,185   (159)  518   (806) 
  Net income 4,201   2,286   19,458   6,574  
Less: Net income attributable to redeemable non-controlling interest 257   -   564   -  
  Net income  attributable to ACM Research, Inc.$3,944  $2,286  $18,894  $6,574  
Comprehensive income:        
  Net  income 4,201   2,286   19,458   6,574  
  Foreign currency translation adjustment 2,003   98   (899)  (979) 
  Total comprehensive income 6,204   2,384   18,559   5,595  
Less: Comprehensive income attributable to redeemable non-controlling interests 176   -   483   -  
  Total comprehensive income attributable to ACM Research, Inc. $6,028  $2,384  $18,076  $5,595  
         
Net income attributable to ACM Research, Inc. per common share :        
  Basic$0.22  $0.14  $1.12  $0.42  
  Diluted$0.19  $0.13  $0.99  $0.37  
         
Weighted average common shares outstanding used in computing per share amounts: 
  Basic 18,043,007   16,004,781   16,800,623   15,788,460  
  Diluted 20,373,336   18,115,071   19,135,497   17,912,105  
         

ACM RESEARCH, INC.
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 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 to the related non-GAAP financial measures:

 Three Months Ended December 31, 
  2019  2018  
 ActualSBCAdjustedActualSBCAdjusted 
(GAAP)(Non-GAAP)(GAAP)(Non-GAAP) 
 (In thousands) 
        
Revenue$24,608 $- $24,608 $20,848 $- $20,848  
Cost of revenue (12,165) (37) (12,128) (10,532) (27) (10,505) 
Gross profit 12,443  (37) 12,480  10,316  (27) 10,343  
Operating expenses:       
Sales and marketing (3,223) (76) (3,147) (1,845) (5) (1,840) 
Research and development (3,302) (154) (3,148) (4,156) (124) (4,032) 
General and administrative (2,069) (386) (1,683) (1,675) (436) (1,239) 
Income from operations$3,849 $(653)$4,502 $2,640 $(592)$3,232  
Net income attributable to ACM Research, Inc.$3,944 $(653)$4,597 $2,286 $(592)$2,878  
        
 Year Ended December 31,  
  2019  2018  
 ActualSBCAdjustedActualSBCAdjusted 
(GAAP)(Non-GAAP)(GAAP)(Non-GAAP) 
 (In thousands) 
        
Revenue$107,524 $- $107,524 $74,643  $74,643  
Cost of revenue (56,870) (250) (56,620) (40,194) (71) (40,123) 
Gross profit 50,654  (250) 50,904  34,449  (71) 34,520  
Operating expenses:       
Sales and marketing (11,902) (328) (11,574) (9,611) (120) (9,491) 
Research and development (12,900) (1,093) (11,807) (10,380) (255) (10,125) 
General and administrative (8,061) (1,901) (6,160) (7,987) (2,917) (5,070) 
Income from operations$17,791 $(3,572)$21,363 $6,471 $(3,363)$9,834  
Net income attributable to ACM Research, Inc.$18,894 $(3,572)$22,466 $6,574 $(3,363)$9,937  
        

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