ACMR - ACM Research Reports Third Quarter 2019 Results

FREMONT, Calif., Nov. 06, 2019 (GLOBE NEWSWIRE) -- ACM Research, Inc. (“ACM” 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 third fiscal quarter ended September 30, 2019.

ACM’s President and Chief Executive Officer Dr. David Wang commented, "We delivered record revenue and shipments, demonstrating our ability to scale production to major customers. We had several important deliveries in the quarter, including a “first tool” to our newest customer, an emerging China-based DRAM manufacturer, and several ECP AP tools to a major packaging customer. With a successful U.S. capital raise, we now have $47 million in cash, which puts us in a good position to support our growth plans.”

Dr. Wang continued, “Our lead customer for Tahoe has confirmed good cleaning performance and significant sulfuric acid savings in a production environment. Development work continues on TEBO, and significant technical progress has been made to meet customer requirements for the combined removal of big and small particles for 3D-patterned structures without damage. Finally, we expanded our global sales team, with key hires in North America and Southeast Asia, and we are in advanced negotiations to acquire new land in Shanghai to support our longer term production plans.”

Recent Operating Highlights

• Shipments.  Total shipments in the third quarter of 2019 were $43 million, compared to $33 million last quarter and $32 million in the third quarter of 2018.  Shipments include deliveries for revenue in the quarter and deliveries of systems awaiting customer acceptance for potential revenue in future quarters.
  
  
• SAPS-V “First Tool” delivered to new DRAM customer.  ACM delivered a SAPS-V single wafer cleaning tool to an emerging manufacturer of DRAM memory chips in China in the third quarter of 2019, with revenue recognition upon qualification and acceptance.
  
  
• Equity Raise.  In August 2019, ACM completed a successful US capital raise, raising approximately $23 million in net proceeds. This transaction provides an important capital infusion, enabling ACM to further execute its growth strategy, support customer development efforts, and strengthen its balance sheet.

Financial Summary

(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.” Non-GAAP financial measures (excluding revenue) exclude stock-based compensation.

The following figures refer to the third quarter of 2019 compared with the third quarter of 2018, unless otherwise noted.

• Revenue increased 44.2% to $33.4 million, due to an increased volume of tools shipped for revenue and higher prices associated with these tools.  Revenue for the quarter was entirely driven by repeat shipments, with no acceptances contributing to revenue for the period. 
  
  
• Gross margin was 48.6%, compared to 44.4% in the third quarter of 2018.  Gross margin was above the high-end of the range of 40.0% to 45.0% set forth in the Company’s long-term business model.  The strong gross margin performance was due to a higher mix of higher-margin products. The Company expects gross margin to continue to vary from period to period due to a variety of factors, such as sales volume and product mix.
  
  
• Operating expenses were $9.2 million, an increase of 34%.  GAAP operating expenses as a percent of revenue decreased to 27.6%, compared to 29.7% in the third quarter of 2018.  Non-GAAP operating expenses, which remove stock-based compensation, were $7.8 million, an increase of 20.4%.  Non-GAAP operating expenses as a percent of revenue decreased to 23.4%, compared to 28.0% in the third quarter of 2018.
  
  
• Net income attributable to ACM Research, Inc. was $8.8 million, compared to $3.9 million in the third quarter of 2018.  Non-GAAP net income attributable to ACM Research, Inc. was $10.3 million, compared to $4.3 million in the third quarter of 2018. Third quarter net income attributable to ACM Research, Inc included currency fluctuations, which contributed approximately $1.7 million (adjusted for a 10% normalized tax rate), and a one-time tax benefit from a reduced tax valuation, which contributed approximately $1.4 million.
  
  
• Net income attributable to ACM Research, Inc. per diluted share was $0.45, compared to $0.21 in the third quarter of 2018.  Non-GAAP net income attributable to ACM Research, Inc. per diluted share was $0.53, compared to $0.23 in the third quarter of 2018. 
  
  
• Cash and equivalents at quarter-end were $47.3 million, up from $27.6 million at the end of the second quarter of 2019 and $18.2 million at the end of the third quarter of 2018.

Outlook

For fiscal year 2019, the Company continues to expect revenue to be approximately $105 million.

Conference Call Details

A conference call to discuss results will be held on Thursday, November 7, 2019, at 8:00 a.m. Eastern Time (9:00 p.m. China Time). Dial-in details for the call are as follows.  Please reference conference ID 9483075.

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 expenses, operating income, net income, 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.

Forward-Looking Statements

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: 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, regulatory 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 Research, Inc. The ACM logo, SAPS, and TEBO are trademarks of ACM Research, Inc. For convenience, these trademarks appear in this press release without ™ symbols, but that practice does not mean that ACM will not assert, to the fullest extent under applicable law, its rights to the trademarks. This press release also contains other companies’ trademarks, registered marks and trade names, which are the property of those companies.

For investor and media inquiries, please contact:

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 (loss) attributable to ACM Research, Inc. 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) attributable to ACM Research, Inc. to the related non-GAAP financial measures: