Market Overview

ACM Research Reports Second Quarter 2018 Results

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FREMONT, Calif., Aug. 07, 2018 (GLOBE NEWSWIRE) -- 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 second fiscal quarter ended June 30, 2018.

ACM Research's President and Chief Executive Officer Dr. David Wang commented, "Our business momentum accelerated in the second quarter, with record revenue, strong profitability, and new product development.  We also made excellent progress on the capacity expansion at our new Shanghai facility, which is intended to support demand for many quarters to come."

Dr. Wang continued, "We are thrilled with the market interest in our product offerings, as demonstrated by a purchase order from a new strategic DRAM customer during the quarter, and evaluation of our platforms by major global semiconductor manufacturers.  ACM Research remains focused on its mission to become a significant player by producing the most advanced cleaning tools for the next generation of semiconductor manufacturing."

Second Quarter Operating Highlights

  • Expanding Customer Base in Memory.  ACM Research received a purchase order for wafer-cleaning tools based on its proprietary Space Alternated Phase Shift (SAPS) technology from a leading manufacturer of DRAM memory chips in China.  The Company intends to ship the initial SAPS tool in the third quarter of 2018, with revenue recognition in future periods upon qualification and acceptance.  This platform can also support TEBO capability to enable the megasonic cleaning of pattern wafers.

  • Capacity additions to support our growth objectives.  During the second quarter, ACM Research completed the first phase of its capacity expansion project at an additional facility in Shanghai, China.  The $1.5 million investment by ACM Research has provided approximately 50,000 additional square feet of production space intended to support more than $250 million of revenue, when fully-tooled.  Initial production is expected to begin in the third quarter of 2018, with a gradual ramp up in future quarters.

  • Strengthens Executive Leadership Team.  The Company announced the appointment of Mark McKechnie as Vice President of Finance.  Mr. McKechnie brings more than 25 years of experience in product management, corporate finance, and public equity markets, and will lead the Company's Financial Planning and Analysis (FP&A), Investor Relations, Strategy, and Capital Markets efforts. 

Financial Summary

All figures refer to the second quarter of 2018, unless noted otherwise.  All comparisons are with the second quarter of 2017, unless otherwise noted.

  Three Months Ended June 30,
  GAAP   Non-GAAP(1)
  2018   2017   2018   2017
  (dollars in thousands)
Revenue $ 20,873     $ 8,763     $ 20,873     $ 8,763  
Gross margin(2)   41.8 %     39.4 %     41.8 %     39.4 %
Income (loss) from operations(2) $ 2,331     $ (202 )   $ 2,515     $ 312  
Net income (loss) attributable to ACM Research, Inc.(2) $ 3,215     $ (658 )   $ 3,399     $ (144 )
Basic EPS $ 0.20     $ (0.13 )   $ 0.21     $ (0.03 )
Diluted EPS $ 0.18     $ (0.13 )   $ 0.19     $ (0.03 )


  Six Months Ended June 30,
  GAAP   Non-GAAP(1)
  2018   2017   2018   2017
  (dollars in thousands)
Revenue $ 30,616     $ 14,423     $ 30,616     $ 14,423  
Gross margin(2)   45.2 %     40.6 %     45.3 %     40.6 %
Income (loss) from operations(2) $ 427     $ (1,755 )   $ 2,787     $ (407 )
Net income (loss) attributable to ACM Research, Inc.(2)    $ 435     $ (2,747 )   $ 2,795     $ (1,399 )
Basic EPS $ 0.03     $ (0.56 )   $ 0.18     $ (0.28 )
Diluted EPS $ 0.02     $ (0.56 )   $ 0.16     $ (0.28 )

________________________
(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 increased 138.2% to $20.9 million, due to increased volume of tools shipped, coupled with higher prices associated with the higher value of the equipment sold.

  • Gross margin was 41.8%, compared to 39.4% in the second quarter of 2017.  The improvement in gross margin was due to better absorption of fixed costs on higher product sales.  Gross margin was within the range of 40.0% to 45.0% set forth in the Company's long-term business model.  The Company expects gross margin to vary from period to period due to a variety of factors, such as sales volume and product mix.

  • Operating expenses were $6.4 million.  Non-GAAP operating expense, which removes stock-based compensation, was $6.2 million, up 98%.  Non-GAAP operating expenses as a percent of revenue decreased to 30%, versus 36% in the second quarter of 2017.

  • Net income attributable to ACM Research, Inc. was $3.2 million.  Non-GAAP net income was $3.4 million, versus a non-GAAP net loss of $0.1 million in the second quarter of 2017.

  • Cash and equivalents at quarter-end were $17.4 million, up from $15.2 million at the end of last quarter.

Outlook

The Company has raised its full year 2018 revenue guidance to $70 million.  This represents an increase of $5 million versus the Company's previous 2018 revenue guidance. 

Conference Call Details

A conference call to discuss results will be held today 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 5172047.

    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 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 (loss) and net 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 "Second Quarter Operating Highlights—Capacity additions to support our growth objectives" with respect to revenue expected to be generated from the Company's new facility in Shanghai, China, under "Financial Summary—Gross Margin" with respect to the expected range of gross margin for the foreseeable future, and under "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 adve

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