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.”
(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.
OutlookFor 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 HighlightsShipments. Total shipments in 2019 were $115 million, versus $95 million in 2018. Total shipments in the fourth quarter of 2019 were $25 million, versus $32 million in the fourth quarter of 2018 and $43 million in the third quarter of 2019. Total shipments include deliveries for revenue in the quarter, and deliveries of systems awaiting customer acceptance for potential revenue in future quarters.New Products. ACM completed delivery of a new stress-free polishing (SFP)/electropolishing and CMP integrated tool to a major packaging customer in the fourth quarter of 2019. This new product is designed to save more than 80% of slurry for metal polishing in 2.5D and 3D package applications.Expanded Global Sales Effort. In October 2019, ACM announced two new additions to its global sales team to help the Company penetrate potential customers in North America and Southeast Asia.ACM Shanghai Pre-IPO activities. In December 2019, ACM announced it had completed the second tranche of private equity investments in ACM Shanghai, with an additional $32.4 million invested. This brings the total to $60.2 million invested (at year-end exchange rates) for both tranches, representing an aggregate of 8.3% of redeemable non-controlling interests in ACM Shanghai. Plans remain on track to submit ACM Shanghai’s application for an initial public offering of its shares on the STAR market in the mid-2020 timeframe.Proposed R&D and Production Center in Shanghai’s Lingang Region. In December 2019, ACM Shanghai entered into a framework agreement to acquire land rights in the Lingang region of Shanghai, for the construction of a new R&D center and production facility on the land, located approximately 30 miles from ACM Shanghai’s headquarters in Zhangjiang.Financial SummaryRevenue. Revenue for 2019 was $107.5 million, up 44% from 2018, due primarily to an increase in revenue from single-wafer wet cleaning tools. Revenue for the fourth quarter of 2019 was $24.6 million, up 18% from the fourth quarter of 2018, due to an increased volume of tools shipped for revenue and higher prices associated with those tools.Gross margin. Gross margin for 2019 was 47.1%, versus 46.2% in 2018. Gross margin for the fourth quarter of 2019 was 50.6%, versus 49.5% in 2018. Gross margin was above 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. Operating expenses for 2019 were $32.9 million, compared to $28.0 million in 2018. The increase in operating expenses for 2019 was due to higher R&D, sales and marketing, and general and administrative expenses. Operating expenses in the fourth quarter of 2019 were $8.6 million, up from $7.7 million in the fourth quarter of 2018.Net income attributable to ACM Research, Inc. Net income for 2019 was $18.9 million, compared to $6.6 million in 2018. Net income in the fourth quarter of 2019 was $3.9 million, compared to $2.3 million in the fourth quarter of 2018. Tax items and effects of foreign-exchange fluctuations on operating results provided net benefits of $4.7 million and $1.7 million in 2019 and 2018, respectively, and $1.1 million and $0.3 million in the fourth quarters of 2019 and 2018, respectively.Net income per diluted share attributable to ACM Research, Inc. Net income per diluted share for 2019 was $0.99, compared to $0.37 in 2018. Non-GAAP net income per diluted share (excluding stock-based compensation) for 2019 was $1.17 compared to $0.55 in 2018. Tax items and effects of foreign-exchange fluctuations on operating results provided net benefits per share of $0.25 and $0.10 in 2019 and 2018, respectively, and $0.05 and 0.01 in the fourth quarters of 2019 and 2018, respectively.Cash and cash equivalents at year-end were $58.3 million, up from $47.3 million at the end of the third quarter of 2019 and $27.1 million at the end of 2018.Conference Call DetailsA 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.A recording of the webcast will be available on the investor page of the ACM website at for one week following the call.Use of Non-GAAP Financial MeasuresACM 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 StatementsInformation 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:

Reconciliation of GAAP to Non-GAAP Financial Measures

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