FREMONT, May 06, 2020 (GLOBE NEWSWIRE via COMTEX) -- ACM Research, Inc. ("ACM" or the "Company") /zigman2/quotes/205487080/composite ACMR +1.68% , a leading supplier of wafer cleaning technologies for advanced semiconductor devices, today reported financial results for its first fiscal quarter ended March 31, 2020.
ACM's President and Chief Executive Officer Dr. David Wang commented, "I am pleased with our first quarter results. With the COVID-19 pandemic partially impacting operations, we focused our efforts on firming up the year, achieving customer acceptances for first tools, and the introduction of new products. We remain optimistic about our outlook for the year, with visibility extending into the fourth quarter."
Dr. Wang continued, "We are executing our strategy, and are committed to becoming a major player in the semiconductor equipment market. We are investing in R&D to enhance our product portfolio, we have added key sales resources to penetrate new customers in new geographies, and we are moving forward with plans to expand our long-term production capacity."
Three Months Ended March 31, GAAP Non-GAAP(1) 2020 2019 2020 2019 (dollars in thousands, except per share data) Revenue $ 24,348 $ 20,479 $ 24,348 $ 20,479 Gross margin(2) 42.0 % 43.1 % 42.2 % 43.2 % Income from operations(2) $ 1,218 $ 2,251 $ 1,907 $ 2,995 Net income attributable to ACM Research, Inc.(2) $ 1,705 $ 1,857 $ 2,394 $ 2,601 Basic EPS(2) $ 0.09 $ 0.12 $ 0.13 $ 0.16 Diluted EPS(2) $ 0.08 $ 0.10 $ 0.11 $ 0.14
(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.
For fiscal year 2020, the Company continues to expect revenue to be in the range of $130 million to $150 million. This view assumes the COVID-19 situation continues to improve in China and stabilizes in the coming months on a global basis.
Q1 Operating Highlights and Recent Announcements
-- Shipments. Total shipments in the first quarter of 2020 were $12 million, versus $14 million in the first quarter of 2019 and $25 million in the fourth 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.
-- Ultra Furnace Product Introduced. On April 28, 2020, ACM introduced the Ultra Furnace. The initial system was developed for low-pressure chemical vapor deposition (LPCVD), and is intended to serve as a base platform for other dry processing applications, including oxidation, annealing processes, and atomic layer deposition (ALD). This achievement is the result of a two-year collaboration between ACM's R&D teams located in China and Korea.
-- Broadened product offering with a suite of Semi-Critical Cleaning Systems. On May 6, 2020, ACM announced a suite of three Ultra(TM) C wet cleaning tools: the "Ultra C b" for backside clean, "Ultra C wb" automated wet bench, and "Ultra C s" scrubber for front and backside processes.
-- Expanded Global Sales Effort. In April 2020, ACM announced the appointment of Jim Straus as Vice President of Sales for North America to accelerate the effort to expand adoption of ACM's core technologies at major semiconductor companies in North America.
-- ACM Shanghai Pre-IPO activities. Plans remain on track to submit ACM Shanghai's application for an initial public offering of its shares on the Shanghai Stock Exchange's STAR Market in mid-2020, and to price the transaction by year-end pending timely approvals.
-- 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. The Company expects to finalize a definitive agreement for land rights for the proposed site in the near future, followed by plans to start construction activities in late 2020, with initial production activities to commence in late 2022.
The following figures refer to the first quarter of 2020, unless noted otherwise. All comparisons are with the first quarter of 2019, unless otherwise noted.
-- Revenue was $24.3 million, up 18.9%, reflecting an increase in revenue from single wafer wet cleaning and other front-end processing equipment, offset in part by a decrease in revenue from back-end wafer assembly and packaging equipment.
-- Gross margin was 42.0%, compared to 43.1% in the first quarter of 2019. 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 $9.0 million, an increase of 37%. Non-GAAP operating expenses, which remove stock-based compensation, were $8.4 million, up 43%. Non-GAAP operating expenses as a percent of revenue increased to 34%, compared to 29% in the first quarter of 2019. Higher spending on new products and sales-related activities, preparation for the STAR Market IPO, and COVID-19 related items contributed to the increase from the prior-year period.
-- Operating income of $1.2 million declined 46% due to the increase in operating expenses, which represented a substantial investment in the development and marketing of new product introductions.
-- Net income attributable to ACM Research, Inc. was $1.7 million, compared to $1.9 million in the first quarter of 2019. Non-GAAP net income attributable to ACM Research, Inc. was $2.4 million, compared to $2.6 million in the first quarter of 2019. Tax expense versus a normalized 12% tax-rate, and the effects of foreign-exchange fluctuations on operating results provided a net benefit of $0.6 million in the first quarter of 2020, and a net expense of $0.1 million in the first quarter of 2019.
-- Net income per diluted share attributable to ACM Research, Inc. was $0.08, versus $0.10 in the first quarter of 2019. Non-GAAP net income per diluted share attributable to ACM Research, Inc. was $0.11, versus $0.14 in the first quarter of 2019. Tax expense versus a normalized 12% tax rate, and the effects of foreign-exchange fluctuations on operating results provided a net benefit of $0.03 per share in the first quarter of 2020, and a net expense of $0.01 in the first quarter of 2019.
-- Cash and equivalents at quarter-end were $52.3 million, versus $58.3 million at the end of the fourth quarter of 2019 and $27.4 million at the end of the first quarter of 2019. The quarter-on-quarter decline was primarily due to the reduction of short-term borrowings, net of positive cash flow from operations and other items during the quarter.
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