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ACM Research Reports Fourth Quarter and Fiscal Year 2023 Results

FREMONT, Calif., Feb. 28, 2024 (GLOBE NEWSWIRE) -- ACM Research, Inc. (“ACM”) (NASDAQ: ACMR), a leading supplier of wafer processing solutions for semiconductor and advanced wafer-level packaging applications, today reported financial results for its fourth quarter and fiscal year ended December 31, 2023.

“2023 was another pivotal year in ACM’s mission to become a major supplier to the global semiconductor industry,” said ACM’s President and Chief Executive Officer, Dr. David Wang. “We grew revenue by 43%, well above the market growth of wafer fab equipment (WFE) spending in mainland China. We delivered improved operating margins, and made great progress with new products, new customers and plans to expand our global production capacity.”

Dr. Wang continued, “We believe these results underscore the strength of ACM’s multi-product portfolio and our growing customer base. We have captured market share, with our leading cleaning products witnessing 48% growth. Moreover, our ECP and furnace products grew by 33%, surpassing the $100 million revenue milestone. Additionally, we have made notable strides in penetrating international markets. A highlight of our fourth quarter was receiving technical qualification for our SAPS production tool from a leading U.S.-based semiconductor manufacturer, which we believe may set the stage for additional orders and further expansion in the future.”

Dr. Wang concluded, “As we look ahead to 2024, we expect another year of growth driven by mature node investment in China, new product cycles, development progress with multiple customers for our Track and PECVD tools, and initial revenue contribution from international markets in the U.S., Europe and Korea.”

 Three Months Ended December 31,
 GAAP Non-GAAP(1)
 2023
 2022
 2023
 2022
 (dollars in thousands, except EPS)
Revenue$170,321  $108,542  $170,321  $108,542 
Gross margin 46.4%   49.6%   46.8%   49.7% 
Income from operations$23,374  $16,670  $36,046  $19,164 
Net income attributable to ACM Research, Inc.$17,700  $11,809  $28,681  $12,596 
Basic EPS$0.29  $0.20  $0.47  $0.21 
Diluted EPS$0.26  $0.18  $0.43  $0.19 


 Year Ended December 31,
 GAAP Non-GAAP(1)
 2023
 2022
 2023
 2022
 (dollars in thousands, except EPS)
Revenue$557,723  $388,832  $557,723  $388,832 
Gross margin 49.5%   47.2%   49.8%   47.4% 
Income from operations$95,839  $59,035  $123,177  $66,765 
Net income attributable to ACM Research, Inc.$77,349  $39,263  $107,424  $54,848 
Basic EPS$1.29  $0.66  $1.79  $0.93 
Diluted EPS$1.16  $0.59  $1.63  $0.83 


(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 exclude stock-based compensation and, with respect to net income (loss) attributable to ACM Research, Inc. and basic and diluted earnings pershare, also exclude unrealized loss on short-term investments.

Outlook

ACM is providing its revenue guidance range of $650 million to $725 million for fiscal year 2024. This expectation is based on ACM management’s current assessment of the continuing impact from international trade policy, together with various expected spending scenarios of key customers, supply chain constraints, and the timing of acceptances for first tools under evaluation in the field, among other factors.

Operating Highlights and Recent Announcements

  • Shipments. Total shipments in 2023 were $597 million, versus $539 million in 2022. Total shipments in the fourth quarter of 2023 were $140 million, versus $197 million in the fourth quarter of 2022. Total shipments include deliveries for revenue in the quarter and deliveries of first tool systems awaiting customer acceptance for potential revenue in future quarters.
  • Received Qualification for SAPS Tool from US Manufacturer. ACM announced that its SAPS cleaning tool has been qualified for revenue from a large US manufacturer in the fourth quarter of 2023. An Ultra C b backside cleaning and bevel etch tool is expected to be delivered to this customer in the second quarter of 2024.
  • Proposed Private Offering. ACM’s principal operating subsidiary, ACM Research (Shanghai), Inc. (“ACM Shanghai”) (SSEC: 688082.SS), announced that it intends to offer up to 43.6 million of its ordinary shares, subject to market conditions, the approval of ACM Shanghai’s shareholders, completion of the review process by the Shanghai Stock Exchange, completion of the registration process by the China Securities Regulatory Commission, and other factors, in a private offering to qualified buyers, in compliance with the requirements of the China Securities Regulatory Commission (the “Private Offering”). The gross proceeds to ACM Shanghai of the proposed Private Offering of up to RMB 4.5 billion ($625 million) are intended to be used for research and development, capital expenditures and working capital. If consummated in full, we estimate that ACM’s equity interest in ACM Shanghai would decline from 82.1% to approximately 74.6%.

Full Year 2023 Financial Summary

Unless otherwise noted, the following figures refer to the full year of 2023 and comparisons are with the full year of 2022.

  • Revenue was $557.7 million, up 43.4%, reflecting higher sales of single wafer cleaning, Tahoe and semi-critical cleaning equipment, electro-chemical plating (“ECP”) (front-end and packaging), furnace and other technologies, and Advance packaging (excluding ECP), and services and spares. We attribute the revenue growth to continued investments in mature process nodes by current and new mainland China-based customers amidst an ongoing target to achieve a greater share of the global semiconductor market, incremental contribution from newly introduced tools, and additional penetration of our product portfolio across our customer base.
  • Gross margin was 49.5%, up from 47.2%. Non-GAAP gross margin, which excludes stock-based compensation, was 49.8%, up from 47.4%. Gross margin exceeded the range of 40% to 45% reflected in ACM’s long-term business model. The increase in gross margin was due to a favorable product mix, improved gross margins for specific product lines, and a favorable impact from currency fluctuations. ACM expects gross margin to vary from period to period due to a variety of factors, such as product mix, currency impacts and sales volume.
  • Operating expenses were $180.4 million, an increase of 44.8%. Non-GAAP operating expenses, which exclude the effect of stock-based compensation, were $154.4 million, up 31.6%. Operating expenses as a percent of revenue increased to 32.3% from 32.0%. Non-GAAP operating expenses as a percent of revenue decreased to 27.7% from 30.2%.
  • Operating income was $95.8 million, up from $59.0 million. Non-GAAP operating income, which excludes the effect of stock-based compensation, was $123.2 million, up from $66.8 million.
  • Unrealized loss on short-term investments was $2.7 million. The loss reflects the change in market value of the investments by ACM Shanghai in short-term investments. The value is marked-to-market quarterly and is excluded in the non-GAAP financial metrics.
  • Realized gain from sale of short-term investments was $9.0 million versus $1.1 million.
  • Income tax expense was $19.4 million versus $16.8 million. As a result of a change in Section 174 of the U.S. Internal Revenue Code of 1986, as amended, that became effective on January 1, 2022, ACM’s effective tax rate remains elevated, due primarily to the requirement to capitalize and amortize previously deductible research and experimental expenses.
  • Net income attributable to ACM Research, Inc. was $77.3 million, compared to net income of $39.3 million. Non-GAAP net income attributable to ACM Research, Inc., which excludes the effect of stock-based compensation and unrealized loss on short-term investments, was $107.4 million, compared to non-GAAP net income of $54.8 million.
  • Net income per diluted share attributable to ACM Research, Inc. was $1.16, compared to $0.59. Non-GAAP net income per diluted share, which excludes the effect of stock-based compensation and unrealized loss on short-term investments, was $1.63, compared to $0.83.
  • Cash and cash equivalents were $182.1 million at December 31, 2023, versus $207.1 million at September 30, 2023. Cash and cash equivalents, plus restricted cash and time deposits were $304.5 million at December 31, 2023, versus $326.5 million at September 30, 2023.

Fourth Quarter 2023 Financial Summary

Unless otherwise noted, the following figures refer to the fourth quarter of 2023 and comparisons are with the fourth quarter of 2022.

  • Revenue was $170.3 million, up 56.9%, reflecting higher sales of single wafer cleaning, Tahoe and semi-critical cleaning equipment, ECP (front-end and packaging), furnace and other technologies, and Advance packaging (excluding ECP), and services and spares.
  • Gross margin was 46.4% versus 49.6%. Non-GAAP gross margin, which excludes stock-based compensation, was 46.8% versus 49.7%. Gross margin exceeded the range of 40% to 45% reflected in the ACM’s long-term business model. ACM expects gross margin to vary from period to period due to a variety of factors, such as product mix, currency impacts and sales volume.
  • Operating expenses were $55.7 million, an increase of 50.0%. Non-GAAP operating expenses, which exclude the effect of stock-based compensation, were $43.6 million, up 25.4%. Operating expenses as a percent of revenue decreased to 32.7% from 34.2%. Non-GAAP operating expenses as a percent of revenue increased to 25.6% from 32.0%.
  • Operating income was $23.4 million, up from $16.7 million. Non-GAAP operating income, which excludes the effect of stock-based compensation, was $36.0 million, up from $19.2 million.
  • Unrealized gain on short-term investments was $1.7 million. The gain reflects the change in market value of the investments by ACM Shanghai in short-term investments. The value is marked-to-market quarterly and is excluded in the non-GAAP financial metrics.
  • Income tax expense was $8.1 million, compared to $2.7 million.
  • Net income attributable to ACM Research, Inc. was $17.7 million, compared to $11.8 million. Non-GAAP net income attributable to ACM Research, Inc., which excludes the effect of stock-based compensation and unrealized gain on short-term investments, was $28.7 million, up from $12.6 million.
  • Net income per diluted share attributable to ACM Research, Inc. was $0.26, compared to $0.18. Non-GAAP net income per diluted share, which excludes the effect of stock-based compensation and unrealized gain on short-term investments, was $0.43, up from $0.19.

Conference Call Details

A conference call to discuss results will be held on Wednesday, February 28, 2024, at 8:00 a.m. Eastern Time (9:00 p.m. China Time). To join the conference call via telephone, participants must use the following link to complete an online registration process. Upon registering, each participant will receive email instructions to access the conference call, including dial-in information and a PIN number allowing access to the conference call. This pre-registration process is designed by the operator to reduce delays due to operator congestion when accessing the live call.

Online Registration: https://register.vevent.com/register/BI01aca028c6ce4d85a8cc5164feca46aa

Participants who have not pre-registered may join the webcast by accessing the link at ir.acmrcsh.com/events.

A live and archived webcast will be available on the Investors section of the ACM website at www.acmrcsh.com.

Use of Non-GAAP Financial Measures

ACM presents non-GAAP gross margin, operating expenses, operating income, net income attributable to ACM Research, Inc. 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. In addition, non-GAAP net income attributable to ACM Research, Inc. and basic and diluted earnings per share exclude the effect of stock-based compensation and unrealized gain or loss on short-term investments, which ACM also believes are not 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 GAAP to non-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

Certain statements contained in this press release are not historical facts and may be forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Words such as “plans,” “expects,” “believes,” “anticipates,” “designed,” and similar words are intended to identify forward-looking statements. Forward-looking statements are based on ACM management’s current expectations and beliefs, and involve a number of risks and uncertainties that are difficult to predict and that could cause actual results to differ materially from those stated or implied by the forward-looking statements. A description of certain of these risks, uncertainties and other matters can be found in filings ACM makes with the U.S. Securities and Exchange Commission, all of which are available at www.sec.gov. Because forward-looking statements involve risks and uncertainties, actual results and events may differ materially from results and events currently expected by ACM. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. ACM undertakes no obligation to publicly update these forward-looking statements to reflect events or circumstances that occur after the date hereof or to reflect any change in its expectations with regard to these forward-looking statements or the occurrence of unanticipated events.

About ACM Research, Inc.

ACM develops, manufactures and sells semiconductor process equipment for single-wafer or batch wet cleaning, electroplating, stress-free polishing and thermal processes that are critical to advanced semiconductor device manufacturing, as well as wafer-level packaging. ACM is committed to delivering customized, high performance, cost-effective process solutions that semiconductor manufacturers can use in numerous manufacturing steps to improve productivity and product yield.

© ACM Research, Inc. The ACM Research logo is a trademark of ACM Research, Inc. For convenience, this trademark appears in this press 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 trademarks.

For investor and media inquiries, please contact:

In the United States: The Blueshirt Group
  Steven Pelayo
  +1 (360) 808-5154
  steven@blueshirtgroup.co
   
In China: The Blueshirt Group Asia
  Gary Dvorchak, CFA 
  +86 (138) 1079-1480
  gary@blueshirtgroup.co


ACM RESEARCH, INC.
Condensed Consolidated Balance Sheets
 
  
 December 31, 2023 December 31, 2022
 (Unaudited)  
 (In thousands)
Assets   
Current assets:   
Cash and cash equivalents$182,090  $247,951 
Restricted cash 1,083   500 
Short-term time deposits 80,524   70,492 
Short-term investment 21,312   20,209 
Accounts receivable, net 283,186   182,936 
Other receivables 40,065   29,617 
Inventories, net 545,395   393,172 
Advances to related party 2,432   3,322 
Prepaid expenses 20,023   15,607 
Total current assets 1,176,110   963,806 
Property, plant and equipment, net 201,848   82,875 
Land use right, net 8,367   8,692 
Operating lease right-of-use assets, net 7,026   2,489 
Intangible assets, net 2,538   1,255 
Long-term time deposits 40,818   101,956 
Deferred tax assets 20,271   6,703 
Long-term investments 27,880   17,459 
Other long-term assets 6,050   50,265 
Total assets$1,490,908  $1,235,500 
Liabilities and Equity   
Current liabilities:   
Short-term borrowings$31,335  $56,004 
Current portion of long-term borrowings 6,783   2,322 
Related party accounts payable 11,407   14,468 
Accounts payable 141,814   101,735 
Advances from customers 181,368   153,773 
Deferred revenue 3,687   4,174 
Income taxes payable 6,401   3,469 
FIN-48 payable 12,149   6,686 
Other payables and accrued expenses 102,951   52,201 
Current portion of operating lease liability 2,764   1,382 
Total current liabilities 500,659   396,214 
Long-term borrowings 53,952   18,687 
Long-term operating lease liability 4,262   1,107 
Other long-term liabilities 5,873   7,321 
Total liabilities 564,746   423,329 
Commitments and contingencies   
Equity:   
Stockholders’ equity:   
Class A Common stock 6   5 
Class B Common stock 1   1 
Additional paid-in capital 629,845   604,089 
Retained earnings 156,827   94,426 
Statutory surplus reserve 30,060   16,881 
Accumulated other comprehensive loss (49,349)  (40,546)
Total ACM Research, Inc. stockholders’ equity 767,390   674,856 
Non-controlling interests 158,772   137,315 
Total equity 926,162   812,171 
Total liabilities and equity$1,490,908  $1,235,500 
    


ACM RESEARCH, INC.
Condensed Consolidated Statements of Operations and Comprehensive Income (Loss)
 
 Three Months Ended December 31, Year Ended December 31,
 2023
 2022
 2023
 2022
 (Unaudited) (Unaudited)
     
 ( In thousands, except share and per share data) ( In thousands, except share and per share data)
Revenue$170,321  $108,542  $557,723  $388,832 
Cost of revenue 91,245   54,737   281,508   205,217 
Gross profit 79,076   53,805   276,215   183,615 
Operating expenses:       
Sales and marketing 9,440   12,395   47,019   39,889 
Research and development 32,465   17,835   92,709   62,226 
General and administrative 13,797   6,905   40,648   22,465 
Total operating expenses 55,702   37,135   180,376   124,580 
Income from operations 23,374   16,670   95,839   59,035 
Interest income 2,071   2,775   8,354   8,740 
Interest expense (697)  (669)  (2,681)  (1,655)
Realized gain (loss) from sale of short-term investments 478   (20)  9,047   1,116 
Unrealized gain (loss) on short-term investments 1,691   1,707   (2,737)  (7,855)
Other income (expense), net (1,714)  (6,634)  (1,558)  3,315 
Income from equity method investments 6,224   3,014   9,952   4,666 
Income before income taxes 31,427   16,843   116,216   67,362 
Income tax expense (8,129)  (2,660)  (19,364)  (16,798)
Net income 23,298   14,183   96,852   50,564 
Less: Net income attributable to non-controlling interests 5,598   2,374   19,503   11,301 
Net income attributable to ACM Research, Inc.$17,700  $11,809  $77,349  $39,263 
Comprehensive income (loss):       
Net income 23,298   14,183   96,852   50,564 
Foreign currency translation adjustment, net of tax 11,214   21,232   (10,617)  (59,102)
Comprehensive Income (loss) 34,512   35,415   86,235   (8,538)
Less: Comprehensive income attributable to non-controlling interests 5,807   6,232   17,689   1,854 
Comprehensive income (loss) attributable to ACM Research, Inc.$28,705  $29,183  $68,546  $(10,392)
        
Net income attributable to ACM Research, Inc. per common share:       
Basic$0.29  $0.20  $1.29  $0.66 
Diluted$0.26  $0.18  $1.16  $0.59 
        
Weighted average common shares outstanding used in computing per share amounts:      
Basic 60,792,349   59,568,562   60,164,670   59,235,975 
Diluted 65,911,901   64,198,325   64,870,543   65,341,771 
        


ACM RESEARCH, INC.
Total Revenue by Product Category, by Equipment Type and by Region
       
`Three Months Ended December 31, Year Ended December 31, 
 20232022 20232022 
 (Unaudited) (Unaudited)
   
  ($ in thousands)    
Single wafer cleaning, Tahoe and semi-critical cleaning equipment$122,292$74,603 $403,851$272,939 
ECP (front-end and packaging), furnace and other technologies 32,133 20,213  103,356 77,482 
Advanced packaging (excluding ECP), services & spares 15,896 13,726  50,516 38,411 
Total Revenue By Product Category$170,321$108,542 $557,723$388,832 
       
 20232022 20232022 
Mainland China$165,441$104,167 $540,969$377,752 
Other Regions 4,880 4,375  16,754 11,080 
Total Revenue By Region$170,321$108,542 $557,723$388,832 
       


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 expenses, operating income, net income attributable to ACM Research, Inc., and basic and diluted earnings per share as supplemental measures to GAAP financial measures, each of which excludes stock-based compensation (SBC) from the equivalent GAAP financial line items. In addition, non-GAAP net income attributable to ACM Research, Inc., and basic and diluted earnings per share exclude unrealized gain or loss on short-term investments. The following tables reconcile gross margin, operating expenses, operating income, net income attributable to ACM Research, Inc., and basic and diluted earnings per share to the related non-GAAP financial measures:

 Three Months Ended December 31,
 2023
2022
 ActualSBCOther non-operating adjustmentsAdjustedActualSBCOther non-operating adjustmentsAdjusted
(GAAP)(Non-GAAP)(GAAP)(Non-GAAP)
 (In thousands)
         
Revenue$170,321 $- $- $170,321 $108,542 $- $- $108,542 
Cost of revenue (91,245) (568) -  (90,677) (54,737) (137) -  (54,600)
Gross profit 79,076  (568) -  79,644  53,805  (137) -  53,942 
Gross margin 46.4%  0.3%  -  46.8%  49.6%  0.1%  -  49.7% 
Operating expenses:        
Sales and marketing (9,440) (2,279) -  (7,161) (12,395) (600) -  (11,795)
Research and development (32,465) (3,628) -  (28,837) (17,835) (832) -  (17,003)
General and administrative (13,797) (6,197) -  (7,600) (6,905) (925) -  (5,980)
Total operating expenses (55,702) (12,104) -  (43,598) (37,135) (2,357) -  (34,778)
Income (loss) from operations$23,374 $(12,672)$- $36,046 $16,670 $(2,494)$- $19,164 
Unrealized gain on short-term investments 1,691  -  1,691  -  1,707  -  1,707  - 
Net income (loss) attributable to ACM Research, Inc.$17,700 $(12,672)$1,691 $28,681 $11,809 $(2,494)$1,707 $12,596 
Basic EPS$0.29   $0.47 $0.20   $0.21 
Diluted EPS$0.26   $0.43 $0.18   $0.19 
         
 Year Ended December 31,
 2023
2022
 ActualSBCOther non-operating adjustmentsAdjustedActualSBCOther non-operating adjustmentsAdjusted
(GAAP)(Non-GAAP)(GAAP)(Non-GAAP)
 (In thousands)
         
Revenue$557,723 $- $- $557,723 $388,832 $- $- $388,832 
Cost of revenue (281,508) (1,406) -  (280,102) (205,217) (520) -  (204,697)
Gross profit 276,215  (1,406) -  277,621  183,615  (520) -  184,135 
Gross margin 49.5%  0.3%  -  49.8%  47.2%  0.1%  -  47.4% 
Operating expenses:        
Sales and marketing (47,019) (5,684) -  (41,335) (39,889) (1,877) -  (38,012)
Research and development (92,709) (8,459) -  (84,250) (62,226) (2,565) -  (59,661)
General and administrative (40,648) (11,789) -  (28,859) (22,465) (2,768) -  (19,697)
Total operating expenses (180,376) (25,932) -  (154,444) (124,580) (7,210) -  (117,370)
Income (loss) from operations$95,839 $(27,338)$- $123,177 $59,035 $(7,730)$- $66,765 
Unrealized loss on short-term investments (2,737) -  (2,737) -  (7,855) -  (7,855) - 
Net income (loss) attributable to ACM Research, Inc.$77,349 $(27,338)$(2,737)$107,424 $39,263 $(7,730)$(7,855)$54,848 
Basic EPS$1.29   $1.79 $0.66   $0.93 
Diluted EPS$1.16   $1.63 $0.59   $0.83 
         

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