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