☑ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Delaware | 94-3290283 | |
(State or Other Jurisdiction of Incorporation or Organization) | (I.R.S. Employer Identification No.) | |
42307 Osgood Road, Suite I Fremont, California | 94539 | |
(Address of Principal Executive Offices) | (Zip Code) |
Title of Each Class | Trading Symbol | Name of Each Exchange on which Registered | ||
Class A Common Stock, $0.0001 par value | ACMR | The NASDAQ Stock Market LLC |
Large accelerated filer ☑ | Accelerated filer | ☐ | |
Non-accelerated filer ☐ | Smaller reporting company | ☐ | |
Emerging growth company | ☐ |
Class | Number of Shares Outstanding |
Class A Common Stock, $0.0001 par value | |
Class B Common Stock, $0.0001 par value | 5,086,812 shares outstanding as of |
PART I. | |||
Item 1. | |||
Item 2. | |||
Item 3. | |||
Item 4. | |||
PART II. | |||
Item 1. | |||
Item 1A. | |||
Item 2. | |||
Item 6. | |||
PART I. | FINANCIAL INFORMATION |
Item 1. | Financial Statements |
September 30, | December 31, | |||||||||||||||
March 31, 2022 | December 31, 2021 | 2022 | 2021 | |||||||||||||
Assets | ||||||||||||||||
Current assets: | ||||||||||||||||
Cash and cash equivalents | $ | 380,311 | $ | 563,067 | $ | 336,275 | $ | 562,548 | ||||||||
Short-term time deposits | 74,025 | 0 | ||||||||||||||
Restricted cash | 367 | 519 | ||||||||||||||
Short-term time deposits (note 2) | 66,176 | - | ||||||||||||||
Trading securities (note 15) | 25,772 | 29,498 | 14,164 | 29,498 | ||||||||||||
Accounts receivable, less allowance for doubtful accounts of $0 as of March 31, 2022 and December 31, 2021 (note 4) | 106,351 | 105,553 | ||||||||||||||
Income tax recoverable | 1,607 | 1,082 | ||||||||||||||
Accounts receivable (note 4) | 188,341 | 105,553 | ||||||||||||||
Income tax receivable | 63 | 1,082 | ||||||||||||||
Other receivables | 23,602 | 18,979 | 15,135 | 18,979 | ||||||||||||
Inventories (note 5) | 271,538 | 218,116 | 327,792 | 218,116 | ||||||||||||
Advances to related party (note 16) | 5,158 | 2,383 | ||||||||||||||
Prepaid expenses | 21,771 | 16,639 | 17,771 | 14,256 | ||||||||||||
Total current assets | 904,977 | 952,934 | 971,242 | 952,934 | ||||||||||||
Property, plant and equipment, net (note 6) | 57,680 | 14,042 | 66,470 | 14,042 | ||||||||||||
Land use right, net (note 7) | 9,661 | 9,667 | 8,547 | 9,667 | ||||||||||||
Operating lease right-of-use assets, net (note 11) | 4,028 | 4,182 | 2,647 | 4,182 | ||||||||||||
Intangible assets, net | 748 | 477 | 873 | 477 | ||||||||||||
Long-term time deposits | 78,750 | 0 | ||||||||||||||
Long-term time deposits (note 2) | 70,400 | - | ||||||||||||||
Deferred tax assets (note 19) | 15,303 | 13,166 | 6,576 | 13,166 | ||||||||||||
Long-term investments (note 14) | 12,666 | 12,694 | 18,538 | 12,694 | ||||||||||||
Other long-term assets (note 8) | 3,559 | 45,017 | 2,373 | 45,017 | ||||||||||||
Total assets | 1,087,372 | 1,052,179 | $ | 1,147,666 | $ | 1,052,179 | ||||||||||
Liabilities and Stockholders’ Equity | ||||||||||||||||
Liabilities and Equity | ||||||||||||||||
Current liabilities: | ||||||||||||||||
Short-term borrowings (note 9) | 9,600 | 9,591 | $ | 50,688 | $ | 9,591 | ||||||||||
Current portion of long-term borrowings (note 12) | 2,441 | 2,410 | 2,260 | 2,410 | ||||||||||||
Related party accounts payable (note 16) | 6,589 | 7,899 | ||||||||||||||
Accounts payable | 108,494 | 101,350 | 92,325 | 93,451 | ||||||||||||
Advances from customers | 82,036 | 52,824 | 136,610 | 52,824 | ||||||||||||
Deferred revenue | 2,699 | 3,180 | 4,911 | 3,180 | ||||||||||||
Income taxes payable (note 19) | (1,744 | ) | 254 | 8,564 | 254 | |||||||||||
FIN-48 payable (note 19) | 2,292 | 2,282 | 2,054 | 2,282 | ||||||||||||
Other payables and accrued expenses (note 10) | 36,555 | 31,735 | 40,281 | 31,735 | ||||||||||||
Current portion of operating lease liability (note 11) | 2,076 | 2,313 | 1,320 | 2,313 | ||||||||||||
Total current liabilities | 244,449 | 205,939 | 345,602 | 205,939 | ||||||||||||
Long-term borrowings (note 12) | 22,344 | 22,957 | 18,810 | 22,957 | ||||||||||||
Long-term operating lease liability (note 11) | 1,952 | 1,869 | 1,327 | 1,869 | ||||||||||||
Deferred tax liability (note19) | 1,308 | 1,302 | 1,169 | 1,302 | ||||||||||||
Other long-term liabilities (note 13) | 8,545 | 8,447 | 6,660 | 8,447 | ||||||||||||
Total liabilities | 278,598 | 240,514 | 373,568 | 240,514 | ||||||||||||
Commitments and contingencies (note 20) | 0 | 0 | ||||||||||||||
Equity: | ||||||||||||||||
Stockholders’ equity: | ||||||||||||||||
Common stock (1) – Class A, par value $0.0001: 150,000,000 shares authorized as of March 31, 2022 and December 31, 2021; 54,035,280 shares issued and outstanding as of March 31, 2022 and 53,608,929 shares issued and outstanding as of December 31, 2021 (note 17) | 5 | 5 | ||||||||||||||
Common stock (1) –Class B, par value $0.0001: 5,307,816 shares authorized as of March 31, 2022 and December 31, 2021; 5,086,812 shares issued and outstanding as of March 31, 2022 and 5,087,814 shares issued and outstanding as of December 31, 2021 (note 17) | 1 | 1 | ||||||||||||||
Additional paid in capital | 597,143 | 595,045 | ||||||||||||||
Accumulated surplus | 66,258 | 72,044 | ||||||||||||||
Accumulated other comprehensive income | 10,979 | 9,109 | ||||||||||||||
Class A Common stock (1) (note 17) | 5 | 5 | ||||||||||||||
Class B Common stock (1) (note 17) | 1 | 1 | ||||||||||||||
Additional paid-in capital | 601,431 | 595,045 | ||||||||||||||
Retained earnings | 91,186 | 63,732 | ||||||||||||||
Statutory surplus reserve (note 22) | 8,312 | 8,312 | ||||||||||||||
Accumulated other comprehensive income (loss) | (57,920 | ) | 9,109 | |||||||||||||
Total ACM Research, Inc. stockholders’ equity | 674,386 | 676,204 | 643,015 | 676,204 | ||||||||||||
Non-controlling interests | 134,388 | 135,461 | 131,083 | 135,461 | ||||||||||||
Total stockholders’ equity | 808,774 | 811,665 | ||||||||||||||
Total liabilities and stockholders’ equity | $ | 1,087,372 | $ | 1,052,179 | ||||||||||||
Total equity | 774,098 | 811,665 | ||||||||||||||
Total liabilities and equity | $ | 1,147,666 | $ | 1,052,179 |
(1) | Prior period results have been adjusted to reflect the |
Three Months Ended March 31, | Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | 2022 | 2021 | |||||||||||||||||||
Revenue (note 3) | $ | 42,186 | $ | 43,732 | $ | 133,709 | $ | 67,013 | $ | 280,290 | $ | 164,609 | ||||||||||||
Cost of revenue | 22,500 | 25,687 | 67,742 | 37,328 | 150,480 | 95,199 | ||||||||||||||||||
Gross profit | 19,686 | 18,045 | 65,967 | 29,685 | 129,810 | 69,410 | ||||||||||||||||||
Operating expenses: | ||||||||||||||||||||||||
Sales and marketing | 6,697 | 5,308 | 13,133 | 6,363 | 27,494 | 17,460 | ||||||||||||||||||
Research and development | 17,346 | 5,504 | 15,678 | 7,856 | 44,391 | 21,293 | ||||||||||||||||||
General and administrative | 4,949 | 3,783 | 5,520 | 3,671 | 15,560 | 11,081 | ||||||||||||||||||
Total operating expenses, net | 28,992 | 14,595 | ||||||||||||||||||||||
Income (loss) from operations | (9,306 | ) | 3,450 | |||||||||||||||||||||
Total operating expenses | 34,331 | 17,890 | 87,445 | 49,834 | ||||||||||||||||||||
Income from operations | 31,636 | 11,795 | 42,365 | 19,576 | ||||||||||||||||||||
Interest income | 1,805 | 49 | 2,016 | 33 | 5,965 | 113 | ||||||||||||||||||
Interest expense | (261 | ) | (189 | ) | (419 | ) | (191 | ) | (986 | ) | (574 | ) | ||||||||||||
Unrealized loss on trading securities | (3,858 | ) | (1,047 | ) | ||||||||||||||||||||
Other income, net | 237 | 469 | ||||||||||||||||||||||
Equity income (loss) in net income (loss) of affiliates | (71 | ) | 320 | |||||||||||||||||||||
Income (loss) before income taxes | (11,454 | ) | 3,052 | |||||||||||||||||||||
Income tax benefit (note 19) | 4,011 | 2,770 | ||||||||||||||||||||||
Net income (loss) | (7,443 | ) | 5,822 | |||||||||||||||||||||
Less: Net income (loss) attributable to non-controlling interests | (1,657 | ) | 352 | |||||||||||||||||||||
Net income (loss) attributable to ACM Research, Inc. | $ | (5,786 | ) | $ | 5,470 | |||||||||||||||||||
Comprehensive income: | ||||||||||||||||||||||||
Net income (loss) | (7,443 | ) | 5,822 | |||||||||||||||||||||
Foreign currency translation adjustment | 2,454 | (1,332 | ) | |||||||||||||||||||||
Comprehensive Income (loss) | (4,989 | ) | 4,490 | |||||||||||||||||||||
Realized gain from sale of trading securities | 1,136 | - | 1,136 | - | ||||||||||||||||||||
Unrealized gain (loss) on trading securities | (5,281 | ) | (919 | ) | (9,562 | ) | 1,817 | |||||||||||||||||
Other income (expense), net | 7,207 | (255 | ) | 9,949 | (683 | ) | ||||||||||||||||||
Equity income in net income of affiliates | 1,251 | 421 | 1,652 | 1,036 | ||||||||||||||||||||
Income before income taxes | 37,546 | 10,884 | 50,519 | 21,285 | ||||||||||||||||||||
Income tax benefit (expense) (note 19) | (10,470 | ) | 266 | (14,138 | ) | 3,021 | ||||||||||||||||||
Net income | 27,076 | 11,150 | 36,381 | 24,306 | ||||||||||||||||||||
Less: Net income attributable to non-controlling interests | 6,072 | 995 | 8,927 | 2,114 | ||||||||||||||||||||
Net income attributable to ACM Research, Inc. | $ | 21,004 | $ | 10,155 | $ | 27,454 | $ | 22,192 | ||||||||||||||||
Comprehensive income (loss): | ||||||||||||||||||||||||
Net income | 27,076 | 11,150 | 36,381 | 24,306 | ||||||||||||||||||||
Foreign currency translation adjustment, net of tax | (42,416 | ) | (409 | ) | (80,334 | ) | 1,259 | |||||||||||||||||
Comprehensive income (loss) | (15,340 | ) | 10,741 | (43,953 | ) | 25,565 | ||||||||||||||||||
Less: Comprehensive income (loss) attributable to non-controlling interests | (1,073 | ) | (83 | ) | (1,057 | ) | 757 | (4,378 | ) | 2,471 | ||||||||||||||
Comprehensive income (loss) attributable to ACM Research, Inc. | $ | (3,916 | ) | $ | 4,573 | $ | (14,283 | ) | $ | 9,984 | $ | (39,575 | ) | $ | 23,094 | |||||||||
Net income (loss) attributable to ACM Research, Inc. per common share (note 2): | ||||||||||||||||||||||||
Net income attributable to ACM Research, Inc. per common share (note 2): | ||||||||||||||||||||||||
Basic | $ | (0.10 | ) | $ | 0.10 | $ | 0.35 | $ | 0.17 | $ | 0.46 | $ | 0.39 | |||||||||||
Diluted | $ | (0.09 | ) | $ | 0.08 | $ | 0.32 | $ | 0.15 | $ | 0.41 | $ | 0.34 | |||||||||||
Weighted average common shares outstanding used in computing per share amounts (note 2): | Weighted average common shares outstanding used in computing per share amounts (note 2): | |||||||||||||||||||||||
Basic (1) | 58,827,390 | 56,360,610 | 59,360,790 | 58,267,638 | 59,123,895 | 57,340,059 | ||||||||||||||||||
Diluted (1) | 65,950,922 | 65,604,840 | 65,612,665 | 66,127,548 | 65,629,273 | 65,191,020 |
(1) | Prior period results have been adjusted to reflect the |
Common | Common | |||||||||||||||||||||||||||||||||||||||
Stock Class A | Stock Class B | |||||||||||||||||||||||||||||||||||||||
Shares (1) | Amount | Shares (1) | Amount | Additional Paid- in Capital | Retained earnings | Statutory Surplus Reserve | Accumulated Other Comprehensive Income | Non-controlling interests | Total Equity | |||||||||||||||||||||||||||||||
Balance at December 31, 2020 | 50,690,079 | $ | 5 | 5,407,818 | $ | 1 | $ | 102,000 | $ | 29,899 | $ | 4,388 | $ | 4,857 | $ | 67,020 | $ | 208,170 | ||||||||||||||||||||||
Net income | - | - | - | - | - | 22,192 | - | - | 2,114 | 24,306 | ||||||||||||||||||||||||||||||
Foreign currency translation adjustment | - | - | - | - | - | - | - | 902 | 357 | 1,259 | ||||||||||||||||||||||||||||||
Exercise of stock options | 1,693,095 | - | - | - | 3,129 | - | - | - | - | 3,129 | ||||||||||||||||||||||||||||||
Stock-based compensation | - | - | - | - | 3,823 | - | - | - | - | 3,823 | ||||||||||||||||||||||||||||||
Exercise of stock warrants | 728,043 | - | - | - | 1,820 | - | - | - | - | 1,820 | ||||||||||||||||||||||||||||||
Conversion of Class B common stock to Class A common stock | 285,003 | - | (285,003 | ) | - | - | - | - | - | - | - | |||||||||||||||||||||||||||||
Balance at September 30, 2021 | 53,396,220 | $ | 5 | 5,122,815 | $ | 1 | $ | 110,772 | $ | 52,091 | $ | 4,388 | $ | 5,759 | $ | 69,491 | $ | 242,507 |
Common | Common | |||||||||||||||||||||||||||||||||||||||
Stock Class A | Stock Class B | |||||||||||||||||||||||||||||||||||||||
Shares (1) | Amount | Shares (1) | Amount | Additional Paid- in Capital | Retained earnings | Statutory Surplus Reserve | Accumulated Other Comprehensive Income (Loss) | Non-controlling interests | Total Equity | |||||||||||||||||||||||||||||||
Balance at December 31, 2021 | 53,608,929 | $ | 5 | 5,087,814 | $ | 1 | $ | 595,045 | $ | 63,732 | $ | 8,312 | $ | 9,109 | $ | 135,461 | $ | 811,665 | ||||||||||||||||||||||
Net income | - | - | - | - | - | 27,454 | - | - | 8,927 | 36,381 | ||||||||||||||||||||||||||||||
Foreign currency translation adjustment | - | - | - | - | - | - | - | (67,029 | ) | (13,305 | ) | (80,334 | ) | |||||||||||||||||||||||||||
Exercise of stock options | 763,584 | - | - | - | 1,150 | - | - | - | - | 1,150 | ||||||||||||||||||||||||||||||
Stock-based compensation | - | - | - | - | 5,236 | - | - | - | - | 5,236 | ||||||||||||||||||||||||||||||
Conversion of Class B common stock to Class A common stock | 1,002 | - | (1,002 | ) | - | - | - | - | - | - | - | |||||||||||||||||||||||||||||
Balance at September 30, 2022 | 54,373,515 | $ | 5 | 5,086,812 | $ | 1 | $ | 601,431 | $ | 91,186 | $ | 8,312 | $ | (57,920 | ) | $ | 131,083 | $ | 774,098 |
(1) | Prior period results have been adjusted to reflect the three-for-one stock split effected in the form of a stock dividend in March 2022. See Note 1 for details |
Common Stock Class A | Common Stock Class B | Common | Common | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Shares (1) | Amount (1) | Shares (1) | Amount (1) | Additional Paid- in Capital (1) | Accumulated Surplus | Accumulated Other Comprehensive Income | Non-controlling interests | Total Stockholders’ Equity | Stock Class A | Stock Class B | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance at December 31, 2020 | 50,690,079 | $ | 5 | 5,407,818 | $ | 1 | $ | 102,000 | $ | 34,287 | $ | 4,857 | $ | 67,020 | $ | 208,170 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Shares (1) | Amount | Shares (1) | Amount | Additional Paid- in Capital | Retained earnings | Statutory Surplus Reserve | Accumulated Other Comprehensive Income | Non-controlling interests | Total Equity | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance at June 30, 2021 | 53,005,227 | $ | 5 | 5,122,815 | $ | 1 | $ | 108,562 | $ | 41,936 | $ | 4,388 | $ | 5,931 | $ | 68,733 | 229,556 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net income | - | 0 | - | 0 | 0 | 5,470 | 0 | 352 | 5,822 | - | - | - | - | - | 10,155 | - | - | 995 | 11,150 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Foreign currency translation adjustment | - | 0 | - | 0 | 0 | 0 | (896 | ) | (436 | ) | (1,332 | ) | - | - | - | - | - | - | - | (172 | ) | (237 | ) | (409 | ) | |||||||||||||||||||||||||||||||||||||||||||||||||||
Exercise of stock options | 929,820 | 0 | 0 | 0 | 1,377 | 0 | 0 | 0 | 1,377 | 390,993 | - | - | - | 932 | - | - | - | - | 932 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock-based compensation | - | 0 | - | 0 | 1,210 | 0 | 0 | 0 | 1,210 | - | - | - | - | 1,278 | - | - | - | - | 1,278 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Conversion of Class B common stock to Class A common stock | 100,002 | 0 | (100,002 | ) | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance at March 31, 2021 | 51,719,901 | $ | 5 | 5,307,816 | $ | 1 | $ | 104,587 | $ | 39,757 | $ | 3,961 | $ | 66,936 | $ | 215,247 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance at September 30, 2021 | 53,396,220 | $ | 5 | 5,122,815 | $ | 1 | $ | 110,772 | $ | 52,091 | $ | 4,388 | $ | 5,759 | $ | 69,491 | $ | 242,507 |
Common Stock Class A | Common Stock Class B | |||||||||||||||||||||||||||||||||||
Shares (1) | Amount (1) | Shares (1) | Amount (1) | Additional Paid- in Capital (1) | Accumulated Surplus | Accumulated Other Comprehensive Income | Non-controlling interests | Total Stockholders’ Equity | ||||||||||||||||||||||||||||
Balance at December 31, 2021 | 53,608,929 | $ | 5 | 5,087,814 | $ | 1 | $ | 595,045 | $ | 72,044 | $ | 9,109 | $ | 135,461 | $ | 811,665 | ||||||||||||||||||||
Net loss | - | 0 | - | 0 | 0 | (5,786 | ) | 0 | (1,657 | ) | (7,443 | ) | ||||||||||||||||||||||||
Foreign currency translation adjustment | - | 0 | - | 0 | 0 | 0 | 1,870 | 584 | 2,454 | |||||||||||||||||||||||||||
Exercise of stock options | 425,349 | 0 | 0 | 0 | 724 | 0 | 0 | 0 | 724 | |||||||||||||||||||||||||||
Stock-based compensation | - | 0 | - | 0 | 1,374 | 0 | 0 | 0 | 1,374 | |||||||||||||||||||||||||||
Conversion of Class B common stock to Class A common stock | 1,002 | 0 | (1,002 | ) | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||
Balance at March 31, 2022 | 54,035,280 | $ | 5 | 5,086,812 | $ | 1 | $ | 597,143 | $ | 66,258 | $ | 10,979 | $ | 134,388 | $ | 808,774 |
Common | Common | |||||||||||||||||||||||||||||||||||||||
Stock Class A | Stock Class B | |||||||||||||||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | Additional Paid- in Capital | Retained earnings | Statutory Surplus Reserve | Accumulated Other Comprehensive Income (Loss) | Non-controlling interests | Total Equity | |||||||||||||||||||||||||||||||
Balance at June 30, 2022 | 54,141,805 | $ | 5 | 5,086,812 | $ | 1 | $ | 599,138 | $ | 70,182 | $ | 8,312 | $ | (22,633 | ) | $ | 132,140 | $ | 787,145 | |||||||||||||||||||||
Net income | - | - | - | - | - | 21,004 | - | - | 6,072 | 27,076 | ||||||||||||||||||||||||||||||
Foreign currency translation adjustment | - | - | - | - | - | - | - | (35,287 | ) | (7,129 | ) | (42,416 | ) | |||||||||||||||||||||||||||
Exercise of stock options | 231,710 | - | - | - | 400 | - | - | - | - | 400 | ||||||||||||||||||||||||||||||
Stock-based compensation | - | - | - | - | 1,893 | - | - | - | - | 1,893 | ||||||||||||||||||||||||||||||
Balance at September 30, 2022 | 54,373,515 | $ | 5 | 5,086,812 | $ | 1 | $ | 601,431 | $ | 91,186 | $ | 8,312 | $ | (57,920 | ) | $ | 131,083 | $ | 774,098 |
(1) | Prior period results have been adjusted to reflect the |
Three Months Ended March 31, | Nine Months Ended September 30, | |||||||||||||||
2022 | 2021 | 2022 | 2021 | |||||||||||||
Cash flows from operating activities: | ||||||||||||||||
Net income (loss) | $ | (7,443 | ) | $ | 5,822 | |||||||||||
Net income | $ | 36,381 | $ | 24,306 | ||||||||||||
Adjustments to reconcile net income from operations to net cash used in operating activities | ||||||||||||||||
Depreciation and amortization | 1,213 | 546 | 4,104 | 1,597 | ||||||||||||
Loss on disposals of property, plant and equipment | 0 | 26 | ||||||||||||||
Equity (income) loss in net (income) loss of affiliates | 71 | (320 | ) | |||||||||||||
Unrealized loss on trading securities | 3,858 | 1,047 | ||||||||||||||
Realized gain on trading securities | (1,136 | ) | - | |||||||||||||
Equity income in net income of affiliates | (1,652 | ) | (1,036 | ) | ||||||||||||
Unrealized loss (gain) on trading securities | 9,562 | (1,817 | ) | |||||||||||||
Deferred income taxes | (2,081 | ) | (2,929 | ) | 5,036 | (4,666 | ) | |||||||||
Stock-based compensation | 1,374 | 1,210 | 5,236 | 3,823 | ||||||||||||
Net changes in operating assets and liabilities: | ||||||||||||||||
Accounts receivable | (284 | ) | (4,602 | ) | (96,840 | ) | (28,135 | ) | ||||||||
Other receivables | (4,893 | ) | (1,850 | ) | (1,309 | ) | (3,227 | ) | ||||||||
Inventory | (52,503 | ) | (15,276 | ) | ||||||||||||
Inventories | (132,037 | ) | (87,613 | ) | ||||||||||||
Advances to related party (note 16) | (2,775 | ) | (585 | ) | ||||||||||||
Prepaid expenses | (5,015 | ) | (83 | ) | (6,387 | ) | (1,031 | ) | ||||||||
Other long-term assets | (119 | ) | 21 | 851 | (3,747 | ) | ||||||||||
Related party accounts payable (note 16) | (1,310 | ) | 4,167 | |||||||||||||
Accounts payable | 6,681 | 9,492 | 10,155 | 53,116 | ||||||||||||
Advances from customers | 29,273 | 14,932 | 88,888 | 34,879 | ||||||||||||
Income tax payable | (1,999 | ) | 75 | |||||||||||||
Deferred revenue | 1,731 | 2,403 | ||||||||||||||
Income taxes payable | 8,337 | 1,204 | ||||||||||||||
FIN-48 payable | 10 | 0 | (228 | ) | - | |||||||||||
Other payables and accrued expenses | 1,274 | 3,181 | 13,755 | 5,938 | ||||||||||||
Deferred revenue | 2,699 | 1,315 | ||||||||||||||
Other long-term liabilities | 155 | (1,865 | ) | (3,892 | ) | (3,398 | ) | |||||||||
Net cash flow (used in) provided by operating activities | (27,729 | ) | 10,742 | |||||||||||||
Net cash flow used in operating activities | (63,530 | ) | (3,822 | ) | ||||||||||||
Cash flows from investing activities: | ||||||||||||||||
Purchase of property and equipment | (3,176 | ) | (1,466 | ) | (18,417 | ) | (5,059 | ) | ||||||||
Purchase of intangible assets | (408 | ) | (112 | ) | (1,079 | ) | (418 | ) | ||||||||
Increase of short-term time deposits | (74,025 | ) | 0 | (66,176 | ) | - | ||||||||||
Increase of long-term time deposits | (78,750 | ) | 0 | (70,400 | ) | - | ||||||||||
Proceeds from selling trading securities | 4,488 | - | ||||||||||||||
Investments in affiliates | (1,000 | ) | - | |||||||||||||
Purchase of long term investment (Note 14) | (4,196 | ) | - | |||||||||||||
Net cash used in investing activities | (156,359 | ) | (1,578 | ) | (156,780 | ) | (5,477 | ) | ||||||||
Cash flows from financing activities: | ||||||||||||||||
Proceeds from short-term borrowings | 0 | 4,211 | 50,688 | 17,988 | ||||||||||||
Repayments of short-term borrowings | 0 | (6,744 | ) | (13,694 | ) | (28,988 | ) | |||||||||
Proceeds from long-term borrowings | - | 6,939 | ||||||||||||||
Repayments of long-term borrowings | (696 | ) | (224 | ) | (1,708 | ) | (1,193 | ) | ||||||||
Proceeds from stock option exercise to common stock | 724 | 1,377 | ||||||||||||||
Proceeds from exercise of stock options | 1,150 | 3,129 | ||||||||||||||
Proceeds from warrant exercise to common stock | - | 1,820 | ||||||||||||||
Net cash (used in) provided by financing activities | 28 | (1,380 | ) | 36,436 | (305 | ) | ||||||||||
Effect of exchange rate changes on cash and cash equivalents | $ | 1,304 | $ | (754 | ) | |||||||||||
Net increase (decrease) in cash and cash equivalents | $ | (182,756 | ) | $ | 7,030 | |||||||||||
Effect of exchange rate changes on cash, cash equivalents and restricted cash | $ | (42,551 | ) | $ | 2,874 | |||||||||||
Net decrease in cash, cash equivalents and restricted cash | $ | (226,425 | ) | $ | (6,730 | ) | ||||||||||
Cash and cash equivalents at beginning of period | 563,067 | 71,766 | ||||||||||||||
Cash and cash equivalents at end of period | $ | 380,311 | $ | 78,796 | ||||||||||||
Cash, cash equivalents and restricted cash at beginning of period | 563,067 | 71,766 | ||||||||||||||
Cash, cash equivalents and restricted cash at end of period | $ | 336,642 | $ | 65,036 | ||||||||||||
Supplemental disclosure of cash flow information: | ||||||||||||||||
Interest paid, net of capitalized interest | $ | 261 | $ | 189 | $ | 986 | $ | 574 | ||||||||
Cash paid for income taxes | $ | 0 | $ | 63 | $ | 182 | $ | 606 | ||||||||
Reconciliation of cash, cash equivalents and restricted cash in condensed consolidated statements of cash flows: | ||||||||||||||||
Cash and cash equivalents | 336,275 | 64,517 | ||||||||||||||
Restricted cash | 367 | 519 | ||||||||||||||
Cash, cash equivalents and restricted cash | $ | 336,642 | $ | 65,036 | ||||||||||||
Non-cash financing activities: | ||||||||||||||||
Conversion of Class B common stock to Class A common stock | $ | 1,002 | $ | 285,003 | ||||||||||||
Cashless exercise of stock options | $ | 39 | $ | 83 | $ | 125 | $ | 118 | ||||||||
Non-cash investing activities: | ||||||||||||||||
Transfer of prepayment for property to property plant and equipment | $ | 41,497 | $ | - |
Effective interest held as at | |||||||||
Name of subsidiaries | Place and date of incorporation | March 31, 2022 | December 31, 2021 | ||||||
ACM Research (Shanghai), Inc. | PRC, May 2005 | 82.5 | % | 82.5 | % | ||||
ACM Research (Wuxi), Inc. | PRC, July 2011 | 82.5 | % | 82.5 | % | ||||
CleanChip Technologies Limited | Hong Kong, June 2017 | 82.5 | % | 82.5 | % | ||||
ACM Research Korea CO., LTD. | Korea, December 2017 | 82.5 | % | 82.5 | % | ||||
Shengwei Research (Shanghai), Inc. | PRC, March 2019 | 82.5 | % | 82.5 | % | ||||
ACM Research (CA), Inc. | USA, April 2019 | 82.5 | % | 82.5 | % | ||||
ACM Research (Cayman), Inc. | Cayman Islands, April 2019 | 100.0 | % | 100.0 | % | ||||
ACM Research (Singapore) PTE. Ltd. | Singapore, August 2021 | 100.0 | % | 100.0 | % | ||||
ACM Research (Beijing), Inc. | PRC, February 2022 | 82.5 | % | 0 | |||||
Hanguk ACM CO., LTD. | Korea, March 2022 | 100.0 | % | 0 |
Effective interest held as at | |||||||||
September 30, | December 31, | ||||||||
Name of subsidiaries | Place and date of incorporation | 2022 | 2021 | ||||||
ACM Research (Shanghai), Inc. | PRC, May 2005 | 82.5 | % | 82.5 | % | ||||
ACM Research (Wuxi), Inc. | PRC, July 2011 | 82.5 | % | 82.5 | % | ||||
CleanChip Technologies Limited | Hong Kong, June 2017 | 82.5 | % | 82.5 | % | ||||
ACM Research Korea CO., LTD. | Korea, December 2017 | 82.5 | % | 82.5 | % | ||||
Shengwei Research (Shanghai), Inc. | PRC, March 2019 | 82.5 | % | 82.5 | % | ||||
ACM Research (CA), Inc. | USA, April 2019 | 82.5 | % | 82.5 | % | ||||
ACM Research (Cayman), Inc. | Cayman Islands, April 2019 | 100.0 | % | 100.0 | % | ||||
ACM Research (Singapore) PTE. Ltd. | Singapore, August 2021 | 100.0 | % | 100.0 | % | ||||
ACM Research (Beijing), Inc. | PRC, February 2022 | 82.5 | % | — | |||||
Hanguk ACM CO., LTD. | Korea, March 2022 | 100.0 | % | — |
September 30, | December 31, | |||||||
2022 | 2021 | |||||||
United States | $ | 27,796 | $ | 34,852 | ||||
Mainland China | 216,116 | 469,494 | ||||||
China Hong Kong | 78,398 | 52,527 | ||||||
South Korea | 13,964 | 5,675 | ||||||
Singapore | 1 | - | ||||||
Total | $ | 336,275 | $ | 562,548 |
September 30, | December 31, | |||||||
2022 | 2021 | |||||||
Deposit in China Merchant Bank which will mature on January 29, 2023 with an annual interest rate of 2.25% | $ | 38,016 | $ | - | ||||
Deposit in China Everbright Bank which will mature on January 29, 2023 with an annual interest rate of 2.25% | 14,080 | - | ||||||
Deposit in China Industrial Bank which will mature on January 30, 2023 with an annual interest rate of 2.15% | 14,080 | - | ||||||
Deposit in China Merchant Bank which will mature on January 29, 2024 with an annual interest rate of 2.85% | 28,160 | - | ||||||
Deposit in Bank of Ningbo which will mature on February 17, 2024 with an annual interest rate of 2.85% | 42,240 | - | ||||||
$ | 136,576 | $ | - |
1. | Identify the contract(s) with a customer; |
2. | Identify the performance obligations in the contract; |
3. | Determine the transaction price; |
4. | Allocate the transaction price to the performance obligations in the contract; and |
5. | Recognize revenue when (or as) the entity satisfies a performance obligation. |
● | When the customer has previously accepted the same tool with the same specifications and the Company can objectively demonstrate that the tool meets all of the required acceptance criteria; |
● | When the sales contract or purchase order contains no acceptance agreement or lapsing acceptance provision and the Company can objectively demonstrate that the tool meets all of the required acceptance criteria; |
● | When the customer withholds acceptance due to issues unrelated to product performance, in which case revenue is recognized when the system is performing as intended and meets predetermined specifications; or |
● | When the Company’s sales arrangements do not include a general right of return. |
Three Months Ended March 31, | ||||||||
2022 | 2021 | |||||||
Numerator: | ||||||||
Net income (loss) | $ | (7,443 | ) | $ | 5,822 | |||
Less: Net income (loss) attributable to non-controlling interests | (1,657 | ) | 352 | |||||
Net income (loss) available to common stockholders, basic | $ | (5,786 | ) | $ | 5,470 | |||
Less: Dilutive effect arising from share-based awards by ACM Shanghai | (86 | ) | 0 | |||||
Net income (loss) available to common stockholders, diluted | $ | (5,700 | ) | $ | 5,470 | |||
Weighted average shares outstanding, basic | 58,827,390 | 56,360,610 | ||||||
Effect of dilutive securities | 7,123,532 | 9,244,230 | ||||||
Weighted average shares outstanding, diluted | 65,950,922 | 65,604,840 | ||||||
Net income (loss) per common share: | ||||||||
Basic | (0.10 | ) | 0.10 | |||||
Diluted | $ | (0.09 | ) | $ | 0.08 |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2022 | 2021 | 2022 | 2021 | |||||||||||||
Numerator: | ||||||||||||||||
Net income | $ | 27,076 | $ | 11,150 | $ | 36,381 | $ | 24,306 | ||||||||
Less: Net income attributable to non-controlling interests | 6,072 | 995 | 8,927 | 2,114 | ||||||||||||
Net income available to common stockholders, basic | $ | 21,004 | $ | 10,155 | $ | 27,454 | $ | 22,192 | ||||||||
Less: Dilutive effect arising from stock-based awards by ACM Shanghai | 321 | - | 465 | - | ||||||||||||
Net income available to common stockholders, diluted | $ | 20,683 | $ | 10,155 | $ | 26,989 | $ | 22,192 | ||||||||
Weighted average shares outstanding, basic (1) | 59,360,790 | 58,267,638 | 59,123,895 | 57,340,059 | ||||||||||||
Effect of dilutive securities | 6,251,875 | 7,859,910 | 6,505,378 | 7,850,961 | ||||||||||||
Weighted average shares outstanding, diluted | 65,612,665 | 66,127,548 | 65,629,273 | 65,191,020 | ||||||||||||
Net income per common share: | ||||||||||||||||
Basic | $ | 0.35 | $ | 0.17 | $ | 0.46 | $ | 0.39 | ||||||||
Diluted | $ | 0.32 | $ | 0.15 | $ | 0.41 | $ | 0.34 |
(1) | Prior period results have been adjusted to reflect the three-for-one stock split effected in the form of a stock dividend in March 2022. See Note 1 for details. |
Three Months Ended March 31, | Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | 2022 | 2021 | |||||||||||||||||||
Single wafer cleaning, Tahoe and semi-critical cleaning equipment | $ | 26,033 | $ | 32,413 | $ | 99,720 | $ | 49,448 | $ | 198,336 | $ | 127,322 | ||||||||||||
ECP (front-end and packaging), furnace and other technologies | 12,248 | 5,550 | 24,521 | 8,200 | 57,269 | 13,750 | ||||||||||||||||||
Advanced packaging (excluding ECP), services & spares | 3,905 | 5,769 | 9,468 | 9,365 | 24,685 | 23,537 | ||||||||||||||||||
Total Revenue By Product Category | $ | 42,186 | $ | 43,732 | $ | 133,709 | $ | 67,013 | $ | 280,290 | $ | 164,609 | ||||||||||||
Wet cleaning and other front-end processing tools | $ | 31,702 | $ | 31,900 | ||||||||||||||||||||
Wet-cleaning and other front-end processing tools | $ | 117,941 | $ | 49,448 | $ | 229,195 | $ | 127,322 | ||||||||||||||||
Advanced packaging, other processing tools, services and spares | 10,484 | 11,832 | 15,768 | 17,565 | 51,095 | 37,287 | ||||||||||||||||||
Total Revenue Front-end and Back-End | $ | 42,186 | $ | 43,732 | $ | 133,709 | $ | 67,013 | $ | 280,290 | $ | 164,609 |
Three Months Ended March 31, | Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | 2022 | 2021 | |||||||||||||||||||
Mainland China | $ | 42,130 | $ | 43,696 | $ | 131,180 | $ | 66,887 | $ | 273,585 | $ | 164,319 | ||||||||||||
Other Regions | 56 | 36 | 2,529 | 126 | 6,705 | 290 | ||||||||||||||||||
$ | 42,186 | $ | 43,732 | $ | 133,709 | $ | 67,013 | $ | 280,290 | $ | 164,609 |
September 30, | December 31, | |||||||
2022 | 2021 | |||||||
Accounts receivable | $ | 188,341 | $ | 105,553 | ||||
Advances from customers | 136,610 | 52,824 | ||||||
Deferred revenue | 4,911 | 3,180 |
September 30, | December 31, | |||||||||||||||
March 31, 2022 | December 31, 2021 | 2022 | 2021 | |||||||||||||
Accounts receivable | $ | 106,351 | $ | 105,553 | $ | 188,341 | $ | 105,553 | ||||||||
Less: Allowance for doubtful accounts | 0 | 0 | - | - | ||||||||||||
Total | $ | 106,351 | $ | 105,553 | $ | 188,341 | $ | 105,553 |
September 30, | December 31, | |||||||||||||||
March 31, 2022 | December 31, 2021 | 2022 | 2021 | |||||||||||||
Raw materials | $ | 108,157 | $ | 90,552 | $ | 145,071 | $ | 90,552 | ||||||||
Work in process | 56,755 | 35,840 | ||||||||||||||
Work-in-process | 73,533 | 35,840 | ||||||||||||||
Finished goods | 106,626 | 91,724 | 109,188 | 91,724 | ||||||||||||
Total inventory | $ | 271,538 | $ | 218,116 | $ | 327,792 | $ | 218,116 |
September 30, | December 31, | |||||||||||||||
March 31, 2022 | December 31, 2021 | 2022 | 2021 | |||||||||||||
Buildings and plants | $ | 41,577 | $ | 0 | $ | 37,168 | $ | - | ||||||||
Manufacturing equipment | 8,738 | 7,973 | 8,060 | 7,973 | ||||||||||||
Office equipment | 2,559 | 2,012 | 3,410 | 2,012 | ||||||||||||
Transportation equipment | 217 | 217 | 193 | 217 | ||||||||||||
Leasehold improvement | 4,821 | 4,134 | 6,448 | 4,134 | ||||||||||||
Total cost | 57,912 | 14,336 | 55,279 | 14,336 | ||||||||||||
Less: Total accumulated depreciation | (6,837 | ) | (5,900 | ) | ||||||||||||
Less: Total accumulated depreciation and amortization | (8,511 | ) | (5,900 | ) | ||||||||||||
Construction in progress | 6,605 | 5,606 | 19,702 | 5,606 | ||||||||||||
Total property, plant and equipment, net | $ | 57,680 | $ | 14,042 | $ | 66,470 | $ | 14,042 |
September 30, | December 31, | |||||||||||||||
March 31, 2022 | December 31, 2021 | 2022 | 2021 | |||||||||||||
Land use right purchase amount | $ | 10,011 | $ | 9,966 | $ | 8,950 | $ | 9,966 | ||||||||
Less: accumulated amortization | (350 | ) | (299 | ) | (403 | ) | (299 | ) | ||||||||
Land use right, net | $ | 9,661 | $ | 9,667 | $ | 8,547 | $ | 9,667 |
Year ending December 31, | ||||
2022 | $ | 200 | ||
2023 | 200 | |||
2024 | 200 | |||
2025 | 200 | |||
2026 | 200 |
Year ending December 31, | ||||
remainder of 2022 | $ | 50 | ||
2023 | 200 | |||
2024 | 200 | |||
2025 | 200 | |||
2026 | 200 |
September 30, | December 31, | |||||||||||||||
March 31, 2022 | December 31, 2021 | 2022 | 2021 | |||||||||||||
Prepayment for property - Lingang | $ | 0 | $ | 42,111 | $ | - | $ | 42,111 | ||||||||
Prepayment for property, plant and equipment and other non-current assets | 1,159 | 440 | 240 | 440 | ||||||||||||
Prepayment for property - lease deposit | 718 | 429 | 385 | 429 | ||||||||||||
Security deposit for land use right | 776 | 773 | 694 | 773 | ||||||||||||
Others | 906 | 1,264 | 1,054 | 1,264 | ||||||||||||
Total other long-term assets | $ | 3,559 | $ | 45,017 | $ | 2,373 | $ | 45,017 |
March 31, 2022 | December 31, 2021 | |||||||
Line of credit up to RMB 100,000 from Bank of Shanghai Pudong Branch, | ||||||||
1)due on June 7,2022 with an annual interest rate of 2.7%. (1) | $ | 4,617 | $ | 4,616 | ||||
Line of credit up to RMB 150,000 from China Everbright Bank, | ||||||||
1)due on October 21,2022 with annual interest rate of 1.95%. | 3,408 | 3,407 | ||||||
Line of credit up to RMB 60,000 from Bank of Communications, | ||||||||
1)due on October 25,2022 with an annual interest rate of 3.85%. | 1,575 | 1,568 | ||||||
Total | $ | 9,600 | $ | 9,591 |
September 30, | December 31, | |||||||
2022 | 2021 | |||||||
Line of credit up to RMB 100,000 from Bank of Shanghai Pudong Branch, | ||||||||
1)due on June 7,2022 with an annual interest rate of 2.7% and fully repaid on June 7, 2022.(1) | $ | - | $ | 4,616 | ||||
Line of credit up to RMB 150,000 from China Everbright Bank, | ||||||||
1)due on October 21,2022 with annual interest rate of 1.95% and fully repaid on September 27, 2022. | - | 3,407 | ||||||
2)due on August 17,2023 with an annual interest rate of 3.40%. | 8,448 | - | ||||||
3)due on September 1,2023 with an annual interest rate of 3.60%. | 8,448 | - | ||||||
Line of credit up to RMB 100,000 from Bank of Communications, | ||||||||
1)due on October 25,2022 with an annual interest rate of 3.85% and fully repaid on July 1, 2022. | - | 1,568 | ||||||
2)due on August 11,2023 with an annual interest rate of 3.60%. | 8,448 | - | ||||||
3)due on September 5,2023 with an annual interest rate of 3.50%. | 5,632 | - | ||||||
Line of credit up to RMB 40,000 from Bank of China, | ||||||||
1)due on August 26,2023 with an annual interest rate of 3.15%. | 5,632 | - | ||||||
Line of credit up to RMB 100,000 from China Merchants Bank, | ||||||||
1)due on July 21,2023 with an annual interest rate of 3.50%. | 1,267 | - | ||||||
2)due on July 27,2023 with an annual interest rate of 3.50%. | 1,267 | - | ||||||
3)due on August 1,2023 with an annual interest rate of 3.50%. | 1,267 | - | ||||||
4)due on August 3,2023 with an annual interest rate of 3.50%. | 1,267 | - | ||||||
5)due on August 7,2023 with an annual interest rate of 3.50%. | 1,267 | - | ||||||
6)due on August 14,2023 with an annual interest rate of 3.50%. | 1,267 | - | ||||||
7)due on August 15,2023 with an annual interest rate of 3.50%. | 1,268 | - | ||||||
8)due on August 21,2023 with an annual interest rate of 3.50%. | 986 | - | ||||||
9)due on August 28,2023 with an annual interest rate of 3.50%. | 1,267 | - | ||||||
10)due on September 13,2023 with an annual interest rate of 3.50%. | 1,267 | - | ||||||
11)due on September 20,2023 with an annual interest rate of 3.50%. | 1,267 | - | ||||||
12)due on September 29,2023 with an annual interest rate of 3.50%. | 423 | - | ||||||
Total | $ | 50,688 | $ | 9,591 |
September 30, | December 31, | |||||||||||||||
March 31, 2022 | December 31, 2021 | 2022 | 2021 | |||||||||||||
Accrued commissions | $ | 11,648 | $ | 12,507 | $ | 13,007 | $ | 12,507 | ||||||||
Accrued warranty | 6,914 | 6,631 | 8,543 | 6,631 | ||||||||||||
Accrued payroll | 8,317 | 5,684 | 6,892 | 5,684 | ||||||||||||
Accrued professional fees | 601 | 785 | 73 | 785 | ||||||||||||
Accrued machine testing fees | 1,094 | 149 | 1,105 | 149 | ||||||||||||
Others | 7,981 | 5,979 | 10,661 | 5,979 | ||||||||||||
Total | $ | 36,555 | $ | 31,735 | $ | 40,281 | $ | 31,735 |
Three Months Ended March 31, | Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | 2022 | 2021 | |||||||||||||||||||
Operating lease cost | $ | 647 | $ | 515 | $ | 776 | $ | 632 | $ | 2,133 | $ | 1,807 | ||||||||||||
Short-term lease cost | 175 | 79 | 162 | 105 | 550 | 258 | ||||||||||||||||||
Lease cost | $ | 822 | $ | 594 | $ | 938 | $ | 737 | $ | 2,683 | $ | 2,065 |
Three Months Ended March 31, | ||||||||
2022 | 2021 | |||||||
Cash paid for amounts included in the measurement of lease liabilities: | ||||||||
Operating cash outflow from operating leases | $ | 822 | $ | 594 |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2022 | 2021 | 2022 | 2021 | |||||||||||||
Cash paid for amounts included in the measurement of lease liabilities: | ||||||||||||||||
Operating cash outflow from operating leases | $ | 938 | $ | 737 | $ | 2,683 | $ | 2,065 |
December 31, | December 31, | |||||||
2022 | $ | 1,858 | ||||||
remainder of 2022 | $ | 412 | ||||||
2023 | 1,265 | 1,303 | ||||||
2024 | 1,018 | 959 | ||||||
2025 | 56 | 61 | ||||||
2026 | 37 | 43 | ||||||
2027 | 4 | 8 | ||||||
Total lease payments | $ | 4,238 | $ | 2,786 | ||||
Less: Interest | (210 | ) | (139 | ) | ||||
Present value of lease liabilities | $ | 4,028 | $ | 2,647 |
September 30, | December 31, | |||||||||||||||
March 31, 2022 | December 31, 2021 | 2022 | 2021 | |||||||||||||
Remaining lease term and discount rate: | ||||||||||||||||
Weighted average remaining lease term (years) | 1.68 | 1.37 | 1.97 | 1.37 | ||||||||||||
Weighted average discount rate | 4.37 | % | 4.54 | % | 4.27 | % | 4.54 | % |
September 30, | December 31, | |||||||||||||||
March 31, 2022 | December 31, 2021 | 2022 | 2021 | |||||||||||||
Loan from China Merchants Bank | $ | 18,051 | $ | 18,390 | $ | 15,368 | $ | 18,390 | ||||||||
Loans from Bank of China | 6,734 | 6,977 | 5,702 | 6,977 | ||||||||||||
Less: Current portion | (2,441 | ) | (2,410 | ) | (2,260 | ) | (2,410 | ) | ||||||||
$ | 22,344 | $ | 22,957 | $ | 18,810 | $ | 22,957 |
Year ending December 31 | ||||||||
2022 | $ | 1,724 | $ | 471 | ||||
2023 | 2,502 | 2,277 | ||||||
2024 | 7,470 | 6,707 | ||||||
2025 | 1,968 | 1,778 | ||||||
2026 and onwards | 11,121 | |||||||
2026 | 1,849 | |||||||
Thereafter | 7,988 | |||||||
$ | 24,785 | $ | 21,070 |
September 30, | December 31, | |||||||||||||||
March 31, 2022 | December 31, 2021 | 2022 | 2021 | |||||||||||||
Subsidies to Stress Free Polishing project, commenced in 2008 and 2017 | $ | 737 | $ | 791 | $ | 372 | $ | 791 | ||||||||
Subsidies to Electro Copper Plating project, commenced in 2014 | 153 | 160 | 123 | 160 | ||||||||||||
Subsidies to other cleaning tools,commenced in 2020 | 979 | 1,014 | ||||||||||||||
Subsidies to other cleaning tools, commenced in 2020 | 882 | 1,014 | ||||||||||||||
Subsidies to SW Lingang R&D development in 2021 | 5,985 | 5,958 | 4,824 | 5,958 | ||||||||||||
Other | 691 | 524 | 459 | 524 | ||||||||||||
Total | $ | 8,545 | $ | 8,447 | $ | 6,660 | $ | 8,447 |
September 30, | December 31, | |||||||||||||||
Equity investee: | March 31, 2022 | December 31, 2021 | 2022 | 2021 | ||||||||||||
Ninebell | $ | 2,945 | $ | 3,051 | $ | 4,447 | $ | 3,051 | ||||||||
Wooil | 1,014 | - | ||||||||||||||
Shengyi | 269 | 211 | 510 | 211 | ||||||||||||
Hefei Shixi | 7,877 | 7,864 | 6,963 | 7,864 | ||||||||||||
Subtotal | 11,091 | 11,126 | 12,934 | 11,126 | ||||||||||||
Other investee: | ||||||||||||||||
Waferworks | 1,575 | 1,568 | 1,408 | 1,568 | ||||||||||||
Nuode Asset Fund | 4,196 | - | ||||||||||||||
Total | $ | 12,666 | $ | 12,694 | $ | 18,538 | $ | 12,694 |
September 30, | December 31, | |||||||||||||||
March 31, 2022 | December 31, 2021 | 2022 | 2021 | |||||||||||||
Trading securities listed in Shanghai Stock Exchange | ||||||||||||||||
Cost | $ | 15,431 | $ | 15,363 | $ | 10,295 | $ | 15,363 | ||||||||
Market value | 25,772 | 29,498 | 14,164 | 29,498 |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2022 | 2021 | 2022 | 2021 | |||||||||||||
(in thousands) | (in thousands) | |||||||||||||||
Unrealized gain (loss) on trading securities | $ | (5,281 | ) | $ | (919 | ) | $ | (9,562 | ) | $ | 1,817 |
Prepaid expenses | March 31, | December 31, | ||||||
2022 | 2021 | |||||||
Ninebell | $ | 4,501 | $ | 2,383 |
Accounts payable | March 31, | December 31, | ||||||
2022 | 2021 | |||||||
Ninebell | $ | 4,982 | $ | 5,703 | ||||
Shengyi | 1,995 | 2,196 | ||||||
Total | $ | 6,977 | $ | 7,899 |
Three Months Ended March 31 | ||||||||
Purchase of materials | 2022 | 2021 | ||||||
Ninebell | $ | 7,379 | $ | 6,882 | ||||
Shengyi | 585 | 358 | ||||||
Total | $ | 7,964 | $ | 7,240 |
Three Months Ended March 31 | ||||||||
Service fee charged by | 2022 | 2021 | ||||||
Shengyi | $ | 34 | $ | 142 | ||||
Total | $ | 34 | $ | 142 |
September 30, | December 31, | |||||||
Advances to related party | 2022 | 2021 | ||||||
Ninebell | $ | 5,158 | $ | 2,383 |
September 30, | December 31, | |||||||
Accounts payable | 2022 | 2021 | ||||||
Ninebell | $ | 4,333 | $ | 5,703 | ||||
Shengyi | 2,256 | 2,196 | ||||||
Total | $ | 6,589 | $ | 7,899 |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
Purchase of materials | 2022 | 2021 | 2022 | 2021 | ||||||||||||
Ninebell | $ | 9,834 | $ | 7,455 | $ | 27,500 | $ | 21,833 | ||||||||
Shengyi | 2,298 | 1,108 | 3,760 | 1,753 | ||||||||||||
Total | $ | 12,132 | $ | 8,563 | $ | 31,260 | $ | 23,586 |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
Service fee charged by | 2022 | 2021 | 2022 | 2021 | ||||||||||||
Shengyi | $ | 277 | $ | 144 | $ | 315 | $ | 403 |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2022 | 2021 | 2022 | 2021 | |||||||||||||
Stock-Based Compensation Expense: | ||||||||||||||||
Cost of revenue | $ | 130 | $ | 108 | $ | 383 | $ | 289 | ||||||||
Sales and marketing expense | 349 | 417 | 1,277 | 1,400 | ||||||||||||
Research and development expense | 666 | 293 | 1,733 | 801 | ||||||||||||
General and administrative expense | 748 | 460 | 1,843 | 1,333 | ||||||||||||
$ | 1,893 | $ | 1,278 | $ | 5,236 | $ | 3,823 |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2022 | 2021 | 2022 | 2021 | |||||||||||||
Stock-based compensation expense by type: | ||||||||||||||||
Employee stock option plan | $ | 1,798 | $ | 1,179 | $ | 4,943 | $ | 3,481 | ||||||||
Non-employee stock option plan | 12 | 12 | 35 | 82 | ||||||||||||
Subsidiary stock option plan | 83 | 87 | 258 | 260 | ||||||||||||
$ | 1,893 | $ | 1,278 | $ | 5,236 | $ | 3,823 |
Number of Option Shares (1) | Weighted Average Grant Date Fair Value | Weighted Average Exercise Price | Weighted Average Remaining Contractual Term | ||||||||||
Outstanding at December 31, 2021 | 8,402,247 | $ | 2.45 | $ | 5.88 | 6.53 years | |||||||
Granted | 1,653,300 | 10.31 | 22.41 | ||||||||||
Exercised | (379,290 | ) | 1.13 | 2.83 | |||||||||
Forfeited/cancelled | (229,650 | ) | 11.61 | 25.51 | |||||||||
Outstanding at September 30, 2022 | 9,446,607 | $ | 3.66 | $ | 8.42 | 6.39 years | |||||||
Vested and exercisable at September 30, 2022 | 6,118,215 |
(1) | Prior period results have been adjusted to reflect the Stock Split effected in March 2022. See Note 1 for details. |
Nine Months Ended | Year-ended | |||||||
September 30, | December 31, | |||||||
2022 (6) | 2021 (6) | |||||||
Fair value of common share(1) | $ | 16.83-25.45 | $ | 27.58-37.33 | ||||
Expected term in years(2) | 5.50-6.25 | 6.25 | ||||||
Volatility(3) | 49.43-50.87 | % | 48.53-49.47 | % | ||||
Risk-free interest rate(4) | 1.7%-3.04 | % | 1.00%-1.44 | % | ||||
Expected dividend(5) | 0 | % | 0 | % |
(1) | Equal to closing value on the grant date. |
(2) | Expected term of share options is based on the average of the vesting period and the contractual term for each grant according to Staff Accounting Bulletin 110. |
(3) | Volatility is calculated based on the historical volatility of ACM’s comparable companies in the period equal to the expected term of each grant. |
(4) | Risk-free interest rate is based on the yields of U.S. Treasury securities with maturities similar to the expected term of the share options in effect at the time of grant. |
(5) | Expected dividend is assumed to be 0% as ACM has no history or expectation of paying a dividend on its common stock. |
(6) | Prior period results have been adjusted to reflect the Stock Split effected in March 2022. See Note 1 for details. |
Number of Option Shares (1) | Weighted Average Grant Date Fair Value | Weighted Average Exercise Price | Weighted Average Remaining Contractual Term | ||||||||||
Outstanding at December 31, 2021 | 2,067,018 | $ | 0.33 | $ | 0.97 | 3.98 years | |||||||
Granted | - | - | - | ||||||||||
Exercised | (384,294 | ) | 0.21 | 0.52 | |||||||||
Expired | - | - | - | ||||||||||
Forfeited/cancelled | (6,510 | ) | 0.19 | 0.43 | |||||||||
Outstanding at September 30, 2022 | 1,676,214 | $ | 0.36 | $ | 1.08 | 3.58 years | |||||||
Vested and exercisable at September 30, 2022 | 1,653,714 |
(1) | Prior period results have been adjusted to reflect the Stock Split effected in March 2022. See Note 1 for details. |
Three Months Ended March 31, | ||||||||
2022 | 2021 | |||||||
Stock-Based Compensation Expense: | ||||||||
Cost of revenue | $ | 113 | $ | 71 | ||||
Sales and marketing expense | 354 | 505 | ||||||
Research and development expense | 411 | 229 | ||||||
General and administrative expense | 496 | 405 | ||||||
$ | 1,374 | $ | 1,210 |
Three Months Ended March 31, | ||||||||
2022 | 2021 | |||||||
Stock-based compensation expense by type: | ||||||||
Employee stock purchase plan | $ | 1,273 | $ | 1,085 | ||||
Non-employee stock purchase plan | 11 | 40 | ||||||
Subsidiary option grants | 90 | 85 | ||||||
$ | 1,374 | $ | 1,210 |
Number of Option Shares (1) | Weighted Average Grant Date Fair Value | Weighted Average Exercise Price | Weighted Average Remaining Contractual Term | ||||||||||
Outstanding at December 31, 2021 | 8,402,247 | 2.45 | 5.88 | 6.53 years | |||||||||
Granted | 853,500 | 11.49 | 25.45 | ||||||||||
Exercised | (273,264 | ) | 0.97 | 2.45 | |||||||||
Forfeited/cancelled | 0 | 0 | 0 | ||||||||||
Outstanding at March 31, 2022 | 8,982,483 | $ | 3.36 | $ | 7.85 | 6.64 years | |||||||
Vested and exercisable at March 31, 2022 | 5,772,480 |
Three-months ended March 31, | Year-ended December 31, | |||||||
2022 (6) | 2021 (6) | |||||||
Fair value of common share(1) | $ | 25.45 | $ | 27.58-37.33 | ||||
Expected term in years(2) | 5.50-6.25 | 6.25 | ||||||
Volatility(3) | 49.43 | % | 48.53-49.47 | % | ||||
Risk-free interest rate(4) | 1.70 | % | 1.00%-1.44 | % | ||||
Expected dividend(5) | 0 | % | 0 | % |
Number of Option Shares (1) | Weighted Average Grant Date Fair Value | Weighted Average Exercise Price | Weighted Average Remaining Contractual Term | ||||||||||
Outstanding at December 31, 2021 | 2,067,018 | 0.33 | 0.97 | 3.98 years | |||||||||
Granted | 0 | 0 | 0 | ||||||||||
Exercised | (152,085 | ) | 0.23 | 0.61 | |||||||||
Expired | 0 | 0 | 0 | ||||||||||
Forfeited/cancelled | (1,413 | ) | 0.16 | 0.37 | |||||||||
Outstanding at March 31, 2022 | 1,913,520 | $ | 0.34 | $ | 1.00 | 3.87 years | |||||||
Vested and exercisable at March 31, 2022 | 1,883,520 |
Number of Option Shares in ACM Shanghai | Weighted Average Grant Date Fair Value | Weighted Average Exercise Price | Weighted Average Remaining Contractual Term | ||||||||||
Outstanding at December 31, 2021 | 5,377,500 | $ | 0.24 | $ | 2.04 | 2.50 years | |||||||
Granted | 0 | 0 | 0 | ||||||||||
Exercised | 0 | 0 | 0 | ||||||||||
Expired | 0 | 0 | 0 | ||||||||||
Forfeited/cancelled | 0 | 0 | 0 | ||||||||||
Outstanding at March 31, 2022 | 5,377,500 | $ | 0.24 | $ | 2.04 | 2.26 years | |||||||
Vested and exercisable at March 31, 2022 | 0 |
Number of Option Shares in ACM Shanghai | Weighted Average Grant Date Fair Value | Weighted Average Exercise Price | Weighted Average Remaining Contractual Term | ||||||||||
Outstanding at December 31, 2021 | 5,377,500 | $ | 0.24 | $ | 2.04 | 2.50 years | |||||||
Outstanding at September 30, 2022 | 5,377,500 | $ | 0.24 | $ | 1.97 | 1.76 years | |||||||
Vested and exercisable at September 30, 2022 | - |
Three Months Ended March 31, | ||||||||
2022 | 2021 | |||||||
Total income tax benefit | $ | 4,011 | $ | 2,770 |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2022 | 2021 | 2022 | 2021 | |||||||||||||
Total income tax benefit (expense) | $ | (10,470 | ) | $ | 266 | $ | (14,138 | ) | $ | 3,021 |
September 30, | December 31, | |||||||
2022 | 2021 | |||||||
Long-lived assets by geography: | ||||||||
Mainland China | $ | 76,964 | $ | 71,534 | ||||
South Korea | 3,053 | 1,324 | ||||||
United States | 20 | 50 | ||||||
Total | $ | 80,037 | $ | 72,908 |
Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations |
• | In 2009 we introduced SAPS megasonic technology, which can be applied in wet wafer cleaning at numerous steps during the chip fabrication process. |
• | In 2016 we introduced TEBO technology, which can be applied at numerous steps during the fabrication of small node conventional two-dimensional and three-dimensional patterned wafers. |
• | In August 2018 we introduced the Ultra-C Tahoe wafer cleaning tool, which delivers high cleaning performance with significantly less sulfuric acid than typically consumed by conventional high temperature single-wafer cleaning tools. |
• | In March 2019 we introduced (a) the Ultra ECP AP or Advanced Wafer Level Packaging tool, a back-end assembly tool used for bumping, or applying copper, tin and nickel to wafers at the die-level prior to packaging, and (b) the Ultra ECP MAP or Multi Anode Plating tool, a front-end process tool that utilizes our proprietary technology to deliver world-class electrochemical copper planting for copper interconnect applications. |
• | In April 2020 we introduced the Ultra Furnace, our first system developed for multiple dry processing applications. |
• | In May 2020 we introduced the Ultra C Family of semi-critical cleaning systems, including the Ultra C b for backside clean, the Ultra C wb automated wet bench, and the Ultra C s scrubber. |
• | In 2011 we formed a |
• | In June 2017 we formed a subsidiary in Hong Kong, CleanChip Technologies Limited, which now is a |
• | In December 2017 we formed a subsidiary in the Republic of Korea, ACM Research Korea CO., LTD., which now is |
• | In March 2019 ACM Shanghai formed a |
• | In August 2021 we formed a |
• | In February 2022, ACM Shanghai formed a |
• | In March 2022, ACM formed a |
• | Space Alternated Phase Shift, or SAPS, technology for flat and patterned (deep via or deep trench with stronger structure) wafer surfaces. SAPS technology employs alternating phases of megasonic waves to deliver megasonic energy in a highly uniform manner on a microscopic level. We have shown SAPS technology to be more effective than conventional megasonic and jet spray technologies in removing random defects across an entire wafer, with increasing relative effectiveness at more advanced production nodes. |
• | Timely Energized Bubble Oscillation, or TEBO, technology for patterned wafer surfaces at advanced process nodes. TEBO technology has been developed to provide effective, damage-free cleaning for 2D and 3D patterned wafers with fine feature sizes. We have demonstrated the damage-free cleaning capabilities of TEBO technology on patterned wafers for feature nodes as small as 1xnm (16 to 19 nanometers, or nm), and we have shown TEBO technology can be applied in manufacturing processes for patterned chips with 3D architectures having aspect ratios as high as 60‑to‑1. |
• | Tahoe technology for cost and environmental savings. Tahoe technology delivers high cleaning performance using significantly less sulfuric acid and hydrogen peroxide than is typically consumed by conventional high-temperature single-wafer cleaning tools. |
• | ECP technology for advanced metal plating. Our Ultra ECP ap, or Advanced Packaging, technology was developed for back-end assembly processes to deliver a more uniform metal layer at the notch area of wafers prior to packaging. Our Ultra ECP map, or Multi-Anode Partial Plating, technology was developed for front-end wafer fabrication processes to deliver advanced electrochemical copper plating for copper interconnect applications. Ultra ECP map offers improved gap-filling performance for ultra-thin seed layer applications, which is critical for advanced nodes at 28nm, 14nm and beyond. |
• | Operations: We conduct substantially all of our product development, manufacturing, support and services in the PRC through ACM Shanghai, and those activities have been directly impacted by |
• | Customers: Our customers’, including the customers of ACM Shanghai, business operations have been, and are continuing to be, subject to business interruptions arising from the COVID–19 pandemic. Historically substantially all of our revenue has been derived from customers located in the PRC and surrounding areas that have been impacted by COVID–19. Two customers that accounted for 48.9% of our revenue in 2021 are based in the PRC, and three customers that accounted for 75.8% of our revenue in 2020, and 73.8% of our revenue in 2019 are based in the PRC and South Korea. One of those customers, Yangtze Memory Technologies Co., Ltd. — which accounted for 20.2% of our 2021 revenue, 26.8% of our 2020 revenue, and 27.5% of our 2019 revenue — is based in Wuhan. While Yangtze Memory Technologies Co., Ltd. and other key customers continued to operate their fabrication facilities without interruption during and after the first quarter of 2020, some customers have been forced to restrict access of service personnel and deliveries to and from their facilities. We have experienced longer and in some cases more costly shipping expenses in the delivery of tools to certain customers. |
• | Suppliers: Our global supply chain includes components sourced from the PRC, Japan, Taiwan, the United States and Europe. While, to date, we have not experienced material issues with our supply chain beyond the logistics related to |
• | Projects: Our strategy includes a number of plans to support the growth of our core business, including ACM Shanghai’s acquisition of a land use right in the Lingang area of Shanghai where |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2022 | 2021 | 2022 | 2021 | |||||||||||||
Revenue | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | ||||||||
Cost of revenue | 50.7 | 55.7 | 53.7 | 57.8 | ||||||||||||
Gross margin | 49.3 | 44.3 | 46.3 | 42.2 | ||||||||||||
Operating expenses: | ||||||||||||||||
Sales and marketing | 9.8 | 9.5 | 9.8 | 10.6 | ||||||||||||
Research and development | 11.7 | 11.7 | 15.8 | 12.9 | ||||||||||||
General and administrative | 4.1 | 5.5 | 5.6 | 6.7 | ||||||||||||
Total operating expenses, net | 25.6 | 26.7 | 31.2 | 30.3 | ||||||||||||
Income from operations | 23.7 | 17.6 | 15.1 | 11.9 | ||||||||||||
Interest income (expense), net | 1.2 | (0.2 | ) | 1.8 | (0.3 | ) | ||||||||||
Realized gain from sale of trading securities | 0.8 | 0.0 | 0.4 | 0.0 | ||||||||||||
Unrealized gain (loss) on trading securities | (3.9 | ) | (1.4 | ) | (3.4 | ) | 1.1 | |||||||||
Other income (expense), net | 5.4 | (0.4 | ) | 3.5 | (0.4 | ) | ||||||||||
Equity income in net income of affiliates | 0.9 | 0.6 | 0.6 | 0.6 | ||||||||||||
Income before income taxes | 28.1 | 16.2 | 18.0 | 12.9 | ||||||||||||
Income tax benefit (expense) | (7.8 | ) | 0.4 | (5.0 | ) | 1.8 | ||||||||||
Net income | 20.3 | 16.6 | 13.0 | 14.8 | ||||||||||||
Less: Net income attributable to non-controlling interests | 4.5 | 1.5 | 3.2 | 1.3 | ||||||||||||
Net income attributable to ACM Research, Inc. | 15.8 | % | 15.1 | % | 9.8 | % | 13.5 | % |
Three Months Ended September 30, | ||||||||||||||||
2022 | 2021 | % Change 2022 v 2021 | Absolute Change 2022 v 2021 | |||||||||||||
` | (in thousands) | |||||||||||||||
Revenue | $ | 133,709 | $ | 67,013 | 99.5 | % | $ | 66,696 | ||||||||
Single wafer cleaning, Tahoe and semi-critical cleaning equipment | $ | 99,720 | $ | 49,448 | 101.7 | % | $ | 50,272 | ||||||||
ECP (front-end and packaging), furnace and other technologies | 24,521 | 8,200 | NM | 16,321 | ||||||||||||
Advanced packaging (excluding ECP), services & spares | 9,468 | 9,365 | 1.1 | % | 103 | |||||||||||
Total Revenue by Product Category | $ | 133,709 | $ | 67,013 | 99.5 | % | $ | 66,696 | ||||||||
Wet-cleaning and other front-end processing tools | $ | 117,941 | $ | 49,448 | 138.5 | % | $ | 68,493 | ||||||||
Advanced packaging, other processing tools, services and spares | 15,768 | 17,565 | -10.2 | % | -1,797 | |||||||||||
Total Revenue Front and Back-End | $ | 133,709 | $ | 67,013 | 99.5 | % | $ | 66,696 |
Three Months Ended September 30, | ||||||||||||||||
2022 | 2021 | % Change 2022 v 2021 | Absolute Change 2022 v 2021 | |||||||||||||
(in thousands) | ||||||||||||||||
Cost of revenue | $ | 67,742 | $ | 37,328 | 81.5 | % | $ | 30,414 | ||||||||
Gross profit | 65,967 | 29,685 | 122.2 | % | 36,282 | |||||||||||
Gross margin | 49.3 | % | 44.3 | % | 11.4 | % | 504 |
Three Months Ended September 30, | ||||||||||||||||
2022 | 2021 | % Change 2022 v 2021 | Absolute Change 2022 v 2021 | |||||||||||||
(in thousands) | ||||||||||||||||
Sales and marketing expense | $ | 13,133 | $ | 6,363 | 106.4 | % | $ | 6,770 | ||||||||
Research and development expense | 15,678 | 7,856 | 99.6 | % | 7,822 | |||||||||||
General and administrative expense | 5,520 | 3,671 | 50.4 | % | 1,849 | |||||||||||
Total operating expenses | $ | 34,331 | $ | 17,890 | 91.9 | % | $ | 16,441 |
Three Months Ended September 30, | ||||||||||||||||
2022 | 2021 | % Change 2022 v 2021 | Absolute Change 2022 v 2021 | |||||||||||||
(in thousands) | ||||||||||||||||
Income from operations | $ | 31,636 | $ | 11,795 | 168.2 | % | $ | 19,841 |
Three Months Ended September 30, | ||||||||||||||||
2022 | 2021 | % Change 2022 v 2021 | Absolute Change 2022 v 2021 | |||||||||||||
(in thousands) | ||||||||||||||||
Interest Income | $ | 2,016 | $ | 33 | 6009.1 | % | $ | 1,983 | ||||||||
Interest Expense | (419 | ) | (191 | ) | 119.4 | % | (228 | ) | ||||||||
Interest Income (expense), net | $ | 1,597 | $ | (158 | ) | -1110.8 | % | $ | 1,755 | |||||||
Other income (expense), net | $ | 7,207 | $ | (255 | ) | -2926.3 | % | $ | 7,462 |
Three Months Ended September 30, | ||||||||||||||||
2022 | 2021 | % Change 2022 v 2021 | Absolute Change 2022 v 2021 | |||||||||||||
(in thousands) | ||||||||||||||||
Realized gain from sale of trading securities | $ | 1,136 | $ | - | 100.0 | % | $ | 1,136 | ||||||||
Unrealized (loss) on trading securities | $ | (5,281 | ) | $ | (919 | ) | 474.6 | % | $ | (4,362 | ) | |||||
Equity income in net income of affiliates | $ | 1,251 | $ | 421 | 197.1 | % | $ | 830 |
Three Months Ended September 30, | ||||||||
2022 | 2021 | |||||||
(in thousands) | ||||||||
Total income tax benefit (expense) | $ | (10,470 | ) | $ | 266 |
Three Months Ended September 30, | ||||||||||||||||
2022 | 2021 | % Change 2022 v 2021 | Absolute Change 2022 v 2021 | |||||||||||||
(in thousands) | ||||||||||||||||
Net income attributable to non-controlling interests | $ | 6,072 | $ | 995 | 510.3 | % | $ | 5,077 |
Three Months Ended September 30, | ||||||||||||||||
2022 | 2021 | % Change 2022 v 2021 | Absolute Change 2022 v 2021 | |||||||||||||
(in thousands) | ||||||||||||||||
Foreign currency translation adjustment | $ | (42,416 | ) | $ | (409 | ) | 10270.7 | % | $ | (42,007 | ) |
Nine Months Ended September 30, | ||||||||||||||||
2022 | 2021 | % Change 2022 v 2021 | Absolute Change 2022 v 2021 | |||||||||||||
(in thousands) | ||||||||||||||||
Revenue | $ | 280,290 | $ | 164,609 | 70.3 | % | $ | 115,681 | ||||||||
Single wafer cleaning, Tahoe and semi-critical cleaning equipment | $ | 198,336 | $ | 127,322 | 55.8 | % | $ | 71,014 | ||||||||
ECP (front-end and packaging), furnace and other technologies | 57,269 | 13,750 | 316.5 | % | 43,519 | |||||||||||
Advanced packaging (excluding ECP), services & spares | 24,685 | 23,537 | 4.9 | % | 1,148 | |||||||||||
Total Revenue By Product Category | $ | 280,290 | $ | 164,609 | 70.3 | % | $ | 115,681 | ||||||||
Wet-cleaning and other front-end processing tools | $ | 229,195 | $ | 127,322 | 80.0 | % | $ | 101,873 | ||||||||
Advanced packaging, other processing tools, services and spares | 51,095 | 37,287 | 37.0 | % | 13,808 | |||||||||||
Total Revenue Front-end and Back-End | $ | 280,290 | $ | 164,609 | 70.3 | % | $ | 115,681 |
Nine Months Ended September 30, | ||||||||||||||||
2022 | 2021 | % Change 2022 v 2021 | Absolute Change 2022 v 2021 | |||||||||||||
(in thousands) | ||||||||||||||||
Cost of revenue | $ | 150,480 | $ | 95,199 | 58.1 | % | $ | 55,281 | ||||||||
Gross profit | $ | 129,810 | $ | 69,410 | 87.0 | % | $ | 60,400 | ||||||||
Gross margin | 46.3 | % | 42.2 | % | 4.15 | % | 415 |
Nine Months Ended September 30, | ||||||||||||||||
2022 | 2021 | % Change 2022 v 2021 | Absolute Change 2022 v 2021 | |||||||||||||
(in thousands) | ||||||||||||||||
Sales and marketing expense | $ | 27,494 | $ | 17,460 | 57.5 | % | $ | 10,034 | ||||||||
Research and development expense | 44,391 | 21,293 | 108.5 | % | 23,098 | |||||||||||
General and administrative expense | 15,560 | 11,081 | 40.4 | % | 4,479 | |||||||||||
Total operating expenses | $ | 87,445 | $ | 49,834 | 75.5 | % | $ | 37,611 |
Nine Months Ended September 30, | ||||||||||||||||
2022 | 2021 | % Change 2022 v 2021 | Absolute Change 2022 v 2021 | |||||||||||||
(in thousands) | ||||||||||||||||
Income from operations | $ | 42,365 | $ | 19,576 | 116.4 | % | $ | 22,789 |
Nine Months Ended September 30, | ||||||||||||||||
2022 | 2021 | % Change 2022 v 2021 | Absolute Change 2022 v 2021 | |||||||||||||
(in thousands) | ||||||||||||||||
Interest Income | $ | 5,965 | $ | 113 | 5178.8 | % | $ | 5,852 | ||||||||
Interest Expense | (986 | ) | (574 | ) | 71.8 | % | (412 | ) | ||||||||
Interest Income (expense), net | $ | 4,979 | $ | (461 | ) | -1180.0 | % | $ | 5,440 | |||||||
Other income (expense), net | $ | 9,949 | $ | (683 | ) | -1556.7 | % | $ | 10,632 |
Nine Months Ended September 30, | ||||||||||||||||
2022 | 2021 | % Change 2022 v 2021 | Absolute Change 2022 v 2021 | |||||||||||||
(in thousands) | ||||||||||||||||
Realized gain from sale of trading securities | $ | 1,136 | $ | - | 100.0 | % | $ | 1,136 | ||||||||
Unrealized gain (loss) on trading securities | $ | (9,562 | ) | $ | 1,817 | -626.3 | % | $ | (11,379 | ) | ||||||
Equity income in net income of affiliates | $ | 1,652 | $ | 1,036 | 59.5 | % | $ | 616 |
Nine Months Ended September 30, | ||||||||
2022 | 2021 | |||||||
(in thousands) | ||||||||
Total income tax benefit (expense) | $ | (14,138 | ) | $ | 3,021 |
Nine Months Ended September 30, | ||||||||||||||||
2022 | 2021 | % Change 2022 v 2021 | Absolute Change 2022 v 2021 | |||||||||||||
(in thousands) | ||||||||||||||||
Net income attributable to non-controlling interests | $ | 8,927 | $ | 2,114 | 322.3 | % | $ | 6,813 |
Nine Months Ended September 30, | ||||||||||||||||
2022 | 2021 | % Change 2022 v 2021 | Absolute Change 2022 v 2021 | |||||||||||||
(in thousands) | ||||||||||||||||
Foreign currency translation adjustment | $ | (80,334 | ) | $ | 1,259 | -6480.8 | % | $ | (81,593 | ) |
September 30, 2022 | December 31, 2021 | |||||||
(In thousands) | ||||||||
Cash and cash equivalents and time deposits: | ||||||||
Cash and cash equivalents | 336,275 | 562,548 | ||||||
Short-term time deposits | 66,176 | - | ||||||
Long-term time deposits | 70,400 | - | ||||||
Total | $ | 472,851 | $ | 562,548 |
Nine Months Ended September 30, | ||||||||
2022 | 2021 | |||||||
(In thousands) | ||||||||
Net Income | $ | 36,381 | $ | 24,306 | ||||
Depreciation and amortization | 4,104 | 1,597 | ||||||
Realized gain on trading securities | (1,136 | ) | - | |||||
Equity income in net income of affiliates | (1,652 | ) | (1,036 | ) | ||||
Unrealized loss (gain) on trading securities | 9,562 | (1,817 | ) | |||||
Deferred income taxes | 5,036 | (4,666 | ) | |||||
Stock-based compensation | 5,236 | 3,823 | ||||||
Net changes in operating assets and liabilities: | (121,061 | ) | (26,029 | ) | ||||
Net cash flow used in operating activities | $ | (63,530 | ) | $ | (3,822 | ) |
Lender | Agreement Date | Maturity Date | Annual Interest Rate | Maximum Borrowing Amount(1) | Amount Outstanding at September 30, 2022 | |||||||||||
(in thousands) | ||||||||||||||||
China Everbright Bank | July 2021 | September 2023 | 3.40%~3.60% | RMB150,000 | RMB120,000 | |||||||||||
$ | 21,120 | $ | 16,896 | |||||||||||||
Bank of Communications | August 2022 | September 2023 | 3.50%~3.60% | RMB100,000 | RMB100,000 | |||||||||||
$ | 14,080 | $ | 14,080 | |||||||||||||
Bank of China | August 2022 | August 2023 | 3.15 | % | RMB40,000 | RMB40,000 | ||||||||||
$ | 5,632 | $ | 5,632 | |||||||||||||
China Merchants Bank | October 2021 | October 2022 | 3.50 | % | RMB100,000 | RMB100,000 | ||||||||||
$ | 14,080 | 14,080.00 | ||||||||||||||
China Merchants Bank | November 2020 | Repayable by installments and the last installments repayable in November 2030 | 3.95 | % | RMB128,500 | RMB109,149 | ||||||||||
$ | 18,093 | $ | 15,368 | |||||||||||||
Bank of China | June 2021 | Repayable by installments and the last installments repayable in June 2024 | 2.60 | % | RMB10,000 | RMB9,000 | ||||||||||
$ | 1,408 | $ | 1,267 | |||||||||||||
Bank of China | September, 2021 | Repayable by installments and the last installments repayable in September 2021 | 2.60 | % | RMB35,000 | RMB31,500 | ||||||||||
$ | 4,928 | $ | 4,435 | |||||||||||||
$ | 79,341 | $ | 71,758 |
(1) | Converted from RMB to dollars as of September 30, 2022. All of the amounts owing under the line of credit with Bank of Shanghai Pudong Branch are guaranteed by CleanChip Technologies LTD, a wholly-owned subsidiary of ACM Shanghai. The loan from China Merchants Bank is secured by a pledge of the property of ACM Shengwei and guaranteed by ACM Shanghai, as described above under “—Contractual Obligations.” |
o | If ACM Shengwei fails to complete the construction pursuant to the date agreed under the Grant Agreement or any extended completion date approved by the Grantor, ACM Shengwei shall pay 50% of the deposit for timely completion of construction as liquidated damages; |
o | If the ACM Shengwei delays the completion for more than six months beyond the date agreed under the Grant Agreement, or beyond any extended completion date approved by the Grantor, it shall pay the total deposit for timely completion of construction as liquidated damages. |
o | If the delay is more than one year, the Grantor is entitled to terminate the Grant Agreement and take back the Land Use Right. In such case, the Grantor shall refund the Grant Fees for the remaining land use term after deducting the deposit agreed under the Grant Agreement and refund the deposit for timely commencement of production and relevant bank interests in full to ACM Shengwei. |
o | If ACM Shengwei fails to commence production pursuant to the date agreed under the Grant Agreement or any extended commencement date approved by the Grantor, ACM Shengwei shall pay the total deposit for timely commencement of production as liquidated damages; |
o | If ACM Shengwei fails to commence production pursuant to the extended commencement of production date, the Grantor is entitled to terminate the Grant Agreement and take back the Land Use Right. In such case, the Grantor shall refund the Grant Fees for the remaining land use term after deducting the deposit agreed under the Grant Agreement to ACM Shengwei. |
● | We define “shipments” of tools to include (a) a “repeat” delivery to a customer of a type of tool that the customer has previously accepted, for which we recognize revenue upon delivery, and (b) a “first-time” delivery of a “first tool” to a customer on an approval basis, for which we may recognize revenue in the future if contractual conditions are met, or if a purchase order is received. |
● | We define “adjusted EBITDA” as |
● | We define “free cash flow” as net cash provided by operating activities less purchases of property and equipment (net of proceeds from disposals) . |
● | We define “adjusted operating income (loss)” as our income (loss) from operations excluding stock-based compensation. |
● | a shipment to a customer of a type of tool that the customer has previously accepted, for which we recognize revenue when the tool is delivered; and |
● | a shipment to a customer of a type of tool that the customer is receiving and evaluating for the first time, in each case a “first tool,” for which we may recognize revenue at a later date, subject to the customer’s acceptance of the tool upon the tool’s satisfaction of applicable contractual requirements or subject to the costumer’s subsequent discretionary commitment to purchase the tool. |
● | adjusted EBITDA excludes depreciation and amortization and, although these are non-cash expenses, the assets being depreciated or amortized may have to be replaced in the future; |
● | we exclude stock-based compensation expense from adjusted EBITDA and adjusted operating income (loss), although (a) it has been, and will continue to be for the foreseeable future, a significant recurring expense for our business and an important part of our compensation strategy and (b) if we did not pay out a portion of our compensation in the form of stock-based compensation, the cash salary expense included in operating expenses would be higher, which would affect our cash position; |
● | the expenses and other items that we exclude in our calculation of adjusted EBITDA may differ from the expenses and other items, if any, that other companies may exclude from adjusted EBITDA when they report their operating results; |
● | adjusted EBITDA does not reflect changes in, or cash requirements for, working capital needs; |
● | adjusted EBITDA does not reflect interest expense, or the requirements necessary to service interest or principal payments on debt; |
● | adjusted EBITDA does not reflect income tax expense (benefit) or the cash requirements to pay taxes; |
● | adjusted EBITDA does not reflect historical cash expenditures or future requirements for capital expenditures or contractual commitments; |
● | although depreciation and amortization charges are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future, and adjusted EBITDA does not reflect any cash requirements for such replacements; and |
● | adjusted EBITDA includes expense reductions and non-operating other income attributable to PRC governmental grants, which may mask the effect of underlying developments in net income, including trends in current expenses and interest expense, and free cash flow includes the PRC governmental grants, the amount and timing of which can be difficult to predict and are outside our control. |
Nine Months Ended September 30, | % Change 2022 v 2021 | Absolute Change 2022 v 2021 | ||||||||||||||
2022 | 2021 | |||||||||||||||
(in thousands) | ||||||||||||||||
Adjusted EBITDA Data: | ||||||||||||||||
Net Income | $ | 36,381 | $ | 24,306 | 49.7 | % | $ | 12,075 | ||||||||
Interest expense (income), net | (4,979 | ) | 461 | -1180.0 | % | (5,440 | ) | |||||||||
Income tax expense (benefit) | 14,138 | (3,021 | ) | -568.0 | % | 17,159 | ||||||||||
Depreciation and amortization | 4,104 | 1,597 | 157.0 | % | 2,507 | |||||||||||
Stock based compensation | 5,236 | 3,823 | 37.0 | % | 1,413 | |||||||||||
Unrealized (gain) loss on trading securities | 9,562 | (1,817 | ) | -626.3 | % | 11,379 | ||||||||||
Adjusted EBITDA | $ | 64,442 | $ | 25,349 | 154.2 | % | $ | 39,093 |
Three Months Ended March 31, | ||||||||
2022 | 2021 | |||||||
(in thousands) | ||||||||
Adjusted EBITDA Data: | ||||||||
Net Income (loss) | $ | (7,443 | ) | $ | 5,822 | |||
Interest expense (income), net | (1,544 | ) | 140 | |||||
Income tax benefit | (4,011 | ) | (2,770 | ) | ||||
Depreciation and amortization | 1,213 | 546 | ||||||
Stock based compensation | 1,374 | 1,210 | ||||||
Unrealized loss on trading securities | 3,858 | 1,047 | ||||||
Adjusted EBITDA | $ | (6,553 | ) | $ | 5,995 |
Three Months Ended March 31, | ||||||||
2022 | 2021 | |||||||
(in thousands) | ||||||||
Free Cash Flow Data: | ||||||||
Net cash used in (provided by) in operating activities | $ | (27,729 | ) | $ | 10,742 | |||
Purchase property and equipment | (3,176 | ) | (1,466 | ) | ||||
Purchase of intangible assets | (408 | ) | (112 | ) | ||||
Free cash flow | $ | (31,313 | ) | $ | 9,164 |
Nine Months Ended September 30, | % Change 2022 v 2021 | Absolute Change 2022 v 2021 | ||||||||||||||
2022 | 2021 | |||||||||||||||
(in thousands) | ||||||||||||||||
Free Cash Flow Data: | ||||||||||||||||
Net cash used in operating activities | $ | (63,530 | ) | $ | (3,822 | ) | 1562.2 | % | $ | (59,708 | ) | |||||
Purchase of property and equipment | (18,417 | ) | (5,059 | ) | 264.0 | % | (13,358 | ) | ||||||||
Free cash flow | $ | (81,947 | ) | $ | (8,881 | ) | 822.7 | % | $ | (73,066 | ) |
Nine Months Ended September 30, | ||||||||||||||||||||||||
2022 | 2021 | |||||||||||||||||||||||
Actual (GAAP) | SBC | Adjusted (Non- GAAP) | Actual (GAAP) | SBC | Adjusted (Non-GAAP) | |||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||
Revenue | $ | 280,290 | $ | - | $ | 280,290 | $ | 164,609 | $ | - | $ | 164,609 | ||||||||||||
Cost of revenue | (150,480 | ) | (383 | ) | (150,097 | ) | (95,199 | ) | (289 | ) | (94,910 | ) | ||||||||||||
Gross profit | 129,810 | (383 | ) | 130,193 | 69,410 | (289 | ) | 69,699 | ||||||||||||||||
Operating expenses: | ||||||||||||||||||||||||
Sales and marketing | (27,494 | ) | (1,277 | ) | (26,217 | ) | (17,460 | ) | (1,400 | ) | (16,060 | ) | ||||||||||||
Research and development | (44,391 | ) | (1,733 | ) | (42,658 | ) | (21,293 | ) | (801 | ) | (20,492 | ) | ||||||||||||
General and administrative | (15,560 | ) | (1,843 | ) | (13,717 | ) | (11,081 | ) | (1,333 | ) | (9,748 | ) | ||||||||||||
Income (loss) from operations | 42,365 | (5,236 | ) | 47,601 | 19,576 | (3,823 | ) | 23,399 |
` | Three Months Ended March 31, | |||||||||||||||||||||||
2022 | 2021 | |||||||||||||||||||||||
Actual (GAAP) | SBC | Adjusted (Non-GAAP) | Actual (GAAP) | SBC | Adjusted (Non-GAAP) | |||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||
Revenue | $ | 42,186 | $ | - | $ | 42,186 | $ | 43,732 | $ | - | $ | 43,732 | ||||||||||||
Cost of revenue | (22,500 | ) | (113 | ) | (22,387 | ) | (25,687 | ) | (71 | ) | (25,616 | ) | ||||||||||||
Gross profit | 19,686 | (113 | ) | 19,799 | 18,045 | (71 | ) | 18,116 | ||||||||||||||||
Operating expenses: | ||||||||||||||||||||||||
Sales and marketing | (6,697 | ) | (354 | ) | (6,343 | ) | (5,308 | ) | (505 | ) | (4,803 | ) | ||||||||||||
Research and development | (17,346 | ) | (411 | ) | (16,935 | ) | (5,504 | ) | (229 | ) | (5,275 | ) | ||||||||||||
General and administrative | (4,949 | ) | (496 | ) | (4,453 | ) | (3,783 | ) | (405 | ) | (3,378 | ) | ||||||||||||
Income (loss) from operations | (9,306 | ) | (1,374 | ) | (7,932 | ) | 3,450 | (1,210 | ) | 4,660 |
Three Months Ended September 30, | ||||||||||||||||||||||||
2022 | 2021 | |||||||||||||||||||||||
Actual (GAAP) | SBC | Adjusted (Non- GAAP) | Actual (GAAP) | SBC | Adjusted (Non-GAAP) | |||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||
Revenue | $ | 133,709 | $ | - | $ | 133,709 | $ | 67,013 | $ | - | $ | 67,013 | ||||||||||||
Cost of revenue | (67,742 | ) | (130 | ) | (67,612 | ) | (37,328 | ) | (108 | ) | (37,220 | ) | ||||||||||||
Gross profit | 65,967 | (130 | ) | 66,097 | 29,685 | (108 | ) | 29,793 | ||||||||||||||||
Operating expenses: | ||||||||||||||||||||||||
Sales and marketing | (13,133 | ) | (349 | ) | (12,784 | ) | (6,363 | ) | (417 | ) | (5,946 | ) | ||||||||||||
Research and development | (15,678 | ) | (666 | ) | (15,012 | ) | (7,856 | ) | (293 | ) | (7,563 | ) | ||||||||||||
General and administrative | (5,520 | ) | (748 | ) | (4,772 | ) | (3,671 | ) | (460 | ) | (3,211 | ) | ||||||||||||
Income (loss) from operations | 31,636 | (1,893 | ) | 33,529 | 11,795 | (1,278 | ) | 13,073 |
Three Months Ended March 31, | ||||||||
2022 | 2021 | |||||||
Revenue | 100.0 | % | 100.0 | % | ||||
Cost of revenue | 53.3 | 58.7 | ||||||
Gross margin | 46.7 | 41.3 | ||||||
Operating expenses: | ||||||||
Sales and marketing | 15.9 | 12.1 | ||||||
Research and development | 41.1 | 12.6 | ||||||
General and administrative | 11.7 | 8.7 | ||||||
Total operating expenses, net | 68.7 | 33.4 | ||||||
Income (loss) from operations | (22.1 | ) | 7.9 | |||||
Interest income (expense), net | 3.7 | (0.3 | ) | |||||
Unrealized loss on trading securities | (9.1 | ) | (2.4 | ) | ||||
Other income (expense), net | 0.6 | 1.1 | ||||||
Equity income (loss) in net income (loss) of affiliates | (0.2 | ) | 0.7 | |||||
Income (loss) before income taxes | (27.1 | ) | 7.0 | |||||
Income tax benefit | 9.5 | 6.3 | ||||||
Net income (loss) | (17.6 | ) | 13.3 | |||||
Less: Net income (loss) attributable to non-controlling interests | (3.9 | ) | 0.8 | |||||
Net income (loss) attributable to ACM Research, Inc. | (13.7 | %) | 12.5 | % |
Three Months Ended March 31, | ||||||||||||
2022 | 2021 | % Change 2022 v 2021 | ||||||||||
| (in thousands) | |||||||||||
Revenue | $ | 42,186 | $ | 43,732 | -3.5 | % | ||||||
Single wafer cleaning, Tahoe and semi-critical cleaning equipment | $ | 26,033 | $ | 32,413 | -19.7 | % | ||||||
ECP (front-end and packaging), furnace and other technologies | 12,248 | 5,550 | 120.7 | % | ||||||||
Advanced packaging (excluding ECP), services & spares | 3,905 | 5,769 | -32.3 | % | ||||||||
Total Revenue By Product Category | $ | 42,186 | $ | 43,732 | -3.5 | % | ||||||
Wet cleaning and other front-end processing tools | $ | 31,702 | $ | 31,900 | -0.6 | % | ||||||
Advanced packaging, other processing tools, services and spares | 10,484 | 11,832 | -11.4 | % | ||||||||
Total Revenue Front-end and Back-End | $ | 42,186 | $ | 43,732 | -3.5 | % |
Three Months Ended March 31, | ||||||||||||
2022 | 2021 | % Change 2022 v 2021 | ||||||||||
(in thousands) | ||||||||||||
Cost of revenue | $ | 22,500 | $ | 25,687 | -12.4 | % | ||||||
Gross profit | 19,686 | 18,045 | 9.1 | % | ||||||||
Gross margin | 46.7 | % | 41.3 | % | 540 bps |
Three Months Ended March 31, | ||||||||||||
2022 | 2021 | % Change 2022 v 2021 | ||||||||||
(in thousands) | ||||||||||||
Sales and marketing expense | $ | 6,697 | $ | 5,308 | 26.2 | % | ||||||
Research and development expense | 17,346 | 5,504 | 215.2 | % | ||||||||
General and administrative expense | 4,949 | 3,783 | 30.8 | % | ||||||||
Total operating expenses | $ | 28,992 | $ | 14,595 | 98.6 | % |
Three Months Ended March 31, | ||||||||||||
2022 | 2021 | % Change 2022 v 2021 | ||||||||||
(in thousands) | ||||||||||||
Unrealized loss on trading securities | $ | (3,858 | ) | $ | (1,047 | ) | 268.5 | % |
Three Months Ended March 31, | ||||||||||||
2022 | 2021 | % Change 2022 v 2021 | ||||||||||
(in thousands) | ||||||||||||
Interest Income | $ | 1,805 | $ | 49 | 3583.7 | % | ||||||
Interest Expense | (261 | ) | (189 | ) | 38.1 | % | ||||||
Interest Income (expense), net | $ | 1,544 | $ | (140 | ) | -1202.9 | % | |||||
Other income (expense), net | $ | 237 | $ | 469 | -49.5 | % |
Three Months Ended March 31, | ||||||||
2022 | 2021 | |||||||
Total income tax benefit | $ | 4,011 | $ | 2,770 |
Three Months Ended March 31, | ||||||||||||
2022 | 2021 | % Change 2022 v 2021 | ||||||||||
(in thousands) | ||||||||||||
Net income (loss) attributable to non-controlling interests and redeemable non-controlling interests | $ | (1,657 | ) | $ | 352 | -570.7 | % |
Lender | Agreement Date | Maturity Date | Annual Interest Rate | Maximum Borrowing Amount(1) | Amount Outstanding at March 31, 2022 | |||||||||||
(in thousands) | ||||||||||||||||
Bank of Shanghai Pudong Branch | June 2021 | June 2022 | 2.70 | % | RMB100,000 | RMB29,313 | ||||||||||
$ | 15,750 | $ | 4,617 | |||||||||||||
China Everbright Bank | July 2021 | October 2022 | 1.95 | % | RMB150,000 | RMB21,637 | ||||||||||
$ | 23,625 | $ | 3,408 | |||||||||||||
Bank of Communications | October 2021 | October 2022 | 3.85 | % | RMB60,000 | RMB10,000 | ||||||||||
$ | 9,450 | $ | 1,575 | |||||||||||||
China Merchants Bank | November 2020 | Repayable by installments and the last installments repayble in November 2030 | 4.65 | % | RMB128,500 | RMB114,611 | ||||||||||
$ | 20,239 | $ | 18,051 | |||||||||||||
Bank of China | June 2021 | Repayable by installments and the last installments repayble in June 2024 | 2.60 | % | RMB10,000 | RMB9,500 | ||||||||||
$ | 1,575 | $ | 1,497 | |||||||||||||
Bank of China | September, 2021 | Repayable by installments and the last installments repayble in September 2021 | 2.60 | % | RMB35,000 | RMB33,250 | ||||||||||
$ | 5,512 | $ | 5,237 | |||||||||||||
$ | 76,151 | $ | 34,385 |
March 31, 2022 | ||||
(in thousands) | ||||
Cash and cash equivalents | $ | 380,311 | ||
Accounts receivable, less allowance for doubtful amounts | 106,351 | |||
Inventory | 271,538 | |||
Working capital | $ | 758,200 |
Item 3. | Quantitative and Qualitative Disclosures About Market Risks |
Item 4. | Controls and Procedures |
Item 1. | Legal Proceedings |
Item | Risk Factors |
• | Intellectual Property. Our commercial success depends in part on our ability to obtain and maintain patent and trade secret protection for our intellectual property, including our SAPS, TEBO, Tahoe, ECP, furnace and other technologies and the design of our Ultra C equipment. See “Risks Related to Our Intellectual Property and Data Security¾Our success depends on our ability to protect our intellectual property, including our SAPS, TEBO, Tahoe, ECP, furnace and other technologies.” in Item 1A, “Risk Factors” of Part I of our Annual Report. The significant majority of our intellectual property has been developed in the PRC and is owned by ACM Shanghai. Implementation and enforcement of intellectual property-related laws in the PRC has historically been lacking due primarily to ambiguities in PRC intellectual property law. See “Risks Related to Our Intellectual Property and Data Security¾We may not be able to protect our intellectual property rights throughout the world, including the PRC, which could materially, negatively affect our business.” in Item 1A, “Risk Factors” of Part I of our Annual Report. In the event PRC central government authorities were to significantly revise or revamp the current scope and structure of intellectual property protection in the PRC, our ability to protect and enforce our intellectual property rights for our key proprietary technologies may be adversely impacted and competitors may be able to match our technologies and tools in order to compete with us. |
• | Title Defect in Leased Premises. We conduct research and development, service support operations, and a portion of our manufacturing at ACM Shanghai’s headquarters located in the Zhangjiang Hi Tech Park in Shanghai, which ACM Shanghai leases from Zhangjiang Group. Zhangjiang Group has not obtained a certificate of property title for the premises, although it has represented to ACM Shanghai that it has the right to rent the premises to ACM Shanghai. If any adjustment in local regional overall planning of Shanghai, or any other reason, results in the demolition of such premises, the premises could not continue to be leased to ACM Shanghai and the day-to-day production and operation of ACM Shanghai would be materially and adversely affected. See Item 2, “Properties” of Part I of our Annual Report. |
• | COVID-19 Pandemic. We conduct substantially all of our product development, manufacturing, support and services in the PRC, and those activities have been directly impacted by COVID-19 and related restrictions on transportation and public appearances, including implementation by PRC government authorities of “spot” and full-city quarantines in the city of Shanghai, where substantially all of our operations are located. Furthermore, a number of our key customers have substantial operations based in operations areas of the PRC, including in the City of Shanghai, which required us to defer, in the first quarter of 2022, shipments of finished products to those customers. Protective measures taken by PRC government authorities in upcoming months could result in closures or reductions of PRC operations or production, whether of ACM Shanghai or of some of its key customers, or other business interruptions, any of which could materially adversely affect our operations. See “Substantially all of our operations, as well as significant operations of a number of our key customers, are located in areas of the PRC impacted by the COVID‑19 pandemic, and our operations have been, and may continue to be, adversely affected by the effects of PRC restrictions imposed as the result of COVID‑19.” in Item 1A, “Risk Factors” of Part II of this report. |
• | Data Security. The Standing Committee of the National People’s Congress, or the Standing Committee, has promulgated the Cyber Security Law, which imposes requirements on entities who build and operate the PRC’s internet architecture or provide services in the PRC over the internet, and the Data Security Law, which imposes data security and privacy obligations on entities and individuals carrying out data activities. The Data Security Law also provides for a national security review procedure for data activities that may affect national security and imposes export restrictions on certain data an information. ACM Shanghai is not subject to the existing restrictions imposed by the Cyber Security Law or the Data Security Law, in part because its business operations do not involve the collection, processing or use of data or information involving personal privacy or private information of customers. In addition, ACM Shanghai is subject to oversight by the Cyberspace Administration of China, or the CAC, regarding data security. ACM Shanghai does not collect or maintain personal information except for routine personal information necessary to process payroll payments and other benefits and emergency contact information, and as a result, ACM Shanghai is not currently subject to significant restrictions or limitations in addressing and managing data security issues and complying with CAC regulations. To date, ACM Shanghai has not been involved in any investigations on cybersecurity review initiated by the CAC or any related PRC central government authority and has not received any inquiry, notice, warning, or sanction in such respect. However, cybersecurity is increasingly a focus of the PRC central government. If the CAC or other PRC central government authorities should in the future require ACM Shanghai to comply with these or additional, or more restrictive, PRC cybersecurity regulations, it could require ACM Shanghai to make changes to its operations, and any failure to satisfy or delay in meeting such requirements may subject ACM Shanghai to restrictions and penalties imposed by the CAC or other PRC regulatory authorities, which may include regulatory actions, fines and penalties on our operations in the PRC, which could materially harm our business, financial condition, results of operations, reputation and prospects. |
• | Anti-Monopoly. A number of PRC laws and regulations have established procedures and requirements that could make merger and acquisition activities in China by foreign investors more time consuming and complex. These laws and regulations, which include the Anti-Monopoly Law and the Rules of the Ministry of Commerce on Implementation of Security Review System of Mergers and Acquisitions of Domestic Enterprises by Foreign Investors, impose requirements that in some instances that MOFCOM be notified in advance of, for example, any change-of-control transaction in which a foreign investor takes control of a PRC domestic enterprise. In addition, such Rules specify that mergers and acquisitions by foreign investors that raise “national defense and security” concerns and mergers and acquisitions through which foreign investors may acquire de facto control over domestic enterprises that raise “national security” concerns are subject to strict review by MOFCOM. In February 2021, the Anti-Monopoly Committee of the State Council published the Anti-Monopoly Guidelines for the Internet Platform Economy Sector, which stipulate that any concentration of undertakings involving VIEs is subject to anti-monopoly review. Those Guidelines provide more stringent rules for Internet platform operators, including regulations on the use of data and algorithms, technology and platform to commit abusive acts. The Measures for the Security Review for Foreign Investment, which was promulgated jointly by National Development and Reform Commission and MOFCOM effective January 18, 2021, and the Standing Committee on Amending the Anti-Monopoly Law of the People’s Republic of China, which was promulgated by the Standing Committee effective August 1, 2022, delineated provisions concerning the security review procedures on foreign investment, including the types of investments subject to review and the scopes and procedures of the review. ACM Shanghai does not have the concentration of business operators stipulated in the Anti-Monopoly Law, and our operations and activities to date have not otherwise subjected us to restrictive provisions or limitations set forth in applicable PRC laws and regulations govern merger and acquisition activities. Among other things, ACM Shanghai’s business operations do not constitute identified “national defense and security” concerns associated with the arms industry, any industry ancillary to the arms industry, or any other field related to national defense security. We cannot assure you, however, that future changes in PRC laws and regulations governing mergers and acquisitions, including activities in the PRC by foreign investors, will not extend or otherwise modify existing requirements, which could materially and adversely affect our PRC-based operations or our ability to expand by investments or acquisitions. |
• | Permits. In the ordinary course of business, ACM Shanghai has obtained all of the permits and licenses it believes are necessary for it to operate in the PRC. ACM Shanghai may be adversely affected, however, by the complexity, uncertainties and changes in PRC laws and regulations applicable to, or otherwise affecting, the semiconductor equipment industry and related businesses, and any lack of requisite approvals, licenses or permits applicable to ACM Shanghai’s business may have a material adverse effect on its business and results of operations. |
• | Trade Policies. Since 2018, general trade tensions between the United States and the PRC have escalated. See “Regulatory Risks —Changes in government trade policies could limit the demand for our tools and increase the cost of our tools.” in Item 1A, “Risk Factors” of Part I of our Annual Report. The imposition of tariffs by the U.S. and PRC governments and the surrounding economic uncertainty may negatively impact the semiconductor industry, including reducing the demand of fabricators for capital equipment such as our tools. Further changes in trade policy, tariffs, additional taxes, restrictions on exports or other trade barriers, or restrictions on supplies, equipment, and raw materials including rare earth minerals, may limit the ability of our customers to manufacture or sell semiconductors or to make the manufacture or sale of semiconductors more expensive and less profitable, which could lead those customers to fabricate fewer semiconductors and to invest less in capital equipment such as our tools. In addition, if the PRC were to impose additional tariffs on raw materials, subsystems or other supplies that we source from the United States, our cost for those supplies would increase. As a result of any of the foregoing events, the imposition or new or additional tariffs may limit our ability to manufacture tools, increase our selling and/or manufacturing costs, decrease margins, or inhibit our ability to sell tools or to purchase necessary equipment and supplies, which could have a material adverse effect on our business, results of operations, or financial conditions. |
Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds |
Sale Date | ||||
Total |
Item 6. | Exhibits |
Exhibit No. | Description | |
Certification of Principal Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | ||
Certification of Principal Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | ||
Certification of Principal Executive Officer and Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | ||
101.INS | Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document) | |
101.SCH | Inline XBRL Taxonomy Extension Schema Document | |
101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document | |
101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document | |
101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document | |
101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document | |
104 | Cover Page Interactive Data File (formatted as inline XBRL and contained in exhibit 101) |
ACM RESEARCH, INC. | |||
Date: | By: | /s/ Mark McKechnie | |
Mark McKechnie | |||
Chief Financial Officer, Executive Vice President and Treasurer (Principal Financial Officer) |