☑ | 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 | Name of Each Exchange on which Registered | ||
Class A Common Stock, $0.0001 par value | ACMR | Nasdaq Global Market |
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 |
PART I. | |||
7 | |||
8 | |||
PART II. | 37 | ||
Item 1A. | |||
37 | |||
Item 6. | 38 | ||
39 |
March 31, 2020 | December 31, 2019 | |||||||
Assets | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 52,283 | $ | 58,261 | ||||
Restricted cash | 58,726 | 59,598 | ||||||
Accounts receivable, less allowance for doubtful accounts of $0 as of March 31, 2020 and $0 as of December 31, 2019 (note 3) | 37,260 | 31,091 | ||||||
Other receivables | 3,236 | 2,603 | ||||||
Inventories (note 4) | 44,987 | 44,796 | ||||||
Prepaid expenses | 1,985 | 2,047 | ||||||
Total current assets | 198,477 | 198,396 | ||||||
Property, plant and equipment, net (note 5) | 3,495 | 3,619 | ||||||
Operating lease right-of-use assets, net (note 8) | 3,547 | 3,887 | ||||||
Intangible assets, net | 307 | 344 | ||||||
Deferred tax assets (note 15) | 5,212 | 5,331 | ||||||
Long-term investments (note 10) | 6,015 | 5,934 | ||||||
Other long-term assets | 155 | 192 | ||||||
Total assets | 217,208 | 217,703 | ||||||
Liabilities, Redeemable Non-controlling Interests and Stockholders’ Equity | ||||||||
Current liabilities: | ||||||||
Short-term borrowings (note 6) | 3,892 | 13,753 | ||||||
Accounts payable | 18,616 | 13,262 | ||||||
Advances from customers | 9,236 | 9,129 | ||||||
Income taxes payable | 3,347 | 3,129 | ||||||
Other payables and accrued expenses (note 7) | 14,331 | 12,874 | ||||||
Current portion of operating lease liability (note 8) | 1,345 | 1,355 | ||||||
Total current liabilities | 50,767 | 53,502 | ||||||
Long-term operating lease liability (note 8) | 2,202 | 2,532 | ||||||
Other long-term liabilities (note 9) | 5,830 | 4,186 | ||||||
Total liabilities | 58,799 | 60,220 | ||||||
Commitments and contingencies (note 17) | ||||||||
Redeemable non-controlling interests (note 13) | 59,467 | 60,162 | ||||||
Stockholders’ equity: | ||||||||
Common stock – Class A, par value $0.0001: 50,000,000 shares authorized as of March 31, 2020 and December 31, 2019; 16,317,346 shares issued and outstanding as of March 31, 2020 and 16,182,151 shares issued and outstanding as of December 31, 2019 (note 12) | 2 | 2 | ||||||
Common stock–Class B, par value $0.0001: 2,409,738 shares authorized as of March 31, 2020 and December 31, 2019; 1,862,608 shares issued and outstanding as of March 31, 2020 and December 31, 2019 (note 12) | - | - | ||||||
Additional paid in capital | 84,351 | 83,487 | ||||||
Accumulated surplus | 17,212 | 15,507 | ||||||
Accumulated other comprehensive loss | (2,623 | ) | (1,675 | ) | ||||
Total stockholders’ equity | 98,942 | 97,321 | ||||||
Total liabilities, redeemable non-controlling interests, and stockholders’ equity | $ | 217,208 | $ | 217,703 |
June 30, 2019 | December 31, 2018 | |
Assets | ||
Current assets: | ||
Cash and cash equivalents | $27,578 | $27,124 |
Accounts receivable, less allowance for doubtful accounts of $0 as of June 30, 2019 and $0 as of December 31, 2018 (note 3) | 31,393 | 24,608 |
Other receivables | 2,388 | 3,547 |
Inventories (note 4) | 45,494 | 38,764 |
Prepaid expenses | 1,547 | 1,985 |
Total current assets | 108,400 | 96,028 |
Property, plant and equipment, net (note 5) | 3,376 | 3,708 |
Operating lease right-of-use assets, net (note 8) | 4,550 | - |
Intangible assets, net | 307 | 274 |
Deferred tax assets (note 15) | 1,635 | 1,637 |
Long-term investments (note 10) | 1,738 | 1,360 |
Other long-term assets | 263 | 40 |
Total assets | 120,269 | 103,047 |
Liabilities and Stockholders’ Equity | ||
Current liabilities: | ||
Short-term borrowings (note 6) | 15,110 | 9,447 |
Accounts payable | 18,238 | 16,673 |
Advances from customers | 5,684 | 8,417 |
Income taxes payable | 1,016 | 1,193 |
Other payables and accrued expenses (note 7) | 11,993 | 10,410 |
Current portion of operating lease liability (note 8) | 1,360 | - |
Total current liabilities | 53,401 | 46,140 |
Long-term operating lease liability (note 8) | 3,190 | - |
Other long-term liabilities (note 9) | 3,963 | 4,583 |
Total liabilities | 60,554 | 50,723 |
Commitments and contingencies (note 16) | ||
Stockholders’ equity: | ||
Common stock – Class A, par value $0.0001: 50,000,000 shares authorized as of June 30, 2019 and December 31, 2018. 14,229,942 shares issued and outstanding as of June 30, 2019 and 14,110,315 shares issued and outstanding as of December 31, 2018 (note 13) | 1 | 1 |
Common stock–Class B, par value $0.0001: 2,409,738 shares authorized as of June 30, 2019 and December 31, 2018. 1,883,423 shares issued and outstanding as of June 30, 2019 and 1,898,423 shares issued and outstanding as of December 31, 2018 (note 13) | - | - |
Additional paid in capital | 58,101 | 56,567 |
Accumulated surplus (deficit) | 2,781 | (3,387) |
Accumulated other comprehensive loss | (1,168) | (857) |
Total stockholders’ equity | 59,715 | 52,324 |
Total liabilities and stockholders’ equity | $120,269 | $103,047 |
Three Months Ended March 31, | ||||||||
2020 | 2019 | |||||||
Revenue | $ | 24,348 | $ | 20,479 | ||||
Cost of revenue | 14,120 | 11,653 | ||||||
Gross profit | 10,228 | 8,826 | ||||||
Operating expenses: | ||||||||
Sales and marketing | 3,005 | 1,869 | ||||||
Research and development | 3,677 | 2,765 | ||||||
General and administrative | 2,328 | 1,941 | ||||||
Total operating expenses, net | 9,010 | 6,575 | ||||||
Income from operations | 1,218 | 2,251 | ||||||
Interest income | 335 | 9 | ||||||
Interest expense | (111 | ) | (139 | ) | ||||
Other income (expense), net | 677 | (261 | ) | |||||
Equity income in net income of affiliates | 148 | 116 | ||||||
Income before income taxes | 2,267 | 1,976 | ||||||
Income tax expense (note 15) | (304 | ) | (119 | ) | ||||
Net income | 1,963 | 1,857 | ||||||
Less: Net income attributable to redeemable non-controlling interests | 258 | - | ||||||
Net income attributable to ACM Research, Inc. | $ | 1,705 | $ | 1,857 | ||||
Comprehensive income: | ||||||||
Net income | 1,963 | 1,857 | ||||||
Foreign currency translation adjustment | (1,900 | ) | 657 | |||||
Comprehensive Income | 63 | 2,514 | ||||||
Less: Comprehensive income attributable to redeemable non-controlling interests | (694 | ) | - | |||||
Comprehensive income attributable to ACM Research, Inc. | $ | 757 | $ | 2,514 | ||||
Net income attributable to ACM Research, Inc. per common share (note 2): | ||||||||
Basic | $ | 0.09 | $ | 0.12 | ||||
Diluted | $ | 0.08 | $ | 0.10 | ||||
Weighted average common shares outstanding used in computing per share amounts (note 2): | ||||||||
Basic | 18,120,363 | 16,044,655 | ||||||
Diluted | 21,066,636 | 18,225,317 |
Common Stock Class A | Common Stock Class B | |||||||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | Additional Paid- in Capital | Accumulated Surplus | Accumulated Other Comprehensive Loss | Total Stockholders’ Equity | |||||||||||||||||||||||||
Balance at December 31, 2019 | 16,182,151 | $ | 2 | 1,862,608 | $ | - | $ | 83,487 | $ | 15,507 | $ | (1,675 | ) | $ | 97,321 | |||||||||||||||||
Net income attributable to ACM Research, Inc. | - | - | - | - | - | 1,705 | - | 1,705 | ||||||||||||||||||||||||
Foreign currency translation adjustment | - | - | - | - | - | - | (948 | ) | (948 | ) | ||||||||||||||||||||||
Exercise of stock options | 70,478 | - | - | - | 175 | - | - | 175 | ||||||||||||||||||||||||
Stock-based compensation | - | - | - | - | 689 | - | - | 689 | ||||||||||||||||||||||||
Exercise of stock warrants | 64,717 | - | - | - | - | - | - | |||||||||||||||||||||||||
Balance at March 31, 2020 | 16,317,346 | $ | 2 | 1,862,608 | $ | - | $ | 84,351 | $ | 17,212 | $ | (2,623 | ) | $ | 98,942 |
Three Months Ended June 30, | Six Months Ended June 30, | |||
2019 | 2018 | 2019 | 2018 | |
Revenue | $29,010 | $20,873 | $49,489 | $30,616 |
Cost of revenue | 15,879 | 12,149 | 27,532 | 16,770 |
Gross profit | 13,131 | 8,724 | 21,957 | 13,846 |
Operating expenses: | ||||
Sales and marketing | 2,924 | 2,682 | 4,793 | 4,537 |
Research and development | 3,341 | 2,419 | 6,106 | 3,960 |
General and administrative | 2,205 | 1,292 | 4,146 | 4,922 |
Total operating expenses, net | 8,470 | 6,393 | 15,045 | 13,419 |
Income from operations | 4,661 | 2,331 | 6,912 | 427 |
Interest income | 24 | 14 | 33 | 17 |
Interest expense | (194) | (149) | (333) | (252) |
Other income, net | 543 | 1,066 | 282 | 311 |
Equity income in net income of affiliates | 153 | 117 | 269 | 118 |
Income before income taxes | 5,187 | 3,379 | 7,163 | 621 |
Income tax expense (note 15) | (876) | (164) | (995) | (186) |
Net income | $4,311 | $3,215 | $6,168 | $435 |
Comprehensive income: | ||||
Net income | 4,311 | 3,215 | 6,168 | 435 |
Foreign currency translation adjustment | (968) | (1,036) | (311) | (331) |
Total comprehensive Income (note 2) | $3,343 | $2,179 | $5,857 | $104 |
Net income per common share (note 2): | ||||
Basic | $0.27 | $0.20 | $0.38 | $0.03 |
Diluted | $0.23 | $0.18 | $0.33 | $0.02 |
Weighted average common shares outstanding used in computing per share amounts (note 2): | ||||
Basic | 16,090,937 | 15,838,540 | 16,067,924 | 15,611,863 |
Diluted | 18,604,347 | 18,119,733 | 18,455,534 | 17,669,650 |
Common Stock Class A | Common Stock Class B | |||||||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | Additional Paid- in Capital | Accumulated Deficit | Accumulated Other Comprehensive Loss | Total Stockholders’ Equity | |||||||||||||||||||||||||
Balance at December 31, 2018 | 14,110,315 | $ | 1 | 1,898,423 | $ | - | $ | 56,567 | $ | (3,387 | ) | $ | (857 | ) | $ | 52,324 | ||||||||||||||||
Net income attributable to ACM Research, Inc. | - | - | - | - | - | 1,857 | - | 1,857 | ||||||||||||||||||||||||
Foreign currency translation adjustment | - | - | - | - | - | - | 657 | 657 | ||||||||||||||||||||||||
Exercise of stock options | 66,375 | - | - | - | 60 | - | - | 60 | ||||||||||||||||||||||||
Stock-based compensation | - | - | - | - | 744 | - | - | 744 | ||||||||||||||||||||||||
Balance at March 31, 2019 | 14,176,690 | $ | 1 | 1,898,423 | - | $ | 57,371 | $ | (1,530 | ) | $ | (200 | ) | $ | 55,642 |
Common | Common | |||||||
Stock Class A | Stock Class B | |||||||
Shares | Amount | Shares | Amount | Additional Paid-in Capital | Accumulated Surplus (Deficit) | Accumulated Other Comprehensive Loss | Total Stockholders’ Equity | |
Balance at April 1, 2019 | 14,176,690 | $1 | 1,898,423 | $- | $57,371 | $(1,530) | $(200) | $55,642 |
Net income | - | - | - | - | - | 4,311 | - | 4,311 |
Foreign currency translation adjustment | - | - | - | - | - | - | (968) | (968) |
Exercise of stock option | 38,252 | - | - | - | 112 | - | - | 112 |
Stock-based compensation | - | - | - | - | 618 | - | - | 618 |
Conversion of class B common shares to Class A common shares | 15,000 | - | (15,000) | - | - | - | - | - |
Balance at June 30, 2019 | 14,229,942 | $1 | 1,883,423 | $- | $58,101 | $2,781 | $(1,168) | $59,715 |
Common | Common | |||||||
Stock Class A | Stock Class B | |||||||
Shares | Amount | Shares | Amount | Additional Paid-in Capital | Accumulated Surplus (Deficit) | Accumulated Other Comprehensive Income (Loss) | Total Stockholders’ Equity | |
Balance at April 1, 2018 | 13,390,270 | $1 | 2,409,738 | $- | 54,915 | $(12,741) | 827 | 43,002 |
Net income | - | - | - | - | - | 3,215 | - | 3,215 |
Foreign currency translation adjustment | - | - | - | - | - | - | (1,036) | (1,036) |
Exercise of stock option | 77,504 | - | - | - | 231 | - | - | 231 |
Stock-based compensation | - | - | - | - | 185 | - | - | 185 |
Conversion of class B common shares to Class A common shares | 489,565 | - | (489,565) | - | - | - | - | - |
Balance at June 30, 2018 | 13,957,339 | $1 | 1,920,173 | $- | 55,331 | $(9,526) | $(209) | 45,597 |
Common Stock Class A | Common Stock Class B | |||||||
Shares | Amount | Shares | Amount | Additional Paid-in Capital | Accumulated Surplus (Deficit) | Accumulated Other Comprehensive Loss | Total Stockholders’ Equity | |
Balance at January 1, 2019 | 14,110,315 | $1 | 1,898,423 | $- | $56,567 | $(3,387) | $(857) | $52,324 |
Net income | - | - | - | - | - | 6,168 | - | 6,168 |
Foreign currency translation adjustment | - | - | - | - | - | - | (311) | (311) |
Exercise of stock option | 104,627 | - | - | - | 172 | - | - | 172 |
Stock-based compensation | - | - | - | - | 1,362 | - | - | 1,362 |
Conversion of class B common shares to Class A common shares | 15,000 | - | (15,000) | - | - | - | - | - |
Balance at June 30, 2019 | 14,229,942 | $1 | 1,883,423 | $- | $58,101 | $2,781 | $(1,168) | $59,715 |
Common Stock Class A | Common Stock Class B | |||||||
Shares | Amount | Shares | Amount | Additional Paid-in Capital | Accumulated Surplus (Deficit) | Accumulated Other Comprehensive Income (Loss) | Total Stockholders’ Equity | |
Balance at January 1, 2018 | 12,935,546 | $1 | 2,409,738 | $- | 49,695 | $(9,961) | 122 | 39,857 |
Net income | - | - | - | - | - | 435 | - | 435 |
Foreign currency translation adjustment | - | - | - | - | - | - | (331) | (331) |
Exercise of stock option | 134,726 | - | - | - | 295 | - | - | 295 |
Stock-based compensation | - | - | - | - | 2,360 | - | - | 2,360 |
Conversion of class B common shares to Class A common shares | 489,565 | - | (489,565) | - | - | - | - | - |
Exercise of common stock warrant issued to SMC | 397,502 | - | - | - | 2,981 | - | - | 2,981 |
Balance at June 30, 2018 | 13,957,339 | $1 | 1,920,173 | $- | 55,331 | $(9,526) | $(209) | 45,597 |
Six Months Ended June 30, | Three Months Ended March 31, | |||||||||
2019 | 2018 | 2020 | 2019 | |||||||
Cash flows from operating activities: | ||||||||||
Net income | $6,168 | $435 | $ | 1,963 | $ | 1,857 | ||||
Adjustments to reconcile net income from operations to net cash used in | ||||||||||
operating activities: | ||||||||||
Adjustments to reconcile net income from operations to net cash used in operating activities: | ||||||||||
Depreciation and amortization | 388 | 173 | 212 | 191 | ||||||
Loss on disposals of property, plant and equipment | 299 | |||||||||
Equity income in net income of affiliates | (269) | (118) | (148 | ) | (116 | ) | ||||
Deferred income taxes | (1) | - | 35 | - | ||||||
Stock-based compensation | 1,362 | 2,360 | 689 | 744 | ||||||
Net changes in operating assets and liabilities: | - | |||||||||
Accounts receivable | (6,837) | (6,858) | (6,902 | ) | 99 | |||||
Other receivables | 1,150 | 1,124 | (683 | ) | 669 | |||||
Inventory | (6,783) | (12,328) | (931 | ) | (2,759 | ) | ||||
Prepaid expenses | 412 | (1,785) | (11 | ) | 190 | |||||
Other long-term assets | (223) | 46 | 36 | - | ||||||
Accounts payable | 1,600 | 10,486 | 5,617 | (3,757 | ) | |||||
Advances from customers | (2,703) | 1,799 | 195 | 45 | ||||||
Income tax payable | (1,011) | 187 | 263 | 15 | ||||||
Other payables and accrued expenses | 2,453 | 632 | 1,779 | 1,013 | ||||||
Other long-term liabilities | (612) | (271) | 1,715 | (1,373 | ) | |||||
Net cash used in operating activities | (4,607) | (4,118) | ||||||||
Net cash provided by (used in) operating activities | 3,829 | (3,182 | ) | |||||||
Cash flows from investing activities: | ||||||||||
Purchase of property and equipment | (325) | (882) | (118 | ) | (115 | ) | ||||
Purchase of intangible assets | (71) | (157) | - | (1 | ) | |||||
Investments in unconsolidated affiliates | (109) | |||||||||
Net cash used in investing activities | (505) | (1,039) | (118 | ) | (116 | ) | ||||
Cash flows from financing activities: | ||||||||||
Proceeds from short-term borrowings | 15,023 | 10,153 | 2,681 | 8,285 | ||||||
Repayments of short-term borrowings | (9,346) | (5,252) | (12,415 | ) | (5,084 | ) | ||||
Proceeds from stock option exercise to common stock | 172 | 295 | 175 | 60 | ||||||
Net cash provided by financing activities | 5,849 | 5,196 | ||||||||
Net cash provided by (used in) financing activities | (9,559 | ) | 3,261 | |||||||
Effect of exchange rate changes on cash and cash equivalents | $(283) | $(285) | ||||||||
Net (decrease) increase in cash and cash equivalents | $454 | $(246) | ||||||||
Effect of exchange rate changes on cash, cash equivalents and restricted cash | $ | (1,002 | ) | $ | 280 | |||||
Net increase (decrease) in cash, cash equivalents and restricted cash | $ | (6,850 | ) | $ | 243 | |||||
Cash and cash equivalents at beginning of period | 27,124 | 17,681 | ||||||||
Cash and cash equivalents at end of period | $27,578 | $17,435 | ||||||||
Cash, cash equivalents and restricted cash at beginning of period | 117,859 | 27,124 | ||||||||
Cash, cash equivalents and restricted cash at end of period | $ | 111,009 | $ | 27,367 | ||||||
Supplemental disclosure of cash flow information: | ||||||||||
Interest paid | $333 | $252 | $ | 111 | $ | 139 | ||||
Reconciliation of cash, cash equivalents and restricted cash in condensed consolidated statements of cash flows: | ||||||||||
Cash and cash equivalents | 52,283 | 27,367 | ||||||||
Restricted cash | 58,726 | - | ||||||||
Cash, cash equivalents and restricted cash | $ | 111,009 | $ | 27,367 | ||||||
Non-cash financing activities: | ||||||||||
Warrant conversion to common stock | $ | 399 | $ | - |
Effective interest held as at | |||||||||
Name of subsidiaries | Place and date of incorporation | March 31, 2020 | December 31, 2019 | ||||||
ACM Research (Shanghai), Inc. | China, May 2006 | 91.7 | % | 91.7 | % | ||||
ACM Research (Wuxi), Inc. | China, July 2011 | 91.7 | % | 91.7 | % | ||||
CleanChip Technologies Limited | Hong Kong, June 2017 | 91.7 | % | 91.7 | % | ||||
ACM Research Korea CO., LTD. | Korea, December 2017 | 91.7 | % | 91.7 | % | ||||
Shangwei Research (Shanghai), Inc. | China, March 2019 | 91.7 | % | 91.7 | % | ||||
ACM Research (CA), Inc. | USA, June 2019 | 91.7 | % | 91.7 | % | ||||
ACM Research (Cayman), Inc. | Cayman Islands, April 2019 | 100.0 | % | 100.0 | % |
Three Months Ended June 30, | Six Months Ended June 30, | Three Months Ended March 31, | ||||||||||
2019 | 2018 | 2019 | 2018 | 2020 | 2019 | |||||||
Numerator: | ||||||||||||
Net income | $4,311 | $3,215 | $6,168 | $435 | $ | 1,963 | $ | 1,857 | ||||
Denominator: | ||||||||||||
Net income attributable to redeemable non-controlling interest | 258 | - | ||||||||||
Net income available to common stockholders, basic and diluted | $ | 1,705 | $ | 1,857 | ||||||||
Weighted average shares outstanding, basic | 16,090,937 | 15,838,540 | 16,067,924 | 15,611,863 | 18,120,363 | 16,044,655 | ||||||
Effect of dilutive securities | 2,513,410 | 2,281,193 | 2,387,610 | 2,057,787 | 2,946,273 | 2,180,662 | ||||||
Weighted average shares outstanding, diluted | 18,604,347 | 18,119,733 | 18,455,534 | 17,669,650 | 21,066,636 | 18,225,317 | ||||||
Net income per common share: | ||||||||||||
Basic | $0.27 | $0.20 | $0.38 | $0.03 | $ | 0.09 | $ | 0.12 | ||||
Diluted | $0.23 | $0.18 | $0.33 | $0.02 | $ | 0.08 | $ | 0.10 |
The Company is potentially subject to concentrations of credit risks in its accounts receivable. For the three months ended March 31, 2020 and 2019, the Company’s three largest customers for the period accounted for 97.4% and 62.7% of revenue. As of March 31, 2020 and December 31, 2019 the Company’s three largest customers accounted for 76.1% and 67.7% respectively, of the Company’s accounts receivables. The Company believes that the receivable balances from these largest customers do not represent a significant credit risk based on past collection experience.
June 30, | December 31, | |||||||||
2019 | 2018 | March 31, 2020 | December 31, 2019 | |||||||
Accounts receivable | $31,393 | $24,608 | $ | 37,260 | $ | 31,091 | ||||
Less: Allowance for doubtful accounts | - | - | - | - | ||||||
Total | $31,393 | $24,608 | $ | 37,260 | $ | 31,091 |
June 30, 2019 | December 31, 2018 | March 31, 2020 | December 31, 2019 | |||||||
Raw materials | $17,425 | $12,646 | $ | 15,796 | $ | 15,105 | ||||
Work in process | 15,103 | 9,631 | 17,622 | 10,407 | ||||||
Finished goods | 12,966 | 16,487 | 11,569 | 19,284 | ||||||
Total inventory, gross | 45,494 | 38,764 | ||||||||
Inventory reserve | - | |||||||||
Total inventory, net | $45,494 | $38,764 | ||||||||
Total inventory | $ | 44,987 | $ | 44,796 |
June 30, | December 31, | |||||||||
2019 | 2018 | March 31, 2020 | December 31, 2019 | |||||||
Manufacturing equipment | $3,948 | $9,703 | $ | 3,883 | $ | 3,902 | ||||
Office equipment | 601 | 512 | 685 | 627 | ||||||
Transportation equipment | 126 | 184 | 170 | 124 | ||||||
Leasehold improvement | 1,424 | 1,379 | 1,425 | 1,442 | ||||||
Total cost | 6,099 | 11,778 | 6,163 | 6,095 | ||||||
Less: Total accumulated depreciation | (2,831) | (8,102) | (3,266 | ) | (3,077 | ) | ||||
Construction in progress | 108 | 32 | 598 | 601 | ||||||
Total property, plant and equipment, net | $3,376 | $3,708 | $ | 3,495 | $ | 3,619 |
June 30, 2019 | December 31, 2018 | |
Line of credit up to RMB 50,000 from Bank of Shanghai Pudong Branch, due on April 17,2019 with an annual interest rate of 4.99%, guaranteed by the Company’s CEO and fully repaid on March 27, 2019. | $- | $3,133 |
Line of credit up to RMB 50,000 from Bank of Shanghai Pudong Branch, due on February 14,2019 with an annual interest rate of 5.15%, guaranteed by the Company’s CEO and fully repaid on February 14, 2019. | - | 485 |
Line of credit up to RMB 50,000 from Bank of Shanghai Pudong Branch, due on January 23, 2020 with an annual interest rate of 5.22%, guaranteed by the Company’s CEO and Cleanchip Technologies Limited. | 3,565 | |
Line of credit up to RMB 30,000 from Bank of China Pudong Branch, due on June 6,2019 with annual interest rate of 5.22%,secured by certain of the Company’s intellectual property and the Company’s CEO and fully repaid on June 6,2019. | - | 2,186 |
Line of credit up to RMB 30,000 from Bank of China Pudong Branch, due on June 13,2019 with annual interest rate of 5.22%,secured by certain of the Company’s intellectual property and the Company’s CEO and fully repaid on June 13,2019. | - | 2,186 |
Line of credit up to RMB 10,000 from Shanghai Rural Commercial Bank, due on January 23, 2019 with an annual interest rate of 5.44%, guaranteed by the Company’s CEO and pledged by accounts receivable,and fully repaid on January 23, 2019. | - | 1,457 |
Line of credit up to RMB 20,000 from Shanghai Rural Commercial Bank, due on February 21, 2020 with an annual interest rate of 5.66%, guaranteed by the Company’s CEO and pledged by accounts receivable. | 1,455 | |
Line of credit up to RMB 20,000 from Bank of Communications, due on January 18, 2020 with an annual interest rate of 5.66%. | 1,455 | |
Line of credit up to RMB 20,000 from Bank of Communications, due on January 22, 2020 with an annual interest rate of 5.66%. | 728 | |
Line of credit up to RMB 20,000 from Bank of Communications, due on February 14, 2020 with an annual interest rate of 5.66%. | 728 | |
Line of credit up to RMB 50,000 from China Everbright Bank, due on March 25, 2020 with an annual interest rate of 4.94%, guaranteed by the Company’s CEO. | 3,251 | |
Line of credit up to RMB 50,000 from China Everbright Bank, due on April 17, 2020 with an annual interest rate of 5.66%, guaranteed by the Company’s CEO. | 1,164 | |
Line of credit up to RMB 50,000 from China Everbright Bank, due on June 26, 2020 with an annual interest rate of 5.66%, guaranteed by the Company’s CEO. | 2,764 | |
Total | $15,110 | $9,447 |
March 31, 2020 | December 31, 2019 | |||||||
Line of credit up to RMB 50,000 from Bank of Shanghai Pudong Branch, due on January 23, 2020 with an annual interest rate of 5.22%, guaranteed by the Company’s CEO and Cleanchip Technologies Limited.It was fully repaid on January 23, 2020. | - | 5,057 | ||||||
Line of credit up to RMB 20,000 from Shanghai Rural Commercial Bank, due on February 21, 2020 with an annual interest rate of 5.66%, guaranteed by the Company’s CEO and pledged by accounts receivable.It was fully repaid on February 21, 2020. | - | 1,433 | ||||||
Line of credit up to RMB 20,000 from Bank of Communications, due on January 18, 2020 with an annual interest rate of 5.66% and fully repaid on January 19, 2020. | - | 1,433 | ||||||
Line of credit up to RMB 20,000 from Bank of Communications, due on January 22, 2020 with an annual interest rate of 5.66% and fully repaid on January 22, 2020. | - | 717 | ||||||
Line of credit up to RMB 20,000 from Bank of Communications, due on February 14, 2020 with an annual interest rate of 5.66% and fully repaid on February 14, 2020. | - | 717 | ||||||
Line of credit up to RMB 50,000 from China Everbright Bank, due on March 25, 2020 with an annual interest rate of 4.94%, guaranteed by the Company’s CEO and fully repaid on March 24, 2020. | - | 3,250 | ||||||
Line of credit up to RMB 50,000 from China Everbright Bank, due on April 17, 2020 with an annual interest rate of 5.66%, guaranteed by the Company’s CEO. | 1,129 | 1,146 | ||||||
Line of credit up to RMB 50,000 from China Everbright Bank, due on August 24, 2020 with an annual interest rate of 5.22%, guaranteed by the Company’s CEO. | 2,681 | |||||||
Line of credit up to KRW 500,000 from Industrial Bank of Korea (IBK), due on July 11, 2020 with an annual interest rate of 4.17%, guaranteed by the ACM-KOREA CEO. | 82 | |||||||
Total | $ | 3,892 | $ | 13,753 |
June 30, 2019 | December 31, 2018 | March 31, 2020 | December 31, 2019 | |||||||
Lease expenses and payable for leasehold improvement due to a related party (note 11) | $52 | $53 | ||||||||
Accrued commissions | 2,455 | 2,931 | $ | 4,593 | $ | 4,082 | ||||
Accrued warranty | 2,338 | 1,710 | 3,092 | 2,811 | ||||||
Accrued payroll | 1,392 | 626 | 2,775 | 2,092 | ||||||
Accrued professional fees | 234 | 64 | 403 | 165 | ||||||
Accrued machine testing fees | 2,859 | 3,076 | 1,424 | 1,456 | ||||||
Others | 2,663 | 1,950 | 2,044 | 2,268 | ||||||
Total | $11,993 | $10,410 | $ | 14,331 | $ | 12,874 |
Three Months Ended March 31, | ||||||||||
Three months ended June 30, 2019 | Six months ended June 30, 2019 | 2020 | 2019 | |||||||
Operating lease cost | $264 | $701 | $ | 377 | $ | 437 | ||||
Short-term lease cost | 7 | 25 | 50 | 18 | ||||||
Lease cost | $271 | $726 | $ | 427 | $ | 455 |
Three months ended June 30, 2019 | Six months ended June 30, 2019 | |
Cash paid for amounts included in the measurement of lease liabilities: | ||
Operating cash outflow from operating leases | 271 | 726 |
Three Months Ended March 31, | ||||||||
2020 | 2019 | |||||||
Cash paid for amounts included in the measurement of lease liabilities: | ||||||||
Operating cash outflow from operating leases | $ | 427 | $ | 455 |
December 31 | |
2019 | $728 |
2020 | 1,488 |
2021 | 1,475 |
2022 | 1,495 |
2023 | 53 |
2024 | 13 |
Total lease payments | 5,252 |
Less: Interest | (702) |
Present value of lease liabilities | $4,550 |
December 31, | ||||
2020 | $ | 1,128 | ||
2021 | 1,488 | |||
2022 | 1,495 | |||
2023 | 53 | |||
2024 | 13 | |||
Total lease payments | 4,177 | |||
Less: Interest | (630 | ) | ||
Present value of lease liabilities | $ | 3,547 |
March 31, 2020 | December 31, 2019 | |||||||
Remaining lease term and discount rate: | ||||||||
Weighted average remaining lease term (years) | 2.80 | 3.02 | ||||||
Weighted average discount rate | 5.43 | % | 5.43 | % |
March 31, 2020 | December 31, 2019 | |||||||
Subsidies to Stress Free Polishing project, commenced in 2008 and 2017 | $ | 1,191 | $ | 1,251 | ||||
Subsidies to Electro Copper Plating project, commenced in 2014 | 2,445 | 2,666 | ||||||
Subsidies to Polytetrafluoroethylene, commenced in 2018 | 123 | 135 | ||||||
Subsidies to Tahoe-Single Bench Clean,commenced in 2020 | 1,910 | - | ||||||
Other | 161 | 134 | ||||||
Total | $ | 5,830 | $ | 4,186 |
June 30, 2019 | December 31, 2018 | |
Subsidies to Stress Free Polishing project, commenced in 2008 and 2017 | $1,362 | $1,483 |
Subsidies to Electro Copper Plating project, commenced in 2014 | 2,370 | 2,860 |
Subsidies to Polytetrafluoroethylene, commenced in 2018 | 158 | 178 |
Other | 73 | 62 |
Total | $3,963 | $4,583 |
June 30, 2019 | December 31, 2018 | |
Investment – equity method | $1,629 | $1,360 |
Investment – cost method | 109 | - |
Total | $1,738 | $1,360 |
March 31, 2020 | December 31, 2019 | |||||||
Ninebell | $ | 1,694 | $ | 1,538 | ||||
Shengyi | 109 | 107 | ||||||
Hefei Shixi | 4,212 | 4,289 | ||||||
Total | $ | 6,015 | $ | 5,934 |
Three months ended March 31 | ||||||||
Purchase of materials | 2020 | 2019 | ||||||
Ninebell | $ | 2,153 | $ | 2,320 | ||||
Shengyi | 58 | - | ||||||
Total | $ | 2,211 | $ | 2,320 | ||||
Prepaid expenses | March 31, 2020 | December 31, 2019 | ||||||
Ninebell | $ | 648 | $ | 348 | ||||
Accounts payable | March 31, 2020 | December 31, 2019 | ||||||
Ninebell | $ | 2,604 | $ | 727 | ||||
Shengyi | 189 | 488 | ||||||
Total | $ | 2,793 | $ | 1,215 |
Balance at December 31, 2019 | $ | 60,162 | ||
Net income attributable to redeemable non-controlling interests | 258 | |||
Effect of foreign currency translation loss attributable to redeemable non-controlling interests | (953 | ) | ||
Balance at March 31, 2020 | $ | 59,467 |
Three Months Ended March 31, | ||||||||
2020 | 2019 | |||||||
Stock-Based Compensation Expense: | ||||||||
Cost of revenue | $ | 45 | $ | 30 | ||||
Sales and marketing expense | 94 | 34 | ||||||
Research and development expense | 187 | 86 | ||||||
General and administrative expense | 363 | 594 | ||||||
$ | 689 | $ | 744 |
Three Months Ended March 31, | ||||||||
2020 | 2019 | |||||||
Stock-based compensation expense by type: | ||||||||
Employee stock purchase plan | $ | 431 | $ | 221 | ||||
Non-employee stock purchase plan | 172 | 523 | ||||||
Subsidiary option grants | 86 | - | ||||||
$ | 689 | $ | 744 |
Number of Option Share | Weighted Average Grant Date Fair Value | Weighted Average Exercise Price | Weighed Average Remaining Contractual Term | |
Outstanding at December 31, 2018 | 2,503,405 | 0.91 | 4.09 | 7.30 years |
Granted | 295,000 | 6.50 | 16.81 | |
Exercised | (48,098) | 0.78 | 2.62 | |
Expired | (628) | 0.55 | 3.00 | |
Forfeited | (4,085) | 1.90 | 4.83 | |
Outstanding at June 30, 2019 | 2,745,594 | 2.07 | 5.48 | 7.14 years |
Vested and exercisable at June 30, 2019 | 1,608,352 |
Number of Option Share | Weighted Average Grant Date Fair Value | Weighted Average Exercise Price | Weighed Average Remaining Contractual Term | ||||||||||
Outstanding at December 31, 2019 | 2,994,063 | $ | 2.59 | $ | 6.77 | 7.05 years | |||||||
Granted | 20,000 | 9.11 | 22.95 | ||||||||||
Exercised | (26,032 | ) | 1.31 | 3.60 | |||||||||
Expired | - | - | - | ||||||||||
Forfeited/cancelled | (22,000 | ) | 6.46 | 16.74 | |||||||||
Outstanding at March 31, 2020 | 2,966,031 | $ | 2.61 | $ | 6.83 | 6.81 years | |||||||
Vested and exercisable at March 31, 2020 | 1,859,052 |
Number of Option Shares | Weighted Average Grant Date Fair Value | Weighted Average Exercise Price | Weighted Average Remaining Contractual Term | |
Outstanding at December 31, 2018 | 1,212,374 | $0.78 | $2.57 | 6.66 years |
Granted | - | - | - | - |
Exercised | (56,529) | 0.33 | 0.81 | - |
Expired | - | - | - | - |
Forfeited | - | - | - | - |
Outstanding at June 30, 2019 | 1,155,845 | $0.81 | $2.66 | 6.62 years |
Vested and exercisable at June 30, 2019 | 986,572 |
Number of Option Shares | Weighted Average Grant Date Fair Value | Weighted Average Exercise Price | Weighted Average Remaining Contractual Term | ||||||||||
Outstanding at December 31, 2019 | 1,101,613 | $ | 0.82 | $ | 2.69 | 5.85 years | |||||||
Granted | 20,000 | 10.29 | 25.60 | ||||||||||
Exercised | (44,446 | ) | 0.44 | 1.82 | |||||||||
Expired | - | ||||||||||||
Forfeited/cancelled | - | ||||||||||||
Outstanding at March 31, 2020 | 1,077,167 | $ | 1.01 | $ | 3.15 | 5.75 years | |||||||
Vested and exercisable at March 31, 2020 | 1,007,076 |
Number of Option Shares in ACM Shanghai | Weighted Average Grant Date Fair Value | Weighted Average Exercise Price | Weighed Average Remaining Contractual Term | ||||||||||
Outstanding at December 31, 2019 | - | $ | - | $ | - | - | |||||||
Granted | 5,869,808 | 0.22 | 1.87 | ||||||||||
Exercised | - | - | - | ||||||||||
Expired | - | - | - | ||||||||||
Forfeited/cancelled | (192,308 | ) | 0.23 | 1.87 | |||||||||
Outstanding at March 31, 2020 | 5,677,500 | $ | 0.22 | $ | 1.87 | 4.26 years | |||||||
Vested and exercisable at March 31, 2020 | - |
Three Months Ended March 31, | ||||||||
2020 | 2019 | |||||||
(in thousands) | ||||||||
Current: | ||||||||
U.S. federal | $ | (10 | ) | $ | - | |||
U.S. state | - | - | ||||||
Foreign | (257 | ) | - | |||||
Total current tax expense | (267 | ) | - | |||||
Deferred: | ||||||||
U.S. federal | (28 | ) | - | |||||
U.S. state | - | - | ||||||
Foreign | (9 | ) | (119 | ) | ||||
Total deferred tax benefit | (37 | ) | (119 | ) | ||||
Total income tax expense | $ | (304 | ) | $ | (119 | ) |
● | Space Alternated Phase Shift, or SAPS, technology for flat and patterned wafer surfaces, which employs alternating phases of megasonic waves to deliver megasonic energy in a highly uniform manner on a microscopic level; |
● | Timely Energized Bubble Oscillation, or TEBO, technology for patterned wafer surfaces at advanced process nodes, which provides effective, damage-free cleaning for 2D and 3D patterned wafers with fine feature sizes; |
● | Tahoe technology for cost and environmental savings, which delivers high cleaning performance using significantly less sulfuric acid and hydrogen peroxide than is typically consumed by conventional high-temperature single-wafer cleaning tools; and |
● | Electro-Chemical Plating, or ECP, technology for advanced metal plating, which includes Ultra ECP AP, or Advanced Packaging, technology for back-end assembly processes and Ultra ECP MAP, or Multi-Anode Partial Plating, technology for front-end wafer fabrication processes. |
● | a listing, which we refer to as the STAR Listing, of shares of ACM Shanghai on the Shanghai Stock Exchange’s Sci-Tech innovAtion boaRd, known as the STAR Market; and |
● | a concurrent initial public offering, which we refer to as the STAR IPO, of ACM Shanghai shares in the People’s Republic of China, or the PRC, at a pre-offering valuation of not less than RMB 5.15 billion ($747.1 million). |
● | In June 2019 ACM Shanghai entered into agreements with seven investors, or the First Tranche Investors, pursuant to which the First Tranche Investors purchased ACM Shanghai shares for a total of RMB 187.9 million ($27.3 million as of June 12, 2019). |
● | In November 2019 ACM Shanghai entered into agreements with each of the First Tranche Investors and eight PRC-based investment firms, or the Second Tranche Investors, pursuant to which the Second Tranche Investors subsequently purchased ACM Shanghai shares, or the Second Tranche Shares, for a total of RMB 228.2 million ($32.4 million as of November 29, 2019). The purchase price per Second Tranche Share was equal to the purchase price per share paid by the First Tranche Investors and was based on a pre-investment enterprise valuation of ACM Shanghai of RMB 4.84 billion ($688.9 million as of November 29, 2019). |
Three Months Ended March 31, | ||||||||
2020 | 2019 | |||||||
(in thousands) | ||||||||
Adjusted EBITDA Data: | ||||||||
Net income | $ | 1,963 | $ | 1,857 | ||||
Interest expense (income), net | (224 | ) | 130 | |||||
Income tax expense | 304 | 119 | ||||||
Depreciation and amortization | 212 | 191 | ||||||
Stock based compensation | 689 | 744 | ||||||
Adjusted EBITDA | $ | 2,944 | $ | 3,041 |
Six Months Ended June 30, | ||
2019 | 2018 | |
(in thousands) | ||
Adjusted EBITDA Data: | ||
Net Income | $6,168 | $435 |
Interest expense, net | 300 | 235 |
Income tax expense | 995 | 186 |
Depreciation and amortization | 388 | 173 |
Stock based compensation | 1,362 | 2,360 |
Adjusted EBITDA | $9,213 | $3,389 |
Six Months Ended June 30, | Three Months Ended March 31, | |||||||||
2019 | 2018 | 2020 | 2019 | |||||||
(in thousands) | (in thousands) | |||||||||
Free Cash Flow Data: | ||||||||||
Net cash used in operating activities | $(4,607) | $(4,118) | ||||||||
Net cash flow provided (used) by operating activities | $ | 3,829 | $ | (3,182 | ) | |||||
Purchase of property and equipment | (325) | (882) | (118 | ) | (115 | ) | ||||
Purchase of intangible assets | (71) | (157) | - | (1 | ) | |||||
Free cash flow | $(5,003) | $(5,157) | $ | 3,711 | $ | (3,298 | ) |
Three Months Ended March 31, | ||||||||||||||||||||||||
2020 | 2019 | |||||||||||||||||||||||
Actual (GAAP) | SBC | Adjusted (Non-GAAP) | Actual (GAAP) | SBC | Adjusted (Non-GAAP) | |||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||
Revenue | $ | 24,348 | $ | - | $ | 24,348 | $ | 20,479 | $ | - | $ | 20,479 | ||||||||||||
Cost of revenue | (14,120 | ) | (45 | ) | (14,075 | ) | (11,653 | ) | (30 | ) | (11,623 | ) | ||||||||||||
Gross profit | 10,228 | (45 | ) | 10,273 | 8,826 | (30 | ) | 8,856 | ||||||||||||||||
Operating expenses: | ||||||||||||||||||||||||
Sales and marketing | (3,005 | ) | (94 | ) | (2,911 | ) | (1,869 | ) | (34 | ) | (1,835 | ) | ||||||||||||
Research and development | (3,677 | ) | (187 | ) | (3,490 | ) | (2,765 | ) | (86 | ) | (2,679 | ) | ||||||||||||
General and administrative | (2,328 | ) | (363 | ) | (1,965 | ) | (1,941 | ) | (594 | ) | (1,347 | ) | ||||||||||||
Income (loss) from operations | $ | 1,218 | $ | (689 | ) | $ | 1,907 | $ | 2,251 | $ | (744 | ) | $ | 2,995 |
Three Months Ended June 30, | ||||||
2019 | 2018 | |||||
Actual (GAAP) | SBC | Adjusted (Non-GAAP) | Actual (GAAP) | SBC | Adjusted (Non-GAAP) | |
(in thousands) | ||||||
Revenue | $29,010 | $- | $29,010 | $20,873 | $- | $20,873 |
Cost of revenue | (15,879) | (29) | (15,850) | (12,149) | (11) | (12,138) |
Gross profit | 13,131 | (29) | 13,160 | 8,724 | (11) | 8,735 |
Operating expenses: | ||||||
Sales and marketing | (2,924) | (46) | (2,878) | (2,682) | (39) | (2,643) |
Research and development | (3,341) | (94) | (3,247) | (2,419) | (40) | (2,379) |
General and administrative | (2,205) | (449) | (1,756) | (1,292) | (94) | (1,198) |
Income (loss) from operations | $4,661 | $(618) | $5,279 | $2,331 | $(184) | $2,515 |
Six Months Ended June 30, | ||||||
2019 | 2018 | |||||
Actual (GAAP) | SBC | Adjusted (Non-GAAP) | Actual (GAAP) | SBC | Adjusted (Non-GAAP) | |
(in thousands) | ||||||
Revenue | $49,489 | $- | $49,489 | $30,616 | $- | $30,616 |
Cost of revenue | (27,532) | (59) | (27,473) | (16,770) | (19) | (16,751) |
Gross profit | 21,957 | (59) | 22,016 | 13,846 | (19) | 13,865 |
Operating expenses: | ||||||
Sales and marketing | (4,793) | (80) | (4,713) | (4,537) | (73) | (4,464) |
Research and development | (6,106) | (180) | (5,926) | (3,960) | (67) | (3,893) |
General and administrative | (4,146) | (1,043) | (3,103) | (4,922) | (2,201) | (2,721) |
Income (loss) from operations | $6,912 | $(1,362) | $8,274 | $427 | $(2,360) | $2,787 |
Three Months Ended June 30, | Six Months Ended June 30, | Three Months Ended March 31, | ||||||||||
2019 | 2018 | 2019 | 2018 | 2020 | 2019 | |||||||
Revenue | 100.0% | 100.0 | % | 100.0 | % | |||||||
Cost of revenue | 54.7 | 58.2 | 55.6 | 54.8 | 58.0 | 56.9 | ||||||
Gross margin | 45.3 | 41.8 | 44.4 | 45.2 | 42.0 | 43.1 | ||||||
Operating expenses: | ||||||||||||
Sales and marketing | 10.1 | 12.8 | 9.7 | 14.8 | 12.3 | 9.1 | ||||||
Research and development | 11.5 | 11.6 | 12.3 | 12.9 | 15.1 | 13.5 | ||||||
General and administrative | 7.6 | 6.2 | 8.4 | 16.1 | 9.6 | 9.5 | ||||||
Total operating expenses, net | 29.2 | 30.6 | 30.4 | 43.8 | 37.0 | 32.1 | ||||||
Income from operations | 16.1 | 11.2 | 14.0 | 1.4 | 5.0 | 11.0 | ||||||
Interest expense, net | (0.6) | (0.7) | ||||||||||
Other expense, net | 1.9 | 5.1 | 0.6 | 1.0 | ||||||||
Interest income (expense), net | 0.9 | (0.6 | ) | |||||||||
Other income (expense), net | 2.8 | (1.3 | ) | |||||||||
Equity income in net income of affiliates | 0.5 | 0.6 | 0.5 | 0.4 | 0.6 | 0.6 | ||||||
Income before income taxes | 17.9 | 16.3 | 14.5 | 2.1 | 9.3 | 9.7 | ||||||
Income tax expense | (3.0) | (0.8) | (2.0) | (0.6) | (1.2 | ) | (0.6 | ) | ||||
Net income | 14.9 | 15.5 | 12.5 | 1.5 | 8.1 | 9.1 | ||||||
Less: Net income attributable to redeemable non-controlling interests | 1.1 | - | ||||||||||
Net income attributable to ACM Research, Inc. | 7.0 | % | 9.1 | % |
Three Months Ended March 31, | ||||||||||||
2020 | 2019 | % Change 2020 v 2019 | ||||||||||
` | (in thousands) | |||||||||||
Revenue | $ | 24,348 | $ | 20,479 | 18.9 | % |
Three Months Ended June 30, | |||
2019 | 2018 | % Change 2019 v 2018 | |
(in thousands) | |||
Revenue | $29,010 | $20,873 | 39.0% |
The increase in revenue of $8.1$3.8 million in the three months ended June 30, 2019March 31, 2020 as compared to the same period in 20182019 reflected increases in revenue of $9.7$10.0 million from front-end single-wafer cleaning equipment. . The equipment, offset in part by a decrease in revenue increase reflected an increased number of tools shipped, coupled with higher selling prices associated with the equipment sold$6.1 million from back-end wafer assembly and customer acceptances from prior period shipments received and recognized as revenue during the three month ended June 30, 2019.packaging equipment.
Three Months Ended June 30, | Three Months Ended March 31, | ||||||||||||||
2019 | 2018 | % Change 2019 v 2018 | 2020 | 2019 | % Change 2020 v 2019 | ||||||||||
(in thousands) | (in thousands) | ||||||||||||||
Cost of revenue | $15,879 | $12,149 | 30.7% | $ | 14,120 | $ | 11,653 | 21.2 | % | ||||||
Gross profit | $13,131 | $8,724 | 50.5 | 10,228 | 8,826 | 15.9 | % | ||||||||
Gross margin | 45.26% | 41.80% | 3.5 | 42.01 | % | 43.10 | % | -1.1 |
Three Months Ended June 30, | Three Months Ended March 31, | ||||||||||||||
2019 | 2018 | % Change 2019 v 2018 | 2020 | 2019 | % Change 2020 v 2019 | ||||||||||
(in thousands) | (in thousands) | ||||||||||||||
Sales and marketing expense | $2,924 | $2,682 | 9.0% | $ | 3,005 | $ | 1,869 | 60.8 | % | ||||||
Research and development expense | 3,341 | 2,419 | 38.1 | 3,677 | 2,765 | 33.0 | % | ||||||||
General and administrative expense | 2,205 | 1,292 | 70.7 | 2,328 | 1,941 | 19.9 | % | ||||||||
Total operating expenses | $8,470 | $6,393 | 32.5 | $ | 9,010 | $ | 6,575 | 37.0 | % |
Three Months Ended June 30, | |||
2019 | 2018 | % Change 2019 v 2018 | |
(in thousands) | |||
Interest expense, net | $(170) | $(135) | 25.9% |
Other income, net | 543 | 1,066 | (49.1) |
Three Months Ended March 31, | ||||||||
2020 | 2019 | |||||||
(in thousands) | ||||||||
Interest Income | $ | 335 | $ | 9 | ||||
Interest Expense | (111 | ) | (139 | ) | ||||
Interest Income (expense), Net | $ | 224 | $ | (130 | ) | |||
Other Income (expense), Net | $ | 677 | $ | (261 | ) |
Three Months Ended June 30, | ||
2019 | 2018 | |
(in thousands) | ||
Current: | ||
U.S. federal | $- | $- |
U.S. state | - | |
Foreign | (876) | - |
Total current income tax expense | (876) | - |
Deferred: | ||
U.S. federal | - | |
U.S. state | - | |
Foreign | (164) | |
Total deferred income expense | - | (164) |
Total current income tax expense | $(876) | $(164) |
Three Months Ended March 31, | ||||||||
2020 | 2019 | |||||||
(in thousands) | ||||||||
Current: | ||||||||
U.S. federal | $ | (10 | ) | $ | - | |||
U.S. state | - | - | ||||||
Foreign | (257 | ) | - | |||||
Total current tax expense | (267 | ) | - | |||||
Deferred: | ||||||||
U.S. federal | (28 | ) | - | |||||
U.S. state | - | - | ||||||
Foreign | (9 | ) | (119 | ) | ||||
Total deferred tax benefit | (37 | ) | (119 | ) | ||||
Total income tax expense | $ | (304 | ) | $ | (119 | ) |
Six Months Ended June 30, | |||
2019 | 2018 | Y/Y % Change | |
(in thousands) | |||
Revenue | $49,489 | $30,616 | 61.6% |
Six Months Ended June 30, | |||
2019 | 2018 | Y/Y % Change | |
(in thousands) | |||
Cost of revenue | $27,532 | $16,770 | 64.2% |
Gross profit | $21,957 | $13,846 | 58.6 |
Gross margin | 44.4% | 45.2% | (86 bps) |
Six Months Ended June 30, | |||
2019 | 2018 | Y/Y % Change | |
(in thousands) | |||
Sales and marketing expense | $4,793 | $4,537 | 5.6% |
Research and development expense | 6,106 | 3,960 | 54.2 |
General and administrative expense | 4,146 | 4,922 | (15.8) |
Total operating expenses | $15,045 | $13,419 | 12.1 |
Six Months Ended June 30, | |||
2019 | 2018 | Y/Y % Change | |
(in thousands) | |||
Interest expense, net | $(300) | $(235) | 27.7% |
Other income, net | 282 | 311 | (9.3) |
Six Months Ended June 30, | ||
2019 | 2018 | |
(in thousands) | ||
Current: | ||
U.S. federal | $- | $- |
U.S. state | - | - |
Foreign | (995) | - |
Total current tax expense | (995) | - |
Deferred: | ||
U.S. federal | - | - |
U.S. state | - | - |
Foreign | (186) | |
Total deferred tax expense | ||
Total income tax expense | (995) | (186) |
Lender | Agreement Date | Maturity Date | Annual Interest Rate | Maximum Borrowing Amount(1) | Amount Outstanding at March 31, 2020 | |||||||||||
China Everbright Bank | April 2019 | April 2020 -August 2020 | 5.22%-5.66 | % | RMB50,000 | RMB27,000 | ||||||||||
$ | 7,055 | $ | 3,810 | |||||||||||||
IBK (Industrial Bank of Korea) | July 2019 | July 2020 | 4.17 | % | KRW500,000 | KRW100,000 | ||||||||||
$ | 410 | $ | 82 | |||||||||||||
$ | 7,465 | $ | 3,892 |
Lender | Agreement Date | Maturity Date | Annual Interest Rate | Maximum Borrowing Amount(1) | Amount Outstanding at June 30, 2019 | |||||
(in thousands) | ||||||||||
Bank of China Pudong Branch | August 2018 | August 2019 | 5.22% | RMB30,000 | ||||||
$4,365 | - | |||||||||
Bank of Shanghai Pudong Branch | January 2019 | January 2020 | 5.22% | RMB50,000 | RMB24,500 | |||||
$7,275 | $3,565 | |||||||||
Shanghai Rural Commercial Bank | February 2019 | January 2020 | 5.66% | RMB20,000 | RMB10,000 | |||||
$2,910 | $1,455 | |||||||||
Bank of Communications | January 2019 | January 2020 - | 5.66% | RMB20,000 | RMB20,000 | |||||
February 2020 | $2,911 | $2,911 | ||||||||
China Everbright Bank | February 2019 | March 2020 - | 4.94% - | RMB50,000 | RMB49,352 | |||||
June 2020 | 5.66% | $7,275 | $7,179 | |||||||
RMB170,000 | RMB103,852 | |||||||||
$24,736 | 15,110 |
(1) | Converted from RMB and KRW to dollars as of March 31, 2020 |
March 31, 2020 | ||||
(in thousands) | ||||
Cash and cash equivalents | $ | 52,283 | ||
Accounts receivable, less allowance for doubtful amounts | 37,260 | |||
Inventory | 44,987 | |||
Working capital | $ | 134,530 |
Quantitative and Qualitative Disclosures about Market Risks |
RISK FACTORS |
Item 2. |
Exhibit Number | Description | |||
Share Transfer and Note Cancellation Agreement dated April 30, 2020 between ACM Research, Inc. and | ||||
Certification of Principal Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | ||||
Certification of Principal Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | ||||
Certification of Principal Executive Officer and Principal Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | ||||
101.INS | XBRL Instance Document | |||
101.SCH | XBRL Taxonomy Extension Schema Document | |||
101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document | |||
101.DEF | XBRL Taxonomy Extension Definition Linkbase Document | |||
101.LAB | XBRL Taxonomy Extension Label Linkbase Document | |||
101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document |
† | Indicates management contract or compensatory plan. |
‡ | Certain sensitive personally identifiable information in this exhibit was omitted by means of redacting a portion of the text and replacing it with [***]. |
* | The certifications attached as Exhibit 32.01 accompany the Quarterly Report on Form 10-Q pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, and shall not be deemed “filed” by the registrant for purposes of Section 18 of the Securities Exchange Act of 1934, as amended. |
ACM RESEARCH, INC. | |||
Date: May 8, 2020 | By: | /s/ | |
Chief Financial Officer, (Principal Financial Officer) |