Rubicon Technology, Inc. (NASDAQ:RBCN), a provider of sapphire substrates and products to the LED, optical and semiconductor industries, today reported financial results for its second quarter ended June 30, 2016.
The Company reported second quarter revenue of $3.5 million, $0.8 million lower than the prior quarter revenue, primarily as a result of a temporary reduction of wafer orders. Revenue from wafer sales in the second quarter was $1.8 million as compared with $2.3 million in the prior quarter.
The Company continues to work on re-focusing its business on the optical sapphire market. Continued progress was reported on its two new technologies, LANCE large window growth and SapphirEX coating technologies (patents pending), which are expected to allow the Company to introduce new products into the optical sapphire market. The Company also continues to work with developers of other new applications for sapphire outside of the traditional LED and mobile device markets.
Bill Weissman, the Company’s CEO, said, “Given the excess capacity of sapphire serving the LED substrate and mobile device markets, we are placing more emphasis on the optical and industrial sapphire markets where we feel we have a greater competitive advantage. In addition, the Company is reviewing a variety of alternatives with a goal of providing greater value to our stockholders. ”
The Company’s second quarter loss per share was $0.31 as compared with a loss per share of $0.28 in the prior quarter. The second quarter loss per share was impacted by increased proxy solicitation costs related to the contested director election, which added approximately $0.04 to the loss per share in the second quarter.
Cash used in the quarter was impacted by building a higher consignment inventory for a key wafer customer in response to higher volume orders for the third quarter. In addition timing of receivables collections and payment on the settlement of securities litigation affected cash flow. During the quarter the Company took additional actions to reduce operating costs which it anticipates will positively impact cash flow.
About Rubicon Technology, Inc.
Rubicon Technology, Inc. is a vertically integrated advanced materials provider specializing in monocrystalline sapphire for applications in light-emitting diodes (LEDs), optical systems and specialty electronic devices. The Company has a proprietary technology platform and expertise extending from the preparation of raw aluminum oxide through sapphire crystal growth and fabrication to large-diameter polished sapphire windows and wafers and patterned sapphire substrates (PSS), enabling the Company to supply custom sapphire products with superior quality and precision. The Company is ISO 9001 certified and ITAR registered.
Further information is available at http://www.rubicontechnology.com.
Forward-Looking Statements
Certain of the statements in this release, particularly those preceded by, followed by or including the words “believes,” “expects,” “anticipates,” “intends,” “should,” “estimates,” “projects,” “goal” or similar expressions, or those relating to or anticipating financial results for periods beyond the end of the second quarter of 2016, constitute “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. For those statements, the Company claims the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on management’s current expectations, estimates and projections about the Company’s industry, management's beliefs and certain assumptions made by the Company and its management. These statements are subject to risks and uncertainties that could cause actual results to differ materially from those expressed in, or implied by, the statements. These risks and uncertainties include the outcome of alternatives pursued by the Company to provide greater value to our shareholders, changes in the demand or the average selling prices of sapphire products, the Company’s successful development and market acceptance of new products, dependence on key customers, potential disruptions in the Company’s supply of electricity, changes in the Company’s product mix, the Company’s ability to protect its intellectual property rights, the competitive environment, the availability and cost of raw materials, the cost of compliance with environmental standards and other risks and uncertainties described in the Company's Form 10-K as amended, for the year ended December 31, 2015, Form 10-Q for the quarter ended March 31, 2016, Form 10-Q for the quarter ended June 30, 2016 and other filings with the Securities and Exchange Commission. For these reasons, readers are cautioned not to place undue reliance on the Company's forward-looking statements. Any forward-looking statement that the Company makes speaks only as of the date of such statement, and the Company undertakes no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise. Comparisons of results for current and any prior periods are not intended to express any future trends or indications of future performance, unless expressed as such, and should only be viewed as historical data.
| Rubicon Technology, Inc. | ||||||
| Condensed Consolidated Balance Sheets | ||||||
| (in thousands) | ||||||
| June 30, | June 30, | |||||
| 2016 | 2015 | |||||
| Assets | (unaudited) | (unaudited) | ||||
| Cash and cash equivalents | $ | 17,067 | $ | 22,744 | ||
| Restricted cash | 182 | 196 | ||||
| Short-term investments | 1,007 | 13,208 | ||||
| Accounts receivable, net | 2,737 | 7,944 | ||||
| Inventories | 21,210 | 22,116 | ||||
| Other current assets | 7,481 | 8,044 | ||||
| Total current assets | 49,684 | 74,252 | ||||
| Property and equipment, net | 53,027 | 101,394 | ||||
| Other assets | 868 | 1,696 | ||||
| Total assets | $ | 103,579 | $ | 177,342 | ||
| Liabilities and Stockholders' Equity | ||||||
| Accounts payable | $ | 3,664 | $ | 2,495 | ||
| Accrued and other current liabilities | 2,515 | 1,889 | ||||
| Total current liabilities | 6,179 | 4,384 | ||||
| Deferred tax liability | 218 | 672 | ||||
| Total liabilities | 6,397 | 5,056 | ||||
| Stockholders' equity | 97,182 | 172,286 | ||||
| Total liabilities and stockholders’ equity | $ | 103,579 | $ | 177,342 | ||
| Rubicon Technology, Inc. | ||||||||||||||||
| Condensed Consolidated Statements of Operations (unaudited) | ||||||||||||||||
| (in thousands except share and per share amounts) | ||||||||||||||||
| Three months ended June 30, | Six months ended June 30, | |||||||||||||||
| 2016 | 2015 | 2016 | 2015 | |||||||||||||
| Revenue | $ | 3,535 | $ | 7,106 | $ | 7,822 | $ | 16,016 | ||||||||
| Cost of goods sold | 7,586 | 12,261 | 17,292 | 26,280 | ||||||||||||
| Gross loss | (4,051 | ) | (5,155 | ) | (9,470 | ) | (10,264 | ) | ||||||||
| General and administrative expenses | 2,695 | 2,188 | 4,462 | 4,256 | ||||||||||||
| Sales and marketing expenses | 361 | 354 | 752 | 692 | ||||||||||||
| Research and development expenses | 652 | 603 | 1,231 | 1,036 | ||||||||||||
| Loss on disposal of assets | 126 | 22 | 126 | 22 | ||||||||||||
Asset impairment charge | 265 | - | 265 | - | ||||||||||||
| Total operating expenses | 4,099 | 3,167 | 6,836 | 6,006 | ||||||||||||
| Loss from operations | (8,150 | ) | (8,322 | ) | (16,306 | ) | (16,270 | ) | ||||||||
| Other (expense) income: | ||||||||||||||||
| Interest income, expense and other, net | (233 | ) | (207 | ) | 439 | (571 | ) | |||||||||
| Loss before income taxes | (8,383 | ) | (8,529 | ) | (15,867 | ) | (16,841 | ) | ||||||||
| Income tax benefit (expense) | 174 | (51 | ) | 325 | (87 | ) | ||||||||||
| Net loss | $ | (8,209 | ) | $ | (8,580 | ) | $ | (15,542 | ) | $ | (16,928 | ) | ||||
| Net loss per common share: | ||||||||||||||||
| Basic | $ | (0.31 | ) | $ | (0.33 | ) | $ | (0.59 | ) | $ | (0.65 | ) | ||||
| Diluted | $ | (0.31 | ) | $ | (0.33 | ) | $ | (0.59 | ) | $ | (0.65 | ) | ||||
| Weighted average common shares outstanding used in computing net loss per common share: | ||||||||||||||||
| Basic | 26,296,398 | 26,142,261 | 26,261,506 | 26,135,768 | ||||||||||||
| Diluted | 26,296,398 | 26,142,261 | 26,261,506 | 26,135,768 | ||||||||||||
| Rubicon Technology, Inc. | |||||||||||||||||
| Condensed Consolidated Statements of Cash Flows (unaudited) | |||||||||||||||||
| (in thousands) | |||||||||||||||||
| Three months ended June 30, | Six months ended June 30, | ||||||||||||||||
| 2016 | 2015 | 2016 | 2015 | ||||||||||||||
| Cash flows from operating activities | |||||||||||||||||
| Net loss | $ | (8,209 | ) | $ | (8,580 | ) | $ | (15,542 | ) | $ | (16,928 | ) | |||||
| Adjustments to reconcile net loss to net cash used in operating activities | |||||||||||||||||
| Depreciation and amortization | 1,649 | 3,285 | 3,291 | 6,602 | |||||||||||||
| Other | 752 | 335 | 1,122 | 669 | |||||||||||||
| Deferred taxes | (178 | ) | 50 | (337 | ) | 79 | |||||||||||
| Changes in operating assets and liabilities | |||||||||||||||||
| Accounts receivable | (800 | ) | (391 | ) | (999 | ) | 379 | ||||||||||
| Inventories | (526 | ) | (523 | ) | 693 | 124 | |||||||||||
| Other assets | 421 | 812 | 1,396 | 1,244 | |||||||||||||
| Accounts payable | 207 | (119 | ) | 330 | (1,169 | ) | |||||||||||
| Accrued expenses and other current liabilities | 78 | 50 | (947 | ) | (88 | ) | |||||||||||
| Net cash used in operating activities | (6,606 | ) | (5,081 | ) | (10,993 | ) | (9,088 | ) | |||||||||
| Cash flows from investing activities | |||||||||||||||||
| Purchases of property and equipment, net of disposal of assets | 79 | (108 | ) | (470 | ) | (342 | ) | ||||||||||
| Purchases of investments | (18 | ) | (829 | ) | (18 | ) | (1,136 | ) | |||||||||
| Proceeds from sale of investments | 2,127 | 3,500 | 7,912 | 8,500 | |||||||||||||
| Net cash provided by investing activities | 2,188 | 2,563 | 7,424 | 7,022 | |||||||||||||
| Cash flows from financing activities | |||||||||||||||||
| Other financing activities | 4 | (12 | ) | (13 | ) | (16 | ) | ||||||||||
| Net cash (used in) provided by financing activities | 4 | (12 | ) | (13 | ) | (16 | ) | ||||||||||
| Net effect of currency translation | 191 | 147 | (567 | ) | 473 | ||||||||||||
| Net decrease in cash and cash equivalents | (4,223 | ) | (2,383 | ) | (4,149 | ) | (1,609 | ) | |||||||||
| Cash and cash equivalents, beginning of period | 21,290 | 25,127 | 21,216 | 24,353 | |||||||||||||
| Cash and cash equivalents, end of period | $ | 17,067 | $ | 22,744 | $ | 17,067 | $ | 22,744 | |||||||||
| Rubicon Technology, Inc. | |||||||||
| Revenue by Product Group | |||||||||
| (in thousands) | |||||||||
Three months ended June 30, | Three months ended March 31, | Three months ended June 30, | |||||||
| 2016 | 2016 | 2015 | |||||||
| Core | |||||||||
| 2 Inch | $ | - | $ | 2 | $ | 2,615 | |||
| 4 Inch | 689 | 439 | 1,243 | ||||||
| 6 Inch | - | - | 171 | ||||||
| Total Core | 689 | 441 | 4,029 | ||||||
| Wafers | |||||||||
| Polished | 488 | 825 | 840 | ||||||
| PSS | 1,342 | 1,520 | 902 | ||||||
| Total Wafers | 1,830 | 2,345 | 1,742 | ||||||
| R&D | 112 | 97 | 144 | ||||||
| Optical and other | 904 | 1,404 | 1,191 | ||||||
| $ | 3,535 | $ | 4,287 | $ | 7,106 | ||||
View source version on businesswire.com: http://www.businesswire.com/news/home/20160809006137/en/
Contacts:
Mardel Graffy
Chief Financial Officer
847-457-3461
