Rubicon Technology, Inc. Reports First Quarter 2016 Results of Operations
Rubicon Technology, Inc. (NASDAQ:RBCN), a leading provider of sapphire substrates and products to the LED, optical and
semiconductor industries, today reported financial results for its first quarter ended March 31, 2016.
The Company reported first quarter revenue of $4.3 million, up $1.8 million from the prior quarter revenue of $2.5 million due
primarily to increased wafer sales, particularly PSS wafer sales which accounted for most of the increase. Another significant rise
is PSS wafer sales is expected in the third quarter based on current customer projections.
Bill Weissman, Rubicon’s CEO, said, “We expect meaningful increases in six-inch PSS sales over the course of this year because
of our large diameter capability and vertical integration. We are working diligently to reduce wafer cost in order to fully benefit
from this opportunity.”
The Company’s first quarter GAAP loss per share was $0.28 as compared with a GAAP loss of $0.49 in the prior quarter, which
included certain non-cash charges. The fourth quarter non-GAAP loss per share excluding those charges was $0.38.
The Company also continues to work on developing its optical sapphire business and reiterated its expectations of moving two new
technologies into production this year, as LANCE large window growth and SapphirEX coating technologies (patents pending) both
reported additional important milestones being met in the quarter.
Excess sapphire capacity in the market continues to depress sapphire pricing. As a consequence, the Company has been limiting
the amount of two and four-inch core sold in recent quarters due to the particularly challenging pricing. The Company continues to
work with developers of some very interesting potential new applications for sapphire which could open up new markets.
Mr. Weissman added, “We continue to work with the developers of some very interesting potential new applications for sapphire
which fit particularly well with Rubicon’s unique set of sapphire knowledge and capabilities. Over the next several months, we
expect to see meaningful developments in some of these new market opportunities, as well as developments in our new technologies
and further progress in product cost reductions. As these projects unfold, our management team and Board of Directors will continue
to make strategic decisions that we believe will maximize Rubicon’s value.”
Second Quarter 2016 Guidance
The Company expects second quarter revenue and GAAP loss per share to be similar to the first quarter. Revenue growth is
expected to resume in the third quarter primarily from increasing PSS wafer sales.
Conference Call Details
Rubicon will host a conference call at 5:00 p.m. Eastern time on May 10, 2016 to review the first quarter 2016 results and the
second quarter outlook. The conference call will be available to the public through a live audio web broadcast via the Internet.
Log on through the Investor Relations section of Rubicon's website at http://ir.rubicontechnology.com. An audio replay of the call will be available approximately two hours after the
conclusion of the call. The audio replay will remain available until 11:59 p.m. Eastern time on May 17, 2016, and can be accessed
by dialing (877) 344-7529 or (412) 317-0088 (international). Callers should reference conference ID 10085975. The webcast will be
archived on the Company's website.
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. Rubicon 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 Rubicon to
supply custom sapphire products with superior quality and precision. Rubicon 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,” or similar expressions, or those relating to or anticipating financial
results for periods beyond the end of the first 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 our current expectations, estimates and
projections about our industry, management's beliefs and certain assumptions made by us. 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 changes in the average selling prices of sapphire products, our successful development and market
acceptance of new products, dependence on key customers, potential disruptions in our supply of electricity, changes in our product
mix, our ability to protect our intellectual property rights, the competitive environment, the availability and cost of raw
materials, the cost of compliance with environmental standards, the ability to make effective acquisitions and successfully
integrate newly acquired businesses into existing operations and other risks and uncertainties described in the Company's 2015 Form
10-K as amended 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) |
|
|
|
|
|
|
|
March 31, |
|
March 31, |
|
|
2016 |
|
2015 |
|
|
(unaudited) |
|
(unaudited) |
Assets |
|
|
|
|
Cash and cash equivalents |
|
$ |
21,290 |
|
$ |
25,127 |
Restricted cash |
|
|
186 |
|
|
179 |
Short-term investments |
|
|
3,115 |
|
|
15,876 |
Accounts receivable, net |
|
|
1,938 |
|
|
7,553 |
Inventories |
|
|
20,853 |
|
|
21,798 |
Other current assets |
|
|
6,308 |
|
|
8,920 |
Total current assets |
|
|
53,690 |
|
|
79,453 |
Property and equipment, net |
|
|
56,476 |
|
|
104,593 |
Other assets |
|
|
1,171 |
|
|
1,604 |
Total assets |
|
$ |
111,337 |
|
$ |
185,650 |
|
|
|
|
|
Liabilities and Stockholders' Equity |
|
|
|
|
Accounts payable |
|
$ |
3,474 |
|
$ |
2,640 |
Accrued and other current liabilities |
|
|
2,443 |
|
|
1,845 |
Total current liabilities |
|
|
5,917 |
|
|
4,485 |
|
|
|
|
|
Deferred tax liability |
|
|
395 |
|
|
622 |
Total liabilities |
|
|
6,312 |
|
|
5,107 |
|
|
|
|
|
Stockholders' equity |
|
|
105,025 |
|
|
180,543 |
Total liabilities and stockholders’ equity |
|
$ |
111,337 |
|
$ |
185,650 |
Rubicon Technology, Inc. |
Condensed Consolidated Statements of Operations (unaudited) |
(in thousands except share and per share amounts) |
|
|
|
|
|
|
|
Three months ended March 31, |
|
|
2016 |
|
2015 |
|
|
|
|
|
Revenue |
|
$ |
4,287 |
|
|
$ |
8,910 |
|
Cost of goods sold |
|
|
9,706 |
|
|
|
14,019 |
|
Gross loss |
|
|
(5,419 |
) |
|
|
(5,109 |
) |
|
|
|
|
|
General and administrative expenses |
|
|
1,767 |
|
|
|
2,068 |
|
Sales and marketing expenses |
|
|
391 |
|
|
|
338 |
|
Research and development expenses |
|
|
579 |
|
|
|
433 |
|
Total operating expenses |
|
|
2,737 |
|
|
|
2,839 |
|
Loss from operations |
|
|
(8,156 |
) |
|
|
(7,948 |
) |
|
|
|
|
|
Other income: |
|
|
|
|
Interest (expense) income and other, net |
|
|
672 |
|
|
|
(364 |
) |
Loss before income taxes |
|
|
(7,484 |
) |
|
|
(8,312 |
) |
Income tax benefit (expense) |
|
|
151 |
|
|
|
(36 |
) |
Net loss |
|
$ |
(7,333 |
) |
|
$ |
(8,348 |
) |
|
|
|
|
|
Net loss per common share: |
|
|
|
|
Basic |
|
|
($0.28 |
) |
|
|
($0.32 |
) |
Diluted |
|
|
($0.28 |
) |
|
|
($0.32 |
) |
|
|
|
|
|
Weighted average common shares outstanding used in computing net loss per common
share, basic and diluted: |
|
|
26,226,614 |
|
|
|
26,129,276 |
|
Rubicon Technology, Inc. |
Condensed Consolidated Statements of Cash Flows (unaudited) |
(in thousands) |
|
|
|
|
|
|
|
Three months ended March 31, |
|
|
2016 |
|
2015 |
Cash flows from operating activities |
|
|
|
|
Net loss |
|
$ |
(7,333 |
) |
|
$ |
(8,348 |
) |
Adjustments to reconcile net loss to net cash used in operating activities |
|
|
|
|
Depreciation and amortization |
|
|
1,642 |
|
|
|
3,317 |
|
Other |
|
|
370 |
|
|
|
334 |
|
Deferred taxes |
|
|
(159 |
) |
|
|
29 |
|
Changes in operating assets and liabilities |
|
|
|
|
Accounts receivable |
|
|
(199 |
) |
|
|
770 |
|
Inventories |
|
|
1,219 |
|
|
|
647 |
|
Other assets |
|
|
975 |
|
|
|
432 |
|
Accounts payable |
|
|
123 |
|
|
|
(1,050 |
) |
Accrued expenses and other current liabilities |
|
|
(1,025 |
) |
|
|
(138 |
) |
Net cash used in operating activities |
|
|
(4,387 |
) |
|
|
(4,007 |
) |
|
|
|
|
|
Cash flows from investing activities |
|
|
|
|
Purchases of property and equipment |
|
|
(549 |
) |
|
|
(234 |
) |
Purchases of investments |
|
|
- |
|
|
|
(307 |
) |
Proceeds from sale of investments |
|
|
5,785 |
|
|
|
5,000 |
|
Net cash provided by investing activities |
|
|
5,236 |
|
|
|
4,459 |
|
|
|
|
|
|
Cash flows from financing activities |
|
|
|
|
Other financing activities |
|
|
(17 |
) |
|
|
(4 |
) |
Net cash used in financing activities |
|
|
(17 |
) |
|
|
(4 |
) |
|
|
|
|
|
Net effect of currency translation |
|
|
(758 |
) |
|
|
326 |
|
|
|
|
|
|
Net increase in cash and cash equivalents |
|
|
74 |
|
|
|
774 |
|
Cash and cash equivalents, beginning of period |
|
|
21,216 |
|
|
|
24,353 |
|
Cash and cash equivalents, end of period |
|
$ |
21,290 |
|
|
$ |
25,127 |
|
Rubicon Technology, Inc. |
Revenue by Product Group |
(in thousands) |
|
|
|
|
|
|
|
|
|
Three months ended
March 31,
|
|
Three months ended
December 31,
|
|
Three months ended
March 31,
|
|
|
2016 |
|
2015 |
|
2015 |
Core |
|
|
|
|
|
|
2 Inch |
|
$ |
2 |
|
$ |
10 |
|
$ |
4,046 |
4 Inch |
|
|
439 |
|
|
472 |
|
|
1,040 |
6 Inch |
|
|
- |
|
|
- |
|
|
23 |
Total Core |
|
|
441 |
|
|
482 |
|
|
5,109 |
Wafers |
|
|
|
|
|
|
Polished |
|
|
825 |
|
|
455 |
|
|
1,427 |
PSS |
|
|
1,520 |
|
|
404 |
|
|
464 |
|
|
|
2,345 |
|
|
859 |
|
|
1,891 |
R&D |
|
|
97 |
|
|
105 |
|
|
141 |
Optical and other |
|
|
1,404 |
|
|
1,010 |
|
|
1,769 |
Total |
|
$ |
4,287 |
|
$ |
2,456 |
|
$ |
8,910 |
Non-GAAP Disclosures
In addition to the GAAP results provided in this release, the Company has provided non-GAAP operating loss and non-GAAP loss per
share for the fourth quarter of 2015. The Company’s management believes that providing these non-GAAP financial measures better
enables investors to understand and evaluate the Company’s historical and prospective operating performance. The non-GAAP measures
exclude the impact of certain non-cash charges which are described in the footnotes to the table below. Management excludes these
items because they believe the impacts do not reflect expected future results and that their exclusion aids in the comparison of
the Company’s current results with past and future operating results. These non-GAAP financial measures may have limitations as
analytical tools, and these measures should not be considered in isolation or as a substitute for analysis of the Company’s results
as reported under GAAP. Other Companies may calculate these non-GAAP financial measures differently than the Company does limiting
the usefulness of those measures for comparative purposes.
Rubicon Technology, Inc. |
Q4'15 Reconciling Items to Condensed Consolidated Statement of
Operations GAAP to Non-GAAP (unaudited) |
(in thousands except share and per share amounts) |
|
|
|
|
|
|
|
|
|
|
Three months ended December 31, 2015 |
|
|
GAAP |
|
Adjustments |
|
|
Non-GAAP |
Revenue |
|
$ |
2,456 |
|
|
$ |
- |
|
|
|
$ |
2,456 |
|
Cost of goods sold |
|
|
11,444 |
|
|
|
(2,237 |
) |
(a) |
|
|
9,207 |
|
Gross loss |
|
|
(8,988 |
) |
|
|
2,237 |
|
|
|
|
(6,751 |
) |
|
|
|
|
|
|
|
|
General and administrative expenses |
|
|
2,296 |
|
|
|
|
|
|
2,296 |
|
Sales and marketing expenses |
|
|
384 |
|
|
|
|
|
|
384 |
|
Research and development expenses |
|
|
616 |
|
|
|
|
|
|
616 |
|
Loss on disposal of assets |
|
|
25 |
|
|
|
|
|
|
25 |
|
Total operating expenses |
|
|
3,321 |
|
|
|
|
|
|
3,321 |
|
Loss from operations |
|
|
(12,309 |
) |
|
|
2,237 |
|
|
|
|
(10,072 |
) |
|
|
|
|
|
|
|
|
Other (expense) income: |
|
|
|
|
|
|
|
Interest income and other (expense) income, net |
|
|
153 |
|
|
|
|
|
|
153 |
|
Loss before income taxes |
|
|
(12,156 |
) |
|
|
2,237 |
|
|
|
|
(9,919 |
) |
Income tax (expense) benefit |
|
|
(550 |
) |
|
|
545 |
|
(b) |
|
|
(5 |
) |
Net loss |
|
$ |
(12,706 |
) |
|
$ |
2,782 |
|
|
|
$ |
(9,924 |
) |
|
|
|
|
|
|
|
|
Net loss per common share: |
|
|
|
|
|
|
|
Basic |
|
$ |
(0.49 |
) |
|
$ |
0.11 |
|
|
|
$ |
(0.38 |
) |
Diluted |
|
$ |
(0.49 |
) |
|
$ |
0.11 |
|
|
|
$ |
(0.38 |
) |
|
|
|
|
|
|
|
|
Weighted average common shares outstanding used in computing net loss per common
share: |
|
|
26,192,838 |
|
|
|
26,192,838 |
|
|
|
|
26,192,838 |
|
|
|
|
|
|
|
|
|
(a) Charges related to revaluation of raw materials to estimated
replacement cost. |
(b) Change in estimated deferred taxes related to third quarter 2015
impairment charge. |
Rubicon Technology, Inc.
Dee Johnson
Vice President, Investor Relations
847-457-3426
View source version on businesswire.com: http://www.businesswire.com/news/home/20160510006735/en/