UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): July 31, 2015
RUBICON TECHNOLOGY, INC.
(Exact name of registrant as specified in its charter)
Delaware | 001-33834 | 36-4419301 | ||
(State or other jurisdiction of incorporation) |
(Commission File Number) |
(I.R.S. Employer Identification No.) |
900 East Green Street | ||
Bensenville, Illinois | 60106 | |
(Address of principal executive offices) | (Zip Code) |
(847) 295-7000
(Registrants telephone number, including area code)
N/A
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 2.02 Results of Operations and Financial Condition.
On August 6, 2015, Rubicon Technology, Inc. (the Company) issued a press release announcing its financial results for its fiscal quarter ended June 30, 2015 and providing guidance for its fiscal quarter ending September 30, 2015. A copy of the press release is attached hereto as Exhibit 99.1.
The information in Item 2.02 of this Current Report, including the exhibit attached hereto as Exhibit 99.1, is being furnished and shall not be deemed filed for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that Section. The information in Item 2.02 of this Current Report, including Exhibit 99.1, shall not be incorporated by reference into any registration statement or other document pursuant to the Securities Act of 1933, as amended, except as otherwise expressly stated in such filing.
Item 8.01 Other Events.
On July 31, 2015, the Company entered into an agreement with another sapphire substrate manufacturer to share resources in the Companys Penang, Malaysia, plant. Under the agreement, the Company will receive rights to use certain technology for its slicing and polishing operations and the other party will receive the right to use a portion of the Companys underutilized slicing and polishing capacity for the production of its own products.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
Exhibit |
Description | |
99.1 | Press Release dated August 6, 2015. |
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
RUBICON TECHNOLOGY, INC. | ||||||
Dated: August 6, 2015 | ||||||
By: | /s/ Mardel A. Graffy | |||||
Name: | Mardel A. Graffy | |||||
Title: | Chief Financial Officer |
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Exhibit Index
Exhibit |
Description | |
99.1 | Press Release dated August 6, 2015. |
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Exhibit 99.1
RUBICON TECHNOLOGY, INC. REPORTS SECOND QUARTER
2015 RESULTS OF OPERATIONS AND ANNOUNCES RESOURCE SHARING AGREEMENT
Bensenville, Ill. August 6, 2015 Rubicon Technology, Inc. (NASDAQ:RBCN), a leading provider of sapphire substrates and products to the LED, semiconductor, and optical industries, today reported financial results for its second quarter ended June 30, 2015 and announced the signing of a resource sharing agreement with another sapphire polisher aimed at more rapidly reducing polishing costs.
Second Quarter Results
The Company reported second quarter revenue of $7.1 million, lower than the prior quarter revenue of $8.9 million due to weaker sapphire demand and lower pricing in the quarter. The Company cited a combination of factors, including higher TV inventory levels and some seasonality in the LED light bulb market as likely contributing to the weaker demand in the quarter. Both volume and price were affected by the lower demand. PSS wafer sales, however, nearly doubled from the prior quarter to $900 thousand. The Company expects continued growth in PSS wafer sales throughout the year and recently received a $9.0 million purchase order for six-inch PSS wafers to be delivered over twelve months starting this October.
While the sequential price decline put additional pressure on operating results, loss per share in the second quarter was $0.33, similar to the prior quarter loss of $0.32.
Resource Sharing Agreement
The Company also announced the signing of a resource sharing agreement with another leading sapphire polisher. Under that agreement Rubicon will receive what it believes to be a lower cost four-inch polishing process in exchange for making available to the other party the use of a portion of its underutilized slicing and polishing capacity in Malaysia.
The Company will continue to use its existing six-inch polishing process but believes that some of the process modifications made for four-inch will be transferrable to six-inch and result in reduced cost for that product as well.
During the current down cycle in the market, we have been focusing on a number of key initiatives: aggressively pursuing our PSS potential, targeting high margin optical applications, driving down product costs and developing new products; and we are making progress on each of these fronts, said Bill Weissman, President and CEO of Rubicon. We are focusing on PSS wafer sales because we believe this product has greater margin potential, however, we must reduce slicing and polishing costs in order to realize the potential. We believe the resource sharing agreement will allow us to reduce those costs faster than internal development, especially for four-inch wafers.
Third Quarter 2015 Guidance
The Company expects the challenging market to continue in the third quarter. While PSS wafer sales are expected to increase, visibility on two-inch and four-inch core sales is limited, so third quarter revenue is expected to be at or below second quarter levels. Revenue from PSS sales is expected to continue to grow in the fourth quarter and the Company believes demand for two-inch and four-inch core should also strengthen in the fourth quarter.
Process changes associated with the resource sharing agreement will be made over the course of the remainder of the year. The extent and timing of cost reductions from these changes will be better understood as the changes are implemented. For the third quarter, loss per share is also expected to be at or higher than the second quarter.
The Company also reported temporarily scaling back some of its raw material and crystal growth operations. Mardel Graffy, Rubicons CFO commented, Reducing raw material and crystal inventory will improve cash flow in the near-term and we are retaining key personnel to ensure we can scale back up to full production quickly as market conditions improve.
Conference Call Details
Rubicon will host a conference call at 6:00 p.m. Eastern time on August 6, 2015 to review the second quarter 2015 results and the third 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 Rubicons 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 9:00 a.m. Eastern time on August 14, 2015, and can be accessed by dialing (877) 344-7529 or (412) 317-0088 (international). Callers should reference conference ID 10069587. The webcast will be archived on the Companys website.
About Rubicon Technology, Inc.
Rubicon Technology, Inc. is a vertically integrated advanced electronic 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 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 second quarter of 2015, 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, managements 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 Companys most recent Form 10-K and other filings with the Securities and Exchange Commission. For these reasons, readers are cautioned not to place undue reliance on the Companys 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.
CONTACT:
Dee Johnson
Vice President, Investor Relations
847-457-3426
Rubicon Technology, Inc.
Condensed Consolidated Balance Sheets
(in thousands)
June 30, 2015 (unaudited) |
June 30, 2014 (unaudited) |
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Assets |
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Cash and cash equivalents |
$ | 22,744 | $ | 24,730 | ||||
Restricted cash |
196 | 197 | ||||||
Short-term investments |
13,208 | 33,260 | ||||||
Accounts receivable, net |
7,944 | 8,534 | ||||||
Inventories |
22,116 | 23,364 | ||||||
Other current assets |
8,044 | 12,430 | ||||||
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Total current assets |
74,252 | 102,515 | ||||||
Property and equipment, net |
101,394 | 112,860 | ||||||
Other assets |
1,696 | 1,771 | ||||||
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Total assets |
$ | 177,342 | $ | 217,146 | ||||
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Liabilities and Stockholders Equity |
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Accounts payable |
$ | 2,495 | $ | 4,388 | ||||
Accrued and other current liabilities |
1,889 | 1,837 | ||||||
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Total current liabilities |
4,384 | 6,225 | ||||||
Deferred tax liability |
672 | 225 | ||||||
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Total liabilities |
5,056 | 6,450 | ||||||
Stockholders equity |
172,286 | 210,696 | ||||||
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Total liabilities and stockholders equity |
$ | 177,342 | $ | 217,146 | ||||
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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, | |||||||||||||||
2015 | 2014 | 2015 | 2014 | |||||||||||||
Revenue |
$ | 7,106 | $ | 14,469 | $ | 16,016 | $ | 28,737 | ||||||||
Cost of goods sold |
12,261 | 21,743 | 26,280 | 43,505 | ||||||||||||
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Gross loss |
(5,155 | ) | (7,274 | ) | (10,264 | ) | (14,768 | ) | ||||||||
General and administrative expenses |
2,188 | 2,197 | 4,256 | 4,585 | ||||||||||||
Sales and marketing expenses |
354 | 332 | 692 | 799 | ||||||||||||
Research and development expenses |
603 | 391 | 1,036 | 967 | ||||||||||||
Loss (gain) on disposal of assets |
22 | (15 | ) | 22 | (15 | ) | ||||||||||
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Total operating expenses |
3,167 | 2,905 | 6,006 | 6,336 | ||||||||||||
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Loss from operations |
(8,322 | ) | (10,179 | ) | (16,270 | ) | (21,104 | ) | ||||||||
Other (expense) income: |
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Interest income, expense and other, net |
(207 | ) | 195 | (571 | ) | 232 | ||||||||||
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Loss before income taxes |
(8,529 | ) | (9,984 | ) | (16,841 | ) | (20,872 | ) | ||||||||
Income tax expense |
(51 | ) | | (87 | ) | (6 | ) | |||||||||
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Net loss |
$ | (8,580 | ) | $ | (9,984 | ) | $ | (16,928 | ) | $ | (20,878 | ) | ||||
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Net loss per common share: |
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Basic |
$ | (0.33 | ) | $ | (0.39 | ) | $ | (0.65 | ) | $ | (0.82 | ) | ||||
Diluted |
$ | (0.33 | ) | $ | (0.39 | ) | $ | (0.65 | ) | $ | (0.82 | ) | ||||
Weighted average common shares outstanding used in computing net loss per common share: |
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Basic |
26,142,261 | 25,706,797 | 26,135,768 | 25,511,972 | ||||||||||||
Diluted |
26,142,261 | 25,706,797 | 26,135,768 | 25,511,972 |
Rubicon Technology, Inc.
Condensed Consolidated Statements of Cash Flows (unaudited)
(in thousands)
Three months ended June 30, | Six months ended June 30, | |||||||||||||||
2015 | 2014 | 2015 | 2014 | |||||||||||||
Cash flows from operating activities |
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Net loss |
$ | (8,580 | ) | $ | (9,984 | ) | $ | (16,928 | ) | $ | (20,878 | ) | ||||
Adjustments to reconcile net loss to net cash used in operating activities |
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Depreciation and amortization |
3,285 | 3,477 | 6,602 | 6,984 | ||||||||||||
Other |
335 | 348 | 669 | 796 | ||||||||||||
Deferred taxes |
50 | | 79 | | ||||||||||||
Changes in operating assets and liabilities |
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Accounts receivable |
(391 | ) | (366 | ) | 379 | (4,963 | ) | |||||||||
Inventories |
(523 | ) | 5,314 | 124 | 11,095 | |||||||||||
Other assets |
812 | 985 | 1,244 | 491 | ||||||||||||
Accounts payable |
(119 | ) | (1,319 | ) | (1,169 | ) | (127 | ) | ||||||||
Accrued expenses and other current liabilities |
50 | (925 | ) | (88 | ) | (341 | ) | |||||||||
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Net cash used in operating activities |
(5,081 | ) | (2,470 | ) | (9,088 | ) | (6,943 | ) | ||||||||
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Cash flows from investing activities |
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Purchases of property and equipment, net of disposal of assets |
(108 | ) | (2,685 | ) | (342 | ) | (4,609 | ) | ||||||||
Purchases of investments |
(829 | ) | (3,123 | ) | (1,136 | ) | (29,798 | ) | ||||||||
Proceeds from sale of investments |
3,500 | 5,500 | 8,500 | 10,000 | ||||||||||||
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Net cash provided by (used in) investing activities |
2,563 | (308 | ) | 7,022 | (24,407 | ) | ||||||||||
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Cash flows from financing activities |
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Proceeds from issuance of common stock, net of issuance costs |
| (4 | ) | | 34,957 | |||||||||||
Other financing activities |
(12 | ) | (36 | ) | (16 | ) | 224 | |||||||||
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Net cash (used in) provided by financing activities |
(12 | ) | (40 | ) | (16 | ) | 35,181 | |||||||||
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Net effect of currency translation |
147 | (133 | ) | 473 | (172 | ) | ||||||||||
Net (decrease) increase in cash and cash equivalents |
(2,383 | ) | (2,951 | ) | (1,609 | ) | 3,659 | |||||||||
Cash and cash equivalents, beginning of period |
25,127 | 27,681 | 24,353 | 21,071 | ||||||||||||
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Cash and cash equivalents, end of period |
$ | 22,744 | $ | 24,730 | $ | 22,744 | $ | 24,730 | ||||||||
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Rubicon Technology, Inc.
Revenue by Product Group
(in thousands)
Three months ended June 30, |
Three months ended March 31, |
Three months ended June 30, |
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2015 | 2015 | 2014 | ||||||||||
Core |
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2 Inch |
$ | 2,615 | $ | 4,046 | $ | 6,368 | ||||||
4 Inch |
1,243 | 1,040 | 3,204 | |||||||||
6 Inch |
171 | 23 | | |||||||||
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Total Core |
4,029 | 5,109 | 9,572 | |||||||||
Polished |
840 | 1,427 | 2,601 | |||||||||
PSS |
902 | 464 | 256 | |||||||||
R&D |
144 | 141 | 272 | |||||||||
Optical and other |
1,191 | 1,769 | 1,768 | |||||||||
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$ | 7,106 | $ | 8,910 | $ | 14,469 | |||||||
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