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): November 9, 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 November 9, 2015, Rubicon Technology, Inc. (the Company) issued a press release announcing its financial results for its fiscal quarter ended September 30, 2015 and providing guidance for its fiscal quarter ending December 31, 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 9.01 Financial Statements and Exhibits.
(d) Exhibits.
Exhibit |
Description | |
99.1 | Press Release dated November 9, 2015. |
2
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: November 9, 2015 | ||||||
By: | /s/ Mardel A. Graffy | |||||
Name: | Mardel A. Graffy | |||||
Title: | Chief Financial Officer |
3
Exhibit Index
Exhibit |
Description | |
99.1 | Press Release dated November 9, 2015. |
4
Exhibit 99.1
RUBICON TECHNOLOGY, INC. REPORTS THIRD QUARTER
2015 RESULTS OF OPERATIONS
Bensenville, Ill. November 9, 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 third quarter ended September 30, 2015.
The Company reported third quarter revenue of $5.3 million, lower than the prior quarter revenue of $7.1 million due to weaker sapphire demand, particularly for two-inch core sold into the mobile device market, which declined $2.1 million sequentially. The Company cited higher inventory of finished two-inch double side polished wafers at its customers as contributing to the weaker demand in the quarter. PSS wafer sales increased again sequentially, to $1.4 million in the third quarter from $0.9 million in the prior quarter. While PSS revenue increased, the LED market in general was weaker in the quarter, resulting from weakness in the backlighting segment of the market.
Bill Weissman, Rubicons CEO, said, The sapphire market remained very challenging in the third quarter as excess capacity in the market and fluctuations in inventory levels in the supply chain added additional downward pressure on pricing and volumes for the industry. The current excess capacity in the sapphire market has been driven by the prospect of sapphire cover glass in mobile devices, and if that application becomes a reality, it has the potential to quickly change the market supply situation. While we are also taking steps to assure that Rubicon is positioned to participate in the sapphire cover glass market if that application is adopted, we are taking the actions necessary to diversify the business to reduce volatility and drive stronger margins over the long-term while putting intense focus on cost reduction to reduce cash usage in the near-term.
The Companys operating loss for the third quarter, excluding a non-cash charge for impairment of long-lived assets and an accrual for the pending settlement of securities litigation, was reduced sequentially by $1.4 million to $6.9 million. Cash used in the period was $1.9 million as compared with $5 million in the prior quarter. Please refer to the reconciliation of non-GAAP measures to the nearest GAAP measures near the end of this release.
The Company recorded a non-cash charge for impairment of long-lived assets such as machinery, equipment and facilities in the quarter totaling $39.6 million. Mardel Graffy, Rubicons CFO commented, Due to the protracted weakness in sapphire pricing, it was determined in the period that our long-lived assets should be written down to current fair market value in accordance with generally accepted accounting principles.
Fourth Quarter 2015 Guidance
The Company expects the market to be particularly challenging in the fourth quarter. Given the current pricing for two and four inch core, the Company expects to limit sales of those products in the quarter to allow time for inventory in the supply chain to clear. The Company also reported some delay in the start of its purchase order with its key PSS customer based on revised end customer demand.
Mr. Weissman said, There is weakness in all markets right now. We expect improvement in the first quarter of next year based on our visibility of wafers sales and we also believe the LED and mobile device supply chain inventories should come down and anticipate some improvement in demand for two and four inch core in the first quarter as well. However, fourth quarter revenue will likely be limited to $2 to $3 million with GAAP loss per share of around $0.30.
Conference Call Details
Rubicon will host a conference call at 5:00 p.m. Eastern time on November 9, 2015 to review the third quarter 2015 results and the fourth 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 11:59 p.m. Eastern time on November 16, 2015, and can be accessed by dialing (877) 344-7529 or (412) 317-0088 (international). Callers should reference conference ID 10075492. 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 third 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)
September 30, | September 30, | |||||||
2015 | 2014 | |||||||
(unaudited) | (unaudited) | |||||||
Assets |
||||||||
Cash and cash equivalents |
$ | 21,428 | $ | 25,144 | ||||
Restricted cash |
167 | 195 | ||||||
Short-term investments |
12,676 | 27,828 | ||||||
Accounts receivable, net |
3,276 | 5,822 | ||||||
Inventories |
23,112 | 23,060 | ||||||
Other current assets |
7,723 | 9,736 | ||||||
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|
|
|
|||||
Total current assets |
68,382 | 91,785 | ||||||
Property and equipment, net |
59,079 | 110,347 | ||||||
Other assets |
1,492 | 1,973 | ||||||
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Total assets |
$ | 128,953 | $ | 204,105 | ||||
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Liabilities and Stockholders Equity |
||||||||
Accounts payable |
$ | 2,563 | $ | 4,058 | ||||
Accrued and other current liabilities |
1,993 | 1,970 | ||||||
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Total current liabilities |
4,556 | 6,028 | ||||||
Deferred tax liability |
9 | 267 | ||||||
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|||||
Total liabilities |
4,565 | 6,295 | ||||||
Stockholders equity |
124,388 | 197,810 | ||||||
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Total liabilities and stockholders equity |
$ | 128,953 | $ | 204,105 | ||||
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Rubicon Technology, Inc.
Condensed Consolidated Statements of Operations (unaudited)
(in thousands except share and per share amounts)
Three months ended September 30, |
Nine months ended September 30, |
|||||||||||||||
2015 | 2014 | 2015 | 2014 | |||||||||||||
Revenue |
$ | 5,346 | $ | 8,036 | $ | 21,362 | $ | 36,773 | ||||||||
Cost of goods sold |
9,237 | 17,496 | 35,517 | 61,001 | ||||||||||||
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Gross loss |
(3,891 | ) | (9,460 | ) | (14,155 | ) | (24,228 | ) | ||||||||
General and administrative expenses |
3,037 | 2,949 | 7,293 | 7,534 | ||||||||||||
Sales and marketing expenses |
287 | 337 | 979 | 1,136 | ||||||||||||
Research and development expenses |
558 | 446 | 1,594 | 1,413 | ||||||||||||
Long-lived asset impairment charges |
39,597 | | 39,597 | | ||||||||||||
Loss on disposal of assets |
| 680 | 22 | 665 | ||||||||||||
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Total operating expenses |
43,479 | 4,412 | 49,485 | 10,748 | ||||||||||||
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Loss from operations |
(47,370 | ) | (13,872 | ) | (63,640 | ) | (34,976 | ) | ||||||||
Other (expense) income: |
||||||||||||||||
Interest (expense) income and other, net |
(1,489 | ) | (139 | ) | (2,060 | ) | 93 | |||||||||
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Loss before income taxes |
(48,859 | ) | (14,011 | ) | (65,700 | ) | (34,883 | ) | ||||||||
Income tax benefit |
663 | 298 | 576 | 292 | ||||||||||||
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Net loss |
$ | (48,196 | ) | $ | (13,713 | ) | $ | (65,124 | ) | $ | (34,591 | ) | ||||
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Net loss per common share: |
||||||||||||||||
Basic |
$ | (1.84 | ) | $ | (0.53 | ) | $ | (2.49 | ) | $ | (1.35 | ) | ||||
Diluted |
$ | (1.84 | ) | $ | (0.53 | ) | $ | (2.49 | ) | $ | (1.35 | ) | ||||
Weighted average common shares outstanding used in computing net loss per common share: |
26,160,308 | 26,110,651 | 26,143,948 | 25,711,532 |
Rubicon Technology, Inc.
Condensed Consolidated Statements of Cash Flows (unaudited)
(in thousands)
Three months ended September 30, |
Nine months ended September 30, |
|||||||||||||||
2015 | 2014 | 2015 | 2014 | |||||||||||||
Cash flows from operating activities |
||||||||||||||||
Net loss |
$ | (48,196 | ) | $ | (13,713 | ) | $ | (65,124 | ) | $ | (34,591 | ) | ||||
Adjustments to reconcile net loss to net cash used in operating activities |
||||||||||||||||
Depreciation and amortization |
3,178 | 3,337 | 9,780 | 10,321 | ||||||||||||
Long-lived asset impairment charges |
39,597 | | 39,597 | | ||||||||||||
Other |
292 | 950 | 961 | 1,746 | ||||||||||||
Deferred taxes |
(663 | ) | (363 | ) | (584 | ) | (363 | ) | ||||||||
Changes in operating assets and liabilities |
||||||||||||||||
Accounts receivable |
4,668 | 2,712 | 5,047 | (2,251 | ) | |||||||||||
Inventories |
(2,301 | ) | 235 | (2,177 | ) | 11,330 | ||||||||||
Other assets |
206 | 2,430 | 1,450 | 2,921 | ||||||||||||
Accounts payable |
259 | (274 | ) | (910 | ) | (401 | ) | |||||||||
Accrued expenses and other current liabilities |
143 | 139 | 55 | (202 | ) | |||||||||||
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Net cash used in operating activities |
(2,817 | ) | (4,547 | ) | (11,905 | ) | (11,490 | ) | ||||||||
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Cash flows from investing activities |
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Purchases of property and equipment, net of proceeds from disposal of assets |
(459 | ) | (1,503 | ) | (801 | ) | (6,112 | ) | ||||||||
Purchases of investments, net proceeds from sales of investments |
537 | 6,439 | 7,901 | (13,359 | ) | |||||||||||
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Net cash provided by (used in) investing activities |
78 | 4,936 | 7,100 | (19,471 | ) | |||||||||||
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Cash flows from financing activities |
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Proceeds from issuance of common stock, net of issuance costs |
| | | 34,957 | ||||||||||||
Other financing activities |
28 | (42 | ) | 12 | 182 | |||||||||||
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Net cash provided by (used in) financing activities |
28 | (42 | ) | 12 | 35,139 | |||||||||||
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Net effect of currency translation |
1,395 | 67 | 1,868 | (105 | ) | |||||||||||
Net (decrease) increase in cash and cash equivalents |
(1,316 | ) | 414 | (2,925 | ) | 4,073 | ||||||||||
Cash and cash equivalents, beginning of period |
22,744 | 24,730 | 24,353 | 21,071 | ||||||||||||
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Cash and cash equivalents, end of period |
$ | 21,428 | $ | 25,144 | $ | 21,428 | $ | 25,144 | ||||||||
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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 third quarter of 2015. The Companys management believes that providing these non-GAAP financial measures better enables investors to understand and evaluate the Companys 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 Companys 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 Companys 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.
Q315 Reconciling Items to Financial Statements - GAAP to Non-GAAP (Unaudited)
(in thousands except share and per share amounts)
Three months ended September 30, 2015 | ||||||||||||
GAAP | Adjustments | Non-GAAP | ||||||||||
Revenue |
$ | 5,346 | $ | | $ | 5,346 | ||||||
Cost of goods sold |
9,237 | | 9,237 | |||||||||
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Gross loss |
(3,891 | ) | | (3,891 | ) | |||||||
General and administrative expenses |
3,037 | (900 | )(a) | 2,137 | ||||||||
Sales and marketing expenses |
287 | | 287 | |||||||||
Research and development expenses |
558 | | 558 | |||||||||
Long-lived asset impairment charges |
39,597 | (39,597 | )(b) | | ||||||||
Loss on disposal of assets |
| | | |||||||||
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Total operating expenses |
43,479 | (40,497 | ) | 2,982 | ||||||||
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Loss from operations |
(47,370 | ) | 40,497 | (6,873 | ) | |||||||
Other (expense) income: |
||||||||||||
Interest (expense) income and other, net |
(1,489 | ) | | (1,489 | ) | |||||||
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Loss before income taxes |
(48,859 | ) | 40,497 | (8,362 | ) | |||||||
Income tax benefit |
663 | 663 | ||||||||||
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Net loss |
$ | (48,196 | ) | $ | 40,497 | $ | (7,699 | ) | ||||
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Net loss per common share: |
||||||||||||
Basic |
$ | (1.84 | ) | $ | 1.55 | $ | (0.29 | ) | ||||
Diluted |
$ | (1.84 | ) | $ | 1.55 | $ | (0.29 | ) | ||||
Weighted average common shares outstanding used in computing net loss per common share: |
26,160,308 | 26,160,308 | 26,160,308 |
(a) | The amount the Company accrued for its expected contribution towards the negotiated settlement of securities litigation |
(The proposed settlement has not been finalized and remains subject to approval by the United States District Court for the Northern District of Illinois.)
(b) | Asset impairment charges. |
Rubicon Technology, Inc.
Revenue by Product Group
(in thousands)
Three months ended September 30, |
Three months ended June 30, |
Three months ended September 30, |
||||||||||
2015 | 2015 | 2014 | ||||||||||
Core |
||||||||||||
2 Inch |
$ | 551 | $ | 2,615 | $ | 856 | ||||||
4 Inch |
1,233 | 1,243 | 3,327 | |||||||||
6 Inch |
40 | 171 | | |||||||||
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Total Core |
1,824 | 4,029 | 4,183 | |||||||||
Polished |
763 | 840 | 1,828 | |||||||||
PSS |
1,373 | 902 | 257 | |||||||||
R&D |
270 | 144 | 156 | |||||||||
Optical and other |
1,116 | 1,191 | 1,612 | |||||||||
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$ | 5,346 | $ | 7,106 | $ | 8,036 | |||||||
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