Rubicon Technology, Inc. Reports First Quarter 2015 Results of Operations

BENSENVILLE, Ill.--()--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 first quarter ended March 31, 2015.

“The sapphire market continues to be very challenging but the actions we are taking during this difficult time in the market will position the Company to drive better margins from a more diverse set of products once the market improves.”

The Company reported first quarter revenue of $8.9 million which was consistent with the prior quarter revenue and reduced its loss per share despite continued weakness in the LED market. Demand for the Company’s two-inch sapphire cores, primarily used in the mobile device market, increased in the period but was offset in part by lower revenue from four-inch LED core sales. The Company continued qualifying its large diameter PSS wafers and believes that PSS revenue will ramp in the second half of the year. A table with the breakdown of revenue is included with this press release.

Loss per share in the first quarter was $0.32 as compared with prior quarter loss of $0.36.

The Company also reviewed the status on key objectives for 2015, which include aggressively pursuing the potential of its PSS product, targeting high margin optical applications and driving down product costs. William Weissman, Rubicon’s CEO, commented, “The sapphire market continues to be very challenging but the actions we are taking during this difficult time in the market will position the Company to drive better margins from a more diverse set of products once the market improves.”

Second Quarter 2015 Guidance

The Company expects second quarter revenue and loss per share to be similar to the first quarter. While core sale volumes will likely be higher, total revenue is expected to be similar to the first quarter due to additional pricing pressure, particularly on two-inch material. Loss per share is also expected to be similar to the first quarter with cost reductions offsetting the additional price pressure. Commenting on the Company’s outlook, Mr. Weissman said, “While we expect second quarter results to be comparable to the first quarter, we have visibility into growing PSS volumes in the second half of the year. With increased wafer revenue in combination with reducing product costs, we expect a meaningful improvement in operating results by the end of the year.”

Conference Call Details

Rubicon will host a conference call at 5:00 p.m. Eastern time on May 7, 2015 to review the first quarter 2015 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 9:00 a.m. Eastern time on May 14, 2015, and can be accessed by dialing (877) 344-7529 or (412) 317-0088 (international). Callers should reference conference ID 10064451. The webcast will be archived on the Company's 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 first 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, 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 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 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,
2015 2014
(unaudited) (unaudited)
Assets
Cash and cash equivalents $ 25,127 $ 27,681
Restricted cash 179 161
Short-term investments 15,876 35,481
Accounts receivable, net 7,553 8,168
Inventories 21,798 28,570
Other current assets   8,920   13,780
Total current assets 79,453 113,841
Property and equipment, net 104,593 113,637
Other assets   1,604   1,346
Total assets $ 185,650 $ 228,824
 
Liabilities and Stockholders' Equity
Accounts payable $ 2,640 $ 5,676
Accrued and other current liabilities   1,845   2,759
Total current liabilities 4,485 8,435
 
Deferred tax liability   622   162
Total liabilities   5,107   8,597
 
Stockholders' equity   180,543   220,227
Total liabilities and stockholders’ equity $ 185,650 $ 228,824
 
 
Rubicon Technology, Inc.
Condensed Consolidated Statements of Operations (unaudited)
(in thousands except share and per share amounts)
         
  Three months ended March 31,
2015   2014
 
Revenue $ 8,910 $ 14,268
Cost of goods sold   14,019     21,762  
Gross loss (5,109 ) (7,494 )
 
General and administrative expenses 2,068 2,388
Sales and marketing expenses 338 467
Research and development expenses   433     576  
Total operating expenses   2,839     3,431  
Loss from operations (7,948 ) (10,925 )
 
Other income:
Interest (expense) income and other, net   (364 )   37  
Loss before income taxes (8,312 ) (10,888 )
Income tax expense   (36 )   (6 )
Net loss $ (8,348 ) $ (10,894 )
 
Net loss per common share:
Basic ($0.32 ) ($0.43 )
Diluted ($0.32 ) ($0.43 )
 
Weighted average common shares outstanding used in computing net income per common share, basic and diluted: 26,129,276 25,317,147
 
 
Rubicon Technology, Inc.
Condensed Consolidated Statements of Cash Flows (unaudited)
(in thousands)
         
  Three months ended March 31,
2015   2014
Cash flows from operating activities
Net loss $ (8,348 ) $ (10,894 )
 
Adjustments to reconcile net loss to net cash used in operating activities
Depreciation and amortization 3,317 3,507
Other 334 448
Deferred taxes 29 -
Changes in operating assets and liabilities
Accounts receivable 770 (4,597 )
Inventories 647 5,781
Other assets 432 (494 )
Accounts payable (1,050 ) 1,192
Accrued expenses and other current liabilities   (138 )   584  
Net cash used in operating activities   (4,007 )   (4,473 )
 
Cash flows from investing activities
Purchases of property and equipment (234 ) (1,924 )
Purchases of investments (307 ) (26,675 )
Proceeds from sale of investments   5,000     4,500  
Net cash provided by (used in) investing activities   4,459     (24,099 )
 
Cash flows from financing activities
Proceeds from issuance of common stock, net of issuance costs - 34,961
Other financing activities   (4 )   260  
Net cash (used in) provided by financing activities   (4 )   35,221  
 
Net effect of currency translation 326 (39 )
 
Net increase in cash and cash equivalents 774 6,610
Cash and cash equivalents, beginning of period   24,353     21,071  
Cash and cash equivalents, end of period $ 25,127   $ 27,681  
 
 
Rubicon Technology, Inc.
Revenue by Product Group
(in thousands)
           

Three months ended
March 31,

 

Three months ended
December 31,

 

Three months ended
March 31,

2015 2014 2014
Core
2 Inch $ 4,046 $ 3,192 $ 8,500
4 Inch 1,040 1,554 2,855
6 Inch   23   5   -
Total Core 5,109 4,751 11,355
Polished 1,427 1,470 1,005
PSS 464 511 90
R&D 141 137 125
Optical and other   1,769   2,043   1,693
$ 8,910 $ 8,912 $ 14,268
 

Contacts

Rubicon Technology, Inc.
Dee Johnson, 847-457-3426
Vice President, Investor Relations

Release Summary

Rubicon Technology, Inc. reports financial results for its first quarter, 2015.

Rubicon Technology, Inc.