Rubicon Technology, Inc. (NASDAQ:RBCN), a leading provider of sapphire substrates and products to the LED, RFIC, semiconductor, and optical industries, today reported financial results for its first quarter ended March 31, 2012.

The Company reported revenue of $10.2 million and a loss of $0.15 per share for the first quarter. While the LED market is beginning to rebound, demand for sapphire substrates from that market remained weak in the quarter, resulting in a sequential decrease in revenue. Rubicon reported a sequential increase in revenue from the Silicon-on- Sapphire (“SoS”) market as SoS technology appears to be gaining market share.

Gross profit in the first quarter was negative, at $3.4 million, primarily as a result of the previously disclosed scrap expense of $1.8 million and underutilization of the Company’s fabrication and polishing operations. The Company’s operating loss was partially offset by a tax benefit, resulting in a first-quarter after-tax loss of $0.15 per share.

Raja Parvez, President and CEO of Rubicon Technology, commented, “As expected, market conditions remained challenging in the first quarter. Orders for two- through four-inch diameter products improved during the quarter but pricing remained low. For six-inch wafers, the SoS business was strong but, shipments to the LED market were limited due to excess inventory at a key customer. As we previously disclosed, shipments to this customer are scheduled to resume at the end of the second quarter.”

The Company ended the first quarter with $55.0 million in cash and short-term investments and no debt, unchanged from the prior quarter end, due to strong accounts receivable collections and limited capital expenditures.

Second Quarter 2012 Guidance
Commenting on the outlook for the second quarter of 2012, Mr. Parvez said, “We expect revenue in the second quarter of between $15 and $18 million. With the improvement in the LED market, we expect to ship a record volume of two- through four-inch cores into that market in the second quarter. However, we expect core pricing to remain low in the second quarter and to begin to improve in the second half as sapphire inventory levels decline. Revenue from six-inch polished wafers should begin to improve in the second quarter, and we have good visibility on stronger six-inch polished wafer growth in both the LED and SoS markets in the second half. However, underutilization of our slicing and polishing operations and low core pricing will pressure margins in the second quarter, and we expect a loss of $0.10 to $0.14 per share for the quarter, assuming a share count of 22.5 million and a tax benefit at a rate of approximately 40%.”

Mr. Parvez continued, “We continue to invest in extending our vertical integration, including raw material preparation and wafer patterning, as we believe that our ability to control quality and cost through the entire sapphire production process is a key differentiator for Rubicon that will enable us to maintain our leadership in this market.”