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Rubicon Revenues Rosy With 37% Sequential Increase to $15.8 million

The firm has also announced that it has signed a $71 million supply agreement for six inch polished substrates to a major LED customer

Rubicon Technology, a leading provider of sapphire substrates and products to the LED, RFIC, Semiconductor, and Optical industries, has reported financial results for its second quarter ended June 30, 2010.

Revenues rose to $15.8 million, up 37 % sequentially driven by strong demand from the LED market. The strong demand enabled the Company to increase pricing on its sapphire substrates by 16 % on average over prices in the prior quarter. Gross margin increased to 46 %, up from 36 % in the previous quarter. Diluted earnings per share were $0.18 as compared to $0.07 in Q1 2010.

 


The firm has also signed a $71 million contract to supply a key LED customer with six inch polished substrates and has said that its capacity expansion plans are on schedule and on budget



 Commenting on the results, Raja Parvez, President and CEO said, "We had a very strong quarter reaching historical highs in revenue and earnings. We continued to dramatically increase gross margin and earnings per share in the quarter through increased pricing, improved product mix, and operational efficiency."

The Company noted that sales of its six inch polished substrates accounted for a significant portion of the sequential increase in revenue. Parvez commented, "Revenue from the sale of six inch polished substrates more than doubled sequentially as our customers continue to make progress on their development efforts using six inch substrates."

Third Quarter 2010 Guidance

Commenting on the outlook for the third quarter, William Weissman, Rubicon's CFO said, "We see an even stronger pricing environment in the third quarter and expect our substrate prices to increase by at least 20 % on average sequentially. We estimate revenue for the third quarter will increase to approximately $19.5 million. Gross margin should be in the low 50 % range and we expect diluted earnings per share of approximately $0.28, based on a projected diluted share count of 24.3 million shares."

Rubicon's share count increased in June with the successful completion of a follow-on offering which raised approximately $61.5 million in cash for the Company. Weissman continued, "The proceeds from the offering strengthens our balance sheet and will enable us to continue our rapid expansion."

The Company also reported that it entered into an agreement with a major LED chip manufacturer which calls for Rubicon to provide six inch polished substrates from November 2010 through December 2011. The total value of the contract is approximately $71 million.

 Parvez commented, "This contract is very exciting for Rubicon. While we have been supporting several LED customers in their development efforts on six inch substrates, this is the first LED chip manufacturer to move into volume production on this size material. We are proud that our capabilities in large diameter sapphire are helping the LED industry continue to evolve."

 
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