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Rubicon Technology, Inc. Reports Strong Third Quarter 2010 Results of Operations and Announces the Opening of Two New Manufactu

^{Published on 2010-11-05 05:15:55 - Market Wire}
 

BENSENVILLE, Ill.--([ BUSINESS WIRE ])--[ 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 third quarter ended September 30, 2010 and announced the opening of two new manufacturing facilities.

"With the increased polishing capacity we are bringing on-line, we expect the six inch polished wafer product to become an increasingly large percentage of our total revenues."

Third Quarter Results and Fourth Quarter Outlook

Third Quarter 2010 Financial Highlights

• Revenue rose to $20.5 million, up 30 percent sequentially
• Gross margin increased 8 percentage points to 54 percent
• Operating margin reaches 40 percent
• Diluted earnings per share nearly doubles sequentially to $0.35

Commenting on the results, Raja Parvez, President and CEO said, "We had another outstanding quarter with strong growth in revenue and earnings. Overall demand from the LED market remained strong in the quarter as our customers continued to add capacity in response to the projected rapid growth in the LED industry.a

The Companya™s revenue increased 30 percent sequentially to $20.5 million in the current quarter largely due to increased pricing for sapphire substrates driven by strong demand from the LED market. The Company also reported continued strong interest for its polished six inch wafers. Mr. Parvez continued, aWith the increased polishing capacity we are bringing on-line, we expect the six inch polished wafer product to become an increasingly large percentage of our total revenues.a

Fourth Quarter 2010 Guidance

Commenting on the outlook for the fourth quarter, William Weissman, Rubicona™s Chief Financial Officer said aWhile we have seen some softening in demand in certain geographies associated with higher TV panel inventories, overall demand remains strong and we expect prices for our sapphire products to increase in the fourth quarter by at least 15 percent on average sequentially. We also anticipate beginning to add capacity in both crystal growth and polishing in the quarter. As a result we expect revenue to increase approximately 27 percent sequentially to between $25 and $27 million. Gross margin should be in the high 50 percent range with operating margin in the mid 40 percent range. Based on a projected diluted share count of 24 million shares, we expect diluted earnings per share to be between $0.47 and $0.49.a

The Opening of Two New Factories

The Company also reported that it recently opened both its new crystal growth facility in Batavia, Illinois and its new polishing facility in Penang, Malaysia. The new crystal growth facility will be producing larger crystals allowing the Company even more flexibility in addressing the growing demand for larger diameter sapphire substrates. The new polishing facility will be responsible for the more labor intensive crystal fabrication processes and will also allow the Company to significantly expand its capacity for large diameter wafer polishing.

Mr. Parvez commented, aCombined, I believe these two new facilities give us a significant advantage in the marketplace. This combination of high volume, high quality, large diameter crystal growth and polishing capability makes us unique in the marketplace today and positions us very well to maintain our leadership position for years to come.a

Conference Call Details

Rubicon will host a conference call at 5:00 p.m. Eastern time on November 4, 2010 to review the highlights of the third quarter 2010 results and the fourth quarter 2010 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://www.rubicon-es2.com/index.html ]. 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 11, 2010, and can be accessed by dialing (888) 286-8010 or (617) 801-6888 (international). Callers should reference conference ID 19125212. The webcast will be archived on the Company's website.

About Rubicon Technology, Inc.

Rubicon Technology, Inc. is an advanced electronic materials provider that is engaged in developing, manufacturing and selling monocrystalline sapphire and other crystalline products for light-emitting diodes (LEDs), radio frequency integrated circuits (RFICs), blue laser diodes, optoelectronics and other optical applications. The Company applies its proprietary crystal growth technology to produce very high-quality sapphire in a form that allows for volume production of various sizes and orientations of substrates and windows. Rubicon is a vertically-integrated manufacturer with capabilities in crystal growth, high precision core drilling, wafer slicing, surface lapping, large-diameter polishing and wafer cleaning processes, which the Company employs to convert the bulk crystal into products with the quality and precision specified by its customers. The Company is actively developing larger diameter products to support next-generation LED, RFIC and optical window applications.

Further information is available at [ http://www.rubicon-es2.com ].

Forward-Looking Statements

Certain of the statements in this release, particularly those preceded by, followed by or including the words abelieves,a aexpects,a aanticipates,a aintends,a ashould,a aestimates,a or similar expressions, or those relating to or anticipating financial results for periods beyond the end of the third quarter of 2010, constitute aforward-looking statementsa 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 managing the expansion of our manufacturing capacity, market acceptance of LED lighting, our ability to adapt to future changes in the LED industry, our successful development and market acceptance of RFIC and other new products, changes in the average selling prices of sapphire 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.