Rubicon Technology, Inc. (NASDAQ:RBCN), a leading provider of sapphire substrates and products to the LED, RFIC, semiconductor, and optical industries, today provided preliminary financial results for the first quarter, which ended March 31, 2012.
The Company reported that it expects revenue for the first quarter of approximately $10 million, in line with its guidance of $8 to $12 million. Rubicon recorded expense of $1.8 million in the quarter associated with scrap and re-work of wafers. The company signed a new contract with its major six-inch wafer customer in February of this year, and this expense is associated with bringing wafers produced prior to the signing of the new contract to the revised specifications defined in the new agreement. Other factors impacting the quarter were a product mix reflecting a greater than expected proportion of lower margin two- through four-inch cores and an additional tax benefit. The company expects to report a loss of approximately $0.15 per share for the quarter, compared with earlier guidance of a loss between $0.10 and $0.14 per share.
“We anticipated that we would need to rework some of the wafers already produced to meet the new specifications. During the re-work process, some wafers became dimensionally non-compliant and needed to be scrapped,” said Raja M. Parvez, President and CEO of Rubicon. “The scrap charge is related only to wafers produced prior to the signing of the new agreement. This is not a problem with new production as these new specifications are well within our standard process capabilities.”
Regarding the second quarter outlook, Mr. Parvez said, “We are seeing the market begin to rebound in the second quarter with an increase in orders for two- through four-inch sapphire cores and an increase in six-inch wafer sales for both the LED and SoS markets. However, pricing remains low. We expect revenue in the second quarter of $15 to $18 million and a loss per share of $0.10 to $0.14.”