16 February 2011

Sapphire maker Rubicon’s revenue grows more-than-expected 44% in Q4

For fourth-quarter 2010, Rubicon Technology Inc of Bensenville, IL, USA, which makes monocrystalline sapphire substrates and products for the LED, RFIC, semiconductor and optical industries, has reported record revenue of $29.5m, up 44% on Q3’s $20.5m (well above the expected 27% growth to $25–27m) and more than tripling from $8.5m a year ago. This took full-year revenue to $77.4m for 2010, almost quadrupling from 2009’s $19.8m.

The fourth-quarter growth is attributed to a combination of increased pricing (resulting from strong demand from the LED market) and increased sales volume (enabled by the additional capacity from the firm’s two new manufacturing facilities: the crystal growth facility in Batavia, IL, USA and the polishing facility in Penang, Malaysia).

Gross margin rose from 54% in Q3 to 63% (exceeding the forecast ‘high 50% range’). Operating margin rose from 40% to 50% (exceeding the forecast ‘mid 40% range’). Compared to a net loss of $0.76m a year ago ($0.04 per share), net income almost doubled from Q3’s $8.3m ($0.35 per share) to $15.4m ($0.64 per share, far outstripping the expected $0.47–0.49). After generating $13.3m in cash flow from operating activities but spending $14.4m on property and equipment, during the quarter cash and cash equivalents rose from $12m to $16.1m (up from $3.9m a year ago).

Rubicon says that its capacity expansion remains on schedule and that there continues to be strong interest for its polished 6-inch wafers, for which revenue rose more than 70% sequentially to $8.1m. “Demand for 6-inch wafers is increasing and we expect significant growth in this product in the second half of this year as more LED chip manufacturers have announced their intention to move into production on 6-inch wafers later this year,” says president & CEO Raja Parvez. “I am very pleased with the extraordinary finish to 2010 and look forward to what we expect to be a very strong 2011,” he adds.

For first-quarter 2011, Rubicon expects continued strong demand, resulting in revenue growing about 20% sequentially to $34–36m. “We expect substrate pricing in the first quarter to be consistent with fourth quarter pricing, and we expect to continue adding capacity on-schedule at our two new facilities,” says chief financial officer William Weissman. “Utilization of newly added equipment and new hires will be lower in the first quarter, particularly in Malaysia, as we continue the qualification process with our customers,” he notes. “We anticipate gross margin, therefore, to be slightly lower in the first quarter but still in the high 50% range.” Diluted earnings per share should be steady at $0.62–0.65.

See related items:

Sapphire maker Rubicon's revenue grows more-than-expected 30% in Q3

Rubicon’s sales grow 37% in Q2 to record $15.8m

Tags: Rubicon Sapphire substrates

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