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15 August 2016

Rubicon's revenue falls to $3.5m in Q2

For second-quarter 2016, Rubicon Technology Inc of Bensenville, IL, USA (which makes monocrystalline sapphire substrates and products for the LED, semiconductor and optical industries) has reported revenue of $3.5m, down on $4.3m last quarter (due mainly to a temporary reduction of wafer orders) and less than half of the $7.1m a year ago.

Fiscal Q2/2015 Q3/2015 Q4/2015 Q1/2016 Q2/2016
Revenue $7.1m $5.3m $2.5m $4.3m $3.5m

The quarter-to-quarter decline was due to revenue from wafer sales falling from $2.35m last quarter to $1.83m (although this is still up on $1.74m a year ago). This was mostly due to polished wafers falling to $0.49m compared with $0.83m last quarter and $0.84m a year ago. While still growing from $0.9m a year ago, revenue from patterned sapphire substrates (PSS) fell back slightly from $1.5m last quarter to $1.34m.

R&D revenue was steady at about $0.1m (down slightly on $0.14m a year ago). Optical revenue of $0.9m was down on $1.4m last quarter and $1.2m a year ago.

Revenue from core sales has rebounded from $0.44m last quarter to $0.69m, although this is down on $4m a year ago. All of this $0.69m was 4-inch cores (rebounding from $0.44m last quarter but down from $1.24m a year ago), as 2-inch cores fell further from $2.62m a year ago and just $2000 last quarter to zero, while 6-inch cores ($0.17m a year ago) remained zero.

Operating expenses have risen from $2.7m last quarter to $4.1m, due mainly to general & administrative expenses growing from $1.8m to $2.7m.

Although better than $8.6m ($0.33 per share) a year ago, net loss has worsened from $7.3m ($0.28 per share) last quarter to $8.2m ($0.31 per share). However, this was impacted by about $0.04 per share through increased proxy solicitation costs related to the contested director election.

Net cash used in operating activities has risen further, from $5.1m a year ago and $5.7m last quarter to $6.6m, impacted by building a higher consignment inventory for a key wafer customer in response to higher-volume orders for third-quarter 2016. In addition, timing of receivables collections and payment on the settlement of securities litigation affected cash flow. During the quarter, cash and short-term investments hence fell further, from $25m last quarter to $18m.

Also during the quarter, Rubicon took additional actions to reduce operating costs which it anticipates will positively impact cash flow.

The company continues to work on re-focusing its business on the optical sapphire market. Continued progress was reported on its two new technologies: LANCE large window growth and SapphirEX coating technologies (patents pending), which are expected to allow the company to introduce new products into the optical sapphire market. Rubicon also continues to work with developers of other new applications for sapphire outside of the traditional LED and mobile device markets.

"Given the excess capacity of sapphire serving the LED substrate and mobile device markets, we are placing more emphasis on the optical and industrial sapphire markets, where we feel we have a greater competitive advantage," says CEO Bill Weissman. "In addition, the company is reviewing a variety of alternatives, with a goal of providing greater value to our stockholders."

See related items:

Rubicon's stockholders re-elect incumbent directors

Rubicon appoints new independent director

Rubicon comments on director nominations from Paragon Technologies

Rubicon's revenue rebounds, driven by 6" patterned sapphire substrates

Rubicon's revenue halves in Q4 due weak demand and delayed ramp-up at PSS wafer customer

Rubicon's Q3 revenue hit by LCD TV backlighting slowdown and customers' excess inventory

Rubicon's revenue falls 20% in Q2, as 2-inch sapphire core sales and pricing hit by weak mobile market

Tags: Rubicon Sapphire substrates

Visit: www.rubicon-es2.com

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