Thank you, Ann. Good afternoon, everyone.

We are pleased you could join us today for Rubicon's First Quarter 2012 Earnings Conference Call. With me today are Raja Parvez, Rubicon's President and Chief Executive Officer; and Bill Weissman, Chief Financial Officer.

We have allotted one hour for our call this afternoon. Raja will provide an overview of first quarter results of operations and discuss the current market environment.

And then Bill will review our financial results in detail and discuss our outlook for the second quarter of 2012. We will then be happy to take your questions.

Today's call is being webcast through the Investor Relations section of our website located at www.rubicon-es2.com. A replay of this call will be available for 8 days and the webcast will be archived in the Investor Relations section of our website.

As a reminder, our press release and preliminary financial statements are also available in the Investor Relations section of our website.

Before we begin, please be advised that certain statements in this presentation relate to future results that are forward-looking statements made pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995, the accuracy of which are necessarily subject to risks, uncertainties and assumptions as to future events that may not prove to be accurate. Factors that could cause actual results to differ materially from those expressed or implied include general economic conditions and factors discussed in our most recent Form 10-K and other filings with the Securities and Exchange Commission.

We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise.

Now, I'd like to introduce our President and CEO, Raja Parvez.

Thank you, Dee. Good afternoon, everyone, and thank you for joining us today.

Revenue for the first quarter totaled $10.2 million with the large part share of $0.15. Sales of 2 through 4 inch cores began slowing in the second half of last year due to excess inventory in the LED slight change.

However, safer substrate inventories at most of our customers are now at normal level and 30 utilization among LED chip manufacturers has increased. As a result, we started seeing improvement in order for 2 through 4 inch diameter products later in the first quarter.

Our orders have continued to strengthen and currently we expect to ship record volumes of 2 through 4 inch cores in the second quarter. While pricing has stabilized, it remains at an all-time low, which I believe is a function of Sapphire manufacturers clearing out inventories.

We should begin to see pricing improve in the second half as inventory levels are further depleted. The backlighting market for LEDs is improving after a difficult 2011.

The adoption of LEDs in general lighting is still in its infancy but certain industrial and commercial applications, the economics are already compelling as new construction and retrofit activities increase with improving global economic conditions, solicited [ph] lighting growth in these applications should accelerate.

And on the consumer side, cost per lumen continues to come down. In recent months, pricing of 40 watts equivalent [ph] bulb has fallen below $10 in certain markets.

In our 6 inch wafer business, we see saw strong growth from the silicon and sapphire market with Q1 revenue from this market more than doubling sequentially to $4.6 million in the first quarter. We expect continued growth from this market this year, particularly in the second half, as this technology continues to gain market share.

6 inch orders from the LED market were limited in the quarter as our largest customer had excess inventory. As we previously announced, our new agreement with this key customer starts in June so we expect to see 6 inch revenues from the LED market pick up at the end of the second quarter.

We are still in the early days of adoption of 6 inch wafers for the LED market and specifications of these wafers continue to evolve as LED chip manufacturers gain more experience with these substrates in production.

The new agreement with our key customer was signed in February and there was a change in the specifications from the prior agreement. These revised specifications are well within our standard process capabilities so we are very comfortable with our ability to deliver the product under the revised specification.

We did continue to produce wafers under the old specifications in January and we also agreed to re-inspect wafers shipped in Q4 and rework to the revised specifications if necessary. After reworking some of these wafers to the revised specifications, a number of them became undersized and needed to be scrapped.

While we anticipated an accrued [ph]for some of these costs, the amount of scrap exceeded our estimate and there was an additional $1.8 million of cost in the first quarter. It is important to note, that this scrap was only the result of having to take existing wafers that met an agreed upon specification and bring them into conformity with the revised specification.

Meeting the revised specification for new wafers production is well within our standard capability. Rubicon was a pioneer in 6 inch sapphire wafer production and continuously the most capable producer of 9 [ph] diameter polish with sapphire wafers in the global market.

During the current industry cycle, we have continued to focus on developing intellectual property, reducing cost and enhancing our competitive positions. We continue to expand our vertical integration upstream by rolling out our raw material preparation process and downstream by moving forward with our development of factoring [ph] capability.

Most LED chip manufacturers at a [indiscernible] into the sapphire substrate before beginning the MOCVD process as a means of facilitating epitaxial growth and extracting more light from the LED chip. Offering an already pattern [ph] substrate can allow our customer to skip the step and focus on their core technology.

Some sapphire functions currently are for pattern substrates for smaller diameter. But to my knowledge no third party possesses the capability to offer pattern fixed wafers.

Our current plan is to have this product available in early 2013.

We continue to work on reducing costs particularly in our polishing operation through processing improvement and relocating our U.S. polishing operation to Malaysia.

We have reduced the cost of our polish wafers by approximately 10% over the past few quarters and our goal is to realize an additional 10% reduction over the next 2 quarters. We continue to make good progress on the rollout of our raw material process and we plan to have the majority of our raw material needs processed internally by the end of the year, which will offer significant cost savings and allow for tighter quality control.

Bill will provide details on our outlook for the second quarter in few minutes but I can tell you that we are seeing an improvement in the market. Revenue from 16 [ph] wafers in the second quarter should increase and we have good visibility on strong growth in 6 inch revenue in the third quarter as well.

With 2 through 4 inch cores we expect to ship a record volume in the second quarter. We expect pricing of these products remain low for now providing no real improvement in the margins in the second quarter, however Sapphire inventory level should decline and we expect improvement in the pricing environment in the second half of the year.

It has been a difficult cycle for our industry but we have remained focused on maintaining our technology and cost leadership during this period. By investing in ongoing development of new capabilities and defining our existing processes to extend our vertical integration and reduce cost.

We have also been keenly focused on maintaining our customer relationships. We have retained all of our customers and added new ones, even in this difficult environment.

I believe we will see considerable improvement in the second half of this year with the LED market improving and SoS applications gaining markets share and I believe Rubicon is well positioned for this recovery.

I will now like to turn the call over to Bill who will provide you with greater details on the financial results for the first quarter and some more specifics on our second quarter guidance.

Thank you, Raja. Revenue for the quarter was $10.2 million, $9.2 million lower than the prior quarter revenue of $19.4 million.

The sequential reduction of revenue was due to lower revenue from 6 inch polish wafers, which went from $16.7 million in the fourth quarter of last year to $5.5 million in the first quarter of this year. This reduction was attributable to the lower 6 inch revenue from the LED market as our key customer for this product has sufficient stock of wafers on hand and did not need to purchase additional material in the quarter.

Based on our current agreement with this customer, shipments are scheduled to resume at the end of the second quarter.

The reduction in 6 inch revenue from the LED market in the quarter was partially offset by an increase in 6 inch revenue from the SoS market. 6 inch revenue from the market more than doubled sequentially to $4.6 million in the first quarter compared to $2.1 million in the prior quarter.

Revenue from 2 through 4 inch cores increased to $2.8 million in the first quarter from $700,000 in the prior quarter as we began to see orders resume from those products with an increase in utilization rates at LED chip manufacturers and our polishing customers.

Higher sales volumes were partially offset by lower pricing. While core pricing has stabilized, the average price per millimeter of core was lower in the first quarter as compared to the fourth quarter of last year.

Revenue from the optical market was consistent with the prior quarter at $1.8 million. Our gross loss for the quarter was $3.4 million.

The challenges we had in the quarter contributing to the loss were the underutilization of our slicing and polishing operations due to the lower polished wafer volume and additional scrap and rework which was associated with the signing of the new customer contract, as Raja described earlier.

Operating expenses in the first quarter totaled $3.2 million, up slightly from the prior quarter total of $3.1 million, resulting in an operating loss of $6.6 million in the quarter. We recorded $2.9 million of tax benefit in the quarter, while our projected effective tax rate while on a profit remained at 30% to 35%, the rate of tax benefit accrued while in a loss will typically be higher and will vary based on the distribution of costs between our U.S.

and voyager [ph] operation. Our loss per share after recording a tax benefit was $0.16 in the first quarter as compared to earnings per share of $0.04 in the fourth quarter of last year.

Turning to the balance sheet and cash flow. We maintained a very strong cash position with $55 million in cash and short term investments on March 31st with no debt, which is unchanged from the prior quarter end.

We had strong accounts receivable collections in the quarter, which provided $20 million in cash. We used approximately $9 million in the quarter to increase raw material and bull inventory and $4.6 million in capital expenditures, which included $1.7 million for the purchase of land for our next [indiscernible] facility.

Inventory at March 31st was $32.5 million, up $9.7 million from the prior quarter end balance primarily due to increase in raw material and bull inventories.

Regarding our outlook for the second quarter, as Raja mentioned, we are seeing improvement in the LED market and while pricing remains very low, volumes are certainly picking up. We expect to sell record volume of 2 through 4 inch core in the second quarter.

However, at current prices this will not contribute to margin. It will however reduce inventory and keep our line operating.

We believe that current pricing is being driven by sapphire manufacturers carrying this [ph] inventory. Pricing has stabilized and we believe that the pricing environment should improve for these products in the second half.

6 inch revenue from the LED market should improve somewhat in the second quarter with a scheduled resumption of shipments to the key customer. However, the higher committed volumes under the new agreement begin in the third quarter.

Also, volumes sold for the SoS market should continue to be strong in the second quarter but here too we expect strong -- second half to be even stronger. We expect second quarter revenue to be between $15 million and $18 million.

Utilization of our slicing and polishing operations should improve somewhat but will likely still be quite low in the second quarter. Due to the low utilization along with low core pricing and some additional scrap associated with reworking the remaining old vintage wafers and inventory, we expect the loss of $0.10 to $0.14 per share in the second quarter.

We are not giving specific guidance for the third quarter but we expect better utilization of our facilities and we believe that core pricing will begin to improve, as sapphire inventories are lowered by the market. In addition, the wafer rework will be completed in the second quarter.

I will now like to turn the call back over to Raja for some closing comments and then we'll be happy to take your questions.

Thank you, Bill. It was a challenging quarter but we are now seeing improvement in the LED market.

Order for 2 through 4 inch cores have increased significantly for the second quarter and we expect the 6 inch wafer orders for both the LED and as the SoS markets to show strong growth in the second half of the year. With increasing wafer volume, ongoing cost reduction and the expected pricing improvement on 2 through 4 inch cores, we should see margins improve in the second half.

We continue to invest in extending our vertical integration, including raw material preparation and wafer tightening [ph] as we believe that our ability to control quality and costs through the entire Sapphire production process is a key differentiator by Rubicon and will enable us to maintain our leadership in this market. I want to thank you all for joining us today and thank you for your continued support.

And now, operator, may we take our first question?

I had a couple of questions I wanted to ask about the interplay between inventory level drawdown and utilization rates. Obviously you saw a large increase in your inventory during the quarter but you also said in the second quarter you are going to see record core shipments.

So how do we think about this and how should we expect inventory levels at the end of the second quarter to trend to?

What we had at capacity was largely in the slicing and polishing, we continue to grow crystals. We have not shut down any of the furnaces in crystal growth and we continue to use fabrications to produce rough cores and some finished cores.

So that's why you saw a growth in inventory and simultaneously you still had underutilization. Chris, what was the second part of your question again?

Given the comment of record core shipments in the second quarter, what should we expect your inventory levels to be as you exit the quarter?

Well, we should be selling everything we make in the quarter. So you should see core inventories come down and the bull inventory will probably stay roughly at the same level and you see lower core inventory.

Our wafer inventory is always very low. So that will be the major change.

And the other area is, I wanted to get a feel for the rework and how this happened because you basically don't have a lot of demand in Q1 and a little bit in Q2 as we exit, but it was quite a large charge there. So was this simply a lot of 6 inch wafers that were sitting in your inventory that all had to be reworked?

Yes, it was a combination of work-in-process in January. We signed a new agreement in February and we agreed to re-inspect wafers we shipped in the fourth quarter to make sure that they were in conformity with the new spec as well.

So it's a combination of with them [ph] and previously shipped wafers that we re-examined.

Okay and then I just had one more. In the sapphire market, I wanted to see if you are seeing any negative impact from new sapphire suppliers out there yet or if it's still just the traditional incumbent sapphire players?

Chris, again, the majority 80% plus market is still served by the incumbent supplier and there is not a meaningful -- there are here and there some people have added some capacity, especially at a smaller diameter but no meaningful impact on the market that we are seeing.

Guys, I wanted to dig into the PSS strategy a bit more. Was wondering if you could provide a little bit more detail mainly around capacity, size or geometry that you expect you to have this capability and then location.

Do you see this as being over in the post crystal Malaysia and would this boost your polishing utilization over there? Any expansion on this strategy might be helpful.

Yes, the main objective of offering the pattern sapphire especially to large diameter was 2. One is that it adds more productivity and revenue from the same real estate of the wafers.

Second, it will become -- more closer to our customer which is a differentiator and further differentiator from our competition. Now as you know the pattern sapphire 2 to 4 inch has been supplied by several polishing companies a couple of years and this model has been established successful but to my knowledge I have not seen any third party so far possessing for the larger diameters.

Now the second part of the question was obviously we are developing that technology currently in our Chicago areas and eventually that will be part of our Malaysia facility because that's where the polishing will be relocated all of it or most of it and that will provide further closer to the customers, more interactions with the customers and also logically and cost wise it also makes sense to have this production capability in Malaysia facility.

Okay and how should we think about CapEx for this, Raja? Assume that you will need to buy some steppers, et cetera for this process.

Are we seeing the capacity expansion at the core level that you had planned, is this being shifted to part of this vertical integration strategy?

Well, CapEx will be roughly on $7 million for the initial capacity and it won't require really any additional floor space than we already have and it may obviously facilitate the need to expand in Malaysia at some point but we currently have the floor space we need to do the development than the early stage production and we will be spending about $7 million in CapEx over the next 6 to 12 months on that project.

Okay and then could you elaborate on how the minimums are setup associated with the 6 inch contract, just curious if there is any more details there. In particular, how does the minimum purchases associated with this contract differ I guess from the first contract that you wrote with this customer?

We're not allowed to give specifics on that contract, but the volumes are lower than last year's because when we signed this agreement they wanted to see how the market evolved and everybody felt this is kind of a baseline agreement but we cannot give you specifics on the volumes.

Okay and then I guess last question on the patterning, how much do you think that will be able to add in terms of dollar content that you will be able to capture on a per millimeter basis?

It'll likely be a 20%, 25% premium over the unpatterned wafer price.

Few questions in terms of the rework situation, would you clarify a little bit that the rework was more on the Crystal Growth side or more on the polishing and cutting side?

The rework was actually on the last step of the polishing as, Avinash, we build in a product to this specification and these products led 100% specification based on the agreed upon but during as you know many of the fixed end customers this is evolving process as again new experience the specification evolve just like in any other technology and this one. So this one is a result of a combination of those different activities but the rework was involved and the last few steps on the polishing process.

Okay and maybe in terms of your margins, maybe you can talk a little bit about the pricing trends, you typically give us some idea about 2 inch equivalent pricing what was it during the quarter and what do you expect it to be in Q2 and Q3 kind of if you have any directional idea there.

Well the 2 through 4 inch core, even though it's been stable for the past few months, most of our core sales in the fourth quarter were early on when the pricing was higher so on a purely average quarter-over-quarter basis, they were down about 35%. But they have -- our view is they have kind of bottom stabilized and as we said in our prepared remarks we do expect as the inventory levels at the sapphire produces come down we will start to see some movement up in the second half.

So in Q2, you don't expect further declines in this 2 inch equivalent pricing?

Nothing meaningful, no.

Okay and clearly expect some upsides from Q3 onwards?

That's our expectation right now, yes.

So in terms of gross margins though at what price point do you think you have breakeven kind of situation here?

Well that depends on pricing and mix of the various products. We don't need real major movements in the core pricing to have a significant impact in the gross margin.

And would you also give us some mix in terms of overall LED sales, how much -- what percentage came from the back lightening and how much came from the general lightening market, any idea about that?

We don't track to that granularity I mean we supply wafers but as you know the use of -- the end use of our wafers is directly a function of what the market is, but as you know the market within the LED area has been the back lighting market, the BLU market and the corresponding to that is also the lighting market. So we don't track that one but typically it trails whatever the application uses by different customers.

Can you give us an update on the new facility? I know you purchased the land, have you got any timeframe down on when construction starts or anything relating to the new facility?

We haven't made a decision on that yet, we still have -- hold up 25% of the furnaces in our latest facility that we have not yet turned on, are waiting for improvement in the market and we have obviously plenty of inventory right now. So we will make a decision on that over the summer whether or not to break ground in the fall or wait until next spring.

In concert with that utilization at the Crystal Growth side, if I remember correctly you were 80%, 85% last quarter still running that are you roughly the same now?

Yes, that's right.

Okay so nothing has changed as far as unit volume goes?

Correct.

And do you have any idea yet on how much rework you are going to have to do in this quarter, is it going to be stepped out as a separate item or is it kind of just built into your R&D or other?

I don't think it's in our cost of goods and we estimate it to be $500,000, $600,000 of additional cost.

Okay and lastly, cash burn for this coming quarter for the second quarter you are going to be -- are you actually spending for the patterning project yet or is that -- does that start next quarter?

Bulk of that will be in the second half of the year, so there shouldn't be -- we will probably have a cash burn but it shouldn't be anything really significant.

This is Roger [indiscernible] in for Stephen Chin. Just a quick question about your 2 inch and 4 inch wafers, some of your customers are saying that they are not able to make a profit on those products.

I was wondering if you guys could share some light on what the underutilization charge was in the quarter and if you take that out are you profitable at a gross margin level on 2 inch and 4 inch?

Well in the second quarter our best case scenarios where we were kind of a breakeven on a gross margin basis for the 2 and 4 inch and will likely there is some money on it. So, based on today's pricing it's difficult to really get any kind of contribution for those products right now.

Got it and then just on the SoS market Bill, what is the gross margin profile for the SoS market and what were the main reasons for the jump in the SoS sales? Is it just the market is improving or you had any major wins in that market?

Well we don't get products specific margins as far as why we are seeing growth in the SoS market, the pan [ph] holder for that technology is having some -- seeing some key wins recently and we are not allowed to disclose any details around that but they seem to be getting a lot of traction with their technology right now.

And maybe let me ask the question other way, on the SoS margins are they in line with your LED 6 inch wafers?

Yes.

This is Shawn for Ahmar. I was wondering if you guys could just go into a little more detail on -- give us some more color on what are you seeing in terms of just your customer inventories, is your confidence that things are going to really kind of pick up steam in the second half of the year?

Well 2 through 4 inch the energy levels at a normal buffer start at any customers in this market and this technology keeps but there is some inventory in the 6 inch customer but that is being depleted as progressively and that is why our new agreement with the key customers starts actually in June of this year and that was the reason for it.

Great and as we look ahead to increasing that 6 inch mix in the back half of the year. Could you talk a little bit about or at least give us some sense of how 2013 mix might shape out by diameter meaning clearly right now you are more of a smaller diameter company this quarter and probably more so next quarter as well.

But as we look into 2013 are we going to start seeing the majority of your revenue coming from 6 inch at this point or what are you guys expecting in terms of just mix and diameter?

Our targets that early haven't changed it depends on partially on pricing but our targets on that are 60% for the large diameter wafers and 40% on the smaller diameter cores and I think that's where we will be next year.

And again the 6 inch economics is still there, the growth of the reduction of 6 inch they have been delayed right now due to the market conditions but all our economics are still compelling to our customers so that's why the major companies some of them have already move to production level and some of them are currently working on developing corresponding technologies to be ready for the 6 inch and larger diameter production.

As we look at this sort of going ahead and just to get -- just more visibility on gross margins, utilizations you clearly expect to pick up especially in Q2 late it sounds like with the 6 inch but have gross margins bottomed here for you guys or what are the possibilities there in terms of where we could see those return to or will they pretty much stay in sort of just 30 levels, high 30s, mid-level?

Well I think we all start to see gross margin improvement from here on out, how quickly again depends on the pricing environment but our 6 inch mix will be much better in the second half and our longer term target margins will still remain in the 40% range which in order to get there we need to continue to work on our cost, clearly our 6 inch cost and we have to see some improvement in the core price.

This is John Shen in for Andrew. I was wondering if you could talk a little bit about the competitive landscape in Korea.

While the compare as you know that the one encumbered company in Korea which has been for quite some time and that's one of the 5 companies that as I mentioned earlier some of the majority 80% plus market. Now of course there are a lot of chatter has been going in the market for various people entering into these markets and so far we have not seen a meaningful capacity added or offered in the marketplace.

Okay and can you comment on your market share there?

Well I believe we still have the significant market share over there.

And we had obviously a revenue into that region was down significantly because our largest customer in that region was not actively buying but it's still a key customer and we will see the revenues from that region increase significantly.

Especially in the second half.

Okay and as a follow-up, is your biggest customer buying 6 inch wafers from other suppliers as well?

While we cannot give specific information but as you know it is prudent for any manufacturing company to have a diversified supply chain. However, we still believe that we have the majority of market share with that customer.

Raja, with the industry demand picking up I wanted to get a feel for when you think we will see some additional 6 inch LED production -- customers come to production with 6 inch favors, we know it was delayed from the downturn but any expectations in this year we will see another large volume customer?

We may see in the fourth quarter or the beginning of next year based on again, Chris, it is a function of the market and this market has been quite difficult so far but the previous -- if you look at the previous in market has gone up significantly in a short period of time also but we may see -- but we know that we are still working with a large number of 6 inch customers and in some cases we are qualified, in some cases we are in progress of it and even we picked up some few customers, [indiscernible] down with a new customer also so we expect to see some additional but perhaps in Q4 or the beginning of the next year.

Some comments you made previously in prior calls about some of your Japanese competitors having a difficult transition to 6 inch because of their specific form of sapphire production. Do you think that when Japanese LED makers move to 6 inch that non-Japanese wafer suppliers are likely to own a good piece of that market?

Well as you know Japan is a very challenging market for anybody coming outside Japan and so our Rubicon Technology has been well known, a very well positioned in Japan market for many, many years. So obviously when there is a competitive environment you might see it but it's a very challenging environment and -- but we are very well positioned there.

And we are working with several Japanese based LED companies and their development of 6 inch.

And for quite a number of years.

And the last question is tied to the SoS market, maybe you can give us some sort of relative level of how far is the SoS technology penetrated into its own growth applications. So we can kind of get a long term process on what do you think the long term growth prospect is for SoS wafers for you?

I believe first of all this technology has grown significantly over the past several quarters and I believe December [ph] we know again we cannot give you the specifics but what we know that technology is gaining more and more adaptability in the smart phones and as you can see it is reflective of our penetration in their market and we know that we have the majority market share of this customer. We are very well positioned with several of their foundries and I believe that their market will continue to improve and increase based on what we know so far.

Do you think that in a few years you could see doubling kind of the market size 50%, any kind of reference ballpark?

It's very hard for us to estimate at this point but with the rate we are going with right now it is pretty significant growth that we expect and our customers expect.

This is more a qualitative question. When you are dealing with customers that are looking at 6 inch -- the move from 4 inch to 6 inch or 2 inch to 6 inch, in terms of their perspective is this a complete line change for them, a new process or is this more just getting used to larger wafers and some of the issues you get on edges and issues like that?

Is this a concept for them or is this just a top of the equipment change, let's put it that way.

Well first of all at the front end of the technology which is the MOCVD growth, MOCVD reactor that is an equipment change that you have to acquire an equipment for which can process the larger diameter of wafers. Whereas the back end equipment, which is post-MOCVD specially wafer fabrication and testing is quite similar equipment which they have been using for other different type of chips as well.

Now in terms of process technology it again depends on the maturity level of those customers and those companies which have decided to migrate or move to 6 inch are the companies which traditionally are well known chip companies, not only LED but other chip companies as well. So it's a mix up but it's a change at the equipment level but the process level is more learning curve and more adoption of those.

Thanks for everyone joining us today. We appreciate your interest and we look forward to speaking with you again soon.

This concludes the Rubicon First Quarter Conference Call.