EWING, N.J.--(BUSINESS WIRE)--
Universal
Display Corporation (Nasdaq: OLED), enabling energy-efficient
displays and lighting with its UniversalPHOLED®
technology and materials, today reported financial results for the third
quarter ended September 30, 2014.
For the quarter, the Company reported net income of $4.3 million, or
$0.09 per diluted share, on revenues of $32.9 million. For the third
quarter of 2013, the Company reported net income of $5.5 million, or
$0.12 per diluted share, on revenues of $32.8 million. During the
quarter, the Company incurred income tax expense of $2.0 million,
compared to income tax benefit of $1.1 million in the same quarter of
2013. For the quarter, the Company reported operating income of $6.1
million, compared to $4.2 million for the third quarter of 2013.
For the first nine months of 2014, the Company reported net income of
$28.7 million, or $0.61 per diluted share, representing increases of 77%
and 74%, respectively, compared to net income of $16.2 million, or $0.35
per diluted share, in the same period of 2013.
"We are pleased to report another quarter of strong operating profits
and earnings. The results reflected the continued diversification in our
customer base and strength of our operational model," said Sidney D.
Rosenblatt, Executive Vice President and Chief Financial Officer of
Universal Display. "In a quarter in which revenues were consistent with
the same quarter in 2013, we were able to increase our operating income
by 43%, which illustrates our commitment to managing our expenses."
Mr. Rosenblatt
continued, "For the first nine months of the year,
revenues increased by 39% compared to the same period in 2013 and net
income increased by 77% compared to the same period in 2013. This
quarter's sales were softer-than-anticipated due to industry dynamics
resulting from weaker-than-expected high-end mobile phone sales and
lower host material sales as the result of our host materials not being
used in certain new product offerings. We were pleased to see new OLED
products introduced during the quarter, which included wearables,
tablets, smartphones and TVs. We believe that this growing proliferation
of OLED displays is setting the stage for panel makers' investment plans
for 2015 and beyond to increase. Add that to our ongoing advancements
with new OLED materials and technologies, we continue to be excited by
the robust trajectory projected for the OLED market and our future."
Third Quarter 2014 Results
Revenues for the third quarter of 2014 were $32.9 million, compared to
revenues of $32.8 million in the same quarter of 2013. Growth in third
quarter revenues was led by a 260% increase in royalties and license
fees, which rose to $5.4 million, from $1.5 million in the third quarter
of 2013. This growth was offset by a 9% decrease in material sales,
which were $27.5 million, down from $30.3 million in the third quarter
of 2013. This decline was mainly due to lower sales of host materials.
The Company reported operating income of $6.1 million for the three
months ended September 30, 2014 compared to $4.2 million in the same
period in 2013. During the quarter, the Company incurred income tax
expense of $2.0 million compared to income tax benefit of $1.1 million
in the same quarter in 2013.
No revenue was recognized under the Samsung Display Co., Ltd (SDC)
licensing agreement in the third quarter, as SDC is obligated to make
licensing payments in the second and fourth quarters of the year. For
2014, the Company recognized $25 million in SDC licensing revenue in the
second quarter and expects to recognize another $25 million in the
fourth quarter, for a total of $50 million in SDC licensing revenues for
the year.
Operating expenses for the third quarter of 2014 were $26.8 million,
compared to $28.6 million in the same quarter of 2013. Cost of materials
for the quarter was $7.4 million, compared to $9.8 million in the third
quarter of 2013.
The Company's balance sheet remained strong, with cash and cash
equivalents and short-term investments of $268.4 million as of
September 30, 2014.
On June 2, 2014, the Company's Board of Directors approved a stock
repurchase program authorizing the Company to purchase shares of its
common stock up to a total purchase price of $50 million over the
subsequent 12 months. Since Board approval and through September 30,
2014, the Company purchased 714,328 shares at a cost of approximately
$22.5 million.
First Nine Months Results
Revenues in the first nine months of 2014 were $134.9 million, a 39%
increase compared to $97.2 million for the first nine months of 2013.
Material sales in the first nine months of the year were $98.7 million,
an increase of 41% compared to material sales of $70.2 million in the
first nine months of 2013. Operating income in the first nine months of
2014 was $41.5 million, or 31% of revenues, compared to operating income
of $18.8 million, or 19% of revenues, in the first nine months of 2013.
For the first nine months of 2014, we reported net income of $28.7
million, or $0.61 per diluted share, representing increases of 77% and
74%, respectively, compared to net income of $16.2 million, or $0.35 per
diluted share, in the same period of 2013.
2014 Guidance
With the OLED industry still in its nascent stage where many variables
can have a material impact on its growth, the Company now expects
revenues to be in the range of $183 million to $185 million. The revised
expectation is based on the assumption that the above noted third
quarter customer trends are likely to continue for the remainder of this
year.
Conference Call Information
In conjunction with this release, Universal Display will host a
conference call on Thursday, November 6, 2014 at 5:00 p.m. Eastern Time.
The live webcast of the conference call can be accessed under the "events"
portion of the Company's website. Those wishing to participate in the
live call should dial 1- 888-468-2440 (toll-free) or 1- 719-457-1512,
and reference conference ID 1670062. An online archive of the webcast
will be available within two hours of the conclusion of the call.
To see how Universal Display is changing the face of the display and
lighting industries with its UniversalPHOLED, white OLED, and flexible
OLED technologies, please visit the company's website at http://www.udcoled.com.
About Universal Display Corporation
Universal Display Corporation (Nasdaq: OLED) is a leader in developing
and delivering state-of-the-art, organic light emitting diode (OLED)
technologies, materials and services to the display and lighting
industries. Founded in 1994, the Company currently owns or has
exclusive, co-exclusive or sole license rights with respect to more than
3,300 issued and pending patents worldwide. Universal Display licenses
its proprietary technologies, including its breakthrough high-efficiency
UniversalPHOLED® phosphorescent OLED technology, that can
enable the development of low power and eco-friendly displays and white
lighting. The Company also develops and offers high-quality,
state-of-the-art UniversalPHOLED materials that are recognized as key
ingredients in the fabrication of OLEDs with peak performance. In
addition, Universal Display delivers innovative and customized solutions
to its clients and partners through technology transfer, collaborative
technology development and on-site training.
Based in Ewing, New Jersey, with international offices in Ireland, South
Korea, Hong Kong, Japan and Taiwan, Universal Display works and partners
with a network of world-class organizations, including Princeton
University, the University of Southern California, the University of
Michigan, and PPG Industries, Inc. The Company has also established
relationships with companies such as AU Optronics Corporation, BOE
Technology, DuPont Displays, Inc., Innolux Corporation, Kaneka
Corporation, Konica Minolta Technology Center, Inc., LG Display Co.,
Ltd., Lumiotec, Inc., Philips Technologie GmbH, Pioneer Corporation,
Samsung Display Co., Ltd., Sony Corporation, and Tohoku Pioneer
Corporation. To learn more about Universal Display, please visit http://www.udcoled.com.
Universal Display Corporation and the Universal Display logo are
trademarks or registered trademarks of Universal Display Corporation.
All other company, brand or product names may be trademarks or
registered trademarks.
All statements in this document that are not historical, such as
those relating to Universal Display Corporation's technologies and
potential applications of those technologies, the Company's expected
results as well as the growth of the OLED market and the Company's
opportunities in that market, are forward-looking financial statements
within the meaning of the Private Securities Litigation Reform Act of
1995. You are cautioned not to place undue reliance on any
forward-looking statements in this document, as they reflect Universal
Display Corporation's current views with respect to future events and
are subject to risks and uncertainties that could cause actual results
to differ materially from those contemplated. These risks and
uncertainties are discussed in greater detail in Universal Display
Corporation's periodic reports on Form 10-K and Form 10-Q filed with the
Securities and Exchange Commission, including, in particular, the
section entitled "Risk Factors" in Universal Display Corporation's
annual report on Form 10-K for the year ended December 31, 2013.
Universal Display Corporation disclaims any obligation to update any
forward-looking statement contained in this document.
(OLED-C)
|
|
|
|
|
|
|
UNIVERSAL DISPLAY CORPORATION AND SUBSIDIARIES
|
|
CONSOLIDATED BALANCE SHEETS
|
|
(UNAUDITED)
|
|
|
|
(in thousands, except share and per share data)
|
|
|
|
|
|
|
|
|
|
September 30, 2014
|
|
December 31, 2013
|
|
ASSETS
|
|
CURRENT ASSETS:
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
37,391
|
|
|
$
|
70,586
|
|
|
Short-term investments
|
|
230,968
|
|
|
202,024
|
|
|
Accounts receivable
|
|
22,107
|
|
|
15,657
|
|
|
Inventory
|
|
29,834
|
|
|
10,595
|
|
|
Deferred income taxes
|
|
17,363
|
|
|
21,563
|
|
|
Other current assets
|
|
13,335
|
|
|
6,623
|
|
|
Total current assets
|
|
350,998
|
|
|
327,048
|
|
|
PROPERTY AND EQUIPMENT, net of accumulated depreciation of $24,235
and $22,756
|
|
17,860
|
|
|
14,893
|
|
|
ACQUIRED TECHNOLOGY, net of accumulated amortization of $41,089 and
$32,841
|
|
85,763
|
|
|
94,011
|
|
|
INVESTMENTS
|
|
2,606
|
|
|
7,417
|
|
|
DEFERRED INCOME TAXES
|
|
14,435
|
|
|
19,143
|
|
|
OTHER ASSETS
|
|
508
|
|
|
242
|
|
|
TOTAL ASSETS
|
|
$
|
472,170
|
|
|
$
|
462,754
|
|
|
LIABILITIES AND SHAREHOLDERS' EQUITY
|
|
CURRENT LIABILITIES:
|
|
|
|
|
|
|
|
Accounts payable
|
|
$
|
7,039
|
|
|
$
|
5,256
|
|
|
Accrued expenses
|
|
10,320
|
|
|
16,039
|
|
|
Deferred revenue
|
|
2,036
|
|
|
1,910
|
|
|
Other current liabilities
|
|
493
|
|
|
24
|
|
|
Total current liabilities
|
|
19,888
|
|
|
23,229
|
|
|
DEFERRED REVENUE
|
|
2,245
|
|
|
2,403
|
|
|
RETIREMENT PLAN BENEFIT LIABILITY
|
|
10,257
|
|
|
9,436
|
|
|
Total liabilities
|
|
32,390
|
|
|
35,068
|
|
|
|
|
|
|
|
|
|
|
SHAREHOLDERS' EQUITY:
|
|
|
|
|
|
|
|
Preferred Stock, par value $0.01 per share, 5,000,000 shares
authorized, 200,000 shares of Series A Nonconvertible Preferred
Stock issued and outstanding (liquidation value of $7.50 per share
or $1,500)
|
|
2
|
|
|
2
|
|
|
Common Stock, par value $0.01 per share, 100,000,000 shares
authorized, 46,944,116 and 46,825,168 shares issued and outstanding
at September 30, 2014 and December 31, 2013, respectively
|
|
469
|
|
|
468
|
|
|
Additional paid-in capital
|
|
577,971
|
|
|
572,401
|
|
|
Accumulated deficit
|
|
(101,431
|
)
|
|
(130,159
|
)
|
|
Accumulated other comprehensive loss
|
|
(4,073
|
)
|
|
(4,368
|
)
|
|
Treasury stock, at cost (1,115,829 and 401,501 shares at September
30, 2014 and December 31, 2013, respectively)
|
|
(33,158
|
)
|
|
(10,658
|
)
|
|
Total shareholders' equity
|
|
439,780
|
|
|
427,686
|
|
|
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY
|
|
$
|
472,170
|
|
|
$
|
462,754
|
|
|
|
|
|
|
|
|
UNIVERSAL DISPLAY CORPORATION AND SUBSIDIARIES
|
|
CONSOLIDATED STATEMENTS OF INCOME
|
|
(UNAUDITED)
|
|
|
|
(in thousands, except share and per share data)
|
|
|
|
|
|
|
|
|
|
Three Months Ended
September 30,
|
|
Nine Months Ended
September 30,
|
|
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
|
REVENUE:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Material sales
|
|
$
|
27,494
|
|
|
$
|
30,286
|
|
|
$
|
98,746
|
|
|
$
|
70,175
|
|
|
Royalty and license fees
|
|
5,357
|
|
|
1,456
|
|
|
35,200
|
|
|
23,956
|
|
|
Technology development and support revenue
|
|
41
|
|
|
1,084
|
|
|
911
|
|
|
3,030
|
|
|
Total revenue
|
|
32,892
|
|
|
32,826
|
|
|
134,857
|
|
|
97,161
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OPERATING EXPENSES:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of material sales
|
|
7,388
|
|
|
9,783
|
|
|
29,236
|
|
|
21,157
|
|
|
Research and development
|
|
7,915
|
|
|
7,862
|
|
|
28,639
|
|
|
24,116
|
|
|
Selling, general and administrative
|
|
6,625
|
|
|
6,411
|
|
|
19,576
|
|
|
17,918
|
|
|
Patent costs and amortization of acquired technology
|
|
4,081
|
|
|
3,899
|
|
|
12,801
|
|
|
13,038
|
|
|
Royalty and license expense
|
|
803
|
|
|
624
|
|
|
3,060
|
|
|
2,108
|
|
|
Total operating expenses
|
|
26,812
|
|
|
28,579
|
|
|
93,312
|
|
|
78,337
|
|
|
Operating income
|
|
6,080
|
|
|
4,247
|
|
|
41,545
|
|
|
18,824
|
|
|
INTEREST INCOME
|
|
187
|
|
|
206
|
|
|
598
|
|
|
594
|
|
|
INTEREST EXPENSE
|
|
(17
|
)
|
|
(13
|
)
|
|
(55
|
)
|
|
(31
|
)
|
|
INCOME BEFORE INCOME TAXES
|
|
6,250
|
|
|
4,440
|
|
|
42,088
|
|
|
19,387
|
|
|
INCOME TAX (EXPENSE) BENEFIT
|
|
(1,966
|
)
|
|
1,102
|
|
|
(13,360
|
)
|
|
(3,221
|
)
|
|
NET INCOME
|
|
$
|
4,284
|
|
|
$
|
5,542
|
|
|
$
|
28,728
|
|
|
$
|
16,166
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET INCOME PER COMMON SHARE:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BASIC
|
|
$
|
0.09
|
|
|
$
|
0.12
|
|
|
$
|
0.62
|
|
|
$
|
0.35
|
|
|
DILUTED
|
|
$
|
0.09
|
|
|
$
|
0.12
|
|
|
$
|
0.61
|
|
|
$
|
0.35
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
WEIGHTED AVERAGE SHARES USED IN COMPUTING NET INCOME PER COMMON
SHARE:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BASIC
|
|
46,197,713
|
|
|
45,912,512
|
|
|
46,398,644
|
|
|
45,865,395
|
|
|
DILUTED
|
|
46,633,763
|
|
|
46,594,843
|
|
|
46,956,428
|
|
|
46,547,568
|
|
|
|
|
|
|
UNIVERSAL DISPLAY CORPORATION AND SUBSIDIARIES
|
|
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
|
(UNAUDITED)
|
|
|
|
(in thousands)
|
|
|
|
|
|
|
|
Nine Months Ended
September 30,
|
|
|
|
2014
|
|
2013
|
|
CASH FLOWS FROM OPERATING ACTIVITIES:
|
|
|
|
|
|
|
|
Net income
|
|
$
|
28,728
|
|
|
$
|
16,166
|
|
|
Adjustments to reconcile net income to net cash provided by
operating activities:
|
|
|
|
|
|
|
|
Amortization of deferred revenue
|
|
(3,825
|
)
|
|
(3,282
|
)
|
|
Depreciation
|
|
1,499
|
|
|
1,493
|
|
|
Amortization of intangibles
|
|
8,248
|
|
|
8,224
|
|
|
Amortization of premium and discount on investments, net
|
|
(405
|
)
|
|
(336
|
)
|
|
Stock-based compensation to employees
|
|
5,333
|
|
|
4,514
|
|
|
Stock-based compensation to Board of Directors and Scientific
Advisory Board
|
|
729
|
|
|
597
|
|
|
Deferred income tax benefit
|
|
8,737
|
|
|
—
|
|
|
Retirement plan benefit expense
|
|
1,257
|
|
|
1,250
|
|
|
(Increase) decrease in assets:
|
|
|
|
|
|
|
|
Accounts receivable
|
|
(6,450
|
)
|
|
(9,128
|
)
|
|
Inventory
|
|
(19,239
|
)
|
|
3,166
|
|
|
Other current assets
|
|
(6,712
|
)
|
|
(2,458
|
)
|
|
Other assets
|
|
(266
|
)
|
|
(5
|
)
|
|
Increase (decrease) in liabilities:
|
|
|
|
|
|
|
|
Accounts payable and accrued expenses
|
|
(3,119
|
)
|
|
265
|
|
|
Other current liabilities
|
|
469
|
|
|
(21
|
)
|
|
Deferred revenue
|
|
3,793
|
|
|
2,131
|
|
|
Net cash provided by operating activities
|
|
18,777
|
|
|
22,576
|
|
|
CASH FLOWS FROM INVESTING ACTIVITIES:
|
|
|
|
|
|
|
|
Purchases of property and equipment
|
|
(4,214
|
)
|
|
(4,200
|
)
|
|
Additions to intangibles
|
|
—
|
|
|
(367
|
)
|
|
Purchases of investments
|
|
(301,924
|
)
|
|
(284,581
|
)
|
|
Proceeds from sale of investments
|
|
278,226
|
|
|
255,022
|
|
|
Net cash used in investing activities
|
|
(27,912
|
)
|
|
(34,126
|
)
|
|
CASH FLOWS FROM FINANCING ACTIVITIES:
|
|
|
|
|
|
|
|
Proceeds from issuance of common stock under ESPP
|
|
279
|
|
|
268
|
|
|
Repurchase of common stock
|
|
(22,500
|
)
|
|
(5,456
|
)
|
|
Proceeds from the exercise of common stock options
|
|
1,001
|
|
|
890
|
|
|
Payment of withholding taxes related to stock-based compensation to
employees
|
|
(2,840
|
)
|
|
(2,990
|
)
|
|
Net cash used in financing activities
|
|
(24,060
|
)
|
|
(7,288
|
)
|
|
DECREASE IN CASH AND CASH EQUIVALENTS
|
|
(33,195
|
)
|
|
(18,838
|
)
|
|
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD
|
|
70,586
|
|
|
85,923
|
|
|
CASH AND CASH EQUIVALENTS, END OF PERIOD
|
|
$
|
37,391
|
|
|
$
|
67,085
|
|
|
The following non-cash activities occurred:
|
|
|
|
|
|
|
|
Unrealized loss (gain) on available-for-sale securities
|
|
$
|
30
|
|
|
$
|
(19
|
)
|
|
Common stock issued to Board of Directors and Scientific Advisory
Board that was earned and accrued for in a previous period
|
|
323
|
|
|
300
|
|
|
Common stock issued to employees that was earned and accrued for in
a previous period
|
|
746
|
|
|
282
|
|
|
Net change in accounts payable and accrued expenses related to
purchases of property and equipment
|
|
(252
|
)
|
|
184
|
|
Investor Relations:
Universal Display
Darice Liu
,
609-671-0980 x558
investor@udcoled.com
or
Media
Contact:
Gregory FCA
Matt McLoughlin
, 610-228-2123
media@udcoled.com
Source: Universal Display Corporation
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