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, 2015.
For the third quarter of 2015, the Company reported net income of $7.0
million, or $0.15 per diluted share, on revenues of $39.4 million,
compared to net income of $4.3 million, or $0.09 per diluted share, on
revenues of $32.9 million for the third quarter of 2014.
“We are pleased to report strong revenues, operating income and earnings
in the third quarter as demand increased from customers, due to higher
fab utilization rates and new capacity coming online,” said Sidney D.
Rosenblatt, Executive Vice President and Chief Financial Officer of
Universal Display. “Overall, we are encouraged by the robust global OLED
pipeline, from leading panel manufacturers investing in additional OLED
capacity to deliver bright, thin, beautiful, high resolution displays to
consumers on a broader scale to OEMs around the world designing OLED
panels into their new consumer electronic products. As OLED innovation
progresses with new form factors such as flexible, transparent and
rollable, and the commercialization of OLED technology continues in the
marketplace with a deepening product roadmap, it is an exciting time to
be part of this expansive growth journey called the ‘OLED Revolution.’”
Financial Highlights for the Third Quarter of
2015
Revenues for the third quarter of 2015 were $39.4 million, compared to
revenues of $32.9 million for the same quarter of 2014. Material sales
were $34.1 million, up 24% compared to the third quarter of 2014,
primarily due to an $11.3 million increase in emitter material sales,
partially offset by a $4.6 million decline in host material sales.
Royalty and license fees were $5.2 million, compared to $5.4 million in
the third quarter of 2014.
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
2015, the Company expects to recognize $60 million in SDC licensing
revenue for the full year.
The Company reported operating income of $8.4 million in the third
quarter of 2015, up 38% compared to operating income of $6.1 million for
the third quarter of 2014. Operating expenses were $31.1 million,
compared to $26.8 million in the third quarter of 2014, and cost of
materials was $7.2 million, essentially flat as compared to $7.4 million
in the third quarter of 2014. The increase in operating expenses was
mainly due to an increase in research and development expense in the
third quarter of 2015 as compared to the third quarter of 2014.
The Company’s balance sheet remained strong, with cash and cash
equivalents and short-term investments of $361.5 million as of
September 30, 2015.
Financial Highlights for the First Nine Months
of 2015
Revenues for the first nine months of 2015 were $128.7 million, compared
to $134.9 million for the first nine months of 2014. Material sales were
$85.3 million, down 14% from $98.7 million compared to the first nine
months of 2014, primarily due to a $23.7 million decline in host
material sales, partially offset by a $10.2 million increase in emitter
material sales. Royalty and license fees were $43.3 million, up 23% from
$35.2 million in the first nine months of 2014.
The Company reported operating income of $5.7 million in the first nine
months of 2015, compared to $41.5 million for the first nine months of
2014. The 2015 figures include a $33.0 million write-down of inventory
taken in the second quarter. Excluding the write-down, non-GAAP
operating income was $38.7 million. For the first nine months of 2015,
the Company reported a net loss of $3.4 million, or $0.07 per diluted
share, compared to net income of $28.7 million, or $0.61 per diluted
share, for the same period of 2014. Non-GAAP net income was $26.6
million, or $0.57 per diluted share for the first nine months of 2015.
Operating cash flow for the first nine months of 2015 was $80.6 million,
an increase of 329% compared to $18.8 million for the first nine months
of 2014.
2015 Guidance
With the OLED industry still at a stage where many variables can have a
material impact on its growth, Universal Display continues to expect its
2015 revenues to be approximately $200 million, and is narrowing the
upside and downside potential range to +/-3%.
Conference Call Information
In conjunction with this release, Universal Display will host a
conference call on Thursday, November 5, 2015 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 1-877-545-1403 (toll-free) or 1-719-325-4807, and
reference conference ID 7802448. Please dial in 5-10 minutes prior to
the scheduled conference call time. An online archive of the webcast
will be available within two hours of the conclusion of the call.
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
3,500 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., OLEDWorks LLC, Pioneer Corporation, Samsung
Display Co., Ltd., Sumitomo Chemical Company, Ltd, 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, 2014.
Universal Display Corporation disclaims any obligation to update any
forward-looking statement contained in this document.
Follow Universal Display Corporation
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(OLED-C)
|
|
|
|
|
|
|
UNIVERSAL DISPLAY CORPORATION AND SUBSIDIARIES
|
|
CONSOLIDATED BALANCE SHEETS
|
|
(UNAUDITED)
|
|
|
|
(in thousands, except share and per share data)
|
|
|
|
|
|
|
|
|
|
September 30, 2015
|
|
December 31, 2014
|
|
ASSETS
|
|
CURRENT ASSETS:
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
89,956
|
|
|
$
|
45,418
|
|
|
Short-term investments
|
|
271,593
|
|
|
243,088
|
|
|
Accounts receivable
|
|
28,350
|
|
|
22,075
|
|
|
Inventory
|
|
13,688
|
|
|
37,109
|
|
|
Deferred income taxes
|
|
15,785
|
|
|
18,459
|
|
|
Other current assets
|
|
4,523
|
|
|
4,356
|
|
|
Total current assets
|
|
423,895
|
|
|
370,505
|
|
|
PROPERTY AND EQUIPMENT, net of accumulated depreciation of $27,036
and $24,813
|
|
21,490
|
|
|
19,922
|
|
|
ACQUIRED TECHNOLOGY, net of accumulated amortization of $52,087 and
$43,838
|
|
74,765
|
|
|
83,014
|
|
|
INVESTMENTS
|
|
3,024
|
|
|
3,047
|
|
|
DEFERRED INCOME TAXES
|
|
10,917
|
|
|
12,934
|
|
|
OTHER ASSETS
|
|
232
|
|
|
425
|
|
|
TOTAL ASSETS
|
|
$
|
534,323
|
|
|
$
|
489,847
|
|
|
LIABILITIES AND SHAREHOLDERS’ EQUITY
|
|
CURRENT LIABILITIES:
|
|
|
|
|
|
Accounts payable
|
|
$
|
10,334
|
|
|
$
|
9,260
|
|
|
Accrued expenses
|
|
12,979
|
|
|
14,986
|
|
|
Deferred revenue
|
|
20,830
|
|
|
2,466
|
|
|
Other current liabilities
|
|
104
|
|
|
111
|
|
|
Total current liabilities
|
|
44,247
|
|
|
26,823
|
|
|
DEFERRED REVENUE
|
|
26,382
|
|
|
3,366
|
|
|
RETIREMENT PLAN BENEFIT LIABILITY
|
|
12,235
|
|
|
10,916
|
|
|
Total liabilities
|
|
82,864
|
|
|
41,105
|
|
|
|
|
|
|
|
|
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, 47,494,938 and 47,061,826 shares issued and outstanding
at September 30, 2015 and December 31, 2014, respectively
|
|
475
|
|
|
471
|
|
|
Additional paid-in capital
|
|
586,533
|
|
|
581,114
|
|
|
Accumulated deficit
|
|
(91,715
|
)
|
|
(88,305
|
)
|
|
Accumulated other comprehensive loss
|
|
(3,678
|
)
|
|
(4,382
|
)
|
|
Treasury stock, at cost (1,357,863 shares at September 30, 2015 and
December 31, 2014)
|
|
(40,158
|
)
|
|
(40,158
|
)
|
|
Total shareholders’ equity
|
|
451,459
|
|
|
448,742
|
|
|
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY
|
|
$
|
534,323
|
|
|
$
|
489,847
|
|
|
|
|
|
|
|
|
UNIVERSAL DISPLAY CORPORATION AND SUBSIDIARIES
|
|
CONSOLIDATED STATEMENTS OF OPERATIONS
|
|
(UNAUDITED)
|
|
|
|
(in thousands, except share and per share data)
|
|
|
|
|
|
|
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
|
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
|
REVENUE:
|
|
|
|
|
|
|
|
|
|
Material sales
|
|
$
|
34,128
|
|
|
$
|
27,494
|
|
|
$
|
85,270
|
|
|
$
|
98,746
|
|
|
Royalty and license fees
|
|
5,224
|
|
|
5,357
|
|
|
43,332
|
|
|
35,200
|
|
|
Technology development and support revenue
|
|
67
|
|
|
41
|
|
|
132
|
|
|
911
|
|
|
Total revenue
|
|
39,419
|
|
|
32,892
|
|
|
128,734
|
|
|
134,857
|
|
|
|
|
|
|
|
|
|
|
|
|
OPERATING EXPENSES:
|
|
|
|
|
|
|
|
|
|
Cost of material sales
|
|
7,246
|
|
|
7,388
|
|
|
54,913
|
|
|
29,236
|
|
|
Research and development
|
|
11,434
|
|
|
7,915
|
|
|
32,000
|
|
|
28,639
|
|
|
Selling, general and administrative
|
|
7,240
|
|
|
6,625
|
|
|
20,145
|
|
|
19,576
|
|
|
Patent costs and amortization of acquired technology
|
|
4,032
|
|
|
4,081
|
|
|
12,461
|
|
|
12,801
|
|
|
Royalty and license expense
|
|
1,105
|
|
|
803
|
|
|
3,563
|
|
|
3,060
|
|
|
Total operating expenses
|
|
31,057
|
|
|
26,812
|
|
|
123,082
|
|
|
93,312
|
|
|
Operating income
|
|
8,362
|
|
|
6,080
|
|
|
5,652
|
|
|
41,545
|
|
|
INTEREST INCOME
|
|
232
|
|
|
187
|
|
|
593
|
|
|
598
|
|
|
INTEREST EXPENSE
|
|
(7
|
)
|
|
(17
|
)
|
|
(31
|
)
|
|
(55
|
)
|
|
INCOME BEFORE INCOME TAXES
|
|
8,587
|
|
|
6,250
|
|
|
6,214
|
|
|
42,088
|
|
|
INCOME TAX EXPENSE
|
|
(1,540
|
)
|
|
(1,966
|
)
|
|
(9,624
|
)
|
|
(13,360
|
)
|
|
NET INCOME (LOSS)
|
|
$
|
7,047
|
|
|
$
|
4,284
|
|
|
$
|
(3,410
|
)
|
|
$
|
28,728
|
|
|
|
|
|
|
|
|
|
|
|
|
NET INCOME (LOSS) PER COMMON SHARE:
|
|
|
|
|
|
|
|
|
|
BASIC
|
|
$
|
0.15
|
|
|
$
|
0.09
|
|
|
$
|
(0.07
|
)
|
|
$
|
0.62
|
|
|
DILUTED
|
|
$
|
0.15
|
|
|
$
|
0.09
|
|
|
$
|
(0.07
|
)
|
|
$
|
0.61
|
|
|
|
|
|
|
|
|
|
|
|
|
WEIGHTED AVERAGE SHARES USED IN COMPUTING NET INCOME (LOSS) PER
COMMON SHARE:
|
|
|
|
|
|
|
|
|
|
BASIC
|
|
46,542,556
|
|
|
46,197,713
|
|
|
46,241,578
|
|
|
46,398,644
|
|
|
DILUTED
|
|
46,723,373
|
|
|
46,633,763
|
|
|
46,241,578
|
|
|
46,956,428
|
|
|
|
|
|
|
UNIVERSAL DISPLAY CORPORATION AND SUBSIDIARIES
|
|
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
|
(UNAUDITED)
|
|
|
|
(in thousands)
|
|
|
|
|
|
|
|
Nine Months Ended September 30,
|
|
|
|
2015
|
|
2014
|
|
CASH FLOWS FROM OPERATING ACTIVITIES:
|
|
|
|
|
|
Net (loss) income
|
|
$
|
(3,410
|
)
|
|
$
|
28,728
|
|
|
Adjustments to reconcile net (loss) income to net cash provided by
operating activities:
|
|
|
|
|
|
Amortization of deferred revenue
|
|
(7,031
|
)
|
|
(3,825
|
)
|
|
Depreciation
|
|
2,223
|
|
|
1,499
|
|
|
Amortization of intangibles
|
|
8,249
|
|
|
8,248
|
|
|
Inventory write-down
|
|
33,000
|
|
|
—
|
|
|
Amortization of premium and discount on investments, net
|
|
(479
|
)
|
|
(405
|
)
|
|
Stock-based compensation to employees
|
|
6,759
|
|
|
5,333
|
|
|
Stock-based compensation to Board of Directors and Scientific
Advisory Board
|
|
818
|
|
|
729
|
|
|
Deferred income tax benefit
|
|
4,291
|
|
|
8,737
|
|
|
Retirement plan benefit expense
|
|
2,433
|
|
|
1,257
|
|
|
(Increase) decrease in assets:
|
|
|
|
|
|
Accounts receivable
|
|
(6,275
|
)
|
|
(6,450
|
)
|
|
Inventory
|
|
(9,579
|
)
|
|
(19,239
|
)
|
|
Other current assets
|
|
(167
|
)
|
|
(6,712
|
)
|
|
Other assets
|
|
193
|
|
|
(266
|
)
|
|
Increase (decrease) in liabilities:
|
|
|
|
|
|
Accounts payable and accrued expenses
|
|
1,192
|
|
|
(3,119
|
)
|
|
Other current liabilities
|
|
(7
|
)
|
|
469
|
|
|
Deferred revenue
|
|
48,411
|
|
|
3,793
|
|
|
Net cash provided by operating activities
|
|
80,621
|
|
|
18,777
|
|
|
CASH FLOWS FROM INVESTING ACTIVITIES:
|
|
|
|
|
|
Purchases of property and equipment
|
|
(4,650
|
)
|
|
(4,214
|
)
|
|
Purchases of investments
|
|
(453,672
|
)
|
|
(301,924
|
)
|
|
Proceeds from sale of investments
|
|
425,660
|
|
|
278,226
|
|
|
Net cash used in investing activities
|
|
(32,662
|
)
|
|
(27,912
|
)
|
|
CASH FLOWS FROM FINANCING ACTIVITIES:
|
|
|
|
|
|
Proceeds from issuance of common stock under ESPP
|
|
263
|
|
|
279
|
|
|
Repurchase of common stock
|
|
—
|
|
|
(22,500
|
)
|
|
Proceeds from the exercise of common stock options
|
|
1,629
|
|
|
1,001
|
|
|
Payment of withholding taxes related to stock-based compensation to
employees
|
|
(5,313
|
)
|
|
(2,840
|
)
|
|
Net cash used in financing activities
|
|
(3,421
|
)
|
|
(24,060
|
)
|
|
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
|
|
44,538
|
|
|
(33,195
|
)
|
|
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD
|
|
45,418
|
|
|
70,586
|
|
|
CASH AND CASH EQUIVALENTS, END OF PERIOD
|
|
$
|
89,956
|
|
|
$
|
37,391
|
|
|
The following non-cash activities occurred:
|
|
|
|
|
|
Unrealized loss on available-for-sale securities
|
|
$
|
9
|
|
|
$
|
30
|
|
|
Common stock issued to Board of Directors and Scientific Advisory
Board that was earned and accrued for in a previous period
|
|
300
|
|
|
323
|
|
|
Common stock issued to employees that was earned and accrued for in
a previous period
|
|
967
|
|
|
746
|
|
|
Net change in accounts payable and accrued expenses related to
purchases of property and equipment
|
|
(858
|
)
|
|
(252
|
)
|
|
|
|
|
|
|
|
Reconciliation of Non-GAAP Measures
|
|
|
|
The following table details our reconciliation of non-GAAP
measures to the most directly comparable GAAP measures:
|
|
|
|
|
|
|
|
(unaudited, in thousands, except share and per share data)
|
|
Three Months Ended
September 30,
|
|
Nine Months Ended
September 30,
|
|
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
|
GAAP Results:
|
|
|
|
|
|
|
|
|
|
Cost of material sales
|
|
$
|
7,246
|
|
|
$
|
7,388
|
|
|
$
|
54,913
|
|
|
$
|
29,236
|
|
Operating expenses
|
|
31,057
|
|
|
26,812
|
|
|
123,082
|
|
|
93,312
|
|
Operating income
|
|
8,362
|
|
|
6,080
|
|
|
5,652
|
|
|
41,545
|
|
Income before income taxes
|
|
8,587
|
|
|
6,250
|
|
|
6,214
|
|
|
42,088
|
|
Net income (loss)
|
|
7,047
|
|
|
4,284
|
|
|
(3,410
|
)
|
|
28,728
|
|
Net income (loss) per common share, basic
|
|
$
|
0.15
|
|
|
$
|
0.09
|
|
|
$
|
(0.07
|
)
|
|
$
|
0.62
|
|
Net income (loss) per common share, diluted
|
|
$
|
0.15
|
|
|
$
|
0.09
|
|
|
$
|
(0.07
|
)
|
|
$
|
0.61
|
|
Non-GAAP Reconciling Items:
|
|
|
|
|
|
|
|
|
|
Inventory write-down
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
33,000
|
|
|
$
|
—
|
|
Tax impact of inventory write-down
|
|
(1,104
|
)
|
|
—
|
|
|
(2,964
|
)
|
|
—
|
|
Non-GAAP Measures
|
|
|
|
|
|
|
|
|
|
Cost of material sales
|
|
$
|
7,246
|
|
|
$
|
7,388
|
|
|
$
|
21,913
|
|
|
$
|
29,236
|
|
Operating expenses
|
|
31,057
|
|
|
26,812
|
|
|
90,082
|
|
|
93,312
|
|
Operating income
|
|
8,362
|
|
|
6,080
|
|
|
38,652
|
|
|
41,545
|
|
Income before income taxes
|
|
8,587
|
|
|
6,250
|
|
|
39,214
|
|
|
42,088
|
|
Net income*
|
|
5,943
|
|
|
4,284
|
|
|
26,626
|
|
|
28,728
|
|
Net income per common share, basic**
|
|
$
|
0.13
|
|
|
$
|
0.09
|
|
|
$
|
0.58
|
|
|
$
|
0.62
|
|
Net income per common share, diluted***
|
|
$
|
0.13
|
|
|
$
|
0.09
|
|
|
$
|
0.57
|
|
|
$
|
0.61
|
|
|
|
|
|
*
|
|
Non-GAAP net income assumes an effective tax rate of 30.8% and 32.1%
for the three and nine months ended September 30, 2015 based on
excluding the impact of the inventory write down of $33.0 million in
the second quarter of 2015 and its related impact on our
quarter-to-date and year-to-date effective taxes rates.
|
|
**
|
|
The non-GAAP net income per common share, basic is derived from
dividing non-GAAP net income by the number of weighted average
shares used in computing basic net income per common share.
|
|
***
|
|
The non-GAAP net income per common share, diluted is derived from
dividing non-GAAP net income by non-GAAP weighted average shares of
46,870,998 for the nine months ended September 30, 2015.
|
|
|
|
|
Non-GAAP Measures
To supplement the Company's selected financial data presented in
accordance with U.S. generally accepted accounting principles (GAAP),
the Company uses certain non-GAAP measures. These non-GAAP measures
include non-GAAP net income, non-GAAP net income per common share, basic
and non-GAAP net income per common share, diluted, as well as non-GAAP
cost of material sales, non-GAAP operating expenses, non-GAAP operating
income and non-GAAP income before income taxes. Reconciliation to the
nearest GAAP measures of all non-GAAP measures included in the
presentation can be found within the tables detailing the reconciliation
of non-GAAP measures to GAAP measures above.
The Company has provided these non-GAAP measures to enhance investors'
overall understanding of the Company's current financial performance,
and as a means to evaluate period-to-period comparisons. The Company
believes that these non-GAAP measures provide meaningful supplemental
information regarding the Company's financial performance by excluding
the effect of the write-down of primarily existing host materials that
were not included in a customer's new products. The Company believes
that the non-GAAP measures that exclude the impact of the inventory
write down, when viewed with GAAP results, enhance the comparability of
results against prior periods and allow for greater transparency of
financial results. The presentation of non-GAAP measures is not intended
to be considered in isolation or as a substitute for, or superior to,
the financial information prepared and presented in accordance with GAAP.
View source version on businesswire.com: http://www.businesswire.com/news/home/20151105006781/en/
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