Board Announces Quarterly Dividend of $0.03 per Common Share
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
fourth quarter and year ended December 31, 2016.
For the full year 2016, the Company reported revenue of $198.9 million,
up from $191.0 million for 2015, primarily driven by higher royalty and
license fees and contract research services revenue from our recently
completed acquisition, partially offset by lower revenue from commercial
material sales. The Company posted operating income of $68.4 million for
the year and net income of $48.1 million. These results compare to
operating income of $32.3 million and net income of $14.7 million for
2015. The 2015 net income figure includes a $33.0 million write-down of
inventory in the second quarter, primarily of an existing host material
and associated work-in-process, resulting from a customer’s
faster-than-expected reduction in demand for this material. Excluding
this item and its associated $2.8 million reduction in income tax
expense, non-GAAP net income for 2015 was $44.8 million or $0.94 per
diluted share (see “reconciliation of non-GAAP measures” for further
discussion of the non-GAAP measures).
“We are pleased to report that 2016 finished on a strong note,” said
Sidney D. Rosenblatt, Executive Vice President and Chief Financial
Officer of Universal Display. “In the fourth quarter, total emitter
sales increased 25% sequentially, the adoption of next-generation
emitters commenced, and with the robust activity for new UniversalPHOLED
materials in the pipeline, we embarked on our next expansion phase with
PPG Industries to double our phosphorescent emitter production capacity.”
Rosenblatt continued, “Looking forward, we see extremely positive
momentum in our business and believe that we are well positioned to
capture the tremendous opportunities in front of us. With our bustling
customer pipeline, we have broadened and further increased the depth of
our R&D team to respond to the exciting challenges and opportunities in
the marketplace for today and tomorrow. We have the innovation,
commitment to operational excellence, agility and flexibility to drive
the invention and development of the best OLED technologies and
phosphorescent materials for our customers and partners worldwide.”
Financial Highlights for the Fourth Quarter of
2016
Total revenue was $74.6 million, up 20% from the fourth quarter of 2015,
driven by material sales of $29.2 million, up 5% and royalty and license
fees of $43.6 million, up 27%, on a year-to-year basis. Contract
research services revenue generated from the wholly-owned subsidiary
Adesis, Inc. was $1.8 million. The Company recognized $37.5 million in
SDC licensing revenue, up from $30 million in the same quarter of 2015.
The Company reported operating income of $34.8 million for the fourth
quarter of 2016, up 31% compared to $26.6 million for the fourth quarter
of 2015. Cost of sales was $9.1 million, up from $8.1 million, and
operating expenses were $30.7 million, up from $27.6 million.
Net income for the fourth quarter of 2016 was $25.8 million, or $0.55
per diluted share, compared to $18.1 million, or $0.39 per diluted
share, for the fourth quarter of 2015.
Financial Highlights for the Full Year 2016
Revenue for the full year 2016 was $198.9 million, up 4% from $191.0
million for the prior year. Material sales were $99.3 million, down 12%
from $113.1 million for the prior year, primarily due to a decline in
host sales of $11.1 million. Royalty and license fees were $96.1
million, up $18.3 million from $77.8 million for the prior year,
reflecting the $15.0 million increase SDC license revenue. Contract
research services revenue was $3.5 million, compared to $0.2 million for
the prior year due to customer sales from the recently acquired Adesis
subsidiary.
The Company reported operating income of $68.4 million for the full year
2016, compared to $32.3 million for the prior year. Operating income in
the prior year reflected a $33.0 million write-down of inventory,
primarily of an existing host material and associated work-in-process.
Excluding this item, adjusted operating income for the full year 2015
was $65.3 million (see "reconciliation of non-GAAP Measures" below for
further discussion of the non-GAAP measures included in this release).
For the full year 2016, the Company reported net income of $48.1
million, or $1.02 per diluted share. Net income in the full year 2016
included an increase in amortization expense of $5.5 million associated
with the purchase of the BASF OLED IP assets and the acquisition of
Adesis, or a reduction of $0.08 per diluted share. These results compare
to net income of $14.7 million, or $0.31 per diluted share, for the
prior year. Excluding the inventory write-down, and the associated $2.8
million reduction of income tax expense, adjusted net income for the
prior year was $44.8 million, or $0.94 per diluted share.
Operating cash flow for the full year 2016 was $80.3 million, compared
to $113.6 million for the prior year. Operating cash flow for the full
year 2015 included an upfront $42.0 million license and royalty payment.
The Company’s balance sheet remained strong, with cash and cash
equivalents and investments of $343.0 million as of December 31, 2016.
During the year, the Company added $96.0 million in intangible assets in
the form of acquired license rights and know-how with the BASF patent
acquisition, and the Adesis acquisition added $16.8 million in
intangible assets in the form of customer relationships, internally
developed IP and trade names as well as $15.5 million of goodwill.
2017 Guidance
Although the OLED industry is still at an early state where many
variables can have a material impact on its growth, and the Company thus
caveats its financial guidance accordingly, the Company believes that
its revenues will be in the range of $230 million to $250 million for
fiscal 2017.
Dividend
The Company also announced a cash dividend today of $0.03 per share on
the Company’s common stock. The dividend is payable on March 31, 2017,
to all shareholders of record as of the close of business on March 15,
2017.
Conference Call Information
In conjunction with this release, Universal Display will host a
conference call on Thursday, February 23, 2017 at 5:00 p.m. Eastern
Time. The live webcast of the conference call can be accessed under the events
page of the Company's Investor Relations website at ir.oled.com.
Those wishing to participate in the live call should dial 1-888-525-6276
(toll-free) or 1-719-325-2425, and reference conference ID 1207105.
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.
Upcoming Investor Events
On March 15, 2017, Universal Display Corporation will present at the
Goldman Sachs Third Annual Innovation Symposium to be held in New York
City. The event will not be webcasted.
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
4,200 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 solid-state
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 China, Hong
Kong, Ireland, Japan, South Korea, 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, OSRAM, Pioneer Corporation,
Samsung Display Co., Ltd., Sumitomo Chemical Company, Ltd., Tianma
Micro-electronics and Tohoku Pioneer Corporation. To learn more about
Universal Display Corporation, please visit http://www.oled.com.
Universal Display Corporation and the Universal Display Corporation 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 and future declaration of dividends, 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, 2016.
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
|
|
(in thousands, except share and per share data)
|
|
|
|
|
|
|
December 31, 2016
|
|
|
December 31, 2015
|
|
ASSETS
|
|
|
|
|
|
|
|
CURRENT ASSETS:
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
|
$
|
139,365
|
|
|
$
|
97,513
|
|
|
Short-term investments
|
|
|
|
188,644
|
|
|
|
297,981
|
|
|
Accounts receivable
|
|
|
|
24,994
|
|
|
|
24,729
|
|
|
Inventory
|
|
|
|
17,314
|
|
|
|
12,748
|
|
|
Deferred income taxes
|
|
|
|
8,661
|
|
|
|
12,326
|
|
|
Other current assets
|
|
|
|
6,392
|
|
|
|
2,387
|
|
|
Total current assets
|
|
|
|
385,370
|
|
|
|
447,684
|
|
|
PROPERTY AND EQUIPMENT, net of accumulated depreciation of $32,167
and $27,897
|
|
|
|
27,203
|
|
|
|
22,407
|
|
|
ACQUIRED TECHNOLOGY, net of accumulated amortization of $70,714
and $54,837
|
|
|
|
152,127
|
|
|
|
72,015
|
|
|
OTHER INTANGIBLE ASSETS, net of accumulated amortization of $615 and
none
|
|
|
|
16,225
|
|
|
|
—
|
|
|
GOODWILL
|
|
|
|
15,535
|
|
|
|
—
|
|
|
INVESTMENTS
|
|
|
|
14,960
|
|
|
|
2,187
|
|
|
DEFERRED INCOME TAXES
|
|
|
|
15,832
|
|
|
|
14,945
|
|
|
OTHER ASSETS
|
|
|
|
307
|
|
|
|
174
|
|
|
TOTAL ASSETS
|
|
|
$
|
627,559
|
|
|
$
|
559,412
|
|
|
LIABILITIES AND SHAREHOLDERS’ EQUITY
|
|
|
|
|
|
|
|
CURRENT LIABILITIES:
|
|
|
|
|
|
|
|
Accounts payable
|
|
|
$
|
8,112
|
|
|
$
|
6,849
|
|
|
Accrued expenses
|
|
|
|
19,845
|
|
|
|
17,387
|
|
|
Deferred revenue
|
|
|
|
10,282
|
|
|
|
10,107
|
|
|
Other current liabilities
|
|
|
|
1,967
|
|
|
|
167
|
|
|
Total current liabilities
|
|
|
|
40,206
|
|
|
|
34,510
|
|
|
DEFERRED REVENUE
|
|
|
|
31,322
|
|
|
|
35,543
|
|
|
RETIREMENT PLAN BENEFIT LIABILITY
|
|
|
|
27,563
|
|
|
|
22,594
|
|
|
Total liabilities
|
|
|
|
99,091
|
|
|
|
92,647
|
|
|
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, 48,270,990 and 48,132,223 shares issued, and 46,913,127
and 46,774,360 shares outstanding at December 31, 2016 and December
31, 2015, respectively
|
|
|
|
483
|
|
|
|
482
|
|
|
Additional paid-in capital
|
|
|
|
604,364
|
|
|
|
589,885
|
|
|
Accumulated deficit
|
|
|
|
(25,557
|
)
|
|
|
(73,627
|
)
|
|
Accumulated other comprehensive loss
|
|
|
|
(10,666
|
)
|
|
|
(9,819
|
)
|
|
Treasury stock, at cost (1,357,863 shares at December 31, 2016 and
December 31, 2015)
|
|
|
|
(40,158
|
)
|
|
|
(40,158
|
)
|
|
Total shareholders’ equity
|
|
|
|
528,468
|
|
|
|
466,765
|
|
|
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY
|
|
|
$
|
627,559
|
|
|
$
|
559,412
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
UNIVERSAL DISPLAY CORPORATION AND SUBSIDIARIES
|
|
CONSOLIDATED STATEMENTS OF INCOME
|
|
(in thousands, except share and per share data)
|
|
(Unaudited)
|
|
|
|
|
|
|
Three Months Ended December 31,
|
|
|
|
|
2016
|
|
|
2015
|
|
REVENUE:
|
|
|
|
|
|
|
|
Material sales
|
|
|
$
|
29,201
|
|
|
|
$
|
27,796
|
|
|
Royalty and license fees
|
|
|
|
43,563
|
|
|
|
|
34,441
|
|
|
Contract research services
|
|
|
|
1,813
|
|
|
|
|
75
|
|
|
Total revenue
|
|
|
|
74,577
|
|
|
|
|
62,312
|
|
|
COST OF SALES
|
|
|
|
9,094
|
|
|
|
|
8,085
|
|
|
GROSS MARGIN
|
|
|
|
65,483
|
|
|
|
|
54,227
|
|
|
OPERATING EXPENSES:
|
|
|
|
|
|
|
|
Research and development
|
|
|
|
11,182
|
|
|
|
|
12,643
|
|
|
Selling, general and administrative
|
|
|
|
10,148
|
|
|
|
|
8,902
|
|
|
Amortization of acquired technology and other intangible assets
|
|
|
|
5,453
|
|
|
|
|
2,750
|
|
|
Patent costs
|
|
|
|
1,774
|
|
|
|
|
1,505
|
|
|
Royalty and license fees
|
|
|
|
2,167
|
|
|
|
|
1,807
|
|
|
Total operating expenses
|
|
|
|
30,724
|
|
|
|
|
27,607
|
|
|
OPERATING INCOME
|
|
|
|
34,759
|
|
|
|
|
26,620
|
|
|
Interest income, net
|
|
|
|
569
|
|
|
|
|
222
|
|
|
Other (expense) income, net
|
|
|
|
54
|
|
|
|
|
—
|
|
|
Interest and other (expense) income, net
|
|
|
|
623
|
|
|
|
|
222
|
|
|
INCOME BEFORE INCOME TAXES
|
|
|
|
35,382
|
|
|
|
|
26,842
|
|
|
INCOME TAX EXPENSE
|
|
|
|
(9,563
|
)
|
|
|
|
(8,754
|
)
|
|
NET INCOME
|
|
|
$
|
25,819
|
|
|
|
$
|
18,088
|
|
|
|
|
|
|
|
|
|
|
Net income per common share:
|
|
|
|
|
|
|
|
Basic
|
|
|
$
|
0.55
|
|
|
|
$
|
0.39
|
|
|
Diluted
|
|
|
$
|
0.55
|
|
|
|
$
|
0.39
|
|
|
Weighted average shares used in computing net income per common
share:
|
|
|
|
|
|
|
|
Basic
|
|
|
|
46,905,341
|
|
|
|
|
46,675,225
|
|
|
Diluted
|
|
|
|
47,038,323
|
|
|
|
|
46,864,535
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
UNIVERSAL DISPLAY CORPORATION AND SUBSIDIARIES
|
|
CONSOLIDATED STATEMENTS OF INCOME
|
|
(in thousands, except share and per share data)
|
|
|
|
|
|
|
Year Ended December 31,
|
|
|
|
|
2016
|
|
|
2015
|
|
REVENUE:
|
|
|
|
|
|
|
|
Material sales
|
|
|
$
|
99,285
|
|
|
|
$
|
113,066
|
|
|
Royalty and license fees
|
|
|
|
96,132
|
|
|
|
|
77,773
|
|
|
Contract research services
|
|
|
|
3,469
|
|
|
|
|
207
|
|
|
Total revenue
|
|
|
|
198,886
|
|
|
|
|
191,046
|
|
|
COST OF SALES
|
|
|
|
26,288
|
|
|
|
|
62,997
|
|
|
GROSS MARGIN
|
|
|
|
172,598
|
|
|
|
|
128,049
|
|
|
OPERATING EXPENSES:
|
|
|
|
|
|
|
|
Research and development
|
|
|
|
42,744
|
|
|
|
|
44,641
|
|
|
Selling, general and administrative
|
|
|
|
32,876
|
|
|
|
|
29,046
|
|
|
Amortization of acquired technology and other intangible assets
|
|
|
|
16,493
|
|
|
|
|
10,999
|
|
|
Patent costs
|
|
|
|
6,249
|
|
|
|
|
5,717
|
|
|
Royalty and license fees
|
|
|
|
5,823
|
|
|
|
|
5,370
|
|
|
Total operating expenses
|
|
|
|
104,185
|
|
|
|
|
95,773
|
|
|
OPERATING INCOME
|
|
|
|
68,413
|
|
|
|
|
32,276
|
|
|
Interest income, net
|
|
|
|
2,113
|
|
|
|
|
783
|
|
|
Other (expense) income, net
|
|
|
|
(1,928
|
)
|
|
|
|
—
|
|
|
Interest and other (expense) income, net
|
|
|
|
185
|
|
|
|
|
783
|
|
|
INCOME BEFORE INCOME TAXES
|
|
|
|
68,598
|
|
|
|
|
33,059
|
|
|
INCOME TAX EXPENSE
|
|
|
|
(20,528
|
)
|
|
|
|
(18,381
|
)
|
|
NET INCOME
|
|
|
$
|
48,070
|
|
|
|
$
|
14,678
|
|
|
|
|
|
|
|
|
|
|
Net income per common share:
|
|
|
|
|
|
|
|
Basic
|
|
|
$
|
1.02
|
|
|
|
$
|
0.31
|
|
|
Diluted
|
|
|
$
|
1.02
|
|
|
|
$
|
0.31
|
|
|
Weighted average shares used in computing net income per common
share:
|
|
|
|
|
|
|
|
Basic
|
|
|
|
46,408,460
|
|
|
|
|
46,816,394
|
|
|
Diluted
|
|
|
|
46,535,980
|
|
|
|
|
47,494,188
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
UNIVERSAL DISPLAY CORPORATION AND SUBSIDIARIES
|
|
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
|
(in thousands)
|
|
|
|
|
|
|
Year Ended December 31,
|
|
|
|
|
2016
|
|
|
2015
|
|
CASH FLOWS FROM OPERATING ACTIVITIES:
|
|
|
|
|
|
|
|
Net income
|
|
|
$
|
48,070
|
|
|
|
$
|
14,678
|
|
|
Adjustments to reconcile net income to net cash provided by
operating activities:
|
|
|
|
|
|
|
|
Amortization of deferred revenue
|
|
|
|
(7,406
|
)
|
|
|
|
(8,994
|
)
|
|
Depreciation
|
|
|
|
4,270
|
|
|
|
|
3,086
|
|
|
Amortization of intangibles
|
|
|
|
16,492
|
|
|
|
|
10,999
|
|
|
Inventory write-down
|
|
|
|
—
|
|
|
|
|
33,000
|
|
|
Amortization of premium and discount on investments, net
|
|
|
|
(1,830
|
)
|
|
|
|
(697
|
)
|
|
Stock-based compensation to employees
|
|
|
|
11,374
|
|
|
|
|
9,173
|
|
|
Stock-based compensation to Board of Directors and Scientific
Advisory Board
|
|
|
|
1,715
|
|
|
|
|
1,291
|
|
|
Deferred income tax benefit
|
|
|
|
3,094
|
|
|
|
|
7,137
|
|
|
Excess tax benefits from share-based payment arrangements
|
|
|
|
(4,232
|
)
|
|
|
|
—
|
|
|
Retirement plan benefit expense
|
|
|
|
3,965
|
|
|
|
|
3,354
|
|
|
Decrease (increase) in assets, net of effect of acquisition:
|
|
|
|
|
|
|
|
Accounts receivable
|
|
|
|
1,205
|
|
|
|
|
(2,654
|
)
|
|
Inventory
|
|
|
|
(4,460
|
)
|
|
|
|
(8,639
|
)
|
|
Other current assets
|
|
|
|
(3,870
|
)
|
|
|
|
1,969
|
|
|
Other assets
|
|
|
|
(133
|
)
|
|
|
|
251
|
|
|
Increase (decrease) in liabilities, net of effect of acquisition:
|
|
|
|
|
|
|
|
Accounts payable and accrued expenses
|
|
|
|
4,362
|
|
|
|
|
790
|
|
|
Other current liabilities
|
|
|
|
4,362
|
|
|
|
|
56
|
|
|
Deferred revenue
|
|
|
|
3,360
|
|
|
|
|
48,812
|
|
|
Net cash provided by operating activities
|
|
|
|
80,338
|
|
|
|
|
113,612
|
|
|
CASH FLOWS FROM INVESTING ACTIVITIES:
|
|
|
|
|
|
|
|
Purchases of property and equipment
|
|
|
|
(7,300
|
)
|
|
|
|
(5,103
|
)
|
|
Purchase of intangibles
|
|
|
|
(95,989
|
)
|
|
|
|
—
|
|
|
Purchase of business, net of cash acquired
|
|
|
|
(33,380
|
)
|
|
|
|
—
|
|
|
Purchases of investments
|
|
|
|
(450,277
|
)
|
|
|
|
(691,876
|
)
|
|
Proceeds from sale of investments
|
|
|
|
548,474
|
|
|
|
|
638,411
|
|
|
Net cash used in investing activities
|
|
|
|
(38,472
|
)
|
|
|
|
(58,568
|
)
|
|
CASH FLOWS FROM FINANCING ACTIVITIES:
|
|
|
|
|
|
|
|
Proceeds from issuance of common stock
|
|
|
|
439
|
|
|
|
|
354
|
|
|
Repurchase of common stock
|
|
|
|
—
|
|
|
|
|
—
|
|
|
Proceeds from the exercise of common stock options
|
|
|
|
185
|
|
|
|
|
2,034
|
|
|
Payment of withholding taxes on stock-based compensation to employees
|
|
|
|
(4,870
|
)
|
|
|
|
(5,337
|
)
|
|
Excess tax benefits from share-based payment arrangements
|
|
|
|
4,232
|
|
|
|
|
—
|
|
|
Net cash used in financing activities
|
|
|
|
(14
|
)
|
|
|
|
(2,949
|
)
|
|
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
|
|
|
|
41,852
|
|
|
|
|
52,095
|
|
|
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR
|
|
|
|
97,513
|
|
|
|
|
45,418
|
|
|
CASH AND CASH EQUIVALENTS, END OF YEAR
|
|
|
$
|
139,365
|
|
|
|
$
|
97,513
|
|
|
The following non-cash activities occurred:
|
|
|
|
|
|
|
|
Unrealized loss on available-for-sale securities
|
|
|
$
|
(207
|
)
|
|
|
$
|
(129
|
)
|
|
Common stock issued to the Board of Directors and Scientific
Advisory Board earned and accrued in a previous period
|
|
|
|
300
|
|
|
|
|
300
|
|
|
Common stock issued to employees earned and accrued in a previous
period
|
|
|
|
1,105
|
|
|
|
|
967
|
|
|
Net change in accruals for purchases of property and equipment
|
|
|
|
(103
|
)
|
|
|
|
467
|
|
|
Earnout liability recorded for Adesis acquisition
|
|
|
|
1,670
|
|
|
|
|
—
|
|
|
Excess tax benefits accrued in other current liabilities
|
|
|
|
(4,232
|
)
|
|
|
|
—
|
|
|
Cash paid for income tax, net
|
|
|
|
12,870
|
|
|
|
|
10,364
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of non-GAAP measures
|
|
|
|
The following table details our reconciliation of non-GAAP measures
to the most directly comparable GAAP measures:
|
|
|
|
|
|
|
(in thousands, except per share data)
|
|
|
Three Months Ended December 31, 2016
|
|
|
|
|
2016
|
|
|
2015
|
|
Cost of commercial material sales reconciliation
|
|
|
|
|
|
|
|
Cost of commercial material sales
|
|
|
$
|
6,333
|
|
|
|
$
|
8,085
|
|
|
Cost of commercial material sales adjustments:
|
|
|
|
|
|
|
|
Inventory write-down
|
|
|
|
—
|
|
|
|
|
—
|
|
|
Adjusted cost of commercial material sales
|
|
|
$
|
6,333
|
|
|
|
$
|
8,085
|
|
|
Cost of commercial material sales as a % of commercial material
sales
|
|
|
|
28
|
%
|
|
|
|
34
|
%
|
|
Adjusted cost of commercial material sales as a % of commercial
material sales
|
|
|
|
28
|
%
|
|
|
|
34
|
%
|
|
|
|
|
|
|
|
|
|
Operating income reconciliation
|
|
|
|
|
|
|
|
Operating income
|
|
|
$
|
34,759
|
|
|
|
$
|
26,620
|
|
|
Operating income adjustments:
|
|
|
|
|
|
|
|
Inventory write-down
|
|
|
|
—
|
|
|
|
|
—
|
|
|
Adjusted operating income
|
|
|
$
|
34,759
|
|
|
|
$
|
26,620
|
|
|
Operating income as a % of total revenue
|
|
|
|
47
|
%
|
|
|
|
43
|
%
|
|
Adjusted operating income as a % of total revenue
|
|
|
|
47
|
%
|
|
|
|
43
|
%
|
|
|
|
|
|
|
|
|
|
Net income reconciliation
|
|
|
|
|
|
|
|
Net income
|
|
|
$
|
25,819
|
|
|
|
$
|
18,088
|
|
|
Net income per share:
|
|
|
|
|
|
|
|
Basic
|
|
|
$
|
0.55
|
|
|
|
$
|
0.39
|
|
|
Diluted
|
|
|
$
|
0.55
|
|
|
|
$
|
0.39
|
|
|
Net income adjustments:
|
|
|
|
|
|
|
|
Inventory write-down
|
|
|
|
—
|
|
|
|
|
—
|
|
|
Income tax effect of inventory write-down
|
|
|
|
—
|
|
|
|
|
—
|
|
|
Deferred income tax expense
|
|
|
|
—
|
|
|
|
|
—
|
|
|
Release of income tax valuation write-down
|
|
|
|
—
|
|
|
|
|
—
|
|
|
Adjusted net income*
|
|
|
$
|
25,819
|
|
|
|
$
|
18,088
|
|
|
Net income as a % of total revenue
|
|
|
|
35
|
%
|
|
|
|
29
|
%
|
|
Adjusted net income as a % of total revenue
|
|
|
|
35
|
%
|
|
|
|
29
|
%
|
|
Adjusted net income per share:
|
|
|
|
|
|
|
|
Basic **
|
|
|
$
|
0.55
|
|
|
|
$
|
0.39
|
|
|
Diluted ***
|
|
|
$
|
0.55
|
|
|
|
$
|
0.39
|
|
|
Weighted average shares used in computing net income per share and
adjusted net income per share:
|
|
|
|
|
|
|
|
Basic
|
|
|
|
46,905,341
|
|
|
|
|
46,675,225
|
|
|
Diluted
|
|
|
|
47,038,323
|
|
|
|
|
46,864,535
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
_______________
|
|
*
|
|
Adjusted net income per share, basic and diluted is derived from
dividing adjusted net income by the number of weighted average
shares used in computing basic and diluted net income per share.
|
|
|
|
Reconciliation of non-GAAP measures
|
|
|
|
The following table details our reconciliation of non-GAAP measures
to the most directly comparable GAAP measures:
|
|
|
|
|
|
|
|
|
(in thousands, except per share data)
|
|
|
Year Ended December 31, 2016
|
|
|
|
|
2016
|
|
|
2015
|
|
Cost of commercial material sales reconciliation
|
|
|
|
|
|
|
|
Cost of commercial material sales
|
|
|
$
|
18,609
|
|
|
|
$
|
62,997
|
|
|
Cost of commercial material sales adjustments:
|
|
|
|
|
|
|
|
Inventory write-down
|
|
|
|
—
|
|
|
|
|
33,000
|
|
|
Adjusted cost of commercial material sales
|
|
|
$
|
18,609
|
|
|
|
$
|
29,997
|
|
|
Cost of commercial material sales as a % of commercial material
sales
|
|
|
|
22
|
%
|
|
|
|
62
|
%
|
|
Adjusted cost of commercial material sales as a % of commercial
material sales
|
|
|
|
22
|
%
|
|
|
|
30
|
%
|
|
|
|
|
|
|
|
|
|
Operating income reconciliation
|
|
|
|
|
|
|
|
Operating income
|
|
|
$
|
68,413
|
|
|
|
$
|
32,276
|
|
|
Operating income adjustments:
|
|
|
|
|
|
|
|
Inventory write-down
|
|
|
|
—
|
|
|
|
|
33,000
|
|
|
Adjusted operating income
|
|
|
$
|
68,413
|
|
|
|
$
|
65,276
|
|
|
Operating income as a % of total revenue
|
|
|
|
34
|
%
|
|
|
|
17
|
%
|
|
Adjusted operating income as a % of total revenue
|
|
|
|
34
|
%
|
|
|
|
34
|
%
|
|
|
|
|
|
|
|
|
|
Net income reconciliation
|
|
|
|
|
|
|
|
Net income
|
|
|
$
|
48,070
|
|
|
|
$
|
14,678
|
|
|
Net income per share:
|
|
|
|
|
|
|
|
Basic
|
|
|
$
|
1.02
|
|
|
|
$
|
0.31
|
|
|
Diluted
|
|
|
$
|
1.02
|
|
|
|
$
|
0.31
|
|
|
Net income adjustments:
|
|
|
|
|
|
|
|
Inventory write-down
|
|
|
|
—
|
|
|
|
|
33,000
|
|
|
Income tax effect of inventory write-down
|
|
|
|
—
|
|
|
|
|
(2,836
|
)
|
|
Deferred income tax expense
|
|
|
|
—
|
|
|
|
|
—
|
|
|
Release of income tax valuation write-down
|
|
|
|
—
|
|
|
|
|
—
|
|
|
Adjusted net income*
|
|
|
$
|
48,070
|
|
|
|
$
|
44,842
|
|
|
Net income as a % of total revenue
|
|
|
|
24
|
%
|
|
|
|
8
|
%
|
|
Adjusted net income as a % of total revenue
|
|
|
|
24
|
%
|
|
|
|
23
|
%
|
|
Adjusted net income per share:
|
|
|
|
|
|
|
|
Basic **
|
|
|
$
|
1.02
|
|
|
|
$
|
0.96
|
|
|
Diluted
|
|
|
$
|
1.02
|
|
|
|
$
|
0.94
|
|
|
Weighted average shares used in computing net income per share and
adjusted net income per share:
|
|
|
|
|
|
|
|
Basic
|
|
|
|
46,408,460
|
|
|
|
|
46,816,394
|
|
|
Diluted
|
|
|
|
46,535,980
|
|
|
|
|
47,494,188
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
_______________
|
|
*
|
|
Adjusted net income assumes an effective tax rate of 32% for the
year ended December 31, 2015, based on excluding the impact of the
inventory write down.
|
|
**
|
|
Adjusted net income per common share, basic, is derived from
dividing adjusted net income by the number of weighted average
shares used in computing basic net income per common share.
|
|
|
|
|
Non-GAAP Measures
To supplement Universal Display Corporation’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 adjusted operating income, adjusted cost of
material sales, adjusted net income, adjusted net income per common
share, basic and adjusted net income per common share, diluted.
Each of these non-GAAP measures excludes the effect of the write-down of
primarily existing host materials that were not included in its
customer’s new products as well as excluding the effect of the release
of income tax valuation allowances. Universal Display has provided these
non-GAAP measures, which the Company believes more accurately reflect
the operating performance of its ongoing business, to enhance investors’
overall understanding of its current financial performance and
period-to-period comparisons. 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/20170223006566/en/
Source: Universal Display Corporation