Universal Display Corporation Announces First Quarter 2022 Financial Results

May 5, 2022

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 first quarter ended March 31, 2022.

“We are pleased to report solid first quarter 2022 results,” said Sidney D. Rosenblatt, Executive Vice President and Chief Financial Officer of Universal Display Corporation. “As we look out, we believe that consumer electronic OEMs, panel makers and the ecosystem are setting the stage for a significant new wave of OLED capital investments and OLED market proliferation. Amid this growing OLED market momentum, we continue to make excellent progress in our ongoing development work for a commercial phosphorescent blue emissive system. We reaffirm our belief that we are on track to meet preliminary target specs with our phosphorescent blue by year-end, which should enable the introduction of our all-phosphorescent RGB stack into the commercial market in 2024.”

Rosenblatt continued, “We believe that the trajectories of the OLED market and of the Company continue to be very bright. With more than two-and-a-half decades of experience and know-how, we are broadening our core competencies, bolstering our worldwide footprint and expanding our global team to fuel our strategic initiatives and increase our first-mover competitive edge. As a key OLED innovations partner, we believe we are well-positioned to continue to participate in a myriad of exciting opportunities that lie ahead in the near-term, mid-term and long-term.”

Financial Highlights for the First Quarter of 2022

  • Total revenue in the first quarter of 2022 was $150.5 million as compared to $134.0 million in the first quarter of 2021.
  • Revenue from material sales was $86.7 million in the first quarter of 2022 as compared to $79.8 million in the first quarter of 2021.
  • Revenue from royalty and license fees was $59.8 million in the first quarter of 2022 as compared to $50.9 million in the first quarter of 2021.
  • Cost of materials was $29.9 million in the first quarter of 2022 as compared to $21.0 million in the first quarter of 2021.
  • Operating income was $62.3 million in the first quarter of 2022 as compared to $63.6 million in the first quarter of 2021.
  • Net income was $50.0 million or $1.05 per diluted share in the first quarter of 2022 as compared to $51.7 million or $1.08 per diluted share in the first quarter of 2021.

Revenue Comparison

($ in thousands)

Three Months Ended March 31,

 

 

2022

 

 

2021

 

Material sales

$

86,691

 

 

$

79,808

 

Royalty and license fees

 

59,802

 

 

 

50,886

 

Contract research services

 

3,977

 

 

 

3,306

 

Total revenue

$

150,470

 

 

$

134,000

 

Cost of Materials Comparison

($ in thousands)

Three Months Ended March 31,

 

 

2022

 

 

2021

 

Material sales

$

86,691

 

 

$

79,808

 

Cost of material sales

 

29,920

 

 

 

20,999

 

Gross margin on material sales

 

56,771

 

 

 

58,809

 

Gross margin as a % of material sales

 

65%

 

 

 

74%

 

2022 Guidance
The Company continues to believe that its 2022 revenue will be approximately in the range of $625 million to $650 million. The OLED industry remains at a stage where many variables can have a material impact on its growth, and the Company thus caveats its financial guidance accordingly.

Dividend
The Company also announced a second quarter cash dividend of $0.30 per share on the Company’s common stock. The dividend is payable on June 30, 2022 to all shareholders of record on June 16, 2022.

Conference Call Information
In conjunction with this release, Universal Display will host a conference call on May 5, 2022 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 1-877-524-8416 (toll-free) or 1-412-902-1028. 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 the research, development and commercialization of organic light emitting diode (OLED) technologies and materials for use in display and solid-state lighting applications. Founded in 1994 and with subsidiaries and offices around the world, the Company currently owns, exclusively licenses or has the sole right to sublicense more than 5,500 patents issued and pending worldwide. Universal Display licenses its proprietary technologies, including its breakthrough high-efficiency UniversalPHOLED® phosphorescent OLED technology that can enable the development of energy-efficient 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. To learn more about Universal Display Corporation, please visit https://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 the projected adoption, development and advancement of the Company’s technologies, and 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, 2021. Universal Display Corporation disclaims any obligation to update any forward-looking statement contained in this document.

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UNIVERSAL DISPLAY CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(UNAUDITED)

(in thousands, except share and per share data)

 

 

March 31, 2022

 

 

December 31, 2021

 

ASSETS

 

 

 

 

 

 

CURRENT ASSETS:

 

 

 

 

 

 

Cash and cash equivalents

 

$

357,424

 

 

$

311,993

 

Short-term investments

 

 

325,055

 

 

 

351,194

 

Accounts receivable

 

 

104,947

 

 

 

107,639

 

Inventory

 

 

143,240

 

 

 

134,160

 

Other current assets

 

 

29,120

 

 

 

20,948

 

Total current assets

 

 

959,786

 

 

 

925,934

 

PROPERTY AND EQUIPMENT, net of accumulated depreciation of $97,979 and $92,461

 

 

131,879

 

 

 

128,832

 

ACQUIRED TECHNOLOGY, net of accumulated amortization of $178,782 and $173,635

 

 

44,521

 

 

 

49,668

 

OTHER INTANGIBLE ASSETS, net of accumulated amortization of $7,918 and $7,565

 

 

9,370

 

 

 

9,711

 

GOODWILL

 

 

15,535

 

 

 

15,535

 

INVESTMENTS

 

 

164,130

 

 

 

168,076

 

DEFERRED INCOME TAXES

 

 

35,788

 

 

 

33,453

 

OTHER ASSETS

 

 

126,222

 

 

 

135,710

 

TOTAL ASSETS

 

$

1,487,231

 

 

$

1,466,919

 

LIABILITIES AND SHAREHOLDERS’ EQUITY

 

 

 

 

 

 

CURRENT LIABILITIES:

 

 

 

 

 

 

Accounts payable

 

$

27,064

 

 

$

14,955

 

Accrued expenses

 

 

26,960

 

 

 

45,474

 

Deferred revenue

 

 

111,778

 

 

 

120,864

 

Other current liabilities

 

 

12,452

 

 

 

6,645

 

Total current liabilities

 

 

178,254

 

 

 

187,938

 

DEFERRED REVENUE

 

 

31,735

 

 

 

36,217

 

RETIREMENT PLAN BENEFIT LIABILITY

 

 

67,481

 

 

 

66,773

 

OTHER LIABILITIES

 

 

78,461

 

 

 

76,077

 

Total liabilities

 

 

355,931

 

 

 

367,005

 

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, 200,000,000 shares authorized, 49,099,830 and 49,065,924 shares issued, and 47,734,182 and 47,700,276 shares outstanding, at March 31, 2022 and December 31, 2021, respectively

 

 

491

 

 

 

491

 

Additional paid-in capital

 

 

658,050

 

 

 

658,728

 

Retained earnings

 

 

535,936

 

 

 

500,212

 

Accumulated other comprehensive loss

 

 

(21,895

)

 

 

(18,235

)

Treasury stock, at cost (1,365,648 shares at March 31, 2022 and December 31, 2021)

 

 

(41,284

)

 

 

(41,284

)

Total shareholders’ equity

 

 

1,131,300

 

 

 

1,099,914

 

TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY

 

$

1,487,231

 

 

$

1,466,919

 

 

UNIVERSAL DISPLAY CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

(UNAUDITED)

(in thousands, except share and per share data)

 

 

Three Months Ended March 31,

 

 

 

2022

 

 

2021

 

REVENUE:

 

 

 

 

 

 

Material sales

 

$

86,691

 

 

$

79,808

 

Royalty and license fees

 

 

59,802

 

 

 

50,886

 

Contract research services

 

 

3,977

 

 

 

3,306

 

Total revenue

 

 

150,470

 

 

 

134,000

 

COST OF SALES

 

 

33,163

 

 

 

23,298

 

Gross margin

 

 

117,307

 

 

 

110,702

 

OPERATING EXPENSES:

 

 

 

 

 

 

Research and development

 

 

26,545

 

 

 

23,305

 

Selling, general and administrative

 

 

21,062

 

 

 

16,404

 

Amortization of acquired technology and other intangible assets

 

 

5,498

 

 

 

5,488

 

Patent costs

 

 

1,798

 

 

 

1,835

 

Royalty and license expense

 

 

154

 

 

 

112

 

Total operating expenses

 

 

55,057

 

 

 

47,144

 

OPERATING INCOME

 

 

62,250

 

 

 

63,558

 

Interest income, net

 

 

291

 

 

 

133

 

Other (loss) income, net

 

 

(34

)

 

 

59

 

Interest and other income, net

 

 

257

 

 

 

192

 

INCOME BEFORE INCOME TAXES

 

 

62,507

 

 

 

63,750

 

INCOME TAX EXPENSE

 

 

(12,537

)

 

 

(12,063

)

NET INCOME

 

$

49,970

 

 

$

51,687

 

NET INCOME PER COMMON SHARE:

 

 

 

 

 

 

BASIC

 

$

1.05

 

 

$

1.09

 

DILUTED

 

$

1.05

 

 

$

1.08

 

WEIGHTED AVERAGE SHARES USED IN COMPUTING NET INCOME PER COMMON SHARE:

 

 

 

 

 

 

BASIC

 

 

47,369,764

 

 

 

47,267,921

 

DILUTED

 

 

47,440,281

 

 

 

47,329,704

 

CASH DIVIDENDS DECLARED PER COMMON SHARE

 

$

0.30

 

 

$

0.20

 

 

UNIVERSAL DISPLAY CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

(in thousands)

 

 

Three Months Ended March 31,

 

 

 

2022

 

 

2021

 

CASH FLOWS FROM OPERATING ACTIVITIES:

 

 

 

 

 

 

Net income

 

$

49,970

 

 

$

51,687

 

Adjustments to reconcile net income to net cash provided by operating activities:

 

 

 

 

 

 

Amortization of deferred revenue and recognition of unbilled receivables, net

 

 

(64,106

)

 

 

(57,648

)

Depreciation

 

 

5,627

 

 

 

4,263

 

Amortization of intangibles

 

 

5,498

 

 

 

5,488

 

Change in excess inventory reserve

 

 

84

 

 

 

667

 

Amortization of premium and discount on investments, net

 

 

(271

)

 

 

(70

)

Stock-based compensation to employees

 

 

6,085

 

 

 

5,200

 

Stock-based compensation to Board of Directors and Scientific Advisory Board

 

 

430

 

 

 

330

 

Deferred income tax (benefit) expense

 

 

(1,380

)

 

 

515

 

Retirement plan expense

 

 

1,359

 

 

 

2,228

 

Decrease (increase) in assets:

 

 

 

 

 

 

Accounts receivable

 

 

2,692

 

 

 

(9,066

)

Inventory

 

 

(9,164

)

 

 

(10,498

)

Other current assets

 

 

(3,525

)

 

 

5,400

 

Other assets

 

 

9,488

 

 

 

(7,133

)

Increase (decrease) in liabilities:

 

 

 

 

 

 

Accounts payable and accrued expenses

 

 

(4,261

)

 

 

(21,136

)

Other current liabilities

 

 

5,807

 

 

 

(666

)

Deferred revenue

 

 

45,891

 

 

 

53,000

 

Other liabilities

 

 

2,384

 

 

 

6,935

 

Net cash provided by operating activities

 

 

52,608

 

 

 

29,496

 

CASH FLOWS FROM INVESTING ACTIVITIES:

 

 

 

 

 

 

Purchases of property and equipment

 

 

(10,751

)

 

 

(9,938

)

Purchases of intangibles

 

 

(12

)

 

 

(298

)

Purchases of investments

 

 

(24,915

)

 

 

(4,220

)

Proceeds from sale and maturity of investments

 

 

50,240

 

 

 

100,000

 

Net cash provided by investing activities

 

 

14,562

 

 

 

85,544

 

CASH FLOWS FROM FINANCING ACTIVITIES:

 

 

 

 

 

 

Proceeds from issuance of common stock

 

 

403

 

 

 

348

 

Payment of withholding taxes related to stock-based compensation to employees

 

 

(7,896

)

 

 

(9,634

)

Cash dividends paid

 

 

(14,246

)

 

 

(9,487

)

Net cash used in financing activities

 

 

(21,739

)

 

 

(18,773

)

INCREASE IN CASH AND CASH EQUIVALENTS

 

 

45,431

 

 

 

96,267

 

CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD

 

 

311,993

 

 

 

630,012

 

CASH AND CASH EQUIVALENTS, END OF PERIOD

 

$

357,424

 

 

$

726,279

 

The following non-cash activities occurred:

 

 

 

 

 

 

Unrealized loss on available-for-sale securities

 

$

(5,031

)

 

$

(66

)

Common stock issued to Board of Directors and Scientific Advisory Board that was earned and accrued for in a previous period

 

 

300

 

 

 

300

 

Net change in accounts payable and accrued expenses related to purchases of property and equipment

 

 

2,077

 

 

 

(27

)

 

Universal Display:
Darice Liu
investor@oled.com
media@oled.com
+1 609-964-5123

Source: Universal Display Corporation