8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): November 4, 2021

UNIVERSAL DISPLAY CORPORATION

(Exact name of Registrant as Specified in Its Charter)

Pennsylvania	1-12031	23-2372688
(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(IRS Employer Identification No.)
375 Phillips Boulevard, Ewing, NJ		08618
(Address of Principal Executive Offices)		(Zip Code)

Registrant’s Telephone Number, Including Area Code: (609) 671-0980

Not Applicable

(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instructions A.2. below):

☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.01 par value	OLED	The NASDAQ Stock Market LLC

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Item 2.02 Results of Operations and Financial Condition.

On November 4, 2021, the Registrant issued a press release regarding its financial results for the quarter ended September 30, 2021. A copy of the press release is furnished as Exhibit 99.1 to this report.

The information set forth under this “Item 2.02. Results of Operations and Financial Condition” (including the exhibit) shall not be deemed to be “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, nor shall it be incorporated by reference in any filing made by the Registrant pursuant to the Securities Act of 1933, as amended, other than to the extent that such filing incorporates by reference any or all of such information by express reference thereto.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits

Exhibit Number	Description
99.1	Press Release by the Registrant, dated November 4, 2021, furnished pursuant to Item 2.02 of Form 8-K.
104	Cover Page Interactive Data File (embedded within the Inline XBRL document).

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	Universal Display Corporation
Date: November 4, 2021	By:	/s/ Sidney D. Rosenblatt
		Sidney D. Rosenblatt
		Executive Vice President, Chief Financial Officer, Treasurer and Secretary

EX-99.1

Exhibit 99.1

Press Release

Universal Display Contact:

Darice Liu

investor@oled.com

media@oled.com

+1 609-964-5123

Universal Display Corporation Announces Third Quarter 2021 Financial Results

EWING, N.J. – November 4, 2021 –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, 2021.

“We are pleased to report solid third quarter results, including record revenue of $143.6 million,” said Sidney D. Rosenblatt, Executive Vice President and Chief Financial Officer of Universal Display. “The pandemic and component shortages are causing global disruptions in the supply chain. While these ongoing uncertainties are impacting the OLED ecosystem, we are reaffirming our revenue guidance range of $530 million to $560 million. On the partnership front, we are pleased to announce that we extended our long-term material and license agreements with leading Chinese panel maker Tianma. Tianma is advancing its OLED presence and expanding its product portfolio, and we are delighted to continue our strong partnership. We are also gratified to share that The Forum of Executive Women has recognized Universal Display Corporation as a Champion of Board Diversity for the second year. This is indicative of our steadfast commitment to cultivating and nurturing a global culture that celebrates innovation, collaboration, diversity and inclusion.”

Rosenblatt continued, “As we look to the OLED industry, we believe that we are still in the early innings of a long-term secular growth market. As the next wave of OLED adoption for medium-and-large-area applications takes shape, we are fortifying our position as an OLED leader and innovator on multiple fronts. We are leveraging our 25-plus years of pioneering research, know-how and experience into new OLED materials and technologies. We are also expanding our global footprint, building our infrastructure that is designed to drive an effective cost structure and targeting new opportunities, including phosphorescent blue and OVJP. We believe that these strategic initiatives will enable us to continue providing our customers with best-in-class solutions, while keeping UDC at the forefront of the growing OLED industry.”

Financial Highlights for the Third Quarter of 2021

Total revenue in the third quarter of 2021 was $143.6 million as compared to $117.1 million in the third quarter of 2020. The increase in revenue was due to higher royalty and license fees, as well as higher material sales primarily due to stronger demand in the OLED display market.

Revenue from material sales was $75.6 million in the third quarter of 2021 as compared to $68.7 million in the third quarter of 2020.

Revenue from royalty and license fees was $63.9 million in the third quarter of 2021 as compared to $44.6 million in the third quarter of 2020.

Cost of material sales was $28.9 million in the third quarter of 2021 as compared to $20.8 million in the third quarter of 2020. Included in the cost of material sales was an inventory reserve charge of $1.0 million in the third quarter of 2021 as compared to a charge of $198,000 in the third quarter of 2020.

Operating income was $57.7 million in the third quarter of 2021 as compared to operating income of $48.4 million in the third quarter of 2020.

Net income was $46.1 million or $0.97 per diluted share in the third quarter of 2021 as compared to $40.5 million or $0.85 per diluted share in the third quarter of 2020.

Revenue Comparison

($ in thousands)	Three Months Ended September 30,
	2021		2020
Material sales	$	75,609	$	68,709
Royalty and license fees		63,939		44,550
Contract research services		4,070		3,820
Total revenue	$	143,618	$	117,079

Cost of Materials Comparison

($ in thousands)	Three Months Ended September 30,
	2021			2020
Material sales	$	75,609		$	68,709
Cost of material sales		28,883			20,849
Gross margin on material sales		46,726			47,860
Gross margin as a % of material sales		62	%		70	%

Financial Highlights for the First Nine Months of 2021

Total revenue in the first nine months of 2021 was $407.3 million as compared to $287.3 million in the first nine months of 2020. The increase in revenue was due to higher royalty and license fees, as well as higher material sales primarily due to stronger demand in the OLED display market.

Revenue from material sales was $232.9 million in the first nine months of 2021 as compared to $167.2 million in the first nine months of 2020. Revenue from royalty and license fees was $163.0 million in the first nine months of 2021 as compared to $110.0 million in the first nine months of 2020.

Cost of material sales was $75.2 million in the first nine months of 2021 as compared to $51.3 million in the first nine months of 2020. Included in the cost of material sales was an inventory reserve charge of $2.1 million in the first nine months of 2021 as compared to a charge of $808,000 in the first nine months of 2020.

Operating income was $171.2 million in the first nine months of 2021 as compared to $91.7 million in the first nine months of 2020.

Net income was $138.3 million or $2.90 per diluted share in the first nine months of 2021 as compared to $79.5 million or $1.67 per diluted share in the first nine months of 2020.

Revenue Comparison

($ in thousands)	Nine Months Ended September 30,
	2021		2020
Material sales	$	232,855	$	167,211
Royalty and license fees		163,037		110,008
Contract research services		11,386		10,105
Total revenue	$	407,278	$	287,324

Cost of Materials Comparison

($ in thousands)	Nine Months Ended September 30,
	2021			2020
Material sales	$	232,855		$	167,211
Cost of material sales		75,198			51,337
Gross margin on material sales		157,657			115,874
Gross margin as a % of material sales		68	%		69	%

2021 Guidance

The Company continues to believe that its 2021 revenue will be approximately in the range of $530 million to $560 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 fourth quarter cash dividend of $0.20 per share on the Company’s common stock. The dividend is payable on December 30, 2021 to all shareholders of record on December 16, 2021.

Conference Call Information

In conjunction with this release, Universal Display will host a conference call on Thursday, November 4, 2021, 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 5,000 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 Company’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, 2020. 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)

	September 30, 2021			December 31, 2020
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	535,157		$	630,012
Short-term investments		253,786			99,996
Accounts receivable		96,235			82,261
Inventory		121,485			91,591
Other current assets		48,476			20,746
Total current assets		1,055,139			924,606
PROPERTY AND EQUIPMENT, net of accumulated depreciation of $86,962 and $72,493		118,988			102,113
ACQUIRED TECHNOLOGY, net of accumulated amortization of $168,489 and $153,050		54,814			70,253
OTHER INTANGIBLE ASSETS, net of accumulated amortization of $7,206 and $6,155		10,028			10,685
GOODWILL		15,535			15,535
INVESTMENTS		8,500			5,000
DEFERRED INCOME TAXES		32,476			37,695
OTHER ASSETS		133,111			103,341
TOTAL ASSETS	$	1,428,591		$	1,269,228
LIABILITIES AND SHAREHOLDERS’ EQUITY
CURRENT LIABILITIES:
Accounts payable	$	10,939		$	13,801
Accrued expenses		42,736			41,404
Deferred revenue		123,475			105,215
Other current liabilities		3,111			4,540
Total current liabilities		180,261			164,960
DEFERRED REVENUE		43,458			57,086
RETIREMENT PLAN BENEFIT LIABILITY		80,676			78,527
OTHER LIABILITIES		87,874			55,941
Total liabilities		392,269			356,514
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, 49,060,909    and 49,013,476 shares issued, and 47,695,261 and 47,647,828 shares outstanding, at    September 30, 2021 and December 31, 2020, respectively		491			490
Additional paid-in capital		646,049			635,595
Retained earnings		463,820			353,930
Accumulated other comprehensive loss		(32,756	)		(36,019	)
Treasury stock, at cost (1,365,648 shares at September 30, 2021 and December 31, 2020)		(41,284	)		(41,284	)
Total shareholders’ equity		1,036,322			912,714
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$	1,428,591		$	1,269,228

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,
	2021			2020			2021			2020
REVENUE:
Material sales	$	75,609		$	68,709		$	232,855		$	167,211
Royalty and license fees		63,939			44,550			163,037			110,008
Contract research services		4,070			3,820			11,386			10,105
Total revenue		143,618			117,079			407,278			287,324
COST OF SALES		31,481			23,378			82,748			58,480
Gross margin		112,137			93,701			324,530			228,844
OPERATING EXPENSES:
Research and development		25,327			20,814			72,733			61,708
Selling, general and administrative		20,960			13,579			57,603			45,129
Amortization of acquired technology and other intangible assets		5,505			5,494			16,490			16,474
Patent costs		2,359			2,095			6,003			5,591
Royalty and license expense		258			3,293			519			8,195
Total operating expenses		54,409			45,275			153,348			137,097
OPERATING INCOME		57,728			48,426			171,182			91,747
Interest income, net		137			1,029			345			4,444
Other (loss) income, net		(102	)		262			178			634
Interest and other income, net		35			1,291			523			5,078
INCOME BEFORE INCOME TAXES		57,763			49,717			171,705			96,825
INCOME TAX EXPENSE		(11,654	)		(9,217	)		(33,368	)		(17,355	)
NET INCOME	$	46,109		$	40,500		$	138,337		$	79,470
NET INCOME PER COMMON SHARE:
BASIC	$	0.97		$	0.85		$	2.91		$	1.67
DILUTED	$	0.97		$	0.85		$	2.90		$	1.67
WEIGHTED AVERAGE SHARES USED IN COMPUTING NET    INCOME PER COMMON SHARE:
BASIC		47,291,192			47,227,061			47,286,927			47,182,625
DILUTED		47,362,575			47,260,331			47,355,583			47,212,660
CASH DIVIDENDS DECLARED PER COMMON SHARE	$	0.20		$	0.15		$	0.60		$	0.45

UNIVERSAL DISPLAY CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

(in thousands)

	Nine Months Ended September 30,
	2021			2020
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	138,337		$	79,470
Adjustments to reconcile net income to net cash provided by operating activities:
Amortization of deferred revenue and recognition of unbilled receivables, net		(165,723	)		(112,508	)
Depreciation		14,471			11,147
Amortization of intangibles		16,490			16,474
Change in excess inventory reserve		2,058			808
Amortization of premium and discount on investments, net		(229	)		(4,293	)
Stock-based compensation to employees		22,846			19,807
Stock-based compensation to Board of Directors and Scientific Advisory Board		1,052			1,133
Deferred income tax expense (benefit)		4,226			(2,242	)
Retirement plan expense		6,676			4,242
Decrease (increase) in assets:
Accounts receivable		(13,974	)		(38,898	)
Inventory		(31,952	)		(20,953	)
Other current assets		(13,626	)		(2,854	)
Other assets		(33,540	)		(8,721	)
Increase (decrease) in liabilities:
Accounts payable and accrued expenses		(3,311	)		(19,633	)
Other current liabilities		(1,429	)		(806	)
Deferred revenue		160,021			144,200
Other liabilities		31,933			9,454
Net cash provided by operating activities		134,326			75,827
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment		(29,496	)		(19,213	)
Purchases of intangibles		(394	)		(25	)
Purchases of investments		(272,340	)		(604,153	)
Proceeds from sale and maturity of investments		115,240			613,310
Net cash used in investing activities		(186,990	)		(10,081	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of common stock		1,136			869
Payment of withholding taxes related to stock-based compensation to employees		(14,880	)		(14,293	)
Cash dividends paid		(28,447	)		(21,329	)
Net cash used in financing activities		(42,191	)		(34,753	)
(DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS		(94,855	)		30,993
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD		630,012			131,627
CASH AND CASH EQUIVALENTS, END OF PERIOD	$	535,157		$	162,620
The following non-cash activities occurred:
Unrealized (loss) gain on available-for-sale securities	$	(39	)	$	451
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		(1,849	)		(892	)

XML

Document And Entity Information	Nov. 04, 2021
Cover [Abstract]
Document Type	8-K
Amendment Flag	false
Document Period End Date	Nov. 04, 2021
Entity Registrant Name	UNIVERSAL DISPLAY CORPORATION
Entity Central Index Key	0001005284
Entity Emerging Growth Company	false
Title of 12(b) Security	Common Stock, $0.01 par value
Trading Symbol	OLED
Security Exchange Name	NASDAQ
Entity File Number	1-12031
Entity Incorporation, State or Country Code	PA
Entity Tax Identification Number	23-2372688
Entity Address, Address Line One	375 Phillips Boulevard
Entity Address, City or Town	Ewing
Entity Address, State or Province	NJ
Entity Address, Postal Zip Code	08618
City Area Code	609
Local Phone Number	671-0980
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false