EX-99.1 2 q22014pressrelease.htm PRESS RELEASE Q2 2014 Press Release


Investor Relations:
 
 
 
Media Contact:
Darice Liu
 
 
 
Matt McLoughlin
Universal Display
 
 
 
Gregory FCA
investor@udcoled.com
 
 
 
media@udcoled.com
609-671-0980 x558
 
 
 
610-228-2123
UNIVERSAL DISPLAY CORPORATION ANNOUNCES
SECOND QUARTER 2014 FINANCIAL RESULTS

EWING, N.J. - August 7, 2014 - Universal Display Corporation (Nasdaq: OLED), enabling energy-efficient displays and lighting with its UniversalPHOLED® technology and materials, today reported financial results for the second quarter ended June 30, 2014.

For the second quarter of 2014, the Company reported net income of $20.4 million, or $0.44 per diluted share, on revenues of $64.1 million. For the second quarter of 2013, the Company reported net income of $15.4 million, or $0.33 per diluted share, on revenues of $49.4 million.

"We are pleased to report another record quarter of strong revenues and operating profit. The continued broadening array of OLED consumer products such as smartphones, tablets and wearables, coupled with Universal Display’s leadership in phosphorescent OLED materials and technologies, drove our top-line and bottom-line growth," said Sidney D. Rosenblatt, Executive Vice President and Chief Financial Officer of Universal Display. "From commitments to OLED TV and flexible display production to our expanding customer base, OLED activity continues to grow. Recently, we announced an extended evaluation agreement with BOE Technology, China’s largest panel maker, and a commercial materials agreement with Philips, a pioneer of lighting development and production. Looking forward, we continue to be excited by what we believe to be substantial growth opportunities in the evolving OLED display and lighting markets.”

Second Quarter 2014 Results

Revenues for the second quarter of 2014 were $64.1 million, a 30% increase compared to revenues of $49.4 million in the same quarter of 2013. Growth in second quarter revenues was led by a 32% increase in material sales, which rose to $35.9 million, up from $27.1 million in the second quarter of 2013. This growth reflected solid volume growth in sales of red emitter, green emitter and green host materials. Royalty and license fees were $28.1 million in the second quarter of 2014, up from $21.2 million in the same quarter of 2013. The Company recognized $25 million in Samsung Display Co., Ltd. (SDC) licensing revenue in the second quarter of 2014, up from $20 million in the same quarter of 2013.

Operating expenses for the second quarter of 2014 were $35.3 million, compared to $27.6 million in the same quarter of 2013. Cost of materials for the quarter was $12.0 million, compared to $8.3 million in the second quarter of 2013.




The Company reported operating income of $28.8 million for the second quarter of 2014, compared to $21.7 million for the second quarter of 2013.

The Company’s balance sheet remained strong, with cash and cash equivalents and short-term investments of $291 million as of June 30, 2014. Operating cash flow for the second quarter of 2014 was $32.3 million, an increase of 22% compared to $26.4 million for the second quarter of 2013.

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. During the three months ended June 30, 2014, the Company purchased 234,800 shares at a cost of approximately $7.0 million.

First Six Months Results

Revenues for the first six months of 2014 were $102.0 million, a 58% increase compared to $64.3 million in the first half of 2013. Material sales in the first half of the year were $71.3 million, an increase of 79% compared to material sales of $39.9 million in the first half of 2013. Operating income in the first half of 2014 was $35.5 million, or 35% of revenues, compared to operating income of $14.6 million, or 23% of revenues, in the first half of 2013. For the first half of 2014, we reported net income of $24.4 million, or $0.52 per diluted share, increases of 130% and 126%, respectively, compared to net income of $10.6 million, or $0.23 per diluted share, in the same period of 2013.

2014 Guidance

Although the OLED industry is still at a stage where many variables can have a material impact on its growth, the Company reaffirms expectations for 2014 revenues to reach the high end of its $190 million to $205 million guidance range.

Conference Call Information

In conjunction with this release, Universal Display will host a conference call on Thursday, August 7, 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 1-888-631-5930 (toll-free) or 1-913-312-0699, and reference conference ID 8571677. 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 3,000 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.




UNIVERSAL DISPLAY CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)

(in thousands, except share and per share data)
 
 
June 30, 2014
 
December 31, 2013
ASSETS
CURRENT ASSETS:
 
 
 
 
Cash and cash equivalents
 
$
75,554

 
$
70,586

Short-term investments
 
215,331

 
202,024

Accounts receivable
 
20,500

 
15,657

Inventory
 
20,664

 
10,595

Deferred income taxes
 
18,288

 
21,563

Other current assets
 
13,074

 
6,623

Total current assets
 
363,411

 
327,048

PROPERTY AND EQUIPMENT, net of accumulated depreciation of $23,693 and $22,756
 
16,973

 
14,893

ACQUIRED TECHNOLOGY, net of accumulated amortization of $38,339 and $32,841
 
88,513

 
94,011

INVESTMENTS
 
2,522

 
7,417

DEFERRED INCOME TAXES
 
15,456

 
19,143

OTHER ASSETS
 
494

 
242

TOTAL ASSETS
 
$
487,369

 
$
462,754

LIABILITIES AND SHAREHOLDERS’ EQUITY
CURRENT LIABILITIES:
 
 
 
 
Accounts payable
 
$
12,227

 
$
5,256

Accrued expenses
 
9,977

 
16,039

Deferred revenue
 
3,095

 
1,910

Other current liabilities
 
441

 
24

Total current liabilities
 
25,740

 
23,229

DEFERRED REVENUE
 
3,241

 
2,403

RETIREMENT PLAN BENEFIT LIABILITY
 
9,984

 
9,436

Total liabilities
 
38,965

 
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, 46,899,849 and 46,825,168 shares issued and outstanding at June 30, 2014 and December 31, 2013, respectively
 
469

 
468

Additional paid-in capital
 
575,454

 
572,401

Accumulated deficit
 
(105,716
)
 
(130,159
)
Accumulated other comprehensive loss
 
(4,147
)
 
(4,368
)
Treasury stock, at cost (636,301 and 401,501 shares at June 30, 2014 and December 31, 2013, respectively)
 
(17,658
)
 
(10,658
)
Total shareholders’ equity
 
448,404

 
427,686

TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY
 
$
487,369

 
$
462,754






UNIVERSAL DISPLAY CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)

(in thousands, except share and per share data)
 
 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
 
2014
 
2013
 
2014
 
2013
REVENUE:
 
 
 
 
 
 
 
 
Material sales
 
$
35,926

 
$
27,137

 
$
71,252

 
$
39,889

Royalty and license fees
 
28,064

 
21,201

 
29,843

 
22,500

Technology development and support revenue
 
137

 
1,021

 
870

 
1,946

Total revenue
 
64,127

 
49,359

 
101,965

 
64,335

 
 
 
 
 
 
 
 
 
OPERATING EXPENSES:
 
 
 
 
 
 
 
 
Cost of material sales
 
11,951

 
8,282

 
21,848

 
11,374

Research and development
 
10,544

 
7,316

 
20,700

 
16,254

Selling, general and administrative
 
6,545

 
6,336

 
12,975

 
11,507

Patent costs and amortization of acquired technology
 
4,748

 
4,522

 
8,721

 
9,139

Royalty and license expense
 
1,501

 
1,172

 
2,257

 
1,484

Total operating expenses
 
35,289

 
27,628

 
66,501

 
49,758

Operating income
 
28,838

 
21,731

 
35,464

 
14,577

INTEREST INCOME
 
193

 
178

 
411

 
388

INTEREST EXPENSE
 
(21
)
 
(10
)
 
(37
)
 
(18
)
INCOME BEFORE INCOME TAXES
 
29,010

 
21,899

 
35,838

 
14,947

INCOME TAX EXPENSE
 
(8,588
)
 
(6,517
)
 
(11,395
)
 
(4,323
)
NET INCOME
 
$
20,422

 
$
15,382

 
$
24,443

 
$
10,624

 
 
 
 
 
 
 
 
 
NET INCOME PER COMMON SHARE:
 
 
 
 
 
 
 
 
BASIC
 
$
0.44

 
$
0.34

 
$
0.53

 
$
0.23

DILUTED
 
$
0.44

 
$
0.33

 
$
0.52

 
$
0.23

 
 
 
 
 
 
 
 
 
WEIGHTED AVERAGE SHARES USED IN COMPUTING NET INCOME PER COMMON SHARE:
 
 
 
 
 
 
 
 
BASIC
 
46,266,142

 
45,859,286

 
46,222,146

 
45,841,446

DILUTED
 
46,614,726

 
46,496,120

 
46,632,982

 
46,523,540







UNIVERSAL DISPLAY CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)

(in thousands)
 
 
Six Months Ended June 30,
 
 
2014
 
2013
CASH FLOWS FROM OPERATING ACTIVITIES:
 
 
 
 
Net income
 
$
24,443

 
$
10,624

Adjustments to reconcile net income to net cash provided by operating activities:
 
 
 
 
Amortization of deferred revenue
 
(1,669
)
 
(1,835
)
Depreciation
 
937

 
985

Amortization of intangibles
 
5,498

 
5,483

Amortization of premium and discount on investments, net
 
(269
)
 
(219
)
Stock-based compensation to employees
 
3,526

 
2,935

Stock-based compensation to Board of Directors and Scientific Advisory Board
 
463

 
394

Deferred income tax benefit
 
6,833

 
—

Retirement plan benefit expense
 
838

 
834

(Increase) decrease in assets:
 
 
 
 
Accounts receivable
 
(4,843
)
 
(5,794
)
Inventory
 
(10,069
)
 
2,345

Other current assets
 
(6,451
)
 
(2,313
)
Other assets
 
(252
)
 
2

Increase (decrease) in liabilities:
 
 
 
 
Accounts payable and accrued expenses
 
1,914

 
(186
)
Other current liabilities
 
417

 
904

Deferred revenue
 
3,692

 
1,376

Net cash provided by operating activities
 
25,008

 
15,535

CASH FLOWS FROM INVESTING ACTIVITIES:
 
 
 
 
Purchases of property and equipment
 
(2,951
)
 
(2,435
)
Additions to intangibles
 
—

 
(107
)
Purchases of investments
 
(183,688
)
 
(185,314
)
Proceeds from sale of investments
 
175,603

 
175,093

Net cash used in investing activities
 
(11,036
)
 
(12,763
)
CASH FLOWS FROM FINANCING ACTIVITIES:
 
 
 
 
Proceeds from issuance of common stock under ESPP
 
162

 
177

Repurchase of common stock
 
(7,000
)
 
(5,456
)
Proceeds from the exercise of common stock options
 
664

 
271

Payment of withholding taxes related to stock-based compensation to employees
 
(2,830
)
 
(2,985
)
Net cash used in financing activities
 
(9,004
)
 
(7,993
)
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
 
4,968

 
(5,221
)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD
 
70,586

 
85,923

CASH AND CASH EQUIVALENTS, END OF PERIOD
 
$
75,554

 
$
80,702

The following non-cash activities occurred:
 
 
 
 
Unrealized loss on available-for-sale securities
 
$
58

 
$
36

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
 
64

 
891