EX-99.1 2 q12016pressrelease.htm EXHIBIT 99.1 Exhibit


Universal Display Contact:
 
 
 
Darice Liu
 
 
 
 
investor@udcoled.com
 
 
 
 
media@udcoled.com
 
 
 
 
609-671-0980 x570
 
 
 
 

UNIVERSAL DISPLAY CORPORATION ANNOUNCES
FIRST QUARTER 2016 FINANCIAL RESULTS

EWING, N.J. - May 5, 2016 - 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, 2016.
For the first quarter of 2016, the Company reported net income of $1.9 million, or $0.04 per diluted share, on revenues of $29.7 million, compared to net income of $1.3 million, or $0.03 per diluted share, on revenues of $31.2 million for the first quarter of 2015.
“In the first quarter, our commercial emitter revenues grew 8% year-over-year, primarily driven by strong green emitter shipments. Royalty and license fees increased by 22%. Host material sales, in line with expectations, declined year-over-year,” said Sidney D. Rosenblatt, Executive Vice President and Chief Financial Officer of Universal Display.
Rosenblatt continued, “The OLED landscape continues to expand. New OLED products are launching, capacity is building, equipment bookings are increasing and the pipeline of OLED design activities is broadening. With OLED display penetration at only about 10% of the total consumer electronic display market, new applications like automotive, virtual reality, augmented reality and signage emerging and OLED lighting transitioning from development stage to commercial, we believe that our long-term growth trajectory remains strong.”
Financial Highlights for the First Quarter of 2016
The Company reported revenues of $29.7 million, compared to revenues of $31.2 million in the same quarter of 2015. Material sales were $24.3 million, down 9% compared to the first quarter of 2015, primarily due to a $5.0 million decrease in host material sales. This decline was partially offset by an increase of $2.5




million in emitter material sales. Royalty and license fees were $5.3 million, up from $4.4 million in the first quarter of 2015.
No revenue was recognized under the Samsung Display Co., Ltd. (SDC) licensing agreement in the first quarter, as SDC is obligated to make licensing payments in the second and fourth quarters of the year. For 2016, the Company expects to recognize $75 million in SDC licensing revenues for the full year.
The Company reported operating income of $2.5 million, up from $1.8 million for the first quarter of 2015. Operating expenses were $27.2 million, compared to $29.5 million in the same quarter of 2015. Cost of materials was $5.1 million, compared to $8.6 million in the first quarter of 2015, reflecting the decline in host material sales volume, which have less favorable margins than the Company’s emitter materials.
The Company’s balance sheet remained strong, with cash and cash equivalents and investments of $395.7 million as of March 31, 2016.
2016 Guidance
The Company’s 2016 guidance remains unchanged. With the OLED industry still at an early state where many variables can have a material impact on its growth, the Company continues to believe that its 2016 revenues will increase 15% year-over-year, plus or minus 5%, as compared to 2015.
Conference Call Information
In conjunction with this release, Universal Display will host a conference call on Thursday, May 5, 2016 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 1-888-855-5428 (toll-free) or 1-719-457-2080, and reference conference ID 9143101. Please dial in 5-10 minutes prior to the scheduled conference call time.
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 3,600 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., OSRAM, Pioneer Corporation, Samsung Display Co., Ltd., Sumitomo Chemical Company, Ltd. and Tohoku Pioneer Corporation. To learn more about Universal Display, please visit 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, 2015. 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)
 
 
March 31, 2016
 
December 31, 2015
ASSETS
CURRENT ASSETS:
 
 
 
 
Cash and cash equivalents
 
$
110,091

 
$
97,513

Short-term investments
 
269,498

 
297,981

Accounts receivable
 
20,866

 
24,729

Inventories
 
14,709

 
12,748

Deferred income taxes
 
12,548

 
12,326

Other current assets
 
4,683

 
2,387

Total current assets
 
432,395

 
447,684

PROPERTY AND EQUIPMENT, net of accumulated depreciation of $28,799 and $27,897
 
22,362

 
22,407

ACQUIRED TECHNOLOGY, net of accumulated amortization of $57,587 and $54,837
 
69,265

 
72,015

INVESTMENTS
 
16,092

 
2,187

DEFERRED INCOME TAXES
 
15,287

 
14,945

OTHER ASSETS
 
645

 
174

TOTAL ASSETS
 
$
556,046

 
$
559,412

LIABILITIES AND SHAREHOLDERS’ EQUITY
CURRENT LIABILITIES:
 
 
 
 
Accounts payable
 
$
7,294

 
$
6,849

Accrued expenses
 
6,746

 
17,387

Deferred revenue
 
10,353

 
10,107

Other current liabilities
 
757

 
167

Total current liabilities
 
25,150

 
34,510

DEFERRED REVENUE
 
35,515

 
35,543

RETIREMENT PLAN BENEFIT LIABILITY
 
24,485

 
22,594

Total liabilities
 
85,150

 
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, 48,147,715 and 48,132,223 shares issued and outstanding at March 31, 2016 and December 31, 2015, respectively
 
483

 
482

Additional paid-in capital
 
592,769

 
589,885

Accumulated deficit
 
(71,678
)
 
(73,627
)
Accumulated other comprehensive loss
 
(10,522
)
 
(9,819
)
Treasury stock, at cost (1,357,863 shares at March 31, 2016 and December 31, 2015)
 
(40,158
)
 
(40,158
)
Total shareholders’ equity
 
470,896

 
466,765

TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY
 
$
556,046

 
$
559,412






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

(in thousands, except share and per share data)
 
 
Three Months Ended March 31,
 
 
2016
 
2015
REVENUE:
 
 
 
 
Material sales
 
$
24,304

 
$
26,818

Royalty and license fees
 
5,342

 
4,375

Technology development and support revenue
 
57

 
30

Total revenue
 
29,703

 
31,223

 
 
 
 
 
OPERATING EXPENSES:
 
 
 
 
Cost of material sales
 
5,052

 
8,581

Research and development
 
10,476

 
9,919

Selling, general and administrative
 
6,660

 
6,200

Patent costs and amortization of acquired technology
 
4,094

 
3,967

Royalty and license expense
 
875

 
785

Total operating expenses
 
27,157

 
29,452

Operating income
 
2,546

 
1,771

INTEREST INCOME
 
332

 
173

INTEREST EXPENSE
 
(8
)
 
(12
)
INCOME BEFORE INCOME TAXES
 
2,870

 
1,932

INCOME TAX EXPENSE
 
(921
)
 
(618
)
NET INCOME
 
$
1,949

 
$
1,314

 
 
 
 
 
NET INCOME PER COMMON SHARE:
 
 
 
 
BASIC
 
$
0.04

 
$
0.03

DILUTED
 
$
0.04

 
$
0.03

 
 
 
 
 
WEIGHTED AVERAGE SHARES USED IN COMPUTING NET INCOME PER COMMON SHARE:
 
 
 
 
BASIC
 
46,774,360

 
45,785,725

DILUTED
 
46,907,558

 
46,214,247






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

(in thousands)
 
 
Three Months Ended March 31,
 
 
2016
 
2015
CASH FLOWS FROM OPERATING ACTIVITIES:
 
 
 
 
Net income
 
$
1,949

 
$
1,314

Adjustments to reconcile net income to net cash provided by operating activities:
 
 
 
 
Amortization of deferred revenue
 
(2,032
)
 
(1,177
)
Depreciation
 
902

 
702

Amortization of intangibles
 
2,750

 
2,750

Amortization of premium and discount on investments, net
 
(297
)
 
(135
)
Stock-based compensation to employees
 
2,830

 
1,715

Stock-based compensation to Board of Directors and Scientific Advisory Board
 
408

 
366

Deferred income tax benefit
 
(169
)
 
334

Retirement plan benefit expense
 
1,029

 
592

 Decrease (increase) in assets:
 
 
 
 
Accounts receivable
 
3,863

 
3,911

Inventories
 
(1,961
)
 
(1,858
)
Other current assets
 
(2,296
)
 
703

Other assets
 
(472
)
 
20

(Decrease) increase in liabilities:
 
 
 
 
Accounts payable and accrued expenses
 
(9,134
)
 
(8,584
)
Other current liabilities
 
590

 
(55
)
Deferred revenue
 
2,250

 
46,382

Net cash provided by operating activities
 
210

 
46,980

CASH FLOWS FROM INVESTING ACTIVITIES:
 
 
 
 
Purchases of property and equipment
 
(516
)
 
(1,950
)
Purchases of investments
 
(193,929
)
 
(51,957
)
Proceeds from sale of investments
 
208,571

 
90,876

Net cash provided by investing activities
 
14,126

 
36,969

CASH FLOWS FROM FINANCING ACTIVITIES:
 
 
 
 
Proceeds from issuance of common stock
 
99

 
90

Proceeds from the exercise of common stock options
 
151

 
702

Payment of withholding taxes related to stock-based employee compensation
 
(2,008
)
 
(4,970
)
Net cash used in financing activities
 
(1,758
)
 
(4,178
)
INCREASE IN CASH AND CASH EQUIVALENTS
 
12,578

 
79,771

CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD
 
97,513

 
45,418

CASH AND CASH EQUIVALENTS, END OF PERIOD
 
$
110,091

 
$
125,189