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): August 3, 2017

UNIVERSAL DISPLAY CORPORTION

(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))

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 August 3, 2017, the Registrant issued a press release regarding its financial results for the year ended June 30, 2017. 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 August 3, 2017, furnished pursuant to Item 2.02 of Form 8-K.

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: August 3, 2017	By:	/s/ Sidney D. Rosenblatt
		Sidney D. Rosenblatt
		Executive Vice President, Chief Financial Officer, Treasurer and Secretary

EXHIBIT INDEX

Exhibit Number	Description
99.1	Press Release by the Registrant, dated August 3, 2017, furnished pursuant to Item 2.02 of Form 8-K.

EX-99.1

Exhibit 99.1

                                                       Press Release

Universal Display Contact:

Darice Liu

investor@oled.com

media@oled.com

609-671-0980 x570

UNIVERSAL DISPLAY CORPORATION ANNOUNCES SECOND QUARTER 2017 FINANCIAL RESULTS

EWING, N.J. – August 3, 2017 – 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, 2017.

“We are pleased to report solid year-over-year growth across the board, leading to record revenues and earnings,” said Sidney D. Rosenblatt, Executive Vice President and Chief Financial Officer of Universal Display. “Our outstanding performance stems from over two decades of consistently investing in our pioneering technology, scaling our critical mass, and streamlining our operational flexibility from invention, to pilot, to mass production, in addition to a vibrant growing OLED market. Through these twenty-plus years, we have accumulated a robust wealth of knowledge and know-how, expanded our extensive IP matrix, and built-up our R&D prowess to innovate, develop and deliver leading-edge materials and technologies to our growing customer base.”

Rosenblatt continued, “With the OLED revolution gaining strength, our momentum is growing as well. With our tremendous experience, steadfast focus on execution, and expanding product portfolio of new OLED materials and technologies, we believe that we are well-positioned to leverage the vast opportunities in this flourishing market to drive profitable growth and deliver the most energy-efficient, high performance and cost-effective emissive layer solutions to our customers and partners.”

Financial Highlights for the Second Quarter of 2017

• Total revenue increased 59% to $102.5 million in the second quarter, compared with $64.4 million in the second quarter of 2016, driven by higher material sales as well as royalty and license fees.

• Revenue from material sales increased 110% to $46.8 million in the second quarter, compared with $22.3 million in the second quarter of 2016, due to an increase in phosphorescent emitter sales.

• Revenue from royalty and license fees increased 28% to $53.7 million in the second quarter, compared with $42.0 million in the second quarter of 2016.

• Operating income increased by $26.5 million to $60.5 million in the second quarter, compared with $34.0 million in the second quarter of 2016.

• Net income increased by $25.4 million to $47.2 million or $0.99 per diluted share in the second quarter, compared with $21.8 million or $0.46 per diluted share in the second quarter of 2016.

Financial Highlights for the First Half of 2017

• Total revenue increased 68% to $158.1 million in the first half, compared with $94.1 million in the first half of 2016, driven by higher material sales as well as royalty and license fees.

• Revenue from material sales increased 101% to $93.5 million in the first half, compared with $46.6 million in the first half of 2016, due to an increase in phosphorescent emitter sales.

• Revenue from royalty and license fees increased 28% to $60.7 million in the first half, compared with $47.4 million in the first half of 2016.

• Operating income increased by $35.9 million to $72.6 million in the first half, compared with $36.7 million in the first half of 2016.

• Net income increased by $33.8 million to $57.6 million or $1.21 per diluted share in the first half, compared with $23.8 million or $0.51 per diluted share in the first half of 2016.

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 $285 million to $300 million for fiscal 2017.

Dividend

The Company also announced a third quarter cash dividend of $0.03 per share on the Company’s common stock. The dividend is payable on September 30, 2017, to all shareholders of record as of the close of business on September 15, 2017.

Conference Call Information

In conjunction with this release, Universal Display will host a conference call on Thursday, August 3, 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 1-800-449-5865 (toll-free) or 1-719-457-2088, and reference conference ID 7036849. 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 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.

Headquartered in Ewing, New Jersey, with international offices in China, Hong Kong, Ireland, Japan, South Korea, and Taiwan, and wholly-owned subsidiary Adesis, Inc. based in New Castle, Delaware, 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, Japan Display Inc., 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

Twitter

Facebook

YouTube

(OLED-C)

UNIVERSAL DISPLAY CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(in thousands, except share and per share data)

(Unaudited)

	June 30, 2017			December 31, 2016
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	109,438		$	139,365
Short-term investments		256,117			188,644
Accounts receivable		39,702			24,994
Inventory		24,437			17,314
Deferred income taxes		—			8,661
Other current assets		7,191			6,392
Total current assets		436,885			385,370
PROPERTY AND EQUIPMENT, net of accumulated depreciation of $34,409    and $32,167		38,691			27,203
ACQUIRED TECHNOLOGY, net of accumulated amortization of $81,013 and $70,714		141,828			152,127
OTHER INTANGIBLE ASSETS, net of accumulated amortization of $1,303 and $615		15,537			16,225
GOODWILL		15,535			15,535
INVESTMENTS		14,775			14,960
DEFERRED INCOME TAXES		44,067			15,832
OTHER ASSETS		317			307
TOTAL ASSETS	$	707,635		$	627,559
LIABILITIES AND SHAREHOLDERS’ EQUITY
CURRENT LIABILITIES:
Accounts payable	$	17,772		$	8,112
Accrued expenses		12,442			19,845
Deferred revenue		10,061			10,282
Other current liabilities		1,146			1,967
Total current liabilities		41,421			40,206
DEFERRED REVENUE		27,174			31,322
RETIREMENT PLAN BENEFIT LIABILITY		31,228			27,563
Total liabilities		99,823			99,091
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, 48,444,492 and 48,270,990 shares issued, and 47,086,629 and 46,913,127 shares outstanding, at June 30, 2017 and December 31, 2016, respectively		484			483
Additional paid-in capital		603,438			604,364
Retained earnings (accumulated deficit)		55,617			(25,557	)
Accumulated other comprehensive loss		(11,571	)		(10,666	)
Treasury stock, at cost (1,357,863 shares at June 30, 2017 and December 31,    2016)		(40,158	)		(40,158	)
Total shareholders’ equity		607,812			528,468
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$	707,635		$	627,559

UNIVERSAL DISPLAY CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

(in thousands, except share and per share data)

(Unaudited)

	Three Months Ended June 30,						Six Months Ended June 30,
	2017			2016			2017			2016
REVENUE:
Material sales	$	46,828		$	22,315		$	93,465		$	46,619
Royalty and license fees		53,667			42,018			60,692			47,360
Contract research services		2,018			59			3,922			116
Total revenue		102,513			64,392			158,079			94,095
COST OF SALES		11,310			5,684			24,297			10,736
Gross margin		91,203			58,708			133,782			83,359
OPERATING EXPENSES:
Research and development		10,685			10,969			22,503			21,445
Selling, general and administrative		9,839			7,688			19,916			14,264
Amortization of acquired technology and other intangible assets		5,495			2,830			10,987			5,579
Patent costs		1,674			1,230			3,221			2,575
Royalty and license expense		2,991			1,966			4,578			2,841
Total operating expenses		30,684			24,683			61,205			46,704
OPERATING INCOME		60,519			34,025			72,577			36,655
Interest income, net		796			653			1,467			978
Other income (expense), net		6			(1,829	)		(13	)		(1,914	)
Interest and other income, net		802			(1,176	)		1,454			(936	)
INCOME BEFORE INCOME TAXES		61,321			32,849			74,031			35,719
INCOME TAX EXPENSE		(14,134	)		(11,047	)		(16,479	)		(11,968	)
NET INCOME	$	47,187		$	21,802		$	57,552		$	23,751
NET INCOME PER COMMON SHARE:
BASIC	$	0.99		$	0.46		$	1.21		$	0.51
DILUTED	$	0.99		$	0.46		$	1.21		$	0.51
WEIGHTED AVERAGE SHARES USED IN COMPUTING NET    INCOME PER COMMON SHARE:
BASIC		46,742,746			46,927,543			46,702,376			46,862,199
DILUTED		46,810,238			47,041,854			46,781,120			46,985,374
CASH DIVIDENDS DECLARED PER COMMON SHARE	$	0.03		$	—		$	0.06		$	—

UNIVERSAL DISPLAY CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

(Unaudited)

	Six Months Ended June 30,
	2017			2016
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	57,552		$	23,751
Adjustments to reconcile net income to net cash provided by operating activities:
Amortization of deferred revenue		(4,873	)		(3,601	)
Depreciation		2,398			1,839
Amortization of intangibles		10,987			5,579
Amortization of premium and discount on investments, net		(1,260	)		(801	)
Stock-based compensation to employees		5,404			5,401
Stock-based compensation to Board of Directors and Scientific Advisory Board		1,328			891
Change in earnout liability recorded for Adesis acquisition		469			—
Deferred income tax expense		7,408			4,826
Retirement plan expense		2,088			1,982
Decrease (increase) in assets:
Accounts receivable		(14,708	)		6,745
Inventory		(7,123	)		(3,719	)
Other current assets		(799	)		(3,174	)
Other assets		(10	)		(369	)
Increase (decrease) in liabilities:
Accounts payable and accrued expenses		(1,916	)		(5,625	)
Other current liabilities		(821	)		256
Deferred revenue		505			2,250
Net cash provided by operating activities		56,629			36,231
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment		(9,717	)		(2,162	)
Purchases of intangibles		—			(96,033	)
Purchases of investments		(255,224	)		(325,226	)
Proceeds from sale of investments		189,335			364,017
Net cash used in investing activities		(75,606	)		(59,404	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of common stock		349			202
Proceeds from the exercise of common stock options		30			182
Payment of withholding taxes related to stock-based compensation to employees		(8,501	)		(4,794	)
Cash dividends paid		(2,828	)		—
Net cash used in financing activities		(10,950	)		(4,410	)
DECREASE IN CASH AND CASH EQUIVALENTS		(29,927	)		(27,583	)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD		139,365			97,513
CASH AND CASH EQUIVALENTS, END OF PERIOD	$	109,438		$	69,930
The following non-cash activities occurred:
Unrealized gain (loss) on available-for-sale securities	$	140		$	(131	)
Common stock issued to Board of Directors and Scientific Advisory Board that was    earned and accrued for in a previous period		300			300
Common stock issued to employees that was earned and accrued for in a previous period		174			1,105
Net change in accounts payable and accrued expenses related to purchases of property and equipment		4,169			(120	)