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):  May 14, 2009

eMagin Corporation

(Exact name of registrant as specified in its charter)

Delaware	000-24757	56-1764501
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

10500 N.E. 8th Street, Suite 1400, Bellevue, WA 98004

(Address of principal executive offices and Zip Code)

Registrant's telephone number, including area code (425)-749-3600

Copies to:

Richard A. Friedman, Esq.

Sichenzia Ross Friedman Ference LLP

61 Broadway

New York, New York 10006

Phone: (212) 930-9700

Fax: (212) 930-9725

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 Instruction 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))

Item 2.02.  Results of Operations and Financial Condition.

On May 14, 2009, the Company announced its financial results for the three months ended March 31, 2009 and certain other information. A copy of the Company’s press release announcing these financial results and certain other information is attached hereto as Exhibit 99.1. 

 In accordance with General Instruction B.2 of Form 8-K, the information in this Current Report on Form 8-K, including Exhibit 99.1, shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liability of that section, and shall not be incorporated by reference into any registration statement or other document filed under the Act or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.

Item 9.01   Financial Statements and Exhibits.

(a)   Financial statements of business acquired.

Not applicable.

(b)   Pro forma financial information.

Not applicable.

(c)	Exhibits.
Exhibit Number		Description
99.1		Press Release of eMagin Corporation dated May 14, 2009

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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 hereunto duly authorized.

	eMagin Corporation
Date: May 14, 2009	By:	/s/Paul Campbell
		Paul Campbell
		Chief Financial Officer

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EXHIBIT INDEX

Exhibit Number	Description
99.1	Press Release of eMagin Corporation dated May 14, 2009

4

EX-99.1

eMagin Reports Record First Quarter Profits

Gross Profit of $2.5 million Up Seven-Fold on Total Revenues of $5.1 million

Third Consecutive Quarter of Positive and Growing Net Income

Higher Manufacturing Yields and Cost Savings Drive Improved Performance

BELLEVUE, Wash.--(BUSINESS WIRE)-- eMagin Corporation (OTCBB: EMAN), the leader in design and manufacture of OLED microdisplays for personal imaging technologies, issued financial results for its first quarter ending March 31, 2009.

"I am pleased to report that eMagin posted the highest first quarter revenues and profits in its history. Our gross profit increased to approximately $2.5 million compared to last year’s first quarter gross profit of $352,000 on a near doubling of revenue to $5.1 million and a significant, 35 percentage point improvement in gross margin from 13% to 48%. This quarter was also the fourth consecutive quarter we generated positive operating income and third consecutive quarter of positive net income. This sustained momentum is a direct result of our team’s focus on our core microdisplay manufacturing business and the progress we are making in sharing with our customers the advantages of our OLED technology,” commented Andrew Sculley, eMagin’s president and chief executive officer.

Continued Mr. Sculley, “I’m happy to add that eMagin recently solidified its relationship with two key employees who have contributed significantly to the recent turnaround at eMagin. Paul Campbell, who has overseen our financial turnaround in an interim capacity, now formally joins us as our CFO, and my former colleague from when I led Kodak’s OLED division, Dr. Amal Ghosh, has renewed his commitment to spearheading our research and development efforts.”

Quarterly Results

eMagin Corporation generated revenue of $5.1 million for the first quarter of 2009 on increased product sales and higher contract revenue, an increase of 93% over the equivalent period in 2008. Gross margin was 48% of revenue on gross profit of $2.5 million for the quarter compared to a gross margin of 13% on gross profit of $352,000 for the same period in 2008. The significant improvement in gross margins achieved over the prior year’s result was due to higher production volumes with better yields.

Operating expenses in the period declined to $1.9 million, a 24% reduction as compared to the result in the first quarter of 2008. Lower operating expenses reflected the economies associated with a greater focus on the core microdisplay business. A reduction in SG&A expenses by $278,000 was mostly attributable to the reduction of professional fees and personnel costs related to non-core business.

Operating income totaled $568,000 compared to a loss of $2.1 million in the same quarter of 2008. The improved performance mainly reflects higher product revenues and cost reductions. Net income for the first quarter of 2009 was $394,000 or $0.02 per diluted share versus a net loss of $2.7 million or ($0.21) per diluted share in the same period last year.

eMagin has been aggressive in improving its balance sheet by eliminating its long term debt and paying down higher cost lines of credit, thereby strengthening its financial standing in recent periods. The Company’s cash position of $2.4 million as of March 31, 2009, was not significantly different from the balance of $2.5 million as of December 31, 2008. The difference reflects cash from operations of almost $1.0 million offset by approximately $1.1 million which was used primarily for paying down a line of credit.

Outlook

“With a low debt burden and positive cash flow from operations, the Company is in a better position to fund its growth. We are pleased with the efficiency gains and revenue growth that the team has achieved to date,” noted Mr. Sculley.

Quarterly Report and Conference Call

Full results will be published in the company's 10Q report for the quarter ending March 31, 2009, to be filed on May 14, 2009 with the SEC. They will also be available via the Company’s website, www.emagin.com.

In conjunction with its first quarter 2009 financial results, eMagin will host a teleconference call for investors and analysts at 5:00 p.m. ET today, May 14, 2009. To access the call, investors should call 1-800-638-5495 and enter the passcode 13125704. A replay of the call will be available from today at 8p.m. until May 21, 2009. To access the replay, investors should dial 1-888-286-8010 and enter the passcode 28292176. The call will also be available as an archived audio webcast on the "Investors" section of eMagin's website, www.emagin.com for four weeks following the call.

About eMagin Corporation

A leader in OLED microdisplay technology and personal display systems, eMagin integrates high-resolution OLED microdisplays with magnifying optics to deliver virtual images comparable to large-screen computer and television displays in portable, low-power, lightweight personal displays. eMagin microdisplays provide near-eye imagery in a variety of products from military, industrial, medical and consumer OEMs. The company's own Z800 3DVisor provides 3D stereovision and headtracking for PC gaming, training and simulation, immersion therapy, and other applications. eMagin's microdisplay manufacturing and R&D operations are co-located with IBM on its campus in East Fishkill, New York. System design facilities and sales and marketing are located in Bellevue, Washington. More information about eMagin and its products is available at www.emagin.com.

Forward Looking Statements

This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, including those regarding eMagin Corporation's expectations, intentions, strategies and beliefs pertaining to future events or future financial performance. Actual events or results may differ materially from those in the forward-looking statements as a result of various important factors, including those described in the Company's most recent filings with the SEC. Although we believe that the expectations reflected in the forward-looking statements are reasonable, such statements should not be regarded as a representation by the Company, or any other person, that such forward-looking statements will be achieved. The business and operations of the Company are subject to substantial risks which increase the uncertainty inherent in forward-looking statements. We undertake no duty to update any of the forward-looking statements, whether as a result of new information, future events or otherwise. In light of the foregoing, readers are cautioned not to place undue reliance on such forward-looking statements.

eMAGIN CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except share data)

	March 31, 2009 (unaudited)			December 31, 2008
ASSETS
Current assets:
Cash and cash equivalents	$	2,329		$	2,404
Investments – held to maturity		97			97
Accounts receivable, net		2,950			3,643
Inventory		2,214			2,374
Prepaid expenses and other current assets		1,233			796
Total current assets		8,823			9,314
Equipment, furniture and leasehold improvements, net		391			381
Intangible assets, net		46			47
Deferred financing costs, net		212			362
Total assets	$	9,472		$	10,104
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	569		$	1,026
Accrued compensation		631			837
Other accrued expenses		1,152			804
Advance payments		649			694
Deferred revenue		120			164
Debt		682			1,691
Other current liabilities		917			798
Total current liabilities		4,720			6,014
Commitments and contingencies
Redeemable common stock:  522,500 redeemable shares		429			429
Shareholders’ equity:
Preferred stock, $.001 par value: authorized 10,000,000 shares:		—			—
Series B Convertible Preferred stock, (liquidation preference of $5,739,000) stated value $1,000 per share, $.001 par value:  10,000 shares designated and 5,739 issued		—			—
Common stock, $.001 par value: authorized 200,000,000 shares, issued and outstanding, 15,429,863 shares as of March 31, 2009 and 15,213,959 as of December 31, 2008, net of redeemable common stock		15			15
Additional paid-in capital		205,086			204,818
Accumulated deficit		(200,778	)		(201,172	)
Total shareholders’ equity		4,323			3,661
Total liabilities and shareholders’ equity	$	9,472		$	10,104

eMAGIN CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except share and per share data)

(unaudited)

	Three Months Ended March 31,
	2009			2008
Revenue:
Product revenue	$	4,356		$	2,462
Contract revenue		788			203
Total revenue, net		5,144			2,665
Cost of goods sold:
Product revenue		2,257			2,181
Contract revenue		428			132
Total cost of goods sold		2,685			2,313
Gross profit		2,459			352
Operating expenses:
Research and development		362			674
Selling, general and administrative		1,529			1,807
Total operating expenses		1,891			2,481
Income (loss) from operations		568			(2,129	)
Other income (expense):
Interest expense, net		(175	)		(631	)
Other income, net		1			86
Total other expense		(174	)		(545	)
Provision for income taxes		—			—
Net income (loss)	$	394		$	(2,674	)
Income (loss) per share, basic	$	0.02		$	(0.21	)
Income (loss) per share, diluted	$	0.02		$	(0.21	)
Weighted average number of shares outstanding:
Basic		15,860,517			12,620,900
Diluted		23,899,255			12,620,900

Contacts

eMagin Corporation

Investors:

Paul Campbell, 425-749-3622

pcampbell@emagin.com

or

Business Development:

Susan Jones, 425-749-3614

sjones@emagin.com