Universal Display Corp announced financial results for the first quarter ended March 31, 2016. The Company reported revenues of US$29.7 million, compared to revenues of US$31.2 million in the same quarter of 2015.
Material sales were US$24.3 million, down 9% compared to the first quarter of 2015, primarily due to a US$5.0 million decrease in host material sales. This decline was partially offset by an increase of US$2.5 million in emitter material sales. Royalty and license fees were US$5.3 million, up from US$4.4 million in the first quarter of 2015.
No revenue was recognised under the Samsung Display (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 recognise US$75 million in SDC licensing revenues for the full year.
The Company reported operating income of US$2.5 million, up from US$1.8 million for the first quarter of 2015. Operating expenses were US$27.2 million, compared to US$29.5 million in the same quarter of 2015. Cost of materials was US$5.1 million, compared to US$8.6 million in the first quarter of 2015, reflecting the decline in host material sales volume, which have less favourable margins than the Company's emitter materials.
The Company's balance sheet remained strong, with cash and cash equivalents and investments of US$395.7 million as of March 31, 2016.
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.
Sidney D. Rosenblatt, Executive Vice President and Chief Financial Officer of Universal Display, said, "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."
Sidney added, "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."