Universal Display announces third quarter 2016 financial results

Third quarter 2016 results were in line with our expectations for the year, revenue growth expectations have been delayed until 2017

6 Nov 2016 | Editor

Universal Display Corp. has reported financial results for the third quarter ended September 30, 2016. Revenues for the third quarter of 2016 were US$30.2 million, compared to revenues of US$39.4 million for the same quarter of 2015. Material sales were US$23.5 million, compared to US$34.1 million in the third quarter of 2015, reflecting an US$8.4 million decline in emitter sales, principally due to increased customer production efficiencies and product mix, and a US$2.3 million decline in host material sales. Royalty and license fees were US$5.2 million, unchanged from the third quarter of 2015. Technology development and support revenues were US$1.5 million, compared to US$0.1 million in the third quarter of 2015. The increase was due to customer sales from the recently acquired Adesis subsidiary.

Universal Display reports financial results for Q3 2016 (US$ ,000)	2016 Q3	2015 Q3	2016 9M	2015 9M
Revenue - Materials	23,465	34,128	70,084	85,270
Revenue - Royalty and licences	5,209	5,224	52,569	43,332
Revenue - Technology dev and support	1,540	67	1,656	132
Revenue - Total	30,214	39,419	124,309	128,734
Operating expenses	33,217	31,041	90,655	123,424
Net (loss) Income	(1,500)	7,047	22,251	(3,410)
Net result per share - basic($)	(0.03)	0.15	0.47	(0.07)

Sidney D. Rosenblatt, Executive Vice President and Chief Financial Officer of Universal Display, said, "Our third quarter 2016 results were in line with our expectations for the year. As we noted last quarter, while our revenue growth expectations have been delayed until 2017, this year has continued to be a meaningful year to build and prepare for that future growth. Leading panel makers are building capacity for the next wave of high volume OLED production to begin ramping next year, OEMs are building new OLED product roadmaps, and we are building our infrastructure to meet the growing needs of our expanding customer base."

Sidney continued, "As we anticipate resuming our growth trajectory in 2017, we continue to build up our core competencies. The display and lighting industries are evolving, and we believe we are well positioned to continue to play a pivotal role in the OLED market’s future. We have expanded our global footprint, increased our headcount to approximately 200 employees, bolstered our IP portfolio to over 4,200 issued and pending patents worldwide, and continue to broaden our rich portfolio of proprietary OLED technologies and phosphorescent materials. These investments, in addition to our other strategic initiatives, buttress our committed path of continuous innovation and next-generation solutions, our strong leadership position in the OLED ecosystem, and our confidence in the long-term growth path of OLEDs."

Selected Highlights

For the third quarter of 2016:

Technology development and support revenues were US$1.5 million, compared to US$0.1 million in the third quarter of 2015. The increase was due to customer sales from the recently acquired Adesis subsidiary.
The Company's balance sheet remained strong, with cash and cash equivalents and investments of US$301.1 million as of September 30, 2016
During the third quarter, the Company added US$32.0 million in intangible assets in the form of customer relationships, internally developed IP, trade names and certain other assets with the Adesis business acquisition
During the third quarter, the Company generated US$4.1 million in operating cash flow.

For the first nine months of 2016:

Operating cash flow for the first nine months of 2016 was US$40.3 million, compared to US$80.6 million for the first nine months of 2015
Operating cash flow for the first nine months of 2015 included an upfront U$42.0 million license and royalty payment

Guidance

With the OLED industry still at a stage where many variables can have a material impact on its growth, Universal Display continues to expect its 2016 revenues to be in the range of US$190 million to US$200 million.

About Universal Display Corp

Universal Display Corporation 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.

Based in Ewing, New Jersey, with international offices in Ireland, South Korea, China, 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., Tianma Micro-electronics and Tohoku Pioneer Corporation.

Source: Universal Display Corp