eMagin Corp. has announced financial results and corporate highlights for the fourth quarter and full year ended December 31, 2016.
Revenues for the fourth quarter of 2016 were US$4.6 million as compared to US$6.7 million in the fourth quarter of 2015.
Product revenues totalled US$3.7 million versus US$5.7 million in the fourth quarter last year. This was primarily due to lower volumes from maturing military programs. R&D contract revenues totaled approximately US$905 thousand, in line with the US$965 thousand reported in the prior year quarter.
Overall gross margin for the fourth quarter was 11% on gross profit of US$490 thousand compared to a gross margin of 13% on gross profit of US$904 thousand in the fourth quarter of 2015 due to the impact of lower production volumes on the high fixed cost nature of our manufacturing processes.
Operating expenses for the fourth quarter of 2016, including R&D expenses, increased to US$4.3 million, from US$3.0 million in the fourth quarter of 2015. Fourth quarter operating expenses reflect higher spending on the development and marketing of our consumer products and a lower allocation of our R&D expense to R&D contracts.
Operating loss for the fourth quarter was US$3.8 million versus $2.1 million in the fourth quarter last year. Net loss for the fourth quarter of 2016 increased to US$3.5 million, or US$0.11 per diluted share compared to net loss of $2.1 million, or $0.08 in the fourth quarter of 2015.
As of December 31, 2016, the Company had approximately US$5.2 million of cash and cash equivalents compared to US$9.3 million of cash and cash equivalents as of December 31, 2015.
The decrease in the cash balance was due to operating losses from the lower volumes, R&D investment and inventory build-up for the launch of our night vision products.
In December, the Company entered into a working capital facility allowing it to borrow up to US$5 million against its eligible accounts receivable and inventory. At December 31, 2016, there was US$1.9 million outstanding on the facility.
The Company also put in place a new credit facility for US$5 million with its largest shareholder in March of 2017 to support its commercialization efforts in fiscal 2017.
| eMagin reports financial results for Q4 and full year 2016 (US$ ,000) |
2016 Q4 |
2015 Q4 |
2016 12 months |
2015 12 months |
|---|---|---|---|---|
| Revenue - Products | 3,653 | 5,749 | 17,265 | 20,912 |
| Revenue - Contract | 905 | 965 | 3,132 | 4,320 |
| Revenue - Total | 4,558 | 6,714 | 21,397 | 25,142 |
| Gross profit | 490 | 904 | 6,442 | 6,978 |
| Operating expenses | 3,007 | 3,101 | 11,040 | 12,636 |
| Net (loss) Income | (3,468) | (2,125) | (8,049) | (4,105) |
| Net result per share - basic($) | (0.11) | (0.08) | (0.27) | (0.16) |
Andrew G. Sculley, President and CEO, said:
- I am pleased to announce that we recently signed an additional, multi-million dollar agreement with another major Tier 1 consumer electronics company
- We now have in place multiple agreements with commercial partners for next generation prototype products for consumer HMD’s and expect a considerable boost to 2017 revenue from our commercial efforts, including approximately US$1.5 million that we expect to recognize in the first quarter of 2017
- As we continue to enhance our technological advantage through direct patterning, I believe that we are gaining the recognition we deserve for having the most comprehensive suite of high performance OLED microdisplays in the market today
Outlook
Andrew G. Sculley, President and CEO, said:
- We continue to pursue our milestone approach to driving shareholder value
- We believe eMagin is the only company whose products can meet the low power, high brightness and resolution requirements for high-pixel density displays being demanded both for next generation VR/AR Consumer HMDs as well as today’s commercial and military applications
- The Company remains focused on the following objectives to drive shareholder value
- Advance our product development discussions with major consumer electronics companies to incorporate OLED technology into their next generation products
- Advance discussions with high volume production partners to utilize our leading production and process technologies
- Further penetrate high growth commercial/industrial markets including medical devices and other vertical markets where integration of our OLED microdisplays and optics technology advances product development and adoption
- Expand our presence in existing and future major military programs and overall customer count in domestic and international military markets
- Launch new products focused on the consumer market which offer high performance and broad appeal at an attractive price
- Continue our progress in manufacturing improvements including yield enhancement and production capacity expansion
- We made great strides in 2016 toward these objectives and expect to report several significant developments in 2017, especially with respect to our commercial efforts