Universal Display Announces 1Q 2012 Financial Results

Universal Display Corporation announced its results for the first quarter of 2012.

For the first quarter of 2012, the company reported an operating loss of $1.6 million and a net loss of $1.2 million, or ($0.03) per diluted share, on revenues of $12.6 million. This compares to an operating loss of $2.7 million and a net loss of $11.9 million, or ($0.31) per diluted share, on revenues of $9.6 million for the first quarter of 2011. The net loss for the first quarter of 2011 included an $8.9 million loss on stock warrant liability. Operating expenses for the first quarter of 2012 were $14.2 million, compared to $12.3 million in the first quarter of 2011.

Results in the first quarter do not include the recognition of any revenue under a licensing agreement with Samsung Mobile Display (SMD), under which SMD is obligated to make payments to the company of $15 million in each of the second and fourth quarters of this year. Had the company recognized these payments on a pro rata quarterly basis over the year, it would have resulted in an additional $7.5 million of royalty and license fees revenue in the first quarter. The company will incur a license fee of 3% payable to its university partners, and 16.5% payable as tax on sales to South Korea in connection with the SMD licensing revenue.

“Results in the quarter continue to reflect the growing demand for our proprietary materials and technology consistent with the steady growth in the OLED market,” said Sidney D. Rosenblatt, executive vice president and chief financial officer of Universal Display. “Not surprising, given the growth in the OLED market, material sales under commercial agreements more than doubled this quarter compared to the first quarter of 2011, reflecting the strong correlation between material sales under commercial agreements and the size of the OLED market. Developments in both the display and lighting markets around the world seem to be accelerating. Our goal is to continually improve the performance of OLEDs through the advancement of our industry leading technology and materials to both support and encourage a widening adoption of OLEDs for an ever increasing variety of applications.”

Revenues for the first quarter of 2012 were $12.6 million, up 31% compared to first quarter 2011 revenues of $9.6 million, led by a 132% increase in material sales to $10.6 million compared to $4.5 million for the first quarter of 2011. Increased material sales primarily reflect increased sales under commercial agreements to a large customer.

Royalty and license fees for the quarter were $422,000, compared to $2.7 million for the first quarter of 2011. Royalty and license fees for this quarter were lower in large part as the result of the new arrangement with SMD, which provides for the payment of $15 million in the second and fourth quarter of this fiscal year. Revenues in the fourth quarter of 2011 included $5 million in license payments from SMD under the new arrangement, which was before the new arrangement increased SMD’s annual license payment obligation to the higher 2012 level.

“While material sales under commercial agreements in the quarter doubled due to the growth of products in the market utilizing OLED technology, material sales under development agreements in the quarter also doubled from the same period last year as we grew the number of display, lighting and similar companies that are employing our materials in the development of the OLED-powered products and applications of the future,” Rosenblatt concluded. “We’re also sustaining our own research and development efforts and maintaining our industry-leading position through the development of new compounds and technologies as well as through the filing of new patents and the tenacious defense of our established intellectual property. As manufacturers exhibit a vast and increasing variety of dazzling new OLED-powered products, from flexible displays to OLED televisions to white lighting, Universal Display’s goal remains to be at the forefront of the pioneers that are transforming the display and lighting markets.”