eMagin Announces 4Q, Full Year 2014 Financial Results

eMagin Corporation announced financial results and corporate highlights for the fourth quarter and full year ended Dec. 31, 2014.
 
Revenues for 2014 were $25.7 million versus $28.0 million for 2013, a decrease of approximately 8%. Product revenues (primarily display sales) totaled $24.1 million, about 9% less than in 2013. R&D contract revenues totaled $1.7 million, approximately the same as 2013. Display average selling price increased and the number of displays shipped decreased from last year. The increases in average selling price were a result of changes in product and customer mix.
 
Gross margin for 2014 was 29% on gross profit of $7.4 million compared to a gross margin of 30% on gross profit of 8.4 million in 2013. The decrease in gross margin from last year was primarily due to lower revenues and a higher cost per display, partially offset by a higher average selling price.
 
“First, we are pleased fourth quarter revenues increased 18% over third quarter, and 10% over fourth quarter last year as our recent R&D contract awards began producing significant revenues,” said Andrew G. Sculley, president and CEO. “Historically, these government and non-government awards have been instrumental in fueling our growth and we are excited about the resurgence of this activity.
 
“Second, we made significant progress in key areas during the fourth quarter,” Sculley noted. “We completed much of the work in developing our new headset prototype. The headset features 2,000 by 2,000 pixel resolution, a superior form factor, a wide 100+ degree field of view and has all the outstanding advantages of an eMagin OLED microdisplay. We are currently setting up demonstrations of the headset to interested parties. Also, we continued making great strides toward production of ultra-high brightness full color OLED microdisplays above 10,000 nits.
 
“We recently invested in new direct patterning equipment for this effort,” Sculley added. “These ultra-high brightness displays will help to accelerate the penetration of our OLED microdisplays into new markets such as avionics and consumer headset applications. We are demonstrating these ultra-high brightness direct patterned displays to our customers. eMagin is leading the industry in this effort for direct patterned OLED at microdisplay pixel sizes.”
 
Operating expenses for 2014 decreased to $12.6 million from $13.6 million in 2013. Operating loss for 2014 increased slightly to $5.3 million from $5.2 million in 2013. Net loss was $5.3 million or $0.22 per diluted share, versus a net loss of $14.1 million or $0.60 per diluted share for 2013.
 
Revenues for the fourth quarter of 2014 increased 10% to $6.7 million versus $6.1 million for the fourth quarter of 2013. Product revenues (primarily display sales) totaled $5.7 million, 1% more than fourth quarter last year. R&D contract revenues totaled $1.0 million, an increase of 115% over fourth quarter last year. Display average selling price increased and displays shipped decreased from fourth quarter last year. The increase in average selling price was a result of changes in product and customer mix. The increase in R&D contract revenue is due to the new contract awards received in the latter half of 2014. The largest new award was the Defense-wide Manufacturing Science & Technology (DMS&T, also known as Mantech) program.
 
Gross margin for the fourth quarter was 23% on gross profit of $1.5 million compared to a gross margin of 1% in the same quarter last year. The increase in gross margin from fourth quarter last year was primarily due to higher display average selling price and lower production costs.
 
Operating loss for the fourth quarter decreased to $1.6 million from $3.3 million in fourth quarter last year. Net loss was$1.6 million or $0.07 per diluted share, versus a net loss of $8.7 million or $0.37 per diluted share for the fourth quarter last year.
 
At Dec. 31, 2014, the company had approximately $6.0 million of cash, cash equivalents, and investments in certificates of deposit, compared to $6.0 million at Sept. 30, 2014.