eMagin Corporation Announces 2Q 2021 Results

eMagin Corporation announced results for its quarter ended June 30, 2021.

Total revenues for the second quarter of 2021 were $6.3 million, compared with $7.7 million reported in the prior-year period. Total gross margin for the second quarter was 9% on gross profit of $0.6 million, compared with a gross margin of 26% on gross profit of $2 million in the prior-year period.

“We continue to make steady progress in developing our Direct Patterning Display (dPd) technology and remain on schedule to produce disruptive and industry-leading, high-brightness, high-resolution, and full-color prototypes this year,” said eMagin CEO Andrew G. Sculley. “We believe our improvements in the OLED architecture and dPd processes will meet the performance goals of our tier-one OEM customers using the high-resolution backplanes we have developed for them. As a further testament to our technological leadership, several new patents were issued and allowed in the second quarter, which are centered on improvements to the dPd process for improved yield and device performance.

“In addition to improvements in dPd materials and processes, we have advanced the state of the art with our XLE technology, which utilizes a white OLED emitter with color filters. This technology provides customers with a substantial gain in luminance and/or power savings for their applications,” Sculley reported. “We have already closed a major design win with a military customer to use these displays and are currently ramping production.

“In terms of revenue, our second-quarter results were mixed, with continued display revenue growth in our ENVG-B program, and increased shipments to medical, veterinary and hunting scope customers,” Sculley added. “However, our year-over-year decrease in total revenue reflected the impact of production issues and unexpected manufacturing tool downtime in the quarter. As we continue to bring on new equipment as part of our $39.1 million Title III and IBAS programs, we expect to resolve these issues. Our contract revenue decreased year over year mainly due to the timing of certain development work for a tier-one consumer customer. Overall, as of June 30, 2021, our sales backlog of open orders was $10.3 million, which grew to $16.0 million by July 31, 2021.”

Total revenue consists of both product revenue and contract revenue. Product revenues for the second quarter of 2021 were $5.7 million, a decrease of $0.5 million from product revenues of $6.3 million reported in the prior-year period. The year-over-year decrease in display revenue primarily resulted from unexpected downtime experienced with manufacturing equipment, which delayed certain display shipments into the third quarter. The decline was partially offset by higher sales to military, medical and veterinary customers.

Contract revenues were $0.5 million, compared with $1.4 million reported in the prior year, reflecting the timing of phases and milestones associated with the contract of a tier-one consumer company. eMagin is continuing to work on a proof of concept and anticipates ongoing contract revenue with this customer.

Operating expenses for the second quarter of 2021, including R&D expenses, were $3.5 million, compared with $3.3 million in the prior-year period. Operating loss for the second quarter of 2021 was $2.9 million, compared with an operating loss of $1.3 million in the prior-year period, reflecting the decreased gross profit and increased investments in R&D in the current year. Adjusted EBITDA for the second quarter of 2021 was negative $2 million, compared with negative $0.8 million in the prior-year period.