eMagin Announces 1Q 2013 Financial Results, Reports Record Product Revenues

eMagin Corporation announced financial results for the first quarter ended March 31, 2013.

“Demand for our products from domestic and international customers remains strong across our market segments and interest in our new Digital SVGA, XGA, VGA displays and high brightness OLED technology is expanding rapidly,” said Andrew G. Sculley, president and CEO. “With industry leading AMOLED microdisplay technology and increasing domestic and international markets, we believe we are well-positioned for continued growth.

“During the first quarter, we continued to operate both the Satella deposition tool and the new SNU deposition tool,” Mr. Sculley added. “We will continue to operate both OLED deposition tools while we optimize the new SNU tool, and bring it to its full capabilities through additional process and procedural enhancements that will improve volume and yield. The new SNU tool is a unique and highly complex system and, like any one-of-a-kind system of such complexity, it requires many hours of operation to identify and fine-tune sub-systems or processes to achieve optimum output specifications. Even as we are optimizing the new tool, we are making other manufacturing improvements, including the purchase of other new tools needed for higher volume production and installation of the MES system, a software platform to enable product traceability and precise manufacturing controls, which will be essential as we ramp up volume production.”

Revenues for the first quarter rose 39% to $8.5 million versus $6.1 million for the first quarter of 2012. The growth in revenues is primarily attributable to increased display sales, which were higher in the first quarter than any other quarter in eMagin’s history, and an increase in average selling price due to the mix of products sold.

Gross margin for the first quarter was 44% on gross profit of $3.8 million compared to a gross margin of 44% on gross profit of $2.7 million in the same quarter last year. The cost per display increased from the prior year due to higher manufacturing costs associated with the new SNU OLED deposition tool. It is expected that the cost will decrease as the new tool is further optimized.

Net income for the first quarter of 2013 was $205,000 or $0.01 per diluted share versus a net loss of $452,000 or $(0.02) per diluted share for the first quarter of 2012. Adjusted EBITDA for the first quarter increased to $1.2 million versus $44,000 for the year-ago quarter.

Based on current and expected market conditions, expected orders, and current backlog, eMagin affirms its 2013 revenue guidance range of $34 million to $39 million.