eMagin Announces 1Q 2014 Financial Results

eMagin Corporation announced financial results and corporate highlights for the first quarter ended March 31, 2014. Revenues for the first quarter of 2014 were $6.3 million versus $8.5 million for the first quarter of 2013 and $6.1 million for the fourth quarter of 2013.

Andrew G. Sculley, President and CEO, said. “During the first quarter of 2014, we made significant progress in three key areas of our business that we believe position the company for revenue growth,” Andrew G. Sculley, president and CEO, said. “These include improved manufacturing processes that resulted in our best quarter ever in terms of up-time of the new OLED deposition tool; strong and growing interest from domestic and international customers pertaining to our newest products, including our high-brightness/high-resolution products; as well as significant progress in a number of other technology areas, including next generation ultra-high brightness displays.

“Thanks to the extraordinary efforts of our teams, we successfully met the challenges associated with a previously disclosed stop order from three of our customers concerning a product issue,” Sculley added. “The stop order issues have been partially resolved, with shipments to one of the three customers having fully resumed in April 2014. Shipments to a second customer are expected to ramp to full volume in late June, and shipments to the third customer are expected to resume in late July. As a result of the improved status of the stop orders, improved manufacturing processes and demand for our state-of-the-art microdisplays, we anticipate higher average revenue per quarter during each of the remaining three quarters of 2014.”

The decline in first quarter 2014 revenues versus the year ago first quarter is attributable to fewer units shipped and a decrease in the average selling price due to product mix and a stop order from three customers regarding a product issue that has already been partially resolved.

Gross margin for the first quarter was 31% on gross profit of $1.9 million, compared to a gross margin of 44% on gross profit of $3.8 million in the same quarter last year. The decline in gross margin was due to a decrease in revenue, an increase in production costs and a lower average selling price.

Operating expenses for the first quarter of 2014 were $3.5 million, as compared to $3.4 million in the prior year period. Net loss for the first quarter of 2014 was $1.6 million or $0.07 per diluted share, versus net income of $205,000 or $0.01 per diluted share for the first quarter of 2013.

At March 31, 2014, the company had approximately $8.3 million of cash, cash equivalents, and investments in certificates of deposit and corporate bonds, compared to $11.0 million at Dec. 31, 2013.