eMagin Announces First Quarter 2015 Financial Results

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Revenues for first quarter 2015 were $6.0 million versus $6.3 million for first quarter last year, a decrease of approximately 5%. Product revenues (primarily display sales) totaled $5.1 million, about 18% less than first quarter last year. R&D contract revenues increased significantly to approximately $885,000 from approximately $19,000 same quarter last year. Display average selling price increased and the number of displays shipped decreased from last year. The increase in average selling price is a result of changes in product and customer mix.

“We are pleased the company turned a profit in first quarter and earned $0.9 million in EBITDA,” said Andrew Sculley, president and CEO. “Our improvement in financial results was due to lower manufacturing costs, better yield and significantly lower operating expenses.

“Also during the first quarter, we made progress in several key areas of the business that we believe position the company for continued OLED technology leadership and revenue growth,” Sculley reported. “Our work on developing production quantity ultra-high brightness, direct-patterned displays that eliminates the use of color filters progressed during the quarter. We recently invested in new direct patterning equipment for this effort. This work will result in manufacturable, full-color direct-patterned ultra-high brightness microdisplays that are about 20 times brighter than the typical smart phone display. These ultra-high brightness displays will help accelerate the penetration of our OLED microdisplays into new markets such as avionics and consumer headset applications.”

“eMagin continues to lead the industry in this effort for direct patterned OLED at microdisplay pixel sizes,” Sculley added. “In addition, although we encountered a delay during the quarter, our new, advanced HMD ‘head mounted display’ prototype was recently completed. 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 eMagin OLED microdisplays. We are currently demonstrating the headset to potential partners and customers.”

Gross margin for first quarter was 39% on gross profit of $2.4 million compared to a gross margin of 31% on gross profit of $1.9 million in first quarter last year. The increase in gross margin from last year was primarily due to lower manufacturing expenses, higher yield and a higher average selling price.

Operating expenses for first quarter decreased to $2.0 million from $3.5 million in first quarter last year. Operating profit for the first quarter increased $1.9 million to $0.3 million from a loss of $1.6 million in first quarter last year. Net income was $0.3 million or $0.01 per diluted share, versus a net loss of $1.6 million or $0.07 per diluted share in first quarter last year. Adjusted EBITDA improved $1.6 million to $0.9 million from a loss of $ 0.7 million in first quarter last year.

At March 31, 2015, the Company had approximately $6.7 million of cash, cash equivalents, and investments in certificates of deposit, compared to $6.0 million at Dec. 31, 2014. The increase in cash is due to more favorable operational results.

Based on current and forecasted market conditions, expected orders and current backlog, eMagin affirms its previous guidance that it expects revenues will total between $26 million to $29 million in 2015.