eMagin Corporation Announces 4Q, Full Year 2015 Financial Results

eMagin Corporation announced financial results and corporate highlights for the fourth quarter and full year ended Dec. 31, 2015.
 
“I am pleased to say that we exited 2015 with momentum on several fronts,” president and CEO Andrew G. Sculley said. “In late December, we completed a strategic licensing deal in the commercial sector for our novel headset technology, providing significant validation of both our market leading 2K x 2K microdisplay technology and its broad commercialization potential in the virtual reality (“VR”) market. Our leading technology was again validated by our military customers with many new design wins in 2015, including 6 of our top 10 new bookings being brand new projects. Further, we strengthened our balance sheet in December with a $6 million equity raise. Finally, we ended 2015 with revenue above the guidance we provided in our third quarter earnings call.
 
Revenues for 2015 were $25.1 million versus $25.7 million for 2014, a decrease of 2.3%. Product revenues (primarily display sales) totaled $20.9 million, about 13.1% less than in 2014. During the year, eMagin saw customers shift some of their focus from existing to next generation programs. While this provided some headwind to product sales, eMagin also witnessed expansion in R&D revenue, which totaled $4.2 million, a 155.7% increase from $1.7 million in 2014.
 
eMagin shipped fewer displays in 2015 in comparison to 2014, but at a higher average selling price, reflecting the shift in demand to our more advanced, higher priced products.
 
Gross margin for 2015 was 28% on gross profit of $7.0 million compared to a gross margin of 29% on gross profit of $7.4 million in 2014.
 
Operating loss for 2015 decreased to $4.1 million from $5.3 million in 2014. Net loss was $4.1 or $0.16 per diluted share, versus a net loss of $5.3 million or $0.22 per diluted share for 2014.
 
Revenues for the fourth quarter of 2015 were $6.7 million, essentially flat with fourth quarter of 2014. Product revenues (primarily display sales) totaled $5.7 million, 1.3% more than fourth quarter last year. R&D contract revenues totaled approximately $1.0 million, in line with fourth quarter last year. Similar to the annual comparison noted above, the fewer displays sold during the fourth quarter 2015 were more than offset by a higher average selling price.
Gross margin for the fourth quarter was 14% on gross profit of $0.9 million compared to a gross margin of 23% on a gross margin of $1.5 million in the same quarter last year. Excluding an approximate $1.2 million one-time inventory write-down, the gross margin in the fourth quarter 2015 would have been 31%.
 
Operating loss for the fourth quarter increased to $2.1 million from $1.6 million in the fourth quarter last year. Net loss was $2.1 million or $0.08 per diluted share, versus a net loss of $1.6 million or $0.07 per diluted share for the fourth quarter last year.
 
At Dec. 31, 2015, the company had approximately $9.3 million of cash and cash equivalents compared to $6.0 million of cash, cash equivalents and investments in certificates of deposit at Dec. 31, 2014. At Dec. 31, 2015, the Company had no outstanding debt.
 
“Entering 2016, we are strategically focused on supporting our military business and advancing our presence in the consumer marketplace through our AR and VR technology while enhancing our technology and maintaining a strong balance sheet,” continued Sculley.
 
“As we look ahead we are encouraged by several factors, including growth in the US Department of Defense budget for 2016 and 2017 after years of flat to down spending. This growth, combined with continued evolution of our technology, positions us well in the government markets for both better volumes on existing contracts and the potential for new opportunities.
 
“In our commercial business, we are encouraged by the level of interest from potential well-recognized entities with whom we are in conversation. In concert with these discussions, we are actively meeting with potential partners with high volume manufacturing capability to prepare us to meet expected demand from commercial applications of our displays,” concluded Sculley.