eMagin Corporation Announces 4Q, Full-Year 2021 Results

eMagin Corporation announced results for its fourth quarter and full-year 2021.

Revenues for 2021 were $26 million, down 12% from $29.4 million in 2020. Product revenues totaled $24.2 million, representing a 3% decrease from $25.0 million in 2020, primarily due to unexpected downtime of manufacturing equipment and resulting capacity constraints, resulting in approximately $1.1 million in late orders that did not ship during 2021.

Total revenues for the fourth quarter of 2021 were $7.2 million, a decrease of $0.5 million from $7.7 million in the prior-year period, and a sequential increase of $1.4 million from the third quarter of 2021.

“Thanks to our skilled workforce and their dedication to our mission of producing the world’s leading OLED microdisplays, 2021 was a year of great technical achievement for eMagin,” said eMagin CEO Andrew G. Sculley. “We ended the year with strong shipments of displays used in the Enhanced Night Vision Goggle–Binocular (ENVG-B) program, as we continue work on this advanced goggle to provide superior situational awareness, mobility, lethality and protection on the battlefield. The ENVG-B incorporates rapid target acqui-sition, which allows soldiers to fire around corners, and employs AR technology to deliver real-time video and target information through eMagin displays. The reception among soldiers in the field has been very positive, including praise for the ruggedness and relia-bility of the device.

“Our core military business is benefitting from a ramp-up in volume of our existing pro-grams and we are actively pursuing several others, as well as opportunities in defense markets for thermal weapons sights. This year, we expect to continue to ship displays un-der the ENVG-B program and to compete for other large U.S. military programs. In addition, we expect to capitalize on improved yields and capacity as we install new, advanced-production machinery purchased under our Defense Production Act Title III and IBAS funding grants.

“In 2022, we look forward to demonstrating our dPd technology to more consumer-oriented customers and continuing our business development efforts in the eye care, surgical and veterinary markets. At the same time, we expect to benefit from contributions of new engineering talent that joined eMagin in late 2021.”

Total gross margin for the fourth quarter was 24% on gross profit of $1.8 million, compared with gross margin of 16% on gross profit of $1.3 million in the prior-year period. The increase in gross margin was due to higher product revenues, increased production, and absorption of fixed cost into inventory, as well as improved yields during the fourth quarter of 2021.

In the fourth quarter of 2021, operating loss was $1.8 million, compared with $2.4 million in the prior-year period. Adjusted EBITDA for the fourth quarter was negative $0.8 mil-lion, compared with negative $1.7 million in the prior-year period.

As of the end of 2021, the company’s backlog of open orders scheduled for delivery over the next year was $13.8 million, which represented a 26% increase from the end of 2020.

In response to ongoing supply-chain, capacity and pricing pressures, the company contin-ues to monitor its wafer suppliers and is creating backplane designs suitable for alternative foundries to be able to optimize its allocations. In addition, the company has imple-mented product price increases for 2022.

Gross margin for 2021 was 18%, compared with 22% in 2020. Gross margin for 2021 was primarily impacted by decreases in contract revenue gross profit related to the timing of activities under the company’s agreement for development work with its tier-one con-sumer customer.

Operating loss for 2021 was $10 million, versus $6.9 million in 2020. Net loss for 2021 was $5.2 million, or $0.07 per share. This compares with a net loss of $11.4 million, or $0.19 per share, in 2020. Excluding the impact of the non-cash change in the fair value of the warrant liability for both years, net loss for 2021 was $0.12 per share, versus a net loss of $0.11 per share in 2020.

Adjusted EBITDA for the year was negative $4.1 million, compared with negative $4.4 million in the prior year.