eMagin Reports 4Q, 2013 Financial Results

eMagin Corporation announced fourth quarter and full year 2013 financial results and company highlights.

“Recent improvements to our manufacturing processes have resulted in greater up time on the new SNU OLED deposition tool and improving yield,” said Andrew Sculley, president and CEO. “As our manufacturing processes continue to improve during 2014, we expect to move essentially all of our commercial production to the SNU. This will allow us to increase our utilization of the Satella machine for its intended research purposes while better meeting our customers’ needs.

“We are optimistic that we will see a return to revenue growth this year as a result of the improvement in our operations,” Sculley added. “However, first quarter revenue will be similar to our fourth quarter 2013 revenue as we have temporarily stopped shipment of certain displays to three customers to address a possible bonding problem in a microdisplay that was brought to our attention. We are actively addressing this and hope to resolve the situation quickly.

“While we have been intensely focused on improving our manufacturing processes and will continue to focus there, we have not neglected technology advancement, including ultra-high brightness microdisplays and direct patterning,” he said. “Recently, we successfully tested our direct patterning technique and are on track to demonstrate a functional, direct patterned, ultra-high brightness VGA resolution display as well as even higher resolution functional, direct patterned, ultra-high brightness displays by the end of the second quarter. There is a large and growing market for high-brightness, high- performance microdisplays that can address even the most demanding near-to-eye applications. By continuing to invest in high performance, ultra-high brightness microdisplays and direct patterning, we intend to remain at the forefront of AMOLED microdisplay technologies.”

For the year ended Dec. 31, 2013, total revenues were $28.0 million versus $30.6 million for 2012. Product sales for 2013 increased $203,000, to $26.3 million, offset by a 62% decrease in contract revenue due to general reductions in funding for research and development projects including those for the U.S. Government. Gross profit for the year ended Dec. 31, 2013, totaled $8.4 million versus $14.9 million for 2012. Gross margin for 2013 was 30% versus 49% for 2012 due to higher production, labor and material costs.

The operating loss for 2013 was $5.2 million versus operating income of $1.6 million for 2012Adjusted EBITDA for 2013 was a loss of $1.7 million compared to earnings of $4.5 million in 2012.

During 2013, eMagin continued to fund its activities and the expansion of its business in military, industrial and consumer markets exclusively through cash generated from operations. At Dec. 31, 2013, the company had approximately $11.0 million of cash, cash equivalents and investments in certificates of deposit and corporate bonds, compared to $13.4 million at Dec. 31, 2012.

Revenues for the fourth quarter of 2013 were $6.1 million versus $8.3 million for the fourth quarter of 2012.

Pre-tax net loss for the fourth quarter of 2013 was $3.3 million. Adjusted EBITDA was a loss of $2.1 million compared to earnings of $1.6 million in the fourth quarter of 2012.