Universal Display Announces 2Q, 1H 2014 Financial Results

Universal Display Corporation reported financial results for the second quarter ended June 30, 2014.

For the second quarter of 2014, the company reported net income of $20.4 million, or $0.44 per diluted share, on revenues of $64.1 million. For the second quarter of 2013, the company reported net income of $15.4 million, or $0.33 per diluted share, on revenues of $49.4 million.

“We are pleased to report another record quarter of strong revenues and operating profit. The continued broadening array of OLED consumer products such as smartphones, tablets and wearables, coupled with Universal Display’s leadership in phosphorescent OLED materials and technologies, drove our top-line and bottom-line growth,” said Sidney D. Rosenblatt, executive vice president and CFO of Universal Display.

“From commitments to OLED TV and flexible display production to our expanding customer base, OLED activity continues to grow,” Rosenblatt added. “Recently, we announced an extended evaluation agreement with BOE Technology, China’s largest panel maker, and a commercial materials agreement with Philips, a pioneer of lighting development and production. Looking forward, we continue to be excited by what we believe to be substantial growth opportunities in the evolving OLED display and lighting markets.”

Revenues for the second quarter of 2014 were $64.1 million, a 30% increase compared to revenues of $49.4 million in the same quarter of 2013. Growth in second quarter revenues was led by a 32% increase in material sales, which rose to $35.9 million, up from $27.1 million in the second quarter of 2013. This growth reflected solid volume growth in sales of red emitter, green emitter and green host materials.

Royalty and license fees were $28.1 million in the second quarter of 2014, up from $21.2 million in the same quarter of 2013. The company recognized $25 million in Samsung Display Co., Ltd. (SDC) licensing revenue in the second quarter of 2014, up from $20 million in the same quarter of 2013.

Operating expenses for the second quarter of 2014 were $35.3 million, compared to $27.6 million in the same quarter of 2013. Cost of materials for the quarter was $12.0 million, compared to $8.3 million in the second quarter of 2013.

The company reported operating income of $28.8 million for the second quarter of 2014, compared to $21.7 million for the second quarter of 2013. The Company’s balance sheet remained strong, with cash and cash equivalents and short-term investments of $291 million as of June 30, 2014. Operating cash flow for the second quarter of 2014 was $32.3 million, an increase of 22% compared to $26.4 million for the second quarter of 2013.

On June 2, 2014, the company’s Board of Directors approved a stock repurchase program authorizing the Company to purchase shares of its common stock up to a total purchase price of $50 million over the subsequent 12 months. During the three months ended June 30, 2014, the company purchased 234,800 shares at a cost of approximately $7.0 million.

Revenues for the first six months of 2014 were $102.0 million, a 58% increase compared to $64.3 million in the first half of 2013. Material sales in the first half of the year were $71.3 million, an increase of 79% compared to material sales of $39.9 million in the first half of 2013. Operating income in the first half of 2014 was $35.5 million, or 35% of revenues, compared to operating income of $14.6 million, or 23% of revenues, in the first half of 2013. For the first half of 2014, we reported net income of $24.4 million, or $0.52 per diluted share, increases of 130% and 126%, respectively, compared to net income of $10.6 million, or $0.23 per diluted share, in the same period of 2013.

Although the OLED industry is still at a stage where many variables can have a material impact on its growth, the company reaffirms expectations for 2014 revenues to reach the high end of its $190 million to $205 million guidance range.