Universal Display Announces 3Q 2013 Financial Results

Universal Display Corporation (OLED) reported its financial results today for the quarter and nine-month period, ended Sept.30, 2013.

For the third quarter of 2013, the company reported net income of $5.5 million, or $0.12 per diluted share, on revenues of $32.8 million. For the third quarter of 2012, the company reported a net loss of $5.5 million, or $(0.12) per diluted share, on revenues of $12.5 million.

“Universal Display delivered outstanding third quarter results that were directly attributable to the commercial adoption of its red emitter, green emitter and green host materials. The use of these industry leading materials in a number of new products resulted in record material sales in the quarter,” said Sidney D. Rosenblatt, executive vice president and chief financial officer of Universal Display. “Looking forward, we believe the OLED industry is poised for robust growth as product roadmaps are further developed, new manufacturing capacity ramps and new display and lighting manufacturers enter the market. The strength of our phosphorescent OLED core competency, coupled with an expanding IP and materials technology portfolio, leaves us well-positioned to continue to offer industry leading material and technology solutions for this evolving and growing market.”

Revenues for the third quarter of 2013 were $32.8 million compared to revenues of $12.5 million in the same quarter of 2012. Growth in third quarter revenues was led by a 176% increase in material sales, which rose to $30.3 million, up from $11.0 million in the third quarter of 2012, reflecting strong volume growth in sales of green emitter and host materials. Royalty and license fees were $1.5 million in the third quarter of 2013 compared to $0.4 million in the same quarter of 2012. Technology development and support revenue was $1.1 million for both the third quarter of 2013 and 2012.

No revenue was recognized under the Samsung Display Co., Ltd. (SDC) licensing agreement in the third quarter, as SDC is obligated to make licensing payments in the second and fourth quarters of the year. For 2013, the company recognized $20 million in SDC licensing revenue in the second quarter and expects to recognize another $20 million in the fourth quarter, for a total of $40 million in SDC licensing revenues for the year.

Operating expenses for the third quarter of 2013 were $28.6 million compared to $18.6 million in the same quarter of 2012. Cost of materials for the third quarter were $9.8 million compared to $1.1 million in the third quarter of 2012, reflecting an increase in the quantity of material shipped and changes in product mix.

The company reported operating income of $4.2 million for the third quarter of 2013, compared to operating loss of $6.1 million for the third quarter of 2012.

The company’s balance sheet remained strong, with cash and cash equivalents and short-term investments of $248.3 million as of September 30, 2013.

Revenues for the first nine months of 2013 were $97.2 million, a 76% increase from the $55.1 million generated in the first nine months of 2012. Material sales in the first nine months of the year were $70.2 million, a 104% increase compared to material sales of $34.4 million in the first nine months of 2012. Operating income in the first nine months of 2013 was $18.8 million, more than tripling the $5.3 million of operating income in the first nine months of 2012.

For the first nine months of 2013, the company reported net income of $16.2 million, or $0.35 per diluted share, compared to $4.3 million, or $0.09 per diluted share, in the same period in 2012. In the first nine months of the year, the company generated $22.6 million in operating cash flow, a 214% increase from the $7.2 million of operating cash flow in the first nine of months of 2012.

Although the OLED industry is still at a stage where many variables can have a material impact on its growth, the company now has better visibility into its potential future financial performance for this year and expects 2013 revenues to be approximately $142-$144 million, compared to the prior guidance of reaching the high end of its $110-$125 million range.