Universal Display Announces 4Q, Full Year 2011 Financial Results

Universal Display Corporation announced its results for the fourth quarter and year ended Dec. 31, 2011. For the fourth quarter of 2011, the company reported operating income of $3.6 million and net income of $5.7 million, or $0.12 per diluted share, on revenues of $18.7 million. This compares to an operating loss of $210,000 and a net loss of $5.3 million, or $0.14 per diluted share, on revenues of $10.8 million for the fourth quarter of 2010.

“Strong demand for both our proprietary materials and technology sustained the momentum in our business, led to another quarter of top and bottom line growth, and lifted the company to its first ever full year profit,” said Sidney D. Rosenblatt, executive vice president and chief financial officer of Universal Display. “Results continue to reflect increased penetration of our OLED materials and technology into the commercial display market, as well as growth in R&D efforts from a broad cross-section of manufacturers developing new applications for our OLED materials and technology. As revenues scale, our strong gross margins and operating leverage are driving an improved bottom line and delivering value for our shareholders. In addition, with OLEDs having eclipsed the inflection point, our operations are also now generating positive cash flow, which is adding to our overall financial strength. With manufacturers announcing plans to expand OLED productive capacity, to introduce a host of new products featuring OLED displays, and to develop OLED white lighting products, we believe the company is in a strong position to benefit from a market with significant growth opportunities.”

Revenues for the fourth quarter of 2011 were $18.7 million, up 73% compared to the fourth quarter 2010 revenues of $10.8 million. Material sales were $10.8 million for the quarter, up 47% compared to $7.4 million for the fourth quarter of 2010, primarily due to increased material sales under commercial agreements. Royalty and license fees were $5.4 million for the quarter, up 207% compared to $1.8 million for the fourth quarter of 2010, due to $5 million in license payments from a large customer during the quarter. Please note that revenue categories have been revised to better reflect the primary sources of the company’s revenue.

For the full year of 2011, the company reported revenues of $61.3 million, up 101% compared to revenues of $30.5 million for 2010. Material sales for 2011 were $37.4 million, up 117% compared to $17.3 million for 2010. Royalty and license fees for 2011 were $15.3 million, up 233% compared to $4.6 million for 2010. Technology development and support revenue was $8.5 million for 2011, down slightly compared to $8.7 million for 2010.

Driven by revenue growth and strong gross margins, operating income for 2011 rose to $5.7 million for the year, up nearly $16 million from an operating loss of $10.2 million for 2010. The company reported net income of $3.2 million, or $0.07 per diluted share, for the full year of 2011, compared to a net loss of $19.9 million, or $0.53 per diluted share, for 2010.

“The results achieved over this past year show that there is growing consumer demand for products featuring bright, beautiful AMOLED displays,” Rosenblatt concluded. “Universal Display is proud to have pioneered the materials and technology behind the industry’s most successful new displays. The company’s recent growth validates our business strategy and provides an indication of the pace and magnitude at which our proprietary PHOLED materials and technology are being adopted by the market. Our financial performance over this past year demonstrates how we have been able to leverage our industry leadership position to create value for the company’s shareholders.

“Over the longer term, we are encouraged by the increasing number of consumer electronics manufacturers that are designing OLED displays into their new products, especially larger-area displays. Lighting is another market with vast potential that OLED technology has yet to penetrate. For these reasons, we are committed to maintaining our industry leadership position by meeting the current materials and technology needs of our commercial customers, while at the same time supporting the research and new product development efforts of our many partners as they use OLEDs to open new markets and expand the industry’s potential in new and exciting directions.”