11.07.16
Universal Display reported financial results for the third quarter and nine months ended Sept. 30, 2016.
For the third quarter of 2016, the company reported a net loss of $1.5 million, or $0.03 per diluted share, on revenues of $30.2 million. For the third quarter of 2015, the company reported net income of $7.0 million, or $0.15 per diluted share, on revenues of $39.4 million.
“Our third quarter 2016 results were in line with our expectations for the year. As we noted last quarter, while our revenue growth expectations have been delayed until 2017, this year has continued to be a meaningful year to build and prepare for that future growth. Leading panel makers are building capacity for the next wave of high volume OLED production to begin ramping next year, OEMs are building new OLED product roadmaps, and we are building our infrastructure to meet the growing needs of our expanding customer base,” said Sidney Rosenblatt, EVP and CFO of Universal Display.
“As we anticipate resuming our growth trajectory in 2017, we continue to build up our core competencies,” Rosenblatt continued. “The display and lighting industries are evolving, and we believe we are well positioned to continue to play a pivotal role in the OLED market’s future. We have expanded our global footprint, increased our headcount to approximately 200 employees, bolstered our IP portfolio to over 4,200 issued and pending patents worldwide, and continue to broaden our rich portfolio of proprietary OLED technologies and phosphorescent materials. These investments, in addition to our other strategic initiatives, buttress our committed path of continuous innovation and next-generation solutions, our strong leadership position in the OLED ecosystem, and our confidence in the long-term growth path of OLEDs.”
The company reported revenues of $30.2 million, compared to revenues of $39.4 million for the same quarter of 2015. Material sales were $23.5 million, compared to $34.1 million in the third quarter of 2015, reflecting an $8.4 million decline in emitter sales, principally due to increased customer production efficiencies and product mix, and a $2.3 million decline in host material sales. Royalty and license fees were $5.2 million, unchanged from the third quarter of 2015. Technology development and support revenues were $1.5 million, compared to $0.1 million in the third quarter of 2015. The increase was due to customer sales from the recently acquired Adesis subsidiary.
The company reported an operating loss of $3.0 million in the third quarter of 2016, compared to operating income of $8.4 million for the third quarter of 2015. Operating expenses were $33.2 million, compared to $31.0 million in the third quarter of 2015, and cost of materials was $6.5 million, compared to $7.2 million in the third quarter of 2015. The increase in operating expenses was mainly due to an increase of $2.7 million in amortization charges associated with the acquisition of the BASF OLED patents and the Adesis business acquisition.
The company’s balance sheet remained strong, with cash and cash equivalents and investments of $301.1 million as of Sept. 30, 2016. During the third quarter, the company added $32.0 million in intangible assets in the form of customer relationships, internally developed IP, trade names and certain other assets with the Adesis business acquisition. During the third quarter, the company generated $4.1 million in operating cash flow.
The company reported revenues of $124.3 million during the nine months ended Sept. 30, 2016, compared to revenues of $128.7 million for the same period of 2015. Material sales were $70.1 million, compared to $85.3 million in the first nine months of 2015, primarily due to a $9.3 million decline in host sales. Royalty and license fees were $52.6 million, up from $43.3 million in the first nine months of 2015. Technology development and support revenues were $1.7 million, compared to $0.1 million for the first nine months of 2015, the increase primarily due to customer sales from the recently acquired Adesis subsidiary.
The company reported operating income of $33.7 million for the first nine months of 2016, compared to operating income of $5.3 million for the first nine months of 2015. Excluding the inventory write-down of $33.0 million taken in the second quarter of 2015, adjusted operating income was $38.3 million for the first nine months of 2015. For the first nine months of 2016, the company reported net income of $22.3 million, or $0.47 per diluted share, compared to a net loss of $3.4 million, or $0.07 per diluted share, for the same period of 2015. Excluding the inventory write-down, and the associated $3.0 million reduction of income tax expense, adjusted net income was $26.6 million, or $0.57 per diluted share, for the first nine months of 2015.
Operating cash flow for the first nine months of 2016 was $40.3 million, compared to $80.6 million for the first nine months of 2015. Operating cash flow for the first nine months of 2015 included an upfront $42.0 million license and royalty payment.
With the OLED industry still at a stage where many variables can have a material impact on its growth, Universal Display continues to expect its 2016 revenues to be in the range of $190 million to $200 million.
For the third quarter of 2016, the company reported a net loss of $1.5 million, or $0.03 per diluted share, on revenues of $30.2 million. For the third quarter of 2015, the company reported net income of $7.0 million, or $0.15 per diluted share, on revenues of $39.4 million.
“Our third quarter 2016 results were in line with our expectations for the year. As we noted last quarter, while our revenue growth expectations have been delayed until 2017, this year has continued to be a meaningful year to build and prepare for that future growth. Leading panel makers are building capacity for the next wave of high volume OLED production to begin ramping next year, OEMs are building new OLED product roadmaps, and we are building our infrastructure to meet the growing needs of our expanding customer base,” said Sidney Rosenblatt, EVP and CFO of Universal Display.
“As we anticipate resuming our growth trajectory in 2017, we continue to build up our core competencies,” Rosenblatt continued. “The display and lighting industries are evolving, and we believe we are well positioned to continue to play a pivotal role in the OLED market’s future. We have expanded our global footprint, increased our headcount to approximately 200 employees, bolstered our IP portfolio to over 4,200 issued and pending patents worldwide, and continue to broaden our rich portfolio of proprietary OLED technologies and phosphorescent materials. These investments, in addition to our other strategic initiatives, buttress our committed path of continuous innovation and next-generation solutions, our strong leadership position in the OLED ecosystem, and our confidence in the long-term growth path of OLEDs.”
The company reported revenues of $30.2 million, compared to revenues of $39.4 million for the same quarter of 2015. Material sales were $23.5 million, compared to $34.1 million in the third quarter of 2015, reflecting an $8.4 million decline in emitter sales, principally due to increased customer production efficiencies and product mix, and a $2.3 million decline in host material sales. Royalty and license fees were $5.2 million, unchanged from the third quarter of 2015. Technology development and support revenues were $1.5 million, compared to $0.1 million in the third quarter of 2015. The increase was due to customer sales from the recently acquired Adesis subsidiary.
The company reported an operating loss of $3.0 million in the third quarter of 2016, compared to operating income of $8.4 million for the third quarter of 2015. Operating expenses were $33.2 million, compared to $31.0 million in the third quarter of 2015, and cost of materials was $6.5 million, compared to $7.2 million in the third quarter of 2015. The increase in operating expenses was mainly due to an increase of $2.7 million in amortization charges associated with the acquisition of the BASF OLED patents and the Adesis business acquisition.
The company’s balance sheet remained strong, with cash and cash equivalents and investments of $301.1 million as of Sept. 30, 2016. During the third quarter, the company added $32.0 million in intangible assets in the form of customer relationships, internally developed IP, trade names and certain other assets with the Adesis business acquisition. During the third quarter, the company generated $4.1 million in operating cash flow.
The company reported revenues of $124.3 million during the nine months ended Sept. 30, 2016, compared to revenues of $128.7 million for the same period of 2015. Material sales were $70.1 million, compared to $85.3 million in the first nine months of 2015, primarily due to a $9.3 million decline in host sales. Royalty and license fees were $52.6 million, up from $43.3 million in the first nine months of 2015. Technology development and support revenues were $1.7 million, compared to $0.1 million for the first nine months of 2015, the increase primarily due to customer sales from the recently acquired Adesis subsidiary.
The company reported operating income of $33.7 million for the first nine months of 2016, compared to operating income of $5.3 million for the first nine months of 2015. Excluding the inventory write-down of $33.0 million taken in the second quarter of 2015, adjusted operating income was $38.3 million for the first nine months of 2015. For the first nine months of 2016, the company reported net income of $22.3 million, or $0.47 per diluted share, compared to a net loss of $3.4 million, or $0.07 per diluted share, for the same period of 2015. Excluding the inventory write-down, and the associated $3.0 million reduction of income tax expense, adjusted net income was $26.6 million, or $0.57 per diluted share, for the first nine months of 2015.
Operating cash flow for the first nine months of 2016 was $40.3 million, compared to $80.6 million for the first nine months of 2015. Operating cash flow for the first nine months of 2015 included an upfront $42.0 million license and royalty payment.
With the OLED industry still at a stage where many variables can have a material impact on its growth, Universal Display continues to expect its 2016 revenues to be in the range of $190 million to $200 million.