05.05.23
Universal Display reported financial results for the first quarter ended March 31, 2023.
“Our first quarter results were in-line with our expectations and we are reaffirming our full year 2023 outlook,” said Brian Millard, VP and CFO of Universal Display Corporation. “While macro uncertainties continue to linger, we believe that recent OLED investment and product announcements pave the path for a new OLED adoption cycle and strong growth in the coming years.
"Additionally, today we announced the acquisition of Merck KGaA, Darmstadt, Germany’s phosphorescent emitter patent portfolio, which further strengthens our leadership position in the OLED ecosystem and broadens the tools available to our team as we develop new and next-generation phosphorescent materials. We also announced a new multi-year collaboration agreement with Merck KGaA, Darmstadt, Germany.”
Financial Highlights for the first quarter of 2023
• Total revenue in the first quarter of 2023 was $130.5 million as compared to $150.5 million in the first quarter of 2022. As the compnay has previously noted, the near-term weakness in the overall global market economy continues to have an impact on forecasted demand for OLED products utilizing our emitter material over the remaining life of several customers’ contracts compared to prior estimates, resulting in recording a positive cumulative catch-up adjustment to total revenue during the first quarter of 2023 of $5.7 million arising from changes in estimates of transaction price.
• Revenue from material sales was $70.2 million in the first quarter of 2023 as compared to $86.7 million in the first quarter of 2022. This decrease was primarily the result of lower unit material volume.
• Revenue from royalty and license fees was $55.2 million in the first quarter of 2023 as compared to $59.8 million in the first quarter of 2022. This decrease was primarily the result of lower unit material volume.
• Cost of material sales was $29.5 million in the first quarter of 2023 as compared to $29.9 million in the first quarter of 2022. Cost of material sales during the quarter decreased due to lower unit material volume, offset by a $3.3 million increase in our inventory provision and $4.7 million in costs related to the Shannon facility, which commenced manufacturing activities in June 2022.
• Total gross margin was 75% in the first three months of 2023 as compared to 78% in the first three months of 2022. Shannon facility costs of $4.7 million and the inventory provision of $3.3 million in 2023 contributed to a 6% decrease in total gross margin between periods.
• Operating income was $45.4 million in the first quarter of 2023 as compared to $62.3 million in the first quarter of 2022.
• Net income was $39.8 million or $0.83 per diluted share in the first quarter of 2023 as compared to $50.0 million or $1.05 per diluted share in the first quarter of 2022.
“Our first quarter results were in-line with our expectations and we are reaffirming our full year 2023 outlook,” said Brian Millard, VP and CFO of Universal Display Corporation. “While macro uncertainties continue to linger, we believe that recent OLED investment and product announcements pave the path for a new OLED adoption cycle and strong growth in the coming years.
"Additionally, today we announced the acquisition of Merck KGaA, Darmstadt, Germany’s phosphorescent emitter patent portfolio, which further strengthens our leadership position in the OLED ecosystem and broadens the tools available to our team as we develop new and next-generation phosphorescent materials. We also announced a new multi-year collaboration agreement with Merck KGaA, Darmstadt, Germany.”
Financial Highlights for the first quarter of 2023
• Total revenue in the first quarter of 2023 was $130.5 million as compared to $150.5 million in the first quarter of 2022. As the compnay has previously noted, the near-term weakness in the overall global market economy continues to have an impact on forecasted demand for OLED products utilizing our emitter material over the remaining life of several customers’ contracts compared to prior estimates, resulting in recording a positive cumulative catch-up adjustment to total revenue during the first quarter of 2023 of $5.7 million arising from changes in estimates of transaction price.
• Revenue from material sales was $70.2 million in the first quarter of 2023 as compared to $86.7 million in the first quarter of 2022. This decrease was primarily the result of lower unit material volume.
• Revenue from royalty and license fees was $55.2 million in the first quarter of 2023 as compared to $59.8 million in the first quarter of 2022. This decrease was primarily the result of lower unit material volume.
• Cost of material sales was $29.5 million in the first quarter of 2023 as compared to $29.9 million in the first quarter of 2022. Cost of material sales during the quarter decreased due to lower unit material volume, offset by a $3.3 million increase in our inventory provision and $4.7 million in costs related to the Shannon facility, which commenced manufacturing activities in June 2022.
• Total gross margin was 75% in the first three months of 2023 as compared to 78% in the first three months of 2022. Shannon facility costs of $4.7 million and the inventory provision of $3.3 million in 2023 contributed to a 6% decrease in total gross margin between periods.
• Operating income was $45.4 million in the first quarter of 2023 as compared to $62.3 million in the first quarter of 2022.
• Net income was $39.8 million or $0.83 per diluted share in the first quarter of 2023 as compared to $50.0 million or $1.05 per diluted share in the first quarter of 2022.