Revenues for the second quarter of 2017 were $5.3 million as compared to $5.5 million in the second quarter of 2016.
Product revenues totaled $4.7 million versus $4.8 million in the second quarter last year and $4.4 million in the first quarter of 2017. The year-on-year decline in product revenue was due to the wind down beginning mid-2016 of maturing military programs partially offset by the gradual ramp up of new military programs and sales of newly developed displays to commercial customers.
R&D contract revenues totaled approximately $605,000 versus $752,000 reported in the prior year quarter. The decline in military R&D contract revenues from completed contracts masks the contribution from commercial R&D contract revenues earned from multiple major consumer electronics companies and on which no R&D revenues were earned in 2016.
Overall gross margin for the second quarter was 24% on gross profit of $1.2 million compared to a gross margin of 24% on gross profit of $1.3 million in the second quarter of 2016.
Operating loss for the second quarter was $2.1 million versus operating loss of $2.2 million in the second quarter of last year. Net loss for the second quarter of 2017 was $2.3 million, or $0.07 per diluted share, compared to net loss of $2.2 million, or $0.07 per diluted share, in the second quarter of 2016.
“We have set ambitious goals for 2017, and I am confident that we will achieve them. We have seen a sequential increase in our display sales from the first quarter as the new military contracts are coming on line, as well as a significant uptick from sales of newly developed displays supported by our R&D programs for commercial customers. Our direct patterned 2Kx2K display, which is the highest resolution and highest brightness full color OLED microdisplay in the marketplace today, was demonstrated during the Display Week Conference at the Society for Information Display in Los Angeles in May. We received an outstanding reception for this achievement from many of the participants who represent leading display and related applications manufacturers and users,” said Andrew Sculley, president and CEO.
“As we have previously stated, we are in active discussions with well-known consumer product companies to develop and design their next-generation microdisplays,” Sculley added. “Our contract R&D work reflects this as we are up 57% over last year at this time and anticipate that this will result in higher product-related revenues in the future. The consumer AR/VR market will be the driver for high volume business and we are executing successfully on a plan to both secure consumer electronics companies as our channel to this market and partner with a mass production company to ensure our ability to meet the future volume demands of this segment.
“Several prospective commercial customers have accelerated their negotiations with us and our related discussions with potential high volume manufacturers are progressing. As a result, I believe we remain on target to sign an additional agreement by the end of the year,” Sculley concluded.