11.11.19
eMagin Corporation announced financial results and corporate highlights for the third quarter ended Sept. 30, 2019.
Revenues for the third quarter of 2019 were $7.9 million, an increase of approximately $1.0 million from revenues of $6.9 million reported a year ago, and an increase sequen-tially of $2.5 million from the second quarter of 2019.
Product revenues totaled $7.3 million as compared to $6.0 million in the third quarter of 2018. On a sequential basis, product revenues increased 49% from the second quarter of 2019.
Overall gross margin for the third quarter was 31% on gross profit of $2.5 million com-pared to a gross margin of 35% on gross profit of $2.4 million in the prior year period. The higher gross profit is due largely to higher product revenues. Operating loss for the third quarter of 2019 was $0.4 million versus an operating loss of $1.3 million in the third quarter of last year.
“We successfully executed on our strategic priorities in the third quarter of 2019, which resulted in a significant improvement in our financial results,” said Jeffrey Lucas, Presi-dent and CFO. “For the quarter, we achieved over $7.3 million in product revenues, the highest level of product revenues in six years and the second highest in the company’s history. Operating loss for the quarter was $394,000 and down from an operating loss of $1.3 million in the prior year quarter. Adjusted EBITDA of $263,000 was positive for the first time since the first quarter 2016 when the company earned one million dollars from nonrecurring licensing revenue.
“During the third quarter, we demonstrated significant improvement in yield and throughput as production volumes increased over 50% from the second quarter. We be-lieve these initiatives, including enhanced maintenance support and optimizing produc-tion runs, along with others we are implementing in the current quarter, provide us with additional opportunities for operating improvements in the future,” continued Lucas.
“In addition, during the third quarter we took actions to reduce our cost structure. Ex-pense controls put into effect during the quarter contributed to a 21% decrease in oper-ating expenses from the prior year period. Operating expenses as a percent of sales de-clined to 36% in the third quarter compared to 53% a year ago and 57% from this year’s second quarter,” concluded Lucas.
“Demand for our OLED microdisplays continues to be strong. Our backlog of $6.3 million reflects the fulfillment of several sizeable orders during the quarter and an approximate $1.1 million reduction from the government’s cancelation of the ENVG-III program as it begins fielding the 108,000 system ENVG-B program where we are supplying displays to the two prime contractors on the program,” noted Andrew G. Sculley, CEO. “We believe our backlog in the near term will return to or exceed recent levels as our business devel-opment team is currently negotiating a number of large orders.”
“Finally, during the third quarter, we received 93 orders, of which seven were from new customers, and supplied products for 23 new programs. I am especially pleased to report that we have orders from two new medical customers and continue to supply an existing medical customer under our long-term contract,” concluded Sculley.
Revenues for the third quarter of 2019 were $7.9 million, an increase of approximately $1.0 million from revenues of $6.9 million reported a year ago, and an increase sequen-tially of $2.5 million from the second quarter of 2019.
Product revenues totaled $7.3 million as compared to $6.0 million in the third quarter of 2018. On a sequential basis, product revenues increased 49% from the second quarter of 2019.
Overall gross margin for the third quarter was 31% on gross profit of $2.5 million com-pared to a gross margin of 35% on gross profit of $2.4 million in the prior year period. The higher gross profit is due largely to higher product revenues. Operating loss for the third quarter of 2019 was $0.4 million versus an operating loss of $1.3 million in the third quarter of last year.
“We successfully executed on our strategic priorities in the third quarter of 2019, which resulted in a significant improvement in our financial results,” said Jeffrey Lucas, Presi-dent and CFO. “For the quarter, we achieved over $7.3 million in product revenues, the highest level of product revenues in six years and the second highest in the company’s history. Operating loss for the quarter was $394,000 and down from an operating loss of $1.3 million in the prior year quarter. Adjusted EBITDA of $263,000 was positive for the first time since the first quarter 2016 when the company earned one million dollars from nonrecurring licensing revenue.
“During the third quarter, we demonstrated significant improvement in yield and throughput as production volumes increased over 50% from the second quarter. We be-lieve these initiatives, including enhanced maintenance support and optimizing produc-tion runs, along with others we are implementing in the current quarter, provide us with additional opportunities for operating improvements in the future,” continued Lucas.
“In addition, during the third quarter we took actions to reduce our cost structure. Ex-pense controls put into effect during the quarter contributed to a 21% decrease in oper-ating expenses from the prior year period. Operating expenses as a percent of sales de-clined to 36% in the third quarter compared to 53% a year ago and 57% from this year’s second quarter,” concluded Lucas.
“Demand for our OLED microdisplays continues to be strong. Our backlog of $6.3 million reflects the fulfillment of several sizeable orders during the quarter and an approximate $1.1 million reduction from the government’s cancelation of the ENVG-III program as it begins fielding the 108,000 system ENVG-B program where we are supplying displays to the two prime contractors on the program,” noted Andrew G. Sculley, CEO. “We believe our backlog in the near term will return to or exceed recent levels as our business devel-opment team is currently negotiating a number of large orders.”
“Finally, during the third quarter, we received 93 orders, of which seven were from new customers, and supplied products for 23 new programs. I am especially pleased to report that we have orders from two new medical customers and continue to supply an existing medical customer under our long-term contract,” concluded Sculley.
