Universal Display reported financial results for the third quarter ended Sept. 30, 2020.

“We are pleased to report solid third quarter 2020 results,” said Sidney D. Rosenblatt, EVP and CFO of Universal Display. “Beginning in July, we saw a pick-up in customer orders and UniversalPHOLED shipments and that strength has continued. Looking to the near-term, while ongoing uncertainties related to the COVID-19 pandemic persist, we believe oled panel momentum will continue in the fourth quarter. Based on our current estimates, we believe 2020 revenues will be approximately in the range of $385 million to $400 million.”

“For 2021, we expect meaningful growth to resume as new OLED production comes online, new OLED consumer electronic models are launched, and customers continue to advance their OLED commercialization plans,” Rosenblatt added. “The flexibility and versatility of OLEDs continue to broaden the imagination and transform the definition of what a consumer product can be. As the OLED industry continues to gain strong traction across the landscape of small, medium and large displays, we remain focused on expanding and deepening our leadership position and enabling our customers and the OLED eco-system.”

Total revenue in the third quarter of 2020 was $117.1 million as compared to $97.5 million in the third quarter of 2019. The increase in revenue was due to higher material sales as a result of stronger demand in the OLED display market. The full extent of the impact of the ongoing COVID-19 pandemic on operational performance remains uncertain and will depend on many factors including the timing, extent and duration of the pandemic, the development and availability of effective treatments and vaccines, and the impact on the global economy and demand for OLED consumer products.

Revenue from material sales was $68.7 million in the third quarter of 2020 as compared to $51.8 million in the third quarter of 2019. Revenue from royalty and license fees was $44.6 million in the third quarter of 2020 as compared to $43 million in the third quarter of 2019.

Cost of material sales was $20.8 million in the third quarter of 2020 as compared to $15.2 million in the third quarter of 2019.

Operating income was $48.4 million in the third quarter of 2020 as compared to operating income of $40.8 million in the third quarter of 2019. Net income was $40.5 million or $0.85 per diluted share in the third quarter of 2020 as compared to $37.0 million or $0.78 per diluted share in the third quarter of 2019.

First Nine Months of 2020

Total revenue in the first nine months of 2020 was $287.3 million as compared to $303.4 million in the first nine months of 2019. The decrease in revenue was mainly due to the weakened demand for emitter products from customers during the three months ended June 30, 2020 as a result of the COVID-19 pandemic.

Revenue from material sales was $167.2 million in the first nine months of 2020 as compared to $182.7 million in the first nine months of 2019. Revenue from royalty and license fees was $110.0 million in the first nine months of 2020 as compared to $112.2 million in the first nine months of 2019.

Cost of material sales was $51.3 million in the first nine months of 2020 as compared to $50.2 million in the first nine months of 2019. Included in the cost of material sales was an inventory reserve charge of $808,000 in the first nine months of 2020 as compared to a charge of $4.2 million in the first nine months of 2019.

Operating income was $91.7 million in the first nine months of 2020 as compared to $123.9 million in the first nine months of 2019.