Universal Display Corporation (Nasdaq: OLED), enabling
energy-efficient displays and lighting with its UniversalPHOLED®
technology and materials, today reported financial results for the
second quarter ended June 30, 2021.
“Looking to the year, we are on track to achieve approximately
30% year-over-year sales growth, translating into a new record high
for annual revenue for the Company,” said Sidney D. Rosenblatt,
Executive Vice President and Chief Financial Officer of Universal
Display. “As we anticipate ongoing momentum in the OLED industry to
increase in 2021 and beyond, we are excited about the long and vast
runway of forecasted growth for the market. Given this expected
growth, we are continuing to fuel and fortify our innovation
engine, expand our global infrastructure, and invest in our people
to advance our leadership position and further enable our customers
and the OLED ecosystem.”
Rosenblatt continued, “Energy-efficiency and sustainability are
key cornerstones of our UniversalPHOLED technology and materials.
The discovery of our proprietary phosphorescent technology was an
enabling breakthrough in the OLED industry. With efficiencies that
are up to four times higher than conventional OLED materials, UDC’s
patented and award-winning phosphorescent OLED technology and
UniversalPHOLED materials are proven to be integral in enabling
high-performance, low-power consumption and energy-efficiency in
OLED displays and lighting. Our energy-efficiency initiatives are
expanding as we continue to invent and develop new OLED materials
and technologies, including progress toward delivery of an
all-phosphorescent red, green and blue emissive system, that can
enable a sustainable and low-carbon future.”
Financial Highlights for the Second
Quarter of 2021
- Total revenue in the second quarter of 2021 was $129.7 million
as compared to $58.0 million in the second quarter of 2020. The
increase in revenue was due to strengthened demand for OLED
products utilizing our emitter material, as well as the recovery in
sales that were adversely affected by the impact of the COVID-19
pandemic during the three months ended June 30, 2020. Even though
we believe we have experienced the worst effects of the COVID-19
pandemic, we remain uncertain as to the possibility of its
re-emergence and any corresponding negative impact on OLED market
demand.
- Revenue from material sales was $77.4 million in the second
quarter of 2021 as compared to $31.9 million in the second quarter
of 2020.
- Revenue from royalty and license fees was $48.2 million in the
second quarter of 2021 as compared to $22.4 million in the second
quarter of 2020.
- Cost of material sales was $25.3 million in the second quarter
of 2021 as compared to $10.3 million in the second quarter of
2020.
- Operating income was $49.9 million in the second quarter of
2021 as compared to operating loss of $1.2 million in the second
quarter of 2020.
- Net income was $40.5 million or $0.85 per diluted share in the
second quarter of 2021 as compared to $815,000 million or $0.02 per
diluted share in the second quarter of 2020.
Revenue Comparison
($ in thousands)
Three Months Ended June
30,
2021
2020
Material sales
$
77,438
$
31,927
Royalty and license fees
48,212
22,380
Contract research services
4,010
3,661
Total revenue
$
129,660
$
57,968
Cost of Materials
Comparison
($ in thousands)
Three Months Ended June
30,
2021
2020
Material sales
$
77,438
$
31,927
Cost of material sales
25,316
10,277
Gross margin on material sales
52,122
21,650
Gross margin as a % of material sales
67
%
68
%
Financial Highlights for the First Half
of 2021
- Total revenue in the first half of 2021 was $263.7 million as
compared to $170.2 million in the first half of 2020. The increase
in revenue was due to strengthened demand for OLED products
utilizing our emitter material, as well as the recovery in sales
that were adversely affected by the impact of the COVID-19 pandemic
during the three months ended June 30, 2020. Even though we believe
we have experienced the worst effects of the COVID-19 pandemic, we
remain uncertain as to the possibility of its re-emergence and any
corresponding negative impact on OLED market demand.
- Revenue from material sales was $157.2 million in the first
half of 2021 as compared to $98.5 million in the first half of
2020.
- Revenue from royalty and license fees was $99.1 million in the
first half of 2021 as compared to $65.5 million in the first half
of 2020.
- Cost of material sales was $46.3 million in the first half of
2021 as compared to $30.5 million in the first half of 2020.
- Operating income was $113.5 million in the first half of 2021
as compared to $43.3 million in the first half of 2020.
- Net income was $92.2 million or $1.94 per diluted share in the
first half of 2021 as compared to $39.0 million or $0.82 per
diluted share in the first half of 2020.
Revenue Comparison
($ in thousands)
Six Months Ended June
30,
2021
2020
Material sales
$
157,246
$
98,502
Royalty and license fees
99,098
65,458
Contract research services
7,316
6,285
Total revenue
$
263,660
$
170,245
Cost of Materials
Comparison
($ in thousands)
Six Months Ended June
30,
2021
2020
Material sales
$
157,246
$
98,502
Cost of material sales
46,315
30,488
Gross margin on material sales
110,931
68,014
Gross margin as a % of material sales
71
%
69
%
2021 Guidance
The Company continues to believe that its 2021 revenue will be
approximately in the range of $530 million to $560 million. The
OLED industry remains at a stage where many variables can have a
material impact on its growth, and the Company thus caveats its
financial guidance accordingly.
Dividend
The Company also announced a third quarter cash dividend of
$0.20 per share on the Company’s common stock. The dividend is
payable on September 30, 2021 to all shareholders of record on
September 16, 2021.
Conference Call
Information
In conjunction with this release, Universal Display will host a
conference call on Thursday, August 5, 2021 at 5:00 p.m. Eastern
Time. The live webcast of the conference call can be accessed under
the events page of the Company's Investor Relations website at
ir.oled.com. Those wishing to participate in the live call should
dial 1-877-524-8416 (toll-free) or 1-412-902-1028. Please dial in
5-10 minutes prior to the scheduled conference call time. An online
archive of the webcast will be available within two hours of the
conclusion of the call.
About Universal Display
Corporation
Universal Display Corporation (Nasdaq: OLED) is a leader in the
research, development and commercialization of organic light
emitting diode (OLED) technologies and materials for use in display
and solid-state lighting applications. Founded in 1994 and with
subsidiaries and offices around the world, the Company currently
owns, exclusively licenses or has the sole right to sublicense more
than 5,000 patents issued and pending worldwide. Universal Display
licenses its proprietary technologies, including its breakthrough
high-efficiency UniversalPHOLED® phosphorescent OLED technology
that can enable the development of energy-efficient and
eco-friendly displays and solid-state lighting. The Company also
develops and offers high-quality, state-of-the-art UniversalPHOLED
materials that are recognized as key ingredients in the fabrication
of OLEDs with peak performance. In addition, Universal Display
delivers innovative and customized solutions to its clients and
partners through technology transfer, collaborative technology
development and on-site training. To learn more about Universal
Display Corporation, please visit https://oled.com/.
Universal Display Corporation and the Universal Display
Corporation logo are trademarks or registered trademarks of
Universal Display Corporation. All other company, brand or product
names may be trademarks or registered trademarks.
All statements in this document that are not historical, such as
those relating to the Company’s technologies and potential
applications of those technologies, the Company’s expected results
and future declaration of dividends, as well as the growth of the
OLED market and the Company’s opportunities in that market, are
forward-looking financial statements within the meaning of the
Private Securities Litigation Reform Act of 1995. You are cautioned
not to place undue reliance on any forward-looking statements in
this document, as they reflect Universal Display Corporation’s
current views with respect to future events and are subject to
risks and uncertainties that could cause actual results to differ
materially from those contemplated. These risks and uncertainties
are discussed in greater detail in Universal Display Corporation’s
periodic reports on Form 10-K and Form 10-Q filed with the
Securities and Exchange Commission, including, in particular, the
section entitled “Risk Factors” in Universal Display Corporation’s
Annual Report on Form 10-K for the year ended December 31, 2020.
Universal Display Corporation disclaims any obligation to update
any forward-looking statement contained in this document.
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UNIVERSAL DISPLAY CORPORATION
AND SUBSIDIARIES
CONSOLIDATED BALANCE
SHEETS
(UNAUDITED)
(in thousands, except share and
per share data)
June 30, 2021
December 31, 2020
ASSETS
CURRENT ASSETS:
Cash and cash equivalents
$
542,914
$
630,012
Short-term investments
190,540
99,996
Accounts receivable
99,629
82,261
Inventory
104,653
91,591
Other current assets
55,156
20,746
Total current assets
992,892
924,606
PROPERTY AND EQUIPMENT, net of accumulated
depreciation of $81,721 and $72,493
113,187
102,113
ACQUIRED TECHNOLOGY, net of accumulated
amortization of $163,343 and $153,050
59,960
70,253
OTHER INTANGIBLE ASSETS, net of
accumulated amortization of $6,848 and $6,155
10,386
10,685
GOODWILL
15,535
15,535
INVESTMENTS
8,500
5,000
DEFERRED INCOME TAXES
35,579
37,695
OTHER ASSETS
114,676
103,341
TOTAL ASSETS
$
1,350,715
$
1,269,228
LIABILITIES AND SHAREHOLDERS’
EQUITY
CURRENT LIABILITIES:
Accounts payable
$
10,334
$
13,801
Accrued expenses
27,247
41,404
Deferred revenue
122,978
105,215
Other current liabilities
2,004
4,540
Total current liabilities
162,563
164,960
DEFERRED REVENUE
46,174
57,086
RETIREMENT PLAN BENEFIT LIABILITY
79,966
78,527
OTHER LIABILITIES
70,396
55,941
Total liabilities
359,099
356,514
SHAREHOLDERS’ EQUITY:
Preferred Stock, par value $0.01 per
share, 5,000,000 shares authorized, 200,000 shares of Series A
Nonconvertible Preferred Stock issued and outstanding (liquidation
value of $7.50 per share or $1,500)
2
2
Common Stock, par value $0.01 per share,
200,000,000 shares authorized, 49,054,059 and 49,013,476 shares
issued, and 47,688,411 and 47,647,828 shares outstanding, at June
30, 2021 and December 31, 2020, respectively
491
490
Additional paid-in capital
638,991
635,595
Retained earnings
427,188
353,930
Accumulated other comprehensive loss
(33,772
)
(36,019
)
Treasury stock, at cost (1,365,648 shares
at June 30, 2021 and December 31, 2020)
(41,284
)
(41,284
)
Total shareholders’ equity
991,616
912,714
TOTAL LIABILITIES AND SHAREHOLDERS’
EQUITY
$
1,350,715
$
1,269,228
UNIVERSAL DISPLAY CORPORATION
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF
INCOME
(UNAUDITED)
(in thousands, except share and
per share data)
Three Months Ended June
30,
Six Months Ended June
30,
2021
2020
2021
2020
REVENUE:
Material sales
$
77,438
$
31,927
$
157,246
$
98,502
Royalty and license fees
48,212
22,380
99,098
65,458
Contract research services
4,010
3,661
7,316
6,285
Total revenue
129,660
57,968
263,660
170,245
COST OF SALES
27,969
12,643
51,267
35,102
Gross margin
101,691
45,325
212,393
135,143
OPERATING EXPENSES:
Research and development
24,101
21,397
47,406
40,894
Selling, general and administrative
20,239
16,147
36,643
31,550
Amortization of acquired technology and
other intangible assets
5,497
5,490
10,985
10,980
Patent costs
1,809
1,858
3,644
3,496
Royalty and license expense
149
1,618
261
4,902
Total operating expenses
51,795
46,510
98,939
91,822
OPERATING INCOME (LOSS)
49,896
(1,185
)
113,454
43,321
Interest income, net
75
1,268
208
3,415
Other income, net
221
170
280
372
Interest and other income, net
296
1,438
488
3,787
INCOME BEFORE INCOME TAXES
50,192
253
113,942
47,108
INCOME TAX (EXPENSE) BENEFIT
(9,651
)
562
(21,714
)
(8,138
)
NET INCOME
$
40,541
$
815
$
92,228
$
38,970
NET INCOME PER COMMON SHARE:
BASIC
$
0.85
$
0.02
$
1.94
$
0.82
DILUTED
$
0.85
$
0.02
$
1.94
$
0.82
WEIGHTED AVERAGE SHARES USED IN COMPUTING
NET INCOME PER COMMON SHARE:
BASIC
47,299,627
47,227,294
47,284,773
47,160,163
DILUTED
47,356,864
47,243,991
47,347,596
47,190,505
CASH DIVIDENDS DECLARED PER COMMON
SHARE
$
0.20
$
0.15
$
0.40
$
0.30
UNIVERSAL DISPLAY CORPORATION
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF
CASH FLOWS
(UNAUDITED)
(in thousands)
Six Months Ended June
30,
2021
2020
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income
$
92,228
$
38,970
Adjustments to reconcile net income to net
cash provided by operating activities:
Amortization of deferred revenue and
recognition of unbilled receivables
(110,993
)
(58,644
)
Depreciation
9,229
7,283
Amortization of intangibles
10,985
10,980
Change in excess inventory reserve
1,117
611
Amortization of premium and discount on
investments, net
(128
)
(3,280
)
Stock-based compensation to employees
14,624
12,918
Stock-based compensation to Board of
Directors and Scientific Advisory Board
704
708
Deferred income tax expense (benefit)
1,458
(336
)
Retirement plan expense
4,457
2,828
Decrease (increase) in assets:
Accounts receivable
(17,368
)
(8,046
)
Inventory
(14,179
)
(21,181
)
Other current assets
(5,712
)
(5,967
)
Other assets
(15,005
)
(5,942
)
Increase (decrease) in liabilities:
Accounts payable and accrued expenses
(17,036
)
(20,332
)
Other current liabilities
(2,536
)
(639
)
Deferred revenue
92,816
75,683
Other liabilities
14,455
6,416
Net cash provided by operating
activities
59,116
32,030
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment
(20,668
)
(11,804
)
Purchases of intangibles
(394
)
(25
)
Purchases of investments
(193,951
)
(404,232
)
Proceeds from sale and maturity of
investments
100,000
412,760
Net cash used in investing activities
(115,013
)
(3,301
)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of common stock
787
590
Payment of withholding taxes related to
stock-based compensation to employees
(13,018
)
(13,165
)
Cash dividends paid
(18,970
)
(14,215
)
Net cash used in financing activities
(31,201
)
(26,790
)
(DECREASE) INCREASE IN CASH AND CASH
EQUIVALENTS
(87,098
)
1,939
CASH AND CASH EQUIVALENTS, BEGINNING OF
PERIOD
630,012
131,627
CASH AND CASH EQUIVALENTS, END OF
PERIOD
$
542,914
$
133,566
The following non-cash activities
occurred:
Unrealized (loss) gain on
available-for-sale securities
$
(35
)
$
1,242
Common stock issued to Board of Directors
and Scientific Advisory Board that was earned and accrued for in a
previous period
300
300
Net change in accounts payable and accrued
expenses related to purchases of property and equipment
366
390
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210805006030/en/
Universal Display Contact: Darice Liu investor@oled.com
media@oled.com +1 609-964-5123
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