Universal Display Corporation (Nasdaq: OLED), enabling
energy-efficient displays and lighting with its UniversalPHOLED®
technology and materials, today reported financial results for the
third quarter ended September 30, 2021.
“We are pleased to report solid third quarter results, including
record revenue of $143.6 million,” said Sidney D. Rosenblatt,
Executive Vice President and Chief Financial Officer of Universal
Display. “As we look at the second half of the year, we see that
the pandemic and component shortages are causing significant
disruptions in the global supply chain. While these ongoing
uncertainties are impacting the consumer electronics ecosystem, we
are reaffirming our revenue guidance range of $530 million to $560
million. On the partnership front, we are pleased to announce that
we extended our long-term material and license agreements with
leading Chinese panel maker Tianma. We are delighted to continue
our strong partnership with Tianma, which is advancing its OLED
presence and expanding its product portfolio. We are also gratified
to share that The Forum of Executive Women has recognized Universal
Display Corporation as a Champion of Board Diversity for the second
year. This is indicative of our steadfast commitment to cultivating
and nurturing a global culture that celebrates innovation,
collaboration, diversity and inclusion.”
Rosenblatt continued, “As we look to the OLED industry, we
believe that we are still in the early innings of a long-term
secular growth market. As the next wave of OLED adoption for
medium-and-large-area applications takes shape, we are fortifying
our position as an OLED leader and innovator on multiple fronts. We
are leveraging our 25-plus years of pioneering research, know-how
and experience into new OLED materials and technologies. We are
also expanding our global footprint, building our infrastructure
that is designed to drive an effective cost structure and targeting
new opportunities, including phosphorescent blue and OVJP (organic
vapor jet printing). We believe that these strategic initiatives
will enable us to continue providing our customers with
best-in-class solutions, while keeping UDC at the forefront of the
growing OLED industry.”
Financial Highlights for the Third
Quarter of 2021
- Total revenue in the third quarter of 2021 was $143.6 million
as compared to $117.1 million in the third quarter of 2020. The
increase in revenue was due to higher royalty and license fees, as
well as higher material sales primarily due to stronger demand in
the OLED display market.
- Revenue from material sales was $75.6 million in the third
quarter of 2021 as compared to $68.7 million in the third quarter
of 2020.
- Revenue from royalty and license fees was $63.9 million in the
third quarter of 2021 as compared to $44.6 million in the third
quarter of 2020.
- Cost of material sales was $28.9 million in the third quarter
of 2021 as compared to $20.8 million in the third quarter of 2020.
Included in the cost of material sales was an inventory reserve
charge of $1.0 million in the third quarter of 2021 as compared to
a charge of $198,000 in the third quarter of 2020.
- Operating income was $57.7 million in the third quarter of 2021
as compared to operating income of $48.4 million in the third
quarter of 2020.
- Net income was $46.1 million or $0.97 per diluted share in the
third quarter of 2021 as compared to $40.5 million or $0.85 per
diluted share in the third quarter of 2020.
Revenue Comparison
($ in thousands)
Three Months Ended September
30,
2021
2020
Material sales
$
75,609
$
68,709
Royalty and license fees
63,939
44,550
Contract research services
4,070
3,820
Total revenue
$
143,618
$
117,079
Cost of Materials
Comparison
($ in thousands)
Three Months Ended September
30,
2021
2020
Material sales
$
75,609
$
68,709
Cost of material sales
28,883
20,849
Gross margin on material sales
46,726
47,860
Gross margin as a % of material sales
62
%
70
%
Financial Highlights for the First Nine
Months of 2021
- Total revenue in the first nine months of 2021 was $407.3
million as compared to $287.3 million in the first nine months of
2020. The increase in revenue was due to higher royalty and license
fees, as well as higher material sales primarily due to stronger
demand in the OLED display market.
- Revenue from material sales was $232.9 million in the first
nine months of 2021 as compared to $167.2 million in the first nine
months of 2020. Revenue from royalty and license fees was $163.0
million in the first nine months of 2021 as compared to $110.0
million in the first nine months of 2020.
- Cost of material sales was $75.2 million in the first nine
months of 2021 as compared to $51.3 million in the first nine
months of 2020. Included in the cost of material sales was an
inventory reserve charge of $2.1 million in the first nine months
of 2021 as compared to a charge of $808,000 in the first nine
months of 2020.
- Operating income was $171.2 million in the first nine months of
2021 as compared to $91.7 million in the first nine months of
2020.
- Net income was $138.3 million or $2.90 per diluted share in the
first nine months of 2021 as compared to $79.5 million or $1.67 per
diluted share in the first nine months of 2020.
Revenue Comparison
($ in thousands)
Nine Months Ended September
30,
2021
2020
Material sales
$
232,855
$
167,211
Royalty and license fees
163,037
110,008
Contract research services
11,386
10,105
Total revenue
$
407,278
$
287,324
Cost of Materials
Comparison
($ in thousands)
Nine Months Ended September
30,
2021
2020
Material sales
$
232,855
$
167,211
Cost of material sales
75,198
51,337
Gross margin on material sales
157,657
115,874
Gross margin as a % of material sales
68
%
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 fourth quarter cash dividend of
$0.20 per share on the Company’s common stock. The dividend is
payable on December 30, 2021 to all shareholders of record on
December 16, 2021.
Conference Call
Information
In conjunction with this release, Universal Display will host a
conference call on Thursday, November 4, 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)
September 30, 2021
December 31, 2020
ASSETS
CURRENT ASSETS:
Cash and cash equivalents
$
535,157
$
630,012
Short-term investments
253,786
99,996
Accounts receivable
96,235
82,261
Inventory
121,485
91,591
Other current assets
48,476
20,746
Total current assets
1,055,139
924,606
PROPERTY AND EQUIPMENT, net of accumulated
depreciation of $86,962 and $72,493
118,988
102,113
ACQUIRED TECHNOLOGY, net of accumulated
amortization of $168,489 and $153,050
54,814
70,253
OTHER INTANGIBLE ASSETS, net of
accumulated amortization of $7,206 and $6,155
10,028
10,685
GOODWILL
15,535
15,535
INVESTMENTS
8,500
5,000
DEFERRED INCOME TAXES
32,476
37,695
OTHER ASSETS
133,111
103,341
TOTAL ASSETS
$
1,428,591
$
1,269,228
LIABILITIES AND SHAREHOLDERS’
EQUITY
CURRENT LIABILITIES:
Accounts payable
$
10,939
$
13,801
Accrued expenses
42,736
41,404
Deferred revenue
123,475
105,215
Other current liabilities
3,111
4,540
Total current liabilities
180,261
164,960
DEFERRED REVENUE
43,458
57,086
RETIREMENT PLAN BENEFIT LIABILITY
80,676
78,527
OTHER LIABILITIES
87,874
55,941
Total liabilities
392,269
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, 49,060,909 and 49,013,476 shares
issued, and 47,695,261 and 47,647,828 shares outstanding, at
September 30, 2021 and December 31, 2020, respectively
491
490
Additional paid-in capital
646,049
635,595
Retained earnings
463,820
353,930
Accumulated other comprehensive loss
(32,756
)
(36,019
)
Treasury stock, at cost (1,365,648 shares
at September 30, 2021 and December 31, 2020)
(41,284
)
(41,284
)
Total shareholders’ equity
1,036,322
912,714
TOTAL LIABILITIES AND SHAREHOLDERS’
EQUITY
$
1,428,591
$
1,269,228
UNIVERSAL DISPLAY CORPORATION
AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
(in thousands, except share and per share data)
Three Months Ended September
30,
Nine Months Ended September
30,
2021
2020
2021
2020
REVENUE:
Material sales
$
75,609
$
68,709
$
232,855
$
167,211
Royalty and license fees
63,939
44,550
163,037
110,008
Contract research services
4,070
3,820
11,386
10,105
Total revenue
143,618
117,079
407,278
287,324
COST OF SALES
31,481
23,378
82,748
58,480
Gross margin
112,137
93,701
324,530
228,844
OPERATING EXPENSES:
Research and development
25,327
20,814
72,733
61,708
Selling, general and administrative
20,960
13,579
57,603
45,129
Amortization of acquired technology and
other intangible assets
5,505
5,494
16,490
16,474
Patent costs
2,359
2,095
6,003
5,591
Royalty and license expense
258
3,293
519
8,195
Total operating expenses
54,409
45,275
153,348
137,097
OPERATING INCOME
57,728
48,426
171,182
91,747
Interest income, net
137
1,029
345
4,444
Other (loss) income, net
(102
)
262
178
634
Interest and other income, net
35
1,291
523
5,078
INCOME BEFORE INCOME TAXES
57,763
49,717
171,705
96,825
INCOME TAX EXPENSE
(11,654
)
(9,217
)
(33,368
)
(17,355
)
NET INCOME
$
46,109
$
40,500
$
138,337
$
79,470
NET INCOME PER COMMON SHARE:
BASIC
$
0.97
$
0.85
$
2.91
$
1.67
DILUTED
$
0.97
$
0.85
$
2.90
$
1.67
WEIGHTED AVERAGE SHARES USED IN COMPUTING
NET INCOME PER COMMON SHARE:
BASIC
47,291,192
47,227,061
47,286,927
47,182,625
DILUTED
47,362,575
47,260,331
47,355,583
47,212,660
CASH DIVIDENDS DECLARED PER COMMON
SHARE
$
0.20
$
0.15
$
0.60
$
0.45
UNIVERSAL DISPLAY CORPORATION
AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED) (in thousands)
Nine Months Ended September
30,
2021
2020
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income
$
138,337
$
79,470
Adjustments to reconcile net income to net
cash provided by operating activities:
Amortization of deferred revenue and
recognition of unbilled receivables, net
(165,723
)
(112,508
)
Depreciation
14,471
11,147
Amortization of intangibles
16,490
16,474
Change in excess inventory reserve
2,058
808
Amortization of premium and discount on
investments, net
(229
)
(4,293
)
Stock-based compensation to employees
22,846
19,807
Stock-based compensation to Board of
Directors and Scientific Advisory Board
1,052
1,133
Deferred income tax expense (benefit)
4,226
(2,242
)
Retirement plan expense
6,676
4,242
Decrease (increase) in assets:
Accounts receivable
(13,974
)
(38,898
)
Inventory
(31,952
)
(20,953
)
Other current assets
(13,626
)
(2,854
)
Other assets
(33,540
)
(8,721
)
Increase (decrease) in liabilities:
Accounts payable and accrued expenses
(3,311
)
(19,633
)
Other current liabilities
(1,429
)
(806
)
Deferred revenue
160,021
144,200
Other liabilities
31,933
9,454
Net cash provided by operating
activities
134,326
75,827
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment
(29,496
)
(19,213
)
Purchases of intangibles
(394
)
(25
)
Purchases of investments
(272,340
)
(604,153
)
Proceeds from sale and maturity of
investments
115,240
613,310
Net cash used in investing activities
(186,990
)
(10,081
)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of common stock
1,136
869
Payment of withholding taxes related to
stock-based compensation to employees
(14,880
)
(14,293
)
Cash dividends paid
(28,447
)
(21,329
)
Net cash used in financing activities
(42,191
)
(34,753
)
(DECREASE) INCREASE IN CASH AND CASH
EQUIVALENTS
(94,855
)
30,993
CASH AND CASH EQUIVALENTS, BEGINNING OF
PERIOD
630,012
131,627
CASH AND CASH EQUIVALENTS, END OF
PERIOD
$
535,157
$
162,620
The following non-cash activities
occurred:
Unrealized (loss) gain on
available-for-sale securities
$
(39
)
$
451
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
(1,849
)
(892
)
View source
version on businesswire.com: https://www.businesswire.com/news/home/20211104006283/en/
Universal Display Contact: Darice Liu investor@oled.com
media@oled.com +1 609-964-5123
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