Recent Quotes View Full List My Watchlist Create Watchlist Indicators DJI Nasdaq Composite SPX Gold Crude Oil Hydroworld Market Index Markets Stocks ETFs Tools Overview News Currencies International Treasuries Universal Display Corporation Announces Third Quarter 2023 Financial Results By: Universal Display Corporation via Business Wire November 02, 2023 at 16:05 PM EDT 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, 2023. “As we approach the end of 2023, our performance for the year remains on course. Looking ahead, we believe that multiple market verticals are driving the OLED industry’s long-term growth path,” said Brian Millard, Vice President and Chief Financial Officer of Universal Display Corporation. “A significant shift in the world of technology is occurring with the introduction of conformable, foldable and rollable consumer electronics, and OLEDs are fueling this form factor revolution. In addition to the expected commencement of a new OLED IT adoption cycle in 2024, we are also seeing the emergence of OLEDs in the automotive market, especially with electric vehicles. As OLED activity continues to expand across the consumer display and lighting landscapes, we remain steadfast in our commitment to advancing our robust OLED materials and technology leadership.” Financial Highlights for the Third Quarter of 2023 Total revenue in the third quarter of 2023 was $141.1 million as compared to $160.6 million in the third quarter of 2022. Revenue from material sales was $92.5 million in the third quarter of 2023 as compared to $84.2 million in the third quarter of 2022. This increase was primarily due to greater sales volumes of our emitter material as well as improved product mix weighted towards increased demand for our new generation of emitter products. Revenue from royalty and license fees was $45.9 million in the third quarter of 2023 as compared to $71.5 million in the third quarter of 2022. The decrease in royalty and license fees was primarily the result of changes in customer mix, a decrease in the cumulative catch-up adjustments between periods, as well as higher estimated future demand for several of our customers over the remaining lives of their contracts. Cost of material sales was $31.6 million in the third quarter of 2023 as compared to $34.1 million in the third quarter of 2022. This decrease was primarily due to a reduction in contract manufacturing support costs, a reduction in the underutilization charges of the manufacturing facility in Shannon, Ireland and changes in product mix, offset by an increase in the level of material sales and inventory reserve. Total gross margin was 76% in the third quarter of 2023 as compared to 77% in the third quarter of 2022. Operating income was $48.4 million in the third quarter of 2023 as compared to $68.5 million in the third quarter of 2022. The effective income tax rate was an expense of 4.4% and 23.7% for the three months ended September 30, 2023 and 2022, respectively. The reduction in the effective income tax rate was primarily due to the change in IRS regulations, issued in July 2023, that permit withholding taxes to be credited against U.S. taxable income for the tax years 2022 and 2023. Net income was $51.5 million or $1.08 per diluted share in the third quarter of 2023 as compared to $53.5 million or $1.12 per diluted share in the third quarter of 2022. Revenue Comparison ($ in thousands) Three Months Ended September 30, 2023 2022 Material sales $ 92,492 $ 84,182 Royalty and license fees 45,915 71,450 Contract research services 2,670 4,924 Total revenue $ 141,077 $ 160,556 Cost of Materials Comparison ($ in thousands) Three Months Ended September 30, 2023 2022 Material sales $ 92,492 $ 84,182 Cost of material sales 31,639 34,057 Gross margin on material sales 60,853 50,125 Gross margin as a % of material sales 66 % 60 % Financial Highlights for the First Nine Months of 2023 Total revenue in the first nine months of 2023 was $418.1 million as compared to $447.6 million in the first nine months of 2022. Revenue from material sales was $239.8 million in the first nine months of 2023 as compared to $242.7 million in the first nine months of 2022. The decline in material sales was primarily due to reduced demand for our emitter material during the first quarter of 2023, partially offset by the introduction of blue emitter and host sales. Revenue from royalty and license fees was $165.5 million in the first nine months of 2023 as compared to $191.5 million in the first nine months of 2022. The decrease in royalty and license fees was primarily the result of higher estimated future demand for several of our customers over the remaining lives of their contracts, as well as a net $12.2 million reduction in revenue due to the difference in cumulative catch-up adjustments between periods, the majority of which was recorded to royalty and license fees. The cumulative catch-up adjustments in the first nine months of 2023 totaled $5.1 million compared to $17.3 million during the first nine months of 2022. Cost of material sales was $89.7 million in the first nine months of 2023 as compared to $89.0 million in the first nine months of 2022. Cost of material sales increased primarily due to underutilization of the manufacturing facility in Shannon, Ireland and changes in product mix, offset by a decrease in manufacturing costs and a decrease in the level of material sales. Total gross margin was 76% in the first nine months of 2023 as compared to 78% in the first nine months of 2022. Increased Shannon facility costs of $6.1 million and the inventory provision of $6.6 million in 2023 contributed to the 2% decrease in total gross margin between periods. Operating income was $152.4 million in the first nine months of 2023 as compared to $184.0 million in the first nine months of 2022. Net income was $141.0 million or $2.95 per diluted share in the first nine months of 2023 compared to $144.9 million or $3.04 per diluted share in the first nine months of 2022. Revenue Comparison ($ in thousands) Nine Months Ended September 30, 2023 2022 Material sales $ 239,789 $ 242,742 Royalty and license fees 165,524 191,530 Contract research services 12,796 13,315 Total revenue $ 418,109 $ 447,587 Cost of Materials Comparison ($ in thousands) Nine Months Ended September 30, 2023 2022 Material sales $ 239,789 $ 242,742 Cost of material sales 89,697 88,999 Gross margin on material sales 150,092 153,743 Gross margin as a % of material sales 63 % 63 % 2023 Revised Guidance The Company has revised its previous revenue guidance and now believes that 2023 revenue will be in the range of $565 million to $590 million. Dividend The Company also announced a fourth quarter cash dividend of $0.35 per share on the Company’s common stock. The dividend is payable on December 29, 2023 to all shareholders of record as of the close of business on December 15, 2023. Conference Call Information In conjunction with this release, Universal Display will host a conference call on Thursday, November 2, 2023 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 6,000 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 projected adoption, development and advancement of the Company’s technologies, and the Company’s expected results, 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, 2022. Universal Display Corporation disclaims any obligation to update any forward-looking statement contained in this document. Follow Universal Display Corporation Twitter Facebook YouTube (OLED-C) UNIVERSAL DISPLAY CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (UNAUDITED) (in thousands, except share and per share data) September 30, 2023 December 31, 2022 ASSETS CURRENT ASSETS: Cash and cash equivalents $ 79,323 $ 93,430 Short-term investments 412,350 484,345 Accounts receivable 122,192 92,664 Inventory 181,406 183,220 Other current assets 83,444 45,791 Total current assets 878,715 899,450 PROPERTY AND EQUIPMENT, net of accumulated depreciation of $137,020 and $117,118 174,638 143,445 ACQUIRED TECHNOLOGY, net of accumulated amortization of $182,657 and $189,671 94,518 38,382 OTHER INTANGIBLE ASSETS, net of accumulated amortization of $10,055 and $8,989 7,233 8,247 GOODWILL 15,535 15,535 INVESTMENTS 301,193 259,861 DEFERRED INCOME TAXES 49,637 58,161 OTHER ASSETS 101,447 109,739 TOTAL ASSETS $ 1,622,916 $ 1,532,820 LIABILITIES AND SHAREHOLDERS’ EQUITY CURRENT LIABILITIES: Accounts payable $ 20,624 $ 9,519 Accrued expenses 38,500 51,002 Deferred revenue 66,828 45,599 Other current liabilities 5,391 29,577 Total current liabilities 131,343 135,697 DEFERRED REVENUE 8,859 18,279 RETIREMENT PLAN BENEFIT LIABILITY 61,165 59,790 OTHER LIABILITIES 39,183 43,685 Total liabilities 240,550 257,451 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, 48,720,530 and 49,136,030 shares issued, and 47,354,882 and 47,770,382 shares outstanding, at September 30, 2023 and December 31, 2022, respectively 487 491 Additional paid-in capital 693,899 681,335 Retained earnings 744,227 653,277 Accumulated other comprehensive loss (14,965 ) (18,452 ) Treasury stock, at cost (1,365,648 shares at September 30, 2023 and December 31, 2022) (41,284 ) (41,284 ) Total shareholders’ equity 1,382,366 1,275,369 TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY $ 1,622,916 $ 1,532,820 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, 2023 2022 2023 2022 REVENUE: Material sales $ 92,492 $ 84,182 $ 239,789 $ 242,742 Royalty and license fees 45,915 71,450 165,524 191,530 Contract research services 2,670 4,924 12,796 13,315 Total revenue 141,077 160,556 418,109 447,587 COST OF SALES 34,248 37,396 99,357 97,798 Gross margin 106,829 123,160 318,752 349,789 OPERATING EXPENSES: Research and development 33,099 30,414 96,840 85,156 Selling, general and administrative 18,084 18,442 50,557 59,373 Amortization of acquired technology and other intangible assets 4,557 3,562 11,442 14,562 Patent costs 2,572 2,018 7,056 6,075 Royalty and license expense 81 261 414 596 Total operating expenses 58,393 54,697 166,309 165,762 OPERATING INCOME 48,436 68,463 152,443 184,027 Interest income, net 7,136 2,432 20,301 4,306 Other loss, net (1,693 ) (804 ) (3,180 ) (749 ) Interest and other income, net 5,443 1,628 17,121 3,557 INCOME BEFORE INCOME TAXES 53,879 70,091 169,564 187,584 INCOME TAX EXPENSE (2,363 ) (16,636 ) (28,531 ) (42,657 ) NET INCOME $ 51,516 $ 53,455 $ 141,033 $ 144,927 NET INCOME PER COMMON SHARE: BASIC $ 1.08 $ 1.12 $ 2.95 $ 3.04 DILUTED $ 1.08 $ 1.12 $ 2.95 $ 3.04 WEIGHTED AVERAGE SHARES USED IN COMPUTING NET INCOME PER COMMON SHARE: BASIC 47,570,099 47,396,495 47,555,734 47,386,426 DILUTED 47,632,431 47,466,934 47,609,692 47,455,893 CASH DIVIDENDS DECLARED PER COMMON SHARE $ 0.35 $ 0.30 $ 1.05 $ 0.90 UNIVERSAL DISPLAY CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (in thousands) Nine Months Ended September 30, 2023 2022 CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 141,033 $ 144,927 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation 20,128 17,982 Amortization of intangibles 11,442 14,562 Amortization of premium and discount on investments, net (9,436 ) (3,469 ) Stock-based compensation to employees 17,359 22,528 Stock-based compensation to Board of Directors and Scientific Advisory Board 1,264 1,121 Deferred income tax expense (benefit) 7,556 (7,876 ) Retirement plan expense, net of benefit payments 2,347 3,998 Decrease (increase) in assets: Accounts receivable (29,528 ) 29,446 Inventory 1,814 (46,034 ) Other current assets (37,653 ) (9,057 ) Other assets 8,292 2,282 Increase (decrease) in liabilities: Accounts payable and accrued expenses (32 ) 7,217 Other current liabilities (24,186 ) (543 ) Deferred revenue 11,809 (63,066 ) Other liabilities (4,502 ) 10,156 Net cash provided by operating activities 117,707 124,174 CASH FLOWS FROM INVESTING ACTIVITIES: Purchases of property and equipment (52,208 ) (31,119 ) Purchases of intangibles (66,563 ) (4,761 ) Purchases of investments (303,004 ) (464,766 ) Proceeds from sale and maturity of investments 346,407 302,872 Net cash used in investing activities (75,368 ) (197,774 ) CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from issuance of common stock 1,532 1,247 Payment of withholding taxes related to stock-based compensation to employees (7,895 ) (9,150 ) Cash dividends paid (50,083 ) (42,740 ) Net cash used in financing activities (56,446 ) (50,643 ) DECREASE IN CASH AND CASH EQUIVALENTS (14,107 ) (124,243 ) CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 93,430 311,993 CASH AND CASH EQUIVALENTS, END OF PERIOD $ 79,323 $ 187,750 Supplemental disclosures: Unrealized gain (loss) on available-for-sale securities $ 3,304 $ (9,711 ) 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 887 4,256 Cash paid for income tax 81,132 42,227 View source version on businesswire.com: https://www.businesswire.com/news/home/20231102241358/en/ “As we approach the end of 2023, our performance for the year remains on course. Looking ahead, we believe that multiple market verticals are driving the OLED industry’s long-term growth path.” Contacts Universal Display Contact: Darice Liu investor@oled.com media@oled.com +1 609-964-5123 Data & News supplied by www.cloudquote.io Stock quotes supplied by Barchart Quotes delayed at least 20 minutes. By accessing this page, you agree to the following Privacy Policy and Terms and Conditions.
Universal Display Corporation Announces Third Quarter 2023 Financial Results By: Universal Display Corporation via Business Wire November 02, 2023 at 16:05 PM EDT 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, 2023. “As we approach the end of 2023, our performance for the year remains on course. Looking ahead, we believe that multiple market verticals are driving the OLED industry’s long-term growth path,” said Brian Millard, Vice President and Chief Financial Officer of Universal Display Corporation. “A significant shift in the world of technology is occurring with the introduction of conformable, foldable and rollable consumer electronics, and OLEDs are fueling this form factor revolution. In addition to the expected commencement of a new OLED IT adoption cycle in 2024, we are also seeing the emergence of OLEDs in the automotive market, especially with electric vehicles. As OLED activity continues to expand across the consumer display and lighting landscapes, we remain steadfast in our commitment to advancing our robust OLED materials and technology leadership.” Financial Highlights for the Third Quarter of 2023 Total revenue in the third quarter of 2023 was $141.1 million as compared to $160.6 million in the third quarter of 2022. Revenue from material sales was $92.5 million in the third quarter of 2023 as compared to $84.2 million in the third quarter of 2022. This increase was primarily due to greater sales volumes of our emitter material as well as improved product mix weighted towards increased demand for our new generation of emitter products. Revenue from royalty and license fees was $45.9 million in the third quarter of 2023 as compared to $71.5 million in the third quarter of 2022. The decrease in royalty and license fees was primarily the result of changes in customer mix, a decrease in the cumulative catch-up adjustments between periods, as well as higher estimated future demand for several of our customers over the remaining lives of their contracts. Cost of material sales was $31.6 million in the third quarter of 2023 as compared to $34.1 million in the third quarter of 2022. This decrease was primarily due to a reduction in contract manufacturing support costs, a reduction in the underutilization charges of the manufacturing facility in Shannon, Ireland and changes in product mix, offset by an increase in the level of material sales and inventory reserve. Total gross margin was 76% in the third quarter of 2023 as compared to 77% in the third quarter of 2022. Operating income was $48.4 million in the third quarter of 2023 as compared to $68.5 million in the third quarter of 2022. The effective income tax rate was an expense of 4.4% and 23.7% for the three months ended September 30, 2023 and 2022, respectively. The reduction in the effective income tax rate was primarily due to the change in IRS regulations, issued in July 2023, that permit withholding taxes to be credited against U.S. taxable income for the tax years 2022 and 2023. Net income was $51.5 million or $1.08 per diluted share in the third quarter of 2023 as compared to $53.5 million or $1.12 per diluted share in the third quarter of 2022. Revenue Comparison ($ in thousands) Three Months Ended September 30, 2023 2022 Material sales $ 92,492 $ 84,182 Royalty and license fees 45,915 71,450 Contract research services 2,670 4,924 Total revenue $ 141,077 $ 160,556 Cost of Materials Comparison ($ in thousands) Three Months Ended September 30, 2023 2022 Material sales $ 92,492 $ 84,182 Cost of material sales 31,639 34,057 Gross margin on material sales 60,853 50,125 Gross margin as a % of material sales 66 % 60 % Financial Highlights for the First Nine Months of 2023 Total revenue in the first nine months of 2023 was $418.1 million as compared to $447.6 million in the first nine months of 2022. Revenue from material sales was $239.8 million in the first nine months of 2023 as compared to $242.7 million in the first nine months of 2022. The decline in material sales was primarily due to reduced demand for our emitter material during the first quarter of 2023, partially offset by the introduction of blue emitter and host sales. Revenue from royalty and license fees was $165.5 million in the first nine months of 2023 as compared to $191.5 million in the first nine months of 2022. The decrease in royalty and license fees was primarily the result of higher estimated future demand for several of our customers over the remaining lives of their contracts, as well as a net $12.2 million reduction in revenue due to the difference in cumulative catch-up adjustments between periods, the majority of which was recorded to royalty and license fees. The cumulative catch-up adjustments in the first nine months of 2023 totaled $5.1 million compared to $17.3 million during the first nine months of 2022. Cost of material sales was $89.7 million in the first nine months of 2023 as compared to $89.0 million in the first nine months of 2022. Cost of material sales increased primarily due to underutilization of the manufacturing facility in Shannon, Ireland and changes in product mix, offset by a decrease in manufacturing costs and a decrease in the level of material sales. Total gross margin was 76% in the first nine months of 2023 as compared to 78% in the first nine months of 2022. Increased Shannon facility costs of $6.1 million and the inventory provision of $6.6 million in 2023 contributed to the 2% decrease in total gross margin between periods. Operating income was $152.4 million in the first nine months of 2023 as compared to $184.0 million in the first nine months of 2022. Net income was $141.0 million or $2.95 per diluted share in the first nine months of 2023 compared to $144.9 million or $3.04 per diluted share in the first nine months of 2022. Revenue Comparison ($ in thousands) Nine Months Ended September 30, 2023 2022 Material sales $ 239,789 $ 242,742 Royalty and license fees 165,524 191,530 Contract research services 12,796 13,315 Total revenue $ 418,109 $ 447,587 Cost of Materials Comparison ($ in thousands) Nine Months Ended September 30, 2023 2022 Material sales $ 239,789 $ 242,742 Cost of material sales 89,697 88,999 Gross margin on material sales 150,092 153,743 Gross margin as a % of material sales 63 % 63 % 2023 Revised Guidance The Company has revised its previous revenue guidance and now believes that 2023 revenue will be in the range of $565 million to $590 million. Dividend The Company also announced a fourth quarter cash dividend of $0.35 per share on the Company’s common stock. The dividend is payable on December 29, 2023 to all shareholders of record as of the close of business on December 15, 2023. Conference Call Information In conjunction with this release, Universal Display will host a conference call on Thursday, November 2, 2023 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 6,000 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 projected adoption, development and advancement of the Company’s technologies, and the Company’s expected results, 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, 2022. Universal Display Corporation disclaims any obligation to update any forward-looking statement contained in this document. Follow Universal Display Corporation Twitter Facebook YouTube (OLED-C) UNIVERSAL DISPLAY CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (UNAUDITED) (in thousands, except share and per share data) September 30, 2023 December 31, 2022 ASSETS CURRENT ASSETS: Cash and cash equivalents $ 79,323 $ 93,430 Short-term investments 412,350 484,345 Accounts receivable 122,192 92,664 Inventory 181,406 183,220 Other current assets 83,444 45,791 Total current assets 878,715 899,450 PROPERTY AND EQUIPMENT, net of accumulated depreciation of $137,020 and $117,118 174,638 143,445 ACQUIRED TECHNOLOGY, net of accumulated amortization of $182,657 and $189,671 94,518 38,382 OTHER INTANGIBLE ASSETS, net of accumulated amortization of $10,055 and $8,989 7,233 8,247 GOODWILL 15,535 15,535 INVESTMENTS 301,193 259,861 DEFERRED INCOME TAXES 49,637 58,161 OTHER ASSETS 101,447 109,739 TOTAL ASSETS $ 1,622,916 $ 1,532,820 LIABILITIES AND SHAREHOLDERS’ EQUITY CURRENT LIABILITIES: Accounts payable $ 20,624 $ 9,519 Accrued expenses 38,500 51,002 Deferred revenue 66,828 45,599 Other current liabilities 5,391 29,577 Total current liabilities 131,343 135,697 DEFERRED REVENUE 8,859 18,279 RETIREMENT PLAN BENEFIT LIABILITY 61,165 59,790 OTHER LIABILITIES 39,183 43,685 Total liabilities 240,550 257,451 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, 48,720,530 and 49,136,030 shares issued, and 47,354,882 and 47,770,382 shares outstanding, at September 30, 2023 and December 31, 2022, respectively 487 491 Additional paid-in capital 693,899 681,335 Retained earnings 744,227 653,277 Accumulated other comprehensive loss (14,965 ) (18,452 ) Treasury stock, at cost (1,365,648 shares at September 30, 2023 and December 31, 2022) (41,284 ) (41,284 ) Total shareholders’ equity 1,382,366 1,275,369 TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY $ 1,622,916 $ 1,532,820 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, 2023 2022 2023 2022 REVENUE: Material sales $ 92,492 $ 84,182 $ 239,789 $ 242,742 Royalty and license fees 45,915 71,450 165,524 191,530 Contract research services 2,670 4,924 12,796 13,315 Total revenue 141,077 160,556 418,109 447,587 COST OF SALES 34,248 37,396 99,357 97,798 Gross margin 106,829 123,160 318,752 349,789 OPERATING EXPENSES: Research and development 33,099 30,414 96,840 85,156 Selling, general and administrative 18,084 18,442 50,557 59,373 Amortization of acquired technology and other intangible assets 4,557 3,562 11,442 14,562 Patent costs 2,572 2,018 7,056 6,075 Royalty and license expense 81 261 414 596 Total operating expenses 58,393 54,697 166,309 165,762 OPERATING INCOME 48,436 68,463 152,443 184,027 Interest income, net 7,136 2,432 20,301 4,306 Other loss, net (1,693 ) (804 ) (3,180 ) (749 ) Interest and other income, net 5,443 1,628 17,121 3,557 INCOME BEFORE INCOME TAXES 53,879 70,091 169,564 187,584 INCOME TAX EXPENSE (2,363 ) (16,636 ) (28,531 ) (42,657 ) NET INCOME $ 51,516 $ 53,455 $ 141,033 $ 144,927 NET INCOME PER COMMON SHARE: BASIC $ 1.08 $ 1.12 $ 2.95 $ 3.04 DILUTED $ 1.08 $ 1.12 $ 2.95 $ 3.04 WEIGHTED AVERAGE SHARES USED IN COMPUTING NET INCOME PER COMMON SHARE: BASIC 47,570,099 47,396,495 47,555,734 47,386,426 DILUTED 47,632,431 47,466,934 47,609,692 47,455,893 CASH DIVIDENDS DECLARED PER COMMON SHARE $ 0.35 $ 0.30 $ 1.05 $ 0.90 UNIVERSAL DISPLAY CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (in thousands) Nine Months Ended September 30, 2023 2022 CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 141,033 $ 144,927 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation 20,128 17,982 Amortization of intangibles 11,442 14,562 Amortization of premium and discount on investments, net (9,436 ) (3,469 ) Stock-based compensation to employees 17,359 22,528 Stock-based compensation to Board of Directors and Scientific Advisory Board 1,264 1,121 Deferred income tax expense (benefit) 7,556 (7,876 ) Retirement plan expense, net of benefit payments 2,347 3,998 Decrease (increase) in assets: Accounts receivable (29,528 ) 29,446 Inventory 1,814 (46,034 ) Other current assets (37,653 ) (9,057 ) Other assets 8,292 2,282 Increase (decrease) in liabilities: Accounts payable and accrued expenses (32 ) 7,217 Other current liabilities (24,186 ) (543 ) Deferred revenue 11,809 (63,066 ) Other liabilities (4,502 ) 10,156 Net cash provided by operating activities 117,707 124,174 CASH FLOWS FROM INVESTING ACTIVITIES: Purchases of property and equipment (52,208 ) (31,119 ) Purchases of intangibles (66,563 ) (4,761 ) Purchases of investments (303,004 ) (464,766 ) Proceeds from sale and maturity of investments 346,407 302,872 Net cash used in investing activities (75,368 ) (197,774 ) CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from issuance of common stock 1,532 1,247 Payment of withholding taxes related to stock-based compensation to employees (7,895 ) (9,150 ) Cash dividends paid (50,083 ) (42,740 ) Net cash used in financing activities (56,446 ) (50,643 ) DECREASE IN CASH AND CASH EQUIVALENTS (14,107 ) (124,243 ) CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 93,430 311,993 CASH AND CASH EQUIVALENTS, END OF PERIOD $ 79,323 $ 187,750 Supplemental disclosures: Unrealized gain (loss) on available-for-sale securities $ 3,304 $ (9,711 ) 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 887 4,256 Cash paid for income tax 81,132 42,227 View source version on businesswire.com: https://www.businesswire.com/news/home/20231102241358/en/ “As we approach the end of 2023, our performance for the year remains on course. Looking ahead, we believe that multiple market verticals are driving the OLED industry’s long-term growth path.” Contacts Universal Display Contact: Darice Liu investor@oled.com media@oled.com +1 609-964-5123
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, 2023. “As we approach the end of 2023, our performance for the year remains on course. Looking ahead, we believe that multiple market verticals are driving the OLED industry’s long-term growth path,” said Brian Millard, Vice President and Chief Financial Officer of Universal Display Corporation. “A significant shift in the world of technology is occurring with the introduction of conformable, foldable and rollable consumer electronics, and OLEDs are fueling this form factor revolution. In addition to the expected commencement of a new OLED IT adoption cycle in 2024, we are also seeing the emergence of OLEDs in the automotive market, especially with electric vehicles. As OLED activity continues to expand across the consumer display and lighting landscapes, we remain steadfast in our commitment to advancing our robust OLED materials and technology leadership.” Financial Highlights for the Third Quarter of 2023 Total revenue in the third quarter of 2023 was $141.1 million as compared to $160.6 million in the third quarter of 2022. Revenue from material sales was $92.5 million in the third quarter of 2023 as compared to $84.2 million in the third quarter of 2022. This increase was primarily due to greater sales volumes of our emitter material as well as improved product mix weighted towards increased demand for our new generation of emitter products. Revenue from royalty and license fees was $45.9 million in the third quarter of 2023 as compared to $71.5 million in the third quarter of 2022. The decrease in royalty and license fees was primarily the result of changes in customer mix, a decrease in the cumulative catch-up adjustments between periods, as well as higher estimated future demand for several of our customers over the remaining lives of their contracts. Cost of material sales was $31.6 million in the third quarter of 2023 as compared to $34.1 million in the third quarter of 2022. This decrease was primarily due to a reduction in contract manufacturing support costs, a reduction in the underutilization charges of the manufacturing facility in Shannon, Ireland and changes in product mix, offset by an increase in the level of material sales and inventory reserve. Total gross margin was 76% in the third quarter of 2023 as compared to 77% in the third quarter of 2022. Operating income was $48.4 million in the third quarter of 2023 as compared to $68.5 million in the third quarter of 2022. The effective income tax rate was an expense of 4.4% and 23.7% for the three months ended September 30, 2023 and 2022, respectively. The reduction in the effective income tax rate was primarily due to the change in IRS regulations, issued in July 2023, that permit withholding taxes to be credited against U.S. taxable income for the tax years 2022 and 2023. Net income was $51.5 million or $1.08 per diluted share in the third quarter of 2023 as compared to $53.5 million or $1.12 per diluted share in the third quarter of 2022. Revenue Comparison ($ in thousands) Three Months Ended September 30, 2023 2022 Material sales $ 92,492 $ 84,182 Royalty and license fees 45,915 71,450 Contract research services 2,670 4,924 Total revenue $ 141,077 $ 160,556 Cost of Materials Comparison ($ in thousands) Three Months Ended September 30, 2023 2022 Material sales $ 92,492 $ 84,182 Cost of material sales 31,639 34,057 Gross margin on material sales 60,853 50,125 Gross margin as a % of material sales 66 % 60 % Financial Highlights for the First Nine Months of 2023 Total revenue in the first nine months of 2023 was $418.1 million as compared to $447.6 million in the first nine months of 2022. Revenue from material sales was $239.8 million in the first nine months of 2023 as compared to $242.7 million in the first nine months of 2022. The decline in material sales was primarily due to reduced demand for our emitter material during the first quarter of 2023, partially offset by the introduction of blue emitter and host sales. Revenue from royalty and license fees was $165.5 million in the first nine months of 2023 as compared to $191.5 million in the first nine months of 2022. The decrease in royalty and license fees was primarily the result of higher estimated future demand for several of our customers over the remaining lives of their contracts, as well as a net $12.2 million reduction in revenue due to the difference in cumulative catch-up adjustments between periods, the majority of which was recorded to royalty and license fees. The cumulative catch-up adjustments in the first nine months of 2023 totaled $5.1 million compared to $17.3 million during the first nine months of 2022. Cost of material sales was $89.7 million in the first nine months of 2023 as compared to $89.0 million in the first nine months of 2022. Cost of material sales increased primarily due to underutilization of the manufacturing facility in Shannon, Ireland and changes in product mix, offset by a decrease in manufacturing costs and a decrease in the level of material sales. Total gross margin was 76% in the first nine months of 2023 as compared to 78% in the first nine months of 2022. Increased Shannon facility costs of $6.1 million and the inventory provision of $6.6 million in 2023 contributed to the 2% decrease in total gross margin between periods. Operating income was $152.4 million in the first nine months of 2023 as compared to $184.0 million in the first nine months of 2022. Net income was $141.0 million or $2.95 per diluted share in the first nine months of 2023 compared to $144.9 million or $3.04 per diluted share in the first nine months of 2022. Revenue Comparison ($ in thousands) Nine Months Ended September 30, 2023 2022 Material sales $ 239,789 $ 242,742 Royalty and license fees 165,524 191,530 Contract research services 12,796 13,315 Total revenue $ 418,109 $ 447,587 Cost of Materials Comparison ($ in thousands) Nine Months Ended September 30, 2023 2022 Material sales $ 239,789 $ 242,742 Cost of material sales 89,697 88,999 Gross margin on material sales 150,092 153,743 Gross margin as a % of material sales 63 % 63 % 2023 Revised Guidance The Company has revised its previous revenue guidance and now believes that 2023 revenue will be in the range of $565 million to $590 million. Dividend The Company also announced a fourth quarter cash dividend of $0.35 per share on the Company’s common stock. The dividend is payable on December 29, 2023 to all shareholders of record as of the close of business on December 15, 2023. Conference Call Information In conjunction with this release, Universal Display will host a conference call on Thursday, November 2, 2023 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 6,000 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 projected adoption, development and advancement of the Company’s technologies, and the Company’s expected results, 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, 2022. Universal Display Corporation disclaims any obligation to update any forward-looking statement contained in this document. Follow Universal Display Corporation Twitter Facebook YouTube (OLED-C) UNIVERSAL DISPLAY CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (UNAUDITED) (in thousands, except share and per share data) September 30, 2023 December 31, 2022 ASSETS CURRENT ASSETS: Cash and cash equivalents $ 79,323 $ 93,430 Short-term investments 412,350 484,345 Accounts receivable 122,192 92,664 Inventory 181,406 183,220 Other current assets 83,444 45,791 Total current assets 878,715 899,450 PROPERTY AND EQUIPMENT, net of accumulated depreciation of $137,020 and $117,118 174,638 143,445 ACQUIRED TECHNOLOGY, net of accumulated amortization of $182,657 and $189,671 94,518 38,382 OTHER INTANGIBLE ASSETS, net of accumulated amortization of $10,055 and $8,989 7,233 8,247 GOODWILL 15,535 15,535 INVESTMENTS 301,193 259,861 DEFERRED INCOME TAXES 49,637 58,161 OTHER ASSETS 101,447 109,739 TOTAL ASSETS $ 1,622,916 $ 1,532,820 LIABILITIES AND SHAREHOLDERS’ EQUITY CURRENT LIABILITIES: Accounts payable $ 20,624 $ 9,519 Accrued expenses 38,500 51,002 Deferred revenue 66,828 45,599 Other current liabilities 5,391 29,577 Total current liabilities 131,343 135,697 DEFERRED REVENUE 8,859 18,279 RETIREMENT PLAN BENEFIT LIABILITY 61,165 59,790 OTHER LIABILITIES 39,183 43,685 Total liabilities 240,550 257,451 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, 48,720,530 and 49,136,030 shares issued, and 47,354,882 and 47,770,382 shares outstanding, at September 30, 2023 and December 31, 2022, respectively 487 491 Additional paid-in capital 693,899 681,335 Retained earnings 744,227 653,277 Accumulated other comprehensive loss (14,965 ) (18,452 ) Treasury stock, at cost (1,365,648 shares at September 30, 2023 and December 31, 2022) (41,284 ) (41,284 ) Total shareholders’ equity 1,382,366 1,275,369 TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY $ 1,622,916 $ 1,532,820 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, 2023 2022 2023 2022 REVENUE: Material sales $ 92,492 $ 84,182 $ 239,789 $ 242,742 Royalty and license fees 45,915 71,450 165,524 191,530 Contract research services 2,670 4,924 12,796 13,315 Total revenue 141,077 160,556 418,109 447,587 COST OF SALES 34,248 37,396 99,357 97,798 Gross margin 106,829 123,160 318,752 349,789 OPERATING EXPENSES: Research and development 33,099 30,414 96,840 85,156 Selling, general and administrative 18,084 18,442 50,557 59,373 Amortization of acquired technology and other intangible assets 4,557 3,562 11,442 14,562 Patent costs 2,572 2,018 7,056 6,075 Royalty and license expense 81 261 414 596 Total operating expenses 58,393 54,697 166,309 165,762 OPERATING INCOME 48,436 68,463 152,443 184,027 Interest income, net 7,136 2,432 20,301 4,306 Other loss, net (1,693 ) (804 ) (3,180 ) (749 ) Interest and other income, net 5,443 1,628 17,121 3,557 INCOME BEFORE INCOME TAXES 53,879 70,091 169,564 187,584 INCOME TAX EXPENSE (2,363 ) (16,636 ) (28,531 ) (42,657 ) NET INCOME $ 51,516 $ 53,455 $ 141,033 $ 144,927 NET INCOME PER COMMON SHARE: BASIC $ 1.08 $ 1.12 $ 2.95 $ 3.04 DILUTED $ 1.08 $ 1.12 $ 2.95 $ 3.04 WEIGHTED AVERAGE SHARES USED IN COMPUTING NET INCOME PER COMMON SHARE: BASIC 47,570,099 47,396,495 47,555,734 47,386,426 DILUTED 47,632,431 47,466,934 47,609,692 47,455,893 CASH DIVIDENDS DECLARED PER COMMON SHARE $ 0.35 $ 0.30 $ 1.05 $ 0.90 UNIVERSAL DISPLAY CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (in thousands) Nine Months Ended September 30, 2023 2022 CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 141,033 $ 144,927 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation 20,128 17,982 Amortization of intangibles 11,442 14,562 Amortization of premium and discount on investments, net (9,436 ) (3,469 ) Stock-based compensation to employees 17,359 22,528 Stock-based compensation to Board of Directors and Scientific Advisory Board 1,264 1,121 Deferred income tax expense (benefit) 7,556 (7,876 ) Retirement plan expense, net of benefit payments 2,347 3,998 Decrease (increase) in assets: Accounts receivable (29,528 ) 29,446 Inventory 1,814 (46,034 ) Other current assets (37,653 ) (9,057 ) Other assets 8,292 2,282 Increase (decrease) in liabilities: Accounts payable and accrued expenses (32 ) 7,217 Other current liabilities (24,186 ) (543 ) Deferred revenue 11,809 (63,066 ) Other liabilities (4,502 ) 10,156 Net cash provided by operating activities 117,707 124,174 CASH FLOWS FROM INVESTING ACTIVITIES: Purchases of property and equipment (52,208 ) (31,119 ) Purchases of intangibles (66,563 ) (4,761 ) Purchases of investments (303,004 ) (464,766 ) Proceeds from sale and maturity of investments 346,407 302,872 Net cash used in investing activities (75,368 ) (197,774 ) CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from issuance of common stock 1,532 1,247 Payment of withholding taxes related to stock-based compensation to employees (7,895 ) (9,150 ) Cash dividends paid (50,083 ) (42,740 ) Net cash used in financing activities (56,446 ) (50,643 ) DECREASE IN CASH AND CASH EQUIVALENTS (14,107 ) (124,243 ) CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 93,430 311,993 CASH AND CASH EQUIVALENTS, END OF PERIOD $ 79,323 $ 187,750 Supplemental disclosures: Unrealized gain (loss) on available-for-sale securities $ 3,304 $ (9,711 ) 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 887 4,256 Cash paid for income tax 81,132 42,227 View source version on businesswire.com: https://www.businesswire.com/news/home/20231102241358/en/
“As we approach the end of 2023, our performance for the year remains on course. Looking ahead, we believe that multiple market verticals are driving the OLED industry’s long-term growth path.”