Universal Display Corporation Announces Fourth Quarter and Full Year 2012 Financial Results Business Wire EWING, N.J. -- February 27, 2013 Universal Display Corporation (NASDAQ: PANL), enabling energy-efficient displays and lighting with its UniversalPHOLED^® technology and materials, today announced its results for the fourth quarter and year ended December 31, 2012. For the full year of 2012, the company reported revenues of $83.2 million, up 36% compared to revenues of $61.3 million for 2011. Operating income rose to $13.7 million for the year, up 141% from $5.7 million in 2011. The company reported net income of $9.7 million, or $0.21 per diluted share, for the full year of 2012, compared to net income of $3.2 million, or $0.07 per diluted share, for 2011. “Universal Display Corporation reported a second consecutive profitable year on the strength of a solid finish to 2012,” said Sidney D. Rosenblatt, Executive Vice President and Chief Financial Officer of Universal Display. “As we continue to grow, we are building a business that we believe can deliver strong gross margins, produce high operating leverage and generate strong cash flow. Our goal is to solidify and extend our market leadership to capitalize on the growth of the OLED market. With our strong financial position, industry-leading technology, and extensive relationships throughout the industry, we are very excited about the competitive advantages we believe we have established and our expectation that we will be able to use these resources to bring OLED technology into the lives of the global community.” Material sales for 2012 were $44.5 million, up 19% compared to $37.4 million for 2011. Royalty and license fees for 2012 were $31.7 million, up 107% compared to $15.3 million for 2011 as a result of the licensing agreement with Samsung Display Corporation (SDC, and formerly Samsung Mobile Display) being in place for the full year. Technology development and support revenue was $7.1 million for 2012, down 17% compared to $8.5 million for 2011. Cash provided by operating activities was $17.8 million in 2012, compared to $16.4 million in 2011, primarily due to an improvement in net income. The company’s balance sheet remained strong at December31, 2012, with cash, cash equivalents and short-term investments of $243.9 million, which reflects the $109.1 million used this year to purchase Fujifilm’s worldwide patent portfolio of more than 1,200 OLED patents and patent applications. During the fourth quarter of 2012, the company used $5.2 million of its $50 million authorization to repurchase approximately 206,000 of our shares. FOURTH QUARTER RESULTS For the fourth quarter of 2012, the company reported revenues of $28.1 million and operating income of $8.4 million, increases of 51% and 135%, respectively, over fourth quarter 2011 revenues of $18.7 million and operating income of $3.6 million. Net income for the fourth quarter of 2012 was $5.4 million, or $0.12 per diluted share, compared to net income of $5.7 million, or $0.12 per diluted share, for the fourth quarter of 2011. Fourth quarter 2011 net income and earnings per share reflect a net tax benefit of approximately $2.7 million as a result of the sale of state-related net operating losses and tax credits, whereas there were no similar benefits in the fourth quarter of 2012. Royalty and license fees in the fourth quarter of 2012 were $15.4 million, up 184% compared to $5.4 million in the fourth quarter of 2011 primarily due to increased revenue under the licensing agreement with SDC. Material sales were $10.1 million for the 2012 quarter, down 7% compared to $10.8 million for the fourth quarter of 2011. Total operating expenses for the fourth quarter increased $4.7 million compared to the fourth quarter of 2011, with $3.6 million of the increase attributable to higher patent costs and amortization of acquired technology as a result of the Fujifilm patent portfolio acquisition. Mr. Rosenblatt concluded, “For nearly 20 years, Universal Display has championed OLED technology as a better performing, more efficient alternative to existing display and lighting technology. Consequently, we are extremely pleased with the excitement created by the OLED displays currently in the market, and the increase in new OLED product development that has been encouraged by these initial successes. Beyond today’s focus on materials and technology for both large and small format displays, we are working on new generations of products that we believe have the potential to significantly increase our total addressable market, such as encapsulation and solution-based technology. Over the past year, through the acquisition of OLED patent portfolios, new partnerships with companies both domestically and in South Korea, and the expansion of our facilities, we have been making the investments that we anticipate will enable us to remain at the forefront of an industry that we believe is only now entering the early stages of a period of significant growth.” GUIDANCE The company’s arrangement with SDC provides a substantial amount of visibility into its potential future financial performance. Although the OLED industry is still at a stage where many variables can have a material effect on growth, in an effort to increase our transparency, Universal Display is providing the following financial guidance. Again with the caveat that the OLED industry is still in an early stage, the company believes that its revenues will be in the range of $110 million to $125 million for fiscal 2013. In conjunction with this release, Universal Display will host a conference call, followed by a question and answer session, on Wednesday, February 27, 2013 at 5:00 p.m. Eastern Time. Interested parties may participate by calling 888-271-8594 at 5:00 p.m. Eastern Time and referencing conference ID 4380580. The conference call will be simultaneously broadcast live over the Internet through a webcast on the Universal Display website. To access the call, please visit the events portion of the website at www.universaldisplay.com. 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: PANL) is a leader in developing and delivering state-of-the-art, organic light emitting diode (OLED) technologies, materials and services to the display and lighting industries. Founded in 1994, the company currently owns or has exclusive, co-exclusive or sole license rights with respect to more than 3,000 issued and pending patents worldwide, including those acquired from Fujifilm. Universal Display licenses its proprietary technologies, including its breakthrough high-efficiency UniversalPHOLED^® phosphorescent OLED technology, that can enable the development of low power and eco-friendly displays and white 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. Based in Ewing, New Jersey, Universal Display works and partners with a network of world-class organizations, including Princeton University, the University of Southern California, the University of Michigan, and PPG Industries, Inc. The company has also established relationships with companies such as AU Optronics Corporation, DuPont Displays, Inc., Innolux Corporation, Konica Minolta Technology Center, Inc., LG Display Co., Ltd., Lumiotec, Inc., Moser Baer Technologies Inc., Panasonic Idemitsu OLED Lighting Co., Pioneer Corporation, Samsung Display Corporation, Seiko Epson Corporation, Sony Corporation, Showa Denko K.K., and Tohoku Pioneer Corporation. To learn more about Universal Display, please visit www.universaldisplay.com. Universal Display Corporation and the Universal Display 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 Universal Display Corporation’s technologies and potential applications of those technologies, are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements concern possible or assumed future results of operations, including descriptions of our business strategies and customer relationships. These statements often include words such as “believe,” “expect,” “anticipate,” “intend,” “plan,” “estimate,” “seek,” “will,” “goal,” “may” or similar expressions. 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 based on assumptions that we have made in light of our experience in the industry, as well as our perceptions of historical trends, current conditions, expected future developments and other factors we believe are appropriate in these circumstances, and are thus 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, 2012. Universal Display Corporation disclaims any obligation to update any forward-looking statement contained in this document. Tables Follow: UNIVERSAL DISPLAY CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (unaudited) (in thousands, except for share and per share data) December 31, 2012 2011 ASSETS CURRENT ASSETS: Cash and cash equivalents $ 85,923 $ 111,795 Short-term investments 158,018 234,294 Accounts receivable 8,657 10,727 Inventory 11,018 3,843 Other current assets 3,929 1,645 Total current assets 267,545 362,304 PROPERTY AND EQUIPMENT, net 11,808 10,884 ACQUIRED TECHNOLOGY, net 104,624 391 INVESTMENTS 1,270 — OTHER ASSETS 277 299 TOTAL ASSETS $ 385,524 $ 373,878 LIABILITIES AND SHAREHOLDERS’ EQUITY CURRENT LIABILITIES: Accounts payable $ 7,596 $ 4,776 Accrued expenses 10,394 9,020 Deferred revenue 4,273 5,534 Other current liabilities 36 187 Total current liabilities 22,299 19,517 DEFERRED REVENUE 3,153 3,874 RETIREMENT PLAN BENEFIT LIABILITY 9,837 8,260 Total liabilities 35,289 31,651 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 2 2 outstanding (liquidation value of $7.50 per share or $1,500) Common Stock, par value $0.01 per share, 100,000,000 shares authorized, 46,561,437 and 46,113,296 shares 465 461 issued at December 31, 2012 and 2011, respectively Additional paid-in capital 564,883 561,492 Accumulated deficit (204,211 ) (213,871) Accumulated other comprehensive loss (5,702 ) (5,857) Treasury stock, at cost (205,902 shares at December (5,202 ) — 31, 2012) Total shareholders’ equity 350,235 342,227 TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY $ 385,524 $ 373,878 UNIVERSAL DISPLAY CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited) (in thousands except for share and per share data) Three Months Ended December 31, 2012 2011 REVENUE: Material sales $ 10,111 $ 10,840 Royalty and license fees 15,445 5,447 Technology development and support revenue 2,577 2,372 Total revenue 28,133 18,659 OPERATING EXPENSES: Cost of material sales 735 1,080 Research and development 7,958 5,943 Selling, general and administrative 4,789 5,615 Patent costs and amortization of acquired 5,526 1,976 technology Royalty and license expense 754 478 Total operating expenses 19,762 15,092 Operating income 8,371 3,567 INTEREST INCOME 254 350 INTEREST EXPENSE (5 ) (19 ) INCOME BEFORE INCOME TAXES 8,620 3,898 INCOME TAX (EXPENSE) BENEFIT (3,235 ) 1,836 NET INCOME $ 5,385 $ 5,734 NET INCOME PER COMMON SHARE: BASIC $ 0.12 $ 0.13 DILUTED $ 0.12 $ 0.12 WEIGHTED AVERAGE SHARES USED IN COMPUTING NET INCOME PER COMMON SHARE: BASIC 46,051,637 45,625,323 DILUTED 46,794,260 46,896,277 UNIVERSAL DISPLAY CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited) (in thousands except for share and per share data) Year Ended December 31, 2012 2011 REVENUE: Material sales $ 44,472 $ 37,444 Royalty and license fees 31,698 15,345 Technology development and support revenue 7,074 8,500 Total revenue 83,244 61,289 OPERATING EXPENSES: Cost of material sales 4,528 3,731 Research and development 30,032 24,129 Selling, general and administrative 19,550 18,940 Patent costs and amortization of acquired 13,385 7,442 technology Royalty and license expense 2,073 1,360 Total operating expenses 69,568 55,602 Operating income 13,676 5,687 INTEREST INCOME 1,240 994 INTEREST EXPENSE (48 ) (50 ) LOSS ON STOCK WARRANT LIABILITY — (4,190 ) INCOME BEFORE INCOME TAXES 14,868 2,441 INCOME TAX (EXPENSE) BENEFIT (5,208 ) 714 NET INCOME $ 9,660 $ 3,155 NET INCOME PER COMMON SHARE: BASIC $ 0.21 $ 0.07 DILUTED $ 0.21 $ 0.07 WEIGHTED AVERAGE SHARES USED IN COMPUTING NET INCOME PER COMMON SHARE: BASIC 45,951,276 43,737,968 DILUTED 46,883,602 45,140,394 UNIVERSAL DISPLAY CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited) (in thousands) Year Ended December 31, 2012 2011 CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 9,660 $ 3,155 Adjustments to reconcile net income to net cash provided by operating activities: Amortization of deferred revenue (5,284 ) (3,275 ) Depreciation 1,978 1,451 Amortization of intangibles 4,869 49 Amortization of premium and discount on (778 ) (775 ) investments, net Stock-based employee compensation 4,263 4,373 Stock-based non-employee compensation — 6 Non-cash expense under materials and license — 9 agreements Stock-based compensation to Board of Directors and 781 1,377 Scientific Advisory Board Loss on stock warrant liability — 4,190 Retirement plan benefit expense 1,600 1,527 Decrease (increase) in assets: Accounts receivable 2,070 (3,479 ) Inventory (7,175 ) (3,841 ) Other current assets (2,284 ) 341 Other assets 22 (82 ) Increase in liabilities: Accounts payable and accrued expenses 4,718 6,775 Other current liabilities 11 23 Deferred revenue 3,303 4,585 Net cash provided by operating activities 17,754 16,409 CASH FLOWS FROM INVESTING ACTIVITIES: Purchases of property and equipment (2,737 ) (2,624 ) Purchases of intangibles (109,102 ) (440 ) Purchases of short-term investments (304,500 ) (337,442 ) Proceeds from sale of short-term investments 380,253 156,717 Net cash used in investing activities (36,086 ) (183,789 ) CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from issuance of common stock 321 249,936 Repurchase of common stock (5,202 ) — Proceeds from the exercise of common stock options 1,483 13,343 and warrants Payment of withholding taxes related to stock-based (4,142 ) (4,473 ) employee compensation Net cash (used in) provided by financing activities (7,540 ) 258,806 (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS (25,872 ) 91,426 CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR 111,795 20,369 CASH AND CASH EQUIVALENTS, END OF YEAR $ 85,923 $ 111,795 Contact: Universal Display Corporation Media Contact: Gregory FCA Matt McLoughlin, 610-228-2123 firstname.lastname@example.org or Investor Relations: Gregory FCA Joe Hassett, 610-228-2110 email@example.com
Universal Display Corporation Announces Fourth Quarter and Full Year 2012 Financial Results
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