UniPixel Reports Second Quarter 2013 Results

UniPixel Reports Second Quarter 2013 Results 
THE WOODLANDS, TX -- (Marketwired) -- 08/08/13 --  UniPixel, Inc.
(NASDAQ: UNXL), a provider of Performance Engineered Films(TM) to the
touch screen, flexible printed electronics, and lighting and display
markets, reported results for the second quarter ended June 30, 2013. 
Second Quarter 2013 Highlights 


 
--  Signed multi-million dollar preferred price and capacity license with
    a major ecosystem partner to facilitate the development, introduction
    and production of products that feature next-generation touch screens
    based on UniPixel's UniBoss(TM) pro-cap, multi-touch sensor film.
    Under the terms of the license, UniPixel subsequently received $5
    million milestone payment recorded as deferred revenue, which is
    currently financing the build out of an additional one million square
    feet per month of production capacity for UniBoss.
    
    
--  Entered into a manufacturing and supply agreement to produce
    next-generation touch sensors based on UniBoss(TM) technology.
    UniPixel and Kodak have begun constructing a state-of-the-art
    manufacturing and testing facility within the Eastman Business Park in
    Rochester, New York, with nearly 100,000 square feet of manufacturing
    space for the UniBoss roll-to-roll printing and plating lines. In
    2013, approximately $24 million has been allocated to improve and
    equip the Kodak Rochester facility, which includes the installation of
    two printing lines and up to 15 plating lines.
    
    
--  Received two printing lines at Kodak Rochester facility and two
    plating lines at the company's Texas facility, bringing the total
    plating lines at its Texas facility to three. The company ordered four
    more plating machines, which will be modified with UniBoss technology
    and delivered to the Kodak Rochester facility in the third quarter of
    2013. Each printer will be capable of producing 1 million units or
    square feet per month in a roll-to-roll process, and with line widths
    down to 5 microns.
    
    
--  Completed build-out of newly leased 7,500 square foot office and wet
    lab space, bringing its Woodlands facilities to more than 20,000
    square feet. The wet lab area includes a chemistry lab for ink
    formulations and process validation, as well as analytical tools to
    support both manufacturing quality control and customer support.
    
    
--  Launched Diamond Guard(TM) Resin business model to enable functional
    hard coats that can be applied to film as well as three dimensional
    applications such as cases. The move to the resin business model
    allows UniPixel to reach many more applications and customers with its
    Diamond Guard hard coat product.
    
    
--  Appointed Robert A. Rusenko as VP of manufacturing. He brings more
    than 12 years of executive management experience from GE and DuPont in
    the performance material and chemical industries with a strong track
    record of improving manufacturing productivity levels, implementing
    Six Sigma black belt practices to create the most efficient and
    productive commercial manufacturing processes possible.
    
    
--  Completed a $41.2 million (net) equity raise, with the use of proceeds
    for working capital and general corporate purposes.
    
    
--  Joined the Russell 3000(R) Index and the Russell Global Index,
    which are widely used by investment managers and institutional
    investors for index funds, and as benchmarks for both passive and
    active investment strategies.
    
    
--  Enhanced UniPixel's IP portfolio with 14 patent applications submitted
    during the quarter. The company's IP portfolio currently totals 93
    patent applications submitted, with two patents issued. Enhancing the
    IP portfolio remains a priority for creating strategic value and
    establishing barriers to entry, and there are currently more than 17
    patent applications the company is preparing to submit over the
    remainder of 2013.

  
Q2 2013 Financial Summary
 In the second quarter of 2013, the company
received a $5 million milestone payment from its ecosystem partner
that was recorded as deferred revenue, resulting in marginal revenue
reported in the quarter as the company focused on advancing the
manufacturing build-out and market introduction of UniBoss. For the
first six months of 2013, revenue totaled $5.1 million, as compared
to $74,124 in the same year-ago period. The increase for the first
half of 2013 was primarily due to a $5.0 million payment received by
the company's PC maker licensee. 
Selling, general and administrative (SG&A) expenses in the second
quarter of 2013 totaled $2.2 million, as compared to $0.9 million in
same year-ago quarter. The increase was primarily due to an increase
in salaries and benefits, partially driven by an increase in stock
compensation expense, restricted stock expense and the number of
employees, as well as an increase in legal expenses. SG&A expenses in
the first half of 2013 totaled $4.4 million, as compared to $1.8
million in the same year-ago period. The increase in the first half
of 2013 was primarily due to an increase in salaries, number of
employees, stock compensation expense, restricted stock expenses and
employee bonus expense, as well as an increase in legal expenses. 
Research and development expenses in the second quarter of 2013
totaled $2.5 million as compared to $1.2 million in the same year-ago
quarter. Research and development expenses in the first half of 2013
totaled $4.5 million, as compared to $2.3 million in the same
year-ago period. The increase in both periods was primarily due to
increased lab expense related to prototype development of products
based on the company's performance engineered films. 
Net loss was $4.7 million or $(0.40) per share in the second quarter
of 2013, as compared to a net loss of $2.0 million or $(0.29) per
share in the same year-ago quarter. Net loss was $3.7 million or
$(0.35) per share in the first half of 2013, as compared to a net
loss of $4.1 million or $(0.57) per share in the same year-ago
period.  
Cash and cash equivalents totaled $53.4 million at June 30, 2013, as
compared to $15.7 million at March 31, 2013. The increase was
primarily due the equity raise completed during the quarter. 
Management Commentary
 "Our second quarter demonstrated strong
progress with our preferred price and capacity model for UniBoss,"
said Reed Killion, president and CEO of UniPixel. "This included
signing a second preferred price and capacity license with a major
consumer electronics ecosystem partner. Based on a milestone we
quickly met under this license agreement, we received a $5.0 million
payment that we recorded as deferred non-recurring engineering
revenue. The funds are supporting the build out of an additional one
million square feet per month of UniBoss equipment capacity in
preparation for meeting anticipated customer demand. 
"Together with Kodak, we've completed the deconstruction on our state
of the art manufacturing and testing facility at the Eastman Business
Park, which has more than 100,000 square feet of manufacturing space
for our UniBoss roll-to-roll printing and plating lines. We are now
working on second and third floor of the Kodak facility. Along with
utilizing the Kodak's infrastructure, including 40 dedicated
full-time employees, our manufacturing and supply relationship with
Kodak allows us to be completely vertically integrated, as well
provide us lab access and resources for deconstructive analysis,
processing and metrology. 
"We are also in the process of documenting our manufacturing
processes in order to achieve ISO 9000 and ISO 14000 certifications.
During this process, we are closely integrated with our manufacturing
and ecosystem partners on understanding and meeting expectations in
terms of quality documentation. Our global licensees and
manufacturing partners both have tier 1 qualification processes, so
we believe UniPixel is qualifying at the highest level. 
"To ramp up equipment capacity, the two printing lines that were
delivered to the Kodak Rochester facility and two plating lines that
were delivered to our Texas facility during the second quarter are
currently being installed and calibrated for our UniBoss
manufacturing process. Last month, we hit our stated equipment
capacity milestone of 200,000 square feet per month, which keeps us
on track to ramp up equipment capacity to 700,000 square feet per
month by the end of September and 1.3 million by January of 2014. And
we're still planning to build out equipment capacity throughout 2014
to support ever increasing anticipated demand, with this accomplished
by expanding the Rochester site and adding additional printing and
plating lines, while increasing throughput via continuous process
improvement. We expect four plating lines to be delivered at Kodak
Rochester facility in the third quarter of 2013. 
"For the second half of 2013, while there continues to be numerous
market opportunities for our performance engineered films, we will
remain laser focused on the successful global market introduction of
our UniBoss touch screen technology. As we continue to work closely
with our worldwide licensee and manufacturing partners to design
end-products, refine and certify our processes, and build out
commercial-level equipment capacity, we continue to be on track for
generating production revenue in the fourth quarter of 2013." 
Conference Call
 UniPixel President and CEO Reed Killion and CFO Jeff
Tomz will host a conference call later today to discuss the second
quarter and outlook for 2013, followed by a question and answer
period. 
The call will be webcast live here, as well as via a link in the
Investors section of the company's website at
www.unipixel.com/investors. Webcast participants will be able to
submit a question to management via the webcast player. 
Date: Thursday, August 8, 2013
 Time: 4:30 p.m. Eastern time (3:30
p.m. Central time)
 Webcast:
http://public.viavid.com/index.php?id=105272 
To participate in the conference call via telephone, dial
1-480-629-9712 and provide the conference name or conference ID
4629606. Please call the conference telephone number 5-10 minutes
prior to the start time so the operator can register your name and
organization.  
If you have any difficulty with the webcast or connecting to the
call, please contact Liolios Group at 1-949-574-3860. 
A replay of the call will be available after 7:30 p.m. Eastern time
on the same day through September 8, 2013, via the same link above,
or by dialing 1-858-384-5517 and entering replay ID 4629606. 
About UniBoss 
 A UniBoss touch-screen offers higher touch response
and sensitivity, superior touch distinction, better durability, and
lower power requirements. UniBoss offers the touch ecosystem the
unique advantages of metal mesh touch sensors based on an additive,
roll-to-roll, flexible electronics process, as compared to the
traditional subtractive ITO-based and subtractive ITO replacement
based touch sensor solutions. The UniBoss manufacturing process
continues to be the only additive process that promises to reduce
manufacturing costs and supply chain complexity of current ITO and
other ITO replacement sensors by significantly minimizing
manufacturing steps. Other production advantages include lower
material costs and a simplified supply chain, as well as
extensibility to many sizes and form factors. 
About UniPixel 
 Headquartered in The Woodlands, Texas, UniPixel,
Inc. (NASDAQ: UNXL) delivers Performance Engineered Films to the
Lighting, Display and Flexible Electronics markets. UniPixel's
high-volume roll-to-roll or continuous flow manufacturing process
offers high-fidelity replication of advanced micro-optic structures
and surface characteristics over large areas. A key focus for
UniPixel is developing electronic conductive films for use in
electronic sensors for consumer and industrial applications. The
company's newly developed UniBoss(TM) roll-to-roll electronics
manufacturing process prints conductive elements on thin film with
line widths down to ~ 5um. The company is marketing its films for
touch panel sensor, cover glass replacement, protective cover film,
antenna and custom circuitry applications under the UniPixel label,
and potentially under private label or Original Equipment
Manufacturers (OEM) brands. UniPixel's brands include Clearly
Superior(TM), Diamond Guard(TM) and others. For further information,
visit www.unipixel.com. 
Forward-looking Statements
 All statements in this news release that
are not based on historical fact are "forward-looking statements"
within the meaning of the Private Securities Litigation Reform Act of
1995 and the provisions of Section 27A of the Securities Act of 1933,
as amended, and Section 21E of the Securities Exchange Act of 1934,
as amended. While management has based any forward-looking statements
contained herein on its current expectations, the information on
which such expectations were based may change. These forward-looking
statements rely on a number of assumptions concerning future events
and are subject to a number of risks, uncertainties, and other
factors, many of which are outside of our control that could cause
actual results to materially differ from such statements. Such risks,
uncertainties, and other factors include, but are not necessarily
limited to, those set forth under Item 1A "Risk Factors" in the
Company's Annual Report on Form 10-K for the year ended December 31,
2012. We operate in a highly competitive and rapidly changing
environment, thus new or unforeseen risks may arise. Accordingly,
investors should not place any reliance on forward-looking statements
as a prediction of actual results. We disclaim any intention to, and
undertake no obligation to, update or revise any forward-looking
statements. Readers are also urged to carefully review and consider
the other various disclosures in the Company's Annual Report on Form
10-K, quarterly reports on Form 10-Q and Current Reports on Form 8-K. 
Trademarks in this release are the property of their respective
owners. 


 
                                                                            
                                                                            
                              Uni-Pixel, Inc.                               
                   Condensed Consolidated Balance Sheets                    
                                                                            
                                                  June 30,     December 31, 
                                                    2013           2012     
                                               -------------  ------------- 
                                                (unaudited)                 
                    ASSETS       
                                           
Current assets                                                              
  Cash and cash equivalents                    $  53,408,680  $  13,000,372 
  Prepaid expenses                                        --        160,320 
                                               -------------  ------------- 
                                                                            
    Total current assets                          53,408,680     13,160,692 
                                               -------------  ------------- 
                                                                            
Property and equipment, net of accumulated                                  
 depreciation of $3,071,386 and $2,531,917, at                              
 June 30, 2013 and December 31, 2012,                                       
 respectively                                      9,854,828      1,536,658 
Restricted cash                                       17,439         17,439 
                                               -------------  ------------- 
                                                                            
Total assets                                   $  63,280,947  $  14,714,789 
                                               -------------  ------------- 
                                                                            
     LIABILITIES AND SHAREHOLDERS' EQUITY                                   
                                                                            
Current liabilities                                                         
  Accounts payable                             $   1,289,210  $     348,683 
  Bonus accrual                                      273,675             -- 
  Deferred revenue                                 5,000,000             -- 
                                               -------------  ------------- 
                                                                            
    Total current liabilities                      6,562,885        348,683 
                                               -------------  ------------- 
                                                                            
    Total liabilities                              6,562,885        348,683 
                                               -------------  ------------- 
                                                                            
Commitments and contingencies                             --             -- 
                                               -------------  ------------- 
                                                                            
Shareholders' equity                                                        
  Common stock, $0.001 par value; 100,000,000                               
   shares authorized, 12,037,487 shares issued                              
   and outstanding at June 30, 2013 and                                     
   9,854,268 shares issued and outstanding at                               
   December 31, 2012                                  12,037          9,854 
  Additional paid-in capital                     131,767,395     85,669,802 
  Accumulated deficit                            (75,061,370)   (71,313,550)
                                               -------------  ------------- 
                                                                            
    Total shareholders' equity                    56,718,062     14,366,106 
                                               -------------  ------------- 
                                                                            
Total liabilities and shareholders' equity     $  63,280,947  $  14,714,789 
                                               -------------  ------------- 
                                                                            
                                                                            
                                                                            
                              Uni-Pixel, Inc.                               
              Condensed Consolidated Statements of Operations               
                                (unaudited)                                 
                                                                            
                            Three Months Ended         Six Months Ended     
                                 June 30,                  June 30,         
                         ------------------------  ------------------------ 
                             2013         2012         2013         2012    
                         -----------  -----------  -----------  ----------- 
                                                                            
Revenue                  $       749  $    70,560  $ 5,070,165  $    74,124 
                                                                            
Cost of revenues                 385       24,106        3,421       25,479 
                         -----------  -----------  -----------  ----------- 
                                                                            
Gross margin                     364       46,454    5,066,744       48,645 
                                                                            
Selling, general and                                                        
 administrative expenses   2,172,777      888,804    4,352,844    1,817,873 
Research and development   2,528,303    1,197,263    4,468,191    2,317,341 
                         -----------  -----------  -----------  ----------- 
                                                                            
Operating loss            (4,700,716)  (2,039,613)  (3,754,291)  (4,086,569)
                                                                            
Other income (expense)                                                      
  Interest income                                                           
   (expense), net              5,481        1,255        6,471        2,826 
                         -----------  -----------  -----------  ----------- 
                                                                            
Net loss                 $(4,695,235) $(2,038,358) $(3,747,820) $(4,083,743)
                         -----------  -----------  -----------  ----------- 
                                                                            
Per share information                                                       
  Net loss - basic       $     (0.40) $     (0.29) $     (0.35) $     (0.57)
  Net loss - diluted           (0.40)       (0.29)       (0.35)       (0.57)
                                                                            
Weighted average number                                                     
 of basic common shares                                                     
 outstanding              11,632,702    7,142,307   10,854,719    7,142,307 
Weighted average number                                                     
 of diluted common                                                          
 shares outstanding       11,632,702    7,142,307   10,854,719    7,142,307 
                         -----------  -----------  -----------  ----------- 

  
Company Contact: 
Jeff Tomz, CFO
UniPixel, Inc.
Tel 281-825-4500 
Investor Relations Contact:
Ron Both
Liolios Group, Inc.
Tel 949-574-3860
UNXL@liolios.com