Universal Display Corporation (Nasdaq: OLED), enabling energy-efficient displays and lighting with its UniversalPHOLED® technology and materials, reported financial results for the first quarter ended March 31, 2014.
For the first quarter of 2014, the Company reported net income of $4.0 million, or $0.09 per diluted share, on revenues of $37.8 million. For the first quarter of 2013, the Company reported a net loss of $4.8 million, or $(0.10) per diluted share, on revenues of $15.0 million.
"Our solid execution in delivering high performance, quality assured, proprietary phosphorescent emitters and hosts to our growing list of OLED customers, coupled with increasing production activity, resulted in strong revenues, operating income and earnings in the first quarter," said Sidney D. Rosenblatt, Executive Vice President and Chief Financial Officer of Universal Display. "In recent months, we were very pleased to see new products, including flagship launches, showcasing our phosphorescent OLED materials and technologies. Looking forward, we are excited about new growth opportunities in the mobile, wearable, TV and lighting markets as we continue to fortify and expand our IP and materials portfolio for long-term growth."
First Quarter 2014 Results
Revenues for the first quarter of 2014 were $37.8 million compared to revenues of $15.0 million in the same quarter of 2013. Growth in first quarter revenues was led by a 177% increase in material sales, which rose to $35.3 million, up from $12.8 million in the first quarter of 2013, reflecting robust volume growth in sales of red emitter, green emitter and green host materials. Royalty and license fees were $1.8 million in the first quarter of 2014, up from $1.3 million in the same quarter of 2013. Technology development and support revenue was $0.7 million in the first quarter of 2014 compared to $0.9 million in the same quarter of 2013.
No revenue was recognized under the Samsung Display Co., Ltd. (SDC) licensing agreement in the first quarter, as SDC is obligated to make licensing payments in the second and fourth quarters of the year. For 2014, the Company expects to recognize $50 million in SDC licensing revenues for the full year.
Operating expenses for the first quarter of 2014 were $31.2 million compared to $22.1 million in the same quarter of 2013. Cost of materials for the quarter were $9.9 million compared to $3.1 million in the first quarter of 2013, reflecting an increase in the quantity of material shipped and changes in product mix.
The Company reported operating income of $6.6 million for the first quarter of 2014, compared to an operating loss of $7.2 million for the first quarter of 2013.
The Company's balance sheet remained strong, with cash and cash equivalents and short-term investments of $267 million as of March 31, 2014. During the quarter, accounts receivables and inventories increased, while accrued expenses declined. This resulted in working capital increasing to $318 million at the end of the quarter.
Although the OLED industry is still at a stage where many variables can have a material impact on its growth, the Company now expects 2014 revenues to reach the high end of its $190 million to $205 million guidance range.