Universal Display Corporation (Nasdaq: OLED), enabling
energy-efficient displays and lighting with its UniversalPHOLED®
technology and materials, today reported financial results for the
second quarter ended June 30, 2024.
“We reported solid second quarter results as the OLED IT
adoption cycle begins to gain momentum,” said Brian Millard, Vice
President and Chief Financial Officer of Universal Display
Corporation. “With leading OEMs embarking on their OLED IT journey
with the introduction of new OLED PC products, we believe that a
new multi-year capex cycle has commenced to support this growth. As
the broadening proliferation of OLEDs across the consumer landscape
fuels the market’s positive trajectory, we are enhancing our
operational and strategic infrastructure and fortifying our
leadership position in the ecosystem. This new chapter in our
long-term growth story is expected to usher in tremendous
opportunities for the industry and for us.”
Financial Highlights for the Second
Quarter of 2024
- Total revenue in the second quarter of 2024 was $158.5 million
as compared to $146.6 million in the second quarter of 2023.
- Revenue from material sales was $95.4 million in the second
quarter of 2024 as compared to $77.1 million in the second quarter
of 2023. The increase in material sales was primarily due to
strengthened demand for our emitter materials.
- Revenue from royalty and license fees was $59.6 million in the
second quarter of 2024 as compared to $64.4 million in the second
quarter of 2023. The decrease in royalty and license fees was
primarily the result of changes in customer mix between periods,
partially offset by increased sales volume.
- Cost of material sales was $35.5 million in the second quarter
of 2024 as compared to $28.6 million in the second quarter of 2023.
The increase in cost of material sales was primarily due to an
increase in the level of materials sales.
- Total gross margin was 76% in the second quarter of 2024 as
compared to 78% in the second quarter of 2023. The decrease was
primarily due to changes in customer and product mix.
- Operating income was $56.4 million in the second quarter of
2024 as compared to $58.6 million in the second quarter of
2023.
- The effective income tax rate was 19.3% and 22.4% in the second
quarter of 2024 and 2023, respectively.
- Net income was $52.3 million or $1.10 per diluted share in the
second quarter of 2024 as compared to $49.7 million or $1.04 per
diluted share in the second quarter of 2023.
Revenue Comparison
($ in thousands)
Three Months Ended June
30,
2024
2023
Material sales
$
95,442
$
77,107
Royalty and license fees
59,551
64,399
Contract research services
3,512
5,059
Total revenue
$
158,505
$
146,565
Cost of Materials
Comparison
($ in thousands)
Three Months Ended June
30,
2024
2023
Material sales
$
95,442
$
77,107
Cost of material sales
35,491
28,570
Gross margin on material sales
59,951
48,537
Gross margin as a % of material sales
63
%
63
%
Financial Highlights for the First Half
of 2024
- Total revenue in the first half of 2024 was $323.8 million as
compared to $277.0 million in the first half of 2023.
- Revenue from material sales was $188.7 million in the first
half of 2024 as compared to $147.3 million in the first half of
2023. The increase in material sales was primarily due to
strengthened demand for our emitter materials.
- Revenue from royalty and license fees was $127.8 million in the
first half of 2024 as compared to $119.6 million in the first half
of 2023. The increase in royalty and license fees was primarily the
result of higher unit material volume, partially offset by a
reduced cumulative catch-up adjustment and changes in customer mix
between periods.
- Cost of material sales was $69.6 million in the first half of
2024 as compared to $58.1 million in the first half of 2023
primarily due to an increase in the level of materials sales,
partially offset by a $3.8 million decrease in inventory reserve
expense.
- Total gross margin was 77% in the first half of 2024 as
compared to 76% in the first half of 2023.
- Operating income was $119.3 million in the first half of 2024
as compared to $104.0 million in the first half of 2023.
- The effective income tax rate was 19.3% and 22.6% in the first
half of 2024 and 2023, respectively.
- Net income was $109.2 million or $2.29 per diluted share in the
first half of 2024 compared to $89.5 million or $1.87 per diluted
share in the first half of 2023.
Revenue Comparison
($ in thousands)
Six Months Ended June
30,
2024
2023
Material sales
$
188,726
$
147,297
Royalty and license fees
127,819
119,609
Contract research services
7,219
10,126
Total revenue
$
323,764
$
277,032
Cost of Materials
Comparison
($ in thousands)
Six Months Ended June
30,
2024
2023
Material sales
$
188,726
$
147,297
Cost of material sales
69,587
58,058
Gross margin on material sales
119,139
89,239
Gross margin as a % of material sales
63
%
61
%
2024 Revised Guidance
The Company has increased the lower end of its previous revenue
guidance and believes that 2024 revenue will be in the range of
$645 million to $675 million. The OLED industry remains at a stage
where many variables can have a material impact on results, and the
Company thus caveats its financial guidance accordingly.
Dividend
The Company also announced a third quarter cash dividend of
$0.40 per share on the Company’s common stock. The dividend is
payable on September 30, 2024 to all shareholders of record as of
the close of business on September 16, 2024.
Conference Call
Information
In conjunction with this release, Universal Display will host a
conference call on Thursday, August 1, 2024 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, 2023. 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)
June 30, 2024
December 31, 2023
ASSETS
CURRENT ASSETS:
Cash and cash equivalents
$
92,856
$
91,985
Short-term investments
437,667
422,137
Accounts receivable
124,386
139,850
Inventory
171,843
175,795
Other current assets
132,729
87,365
Total current assets
959,481
917,132
PROPERTY AND EQUIPMENT, net of accumulated
depreciation of $153,523 and $143,908
185,474
175,150
ACQUIRED TECHNOLOGY, net of accumulated
amortization of $195,235 and $186,850
81,940
90,325
OTHER INTANGIBLE ASSETS, net of
accumulated amortization of $11,125 and $10,414
6,163
6,874
GOODWILL
15,535
15,535
INVESTMENTS
362,459
299,548
DEFERRED INCOME TAXES
66,664
59,108
OTHER ASSETS
98,845
105,289
TOTAL ASSETS
$
1,776,561
$
1,668,961
LIABILITIES AND SHAREHOLDERS’
EQUITY
CURRENT LIABILITIES:
Accounts payable
$
23,636
$
10,933
Accrued expenses
58,624
52,080
Deferred revenue
63,784
47,713
Other current liabilities
5,955
8,096
Total current liabilities
151,999
118,822
DEFERRED REVENUE
6,732
12,006
RETIREMENT PLAN BENEFIT LIABILITY
53,870
52,249
OTHER LIABILITIES
37,122
38,658
Total liabilities
249,723
221,735
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, 48,814,273 and 48,731,026 shares
issued, and 47,448,625 and 47,365,378 shares outstanding, at June
30, 2024 and December 31, 2023, respectively
488
487
Additional paid-in capital
712,234
699,554
Retained earnings
860,058
789,553
Accumulated other comprehensive loss
(4,660
)
(1,086
)
Treasury stock, at cost (1,365,648 shares
at June 30, 2024 and December 31, 2023)
(41,284
)
(41,284
)
Total shareholders’ equity
1,526,838
1,447,226
TOTAL LIABILITIES AND SHAREHOLDERS’
EQUITY
$
1,776,561
$
1,668,961
UNIVERSAL DISPLAY CORPORATION
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF
INCOME
(UNAUDITED)
(in thousands, except share and
per share data)
Three Months Ended June
30,
Six Months Ended June
30,
2024
2023
2024
2023
REVENUE:
Material sales
$
95,442
$
77,107
$
188,726
$
147,297
Royalty and license fees
59,551
64,399
127,819
119,609
Contract research services
3,512
5,059
7,219
10,126
Total revenue
158,505
146,565
323,764
277,032
COST OF SALES
38,328
32,139
75,297
65,109
Gross margin
120,177
114,426
248,467
211,923
OPERATING EXPENSES:
Research and development
36,826
32,318
74,811
63,741
Selling, general and administrative
19,841
17,077
39,093
32,473
Amortization of acquired technology and
other intangible assets
4,549
3,994
9,097
6,885
Patent costs
2,401
2,229
4,383
4,484
Royalty and license expense
123
169
1,774
333
Total operating expenses
63,740
55,787
129,158
107,916
OPERATING INCOME
56,437
58,639
119,309
104,007
Interest income, net
9,913
6,198
19,481
13,165
Other loss, net
(1,460
)
(784
)
(3,403
)
(1,487
)
Interest and other loss, net
8,453
5,414
16,078
11,678
INCOME BEFORE INCOME TAXES
64,890
64,053
135,387
115,685
INCOME TAX EXPENSE
(12,553
)
(14,375
)
(26,197
)
(26,168
)
NET INCOME
$
52,337
$
49,678
$
109,190
$
89,517
NET INCOME PER COMMON SHARE:
BASIC
$
1.10
$
1.04
$
2.29
$
1.87
DILUTED
$
1.10
$
1.04
$
2.29
$
1.87
WEIGHTED AVERAGE SHARES USED IN COMPUTING
NET INCOME PER COMMON SHARE:
BASIC
47,549,843
47,572,971
47,553,969
47,548,404
DILUTED
47,628,113
47,618,115
47,628,470
47,593,657
CASH DIVIDENDS DECLARED PER COMMON
SHARE
$
0.40
$
0.35
$
0.80
$
0.70
UNIVERSAL DISPLAY CORPORATION
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF
CASH FLOWS
(UNAUDITED)
(in thousands)
Six Months Ended June
30,
2024
2023
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income
$
109,190
$
89,517
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation
13,092
13,207
Amortization of intangibles
9,097
6,885
Amortization of premium and discount on
investments, net
(4,276
)
(6,845
)
Stock-based compensation
18,523
11,320
Deferred income tax benefit
(7,402
)
(12,782
)
Retirement plan expense, net of benefit
payments
962
1,397
Decrease (increase) in assets:
Accounts receivable
15,464
(16,726
)
Inventory
3,952
7,365
Other current assets
(45,364
)
12,038
Other assets
6,444
7,665
Increase (decrease) in liabilities:
Accounts payable and accrued expenses
12,367
(17,651
)
Other current liabilities
(2,141
)
(20,811
)
Deferred revenue
10,797
(15,736
)
Other liabilities
(1,536
)
(1,445
)
Net cash provided by operating
activities
139,169
57,398
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment
(16,334
)
(27,274
)
Purchases of intangibles
—
(66,063
)
Purchases of investments
(174,757
)
(115,048
)
Proceeds from sale and maturity of
investments
97,620
190,907
Net cash used in investing activities
(93,471
)
(17,478
)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of common stock
1,187
971
Payment of withholding taxes related to
stock-based compensation to employees
(7,329
)
(7,429
)
Cash dividends paid
(38,685
)
(33,422
)
Net cash used in financing activities
(44,827
)
(39,880
)
INCREASE IN CASH AND CASH EQUIVALENTS
871
40
CASH AND CASH EQUIVALENTS, BEGINNING OF
PERIOD
91,985
93,430
CASH AND CASH EQUIVALENTS, END OF
PERIOD
$
92,856
$
93,470
SUPPLEMENTAL DISCLOSURES:
Unrealized (loss) gain on
available-for-sale securities
$
(2,976
)
$
1,848
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
(7,082
)
(54
)
Cash paid for income taxes, net of
refunds
47,263
59,849
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240801261409/en/
Universal Display: Darice Liu investor@oled.com
media@oled.com +1 609-964-5123
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