Universal Display Corporation (Nasdaq: OLED), enabling energy-efficient displays and lighting with its UniversalPHOLED® technology and materials, today reported financial results for the fourth quarter and full year ended December 31, 2023.
“In 2023, we achieved key milestones, strengthened our capabilities and infrastructure, and positioned the Company for growth in the years ahead,” said Brian Millard, Vice President and Chief Financial Officer of Universal Display Corporation. “Looking to 2024 and beyond, we see multiple paths for growth in the coming years. The commencement of an OLED IT adoption cycle, the resumption of OLED TV growth, the rise of automotive OLED displays, and the popularity of foldable OLED mobile applications all create promising opportunities for substantial growth. In addition to the growing OLED market, we are advancing and broadening our R&D roadmap, which includes novel phosphorescent materials and architectures, as well as our OVJP manufacturing platform.”
Financial Highlights for the Fourth Quarter of 2023
- Total revenue in the fourth quarter of 2023 was $158.3 million as compared to $169.0 million in the fourth quarter of 2022.
- Revenue from material sales was $82.2 million in the fourth quarter of 2023 as compared to $88.3 million in the fourth quarter of 2022. The decrease in material sales was primarily the result of a decrease in the cumulative catch-up adjustments between periods, partially offset by higher sales volume of our emitter material.
- Revenue from royalty and license fees was $72.9 million in the fourth quarter of 2023 as compared to $75.6 million in the fourth quarter of 2022. The decrease in royalty and license fees was primarily the result of changes in customer mix.
- Cost of material sales was $33.4 million in the fourth quarter of 2023 as compared to $26.6 million in the fourth quarter of 2022. This was primarily due to an increase in the volume of material sales and increased contract manufacturing support costs.
- Total gross margin was 77% in the fourth quarter of 2023 as compared to 82% in the fourth quarter of 2022.
- Operating income was $64.7 million in the fourth quarter of 2023 as compared to $83.1 million in the fourth quarter of 2022.
- The effective income tax rate was 18.0% and 19.2% for the fourth quarters of 2023 and 2022, respectively.
- Net income was $62.0 million or $1.29 per diluted share in the fourth quarter of 2023 as compared to $65.1 million or $1.36 per diluted share in the fourth quarter of 2022.
Revenue Comparison
|
($ in thousands)
|
|
Three Months Ended December 31,
|
|
|
|
|
2023
|
|
|
2022
|
|
|
Material sales
|
|
$
|
82,240
|
|
|
$
|
88,339
|
|
|
Royalty and license fees
|
|
|
72,865
|
|
|
|
75,585
|
|
|
Contract research services
|
|
|
3,215
|
|
|
|
5,108
|
|
|
Total revenue
|
|
$
|
158,320
|
|
|
$
|
169,032
|
|
Cost of Materials Comparison
|
($ in thousands)
|
|
Three Months Ended December 31,
|
|
|
|
|
2023
|
|
|
2022
|
|
|
Material sales
|
|
$
|
82,240
|
|
|
$
|
88,339
|
|
|
Cost of material sales
|
|
|
33,379
|
|
|
|
26,603
|
|
|
Gross margin on material sales
|
|
|
48,861
|
|
|
|
61,736
|
|
|
Gross margin as a % of material sales
|
|
|
59
|
%
|
|
|
70
|
%
|
Financial Highlights for the Full Year 2023
- Total revenue in the full year 2023 was $576.4 million as compared to $616.6 million in the full year 2022.
- Revenue from material sales was $322.0 million in the full year 2023 as compared to $331.1 million in the full year 2022. The decline in material sales was primarily due to a decrease in the cumulative catch-up adjustments between periods, partially offset by higher blue emitter and host sales.
- Revenue from royalty and license fees was $238.4 million in the full year 2023 as compared to $267.1 million in the full year 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 $19.7 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.
- Cost of material sales was $123.1 million in the full year 2023 as compared to $115.6 million in the full year 2022. Cost of material sales increased primarily due to costs associated with our manufacturing facility in Shannon, Ireland which commenced manufacturing in mid-2022, increased inventory reserves and changes in product mix.
- Total gross margin was 77% in the full year 2023 as compared to 79% in the full year 2022. Increases in Shannon facility costs of $5.1 million and inventory reserves of $4.9 million in 2023 contributed to the 2% decrease in total gross margin between periods.
- Operating income was $217.2 million in the full year 2023 as compared to $267.1 million in the full year 2022.
- The effective income tax rate was 17.2% and 21.7% in the full years 2023 and 2022, respectively.
- Net income was $203.0 million or $4.24 per diluted share in the full year 2023 compared to $210.1 million or $4.40 per diluted share in the full year 2022.
Revenue Comparison
|
($ in thousands)
|
|
Year Ended December 31,
|
|
|
|
|
2023
|
|
|
2022
|
|
|
Material sales
|
|
$
|
322,029
|
|
|
$
|
331,081
|
|
|
Royalty and license fees
|
|
|
238,389
|
|
|
|
267,115
|
|
|
Contract research services
|
|
|
16,011
|
|
|
|
18,423
|
|
|
Total revenue
|
|
$
|
576,429
|
|
|
$
|
616,619
|
|
Cost of Materials Comparison
|
($ in thousands)
|
|
Year Ended December 31,
|
|
|
|
|
2023
|
|
|
2022
|
|
|
Material sales
|
|
$
|
322,029
|
|
|
$
|
331,081
|
|
|
Cost of material sales
|
|
|
123,076
|
|
|
|
115,602
|
|
|
Gross margin on material sales
|
|
|
198,953
|
|
|
|
215,479
|
|
|
Gross margin as a % of material sales
|
|
|
62
|
%
|
|
|
65
|
%
|
2024 Guidance
The Company believes that its 2024 revenue will be in the range of $625 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 first quarter cash dividend of $0.40 per share on the Company’s common stock. The dividend is payable on March 29, 2024 to all shareholders of record as of the close of business on March 15, 2024.
Conference Call Information
In conjunction with this release, Universal Display will host a conference call on Thursday, February 22, 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.
Follow Universal Display Corporation
Twitter
Facebook
YouTube
(OLED-C)
|
UNIVERSAL DISPLAY CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands, except share and per share data)
|
|
|
|
|
|
|
|
|
|
|
December 31, 2023
|
|
|
December 31, 2022
|
|
|
ASSETS
|
|
|
|
|
|
|
|
CURRENT ASSETS:
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
91,985
|
|
|
$
|
93,430
|
|
|
Short-term investments
|
|
|
422,137
|
|
|
|
484,345
|
|
|
Accounts receivable
|
|
|
139,850
|
|
|
|
92,664
|
|
|
Inventory
|
|
|
175,795
|
|
|
|
183,220
|
|
|
Other current assets
|
|
|
87,365
|
|
|
|
45,791
|
|
|
Total current assets
|
|
|
917,132
|
|
|
|
899,450
|
|
|
PROPERTY AND EQUIPMENT, net of accumulated depreciation of $143,908 and $117,118
|
|
|
175,150
|
|
|
|
143,445
|
|
|
ACQUIRED TECHNOLOGY, net of accumulated amortization of $186,850 and $189,671
|
|
|
90,325
|
|
|
|
38,382
|
|
|
OTHER INTANGIBLE ASSETS, net of accumulated amortization of $10,414 and $8,989
|
|
|
6,874
|
|
|
|
8,247
|
|
|
GOODWILL
|
|
|
15,535
|
|
|
|
15,535
|
|
|
INVESTMENTS
|
|
|
299,548
|
|
|
|
259,861
|
|
|
DEFERRED INCOME TAXES
|
|
|
59,108
|
|
|
|
58,161
|
|
|
OTHER ASSETS
|
|
|
105,289
|
|
|
|
109,739
|
|
|
TOTAL ASSETS
|
|
$
|
1,668,961
|
|
|
$
|
1,532,820
|
|
|
LIABILITIES AND SHAREHOLDERS’ EQUITY
|
|
|
|
|
|
|
|
CURRENT LIABILITIES:
|
|
|
|
|
|
|
|
Accounts payable
|
|
$
|
10,933
|
|
|
$
|
9,519
|
|
|
Accrued expenses
|
|
|
52,080
|
|
|
|
51,002
|
|
|
Deferred revenue
|
|
|
47,713
|
|
|
|
45,599
|
|
|
Other current liabilities
|
|
|
8,096
|
|
|
|
29,577
|
|
|
Total current liabilities
|
|
|
118,822
|
|
|
|
135,697
|
|
|
DEFERRED REVENUE
|
|
|
12,006
|
|
|
|
18,279
|
|
|
RETIREMENT PLAN BENEFIT LIABILITY
|
|
|
52,249
|
|
|
|
59,790
|
|
|
OTHER LIABILITIES
|
|
|
38,658
|
|
|
|
43,685
|
|
|
Total liabilities
|
|
|
221,735
|
|
|
|
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, 48,731,026 and 49,136,030 shares issued, and 47,365,378 and 47,770,382 shares outstanding at December 31, 2023 and December 31, 2022, respectively
|
|
|
487
|
|
|
|
491
|
|
|
Additional paid-in capital
|
|
|
699,554
|
|
|
|
681,335
|
|
|
Retained earnings
|
|
|
789,553
|
|
|
|
653,277
|
|
|
Accumulated other comprehensive loss
|
|
|
(1,086
|
)
|
|
|
(18,452
|
)
|
|
Treasury stock, at cost (1,365,648 shares at December 31, 2023 and December 31, 2022)
|
|
|
(41,284
|
)
|
|
|
(41,284
|
)
|
|
Total shareholders’ equity
|
|
|
1,447,226
|
|
|
|
1,275,369
|
|
|
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY
|
|
$
|
1,668,961
|
|
|
$
|
1,532,820
|
|
|
UNIVERSAL DISPLAY CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except share and per share data)
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended December 31,
|
|
|
Twelve Months Ended December 31,
|
|
|
|
|
2023
|
|
|
2022
|
|
|
2023
|
|
|
2022
|
|
|
REVENUE:
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
Material sales
|
|
$
|
82,240
|
|
|
$
|
88,339
|
|
|
$
|
322,029
|
|
|
$
|
331,081
|
|
|
Royalty and license fees
|
|
|
72,865
|
|
|
|
75,585
|
|
|
|
238,389
|
|
|
|
267,115
|
|
|
Contract research services
|
|
|
3,215
|
|
|
|
5,108
|
|
|
|
16,011
|
|
|
|
18,423
|
|
|
Total revenue
|
|
|
158,320
|
|
|
|
169,032
|
|
|
|
576,429
|
|
|
|
616,619
|
|
|
COST OF SALES
|
|
|
36,019
|
|
|
|
30,098
|
|
|
|
135,376
|
|
|
|
127,896
|
|
|
Gross margin
|
|
|
122,301
|
|
|
|
138,934
|
|
|
|
441,053
|
|
|
|
488,723
|
|
|
OPERATING EXPENSES:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Research and development
|
|
|
33,641
|
|
|
|
31,906
|
|
|
|
130,481
|
|
|
|
117,062
|
|
|
Selling, general and administrative
|
|
|
16,830
|
|
|
|
18,513
|
|
|
|
67,387
|
|
|
|
77,886
|
|
|
Amortization of acquired technology and other intangible assets
|
|
|
4,551
|
|
|
|
2,897
|
|
|
|
15,993
|
|
|
|
17,459
|
|
|
Patent costs
|
|
|
2,300
|
|
|
|
2,254
|
|
|
|
9,356
|
|
|
|
8,329
|
|
|
Royalty and license expense
|
|
|
233
|
|
|
|
281
|
|
|
|
647
|
|
|
|
877
|
|
|
Total operating expenses
|
|
|
57,555
|
|
|
|
55,851
|
|
|
|
223,864
|
|
|
|
221,613
|
|
|
OPERATING INCOME
|
|
|
64,746
|
|
|
|
83,083
|
|
|
|
217,189
|
|
|
|
267,110
|
|
|
Interest income, net
|
|
|
7,865
|
|
|
|
3,505
|
|
|
|
28,166
|
|
|
|
7,811
|
|
|
Other income (loss), net
|
|
|
2,996
|
|
|
|
(5,942
|
)
|
|
|
(184
|
)
|
|
|
(6,691
|
)
|
|
Interest and other income (loss), net
|
|
|
10,861
|
|
|
|
(2,437
|
)
|
|
|
27,982
|
|
|
|
1,120
|
|
|
INCOME BEFORE INCOME TAXES
|
|
|
75,607
|
|
|
|
80,646
|
|
|
|
245,171
|
|
|
|
268,230
|
|
|
INCOME TAX EXPENSE
|
|
|
(13,629
|
)
|
|
|
(15,512
|
)
|
|
|
(42,160
|
)
|
|
|
(58,169
|
)
|
|
NET INCOME
|
|
$
|
61,978
|
|
|
$
|
65,134
|
|
|
$
|
203,011
|
|
|
$
|
210,061
|
|
|
NET INCOME PER COMMON SHARE:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BASIC
|
|
$
|
1.30
|
|
|
$
|
1.37
|
|
|
$
|
4.25
|
|
|
$
|
4.41
|
|
|
DILUTED
|
|
$
|
1.29
|
|
|
$
|
1.36
|
|
|
$
|
4.24
|
|
|
$
|
4.40
|
|
|
WEIGHTED AVERAGE SHARES USED IN COMPUTING NET INCOME PER COMMON SHARE:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BASIC
|
|
|
47,571,382
|
|
|
|
47,402,007
|
|
|
|
47,559,669
|
|
|
|
47,390,352
|
|
|
DILUTED
|
|
|
47,657,854
|
|
|
|
47,492,560
|
|
|
|
47,622,763
|
|
|
|
47,468,507
|
|
|
CASH DIVIDEND DECLARED PER COMMON SHARE
|
|
$
|
0.35
|
|
|
$
|
0.30
|
|
|
$
|
1.40
|
|
|
$
|
1.20
|
|
|
UNIVERSAL DISPLAY CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
|
|
|
|
|
|
|
|
Year Ended December 31,
|
|
|
|
|
2023
|
|
|
2022
|
|
|
CASH FLOWS FROM OPERATING ACTIVITIES:
|
|
|
|
|
|
|
|
Net income
|
|
$
|
203,011
|
|
|
|
210,061
|
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|
|
|
Depreciation
|
|
|
27,409
|
|
|
|
24,815
|
|
|
Amortization of intangibles
|
|
|
15,993
|
|
|
|
17,459
|
|
|
Amortization of premium and discount on investments, net
|
|
|
(11,603
|
)
|
|
|
(6,461
|
)
|
|
Impairment of minority investments
|
|
|
—
|
|
|
|
6,962
|
|
|
Stock-based compensation to employees
|
|
|
22,335
|
|
|
|
28,380
|
|
|
Stock-based compensation to Board of Directors and Scientific Advisory Board
|
|
|
1,774
|
|
|
|
1,566
|
|
|
Deferred income tax benefit
|
|
|
(3,766
|
)
|
|
|
(26,946
|
)
|
|
Retirement plan expense, net of benefit payments
|
|
|
3,129
|
|
|
|
5,276
|
|
|
Decrease (increase) in assets:
|
|
|
|
|
|
|
|
Accounts receivable
|
|
|
(47,186
|
)
|
|
|
14,975
|
|
|
Inventory
|
|
|
7,425
|
|
|
|
(49,060
|
)
|
|
Other current assets
|
|
|
(41,574
|
)
|
|
|
(24,843
|
)
|
|
Other assets
|
|
|
4,450
|
|
|
|
25,971
|
|
|
Increase (decrease) in liabilities:
|
|
|
|
|
|
|
|
Accounts payable and accrued expenses
|
|
|
4,047
|
|
|
|
3,338
|
|
|
Other current liabilities
|
|
|
(21,481
|
)
|
|
|
20,917
|
|
|
Deferred revenue
|
|
|
(4,159
|
)
|
|
|
(93,203
|
)
|
|
Other liabilities
|
|
|
(5,027
|
)
|
|
|
(32,392
|
)
|
|
Net cash provided by operating activities
|
|
|
154,777
|
|
|
|
126,815
|
|
|
CASH FLOWS FROM INVESTING ACTIVITIES:
|
|
|
|
|
|
|
|
Purchases of property and equipment
|
|
|
(59,792
|
)
|
|
|
(42,497
|
)
|
|
Purchase of intangibles
|
|
|
(66,563
|
)
|
|
|
(4,709
|
)
|
|
Purchases of investments
|
|
|
(531,103
|
)
|
|
|
(701,993
|
)
|
|
Proceeds from sale and maturity of investments
|
|
|
574,165
|
|
|
|
468,456
|
|
|
Net cash used in investing activities
|
|
|
(83,293
|
)
|
|
|
(280,743
|
)
|
|
CASH FLOWS FROM FINANCING ACTIVITIES:
|
|
|
|
|
|
|
|
Proceeds from issuance of common stock
|
|
|
2,012
|
|
|
|
1,570
|
|
|
Payment of withholding taxes related to stock-based compensation to employees
|
|
|
(8,206
|
)
|
|
|
(9,209
|
)
|
|
Cash dividends paid
|
|
|
(66,735
|
)
|
|
|
(56,996
|
)
|
|
Net cash used in financing activities
|
|
|
(72,929
|
)
|
|
|
(64,635
|
)
|
|
DECREASE IN CASH AND CASH EQUIVALENTS
|
|
|
(1,445
|
)
|
|
|
(218,563
|
)
|
|
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR
|
|
|
93,430
|
|
|
|
311,993
|
|
|
CASH AND CASH EQUIVALENTS, END OF YEAR
|
|
$
|
91,985
|
|
|
$
|
93,430
|
|
|
The following non-cash activities occurred:
|
|
|
|
|
|
|
|
Unrealized loss on available-for-sale securities
|
|
$
|
(8,938
|
)
|
|
$
|
(8,100
|
)
|
|
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
|
|
|
678
|
|
|
|
3,069
|
|
|
Cash paid for income taxes, net of refunds
|
|
|
96,176
|
|
|
|
72,347
|
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20240222923341/en/