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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(OLED-C)
|
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/