EWING, N.J.--(BUSINESS WIRE)--Universal Display Corporation (Nasdaq: OLED), enabling energy-efficient displays and lighting with its UniversalPHOLED® technology and materials, today reported financial results for the third quarter ended September 30, 2021.
“We are pleased to report solid third quarter results, including record revenue of $143.6 million,” said Sidney D. Rosenblatt, Executive Vice President and Chief Financial Officer of Universal Display. “As we look at the second half of the year, we see that the pandemic and component shortages are causing significant disruptions in the global supply chain. While these ongoing uncertainties are impacting the consumer electronics ecosystem, we are reaffirming our revenue guidance range of $530 million to $560 million. On the partnership front, we are pleased to announce that we extended our long-term material and license agreements with leading Chinese panel maker Tianma. We are delighted to continue our strong partnership with Tianma, which is advancing its OLED presence and expanding its product portfolio. We are also gratified to share that The Forum of Executive Women has recognized Universal Display Corporation as a Champion of Board Diversity for the second year. This is indicative of our steadfast commitment to cultivating and nurturing a global culture that celebrates innovation, collaboration, diversity and inclusion.”
Rosenblatt continued, “As we look to the OLED industry, we believe that we are still in the early innings of a long-term secular growth market. As the next wave of OLED adoption for medium-and-large-area applications takes shape, we are fortifying our position as an OLED leader and innovator on multiple fronts. We are leveraging our 25-plus years of pioneering research, know-how and experience into new OLED materials and technologies. We are also expanding our global footprint, building our infrastructure that is designed to drive an effective cost structure and targeting new opportunities, including phosphorescent blue and OVJP (organic vapor jet printing). We believe that these strategic initiatives will enable us to continue providing our customers with best-in-class solutions, while keeping UDC at the forefront of the growing OLED industry.”
Financial Highlights for the Third Quarter of 2021
- Total revenue in the third quarter of 2021 was $143.6 million as compared to $117.1 million in the third quarter of 2020. The increase in revenue was due to higher royalty and license fees, as well as higher material sales primarily due to stronger demand in the OLED display market.
- Revenue from material sales was $75.6 million in the third quarter of 2021 as compared to $68.7 million in the third quarter of 2020.
- Revenue from royalty and license fees was $63.9 million in the third quarter of 2021 as compared to $44.6 million in the third quarter of 2020.
- Cost of material sales was $28.9 million in the third quarter of 2021 as compared to $20.8 million in the third quarter of 2020. Included in the cost of material sales was an inventory reserve charge of $1.0 million in the third quarter of 2021 as compared to a charge of $198,000 in the third quarter of 2020.
- Operating income was $57.7 million in the third quarter of 2021 as compared to operating income of $48.4 million in the third quarter of 2020.
- Net income was $46.1 million or $0.97 per diluted share in the third quarter of 2021 as compared to $40.5 million or $0.85 per diluted share in the third quarter of 2020.
Revenue Comparison
($ in thousands) |
|
Three Months Ended September 30, |
|||||||
|
|
2021 |
|
|
2020 |
||||
Material sales |
|
$ |
75,609 |
|
|
$ |
68,709 |
||
Royalty and license fees |
|
|
63,939 |
|
|
|
44,550 |
||
Contract research services |
|
|
4,070 |
|
|
|
3,820 |
||
Total revenue |
|
$ |
143,618 |
|
|
$ |
117,079 |
||
Cost of Materials Comparison
($ in thousands) |
|
Three Months Ended September 30, |
|
|||||||
|
|
2021 |
|
|
2020 |
|
||||
Material sales |
|
$ |
75,609 |
|
|
$ |
68,709 |
|
||
Cost of material sales |
|
|
28,883 |
|
|
|
20,849 |
|
||
Gross margin on material sales |
|
|
46,726 |
|
|
|
47,860 |
|
||
Gross margin as a % of material sales |
|
|
62 |
% |
|
|
70 |
% |
||
Financial Highlights for the First Nine Months of 2021
- Total revenue in the first nine months of 2021 was $407.3 million as compared to $287.3 million in the first nine months of 2020. The increase in revenue was due to higher royalty and license fees, as well as higher material sales primarily due to stronger demand in the OLED display market.
- Revenue from material sales was $232.9 million in the first nine months of 2021 as compared to $167.2 million in the first nine months of 2020. Revenue from royalty and license fees was $163.0 million in the first nine months of 2021 as compared to $110.0 million in the first nine months of 2020.
- Cost of material sales was $75.2 million in the first nine months of 2021 as compared to $51.3 million in the first nine months of 2020. Included in the cost of material sales was an inventory reserve charge of $2.1 million in the first nine months of 2021 as compared to a charge of $808,000 in the first nine months of 2020.
- Operating income was $171.2 million in the first nine months of 2021 as compared to $91.7 million in the first nine months of 2020.
- Net income was $138.3 million or $2.90 per diluted share in the first nine months of 2021 as compared to $79.5 million or $1.67 per diluted share in the first nine months of 2020.
Revenue Comparison
($ in thousands) |
|
Nine Months Ended September 30, |
|||||||
|
|
2021 |
|
|
2020 |
||||
Material sales |
|
$ |
232,855 |
|
|
$ |
167,211 |
||
Royalty and license fees |
|
|
163,037 |
|
|
|
110,008 |
||
Contract research services |
|
|
11,386 |
|
|
|
10,105 |
||
Total revenue |
|
$ |
407,278 |
|
|
$ |
287,324 |
||
Cost of Materials Comparison
($ in thousands) |
|
Nine Months Ended September 30, |
|
|||||
|
|
2021 |
|
|
2020 |
|
||
Material sales |
|
$ |
232,855 |
|
|
$ |
167,211 |
|
Cost of material sales |
|
|
75,198 |
|
|
|
51,337 |
|
Gross margin on material sales |
|
|
157,657 |
|
|
|
115,874 |
|
Gross margin as a % of material sales |
|
|
68 |
% |
|
|
69 |
% |
2021 Guidance
The Company continues to believe that its 2021 revenue will be approximately in the range of $530 million to $560 million. The OLED industry remains at a stage where many variables can have a material impact on its growth, and the Company thus caveats its financial guidance accordingly.
Dividend
The Company also announced a fourth quarter cash dividend of $0.20 per share on the Company’s common stock. The dividend is payable on December 30, 2021 to all shareholders of record on December 16, 2021.
Conference Call Information
In conjunction with this release, Universal Display will host a conference call on Thursday, November 4, 2021, 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 5,000 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 Company’s technologies and potential applications of those technologies, the Company’s expected results and future declaration of dividends, 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, 2020. Universal Display Corporation disclaims any obligation to update any forward-looking statement contained in this document.
Follow Universal Display Corporation
(OLED-C)
UNIVERSAL DISPLAY CORPORATION AND SUBSIDIARIES
|
||||||||
|
|
September 30, 2021 |
|
|
December 31, 2020 |
|
||
ASSETS |
|
|
|
|
|
|
||
CURRENT ASSETS: |
|
|
|
|
|
|
||
Cash and cash equivalents |
|
$ |
535,157 |
|
|
$ |
630,012 |
|
Short-term investments |
|
|
253,786 |
|
|
|
99,996 |
|
Accounts receivable |
|
|
96,235 |
|
|
|
82,261 |
|
Inventory |
|
|
121,485 |
|
|
|
91,591 |
|
Other current assets |
|
|
48,476 |
|
|
|
20,746 |
|
Total current assets |
|
|
1,055,139 |
|
|
|
924,606 |
|
PROPERTY AND EQUIPMENT, net of accumulated depreciation of $86,962 and $72,493 |
|
|
118,988 |
|
|
|
102,113 |
|
ACQUIRED TECHNOLOGY, net of accumulated amortization of $168,489 and $153,050 |
|
|
54,814 |
|
|
|
70,253 |
|
OTHER INTANGIBLE ASSETS, net of accumulated amortization of $7,206 and $6,155 |
|
|
10,028 |
|
|
|
10,685 |
|
GOODWILL |
|
|
15,535 |
|
|
|
15,535 |
|
INVESTMENTS |
|
|
8,500 |
|
|
|
5,000 |
|
DEFERRED INCOME TAXES |
|
|
32,476 |
|
|
|
37,695 |
|
OTHER ASSETS |
|
|
133,111 |
|
|
|
103,341 |
|
TOTAL ASSETS |
|
$ |
1,428,591 |
|
|
$ |
1,269,228 |
|
LIABILITIES AND SHAREHOLDERS’ EQUITY |
|
|
|
|
|
|
||
CURRENT LIABILITIES: |
|
|
|
|
|
|
||
Accounts payable |
|
$ |
10,939 |
|
|
$ |
13,801 |
|
Accrued expenses |
|
|
42,736 |
|
|
|
41,404 |
|
Deferred revenue |
|
|
123,475 |
|
|
|
105,215 |
|
Other current liabilities |
|
|
3,111 |
|
|
|
4,540 |
|
Total current liabilities |
|
|
180,261 |
|
|
|
164,960 |
|
DEFERRED REVENUE |
|
|
43,458 |
|
|
|
57,086 |
|
RETIREMENT PLAN BENEFIT LIABILITY |
|
|
80,676 |
|
|
|
78,527 |
|
OTHER LIABILITIES |
|
|
87,874 |
|
|
|
55,941 |
|
Total liabilities |
|
|
392,269 |
|
|
|
356,514 |
|
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, 49,060,909 and 49,013,476 shares issued, and 47,695,261 and 47,647,828 shares outstanding, at September 30, 2021 and December 31, 2020, respectively |
|
|
491 |
|
|
|
490 |
|
Additional paid-in capital |
|
|
646,049 |
|
|
|
635,595 |
|
Retained earnings |
|
|
463,820 |
|
|
|
353,930 |
|
Accumulated other comprehensive loss |
|
|
(32,756 |
) |
|
|
(36,019 |
) |
Treasury stock, at cost (1,365,648 shares at September 30, 2021 and December 31, 2020) |
|
|
(41,284 |
) |
|
|
(41,284 |
) |
Total shareholders’ equity |
|
|
1,036,322 |
|
|
|
912,714 |
|
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY |
|
$ |
1,428,591 |
|
|
$ |
1,269,228 |
|
UNIVERSAL DISPLAY CORPORATION AND SUBSIDIARIES
|
||||||||||||||||
|
|
Three Months Ended
|
|
|
Nine Months Ended
|
|
||||||||||
|
|
2021 |
|
|
2020 |
|
|
2021 |
|
|
2020 |
|
||||
REVENUE: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Material sales |
|
$ |
75,609 |
|
|
$ |
68,709 |
|
|
$ |
232,855 |
|
|
$ |
167,211 |
|
Royalty and license fees |
|
|
63,939 |
|
|
|
44,550 |
|
|
|
163,037 |
|
|
|
110,008 |
|
Contract research services |
|
|
4,070 |
|
|
|
3,820 |
|
|
|
11,386 |
|
|
|
10,105 |
|
Total revenue |
|
|
143,618 |
|
|
|
117,079 |
|
|
|
407,278 |
|
|
|
287,324 |
|
COST OF SALES |
|
|
31,481 |
|
|
|
23,378 |
|
|
|
82,748 |
|
|
|
58,480 |
|
Gross margin |
|
|
112,137 |
|
|
|
93,701 |
|
|
|
324,530 |
|
|
|
228,844 |
|
OPERATING EXPENSES: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Research and development |
|
|
25,327 |
|
|
|
20,814 |
|
|
|
72,733 |
|
|
|
61,708 |
|
Selling, general and administrative |
|
|
20,960 |
|
|
|
13,579 |
|
|
|
57,603 |
|
|
|
45,129 |
|
Amortization of acquired technology and other intangible assets |
|
|
5,505 |
|
|
|
5,494 |
|
|
|
16,490 |
|
|
|
16,474 |
|
Patent costs |
|
|
2,359 |
|
|
|
2,095 |
|
|
|
6,003 |
|
|
|
5,591 |
|
Royalty and license expense |
|
|
258 |
|
|
|
3,293 |
|
|
|
519 |
|
|
|
8,195 |
|
Total operating expenses |
|
|
54,409 |
|
|
|
45,275 |
|
|
|
153,348 |
|
|
|
137,097 |
|
OPERATING INCOME |
|
|
57,728 |
|
|
|
48,426 |
|
|
|
171,182 |
|
|
|
91,747 |
|
Interest income, net |
|
|
137 |
|
|
|
1,029 |
|
|
|
345 |
|
|
|
4,444 |
|
Other (loss) income, net |
|
|
(102 |
) |
|
|
262 |
|
|
|
178 |
|
|
|
634 |
|
Interest and other income, net |
|
|
35 |
|
|
|
1,291 |
|
|
|
523 |
|
|
|
5,078 |
|
INCOME BEFORE INCOME TAXES |
|
|
57,763 |
|
|
|
49,717 |
|
|
|
171,705 |
|
|
|
96,825 |
|
INCOME TAX EXPENSE |
|
|
(11,654 |
) |
|
|
(9,217 |
) |
|
|
(33,368 |
) |
|
|
(17,355 |
) |
NET INCOME |
|
$ |
46,109 |
|
|
$ |
40,500 |
|
|
$ |
138,337 |
|
|
$ |
79,470 |
|
NET INCOME PER COMMON SHARE: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
BASIC |
|
$ |
0.97 |
|
|
$ |
0.85 |
|
|
$ |
2.91 |
|
|
$ |
1.67 |
|
DILUTED |
|
$ |
0.97 |
|
|
$ |
0.85 |
|
|
$ |
2.90 |
|
|
$ |
1.67 |
|
WEIGHTED AVERAGE SHARES USED IN COMPUTING NET INCOME PER COMMON SHARE: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
BASIC |
|
|
47,291,192 |
|
|
|
47,227,061 |
|
|
|
47,286,927 |
|
|
|
47,182,625 |
|
DILUTED |
|
|
47,362,575 |
|
|
|
47,260,331 |
|
|
|
47,355,583 |
|
|
|
47,212,660 |
|
CASH DIVIDENDS DECLARED PER COMMON SHARE |
|
$ |
0.20 |
|
|
$ |
0.15 |
|
|
$ |
0.60 |
|
|
$ |
0.45 |
|
UNIVERSAL DISPLAY CORPORATION AND SUBSIDIARIES
|
||||||||
|
|
Nine Months Ended September 30, |
|
|||||
|
|
2021 |
|
|
2020 |
|
||
CASH FLOWS FROM OPERATING ACTIVITIES: |
|
|
|
|
|
|
||
Net income |
|
$ |
138,337 |
|
|
$ |
79,470 |
|
Adjustments to reconcile net income to net cash provided by operating activities: |
|
|
|
|
|
|
||
Amortization of deferred revenue and recognition of unbilled receivables, net |
|
|
(165,723 |
) |
|
|
(112,508 |
) |
Depreciation |
|
|
14,471 |
|
|
|
11,147 |
|
Amortization of intangibles |
|
|
16,490 |
|
|
|
16,474 |
|
Change in excess inventory reserve |
|
|
2,058 |
|
|
|
808 |
|
Amortization of premium and discount on investments, net |
|
|
(229 |
) |
|
|
(4,293 |
) |
Stock-based compensation to employees |
|
|
22,846 |
|
|
|
19,807 |
|
Stock-based compensation to Board of Directors and Scientific Advisory Board |
|
|
1,052 |
|
|
|
1,133 |
|
Deferred income tax expense (benefit) |
|
|
4,226 |
|
|
|
(2,242 |
) |
Retirement plan expense |
|
|
6,676 |
|
|
|
4,242 |
|
Decrease (increase) in assets: |
|
|
|
|
|
|
||
Accounts receivable |
|
|
(13,974 |
) |
|
|
(38,898 |
) |
Inventory |
|
|
(31,952 |
) |
|
|
(20,953 |
) |
Other current assets |
|
|
(13,626 |
) |
|
|
(2,854 |
) |
Other assets |
|
|
(33,540 |
) |
|
|
(8,721 |
) |
Increase (decrease) in liabilities: |
|
|
|
|
|
|
||
Accounts payable and accrued expenses |
|
|
(3,311 |
) |
|
|
(19,633 |
) |
Other current liabilities |
|
|
(1,429 |
) |
|
|
(806 |
) |
Deferred revenue |
|
|
160,021 |
|
|
|
144,200 |
|
Other liabilities |
|
|
31,933 |
|
|
|
9,454 |
|
Net cash provided by operating activities |
|
|
134,326 |
|
|
|
75,827 |
|
CASH FLOWS FROM INVESTING ACTIVITIES: |
|
|
|
|
|
|
||
Purchases of property and equipment |
|
|
(29,496 |
) |
|
|
(19,213 |
) |
Purchases of intangibles |
|
|
(394 |
) |
|
|
(25 |
) |
Purchases of investments |
|
|
(272,340 |
) |
|
|
(604,153 |
) |
Proceeds from sale and maturity of investments |
|
|
115,240 |
|
|
|
613,310 |
|
Net cash used in investing activities |
|
|
(186,990 |
) |
|
|
(10,081 |
) |
CASH FLOWS FROM FINANCING ACTIVITIES: |
|
|
|
|
|
|
||
Proceeds from issuance of common stock |
|
|
1,136 |
|
|
|
869 |
|
Payment of withholding taxes related to stock-based compensation to employees |
|
|
(14,880 |
) |
|
|
(14,293 |
) |
Cash dividends paid |
|
|
(28,447 |
) |
|
|
(21,329 |
) |
Net cash used in financing activities |
|
|
(42,191 |
) |
|
|
(34,753 |
) |
(DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS |
|
|
(94,855 |
) |
|
|
30,993 |
|
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD |
|
|
630,012 |
|
|
|
131,627 |
|
CASH AND CASH EQUIVALENTS, END OF PERIOD |
|
$ |
535,157 |
|
|
$ |
162,620 |
|
The following non-cash activities occurred: |
|
|
|
|
|
|
||
Unrealized (loss) gain on available-for-sale securities |
|
$ |
(39 |
) |
|
$ |
451 |
|
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 |
|
|
(1,849 |
) |
|
|
(892 |
) |
