OLED Universal Display Corporation

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