OLED
$156.51
Universal Display
$6.07
4.03%
Earnings Details
3rd Quarter September 2021
Thursday, November 4, 2021 4:08:00 PM
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Summary

Universal Display Misses

Universal Display (OLED) reported 3rd Quarter September 2021 earnings of $0.97 per share on revenue of $143.6 million. The consensus earnings estimate was $1.09 per share on revenue of $145.8 million. The Earnings Whisper number was $1.04 per share. Revenue grew 22.7% on a year-over-year basis.

The company said it continues to expect 2021 revenue of $530.0 million to $560.0 million. The current consensus revenue estimate is $557.62 million for the year ending December 31, 2021.

Universal Display Corp is engaged in the research, development & commercialization of organic light emitting diode or OLED, technologies & materials for use in displays for wearables, smartphones, tablets & televisions & solid-state lighting applications.

Results
Reported Earnings
$0.97
Earnings Whisper
$1.04
Consensus Estimate
$1.09
Reported Revenue
$143.6 Mil
Revenue Estimate
$145.8 Mil
Growth
Earnings Growth
Revenue Growth
Power Rating
Grade
Earnings Release

Universal Display Corporation Announces Third Quarter 2021 Financial Results

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.

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(OLED-C)

 

UNIVERSAL DISPLAY CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
(in thousands, except share and per share data)

 

 

 

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
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
(in thousands, except share and per share data)

 

 

 

Three Months Ended
September 30,

 

 

Nine Months Ended
September 30,

 

 

 

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
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(in thousands)

 

 

 

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

)

 

Universal Display Contact:
Darice Liu
investor@oled.com
media@oled.com
+1 609-964-5123

Source: Universal Display Corporation