eMagin Announces Record First Quarter 2012 Revenues
Thursday, May 10, 2012 4:01:03 PM ET eMagin Corporation (NYSE Amex: EMAN), the leader in OLED
technology for the design and manufacture of OLED microdisplays for high
resolution imaging products, today announced financial results for its
first quarter ended March 31, 2012.
"During the first quarter of 2012, our base business performed well both
in domestic and international markets and our outlook continues to be
positive," stated Andrew G. Sculley, President and CEO. "I am pleased to
report a 35% increase in product revenue (primarily display sales) and a
59% increase in the number of displays produced during the first quarter
versus the year ago first quarter as a result of improved yield and
better line utilization."
Mr. Sculley continued, "During the second quarter, we expect to complete
the testing phase of the qualification of our new OLED deposition
machine and begin production. Once the new machine is fully operational,
we expect OLED deposition capacity to increase by tenfold and we
anticipate higher yields, putting us in a strong position to address the
increasing demand for our products from all of our major business
segments, including military, industrial and consumer applications."
Quarterly Results
Revenues for the first quarter rose 13% to $6.1 million versus $5.4
million for the first quarter of 2011. The gain is attributable to an
increase in volume of displays sold, a slightly higher average sales
price and an increase in display production offset by a decrease in
contract revenue during the period.
Gross margin for the first quarter increased to 44% on gross profit of
$2.7 million, compared to a gross margin of 41% on gross profit of $2.2
million in the same quarter last year. The year-over-year improvement in
gross margin was achieved through a higher volume of units manufactured
and sold, and a higher average selling price per display, which was
partially offset by an increase in the cost of goods sold, primarily
related to personnel costs.
Operating expenses for the first quarter of 2012 were $3.4 million,
versus operating expenses of $2.7 million for the prior year period.
Operating expenses are comprised of R&D expenses and selling, general
and administrative (SG&A) expenses. R&D expenses increased from 10% of
revenues in Q1 last year to 19% of revenues in Q1 this year due to the
internal development of a new display, increased research and
development activity, and to increased personnel costs. SG&A expenses
decreased from 39% of revenue last year to 37% this year.
Net loss for the first quarter of 2012 was $452,000, or $(0.02) per
diluted share, compared to net loss of $3.3 million, or $(0.16) per
diluted share, in the first quarter last year. Adjusted Net loss for Q1
last year was $272,000 (see attached tables). Adjusted EBITDA for the
first quarter was $44,000.
Recent Corporate Highlights
--
eMagin received a $3.1 million follow-on order for OLED displays for
the US Army Remote Viewer, all of which must be delivered in 2012.
--
Work on the $1.1 million Small Business Innovation Research (SBIR)
contract from the United States Special Operations Command (USSOCOM)
to optimize the Company’s WUXGA OLED microdisplay for mass production
is progressing. Completion of the program is expected in the third
quarter of 2012. eMagin’s WUXGA OLED microdisplay is the highest
resolution full-color microdisplay ever produced.
--
Installation of the Company’s new OLED deposition machine will be
completed and production is expected to begin in the second quarter.
The new tool will augment the Company’s existing Satella OLED
deposition machine, an R&D tool adapted and used by eMagin for both
R&D and production since the Company’s inception in 1996.
--
The Company’s new seal machine will improve the existing seal process
which should increase yield and capacity. The new seal machine is
expected to come online during the second quarter.
--
eMagin’s R&D team has achieved further reductions in the size of the
full color pixel, to 8.1 microns. This is the smallest known full
color pixel in the industry and will potentially lead to even smaller
size displays which are less costly to produce.
--
eMagin is working with a number of customers moving forward with the
Company’s new digital VGA display. Initial small volume production
orders have been received and larger volumes are anticipated for later
in 2012.
--
We are developing an XGA display to better address the commercial and
consumer electronic viewfinder market. There are several newly
interested potential customers for this new product. eMagin currently
sells a different display into the high end of this market.
--
Deliveries continued under the Javelin program in the first quarter
and will continue in the second quarter.
Outlook
eMagin reaffirms its 2012 revenue guidance range of $30-$34 million. The
Company expects contract revenue to increase during the balance of the
year due to greater activity on existing contracts and to new contracts.
Conference Call Information
Full results will be published in the Company’s 10-Q report for the
first quarter ended March 31, 2012, to be filed today and will also be
available via the Company’s website, www.emagin.com.
A conference call and live webcast will begin today at 5:00 p.m. ET. An
archive of the webcast will be available one hour after the live call
through June 10, 2012. To access the live Webcast or archive, please
visit the Company’s website at ir.emagin.com or www.earnings.com.
About eMagin Corporation
A leader in OLED microdisplay technology and personal display systems,
eMagin manufactures high-resolution OLED microdisplays and conducts OLED
related research and development for government agencies and
non-government companies. eMagin can also integrate the displays with
magnifying optics to deliver virtual images comparable or superior to
large-screen computer and television displays in portable, low-power,
lightweight personal displays. eMagin microdisplays provide near-eye
imagery in a variety of products from military, industrial, medical and
consumer OEMs. More information about eMagin is available at www.emagin.com.
Forward-Looking Statements
This press release contains forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933 and Section 21E of
the Securities Exchange Act of 1934, including those regarding eMagin
Corporation’s expectations, intentions, strategies and beliefs
pertaining to future events or future financial performance. Actual
events or results may differ materially from those in the
forward-looking statements as a result of various important factors,
including those described in the Company’s most recent filings with the
SEC. Although we believe that the expectations reflected in the
forward-looking statements are reasonable, such statements should not be
regarded as a representation by the Company, or any other person, that
such forward-looking statements will be achieved. The business and
operations of the Company are subject to substantial risks which
increase the uncertainty inherent in forward-looking statements. We
undertake no duty to update any of the forward-looking statements,
whether as a result of new information, future events or otherwise. In
light of the foregoing, readers are cautioned not to place undue
reliance on such forward-looking statements.
Non-GAAP Financial Measures
To supplement the Company’s consolidated financial statements presented
on a GAAP basis, the Company has provided non-GAAP financial
information, namely earnings before interest, taxes, depreciation and
amortization (EBITDA). The Company’s management believes that this
non-GAAP measure provides investors with a better understanding of how
the results relate to the Company’s historical performance. The
additional adjusted information is not meant to be considered in
isolation or as a substitute for GAAP financials. Management believes
that these adjusted measures reflect the essential operating activities
of the Company. A reconciliation of non-GAAP financial information
appears below:
eMAGIN CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share data)
March 31, 2012 December 31,
(unaudited) 2011
----------------- ----------------
ASSETS
Current assets:
Cash and cash equivalents $ 5,832 $ 7,571
Investments 7,245 5,745
Accounts receivable, net 4,644 5,576
Inventories, net 2,800 2,760
Prepaid expenses and other current assets 1,255 1,008
-------- --------
Total current assets 21,776 22,660
Long-term investments 1,000 1,000
Equipment, furniture and leasehold improvements, net 6,521 5,980
Other assets 127 127
Deferred tax asset 8,165 8,165
-------- --------
Total assets $ 37,589 $ 37,932
======= ======== ====== ========
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable $ 883 $ 961
Accrued expenses 1,886 2,246
Other current liabilities 383 614
-------- --------
Total current liabilities 3,152 3,821
Commitments and contingencies (Note 8)
Shareholders’ equity:
Preferred stock, $.001 par value: authorized 10,000,000 shares:
Series B Convertible Preferred stock, (liquidation preference of -- --
$5,659,000) stated value $1,000 per share, $.001 par value: 10,000
shares designated and 5,659 issued and outstanding as of March 31,
2012 and December 31, 2011
Common stock, $.001 par value: authorized 200,000,000 shares, issued 24 24
and outstanding, 23,537,978 shares as of March 31, 2012 and
23,513,978 as of December 31, 2011
Additional paid-in capital 221,616 220,838
Accumulated deficit (187,108 ) (186,656 )
Treasury stock, 25,000 shares as of March 31, 2012 and December 31, (95 ) (95 )
2011
-------- --------
Total shareholders’ equity 34,437 34,111
-------- --------
Total liabilities and shareholders’ equity $ 37,589 $ 37,932
======= ======== ====== ========
eMAGIN CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except share and per share data)
(unaudited)
Three Months Ended
March 31,
-------------------------------------
2012 2011
----------------- -----------------
Revenue:
Product $ 5,830 $ 4,310
Contract 307 1,131
---------- ----------
Total revenue, net 6,137 5,441
---------- ----------
Cost of goods sold:
Product 3,302 2,609
Contract 154 586
---------- ----------
Total cost of goods sold 3,456 3,195
---------- ----------
Gross profit 2,681 2,246
Operating expenses:
Research and development 1,140 532
Selling, general and administrative 2,263 2,141
---------- ----------
Total operating expenses 3,403 2,673
---------- ----------
Loss from operations (722 ) (427 )
Other income (expense):
Interest expense, net (3 ) (29 )
Other income, net 7 16
Change in fair value of warrant liability -- (3,057 )
---------- ----------
Total other income (expense), net 4 (3,070 )
---------- ----------
Loss before benefit from income taxes (718 ) (3,497 )
Benefit from income taxes (266 ) (158 )
---------- ----------
Net loss $ (452 ) $ (3,339 )
===== ========== ===== ==========
Loss per common share, basic $ (0.02 ) $ (0.16 )
===== ========== ===== ==========
Loss per common share, diluted $ (0.02 ) $ (0.16 )
===== ========== ===== ==========
Weighted average number of common shares outstanding:
Basic 23,507,172 21,522,716
========== ==========
Diluted 23,507,172 21,522,716
========== ==========
Non-GAAP Information
-----------------------------------------
(unaudited)
Three Months Ended
March 31,
-----------------------
2012 2011
------ --------
Net loss $ (452 ) $ (3,339 )
Severance (47 ) 10
Change in fair value of warrant liability -- 3,057
---- ------
Adjusted net loss (499 ) (272 )
Non-cash compensation 749 856
Depreciation and amortization expense 57 34
Interest expense 3 29
Benefit from income taxes (266 ) (158 )
---- ------
Adjusted EBITDA $ 44 $ 489
==== ======
SOURCE: eMagin Corporation
eMagin Corporation
Investor:
Paul Campbell, 425-284-5220
pcampbell@emagin.com
