Universal Display Corporation Announces First Quarter 2021 Financial Results

Universal Display Corporation (Nasdaq: OLED), enabling energy-efficient displays and lighting with its UniversalPHOLED® technology and materials, today reported financial results for the first quarter ended March 31, 2021.

“As OLED momentum continues across the consumer electronics market, we are advancing our robust OLED materials and technology leadership,” said Sidney D. Rosenblatt, Executive Vice President and Chief Financial Officer of Universal Display. “Since our last earnings call, we announced new extended OLED Technology License and Material Purchase Agreements with LG Display and Visionox. We also announced that along with PPG, we are jointly establishing a new manufacturing site in Shannon, Ireland, for the production of our highly efficient, high-performing UniversalPHOLED materials. Additionally, Universal Display Corporation was named to Financial Times’ The Americas’ Fastest-Growing Companies 2021 list.”

Rosenblatt continued, “Last month, we celebrated our twenty-fifth year as a Nasdaq-listed company by virtually ringing the opening bell. It was an incredible milestone that we shared with our employees, customers, partners, and all of our stakeholders. Since our inception, Universal Display Corporation has stood for ‘Vision, Innovation and Reality’ and we have invested approximately $700 million in research and development to advance our company from a start-up to a leading player in the global OLED ecosystem. We continue to broaden and deepen the breadth of our first-mover advantage to further enable our customers and the OLED industry.”

Financial Highlights for the First Quarter of 2021

  • Total revenue in the first quarter of 2021 was $134.0 million as compared to $112.3 million in the first quarter of 2020.
  • Revenue from material sales was $79.8 million in the first quarter of 2021 as compared to $66.6 million in the first quarter of 2020.
  • Revenue from royalty and license fees was $50.9 million in the first quarter of 2021 as compared to $43.1 million in the first quarter of 2020.
  • Cost of materials was $21.0 million in the first quarter of 2021 as compared to $20.2 million in the first quarter of 2020.
  • Operating income was $63.6 million in the first quarter of 2021 as compared to $44.5 million in the first quarter of 2020.
  • Net income was $51.7 million or $1.08 per diluted share in the first quarter of 2021 as compared to $38.2 million or $0.80 per diluted share in the first quarter of 2020.

Revenue Comparison

($ in thousands)

Three Months Ended March 31,

2021

2020

Material sales

$

79,808

$

66,575

Royalty and license fees

50,886

43,078

Contract research services

3,306

2,624

Total revenue

$

134,000

$

112,277

Cost of Materials Comparison

($ in thousands)

Three Months Ended March 31,

2021

2020

Material sales

$

79,808

$

66,575

Cost of material sales

20,999

20,211

Gross margin on material sales

58,809

46,364

Gross margin as a % of material sales

74%

70%

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 second quarter cash dividend of $0.20 per share on the Company’s common stock. The dividend is payable on June 30, 2021 to all shareholders of record on June 15, 2021.

Conference Call Information

In conjunction with this release, Universal Display will host a conference call on May 6, 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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UNIVERSAL DISPLAY CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(UNAUDITED)

(in thousands, except share and per share data)

March 31, 2021

December 31, 2020

ASSETS

CURRENT ASSETS:

Cash and cash equivalents

$

726,279

$

630,012

Short-term investments

720

99,996

Accounts receivable

91,327

82,261

Inventory

101,422

91,591

Other current assets

39,587

20,746

Total current assets

959,335

924,606

PROPERTY AND EQUIPMENT, net of accumulated depreciation of $76,756 and $72,493

107,815

102,113

ACQUIRED TECHNOLOGY, net of accumulated amortization of $158,197 and $153,050

65,106

70,253

OTHER INTANGIBLE ASSETS, net of accumulated amortization of $6,496 and $6,155

10,641

10,685

GOODWILL

15,535

15,535

INVESTMENTS

8,500

5,000

DEFERRED INCOME TAXES

36,864

37,695

OTHER ASSETS

106,704

103,341

TOTAL ASSETS

$

1,310,500

$

1,269,228

LIABILITIES AND SHAREHOLDERS’ EQUITY

CURRENT LIABILITIES:

Accounts payable

$

14,741

$

13,801

Accrued expenses

19,171

41,404

Deferred revenue

128,546

105,215

Other current liabilities

3,874

4,540

Total current liabilities

166,332

164,960

DEFERRED REVENUE

49,578

57,086

RETIREMENT PLAN BENEFIT LIABILITY

79,246

78,527

OTHER LIABILITIES

62,876

55,941

Total liabilities

358,032

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, 49,050,776

and 49,013,476 shares issued, and 47,685,128 and 47,647,828 shares outstanding, at

March 31, 2021 and December 31, 2020, respectively

491

490

Additional paid-in capital

632,138

635,595

Retained earnings

396,130

353,930

Accumulated other comprehensive loss

(35,009

)

(36,019

)

Treasury stock, at cost (1,365,648 shares at March 31, 2021 and December 31, 2020)

(41,284

)

(41,284

)

Total shareholders’ equity

952,468

912,714

TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY

$

1,310,500

$

1,269,228

UNIVERSAL DISPLAY CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

(UNAUDITED)

(in thousands, except share and per share data)

Three Months Ended March 31,

2021

2020

REVENUE:

Material sales

$

79,808

$

66,575

Royalty and license fees

50,886

43,078

Contract research services

3,306

2,624

Total revenue

134,000

112,277

COST OF SALES

23,298

22,459

Gross margin

110,702

89,818

OPERATING EXPENSES:

Research and development

23,305

19,497

Selling, general and administrative

16,404

15,403

Amortization of acquired technology and other intangible assets

5,488

5,490

Patent costs

1,835

1,638

Royalty and license expense

112

3,284

Total operating expenses

47,144

45,312

OPERATING INCOME

63,558

44,506

Interest income, net

133

2,147

Other income, net

59

202

Interest and other income, net

192

2,349

INCOME BEFORE INCOME TAXES

63,750

46,855

INCOME TAX EXPENSE

(12,063

)

(8,700

)

NET INCOME

$

51,687

$

38,155

NET INCOME PER COMMON SHARE:

BASIC

$

1.09

$

0.80

DILUTED

$

1.08

$

0.80

WEIGHTED AVERAGE SHARES USED IN COMPUTING NET

INCOME PER COMMON SHARE:

BASIC

47,267,921

47,093,033

DILUTED

47,329,704

47,122,829

CASH DIVIDENDS DECLARED PER COMMON SHARE

$

0.20

$

0.15

UNIVERSAL DISPLAY CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

(in thousands)

Three Months Ended March 31,

2021

2020

CASH FLOWS FROM OPERATING ACTIVITIES:

Net income

$

51,687

$

38,155

Adjustments to reconcile net income to net cash provided by operating activities:

Amortization of deferred revenue and recognition of unbilled receivables

(57,648

)

(40,511

)

Depreciation

4,263

3,615

Amortization of intangibles

5,488

5,490

Change in excess inventory reserve

667

611

Amortization of premium and discount on investments, net

(70

)

(2,005

)

Stock-based compensation to employees

5,200

5,735

Stock-based compensation to Board of Directors and Scientific Advisory Board

330

254

Deferred income tax expense

515

940

Retirement plan expense

2,228

1,414

Decrease (increase) in assets:

Accounts receivable

(9,066

)

(22,140

)

Inventory

(10,498

)

(10,726

)

Other current assets

5,400

7,706

Other assets

(7,133

)

(3,245

)

Increase (decrease) in liabilities:

Accounts payable and accrued expenses

(21,136

)

(29,340

)

Other current liabilities

(666

)

3,114

Deferred revenue

53,000

43,685

Other liabilities

6,935

2,994

Net cash provided by operating activities

29,496

5,746

CASH FLOWS FROM INVESTING ACTIVITIES:

Purchases of property and equipment

(9,938

)

(4,782

)

Purchases of intangibles

(298

)

Purchases of investments

(4,220

)

(148,592

)

Proceeds from sale and maturity of investments

100,000

250,400

Net cash provided by investing activities

85,544

97,026

CASH FLOWS FROM FINANCING ACTIVITIES:

Proceeds from issuance of common stock

348

259

Payment of withholding taxes related to stock-based compensation to employees

(9,634

)

(4,816

)

Cash dividends paid

(9,487

)

(7,098

)

Net cash used in financing activities

(18,773

)

(11,655

)

INCREASE IN CASH AND CASH EQUIVALENTS

96,267

91,117

CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD

630,012

131,627

CASH AND CASH EQUIVALENTS, END OF PERIOD

$

726,279

$

222,744

The following non-cash activities occurred:

Unrealized (loss) gain on available-for-sale securities

$

(66

)

$

2,380

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

(27

)

689

Contacts:

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

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