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 first quarter ended March 31, 2024.

“We began the year on a strong note with solid first quarter results across the board,” said Brian Millard, Vice President and Chief Financial Officer of Universal Display Corporation. “With the OLED IT market poised for significant growth, continued OLED proliferation in smartphones and TVs, and projected expansion of foldables, we see meaningful opportunities across multiple market verticals. As we approach UDC’s 30th anniversary next month, we reflect on our amazing journey that has been marked by relentless innovation, exponential growth, and the materialization of products that were once distant dreams. As we look forward, we are excited to reach even greater heights in the future and continue to make a lasting impact on the OLED industry.”

Financial Highlights for the First Quarter of 2024

• Total revenue in the first quarter of 2024 was $165.3 million as compared to $130.5 million in the first quarter of 2023.
• Revenue from material sales was $93.3 million in the first quarter of 2024 as compared to $70.2 million in the first 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 $68.3 million in the first quarter of 2024 as compared to $55.2 million in the first quarter 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.
• Cost of material sales was $34.1 million in the first quarter of 2024 as compared to $29.5 million in the first quarter of 2023. The increase in cost of material sales was primarily due to an increase in the level of materials sales, partially offset by a $3.3 million decrease in inventory reserve expense.
• Total gross margin was 78% in the first quarter of 2024 as compared to 75% in the first quarter of 2023.
• Operating income was $62.9 million in the first quarter of 2024 as compared to $45.4 million in the first quarter of 2023.
• The effective income tax rate was 19.4% and 22.8% in the first quarter of 2024 and 2023, respectively.
• Net income was $56.9 million or $1.19 per diluted share in the first quarter of 2024 as compared to $39.8 million or $0.83 per diluted share in the first quarter of 2023.

Revenue Comparison

($ in thousands)

 

Three Months Ended March 31,

 

 

 

2024

 

 

2023

 

Material sales

 

$

93,284

 

 

$

70,190

 

Royalty and license fees

 

 

68,268

 

 

 

55,210

 

Contract research services

 

 

3,707

 

 

 

5,067

 

Total revenue

 

$

165,259

 

 

$

130,467

 

Cost of Materials Comparison

($ in thousands)

 

Three Months Ended March 31,

 

 

 

2024

 

 

2023

 

Material sales

 

$

93,284

 

 

$

70,190

 

Cost of material sales

 

 

34,096

 

 

 

29,488

 

Gross margin on material sales

 

 

59,188

 

 

 

40,702

 

Gross margin as a % of material sales

 

 

63

%

 

 

58

%

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 $635 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 second quarter cash dividend of $0.40 per share on the Company’s common stock. The dividend is payable on June 28, 2024 to all shareholders of record as of the close of business on June 14, 2024.

Conference Call Information

In conjunction with this release, Universal Display will host a conference call on Thursday, May 2, 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)

 

 

March 31, 2024

 

 

December 31, 2023

 

ASSETS

 

 

 

 

 

 

CURRENT ASSETS:

 

 

 

 

 

 

Cash and cash equivalents

 

$

74,012

 

 

$

91,985

 

Short-term investments

 

 

465,293

 

 

 

422,137

 

Accounts receivable

 

 

119,584

 

 

 

139,850

 

Inventory

 

 

172,905

 

 

 

175,795

 

Other current assets

 

 

89,478

 

 

 

87,365

 

Total current assets

 

 

921,272

 

 

 

917,132

 

PROPERTY AND EQUIPMENT, net of accumulated depreciation of $149,062 and $143,908

 

 

175,896

 

 

 

175,150

 

ACQUIRED TECHNOLOGY, net of accumulated amortization of $191,043 and $186,850

 

 

86,132

 

 

 

90,325

 

OTHER INTANGIBLE ASSETS, net of accumulated amortization of $10,769 and $10,414

 

 

6,519

 

 

 

6,874

 

GOODWILL

 

 

15,535

 

 

 

15,535

 

INVESTMENTS

 

 

312,939

 

 

 

299,548

 

DEFERRED INCOME TAXES

 

 

63,040

 

 

 

59,108

 

OTHER ASSETS

 

 

102,382

 

 

 

105,289

 

TOTAL ASSETS

 

$

1,683,715

 

 

$

1,668,961

 

LIABILITIES AND SHAREHOLDERS’ EQUITY

 

 

 

 

 

 

CURRENT LIABILITIES:

 

 

 

 

 

 

Accounts payable

 

$

12,841

 

 

$

10,933

 

Accrued expenses

 

 

42,099

 

 

 

52,080

 

Deferred revenue

 

 

19,157

 

 

 

47,713

 

Other current liabilities

 

 

20,882

 

 

 

8,096

 

Total current liabilities

 

 

94,979

 

 

 

118,822

 

DEFERRED REVENUE

 

 

13,292

 

 

 

12,006

 

RETIREMENT PLAN BENEFIT LIABILITY

 

 

52,568

 

 

 

52,249

 

OTHER LIABILITIES

 

 

37,976

 

 

 

38,658

 

Total liabilities

 

 

198,815

 

 

 

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, 48,804,964 and 48,731,026 shares issued, and 47,439,316 and 47,365,378 shares outstanding, at March 31, 2024 and December 31, 2023, respectively

 

 

488

 

 

 

487

 

Additional paid-in capital

 

 

702,609

 

 

 

699,554

 

Retained earnings

 

 

826,879

 

 

 

789,553

 

Accumulated other comprehensive loss

 

 

(3,794

)

 

 

(1,086

)

Treasury stock, at cost (1,365,648 shares at March 31, 2024 and December 31, 2023)

 

 

(41,284

)

 

 

(41,284

)

Total shareholders’ equity

 

 

1,484,900

 

 

 

1,447,226

 

TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY

 

$

1,683,715

 

 

$

1,668,961

 

UNIVERSAL DISPLAY CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) (in thousands, except share and per share data)

 

Three Months Ended March 31,

 

 

2024

 

 

2023

 

REVENUE:

 

 

 

 

 

Material sales

$

93,284

 

 

$

70,190

 

Royalty and license fees

 

68,268

 

 

 

55,210

 

Contract research services

 

3,707

 

 

 

5,067

 

Total revenue

 

165,259

 

 

 

130,467

 

COST OF SALES

 

36,969

 

 

 

32,970

 

Gross margin

 

128,290

 

 

 

97,497

 

OPERATING EXPENSES:

 

 

 

 

 

Research and development

 

37,985

 

 

 

31,423

 

Selling, general and administrative

 

19,252

 

 

 

15,396

 

Amortization of acquired technology and other intangible assets

 

4,548

 

 

 

2,891

 

Patent costs

 

1,982

 

 

 

2,255

 

Royalty and license expense

 

1,651

 

 

 

164

 

Total operating expenses

 

65,418

 

 

 

52,129

 

OPERATING INCOME

 

62,872

 

 

 

45,368

 

Interest income, net

 

9,568

 

 

 

6,967

 

Other loss, net

 

(1,943

)

 

 

(703

)

Interest and other loss, net

 

7,625

 

 

 

6,264

 

INCOME BEFORE INCOME TAXES

 

70,497

 

 

 

51,632

 

INCOME TAX EXPENSE

 

(13,644

)

 

 

(11,793

)

NET INCOME

$

56,853

 

 

$

39,839

 

NET INCOME PER COMMON SHARE:

 

 

 

 

 

BASIC

$

1.19

 

 

$

0.83

 

DILUTED

$

1.19

 

 

$

0.83

 

WEIGHTED AVERAGE SHARES USED IN COMPUTING NET INCOME PER COMMON SHARE:

 

 

 

 

 

BASIC

 

47,557,959

 

 

 

47,523,593

 

DILUTED

 

47,628,492

 

 

 

47,567,007

 

CASH DIVIDENDS DECLARED PER COMMON SHARE

$

0.40

 

 

$

0.35

 

UNIVERSAL DISPLAY CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (in thousands)

 

 

Three Months Ended March 31,

 

 

 

2024

 

 

2023

 

CASH FLOWS FROM OPERATING ACTIVITIES:

 

 

 

 

 

 

Net income

 

$

56,853

 

 

$

39,839

 

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

 

 

 

 

 

 

Depreciation

 

 

6,616

 

 

 

6,496

 

Amortization of intangibles

 

 

4,548

 

 

 

2,891

 

Amortization of premium and discount on investments, net

 

 

(2,236

)

 

 

(3,597

)

Stock-based compensation

 

 

9,174

 

 

 

4,415

 

Deferred income tax benefit

 

 

(3,936

)

 

 

(5,936

)

Retirement plan expense, net of benefit payments

 

 

330

 

 

 

782

 

Decrease (increase) in assets:

 

 

 

 

 

 

Accounts receivable

 

 

20,266

 

 

 

(13

)

Inventory

 

 

2,890

 

 

 

8,975

 

Other current assets

 

 

(2,113

)

 

 

8,598

 

Other assets

 

 

2,907

 

 

 

5,515

 

Increase (decrease) in liabilities:

 

 

 

 

 

 

Accounts payable and accrued expenses

 

 

(7,977

)

 

 

(24,116

)

Other current liabilities

 

 

12,786

 

 

 

12,874

 

Deferred revenue

 

 

(27,270

)

 

 

(8,616

)

Other liabilities

 

 

(682

)

 

 

(486

)

Net cash provided by operating activities

 

 

72,156

 

 

 

47,621

 

CASH FLOWS FROM INVESTING ACTIVITIES:

 

 

 

 

 

 

Purchases of property and equipment

 

 

(7,206

)

 

 

(9,098

)

Purchases of intangibles

 

 

—

 

 

 

(51

)

Purchases of investments

 

 

(99,947

)

 

 

(65,207

)

Proceeds from sale and maturity of investments

 

 

42,970

 

 

 

115,031

 

Net cash (used in) provided by investing activities

 

 

(64,183

)

 

 

40,675

 

CASH FLOWS FROM FINANCING ACTIVITIES:

 

 

 

 

 

 

Proceeds from issuance of common stock

 

 

639

 

 

 

518

 

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

 

 

(7,058

)

 

 

(7,181

)

Cash dividends paid

 

 

(19,527

)

 

 

(16,769

)

Net cash used in financing activities

 

 

(25,946

)

 

 

(23,432

)

(DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS

 

 

(17,973

)

 

 

64,864

 

CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD

 

 

91,985

 

 

 

93,430

 

CASH AND CASH EQUIVALENTS, END OF PERIOD

 

$

74,012

 

 

$

158,294

 

SUPPLEMENTAL DISCLOSURES:

 

 

 

 

 

 

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

 

$

(2,666

)

 

$

3,202

 

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

 

 

(156

)

 

 

766

 

Cash paid for income taxes, net of refunds

 

 

5,085

 

 

 

4,961

 

 

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