TMCnet News
eMagin Announces Second Quarter 2014 Financial ResultsBELLEVUE, Wash. --(Business Wire)-- eMagin (News - Alert) Corporation (NYSE MKT:EMAN), the leader in the development, design and manufacture of Active Matrix OLED microdisplays for high resolution imaging products, today announced financial results and corporate highlights for the second quarter ended June 30, 2014. Andrew G. Sculley, President and CEO, stated, "During the second quarter of 2014, we achieved improved results and progressed significantly forward in several critical areas. First, we are making great strides in creating ultra-high brightness OLED microdisplays that will accelerate the penetration of our OLED microdisplays into new markets such as avionics and consumer headset applications. eMagin is leading the industry in this effort for direct patterned OLED at micro-display pixel sizes. We recently demonstrated a full color direct patterned ultra-high brightness display to select potential customers and have installed new equipment that will allow us to sample these groundbreaking, innovative displays to our customers. Second, we've received notifications for a number of new R&D contract awards that we expect will increase our quarterly R&D contract revenue beginning in Q3 as well as further accelerate our leadership in the development of ultra-high brightness OLED microdisplays. Historically, these government R&D contract awards have been instrumental in fueling our growth and we are excited about the resurgence of this activity." Mr. Sculley continued, "Thanks to the extraordinary efforts of our teams, we continued to improve our manufacturing process in second quarter with better yield and throughput from the new OLED deposition tool and from impactful additions of other new equipment coming online. These improvements should boost our bottom-line performance going forward. Also, we successfully met the challenges associated with a first quarter 2014 stop ship order from three of our customers regarding a product issue. A stop ship order essentially delays product shipments until the particular issue(s) are resolved with the customer. The issues relating to the stop ship order have now been mostly resolved. For the first customer, shipments have resumed with no expected loss of revenue. Shipments to the second customer resumed and shipments continued uninterrupted to this customer for its other programs. The customer changed to a new display configuration for this program as did the third customer. No loss of overall revenue is expected for the second customer but some shipments originally scheduled for 2014 may extend into 2015. For the third customer, production shipments of the new display configuration are expected to begin shipping once their qualification process is complete and we expect less revenue under this program than we originally anticipated." Quarterly Results Revenues for the second quarter of 2014 were $7.0 million versus $7.0 million for the second quarter of 2013 and $6.3 million last quarter. Product revenues (display sales) increased approximately $183,000 or 3 percent over second quarter last year due primarily to an increase in average selling price. The increase in product revenues versus last quarter is also attributable primarily to an increase in average selling price as well as an increase in units shipped. The increases in average selling price were a result of changes in product and customer mix. R&D contract revenues decreased $193,000 from second quarter last year due to fewer R&D contracts. eMagin announced an expected rebound in R&D contract revenues in the coming quarters due to certain award notifications it has received. Gross margin for the second quarter was 31 percent on gross profit of $2.2 million compared to a gross margin of 34 percent in the same quarter last year. The decline in gross margin was due to increased production costs including labor and lower manufacturing yields. Operating expenses for the second quarter of 2014 decreased to $3.2 million from $3.5 million in second quarter last year and $3.5 million last quarter. Operating expenses are comprised of R&D expenses and selling, general and administrative (SG&A) expenses. Unfunded R&D expenses decreased to $1.3 million from $1.5 million in the year-ago quarter. The spending decrease was due to decreased unfunded product development and non-cash compensation expenses. SG&A expenses decreased to $1.9 million from $2.1 million in the year ago quarter primarily due to decreased non-cash compensation expenses. Operating loss for the second quarter decreased to $1.0 million from $1.1 million in second quarter last year. Net loss was $1.0 million or $0.04 per diluted share, versus net loss of $1.0 million or $0.04 per diluted share for the second quarter last year. At June 30, 2014, the Company had approximately $5.6 million of cash, cash equivalents, and investments in certificates of deposit, compared to $8.3 million at March 31, 2014. Recent Corporate Highlights
Outlook Based on current and forecasted market conditions, expected orders and current backlog, eMagin reaffirms its previous guidance that the last three quarters of 2014 are expected to have higher average revenue than Q1 2014. Conference Call Information Full results will be published in the Company's 10-Q report for the second quarter ended June 30, 2014, expected to be filed by August 15, and will also be available via the Company's website www.emagin.com. A conference call and live webcast will begin today at 4:45 p.m. ET. An archive of the webcast will be available one hour after the live call through September 13, 2014. 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, OLED microdisplay manufacturing know-how and mobile display systems, eMagin manufactures high-resolution OLED microdisplays and integrates them with magnifying optics to deliver virtual images comparable 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 (News - Alert). 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:
|