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eMagin Announces First Quarter 2015 Financial ResultseMagin (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 first quarter of 2015. Andrew G. Sculley, President and CEO, stated, "We are pleased the Company turned a profit in first quarter and earned $0.9 million in EBITDA. Our improvement in financial results was due to lower manufacturing costs, better yield and significantly lower operating expenses. Also during the first quarter, we made progress in several key areas of the business that we believe position the Company for continued OLED technology leadership and revenue growth. Our work on developing production quantity ultra-high brightness, direct-patterned displays that eliminates the use of color filters progressed during the quarter. We recently invested in new direct patterning equipment for this effort. This work will result in manufacturable, full-color direct-patterned ultra-high brightness microdisplays that are about 20 times brighter than the typical smart phone display. These ultra-high brightness displays will help accelerate the penetration of our OLED microdisplays into new markets such as avionics and consumer headset applications. eMagin continues to lead the industry in this effort for direct patterned OLED at microdisplay pixel sizes. In addition, although we encountered a delay during the quarter, our new, advanced HMD 'head mounted display' prototype was recently completed. The headset features 2,000 by 2,000 pixel resolution, a superior form factor, a wide 100+ degree field of view and has all the outstanding advantages of eMagin OLED microdisplays. We are currently demonstrating the headset to potential partners and customers." First Quarter Results Revenues for first quarter 2015 were $6.0 million versus $6.3 million for first quarter last year, a decrease of approximately 5%. Product revenues (primarily display sales) totaled $5.1 million, about 18% less than first quarter last year. R&D contract revenues increased significantly to approximately $885,000 from approximately $19,000 same quarter last year. Display average selling price increased and the number of displays shipped decreased from last year. The increase in average selling price is a result of changes in product and customer mix. Gross margin for first quarter was 39 percent on gross profit of $2.4 million compared to a gross margin of 31 percent on gross profit of $1.9 million in first quarter last year. The increase in gross margin from last year was primarily due to lower manufacturing expenses, higher yield and a higher average selling price. Operating expenses for first quarter decreased to $2.0 million from $3.5 million in first quarter last year. Operating expenses are comprised of R&D expenses and selling, general and administrative (SG&A) expenses. R&D expenses decreased to $0.9 million from $1.4 million in first quarter last year. The decrease was due primarily to the significant increase in funded R&D contracts, which tends to reduce the non-funded internal expense and to the requirements of the respective R&D contracts being worked on in each year. SG&A expenses decreased by almost half to $1.1 million from $2.1 million. The $1.1 million decrease of approximately 47% is primarily a result of a decrease of approximately $0.4 million in the allowance for doubtful accounts, and decreases in personnel and non-cash compensation costs. In first quarter last year, the Company booked legal settlement costs of approximately $116,000. Operating profit for the first quarter increased $1.9 million to $0.3 million from a loss of $1.6 million in first quarter last year. Net income was $0.3 million or $0.01 per diluted share, versus a net loss of $1.6 million or $0.07 per diluted share in first quarter last year. Adjusted EBITDA improved $1.6 million to $0.9 million from a loss of $ 0.7 million in first quarter last year. At March 31, 2015, the Company had approximately $6.7 million of cash, cash equivalents, and investments in certificates of deposit, compared to $6.0 million at December 31, 2014. The increase in cash is due to more favorable operational results. Recent Corporate Highlights
Outlook Based on current and forecasted market conditions, expected orders and current backlog, eMagin affirms our previous guidance that we expect revenues will total between $26 million to $29 million in 2015. Conference Call Information Full results will be published in the Company's 10-Q report for the first quarter ended March 31, 2015, expected to be filed by May 15, 2015 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 June 13, 2015. 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:
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