Emagin (AMEX:EMA)
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eMagin Corporation (AMEX:EMA), the leader in OLED virtual imaging
technology, announced today financial results for the quarter ended
September 30, 2006.
Third quarter selected highlights include the following.
Financial Summary
Revenue for the three and nine months ended September 30, 2006, of
$2.3 million and $5.6 million increased 103% and 127% respectively
from $1.1 million and $2.5 million at September 30, 2005. The growth
in revenue was directly attributable to increases in microdisplay
demand and output from our New York production facility.
Approximately 8,000 microdisplays were produced during the third
quarter. Manufacturing uptime has remained consistent since the
implementation of new processes in March 2006, with output
consistently in line with target rates based on expected demand and
inventory objectives.
Net loss for the three and nine months ended September 30, 2006, was
$3.8 million and $13.8 million and included $0.9 million and $2.5
million of non-cash expense associated with the expensing of stock
options and amortization of debt discounts. Excluding these items on a
non GAAP basis, net loss for the three and nine months ended September
30, 2006 was $2.9 million and $11.3 million. This compares to a net
loss of $3.8 million and $11.7 million during the three and nine
months ended September 30, 2005, where stock options were not expensed
and debt discounts were not amortized. Loss per share on a GAAP basis
for the three and nine months ended September 30, 2006, were $(0.04)
and $(0.14) and for the same periods ended September 30, 2005 $(0.05)
and $(0.14) per share
Recent Highlights
eMagin announced a Cooperative Research and Development Agreement with
the U.S. Army. The company will work with the Night Vision and
Electronic Sensors Directorate (NVESD) to assess the applicability of
active matrix OLED displays in military systems on the basis of their
usable lifetimes.
eMagin announced a multi-year contract with Sagem Defense Securite to
provide up to the 35,000 microdisplays for its FELIN program. FELIN is
the French Army's integrated soldier system.
The FY 2007 Department of Defense Appropriations Bill included two
priority projects sought by eMagin Corporation and the U.S. Army to
support projected military needs. The first aims to improve the
power-efficiency of OLED microdisplays for U.S. Army thermal imaging
applications; the second will result in a very high-resolution,
HD-compatible display for U.S. Army medical applications.
eMagin announced that it is taking orders for pre-production version
samples of its SVGA-3DS, its first product to combine the company’s
OLED-XL technology with its new IC design. The prototype microdisplays
will be available in limited quantities with a custom interface design
& reference kit (IDRK) in December.
During the period, year over year revenue increases continued at over
100% for the third quarter in a row and sequentially grew 37% from
second quarter levels. Commenting on the results, Gary Jones, eMagin’s
CEO and president, said, “As you can see our
financial performance is improving. Costs are down and third quarter
revenue of $2.3 million is a substantial increase over the same period
last year, providing continued proof of traction in our key markets. The
recent placements of our microdisplays by OEMs in major systems such as
Sagem's FELIN system in European military programs and Nivisys' TAM-14
being deployed by the U.S. Department of Homeland Security indicate a
strong future for the Company's OLED technology.”
The Company reported that it remains on track with efforts to increase
production, yield, and uptime at its OLED microdisplay fabrication
facility in Hopewell Junction, New York. Jones noted, “Uptime
and output increases have supported a doubling of revenue and the
building of modest finished goods inventory critical for our next phase
of growth. Essentially we have tripled uptime and output and continue to
achieve positive results.”
Jones continued, “Clearly, we are in an early
stage of revenue development and, as with any emerging market, delays
are inevitable. In our case, because this business requires expenses
similar to a semiconductor manufacturer’s, any
delays along with the need for growing inventories and accounts
receivable create serious cash flow pressure. In order to address these
and our other cash flow concerns, and in response to inquiries that we
have received, we retained CIBC World Markets Corporation and Larkspur
Capital Corporation to assist us in investigating and evaluating various
strategic alternatives, ranging from investment to acquisition.
Actualizing such financial opportunities and managing cash flow are
critical short-term issues for eMagin, irrespective of the otherwise
improving business situation.”
Full results are available by referencing the Company’s
10Q report for the quarter ended September 30, 2006, to be filed with
the SEC.
About eMagin Corporation
A leader in OLED microdisplay technology, eMagin integrates
high-resolution OLED microdisplays 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. The company’s
own Z800 3DVisor provides 3D stereovision and headtracking for PC
gaming, training and simulation, immersion therapy, and other
applications. eMagin's microdisplay manufacturing and R&D operations are
co-located with IBM on its campus in East Fishkill, New York. System
design facilities and sales and marketing are located in Bellevue,
Washington. More information about eMagin and its products is available
at www.emagin.com.
Note: eMagin is a trademark of eMagin Corporation.
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 and its subsidiaries’
expectations, intentions, strategies and beliefs pertaining to future
events or future financial performance. All statements contained herein
are based upon information available to eMagin’s
management as of the date hereof, and actual results may vary based upon
future events, both within and without eMagin management’s
control. In some cases, you can identify forward-looking statements by
terminology such as "may," "will," "should," "expect," "plan,"
"anticipate," "believe," "estimate," "predict," "potential" or
"continue," the negative of such terms, or other comparable terminology.
These statements are only predictions. 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.
eMAGIN CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share data)
September 30,
December 31,
2006
2005
(unaudited)
ASSETS
Current assets:
Cash and cash equivalents
$
1,407
$
6,727
Investments – held to maturity
124
120
Accounts receivable, net
1,119
762
Inventory
2,940
3,839
Prepaid expenses and other current assets
1,053
1,045
Total current assets
6,643
12,493
Equipment, furniture and leasehold improvements, net
802
1,299
Intangible assets, net
56
57
Other assets
390
233
Deferred costs
549
—
Total assets
$
8,440
$
14,082
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable
$
272
$
562
Accrued compensation
791
1,010
Other accrued expenses
1,361
1,894
Deferred revenue
116
96
Current portion of capitalized lease obligations
10
16
Current portion of debt
2,963
—
Other current liabilities
49
47
Total current liabilities
5,562
3,625
Capitalized lease obligations
—
6
Long-term debt
1,311
50
Total liabilities
6,873
3,681
Commitments and contingencies
Shareholders’ equity:
Preferred stock, $.001 par value: authorized 10,000,000 shares; no
shares issued and outstanding
—
—
Common stock, $.001 par value: authorized 200,000,000 shares, issued
and outstanding, 101,367,835 shares as of September 30, 2006 and
99,972,458 shares as of December 31, 2005
101
100
Additional paid-in capital
180,814
175,860
Accumulated deficit
(179,348)
(165,559)
Total shareholders’ equity
1,567
10,401
Total liabilities and shareholders’ equity
$
8,440
$
14,082
eMAGIN CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except share data)
(unaudited)
Three Months EndedSeptember 30,
Nine Months EndedSeptember 30,
2006
2005
2006
2005
Revenue:
Product revenue
$
2,242
$
1,131
$
5,487
$
2,437
Contract revenue
50
—
120
36
Total revenue, net
2,292
1,131
5,607
2,473
Cost of goods sold
2,940
2,686
8,934
7,031
Gross loss
(648)
(1,555)
(3,327)
(4,558)
Operating expenses:
Research and development
965
1,022
3,507
3,038
Selling, general and administrative
1,838
1,220
6,674
4,315
Total operating expenses
2,803
2,242
10,181
7,353
Loss from operations
(3,451)
(3,797)
(13,508)
(11,911)
Other income (expense):
Interest expense
(354)
(1)
(354)
(3)
Other income, net
14
35
73
184
Total other income, net
(340)
34
(281)
181
Net loss
$
(3,791)
$
(3,763)
$
(13.789)
$
(11,730)
Loss per share, basic and diluted
$
(0.04)
$
(0.05)
$
(0.14)
$
(0.14)
Weighted average number of shares outstanding:
Basic and diluted
100,772,566
83,036,471
100,309,851
82,320,101
eMagin Corporation (AMEX:EMA), the leader in OLED virtual imaging
technology, announced today financial results for the quarter ended
September 30, 2006.
Third quarter selected highlights include the following.
Financial Summary
-- Revenue for the three and nine months ended September 30,
2006, of $2.3 million and $5.6 million increased 103% and 127%
respectively from $1.1 million and $2.5 million at September
30, 2005. The growth in revenue was directly attributable to
increases in microdisplay demand and output from our New York
production facility.
-- Approximately 8,000 microdisplays were produced during the
third quarter. Manufacturing uptime has remained consistent
since the implementation of new processes in March 2006, with
output consistently in line with target rates based on
expected demand and inventory objectives.
-- Net loss for the three and nine months ended September 30,
2006, was $3.8 million and $13.8 million and included $0.9
million and $2.5 million of non-cash expense associated with
the expensing of stock options and amortization of debt
discounts. Excluding these items on a non GAAP basis, net loss
for the three and nine months ended September 30, 2006 was
$2.9 million and $11.3 million. This compares to a net loss of
$3.8 million and $11.7 million during the three and nine
months ended September 30, 2005, where stock options were not
expensed and debt discounts were not amortized. Loss per share
on a GAAP basis for the three and nine months ended September
30, 2006, were $(0.04) and $(0.14) and for the same periods
ended September 30, 2005 $(0.05) and $(0.14) per share
Recent Highlights
-- eMagin announced a Cooperative Research and Development
Agreement with the U.S. Army. The company will work with the
Night Vision and Electronic Sensors Directorate (NVESD) to
assess the applicability of active matrix OLED displays in
military systems on the basis of their usable lifetimes.
-- eMagin announced a multi-year contract with Sagem Defense
Securite to provide up to the 35,000 microdisplays for its
FELIN program. FELIN is the French Army's integrated soldier
system.
-- The FY 2007 Department of Defense Appropriations Bill included
two priority projects sought by eMagin Corporation and the
U.S. Army to support projected military needs. The first aims
to improve the power-efficiency of OLED microdisplays for U.S.
Army thermal imaging applications; the second will result in a
very high-resolution, HD-compatible display for U.S. Army
medical applications.
-- eMagin announced that it is taking orders for pre-production
version samples of its SVGA-3DS, its first product to combine
the company's OLED-XL technology with its new IC design. The
prototype microdisplays will be available in limited
quantities with a custom interface design & reference kit
(IDRK) in December.
During the period, year over year revenue increases continued at
over 100% for the third quarter in a row and sequentially grew 37%
from second quarter levels. Commenting on the results, Gary Jones,
eMagin's CEO and president, said, "As you can see our financial
performance is improving. Costs are down and third quarter revenue of
$2.3 million is a substantial increase over the same period last year,
providing continued proof of traction in our key markets. The recent
placements of our microdisplays by OEMs in major systems such as
Sagem's FELIN system in European military programs and Nivisys' TAM-14
being deployed by the U.S. Department of Homeland Security indicate a
strong future for the Company's OLED technology."
The Company reported that it remains on track with efforts to
increase production, yield, and uptime at its OLED microdisplay
fabrication facility in Hopewell Junction, New York. Jones noted,
"Uptime and output increases have supported a doubling of revenue and
the building of modest finished goods inventory critical for our next
phase of growth. Essentially we have tripled uptime and output and
continue to achieve positive results."
Jones continued, "Clearly, we are in an early stage of revenue
development and, as with any emerging market, delays are inevitable.
In our case, because this business requires expenses similar to a
semiconductor manufacturer's, any delays along with the need for
growing inventories and accounts receivable create serious cash flow
pressure. In order to address these and our other cash flow concerns,
and in response to inquiries that we have received, we retained CIBC
World Markets Corporation and Larkspur Capital Corporation to assist
us in investigating and evaluating various strategic alternatives,
ranging from investment to acquisition. Actualizing such financial
opportunities and managing cash flow are critical short-term issues
for eMagin, irrespective of the otherwise improving business
situation."
Full results are available by referencing the Company's 10Q report
for the quarter ended September 30, 2006, to be filed with the SEC.
About eMagin Corporation
A leader in OLED microdisplay technology, eMagin integrates
high-resolution OLED microdisplays 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. The company's own
Z800 3DVisor provides 3D stereovision and headtracking for PC gaming,
training and simulation, immersion therapy, and other applications.
eMagin's microdisplay manufacturing and R&D operations are co-located
with IBM on its campus in East Fishkill, New York. System design
facilities and sales and marketing are located in Bellevue,
Washington. More information about eMagin and its products is
available at www.emagin.com.
Note: eMagin is a trademark of eMagin Corporation.
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 and its subsidiaries' expectations, intentions,
strategies and beliefs pertaining to future events or future financial
performance. All statements contained herein are based upon
information available to eMagin's management as of the date hereof,
and actual results may vary based upon future events, both within and
without eMagin management's control. In some cases, you can identify
forward-looking statements by terminology such as "may," "will,"
"should," "expect," "plan," "anticipate," "believe," "estimate,"
"predict," "potential" or "continue," the negative of such terms, or
other comparable terminology. These statements are only predictions.
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.
-0-
*T
eMAGIN CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share data)
September 30, December 31,
2006 2005
(unaudited)
------------- ------------
ASSETS
Current assets:
Cash and cash equivalents $ 1,407 $ 6,727
Investments - held to maturity 124 120
Accounts receivable, net 1,119 762
Inventory 2,940 3,839
Prepaid expenses and other current assets 1,053 1,045
------------- ------------
Total current assets 6,643 12,493
Equipment, furniture and leasehold
improvements, net 802 1,299
Intangible assets, net 56 57
Other assets 390 233
Deferred costs 549 --
------------- ------------
Total assets $ 8,440 $ 14,082
============= ============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 272 $ 562
Accrued compensation 791 1,010
Other accrued expenses 1,361 1,894
Deferred revenue 116 96
Current portion of capitalized lease
obligations 10 16
Current portion of debt 2,963 --
Other current liabilities 49 47
------------- ------------
Total current liabilities 5,562 3,625
Capitalized lease obligations -- 6
Long-term debt 1,311 50
------------- ------------
Total liabilities 6,873 3,681
------------- ------------
Commitments and contingencies
Shareholders' equity:
Preferred stock, $.001 par value: authorized
10,000,000 shares; no shares issued and
outstanding -- --
Common stock, $.001 par value: authorized
200,000,000 shares, issued and outstanding,
101,367,835 shares as of September 30, 2006
and 99,972,458 shares as of December 31,
2005 101 100
Additional paid-in capital 180,814 175,860
Accumulated deficit (179,348) (165,559)
------------- ------------
Total shareholders' equity 1,567 10,401
------------- ------------
Total liabilities and shareholders'
equity $ 8,440 $ 14,082
============= ============
*T
-0-
*T
eMAGIN CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except share data)
(unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
-------------------------- --------------------------
2006 2005 2006 2005
------------- ------------ ------------- ------------
Revenue:
Product revenue $ 2,242 $ 1,131 $ 5,487 $ 2,437
Contract
revenue 50 -- 120 36
------------- ------------ ------------- ------------
Total
revenue,
net 2,292 1,131 5,607 2,473
------------- ------------ ------------- ------------
Cost of goods
sold 2,940 2,686 8,934 7,031
------------- ------------ ------------- ------------
Gross loss (648) (1,555) (3,327) (4,558)
------------- ------------ ------------- ------------
Operating
expenses:
Research and
development 965 1,022 3,507 3,038
Selling,
general and
administrative 1,838 1,220 6,674 4,315
------------- ------------ ------------- ------------
Total
operating
expenses 2,803 2,242 10,181 7,353
------------- ------------ ------------- ------------
Loss from
operations (3,451) (3,797) (13,508) (11,911)
Other income
(expense):
Interest
expense (354) (1) (354) (3)
Other income,
net 14 35 73 184
------------- ------------ ------------- ------------
Total other
income, net (340) 34 (281) 181
------------- ------------ ------------- ------------
Net loss $ (3,791) $ (3,763) $ (13.789) $ (11,730)
============= ============ ============= ============
Loss per share,
basic and
diluted $ (0.04) $ (0.05) $ (0.14) $ (0.14)
============= ============ ============= ============
Weighted average
number of
shares
outstanding:
Basic and
diluted 100,772,566 83,036,471 100,309,851 82,320,101
============= ============ ============= ============
*T