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Share Name | Share Symbol | Market | Type |
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eMagin Corporation | AMEX:EMAN | AMEX | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
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0.00 | 0.00% | 2.07 | 0 | 01:00:00 |
-Significant Progress in Commercial Market and Military Momentum Increases-
eMagin Corporation, or the “Company”, (NYSE American:EMAN) a 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 third quarter ended September 30, 2017.
“We experienced a heightened level of activity in the third quarter, both in our commercial initiatives as well as our military programs,” said Andrew Sculley, President and Chief Executive Officer. “While this was not reflected in our financial results for the period, in part due to a manufacturing issue we have since resolved, our activities during the quarter enabled us to achieve major milestones towards the commercialization of our display technology in the consumer sector and positioned us for stronger performance in our military business in the quarters ahead. In particular, we believe our accomplishments with multiple consumer partners demonstrate the critical role eMagin’s display technology plays in driving the AR/VR market to the next level.
“It is widely acknowledged across the AR/VR ecosystem that display quality is a major obstacle to bringing AR/VR into the mainstream. We believe that the partner agreements that we have signed and the attention we are receiving from tier-one consumer companies, headset creators and volume manufacturers underscores the fact that our proprietary, patented direct patterning technology solves this problem and makes us the ‘go-to’ microdisplay company that will enable AR/VR.
“Our agreements with these tier-one consumer electronics companies, each following rigorous and extensive diligence on our direct patterning technology, are outstanding endorsements of eMagin’s direct patterning technology. These are major steps toward the commercialization of our technology and further evidence of our belief that our direct patterned display technology will enable the next generation of AR/VR for the consumer the market. Momentum is building as we continue to have discussions with other top tier consumer electronics companies and pursue additional agreements. At the same time, the agreements we have signed to date are fueling our ongoing discussions with prospective mass production partners to scale production for our technology to meet commercial demand.
“On the military side of our business, we saw increased booking activity for both our U.S. programs as well as with foreign military customers. We booked over 90 new orders totaling more than $6.5 million in the third quarter and are seeing the pace continue into the fourth quarter with several sizeable orders. In addition to over 60 follow-on orders from existing customers, we booked another 30 orders related to new projects from both new and existing customers which will provide us with a strong backlog entering 2018. This is consistent with our previously communicated expectation of a ramp up in our military business.
“Additionally, we have accelerated our activity in the aviation sector in several key programs, most notably in our work to upgrade the F-35 production helmet to OLED displays which will eliminate the ‘green glow’ effect of the current LCD displays. We believe that this is an area of tremendous opportunity for eMagin.
“Finally, we are continuing to advance our product technology as we have increased brightness beyond 5,000 nits while further reducing power consumption. We have also made enhancements to our manufacturing processes for displays and have ordered new equipment that we expect will help us improve yields and reduce cycle time,” continued Mr. Sculley. “We are developing a compact interface for our 2K X 2K microdisplay, which we believe has the highest brightness and sharpest resolution in the global marketplace today, for system integrators to quickly insert into optical systems. We expect to introduce this hardware to the marketplace in the second quarter of 2018. This compact interface will enable both consumer and military prospects to more easily integrate our 2K x 2K microdisplay into development systems and therefore speed time to prototype and to production. Overall, I believe that we have made significant progress in all areas of our business this year and are well-positioned entering 2018,” concluded Mr. Sculley.
Business and Product Highlights as of November 8, 2017
Third Quarter Results
Revenues for the third quarter of 2017 were $4.3 million, flat with the third quarter of 2016.
Product revenues totaled $4.0 million versus $3.5 million in the third quarter last year. The year-on-year increase in product revenue was due to an increase in display revenues from the gradual ramp up of new U.S. military programs and increased demand by international customers, offset by the impact of production issues in the quarter that have since been resolved. Contract revenues totaled $266 thousand in the third quarter compared to $769 thousand in the same quarter of last year due to the greater volume of work performed in the prior year quarter on military contracts, including the Mantech program.
Overall gross margin for the third quarter was 7% on gross profit of $278 thousand compared to a gross margin of 30% on gross profit of $1.3 million in the prior year period, primarily due to lower volumes and higher unit costs associated with the production issues in the quarter.
Operating expenses for the third quarter of 2017, including R&D expenses, decreased to $3.2 million, from $3.7 million in the third quarter of 2016.
Third quarter R&D expenses decreased 24% over the prior year quarter due to the reduction in R&D spending on the night vision consumer products offset in part by the work performed on the Company’s direct patterning technology. SG&A expenses were essentially flat with the prior year third quarter at $2.0 million.
Operating loss for the third quarter was $3.0 million versus an operating loss of $2.4 million in the third quarter of last year. Net loss for the third quarter of 2017 was $3.0 million, or $0.09 per diluted share, compared to a net loss of $2.4 million, or $0.08 per diluted share, in the third quarter of 2016.
As of September 30, 2017, the Company had cash of $2.0 million, working capital of $10.6 million, and borrowing availability under the ABL facility of $3.7 million.
Conference Call Information
A conference call and live webcast will begin today at 9:00 am ET. An archive of the webcast will be available one hour after the live call through December 9, 2017. 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’s 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. For a more complete description of the risks that could cause our actual results to differ from our current expectations, please see the section entitled “Risk Factors” in eMagin’s Annual Report on Form 10-K for the fiscal year ended December 31, 2016 and Current Report on Form 8-K filed with the SEC on May 19, 2017.
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, and non-cash compensation expense (“Adjusted 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 financial statements. Management believes that these adjusted measures reflect the essential operating activities of the Company. A reconciliation of non-GAAP financial information appears below.
EMAGIN CORPORATION CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands, except share and per share data)September 30,2017
December 31,2016
(unaudited) ASSETS Current assets: Cash and cash equivalents $ 1,964 $ 5,241 Accounts receivable, net 3,428 2,834 Unbilled accounts receivable 475 1,401 Inventories 9,080 7,435 Prepaid expenses and other current assets 1,132 1,040 Total current assets 16,079 17,951 Equipment, furniture and leasehold improvements, net 8,802 8,980 Intangibles and other assets 241 282 Total assets $ 25,122 $ 27,213 LIABILITIES AND SHAREHOLDERS’ EQUITY Current liabilities: Accounts payable $ 1,272 $ 1,432 Accrued compensation 1,285 1,528 Revolving credit facility, net 920 1,689 Other accrued expenses 492 1,069 Deferred revenue 988 445 Other current liabilities 566 590 Total current liabilities 5,523 6,753 Commitments and contingencies Shareholders’ equity: Preferred stock, $.001 par value: authorized 10,000,000 shares:Series B Convertible Preferred stock, (liquidation preference of $5,659) stated value $1,000
per share, $.001 par value: 10,000 shares designated and 5,659 issued and outstanding as
of September 30, 2017 and December 31, 2016
— —Common stock, $.001 par value: authorized 200,000,000 shares, issued 35,134,655 shares as
of September 30, 2017 and 31,788,582 shares as of December 31, 2016
35 32 Additional paid-in capital 246,312 239,915 Accumulated deficit (226,248 ) (218,987 ) Treasury stock, 162,066 shares as of September 30, 2017 and December 31, 2016 (500 ) (500 ) Total shareholders’ equity 19,599 20,460 Total liabilities and shareholders’ equity $ 25,122 $ 27,213 EMAGIN CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except share and per share data) (unaudited) Three Months Ended Nine Months Ended September 30, September 30, 2017 2016 2017 2016 Revenues: Product $ 4,014 $ 3,536 $ 13,050 $ 13,612 Contract 266 769 2,559 2,227 License — — — 1,000 Total revenues, net 4,280 4,305 15,609 16,839 Cost of revenues: Product 3,802 2,545 10,918 9,639 Contract 200 478 1,346 1,248 License — — — — Total cost of revenues 4,002 3,023 12,264 10,887 Gross profit 278 1,282 3,345 5,952 Operating expenses: Research and development 1,271 1,666 3,782 4,468 Selling, general and administrative 1,970 2,041 6,586 6,044 Total operating expenses 3,241 3,707 10,368 10,512 Loss from operations (2,963 ) (2,425 ) (7,023 ) (4,560 ) Other income (expense): Interest expense, net (27 ) (8 ) (249 ) (28 ) Other income, net (2 ) 4 11 8 Total other income (expense) (29 ) (4 ) (238 ) (20 ) Loss before provision for income taxes (2,992 ) (2,429 ) (7,261 ) (4,580 ) Provision for income taxes — (1 ) — (1 ) Net loss $ (2,992 ) $ (2,430 ) $ (7,261 ) $ (4,581 ) Loss per share, basic $ (0.09 ) $ (0.08 ) $ (0.22 ) $ (0.15 ) Loss per share, diluted $ (0.09 ) $ (0.08 ) $ (0.22 ) $ (0.15 ) Weighted average number of shares outstanding: Basic 34,972,589 30,292,166 33,214,262 29,689,458 Diluted 34,972,589 30,292,166 33,214,262 29,689,458Non-GAAP Information
Three Months Ended Nine Months Ended September 30, September 30, 2017 2016 2017 2016 Net loss $ (2,992 ) $ (2,430 ) $ (7,261 ) $ (4,581 ) Non-cash compensation 190 398 520 658 Depreciation and intangibles amortization expense 406 400 1,376 1,214 Interest expense 27 8 249 28 Provision for income taxes - 1 - 1 Adjusted EBITDA $ (2,367 ) $ (1,623 ) $ (5,116 ) $ (2,680 )
View source version on businesswire.com: http://www.businesswire.com/news/home/20171109005309/en/
eMagin Corporation,Jeffrey Lucas, 845-838-7931Chief Financial Officerjlucas@emagin.comorAffinity Growth PartnersBetsy Brod, 212-661-2231Betsy.brod@affinitygrowth.com
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