Form 8-K - Current report

false000100528400010052842024-08-012024-08-01

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): August 1, 2024

UNIVERSAL DISPLAY CORPORATION

(Exact name of Registrant as Specified in Its Charter)

Pennsylvania	1-12031	23-2372688
(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(IRS Employer Identification No.)
250 Phillips Boulevard, Ewing, NJ		08618
(Address of Principal Executive Offices)		(Zip Code)

Registrant’s Telephone Number, Including Area Code: [phone]

Not Applicable

(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instructions A.2. below):

 

☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Common Stock, $0.01 par value		OLED		The NASDAQ Stock Market LLC

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

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Item 2.02 Results of Operations and Financial Condition.

On August 1, 2024, Universal Display Corporation (the "Company") issued a press release regarding its financial results for the quarter ended June 30, 2024. A copy of the press release is furnished as Exhibit 99.1 to this report.

The information set forth under this “Item 2.02. Results of Operations and Financial Condition” (including the exhibit) shall not be deemed to be “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, nor shall it be incorporated by reference in any filing made by the Company pursuant to the Securities Act of 1933, as amended, other than to the extent that such filing incorporates by reference any or all of such information by express reference thereto.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits

 

Exhibit Number		Description
99.1		Press Release by the Registrant, dated August 1, 2024, furnished pursuant to Item 2.02 of Form 8-K.
104		Cover Page Interactive Data File (embedded within the Inline XBRL document).

 

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 

		UNIVERSAL DISPLAY CORPORATION
Date: August 1, 2024		By:	/s/ Brian Millard
			Brian Millard
			Vice President, Chief Financial Officer and Treasurer

 

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Exhibit 99.1

	Press Release

 

		Universal Display Contact:
		Darice Liu
		[e-mail]
		[e-mail]
		[phone]

 

Universal Display Corporation Announces Second Quarter 2024 Financial Results

 

 

EWING, N.J. – August 1, 2024 – Universal Display Corporation (Nasdaq: OLED), enabling energy-efficient displays and lighting with its UniversalPHOLED® technology and materials, today reported financial results for the second quarter ended June 30, 2024.

 

“We reported solid second quarter results as the OLED IT adoption cycle begins to gain momentum,” said Brian Millard, Vice President and Chief Financial Officer of Universal Display Corporation. “With leading OEMs embarking on their OLED IT journey with the introduction of new OLED PC products, we believe that a new multi-year capex cycle has commenced to support this growth. As the broadening proliferation of OLEDs across the consumer landscape fuels the market’s positive trajectory, we are enhancing our operational and strategic infrastructure and fortifying our leadership position in the ecosystem. This new chapter in our long-term growth story is expected to usher in tremendous opportunities for the industry and for us.”

 

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Financial Highlights for the Second Quarter of 2024

•

Total revenue in the second quarter of 2024 was $158.5 million as compared to $146.6 million in the second quarter of 2023.

•

Revenue from material sales was $95.4 million in the second quarter of 2024 as compared to $77.1 million in the second 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 $59.6 million in the second quarter of 2024 as compared to $64.4 million in the second quarter of 2023. The decrease in royalty and license fees was primarily the result of changes in customer mix between periods, partially offset by increased sales volume.

•

Cost of material sales was $35.5 million in the second quarter of 2024 as compared to $28.6 million in the second quarter of 2023. The increase in cost of material sales was primarily due to an increase in the level of materials sales.

•

Total gross margin was 76% in the second quarter of 2024 as compared to 78% in the second quarter of 2023. The decrease was primarily due to changes in customer and product mix.

•

Operating income was $56.4 million in the second quarter of 2024 as compared to $58.6 million in the second quarter of 2023.

•

The effective income tax rate was 19.3% and 22.4% in the second quarter of 2024 and 2023, respectively.

•

Net income was $52.3 million or $1.10 per diluted share in the second quarter of 2024 as compared to $49.7 million or $1.04 per diluted share in the second quarter of 2023.

 

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Revenue Comparison

($ in thousands)		Three Months Ended June 30,
		2024				2023
Material sales		$	95,442			$	77,107
Royalty and license fees			59,551				64,399
Contract research services			3,512				5,059
Total revenue		$	158,505			$	146,565

Cost of Materials Comparison

($ in thousands)		Three Months Ended June 30,
		2024				2023
Material sales		$	95,442			$	77,107
Cost of material sales			35,491				28,570
Gross margin on material sales			59,951				48,537
Gross margin as a % of material sales			63	%			63	%

 

 

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Financial Highlights for the First Half of 2024

•

Total revenue in the first half of 2024 was $323.8 million as compared to $277.0 million in the first half of 2023.

•

Revenue from material sales was $188.7 million in the first half of 2024 as compared to $147.3 million in the first half of 2023. The increase in material sales was primarily due to strengthened demand for our emitter materials.

•

Revenue from royalty and license fees was $127.8 million in the first half of 2024 as compared to $119.6 million in the first half 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 and changes in customer mix between periods.

•

Cost of material sales was $69.6 million in the first half of 2024 as compared to $58.1 million in the first half of 2023 primarily due to an increase in the level of materials sales, partially offset by a $3.8 million decrease in inventory reserve expense.

•

Total gross margin was 77% in the first half of 2024 as compared to 76% in the first half of 2023.

•

Operating income was $119.3 million in the first half of 2024 as compared to $104.0 million in the first half of 2023.

•

The effective income tax rate was 19.3% and 22.6% in the first half of 2024 and 2023, respectively.

•

Net income was $109.2 million or $2.29 per diluted share in the first half of 2024 compared to $89.5 million or $1.87 per diluted share in the first half of 2023.

 

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Revenue Comparison

($ in thousands)		Six Months Ended June 30,
		2024				2023
Material sales		$	188,726			$	147,297
Royalty and license fees			127,819				119,609
Contract research services			7,219				10,126
Total revenue		$	323,764			$	277,032

Cost of Materials Comparison

($ in thousands)		Six Months Ended June 30,
		2024				2023
Material sales		$	188,726			$	147,297
Cost of material sales			69,587				58,058
Gross margin on material sales			119,139				89,239
Gross margin as a % of material sales			63	%			61	%

 

 

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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 $645 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 third quarter cash dividend of $0.40 per share on the Company’s common stock. The dividend is payable on September 30, 2024 to all shareholders of record as of the close of business on September 16, 2024.

Conference Call Information

In conjunction with this release, Universal Display will host a conference call on Thursday, August 1, 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.

 

 

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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.

 

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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)

 

		June 30, 2024				December 31, 2023
ASSETS
CURRENT ASSETS:
Cash and cash equivalents		$	92,856			$	91,985
Short-term investments			437,667				422,137
Accounts receivable			124,386				139,850
Inventory			171,843				175,795
Other current assets			132,729				87,365
Total current assets			959,481				917,132
PROPERTY AND EQUIPMENT, net of accumulated depreciation of $153,523 and $143,908			185,474				175,150
ACQUIRED TECHNOLOGY, net of accumulated amortization of $195,235 and $186,850			81,940				90,325
OTHER INTANGIBLE ASSETS, net of accumulated amortization of $11,125 and $10,414			6,163				6,874
GOODWILL			15,535				15,535
INVESTMENTS			362,459				299,548
DEFERRED INCOME TAXES			66,664				59,108
OTHER ASSETS			98,845				105,289
TOTAL ASSETS		$	1,776,561			$	1,668,961
LIABILITIES AND SHAREHOLDERS’ EQUITY
CURRENT LIABILITIES:
Accounts payable		$	23,636			$	10,933
Accrued expenses			58,624				52,080
Deferred revenue			63,784				47,713
Other current liabilities			5,955				8,096
Total current liabilities			151,999				118,822
DEFERRED REVENUE			6,732				12,006
RETIREMENT PLAN BENEFIT LIABILITY			53,870				52,249
OTHER LIABILITIES			37,122				38,658
Total liabilities			249,723				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, 48,814,273    and 48,731,026 shares issued, and 47,448,625 and 47,365,378 shares outstanding, at    June 30, 2024 and December 31, 2023, respectively			488				487
Additional paid-in capital			712,234				699,554
Retained earnings			860,058				789,553
Accumulated other comprehensive loss			(4,660	)			(1,086	)
Treasury stock, at cost (1,365,648 shares at June 30, 2024 and December 31, 2023)			(41,284	)			(41,284	)
Total shareholders’ equity			1,526,838				1,447,226
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY		$	1,776,561			$	1,668,961

 

 

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UNIVERSAL DISPLAY CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

(UNAUDITED)

(in thousands, except share and per share data)

		Three Months Ended June 30,								Six Months Ended June 30,
		2024				2023				2024				2023
REVENUE:
Material sales		$	95,442			$	77,107			$	188,726			$	147,297
Royalty and license fees			59,551				64,399				127,819				119,609
Contract research services			3,512				5,059				7,219				10,126
Total revenue			158,505				146,565				323,764				277,032
COST OF SALES			38,328				32,139				75,297				65,109
Gross margin			120,177				114,426				248,467				211,923
OPERATING EXPENSES:
Research and development			36,826				32,318				74,811				63,741
Selling, general and administrative			19,841				17,077				39,093				32,473
Amortization of acquired technology and other intangible assets			4,549				3,994				9,097				6,885
Patent costs			2,401				2,229				4,383				4,484
Royalty and license expense			123				169				1,774				333
Total operating expenses			63,740				55,787				129,158				107,916
OPERATING INCOME			56,437				58,639				119,309				104,007
Interest income, net			9,913				6,198				19,481				13,165
Other loss, net			(1,460	)			(784	)			(3,403	)			(1,487	)
Interest and other loss, net			8,453				5,414				16,078				11,678
INCOME BEFORE INCOME TAXES			64,890				64,053				135,387				115,685
INCOME TAX EXPENSE			(12,553	)			(14,375	)			(26,197	)			(26,168	)
NET INCOME		$	52,337			$	49,678			$	109,190			$	89,517
NET INCOME PER COMMON SHARE:
BASIC		$	1.10			$	1.04			$	2.29			$	1.87
DILUTED		$	1.10			$	1.04			$	2.29			$	1.87
WEIGHTED AVERAGE SHARES USED IN COMPUTING NET    INCOME PER COMMON SHARE:
BASIC			47,549,843				47,572,971				47,553,969				47,548,404
DILUTED			47,628,113				47,618,115				47,628,470				47,593,657
CASH DIVIDENDS DECLARED PER COMMON SHARE		$	0.40			$	0.35			$	0.80			$	0.70

 

 

 

 

 

 

 

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UNIVERSAL DISPLAY CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

(in thousands)

		Six Months Ended June 30,
		2024				2023
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income		$	109,190			$	89,517
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation			13,092				13,207
Amortization of intangibles			9,097				6,885
Amortization of premium and discount on investments, net			(4,276	)			(6,845	)
Stock-based compensation			18,523				11,320
Deferred income tax benefit			(7,402	)			(12,782	)
Retirement plan expense, net of benefit payments			962				1,397
Decrease (increase) in assets:
Accounts receivable			15,464				(16,726	)
Inventory			3,952				7,365
Other current assets			(45,364	)			12,038
Other assets			6,444				7,665
Increase (decrease) in liabilities:
Accounts payable and accrued expenses			12,367				(17,651	)
Other current liabilities			(2,141	)			(20,811	)
Deferred revenue			10,797				(15,736	)
Other liabilities			(1,536	)			(1,445	)
Net cash provided by operating activities			139,169				57,398
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment			(16,334	)			(27,274	)
Purchases of intangibles			—				(66,063	)
Purchases of investments			(174,757	)			(115,048	)
Proceeds from sale and maturity of investments			97,620				190,907
Net cash used in investing activities			(93,471	)			(17,478	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of common stock			1,187				971
Payment of withholding taxes related to stock-based compensation to employees			(7,329	)			(7,429	)
Cash dividends paid			(38,685	)			(33,422	)
Net cash used in financing activities			(44,827	)			(39,880	)
INCREASE IN CASH AND CASH EQUIVALENTS			871				40
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD			91,985				93,430
CASH AND CASH EQUIVALENTS, END OF PERIOD		$	92,856			$	93,470
SUPPLEMENTAL DISCLOSURES:
Unrealized (loss) gain on available-for-sale securities		$	(2,976	)		$	1,848
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			(7,082	)			(54	)
Cash paid for income taxes, net of refunds			47,263				59,849

 

 

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Document And Entity Information	Aug. 01, 2024
Cover [Abstract]
Document Type	8-K
Amendment Flag	false
Document Period End Date	Aug. 01, 2024
Entity Registrant Name	UNIVERSAL DISPLAY CORPORATION
Entity Central Index Key	0001005284
Entity Emerging Growth Company	false
Title of 12(b) Security	Common Stock, $0.01 par value
Trading Symbol	OLED
Security Exchange Name	NASDAQ
Entity File Number	1-12031
Entity Incorporation, State or Country Code	PA
Entity Tax Identification Number	23-2372688
Entity Address, Address Line One	250 Phillips Boulevard
Entity Address, City or Town	Ewing
Entity Address, State or Province	NJ
Entity Address, Postal Zip Code	08618
City Area Code	609
Local Phone Number	671-0980
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false

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