Haier

UDCAnnounces Fourth Quarter And Full Year 2018 Financial Results

Universal Display Corporation, enabling energy-efficient displays and lighting with its UniversalPHOLED technology and materials, today reported financial results for the fourth quarter and full year ended December 31, 2018.

“New OLED capacity announcements, a diversifying list of panel manufacturers entering commercial OLED production, and a broadening landscape of consumer OLED end products in 2018 has positioned the OLED industry for what we anticipate will be its next wave of growth,” said Sidney D. Rosenblatt, Executive Vice President and Chief Financial Officer of Universal Display. “Additionally, with new customer agreements, advancement in our R&D programs, new infrastructure plans, and an increase in our critical mass, we made significant progress last year with the Company’s growth roadmap. We expect these efforts to further solidify our leadership position in the OLED ecosystem and buttress our long-term strategy to continue enabling this growing industry.”

Rosenblatt continued, “For 2019, we forecast meaningful growth to resume for us as new OLED capacity comes online, new OLED products are launched, and progress continues with our customers’ OLED commercialization plans. With the ongoing proliferation of OLED applications, we believe that the market is excited for stunningly colorful, thin, and cutting-edge products, including groundbreaking plastic-based form factors that are expected to forge new and extraordinary commercial product roadmaps in the display and lighting industries.”

Financial Highlights for the Fourth Quarter of 2018

Effective January 1, 2018, we adopted ASC Topic 606 using the “modified retrospective” approach, meaning the standard was applied only to the financial results commencing with the first quarter of 2018 with a cumulative adjustment to retained earnings. Under this transition method, we applied the standard only to contracts that were not complete at the initial adoption date.

  • Total revenue in the fourth quarter of 2018 was $70.1 million. On an ASC Topic 605 basis, total revenue in the fourth quarter of 2018 would have been $92.9 million, compared to $115.9 million in the fourth quarter of 2017. Under ASC Topic 606, license fee revenue is recognized on a per gram sales basis, whereas under ASC Topic 605, revenue was recognized for license payments upon receipt or on a straight-line basis over the term of the contract.
  • Revenue from material sales was $39.9 million in the fourth quarter of 2018. On an ASC Topic 605 basis, revenue from material sales in the fourth quarter of 2018 would have been $49.9 million, compared to $59.8 million in the fourth quarter of 2017. The Company believes that the decline was due to material inventory pre-purchases that occurred in the fourth quarter of 2017 as well as the impact of ASC Topic 606.
  • Revenue from royalty and license fees was $25.9 million in the fourth quarter of 2018. On an ASC Topic 605 basis, revenue from royalty and license fees in the fourth quarter of 2018 would have been $38.6 million in the fourth quarter of 2018, compared to $53.8 million in the fourth quarter of 2017.
  • Cost of materials was $14.8 million in the fourth quarter of 2018, compared to $15.5 million in the fourth quarter of 2017.
  • Operating income was $15.3 million in the fourth quarter of 2018. On an ASC Topic 605 basis, operating income in the fourth quarter of 2018 would have been $38.0 million, compared to $57.9 million in the fourth quarter of 2017.
  • Net income was $19.2 million or $0.40 per diluted share in the fourth quarter of 2018. On an ASC Topic 605 basis, net income in the fourth quarter of 2018 would have been $45.2 million or $0.95 per diluted share, compared to $32.8 million or $0.69 per diluted share in the fourth quarter of 2017.
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Financial Highlights for the Full Year of 2018

  • Total revenue was $247.4 million for the full year of 2018. On an ASC Topic 605 basis, total revenue for the full year of 2018 would have been $326.3 million, compared to $335.6 million for the full year of 2017.
  • Revenue from material sales was $153.2 million for the full year of 2018. On an ASC Topic 605 basis, revenue from material sales for the full year of 2018 would have been $166.2 million, compared to $200.3 million for the full year of 2017. The Company believes that these results were due to several factors: the soft premium smartphone market in 2018 that resulted in weaker-than-expected material sales demand for OLED panels, material inventory pre-purchases that occurred in the fourth quarter of 2017, and the impact of ASC Topic 606.
  • Revenue from royalty and license fees was $80.6 million for the full year of 2018. On an ASC Topic 605 basis, revenue from royalty and license fees would have been $146.5 million for the 2018 period, compared to $126.5 million for the 2017 period.
  • Cost of materials was $43.6 million for the full year, compared to $49.2 million for the full year of 2017.
  • Operating income was $56.7 million for the full year of 2018. On an ASC Topic 605 basis, operating income would have been $135.6 million for the 2018 period, compared to $146.2 million for the 2017 period.
  • Net income was $58.8 million or $1.24 per diluted share for the full year of 2018. On an ASC 605 basis, net income for the full year of 2018 would have been $130.5 million or $2.77 per diluted share, compared to $103.9 million or $2.18 per diluted share for the full year of 2017.
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2019 Guidance

Although the OLED industry is still at an early state where many variables can have a material impact on its growth, and the Company thus caveats its financial guidance accordingly, the Company believes that its 2019 revenue will be approximately in the range of $325 million to $350 million. The guidance was prepared utilizing accounting standard ASC Topic 606; under the prior accounting standard ASC Topic 605, the Company estimates that its 2019 revenues would be approximately $395 million to $420 million.

Dividend

The Company also announced a first quarter cash dividend of $0.10 per share on the Company’s common stock. The dividend is payable on March 29, 2019 to all shareholders of record on March 15, 2019.―Business Wire

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