Universal Display Corporation Announces Fourth Quarter and Full Year 2017 Financial Results

Universal Display Corporation reported financial results for the fourth quarter and year ended December 31, 2017.

(Image: Universal Display Corporation)

“We are pleased to report stellar fourth quarter and full-year results,” said Sidney D. Rosenblatt, Executive Vice President and Chief Financial Officer of Universal Display. “From record-high revenues, to a multitude of new agreements and new OLED consumer electronic products, to approximately doubling our production capabilities at PPG Industries, 2017 was filled with tremendous growth. The dynamic OLED market is growing, and as a key innovation partner to the world’s leading OLED display and lighting manufacturers, we believe that we are well-positioned to participate in the vast opportunities ahead.”

Rosenblatt continued, “We are excited and confident of our upward trajectory in this multi-year OLED capex growth cycle. After an extraordinary year-and-a-half of new capacity installs, we expect industry capacity growth to take a bit of a breather this year as panel makers build the framework for the next wave of high volume OLED production, which is expected to ramp next year. 2019 is poised to be a meaningful year of growth. Based on current production timelines, we estimate the installed capacity base, as measured in square meters, will increase by approximately 50% over the next two years.”

Financial Highlights for the Fourth Quarter of 2017

  • Total revenue increased 55% to $115.9 million in the fourth quarter, compared with $74.6 million in the fourth quarter of 2016, driven by higher material sales as well as royalty and license fees.
  • Revenue from material sales increased 105% to $59.8 million in the fourth quarter, compared with $29.2 million in the fourth quarter of 2016.
  • Revenue from royalty and license fees increased 23% to $53.8 million in the fourth quarter, compared with $43.6 million in the fourth quarter of 2016.
  • Operating income increased by $23.1 million to $57.9 million in the fourth quarter, compared with $34.8 million in the fourth quarter of 2016.
  • Net income increased by $7.0 million to $32.8 million or $0.69 per diluted share in the fourth quarter, compared with $25.8 million or $0.55 per diluted share in the fourth quarter of 2016.
  • Excluding the effects of the Tax Cuts and Jobs Act income tax expense of $11.5 million, net income was $44.3 million or $0.93 per diluted share for the fourth quarter of 2017.

Financial Highlights for the Full Year of 2017

  • Total revenue increased 69% to $335.6 million in the full year, compared with $198.9 million in the full year of 2016, driven by higher material sales as well as royalty and license fees.
  • Revenue from material sales increased 102% to $200.3 million in the full year, compared with $99.3 million in the full year of 2016.
  • Revenue from royalty and license fees increased 32% to $126.5 million in the full year, compared with $96.1 million in the full year of 2016.
  • Operating income increased by $77.8 million to $146.2 million in the full year, compared with $68.4 million in the full year of 2016.
  • Net income increased by $55.8 million to $103.9 million or $2.18 per diluted share in the full year, compared with $48.1 million or $1.02 per diluted share in the full year of 2016.
  • Excluding the effects of the Tax Cuts and Jobs Act income tax expense of $11.5 million, net income was $115.4 million or $2.43 per diluted share for the full year of 2017.

2018 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 revenues will be in the range of $350 million to $380 million for fiscal 2018.

Dividend

The Company also announced a first quarter cash dividend of $0.06 per share on the Company’s common stock. The dividend is payable on March 30, 2018, to all shareholders of record as of the close of business on March 15, 2018.

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