eMagin Corporation Announces First Quarter 2021 Results
eMagin Corporation (NYSE:EMAN) reported first-quarter 2021 revenues of $6.8 million, slightly up from $6.7 million in the previous year. Product revenues improved to $6.1 million, driven by increased sales to medical and veterinary clients. However, contract revenues dropped to $0.7 million from $1.1 million. The company posted a net loss of $7.4 million, or $0.10 per share, impacted by a $7.2 million non-cash loss related to fair value adjustments. Gross margin improved to 25%, while operating expenses rose to $3.7 million.
- First-quarter revenues were $6.8 million, up from $6.7 million YoY.
- Product revenue increased by $0.5 million to $6.1 million, driven by medical and veterinary sales.
- Gross margin improved to 25%, reflecting higher product revenues and better yields.
- Adjusted EBITDA rose to $0.8 million compared to a negative $0.8 million in the prior year.
- Contract revenues fell to $0.7 million from $1.1 million YoY.
- Operating expenses increased to $3.7 million, leading to a higher operating loss of $2.0 million.
- Net loss of $7.4 million includes a significant non-cash loss of $7.2 million due to warrant liability.
- First Quarter Revenue of
$6.8 Million on Diversified Product Sales - Continuing to Supply ENVG-B Night Vision, Medical and International Programs
HOPEWELL JUNCTION, NY / ACCESSWIRE / May 13, 2021 / eMagin Corporation, or the "Company", (NYSE American:EMAN), a leader in the development, design and manufacture of Active Matrix OLED microdisplays for high-resolution, AR/VR and other near-eye imaging products, today announced results for its quarter ended March 31, 2021.
"Our first quarter of 2021 was marked by continued strength in our product sales, which offset decreases in certain government contract work," said eMagin CEO Andrew G. Sculley. "We saw recovery in sales across a number of markets that were impacted by the pandemic, as well as an overall increase in international sales.
"We continued to supply sole-sourced displays under the Enhanced Night Vision Goggle-Binocular (ENVG-B) program, as well as other key military programs worldwide. eMagin is a proud supplier of the microdisplays that provide critical information to our soldiers in the battlefield, and we are the only manufacturer of OLED microdisplays in the United States. In combat and in training, soldiers value the super-fast response times of our displays, their high brightness and contrast, power efficiency, and their thin and light form factor.
"Bookings in the first quarter saw significant diversity across market segments and geography. We experienced a strong uptick in order activity from our medical and veterinary customers, as well as thermal sights for hunting and military applications. We expect these areas will continue to grow as the pandemic subsides. Internationally, we saw strong orders across multiple product segments. In addition to the growth in existing programs, we saw new program activity in several military helmet-mounted display (HMD) programs, industrial security applications, and new hunting scopes. In all, as of March 31, our sales backlog was
"Our ongoing work with NordicNeuroLab is representative of our capabilities across a broad range of industries. As we recently announced, we have a strong relationship with this maker of functional MRI brain imaging applications. They have integrated their binocular head-mounted display with our WUXGA display, which is designed for near-to-eye applications, to project high-resolution 2D and 3D images to patients undergoing fMRI scanning. Our proprietary, color OLED technology delivers high brightness, extended life and sharp contrast under all conditions and is ideal for mission-critical medical applications like these that require stringent specifications and exacting reliability.
"We continue to advance our Direct Patterning Display (dPd™) technology and remain on target for a peak luminance of 10,000 cd/m2 for the high-resolution prototypes we are fabricating for a tier-one consumer company this year. We are also advancing our higher brightness XLE technology, which will give customers a sizeable boost in luminance and/or lifetime over their current eMagin displays. We remain confident that further improvements in this technology will be manufacturable in volume in the near term.
"As a result of the long-term lease we signed last quarter, we have increased our manufacturing footprint by more than
First-Quarter Results
Total revenues for the first quarter of 2021 were
Total revenues consist of both product revenue and contract revenue. Product revenues for the first quarter of 2021 were
Total gross margin for the first quarter was
Operating expenses for the first quarter of 2021, including R&D expenses, were
Operating loss for the first quarter of 2021 was
Net loss for the current period also includes a
Therefore, net loss for the first quarter of 2021 was
Adjusted EBITDA increased in the first quarter of 2021 to
Balance Sheet Highlights
As of March 31, 2021, the Company had cash and cash equivalents of
In January 2021, the Company took delivery of an advanced wafer inspection tool valued at
Measurement of Inventory
In recognition of a shift in product demand toward larger, more complex displays yielding fewer die per wafer, the Company has concluded that measuring output by the number of displays produced per quarter is no longer an accurate measure of productive capacity. The Company determined that measuring output based on the number of wafers produced per quarter is a more appropriate measure of production volume. As the number of wafers produced per quarter has remained consistent for the past two years, the Company concluded it was no longer in a period of abnormal production that would require limiting the amount of overheads allocated to inventory. The Company also believes that fully allocating the overhead to work in process and finished goods inventories results in more accurate inventory valuation and computation of costs of goods sold, in addition to providing better information to management in making pricing decisions.
Under this change in estimate for allocating overhead, which was adopted in the first quarter of 2021, overhead is now fully allocated to products, resulting in an increase in standard costs and inventory values. In the first quarter of 2021, the impact of this change was an increase of approximately
Conference Call and Webcast Information
Management will host a conference call and simultaneous webcast at 9 a.m. ET on May 13 to discuss eMagin's quarterly results, business highlights and outlook. To join the live listen-only webcast, please visit the Company's website at www.emagin.com or use the following link: https://www.webcaster4.com/Webcast/Page/2471/41214. To join the conference call, dial 1-877-545-0320 in the United States, or 1-973-528-0016 internationally. The entry code is 717445. Participants are encouraged to join at least 15 minutes before the start of the call. An archive of the webcast will be available approximately one hour after the live call.
About eMagin Corporation
eMagin is the leader in OLED microdisplay technology for the next generation of computing and imaging devices, serving world-class customers in the military, consumer, medical and industrial markets. The Company invents, engineers and manufactures display technologies of the future and is the only manufacturer of OLED displays in the United States. eMagin's Direct Patterning Technology (dPd™) will transform the way the world consumes information. Since 2001, eMagin's microdisplays have been used in AR/VR, aircraft helmets, heads-up display systems, thermal scopes, night vision goggles, future weapon systems and a variety of other applications. For more information, please visit www.emagin.com
Important Cautionary Information Regarding 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 risk factors that could cause the Company's actual results to differ from current expectations, including impacts of the COVID-19 pandemic, please see the section entitled "Risk Factors" in eMagin's Annual Report on Form 10-K for the fiscal year ended December 31, 2020, and in any Form 10-Q filed or to be filed by eMagin, and in other documents the Company files with the SEC from time to time.
Contact
eMagin Corporation
Mark A. Koch
Acting Chief Financial Officer
845-838-7951
investorrelations@emagin.com
Sharon Merrill Associates, Inc.
Nicholas Manganaro
617-542-5300
eman@investorrelations.com
eMAGIN CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share data)
(Unaudited)
| March 31, | December 31, | |||||||
| 2021 | 2020 | |||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 10,705 | $ | 8,315 | ||||
Restricted cash | 1,671 | 2,111 | ||||||
Accounts receivable, net | 4,423 | 5,314 | ||||||
Account receivable-due from government awards | 97 | 1,013 | ||||||
Unbilled accounts receivable | 374 | 253 | ||||||
Inventories | 8,413 | 8,379 | ||||||
Prepaid expenses and other current assets | 1,095 | 943 | ||||||
Total current assets | 26,778 | 26,328 | ||||||
Property, plant and equipment, net | 22,118 | 21,132 | ||||||
Operating lease right - of - use assets | 35 | 50 | ||||||
Intangibles and other assets | 124 | 126 | ||||||
Total assets | $ | 49,055 | $ | 47,636 | ||||
LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 1,266 | $ | 1,206 | ||||
Accrued compensation | 1,929 | 1,628 | ||||||
Paycheck Protection Program loan - current | - | 982 | ||||||
Revolving credit facility, net | 198 | 1,875 | ||||||
Common stock warrant liability | 11,830 | 4,622 | ||||||
Other accrued expenses | 1,474 | 1,693 | ||||||
Deferred revenue | 124 | 425 | ||||||
Operating lease liability - current | 36 | 51 | ||||||
Finance lease liability - current | 1,028 | 1,027 | ||||||
Other current liabilities | 621 | 757 | ||||||
Total current liabilities | 18,506 | 14,266 | ||||||
Other liability - long term | 42 | 56 | ||||||
Paycheck Protection Program loan - long term | - | 982 | ||||||
Deferred Income - government awards - long term | 4,473 | 4,309 | ||||||
Finance lease liability - long term | 11,733 | 11,783 | ||||||
Total liabilities | 34,754 | 31,396 | ||||||
Shareholders' equity: | ||||||||
Preferred stock, $.001 par value: authorized 10,000,000 shares: | ||||||||
Series B Convertible Preferred stock, (liquidation preference of | - | - | ||||||
Common stock, $.001 par value: authorized 200,000,000 shares, issued 72,137,858 shares, outstanding 71,975,792 shares as of March 31, 2021 and issued 68,890,819 shares, outstanding 68,728,753 shares as of December 31, 2020. | 72 | 69 | ||||||
Additional paid-in capital | 274,165 | 268,729 | ||||||
Accumulated deficit | (259,436 | ) | (252,058 | ) | ||||
Treasury stock, 162,066 shares as of March 31, 2021 and December 31, 2020. | (500 | ) | (500 | ) | ||||
Total shareholders' equity | 14,301 | 16,240 | ||||||
Total liabilities and shareholders' equity | $ | 49,055 | $ | 47,636 | ||||
eMAGIN CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(Unaudited)
| Three Months Ended | ||||||||
| March 31, | ||||||||
| 2021 | 2020 | |||||||
Revenues: | ||||||||
Product | $ | 6,105 | $ | 5,634 | ||||
Contract | 668 | 1,097 | ||||||
Total revenues, net | 6,773 | 6,731 | ||||||
Cost of revenues: | ||||||||
Product | 4,707 | 4,790 | ||||||
Contract | 358 | 507 | ||||||
Total cost of revenues | 5,065 | 5,297 | ||||||
Gross profit | 1,708 | 1,434 | ||||||
Operating expenses: | ||||||||
Research and development | 1,842 | 980 | ||||||
Selling, general and administrative | 1,824 | 1,798 | ||||||
Total operating expenses | 3,666 | 2,778 | ||||||
Loss from operations | (1,958 | ) | (1,344 | ) | ||||
Other (expense) income: | ||||||||
Change in fair value of common stock warrant liability | (7,208 | ) | (20 | ) | ||||
Interest expense, net | (210 | ) | (17 | ) | ||||
Gain on forgiveness of debt | 1,963 | - | ||||||
Other income, net | 35 | 12 | ||||||
Total other (expense) | (5,420 | ) | (25 | ) | ||||
Loss before provision for income taxes | (7,378 | ) | (1,369 | ) | ||||
Income taxes | - | - | ||||||
Net income (loss) allocated to common shares | $ | (7,378 | ) | $ | (1,369 | ) | ||
Loss per share, diluted | $ | (0.10 | ) | $ | (0.03 | ) | ||
Weighted average number of shares outstanding: | ||||||||
Basic and Diluted | 70,272 | 51,639 | ||||||
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 (in thousands).
| Three Months Ended | ||||||||
| March 31, | ||||||||
| 2021 | 2020 | |||||||
Net loss | $ | (7,378 | ) | $ | (1,369 | ) | ||
Non-cash compensation | 13 | 43 | ||||||
Change in fair value of common stock warrant liability | 7,208 | 20 | ||||||
Depreciation and intangibles amortization expense | 733 | 480 | ||||||
Interest expense | 210 | 17 | ||||||
Adjusted EBITDA | $ | 786 | $ | (809 | ) | |||
SOURCE: eMagin Corporation
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