Universal Display Corporation Announces First Quarter 2022 Financial Results

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Universal Display Corporation (Nasdaq: OLED) reported first quarter 2022 financial results, achieving total revenue of $150.5 million, up from $134.0 million in Q1 2021. Material sales rose to $86.7 million, while royalty and license fees increased to $59.8 million. Operating income was $62.3 million, slightly down from $63.6 million year-over-year. Net income reached $50.0 million, translating to $1.05 per diluted share. The company anticipates 2022 revenue of $625 million to $650 million and declared a cash dividend of $0.30 per share.

Positive

• Total revenue increased by 12.3% year-over-year to $150.5 million.
• Material sales rose by 8.3% to $86.7 million compared to Q1 2021.
• Royalty and license fees grew by 17.5% to $59.8 million.
• The company reaffirmed its 2022 revenue guidance of $625 million to $650 million.
• Announced a cash dividend of $0.30 per share.

Negative

• Operating income decreased slightly from $63.6 million in Q1 2021 to $62.3 million.
• Net income fell from $51.7 million in Q1 2021 to $50.0 million.

EWING, N.J.--(BUSINESS WIRE)-- Universal Display Corporation (Nasdaq: OLED), enabling energy-efficient displays and lighting with its UniversalPHOLED^® technology and materials, today reported financial results for the first quarter ended March 31, 2022.

“We are pleased to report solid first quarter 2022 results,” said Sidney D. Rosenblatt, Executive Vice President and Chief Financial Officer of Universal Display Corporation. “As we look out, we believe that consumer electronic OEMs, panel makers and the ecosystem are setting the stage for a significant new wave of OLED capital investments and OLED market proliferation. Amid this growing OLED market momentum, we continue to make excellent progress in our ongoing development work for a commercial phosphorescent blue emissive system. We reaffirm our belief that we are on track to meet preliminary target specs with our phosphorescent blue by year-end, which should enable the introduction of our all-phosphorescent RGB stack into the commercial market in 2024.”

Rosenblatt continued, “We believe that the trajectories of the OLED market and of the Company continue to be very bright. With more than two-and-a-half decades of experience and know-how, we are broadening our core competencies, bolstering our worldwide footprint and expanding our global team to fuel our strategic initiatives and increase our first-mover competitive edge. As a key OLED innovations partner, we believe we are well-positioned to continue to participate in a myriad of exciting opportunities that lie ahead in the near-term, mid-term and long-term.”

Financial Highlights for the First Quarter of 2022

• Total revenue in the first quarter of 2022 was $150.5 million as compared to $134.0 million in the first quarter of 2021.
• Revenue from material sales was $86.7 million in the first quarter of 2022 as compared to $79.8 million in the first quarter of 2021.
• Revenue from royalty and license fees was $59.8 million in the first quarter of 2022 as compared to $50.9 million in the first quarter of 2021.
• Cost of materials was $29.9 million in the first quarter of 2022 as compared to $21.0 million in the first quarter of 2021.
• Operating income was $62.3 million in the first quarter of 2022 as compared to $63.6 million in the first quarter of 2021.
• Net income was $50.0 million or $1.05 per diluted share in the first quarter of 2022 as compared to $51.7 million or $1.08 per diluted share in the first quarter of 2021.

Revenue Comparison

($ in thousands)	Three Months Ended March 31,
	2022				2021
Material sales	$	86,691			$	79,808
Royalty and license fees		59,802				50,886
Contract research services		3,977				3,306
Total revenue	$	150,470			$	134,000

Cost of Materials Comparison

($ in thousands)	Three Months Ended March 31,
	2022				2021
Material sales	$	86,691			$	79,808
Cost of material sales		29,920				20,999
Gross margin on material sales		56,771				58,809
Gross margin as a % of material sales		65%				74%

2022 Guidance
The Company continues to believe that its 2022 revenue will be approximately in the range of $625 million to $650 million. The OLED industry remains at a stage where many variables can have a material impact on its growth, and the Company thus caveats its financial guidance accordingly.

Dividend
The Company also announced a second quarter cash dividend of $0.30 per share on the Company’s common stock. The dividend is payable on June 30, 2022 to all shareholders of record on June 16, 2022.

Conference Call Information
In conjunction with this release, Universal Display will host a conference call on May 5, 2022 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.

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 5,500 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.

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 and future declaration of dividends, 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, 2021. 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)
		March 31, 2022				December 31, 2021
ASSETS
CURRENT ASSETS:
Cash and cash equivalents		$	357,424			$	311,993
Short-term investments			325,055				351,194
Accounts receivable			104,947				107,639
Inventory			143,240				134,160
Other current assets			29,120				20,948
Total current assets			959,786				925,934
PROPERTY AND EQUIPMENT, net of accumulated depreciation of $97,979 and $92,461			131,879				128,832
ACQUIRED TECHNOLOGY, net of accumulated amortization of $178,782 and $173,635			44,521				49,668
OTHER INTANGIBLE ASSETS, net of accumulated amortization of $7,918 and $7,565			9,370				9,711
GOODWILL			15,535				15,535
INVESTMENTS			164,130				168,076
DEFERRED INCOME TAXES			35,788				33,453
OTHER ASSETS			126,222				135,710
TOTAL ASSETS		$	1,487,231			$	1,466,919
LIABILITIES AND SHAREHOLDERS’ EQUITY
CURRENT LIABILITIES:
Accounts payable		$	27,064			$	14,955
Accrued expenses			26,960				45,474
Deferred revenue			111,778				120,864
Other current liabilities			12,452				6,645
Total current liabilities			178,254				187,938
DEFERRED REVENUE			31,735				36,217
RETIREMENT PLAN BENEFIT LIABILITY			67,481				66,773
OTHER LIABILITIES			78,461				76,077
Total liabilities			355,931				367,005
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, 49,099,830 and 49,065,924 shares issued, and 47,734,182 and 47,700,276 shares outstanding, at March 31, 2022 and December 31, 2021, respectively			491				491
Additional paid-in capital			658,050				658,728
Retained earnings			535,936				500,212
Accumulated other comprehensive loss			(21,895	)			(18,235	)
Treasury stock, at cost (1,365,648 shares at March 31, 2022 and December 31, 2021)			(41,284	)			(41,284	)
Total shareholders’ equity			1,131,300				1,099,914
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY		$	1,487,231			$	1,466,919

 

UNIVERSAL DISPLAY CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) (in thousands, except share and per share data)
		Three Months Ended March 31,
		2022				2021
REVENUE:
Material sales		$	86,691			$	79,808
Royalty and license fees			59,802				50,886
Contract research services			3,977				3,306
Total revenue			150,470				134,000
COST OF SALES			33,163				23,298
Gross margin			117,307				110,702
OPERATING EXPENSES:
Research and development			26,545				23,305
Selling, general and administrative			21,062				16,404
Amortization of acquired technology and other intangible assets			5,498				5,488
Patent costs			1,798				1,835
Royalty and license expense			154				112
Total operating expenses			55,057				47,144
OPERATING INCOME			62,250				63,558
Interest income, net			291				133
Other (loss) income, net			(34	)			59
Interest and other income, net			257				192
INCOME BEFORE INCOME TAXES			62,507				63,750
INCOME TAX EXPENSE			(12,537	)			(12,063	)
NET INCOME		$	49,970			$	51,687
NET INCOME PER COMMON SHARE:
BASIC		$	1.05			$	1.09
DILUTED		$	1.05			$	1.08
WEIGHTED AVERAGE SHARES USED IN COMPUTING NET INCOME PER COMMON SHARE:
BASIC			47,369,764				47,267,921
DILUTED			47,440,281				47,329,704
CASH DIVIDENDS DECLARED PER COMMON SHARE		$	0.30			$	0.20

 

UNIVERSAL DISPLAY CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (in thousands)
		Three Months Ended March 31,
		2022				2021
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income		$	49,970			$	51,687
Adjustments to reconcile net income to net cash provided by operating activities:
Amortization of deferred revenue and recognition of unbilled receivables, net			(64,106	)			(57,648	)
Depreciation			5,627				4,263
Amortization of intangibles			5,498				5,488
Change in excess inventory reserve			84				667
Amortization of premium and discount on investments, net			(271	)			(70	)
Stock-based compensation to employees			6,085				5,200
Stock-based compensation to Board of Directors and Scientific Advisory Board			430				330
Deferred income tax (benefit) expense			(1,380	)			515
Retirement plan expense			1,359				2,228
Decrease (increase) in assets:
Accounts receivable			2,692				(9,066	)
Inventory			(9,164	)			(10,498	)
Other current assets			(3,525	)			5,400
Other assets			9,488				(7,133	)
Increase (decrease) in liabilities:
Accounts payable and accrued expenses			(4,261	)			(21,136	)
Other current liabilities			5,807				(666	)
Deferred revenue			45,891				53,000
Other liabilities			2,384				6,935
Net cash provided by operating activities			52,608				29,496
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment			(10,751	)			(9,938	)
Purchases of intangibles			(12	)			(298	)
Purchases of investments			(24,915	)			(4,220	)
Proceeds from sale and maturity of investments			50,240				100,000
Net cash provided by investing activities			14,562				85,544
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of common stock			403				348
Payment of withholding taxes related to stock-based compensation to employees			(7,896	)			(9,634	)
Cash dividends paid			(14,246	)			(9,487	)
Net cash used in financing activities			(21,739	)			(18,773	)
INCREASE IN CASH AND CASH EQUIVALENTS			45,431				96,267
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD			311,993				630,012
CASH AND CASH EQUIVALENTS, END OF PERIOD		$	357,424			$	726,279
The following non-cash activities occurred:
Unrealized loss on available-for-sale securities		$	(5,031	)		$	(66	)
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			2,077				(27	)

 

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Universal Display:

Darice Liu

investor@oled.com

media@oled.com

+1 609-964-5123

Source: Universal Display Corporation

FAQ

What were Universal Display's total revenues in Q1 2022?

Total revenues were $150.5 million in Q1 2022.

How did the net income in Q1 2022 compare to Q1 2021 for OLED?

Net income decreased from $51.7 million in Q1 2021 to $50.0 million in Q1 2022.

What is the cash dividend announced by Universal Display for Q2 2022?

The company announced a cash dividend of $0.30 per share for Q2 2022.

What is Universal Display's revenue guidance for 2022?

The company expects 2022 revenue in the range of $625 million to $650 million.

What were the material sales figures for OLED in Q1 2022?

Material sales amounted to $86.7 million in Q1 2022.