Universal Display Corporation Announces Fourth Quarter and Full Year 2023 Financial Results
“In 2023, we achieved key milestones, strengthened our capabilities and infrastructure, and positioned the Company for growth in the years ahead,” said
Financial Highlights for the Fourth Quarter of 2023
-
Total revenue in the fourth quarter of 2023 was
$158.3 million as compared to$169.0 million in the fourth quarter of 2022. -
Revenue from material sales was
$82.2 million in the fourth quarter of 2023 as compared to$88.3 million in the fourth quarter of 2022. The decrease in material sales was primarily the result of a decrease in the cumulative catch-up adjustments between periods, partially offset by higher sales volume of our emitter material. -
Revenue from royalty and license fees was
$72.9 million in the fourth quarter of 2023 as compared to$75.6 million in the fourth quarter of 2022. The decrease in royalty and license fees was primarily the result of changes in customer mix. -
Cost of material sales was
$33.4 million in the fourth quarter of 2023 as compared to$26.6 million in the fourth quarter of 2022. This was primarily due to an increase in the volume of material sales and increased contract manufacturing support costs. - Total gross margin was 77% in the fourth quarter of 2023 as compared to 82% in the fourth quarter of 2022.
-
Operating income was
$64.7 million in the fourth quarter of 2023 as compared to$83.1 million in the fourth quarter of 2022. - The effective income tax rate was 18.0% and 19.2% for the fourth quarters of 2023 and 2022, respectively.
-
Net income was
$62.0 million or$1.29 per diluted share in the fourth quarter of 2023 as compared to$65.1 million or$1.36 per diluted share in the fourth quarter of 2022.
Revenue Comparison
($ in thousands) |
|
Three Months Ended |
|
|||||
|
|
2023 |
|
|
2022 |
|
||
Material sales |
|
$ |
82,240 |
|
|
$ |
88,339 |
|
Royalty and license fees |
|
|
72,865 |
|
|
|
75,585 |
|
Contract research services |
|
|
3,215 |
|
|
|
5,108 |
|
Total revenue |
|
$ |
158,320 |
|
|
$ |
169,032 |
|
Cost of Materials Comparison
($ in thousands) |
|
Three Months Ended |
|
|||||
|
|
2023 |
|
|
2022 |
|
||
Material sales |
|
$ |
82,240 |
|
|
$ |
88,339 |
|
Cost of material sales |
|
|
33,379 |
|
|
|
26,603 |
|
Gross margin on material sales |
|
|
48,861 |
|
|
|
61,736 |
|
Gross margin as a % of material sales |
|
|
59 |
% |
|
|
70 |
% |
Financial Highlights for the Full Year 2023
-
Total revenue in the full year 2023 was
$576.4 million as compared to$616.6 million in the full year 2022. -
Revenue from material sales was
$322.0 million in the full year 2023 as compared to$331.1 million in the full year 2022. The decline in material sales was primarily due to a decrease in the cumulative catch-up adjustments between periods, partially offset by higher blue emitter and host sales. -
Revenue from royalty and license fees was
$238.4 million in the full year 2023 as compared to$267.1 million in the full year 2022. The decrease in royalty and license fees was primarily the result of higher estimated future demand for several of our customers over the remaining lives of their contracts, as well as a net$19.7 million reduction in revenue due to the difference in cumulative catch-up adjustments between periods, the majority of which was recorded to royalty and license fees. -
Cost of material sales was
$123.1 million in the full year 2023 as compared to$115.6 million in the full year 2022. Cost of material sales increased primarily due to costs associated with our manufacturing facility in Shannon,Ireland which commenced manufacturing in mid-2022, increased inventory reserves and changes in product mix. -
Total gross margin was 77% in the full year 2023 as compared to 79% in the full year 2022. Increases in Shannon facility costs of
$5.1 million and inventory reserves of$4.9 million in 2023 contributed to the 2% decrease in total gross margin between periods. -
Operating income was
$217.2 million in the full year 2023 as compared to$267.1 million in the full year 2022. - The effective income tax rate was 17.2% and 21.7% in the full years 2023 and 2022, respectively.
-
Net income was
$203.0 million or$4.24 per diluted share in the full year 2023 compared to$210.1 million or$4.40 per diluted share in the full year 2022.
Revenue Comparison
($ in thousands) |
|
Year Ended |
|
|||||
|
|
2023 |
|
|
2022 |
|
||
Material sales |
|
$ |
322,029 |
|
|
$ |
331,081 |
|
Royalty and license fees |
|
|
238,389 |
|
|
|
267,115 |
|
Contract research services |
|
|
16,011 |
|
|
|
18,423 |
|
Total revenue |
|
$ |
576,429 |
|
|
$ |
616,619 |
|
Cost of Materials Comparison
($ in thousands) |
|
Year Ended |
|
|||||
|
|
2023 |
|
|
2022 |
|
||
Material sales |
|
$ |
322,029 |
|
|
$ |
331,081 |
|
Cost of material sales |
|
|
123,076 |
|
|
|
115,602 |
|
Gross margin on material sales |
|
|
198,953 |
|
|
|
215,479 |
|
Gross margin as a % of material sales |
|
|
62 |
% |
|
|
65 |
% |
2024 Guidance
The Company believes that its 2024 revenue will be in the range of
Dividend
The Company also announced a first quarter cash dividend of
Conference Call Information
In conjunction with this release,
About
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
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(OLED-C)
UNIVERSAL DISPLAY CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (in thousands, except share and per share data) |
||||||||
|
|
|
|
|
|
|
||
ASSETS |
|
|
|
|
|
|
||
CURRENT ASSETS: |
|
|
|
|
|
|
||
Cash and cash equivalents |
|
$ |
91,985 |
|
|
$ |
93,430 |
|
Short-term investments |
|
|
422,137 |
|
|
|
484,345 |
|
Accounts receivable |
|
|
139,850 |
|
|
|
92,664 |
|
Inventory |
|
|
175,795 |
|
|
|
183,220 |
|
Other current assets |
|
|
87,365 |
|
|
|
45,791 |
|
Total current assets |
|
|
917,132 |
|
|
|
899,450 |
|
PROPERTY AND EQUIPMENT, net of accumulated depreciation of |
|
|
175,150 |
|
|
|
143,445 |
|
ACQUIRED TECHNOLOGY, net of accumulated amortization of |
|
|
90,325 |
|
|
|
38,382 |
|
OTHER INTANGIBLE ASSETS, net of accumulated amortization of |
|
|
6,874 |
|
|
|
8,247 |
|
|
|
|
15,535 |
|
|
|
15,535 |
|
INVESTMENTS |
|
|
299,548 |
|
|
|
259,861 |
|
DEFERRED INCOME TAXES |
|
|
59,108 |
|
|
|
58,161 |
|
OTHER ASSETS |
|
|
105,289 |
|
|
|
109,739 |
|
TOTAL ASSETS |
|
$ |
1,668,961 |
|
|
$ |
1,532,820 |
|
LIABILITIES AND SHAREHOLDERS’ EQUITY |
|
|
|
|
|
|
||
CURRENT LIABILITIES: |
|
|
|
|
|
|
||
Accounts payable |
|
$ |
10,933 |
|
|
$ |
9,519 |
|
Accrued expenses |
|
|
52,080 |
|
|
|
51,002 |
|
Deferred revenue |
|
|
47,713 |
|
|
|
45,599 |
|
Other current liabilities |
|
|
8,096 |
|
|
|
29,577 |
|
Total current liabilities |
|
|
118,822 |
|
|
|
135,697 |
|
DEFERRED REVENUE |
|
|
12,006 |
|
|
|
18,279 |
|
RETIREMENT PLAN BENEFIT LIABILITY |
|
|
52,249 |
|
|
|
59,790 |
|
OTHER LIABILITIES |
|
|
38,658 |
|
|
|
43,685 |
|
Total liabilities |
|
|
221,735 |
|
|
|
257,451 |
|
SHAREHOLDERS’ EQUITY: |
|
|
|
|
|
|
||
Preferred Stock, par value |
|
|
2 |
|
|
|
2 |
|
Common Stock, par value |
|
|
487 |
|
|
|
491 |
|
Additional paid-in capital |
|
|
699,554 |
|
|
|
681,335 |
|
Retained earnings |
|
|
789,553 |
|
|
|
653,277 |
|
Accumulated other comprehensive loss |
|
|
(1,086 |
) |
|
|
(18,452 |
) |
|
|
|
(41,284 |
) |
|
|
(41,284 |
) |
Total shareholders’ equity |
|
|
1,447,226 |
|
|
|
1,275,369 |
|
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY |
|
$ |
1,668,961 |
|
|
$ |
1,532,820 |
|
UNIVERSAL DISPLAY CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (in thousands, except share and per share data) |
||||||||||||||||
|
|
Three Months Ended |
|
|
Twelve Months Ended |
|
||||||||||
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
||||
REVENUE: |
|
(Unaudited) |
|
|
|
|
|
|
|
|||||||
Material sales |
|
$ |
82,240 |
|
|
$ |
88,339 |
|
|
$ |
322,029 |
|
|
$ |
331,081 |
|
Royalty and license fees |
|
|
72,865 |
|
|
|
75,585 |
|
|
|
238,389 |
|
|
|
267,115 |
|
Contract research services |
|
|
3,215 |
|
|
|
5,108 |
|
|
|
16,011 |
|
|
|
18,423 |
|
Total revenue |
|
|
158,320 |
|
|
|
169,032 |
|
|
|
576,429 |
|
|
|
616,619 |
|
COST OF SALES |
|
|
36,019 |
|
|
|
30,098 |
|
|
|
135,376 |
|
|
|
127,896 |
|
Gross margin |
|
|
122,301 |
|
|
|
138,934 |
|
|
|
441,053 |
|
|
|
488,723 |
|
OPERATING EXPENSES: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Research and development |
|
|
33,641 |
|
|
|
31,906 |
|
|
|
130,481 |
|
|
|
117,062 |
|
Selling, general and administrative |
|
|
16,830 |
|
|
|
18,513 |
|
|
|
67,387 |
|
|
|
77,886 |
|
Amortization of acquired technology and other intangible assets |
|
|
4,551 |
|
|
|
2,897 |
|
|
|
15,993 |
|
|
|
17,459 |
|
Patent costs |
|
|
2,300 |
|
|
|
2,254 |
|
|
|
9,356 |
|
|
|
8,329 |
|
Royalty and license expense |
|
|
233 |
|
|
|
281 |
|
|
|
647 |
|
|
|
877 |
|
Total operating expenses |
|
|
57,555 |
|
|
|
55,851 |
|
|
|
223,864 |
|
|
|
221,613 |
|
OPERATING INCOME |
|
|
64,746 |
|
|
|
83,083 |
|
|
|
217,189 |
|
|
|
267,110 |
|
Interest income, net |
|
|
7,865 |
|
|
|
3,505 |
|
|
|
28,166 |
|
|
|
7,811 |
|
Other income (loss), net |
|
|
2,996 |
|
|
|
(5,942 |
) |
|
|
(184 |
) |
|
|
(6,691 |
) |
Interest and other income (loss), net |
|
|
10,861 |
|
|
|
(2,437 |
) |
|
|
27,982 |
|
|
|
1,120 |
|
INCOME BEFORE INCOME TAXES |
|
|
75,607 |
|
|
|
80,646 |
|
|
|
245,171 |
|
|
|
268,230 |
|
INCOME TAX EXPENSE |
|
|
(13,629 |
) |
|
|
(15,512 |
) |
|
|
(42,160 |
) |
|
|
(58,169 |
) |
NET INCOME |
|
$ |
61,978 |
|
|
$ |
65,134 |
|
|
$ |
203,011 |
|
|
$ |
210,061 |
|
NET INCOME PER COMMON SHARE: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
BASIC |
|
$ |
1.30 |
|
|
$ |
1.37 |
|
|
$ |
4.25 |
|
|
$ |
4.41 |
|
DILUTED |
|
$ |
1.29 |
|
|
$ |
1.36 |
|
|
$ |
4.24 |
|
|
$ |
4.40 |
|
WEIGHTED AVERAGE SHARES USED IN COMPUTING NET INCOME PER COMMON SHARE: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
BASIC |
|
|
47,571,382 |
|
|
|
47,402,007 |
|
|
|
47,559,669 |
|
|
|
47,390,352 |
|
DILUTED |
|
|
47,657,854 |
|
|
|
47,492,560 |
|
|
|
47,622,763 |
|
|
|
47,468,507 |
|
CASH DIVIDEND DECLARED PER COMMON SHARE |
|
$ |
0.35 |
|
|
$ |
0.30 |
|
|
$ |
1.40 |
|
|
$ |
1.20 |
|
UNIVERSAL DISPLAY CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) |
||||||||
|
|
Year Ended |
|
|||||
|
|
2023 |
|
|
2022 |
|
||
CASH FLOWS FROM OPERATING ACTIVITIES: |
|
|
|
|
|
|
||
Net income |
|
$ |
203,011 |
|
|
|
210,061 |
|
Adjustments to reconcile net income to net cash provided by operating activities: |
|
|
|
|
|
|
||
Depreciation |
|
|
27,409 |
|
|
|
24,815 |
|
Amortization of intangibles |
|
|
15,993 |
|
|
|
17,459 |
|
Amortization of premium and discount on investments, net |
|
|
(11,603 |
) |
|
|
(6,461 |
) |
Impairment of minority investments |
|
|
— |
|
|
|
6,962 |
|
Stock-based compensation to employees |
|
|
22,335 |
|
|
|
28,380 |
|
Stock-based compensation to Board of |
|
|
1,774 |
|
|
|
1,566 |
|
Deferred income tax benefit |
|
|
(3,766 |
) |
|
|
(26,946 |
) |
Retirement plan expense, net of benefit payments |
|
|
3,129 |
|
|
|
5,276 |
|
Decrease (increase) in assets: |
|
|
|
|
|
|
||
Accounts receivable |
|
|
(47,186 |
) |
|
|
14,975 |
|
Inventory |
|
|
7,425 |
|
|
|
(49,060 |
) |
Other current assets |
|
|
(41,574 |
) |
|
|
(24,843 |
) |
Other assets |
|
|
4,450 |
|
|
|
25,971 |
|
Increase (decrease) in liabilities: |
|
|
|
|
|
|
||
Accounts payable and accrued expenses |
|
|
4,047 |
|
|
|
3,338 |
|
Other current liabilities |
|
|
(21,481 |
) |
|
|
20,917 |
|
Deferred revenue |
|
|
(4,159 |
) |
|
|
(93,203 |
) |
Other liabilities |
|
|
(5,027 |
) |
|
|
(32,392 |
) |
Net cash provided by operating activities |
|
|
154,777 |
|
|
|
126,815 |
|
CASH FLOWS FROM INVESTING ACTIVITIES: |
|
|
|
|
|
|
||
Purchases of property and equipment |
|
|
(59,792 |
) |
|
|
(42,497 |
) |
Purchase of intangibles |
|
|
(66,563 |
) |
|
|
(4,709 |
) |
Purchases of investments |
|
|
(531,103 |
) |
|
|
(701,993 |
) |
Proceeds from sale and maturity of investments |
|
|
574,165 |
|
|
|
468,456 |
|
Net cash used in investing activities |
|
|
(83,293 |
) |
|
|
(280,743 |
) |
CASH FLOWS FROM FINANCING ACTIVITIES: |
|
|
|
|
|
|
||
Proceeds from issuance of common stock |
|
|
2,012 |
|
|
|
1,570 |
|
Payment of withholding taxes related to stock-based compensation to employees |
|
|
(8,206 |
) |
|
|
(9,209 |
) |
Cash dividends paid |
|
|
(66,735 |
) |
|
|
(56,996 |
) |
Net cash used in financing activities |
|
|
(72,929 |
) |
|
|
(64,635 |
) |
DECREASE IN CASH AND CASH EQUIVALENTS |
|
|
(1,445 |
) |
|
|
(218,563 |
) |
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR |
|
|
93,430 |
|
|
|
311,993 |
|
CASH AND CASH EQUIVALENTS, END OF YEAR |
|
$ |
91,985 |
|
|
$ |
93,430 |
|
The following non-cash activities occurred: |
|
|
|
|
|
|
||
Unrealized loss on available-for-sale securities |
|
$ |
(8,938 |
) |
|
$ |
(8,100 |
) |
Common stock issued to Board of |
|
|
300 |
|
|
|
300 |
|
Net change in accounts payable and accrued expenses related to purchases of property and equipment |
|
|
678 |
|
|
|
3,069 |
|
Cash paid for income taxes, net of refunds |
|
|
96,176 |
|
|
|
72,347 |
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20240222923341/en/
Universal Display Contact:
investor@oled.com
media@oled.com
+1 609-964-5123
Source: