-- Year-to-Date Contract R&D up 57% Driven by Consumer Applications --
“We have set ambitious goals for 2017, and I am confident that we will
achieve them. We have seen a sequential increase in our display sales
from the first quarter as the new military contracts are coming on line,
as well as a significant uptick from sales of newly developed displays
supported by our R&D programs for commercial customers. Our direct
patterned 2Kx2K display, which is the highest resolution and highest
brightness full color OLED microdisplay in the marketplace today, was
demonstrated during the
“As we have previously stated, we are in active discussions with well-known consumer product companies to develop and design their next-generation microdisplays. Our contract R&D work reflects this as we are up 57% over last year at this time and anticipate that this will result in higher product-related revenues in the future. The consumer AR/VR market will be the driver for high volume business and we are executing successfully on a plan to both secure consumer electronics companies as our channel to this market and partner with a mass production company to ensure our ability to meet the future volume demands of this segment.
“Several prospective commercial customers have accelerated their negotiations with us and our related discussions with potential high volume manufacturers are progressing. As a result, I believe we remain on target to sign an additional agreement by the end of the year,” continued Mr. Sculley.
Business and Product Highlights
Commercial
- Commenced work with a major consumer electronics company to design and develop a microdisplay for a VR headset. Under this program, which is expected take between 12 and 15 months, a limited quantity of sample displays will be produced. Additionally, the Company is actively negotiating with companies to provide high volume manufacturing capability.
- Furthered negotiations with multiple consumer electronics companies on both new display designs and low rate production capability.
Military
-
Secured a
$1 million order for a new thermal weapon sight program with a major European customer. -
Procured tooling and delivered the initial OLED display, taper, and
lens assemblies for integration and testing as part of our selection
as a sole source provider of OLED microdisplays for a major
U.S. Army helicopter helmet upgrade program. - Completed a requirements review with a major aviation prime contractor for an OLED upgrade to a fixed wing production helmet. This program continues on schedule.
- Delivered first 2K x 2K display to a defense contractor for integration into a new HMD prototype.
- Delivered high brightness displays for the U.S. Army Soldier Visual Interface Technology (SVIT) program. This key program will improve the situational awareness, lethality and survivability of the dismounted warrior and the eMagin OLED display is integral in providing the technological path for future military head mounted display systems.
Financial
-
Completed on
May 24 th an underwritten offering of 3.3 million shares of common stock at$2.00 per share and warrants to purchase up to 1.65 million shares of common stock. The Company realized net proceeds of$5.8 million after underwriting discounts and offering expenses.
Second Quarter Results
Revenues for the second quarter of 2017 were
Product revenues totaled
Overall gross margin for the second quarter was 24% on gross profit of
Operating expenses for the second quarter of 2017, including R&D
expenses, decreased to
Operating loss for the second quarter was
Cash and cash equivalents were
Outlook
“Our leading-edge OLED direct patterning technology continues to generate strong interest and enthusiasm. We are actively engaged in negotiations with potential partners for both high volume and low volume production as well as consumer applications. Additionally, there is renewed activity amongst our military customers, both domestic and international which bodes well for future display sales,” concluded Mr. Sculley.
The Company remains focused on the following objectives to drive shareholder value:
- Advance our product development discussions with major consumer electronics companies to incorporate our direct patterning OLED technology into their next generation products,
- Advance discussions with high volume production partners to utilize our leading production and process technologies,
- Further penetrate high growth commercial/industrial markets including medical devices and other vertical markets where integration of our OLED microdisplays and optics technology advances product development and adoption,
- Expand our presence in existing and future major military programs and overall customer count in domestic and international military markets,
- Launch new products focused on the commercial and consumer markets which offer high performance and broad appeal at an attractive price, and
- Continue our progress in manufacturing improvements including yield enhancement and production capacity expansion.
Conference Call Information
A conference call and live webcast will begin today at
About
A leader in OLED microdisplay technology, OLED microdisplay manufacturing know-how and mobile display systems, eMagin manufactures high-resolution OLED microdisplays and integrates them with magnifying optics to deliver virtual images comparable to large-screen computer and television displays in portable, low-power, lightweight personal displays. eMagin’s microdisplays provide near-eye imagery in a variety of products from military, industrial, medical and consumer OEMs. More information about eMagin is available at www.emagin.com.
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
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.
eMAGIN CORPORATION |
|||||||
CONDENSED CONSOLIDATED BALANCE SHEETS | |||||||
(In thousands, except share and per share data) | |||||||
June 30, |
December 31, |
||||||
(unaudited) | |||||||
ASSETS | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 4,869 | $ | 5,241 | |||
Accounts receivable, net | 3,110 | 2,834 | |||||
Unbilled accounts receivable | 850 | 1,401 | |||||
Inventories | 8,973 | 7,435 | |||||
Prepaid expenses and other current assets | 1,302 | 1,040 | |||||
Total current assets | 19,104 | 17,951 | |||||
Equipment, furniture and leasehold improvements, net | 9,045 | 8,980 | |||||
Intangibles and other assets | 462 | 282 | |||||
Total assets | $ | 28,611 | $ | 27,213 | |||
LIABILITIES AND SHAREHOLDERS’ EQUITY | |||||||
Current liabilities: | |||||||
Accounts payable | $ | 1,680 | $ | 1,432 | |||
Accrued compensation | 1,721 | 1,528 | |||||
Revolving credit facility, net | — | 1,689 | |||||
Other accrued expenses | 973 | 1,069 | |||||
Deferred Revenue | 1,231 | 445 | |||||
Other current liabilities | 591 | 590 | |||||
Total current liabilities | 6,196 | 6,753 | |||||
Commitments and contingencies |
|||||||
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, |
35 | 32 | |||||
Additional paid-in capital | 246,136 | 239,915 | |||||
Accumulated deficit | (223,256) | (218,987) | |||||
Treasury stock, 162,066 shares as of June 30, 2017 and December 31, 2016 | (500) | (500) | |||||
Total shareholders’ equity | 22,415 | 20,460 | |||||
Total liabilities and shareholders’ equity | $ | 28,611 | $ | 27,213 | |||
eMAGIN CORPORATION |
|||||||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | |||||||||||||||
(In thousands, except share and per share data) | |||||||||||||||
(unaudited) | |||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||
June 30, | June 30, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
Revenues: | |||||||||||||||
Product | $ | 4,655 | $ | 4,781 | $ | 9,036 | $ | 10,076 | |||||||
Contract | 605 | 752 | 2,293 | 1,458 | |||||||||||
License | — | — | — | 1,000 | |||||||||||
Total revenues, net | 5,260 | 5,533 | 11,329 | 12,534 | |||||||||||
Cost of revenues: | |||||||||||||||
Product | 3,658 | 3,807 | 7,116 | 7,094 | |||||||||||
Contract | 353 | 391 | 1,146 | 770 | |||||||||||
License | — | — | — | — | |||||||||||
Total cost of revenues | 4,011 | 4,198 | 8,262 | 7,864 | |||||||||||
Gross profit | 1,249 | 1,335 | 3,067 | 4,670 | |||||||||||
Operating expenses: | |||||||||||||||
Research and development | 1,177 | 1,499 | 2,511 | 2,802 | |||||||||||
Selling, general and administrative | 2,153 | 1,993 | 4,616 | 4,003 | |||||||||||
Total operating expenses | 3,330 | 3,492 | 7,127 | 6,805 | |||||||||||
Loss from operations | (2,081) | (2,157) | (4,060) | (2,135) | |||||||||||
Other income (expense): | |||||||||||||||
Interest expense, net | (188) | (10) | (223) | (20) | |||||||||||
Other income, net | (1) | 3 | 14 | 5 | |||||||||||
Total other income (expense), net | (189) | (7) | (209) | (15) | |||||||||||
Loss before provision for income taxes | (2,270) | (2,164) | (4,269) | (2,150) | |||||||||||
Provision for income taxes |
— |
— | — | — | |||||||||||
Net loss | $ | (2,270) | $ | (2,164) | $ | (4,269) | $ | (2,150) | |||||||
Loss per share, basic | $ | (0.07) | $ | (0.07) | $ | (0.13) | $ | (0.07) | |||||||
Loss per share, diluted | $ | (0.07) | $ | (0.07) | $ | (0.13) | $ | (0.07) | |||||||
Weighted average number of shares outstanding: | |||||||||||||||
Basic | 33,019,478 | 29,388,104 | 32,320,527 | 29,388,104 | |||||||||||
Diluted | 33,019,478 | 29,388,104 | 32,320,527 | 29,388,104 | |||||||||||
Non-GAAP Information |
|||||||||||||||
Three Months Ended |
Six Months Ended |
||||||||||||||
June 30, |
June 30, |
||||||||||||||
2017 |
2016 |
2017 |
2016 |
||||||||||||
|
|||||||||||||||
Net income (loss) |
$ |
(2,270) |
$ |
(2,164) |
$ |
(4,269) |
$ |
(2,150) |
|||||||
Non-cash compensation |
116 |
93 |
330 |
260 |
|||||||||||
Depreciation and intangibles amortization expense |
481 |
399 |
981 |
814 |
|||||||||||
Interest expense |
188 |
10 |
223 |
20 |
|||||||||||
Provision for income taxes |
— |
— |
— |
|
— |
||||||||||
Adjusted EBITDA |
$ |
(1,485) |
$ |
(1,662) |
$ |
(2,735) |
$ |
(1,056) |
|||||||
View source version on businesswire.com: http://www.businesswire.com/news/home/20170810005146/en/
Source:
eMagin Corporation
Jeffrey Lucas, 845-838-7931
Chief Financial
Officer
This email address is being protected from spambots. You need JavaScript enabled to view it.
or
MBS
Value Partners
Betsy Brod, 212-661-2231
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