- 34% Increase in Quarterly Revenue Over 2017; Improvement in Product and Contract Gross Margins -
“Our revenues of
“From a production perspective, our efforts led to higher yields which in turn contributed to a higher gross profit margin. In addition to the investments we have made in engineering resources, equipment and manufacturing processes, we received government funding in the second quarter for OLED display production and yield improvement,” continued Mr. Sculley. “As a result of these efforts, we are experiencing better delivery times and improving product quality, validated by the favorable reports we received from multiple customers who have conducted quality and service audits.”
“On the commercial front, as we continue our discussions with consumer OEM’s about potential licensing agreements, we are moving forward on the design and development work for next generation AR/VR microdisplays. We held a final design review with a consumer customer in July for a very high resolution VR microdisplay. During the quarter, we also completed work on a 120Hz-capable, compact interface for our 2k x 2k display which demonstrates the highest brightness and resolution in the market today. We continue to believe that our direct patterning (dPdTM) technology will be key to the acceptance of our displays in the consumer AR/VR market with consumer electronics companies and advancing our discussions with potential mass production and licensing partners.”
“Our backlog at the end of June was
Business and Product Highlights
- We are progressing with the OLED upgrade to a production helmet for a multi-service, multi-country, fixed wing aircraft program. Our OLED displays will be replacing the LCD displays currently employed in these helmets. Displays required for Initial Operational Capability will begin deliveries in the fourth quarter. All phases of this program are on schedule and continue to progress toward Limited Rate Initial Production in 2019.
- We continue to make progress towards improving our dPd technology and we recently achieved a maximum brightness of more than 7,500 nits in full color, surpassing our previous brightness of 5,300 nits.
- We completed the design review phase for a next generation AR/VR microdisplay and expect that the first prototype, which will use our dPd technology, will be ready in early 2019.
-
We received an order totaling
$398,000 in support of the Javelin Missile program Command Launch Unit (CLU). The customer has scheduled a follow-on order worth over$795,000 for the fourth quarter. - We supported several prime contractors with display deliveries for pre-production units for the US Army Enhanced Night Vision Goggle – Binocular (ENVG-B) program. This program is expected to shift to production in early 2019 with an overall acquisition objective of 190,000 systems over a 7-year period.
-
We continued to support a major
US Army helicopter helmet upgrade program to retrofit high brightness microdisplays into the current fielded helmet. We delivered final displays for test helmets, with ground and flight tests scheduled for the third quarter. -
We received a
$245,000 contract from theUS Army for an OLED display production and yield improvement project. Three additional projects totaling$585,000 were awarded in July for total awards for 2018 of$830,000 .
Discontinuation of Consumer Night Vision Products
The Company has decided to discontinue its two consumer night vision
products, BlazeSpark and BlazeTorch. It was determined that the
engineering, marketing and managerial resources needed to advance these
products could be better utilized focusing on the Company’s core
business. As a result, the Company recorded a write-down of
Quarter Results
Revenues for the second quarter of 2018 grew 34% to
Product revenues increased 34% to
Overall gross margin for the second quarter included the impact of the
one-time write-off of the consumer night vision products inventory.
Excluding the impairment charge of
Operating expenses for the second quarter of 2018, including R&D
expenses, were
Operating loss for the second quarter was
Other expense for the second quarter was
Non-GAAP Adjusted EBITDA for the quarter was negative
As of
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 | |||||||
| CONSOLIDATED BALANCE SHEETS | |||||||
| (in thousands, except share and per share data) | |||||||
| June 30, | December 31, | ||||||
| 2018 | 2017 | ||||||
| (unaudited) | |||||||
| ASSETS | |||||||
| Current assets: | |||||||
| Cash and cash equivalents | $ | 8,663 | $ | 3,526 | |||
| Accounts receivable, net | 3,481 | 4,528 | |||||
| Unbilled accounts receivable | 947 | 406 | |||||
| Inventories | 7,814 | 8,640 | |||||
| Prepaid expenses and other current assets | 715 | 1,328 | |||||
| Total current assets | 21,620 | 18,428 | |||||
| Equipment, furniture and leasehold improvements, net | 8,403 | 8,553 | |||||
| Intangibles and other assets | 336 | 326 | |||||
| Total assets | $ | 30,359 | $ | 27,307 | |||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | |||||||
| Current liabilities: | |||||||
| Accounts payable | $ | 2,135 | $ | 1,714 | |||
| Accrued compensation | 1,658 | 1,557 | |||||
| Revolving credit facility, net | — | 3,808 | |||||
| Common stock warrant liability | 4,614 | 784 | |||||
| Other accrued expenses | 1,490 | 719 | |||||
| Deferred revenue | — | 765 | |||||
| Other current liabilities | 408 | 469 | |||||
| Total current liabilities | 10,305 | 9,816 | |||||
| Commitments and contingencies | |||||||
| Shareholders’ equity: | |||||||
| Preferred stock, $.001 par value: authorized 10,000,000 shares: | |||||||
| Series B Convertible Preferred stock, (liquidation preference of $5,659) stated value $1,000 per share, $.001 par value: 10,000 shares designated and 5,659 issued and outstanding as of June 30, 2018 and December 31, 2017 | — | — | |||||
| Common stock, $.001 par value: authorized 200,000,000 shares, issued 45,273,339 shares, outstanding 45,111,273 shares as of June 30, 2018 and issued 35,182,589 shares, outstanding 35,020,523 shares as of December 31, 2017 | 45 | 35 | |||||
| Additional paid-in capital | 254,425 | 244,726 | |||||
| Accumulated deficit | (233,916) | (226,770) | |||||
| Treasury stock, 162,066 shares as of June 30, 2018 and December 31, 2017 | (500) | (500) | |||||
| Total shareholders’ equity | 20,054 | 17,491 | |||||
| Total liabilities and shareholders’ equity | $ | 30,359 | $ | 27,307 | |||
| EMAGIN CORPORATION | ||||||||||||
| CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||||||
| (in thousands, except share and per share data) | ||||||||||||
| (unaudited) | ||||||||||||
| Three Months Ended | Six Months Ended | |||||||||||
| June 30, | June 30, | |||||||||||
| 2018 | 2017 | 2018 | 2017 | |||||||||
| Revenues: | ||||||||||||
| Product | $ | 6,216 | $ | 4,655 | $ | 12,079 | $ | 9,036 | ||||
| Contract | 850 | 605 | 1,854 | 2,293 | ||||||||
| Total revenues, net | 7,066 | 5,260 | 13,933 | 11,329 | ||||||||
| Cost of revenues: | ||||||||||||
| Product | 3,971 | 3,658 | 8,330 | 7,116 | ||||||||
| Contract | 299 | 353 | 827 | 1,146 | ||||||||
| Impairment of Consumer Night Vision inventory | 2,690 | — | 2,690 | — | ||||||||
| Total cost of revenues | 6,960 | 4,011 | 11,847 | 8,262 | ||||||||
| Gross profit | 106 | 1,249 | 2,086 | 3,067 | ||||||||
| Operating expenses: | ||||||||||||
| Research and development | 1,720 | 1,177 | 3,351 | 2,511 | ||||||||
| Selling, general and administrative | 2,031 | 2,153 | 4,943 | 4,616 | ||||||||
| Total operating expenses | 3,751 | 3,330 | 8,294 | 7,127 | ||||||||
| Loss from operations | (3,645) | (2,081) | (6,208) | (4,060) | ||||||||
| Other income (expense): | ||||||||||||
| Change in fair value of common stock warrant liability | (1,427) | — | (924) | — | ||||||||
| Interest expense, net | (30) | (188) | (72) | (223) | ||||||||
| Other income, net | 37 | (1) | 58 | 14 | ||||||||
| Total other expense | (1,420) | (189) | (938) | (209) | ||||||||
| Loss before provision for income taxes | (5,065) | (2,270) | (7,146) | (4,269) | ||||||||
| (Provision) benefit for income taxes | — | — | — | — | ||||||||
| Net loss | $ | (5,065) | $ | (2,270) | $ | (7,146) | $ | (4,269) | ||||
| Loss per share, basic | $ | (0.11) | $ | (0.07) | $ | (0.16) | $ | (0.13) | ||||
| Loss per share, diluted | $ | (0.11) | $ | (0.07) | $ | (0.16) | $ | (0.13) | ||||
| Weighted average number of shares outstanding: | ||||||||||||
| Basic | 45,111,273 | 33,019,478 | 43,691,117 | 32,320,527 | ||||||||
| Diluted | 45,111,273 | 33,019,478 | 43,691,117 | 32,320,527 | ||||||||
|
Non-GAAP Information |
||||||||||||
| Three Months Ended | Six Months Ended | |||||||||||
| June 30, | June 30, | |||||||||||
| 2018 | 2017 | 2018 | 2017 | |||||||||
| Net income (loss) | $ | (5,065) | $ | (2,270) | $ | (7,146) | $ | (4,269) | ||||
| Non-cash compensation | 130 | 116 | 335 | 330 | ||||||||
| Change in fair value of common stock warrant liability | 1,427 | - | 924 | - | ||||||||
| Depreciation and intangibles amortization expense | 482 | 495 | 950 | 981 | ||||||||
| Interest expense | 30 | 188 | 72 | 223 | ||||||||
| Provision for income taxes | - | - | - | - | ||||||||
| Adjusted EBITDA | $ | (2,996) | $ | (1,471) | $ | (4,865) | $ | (2,735) | ||||
View source version on businesswire.com: https://www.businesswire.com/news/home/20180809005127/en/
Source:
eMagin Corporation
Jeffrey Lucas, 845-838-7931
Chief Financial
Officer
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or
Affinity
Growth Advisors
Betsy Brod, 212-661-2231
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