Universal Display Corporation, enabling energy-efficient displays and lighting with itsUniversalPHOLED^® technology and materials, today reported financial results for the second quarter ended June 30, 2014.

For the second quarter of 2014, the Company reported net income of US $20.4 million, or US $0.44 per diluted share, on revenues of US $64.1 million. For the second quarter of 2013, the Company reported net income of US $15.4 million, or US $0.33 per diluted share, on revenues of US $49.4 million.

"We are pleased to report another record quarter of strong revenues and operating profit. The continued broadening array of OLED consumer products such as smartphones, tablets and wearables, coupled with Universal Display’s leadership in phosphorescent OLED materials and technologies, drove our top-line and bottom-line growth," said Sidney D. Rosenblatt, Executive Vice President and Chief Financial Officer of Universal Display. "From commitments to OLED TV and flexible display production to our expanding customer base, OLED activity continues to grow. Recently, we announced an extended evaluation agreement with BOE Technology, China’s largest panel maker, and a commercial materials agreement with Philips, a pioneer of lighting development and production. Looking forward, we continue to be excited by what we believe to be substantial growth opportunities in the evolving OLED display and lighting markets.”

Second Quarter 2014 Results

Revenues for the second quarter of 2014 were US $64.1 million, a 30 percent increase compared to revenues of US $$49.4 million in the same quarter of 2013. Growth in second quarter revenues was led by a 32 percent increase in material sales, which rose to US $35.9 million, up from US $27.1 million in the second quarter of 2013. This growth reflected solid volume growth in sales of red emitter, green emitter and green host materials. Royalty and license fees were US $28.1 million in the second quarter of 2014, up from US $21.2 million in the same quarter of 2013. The Company recognized US $25 million in Samsung Display Co., Ltd. (SDC) licensing revenue in the second quarter of 2014, up from US $20 million in the same quarter of 2013.

Operating expenses for the second quarter of 2014 were US $35.3 million, compared to US $27.6 million in the same quarter of 2013. Cost of materials for the quarter was US $12.0 million, compared to US $8.3 million in the second quarter of 2013.

The Company reported operating income of US $28.8 million for the second quarter of 2014, compared to US $21.7 million for the second quarter of 2013.

The Company’s balance sheet remained strong, with cash and cash equivalents and short-term investments of US $291 million as of June 30, 2014. Operating cash flow for the second quarter of 2014 was US $32.3 million, an increase of 22 percent compared to US $26.4 million for the second quarter of 2013.

On June 2, 2014, the Company's Board of Directors approved a stock repurchase program authorizing the Company to purchase shares of its common stock up to a total purchase price of US $50 million over the subsequent 12 months. During the three months ended June 30, 2014, the Company purchased 234,800 shares at a cost of approximately US $7.0 million.

First Six Months Results

Revenues for the first six months of 2014 were US $102.0 million, a 58 percent increase compared to US $64.3 million in the first half of 2013. Material sales in the first half of the year were US $71.3 million, an increase of 79 percent compared to material sales of US $39.9 million in the first half of 2013. Operating income in the first half of 2014 was US $35.5 million, or 35 percent of revenues, compared to operating income of US $14.6 million, or 23 percent of revenues, in the first half of 2013. For the first half of 2014, we reported net income of US $24.4 million, or US $0.52 per diluted share, increases of 130 percent and 126 percent, respectively, compared to net income of US $10.6 million, or US $0.23 per diluted share, in the same period of 2013.

2014 Guidance

Although the OLED industry is still at a stage where many variables can have a material impact on its growth, the Company reaffirms expectations for 2014 revenues to reach the high end of its US $190 million to US $205 million guidance range.