-- Update on Accelerating Partner Discussions --
“Our overarching focus is to advance our projects with our strategic
“The excitement around the technology that we have today is largely driven by our proprietary direct patterning, which we believe gives the highest brightness in the market. This is critical to our partners as it is the only way to avoid blurring and motion artifacts while achieving the speed and contrast required for the next generation of VR and AR headsets. We have been working on this for several years and have demonstrated over 5,000 nits in color, far beyond what we believe anyone else has today, and have in production monochrome displays with brightness levels exceeding 15,000 nits.
“Consumer electronics and technology companies who see VR/AR headsets as the next growth engine have been studying the performance and acceptance of first generation headsets and have strong ideas about what performance characteristics are critical for next generation products. Across the board, these companies are telling us that our high brightness technology represents the best path forward for meeting end user requirements.
“While our military business was down from last year due to the wind down of certain domestic military programs, our product revenue was up 20 percent from the fourth quarter as we begin to ramp up volumes for the new multiyear programs. We have strong, longstanding relationships with our customers and, as the only company that manufactures AMOLED displays in the U.S., are well-positioned to expand our presence and get more than our fair share of their business,” continued Mr. Sculley.
Business and Product Highlights
The Company continued to expand its presence in commercial, industrial and foreign military markets while winning new U.S. military programs. Additionally, the Company made improvements in technology and product design. Some of the highlights include:
- Signed a multi-million-dollar agreement with another major consumer electronics company to design and develop a microdisplay for a VR headset.
- Completed a prototype of a full color 2Kx2K device with advanced backplane and direct patterning. This high-performance display has many built in features due to the new backplane. Initial tests showed more than 5,000 nits in brightness which we believe would make this the world’s highest resolution, highest brightness OLED microdisplay.
Selected as a sole source provider of OLED microdisplays for a major
US Armyhelicopter helmet upgrade program to retrofit high brightness, monochrome green microdisplays into the current fielded helmet. Program includes funding for production tooling for a higher-level display, taper, and lens assembly.
- Completed requirements review with a major aviation prime contractor for an OLED upgrade to a fixed wing production helmet.
- Continued our negotiations on a new thermal weapon sight program with a major European customer.
First Quarter Results
Revenues for the first quarter of 2017 were
Product revenues totaled
Overall gross margin for the fourth quarter was 30% on gross profit of
Operating expenses for the first quarter of 2017, including R&D
expenses, increased to
Operating loss for the first quarter was
Cash and cash equivalents were
“We continue to pursue our milestone approach to driving shareholder value. We believe eMagin is the only Company whose products can meet the low power, high brightness and resolution requirements for high-pixel density displays being demanded both for next generation VR/AR Consumer HMDs as well as today’s commercial and military applications,” continued 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 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 consumer market 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.
“The interest in our technology, especially with the enhancements that direct patterning provide, continues to grow among both our partners and other potential partners whether for manufacturing or consumer applications. We are making significant progress in all areas of the business from engineering and production to sales and strategic partnerships. We have a very talented group of people working at an exceptional level to make this a transformative year for eMagin,” concluded Mr. Sculley.
Conference Call Information
A conference call and live webcast will begin today at
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.
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.
|Cash and cash equivalents||$||3,750||$||5,241|
|Accounts receivable, net||3,118||2,834|
|Unbilled accounts receivable||1,131||1,401|
|Prepaid expenses and other current assets||1,275||1,040|
|Total current assets||17,238||17,951|
|Equipment, furniture and leasehold improvements, net||9,189||8,980|
|Intangibles and other assets||426||282|
|LIABILITIES AND SHAREHOLDERS’ EQUITY|
|Revolving credit facility, net||1,450||1,689|
|Other accrued expenses||2,364||1,513|
|Other current liabilities||629||591|
|Total current liabilities||8,140||6,753|
|Commitments and contingencies (Note 8)|
|Preferred stock, $.001 par value: authorized 10,000,000 shares:|
|Series B Convertible Preferred stock, (liquidation preference of $5,659,000) stated value $1,000 per share, $.001 par value: 10,000 shares designated and 5,659 issued and outstanding as of March 31, 2017 and December 31, 2016||—||—|
|Common stock, $.001 par value: authorized 200,000,000 shares, issued 31,814,655 shares as of March 31, 2017 and 31,788,582 shares as of December 31, 2016||32||32|
|Additional paid-in capital||240,167||239,915|
|Treasury stock, 162,066 shares as of March 31, 2017 and December 31, 2016||(500)||(500)|
|Total shareholders’ equity||18,713||20,460|
|Total liabilities and shareholders’ equity||$||26,853||$||27,213|
|CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS|
|(In thousands, except share and per share data)|
|Three Months Ended|
|Total revenues, net||6,069||7,001|
|Cost of revenues:|
|Total cost of revenues||4,251||3,666|
|Research and development||1,334||1,303|
|Selling, general and administrative||2,463||2,010|
|Total operating expenses||3,797||3,313|
|(Loss) Income from operations||(1,979)||22|
|Other income (expense):|
|Interest expense, net||(35)||(10)|
|Other income, net||15||2|
|Total other expense, net||(20)||(8)|
|Loss (Income) before provision for income taxes||(1,999)||14|
|Provision for income taxes||—||—|
|Net (loss) income||$||(1,999)||$||14|
|Less net income allocated to participating securities||—||3|
|Net (loss) income allocated to common shares||$||(1,999)||$||11|
|Loss per share, basic||$||(0.06)||$||—|
|Loss per share, diluted||$||(0.06)||$||—|
|Weighted average number of shares outstanding:|
|Three Months Ended|
|Net (loss) income||
|Depreciation and intangibles amortization expense||486||415|
|Provision for income taxes||-||-|
Jeffrey Lucas, 845-838-7931
Chief Financial Officer
MBS Value Partners
Betsy Brod, 212-661-2231