-Significant Progress in Commercial Market and Military Momentum Increases-
“We experienced a heightened level of activity in the third quarter,
both in our commercial initiatives as well as our military programs,”
said
“It is widely acknowledged across the AR/VR ecosystem that display quality is a major obstacle to bringing AR/VR into the mainstream. We believe that the partner agreements that we have signed and the attention we are receiving from tier-one consumer companies, headset creators and volume manufacturers underscores the fact that our proprietary, patented direct patterning technology solves this problem and makes us the ‘go-to’ microdisplay company that will enable AR/VR.
“Our agreements with these tier-one consumer electronics companies, each following rigorous and extensive diligence on our direct patterning technology, are outstanding endorsements of eMagin’s direct patterning technology. These are major steps toward the commercialization of our technology and further evidence of our belief that our direct patterned display technology will enable the next generation of AR/VR for the consumer the market. Momentum is building as we continue to have discussions with other top tier consumer electronics companies and pursue additional agreements. At the same time, the agreements we have signed to date are fueling our ongoing discussions with prospective mass production partners to scale production for our technology to meet commercial demand.
“On the military side of our business, we saw increased booking activity
for both our U.S. programs as well as with foreign military customers.
We booked over 90 new orders totaling more than
“Additionally, we have accelerated our activity in the aviation sector in several key programs, most notably in our work to upgrade the F-35 production helmet to OLED displays which will eliminate the ‘green glow’ effect of the current LCD displays. We believe that this is an area of tremendous opportunity for eMagin.
“Finally, we are continuing to advance our product technology as we have increased brightness beyond 5,000 nits while further reducing power consumption. We have also made enhancements to our manufacturing processes for displays and have ordered new equipment that we expect will help us improve yields and reduce cycle time,” continued Mr. Sculley. “We are developing a compact interface for our 2K X 2K microdisplay, which we believe has the highest brightness and sharpest resolution in the global marketplace today, for system integrators to quickly insert into optical systems. We expect to introduce this hardware to the marketplace in the second quarter of 2018. This compact interface will enable both consumer and military prospects to more easily integrate our 2K x 2K microdisplay into development systems and therefore speed time to prototype and to production. Overall, I believe that we have made significant progress in all areas of our business this year and are well-positioned entering 2018,” concluded Mr. Sculley.
Business and Product Highlights as of
- Furthered development of our Original Design Manufacturing (ODM) partner efforts to enable multiple partners to leverage a common microdisplay design for the consumer segment.
-
Awarded a follow-on contract worth over
$3.7 million for the Army’s Enhanced Night Vision Goggle III (ENVGIII) and Family of Weapons Sight-Individual (FWS-I) programs with delivery expected over twelve months. -
Received a multi-year
$1.7 million order from a European military prime contractor to provide displays for a see-through, augmented reality HMD to support airborne and ground missions requirements. -
Received a
$1.5 million order to support the Light Weight Thermal Sight (LWTS) program with deliveries expected to begin inDecember 2017 and continuing through 2018 -
Received a
$660,000 order for a new foreign military thermal weapons sight with deliveries commencing in the fourth quarter and expected to be completed by the third quarter 2018. - Received funding for the design and development of support hardware that will be integral to new system designs utilizing eMagin’s 2K x 2K microdisplays with the hardware anticipated to be available to defense and commercial integrators in mid-2018.
-
Completed the Critical Design Review (CDR) in
October 2017 with a major aviation prime contractor for an OLED upgrade to a fixed wing production helmet that will eliminate the reported “green glow” problem. -
Continued to support a major
US Army helicopter helmet upgrade program to retrofit high brightness microdisplays into the current fielded helmet. The CDR was completed in August with additional OLED display, taper, and lens assemblies to be delivered for integration and testing inDecember 2017 . - Received a production order from a foreign aviation prime contractor to supply high brightness microdisplays to upgrade an existing fixed wing helmet. It is expected that this will be a multi-year program with the initial order delivering displays through fourth quarter 2018.
- Delivered high brightness 2K x 2K microdisplays to another major foreign contractor for use in a prototype aviation helmet.
Third Quarter Results
Revenues for the third quarter of 2017 were
Product revenues totaled
Overall gross margin for the third quarter was 7% on gross profit of
Operating expenses for the third quarter of 2017, including R&D
expenses, decreased to
Third quarter R&D expenses decreased 24% over the prior year quarter due
to the reduction in R&D spending on the night vision consumer products
offset in part by the work performed on the Company’s direct patterning
technology. SG&A expenses were essentially flat with the prior year
third quarter at
Operating loss for the third quarter was
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 | ||||||||||
| CONDENSED CONSOLIDATED BALANCE SHEETS | ||||||||||
| (in thousands, except share and per share data) | ||||||||||
|
September 30, |
December 31, |
|||||||||
| (unaudited) | ||||||||||
| ASSETS | ||||||||||
| Current assets: | ||||||||||
| Cash and cash equivalents | $ | 1,964 | $ | 5,241 | ||||||
| Accounts receivable, net | 3,428 | 2,834 | ||||||||
| Unbilled accounts receivable | 475 | 1,401 | ||||||||
| Inventories | 9,080 | 7,435 | ||||||||
| Prepaid expenses and other current assets | 1,132 | 1,040 | ||||||||
| Total current assets | 16,079 | 17,951 | ||||||||
| Equipment, furniture and leasehold improvements, net | 8,802 | 8,980 | ||||||||
| Intangibles and other assets | 241 | 282 | ||||||||
| Total assets | $ | 25,122 | $ | 27,213 | ||||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||||
| Current liabilities: | ||||||||||
| Accounts payable | $ | 1,272 | $ | 1,432 | ||||||
| Accrued compensation | 1,285 | 1,528 | ||||||||
| Revolving credit facility, net | 920 | 1,689 | ||||||||
| Other accrued expenses | 492 | 1,069 | ||||||||
| Deferred revenue | 988 | 445 | ||||||||
| Other current liabilities | 566 | 590 | ||||||||
| Total current liabilities | 5,523 | 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 $5,659) stated value $1,000 |
||||||||||
|
per share, $.001 par value: 10,000 shares designated and 5,659 issued and outstanding as |
||||||||||
|
of September 30, 2017 and December 31, 2016 |
— | — | ||||||||
|
Common stock, $.001 par value: authorized 200,000,000 shares, issued 35,134,655 shares as |
||||||||||
|
of September 30, 2017 and 31,788,582 shares as of December 31, 2016 |
35 | 32 | ||||||||
| Additional paid-in capital | 246,312 | 239,915 | ||||||||
| Accumulated deficit | (226,248 | ) | (218,987 | ) | ||||||
| Treasury stock, 162,066 shares as of September 30, 2017 and December 31, 2016 | (500 | ) | (500 | ) | ||||||
| Total shareholders’ equity | 19,599 | 20,460 | ||||||||
| Total liabilities and shareholders’ equity | $ | 25,122 | $ | 27,213 | ||||||
| EMAGIN CORPORATION | ||||||||||||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||||||||||||
| (in thousands, except share and per share data) | ||||||||||||||||||
| (unaudited) | ||||||||||||||||||
| Three Months Ended | Nine Months Ended | |||||||||||||||||
| September 30, | September 30, | |||||||||||||||||
| 2017 | 2016 | 2017 | 2016 | |||||||||||||||
| Revenues: | ||||||||||||||||||
| Product | $ | 4,014 | $ | 3,536 | $ | 13,050 | $ | 13,612 | ||||||||||
| Contract | 266 | 769 | 2,559 | 2,227 | ||||||||||||||
| License | — | — | — | 1,000 | ||||||||||||||
| Total revenues, net | 4,280 | 4,305 | 15,609 | 16,839 | ||||||||||||||
| Cost of revenues: | ||||||||||||||||||
| Product | 3,802 | 2,545 | 10,918 | 9,639 | ||||||||||||||
| Contract | 200 | 478 | 1,346 | 1,248 | ||||||||||||||
| License | — | — | — | — | ||||||||||||||
| Total cost of revenues | 4,002 | 3,023 | 12,264 | 10,887 | ||||||||||||||
| Gross profit | 278 | 1,282 | 3,345 | 5,952 | ||||||||||||||
| Operating expenses: | ||||||||||||||||||
| Research and development | 1,271 | 1,666 | 3,782 | 4,468 | ||||||||||||||
| Selling, general and administrative | 1,970 | 2,041 | 6,586 | 6,044 | ||||||||||||||
| Total operating expenses | 3,241 | 3,707 | 10,368 | 10,512 | ||||||||||||||
| Loss from operations | (2,963 | ) | (2,425 | ) | (7,023 | ) | (4,560 | ) | ||||||||||
| Other income (expense): | ||||||||||||||||||
| Interest expense, net | (27 | ) | (8 | ) | (249 | ) | (28 | ) | ||||||||||
| Other income, net | (2 | ) | 4 | 11 | 8 | |||||||||||||
| Total other income (expense) | (29 | ) | (4 | ) | (238 | ) | (20 | ) | ||||||||||
| Loss before provision for income taxes | (2,992 | ) | (2,429 | ) | (7,261 | ) | (4,580 | ) | ||||||||||
| Provision for income taxes | — | (1 | ) | — | (1 | ) | ||||||||||||
| Net loss | $ | (2,992 | ) | $ | (2,430 | ) | $ | (7,261 | ) | $ | (4,581 | ) | ||||||
| Loss per share, basic | $ | (0.09 | ) | $ | (0.08 | ) | $ | (0.22 | ) | $ | (0.15 | ) | ||||||
| Loss per share, diluted | $ | (0.09 | ) | $ | (0.08 | ) | $ | (0.22 | ) | $ | (0.15 | ) | ||||||
| Weighted average number of shares outstanding: | ||||||||||||||||||
| Basic | 34,972,589 | 30,292,166 | 33,214,262 | 29,689,458 | ||||||||||||||
| Diluted | 34,972,589 | 30,292,166 | 33,214,262 | 29,689,458 | ||||||||||||||
|
Non-GAAP Information |
|||||||||||||||||
| Three Months Ended | Nine Months Ended | ||||||||||||||||
| September 30, | September 30, | ||||||||||||||||
| 2017 | 2016 | 2017 | 2016 | ||||||||||||||
| Net loss | $ | (2,992 | ) | $ | (2,430 | ) | $ | (7,261 | ) | $ | (4,581 | ) | |||||
| Non-cash compensation | 190 | 398 | 520 | 658 | |||||||||||||
| Depreciation and intangibles amortization expense | 406 | 400 | 1,376 | 1,214 | |||||||||||||
| Interest expense | 27 | 8 | 249 | 28 | |||||||||||||
| Provision for income taxes | - | 1 | - | 1 | |||||||||||||
| Adjusted EBITDA | $ | (2,367 | ) | $ | (1,623 | ) | $ | (5,116 | ) | $ | (2,680 | ) | |||||
View source version on businesswire.com: http://www.businesswire.com/news/home/20171109005309/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
Affinity
Growth Partners
Betsy Brod, 212-661-2231
This email address is being protected from spambots. You need JavaScript enabled to view it.