Universal Display Corporation (PANL)
Q2 2010 Earnings Call Transcript
August 9, 2010 5:00 pm ET
Joe Hassett – IR
Steve Abramson – President and CEO
Sid Rosenblatt – EVP and CFO
Yair Reiner – Oppenheimer & Company
Jim Ricchiuti – Needham & Company
Darice Liu – Brigantine Advisors
Andrew Abrams – Avian Securities
Rob Stone – Cowen & Company
Josh Baribeau – Canaccord Adams
Previous Statements by PANL
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Good day and welcome to the Universal Display Corporation second quarter 2010 earnings conference call. As a reminder, today’s conference is being recorded.
At this time, I would like to turn the conference over to Mr. Joe Hassett. Please go ahead, sir.
Thank you, and good afternoon, everybody. With us today are Steve Abramson, President and Chief Executive Officer; and Sid Rosenblatt, Chief Financial Officer of Universal Display Corporation.
Let me begin today by reminding you that this call is a property of Universal Display. Any redistribution, retransmission or rebroadcast of this call in any form without the expressed written consent of Universal Display is strictly prohibited.
Further, as this call is being webcast live and will be made available for a period of time on Universal Display’s Web site, this call contains time-sensitive information that is accurate only as of the date of the live webcast of this call, August 09, 2010.
All statements in this conference that are not historical are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These include, but are not limited to statements regarding Universal Display's beliefs, expectations, hopes or intentions regarding the future.
It is important to note that these statements are subject to risks and uncertainties that could cause Universal Display's actual results to differ from those projected. These risks and uncertainties are discussed in the company's periodic reports filed with the SEC. Universal Display disclaims any obligation to update any of these statements.
Now, I'd like to turn the call over to Steve Abramson, President and CEO of Universal Display. Please go ahead, Steve.
Thank you, Joe, and welcome to everyone listening on today’s call and webcast. This afternoon, I will start with a quick overview of our second quarter financial results. Then I will discuss highlights from the quarter, and update everyone on our latest plans and developments to grow our PHOLED technology materials in both the display and lighting markets. Sid will then follow with more detail on our financials before we open the call to questions.
I am pleased to report that our revenues for the second quarter of 2010 rose to $8.4 million compared to $3 million for the same quarter of 2009. Revenues also increased significantly on a sequential basis nearly doubling from the $4.3 million in the first quarter of this year.
As a result, we were able to reduce our operating loss for the quarter to just $1.9 million, a significant reduction for both the year ago and the preceding quarter. While increased revenue was driven primarily by the growth of our developmental business, commercial revenue was also up both sequentially and compared to the second quarter of last year.
OLED was the most talked about display technologies these last few months, and we feel rightly so. Bright, beautiful, energy-efficient OLED displays are increasingly penetrating the mobile display market, especially for high-end smartphones. OLEDs have also become recognized as the leading technology for the next generation of large area televisions and energy-efficient white OLED lighting products are getting closer to commercial reality.
As our UniversalPHOLED technology materials are increasingly recognized for their ability to drive power consumption down, we have become a key component for high-performance OLED displays and essential for energy-efficient white lighting.
As a most recent example the Samsung Galaxy S that’s just been launched to outstanding reviews. The full page ads taken out in major newspapers in mid-July, the focus is on the "jaw-dropping 4-inch super AMOLED display". With its super AMOLED technology, Samsung has been able to place touch sensors on the display itself as opposed to on a separate layer. According to the Washington Post, "Super AMOLED is fantastic. You need to see it in person. Colors burst out of the display, and animations appear lively and smooth".
In a recent view of the Samsung Vibrant phone, USA Today marvelled, "These phones have eye-popping 4-inch super AMOLED displays". The reviewer was blow away by the quality of the picture as he watched the movie Avatar on his phone. This is only the latest of the rave reviews for the increasing number of OLED displays appearing on smartphones and other handheld devices. These displays provide incredible performance and with our technology superior energy efficiency.
In fact, demand for OLED displays has reached a point where it's outstripping supply. For instance, Samsung SMD is adding OLED display production capacity, committing $2.2 billion to a new GEN 5.5 AMOLED plant. Reports indicate that the plant will have monthly capacity of 30 million 3-inch mobile screens. It has been reported that AU Optronics is expanding its OLED production capacity and will start volume production of small-to-medium size OLED panels in 2011. And LG Display’s new Gen-4 production lines are expected to be in operation by next year. According to published reports, this will triple the OLED production capacity for mobile devices.
In total, according to DisplaySearch, at least 20 new AMOLED production lines are expected to come online in the next three years. As stated by Jennifer Colegrove of DisplaySearch, "This is the future of display technology on smartphones".