EMagin Corporation's CEO Discusses Second Quarter Results - Earnings Call Transcript

eMagin Corporation (EMAN)

Q2 2012 Earnings Call

August 9, 2012, 5:00 pm ET


Andrew Sculley – CEO, President

Paul Campbell – CFO


Dennis Van Zelfden – Brazos Research

Andrew Abrams – Avian Security

Aram Fuchs – Fertilemind Capital

(Tom McGraw) – Private Investor

Jonathan Pierce – Credit Suisse

Dennis Van Zelfden – Brazos Research

Bill Sutherland – Northland Capital Market



Good day, ladies and gentlemen, and welcome to the eMagin Corporate second quarter 2012 earnings call. My name is (Ian). I will be your operator today. At this time all participants are in listen-only mode. We will conduct a question and answer session toward the end of the conference. (Operator Instructions)

As a reminder the call is being recorded for recall purposes. I’d like to hand the call over to Mr. Paul Campbell, Chief Financial Officer. Please proceed, sir.

Paul Campbell

Thanks, (Ian). Welcome everyone to eMagin Corporation's second quarter 2012 earnings conference call. As always, before we begin, I would like to remind you that we will be referring to numbers that are part of our 10-Q for the second quarter of 2012 and of June 30, 2012.

During today’s call we may make forward looking statements as there defined in the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on the company’s current expectations, projections, beliefs and estimates and are subject to a number of risks and uncertainties.

Such statements include reference to projections of future revenues, plans for product development and production, the company’s ability to ramp up production at its manufacturing facilities, future contracts and commercial arrangements, future product benefits, future operations, liquidity and capital resources as well as statements containing words like believes, expects, estimates, plans, target, will, intend, could and other similar expressions.

Risk factors are included in the company’s Form 10K for 2011 on file with the Securities and Exchange Commission. Except where it’s directly required by federal securities laws we undertake no obligation to publicly update or revise any forward looking statements whether as a result of new information, future events, changes in circumstances or any other reasons.

With that I’d like to turn the call over to Andrew Sculley, President and CEO of eMagin.

Andrew Sculley

Thanks, Paul, and thanks everyone for joining us on the call today. I’d like to begin with a brief overview of our business, some key highlights. Paul will then discuss our financial results for the second quarter of 2012 and finally we’ll open it up to your questions.

I’m pleased to report record revenues of $8.6 million for the second quarter. This was driven by a 20% increase in the OLED micro display sales versus last year. And this is from both new and existing customers.

During the quarter we captured the highest level of new business bookings in our history, which drove our backlog to new heights.

We also saw further improvement in our manufacturing processes which resulted in greater throughput and higher yields so we’re very happy about this.

For the remainder of 2012 we expect the further strengthening of demand in our key segments. Our most advanced OLED micro displays including a new WXGA micro display which we successfully unveiled at the society for information display in Boston this June. It’s also called SID.

There it’s really the displays are virtually unmatched in being able to address the most demanding requirements that we have from all of our customers. Based on the response from security analysts and others attending SID conference I’m proud to say that our reputation as a leading innovator and partner of choice continues to grow.

With a strong product portfolio, a pipeline of new products in development, additional manufacturing capacity coming online and growing our intellectual property portfolio we believe we are well positioned to meet our key goals for this year and beyond.

We’re manufacturing displays on our new OLED deposition tool. We’re still working on full automation for the tool for operations and this will optimize production capacity. Displays are coming off the new tool are much higher quality with significantly improved uniformity.

This improvement in uniformity is both the benefit of the customer so every display looks the same. It will allow us to tighten speck or and or get better yield. Once fully optimized the new machine is expected to provide a tenfold increase in OLED deposition capacity, as we said before.

During the period we will continue to also produce on the OLED deposition machine that we have now during the rest of this quarter. And that’s in order to optimize or enhance our throughput and meet the increasing customer demand.

Worth mentioning that the new tool, the OLED deposition tool is unique. No other OLED deposition tool has its particular design characters aspects. It was jointly designed by us and the manufacturer SNU Precision to meet what we think of as our future demand requirement. Sorry, future display requirement.

Now let me give you an update on some specific programs and then I’ll turn the call back over to Paul to review the financial results.

First as I mentioned above, or previously, we unveiled and demonstrated out new WXGA full color display in June in the SID conference. This new product generated excitement among security analysts and industry trade reporters and a number of positive articles written highlighting our cutting edge technology.

And just as a reminder, I should remind you that the WUXGA display has phenomenal resolution of 19 20 by 1200 pixels and that’s better or higher resolution than the full HDTV in your living room.

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