"We have also made enhancements to our organization to better match our resources with future growth opportunities. Our re-aligned sales and marketing team is focused on our key end markets, including commercial/industrial, foreign military and our domestic military business. We recently made several key hires including a Vice President of Business Development who is spearheading our discussions and negotiations with potential Tier One partners and a Vice President of Operations to oversee our yield improvement program as we prepare for higher volumes and a more complex products mix. Also, we have completed the migration of our procurement and finance teams to Hopewell Junction to work hand-in-hand with the production, sales and marketing, business development and R&D groups."

Q3 Business and Product Highlights

The Company continued to make progress towards its goals of winning new U.S. military programs while expanding its presence in foreign military, commercial and industrial markets.
  • Beginning to deliver displays for the Low Rate Initial Production (LRIP) phases of the U.S. Army's Enhanced Night Vision Goggle III (ENVG III) and Family of Weapon Sight-Individual (FWS-I) programs. Shipments under these programs are expected to accelerate beginning in the fourth quarter 2016 and continuing into 2020.
  • Entered into a multi-year agreement with a major European defense company that manufactures thermal weapon sights and goggle systems that continues through 2018 and totals in excess of $3.5 million in display sales.
  • Awarded a new production contract for a European military helmet mounted display system for augmented reality training and simulation. This order will provide displays for initial production in 2017 with follow-on orders expected for several years.
  • Received an initial order for a military air defense missile system which will be deployed in 19 countries. Production is scheduled to last through 2020, followed by long-term maintenance and support.
  • Notified by a major medical device company that eMagin's HD-plus resolution WUXGA display has been selected for the next generation of surgical equipment. This further establishes eMagin's presence in the medical device field and follows a large order in the second quarter from another major medical device company.
  • Prepared for launch of first two consumer products, BlazeSpark TM and BlazeTorch TM, for night vision. Click for Release.

The Company continued to make improvements in technology and product design.
  • The Company is completing qualification of the XGA (1024 x 768) display which is expected to be available in the first quarter of 2017 for consumer and industrial applications that require cost effective medium resolution microdisplays.
  • The Company's direct patterning development work under the Defense Manufacturing, Science and Technology program (Man Tech) progressed during the quarter and is on track for completion in 2017.
  • eMagin's direct patterning technology has generated significant interest from our military and commercial customers. We will be offering direct patterned displays to our military customers in the second half of 2017.
  • The Company's direct patterning production equipment has been upgraded by the equipment manufacturers based on our design changes to provide significant improvements in display performance and higher production volumes. The upgraded equipment has been re-installed during the fourth quarter with fabrication samples expected by the end of the quarter.
  • Product development on the 2K x 2K full color RGB microdisplay, eMagin Corporation's largest microdisplay design, which expands the Company's product offerings for the consumer and commercial marketplaces, is on schedule to produce engineering samples. Select customers, including the customer with whom we entered into the license agreement in December 2015, will receive samples beginning in December. Associated products are expected to be generally available in the first quarter of 2017.

Third Quarter Results

Revenues for the third quarter of 2016 were $4.3 million, down 20% from the third quarter of 2015.

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