UNIVERSAL DISPLAY CORP \PA\ [OLED] Filings

10-Q 1 oled-20240930.htm 10-Q 10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)


☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2024


☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ____________ to ___________

Commission File Number 1-12031

UNIVERSAL DISPLAY CORPORATION

(Exact name of registrant as specified in its charter)


Pennsylvania		23-2372688
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

250 Phillips Boulevard, Ewing, New Jersey		08618
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code: (609) 671-0980

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.01 par value	OLED	The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	☒	Accelerated filer	☐	Emerging growth company	☐
Non-accelerated filer	☐	Smaller reporting company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial account standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of October 28, 2024, the registrant had outstanding 47,461,408 shares of common stock.

TABLE OF CONTENTS


PART I – FINANCIAL INFORMATION

Item 1. Financial Statements (unaudited)
Consolidated Balance Sheets – September 30, 2024 and December 31, 2023		1
Consolidated Statements of Income – Three and nine months ended September 30, 2024 and 2023		2
Consolidated Statements of Comprehensive Income – Three and nine months ended September 30, 2024 and 2023		3
Consolidated Statements of Shareholders’ Equity – Three and nine months ended September 30, 2024 and 2023		4
Consolidated Statements of Cash Flows – Nine months ended September 30, 2024 and 2023		6
Notes to Consolidated Financial Statements		7
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations		27
Item 3. Quantitative and Qualitative Disclosures About Market Risk		34
Item 4. Controls and Procedures		34

PART II – OTHER INFORMATION

Item 1. Legal Proceedings		34
Item 1A. Risk Factors		35
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds		35
Item 3. Defaults Upon Senior Securities		35
Item 4. Mine Safety Disclosures		35
Item 5. Other Information		35
Item 6. Exhibits		36

PART I – FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

UNIVERSAL DISPLAY CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(UNAUDITED)

(in thousands, except share and per share data)


	September 30, 2024			December 31, 2023
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	79,559		$	91,985
Short-term investments		471,993			422,137
Accounts receivable		87,693			139,850
Inventory		175,958			175,795
Other current assets		126,643			87,365
Total current assets		941,846			917,132
PROPERTY AND EQUIPMENT, net of accumulated depreciation of $158,992 and $143,908		191,195			175,150
ACQUIRED TECHNOLOGY, net of accumulated amortization of $199,428 and $186,850		77,747			90,325
OTHER INTANGIBLE ASSETS, net of accumulated amortization of $11,484 and $10,414		5,804			6,874
GOODWILL		15,535			15,535
INVESTMENTS		396,931			299,548
DEFERRED INCOME TAXES		72,138			59,108
OTHER ASSETS		109,686			105,289
TOTAL ASSETS	$	1,810,882		$	1,668,961
LIABILITIES AND SHAREHOLDERS’ EQUITY
CURRENT LIABILITIES:
Accounts payable	$	24,698		$	10,933
Accrued expenses		52,955			52,080
Deferred revenue		47,393			47,713
Other current liabilities		6,119			8,096
Total current liabilities		131,165			118,822
DEFERRED REVENUE		2,376			12,006
RETIREMENT PLAN BENEFIT LIABILITY		54,288			52,249
OTHER LIABILITIES		36,303			38,658
Total liabilities		224,132			221,735
COMMITMENTS AND CONTINGENCIES (Note 18)
SHAREHOLDERS’ EQUITY:
Preferred Stock, par value $0.01 per share, 5,000,000 shares authorized, 200,000 shares of Series A Nonconvertible Preferred Stock issued and outstanding (liquidation value of $7.50 per share or $1,500)		2			2
Common Stock, par value $0.01 per share, 200,000,000 shares authorized, 48,826,922 and 48,731,026 shares issued, and 47,461,274 and 47,365,378 shares outstanding, at September 30, 2024 and December 31, 2023, respectively		488			487
Additional paid-in capital		717,190			699,554
Retained earnings		907,776			789,553
Accumulated other comprehensive income (loss)		2,578			(1,086	)
Treasury stock, at cost (1,365,648 shares at September 30, 2024 and December 31, 2023)		(41,284	)		(41,284	)
Total shareholders’ equity		1,586,750			1,447,226
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$	1,810,882		$	1,668,961

The accompanying notes are an integral part of these Consolidated Financial Statements.

UNIVERSAL DISPLAY CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

(UNAUDITED)

(in thousands, except share and per share data)


	Three Months Ended September 30,						Nine Months Ended September 30,
	2024			2023			2024			2023
REVENUE:
Material sales	$	83,428		$	92,492		$	272,154		$	239,789
Royalty and license fees		74,590			45,915			202,409			165,524
Contract research services		3,609			2,670			10,828			12,796
Total revenue		161,627			141,077			485,391			418,109
COST OF SALES		35,812			34,248			111,109			99,357
Gross margin		125,815			106,829			374,282			318,752
OPERATING EXPENSES:
Research and development		36,089			33,099			110,900			96,840
Selling, general and administrative		15,664			18,084			54,757			50,557
Amortization of acquired technology and other intangible assets		4,551			4,557			13,648			11,442
Patent costs		2,352			2,572			6,735			7,056
Royalty and license expense		154			81			1,928			414
Total operating expenses		58,810			58,393			187,968			166,309
OPERATING INCOME		67,005			48,436			186,314			152,443
Interest income, net		10,592			7,136			30,073			20,301
Other income (loss), net		3,819			(1,693	)		416			(3,180	)
Interest and other income, net		14,411			5,443			30,489			17,121
INCOME BEFORE INCOME TAXES		81,416			53,879			216,803			169,564
INCOME TAX EXPENSE		(14,546	)		(2,363	)		(40,743	)		(28,531	)
NET INCOME	$	66,870		$	51,516		$	176,060		$	141,033
NET INCOME PER COMMON SHARE:
BASIC	$	1.40		$	1.08		$	3.69		$	2.95
DILUTED	$	1.40		$	1.08		$	3.69		$	2.95
WEIGHTED AVERAGE SHARES USED IN COMPUTING NET INCOME PER COMMON SHARE:
BASIC		47,542,114			47,570,099			47,549,976			47,555,734
DILUTED		47,669,439			47,632,431			47,644,026			47,609,692
CASH DIVIDENDS DECLARED PER COMMON SHARE	$	0.40		$	0.35		$	1.20		$	1.05

The accompanying notes are an integral part of these Consolidated Financial Statements.

UNIVERSAL DISPLAY CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(UNAUDITED)

(in thousands)


	Three Months Ended September 30,					Nine Months Ended September 30,
	2024		2023			2024			2023
NET INCOME	$	66,870	$	51,516		$	176,060		$	141,033
OTHER COMPREHENSIVE INCOME, NET OF TAX:
Unrealized gain on available-for-sale securities, net of tax of none, ($318), none, and ($756) respectively		7,093		1,138			4,117			2,706
Actuarial loss on retirement plan, net of tax of none, none, $232 and none, respectively		—		—			(761	)		—
Amortization of prior service cost, actuarial loss and curtailment charge for retirement plan included in net periodic pension costs, net of tax of ($3), ($71), ($79), and ($212) respectively		4		253			260			759
Change in cumulative foreign currency translation adjustment		141		(44	)		48			22
TOTAL OTHER COMPREHENSIVE INCOME		7,238		1,347			3,664			3,487
COMPREHENSIVE INCOME	$	74,108	$	52,863		$	179,724		$	144,520

The accompanying notes are an integral part of these Consolidated Financial Statements.

UNIVERSAL DISPLAY CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

(UNAUDITED)

(in thousands, except for share data)


	Three Months Ended September 30, 2024
	Series A Nonconvertible								Additional					Accumulated Other								Total
	Preferred Stock				Common Stock				Paid-in		Retained			Comprehensive			Treasury Stock					Shareholders’
	Shares		Amount		Shares		Amount		Capital		Earnings			Income			Shares		Amount			Equity
BALANCE, JUNE 30, 2024		200,000	$	2		48,814,273	$	488	$	712,234	$	860,058		$	(4,660	)		1,365,648	$	(41,284	)	$	1,526,838
Net income		—		—		—		—		—		66,870			—			—		—			66,870
Other comprehensive income		—		—		—		—		—		—			7,238			—		—			7,238
Cash dividend		—		—		—		—		—		(19,152	)		—			—		—			(19,152	)
Stock-based compensation and ESPP activity, net of taxes withheld						12,649		—		4,956		—			—			—		—			4,956
BALANCE, SEPTEMBER 30, 2024		200,000	$	2		48,826,922	$	488	$	717,190	$	907,776		$	2,578			1,365,648	$	(41,284	)	$	1,586,750

	Nine Months Ended September 30, 2024
	Series A Nonconvertible								Additional					Accumulated Other								Total
	Preferred Stock				Common Stock				Paid-in		Retained			Comprehensive			Treasury Stock					Shareholders’
	Shares		Amount		Shares		Amount		Capital		Earnings			Income			Shares		Amount			Equity
BALANCE, DECEMBER 31, 2023		200,000	$	2		48,731,026	$	487	$	699,554	$	789,553		$	(1,086	)		1,365,648	$	(41,284	)	$	1,447,226
Net income		—		—		—		—		—		176,060			—			—		—			176,060
Other comprehensive income		—		—		—		—		—		—			3,664			—		—			3,664
Cash dividend		—		—		—		—		—		(57,837	)		—			—		—			(57,837	)
Stock-based compensation and ESPP activity, net of taxes withheld		—		—		95,896		1		17,636		—			—			—		—			17,637
BALANCE, SEPTEMBER 30, 2024		200,000	$	2		48,826,922	$	488	$	717,190	$	907,776		$	2,578			1,365,648	$	(41,284	)	$	1,586,750

The accompanying notes are an integral part of these Consolidated Financial Statements.

UNIVERSAL DISPLAY CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

(UNAUDITED)

(in thousands, except for share data)


	Three Months Ended September 30, 2023
	Series A Nonconvertible										Additional					Accumulated Other								Total
	Preferred Stock				Common Stock						Paid-in		Retained			Comprehensive			Treasury Stock					Shareholders’
	Shares		Amount		Shares			Amount			Capital		Earnings			Loss			Shares		Amount			Equity
BALANCE, JUNE 30, 2023		200,000	$	2		48,706,932		$	487		$	686,501	$	709,372		$	(16,312	)		1,365,648	$	(41,284	)	$	1,338,766
Net income		—		—		—			—			—		51,516			—			—		—			51,516
Other comprehensive income		—		—		—			—			—		—			1,347			—		—			1,347
Cash dividend		—		—		—			—			—		(16,661	)		—			—		—			(16,661	)
Stock-based compensation and ESPP activity, net of taxes withheld		—		—		13,598			—			7,398		—			—			—		—			7,398
BALANCE, SEPTEMBER 30, 2023		200,000	$	2		48,720,530		$	487		$	693,899	$	744,227		$	(14,965	)		1,365,648	$	(41,284	)	$	1,382,366

	Nine Months Ended September 30, 2023
	Series A Nonconvertible										Additional					Accumulated Other								Total
	Preferred Stock				Common Stock						Paid-in		Retained			Comprehensive			Treasury Stock					Shareholders’
	Shares		Amount		Shares			Amount			Capital		Earnings			Loss			Shares		Amount			Equity
BALANCE, DECEMBER 31, 2022		200,000	$	2		49,136,030		$	491		$	681,335	$	653,277		$	(18,452	)		1,365,648	$	(41,284	)	$	1,275,369
Net income		—		—		—			—			—		141,033			—			—		—			141,033
Other comprehensive income		—		—		—			—			—		—			3,487			—		—			3,487
Cash dividend		—		—		—			—			—		(50,083	)		—			—		—			(50,083	)
Stock-based compensation and ESPP activity, net of taxes withheld		—		—		(415,500	)		(4	)		12,564		—			—			—		—			12,560
BALANCE, SEPTEMBER 30, 2023		200,000	$	2		48,720,530		$	487		$	693,899	$	744,227		$	(14,965	)		1,365,648	$	(41,284	)	$	1,382,366

The accompanying notes are an integral part of these Consolidated Financial Statements.

UNIVERSAL DISPLAY CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

(in thousands)


	Nine Months Ended September 30,
	2024			2023
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	176,060		$	141,033
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation		19,488			20,128
Amortization of intangibles		13,648			11,442
Amortization of premium and discount on investments, net		(5,930	)		(9,436	)
Stock-based compensation		23,812			18,623
Deferred income tax (benefit) expense		(12,878	)		7,556
Retirement plan expense, net of benefit payments		1,385			2,347
Decrease (increase) in assets:
Accounts receivable		52,157			(29,528	)
Inventory		(163	)		1,814
Other current assets		(39,278	)		(37,653	)
Other assets		(4,397	)		8,292
Increase (decrease) in liabilities:
Accounts payable and accrued expenses		9,405			(32	)
Other current liabilities		(1,977	)		(24,186	)
Deferred revenue		(9,950	)		11,809
Other liabilities		(2,355	)		(4,502	)
Net cash provided by operating activities		219,027			117,707
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment		(29,960	)		(52,208	)
Purchases of intangibles		—			(66,563	)
Purchases of investments		(337,949	)		(303,004	)
Proceeds from sale and maturity of investments

UNIVERSAL DISPLAY CORP \PA\ [OLED] Filings
10-Q	[2024-10-30]
10-Q	[2024-08-01]
10-Q	[2024-05-02]
10-K	[2024-02-22]
10-Q	[2023-11-02]
10-Q	[2023-08-03]
10-Q	[2023-05-03]
10-K	[2023-02-23]
10-Q	[2022-11-03]
10-Q	[2022-08-04]
10-Q	[2022-05-05]
10-K	[2022-02-23]
10-Q	[2021-11-04]
10-Q	[2021-08-05]
10-Q	[2021-05-06]
10-K	[2021-02-18]
10-Q	[2020-10-29]
10-Q	[2020-08-06]
10-Q	[2020-05-07]
10-K	[2020-02-20]
10-Q	[2019-10-30]
10-Q	[2019-08-01]
10-Q	[2019-05-02]
10-K	[2019-02-21]
10-Q	[2018-11-01]
10-Q	[2018-08-09]
10-Q	[2018-05-03]
10-K	[2018-02-22]
10-Q	[2017-11-02]
10-Q	[2017-08-03]
10-Q	[2017-05-04]
10-K	[2017-02-23]
10-Q	[2016-11-03]
10-Q	[2016-08-04]
10-Q	[2016-05-05]
10-K	[2016-02-25]
10-Q	[2015-11-05]
10-Q	[2015-08-06]
10-Q	[2015-05-07]
10-K	[2015-02-26]
10-Q	[2014-11-06]
10-Q	[2014-08-07]
10-Q	[2014-05-08]
10-K	[2014-02-28]
10-Q	[2013-11-07]
10-Q	[2013-08-08]
10-Q	[2013-05-09]
10-K	[2013-02-27]
10-Q	[2012-11-07]
10-Q	[2012-08-08]
10-Q	[2012-05-09]
10-K	[2012-02-28]