UNIVERSAL DISPLAY CORP PA [OLED] Filings

10-Q 1 oled-20240630.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 June 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 July 25, 2024, the registrant had outstanding 47,452,149 shares of common stock.

TABLE OF CONTENTS


PART I – FINANCIAL INFORMATION

Item 1. Financial Statements (unaudited)
Consolidated Balance Sheets – June 30, 2024 and December 31, 2023		1
Consolidated Statements of Income – Three and six months ended June 30, 2024 and 2023		2
Consolidated Statements of Comprehensive Income – Three and six months ended June 30, 2024 and 2023		3
Consolidated Statements of Shareholders’ Equity – Three and six months ended June 30, 2024 and 2023		4
Consolidated Statements of Cash Flows – Six months ended June 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)


	June 30, 2024			December 31, 2023
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	92,856		$	91,985
Short-term investments		437,667			422,137
Accounts receivable		124,386			139,850
Inventory		171,843			175,795
Other current assets		132,729			87,365
Total current assets		959,481			917,132
PROPERTY AND EQUIPMENT, net of accumulated depreciation of $153,523 and $143,908		185,474			175,150
ACQUIRED TECHNOLOGY, net of accumulated amortization of $195,235 and $186,850		81,940			90,325
OTHER INTANGIBLE ASSETS, net of accumulated amortization of $11,125 and $10,414		6,163			6,874
GOODWILL		15,535			15,535
INVESTMENTS		362,459			299,548
DEFERRED INCOME TAXES		66,664			59,108
OTHER ASSETS		98,845			105,289
TOTAL ASSETS	$	1,776,561		$	1,668,961
LIABILITIES AND SHAREHOLDERS’ EQUITY
CURRENT LIABILITIES:
Accounts payable	$	23,636		$	10,933
Accrued expenses		58,624			52,080
Deferred revenue		63,784			47,713
Other current liabilities		5,955			8,096
Total current liabilities		151,999			118,822
DEFERRED REVENUE		6,732			12,006
RETIREMENT PLAN BENEFIT LIABILITY		53,870			52,249
OTHER LIABILITIES		37,122			38,658
Total liabilities		249,723			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, 48,814,273 and 48,731,026 shares issued, and 47,448,625 and 47,365,378 shares outstanding, at June 30, 2024 and December 31, 2023, respectively		488			487
Additional paid-in capital		712,234			699,554
Retained earnings		860,058			789,553
Accumulated other comprehensive loss		(4,660	)		(1,086	)
Treasury stock, at cost (1,365,648 shares at June 30, 2024 and December 31, 2023)		(41,284	)		(41,284	)
Total shareholders’ equity		1,526,838			1,447,226
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$	1,776,561		$	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 June 30,						Six Months Ended June 30,
	2024			2023			2024			2023
REVENUE:
Material sales	$	95,442		$	77,107		$	188,726		$	147,297
Royalty and license fees		59,551			64,399			127,819			119,609
Contract research services		3,512			5,059			7,219			10,126
Total revenue		158,505			146,565			323,764			277,032
COST OF SALES		38,328			32,139			75,297			65,109
Gross margin		120,177			114,426			248,467			211,923
OPERATING EXPENSES:
Research and development		36,826			32,318			74,811			63,741
Selling, general and administrative		19,841			17,077			39,093			32,473
Amortization of acquired technology and other intangible assets		4,549			3,994			9,097			6,885
Patent costs		2,401			2,229			4,383			4,484
Royalty and license expense		123			169			1,774			333
Total operating expenses		63,740			55,787			129,158			107,916
OPERATING INCOME		56,437			58,639			119,309			104,007
Interest income, net		9,913			6,198			19,481			13,165
Other loss, net		(1,460	)		(784	)		(3,403	)		(1,487	)
Interest and other loss, net		8,453			5,414			16,078			11,678
INCOME BEFORE INCOME TAXES		64,890			64,053			135,387			115,685
INCOME TAX EXPENSE		(12,553	)		(14,375	)		(26,197	)		(26,168	)
NET INCOME	$	52,337		$	49,678		$	109,190		$	89,517
NET INCOME PER COMMON SHARE:
BASIC	$	1.10		$	1.04		$	2.29		$	1.87
DILUTED	$	1.10		$	1.04		$	2.29		$	1.87
WEIGHTED AVERAGE SHARES USED IN COMPUTING NET INCOME PER COMMON SHARE:
BASIC		47,549,843			47,572,971			47,553,969			47,548,404
DILUTED		47,628,113			47,618,115			47,628,470			47,593,657
CASH DIVIDENDS DECLARED PER COMMON SHARE	$	0.40		$	0.35		$	0.80		$	0.70

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 June 30,						Six Months Ended June 30,
	2024			2023			2024			2023
NET INCOME	$	52,337		$	49,678		$	109,190		$	89,517
OTHER COMPREHENSIVE (LOSS) INCOME, NET OF TAX:
Unrealized (loss) gain on available-for-sale securities, net of tax of none, $296, none, and ($438) respectively		(310	)		(1,059	)		(2,976	)		1,568
Actuarial loss on retirement plan, net of tax of $246, none, $246 and none, respectively		(761	)		—			(761	)		—
Amortization of prior service cost, actuarial loss and curtailment charge for retirement plan included in net periodic pension costs, net of tax of ($75), ($71), ($77), and ($142) respectively		248			253			256			506
Change in cumulative foreign currency translation adjustment		(43	)		(29	)		(93	)		66
TOTAL OTHER COMPREHENSIVE (LOSS) INCOME		(866	)		(835	)		(3,574	)		2,140
COMPREHENSIVE INCOME	$	51,471		$	48,843		$	105,616		$	91,657

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 June 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			Loss			Shares		Amount			Equity
BALANCE, MARCH 31, 2024		200,000	$	2		48,804,964	$	488	$	702,609	$	826,879		$	(3,794	)		1,365,648	$	(41,284	)	$	1,484,900
Net income		—		—		—		—		—		52,337			—			—		—			52,337
Other comprehensive loss		—		—		—		—		—		—			(866	)		—		—			(866	)
Cash dividend		—		—		—		—		—		(19,158	)		—			—		—			(19,158	)
Stock-based compensation and ESPP activity, net of taxes withheld						9,309		—		9,625		—			—			—		—			9,625
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

	Six Months Ended June 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			Loss			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		—		—		—		—		—		109,190			—			—		—			109,190
Other comprehensive loss		—		—		—		—		—		—			(3,574	)		—		—			(3,574	)
Cash dividend		—		—		—		—		—		(38,685	)		—			—		—			(38,685	)
Stock-based compensation and ESPP activity, net of taxes withheld		—		—		83,247		1		12,680		—			—			—		—			12,681
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

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 June 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, MARCH 31, 2023		200,000	$	2		48,697,467		$	487		$	679,390	$	676,347		$	(15,477	)		1,365,648	$	(41,284	)	$	1,299,465
Net income		—		—		—			—			—		49,678			—			—		—			49,678
Other comprehensive loss		—		—		—			—			—		—			(835	)		—		—			(835	)
Cash dividend		—		—		—			—			—		(16,653	)		—			—		—			(16,653	)
Stock-based compensation and ESPP activity, net of taxes withheld		—		—		9,465			—			7,111		—			—			—		—			7,111
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

	Six Months Ended June 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		—		—		—			—			—		89,517			—			—		—			89,517
Other comprehensive income		—		—		—			—			—		—			2,140			—		—			2,140
Cash dividend		—		—		—			—			—		(33,422	)		—			—		—			(33,422	)
Stock-based compensation and ESPP activity, net of taxes withheld		—		—		(429,098	)		(4	)		5,166		—			—			—		—			5,162
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

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)


	Six Months Ended June 30,
	2024			2023
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	109,190		$	89,517
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation		13,092			13,207
Amortization of intangibles		9,097			6,885
Amortization of premium and discount on investments, net		(4,276	)		(6,845	)
Stock-based compensation		18,523			11,320
Deferred income tax benefit		(7,402	)		(12,782	)
Retirement plan expense, net of benefit payments		962			1,397
Decrease (increase) in assets:
Accounts receivable		15,464			(16,726	)
Inventory		3,952			7,365
Other current assets		(45,364	)		12,038
Other assets		6,444			7,665
Increase (decrease) in liabilities:
Accounts payable and accrued expenses		12,367			(17,651	)
Other current liabilities		(2,141	)		(20,811	)
Deferred revenue		10,797			(15,736	)
Other liabilities		(1,536	)		(1,445	)
Net cash provided by operating activities		139,169			57,398
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment		(16,334	)		(27,274	)
Purchases of intangibles		—			(66,063	)
Purchases of investments		(174,757	)		(115,048	)
Proceeds from sale and maturity of investments		97,620			190,907
Net cash used in investing activities

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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]