eMagin Reports 371% Increase over 2Q 2003
Provides Highlights of Second Quarter Earnings Call
(EMAILWIRE.COM, August 17, 2004 )
HOPEWELL JUNCTION, N.Y. - eMagin Corporation (AMEX:EMA), the leader in active matrix organic light-emitting diode (OLED) microdisplays, announced financial results for the second quarter ended June 30, 2004 at its earnings conference call after market on August 16.
Revenues for the second quarter were $1.44 million compared to $0.31 million for the same period in 2003, a 371% increase. Net loss applicable to common stock for the quarter was $1.40 million, or $0.02 per share, compared to a $0.52 million gain of $0.02 per share for the same period in 2003. The 2003 gain was primarily the result of one-time positive effects of a debt restructuring in the 2nd quarter of 2003.
The Company's balance sheet showed $4.4 million in cash on-hand, up from approximately $1.1 million on December 31, 2003. Net equity was $6.5 million on June 30, 2004, up from a negative $4.8 million at the end of 2003, reflecting the additional financing the company accomplished in early 2004, exercises of warrants, and the conversion of all of its outstanding senior debt to equity.
"I'm very pleased to report that we achieved record product revenues," said Gary Jones, chief executive officer and president of eMagin. "We also continued to improve operations efficiency by decreasing our net loss from $4.9 million first quarter to $1.4 million in the second quarter, slightly better than estimated. Our supply of wafers has been significantly improved, but remains a constraint. Improvements in the wafer supply are anticipated. eMagin needs to continue to be extremely efficient in its use of capital as it addresses these issues, its targeted large ramp in supplies and inventory, new optics and subsystems solutions, and builds new markets. Still, the ratchet in sales revenues we demonstrated in the second quarter only bolsters our convictions that our products have tremendous potential and are gaining additional traction in the market. We believe that the fundamentals of our business continue to be strong and we remain confident in our corporate strategy."
SECOND QUARTER HIGHLIGHTS
Selected highlights from eMagin's earnings call include the following:
REVENUE: Revenue for the first six months of 2004 was $2.0 million, up 168% over $772,000 for the first half of 2003. The second quarter mix of revenue was approximately 80% displays and 20% for subsystems both of which are shipped to customers for integration into their products. This fully transitions the company into the production phase for our OLED microdisplays.
2003's revenue consisted primarily of test kits, initial quantity production, and services which were purchased by most clients while they went through their product design, evaluation, and initial product introduction phase. Today different clients are at many different stages - from just starting evaluations to starting to ramp production
CUSTOMERS: Developer and interface kits and first samples of our displays have been shipped to over 150 customers. Presently, about 120 of these customers are active in their product development or initial production efforts. At least 60 are now in later stages of product development or have commercial or military products already in the field, some of which have not been announced.
Customer announcements generally reflect clients who have recently completed the typical 18 to 24 month evaluation, prototyping and test cycle for commercial products or military programs. New domestic and international product announcements since the end of the first quarter 2004 include the following.
Thales-Angenieux (France) is selling the ELVIR thermal uncooled camera for night vision application in security and defense
Nivisys (USA) introduced and began selling the TAM-14 thermal acquisition monocular, which can be adapted for use with head gear. The Nivisys TAM-14 is based on a core that uses Raytheon's thermal imager.
DRS Technologies (USA) is making and selling its Hand-Held Thermal Imager for border protection, force protection, physical security, and search and rescue
NA-OR (Israel) , a division of International Technologies Lasers - whose design for the Advanced Integrated Soldier System incorporates eMagin displays in the helmet-mounted sighting and information communication system
Fifth Dimension Technologies 5DT (South Africa) announced five products that use our displays to deliver virtual reality experiences for several training applications
Elbit (Israel) disclosed a heads-up display for combat helicopter pilots; the product employs eMagin's OLED microdisplays
Vinghog AS (Norway) is using eMagin's see-through display as a key element in a fire control system that supports virtually every weapon in the Norwegian army's modernization program.
Each of these customers also supplies other programs worldwide. We also continue to work closely with KEO/Rockwell Collins, Insight, Total Fire Group, Sage Technologies, Liteye, and many others. We also continue to progress on development of the Rohm 0.24-inch viewfinder display. As previously announced, Rohm is providing eMagin with wafers from its own internal supply, which we are then running through our OLED processes
OPTICS -- We are targeting making large initial low-cost, wide view optic production batch runs in 2004 and early 2005 and we anticipate that most of our displays may be sold with optics attached by the end of 2005. Truly wide view, large eye movement range, low cost optics have been an issue for several consumer OEMs that have had difficulty creating their own designs, and we have now identified optical solutions that can soon be sold to these customers. The addition of optics to our portfolio expands our revenue model in a similar fashion to a processor company selling motherboards and chipsets, or that of larger flat panel manufacturers also integrating their products with other monitor components. We believe the cost benefit to small and medium size customers of purchasing combined displays and optics from one vendor will be compelling and well received. The time to market for new customers will also be accelerated.
MANUFACTURING -- We currently operate one full 8-hour shift and a partially staffed second shift as we continue to ramp. Additional production staff is already in training in preparation for higher fourth quarter volumes as are plans for partial outsourcing of packaging. Current staffing can operate at about half of the maximum equipment capacity level of 50,000 displays per month, or approximately 25,000 displays. Production activity during the second quarter represented approximately 5% of in place capacity, or 3% of maximum capacity.
STAFFING -- We have been and are hiring at both of our east and west coast sites. We currently have 55 employees. We have additional facilities support from IBM facilities at our New York site. We have added staff in production, R&D, and accounting this year. Our primary current hiring focus is on sales and marketing, customer support, and on additional production-related staff.
CASH -- Our ending cash was $4.4 million relatively unchanged from March 31, 2004 and up from $1.1 million at December 31, 2003. During the quarter we used $1.3 million for operating activities, and received $1.2 million from the exercise of warrants and options.
Recently Reported 8K Warrant Pricing -- The offer detailed in the Form 8K filed on August 9 gave investors who had participated in our January sale of $4.2 million of common stock an option to accept a re-pricing of any of their three classes of warrants to $.90 per share if they agreed to immediately exercise these shares and if they agreed to certain limitations to their first right of participation in future financings. Our primary motivation for making this offer was to regain our flexibility to potentially raise capital to fund our growth. The approximately $1.9 million of proceeds was not part of our working capital plan, but it will allow us to place added orders for wafers and lenses to promise increased deliveries faster than would have otherwise been possible in the future to our large consumer OEM clients.
Shelf Registration -- The intent of this shelf was not to set up an immediate sale of $50 million dollars of stock; it was to make available to the company capital as needed to fund growth, when deemed advantageous to the company by the Management and Board of Directors.
Preliminary 3Q-4Q Guidance -- Depending on the mix of display and subsystems shipped, we project that third quarter revenue will be between $1 million and $2 million, derived primarily from the industrial and military portion of our business. We're currently trying to accelerate delivery of wafers already on order in order to increase this range. Fourth quarter revenue will benefit from larger material orders, though still relatively small, placed during the second quarter and should allow a revenue increase to between $2 million and $3 million. Fourth quarter guidance will be updated during our third quarter earnings call. Both of these projections are significant improvements from 2003 and bode well for the future eMagin has in the industrial and military portion of our business.
Mr. Jones concluded, "We still see the potential for a strong fourth quarter and a very strong mid-2005 developing. All of our key internal metrics appear to be moving in the right direction, increasing our optimism for a bright future for eMagin, our customers, and our investors."
SECOND QUARTER RESULTS
Three Months Ended
June 30, June 30,
2004 2003
REVENUE:
Product revenues, net of returns $1,446,136 $306,991
Cost of goods sold 1,537,445 1,017,807
-----------------------
Gross Loss (91,309) (710,816)
EXPENSES:
Research and development 75,906 -
Selling, general and administrative 1,239,519 633,702
-----------------------
Total expenses 1,315,425 633,702
Other income, net 8,012 1,860,417
Net profit (loss) $(1,398,722) $515,899
-----------------------
Net loss per share, basic and diluted $(0.02) $0.02
-----------------------
Weighted average common shares outstanding 63,577,581 34,037,250
=======================
Forward Looking Statements
This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, including those regarding eMagin Corporation and its subsidiaries' expectations, intentions, strategies and beliefs pertaining to future events or future financial performance. All statements contained herein are based upon information available to eMagin's management as of the date hereof, and actual results may vary based upon future events, both within and without eMagin management's control. In some cases, you can identify forward-looking statements by terminology such as "may," "will," "should," "expect," "plan," "anticipate," "believe," "estimate," "predict," "potential" or "continue," the negative of such terms, or other comparable terminology. These statements are only predictions. Actual events or results may differ materially from those in the forward-looking statements as a result of various important factors, including those described in the Company's most recent filings with the SEC. Although we believe that the expectations reflected in the forward-looking statements are reasonable, such statements should not be regarded as a representation by the Company, or any other person, that such forward-looking statements will be achieved. The business and operations of the Company are subject to substantial risks which increase the uncertainty inherent in forward-looking statements. We undertake no duty to update any of the forward-looking statements, whether as a result of new information, future events or otherwise. In light of the foregoing, readers are cautioned not to place undue reliance on such forward-looking statements.
###
eMagin Corporation
Investors:
John Atherly, 845-838-7900
jatherly@emagin.com
Susan Jones, 845-838-7900
sjones@emagin.com
Media:
Joseph Runde, 845-838-7905
jrunde@emagin.com
HOPEWELL JUNCTION, N.Y. - eMagin Corporation (AMEX:EMA), the leader in active matrix organic light-emitting diode (OLED) microdisplays, announced financial results for the second quarter ended June 30, 2004 at its earnings conference call after market on August 16.
Revenues for the second quarter were $1.44 million compared to $0.31 million for the same period in 2003, a 371% increase. Net loss applicable to common stock for the quarter was $1.40 million, or $0.02 per share, compared to a $0.52 million gain of $0.02 per share for the same period in 2003. The 2003 gain was primarily the result of one-time positive effects of a debt restructuring in the 2nd quarter of 2003.
The Company's balance sheet showed $4.4 million in cash on-hand, up from approximately $1.1 million on December 31, 2003. Net equity was $6.5 million on June 30, 2004, up from a negative $4.8 million at the end of 2003, reflecting the additional financing the company accomplished in early 2004, exercises of warrants, and the conversion of all of its outstanding senior debt to equity.
"I'm very pleased to report that we achieved record product revenues," said Gary Jones, chief executive officer and president of eMagin. "We also continued to improve operations efficiency by decreasing our net loss from $4.9 million first quarter to $1.4 million in the second quarter, slightly better than estimated. Our supply of wafers has been significantly improved, but remains a constraint. Improvements in the wafer supply are anticipated. eMagin needs to continue to be extremely efficient in its use of capital as it addresses these issues, its targeted large ramp in supplies and inventory, new optics and subsystems solutions, and builds new markets. Still, the ratchet in sales revenues we demonstrated in the second quarter only bolsters our convictions that our products have tremendous potential and are gaining additional traction in the market. We believe that the fundamentals of our business continue to be strong and we remain confident in our corporate strategy."
SECOND QUARTER HIGHLIGHTS
Selected highlights from eMagin's earnings call include the following:
REVENUE: Revenue for the first six months of 2004 was $2.0 million, up 168% over $772,000 for the first half of 2003. The second quarter mix of revenue was approximately 80% displays and 20% for subsystems both of which are shipped to customers for integration into their products. This fully transitions the company into the production phase for our OLED microdisplays.
2003's revenue consisted primarily of test kits, initial quantity production, and services which were purchased by most clients while they went through their product design, evaluation, and initial product introduction phase. Today different clients are at many different stages - from just starting evaluations to starting to ramp production
CUSTOMERS: Developer and interface kits and first samples of our displays have been shipped to over 150 customers. Presently, about 120 of these customers are active in their product development or initial production efforts. At least 60 are now in later stages of product development or have commercial or military products already in the field, some of which have not been announced.
Customer announcements generally reflect clients who have recently completed the typical 18 to 24 month evaluation, prototyping and test cycle for commercial products or military programs. New domestic and international product announcements since the end of the first quarter 2004 include the following.
Thales-Angenieux (France) is selling the ELVIR thermal uncooled camera for night vision application in security and defense
Nivisys (USA) introduced and began selling the TAM-14 thermal acquisition monocular, which can be adapted for use with head gear. The Nivisys TAM-14 is based on a core that uses Raytheon's thermal imager.
DRS Technologies (USA) is making and selling its Hand-Held Thermal Imager for border protection, force protection, physical security, and search and rescue
NA-OR (Israel) , a division of International Technologies Lasers - whose design for the Advanced Integrated Soldier System incorporates eMagin displays in the helmet-mounted sighting and information communication system
Fifth Dimension Technologies 5DT (South Africa) announced five products that use our displays to deliver virtual reality experiences for several training applications
Elbit (Israel) disclosed a heads-up display for combat helicopter pilots; the product employs eMagin's OLED microdisplays
Vinghog AS (Norway) is using eMagin's see-through display as a key element in a fire control system that supports virtually every weapon in the Norwegian army's modernization program.
Each of these customers also supplies other programs worldwide. We also continue to work closely with KEO/Rockwell Collins, Insight, Total Fire Group, Sage Technologies, Liteye, and many others. We also continue to progress on development of the Rohm 0.24-inch viewfinder display. As previously announced, Rohm is providing eMagin with wafers from its own internal supply, which we are then running through our OLED processes
OPTICS -- We are targeting making large initial low-cost, wide view optic production batch runs in 2004 and early 2005 and we anticipate that most of our displays may be sold with optics attached by the end of 2005. Truly wide view, large eye movement range, low cost optics have been an issue for several consumer OEMs that have had difficulty creating their own designs, and we have now identified optical solutions that can soon be sold to these customers. The addition of optics to our portfolio expands our revenue model in a similar fashion to a processor company selling motherboards and chipsets, or that of larger flat panel manufacturers also integrating their products with other monitor components. We believe the cost benefit to small and medium size customers of purchasing combined displays and optics from one vendor will be compelling and well received. The time to market for new customers will also be accelerated.
MANUFACTURING -- We currently operate one full 8-hour shift and a partially staffed second shift as we continue to ramp. Additional production staff is already in training in preparation for higher fourth quarter volumes as are plans for partial outsourcing of packaging. Current staffing can operate at about half of the maximum equipment capacity level of 50,000 displays per month, or approximately 25,000 displays. Production activity during the second quarter represented approximately 5% of in place capacity, or 3% of maximum capacity.
STAFFING -- We have been and are hiring at both of our east and west coast sites. We currently have 55 employees. We have additional facilities support from IBM facilities at our New York site. We have added staff in production, R&D, and accounting this year. Our primary current hiring focus is on sales and marketing, customer support, and on additional production-related staff.
CASH -- Our ending cash was $4.4 million relatively unchanged from March 31, 2004 and up from $1.1 million at December 31, 2003. During the quarter we used $1.3 million for operating activities, and received $1.2 million from the exercise of warrants and options.
Recently Reported 8K Warrant Pricing -- The offer detailed in the Form 8K filed on August 9 gave investors who had participated in our January sale of $4.2 million of common stock an option to accept a re-pricing of any of their three classes of warrants to $.90 per share if they agreed to immediately exercise these shares and if they agreed to certain limitations to their first right of participation in future financings. Our primary motivation for making this offer was to regain our flexibility to potentially raise capital to fund our growth. The approximately $1.9 million of proceeds was not part of our working capital plan, but it will allow us to place added orders for wafers and lenses to promise increased deliveries faster than would have otherwise been possible in the future to our large consumer OEM clients.
Shelf Registration -- The intent of this shelf was not to set up an immediate sale of $50 million dollars of stock; it was to make available to the company capital as needed to fund growth, when deemed advantageous to the company by the Management and Board of Directors.
Preliminary 3Q-4Q Guidance -- Depending on the mix of display and subsystems shipped, we project that third quarter revenue will be between $1 million and $2 million, derived primarily from the industrial and military portion of our business. We're currently trying to accelerate delivery of wafers already on order in order to increase this range. Fourth quarter revenue will benefit from larger material orders, though still relatively small, placed during the second quarter and should allow a revenue increase to between $2 million and $3 million. Fourth quarter guidance will be updated during our third quarter earnings call. Both of these projections are significant improvements from 2003 and bode well for the future eMagin has in the industrial and military portion of our business.
Mr. Jones concluded, "We still see the potential for a strong fourth quarter and a very strong mid-2005 developing. All of our key internal metrics appear to be moving in the right direction, increasing our optimism for a bright future for eMagin, our customers, and our investors."
SECOND QUARTER RESULTS
Three Months Ended
June 30, June 30,
2004 2003
REVENUE:
Product revenues, net of returns $1,446,136 $306,991
Cost of goods sold 1,537,445 1,017,807
-----------------------
Gross Loss (91,309) (710,816)
EXPENSES:
Research and development 75,906 -
Selling, general and administrative 1,239,519 633,702
-----------------------
Total expenses 1,315,425 633,702
Other income, net 8,012 1,860,417
Net profit (loss) $(1,398,722) $515,899
-----------------------
Net loss per share, basic and diluted $(0.02) $0.02
-----------------------
Weighted average common shares outstanding 63,577,581 34,037,250
=======================
Forward Looking Statements
This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, including those regarding eMagin Corporation and its subsidiaries' expectations, intentions, strategies and beliefs pertaining to future events or future financial performance. All statements contained herein are based upon information available to eMagin's management as of the date hereof, and actual results may vary based upon future events, both within and without eMagin management's control. In some cases, you can identify forward-looking statements by terminology such as "may," "will," "should," "expect," "plan," "anticipate," "believe," "estimate," "predict," "potential" or "continue," the negative of such terms, or other comparable terminology. These statements are only predictions. Actual events or results may differ materially from those in the forward-looking statements as a result of various important factors, including those described in the Company's most recent filings with the SEC. Although we believe that the expectations reflected in the forward-looking statements are reasonable, such statements should not be regarded as a representation by the Company, or any other person, that such forward-looking statements will be achieved. The business and operations of the Company are subject to substantial risks which increase the uncertainty inherent in forward-looking statements. We undertake no duty to update any of the forward-looking statements, whether as a result of new information, future events or otherwise. In light of the foregoing, readers are cautioned not to place undue reliance on such forward-looking statements.
###
eMagin Corporation
Investors:
John Atherly, 845-838-7900
jatherly@emagin.com
Susan Jones, 845-838-7900
sjones@emagin.com
Media:
Joseph Runde, 845-838-7905
jrunde@emagin.com
Contact Information:
eMagin
Joseph Nchor
Tel:
Email us
This is a press release. Press release distribution and press release services by EmailWire.Com: http://www.emailwire.com/us-press-release-distribution.php.
eMagin
Joseph Nchor
Tel:
Email us
This is a press release. Press release distribution and press release services by EmailWire.Com: http://www.emailwire.com/us-press-release-distribution.php.
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Provides Highlights of Second Quarter Earnings Call
Provides Highlights of Second Quarter Earnings Call
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