Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2018 | Aug. 06, 2018 | |
Document And Entity Information [Abstract] | ||
Entity Registrant Name | UNIVERSAL DISPLAY CORP \PA\ | |
Entity Central Index Key | 1,005,284 | |
Trading Symbol | OLED | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2018 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q2 | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding | 47,094,066 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 |
CURRENT ASSETS: | ||
Cash and cash equivalents | $ 103,777 | $ 132,840 |
Short-term investments | 353,651 | 287,446 |
Accounts receivable | 35,583 | 52,355 |
Inventory | 56,043 | 36,265 |
Other current assets | 20,311 | 10,276 |
Total current assets | 569,365 | 519,182 |
PROPERTY AND EQUIPMENT, net of accumulated depreciation of $40,769 and $36,368 | 62,348 | 56,450 |
ACQUIRED TECHNOLOGY, net of accumulated amortization of $101,611 and $91,312 | 121,230 | 131,529 |
OTHER INTANGIBLE ASSETS, net of accumulated amortization of $2,687 and $2,000 | 14,153 | 14,840 |
GOODWILL | 15,535 | 15,535 |
INVESTMENTS | 14,794 | |
DEFERRED INCOME TAXES | 10,534 | 27,022 |
OTHER ASSETS | 40,084 | 604 |
TOTAL ASSETS | 833,249 | 779,956 |
CURRENT LIABILITIES: | ||
Accounts payable | 7,863 | 13,774 |
Accrued expenses | 24,405 | 35,019 |
Deferred revenue | 69,247 | 14,981 |
Other current liabilities | 25 | 50 |
Total current liabilities | 101,540 | 63,824 |
DEFERRED REVENUE | 28,344 | 23,902 |
RETIREMENT PLAN BENEFIT LIABILITY | 34,350 | 33,176 |
OTHER LIABILITIES | 18,334 | |
Total liabilities | 182,568 | 120,902 |
COMMITMENTS AND CONTINGENCIES (Note 13) | ||
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, 48,650,696 and 48,476,034 shares issued, and 47,289,059 and 47,118,171 shares outstanding, at June 30, 2018 and December 31, 2017, respectively | 487 | 485 |
Additional paid-in capital | 608,932 | 611,063 |
Retained earnings | 92,346 | 99,126 |
Accumulated other comprehensive loss | (10,451) | (11,464) |
Treasury stock, at cost (1,361,637 and 1,357,863 shares at June 30, 2018 and December 31, 2017, respectively) | (40,635) | (40,158) |
Total shareholders’ equity | 650,681 | 659,054 |
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | $ 833,249 | $ 779,956 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) | Jun. 30, 2018 | Dec. 31, 2017 |
Accumulated Depreciation, Depletion and Amortization, Property, Plant, and Equipment | $ 40,769,000 | $ 36,368,000 |
Finite-Lived Intangible Assets, Accumulated Amortization | 101,611,000 | 91,312,000 |
Other Finite-Lived Intangible Assets, Accumulated Amortization | $ 2,687,000 | $ 2,000,000 |
SHAREHOLDERS' EQUITY: | ||
Preferred Stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred Stock, shares authorized ( in shares) | 5,000,000 | 5,000,000 |
Common Stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common Stock, shares authorized (in shares) | 200,000,000 | 200,000,000 |
Common Stock, shares issued (in shares) | 48,650,696 | 48,476,034 |
Common Stock, shares outstanding (in shares) | 47,289,059 | 47,118,171 |
Treasury Stock | ||
Treasury stock, shares | 1,361,637 | 1,357,863 |
Series A Nonconvertible Preferred Stock [Member] | ||
Shareholders' Equity A Nonconvertible Preferred Stock | ||
Preferred Stock, shares issued (in shares) | 200,000 | 200,000 |
Preferred Stock, shares outstanding (in shares) | 200,000 | 200,000 |
Preferred Stock, liquidation value per share (in dollars per share) | $ 7.50 | $ 7.50 |
Preferred Stock, liquidation value | $ 1,500,000 | $ 1,500,000 |
CONSOLIDATED STATEMENTS OF INCO
CONSOLIDATED STATEMENTS OF INCOME - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Income Statement [Abstract] | ||||
REVENUE | $ 56,149 | $ 102,513 | $ 99,721 | $ 158,079 |
COST OF SALES | 11,635 | 11,310 | 19,093 | 24,297 |
Gross margin | 44,514 | 91,203 | 80,628 | 133,782 |
OPERATING EXPENSES: | ||||
Research and development | 12,949 | 10,685 | 25,306 | 22,503 |
Selling, general and administrative | 11,562 | 9,839 | 22,353 | 19,916 |
Amortization of acquired technology and other intangible assets | 5,495 | 5,495 | 10,986 | 10,987 |
Patent costs | 2,029 | 1,674 | 3,754 | 3,221 |
Royalty and license expense | 1,568 | 2,991 | 2,799 | 4,578 |
Total operating expenses | 33,603 | 30,684 | 65,198 | 61,205 |
OPERATING INCOME | 10,911 | 60,519 | 15,430 | 72,577 |
Interest income, net | 1,766 | 796 | 3,037 | 1,467 |
Other (expense) income, net | (12) | 6 | (59) | (13) |
Interest and other (expense) income, net | 1,754 | 802 | 2,978 | 1,454 |
INCOME BEFORE INCOME TAXES | 12,665 | 61,321 | 18,408 | 74,031 |
INCOME TAX EXPENSE | (1,851) | (14,134) | (1,635) | (16,479) |
NET INCOME | $ 10,814 | $ 47,187 | $ 16,773 | $ 57,552 |
NET INCOME PER COMMON SHARE: | ||||
BASIC | $ 0.23 | $ 0.99 | $ 0.35 | $ 1.21 |
DILUTED | $ 0.23 | $ 0.99 | $ 0.35 | $ 1.21 |
WEIGHTED AVERAGE SHARES USED IN COMPUTING NET INCOME PER COMMON SHARE: | ||||
BASIC | 46,868,999 | 46,742,746 | 46,826,314 | 46,702,376 |
DILUTED | 46,901,098 | 46,810,238 | 46,873,109 | 46,781,120 |
CASH DIVIDENDS DECLARED PER COMMON SHARE | $ 0.06 | $ 0.03 | $ 0.12 | $ 0.06 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Statement Of Income And Comprehensive Income [Abstract] | ||||
NET INCOME | $ 10,814 | $ 47,187 | $ 16,773 | $ 57,552 |
OTHER COMPREHENSIVE INCOME (LOSS), NET OF TAX: | ||||
Unrealized gain on available-for-sale securities, net of tax of $32, $58, $48 and $50, respectively | 117 | 105 | 171 | 90 |
Employee benefit plan: | ||||
Actuarial loss, net of tax of none and none, respectively | (1,662) | (1,662) | ||
Amortization of prior service cost and actuarial loss for retirement plan included in net periodic pension costs, net of tax of $117, $187, $234 and $350, respectively | 422 | 343 | 844 | 642 |
Net change for employee benefit plan | 422 | (1,319) | 844 | (1,020) |
Change in cumulative foreign currency translation adjustment | (22) | (5) | (2) | 25 |
TOTAL OTHER COMPREHENSIVE INCOME (LOSS) | 517 | (1,219) | 1,013 | (905) |
COMPREHENSIVE INCOME | $ 11,331 | $ 45,968 | $ 17,786 | $ 56,647 |
CONSOLIDATED STATEMENTS OF COM6
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Statement Of Income And Comprehensive Income [Abstract] | ||||
Unrealized gain (loss) on available-for-sale securities, tax | $ 32 | $ 58 | $ 48 | $ 50 |
Amortization of prior service cost and actuarial loss for retirement plan included in net periodic pension costs, tax | $ 117 | $ 187 | $ 234 | $ 350 |
CONSOLIDATED STATEMENT OF SHARE
CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY - USD ($) | Total | Common Stock [Member] | Additional Paid-in Capital [Member] | Retained Earnings [Member] | Accumulated Other Comprehensive Loss [Member] | Treasury Stock [Member] | Series A Nonconvertible Preferred Stock [Member]Preferred Stock [Member] |
BALANCE at Dec. 31, 2016 | $ (10,666,000) | ||||||
Net income | $ 57,552,000 | ||||||
Other comprehensive income | (905,000) | ||||||
BALANCE at Jun. 30, 2017 | (11,571,000) | ||||||
BALANCE at Dec. 31, 2017 | 659,054,000 | $ 485,000 | $ 611,063,000 | $ 99,126,000 | (11,464,000) | $ (40,158,000) | $ 2,000 |
BALANCE (in shares) at Dec. 31, 2017 | 48,476,034 | 1,357,863 | 200,000 | ||||
ASC Topic 606 Adoption at Dec. 31, 2017 | (17,894,000) | (17,894,000) | |||||
ADJUSTED BALANCE at Dec. 31, 2017 | 641,160,000 | $ 485,000 | 611,063,000 | 81,232,000 | (11,464,000) | $ (40,158,000) | $ 2,000 |
BALANCE ADJUSTED (in shares) at Dec. 31, 2017 | 48,476,034 | 1,357,863 | 200,000 | ||||
Net income | 16,773,000 | 16,773,000 | |||||
Other comprehensive income | 1,013,000 | 1,013,000 | |||||
Cash dividend | (5,659,000) | (5,659,000) | |||||
Issuance of common stock to employees | 6,035,000 | $ 3,000 | 6,032,000 | ||||
Issuance of common stock to employees (in shares) | 250,979 | ||||||
Shares withheld for employee taxes | (11,031,000) | $ (1,000) | (11,030,000) | ||||
Shares withheld for employee taxes (in shares) | (101,581) | ||||||
Common shares repurchased | $ (477,000) | $ (477,000) | |||||
Common shares repurchased (in shares) | 3,774 | 3,774 | |||||
Issuance of common stock to Board of Directors and Scientific Advisory Board | $ 2,303,000 | 2,303,000 | |||||
Issuance of common stock to Board of Directors and Scientific Advisory Board (in shares) | 19,732 | ||||||
Issuance of common stock to employees under an ESPP | 564,000 | 564,000 | |||||
Issuance of common stock to employees under an ESPP (in shares) | 5,532 | ||||||
BALANCE at Jun. 30, 2018 | $ 650,681,000 | $ 487,000 | $ 608,932,000 | $ 92,346,000 | $ (10,451,000) | $ (40,635,000) | $ 2,000 |
BALANCE (in shares) at Jun. 30, 2018 | 48,650,696 | 1,361,637,000 | 200,000 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net income | $ 16,773 | $ 57,552 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Amortization of deferred revenue and recognition of unbilled receivables | (29,266) | (4,873) |
Depreciation | 4,422 | 2,398 |
Amortization of intangibles | 10,986 | 10,987 |
Amortization of premium and discount on investments, net | (2,329) | (1,260) |
Stock-based compensation to employees | 6,163 | 5,404 |
Stock-based compensation to Board of Directors and Scientific Advisory Board | 2,003 | 1,328 |
Earnout liability recorded for Adesis acquisition | 469 | |
Deferred income tax expense | 19,312 | 7,408 |
Retirement plan expense | 2,252 | 2,088 |
Decrease (increase) in assets: | ||
Accounts receivable | 16,772 | (14,708) |
Inventory | (19,778) | (7,123) |
Other current assets | (9,058) | (799) |
Other assets | (37,909) | (10) |
Increase (decrease) in liabilities: | ||
Accounts payable and accrued expenses | (13,123) | (1,916) |
Other current liabilities | (25) | (821) |
Deferred revenue | 64,423 | 505 |
Other liabilities | 18,334 | |
Net cash provided by operating activities | 49,952 | 56,629 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Purchases of property and equipment | (13,420) | (9,717) |
Purchases of investments | (260,711) | (255,224) |
Proceeds from sale of investments | 211,847 | 189,335 |
Net cash used in investing activities | (62,284) | (75,606) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Proceeds from issuance of common stock | 436 | 349 |
Repurchase of common stock | (477) | |
Proceeds from the exercise of common stock options | 30 | |
Payment of withholding taxes related to stock-based compensation to employees | (11,031) | (8,501) |
Cash dividends paid | (5,659) | (2,828) |
Net cash used in financing activities | (16,731) | (10,950) |
DECREASE IN CASH AND CASH EQUIVALENTS | (29,063) | (29,927) |
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD | 132,840 | 139,365 |
CASH AND CASH EQUIVALENTS, END OF PERIOD | $ 103,777 | $ 109,438 |
CONSOLIDATED STATEMENTS OF CAS9
CONSOLIDATED STATEMENTS OF CASH FLOWS Non-Cash Activities - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | |
Other Significant Noncash Transactions [Line Items] | ||
Unrealized gain on available-for-sale securities | $ 219 | $ 140 |
Net change in accounts payable and accrued expenses related to purchases of property and equipment | 3,100 | 4,169 |
Common Stock Issued to Board of Directors and Scientific Advisory Board that was Earned and Accrued for in Previous Period [Member] | ||
Other Significant Noncash Transactions [Line Items] | ||
Other significant noncash transaction, value of consideration received | $ 300 | 300 |
Common Stock Issued to Employees that was Earned and Accrued for in Previous Period Net of Shares Withheld for Taxes [Member] | ||
Other Significant Noncash Transactions [Line Items] | ||
Other significant noncash transaction, value of consideration received | $ 174 |
BUSINESS
BUSINESS | 6 Months Ended |
Jun. 30, 2018 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
BUSINESS | 1. BUSINESS: Universal Display Corporation (the Company) is a leader in the research, development and commercialization of organic light emitting diode (OLED) technologies and materials for use in display and solid-state lighting applications. OLEDs are thin, lightweight and power-efficient solid-state devices that emit light that can be manufactured on both flexible and rigid substrates, making them highly suitable for use in full-color displays and as lighting products. OLED displays are capturing a growing share of the display market. The Company believes this is because OLEDs offer potential advantages over competing display technologies with respect to power efficiency, contrast ratio, viewing angle, video response time, form factor and manufacturing cost. The Company also believes that OLED lighting products have the potential to replace many existing light sources in the future because of their high power efficiency, excellent color rendering index, low operating temperature and novel form factor. The Company's technology leadership and intellectual property position should enable it to share in the revenues from OLED displays and lighting products as they enter mainstream consumer and other markets. The Company's primary business strategy is to (1) further develop and license its proprietary OLED technologies to manufacturers of products for display applications, such as mobile phones, televisions, tablets, wearables, portable media devices, notebook computers, personal computers, and automotive interiors, and specialty and general lighting products; and (2) develop new OLED materials and sell existing and any new materials to those product manufacturers. The Company has established a significant portfolio of proprietary OLED technologies and materials, primarily through internal research and development efforts and acquisitions of patents and patent applications, as well as maintaining its relationships with world-class partners such as Princeton University (Princeton), the University of Southern California (USC), the University of Michigan (Michigan) and PPG Industries, Inc. (PPG Industries). The Company currently owns, exclusively licenses or has the sole right to sublicense more than 4,700 patents issued and pending worldwide. The Company sells its proprietary OLED materials to customers for evaluation and use in commercial OLED products. The Company also enters into agreements with manufacturers of OLED display and lighting products under which it grants them licenses to practice under its patents and to use the Company's proprietary know-how. At the same time, the Company works with these and other companies who are evaluating the Company's OLED technologies and materials for possible use in commercial OLED display and lighting products. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 6 Months Ended |
Jun. 30, 2018 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: Interim Financial Information In the opinion of management, the accompanying unaudited consolidated financial statements contain all adjustments (consisting of only normal recurring adjustments) necessary to present fairly the Company’s financial position as of June 30, 2018 and results of operations for the three and six months ended June 30, 2018 and 2017, and cash flows for the six months ended June 30, 2018 and 2017. While management believes that the disclosures presented are adequate to make the information not misleading, these unaudited consolidated financial statements should be read in conjunction with the audited consolidated financial statements and the notes thereto in the Company’s latest year-end financial statements, which are included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017. The results of the Company’s operations for any interim period are not necessarily indicative of the results of operations for any other interim period or for the full year. Principles of Consolidation The consolidated financial statements include the accounts of Universal Display Corporation and its wholly owned subsidiaries, UDC, Inc., UDC Ireland Limited, Universal Display Corporation Hong Kong, Limited, Universal Display Corporation Korea, Y.H., Universal Display Corporation Japan GK, Universal Display Corporation China, Ltd. and Adesis, Inc. (Adesis). All intercompany transactions and accounts have been eliminated. Management’s Use of Estimates The preparation of financial statements in conformity with U.S. generally accepted accounting principles (GAAP) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The estimates made are principally in the areas of revenue recognition including estimates of material unit sales and royalties, the useful life of acquired intangibles, the use and recoverability of inventories, intangibles and income taxes including realization of deferred tax assets, stock-based compensation and retirement benefit plan liabilities. Actual results could differ from those estimates. Inventories Inventories consist of raw materials, work-in-process and finished goods, including inventory consigned to customers, and are stated at the lower of cost, determined on a first-in, first-out basis, or net realizable value. Inventory valuation and firm committed purchase order assessments are performed on a quarterly basis and those items that are identified to be obsolete or in excess of forecasted usage are written down to their estimated realizable value. Estimates of realizable value are based upon management’s analyses and assumptions, including, but not limited to, forecasted sales levels by product, expected product lifecycle, product development plans and future demand requirements. A 12-month rolling forecast based on factors, including, but not limited to, production cycles, anticipated product orders, marketing forecasts, backlog, and shipment activities is used in the inventory analysis. If market conditions are less favorable than forecasts or actual demand from customers is lower than estimates, additional inventory write-downs may be required. If demand is higher than expected, inventories that had previously been written down may be sold. Certain of the Company’s customers have assumed the responsibility for maintaining the Company's inventory at their location based on the customers’ demand forecast. Notwithstanding the fact that the Company builds and ships the inventory, the customer does not purchase the consigned inventory until the inventory is drawn or pulled by the customer to be used in the manufacture of the customer’s product. Though the consigned inventory may be at the customer’s physical location, it remains inventory owned by the Company until the inventory is drawn or pulled, which is the time at which the sale takes place. Fair Value of Financial Instruments The carrying values of accounts receivable, other current assets, and accounts payable approximate fair value in the accompanying financial statements due to the short-term nature of those instruments. The Company’s other financial instruments, which include cash equivalents and investments, are carried at fair value. Revenue Recognition and Deferred Revenue Material sales relate to the Company’s sale of its OLED materials for incorporation into its customers’ commercial OLED products or for their OLED development and evaluation activities. Material sales are recognized at the time title passes, which is typically at the time of shipment or at the time of delivery, depending upon the contractual agreement between the parties. The rights and benefits to the Company’s OLED technology are conveyed to the customer through technology license agreements and material supply agreements. These agreements are combined and the licenses and materials sold under these combined agreements are not distinct from each other for financial reporting purposes and as such, are accounted for as a single performance obligation. Accordingly, total contract consideration is estimated and recognized over the contract term based on material units sold during the period at their estimated per unit fee. Total contract consideration includes fixed amounts designated in contracts with customers as license fees as well as estimates of material fees and royalties to be earned. Various estimates are relied upon to recognize revenue. The Company estimates total material units to be purchased by its customers over the contract term based on historical trends, industry estimates and its forecast process and related amounts to be charged. Additionally, management estimates the total sales-based royalties based on the estimated net sales revenue of its customers over the contract term. Contract research services revenue is revenue earned by Adesis through performing organic and organometallic synthetics research, development and commercialization on a contractual basis. These services range from intermediates for structure-activity relationship studies, reference agents and building blocks for combinatorial synthesis, re-synthesis of key intermediates, specialty organic chemistry needs, and selective toll manufacturing. These services are provided to third-party pharmaceutical and life sciences firms and other technology firms at fixed costs or on an annual contract basis. Revenue is recognized as services are performed with billing schedules and payment terms negotiated on a contract-by-contract basis. Payments received in excess of revenue recognized are recorded as deferred revenue. In other cases, services may be provided and revenue is recognized before the client is invoiced. In these cases, revenue recognized will exceed amounts billed and the difference, representing amounts which are currently unbillable to the customer pursuant to contractual terms, is recorded as an unbilled receivable. Technology development and support revenue is revenue earned from government contracts, development and technology evaluation agreements and commercialization assistance fees, which includes reimbursements by government entities for all or a portion of the research and development costs the Company incurs in relation to its government contracts. Revenues are recognized proportionally as research and development costs are incurred, or as defined milestones are achieved, and are included in contract research services in the accompanying consolidated statements of income. Currently, the Company's most significant commercial license agreement is with Samsung Display Co., Ltd. (SDC). This agreement, which covers the manufacture and sale of specified OLED display materials, was effective as of January 1, 2018 and lasts through the end of 2022 with an additional two-year extension option. Under this agreement, the Company is being paid a license fee, payable in quarterly installments over the agreement term of five years. The agreement conveys to SDC the non-exclusive right to use certain of the Company's intellectual property assets for a limited period of time that is less than the estimated life of the assets. At the same time the Company entered into the current patent license agreement with SDC, the Company also entered into a new supplemental material purchase agreement with SDC. Under the current supplemental material purchase agreement, SDC agrees to purchase from the Company a minimum amount of phosphorescent emitter materials for use in the manufacture of licensed products. This minimum commitment is subject to SDC’s requirements for phosphorescent emitter materials and the Company’s ability to meet these requirements over the term of the supplemental agreement. In 2015, the Company entered into an OLED patent license agreement and an OLED commercial supply agreement with LG Display Co., Ltd. (LG Display) which were effective as of January 1, 2015 and superseded the existing 2007 commercial supply agreement between the parties. The new agreements have a term that is set to expire by the end of 2022. The patent license agreement provides LG Display a non-exclusive, royalty bearing portfolio license to make and sell OLED displays under the Company's patent portfolio. The patent license calls for license fees, prepaid royalties and running royalties on licensed products. The agreements include customary provisions relating to warranties, indemnities, confidentiality, assignability and business terms. The agreements provide for certain other minimum obligations relating to the volume of material sales anticipated over the life of the agreements as well as minimum royalty revenue to be generated under the patent license agreement. The Company expects to generate revenue under these agreements that are predominantly tied to LG Display’s sales of OLED licensed products. The OLED commercial supply agreement provides for the sale of materials for use by LG Display, which may include phosphorescent emitters and host materials. In 2016, the Company entered into long-term, multi-year OLED patent license and material purchase agreements with Tianma Micro-electronics Co., Ltd. (Tianma). Under the license agreement, the Company has granted Tianma non-exclusive license rights under various patents owned or controlled by the Company to manufacture and sell OLED display products. The license agreement calls for license fees and running royalties on licensed products. Additionally, the Company expects to supply phosphorescent OLED materials to Tianma for use in its licensed products. In 2017, the Company entered into long-term, multi-year agreements with BOE Technology Group Co., Ltd. (BOE). Under these agreements, the Company has granted BOE non-exclusive license rights under various patents owned or controlled by the Company to manufacture and sell OLED display products. The Company has also agreed to supply phosphorescent OLED materials to BOE. In 2018, the Company entered into long-term, multi-year OLED patent license and material purchase agreements with Visionox Technology, Inc. (Visionox). Under the license agreement, the Company has granted Visionox non-exclusive license rights under various patents owned or controlled by the Company to manufacture and sell OLED display products. The license agreement calls for license fees and running royalties on licensed products. Additionally, the Company expects to supply phosphorescent OLED materials to Visionox for use in its licensed products. The Company records taxes billed to customers and remitted to various governmental entities on a gross basis in both revenues and cost of material sales in the consolidated statements of income. The amounts of these pass through taxes reflected in revenues and cost of material sales were $23,000 and $29,000 for the three and six months ended June 30, 2018, respectively, and $151,000 and $207,000 for the three and six months ended June 30, 2017, respectively. All sales transactions are billed and due within 90 days and substantially all are transacted in U.S. dollars. Cost of Sales Cost of sales consists of labor and material costs associated with the production of materials processed at the Company's manufacturing partners and at the Company's internal manufacturing processing facility. The Company’s portion of cost of sales also includes depreciation of manufacturing equipment, as well as manufacturing overhead costs and inventory adjustments for excess and obsolete inventory. Research and Development Expenditures for research and development are charged to expense as incurred. Patent Costs Costs associated with patent applications, patent prosecution, patent defense and the maintenance of patents are charged to expense as incurred. Costs to successfully defend a challenge to a patent are capitalized to the extent of an evident increase in the value of the patent. Costs that relate to an unsuccessful outcome are charged to expense. Amortization of Acquired Technology Amortization costs relate to technology acquired from BASF, Fujifilm and Motorola. These acquisitions were completed in the years ended December 31, 2016, 2012 and 2011, respectively. Acquisition costs are being amortized over a period of 10 years for the BASF and Fujifilm patents and 7.5 years for the Motorola patents. Amortization of Other Intangible Assets Other intangible assets from the Adesis acquisition are being amortized over a period of 10 to 15 years. See Note 6 for further discussion. Translation of Foreign Currency Financial Statements and Foreign Currency Transactions The Company's reporting currency is the U.S. dollar. The functional currency for the Company's Ireland subsidiary is also the U.S. dollar and the functional currency for each of the Company's Asia-Pacific foreign subsidiaries is its local currency. The Company translates the amounts included in the consolidated statements of income from its Asia-Pacific foreign subsidiaries into U.S. dollars at weighted-average exchange rates, which the Company believes are representative of the actual exchange rates on the dates of the transactions. The Company's foreign subsidiaries' assets and liabilities are translated into U.S. dollars from the local currency at the actual exchange rates as of the end of each reporting date, and the Company records the resulting foreign exchange translation adjustments in the consolidated balance sheets as a component of accumulated other comprehensive loss. The overall effect of the translation of foreign currency and foreign currency transactions to date has been insignificant. Income Taxes Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. The Company recognizes the effect of income tax positions only if those positions are more likely than not of being sustained. Recognized income tax positions are measured at the largest amount of which the likelihood of realization is greater than 50%. Changes in recognition or measurement are reflected in the period in which the change in judgment occurs. The Company records interest and penalties, if any, related to unrecognized tax benefits as a component of tax expense. Share-Based Payment Awards The Company recognizes in the consolidated statements of income the grant-date fair value of equity based awards such as shares issued under employee stock purchase plans, restricted stock awards, restricted stock units and performance unit awards issued to employees and directors. The grant-date fair value of stock awards is based on the closing price of the stock on the date of grant. The fair value of share-based awards is recognized as compensation expense on a straight-line basis over the requisite service period, net of forfeitures. The Company issues new shares upon the respective grant, exercise or vesting of the share-based payment awards, as applicable. Performance unit awards are subject to either a performance-based or market-based vesting requirement. For performance-based vesting, the grant-date fair value of the award, based on fair value of the Company's common stock, is recognized over the service period based on an assessment of the likelihood that the applicable performance goals will be achieved and compensation expense is periodically adjusted based on actual and expected performance. Compensation expense for performance unit awards with market-based vesting is calculated based on the estimated fair value as of the grant date utilizing a Monte Carlo simulation model and is recognized over the service period on a straight-line basis. Recent Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (FASB) issued a new revenue recognition standard entitled Accounting Standards Codification (“ASC”) Topic 606, Revenue from Contracts with Customers The new standard impacts how the Company recognizes revenue on its commercial license and material supply agreements with customers. In addition, the Company previously recognized royalty revenue one quarter in arrears based on sales information received from its customers typically received after disclosing that quarter’s results. Under ASC Topic 606, royalties to be earned over the contract term are estimated as part of total contract consideration and recognized as noted below. The estimates are updated on a quarterly basis. The rights and benefits to the Company’s OLED technology are conveyed to the customer through technology license agreements and material supply agreements. These agreements are combined and the licenses and materials sold under these combined agreements are not distinct from each other for financial reporting purposes and as such, are accounted for as a single performance obligation. Accordingly, total contract consideration is estimated and recognized over the contract term based on material units sold at its estimated per unit fee. Adoption of the new standard resulted in an increase in deferred revenue of $21.3 million offset by a reduction of retained earnings of $17.9 million, net of tax of $3.1 million, and unbilled receivables of $0.3 million as of January 1, 2018. The impact of the new standard to revenue for the three and six months ended June 30, 2018 was a decrease of $17.5 million and $42.1 million, respectively, from the amount that would have been recorded under the prior accounting standard. See Note 16 for further discussion. In February 2016, the FASB issued ASU No. 2016-02, Leases, In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments In October 2016, the FASB issued ASU No. 2016-16, Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory. Adoption of ASU 2016-16, beginning January 1, 2018, did not have any impact on the Company’s consolidated financial statements and related disclosures. In January 2017, the FASB issued ASU No. 2017-04, Intangibles – Goodwill and Other (Topic 350): Simplifying the Test of Goodwill Impairment In May 2017, the FASB issued ASU 2017-09, Compensation – Stock Compensation (Topic 718): Scope of Modification Accounting |
CASH, CASH EQUIVALENTS AND INVE
CASH, CASH EQUIVALENTS AND INVESTMENTS | 6 Months Ended |
Jun. 30, 2018 | |
Cash And Cash Equivalents [Abstract] | |
CASH, CASH EQUIVALENTS AND INVESTMENTS | 3. CASH, CASH EQUIVALENTS AND INVESTMENTS: The Company considers all highly liquid debt instruments purchased with an original maturity of three months or less to be cash equivalents. The Company classifies its remaining investments as available-for-sale. These securities are carried at fair market value, with unrealized gains and losses reported in shareholders’ equity. Gains or losses on securities sold are based on the specific identification method. Investments as of June 30, 2018 and December 31, 2017 consisted of the following (in thousands): Amortized Unrealized Aggregate Investment Classification Cost Gains (Losses) Market Value June 30, 2018 Certificates of deposit $ 1,250 $ — $ (1 ) $ 1,249 Corporate bonds 204,396 2 (63 ) 204,335 U.S. Government securities 173,093 — (110 ) 172,983 $ 378,739 $ 2 $ (174 ) $ 378,567 December 31, 2017 Certificates of deposit $ 1,296 $ 1 $ (1 ) $ 1,296 Corporate bonds 104,626 — (252 ) 104,374 U.S. Government securities 214,641 — (139 ) 214,502 $ 320,563 $ 1 $ (392 ) $ 320,172 As of June 30, 2018 and December 31, 2017, there was $24.9 million of government securities and $17.9 million of corporate bonds included in cash equivalents in the consolidated balance sheet, respectively. |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 6 Months Ended |
Jun. 30, 2018 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE MEASUREMENTS | 4. FAIR VALUE MEASUREMENTS: The following table provides the assets and liabilities carried at fair value measured on a recurring basis as of June 30, 2018 (in thousands): Fair Value Measurements, Using Total carrying value as of June 30, 2018 Quoted prices in active markets (Level 1) Significant other observable inputs (Level 2) Significant unobservable inputs (Level 3) Cash equivalents $ 39,051 $ 39,051 $ — $ — Short-term investments 353,651 353,651 — — Long-term investments — — — — The following table provides the assets and liabilities carried at fair value measured on a recurring basis as of December 31, 2017 (in thousands): Fair Value Measurements, Using Total carrying value as of December 31, 2017 Quoted prices in active markets (Level 1) Significant other observable inputs (Level 2) Significant unobservable inputs (Level 3) Cash equivalents $ 27,532 $ 27,532 $ — $ — Short-term investments 287,446 287,446 — — Long-term investments 14,794 14,794 — — Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2 inputs are quoted prices for similar assets and liabilities in active markets or inputs that are observable for the asset or liability, either directly or indirectly through market corroboration, for substantially the full term of the financial instrument. Level 3 inputs are unobservable inputs based on management’s own assumptions used to measure assets and liabilities at fair value. A financial asset’s or liability’s classification is determined based on the lowest level input that is significant to the fair value measurement. Changes in fair value of the investments are recorded as unrealized gains and losses in other comprehensive income. If a decline in fair value of an investment is deemed to be other than temporary, the cost of the Company’s investment will be written down by the amount of the other-than-temporary impairment with a resulting charge to net income. There were no other-than-temporary impairments of investments as of June 30, 2018 or December 31, 2017. |
INVENTORY
INVENTORY | 6 Months Ended |
Jun. 30, 2018 | |
Inventory Disclosure [Abstract] | |
INVENTORY | 5. INVENTORY: Inventory consisted of the following (in thousands): June 30, 2018 December 31, 2017 Raw materials $ 20,208 $ 17,464 Work-in-process 5,203 2,977 Finished goods 30,632 15,824 Inventory $ 56,043 $ 36,265 |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS | 6 Months Ended |
Jun. 30, 2018 | |
Finite Lived Intangible Assets Net [Abstract] | |
GOODWILL AND INTANGIBLE ASSETS | 6. GOODWILL AND INTANGIBLE ASSETS: The Company monitors the recoverability of goodwill annually or whenever events or changes in circumstances indicate the carrying value may not be recoverable. Purchased intangible assets subject to amortization consist primarily of acquired technology and other intangible assets that include trade names, customer relationships and developed IP processes. Acquired Technology Acquired technology consists of acquired license rights for patents and know-how obtained from PD-LD, Inc., Motorola, BASF SE (BASF) and Fujifilm. These intangible assets consist of the following (in thousands): June 30, 2018 PD-LD, Inc. $ 1,481 Motorola 15,909 BASF 95,989 Fujifilm 109,462 222,841 Less: Accumulated amortization (101,611 ) Acquired technology, net $ 121,230 Amortization expense related to acquired technology was $5.1 million for both three month periods ended June 30, 2018 and 2017, and $10.3 million for both six month periods ended June 30, 2018 and 2017. Amortization expense is included in amortization of acquired technology and other intangible assets expense line item on the consolidated statements of income and is expected to be $20.6 million in the year ending December 31, 2018, $20.5 million in each of the years ending December 31, 2019 through 2021, $15.8 million in the year ending December 31, 2022 and $33.6 million thereafter. Motorola Patent Acquisition In 2000, the Company entered into a royalty-bearing license agreement with Motorola whereby Motorola granted the Company perpetual license rights to what are now 74 issued U.S. patents relating to Motorola’s OLED technologies, together with foreign counterparts in various countries. These patents will all expire in the U.S. by the end of 2018. On March 9, 2011, the Company purchased these patents from Motorola, including all existing and future claims and causes of action for any infringement of the patents, pursuant to a Patent Purchase Agreement. The Patent Purchase Agreement effectively terminated the Company’s license agreement with Motorola, including any obligation to make royalty payments to Motorola. The technology acquired from Motorola is being amortized over a period of 7.5 years. Fujifilm Patent Acquisition On July 23, 2012, the Company entered into a Patent Sale Agreement with Fujifilm. Under the agreement, Fujifilm sold more than 1,200 OLED-related patents and patent applications in exchange for a cash payment of $105.0 million, plus costs incurred in connection with the purchase. The agreement contains customary representations and warranties and covenants, including respective covenants not to sue by both parties thereto. The agreement permitted the Company to assign all of its rights and obligations under the agreement to its affiliates, and the Company assigned, prior to the consummation of the transactions contemplated by the agreement, its rights and obligations to UDC Ireland Limited (UDC Ireland), a wholly-owned subsidiary of the Company formed under the laws of the Republic of Ireland. The transactions contemplated by the agreement were consummated on July 26, 2012. The Company recorded the $105.0 million plus $4.5 million of purchase costs as acquired technology, which is being amortized over a period of 10 years. BASF Patent Acquisition On June 28, 2016, UDC Ireland entered into and consummated an IP Transfer Agreement with BASF. Under the IP Transfer Agreement, BASF sold to UDC Ireland all of its rights, title and interest to certain of its owned and co-owned intellectual property rights relating to the composition of, development, manufacture and use of OLED materials, including OLED lighting and display stack technology, as well as certain tangible assets. The intellectual property includes knowhow and more than 500 issued and pending patents in the area of phosphorescent materials and technologies. These assets were acquired in exchange for a cash payment of €86.8 million ($95.8 million). In addition, UDC Ireland also took on certain rights and obligations under three joint research and development agreements to which BASF was a party. The IP Transfer Agreement also contains customary representations, warranties and covenants of the parties. UDC Ireland recorded the payment of €86.8 million ($95.8 million) and acquisition costs incurred of $217,000 as acquired technology which is being amortized over a period of 10 years. Other Intangible Assets As a result of the Adesis acquisition in June 2016, the Company recorded $16.8 million of other intangible assets, including $10.5 million assigned to customer relationships with a weighted average life of 11.5 years, $4.8 million of internally developed IP, processes and recipes with a weighted average life of 15 years, and $1.5 million assigned to trade name and trademarks with a weighted average life of 10 years. At June 30, 2018, these other intangible assets consist of the following (in thousands): Gross Carrying Amount Accumulated Amortization Net Carrying Amount Customer relationships $ 10,520 $ (1,768 ) $ 8,752 Developed IP, processes and recipes 4,820 (627 ) 4,193 Trade name/Trademarks 1,500 (292 ) 1,208 Total identifiable intangible assets $ 16,840 $ (2,687 ) $ 14,153 Amortization expense related to other intangible assets was $345,000 and $346,000 for the three months ended June 30, 2018 and 2017, respectively, and $687,000 and $688,000 for the six months ended June 30, 2018 and 2017, respectively. Amortization expense is included in the amortization of acquired technology and other intangible assets expense line item on the Consolidated Statements of Income and is expected to be $1.4 million for each of the next five fiscal years and $7.8 million thereafter. |
RESEARCH AND LICENSE AGREEMENTS
RESEARCH AND LICENSE AGREEMENTS WITH PRINCETON UNIVERSITY, UNIVERSITY OF SOUTHERN CALIFORNIA AND THE UNIVERSITY OF MICHIGAN | 6 Months Ended |
Jun. 30, 2018 | |
Research And Development [Abstract] | |
RESEARCH AND LICENSE AGREEMENTS WITH PRINCETON UNIVERSITY, UNIVERSITY OF SOUTHERN CALIFORNIA AND THE UNIVERSITY OF MICHIGAN | 7. RESEARCH AND LICENSE AGREEMENTS WITH PRINCETON UNIVERSITY, UNIVERSITY OF SOUTHERN CALIFORNIA AND THE UNIVERSITY OF MICHIGAN: The Company funded OLED technology research at Princeton University and, on a subcontractor basis, at the University of Southern California for 10 years under a Research Agreement executed with Princeton University in August 1997 (the 1997 Research Agreement). The principal investigator conducting work under the 1997 Research Agreement transferred to the University of Michigan in January 2006. Following this transfer, the 1997 Research Agreement was allowed to expire on July 31, 2007. As a result of the transfer, the Company entered into a new Sponsored Research Agreement with the University of Southern California to sponsor OLED technology research and, on a subcontractor basis, with the University of Michigan. This new Sponsored Research Agreement (as amended, the 2006 Research Agreement) was effective as of May 1, 2006 and had an original term of three years. On May 1, 2009, the Company amended the 2006 Research Agreement to extend the term of the agreement for an additional four years. The 2006 Research Agreement superseded the 1997 Research Agreement with respect to all work being performed at the University of Southern California and the University of Michigan. Payments under the 2006 Research Agreement were made to the University of Southern California on a quarterly basis as actual expenses were incurred. The Company incurred a total of $5.0 million in research and development expense for work performed under the 2006 Research Agreement during the extended term, which ended on April 30, 2013. Effective June 1, 2013, the Company amended the 2006 Research Agreement again to extend the term of the agreement for an additional four years. The Company incurred a total of $4.6 million in research and development expense for work performed under the 2006 Research Agreement during the extended term. Effective May 1, 2017, the Company amended the 2006 Research Agreement once again to extend the term of the agreement for an additional three years. As of June 30, 2018, in connection with this amendment, the Company was obligated to pay the University of Southern California up to $6.1 million for work to be performed during the remaining extended term, which expires April 30, 2020. From May 1, 2017 through June 30, 2018, the Company incurred $1.0 million in research and development expense for work performed under the 2006 Research Agreement. On October 9, 1997, the Company, Princeton University and the University of Southern California entered into an Amended License Agreement (as amended, the 1997 Amended License Agreement) under which Princeton University and the University of Southern California granted the Company worldwide, exclusive license rights, with rights to sublicense, to make, have made, use, lease and/or sell products and to practice processes based on patent applications and issued patents arising out of work performed by Princeton University and the University of Southern California under the 1997 Research Agreement. Under this 1997 Amended License Agreement, the Company is required to pay Princeton University royalties for licensed products sold by the Company or its sublicensees. For licensed products sold by the Company, the Company is required to pay Princeton University 3% of the net sales price of these products. For licensed products sold by the Company’s sublicensees, the Company is required to pay Princeton 3% of the revenues received by the Company from these sublicensees. These royalty rates are subject to renegotiation for products not reasonably conceivable as arising out of the 1997 Research Agreement if Princeton University reasonably determines that the royalty rates payable with respect to these products are not fair and competitive. The Company is obligated, under the 1997 Amended License Agreement, to pay to Princeton University minimum annual royalties. The minimum royalty payment is $100,000 per year. The Company recorded royalty expense in connection with this agreement of $1.6 million and $3.0 million for the three months ended June 30, 2018 and 2017, respectively, and $2.8 million and $4.6 million for the six months ended June 30, 2018 and 2017, respectively. The Company also is required, under the 1997 Amended License Agreement, to use commercially reasonable efforts to bring the licensed OLED technology to market. However, this requirement is deemed satisfied if the Company invests a minimum of $800,000 per year in research, development, commercialization or patenting efforts respecting the patent rights licensed to the Company. In connection with entering into the 2006 Research Agreement, the Company amended the 1997 Amended License Agreement to include the University of Michigan as a party to that agreement effective as of January 1, 2006. Under this amendment, Princeton University, the University of Southern California and the University of Michigan have granted the Company a worldwide exclusive license, with rights to sublicense, to make, have made, use, lease and/or sell products and to practice processes based on patent applications and issued patents arising out of work performed under the 2006 Research Agreement. The financial terms of the 1997 Amended License Agreement were not impacted by this amendment. |
EQUITY AND CASH COMPENSATION UN
EQUITY AND CASH COMPENSATION UNDER THE PPG AGREEMENTS | 6 Months Ended |
Jun. 30, 2018 | |
Long Term Commitment Excluding Unconditional Purchase Obligation [Abstract] | |
EQUITY AND CASH COMPENSATION UNDER THE PPG AGREEMENTS | 8. EQUITY AND CASH COMPENSATION UNDER THE PPG AGREEMENTS: On September 22, 2011, the Company entered into an Amended and Restated OLED Materials Supply and Service Agreement with PPG Industries (the New OLED Materials Agreement), which replaced the original OLED Materials Agreement with PPG Industries effective as of October 1, 2011. The term of the New OLED Materials Agreement ran through December 31, 2015 and shall be automatically renewed for additional one year terms, unless terminated by the Company by providing prior notice of one year or terminated by PPG by providing prior notice of two years. The agreement was automatically renewed through December 31, 2018. The New OLED Materials Agreement contains provisions that are substantially similar to those of the original OLED Materials Agreement. Under the New OLED Materials Agreement, PPG Industries continues to assist the Company in developing its proprietary OLED materials and supplying the Company with those materials for evaluation purposes and for resale to its customers. Under the New OLED Materials Agreement, the Company compensates PPG Industries on a cost-plus basis for the services provided during each calendar quarter. The Company is required to pay for some of these services in all cash. Up to 50% of the remaining services are payable, at the Company’s sole discretion, in cash or shares of the Company’s common stock, with the balance payable in cash. The actual number of shares of common stock issuable to PPG Industries is determined based on the average closing price for the Company’s common stock during a specified number of days prior to the end of each calendar half-year period ending on March 31 and September 30. If, however, this average closing price is less than $20.00, the Company is required to compensate PPG Industries in cash. No shares were issued for services to PPG for the three or six months ended June 30, 2018 or 2017. The Company is also to reimburse PPG Industries for raw materials used for research and development. The Company records the purchases of these raw materials as a current asset until such materials are used for research and development efforts. The Company recorded a research and development credit of $161,000 and an expense of $143,000 for the three months ended June 30, 2018 and 2017, respectively, and expense of $200,000 and $247,000 for the six months ended June 30, 2018, respectively, in relation to the cash portion of the reimbursement of expenses and work performed by PPG Industries, excluding amounts paid for commercial chemicals. |
SHAREHOLDERS' EQUITY
SHAREHOLDERS' EQUITY | 6 Months Ended |
Jun. 30, 2018 | |
Equity [Abstract] | |
SHAREHOLDERS' EQUITY | 9. SHAREHOLDERS’ EQUITY: Common and Preferred Stock On June 21, 2018, the Company’s shareholders approved an amendment to the Company’s Amended and Restated Articles of Incorporation to increase the number of authorized shares of the Company’s common stock from 100,000,000 to 200,000,000. The amendment was filed with the Pennsylvania Department of State, and became effective on July 17, 2018. The Company is authorized to issue 200 million shares of $0.01 par value common stock and five million shares of $0.01 par value preferred stock. Each share of the Company’s common stock entitles the holder to one vote on all matters to be voted upon by the shareholders. As of June 30, 2018, the Company had issued 48,650,696 shares of common stock of which 47,289,059 were outstanding and had issued 200,000 shares of preferred stock, all of which were outstanding. During the three months ended June 30, 2018, the Company repurchased no shares and during the six months ended June 30, 2018, the Company repurchased 3,774 shares of $0.01 par value common treasury stock valued at $477,000. Scientific Advisory Board and Employee Awards During the first two quarters of 2018 and 2017, the Company granted a total of 2,456 and 5,590 shares, respectively, of fully vested common stock to employees and non-employee members of the Scientific Advisory Board for services performed in 2017 and 2016, respectively. The fair value of shares issued to members of the Scientific Advisory Board was $300,000 for both of the first two quarters of 2018 and 2017. No fully vested common stock was issued to employees during the first quarter of 2018 and the fair value of the shares issued to employees during the first quarter of 2017 was $165,000. In connection with the issuance of these employee grants during the first quarter of 2017, 605 shares, with fair value of $55,000, were withheld in satisfaction of employee tax withholding obligations. Dividends During the three months ended June 30, 2018, the Company declared and paid cash dividends of $0.06 per common share, or $2.8 million, and during the six months ended June 30, 2018, the Company declared and paid cash dividends of $0.12 per common share, or $5.7 million, on the Company’s outstanding common stock. On August 9, 2018, the Company’s Board of Directors declared a third quarter dividend of $0.06 per common share to be paid on September 28, 2018. All future dividends will be subject to the approval of the Company’s Board of Directors. |
ACCUMULATED OTHER COMPREHENSIVE
ACCUMULATED OTHER COMPREHENSIVE LOSS | 6 Months Ended |
Jun. 30, 2018 | |
Accumulated Other Comprehensive Income Loss Net Of Tax [Abstract] | |
ACCUMULATED OTHER COMPREHENSIVE LOSS | 10. ACCUMULATED OTHER COMPREHENSIVE LOSS: Amounts related to the changes in accumulated other comprehensive loss were as follows (in thousands): Unrealized gain (loss) on available-for-sale-securities Net unrealized gain (loss) on retirement plan (2) Change in cumulative foreign currency translation adjustment Total Affected line items in the consolidated statements of operations Balance December 31, 2017, net of tax $ (258 ) $ (11,169 ) $ (37 ) $ (11,464 ) Other comprehensive gain (loss) before reclassification 171 — (2 ) 169 Actuarial gain (loss) — — — — Reclassification to net income (1) — 844 — 844 Selling, general and administrative, research and development, and cost of sales Change during period 171 844 (2 ) 1,013 Balance June 30, 2018, net of tax $ (87 ) $ (10,325 ) $ (39 ) $ (10,451 ) Unrealized gain (loss) on available-for-sale-securities Net unrealized gain (loss) on retirement plan (2) Change in cumulative foreign currency translation adjustment Total Affected line items in the consolidated statements of operations Balance December 31, 2016, net of tax $ (246 ) $ (10,355 ) $ (65 ) $ (10,666 ) Other comprehensive gain (loss) before reclassification 90 — 25 115 Actuarial gain (loss) (1,662 ) — (1,662 ) Reclassification to net income (1) — 642 — 642 Selling, general and administrative, research and development, and cost of sales Change during period 90 (1,020 ) 25 (905 ) Balance June 30, 2017, net of tax $ (156 ) $ (11,375 ) $ (40 ) $ (11,571 ) (1) The Company reclassified amortization of prior service cost and actuarial loss for its retirement plan from accumulated other comprehensive loss to net income of $844,000 and $642,000 for the six months ended June 30, 2018 and 2017, respectively. (2) Refer to Note 12: Supplemental Executive Retirement Plan. |
STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION | 6 Months Ended |
Jun. 30, 2018 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
STOCK-BASED COMPENSATION | 11. STOCK-BASED COMPENSATION: The Company recognizes in the statements of income the grant-date fair value of equity based awards, such as shares issued under employee stock purchase plans, restricted stock awards, restricted stock units and performance unit awards issued to employees and directors. The grant-date fair value of stock awards is based on the closing price of the stock on the date of grant. The fair value of share-based awards is recognized as compensation expense on a straight-line basis over the requisite service period, net of forfeitures. The Company issues new shares upon the respective grant, exercise or vesting of share-based payment awards, as applicable. Performance unit awards are subject to either a performance-based or market-based vesting requirement. For performance-based vesting, the grant-date fair value of the award, based on fair value of the Company's common stock, is recognized over the service period based on an assessment of the likelihood that the applicable performance goals will be achieved, and compensation expense is periodically adjusted based on actual and expected performance. Compensation expense for performance unit awards with market-based vesting is calculated based on the estimated fair value as of the grant date utilizing a Monte Carlo simulation model and is recognized over the service period on a straight-line basis. Equity Compensation Plan The Equity Compensation Plan provides for the granting of incentive and nonqualified stock options, shares of common stock, stock appreciation rights and performance units to employees, directors and consultants of the Company. Stock options are exercisable over periods determined by the Compensation Committee, but for no longer than 10 years from the grant date. Through June 30, 2018, the Company’s shareholders have approved increases in the number of shares reserved for issuance under the Equity Compensation Plan to 10,500,000, and have extended the term of the plan through 2024. As of June 30, 2018, there were 2,417,626 shares that remained available to be granted under the Equity Compensation Plan. Stock Awards Restricted Stock Awards and Units The Company has issued restricted stock awards and units to employees and non-employees with vesting terms of one to six years. The fair value is equal to the market price of the Company’s common stock on the date of grant for awards granted to employees and equal to the market price at the end of the reporting period for unvested non-employee awards or upon the date of vesting for vested non-employee awards. Expense for restricted stock awards and units is amortized ratably over the vesting period for the awards issued to employees and using a graded vesting method for the awards issued to non-employees. During the six months ended June 30, 2018, the Company granted 38,442 shares of restricted stock awards and restricted stock units to employees and non-employees, which had a total fair value of $4.7 million on the respective dates of grant, and will vest over three to five years from the date of grant, provided that the grantee is still an employee of the Company or is still providing services to the Company on the applicable vesting date. For the three months ended June 30, 2018 and 2017, the Company recorded, as compensation charges related to all restricted stock awards and units to employees and non-employees, selling, general and administrative expense of $1.9 million and $2.1 million, respectively, research and development expense of $509,000 and $419,000, respectively, and cost of sales of $186,000 and $96,000, respectively. For the six months ended June 30, 2018 and 2017, the Company recorded, as compensation charges related to all restricted stock awards and units to employees and non-employees, selling, general, and administrative expense of $3.5 million and $4.1 million, respectively, research and development expense of $934,000 and $786,000, respectively, and cost of sales of $347,000 and $190,000, respectively. In connection with the vesting of restricted stock awards and units during the three months ended June 30, 2018 and 2017, 52,874 and 50,630 shares, with aggregate fair values of $5.2 million and $4.3 million, respectively, were withheld in satisfaction of tax withholding obligations. For the six months ended June 30, 2018 and 2017, 80,147 and 81,343 shares, with aggregate fair values of $8.6 million and $6.8 million, respectively, were withheld in satisfaction of tax withholding obligations. For the three months ended June 30, 2018 and 2017, the Company recorded as compensation charges related to all restricted stock units to non-employee members of the Scientific Advisory Board, research and development expense of $41,000 and $175,000, respectively. For the six months ended June 30, 2018 and 2017, the Company recorded as compensation charges related to all restricted stock units to non-employee members of the Scientific Advisory Board, research and development credit of $116,000 and expense of $445,000, respectively. Board of Directors Compensation The Company has granted restricted stock units to non-employee members of the Board of Directors with quarterly vesting over a period of approximately one year. The fair value is equal to the market price of the Company's common stock on the date of grant. The restricted stock units are issued and expense is recognized ratably over the vesting period. For the three months ended June 30, 2018 and 2017, the Company recorded compensation charges for services performed, related to all restricted stock units granted to non-employee members of the Board of Directors, selling, general and administrative expense of $1.1 million and $444,000, respectively. For the six months ended June 30, 2018 and 2017, the Company recorded compensation charges for services performed, related to all restricted stock units granted to non-employee members of the Board of Directors, selling, general and administrative expense of $2.1 million and $883,000, respectively. In connection with the vesting of the restricted stock, the Company issued 12,500 and 15,000 shares, during the six months ended June 30, 2018 and 2017, respectively, to non-employee members of the Board of Directors. Performance Unit Awards During the six months ended June 30, 2018, the Company granted 12,047 performance units, of which 6,022 are subject to a performance-based vesting and 6,025 are subject to a market-based vesting requirement and will vest over the terms described below. Total fair value of the performance unit awards granted was $1.4 million on the date of grant. Each performance unit award is subject to both a performance-vesting requirement (either performance-based or market-based) and a service-vesting requirement. The performance-based vesting requirement is tied to the Company's cumulative revenue growth compared to the cumulative revenue growth of companies comprising the Nasdaq Electronics Components Index, as measured over a specific performance period. The market-based vesting requirement is tied to the Company's total shareholder return relative to the total shareholder return of companies comprising the Nasdaq Electronics Components Index, as measured over a specific performance period. The maximum number of performance units that may vest based on performance is two times the shares granted. Further, if the Company's total shareholder return is negative, the performance units may not vest at all. For the three months ended June 30, 2018 and 2017, the Company recorded selling, general and administrative expense of $519,000 and credit of $279,000, respectively, research and development expense of $128,000 and credit of $87,000, respectively, and cost of sales of $56,000 and credit of $29,000, respectively, related to performance units. For the six months ended June 30, 2018 and 2017, the Company recorded selling, general and administrative expense of $945,000 and $161,000, respectively, research and development expense of $232,000 and $28,000, respectively, and cost of sales of $100,000 and $16,000, respectively, related to performance units. In connection with the vesting of performance units during the six months ended June 30, 2018 and 2017, 25,208 and 19,217 shares with an aggregate fair value of $2.9 million and $1.6 million, respectively, were withheld in satisfaction of tax withholding obligations. Employee Stock Purchase Plan On April 7, 2009, the Board of Directors of the Company adopted an Employee Stock Purchase Plan (ESPP). The ESPP was approved by the Company’s shareholders and became effective on June 25, 2009. The Company has reserved 1,000,000 shares of common stock for issuance under the ESPP. Unless terminated by the Board of Directors, the ESPP will expire when all reserved shares have been issued. Eligible employees may elect to contribute to the ESPP through payroll deductions during consecutive three-month purchase periods. Each employee who elects to participate will be deemed to have been granted an option to purchase shares of the Company’s common stock on the first day of the purchase period. Unless the employee opts out during the purchase period, the option will automatically be exercised on the last day of the period, which is the purchase date, based on the employee’s accumulated contributions to the ESPP. The purchase price will equal 85% of the lesser of the closing price per share of common stock on the first day of the period or the last business day of the period. Employees may allocate up to 10% of their base compensation to purchase shares of common stock under the ESPP; however, each employee may purchase no more than 12,500 shares on a given purchase date, and no employee may purchase more than $25,000 of common stock under the ESPP during a given calendar year. During the six months ended June 30, 2018 and 2017, the Company issued 5,532 and 5,928 shares, respectively, of its common stock under the ESPP, resulting in proceeds of $434,000 and $349,000, respectively. For the three months ended June 30, 2018 and 2017, the Company recorded charges of $24,000 and $21,000, respectively, to selling, general and administrative expense, $33,000 and $23,000, respectively, to research and development expense, and $19,000 and $13,000, respectively, to cost of sales related to the ESPP equal to the amount of the discount and the value of the look-back feature. For the six months ended June 30, 2018 and 2017, the Company recorded charges of $41,000 and $36,000, respectively, to selling, general and administrative expense, $56,000 and $47,000, respectively, to research and development expense, and $33,000 and $18,000, respectively, to cost of sales related to the ESPP equal to the amount of the discount and the value of the look-back feature. |
SUPPLEMENTAL EXECUTIVE RETIREME
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN | 6 Months Ended |
Jun. 30, 2018 | |
Defined Benefit Pension Plans And Defined Benefit Postretirement Plans Disclosure [Abstract] | |
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN | 12. SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN: On March 18, 2010, the Compensation Committee and the Board of Directors of the Company approved and adopted the Universal Display Corporation Supplemental Executive Retirement Plan (SERP), effective as of April 1, 2010. On March 3, 2015, the Compensation Committee and the Board of Directors amended the SERP to include salary and bonus as part of the plan. Prior to this amendment, the SERP benefit did not take into account any bonuses. This change increased the liability for certain participants in the SERP. The purpose of the SERP, which is unfunded, is to provide certain of the Company’s key employees with supplemental retirement benefits following a cessation of their employment and to encourage their continued employment with the Company. As of June 30, 2018, there were seven participants in the SERP. The Company records amounts relating to the SERP based on calculations that incorporate various actuarial and other assumptions, including discount rates, rate of compensation increases, retirement dates and life expectancies. The net periodic costs are recognized as employees render the services necessary to earn the SERP benefits. The components of net periodic pension cost were as follows (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2018 2017 2018 2017 Service cost $ 325 $ 302 $ 650 $ 603 Interest cost 262 252 524 494 Amortization of prior service cost 421 415 842 830 Amortization of loss 118 114 236 161 Total net periodic benefit cost $ 1,126 $ 1,083 $ 2,252 $ 2,088 |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 6 Months Ended |
Jun. 30, 2018 | |
Commitments And Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | 13. COMMITMENTS AND CONTINGENCIES: Commitments Under the 2006 Research Agreement with USC, the Company is obligated to make certain payments to USC based on work performed by USC under that agreement, and by Michigan under its subcontractor agreement with USC. See Note 7 for further explanation. Under the terms of the 1997 Amended License Agreement, the Company is required to make minimum royalty payments to Princeton. See Note 7 for further explanation. The Company has agreements with six executive officers and one employee which provide for certain cash and other benefits upon termination of employment of the officer in connection with a change in control of the Company. If the executive’s employment is terminated in connection with the change in control, the executive is entitled to a lump-sum cash payment equal to two times the sum of the average annual base salary and bonus of the officer and immediate vesting of all stock options and other equity awards that may be outstanding at the date of the change in control, among other items. In order to manage manufacturing lead times and help ensure adequate material supply, the Company entered into an OLED Materials Agreement (see Note 8) that allows PPG Industries to procure and produce inventory based upon criteria as defined by the Company. These purchase commitments consist of firm, noncancelable and unconditional commitments. In certain instances, this agreement allows the Company the option to reschedule and adjust the Company’s requirements based on its business needs prior to firm orders being placed. As of June 30, 2018 and December 31, 2017, the Company had purchase commitments for inventory of $21.3 million and $14.2 million, respectively. Patent Related Challenges and Oppositions Each major jurisdiction in the world that issues patents provides both third parties and applicants an opportunity to seek a further review of an issued patent. The process for requesting and considering such reviews is specific to the jurisdiction that issued the patent in question, and generally does not provide for claims of monetary damages or a review of specific claims of infringement. The conclusions made by the reviewing administrative bodies tend to be appealable and generally are limited in scope and applicability to the specific claims and jurisdiction in question. The Company believes that opposition proceedings are frequently commenced in the ordinary course of business by third parties who may believe that one or more claims in a patent do not comply with the technical or legal requirements of the specific jurisdiction in which the patent was issued. The Company views these proceedings as reflective of its goal of obtaining the broadest legally permissible patent coverage permitted in each jurisdiction. Once a proceeding is initiated, as a general matter, the issued patent continues to be presumed valid until the jurisdiction’s applicable administrative body issues a final non-appealable decision. Depending on the jurisdiction, the outcome of these proceedings could include affirmation, denial or modification of some or all of the originally issued claims. The Company believes that as OLED technology becomes more established and its patent portfolio increases in size, so will the number of these proceedings. Below are summaries of certain active proceedings that have been commenced against issued patents that are either exclusively licensed to the Company or which are now assigned to the Company. The Company does not believe that the confirmation, loss or modification of the Company’s rights in any individual claim or set of claims that are the subject of the following legal proceedings would have a material impact on the Company’s materials sales or licensing business or on the Company’s consolidated financial statements, including its consolidated statements of income, as a whole. However, as noted within the descriptions, some of the following proceedings involve issued patents that relate to the Company’s fundamental phosphorescent OLED technologies and the Company intends to vigorously defend against claims that, in the Company’s opinion, seek to restrict or reduce the scope of the originally issued claim, which may require the expenditure of significant amounts of the Company’s resources. In certain circumstances, when permitted, the Company may also utilize the proceedings to request modification of the claims to better distinguish the patented invention from any newly identified prior art and/or improve the claim scope of the patent relative to commercially important categories of the invention. The entries marked with an "*" relate to the Company’s UniversalPHOLED® phosphorescent OLED technology, some of which may be commercialized by the Company. Opposition to European Patent No. 1390962 On November 16, 2011, Osram AG and BASF SE each filed a Notice of Opposition to European Patent No. 1390962 (EP '962 patent), which relates to the Company’s white phosphorescent OLED technology. The EP '962 patent, which was issued on February 16, 2011, is a European counterpart patent to U.S. patents 7,009,338 and 7,285,907. They are exclusively licensed to the Company by Princeton, and the Company is required to pay all legal costs and fees associated with this proceeding. The EPO combined the oppositions into a single opposition proceeding, and a hearing on this matter was held in December 2015, wherein the EPO Opposition Division revoked the patent claims for alleged insufficiencies under EPC Article 83. The Company believes the EPO's decision relating to the original claims is erroneous, and has appealed the decision. Subsequent to the filing of the appeal, BASF withdrew its opposition to the patent. The patent, as originally granted, is deemed valid during the pendency of the appeals process. At this time, based on its current knowledge, the Company believes that the patent being challenged should be declared valid, and that all or a significant portion of the Company's claims should be upheld. However, the Company cannot make any assurances of this result. Opposition to European Patent No. 1933395* On February 24 and 27, 2012, Sumitomo, Merck Patent GmbH and BASF SE filed oppositions to the Company's European Patent No. 1933395 (the EP '395 patent). The EP ‘395 patent is a counterpart to the EP ‘637 patent, and, in part, to U.S. Patents 7,001,536, 6,902,830, and 6,830,828, and to JP patents 4358168 and 4357781. This patent is exclusively licensed to the Company by Princeton, and the Company is required to pay all legal costs and fees associated with this proceeding. At an Oral Hearing on October 14, 2013, the EPO panel issued a decision that affirmed the basic invention and broad patent coverage in the EP '395 patent, but narrowed the scope of the original claims. On February 26, 2014, the Company appealed the ruling to reinstate a broader set of claims. The patent, as originally granted by the EPO, is deemed to be valid during the pendency of an appeals process. Two of the three opponents also filed their own appeals of the ruling. In January 2015, Sumitomo withdrew its opposition of the '395 patent, and the EPO accepted the withdrawal notice. The appeal proceedings were held in the second quarter of 2016. As a result of the proceedings, the board concluded the oral proceedings and proposed to reinstate a broader set of claims pending the resolution of a remaining question of the applicable law, a question that the board has deferred to the Enlarged Board of Appeals for review. In December 2017, the Enlarged Board of Appeals issued a written opinion in which it generally followed the Company’s reasoning regarding the question of law. The Company expects the written opinion to be used as guidance by the EPO opposition panel when the oral proceedings are rescheduled. The originally-granted claims remain in force during the pendency of this process. In addition to the above proceedings and now concluded proceedings which have been referenced in prior filings, from time to time, the Company may have other proceedings that are pending which relate to patents the Company acquired as part of the Fujifilm patent or BASF OLED patent acquisitions or which relate to technologies that are not currently widely utilized in the marketplace. |
CONCENTRATION OF RISK
CONCENTRATION OF RISK | 6 Months Ended |
Jun. 30, 2018 | |
Risks And Uncertainties [Abstract] | |
CONCENTRATION OF RISK | 14. CONCENTRATION OF RISK: Revenues and accounts receivable from the Company's largest customers were as follows (in thousands): % of Revenues for the three months ended June 30, % of Revenues for the six months ended June 30, Accounts Receivable as of Customer 2018 2017 2018 2017 June 30, 2018 A 42% 17% 48% 23% $ 15,199 B 33% 73% 26% 66% $ 3,811 C 9% 1% 9% 1% $ 4,304 Revenues from outside of North America represented approximately 93% and 98% of consolidated revenue for the three months ended June 30, 2018 and 2017, respectively, and 94% and 97% of consolidated revenue for the six months ended June 30, 2018 and 2017, respectively. Revenues by geographic area are as follows (in thousands): Three Months Ended June 30, Six Months Ended June 30, Country 2018 2017 2018 2017 South Korea $ 42,132 $ 92,206 $ 72,906 $ 140,134 China 8,479 5,414 17,331 7,896 Japan 686 2,044 1,561 3,128 Other non-U.S. locations 1,061 822 1,622 1,534 Total non-U.S. locations $ 52,358 $ 100,486 $ 93,420 $ 152,692 United States 3,791 2,027 6,301 5,387 Total revenue $ 56,149 $ 102,513 $ 99,721 $ 158,079 The Company attributes revenue to different geographic areas on the basis of the location of the customer. Long-lived assets (net), by geographic area are as follows (in thousands): June 30, 2018 December 31, 2017 United States $ 59,483 $ 53,991 Other 2,865 2,459 Total long-lived assets $ 62,348 $ 56,450 Substantially all chemical materials were purchased from one supplier. See Note 8. |
INCOME TAXES
INCOME TAXES | 6 Months Ended |
Jun. 30, 2018 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | 15. The Company is subject to income taxes in both the United States and foreign jurisdictions. The effective income tax rate was an expense of 14.6% and 8.9%, respectively, for the three and six months ended June 30, 2018. The Company recorded an income tax expense of $1.9 million and $1.6 million, respectively, for the three and six months ended June 30, 2018. The recorded amounts include deductions for employee share awards in excess of compensation costs (“windfalls”) under ASU No. 2016-09 of $448,000 and $1.7 million, respectively, for the three and six months ended June 30, 2018. The effective income tax rate was an expense of 23.0% and 22.3%, respectively, for the three and six months ended June 30, 2017. The Company recorded an income tax expense of $14.1 million and $16.5 million, respectively, for the three and six months ended June 30, 2017. The recorded amounts include deductions for employee share awards in excess of compensation costs (“windfalls”) under ASU No. 2016-09 of $1.2 million and $2.4 million, respectively, for the three and six months ended June 30, 2017. In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent on the Company's ability to generate future taxable income to obtain benefit from the reversal of temporary differences, net operating loss carryforwards and tax credits. As part of its assessment management considers the scheduled reversal of deferred tax liabilities, projected future taxable income, and tax planning strategies. At this time there is no evidence to release the valuation allowances that relate to UDC Ireland and New Jersey research and development credit. On November 27, 2014, in a case where the Company was not a party, the Korean Supreme Court concluded that royalties received by a U.S. corporation from a Korean corporation for the license of patents registered abroad but not in Korea do not constitute domestic-source income as defined in the Korea/U.S. Tax Treaty. As a result of this decision, the Company filed amended withholding tax returns for the years 2011 through June 2015. These returns were rejected by the Korean National Tax Service (KNTS) and subsequently by the Korean Tax Tribunal. The Company has also filed additional amended returns through December 31, 2017. Concurrent with filing the original amended returns with KNTS, the Company filed a request with the IRS for Competent Authority for a bilateral agreement between the United States and Korea to clarify the treaty provisions. This Mutual Agreement Procedure (MAP) was accepted by KNTS on September 15, 2017. Once invoked, the Company can postpone the filing of additional appeals until the MAP process is complete. As a result of recent developments and discussions with the Company’s outside tax advisors, the Company believes that it is now more-likely-than-not that a favorable settlement will be reached resulting in a reduction of the Korean withholding taxes previously withheld since 2011. A long-term receivable of $37.5 million for estimated refunds due from the Korean government, a long-term payable of $18.3 million for estimated amounts due to the U.S. Federal government based on amendment of prior year U.S. tax returns for the lower withholding amounts, and a reduction of deferred tax assets for foreign tax credits and R&D credits of $19.2 million has been recorded on the June 30, 2018 financial statements for this matter. These estimates may change in the future and ultimately upon settlement of the uncertain tax position. |
REVENUE RECOGNITION
REVENUE RECOGNITION | 6 Months Ended |
Jun. 30, 2018 | |
Revenue From Contract With Customer [Abstract] | |
REVENUE RECOGNITION | 16. REVENUE RECOGNITION: Adoption of ASC Topic 606, “Revenue from Contracts with Customers” The Company adopted the standard beginning January 1, 2018 using the “modified retrospective” approach, meaning the standard was applied only to the most current period presented in the financial statements, with a cumulative adjustment to retained earnings. Under this transition method, the Company elected to apply ASC Topic 606 only to contracts that are not complete at the initial adoption date. The new standard impacts how the Company recognizes revenue on its commercial license and material supply agreements with customers. Previously, the Company recognized license fees on a straight-line basis or as received from the customer, and royalty revenue one quarter in arrears based on sales information received from its customers typically received after disclosing that quarter’s results. Under the new standard, total contract consideration is estimated and recognized over the contract term based on material units sold at its estimated per unit fee. Total contract consideration includes fixed amounts designated in contracts with customers as license fees as well as estimates of material fees and royalties to be earned. Adoption of the new standard resulted in an increase in deferred revenue of $21.3 million offset by a reduction of retained earnings of $17.9 million, net of tax of $3.1 million, and unbilled receivables of $0.3 million as of January 1, 2018. The impact of the new standard to revenue for the three and six months ended June 30, 2018 was a decrease of $17.5 million and $42.1 million, respectively, from the amount that would have been reported under the prior accounting standard. The following tables summarize the impacts of adopting Topic 606 on the Company’s consolidated financial statements for the three and six months ended June 30, 2018. i. Consolidated Balance Sheet (in thousands) Impact of changes in accounting policies June 30, 2018 As reported Adjustment Balances without adoption of Topic 606 ASSETS Other assets (current and non-current) $ 60,395 $ (2,246 ) $ 58,149 Deferred income taxes 10,534 (10,970 ) (436 ) TOTAL ASSETS 833,249 (13,216 ) 820,033 LIABILITIES AND SHAREHOLDERS' EQUITY Deferred revenue (current and non-current) 97,591 (65,368 ) 32,223 Retained earnings 92,346 52,152 144,498 TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY 833,249 (13,216 ) 820,033 ii. Consolidated Statements of Income (in thousands) Impact of changes in accounting policies Three Months Ended June 30, 2018 As reported Adjustment Balances without adoption of Topic 606 REVENUE $ 56,149 $ 17,470 $ 73,619 Gross margin 44,514 17,470 61,984 OPERATING INCOME 10,911 17,470 28,381 INCOME BEFORE INCOME TAXES 12,665 17,470 30,135 INCOME TAX EXPENSE (1,851 ) (3,180 ) (5,031 ) NET INCOME 10,814 14,290 25,104 Impact of changes in accounting policies Six Months Ended June 30, 2018 As reported Adjustment Balances without adoption of Topic 606 REVENUE $ 99,721 $ 42,123 $ 141,844 Gross margin 80,628 42,123 122,751 OPERATING INCOME 15,430 42,123 57,553 INCOME BEFORE INCOME TAXES 18,408 42,123 60,531 INCOME TAX EXPENSE (1,635 ) (7,864 ) (9,499 ) NET INCOME 16,773 34,259 51,032 iii. Consolidated Statement of Cash Flows (in thousands) Impact of changes in accounting policies Six Months Ended June 30, 2018 As reported Adjustment Balances without adoption of Topic 606 Net income $ 16,773 $ 34,259 $ 51,032 Amortization of deferred revenue and unbilled receivables recognized (29,266 ) (47,475 ) (76,741 ) Deferred income tax expense 19,312 10,970 30,282 Other assets (current and non-current) (28,633 ) 2,246 (26,387 ) CASH FLOW FROM OPERATING ACTIVITIES 49,952 - 49,952 For the three months ended June 30, 2018 and 2017, the Company recorded 93% and 98% of its revenue from sales of materials and 7% and 2% from the providing of services through Adesis, respectively. For the six months ended June 30, 2018 and 2017, the Company recorded 94% and 98% of its revenue from sales of materials and 6% and 2% from the providing of services through Adesis, respectively. The rights and benefits to the Company’s OLED technology are conveyed to the customer through technology license agreements and material supply agreements. The Company believes that the licenses and materials sold under these combined agreements are not distinct from each other for financial reporting purposes and as such, are accounted for as a single performance obligation. Accordingly, total contract consideration, including material, license and royalty fees, is estimated and recognized over the contract term based on material units sold at the estimated per unit fee over the life of the contract. Various estimates are relied upon to recognize revenue. The Company estimates total material units to be purchased by its customers over the contract term based on historical trends, industry estimates and its forecast process. Additionally, management estimates the total sales-based royalties based on the estimated net sales revenue of its customers over the contract term. Management is using the expected value method to estimate the material per unit fee. Contract Balances The following table provides information about assets and liabilities associated with our contracts from customers (in thousands): As of June 30, 2018 Accounts receivable $ 35,583 Short-term unbilled receivables 1,047 Long-term unbilled receivables 1,571 Short-term deferred revenue 69,247 Long-term deferred revenue 28,344 Short-term and long-term unbilled receivables are classified as other current assets and other assets, respectively, on the Consolidated Balance Sheet. The deferred revenue balance at June 30, 2018 will be recognized as materials are shipped to customers over the remaining contract periods. The significant customer contracts (individually representing greater than 10% of revenue) expire in 2022. As of June 30, 2018, the Company had $15.4 million of backlog associated with committed purchase orders from its customers for phosphorescent emitter material. These orders are anticipated to be fulfilled within the next 90 days. Significant changes in the unbilled receivables and deferred liabilities balances during the period are as follows (in thousands): Six Months Ended June 30, 2018 Unbilled Receivables Increase (Decrease) Deferred Revenue (Increase) Decrease Balance at December 31, 2017 $ 70 $ (38,883 ) Adoption of revenue standard on January 1, 2018 307 (21,307 ) Adjusted balance on January 1, 2018 377 (60,190 ) Revenue recognized that was previously included in deferred revenue — 22,669 Increases due to cash received — (64,423 ) Cumulative catch-up adjustment arising from changes in estimates of transaction price — 4,353 Unbilled receivables recognized 2,241 — Transferred to receivables from unbilled receivables — — Net change 2,241 (37,401 ) Balance at June 30, 2018 $ 2,618 $ (97,591 ) |
NET INCOME PER COMMON SHARE
NET INCOME PER COMMON SHARE | 6 Months Ended |
Jun. 30, 2018 | |
Earnings Per Share [Abstract] | |
NET INCOME PER COMMON SHARE | 17. NET INCOME PER COMMON SHARE: The Company computes earnings per share in accordance with ASC Topic 260, Earnings per Share Basic net income per common share is computed by dividing net income allocated to common shareholders by the weighted-average number of shares of common stock outstanding for the period excluding unvested restricted stock units and performance units. Net income allocated to the holders of the Company's unvested restricted stock awards is calculated based on the shareholder’s proportionate share of weighted average shares of common stock outstanding on an if-converted basis. For purposes of determining diluted net income per common share, basic net income per share is further adjusted to include the effect of potential dilutive common shares outstanding, including stock options, restricted stock units and performance units, and the impact of shares to be issued under the ESPP. The following table is a reconciliation of net income and the shares used in calculating basic and diluted net income per common share for the three and six months ended June 30, 2018 and 2017 (in thousands, except share and per share data): Three Months Ended June 30, Six Months Ended June 30, 2018 2017 2018 2017 Numerator: Net income $ 10,814 $ 47,187 $ 16,773 $ 57,552 Adjustment for Basic EPS: Earnings allocated to unvested shareholders (122 ) (727 ) (217 ) (972 ) Adjusted net income $ 10,692 $ 46,460 $ 16,556 $ 56,580 Denominator: Weighted average common shares outstanding – Basic 46,868,999 46,742,746 46,826,314 46,702,376 Effect of dilutive shares: Common stock equivalents arising from stock options and ESPP 709 1,450 1,237 2,324 Restricted stock awards and units and performance units 31,390 66,042 45,558 76,420 Weighted average common shares outstanding – Diluted 46,901,098 46,810,238 46,873,109 46,781,120 Net income per common share: Basic $ 0.23 $ 0.99 $ 0.35 $ 1.21 Diluted $ 0.23 $ 0.99 $ 0.35 $ 1.21 For the three months ended June 30, 2018 and 2017, the combined effects of unvested restricted stock awards, restricted stock units, performance unit awards and stock options of 7,513 and none, respectively, were excluded from the calculation of diluted EPS as their impact would have been antidilutive. For the six months ended June 30, 2018 and 2017, the combined effects of unvested restricted stock awards, restricted stock units, performance unit awards and stock options of 3,541 and none, respectively, were excluded from the calculation of diluted EPS as their impact would have been antidilutive. The impact of shares to be issued under the ESPP, which was not significant, was excluded from the calculation of diluted EPS as their impact would have been antidilutive. |
SUMMARY OF SIGNIFICANT ACCOUN27
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 6 Months Ended |
Jun. 30, 2018 | |
Accounting Policies [Abstract] | |
Basis of Accounting | Interim Financial Information In the opinion of management, the accompanying unaudited consolidated financial statements contain all adjustments (consisting of only normal recurring adjustments) necessary to present fairly the Company’s financial position as of June 30, 2018 and results of operations for the three and six months ended June 30, 2018 and 2017, and cash flows for the six months ended June 30, 2018 and 2017. While management believes that the disclosures presented are adequate to make the information not misleading, these unaudited consolidated financial statements should be read in conjunction with the audited consolidated financial statements and the notes thereto in the Company’s latest year-end financial statements, which are included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017. The results of the Company’s operations for any interim period are not necessarily indicative of the results of operations for any other interim period or for the full year. |
Principles of Consolidation | Principles of Consolidation The consolidated financial statements include the accounts of Universal Display Corporation and its wholly owned subsidiaries, UDC, Inc., UDC Ireland Limited, Universal Display Corporation Hong Kong, Limited, Universal Display Corporation Korea, Y.H., Universal Display Corporation Japan GK, Universal Display Corporation China, Ltd. and Adesis, Inc. (Adesis). All intercompany transactions and accounts have been eliminated. |
Management's Use of Estimates | Management’s Use of Estimates The preparation of financial statements in conformity with U.S. generally accepted accounting principles (GAAP) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The estimates made are principally in the areas of revenue recognition including estimates of material unit sales and royalties, the useful life of acquired intangibles, the use and recoverability of inventories, intangibles and income taxes including realization of deferred tax assets, stock-based compensation and retirement benefit plan liabilities. Actual results could differ from those estimates. |
Inventories | Inventories Inventories consist of raw materials, work-in-process and finished goods, including inventory consigned to customers, and are stated at the lower of cost, determined on a first-in, first-out basis, or net realizable value. Inventory valuation and firm committed purchase order assessments are performed on a quarterly basis and those items that are identified to be obsolete or in excess of forecasted usage are written down to their estimated realizable value. Estimates of realizable value are based upon management’s analyses and assumptions, including, but not limited to, forecasted sales levels by product, expected product lifecycle, product development plans and future demand requirements. A 12-month rolling forecast based on factors, including, but not limited to, production cycles, anticipated product orders, marketing forecasts, backlog, and shipment activities is used in the inventory analysis. If market conditions are less favorable than forecasts or actual demand from customers is lower than estimates, additional inventory write-downs may be required. If demand is higher than expected, inventories that had previously been written down may be sold. Certain of the Company’s customers have assumed the responsibility for maintaining the Company's inventory at their location based on the customers’ demand forecast. Notwithstanding the fact that the Company builds and ships the inventory, the customer does not purchase the consigned inventory until the inventory is drawn or pulled by the customer to be used in the manufacture of the customer’s product. Though the consigned inventory may be at the customer’s physical location, it remains inventory owned by the Company until the inventory is drawn or pulled, which is the time at which the sale takes place. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The carrying values of accounts receivable, other current assets, and accounts payable approximate fair value in the accompanying financial statements due to the short-term nature of those instruments. The Company’s other financial instruments, which include cash equivalents and investments, are carried at fair value. |
Revenue Recognition and Deferred Revenue | Revenue Recognition and Deferred Revenue Material sales relate to the Company’s sale of its OLED materials for incorporation into its customers’ commercial OLED products or for their OLED development and evaluation activities. Material sales are recognized at the time title passes, which is typically at the time of shipment or at the time of delivery, depending upon the contractual agreement between the parties. The rights and benefits to the Company’s OLED technology are conveyed to the customer through technology license agreements and material supply agreements. These agreements are combined and the licenses and materials sold under these combined agreements are not distinct from each other for financial reporting purposes and as such, are accounted for as a single performance obligation. Accordingly, total contract consideration is estimated and recognized over the contract term based on material units sold during the period at their estimated per unit fee. Total contract consideration includes fixed amounts designated in contracts with customers as license fees as well as estimates of material fees and royalties to be earned. Various estimates are relied upon to recognize revenue. The Company estimates total material units to be purchased by its customers over the contract term based on historical trends, industry estimates and its forecast process and related amounts to be charged. Additionally, management estimates the total sales-based royalties based on the estimated net sales revenue of its customers over the contract term. Contract research services revenue is revenue earned by Adesis through performing organic and organometallic synthetics research, development and commercialization on a contractual basis. These services range from intermediates for structure-activity relationship studies, reference agents and building blocks for combinatorial synthesis, re-synthesis of key intermediates, specialty organic chemistry needs, and selective toll manufacturing. These services are provided to third-party pharmaceutical and life sciences firms and other technology firms at fixed costs or on an annual contract basis. Revenue is recognized as services are performed with billing schedules and payment terms negotiated on a contract-by-contract basis. Payments received in excess of revenue recognized are recorded as deferred revenue. In other cases, services may be provided and revenue is recognized before the client is invoiced. In these cases, revenue recognized will exceed amounts billed and the difference, representing amounts which are currently unbillable to the customer pursuant to contractual terms, is recorded as an unbilled receivable. Technology development and support revenue is revenue earned from government contracts, development and technology evaluation agreements and commercialization assistance fees, which includes reimbursements by government entities for all or a portion of the research and development costs the Company incurs in relation to its government contracts. Revenues are recognized proportionally as research and development costs are incurred, or as defined milestones are achieved, and are included in contract research services in the accompanying consolidated statements of income. Currently, the Company's most significant commercial license agreement is with Samsung Display Co., Ltd. (SDC). This agreement, which covers the manufacture and sale of specified OLED display materials, was effective as of January 1, 2018 and lasts through the end of 2022 with an additional two-year extension option. Under this agreement, the Company is being paid a license fee, payable in quarterly installments over the agreement term of five years. The agreement conveys to SDC the non-exclusive right to use certain of the Company's intellectual property assets for a limited period of time that is less than the estimated life of the assets. At the same time the Company entered into the current patent license agreement with SDC, the Company also entered into a new supplemental material purchase agreement with SDC. Under the current supplemental material purchase agreement, SDC agrees to purchase from the Company a minimum amount of phosphorescent emitter materials for use in the manufacture of licensed products. This minimum commitment is subject to SDC’s requirements for phosphorescent emitter materials and the Company’s ability to meet these requirements over the term of the supplemental agreement. In 2015, the Company entered into an OLED patent license agreement and an OLED commercial supply agreement with LG Display Co., Ltd. (LG Display) which were effective as of January 1, 2015 and superseded the existing 2007 commercial supply agreement between the parties. The new agreements have a term that is set to expire by the end of 2022. The patent license agreement provides LG Display a non-exclusive, royalty bearing portfolio license to make and sell OLED displays under the Company's patent portfolio. The patent license calls for license fees, prepaid royalties and running royalties on licensed products. The agreements include customary provisions relating to warranties, indemnities, confidentiality, assignability and business terms. The agreements provide for certain other minimum obligations relating to the volume of material sales anticipated over the life of the agreements as well as minimum royalty revenue to be generated under the patent license agreement. The Company expects to generate revenue under these agreements that are predominantly tied to LG Display’s sales of OLED licensed products. The OLED commercial supply agreement provides for the sale of materials for use by LG Display, which may include phosphorescent emitters and host materials. In 2016, the Company entered into long-term, multi-year OLED patent license and material purchase agreements with Tianma Micro-electronics Co., Ltd. (Tianma). Under the license agreement, the Company has granted Tianma non-exclusive license rights under various patents owned or controlled by the Company to manufacture and sell OLED display products. The license agreement calls for license fees and running royalties on licensed products. Additionally, the Company expects to supply phosphorescent OLED materials to Tianma for use in its licensed products. In 2017, the Company entered into long-term, multi-year agreements with BOE Technology Group Co., Ltd. (BOE). Under these agreements, the Company has granted BOE non-exclusive license rights under various patents owned or controlled by the Company to manufacture and sell OLED display products. The Company has also agreed to supply phosphorescent OLED materials to BOE. In 2018, the Company entered into long-term, multi-year OLED patent license and material purchase agreements with Visionox Technology, Inc. (Visionox). Under the license agreement, the Company has granted Visionox non-exclusive license rights under various patents owned or controlled by the Company to manufacture and sell OLED display products. The license agreement calls for license fees and running royalties on licensed products. Additionally, the Company expects to supply phosphorescent OLED materials to Visionox for use in its licensed products. The Company records taxes billed to customers and remitted to various governmental entities on a gross basis in both revenues and cost of material sales in the consolidated statements of income. The amounts of these pass through taxes reflected in revenues and cost of material sales were $23,000 and $29,000 for the three and six months ended June 30, 2018, respectively, and $151,000 and $207,000 for the three and six months ended June 30, 2017, respectively. All sales transactions are billed and due within 90 days and substantially all are transacted in U.S. dollars. |
Cost of Sales | Cost of Sales Cost of sales consists of labor and material costs associated with the production of materials processed at the Company's manufacturing partners and at the Company's internal manufacturing processing facility. The Company’s portion of cost of sales also includes depreciation of manufacturing equipment, as well as manufacturing overhead costs and inventory adjustments for excess and obsolete inventory. |
Research and Development | Research and Development Expenditures for research and development are charged to expense as incurred. |
Patent Costs | Patent Costs Costs associated with patent applications, patent prosecution, patent defense and the maintenance of patents are charged to expense as incurred. Costs to successfully defend a challenge to a patent are capitalized to the extent of an evident increase in the value of the patent. Costs that relate to an unsuccessful outcome are charged to expense. |
Amortization of Acquired Technology | Amortization of Acquired Technology Amortization costs relate to technology acquired from BASF, Fujifilm and Motorola. These acquisitions were completed in the years ended December 31, 2016, 2012 and 2011, respectively. Acquisition costs are being amortized over a period of 10 years for the BASF and Fujifilm patents and 7.5 years for the Motorola patents. |
Amortization of Other Intangible Assets | Amortization of Other Intangible Assets Other intangible assets from the Adesis acquisition are being amortized over a period of 10 to 15 years. See Note 6 for further discussion. |
Translation of Foreign Currency Financial Statements and Foreign Currency Transactions | Translation of Foreign Currency Financial Statements and Foreign Currency Transactions The Company's reporting currency is the U.S. dollar. The functional currency for the Company's Ireland subsidiary is also the U.S. dollar and the functional currency for each of the Company's Asia-Pacific foreign subsidiaries is its local currency. The Company translates the amounts included in the consolidated statements of income from its Asia-Pacific foreign subsidiaries into U.S. dollars at weighted-average exchange rates, which the Company believes are representative of the actual exchange rates on the dates of the transactions. The Company's foreign subsidiaries' assets and liabilities are translated into U.S. dollars from the local currency at the actual exchange rates as of the end of each reporting date, and the Company records the resulting foreign exchange translation adjustments in the consolidated balance sheets as a component of accumulated other comprehensive loss. The overall effect of the translation of foreign currency and foreign currency transactions to date has been insignificant. |
Income Taxes | Income Taxes Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. The Company recognizes the effect of income tax positions only if those positions are more likely than not of being sustained. Recognized income tax positions are measured at the largest amount of which the likelihood of realization is greater than 50%. Changes in recognition or measurement are reflected in the period in which the change in judgment occurs. The Company records interest and penalties, if any, related to unrecognized tax benefits as a component of tax expense. |
Share-Based Payment Awards | Share-Based Payment Awards The Company recognizes in the consolidated statements of income the grant-date fair value of equity based awards such as shares issued under employee stock purchase plans, restricted stock awards, restricted stock units and performance unit awards issued to employees and directors. The grant-date fair value of stock awards is based on the closing price of the stock on the date of grant. The fair value of share-based awards is recognized as compensation expense on a straight-line basis over the requisite service period, net of forfeitures. The Company issues new shares upon the respective grant, exercise or vesting of the share-based payment awards, as applicable. Performance unit awards are subject to either a performance-based or market-based vesting requirement. For performance-based vesting, the grant-date fair value of the award, based on fair value of the Company's common stock, is recognized over the service period based on an assessment of the likelihood that the applicable performance goals will be achieved and compensation expense is periodically adjusted based on actual and expected performance. Compensation expense for performance unit awards with market-based vesting is calculated based on the estimated fair value as of the grant date utilizing a Monte Carlo simulation model and is recognized over the service period on a straight-line basis. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (FASB) issued a new revenue recognition standard entitled Accounting Standards Codification (“ASC”) Topic 606, Revenue from Contracts with Customers The new standard impacts how the Company recognizes revenue on its commercial license and material supply agreements with customers. In addition, the Company previously recognized royalty revenue one quarter in arrears based on sales information received from its customers typically received after disclosing that quarter’s results. Under ASC Topic 606, royalties to be earned over the contract term are estimated as part of total contract consideration and recognized as noted below. The estimates are updated on a quarterly basis. The rights and benefits to the Company’s OLED technology are conveyed to the customer through technology license agreements and material supply agreements. These agreements are combined and the licenses and materials sold under these combined agreements are not distinct from each other for financial reporting purposes and as such, are accounted for as a single performance obligation. Accordingly, total contract consideration is estimated and recognized over the contract term based on material units sold at its estimated per unit fee. Adoption of the new standard resulted in an increase in deferred revenue of $21.3 million offset by a reduction of retained earnings of $17.9 million, net of tax of $3.1 million, and unbilled receivables of $0.3 million as of January 1, 2018. The impact of the new standard to revenue for the three and six months ended June 30, 2018 was a decrease of $17.5 million and $42.1 million, respectively, from the amount that would have been recorded under the prior accounting standard. See Note 16 for further discussion. In February 2016, the FASB issued ASU No. 2016-02, Leases, In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments In October 2016, the FASB issued ASU No. 2016-16, Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory. Adoption of ASU 2016-16, beginning January 1, 2018, did not have any impact on the Company’s consolidated financial statements and related disclosures. In January 2017, the FASB issued ASU No. 2017-04, Intangibles – Goodwill and Other (Topic 350): Simplifying the Test of Goodwill Impairment In May 2017, the FASB issued ASU 2017-09, Compensation – Stock Compensation (Topic 718): Scope of Modification Accounting |
CASH, CASH EQUIVALENTS AND IN28
CASH, CASH EQUIVALENTS AND INVESTMENTS (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Cash And Cash Equivalents [Abstract] | |
Schedule of Cash, Cash Equivalents and Investments | Investments as of June 30, 2018 and December 31, 2017 consisted of the following (in thousands): Amortized Unrealized Aggregate Investment Classification Cost Gains (Losses) Market Value June 30, 2018 Certificates of deposit $ 1,250 $ — $ (1 ) $ 1,249 Corporate bonds 204,396 2 (63 ) 204,335 U.S. Government securities 173,093 — (110 ) 172,983 $ 378,739 $ 2 $ (174 ) $ 378,567 December 31, 2017 Certificates of deposit $ 1,296 $ 1 $ (1 ) $ 1,296 Corporate bonds 104,626 — (252 ) 104,374 U.S. Government securities 214,641 — (139 ) 214,502 $ 320,563 $ 1 $ (392 ) $ 320,172 |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Fair Value Disclosures [Abstract] | |
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis | The following table provides the assets and liabilities carried at fair value measured on a recurring basis as of June 30, 2018 (in thousands): Fair Value Measurements, Using Total carrying value as of June 30, 2018 Quoted prices in active markets (Level 1) Significant other observable inputs (Level 2) Significant unobservable inputs (Level 3) Cash equivalents $ 39,051 $ 39,051 $ — $ — Short-term investments 353,651 353,651 — — Long-term investments — — — — The following table provides the assets and liabilities carried at fair value measured on a recurring basis as of December 31, 2017 (in thousands): Fair Value Measurements, Using Total carrying value as of December 31, 2017 Quoted prices in active markets (Level 1) Significant other observable inputs (Level 2) Significant unobservable inputs (Level 3) Cash equivalents $ 27,532 $ 27,532 $ — $ — Short-term investments 287,446 287,446 — — Long-term investments 14,794 14,794 — — |
INVENTORY (Tables)
INVENTORY (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventory | Inventory consisted of the following (in thousands): June 30, 2018 December 31, 2017 Raw materials $ 20,208 $ 17,464 Work-in-process 5,203 2,977 Finished goods 30,632 15,824 Inventory $ 56,043 $ 36,265 |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Finite Lived Intangible Assets Net [Abstract] | |
Schedule of Acquired Technology | These intangible assets consist of the following (in thousands): June 30, 2018 PD-LD, Inc. $ 1,481 Motorola 15,909 BASF 95,989 Fujifilm 109,462 222,841 Less: Accumulated amortization (101,611 ) Acquired technology, net $ 121,230 |
Schedule of Other Intangible Assets | At June 30, 2018, these other intangible assets consist of the following (in thousands): Gross Carrying Amount Accumulated Amortization Net Carrying Amount Customer relationships $ 10,520 $ (1,768 ) $ 8,752 Developed IP, processes and recipes 4,820 (627 ) 4,193 Trade name/Trademarks 1,500 (292 ) 1,208 Total identifiable intangible assets $ 16,840 $ (2,687 ) $ 14,153 |
ACCUMULATED OTHER COMPREHENSI32
ACCUMULATED OTHER COMPREHENSIVE LOSS (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Accumulated Other Comprehensive Income Loss Net Of Tax [Abstract] | |
Schedule of Accumulated Other Comprehensive Loss | Amounts related to the changes in accumulated other comprehensive loss were as follows (in thousands): Unrealized gain (loss) on available-for-sale-securities Net unrealized gain (loss) on retirement plan (2) Change in cumulative foreign currency translation adjustment Total Affected line items in the consolidated statements of operations Balance December 31, 2017, net of tax $ (258 ) $ (11,169 ) $ (37 ) $ (11,464 ) Other comprehensive gain (loss) before reclassification 171 — (2 ) 169 Actuarial gain (loss) — — — — Reclassification to net income (1) — 844 — 844 Selling, general and administrative, research and development, and cost of sales Change during period 171 844 (2 ) 1,013 Balance June 30, 2018, net of tax $ (87 ) $ (10,325 ) $ (39 ) $ (10,451 ) Unrealized gain (loss) on available-for-sale-securities Net unrealized gain (loss) on retirement plan (2) Change in cumulative foreign currency translation adjustment Total Affected line items in the consolidated statements of operations Balance December 31, 2016, net of tax $ (246 ) $ (10,355 ) $ (65 ) $ (10,666 ) Other comprehensive gain (loss) before reclassification 90 — 25 115 Actuarial gain (loss) (1,662 ) — (1,662 ) Reclassification to net income (1) — 642 — 642 Selling, general and administrative, research and development, and cost of sales Change during period 90 (1,020 ) 25 (905 ) Balance June 30, 2017, net of tax $ (156 ) $ (11,375 ) $ (40 ) $ (11,571 ) (1) The Company reclassified amortization of prior service cost and actuarial loss for its retirement plan from accumulated other comprehensive loss to net income of $844,000 and $642,000 for the six months ended June 30, 2018 and 2017, respectively. (2) Refer to Note 12: Supplemental Executive Retirement Plan. |
SUPPLEMENTAL EXECUTIVE RETIRE33
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Defined Benefit Pension Plans And Defined Benefit Postretirement Plans Disclosure [Abstract] | |
Components of Net Periodic Pension Cost | The components of net periodic pension cost were as follows (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2018 2017 2018 2017 Service cost $ 325 $ 302 $ 650 $ 603 Interest cost 262 252 524 494 Amortization of prior service cost 421 415 842 830 Amortization of loss 118 114 236 161 Total net periodic benefit cost $ 1,126 $ 1,083 $ 2,252 $ 2,088 |
CONCENTRATION OF RISK (Tables)
CONCENTRATION OF RISK (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Risks And Uncertainties [Abstract] | |
Revenues and Accounts Receivable From Our Largest Customers | Revenues and accounts receivable from the Company's largest customers were as follows (in thousands): % of Revenues for the three months ended June 30, % of Revenues for the six months ended June 30, Accounts Receivable as of Customer 2018 2017 2018 2017 June 30, 2018 A 42% 17% 48% 23% $ 15,199 B 33% 73% 26% 66% $ 3,811 C 9% 1% 9% 1% $ 4,304 |
Revenues by Geographic Area | Revenues by geographic area are as follows (in thousands): Three Months Ended June 30, Six Months Ended June 30, Country 2018 2017 2018 2017 South Korea $ 42,132 $ 92,206 $ 72,906 $ 140,134 China 8,479 5,414 17,331 7,896 Japan 686 2,044 1,561 3,128 Other non-U.S. locations 1,061 822 1,622 1,534 Total non-U.S. locations $ 52,358 $ 100,486 $ 93,420 $ 152,692 United States 3,791 2,027 6,301 5,387 Total revenue $ 56,149 $ 102,513 $ 99,721 $ 158,079 |
Long-Lived Assets (Net) by Geographic Area | Long-lived assets (net), by geographic area are as follows (in thousands): June 30, 2018 December 31, 2017 United States $ 59,483 $ 53,991 Other 2,865 2,459 Total long-lived assets $ 62,348 $ 56,450 |
REVENUE RECOGNITION (Tables)
REVENUE RECOGNITION (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Schedule of Assets and Liabilities Associated with Contracts from Customers | The following table provides information about assets and liabilities associated with our contracts from customers (in thousands): As of June 30, 2018 Accounts receivable $ 35,583 Short-term unbilled receivables 1,047 Long-term unbilled receivables 1,571 Short-term deferred revenue 69,247 Long-term deferred revenue 28,344 |
Summary of Significant Changes in Unbilled Receivables and Deferred Liabilities Balances | Significant changes in the unbilled receivables and deferred liabilities balances during the period are as follows (in thousands): Six Months Ended June 30, 2018 Unbilled Receivables Increase (Decrease) Deferred Revenue (Increase) Decrease Balance at December 31, 2017 $ 70 $ (38,883 ) Adoption of revenue standard on January 1, 2018 307 (21,307 ) Adjusted balance on January 1, 2018 377 (60,190 ) Revenue recognized that was previously included in deferred revenue — 22,669 Increases due to cash received — (64,423 ) Cumulative catch-up adjustment arising from changes in estimates of transaction price — 4,353 Unbilled receivables recognized 2,241 — Transferred to receivables from unbilled receivables — — Net change 2,241 (37,401 ) Balance at June 30, 2018 $ 2,618 $ (97,591 ) |
Revenue from Contracts with Customers - ASU No. 2014-09 [Member] | |
Summary of Impacts of Adopting Topic 606 on Consolidated Financial Statements | The following tables summarize the impacts of adopting Topic 606 on the Company’s consolidated financial statements for the three and six months ended June 30, 2018. i. Consolidated Balance Sheet (in thousands) Impact of changes in accounting policies June 30, 2018 As reported Adjustment Balances without adoption of Topic 606 ASSETS Other assets (current and non-current) $ 60,395 $ (2,246 ) $ 58,149 Deferred income taxes 10,534 (10,970 ) (436 ) TOTAL ASSETS 833,249 (13,216 ) 820,033 LIABILITIES AND SHAREHOLDERS' EQUITY Deferred revenue (current and non-current) 97,591 (65,368 ) 32,223 Retained earnings 92,346 52,152 144,498 TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY 833,249 (13,216 ) 820,033 ii. Consolidated Statements of Income (in thousands) Impact of changes in accounting policies Three Months Ended June 30, 2018 As reported Adjustment Balances without adoption of Topic 606 REVENUE $ 56,149 $ 17,470 $ 73,619 Gross margin 44,514 17,470 61,984 OPERATING INCOME 10,911 17,470 28,381 INCOME BEFORE INCOME TAXES 12,665 17,470 30,135 INCOME TAX EXPENSE (1,851 ) (3,180 ) (5,031 ) NET INCOME 10,814 14,290 25,104 Impact of changes in accounting policies Six Months Ended June 30, 2018 As reported Adjustment Balances without adoption of Topic 606 REVENUE $ 99,721 $ 42,123 $ 141,844 Gross margin 80,628 42,123 122,751 OPERATING INCOME 15,430 42,123 57,553 INCOME BEFORE INCOME TAXES 18,408 42,123 60,531 INCOME TAX EXPENSE (1,635 ) (7,864 ) (9,499 ) NET INCOME 16,773 34,259 51,032 iii. Consolidated Statement of Cash Flows (in thousands) |
NET INCOME PER COMMON SHARE (Ta
NET INCOME PER COMMON SHARE (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share | The following table is a reconciliation of net income and the shares used in calculating basic and diluted net income per common share for the three and six months ended June 30, 2018 and 2017 (in thousands, except share and per share data): Three Months Ended June 30, Six Months Ended June 30, 2018 2017 2018 2017 Numerator: Net income $ 10,814 $ 47,187 $ 16,773 $ 57,552 Adjustment for Basic EPS: Earnings allocated to unvested shareholders (122 ) (727 ) (217 ) (972 ) Adjusted net income $ 10,692 $ 46,460 $ 16,556 $ 56,580 Denominator: Weighted average common shares outstanding – Basic 46,868,999 46,742,746 46,826,314 46,702,376 Effect of dilutive shares: Common stock equivalents arising from stock options and ESPP 709 1,450 1,237 2,324 Restricted stock awards and units and performance units 31,390 66,042 45,558 76,420 Weighted average common shares outstanding – Diluted 46,901,098 46,810,238 46,873,109 46,781,120 Net income per common share: Basic $ 0.23 $ 0.99 $ 0.35 $ 1.21 Diluted $ 0.23 $ 0.99 $ 0.35 $ 1.21 |
BUSINESS - Additional Informati
BUSINESS - Additional Information (Details) | Jun. 30, 2018patent |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Number of patents issued and pending application | 4,700 |
SUMMARY OF SIGNIFICANT ACCOUN38
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Additional Information (Details) - USD ($) | Jun. 28, 2016 | Jul. 23, 2012 | Mar. 09, 2011 | Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Dec. 31, 2017 |
Summary Of Significant Accounting Policies [Line Items] | ||||||||
License agreement, extended option term | 2 years | |||||||
License fee agreement, term of agreement | 5 years | |||||||
Taxes, other | $ 23,000 | $ 151,000 | $ 29,000 | $ 207,000 | ||||
Recognized income tax positions measured at likelihood of realization description | Recognized income tax positions are measured at the largest amount of which the likelihood of realization is greater than 50%. | |||||||
Increase in deferred revenue | $ 64,423,000 | 505,000 | ||||||
Deferred revenue offset by reduction of retained earnings | $ (17,894,000) | |||||||
Revenues | 56,149,000 | $ 102,513,000 | 99,721,000 | $ 158,079,000 | ||||
Revenue from Contracts with Customers - ASU No. 2014-09 [Member] | ||||||||
Summary Of Significant Accounting Policies [Line Items] | ||||||||
Increase in deferred revenue | 21,300,000 | |||||||
Deferred revenue offset by reduction of retained earnings | 17,900,000 | 17,900,000 | ||||||
Deferred revenue offset by reduction of retained earnings, tax amount | 3,100,000 | |||||||
Unbilled receivables | 300,000 | 300,000 | ||||||
Revenues | $ 17,500,000 | $ 42,100,000 | ||||||
Minimum [Member] | ||||||||
Summary Of Significant Accounting Policies [Line Items] | ||||||||
Recognized income tax positions measured at percentage of likelihood of realization | 50.00% | |||||||
Licensing Agreements [Member] | Motorola [Member] | ||||||||
Summary Of Significant Accounting Policies [Line Items] | ||||||||
Amortization period of acquired intangible assets (in years) | 7 years 6 months | |||||||
Patents [Member] | FUJIFILM [Member] | ||||||||
Summary Of Significant Accounting Policies [Line Items] | ||||||||
OLED patents useful life | 10 years | |||||||
Patents [Member] | BASF [Member] | ||||||||
Summary Of Significant Accounting Policies [Line Items] | ||||||||
OLED patents useful life | 10 years | |||||||
Other Intangible Assets [Member] | Adesis, Inc. [Member] | Minimum [Member] | ||||||||
Summary Of Significant Accounting Policies [Line Items] | ||||||||
Amortization period of acquired intangible assets (in years) | 10 years | |||||||
Other Intangible Assets [Member] | Adesis, Inc. [Member] | Maximum [Member] | ||||||||
Summary Of Significant Accounting Policies [Line Items] | ||||||||
Amortization period of acquired intangible assets (in years) | 15 years |
CASH, CASH EQUIVALENTS AND IN39
CASH, CASH EQUIVALENTS AND INVESTMENTS - Schedule of Cash, Cash Equivalents and Investments (Details) - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 |
Cash and Cash Equivalents [Line Items] | ||
Investments, Amortized Cost Basis | $ 378,739 | $ 320,563 |
Investments, Gross Unrealized Gains | 2 | 1 |
Investments, Gross Unrealized Losses | (174) | (392) |
Investments | 378,567 | 320,172 |
Certificates of Deposit [Member] | ||
Cash and Cash Equivalents [Line Items] | ||
Cash Equivalents, at Carrying Value | 1,250 | 1,296 |
Cash Equivalents, Gross Unrealized Gain | 1 | |
Cash Equivalents, Gross Unrealized Losses | (1) | (1) |
Cash and Cash Equivalents, Fair Value Disclosure | 1,249 | 1,296 |
Corporate Debt Securities [Member] | ||
Cash and Cash Equivalents [Line Items] | ||
Cash Equivalents, at Carrying Value | 17,900 | |
Available-for-sale Debt Securities, Amortized Cost Basis | 204,396 | 104,626 |
Available-for-sale Securities, Gross Unrealized Gains | 2 | |
Available-for-sale Securities, Gross Unrealized Losses | (63) | (252) |
Available-for-sale Securities, Fair Value Disclosure | 204,335 | 104,374 |
U.S. Government Securities [Member] | ||
Cash and Cash Equivalents [Line Items] | ||
Cash Equivalents, at Carrying Value | 24,900 | |
Available-for-sale Debt Securities, Amortized Cost Basis | 173,093 | 214,641 |
Available-for-sale Securities, Gross Unrealized Losses | (110) | (139) |
Available-for-sale Securities, Fair Value Disclosure | $ 172,983 | $ 214,502 |
CASH, CASH EQUIVALENTS AND IN40
CASH, CASH EQUIVALENTS AND INVESTMENTS - Additional Information (Details) - USD ($) $ in Millions | Jun. 30, 2018 | Dec. 31, 2017 |
Government Securities [Member] | ||
Cash and Cash Equivalents [Line Items] | ||
Cash equivalents | $ 24.9 | |
Corporate Bonds [Member] | ||
Cash and Cash Equivalents [Line Items] | ||
Cash equivalents | $ 17.9 |
FAIR VALUE MEASUREMENTS - Sched
FAIR VALUE MEASUREMENTS - Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis (Details) - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Short-term investments | $ 353,651 | $ 287,446 |
Long-term investments | 14,794 | |
Fair Value, Measurements, Recurring [Member] | Reported Value Measurement [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 39,051 | 27,532 |
Short-term investments | 353,651 | 287,446 |
Long-term investments | 14,794 | |
Fair Value, Measurements, Recurring [Member] | Estimate of Fair Value Measurement [Member] | Fair Value, Inputs, Level 1 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 39,051 | 27,532 |
Short-term investments | $ 353,651 | 287,446 |
Long-term investments | $ 14,794 |
FAIR VALUE MEASUREMENTS - Addit
FAIR VALUE MEASUREMENTS - Additional Information (Details) - USD ($) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2018 | Dec. 31, 2017 | |
Fair Value Disclosures [Abstract] | ||
Other than temporary impairments of investments | $ 0 | $ 0 |
INVENTORY - Schedule of Invento
INVENTORY - Schedule of Inventory (Details) - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 20,208 | $ 17,464 |
Work-in-process | 5,203 | 2,977 |
Finished goods | 30,632 | 15,824 |
Inventory | $ 56,043 | $ 36,265 |
GOODWILL AND INTANGIBLE ASSET44
GOODWILL AND INTANGIBLE ASSETS - Schedule of Acquired Technology (Details) - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 |
Finite-Lived Intangible Assets [Line Items] | ||
Acquired technology, gross | $ 222,841 | |
Less: Accumulated amortization | (101,611) | $ (91,312) |
Acquired technology, net | 121,230 | $ 131,529 |
PD LD, Inc [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Acquired technology, gross | 1,481 | |
Motorola [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Acquired technology, gross | 15,909 | |
BASF [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Acquired technology, gross | 95,989 | |
FUJIFILM [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Acquired technology, gross | $ 109,462 |
GOODWILL AND INTANGIBLE ASSET45
GOODWILL AND INTANGIBLE ASSETS - Acquired Technology - Additional Information (Details) € in Millions | Jun. 28, 2016USD ($)patent | Jun. 28, 2016EUR (€)patent | Jul. 23, 2012USD ($)patent | Mar. 09, 2011 | Jun. 30, 2018USD ($)patent | Jun. 30, 2017USD ($) | Jun. 30, 2018USD ($)patent | Jun. 30, 2017USD ($) |
Finite-Lived Intangible Assets [Line Items] | ||||||||
Amortization related to acquired technology | $ 10,986,000 | $ 10,987,000 | ||||||
Future amortization expense, remainder of 2018 | $ 20,600,000 | 20,600,000 | ||||||
Future amortization expense, 2019 | 20,500,000 | 20,500,000 | ||||||
Future amortization expense, 2020 | 20,500,000 | 20,500,000 | ||||||
Future amortization expense, 2021 | 20,500,000 | 20,500,000 | ||||||
Future amortization expense, 2022 | 15,800,000 | 15,800,000 | ||||||
Future amortization expense, thereafter | 33,600,000 | 33,600,000 | ||||||
Patent Technology [Member] | ||||||||
Finite-Lived Intangible Assets [Line Items] | ||||||||
Amortization related to acquired technology | $ 5,100,000 | $ 5,100,000 | $ 10,300,000 | $ 10,300,000 | ||||
Licensing Agreements [Member] | Motorola [Member] | ||||||||
Finite-Lived Intangible Assets [Line Items] | ||||||||
Number of patents under license agreement | patent | 74 | 74 | ||||||
Amortization period of acquired intangible assets (in years) | 7 years 6 months | |||||||
Patents [Member] | FUJIFILM [Member] | ||||||||
Finite-Lived Intangible Assets [Line Items] | ||||||||
Number of patents acquired (more than) | patent | 1,200 | |||||||
Assigned value of acquired intangible assets | $ 105,000,000 | |||||||
Cash paid for OLED patents | $ 4,500,000 | |||||||
OLED patents useful life | 10 years | |||||||
Patents [Member] | BASF [Member] | ||||||||
Finite-Lived Intangible Assets [Line Items] | ||||||||
Number of patents acquired (more than) | patent | 500 | 500 | ||||||
Assigned value of acquired intangible assets | $ 95,800,000 | € 86.8 | ||||||
Cash paid for OLED patents | $ 217,000 | |||||||
OLED patents useful life | 10 years | 10 years |
GOODWILL AND INTANGIBLE ASSET46
GOODWILL AND INTANGIBLE ASSETS - Other Intangible Assets - Additional Information (Details) - Adesis, Inc. [Member] - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Finite-Lived Intangible Assets [Line Items] | ||||
Other intangible assets | $ 16,840,000 | $ 16,840,000 | ||
Amortization expense related to other intangible assets | 345,000 | $ 346,000 | 687,000 | $ 688,000 |
Future amortization expense of other intangible assets, remainder of fiscal year | 1,400,000 | 1,400,000 | ||
Future amortization expense of other intangible assets, fiscal year 2 | 1,400,000 | 1,400,000 | ||
Future amortization expense of other intangible assets, fiscal year 3 | 1,400,000 | 1,400,000 | ||
Future amortization expense of other intangible assets, fiscal year 4 | 1,400,000 | 1,400,000 | ||
Future amortization expense of other intangible assets, fiscal year 5 | 1,400,000 | 1,400,000 | ||
Future amortization expense of other intangible assets, thereafter | 7,800,000 | 7,800,000 | ||
Customer Relationships [Member] | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Other intangible assets | 10,520,000 | $ 10,520,000 | ||
Estimated useful life | 11 years 6 months | |||
Internally-developed IP, Processes and Recipes [Member] | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Other intangible assets | 4,820,000 | $ 4,820,000 | ||
Estimated useful life | 15 years | |||
Trade Name/Trademarks [Member] | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Other intangible assets | $ 1,500,000 | $ 1,500,000 | ||
Estimated useful life | 10 years |
GOODWILL AND INTANGIBLE ASSET47
GOODWILL AND INTANGIBLE ASSETS - Schedule of Other Intangible Assets (Details) - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 |
Finite-Lived Intangible Assets [Line Items] | ||
Accumulated Amortization | $ (2,687) | $ (2,000) |
Net Carrying Amount | 14,153 | $ 14,840 |
Adesis, Inc. [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 16,840 | |
Accumulated Amortization | (2,687) | |
Net Carrying Amount | 14,153 | |
Adesis, Inc. [Member] | Customer Relationships [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 10,520 | |
Accumulated Amortization | (1,768) | |
Net Carrying Amount | 8,752 | |
Adesis, Inc. [Member] | Developed IP, Processes and Recipes [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 4,820 | |
Accumulated Amortization | (627) | |
Net Carrying Amount | 4,193 | |
Adesis, Inc. [Member] | Trade Name/Trademarks [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 1,500 | |
Accumulated Amortization | (292) | |
Net Carrying Amount | $ 1,208 |
RESEARCH AND LICENSE AGREEMEN48
RESEARCH AND LICENSE AGREEMENTS WITH PRINCETON UNIVERSITY, UNIVERSITY OF SOUTHERN CALIFORNIA AND THE UNIVERSITY OF MICHIGAN - Additional Information (Details) - USD ($) | May 01, 2017 | Jun. 01, 2013 | Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Apr. 30, 2009 | Apr. 30, 2013 | Oct. 31, 2017 | Apr. 30, 2013 | Jul. 31, 2007 |
Research and Development Arrangement, Contract to Perform for Others [Line Items] | ||||||||||||
Royalty expense | $ 1,568,000 | $ 2,991,000 | $ 2,799,000 | $ 4,578,000 | ||||||||
1997 Research Agreement [Member] | ||||||||||||
Research and Development Arrangement, Contract to Perform for Others [Line Items] | ||||||||||||
Term of agreement (in years) | 10 years | |||||||||||
2006 Research Agreement - Original Term [Member] | ||||||||||||
Research and Development Arrangement, Contract to Perform for Others [Line Items] | ||||||||||||
Term of agreement (in years) | 3 years | 4 years | ||||||||||
Research and development expense incurred | $ 5,000,000 | |||||||||||
2006 Research Agreement - Extended Term [Member] | ||||||||||||
Research and Development Arrangement, Contract to Perform for Others [Line Items] | ||||||||||||
Term of agreement (in years) | 4 years | |||||||||||
Research and development expense incurred | $ 4,600,000 | |||||||||||
2006 Research Agreement - Extended Term Three [Member] | ||||||||||||
Research and Development Arrangement, Contract to Perform for Others [Line Items] | ||||||||||||
Term of agreement (in years) | 3 years | |||||||||||
Research and development expense incurred | $ 1,000,000 | |||||||||||
Maximum obligation | 6,100,000 | $ 6,100,000 | $ 6,100,000 | |||||||||
1997 Amended License Agreement [Member] | ||||||||||||
Research and Development Arrangement, Contract to Perform for Others [Line Items] | ||||||||||||
Royalty rate for licensed products sold by the Company (in hundredths) | 3.00% | |||||||||||
Royalty rate for licensed products sold by the Company's sublicenses (in hundredths) | 3.00% | |||||||||||
Minimum royalty payment per year | $ 100,000 | |||||||||||
Royalty expense | $ 1,600,000 | $ 3,000,000 | 2,800,000 | $ 4,600,000 | ||||||||
Minimum investment per year | $ 800,000 |
EQUITY AND CASH COMPENSATION 49
EQUITY AND CASH COMPENSATION UNDER THE PPG AGREEMENTS - Additional Information (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Mar. 31, 2018 | Sep. 30, 2017 | Jun. 30, 2017 | |
Long-term Purchase Commitment [Line Items] | ||||||
Percent of services payable in cash or shares | 50.00% | 50.00% | ||||
Issuance of common stock in connection with materials and license agreements (in shares) | 0 | 0 | 0 | 0 | ||
New OLED Materials Agreement and OLED Materials Agreement [Member] | Cash Distribution | ||||||
Long-term Purchase Commitment [Line Items] | ||||||
Charges to expense (credit) for cash portion of reimbursement of expenses | $ (161,000) | $ 143,000 | $ 200,000 | $ 247,000 | ||
New OLED Materials Agreement and OLED Materials Agreement [Member] | Weighted Average | ||||||
Long-term Purchase Commitment [Line Items] | ||||||
Minimum average closing price of common stock (in dollars per share) | $ 20 | $ 20 |
SHAREHOLDERS' EQUITY - Addition
SHAREHOLDERS' EQUITY - Additional Information (Details) - USD ($) | Aug. 09, 2018 | Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Jun. 21, 2018 | Jun. 20, 2018 | Dec. 31, 2017 |
Class Of Stock [Line Items] | ||||||||
Common Stock, shares authorized (in shares) | 200,000,000 | 200,000,000 | 200,000,000 | 100,000,000 | 200,000,000 | |||
Preferred Stock, shares authorized ( in shares) | 5,000,000 | 5,000,000 | 5,000,000 | |||||
Preferred Stock, par value (in dollars per share) | $ 0.01 | $ 0.01 | $ 0.01 | |||||
Common stock voting rights | Each share of the Company’s common stock entitles the holder to one vote on all matters to be voted upon by the shareholders. | |||||||
Common Stock, par value (in dollars per share) | $ 0.01 | $ 0.01 | $ 0.01 | |||||
Common Stock, shares issued (in shares) | 48,650,696 | 48,650,696 | 48,476,034 | |||||
Common Stock, shares outstanding (in shares) | 47,289,059 | 47,289,059 | 47,118,171 | |||||
Treasury stock repurchased shares | 0 | 3,774 | ||||||
Treasury stock repurchased cost per share | $ 0.01 | |||||||
Treasury stock repurchased value | $ 477,000 | |||||||
Common stock dividends declared per share | $ 0.06 | $ 0.03 | $ 0.12 | $ 0.06 | ||||
Common stock dividends paid per share | $ 0.06 | $ 0.12 | ||||||
Common stock dividends paid | $ 2,800,000 | $ 5,700,000 | ||||||
Subsequent Event [Member] | ||||||||
Class Of Stock [Line Items] | ||||||||
Common stock dividends declared per share | $ 0.06 | |||||||
Dividend declared date | Aug. 9, 2018 | |||||||
Dividend payable date | Sep. 28, 2018 | |||||||
Series A Nonconvertible Preferred Stock [Member] | ||||||||
Class Of Stock [Line Items] | ||||||||
Preferred Stock, shares issued (in shares) | 200,000 | 200,000 | 200,000 | |||||
Preferred Stock, shares outstanding (in shares) | 200,000 | 200,000 | 200,000 |
SHAREHOLDERS' EQUITY - Deferred
SHAREHOLDERS' EQUITY - Deferred Compensation Arrangement - Additional Information (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Deferred Compensation Arrangement with Employees and Non-Employees, Share-Based Payments [Line Items] | ||||
Fair value of shares withheld for tax withholding obligations | $ 11,031,000 | |||
Employees and Non Employee Members of Scientific Advisory Board [Member] | ||||
Deferred Compensation Arrangement with Employees and Non-Employees, Share-Based Payments [Line Items] | ||||
Shares issued (in shares) | 2,456 | 5,590 | ||
Employees [Member] | ||||
Deferred Compensation Arrangement with Employees and Non-Employees, Share-Based Payments [Line Items] | ||||
Fair value of shares issued | $ 0 | $ 165,000 | ||
Shares withheld for tax withholding obligations (in shares) | 605 | |||
Fair value of shares withheld for tax withholding obligations | $ 55,000 | |||
Members of Scientific Advisory Board [Member] | ||||
Deferred Compensation Arrangement with Employees and Non-Employees, Share-Based Payments [Line Items] | ||||
Fair value of shares issued | $ 300,000 | $ 300,000 |
ACCUMULATED OTHER COMPREHENSI52
ACCUMULATED OTHER COMPREHENSIVE LOSS - Schedule of Accumulated Other Comprehensive Loss (Details) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | ||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | |||||
BALANCE | $ 659,054,000 | ||||
Other comprehensive gain (loss) before reclassification | 169,000 | $ 115,000 | |||
Actuarial gain (loss) | (1,662,000) | ||||
Reclassification to net income | [1] | 844,000 | 642,000 | ||
TOTAL OTHER COMPREHENSIVE INCOME (LOSS) | $ 517,000 | $ (1,219,000) | 1,013,000 | (905,000) | |
BALANCE | 650,681,000 | 650,681,000 | |||
Unrealized gain (loss) on available-for-sale securities [Member] | |||||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | |||||
BALANCE | (258,000) | (246,000) | |||
Other comprehensive gain (loss) before reclassification | 171,000 | 90,000 | |||
TOTAL OTHER COMPREHENSIVE INCOME (LOSS) | 171,000 | 90,000 | |||
BALANCE | (87,000) | (156,000) | (87,000) | (156,000) | |
Net unrealized gain (loss) on retirement plan [Member] | |||||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | |||||
BALANCE | [2] | (11,169,000) | (10,355,000) | ||
Actuarial gain (loss) | [2] | (1,662,000) | |||
Reclassification to net income | [1],[2] | 844,000 | 642,000 | ||
TOTAL OTHER COMPREHENSIVE INCOME (LOSS) | [2] | 844,000 | (1,020,000) | ||
BALANCE | [2] | (10,325,000) | (11,375,000) | (10,325,000) | (11,375,000) |
Change in cumulative foreign currency translation adjustment [Member] | |||||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | |||||
BALANCE | (37,000) | (65,000) | |||
Other comprehensive gain (loss) before reclassification | (2,000) | 25,000 | |||
TOTAL OTHER COMPREHENSIVE INCOME (LOSS) | (2,000) | 25,000 | |||
BALANCE | (39,000) | (40,000) | (39,000) | (40,000) | |
Accumulated Other Comprehensive Loss [Member] | |||||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | |||||
BALANCE | (11,464,000) | (10,666,000) | |||
TOTAL OTHER COMPREHENSIVE INCOME (LOSS) | 1,013,000 | ||||
BALANCE | $ (10,451,000) | $ (11,571,000) | $ (10,451,000) | $ (11,571,000) | |
[1] | The Company reclassified amortization of prior service cost and actuarial loss for its retirement plan from accumulated other comprehensive loss to net income of $844,000 and $642,000 for the six months ended June 30, 2018 and 2017, respectively. | ||||
[2] | Refer to Note 12: Supplemental Executive Retirement Plan. |
ACCUMULATED OTHER COMPREHENSI53
ACCUMULATED OTHER COMPREHENSIVE LOSS - Schedule of Accumulated Other Comprehensive Loss (Parenthetical) (Details) - USD ($) | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | ||
Accumulated Other Comprehensive Income Loss Net Of Tax [Abstract] | |||
Reclassification to net income | [1] | $ 844,000 | $ 642,000 |
[1] | The Company reclassified amortization of prior service cost and actuarial loss for its retirement plan from accumulated other comprehensive loss to net income of $844,000 and $642,000 for the six months ended June 30, 2018 and 2017, respectively. |
STOCK-BASED COMPENSATION - Equi
STOCK-BASED COMPENSATION - Equity Compensation Plan - Additional Information (Details) - Equity Compensation Plan [Member] | 6 Months Ended |
Jun. 30, 2018shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Number of shares authorized (in shares) | 10,500,000 |
Number of shares available for grant (in shares) | 2,417,626 |
Compensation plan extended term description | Extended the term of the plan through 2024 |
Maximum [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Expiration term (in years) | 10 years |
STOCK-BASED COMPENSATION - Eq55
STOCK-BASED COMPENSATION - Equity Instruments Other Than Options - Additional Information (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Fair value of shares withheld for tax withholding obligations | $ 11,031,000 | |||
Restricted Stock [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Grants in period (shares) | 38,442 | |||
Total fair value of performance unit awards granted | $ 4,700,000 | |||
Shares withheld for tax withholding obligations (in shares) | 52,874 | 50,630 | 80,147 | 81,343 |
Fair value of shares withheld for tax withholding obligations | $ 5,200,000 | $ 4,300,000 | $ 8,600,000 | $ 6,800,000 |
Restricted Stock [Member] | Selling, General and Administrative Expense [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Compensation expense (benefit) | 1,900,000 | 2,100,000 | 3,500,000 | 4,100,000 |
Restricted Stock [Member] | Research and Development Expense [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Compensation expense (benefit) | 509,000 | 419,000 | 934,000 | 786,000 |
Restricted Stock [Member] | Cost of Sales [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Compensation expense (benefit) | 186,000 | 96,000 | $ 347,000 | 190,000 |
Restricted Stock [Member] | Minimum [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Restricted stock awards and units vesting terms | 3 years | |||
Restricted Stock [Member] | Maximum [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Restricted stock awards and units vesting terms | 5 years | |||
Restricted Stock Units (RSUs) [Member] | Research and Development Expense [Member] | Non Employee Members of Scientific Advisory Board [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Compensation expense (benefit) | 41,000 | 175,000 | $ (116,000) | $ 445,000 |
Performance Shares [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Grants in period (shares) | 12,047 | |||
Total fair value of performance unit awards granted | $ 1,400,000 | |||
Shares withheld for tax withholding obligations (in shares) | 25,208 | 19,217 | ||
Fair value of shares withheld for tax withholding obligations | $ 2,900,000 | $ 1,600,000 | ||
Performance Shares [Member] | Performance-Based Vesting Requirement [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Grants in period (shares) | 6,022 | |||
Performance Shares [Member] | Market-Based Vesting Requirement [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Grants in period (shares) | 6,025 | |||
Performance Shares [Member] | Selling, General and Administrative Expense [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Compensation expense (benefit) | 519,000 | (279,000) | $ 945,000 | 161,000 |
Performance Shares [Member] | Research and Development Expense [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Compensation expense (benefit) | 128,000 | (87,000) | 232,000 | 28,000 |
Performance Shares [Member] | Cost of Sales [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Compensation expense (benefit) | $ 56,000 | $ (29,000) | $ 100,000 | $ 16,000 |
STOCK-BASED COMPENSATION - Boar
STOCK-BASED COMPENSATION - Board of Directors Compensation - Additional Information (Details) - Director [Member] - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | ||||
Restricted stock awards and units vesting terms | 1 year | |||
Fair value of shares issued | $ 1,100,000 | $ 444,000 | $ 2,100,000 | $ 883,000 |
Shares issued (in shares) | 12,500 | 15,000 |
STOCK-BASED COMPENSATION - Empl
STOCK-BASED COMPENSATION - Employee Stock Purchase Plan - Additional Information (Details) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Jun. 25, 2009 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Proceeds from common stock issued | $ 564,000 | ||||
Employee Stock Purchase Plan (ESPP) [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Reserved for issuance (in shares) | 1,000,000 | ||||
Purchase period (in months) | 3 months | ||||
Percentage of market value (in hundredths) | 85.00% | ||||
Maximum allocation of base compensation (in hundredths) | 10.00% | ||||
Maximum shares per purchase date (in shares) | 12,500 | ||||
Maximum value per calendar year, per employee | $ 25,000 | ||||
Common stock issued (in shares) | 5,532 | 5,928 | |||
Proceeds from common stock issued | $ 434,000 | $ 349,000 | |||
Employee Stock Purchase Plan (ESPP) [Member] | Selling, General and Administrative Expense [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Charges to expense | $ 24,000 | $ 21,000 | 41,000 | 36,000 | |
Employee Stock Purchase Plan (ESPP) [Member] | Research and Development Expense [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Charges to expense | 33,000 | 23,000 | 56,000 | 47,000 | |
Employee Stock Purchase Plan (ESPP) [Member] | Cost of Sales [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Charges to expense | $ 19,000 | $ 13,000 | $ 33,000 | $ 18,000 |
SUPPLEMENTAL EXECUTIVE RETIRE58
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN - Additional Information (Details) | Jun. 30, 2018participant |
Supplemental Executive Retirement Plan [Member] | |
Defined Benefit Plan Disclosure [Line Items] | |
Number of participants | 7 |
SUPPLEMENTAL EXECUTIVE RETIRE59
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN - Components of Net Periodic Pension Cost (Details) - Supplemental Executive Retirement Plan [Member] - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Components of net periodic pension cost [Abstract] | ||||
Service cost | $ 325 | $ 302 | $ 650 | $ 603 |
Interest cost | 262 | 252 | 524 | 494 |
Amortization of prior service cost | 421 | 415 | 842 | 830 |
Amortization of loss | 118 | 114 | 236 | 161 |
Total net periodic benefit cost | $ 1,126 | $ 1,083 | $ 2,252 | $ 2,088 |
COMMITMENTS AND CONTINGENCIES -
COMMITMENTS AND CONTINGENCIES - Additional Information (Details) | Jun. 30, 2018USD ($)executive_officerEmployeemultiple | Dec. 31, 2017USD ($) |
Loss Contingencies [Line Items] | ||
Purchase commitments for inventory | $ | $ 21,300,000 | $ 14,200,000 |
Commitment With Executive Officers [Member] | ||
Loss Contingencies [Line Items] | ||
Number of executive officers under agreement | executive_officer | 6 | |
Number of employees under agreement | Employee | 1 | |
Multiple of sum of average annual base salary and bonus agreement terms | multiple | 2 |
CONCENTRATION OF RISK - Revenue
CONCENTRATION OF RISK - Revenues and Accounts Receivable From Our Largest Customers (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Dec. 31, 2017 | |
Concentration Risk [Line Items] | |||||
Accounts Receivable | $ 35,583 | $ 35,583 | $ 52,355 | ||
Major Customer A [Member] | Total Revenue [Member] | Customer Concentration Risk [Member] | |||||
Concentration Risk [Line Items] | |||||
% of Revenue | 42.00% | 17.00% | 48.00% | 23.00% | |
Major Customer A [Member] | Accounts Receivable [Member] | Customer Concentration Risk [Member] | |||||
Concentration Risk [Line Items] | |||||
Accounts Receivable | $ 15,199 | $ 15,199 | |||
Major Customer B [Member] | Total Revenue [Member] | Customer Concentration Risk [Member] | |||||
Concentration Risk [Line Items] | |||||
% of Revenue | 33.00% | 73.00% | 26.00% | 66.00% | |
Major Customer B [Member] | Accounts Receivable [Member] | Customer Concentration Risk [Member] | |||||
Concentration Risk [Line Items] | |||||
Accounts Receivable | $ 3,811 | $ 3,811 | |||
Major Customer C [Member] | Total Revenue [Member] | Customer Concentration Risk [Member] | |||||
Concentration Risk [Line Items] | |||||
% of Revenue | 9.00% | 1.00% | 9.00% | 1.00% | |
Major Customer C [Member] | Accounts Receivable [Member] | Customer Concentration Risk [Member] | |||||
Concentration Risk [Line Items] | |||||
Accounts Receivable | $ 4,304 | $ 4,304 |
CONCENTRATION OF RISK - Additio
CONCENTRATION OF RISK - Additional Information (Details) - supplier | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Supplier Concentration Risk [Member] | ||||
Concentration Risk [Line Items] | ||||
Number of suppliers from which chemical materials were purchased | 1 | |||
Excluding North America [Member] | Total Revenue [Member] | Customer Concentration Risk [Member] | ||||
Concentration Risk [Line Items] | ||||
Concentration risk, percentage (less than 1% for contracts with U.S. government agencies) | 93.00% | 98.00% | 94.00% | 97.00% |
CONCENTRATION OF RISK - Reven63
CONCENTRATION OF RISK - Revenues by Geographic Area (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Concentration Risk [Line Items] | ||||
Revenues | $ 56,149 | $ 102,513 | $ 99,721 | $ 158,079 |
South Korea [Member] | ||||
Concentration Risk [Line Items] | ||||
Revenues | 42,132 | 92,206 | 72,906 | 140,134 |
China [Member] | ||||
Concentration Risk [Line Items] | ||||
Revenues | 8,479 | 5,414 | 17,331 | 7,896 |
Japan [Member] | ||||
Concentration Risk [Line Items] | ||||
Revenues | 686 | 2,044 | 1,561 | 3,128 |
Other Non-U.S. Locations [Member] | ||||
Concentration Risk [Line Items] | ||||
Revenues | 1,061 | 822 | 1,622 | 1,534 |
Total Non-U.S. Locations [Member] | ||||
Concentration Risk [Line Items] | ||||
Revenues | 52,358 | 100,486 | 93,420 | 152,692 |
UNITED STATES | ||||
Concentration Risk [Line Items] | ||||
Revenues | $ 3,791 | $ 2,027 | $ 6,301 | $ 5,387 |
CONCENTRATION OF RISK - Long-Li
CONCENTRATION OF RISK - Long-Lived Assets (Net) by Geographic Area (Details) - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 |
Segment Reporting Information [Line Items] | ||
Total long-lived assets | $ 62,348 | $ 56,450 |
UNITED STATES | ||
Segment Reporting Information [Line Items] | ||
Total long-lived assets | 59,483 | 53,991 |
Other [Member] | ||
Segment Reporting Information [Line Items] | ||
Total long-lived assets | $ 2,865 | $ 2,459 |
INCOME TAXES - Additional Infor
INCOME TAXES - Additional Information (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Income Taxes [Line Items] | ||||
Effective income tax rate expense, percent | 14.60% | 23.00% | 8.90% | 22.30% |
Income tax expense (benefit) | $ 1,851,000 | $ 14,134,000 | $ 1,635,000 | $ 16,479,000 |
Korean Government [Member] | ||||
Income Taxes [Line Items] | ||||
Estimated settlement amounts due (refunds) from withholding taxes | (37,500,000) | (37,500,000) | ||
U.S.Federal Government [Member] | ||||
Income Taxes [Line Items] | ||||
Estimated settlement amounts due (refunds) from withholding taxes | 18,300,000 | 18,300,000 | ||
Reduction of Korean Withholding Taxes [Member] | ||||
Income Taxes [Line Items] | ||||
Reduction of deferred tax asset for foreign tax credits and R&D | 19,200,000 | |||
ASU No. 2016-09 [Member] | ||||
Income Taxes [Line Items] | ||||
Income tax expense (benefit) | $ (448,000) | $ (1,200,000) | $ (1,700,000) | $ (2,400,000) |
REVENUE RECOGNITION - Additiona
REVENUE RECOGNITION - Additional Information (Details) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Dec. 31, 2017 | |
Disaggregation Of Revenue [Line Items] | |||||
Deferred revenue | $ 64,423,000 | $ 505,000 | |||
Deferred revenue offset by reduction of retained earnings | $ (17,894,000) | ||||
Revenue | $ 56,149,000 | $ 102,513,000 | $ 99,721,000 | $ 158,079,000 | |
Contract expiration year | 2,022 | ||||
Backlog associated with committed purchase orders from customers | 15,400 | $ 15,400 | |||
Revenue from Contracts with Customers - ASU No. 2014-09 [Member] | |||||
Disaggregation Of Revenue [Line Items] | |||||
Deferred revenue | 21,300,000 | ||||
Deferred revenue offset by reduction of retained earnings | 17,900,000 | 17,900,000 | |||
Deferred revenue offset by reduction of retained earnings, tax amount | 3,100,000 | ||||
Unbilled receivables | 300,000 | 300,000 | |||
Revenue | $ 17,500,000 | $ 42,100,000 | |||
Percentage of revenue recorded from sales of materials | 93.00% | 98.00% | 94.00% | 98.00% | |
Revenue from Contracts with Customers - ASU No. 2014-09 [Member] | Adesis, Inc. [Member] | |||||
Disaggregation Of Revenue [Line Items] | |||||
Percentage of revenue recorded from provision of services | 7.00% | 2.00% | 6.00% | 2.00% |
REVENUE RECOGNITION - Summary o
REVENUE RECOGNITION - Summary of Impacts of Adopting Topic 606 on Consolidated Financial Statements (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Dec. 31, 2017 | |
ASSETS | |||||
Other assets (current and non-current) | $ 60,395 | $ 60,395 | |||
Deferred income taxes | 10,534 | 10,534 | $ 27,022 | ||
TOTAL ASSETS | 833,249 | 833,249 | 779,956 | ||
LIABILITIES AND SHAREHOLDERS’ EQUITY | |||||
Deferred revenue (current and non-current) | 97,591 | 97,591 | 38,883 | ||
Retained earnings | 92,346 | 92,346 | 99,126 | ||
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | 833,249 | 833,249 | $ 779,956 | ||
REVENUE | 56,149 | $ 102,513 | 99,721 | $ 158,079 | |
Gross margin | 44,514 | 91,203 | 80,628 | 133,782 | |
OPERATING INCOME | 10,911 | 60,519 | 15,430 | 72,577 | |
INCOME BEFORE INCOME TAXES | 12,665 | 61,321 | 18,408 | 74,031 | |
INCOME TAX EXPENSE | (1,851) | (14,134) | (1,635) | (16,479) | |
NET INCOME | 10,814 | $ 47,187 | 16,773 | 57,552 | |
Amortization of deferred revenue and recognition of unbilled receivables | (29,266) | (4,873) | |||
Deferred income tax expense | 19,312 | 7,408 | |||
Other assets (current and non-current) | (28,633) | ||||
CASH FLOW FROM OPERATING ACTIVITIES | 49,952 | $ 56,629 | |||
Revenue from Contracts with Customers - ASU No. 2014-09 [Member] | |||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | |||||
REVENUE | 17,500 | 42,100 | |||
Adjustment [Member] | Revenue from Contracts with Customers - ASU No. 2014-09 [Member] | |||||
ASSETS | |||||
Other assets (current and non-current) | (2,246) | (2,246) | |||
Deferred income taxes | (10,970) | (10,970) | |||
TOTAL ASSETS | (13,216) | (13,216) | |||
LIABILITIES AND SHAREHOLDERS’ EQUITY | |||||
Deferred revenue (current and non-current) | (65,368) | (65,368) | |||
Retained earnings | 52,152 | 52,152 | |||
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | (13,216) | (13,216) | |||
REVENUE | 17,470 | 42,123 | |||
Gross margin | 17,470 | 42,123 | |||
OPERATING INCOME | 17,470 | 42,123 | |||
INCOME BEFORE INCOME TAXES | 17,470 | 42,123 | |||
INCOME TAX EXPENSE | (3,180) | (7,864) | |||
NET INCOME | 14,290 | 34,259 | |||
Amortization of deferred revenue and recognition of unbilled receivables | (47,475) | ||||
Deferred income tax expense | 10,970 | ||||
Other assets (current and non-current) | 2,246 | ||||
Balances Without Adoption of Topic 606 [Member] | Revenue from Contracts with Customers - ASU No. 2014-09 [Member] | |||||
ASSETS | |||||
Other assets (current and non-current) | 58,149 | 58,149 | |||
Deferred income taxes | (436) | (436) | |||
TOTAL ASSETS | 820,033 | 820,033 | |||
LIABILITIES AND SHAREHOLDERS’ EQUITY | |||||
Deferred revenue (current and non-current) | 32,223 | 32,223 | |||
Retained earnings | 144,498 | 144,498 | |||
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | 820,033 | 820,033 | |||
REVENUE | 73,619 | 141,844 | |||
Gross margin | 61,984 | 122,751 | |||
OPERATING INCOME | 28,381 | 57,553 | |||
INCOME BEFORE INCOME TAXES | 30,135 | 60,531 | |||
INCOME TAX EXPENSE | (5,031) | (9,499) | |||
NET INCOME | $ 25,104 | 51,032 | |||
Amortization of deferred revenue and recognition of unbilled receivables | (76,741) | ||||
Deferred income tax expense | 30,282 | ||||
Other assets (current and non-current) | (26,387) | ||||
CASH FLOW FROM OPERATING ACTIVITIES | $ 49,952 |
REVENUE RECOGNITION - Schedule
REVENUE RECOGNITION - Schedule of Assets and Liabilities Associated with Contracts from Customers (Details) - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 |
Disaggregation Of Revenue [Line Items] | ||
Accounts receivable | $ 35,583 | $ 52,355 |
Short-term deferred revenue | 69,247 | 14,981 |
Long-term deferred revenue | 28,344 | $ 23,902 |
Other Current Assets [Member] | ||
Disaggregation Of Revenue [Line Items] | ||
Short-term unbilled receivables | 1,047 | |
Other Assets [Member] | ||
Disaggregation Of Revenue [Line Items] | ||
Long-term unbilled receivables | $ 1,571 |
REVENUE RECOGNITION - Summary69
REVENUE RECOGNITION - Summary of Significant Changes in Unbilled Receivables and Deferred Liabilities Balances (Details) $ in Thousands | 6 Months Ended |
Jun. 30, 2018USD ($) | |
Deferred Revenue (Increase) Decrease | |
Balance at December 31, 2017 | $ (38,883) |
Adoption of revenue standard on January 1, 2018 | (21,307) |
Adjusted balance on January 1, 2018 | (60,190) |
Revenue recognized that was previously included in deferred revenue | 22,669 |
Increases due to cash received | (64,423) |
Cumulative catch-up adjustment arising from changes in estimates of transaction price | 4,353 |
Net change | (37,401) |
Balance at June 30, 2018 | (97,591) |
Unbilled Receivables Increase (Decrease) | |
Balance at December 31, 2017 | 70 |
Adoption of revenue standard on January 1, 2018 | 307 |
Adjusted balance on January 1, 2018 | 377 |
Unbilled receivables recognized | 2,241 |
Net change | 2,241 |
Balance at June 30, 2018 | $ 2,618 |
NET INCOME PER COMMON SHARE - S
NET INCOME PER COMMON SHARE - Schedule of Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Numerator: | ||||
Net income | $ 10,814 | $ 47,187 | $ 16,773 | $ 57,552 |
Adjustment for Basic EPS: | ||||
Earnings allocated to unvested shareholders | (122) | (727) | (217) | (972) |
Adjusted net income | $ 10,692 | $ 46,460 | $ 16,556 | $ 56,580 |
Denominator: | ||||
Weighted average common shares outstanding – Basic | 46,868,999 | 46,742,746 | 46,826,314 | 46,702,376 |
Effect of dilutive shares: | ||||
Common stock equivalents arising from stock options and ESPP | 709 | 1,450 | 1,237 | 2,324 |
Restricted stock awards and units and performance units | 31,390 | 66,042 | 45,558 | 76,420 |
Weighted average common shares outstanding – Diluted | 46,901,098 | 46,810,238 | 46,873,109 | 46,781,120 |
Basic | $ 0.23 | $ 0.99 | $ 0.35 | $ 1.21 |
Diluted | $ 0.23 | $ 0.99 | $ 0.35 | $ 1.21 |
NET INCOME PER COMMON SHARE - A
NET INCOME PER COMMON SHARE - Additional Information (Details) - shares | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Earnings Per Share [Abstract] | ||||
Antidilutive securities excluded from calculation of diluted EPS | 7,513 | 0 | 3,541 | 0 |