OLED - Earnings call transcript Q4 2017 | Universal Display Corporation

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Operator

Good day ladies and gentlemen and welcome to Universal Display's Fourth Quarter and Full Year 2017 Earnings Conference Call. My name is Rob and I will be your conference moderator for today's call. At this time, all participants are in a listen-only mode and a brief question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded for replay purposes. I would now like to turn the call over to Darice Liu, Director of Investor Relations. proceed. Please

Darice Liu

good call. to and quarter Display's everyone. conference earnings afternoon, you Universal Welcome fourth Thank

on call Executive me Executive Chief Joining the Officer. Officer; and Abramson, Financial and Chief President Sid Rosenblatt, Vice and today President are Steve

to and this the reports All with these Universal only consent that should in by strictly in investments statements. Before risks a is that call of not the call call to be Company's the making technologies any Company's from as call expected redistribution, could of as intentions the statements or to technologies, on form anyone property live uncertainties remind portion beliefs, and that Securities prohibited. hopes in those this and contains any the historical written accurate date those Display's to Any is that statements are any expectations, statements as rebroadcast that note growth within important results These Act opportunities these periodic be Display. Display without Universal Reform today's projected. of are a and disclaims Company's These future. the live the Private filed Steve or that in XXXX, uncertainties discussed of XXXX. of considering Universal regarding are of of relating webcast potential OLED of the well update me is is such and call, begins, cause This as Corporation's the not limited those in Display results, and any applications are available statements website. It of differ SEC securities. Universal market retransmission made subject referenced market. let Litigation Further, any the period Universal this obligation Universal but you Display of of actual meaning webcast Display's time conference include, regarding the to the this are is time-sensitive risks of being expressed Display's of call will forward-looking information XX, Universal Company's to February for

like turn I the call Steve over Now, to to would Abramson.

Steve Abramson

welcome on call. and everyone Darice today's Thanks, to

We $XX.X income up quarter per the stellar are XX% off XXXX pleased to the diluted XXX% Act. million with was Tax from year onetime up was income and solid cap a or income million $XXX operating $XXX $XXX for of $X.XX included and Cuts a share. charge million, net million, year-over-year; year-over-year fourth revenues results. Net Jobs

Excluding XXX% the tax fourth net share, was $X.XX operating $XXX income up quarter charge, $XXX year-over-year. diluted diluted $X.XX million or share. Revenues $XX million per was income per were income million, or million was $XX for the and net

tax charge, new approximately was electronic with Excluding record million a PPG. net from of was and consumer the or multitude capabilities per high doubling year filled products at $XX tremendous production to a $X.XX income revenues OLED our XXXX to diluted new agreements share. growth,

from agreements Technology; a new Go Sharp, agreements Display, a and with OLED just was agreement long-term Display, week and VisionX, with announced year, During last new with BOE Display. long-term X.X Japan past we the we announced we red, and development a signed Samsung yellow agreement momentum Ever with months OLED and in and new research next-generation is plans. From to commercial customer's our of activity capacity pipeline indicative we the meet activity expanding and OLED increasing blue new emissive green, system. development and new of significant The OLED industry's standpoint, advances a

of printing technology organic large with the TVs. for our progress OLED We also made area jet manufacturing substantial paper

Barberton, Ohio our a new PPG On Industries. manufacturing doubled by capabilities our production approximately production in fuller the front, line opening partner, we with

Delaware the Castle, flagship electronics New of large OLED time it's labs screens, purchased a DSES smartphone from market, to bright, to the at landscape In opening smartphone, in building consumer screens suite first subsidiary for up adopted adoption technology technology Apple Wilmington, small the the has In the our of beautiful, Delaware. new Additionally, OLED iPhoneXX. grow. continues brilliant its

it's Apple including perhaps decade. Apple's highlighted innovative the During earnings retina super the the features the display is basis that the for next iPhoneXX's and reiterated call, technology edge-to-edge iPhoneXX for

Tab AMOLED X.X display SX LG ultra-crisp Barcelona on tablet. Super Tab Android HDR which launched the the as Mobile at Congress can inch the World On expected is ready The which next boasted with OLED impressive week million at pad X.X a you of was SX in market, one Galaxy front, which first This year an Congress have is XXX,XXX AMOLED XXXX. Display now. Galaxy known launch to the for XX.X In a is TVs World inch display. world's approximately right TV a best the up tablets shipped SX Samsung last OLED Tab Super considered will IT to Samsung reportedly follow-up the Mobile in get

million about For OLED XXXX, LGD to year-over-year approximately by expects shipments TV. to million X.X X.X XX% grow to

two In jump number the to OEM XX. to the was T.V. on Chinese that addition, adoptees reported OLED it bandwagon of which increase total LG major Display expects will OEMs

electronics SID roll inch of that foldable world's Samsung Display unveiling smartphone. at to like a inch and XX plans can consumer LG display been awe-inspiring its to stretchable major up Display in dynamic the Form dropping poster Week, launch from a showcasing first factor reiterating AMOLED topic world discussion jaw its T.V. OLED has the X.X

thin the layers and inherently are As conformable, foldable OLEDs films, rollable.

that paths new consumer With applications, growth. of believe the electronics of innovative are OLEDs the properties new paving advent form of new and factors we

to a expected is warp breather build next growth capacity OLED new industry an of half bit CapEx of number production high we installs, cycle. of expect in a extraordinary volume for next capacity multi-year to a expansion are this wave framework year OLED the After take panel as the We growth manufacturers year. the year of and a which

XXXX, mobile the years fully market expenditures. share Samsung, next a manufacturer billion Congress. overproduction. displays $XX to company For display OLED of its Mobile the XX% month reached CapEx OLED Gen-X Gen-X had a Samsung's per unveil example, new back-to-back Samsung XXX,XXX to Fab Display it's of week AX leading Display and In facilitated as capital SX record retrofitted Galaxy over to at Fab the is expected World with smartphone, flagship LCD plates

and from its its LG of OLED billion robust During call, Display earnings split $XX.X XX-XX throughout reaffirmed between TVs. investment XXXX plan XXXX mobile

the mobile On Display in in the is quarter Pazhu expected LG GenX this to mobile commence third production [ph] year. front,

TV Japan, Guangzhou LG to Display December front, year. in third second the producing Fab OLED new in production its TV in displays mobile in began quarter expects the shipping OLED On OLED sample half the to expects start and XXXX. In this Sharp commence panels of of

new region. an BOE OLED BOEs a summer. brand its throughout Starting smartphone And Additionally, Technology. Sharp plans announced activity plant this screen in production first China, there with reportedly own capacity OLED to schedule start to ahead the featuring year. under is Chengdu introduce with is production slated GenX of of next flexible GenX in commence Construction Mianyang to this in expected is year. second progressing mass plant its new

operation XXXX. fab OLED the the beginning fab. a first the in operations the production currently phase is small to it's with already Ever its of is pilot is year. is later panels flexible of constructing to its first in display Additionally, rigid second and year; the GenX.X Tianma new reportedly this plans third it's constructing line commence half is to come fab. pilot started has of start for and BOE Vision commence Royole is flexible producing of supporting GenX.X half line [ph] expected construction production currently GenX GenX there this Production online OLED next year. of is quantities line second are production which expected GenX Go reports planning expected to

factors, December, OLED cool outlook. front fab novel On growing. OLED which market are quite temperatures beautiful high This LG commercialization launched early the world's the the mass OLED In we brand are its lighting our is The innovative of and benefits and natural and colors and leads all at stage. lighting efficiency, in announced operating to GenX own The Display includes vibrant compelling. power still lighting now commenced lighting Luflex. and dynamic OLED first production form

leading As strokes opportunities of well Sid and more the in vast ahead. details positioned the display participate to a the world's we shortly broad believe our manufacturers, into we go key innovation you are will partner OLED lighting give but to guidance. me let

XXXX, will $XXX we our to be $XXX For revenues believe in range million the million. of

to as As the industry's significant we a In capacity manufacturers industry compared by note, anticipate turn we growth the installed product of the meters OLED the by On as over in base XXXX. end year loading significant the after square of expect call timing increase and takes the XXXX half rates. bit of in resume cycles growth production a and let as influenced to of as to expansion, measured approximately XX% Sid. end XXXX, me that a of the that to breather capacity

Sid Rosenblatt

Steve, you, our thank you everyone again, Thank call joining today. for and

diluted results me Material were was royalty up XXXX, share million year-over-year. million revenues year-over-year. $XXX extraordinary million, Net growth; cost million up income million, up sales $XXX and $XXX of for per $XX materials operating XXXX. in operating $XXX license review XXXX million, and commenting to million XXXX were was Operating of our of $XXX million, up to compared or up year-over-year. income $XXX year revenues net on XXXX compared $X.XX an of or guidance. in our XXXX. million XX% Let XXXX was share was diluted from income per XXXX XXX% $X.XX excluding XX% before $XXX XX% in expenses $XX were income XXX% year-over-year

equivalents in Job in of $XXX up and We share, $X.XX million income diluted diluted Cuts charge, Tax and million was the the share. or per $X.XX with year-over-year. cash ended year Excluding per $XXX Act cash net XXX% or XXXX

new of of on million quarter quarter fourth moving for to fourth million. high the our increased from revenues fourth results; a $XX XXXX's to revenues of record XX% quarter Now year-over-year XXXX $XXX

quarter, up comparable $X.X third quarter's up $XX.X $XX.X quarter's $XX.X million, yellow-green year-over-year's from $XX.X were sales Red include sequentially XX% emitter million, total third sequentially $XX the fourth million. million. up the and XXX% quarter quarter, material $XX.X quarter's fourth of comparable up XX% million, the $XX which last from Green the up million. were from and the XX% from quarter were year-over-year's and XXX% million, in quarter emitters up year-over-year's comparable in XXX% from million the the from the $XX Our million our sales emitters sales

discussed past, patterns quarter-to-quarter. buying material can have we vary the As in

consumer contributing factors moving include the variables efficiency number product to product production for our rates, customer these also factors ordering variables mix, gains. of schedules, a and demand customers, patterns, us. can Some Since capacity moving for ramp of cycles, this are are loading material they production

the result recent take high Typically, For was the million about emitters projections pull-in anticipated is a our may phosphorescent to example, order quarter estimated let's the and on XXXX quarter current a of XXXX pull-in $XX seasonably million recent from but record quarter of our the quarter. on the therefore to be impact inventory This related purchased fourth of activity maybe fourth results to XXXX. that look in first soft Based $XX quarter fourth building believe is quarter. the we prior believe of we at and weigh first quarter which guidance. activity

margins XXXX's the which Moving licensing; and gross million, cost for quarter up compared sales gross fourth license fourth $XX.X our $XX.X were includes Cost fourth Cost of XXXX's of to the the of cost quarter $XX.X to from not XXXX. sales material third from royalty and margins up XXXX quarter sales material million, fees quarter fourth translating quarter of royalty Adesis $X.X of million $XX.X to does of of include and quarter year-over-year million. were XXXX sales material materials margins million and of only gross XX.X% into Adesis relate were which fourth in XX.X%. XX%, XXXX material OLED XX% of

deferred in quarter's million $XX.X million, We of gross quarter operating The overall fourth from XXXX, to sales year-over-year for a from Fourth last was be and per Cuts Included diluted for the the onetime or and charge in a charge of margins The quarter's Jobs from diluted range. quarter was million for onetime to year-over-year a $XX.X and XXXX. material $XX.X $XX.X fourth the from expect up expenses and Tax on quarter from includes December in quarter $XX.X the of share. liabilities. of million the fourth $XX.X Act. $XX.X profits, per quarter of the in and Act million million. tax in share, fourth overseas Jobs up quarter our of up comparable the the million Cuts the was XXXX income reevaluation $X.XX resulted Operating quarter $XX.X XX% the XX% elements; two comparable million was or income XXXX $XX.X Tax charge for accumulated enactment up XXXX. fourth excluding XX% million $X.XX XXXX as assets of of the the cost of tax Net

income charge, net per diluted share. the tax $XX.X was or Excluding million $X.XX

Now to current range upon looking million. expect $XXX our to XXXX, to of we $XXX revenues forecast based the in be XXXX million

past Our our softer a quarter to can with financial the we of revenue first industry's reflects in XXXX shift either expected up results. the note, a in the have growth year. half in would guidance second impact in the We pick momentum as directions

XX% XX% quarter-to-quarter, to the few expect Moving quarterly primarily the our along aggregate patent to gross overall in the SG&A, range in which we is year-over-year R&D. R&D gross to with expenses consistent margins; the gross to can driven are years. margins and increase vary XXXX costs XX% Operating by expected past margins of to of while in range XX% be material

We few expect basis approximately rate points. be the a take effective XX% give tax or to

we growth anticipate significant XXXX, to For resume. industry

square with a the of two ramping XX% OLED of majority capacity the increase approximately next over capacity expect installed to meter XXXX. the We years in base by

to new January on recognize accounting Company's supply addition, guidance revenue license will impacts recognition, a estimates we rule; In for be which revenue X, need material adopted XXXX, the various under to and agreement. upon relied new the ASCXXX

be royalties revenue over such contract on emitters a license various upon emitters sold record fees, then will be from the license rear consideration Company recognize based amount the of one will contract sold the term. result The which first estimated within total Company will a the material and will the from of royalty be As Company is royalty recognize to longer to in revenue The ASCXXX, given revenues revenues total be a derived. anticipated fees and the estimate quarter licensee in contract the a to of customer for nor amount when total and in must received payment no period revenues made based [ph]. proportion considerations

to approved call the paid the stockholders Directors agreement. reflects increase has back will as an I rates dividend use announce per of XXXX. of and dividend. outstanding XX, of capital emitters it applied continue the an price a XXXX it term average estimated the to essentially will our the our using the expected that, will for we to revenues, growth and ASCXXX shipments Material determined. and Universal sold per return will average emitter to period will selling revenue of Display's year's we the will sold of during price $X.XX be the materials pleased customer price positive record of to shareholders. be business the be in to cash are what applied XX, A emitter standards the determined contract total understand from be share to which close we sound average period. that contract future generation The material actual turn that cash that commitment payment which For upon in selling growth will given revenues last long-term confidence be over to And estimated March revenues; dividend royalties, to selling means accounting price of term based flow With March this and licensing proportionally on the amount We selling then sold recognize Board to record in be Steve. revenues new is very and complex opportunities for throughout will believe and results robust lastly, in using increase an to

Steve Abramson

this we Thanks, activity upward momentum, confident Sid. pipeline To our Industry and recap, trajectory excited as as of well CapEx are in multi-year is customer cycle. growth growing. our

The display story driven rollable story factors chapters. in growth our OLED its showing are growth markets conformable, and immense form bendable markets still as in and opportunities New of such by lighting. innovation early are addressable further the and OLED

largest, and have phosphorescent are accelerating and technology. in At leadership focusing Display, layer We the extending world believe strongest OLED we the our we position emissive Universal deepest that on innovation. our team

and our infrastructure materials by years foundation experience continues balance robust OLED would an operator, vast are expanding technology technologies a potential. for OLED know-how, headway differentiate materials new creating from all hosts; and the well customers, emissive recognize employees making materials Q&A. exceptional leading for positioned layer we our and we let's the best innovation. also pipeline your with IP ecosystem materials Universal green, of to that, Building blue, including that billion and a phosphorescent respect emissive the work growth XX our and our like with built portfolio I are ongoing system. to On market's and value in in support. investing, us to our which Display continually The player to the yellows the global expanding the over and in excellent front, and blue of commitment start continued new success. while matrix. believe excellence sheet; we And and as partners bright commercializing are we red, ongoing would continued With work shareholders backed I like $X.X for development customers, as of over OLED to long innovating thank emissive commercial depth our also future benefit experience of in is from to term increasingly innovating is of and an for OLED strong provides on their investments, and

Operator

Sachs. Goldman [Operator Brian line coming first is question with Our the Instructions] of Lee from

Brian Lee

sales was? $XX to contract like know on the it anything anything out is the else OLED prepared the than better of your of you expected for lower Samsung growth aggressively leading all to looks remarks in million adopting view less this maybe QX million your it's crystal point, shy signed now clear in is addressed about about high the you're consensus end and you expectation pushing in that's I the with timing be there week $XX because customers rate or but XXXX guide or seeing came just what Or Maybe last this on year-on-year here?

Steve Abramson

In and ordering our will tops-down $XX account the there and best million And $XXX XXXX believe as that impact But million aware, in taking provide their significant bottoms-up on million. patterns is model; $XX on best our based think into we estimates. believe the and it's guidance. the customer always conversations, guidance of forecasts, some we to has our we don't you're well range Clearly, we the to impact our from revenues be million $XXX ASCXXX. but XXXX,

Brian Lee

year-over-year be sequential year-on-year. second expecting would commentary into the guess it Thanks. bit weaker still run about And versus versus we half; first deeper growth then growth but given I digging the revenue half can revenue think guessing the more growing were up first I just pull-in this year-on-year licensing a you're that. first mix here first licensing in you the the materials mean materials question it's to this or fair half royalty after and that and that is think be May royalty start the guidance down and is secondarily, I when around revenue a we here; materials to in a mean, referring assume to assume year I'm rate? half, weaker starting when materials half on -- you of little does in basis say second

Sid Rosenblatt

business new opportunities a by of but of our believe kilograms pull-in percentage of new rules, the licensee be to based going and we are business ASCXXX the we is that capacity, the extent of upon and the sell utilization stronger life And estimates based driven for date that it's second the year. of that to given we doing that's rates translates we all -- is One be with with royalties will estimate are recognize into are whatever year or in any estimate. essentially sold. second in that half whatever lot upon applied that us actual capacity upon believe the is we've being upon is, then be based upon then And activity, in our will material clearly what impact will revenues new to the and based the going we our over based the way sales material of fees us quantity and based so it thing business of license think will seen clearly what quarter the do revenue -- the material upon royalties be contract; are be the to or fees ASCXXX some to whether that half our grams

we recognition is now revenues and And really license I and know business material long-winded on answer do based really therefore and know was our And so, our a fees. both is revenue really our our royalty license but material now billings. our drives revenue business that hopefully from it helped. of detached

Brian Lee

question Sid. That I -- up it mean guess, is another helpful. brings I

licensing royalty If know [ph] materials if had you and and and ASCXXX payments given payments good that but impacted I XXXX how that saying that royalty so the to was recognition which would the that you mean your hurts to way applied year, revenue but on you have and you would for you you're had licensing 'XX actually your just 'XX dictating applied didn't revenue revenue you 'XX, have rhetoric in seem materials a I didn't because for having is well. described is as ASCXXX the your in pull-in saw 'XX the negligible suggest it impact number

reconcile And be trying that just of to impact not than may way more described it a how way I'm down the you so here.

Sid Rosenblatt

it all of impact. signed those think you were lifetime. to going do back a to have would XXXX, literally don't we contracts back when And go but estimate an negligible be is to it mean don't I a and significant to

it really can is explain because did to see inventory one do it So the have we much think us impact more pull-in of don't that easy the we numbers. an and The I to believe is helps help forward, impact. move

Brian Lee

been threw context; for The us estimated you're helpful. give out, guys much year growth have have 'XX? And estimating put up it linear and to it revenue ends of Just you 'XX, to between then do million on think how 'XX would versus you $XXX the saying also 'XX. a XX% much it to settle if being weighted just it's or to had weighted some to been you Thank get more that's trying more 'XX sense million? you're where you Maybe more versus a what can you into guidance 'XX. or would for capacity 'XX it a If in $XXX out sense it is to you.

Sid Rosenblatt

Samsung It's our we others a it raised doubled in each Clearly than our anticipated we material yearlong question. guidance that at revenue because and had quicker difficult capacity time. seemed or grow XXXX, and

but a really last exactly capacity amount to things year have or is we modest lot don't know ramp for when we by have believe see expect faster fab XX% will of growth and be and that from things we won't when predict. than us but facility from of per ramped the that, XXXX they up ramp of really, believe a year. quarter-by-quarter then, and end Clearly, really have was that that's some would BOE end to that we don't you we we the in will year, they impact they've others still we it converted do beginning be that analysis of is is the but some do to So the some growth got month do ASCXXX, And for a to that the at be Samsung see the you installed we'll quarter. to -- a by three have anticipated have LCD coming and in of of example, every we honest, the plates difficult XXXX by XXX,XXX significant there,

Operator

of Our Company. & Ricchiuti line Jim with is question next from Needham

Jim Ricchiuti

visibility XXXX? I but have from bit wonder talk are expectations as customers large what other a pull-in about customers. customer you can with of you at you about inventory the out large customers look outside Clearly, you there little hearing at is your your the Sid

Sid Rosenblatt

the Well, in number think shipping actually clearly and it's terms other and second X.X million start when I LG's expected upon to make half at you've based probably some built-in, reported. million what's TV's they when of capacity those been mean of in the and that got right. million they're that go TV's are units; talked that a the -- estimates BOE they to builds X.X now; of we and read is looking that X.X about up start products number numbers will will year you LG's that believe Steve which process to or customers we or is sense -- something

some new think some Some yield help will because for us, of their that yields based so those all their we and going increase generating improvements upon better of of they those them from getting -- there incremental are it which that will be better, some materials is because be up are sales good see you'll up went bottom-line.

Jim Ricchiuti

the it say The the congratulations that in new back you that in agreement is you than that, agreement on put agreements broad more agreement Samsung, XXXX-XXXX? agreement. the signed about anything Is can in with favorable there context, a strokes and

Sid Rosenblatt

a no are and We confidentiality, years to this have Unfortunately been strength continued win-win agreement it providing recent contract. the was Samsung for We've believe Samsung. we XX had with longer we license information. strength due with really partners and that fee illustrates that we've the

Jim Ricchiuti

like bit QX wonder sequentially It and OpEx; spend? R&D in to little Thank a on And progress particular, about about quite spend. decent R&D -- that I it in higher number you you're a could be it say you. about blue? just up increase one you The talk was the bit by in amount expecting up in general in XXXX. can What about sounds a if

Sid Rosenblatt

that we across of do looking and been so we're to Adesis our building down up building I R&D being lot to our that. mean, is technology, at team Board. to at expand done We've a our on up Adesis intend going we're work the team because efforts continue the there

that. red, do newer think develop number emissive systems We are as work that said, and to historically have or lot blue; a we worked a it's we going better that is to to effort green whether us also going We getting Steve we and believe help of of so help a us all this blue. CROs commercial to to continuing is because of closer this with are

Operator

is next Evercore. with question the Muse of Our from line CJ

CJ Muse

first on to material just you on to one clarify pull-in; securing guess through million million license? the it, that negotiation in related renewal of that from customer? question, $XX I to advance think was was And potentially just the the if of $XX

Sid Rosenblatt

can't vary our clearly purchasing Samsung our customers, We of lots specifically for quarter-to-quarter material about customers is reasons. and general, of but in talk can activity one largest

noted, forecasts activity previously honest. we were What and shipped the the believe was we've we on order As fourth pulled-in. is be X.X -- in reasons earlier to months speculation it's of what based really quarter,

CJ Muse

share as this around change? revenue I guess I'd love possible, a given accounting what this moving parts follow-up; to without all been us you with change, hear could the if would your have guide

Sid Rosenblatt

it; do to we looked ASCXXX be guidance at think we from our revenue it is have detached that clearly billings. did We significantly don't I With not mean, different. going -- is

billings our on contract. royalty on those our than our in going our emitters revenue higher example; average that weighted similar is an heavily emitters quarters results And volume upon is today you revenue. with cumulative higher that over than our revenues. So emitters, will to faced mix and the of discounts, our are heavily that be products give mix In licensing quarter be priced will our life our price the an weighted sale product based -- lower we've billings lower with through priced

CJ Muse

the QX? Now said the one you. your in licensing; to terms there? to were should quarter those accrual, and in think renewals what were that revenues QX be; calendar the longer of Thank the question second office And and shipments in timing that you believe going royalty what terms come in the we about would are then happened are I materials, contracts? of you no of How a in

Sid Rosenblatt

you earnings; directly that goes to get terms QX would -- would income the get quarter royalty up retained which your in amount never In that fourth royalty statement. we report in of historically, on payments, the QX revenue pick we payment to

royalties you and based your quarter under you in it your up; the report QX. higher be. it would bit lower revenue would is it now what it calculation essentially all that out when If you comes to true company or have estimates next the XXX So upon in you do be of what then QX in estimate upon estimates based

at things As at sales, it at it believe you look look was data, past, extent royalty we a look some based essentially we'll look other to at what at what of on but material different you look is upon in the lots we base. -- you

you it entire you the use royalties to get at expect you it going with I'm is -- of assumptions, quarters Again, on. you then up that number to contract, few of look material any over what compared percentage that you that your believe the what's then in not really value If as a come our results will understand what use there a number be will and entire the complicated people out royalties. what given to -- and you you it's think different you sell contract; percentage I sales that the for think for quarter to take is and I is recognize

Operator

next from Susanto Gabelli the of with line Hendi is Our & question Company.

Hendi Susanto

assess license material of How difficult when through are sales QX mentioned the can the I'm I payment, calculate and out? to life it over you say based ASCXXX are on wondering patents should the Samsung, of numbers -- the year -- Under ASP Samsung is to contract. estimate for XXXX? think revenue mean royalty patent To but how that magnitude we and let's

Sid Rosenblatt

top use the an builds number and of We we out will where you have bottoms-up, what reasonable total what contract, not receive Well, capacity contract. fee emitter take royalties the quarter believe then that estimate will in you be, you which; think that what data it. percentage what I'm if and say And over what receive saying is be, a of all works will and much what given it's we as can in would the to life. which then of number what royalty the with will industry you've you you this based life any a actual against. said, is will you is believe upon analysis the own then -- we license quantity And sell we to it the we've will we If your do top-down payments, you be amount come the your a get we the to be up contract, make the that fixed -- estimate your again, over that what total do using based add how if way you we determine the of use sales will have up get.

Hendi Susanto

your words, I is have factored And considering much blue agreement and is patents, whether speculation I for in inclusion I'll be in try TV; new asking asked Samsung may you and -- anyway. OLED TV other that know then OLED of materials too consideration? able there future but to would indicate Samsung all into I'm re-entering

Sid Rosenblatt

spectacular to customers And We TVs. believe help from agreements want our wearable's the include customers past, and and collaborate they with all agreement the as to that we've OLED products TV's with and are and our great license we sell. all stated them; that of in

Operator

next of Company. Rob line question Stone & the is Cowen from Our with

Rob Stone

that the is you've first or shipments how of your be orders of trending the potentially quarter; you is that to to-date. pull-in couple But what far from any of by difficult the is pattern about in the give -- said to the theory? ship because Can you've quarter out backup a the in Further have up turns know in that the comment weeks quarter. not through color even quarter last could been so the order seen -- I you backed past QX pull-in

Sid Rosenblatt

the will estimates, upon to believe first be down Based quarter activity. current we sales that pull-in due

see We based result quarter we pull-in activity we first but in the in the in from second a upon we half and that fourth expect pickup that this activity quarter order purchases the believe see. is to current also that the stated

Rob Stone

grow and but market capacity X% midpoint about XX% need revenue relative the are confident the guidance about thinking to under expenses forth ahead? XX%. your like the growth and so you if you're sort expenses you to activity Are Do revenue? managing or in more respect than feel growth With you going for to the being is to the expenses slightly revenue at year; how at you invest all of to

Sid Rosenblatt

a work Well, the be because the see we industry where all said breather, make significant our are year that we a always is time as And pushing growth OVJP. but area includes is doing effort year industry it's new number taking the year in manage on expenses believe try this that in a may envelope to that areas, one to the technologies to developing they need and we we're on new we XXXX very this thoroughly the and emitters what we we we another in customers blue it. want of we're when lot of sure need, getting technology, need putting continue

point we metric weighted to So we it that. our think this never revenue need think I in stage tied at have such we to towards we as this won't too is any heavily as early if R&D but do R&D don't and said we spending efforts it's because our

Rob Stone

planning early or us year. on equipment On OVJP on were late the think this year where any into you subject lab your of update larger of you next getting stands? the that last for give development the piece OVJP, Can I

Steve Abramson

and excited commercialize in a and it players also number that could in industry We this about we're still we probably technology. think about will the really progress come early year talking of program to we're this

Rob Stone

turning contribute Display thinking late their relatively for year; XXXX? LG how for mentioned speaking the first larger facility revenue about just last on much lighting you're time does how You to lighting

Sid Rosenblatt

it significant take GenX ramp it needle. really it XXXX, think -- I in and believe a moves is will some we the facility slowly. a before it will number It's sized time probably It will up not be

Operator

[Operator the with Bank. Instructions] Sidney Ho question line The is Deutsche from next of

Sidney Ho

beat this consider forward? dead for revenue some should supplemental at billing Can would to change going cash of sense some think in it And guidance how of recognition flow disclosing per us information earnings Sorry year? a you the free horse; given we instead look free provide flow cash a share. about as make us the may you information to

Sid Rosenblatt

I our that our in-line probably million we of Well, with expenses, XX% $XXX our plus. at generated XX% licensing last on objectives. business, is -- cash It's year profitable margins business than are we business higher material believe and expect our and mean to very to generate a we are

we move generate this we So that do forward. think business flow will as significant cash

to capital though announced, doubled some we that is back from things is, of so shareholders. the we do did think just important something our to that get to -- that is that of One dividend we it our

Sidney Ho

much that's sales is, year shipped maybe of last My got an back year XXX% than grew second is pull-ins question about material if back guidance? material clearly follow-up that at And versus your and last that, if increase about have think call; XX%. sales if how number units? you the the even up that ASP look in I those OLED how know you we films more Can talked like in And earlier, don't the which on what's walk XXXX driving into should you us increases? growth earlier it just your we you talked you about through baking to are

Sid Rosenblatt

exceeded in expectations. that clearly came XXXX our Well, the on capacity

higher long so until to the average we of material upon to the time, quarter-to-quarter they units price. much sell than our from sales month-to-month. that XXXX of a recognize is based So build over things there in And -- were And an revenues difficult inventory, lots occur, XXXX; or is do our of using it selling we material can it's may number shipments period will that customers there you not sold material sales it anticipated. get tie

information with to you the could extent of sales higher priced or So do own priced of receivables is lumpiness and to giving that some don't information that do there think having some believe we like meaningful. believe lower going that calculations, so we is things some -- help. materials; at to I difference where and your don't material If extent don't I revenue some deferred to was of look that's -- billing materials significant, is there's and that think

Operator

[indiscernible]. line question from of Our next is the

Unidentified Analyst

year. growth this your on wanted capacity clarify to Sid, I comment

it I you like fairly line, XXXX growth mean the XXXX, won said, mean you I you you so XXK, if a not at -- throughout are us there. growth, XXXX, look they but if low you XXK; see at growth XXK, modest don't looking said I much said but You versus when start AX But now compare does XXK yes, to substantial year? utilization

Sid Rosenblatt

go us. primarily Well, correct, are by us, translates revenue new into up, driven industry XXX,XXX base and a as aware material, for rates if if And or rates patterns year ordering up and go current go to upon upon means Well, this see of and lower we business our material. more you that lot and means utilization chatter, from -- to they expect Samsung. of is half less first based material the they that Utilization down, also at you're lines capacity a new based impact we go if and down the did slowdown. production the capacity

to expect in second the We half. look up

Unidentified Analyst

plant TV the production. on into Samsung's news and to recent related Second question turning OLED

OLED a versus News to say Samsung adopt Display. OLED trying white is technology LG blue of

blue can coming lifetime And However, the it is today. said fairly I your OLED Samsung don't TV I and a that by think time if Samsung short [indiscernible]. is will you make be soon; will the blue current beyond panel, use phosphorescent XXXX-XXXX, even you blue because material that think have

OLED OLED maybe is currently -- impact too now this versus you potential know I is; LG are question business doing what Display? with blue to my early is on So estimate white

Sid Rosenblatt

on one we TVs on number difficult for speak comment and speculations to the customers. and our It's us the can't of different for Samsung

blue We commercial working expect and are close. it and said, get we do and that are very working to we commercial are we hard get to a as we blue have a

two the should be at So XXXX, of somebody side even or is TV's years. on whatever making three that meet need XXXX lot material able a in or we there OLED their in development looking was believe on going if customers to

Operator

from Mehdi of is line question the next Hosseini with The Susquehanna.

Mehdi Hosseini

C? revenue A, assumption B mix for should by customers Given how customer the think and your the new change by shipment and revenue about the your recognition; in we

Sid Rosenblatt

-- still customer the B mean and report requirement. that's will A, C. SEC Well, I we that by revenue is

revenue but -- will it that, do still and that XXX is will guidance which the will We be now GAAP. upon based

so Accepted it B our C and Accounting is will because So we the customers A, we always upon report, report Principles; it we break between out -- Generally based we requirement. still whatever that's

Mehdi Hosseini

change is from revenue the was B, entire from would I the you -- hear 'XX or interested the to A, we and mix more mix remain 'XX look to change; would to if there a how that the customer were mix be we by should same percentage to going assumed guess I at C; 'XX? that

Sid Rosenblatt

we have. To customers. customers sales be and we -- don't down honest; A) measurement we customer upon how between list order a It new end it's out that break do revenue, between we XXXX that do material it -- it don't we break will material list much between also our licenses, would is in since

Mehdi Hosseini

that -- cautions demand the is C to by and was reason far customer OLED to and B positive Samsung customer think confusion extent under expressed B because C on is what very TV the is and the conference call asking just and but applied I'm that A The customer hear trying customer express is, I I'm for earning would you by and broad-based what very sounds very cautious mix also or the earnings China that reconcile upbeat. cautions the rate; is I a upbeat to customer under rest driven call, the is of low utilization from conference view so

Sid Rosenblatt

from speak can't are base his stated for our we we TV's as our since as -- and specific this LG -- customers; we Steve information largest Samsung cautious -- customers, million, is we very growing see and and from customer BOE. in have are they said And correct we are cautious. upon X.X see million we Samsung to being however, You they don't remarks; forecasts X.X so prepared that get and customer from we we

to customers -- downs, on. into pulls, we've you've built low is, our pushes we customers piece and other talking it going got some and can't still is utilization revenues really XXXX comment in and and still got growing specific We So the increase are are and our are there rates grow. about is and -- there that ups is over XXXX

Mehdi Hosseini

wouldn't of or then mechanism book matching on better licensing And a to billing you regarding your audit way revenue? for why royalty; new the customer accounting have

Sid Rosenblatt

different do we I our have revenues have mean, billings. things. when That's think customers, or two our I the of that under about they don't fees, audit. determination license that user royalties, we always going to not rights customer to wouldn't you talking are about talking billings, our customers -- while not think matter. to we're fees what we're I have or billing you believe royalties contractual impact contracts

Operator

I or remarks. would Thank back to the you. for like any the session. turn This additional Rosenblatt to Sid program closing concludes question-and-answer

Sid Rosenblatt

support again night. interest you a for you wish good time your and your We Thank today. your all appreciate and

Steve Abramson

you. Thank

Operator

concludes Thank conference you. today's This call.

You may now disconnect.

Universal Display (OLED) 23 Feb 182017 Q4 Earnings call transcript