OLED - Earnings call transcript Q2 2019 | Universal Display Corporation

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Operator

Good day, ladies and gentlemen, and welcome to Universal Display’s Second Quarter 2019 Earnings Conference Call. My name is Doug, and I will be your conference moderator for today’s call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded for replay purposes.

to Investor call Relations. like Liu, to now of Director would turn over the Darice I Please proceed.

Darice Liu

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

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

of available consent you is the let a Display’s XXXX. live call call Universal time-sensitive of only the the webcast any of of and call this property this being call expressed retransmission webcast of the prohibited. Steve This begins, today’s of redistribution, will information rebroadcast Before Universal Universal call, be on any August of made or is without form in accurate of as written me remind strictly for this is is X, Display. Any time Display that portion contains period date website. live Further,

report to forward-looking statements company’s these uncertainties number on we and During based and company’s current discussed investments Universal statements uncertainties the call, actual should are any our and concerning making filed significant by These of periodic expectations. with materially. of may results may These this differ risks to subject risks make any in the in are securities. disclaims Display be update the any referenced obligation SEC anyone statements. and

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

Steven Abramson

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

million, net $X.XX diluted of about ASC $XX.X revenues have Under million and $XX.X pleased share. million, million, of are the quarter the $X.XX and $XX.X We of under second million, XXX, our XXX operating income prior or income accounting operating ASC standard, would report revenues XXXX share. quarter million of been net same of $XXX.X second income or $XXX.X per profit $XX.X to per at XXXX

we’re we or believe customers we Including the of what these reasons. With all guidance. our due pulled-in or year as from Chinese to I’m our approximately estimate $XX $XX the is orders to XXXX to of results them raising of revenue grow, from million million trade-related second-half continuing

Our $XXX the is provide XXX, to million. XXX ASC of new expected in Sid $XXX be $XXX the million ASC to $XXX million. XXXX million further details XXXX revenue range revenues to forecast range of are under Under in shortly. will

the months, across to activity consumer three In past OLED has increase continued the landscape.

and a display OLEDs smart TVs the have premium in for gaining segment market. is traction choice smartphones, strong market premium watches, As emerging of IT been the consumer and new electronics

interest in this commercial market driving XX mXX, Display’s Alienware Samsung Studio IT. XPS OLED Trade Pro expanding to IT From announcement Gigabyte the focus OLED Edition Duo, what’s Razer Dell at ZenBook products ASUS AMOLED May June, laptop it that makers, XX, Show XX, to the showcasing the AERO and Computex its was including and in Blade Taiwan’s in

enhancing gaming the noted displays thin deliver Samsung that also announcement, enable color not notebooks for AMOLED that mobility and designs. outstanding noted in bezels As specifications low-power content. and the reproduction, by but are for seamless AMOLED for display capabilities ultra their slim known, consumption, also graphics best their panels only They streaming for high-resolution and light properties

True colorization. stunning believe to Samsung have and response displays with XG while cloud speed of era most for experience that rate delivering have its DisplayHDR up display further AMOLED the AMOLED high services technology. rate, XG rich Black allow users the been highlighted rapid in will that unbelievably streaming exceptionally solutions They commercialization their and optimized the frame that visually latest

made sales QX high-XX% in display significant quarter-over-quarter revenues expects week Samsung grew Additionally, Samsung its announced that the last and up Tuesday, begin range. the that OLED And Galaxy shipping to Fold September. percentage on it a in panel of reported

second-half the shipments with growth, increase year. in over the the of Looking OLED forward, of Samsung forecasted utilization year in the first-half to rates

its ultra OLED total size size. solution earnings spanning strategy, out from call, to small its laid large During recent Display LG

noted the of On its OLED year. LGD will commence side, in this operations mobile plastic Paju that plant the second-half in

Additionally, LGD the plastic its and medium portfolio, also display market automotive for will months. the first small coming launch augmenting its in OLED

the to per second TV expected factory initial will completed On new fab China this doubling month, substrates the total reportedly in installed LGD nearly have Guangzhou, per large be month. XX,XXX Gen size front, an of XXX,XXX X.X at This substrates of LG’s capacity end output is OLED month. to

Last announced its of month additional commence the investment substrates in Gen first-half a starts of will in first-half XXXX, per per XX.X month XXXX. which TV the with billion XX,XXX an Display week, substrates for new production starts in Paju, XX,XXX LG OLED $X.X plant and

and their reports, Chongqing According third currently month, announced China is to OLED respectively. facilities to second opening similar be over investment fab leaning three Gen slated fourth in Last to OLED substrates of month. are next the built XX,XXX flexible fab fab as per in in starts in Mianyang, well a expected OLED BOE. and Chengdu, to BOE its fab OLED the its there Fuzhou, years, have China’s XX six Mianyang first announced as OLED is

is on to Visionox accelerating building pilot year. is This production plates at per Visionox being end Gu’an and XX,XXX expected Hebei fab fab OLED to homes. year second systems production in month its and OLED According smartphones, month. the intelligent reports, last this will devices, The plates which is Hefei, wearable in of produce its also production commence expansion its XX,XXX vehicle-mounted per at company line commercial

technology in lighting, In applications. with Audi collaboration announced OLEDWorks OLED its advance to lighting automotive

work Brands, expanded to arrangement exclusive OLED company, portfolio. an North America’s announced OLEDWorks product an on largest lighting Acuity with Additionally,

innovative OLED to revolution intends for OLED series in OLED Luminaries applications. develop lighting technology, this The OLEDWorks using architectural of just Brands, started CapEx affordable a getting cycle. Acuity is growth and multi-year

square estimate XXXX XX% year-end increased will the year-end capacity We over base installed approximately OLEDs continue have by to of meter XXXX.

the curve stay continue and leverage leadership of developing front, our R&D ahead and we’re materials technologies the next-generation first-mover On new OLED to to position.

initiatives. our through walk some me Let you of

novel we you up-closely in very OVJP and very data. we’ve the direct printing, solvent-less, perfect At been OVJP, our process first our essentially have dry line Trade pilot panels. for time of is printed early over X,XXX organic manufacturing system. to is green printed already lines to of for tool mask-less, Week vapor lifetimes hours achieve printing the very from LTXX At area panels able were we our showcased nits large PHOLED. view for in Display Show, pilot This OLED at able encouraging Display for XX,XXX SID’s at jet May,

system, of RGB us And just last month, pilot we which our to panels. enable third and last full chamber color will received test the make

continued making for and path commercialization are of excited about OVJP. the progress the are we We

phosphorescent With materials, a and numerous and including yellows end users, continues reds, greens, myriad customers be the new product have multiple who development of to our priority. roadmaps new discovery, delivery blues for highest emissive of

continue in for the our work ongoing to emissive blue phosphorescent we make development on front, excellent system. blue commercial progress Specifically

As of meet specs new and of products, a continues to adoption designed broad smart consumer including and OLEDs smartphones, recipes with a number watches, tablets, AR/VR, end of be to user ever-demanding those specs. corresponding TVs, ever-changing array need evolve automotive across OLED to rapidly the laptops,

will a highly every efficient commercial and accelerate of ensure solutions. the phosphorescent have which proprietary at network stack cost-effective customers high-performing, censor partnerships are emitters, our design partnerships. OLED to on establishing enable essentially These and help of been our we the OLED OLED material To pace, heart

to be to announce expect months. partnerships of the We some coming these able in

PHOLED been commercialization on have We also our on roadmap. host a new side-by-side host materials been working developing with emitters. working We’ve new

complementary the sales establishing us, frameworks few the be partners that over are customers, we these a past partnership of situation emitters. to been partners will with direct is phosphorescent that of creating customers. have specific One These and win-win our volume companies to our manufacturers to for proprietary hosts local material commercialize for our hosts complementary local years

be arm. of announced And startups lastly, and with UDC establishment late-stage disruptive pre-commercial focus the established companies that our investors, development ranging in we impactful Ventures any innovative companies. and to Ventures, entrepreneurs, to our research stage, to early and companies strategic with strategic We area. UDC at partner fields through prototypes venture seek related could seeks May, to be stage, from emerging corporate

our our customer initiatives our and our believe success. other that enabling support of focus therefore these and and We strategic primary success strengthen will

note, call that Sid. to me let over turn On the

Sidney Rosenblatt

joining XXX QX were ASC and Thank you, today. call first thank up million $XXX.X quarter under XXXX’s Steve, you, for Revenues and quarter everyone, our million, from million. $XX.X for again XXXX sequentially the of second XXXX’s $XX.X

revenues of As manufacturers, of results due been $XX.X first pulled included in $XX to $XXX.X to Under an believe million to quarter which and Steve million the quarter sales million. XXXX have ASC second-half quarter’s second Chinese revenues trade-related panel million. $XX This to were compares our QX XXXX XXX, of $XXX.X concerns. of would from XXXX estimated in mentioned, million is we this

we as see, the inflection XXX increase, lower revenues and than closer and ASC As be then the XXX when ASC hit can generally ASC will XXX. you XXX ASC point, become,

second Our of material $XX.X quarter second XXXX the in million and million sales the sales XXXX. $XX.X total of compared to in first quarter, in quarter were of $XX.X million material the

million in of first to in million. yellow-green first This second emitter quarter in in million $XX $XX.X in compares million and second the XXXX to XXXX were of emitters Red $XX.X Green $XX.X second XXXX. which quarter compares were second XXXX. emitter million. quarter This the of of XXXX the sales quarter $XX.X the quarter the sales million of the quarter XXXX, in $XX.X of and our include

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

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

Before shipments. license royalty billings license irrespective recognize revenues you will revenues, OLED want ASC remind we to under and to corresponding occur, we discuss royalty of in XXX, that and material proportion we QX when

$XX.X royalty of second Second were $XX.X to of license and million. the quarter fees in million This million XXXX compares the in first $XX.X quarter quarter XXXX. and XXXX

quarter Adesis XXXX $X.X of the the second million to This quarter million. quarter were in revenues XXXX Second and million compares XXXX. in $X.X $X first of

Cost second of million. quarter $XX.X Adesis the XXXX which in of XXXX of first quarter and XXXX. sales, the million sales of $XX.X for the include in million of compares $XX.X quarter This cost second to were

and the XX.X% materials sales only of of Cost quarter quarter does material OLED in $XX of material gross to not of This compares relate which the XXXX margin cost into and of XX.X%. were XX.X%. year-over-year’s sales, Adesis million, margins comparable include translating first material to gross

$X.X included reserve material impacting quarter margins inventory of gross million an by This X%.

we years, few material as with last be overall we XX% XX% to margins gross the noted can vary now gross year, material quarter-to-quarter. the Consistent this the XXXX expect have margin past, in to our For in range.

up million, quarters million $XX.X last was sales of from year-over-year quarter’s up cost excluding the $XX.X from $XX.X comparable expense, operating XXXX million. quarter Second and

Operating was $XX.X under income last second XXX quarter million compared million. $XX.X year-over-year ASC for quarter the and quarter’s of $XX.X comparables to XXXX, million

second quarter Under compares operating quarter’s $XX.X ASC to million. income been would comparables XXX, This $XX.X have quarter $XX.X last million and year-over-year million.

quarter ASU Without second would XXXX XX.X%. XXXX-XX, have approximately tax tax XX%. rate XXXX rate was our been Second income quarter

absentee minus expect or plus For rate percentage the our XXXX-XX, tax XX%, year, to to effect continue we points. ASU a few of be approximately

ASC second or or the was or for per last share. year-over-year’s $X.XX share million, $XX.X of quarter diluted million, Under net diluted diluted XXX, per to share. income and $X.XX the $X.XX million, quarter’s per This quarter comparable $XX.X $XX.X compares XXXX

per have income share. $X.XX been quarter Under the $X.XX million, per last diluted share. second or share or $XX.X million, This diluted per million, and compares diluted ASC XXX, would $X.XX of or our year-over-year’s comparable $XX.X $XX.X to net quarter’s quarter

equivalents the $XX.XX or approximately and approximately quarter diluted ended cash, per short-term with share. of million cash $XXX We of cash investments,

new we billion assets totaling financial achieved time. Additionally, the a milestones $X over with first for

variables, expect million to our to under XXXX as along be on are increased mix, to expected current guidance. have range the XXXX full-year’s revenues XXXX We the guidance. XXX, range million. to product ASC now revenue $XXX $XXX discussions, million are of raising million. Under XXX well major operating our expectations ASC of as in $XXX Based our levels, in and for to we Moving customer $XXX be other

hit I revenues, be the As ASC the we XXX XXX. will XXX inflection generally and the when mentioned than point, higher ASC between spread lower ASC XXX earlier, And diminishes.

XX, to quarterly will business approved as the XXXX. of a XX, Board be September the dividend, capital positive Directors flow to our And XXXX continued paid record close dividend which reflects cash September lastly, $X.XX expected on stockholders to of of generation commitment our and The shareholders. on return of

Steve. will back to And with that, I the call turn

Steven Abramson

the redefining the are ever-expanding not TVs, are OLEDs only smartphones, simple, and potential Sid. versatile, in of continued well Thanks, and an as the roadmap nascent in OLED we the adoption. flexible display as design, The form portfolio use they from OLED laptops array of how and leveraging product immense market illustrates products. all even tablets, beautiful growth consumer wearables, inherently stage feel the of progress display this the OLEDs, factor of broadening

Our OLED an in mantra continues technologies vision, has The and in proprietary Universal exceptional Display integral partner and to our has Corporation materials innovation marketplace. commercialization OLEDs of of resulted value been the be being and phosphorescent the into reality.

high-performance our We customers emissive position portfolio on experience, leadership technologies, and cost-effective the and the innovation and steadfast of are and new have proud focus solutions. materials execution the to expanding industry OLED most layer we’re extensive energy-efficient, our enable of with created. and With we product well-positioned

to drive, accomplishments of opportunity heart shaping elevating Universal and advancements. and each this dedication in take thank for to like desire, employees would Display’s their our and I

committed long-term delivering ecosystem, technologies the for materials are in and a our our achieving and to industry, for for being growth We OLED the leader shareholders. customers cutting-edge and superior

let’s And Q&A. with start that, operator, the

Operator

Thank you.

now Needham from comes proceed Company. Ricchiuti line question with the question-and-answer Jim question. be & with Instructions] conducting Please your will session. We Our first [Operator a of

James Ricchiuti

did Hi, the pre-buying in pre-buying. Good Question afternoon. When thanks. on the notice you the quarter? activities

Sidney Rosenblatt

It It understand to the question, what was trade-related for think Jim. quarter. issues. and the they We were we were doing. kind talk throughout did happened our they of Thanks customer we –

James Ricchiuti

revenues your B. Customer a the Is that mean, looking with Sid, bulk of in there’s was – increase in significant the queue can customer? you B, from say, pre-buying that Customer and I at

Sidney Rosenblatt

our Yes. Customer is maker. And customers. it leading is Chinese it B panel is just for customer, the one Chinese but not Board across

James Ricchiuti

any guys see this noticed Okay. this is in in Did you QX, mainly you QX? of or what

Sidney Rosenblatt

pretty just much QX. It’s

James Ricchiuti

be just it. in should And in if operating Got about OpEx. second-half? I Any could moving on how Okay. thinking change just the expense quickly we

Sidney Rosenblatt

to No, that to this XX% XX% be we year-over-year, than we – past I I to R&D expect think, higher probably is in in past. the XX% the G&A and as we XX% said said range, up year, as think, the in

change. there’s So no

James Ricchiuti

Okay.

Sidney Rosenblatt

no There’s change.

James Ricchiuti

a Thanks lot.

Sidney Rosenblatt

you. Thank

Operator

your question with comes Brian Sachs. Please the with proceed next question. of Goldman Lee from Our line

Brian Lee

to And guess I Hey, working how visibility, confidence can guys, thanks The from just follow-up taking to sort for pull-in give that amount sense it’s of versus or million of on of you’re that. the that sizing you China, some questions. million $XX you Maybe off that? what to something you’re $XX give or higher us data lower?

million asked for big the And is, full I that that of out quarter, have million, if guess, still normalized $XX I big reason up $XX number sequentially, I like – is more so-called which this the been XX% so region. would – China take revenue pretty

normalized rate, that to of for are the off Just year? with run would that then trying second-half of one guess, comfortable you million to been I you build sort would million And parse, $XX it have the $XX if is how have of million? the $XX sort to

Sidney Rosenblatt

with In look we It’s our at analysis, great things. internal conjunction Thanks, question. Brian.

from the are input different we’ve a our that pre-purchases we had than little time past. get customers. also think We in And this

Intel is we’ve last from contract-related customers time and this our So, different than which they this pre-purchases. time, got the around more were

Brian Lee

XX% Okay. revenues. of Customer And it over look from little we if look C, all they B China, the like guess, a Customer A, at I actually represented, do B, China

customer. seem So concentrated it’s it doesn’t in like all one

to pretty the in revenue is guess, you seems like steady in going that, to they’re of customer the the back-half through I materials Chinese some diversification say would And So of then general pulling-in China, that’s hold specifically? across purchases? it how the consistent terms pretty base trend related

Steven Abramson

it’s our all across are – of customers Chinese that are Chinese it customers – – up. the Well,

to to a However, China customer. Korean-based sales include – our Yes.

We So, – in sales, going not ship manufacturers. material. included determine our based the all it’s is where upon where China so sales we Chinese it panel the

Brian Lee

Got it.

Okay, sense fair given makes enough. the JV there. out That

something out that get guys materials point, thing calling I that’s inventory, to a pull-in. been on the on. of maybe China know, a you handle kind for that And always Okay. challenging has you’re

customers rates and the into second-half think into side that patterns? impact on year? the have Korea region, you normal seasonality side, buying Anything key inventory run you visibility you could are there seeing what would be the order given just On normal in that

Steven Abramson

We across the saw in – see customers of Board our – of inventory. quarter, all growth without we the actually the inventory the pull-in from even without

And so, it the strong across was Board.

Brian Lee

Okay. guys. Thanks lot, a rest the take offline. I’ll

Steven Abramson

Thank Okay. you.

Operator

proceed line Bank. from question. comes the Deutsche next Please Ho your with Our question Sidney with of

Sidney Ho

for Thanks question. my taking

So I have a couple.

first to the question. is same The one pull-in going back

coming this the that or second-half, raised that first-half from by to midpoint? expect of full-year mentioned just the that to million pull-in year. unwind You the aka, the you second-half mostly in Do moving raises of you’ve Is $XX the guidance. was the you year, actually from end

Sidney Rosenblatt

is the first-half. do do see, a the we believe Well, pull obviously, that our from in it second-half to we’ve And guidance. raised we

do year we compared expect, year. to this growth to for So this year, strong last

Sidney Ho

the be that up what expect of guidance? end the of pull full-year year you most in will your by So used is in

Sidney Rosenblatt

is that correct. Yes,

Sidney Ho

Okay, great.

If again, either where’s guidance from full-year $XX you guidance, most million, raised upside by or the versus look application? by, at your by prior just region the coming

Steven Abramson

one across excess expected really stronger It’s the It even like inventory than without one isn’t or we QX just Board. It’s was region inventory customer. the purchases. –

Board. the So we’re seeing strength across

Sidney Ho

in sales it’s as Got QX. that terms pull the back you the you then Do relatively of It the from given a second-half, China expect you to flat it. customer? kind have And that the there’s range Korean the like in out in revenue, first-half? preproduction of in in, well QX be of out have back material seems to lot

Steven Abramson

think the strong upon what first-half. occurred, the mean, if –for some put We not second-half be China, do for growth. as based will as I you second-half expect I

year inventory But where China. would the turn, if see we If what of growth been, in occurred, seen second-half then the second-half. have put growth in the because you pre-purchases they you the this in would should we second-half of have not will in

Sidney Ho

Have following export on on Great. chemicals. seen have OLED you OLED patterns restriction? any last just the indicated changes restriction trade in And production? restriction customer whether the that Japan-Korea impact question certain My is the your their will the panel

Steven Abramson

we on business, have Sidney. seen our impact far, not So any

Sidney Ho

you. Thank Great.

Steven Abramson

you. Thank Great.

Operator

SIG. Our of Mehdi Hosseini with next question comes the with your proceed from question. line Please

Mehdi Hosseini

change when into question assumption capacity at detailed this XXXX or color. your Do for or you years? for taking next growth you XXXX, add same the foot to Sid. XX% is have square the is intensity a my look you And – square all Thanks in inch the the follow-up. Yes. we look When perhaps and sustain, look Steve question. there for does a And both, how through Thanks change when rate? I in growth expect two the from

Sidney Rosenblatt

did Well, a XXXX are see, in at we’re really – – We grow to it we that specifics not installed do see growth, ready we to said XXXX we we midst it going the multi-year make any earlier, from But any base point, cycle. we as CapEx – XX%. this still do see of projections.

Mehdi Hosseini

to Sure. And phase for has together this change, visibility pretty put and do have need in China of I in materialize? on or perhaps, XXXX. target these you targets asked to investment second XXXX, the because for been question, we wait much were

Sidney Rosenblatt

everything China. and the we said, Steve dive facilities beginning going be because number But to production of deeper industry where all that been do XX year, growth we data, it see probably, of you accurate will we built, reported But we And there’s starts will use be be going Well, that next fabs continue we said, strong and look and we think are a is, a the we’re Right. and in future. take that indications market OLED it. at the as is of the to in as we a will to internal for see we foreseeable use look, data. have pretty

Mehdi Hosseini

follow-up about update? think a should a incremental quick – then blue? How we Any And you. follow-up. the Thank of commercialization Great.

Steven Abramson

any have update. really don’t We incremental

We’re we’re continuing And when on we blue. excellent to progress. make progress making excellent –

moment. at announce We the have to nothing

Mehdi Hosseini

help us? Is Any there progress? could we lifetime metric any to that use better

Steven Abramson

At know, points the their a metric. as looking combination customers are this it’s It’s and business. I for think you the point, because don’t are lifetime, and as the at three efficiency there the key, color, appropriate

Sidney Rosenblatt

not about time. that’s them, when And discussions because Yes. we’ll to information. when as said, them as making have across the going And it specs, we’re make, said, or Mehdi, that commercial lifetime we make – initial incremental meets something start make whether it’s be we we But Steve that project sharing all color, we believe the improvements Board, we efficiency. we

Mehdi Hosseini

you. Thank great. Okay,

Sidney Rosenblatt

Thank you.

Operator

next comes Prisco the Matthew question of Our Evercore. your with proceed from with line Please question.

Matthew Prisco

guys. Hey,

second particularly about growth company? how was on level As the considering we the capacity at your turning XQ about Guangzhou the in Korean second-half, we largest customer for revenue think a think record back-half, should into

Sidney Rosenblatt

they We fab, and they really really question should end rates to this when depends is We – up. ramp – running the the stated fabs the it’s start – initial what their on least, at And utilization that, it in have are? completed. that is, month. start what into month know next the of at installed. What schedule is phases it’s everything some And they

Matthew Prisco

margin you the quarter? what material kind margins seems like review in Okay, lower it it’s on you And drove picked gross helpful. And then your can guide. the side, the of up

averaged quarter saying XX%. guys last were XX%, think, you around I it

that outlook? So increased Thanks. what drove

Sidney Rosenblatt

Well, XX%, the approximately had we increase – the and talked we’re XX%, about now lower-end, initially XX%. saying

product revenues impact our all mix to and and higher We be margin. customer mix expect

had. And when from to inventory margins for we XX% range. So this saw will go approximately X% an the impact our quarter, the look – continue that reserve above in we be forecast that at the we year, was will the

Matthew Prisco

Thanks.

Operator

from Berenberg. proceed question with with the Andrew your line of Please next question. DeGasperi comes Our

Andrew DeGasperi

Thanks.

as of that quickly. What related question to? to reserve Matthew’s was in follow-up terms a inventory Just the

Sidney Rosenblatt

need of have so we As provide the inventory, when material they can need with customers the that keep it. they all supplier, we to just-in-time that our the

our so customer all of we needs. that always overbuild will inventory, we can meet our So

accounting doesn’t that sold if estimate we that that we not be times going anything to upon we XX-month it. But and period, mean it. our that we that standards at not mean saleable doesn’t has, upon get. over next reserve That is not we it’s estimates sell may will customer And based use, the is based

time reserving will products that. some inventory and we we it products, So many so that shift have because different have customers to many have, always we may be time because from so to we new

Andrew DeGasperi

Got it. concerned in at all the the tariff, quickly I could the September. just And news think you then that, regards Are on potentially And year, on the the maybe it’s shaped can or potential patterns? how you activity, up? you to to with not today for order just July discuss ordering point, mean, I your order that know, impact at do just guidance – going this increase affect

Sidney Rosenblatt

that into announced the today believe U.S. the into tariffs Well, tweeted stuff to coming shipping were as or I opposed are China.

impact So, we’re us. going If industry. will the that it enabling may they tariffs impact there placed on But in, material us? are additional are

has relationships with our impacted this We have relationships our strong our with none and customers, of customers.

Andrew DeGasperi

with Got it. seen material you’ve the And consistent the you to first to second-half? into that sales lastly, licensing be quarter, in going do ratio, expect what the

Sidney Rosenblatt

it X year. the for closer expect X to be We to to

Andrew DeGasperi

Great. Thank you very much.

Sidney Rosenblatt

you. Thank

Operator

comes SCMR. question question. Andrew proceed next Our from the Please Abrams Instructions] with of line [Operator your with

Andrew Abrams

OLED. the Hi, [Technical guys, and congratulations of Difficulty] regardless

Steven Abramson

you Thank

Andrew Abrams

Difficulty]. [Technical one And I have question

Steven Abramson

breaking are we hear you. can’t you Andy, up,

Andrew Abrams

right. all Oh,

a go your little to material Is directly, of partnerships you going or see bit a suppliers us sold material how were bit to through another? will being be give it You license this that with you and talking material. for local customers? this in or Can sell suppliers they guys way a one little you your give about host you

Steven Abramson

to we’ll is with and looking work sell complementary then that to Andy, partners host proprietary the Local manufacture hosts directly at and hosts our customers. right now, host will to we’re partners way emitters. The specific are it it our those phosphorescent buy commercialize

Andrew Abrams

Got I appreciate you. it. it. Thank

Steven Abramson

You’re welcome.

Sidney Rosenblatt

you. Thank

Operator

Our comes with with Company. Gabelli Hendi the proceed Please next Susanto question. from & question your of line

Hendi Susanto

evening. Good

shipment that in short is purchase have of China you Sorry, your if production missed in I customers main plenty this. considering relatively the time of pulling is What capacity? and reason

Steven Abramson

whether these issues – are that think come trade-related have in they up. trade-related issues, tariffs I are – may the that other where

that’s So us. customers told really what our

Hendi Susanto

in regard China, your PPG? expanding with of to strengths collaboration in capacity that then And production will with to lead consideration

Sidney Rosenblatt

production at We a for where we is is the are multi-year always growth capacity. – in our are cycle. industry This looking CapEx a –

essentially grows, shifts and expect excess to OLED business to any We manufacturing industry always we we in that ensure have our demand. grow meet customer the will capacity as

So finish looking the are one. once already we one expansion, we next at

Hendi Susanto

And can more question, customers then inventory similarities behavior customers in China and in of Okay. one customers and between management purchasing characterize differences and practice you Korea?

Sidney Rosenblatt

that world. they team work our know a them, a customers with our that are we relationships – the that This guys sales we our And supplier great and just-in-time with technical everybody. with have and management around supplier customer we and are reliable team our and guys support have we

professional differences. of very work we well customers and bit with little them. But a overall, be very are and may manufacturers our well work there so, us And with

Hendi Susanto

you, Sid. Thank

Sidney Rosenblatt

you. Thank

Operator

with Please Our from Cross with proceed next of comes the Cross your Research. question Shannon line question.

Shannon Cross

Thank you.

might and is clearly, be level you – Any or balance able you accelerate, improving and you’re got the you it maybe happy you your strong that anywhere Given acquisitions, on think have thoughts much right margins with to now? the revenue. assets investment pretty – cash and you’ve

Sidney Rosenblatt

growth. think open will our help that the we’re And of We’re our looking any we help that grow leveraging so OLED. any our we at focusing or on business, ecosystem can always IP, increase in grow And opportunity to M&A.

pops accelerated. anything If – to we have something we been ready up, always isn’t we’re it will move So can. if be that

Shannon Cross

assume about Okay. expect pricing have showing I mean, you TVs of these to at price more would just And up, insights? then next curious all I’m what do your just to people do curious, the given see would aggressive all in are the cuts. industry, you on, as capacity you that’s what year? I some But any thoughts with I’m point, talk start to sort coming we

Sidney Rosenblatt

user. I I the specific down pricing We mean, then because grows, apply we’re not should there’s mean, way volume trends, more OLED we have any it just that’s all on – consistent the as TVs the of with don’t is. come end for seller you capacity, typical insights, see with the as consumer TVs.

Shannon Cross

Great.

Thanks. Okay.

Sidney Rosenblatt

Great. Thanks, Shannon.

Operator

today. the Rosenblatt any call conclude like for additional to does for Q&A our This Mr. back to session I’d hand closing or remarks.

Sidney Rosenblatt

all have you you and support interest hope We night. good your your Thanks. appreciate Thank a for and all today. time

Steven Abramson

night. Good

Operator

conclude teleconference. and this you gentlemen, does for participation. today’s Thank your Ladies

at day. your disconnect and time, may wonderful You this a lines have

Universal Display (OLED) 1 Aug 192019 Q2 Earnings call transcript