EMAN - Earnings call transcript Q1 2019

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Operator

Good day, and welcome to the eMagin Corporation First Quarter 2019 Earnings Conference Call. All participants will be in a listen-only mode. [Operator Instructions] After today's presentation, there will be an opportunity to ask questions. [Operator Instructions] Please note, this event is being recorded. I would now like to turn the conference over to Jeff Lucas, President and CFO. ahead. go Please

Jeff Lucas

everyone. Good morning,

glad our to us are you have quarter XXXX for first today earnings We join conference call.

ramp resources, the up we Securities future of risks plans product Such of and company's revenues, are During in targets, and company's agreements, ability current are uncertainties. production, call, benefits, words may to and liquidity to statements the as forward-looking today's beliefs, projections as based the et future on references Private future to projections plans, containing product production, development These a for believes, and Litigation as statements contracts financing, and expect, XXXX. Act statements cetera. subject include expectations, like Reform operations, forward-looking statements make and well defined number of capital

information unknown not statements for on Please place or known actual filings any statements. reflect Securities by our first like the company's cases, to beyond events Commission reliance and they differ over Andrew results undertake our call involve concerning or to We with XXXX implied update obligation or the Sculley, earnings no CEO. to such are, for and some refer With risks, our undue and forward-looking from should in these uncertainties control. because release those Exchange You statements that forward-looking that, to I'd factors revise could other quarter materially that cause to circumstances. expressed future to factors turn the and the

Andrew Sculley

call thank for the morning, today. and Good everyone, you Jeff. Thanks, joining

quarter issues call quarter developments as our on expectations, our line that from demand we XXXX earnings well the positive results discussed impact quarter First in March. several with were as in production residual fourth fourth reflecting

I'm in gain products have issues our efficiencies. greater our activities will provide progress capacity these to our putting for initiatives. aviation, while place been believe report production is strong traction. are including along and and strategic continuing these increasing resolved cost Demand production pleased that in improvements reliability we are improvements, beginning we the the and to we commercial to on military, with are Importantly,

our and beyond just as also displays, comprehensive include move We solutions, not component higher commercial military customers our only which working more provide level but are with we assemblies. sales to

during example, we a the prism for shipped quarter, military optic For customer. and developed a

to also We into displays products optic microdisplay. fiber as will are for sized different as our be designed being that developed that those that enable a taper well are retrofitted a incorporated

providing attached range with a engineering process allows microdisplays, our Finally, thereby, a new to to we assembly customers of that broader be design developed optical applications work. additional elements upfront less

front, X,XXX consumer color display, created the resolution x our X,XXX On a largest display. have we

X headset this without a We are view with company have This to screen the display incorporate headset. to a consumer their display of into enables in collaboration the effect. field wide door developing tier

We direct are using to third during complete making great brightness technology. a prototype patterning high quarter progress on the color unique very this program our and full expect

tremendous opportunity in We medical have the market. believe the our in market, at we base growing Looking the that are device customer medical market. still including we commercial

are high Our high displays very high contrast an for and resolution, market. choice this brightness excellent

is to next This won surgery customer’s developer in manufacturer equipment. new customer, equipment. diagnostic We are an diagnostic ophthalmic the which our and excited have generation during a we and quarter, displays of innovative

foundation continuing and growth. win to forging On orders, long-term the military are for a new aviation while front, we

of a discussions key engaged our on component displays for with We the are as in System microdisplay defense are actively XXXX technology development Soldier future and programs suite. government future positioning the

team II improve for to Some the with of our our include Lightning displays specific F-XX accomplishments work and Aerospace helmet. wins the Collins

terrific endorsements from timeframe. in for the low prepare we rate We initial XXXX, production XXXX test have received as pilots

since program Missile Javelin the supported have We XXXX.

for this orders During in of XXXX, Launch worth of April, Command Javelin program. we we program's Unit. received support Missile $XXX,XXX In new the received $XXX,XXX

as know, active III with very Army program. the ENVG US we are you Finally

expected working of ENVG for year The also at with with the are the systems program beginning pre-production this be the both We next. production this expected of units or prime early contractors end to XXX,XXX overall program, through Binocular XXXX. on acquisition is for

totaling we April. As past mature ENVG programs over still demonstrates the move on provide ENVG how over This the in latest having for even ENVG revenue the III we five received the with and programs, the supporting us. $XXX,XXX longstanding program, orders ahead are $XXX,XXX order in Binocular sustainable opportunities our months II

supporting XXXX. been program since We this have

on you to update We also our operational progress. want

issues a losing had create of capacity, the fourth in saw resolved. have production quarter quarter. we been In number points of of single the risk fourth as have largely Our which the past, we failure,

We have gone while lengths great our minimize yield. to these, to production improving

lowering We important unit incredibly an equipment. have production us, costs. efforts and been greater advanced increased has hired we forward. technical production and key thereby These capacity, This our success initiative production increased expect give production people new qualified reliability and resources, greater for should us going

quarter in military US As we role the by under the received production this awarded and OLED In $XXX,XXX recognizes US support were improvement. US of year, project our $XXX,XXX the national displays we for review. $XXX,XXX Army, XXXX, essential another manufacturer yield defense. the funding perform the another In to the microdisplays, of only for with US our first government

and strong technology, is our customer we our improving proposition. are capabilities manufacturing demand value while well positioned as and further advance our strengthening So we

efficiency development direct the the we and our improving in displays. lifetime Finally, patterned of are area,

will for the turn and which We are upgrading materials production. expect I'll mass over call the direct OLED architectural and equipment, capability making With improvements, throughput our show further that, improving our to Jeff. increase patterning we

Jeff Lucas

as quarter, well also business, issue aviation as review the the in in reflecting of Total markets. over financial results equipment first the in detail. demand particular, quarter progress quarter we revenues, on military from sequentially the to now In I’ll XXXX, made Andrew. increased resolution our in revenues our greater Thanks, commercial contributions due product fronts. December and fourth trends the and and several

strong. bookings our Importantly, are

Our slight backlog a XXXX. backlog, increase at steadily the $XX next December scheduled the XX, be to above remains shipped which $XX.X XX over are million, orders over million months, at

We have to throughput, are strengthening and improvements are our higher which cost yield that our made reducing margins. production continuing and make and efficiencies unit are driving

impacted close decrease which from $X XXXX control Revenues continued decreased compared sequentially a year-over-year. number due quarter but The shipments to as to and $X.X our SG&A year-over-year in the previously quarter is our of just to growth in revenues ago, reported offerings the operating fourth and added year we impact revenue of expenses issues before the production in registered position the We following from support XXXX. spend, first certain both to product raising a $XXX,XXX of fees as quarter. million, a were had million cash the decrease And our the strategy sequentially we by $X.X direct which quarter the quarter, of of to million up X% expected. discussed, result fourth

on $X the fourth Andrew of was year Government prior quarter level the last in $X year, XX% million the million the $X.X were far the to compared the largely R&D consolidated compared quarter first gross The work of prior revenue, $X.X due mentioned year on gross gross of previously from product mentioned. XK to the x the compared quarter first first XK primarily at revenues As this compared product year-over-year XXXX, revenues in was develop a million of to The XXXX. year-over-year the contract to gross the period. stage of revenue display, profit which work the margin million quarter. period. during were lower million residual of decrease from The in from of first the $X.X sequential quarter profit revenues development quarter fourth contract in the required first same quarter issues components for impact quarter consumer as as related XXXX. to quarter in contract margin grew XXXX. in revenues totaled $X.X reflecting to basis, in margin to of on was display a of XX% revenues due gross XX% decrease the unchanged product the had lower a million production quarter On

including Moving compared $X.X first expenses, to development of operating to first and XXXX. our the XXXX, the quarter expenses, $X.X as expenses million quarter in million were for research

last XXXX first XXXX, income this $XXX,XXX, $X.X an warrant to XXXX. quarter legal $XXX,XXX well In year. with prospective the million quarter particularly for first R&D spending year-over-year had expense million. to equity Selling, negotiations the services, to percentage sales Operating of including for year in generally as XXXX associated was and as January partners ago. from a the as at SG&A, unchanged $X.X first substantially first decreased or Our quarter SG&A decreased general $X.X the XX% administrative professional with in higher The the included we XX% a expense, was diluted loss loss loss or Net million $XXX,XXX the the quarters operating the the respectively, of of quarter XXXX share share 'XX. versus million the $X.X liability first related for loss value of of the compared for diluted in in quarter XXXX loss of in per or $X.XX first and change to $X.XX an year. million net quarter the fair of was $X.X first net a per and of offering. quarter million fees expense for for million $X.X transaction to compared first compared of $X.X

losses for million first quarter in in $X.X reflected compared in of Our decrease the loss XXXX quarter EBITDA non-GAAP was XXXX lower year-over-year primarily net negative million the quarter period. $X.X first The EBITDA XXXX. negative to first the that in the

Turning to sheet. balance the

to And the of million, subsequent capital under cash XXXX, million, and making we XX, before to and facility of additional million and raising million, $X.X million. other completing company $X strengthened we of fronts. $X.X several balance the had on availability noted, direct by the cash sheet registered quarter, In $X.X summary, eMagin outstanding our progress end $X.X equivalents the total borrowing March of As borrowings of operating working offerings, as ABL a fees are expenses. of of proceeds

towards foreign of our and Overall, in to traction medical first programs, and be many over XX XXXX, selling of supporting US over products that industrial gain the broadening markets. we military we for and the applications, we quarter new customers we in securing of the programs the goal and new the military new new duration the will in long lifetime are military In on sold side, to continue supplied program. We are for are to winning programs XX and programs. ones particular, presence

the further operations to believe States. OLED capacity with issues closely and an drive From receive margins. and as in raise to for our multi-year This continue on the our and progress enhancements work well are awards positioned production perspective, production United manufacturer only improvement our the the We are government future for funding we microdisplays of our have should down, from unit yield costs making initiatives. quarter gross and our resolved expand fourth we throughput

million the we second turn of we'll that, entering With back are for questions. quarter the an operator with backlog in Finally, products. it $XX.X to order

Operator

[Operator Mike Our question Instructions] first Malouf with from Craig-Hallum. comes

Mike Malouf

Hi.

largely below to then the are a us talk kind the to give you sort think, gross I margins them issues term? running expect currently well those still Can a and you production of sense want to perhaps you more commentary you of to little where Thanks. you near Just bit that be. to margins, behind a want do work to us where you. have Can now about hope where in on you of much little them And the how bit get give right are how of are gross be?

Andrew Sculley

Thanks, Yes. Mike.

production running actually XX we doing was this than we for we can in and that's long-term past, equipment. didn't trying time better have program are on at the do to the a here. issues, replace years. And down piece of make from and as them once, more up also we because going yield, well. single-use the obviously, them The sure to capital, we And to a government things that's know that you that and we issue have funding go get particular if can't quickly we that do replace the On are get all equipment

steps quickly. make that we So very to get up we sure are taking can that

going going we are to is very program And, the it's a back accomplished. funding to with the what they think advance to and have well. for long-term the equipment way, addition very and to just government So this, the the impressed government yield feed well. It's program we have by single-use in issues, I

Jeff Lucas

little a let me help that Mike, to So add just also. to bit here

and is actually the shipment customer longer on of we’re as requirements, is reason runs on continuing because doing our One in and have production we the fourth the production margins meeting degree do, now. demand had track smaller in not challenges a first has to issue quarter that of because But that the made for yields. in quarter, to in example, we that have in that residual a back to that improvement. impact we as the we We're and our bearing runs get are efficient had quarter

We improvement saw saw are our improvement you program. from that -- working under and towards that -- quarters yield second the and in margins the year, of particularly last third there, we

back So summary, in we improving to with improvement normalized initiatives. which and there and more the third saw are from we of a yield we last margins second margins, getting the quarters in that would argue year, our

Mike Malouf

Okay.

September and perhaps of gross better the So this should even we year year? margins expect similar last we in quarter third and June or than saw in quarter the second

Jeff Lucas

couldn't quite you. again. I'm hear sorry, I that ask

Mike Malouf

in saying or you're the better quarters might year? quarter be this September June September of last that what the margins June than gross gross and margins of So, at the year and is

Jeff Lucas

going little on Yes, here correct. better. and a That's be say, average, I'm careful little anticipate not be if to comparable a to we

Mike Malouf

second the many do complete the bit great. read then how add the more It color Is on of the you're that Okay, think and to third a prototypes can prototype third the then expect sounds we consumer in validation you quarter. like in should headset how And you do going should side. just the production it? And I little in quarter? quarter

Andrew Sculley

view the and really building Headset, display. back we're step me let So, headset.

X,XXX put features, the white the take time. We to approximately test that so has on It x is designed. display. will OLED we've a just X,XXX this it, very So backplane many some testing

that. might then direct a XK running, put up to get a prototype, with satisfied, the we headset. for on be doing an still display, equipment, is the a And you to that will then, come the have patterning us. thing so be As will also that we third we obviously, need they we'll number, it's customer has what which test have quarter, we'll patterning and that that redesigned to back that important direct vendor, recall, make And huge our have have enough and they for we and not OLED and is but in to

Mike Malouf

point? Okay, at opportunities then consumer other great. And you do on what have going this

Andrew Sculley

to number of talking a other we're Well, companies.

Display, using for And the we're a may next SID. have Society you in us. as customers, customers, production the week that, meeting designs also -- well. a XK for we're well it's are at bring help that important fact in x exciting will is, We with can to the time our number mass you Absolutely. know, know here to would partner. them this interest foundry of we foundry very of is us talking display Display potential XK. as Week the partner as there Information this number and for And And market, this are companies or And perhaps AR/VR that and to very about

Operator

Wainwright. with Kevin Our Instructions] question Dede from next H.C. comes [Operator

Kevin Dede

Dede. I curious, taking the four Good on questions. was for morning. Thanks the development. Andrew, XK Kevin

been can to regard be getting us? the give haven't what that development might aspects insight us some financial from sponsorship this that the forthcoming -- Is Could promise You transaction? there you or of just partner. very any with you on tell a you

Andrew Sculley

of $X next and to display And that Display that's in significant. not display development paying of before, by clearly, a that's at about taken good of million that's the talk also and having they is the somewhere going We're yet, that up It's sponsorship. be they’re of that they're a for to all paid talk us. is to so great we're million the the and companies Week. interested done course, said with between things which $X Well, to what one. week going number display very take other one companies, thing using them We've

the future? when So sponsorship, you what do mean, you for the say that,

Kevin Dede

it at I million when prototype? apologize, -- just you development million X that wasn't the And in did of I of funding. you when delivery and no. receiving that suppose aware Well, ends, wasn't do were to start I X

Andrew Sculley

Well, of do. may some the prototype, have delivery tweets we there be to

end So in samples XXXX. -- also it we will quarter next is, make and sometime also third start? that, year. let's late this And the it did it say, those we are question that started when end so of it do will the And will XXXX, in end go the to then generation. beginning It

Jeff Lucas

little add that By Correct. to the a just to Kevin, way, bit.

they about companies, with ours and involved discussions working in question this been been sponsorship, partner Your partners very had we've committed and on other with had very other us of been and communicating that. as

And are to fairly sponsoring that. display seeing here, of from the standpoint their this so our definitely they commitment we're

Andrew Sculley

And this point, Yes. Good one I'll a Jeff. meeting we with thing. is have company It every add week. other

other meeting times met a and partner this also chip with our partner. have and have We number with week, chip the company every the partner foundry with we a of and

this make are So, to it of group this there that happen. companies pushing is

Jeff Lucas

by that's, that them And our above with we ongoing, beyond the well. way, technical involved and daily, discussion get as almost

Kevin Dede

There they no volume? do kind how on technology volume, to will is before see right? on they want commitment Okay. They a to commit the side of

Andrew Sculley

a has a here it's very is it's capable see they advanced, to of been different, and generation. bigger different display. idea need been this backplane, then to us types terms have for the it's very to test so and about talking challenge commit The in And for of, what the of changes I'm displays, next this the and display what very do

XK I headset cell per has density screen that. display regular pixels display eliminates wide This inch put thing important brightness absolutely that high effect. need companies. is And that we that direct phone It's from the display have plus when the we only need other they in it field that's One and door because you is why this view, why you put that add brightness come the thing, company x and you – names, other that a coming us. interest this very so the that's us do. the can So when might a on they patterning. a company there see brightness on pixel why that to high a is XK demonstrated -- important. are and other this have display that in company has And they're they you to is and

Kevin Dede

questions list got And for you. I've of a

So time a But, I'll think really try just my on the rein mind helpful XK. of and memory in mean, application the refreshing has that. wouldn't I you to guys on would a I XK be still it hoping refresh I commercial bit. could for was little value. ton you Andrew, if it on x memory you spent that just commercial relevant my

Andrew Sculley

military. there of is terms There let's Well, in the certainly a start there, value is military next the devices are interested value with generation of, in resolution. some higher

know, you we XXXX. have WUXGA, x As which XXXX a is

is course, this in interested for the given military resolution higher and significant also interest higher everyone And, people. in is brightness, to that side plus display, interest. there So of we have

The other is space AR commercial application. the in interest thing also is, regard to there with

like higher and interested So here resolution. are again industrial medical, in medical things

medical, out there and and that you and is resolution, field the some the XK consumer So commercial, if view AR but good XK mean, it's not military, you and need that wide industrial have the don't can fine. that's is field view need application enormous reasonable of a like not display, resolution devices huge you the I see

Kevin Dede

have your a design is customer, you'll leveraging So are or in that new medical already that a arsenal development your you that they need?

Andrew Sculley

already that that. It's they're design testing and we No. have a

Jeff Lucas

product. qualified Existing

Kevin Dede

with the Are volume there any what indications be you for could that? of

Andrew Sculley

but a we cannot feeling Oh, field, it for in multiple customers have because of say that. we have course, we this

Jeff Lucas

we're Yes, we in but particularly disclose the going I a we point. opportunities, programs. design several But, for to really, do, its have lot not at this mean, military of XK,

well. there in about just opportunity, considered to still side, but not back getting as XK commercial military comment to certainly the in be importantly, wealth side, is So, a the earlier, the just of

Kevin Dede

Okay.

mentioned that? interesting you the So you was the that color that one you prism of more assemblies was Andrew, to of that optic, doing mentioned, I you're Could but little mentioned, particularly you displays. one -- did on some work a fiber the things also optic. You attach thought add on a

but that just said, discuss think paper, further? a was that I little could you I hoping bit just you

Andrew Sculley

Yes.

go you everybody screen and have large display takes of the so will. will that. a there So that displays, looks thing so of in optics It could use like just that In our understands, a display the taper are magnification, sometimes, the and changes if front multiple like an that in its display, one can face, from you into your you optic of that the even front that light simply TV when be you it polarizer size. with magnify it and

the of the so optics and Night done have make with optic that an have asked Vision enhanced goggle the final could customers additional us, display that before the in like this So and/or customer we to put one headset. we on assembly, programs, fit

prism can So different display, to the that's The very multiple make we've expect the doing. to do also optic, now we type buy fits now display, have and optic SVGA very in their example, that a for have this large seller of thing time And have customers, display resolution optic, of and long go our optic be the our that prism doing. optic type optic are the permits to the can and we we're that's and customer not for a we as well. of it and so big for we made own so that the they thing and customers, this that's sold seller, some one prism that particular buy

Kevin Dede

cetera. couple the I'm might It's where above at not you ENVG XXXX all goes please. et it And Could the be. coordinated little the me on system, more. is offer how suite? with insight that to rifle beyond, the site, what a clear a and Bear wondering, Just say helmet Soldier

Jeff Lucas

I to the It's as be future, particularly spot It program sort in of actually we'll offer. crystallize, what exactly our are our at we the sweet pretty going about, talking But it's speaks comprehensive to it that begins have it. terms pretty to of in more roll displays a think, promising. that

several work to pretty has it us. again that done thing So it's and is lot the us. that for a years hearing exciting from and in more date, been out But a military there's general getting from still of sense you'll lot be a about is and formalizing

So a ask that I calls, able we'll more give be little future in to question again, request, color each time.

Kevin Dede

You the now, keep Jeff, know every quarter? by me I asking same questions

Andrew Sculley

Just the a the then the you on, Kevin, but III XXXX think about that Binocular. calls military it's ENVG when and of was military, ENVG has as earlier, start after right ENVG said still conference going on reminder, we the II,

military but -- about outside out modernization, our the the advantage. talking soldiers US US, -- next give as the well, actually and there's I'm the So always next this a -- generation the is to generation,

Kevin Dede

the Title and on I in hoping Okay. you OLED a There little DPA deeper might dive on touch just topic this III was bit a was designation.

was You mentioned you And might think bit milestones you a it I you what and on the we little call. how insight year-end at a look see should end And bit offer more for? that March development? of do the hoping little

Jeff Lucas

couple things III on here. of So, a Title the

information out, March that. as to that request First of there for pointed went responded timeframe, was, we in we out a all,

manufacturer anything the funding. sure that have microdisplays. the the of of for more are not of make the several military, clearly offering we the increasing that program We One, going also pointed have overarching only and address we what funded are we consistent communicated defense with it goals The be threefold. US really if seems prime, the consistent And candidate program, given the demands the this US what funding that to only, here out source point particularly part for years. our is that of else, over next as production this single it than actually failure is a given the we've the that and is

increase to with our we're yield what at not that second provided the it’s the advance thirdly, going The and very technology patterning here our margins And doing pricing for to initiatives the point lower well. point of improvement increase and to for government, deposition tool only as course, help is direct going then that also another for funding the is, some is the capacity because that. importantly obviously

the three elements So are it. of those

that it's say clear one this, potential. things feel we're promising, in cannot we has very want work excited Now, exactly I thing very Washington. the about We about timing to here great how be of

expectations timing. so this point, but can again, little why, also that's make communication And any excited about pretty of we terms guarded we're this, at a in we're about of

Kevin Dede

have you're process. own Fair enough, Jeff. above funding improvement But what military made see is. you that and as specific point within here saying various you your from and guys for all the that manufacturing is a development and that sponsorship targets big of And arms indicating the this goes and beyond

Andrew Sculley

Yes, also but to as expense. opposed it's capital

Jeff Lucas

of costs, do We helping support efforts Andrew of amount fair funding, some get his spoke right. defray highlights, -- here, costs This be That's enhancing mostly and addressing Title here. and capital our driven we experimental and some the incur capital yield to the as expansion some other that largely a towards in the have of we improvement would our yields. in III that to of needs

Andrew Sculley

and And we a it's high did to line and we awarded a full And Title initial award volume. did production. an important all absolutely line and -- we And remind set would we programs did do important need and lines would award is it's monochrome pilot very reasonable rate say that were the color. I'll in the programs what the aviation that program for today, They are low which high color military need you for also high have with brightness to ready be. which a that's the by very brightness that from for ManTech brightness important go to green, III to they is -- want the demo

exciting, here yet. very So, just not it's

Kevin Dede

Right. a happening that's -- that's color is that LRIP, display and But the currently? ManTech

Andrew Sculley

which also rate program is was an ManTech won color for on the we've for won ready displays, an but And award, we the it, only very won demo get completed and low an unusual. Not yes. we award The we Sorry. performance. award initial that on the did program production well it. ManTech government pilot the the high brightness for and performed designation for line from

Kevin Dede

gentlemen. the change next might in Last that Okay, that I definite this that a the on I am things? Collins program. year. of XXXX I sigh the or just Big a question, F-XX for under is misinterpreting morning got was commentary just was XXXX, impression that your LRIP relief. to understanding be

Andrew Sculley

don't will next and working We we well on generation will but when are exactly it can't so take know predict. we be, time, that some as a

Jeff Lucas

it's a that call comfortable of think, hasn't bit, that's timeframe earnings XXXX March point, and things We expectations. always these we're is the in military changed. or some we've we soldier mentioned chance the established. but last as of did, in XX, of -- half at in little inevitable these a still moved whether by any that ground There that program out latter that I said major aviation get on it I was still the as sort

Operator

comes question from next Our [indiscernible]

Unidentified Analyst

point going you guess, know for a be some might this with IVAS for curious threat I program. IVAS I view which excited or thoughts more just eMagin the think forward? provide funding to any that at you been opportunity as Do competes on Andrew, the ENVG-B, able we on of about. you've should that

Andrew Sculley

like at color uses very displays everything things government as efficient the right now we and that look would compact. a and opportunity. like Well, this always, display, are full high brightness We and very still an we our

future are headset. in the still we So any for running

Jeff Lucas

and this. other simultaneously point, do point do very ones. know, you encompass some quite is about, don't at opportunities working for discussions awarded IVAS the going all the And role as our want been those this there. them future IVAS We've well. for to to we well. discussions We what our folks you've but been be same we them as The with folks the this time, time. that know initiatives at with government, We to obviously, And of speak a including are number as with these heard Microsoft further pursues any have folks. And at in can't

Unidentified Analyst

Great.

another Just for quick Jeff. one you

expire your I you of far believe to that? of facility, are was an end. been that to Has as kind As year extension Or set it extended? negotiating at currently related credit

Jeff Lucas

if very that want regularly, so in to excellent more do X-year We've They've finding supportive negotiations a They competitive very, every we're with XX. very enjoyed us. of expire We well. to relationship it's that. December or We've had are our they indication in an them them. we anticipating And It Well, financing that goal renewing yet. been here agreement. with not availability. do does as communicate give

Unidentified Analyst

And here, Okay. for more you. just then guess, of either I one

the for maybe Just on provide stock long-term curious might based of can a on that? faith message investors price. who confidence or just any be current the little comments company you losing in -- that Any

Andrew Sculley

can couple a make of just and I'll take well. statements Jeff some as

have the US outside very picture We US. a also on but and statement, good military the a that's

a good And have We programs. well, new capturing roadmap there. very doing we're

when helping interested points discussions with military well. They AR/VR applications. US Title companies. industrial to as are fit the getting we're involved that fact term the in funding commercial longer in will will that we're and in the our there for the help important. also that are need direct patterning that we As the we capacity very very from III et our just there AR/VR know the too cetera, displays our we much we very But they yield, have And said, us

the think us. So future very good I for looks

Jeff Lucas

of away that was Well, but finish question, I I kind right comments two taking now. final them will my some going you Mike, by here make, to of

a keep of things in mind. So, couple to

primarily side, we here, terms in of efforts the strength seeing of a the the that is and solid hiccup, both commercial previously. but lower opportunities growth been side of this improving our fourth now saw, we're us increasing terms exciting for of that the of benefit the open our and where the also the cost our a volume, down, because commercial, Part to hadn't quarter, the as point orders military critical of in on you for and that's our and also lot had in yields the improvements. compete, but we are trends First in We production progress the operational making have our do in our of are to all, much unit meet That's bring price that higher other us margin. the doing do will of it's position capacity particularly of to in that ranges demand, certainly -- with to going able pretty sort up but to us. is continue

hand, the one are operationally. we improvements on making So

order say will our strong. book I is Secondly,

terms is the don't our this, generally a much are this year to have it not and is been terms confidence create ourselves, we and public targets, point year. certainly major for into opportunity, of treated as mind second XK I date, the that particularly our consumer have we be us higher of to next as bill environments set and and x we balance has can strong development, here, gives for we the XK speaking is of of in ratio side. And seeing quarter a that's And us. Andrew the As the a that that our of tremendous matter the while in in third to made has it's lightly. in level book this in This expectations certainly disclose in to -- think, fact,

as that's well. for think exciting pretty I us So

anyone points those as the forward So to major else and really here. are I we're would three moving make you

Operator

closing for I [Operator turn Instructions] any questions over are no Sculley to to time, further At back this Andrew there like would audio the in call queue. remarks.

Andrew Sculley

we've hand help without now, the I done that for us us the gives patterning, on view stress just only and XK the progress and equipment of right field you, the x the vendors want much out in we've screen it and well. display as a will an come very Jeff door is the redesign us is throughput outstanding Thank it's and effect direct XK greater mentioned, accomplishment that that needed our the made, give headset progress displays again all. our to improve for display,

capability -- towards the will us. mass demonstration production step this a further of give demonstration of So

are do in and above we have eMagin, So stress color can making density company we PPI great at only X,XXX progress one that. demonstrated just that of here. that nits that's and full X,XXX is a I'll And there pixel again,

one a enormous higher the a gives with two And terms want very that next rest that path, to the and better next have is all that high roadmap, want of a And we headroom brightness. they this of we And OLED. other don't -- you end much the performance over Now the we you the have advantage is all of of of that we get they this brightness. that accomplishment. thing, have goal efficiency an even years of on companies high speak and by year, AR/VR, if when brightness, more year to much in therefore talk the XX,XXX nits

So we much. are Thank in that. position very for a you great

Jeff Lucas

Thank all. you,

Operator

attending now may And now Thank you disconnect. for concluded. today's The you presentation. has conference

Emagin (EMAN) 10 May 192019 Q1 Earnings call transcript