eMagin Posts Record Revenue and Operating Income for 2Q 2008

Financial Summary

• Revenue for the three and six months ending June 30, 2008, of approximately $5.6 million and $8.3 million, represent increases of 33% and 6% from $4.2 million and $7.8 million for the same periods in 2007.
• Gross margins in 2008 grew to 47% of revenue or $2.6 million for the quarter and 36% or $3 million for the six-month period as compared to 30% of revenue or $1.3 million for the quarter and 23% or $1.8 million for the six-month period in 2007. These results were due to higher volume and better yield.
• Operating expenses declined 4% and 13% from $2.3 million and $4.8 million for the three and six month periods ending June 30, 2008, as compared to $2.4 million and $5.5 million in 2007.
• Operating income for the three months ending June 30, 2008 totaled $0.3 million compared to an operating loss of $1.1 million in 2007. For the six-month period, losses were $1.8 million in 2008, down 49% or $1.9 million from $3.7 million in 2007.

"I am pleased to announce that the Company has achieved positive operating income the second quarter of 2008, and we initiated a path forward that we believe will result in increased profitability with a lower cost structure and improved yields,“ said Andrew G. Sculley, chief executive officer and president, eMagin Corporation.

Selected Business Highlights

• At the Society for Information Display Conference, eMagin demonstrated its enhanced SVGA+ microdisplay, which the Company believes to be the most power efficient OLED solution for near-eye applications. Better power efficiency results in lighter and/or longer lasting mobile display products.
• eMagin is now shipping first samples of its new higher resolution microdisplay. Besides great contrast and a SXGA or 1280x1024 format at 0.77-inch diagonal, this display has outstanding power efficiency. The company’s measurements show that it is at least 4 times more power efficient than competitive products.