UDC at Cowen - 5/28/15
A good Q&A format with Sid, but very little new information.
- Royalty reports come in about 60 days after EOQ. They had previously said 30-60 days, I think their first report from LG probably generated the clarification.
- There are cumulative volume discounts in the LG agreement. Green has reached cumulative discount territory much quicker than red due to the quantity used, approx. 2-3 times red. They charge the same base price per kg for green and red.
- Green/yellow emitter in LG's TV is different than the green Samsung uses.
- They are sampling green host to a number of new customers, including LG.
- Sid expects the tax rate to drop from around 30% in 2017 to 20% in the 2018/2019 timeframe. This would coincide with the Samsung extension.
- Sid's discussion at the beginning about upfront fees, prepaid royalties, and milestone payments did not bring any new clarification to the issue(IMO)
- Pointed out their development of new materials is accelerating, in the context that we can expect new red and green emitters at a faster rate than previous improvements.
