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UDC Q2 2017 CC notes - 8/3/17

UDC Q2 2017 CC notes - 8/3/17

- Blowout quarter and guidance raised. Revenue to $102.5M , OpInc $60.5M, Net income $47.2M or .99/sh. Guidance raised to $285M-$300M for the year. Non-Samsung royalties up to $8.7M

- Had some very positive comments on blue progress in the prepared remarks. Later in Q&A said their confidence in blue continues to grow and they are getting close to commercial specs.

- Commercial materials $30.9M. Dev materials $15.9M

- Gave total material sales by color vs. commercial only in prior q's, and gave updated numbers for comparison.

Green - $32.1M in Q217 VS $33.3m in Q117 and $15.3M in Q216

Red - $13.7M in Q217 vs. $12.8M in Q117 and $6.7M in Q216

- GM's 79% for Q2 vs 75% in Q216. Still expect full year GM's 70-75%

- OPEX to grow 10-15% YoY

- Tax rate 23% in Q2, expect 25% for 2017 and 20% for 2018 and beyond.

- $380M in cash at EOQ, looking for opportunities to use their increasing free cash flow.

- Expect pricing discounts to begin kicking in on the newer materials in Q3.

- China predominantly BOE.

- Did sell some developmental host, but have not won any customer deals and don't expect to in the foreseeable future.

- PPG expansion will be completed in Q3.

- Still do not expect printing of materials in the foreseeable future, including P10.

- Expect red volumes to grow in H217 v. H117 but it will be offset by volume pricing discounts.

- Ordering consistency and predictability - Called it "somewhat consistent", but still see differences Quarter to Quarter and Month to Month. Their ability to predict is getting better. The biggest variable to guidance remains when new capacity comes online.

- They are focusing on signing Samsung's extension in 2017 and not on a temporary or interim agreement.


Quite a few congratulations and "Nice quarter"

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