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UDC Q3 Earnings - 11/2/17

UDC Q3 Earnings - 11/2/17

- $61.7M Revenue - $47M materials $12M royalties. $15.8M Op Inc. Net .28/sh. Guidance increased to a range of $310M-$320M for 2017. 03/sh quarterly div.

- News review - Gave a very broad update on products and customer progress, including the iPhone X.

- Green $32.8M in Q3 vs. $32.1M in Q2 and $16M in Q316

Red $13.6M in Q3 vs. $13.7M in Q2 and $7.1M in Q316

Royalty and license $12M in Q3 vs $5.2M in Q316

- OLED materials GM 75% in Q3 and expect high end of the range of 70-75% in 2017. They later commented this was just a continuation in Q4 of what they have seen so far.

- OPEX up 22-23% YoY and expect a similar trajectory going forward. They will update in February.

- $380M in cash at EOQ.

Q&A -

- Guidance implies a materials decline? Q3 was higher than expected, Q4 will not be as robust.

- $12M royalty and license line strength came from a number of customers and not just LG.

- A lot of activity in China, they expect the strength to continue.

- Samsung extension? Did not sound confident in an agreement before end of the year.

- Host revenue is existing host materials, and they think the $600K number an analyst gave was too high.

- Gabelli asked about Samsung materials being down QoQ, they said not to read anything into it, could be just timing.

- Royalties will remain on an upward trajectory but they may be lumpy.

- An eventual blue material(s) offering will be handled on a customer by customer basis with regards to licensing and material volumes, too early to get specific.

- Multiple customers in Japan. 

Cambridge Isotope Laboratories - Deutreated Reagents and High-Purity Gases for OLEDsCambridge Isotope Laboratories - Deutreated Reagents and High-Purity Gases for OLEDs