Universal Display reported their financial results for Q4 2015 - which were lower than expected. Revenues reached $62.3 million (including $30 million from SDC in licensing revenue) and the operating income was $26.6 million. Net income was $18.1 million up from $13.1 million in Q4 2014.
In 2015, UDC generated $191 million in revenues - exactly the same as in 2014. Material sales were $113.1 million and the net income was $14.7 million (down from $41.9 million in 2014, because of a large inventory write-down earlier in 2015). In 2015, UDC generated $113.6 in cash - more than double 2014's operating cash flow of $47.3 million. The company has $395.5 million in cash and equivalents.
Fourth quarter results were lower than anticipated - and the company believes this is primarily due to year-end inventory management by Samsung and LG. The company lost virtually all of its green host business in 2015, and does not expect any host sales in 2016. In fact the company gave a soft guidance for 2016 - an increase of 15% in revenues from 2015, plus or minus 5%.
UDC expects 2016 to be a year in which the OLED industry builds meaningful new capacity - but the effect on material sales (and panel production) will only start in 2017 and 2018. Production will increase in 2016, but because the company will not generate revenues from host materials, its overall sales will not increase much from 2015.
Disclosure: the author of this post holds some shares in Universal Display