EMAN - eMagin Corp (eman.ob) : microdisplay oled

BigNick

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solo per ricordarvi che domani c'è la trimestrale
 

BigNick

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Speriamo non ci siano ritardi o intoppi se no son capzi...
 

BigNick

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Grazie BigNick.
A me sembrano, a prima vista, risultati interessanti... Mi stupisce la reazione tutto sommato modesta della quotazione. Forse i 7.6M$ di Revenues (+30% yoy) erano giá stati "prezzati" dalla press release del 25 Ottobre?

diciamo che sta andando tutto bene, in realtà i risultati economici contano poco, quello che darà una spinta alle quotazioni saranno le eventuali royalties se davvero si realizzerà l'affare con Apple (Credo), ma per questo serve tanta e tanta pazienza ancora, appena sarà disponibilie la trascrizione della cc vedo di capire se c'è qualcosa di interessante
 

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https://conferencecalltranscripts.com/summary/?id=452154&pr=true

eMagin Corporation (EMAN) Q3 2022 Earnings Call Transcript
Nov. 10, 2022 1:06 PM ETeMagin Corporation (EMAN)
eMagin Corporation (NYSE:EMAN) Q3 2022 Earnings Conference Call November 10, 2022 9:00 AM ET

Company Participants

Mark Koch – Chief Financial Officer

Andrew Sculley – Chief Executive Officer

Amal Ghosh – Chief Operating Officer

Conference Call Participants

Michael Donovan – H.C. Wainwright

Mike Lovick – Private Investor

Kevin Dede – H.C. Wainwright

Operator

Thank you for standing by. Welcome to eMagin Corporation’s Third Quarter 2022 Earnings Conference Call. At this time all participants are in a listen-only mode. [Operator Instructions] As a reminder today’s program is being recorded.

And now I’d like to introduce your host for today’s program Mr. Mark Koch, Chief Financial Officer. Please go ahead sir.

Mark Koch

Thank you and good morning everyone. Welcome to eMagin’s third quarter 2022 earnings conference call.

Before we begin, I would like to remind you that in the following prepared remarks and in our Q&A session, we will make statements about expected future results that may be forward-looking statements for the purposes of federal securities laws. These statements relate to our current expectations, estimates, and projections and are not guarantees of future performance. They involve risks uncertainties and assumptions that are difficult to predict and may prove not to be accurate, especially in light of the effects of the ongoing pandemic.

Actual results may vary materially from those expressed or implied by these forward-looking statements and we undertake no obligation to update these disclosures. These forward-looking statements should be considered only in conjunction with the detailed information contained in our SEC filings including the risk factors described in our 2021 annual report on Form 10-K.

During this call we will also refer to adjusted EBITDA, a non-GAAP financial measure to provide additional information to investors. A reconciliation of adjusted EBITDA to net income, which is the most directly comparable GAAP financial measure is provided in the press release that we issued this morning. Non-GAAP financial measures such, as adjusted EBITDA, are not meant to be considered in isolation or as a substitute for our GAAP financial measures and financial statements.

With that, I will turn the call over to our CEO, Andrew Sculley.

Andrew Sculley

Thank you, Mark and hello everyone. Thanks for joining us today. Our third quarter was highlighted by a 31% year-over-year revenue increase leading to improved gross margins and positive EBITDA, along with new business wins and continued growth in our backlog of open orders.

Our total revenue rose to $7.6 million compared with $5.8 million a year ago, while our gross margin improved to 37% from 10% a year ago, and our EBITDA for the third quarter of 2022 was a positive $0.7 million. This is the fourth consecutive quarter in which we realized year-over-year increases in throughput and product revenues of more than $7 million. This was the result of the new Title III and IBAS funded equipment in our production facility, along with improvements in our manufacturing operations.

Our display sales grew during the third quarter reflecting strong military shipments and increased medical segment revenues. As of the end of the Q3 ongoing demand for our displays for use in thermal weapon sights, military night-vision goggles, and medical applications drove the increase in our total backlog to $16.6 million from $14.3 million at the end of Q2. Approximately 93% of the total third quarter backlog is deliverable within the next 12 months.

As we discussed last quarter, the U.S. Army’s Program Executive Office for Simulation, Training, and Instrumentation awarded us a $2.5 million, two-year development contract to secure a U.S. source for a high-performance microdisplays that provides high brightness and visual acuity, even in bright daylight conditions. In the third quarter, we recognized $0.6 million of revenue under the initial phase of this contract, which was related to the design of a backplane that will allow for significantly higher luminance of our displays.

In December, we will take delivery of the upgraded R&D dPd deposition chamber, which will mark the start of a new era in OLED microdisplay technology. We will use this chamber to make the displays required by the last phase of our proof-of-concept work with a Tier 1 AR/VR customer. This upgraded R&D chamber will be used to fabricate sample quantities of disruptive, high-brightness dPd displays for both military and commercial markets. The design process for this R&D chamber has played a key role in defining the specifications for the large production-capable dPd organic deposition tool purchased under Title III funding, that is nearing completion.

In September, as previously announced, we received our AS9100 Rev. D certification along with our ISO 9001:2015 certification. The AS9100D is an internationally recognized quality management standard that is specific to the aerospace, aviation, and defense industries. These certifications strengthen eMagin’s competitive position and standardize our quality, reliability and safety processes. Furthermore, we believe that our certified quality management systems, combined with the highly-differentiated dPd manufacturing equipment and processes, will continue to make eMagin the supplier of choice for the high-brightness and high-resolution OLED microdisplay solutions of the future.

Regarding our Title III and IBAS funded programs, as of the end of Q3, we had added and qualified four new pieces of equipment to our production line and had received three additional pieces of equipment that are currently installed and are in the process of being qualified. As I mentioned earlier, this equipment has contributed to the improvements in our production process and we have seven more major pieces of equipment on order, including the production-capable dPd organic deposition tool, which should improve device performance, yield and throughput of this innovative technology.

Overall, we remain on track with the requirements of these important government grants and are beginning to realize the yield, reliability and throughput improvements that we expected.

With that, I’ll turn the call over to Mark for a discussion of our financial results.

Mark Koch

Thank you, Andrew, and hello everyone. Total revenues for the third quarter of 2022 increased 31% to $7.6 million, compared with $5.8 million reported in the prior-year period. Total revenue consists of both product revenue and contract revenue. Product revenues for the third quarter of 2022 were $7.0 million, an increase of $1.7 million from product revenues of $5.3 million reported in the prior-year period.

The year-over-year increase in display revenue was due to strength in military markets, including shipments of displays used for the ENVG-B program and higher revenue contributions from medical customers.

Contract revenues were $0.6 million compared with $0.5 million reported in the prior year, reflecting an increase due to development associated with a high-brightness display design for the Department of Defense and a proof-of-concept display for a Tier 1 consumer company.

Total gross margin for the third quarter increased to 37%, resulting in a gross profit of $2.9 million, compared with a gross margin of 10%, which resulted in a gross profit of $0.6 million in the prior-year period. The gross margin improvement resulted from several factors including higher yields, increased volumes, a more favorable product mix, and the successful qualification and sale of product that had been previously written off because of an initial quality issue that was ultimately resolved. This resulted in a savings of approximately $0.6 million in third quarter materials costs as compared to the expected cost of producing these displays. Excluding this positive impact, third quarter 2022 gross margin would have been 30% on gross profit of $2.3 million.

Operating expenses for the third quarter of 2022, including R&D expenses, were $3.0 million, compared with $3.9 million in the prior-year period. Operating expenses as a percentage of sales were 39% in the third quarter of 2022, compared with 67% in the prior-year period. Prior year R&D expenses reflected significant investments in high-brightness XLE, and dPd processes. Operating loss for the third quarter of 2022 narrowed to $0.1 million, compared with an operating loss of $3.3 million in the prior-year period, primarily reflecting the higher gross profit.

Net loss for the third quarter of 2022 was $0.3 million, or $0.00 per share, compared with income of $1.3 million, or $0.01 per share, in the prior-year period. After adjusting for the net income allocated to participating securities of $0.3 million and $4.7 million change in the fair value of the warrant liability for the prior-year period, net loss for the third quarter of 2021 was a loss of $3.4 million, or $0.05 per share on a fully-diluted basis.

Adjusted EBITDA for the third quarter of 2022 improved to positive $0.7 million, compared with negative $2.1 million in the prior-year period.

Turning to the balance sheet. As of September 30, 2022, the company had cash and cash equivalents of $3.9 million and working capital of $13.9 million. During the third quarter, the company repaid $0.6 million under its asset-based lending facility. Borrowings and availability under the facility were $0.7 million and $1.1 million, respectively, as of September 30, 2022. During the quarter, the company realized $1.5 million in net proceeds from sales of common shares under its ATM program.

With that, we will open the call for questions. Operator, please go ahead.

Question-and-Answer Session

Operator

[Operator Instructions] And our first question comes from the line of Kevin Dede from H.C. Wainwright. Your question, please.

Michael Donovan

Hello. Good morning. Thank you for accepting my questions. This is Michael Donovan calling in for Kevin Dede. First of all, congratulations on a great quarter. First question, now the advanced dPd chamber that you’re discussing that’s supposed to arrive in December, is this the one that you referenced in Q2 that was arriving in, supposed to arrive in September, or is this a different piece of equipment?

Mark Koch

No, it’s the same piece of equipment.

Michael Donovan

Okay. Is this supply chain issues or other?

Mark Koch

No, there’s no issue with it except for the work involved in getting it ready and there are some supply chain items in that, of course.

Michael Donovan

Understandable. And now, how does this affect the timeline of qualifying this dPD chamber for – of your products that are currently being produced?

Mark Koch

Well, remember this chamber is going to be a small R&D chamber, so it’s only going to produce small samples and help us continue our R&D effort. For example, it’ll help us also with the PEO STRI, that’s the $2.5 million project that we mentioned. It’ll help with that, doing some work on that. And the delay in getting the chamber in is going to affect things like that as well. But first, remember, it’s not going to delay the $2.5 million program because the first thing we have to do is, is the wafers themselves and that we’re working on. By that I mean the design of the wafers.

Michael Donovan

Okay. That makes sense. And how – speaking to competitive landscape is your 10,000 plus nits capability still put you somewhat in a league of your own?

Mark Koch

Yes, it does. Because the – if you go back to May of this year, and that’s when the Display Week 2022 from the Society of Information Displays, so that’s a major display industry conference. The best brightness we saw besides ours was 7,000 candela per meter squared nits. And that was we actually could see the display. It wasn’t running that bright, but that was an LG display, and we of course, showed our display and when somebody came by the booth and wanted to see it at 10,000 plus nits, we cranked it up for them.

Michael Donovan

That’s great. That’s great. Now the design of the backplane that you’re referring to does this allow you to go beyond 10,000? I think you, on the Q2 call; you briefly mentioned the capability of getting closer 20,000. Does that help with the brightness or is does backplane aspects.

Andrew Sculley

No, we need the backplane to help with the brightness. There are other things that we put in it to make it better. Every time we design a backplane, we improve it. So also those designs will be portable to the next generation of displays that we do, and 20,000 is what we said before, and that’s what we’re looking at.

Michael Donovan

Excellent, excellent. Now, we see all these military grants, that’s phenomenal. I know you cannot name specific names, but looking at composition of customers and potential customers, can you give a brief estimate of military versus medical applications versus consumer applications? How are you seeing this?

Andrew Sculley

Okay. If I can step back and just talk about display revenue for the moment. Our, an estimate of military now be, we have to be a little careful, because we can’t say exactly what the military is, because we have some customers that supply multiple markets. And the military we usually say is somewhere between 65%, 70% of our total revenue. But I want everyone to be careful whenever we say that because I’m not talking about U.S. military, and I’m afraid that the audience always thinks that, your U.S. military is 70%. That’s not true, because half of our display sales on average, it depends on what quarter are outside the U.S. So when we say military, we’re talking about a much broader market than U.S. military.

Michael Donovan

Okay. That’s it. Yes, that’s an important note. Great. Well that’s all my questions right now. I jump back in queue.

Andrew Sculley

Okay. Mark you want to add?

Mark Koch

No, that’s good.

Andrew Sculley

Okay.

Operator

[Operator Instructions] And our next question comes from the line of Mike Lovick. He’s a private investor. Your question please.

Mike Lovick

Good morning, Andrew and Mark.

Mark Koch

Good morning, Michael.

Andrew Sculley

Amal is here too, Mark – Mike, sorry.

Mike Lovick

Good morning, Amal.

Amal Ghosh

Hi, Michael.

Mike Lovick

I wanted to start with a question on the CHIPS Act. I think back in September, I noticed the commerce department had released some guidance on that and one of the key takeaways that I saw there was for large companies to look to form relationships with smaller businesses to put themselves in the best position to receive funding. I was interested if anyone has reached out to you, as part of that application process and looking to include you guys as to try to get that funding?

Andrew Sculley

Well, in times like this, let me say it differently. We always reach out to other companies where we do talk with foundries and talk to them about wafer supply and also combining with them for the CHIPS Act. We’ve talked to a number of companies about that.

Mike Lovick

Okay. Do you think that’s the way it happens or as you imagine also looking to apply directly for this funding?

Andrew Sculley

Well, yes. Remember, it’s 50% funded by the government, 50% by the companies.

Mike Lovick

Okay. That’s…

Andrew Sculley

Roughly, it could be different. Okay.

Mike Lovick

Right. Okay. Well my next question a little bit on the potential manufacturing partner side, I was wondering if you could maybe share a little bit more on the depth, of where those discussions have gone. I guess specifically, I was interested, if any or all of these potential partners have, vetted your technology to the point, where they might be confident today and in, making the big type of investment and tools and that kind of thing that would be needed to make this all happen.

Andrew Sculley

Well, we can’t really say that, because obviously we’re under NDA with any new one with whom we’re talking, but we have talked with a number of companies.

Mike Lovick

Okay. Is there anything that…

Andrew Sculley

Just one other thing, we have displayed the technology at Display Week 2022. We’ve taken a number of companies, both consumer electronics as well as others into CR 4K [ph] display, for example. And that’s directly patterned also. And the one that we had in the booth, we showed that to anybody who came by and we did win the People’s Choice Award for the best new technology. And I should mention that when I say People’s Choice, I don’t mean you just the people on this phone call, it’s the display industry that actually voted on this and told us that we had the best new technology. So it is getting a lot of attention.

Mike Lovick

Okay. And not sure how much you’ll be able to say here, but what do you think the timing looks like for getting a licensing deal done with one of these guys? Is that something that you could see in the near term? Or is that still kind of potentially a ways out?

Andrew Sculley

Well, obviously we’re working hard on that and we’re working hard in both directions. One is the consumer electronic side; people interested in the technology always helps. So, we’re working both sides of that, but we can’t give you a timeline on that, because we haven’t said anything to the outside world. And we always respect, we always respect the confidentiality of all of our discussions.

Mike Lovick

Okay. Let’s see. I think my last question has to do with just kind of your strategic vision for the company. I think, the way that I look at it right now, you guys have such a tremendous opportunity on the consumer side and just looking at, where the market is valuing the company. I don’t really see a lot of recognition there. I was just interested in your thoughts on how you think that you best monetize that value for shareholders?

Andrew Sculley

Well, the monetization of that is obviously with success and as we continue with the technology and talking to consumer electronics companies as well as potential partners, we can see that success is on the horizon. And the – and I didn’t say anything about the timing of that. The consumer electronics companies are very interested in AR/VR.

Mike Lovick

Okay. And I guess I was interested if like you, you and the board would consider any sort of strategic alternatives that might kind of pull that monetization forward a little bit rather than, it seems like maybe these revenues that opportunity is still a couple years out. And I guess what I was getting at is maybe some of these companies that you’re working with have more appreciation for the value of the company than the market does right now. Is that something that you guys think about at all?

Andrew Sculley

Well, obviously we look at any opportunity that makes sense to us in the part. and we want to move this technology forward and that’s what we’re working on right now. And I agree the stock price has two things. One is the market was very bad, and therefore it was also reflected in us. And it’s important that the base business does as well as it has done now because the base business is doing much better as you can see with the funding of the new equipment. And given that then we see the upside.

Mike Lovick

Okay. So likely this manufacturing partnership that said, if and when it comes to be, that would really be an important catalyst to probably moving that, that stock price up, right?

Andrew Sculley

Oh, of course. Here we want to be the leader in this technology, and I shouldn’t say it that way, I should say we are the leader and that technology, for example the display industry has said that with the Display Week 2022 award for the best new technology. And we are the only company that we have seen with 10,000 candela per meter squared or nit display in operation. And we’ve demonstrated that and sold those displays to companies for their own evaluation. So there is interest in this technology, clearly.

Mike Lovick

Right. All right. Well thank you very much again for taking my questions and congratulations on all the progress.

Andrew Sculley

Thank you, Michael.

Mark Koch

Thank you.

Operator

Thank you. [Operator Instructions] And our next question is a follow up from the line of Kevin Dede from H.C. Wainwright. Your question please.

Kevin Dede

Thank you so much for accept my follow up question. I just wonder if you could speak more towards yields and how much of a catalyst, higher yields or for gross margin improvement and if these margins are sustainable and also for the really big machine that you’ll be receiving that can increase capacity. Where are you guys on that front and yes, going to unpack that, that’ll be great.

Andrew Sculley

So, I’m going to start with the end of your question. The big machine is still on target for installation in the first half of next year. And start up in the second half. That’s, that was the goal, that’s still in on that target. There are a few things that we have in line, just to let you know, we have three different vendors working for us on this. So it’s not as easy as one person does the machine and it’s in, it will do our direct patterning technology in production and will also do in production the capability of, as we mentioned, with that $2.5 million project, to get the 20,000 candela per meter square or nits.

This tool will be able to do that in production. So we’re very excited about it. It obviously can also do any other display we make white with color filter, monochrome, whiter or green, et cetera. So it will be a great benefit for us. And the yield improvement, we expect to continue that as we install the equipment under the Title III and IBAS Funding, we’ve already seen the throughput improvement and part of that is yield, of course and the new machine will be even better.

Kevin Dede

Very good. Now you briefly discuss the consumer segments and consumer opportunities. Are you able to give us a number of how many consumer facing brands that you’re serving right now?

Andrew Sculley

I don’t think we should give you a number, but there we’ve talked to a number of companies and there’s interest in the technology. Some of them want it now, so it’s very important for us to continue.

Kevin Dede

Good, good. Now we see some headlines that are maybe speculating if you’re serving, the likes of Valve or Meta. I don’t want to say that you are right now, I do not want to allude to that, but at what point in the relationship with your consumer facing brands, would you be able to market yourself as serving a such Tier 1 consumer facing brand?

Andrew Sculley

Well, whomever we’ve spoken to, and obviously a lot of companies, not only in the U.S. but the company themselves, we respect what their desire is. If they want us to keep silent, which they do, then we keep silent. We want to serve our customers.

Kevin Dede

That makes sense. Well, that’s all my questions for now. And appreciate your time and I’ll turn over to the next thing almost.

Andrew Sculley

Thank you very much.

Mark Koch

Thank you.

Operator

Thank you. [Operator Instructions] And I’m not showing any further questions in the queue at this time. I’d like to hand the program back to management for any further remarks.

Andrew Sculley

Thank you, Jonathan. This concludes today’s earnings call. Thank you everyone for your interest in eMagin and have a great day.

Operator

Thank you, ladies and gentlemen, for your participation in today’s conference. This does conclude the program. You may now disconnect. Good day.
 

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https://conferencecalltranscripts.com/summary/?id=452154&pr=true

eMagin Corporation (EMAN) Q3 2022 Earnings Call Transcript
Nov. 10, 2022 1:06 PM ETeMagin Corporation (EMAN)
eMagin Corporation (NYSE:EMAN) Q3 2022 Earnings Conference Call November 10, 2022 9:00 AM ET

Company Participants

Mark Koch – Chief Financial Officer

Andrew Sculley – Chief Executive Officer

Amal Ghosh – Chief Operating Officer

Conference Call Participants

Michael Donovan – H.C. Wainwright

Mike Lovick – Private Investor

Kevin Dede – H.C. Wainwright

Operator

Thank you for standing by. Welcome to eMagin Corporation’s Third Quarter 2022 Earnings Conference Call. At this time all participants are in a listen-only mode. [Operator Instructions] As a reminder today’s program is being recorded.

And now I’d like to introduce your host for today’s program Mr. Mark Koch, Chief Financial Officer. Please go ahead sir.

Mark Koch

Thank you and good morning everyone. Welcome to eMagin’s third quarter 2022 earnings conference call.

Before we begin, I would like to remind you that in the following prepared remarks and in our Q&A session, we will make statements about expected future results that may be forward-looking statements for the purposes of federal securities laws. These statements relate to our current expectations, estimates, and projections and are not guarantees of future performance. They involve risks uncertainties and assumptions that are difficult to predict and may prove not to be accurate, especially in light of the effects of the ongoing pandemic.

Actual results may vary materially from those expressed or implied by these forward-looking statements and we undertake no obligation to update these disclosures. These forward-looking statements should be considered only in conjunction with the detailed information contained in our SEC filings including the risk factors described in our 2021 annual report on Form 10-K.

During this call we will also refer to adjusted EBITDA, a non-GAAP financial measure to provide additional information to investors. A reconciliation of adjusted EBITDA to net income, which is the most directly comparable GAAP financial measure is provided in the press release that we issued this morning. Non-GAAP financial measures such, as adjusted EBITDA, are not meant to be considered in isolation or as a substitute for our GAAP financial measures and financial statements.

With that, I will turn the call over to our CEO, Andrew Sculley.

Andrew Sculley

Thank you, Mark and hello everyone. Thanks for joining us today. Our third quarter was highlighted by a 31% year-over-year revenue increase leading to improved gross margins and positive EBITDA, along with new business wins and continued growth in our backlog of open orders.

Our total revenue rose to $7.6 million compared with $5.8 million a year ago, while our gross margin improved to 37% from 10% a year ago, and our EBITDA for the third quarter of 2022 was a positive $0.7 million. This is the fourth consecutive quarter in which we realized year-over-year increases in throughput and product revenues of more than $7 million. This was the result of the new Title III and IBAS funded equipment in our production facility, along with improvements in our manufacturing operations.

Our display sales grew during the third quarter reflecting strong military shipments and increased medical segment revenues. As of the end of the Q3 ongoing demand for our displays for use in thermal weapon sights, military night-vision goggles, and medical applications drove the increase in our total backlog to $16.6 million from $14.3 million at the end of Q2. Approximately 93% of the total third quarter backlog is deliverable within the next 12 months.

As we discussed last quarter, the U.S. Army’s Program Executive Office for Simulation, Training, and Instrumentation awarded us a $2.5 million, two-year development contract to secure a U.S. source for a high-performance microdisplays that provides high brightness and visual acuity, even in bright daylight conditions. In the third quarter, we recognized $0.6 million of revenue under the initial phase of this contract, which was related to the design of a backplane that will allow for significantly higher luminance of our displays.

In December, we will take delivery of the upgraded R&D dPd deposition chamber, which will mark the start of a new era in OLED microdisplay technology. We will use this chamber to make the displays required by the last phase of our proof-of-concept work with a Tier 1 AR/VR customer. This upgraded R&D chamber will be used to fabricate sample quantities of disruptive, high-brightness dPd displays for both military and commercial markets. The design process for this R&D chamber has played a key role in defining the specifications for the large production-capable dPd organic deposition tool purchased under Title III funding, that is nearing completion.

In September, as previously announced, we received our AS9100 Rev. D certification along with our ISO 9001:2015 certification. The AS9100D is an internationally recognized quality management standard that is specific to the aerospace, aviation, and defense industries. These certifications strengthen eMagin’s competitive position and standardize our quality, reliability and safety processes. Furthermore, we believe that our certified quality management systems, combined with the highly-differentiated dPd manufacturing equipment and processes, will continue to make eMagin the supplier of choice for the high-brightness and high-resolution OLED microdisplay solutions of the future.

Regarding our Title III and IBAS funded programs, as of the end of Q3, we had added and qualified four new pieces of equipment to our production line and had received three additional pieces of equipment that are currently installed and are in the process of being qualified. As I mentioned earlier, this equipment has contributed to the improvements in our production process and we have seven more major pieces of equipment on order, including the production-capable dPd organic deposition tool, which should improve device performance, yield and throughput of this innovative technology.

Overall, we remain on track with the requirements of these important government grants and are beginning to realize the yield, reliability and throughput improvements that we expected.

With that, I’ll turn the call over to Mark for a discussion of our financial results.

Mark Koch

Thank you, Andrew, and hello everyone. Total revenues for the third quarter of 2022 increased 31% to $7.6 million, compared with $5.8 million reported in the prior-year period. Total revenue consists of both product revenue and contract revenue. Product revenues for the third quarter of 2022 were $7.0 million, an increase of $1.7 million from product revenues of $5.3 million reported in the prior-year period.

The year-over-year increase in display revenue was due to strength in military markets, including shipments of displays used for the ENVG-B program and higher revenue contributions from medical customers.

Contract revenues were $0.6 million compared with $0.5 million reported in the prior year, reflecting an increase due to development associated with a high-brightness display design for the Department of Defense and a proof-of-concept display for a Tier 1 consumer company.

Total gross margin for the third quarter increased to 37%, resulting in a gross profit of $2.9 million, compared with a gross margin of 10%, which resulted in a gross profit of $0.6 million in the prior-year period. The gross margin improvement resulted from several factors including higher yields, increased volumes, a more favorable product mix, and the successful qualification and sale of product that had been previously written off because of an initial quality issue that was ultimately resolved. This resulted in a savings of approximately $0.6 million in third quarter materials costs as compared to the expected cost of producing these displays. Excluding this positive impact, third quarter 2022 gross margin would have been 30% on gross profit of $2.3 million.

Operating expenses for the third quarter of 2022, including R&D expenses, were $3.0 million, compared with $3.9 million in the prior-year period. Operating expenses as a percentage of sales were 39% in the third quarter of 2022, compared with 67% in the prior-year period. Prior year R&D expenses reflected significant investments in high-brightness XLE, and dPd processes. Operating loss for the third quarter of 2022 narrowed to $0.1 million, compared with an operating loss of $3.3 million in the prior-year period, primarily reflecting the higher gross profit.

Net loss for the third quarter of 2022 was $0.3 million, or $0.00 per share, compared with income of $1.3 million, or $0.01 per share, in the prior-year period. After adjusting for the net income allocated to participating securities of $0.3 million and $4.7 million change in the fair value of the warrant liability for the prior-year period, net loss for the third quarter of 2021 was a loss of $3.4 million, or $0.05 per share on a fully-diluted basis.

Adjusted EBITDA for the third quarter of 2022 improved to positive $0.7 million, compared with negative $2.1 million in the prior-year period.

Turning to the balance sheet. As of September 30, 2022, the company had cash and cash equivalents of $3.9 million and working capital of $13.9 million. During the third quarter, the company repaid $0.6 million under its asset-based lending facility. Borrowings and availability under the facility were $0.7 million and $1.1 million, respectively, as of September 30, 2022. During the quarter, the company realized $1.5 million in net proceeds from sales of common shares under its ATM program.

With that, we will open the call for questions. Operator, please go ahead.

Question-and-Answer Session

Operator

[Operator Instructions] And our first question comes from the line of Kevin Dede from H.C. Wainwright. Your question, please.

Michael Donovan

Hello. Good morning. Thank you for accepting my questions. This is Michael Donovan calling in for Kevin Dede. First of all, congratulations on a great quarter. First question, now the advanced dPd chamber that you’re discussing that’s supposed to arrive in December, is this the one that you referenced in Q2 that was arriving in, supposed to arrive in September, or is this a different piece of equipment?

Mark Koch

No, it’s the same piece of equipment.

Michael Donovan

Okay. Is this supply chain issues or other?

Mark Koch

No, there’s no issue with it except for the work involved in getting it ready and there are some supply chain items in that, of course.

Michael Donovan

Understandable. And now, how does this affect the timeline of qualifying this dPD chamber for – of your products that are currently being produced?

Mark Koch

Well, remember this chamber is going to be a small R&D chamber, so it’s only going to produce small samples and help us continue our R&D effort. For example, it’ll help us also with the PEO STRI, that’s the $2.5 million project that we mentioned. It’ll help with that, doing some work on that. And the delay in getting the chamber in is going to affect things like that as well. But first, remember, it’s not going to delay the $2.5 million program because the first thing we have to do is, is the wafers themselves and that we’re working on. By that I mean the design of the wafers.

Michael Donovan

Okay. That makes sense. And how – speaking to competitive landscape is your 10,000 plus nits capability still put you somewhat in a league of your own?

Mark Koch

Yes, it does. Because the – if you go back to May of this year, and that’s when the Display Week 2022 from the Society of Information Displays, so that’s a major display industry conference. The best brightness we saw besides ours was 7,000 candela per meter squared nits. And that was we actually could see the display. It wasn’t running that bright, but that was an LG display, and we of course, showed our display and when somebody came by the booth and wanted to see it at 10,000 plus nits, we cranked it up for them.

Michael Donovan

That’s great. That’s great. Now the design of the backplane that you’re referring to does this allow you to go beyond 10,000? I think you, on the Q2 call; you briefly mentioned the capability of getting closer 20,000. Does that help with the brightness or is does backplane aspects.

Andrew Sculley

No, we need the backplane to help with the brightness. There are other things that we put in it to make it better. Every time we design a backplane, we improve it. So also those designs will be portable to the next generation of displays that we do, and 20,000 is what we said before, and that’s what we’re looking at.

Michael Donovan

Excellent, excellent. Now, we see all these military grants, that’s phenomenal. I know you cannot name specific names, but looking at composition of customers and potential customers, can you give a brief estimate of military versus medical applications versus consumer applications? How are you seeing this?

Andrew Sculley

Okay. If I can step back and just talk about display revenue for the moment. Our, an estimate of military now be, we have to be a little careful, because we can’t say exactly what the military is, because we have some customers that supply multiple markets. And the military we usually say is somewhere between 65%, 70% of our total revenue. But I want everyone to be careful whenever we say that because I’m not talking about U.S. military, and I’m afraid that the audience always thinks that, your U.S. military is 70%. That’s not true, because half of our display sales on average, it depends on what quarter are outside the U.S. So when we say military, we’re talking about a much broader market than U.S. military.

Michael Donovan

Okay. That’s it. Yes, that’s an important note. Great. Well that’s all my questions right now. I jump back in queue.

Andrew Sculley

Okay. Mark you want to add?

Mark Koch

No, that’s good.

Andrew Sculley

Okay.

Operator

[Operator Instructions] And our next question comes from the line of Mike Lovick. He’s a private investor. Your question please.

Mike Lovick

Good morning, Andrew and Mark.

Mark Koch

Good morning, Michael.

Andrew Sculley

Amal is here too, Mark – Mike, sorry.

Mike Lovick

Good morning, Amal.

Amal Ghosh

Hi, Michael.

Mike Lovick

I wanted to start with a question on the CHIPS Act. I think back in September, I noticed the commerce department had released some guidance on that and one of the key takeaways that I saw there was for large companies to look to form relationships with smaller businesses to put themselves in the best position to receive funding. I was interested if anyone has reached out to you, as part of that application process and looking to include you guys as to try to get that funding?

Andrew Sculley

Well, in times like this, let me say it differently. We always reach out to other companies where we do talk with foundries and talk to them about wafer supply and also combining with them for the CHIPS Act. We’ve talked to a number of companies about that.

Mike Lovick

Okay. Do you think that’s the way it happens or as you imagine also looking to apply directly for this funding?

Andrew Sculley

Well, yes. Remember, it’s 50% funded by the government, 50% by the companies.

Mike Lovick

Okay. That’s…

Andrew Sculley

Roughly, it could be different. Okay.

Mike Lovick

Right. Okay. Well my next question a little bit on the potential manufacturing partner side, I was wondering if you could maybe share a little bit more on the depth, of where those discussions have gone. I guess specifically, I was interested, if any or all of these potential partners have, vetted your technology to the point, where they might be confident today and in, making the big type of investment and tools and that kind of thing that would be needed to make this all happen.

Andrew Sculley

Well, we can’t really say that, because obviously we’re under NDA with any new one with whom we’re talking, but we have talked with a number of companies.

Mike Lovick

Okay. Is there anything that…

Andrew Sculley

Just one other thing, we have displayed the technology at Display Week 2022. We’ve taken a number of companies, both consumer electronics as well as others into CR 4K [ph] display, for example. And that’s directly patterned also. And the one that we had in the booth, we showed that to anybody who came by and we did win the People’s Choice Award for the best new technology. And I should mention that when I say People’s Choice, I don’t mean you just the people on this phone call, it’s the display industry that actually voted on this and told us that we had the best new technology. So it is getting a lot of attention.

Mike Lovick

Okay. And not sure how much you’ll be able to say here, but what do you think the timing looks like for getting a licensing deal done with one of these guys? Is that something that you could see in the near term? Or is that still kind of potentially a ways out?

Andrew Sculley

Well, obviously we’re working hard on that and we’re working hard in both directions. One is the consumer electronic side; people interested in the technology always helps. So, we’re working both sides of that, but we can’t give you a timeline on that, because we haven’t said anything to the outside world. And we always respect, we always respect the confidentiality of all of our discussions.

Mike Lovick

Okay. Let’s see. I think my last question has to do with just kind of your strategic vision for the company. I think, the way that I look at it right now, you guys have such a tremendous opportunity on the consumer side and just looking at, where the market is valuing the company. I don’t really see a lot of recognition there. I was just interested in your thoughts on how you think that you best monetize that value for shareholders?

Andrew Sculley

Well, the monetization of that is obviously with success and as we continue with the technology and talking to consumer electronics companies as well as potential partners, we can see that success is on the horizon. And the – and I didn’t say anything about the timing of that. The consumer electronics companies are very interested in AR/VR.

Mike Lovick

Okay. And I guess I was interested if like you, you and the board would consider any sort of strategic alternatives that might kind of pull that monetization forward a little bit rather than, it seems like maybe these revenues that opportunity is still a couple years out. And I guess what I was getting at is maybe some of these companies that you’re working with have more appreciation for the value of the company than the market does right now. Is that something that you guys think about at all?

Andrew Sculley

Well, obviously we look at any opportunity that makes sense to us in the part. and we want to move this technology forward and that’s what we’re working on right now. And I agree the stock price has two things. One is the market was very bad, and therefore it was also reflected in us. And it’s important that the base business does as well as it has done now because the base business is doing much better as you can see with the funding of the new equipment. And given that then we see the upside.

Mike Lovick

Okay. So likely this manufacturing partnership that said, if and when it comes to be, that would really be an important catalyst to probably moving that, that stock price up, right?

Andrew Sculley

Oh, of course. Here we want to be the leader in this technology, and I shouldn’t say it that way, I should say we are the leader and that technology, for example the display industry has said that with the Display Week 2022 award for the best new technology. And we are the only company that we have seen with 10,000 candela per meter squared or nit display in operation. And we’ve demonstrated that and sold those displays to companies for their own evaluation. So there is interest in this technology, clearly.

Mike Lovick

Right. All right. Well thank you very much again for taking my questions and congratulations on all the progress.

Andrew Sculley

Thank you, Michael.

Mark Koch

Thank you.

Operator

Thank you. [Operator Instructions] And our next question is a follow up from the line of Kevin Dede from H.C. Wainwright. Your question please.

Kevin Dede

Thank you so much for accept my follow up question. I just wonder if you could speak more towards yields and how much of a catalyst, higher yields or for gross margin improvement and if these margins are sustainable and also for the really big machine that you’ll be receiving that can increase capacity. Where are you guys on that front and yes, going to unpack that, that’ll be great.

Andrew Sculley

So, I’m going to start with the end of your question. The big machine is still on target for installation in the first half of next year. And start up in the second half. That’s, that was the goal, that’s still in on that target. There are a few things that we have in line, just to let you know, we have three different vendors working for us on this. So it’s not as easy as one person does the machine and it’s in, it will do our direct patterning technology in production and will also do in production the capability of, as we mentioned, with that $2.5 million project, to get the 20,000 candela per meter square or nits.

This tool will be able to do that in production. So we’re very excited about it. It obviously can also do any other display we make white with color filter, monochrome, whiter or green, et cetera. So it will be a great benefit for us. And the yield improvement, we expect to continue that as we install the equipment under the Title III and IBAS Funding, we’ve already seen the throughput improvement and part of that is yield, of course and the new machine will be even better.

Kevin Dede

Very good. Now you briefly discuss the consumer segments and consumer opportunities. Are you able to give us a number of how many consumer facing brands that you’re serving right now?

Andrew Sculley

I don’t think we should give you a number, but there we’ve talked to a number of companies and there’s interest in the technology. Some of them want it now, so it’s very important for us to continue.

Kevin Dede

Good, good. Now we see some headlines that are maybe speculating if you’re serving, the likes of Valve or Meta. I don’t want to say that you are right now, I do not want to allude to that, but at what point in the relationship with your consumer facing brands, would you be able to market yourself as serving a such Tier 1 consumer facing brand?

Andrew Sculley

Well, whomever we’ve spoken to, and obviously a lot of companies, not only in the U.S. but the company themselves, we respect what their desire is. If they want us to keep silent, which they do, then we keep silent. We want to serve our customers.

Kevin Dede

That makes sense. Well, that’s all my questions for now. And appreciate your time and I’ll turn over to the next thing almost.

Andrew Sculley

Thank you very much.

Mark Koch

Thank you.

Operator

Thank you. [Operator Instructions] And I’m not showing any further questions in the queue at this time. I’d like to hand the program back to management for any further remarks.

Andrew Sculley

Thank you, Jonathan. This concludes today’s earnings call. Thank you everyone for your interest in eMagin and have a great day.

Operator

Thank you, ladies and gentlemen, for your participation in today’s conference. This does conclude the program. You may now disconnect. Good day.

Leggendo la conference ho victo un Sculley molto ottimista,che avrebbe voluto abbracciare il mondo e fare dei nomi ma non puo' in questo momento.
Dice che l azienda sta' lavorando bene e che hanno vinto premi importanti quest' anno.
Sembrava un bambino che stava mangiando una briosche al cioccolato.
Vedremo fra un po di tempo....
 

Filippomg

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Beh la CC é sicuramente intrisa di ottimismo... I numeri sono, come detto, interessanti ed il trend sembra positivo.
Unica ombra: lo slittamento dell'installazione della nuova camera a deposizione e quindi un ritardo nello sviluppo dei programmi relativi ai visori VR/AR... un'ombra abbastanza pesante, vista la chiusura di oggi. Evidentemente c'è bisogno di news concrete in quel campo per poter svoltare.
Io comunque penso che nel medio periodo la pazienza pagherà.
 

BigNick

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Beh la CC é sicuramente intrisa di ottimismo... I numeri sono, come detto, interessanti ed il trend sembra positivo.
Unica ombra: lo slittamento dell'installazione della nuova camera a deposizione e quindi un ritardo nello sviluppo dei programmi relativi ai visori VR/AR... un'ombra abbastanza pesante, vista la chiusura di oggi. Evidentemente c'è bisogno di news concrete in quel campo per poter svoltare.
Io comunque penso che nel medio periodo la pazienza pagherà.

daccordo con te, il ritardo della nuova camera di deposizione non ci voleva, tre mesei sono tanti
 

BigNick

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EMAN.jpg

galleggiamo sulla mediana per ora
 

BigNick

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https://www.oled-info.com/emagin-reports-its-q3-2022-preliminary-financial-results

eMagin reports its Q3 2022 preliminary financial results
OLED microdisplay maker eMagin reported its preliminary financial results for Q3 2022, with revenues in the range of $7.4 to $7.6 million, an increase of 28%-31% from last year.

eMagin SXGA OLED-XL microdisplay photo

eMagin says it sees strong demand in the military market, increased revenue from medical customers and also increased R&D contract revenues.

eMagin reported several times that it has some large consumer electronics companies interested in its direct-emission (dPd) OLED technology for AR devices. It is estimated that Facebook is one of these companies. Samsung has also, according to reports, recently started testing eMagin's dPd technology. Valve is also likely a customer of eMagin's displays.

Disclosure: the author of this post holds some shares in eMagin
 

BigNick

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https://www.conferencecalltranscripts.org/summary/?id=11495563

Major owner of eMagin Corporation just disposed of 14,021 shares
Holdings Llc Stillwater, a major owner of eMagin Corporation, recently disposed of 14,021 shares of the company. The disposals took place at $1.02 per share, on November 10, 2022. Stillwater still owns 2,991,857 shares of the company. Stillwater operates out of New York,, NY

per dovere di cronaca.....
 

Filippomg

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https://www.conferencecalltranscripts.org/summary/?id=11495563

Major owner of eMagin Corporation just disposed of 14,021 shares
Holdings Llc Stillwater, a major owner of eMagin Corporation, recently disposed of 14,021 shares of the company. The disposals took place at $1.02 per share, on November 10, 2022. Stillwater still owns 2,991,857 shares of the company. Stillwater operates out of New York,, NY

per dovere di cronaca.....

Avevo letto di questa vendita di 14k azioni su un totale di circa 3M. Inoltre sembrerebbe che tra il 20/10 ed il 26/10 abbiano venduto circa 85k pezzi. Sommati ai 14k del 10 Novembre, sono circa 100k. Qui tutti i movimenti: https://www.sec.gov/edgar/browse/?CIK=0001230586.
Non sono sicuro di aver interpretato bene, ma credo di aver capito che Stillwater sta vendendo azioni EMan da circa il 2021 (Da qualche parte ho letto di 4.25M di pezzi..)

Domanda ingenuotta, giusto per speculare: che senso ha? Vogliono disfarsi del titolo perché sanno qualcosa che noi non sappiamo ed iniziano a scaricare gradualmente ad ogni rimbalzo per non affossare piú di tanto la quotazione (visti i volumi medi, se iniziassero a vendere 100k pezzi al giorno si andrebbe giú del 20% a seduta...)?

A proposito di rimbalzi: il movimento in AH di venderdí? +8,5% dopo un -4% durante le contrattazioni...ricopertura di short?

Filippo
 

BigNick

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Avevo letto di questa vendita di 14k azioni su un totale di circa 3M. Inoltre sembrerebbe che tra il 20/10 ed il 26/10 abbiano venduto circa 85k pezzi. Sommati ai 14k del 10 Novembre, sono circa 100k. Qui tutti i movimenti: https://www.sec.gov/edgar/browse/?CIK=0001230586.
Non sono sicuro di aver interpretato bene, ma credo di aver capito che Stillwater sta vendendo azioni EMan da circa il 2021 (Da qualche parte ho letto di 4.25M di pezzi..)

Domanda ingenuotta, giusto per speculare: che senso ha? Vogliono disfarsi del titolo perché sanno qualcosa che noi non sappiamo ed iniziano a scaricare gradualmente ad ogni rimbalzo per non affossare piú di tanto la quotazione (visti i volumi medi, se iniziassero a vendere 100k pezzi al giorno si andrebbe giú del 20% a seduta...)?

A proposito di rimbalzi: il movimento in AH di venderdí? +8,5% dopo un -4% durante le contrattazioni...ricopertura di short?

Filippo

ma non saprei, perchè non hanno venduto un anno fa quando stava sopra i 5$?

l'after hour di venerdì è anomalo, è vero che parliamo di soli 6.000 pezzi ma per EMAN è inusuale

ribadisco che qui parliamo di un orizzonte temporale di 1/2 anni quindi non starei qui tanto a spaccare il capello in due

speriamo non ci siano ulteriori ritardi perchè se no diventa imbarazzante da giustificare ai potenziali partner
 

BigNick

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Avevo letto di questa vendita di 14k azioni su un totale di circa 3M. Inoltre sembrerebbe che tra il 20/10 ed il 26/10 abbiano venduto circa 85k pezzi. Sommati ai 14k del 10 Novembre, sono circa 100k. Qui tutti i movimenti: https://www.sec.gov/edgar/browse/?CIK=0001230586.
Non sono sicuro di aver interpretato bene, ma credo di aver capito che Stillwater sta vendendo azioni EMan da circa il 2021 (Da qualche parte ho letto di 4.25M di pezzi..)

Domanda ingenuotta, giusto per speculare: che senso ha? Vogliono disfarsi del titolo perché sanno qualcosa che noi non sappiamo ed iniziano a scaricare gradualmente ad ogni rimbalzo per non affossare piú di tanto la quotazione (visti i volumi medi, se iniziassero a vendere 100k pezzi al giorno si andrebbe giú del 20% a seduta...)?

A proposito di rimbalzi: il movimento in AH di venderdí? +8,5% dopo un -4% durante le contrattazioni...ricopertura di short?

Filippo

10.000 pezzi nel pre a 0,95, anche questo è inconsueto per Eman
 

BigNick

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Volevo segnalarvi che finalmente abbiamo dei volumi decenti, non so se possa considerarsi notizia positiva o meno, ma così è, che dite ?
 

BigNick

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12:55:48 $ 0.9217 275,400

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