eMagin Corporation (EMAN) Reports In-Line Q3 EPS

eMagin Corporation (NYSE: EMAN) reported Q3 EPS of ($0.01), in-line with the analyst estimate of ($0.01). Revenue for the quarter came in at $7.92 million versus the consensus estimate of $7.2 million.

“We successfully executed on our strategic priorities in the third quarter of 2019 which resulted in a significant improvement in our financial results,” stated Jeffrey Lucas, President and CFO. “For the quarter, we achieved over $7.3 million in product revenues, the highest level of product revenues in six years and the second highest in the Company’s history. Operating loss for the quarter was $394 thousand and down from an operating loss of $1.3 million in the prior year quarter. Adjusted EBITDA of $263 thousand was positive for the first time since the first quarter 2016 when the Company earned one million dollars from nonrecurring licensing revenue.

“During the third quarter, we demonstrated significant improvement in yield and throughput as production volumes increased over 50% from the second quarter. We believe these initiatives, including enhanced maintenance support and optimizing production runs, along with others we are implementing in the current quarter, provide us with additional opportunities for operating improvements in the future,” continued Mr. Lucas.

“In addition, during the third quarter we took actions to reduce our cost structure. Expense controls put into effect during the quarter contributed to a 21% decrease in operating expenses from the prior year period. Operating expenses as a percent of sales declined to 36% in the third quarter compared to 53% a year ago and 57% from this year’s second quarter. We initiated additional expense savings actions in October, including reductions in our senior management compensation structure, which we anticipate will benefit our fourth quarter results. Overall, we expect these initiatives to reduce our operating expenses, on an annualized basis, by over $2 million,” concluded Mr. Lucas.

“Demand for our OLED microdisplays continues to be strong. Our backlog of $6.3 million reflects the fulfillment of several sizeable orders during the quarter and an approximate $1.1 million reduction from the government’s cancelation of the ENVG-III program as it begins fielding the 108,000 system ENVG-B program where we are supplying displays to the two prime contractors on the program, ” stated Andrew G. Sculley, CEO. “We believe our backlog in the near term will return to or exceed recent levels as our business development team is currently negotiating a number of large orders. In addition, we are currently manufacturing displays for a new helicopter program with deliveries beginning in the current quarter.

“Orders for the F-35 program and other long-term programs continue to meet our expectations. Our displays for the F-35 program were recently highlighted in Naval Aviation News where it was reported that the improved Generation III helmet, incorporating our OLED displays, performed well in operational testing and will be fully implemented to the entire F-35 community.

“From a technology advancement perspective, we are on target to achieve 10,000 nits brightness by the second quarter of 2020 and are working to reach more than 25,000 nits within three years. This high level of brightness is being requested within the U.S. military and we are pursuing government funding as part of this effort.

“Finally, during the third quarter, we received 93 orders, of which 7 were from new customers, and supplied products for 23 new programs. I am especially pleased to report that we have orders from two new medical customers and continue to supply an existing medical customer under our long-term contract,” concluded Mr. Sculley.

For earnings history and earnings-related data on eMagin Corporation (EMAN) click here.

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