Universal Display Corporation (PANL) swung to a net loss for the quarter ended Sep. 30, 2016. The company has made a net loss of $1.50 million, or $ 0.03 a share in the quarter, against a net profit of $7.05 million, or $0.15 a share in the last year period. On adjusted basis, net loss for the quarter stood at $1.50 million, or $0.03 a share compared with a net profit of $5.94 million, or $0.13 a share in the last year period. Revenue during the quarter dropped 23.35 percent to $30.21 million from $39.42 million in the previous year period. Gross margin for the quarter contracted 1713 basis points over the previous year period to 54.26 percent. Operating margin for the quarter stood at negative 9.94 percent as compared to a positive 21.25 percent for the previous year period.
Operating loss for the quarter was $3 million, compared with an operating income of $8.38 million in the previous year period.
However, the adjusted operating loss for the quarter stood at $3 million compared to operating profit of $8.38 million in prior year period.
“Our third quarter 2016 results were in line with our expectations for the year. As we noted last quarter, while our revenue growth expectations have been delayed until 2017, this year has continued to be a meaningful year to build and prepare for that future growth. Leading panel makers are building capacity for the next wave of high volume OLED production to begin ramping next year, OEMs are building new OLED product roadmaps, and we are building our infrastructure to meet the growing needs of our expanding customer base,” said Sidney D. Rosenblatt, Executive Vice President and Chief Financial Officer of Universal Display.
Universal Display Corporation projects revenue to be in the range of $190 million to $200 million for financial year 2016.
Operating cash flow drops significantly
Universal Display Corporation has generated cash of $40.33 million from operating activities during the nine month period, down 49.97 percent or $40.29 million, when compared with the last year period. The company has spent $79.09 million cash to meet investing activities during the nine month period as against cash outgo of $32.66 million in the last year period.
The company has spent $4.34 million cash to carry out financing activities during the nine month period as against cash outgo of $3.42 million in the last year period.
Cash and cash equivalents stood at $54.42 million as on Sep. 30, 2016, down 39.51 percent or $35.54 million from $89.96 million on Sep. 30, 2015.
Working capital declines
Universal Display Corporation has witnessed a decline in the working capital over the last year. It stood at $311.41 million as at Sep. 30, 2016, down 17.97 percent or $68.24 million from $379.65 million on Sep. 30, 2015. Current ratio was at 11.17 as on Sep. 30, 2016, up from 9.58 on Sep. 30, 2015.
Cash conversion cycle (CCC) has decreased to 74 days for the quarter from 109 days for the last year period. Days sales outstanding went up to 61 days for the quarter compared with 53 days for the same period last year.
Days inventory outstanding has decreased to 54 days for the quarter compared with 125 days for the previous year period. At the same time, days payable outstanding went down to 41 days for the quarter from 69 for the same period last year.
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