Universal Display Corporation Q2 2009 Earnings Call Transcript

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2009-08-11 15:10:53.0

Tags: Revenue, Utilization, Call Transcript, Needham & Co., Earnings, Manufacturing, Seeking Alpha, Universal Display Corp.

Question-and-Answer Session

Operator

(Operator instructions) Your first question is from the line of Jim Ricchiuti from Needham.

Jim Ricchiuti - Needham & Company

Question on the commercial revenue stream. I think we all recognize how difficult it is to forecast this portion of the revenue, but do you have any sense, you know, we’ve had now I guess about five or six consecutive quarters of sequential declines in the commercial revenue stream. Would you anticipate that this would be up quarter-over-quarter in Q3?

Steve Abramson

That obviously as we said is difficult to predict. We are encouraged by what’s going on so far in the quarter. What we believe has occurred as we said is they’ve incorporated a number of manufacturing process efficiencies, material utilization, as you’re probably well aware has been very low and the fact that they are now we believe running the tool at a much more efficient level, has allowed them to be much more efficient in terms of the material utilization.

Initially, a few years ago, utilization was very, very low and these materials are fairly expensive, even though when you look at a bill of materials, they are above pennies for the material content. They still are trying to increase their yields and their utilization.

So it’s difficult to predict, but we believe eventually this will turn around and start to go up.

Jim Ricchiuti - Needham & Company

A couple of follow-up questions. On the increase you saw in development chemical sales, for customers, were they all display related customers?

Steve Abramson

I believe so. I can’t tell you for sure, but I believe that is yes.

Jim Ricchiuti - Needham & Company

Last question. If you could just provide an update on where you guys stand with the green organic material and whether or not you can comment on Samsung potentially beginning to use those in their displays going forward.

Steve Abramson

As we have said, we are very encouraged by all of the work. We are going through their manufacturing qualification process. We have always believed the second half of this year is when they would start to incorporate it. We are continuing to provide quantities of materials for them to test. So we believe that and we still are on track for the end of this year.

Jim Ricchiuti - Needham & Company

Okay. Thank you.

Operator

Your next question is from the line of Yair Reiner with Oppenheimer & Company.

 

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