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eMagin Continues Suffering Equipment Failures
eMagin reported Q221 revenue of $6, down -18%, Y/Y. Product revenues were $5.7 million, down 9.5% Y/Y. The Y/Y decrease in display revenue resulted from downtime experienced with manufacturing equipment delaying certain display shipments into the third quarter. The decline was partially offset by higher sales to medical and veterinary customers. Total gross margin for Q221 was 9% on gross profit of $0.6 million compared with a gross margin of 26% on gross profit of $2.0 million in the prior year period. The decrease in gross margin reflects decreased shipments Q221 combined with the impact of lower manufacturing volumes and decreases in period cost capitalized into inventory due to equipment issues.
eMagin has a history of manufacturing tool failures, due to their aged lithography and deposition equipment. They are subject to similar interruptions until the company can generate sufficient free cash to replace the equipment, but they have had negative free cash for years and their balance sheet is unlikely to support another trip to the capital markets. Operating loss for Q221 was $2.9m compared with an operating loss of $1.3m last year resulting from decreased gross margin and increased investments in R&D in the current year. Net loss for the current period includes a $2.6 million non-cash profit related to the change in the fair value of a warrant liability.
CEO, Andrew Sculley, continues to report the company is on track to produce full color displays with peak luminance over 10,000 nits in 2021. But according to Scully MP won’t begin until 2023 at the earliest, when the mass market will require 35,000 to 50,000 nits depending on the application.
eMagin reported Q221 revenue of $6, down -18%, Y/Y. Product revenues were $5.7 million, down 9.5% Y/Y. The Y/Y decrease in display revenue resulted from downtime experienced with manufacturing equipment delaying certain display shipments into the third quarter. The decline was partially offset by higher sales to medical and veterinary customers. Total gross margin for Q221 was 9% on gross profit of $0.6 million compared with a gross margin of 26% on gross profit of $2.0 million in the prior year period. The decrease in gross margin reflects decreased shipments Q221 combined with the impact of lower manufacturing volumes and decreases in period cost capitalized into inventory due to equipment issues.
eMagin has a history of manufacturing tool failures, due to their aged lithography and deposition equipment. They are subject to similar interruptions until the company can generate sufficient free cash to replace the equipment, but they have had negative free cash for years and their balance sheet is unlikely to support another trip to the capital markets. Operating loss for Q221 was $2.9m compared with an operating loss of $1.3m last year resulting from decreased gross margin and increased investments in R&D in the current year. Net loss for the current period includes a $2.6 million non-cash profit related to the change in the fair value of a warrant liability.
CEO, Andrew Sculley, continues to report the company is on track to produce full color displays with peak luminance over 10,000 nits in 2021. But according to Scully MP won’t begin until 2023 at the earliest, when the mass market will require 35,000 to 50,000 nits depending on the application.
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