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eMagin Reports Good News for a Change
April 02, 2018

eMagin reported revenues increased 40% in the fourth quarter of 2017 and were $6.4 million as compared to $4.6 million in the fourth quarter of 2016. For the full year revenues were $22.0 million, up 3% from the $21.4 million in 2016. Product revenues totaled $18.7 million, representing an 8% increase from $17.3 million in 2016, primarily due to increased demand from newer military programs in 2017 compared to reduced demand from maturing programs in 2016. R&D contract revenues totaled approximately $3.3 million, up 7% from 2016. The increase in R&D contract revenue was mainly the result of an increase in the number of commercial R&D contracts and the work completed on these contracts, partially offset by a decrease in revenues from a US government R&D contract as it nears completion. Gross margin for 2017 was 23%, down from 30% in 2016. The decline in gross margin for the year was primarily due to $1.0 million in license revenue recorded in 2016 that had no associated cost, the impact during the third quarter of 2017 of lower volumes and higher unit costs attributable to a production equipment issue, and the write-down of obsolete inventory in the fourth quarter of 2017 as part of our product rationalization program.  Operating loss for the full year 2017 was $8.7 million versus $8.3 million in 2016. Net loss for the full year 2017, including the impact from the change in the fair value of the warrant liability and an income tax benefit, was $7.8 million, compared to a net loss of $8.0 million. eMagin’s primary market has traditionally been microdisplays for military use, which is low volume but high ASP, but in the last quarter they supplied their largest microdisplay design, a 2K x 2K full color RGB to potential commercial and consumer customers. They expect that this display design will expand product offerings for the consumer and commercial marketplaces.