On Aug. 9, Motley Fool Rule Breaker and next-generation display technology expert Universal Display (Nasdaq: PANL) released second-quarter earnings for the period ending June 30.
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- Sales and profits can be lumpy for a company as small as Universal Display, and the timing of just a couple of orders changes the picture completely on this close-up, quarterly scale.
- The company is still burning cash, and it resorted to raising $37 million from investors by selling more stock this quarter. Hello, Mr. Dilution!
- Out of the three companies that have the highest hopes for OLED display and lighting technology, Universal Display receives a high four-star honor from our Motley Fool CAPS community. Competitor Cree (Nasdaq: CREE) also has four, and Cambridge Display (Nasdaq: OLED) carries a middling three-star rating.
(Figures in thousands, except per-share data)
Income Statement Highlights
| | Q2 2007 | Q2 2006 | Change |
|---|---|---|---|
| Sales | $2,315 | $3,009 | (23.1%) |
| Net Profit | ($5,175) | ($4,313) | (20.0%) |
| EPS | ($0.16) | ($0.14) | (14.3%) |
| Diluted Shares | 33,143.3 | 30,982.0 | 7.0% |
Get back to basics with the income statement [2].
Margin Checkup
| | Q2 2007 | Q2 2006 | Change* |
|---|---|---|---|
| Gross Margin | 91.3% | 92.1% | (0.8) |
| Operating Margin | (259.1%) | (161.3%) | (97.8) |
| Net Margin | (223.5%) | (143.3%) | (80.2) |
Margins are the earnings engine.
Balance Sheet Highlights
| Assets | Q2 2007 | Q2 2006 | Change |
|---|---|---|---|
| Cash + ST Invest. | $84,243 | $46,274 | 82.1% |
| Accounts Rec. | $1,838 | $2,534 | (27.5%) |
| Inventory | $2 | $98 | (97.7%) |
| Liabilities | Q2 2007 | Q2 2006 | Change |
|---|---|---|---|
| Accounts Payable | $1,801 | $1,146 | 57.1% |
| Long-Term Debt | $0 | $0 | N/A |
The balance sheet reflects the company's health.
Cash Flow Highlights
| | Q2 2007 | Q2 2006 | Change |
|---|---|---|---|
| Cash From Ops. | ($3,580) | ($2,300) | (55.6%) |
| Capital Expenditures | $144 | $1,140 | (87.3%) |
| Free Cash Flow | ($3,724) | ($3,440) | (8.2%) |
| Owner Earnings | ($4,442) | ($4,579) | 3.0% |
Free cash flow is a Fool's best friend.
© 2007 Universal Press Syndicate.