On March 15, high-tech lighting and display technologist Universal Display
- While the sales growth isn't very exciting, the shift from nearly pure research grants to commercial licenses and chemicals is. The company won't make any lucre until the big contracts start rolling in from electronics manufacturers like Samsung SDI, Sony
(NYSE:SNE) , or maybe even Apple(NASDAQ:AAPL) . - You can see signs of that shift in the dropping gross margin. When you actually have to make some chemicals before you can sell them, that's where you'll see the damage.
- Patience is a virtue. Even if it takes Universal Display years to commercialize its organic light-emitting diode (OLED) patents, the company is debt-free and cash-rich, and can tread water for many a red-ink quarter.
(Figures in thousands, except per-share data)
Income Statement Highlights
Q4 2006 |
Q4 2005 |
Change |
|
---|---|---|---|
Sales |
$2,544 |
$2,296 |
10.8% |
Net Profit |
($4,409) |
($4,642) |
5.0% |
EPS |
($0.14) |
($0.16) |
12.5% |
Diluted Shares |
31180.1 |
28952.0 |
7.7% |
Get back to basics with the income statement.
Margin Checkup
Q4 2006 |
Q4 2005 |
Change* |
|
---|---|---|---|
Gross Margin |
87.6% |
92.4% |
(4.9) |
Operating Margin |
(217.7%) |
(238.7%) |
21.0 |
Net Margin |
(173.3%) |
(202.2%) |
28.9 |
Margins are the earnings engine.
Balance Sheet Highlights
Assets |
Q4 2006 |
Q4 2005 |
Change |
---|---|---|---|
Cash + ST Invest. |
$49,055 |
$47,844 |
2.5% |
Accounts Rec. |
$2,113 |
$1,944 |
8.7% |
Inventory |
$31 |
$36 |
(15.0%) |
Liabilities |
Q4 2006 |
Q4 2005 |
Change |
---|---|---|---|
Accounts Payable |
$1,809 |
$1,250 |
44.7% |
Long-Term Debt |
$0 |
$0 |
N/A |
The balance sheet reflects the company's health.
Cash Flow Highlights
Q4 2006 |
Q4 2005 |
Change |
|
---|---|---|---|
Cash From Ops. |
($4,704) |
$552 |
N/A |
Capital Expenditures |
$2,349 |
$2,244 |
4.7% |
Free Cash Flow |
($7,053) |
($1,692) |
(316.8%) |
($5,913) |
($6,000) |
1.5% |
Free cash flow is a Fool's best friend.
Related Foolishness:
- Foolish Forecast: Universal Display On Display
- You'll Hear More About Universal Display
- 5 Undiscovered Growth Stocks
- Foolish Fundamentals: The Cash Flow Statement
Universal Display is a Motley Fool Rule Breakers selection. Read all about making money by breaking the rules with a free 30-day trial to our ultra-growth investing newsletter service.
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At the time of publication, Anders Bylund was a Universal Display shareholder, but had no other position in any company mentioned. Fool rules are here.