Universal Display Corporation Announces Third Quarter 2009 Financial Results

Universal Display Corporation (NASDAQ: PANL), a key innovator behind today’s and tomorrow’s evolving displays and lighting with its Universal PHOLED™ phosphorescent OLED technology and materials, today announced its results for the third quarter and nine months ended September 30, 2009.

Revenues for the third quarter of 2009 were $5,145,393, compared to $2,625,639 for the third quarter of 2008. Commercial revenue, which includes commercial chemical revenue, license and royalty revenues, and commercialization assistance revenue, was $1,621,416 for the quarter, compared to $1,324,924 for the third quarter of 2008. Developmental revenue, which includes development chemical revenue, contract research revenue, and technology development revenue, was $3,523,977 for the quarter, compared to $1,300,715 for the third quarter of 2008.

The increase in development revenue for the third quarter of 2009 included a non-refundable payment of $1,500,000 that the company received from Kyocera Corporation ("Kyocera”) last year. This payment was for technical assistance previously provided to a subsidiary of Kyocera established to conduct its OLED activities. The payment was previously classified as deferred revenue because it was creditable against a portion of the upfront fee under the company’s license agreement with Kyocera. The license agreement was to become effective upon notice from Kyocera given on or before December 31, 2009. Kyocera has since indicated that it will not be providing this notice because its OLED subsidiary has been dissolved.

For the third quarter of 2009, the company reported a net loss of $4,672,847, or $(0.13) per diluted share, versus a net loss of $5,302,983, or $(0.15) per diluted share, for the third quarter of 2008. The improvement in the net loss was primarily due to an increase in revenues during the quarter, partially offset by a decrease in interest income, an increase in operating expenses and a loss on a stock warrant liability.

For the nine-months ended September 30, 2009, the company reported revenues of $10,935,605, compared to revenues of $7,488,056 for the same period of 2008. Commercial revenue for the first nine months of 2009 totalled $4,229,609, compared to $4,275,476 for the same period of 2008. Developmental revenue for the first nine months of 2009 totalled $6,705,996, compared to $3,212,580 for the same period of 2008.

For the nine months ended September 30, 2009, the net loss totalled $16,657,624, or $(0.46) per diluted share, versus a net loss of $14,702,158, or $(0.41) per diluted share, for the same period of 2008.

"This was an encouraging quarter for Universal Display, with gains in both royalty and license fee revenue,” said Sidney D. Rosenblatt, Executive Vice President and Chief Financial Officer of Universal Display. "We are seeing increased advertising and marketing of our licensees’ products that feature AMOLED displays and our technology and materials, and an associated increase in adoption of these products. We believe that this trend will continue and sales of these products will increase as the global economic environment continues to improve.”

Mr. Rosenblatt continued, "We are encouraged by the rate of research and development on flexible displays for the U.S. Department of Defense and energy efficient white OLED lighting for the U.S. Department of Energy. Looking ahead, as the market for small-area AMOLED displays continues to mature, we expect growth in larger-area AMOLED displays for the TV market in 2010 and beyond.”

Operating expenses were $8,938,169 for the third quarter of 2009, compared to $8,458,503 for the same quarter of 2008. Operating expenses for the quarter were consistent with expectations and are expected to remain at or near the same level in the near-term.

Cash used in operating activities was $11,831,763 for the nine months ended September 30, 2009, compared to $6,034,956 for the same period of 2008. The increase in cash used in operating activities was mainly due to additional net losses, excluding non-cash charges, of $2,452,975 and a decrease in deferred license fees and deferred revenues as a result of lower cash payments of $2,033,333 from various customers.

The company’s balance sheet remained strong at quarter end, with cash, cash equivalents and short-term investments totalling $66,024,043 as of September 30, 2009, compared to $77,454,200 as of December 31, 2008.

In conjunction with this release, Universal Display will host a conference call, followed by a question and answer session, on Monday, November 9, at 5:00 p.m. Eastern Time. Interested parties may participate by calling 706-634-1395 at 4:55 p.m. Eastern Time and referencing conference PIN 39209446. A taped replay of the conference call will be available within two hours of the conclusion of the call and will remain available through Monday, November 23, 2009. The number to call for the taped replay is 706-645-9291 and the conference PIN is 39209446.

The conference call will be simultaneously broadcast live over the Internet through a webcast on the Universal Display website. To access the call, please visit the website at www.universaldisplay.com. An online archive of the webcast will be available within two hours of the conclusion of the call.

About Universal Display Corporation

Universal Display Corporation is a world leader in developing and commercializing innovative OLED technologies and materials for use in flat panel displays, solid-state lighting products, electronic communications and other opto-electronic devices. Universal Display is working with a network of world-class organizations, including Princeton University, the University of Southern California, the University of Michigan, and PPG Industries, Inc. Universal Display has also established numerous commercial relationships with companies such as Chi Mei EL Corporation, DuPont Displays, Inc., Konica Minolta Technology Center, Inc., LG Display Co., Ltd., Samsung Mobile Display Co, Ltd., Seiko Epson Corporation, Sony Corporation, Tohoku Pioneer Corporation and Toyota Industries Corporation. Universal Display currently owns or has exclusive or sole license rights with respect to more than 960 issued and pending patents worldwide.

Universal Display is located in the Princeton Crossroads Corporate Center in Ewing, New Jersey. Universal Display’s state-of-the-art facility is designed to further technology and materials development, technology transfer to manufacturing partners and work with customers to develop OLED products that meet their needs. Visit Universal Display on the Web at www.universaldisplay.com.

Forward-Looking Statements: All statements in this document that are not historical, such as those relating to Universal Display Corporation’s technologies and potential applications of those technologies, are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. You are cautioned not to place undue reliance on any forward-looking statements in this document, as they reflect Universal Display Corporation’s current views with respect to future events and are subject to risks and uncertainties that could cause actual results to differ materially from those contemplated. These risks and uncertainties are discussed in greater detail in Universal Display Corporation’s periodic reports on Form 10-K and Form 10-Q filed with the Securities and Exchange Commission, including, in particular, the section entitled "Risk Factors” in Universal Display Corporation’s annual report on Form 10-K for the year ended December 31, 2008, as amended. Universal Display Corporation disclaims any obligation to update any forward-looking statement contained in this document.