EMA Emagin Corp

eMagin Corporation (AMEX:EMA), the leader in OLED virtual imaging technology, announced today financial results for the quarter ended June 30, 2005. eMagin will host a conference call to discuss the financial results today at 9:00 a.m. EST. Financial Summary: -- Revenue for the three months ended June 30, 2005, of $0.7 million sequentially was unchanged from first quarter level. Revenue for the three and six months ended June 30, 2005 was $0.7 million and $1.3 million as compared to $1.4 million and $2.0 million for the same periods ended June 30, 2004. -- Net loss and loss per share applicable to common stock for the three and six months ended June 30, 2005 was $4.5 million, or $0.05 per share and $8.0 million, or $0.10 per share as compared to a net loss of $1.4 million or $0.02 per share and $8.0 million, or $0.14 per share during the three and six month periods ended June 30, 2004. -- Balance sheet showed $8.7 million in working capital at June 30, 2005 as compared to $14.9 million on December 31, 2004. "I'm pleased to report that we are shipping our newest product, the Z800 3DVisor, to direct consumer customers as well as OEMs. We believe that this product represents a major breakthrough for the emerging virtual imaging industry," said Gary Jones, chief executive officer of eMagin. Jones continued, "During the first half of fiscal year 2005 revenue growth has been delayed as we took steps to complete the Z800 3DVisor production readiness and to increase our microdisplay output capacity. Nevertheless, design and commercialization of our new personal display product represents a tremendous breakthrough which was achieved in record time. We took advantage of enthusiastic feedback from thousands of users at both CES and E3 to fine tune the product, and then implemented those modifications through our suppliers and completed final FCC testing before delivering our first products. Our second quarter expenses reflected increases as we invested in new display designs, the Z800 3DVisor product was launched, and higher cost of goods from our efforts to increase capacity were recorded. The quarter's loss was higher as a result. "For 2005 our potential market is estimated to be approximately $100 million; it's projected to grow 80% in 2006 to $167 million and to over $1 billion annually by 2008. Our AMOLED microdisplay technology is ideally suited for the applications projected for eMagin to take a significant piece of this market growth. I am confident that the steps taken in the first half of the year will improve our probability of taking a leading role in the emerging market for near eye displays. I base this assertion on expectations provided by many of our OEM's who will likely lead this market as well as initial responses to the Z800 3DVisor. We continue to be the preferred display in most high resolution applications and expect that our planned new products will solidify this lead. "We believe that the Z800 3DVisor is a critical component to our future. It allows both consumers and OEM's to experience the significant advantages inherent in OLED based technologies versus the traditional LCD based systems, at a consumer price point for the first time. Our recent OEM design wins validate this with components or subsystems from the Z800 3DVisor being called out. The Z800 3DVisor and related products are expected to contribute positively to our second half overall revenue growth as well. " "Assuming display and manufacturing issues are as resolved as they currently appear, we should be in a position to begin shipping to our backlog by the end of this quarter." Full results are available by referencing the Companies 10Q for period ended June 30, 2005 being filed today with the SEC. Today's webcast is being distributed through the Thomson StreetEvents Network to both institutional and individual investors. Individual investors can listen to the call at www.fulldisclosure.com, Thomson/CCBN's individual investor portal, powered by StreetEvents. Institutional investors can access the call via Thomson's password-protected event management site, StreetEvents (www.streetevents.com). About eMagin Corporation A leader in virtual imaging technology, eMagin integrates high-resolution OLED microdisplays, magnifying optics, and systems technologies to create a virtual image that appears comparable to that of a computer monitor or a large-screen television. With unique technology for producing high-performance OLED-on-silicon microdisplays and related optical systems, eMagin is the only company to sample and supply these displays in commercial quantities to OEMs. In addition, the company sells integrated modules to military, industrial and medical customers, and has recently announced its first consumer system, the Z800 3DVisor 3D Visor. eMagin's microdisplay operations are co-located with IBM on its campus in East Fishkill, N.Y. Optics and system design facilities are located in Redmond, Wash. For information about eMagin and its products, readers can go to http://www.emagin.com and http://www.3dvisor.com Note: eMagin is a trademark of eMagin Corporation. Forward Looking Statements This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, including those regarding eMagin Corporation and its subsidiaries' expectations, intentions, strategies and beliefs pertaining to future events or future financial performance. All statements contained herein are based upon information available to eMagin's management as of the date hereof, and actual results may vary based upon future events, both within and without eMagin management's control. In some cases, you can identify forward-looking statements by terminology such as "may," "will," "should," "expect," "plan," "anticipate," "believe," "estimate," "predict," "potential" or "continue," the negative of such terms, or other comparable terminology. These statements are only predictions. Actual events or results may differ materially from those in the forward-looking statements as a result of various important factors, including those described in the Company's most recent filings with the SEC. Although we believe that the expectations reflected in the forward-looking statements are reasonable, such statements should not be regarded as a representation by the Company, or any other person, that such forward-looking statements will be achieved. The business and operations of the Company are subject to substantial risks which increase the uncertainty inherent in forward-looking statements. We undertake no duty to update any of the forward-looking statements, whether as a result of new information, future events or otherwise. In light of the foregoing, readers are cautioned not to place undue reliance on such forward-looking statements. -0- *T eMagin Corporation Condensed Consolidated Statements of Operations (In thousands except per share amounts) (unaudited) Three Months Ended June 30, June 30, 2005 2004 Revenue: Product revenues, net $ 652 $ 1,446 Cost of goods sold 2,389 1,537 -------------------- Gross Loss (1,737) (91) Expenses: Research and development 1,130 76 Selling, general and administrative 1,760 1,240 ------------------- Total expenses 2,890 1,316 Interest income (expense), net 129 8 Net loss $(4,498) $(1,399) -------------------- Net loss per share, basic and diluted $ (0.05) $ (0.02) ==================== -------------------- Weighted average number of common shares outstanding basic and diluted 82,445 63,578 ==================== eMagin Corporation Condensed Consolidated Statements of Operations (In thousands except per share amounts) (unaudited) Six Months Ended June 30, June 30, 2005 2004 Revenue: Product revenues, net $ 1,343 $ 1,986 Cost of goods sold 4,346 2,900 -------------------- Gross Loss (3,003) (914) Expenses: Research and development 2,016 84 Selling, general and administrative 3,095 1,939 -------------------- Total expenses 5,111 2,023 Interest income (expense), net 147 (5,068) Net loss $(7,967) $(8,005) -------------------- Net loss per share, basic and diluted $ (0.10) $ (0.14) ==================== -------------------- Weighted average number of common shares outstanding basic and diluted 81,955 57,759 ==================== eMagin Corporation Condensed Consolidated Balance Sheets (Dollars in thousands) June 30, December 31, 2005 2004 ASSETS (unaudited) Current assets: Cash and current equivalents $ 5,928 $13,457 Accounts receivable, net 487 536 Inventory 3,476 2,018 Prepaid and other assets 1,204 880 -------------------- Total current assets 11,095 16,891 Equipment and improvements, net 1,421 1,305 Other assets 152 186 Intangible assets, net 61 54 Total assets $12,729 $18,436 LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities: Accounts payable $ 933 $ 822 Accrued expenses 1,386 1,031 Advanced payments 33 64 Other current liabilities 62 49 -------------------- Total current liabilities 2,414 1,966 Other long-term payables 14 22 Stockholders' equity 10,301 16,448 Total liabilities and stockholders' equity $12,729 $18,436 *T