eMagin Posts Record Revenues and Profits in 4Q2009, Capping First Full Year of Profitability

eMagin Corporation, the leader in OLED technology for the design and manufacture of OLED microdisplays for high resolution imaging products, issued financial results for its full year and fourth quarter ending Dec. 31, 2009.

“I am very pleased to report that eMagin continued to gain momentum and deliver strong results in 2009, a year in which the company was able to substantially improve its profitability and grow revenues. Our performance was driven by higher customer demand for the company’s proprietary OLED microdisplays, significant gains in operational efficiency related to improved design and manufacturing processes, and prudent financial management. We concluded the year with no debt and can rely on higher cash flows from operations to fund our near-term growth in the military, industrial and consumer markets,” commented Andrew Sculley, eMagin’s president and CEO.

“Revenues for the fourth quarter climbed by 27% to a record $6.7 million, contributing to total annual revenues of $23.8 million,” Sculley added. “Profitability rose to a record pre-tax net income of $1.4M on the strength of significant gains in manufacturing yield and volume increases. Finally, we have had a very successful year for our technical achievements. We are making good progress in our efforts to develop a high resolution display that has higher resolution than an HD TV but that is under 1 inch in diagonal for the U.S. Army’s Telemedicine and Technology Research Center (TATRC). We announced the continuation of this project with $6.4M in funding over the next two years. In addition we have made great strides in improving OLED efficiency. We have developed two new OLED architectures during 2009. One that will give a doubling of efficiency in the OLED architecture for color or monochrome displays. The second will result in a tripling of efficiency of the OLED architecture for monochrome green used in night vision devices.”

eMagin Corporation generated revenue of $6.7 million for the fourth quarter of 2009 on increased product and contract sales, a 27% increase as compared to 4Q08. Gross margin was 58% of revenue on gross profit of $3.9 million for the quarter, compared to a gross margin of 51% on gross profit of $2.7 million in the equivalent period in 2008. The significant improvement in gross margins achieved over the prior year’s result was driven by higher production volumes with better yields, as the company continued to make strides in improving its manufacturing processes.

eMagin Corporation generated revenue of $23.8 million in 2009, an increase of 27% over the previous year. Annual product revenues increased by more than $4 million over the amount recorded during 2008, reflecting an improved product line and sales efforts, while contract revenues rose by 34% or $1 million. Gross profit for the year totaled $13.6 million, while gross margin increased significantly to 57%, 14 percentage points over the 43% gross margin recorded in 2008.

eMagin continued to see steady improvement in the strength of its balance sheet due to an increase in cash provided by operations and the fact that the company retired all of its remaining debt in 2009. During 2009, eMagin was able to fund its activities exclusively through cash generated by operations. The company signed a $3 million credit agreement during the third quarter that gives it additional financial strength and flexibility as it pursues growth in military, industrial and consumer markets going forward.

For the third year in a row, eMagin was recognized by Deloitte LLP as part of its Fast 500 ranking. eMagin ranked 10th among companies located in Washington and 309th for the fastest growing technology, media, telecommunications, life sciences and clean technology companies in North America. Based on current market conditions, company officials expect to achieve $28M to $32M in total revenue in 2010.