Pennsylvania
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23-2372688
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(State or other jurisdiction of incorporation or organization)
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(I.R.S. Employer Identification No.)
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|
|
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375 Phillips Boulevard, Ewing, New Jersey
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08618
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(Address of principal executive offices)
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(Zip Code)
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Title of Each Class
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Name of Each Exchange on Which Registered
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Common Stock, $0.01 par value
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|
The NASDAQ Stock Market LLC
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Large accelerated filer
X
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Accelerated filer
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Non-accelerated filer
(Do not check if a smaller reporting company)
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Smaller reporting company
____
|
•
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successful commercialization by organic light emitting diode (OLED) manufacturers of products incorporating our OLED technologies and materials and their continued willingness to utilize our OLED technologies and materials;
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•
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our ability to form and continue strategic relationships with manufacturers of OLED products;
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•
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the payments that we expect to receive under our existing contracts with OLED manufacturers and the terms of contracts that we expect to enter into with OLED manufacturers in the future;
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•
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the adequacy of protections afforded to us by the patents that we own or license and the cost to us of maintaining, enforcing and defending those patents;
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•
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our ability to obtain, expand and maintain patent protection in the future, and to protect our non-patented intellectual property;
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•
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our exposure to and ability to defend third-party claims and challenges to our patents and other intellectual property rights;
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•
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our ability to maintain and improve our competitive position following the expiration of our fundamental p
hosphorescent organic light-emitting diode (
PHOLED) patents;
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•
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the potential commercial applications of and future demand for our OLED technologies and materials, and of OLED products in general;
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•
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the comparative advantages and disadvantages of our OLED technologies and materials versus competing technologies and materials currently on the market;
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•
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the nature and potential advantages of any competing technologies that may be developed in the future;
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•
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the outcomes of our ongoing and future research and development activities, and those of others, relating to OLED technologies and materials;
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•
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our ability to access future OLED technology developments of our academic and commercial research partners;
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•
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our ability to acquire and supply OLED materials at cost competitive pricing;
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•
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our ability to compete against third parties with resources greater than ours;
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•
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our future capital requirements and our ability to obtain additional financing if and when needed;
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•
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our future OLED technology licensing and OLED material revenues and results of operations, including supply and demand for our OLED materials; and
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•
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general economic and market conditions.
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ITEM 1.
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BUSINESS
|
•
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higher power efficiencies, thereby reducing energy consumption;
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•
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a thinner profile and lighter weight;
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•
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higher contrast ratios, leading to sharper picture images and graphics;
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•
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wider viewing angles;
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•
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deposition on non-rigid substrates which enables conformable and flexible displays;
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•
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faster response times for video; and
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•
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lower cost manufacturing methods and materials.
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•
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sales of OLED materials for evaluation, development and commercial manufacturing;
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•
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intellectual property and technology licensing; and
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•
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technology development and support, including government contract work and support provided to third parties for commercialization of their OLED products.
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ITEM 1A.
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RISK FACTORS
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•
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OLED materials with improved lifetimes, efficiencies and color coordinates for larger area full-color OLED displays and general lighting products;
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•
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more robust OLED materials for use in more demanding large-scale manufacturing environments; and
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•
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scalable and cost-effective methods and technologies for the fabrication of large volume OLED materials and products.
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•
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compliance with a wide variety of foreign laws and regulations;
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•
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legal uncertainties regarding taxes, tariffs, quotas, export controls, export licenses and other trade barriers;
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•
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economic instability in the countries of our licensees, causing delays or reductions in orders for their products and therefore our royalties;
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•
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political instability in the countries in which our licensees operate, particularly in South Korea relating to its disputes with North Korea and in Taiwan relating to its disputes with China;
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•
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difficulties in collecting accounts receivable and longer accounts receivable payment cycles; and
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•
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potentially adverse tax and tariff consequences.
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•
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our revenues, expenses and operating results;
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•
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announcements by us or our competitors of technological developments, new product applications or license arrangements; and
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•
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other factors affecting the flat panel display and solid-state lighting industries in general.
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•
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shares of our common stock that are currently subject to restriction on sale become freely salable, whether through an effective registration statement or based on Rule 144 under the Securities Act of 1933, as amended; or
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•
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we issue additional shares of our common stock that might be or become freely salable, including shares that would be issued upon conversion of our preferred stock or the exercise of outstanding stock options.
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•
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adversely affect the voting power of the shareholders of our common stock;
|
•
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make it more difficult for a third party to gain control of us;
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•
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discourage bids for our common stock at a premium; or
|
•
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otherwise adversely affect the market price of our common stock.
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ITEM 1B.
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UNRESOLVED STAFF COMMENTS
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ITEM 2.
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PROPERTIES
|
ITEM 3.
|
LEGAL PROCEEDINGS
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Name
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Age
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Position
|
Sherwin I. Seligsohn
|
78
|
Founder and Chairman of the Board of Directors
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Steven V. Abramson
|
62
|
President, Chief Executive Officer and Director
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Sidney D. Rosenblatt
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66
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Executive Vice President, Chief Financial Officer, Treasurer, Secretary and Director
|
Julia J. Brown
|
52
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Senior Vice President and Chief Technical Officer
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Michael G. Hack
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57
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Vice President of Strategic Product Development and General Manager, OLED Lighting & Custom Displays
|
Janice K. Mahon
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56
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Vice President of Technology Commercialization and General Manager, PHOLED Material Sales Business
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Mauro Premutico
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48
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Vice President, Legal and General Manager, Patents and Licensing
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ITEM 4.
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MINE SAFETY DISCLOSURES
|
ITEM 5.
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MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
|
|
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High Close
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Low Close
|
||||
2013
|
|
|
|
|
||||
Fourth Quarter
|
|
$
|
38.20
|
|
|
$
|
29.15
|
|
Third Quarter
|
|
37.93
|
|
|
27.16
|
|
||
Second Quarter
|
|
33.35
|
|
|
26.02
|
|
||
First Quarter
|
|
34.55
|
|
|
25.20
|
|
||
2012
|
|
|
|
|
||||
Fourth Quarter
|
|
$
|
34.91
|
|
|
$
|
22.52
|
|
Third Quarter
|
|
43.58
|
|
|
30.76
|
|
||
Second Quarter
|
|
45.16
|
|
|
27.24
|
|
||
First Quarter
|
|
47.83
|
|
|
32.48
|
|
Period
|
|
Total Number of Shares Purchased
|
|
Weighted Average Price Paid per Share
|
|
Total Number of Shares Purchased as Part of Publicly Announced Program
|
|
Approximate Dollar Value of Shares that May Yet Be Purchased Under the Program
|
||||||
October 1 – October 31
|
|
98
|
|
|
$
|
30.86
|
|
|
n/a
|
|
|
$
|
—
|
|
November 1 – November 30
|
|
—
|
|
|
—
|
|
|
n/a
|
|
|
—
|
|
||
December 1 – December 31
|
|
—
|
|
|
—
|
|
|
n/a
|
|
|
—
|
|
||
Total
|
|
98
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
Cumulative Total Return
|
||||||||||||||||
|
|
12/08
|
|
12/09
|
|
12/10
|
|
12/11
|
|
12/12
|
|
12/13
|
||||||
Universal Display Corp.
|
|
100.00
|
|
|
130.79
|
|
|
324.34
|
|
|
388.25
|
|
|
271.11
|
|
|
363.60
|
|
Russell 2000
|
|
100.00
|
|
|
127.17
|
|
|
161.32
|
|
|
154.59
|
|
|
179.86
|
|
|
249.69
|
|
NASDAQ Electronic Components
|
|
100.00
|
|
|
156.84
|
|
|
178.93
|
|
|
170.31
|
|
|
175.62
|
|
|
235.40
|
|
ITEM 6.
|
SELECTED FINANCIAL DATA
|
(in thousands, except share and per share data)
|
|
Year Ended December 31,
|
||||||||||||||||||
|
|
2013
|
|
2012
|
|
2011
|
|
2010
|
|
2009
|
||||||||||
Operating Results:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Total revenue
|
|
$
|
146,639
|
|
|
$
|
83,244
|
|
|
$
|
61,289
|
|
|
$
|
30,545
|
|
|
$
|
15,787
|
|
Cost of material sales
|
|
28,889
|
|
|
4,528
|
|
|
3,731
|
|
|
888
|
|
|
374
|
|
|||||
Research and development expense
|
|
34,215
|
|
|
30,032
|
|
|
24,129
|
|
|
21,695
|
|
|
21,122
|
|
|||||
Selling, general and administrative expense
|
|
24,745
|
|
|
19,550
|
|
|
18,940
|
|
|
13,041
|
|
|
10,922
|
|
|||||
Patent costs and amortization of acquired technology
|
|
17,273
|
|
|
13,385
|
|
|
7,442
|
|
|
4,271
|
|
|
3,240
|
|
|||||
Interest income
|
|
811
|
|
|
1,240
|
|
|
994
|
|
|
279
|
|
|
670
|
|
|||||
Income tax benefit (expense)
(1)
|
|
35,044
|
|
|
(5,208
|
)
|
|
714
|
|
|
134
|
|
|
130
|
|
|||||
Net income (loss)
|
|
74,052
|
|
|
9,660
|
|
|
3,155
|
|
|
(19,917
|
)
|
|
(20,505
|
)
|
|||||
Net income (loss) per common share, basic
|
|
$
|
1.61
|
|
|
$
|
0.21
|
|
|
$
|
0.07
|
|
|
$
|
(0.53
|
)
|
|
$
|
(0.56
|
)
|
Net income (loss) per common share, diluted
|
|
$
|
1.59
|
|
|
$
|
0.21
|
|
|
$
|
0.07
|
|
|
$
|
(0.53
|
)
|
|
$
|
(0.56
|
)
|
Unaudited non-GAAP Measures:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Adjusted net income (loss)*
|
|
32,634
|
|
**
|
9,660
|
|
|
3,155
|
|
|
(19,917
|
)
|
|
(20,505
|
)
|
|||||
Adjusted net income (loss) per common share, basic*
|
|
$
|
0.71
|
|
**
|
$
|
0.21
|
|
|
$
|
0.07
|
|
|
$
|
(0.53
|
)
|
|
$
|
(0.56
|
)
|
Adjusted net income (loss) per common share, diluted*
|
|
$
|
0.70
|
|
**
|
$
|
0.21
|
|
|
$
|
0.07
|
|
|
$
|
(0.53
|
)
|
|
$
|
(0.56
|
)
|
Balance Sheet Data:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Total assets
|
|
$
|
462,754
|
|
|
$
|
385,524
|
|
|
$
|
373,878
|
|
|
$
|
92,327
|
|
|
$
|
80,140
|
|
Current liabilities
|
|
23,229
|
|
|
22,299
|
|
|
19,517
|
|
|
25,045
|
|
|
13,966
|
|
|||||
Shareholders’ equity
|
|
427,686
|
|
|
350,235
|
|
|
342,227
|
|
|
57,430
|
|
|
59,628
|
|
|||||
Other Financial Data:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Working capital
|
|
$
|
303,819
|
|
|
$
|
245,246
|
|
|
$
|
342,787
|
|
|
$
|
57,355
|
|
|
$
|
53,664
|
|
Capital expenditures
|
|
4,710
|
|
|
2,737
|
|
|
2,624
|
|
|
369
|
|
|
259
|
|
|||||
Additions to intangibles
|
|
359
|
|
|
109,102
|
|
|
440
|
|
|
—
|
|
|
—
|
|
|||||
Weighted average shares used in computing basic net income (loss) per common share
|
|
45,898,019
|
|
|
45,951,276
|
|
|
43,737,968
|
|
|
37,567,374
|
|
|
36,479,331
|
|
|||||
Weighted average shares used in computing diluted net income (loss) per common share
|
|
46,543,605
|
|
|
46,883,602
|
|
|
45,140,394
|
|
|
37,567,374
|
|
|
36,479,331
|
|
|||||
Shares of common stock outstanding, end of period
|
|
46,423,667
|
|
|
46,355,535
|
|
|
46,113,296
|
|
|
38,936,571
|
|
|
36,818,440
|
|
(in thousands, except per share data)
|
|
Year Ended December 31,
|
||||||||||||||||||
|
|
2013
|
|
2012
|
|
2011
|
|
2010
|
|
2009
|
||||||||||
|
|
(Unaudited)
|
||||||||||||||||||
Operating Results:
|
|
|
||||||||||||||||||
Net income (loss)
|
|
$
|
74,052
|
|
|
$
|
9,660
|
|
|
$
|
3,155
|
|
|
$
|
(19,917
|
)
|
|
$
|
(20,505
|
)
|
Non-GAAP Reconciling Items:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Deferred income tax expense
|
|
17,934
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Release of income tax valuation allowances
|
|
(59,352
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Total non-GAAP reconciling items
|
|
(41,418
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Non-GAAP Measures:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Adjusted net income (loss)
|
|
$
|
32,634
|
|
|
$
|
9,660
|
|
|
$
|
3,155
|
|
|
$
|
(19,917
|
)
|
|
$
|
(20,505
|
)
|
Adjusted net income (loss) per common share, basic *
|
|
$
|
0.71
|
|
|
$
|
0.21
|
|
|
$
|
0.07
|
|
|
$
|
(0.53
|
)
|
|
$
|
(0.56
|
)
|
Adjusted net income (loss) per common share, diluted **
|
|
$
|
0.70
|
|
|
$
|
0.21
|
|
|
$
|
0.07
|
|
|
$
|
(0.53
|
)
|
|
$
|
(0.56
|
)
|
ITEM 7.
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
•
|
sales of OLED materials for evaluation, development and commercial manufacturing;
|
•
|
intellectual property and technology licensing; and
|
•
|
technology development and support, including government contract work and support provided to third parties for commercialization of their OLED products.
|
•
|
the timing, cost and volume of sales of our OLED materials;
|
•
|
the timing of our receipt of license fees and royalties, as well as fees for future technology development and evaluation;
|
•
|
the timing and magnitude of expenditures we may incur in connection with our ongoing research and development and patent-related activities; and
|
•
|
the timing and financial consequences of our formation of new business relationships and alliances.
|
•
|
the general market conditions in the investee’s industry or geographic area, including adverse regulatory or economic changes;
|
•
|
factors related to the investee’s ability to remain in business, such as the investee’s liquidity, debt ratios, and the rate at which the investee is using its cash; and
|
•
|
an increase in revenue of
$63.4 million
, which includes increases in both material sales and royalty and license fees, partially offset by a
$3.2 million
decrease in technology development and support revenue; offset by
|
•
|
an increase in operating expenses of
$38.8 million
, which includes a
$24.4 million
increase in the cost of material sales, a
$3.9 million
increase in patent costs and amortization of acquired technology, a
$5.2 million
increase in selling, general and administrative expenses and a
$4.2 million
increase in research and development expenses, all of which are described below.
|
•
|
the increase in operating income of
$24.6 million
; and
|
•
|
a tax benefit of $35.0 million resulting primarily from the release of income tax valuation allowances.
|
|
|
Year Ended December 31,
|
|
Increase (Decrease)
|
|||||||||||
|
|
2013
|
|
2012
|
|
$
|
|
%
|
|||||||
Material Sales:
|
|
|
|
|
|
|
|
|
|||||||
Commercial material sales
|
|
$
|
88,131
|
|
|
$
|
27,350
|
|
|
$
|
60,781
|
|
|
222
|
%
|
Developmental material sales
|
|
7,582
|
|
|
17,122
|
|
|
(9,540
|
)
|
|
(56
|
)%
|
|||
Total Material Sales
|
|
$
|
95,713
|
|
|
$
|
44,472
|
|
|
$
|
51,241
|
|
|
115
|
%
|
|
|
Year Ended December 31,
|
|
Increase
|
|||||||||||
|
|
2013
|
|
2012
|
|
$
|
|
%
|
|||||||
Material Sales:
|
|
|
|
|
|
|
|
|
|||||||
Phosphorescent emitter sales
|
|
$
|
61,552
|
|
|
$
|
38,424
|
|
|
$
|
23,128
|
|
|
60
|
%
|
Host material sales
|
|
34,161
|
|
|
6,048
|
|
|
28,113
|
|
|
465
|
%
|
|||
Total Material Sales
|
|
$
|
95,713
|
|
|
$
|
44,472
|
|
|
$
|
51,241
|
|
|
115
|
%
|
|
|
Year Ended December 31,
|
|
Increase
|
|||||||||||
|
|
2013
|
|
2012
|
|
$
|
|
%
|
|||||||
Royalty and license fees
|
|
$
|
47,006
|
|
|
$
|
31,698
|
|
|
$
|
15,308
|
|
|
48
|
%
|
|
|
Year Ended December 31,
|
|
(Decrease)
|
|||||||||||
|
|
2013
|
|
2012
|
|
$
|
|
%
|
|||||||
Technology development and support revenue
|
|
$
|
3,920
|
|
|
$
|
7,074
|
|
|
$
|
(3,154
|
)
|
|
(45
|
)%
|
|
|
Year Ended December 31,
|
||||||
|
|
2013
|
|
2012
|
||||
Commercial material sales
|
|
$
|
88,131
|
|
|
$
|
27,350
|
|
Cost of commercial material sales
|
|
28,635
|
|
|
4,250
|
|
||
% of commercial material sales
|
|
32
|
%
|
|
16
|
%
|
•
|
increased costs of $2.8 million associated with bonus and stock-based compensation for certain executive officers as well as increased salaries and salary-related expenses associated with new and existing employees;
|
•
|
increased costs of $1.2 million related to sponsored research and development contracts; and
|
•
|
increased costs of $1.3 million incurred under our agreement with PPG Industries; offset by
|
•
|
decreased consulting and contract costs of $1.2 million due to decreased outsourced research and development efforts, fewer government contracts outstanding when compared to the prior year, as well as the timing of costs incurred.
|
•
|
an increase in revenue of
$22.0 million
, which includes increases in both material sales and royalty and license fees; offset by
|
•
|
an increase in operating expenses of
$14.0 million
, which includes a
$5.9 million
increase in research and development expenses and a
$5.9 million
increase in patent costs and amortization of acquired technology, all of which are described below.
|
•
|
an increase of operating income of
$8.0 million
; and
|
•
|
a decrease in loss on stock warrant liability of
$4.2 million
; offset by
|
•
|
an increase in income tax expense of
$5.9 million
|
|
|
Year Ended December 31,
|
|
Increase
|
|||||||||||
|
|
2012
|
|
2011
|
|
$
|
|
%
|
|||||||
Material Sales:
|
|
|
|
|
|
|
|
|
|||||||
Commercial material sales
|
|
$
|
27,350
|
|
|
$
|
25,339
|
|
|
$
|
2,011
|
|
|
8
|
%
|
Developmental material sales
|
|
17,122
|
|
|
12,105
|
|
|
5,017
|
|
|
41
|
%
|
|||
Total Material Sales
|
|
$
|
44,472
|
|
|
$
|
37,444
|
|
|
$
|
7,028
|
|
|
19
|
%
|
|
|
Year Ended December 31,
|
|
Increase (Decrease)
|
|||||||||||
|
|
2012
|
|
2011
|
|
$
|
|
%
|
|||||||
Material Sales:
|
|
|
|
|
|
|
|
|
|||||||
Phosphorescent emitter sales
|
|
$
|
38,424
|
|
|
$
|
26,211
|
|
|
$
|
12,213
|
|
|
47
|
%
|
Host material sales
|
|
6,048
|
|
|
11,233
|
|
|
(5,185
|
)
|
|
(46
|
)%
|
|||
Total Material Sales
|
|
$
|
44,472
|
|
|
$
|
37,444
|
|
|
$
|
7,028
|
|
|
19
|
%
|
|
|
Year Ended December 31,
|
|
Increase
|
|||||||||||
|
|
2012
|
|
2011
|
|
$
|
|
%
|
|||||||
Royalty and license fees
|
|
$
|
31,698
|
|
|
$
|
15,345
|
|
|
$
|
16,353
|
|
|
107
|
%
|
|
|
Year Ended December 31,
|
|
(Decrease)
|
|||||||||||
|
|
2012
|
|
2011
|
|
$
|
|
%
|
|||||||
Technology development and support revenue
|
|
$
|
7,074
|
|
|
$
|
8,500
|
|
|
$
|
(1,426
|
)
|
|
(17
|
)%
|
|
|
Year Ended December 31,
|
||||||
|
|
2012
|
|
2011
|
||||
Commercial material sales
|
|
$
|
27,350
|
|
|
$
|
25,339
|
|
Cost of commercial material sales
|
|
4,250
|
|
|
2,818
|
|
||
% of commercial material sales
|
|
16
|
%
|
|
11
|
%
|
•
|
increased costs of
$2.6 million
incurred under our agreement with PPG Industries;
|
•
|
increased costs of
$1.7 million
related to outsourced research and development efforts; and
|
•
|
increased costs of
$1.6 million
related to sponsored research and development contracts.
|
•
|
an increase in net income of
$30.8 million
, which amount excludes the impact of non-cash items;
|
•
|
the impact of the timing of net inventory purchases of
$7.6 million
based on future customer needs; primarily offset by
|
•
|
the impact of the timing of accounts receivable collections of
$9.1 million
.
|
|
|
Payments due by period (in thousands)
|
||||||||||||||||||
Contractual Obligations
|
|
Total
|
|
Less than 1 year
|
|
1-3 years
|
|
3-5 years
|
|
More than 5 years
|
||||||||||
Estimated retirement plan benefit payments
|
|
$
|
22,102
|
|
|
$
|
—
|
|
|
$
|
739
|
|
|
$
|
1,669
|
|
|
$
|
19,694
|
|
Research related obligations
|
|
7,939
|
|
|
2,819
|
|
|
4,373
|
|
|
747
|
|
|
—
|
|
|||||
Minimum royalty obligation
(1)
|
|
500
|
|
|
100
|
|
|
200
|
|
|
200
|
|
|
$100/year
|
||||||
Total
(2)
|
|
$
|
30,541
|
|
|
$
|
2,919
|
|
|
$
|
5,312
|
|
|
$
|
2,616
|
|
|
$
|
19,694
|
|
ITEM 7A.
|
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|
ITEM 8.
|
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
|
ITEM 9.
|
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
|
ITEM 9A.
|
CONTROLS AND PROCEDURES
|
ITEM 9B.
|
OTHER INFORMATION
|
ITEM 10.
|
DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
|
ITEM 11.
|
EXECUTIVE COMPENSATION
|
ITEM 12.
|
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
|
ITEM 13.
|
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
|
ITEM 14.
|
PRINCIPAL ACCOUNTANT FEES AND SERVICES
|
ITEM 15.
|
EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
|
Management’s Report on Internal Control Over Financial Reporting
|
F-2
|
Reports of Independent Registered Public Accounting Firm
|
F-3
|
Consolidated Balance Sheets
|
F-5
|
Consolidated Statements of Income
|
F-6
|
Consolidated Statements of Comprehensive Income
|
F-7
|
Consolidated Statements of Shareholders’ Equity
|
F-8
|
Consolidated Statements of Cash Flows
|
F-10
|
Notes to Consolidated Financial Statements
|
F-11
|
Exhibit
Number |
|
Description
|
3.1
|
|
Amended and Restated Articles of Incorporation of the registrant
(1)
|
3.2
|
|
Bylaws of the registrant
(2)
|
10.1#
|
|
Amended and Restated Change in Control Agreement between the registrant and Sherwin I. Seligsohn, dated as of November 4, 2008
(3)
|
10.2#
|
|
Amended and Restated Change in Control Agreement between the registrant and Steven V. Abramson, dated as of November 4, 2008
(3)
|
10.3#
|
|
Amended and Restated Change in Control Agreement between the registrant and Sidney D. Rosenblatt, dated as of November 4, 2008
(3)
|
10.4#
|
|
Amended and Restated Change in Control Agreement between the registrant and Julia J. Brown, dated as of November 4, 2008
(3)
|
10.5#
|
|
Amended and Restated Change in Control Agreement between the registrant and Janice K. Mahon, dated as of November 4, 2008
(3)
|
10.6#
|
|
Second Amended and Restated Change in Control Agreement between the registrant and Michael G. Hack, dated as of January 11, 2010
(4)
|
10.7#
|
|
Non-Competition and Non-Solicitation Agreement between the registrant and Sherwin I. Seligsohn, dated as of February 23, 2007
(5)
|
10.8#
|
|
Non-Competition and Non-Solicitation Agreement between the registrant and Steven V. Abramson, dated as of January 26, 2007
(5)
|
10.9#
|
|
Non-Competition and Non-Solicitation Agreement between the registrant and Sidney D. Rosenblatt, dated as of February 7, 2007
(5)
|
10.10#
|
|
Non-Competition and Non-Solicitation Agreement between the registrant and Julia J. Brown, dated as of February 5, 2007
(5)
|
10.11#
|
|
Non-Competition and Non-Solicitation Agreement between the registrant and Janice K. Mahon, dated as of February 23, 2007
(3)
|
10.12#
|
|
Non-Competition and Non-Solicitation Agreement between the registrant and Michael G. Hack, dated as of February 5, 2007
(4)
|
10.13#
|
|
Equity Retention Agreement between the registrant and Steven V. Abramson, dated as of March 18, 2010
(6)
|
Exhibit
Number |
|
Description
|
10.14#
|
|
Equity Retention Agreement between the registrant and Sidney D. Rosenblatt, dated as of March 18, 2010
(6)
|
10.15#
|
|
Equity Retention Agreement between the registrant and Julia J. Brown, dated as of January 6, 2011
(7)
|
10.16#
|
|
Equity Retention Agreement between the registrant and Janice K. Mahon, dated as of January 6, 2011
(7)
|
10.17#
|
|
Equity Retention Agreement between the registrant and Michael G. Hack, dated as of January 6, 2011
(7)
|
10.18#
|
|
Equity Retention Agreement between the registrant and Julia J. Brown, dated as of March 8, 2012
(8)
|
10.19#
|
|
Equity Retention Agreement between the registrant and Janice K. Mahon, dated as of March 8, 2012
(8)
|
10.20#
|
|
Equity Retention Agreement between the registrant and Michael G. Hack, dated as of March 8, 2012
(8)
|
10.21#
|
|
Amended and Restated Change in Control Agreement between the Registrant and Mauro Premutico, dated April 16, 2012
(9)
|
10.22#
|
|
Equity Retention Agreement between the Registrant and Mauro Premutico, dated April 16, 2012
(9)
|
10.23#
|
|
Supplemental Executive Retirement Plan, dated as of April 1, 2010
(6)
|
10.24#
|
|
Amended and Restated Equity Compensation Plan, effective as of March 7, 2013
(10)
|
10.25
|
|
Sponsored Research Agreement between the registrant and the University of Southern California, dated as of May 1, 2006
(11)
|
10.26
|
|
Amendment No. 1 to the Sponsored Research Agreement between the registrant and the University of Southern California, dated as of May 1, 2006
(3)
|
10.27
|
|
Amendment No. 2 to the Sponsored Research Agreement between the registrant and the University of Southern California, dated as of May 7, 2009
(12)
|
10.28
|
|
1997 Amended License Agreement among the registrant, The Trustees of Princeton University and the University of Southern California, dated as of October 9, 1997
(13)
|
10.29
|
|
Amendment #1 to the Amended License Agreement among the registrant, the Trustees of Princeton University and the University of Southern California, dated as of August 7, 2003
(14)
|
10.3
|
|
Amendment #2 to the Amended License Agreement among the registrant, the Trustees of Princeton University, the University of Southern California and the Regents of the University of Michigan, dated as of January 1, 2006
(14)
|
10.31
|
|
Termination, Amendment and License Agreement by and among the registrant, PD-LD, Inc., Dr. Vladimir S. Ban, and The Trustees of Princeton University, dated as of July 19, 2000
(15)
|
10.32
|
|
Letter of Clarification of UDC/GPEC Research and License Arrangements between the registrant and Global Photonic Energy Corporation, dated as of June 4, 2004
(5)
|
10.33+
|
|
Amended and Restated OLED Materials Supply and Service Agreement between the registrant and PPG Industries, Inc., dated as of October 1, 2011
(16)
|
10.34+
|
|
OLED Patent License Agreement between the registrant and Samsung Mobile Display Co., Ltd., dated as of August 22, 2011
(17)
|
10.35+
|
|
Supplemental OLED Material Purchase Agreement between the registrant and Samsung Mobile Display Co., Ltd., dated as of August 22, 2011
(17)
|
10.36+
|
|
Settlement and License Agreement between the registrant and Seiko Epson Corporation, dated as of July 31, 2006
(18)
|
10.37+
|
|
Amendment No. 1 to the Settlement and License Agreement between the registrant and Seiko Epson Corporation, dated as of March 30, 2009
(19)
|
10.38+
|
|
OLED Technology License Agreement between the registrant and Konica Minolta Holdings, Inc., dated as of August 11, 2008
(20)
|
10.39+
|
|
Memorandum of Agreement between the registrant and Moser Baer Technologies Inc., dated as of February 4, 2011
(7)
|
10.40+
|
|
Limited-Term OLED Technology License Agreement between the registrant and Panasonic Idemitsu OLED Lighting Co., Ltd., dated as of August 23, 2011
(16)
|
10.41+
|
|
OLED Technology License Agreement between the registrant and Showa Denko K.K., dated as of December 17, 2009
(21)
|
10.42+
|
|
OLED Technology License Agreement between the registrant and Pioneer Corporation, dated as of September 27, 2011
(22)
|
10.43+
|
|
OLED Technology License Agreement between the registrant and Lumiotec, Inc., dated as of January 5, 2012
(8)
|
10.44+
|
|
Patent Sale Agreement, dated as of July 23, 2012 by and between FUJIFILM Corporation and the Company.
(23)
|
10.45
|
|
Amendment No. 3 to the Sponsored Research Agreement between the registrant and the University of Southern California, dated as of June 1, 2013
(24)
.
|
Exhibit
Number |
|
Description
|
10.46#
|
|
Universal Display Corporation Annual Incentive Plan
(25)
|
10.47#*
|
|
Form Agreement - Restricted Stock Unit Grant Letter
|
10.48#*
|
|
Form Agreement - Performance Unit Grant Letter
|
21*
|
|
Subsidiaries of the registrant
|
23.1*
|
|
Consent of KPMG LLP
|
31.1*
|
|
Certifications of Steven V. Abramson, Chief Executive Officer, as required by Rule 13a-14(a) or Rule 15d-14(a)
|
31.2*
|
|
Certifications of Sidney D. Rosenblatt, Chief Financial Officer, as required by Rule 13a-14(a) or Rule 15d-14(a)
|
32.1**
|
|
Certifications of Steven V. Abramson, Chief Executive Officer, as required by Rule 13a-14(b) or Rule 15d-14(b), and by 18 U.S.C. Section 1350. (This exhibit shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liability of that section. Further, this exhibit shall not be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended.)
|
32.2**
|
|
Certifications of Sidney D. Rosenblatt, Chief Financial Officer, as required by Rule 13a-14(b) or Rule 15d-14(b), and by 18 U.S.C. Section 1350. (This exhibit shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liability of that section. Further, this exhibit shall not be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended.)
|
101.INS*
|
|
XBRL Instance Document
|
101.SCH*
|
|
XBRL Taxonomy Extension Schema Document
|
101.CAL*
|
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
101.DEF*
|
|
XBRL Taxonomy Extension Definition Linkbase Document
|
101.LAB*
|
|
XBRL Taxonomy Extension Label Linkbase Document
|
101.PRE*
|
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
*
|
|
Filed herewith.
|
**
|
|
Furnished herewith.
|
#
|
|
Management contract or compensatory plan or arrangement.
|
+
|
|
Confidential treatment has been accorded to certain portions of this exhibit pursuant to Rule 406 under the Securities Act of 1933, as amended, or Rule 24b-2 under the Securities Exchange Act of 1934, as amended.
|
(1)
|
|
Filed as an Exhibit to the Quarterly Report on Form 10-Q for the quarter ended June 30, 2013, filed with the SEC on August 8, 2013.
|
(2)
|
|
Filed as an Exhibit to the Annual Report on Form 10-K for the year ended December 31, 2003, filed with the SEC on March 1, 2004.
|
(3)
|
|
Filed as an Exhibit to the Annual Report on Form 10-K for the year ended December 31, 2008, filed with the SEC on March 12, 2009.
|
(4)
|
|
Filed as an Exhibit to the Annual Report on Form 10-K for the year ended December 31, 2009, filed with the SEC on March 15, 2010.
|
(5)
|
|
Filed as an Exhibit to the Annual Report on Form 10-K for the year ended December 31, 2006, filed with the SEC on March 15, 2007.
|
(6)
|
|
Filed as an Exhibit to the Quarterly Report on Form 10-Q for the quarter ended March 31, 2010, filed with the SEC on May 10, 2010.
|
(7)
|
|
Filed as an Exhibit to a Current Report on Form 8-K, filed with the SEC on March 21, 2011.
|
(8)
|
|
Filed as an Exhibit to the Quarterly Report on Form 10-Q for the quarter ended March 31, 2012, filed with the SEC on May 9, 2012.
|
(9)
|
|
Filed as an Exhibit to the Quarterly Report on Form 10-Q for the quarter ended June 30, 2012, filed with the SEC on August 8, 2012.
|
(10)
|
|
Filed as an Exhibit to the Quarterly Report on Form 10-Q for the quarter ended March 31, 2013, filed with the SEC on May 9, 2013.
|
(11)
|
|
Filed as an Exhibit to the Quarterly Report on Form 10-Q for the quarter ended June 30, 2006, filed with the SEC on August 9, 2006.
|
(12)
|
|
Filed as an Exhibit to the Quarterly Report on Form 10-Q for the quarter ended June 30, 2009, filed with the SEC on August 10, 2009.
|
(13)
|
|
Filed as an Exhibit to the Annual Report on Form 10K-SB for the year ended December 31, 1997, filed with the SEC on March 31, 1998.
|
(14)
|
|
Filed as an Exhibit to the Quarterly Report on Form 10-Q for the quarter ended September 30, 2003, filed with the SEC on November 10, 2003.
|
(15)
|
|
Filed as an Exhibit to the amended Quarterly Report on Form 10-Q for the quarter ended September 30, 2000, filed with the SEC on November 20, 2001.
|
(16)
|
|
Filed as an Exhibit to the Quarterly Report on Form 10-Q for the quarter ended September 30, 2011, filed with the SEC on November 8, 2011.
|
(17)
|
|
Filed as an Exhibit to an Amended Current Report on Form 8-K, filed with the SEC on December 19, 2011.
|
(18)
|
|
Filed as an Exhibit to the Quarterly Report on Form 10-Q for the quarter ended September 30, 2006, filed with the SEC on November 6, 2006.
|
(19)
|
|
Filed as an Exhibit to the Quarterly Report on Form 10-Q for the quarter ended March 31, 2009, filed with the SEC on May 7, 2009.
|
(20)
|
|
Filed as an Exhibit to the Quarterly Report on Form 10-Q for the quarter ended September 30, 2008, filed with the SEC on November 6, 2008.
|
(21)
|
|
Filed as an Exhibit to the Annual Report on Form 10-K for the year ended December 31, 2009, as amended, filed with the SEC on June 23, 2010.
|
(22)
|
|
Filed as an Exhibit to Amendment No. 1 to the Quarterly Report on Form 10-Q for the quarter ended September 30, 2011, filed with the SEC on January 27, 2012.
|
(23)
|
|
Filed as an Exhibit to a Current Report on Form 8-K, filed with the SEC on July 27, 2012.
|
(24)
|
|
Filed as an Exhibit to the Quarterly Report on Form 10-Q for the quarter ended September 30, 2013, filed with the SEC on November 7, 2013.
|
(25)
|
|
Filed as an Exhibit to a Current Report on Form 8-K, filed with the SEC on June 24, 2013.
|
|
UNIVERSAL DISPLAY CORPORATION
|
|
|
|
By: /s/ Sidney D. Rosenblatt
|
|
Sidney D. Rosenblatt
|
|
Executive Vice President, Chief Financial Officer,
|
|
Treasurer and Secretary
|
|
|
|
Date: February 28, 2014
|
Name
|
|
Title
|
|
Date
|
|
|
|
|
|
/s/ Sherwin I. Seligsohn
|
|
Founder and Chairman of the Board of Directors
|
|
February 28, 2014
|
Sherwin I. Seligsohn
|
|
|
|
|
|
|
|
|
|
/s/ Steven V. Abramson
|
|
President, Chief Executive Officer and Director (principal executive officer)
|
|
February 28, 2014
|
Steven V. Abramson
|
|
|
|
|
|
|
|
|
|
/s/ Sidney D. Rosenblatt
|
|
Executive Vice President, Chief Financial Officer, Treasurer, Secretary and Director (principal financial and accounting officer)
|
|
February 28, 2014
|
Sidney D. Rosenblatt
|
|
|
|
|
|
|
|
|
|
/s/ Leonard Becker
|
|
Director
|
|
February 28, 2014
|
Leonard Becker
|
|
|
|
|
|
|
|
|
|
/s/ Elizabeth H. Gemmill
|
|
Director
|
|
February 28, 2014
|
Elizabeth H. Gemmill
|
|
|
|
|
|
|
|
|
|
/s/ C. Keith Hartley
|
|
Director
|
|
February 28, 2014
|
C. Keith Hartley
|
|
|
|
|
|
|
|
|
|
/s/ Lawrence Lacerte
|
|
Director
|
|
February 28, 2014
|
Lawrence Lacerte
|
|
|
|
Consolidated Financial Statements:
|
|
|
|
||
|
||
|
||
|
||
|
||
|
||
|
||
|
Steven V. Abramson
President and Chief Executive Officer
|
|
Sidney D. Rosenblatt
Executive Vice President and Chief Financial Officer
|
|
|
Year Ended December 31,
|
||||||||||
|
|
2013
|
|
2012
|
|
2011
|
||||||
REVENUE:
|
|
|
|
|
|
|
||||||
Material sales
|
|
$
|
95,713
|
|
|
$
|
44,472
|
|
|
$
|
37,444
|
|
Royalty and license fees
|
|
47,006
|
|
|
31,698
|
|
|
15,345
|
|
|||
Technology development and support revenue
|
|
3,920
|
|
|
7,074
|
|
|
8,500
|
|
|||
Total revenue
|
|
146,639
|
|
|
83,244
|
|
|
61,289
|
|
|||
|
|
|
|
|
|
|
||||||
OPERATING EXPENSES:
|
|
|
|
|
|
|
||||||
Cost of material sales
|
|
28,889
|
|
|
4,528
|
|
|
3,731
|
|
|||
Research and development
|
|
34,215
|
|
|
30,032
|
|
|
24,129
|
|
|||
Selling, general and administrative
|
|
24,745
|
|
|
19,550
|
|
|
18,940
|
|
|||
Patent costs and amortization of acquired technology
|
|
17,273
|
|
|
13,385
|
|
|
7,442
|
|
|||
Royalty and license expense
|
|
3,273
|
|
|
2,073
|
|
|
1,360
|
|
|||
Total operating expenses
|
|
108,395
|
|
|
69,568
|
|
|
55,602
|
|
|||
Operating income
|
|
38,244
|
|
|
13,676
|
|
|
5,687
|
|
|||
INTEREST INCOME
|
|
811
|
|
|
1,240
|
|
|
994
|
|
|||
INTEREST EXPENSE
|
|
(47
|
)
|
|
(48
|
)
|
|
(50
|
)
|
|||
LOSS ON STOCK WARRANT LIABILITY
|
|
—
|
|
|
—
|
|
|
(4,190
|
)
|
|||
INCOME BEFORE INCOME TAXES
|
|
39,008
|
|
|
14,868
|
|
|
2,441
|
|
|||
INCOME TAX BENEFIT (EXPENSE)
|
|
35,044
|
|
|
(5,208
|
)
|
|
714
|
|
|||
NET INCOME
|
|
$
|
74,052
|
|
|
$
|
9,660
|
|
|
$
|
3,155
|
|
|
|
|
|
|
|
|
||||||
NET INCOME PER COMMON SHARE:
|
|
|
|
|
|
|
||||||
BASIC
|
|
$
|
1.61
|
|
|
$
|
0.21
|
|
|
$
|
0.07
|
|
DILUTED
|
|
$
|
1.59
|
|
|
$
|
0.21
|
|
|
$
|
0.07
|
|
|
|
|
|
|
|
|
||||||
WEIGHTED AVERAGE SHARES USED IN COMPUTING NET INCOME PER COMMON SHARE:
|
|
|
|
|
|
|
||||||
BASIC
|
|
45,898,019
|
|
|
45,951,276
|
|
|
43,737,968
|
|
|||
DILUTED
|
|
46,543,605
|
|
|
46,883,602
|
|
|
45,140,394
|
|
|
|
Year Ended December 31,
|
||||||||||
|
|
2013
|
|
2012
|
|
2011
|
||||||
NET INCOME
|
|
$
|
74,052
|
|
|
$
|
9,660
|
|
|
$
|
3,155
|
|
|
|
|
|
|
|
|
||||||
OTHER COMPREHENSIVE (LOSS) INCOME, NET OF TAX:
|
|
|
|
|
|
|
||||||
Unrealized loss on available-for-sale securities
|
|
(6
|
)
|
|
(31
|
)
|
|
(1
|
)
|
|||
Employee benefit plan:
|
|
|
|
|
|
|
||||||
Actuarial gain (loss) on retirement plan
|
|
901
|
|
|
(442
|
)
|
|
(418
|
)
|
|||
Amortization of prior service cost and actuarial loss for retirement plan included in net periodic pension costs
|
|
439
|
|
|
628
|
|
|
600
|
|
|||
Net change for employee benefit plan
|
|
1,340
|
|
|
186
|
|
|
182
|
|
|||
|
|
|
|
|
|
|
||||||
TOTAL OTHER COMPREHENSIVE INCOME
|
|
1,334
|
|
|
155
|
|
|
181
|
|
|||
|
|
|
|
|
|
|
||||||
COMPREHENSIVE INCOME
|
|
$
|
75,386
|
|
|
$
|
9,815
|
|
|
$
|
3,336
|
|
|
|
Series A
Nonconvertible
|
|
Common Stock
|
|
Additional
|
|
Accumulated
Deficit
|
|
Accumulated
Other
Comprehensive
Loss
|
|
Treasury Stock
|
|
Total
Shareholders’
Equity
|
|||||||||||||||||||||||
|
|
Preferred Stock
|
|
|
Paid-in
|
|
|
|
|
||||||||||||||||||||||||||||
|
|
Shares
|
|
Amount
|
|
Shares
|
|
Amount
|
|
Capital
|
|
|
|
Shares
|
|
Amount
|
|
||||||||||||||||||||
BALANCE, JANUARY 1, 2011
|
|
200,000
|
|
|
$
|
2
|
|
|
38,936,571
|
|
|
$
|
390
|
|
|
$
|
280,102
|
|
|
$
|
(217,026
|
)
|
|
$
|
(6,038
|
)
|
|
—
|
|
|
$
|
—
|
|
|
$
|
57,430
|
|
Net income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,155
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,155
|
|
|||||||
Other comprehensive income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
181
|
|
|
—
|
|
|
—
|
|
|
181
|
|
|||||||
Exercise of common stock options and warrants, net of tendered shares
|
|
—
|
|
|
—
|
|
|
1,266,191
|
|
|
12
|
|
|
27,743
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
27,755
|
|
|||||||
Stock-based employee compensation, net of shares withheld for employee taxes
|
|
—
|
|
|
—
|
|
|
103,112
|
|
|
1
|
|
|
2,105
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,106
|
|
|||||||
Stock-based non-employee compensation
|
|
—
|
|
|
—
|
|
|
174
|
|
|
—
|
|
|
7
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
7
|
|
|||||||
Issuance of common stock to Board of Directors and Scientific Advisory Board
|
|
—
|
|
|
—
|
|
|
46,536
|
|
|
—
|
|
|
1,648
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,648
|
|
|||||||
Issuance of common stock in connection with materials and license agreements
|
|
—
|
|
|
—
|
|
|
181
|
|
|
—
|
|
|
9
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
9
|
|
|||||||
Issuance of common stock to employees under an Employee Stock Purchase Plan (ESPP)
|
|
—
|
|
|
—
|
|
|
10,531
|
|
|
—
|
|
|
307
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
307
|
|
|||||||
Issuance of common stock through a public offering, net of expenses of $14,871
|
|
—
|
|
|
—
|
|
|
5,750,000
|
|
|
58
|
|
|
249,571
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
249,629
|
|
|||||||
BALANCE, DECEMBER 31, 2011
|
|
200,000
|
|
|
2
|
|
|
46,113,296
|
|
|
461
|
|
|
561,492
|
|
|
(213,871
|
)
|
|
(5,857
|
)
|
|
—
|
|
|
—
|
|
|
342,227
|
|
|||||||
Net income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
9,660
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
9,660
|
|
|||||||
Other comprehensive income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
155
|
|
|
—
|
|
|
—
|
|
|
155
|
|
|||||||
Repurchase of common stock
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
205,902
|
|
|
(5,202
|
)
|
|
(5,202
|
)
|
|||||||
Exercise of common stock options and warrants, net of tendered shares
|
|
—
|
|
|
—
|
|
|
222,549
|
|
|
2
|
|
|
853
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
855
|
|
|||||||
Stock-based employee compensation, net of shares withheld for employee taxes
|
|
—
|
|
|
—
|
|
|
170,584
|
|
|
2
|
|
|
1,123
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,125
|
|
|||||||
Issuance of common stock to Board of Directors and Scientific Advisory Board
|
|
—
|
|
|
—
|
|
|
43,341
|
|
|
—
|
|
|
1,094
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,094
|
|
|||||||
Issuance of common stock to employees under an ESPP
|
|
—
|
|
|
—
|
|
|
11,667
|
|
|
—
|
|
|
321
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
321
|
|
|||||||
BALANCE, DECEMBER 31, 2012
|
|
200,000
|
|
|
2
|
|
|
46,561,437
|
|
|
465
|
|
|
564,883
|
|
|
(204,211
|
)
|
|
(5,702
|
)
|
|
205,902
|
|
|
(5,202
|
)
|
|
350,235
|
|
|||||||
Net income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
74,052
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
74,052
|
|
|||||||
Other comprehensive income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,334
|
|
|
—
|
|
|
—
|
|
|
1,334
|
|
|||||||
Repurchase of common stock
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
195,599
|
|
|
(5,456
|
)
|
|
(5,456
|
)
|
|||||||
Exercise of common stock options, net of tendered shares
|
|
—
|
|
|
—
|
|
|
223,714
|
|
|
2
|
|
|
2,556
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,558
|
|
|||||||
Stock-based employee compensation, net of shares withheld for employee taxes
|
|
—
|
|
|
—
|
|
|
(13,502
|
)
|
|
—
|
|
|
3,519
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,519
|
|
|||||||
Issuance of common stock to Board of Directors and Scientific Advisory Board
|
|
—
|
|
|
—
|
|
|
39,153
|
|
|
1
|
|
|
1,100
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,101
|
|
|||||||
Issuance of common stock to employees under an ESPP
|
|
—
|
|
|
—
|
|
|
14,366
|
|
|
—
|
|
|
343
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
343
|
|
|||||||
BALANCE, DECEMBER 31, 2013
|
|
200,000
|
|
|
$
|
2
|
|
|
46,825,168
|
|
|
$
|
468
|
|
|
$
|
572,401
|
|
|
$
|
(130,159
|
)
|
|
$
|
(4,368
|
)
|
|
401,501
|
|
|
$
|
(10,658
|
)
|
|
$
|
427,686
|
|
|
|
Year Ended December 31,
|
||||||||||
|
|
2013
|
|
2012
|
|
2011
|
||||||
CASH FLOWS FROM OPERATING ACTIVITIES:
|
|
|
|
|
|
|
||||||
Net income
|
|
$
|
74,052
|
|
|
$
|
9,660
|
|
|
$
|
3,155
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|
|
||||||
Amortization of deferred revenue
|
|
(5,880
|
)
|
|
(5,284
|
)
|
|
(3,275
|
)
|
|||
Depreciation
|
|
2,044
|
|
|
1,978
|
|
|
1,451
|
|
|||
Amortization of intangibles
|
|
10,973
|
|
|
4,869
|
|
|
49
|
|
|||
Amortization of premium and discount on investments, net
|
|
(458
|
)
|
|
(778
|
)
|
|
(775
|
)
|
|||
Stock-based employee compensation
|
|
6,077
|
|
|
4,263
|
|
|
4,373
|
|
|||
Stock-based non-employee compensation
|
|
—
|
|
|
—
|
|
|
6
|
|
|||
Non-cash expense under materials and license agreements
|
|
—
|
|
|
—
|
|
|
9
|
|
|||
Stock-based compensation to Board of Directors and Scientific Advisory Board
|
|
809
|
|
|
781
|
|
|
1,377
|
|
|||
Loss on stock warrant liability
|
|
—
|
|
|
—
|
|
|
4,190
|
|
|||
Deferred income tax benefit
|
|
(41,418
|
)
|
|
(11
|
)
|
|
—
|
|
|||
Retirement plan benefit expense
|
|
1,665
|
|
|
1,600
|
|
|
1,527
|
|
|||
(Increase) decrease in assets:
|
|
|
|
|
|
|
||||||
Accounts receivable
|
|
(7,000
|
)
|
|
2,070
|
|
|
(3,479
|
)
|
|||
Inventory
|
|
424
|
|
|
(7,175
|
)
|
|
(3,841
|
)
|
|||
Other current assets
|
|
(2,706
|
)
|
|
(2,284
|
)
|
|
341
|
|
|||
Other assets
|
|
35
|
|
|
33
|
|
|
(82
|
)
|
|||
Increase (decrease) in liabilities:
|
|
|
|
|
|
|
||||||
Accounts payable and accrued expenses
|
|
3,614
|
|
|
4,718
|
|
|
6,775
|
|
|||
Other current liabilities
|
|
(11
|
)
|
|
11
|
|
|
23
|
|
|||
Deferred revenue
|
|
2,767
|
|
|
3,303
|
|
|
4,585
|
|
|||
Net cash provided by operating activities
|
|
44,987
|
|
|
17,754
|
|
|
16,409
|
|
|||
CASH FLOWS FROM INVESTING ACTIVITIES:
|
|
|
|
|
|
|
||||||
Purchases of property and equipment
|
|
(4,710
|
)
|
|
(2,737
|
)
|
|
(2,624
|
)
|
|||
Additions to intangibles
|
|
(359
|
)
|
|
(109,102
|
)
|
|
(440
|
)
|
|||
Purchases of investments
|
|
(362,838
|
)
|
|
(304,500
|
)
|
|
(337,442
|
)
|
|||
Proceeds from sale of investments
|
|
313,132
|
|
|
380,253
|
|
|
156,717
|
|
|||
Net cash used in investing activities
|
|
(54,775
|
)
|
|
(36,086
|
)
|
|
(183,789
|
)
|
|||
CASH FLOWS FROM FINANCING ACTIVITIES:
|
|
|
|
|
|
|
||||||
Proceeds from issuance of common stock
|
|
343
|
|
|
321
|
|
|
249,936
|
|
|||
Repurchase of common stock
|
|
(5,456
|
)
|
|
(5,202
|
)
|
|
—
|
|
|||
Proceeds from the exercise of common stock options and warrants
|
|
2,832
|
|
|
1,483
|
|
|
13,343
|
|
|||
Payment of withholding taxes related to stock-based employee compensation
|
|
(3,268
|
)
|
|
(4,142
|
)
|
|
(4,473
|
)
|
|||
Net cash (used in) provided by financing activities
|
|
(5,549
|
)
|
|
(7,540
|
)
|
|
258,806
|
|
|||
(DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS
|
|
(15,337
|
)
|
|
(25,872
|
)
|
|
91,426
|
|
|||
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR
|
|
85,923
|
|
|
111,795
|
|
|
20,369
|
|
|||
CASH AND CASH EQUIVALENTS, END OF YEAR
|
|
$
|
70,586
|
|
|
$
|
85,923
|
|
|
$
|
111,795
|
|
1.
|
BUSINESS:
|
2.
|
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
|
|
|
Amortized
|
|
Unrealized
|
|
Aggregate Fair
|
||||||||||
Investment Classification
|
|
Cost
|
|
Gains
|
|
(Losses)
|
|
Market Value
|
||||||||
December 31, 2013
|
|
|
|
|
|
|
|
|
||||||||
Certificates of deposit
|
|
$
|
11,358
|
|
|
$
|
2
|
|
|
$
|
(16
|
)
|
|
$
|
11,344
|
|
Corporate bonds
|
|
190,738
|
|
|
33
|
|
|
(48
|
)
|
|
190,723
|
|
||||
U.S. Government bonds
|
|
3,074
|
|
|
—
|
|
|
—
|
|
|
3,074
|
|
||||
Convertible notes
|
|
4,300
|
|
|
—
|
|
|
—
|
|
|
4,300
|
|
||||
|
|
$
|
209,470
|
|
|
$
|
35
|
|
|
$
|
(64
|
)
|
|
$
|
209,441
|
|
December 31, 2012
|
|
|
|
|
|
|
|
|
||||||||
Certificates of deposit
|
|
$
|
7,562
|
|
|
$
|
3
|
|
|
$
|
(5
|
)
|
|
$
|
7,560
|
|
Commercial paper
|
|
2,997
|
|
|
—
|
|
|
—
|
|
|
2,997
|
|
||||
Corporate bonds
|
|
141,349
|
|
|
9
|
|
|
(25
|
)
|
|
141,333
|
|
||||
U.S. Government bonds
|
|
3,098
|
|
|
—
|
|
|
—
|
|
|
3,098
|
|
||||
Convertible notes
|
|
4,300
|
|
|
—
|
|
|
—
|
|
|
4,300
|
|
||||
|
|
$
|
159,306
|
|
|
$
|
12
|
|
|
$
|
(30
|
)
|
|
$
|
159,288
|
|
|
|
|
|
Fair Value Measurements, Using
|
||||||||||||
|
|
Total carrying value as of December 31, 2013
|
|
Quoted prices in active markets (Level 1)
|
|
Significant other observable inputs
(Level 2)
|
|
Significant unobservable inputs
(Level 3)
|
||||||||
Cash equivalents
|
|
$
|
7,600
|
|
|
$
|
7,600
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Short-term investments
|
|
202,024
|
|
|
202,024
|
|
|
—
|
|
|
—
|
|
||||
Long-term investments
|
|
7,417
|
|
|
3,117
|
|
|
—
|
|
|
4,300
|
|
|
|
|
|
Fair Value Measurements, Using
|
||||||||||||
|
|
Total carrying value as of December 31, 2012
|
|
Quoted prices in active markets (Level 1)
|
|
Significant other observable inputs
(Level 2)
|
|
Significant unobservable inputs
(Level 3)
|
||||||||
Cash equivalents
|
|
$
|
63,863
|
|
|
$
|
63,863
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Short-term investments
|
|
158,018
|
|
|
154,018
|
|
|
—
|
|
|
4,000
|
|
||||
Long-term investments
|
|
1,270
|
|
|
970
|
|
|
—
|
|
|
300
|
|
•
|
the investee's revenue and earnings trends relative to pre-defined milestones and overall business prospects;
|
•
|
the technological feasibility of the investee's products and technologies;
|
•
|
the general market conditions in the investee's industry or geographic area, including adverse regulatory or economic changes;
|
•
|
factors related to the investee's ability to remain in business, such as the investee's liquidity, debt ratios, and the rate at which the investee is using its cash; and
|
•
|
the investee's receipt of additional funding at a lower valuation.
|
|
|
Year Ended December 31,
|
||||||
|
|
2013
|
|
2012
|
||||
Fair value of notes, beginning of year
|
|
$
|
4,300
|
|
|
$
|
—
|
|
Investments
|
|
—
|
|
|
4,300
|
|
||
Fair value of notes, end of year
|
|
$
|
4,300
|
|
|
$
|
4,300
|
|
|
|
Year Ended December 31, 2011
|
||
Fair value of stock warrant liability, beginning of year
|
|
$
|
10,660
|
|
Loss for period
|
|
4,190
|
|
|
Warrants exercised
|
|
(14,850
|
)
|
|
Fair value of stock warrant liability, end of year
|
|
$
|
—
|
|
|
|
Year Ended December 31,
|
||||||||||
|
|
2013
|
|
2012
|
|
2011
|
||||||
Numerator:
|
|
|
|
|
|
|
||||||
Net income
|
|
$
|
74,052
|
|
|
$
|
9,660
|
|
|
$
|
3,155
|
|
Denominator:
|
|
|
|
|
|
|
||||||
Weighted average common shares outstanding – Basic
|
|
45,898,019
|
|
|
45,951,276
|
|
|
43,737,968
|
|
|||
Effect of dilutive shares:
|
|
|
|
|
|
|
||||||
Common stock equivalents arising from stock options and ESPP
|
|
458,574
|
|
|
648,661
|
|
|
956,803
|
|
|||
Restricted stock awards and units and performance units
|
|
187,012
|
|
|
283,665
|
|
|
445,623
|
|
|||
Weighted average common shares outstanding – Diluted
|
|
46,543,605
|
|
|
46,883,602
|
|
|
45,140,394
|
|
|||
Net income per common share:
|
|
|
|
|
|
|
||||||
Basic
|
|
$
|
1.61
|
|
|
$
|
0.21
|
|
|
$
|
0.07
|
|
Diluted
|
|
$
|
1.59
|
|
|
$
|
0.21
|
|
|
$
|
0.07
|
|
|
|
Year Ended December 31,
|
||||||||||
|
|
2013
|
|
2012
|
|
2011
|
||||||
Development and operations in the Company’s facilities
|
|
$
|
23,491
|
|
|
$
|
21,381
|
|
|
$
|
18,707
|
|
Costs incurred under sponsored research agreements
|
|
2,671
|
|
|
2,058
|
|
|
1,022
|
|
|||
PPG OLED Materials Agreement (Note 7)
|
|
7,470
|
|
|
6,170
|
|
|
3,539
|
|
|||
Scientific Advisory Board compensation
|
|
583
|
|
|
423
|
|
|
861
|
|
|||
|
|
$
|
34,215
|
|
|
$
|
30,032
|
|
|
$
|
24,129
|
|
|
|
Year Ended December 31,
|
||||||||||
|
|
2013
|
|
2012
|
|
2011
|
||||||
Unrealized (loss) gain on available-for-sale securities
|
|
$
|
(10
|
)
|
|
$
|
(31
|
)
|
|
$
|
(1
|
)
|
Common stock issued to Board of Directors and Scientific Advisory Board that was earned in a previous period
|
|
315
|
|
|
328
|
|
|
300
|
|
|||
Common stock issued to employees that was accrued for in a previous period, net of shares withheld for taxes
|
|
282
|
|
|
252
|
|
|
1,113
|
|
|||
Fair value of stock warrant liability reclassified to shareholders’ equity upon exercise
|
|
—
|
|
|
—
|
|
|
14,850
|
|
|||
Property and equipment purchases included in accounts payable
|
|
420
|
|
|
165
|
|
|
—
|
|
3.
|
RESEARCH AND LICENSE AGREEMENTS WITH PRINCETON UNIVERSITY, UNIVERSITY OF SOUTHERN CALIFORNIA AND THE UNIVERSITY OF MICHIGAN:
|
4.
|
PROPERTY AND EQUIPMENT:
|
|
December 31,
|
||||||
|
2013
|
|
2012
|
||||
Land
|
$
|
820
|
|
|
$
|
820
|
|
Building and improvements
|
15,605
|
|
|
11,652
|
|
||
Office and lab equipment
|
20,055
|
|
|
19,056
|
|
||
Furniture and fixtures
|
423
|
|
|
374
|
|
||
Construction-in-progress
|
746
|
|
|
619
|
|
||
|
37,649
|
|
|
32,521
|
|
||
Less: Accumulated depreciation
|
(22,756
|
)
|
|
(20,713
|
)
|
||
Property and equipment, net
|
$
|
14,893
|
|
|
$
|
11,808
|
|
5.
|
ACQUIRED TECHNOLOGY:
|
|
|
December 31,
|
||||||
|
|
2013
|
|
2012
|
||||
PD-LD, Inc.
|
|
$
|
1,481
|
|
|
$
|
1,481
|
|
Motorola
|
|
15,909
|
|
|
15,909
|
|
||
Fujifilm
|
|
109,462
|
|
|
109,102
|
|
||
|
|
126,852
|
|
|
126,492
|
|
||
Less: Accumulated amortization
|
|
(32,841
|
)
|
|
(21,868
|
)
|
||
Acquired technology, net
|
|
$
|
94,011
|
|
|
$
|
104,624
|
|
Year
|
|
Projected Expense
|
||
2014
|
|
$
|
10,999
|
|
2015
|
|
10,999
|
|
|
2016
|
|
10,999
|
|
|
2017
|
|
10,999
|
|
|
2018
|
|
10,979
|
|
|
Thereafter
|
|
39,036
|
|
|
|
|
$
|
94,011
|
|
6.
|
ACCRUED EXPENSES:
|
|
|
December 31,
|
||||||
|
|
2013
|
|
2012
|
||||
Compensation
|
|
$
|
7,977
|
|
|
$
|
5,196
|
|
Royalties
|
|
3,243
|
|
|
2,069
|
|
||
Consulting
|
|
338
|
|
|
337
|
|
||
Professional fees
|
|
458
|
|
|
1,302
|
|
||
Research and development agreements
|
|
2,158
|
|
|
1,130
|
|
||
Inventory
|
|
1,564
|
|
|
—
|
|
||
Other
|
|
301
|
|
|
360
|
|
||
|
|
$
|
16,039
|
|
|
$
|
10,394
|
|
7.
|
EQUITY AND CASH COMPENSATION UNDER THE PPG AGREEMENTS:
|
8.
|
PREFERRED STOCK:
|
9.
|
SHAREHOLDERS’ EQUITY:
|
10.
|
ACCUMULATED OTHER COMPREHENSIVE LOSS:
|
|
|
Unrealized gain (loss) on marketable securities
|
|
Net unrealized loss on retirement plan
(2)
|
|
Total
|
|
Affected line items in the consolidated statement of income
|
||||||
Balance January 1, 2011, net of tax
|
|
$
|
14
|
|
|
$
|
(6,052
|
)
|
|
$
|
(6,038
|
)
|
|
|
Other comprehensive loss before reclassification
|
|
(1
|
)
|
|
(418
|
)
|
|
(419
|
)
|
|
|
|||
Reclassification to net income
(1)
|
|
—
|
|
|
600
|
|
|
600
|
|
|
Selling, general and administrative and research and development
|
|||
Change during period
|
|
(1
|
)
|
|
182
|
|
|
181
|
|
|
|
|||
Balance December 31, 2011, net of tax
|
|
$
|
13
|
|
|
$
|
(5,870
|
)
|
|
$
|
(5,857
|
)
|
|
|
Other comprehensive loss before reclassification
|
|
(31
|
)
|
|
(442
|
)
|
|
(473
|
)
|
|
|
|||
Reclassification to net income
(1)
|
|
—
|
|
|
628
|
|
|
628
|
|
|
Selling, general and administrative and research and development
|
|||
Change during period
|
|
(31
|
)
|
|
186
|
|
|
155
|
|
|
|
|||
Balance December 31, 2012, net of tax
|
|
$
|
(18
|
)
|
|
$
|
(5,684
|
)
|
|
$
|
(5,702
|
)
|
|
|
Other comprehensive (loss) income before reclassification
|
|
(6
|
)
|
|
901
|
|
|
895
|
|
|
|
|||
Reclassification to net income
(1)
|
|
—
|
|
|
439
|
|
|
439
|
|
|
Selling, general and administrative and research and development
|
|||
Change during period
|
|
(6
|
)
|
|
1,340
|
|
|
1,334
|
|
|
|
|||
Balance December 31, 2013, net of tax
|
|
$
|
(24
|
)
|
|
$
|
(4,344
|
)
|
|
$
|
(4,368
|
)
|
|
|
11.
|
STOCK-BASED COMPENSATION:
|
|
|
Options
|
|
Weighted
Average
Exercise
Price
|
|||
Outstanding at January 1, 2013
|
|
828,230
|
|
|
$
|
11.58
|
|
Granted
|
|
—
|
|
|
—
|
|
|
Exercised
|
|
(252,081
|
)
|
|
14.22
|
|
|
Forfeited
|
|
—
|
|
|
—
|
|
|
Cancelled
|
|
(5,666
|
)
|
|
7.39
|
|
|
Outstanding at December 31, 2013
|
|
570,483
|
|
|
10.43
|
|
|
Vested and expected to vest
|
|
570,483
|
|
|
10.43
|
|
|
Exercisable at December 31, 2013
|
|
570,483
|
|
|
$
|
10.43
|
|
|
|
Outstanding and Exercisable
|
||||||||||
|
|
Number of
Options
Outstanding
at December 31,
|
|
Weighted
Average
Remaining
Contractual
|
|
Weighted
Average
Exercise
|
|
Aggregate
Intrinsic
|
||||
Exercise Price
|
|
2013
|
|
Life (Years)
|
|
Price
|
|
Value
(A)
|
||||
$5.91-$9.04
|
|
197,430
|
|
1.0
|
|
$
|
8.15
|
|
|
$
|
5,176
|
|
$9.43-$14.16
|
|
294,936
|
|
2.00
|
|
$
|
10.55
|
|
|
$
|
7,023
|
|
$14.39-$18.34
|
|
78,117
|
|
1.40
|
|
$
|
15.77
|
|
|
$
|
1,452
|
|
Total
|
|
570,483
|
|
1.60
|
|
$
|
10.43
|
|
|
$
|
13,651
|
|
|
|
Number of
Shares
|
|
Weighted-
Average
Grant-Date
Fair Value
|
|||
Unvested, January 1, 2013
|
|
620,971
|
|
|
$
|
24.00
|
|
Granted
|
|
168,182
|
|
|
32.76
|
|
|
Vested
|
|
(261,257
|
)
|
|
23.46
|
|
|
Forfeited
|
|
(1,300
|
)
|
|
27.70
|
|
|
Unvested, December 31, 2013
|
|
526,596
|
|
|
$
|
27.05
|
|
|
|
Number of
Shares
|
|
Weighted-
Average
Grant-Date
Fair Value
|
|||
Unvested, January 1, 2013
|
|
—
|
|
|
$
|
—
|
|
Granted
|
|
35,776
|
|
|
47.78
|
|
|
Vested
|
|
—
|
|
|
—
|
|
|
Cancelled
|
|
—
|
|
|
—
|
|
|
Unvested, December 31, 2013
|
|
35,776
|
|
|
$
|
47.78
|
|
Dividend yield rate
|
|
—
|
|
Expected volatility
|
|
23.4
|
%
|
Risk-free interest rates
|
|
0.02
|
%
|
Expected life
|
|
0.02 years
|
|
12.
|
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN:
|
|
|
Year Ended December 31,
|
||||||
|
|
2013
|
|
2012
|
||||
Change in benefit obligation:
|
|
|
|
|
||||
Benefit obligation, beginning of year
|
|
$
|
9,837
|
|
|
$
|
8,423
|
|
Service cost
|
|
646
|
|
|
601
|
|
||
Interest cost
|
|
343
|
|
|
371
|
|
||
Actuarial (gain) loss
|
|
(1,390
|
)
|
|
442
|
|
||
Benefit obligation, end of year
|
|
9,436
|
|
|
9,837
|
|
||
Fair value of plan assets
|
|
—
|
|
|
—
|
|
||
Unfunded status of the plan, end of year
|
|
$
|
9,436
|
|
|
$
|
9,837
|
|
|
|
|
|
|
||||
Current liability
|
|
—
|
|
|
—
|
|
||
Noncurrent liability
|
|
$
|
9,436
|
|
|
$
|
9,837
|
|
|
|
Year Ended December 31,
|
||||||||||
|
|
2013
|
|
2012
|
|
2011
|
||||||
Service cost
|
|
$
|
646
|
|
|
$
|
601
|
|
|
$
|
542
|
|
Interest cost
|
|
343
|
|
|
371
|
|
|
385
|
|
|||
Amortization of prior service cost
|
|
584
|
|
|
584
|
|
|
584
|
|
|||
Amortization of loss
|
|
92
|
|
|
44
|
|
|
16
|
|
|||
Total net periodic benefit cost
|
|
$
|
1,665
|
|
|
$
|
1,600
|
|
|
$
|
1,527
|
|
|
|
Year Ended December 31,
|
||
|
|
2013
|
|
2012
|
Discount rate
|
|
4.51%
|
|
3.49%
|
Rate of compensation increases
|
|
3.50%
|
|
3.50%
|
|
|
Year Ended December 31,
|
||||
|
|
2013
|
|
2012
|
|
2011
|
Discount rate
|
|
3.49%
|
|
4.44%
|
|
5.44%
|
Rate of compensation increases
|
|
3.50%
|
|
3.50%
|
|
3.50%
|
Amortization of prior service cost
|
|
$
|
584
|
|
Amortization of gain/loss
|
|
—
|
|
|
Total
|
|
$
|
584
|
|
Year
|
|
Projected Benefits
|
||
2014
|
|
$
|
—
|
|
2015
|
|
336
|
|
|
2016
|
|
403
|
|
|
2017
|
|
816
|
|
|
2018
|
|
853
|
|
|
2019-2023
|
|
5,256
|
|
|
Thereafter
|
|
14,438
|
|
13.
|
COMMITMENTS AND CONTINGENCIES:
|
14.
|
CONCENTRATION OF RISK:
|
|
|
2013
|
|
2012
|
|
2011
|
||||||||||||
Customer
|
|
% of Total Revenue
|
|
Accounts Receivable
|
|
% of Total Revenue
|
|
Accounts Receivable
|
|
% of Total Revenue
|
|
Accounts Receivable
|
||||||
A
|
|
60%
|
|
$
|
7,337
|
|
|
68%
|
|
$
|
6,257
|
|
|
51%
|
|
$
|
5,208
|
|
B
|
|
22%
|
|
2,905
|
|
|
5%
|
|
867
|
|
|
11%
|
|
845
|
|
|||
C
|
|
9%
|
|
4,743
|
|
|
6%
|
|
—
|
|
|
18%
|
|
63
|
|
Country
|
|
2013
|
|
2012
|
|
2011
|
||||||
United States
|
|
$
|
1,552
|
|
|
$
|
3,893
|
|
|
$
|
6,842
|
|
South Korea
|
|
102,948
|
|
|
61,960
|
|
|
38,582
|
|
|||
Japan
|
|
40,539
|
|
|
13,666
|
|
|
15,005
|
|
|||
Taiwan
|
|
904
|
|
|
3,074
|
|
|
643
|
|
|||
Other
|
|
696
|
|
|
651
|
|
|
217
|
|
|||
All foreign locations
|
|
145,087
|
|
|
79,351
|
|
|
54,447
|
|
|||
Total revenue
|
|
$
|
146,639
|
|
|
$
|
83,244
|
|
|
$
|
61,289
|
|
|
|
2013
|
|
2012
|
||||
United States
|
|
$
|
14,660
|
|
|
$
|
11,512
|
|
Other
|
|
233
|
|
|
296
|
|
||
Total long-lived assets
|
|
$
|
14,893
|
|
|
$
|
11,808
|
|
15.
|
INCOME TAXES:
|
|
|
Year ended December 31,
|
||||||||||
|
|
2013
|
|
2012
|
|
2011
|
||||||
United States
|
|
$
|
57,258
|
|
|
$
|
20,069
|
|
|
$
|
3,729
|
|
Foreign
|
|
(18,250
|
)
|
|
(5,201
|
)
|
|
(1,288
|
)
|
|||
Income before income tax
|
|
$
|
39,008
|
|
|
$
|
14,868
|
|
|
$
|
2,441
|
|
|
|
Year ended December 31,
|
||||||||||
|
|
2013
|
|
2012
|
|
2011
|
||||||
Current income tax benefit (expense):
|
|
|
|
|
|
|
||||||
Federal
|
|
$
|
226
|
|
|
$
|
(225
|
)
|
|
$
|
—
|
|
State
|
|
—
|
|
|
—
|
|
|
2,660
|
|
|||
Foreign
|
|
(6,600
|
)
|
|
(4,994
|
)
|
|
(1,946
|
)
|
|||
|
|
(6,374
|
)
|
|
(5,219
|
)
|
|
714
|
|
|||
Deferred income tax (expense) benefit:
|
|
|
|
|
|
|
||||||
Federal
|
|
(16,811
|
)
|
|
—
|
|
|
—
|
|
|||
State
|
|
(1,192
|
)
|
|
—
|
|
|
—
|
|
|||
Foreign
|
|
69
|
|
|
11
|
|
|
—
|
|
|||
|
|
(17,934
|
)
|
|
11
|
|
|
—
|
|
|||
Adjustments to the beginning-of-year valuation allowance
|
|
59,352
|
|
|
—
|
|
|
—
|
|
|||
Income tax benefit (expense)
|
|
$
|
35,044
|
|
|
$
|
(5,208
|
)
|
|
$
|
714
|
|
|
|
Year ended December 31,
|
|||||||
|
|
2013
|
|
2012
|
|
2011
|
|||
Statutory U.S. federal income tax rate
|
|
35.0
|
%
|
|
34.0
|
%
|
|
34.0
|
%
|
State income taxes, net of federal benefit
|
|
(1.3
|
)%
|
|
(2.3
|
)%
|
|
8.1
|
%
|
State apportionment change
|
|
0.3
|
%
|
|
23.8
|
%
|
|
—
|
%
|
U.S. federal rate change
|
|
(3.6
|
)%
|
|
—
|
%
|
|
—
|
%
|
Effect of foreign operations
|
|
10.9
|
%
|
|
7.1
|
%
|
|
17.9
|
%
|
Subpart F income
|
|
15.6
|
%
|
|
—
|
%
|
|
—
|
%
|
Nondeductible employee compensation
|
|
2.3
|
%
|
|
4.2
|
%
|
|
6.9
|
%
|
Loss on stock warrant liability
|
|
—
|
%
|
|
—
|
%
|
|
58.4
|
%
|
Research tax credits
|
|
(3.4
|
)%
|
|
—
|
%
|
|
(34.7
|
)%
|
Change in valuation allowance
|
|
(146.4
|
)%
|
|
(29.3
|
)%
|
|
(182.2
|
)%
|
Sale of New Jersey tax attributes
|
|
—
|
%
|
|
—
|
%
|
|
50.8
|
%
|
Other
|
|
0.8
|
%
|
|
(2.5
|
)%
|
|
11.5
|
%
|
Effective tax rate
|
|
(89.8
|
)%
|
|
35.0
|
%
|
|
(29.3
|
)%
|
|
|
Related Tax Deduction
|
|
Tax Benefit
|
|
Expiration Date
|
||||
Loss carry forwards:
|
|
|
|
|
|
|
||||
Federal net operating loss
(1)
|
|
$
|
79,150
|
|
|
$
|
27,702
|
|
|
2026 to 2033
|
Foreign net operating loss
|
|
20,595
|
|
|
2,598
|
|
|
n/a
|
||
Total loss carry forwards
|
|
$
|
99,745
|
|
|
$
|
30,300
|
|
|
|
Tax credit carry forwards:
|
|
|
|
|
|
|
||||
Research tax credits
|
|
n/a
|
|
$
|
10,360
|
|
|
2020 to 2033
|
||
Foreign tax credits
|
|
n/a
|
|
13,830
|
|
|
2020 to 2023
|
|||
State research tax credits
|
|
n/a
|
|
2,775
|
|
|
2020 to 2028
|
|||
Total credit carry forwards
|
|
n/a
|
|
$
|
26,965
|
|
|
|
|
|
December 31,
|
||||||
|
|
2013
|
|
2012
|
||||
Deferred tax asset:
|
|
|
|
|
||||
Net operating loss carry forwards
|
|
$
|
6,280
|
|
|
$
|
36,866
|
|
Capitalized technology license
|
|
2,519
|
|
|
2,525
|
|
||
Capitalized research expenditures
|
|
14,012
|
|
|
2,009
|
|
||
Accruals and reserves
|
|
2,172
|
|
|
1,270
|
|
||
Retirement plan
|
|
3,315
|
|
|
3,432
|
|
||
Deferred revenue
|
|
1,393
|
|
|
2,591
|
|
||
Tax credit carry forwards
|
|
26,965
|
|
|
18,612
|
|
||
Stock-based compensation
|
|
1,389
|
|
|
1,326
|
|
||
Other
|
|
1,329
|
|
|
1,091
|
|
||
|
|
59,374
|
|
|
69,722
|
|
||
Valuation allowance
|
|
(12,598
|
)
|
|
(69,711
|
)
|
||
Deferred tax assets
|
|
46,776
|
|
|
11
|
|
||
|
|
|
|
|
||||
Deferred tax liability:
|
|
|
|
|
||||
Subpart F income
|
|
(6,070
|
)
|
|
—
|
|
||
Deferred tax liabilities
|
|
(6,070
|
)
|
|
—
|
|
||
|
|
|
|
|
||||
Net deferred tax assets
|
|
$
|
40,706
|
|
|
$
|
11
|
|
16.
|
DEFINED CONTRIBUTION PLAN:
|
17.
|
QUARTERLY SUPPLEMENTAL FINANCIAL DATA (UNAUDITED):
|
|
|
Three Months Ended
|
|
|
||||||||||||||||
|
|
March 31, 2013
|
|
June 30, 2013
(1)
|
|
September 30, 2013
|
|
December 31, 2013
(1)
|
|
Total
|
||||||||||
Revenue
|
|
$
|
14,976
|
|
|
$
|
49,359
|
|
|
$
|
32,826
|
|
|
$
|
49,478
|
|
(2)
|
$
|
146,639
|
|
Net (loss) income
|
|
$
|
(4,758
|
)
|
|
$
|
15,382
|
|
|
$
|
5,542
|
|
|
$
|
57,886
|
|
(3)
|
$
|
74,052
|
|
Net (loss) income per common share:
|
|
|
|
|
|
|
|
|
||||||||||||
Basic
|
|
$
|
(0.10
|
)
|
|
$
|
0.34
|
|
|
$
|
0.12
|
|
|
$
|
1.26
|
|
|
$
|
1.61
|
|
Diluted
|
|
$
|
(0.10
|
)
|
|
$
|
0.33
|
|
|
$
|
0.12
|
|
|
$
|
1.24
|
|
|
$
|
1.59
|
|
|
|
Three Months Ended
|
|
|
||||||||||||||||
|
|
March 31, 2012
|
|
June 30, 2012
(1)
|
|
September 30, 2012
|
|
December 31, 2012
(1)
|
|
Total
|
||||||||||
Revenue
|
|
$
|
12,620
|
|
|
$
|
29,987
|
|
|
$
|
12,504
|
|
|
$
|
28,133
|
|
(2)
|
$
|
83,244
|
|
Net (loss) income
|
|
$
|
(1,221
|
)
|
|
$
|
10,964
|
|
|
$
|
(5,468
|
)
|
|
$
|
5,385
|
|
(3)
|
$
|
9,660
|
|
Net (loss) income per common share:
|
|
|
|
|
|
|
|
|
||||||||||||
Basic
|
|
$
|
(0.03
|
)
|
|
$
|
0.24
|
|
|
$
|
(0.12
|
)
|
|
$
|
0.12
|
|
|
$
|
0.21
|
|
Diluted
|
|
$
|
(0.03
|
)
|
|
$
|
0.23
|
|
|
$
|
(0.12
|
)
|
|
$
|
0.12
|
|
|
$
|
0.21
|
|
1.
|
Grant of Restricted Stock Units.
|
2.
|
Vesting.
|
Vesting Date
|
Vested Restricted Stock Units
|
2nd Anniversary of the Grant Date
|
100% of the awarded Restricted Stock Units
|
4.
|
Payment of Restricted Stock Units.
|
6.
|
No Stockholder Rights.
|
7.
|
Retention Rights
.
|
8.
|
Restrictive Covenants.
|
9.
|
Amendment.
|
10.
|
Notice.
|
11.
|
Incorporation of Plan by Reference.
|
12.
|
Income Taxes; Withholding Taxes.
|
13.
|
Governing Law.
|
14.
|
Assignment.
|
15.
|
Section 409A.
|
16.
|
Company Policies.
|
1.
|
Grant of Performance Units.
|
2.
|
Vesting.
|
4.
|
Payment of Performance Units.
|
6.
|
No Stockholder Rights.
|
7.
|
Retention Rights.
|
8.
|
Restrictive Covenants.
|
9.
|
Amendment.
|
10.
|
Notice.
|
11.
|
Incorporation of Plan by Reference.
|
12.
|
Income Taxes; Withholding Taxes.
|
13.
|
Governing Law.
|
14.
|
Assignment.
|
15.
|
Section 409A.
|
16.
|
Company Policies.
|
1.
|
Performance Goals
.
The Performance Units shall vest based on continual employment (as described in the Grant Letter) and based on the Company’s achievement of two Performance Goals as follows:
|
2.
|
Calculation of TSR
.
|
4.
|
Performance Units Based on Comparative Revenue Growth to the Peer Group
.
Performance for 50% of the Target Award of Performance Units (the “
Revenue Portion
”) shall be earned based on the Company’s cumulative revenue growth over the Performance Period as compared to the cumulative revenue growth of the companies that are in the Peer Group on the last day of the Performance Period. The Revenue Portion shall vest according to the following schedule:
|
5.
|
General Vesting Terms
.
Notwithstanding the foregoing, if the Company’s TSR is negative for the Performance Period, the Performance Units may not vest above the Target Award. No vesting shall occur unless and until the Committee certifies that the Performance Goals have been achieved. Any fractional Performance Unit resulting from the vesting of the Performance Units shall be rounded down to the nearest whole number. Any portion of the Performance Units that does not vest as of the end of the Performance Period shall be forfeited as of the end of the Performance Period. In no event shall the maximum number of Performance Units that may be payable pursuant to this Grant Letter exceed 200% of the Target Award.
|
Date:
|
February 28, 2014
|
By:
|
/s/ Steven V. Abramson
|
|
|
|
Steven V. Abramson
|
|
|
|
President and Chief Executive Officer
|
Date:
|
February 28, 2014
|
By:
|
/s/ Sidney D. Rosenblatt
|
|
|
|
Sidney D. Rosenblatt
|
|
|
|
Executive Vice President and Chief Financial Officer
|
Date:
|
February 28, 2014
|
By:
|
/s/ Steven V. Abramson
|
|
|
|
Steven V. Abramson
|
|
|
|
President and Chief Executive Officer
|
Date:
|
February 28, 2014
|
By:
|
/s/ Sidney D. Rosenblatt
|
|
|
|
Sidney D. Rosenblatt
|
|
|
|
Executive Vice President and Chief Financial Officer
|