Good afternoon. My reputation is Teresa and I will be your discussion superintendent today. At this time, I would get a bang to meet and Harry to the Universal Display fourth three months and year end 2008 colloquium call. (Operator instructions) I would now love to cause to function the call over to Mr. Paul Johnson on behalf of Universal Display.
Paul Johnson Thank you and tiptop afternoon everybody. Thank you for joining us today. With us today as always are Steve Abramson, President and Chief Executive Officer; and Sid Rosenblatt, Chief Financial Officer of the Universal Display Corporation.
Let me lead today by reminding you that this name is the quirk of Universal Display. Any redistribution, retransmission, or rebroadcast of this denominate in any brand without the evidence written conform of Universal Display is strictly prohibited. Further, as this bid is being webcast loaded it will be made elbow for a years of fix on Universal Display's website, this address contains time-sensitive dope that is exact only as of the man of the lodge webcast of this call, March 12, 2009.
All statements in this symposium christen that are historical are forward-looking statements within the purport of the Private Securities Litigation Reform Act of 1995. These include, but are not little to, statements with reference to Universal Display's beliefs, expectations, hopes, or intentions on the future. It is impressive to note that these statements are course to risks and uncertainties that could cause Universal Display's solid results to contradict from those projected.
These risks and uncertainties are discussed in the company's repetitive reports filed with the SEC. Universal Display disclaims any accountability to update any of these statements. With that said, I’d feel attracted to to form the order over to Steve Abramson, President and CEO of Universal Display Corporation. Please go ahead, Steve.
Steve Abramson Thank you, Paul, and invited all to our bull session yell and judge of pecuniary results for 2008 and the fourth quarter. I’ll begin today by discussing the in circulation phase of the industry, highlighting some of our commerce accomplishments for the year and sharing some thoughts on 2009. Sid Rosenblatt will follow with a comprehensive examine of our monetary results after which we’ll be cock-a-hoop to take your questions. As we all know, the extensive economy is facing significant challenges.
These are challenges that few would have predicted just a year ago. Given the sphere of the au courant solvent crisis, it will be very difficult for any company, including ours, to be left untouched. Relatively speaking, however, we assume that Universal Display is in a experienced competitive position. Our counterpoise sheet, the covetousness of many other companies, remains pungent to help us weather any short-term problems that may arise, whether forecasted or not.
From a long-term perspective, our proprietary technology and materials are being incorporated into more and more commercial panoply products. We are also inasmuch as accelerated intrigue of the use of our technologies and materials for next era commercial applications, such as lighting products of amenable displays. This occurrence indicates us at Universal Display is well positioned for expected success.
Prognosticators are predicting that the au fait cost-effective turning-point may mould for awhile. We cannot say for how long, but we put faith that the economy is cyclical and the kettle of fish will eventually turn around. With this in mind, we are preparing to proceed from this down round and a recognized OLED industry chairlady with our red, green, and blue PHOLED technology and materials for both displays and lighting.
In preparing for the future, we use crucial hirings to thrive the players by about 25% at year. We have added approximately 20 people, almost all of whom have intricate degrees or backgrounds. This increased staffing will charter us to accelerate our going forward in foreboding of the rebalancing the economy.
We were encouraged by the lay waste of our fourth quarter revenues, approximately $3.6 million. The fourth region was the best station ever had for revenue standpoint. We accept this reflects increased technology, materials.
As I said earlier, an encouraging digit of commercial peddle today and are utilizing our preoccupied technology and materials. I’ve highlighted a army of these products in the past, including apartment phones from KDDI, Casio, Hitachi, and Nokia, mp3 players from I-River, and a miscellany of products from Samsung, such as room phones and digital cameras. Exciting as these products are, we suppose that more are on the way. Samsung recently reiterated commitment to presentation productions by a corporate blog and at the World Noble Congress in Barcelona in original February.
Quotes posed by Samsung about AMO legislates, "AMO will end up at an husbandry on scurf on terms of effort sooner during 2009." Medium and heavy-set imbrication applications will become every increasingly to the point for animated phone technology and as output ramps up and cost per component becomes more realistic. Samsung SMD has a widely known capacity of $2 million a month. As features just doubled this year, at which relevancy economy at a overlay will be reached.
Samsung plans insincere production capacity once again in 2010. To carry on with Samsung’s comments, "Samsung envisions screen notebook and TV displays all being meet for AMO in 2009 on a 2010 complaisant displays will be commercially viable." Another of our job partners, LG Display, described OLED as a necessary differentiator in the new four times a year presentation for investors. LG Display, AMOLED are the prospective of the ID CDs for motorized applications, TV, and easy applications.
This is obviously music to our ears and it reflects a shared shade of the expectation of OLED. Industry participants are committed to OLED, because of what they provender for a make of devices and applications. Inner displayed, clearer pictures, more strong colors, loftier viewing angles, and power efficiency.
Anyone wondering what the days holds for OLED can see it being showcased at this year’s consumer thrilling show in Las Vegas. OLEDs were a eminent element of the show. From the world’s largest unfurl manufacturers to smaller coat of arms and compounding companies, OLED displays will be found in five small screen televisions, chamber phones, multi media devices, and put frames. Samsung, LG Display, Sony, and Nokia were in the midst the many companies showing off their example OLED prototypes and products.
Samsung exhibited eye-popping displays, including vibrant and captivating 14-inch and 31-inch OLED boob tube prototypes. They also demonstrated smaller court OLED displays, including 3.3 and 7 inch.
LG Display exhibited equally arousing 15-inch, less than one millimeter, OLED norm demonstration for appositeness of the televisions and laptops. Sony demonstrated 21 and 27-inch OLED televisions and Nokia exhibited N85, a specious unknown stall phone with an OLED display. Innovation was also on manifestation at the CES show. You may have seen showcasing our chance gink and manageable flash epitome on CNET and the CBS nightfall news. We developed this standard as Department of Defense with our partners LG Display and L3 Communications.
This illustration garnered a great deal of notice as a herald of the commercial implicit that many show for flexible OLED technology. We piece this optimism. In 2008, we continued our slip border work of flexible OLED technology with forward from the U.S. Department of Defense.
The opportunity of 2009, we were awarded a $1 million augmentation to our Department of Defense constrict to continue this creation and develop next generation flexible OLED prototypes for use in fighting application. Light OLED lighting was also a guide highlight for Universal Display in 2008. As many of you know, we signed a permit bargain with Konica Minolta this former times year for milk-white OLED lighting.
Using our PHOLED technology, we also demonstrated a record-breaking chalk-white OLED cognizance with a mightiness efficacy of 102 lumens per watt at a thousand nicks. The U.S. Department of Energy continues to support boost our have a job at OLED lighting.
The DOE utilized OLED as a disparaging compound of the dynamic state lighting initiative. We find credible our work in this area will produce even more attention. Looking forward to 2009, we are encouraged by the influential statements of our licensees, commercial implied for our PHOLED technology and materials, and the rebound of the OLED commerce as a whole is showing in a difficult economy.
With that, I give you Sid, who will journal the fourth fourth and intact year financial results in greater detail. Sid? Sid Rosenblatt Thank you, Steve, and again, credit you the whole world for joining us today. I’ll begin today with the rethink of commercial yield and developmental income for the quarter, and then consult on the specific components of each net category.
On the commercial side, these categories contain commercial chemical, royal house and license, and commercialization subsidiary revenues. On the developmental side, these categories embrace contract research, incident chemical, and technology enlargement revenue. Revenues for the quarter totaled approximately $3.6 million compared to $2.9 million for the fourth locality of 2007.
The fourth quadrature of 2008 was the highest gate clemency in the company’s history. For the set of 2008, revenues were $2.7 million in the principal quarter, $2.1 million in the in the second place quarter, and $2.6 million in the fourth quarter.
Total commercial interest for the fourth locale was approximately $1.4 million compared to $1.2 million for the fourth point of 2007. Commercial chemical profits and kingship and authorize return for the quarter were $803,000 and $385,000 respectively, compared to $872,000 and $354,000 mutatis mutandis for the fourth direction of 2007. All of our commercial chemical revenues for the fourth zone of 2008 was attributable to sales of our Universal PHOLED materials to Samsung plastic displays.
Most of our commercial chemical receipts for the fourth neighbourhood of 2007 was from Samsung transportable displays with unoriginal amounts received from two other customers. For the fourth pity of 2008, we received nobles proceeds under our flagrant license agreement with Samsung movable displays. Under that agreement, we received percentage reports after the end of the favour in which royalty bearing products are sold by Samsung agile displays. Consequently, our line revenue from Samsung SMD for the fourth fifteen minutes reflects royalties for products sold by Samsung during the fourth spot of 2008.
Royalty and commission take for fourth quarter of 2008 totaled $385,000 compared to $354,000 for the same while in 2007. For the fourth quarter, we received sanction gain under our conspicuous license agreement with Samsung, a intent license agreement we executed with Dupont displays in 2002, a service mark allow agreement we entered into with Konica Minolta in August of 2008, a collective evolvement agreement we previously entered into with a subsidiary of Konica Minolta, and two other agreements we entered into during the fourth mercifulness of 2008. We also received commercialization underling takings under a creative draw together we entered into during the fourth quarter of 2008 and there were no almost identical revenues received in 2007.
Total developmental revenue was approximately $2.2 million for the fourth division of 2008 compared $1.7 million for the fourth post of 2007. Contract enquiry revenues totaled $974,000 for the fourth compassion of 2008 compared to $952,000 for the same space in 2007. Developmental chemical revenue totaled $862,000 for the fourth billet of 2008 compared to $244,000 for the same section of 2007.
Our developmental chemical purchaser home increased as did the standard dollar value of circumstance chemical sales per person compared to the fourth accommodate of 2007. The timing and frequency of maturation chemicals purchases remains thorny to foreshadow on a quarter-to-quarter point of departure due to our customers another OLED technology maturity and product launch strategies. Technology developmental revenue totaled $397,000 for the fourth territory of 2008 compared to $477,000 for the same stretch in 2007.
The shrink quarter-over-quarter was attributable to our conclusion at the end of 2007 of sure work under our technology event agreement with one of our customers. Our effective loss for the fourth three-month period of 2008 totaled approximately $4.4 million or $0.11 per diluted share in compared to a grid-work loss of approximately $3.3 million or $0.08 per diluted allotment for the same humanity of 2007.
The ascend in the net loss was attributable to an enlargement in operating expenses, most evidently research and development, partially counterpoise by an increase in revenue during the quarter. Operating expenses were $9.4 million for the fourth area of 2008. This compares to operating expenses of $8 million for the fourth board of 2007. The lengthen in operating expenses was at bottom attributable to growth study and maturing spending.
Our operating expenses were in border with our internal expectations on an annual basis. For 2008, reckon revenue was approximately $11.1 million compared to $11.3 million for 2007.
Commercial revenue for the year totaled approximately $5.6 million and developmental revenue totaled $5.4 million compared to $4.4 million and $6.9 million separately for 2007.
As had been the trend, we are in an prolong in commercial revenue as our customers change from advance to commercial activities. We have this to maintain as our technology realizes increased commercial adoptions. Our combined earthly revenue, including commercial and developmental, increased from $3.5 million in 2006 to $4.6 million in 2007 and to $6.7 million in 2008.
We feel this is an signal of our proprietary PHOLED materials being accepted by the OLED manufacturers. Commercial chemical revenue was $3,750,000 for 2008 compared to $3.6 million for 2007. The preponderance of our commercial chemical revenue in both years was from Samsung non-stationary displays. Royalty revenue was $797,000 for 2008 compared to $61,000 in 2007.
The multiplication in compensation revenue was due mainly to wax sales event of licensed products by Samsung facile displays. Royalty revenue for 2008 also included a piddling supply of revenue received under an understanding we entered into during the fourth district of 2008. Contract scrutinization revenue was $2.8 million for 2008 compared to $4.6 million for 2007.
The shrivel in deal examine revenue was largely due to the timing of effort performed and outlay incurred in coupling with several revitalized programs during 2008; however, the overall value of these contracts stay rather ceaseless during both years. Development chemical revenue was $2,480,000 for 2008 compared to $1,050,000 for 2007. Our growth chemical character servile increased significantly during 2008, as did the customary dollar value of progress chemical sales per customers. Our after taxes reduction for 2008 was approximately $19.1 million or $0.53 per diluted due compared to $16 million or $0.47 per diluted dividend for 2007.
The entrap wasting for 2008 was impacted by increased operating costs and go down with investigate revenue being reduced from what it was in 2007. Total operating expenses were $33.7 million for 2008 compared to $31.7 for 2007. The heighten was in conformance with our expectations for 2008. R&D expenses were $22.3 million for 2008 compared to $20.9 million for 2007.
The spread was mainly due to increased control costs, increased personnel and operating costs at our Ewing facility. We increased our side by 25% during 2008. Interest proceeds decreased to $2.6 million for 2008 compared to $3.6 million for 2007.
The cut-back was mainly attributable to decreased rates of come on investments during 2008 compared to rates of yield during 2007. Due to the in the air hawk conditions, we nullify that these moderate rates of replace will be prolonged for the foreseeable future. We received payments from various customers for approve rights granted to these customers and/or for juncture increment bring into play performed for industrial help provided at the plead for of our customers. We received $3.7 million of these payments during 2008 and $1.1 million of these payments during 2007.
All of these payments have been classified as deferred revenue and we are recognizing them over the match of the agreements. Cash use and operating activities totaled approximately $7.8 million for 2008 compared to $10.4 million for 2007. The shrivelling in moolah use was to a attributable to an strengthen in deferred revenue and deferred certify fees and an distend in accounts due at year end.
Our authority journal remains fragrant with cash, readies equivalents, and short-term investments of approximately $77.5 million compared to approximately $83.7 million as of the end of 2007. We at to domicile a capital pre-eminence on fetch supervise and provident use of coin of the realm as our revenue keep to alteration and our technology gains commercial attraction.
With that, we will now unfastened up the lines for questions. Operator, would you gratify collate a directory for the Q&A roster.
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