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Cambridge Display Technology reports mixed results for Q1 2006

12 May 2006

The latest quarter of trading figures show a dip for OLED developer Cambridge Display Technology. But the company isn't worried, citing variations in demand for its licensed technology. And in any case, OLEDs are set to find more and larger scale applications, CDT says.

Polymer LED developer Cambridge Display Technology, Inc. has reported its financial results for Q1 2006. Revenues in the quarter were $1.0 million, compared with $1.6 million in Q1 2005. Gross profit for the latest quarter was $0.7 million ($1.1 million in Q1 2005). However, the net loss for Q1 2006 was $7.6 million, compared with $8.7 million in 2005.

The majority of revenues came from technology services and development, but included sales under equipment and supplies as the company increased sales of inks for use in the evaluation of the technology by display producers.

"The nature of CDT's business means that revenues will continue to vary from quarter to quarter as licensing and other contract negotiations are concluded and revenues become recognizable," the company said. CDT is carrying $1.8 million in deferred revenues which it said it expects to realize during the remainder of 2006.

"Revenues are varying because of the nature of our business. CDT is predominantly a licensing company. Typically, large pieces of business that come in irregularly so one can expect revenue variations," Terry Nicklin CDT's marketing director told optics.org. He believes there are increasing market opportunities for OLEDs.

"Considering NanoMarkets' forecast on the opportunities for OLEDs, we don't disagree with their positive assessment. The limitations on these displays so far have been that they are generally restricted to small monochrome designs at the moment. But we expect that there will be larger format displays based on CDT's technology - certainly by 2011."

The two main limiting problems in making OLEDs widely available have been their operational lifetime and a suitable technology to prepare relatively large areas of OLED materials. But CDT says it is solving the first of these by developing longer-lasting devices and the second problem is being solved by techniques such as inkjet printing.

The company's research and development expenses of $3.1 million during Q1 2006 were 22% lower than the $4.0 million reported in Q1 2005, primarily due to reimbursement of a significant proportion of the costs by CDT's 50%-owned joint venture Sumation. Selling, general and administrative expenses were $4.0 million, approximately the same as in 2005.

Cash used in operations was reduced to $4.0 million, compared with $5.9 million last year. During the quarter, the company invested $1.6 million in Sumation, and invested $0.1 million in fixed assets. The company's cash, cash equivalents and current marketable securities totaled $25.6 million at the end of Q1 2006, compared with $31.3 million at the end of Q4 2005.

During the latest quarter, CDT terminated a line of credit for a maximum of $15 million, and in April 2006 received a refund of $0.6 million of fees from IPI Financial Services.

"In this quarter we have made significant developments in materials performance," said David Fyfe, CDT's CEO, "including a deeper green emitter with CIE co-ordinates (0.36, 0.60) that offers an increased lifetime of 50,000 hours from an initial brightness of 400 cd/m2. We have also developed a blue fluorescent material giving 12,500 hours life from 400 cd/m2 and a red phosphorescent material giving 50,000 hours life, also from 400 cd/m2. These encouraging results were achieved after our first full quarter of Sumation joint venture operations.

"We were also pleased to see the announcement by Seiko Epson on their work in developing an OLED print head based on our [CDT's] polymer technology. This was achieved in collaboration with Sumitomo Chemical, our joint venture partner and licensee."

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