Darice Liu – Director-Investor Relations Steve Abramson – President and Chief Executive Officer Sid Rosenblatt – Executive Vice President and Chief Financial Officer.

Brian Lee – Goldman Sachs Jim Ricchiuti – Needham & Company Alex Guana – JMP Securities Osten Bernardez – Cross Research Hendi Susanto – Gabelli & Company Rob Stone – Cowen and Company Andrew Abraham – Supply Chain Management Research Hendi Susanto – Gabelli & Company.

Good day ladies and gentlemen, and welcome to Universal Display’s First Quarter 2015 Earnings Conference Call. My name is Joe, and I will be your conference moderator for today’s call. As a reminder, today’s conference is being recorded for replay purposes. I would now like to turn the call over to Darice Liu, Director of Investor Relations.

Please proceed..

Thank you, Joe, and good afternoon everyone. Welcome to Universal Display’s first quarter earnings conference call. Joining me on the call today are Steve Abramson, President and Chief Executive Officer; and Sid Rosenblatt, Executive Vice President and Chief Financial Officer.

Before Steve begins, let me remind you that today’s call is the property of Universal Display. Any redistribution, retransmission or rebroadcast of any portion of this call in any form without the expressed written consent of Universal Display is strictly prohibited.

Further, the call is being webcast live and will be made available for a period of time on Universal Display’s website. This call contains time sensitive information that is accurate only as of the date of the live webcast of this call, May 7, 2015.

All statements in this conference call that are not historical are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, such as those relating to Universal Display Corporation’s technologies and potential applications of those technologies, the company’s expected results, as well as growth of the OLED market, and the company’s opportunities in that market.

These include, but are not limited to, statements regarding Universal Display’s beliefs, expectations, hopes or intentions regarding the future. It is important to note that these statements are subject to risks and uncertainties that could cause Universal Display’s actual results to differ from those projected.

These risks and uncertainties are discussed in the company’s periodic reports filed with the SEC, and should be referenced by anyone considering making any investments in the company’s securities. Universal Display disclaims any obligation to update any of these statements. Now, I would like to turn the call over to Steve Abramson..

Sumitomo Chemical, OLEDWorks and LG Display. Our first quarter 2015 results were consistent with our expectations; we reported revenues of $31.2 million operating profit of $1.8 million and net income of $1.3 million or $0.03 per share.

In addition during the first quarter, we generated $47 million of operating cash flow, mainly stemming from the receipt of upfront license fees, prepaid royalties and milestone payments. As we noted in last quarter’s conference call 2015 is expected to be a transitional year. OLED momentum in the display and light landscape is clearly building.

The question is amount of timing. Our top customers are making long-term OLED investment commitments, the adaption of OLED technology by current and new OEM’s is increasing and the OLED roadmap is expanding with new OLED wearables, smartphones, tablets and TVs.

Just last month Samsung Electronics launched its new flagship OLED Mobile phones, the Galaxy S6 and S6 Edge to reviews. I have the S6 Edge and I can tell you that the design, the display and the resolution are pretty awesome.

Back to Samsung’s OLED business, during last week’s first quarter earnings call Samsung guided for OLED shipments to increase in 2015 due to new product launches and expanding its merchant customer base. Samsung also noted its focus on flexible OLED products as a mid to long-term growth engine while continuing developmental work in OLED TVs.

From a capacity standpoint, Samsung reaffirmed is ramping A3, its third OLED fab. And just earlier this year, Samsung announced it would invest 4 trillion won or $3.6 billion from 2015 to 2017 in OLED production. There’s also been a lot of buzz of LG display.

It’s beautiful 4K OLED TV series unveiled the January CES are starting to become available for purchases. During first quarter earnings call, LG reaffirmed its OLED TV shipment target of 600,000 units for this year and 1.5 million units for 2016.

From a capacity standpoint LG currently has 14,000 plates per month of Gen-8 capacity for OLED TVs and 14,000 plates per month of Gen-4.5 capacity reflects for OLED panels.

Just to give you some perspective, while the installed capacity start is – production lines, the Gen-8 sized substrate is roughly 8 times of square meters of area compared to the Gen-4.5 substrate. During that call LG also reiterated plans at approximately 20,000 plates per month Gen-8 OLED capacity by the end of this year.

Outside of Korea our display activity in Taiwan, China and Japan is progressing nicely. In Taiwan AU Optronics announced it was extending its OS [ph] production beyond smartphones and to wearable device market.

It began shipping 1.63 inch OLED panels in the second half of 2014 and earlier this year they launched 1.4 inch full-circle AMOLED panel has been qualified by Chinese customers. Shipments are expected to begin in the second quarter.

In China the OLED technology has reportedly start order maximum offshore equipment where Gen-5.5 LTPS OLED patent orders. And in Japan, last month’s Finetech conference JOLED gave its first presentation since its inception.

Where are in that presentation JOLED review that is targeting 10 inch to 30 inch mid size OLED panel market, as well as the flexible OLED panel market.

Also during the first quarter we saw a number of OEM under our new OLED product at CES and Mobile World Congress, included the growing wearables market were Huawei, Asus, Haier, LG and HTC have all launched OLED smart watches.

In a recent publication DisplayMate mentioned that the key element for a great smartwatch is its display and reported that Apple has done a great job with its state-of-the-art flexible OLED display on the Apple Watch.

DisplayMate Apple’s OLED display as an excellent smartwatch display that provides, “very nice, pleasing and accurate colors and picture quality, and is a very good side-by-side match to the iPhone 6”. On the lighting front, developmental activity continues to advance.

At last month’s Euroluce trade show Kaneka exhibited OLED lighting panels that were over 1.05 millimeter thick with 50,000 hours of lifetime. And just last week, our new licensee OLEDWorks announced it reached an agreement with Philips to buy selective parts of its OLED light source component business.

As a proliferation of OLED continue we are seeing new end market opportunities emerge. One of those opportunities is the automotive market which is expanded in the OLED display and OLED lighting TAM or total available market.

The benefits of OLED notably its thin form factor, minimal heat generation, transparency, conformability and manufacture ability on plastic to create an unbreakable panel. These benefits are capturing the interest of a number of car makers. According to the reports car display volumes expected to almost triple by 2018.

Currently luxury cars have two or three displays, but a safety convenient features multiply they can have as many as nine displays in the near future. Of course LG display, future cars parent side window displays and replace rear view mirrors and side mirrors with screen.

On a lighting side, Audi demonstrated a new OLED tail light concept for the Q7 car at the beginning of this year. Also in January, BMW demonstrated new concept car, the M4 concept iconic lights that features a new OLED based tail lights.

According to BMW, the simplicity and slim mechanical structure of OLED is paving the way for more compact lighting systems and opening up new dimensions and panel design. [Indiscernible] OLED panel in commercial car was just last month. Car and driver report that BMW’s 2016 M2 car will be the first one to adopt these OLED tail lights.

It is undoubtedly an exciting time for OLEDs as a level of commercial and development activity increases. And with the OLED industry continuing to gain traction with consumers and OEMs, the future of OLED and our company has never been brighter. Now let me turn the call over to Sid..

Thank you, Steve and again thank you everyone for joining our call today. Revenues for the first quarter of 2015 were $31.2 million, our results for consistent with our expectations. As noted on last quarter’s conference call, we continue to expect our first half of 2015 sales to be similar to the second half of 2014.

I just want to take a moment to talk about our business. On a fundamental level, we have two main businesses, materials and licensing.

As the OLED industry continues to grow on mature and as we continue to expand our material product portfolio with new emissive layer systems and as our revenue dollars continue to increase, we think the best way to view the company is to look at our total material revenues as a whole and our total royalty and licensing revenues.

Regarding our total material revenues, they were $26.8 million for the first quarter of which commercial material sales were $25.6 million. Commercial red and green emitter volumes by grams were up sequentially in the quarter offset by volume pricing discount.

The breakdown of commercial material sales by color, for the first quarter of 2015, the prior quarter and the comparable year-ago quarter are green emitter sales were $14.4 million in the first quarter down 5% sequentially from the fourth quarter of 2014, $15.2 million and down year-over-year from the comparable quarter $17.2 million.

Green host sales were $4.4 million in the first quarter down 28% sequentially from the fourth quarter 2014 $6.1 million, and down year-over-year from the comparable quarter $12.4 million.

Red emitter sales were $6.3 million for the first quarter up 34% sequentially from the fourth quarter 2014, $4.7 million and up year-over-year from the comparable quarters $3.9 million.

Our first quarter 2015, royalty and license fees were $4.4 million the quarter does not include any Samsung license fee which is $60 million for 2015, half of which is recognized in the second and fourth quarter of the year respectively.

The quarter also does not include any earned LG royalties which will be recognized one quarter an arrears when the royalty amounts become known to us which will begin in the second quarter.

Moving down the income statement, material cost for the first quarter 2015 were $8.6 million down year-over-year from the first quarter of 2014, $9.9 million due to lower host sales. First quarter 2015 material gross margins were approximately 68% compared to first quarter 2014’s materials gross margin of approximately 72%.

The decline in margin is substantially due to competitive pricing pressures. First quarter operating expenses excluding cost of materials were $20.8 million flat year-over-year from the comparable quarters $21.3 million. Operating income was $1.8 million for the first quarter of 2015 compared to $6.6 million in the first quarter of 2014.

During the quarter we incurred income tax expenses of $600,000 or a tax rate of 32%. For the first quarter of 2015, we reported net income of $1.3 million or $0.03 per share compared to $4 million or $0.09 per share for the same quarter in 2014.

Shifting to the balance sheet we generated $47 million in operating cash flow and ended the March quarter with $329 million in cash and short-term investments or over $7 of cash per share. The increase from the year-end cash levels of $289 million mainly stemmed from upfront fees.

Moving along to guidance, our outlook for the year remains unchanged as we noted on last quarter’s conference call, we expect 2015 to be a transitional year. We continue to expect our 2015 revenues to be around $200 million with a downside range of approximately 5% and an upside potential of approximately 15%.

Our revenue guidance includes Samsung’s light display to $60 million revenue. It also reflects the impact of the quarter’s lag and LG's royalty taking effect where we will only recognize three quarters of LG’s royalties this year with the fourth quarter royalties to be recognized in the first quarter of 2016.

With that I’d like to turn the call back to Steve..

Thanks, Sid. OLEDs are inherently great, beautiful, brilliantly colorful and simple devices.

The broadening of the OLED display product portfolio from flexibles and wearables including smart watches to high-end smartphones, mid-end smartphones, high-end tablets, full HD and 4K TVs, exemplifies the growing breadth of the OLED display market opportunity even while remains in what we believe in the early stages of technology adoption.

On the lighting front, developmental activity continues to flourish as efficacy rates and lifetimes increase and the universal manufacturers expands. OLED technology is redefining the design, feel and use of consumer products.

Due to the benefits of OLEDs display and lighting panels to be extremely thin, they can be transparent, they can be manufactured on plastic to create an incredible, unbreakable and light weight panel and because OLED is a simply layers of film they are easily deformable and can be curved, bent or even rollable.

Broadly speaking, we believe that OLED technology provides the design freedom for display and lighting makers to dramatically alter the consumer and illumination landscape, and create differentiated, high-performing, energy-efficient, innovative products. On that note, Operator please start the Q&A..

Certainly [Operator Instructions] We’ll take our first question from Brian Lee with Goldman Sachs..

Hey, guys. Thanks for taking the questions. Good job on the quarter. I guess I wanted to dig into the – the deferred revenue and upfront payments here a little bit because it’s different from what we’ve seen historically.

So Sid, can you talk a little bit about the deferred revenue that you’re booking this quarter, which customer it’s for – and it’s tied to and then how we should think about the revenue recognition timing? It looks like about $25 million is in the current liabilities and $25 million in long-term.

So I am just wondering how this is going to phase in?.

Yes, well. We can’t disclose specifics about the customer. But this is as we said, we signed five agreements in this quarter. I’m sorry, three, three agreements in this quarter included in, so that upfront fees and license fees and milestone payments that we talked about are related to those.

The license fees will be amortized over life of the license and we really can’t go into specifics about any of the contracts. But we have classified some of the them as current and some of the them as deferred revenue..

Okay, that’s helpful. I guess in classifying some of this is current or close to half of it is current liability. I guess what sort of criteria are you using given some of the agreements you signed up recently are sort of running royalty agreements.

And so to have a kind of 12 months view that some of this will be booked or sort of projecting what type of run rates, am I thinking about that in the correct fashion..

There are specifics in the contracts about when revenues will be earned so part of this has to do with its way that we negotiated the contract and the other is an estimate when we believe that these will be earned over the life of the license. And we’ve looked at it and allocated it amongst current long-term and short-term..

Okay, that’s helpful. And then in the 10-Q, you also mentioned a $1.9 million payment for milestone payment in royalty and license fees for customer that we can commercial application or same product.

First part of the question was going to be can you elaborate which customer, I’m assuming now, but can you elaborate on which material that’s referencing and what end market segment application that products being ramp into commercial application..

We really don’t disclose specifics about each of the contract or about each of the customer that with our contracts a lot of them have certain milestones that need to be met and we get payments. So this is just one of our customers that met it and we have other contracts that has still no provisions..

And we’ll move along to our next question. [Operator Instructions] We will take our next question from Jim Ricchiuti with Needham & Company..

Thanks, good afternoon. Question about the – how the materials demand was from your major customers through the quarter.

It looks like your largest customer if you exclude the host materials it looks like the revenues were up about 30% on materials, I'm just wondering how did that track as you went through the quarter and also I have a question on your second largest customer in general that decline is more a function of the new agreement?.

The first question is regarding a specific customer. You’re probably looking at the queue, we talked about customer A, B, and C..

That’s right..

Well, clearly what has occurred is with one of them is at the host sales were down, so that that end customer sales would then be reduced mainly because of host. And the second part of your question is you know our customers we have the total grams of emitter sold is up quarter-over-quarter.

So – and that’s based upon the demand from our customers and I really can’t talk specifically about different customers..

Should maybe another way to ask, just in general as you went through the quarter, was the demand that you were seeing from your major customer was that in line with expectations, was it – because you can’t, you’ve talked in the past – sometimes don’t have great visibility with some of your major customers?.

It was in line with our expectations and specifically we talked about in the fourth quarter that we accepted – when our year-end call, we expected the first quarter and second quarter to look very similar and Q3 and Q4, and this is pretty much the same as Q4..

Okay, thanks lot..

And we’ll move forward to our next question from Alex Guana with JMP Securities..

Hello everyone and congratulations on a nice start to the year.

I know you guys don’t give – I know you don’t give much color on near-term expectations, but I'm wondering with the impressive news plate of license sparring agreements, can you talk about how material we might expect the incremental royalty streams to be in this upcoming quarter r is because of seasonality and time lag, should we think about it being a more end back end loaded to the year? Thanks..

Well as we stated Q1’s royalties from LG won’t really be reported until Q2. And so that’s part of it, so you should see an increase on that side since we have no royalties from LG. And what do we see as we move forward for the year.

We have stated we do expect the second half of the year to be better than the first half of the year, based upon increased capacity based upon as we said there is a number of variables in why we think the second half of the year will be there one in the Samsung and building out a three second part is LG and increased in their OLED TV capacity in the second half of the year.

So based upon that that’s why we believe that the second half of the year will be obviously better then the first half..

Said I recognize that the payments from LG will start in Q2 I guess that’s the nature of the question I mean it, can you give us the ballpark of that.

I know they haven’t given you exactly what it’s going to be, but I think know what programs you are engaged in how meaningful is that incremental contribution going to be in Q2 that’s the question?.

We honestly there is been no report of what shipments have been, I mean, LG reiterated on our conference call that they expect to sell 600,000 TVs this year but we really do not have information regarding what the royalty amount will be for Q1 because to be honest if we did know what it was we would report it.

But we don’t get it – call – after this call..

Okay, Steve I was wondering if you could talk about some of the progress you are making on a technological front behind the scenes is the greatest excitement here in the near-term around flexible is it may be around life time improvement new colors can you give us any sense of what’s happening on the R&D front behind the scenes..

Sure, on the fast press of materials we’re continuing to invent new red and green emissive layer system that has different color points, higher efficiencies and longer lifetime we’ve also been doing a lot of work on blue where we’re making progress, although we have nothing to announce at this time.

In addition some of the work that we’re doing on our single layer encapsulation system and organic vapor jet printing technologies although those are both in the RX stage of R&D are coming along really nicely and we think both of that are addressing pretty important issues that the OLED industry is facing over the next few years.

One is encapsulation, that is relatively inexpensive, easy-to-manufacture and fully [indiscernible] your protection against oxygen and moisture and the other is an efficient way of making large area TVs.

People are making TVs both side by side right now with color filters, people are looking at ink jet printing we can participate in all of these we also have our – another way of doing it where we at Organic Vapor Jet Printing what we print, actual similar molecules that we used in – deposit of vacuum deposition today.

So this is some of the research and development things that are very exciting as we go to the future..

That’s great, thank you. Good luck. .

Thank you. .

Thank you..

And we’ll move forward to our next from Osten Bernardez with Cross Research..

Good afternoon, thanks for taking my question. Why don’t you get back to the deferred revenue on the line item. Is there a way first to understand whether there is any portion of that is based on the fixed amount that we may see, I guess recover throughout the year.

Can that grow on the balance sheet net of sort of whatever rundown from a revenue recognition standpoint?.

In deferred revenue, we’ve got upfront fees, prepaid royalties milestones. So the license piece with the amortized over the life of the license, royalties, prepaid royalties as you get a reported – and was earned it, we will then take it as revenue.

But there is no way that of knowing how much it would be and what their rates that we would reported with because it really is on the royalty side based upon what our customer reports as sale and based upon the ASP of what they sell, that’s what our royalty is based upon..

Okay and then secondly on the price terms that you noted for your red and green emitters.

Are these price down on newer skews, new material or these price balance on prior material that were already, that were previously that are priced on a positive approach down and if it is on newer skews or we still assume that the rate of the price down is the same as it’s been historically?.

We have volume price discounts which in general that’s more that the customer buys, the better price they get. And so in terms of some of them early on, we go back to with Samsung, we go back to the original agreement and we have volume discounts filled into the agreement, there always is some negotiations with the customers.

But the rate of which is those are negotiated. On hosts it’s a little different because it really is a competition and priced with the competitors that we have in that business.

So the important thing that we look at though is overall we expect to maintain our middle margins and our overall margins are targeting between 60% and 70% as we have historically had the same ranges..

Thank you very much..

We’ll proceed to our next question from Hendi Susanto with Gabelli & Company..

Good evening. Based on my calculation and the data in the 10-Q are we seeing decline in LG sales, may I understand more about the dynamics there. I was initially guessing that sales would increase since LG OLED TV production is higher in volume.

Does that reflect higher efficiency of [indiscernible] utilization?.

With LG I think we have increase in sales..

Okay.

And then second question when will the next opportunity to win design wins for our green host materials take place at your large customer, Sid?.

I’m sorry, repeat that question..

When will the next opportunity for design win of green host materials take place at your large customers?|.

Our customer – we’re constantly communicating with our customers about new material set. So there is no public schedule that they’ve made or that we’ve made that the constant interaction with our customers was available and what the needs are..

Thank you Steve, I’ll get back to the queue..

You’re welcome..

And we’ll proceed on to our next question from Rob Stone with Cowen and Company..

Hi, guys. Sid, I wanted to ask about the operating expense run rate I think you were generally targeting something like the 10% to 15% increase this year, but you’re actually slightly lower in Q1. Is this just for a quarter-to-quarter lumpiness implying a bump up in the second quarter or have your thoughts on OpEx churns changed..

I think it’s lumpiness I would expect the second quarter to be able to higher and we still anticipate the year to be in the 10% to 15% range. There really are different things at current different quarters, so it is a little lumpy..

Okay, and turning to the tax rate that was also slightly higher than we were modeling, I think you talked about a 29% rate on the year before – so was Q1 some kind of an anomaly or should we be using higher rate?.

Yes, I would use this for this range for the year, the issue – the real issue was there is a 2% R&D tax credit that Congress passed at the end of last year, but did not extended, the concept, they usually passed it for two years, so I believe at the end of the year that we will - that will get approved, so the overall yearly tax rate will be closer to the 30% range, but for the quarter since it has not passed, we’re required to assume it will not..

Okay.

And with respect to your host material run rate, I think you’ve said you are expecting the first half of the year to be similar to the second half of last year, do you have visibility on host demands later in the year or any comments you could make there?.

Well we expect the downward trend to continue, with our current host business. The magnitude depends on a number of variables, which are to some extent are still up in the year. But directionally we think it is going to continue down for existing host business..

Okay, thank you..

Thank you..

We will move forward to our follow-up question from Jim Ricchiuti with Needham & Company..

I think that you had commented about the automotive market and it seems like we are hearing more about the potential for OLED’s to going to that market, I'm curious if - as you look at some of these emerging markets, you talked about lighting for a while we’ve seen some announcements in that area, is auto coming on a more strongly of late? Or you seeing - as you look at the opportunities in the market, based on what you’re hearing, potentially what you are seeing from some of your customers.

Is it possible we are going to see more traction earlier in the automotive market?.

I think, that some of the initial automotive stuff we are seeing right now is an [indiscernible] of lighting business, so we are seeing a general acceleration of late, because it’s starting to meet certain commercial requirements and if you - I don’t know if you had a chance to see yet, to see the BMW taillight demonstration, but it was pretty extraordinary.

So I think we are starting to hear more buzz about OLED’s lighting, or OLED lighting in cars.

We are also seeing OLED lights in [indiscernible] as well, so you are seeing the initial commercialization of OLED lighting now, as we now it kind of creeps up on you and then all of the sudden it will explode, and you just don’t know exactly when that will happen..

But there is nothing you can – as you – and I again I know you can’t talk about specific plans that your customers have but more broadly as you talk to these customers, do you get the sense that automotive is one of the driving factors in some of the capacity that are out?.

We certainly think it’s an important factor, yes..

Okay, thanks..

And we’ll take our next question from Andrew Abraham with Supply Chain Management Research..

Hi guys, thank you for taking the question. Looking at the royalty and license line going back maybe the third quarter and then fourth quarter comparing it to now. This is pure non-Samsung and LG in this quarter. If we look back at previous two quarters, you are running $5.4 million and $5.3 million.

Is most of this the new licenses that’s the incremental fees here, because I would also assume that there was on the LG royalty that is now being taken out in first quarter..

Well, one of them is milestone payment. One of the increases related to the milestone that was left by one of our customer. And the other is it has to with amortization from number of different contracts. And so it is where it is but the real increases in the milestone. .

Got it. And are you able to look at unit volumes from any of your non-Samsung and LG customers at this point. I know there is not a lot of unit volumes being pushed at this point from those customers. But are you able to get some handle on that as to kind of the way the incremental unit volumes are moving from quarter-to-quarter..

It’s in the lighting or….

No, no, in – just in OLED display on a general basis..

Again, to the honest dealing to the really are doing anything are Samsung and LG..

Got it..

When a lighting customers, we do have also report, because we do have a number of licenses and they do, they are very small volumes, but we do get report from that..

Okay..

On the display side, you really don’t have much, so it’s Samsung and LG..

Okay. And lastly, the ratio between your new red and green versus your old red and green. I know you probably can’t give exact numbers, but how do we look at that now relative to maybe where we were two quarters ago, where it was probably, predominantly, old red and old green, is it – has there been an appreciable change there in terms of the ratios..

There clearly as changes in that the new ones are being adopted for newer products being [indiscernible] older ones are being faced out, the older ones are going to go down. But beyond that, I really can’t answer the questions specifically without going through every material..

Gotcha, okay, thank you..

Thank you..

[Operator Instructions] We’ll move to our next question in the queue from Hendi Susanto..

Secondly, with regard to the flexible OLED display may I verify that Apple smart watches uses only your red emitter materials. And I’m wondering, whether you can give some insights whether you believe that the new Samsung Galaxy S6 Edge, on the flexible part use one or two types of emitter materials..

Well, we – with Samsung they use red and green materials, that is our customer. And we have stated that they do use our red and green and the adopting that green gave them incremental power efficient.

When you talk about the Apple watch we can’t speak for Apple at all, but we didn’t know that the benefits of OLED has attracted a lot of attention from various OEMs. And it is a gorgeous display we have one of them in our general room.

But no one has disclose and there is nothing reported to that who is providing Apple with that display, but really can’t answer any other questions regarding it..

Okay, Sid, thank you..

Thank you..

And this concludes to question-and-answer session. I would like to turn the program back to Sid Rosenblatt for any additional or closing remarks..

Thank you all for your time today. We appreciate your interest and your support. And that would be it. Good night, everyone. Thank you..

This concludes today’s conference call. You may now disconnect..