Good day and welcome to the Universal Display Corporation second quarter 2010 earnings conference call. As a reminder, today’s conference is being recorded. At this time, I would like to turn the conference over to Mr. Joe Hassett. Please go ahead, sir.

Thank you, and good afternoon, everybody. With us today are Steve Abramson, President and Chief Executive Officer; and Sid Rosenblatt, Chief Financial Officer of Universal Display Corporation. Let me begin today by reminding you that this call is a property of Universal Display. Any redistribution, retransmission or rebroadcast of this call in any form without the expressed written consent of Universal Display is strictly prohibited. Further, as this call is being webcast live and will be made available for a period of time on Universal Display’s Web site, this call contains time-sensitive information that is accurate only as of the date of the live webcast of this call, August 09, 2010. All statements in this conference that are not historical are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. 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. Universal Display disclaims any obligation to update any of these statements. Now, I'd like to turn the call over to Steve Abramson, President and CEO of Universal Display. Please go ahead, Steve.

Thank you, Joe, and welcome to everyone listening on today’s call and webcast. This afternoon, I will start with a quick overview of our second quarter financial results. Then I will discuss highlights from the quarter, and update everyone on our latest plans and developments to grow our PHOLED technology materials in both the display and lighting markets. Sid will then follow with more detail on our financials before we open the call to questions. I am pleased to report that our revenues for the second quarter of 2010 rose to $8.4 million compared to $3 million for the same quarter of 2009. Revenues also increased significantly on a sequential basis nearly doubling from the $4.3 million in the first quarter of this year. As a result, we were able to reduce our operating loss for the quarter to just $1.9 million, a significant reduction for both the year ago and the preceding quarter. While increased revenue was driven primarily by the growth of our developmental business, commercial revenue was also up both sequentially and compared to the second quarter of last year. OLED was the most talked about display technologies these last few months, and we feel rightly so. Bright, beautiful, energy-efficient OLED displays are increasingly penetrating the mobile display market, especially for high-end smartphones. OLEDs have also become recognized as the leading technology for the next generation of large area televisions and energy-efficient white OLED lighting products are getting closer to commercial reality. As our UniversalPHOLED technology materials are increasingly recognized for their ability to drive power consumption down, we have become a key component for high-performance OLED displays and essential for energy-efficient white lighting. As a most recent example the Samsung Galaxy S that’s just been launched to outstanding reviews. The full page ads taken out in…

Thank you, Steve, and again thank you everyone for joining us on the call today. I've be reviewing the financial results for the second quarter of 2010. I will also share some insights from the quarter, after which we will be happy to take your questions. Revenue for the second quarter totaled $8.4 million, almost tripling when compared to the revenue of $3 million for the second quarter of 2009 and at almost doubled roughly the $4.3 million of revenue for the first quarter. Commercial revenue increased to almost $2 million for the second quarter compared to commercial revenue of $1.2 million for the second quarter of 2009. The increase was primarily due to a $334,000 increase in royalty revenue, which mainly represented royalties received under our patent license agreement with Samsung SMD and $202,000 increase in commercial chemical revenue. Developmental revenue increased to $6.5 million for the second quarter compared to development revenue of $1.7 million for the second quarter of 2009. The increase was primarily due to an increase of $2.3 million in development chemical sales and an increase of $2.3 million in technology development revenue. The increase in technology development revenue reflects the recognition as revenue of $2.1 million from a nonrefundable payment that we previously received from a customer under technology development agreements that have expired several years ago. Even excluding the revenue from the nonrefundable payment, developmental revenue was still more than double the $1.7 million in developmental revenue for the second quarter of 2009 and also up strongly from the $2.4 million in developmental revenue for the first quarter of this year. Total operating expenses for the second quarter were $10.4 million, up from $9.3 million for the second quarter of 2009. The increase was primarily due to increases in both the cost of…

(Operator instructions) We will go first to Yair Reiner with Oppenheimer & Company. Yair Reiner – Oppenheimer & Company: Great, thank you and congrats first of all on the good results. So, first question, obviously a huge uptake in the developmental revenues. Sounds like at least part that is one time in nature but even if you take out that one deferred revenue bit looks like the new level is somewhere north of $4 million. Is that a level that you feel comfortable with the street modeling moving forward or, if not, what do you think is kind of the right level?

Developmental revenues are precommercial sales – are sales of material precommercial production. So this uptick, this quarter and last quarter, is based upon the fact that the customers who are buying these for the most part are in the process of starting to ramp up for production. When they start producing commercial products this will transfer into commercial chemical sales. Yair Reiner – Oppenheimer & Company: I guess, so near-term, should we expect the same customers to come back at similar levels until commercial begins to ramp up?

It’s hard for us to predict. The first quarter had pretty good developmental chemical sales. This quarter, it was up a little bit from that. These customers – there's a number of companies, as Steve mentioned, getting ready to start commercial production. It’s difficult for me to say whether the number will be the same or up or down a little bit. It’s difficult for us to gauge that at this point. Yair Reiner – Oppenheimer & Company: Okay, very good. In terms of royalties, those were a bit stronger than I expected. Did you see any benefit this quarter from the shortage of OLED displays potentially driving up cost and that flowing through to you on the royalties?

Well, the royalties in this quarter are royalties based upon a report that we received for the first quarter. So there is a quarter lag. We get a royalty report that essentially tells us what the total sales are that’s covered by our technology. If there is a price increase because of a strong demand, that would be reflected in our results. Yair Reiner – Oppenheimer & Company: And then one more and I'll get back into queue. Can you give us a progress report on green, where those trials are and when you expect to potentially hear back on that? Thank you.

As we have mentioned, we have a number of customers that are evaluating our green materials. We think that our green phosphorescent materials will increase the performance of the display by reducing the power consumption. To try to guess at this point when customers will use it is very difficult. We are sampling it to a number of different customers at this time. It has been going on with some customers as we have mentioned for probably a year, other customers are sampling for the first time. So it’s difficult for us to predict when we will start selling commercial green. Yair Reiner – Oppenheimer & Company: Okay, thank you. I’ll get back in the queue.

Okay. Thank you.

We will go next to Jim Ricchiuti with Needham & Company. Jim Ricchiuti – Needham & Company: Hi, thank you. Maybe you could just help us out a little bit on that development chemicals line. Can you say if the revenues in that area were concentrated with one or two customers?

I would tell you that a significant piece of it is with a couple of customers. Jim Ricchiuti – Needham & Company: Okay. Just with respect to the SG&A, was that driven higher as a result of the increase in that area? I am just wondering how we should think about your SG&A expense going forward. I don't know if you’ve also got some additional expense that you’re now factoring in as the business begins to ramp a bit.

Jim Ricchiuti – Needham & Company: Okay. Then going forward anything you can provide in terms of how we should think about that –?

I think just because of the two increases in this quarter on the compensation and pension plans I think you could look at the SG&A cost this quarter is probably close to the base that we will have for the rest of the year. Jim Ricchiuti – Needham & Company: Okay, and then just circling back on the – what I guess is going to be a transition from developmental chemicals revenue as these customers move into production to commercial. Do you anticipate them becoming more efficient with the way they use the materials? In which case, we may not necessarily see a complete shift over to the commercial materials revenue. I think that's been your experience with SMD, isn't that right?

That’s correct. That was our experience with SMD earlier on. We do know that some of our customers are using more efficient manufacturing process. Do I think it may change? Probably because when you are scaling up a tool to move into production, you probably are using more materials than you would when you are running full out 24/7. But to try to quantify it, I don't think I could do. Jim Ricchiuti – Needham & Company: Okay. Fair enough. Thank you.

Thanks, Jim.

We will go next to Darice Liu with Brigantine Advisors. Darice Liu – Brigantine Advisors: Good afternoon, guys. Steve, as you mentioned earlier, GE and Konica Minolta recently announced a white OLED lighting device using solution coating versus vacuum coating. Can you update us on the progress of your solution process able materials?

Darice, it’s Steve. We are making progress on the materials. We are working with the customers. In terms of specifically updating you, we are getting better and better performance on our solution-processible materials and the customers are asking us to do better. I'm not so sure what else I can say. It has gotten better and better each quarter. Darice Liu – Brigantine Advisors: Okay. You mention customer discussions. Are your current customers and potential customers looking for the ability to do solution coating because it is conceivably cheaper and also higher volume?

Well on the lighting side, as you are aware we signed a number of license agreements that are related to solution processing. We think that if in the long run solution-processible technology is one that will be the winner we want to ensure that all of our materials are solution-processible because we still think that the customer is going to need phosphorescent technology no matter what their manufacturing process is. Darice Liu – Brigantine Advisors: Are any of the discussions gearing in terms of make or break? Making sure that they do want solution-processible or are they still open to either one?

It depends on the customer. I don't think there is anybody today that’s make or break. Darice Liu – Brigantine Advisors: Okay. And then from a competitive landscape, obviously we've seen OLED momentum growing and the marketing opportunity expanding. Are you seeing any new OLED material players on the horizon?

When you say material players, for emitters or for other materials? Darice Liu – Brigantine Advisors: For emitters.

Darice Liu – Brigantine Advisors: Okay. But I guess switching to a fluorescent side. For example, we’ve seen Idemitsu Kosan recently take a stake in LG’s OLED Group and it seemed to demonstrate continue investments in fluorescent IP. Are you seeing any activity coming out of LG’s OLED material group and is there any impact to your working relationship with Idemitsu Kosan?

Well, as you are aware, we have a relationship with Idemitsu Kosan. I can’t answer for what LG would be doing. LG, we’ve got a short-term license agreement. They are using our materials. We have a very good relationship. We think that LG will use phosphorescent emitters in all of their devices. I think there is still work being done on fluorescent emitters because the basic IP is public domain. So, it is technology that can be used without paying Kodak a royalty but we do believe that industry will not be able to move forward unless they power-efficient technology. Darice Liu – Brigantine Advisors: Okay. Thank you, guys.

Thanks, Darice.

We will go next to Andrew Abrams with Avian Securities. Andrew Abrams – Avian Securities: Hi guys, just a quick question. Have you guys got further on the B1-B2 composition with any your customers? Has it been adopted or are you still in the show phase?

Obviously, the only customer today that’s making OLED display is SMD. We are working with a number of our customers to use this technology as they move forward. But we have nothing that we can announce at this time about any specific customers using that architecture at this time. Andrew Abrams – Avian Securities: Okay, and just lastly, what's the status of the OLED development line? Has that started? Has funding come through, or where are you guys as far as that goes?

It is just – you are talking about the DOE program with Moser Baer? Andrew Abrams – Avian Securities: Yes.

It is – the funding has started. The first part of this is to do the design and build up the facility and set the architecture and we are working on it today. Andrew Abrams – Avian Securities: Got it. Okay. Thank you.

Thanks, Andy.

We will go next to Rob Stone with Cowen & Company. Rob Stone – Cowen & Company: Hi, guys. I wonder if you could just review the development and commercial chemical revenue numbers again. I didn't quite catch the total number. And then in terms of the cost of chemicals, any commentary you can provide on a trend there? I guess the developmental chemicals tend to be somewhat higher costs because of smaller batches.

That is correct. On the developmental chemicals because as margins to developmental chemical costs are higher than the commercial chemical because you do some batches that are obviously very small, some are larger, but the cost of developmental chemicals – real developmental chemicals are much higher than the cost of commercial chemicals that we’ve scaled up. As you are aware, we talk about increases and decreases. We don’t talk about specifically the breakdown from commercial versus developmental material sales. You almost have to go back to the Q from or the K from a year and a half ago, and then trace the increases and decreases in each. Since we don't break that out, I really don’t have those numbers nor are there numbers that we include in the Q. Rob Stone – Cowen & Company: Okay. A question on – I think you said use the current quarter as a new baseline for SG&A expense. What about the trend on R&D that's been aided by lower external expenses for a couple of quarters? How should we think about R&D expense going forward?

I would think that R&D expenses should get back to the levels. One of the issues in the R&D cost is some developmental chemical costs. And as part of this scale-up process, our costs with PPG are allocated to developmental materials or to research and development. We will continue essentially on this course with PPG on development and scaling up. So I don't see the trend of a reduction in R&D continuing. Rob Stone – Cowen & Company: More likely a bounce back in the second half to your sort of previous run rate?

Yes, I believe so. Rob Stone – Cowen & Company: Okay. Can you breakout the EPS impact of the noncash charge for the warrant?

It’s pretty close to the difference, the net income, the interest income and the other items in the income statement. So I think it’s probably on the – it's close to the probably $0.12. I would think it’s close to $0.12, a $0.11 or $0.12 on the net income line. Rob Stone – Cowen & Company: All right. On the deferred revenue that was reclassified this quarter that triggered the release of those funds, what was it that caused the reset now?

We work with customers. We had a technology development agreement that when the customer – if and when the customer entered into a license agreement they would get credit for those payments. This customer informed us that they do not intend to move forward in the OLED manufacturing field and due to that – the same thing happened last year with Kyocera, we then took the revenue that we had deferred because it was really no – the likelihood was remote that they would continue and put it into revenue. Whenever that occurs, we will take the revenue out of deferred or if they enter a license agreement it will be amortized over the life of license agreement. Rob Stone – Cowen & Company:

Well it's – can tell you what we've read in terms of specifics. We know that HTC has said they're switching because they can't get product from Samsung. I think Samsung has made a determination that, why would you sell your competitor your best display and are putting it into their own products. So they have said that they expect for the next period, I think it's almost up to 18 months, that all of their capacity will go towards their own products as they're bringing more and more out. They did respond, I know to the Apple questions about OLED displays and they said at that time that even though the display that Apple uses in their iPhone 4 has 10% or 15% more pixels they said that it use 30% more power. I don't know for sure whether that’s what they said. We don’t really do power consumption tests in the same way that they do and we don’t have access to a lot of those displays. We do know that by adding our green material and adopting some architecture that we have that we can have probably a 20% to 30% improvement in power and just adopting green is probably in the 20% range, not in the 30%, but we do have architecture that we also can offer our customers that will give a significant increase in power efficiency. Rob Stone – Cowen & Company: Great. Thanks very much.

Thanks, Rob.

(Operator instructions) We will go next to Jed Dorsheimer with Canaccord. Josh Baribeau – Canaccord Adams: Hi, this is Josh Baribeau for Jed. Thanks for taking the question. Pretty straight forward. Congratulations on the good results. Most of mine have been answered. Just maybe more philosophically, if you can update us on how you're approaching either your negotiations with Samsung or LG. Looks like we're seeing more short-term extensions more so than long-term contracts. Can you provide us with just what you're thinking, what your goals would be in negotiating these contracts and maybe just an update on the progress?

Well, I can’t really comment on specifics. We believe that we are doing everything we can do to get these long-term arrangements done timely. As you're well aware, there is quite a bit at stake and we want to ensure that in the end that we will get our fair share but we end up with a win-win contract with all of our customers so that they can have the market grow and we can get a return on our investments. So our philosophy is to do the best we can and if it requires an extension of time that we think is the appropriate way of doing it then we will do that. Josh Baribeau – Canaccord Adams: And just to follow-up to that. Do you think the granting of an extension weakens your position at all or do you see it as just more logistics?

It’s two-fold. It's logistics. We don't think it weakens our position because as you saw in the Samsung extension any terms of the agreement will relate back to June 30. Josh Baribeau – Canaccord Adams: Okay. Great, that's it from me, thanks.

Thank you.

We will take a follow up from Yair Reiner with Oppenheimer & Company Yair Reiner – Oppenheimer & Company: Thank you. First if I can follow-up on the previous question. Is one of the goals with the Samsung negotiation to get to terms that can be universalized with your other display customers, or is there a possibility that Samsung will get different kind of deal than others?

I can’t really answer that question. We think that the arrangement should be what's customary in the industry, and we will continue to negotiate those terms. Customers that have much higher volumes than other customers traditionally get breaks as they go into those higher volumes. So we are looking at everything that we can to try to get this deal done. Yair Reiner – Oppenheimer & Company: Understood. And then just one more if I could. Your commercialization assistance revenue, you had some more this quarter. Do you expect that to continue or is it still kind of touch and go?

It’s still kind of a touch and go. It isn’t a significant piece but we're still working with those customers and we expect it to continue. Yair Reiner – Oppenheimer & Company: Thank you.

We will take a follow up from Rob Stone with Cowen & Company. Rob Stone – Cowen & Company: I wanted to follow-up on the OLED lighting area. We have seen a handful of early commercial products introduced and I was just wondering if you are generating revenues related to white lighting in terms of royalties so far or elsewhere. And if not, any sense of when you expect that to happen?

Well, we would expect – to be honest Steve, lighting business is one that is down the road. We do have license fees from a couple of the companies that we’ve signed lighting arrangement with Konica Minolta and Showa Denko. And any license fees that we receive will be amortized over the life of the license agreement. So we are reporting license fee revenue from a few customers. There are materials that are being sold but it is not a significant piece at this point. Rob Stone – Cowen & Company: Okay, but there is a small amount of material revenue related to white lighting.

That is correct. Rob Stone – Cowen & Company: Thank you.

Thank you.

With that, we would like to thank you all for participating today. If you have any additional follow-up questions please do not hesitate to contact me directly, which a lot of you do. So thank you very much.

And this concludes today’s conference. Thank you for your participation.