Good day and welcome to the Universal Display Corporation third quarter 2011 earnings call. At this time, I would like to turn the conference over to Joe Hassett.

Thank you and good afternoon, everyone. With us today are Steve Abramson, President and Chief Executive Officer and Sid Rosenblatt, Executive Vice President and 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 website, this call contains time-sensitive information that is accurate only as of the date of the live webcast of this call, November 8, 2011. 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.

Thank you, Joe, and welcome everyone listening on today's call and webcast. It's been an extremely productive, exciting and fruitful three months, so let's get right into it. For the third quarter we reported positive net income of $6 million and earnings of $0.12 per diluted share. Earnings were driven by record quarterly revenues of $21.8 million. Our results this quarter clearly validate our business model of licensing our intellectual property and selling our proprietary materials with substantial margins that yield attractive returns for shareholders. Sid will go through all of our financials in more detail shortly. This quarter's results and the steady stream of exciting OLED display and lighting market developments, we've recently witnessed a strong signal that we may have reached the dawning of the OLED era. Frankly, I couldn't put it any better than Chimei Innolux, one of our partners, which announcing their new AMOLED, true OLED, higher mobile device display technology. The popularity of smart mobile devices had changed the way consumers communicate and interact. In response to greater demand for better user interfaces as image quality, CMI has endeavored to develop high-end mobile device display technology that will satisfy consumer's requirements. Of course, nowhere are consumer requirements more evident than at Samsung. Which recently announced it sold over 30 million OLED equipped Galaxy S and S II smartphones. In fact, for the third quarter, Samsung surpassed Apple's smartphone sales for the first time ever. Samsung SMD currently represents the largest individual market with OLED technology and material with more OLED power devices in commercial circulation than any other company. Consequently, it's easy to understand why we are so pleased with our new Samsung OLED patent license and supplemental OLED material purchase agreement. These agreements provide us with both a stable base of recurring and increasing…

Thank you, Steve. And again thank you, everyone, for joining us on the call today. I'll be reviewing the financial results for the third quarter as well as sharing some insights from the quarter. After that we will open the call to take your questions. Revenues for the third quarter totaled $21.8 million, a 208% increase over revenues of $7.1 million for the third quarter of 2010. This is by far the best quarterly revenue numbers in the company's history. Commercial revenue was $9.9 million for the quarter, an increase of 248% over the commercial revenues of $2.8 million for the third quarter of 2010. Developmental revenue was $11.9 million for the quarter, a 182% increase over developmental revenue of $4.2 million for the third quarter of 2010. The growth in both commercial and developmental revenue for the quarter was driven primarily by higher chemical revenue, which accounted for $3.5 million and $7.5 million of the increases respectively. Commercial revenue for the third quarter also benefited from a $3.6 million increase in royalty and license revenue, primarily from Samsung Mobile Display. Within commercial and developmental chemical revenues for the quarter are $2.9 million and $4.9 million respectively of revenue from host material sales. We believe that host material sales can enhance our phosphorescent emitter material sales business. However, the host business is significantly more competitive than the phosphorescent emitter material sales business. Consequently, there is correspondingly more uncertainty regarding the long-term prospects for our host material business. As you know, one of our more significant events during was our entry into a new OLED patent license and supplemental material purchase agreement with Samsung. These agreements run through 2017 and replace our 2005 agreement with Samsung in their entirely. Under the new license agreement Samsung is paying a fixed license fee,…

(Operator Instructions) Our first question comes from John Bright with Avondale Partners.

Quite a bit of a debate going on, on the patent topic, particularly in Europe at least most recently. Can you talk to us about anything that took place in that old hearing that you know about that would give people doubt? There was some discussion around the iridium term. Maybe my question would be, are there any existing competitive phosphorescent in OLED products that do not use iridium? Why don't you start with that?

The answer to that question, iridium is the only phosphorescent material that's been commercialized, as of now. I mean we as well as other people work on non-iridium materials, but none of them have reached commercial stage. I'll add a little bit more color to that. What happened in the European patent decision was that we decided to cancel the claims relating to osmium, because they have a pending continuation application. So we are just going to include them in that. They are very broader claims relating to iridium organometallic.

The second question that I have is going to be around guidance for calendar '12. $92 million, a $110 million, any characterization that you would give us on what the makeup of that guidance might look like or that revenue might look like?

It's difficult to really break it down piece by piece. As we have said, this is the first time we're doing it. We do have some knowledge of what we are going to receive in payments from Samsung, but none of those terms have been disclosed. And we are looking at the year and we think that these numbers are reasonable numbers for next year. As we move through the next few quarters and we are able to have more comfort in exactly what it is and the components are, we maybe able to give you a little more color. But we think that this is really as far as we can go at this time.

And one clarification, that doesn't include any new contracts that might be signed, is that correct?

That is based upon what we think 2012 will look like.

We'll take our next question from Darice Liu with Brigantine Advisors.

Just a follow-up on the prior question. Since the Samsung agreement is a license agreement versus royalty, how should we model the revenues? Will it be recognized on a quarterly basis with the volumes, or are we just talking about one (inaudible)?

Can you just speak a little louder?

I wanted a follow-up on the prior question regarding the Samsung revenues. The agreement that you signed is a license agreement versus a royalty agreement? So I was just wondering how we should model the revenues. Will it be recognized on a quarterly basis in line with the volumes or are we talking about lump sums on certain Qs?

We the agreement has a annual fixed payment of which we get paid twice a year. And at this time, it will be whatever that payment is for the year and since we have payments in the third quarter and the fourth quarter, it is what we received in the third quarter and the fourth quarter of this year. For next year, it maybe a little lumpy, because we will account for it when we receive the payments, which are in second quarter and fourth quarter, unless it changes. But it will be straight-lined for the amount received in any given year.

And just a side question. Have you received any other attractive revenues?

What we did is we signed a license agreement that goes from beginning of 2011 through 2012. And through the negotiations process we determined what the total amount would be, which would include everything that we believe we would have been owned from the past. And we were actually paid some royalties in the first part of the year based up on the old agreement. So when we signed the fixed payment amount, we took everything into consideration.

In the past, you talked about increasing your market organically and non-organically, such as maybe extending into other layers in the OLED stack such as the HIL or the ETL. Can you provide an update on that?

Well as you saw from this quarter, we start to work on for example, host materials. So that's the first step in looking outside the emitter space.

And the composition in the host material, it's very similar to the ETL and the HIL though, correct?

We wouldn't disclose that. I mean, no. That'd be confidential.

But you are looking into expanding outside?

We are looking to expand our research and development and material business outside of emitters and to other aspects of the stack.

Our next questions come from Hendi Susanto with Gabelli & Company. Hendi Susanto - Gabelli & Company: My first question is, do you have green emitter materials in your commercial material sales in Q3? And could you also indicate whether gross margin of the green emitter material are similar to the red ones?

We do have green emitter materials in our commercial revenues for the quarter. We don't specifically break this down. Our emitter material margins are pretty much in line with each other. Hendi Susanto - Gabelli & Company: And then the new Sony PlayStation Vita is using AMOLED display. Would you be able to tell whether that display is based on phosphorescence AMOLED display technology similar to Samsung's?

We don't know yet. Has that thing released?

Hendi, has that product been released? Hendi Susanto - Gabelli & Company: I don't think so. But I'm not 100% sure.

After it's release, we would like to be able to talk about it. Hendi Susanto - Gabelli & Company: I think based on my calculations, it seems that the increase in chemical revenue in development is like way higher than the commercial one. Could you give some color on that?

Well, as we said in there, there is about $4.9 million in host in developmental revenue. So the big increase is on the host side. Hendi Susanto - Gabelli & Company: It is my simple understanding of the latest update on your European hearing. So the Court is requiring you to remove any reference to other phosphorescent materials and then retain the iridium reference. And my understanding is the only material is osmium. And I just want to verify whether besides osmium there are other materials?

Hendi, there are other materials. There is platinum, for example, osmium, iridium. And we have various patents in the U.S. and around the world directed to those materials as well. What happened in the European Patent Office was we removed the osmium claims and we're going to re-file them in a pending application. We also have our first phosphorescent patent, but it was not the subject of any of these proceedings. So our basic phosphorescent patent which will cover, however you get phosphorescence, but not subject to this European proceeding.

Our next question comes from Jim Ricchiuti with Needham & Company. Jim Ricchiuti - Needham & Company: I was hoping to maybe get my arms around the revenue stream from Samsung in the quarter a little better. Samsung was approximately $9 million of revenues. Is that correct?

I don't think we disclose customer A, B and C. I don't think we specifically state that. Jim Ricchiuti - Needham & Company: In terms of the license and royalty revenues that you received, Sid, from Samsung in the quarter, approximately $3.2 million of license fees came under the agreement that began at the end of August. Is that correct?

That's correct. Jim Ricchiuti - Needham & Company: And then it was another portion of that that earlier in the quarter reflected the previous agreement?

In the prior quarter. Jim Ricchiuti - Needham & Company: And is there also a development chemical component in there as well from Samsung?

We do so, Samsung developmental chemical, that's correct. Jim Ricchiuti - Needham & Company: Just switching gears for a second, you guys generated an operating margin of, I guess, around 27% in the quarter. How should we think about the operating leverage going forward with the revenue range that you provided? It doesn't sound like you're assuming much of the increase in operating expenses. But maybe there are some line items within operating expense that we need to be mindful of.

Well, as we said, we do have patent cost. We'll follow whatever it is we need to stand to ensure that our patents are protected. From the expense side, we don't see a lot of change in how we need to run our business from here. We will hire a few people. We're increasing our presence in Asia. But as I said, I don't see the expense side having to go up significantly. Obviously as our materials business grows, we will obviously have more costs associated with them. But the margins on the material we think will still be very significant as they have been in the past. And so I don't really see a lot of areas that are going to go up. I mean the operating margin for this quarter, I haven't really looked at it that closely. But if we continue at this ramp, if we continue at this revenue rate and grow at this rate, I think you can figure out where we'll be.

Our next question comes from Jed Dorsheimer with Canaccord.

Congratulations on the results. It's been a long time coming. It's nice to see it finally pay off here. How did you do it in the host side? I mean the host materials, are they covered under your patents? They don't seem to be. So you've actually done a great job of building that business to a greater portion than your emitters. So I am just a little confused to how that sort of came out of left field here.

Well, there are different materials and different patents on that level. And what we found was important to work on some the host materials in order to be able to fill our emitters, because you need a emitter host combination.

So the ramp in the host materials, are those going to the same company that's taking most of the emitter materials as well?

They are going to our customer.

Is there concentration or are some of the companies that you're working with more of a development capacity, are they trying to increase their efficiency by using some of your host materials? Or is it, as you mentioned, the combination of the built first host materials that you're seeing the benefit from?

Well, it's a little bit of both. We have those host materials out there in the market. There are other host materials that other people have as well, because it's a more competitive business. On the other, you would sell more host materials and emitter mirror materials, because you just dumped the emitters into the host.

Do you expect it to be this level going forward in terms of the split? Do you expect the host to grow at a faster rate than the doped emitter materials?

It's really related to how fast the host business is going to grow.

And when you've done an analysis in party your minimum material sales with your largest customer here, as you've done an analysis of the material sales or the doped materials, what percentage of the total markets do you see the host in doped emitters?

I am sorry, Jed, could you repeat that?

So we look at the stack. We got basically seven different layers. The HTL, the ETL, the host in doped materials. I am curious as we look at that sort of revenue build for the materials market, what percentage do you see is your opportunity between the host and doped materials that you're selling?

The whole organic materials piece of an OLED display is still a small portion of the whole OLED display.

But if we call the market, say, $300 million or $400 million, whatever the number is, $0.5 billion, do you see the host and doped materials being 50% of that market, or do you see it sort of in even breakdown between the HTL, HIL the host, the doped and the ETL?

We don't know what they are pricing on those other materials. So it's really tough to answer your question.

In terms of the lawsuit, just don't want to beat a dead horse here, but do want a little bit of additional color looking forward to the see in the summary coming out here shortly. But it looks as if, what, 18 or 20 claims out of the 28 were fined in terms of scope focuses on the iridium. It looks like you've got a new addendum on osmium. Is there anyone else that you know of in the market that's selling either a platinum or osmium doped material? Is this time or a host material using that composition?

The host doesn't play into this, because these are really emitter materials. And nobody is selling any of those materials commercially as far as we know.

Is there anyone selling it from a development perspective that you know of?

I couldn't speak to that. I really don't.

We have limited detail to go off of in terms of the Samsung, what's been disclosed in-terms of the 8-K with much of it blacked out. But what it looks like, and tell me if I'm reading this wrong, that Samsung is unable to purchase materials or work with anyone that is selling materials that violates your IP. So I guess one of my questions is if based on the refinement of scope of these claims, if somebody did have a platinum doped material or an osmium doped material, based on the structure of that agreement with your largest customer, would they be able to sell to Samsung without Samsung having to pay you a royalty or infringe on your IP?

I can't really comment on that question. What I will say is that we have broad phosphorescence patents that have been issued all over the world. This patent having in Europe was the organometallic patent and it relates directly to iridium, and we're taking the fundamental patent claims relating to iridium, we're taking the osmium piece of it and we're going to refile it as far as the continuation claim. We have the similar organometalic patents all over the world. They cover not only iridium, but platinum and osmium as well. So we continue to have a matrix of patents covering this entire space, and we feel very good about the decision that was reached in European Patent Office.

You have got a great patent portfolio. But I think it would be helpful at some point in time if you might be able to clarify just given that Samsung looks like they make up more than 90% of your sales to be able to without a doubt state that the refinement would not allow anyone to sell materials by bypassing you just given your business model. It might be helpful. And then just as a follow-up, Sid, gross margins on the materials, it looks like as you transition from a development to sort of running those cost through the P&L about 75% or 76%, is that roughly the range on a go-forward basis that we should look at the material sales versus the much higher royalty sales with 97%?

It is because of the host businesses, the lower margin business than the emitter business.

Our next question comes from (James Mesoduf with Cowen & Company).

I understand third quarter was fantastic. But what is it that's now injecting seasonality into your sales team?

Historically, the fourth quarter chemical sales has always a been a little lower than the prior quarters. And I think it is that the customers are buying materials as they ramp up to get product out in the holiday season. And then when it gets to the December timeframe, things sort of slow down. So historically, that's what has happened which is what we think will happen again.

What factors could cause you to be towards the lower and/or the higher end of your guidance for 2012?

It just depends on our customers, whether they ramp up during this period and buying more materials and depending whether they continue to build product for the first quarter of next year as opposed to the seasonal piece of it. The only reason we would do that, as I said, for the past couple of years even though the quarters have been significantly lower, the commercial chemical sales have always been and developmental chemical sales in the fourth quarter has historically been lower than the prior quarters.

Right, but the Samsung revenue stream is known. We don't know it, but you know it, right?

The Samsung license piece is known, that is correct. The material purchases are not known.

Is there a significant difference between the gross margins that you earned on development chemicals versus commercial chemicals?

There is a different pricing structure between developmental chemicals and commercial chemicals, but we do have pretty high margins on both.

And the big difference is whether it's of the host or an emitter, right?

There is. The margin on the host materials and the margin on the emitter business are different. Host materials are much more competitive and it's a much more higher volume business.

What is the status of the contract with AUO?

With AUO, we have an agreement that we have renewed for six months at the end of June through December 31. And we are talking to all of our customers now.

Our next question comes from Srini Sundararajan with Oppenheimer.

My first question is specifically on China. It's known that China is not the best place for enclosing patents. So as their OLED capacity ramps, how do you propose to make sure that you get your due revenues?

That is a very good question and we're studying it closely. We do not have an answer yet at this time.

Would you, going forward in the future, like perhaps give us some indications of the area of OLED that has been deposited or used? Maybe you don't need to break it out in terms of your sales, but perhaps in terms of overall OLED area that's being outputted. Would you be able to do that?

That's something that we would not really have the data on. Guys like DisplaySearch and some of the other analyst firms that follow the industry into square inches then go through product-by-product is where that information would be. We really do so materials by kilograms of our customers when they order it, and we don't have nor should we have the information of what it goes into.

My other question is if you look at the ramp of OLED TVs, that's going to be dependent on coming up with a cheaper process, because at present it looks like it's going to be expensive. So would that cause you any problems in your post-2012 outlook?

I'm not sure I actually agree with your hypothesis. It's really possible that the existing technologies that people are working on once they get them to high volumes could be cost effective in making OLEDs.

Do you use any rare earths like lanthanides in your chemicals?

No.

And lastly, I think you might have want to clarify that when people talk about osmium and other elements, basically these would be at the center of organometallic complexes and even those complexes are themselves patentable. So just the name osmium doesn't mean anything. If you have a patent on the particular chemical form that some of the osmium item, for example, I think that is something that you might what to clarify and let the analysts know really?

That is a good point. Thank you very much.

Our next question comes from Andrew Abrams with Avian Securities.

The host material, are we talking about customer A in that regard, or we talking about some of the other customer base that you might have?

We're selling them broadly.

Yes, we're selling it to a number of different companies.

And the breakdown of 2012, I am thrilled that you're giving it to us and I am going to press you further. Can you give us an idea of commercial and developmental? Can you kind of lead us in that kind of split?

As I said, we've looked at our internal projections for the year and we're comfortable with the range. The one thing over the years that we have learned is what we think falls in one category falls into different category. I think over time, if we can, we will give you more information, but I can't give you anymore than I've said at this time.

And lastly on the green material, you said that it's now in the commercial numbers. If it's still a major percentage of the developmental numbers or have that changed?

It is still in developmental numbers. It's a big piece of developmental chemical number was the host material. Of the reminder we talk about being $4.9 million out of the $10 million, the reminder is red and green materials.

Concerning the green material, maybe you could just talk a little bit about your A customer. Are they now using that material on a commercial basis or are they still in evaluation?

If it's in the commercial category, it means it's going into a product.

Our last question comes from Jagadish Iyer with Piper Jaffray.

Are they any other technologies that you think are very compelling to deposit OLED films other than evaporation please? Recently DuPont and the backdrop of it announced the thin film deposition technology. So I just would like to find out given that your relationship with DuPont, are you going to be benefited in the event that that technology comes to fruition?

Well, to answer you first question, backing deposition is the way our OLEDs are made today. Our people have been working on inkjet printing or other types of solution processing technologies of which DuPont has one, and we are working on our material set to ensure that if any of those manufacturing technologies are successful, our materials will apply to them. A third manufacturing technology that we have been working on is still in the development stage. It's something called organic vapor jet printing, which is a printing technology without a solvent, basically using a carrier gas. DuPont has a license agreement from us to actually manufacture inkjet printing displays. We know that they have been working on a manufacturing technology. We don't know anything more than what was issued in the press release. But if that technology successful as expected, our materials will apply to it.

And the second question I have a follow-up is on the blue material. I know it's a little bit far out, but how should we think about your introduction of blue material? Is that a 2012 event? Would it be impacting your revenues in '012, or is it probably an '013 event at this time?

We're still working on the development for deep blue for displays. Now we're selling light blue for lighting now. We are selling a phosphorescence just on which would be red, green and light blue to create a warm white. Before displays and deep blue, we really can't predict when that will come. The development will be completed and it will be ready to go commercial.

We'll take our next question from Darice Liu with Brigantine Advisors.

I just had a follow-up question regarding the materials, actually this solution processible material. Are you guys making any progress with that, or is there any development agreements using those materials yet?

Well, we are making progress with it, and we are working with a number of customers on it.

Is there any timeline to when that will be commercialized?

I don't think so, because it's not just our materials, but it also relates to the manufacturing equipment as well. So there are a number of moving parts in terms of when and whether that technology will ever be commercial.

Are you working with the display guys, relating guys and their manufacturing guys?

We work with a number of people in the industry.

Our next question comes from (inaudible).

Excluding (technical difficulty) your emitter sales didn't grow much last quarter and you expect chemicals sales to drop this quarter. At the same time, Samsung has been ramping new fab substantially in second half this year. Any reason why your emitter business doesn't grow proportionally?

Our emitter business for the quarter has grown. And Samsung, when they purchased our emitter, they are being much more efficient in their manufacturing process. We understand that and we have said that as they scale up and put new equipment in, it is much more efficient. But our emitter business has grown.

Our next question comes from Srini Sundararajan with Oppenheimer.

Sorry, this is not a question, just a request that from the next conference call, if you could limit the analyst to one question and one follow-up, then probably it might go a lot smoother without anybody particularly dominating it, just a request.

We appreciate that. And we did ask them to do. But we will make sure that we follow that as we do it next time. We appreciate that.

It appears there are no further questions at this time. I'd like to turn the conference back over to Mr. Abramson for any additional or closing remarks.

We'd like to thank everybody for their support and have good evening. Thank you very much.

That concludes today's conference. Thank you for your participation.