I would like to welcome everyone to the Universal Display third quarter 2009 financial results conference call. (Operator Instructions) At this time, I would like to turn the event over to Mr. Johnson. You may begin the conference call.

Thank you, and good afternoon everybody. Thank you for joining us today. With us are Steve Abramson, President and Chief Executive Officer, and Sid Rosenblatt, Chief Financial Officer of Universal Display Corporation. Let me start as always today by reminding you that this call is the property of Universal Display. Any redistribution, retransmission, or rebroadcast of this call in any form without the express 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 9, 2009. 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. 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. With that out of the way, I'd like to turn the call over to Steve Abramson, CEO of Universal Display.

Welcome to the third quarter conference call, everyone. Sid Rosenblatt is here as well, and we will review the financial results in more detail following my comments. As always we are happy to take your questions, following Sid's presentation. The third quarter was positive for Universal Display in a number of ways, continuing trends that began in the second quarter, the increase in our overall revenue and the improvement in net loss are obviously good signs. The increase in royalty and licensing revenues is also a promising sign for the future. From all accounts, the event we faced earlier in the year due to the economic climate have begun to subside. Our partners, such as Samsung SMD continue to demonstrate their commitment to increasing production volumes and generating additional sales of OLED displays. It looks like the OLED display market is now positioned to grow through the recovery. The reasons are simple, OLEDs offer a point of differentiation for a variety of products. From today's mobile devices, to tomorrow's larger area computer screens and TVs, OLEDs are making strong inroads. They are visually compelling. Gorgeous seems to be the common descriptor. The energy efficiency of our OLED technology and materials provide a powerful economic incentive for display and product manufactures to switch from LCDs to OLEDs. The growth of global device usage, the driver synergies plays and the sea changing attitude by energy efficiency all present a compelling market for both OLED displays and Universal Display's technology and materials. The numbers support this trends. DisplaySearch, Quarterly OLED Shipment and Forecast Report recorded, "Worldwide OLED revenue has set a new record, with $192 million in representative for the second quarter of 2009 , up 32% for the quarter and 22% for the year. " The report goes on to forecast, "Total…

Thank you Steve, and again, thank you everyone for joining us on the call today. I will begin today with a detailed look at revenues for the third quarter 2009, and then a review of our key financial results, net loss, operating expenses and cash used in operating activities. We'll then turn the call over to the operator for your questions. For the third quarter of 2009, revenues totaled $5,145,000, compared to $2,626,000 for the same period in 2008. Commercial revenue, which relates to the incorporation of the OLED technologies and materials into our customer's commercial products, and includes commercial chemical revenue. Royalty and license revenue and commercialization assistance revenue increased to $1,621,000 in the third quarter of 2009, compared to $1,325,000 for the same period in 2008. Development, which relates to OLED technology, and material development, and evaluation activities, for which we are paid, and includes contract research revenue, development of chemical revenue and technology development revenue, increased to $3,524,000 for the third quarter of 2009 from $1,301,000 for the same period in 2008. Looking at a more detailed breakdown of the categories under revenue; our commercial chemical revenue and royalty licensing revenue for the third quarter of 2009 were $808,000 and $646,000 respectively, compared to $1,025,000 and $300,000 respectively for the third quarter of 2008. In the third quarter of 2009 the majority of our commercial chemical revenue were from sales of our proprietary OLED materials to Samsung SMD. We also sold small quantities of our proprietary OLED materials to two other customers for commercial usage during the third quarter. The sales to these customers were recorded as commercial chemical revenue and license revenue. The decrease in commercial chemical revenue from the third quarter of 2008 to the third quarter of 2009 resulted primarily from lower volume of…

(Operator Instructions) Your first question comes from the line of [Chris Edwards].

I had a question regarding your royalty rate structure. Does your royalty rate percentage depend on the number of different phosphorescent materials used in display. Actually notes from a couple of your old presentation that I would just like to confirm?

Our royalty rates are based upon the ASP of the average sale price of the products that they sell.

Of course, I am just trying to understand if a manufacturer adopts red and green, does that change your royalty rate basically?

Well, we have actually different structures for different companies, and the current arrangements that we have with customers today, our royalty rate is a royalty for the right to incorporate phosphorescent materials into a display and they are not based upon number of colors that are used. Each customer is different.

Your next question comes from the line of Jim Ricchiuti Needham & Company. Jim Richhiuti - Needham & Company: Sid, I am wondering if you can comment on, you had now a few quarters of reports from Samsung. Are there any observations that you can draw from this relative to predictability, or growth, or seasonality, what cam you tell us?

I think we are starting to see a little clearer picture, but to be perfectly honest, I think the second quarter, and we have not seen what the third quarter looks like as of yet. Once we see this year, because this year they seem to be focusing on manufacturing and delivering of displays as in the past, it really jumped all over the place. So I think maybe after another quarter or two, we will have a good feel on the real progression. Right now, I do not have enough information that I can predict, but it is getting there. Jim Richhiuti - Needham & Company: Can you remind us, Sid, or Steve, just about the current licensing agreement with Samsung. When does it expire, and maybe you could also talk about what you are seeing out there in terms of new licensees coming on?

Well, the current agreement with Samsung expires at the end of June, 2010. We are obviously, based upon Steve's comments, you have got LG that is expanding it's OLED operations and talks about having new fab come online in the first part of next year. You have seen AUO, FPD demonstrating a number of different OLED products. We think that 2010, 2011 should show significant growth in the overall number of OLED products that are being shipped into the marketplace. We do see a lot of activity. Jim Richhiuti - Needham & Company: Just getting back to Samsung, would you expect to be in active talks with them in the early part of next year, or do you see this agreement actually being hashed out maybe closer to the June timeframe?

We are in contact with all of our customers all the time, and the process is one that you are very aware of in negotiating, and we are going to do our best to get everything done in a timely manner, but negotiations are negotiations, and we will see how they go. Jim Richhiuti - Needham & Company: Anything you can say about maybe an update on where you stand with green phosphorescent material, what the status might be of that looking out to next year?

We are still in manufacturing test and qualification with a number of different customers to get green phosphorescent into products, Jim.

Your next question comes from the line of Yair Reiner from Oppenheimer.

Your commercial chemical sales were up pretty significantly quarter-on-quarter. Can we see that as a decent proxy for the type of momentum we should see in royalties next quarter? In other words, shouldn't the commercial chemicals that you sold this quarter translate into royalties and licenses next quarter?

I mean, logically it makes sense that if you sell more material you should have more products. I think it makes some sense, it would depend whether they are building inventory or royalties based upon what they ship, as opposed to what they actually make. So it makes sense that if you sell more materials you should see a larger royalty, but I can't say for sure, because I have not seen a royalty report yet.

Do you have any sense of how Samsung's inventories may have changed from Q2 to Q3, if at all?

That we really have no visibility into, to be perfectly honest.

Any progress report on blue?

We have nothing yet to announce. I will tell you that the team is working extremely hard on blue. They're making some very nice progress. We have some announcements to make, we certainly will.

One final question from me. It looks like LG Display and AUO are becoming recommitted to a certain degree to OLED now. Do you think they're going to initially follow Samsung's past and focus on handheld devices, or do you think they are going to, from the first, focus more on medium and large area displays?

Well, LG has talked about having a 15-inch TV this year. So, these from their public announcements, it looks like they are moving toward the TV market. It is not yet clear from their public announcements what direction AU Optronics is moving.

Then just to be clear, LG will be using your materials for the red?

Yes. As Steve said, there are a number of customers that are qualifying our green material.

Your next question comes from the line of Andrew Abrams from Avian Securities.

I was wondering if you could just kind of work through a little bit of this whole Samsung process improvement. I know that you guys are not there watching it, so it's hard to get real perspective, but does this look like this will be a trend going forward, or is there a finite point that they reach where you start to get very, very small improvement in the chemical usage? Is this something that you guys can shed a little light on?

In the past the Samsung line was used for a number of different purposes, and as they were scaling up the manufacturing process, the line would be turned on and off and they would do development work in the same line and they do a number of different things, and when you start and stop the line, because these materials are loaded into sources, you end up wasting a lot of material in the starting and stopping process. During this year, they have focused on keeping the line running as much as possible, making product, and also looking at efficiencies in their source design and utilization to use as little material and as little of anything as possible in a device to try to maximize the profit. Once you get to a certain point there is very little room for improvement, unless you somehow redesign. We believe that right now, the manufacturing is running most of the time, and we think we are at a stable rate of material utilization in that line today.

As that line increases, their utilization rate should move along or your chemical sales should move along roughly with that production line?

That's what we believe, Andy.

(Operator Instructions) Your next question comes from Jim Ricchiuti from Needham and Company.

I was just wondering, just given the bullish forecast out there in the market for OLEDs, if you can comment on the direction Kyocera has taken here, pulling back from the market, and admittedly they have been pretty quiet, but I was just wondering if you can provide a little perspective on that?

They have been very quiet and we have not seen much activity. It appears today that if you look at Korea and Taiwan, that is the areas that is becoming, particularly Korea, a area that OLED technology seems to really be getting traction. In Japan, I think the economic downturn that occurred impacted a lot of what they are doing, and it has really hurt a lot of the companies there. To some extent Korea was insulated from it. In that the conversion rate of the won, still made their products fairly cheap, so they have been doing pretty well through this mess. They've have had some issues, obviously, but it appears to us that the large guys, LG, Samsung, AUO, are now really starting to focus on new technologies and trying to be the leaders in it. So we are hearing clearly positive and bullish reports the same that you are reading for OLEDs by those guys, specifically, and there are a few others. Jim Ricchiuti - Needham & Company: Sid, just a quick question on the operating expense; I was a little surprised to see the R&D come down in Q3 and your G&A also came down a little bit. I'm just wondering how we should think about those two line items going forward?

There were some non-cash things in there that go up and down as some things that actually are based upon stock price for accruals and things like that. I expect it to be relatively constant at this point. In 2008, we really hired a number of folks and staffed it up. So at this point going forward I think if you look at those numbers, and assume that they are going to be fairly steady. Jim Ricchiuti - Needham & Company: Then the final question from me. Just looking at Q4, can you give us a sense at what your contract research revenue might look like from the US government? Maybe you can comment if you are seeing more activity coming from the US government relative to lighting, or display, just to give us some feel as to how that is playing out?

I would expect this, as we said in the past, we do have a number of additional contracts compared to last year. The number specifically, I don't believe it will grow, but it will be in this ballpark. There have been a number of programs that have been either extended or we have been granted some additional dollars for them. There were a number of programs that we have bid on that we'll probably find out, specifically in the lighting area over the next probably three to six months, it's a pretty long process that it goes through. The area of OLED for lighting is really a hot bed at the DoE, for solid state lighting and moving ahead with this technology and trying to focus on different proposals in specific areas to continue the development. So, we see that as an area that over the next few years is going to get more and more traction. Jim Ricchiuti - Needham & Company: Is there anything you said you pursued in terms of stimulus funding related to the OLED lighting applications?

It is interesting. The stimulus funding dollars, some of it is flowing into the DoE, and there have been a number of requests for proposals. Some of the other stimulus dollars were as they called shoved already. Folks had stuff ready to go, everything ready to go. Building plans or whatever it is. Construction plans and permits and everything. All they needed was money. So those are the projects, because they were really looking to create jobs quickly, are the ones that got a lot of the stimulus money. There is stimulus money that is flowing into the DoE and we have responded with proposals to them, but it appears that the actual letting of those or granting of those is a lot slower process than some of the other things. Jim Ricchiuti - Needham & Company: So if some of those come into fruition, it's really looking more like next year?

Yes.

Your next question comes from the line [Jonathan Skills from Davenport].

Can you talk about what the latest monthly shipment rate is from Samsung or what you've heard from press accounts?

The published reports that we have seen are approximately two million displays a month. We read those the same way we get them from DisplaySearch and other places. They are the latest numbers than we have heard.

With respect to LG, they are currently a development customer, and do you still expect them to convert to being a commercial customer some time next year?

Yes. We expect them to use our technology and to use our materials in their commercial products.

Your current agreement with them is up at the end of this year, right?

Yes. It was extended, and as with all customers, we continually work with them and fully expect to continue to work with them.

Then can you talk a little bit maybe about what you've heard as far as the ASP for AMOLED display at Samsung SMD relative to an LCD display?

It's difficult to get specifics, because it's based obviously upon size. I can tell you that the latest DisplaySearch estimates I think for the first six months of this year was, AMOLED displays averaged approximately $17, and I believe that the LCD displays were anywhere, depending on the quality of the display, that I can recall, was in $12 to $13 range for comparable displays, but this is all out of DisplaySearch.

As far as cash burn, can you talk about maybe how we should think about that number in 2010 relative to 2009?

Obviously, we would like to enter into a number of additional agreements where we get upfront fees and we continue to sell the materials, so as our topline grows, our cash utilization will go down. When you look at 2008 versus 2009, we did receive a number of upfront fees, such as the Kyocera one and some others. It is difficult to predict, but I don't think cash is an issue for us. We've got $66 million worth of cash in the bank. I would expect as the revenues grow, our cash needed in the quarter, even actually if you look at this third quarter and fourth quarter, should continue to go down versus where it was, but it is all obviously dependant upon revenue.

If LG were to convert to a commercial customer in 2010, would there be some upfront fee associated with that?

Our standard license agreements are upfront fees and running royalties, so if that happens, we would think we would have it.

There are no further questions at this time.

Again, we'd like to thank you all very much for participating. As a lot of you do, we are available, please feel free to give me or Steve a call and with that, again, thank you for participating and you all have a good night.

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