Good day and welcome to the Universal Display Corporation second quarter 2011 earnings call. At this time, I'd 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, August 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 to everyone listening on today's call and webcast. It's good to be able to talk about the growing business in this current economic environment. This afternoon, I will start with a quick overview of our second quarter financial results, discuss highlights from the quarter and update everyone of our plans to expand usage of our proprietary OLED technologies and 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. Second quarter revenues were an all-time record, $11.3 million, up 33% for the second quarter a year ago. The increase was driven by both expanded commercial and strong developmental sales. In addition, we reduced the operating loss and were operating cash flow positive for the quarter. Our balance sheet remains solid. We also reported a significant improvement in net income and earnings per share, primarily attributable to the accounting treatment of a stock warrant liability. So as we discounted the stock warrant liability which inflated the loss, it's only fair to do the same when it swings in the other direction. So we continue to focus on our operating income. Steve will go through the details shortly. Nevertheless, after the influence of the stock warrant liability, these results clearly illustrate that we achieved strong year-over-year revenue growth, a further progress to our operating profitability and sustained momentum throughout our business. Our results are the product of our strong technology portfolio and proprietary materials and a vibrant, fast-growing margin. Leading consumer electronics and lighting manufacturers such as Samsung and LG in Korea, AUO in Taiwan and Konica Minolta in Japan are spearheading the evolution in the display and lighting markets. Universal Display is helping these and many other companies create a whole…

Thank you, Steve, and again thank you everyone for joining us on the call today. I'll be reviewing the financial results for the second quarter as well as sharing some insights from the quarter, after which we will open the call up to take your questions. Revenues for the second quarter totaled $11.3 million, a 33% increase compared to revenues of $8.4 million for the second quarter of 2010. Revenues for this past quarter are the best quarterly revenues in the company's history. And following the expected effects of seasonality on first quarter revenues, we also resumed our sequential revenue growth. Keep in mind that in comparing revenues year-over-year, from an accounting perspective, we've recognized $2.1 million in non-refundable payments as revenue in the second quarter of last year. Commercial revenue was $5.3 million for the second quarter, an increase of 170% compared to the commercial revenues of $ 2 million for the second quarter of 2010. The increase is primarily due to increased commercial chemical and royalty revenues mainly based on chemicals shipped and royalties received under patent licensing for Samsung SMD. As we have noted in the past, chemical revenues are recognized when our materials are purchased by OLED manufacturers who tend to buy in anticipation of the current or near-term production requirements. On the other hand, royalty revenue is recognized as products using our materials and technologies are sold by manufacturers. We received royalty reports a certain period for certain period after the quarter-end. Therefore, royalty revenue lags material purchases by approximately one quarter. Developmental revenue was $5.9 million for the second quarter, a 9% decrease compared to development revenue of $6.5 million for the second quarter of 2010. The decrease was primarily due to $2.1 million in non-refundable payments included in revenue for the second quarter…

(Operator Instructions) We'll take our first question from Darice Liu from Brigantine Advisors.

My first question deals with your green. Can you provide an update on the status of your green color? Is it in commercial production yet?

Not yet. No company has yet announced that they're using green in a commercial product, although about half of our development revenues this quarter were from the sales of green-emitter and host.

If I could deconstruct your answer for one minute, no one has announced it, but half of your developmental revenues is actually from the green emitter? So even if someone hasn't announced and because you're still in negotiations with your top customers, any use of green, will that remain within the developmental line?

I think you're probably reading too much into it. We would not be the ones to announce it in a product. That will be the customer.

Can you talk about how many customers are still evaluating your green color?

Certainly more than 10.

Do you have any timeline in terms of when we'll see some commercial product with green?

No, we really have to wait and see how the customers release products.

Most of these evaluations at the last inning, are we still in early innings of some of these potential customers?

They're all over the ballpark.

Moving along, in terms of your revenues, I was wondering if the mechanics of your royalty payment would change if the materials they use of yours are only going to be used for the backlighting display. The reason why I asked this is about an hour or so ago, Nikkei reported LG Display will be investing about JPY220 billion or US$2.83 billion for an 8.5-G OLED sub. And from what I've heard, the initial OLED TVs will be more white OLED on LCD.

Well, I would say first of all that what you heard on the Nikkei is certainly good news for the OLED industry. But we really couldn't speak to what any specific company will be doing.

Well, I guess just in general?

We negotiate with each individual company, trying to get an appropriate value for the use of our technology.

So it doesn't really matter what the end product is or where exactly your materials are placed in?

Well, all of those things are things that we would take into account when we discuss the relationships with the customers.

Can you provide an update on what your game plan is for your encapsulation technology? Have you decided what you're going to do with that? Are you going to outsource that? And if so, have your selected an equipment OEM?

We're actually currently evaluating various options. So we don't have a game plan we can present yet. We're very excited about that technology, because it addresses a significant market need for glass-based OLEDs and multiple OLEDs as well as a number of other thin-film devices.

Do you foresee your product actually being in the market in the next six to nine months? Or are we looking further out?

Probably not.

And our next question is from Min Park with Goldman Sachs.

First, just going back to the color green, just wondering if you could tell us what would trigger your recognition of commercial green chemical sales. Is it predicated on a public announcement by an OEM or is your awareness that is going into commercial product enough for you to recognize the commercial sale?

The customer will notify us in their purchase order, because they have the requirement in the contract to notify us whether it's going to commercial products or whether it's still developmental. So when we get a notification from the customer, that order is in a commercial product, which then will be covered by our license agreement. If we're talking about Samsung, we would then categorizes characterize it as commercial chemicals.

Is there any chance that some of the developmental chemicals that you recognize this quarter would be used for commercial products in the future quarters? Or would they just tell you, we're actually going to use this for commercial products and not for test lines?

The second quarter would all be developmental. It literally occurs when they place the purchase order. That will determine when and what category it goes in.

And then just given what appears to be a little bit more high (nutrimentous) for a large-screen OLED, could you just talk about how we should think about materials pricing and your recognition of revenue as you start putting materials into larger form factor displays?

Our material pricing is based upon volume of grams of material or kilograms of material that you purchase. It does not have to do with the size of the product that it's going into. But we do structure our material sales with breakpoints based upon larger volumes of material purchases.

Could you just help us understand why R&D was down so much down quarter-over-quarter and if this is the new normal level we should be look at going forward?

There is a few things that impacted. I think this level plus a little bit is what we should look at going forward.

Our next question comes from Jed Dorsheimer with Canaccord.

Nice boost in the commercial royalties and chemicals. Why though in terms of the mechanics did deferred revenue come down a little bit?

Deferred revenue is a number of different pieces. Some of it is customers where we have done some work that they get credit if and when they sign a license agreement. So it stays in there. Some of the deferred revenue is technology development contracts that we have with some customers that we do the work over a period of time and we just amortize that as we do the work. So it's fairly stable at this point. We had a number of customers that we've done some work for. And then whey enter a license agreement, they will get credit for some of these payments. So at that time, it would be amortized.

And then maybe just, Steve or Sid, at a higher level, clearly LG's decision to move to TVs is a nice boon for the OLED industry in general and certainly you guys. But in the near term here, I think a lot of people were looking at LG coming in as sort of these potential second sources in the mobile market to maybe draw some of the larger handset and tablet type players in the marketplace. So right now, Samsung has been operating at 100% capacity. They've added a significant amount of capacity here in terms of the first phase of the 5.5. Does it concern you at all that or do you think that it pushes things out in terms of their ramp of the OLED market? You don't have the potential for the Apple's or some of the other guys that need and require second sources to come into the marketplace until we start to see TVs?

I think there may be some other people that might step up to the plate to provide additional mobile opportunities, because there are other people in Taiwan, for example, that are looking at that space. I think the LG's concentration on TVs is a real positive for the OLED industry. And my recollection of the announcement was they weren't going to make any further investments in mobile space, because they were going to concentrate on TVs. I think overall we'd like to see more investment by everybody quicker.

As you look at from a milestone perspective, should we be focused on sort of AUO and Chi Mei in terms of providing those second-source opportunities? I know you don't want to talk on specific customers. But in general, are those the Taiwanese players that we should be looking at?

Those are the Taiwanese players that we're working with in the market. I can't speak to their specific product plans. But those are the Taiwanese players in the market.

And we'll take our next question from John Bright with Avondale Partners.

I'm going to go back to the green question. I think in either in a response to a question or in your prepared remarks, you talked about half the development revenue being associated with the green. Has there been any relationship in the past between revenues in the development segment moving into commercial and the timeframe between them that might applicable to green?

We always talk about developmental revenues being first phase, before you move into commercial production. And we've talked about LG in the past that it's moving into commercial. Timeframe, though, is very difficult for us to calculate. We have said for the past year that we have a number of customers evaluating green material and it really depends upon their production schedule. So it's difficult to say how quickly things will move from one category to the other, because it really is based upon decisions of the customers.

Is it fair to say that there is a strong leading indicator of potential commercial revenue coming from green?

Yes, Absolutely.

Next question is on the OpEx. It looks like you're expecting the patent line item to be at or above the remaining of the year. Yet, on the other items, you expect it effectively to be flat for the remainder of the year. Is that right?

Yes, I think fairly flat, just may some growth, but not significant growth. I think we talked about maybe 5% growth in some of the areas in the beginning of the year. But the patent cost is the one that clearly is going to accelerate.

Order of magnitude on what we could expect in acceleration if it's $2 million today, are we talking about doubling or are we talking about 15%? What are we talking about?

Well, I hope it's not doubling.

The way a lot of these proceedings operate is there will be a big burst of energy and then you won't do anything for a while. So it really depends on the specific timing of specific proceedings. But generally, we're getting more of these administrative or patent oppositions. And so the amount of patent expenses is going to be higher. But if you look at it year-to-year, that's probably a better indicator.

Lastly, 10% customers in the quarter?

It will be Samsung, and I think it'll be LG.

We'll next question from Hendi Susanto with Gabelli & Company. Hendi Susanto - Gabelli & Company: You said that 50% of developmental revenues were green-emitter materials. How about the other half?

There are other materials, which would be red and some other materials, light blues and blue that we sample. So it can be any other material that we sell. And we sell a lot of materials on developmental customers, red material that are not in production yet. So it's all other materials that we have. Hendi Susanto - Gabelli & Company: Did you disclose what percentage of revenue comes from Samsung and LG Display respectively in the second quarter of 2011?

I don't believe we have the specific number, but I'll check. Hendi Susanto - Gabelli & Company: How do you see your order trends in the month of July and the first week of August?

We really don't talk about that on these calls. Since we don't really give guidance, we don't discuss the quarter. We're not really going to talk about Q2. I apologize, but that's just been our policy. Hendi Susanto - Gabelli & Company: Do you have updates on the timing and your plan to build a secondary manufacturing facility in U.S. with PPG?

I think we talked about it in last calls with PPG that we are working with PPG to put another facility in place, and we're still working with them. I don't think we have any specific dates when that will occur. But we're making sure that as we believe the demand goes up that we can meet all the demands of our customers. So we're continuing to work very closely with them on that. But I don't have any specific date.

We'll take our next question from Jim Ricchiuti with Needham & Company. Jim Ricchiuti - Needham & Company: Just a follow-up on the questions on the green phosphorous material. You talked about the fact that you're working with more than 10 partners in this area. Can you give us a sense as to the development revenue concentration with two or three of these customers or is it fairly well dispersed?

It's more concentrated than that. It's more concentrated than the first. Jim Ricchiuti - Needham & Company: Steve, I know you're not going to talk about specific customers. But just with respect to your conversations with your various partners, individual licensees, are the discussions that you're having with these parties with respect to their timetable, the capacity expansion, consistent with the published accounts? Or are these reports that we see now somewhat optimistic?

I wish I could answer that question, Jim. But I can't. Jim Ricchiuti - Needham & Company: Switching gears for a second, is it going to have an impact on your business. Just on the development revenue side, the government-funded revenue, do you guys see any change there at all, probably not in near term, but what are you thinking along those lines?

We don't see anything in the near term. We don't have a lot of visibility. I know what we have in-house for the next 12 to 18 months, and these programs that we're part of normally last that long. So it's hard for us to say we see any changes at this time.

We've not gotten any indication in any of our programs or any type of problem.

Our next question comes from Andy Abrams with Avian Securities.

Inventory levels, are you still holding as much as you're going to need for the next 12 months?

We keep a lot of inventory in hand, because we want to make sure that our customers know that anytime their business ramps up, we're ready to meet their needs. So we keep of plenty of emitters on hand.

Blue, have you gotten passed the kind of conceptual stage with customers? Are they qualifying that technology. I know it takes a slightly different setup for the customer. Is there anybody who is committed to it at this point or at least from the developmental side committed to it?

I think I would say there is lot of people that are interested in it more than anybody that's committed to it.

What about other items in the stack. Are you guys actively looking to participate directly in other parts of the stack or we're working more closely with those who provide the other layers to enhance the way our emitters work.

We've been doing a lot of more work on the host side recently as well as working even more closely with some of the other materials companies both on the host and the transporter side. We answered your question, because we think the materials business of this industry is a very important piece. And so we want to help grow it as large as we can and we want to get as much of it as we can.

What's the status Moser Baer on the lighting development project?

We are continuing to work on the government contract.

Have they actually produced a facility yet or are we still in the kind of developmental stage?

They have the facility up-to-date in New York and they are in the process of designing and developing the equipment and putting it together.

Lastly, can you give us a little guidance on the way we should be looking at the commercial revenue breakdown between materials and royalty? Is there any way you can give us a little bit of guidance there?

It's really difficult, maybe because it's difficult to predict the timing of material purchases by our customers. You can look at some of the market projections for the second quarter to look at whether it's growing or not growing in the third quarter, but it's really difficult for us to give any guidance on that level.

If let's say Samsung decides to come out with a tablet in fourth quarter or first quarter of next year, the impact that you guys see would be strictly on a per square meter basis material side before we get to the royalty side? The royalty side you'd see later, but are we thinking just along those lines? Is there anyway that they could reduce the amount of material on a larger display than what they are using now?

I think that they're always looking to be as efficient as possible. But in theory, you are correct. Look at the more square inches or square meters that are produced, the more material they're going to use. I don't think there is anything that says if you go from a four-inch diagonal to a 10-inch diagonal, you get x efficiency in the material, but they are constantly working on reducing their material utilization and their deposition process.

And from your perspective, and this is probably looking more at LG than anybody else, doing large-size displays outside of the mask method, have you guys been working closely with anyone in a specific area for doing the deposition on a larger basis rather than masking and overlapping things like that?

We work with almost everybody in this space and try to make sure that our materials would perform to whatever manufacturing methodology there.

And you see no limitation using the mask method for larger displays or at least you haven't so far?

That's always been an issue how far can you extend fine metal mask. When we first started in this industry, they said you couldn't ge the Gen 2, and now you're using a Gen 5.5 facility. So there may not be a limit of how far you can go with the mask method, but there are other methods as well that people are working on and we're working with them as well to ensure their materials and technology can fit into various manufacturing platforms.

And we have another question which comes from (inaudible) with Cowan & Company.

Most of my questions has already been asked and answered. Just a few housekeeping things. Could you give us a little bit more detailed breakdown within commercial and development how much were chemicals in each case?

On the development side, it's all chemicals. On development revenue, while you got government contracts, which were about $1.3 million, and technology development revenue was less than $0.5 million. So that's the difference on developmental side. And on the commercial side, we really don't break it down, but you can almost back into the SMD numbers and the fact that we tell you how much factors were withholding we're tuck it away.

What were CapEx and depreciation in the quarter?

I have to look at the cash flow statement. I don't think it was significant.

Within development or commercial for that matter, can you give us a sense of how much contribution lighting is making at this stage to revenue, just roughly?

It is still not significant. I mean the bulk of our revenues are related to display.

And we have no further questions at this point. I'd like to turn the conference back over to Steve Abramson for any additional and closing remarks.

I would like to thank everybody for all their support. And as usual, if anybody has any questions, please call Sidney or myself. Thank you very much.

Once again, this does conclude today's conference call. We thank you all for your participation.