Good day, and welcome to the Universal Display Corporation's Third Quarter 2012 Earnings Conference Call. 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, 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 the 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, 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 7, 2012. 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, 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. Steve?

Thank you, Joe and welcome to everyone listening today. For the third quarter, we have reported revenues of $12.5 million and a loss of $5.5 million or $0.12 per diluted share. Results were obviously disappointing. We believe revenue and earnings in the quarter represent a temporary slowdown created primarily by global economic challenges and delays in our customers' commercial rents. Over the long-term, we are confident than the growth prospects for the OLED industry in general and Universal Display Corporation more specifically remains very strong and favorable. In addition, as most of you are aware, the third quarter results did not include any of our semi-annual license payments from Samsung Display Corp, which would equate to $7.5 million per quarter have recognized equally throughout the year. We will receive another $15 million license payment from Samsung in the fourth quarter. The OLED industry continues to excite manufacturers and consumers always with its promise of improved performance and lower power consumption. For instance, Samsung recently announced that they have sold over 30 million Galaxy S3 smartphones. However, in this quarter, we saw announcements delay OLED TVs and OLEDs on plastic and products using our green phosphorescent emitter and host materials have not yet ramped. Consequently, our revenues in the third quarter were consistent with the first quarter. AMOLEDs continued to project strong OLED display market growth. According to our October article in Display-Central more than 10 new AMOLEDs fabs will be installed or updated in the next three years. For example, Samsung and LG are both building Gen-8 AMOLED lines. DisplaySearch reported that OLED display revenue was approximately $3.5 billion in 2011. Their recently revived estimates are about $6.5 billion in 2012. They project $9.5 billion in 2013 as new capacity comes online and estimates a $34 billion OLED display market…

Thank you, Steve, and again thank you everyone for joining our call today. Revenues for the third quarter of 2012 were $12.5 million compared to third quarter of 2011 revenues of $21.8 million. A quick review of the third quarter compared to last year can be summarized in four parts. One, overall royalty and license fee has decreased to 396,000 from $4.6 million in Q3 2011 mainly as a result of our new license agreement we entered into with Samsung Display Corporation, under which we do not report any license fees in this quarter. Two, our host revenue was down by approximately $5.9 million compared to Q3 2011. Green emitter revenue was down by $2 million from Q3 2011. And on the positive side, our red emitter revenue was up by approximately $3.3 million compared to Q3 2011 and where we saw a volume increase in excess of 89%. The results in the third quarter of this year do not include the recognition of any license fees under our license agreement with Samsung Display Corporation under which SEC it's obligated to make payments to the company of $15 million in each of the second and fourth quarters of this year. Accordingly how the company recognizes payment on a pro rata quarterly basis over the year, it would have resulted in additional $7.5 million in royalty and license fees in the third quarter of this year. We will receive another $15 million license payment from Samsung in the fourth quarter. In the third quarter 2012, revenues from material sales were $11 million compared to $15.4 million for the third quarter of 2011. Material sales in the third quarter of 2012 include the sale of red, green, yellow, and light blue phosphorous emitters as well as green and yellow host material. The…

Yes, thank you. (Operator Instructions) And we’ll begin with Brian Lee with Goldman Sachs. Brian Lee – Goldman Sachs: Question, I guess first off, can you help me sort of think through the inventory build last quarter and also little bit this quarter. I guess I’m just I’m struggling with why you have built inventory and if there was any sort of unexpected changes with respect to your large customer giving your visibility that they were going take some of that inventory off your hands and that having been delayed for whatever reason?

Well, we did we – as we said we built inventory because we expected green and host materials to be adapted in the second half of this year. And we built some additional inventory in this quarter expecting that to occur. We believe that it will occur but we don’t believe that will occur probably until early next year. We expect the fourth quarter to look somewhat like the third quarter based upon our guidance of 80 to 82. It’s really is a day-to-day we’re going through quite a bit of customer evaluation over the past few years with our customer and we still expect them to purchase green emitters and then host materials from us. I think it’s just the timing issue. Brian Lee – Goldman Sachs: Okay and maybe just to begin to that a little bit more what were some of the indications that your were basing your expectations of second half ramp that now sound like they are more like early 2013 ramp?

Brian, we’re in fairly constant communication with our customers and we operate off on the best information that we have from them at that time. And we are constantly updating that information. The ramp was continuing to be pushed out fairly slowly. Brian Lee – Goldman Sachs: Okay, just two quick ones, two last quick ones from me and I’ll jump back in the queue. Any sense for how many products I know the visibility seems like it’s moving around here on you, but how many products do you think could be supplying green emitters and hosts for next year for your largest customers – for your largest customer?

To be honest, the products that it goes into is up to our customer. I mean we would expect once they adopted to adopted slowly and then scale up to more and more of their production. But specific products we really can’t – we don’t really know to be honest.

Okay. And we’ll move to our next question from Andrew Abrams with Avian Securities. Andrew Abrams – Avian Securities: Question about red being roughly flat in the quarter, if I understood that correctly. And Samsung’s volumes have been particularly strong on a unit basis is there an inventory issue do you believe where Samsung had built inventory of red and was not matching up their red purchases with their unit volumes or is there some other factor there?

Well, its interesting DisplaySearch the second and third quarter and the fourth quarter pretty flat for mobile devices. So, their purchases really are on by weekly or a quarterly basis and they may have purchased a little bit more at the end of one quarter. We literally shipped as we said in 24 hours. So, there could have been some purchases in Q2, at the end of Q2 that would have normally fallen into Q3, but I don’t believe that there is any specific inventory build. I think it matches what DisplaySearch is looking at the market and what their production quantity is. Andrew Abrams – Avian Securities: You mean on a unit basis on an overall?

On an overall dollar basis they literally have Q2, Q3 and Q4 fairly flat. Andrew Abrams – Avian Securities: Got it. And in terms of Samsung’s minimums with you based on your new guidance would you say that Samsung is still going to meet those kind of set minimums and obviously do the increment against that for next year?

It’s not clear whether they will meet it but they do have the ability to roll them over into next year.

We are really looking at it day to day in terms of purchases.

Alright. And our next question will come from Darice Liu with National Securities. Darice Liu – National Securities: Good afternoon. So just following up on the prior question on materials based on your customer’s revised forecast and what you’re planning for capacity and as well as product roll out. Can you provide some color on what type of material sales trajectory you still be expecting in the coming quarters notably from the host side which has been relatively flat for a few quarters now?

Well, as we said we expect the fourth quarter right now to look like the third quarter. We do expect the market to grow by about 50% as Steve said next year and we would expect our material sales particularly red emitters obviously to follow out. But as green and green host gets put into commercial production those will increase obviously faster than just the market does because we haven’t sold very much this year. But we do – we are in constant contact as Steve said with our customer and we are – we do with the best we can with the information that we get. Darice Liu – National Securities: Have there been any shift in terms of the host market share or is it more of a factor of them deploying the new red materials?

Really it’s not been a shift it’s really been they have not yet red, green phosphorescent.

Okay and we’ll go next to Vishal Shah with Deutsche Bank. Susie Min – Deutsche Bank: Hi, this is Susie Min on behalf of Vishal Shah. I had a question on the inventory and makeup as you’ve said just give a little bit more details, should we think about the makeup of the inventory its the more Q the breakup of your material sale so about 60% of that being red emitter and 30% being a green emitter,. 10% being host as we think about 2013?

Well, we don’t give the breakdown of that but we really built up host inventory and green emitter inventory in anticipation of host and green adoption. And our host volumes are much higher than the emitter volume. So, we have red emitter material in our inventory because we want to make sure that we always have enough, but its predominantly host and green emitters that we have built up inventory in anticipation of them adopting green and green host. Susie Min – Deutsche Bank: Okay great. And then I have just one more question as it relates to the Fujifilm acquisition I know there was that you talked a little back that you weren't interested in getting into sort of the commodity layers, transporters, and holes and stuff. And I was just wondering if you guys had, had time to evaluate the patent portfolio and if that view has changed?

Well, we are looking at if any materials all throughout the stock and so with our existing patent portfolio in the Fujifilm acquisition it does give us some broad freedoms to operate within those layers.

Okay. And we’ll go next to Jed Dorsheimer with Canaccord Genuity. Jed Dorsheimer – Canaccord Genuity: So much for taking my question. I guess just a couple, the first the timing and the miss in sort of the timing delays are push-outs if you will. Can you comment is that primarily a function of the flexible line in the delays the Samsung is experiencing there or is there anything that you were factoring in before that you are expecting that's been shifted in addition to that?

Jed, I think it’s a lot of the things that we have expected have been pushed out, so the green wrap is pushed out, so that’s the green host emitter. TV for both LG and Samsung has pushed out as well as flexible. So, a lot of the emerging growth that we expect in the second half of the year has not materialized, because it’s been pushed out and what we are seeing is a continuation of the red emitter itself. Jed Dorsheimer – Canaccord Genuity: And Steve, how would you sort of weight those three, is it equal on all three in terms of the expectations as you were coming into this year versus the push-outs, is it sort of equally weighted or is any one of those three or two of the three sort of I have greater weighting?

It’s always tough to say, it probably pushed more towards the green. Jed Dorsheimer – Canaccord Genuity: Okay, that’s helpful. And then I was wondering if you can provide a little bit more color on the relationship with Duksan, in particular, on the green host materials. How that will basically flow through the model, if we say that say a gram of whatever the number, let's just call it, a 100 to make the math easy, $100 per gram. Will you receive that $400 from your customer and you will pay Duksan for a portion of the manufacturing that material, so that the COGS would be higher on that product or will you receive say $10 or $20 of that 100 in terms of revenues that the margins will be commensurate with the rest of your material sales?

We are selling – we are continuing to sell the material. Duksan is simply taking the place of one of the manufacturers in the manufacturing sequence. Frankly, I do not expected there to be an additional cost from that process.

Okay. And we’ll go next to Rob Stone with Cowen and Company. Rob Stone – Cowen and Company: Hi. I wanted to follow up on Duksan a little bit too you mentioned that initially you are going to be doing this finishing step. Can you provide anymore color on where you and they would like to go with that relationship?

Rob, we are having those conversations. We do realize that as we grow into a global organization and Korea being such a key element in the OLED industry, so have a more localized presence in Korea is important and we are having those conversations. Rob Stone – Cowen and Company: Do you find just also with issues either on one side of exclusivity in current part to your supply chain or strong indication from customers about wanting to do first thing on things?

No, we have really not seen those issues as of now. Rob Stone – Cowen and Company: Okay. And then you said – in your prepared remarks, you said something about the Samsung agreement having volume driven price breaks, but it wasn’t clear exactly whether that was an impact in Q3 or a prospective impact in Q4 or could you just go over that please?

It had some impact in Q3 in terms of the price program as they reach certain thresholds and we would see a little bit more in Q4. But pretty much they are – I believe that they are at threshold probably for what we expect them to buy for the fourth quarter of this year. So, I don’t expect to see it, but I would have seen throughout this year.

And we’ll move next to Jim Ricchiuti with Needham & Company. Jim Ricchiuti – Needham & Company: Yes. Hi thanks. Question regarding the license payment from Samsung, I’m wondering at what point you might be able to give us some guidance as we look out to 2013, is the plan to talk about that after you report Q4?

I think we will talk about that when we report Q4 or when we report Q1. We’re going through that right now we are trying to what specifically what we will be able to say and when we can say it. Jim Ricchiuti – Needham & Company: Okay. But, Sid if we think about that it’s still probably helpful for us to just think about in terms of what the current market forecasts are for the OLED market next year?

I mean they are fixed. Jim Ricchiuti – Needham & Company: Yeah.

So it doesn’t really matter what the OLED market forecasts are. Their payment is a fixed amount. Jim Ricchiuti – Needham & Company: What is in that fixed amount baked in to the expectations of the market wasn’t that their structure initially?

It’s basically Jim, the expectations when we negotiated the deal. Jim Ricchiuti – Needham & Company: Right.

How we’ve fixed them.

That’s correct. Jim Ricchiuti – Needham & Company: And one other question I’ll jump back in the queue. I was wondering if you can say whether there was any meaningful legal expense associated with the IP litigation that has now been terminated with the time in the quarter just in a sense where that expense may go away in the current quarter?

Oh, we are no longer paying (indiscernible).

It was not a significant amount in the quarterly patent legal costs. The bulk of the patent legal costs are applications and obtaining patent as opposed to litigation.

And we’re going next to Craig Irwin with Wedbush Securities. Craig Irwin – Wedbush Securities: Good evening gentlemen. Can you talk a little bit about the linearity of demand for your emitter during the quarter?

Can you repeat that that didn’t come through Craig? Craig Irwin – Wedbush Securities: Thanks. So, can you talk a little bit about the linearity of demand for your emitter and host materials during the quarter?

It is literally if we get orders each month as we said the red emitter material in Q2 and Q3 were pretty much the same. And we get literally ship as we get orders it just depends when we get it. So, it is difficult for us to predict even though we do get some estimates from the customer, it’s difficult for us to predict exactly when things will occur. Craig Irwin – Wedbush Securities: Okay. And then my follow-up question relates to one of your previous comments in this call. You seem to suggest that Samsung can roll their minimum purchase requirements from one quarter to another. Could you clarify for us whether or not they can actually roll their minimum purchase requirements from one fiscal year to another or if this is something that maybe anniversary set a specific date of the agreement or had another predetermined rate?

They do not have quarterly minimums they have an annual minimum that they purchase from us and they can be rolled into subsequent year if they don’t meet that minimum.

And we’ll go next to Hendi Susanto with Gabelli & Company. Hendi Susanto – Gabelli & Company: Good evening Sid and Steve. I want to understand what drives the push out and what will determine the timing of the ramp up on the customer side. I am considering that AMOLED display manufacturers are moving into different side of AMOLED platforms let’s say every 6 to 12 months, is there any indication that this type of transitions was the reason or the one that will determine the timing of the ramp up. Furthermore, are there other variables that we just think of when it comes to seeing the ramp up early next year?

I’m not sure that we know specifically that is based upon specific changes out in product structures. We expect them to use our green and green host materials as they design devices that need to be more power efficient and it made to high end to what you said. I don’t think there is anything else that we can look at it really is capacity-driven and the product that they are making and what the requirements of those specific products are. And we believe as they add functionality and make new devices that they are going need to be more power efficient, because they are putting more and more functionality into the devices. Hendi Susanto – Gabelli & Company: Okay. My follow-up Sid, you mentioned that you can draw out the minimum annual purchase into next year. How will that affect the pricing?

Their pricing is based upon purchase quantities in any given year and then its reception in the subsequent year.

And we’ll go next to John Bright with Avondale Partners. John Bright – Avondale Partners: Thank you. Good afternoon. Follow-up on that question quickly, Sid can if you roll it over to next year, can they then roll it over again the same amount or an increasing amount of the following year for the minimum?

Yeah. John Bright – Avondale Partners: Okay. And to Sid, Steve I think to you a question regarding the license pay-out next year, what was the market growth forecast for calendar '13, when you negotiated the deal for '13?

Hello, John. On top of my head, I did not remember that. John Bright – Avondale Partners: Okay. And then Sid how much of the miss was the related or how much did you have baked into this quarter for TVs, materials for TVs?

We don’t really break it down in terms of TVs. When we do our estimates for the quarter, we look at material purchases what we expect. There is clearly some that we would have expected to be TVs, but TV specifics I mean the green and green host materials and TVs really were the differences in our ranges for the year, and it really was how quickly some of these were adopted and then it ends up that these have been each pushed out. John Bright – Avondale Partners: Final question, on the R&D expense, you mentioned $1.5 million of expenses one for PP&G and another 500,000. Is that recurring?

That they as we continue to develop new materials, I expect those cost to be reoccurring cost.

Okay. And we’ll go next to Alex Gauna with JMP Securities. Alex Gauna – JMP Securities: So much for taking my question, I was wondering is there a connection between the TV adoption in the green meaning that those are one in the same in terms of when we start to see the ramp up? Thank you.

We are actually not really we are looking for green adoption on the mobile products and then TV adoption is a different set. Alex Gauna – JMP Securities: Is my understanding some of those your customers are sampling flexible display now, I wonder if you can comment on that and how that plays in, again is there a connection between the green and the flexible display as well and how confident you are in the outlook on that 2013? Thank you.

We are selling – obviously, we are selling red and green materials to a number of customers who are using them in their various products. And we do believe that there is a trend to go from red through to green and that will become a massive used product. Alex Gauna – JMP Securities: And then with regard to the flexible display is that in deep sampling now at the end market customers from your customers?

You have to talk to our customers for that. Alex Gauna – JMP Securities: Okay, thank you.

Next we’ll go to Jiwon Lee with Sidoti & Company. Jiwon Lee – Sidoti & Company: Yes, hi, thanks. A quick question back on the Duksan side, whatever Duksan sells as part of the agreement that would be part of the minimum purchasing with your biggest customer correct?

Duksan is simply doing, performing some manufacturing services for us in connection with the fabrication of one of our materials. So, that’s not related to the minimum purchase of our largest customer. Jiwon Lee – Sidoti & Company: Okay. Well, that's helpful. And you alluded to some other efforts with the Duksan, could you elaborate a little bit?

Well, before the question was asked this is just the initial – we talked about this being the initial that was Duksan as the industry grows and as it grows significantly in Korea of – it is our intention to continue our localization efforts in Korea. And we are talking to Duksan about that. Jiwon Lee – Sidoti & Company: Okay, helpful. Thank you.

Next we’ll go to Jagadish Iyer with Piper Jaffray. Jagadish Iyer – Piper Jaffray: Thanks for taking my question. Two questions, first on the – can you give us the puts and takes of the Duksan agreement was PPG given on option to do this and what is the incentive for Duksan to be a part of this, can you elaborate more on that and I have a follow-up please?

We’ll I can’t speak to the former question but to the later question we’re generally viewed in the industry of having key materials and technology essential for the growth of the industry and anybody the partner with us should be able to benefit as this industry moves forward. Jagadish Iyer – Piper Jaffray: Then on the follow-up just a quick one, you talked about the push out by one of your key customers here. I was just wondering why are they not adopting the green emitters for their existing lines which are A1 and A2. What is the challenge and what are they currently using is it still florescent green?

I would imagine they would use florescent green and I don’t think it would be appropriate for me to speculate.

And we’ll go to a follow-up question from Darice Liu with National Securities. Darice Liu – National Securities: Thanks. So, Steve you have mentioned the encapsulation technology, I’m just wondering if you can talk about the revenue opportunities from that technology and if you’re bidding that product with anyone yet?

We are actually in process of developing our business model for that encapsulation technology. So, we’re talking to a number of our partners about how to proceed to commercialize that technology.

And we’ll go to another follow-up from Vishal Shah with Deutsche Bank. Susie Min – Deutsche Bank: Hi, it’s Susie Min again. I just had a quick question on the lighting side, I know couple quarters back you said exposure was about 10% and since then you kind of additional agreement with customers on the lighting side has that changed at all meaningfully?

No, it has been somewhere between 5% and 7% of our material sales pretty much all year. There are number of different customers but they are very small quantities because they are really are just working on very small power lines.

And we’ll go to a follow-up from Hendi Susanto with Gabelli & Company. Hendi Susanto – Gabelli & Company: Hi, Sid and Steve. I want to understand how much material flexibility you have with regard to your inventories. Let’s say if you pile up your likes any inventories and then your customers on later question of your emitter materials let’s say in February or March. Can you use that inventory build that you have or and then also want to Steve that there is any recent inventory write down if some host materials are no longer purchased by customers?

At this point, once the material is designed into a product we do generally understand the life of that ramp, so we don’t think there is an inventory albescence position. Hendi Susanto – Gabelli & Company: Okay, thanks.

And we’ll next go to Rob Stone with Cowen And Company. Rob Stone – Cowen and Company: Just a follow-up on one of your smallest segment technology development was quite a bit higher in the first half any color you can give there?

We have a number of agreements with customers and some of our government programs and they are starting – they are going down a lot of joint development technology, development agreements customers are moving more towards commercialization and on the government side some of those programs are starting to wind down.

And we’ll take our final question from Andrew Abrams with Avian Securities. Andrew Abrams – Avian Securities: Just a follow-up on the Japanese court issue, what’s your next step and what you think the timing would be on getting a final release on this or is that another step back to the Patent Office for their review again?

The patent is valid, now it was remanded not to the trial court to – we haven’t see the whole opinion but generally the way that would work. You remand it back to trial court for proceedings consistent with the appeal, with the appeal courts version or the person on the other side can appeal to the Supreme Court, so we are still talking about a many month process. These opposition proceedings have different levels of proceedings then take a while. The good news is that we did get this trial court issue reversed on appeal, which is very important especially in Japan.

And that concludes our question-and-answer session for today. And that also concludes our conference call. Thank you all for your participation and have a great day.