UniPixel Reports Second Quarter 2012 Results

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THE WOODLANDS, TX--(Marketwire -07/30/12)- UniPixel, Inc. (UNXL), a provider of Performance Engineered Films to the touch screen, flexible printed electronics, lighting and display markets, reported results for the second quarter ended June 30, 2012.

Q2 2012 Operational Highlights

• Introduced a new range of grid patterns and sizes for UniBoss™. Varying grid patterns of ultra-thin conductive elements on film surfaces are laminated together to create resistive touch as well as pro-cap touch sensors, with a passive grid useful for electromagnetic interference (EMI) shielding. Along with UniBoss performance benefits of being flexible and more conductive than ITO, variable grid patterns enable a wider variety of applications in the flexible electronic film market, including large form factor applications and multi-gesture touchpads. This has led to certain reference designs in the third quarter.
  
  
• Fulfilled a number of purchase orders for Diamond Guard™ Hard Coat film submitted by major electronic OEMs, ODMs and film converters that are advancing product designs which take advantage of Diamond Guard's unique characteristics. Subsequent to the quarter, UniPixel achieved production-level qualification for Diamond Guard with its manufacturing and distribution partner, Carestream Tollcoating. With Carestream, UniPixel has established the capacity to support large-scale volume production of more than 100 million square feet per year of Diamond Guard as either a cover glass replacement or protective cover film.
  
  
• Addressing interest from OEMs and ODMs to combine Diamond Guard Hard Coat film with its UniBoss touch sensor to produce a thinner, more cost effective touch screen display, UniPixel produced new functional prototypes to demonstrate that laminating Diamond Guard with UniBoss eliminates the need for protective cover glass or sensor glass. As a combined solution, this offers a much thinner solution than ITO glass and cover glass combination, better than one-fifth the thickness of current touch screen displays on the market and at a competitive cost. The company anticipates UniBoss could be a significant growth driver for Diamond Guard in 2013.
  
  
• Advanced development of UniBoss sensors for use in non-display applications, including a touchless, gesture-based sensor interface and a large form factor interface.
  
  
• Produced functional prototypes with Texas Instruments that integrates TI's touch controllers with UniPixel's UniBoss touch sensor films, which have produced promising data to be analyzed for product production qualification. UniPixel and TI intend to bring to market high-quality touch screen solutions at competitive costs to global OEMs.
  
  
• Submitted four patent applications during the quarter related to the company's Performance Engineered Films, bringing the company's intellectual property portfolio to a total of 54 patent applications submitted, with three patents issued. Enhancing the company's IP portfolio continues to be a priority in terms of creating strategic value including establishing strong barriers to entry.
  
  

Management Commentary
"In Q2, we made strong progress towards global product launches of UniBoss and Diamond Guard," said UniPixel president and CEO, Reed Killion. "In collaboration with the Texas Instruments team to integrate TI's touch controllers with our UniBoss touch sensor films, we've produced functional prototypes that reaffirm our thoughts on the performance and cost benefits the UniBoss touch sensor brings to the touch sensor market, which Display Search estimates will reach $19 billion by 2017. We've also made progress on developing reference designs with several global controller manufacturers for UniBoss printed touch sensors. We have designs and prototype efforts at 10.1, 13.3, 15.6 and 23 inch diagonal form factors.

"In fact, we've received our first reference design for UniBoss as an 'e-sensor,' which makes possible a revolutionary touchless interface that uses hand gestures, and takes advantage of the latest advances in computer hardware and operating systems. We anticipate the 'e-senor' to be introduced to the notebook market in the second quarter of 2013 or sooner.

"Another non-display UniBoss-based solution we've received a design request for is our EMI filter that isolates the touch sensor from the LCD. We believe it offers a lower cost and better isolation than other EMI filters on the market, currently used in computer notebooks. It is also applicable to a wide variety of devices requiring EMI shielding. Currently, we are working with a global controller manufacturer and a major OEM in the PC market to implement our 12.1 inch EMI shielding filter into a notebook, which could represent 15,000 to 20,000 units per month once implemented.

"As we begin the second half of 2012, we are turning our focus toward developing our downstream supply chain to help meet the anticipated demand for UniBoss. We are seeking to license electro-less plating manufactures, as well as qualifying die-cutting and lamination partners, to support our touch sensor manufacturing process. We will keep our design, mastering and roll-to-roll flexible electronics manufacturing in-house for the foreseeable future."

Q2 2012 Financial Summary
In the second quarter 2012, the company produced marginal revenues as it focused on advancing the development and market introduction of its flagship products, UniBoss and Diamond Guard.

Selling, general and administrative (SG&A) expenses in the second quarter of 2012 totaled $889,000, as compared to $932,000 in the same year-ago quarter. The decrease in SG&A expenses was primarily due to the decreased contract labor expense in the second quarter of 2012.

Research and development expenses in the second quarter of 2012 totaled $1.2 million, as compared to $0.9 million in the same quarter last year. The increase in R&D expenses was primarily due to increased lab expense related to prototype development.

Net loss was $2.0 million or $(0.29) per share in the second quarter of 2012, as compared to a net loss of $1.7 million or $(0.24) per share in the same year-ago quarter.

Cash and cash equivalents totaled $4.6 million at June 30, 2012, as compared to $7.2 million at December 31, 2011. The decrease in cash was primarily due to research and development expenses.