eMagin Corporation

Good morning and welcome to the Imagine Corporation's fourth quarter and full year 2022 earnings conference call. Please note this event is being recorded. After management's prepared remarks, there will be a question and answer session. To ask a question during the session, you need to press star 1-1 on your telephone. If your question has been answered, you wish to move yourself from the queue, please press star 1-1 again. I will now turn the conference over to Mark Koch, Imagine CFO. Please go ahead.

Thank you and good morning, everyone. Welcome to Imagine's fourth quarter and year-end 2022 earnings conference call. Before we begin, I would like to remind you that in the following prepared remarks and in our Q&A session, we will make statements about expected future results that may be forward-looking for the purposes of federal securities laws. These statements relate to our current expectations, estimates, and projections and are not guarantees of future performance. They involve risks, uncertainties, and assumptions that are difficult to predict and may prove not to be accurate, especially in light of the effects of the ongoing pandemic. Actual results may vary materially from those expressed or implied by these forward-looking statements, and we undertake no obligation to update these disclosures. These forward-looking statements should be considered only in conjunction with the detailed information contained in our SEC filings, including the risk factors described in our 2021 annual report on Form 10-K and our 2022 10-K filed later this afternoon. During this call, we will also refer to adjusted EBITDA, a non-GAAP financial measure, to provide additional information to investors. A reconciliation of adjusted EBITDA to net income, which is the most directly comparable GAAP financial measure, is provided in the press release that we issued this morning. Non-GAAP financial measures such as adjusted EBITDA are not meant to be considered in isolation or as a substitute for our GAAP financial measures and financial statements. With that, I will turn the call over to our CEO, Andrew Scully.

Thank you, Mark, and hello, everyone. Thank you for joining us today. We ended 2022 with another strong quarter. We achieved near record revenues of $8.4 million in the fourth quarter and $30.5 million in revenue for the full year. This represents significant year-over-year growth for both the quarter and the full year. Moreover, Q4 was the fifth consecutive quarter in which Imagine achieved year-over-year growth in product revenue and exceeded $7 million in quarterly product revenue. Thanks to our improved performance, we generated $2 million of positive EBITDA for the fourth quarter and $2.2 million in positive EBITDA for the full year. We finished the year with robust shipments of displays used in the Enhanced Night Vision Goggle Binocular, or ENVGB program, along with displays for thermal weapon sites, and medical applications. Bookings for the fourth quarter were strong, including a $1.7 million order for the F-35 helmet mounted display system and more than $2 million in medical applications. Our backlog of open orders as of December 31, 2022 and shippable within 12 months was $14.8 million. 2022 included a number of contract wins and operational highlights. In June, the U.S. Army's Program Executive Office for Simulation Training and Instrumentation, or PEO STRI, awarded us a $2.5 million two-year development contract to secure a U.S. source for high-performance micro displays that provide high brightness and visual acuity, even in bright daylight conditions. Upon completion, This contract has the option of a follow-on production agreement. The developments in this project will allow us to produce a 20,000 candela per meter squared display in the second half of 2024. In October, we achieved AS 9100 Rev. D and ISO 9001 2015 quality certifications. These were important milestones for Imagine because these certifications are required by most customers in the aerospace, aviation, and defense industries. Throughout 2022, we improved our positioning as a supplier of choice to address the rapidly expanding AR VR market with our patented direct patterning technology, DPD. In April, we announced several patents related to this technology. In May, our dazzling full-color 10,000 candela per meter squared WUXGA display with DPD technology won the People's Choice Award for the Best New Display Technology at Display Week, the annual symposium and trade show of the Society for Information Display. Additionally, we designed an improvement to the R&D chamber for our existing OLED deposition tool, that will enable us to further enhance this technology. This improved R&D chamber was delivered in December and is currently being set up for DPD runs. The production-capable DPD organic deposition tool that we purchased last year under Title III funding has passed acceptance testing at the vendor's facility and will be delivered to our newly expanded cleanroom this April to begin the installation and qualification process. It is worth noting that this tool will be able to produce DPD displays, including the 20,000 candela per meter squared display, in production when qualified in the second half of 2024. We continue to be the only U.S. manufacturer of OLED micro displays, and our manufacturing operations in New York's Hudson Valley have benefited greatly from the equipment installed under our Defense Production Act Title III and IBAS funding grants. We are seeing increases in our manufacturing yields, throughput, and efficiencies. Furthermore, we anticipate continued improvements as we take delivery and qualify the remaining tools under the program, including the new DPD capable organic deposition tool. We appreciate the continued support provided by these programs and remain on track. and within the requirements of the Title III and IBAS funding grants. In the year ahead, we will present our next set of DPD technology-based products for customers building consumer devices, a market in which we see great potential. Also, we will start the qualification process for our new production tool. We look forward to updating you regarding both developments on future calls. With that, I'll turn the call over to Mark for a discussion of our financial results.