eMagin Corp. (NYSE MKT:EMAN) Q2 2019 Earnings Conference Call Transcript
Sep 13, 2019 • 09:00 am ET
raising total proceeds to eMagin of $4 million before fees and other operating expenses. Net proceeds from the offerings were $3.3 million, of which $1.6 million was applied to the repayment of our outstanding credit facility balance.
We are taking several actions and accelerating several ongoing efforts to improve our operating performance. Most noteworthy is that we are focusing our R&D team to work closely with our manufacturing team to identify and resolve the production issues. They are meeting daily on yield and throughput improvement. As you know, the manufacture of OLED microdisplays is a highly complex and sophisticated process. By working together, R&D and manufacturing are collectively developing the remedial practices for our engineers and operators to implement.
To help improve our throughput, we are retaining on-site, an engineer from our primary OLED deposition tool vendor. We brought this individual onboard during the second quarter and just tied him along for a few more months. He is working closely with our engineers and technicians to help us refine the operating processes associated with this tool to increase his throughput.
We have also enhanced our equipment and maintenance practice and expanded our equipment maintenance team to improve equipment reliability and to minimize unscheduled downtime. With our current staffing level, we have equipment maintenance coverage available for all of our shifts.
Lastly, while we are working on these operational improvements, we are seeking to pair our cost structure. We have reduced expenses at the operating level, including paring discretionary and other expenses. These measures reduce our overhead structure resulting in lower R&D and SG&A in the second quarter in comparison to the first quarter and the prior year quarter.
So far in this quarter, we are seeing some early successes. We produced 25% more displays in July, the first month this quarter than we produced in April, the first month of the previous quarter. Second, the combined efforts of our R&D and our production teams are developing remedial processes and practices. The measures that they are implementing are beginning to raise our overall yield above those of the second quarter and are consistent with the targeted yields of our recovery plan.
In summary, improving our yields, increasing our production throughput and fulfilling our customer orders are the overarching priorities throughout our Company as we focus on stemming our operating losses and returning to profitability.
With that, I will turn the call over to Andrew, who will discuss the current state of our business.
Thanks, Jeff. Despite the production challenges discussed by Jeff, consumer demand remains positive, and we continue to expand our market presence. In the second quarter, we continued to see strong demand for our product especially for military and aviation programs both domestic and international.
We have mentioned in the past, many of the programs we provide product for, extend over multiple years. A good example of this would be the ENVG II program, which we began working on in 2013 and received an order for $627,000 in April.