eMagin Corp. (NYSE MKT:EMAN) Q2 2019 Earnings Conference Call - Final Transcript
Sep 13, 2019 • 09:00 am ET
million, a decrease of $1.7 million from revenues of $7.1 million reported a year ago and down sequentially by $700,000 from the first quarter of 2019. As far as the components of revenue, product revenues were $5 million compared to $6.2 million in the second quarter 2019.
On a sequential basis, product revenues fell 10% from the first quarter of 2019. The decrease in product revenue was due to the production-related issues to which I previously referred. Contract revenues totaled $400,000 in the second quarter, compared to $900,000 in the same quarter of last year, reflecting less revenues from military and government-funded contracts.
Consolidated gross margin for the second quarter was 4% on gross profit of $0.2 million compared to a gross margin of 2% on gross profit of $0.1 million in the prior year period. The gross margin and profit in the prior year period included $2.7 million impairment charge related to the consumer night vision business that we exited.
Excluding this charge, the gross margin and gross profit for the second quarter of 2018 would have been 40% and $2.8 million, respectively. Operating expenses for the second quarter of 2019, including R&D expenses, were $3.1 million as compared to $3.8 million in the second quarter of 2018. SG&A expenses were $1.8 million versus $2 million in the year ago quarter and R&D expense was $1.3 million versus $1.7 million in the year ago quarter.
The decrease in SG&A expenses this period versus the year ago period reflects in part our cost control and spending reduction efforts. R&D expenses were $400,000 lower in this year's second quarter, primarily reflecting our shift in engineering efforts to resolving our production challenges and the result in decrease in allocated production cost to R&D.
Operating loss for the second quarter was $2.9 million versus an operating loss of $3.6 million in the second quarter of last year. Excluding the previously mentioned impairment charge related to the consumer night vision business inventory, operating loss for the second quarter of 2018 was $0.9 million. Net loss for the second quarter 2019 was $2.3 million or $0.05 per diluted share compared to a net loss of $5.1 million or $0.11 per diluted share in the second quarter of 2018.
The net loss included income related to the change in the fair value of the warrant liability of $500,000 and a loss of $1.4 million, respectively, for the second quarter of 2019 and 2018.
Our non-GAAP EBITDA was negative $2.3 million for the second quarter of 2019 compared to negative EBITDA of approximately $3 million in the second quarter of 2018. That included the $2.7 million impairment charge noted above.
Turning to the balance sheet, as of June 30th 2019, the Company had cash and cash equivalents of $3.7 million, working capital of $8.3 million, outstanding borrowings of $945,000 under our ABL facility and borrowing availability under that facility of $1 million.
Operator, we can now open up the call for questions.