NASDAQ: KOPN $ 1.41 -0.04( -2.76%) Volume: 233,205 December 10, 2018 20 min delay

Kopin Provides Business Update and Second Quarter 2015 Operating Results

08/04/2015
  • Revenues Increase 56% Year over Year, Including Initial Component Shipments to Tier 1 Headset Customers
  • Company Generates $5.5 Million From Sale of Investment
  • Posts $.01 per Diluted Share Earnings

WESTBOROUGH, Mass.--(BUSINESS WIRE)-- Kopin Corporation (KOPN), a leading developer of innovative wearable computing technologies and solutions, today provided an update on its business initiatives and reported financial results for the second quarter of 2015, ended June 27.

We are very pleased with our progress in becoming the leading technology provider to the growing wearables market,” said Dr. John C.C. Fan, Kopin’s President and CEO. “In addition to our displays and compact optics technologies, we are very excited with our unique Voice Extraction™ technology that significantly improves the speech recognition in noisy environments.”

“In the second quarter, we announced that Fujitsu had launched their enterprise headset based on our wearable technologies and components. When you add Fujitsu to our existing customers, combined with the expected launch of a wearable product by another Tier 1 company in 2015, Kopin is providing system designs and components to the companies creating the most innovative products in the global headset market,” said Dr. John C.C. Fan, CEO and President of Kopin. “In September 2015 we plan to debut our latest consumer headset system targeted at the health and fitness market at the interbike trade show in Las Vegas.”

“Our progress in headsets would not be possible without the expertise and knowledge we have gained from our military programs. In Q2, Kopin began fulfilling initial production orders for our SXGA (1280 x 1024 resolution) displays, which are a key component in the helmets worn by fighter pilots in the new F-35. We also made progress in marketing our precision acquisition target system (PATS), with the goal of reaching license agreements in 2015 and revenue generation in 2016.”

“While we continue to make significant investments in display, optics, Voice Extraction and other technologies, we have remained fiscally conservative. With over $88 million in cash and marketable securities at the end of the second quarter, we have the resources to expand the Kopin ecosystem of wearables suppliers utilizing our components,” concluded Dr. Fan.

Second Quarter Financial Results

Total revenues for the second quarter ended June 27, 2015, were $10.9 million, compared with $6.9 million for the second quarter of 2014. Included in 2015 revenues was $3.8 million related to renegotiated contract terms due to the customer’s lowered forecasted program volumes.

Research and development expenses for the second quarter of 2015 were $4.9 million compared with $5.1 million for the second quarter of 2014.

Selling, general and administrative expenses were $5.1 million in the second quarter of 2015, compared with approximately $4.9 million in the same period of 2014, reflecting an increase in compensation for new hires, patent, information technology and travel expenses which were partially offset by lower stock compensation expenses.

Other income and expense was $6.2 million of income for the second quarter of 2015 as compared to an expense of $1.6 million for the second quarter of 2014. Included in the $6.2 million is a gain on the sale of our investment in Recon Instruments, which was acquired by Intel. Included in the 2014 expense of $1.6 million was an impairment charge on an investment of $1.3 million.

Net income for the second quarter of 2015 was $781,000, or $0.01 per diluted share, compared with net loss of $8.8 million, or $0.14 per share, for the same period of 2014.

Net cash used in operating activities for the three and six months ended June 27, 2015, was $3.4 million and $8.9 million, respectively. Kopin’s cash, equivalents and marketable securities was $88.3 million at June 27, 2015. Kopin has no long-term debt. Our cash position is expected to be further enhanced in January of 2016 when we expect to receive payment of the $15 million note receivable from the sale of our III-V product line and investment in Kopin Taiwan Corporation.

All amounts above are estimates and readers should refer to our Form 10-Q for the quarter ended June 27, 2015, for final disposition.

Financial Results Conference Call

In conjunction with its second quarter 2015 financial results, Kopin will host a teleconference call for investors and analysts at 9:00 a.m. ET today. To participate, please dial (877) 709-8150 (U.S. and Canada) or (201) 689-8354 (International). The call will also be available as a live and archived audio webcast on the “Investors” section of the Kopin website, www.kopin.com.

About Kopin

Kopin Corporation is a leading developer and provider of innovative wearable technologies and solutions for integration into head-worn computing and display systems to military, industrial and consumer customers. Kopin’s technology portfolio includes ultra-small displays, optics, speech enhancement technology, system and hands-free control software, low-power ASICs, and ergonomically designed smart headset reference systems. Kopin’s proprietary components and technology are protected by more than 300 global patents and patents pending. For more information, please visit Kopin’s website at www.kopin.com.

Kopin and Voice Extraction are trademarks of Kopin Corporation.

Forward-Looking Statements

Statements in this press release may be considered “forward-looking” statements under the “Safe Harbor” provisions of the Private Securities Litigation Reform Act of 1995. These include, without limitation, statements relating to our expectation that a tier 1 customer will launch a wearable product in 2015; that we expect to show our latest systems technologies targeted to the health and fitness consumer market at the interbike trade show in Las Vegas, in September; our goal of reaching license agreements for our precision acquisition targeting system (PATs) in 2015 and generating revenue in 2016; our belief that we have the resources to expand the Kopin ecosystem of wearables suppliers utilizing our components; our expectation that we will receive payment of the $15 million note receivable from the sale of our III-V product line and investment in Kopin Taiwan Corporation, in January 2016. These statements involve a number of risks and uncertainties that could cause actual results to differ materially from those expressed in the forward-looking statements. These risks and uncertainties include, but are not limited to, the following: our customer may not launch its product; technical, environmental, scheduling and other issues may prevent us from presenting at the interbike trade show in September; we may not be able to enter into any licensing agreements for our precision acquisition targeting system (PATs); we may have insufficient resources to expand the Kopin’s ecosystem of wearables suppliers utilizing our components; we may not receive the payment of the $15 million note receivable from the sale of our III-V product line and investment in Kopin Taiwan Corporation; the final amounts in the Company’s Form 10-Q for the period ended June 27, 2015, may differ from the amounts included in the release above; it may take longer than the Company estimates to develop products; the Company’s products may not be accepted by the market place; there may be issues that prevent the adoption or further development of the Company’s wearable computing technologies; manufacturing, marketing or other issues may prevent either the adoption or acceptance of products; the Company might be adversely affected by competitive products and pricing; new product initiatives and other research and development efforts may be unsuccessful; the Company could experience the loss of significant customers; costs to produce the Company’s products might increase significantly, or yields could decline; the Company’s customers might be unable to ramp production volumes of their products, or the Company’s product forecasts could turn out to be wrong; manufacturing delays, technical issues, economic conditions or external factors may prevent the Company from achieving its goals; and other risk factors and cautionary statements listed in the Company’s periodic reports and registration statements filed with the Securities and Exchange Commission, including the Annual Report on Form 10-K for the 12 months ended December 27, 2014, and the Company’s subsequent filings with the Securities and Exchange Commission. You should not place undue reliance on any forward-looking statements, which are based only on information currently available to the Company and only as of the date on which they are made. The Company undertakes no obligation to update any of these forward-looking statements to reflect events or circumstances occurring after the date of this report.

 
Kopin Corporation
Supplemental Information
(Unaudited)
       
Three Months Ended Six Months Ended
 

June 27, 2015

June 28, 2014

June 27, 2015

June 28, 2014

Display Revenues by Category (in millions)
Military Applications $ 2.4 $ 1.5 $ 7.0 $ 2.6
Industrial Applications 0.7 1.0 1.7 1.7
Wearable Applications 6.0 1.5 7.1 3.1
Consumer Electronics Applications 0.4 0.9 0.8 1.7
Research and Development   1.4   2.0   2.8   2.5
Total $ 10.9 $ 6.9 $ 19.4 $ 11.6
 
 
Stock-Based Compensation Expense

Continuing Operations

Cost of component revenues $ 262,000 $ 242,000 $ 461,000 $ 472,000
Research and development 269,000 305,000 504,000 637,000
Selling, general and administrative   494,000   688,000   1,057,000   1,253,000
$ 1,025,000 $ 1,235,000 $ 2,022,000 $ 2,362,000
 
 
Other Financial Information
Depreciation and amortization $ 509,000 $ 847,000 $ 1,190,000 $ 1,780,000
Capital expenditures $ 337,000 $ 534,000 $ 652,000 $ 978,000
Treasury stock purchases $ - $ - $ - $ 299,000
 
       
Kopin Corporation
Condensed Consolidated Statements of Operations
(Unaudited)
 
Three Months Ended   Six Months Ended

June 27, 2015

June 28, 2014

June 27, 2015

June 28, 2014

Revenues:
Component revenues $ 9,486,723 $ 4,906,663 $ 16,615,093 $ 9,134,422
Research and development revenues   1,369,883     2,036,624     2,826,505     2,503,634  
10,856,606 6,943,287 19,441,598 11,638,056
Expenses:
Cost of component revenues 6,359,780 4,153,739 11,643,513 8,379,188
Research and development 4,884,010 5,137,033 9,744,202 10,223,317
Selling, general and administrative   5,108,229     4,921,194     9,494,444     9,917,993  
16,352,019 14,211,966 30,882,159 28,520,498
 
Loss from operations (5,495,412 ) (7,268,679 ) (11,440,561 ) (16,882,442 )
 
Other income (expense), net   6,214,193     (1,599,684 )   8,406,198     (1,119,935 )
 
Income (loss) before (provision) benefit for income taxes, equity loss in 718,780 (8,868,363 ) (3,034,363 ) (18,002,377 )
unconsolidated affiliate and net loss from noncontrolling interest
 
(Provision) benefit for income taxes   (12,500 )   (37,000 )   (25,000 )   106,000  
 
Income (loss) before equity loss in unconsolidated affiliate and net 706,280 (8,905,363 ) (3,059,363 ) (17,896,377 )
loss from noncontrolling interest
 
Equity loss in unconsolidated affiliate   -     (122,553 )   (47,443 )   (224,858 )
 
Income (loss) from continuing operations 706,280 (9,027,916 ) (3,106,806 ) (18,121,235 )
(Loss) income from discontinued operations, net of tax   -     -     -     -  
Net (loss) income 706,280 (9,027,916 ) (3,106,806 ) (18,121,235 )
 
Net loss attributable to noncontrolling interest   74,690     221,973     49,784     180,876  
 
Net income (loss) $ 780,970   $ (8,805,943 ) $ (3,057,022 ) $ (17,940,359 )
 
Net (loss) income per share:
Basic
Continuing operations $ 0.01 $ (0.14 ) $ (0.05 ) $ (0.29 )
Discontinued operations   -     -     -     -  
Net (loss) income per share $ 0.01   $ (0.14 ) $ (0.05 ) $ (0.29 )

Diluted

Continuing operations $ 0.01 $ (0.14 ) $ (0.05 ) $ (0.29 )
Discontinued operations   -     -     -     -  
Net (loss) income per share $ 0.01   $ (0.14 ) $ (0.05 ) $ (0.29 )
 
 
Weighted average number of common shares outstanding:
Basic   63,066,031     62,643,506     63,074,842     62,586,854  
Diluted   65,030,089     62,643,506     63,074,842     62,586,854  
   
Kopin Corporation
Condensed Consolidated Balance Sheets
(Unaudited)
 
June 27, 2015 December 27, 2014
ASSETS
Current assets:
Cash and marketable securities $ 88,320,562 $ 90,858,936
Accounts receivable, net 8,457,514 3,802,324
Inventory 3,065,712 4,081,886
Prepaid and other current assets 853,329 1,181,474
Note receivable   14,966,671     -  
 
Total current assets 115,663,788 99,924,620
 
Equipment and improvements, net 4,107,309 4,589,421
Goodwill and intangible assets 1,292,538 1,593,210
Other assets 2,943,350 1,900,828
Note receivable   -     14,933,335  
 
Total assets $ 124,006,985   $ 122,941,414  
 
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 4,778,554 $ 5,503,734
Accrued expenses 5,656,102 5,870,719
Deferred income taxes 1,282,000 1,282,000
Billings in excess of revenue earned   3,522,416     586,471  
 
Total current liabilities 15,239,072 13,242,924
 
Lease commitments 314,812 311,187
 
Total Kopin Corporation stockholders' equity 108,993,599 109,846,959
Noncontrolling interest   (540,498 )   (459,656 )
Total stockholders' equity   108,453,101     109,387,303  
Total liabilities and stockholders' equity $ 124,006,985   $ 122,941,414  

Source: Kopin Corporation

Kopin Corporation

Richard Sneider, 508-870-5959

Treasurer and Chief Financial Officer

Richard_Sneider@kopin.com

or

Market Street Partners

Joann Horne, 415-445-3233

JHorne@marketstreetpartners.com