- 2Q Revenues of $5.9M, 36% higher than 2Q 2016
- Expect 70% Revenue Growth in Second Half of 2017
- Five New Headsets with Key Kopin Components to be Introduced in
2H 2017 - All Four Military Programs Ramping
- Revenue Growth Momentum Accelerating
Kopin Corporation (NASDAQ: 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 2017, ended July 1,
2017.
“We made very good progress in many areas in the second quarter, and we
are actively working with multiple tier-one customers,” said Dr. John CC
Fan, CEO of Kopin. “We believe the commercial AR/VR opportunities are
beginning to materialize. We have experienced very strong interest for
our 2k x 2k LightningTM OLED displays and related optics, and
we have made great progress in production readiness of our Lightning
OLED displays with our foundry partners BOE and OliGHTEK. In addition,
the recent announcements by Google about its second-generation Glass
intended for industrial applications has furthered the momentum of AR
headsets. Kopin’s displays and optic products are designed for these
rugged applications.
“We also had a solid quarter in our military business. The four major
production programs in our military business, including the F-35 pilot
helmets, the Family of Weapon Sights Programs (Individual and Crew), and
our VR optical system for armor vehicle simulation and training
headsets, are all ramping and should have a very significant impact on
our revenues in the second half of 2017 and in 2018.
“In our consumer segment, we have completed shipment of the first
generation of SOLOSTM, our health and fitness AR glasses. The
initial customers have been passionate about SOLOS and we have received
excellent feedback from them. We expect to have the second generation of
SOLOS on sale by the end of 2017.
“Finally we are making very good progress in our WhisperTM
audio technology. In the second half of the year we expect to see the
introduction of five new AR/VR headsets, of which two are Kopin systems
and three are customer products. Of the five, four will feature our
Whisper chip. In addition, we have made great progress in extending our
Whisper technology from near-field to far-field applications. Early
tests have shown the far field use matches the superior advantages in
noise cancellation, voice quality, and speech recognition achieved in
the near field application.
“On the strength of these new products and our current programs, we are
optimistic about the revenue growth for the balance of the year and
beyond. We anticipate revenues in the second half of 2017 will increase
by approximately 70% as compared to the first half of 2017. Careful
deployment of our financial resources, as always, remains a key
priority. We ended the quarter with $85 million in cash and no debt,
providing sufficient capital to monetize and commercialize our
investments.
“In summary, we have successfully completed the first phase of
technology and product development. We are now entering the harvesting
and growth phase, and we are actively increasing sales and marketing
efforts. All the cylinders are now working,” concluded Dr. Fan.
Second Quarter Financial Results
Total revenues for the second quarter ended July 1, 2017 were $5.9
million, compared with $4.4 million for the second quarter ended June
25, 2016.
Research and development (R&D) expenses for the second quarter of 2017
were $4.7 million compared to $4.1 million for the second quarter of
2016.
Selling, general and administrative (SG&A) expenses were $5.2 million
for the second quarter of 2017 compared to $4.3 million for the second
quarter of 2016, reflecting an increase in amortization of intangible
assets, accrual of contingent earn out and professional fees. Included
in SG&A is incremental SG&A expense of $0.5 million from the Company’s
acquisition of NVIS, which was completed in the first quarter of 2017.
Net loss for the second quarter of 2017 was $7.3 million, or $0.10 per
share, compared with net loss of $3.2 million, or $0.05 per share, for
the second quarter of 2016. The second quarter of 2016 included a $7.7
million gain on the sale of our Korean subsidiary
During the second quarter of 2017 we had 9 patents granted and filed for
2 new applications. Overall we have over 300 patents and patents
pending, almost all of which are related to wearable applications.
As of July 1, 2017 Kopin had approximately $85 million in cash
equivalents and marketable securities, and no long term debt.
All amounts above are estimates and readers should refer to our Form
10-Q for the quarter ended July 1, 2017, for final disposition.
Financial Results Conference Call
In conjunction with its second quarter 2017 financial
results, Kopin will host a teleconference call for investors and
analysts at 8:30 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, Lightning, SOLOS, and Whisper 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 belief that revenue in the second half of
2017 will increase 70% as compared to the first half of 2017; that five
new headsets will be introduced in the second half of 2017 of which two
will be Kopin products and three will be customer products; that our
four military programs will continue to ramp and should have a very
significant impact on our revenues in the second half of 2017 and 2018;
that our revenue growth momentum is accelerating; our belief that the
commercial AR/VR opportunities are beginning to materialize; our
expectation that the second generation of SOLOS will be on sale by the
end of 2017; our expectation that four of the five new headsets
introduced in the second half of 2017 will feature our Whisper chip; and
that we have sufficient capital to monetize and commercialize our
investments.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
revenues may not grow in the second half of 2017; here may be delays and
the five new headset products may not be introduced; the five new
headset products may not gain market acceptance; our military programs
may not continue to ramp and they may be delayed, cancelled or not
funded; our revenue momentum may stop; our revenues may decline for a
variety of reasons including, but not limited to, lack of market
acceptance, production issues, material supply issues and pricing issues;four of the five new headsets may not have the Whisper chip in them;
our Whisper Chip may not work for far field applications; our Whisper
Chip may not achieve market acceptance; the second generation of Solos
may not be introduced in the second half of 2017; we may have
insufficient fund to monetize and or commercialize our investment; we
may not be well positioned as the VR and AR markets begin to accelerate;
our progress may not lead to the growth of the AR and VR markets; the AR
and VR markets may take longer to develop than we anticipate; there may
be no demand for our AR and VR products; and other risk factors and
cautionary statements listed in Kopin’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 31, 2016, and Kopin’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 Kopin and only as of the date on
which they are made. We undertake no obligation to update any of these
forward-looking statements to reflect events or circumstances occurring
after the date of this release.
| Kopin Corporation | ||||||||||||||||
| Supplemental Information | ||||||||||||||||
| (Unaudited) | ||||||||||||||||
|
Three Months Ended |
Six Months Ended |
|||||||||||||||
|
July 1, 2017 |
June 25, 2016 |
July 1, 2017 |
June 25, 2016 |
|||||||||||||
|
Display Revenues by Category (in millions) |
||||||||||||||||
| Wearable Applications | $ | 0.9 | $ | 1.8 | $ | 1.5 | $ | 4.4 | ||||||||
| Military Applications | 1.0 | 0.9 | 2.0 | 2.4 | ||||||||||||
| Industrial Applications | 2.7 | 1.0 | 4.5 | 2.2 | ||||||||||||
| Consumer Electronics Applications | 0.4 | 0.4 | 0.9 | 1.1 | ||||||||||||
| Research and Development | 0.9 | 0.3 | 1.4 | 0.4 | ||||||||||||
| Total | $ | 5.9 | $ | 4.4 | $ | 10.3 | $ | 10.5 | ||||||||
| Stock-Based Compensation Expense | ||||||||||||||||
| Continuing Operations | ||||||||||||||||
| Cost of component revenues | $ | 159,000 | $ | 148,000 | $ | 263,000 | $ | 290,000 | ||||||||
| Research and development | 195,000 | 132,000 | 413,000 | 249,000 | ||||||||||||
| Selling, general and administrative | 322,000 | 615,000 | 1,292,000 | 412,000 | ||||||||||||
| $ | 676,000 | $ | 895,000 | $ | 1,968,000 | $ | 951,000 | |||||||||
| Other Financial Information | ||||||||||||||||
| Depreciation and amortization | $ | 699,000 | $ | 316,000 | $ | 1,143,000 | $ | 652,000 | ||||||||
| Kopin Corporation | ||||||||||||||||||||
| Condensed Consolidated Statements of Operations | ||||||||||||||||||||
| (Unaudited) | ||||||||||||||||||||
| Three Months Ended | Six Months Ended | |||||||||||||||||||
|
July 1, 2017 |
June 25, 2016 |
July 1, 2017 |
June 25, 2016 |
|||||||||||||||||
| Revenues: | ||||||||||||||||||||
| Net product revenues | $ | 4,979,400 | $ | 4,096,529 | $ | 8,912,543 | $ | 10,074,663 | ||||||||||||
| Research and development revenues | 948,069 | 258,746 | 1,393,054 | 399,750 | ||||||||||||||||
| 5,927,469 | 4,355,275 | 10,305,597 | 10,474,413 | |||||||||||||||||
| Expenses: | ||||||||||||||||||||
| Cost of product revenues | 4,117,226 | 4,646,846 | 7,234,583 | 9,282,887 | ||||||||||||||||
| Research and development | 4,678,221 | 4,119,401 | 8,960,090 | 8,159,352 | ||||||||||||||||
| Selling, general and administrative | 5,200,261 | 4,282,264 | 10,841,947 | 8,043,113 | ||||||||||||||||
| Gain on sale of property and plant | – | (7,700,522 | ) | – | (7,700,522 | ) | ||||||||||||||
| 13,995,708 | 5,347,989 | 27,036,620 | 17,784,830 | |||||||||||||||||
| Loss from operations | (8,068,239 | ) | (992,714 | ) | (16,731,023 | ) | (7,310,417 | ) | ||||||||||||
| Other income (expense), net | 807,699 | 100,986 | 384,606 | (275,098 | ) | |||||||||||||||
| Loss before benefit (provision) for income taxes and net loss | (7,260,540 | ) | (891,728 | ) | (16,346,417 | ) | (7,585,515 | ) | ||||||||||||
| (income) from noncontrolling interest | ||||||||||||||||||||
| (Provision) benefit for income taxes | – | (1,963,000 | ) | 1,146,000 | (2,104,000 | ) | ||||||||||||||
| Net loss | (7,260,540 | ) | (2,854,728 | ) | (15,200,417 | ) | (9,689,515 | ) | ||||||||||||
| Net (income) loss attributable to noncontrolling interest | (71,431 | ) | (339,374 | ) | 10,007 | (438,047 | ) | |||||||||||||
| Net loss attributable to the controlling interest | $ | (7,331,971 | ) | $ | (3,194,102 | ) | $ | (15,190,410 | ) | $ | (10,127,562 | ) | ||||||||
| Net loss per share: | ||||||||||||||||||||
| Basic and diluted | $ | (0.10 | ) | $ | (0.05 | ) | $ | (0.22 | ) | $ | (0.16 | ) | ||||||||
| Weighted average number of common shares outstanding: | ||||||||||||||||||||
| Basic and diluted | 70,626,542 | 64,011,571 | 67,582,615 | 63,994,809 | ||||||||||||||||
| Kopin Corporation | ||||||||
| Condensed Consolidated Balance Sheets | ||||||||
| (Unaudited) | ||||||||
|
July 1, 2017 |
December 31, 2016 |
|||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash and marketable securities | $ | 84,908,544 | $ | 77,197,896 | ||||
| Accounts receivable, net | 1,943,272 | 1,699,195 | ||||||
| Inventory | 4,412,962 | 3,302,112 | ||||||
| Prepaid and other current assets | 1,532,106 | 1,194,901 | ||||||
| Total current assets | 92,796,884 | 83,394,104 | ||||||
| Land, equipment and improvements, net | 3,708,747 | 2,976,006 | ||||||
| Goodwill and intangible assets | 4,189,434 | 844,023 | ||||||
| Other assets | 938,791 | 618,139 | ||||||
| Total assets | $ | 101,633,856 | $ | 87,832,272 | ||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | 4,182,746 | $ | 4,355,462 | ||||
| Accrued expenses | 7,153,590 | 5,457,484 | ||||||
| Deferred income taxes | 2,623,679 | 2,571,000 | ||||||
| Billings in excess of revenue earned | 1,027,227 | 981,761 | ||||||
| Total current liabilities | 14,987,242 | 13,365,707 | ||||||
| Lease commitments | 260,668 | 246,922 | ||||||
| Total Kopin Corporation stockholders’ equity | 86,260,343 | 74,077,686 | ||||||
| Noncontrolling interest | 125,603 | 141,957 | ||||||
| Total stockholders’ equity | 86,385,946 | 74,219,643 | ||||||
| Total liabilities and stockholders’ equity | $ | 101,633,856 | $ | 87,832,272 | ||||
View source version on businesswire.com: http://www.businesswire.com/news/home/20170808005390/en/
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