Kopin Provides Business Update and First Quarter 2016 Operating Results


  • Wearable Revenues Double Over Q1 2015
  • Solos™ Smart Eyewear on Track for Summer Shipment
  • Company Receives $15 Million Payment Solidifying Strong
    Financial Position
  • Company Enters P&S Agreement to Sell Korea Facility for about
    $8.0 Million
  • Company Was Selected by Prime Contractor for FWS-I Program

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 first quarter ended March 26, 2016.

“During the quarter we continued to make progress on the
commercialization of our technology, particularly as it relates to our
Whisper™ chip, the FWS military contract, and Solos™, our health &
fitness sunglasses,” said Dr. John C.C. Fan, President and CEO of Kopin.
“We have been working with several large Asian companies to integrate
the Whisper chip into their products, and we expect to announce design
wins late this year. In our military group we have been selected by a
major U.S. Military prime contractor to supply eyepiece assemblies for
the U.S. Army’s FWS-I program, the next generation of thermal weapon
sights. Finally, the Solos direct marketing campaign is scheduled to
launch this quarter, with unit delivery starting late this summer.”

“Our wearable revenues doubled in Q1 2016 compared to the same period
last year, a direct result of our strategic focus on wearables. The
increase came primarily from display shipments for headsets used for
drone racing and health and fitness products. In January 2016, we
received the final installment of $15 million from the 2013 sale of our
III-V product line and investment in Kopin Taiwan Corporation which
further strengthens our already solid balance sheet. We also entered
into a purchase and sale agreement to sell our Korea facility for
approximately $8.0 million depending on the exchange rate. We expect the
sale to be completed in the second quarter of 2016. Our Korean facility
produced display products that went into camcorders and digital still
cameras, markets we have been exiting over the last several years. With
our extensive patent portfolio, customer design wins and strong
financial position, we are very well positioned to take advantage of the
increasing momentum in the $6 billion wearables market,” concluded Dr.

First Quarter Financial Results

Total revenues for the first quarter ended March 26, 2016, were $6.1
million, compared with $8.6 million for the first quarter ended March
28, 2015. Sales of products for Wearable applications were $2.6 million
for the first quarter of 2016 as compared to $1.1 million in the first
quarter of 2015.

Research and development (R&D) expenses for the first quarter of 2016
were $4.0 million compared with $4.9 million for the first quarter of

Selling, general and administrative (S,G&A) expenses were $3.8 million
for the first quarter of 2016 as compared with approximately $4.4
million for the same period in 2015. Operating expenses are expected to
remain largely flat with 2015, as we expect lower R&D expense to be
offset by higher S,G&A expense as we commercialize our products.

Net loss for the first quarter of 2016 was $6.9 million, or $0.11 per
share, compared with net loss of $3.8 million, or $0.06 per share, for
the first quarter of 2015. Included in the results of the first quarter
of 2015 was a $2.1 million gain from the sale of investments.

During the first quarter of 2016 we had 9 patents granted and filed for
13 new applications. Overall we have over 300 patents and patents
pending, almost all of which are related to wearable applications.

We have maintained our strong financial position. Net cash used in
operating activities for the three months ended March 26, 2016 was
approximately $5.6 million. Kopin’s cash and equivalents and marketable
securities were approximately $90.9 million at March 26, 2016 as
compared to $80.7 million at December 26, 2015 and we have no long-term

All amounts above are estimates and readers should refer to our Form
10-Q for the quarter ended March 26, 2016, for final disposition.

Financial Results Conference Call

In conjunction with its first quarter 2016 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, Whisper, and Solos 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 statement that we have been working with
several large Asian companies to integrate Whisper into their products,
and we expect to announce design wins late this year; we
been selected by a major U.S. Military prime contractor to supply
eyepiece assemblies for the next generation of thermal weapon sights,
the U.S. Army’s FWS-I program which could have a total production
requirement of more than 30,000 systems; the Solos direct marketing
campaign is scheduled to launch this quarter, with unit delivery late
this summer; we expect the sale of our Korean facility to be completed
this June for $8.0 million; and our expectation that
expenses will remain largely flat with 2015, although we expect lower
R&D expense offset by higher S,G&A as we commercial our products. 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: We may not have design wins for
Whisper chip this year; we may not receive production orders for the FWS
program; the Solos direct marketing campaign may not launch this quarter
and the unit delivery may not occur this year; we may not sell the
Korean facility or if we do sell it it may be for a price different than
the $8.0 million; our operating expenses may be higher or lower than
2015 operating expenses; the headset wearable market may take longer to
develop than we expect or it may not develop at all; we may not obtain
new customers; the public safety application may not be available in the
second quarter; and the final amounts in the Company’s Form 10-Q for the
period ended March 26, 2016 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;
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
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 26, 2015, 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 release.

Kopin Corporation
Condensed Consolidated Balance Sheets
March 26, 2016 December 26, 2015
Current assets:
Cash and marketable securities $ 90,883,644 80,710,780
Accounts receivable, net 1,680,229 1,574,973
Inventory 2,705,857 2,512,473
Prepaid and other current assets 840,943 1,357,996
Note receivable       15,000,000  
Total current assets 96,110,673 101,156,222
Equipment and improvements, net 2,712,658 2,677,103
Goodwill 928,066 946,082
Property and plant, held for sale 860,750 819,263
Other assets   711,317     461,416  
Total assets $ 101,323,464   $ 106,060,086  
Current liabilities:
Accounts payable $ 4,439,780 3,959,704
Accrued expenses 4,633,930 4,702,574
Deferred income taxes 1,330,000 1,207,000
Billings in excess of revenue earned   1,329,986     1,407,566  
Total current liabilities 11,733,696 11,276,844
Lease commitments 282,760 298,463
Total Kopin Corporation stockholders’ equity 89,432,403 94,740,875
Noncontrolling interest   (125,395 )   (256,096 )
Total stockholders’ equity   89,307,008     94,484,779  
Total liabilities and stockholders’ equity $ 101,323,464   $ 106,060,086  
Kopin Corporation
Condensed Consolidated Statements of Operations
Three Months Ended
March 26, 2016 March 28, 2015
Component revenues $ 5,978,134 $ 7,128,369
Research and development revenues   141,004     1,456,622  
6,119,138 8,584,991
Cost of component revenues 4,647,041 5,283,733
Research and development 4,039,951 4,860,192
Selling, general and administrative   3,760,849     4,386,215  
12,447,841 14,530,140
Loss from operations (6,328,703 ) (5,945,149 )
Other (expense) income, net   (349,085 )   2,192,006  
Loss before provision for income taxes, equity loss in (6,677,788 ) (3,753,143 )
unconsolidated affiliate and net income from noncontrolling interest
Provision for income taxes   (141,000 )   (12,500 )
Loss before equity loss in unconsolidated affiliate and net (6,818,788 ) (3,765,643 )
income from noncontrolling interest
Equity loss in unconsolidated affiliate       (47,443 )
Net loss (6,818,788 ) (3,813,086 )
Net income attributable to noncontrolling interest   (98,673 )   (24,906 )
Net loss $ (6,917,461 ) $ (3,837,992 )
Net loss per share:
Basic $ (0.11 ) $ (0.06 )
Diluted $ (0.11 ) $ (0.06 )
Weighted average number of common shares outstanding:
Basic   63,978,048     63,083,652  
Diluted   63,978,048     63,083,652  
Kopin Corporation
Supplemental Information
Three Months Ended
March 26, 2016 March 28, 2015
Display Revenues by Category (in millions)
Wearable Applications $ 2.6 $ 1.1
Military Applications 1.5 4.6
Industrial Applications 1.1 1.1
Consumer Electronics Applications 0.8 0.3
Research and Development   0.1     1.5
Total $ 6.1 $ 8.6
Stock-Based Compensation Expense
Continuing Operations
Cost of component revenues $ 142,000 $ 199,000
Research and development 117,000 234,000
Selling, general and administrative   (203,000 )   564,000
$ 56,000 $ 997,000
Other Financial Information
Depreciation and amortization $ 335,000 $ 682,000
Capital expenditures $ 224,000 $ 314,000

Kopin Corporation
Richard Sneider, 508-870-5959
and Chief Financial Officer
Street Partners
Joann Horne, 415-445-3233