- Strong Military Growth in Third Quarter; Expected to Continue
into Q4 - On track for 70% Revenue Growth in Second Half of 2017
- Five New AR/VR Headsets with Key Kopin Components to be
Introduced at CES
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 third quarter ended September 30,
2017.
“We continued making rapid progress in the third quarter on many
fronts,” said Dr. John C. C. Fan, CEO of Kopin Corporation. “With regard
to our Lightning™ OLED displays and related optics, we have drawn strong
interest from many tier-one global companies and the military, and we
have already received development orders. Even as we continue to further
enhance our Lightning OLED performance, we have made significant
progress in establishing production readiness for our OLED microdisplays
and we expect to have production in the first quarter of 2018. At the
same time, our joint venture with BOE and Olightek is on schedule, and
we expect to break ground shortly on the world’s largest OLED on Si
factory, located in Kunming, China.
“We took another step to expand our microdisplay leadership with the
recent introduction of the Brillian LCD microdisplay product line. This
new generation of liquid crystal display (LCDs) incorporates advanced
designs and processing techniques which dramatically increase
performance over current LCDs. The Brillian offers brightness levels
only possible with our LCD which is critical for many AR applications,
especially in military and enterprise.
“Our military business was strong in the third quarter of 2017, more
than doubling over the period year. The increase was primarily driven by
revenues for our VR optical system for simulation and training headsets
along with shipments for the F-35 Strike fighter program.
“In our consumer business, Solos is in final preparation phase with our
manufacturing partner Goertek, and we expect to launch it at CES in
January and begin shipping in the first quarter of 2018. This second
generation of Solos will showcase much of Kopin’s most exciting new
technology, including WhisperTM audio technology and our PupilTM
optics, along with many other new features. We have made great progress
with our Whisper technology and will be demonstrating its mid-field and
far-field capabilities at CES 2018.
“In summary, our military business is ramping with enterprise and
consumer headsets scheduled for release shortly. Our product plans are
in place and we have $77 million to fund our strategy,” concluded Dr.
Fan.
Third Quarter Financial Results
Total revenues for the third quarter ended September 30, 2017 were $6.1
million, compared with $5.8 million for the third quarter ended
September 24, 2016.
Research and development (R&D) expenses for the third quarter of 2017
were $5.3 million compared to $4.1 million for the third quarter of 2016.
Selling, general and administrative (SG&A) expenses were $5.3 million
for the third quarter of 2017 compared to $4.0 million for the third
quarter of 2016, reflecting incremental SG&A expense of $0.5 million
from the Company’s acquisition of NVIS, which was completed in the first
quarter of 2017 and an increase in stock compensation. The incremental
SG&A from NVIS for the three months ended September 30, 2017 primarily
relates to the amortization of intangibles resulting from the
acquisition.
Net loss attributable to controlling interest for the third quarter of
2017 was $8.2 million, or $0.11 per share, compared with net loss of
$8.1 million, or $0.13 per share, for the third quarter of 2016.
During the third quarter of 2017 we had 7 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 September 30, 2017 Kopin had approximately $77.3 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 September 30, 2017, for final disposition.
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 we expected military revenue
strength in the fourth quarter; that revenue in the second half of 2017
is on track to increase 70% as compared to the first half of 2017;we
plan to have OLED production in thefirst quarter of 2018; our
expectation to launch Solos 2 at CES in January and begin shipping in
the first quarter of 2018; our expectation that we will be
demonstrating our Whisper technology’smid-field and far-field
capabilities at CES 2018; and our belief that our military
business is ramping withenterprise and consumer headsets
scheduled for release shortly.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 military revenues may not be strong in the fourth quarter; our
revenues may not grow in the second half of 2017;we may not be able to
demonstrate any products at CES for a variety of reasons;our
Solos 2 may not be introduced; the Solos 2 may not gain market
acceptance; our Brillian LCD technology may not be introduced; the
Brillian LCD 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;our
Whisper Chip may not work for far field applications; our Whisper Chip
may not achieve market acceptance; we may have insufficient funds 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 |
Nine Months Ended | |||||||||||
|
September 30, 2017 |
September 24, 2016 |
September 30, 2017 |
September 24, 2016 |
|||||||||
|
Display Revenues by Category (in millions) |
||||||||||||
| Consumer Applications | $ | 1.3 | $ | 1.5 | $ | 2.8 | $ | 5.9 | ||||
| Military Applications | 2.9 | 1.2 | 6.1 | 3.6 | ||||||||
| Industrial Applications | 1.1 | 2.4 | 4.3 | 4.6 | ||||||||
| Other Applications | 0.3 | 0.4 | 1.3 | 1.5 | ||||||||
| Research and Development | 0.5 | 0.3 | 1.9 | 0.7 | ||||||||
| Total | $ | 6.1 | $ | 5.8 | $ | 16.4 | $ | 16.3 | ||||
|
Stock-Based Compensation Expense |
||||||||||||
| Cost of component revenues | $ | 143,000 | $ | 136,000 | $ | 406,000 | $ | 426,000 | ||||
| Research and development | 203,000 | 129,000 | 616,000 | 378,000 | ||||||||
| Selling, general and administrative | 676,000 | 263,000 | 1,968,000 | 675,000 | ||||||||
| $ | 1,022,000 | $ | 528,000 | $ | 2,990,000 | $ | 1,479,000 | |||||
| Other Financial Information | ||||||||||||
| Depreciation and amortization | $ | 736,000 | $ | 298,000 | $ | 1,878,000 | $ |
950,000 |
||||
| Kopin Corporation | ||||||||||||||||
| Condensed Consolidated Statements of Operations | ||||||||||||||||
| (Unaudited) | ||||||||||||||||
| Three Months Ended | Nine Months Ended | |||||||||||||||
|
September 30, 2017 |
September 24, 2016 |
September 30, 2017 |
September 24, 2016 |
|||||||||||||
| Revenues: | ||||||||||||||||
| Net product revenues | $ | 5,589,402 | $ | 5,522,584 | $ | 14,501,945 | $ | 15,597,247 | ||||||||
| Research and development revenues | 549,765 | 272,222 | 1,942,819 | 671,972 | ||||||||||||
| 6,139,167 | 5,794,806 | 16,444,764 | 16,269,219 | |||||||||||||
| Expenses: | ||||||||||||||||
| Cost of product revenues | 4,144,884 | 4,573,581 | 11,379,467 | 13,856,469 | ||||||||||||
| Research and development | 5,253,860 | 4,123,268 | 14,213,950 | 12,282,620 | ||||||||||||
| Selling, general and administrative | 5,344,999 | 3,980,605 | 16,186,946 | 12,023,717 | ||||||||||||
| Gain on sale of property and plant | – | – | – | (7,700,522 | ) | |||||||||||
| 14,743,743 | 12,677,454 | 41,780,363 | 30,462,284 | |||||||||||||
| Loss from operations | (8,604,576 | ) | (6,882,648 | ) | (25,335,599 | ) | (14,193,065 | ) | ||||||||
| Other income (expense), net | 306,437 | (1,190,438 | ) | 691,042 | (1,465,535 | ) | ||||||||||
| Loss before (provision) benefit for income taxes and net loss | (8,298,139 | ) | (8,073,086 | ) | (24,644,557 | ) | (15,658,600 | ) | ||||||||
| (income) from noncontrolling interest | ||||||||||||||||
| (Provision) benefit for income taxes | (4,500 | ) | (114,000 | ) | 1,141,500 | (2,218,000 | ) | |||||||||
| Net loss | (8,302,639 | ) | (8,187,086 | ) | (23,503,057 | ) | (17,876,600 | ) | ||||||||
| Net loss (income) attributable to noncontrolling interest | 55,217 | 69,782 | 65,223 | (367,640 | ) | |||||||||||
| Net loss attributable to the controlling interest | $ | (8,247,422 | ) | $ | (8,117,304 | ) | $ | (23,437,834 | ) | $ | (18,244,240 | ) | ||||
| Net loss per share: | ||||||||||||||||
| Basic and diluted | $ | (0.11 | ) | $ | (0.13 | ) | $ | (0.34 | ) | $ | (0.29 | ) | ||||
| Weighted average number of common shares outstanding: | ||||||||||||||||
| Basic and diluted | 72,187,688 | 64,047,852 | 69,117,640 | 64,012,490 | ||||||||||||
| Kopin Corporation | ||||||
| Condensed Consolidated Balance Sheets | ||||||
| (Unaudited) | ||||||
|
September 30, 2017 |
December 31, 2016 |
|||||
| ASSETS | ||||||
| Current assets: | ||||||
| Cash and marketable securities | $ | 77,337,464 | $ | 77,197,896 | ||
| Accounts receivable, net | 2,147,686 | 1,699,195 | ||||
| Inventory | 5,949,010 | 3,302,112 | ||||
| Prepaid and other current assets | 1,256,409 | 1,194,901 | ||||
| Total current assets | 86,690,569 | 83,394,104 | ||||
| Land, equipment and improvements, net | 3,660,925 | 2,976,006 | ||||
| Goodwill and intangible assets | 3,733,123 | 844,023 | ||||
| Other assets | 968,083 | 618,139 | ||||
| Total assets | $ | 95,052,700 | $ | 87,832,272 | ||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||
| Current liabilities: | ||||||
| Accounts payable | $ | 3,965,760 | $ | 4,355,462 | ||
| Accrued expenses | 8,857,185 | 5,457,484 | ||||
| Deferred income taxes | 2,606,312 | 2,571,000 | ||||
| Billings in excess of revenue earned | 728,281 | 981,761 | ||||
| Total current liabilities | 16,157,538 | 13,365,707 | ||||
| Lease commitments | 268,068 | 246,922 | ||||
| Total Kopin Corporation stockholders’ equity | 78,564,797 | 74,077,686 | ||||
| Noncontrolling interest | 62,297 | 141,957 | ||||
| Total stockholders’ equity | 78,627,094 | 74,219,643 | ||||
| Total liabilities and stockholders’ equity | $ | 95,052,700 | $ | 87,832,272 | ||
View source version on businesswire.com: http://www.businesswire.com/news/home/20171107005498/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