- Q2 Product Revenues Increase 50% Year Over Year
- R&D and SG&A expenses Decline 41% Year over Year
- Breakthrough Developments with Dual-Stack OLED Micro
Displays
- Shipped First Production Order of OLED Backplane Wafers;
Received Follow-on Order
Kopin Corporation (Nasdaq: KOPN), a leading developer and
provider of high resolution micro displays, optical modules and
display sub-assemblies, today provided an update on its business
initiatives and financial results for the second quarter ended June
27, 2020.
"We are very pleased that strong demand for our products
continued in the second quarter with our total product revenues
growing by 50% year over year,” said Dr. John C.C. Fan, CEO of
Kopin." Revenue growth was driven by shipments for current defense
production programs along with funded development programs tied to
longer term revenue opportunities. Our strong pipeline of defense
development programs, which are in support of soldiers, fixed-wing
and rotary aircraft and armored vehicles, continues to expand and
is now the strongest in Kopin’s history. While some of these
development programs may not contribute significantly to product
revenue for the next year or two, or perhaps not all, we expect the
strength in our defense revenues to continue.”
Dr. Fan continued, “From an operational standpoint, our ongoing
initiatives to improve execution and manufacturing efficiencies are
starting to show results, and we achieved further progress in
reducing our cost structure. In the second quarter R&D and
SG&A were lower by 41% versus the second quarter of 2019, with
current internal R&D investments primarily focused on our
Organic Light Emitting Diode (OLED) displays. We recently announced
our latest achievement in the Lightning® 2.6K x 2.6K OLED display
(2560 x 2560 resolution) based on our duo-stack, ColorMaxTM
technology, which demonstrated breakthrough color fidelity (>
115% sRGB) combined with high efficiency (> 6 candela per
ampere) and brightness (> 1000 nits). In addition to shipping
our first production order of OLED backplane wafers in the quarter,
we also received a follow-on order.
“Our continued success would not be possible without the
dedication of our employees. Kopin has remained open and operating
during the COVID 19 lockdown due to the essential nature of our
defense-related business. I believe we have done a great job
coordinating the activities of our employees, both working on-site
and remotely. While we continue to take additional precautions, our
AMLCD products are made in a Class 10 cleanroom where our employees
have always been gowned and worn masks and gloves, providing
important protection.”
Dr. Fan concluded, “While we continue to manage through these
unusual times, we believe our strong defense business, our full
suite of micro displays, OLED micro displays development activities
and continued emphasis on efficiently managing our cost structure
will enable us to continue our momentum into the second half of
2020 and beyond.”
Second Quarter Financial Results
Product revenues for the second quarter ended June 27, 2020 were
$6.7 million, compared with $4.4 million for the second quarter
ended June 29, 2019, a 50% increase year over year. Funded
research, development and other revenues were $2.1 million for the
second quarter ended June 27, 2020 compared with $4.7 million for
the second quarter ended June 29, 2019. Included in the $4.7
million of revenues for the second quarter of 2019 was a one-time
license fee payment of $3.5 million. Total revenues were $8.8
million for the second quarter ended June 27, 2020 compared with
$9.1 million for the second quarter ended June 29, 2019.
Research and development (R&D) expenses for the second
quarter of 2020 were $2.2 million compared to $3.3 million for the
second quarter of 2019, a 33% decrease year over year. The decline
in R&D expenses is due in part to the licensing and sale of our
Golden-I Infinity and Solos technologies as part of our
commercialization strategy which we commenced in 2019. In fiscal
year 2020, we expect our R&D expenditures to primarily focus on
our display products, overlay weapon sights and organic light
emitting diode (“OLED”) display technologies.
Selling, general and administrative (SG&A) expenses were
$2.9 million for the second quarter of 2020, compared to $5.4
million for the second quarter of 2019, a 46% decrease year over
year. SG&A decreased for the three and six months ended June
27, 2020 as compared to the three and six months ended June 29,
2019 primarily due to a decrease in compensation expenses including
stock-based compensation, bad debt expense, professional fees,
information technology expenses, travel and accretion of the NVIS
contingent consideration.
The net loss attributable to controlling interest for the second
quarter of 2020 was $1.1 million, or 1 cent per share, compared
with net loss of $4.3 million, or 5 cents per share, for the second
quarter of 2019.
Net cash used in operating activities for the second quarter
ended June 27, 2020 was approximately $2.9 million. Kopin's cash
and equivalents and marketable securities were approximately $15.3
million at June 27, 2020 as compared to $21.8 million at December
28, 2019.
All amounts above are estimates and readers should refer to our
Form 10-Q for the quarter ended June 27, 2020, for final
disposition as well as important risk factors.
Conference Call
Kopin will host a conference call this morning at 8:30am ET. To
participate, please dial 888-254-3590 (U.S. and Canada) or
323-794-2551 (International). The call will also be available as a
live and archived audio webcast on the Investor Relations section
of Kopin's website at www.kopin.com.
About Kopin
Kopin Corporation is a leading developer and provider of
transmissive and reflective active matrix liquid crystal and
organic light emitting diode (OLED) micro displays for integration
into systems for military, industrial and consumer products.
Kopin's technology portfolio includes ultra-small displays, optics,
and low-power ASICs. For more information, please visit Kopin's
website at www.kopin.com.
Forward-Looking Statements
Statements in this press release may be considered
"forward-looking statements" within the meaning of Section 27A of
the Securities Act of 1933, as amended (the "Securities Act"), and
Section 21E of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), which are subject to the safe harbor created by
such sections. Words such as "expects," "believes," "can," "will,"
"estimates," and variations of such words and similar expressions,
and the negatives thereof, are intended to identify such
forward-looking statements. We caution readers not to place undue
reliance on any such "forward-looking statements," which speak only
as of the date made, and advise readers that these forward-looking
statements are not guarantees of future performance and involve
certain risks, uncertainties, estimates, and assumptions by us that
are difficult to predict. These forward-looking statements may
include statements with respect to: our expectation that the
strength in our defense revenues will continue; our belief that our
strong defense business, our full suite of micro displays, OLED
micro displays development activities and continued emphasis on
efficiently managing our cost structure will enable us to continue
our momentum into the second half of 2020 and beyond; and our
expectation that our R&D expenditures will primarily focus on
our display products, overlay weapon sights and organic light
emitting diode (“OLED”) display technologies. Various factors, some
of which are beyond our control, could cause actual results to
differ materially from those expressed in, or implied by, such
forward-looking statements. All such forward-looking statements,
whether written or oral, and whether made by us or on our behalf,
are expressly qualified by these cautionary statements and any
other cautionary statements that may accompany the forward-looking
statements. In addition, we disclaim any obligation to update any
forward-looking statements to reflect events or circumstances after
the date of this press release, except as may otherwise be required
by the federal securities laws. These forward-looking statements
are only predictions, subject to risks and uncertainties, and
actual results could differ materially from those discussed.
Important factors that could affect performance and cause results
to differ materially from management's expectations are described
in Part I, Item 1A. Risk Factors; Part II, Item 7. Management's
Discussion and Analysis of Financial Condition and Results of
Operations; and other parts of our Annual Report on Form 10-K for
the fiscal year ended December 28, 2019, or as updated from time to
time our Securities and Exchange Commission filings.
Kopin Corporation Supplemental Information
(Unaudited) Three Months Ended Six
Months Ended June 27,
2020 June 29, 2019
June 27, 2020 June 29, 2019 Revenues by Category (in
millions) Military Applications
$
4.5
$
1.8
$
8.0
$
3.2
Industrial Applications
1.4
2.1
3.6
4.6
Consumer Applications
0.2
0.5
0.4
1.2
Research and Development and other
2.7
4.7
4.7
5.6
Total
$
8.8
$
9.1
$
16.7
$
14.6
Stock-Based Compensation Expense Cost of
product revenues
$
16,000
$
32,000
$
30,000
$
64,000
Research and development
58,000
84,000
113,000
188,000
Selling, general and administrative
88,000
422,000
177,000
1,102,000
$
162,000
$
538,000
$
320,000
$
1,354,000
Other Financial Information Depreciation and
amortization
$
171,000
$
174,000
$
342,000
$
438,000
Kopin Corporation Condensed Consolidated
Statements of Operations (Unaudited) Three
Months Ended Six Months Ended June 27, 2020 June
29, 2019 June 27,
2020 June 29, 2019
Revenues: Net product revenues
$
6,670,303
$
4,435,401
$
12,589,510
$
9,049,257
Research and development and other revenues
2,144,343
4,674,732
4,103,742
5,603,801
8,814,646
9,110,133
16,693,252
14,653,058
Expenses: Cost of product revenues
4,779,577
5,242,514
10,427,424
11,119,591
Research and development
2,221,154
3,330,202
4,560,902
8,296,918
Selling, general and administration
2,909,366
5,375,671
6,341,457
11,658,474
9,910,096
13,948,387
21,329,783
31,074,983
Loss from operations
(1,095,450)
(4,838,254)
(4,636,532)
(16,421,925)
Other (expense) income, net
(5,733)
627,230
(92,642)
916,991
Loss before provision for income taxes and net loss (income)
from noncontrolling interest
(1,101,183)
(4,211,024)
(4,729,174)
(15,504,934)
Tax provision
(42,000)
(26,000)
(71,000)
(52,000)
Net loss
(1,143,183)
(4,237,024)
(4,800,174)
(15,556,934)
Net loss (income) attributable to noncontrolling interest
21,642
(23,367)
83,114
(34,384)
Net loss attributable to the controlling interest
$
(1,121,541)
$
(4,260,391)
$
(4,717,060)
$
(15,591,318)
Net loss per share: Basic and diluted
$
(0.01)
$
(0.05)
$
(0.06)
$
(0.20)
Weighted average number of common shares outstanding: Basic
and diluted
82,569,379
81,950,352
82,552,896
78,459,666
Kopin Corporation Condensed Consolidated
Balance Sheets (Unaudited) June 27, 2020 December 28, 2019 ASSETS Current assets: Cash
and marketable securities
$
15,262,516
$
21,782,244
Accounts receivable, net
6,682,329
6,023,250
Contract assets and unbilled receivables
2,509,258
921,082
Inventory
3,712,047
3,768,696
Prepaid and other current assets
1,397,051
1,269,369
Total current assets
29,563,201
33,764,641
Plant and equipment, net
1,328,207
1,473,341
Operating lease right of use assets
2,260,319
2,753,963
Equity investments
4,222,896
4,537,159
Other assets
253,750
517,411
Total assets
$
37,628,373
$
43,046,515
LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities:
Accounts payable
$
3,068,658
$
3,998,234
Accrued expenses
4,638,925
4,947,990
Operating lease liabilities
1,077,756
1,041,695
Taxes payable
506,000
525,000
Contract liabilities and billings in excess of revenues earned
1,687,403
796,794
Total current liabilities
10,978,742
11,309,713
Other long term liabilities
1,352,898
1,353,600
Operating lease liabilities, net of current portion
1,236,818
1,791,590
Total Kopin Corporation stockholders' equity
24,160,053
28,608,635
Noncontrolling interest
(100,137)
(17,023)
Total stockholders' equity
24,059,916
28,591,612
Total liabilities and stockholders' equity
$
37,628,373
$
43,046,515
View source
version on businesswire.com: https://www.businesswire.com/news/home/20200804005361/en/
For Further Information Please Contact:
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
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