- 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 CorporationRichard
Sneider, 508-870-5959Treasurer and Chief Financial
OfficerRichard_Sneider@kopin.comorMarket Street PartnersJoann
Horne, 415-445-3233JHorne@marketstreetpartners.com
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