- SOLOS® Smart Glasses Begin
Shipping
- Launches Golden-i™ Infinity
- Received First Production Order for
FWS-I Units
- Revises Full Year Revenue Guidance to
$30 million to $35 million
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 ended June 30, 2018.
“The commercialization of SOLOS, our smart glasses for cyclists,
triathletes and runners, was a highlight of the second quarter,”
said Dr. John C.C. Fan, CEO of Kopin Corp. “SOLOS, which has been
described as the most advanced AR smart glasses available for
sports and consumer fitness, became available in May. SOLOS uses
our Pupil® display module and Whisper® voice extraction technology
to allow athletes to view data as if it is floating in front of
them and receive information through audio messages. SOLOS smart
glasses are currently available at www.solos-wearables.com and we
have started expanding distribution to select locations of sports
and technology retailers across the country. In addition to
partnering with USA Cycling, SOLOS was recently named the Official
Smart Glasses Partner of IRONMAN, which hosts endurance sporting
events around the globe. We continue to identify opportunities like
the IRONMAN partnership to raise the visibility of SOLOS with key
audiences. It is still early days for SOLOS but we are excited
about the reception from athletes around the world.
“We introduced a second revolutionary product in the quarter –
the Golden- iTM Infinity which is targeted to industrial workers.
The Golden-i Infinity smart screen is the first wearable device
that supports Android and Windows 10-based computing solutions. The
Golden-i Infinity utilizes our display and Whisper voice technology
and it connects to a worker’s smart phone or mini PC via a cable to
make the headset lighter and less costly. We have seen significant
interest from major industrial and enterprise companies. We expect
to begin pilot tests in September with Fortune 500 customers and
the professional value added reseller (VAR) channels.”
Dr. Fan continued, “We were pleased to see that the US Defense
Department and Lockheed Martin recently reached an agreement for a
new order of the F-35 fighter jets, where Kopin is the sole
supplier of displays for the pilots’ helmets. This order supports
the F-35 program as a $100 million long term revenue opportunity
for Kopin. In the second quarter, we were finally fully qualified
for the FWS-I program and we are delighted to have received the
first production order which we expect to begin shipping in October
2018. Although it is several months later than originally
estimated, we are excited that production has started. We expect
the FWS program, like our previous TWS program, to last for many
years and we believe it is also a $100 million revenue opportunity
for Kopin. In the second quarter of 2018 we commenced development
work on a display system for a recently awarded armored vehicle
program. Finally, we continue to see strong forecasted demand from
our customers manufacturing a variety of AR headsets targeting the
industrial wearable market. We believe their traction proves that
AR is close to an inflection point for enterprise and industrial
customers.
“Overall, we are pleased with the progress of our efforts in
moving our development activities to products, production and
commercialization. However, some delays in our business ramp up,
primarily in the military, will impact our anticipated rapid
revenue growth in the second half of this year," concluded Dr.
Fan.
Second Quarter Financial Results
Total revenues for the second quarter ended June 30, 2018 were
$5.9 million, compared with $5.9 million for the second quarter
ended June 30, 2017.
Research and development (R&D) expenses for the second
quarter of 2018 were $4.5 million compared to $4.7 million for the
second quarter of 2017.
Selling, general and administrative (SG&A) expenses were
$6.9 million for the second quarter of 2018 compared to $5.2
million for the second quarter of 2017.
Net loss attributable to the controlling interest for the second
quarter of 2018 was $9.2 million, or $0.13 per share, compared with
net loss of $7.3 million, or $0.10 per share, for the second
quarter of 2017.
During the second quarter of 2018 Kopin had 11 patents granted
and filed for 6 new applications. Kopin has over 300 patents and
patents pending, almost all of which are related to wearable
applications.
Net cash used in operating activities for the second quarter
ended June 30, 2018 was approximately $13.2 million. Kopin has
maintained a strong financial position with cash and equivalents
and marketable securities were approximately $53.4 million at June
30, 2018.
“We expect full year revenues will be $30 million to $35
million, below the $35-40 million we originally expected,” said
Richard Sneider, Kopin’s CFO. “There is no change to our
expectation of achieving breakeven on profitability by the end of
2019.” Effective December 31, 2017, Kopin adopted ASC Topic
606 using the “modified retrospective” approach, meaning the
standard was applied only to the financial results of fiscal year
2018 with a cumulative adjustment to retained earnings. Under this
transition method, Kopin applied the standard only to contracts
that were not complete at the initial adoption date.
The following tables shows the impact of adoption of Topic 606
on the three and six months periods ended June 30, 2018 results of
operations (amount in millions):
Three Months Ended June 30,
2018
Statement of Operations
As Reported
Balances WithoutAdoption
ofTopic 606
Effect
ofChangeHigher/(Lower)
Net product revenues
$ 4.5 $ 4.5
$ - Research and development revenues
1.5 1.6
(0.1
)
Cost of product revenues
3.5 3.5 - Net loss
attributable to the controlling interest
$
(9.2 ) $ (9.2 )
$ (0.1 ) Six Months Ended June 30,
2018 Statement of Operations As Reported
Balances WithoutAdoption
ofTopic 606
Effect
ofChangeHigher/(Lower)
Net product revenues
$ 9.5 $ 11.0
$ (1.5 ) Research and development revenues
2.1 2.3 (0.2 ) Cost of product revenues
7.6 8.6 (1.0 ) Net loss attributable to
the controlling interest
$ (14.8 )
$ (14.1 ) $ (0.7
)
All amounts above are estimates and readers should refer to our
Form 10-Q for the quarter ended June 30, 2018 for final
disposition. To participate on the conference call, please dial
201-689-8354 (U.S. and Canada) or 877-709-8150 (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
SOLOS, Golden-i, Whisper and Kopin are registered 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 expectation
to begin Golden-i Infinity pilot tests in September with Fortune
500 customers and the professional value added reseller (VAR)
channels; our belief that the F-35 program is a $100 million
opportunity for Kopin long term; we expect to begin shipments of
FWS-I units in October, 2018; our expectation that the FWS program,
like our previous TWS program, will last for many years and we
believe it is also a $100 million revenue opportunity for Kopin;
our belief that the good forecasted demand from our customers
proves that AR is close to an inflection; and our expectation that
our revenues for the fiscal year 2018 will be in the range of $30
to $35 million. 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, delays in the
development or production issues with Golden-I Infinity units may
prevent pilot tests to begin in September to any customers;
development or production issues with the Golden-I Infinity
products, lack of demand for the Golden-i Infinity product or other
issues may prevent the sale of Golden-i Infinity; development or
production issues may prevent the FWS-I units being shipped in
October, 2018; either or both the F-35 or FWS-I programs could be
cancelled; we may not receive additional orders for our components
for the F-35 and FWS-I programs; we may be designed out of the F-35
and FWS-I programs; our enterprise customers expectations of demand
may be wrong and not occur which would negatively impact sales of
our components to them; we may be unable to roll out SOLOS through
other distribution formats during 2018 due to a lack of demand,
cost, or our inexperience in selling a device like SOLOS smart
glasses; our revenues for the fiscal year 2018 may not be in the
range of $30 to $35 million; 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, 2017, 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
Condensed Consolidated Statements of Operations
(Unaudited) Three Months Ended Six Months
Ended
June 30,
2018
July 1,
2017
June 30,
2018
July 1,
2017
Revenues: Net product revenues $ 4,472,079 $ 4,979,400 $ 9,516,888
$ 8,912,543 Research and development revenues
1,471,819 948,069
2,080,630 1,393,054
5,943,898 5,927,469 11,597,518 10,305,597 Expenses: Cost of
product revenues 3,497,750 4,117,226 7,559,941 7,234,583 Research
and development 4,526,156 4,678,221 8,977,809 8,960,090 Selling,
general and administrative
6,913,503
5,200,261 13,844,913
10,841,947 14,937,409 13,995,708
30,382,663 27,036,620 Loss from operations (8,993,511 )
(8,068,239 ) (18,785,145 ) (16,731,023 ) Other (expense)
income, net
(52,162 )
807,699 4,267,368
384,606
Loss before (provision) benefit for income
taxes and net loss (income) from noncontrolling interest
(9,045,673 ) (7,260,540 ) (14,517,777 ) (16,346,417 )
(Provision) benefit for income taxes
(201,000
) -
(201,000 ) 1,146,000
Net loss (9,246,673 ) (7,260,540 ) (14,718,777 )
(15,200,417 )
Net loss (income) attributable to
noncontrolling interest
5,716 (71,431
) (58,458 )
10,007 Net loss attributable to the
controlling interest
$ (9,240,957
) $ (7,331,971
) $ (14,777,235
) $ (15,190,410
) Net loss per share: Basic and diluted $ (0.13
) $ (0.10 ) $ (0.20 ) $ (0.22 ) Weighted average number of
common shares outstanding: Basic and diluted
73,916,548 70,626,542
73,497,446
67,582,615 Kopin
Corporation Condensed Consolidated Balance Sheets
(Unaudited)
June 30,
2018
December 30,
2017
ASSETS Current assets: Cash and marketable securities $ 53,423,704
$ 68,755,684 Accounts receivable, net 2,785,081 4,659,986 Inventory
4,257,702 5,080,797 Contract assets and unbilled receivables
2,384,307 - Prepaid and other current assets 1,274,005
1,243,029 Total current assets
64,124,799 79,739,496 Land, equipment and improvements, net
5,125,629 5,077,043 Goodwill and intangible assets 2,210,357
2,663,883 Equity investment 3,759,000 - Other assets
4,123,244 3,842,068 Total assets $
79,343,029 $ 91,322,490 LIABILITIES AND
STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $
3,894,049 $ 4,918,605 Accrued expenses 4,054,172 4,351,537 Income
tax payable 161,620 1,416,892 Deferred income taxes 863,000 520,000
Contract liabilities and billings in excess of revenue earned
317,094 896,479 Total current
liabilities 9,289,935 12,103,513 Other long term liabilities
1,939,618 1,569,253 Lease commitments 264,238 269,877 Total
Kopin Corporation stockholders' equity 68,539,215 78,099,269
Noncontrolling interest (689,977 ) (719,422 ) Total
stockholders' equity 67,849,238 77,379,847
Total liabilities and stockholders' equity $ 79,343,029
$ 91,322,490
Kopin Corporation
Supplemental Information (Unaudited)
Three Months Ended Six Months Ended
June 30,
2018
July 1,
2017
June 30,
2018
July 1,
2017
Display Revenues by Category (in millions) Military
Applications $ 1.6 $ 2.2 $ 3.9 $ 3.6 Industrial Applications 1.2
1.4 3.0 2.9 Consumer Electronics Applications 1.5 0.9 2.4 1.5
Research and Development 1.5 1.0 2.1 1.4 Other 0.1
0.4 0.2 0.9 Total $ 5.9 $ 5.9 $ 11.6 $ 10.3
Stock-Based Compensation Expense Cost of component
revenues $ 156,000 $ 159,000 $ 266,000 $ 263,000 Research and
development 194,000 195,000 468,000 413,000 Selling, general and
administrative 939,000 322,000 1,954,000
1,292,000 $ 1,289,000 $ 676,000 $ 2,688,000 $ 1,968,000
Other Financial Information Depreciation and
amortization $ 575,000 $ 699,000 $ 1,130,000 $ 1,143,000
View source
version on businesswire.com: https://www.businesswire.com/news/home/20180806005219/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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