- 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 the first 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’s
mid-field and far-field capabilities at CES 2018; and our belief
that our military business is ramping with enterprise 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
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version on businesswire.com: http://www.businesswire.com/news/home/20171107005498/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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