- $9.9 million revenues, a 12% increase year over year
- Developed World’s First 35,000 nit HDR Green OLED
Microdisplay
- Inked Development Agreement with Leading Japanese Company for
Color LED Microdisplay
- Introduced the First All-Plastic Pancake® Optics for VR and
MR
Kopin® Corporation (Nasdaq: KOPN), a leading provider of
high-resolution microdisplays and subsystems for defense,
enterprise and consumer augmented reality (AR), virtual reality
(VR) and mixed reality (MR) systems, today provided an update on
its business initiatives and reported financial results for the
second quarter ended June 26, 2021.
“We are pleased with our second quarter results as we continued
to see growing demand for our products across our key business
segments, including defense, enterprise and consumer,” said John
C.C. Fan, CEO of Kopin. “In our defense business, we remain on
track as two development programs have entered low-rate initial
production (LRIP) and we expect another program to enter LRIP in
the fourth quarter of 2021. Our F-35 Joint Strike Fighter program
continues strong as we announced during the quarter an additional
order that extends deliveries into the first quarter of 2022.
During the second quarter ended June 26, 2021, we reduced shipments
of our product for FWS-I thermal weapon sight systems while our
customer makes system and production enhancements. We are working
closely with them and expect the lower shipment rate to continue
during the third fiscal quarter and then to increase in the fourth
fiscal quarter of 2021 to make up some of the shortfall. Despite
this short-term slow down, the program remains very strong, and we
expect a follow-on order in the third quarter of 2021."
Dr. Fan continued, “As discussed during our first quarter call,
we have continued to increase our R&D activities as we see
significant opportunities in the AR and VR space. Our
customer-funded R&D revenue increased approximately 59% year
over year, as a result of driving interest in our next generation
displays and display technology programs. We continued significant
advancements during the quarter with our organic light emitting
diode display (OLED) technologies, including the world’s first
35,000 nit HDR green OLED microdisplay that delivers an
unprecedented brightness level which is an important feature for
many avionic and AR applications. We also announced what we believe
is the first All-Plastic Pancake™ Optics. These patented optics
provide dramatic improvements in both size and weight compared to
the glass optics available today, removing a significant barrier to
consumer acceptance of AR and VR glasses and headset designs. We
have already received interest from potential customers about our
Pancake Optics,” said Dr. Fan.
“We also just announced a multi-year development agreement with
a leading global consumer electronics partner to develop a
1"-diagonal 2K x 2K full-color LED microdisplay.
Superhigh-resolution full-color LED microdisplays with brightness
approaching 100,000 nits can create new and exciting applications
for microdisplays and satisfy the demanding requirements of certain
AR and MR applications. The LED microdisplays from this
collaboration will expand our microdisplay portfolio, making us the
world's only provider of LCD, LCOS, OLED and LED microdisplays on
silicon. Our wide portfolio of products allows us to offer our
customers the best product and technology solution for their
particular application.”
“In short, we continue to grow our current business while we
actively innovate and advance our technology, paving the path for
future growth in AR/VR/MR applications. The market conditions are
favorable, and we believe we are well positioned to capitalize on
them,” concluded Dr. Fan.
Second Quarter Financial Results
Total revenues for the second quarter ended June 26, 2021, were
$9.9 million, compared with $8.8 million for the second quarter
ended June 27, 2020, a 12% increase year over year.
Cost of Product Revenues for the second quarter ended June 26,
2021, was $6.0 million, compared with $4.8 million for the second
quarter ended June 27, 2020. The increase in cost of product
revenues as a percentage of net product revenues for the three
months ended June 26, 2021, as compared to the three months ended
June 27, 2020, was primarily due to lower manufacturing
efficiencies driven by lower volumes of FWSi production.
Research and development expenses for the second quarter of 2021
were $3.9 million compared with $2.2 million for the second quarter
of 2020, a 75% increase year over year. The increase was driven by
an increase in research and development costs for our
customer-funded defense programs and internal OLED development
activities.
Selling, general and administrative (SG&A) expenses were
$4.0 million for the second quarter of 2021 compared with $2.9
million for the second quarter of 2020. SG&A expenses increased
for the three months ended June 26, 2021, as compared to the three
months ended June 27, 2020, primarily due to increases in
stock-based compensation and bad debt expense which were partially
offset by lower professional fees. Non-GAAP SG&A expenses were
$3.7 million for the second quarter of 2021, compared to $2.8
million for the second quarter of 2020, a 31% increase year over
year. A table that reconciles this non-GAAP financial measure to
SG&A expenses, as reported, is included below.
Net Loss Attributable to Kopin Corporation for the second
quarter of 2021 was $3.8 million, or $0.04 per share, compared with
Net Loss Attributable to Kopin Corporation of $1.1 million, or
$0.01 per share, for the second quarter of 2020. Non-GAAP Net Loss
Attributable to Kopin Corporation for the second quarter of 2021
was $3.5 million, or $0.04 per share, compared with Non-GAAP Net
Loss Attributable to Kopin Corporation of $1.0 million, or $0.01
per share, for the second quarter of 2020. A table that reconciles
these non-GAAP financial measures to Net Loss Attributable to Kopin
Corporation and Net Loss Per Share, as reported, is included
below.
Net Cash Used in Operating Activities for the second quarter
ended June 26, 2021, was approximately $5.4 million. Kopin's Cash
and Equivalents and Marketable Securities were approximately $30.8
million at June 26, 2021 as compared to $20.7 million at December
26, 2020. During the three months ended June 26, 2021, we sold
92,335 shares for gross proceeds of approximately $0.8 million
(average of $9.02 per share) before deducting broker expenses paid
by us of less than $0.1 million, pursuant to our existing
at-the-market (ATM) program. For the six months ended June 26th,
2021, we sold an aggregate of 2,496,697 shares for gross proceeds
of approximately $16.8 million (average of $6.74 per share) before
deducting broker expenses paid by us of $0.5 million, pursuant to
our existing ATM dated as of March 5, 2021, and our previous ATM
program that has since terminated pursuant to its terms. On June
28, 2021 (the first business day of our fiscal third quarter), we
sold 600,000 shares of common stock for gross proceeds of $4.8
million (average of $8.06 per share), before deducting broker
expenses paid by us of less than $0.2 million, pursuant to our ATM
program.
We have no long-term debt.
All amounts above are estimates and readers should refer to our
Form 10-Q for the quarter ended June 26, 2021 for final disposition
as well as important risk factors.
Kopin Corporation
DISCUSSION REGARDING THE USE OF NON-GAAP FINANCIAL MEASURES
Our earnings release contains some or all of the following
financial measures that have not been calculated in accordance with
United States Generally Accepted Accounting Principles (“GAAP”):
(i) non-GAAP SG&A expenses, (ii) non-GAAP Net Loss Attributable
to Kopin Corporation, and (iii) non-GAAP Net Loss Per Share. A
non-GAAP financial measure is a numerical measure of a company’s
historical or future financial performance, financial position or
cash flows that excludes amounts, or is subject to adjustments that
have the effect of excluding amounts, that are included in the most
directly comparable measure calculated and presented in accordance
with GAAP in the statements of operation, balance sheets, or
statements of cash flows of a company; or, includes amounts, or is
subject to adjustments that have the effect of including amounts,
that are excluded from the most directly comparable measure so
calculated and presented. As set forth in the “Unaudited
Reconciliations of Non-GAAP Financial Measures” table found below,
we derive such non-GAAP financial measures by excluding stock-based
compensation expenses from the respective GAAP financial measure
that is most directly comparable to each non-GAAP financial
measure. Management uses these non-GAAP financial measures to
evaluate our operating performance and compare it against past
periods, make operating decisions, forecast for future periods, and
compare our operating performance against peer companies. These
non-GAAP financial measures provide management with additional
means to understand and evaluate the operating results and trends
in our ongoing business by eliminating an item that management
believes might otherwise make comparisons of our ongoing business
with prior periods and competitors more difficult, obscure trends
in ongoing operations or reduce management’s ability to make
forecasts.
We provide investors with a Non-GAAP Net Loss Attributable to
Kopin Corporation and a Non-GAAP Net Loss Per Share because we
believe it is important for investors to be able to closely monitor
and understand changes in our ability to generate income from
ongoing business operations. We believe these Non-GAAP financial
measures give investors an additional method to evaluate historical
operating performance and identify trends, an additional means of
evaluating period-over-period operating performance and a method to
facilitate certain comparisons of our operating results to those of
our peer companies. We also believe that providing a Non-GAAP Net
Loss Attributable to Kopin Corporation and a Non-GAAP Net Loss Per
Share allows investors to assess the extent to which our ongoing
operations impact our overall financial performance. We further
believe that providing non-GAAP Net Loss Attributable to Kopin
Corporation and non-GAAP Net Loss Per Share allows investors to
assess the overall financial performance of our ongoing operations
by eliminating the impact of stock-based compensation expense,
which may not occur in each period presented and which may
represent non-cash items unrelated to our ongoing operations.
We calculate a Non-GAAP SG&A expenses, a Non-GAAP Net Loss
Attributable to Kopin Corporation and a Non-GAAP Net Loss Per Share
by eliminating stock-based compensation expense from SG&A
expenses, Net Loss Attributable to Kopin Corporation, and Net Loss
Per Share, respectively, each of which is derived from our
condensed consolidated statements of operations. We exclude
stock-based compensation because (1) the total amount of expense is
partially outside of our control because it is based on factors
such as stock price, which may be unrelated to our performance
during the period in which the expense is incurred and (2) the
amount of the expense can vary significantly between companies due
to factors that can be outside of the control of such
companies.
The non-GAAP financial measures presented in the table above
should not be considered in isolation and are not an alternative
for the respective GAAP financial measure that is most directly
comparable to each such non-GAAP financial measure. Readers are
cautioned against placing undue reliance on these non-GAAP
financial measures and are urged to review and consider carefully
the adjustments made by management to the most directly comparable
GAAP financial measures to arrive at these non-GAAP financial
measures. Non-GAAP financial measures may have limited value as
analytical tools because they may exclude certain expenses that
some investors consider important in evaluating our operating
performance or ongoing business performance. Further, non-GAAP
financial measures are likely to have limited value for purposes of
drawing comparisons between companies as a result of different
companies potentially calculating similarly titled non-GAAP
financial measures in different ways because non-GAAP measures are
not based on any comprehensive set of accounting rules or
principles.
Conference Call
Kopin will host a conference call this morning at 8:30am ET. To
participate, please dial 1-800-437-2398 (U.S. and Canada) or
1-323-289-6576 (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
innovative wearable technologies and critical components for
integration into wearable computing systems for defense, industrial
and consumer products. Kopin's technology portfolio includes
ultra-small displays, optics, modules and low-power ASICs. For more
information, please visit Kopin's website at www.kopin.com.
Kopin and Pancake are trademarks of Kopin Corporation.
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 , and Section 21E of the
Securities Exchange Act of 1934, as amended, 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 another program will enter
low-rate initial production in the fourth quarter of 2021; our
expectation that the lower shipment rate of FWS-I systems to
continue during the third fiscal quarter and then to increase in
the fourth fiscal quarter of 2021 to make up some of the shortfall;
and our expectation of a follow-on order for FWS-I systems in the
third quarter of 2021; growth in AR/VR/MR applications; and our
belief that we are well positioned to capitalize on favorable
market conditions. 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. 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 26, 2020, or as updated from time to time our
Securities and Exchange Commission filings.
Kopin Corporation Unaudited Reconciliations of Non-GAAP
Financial Measures (Unaudited) Three Months
Ended Six Months Ended June 26, 2021 June
27, 2020 June 26,
2021 June 27, 2020
GAAP Selling, general and administration
$
4,040,979
$
2,909,366
$
9,946,685
$
6,341,457
Stock-based compensation expense
359,000
88,000
2,741,000
177,000
Non-GAAP Selling, general and adminstration
$
3,681,979
$
2,821,366
$
7,205,685
$
6,164,457
GAAP Net loss attributable to the controlling
interest
$
(3,848,867
)
$
(1,121,541
)
$
(7,995,105
)
$
(4,717,060
)
Stock-based compensation expense
359,000
88,000
2,741,000
177,000
Non-GAAP Net loss attributable to the controlling interest
$
(3,489,867
)
$
(1,033,541
)
$
(5,254,105
)
$
(4,540,060
)
Net loss per share: Basic and diluted
$
(0.04
)
$
(0.01
)
$
(0.09
)
$
(0.06
)
Stock-based compensation expense per share
(0.00
)
(0.00
)
(0.03
)
(0.00
)
Basic and diluted Non-GAAP
$
(0.04
)
$
(0.01
)
$
(0.06
)
$
(0.05
)
Kopin Corporation
Supplemental
Information
(Unaudited)
Three Months Ended Six Months Ended
June 26, 2021
June 27, 2020 June 26, 2021 June
27, 2020 Revenues by Category (in millions)
Defense Applications
$
3.8
$
4.5
$
8.8
$
8.0
Industrial Applications
2.6
1.4
4.7
3.6
Consumer and Other Applications
0.5
0.8
1.0
1.0
Research and Development
2.7
1.7
6.3
3.7
License and Royalties
0.3
0.4
0.8
0.4
Total
$
9.9
$
8.8
$
21.6
$
16.7
Stock-Based Compensation Expense Cost of
product revenues
$
35,000
$
16,000
$
169,000
$
30,000
Research and development
121,000
58,000
215,000
113,000
Selling, general and administrative
359,000
88,000
2,741,000
177,000
$
515,000
$
162,000
$
3,125,000
$
320,000
Other Financial Information Depreciation and
amortization
$
207,000
$
171,000
$
412,000
$
342,000
Kopin Corporation Condensed Consolidated Statements of
Operations (Unaudited) Three Months Ended
Six Months Ended June 26,
2021 June 27, 2020
June 26, 2021 June 27, 2020 Revenues: Net product revenues
$
6,928,819
$
6,670,303
$
14,497,663
$
12,589,509
Research and development and other revenues
2,976,437
2,144,343
7,083,961
4,103,742
9,905,256
8,814,646
21,581,624
16,693,251
Expenses: Cost of product revenues
6,044,543
4,779,577
12,441,213
10,427,424
Research and development
3,886,253
2,221,154
7,449,553
4,560,902
Selling, general and administration
4,040,979
2,909,366
9,946,685
6,341,457
13,971,775
9,910,097
29,837,451
21,329,783
Loss from operations
(4,066,519
)
(1,095,451
)
(8,255,827
)
(4,636,532
)
Other income (expense), net
249,636
(5,732
)
286,221
(92,642
)
Loss before provision for income taxes and net loss from
noncontrolling interest
(3,816,883
)
(1,101,183
)
(7,969,606
)
(4,729,174
)
Tax provision
(32,000
)
(42,000
)
(65,000
)
(71,000
)
Net loss
(3,848,883
)
(1,143,183
)
(8,034,606
)
(4,800,174
)
Net loss attributable to noncontrolling interest
16
21,642
39,501
83,114
Net loss attributable to the controlling interest
$
(3,848,867
)
$
(1,121,541
)
$
(7,995,105
)
$
(4,717,060
)
Net loss per share: Basic and diluted
$
(0.04
)
$
(0.01
)
$
(0.09
)
$
(0.06
)
Weighted average number of common shares outstanding: Basic
and diluted
88,815,356
82,569,379
88,096,822
82,552,896
Kopin Corporation Condensed Consolidated Balance
Sheets (Unaudited) June
26, 2021 December 26,
2020 ASSETS Current assets: Cash and marketable
securities
$
30,784,280
$
20,748,550
Accounts receivable, net
7,443,210
9,260,865
Contract assets and unbilled receivables
3,196,477
4,455,756
Inventory
6,249,403
3,521,753
Prepaid and other current assets
2,329,883
1,469,256
Total current assets
50,003,253
39,456,180
Plant and equipment, net
1,860,899
1,626,930
Operating lease right of use assets
1,258,001
1,780,039
Equity investments
4,540,210
4,523,525
Other assets
162,473
162,473
Total assets
$
57,824,836
$
47,549,147
LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities:
Accounts payable
$
5,099,714
$
5,606,910
Accrued expenses
4,964,484
4,295,315
Customer deposits
2,640,321
3,950,031
Deferred tax liabilities
540,617
554,031
Contract liabilities and billings in excess of revenues earned
2,076,467
1,493,847
Operating lease liabilities
762,139
982,375
Total current liabilities
16,083,742
16,882,509
Other long term liabilities
1,612,312
1,546,737
Operating lease liabilities, net of current portion
488,392
821,306
Total Kopin Corporation stockholders' equity
39,816,727
28,435,431
Noncontrolling interest
(176,337
)
(136,836
)
Total stockholders' equity
39,640,390
28,298,595
Total liabilities and stockholders' equity
$
57,824,836
$
47,549,147
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210803005279/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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