- $10.9 million Revenues, a 14% increase year over year
- 9th Straight Quarter of Year over Year Growth
- FWS-I Shipments Ramping
- Strength in 3D AOI Markets
- Continued Strong Growth in Customer-Funded R&D for AR/VR
Microdisplays
- Progress in Technology Development and Commercialization of
OLED
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
third quarter ended September 25, 2021.
“We had strong third quarter results, with revenues increasing
14% year over year, reflecting growing demand across our key
markets, including defense, industrial and consumer,” said Dr. John
C.C. Fan, CEO of Kopin. “This quarter was our 9th straight quarter
of year-on-year growth. Revenues were again driven largely by our
defense production programs and our customer-funded development
programs. In particular, our third quarter customer-funded R&D
revenue increased approximately 60% year over year, primarily
driven by accelerating interest in our next generation of displays
and our design and manufacturing expertise in rugged
'higher-level-assemblies' which are sub-systems that include our
displays, optics, electronics and ruggedized housings.”
“On our second quarter results of operations call on August 3,
2021, we announced that we reduced shipments of our product for the
FWS-I thermal weapon sight program while we worked with our
customer to develop better processes for increased production
rates. I am pleased to report that the process enhancements have
been successfully implemented and we expect to have our highest
shipping rate of products for the FWS-I program in the fourth
quarter of 2021. As a reminder, the FWS-I thermal sight system uses
a high-precision video 'see-through' AR optical module using our
CyberDisplay® LCDs and our custom-designed Pancake® optics.”
Dr. Fan continued, “Other successes in the third quarter also
included the receipt of a previously reported $1.1 million order to
provide eyepieces for the Joint Effects Targeting System (JETS),
one of the two low rate initial production programs we reported in
the second quarter of 2021, which will be delivered through 2022.
Our third quarter enterprise product revenues increased 65% over
the same quarter last year on the strength of sales into the 3D
Automated Optical Inspection (AOI) market. During the third quarter
of 2021 we announced a $3.2 million order from JUTZE Intelligence
Technology (JUTZE) for our Spatial Light Modulators (SLMs) for
JUTZE's 3D AOI and 3D Solder Paste Inspection (3D SPI) equipment.
We also continued to make progress in commercializing our organic
light emitting diode display (OLED) technologies with additional
orders for our OLED.”
“We are also on track with our defense customer-funded
development programs. We previously announced two development
programs entered low-rate initial production during the second
quarter of 2021 and we expect another defense development program
to enter low-rate initial production during the fourth quarter of
2021. In addition, we have a robust pipeline of defense programs in
development which we expect will fuel our defense revenues in the
coming years,” said Dr. Fan.
“In the third quarter of 2021, like most companies, we faced
many supply chain related challenges. To this point we have not
experienced any material negative effects from gaps in material
availability, however we continue to closely monitor and manage new
challenges.”
“In short, our business is strong as we actively innovate and
advance our technology roadmap, paving the path for future growth
in AR/VR/MR applications. We believe we are the world's only
provider of LCD, LCOS, OLED and micro-LED microdisplays on silicon.
The current market trends indicate exciting and growing
opportunities especially in the Metaverse VR platform. Kopin was a
pioneer and has been focusing on this radical transformation for
many years as it progresses from defense, to enterprise, and now
into consumer applications. We believe we are well positioned to
capitalize on these opportunities. We are looking forward to the
coming CES in January 2022, where we plan to exhibit our recent
exciting developments,” concluded Dr. Fan.
Third Quarter Financial Results
Total revenues for the third quarter ended September 25, 2021,
were $10.9 million, compared with $9.5 million for the third
quarter ended September 26, 2020, a 14% increase year over
year.
Cost of Product Revenues for the third quarter ended September
25, 2021, was $5.1 million, compared with $4.8 million for the
third quarter ended September 26, 2020. The increase in cost of
product revenues as a percentage of net product revenues for the
three months ended September 25, 2021, as compared to the three
months ended September 26, 2020, was primarily due to lower
manufacturing efficiencies driven by lower volumes of FWS-I
production.
Research and development expenses for the third quarter of 2021
were $ 3.8 million compared with $2.7 million for the third quarter
of 2020, a 38% 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 third quarter of 2021 compared with $3.1
million for the third quarter of 2020. SG&A expenses increased
for the three months ended September 25, 2021, as compared to the
three months ended September 26, 2020, primarily due to increases
in compensation costs, stock-based compensation and bad debt
expense, which were partially offset by lower professional fees.
Non-GAAP SG&A expenses were $3.6 million for the third quarter
of 2021, compared to $2.9 million for the third quarter of 2020, a
25% 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 third quarter
of 2021 was $2.1 million, or $0.02 per share, compared with Net
Loss Attributable to Kopin Corporation of $1.0 million, or $0.01
per share, for the third quarter of 2020. Non-GAAP Net Loss
Attributable to Kopin Corporation for the third quarter of 2021 was
$1.7 million, or $0.02 per share, compared with Non-GAAP Net Loss
Attributable to Kopin Corporation of $0.8 million, or $0.01 per
share, for the third 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 third quarter
ended September 25, 2021, was approximately $3.5 million. Kopin's
Cash and Equivalents and Marketable Securities were approximately
$31.8 million at September 25, 2021 as compared to $20.7 million at
December 26, 2020. During the three months ended September 25,
2021, 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
existing at-the-market (ATM) program. For the nine months ended
September 25, 2021, we sold an aggregate of 3,096,697 shares for
gross proceeds of approximately $21.7 million (average of $7.00 per
share) before deducting broker expenses paid by us of $0.7 million,
pursuant to our existing ATM, and our previous ATM program that has
since terminated pursuant to its terms.
We have no long-term debt.
All amounts above are estimates and readers should refer to our
Form 10-Q for the quarter ended September 25, 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 Non-GAAP SG&A expenses, Non-GAAP Net Loss
Attributable to Kopin Corporation and 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 below
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, CyberDisplay and Pancake are registered 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 to have our highest shipping rate of
products for the FWS-I program in the fourth quarter of 2021; our
expectation that we will deliver eyepieces for the Joint Effects
Targeting System (JETS) through 2022; our expectation that another
defense development program will enter low-rate production during
the fourth quarter of 2021; our expectation that our defense
development programs will fuel our defense revenues in the coming
years; our expectation that many of our funded development programs
will progress to product production as they mature; our belief that
we are the world's only provider of LCD, LCOS, OLED and micro-LED
microdisplays on silicon; our belief that the current market trends
indicate growing opportunities and as we are positioned well to
capitalize on these opportunities; and our expectation that at the
coming CES in January 2022 we will exhibit our recent exciting
developments. 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. Kopin
disclaims 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
Nine Months Ended
September 25, 2021
September 26, 2020
September 25, 2021
September 26, 2020
GAAP Selling, general and administration
$
4,035,998
$
3,079,567
$
13,982,682
$
9,421,024
Stock-based compensation expense
424,000
197,000
3,165,000
374,000
Non-GAAP Selling, general and administration
$
3,611,998
$
2,882,567
$
10,817,682
$
9,047,024
GAAP Net loss attributable to the controlling interest
$
(2,128,790
)
$
(957,440
)
$
(10,123,895
)
$
(5,674,500
)
Stock-based compensation expense
424,000
197,000
3,165,000
374,000
Non- GAAP Net loss attributable to the controlling interest
$
(1,704,790
)
$
(760,440
)
$
(6,958,895
)
$
(5,300,500
)
Net loss per share: Basic and diluted
$
(0.02
)
$
(0.01
)
$
(0.11
)
$
(0.07
)
Stock-based compensation expense per share
(0.00
)
(0.00
)
(0.03
)
(0.01
)
Basic and diluted Non-GAAP
$
(0.02
)
$
(0.01
)
$
(0.08
)
$
(0.06
)
Kopin Corporation
Supplemental
Information
(Unaudited)
Three Months Ended
Nine Months Ended
September 25, 2021
September 26, 2020
September 25, 2021
September 26, 2020
Display Revenues by Category (in millions) Defense
$
3.5
$
4.8
$
12.3
$
12.8
Industrial/Enterprise
2.7
1.7
7.4
5.2
Consumer
0.4
-
1.3
0.5
Other
-
-
0.1
0.6
R&D
4.1
2.6
10.4
6.3
License and Royalties
0.2
0.5
1.0
0.8
Total
$
10.9
$
9.5
$
32.5
$
26.2
Stock-Based Compensation Expense Cost of product
revenues
$
38,000
$
41,000
$
207,000
$
71,000
Research and development
180,000
81,000
395,000
194,000
Selling, general and administrative
424,000
197,000
3,165,000
374,000
$
642,000
$
319,000
$
3,767,000
$
639,000
Other Financial Information Depreciation and
amortization
$
154,000
$
133,000
$
566,000
$
474,000
Kopin Corporation
Condensed Consolidated
Statements of Operations
(Unaudited)
Three Months Ended
Nine Months Ended
September 25, 2021
September 26, 2020
September 25, 2021
September 26, 2020
Revenues: Net product revenues
$
6,591,852
$
6,487,581
$
21,089,515
$
19,077,090
Research and development and other revenues
4,295,321
3,025,171
11,379,282
7,128,913
10,887,173
9,512,752
32,468,797
26,206,003
Expenses: Cost of product revenues
5,145,175
4,825,032
17,586,389
15,252,456
Research and development
3,751,729
2,715,868
11,055,282
7,276,770
Selling, general and administration
4,035,998
3,079,567
13,982,682
9,421,024
12,932,902
10,620,467
42,624,353
31,950,250
Loss from operations
(2,045,729
)
(1,107,715
)
(10,155,556
)
(5,744,247
)
Other (expense) income, net
(50,954
)
167,946
89,267
75,304
Loss before provision for income taxes and net (income) loss
from noncontrolling interest
(2,096,683
)
(939,769
)
(10,066,289
)
(5,668,943
)
Tax provision
(32,000
)
(29,000
)
(97,000
)
(100,000
)
Net loss
(2,128,683
)
(968,769
)
(10,163,289
)
(5,768,943
)
Net (income) loss attributable to noncontrolling interest
(107
)
11,329
39,394
94,443
Net loss attributable to Kopin Corporation
$
(2,128,790
)
$
(957,440
)
$
(10,123,895
)
$
(5,674,500
)
Net loss per share: Basic and diluted
$
(0.02
)
$
(0.01
)
$
(0.11
)
$
(0.07
)
Weighted average number of common shares outstanding: Basic
and diluted
90,517,330
82,596,416
88,903,658
82,567,401
Kopin Corporation
Condensed Consolidated Balance
Sheets
(Unaudited)
September 25, 2021
December 26, 2020
ASSETS Current assets: Cash and marketable securities
$
31,763,687
$
20,748,550
Accounts receivable, net
7,348,721
9,260,865
Inventory
6,739,017
4,455,756
Contract assets and unbilled receivables
2,792,901
3,521,753
Prepaid and other current assets
1,999,848
1,469,256
Total current assets
50,644,174
39,456,180
Plant and equipment, net
1,855,451
1,626,930
Operating lease right-of-use assets
1,719,089
1,780,039
Other assets
170,932
162,473
Equity investments
4,559,756
4,523,525
Total assets
$
58,949,403
$
47,549,147
LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities:
Accounts payable
$
3,635,708
$
5,606,910
Accrued expenses
5,224,026
4,295,346
Contract liabilities and billings in excess of revenue earned
1,269,523
1,493,847
Operating lease liabilities
889,076
982,375
Customer deposits
2,167,228
3,950,031
Deferred tax liabilities
514,000
554,000
Total current liabilities
13,699,561
16,882,509
Other long term liabilities
1,573,004
1,546,737
Operating lease liabilities, net of current portion
812,351
821,306
Total Kopin Corporation stockholders' equity
43,040,716
28,435,431
Noncontrolling interest
(176,230
)
(136,836
)
Total stockholders' equity
42,864,486
28,298,595
Total liabilities and stockholders' equity
$
58,949,402
$
47,549,147
View source
version on businesswire.com: https://www.businesswire.com/news/home/20211102005447/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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