- Q1 2022 Total Revenues of $11.6 Million – Flat vs Q1 last year,
despite supply chain challenges
- Customer-funded Research & Development Revenues Increase
38% Year over Year
- Micro OLED and LED Display Development Programs on Track
- $4.7 Million Gain on Equity Investment
Kopin® Corporation (Nasdaq: KOPN), a leading provider of
high-resolution micro-displays and sub-systems 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
first quarter ended March 26, 2022.
“We are off to a good start for fiscal year 2022. While revenues
in the first quarter of 2022 were essentially flat with the first
quarter of last year as we experienced some production disruption
in the last few weeks of the quarter owing to certain materials
shortages caused by the global supply chain issues, demand for our
products remains strong,” said Dr. John C.C. Fan, Kopin’s CEO.
“Although we expect intermittent supply chain disruptions for some
of our materials, based on discussions with our vendors and other
actions we have taken we continue to expect to meet our financial
growth goals for the year.”
“Our customer-funded R&D business continues to be strong
with 38% year over year revenue growth. This comes on top of a very
strong first quarter of 2021 in which we saw an 82% year over year
revenue growth. This growth is being primarily driven by
customer-funded development programs for both organic light
emitting diode (OLED) and inorganic light emitting diode (LED)
microdisplays. This strong customer-funded development pipeline
bodes well for our future growth as we expect most of these
development programs will convert to production programs following
their development phases. We believe our ability to design and
manufacture our traditional advanced liquid crystal displays, new
dual stack OLED displays and eventually micro LED displays,
together with customized optics and ruggedized sub-system
packaging, is a critical reason our customers seek us out. Just
recently we announced new orders for our Lighting® 720p OLED
displays and 2K x 2K silicon backplane wafers for micro OLED
displays.”
“Despite the supply chain issues we experienced in the first
quarter, we expect 2022 to be a year of good growth. The backlog
for both our defense production programs and our enterprise
business is strong for the remainder of the year, we expect to
announce new design wins for our 3D AOI (automated optical
inspection) spatial light modulators, and our micro OLED and micro
LED display activities remain on track. We expect to continue to
make strong progress in executing our strategy and believe that
both AR and VR markets provide great growth opportunities, which
Kopin is well positioned to capitalize on,” concluded Dr. Fan.
First Quarter Financial Results
Total revenues for the first quarter ended March 26, 2022 were
$11.6 million, compared with $11.7 million for the first quarter
ended March 27, 2021, essentially flat year over year.
Cost of Products Revenues for the first quarter ended March 26,
2022 was $7.8 million, or 120% of net product revenues, compared
with $6.4 million, or 85% of net product revenues, for the first
quarter ended March 27, 2021. The increase in cost of product
revenues as a percent of product revenues for the first quarter of
2022 as compared to the first quarter of 2021 was due to lower
production efficiencies resulting from a lower volume of units
produced, approximately $450,000 of warranty costs reserves, and
approximately $300,000 of additional reserve for excess materials.
The lower production volumes resulted in less absorption of
overhead costs. The additional warranty costs reserve relates to
units shipped before the new production processes the Company
implemented in 2021. The additional reserve for excess materials is
primarily the result of the Company procuring materials for
contingency purposes as a result of the supply chain situation. The
current supply chain situation is dynamic and we are working
closely with our suppliers and customers to manage this issue.
Research and Development (R&D) expenses for the first
quarter of 2022 were $5.4 million compared to $3.6 million for the
first quarter of 2021, a 52% increase year over year. The increase
was driven by the increase in customer-funded research and
development revenues.
Selling, General and Administrative (SG&A) expenses were
$4.5 million for the first quarter of 2022, compared to $5.9
million for the first quarter of 2021. The decrease was primarily
due to stock-based compensation of $442,000 included in SG&A
expenses in the first quarter of 2022 as compared to $2.4 million
of stock-based compensation included in SG&A expenses for the
first quarter of 2021.
Included in Other Income is a gain of $4.7 million in the first
quarter of 2022 resulting from the mark to market of an equity
investment. As a reminder, part of Kopin’s strategy to monetize our
deep intellectual property (IP) portfolio is to receive an equity
interest in certain licensee companies when we license our IP to
them.
Net Loss Attributable to Kopin Corporation for the first quarter
of 2022 was $1.4 million, or $0.02 per share, compared with Net
Loss Attributable to Kopin Corporation of $4.1 million, or $0.05
per share, for the first quarter of 2021.
Net Cash used In Operating Activities for the first quarter
ended March 26, 2022, was approximately $2.3 million. Kopin's Cash
and Equivalents and Marketable Securities were approximately $26.3
million at March 26, 2022 as compared to $29.3 million at December
25, 2021.
We have no long-term debt.
All amounts above are estimates and readers should refer to our
Form 10-Q for the quarter ended March 26, 2022, for final
disposition as well as important risk factors.
Conference Call
Kopin will host a conference call this morning at 8:30am ET. To
participate, please dial 1-888-256-1007 (U.S. and Canada) or
323-994-2093 (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, and low-power ASICs. For more
information, please visit Kopin’s website at www.kopin.com.
Kopin and Lightning 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 (the "Securities Act"), and
Section 21E of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), 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 of intermittent
supply chain disruptions for some of our materials; our expectation
that we will meet our financial growth goals for the year; our
expectation that most of our development programs will convert to
production programs following their development phases; our
expectation that 2022 is to be a year of good growth; our
expectation of announcing new design wins for our 3D AOI (automated
optical inspection) spatial light modulators; our expectation that
we will continue to make strong progress in executing our strategy;
and our belief that both AR and VR markets provide great growth
opportunities, which Kopin is well positioned to capitalize on.
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. All such
forward-looking statements, whether written or oral, and whether
made by us or on our behalf, are expressly qualified by these
cautionary statements and any other cautionary statements that may
accompany the forward-looking statements. In addition, 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
25, 2021, or as updated from time to time our Securities and
Exchange Commission filings.
Kopin Corporation Supplemental Information
(Unaudited) Three Months Ended March
26, 2022 March 27, 2021 Display Revenues by Category
(in millions) Defense
$
4.8
$
5.0
Industrial/Enterprise
1.5
2.0
Consumer
0.2
0.5
R&D
4.9
3.6
License and Royalties
0.2
0.6
Total
$
11.6
$
11.7
Stock-Based Compensation Expense Cost of
product revenues
$
67,000
$
134,000
Research and development
147,000
94,000
Selling, general and administrative
442,000
2,382,000
$
656,000
$
2,610,000
Other Financial Information Depreciation and
amortization
$
268,000
$
205,000
Kopin Corporation Condensed Consolidated Statements of
Operations (Unaudited) Three Months Ended
March 26, 2022 March 27, 2021 Revenues: Net product
revenues
$
6,507,528
$
7,568,845
Research and development
4,908,033
3,560,743
Other revenues
162,861
546,781
11,578,422
11,676,369
Expenses: Cost of product revenues
7,782,879
6,396,671
Research and development
5,408,613
3,563,300
Selling, general and administration
4,464,548
5,905,706
17,656,040
15,865,677
Loss from operations
(6,077,618
)
(4,189,308
)
Other income, net
4,740,954
36,585
Loss before provision for income taxes and net loss from
noncontrolling interest
(1,336,664
)
(4,152,723
)
Tax provision
(36,000
)
(33,000
)
Net loss
(1,372,664
)
(4,185,723
)
Net loss attributable to noncontrolling interest
23
39,485
Net loss attributable to Kopin Corporation
$
(1,372,641
)
$
(4,146,238
)
Net loss per share: Basic and diluted
$
(0.02
)
$
(0.05
)
Weighted average number of common shares outstanding: Basic
and diluted
90,121,226
87,378,288
Kopin Corporation Condensed Consolidated Balance
Sheets (Unaudited) March 26, 2022
December 25, 2021 ASSETS Current assets: Cash and marketable
securities
$
26,318,580
$
29,295,466
Accounts receivable, net
6,777,310
12,113,070
Inventory
7,132,617
6,581,139
Contract assets and unbilled receivables
2,552,201
2,299,392
Prepaid and other current assets
2,214,197
1,918,678
Total current assets
44,994,905
52,207,745
Plant and equipment, net
1,939,506
1,888,963
Operating lease right-of-use assets
3,630,555
3,828,066
Equity investments
9,553,628
4,912,022
Other assets
170,932
170,932
Total assets
$
60,289,526
$
63,007,728
LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities:
Accounts payable
$
5,865,030
$
5,483,970
Accrued expenses
5,838,994
4,133,379
Customer deposits
2,457,496
2,638,103
Deferred tax liabilities
497,102
513,417
Contract liabilities and billings in excess of revenue earned
1,756,202
4,063,031
Operating lease liabilities
658,298
701,204
Total current liabilities
17,073,122
17,533,104
Other long term liabilities
1,568,663
2,739,531
Operating lease liabilities, net of current portion
2,946,994
3,108,236
Total Kopin Corporation stockholders' equity
38,873,104
39,799,191
Noncontrolling interest
(172,357
)
(172,334
)
Total stockholders' equity
38,700,747
39,626,857
Total liabilities and stockholders' equity
$
60,289,526
$
63,007,728
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220503005381/en/
Richard Sneider, 508-870-5959 Treasurer and Chief
Financial Officer Richard_Sneider@kopin.com
Kopin (NASDAQ:KOPN)
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