- Q2 2022 Total Revenues of $11.9 Million – a 20% Increase over
Q2 last year
- Product Revenues Increase 30% Year over Year Driven by 87% Year
Over Year increase in Defense Product Revenues
- Good progress on Micro OLED and LED Display Development
Programs
Kopin® Corporation (Nasdaq: KOPN), a leading provider of
high-resolution micro-displays and sub-systems for defense,
enterprise and consumer augmented reality, virtual reality and
mixed reality systems, today provided an update on its business
initiatives and reported financial results for the second quarter
ended June 25, 2022.
“We had a good second quarter with overall revenues up 20% over
the second quarter of last year, which were driven by the strong
30% year-over-year growth of product revenue,” said Dr. John C.C.
Fan, Kopin’s CEO. “We achieved this growth while at the same time
managing through the intermittent supply chain disruptions for some
of our materials. We believe the supply issues are getting better,
though they are not over.”
“Our defense business was very strong in the second quarter of
2022 with 87% year-over-year product revenue growth. In the second
quarter of 2022, we announced another order of our displays for
F-35 helmets and a follow-on development order for imaging systems
used in armored vehicles. After quarter end we announced a new $3.8
million production order for our Brillian® high-brightness color
displays for helicopter pilot helmets. Each of these three programs
use different Kopin microdisplays technologies. We are proud to
point out that we are the sole-source microdisplay supplier to the
three programs. In addition, we continue to see strong growth
potential in defense markets due to the turbulence in Europe and
geopolitical tensions. The growth in the defense business was
partially offset by lower revenues in Industrial/Enterprise
business, which declined 38% year over year in the second quarter
of 2022 primarily driven by lower product sales for wearable
headsets. During the second quarter we also announced a new Korean
3D automated optical inspection (AOI) customer for our spatial
light modulators (SLMs). With this win we are now supplying our
high speed, high performance SLMs to three leading Korean 3D AOI
equipment manufacturers, in addition to other key manufacturers in
China, Japan and Germany,” said Dr. Fan.
“Our funded Research and Development (R&D) revenues grew 4%
in the second quarter of 2022 year over year, the $2.8 million in
the second quarter of 2022 and $7.7 million for the first six
months of 2022 represent significant investments by our partners
into Kopin and in what we expect will be future production
programs. Our customer-funded R&D revenue growth is largely
driven by activities in both our organic light emitting diode
(OLED) and inorganic light emitting diode (LED) microdisplay
technologies and we are making good progress. We believe our
experience in designing, developing and manufacturing advanced
liquid crystal microdisplays, new duo stack OLED microdisplays and
micro LED displays, together with our expertise in customized
optics and ruggedized sub-system packaging, is a critical reason
our customers seek us out to source sophisticated displays and
sub-systems that they integrate into their products. Our
microdisplays and optics are used in the most advanced defense
pilot helmets and industrial wearable headsets and our experience
in these markets will be a critical factor in our success as the
headset technology migrates to consumer augmented and virtual
reality applications,” concluded Dr. Fan.
Second Quarter Financial Results
Total revenues for the second quarter ended June 25, 2022 were
$11.9 million, compared to $9.9 million for the second quarter
ended June 26, 2021, a 20% year-over-year increase.
Cost of Product Revenues for the second quarter of 2022 was $7.9
million, or 88% of net product revenues, compared with $6.0
million, or 87% of net product revenues, for the second quarter of
2021. The higher cost of product revenues as a percentage of net
product revenues is due to inefficiencies resulting from supply
chain disruptions.
Research and Development (R&D) expenses for the second
quarter of 2022 were $5.1 million compared to $3.7 million for the
second quarter of 2021, a 38% increase year over year. The increase
was driven equally by increases in customer-funded and internal
R&D expenses. The increase in customer-funded R&D is a
result of an increase in customized product development activities.
The increase in internal R&D expense is primarily for OLED
display development and the redesign of certain defense products
with alternative semiconductor components, which we believe will be
more readily available in the future.
Selling, General and Administration (SG&A) expenses were
$4.3 million for the second quarter of 2022, compared to $4.0
million for the second quarter of 2021. The increase was primarily
due to an increase in compensation, information technology expenses
and travel costs which were partially offset by lower bad debt
expense and stock-based compensation.
Net Loss Attributable to Kopin Corporation for the second
quarter of 2022 was $5.6 million, or $0.06 per share, compared with
Net Loss Attributable to Kopin Corporation of $3.8 million, or
$0.04 per share, for the second quarter of 2021.
Net Cash Used in Operating Activities for the six months ended
June 25, 2022, was approximately $11.4 million. Kopin's cash and
equivalents and marketable securities were approximately $18.6
million at June 25, 2022 as compared to $29.3 million at December
25, 2021. During the second quarter of 2022, we sold 1.7 million
shares of common stock for gross proceeds of $2.1 million (average
of $1.26 per share) before deducting broker expenses of less than
$0.1 million, pursuant to the Company’s At-The-Market Equity
Offering Sales Agreement (ATM) with Stifel, Nicolaus & Company,
Incorporated.
“Lower production rates in the first quarter and into the second
quarter of 2022 due to supply chain and other issues resulted in
disruptions in our manufacturing processes which in turn affected
working capital flows.,” said Richard Sneider, Kopin’s CDO. “As we
expect the helicopter program using the Brillian display and one
other program to go into production in the second half of 2022,
which may increase working capital needs, management deemed it
prudent to partially fund our working capital through the use of
the ATM,” said Richard Sneider, Kopin’s CFO. The Company has
approximately $41.4 million worth of common stock remaining under
the March 5, 2021 ATM. 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 25, 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 1-855-327-6837 (U.S. and Canada) or
1-631-891-4304 (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 is a trademark 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 belief that the supply
issues are getting better; our belief of strong growth potential in
defense markets due to the turbulence in Europe and geopolitical
tensions; our expectation of future production programs coming from
our customer funded research and development programs; our
experience in designing, developing and manufacturing advanced
liquid crystal microdisplays, new duo stack OLED microdisplays and
micro LED displays; and our expectation that a helicopter program
based on the Brillian display and one other program may go into
production in the second half of 2022. 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 Six Months Ended
June 25, 2022 June 26, 2021 June 25,
2022 June 26, 2021 Revenues by Category (in
millions) Defense Applications
$
7.1
$
3.8
$
11.8
$
8.8
Industrial Applications
1.6
2.6
3.2
4.7
Consumer and Other Applications
0.3
0.4
0.5
0.9
Research and Development
2.8
2.7
7.7
6.3
License and Royalties
0.1
0.4
0.3
0.9
Total
$
11.9
$
9.9
$
23.5
$
21.6
Stock-Based Compensation Expense Cost of
product revenues
$
12,000
$
35,000
$
78,000
$
169,000
Research and development
108,000
121,000
256,000
215,000
Selling, general and administrative
297,000
359,000
739,000
2,741,000
$
417,000
$
515,000
$
1,073,000
$
3,125,000
Other Financial Information Depreciation and
amortization
$
267,000
$
207,000
$
535,000
$
412,000
Kopin Corporation Condensed Consolidated Statements of
Operations (Unaudited) Three Months Ended
Six Months Ended June 25, 2022 June 26, 2021
June 25, 2022 June 26, 2021 Revenues: Net product
revenues
$
9,003,658
$
6,928,819
$
15,511,186
$
14,497,663
Research and development and other revenues
2,905,374
2,976,437
7,976,268
7,083,961
11,909,032
9,905,256
23,487,454
21,581,624
Expenses: Cost of product revenues
7,906,250
6,044,543
15,689,129
12,441,213
Research and development
5,145,375
3,740,253
10,553,988
7,303,553
Selling, general and administration
4,327,468
4,040,979
8,792,016
9,946,685
17,379,093
13,825,775
35,035,133
29,691,451
Loss from operations
(5,470,061
)
(3,920,519
)
(11,547,679
)
(8,109,827
)
Other income (expense), net
(141,128
)
103,636
4,599,826
140,221
Loss before provision for income taxes and net loss from
noncontrolling interest
(5,611,189
)
(3,816,883
)
(6,947,853
)
(7,969,606
)
Tax provision
(36,000
)
(32,000
)
(72,000
)
(65,000
)
Net loss
(5,647,189
)
(3,848,883
)
(7,019,853
)
(8,034,606
)
Net loss attributable to noncontrolling interest
257
16
280
39,501
Net loss attributable to the controlling interest
$
(5,646,932
)
$
(3,848,867
)
$
(7,019,573
)
$
(7,995,105
)
Net loss per share: Basic and diluted
$
(0.06
)
$
(0.04
)
$
(0.08
)
$
(0.09
)
Weighted average number of common shares outstanding: Basic
and diluted
90,300,999
88,815,356
90,211,742
88,096,822
Kopin Corporation Condensed Consolidated Balance
Sheets (Unaudited) June 25,
2022 December 25, 2021 ASSETS Current assets:
Cash and marketable securities
$
18,558,012
$
29,295,466
Accounts receivable, net
7,048,635
12,113,070
Contract assets and unbilled receivables
5,268,754
2,299,392
Inventory
6,926,489
6,581,139
Prepaid and other current assets
2,261,633
1,918,678
Total current assets
40,063,523
52,207,745
Plant and equipment, net
1,738,962
1,888,963
Operating lease right of use assets
3,766,602
3,828,066
Equity investments
9,831,592
4,912,022
Other assets
170,932
170,932
Total assets
$
55,571,611
$
63,007,728
LIABILITIES AND STOCKHOLDERS' EQUITY Current
liabilities: Accounts payable
$
4,860,573
$
5,483,970
Accrued expenses
5,736,842
4,133,379
Customer deposits
806,040
2,638,103
Deferred tax liabilities
472,569
513,417
Contract liabilities and billings in excess of revenues earned
3,047,208
4,063,031
Operating lease liabilities
767,440
701,204
Total current liabilities
15,690,672
17,533,104
Other long term liabilities
1,516,734
2,739,531
Operating lease liabilities, net of current portion
2,973,259
3,108,236
Total Kopin Corporation stockholders' equity
35,563,560
39,799,191
Noncontrolling interest
(172,614
)
(172,334
)
Total stockholders' equity
35,390,946
39,626,857
Total liabilities and stockholders' equity
$
55,571,611
$
63,007,728
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220802005426/en/
Richard Sneider, 508-870-5959 Treasurer and Chief Financial
Officer Richard_Sneider@kopin.com
Kopin (NASDAQ:KOPN)
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