- Year over Year Revenue Growth of 83%, Driven Primarily by strong
Military Revenues - Significant Increase in Partner Funded Wearables Development
Revenues
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 first
quarter of 2015, ended March 28.
“2015 has started off very well from both a development and revenue
standpoint,” said Dr. John Fan, Kopin’s President and Chief Executive
Officer. “As we discussed in our year end call, two tier one customers
are on target to launch wearable products this year for the enterprise
headset market, and we are currently in the early stages of mass
production to fill their orders. At the same time we are making good
progress with both current and potential partners to bring
consumer-focused products to market.”
Dr. Fan continued. “Strong sales of our military products drove our
first quarter product revenues. Our military products are used in the
most demanding environments in the world and are a testament to the
strength of our technology and manufacturing capability. It is these
attributes, augmented by our knowledge of optics, ergonomics and system
design, which attract the leading global companies to partner with Kopin
in developing wearable products. We saw continued interest from several
companies creating products for the emerging wearable enterprise and
consumer markets, which drove a significant increase in partner funded
development revenue in the first quarter.
“With our strong cash position and debt-free balance sheet we are in a
position to make the investments needed to become a leader in the
wearable market. We are pleased that the interest and momentum in
wearables from the first quarter is carrying into the current quarter,”
concluded Dr. Fan.
First Quarter Financial Results
Total revenues for the first quarter ended March 28, 2015, were $8.6
million, compared with $4.7 million for the first quarter of 2014,
primarily reflecting an increase in sales of display products for
military applications and an increase in development revenues for
wearable products.
Research and development expenses for the first quarter of 2015 were
$4.9 million compared with $5.1 million for the first quarter of 2014.
Selling, general and administrative expenses were $4.4 million in the
first quarter of 2015, compared with approximately $5.0 million in the
same period of 2014, primarily reflecting a decrease in professional
fees.
Net loss for the first quarter of 2015 was $3.8 million, or $0.06 per
share, compared with net loss of $9.1 million, or $0.15 per share, for
the same period of 2014. Net income for the 2015 period reflected the
gain of approximately $800,000 on sale of certain equity investments and
a non-cash gain of $1.3 million from the mark to market of derivative
asset warrants that were exercised during the first quarter of 2015. All
amounts are estimates and readers should refer to our Form 10-Q for the
quarter ended March 28, 2015, for final disposition.
Cash used in operating activities for the first quarter of 2015 was $5.5
million. Kopin’s cash, equivalents and marketable securities was $87.1
million at March 28, 2015. Kopin has no long-term debt. Our cash
position should be further enhanced in January of 2016 when we expect to
receive payment of the $15 million note receivable from the sale of our
III-V product line and investment in Kopin Taiwan Corporation.
Financial Results Conference Call
In conjunction with its first quarter 2015 financial results, Kopin will
host a teleconference call for investors and analysts at 5:00 p.m.
ET today. To participate, please dial (877) 709-8150 (U.S. and Canada)
or (201) 689-8354 (International). The call will also be available as a
live and archived audio webcast on the “Investors” section of
the Kopin website, www.kopin.com.
About Kopin
Kopin Corporation is a leading developer and provider of innovative
wearable technologies and solutions for integration into head-worn
computing and display systems to military, industrial and consumer
customers. Kopin’s technology portfolio includes ultra-small displays,
optics, speech enhancement technology, system and hands-free control
software, low-power ASICs, and ergonomically designed smart headset
reference systems. Kopin’s proprietary components and technology are
protected by approximately 300 global patents and patents pending. For
more information, please visit Kopin’s website at www.kopin.com.
Kopin, CyberDisplay, Pupil and Golden-i are trademarks of Kopin
Corporation.
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 two tier one customers are on
target to launch wearable products this year for the enterprise headset
market; that our strong cash position and debt-free balance sheet
position us to make the investments needed to become a leader in the
wearable market; that the interest and momentum in wearables from the
first quarter is carrying into the current quarter; ;and our expectation
that our cash position should be further enhanced in January of 2016
when we expect to receive payment of the $15 million note receivable
from the sale of our III-V product line and investment in Kopin Taiwan
Corporation. 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
customers may not launch their products; we may have insufficient cash
to make the investments needed to become a leader in the wearable
market; our momentum coming out of the first quarter may not continue in
the second quarter of 2015; we may not receive the payment of the $15
million note receivable from the sale of our III-V product line and
investment in Kopin Taiwan Corporation; the final amounts in the
Company’s Form 10-Q for the period ended March 28, 2015 may differ from
the amounts included in the release above; it may take longer than the
Company estimates to develop products; the Company’s products may not be
accepted by the market place; there may be issues that prevent the
adoption or further development of the Company’s wearable computing
technologies; manufacturing, marketing or other issues may prevent
either the adoption or acceptance of products; the Company might be
adversely affected by competitive products and pricing; new product
initiatives and other research and development efforts may be
unsuccessful; the Company could experience the loss of significant
customers; costs to produce the Company’s products might increase
significantly, or yields could decline; the Company’s customers might be
unable to ramp production volumes of their products, or the Company’s
product forecasts could turn out to be wrong; manufacturing delays,
technical issues, economic conditions or external factors may prevent
the Company from achieving its goals; and other risk factors and
cautionary statements listed in the Company’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 27, 2014, and the Company’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 the Company and only as of the date on which they
are made. The Company undertakes no obligation to update any of these
forward-looking statements to reflect events or circumstances occurring
after the date of this report.
| Kopin Corporation | ||||||||
| Condensed Consolidated Balance Sheets | ||||||||
| March 28, 2015 | December 27, 2014 | |||||||
| (Unaudited) | ||||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash and marketable securities | $ | 87,146,196 | $ | 90,858,936 | ||||
| Accounts receivable, net | 4,581,119 | 3,802,324 | ||||||
| Inventory | 3,654,213 | 4,081,886 | ||||||
| Prepaid and other current assets | 852,278 | 1,181,474 | ||||||
| Notes receivable | 14,950,003 | – | ||||||
| Total current assets | 111,183,809 | 99,924,620 | ||||||
| Equipment and improvements, net | 4,246,687 | 4,589,421 | ||||||
| Goodwill and intangible assets | 1,410,020 | 1,593,210 | ||||||
| Other assets | 2,366,581 | 1,900,828 | ||||||
| Notes receivable | – | 14,933,335 | ||||||
| Total assets | $ | 119,207,097 | $ | 122,941,414 | ||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | 3,524,566 | $ | 5,503,734 | ||||
| Accrued expenses | 4,849,026 | 5,870,719 | ||||||
| Deferred income taxes | 1,282,000 | 1,282,000 | ||||||
| Billings in excess of revenue earned | 2,343,920 | 586,471 | ||||||
| Total current liabilities | 11,999,512 | 13,242,924 | ||||||
| Lease commitments | 297,309 | 311,187 | ||||||
| Total Kopin Corporation stockholders’ equity | 107,377,918 | 109,846,959 | ||||||
| Noncontrolling interest | (467,642 | ) | (459,656 | ) | ||||
| Total stockholders’ equity | 106,910,276 | 109,387,303 | ||||||
| Total liabilities and stockholders’ equity | $ | 119,207,097 | $ | 122,941,414 | ||||
| ` | ||||||||
| Kopin Corporation | ||||||||
| Condensed Consolidated Statements of Operations | ||||||||
| (Unaudited) | ||||||||
| Three Months Ended | ||||||||
|
March 28, 2015 |
March 29, 2014 |
|||||||
| Revenues: | ||||||||
| Component revenues | $ | 7,128,369 | $ | 4,227,760 | ||||
| Research and development revenues | 1,456,622 | 467,010 | ||||||
| 8,584,991 | 4,694,770 | |||||||
| Expenses: | ||||||||
| Cost of component revenues | 5,283,733 | 4,225,449 | ||||||
| Research and development | 4,860,192 | 5,086,284 | ||||||
| Selling, general and administrative | 4,386,215 | 4,996,802 | ||||||
| 14,530,140 | 14,308,535 | |||||||
| Loss from operations | (5,945,149 | ) | (9,613,765 | ) | ||||
| Other income (expense), net | 2,192,004 | 479,751 | ||||||
|
Loss before (provision) benefit for income taxes, equity loss in |
(3,753,145 | ) | (9,134,014 | ) | ||||
| (Provision) benefit for income taxes | (12,500 | ) | 143,000 | |||||
|
Loss before equity loss in unconsolidated affiliate and net income |
(3,765,645 | ) | (8,991,014 | ) | ||||
| Equity loss in unconsolidated affiliate | (47,443 | ) | (102,305 | ) | ||||
| Net loss | (3,813,088 | ) | (9,093,319 | ) | ||||
| Net income attributable to noncontrolling interest | (24,906 | ) | (41,097 | ) | ||||
| Net loss | $ | (3,837,994 | ) | $ | (9,134,416 | ) | ||
| Net loss per share: | ||||||||
| Basic | $ | (0.06 | ) | $ | (0.15 | ) | ||
| Diluted | $ | (0.06 | ) | $ | (0.15 | ) | ||
| Continuing operations | ||||||||
| Weighted average number of common shares outstanding: | ||||||||
| Basic | 63,088,667 | 62,530,202 | ||||||
| Diluted | 63,088,667 | 62,530,202 | ||||||
| Kopin Corporation | ||||||
| Supplemental Information | ||||||
| (Unaudited) | ||||||
| Three Months Ended | ||||||
|
March 28, 2015 |
March 29, 2014 |
|||||
| Display Revenues by Category (in millions) | ||||||
| Military Applications | $ | 4.6 | $ | 1.0 | ||
| Wearable Applications | 1.1 | 1.6 | ||||
| Industrial Applications | 1.1 | 0.8 | ||||
| Consumer Electronics Applications | 0.3 | 0.8 | ||||
| Research and Development | 1.5 | 0.5 | ||||
| Total | $ | 8.6 | $ | 4.7 | ||
| Stock-Based Compensation Expense | ||||||
| Continuing Operations | ||||||
| Cost of component revenues | $ | 199,000 | $ | 230,000 | ||
| Research and development | 234,000 | 333,000 | ||||
| Selling, general and administrative | 564,000 | 564,000 | ||||
| $ | 997,000 | $ | 1,127,000 | |||
| Other Financial Information | ||||||
| Depreciation and amortization | $ | 682,000 | $ | 933,000 | ||
| Capital expenditures | $ | 314,000 | $ | 444,000 | ||
| Treasury stock purchases | $ | – | $ | 299,000 | ||
Kopin Corporation
Richard Sneider, 508-870-5959
Treasurer
and Chief Financial Officer
RSneider@kopin.com
or
Market
Street Partners
JoAnn Horne, 415-445-3233
Partner
JHorne@marketstreetpartners.com