- Second quarter revenues of $10.5 million
- Third consecutive quarter of positive book-to-bill
- Second quarter net loss included $3.3 million of non-cash loss
on equity investments
- Partnered with MIT’s CSAIL Artificial Intelligence Development
Lab
Kopin Corporation ("Kopin" or "the Company") (Nasdaq: KOPN), a
leading developer and provider of high-performance
application-specific optical solutions consisting of
high-resolution microdisplays, microdisplays subassemblies and
related components for defense, enterprise, industrial, and
consumer products, today reported financial results for the second
quarter ended July 1, 2023.
"The second quarter of 2023 showed continued progress on our
strategy to reset the course and focus within Kopin," said Michael
Murray, Kopin's Chief Executive Officer. "The dedication of our
team, the improvements in our manufacturing processes and equipment
have allowed Kopin to maintain a high ratio of on-time and in-full
delivery. I’m proud to announce an additional benefit of greater
customer satisfaction: our second quarter of 2023 saw our third
consecutive quarter of positive book to bill ratio. In addition,
with our recently announced $12.8 million follow-on order from a
strategic customer, our third quarter bookings are off to a
fantastic start. The increased size of this order is a direct
result of our intense focus on improved customer engagement,
quality, and timeliness.
"We continue to make progress on disciplined cost controls on
the business. We strategically reduced research & development
('R&D') expenses and normalized selling, general and
administration expenses ('SG&A') excluding higher than typical
legal costs in the quarter due to trademarking, patenting, and an
ongoing litigation. We are encouraged to see the benefits of these
efforts as more revenues find their way to the bottom line. We
remain slightly ahead of our goals on our strategic initiatives,
which are the bedrock for significant and sustainable revenue and
profitable growth in 2024.
Mr. Murray concluded: "Looking ahead, we have significantly
increased order cover, at improved gross margins due to price
increases negotiated with several key customers. We continue to
focus on driving new customer design activities to fuel our future
product pipeline and growth. The increased demand for Kopin’s
technologies is driven by the need for advanced augmentation and
visualization of the analog and digital environments. In the second
quarter, we joined MIT’s CSAIL program to better align with cutting
edge Artificial Intelligence focused on solving visual and
human-centric issues with augmented and virtual systems. Indeed, we
believe Kopin is well positioned to deliver exciting new
technologies, revenues and long term sustainable growth."
Second Quarter Financial Results
Total revenues for the second quarter ended July 1, 2023, were
$10.5 million, compared to $11.9 million for the second quarter
ended June 25, 2022, a 12% decrease. Product revenues for the
second quarter ended July 1, 2023, were $6.0 million, compared to
$9.0 million for the second quarter ended June 25, 2022. The
decrease in product revenues was a result of lower defense product
revenues, which decreased by $2.0 million or 28% year over year,
and industrial product revenues, which decreased by $0.7 million or
43%, year over year. We believe industrial product revenues were
lower due to less demand from China. In the second quarter of 2023,
funded research and development revenues increased by $1.1 million
or 39% due to increased funding for display systems initially used
in defense programs.
Cost of Product Revenues for the second quarter of 2023 was $5.7
million, or 95% of net product revenues, compared with $7.9
million, or 88% of net product revenues, for the second quarter of
2022. The increase in cost of product revenues as a percent of
product revenues was the result of lower efficiencies from reduced
product sales volumes as well as a year over year increase in
non-cash stock compensation cost of $415,000. Excluding the
increase in stock compensation cost, Cost of Product Revenues would
have been 88% of net product revenue.
R&D expenses for the second quarter of 2023 were $3.1
million compared to $5.1 million for the second quarter of 2022, a
39% decrease year over year. The decrease in R&D expense is
attributable to some customer-funded programs transitioning to
production and a reduction of OLED development costs due to the
first quarter of 2023 spinout of certain OLED development to
Lightning Silicon.
SG&A expenses were $6.5 million for the second quarter of
2023, compared to $4.3 million for the second quarter of 2022. The
increase was primarily due to legal expenses of approximately $2.4
million for the second quarter of 2023 as compared to approximately
$0.2 million for the second quarter of 2022, and bad debt expense
of approximately $0.3 million for the second quarter of 2023 as
compared to bad debt recoveries of approximately $0.2 million for
the second quarter of 2022.
Other income and expense in the second quarter of 2023 included
$3.3 million of non-cash impairment losses on equity
investments.
Net Loss Attributable to Kopin for the second quarter of 2023
was ($8.2) million, or ($0.07) per share, compared with Net Loss
Attributable to Kopin of ($5.6) million, or ($0.06) per share, for
the second quarter of 2022.
All amounts above are estimates and readers should refer to our
Form 10-Q for the quarter ended July 1, 2023, for final disposition
as well as important risk factors.
Earnings Call and Webcast
Kopin management will host the conference call, followed by a
question and answer session.
Date: Thursday, August 10, 2023 Time: 4:30 PM Eastern Time (1:30
PM Pacific Time) U.S. dial-in number: 877-407-9716 International
number: 201-493-6779 Webcast: Q2 2023 Webcast Link
The Company will also provide a link at
https://www.kopin.com/investor-overview/ for those who wish to
stream the call via webcast. Please call the conference telephone
number 5-10 minutes prior to the start time.
A telephonic replay of the conference call will also be
available through August 17, 2023.
Toll-free replay number: 844-512-2921 International replay
number: 412-317-6671 Replay passcode: 13740545
About Kopin
Kopin Corporation is a leading developer and provider of
high-performance application-specific optical solutions consisting
of high-resolution microdisplays, microdisplays subassemblies and
related components for defense, enterprise, industrial, and
consumer products. Our products are used for soldier, avionic,
armored vehicle, and training & simulation defense
applications; industrial, public safety and medical headsets; 3D
optical inspection systems; and consumer augmented reality (“AR”)
and virtual reality (“VR”) wearable headsets systems. 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 “benefit,” “believe,” “can,”
“continue,” “estimate,” “encourage,” “deliver,” “growth,”
“increase,” “position,” “positive,” “progress,” “reduce,” “result,”
“significant,” “sustainable,” 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 include statements with respect to our
belief that our third quarter bookings are off to a fantastic
start; our belief that we remain slightly ahead of our goals on our
strategic initiatives; our belief that our significant and
increased order cover will be at improved gross margins; our belief
that the increased demand for Kopin’s technologies is driven by the
need for advanced augmentation and visualization of the analog and
digital environments; our belief Kopin is well positioned to
deliver innovations that enable these markets and return value to
our customers, society, and our internal and external stakeholders;
our belief that industrial product revenues were lower due to less
demand from China. 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 our
Annual Report on Form 10-K, or as updated from time to time our
Securities and Exchange Commission filings.
Kopin Corporation Condensed Consolidated Balance
Sheets (Unaudited) July 1, 2023
December 31, 2022 ASSETS Current assets: Cash and marketable
securities
$
25,669,801
$
12,647,656
Accounts receivable, net
6,171,241
6,537,891
Inventory
7,878,018
6,426,400
Contract assets and unbilled receivables
4,108,406
4,068,364
Prepaid and other current assets
2,093,588
1,180,362
Total current assets
45,921,054
30,860,673
Plant and equipment, net
1,800,346
1,831,641
Operating lease right-of-use assets
2,847,836
3,168,520
Equity investments
4,626,081
7,721,206
Other assets
169,132
170,132
Total assets
$
55,364,449
$
43,752,172
LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities:
Accounts payable
$
6,506,987
$
5,438,980
Accrued expenses
6,509,620
6,817,485
Customer deposits
78,883
-
Deferred tax liabilities
462,985
482,739
Contract liabilities and billings in excess of revenue earned
554,967
930,500
Operating lease liabilities
796,073
786,928
Total current liabilities
14,909,515
14,456,632
Other long term liabilities
2,345,943
2,728,042
Operating lease liabilities, net of current portion
2,182,886
2,576,883
Total Kopin Corporation stockholders' equity
35,926,105
24,163,297
Noncontrolling interest
-
(172,682
)
Total stockholders' equity
35,926,105
23,990,615
Total liabilities and stockholders' equity
$
55,364,449
$
43,752,172
Kopin Corporation Condensed Consolidated
Statements of Operations (Unaudited) Three
Months Ended Six Months Ended July 1, 2023
June 25, 2022 July 1, 2023 June 25, 2022
Revenues: Net product revenues
$
6,011,393
$
9,003,658
$
13,666,109
$
15,511,186
Research and development
3,884,225
2,806,109
6,780,676
7,714,142
Other revenues
564,238
99,265
771,262
262,126
10,459,856
11,909,032
21,218,047
23,487,454
Expenses: Cost of product revenues
5,697,063
7,906,250
12,321,164
15,689,129
Research and development
3,132,259
5,145,375
5,444,476
10,553,988
Selling, general and administration
6,466,120
4,327,468
11,114,250
8,792,016
15,295,442
17,379,093
28,879,890
35,035,133
Loss from operations
(4,835,586
)
(5,470,061
)
(7,661,843
)
(11,547,679
)
Other (expense) income
(3,305,793
)
(141,128
)
(3,069,091
)
4,599,826
Loss before provision for income taxes and net loss from
noncontrolling interest
(8,141,379
)
(5,611,189
)
(10,730,934
)
(6,947,853
)
Tax provision
(39,000
)
(36,000
)
(78,000
)
(72,000
)
Net loss
(8,180,379
)
(5,647,189
)
(10,808,934
)
(7,019,853
)
Net loss attributable to noncontrolling interest
-
257
-
280
Net loss attributable to Kopin Corporation
$
(8,180,379
)
$
(5,646,932
)
$
(10,808,934
)
$
(7,019,573
)
Net loss per share: Basic and diluted
$
(0.07
)
$
(0.06
)
$
(0.10
)
$
(0.08
)
Weighted average number of common shares outstanding: Basic
and diluted
109,911,244
90,300,999
107,473,813
90,211,742
Kopin Corporation Supplemental Information
(Unaudited) Three Months Ended Six Months
Ended July 1, 2023 June 25, 2022 July
1, 2023 June 25, 2022 Display Revenues by Category
(in millions) Defense
$
5.1
$
7.1
$
11.5
$
11.8
Industrial/Enterprise
0.9
1.6
1.8
3.2
Consumer
0.1
0.3
0.4
0.5
R&D
3.9
2.8
6.8
7.7
License and Royalties
0.5
0.1
0.7
0.3
Total
$
10.5
$
11.9
$
21.2
$
23.5
Stock-Based Compensation Expense Cost of
product revenues
$
427,000
$
12,000
$
453,000
$
78,000
Research and development
322,000
108,000
339,000
256,000
Selling, general and administrative
442,000
297,000
593,000
739,000
$
1,191,000
$
417,000
$
1,385,000
$
1,073,000
Other Financial Information Depreciation and
amortization
$
163,000
$
267,000
$
388,000
$
535,000
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230810263525/en/
For Investor Relations Kopin Corporation Richard
Sneider Treasurer and Chief Financial Officer
rsneider@kopin.com
MZ Contact Brian M. Prenoveau, CFA MZ Group – MZ North
America KOPN@mzgroup.us +561 489 5315
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