- Q2 2024 product revenues increased 84% compared to the same
period in 2023
- Defense product revenues increased 106% partially offset by a
30% decrease in Industrial product revenues
- 5 new customers placed development orders fueling opportunities
for multi-million dollar per year production revenues
Kopin Corporation (Nasdaq: KOPN), a leading provider of
application-specific optical solutions and high-performance
microdisplays for defense, enterprise, consumer, and medical
products, today reported financial results for the second quarter
ended June 29, 2024.
Commenting on the quarterly results, Michael Murray, Chief
Executive Officer, stated, “The second quarter was highlighted by
continued sales momentum of our products for defense applications,
delivering year over year growth of 106% and five new customer
development orders which provide significant multi-million dollar
per year production revenue opportunities in the future. This
progress has validated our strategy that we began last year to
reset the course within Kopin to focus on defense products.
Additionally, as we continue our output ramp on our thermal weapon
sight contracts, our sustained focus on operational excellence
resulted in enhanced margins for this critical product line and the
company.
“As we move into the second half of the year, we expect
continued growth from new customers and projects, which during the
second quarter included the development award for the U.S. Army’s
Next Generation-Short Range Interceptor (NG-SRI) system, which is
expected to replace the Stinger Missile. We were selected to
design, develop, and produce the targeting eye piece for the
program, won by Lockheed Martin. The program is expected to move
into full rate production in 2027, which we estimate could provide
Kopin with tens of millions in revenue, in peak annual
production.
“Kopin was also selected for several new Phase One development
contracts including with the U.S. Army to research optical
approaches for Visual Augmentation Systems to improve performance,
and lessen cognitive dissonance and nausea. We also received a
development contract with the U.S. Navy to research and produce a
means to reduce the size and weight of the optics needed in
advanced sensor systems. In addition to these research and
development awards, we partnered with market leading firms like
Wilcox Industries on several new dismounted soldier products and
demonstrated our progress on our innovative AI enabled
NeuralDisplay™ hardware and software architecture.
“Looking ahead we expect to continue accelerating our growth
with a strong order book of new and long-standing customers and
expect to see the benefits of our efforts with new designs and
opportunities. We are leveraging our increased emphasis on business
development to expand into new international markets. We continue
to believe Kopin is well positioned to deliver long-term growth for
our shareholders,” concluded Murray.
Second Quarter Financial Results
Total revenues for the second quarter ended June 29, 2024, were
$12.3 million, compared to $10.5 million for the second quarter
ended July 1, 2023, an 18% increase. Year-over-year product
revenues increased 84%, with defense product revenues increasing by
$5.4 million or 106% year over year, while industrial product
revenues decreased by $0.3 million or 30% year over year. Second
quarter 2024 funded research and development revenues declined by
$2.7 million or 70% as certain defense development programs were
successfully completed and are now moving into low-rate initial
production.
Cost of Product Revenues for the second quarter of 2024 were
$8.7 million, or 79% of net product revenues, compared with $5.7
million, or 95% of net product revenues for the second quarter of
2023. The decrease in cost of product revenue as a percent of net
product revenues for the three months ended June 29, 2024, as
compared to the three and six months ended July 1, 2023 was due to
a decrease in expected rework costs, attributed in part to
sustained improvements in labor hours/unit, improved work
instructions, reduced scrap rates and lower customer acceptance
reject rates. We estimate that the lower estimated rework cost
improved gross margins by approximately $1.3 million for the three
months ended June 29, 2024.
Research and Development (R&D) expenses for the second
quarter of 2024 were $1.8 million compared to $3.1 million for the
second quarter of 2023, a decrease of 41% from the prior year.
Customer-funded R&D expense declined $1.5 million in the second
quarter of 2024 as compared to the second quarter of 2023, while
internal R&D increased $0.2 million year over year. The decline
in customer-funded R&D programs was due to decreased spending
on specific U.S. defense programs and programs previously in
development were successfully completed. Internal R&D expense
increased due to an increase in process improvements and
NeuralDisplay™ advancements.
Selling, General and Administration (SG&A) expenses were
$7.3 million for the second quarter of 2024, compared to $6.5
million for the second quarter of 2023. The increase for the three
months ended June 29, 2024, as compared to the three months ended
July 1, 2023, was primarily due to an increase in legal fees of
$1.2 million, partially offset by a decrease in credit loss expense
of $0.2 million. Included in SG&A was legal fees associated
with the BlueRadios lawsuit of $3.1 million for the second quarter
of 2024 and $1.9 million for the second quarter of 2023.
The Net Loss for the second quarter of 2024 was ($5.9) million,
or ($0.05) per share, compared with ($8.2) million, or ($0.07) per
share, for the second quarter of 2023.
All amounts above are estimates and readers should refer to our
Form 10-Q for the quarter ended June 29, 2024, 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 8, 2024 Time: 8:30 AM Eastern Time (5:30
AM Pacific Time) U.S. dial-in number: 888-349-0106 International
number: 412-902-0131 Webcast: Q2 2024 Webcast Link
The Company will also provide a link at
https://www.kopin.com/investors/ 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 15, 2024.
Toll-free replay number: 877-344-7529 International replay
number: 412-317-0088 Replay passcode: 10191338
About Kopin
Kopin Corporation is a leading developer and provider of
innovative display and optical technologies sold as critical
components and subassemblies for defense, industrial and consumer
products. Kopin’s technology portfolio includes ultra-small
Active-Matrix Liquid Crystal displays (AMLCD), Liquid Crystal on
Silicon (LCOS) displays and Organic Light Emitting Diode (OLED)
displays, MicroLED (µLED) displays, a variety of 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. 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.
These forward-looking statements may include statements with
respect to our expectation of five new customer development orders
providing significant multi-million dollar per year production
revenue opportunities in the future; our expectation of continued
growth from new customers and projects; our expectation that the
U.S. Army’s Next Generation-Short Range Interceptor (NG-SRI) system
will move into full rate production in 2027 and can provide Kopin
with tens of millions in revenue in peak annual production; our
expectation of continuing to accelerate our growth with a strong
order book of new and long-standing customers; our expectation to
see the benefits of our efforts with new designs and opportunities;
and our belief that Kopin is well positioned to deliver long-term
growth for our shareholders. 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 30, 2023, or as updated from time to
time our Securities and Exchange Commission filings.
Kopin Corporation
Condensed Consolidated Balance
Sheets
(Unaudited)
June 29, 2024
December 30, 2023
ASSETS
Current assets: Cash, restricted cash and marketable securities
$
18,679,861
$
17,902,685
Accounts receivable, net
7,406,272
9,706,036
Contract assets and unbilled receivables
6,523,002
3,409,809
Inventory
5,649,665
7,601,806
Prepaid and other current assets
2,061,305
1,210,207
Total current assets
40,320,105
39,830,543
Plant and equipment, net
2,143,235
2,163,417
Operating lease right-of-use assets
2,477,774
2,504,909
Other assets
124,925
124,925
Equity investments
3,982,385
4,688,522
Total assets
$
49,048,424
$
49,312,316
LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities:
Accounts payable
$
5,713,542
$
4,947,338
Accrued expenses
6,079,934
5,564,187
Contract liabilities and billings in excess of revenue earned
198,291
916,826
Operating lease liabilities
672,038
651,503
Accrued post-retirement benefits
415,000
790,000
Customer deposits
331,766
408,156
Deferred tax liabilities
470,884
470,884
Accrued legal expenses
6,666,717
2,129,421
Accrued litigation damages
24,800,000
-
Total current liabilities
45,348,172
15,878,315
Other long term liabilities
2,130,572
2,092,124
Operating lease liabilities, net of current portion
1,786,021
1,832,982
Total stockholders' equity
(216,341
)
29,508,895
Total liabilities and stockholders' equity
$
49,048,424
$
49,312,316
Kopin Corporation
Condensed Consolidated
Statements of Operations
(Unaudited)
Three Months Ended
Six Months Ended
June 29, 2024
July 1, 2023
June 29, 2024
July 1, 2023
Revenues: Net product revenues
$
11,054,030
$
6,011,393
$
20,079,396
$
13,666,109
Research and development revenues
1,170,329
3,884,225
2,070,294
6,780,676
Other revenues
112,064
564,238
219,374
771,262
12,336,423
10,459,856
22,369,064
21,218,047
Expenses: Cost of product revenues
8,685,328
5,697,063
17,226,902
12,321,164
Research and development
1,839,663
3,132,259
3,940,416
5,444,476
Selling, general and administration
7,267,868
6,466,120
14,499,733
11,114,250
Litigation damages
-
-
24,800,000
-
17,792,859
15,295,442
60,467,051
28,879,890
Loss from operations
(5,456,436
)
(4,835,586
)
(38,097,987
)
(7,661,843
)
Other expense, net
(465,562
)
(3,305,793
)
(372,226
)
(3,069,091
)
Loss before provision for income taxes
(5,921,998
)
(8,141,379
)
(38,470,213
)
(10,730,934
)
Tax provision
-
(39,000
)
-
(78,000
)
Net loss
(5,921,998
)
(8,180,379
)
(38,470,213
)
(10,808,934
)
Net loss per share: Basic
$
(0.05
)
$
(0.07
)
$
(0.32
)
$
(0.10
)
Diluted
$
(0.05
)
$
(0.07
)
$
(0.32
)
$
(0.10
)
Weighted average number of common shares outstanding: Basic
121,400,739
109,911,244
120,757,868
107,473,813
Diluted
121,400,739
109,911,244
120,757,868
107,473,813
Kopin Corporation
Supplemental
Information
(Unaudited)
Three Months Ended
Six Months Ended
June 29, 2024
July 1, 2023
June 29, 2024
July 1, 2023
Display Revenues by Category (in millions) Defense
$
10.4
$
5.1
$
18.7
$
11.5
Industrial/Enterprise
0.6
0.9
1.4
1.8
Consumer
-
0.1
-
0.4
R&D
1.2
3.9
2.1
6.8
License and Royalties
0.1
0.5
0.2
0.7
Total
$
12.3
$
10.5
$
22.4
$
21.2
Stock-Based Compensation Expense Cost of product
revenues
$
268,000
$
427,000
$
489,000
$
453,000
Research and development
117,000
322,000
261,000
339,000
Selling, general and administrative
291,000
442,000
661,000
593,000
$
676,000
$
1,191,000
$
1,411,000
$
1,385,000
Other Financial Information Depreciation and
amortization
$
137,000
$
163,000
$
332,000
$
388,000
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240808157869/en/
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
Grafico Azioni Kopin (NASDAQ:KOPN)
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Grafico Azioni Kopin (NASDAQ:KOPN)
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