Third quarter revenues of $10.6 million
Fourth consecutive quarter of positive
book-to-bill (2:1) and sets record order level
Net Loss Attributable to Kopin was $2.5 million
vs $6.1 million the previous year
Kopin Corporation (Nasdaq: KOPN), a leading provider of
application-specific optical solutions for defense, enterprise,
industrial, and consumer products, today reported financial results
for the third quarter ended September 30, 2023.
"The third quarter of 2023 was marked by positive momentum with
follow-on orders and strong customer engagement and satisfaction,"
said Michael Murray, Kopin's Chief Executive Officer. “Our
performance and outlook were supported by our fourth consecutive
quarter of positive book to bill with a ratio of approximately two
to one. During the third quarter, we achieved a new record level
for orders received within the year since the divesture of the HBT
business ten years ago.
“Driving our strong book to bill ratio were two significant
follow-on orders from strategic customers during the quarter,
including a $12.8 million order for the Thermal Weapon Sight
Program and a $3.4 million order for the F-35 Joint Strike Fighter
Program. The increased size of these orders is a direct result of
our intense focus on improved customer engagement, and the
improvements in our manufacturing processes and equipment have
allowed Kopin to maintain a high ratio of on-time and in-full
deliveries.
“We continue to take a disciplined approach to cost controls
which has led to strategically reducing research & development
(“R&D”) and certain selling, general and administration
expenses. The benefit of our cost controls efforts has
significantly improved our bottom line and we were close to
achieving our cash breakeven goal for the quarter, excluding the
impact of non-cash stock compensation expense and legal costs from
ongoing litigation.
Mr. Murray concluded: "Looking forward, we remain ahead of our
goals on our strategic initiatives, which are the bedrock for
significant and sustainable revenue and profitable growth. We have
significantly increased our 2024 order cover with higher prices on
several key programs and believe there are opportunities for
additional follow-on orders within the quarter. As a result of our
strong order book, we anticipate production will significantly
increase in 2024. To ensure we execute on this anticipated
production ramp we are taking steps to improve production flow for
long term profitability, which may impact fourth quarter of 2023’s
revenues. As we stated in January, our goal for 2023 was to
position Kopin for long-term growth by driving new customer design
activities that fuel our future product pipeline and growth. We
believe Kopin is well positioned to deliver exciting new
technologies, revenues, and long-term sustainable growth.”
Third Quarter Financial Results
Total revenues for the third quarter ended September 30, 2023,
were $10.6 million, compared to $11.7 million for the third quarter
ended September 24, 2022, a 10% decrease. Product revenues for the
third quarter ended September 30, 2023, were $5.5 million, compared
to $8.3 million for the third quarter ended September 24, 2022. The
decrease in product revenues was a result of lower industrial
product revenues, which decreased by $1.4 million or 82%, year over
year due to continued weakness in the Chinese 3D automated test
market and defense product revenues, which decreased by $0.8
million or 14% year over year. In the third quarter of 2023, funded
research and development revenues increased by $1.6 million or 47%
due to new and additional program and development orders.
Cost of Product Revenues for the third quarter of 2023 was $5.4
million, or 99% of net product revenues, compared with $8.0
million, or 97% of net product revenues, for the third quarter of
2022, essentially flat.
R&D expenses for the third quarter of 2023 were $3.1 million
compared to $3.4 million for the third quarter of 2022, a 10%
decrease year over year. The decrease in R&D expense is
attributable to a decrease in OLED development costs and more
disciplined project management.
SG&A expenses were $4.8 million for the third quarter of
2023, compared to $4.3 million for the third quarter of 2022. The
increase was primarily due to legal expenses and non-cash stock
compensation of approximately $1.7 million for the third quarter of
2023 as compared to approximately $0.5 million for the third
quarter of 2022. These increases were partially offset by a
decrease in compensation and benefit costs of $1.3 million for the
third quarter of 2023 as compared to approximately $2.0 million for
the third quarter of 2022.
Other income and expense in the third quarter of 2022 included
$2.0 million of non-cash impairment losses on an equity
investment.
Net Loss Attributable to Kopin for the third quarter of 2023 was
($2.5) million, or ($0.02) per share, compared with Net Loss
Attributable to Kopin of ($6.1) million, or ($0.07) per share, for
the third quarter of 2022, marking a significant and consistent
improvement.
All amounts above are estimates and readers should refer to our
Form 10-Q for the quarter ended September 30, 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, November 9, 2023 Time: 4:30 PM Eastern Time
(1:30 PM Pacific Time) U.S. dial-in number: 800-715-9871
International number: 646-307-1963 Webcast: Q3 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 November 16, 2023.
Toll-free replay number: 800-770-2030 International replay
number: 609-800-9909 Replay passcode: 6767907
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 we remain slightly ahead of our strategic initiatives;
our belief that there is opportunity in the fourth quarter of 2023
for additional orders for 2024; our expectation that as a result of
our strong order book our production will significantly increase in
2024; our expectation that steps we are taking will impact fourth
quarter of 2023’s revenues; our expectation that steps being taken
to improve production flow for long term profitability, may impact
fourth quarter of 2023’s revenues; and our belief that Kopin is
well positioned to deliver exciting new technologies, revenues, and
long-term sustainable growth. 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) September 30, 2023
December 31, 2022 ASSETS Current assets: Cash, restricted
cash and marketable securities
$
21,710,160
$
12,647,656
Accounts receivable, net
7,118,214
6,537,891
Inventory
9,074,492
6,426,400
Contract assets and unbilled receivables
5,882,340
4,068,364
Prepaid and other current assets
1,583,046
1,180,362
Total current assets
45,368,252
30,860,673
Plant and equipment, net
1,794,832
1,831,641
Operating lease right-of-use assets
2,670,116
3,168,520
Other assets
169,132
170,132
Equity investments
4,603,014
7,721,206
Total assets
$
54,605,346
$
43,752,172
LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities:
Accounts payable
$
7,187,025
$
5,438,980
Accrued expenses
5,644,128
6,027,485
Contract liabilities and billings in excess of revenue earned
668,046
930,500
Accrued compensation
790,000
790,000
Operating lease liabilities
762,521
786,928
Customer deposits
559,503
-
Deferred tax liabilities
450,480
482,739
Total current liabilities
16,061,703
14,456,632
Other long term liabilities
2,165,843
2,728,042
Operating lease liabilities, net of current portion
2,008,077
2,576,883
Total Kopin Corporation stockholders' equity
34,369,723
24,163,297
Noncontrolling interest
-
(172,682
)
Total stockholders' equity
34,369,723
23,990,615
Total liabilities and stockholders' equity
$
54,605,346
$
43,752,172
Kopin Corporation Condensed Consolidated Statements of
Operations (Unaudited) Three Months Ended
Nine Months Ended September 30, 2023 September 24,
2022 September 30, 2023 September 24, 2022
Revenues: Net product revenues
$
5,506,193
$
8,254,686
$
19,172,302
$
23,765,872
Research and development
4,956,386
3,374,873
11,737,062
11,089,015
Other revenues
135,918
99,820
907,180
361,946
10,598,497
11,729,379
31,816,544
35,216,833
Expenses: Cost of product revenues
5,437,953
7,987,154
17,759,117
23,676,283
Research and development
3,089,935
3,441,405
8,534,411
13,995,393
Selling, general and administration
4,798,598
4,320,117
15,912,848
13,112,133
13,326,486
15,748,676
42,206,376
50,783,809
Loss from operations
(2,727,989
)
(4,019,297
)
(10,389,832
)
(15,566,976
)
Other income (expense), net
316,676
(2,093,877
)
(2,752,415
)
2,505,949
Loss before provision for income taxes and net loss from
noncontrolling interest
(2,411,313
)
(6,113,174
)
(13,142,247
)
(13,061,027
)
Tax provision
(39,000
)
(36,000
)
(117,000
)
(108,000
)
Net loss
(2,450,313
)
(6,149,174
)
(13,259,247
)
(13,169,027
)
Net loss attributable to noncontrolling interest
-
-
-
280
Net loss attributable to Kopin Corporation
(2,450,313
)
(6,149,174
)
(13,259,247
)
(13,168,747
)
Net loss per share: Basic and diluted
$
(0.02
)
$
(0.07
)
$
(0.12
)
$
(0.14
)
Weighted average number of common shares outstanding: Basic
and diluted
110,360,814
93,516,231
108,436,146
91,317,288
Kopin Corporation Supplemental Information
(Unaudited) Three Months Ended Nine Months
Ended September 30, 2023 September 24,
2022 September 30, 2023 September 24, 2022
Display Revenues by Category (in millions) Defense
$
5.0
$
5.8
$
16.5
$
17.7
Industrial/Enterprise
0.3
1.7
2.1
4.9
Consumer
0.2
0.7
0.6
1.2
R&D
5.0
3.4
11.7
11.1
License and Royalties
0.1
0.1
0.9
0.3
Total
$
10.6
$
11.7
$
31.8
$
35.2
Stock-Based Compensation Expense Cost of
product revenues
$
311,000
$
42,000
$
765,000
$
120,000
Research and development
214,000
112,000
553,000
368,000
Selling, general and administrative
433,000
144,000
1,026,000
883,000
$
958,000
$
298,000
$
2,344,000
$
1,371,000
Other Financial Information Depreciation and
amortization
$
110,000
$
130,000
$
498,000
$
665,000
View source
version on businesswire.com: https://www.businesswire.com/news/home/20231109731661/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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