|By Business Wire||
|August 6, 2013 07:32 AM EDT||
Kopin Corporation (NASDAQ: KOPN), a leading developer of innovative wearable computing technologies and solutions, today reported financial results for the second quarter ended June 29, 2013, and provided an update on its business initiatives.
Comments on the Second Quarter
“Interest in our wearable computing technology solutions among current and prospective customers continues to grow,” said Dr. John C.C. Fan, Kopin’s President and Chief Executive Officer. “During the second quarter we advanced our ongoing discussions with customers and prospects in areas such as product definition and design, while on the technology front we continued development of our display, optical and noise cancellation technologies.
“A stream of consumer electronics and mobile communications companies are exploring the wearable computing technology market, further strengthening our belief in the significance of the market opportunity. Based on conversations with current and prospective customers, our expertise in critical disciplines, including display, optics, noise cancellation and ergonomics, is what distinguishes us as a leading partner to help these companies build the coming wave of wearable products,” Dr. Fan said.
“We also made significant strides during the quarter in developing an Android version of our software, which we anticipate will be available by year end to complement our Windows version,” Dr. Fan said.
Second Quarter Results
Total revenues for the second quarter ended June 29, 2013, were $6.1 million, compared with $7.0 million for the second quarter of 2012, primarily reflecting a decline in sales of display products for military applications. Cost of goods sold was 110.6% of revenues for the second quarter of 2013 compared with 81.5% of revenues in the same period of 2012, reflecting a lower percentage of display sales from our higher margin military products, an accrual of approximately $0.8 million for the repayment of a state jobs grant, the write-down of approximately $0.6 million for excess inventory associated with military products and manufacturing inefficiencies resulting from reduced volumes.
Research and development expenses for the second quarter were $3.7 million, or approximately 60% of revenues, compared with $2.9 million, or about 42% of revenues for 2012, reflecting an increase in costs to develop our wearable and military technologies.
Selling, general and administrative expenses were $4.7 million, or approximately 78% of revenues, in the second quarter of 2013, compared with approximately $4.1 million, or about 59% of revenues in the same period of 2012.
Net loss for the second quarter of 2013 was $7.8 million, or $0.12 per share, compared with net loss of $5.2 million, or $0.08, for the same period of 2012.
Including the proceeds from the sale of its III-V assets, Kopin’s cash, equivalents and marketable securities at June 29, 2013, increased to $130.4 million at June 29, 2013 from $92.5 million at year-end 2012.
Cash flow used in operating activities for the six month ended June 29, 2013, was $6.7 million.
“Kopin is in the process of transforming its business model from one that has been primarily commodity-based to one powered by providing innovative solutions for wearable devices with the opportunity to generate substantially higher gross margins,” Dr. Fan said. “We continue to make the strategic investments necessary to establish Kopin as the preeminent developer of components and solutions in the wearable technology market.”
Based on its performance through the first six months of 2013 and its anticipated investments for the remainder of the year, Kopin now expects a net loss in the range of $28 million to $33 million for the 12 months ending December 28, 2013. This guidance excludes the impact of the Company’s sale of its III-V assets and its investment in Kopin Taiwan Corporation, and includes its acquisition of a majority interest in e-MDT America.
Financial Results Conference Call
In conjunction with its second-quarter 2013 financial results, Kopin will host a teleconference call for investors and analysts at 9:00 a.m. ET today. To participate, please dial (877) 709-8155 (U.S. and Canada) or (201) 689-8881 (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.
Kopin is a leading developer and provider of innovative wearable technologies and solutions. Kopin’s technology portfolio includes ultra-small displays, optics, speech enhancement technology, software, low-power ASICs, and ergonomically designed headset computing systems. Kopin's proprietary components and technology are protected by more than 200 global patents and patents pending. For more information, please visit Kopin's website at www.kopin.com.
Kopin, CyberDisplay and Golden-i are trademarks of Kopin Corporation.
Statements in this news 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 the Company’s efforts to derive revenue from royalty and licensing fees and increase gross margins; the Company’s plans to make strategic investments in its establish itself as the preeminent developer of components and solutions in the wearable technology market; and the Company’s expectation that its net loss for full-year 2013 will be in the range of $28 million to $33 million. 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: the Company’s 2013 financial expectations may turn out to be wrong; 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 rapid 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 its 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 financial guidance; 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 29, 2012, and the Company’s subsequent filings with the Securities and Exchange Commission. You should not place undue reliance on any forward-looking statements, which speak only as of the date on which they are made. The Company undertakes no responsibility to update any of these forward-looking statements to reflect events or circumstances occurring after the date of this report.
|Three Months Ended||Six Months Ended|
June 29, 2013
June 30, 2012
June 29, 2013
June 30, 2012
|Display Revenues by Category (in millions)|
|Consumer Electronics Applications||2.5||3.0||5.5||5.8|
|Research and Development||0.5||0.9||1.2||1.4|
|Stock-Based Compensation Expense|
|Cost of product revenues||$||65,000||$||91,000||$||118,000||$||178,000|
|Research and development||73,000||68,000||127,000||133,000|
|Selling, general and administrative||776,000||915,000||2,175,000||1,783,000|
|Other Financial Information|
|Depreciation and amortization||$||906,000||$||2,527,000||$||2,002,000||$||5,133,000|
|Treasury stock purchases||$||2,231,000||$||-||$||2,231,000||$||3,456,000|
|Condensed Consolidated Statements of Operations|
|Three Months Ended||Six Months Ended|
June 29, 2013
June 30, 2012
June 29, 2013
June 30, 2012
|Research and development revenues||469,867||924,031||1,220,928||1,386,835|
|Cost of product revenues||6,203,960||4,960,588||12,168,366||12,109,096|
|Research and development||3,657,952||2,927,695||7,905,508||5,929,910|
|Selling, general and administrative||4,719,566||4,118,056||10,468,679||8,327,685|
|Impairment of investments||-||1,704,770||-||1,704,770|
|Loss from operations||(8,502,833||)||(6,699,531||)||(18,144,823||)||(10,193,853||)|
|Other income (expense), net||851,515||394,183||(1,279,905||)||1,429,314|
|Loss before (provision) benefit for income taxes, equity losses in||(7,651,318||)||(6,305,348||)||(19,424,728||)||(8,764,539||)|
|unconsolidated affiliates and net loss (income) from noncontrolling interest|
|(Provision) benefit for income taxes||(194,000||)||85,500||12,846,000||(12,800||)|
|Loss before equity loss in unconsolidated affiliate and net||(7,845,318||)||(6,219,848||)||(6,578,728||)||(8,777,339||)|
|loss (income) from noncontrolling interest|
|Equity losses in unconsolidated affiliates||(83,697||)||(233,907||)||(182,785||)||(390,202||)|
|Loss from continuing operations||(7,929,015||)||(6,453,755||)||(6,761,513||)||(9,167,541||)|
|(Loss) income from discontinued operations, net of tax||(49,356||)||1,328,961||20,147,532||1,574,661|
|Net (loss) income||(7,978,371||)||(5,124,794||)||13,386,019||(7,592,880||)|
|Net loss (income) attributable to noncontrolling interest||165,183||(72,738||)||436,900||(183,975||)|
|Net (loss) income||$||(7,813,188||)||$||(5,197,532||)||$||13,822,919||$||(7,776,855||)|
|Net (loss) income per share:|
|Net (loss) income per share||(0.12||)||$||(0.08||)||$||0.22||$||(0.12||)|
|Net (loss) income per share||$||(0.12||)||$||(0.08||)||$||0.22||$||(0.12||)|
|Weighted average number of common shares outstanding:|
|Condensed Consolidated Balance Sheets|
|June 29, 2013||December 29, 2012|
|Cash and marketable securities||$||130,383,712||$||92,485,349|
|Accounts receivable, net||2,809,834||5,517,365|
|Prepaid and other current assets||1,414,985||1,600,873|
|Current assets held for sale||-||21,573,729|
|Total current assets||138,277,465||126,967,069|
|Equipment and improvements, net||6,429,706||8,486,406|
|Noncurrent assets held for sale||-||29,145,732|
|LIABILITIES AND STOCKHOLDERS' EQUITY|
|Billings in excess of revenue earned||1,930,850||1,220,395|
|Current liabilities held for sale||-||7,102,895|
|Total current liabilities||12,357,393||20,176,436|
Noncurrent liabilities held for sale
|Total Kopin Corporation stockholders' equity||157,532,747||148,733,680|
|Total stockholders' equity||157,889,275||155,085,910|
Total liabilities and stockholders' equity
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