Kopin Reports Second-Quarter 2005 Financial Results; CyberDisplay Products for Military and Digital Media Drive Sequential Revenue Growth and EPS of $0.03.TAUNTON Taunton, city, England Taunton (tôn`tən, tän`–), city (1991 pop. 47,793), county seat of Somerset, SW England, on the Trove River. , Mass. -- Kopin Corporation (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on : KOPN) today announced financial results for the second quarter ended June 25, 2005. Second-quarter Financial Summary: --Total revenue of $21.0 million, in line with the guidance provided in the Company's first-quarter 2005 news release and conference call. This compares with total revenue of $23.6 million in the second quarter of 2004 and $18.9 million in the first quarter of 2005. --Net income of $1.9 million, or $0.03 per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share, compared with a net loss of $2.3 million, or $0.03 per share, a year earlier. In the first quarter of 2005, Kopin recorded net income of $1.2 million, or $0.02 per share. --CyberDisplay revenue totaling $12.0 million, compared with $13.2 million in the year-ago period and $9.5 million in the first quarter of 2005. --III-V revenue of $9.0 million versus $10.4 million in the second quarter of 2004 and $9.4 million in the first quarter of 2005. "We posted a sequential increase of more than 25 percent in CyberDisplay revenue, generated positive cash flow and recorded our second consecutive quarter of profitability," said Kopin President and Chief Executive Officer Dr. John C.C. Fan. "The positive results Kopin has achieved in the past two quarters speak strongly and clearly to our strategy of transitioning our LED operation to Asia via the KO-BRITE joint venture, increasing our operational effectiveness and focusing on our core products and strategic customers. Even as we strengthen the bottom line, we continue investing aggressively to bring new products to market for our customers, especially in the microdisplay area. "Our second quarter financial performance reflects strong sales to the U.S. military, where Kopin supplies microdisplays for a range of thermal imaging systems," Dr. Fan continued. "In addition, second-quarter growth was driven by a pickup Pickup A gain in yield made by selling one bond and buying another. Also referred to as "yield pickup." Notes: When the present yield is relatively low compared to the longer-term yields, pickups will be done by investors trying to increase the yield and duration of their in orders from digital camcorder customers." Recent Highlights: --Kopin introduced the CyberEVF(R) 230K, the world's first complete electronic viewfinder An electronic viewfinder or EVF is a viewfinder where the image captured by the lens is projected electronically onto a miniature display. The image on this display is used to assist in aiming the camera at the scene to be photographed. (EVF EVF Electronic Viewfinder EVF Eaton Vance Senior Income Trust EVF Éducation à la Vie Familiale EVF Early Vertical Forearm EVF European Venous Forum EVF Endovascular Forum EVF Eye View Finder (cameras/camcorders) ) for the new generation of wafer-thin, high-performance digital cameras. The CyberEVF 230K was designed in conjunction with a top-tier digital camera OEM (Original Equipment Manufacturer) The rebranding of equipment and selling it. The term initially referred to the company that made the products (the "original" manufacturer), but eventually became widely used to refer to the organization that buys the products and customer, with the goal of making it the standard EVF for high-zoom, high-resolution cameras. Kopin has begun mass production of the EVF for this customer and expects significant revenue from this product. --Kopin expects to be a beneficiary beneficiary Person or entity (e.g., a charity or estate) that receives a benefit from something (e.g., a trust, life-insurance policy, or contract). A primary beneficiary receives proceeds from a trust or insurance policy before any other. of the U.S. House of Representatives-approved 2006 Defense Appropriations Bill, which allocates $3 million specifically to establish a manufacturing process for the development of enhanced microdisplays. The bill, which must be approved by the U.S. Senate and signed by President Bush to become law, represents a key step toward providing troops on the battlefield with next-generation night vision technology. --The Company launched the Binocular binocular, small optical instrument consisting of two similar telescopes mounted on a single frame so that separate images enter each of the viewer's eyes. As with a single telescope, distant objects appear magnified, but the binocular has the additional advantage Display Module (BDM-230K), a plug-and-play video subsystem A unit or device that is part of a larger system. For example, a disk subsystem is a part of a computer system. A bus is a part of the computer. A subsystem usually refers to hardware, but it may be used to describe software. that combines all of the electronics and optics for mobile video eyewear eye·wear n. 1. Eyeglasses, goggles, or other objects worn over the eyes. 2. Fashionable eyeglasses. applications into a lightweight, self-contained unit. The Kopin BDM-230K delivers sharp, full-color, QVGA-quality (320 x 240 resolution) video with a virtual image equivalent to a 35-inch TV. Featuring dual Kopin CyberDisplay(R) 230K microdisplays, the BDM-230K enables video eyewear manufacturers to reduce the initial investment and manufacturing lead-time of new product development and introduction. Kopin expects quick adoption by customers of the BDM-230K, as evidenced by the recent announcement about the design-in of this module by 3001 AD for its Trimersion virtual reality system. Trimersion brings virtual reality gaming to the Microsoft Xbox, Sony PlayStation Sony Playstation - Playstation and personal computers. --Tokyo-based Scalar scalar, quantity or number possessing only sign and magnitude, e.g., the real numbers (see number), in contrast to vectors and tensors; scalars obey the rules of elementary algebra. Many physical quantities have scalar values, e.g. Corp. chose Kopin's 180K color filter Color filter An optical element that partially absorbs incident radiation, often called an absorption filter. The absorption is selective with respect to wavelength, or color, limiting the colors that are transmitted by limiting those that are absorbed. microdisplay for its new Teleglass, the world's smallest video eyewear for video-on-the-go applications. Connected to a mobile phone, portable DVD player A handheld device with a built-in DVD drive and flip-over lid that contains a screen, typically 6" to 10" in size. It may support rear seat passenger viewing, in which case the unit is hung upside down from the back of the front seat head rest, and a switch flips screen content 180 or digital camera, the Teleglass projects high-resolution video on eyeglasses eyeglasses or spectacles, instrument or device for aiding and correcting defective sight. Eyeglasses usually consist of a pair of lenses mounted in a frame to hold them in position before the eyes. , creating a virtual 28-inch TV screen. --MicroOptical Corp. integrated Kopin's full color, QVGA (Quarter VGA) A screen resolution of 320x240 pixels, which is used on handheld devices. Although 320x240 seems half the 640x480 VGA resolution, the "quarter" comes from the total number of pixels, which is one fourth the number (320 times 240=76800; 640 times 480=307200). resolution microdisplays into a new video eyewear system developed for France Telecom's wireless unit, Orange SA. The sleek In the Dungeons and Dragons fantasy role-playing game, the Sleek is a Magical Beast. It resembles an Ermine. It seems to have no other desire aside from biting victims and running off. , stylish Stylish is a free Mozilla extension that allows for the manipulation of web pages and XUL application user interfaces through the use of CSS or user styles available localy or from centralized web-site [1], which allows style sharing. new glasses will be paired with Samsung mobile phones, allowing Orange subscribers to watch television and movies, check their e-mail, view photos and browse (1) To view the contents of a file or a group of files. Browser programs generally let you view data by scrolling through the documents or databases. In a database program, the browse mode often lets you edit the data. See Web browser. the Internet Internet Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the through two QVGA resolution full color CyberDisplays. According to according to prep. 1. As stated or indicated by; on the authority of: according to historians. 2. In keeping with: according to instructions. 3. a 2004 report from the McLaughlin Consulting Group and Insight Media, the near-to-eye personal display market is expected to reach $1 billion by 2008. "Our microdisplays and modules are enabling the development of exciting products and creating new opportunities in a fresh segment of the market - video eyewear for portable information and entertainment," Dr. Fan said. "Some of our customers plan to introduce their eyewear products into the marketplace over the next several months. While initial production volumes for this year are expected to be relatively small, momentum is building rapidly and the potential is enormous. The mobile video era has arrived, and I am confident in Kopin's ability to build on its leadership as this dynamic market continues to grow." Six-Month Results: For the six months ended June 25, 2005, total revenue was $39.9 million compared with $45.9 million for the same period last year. Revenue from III-V products was $18.4 million for the first six months of 2005, down from $19.9 million for the first six months of 2004. CyberDisplay revenues were $21.5 million versus $26.0 million in the first half of 2004. Net income for the most recent six-month period was $3.0 million, or $0.04 per diluted share, compared with a net loss of $5.7 million, or $0.08 per share, for the first six months of 2004. Cash and marketable securities Marketable Securities Very liquid securities that can be converted into cash quickly at a reasonable price. Notes: Marketable securities are very liquid as they tend to have maturities less than one year, and the rate at which these securities can be bought or sold has totaled $112.9 million as of June 25, 2005, compared with $107.8 million at March 26, 2005. During the second quarter of 2005, the Company repurchased approximately 1.1 million shares of common stock, bringing its total investment to approximately 1.6 million shares, or $5.3 million, since the inception of the stock buyback Stock buyback A corporation's purchase of its own outstanding stock, usually in order to raise the company's earnings per share. stock buyback See buyback. program. Business Outlook: "We expect strong sales of our microdisplays in the third quarter," Dr. Fan said. "That performance, combined with the steady contribution of our HBT HBT Heterojunction Bipolar Transistor HBT HyCult Biotechnology (Uden, The Netherlands) HBT Hanbury-Brown-Twiss (interferometer) HBT Herring Bone Twill HBT Heflex Bioengineering Test products, should provide us with third quarter revenue of between $23.5 million and $24.5 million, with CyberDisplay revenue up more than 20 percent sequentially. We will continue our focus on profitability while pursuing our new product activities in video eyewear, military night vision applications and digital still cameras. The elements necessary to produce significant growth for Kopin are coming together, and we have the technology, products and experience to capitalize on Cap´i`tal`ize on` v. t. 1. To turn (an opportunity) to one's advantage; to take advantage of (a situation); to profit from; as, to capitalize on an opponent's mistakes s>. those opportunities." Second-Quarter Conference Call: Kopin will provide a live audio webcast of its second-quarter conference call for investors at 5:00 p.m. ET today, August 3, 2005. Investors who want to hear the call should log on to the Investor Relations Investor relations The process by which the corporation communicates with its investors. section of Kopin's website, www.kopin.com, at least 15 minutes before the event's broadcast. The call will be available on the Investor Relations section for one week. After that, investors can access an archived version of the call on Kopin's website. Kopin's second-quarter conference call also can be heard live by dialing (719) 457-2625 or (800) 967-7134 five minutes prior to the call. A replay of the call will be available from 8:00 p.m. ET Wednesday, August 3 through midnight ET Tuesday, August 9. To access the replay, dial (719) 457-0820 or (888) 203-1112 and refer to confirmation code 4200958. About Kopin Kopin is the largest U.S. manufacturer of microdisplays to the consumer electronics, industrial and military markets and the world's largest merchant supplier of heterojunction bipolar transistor The heterojunction bipolar transistor (HBT) is an improvement of the bipolar junction transistor (BJT) that can handle signals of very high frequencies up to several hundred GHz. It is common in modern ultrafast circuits, mostly radio-frequency (RF) systems. (HBT) wafers wafers compressed roughage in flat plates useful for feeding to animals in transit. for power amplifier Power amplifier The final stage in multistage amplifiers, such as audio amplifiers and radio transmitters, designed to deliver appreciable power to the load. integrated circuits Integrated circuits Miniature electronic circuits produced within and upon a single semiconductor crystal, usually silicon. Integrated circuits range in complexity from simple logic circuits and amplifiers, about 1/20 in. (1. . Since introducing its award-winning microdisplay technology in 1999, Kopin has shipped more than 15 million CyberDisplays for digital cameras, personal video eyewear, camcorders, thermal weapon sights and head-mounted displays. The Company also has shipped more than 500,000 HBT transistor wafers, which have been integrated into more than 1 billion wireless handsets and into WiFi, VoIP and high-speed Internet See broadband. data transmission systems. Kopin's technology is protected by more than 200 global patents and patents pending. For more information, please visit Kopin's website at www.kopin.com. Safe Harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. Statement Statements in this news release may be considered "forward-looking" statements under the "Safe Harbor" provisions of the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995. These include statements relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc : Kopin's expectation for significant revenue from the CyberEVF230K; the expectation for quick adoption of the BDM-230K; the Company's expectation that it will be a beneficiary of the U.S. House of Representative-approved 2006 Defense Appropriations Bill; the forecast for the near-to-eye personal microdisplay market to reach $1 billion by 2008; the expectation that several Kopin customers plan to introduce their video eyewear products into the marketplace over the next several months; the scope of initial production volumes of video eyewear products; the expectation for strong microdisplay sales and the steady contribution of the Company's HBT products in the third quarter of 2005; projections for third-quarter revenue of between $23.5 million and $24.5 million, with CyberDisplay revenue up more than 20 percent sequentially; the Company's plan to continue to focus on profitability and pursue new microdisplay product activities in video eyewear, military and night vision applications and digital still cameras; and that the expectation that the elements necessary to produce significant growth for Kopin are coming together, and the Company's belief that it has the technology, products and experience to capitalize on those opportunities. These statements involve a number of risks and uncertainties that could materially affect future results. These risk factors include, but are not limited to: technical, manufacturing, marketing or other issues that may prevent either the adoption or rapid acceptance of the CyberEVF230K and the BDM-230K; competitive products, pricing or technical issues that may prevent the near-to-eye microdisplay market from reaching the size forecast by the McLaughlin Consulting Group and Insight Media; the risk that new product initiatives and other research and development efforts may not be successful; the loss of significant customers; the potential that costs to produce the Company's microdisplay and HBT products will increase significantly, or that yields will decline; the ability of the Company's customers to ramp initial production volumes of their video eyewear products; market acceptance of video eyewear products; competitive products, pricing, manufacturing delays, technical issues, economic conditions or external factors that 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. These include, but are not limited to, the Company's Annual Report on Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. for the year ended December 25, 2004. CyberDisplay, GAIN-HBT and The NanoSemiconductor Company are trademarks of Kopin Corporation. Kopin - The NanoSemiconductor Company(TM) The Company's condensed con·dense v. con·densed, con·dens·ing, con·dens·es v.tr. 1. To reduce the volume or compass of. 2. To make more concise; abridge or shorten. 3. Physics a. consolidated statement of operations See Income statement. and balance sheet are attached.
Kopin Corporation
Condensed Consolidated Statements of Operations
(Unaudited)
Three Months Ended Six Months Ended
------------------------ ------------------------
June 25, June 26, June 25, June 26,
2005 2004 2005 2004
------------------------ ------------------------
Revenues:
Product revenues $20,481,962 $22,797,438 $37,747,260 $44,930,434
Research and
development
revenues 555,616 761,553 2,194,250 986,553
------------------------ ------------------------
21,037,578 23,558,991 39,941,510 45,916,987
Expenses:
Cost of product
revenues 13,191,709 19,841,086 24,095,379 38,924,899
Research and
development 2,705,638 3,502,294 6,104,969 7,422,729
Selling, general
and administrative 3,907,982 2,609,890 7,171,572 5,558,655
Asset impairment - - 517,902 -
------------------------ ------------------------
19,805,329 25,953,270 37,889,822 51,906,283
------------------------ ------------------------
Income (loss) from
operations 1,232,249 (2,394,279) 2,051,688 (5,989,296)
Other income and
(expense):
Interest and
other income 834,077 689,666 1,613,690 1,573,093
Interest and
other expense (2,973) (12) (205,140) (198,096)
------------------------ ------------------------
831,104 689,654 1,408,550 1,374,997
------------------------ ------------------------
Income (loss) before
minority interest,
income taxes and 2,063,353 (1,704,625) 3,460,238 (4,614,299)
equity losses in
unconsolidated
affiliates
Minority interest in
income of
subsidiary (114,058) (202,366) (158,006) (307,044)
------------------------ ------------------------
Income (loss) before
income taxes and
equity losses 1,949,295 (1,906,991) 3,302,232 (4,921,343)
in unconsolidated
affiliates
Provision for income
taxes (75,988) (129,009) (108,227) (196,565)
------------------------ ------------------------
Income (loss) before
equity losses in
unconsolidated
affiliates 1,873,307 (2,036,000) 3,194,005 (5,117,908)
Equity losses in
unconsolidated
affiliates - (300,000) (149,508) (600,000)
------------------------ ------------------------
Net income (loss) $1,873,307 $(2,336,000) $3,044,497 $(5,717,908)
======================== ========================
Net income (loss)
per share:
Basic $0.03 $(0.03) $0.04 $(0.08)
======================== ========================
Diluted $0.03 $(0.03) $0.04 $(0.08)
======================== ========================
Weighted average
number of common
shares outstanding:
Basic 69,520,488 70,065,958 69,779,619 70,063,096
======================== ========================
Diluted 69,722,261 70,065,958 69,983,427 70,063,096
======================== ========================
Kopin Corporation
Condensed Consolidated Balance Sheets
(Unaudited)
June 25, December 25,
2005 2004
--------------------------
ASSETS
Current assets:
Cash and marketable securities $112,894,966 $111,900,466
Accounts receivable, net 8,634,439 9,088,525
Inventory 9,003,860 7,934,955
Optical equipment and receivables from
transfer to joint venture 1,115,430 5,785,500
Prepaid and other assets 1,705,211 1,572,307
--------------------------
Total current assets 133,353,906 136,281,753
Equipment and improvements, net 10,190,697 11,615,633
Other assets 11,007,490 7,934,527
--------------------------
Total assets $154,552,093 $155,831,913
==========================
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable $8,818,540 $9,075,976
Accrued expenses 2,535,285 2,549,057
Billings in excess of revenue earned 941,018 1,240,347
--------------------------
Total current liabilities 12,294,843 12,865,380
Minority interest 4,004,180 3,780,693
Stockholders' equity 138,253,070 139,185,840
--------------------------
Total liabilities and stockholders' equity $154,552,093 $155,831,913
==========================
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