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CORRECTING and REPLACING Kopin Reports Results for Third Quarter 2022

  • Total Revenues increase 8% year-over-year
  • Defense Revenues Increase 68% year-over-year

Kopin Corporation (Nasdaq: KOPN) today announced a correction to its press release issued on November 1, 2022, announcing the Company's unaudited financial results for the third quarter ended September 24, 2022.

The Company revised its Accounting Standards Codification Topic 606 (ASC 606) over time revenue recognition related to defense contracts which resulted in a decrease of approximately $1.6 million of revenue.

The revised revenue results is as follows:

  • Total revenues for the three and nine months ended September 24, 2022 were $11,729,380 and $35,216,834, respectively. These represent an 8% year over year increase for the three months ended September 24, 2022.
  • Revenues from the sale of defense products were $5,851,425 and $17,695,160 for the three and nine months ended September 24, 2022, respectively. This represents a 68% year over year increase for the three months ended September 24, 2022.
  • Net Loss Attributable to Kopin Corporation for the third quarter of 2022 was $6.1 million, or $0.07 per share, compared with Net Loss Attributable to Kopin Corporation of $2.1 million, or $0.02 per share, for the third quarter of 2021.

The updated release reads:

KOPIN REPORTS RESULTS FOR THIRD QUARTER 2022

  • Total Revenues increase 8% year-over-year
  • Defense Revenues Increase 68% year-over-year

Kopin Corporation (Nasdaq: KOPN), a leading provider of high-resolution micro-displays and sub-systems for defense, enterprise and consumer augmented reality, virtual reality and mixed reality systems, today provided an update on its business initiatives and reported financial results for the third quarter ended September 24, 2022.

“We had a good quarter with revenues up 8% over the third quarter of last year, driven by growth in our defense and consumer businesses,” said Michael Murray, Kopin’s CEO. “While we continue to drive growth in these markets, my immediate focus is on yield improvements, on time/in full deliveries as well as cost controls, leading to improved margins and cash flow.”

Murray continued, “As we move into 2023 I see numerous opportunities to drive revenues, beginning with accelerating growth from our defense and industrial businesses, where we already have a solid order book. We will also leverage our unique ability to offer complex integrated optical display assemblies, which are critical to increasing the applications for AR/VR/MR, among other opportunities.”

“Technology has always been at the heart of Kopin’s success and we will continue executing on our vision to provide our global customers with brilliance in innovation, design and performance paired with a renewed focus on operational excellence,” concluded Murray.

Third Quarter Financial Results

Total revenues for the third quarter ended September 24, 2022 were $11.7 million, compared to $10.9 million for the third quarter ended September 25, 2021, an 8% year-over-year increase.

Cost of Product Revenues for the third quarter of 2022 was $8.0 million, or 97% of net product revenues, compared with $5.1 million, or 78% of net product revenues, for the third quarter of 2021. The higher cost of product revenues as a percentage of net product revenues was partially due to a $1 million warranty charge due to a supply-chain related quality issue from a vendor.

Research and Development (R&D) expenses for the third quarter of 2022 were $3.4 million compared to $3.8 million for the third quarter of 2021, an 8% decrease year over year. The decrease in R&D expense as compared to the prior year was equally split between internal R&D and customer funded R&D activities.

Selling, General and Administration (SG&A) expenses were $4.3 million for the third quarter of 2022, compared to $4.0 million for the third quarter of 2021. The increase was primarily due to an increase in compensation and professional fees, which were partially offset by lower stock-based compensation.

Other income and expense included a non-cash impairment charge of $2.0 million related to an investment whose business is being affected by COVID related issues.

Net Loss Attributable to Kopin Corporation for the third quarter of 2022 was $6.1 million, or $0.07 per share, compared with Net Loss Attributable to Kopin Corporation of $2.1 million, or $0.02 per share, for the third quarter of 2021.

Net Cash Used in Operating Activities for the nine months ended September 24, 2022, was approximately $15.6 million. Kopin’s cash and equivalents and marketable securities were approximately $15.0 million at September 24, 2022 as compared to $29.3 million at December 25, 2021.

In July 2022, we sold 675,000 shares of common stock through our existing At-The-Market equity program (ATM), which we had entered into in March 2021, for gross proceeds of $900,000 before deducting broker expenses of less than $100,000. We have not sold shares under the ATM Program since July.

About Kopin

Kopin Corporation is a leading developer and provider of innovative wearable technologies and critical components for integration into wearable computing systems for defense, industrial and consumer products. Kopin’s technology portfolio includes ultra-small displays, 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. These forward-looking statements include statements with respect to our numerous opportunities to drive revenues in 2023; such as accelerating growth from our defense and industrial businesses; our growth in the defense and consumer markets; and our intent to leverage our unique ability to offer complex integrated optical display assemblies. 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 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 25, 2021, or as updated from time to time our Securities and Exchange Commission filings.

Kopin Corporation

Supplemental Information

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Nine Months Ended

 

 

September 24, 2022

 

September 25, 2021

 

September 24, 2022

 

September 25, 2021

Display Revenues by Category (in millions)
Defense

$

5.8

$

3.5

$

17.7

$

12.3

Industrial/Enterprise

 

1.7

 

2.7

 

4.9

 

7.4

Consumer

 

0.7

 

0.4

 

1.2

 

1.3

R&D

 

3.4

 

4.1

 

11.1

 

10.4

License and Royalties

 

0.1

 

0.2

 

0.3

 

1.1

Total

$

11.7

$

10.9

$

35.2

$

32.5

 
Stock-Based Compensation Expense
Cost of product revenues

$

42,000

$

38,000

$

120,000

$

207,000

Research and development

$

112,000

 

180,000

 

368,000

 

395,000

Selling, general and administrative

$

144,000

 

424,000

 

883,000

 

3,165,000

$

298,000

$

642,000

$

1,371,000

$

3,767,000

 
Other Financial Information
Depreciation and amortization

$

130,000

$

154,000

$

665,000

$

566,000

 
Kopin Corporation

Condensed Consolidated Statements of Operations

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Nine Months Ended

 

 

September 24, 2022

 

September 25, 2021

 

September 24, 2022

 

September 25, 2021

Revenues:
Net product revenues

$

8,254,686

 

$

6,591,852

 

$

23,765,872

 

$

21,089,515

 

Research and development and other revenues

 

3,474,693

 

 

4,295,321

 

 

11,450,961

 

 

11,379,282

 

 

11,729,379

 

 

10,887,173

 

 

35,216,833

 

 

32,468,797

 

Expenses:
Cost of product revenues

 

7,987,154

 

 

5,145,175

 

 

23,676,283

 

 

17,586,389

 

Research and development

 

3,441,405

 

 

3,751,729

 

 

13,995,393

 

 

11,055,282

 

Selling, general and administration

 

4,320,117

 

 

4,035,998

 

 

13,112,133

 

 

13,982,682

 

 

15,748,676

 

 

12,932,902

 

 

50,783,809

 

 

42,624,353

 

 
Loss from operations

 

(4,019,297

)

 

(2,045,729

)

 

(15,566,976

)

 

(10,155,556

)

 
Other (expense) income, net

 

(2,093,877

)

 

(50,954

)

 

2,505,949

 

 

89,267

 

 
Loss before provision for income taxes and net (income) loss from noncontrolling interest

 

(6,113,174

)

 

(2,096,683

)

 

(13,061,027

)

 

(10,066,289

)

 
Tax provision

 

(36,000

)

 

(32,000

)

 

(108,000

)

 

(97,000

)

 
Net loss

 

(6,149,174

)

 

(2,128,683

)

 

(13,169,027

)

 

(10,163,289

)

 
Net (income) loss attributable to noncontrolling interest

 

-

 

 

(107

)

 

280

 

 

39,394

 

 
Net loss attributable to Kopin Corporation

$

(6,149,174

)

$

(2,128,790

)

$

(13,168,747

)

$

(10,123,895

)

 
Net loss per share:
Basic and diluted

$

(0.07

)

$

(0.02

)

$

(0.14

)

$

(0.11

)

 
Weighted average number of common shares outstanding:
Basic and diluted

 

93,516,231

 

 

90,517,330

 

 

91,317,288

 

 

88,903,658

 

 
Kopin Corporation
Condensed Consolidated Balance Sheets
(Unaudited)
 
September 24, 2022 December 25, 2021
ASSETS
Current assets:
Cash and marketable securities

$

15,003,009

 

$

29,295,466

 

Accounts receivable, net

 

8,531,835

 

 

12,113,070

 

Inventory

 

6,660,810

 

 

6,581,139

 

Contract assets and unbilled receivables

 

4,605,889

 

 

2,299,392

 

Prepaid and other current assets

 

1,726,225

 

 

1,918,678

 

 
Total current assets

 

36,527,768

 

 

52,207,745

 

 
Plant and equipment, net

 

1,627,468

 

 

1,888,963

 

Operating lease right-of-use assets

 

3,540,073

 

 

3,828,066

 

Other assets

 

170,932

 

 

170,932

 

Equity investments

 

7,612,065

 

 

4,912,022

 

 
Total assets

$

49,478,306

 

$

63,007,728

 

 
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable

$

4,936,931

 

$

5,483,970

 

Accrued expenses

 

7,521,147

 

 

4,133,379

 

Contract liabilities and billings in excess of revenue earned

 

1,097,919

 

 

4,063,031

 

Operating lease liabilities

 

761,734

 

 

701,204

 

Customer deposits

 

378,201

 

 

2,638,103

 

Deferred tax liabilities

 

424,433

 

 

513,417

 

 
Total current liabilities

 

15,120,365

 

 

17,533,104

 

 
Other long term liabilities

 

1,395,603

 

 

2,739,531

 

Operating lease liabilities, net of current portion

 

2,753,885

 

 

3,108,236

 

 
Total Kopin Corporation stockholders' equity

 

30,381,067

 

 

39,799,191

 

Noncontrolling interest

 

(172,614

)

 

(172,334

)

Total stockholders' equity

 

30,208,453

 

 

39,626,857

 

Total liabilities and stockholders' equity

$

49,478,306

 

$

63,007,728

 

 

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