Exhbit 99.1
Kopin Reports Second Quarter 2004 Financial Results;
Year-Over-Year Revenue Growth: III-V 20 Percent; CyberDisplay 18 Percent
TAUNTON, Mass.--(BUSINESS WIRE)--July 22, 2004--Kopin Corporation (NASDAQ:
KOPN) today announced financial results for the second quarter ended June 26,
2004.
Key Points for the Second Quarter of 2004:
-- Revenue increased to $23.6 million from $22.4 million in the first
quarter of 2004 and from $19.9 million in the second quarter of 2003,
a year-over-year increase of 19 percent.
-- Net loss was $2.3 million, or $0.03 per share, compared with a net
loss of $3.4 million, or $0.05 per share, in the first quarter of
2004, and a net loss of $1.0 million, or $0.01 per share, for the
second quarter of 2003.
-- CyberDisplay(TM)revenue rose 18 percent year-over-year and three
percent sequentially to $13.2 million; III-V revenue increased 20
percent year-over-year and nine percent sequentially to $10.4 million.
-- Color display products accounted for more than 60 percent of
CyberDisplay(TM) revenue, up from approximately 50 percent of revenue
in the first quarter of 2004.
"Demand for our new display products contributed to another record
CyberDisplay quarter," said President and Chief Executive Officer Dr. John C.C.
Fan. "This demand, combined with continued strength in the wireless handset and
WLAN markets, enabled us to achieve sequential growth in total revenue in the
second quarter. Overall, Kopin's second-quarter revenue was in line with our
expectations and grew approximately 19 percent year-over-year."
New Customer Wins Highlight Strong CyberDisplay Sales
CyberDisplay revenue for the three months ended June 26, 2004 grew for the
fifth consecutive quarter, increasing to $13.2 million from $12.8 million in the
first quarter of 2004, and from $11.2 million in the second quarter of 2003.
During the quarter, Kopin added several new CyberDisplay customers to its
roster. Flat-panel display pioneer Sharp selected Kopin's CyberEVF 113K for two
new Digital Viewcam camcorders, and the CyberEVF 113K also was integrated into
Royal Philips Electronics' new Key Ring 019 multi-purpose personal entertainment
device, winner of Popular Mechanics' 2004 Editor's Choice Award for new product
innovation. In addition, leading Taiwanese digital still camera manufacturer
Tekom Technologies selected Kopin's CyberDisplay 180K as the viewfinder display
for its new AX480 high-end digital camera.
"Kopin continued to broaden its CyberDisplay customer base in the second
quarter, expanding the Company's penetration in both camcorders and digital
still cameras. We also continued to work on new display products designed to
take advantage of emerging opportunities in the military and consumer segments.
We expect to introduce these new displays by the end of the year. In addition,
with a full quarter of high-volume color filter display manufacturing under our
belts, we made significant improvements to our CyberDisplay yields and will
continue to work on improvements in order to return to historical yield levels,"
said Dr. Fan.
Industry Growth Drives III-V Performance
Kopin posted III-V revenue of $10.4 million in the second quarter, compared
with revenue of $9.5 million in the first quarter of 2004 and $8.7 million in
the second quarter of 2003. "Demand for Kopin's HBTs in the wireless handset and
WLAN markets continues to grow, and this portion of our business remains busy.
We currently are working to bring additional capacity online to support the
continued demand growth we anticipate. During the quarter we also experienced a
marked jump in GAIN-HBT(TM) sampling activities and continue to believe that
this transistor should be designed in by the end of this year," said Dr. Fan.
"Kopin continued to make technical progress with its CyberLite(TM) LED
products in the second quarter," said Dr. Fan. "However, this market remains
very competitive from both a performance and pricing standpoint. Our LED product
sales are currently operating with negative gross margin, and this negative
margin, coupled with our substantial investments in development, has resulted in
significant losses for the product line. Accordingly, we are evaluating
different business models to enhance our competitive position in the
high-brightness LED market, including pairing our excellent technology with a
lower cost structure to speed market penetration. We expect to complete our
evaluation by the end of the year."
Six-month Results
For the six months ended June 26, 2004, total revenue increased to $45.9
million from $37.9 million for the same period last year. This marks the
Company's strongest first six-month revenue performance in its history. Revenue
from III-V products was $19.9 million for the first six months of 2004, an
increase of approximately 10 percent over revenue of $18.2 million for the first
six months of 2003. CyberDisplay revenues increased 32 percent to $26.0 million
in the first half of 2004 from $19.8 million in the first half of 2003. The net
loss for the most recent six-month period was $5.7 million, or $0.08 per share,
compared with a net loss of $3.2 million, or $0.05 per share, for the first six
months of 2003.
Business Outlook
Commenting on Kopin's outlook for the third quarter of 2004, Dr. Fan said,
"We expect total revenue to increase approximately 30 percent year over year,
essentially flat on a sequential basis, with III-V revenue comparable to the
second quarter. For our CyberDisplay products, while consumer demand for digital
camcorders has softened, we expect to offset this slowdown with orders from
digital still camera and military customers."
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, July 22, 2004. Investors who want to
hear the call should log on to the Investor Relations 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 2004 conference call also can be heard live by
dialing (913) 981-5508 or (800) 289-0437 five minutes prior to the call. A
replay of the call will be available from 8:00 p.m. ET, Thursday, July 22
through midnight ET, Wednesday, July 28. To access the replay, dial (719)
457-0820 or (888) 203-1112 and refer to confirmation code 781615.
About Kopin
Founded in 1984, Kopin is pioneering the use of nanotechnology to
manufacture nanosemiconductor products that make mobile electronic devices
small, fast, bright, lightweight and power efficient. With an intellectual
property portfolio of more than 200 issued and pending patents, Kopin supplies
the world's largest electronics manufacturers and government agencies with
breakthrough semiconductor products. The Company's liquid-crystal microdisplays,
ultra-efficient transistors and high-brightness light emitting diodes (LEDs)
enhance the delivery and presentation of voice, video and data. Kopin technology
is currently used in nearly one-third of the world's cell phones and camcorders
and is the microdisplay standard for the U.S. military. For more information,
please visit Kopin's website at www.kopin.com.
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 statements relating to Kopin's
expectation that it will continue to work on CyberDisplay yield improvements;
that GAIN-HBT transistors should be designed in by the end of the year; the
success of any future business model for Kopin's CyberLite product; that
third-quarter revenue is expected to increase approximately 30 percent year over
year; that demand for HBTs will continue at a steady pace in the third quarter;
and that sales of CyberDisplays to digital still camera and military customers
will offset the slowdown in demand from digital camcorder customers. These
statements involve a number of risks and uncertainties that could materially
affect future results. Among these risk factors are general economic and
business conditions and growth in the flat panel display, wireless, LED and
gallium arsenide integrated circuit and materials industries; the impact of
competitive products and pricing; availability of third-party components; the
successful CyberLite production ramp; the qualification of Kopin's CyberLite
manufacturing process by additional customers; availability of integrated
circuit fabrication facilities; cost and yields associated with production of
the Company's CyberDisplay imaging devices, CyberLite LEDs and HBT transistor
wafers; loss of significant customers; acceptance of the Company's products;
success of new product and other research and development efforts; continuation
of strategic relationships; the value of shares of Micrel Semiconductor held by
the Company; Kopin's ability to accurately forecast revenue levels; 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
for the year ended December 31, 2003 and Quarterly Report on Form 10-Q for the
period ended March 27, 2004.
CyberDisplay, CyberEVF, CyberLite, GAIN-HBT and The NanoSemiconductor
Company are trademarks of Kopin Corporation.
The Company's condensed consolidated statement of operations and
balance sheet are attached.
Kopin - The NanoSemiconductor Company(TM)
Kopin Corporation
Condensed Consolidated Statements of Operations
(Unaudited)
Three Months Ended Six Months Ended
------------------------ ------------------------
June 26, June 28, June 26, June 28,
2004 2003 2004 2003
------------------------ ------------------------
Revenues:
Product revenues $22,797,438 $19,468,288 $44,930,434 $37,517,034
Research and
development
revenues 761,553 400,000 986,553 400,000
------------------------ ------------------------
23,558,991 19,868,288 45,916,987 37,917,034
Expenses:
Cost of product
revenues 19,841,086 14,838,784 38,924,899 29,897,714
Research and
development 3,502,294 2,922,503 7,422,729 5,803,679
Selling, general
and administrative 2,738,899 3,011,692 5,755,220 5,630,978
Other - 120,216 - 240,432
------------------------ ------------------------
26,082,279 20,893,195 52,102,848 41,572,803
------------------------ ------------------------
Loss from operations (2,523,288) (1,024,907) (6,185,861) (3,655,769)
Other income and
expense:
Interest and
other income 689,666 631,154 1,573,093 1,692,057
Interest and
other expense (300,012) (389,031) (798,096) (782,569)
------------------------ ------------------------
389,654 242,123 774,997 909,488
------------------------ ------------------------
Loss before minority
interest in income
of subsidiary (2,133,634) (782,784) (5,410,864) (2,746,281)
Minority interest in
income of
subsidiary (202,366) (217,916) (307,044) (491,467)
------------------------ ------------------------
Net loss $(2,336,000)$(1,000,700) $(5,717,908)$(3,237,748)
==================================================
Net loss per share:
Basic $(0.03) $(0.01) $(0.08) $(0.05)
======================== ========================
Diluted $(0.03) $(0.01) $(0.08) $(0.05)
======================== ========================
Weighted average
number of common
shares outstanding:
Basic 70,065,958 69,407,418 70,063,096 69,398,812
======================== ========================
Diluted 70,065,958 69,407,418 70,063,096 69,398,812
======================== ========================
Kopin Corporation
Condensed Consolidated Balance Sheets
(Unaudited)
June 26, December 31,
2004 2003
--------------------------
ASSETS
Current assets:
Cash and marketable securities $111,045,536 $120,333,188
Accounts receivable, net 9,440,101 6,771,391
Inventory 10,794,678 5,920,364
Prepaid and other assets 1,662,936 1,451,374
--------------------------
Total current assets 132,943,251 134,476,317
Equipment and improvements, net 27,242,096 31,008,403
Other assets 8,594,358 9,335,749
--------------------------
Total assets $168,779,705 $174,820,469
==========================
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable $14,742,355 $14,365,686
Accrued expenses 2,386,350 2,224,928
Billings in excess of revenue earned 1,413,579 1,378,970
--------------------------
Total current liabilities 18,542,284 17,969,584
Minority interest 3,572,380 3,113,728
Stockholders' equity 146,665,041 153,737,157
--------------------------
Total liabilities and stockholders' equity $168,779,705 $174,820,469
==========================
CONTACT: Kopin Corporation
Richard Sneider, 508-824-6696
rsneider@kopin.com
or
Sharon Merrill Associates, Inc.
Ehren Lister, 617-542-5300
elister@investorrelations.com