Exhibit 99.1
Kopin Reports Full-Year 2004 Revenue of $87.4
Million; CyberDisplay Achieves Record Revenue of $49.1 Million
TAUNTON, Mass.--(BUSINESS WIRE)--Feb. 24, 2005--Kopin Corporation
(NASDAQ: KOPN) today announced financial results for the fourth
quarter and 12 months ended December 25, 2004.
Financial Summary:
-- Revenue for the 12 months ended December 25, 2004 of $87.4
million, an increase of 14 percent from $76.6 million in 2003.
-- Revenue for the fourth quarter of 2004 of $18.5 million, in
line with guidance provided by the Company in its
third-quarter 2004 financial results news release and
conference call. This compares with revenue of $21.1 million
in the fourth quarter of 2003 and $22.9 million in the third
quarter of 2004.
-- Net loss of $7.0 million, or $0.10 per share, in the fourth
quarter of 2004 compared with net loss of $0.6 million, or
$0.01 per share, for the fourth quarter of 2003 and a net loss
of $1.1 million, or $0.02 per share, in the third quarter of
2004.
-- The Company recorded a non-cash impairment charge of $5.3
million for the write-down of assets resulting from the
transfer of its light-emitting diode (LED) operations to a
newly formed joint venture based in Asia.
-- CyberDisplay revenue for the fourth quarter of 2004 totaled
$9.9 million, compared with $12.4 million in the year-ago
period and $13.2 million in the third quarter of 2004.
-- Revenue from III-V products in the fourth quarter of 2004 was
$8.6 million, compared with $8.8 million in the fourth quarter
of 2003 and $9.7 million in the third quarter of 2004.
-- The Company's financial position remained strong with $111.9
million of cash and marketable securities and no long-term
debt. In addition, the Company owns approximately 400,000
shares of Micrel stock valued at approximately $4.3 million at
December 25, 2004.
"We finished 2004 with the second highest revenue total in our
Company's history," said President and Chief Executive Officer John
C.C. Fan. "In addition, 2004 was a year of record CyberDisplay revenue
and continued strong performance from our HBT transistor product line.
In the fourth quarter, we completed a joint venture agreement that
will culminate with the transfer of our LED operation to Asia during
the first half of 2005. As we noted when we announced the joint
venture earlier this month, the resulting company, KO-BRITE Corp.,
will be managed by leading LED packaging and III-V manufacturers based
in China and Taiwan and will be backed by one of Asia's leading
venture capital firms. We believe KO-BRITE truly represents the best
of both worlds, combining Kopin's superb LED technology with a more
globally competitive cost structure. Equally important, the joint
venture allows us to devote additional time and resources to our core
CyberDisplay and HBT businesses."
Expanding CyberDisplay Opportunities in the Military and Consumer
Markets
Kopin continued to expand the reach of its CyberDisplay products
in recent months, announcing contracts to supply microdisplay modules
for the U.S. Army's Thermal Weapon Sight II (TWS-II) program. Kopin
was selected to produce microdisplay systems for BAE Systems of
Lexington, Massachusetts and DRS Optronics of Palm Bay, Florida as
part of the Army's TWS-II program. Initial shipments are slated to
begin in 2005 with volume production scheduled for 2006.
"These new contracts reinforce our position as the microdisplay of
choice for the U.S. military," Dr. Fan said. "Kopin's CyberDisplay is
now the featured microdisplay in thermal weapon sights manufactured by
all three approved suppliers of these critical components for U.S.
troops. Through our thermal weapon sight contracts and other programs
now under development, we expect military sales of the CyberDisplay to
be an important contributor to Kopin's success over the next several
years."
On the consumer side, Kopin's 922k color filter VGA CyberDisplay
is being integrated into multimedia video eyewear systems launched by
Icuiti and Oriscape. The Company is supplying enhanced high-definition
Color Filter VGA microdisplays for Icuiti's V920, the
highest-resolution 3D video eyewear system ever introduced for the
consumer market. In daylight or darkness, the V920 enables users to do
everything from watch movies, video and TV shows, to check e-mail and
play video games. The 922k CyberDisplay also is being incorporated
into Oriscape's newest CyberMan video eyewear. The CyberMan delivers a
high-resolution personal multimedia or video gaming experience,
providing viewers with a virtual image equivalent to a 54-inch
flat-panel screen viewed from nine feet.
"Our CyberDisplay product line creates opportunities for consumer
electronics OEMs to develop dynamic new systems that capitalize on the
excitement of mobile video," Dr. Fan said. "As the camcorder reaches
the end of its lifecycle, the industry is experiencing a shift in
consumer preference toward new, high-growth applications such as mid-
to high-end digital still cameras and 'video on the go' devices. Kopin
is well positioned to capitalize on these high-growth opportunities."
During the fourth quarter of 2004, CyberDisplay revenue was
affected by weakness in the camcorder market and an issue related to a
non-display component being produced for a military system to which
Kopin also is a supplier. "I am pleased to report that the issue has
been resolved and production of an improved military display module
has begun to ramp," Dr. Fan said.
HBT Continues Strong Performance
"In 2004, we experienced 33 percent year-over-year growth in
revenue from non-CyberLite-related III-V products, reflecting the
success of our strategy of establishing a long term contractual
relationship with our largest customer," Dr. Fan said. "The agreement
we entered into last year with our largest customer has allowed both
parties to work together to reduce costs and improve efficiencies."
In January, Kopin announced the award of two U.S. patents covering
the baseline GAIN-HBT device and an enhanced transistor.
Overview of 2004 Financial Results and Fourth Quarter Adjustments
In the fourth quarter of 2004, in addition to the non-cash
impairment charge of $5.3 million for the write-down of LED assets,
Kopin recorded a $900,000 reduction in its allowance for bad debts
based on the Company's recent favorable collection history. The
Company also recorded a reduction of a tax accrual of $300,000. In
addition, as a result of lower-than-planned capital expenditures, the
depreciation expense in the quarter was lower than prior quarters by
approximately $300,000.
Revenue for the 12 months ended December 25, 2004 increased to
$87.4 million from $76.6 million in 2003. Revenue from III-V products
was $38.3 million in 2004, an increase of approximately 16 percent
from revenue of $32.9 million in 2003. CyberDisplay revenue increased
approximately 12 percent to $49.1 million in 2004 from $43.6 million
in 2003. Included in the III-V revenues were sales of CyberLite
products of $2.3 million and $5.8 million for the years ended 2004 and
2003, respectively. The net loss for the 12 months of 2004 was $13.8
million, or $0.20 per share, compared with a net loss of $6.9 million,
or $0.10 per share, in 2003.
Business Outlook
Commenting on Kopin's outlook, Dr. Fan said, "During the first
quarter of 2005, we expect to see traditional seasonality in the
wireless handset and consumer electronics markets, partially offset by
shipments of our new display modules for thermal weapon sights. As
previously discussed, production is again ramping for
CyberDisplay-equipped military display modules, and we expect the
redesigned module to go into full production by the end of the current
quarter. As a result, we anticipate that total first-quarter revenue
will be in the range of $18.0 million to $20.0 million. Longer term,
we expect growing consumer markets, such as digital still cameras and
video eyewear, combined with the expected full ramp of CyberDisplay
module shipments for thermal weapon sights, to pay increasingly
meaningful benefits for the Company later in the year."
Kopin expects to realize significant savings from the transfer of
its LED operation to the joint venture beginning in the third quarter
of 2005. However, because the joint venture facilities will not be
ready until the second quarter of this year, the Company plans to
continue some R&D activities until equipment is shipped to KO-BRITE at
the end of March. In addition, the Company plans to make severance and
termination payouts during the first half of 2005 in the range of
$300,000 to $400,000 as a result of a reduction that affected 40
employees, or approximately 10 percent of the Company's workforce.
Investors should note that Kopin's fiscal 2005 will be a 53-week
year.
Fourth-Quarter Conference Call
Kopin will provide a live audio webcast of its fourth-quarter
conference call for investors at 5:00 p.m. ET today, February 24,
2005. 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 fourth-quarter 2004 conference call also can be heard live
by dialing (913) 981-5510 or (800) 289-0493 five minutes prior to the
call. A replay of the call will be available from 8:00 p.m. ET,
Thursday, February 24 through midnight ET, Wednesday, March 2. To
access the replay, dial (719) 457-0820 or (888) 203-1112 and refer to
confirmation code 3974505.
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.
Safe Harbor Statement
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: planned initial shipments and volume
production of microdisplays supplied for the TWS-II program; the
contribution of military revenue to Kopin's success; the Company's
ability to capitalize on opportunities in the mobile video market;
revenue guidance of between $18.0 million and $20.0 million for the
first quarter of 2005; the expectation of significant savings
beginning in the third quarter of 2005 from the transfer of the
Company's LED operation; and plans to make severance and termination
payouts totaling $300,000 to $400,000 in the first half of 2005. 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; 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 September
25, 2004.
CyberDisplay, CyberLite, GAIN-HBT and The NanoSemiconductor
Company are trademarks of Kopin Corporation.
Kopin - The NanoSemiconductor Company(TM)
Kopin Corporation
Condensed Consolidated Statements of Operations
(Unaudited)
Three Months Ended Twelve Months Ended
------------------------- -------------------------
December 25, December 31, December 25, December 31,
2004 2003 2004 2003
------------ ------------ ------------ ------------
Revenues:
Product revenues $17,463,669 $20,152,176 $85,305,198 $74,883,122
Research and
development
revenues 1,081,478 969,106 2,068,031 1,669,106
------------ ------------ ------------ ------------
18,545,147 21,121,282 87,373,229 76,552,228
Expenses:
Cost of product
revenues 15,560,662 15,292,130 72,318,798 59,954,229
Research and
development 3,310,918 4,425,468 14,275,996 13,524,035
Selling, general
and
administrative 2,037,008 2,240,012 10,171,768 10,244,767
Other - 120,216 240,000 480,864
Impairment 5,322,784 - 5,322,784 -
------------ ------------ ------------ ------------
26,231,372 22,077,826 102,329,346 84,203,895
------------ ------------ ------------ ------------
Loss from
operations (7,686,225) (956,544) (14,956,117) (7,651,667)
Other income and
expense:
Interest and other
income 994,595 893,524 3,213,899 3,477,273
Interest and other
expense (816,079) (336,314) (1,872,788) (1,830,875)
------------ ------------ ------------ ------------
178,516 557,210 1,341,111 1,646,398
------------ ------------ ------------ ------------
Loss before
minority interest
in income of
subsidiary (7,507,709) (399,334) (13,615,006) (6,005,269)
Minority interest
in (income) loss
of subsidiary 325,143 (214,934) (106,009) (872,990)
------------ ------------ ------------ ------------
Loss before income
taxes (7,182,566) (614,268) (13,721,015) (6,878,259)
Tax (provision)
benefit 189,000 - (111,000) -
Net loss $(6,993,566) $(614,268)$(13,832,015) $(6,878,259)
Net loss per share:
Basic $(0.10) $(0.01) $(0.20) $(0.10)
============ ============ ============ ============
Diluted $(0.10) $(0.01) $(0.20) $(0.10)
============ ============ ============ ============
Weighted average number of
common shares outstanding:
Basic 69,967,405 69,812,231 70,051,520 69,540,201
============ ============ ============ ============
Diluted 69,967,405 69,812,231 70,051,520 69,540,201
============ ============ ============ ============
Kopin Corporation
Condensed Consolidated Balance Sheets
(Unaudited)
December 25, December 31,
2004 2003
-------------------------------
ASSETS
Current assets:
Cash and marketable securities $111,900,466 $120,333,188
Accounts receivable, net 9,088,525 6,771,391
Inventory 7,934,955 5,920,364
Prepaid and other assets 7,357,807 1,451,374
-------------------------------
Total current assets 136,281,753 134,476,317
-------------------------------
Equipment and improvements, net 11,615,633 31,008,403
Other assets 7,934,527 9,335,748
-------------------------------
Total assets $155,831,913 $174,820,468
===============================
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable $9,491,917 $14,365,685
Accrued expenses 2,133,115 2,224,928
Billings in excess of revenue
earned 1,240,347 1,378,970
Total current liabilities 12,865,379 17,969,583
-------------------------------
Minority interest 3,780,693 3,113,728
Stockholders' equity 139,185,841 153,737,157
-------------------------------
Total liabilities and stockholders'
equity $155,831,913 $174,820,468
===============================
CONTACT: Kopin Corporation
Richard Sneider, 508-824-6696
rsneider@kopin.com
or
Sharon Merrill Associates, Inc.
Ehren Lister, 617-542-5300
elister@investorrelations.com