Exhibit 99.1
Kopin Reports Second-Quarter 2005 Financial
Results; CyberDisplay Products for Military and Digital Media Drive
Sequential Revenue Growth and EPS of $0.03
TAUNTON, Mass.--(BUSINESS WIRE)--Aug. 3, 2005--Kopin Corporation
(NASDAQ: 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 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 in orders from digital
camcorder customers."
Recent Highlights:
-- Kopin introduced the CyberEVF(R) 230K, the world's first
complete electronic viewfinder (EVF) 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 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 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 Display Module (BDM-230K),
a plug-and-play video subsystem that combines all of the
electronics and optics for mobile video eyewear 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
and personal computers.
-- Tokyo-based Scalar Corp. chose Kopin's 180K color filter
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 or digital camera, the
Teleglass projects high-resolution video on eyeglasses,
creating a virtual 28-inch TV screen.
-- MicroOptical Corp. integrated Kopin's full color, QVGA
resolution microdisplays into a new video eyewear system
developed for France Telecom's wireless unit, Orange SA. The
sleek, stylish 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 the
Internet through two QVGA resolution full color CyberDisplays.
According to 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 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 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 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 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 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 (HBT)
wafers for power amplifier integrated circuits. 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 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 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: 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 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 consolidated statement of operations 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
==========================
CONTACT: Kopin Corporation
Richard Sneider, 508-824-6696
Chief Financial Officer
rsneider@kopin.com
or
Sharon Merrill Associates, Inc.
Scott Solomon, 617-542-5300
Vice President
ssolomon@investorrelations.com