Exhibit 99.1
Kopin Reports Record Third-Quarter 2005
Financial Results; Company Posts EPS of $0.08 on Revenue of $25.4
Million
TAUNTON, Mass.--(BUSINESS WIRE)--Nov. 1, 2005--Kopin Corporation
(NASDAQ: KOPN) today announced financial results for the third quarter
ended September 24, 2005.
Third Quarter Highlights:
-- Total revenue of $25.4 million, exceeding guidance provided in
the Company's second-quarter 2005 news release and conference
call. By comparison, Kopin reported total revenue of $22.9
million in the third quarter of 2004 and $21.0 million in the
second quarter of 2005.
-- Net income of $5.4 million, or $0.08 per diluted share,
compared with a net loss of $1.1 million, or $0.02 per share,
a year earlier. In the second quarter of 2005, Kopin recorded
net income of $1.9 million, or $0.03 per share.
-- CyberDisplay revenue of $14.6 million compared with $13.2
million in the year-ago period and $12.0 million in the second
quarter of 2005.
-- III-V revenue of $10.8 million versus $9.7 million in the
third quarter of 2004 and $9.0 million in the second quarter
of 2005.
"Kopin Corporation enjoyed an outstanding third quarter,
delivering record performance on the top and bottom line," said
Chairman and Chief Executive Officer Dr. John C.C. Fan. "I am
extremely pleased with the contribution from our III-V and
CyberDisplay groups, which each grew more than 20 percent
sequentially. Increased order volumes from our HBT circuit partners
drove III-V, while CyberDisplay sales increased in the consumer
segment, as our digital media customers prepare for the holiday
selling season.
"We continue to execute our long-term growth and profitability
strategy that we outlined at this time last year," Dr. Fan said. "Key
elements of our strategy include making our light-emitting diode
product line cost competitive against global competition; maintaining
our HBT leadership position by developing new products, such as our
GAIN HBT, which we believe will be critical for the next generation of
cellular handsets and wireless local area networks; and improving our
CyberDisplay business by transitioning away from low-margin product
segments and focusing on higher value-added, higher margin
microdisplay products.
"During 2005, we have made substantial progress to meet these
objectives," Dr. Fan continued. "We integrated our LED operations into
the KoBrite joint venture, which I am happy to announce will celebrate
the grand opening of its Dongguan, China factory next week.
Additionally, we continue to win new business in CyberDisplay as we
remain focused on growth areas such as military night vision
equipment, thermal imaging systems, digital still cameras and mobile
video. As we invest aggressively in new products, we have maintained
our strong debt-free financial position, executed our stock buyback
program and continued our cost-control initiatives."
Recent Accomplishments:
-- Eastman Kodak Company incorporated the CyberEVF(R) 230K
electronic viewfinder into its new KODAK EASYSHARE P-Series
high performance digital cameras. Kopin's CyberEVF 230K
integrates a full-color QVGA resolution microdisplay,
ultra-thin backlight, optics, and easy-to-use focusing
mechanism into a tiny housing unit. The viewfinder generates
large, vivid color images with minimal distortion or color
aberration. Smaller than competing EVF modules, the CyberEVF
230K enables digital camera OEMs to shrink their cameras to a
pocket-size form factor.
-- Kopin launched the first generation of its Digital iVision(TM)
products for mobile video applications. Introduced at
ElectronicAsia in Hong Kong, the world's second largest
consumer electronics show, Digital iVision technology provides
big pictures for people on the go. Products unveiled at the
show include the Binocular Display Module 230K, the world's
first plug-and-play video subsystem; the VGA-resolution
Binocular Display Module-922K video subsystem, which weighs
just an ounce but delivers large VGA-resolution (600 x 480)
images equivalent to a 48-inch TV; the CyberDisplay WVGA, the
first microdisplay with the aspect ratio of high-definition
TV; and CyberDisplay SXGA, whose 1280 x 1024 spatial
resolution surpasses that of HDTV.
-- Kopin formed a strategic partnership with Hong Kong-based
Solomon Systech Limited (SSL), a global semiconductor company
specializing in display driver integrated circuits (IC). SSL
will market Kopin's plug-and-play Binocular Display Module
products in China. The module is a complete video eyewear
subsystem that integrates Kopin's microdisplays, SSL's
microdisplay controller IC, and other electronics and optics
into a lightweight unit.
-- Kopin and SSL captured top honors for the Binocular Display
Module at ElectronicAsia, winning the Grand Award and the Gold
Award for "Outstanding Innovation and Technology Products."
-- Taiwan-based Excellent Media Group (EMG) Co. incorporated
Kopin's Binocular Display Module-230K binocular video
subsystem into EMG's i-Theatre(TM) system. Weighing just 2.4
ounces, i-Theatre is billed as the world's lightest mobile
video eyewear. It combines Kopin's binocular display module
with surround-sound stereo, video adapters and battery pack to
create an image equivalent to a 35-inch image as viewed from
seven feet.
Nine-Month Results
For the nine months ended September 24, 2005, total revenue was
$65.4 million compared with $68.8 million for the same period last
year. Revenue from III-V products was $29.2 million for the first nine
months of 2005, down slightly from $29.6 million for the first nine
months of 2004. CyberDisplay revenues were $36.2 million versus $39.2
million in the same period in 2004. Net income for the most recent
nine-month period was $8.4 million, or $0.12 per diluted share,
compared with a net loss of $6.8 million, or $0.10 per share, for the
first nine months of 2004.
Cash and marketable securities totaled $111.1 million as of
September 24, 2005, compared with $112.9 million at June 25, 2005.
During the third quarter of 2005, the Company repurchased
approximately 276,000 shares of its common stock, bringing its total
repurchase to $7 million of the $15 million authorized at the
inception of the stock buyback program.
Business Outlook
"Our 2005 financial results speak to the operating efficiencies we
have achieved by transitioning our LED business to Asia, increasing
sales of our CyberDisplay products to military applications and
improving the productivity of our HBT operations," Dr. Fan said. "For
the fourth quarter of 2005, we expect revenue to be in the range of
$23 million to $25 million, reflecting customary end-of-year
seasonality in our business. We plan to continue investing
aggressively in our CyberDisplay product development for new
applications where either the display is the critical component, such
as video eyewear and weapon sights, or where we can provide products
with increasing levels of integration, such as our electronic
viewfinder solutions.
"To this end, we are making good progress with our thermal weapon
and night vision system partners and the programs are on target for
volume production in 2006. In the mobile video segment, responding to
the declining camcorder market, our product transition is underway
with the introduction of our Digital iVision brand for mobile video
eyewear and our alliance with Solomon Systech, which gives us further
marketing entree into China for our new display modules."
Third-Quarter Conference Call
Kopin will provide a live audio webcast of its third-quarter
conference call for investors at 5:00 p.m. ET today, November 1, 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 third-quarter conference call also can be heard live by
dialing (719) 457-2727 or (800) 474-8920 five minutes prior to the
call. A replay of the call will be available from 8:00 p.m. ET,
Tuesday, November 1 through midnight ET, Monday, November 7. To access
the replay, dial (719) 457-0820 or (888) 203-1112 and refer to
confirmation code 1400280.
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 the Company's plan to make its light-emitting
diode product line cost competitive against global competition;
Kopin's intention to maintain its HBT leadership position by
introducing new products; its plan to invest aggressively in the
CyberDisplay business and transition away from low-margin product
segments into higher margin products; the expectation that the KoBrite
joint venture, will celebrate the grand opening of its Dongguan, China
factory next week; Kopin's expectation that revenues for the fourth
quarter of 2005 will range between $23 million to $25 million;
expectations regarding future market opportunities for its
CyberDisplay and HBT products; Kopin's belief that it is making good
progress with its partners in thermal weapon and night vision systems
and that the programs are on target for volume production in 2006; and
its expectation that its new display modules will enter the China
market. 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 products; competitive products and pricing; 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; 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 and its Quarterly Report on Form 10-Q for
each of the quarterly period ended March 26, 2005 and June 25, 2005.
CyberDisplay, 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 Nine Months Ended
------------------------- -------------------------
September September September September
24, 25, 24, 25,
2005 2004 2005 2004
----------- ----------- ----------- -----------
Revenues:
Product
revenues $24,006,807 $22,911,095 $61,754,067 $67,841,529
Research and
development
revenues 1,409,084 - 3,603,334 986,553
----------- ----------- ----------- -----------
25,415,891 22,911,095 65,357,401 68,828,082
Expenses:
Cost of product
revenues 15,610,942 17,833,237 39,706,320 56,758,136
Research and
development 2,488,272 3,542,350 8,593,241 10,965,079
Selling,
general and
administrative 2,698,600 2,577,404 9,870,171 8,136,058
Other - 240,000 - 240,000
Asset
impairment - - 517,902 -
----------- ----------- ----------- -----------
20,797,814 24,192,991 58,687,634 76,099,273
----------- ----------- ----------- -----------
Income (loss) from
operations 4,618,077 (1,281,896) 6,669,767 (7,271,191)
Other income and
(expense):
Interest and
other income 1,079,320 646,211 2,693,010 2,219,304
Interest and
other expense (70,053) (80,202) (275,194) (278,298)
----------- ----------- ----------- -----------
1,009,267 566,009 2,417,816 1,941,006
----------- ----------- ----------- -----------
Income (loss)
before minority
interest, income
taxes and equity
losses in
unconsolidated
affiliates 5,627,344 (715,887) 9,087,583 (5,330,185)
Minority interest
in income of
subsidiary (267,687) (124,109) (425,693) (431,152)
----------- ----------- ----------- -----------
Income (loss)
before income
taxes and equity
losses in
unconsolidated
affiliates 5,359,657 (839,996) 8,661,890 (5,761,337)
Provision for
income taxes 44,262 (102,136) (63,966) (298,702)
----------- ----------- ----------- -----------
Income (loss)
before equity
losses in
unconsolidated
affiliates 5,403,919 (942,132) 8,597,924 (6,060,039)
Equity losses in
unconsolidated
affiliates (18,515) (178,411) (168,023) (778,411)
----------- ----------- ----------- -----------
Net income (loss) $ 5,385,404 $(1,120,543) $ 8,429,901 $(6,838,450)
=========== =========== =========== ===========
Net income (loss) per share:
Basic $ 0.08 $ (0.02) $ 0.12 $ (0.10)
=========== =========== =========== ===========
Diluted $ 0.08 $ (0.02) $ 0.12 $ (0.10)
=========== =========== =========== ===========
Weighted average number of common shares outstanding:
Basic 68,917,786 70,048,767 69,492,341 70,079,558
=========== =========== =========== ===========
Diluted 70,460,669 70,048,767 70,131,881 70,079,558
=========== =========== =========== ===========
Kopin Corporation
Condensed Consolidated Balance Sheets
(Unaudited)
September 24, December 25,
2005 2004
------------ ------------
ASSETS
Current assets:
Cash and marketable securities $111,119,844 $111,900,466
Accounts receivable, net 14,809,838 9,088,525
Inventory 8,413,457 7,934,955
Prepaid and other assets 3,635,392 7,357,807
------------ ------------
Total current assets 137,978,531 136,281,753
Equipment and improvements, net 10,305,812 11,615,633
Other assets 11,009,757 7,934,527
------------ ------------
Total assets $159,294,100 $155,831,913
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable $ 9,303,015 $ 9,075,976
Accrued expenses 2,822,039 2,549,057
Billings in excess of revenue earned 991,245 1,240,347
------------ ------------
Total current liabilities 13,116,299 12,865,380
Minority interest 4,181,417 3,780,693
Stockholders' equity 141,996,384 139,185,840
------------ ------------
Total liabilities and stockholders' equity $159,294,100 $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