Exhibit 99.1
Kopin Reports First Quarter 2006 Financial Results;
Quarter Highlighted by Strong Demand for Company's High-Performance
Transistors for Advanced Cell Phones
TAUNTON, Mass.--(BUSINESS WIRE)--May 9, 2006--Kopin Corporation
(NASDAQ:KOPN) today announced financial results for the first quarter
ended April 1, 2006.
-- Revenue was $18.7 million, at the high end of the Company's
guidance of $17 million to $19 million. Kopin reported revenue
of $18.9 million in the first quarter of 2005 and $24.9
million in the fourth quarter of 2005.
-- The Company's net income was $78,000, or $0.00 per diluted
share, compared with net income of $1.2 million, or $0.02 per
diluted share, for the first quarter of 2005 and net income of
$3.7 million, or $0.05 per diluted share, for the fourth
quarter of 2005. Financial results for the first quarter of
2006 include a charge of $435,000, or $0.01 per diluted share,
in stock-based compensation expense, reflecting the Company's
adoption, effective January 1, 2006, of Statement of Financial
Accounting Standards ("SFAS") No. 123R Share-Based Payments.
-- III-V revenue was $12.8 million, compared with $9.4 million in
the first quarter of 2005 and $13.5 million in the fourth
quarter of 2005. III-V revenue for the first quarter of 2006
included $850,000 as final payment under the Company's joint
venture agreement with KoBrite.
-- CyberDisplay(TM) revenue was $5.9 million versus $9.5 million
in the year-ago period and $11.4 million in the fourth quarter
of 2005.
-- Cash and marketable securities as of April 1, 2006 totaled
$117 million and the Company continues to have no long-term
debt.
-- During the first quarter of 2006, Kopin repurchased 480,000
shares under its stock buyback program.
"Growing demand for our heterojunction bipolar transistor drove a
37% year-over-year increase in III-V revenue," said Dr. John C.C. Fan,
Kopin's chairman and chief executive officer. "In our display
business, as expected, we began a transition from the low-end
camcorder viewfinder market to product categories with higher margins
and strong growth potential, including military systems and video
eyewear products."
III-V Business
"The wireless handset market is growing at about 15%, driven by
demand for advanced cell phones in established markets and the rapid
adoption of cell phones in developing countries," Dr. Fan said.
"Multiple power amplifiers are needed to handle the advanced features
and functions of these phones, further increasing the demand for our
HBT wafers.
"Based on strong orders from our integrated circuit partners, we
have begun implementing our strategy to increase HBT capacity by more
than 50% over the next 24 months. We are accomplishing this increase
by installing new equipment at Kopin, qualifying KTC - our licensed
HBT original equipment manufacturer in Taiwan - and further improving
operational efficiency," Dr. Fan said. "With an estimated 80% of the
worldwide merchant HBT market, Kopin has the dominant capacity,
performance and brand in the industry. Our HBT product line has
entered a growth phase that we believe will only extend our position
as the market leader."
Display Business
"In our display business, during the 2006 first quarter we
commenced volume shipments of our displays for the new generation of
thermal weapons sights being developed with our partners under a
multi-year contract for the U.S. Army," Dr. Fan said. "We also
continued to make strides in our multi-year program for the Army's
Enhanced Night Vision Goggle system, working closely with our partner
to move those systems toward production.
"On the consumer side of our display business, we see strong
interest and activity in video eyewear," Dr. Fan said. "We are
fielding inquires from a diverse range of companies, including content
and service providers, that are aggressively exploring the potential
of mobile video for their business.
"In addition, just this week, we announced that The Sharper Image,
a large U.S. retail company, will begin to market Icuiti's DV920 Video
Eyewear powered by Kopin's microdisplays," Dr. Fan said. "We expect a
number of similar eyewear-related announcements as the 2006 holiday
season approaches and the mobile video market continues to accelerate.
"The Mobile Video market is beginning to take shape as companies
throughout the world launch an expanding portfolio of content and
devices," Dr. Fan said. "By our estimate, about 50,000 eyewear units
were sold industry-wide in 2005, with Kopin commanding approximately
80% of the market. This year, we believe sales could increase to as
many as 200,000 to 300,000 units, and again we expect Kopin displays
to be integrated into a large percentage of these products. Kopin's
display technology is enabling the development of eyewear products
that are smaller, lighter, sleeker and less expensive for consumers."
Business Outlook
Commenting on Kopin's business outlook, Dr. Fan said, "For the
second quarter of 2006, we expect total revenue to be in the range of
$18.5 million to $20.5 million, with continuing strength from our HBT
products, while in our display business we expect to see continued
progress in the military and consumer electronics markets."
First-Quarter Conference Call
Kopin will provide a live audio webcast of its first-quarter
conference call for investors at 5:00 p.m. ET today, May 9, 2006.
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 prior to the event's broadcast. An archived version of the
call will be available on Kopin's website.
To participate in the call, please dial (888) 349-5690 or (706)
643-3945 five minutes prior to the call. Please refer to conference ID
7999937. For those unable to join the live conference call, a replay
will be available two hours after the conclusion of the call for one
week at (800) 642-1687 or (706) 645-9291 (conference ID 7999937).
About Kopin
Kopin Corporation produces lightweight, power-efficient,
ultra-small liquid crystal displays and heterojunction bipolar
transistors (HBTs) that are revolutionizing the way people around the
world see, hear and communicate. Kopin already has shipped more than
20 million displays for a range of consumer and military applications
including digital cameras, personal video eyewear, camcorders, thermal
weapon sights and night vision systems. The Company's unique HBTs,
which help to enhance battery life, talk time and signal clarity, have
been integrated into billions of wireless handsets as well as into
WiFi, VoIP and high-speed Internet data transmission systems. Kopin's
proprietary display and HBT technologies are 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: future demand for the Company's HBT wafers;
Kopin's plan to increase HBT capacity by more than 50% over the next
24 months through the installation of new equipment, the qualification
of KTC and further improvement to operational efficiency; the
Company's belief that its HBT product line has entered a growth phase
that will extend its position as the market leader; future prospects
related to the production of thermal weapons sights and Enhanced Night
Vision Goggle systems; future prospects related to video eyewear; the
expectation of further eyewear-related announcements in 2006; growth
of the mobile video market; estimates related to the Company's share
of the video eyewear market and the expectation that 200,000 to
300,000 units could be sold in 2006; Kopin's belief that its
technology will be incorporated into a large percentage of video
eyewear products; the Company's forecast for total revenue of between
$18.5 million and $20.5 million in the second quarter of 2006; the
expectation for continued strength from HBT products and, in the
Company's display business, for continued progress from the military
and consumer electronics markets. 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 potential that military programs involving
Kopin's products will be delayed or cancelled; the potential that the
Company's military and commercial customers might be unable to ramp
production volumes of their 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 31, 2005.
CyberDisplay 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
------------------------
April 1, March 26,
2006 2005
------------------------
Revenues:
Product revenues $16,945,935 $17,265,298
Research and development revenues 1,743,927 1,638,634
------------------------
18,689,862 18,903,932
Expenses:
Cost of product revenues 12,916,305 10,903,669
Research and development 2,897,460 3,399,331
Selling, general and administrative 3,567,437 3,263,590
Asset impairment - 517,902
------------------------
19,381,202 18,084,492
------------------------
(Loss) income from operations (691,340) 819,440
Other income and (expense):
Interest and other income 1,179,029 779,613
Interest and other expense (348,696) (202,168)
------------------------
830,333 577,445
------------------------
Income before minority interest, income taxes
and equity losses in unconsolidated affiliates 138,993 1,396,885
Minority interest in (loss) income of
subsidiary 168,810 (43,947)
------------------------
Income before income taxes and equity losses
in unconsolidated affiliates 307,803 1,352,938
Benefit (provision) for income taxes 42,000 (32,240)
------------------------
Income before equity losses in unconsolidated
affiliates 349,803 1,320,698
Equity losses in unconsolidated affiliates (271,723) (149,508)
------------------------
Net income $78,080 $1,171,190
========================
Net income per share:
Basic $0.00 $0.02
========================
Diluted $0.00 $0.02
========================
Weighted average number of common shares
outstanding:
Basic 68,783,066 70,038,749
========================
Diluted 69,425,636 70,244,593
========================
Kopin Corporation
Condensed Consolidated Balance Sheets
(Unaudited)
April 1, December 31,
2006 2005
--------------------------
ASSETS
Current assets:
Cash and marketable securities $117,521,621 $119,756,865
Accounts receivable, net 13,305,841 13,014,815
Inventory 8,373,985 9,256,739
Prepaid and other current assets 2,121,615 1,900,479
--------------------------
Total current assets 141,323,062 143,928,898
Equipment and improvements, net 13,071,949 11,250,453
Other assets 12,284,189 11,152,666
--------------------------
Total assets $166,679,200 $166,332,017
==========================
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $9,332,154 $8,334,282
Accrued expenses 4,966,265 5,378,640
Billings in excess of revenue earned 1,031,517 1,080,810
--------------------------
Total current liabilities 15,329,936 14,793,732
Lease commitments 748,050 740,000
Minority interest 4,349,518 4,337,925
Stockholders' equity 146,251,696 146,460,360
--------------------------
Total liabilities and stockholders' equity $166,679,200 $166,332,017
==========================
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