Exhibit 99.1
Kopin Reports Second Quarter 2006 Financial Results;
Demand for Company's Transistor Products Drives III-V
Business Up 34% Year-over-Year
TAUNTON, Mass.--(BUSINESS WIRE)--Aug. 8, 2006--Kopin Corporation
(NASDAQ: KOPN) today announced financial results for the second
quarter ended July 1, 2006.
-- Revenue was $18.9 million, in line with the Company's guidance
of $18.5 million to $20.5 million. Kopin reported revenue of
$21.0 million in the second quarter of 2005 and $18.7 million
in the first quarter of 2006.
-- Net income was $1.9 million, or $0.03 per diluted share,
compared with net income of $1.9 million, or $0.03 per diluted
share, for the second quarter of 2005 and net income of
$78,000, or $0.00 per diluted share, for the first quarter of
2006. During the second quarter of 2006, the Company sold
200,000 of its shares in Micrel Semiconductor, Inc. and
recorded a gain of approximately $1.2 million. Financial
results for the second quarter of 2006 include a charge of
$381,000, 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 $12.1 million, compared with $9.0 million in
the second quarter of 2005 and $12.8 million in the first
quarter of 2006. Included in the first quarter of 2006 was
$850,000 of revenue related to research and development and
training services performed and completed by the Company for
its KoBrite joint venture.
-- CyberDisplay(TM) revenue was $6.8 million versus $12.0 million
in the year-ago period and $5.9 million in the first quarter
of 2006.
-- Cash and marketable securities as of July 1, 2006 totaled
$111.8 million, and the Company continues to have no long-term
debt.
-- During the second quarter of 2006, Kopin repurchased 480,000
shares under its stock buyback program.
"As demonstrated by the 34% year-over-year growth in III-V
revenue, our HBT products enjoyed a strong second quarter," said
President and Chief Executive Officer Dr. John C.C. Fan. "This
performance is attributable to an increase in wireless handset sales
and, more importantly, a higher percentage of HBT content per handset
to accommodate the increased functionality of new models. In our
CyberDisplay business, during the quarter we continued our transition
to new displays and systems for higher-margin applications. Interest
in video eyewear continues to build, and our military displays
continue to be on schedule for volume shipments during the second half
of the year."
III-V Business
"With a global handset market projected to produce over 950
million units(1) in 2006, Kopin has begun a major capacity expansion
to accommodate increased demand for our HBT transistors," Dr. Fan
said. "Our capacity expansion is taking a two-pronged approach: the
installation of additional III-V equipment in our domestic facilities
and the qualification of our Taiwanese HBT OEM partner, KTC. We
anticipate getting initial production from both locations by year end
as we work toward our goal of a 50% capacity increase in the next 12
months."
Display Business
"We are executing on our long-term strategy to expand the
CyberDisplay's application base in consumer, industrial and military
electronics. Kopin's displays are an integral component of
next-generation thermal weapon sights developed by our partners as
part of a multi-year U.S. military contract," Dr. Fan continued. "On
the consumer side, we continue to work to penetrate the digital camera
market. We also continue to invest in technology to transition into
higher resolution color displays that we believe are needed for our
targeted video eyewear market. In the second half of 2006, we also
expect to see increased activity for our displays from makers of
digital still cameras."
Six-Month Results
For the six months ended July 1, 2006, total revenue was $37.6
million, compared with $39.9 million for the same period last year.
Revenue from III-V products was $24.9 million for the first six months
of 2006, up from $18.4 million for the first six months of 2005.
CyberDisplay revenues were $12.7 million versus $21.5 million in the
first half of 2005. Net income for the most recent six-month period
was $1.9 million, or $0.03 per diluted share, compared with net income
of $3.0 million, or $0.04 per diluted share, for the first six months
of 2005.
Included in the $1.9 million year-to-date earnings is a $1.2
million gain on the sale on 200,000 shares of the Company's investment
in Micrel Semiconductor. This gain was partially offset by stock-based
compensation expense of $816,000, or $0.01 per diluted share,
reflecting the adoption of SFAS 123R.
Business Outlook
"Based on the current business environment and the outlook for our
two businesses, we expect third-quarter revenue to be in the range of
$19.0 million to $20.5 million," Dr. Fan said. "We anticipate
continued strength in our III-V business, driven by demand for
advanced wireless handsets equipped with our transistors, including
our newest transistor solution, the GAIN-HBT. On the display side, we
expect continued progress in our military displays products as well as
increasing activity in the consumer segment of the market."
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 8, 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.
Kopin's second-quarter conference call also can be heard live by
dialing (800) 817-4887 or (913) 981-4913 five minutes prior to the
call. A replay of the call will be available from 8:00 p.m. ET, August
8 through midnight Monday, August 14th. To access the replay, dial
(888) 203-1112 or (719) 457-0820 and refer to confirmation code
5874840.
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.
(1) SonyEricsson estimates
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 expectation that military displays are on
schedule for volume shipments during the second half of 2006; the
forecast for the global handset market; the Company's goal of
increasing HBT capacity by 50% in the next 12 months; expectations for
Kopin's displays in the consumer and military end markets; the
expectation that revenue will be in the range of $19.0 million to
$20.5 million in the third-quarter of 2006; the expectation for
continued progress in developing military displays and for additional
activity in the consumer display segment; and the outlook for
continued strength in the Company's III-V business, driven by demand
for GAIN-HBT transistors. 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)
Kopin Corporation
Condensed Consolidated Statements of Operations
(Unaudited)
Three Months Ended Six Months Ended
--------------------------------------------------
July 1, June 25, July 1, June 25,
2006 2005 2006 2005
----------- ----------- ----------- -----------
Revenues:
Product
revenues $18,117,679 $20,481,962 $35,063,614 $37,747,260
Research and
development
revenues 808,759 555,616 2,552,686 2,194,250
----------- ----------- ----------- -----------
18,926,438 21,037,578 37,616,300 39,941,510
Expenses:
Cost of product
revenues 12,792,330 13,191,709 25,708,639 24,095,379
Research and
development 2,541,393 2,705,638 5,438,852 6,104,969
Selling,
general and
administrative 3,940,144 3,907,982 7,507,578 7,171,572
Asset
impairment - - - 517,902
----------- ----------- ----------- -----------
19,273,867 19,805,329 38,655,069 37,889,822
----------- ----------- ----------- -----------
(Loss) income from
operations (347,429) 1,232,249 (1,038,769) 2,051,688
Other income and
(expense):
Interest and
other income 2,429,725 834,077 3,608,754 1,606,013
Interest and
other expense (167,137) (2,973) (515,833) (197,463)
----------- ----------- ----------- -----------
2,262,588 831,104 3,092,921 1,408,550
----------- ----------- ----------- -----------
Income before
minority interest,
income taxes and 1,915,159 2,063,353 2,054,152 3,460,238
equity losses in
unconsolidated
affiliates
Minority interest in
(loss) income of
subsidiary 80,852 (114,058) 249,662 (158,006)
----------- ----------- ----------- -----------
Income before income
taxes and equity
losses in 1,996,011 1,949,295 2,303,814 3,302,232
unconsolidated
affiliates
(Provision) benefit
for income taxes (14,068) (75,988) 27,932 (108,227)
----------- ----------- ----------- -----------
Income before equity
losses in
unconsolidated
affiliates 1,981,943 1,873,307 2,331,746 3,194,005
Equity losses in
unconsolidated
affiliates (106,380) - (378,103) (149,508)
----------- ----------- ----------- -----------
Net income $ 1,875,563 $ 1,873,307 $ 1,953,643 $ 3,044,497
=========== =========== =========== ===========
Net income per
share:
Basic $ 0.03 $ 0.03 $ 0.03 $ 0.04
=========== =========== =========== ===========
Diluted $ 0.03 $ 0.03 $ 0.03 $ 0.04
=========== =========== =========== ===========
Weighted average number of
common shares outstanding:
Basic 68,268,009 69,520,488 68,525,537 69,779,619
=========== =========== =========== ===========
Diluted 68,565,497 69,722,261 68,865,300 69,983,427
=========== =========== =========== ===========
Kopin Corporation
Condensed Consolidated Balance Sheets
(Unaudited)
July 1, December 31,
2006 2005
------------- -------------
ASSETS
Current assets:
Cash and marketable securities $ 111,766,698 $ 119,756,865
Accounts receivable, net 15,186,955 13,014,815
Inventory 8,010,543 9,256,739
Prepaid and other current assets 1,706,683 1,900,479
------------- -------------
Total current assets 136,670,879 143,928,898
Equipment and improvements, net 14,774,009 11,250,453
Other assets 10,760,578 11,152,666
------------- -------------
Total assets $ 162,205,466 $ 166,332,017
============= =============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 7,200,002 $ 8,334,282
Accrued expenses 4,305,004 5,378,640
Billings in excess of revenue earned 1,063,092 1,080,810
------------- -------------
Total current liabilities 12,568,098 14,793,732
Lease commitments 756,099 740,000
Minority interest 4,346,700 4,337,925
Stockholders' equity 144,534,569 146,460,360
------------- -------------
Total liabilities and stockholders'
equity $ 162,205,466 $ 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