Kopin Reports Third Quarter Net Income of $8.5M
• Revenues Increase to $32 Million
• Net Income of $8.5 Million
• Military Displays, III-V Products Drive Top and Bottom Line
• Cash and Marketable Securities Balance Increases to $107.5 Million
TAUNTON, Mass. -- Kopin Corporation (NASDAQ: KOPN) today reported record revenues of $32.0 million and net income of $8.5 million for the third quarter ended September 26, 2009.
"Strong demand for our proprietary military displays and III-V products were key catalysts that drove our outstanding performance in the third quarter," said Dr. John C.C. Fan, Kopin's president and chief executive officer. "The double-digit percentage increases we reported in both military display and III-V revenues reflected our continued ability to deliver high-value, differentiated products that are integral to the performance of advanced mobile devices for today and tomorrow. Despite this challenging economic period, we are delighted that we reported our fifth consecutive profitable quarter."
Total revenues increased 4% to $32.0 million in the third quarter of 2009 compared with $30.7 million in the comparable period of 2008 and increased 13% from $28.2 million in the second quarter of 2009. Display revenues were $17.7 million in the third quarter of 2009, down about $1.2 million from the year-ago period and roughly flat compared with the second quarter of 2009. III-V revenues climbed 21% to $14.3 million from $11.8 million in the third quarter of 2008 and increased 37% from $10.4 million in the second quarter of 2009.
For the nine months ended September 26, 2009, total revenues were $81.7 million, compared with $85.7 million for the same period of 2008. Display revenues were $50.2 million in the nine-month period of 2009, compared with $49.6 million for the first nine months of 2008. Revenues from III-V products were $31.5 million for the first nine months of 2009, compared with $36.1 million for the nine-month period of 2008.
Business Highlights
Display Products
"Military display revenues increased 26% on a year-over-year basis in the third quarter, driven by our participation as display supplier for the U.S. Army's Thermal Weapons Sight programs. We are excited about our prospects and continue to offer more system solutions to our customers at their request. For example, to meet our customers' demanding requirements we are completing the installation of sophisticated equipment that simulates the difficult conditions our eyepieces and higher-level assemblies will experience in combat," Dr. Fan said. "We believe that our high-performance, single-crystal silicon LCD technology offers unrivaled performance advantages for military, consumer and industrial customers. Through patented breakthroughs such as our new full-color ultra-small-pixel displays and display modules, we are developing compelling, advanced new technology solutions that offer brilliant resolution, high performance and power efficiency in the world's smallest high-definition LCD screen. We continue to make excellent progress on our strategy of moving toward higher margin, higher performance products with greater system integration."
Golden-iTM
"We also are creating an entirely new platform in Golden-i, which represents the convergence of mobile video communications and hands-free, voice-activated computing," Dr. Fan said. "Field testing of Golden-i with potential customers is on schedule to begin early next year. The technology has been extremely well received at user and industry conferences, and feedback from our strategic business partners, including Microsoft, Motorola, Nuance Communications and Texas Instruments, has been favorable. Golden-i is being designed initially for industrial applications, to be followed by military, communication and entertainment applications."
III-V Products
"Smartphones and other 3G devices fueled robust demand for our III-V products, which posted a 21% increase in revenues in the third quarter from the same period in 2008," Dr. Fan said. "Many of these new products require complex circuitry and triple the number of power amplifiers as a standard wireless handset, a technology evolution that only strengthens our position as the world's leading III-V merchant supplier. For integrated circuit manufacturers, GaAs-based HBTs have emerged as the clear leader for signal linearity, temperature control and battery life. Our unique and versatile III-V technologies enable customers to solve complex technical challenges with solutions that reduce manufacturing costs, enhance circuit performance and accelerate time to market. We have invested strategically to increase our 6-inch wafer capacity and capability, and we expect to further build our 6-inch infrastructure in the coming year."
Operating Results
Gross margin for the third quarter of 2009 was 32.6% of net product revenues versus 33.8% for the same period in 2008 and 26% of net product revenues in the second quarter of 2009. Differences in gross margin largely reflected variations in sales mix between CyberDisplay and III-V products in the respective periods.
Net income for the third quarter of 2009 was $8.5 million, or $0.13 per diluted share, compared with net income of $1.5 million, or $0.02 per diluted share, for the third quarter of 2008. For the nine months ended September 26, 2009, Kopin reported net income of $14.1 million, or $0.21 per diluted share, compared with net income of $0.8 million, or $0.01 per diluted share, for the nine months ended September 27, 2008.
During the three months ended September 26, 2009 the Company purchased an additional 19.7 million shares of Kopin Taiwan Corporation (KTC) common stock for approximately $6.3 million. The Company now owns approximately 87% of the outstanding equity of KTC. The Company's financial results for the three and nine months ended September 26, 2009.
Business Outlook
"While the fourth quarter historically has been our seasonally weak quarter, based on discussions with our customers and the expected continued strong momentum of our military display program and III-V products we expect to achieve the top end of the full-year 2009 revenue guidance of $90 million to $110 million that we issued in April of this year," Dr. Fan said.
"With our good financial and operational results through the first nine months of the year, we are poised to complete a strong 2009 performance despite the challenges created by the economic recession," Dr. Fan said. "Although visibility into 2010 is still somewhat limited by the economic climate, we plan to continue to aggressively leverage our Wafer Engineering and AMLCD technologies to develop transformative applications for high-growth markets. Kopin is anchored by a strong balance sheet, which has enabled us to invest strategically in advanced research and production equipment and processes in the past few years. Exciting new products and technology platforms such as Golden-i are coming on line, and we are continuing our active patent filing of new technologies and products. We are well positioned for a bright future."
Third-Quarter Conference Call
In conjunction with its third-quarter 2009 financial results, Kopin will host a teleconference call for investors and analysts at 9:00 a.m. ET today. To hear the conference call, please dial (877) 407-5790 (U.S. and Canada) or (201) 689-8328 (International). The call also will be available as a live and archived audio webcast on the "Investors" section of the Kopin website, www.kopin.com.
About Kopin
Kopin Corporation produces lightweight, power-efficient, ultra-small liquid crystal displays and III-V products, including heterojunction bipolar transistors (HBTs), that are revolutionizing the way people around the world see, hear and communicate. Kopin has shipped more than 30 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 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 III-V technologies are protected by more than 200 global patents and patents pending. For more information, please visit Kopin's website at www.kopin.com.