WESTBOROUGH, Mass.--(BUSINESS WIRE)--Kopin Corporation (NASDAQ: KOPN), a leading developer of innovative wearable computing technologies and solutions, today provided an update on its business initiatives and reported financial results for the first quarter of 2018, ended March 31, 2018.
“Our results were again driven by our military business, in particular the continued ramp of the F-35 fighter jet program, where Kopin is the sole supplier of displays for the pilot helmets. In addition to our current purchase agreement, we have been notified that we should soon receive follow-on orders for revenues through 2019,” said Dr. John C.C. Fan, CEO of Kopin. “After quarter-end we received initial production authorization for the procurement of long-lead materials for the FWS-I program, which support the production of 5,000 eyepieces, with shipments beginning in August. The FWS-C program continues in early development, and we are now beginning the early development process on the armored vehicle program we won last quarter. We are pleased this program was just expanded to include the development of additional eyepiece scopes, which increases the potential value over the life of the program from $40 million to $80 million. Finally, our new Brillian™ LCD microdisplay product line, which was created specifically to meet the extremely high brightness requirements of next generation aviation AR applications, has been well received by the military. We expect follow-on orders as development continues on new helmets utilizing the display.”
Dr. Fan continued, “Our enterprise customers have reported good demand for their augmented reality (AR) headsets, matching the optimism earlier this year at CES where a number of customers indicated they were starting to see the widespread adoption of AR by businesses across many industries, including healthcare, aviation and automotive. Kopin’s displays and optics are key components of these headsets and we are seeing a significant ramp in orders from these customers. In addition, we are delighted that we were just awarded a major design win with a global tier one company for a new AR smartglass for enterprise, which is on schedule to be released by the end of the year.
“We are very excited that our newest SOLOS™ smartglasses will be available for shipping beginning tomorrow. SOLOS has been called the world’s lightest and most advanced AR smartglass for sports and consumer fitness. It was designed using Kopin’s unique insight into how to balance style, form, comfort and function for maximum value to athletes. We are targeting cyclists, triathletes and runners with these smartglasses, which contain a heads-up see-through Pupil™ display module so athletes can get real-time updates, such as speed, power and pace, and measure their progress. SOLOS also includes our Whisper™ Voice Chip so that users can make phone calls or communicate with others in their group, benefitting from our unique noise-cancellation technology. SOLOS, which retails for $499, is available at www.solos-wearables.com through our ecommerce infrastructure. We anticipate rolling out SOLOS through other distribution formats during 2018.
“The year has gotten off to a very good start and we are encouraged by the opportunities ahead for 2018,” concluded Dr. Fan.
First Quarter Financial Results
Effective December 31, 2017, Kopin adopted ASC Topic 606 using the “modified retrospective” approach, meaning the standard was applied only to the financial results of the first quarter of 2018 with a cumulative adjustment to retained earnings. Under this transition method, Kopin applied the standard only to contracts that were not complete at the initial adoption date.
Total revenues for the first quarter ended March 31, 2018 were $5.7 million, compared with $4.4 million for the first quarter ended April 1, 2017.
Research and development (R&D) expenses for the first quarter of 2018 were $4.5 million compared to $4.3 million for the first quarter of 2017.
Selling, general and administrative (SG&A) expenses were $6.9 million for the first quarter of 2018 compared to $5.6 million for the first quarter of 2017.
Net loss attributable to the controlling interest for the first quarter of 2018 was $4.8 million, or $0.07 per share, compared with net loss of $7.9 million, or $0.12 per share, for the first quarter of 2017. Included in the first quarter of 2018 was $1.0 million from insurance proceeds and an approximate $3.6 million gain from the exchange of certain intellectual property for an equity investment.
During the first quarter of 2018 Kopin had 9 patents granted and filed for 6 new applications. Kopin has over 300 patents and patents pending, almost all of which are related to wearable applications.
Kopin has maintained a strong financial position. Net cash used in operating activities for the first quarter ended March 31, 2018 was approximately $6.1 million. Kopin’s cash and equivalents and marketable securities were approximately $61.0 million at March 31, 2018 as compared to $68.8 million at December 31, 2017, with no long-term debt.
“We believe full year revenues will be $35-$40 million,” said Richard Sneider, Kopin’s CFO. “Similar to last year, our revenues will trend substantially to the second half of the year, and our goal is to achieve break even on profitability by the end of 2019.”
