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 third quarter ended September 28, 2019.
“We are pleased to see the initial benefits of the strategic steps we discussed last quarter to monetize our intellectual property and reduce our cost structure,” said Dr. John C.C. Fan, CEO of Kopin. “This quarter revenues increased approximately 20% while we reduced our expenses by approximately 20%.
“The revenue growth of our core product segments, Industrial and Military, was a highlight of the quarter. Revenue increased approximately 105% for our Industrial products and Military revenues increased approximately 31% on the strength of our F-35 fighter jet and FWS-I programs. We look for our military sales to continue ramping next year and beyond as additional orders are received for existing programs and current development programs move into production. In addition, the feedback we are receiving from our industrial customers indicates a growing market, which points to continued strength in enterprise revenues.”
Dr. Fan continued, “Complementing our revenue growth in Q3 was our expense reduction strategy. Research & Development (R&D) expense declined 48% as many of our development programs are transitioning to production and we are no longer investing in products that have been licensed or in programs that have been curtailed. We expect continued expense reduction as we completed the spinout out of our Solos product line and Whisper technology shortly after the end of the third quarter. Under the agreement, we retained a 20% equity interest in the new entity and receive a royalty on sales for four years. We believe having a team focused specifically on Solos and Whisper will accelerate the monetization of both technologies, which is the most efficient way for Kopin to leverage our investment.“
“During the third quarter we also continued aggressively developing our Lightning® OLED products. Our fabless model allows us to cost-effectively invest in this differentiated technology, which has applications across our customer base. We currently have two advanced Lightning displays in development for two global customers. In addition, we are in discussion for additional display development programs with commercial and military applications.”
Dr. Fan concluded, “We expect our financial position will continue to strengthen as we further our strategy matching cost rationalization efforts with accelerating revenue growth.”
Third Quarter Financial Results
Total revenues for the third quarter ended September 28, 2019 were $6.1 million, compared with $5.1 million for the third quarter ended September 29, 2018.
Cost of product revenues were $4.7 million for the third quarter ended September 28, 2019, compared with $3.7 million for the third quarter ended September 29, 2018.
Research and development (R&D) expenses for the third quarter ended September 28, 2019 were $2.4 million, compared to $4.6 million for the third quarter ended September 29, 2018.
Selling, general and administrative (SG&A) expenses were $5.1 million for the third quarter ended September 28, 2019, compared to $7.2 million for the third quarter ended September 29, 2018. The decrease in SG&A is primarily due to decreases in compensation expenses including stock-based compensation, amortization of intangible assets, use of information technology consultants and marketing expenses, including product promotion and accretion of the NVIS earnout.
Net loss attributable to the controlling interest for the third quarter ended September 28, 2019 was $6.6 million, or $0.08 per share, compared with net loss of $9.8 million, or $0.13 per share, for the third quarter ended September 29, 2018.
Kopin’s cash and equivalents and marketable securities were approximately $26.0 million at September 28, 2019 as compared to $37.2 million at December 29, 2018, with no long-term debt.
During the third quarter of 2019 Kopin had 4 patents granted. Subsequent to the spin-out of the Solos product line and Whisper technology, Kopin has over 250 patents and patents pending, almost all of which are related to wearable applications.
All amounts above are estimates and readers should refer to our Form 10-Q for the quarter ended September 28, 2019, for final disposition as well as important risk factors.
About Kopin
Kopin Corporation is a leading developer and provider of innovative wearable technologies and critical components for integration into wearable computing systems for military, industrial and consumer products. Kopin’s technology portfolio includes ultra-small displays, optics, speech enhancement technology, and low-power ASICs. For more information, please visit Kopin’s website at www.kopin.com.
