WESTBOROUGH, Mass.--(BUSINESS WIRE)--Kopin Corporation (Nasdaq: KOPN), a leading provider of innovative wearable computing technologies and solutions, today provided an update on its business initiatives and reported financial results for the first quarter ended March 28, 2020.
“We are pleased with the strong start to the year, reflecting ongoing demand from defense customers, continued success in streamlining our cost structure and most importantly, the dedication of our employees,” said Dr. John C.C. Fan, CEO of Kopin. “Revenues increased by approximately 42% in the first quarter of 2020, driven by both defense production and funded development programs. We continued to ship under the FWS-I and F-35 Joint Strike Fighter programs and we recently announced another follow-on order for the F-35 program, which includes shipments into 2021. We also saw continued progress on our defense development programs, where we have more than 10 programs in various stages of development. While some of these may not contribute significantly to product revenue for the next year or two, and perhaps not all will reach production after moving through development, this is by far the strongest defense program portfolio in Kopin's history. We also are partnering with various defense contractors on other opportunities and we expect to make a number of announcements in the coming months.”
Dr. Fan continued, “As a result of the strategic realignment program kicked off last year, we decreased R&D and SG&A costs by 49% in the first quarter of 2020. A significant driver in our success were steps to rationalize our R&D activities. Our current internal R&D investments are primarily focused on our Organic Light Emitting Diode (OLED) displays. At the Consumer Electronics Show in January 2020 we demonstrated the world’s first monochrome double-stack OLED which emits more than 20,000 nits. We also demonstrated our early samples of full color 2.6K OLED 1.3" diagonal displays using double stacks. In addition, in the first quarter of 2020 we received our first production order for our OLED backplane wafers, which we expect to ship in the second quarter of 2020.
“I want to highlight that our success this quarter would not have been possible without the dedication of our employees. Kopin has remained open and operating during the COVID-19 lockdown because of our defense-related business. Some of our employees do work remotely, but that was not an option for our production employees. The attendance of this group has been very good, and they have kept a very positive frame of mind in these difficult times. While our AMLCD products are made in a Class 10 cleanroom where the employees are always gowned and wear masks and gloves, we took additional precautions for the safety of our employees.
“An interesting result of the COVID-19 situation has been our Augmented Reality (AR) headset customers reporting that their products are being used in hospitals and areas of high infection by medical and public safety responders. These applications are demonstrating the power of the technology in allowing collaborative responses while minimizing the number of people on site.”
Dr. Fan concluded, “While we are experiencing unusual times to say the least, we believe our strong defense business, OLED micro displays development activities and continued emphasis on efficiently managing our cost structure is carrying our momentum into the second quarter.”
First Quarter Financial Results
Total revenues for the first quarter ended March 28, 2020 were $7.9 million, compared with $5.5 million for the first quarter ended March 30, 2019, a 42% increase year over year.
Research and development (R&D) expenses for the first quarter of 2020 were $2.3 million compared to $5.0 million for the first quarter of 2019, a 53% decrease year over year.
Selling, general and administrative (SG&A) expenses were $3.4 million for the first quarter of 2020, compared to $6.3 million for the first quarter of 2019, a 45% decrease year over year.
The net loss attributable to controlling interest for the first quarter of 2020 was $3.6 million, or $0.04 per share, compared with net loss of $11.3 million, or $0.15 per share, for the first quarter of 2019.
Net cash used in operating activities for the first quarter ended March 28, 2020 was approximately $3.9 million. Included in the $3.9 million was approximately $0.5 million of contingent earnout paid to the former owners of NVIS, Inc, which Kopin acquired in 2017. Kopin's cash and equivalents and marketable securities were approximately $17.6 million at March 28, 2020 as compared to $21.8 million at December 28, 2019. At March 28, 2020 Kopin had no long-term debt.
All amounts above are estimates and readers should refer to our Form 10-Q for the quarter ended March 28, 2020, 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 defense, 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.
