– Q4 Revenues Grow 60% year-over- year
– Full Year Revenue Grows 36%
– Net Income $1.3M in Q4 Compared to Net Loss of $7.2M for Q4 2019
– Funded R&D Revenues in Q4 increases 56%, primarily on MicroLEDs for AR
– Shipped First Production order of 720p color MicroOLEDsMarch 02, 2021 07:30 AM Eastern Standard Time
WESTBOROUGH, Mass.–(BUSINESS WIRE)–Kopin® Corporation (Nasdaq: KOPN), a leading developer and manufacturer of high-resolution micro-displays and sub-systems for defense, enterprise and consumer augmented reality (AR), virtual reality (VR)and mixed reality (MR) systems, today provided an update on its business initiatives and financial results for the fourth quarter and full fiscal year ended December 26, 2020.
“We are delighted to have finished 2020 with very strong results in both our top and bottom lines, with revenue growth of 36% year-over-year and increased efficiency in our operations. Our fourth quarter 2020 revenue growth was particularly strong, growing 60% from a year ago, our strongest quarterly year-over-year growth since the fourth quarter of 2017. We also made great progress in streamlining our cost structure along with increasing our product yields and production efficiencies, resulting in a net income of $1.3 million for the fourth quarter of 2020. We are very proud of this achievement, and though we acknowledge it was due to the convergence of many favorable factors, it is undeniable that we are on the right track with momentum continuing into the current year,” said Dr. John C. C. Fan, CEO of Kopin.
“Our business was strong across multiple segments and was again led by our defense product revenues which increased 112% in the fourth quarter of 2020 compared with the fourth quarter of 2019. This significant increase was driven by our two production programs — the display sub-assembly system for the FWS-I thermal weapon sight program and displays for the F-35 Fighter jet program. As announced in September 2020, we were awarded a $22.9 million follow-on contract for the FWS-I program, with shipments scheduled through the third quarter of 2021. We expect these two production programs will continue to generate strong revenue in the coming years. We are also on track to transition three more products, out of a dozen programs currently in development, to initial low-rate production, with revenues expected to begin ramping in the second half of this year. We believe these programs will provide accelerated growth momentum for 2022 and beyond. Our active pipeline of development programs includes using our advanced display products in armored vehicle targeting systems, rotary-wing aircraft helmets, automatic and semi-automatic rifle day scopes and targeting systems, among others. These programs are all using our microdisplays and also increasingly utilizing our sophisticated optics systems and dust-free assemblies. We believe we are the sole source supplier to most of these programs.
“In the fourth quarter we saw solid growth in our industrial wearables led by sales to RealWear Inc. www.realwear.com, a market leader in enterprise AR and computing headsets, along with sales to 3D metrology applications. We expect both industrial wearables and 3D metrology revenues will continue solid growth in 2021. However, revenues from the sale of our products for public safety applications were down in the fourth quarter of 2020 which we believe is attributable to the negative impact of Covid-19 on municipal budgets. We expect this segment will recover later in 2021. In the fourth quarter of 2020, we announced that HMDmd and Kopin have entered an agreement to develop a specialized headset for surgeries, our initial entry into the expanding field medical applications utilizing AR headsets.”
Dr. Fan continued, “In the fourth quarter of 2020 our funded Research and Development (R&D) revenue and our R&D expenses both increased very significantly this year. As AR and VR applications are increasingly adopted, we have accelerated our R&D activities in advanced OLED and LED microdisplays and optics. We are excited about our R&D progress, which we believe will provide a stream of new, differentiated products as well as further enhance our already strong IP positions.
“This quarter we received our first production order and began shipments of our 720p duo-stack, ColorMax OLED microdisplays. We also announced an agreement to develop superbright monochrome MicroLED displays. We believe that both our advanced ColorMax™ OLED and our MicroLED displays will be key enablers of what we see as the coming wave of AR and VR products in defense, enterprise and consumer applications. We believe Kopin offers the widest range of leading microdisplay technologies in the world, which is particularly valuable as we anticipate the long-awaited adoption of AR and VR systems is beginning to take hold. As expected, these systems are being adopted first in defense, followed by industrial/enterprise/medical and consumer applications. Currently, almost all of our development programs are related to AR and VR applications. As the AR and VR market segments continue to gain traction, Kopin is ideally positioned to meet this demand. With industry leading displays and modules for AR and VR devices, Kopin clearly sees growing opportunities in many wearable sectors and we are making great progress in executing our strategy to improve the performance in all aspects of the Company. We are confident that we are well positioned for the coming era of AR/VR, and our future is bright,” concluded Dr. Fan.
Fourth Quarter Financial Results
Total revenues for the fourth quarter ended December 26, 2020 were $13.9 million, compared with $8.7 million for the fourth quarter ended December 28, 2019, a 60% increase year over year. Product revenues and R&D revenues grew 50% and 56% year over year, respectively.
Research and development (R&D) expenses for the fourth quarter of 2020 were $4.4 million compared to $2.7 million for the fourth quarter of 2019, a 65% increase year over year. Funded R&D expenses were $3.3 million for the fourth quarter of 2020 as compared to $1.7 million for the fourth quarter of 2019, an 87% increase.
Selling, general and administrative (SG&A) expenses were $2.4 million for the fourth quarter of 2020, compared to $4.5 million for the fourth quarter of 2019, a 47% decrease year over year. SG&A in the fourth quarter of 2020 and 2019 included $0.2 million and $0.2 million in noncash stock-based compensation, respectively.
Other income (expense) for the fourth quarter of 2020 and 2019 were income of $0.3 million and a loss of $3.7 million, respectively. Other income (expense) for the fourth quarter of fiscal year 2020 included $0.3 million of foreign currency gains compared to $0.2 million of foreign currency gains recorded in fourth quarter of fiscal year 2019. In the fourth quarter of fiscal year 2019, we recorded a non-cash $0.6 million gain on equity investments and an impairment charge of $5.2 million on equity investment.
The net income attributable to controlling interest for the fourth quarter of 2020 was $1.3 million, or $0.02 per share, compared with net loss of $7.3 million, or $0.09 per share, for the fourth quarter of 2019.
Full Year Results
Total revenue for the fiscal year ended December 26, 2020 was $40.1 million, a 36% increase, compared to $29.5 million for 2019. Product revenues and R&D revenues grew 41% and 103% year over year, respectively. Royalty and other revenues were $1.5 million for 2020 as compared to $4.3 million in 2019. 2019 royalty and other revenues included a one-time $3.5 million license fee.
Research and development expenses for 2020 were $11.7 million, a 13% decrease compared with $13.3 million in 2019. Funded R&D expenses were $7.7 million for 2020 as compared to $4.2 million for 2019, an 84% increase.
Selling, general and administrative expenses were $11.8 million in 2020, a 45% decrease compared with $21.3 million in 2019. SG&A in the of 2020 and 2019 included 0.8 million and $2.1 million in noncash stock-based compensation, respectively.
Other income (expense) for fiscal year 2020 and 2019 were income of $0.4 million and a loss of $2.9 million, respectively. Other income (expense) for fiscal year 2020 included $0.3 million of foreign currency gains compared to $0.2 million of foreign currency gains recorded in fiscal year 2019. In the fiscal year 2019, we recorded a non-cash $1.4 million gain on equity investments and an impairment charge of $5.2 million on equity investment.
The net loss from controlling interest for the fiscal year ended December 26, 2020 was $4.4 million or $0.05 per share, versus a net loss of $29.5 million or $0.37 per share for 2019.
Kopin’s cash and equivalents and marketable securities were approximately $20.7 million at December 26, 2020 as compared to $21.8 million at December 28, 2019, with no long-term debt. During the fourth quarter we issued 1.9 million shares under our At The Market (ATM) program, generating $3.9 million in net proceed cash. Subsequent to fiscal year end we issued 2.4 million shares under our ATM and generated additional $15.5 million in net proceed cash. Accordingly, we have fulfilled our ATM which was for $20 million.
During 2020 Kopin had 12 new patents granted and filed for four new applications. Kopin has over 200 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-K for the fiscal year ended December 26, 2020, for final disposition as well as important risk factors.
For more information, please refer to the link below : https://kopin.irpass.com/profiles/investor/NewsPrint.asp?v=6&b=2379&ID=96994&m=rl&g=1207
