Kopin Corporation (NASDAQ:KOPN) Q3 2022 Earnings Conference Call November 1, 2022 8:30 AM ET Company Participants Richard Sneider - Treasurer & Chief Financial Officer John Fan - Chairman Michael Murray - President & Chief Executive Officer Conference Call Participants Glenn Mattson - Ladenburg Kevin Dede - H.C. Wainwright Operator Good day, ladies and gentlemen and welcome to the Kopin's Third Quarter 2022 Earnings Call. Today's conference is being recorded. At this time, IÂ'd like to turn the conference o ...

Kopin Corporation (NASDAQ:KOPN) Q2 2022 Earnings Conference Call August 2, 2022 8:30 AM ET Corporate Participants John Fan - Chief Executive Officer Richard Sneider - Treasurer and Chief Financial Officer Conference Call Participants Glenn Mattson – Ladenburg Thalmann Kevin Dede – H.C. Wainwright & Co. Operator Welcome to Kopin's Second Quarter 2022 Earnings Conference Call. [Operator Instructions]. I would now like to turn the conference over to Rich Sneider, Chief Financial Officer. Please go ahead. Richa ...

Call Start: 08:30 January 1, 0000 8:39 AM ET Kopin Corporation (NASDAQ:KOPN) Q1 2022 Earnings Conference Call May 3, 2022, 8:30 AM ET Company Participants John Fan – Chief Executive Officer Richard Sneider – Treasurer and Chief Financial Officer Conference Call Participants Glenn Mattson – Ladenburg Thalmann Kevin Dede – H.C. Wainwright & Co. Operator Ladies and gentlemen, please standby. We're about to begin. Good day and welcome to Kopin's first-quarter 2022 earnings call. Today's conference is being reco ...

Part I [Business](index=5&type=section&id=Item%201.%20Business) Kopin develops high-resolution microdisplays and components for defense, enterprise, industrial, and consumer AR/VR applications - Kopin is a developer and provider of high-resolution microdisplays and components for defense, enterprise, industrial, and consumer products, including AR and VR systems[14](index=14&type=chunk) - The company's core display technologies include transmissive AMLCDs (CyberDisplay®), reflective LCOS displays (Time Domain Imaging), and emissive OLED displays (Lightning® displays)[15](index=15&type=chunk)[16](index=16&type=chunk) Significant Customer Sales as a Percentage of Total Revenue | Customer | 2021 | 2020 | 2019 | | :--- | :--- | :--- | :--- | | **Defense Customers in Total** | 40% | 50% | 30% | | DRS Network & Imaging Systems, LLC | 31% | 35% | 17% | | Collins Aerospace | 30% | 27% | * | | RealWear, Inc. | * | * | 20% | | **Funded Research and Development Contracts** | 32% | 25% | 17% | - Kopin's strategy involves leveraging funded R&D from U.S. defense programs to develop technology that can be adapted for industrial, enterprise, and consumer applications[48](index=48&type=chunk) - The company faces significant competition from large Asian-based electronics companies such as Sony, Samsung, and LG Display, as well as specialized microdisplay manufacturers like eMAGIN[64](index=64&type=chunk) [Risk Factors](index=17&type=section&id=Item%201A.%20Risk%20Factors) The company faces risks including historical losses, negative cash flow, supply chain issues, fixed-price defense contracts, and reliance on U.S. government programs - The company has a history of significant net operating losses, with an accumulated deficit of **$319.1 million** as of December 25, 2021, and has experienced negative cash flow from operations in fiscal years 2021, 2020, and 2019[97](index=97&type=chunk) - Kopin is exposed to a global shortage of critical semiconductor components and other raw materials, which could prevent product manufacturing and sales. The company's reliance on a select number of third-party suppliers, particularly for defense products, heightens this risk[98](index=98&type=chunk) - A significant portion of revenue is derived from U.S. defense programs like the Family Weapon Sight (FWS) and the F-35 Joint Strike Fighter. These revenues are at risk due to potential program cancellations, funding changes, or loss of contracts to competitors[105](index=105&type=chunk) - Most defense sales are on a fixed-price basis, exposing the company to potential losses from cost overruns, especially given rising raw material and labor costs due to inflation[99](index=99&type=chunk) - The company relies on a Taiwanese foundry for defense display integrated circuits and Chinese foundries for OLED displays. Any disruption to these foundries due to political instability, natural disasters, or other factors could severely limit manufacturing capabilities[119](index=119&type=chunk)[120](index=120&type=chunk) [Properties](index=29&type=section&id=Item%202.%20Properties) Kopin leases all its facilities, including a 74,000 sq. ft. production facility in Westborough, MA, and other international locations - The company leases a **74,000 sq. ft.** facility in Westborough, MA, which includes **10,000 sq. ft.** of clean rooms[157](index=157&type=chunk) - Subsidiaries lease facilities in Reston, VA (NVIS, **6,100 sq. ft.**) and Dalgety Bay, Scotland (FDD, **20,000 sq. ft.**)[158](index=158&type=chunk) [Legal Proceedings](index=29&type=section&id=Item%203.%20Legal%20Proceedings) The company is involved in a legal dispute with BlueRadios, Inc. concerning breach of contract and trade secret misappropriation related to a joint venture - BlueRadios, Inc. filed a complaint against Kopin in 2016 alleging breach of contract, misappropriation of trade secrets, and other claims related to a joint venture[161](index=161&type=chunk) - As of December 25, 2021, the company has not recorded a litigation accrual, as it has not determined that a loss is probable[162](index=162&type=chunk) Part II [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=30&type=section&id=Item%205.%20Market%20for%20Registrant's%20Common%20Equity%2C%20Related%20stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) Kopin's common stock trades on Nasdaq, and the company does not anticipate paying cash dividends, preferring to retain earnings for business development - The company's common stock trades on the Nasdaq Capital Market under the symbol **KOPN**[165](index=165&type=chunk) - Kopin has not paid cash dividends and does not expect to in the foreseeable future, intending to retain earnings for business development[166](index=166&type=chunk) Equity Compensation Plan Information (as of Dec 25, 2021) | Plan Category | Securities to be issued upon exercise | Weighted-average exercise price | Securities remaining available for future issuance | | :--- | :--- | :--- | :--- | | Equity compensation plans approved by security holders | 2,077,592 | $2.78 | 1,795,311 | [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=32&type=section&id=Item%207.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Total revenues increased by 13.8% in fiscal 2021, driven by Industrial/Enterprise and R&D growth, but net loss widened due to higher operating expenses and negative operating cash flow [Results of Operations](index=35&type=section&id=Results%20of%20Operations) Total revenues increased to $45.7 million in fiscal 2021, driven by Industrial/Enterprise and R&D, while operating expenses rose significantly, leading to a $13.8 million operating loss Revenues by Application (In thousands) | Category | 2021 | 2020 | 2019 | | :--- | :--- | :--- | :--- | | Defense | $18,180 | $20,231 | $8,729 | | Industrial/Enterprise | $9,710 | $6,882 | $9,717 | | Consumer | $1,871 | $852 | $1,777 | | Research and Development | $14,669 | $10,123 | $4,983 | | License and royalties | $1,115 | $1,487 | $4,252 | | **Total Revenues** | **$45,666** | **$40,128** | **$29,519** | - FY2021 revenue from defense customers decreased due to lower shipments for the Joint Strike Fighter program, while Industrial/Enterprise revenue increased from higher sales for 3D metrology equipment and industrial headsets[199](index=199&type=chunk)[200](index=200&type=chunk) Cost of Product Revenues Analysis | (In thousands, except percentages) | 2021 | 2020 | 2019 | | :--- | :--- | :--- | :--- | | Cost of product revenue | $25,052 | $21,398 | $20,902 | | Cost of product revenues as a % of net product revenues | 83.8% | 75.0% | 103.0% | - Cost of product revenues as a percentage of sales increased in 2021 compared to 2020, primarily due to lower production volumes in Q2 and Q3 of 2021 related to process changes for FWS-I products[213](index=213&type=chunk) Research and Development Expenses (In thousands) | Category | 2021 | 2020 | 2019 | | :--- | :--- | :--- | :--- | | Funded | $9,976 | $7,746 | $4,216 | | Internal | $6,312 | $3,924 | $9,133 | | **Total** | **$16,288** | **$11,670** | **$13,349** | - Total R&D expenses increased in 2021 due to a higher number of defense-related contracts (Funded R&D) and increased spending on OLED development (Internal R&D)[217](index=217&type=chunk) - Selling, general and administrative (SG&A) expenses increased to **$18.1 million** in 2021 from **$11.8 million** in 2020, primarily due to a **$3.1 million** increase in non-cash stock-based compensation and a **$1.4 million** increase in compensation and benefits[220](index=220&type=chunk)[221](index=221&type=chunk) [Liquidity and Capital Resources](index=41&type=section&id=Liquidity%20and%20Capital%20Resources) Cash and equivalents increased to $29.3 million at year-end 2021, primarily from equity sales, offsetting negative operating cash flow, with management projecting sufficient liquidity through Q1 2023 - Cash, cash equivalents, and marketable securities increased to **$29.3 million** at year-end 2021 from **$20.7 million** at year-end 2020[233](index=233&type=chunk) - The company raised approximately **$21.1 million** net proceeds from the sale of common stock in fiscal 2021 through its At-The-Market (ATM) equity offering programs[233](index=233&type=chunk)[234](index=234&type=chunk) - Net cash used in operating activities was **$10.7 million** in 2021, compared to **$4.4 million** in 2020 and **$21.0 million** in 2019[243](index=243&type=chunk) - Management estimates sufficient liquidity to fund operations at least through Q1 2023, but may consider raising additional capital if market conditions are favorable[243](index=243&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=43&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company is exposed to interest rate and foreign currency risks but does not use hedging instruments, deeming the potential impact immaterial - The company's primary market risks are related to interest rate fluctuations on its investment portfolio and foreign currency exchange rate changes from its international operations[247](index=247&type=chunk) - Kopin does not currently use hedging instruments to manage its foreign currency exchange rate risk[247](index=247&type=chunk) [Controls and Procedures](index=43&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management, including the CEO and CFO, concluded that disclosure controls and internal control over financial reporting were effective as of December 25, 2021 - Management, including the CEO and CFO, concluded that the company's disclosure controls and procedures were effective as of December 25, 2021[250](index=250&type=chunk) - Management concluded that the company's internal control over financial reporting was effective as of December 25, 2021, based on the COSO framework[252](index=252&type=chunk) Part III [Directors, Executive Officers, Corporate Governance, Compensation, and Principal Accountant Fees](index=44&type=section&id=Items%2010-14) Information on directors, executive officers, corporate governance, compensation, security ownership, and accountant fees is incorporated by reference from the 2022 Proxy Statement - Information regarding Directors, Executive Officers, Corporate Governance (Item 10), Executive Compensation (Item 11), Security Ownership (Item 12), Certain Relationships and Related Transactions (Item 13), and Principal Accountant Fees (Item 14) is incorporated by reference from the company's 2022 Proxy Statement[256](index=256&type=chunk)[258](index=258&type=chunk)[259](index=259&type=chunk)[260](index=260&type=chunk)[261](index=261&type=chunk) Part IV [Exhibits and Financial Statement Schedules](index=45&type=section&id=Item%2015.%20Exhibits%20and%20Financial%20Statement%20Schedules) This section presents the consolidated financial statements, notes, and the independent auditor's report, which identifies revenue recognition for R&D contracts as a critical audit matter - The independent auditor, RSM US LLP, issued an unqualified opinion on the consolidated financial statements[269](index=269&type=chunk) - The auditor identified revenue recognition for research and development contracts as a Critical Audit Matter, due to the significant management judgment required to estimate total contract costs, which is a key input for the cost-to-cost recognition method[274](index=274&type=chunk)[275](index=275&type=chunk) [Consolidated Financial Statements](index=47&type=section&id=Consolidated%20Financial%20Statements) The financial statements show total assets of $63.0 million, a net loss of $13.4 million, and net cash used in operations of $10.7 million for fiscal year 2021 Key Financial Statement Data (Fiscal Year 2021) | Metric | Amount (in millions) | | :--- | :--- | | Total Revenues | $45.7 | | Loss from Operations | $(13.8) | | Net Loss Attributable to Kopin | $(13.4) | | Net Loss Per Share | $(0.15) | | Total Assets (at year-end) | $63.0 | | Total Liabilities (at year-end) | $23.4 | | Total Stockholders' Equity (at year-end) | $39.6 | | Net Cash Used in Operating Activities | $(10.7) | | Net Cash Provided by Investing Activities | $0.1 | | Net Cash Provided by Financing Activities | $20.4 | [Notes to Consolidated Financial Statements](index=53&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) Notes detail accounting policies, significant customer concentrations, substantial federal net operating loss carryforwards, and related party transactions - In fiscal 2021, **69%** of revenue was recognized over time, primarily from government contracts, while **31%** was recognized at a point in time[311](index=311&type=chunk) - As of December 25, 2021, the company had federal net operating loss carryforwards of **$160.3 million** expiring between 2021-2038 and **$60.1 million** with an unlimited carryover period. A full valuation allowance has been recorded against these deferred tax assets[403](index=403&type=chunk) - In 2019, the company recorded a **$5.2 million** impairment charge, reducing its investment in RealWear, Inc. to zero[377](index=377&type=chunk)[422](index=422&type=chunk) - The company's CEO, Dr. John C.C. Fan, and his family members collectively hold a significant ownership interest in Solos Inc., a company with which Kopin has a business relationship and holds a **20%** equity stake[423](index=423&type=chunk)[424](index=424&type=chunk)

Financial Data and Key Metrics Changes - Total revenues for Q4 2021 were $13.2 million, a 5% decrease from $13.9 million in Q4 2020 [16] - Net loss attributable to controlling interest for Q4 2021 was $3.6 million or $0.04 per share, compared to a net income of $1.3 million or $0.02 per share for Q4 2020 [20] - Full-year 2021 revenues increased by 14% compared to 2020, marking the fourth consecutive year of growth [3][20] - Cost of product revenues as a percentage of net product revenues increased to 84.9% in Q4 2021 from 65.1% in Q4 2020, primarily due to lower yields [18] Business Line Data and Key Metrics Changes - Industrial/Enterprise products generated $9.7 million in revenue, a 41% increase over 2020 [3] - Consumer product revenue rose from approximately $900,000 in 2020 to $1.9 million in 2021, representing a 120% increase [4] - Defense product line revenue was $18.2 million in 2021, with strong demand continuing [4] Market Data and Key Metrics Changes - Demand for Spatial Light Modulators using Ferroelectric LCOS was strong, driven by the trend of manufacturers converting to 3D automatic optical inspection [4] - The company noted that supply chain shortages are affecting forecasts and demand for 3D automation equipment [26] Company Strategy and Development Direction - The company aims to innovate and advance technology in AR, VR, and MR applications, believing it is well-positioned to capitalize on opportunities in the Metaverse [14] - The introduction of all-plastic Pancake optics is expected to enhance the user experience in VR and Metaverse headsets [9][10] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about strong demand across all core product lines despite ongoing supply chain challenges [14] - The company anticipates another year of growth in 2022, supported by a strong backlog of orders [14] Other Important Information - The company has no long-term debt and cash equivalents and marketable securities were approximately $29.3 million at the end of 2021 [24] - R&D expenses for 2021 were $16.3 million, a 39% increase compared to 2020, driven by internal OLED development costs [21][22] Q&A Session Summary Question: Insights on the optical inspection market and its impact on industrial enterprise space - Management noted that while there is momentum in the optical inspection market, supply chain shortages could hinder demand for 3D automation equipment [26][27] Question: Update on defense orders and revenue expectations - Management confirmed that the $19.8 million order should help maintain flat to up revenue for defense in 2022, with additional low-rate industrial production orders providing potential upside [28][29] Question: Gross margins and break-even point - Management indicated that break-even could be reached with revenues between $50 million to $60 million, and the current product to contract revenue ratio is close to historical levels [31][32] Question: Cash position and capital raise needs - Management stated that there is sufficient cash to execute the current strategy, indicating no immediate need for capital raise activities [33] Question: Advancements in Pancake optics and market readiness - Management expressed optimism about Pancake optics, highlighting strong interest from customers and plans to meet market demands [37][41] Question: Potential for Pancake optics in enterprise applications - Management clarified that while Pancake optics have advantages, their low optical efficiency may limit their use in outdoor enterprise applications [49]

Kopin Corporation (NASDAQ:KOPN) Q3 2021 Earnings Conference Call November 2, 2021 8:30 AM ET Company Participants Richard Sneider - Chief Financial Officer John Fan - Chief Executive Officer Conference Call Participants Glenn Mattson - Ladenburg Thalmann Spencer Cushman - H.C. Wainwright Craig Rose - Axiom Asset Management Operator Good day, and welcome to the Kopin Corporation Third Quarter 2021 Earnings Call. Today's conference is being recorded. At this time, I would turn the conference over to Mr. Richa ...

国KOPIN 图 KOPIN Revolutionizing the way people see, hear, and communicate Sidoti 2021 Fall Virtual Investor Conference SAFE HARBOR STATEMENT This document contains forward-looking statements. The words "believe," "may," "will," "potentially," "estimate," "continue," "anticipate," "intend," "could," "would," "project," "plan," "expect" and similar expressions that convey uncertainty of future events or outcomes are intended to identify forward-looking statements. Forward-looking statements may address the fol ...

Kopin Corporation (NASDAQ:KOPN) Q2 2021 Earnings Conference Call August 3, 2021 8:30 AM ET Company Participants Richard Sneider - Chief Financial Officer John Fan - Chief Executive Officer Conference Call Participants Glenn Mattson - Ladenburg Thalmann Kevin Dede - H.C. Wainwright Jeff Bernstein - Cowen Craig Rose - Axiom Asset Management Operator Good day, and welcome to the Kopin Corporation Second Quarter 2021 Earnings Call. Today's conference is being recorded. At this time, I would turn the conference ...

Financial Data and Key Metrics Changes - Total revenues for Q1 2021 were $11.7 million, a 48% increase from $7.9 million in Q1 2020 [20] - Gross margin improved to 15% in Q1 2021 from 5% in Q1 2020, attributed to better manufacturing efficiencies [21] - Net loss attributable to the company was $4.1 million or $0.05 per share, compared to a net loss of $3.6 million or $0.04 per share in Q1 2020 [25] - Cash and marketable securities increased to approximately $35.6 million as of March 27, 2021, up from $20.7 million at the end of 2020 [27] Business Line Data and Key Metrics Changes - Defense revenues increased by 42% year-over-year, driven by FWS-I thermal weapon sight and F-35 Fighter Jet programs [11] - Customer-funded R&D revenues surged over 80% year-over-year due to heightened interest in next-generation displays [8] - The enterprise market segment showed strong volume growth, particularly in enterprise AR and 3D automatic optical inspection systems [9] Market Data and Key Metrics Changes - The public safety sector experienced a decline due to pandemic-related budget constraints for municipal governments [10] - The company is actively pursuing additional opportunities in the defense market, with expectations for announcements in the coming months [7] Company Strategy and Development Direction - The company is focusing on augmented and virtual reality (AR/VR) technologies, viewing it as a significant growth opportunity, potentially larger than the cell phone market [37] - Kopin is positioned to capitalize on the growing AR/VR trend, with a strong defense program portfolio and ongoing R&D investments [19][16] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the recovery from the pandemic and the increasing demand across multiple segments [6] - The company is monitoring the global semiconductor shortage but has not experienced significant impacts thus far [29] Other Important Information - The company has over 10 defense programs in various stages of development, primarily focused on AR and VR applications [12] - A trilogy webinar series on AR and VR was launched to discuss market trends and future product offerings [17][18] Q&A Session Summary Question: Performance in industrial and R&D segments - The strength in the industrial segment was primarily from industrial headsets like RealWear, with some commercial and consumer R&D revenue as well [33] Question: Defense programs and revenue contributions - Three defense programs are expected to enter low rate initial production in the second half of the year, with revenue ramping up in 2022 [35] Question: Comparison of current AR/VR opportunity to past opportunities - The current AR/VR opportunity is believed to be potentially larger than the cell phone business, with projections of it becoming a $1 trillion market in 15 years [37] Question: Concerns about chip supply disruptions - The company has not faced significant issues from the semiconductor shortage and is actively managing supplier relationships [39] Question: Details on the Canadian near-to-eye diving display - The display uses a micro LCD and special backlight, and the product has received positive market feedback [42] Question: Consumer development in AR/VR - The company is focusing on making consumer products lightweight, fashionable, and user-friendly, with developments expected in the coming months [47] Question: R&D spending and future challenges - The main challenges in R&D are related to display technology and optics, with significant efforts being made to overcome these hurdles [59] Question: Collaboration with consumer product developers - The company is working with major Silicon Valley developers in the AR/VR space, indicating a competitive landscape [63]

Kopin Corporation (NASDAQ:KOPN) Q4 2020 Earnings Conference Call March 2, 2021 8:30 AM ET Company Participants Richard Sneider - Chief Financial Officer John Fan - Chairman and Chief Executive Officer Conference Call Participants Glenn Mattson - Ladenburg Thalmann Kevin Dede - HCW Denis Pyatchanin - Needham & Company Craig Rose - Axiom Operator Good day and welcome to the Kopin Corporation Fourth Quarter and Full-Year 2020 Earnings Conference Call. Today’s conference is being recorded. At this time, I like ...