Kopin(US:KOPN)2022-03-08 18:04Financial 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]