Kopin(US:KOPN)2019-05-07 16:50Financial Data and Key Metrics Changes - Total revenues for Q1 2019 were $5.5 million, slightly down from $5.7 million in Q1 2018, indicating flat revenue year-over-year [26] - Net loss attributable to controlling interest for the quarter was approximately $11.3 million, or $0.15 per share, compared to a net loss of $5.5 million, or $0.08 per share in Q1 2018 [31] - Cost of goods sold for Q1 2019 was $5.9 million, representing 127% of product revenues, compared to $4.1 million or 81% in Q1 2018 [28] Business Line Data and Key Metrics Changes - Industrial wearable revenues and military R&D revenues increased by approximately $1 million in Q1 2019 [26] - R&D expenses rose to $5 million in Q1 2019 from $4.5 million in Q1 2018, including $500,000 related to curtailed development programs [29] - SG&A expenses decreased to $6.3 million in Q1 2019 from $6.9 million in Q1 2018, primarily due to reduced compensation expenses [30] Market Data and Key Metrics Changes - The company received a large follow-up order from a Tier 1 customer for AR Smart Glasses, with expectations to triple the number of displays shipped to enterprise customers in 2019 [10][9] - The military business saw increased shipments of displays embedded in the F-35 fighter jet helmets, indicating strong demand in the defense sector [16][17] Company Strategy and Development Direction - The company is focusing on strategic realignment, reviewing operations, consolidating programs, and reducing costs to enhance financial stability [22][24] - There is optimism regarding the growth of the AR and VR markets, particularly with the advent of 5G technology, which is expected to drive demand for micro OLED displays [11][14] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the enterprise market's growth, driven by the increasing adoption of AR technology by major companies [10][9] - The company is optimistic about the future of consumer AR/VR applications, especially as investments in these technologies increase [14] Other Important Information - The company completed the sale of approximately $8 million shares for about $8.8 million in gross proceeds during the quarter [32] - The adoption of ASC 842, the new lease recognition standard, resulted in lease assets and liabilities being added to the balance sheet with minimal P&L impact [33] Q&A Session Summary Question: Timing of product announcement from Tier 1 customer - Management indicated uncertainty about the announcement timing but confirmed a significant order has been received [38] Question: Revenue recognition and order flow - Management expects steady revenue recognition from orders, indicating real production [39] Question: Spend reduction expectations - Operating expenses are expected to decrease each quarter throughout the year [42] Question: AR orders forecast - The company anticipates tripling the number of AR units shipped, with bullish forecasts from customers [45] Question: Progress on military helmet program with Elbit - Development is on track for the common helmet program with Elbit [52] Question: New SOLOS design details - The new SOLOS is tailored for the broader consumer market rather than being specific to cycling [65] Question: Licensing of Whisper technology - Management is exploring various strategies regarding the licensing of Whisper technology [70]