Kopin Corp (KOPN) Misses Q3 EPS by 2c, Revenues Miss

Kopin Corp (NASDAQ: KOPN) reported Q3 EPS of ($0.08), $0.02 worse than the analyst estimate of ($0.06). Revenue for the quarter came in at $6.14 million versus the consensus estimate of $6.63 million.

• Revenues Increase 20% on Strength of Military and Industrial Products
• Completes Spinout of Solos and Whisper Audio Technology Shortly After Quarter End

“We are pleased to see the initial benefits of the strategic steps we discussed last quarter to monetize our intellectual property and reduce our cost structure,” said Dr. John C.C. Fan, CEO of Kopin. “This quarter revenues increased approximately 20% while we reduced our expenses by approximately 20%.

“The revenue growth of our core product segments, Industrial and Military, was a highlight of the quarter. Revenue increased approximately 105% for our Industrial products and Military revenues increased approximately 31% on the strength of our F-35 fighter jet and FWS-I programs. We look for our military sales to continue ramping next year and beyond as additional orders are received for existing programs and current development programs move into production. In addition, the feedback we are receiving from our industrial customers indicates a growing market, which points to continued strength in enterprise revenues.”

Dr. Fan continued, “Complementing our revenue growth in Q3 was our expense reduction strategy. Research & Development (R&D) expense declined 48% as many of our development programs are transitioning to production and we are no longer investing in products that have been licensed or in programs that have been curtailed. We expect continued expense reduction as we completed the spinout out of our Solos product line and Whisper technology shortly after the end of the third quarter. Under the agreement, we retained a 20% equity interest in the new entity and receive a royalty on sales for four years. We believe having a team focused specifically on Solos and Whisper will accelerate the monetization of both technologies, which is the most efficient way for Kopin to leverage our investment.“

“During the third quarter we also continued aggressively developing our Lightning® OLED products. Our fabless model allows us to cost-effectively invest in this differentiated technology, which has applications across our customer base. We currently have two advanced Lightning displays in development for two global customers. In addition, we are in discussion for additional display development programs with commercial and military applications.”

Dr. Fan concluded, “We expect our financial position will continue to strengthen as we further our strategy matching cost rationalization efforts with accelerating revenue growth.”

For earnings history and earnings-related data on Kopin Corp (KOPN) click here.

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