29 July 2011

Kopin’s first-half III-V revenue up 10% year-on-year

For second-quarter 2011, Kopin Corp of Taunton, MA, USA has reported revenue of $31.4m, up 4% on $30.2m a year ago but down 10% from last quarter’s record $34.9m.

Revenue from Displays (used in mobile applications including smartphones and tablet PCs, military thermal weapons sights and wearable computers) was $15.4m, up 7.7% on $14.3m a year ago but down 11% from $17.3m last quarter. Revenue from III-V heterojunction bipolar transistor (HBT) epiwafers was $16m, up slightly from $15.9m a year ago but down 9% on $17.6m last quarter.

“Our second-quarter operating results reflect a continuation of the strategy we set forth at the beginning of the year — balancing short-term financial performance with a focus on long-term growth,” says president & CEO Dr. John C.C. Fan.

Gross margin (as a proportion of product revenue) has risen further, from 25% a year ago and 33.3% last quarter to 35%.

Operating expenses were $31m, up only slightly on $30.9m a year ago and cut from $32.8m last quarter. However, of this, R&D expenses were $7.1m (23% of revenue), up from $6.4m (18.3% of revenue) last quarter and $4.9m (16% of revenue) a year ago, reflecting Kopin’s investments in its Golden-i technology, III-V smartphone products and capacity expansion, military display products, and the inclusion of Forth Dimension Display’s (FDD) expenses.

Including a net gain of $0.4m from the sale of investments and a net loss of $0.3m from foreign currency fluctuations, net income was $0.8m, down on $2.1m last quarter and $1.9m a year ago. However, the latter included gains of $1.9m from the sale of investments and $0.7m related to foreign currency fluctuations. During the quarter, cash and marketable securities rose slightly from $99.1m to $99.3m, and Kopin has no long-term debt.

“We are in the enviable position of having strong growth projections for our III-V products, the opportunity to add a new military display product category — night-vision systems — to our current portfolio of thermal weapon sight products, and the development of a potentially game-changing, hands-free wireless industrial computing product in Golden-i,” says Fan. “Because of the current strong growth of smart phones, the requirement for those competing for an award of the Enhanced Night Vision program in 2012 to provide qualification units in 2011, and our drive to be a leader in voice-activated cloud computing, these opportunities have required significant investments this year,” he adds. 

“Yet, with all of our development efforts, through the first half of fiscal 2011 we have maintained strong operating results,” Fan notes. “Overall our revenues are up 19%, with our III-V revenues up 10% over the same period last year as we head into what historically has been our strongest part of the year,” he adds. “Although the current federal budget situation has impacted the timing of display product sales, we expect another year of strong military revenues, as evidenced by our recently announced $23.2m in follow-on orders for the TWS Bridge (TWS-IIB) program,” Fan says. “Our income from operations is $2.6m for the first half of 2011 compared with a loss of $0.8m through the same period last year, we have generated $3.5m in cash flow from operating activities and repurchased $1.9m of our common stock.”

“Our III-V technology is helping to drive the rapid adoption of advanced 3G and 4G technologies across the major smartphone and tablet platforms,” Fan continues. “These advanced new devices not only require more III-V transistors, but structures that are more technologically complex and challenging to produce. As these phones continue to become more complex, Kopin is benefitting with higher and higher dollar content per handset.” 

With first-half 2011 revenue of $66m and the third and fourth quarters traditionally Kopin’s strongest, the firm is on course to achieve its full-year revenue guidance of $130–140m (up 8–16% on 2010). “Robust smartphone demand should continue to fuel our III-V business, just as the TWS-IIB and a number of military R&D programs are expected to generate momentum for our display unit,” Fan concludes.

See related items:

Kopin’s Q1 revenue up 37% year-on-year to record $35m

Smart-phone demand drives 34% III-V revenue growth for Kopin in 2010

Kopin’s III-V growth slows in Q3 to 4.4%

Smartphone demand drives 54% year-on-year growth in Kopin’s III-V revenue in Q2

Kopin’s III-V revenue more than doubles year-on-year in Q1

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