31 October 2011

Kopin’s III-Vs revenue falls 3% in Q3

For third-quarter 2011, Kopin Corp of Taunton, MA, USA has reported revenue of $29.6m, down 6% on $31.4m last quarter and $31.6m a year ago.

Revenue from Displays (used in mobile applications including smartphones and tablet PCs, military thermal weapons sights and wearable computers) was $14.1m, down 8% on $15.4m last quarter and 6% on $15m a year ago. Revenue from III-V heterojunction bipolar transistor (HBT) epiwafers was $15.5m, down 3% on $16m last quarter and 6.6% on $16.6m a year ago.

“Our III-V revenues were affected by a shift in wireless handset sales as various OEMs are adjusting their product offering dates from a pattern which focused on the US holiday season to more year-round introductions of handsets and tablets,” notes president & CEO Dr John C.C.

“Despite the uncertain economic environment, our performance through the first nine months of 2011 has been quite strong,” says Fan. Nine-month revenue was $95.9m (up 10% year-on-year from $87.2m), comprising Display revenue of $46.8m (up 17% from $40.1m) and III-V revenue of $49.1m (up 4% from $47.1m).

Gross margin for Q3/2011 (as a proportion of product revenue) was 33.2%, up from 32.3% a year ago but down from 35% last quarter. However, for the first nine months of 2011, gross margin was 34.0%, up year-on-year from 28.1%.

R&D expenses were $6.4m (22% of revenue), down from $7.1m (23% of revenue) last quarter but up from $4.8m (15% 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 addition of Forth Dimension Displays (FDD, acquired in January). For the first nine months of 2011, R&D expenses totaled $19.9m, up year-on-year from $13.9m. “Income from operations has more than doubled to $2.4m for the first nine months of 2011 [despite a $212,000 loss in Q3], even as we have invested $6m more in R&D this year over last year,” Fan says.

Net income in Q3/2011 was $0.8m, level with last quarter but down from $1.4m a year ago. Nevertheless, during the first nine months of 2011, Kopin generated $10.6m in cash from operating activities. “This has enabled us to maintain a strong balance sheet – $103m in cash and marketable securities [up from $99.3m at the end of Q2] and no debt – while at the same time aggressively investing to grow our business organically and through acquisitions,” says Fan.

Based on current business trends, Kopin expects fourth-quarter revenue to be up on Q3 due to increased demand for its III-V BiHEMT products plus display sales driven by new design wins for digital still cameras and increased military product shipments. Full-year 2011 revenue should be $128-132m (up 8% on 2010’s $120.4m).

“During periods of economic volatility as we are experiencing, we understand that there is one school of thought to scale back on investment and R&D and wait for the market to bounce back,” says Fan. “Our philosophy is to use opportunities like this to invest in our business – including BiHEMT structures, the TWS program, night vision technology and Golden-i – to extend our leadership position while still maintaining our financial strength,” he adds. “Our BiHEMT activities are having the most immediate impact, as demand for this product is up six-fold from 2010 and we expect it to continue to ramp through 2012.”

See related items:

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

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%

Tags: Kopin

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