SECURITIES AND EXCHANGE COMMISSION
WASHINGTON DC 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report: February 13, 2002
KOPIN CORPORATION
(Exact Name of Registrant as Specified in Charter)
DELAWARE 0-19882 04-2833935
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(State or Other Jurisdiction (Commission (IRS Employer
of Incorporation) File Number) Identification No.)
695 Myles Standish Blvd., Taunton, MA 02780-1042
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code (508) 824-6696
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ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(C) EXHIBITS.
99.1 Kopin Corporation Press Release, dated February 13, 2003.
ITEM 9. REGULATION FD DISCLOSURE.
Kopin Corporation issued a press release on February 13, 2003, a copy
of which is attached as Exhibit 99.1 to this report and incorporated herein by
this reference, in which it announced financial results for the fourth quarter
and full year ended December 31, 2002. This information shall not be deemed to
be "filed" for the purposes of Section 18 of the Securities Exchange Act of
1934 and shall not be deemed to be incorporated by reference in any filing
under the Securities Act of 1933. Kopin Corporation disclaims any intention or
obligation to update or revise this information. The submission of this report
on Form 8-K is not an admission as to the materiality of any information in
this report that is required to be disclosed solely by Regulation FD.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
KOPIN CORPORATION
Dated: February 13, 2003 By: /s/ Richard A. Sneider
---------------------------
Richard A. Sneider
Treasurer and Chief Financial Officer
(Principal Financial and Accounting Officer)
EXHIBIT INDEX
Exhibit Number Description
99.1 Press Release, dated February 13, 2003
Exhibit 99.1
FOR IMMEDIATE RELEASE
Contact:
Richard Sneider or Ehren Lister
Chief Financial Officer Account Executive
Kopin Corporation Sharon Merrill Associates, Inc.
(508) 824-6696 (617) 542-5300
rsneider@kopin.com elister@investorrelations.com
KOPIN REPORTS FOURTH-QUARTER AND FULL-YEAR 2002 FINANCIAL RESULTS
Full-Year Revenue Increases 48 Percent; Company Achieves CyberLite(TM)Customer
Qualification; Volume Production to Begin in First Quarter
TAUNTON, MASS., FEBRUARY 13, 2003 -- Kopin Corporation (Nasdaq: KOPN) today
announced financial results for the fourth quarter and full year ended December
31, 2002.
Financial highlights:
o Total fourth-quarter revenue increased 6.8 percent year-over-year to $16.5
million from fourth-quarter 2001 revenue of $15.4 million. Total revenue
decreased 24.6 percent sequentially from $21.9 million in the third
quarter of 2002. For the 12 months ended December 31, 2002, total revenue
was $76.8 million, an increase of 48 percent over 2001 total revenue of
$51.9 million.
Results of operations excluding the impact of Micrel Inc. stock activity, the
cumulative effect of a change of accounting for goodwill and other
intangible assets and a 2001 impairment charge:
o Kopin's net loss for the fourth quarter of 2002 was $2.4 million, or $0.03
per share. This compares with a net loss of $6.5 million, or $0.09 per
share, in Q4 of 2001 and net income of $0.6 million, or $0.01 per share,
in Q3 of 2002.
o Kopin's net loss was $6.5 million, or $0.09 per share, for 2002, compared
with a net loss of $40.6 million, or $0.61 per share, for 2001.
Results of operations under generally accepted accounting principles (GAAP):
o Kopin's net loss for Q4 of 2002 was $15.1 million, or $0.22 per share.
This compares with a net loss of $7.1 million, or $0.10 per share, in Q4
of 2001 and net income of $0.6 million, or $0.01 per share, in Q3 of 2002.
o Kopin's net loss was $31.9 million, or $0.46 per share, in 2002, compared
with a net loss of $22.7 million, or $0.34 per share, in 2001.
o Kopin ended the fourth quarter with approximately $118 million in cash and
marketable securities and no debt, and generated approximately $12 million
of cash flow from operating activities for full year 2002.
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KOPIN/2
"Our fourth-quarter results were in line with our projections and concluded a
successful year for Kopin," said Dr. John C.C. Fan, Kopin's president and CEO.
"We recorded the second highest annual revenue level in the Company's history;
introduced new, differentiable products that will be instrumental to Kopin's
growth in the coming years; and continued our substantial R&D investments in
our three product platforms. Even with these investments, we significantly
reduced our adjusted net loss in 2002, generated nearly $12 million in cash
flow from operating activities and built our cash and marketable securities to
$118 million. This gives us ample capital for continued development of new
products based on our proprietary technologies."
RECONCILIATION OF QUARTERLY ADJUSTED NET INCOME (LOSS) TO GAAP (UNAUDITED)
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(in millions, except per share data) Q4 2002 Q4 2001 Q3 2002
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GAAP Net Income (Loss) $(15.1) $(7.1) $0.6
Loss on Writedown of Micrel Stock 10.2 -- --
Losses on Micrel Stock Sales 2.5 -- --
Effect of Accounting change for Goodwill -- 0.6 --
Adjusted Net Income (Loss) $(2.4) $(6.5) $0.6
====== ====== ====
GAAP EPS $(0.22) $(0.10) $0.01
Adjusted EPS $(0.03) $(0.09) $0.01
Diluted Shares 69.4 68.6 70.0
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III-V
Recently, Kopin's blue CyberLite LED was qualified by a tier-one packaging
customer based in Asia. This important milestone represents the official
rollout of the third product platform based on Kopin's technologies. "With the
CyberLite now qualified by this customer, we are starting to ramp the LED to
volume production in the first quarter," said Fan. "We also continue to work
toward qualification by additional customers and to focus on introducing
derivative products such as green CyberLite LED chips. It is important to
emphasize that the CyberLite LED chip possesses differentiable and desired
properties, and is based on Kopin's proprietary NanoPockets(TM) process. We are
excited to bring nanotechnology into volume production."
III-V revenue decreased 30 percent year-over-year to $5.6 million in the fourth
quarter of 2002 from $8.0 million in the fourth quarter of 2001. Full-year 2002
III-V revenue was $32.7 million, compared with $28.3 million in 2001. Kopin and
Skyworks Solutions, Inc. recently reached a written agreement on the supply of
HBT wafers. "We have always had very strong relationships with both Alpha
Industries and Conexant Systems' wireless division, which formed Skyworks
Solutions. In fact, our relationship with Conexant dates back to its early days
as a part of Rockwell, Inc.; Kopin and Rockwell introduced the first HBT power
amplifiers for CDMA handsets in 1996. We look forward to continuing our long
relationship," Fan said.
In January, Kopin announced the availability of GAIN-HBT(TM) transistors,
second-generation structures designed to meet the power efficiency, circuit
speed and linearity requirements of new data-enabled wireless handsets and
wireless LAN devices. "GAIN-HBTs are ideal for power-hungry wireless devices,
particularly the popular new handsets with direct-view color displays," said
Fan.
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KOPIN/3
CYBERDISPLAY
Fourth-quarter 2002 CyberDisplay revenue increased 47.3 percent to $10.9
million from $7.4 million in the fourth quarter of 2001. Full-year 2002
CyberDisplay revenue reached a record $44.1 million, compared with $23.6
million in 2001. "We are delighted with the performance of CyberDisplay in
2002. Our CyberDisplay revenue underscores the popularity of our displays, the
smallest commercially available microdisplays in the market. During the fourth
quarter, the Company introduced the CyberDisplay color 180K, which uses Kopin's
new breakthrough color-filtered technology. The 180K is compatible with
off-the-shelf driver chips and we are working with current and potential
customers to secure wins for this new display in portable consumer electronics
applications," said Fan.
FULL YEAR RESULTS
Kopin reported full-year 2002 revenue of $76.8 million, a 48 percent increase
over 2001. The adjusted net loss, excluding items related to Kopin's investment
in Micrel and the cumulative effect of an accounting change, was $6.5 million,
or $0.09 per share. For full-year 2002, Kopin reported a GAAP net loss of $31.9
million, or $0.46 per share, compared with a loss of $22.7 million, or $0.34
per share, for 2001.
RECONCILIATION OF FULL-YEAR ADJUSTED NET LOSS TO GAAP (UNAUDITED)
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(in millions, except per share data) FY 2002 FY 2001
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GAAP Net Loss $(31.9) $(22.7)
Gain on Exchange of Micrel Stock -- (24.6)
Loss on Writedown of Micrel Stock 10.2 --
(Gain) Loss on Micrel Stock Sales 2.6 (0.7)
Impairment Charge -- 5.3
Effect of Accounting Change for Goodwill 12.6 2.1
Adjusted Net Loss $(6.5) $(40.6)
====== =======
GAAP EPS $(0.46) $(0.34)
Adjusted EPS $(0.09) $(0.61)
Diluted Shares 69.3 65.9
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BUSINESS OUTLOOK
"In 2003, we expect to continue to grow revenue, introduce new products, invest
in technology innovation and maintain our strong balance sheet. These have been
the hallmarks of the Company. In III-V, we expect our CyberLite LEDs to be a
strong growth driver for the Company as we ramp to production volume and add
new customers during the year. In addition, we are actively working with many
customers to design-in GAIN HBTs for wireless handsets and other applications.
In our CyberDisplay business, we plan to expand our portfolio of products,
especially color displays, in the coming months to gain additional traction in
emerging microdisplay markets including digital still cameras and personal
entertainment," said Fan.
"Looking at our guidance for the first quarter, despite traditional seasonality
in our end markets and the lingering political and economic uncertainty, we
expect top-line growth of more than five percent sequentially, with CyberLite
generating at least $1 million in revenue," concluded Fan.
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KOPIN/4
MICREL
In the second quarter of 2001, Micrel Semiconductor purchased Kendin
Communications ("Kendin") through a stock exchange. Kopin had previously
invested $3.4 million in Kendin. On the date of the exchange Micrel shares were
trading at $29.31 and Kopin recorded a non-cash gain on the exchange of $29.0
million. Since the exchange, Kopin recorded the investment in Micrel shares at
fair value with changes in value reflected in Accumulated Other Comprehensive
Income, included in Stockholders equity. On December 31, 2002, Micrel shares
were trading at $8.98. Based upon the Company's review, Kopin believes the
decline in the price of the Micrel shares is other than temporary and
accordingly recorded a non-cash write down in the fourth quarter of $10.2
million in the statement of operations. During the fourth quarter, Kopin sold
150,000 shares of Micrel, generating $1.9 million in proceeds and a loss of
$2.5 million based on the $29.31 per share carrying cost. At December 31, 2002
Kopin still owned approximately 500,000 shares of Micrel valued at
approximately $4.5 million, and since the exchange in 2001 Kopin has received
approximately $12 million in net proceeds from the sale of Micrel stock.
CUMULATIVE EFFECT IN CHANGE OF ACCOUNTING
The Company previously advised that in the first quarter of 2002 it had adopted
SFAS No. 142, which required a change in the method for evaluating the
potential impairment related to the carrying amount of goodwill. In conjunction
with this adoption of SFAS No. 142, the Company discontinued the amortization
of goodwill. In the second quarter of 2002, with the assistance of an
independent appraisal firm, we completed our evaluation of our goodwill and
recognized a non-recurring non-cash charge of $12.6 million, representing the
cumulative effect of a change in accounting principle resulting from the
implementation of SFAS No. 142. This charge is shown below income (loss) before
cumulative effect of accounting change and included in net loss.
FOURTH-QUARTER CONFERENCE CALL
Kopin will provide a live audio Webcast of its fourth-quarter conference call
for investors at 5:00 p.m. ET today, February 13, 2003. Investors who want to
hear the call should log on to the Investor Relations section of Kopin's Web
site, www.kopin.com, at least 15 minutes prior to the event's broadcast. The
call will be available on the Investor Relations section for one week. After
that, investors can access an archived version of the call on Kopin's Web site.
Kopin's fourth-quarter conference call also can be heard live by dialing
(719) 457-2630 five minutes prior to the call. A replay of the call will be
available from 8:00 p.m. ET Thursday, February 13 through 11:59 p.m. ET
Wednesday, February 19. To access the replay, dial (719) 457-0820 and refer
to confirmation code 431274.
ABOUT KOPIN (NASDAQ: KOPN)
Founded in 1984, Kopin is pioneering the use of the Wafer Engineering
Process(TM) and nanotechnology to manufacture components that make electronic
products as small, fast, bright, lightweight and inexpensive as possible. With
an intellectual property portfolio of more than 200 issued and pending patents,
Kopin supplies the world's largest electronics manufacturers and government
agencies with breakthrough semiconductor products. The Company's liquid-crystal
microdisplays, ultra-efficient transistors and high-brightness GaN LEDs enhance
the delivery and presentation of voice, video and data. Kopin technology is
currently used in one-third of the world's cell phones and nearly one-third of
the world's camcorders and is the microdisplay standard for the U.S. military.
For more information, please visit Kopin's Web site at www.kopin.com.
CyberDisplay, CyberLite, GAIN-HBT, NanoPockets and Wafer Engineering Process
are trademarks of Kopin Corporation.
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KOPIN/5
Statements in this news release about Kopin Corporation's anticipated annual
and first-quarter 2003 financial results, the potential success of new products
and other research and development efforts and certain other statements may be
considered "forward-looking" statements under the "Safe Harbor" provisions of
the Private Securities Litigation Reform Act of 1995. These statements involve
a number of risks and uncertainties that could materially affect future
results. Among these risk factors are general economic and business conditions
and growth in the flat panel display, LED and gallium arsenide integrated
circuit and materials industries, the impact of competitive products and
pricing, availability of third-party components, the successful volume
production of the CyberLite, the qualification of our CyberLite manufacturing
process by potential customers, availability of integrated circuit fabrication
facilities, cost and yields associated with production of the Company's
CyberDisplay imaging devices, CyberLite LEDs and HBT transistor wafers, loss of
significant customers, acceptance of the Company's products, success of new
product and other research and development efforts, continuation of strategic
relationships, performance of Skyworks Solutions under our agreement, the value
of shares of Micrel Semiconductor held by the Company, our ability to
accurately forecast revenue levels, and other risk factors and cautionary
statements listed from time to time in the Company's periodic reports and
registration statements filed with the Securities and Exchange Commission
including, but not limited to, the Company's Annual Report on Form 10-K for the
year ended December 31, 2001 and Form 10-Q for the quarterly period ended
September 28, 2002.
The Company's condensed consolidated statement of operations and balance sheet
are attached.
###
KOPIN/6
KOPIN CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
Three Months Ended Twelve Months Ended
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December 31, December 31, December 31, December 31,
2002 2001 2002 2001
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Revenues:
Product revenues $16,104,975 $14,795,532 $74,808,368 $50,256,712
Research and development revenues 391,456 650,819 1,992,751 1,663,610
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16,496,431 15,446,351 76,801,119 51,920,322
Expenses:
Cost of product revenues 12,115,303 14,930,840 57,553,577 62,368,663
Research and development 5,114,450 4,190,044 16,190,904 15,271,696
Selling, general and administrative 1,741,589 3,375,619 9,955,712 15,245,176
Other 55,500 488,221 265,850 771,387
Impairment charge - - - 5,341,784
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19,026,842 22,984,724 83,966,043 98,998,706
------------------------------------ ----------------------------------
Loss from operations (2,530,411) (7,538,373) (7,164,924) (47,078,384)
Other income and expense:
Interest and other income 1,554,233 1,287,497 3,424,981 25,733,103
Interest and other expense (13,935,155) (667,196) (14,551,282) (974,476)
------------------------------------ ----------------------------------
(12,380,922) 620,301 (11,126,301) 24,758,627
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Loss before minority interest in income of subsidiary (14,911,333) (6,918,072) (18,291,225) (22,319,757)
Minority interest in income of subsidiary (202,553) (143,305) (1,037,709) (393,631)
------------------------------------ ----------------------------------
Loss before cumulative effect of accounting change (15,113,886) (7,061,377) (19,328,934) (22,713,388)
Cumulative effect of accounting change - - (12,582,383) -
------------------------------------ ----------------------------------
Net loss $ (15,113,886) $ (7,061,377) $ (31,911,317) $ (22,713,388)
============== ============= ============== ==============
Loss before cumulative effect of accounting change per
share:
Basic $ (0.22) $ (0.10) $ (0.28) $ (0.34)
=========== ========== =========== ===========
Diluted $ (0.22) $ (0.10) $ (0.28) $ (0.34)
=========== ========== =========== ===========
Cumulative effect of accounting change per share:
Basic $ - $ - $ (0.18) $ -
=========== ========== =========== ===========
Diluted $ - $ - $ (0.18) $ -
=========== ========== =========== ===========
Net loss per share:
Basic $ (0.22) $ (0.10) $ (0.46) $ (0.34)
=========== =========== =========== ===========
Diluted $ (0.22) $ (0.10) $ (0.46) $ (0.34)
=========== =========== =========== ===========
Weighted average number of common shares outstanding:
Basic 69,385,537 68,580,036 69,317,695 65,946,964
=========== =========== =========== ===========
Diluted 69,385,537 68,580,036 69,317,695 65,946,964
=========== =========== =========== ===========
KOPIN/7
KOPIN CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEET
(UNAUDITED)
December 31, December 31,
2002 2001
------------------------------------------
ASSETS
Current assets:
Cash and marketable securities $ 117,991,312 $ 104,435,153
Accounts receivable, net 6,680,538 7,244,545
Inventory 4,773,333 8,713,740
Prepaid and other assets 1,118,944 3,769,400
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Total current assets 130,564,127 124,162,838
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Equipment and improvements, net 34,748,361 40,813,240
Other assets 8,773,040 24,943,792
Goodwill, net - 12,582,383
Intangible assets, net 480,866 1,146,716
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Total assets $ 174,566,394 $ 203,648,969
=========================================
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 7,827,958 $ 12,040,426
Accrued payroll and expenses 6,889,402 5,691,601
-----------------------------------------
Total current liabilities 14,717,360 17,732,027
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Minority interest 2,931,366 1,585,980
Stockholders' equity 156,917,668 184,330,962
-----------------------------------------
Total liabilities and stockholders' $ 174,566,394 $ 203,648,969
equity =========================================