Annual net income for 2010 was $ 8.9 million as compared to $ 19.4 million in 2009.

 

Kopin, a supplier of microdisplays for mobile applications including smartphones, tablet PCs, military thermal weapons sights and wearable computers, has announced financial results for the three and 12 months ended December 25, 2010.

 

 “Paced by a strong year for our III-V product line, which increased more than 30 percent from 2009, we achieved total revenues of $120 million,” said Kopin President and CEO, John C.C. Fan. “The strong demand for smartphones expected in 2011, as well as the increasing complexity of the front-end components required for high voice and data speeds necessary to efficiently operate these devices, are significant trends that favour our proprietary III-V technology and world-class manufacturing expertise. Consequently, we expect 2011 to be another year of solid revenue growth for our III-V products.”

 

“Within our CyberDisplay portfolio, military display sales started the year slowly but finished strongly in the fourth quarter,” Fan said. “Our commercial display product line saw sales momentum throughout the year driven by the consumer electronics market.”

 

 “We made several significant strides in 2010 toward commercialization of Golden-i, our new voice-activated, hands-free, cloud computing and communications solution for the industrial market,” Fan continued.

 

“In the fourth quarter we announced a key partnership with Motorola Solutions, the world-leader in enterprise mobile computing, to jointly develop a ruggedized industrial-grade Golden-i product. By providing instant mobile access to digital information, Golden-i is a disruptive product we believe has the potential to set a new standard for enhanced operational efficiency and productivity in an industrial environment with an addressable market in the billions of dollars. The program remains on schedule.”

 

Fourth-Quarter Operating Results

 

Gross margin for the fourth quarter of 2010 grew to 34.6 % from 30.8 % of product revenues for the same period of 2009, reflecting an increase in sales of higher margin products in the 2010 period.

 

Net income was $4.7 million, or $0.07 per diluted share, for the fourth quarter of 2010, compared with $5.3 million, or $0.08 per diluted share, for same period of 2009. Fourth-quarter 2010 results include the receipt of $1.4 million of insurance proceeds and $0.6 million from the sale of patents the Company was no longer using.

 



 

Gross margin was 29.9 and 29.7 % of product revenues for the 12 months ended December 25, 2010, and December 26, 2009, respectively.

 

For the fiscal year ended December 25, 2010, Kopin reported net income of $8.9 million, or $0.13 per diluted share, compared with net income of $19.4 million, or $0.29 per diluted share, for the period ended December 26, 2009.

 



 

 

The year-over-year comparison of net income is affected by several items in the full-year 2010 and 2009 periods. 2010 results include gains of $0.8 million, compared with $6.3 million in 2009, on the sale of patents that the Company was no longer using. 2010 results also include the receipt of $1.8 million of insurance proceeds and $2.6 million from the sale of investments.

 

2009 results include a $1.2 million gain on the repayment of loans to KTC previously written-off; and $0.6 million representing the gain on remeasurement of Kopin's investment in KTC to its fair market value immediately prior to the purchase of the additional shares by the Company in 2009, partially offset by a $0.9 million expense from an impairment of certain marketable debt securities, which were deemed other-than-temporarily impaired.

 

For the year ended December 25, 2010 the Company generated $15.1 million of cash from operating activities and spent $17.2 million for capital expenditures and $6.7 million for the repurchase of stock. Cash and marketable securities totalled $111 million at December 25, 2010, compared with $114.5 million at December 26, 2009. The Company had no long-term debt.

 

Acquisition of Forth Dimension Displays

 

In January 2011, Kopin acquired Scotland-based Forth Dimension Displays Ltd. (FDD), a provider of all-digital, ultra-high-resolution, ferroelectric reflective microdisplays. FDD’s full-colour, world-leading image quality display technology is used extensively across a range of applications, including high-performance cinematography, training and simulation, 3D metrology and medical imaging. Total consideration was approximately $11 million in cash plus an earnout provision if certain revenue milestones are reached within one year of the acquisition date. Kopin expects the FDD acquisition to be accretive to its 2011 results of operations.

 

Business Outlook

 

“We expect another year of solid top-line growth for Kopin in 2011,” Fan said. “We expect continued strong growth in smartphones, which should fuel a good year for our III-V products. While we continue to expect the U.S. Army’s Thermal Weapons Sight program to contribute materially to our display revenue in 2011, we do have some reservations about the federal budget deficit impact.”

 

“We also expect our commercial display sales to grow. And perhaps most importantly, we expect to offer Golden-i development kits in the second quarter of 2011 to select customers and software application developers. They will provide feedback and develop application software for a ruggedized Golden-i product for general availability in the first half of 2012. For full-year 2011, we expect to continue to grow and generate total revenues in the range of $130 million to $140 million,” he concluded.

 

In conjunction with its fourth-quarter 2010 financial results, Kopin hosted a teleconference call for investors and analysts .

 

The call can be accessed as an archived audio webcast on the “Investors” section of the Kopin website, www.kopin.com.