Release Date: August 08, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Kopin Corp (KOPN, Financial) received over $55 million in orders for 2024 and beyond, including new customers from the US and Europe, indicating an expanding revenue and customer base.
- The company reported $12.3 million in revenue for Q2 2024, with defense applications showing a year-over-year growth of 106% to $10.4 million.
- Incoming inspection rates at top customers improved to 97%, positively impacting product gross margins.
- Kopin Corp (KOPN) has a strong opportunity pipeline valued at over $500 million, with $350 million in the defense market.
- The company is making progress on its strategic initiatives, including the development of advanced display technologies for defense and consumer applications.
Negative Points
- Funded research and development revenues decreased by $2.7 million in Q2 2024 compared to Q2 2023 due to the completion of several programs.
- SG&A expenses increased to $7.3 million in Q2 2024 from $6.5 million in Q2 2023, primarily due to higher legal fees.
- The net loss for Q2 2024 was $5.9 million, although this was an improvement from the $8.2 million loss in Q2 2023.
- The consumer segment is expected to remain minimal throughout the year, with limited revenue contribution.
- The geopolitical issues in China and Korea have negatively impacted the 3D AOI market, which remains de minimis for Kopin Corp (KOPN).
Q & A Highlights
Q: Was the strong defense revenue growth in Q2 driven by specific programs or was it broad-based?
A: Michael Murray, President and CEO, explained that the growth was broad-based across the defense market, including thermal weapon programs, projectile thermal imagers, and eyepieces for rotary and fixed-wing orders. There is also increased interest from European companies and customers.
Q: How should we expect gross margins to trend for the rest of the year?
A: Richard Sneider, CFO, indicated that gross margins should continue to trend upwards. The improvement is due to better quality and lower rework costs, which have positively impacted margins.
Q: Can you provide an update on the IVAS strategy and any feedback from testing?
A: Michael Murray stated that they are working with partners like Wilcox Industries and the US Army to productize the IVAS technology. They expect production to begin in 2025, with immediate revenue potential as the technology integrates with existing soldier equipment.
Q: What is the status of the armored vehicle program and its potential for consumer applications?
A: Michael Murray noted that while the SEP 4 upgrade was canceled, Kopin's weapon sight program will continue. They have received interest from electric vehicle manufacturers for their automotive-qualified liquid crystal on silicon device, which could be used in consumer applications.
Q: What is the outlook for the 3D AOI market, and are there any new developments?
A: Michael Murray mentioned that geopolitical issues have impacted the 3D AOI market, but they expect a marginal rebound. They are also working on a new, lower-cost product to gain traction and see some uptick in Europe.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
