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27 April 2009


Kopin’s III-V revenues fall 37%, but margin boosted by military displays

For first-quarter 2009, Kopin Corp of Taunton, MA, USA, which makes III-V heterojunction bipolar transistor (HBT) epiwafers and CyberDisplay LCDs, has reported revenues of $21.5m, down 26% on both $29.1m last quarter and $29.2m a year ago.

III-V product revenues were $6.9m, down 37% on $10.9m last quarter and 43% on $12.1m a year ago. This is attributed to the drop in wireless handset sales and limited sales visibility, which prompted aggressive inventory reduction by customers.

CyberDisplay revenues were $14.6m, down 20% on $18.2m last quarter and 14% on $17.1m a year ago. Military display revenues rose by $4m year-on-year. However, revenues from video eyewear displays and consumer electronics fell by, respectively, $1.3m (due to the impact of the economic recession) and $3.9m (due to Kopin’s strategy to transition from lower-margin camcorder and digital camera viewfinders toward military and industrial applications and higher-margin consumer electronics).

“We have successfully navigated what we anticipate will be the most challenging quarter of 2009,” says president & CEO Dr John C.C. Fan. “While the macroeconomic environment contributed to lower overall top-line results in the first quarter, revenue from military display products continued to climb,” he adds. “CyberDisplay revenues from military applications, which grew approximately 57% over the first quarter of 2008, were driven primarily by our participation in the US Army’s Thermal Weapon Sight programs. We expect these programs to continue to ramp production in 2009.”

Reflecting the increased sales of displays for military applications, gross margin has risen from 25% a year ago and 27.8% last quarter to 29%.

Including a $2.6m gain from the sale of patents that are no longer used, net income was $1.9m, up from $1.8m last quarter and $1m a year ago. During the quarter, cash and marketable securities rose by $4m to $104.1m. With no long-term debt, the firm repurchased 481,824 shares for about $887,000 (as part of its plan - announced in December - to repurchase up to $15m of common stock).

For full-year 2009, Kopin expects revenue of $90-110m (down on 2008’s $114.8m, though on a par with 2007’s $98.1m). Although the economic slowdown is expected to result in lower revenues from commercial and industrial products, the firm expects its military display revenues to grow in 2009.

“While this deep economic recession presents unique challenges, we believe that our unyielding commitment to technology innovation and new product development, coupled with our strong financial position, will enable us to extend our leadership in core markets and broaden our reach into new applications,” says Fan.

See related item:

Kopin grows profit in Q4 despite 8% drop in III-Vs revenues

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