Forward-looking Statements

Transcription

1 August, 2011

2 Forward-looking Statements This presentation includes forward-looking statements within the meaning of the United States Private Securities Litigation Reform Act of These statements relate to our expected future financial and operating performance, growth in the markets in which our products are sold, our market share for our products, and our significant customers. We may use words such as expects, anticipates, intends, plans, believes, could, seeks, estimates, and variations of such words and similar expressions in identifying forward-looking statements. In addition, any statements which refer to expectations, projections, our stock value multiple, the value of Golden-i products, or other characterizations of future events or circumstances are forward-looking statements. These statements are not guarantees of future performance and involve certain risks, uncertainties and assumptions which are difficult to predict. Actual outcomes and results may differ materially from what is expressed or forecasted in such forward-looking statements, whether as a result of new information, future events or otherwise. We refer you to the documents the Company files from time to time with Securities and Exchange Commission, and specifically the Risk Factors section of the Company s Form 10-K for the period ended December 25, 2010 and Form 10-Q for the three and six months ended June 25, We do not undertake to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. 2

3 Kopin Highlights Innovations Original nanotechnology from MIT Lincoln Laboratory Strong IPs 200+ patents and increasing rapidly Global leader in key product categories for Mobile Devices Advanced Nanotransistor products for Smartphones Revolutionary Imaging Systems for Defense, Industrial and Consumer Applications Drivers of Growth III-V : A Compounding Story -More Smart Phone Sales, More Chips per Phone, More Advanced Chips with Higher ASPs Imaging Systems : New Products Aimed at Billion $ Markets Evolving Sales Model :Key Component & Technology License as a Package Strong financial results Consistently Profitable, Operating Cash Flow Positive and Strong Financial Position (Cash and S/T investments = $99M, no debt) Q2 YoY revenue increase19% $14 million spent on Stock repurchase since

4 4 III-V Product Group

5 The World is Changing What won t be Wireless? 5

6 Wireless is Fueled by GaAs GaAs has firmly established itself as the technology of choice for RF front-end in applications such as cellular handsets and WLAN. Glen Riley, VP Commercial Foundry, TriQuint Semiconductor Longer Battery Life Smaller Footprint High Data Rate Superior Signal Strength 6

7 Where We Fit Substrates GaAs Transistor Wafers Power Amplifiers / Modules Mobile Devices 7

8 GaAs HBT Content Increasing Rapidly RF Power Amplifier Unit Forecast for Cellular Handset and Data Modem Market 23% CAGR 9% CAGR 2G 2.5G 3G 4G PA Note: Includes assumptions for Multi-Mode/Multi-Band and Converged Devices Source: Needham & Co., LLC and IDC (June 2010) 8

9 Market Trends and Kopin Strategy = Strong Revenues and Profit Growth 20-25% CAGR (in Millions) 9

10 Why Kopin is Succeeding Quality Highest Yields Proprietary In-Situ Monitoring Quick-Lot Technology Experience Innovation Performance Manufacturing Capacity Scalability Multiple Fabs

11 Industry Leading Quality Control Process control Every wafer Every run Real time Introduced in 2010, the Industry s only In-situ Monitoring 11

12 Manufacturing Capacity and Capability $16 million New Capacity Expansion in Customer Qualification Stage Largest, most advanced Epi Wafer Manufacturing Toolset in Industry Current investment sufficient capacity into 2012 Efficiencies continue to improve 6 Capacity in Thousands Year 12

13 Technology Increasing Front End Complexity EDGE Quad Band WiFi LTE / Wimax WCDMA Band 1 WCDMA Band 2 WCDMA Band 3 WCDMA Band 4 Technology Requirements Advanced HBTs= BiFET, BiHEMT Multimode Transceiver Baseband 13

14 the Results #1 Merchant Market Share Leader and Growing Supply Agreements with Industry Power Amplifier Leaders Skyworks Solutions (customer >16 years) RFMD (>10 years) TriQuint (>10 years) Kopin Wins Fourth Consecutive Supplier Award from Skyworks Solutions announced February 3, 2011 Note: Percentages based upon III-V revenues. 14

15 GaAs Transistor Wafer Supplier Ratings Kopin rated highly for lead time, technical support plus other factors Epiworks Hitachi Cable Kopin Sumitomo Chemical VPEC Key 5 = Very Good 4 = Good 3 = Average 2 = Poor 1 = Very Poor Company Ratings Industry Average Source: Strategy Analytics 2010 survey results Graph scale does not indicate sales volume 15

16 16 Display Products

17 Step-by-Step Product Evolution

18 Next Generation Mobile Device Requirements High Definition Microdisplay Optical module to Magnify the Image Electronics Processors, Driver Electronics, Radio, Motion Sensor, etc. Software Operating System, Voice Recognition, etc. Application Software Proper Ergonomics 18

19 Step 4 Game Changer World s First Hands-Free Computer Headset Intelligent Terminal for Cloud Computing 15 SVGA color image Processor and Operating System Software Noise Cancellation Voice and Motion Control Wireless-WiFi and Bluetooth Great IP Protection Over 20 Patents, issued and pending, for Hardware and Software 19

20 Step 4 Multiple Vertical Apps = Billion $ TAM Apps include: Distribution Manufacturing Medical Military Repair Security Full Environmental Temperature Range Industrial Certified~ Mil Std. 810 All Weather Operation 20

21 Step 4 Golden-i Business Model Kopin and Motorola Solutions Business Agreement Kopin Provides the Display, Optics and Operating Software Motorola Designs, Manufactures and Distributes Ruggedized Version Kopin and Motorola Jointly Engage Software App Developers Product Launch Schedule for 1 st Half 2012 Kopin Revenues = Sale of Optical Engine and License fee per unit for Operating Software and Know-how Commenced Shipping Software Developer Units to Select Customers in April,

22 Step 5 Entertainment Golden-i 2 Hands-Free Prosumer Headset Binocular 3D HD Wireless Software Entertainment and Consumer 22

23 Recent Events Acquisition of Forth Dimension Displays, inc Target for Super High Resolution and Performance Displays Adds High-end Cinematography Camera/ Training and Simulation Markets Enables Kopin to offer Either Transmissive or Reflective display technology $23.2 Million in Follow-On Orders for U.S. Army s Thermal Weapon Sight Program Golden-i Wins Best in Show Award at World Future Society s Annual Conference CLARUS Award Winner at MDB Capital s Bright Lights Conference

24 24 Financial Overview

25 % of Total Revenues by Category 2010 ($120.4 Million) FY 2009 ($114.7 Million) FY 2009 ($81.7 million) Military 39.9% III-V 45.6% Military 45.0% III V 38.6% III-V 40.5% R&D 1.6% Commercial 12.9% R&D 5.0% Commercial 9.5% 25

26 Income Statement Highlights ($ in millions except per share data) Q Q YTD Q YTD Q Total revenues $31.4 $30.2 $66.4 $55.6 Cost of product revenues Gross Margin 35.4% 25.0% 34.3% 25.7% R&D SG&A Income (loss) from operations.5 (0.7) 2.6 (0.7) Net income Income per share $0.01 $0.03 $0.04 $0.04 Weighted average shares o/s

27 Balance Sheet Highlights ($ in millions) Q2, 2011 Cash and marketable securities $99.3 A/R and inventory 39.3 Other current assets 2.8 PP&E 35.8 Other assets 14.8 Total assets $192.0 Current liabilities $17.5 Other Noncontrolling interest Equity Total liabilities and equity $193.6 Strong financial position high liquidity

28 Target Operating Model 28

29 Summary III-V Transistor Wafer Group Market Leader Client Diversity Revenue Stability 30%+ Year over Year Growth in 2010 MicroDisplay Product Group Market Leader Vertical Application Diversity Revenue Stability Solid Financial Results Strong Financial Strength Strong Intellectual Property Portfolio Strong in Technology and Manufacturing Golden-i Market Projections in Billions of Dollars 29

30 August, 2011