- 6 March 2006 -

Back in black: Kopin grows fourth quarter revenues 35% year-over-year

Kopin Corp., announced its financial results for the fourth quarter and twelve months ended December 31, 2005. The company has achieved record net income under GAAP of $11.7 m, for the for the 12 months ended December 31, 2005, compared with a net loss of $13.8 m in 2004.

Its fourth-quarter GAAP net income of $3.7 m compared with a net loss of $7.0 m, for the fourth quarter of 2004 and net income of $5.4 m, for the third quarter of 2005

Kopin's fourth-quarter revenue of $24.9 m compared with $18.5 m in the fourth quarter of 2004 and $25.4 m in the third quarter of 2005. III-V revenues of $13.5 m, compared with $8.6 m in the fourth quarter of 2004 and $10.8 m in the third quarter of 2005

"Kopin's record performance reflects the successful execution of our strategy over the past year," said Chairman and Chief Executive Officer John C.C. Fan. "From the start of 2005 we focused on transitioning to new, higher value products aimed at tier-one customers in young, technology-driven markets poised for exponential growth. We accomplished those goals in every respect, positioning Kopin for another profitable year in 2006."

Revenue from III-V products grew 12% for the twelve months ended December 31, 2005 to $42.7 m from $38.2 m for the comparable period in 2004. The increase was driven by strong demand for Kopin's HBTs, which are used for power amplifiers in cellphones and wireless networking products for WiFi and WiMax.

"The cell phone has become the utility for mobility," Dr. Fan said. "What the multi-tool knife is to the outdoorsman, the cell phone has become to a new generation of mobile professionals who want to surf the Web, text message their friends or watch a video. The greater functionality of new phones requires multiple power amplifiers to handle the added power requirements. With an approximately 80% share of the merchant HBT market, Kopin benefits from this trend because the move toward larger and more advanced power amplifiers increases the amount of our transistor content per phone."

The Company also has substantially completed the transfer of its CyberLite LED products to Asia as part of KoBrite Corp., a joint venture formed in 2005 with Asian partners. LED chip manufacturing has begun at KoBrite's fab in Dongguan City, Guangdong Province, China. The facility is expected to be running at full production later this year.

"We expect microdisplay revenue in the military, digital camera and video eyewear markets to begin ramping in the second quarter and to accelerate in the second half of the year. In our III-V business, the HBT growth we saw in 2005 should continue steadily on the strength of orders from all of our key circuit partners," Dr. Fan said. "We're excited about the prospects for this business in 2006 and beyond.

Kopin also has begun initial volume production of its new GAIN-HBT. These patented structures represent a new generation of HBT transistors, which provide reduced operating voltage, increased RF performance and greater temperature stability than the previous generation of products. Kopin expects initial design-ins of its GAIN HBTs to be integrated into power amplifier circuits for tens of millions of advanced cell phones this year.

Web: http://www.kopin.com