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KOPIN CORP
KOPN - $82.50
Kopin (KOPN) is a leading manufacturer of gallium arsenide transistor products and miniature flat panel displays for wireless communications and digital imaging applications that enhance the delivery and presentation of video, voice, and data. Kopin makes gallium arsenide, or GaAs, semiconductor wafers, an alternative to silicon wafers that is used by makers of integrated circuits.
Companies such as Conexant Systems, Hewlett-Packard, and Siemens use the pricier but faster GaAs wafers to manufacture chips for wireless and fiber telecommunications products. Kopin also makes the tiny CyberDisplay brand of LCDs, which it sells to electronics manufacturers such as Motorola and Siemens for incorporation into digital phones, pagers, and video cameras. Kopin holds over 130 patents for technological breakthroughs in flat panel display and device wafer technology.
Telecommunications providers are using Kopin's HBT wafers for production of power amplifier circuits used in wireless digital phones, and gigabit circuits for fiber optic and Internet data transmission. Kopin?s CyberDisplay product family provides OEMs with a range of powerful, high quality display solutions for devices such as camcorders, digital cameras and next-generation Internet wireless handsets and Internet appliances.
Kopin?s revenue for the fourth quarter of 1999 increased 96 percent to a record $13.6 million. Fourth-quarter product revenue increased 119 percent to $13.0 million. Revenue from GaAs products was $11.1 million in the fourth quarter of 1999, 99 percent higher than the fourth quarter of 1998. For the year ended December 31, 1999, revenue was $38.7 million, an increase of 43 percent. Product revenue increased 56 percent in 1999 to a record $36.1 million. Revenue from gallium arsenide products grew 71 percent to $31.5 million.
In the fourth quarter, Kopin experienced continued sales growth for its HBT transistors, which are used to produce power amplifier circuits for CDMA, TDMA, and GSM digital cellular and PCS handsets, as well as circuits for broadband systems. During the fourth quarter, Kopin commenced volume shipments to Mitsubishi Electric Corp., which is now using Kopin's HBT transistors for its new GSM power amplifiers. This is important, demonstrating that KOPN HBT transistors are well suited for the GSM standard, as well as the CDMA standard. During the quarter, Kopin continued to expand its GaAs HBT capacity. The expansion involves the installation of six new production systems by the end of March 2000 that will quadruple the company's capacity to produce HBT?s.
Sales of Kopin's CyberDisplay grew substantially in the fourth quarter, driven primarily by orders from JVC, which is using the Company's CyberDisplay as the viewfinder in its CyberCam camcorder. In January 2000, Kopin announced that it had begun volume shipment of its CyberDisplay to Matsushita Electric Industrial Co. for use in Panasonic camcorders that Matsushita launched in Europe. As a result of this win, Kopin now has captured business with two of the world's top camcorder manufacturers.
On February 17, Kopin announced plans to double the production capacity of its CyberDisplay products to 200,000 units per month by July 2000. This marks the second major expansion of Kopin's display operations in the past 12 months, reflecting the strong demand for CyberDisplay products in camcorders, digital cameras, and other portable electronic devices. Recently announced CyberDisplay orders from JVC, Matsushita, and Mustek represent the types of growth opportunities that Kopin can realize in the camcorder and digital camera markets. Together, Matsushita and JVC represent over 40 percent of the world market for camcorder viewfinder displays, giving Kopin a global presence in this rapidly growing market.
Revenue at Kopin has increased from $16.4 million in 1997 to $38.7 million in 1999. Analysts, all six of whom have a ?buy? rating on KOPN shares, project sales growth of 100 percent annually through 2001. Earnings growth should average 50 percent annually for the next five years. Earnings are expected to hit $0.44 per share in 2000 and $0.93 in 2001. These estimates will likely be adjusted upward to $0.50 and $1.00, respectively, throughout the remainder of the year. The Stock Specialist?s twelve-month price target for Kopin stock is $125 per share.
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