Kopin Corporation · NASDAQ:KOPN
Kopin — Investor Presentation (November 2010)
29 slides from Kopin's investor presentation, Nov 22, 2010
Slide 1: Revolutionizing the way people see, hear, and communicate
revolutionizing the way people company overview 11/22/2010
Slide 2: Forward-looking Statements
Forward-looking Statements This presentation includes forward-looking statements within the meaning of the United States Private Securities Litigation Reform Act of 1995. These statements relate to our expected future financial and operating performance, growth in the markets in which our products a
Slide 3: The Kopin Mission
The Kopin Mission Our mission is to revolutionize the way people see, hear, and communicate.
Slide 4: Highlights
Highlights • Innovations – Original nanotechnology from MIT Lincoln Laboratory – Strong IPs – 200+ patents and increasing rapidly • Global leader in key product categories – Advanced Nanotransistor products for Smartphones – Revolutionary Systems for Defense, Industrial and Consumer Applications • D
Slide 5: III-V Product Group
III-V Product Group
Slide 6: The World is Changing
The World is Changing What won’t be Wireless?
Slide 7: Wireless is Fueled by GaAs
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
Slide 8: Where We Fit
Where We Fit Substratss axt Freiberger SUMITOMO ELECTRIC HitachiCable Empowering Energy & Communication Amplifiers / Modules SKYWORKS RFMD TriQuint SEMICONDUCTOR Mobile Devices NOKIA SAMSUNG hTC
Slide 9: Industry's No. 1 Market Share Leader and Growing
Industry’s No. 1 Market Share Leader and Growing Others 2010 Kopin Market Share 45% (a) As a percent of III-V revenues
Slide 10: GaAs HBT Content Increasing Rapidly
GaAs HBT Content Increasing Rapidly RF Power Amplifier Unit Forecast for Cellular Handset and Data Modem Market (in Billions) 0 1 2 3 4 5 23% CAGR 9% CAGR 2009 2010 2011 2012 2013 Growing Greater Than 2x Mobile Device Market = Solid Growth Story 4-6 PAs 3-5 PAs 2 PAs 1 PA Note: Includes assumptions
Slide 11: Market Trends and Kopin Strategy = Strong Revenue & Profit Growth
Market Trends and Kopin Strategy = Strong Revenue & Profit Growth (in Millions) Kopin III-V Revenue Forecast $120 $90 $60 $30 $0 20-25% CAGR 2009 2010 2011 2012 2013 Net Effect: Revenue Grows 20 -25% CAGR
Slide 12: III-V Comparable Valuation
III-V Comparable Valuation Company Ticker Price MC EV BV/ Share Rev 2011E EBITDA 2011E MC/Rev EV/ EBITDA Price/BV Semiconductor - Wireless and III-V Anadigics ANAD $ 5.97 389.4 302.0 $ 2.95 249.7 41.8 1.6 7.2 2.0 Avago AVGO $ 25.24 6,022.8 5,891.8 $ 5.58 2,268.7 676.6 2.7 8.7 4.5 AXT, Inc. AXTI $ 8.
Slide 13: Golden-i: Hands-Free Wireless HD Data On the Go
Golden-i: Hands-Free Wireless HD Data On the Go
Slide 14: Next Generation Device Requirements
Next Generation Device Requirements • High Definition Microdisplay • Optical module to Magnify the Image • Electronics – Processors, Driver electronics, Radio, etc. • Software – Operating System, Voice Recognition, etc. • Application Software • Proper Ergonomics Golden-i: Next-Gen Wireless Device
Slide 15: Step-by-Step Product Evolution
Step-by-Step Product Evolution 5 Information / Entertainment System Golden-i2 – Binocular, Consumer 4 Information System Golden-i – Monocular, Industrial 3 Optical Subsystem Gunsight, Eyewear 2 Optical Module Electronic Viewfinder 1 Component Microdisplay
Slide 16: Step 1 Started in 1992: Microdisplays
Step 1 Started in 1992 • Microdisplays – Same LCD Technology as Flat Panel TVs and Monitor Screens – Kopin’s Proprietary Nano Technology shrinks the screen to 1/1000 size – HD Color Screen less than 0.5” diagonal achieved Resolution, Density, and Cost Now Ideal for All Targeted Markets 16 see, hear
Slide 17: Step 2 Started in 1997: Consumer Optical Modules
Step 2 Started in 1997 • Consumer Optical Modules – Camcorders and Cameras – Total revenue > $300M, over 30M units sold – Sold to the Tier One Customers – Nikon, Panasonic, Samsung, Olympus, Sanyo, etc. We Built Excellent Low-Cost Optical Modules in Large Volume 17 see, hear and communicate
Slide 18: Step 3 Optical Subsystems/TWS
Step 3 Optical Subsystems/TWS • Gunsight Optical Engines – Over 100,000 units sold – Over $100M revenue – Raytheon, DRS, BAE • Displays and Modules for Eyewear – Over $20M revenue – Nikon, Zeiss, Vuzix, MyVu, etc We Built Rugged, Particle-Free Optical Subsystems 18 see, hear and communicate
Slide 19: Step 4 Game-Changer Golden-i
Step 4 Game-Changer GOLDEN.I • Hands-Free Headset with 15” SVGA color image – Intelligent Terminal for Cloud Computing – Processor and Operating System Software – Voice and Motion Control – Wireless-WiFi and BlueTooth • Industrial Market Focus • Great IP Protection – Hardware and Software Industrial
Slide 20: Step 5 Entertainment - Golden-i2
Step 5 Entertainment - Golden-i2 • Hands-Free Consumer Headset – Binocular – 3D HD – Wireless – Software • Reference Design Coming in Spring 2011 • Entertainment and Consumer Same Business Model as Golden-i 20 see, hear and communicate
Slide 21: Interface Solutions Comparable Valuation
Interface Solutions Comparable Valuation Company Ticker Price MC EV BV/ Share Rev 2011E EBITDA 2011E MC/Rev* EBITDA BV* EV/ Price/ Human Interface Solutions ARM Holdings ARMH $ 17.91 7,887.0 7,484.3 $ 3.12 667.4 263.1 11.8 28.5 5.7 eMagin EMAN $ 5.62 111.5 104.0 $ 0.65 24.6 5.2 4.5 20.2 8.6 Immersio
Slide 22: Financial Overview
Financial Overview
Slide 23: Income Statement Summary
Income Statement Summary ($ in millions except per share data) Q3 2010 Q3 2009 YTD Q3 2010 YTD Q3 2009 Total revenues $31.6 $32.0 $87.2 $81.7 Cost of product revenues 21.1 20.7 60.5 55.0 Gross Margin 32.3% 32.5% 28.1% 29.3% R&D 4.8 3.6 13.9 10.5 SG&A 3.9 3.5 11.79 10.5 Income from operations 1.8 4.3
Slide 24: % of Total Revenues by Category
% of Total Revenues by Category YTD 2010 ($87.2 Million) III-V 54.3% Military 30.4% R&D Commercial 3.1% 12.2% FY 2009 ($81.7 Million) Military 46.8% III-V 38.6% R&D Commercial 4.4% 10.3%
Slide 25: Balance Sheet Highlights
Balance Sheet Highlights ($ in millions) September 25,2010 Cash and marketable securities $110.5 A/R and inventory 39.5 Other current assets 2.9 PP&E 25.6 Other assets 7.5 Total assets $186.0 Current liabilities $ 19.3 Other current assets 0.9 Equity 161.5 Noncontrolling interest 4.3 Total liabiliti
Slide 26: Target Operating Model
Target Operating Model Revenue 100% Gross Margin 35-45% R&D 15-20% SG&A 12-14% Operating Income 8-12%
Slide 27: Overall Valuation Perspective
Overall Valuation Perspective • Kopin deserves higher multiple with higher Growth Rates than wireless chip manufacturers Growth Rates and ability move into bigger markets – Semi comps are older, slower growth companies with lower multiples • Kopin’s Voice Imaging systems business has solid financial
Slide 28: Sum of the Parts Analysis
Sum of the Parts Analysis Sum of the Parts Analysis November 18, 2010 Share price of Semiconductor segment: 54% revenue contribution times average MC/Rev multiple of comps of 2.2x (see slide #15) $2.10 Share price of Interface Solutions segment: 43% revenue contribution times average MC/Rev multiple
Slide 29: see, hear and communicate
see, hear and communicate