Kopin Corp (KOPN) 2022 Q3 法說會逐字稿

Good day, ladies and gentlemen, and welcome to the third quarter Kopin Third Quarter 2022 Earnings Call. Today's conference is being recorded. At this time, I'd like to turn the conference over to Richard Sneider. Please go ahead.

女士們先生們，美好的一天，歡迎來到 Kopin 2022 年第三季度財報電話會議。今天的會議正在錄製中。現在，我想把會議轉交給理查德·斯奈德。請繼續。

Thank you, operator. Welcome, everyone, and thank you for joining us this morning. John will begin today's call with a brief discussion of his new role with Kopin, and then he'll introduce Michael Murray, our new CEO, who will discuss the strategy for Kopin and our progress in the third quarter. I'll review the third quarter of 2022 results at a high level. And after concluding remarks from Michael, we'll be happy to take your questions. I would like to remind everyone that during today's call taking place on Tuesday, November 1, 2022, we will be making forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. These statements are based on the company's current expectations, projections, beliefs and estimates and are subject to a number of risks and uncertainties that could cause actual results to differ materially from those forward-looking statements. Potential risks include, but not limited to, demand for our products, operating results of our subsidiaries, market conditions and other factors discussed in our most recent annual report on Form 10-K and other documents filed with the Securities and Exchange Commission. The company undertakes no obligation to update the forward-looking statements made during today's call. And with that, I'll turn the call over to John.

謝謝你，運營商。歡迎大家，感謝您今天早上加入我們。 John 將在今天的電話會議開始時簡要討論他在 Kopin 的新角色，然後他將介紹我們的新任首席執行官 Michael Murray，他將討論 Kopin 的戰略和我們在第三季度的進展。我將在高水平上回顧 2022 年第三季度的結果。在 Michael 結束髮言後，我們很樂意回答您的問題。我想提醒大家，在今天 2022 年 11 月 1 日星期二舉行的電話會議上，我們將根據 1995 年《私人證券訴訟改革法案》的定義做出前瞻性陳述。這些陳述基於公司當前的預期，預測、信念和估計，並受到許多風險和不確定性的影響，這些風險和不確定性可能導致實際結果與這些前瞻性陳述存在重大差異。潛在風險包括但不限於對我們產品的需求、我們子公司的經營業績、市場狀況以及我們最近向美國證券交易委員會提交的 10-K 表格年度報告和其他文件中討論的其他因素。公司不承擔更新今天電話會議中所作的前瞻性陳述的義務。有了這個，我會把電話轉給約翰。

Good morning, and thank you all for joining us to discuss our third quarter fiscal 2022 operating results. I'm calling in from Asia as I'm meeting with our OLED partners. Hopefully, this call is clear to you. I'm delighted to and excited to introduce Michael Murray as Kopin's new CEO. I believe Michael has experience to successfully lead Kopin to its next stage of stage of growth. I will remain Chairman of Kopin, and we'll work closely with Michael on this important transition while continue to focus on the strategy and scientific matters, especially related to AR and VR. I will now turn the call over to Michael.

早上好，感謝大家加入我們討論我們 2022 財年第三季度的經營業績。我正在與我們的 OLED 合作夥伴會面時從亞洲打來電話。希望您清楚這個電話。我很高興也很興奮地介紹 Michael Murray 成為 Kopin 的新任首席執行官。我相信 Michael 擁有成功帶領 Kopin 進入下一個成長階段的經驗。我將繼續擔任 Kopin 的董事長，我們將在這一重要的過渡期與 Michael 密切合作，同時繼續專注於戰略和科學事務，尤其是與 AR 和 VR 相關的事務。我現在將把電話轉給邁克爾。

Thanks, John. Good morning, everyone. I also hope you can hear me clearly as I'm calling in from Europe, where I'm meeting with current and potential customers as well as some partners. First, I'd like to take a moment to thank John, the Kopin Board and the talented and hard-working folks of Kopin for their warm welcome to the company. John has led our company through many business cycles and growth over the past 35-plus years, and we're fortunate to have him remain as Chairman of the Board and a critical visionary thought leader and partner in our technical strategy as I lead the company into the next stage of growth. I decided to join Kopin due to the company's unique culture of innovation, technical curiosity and a rich blend of consumer, industrial and military opportunities, which closely aligns with my background and interest. I also believe that I bring a more systematic approach to business development, product commercialization and program management while still facilitating the culture of technical curiosity and freedom of experimentation, which is core to at the Kopin culture. With that said, we'll turn to the third quarter results.

謝謝，約翰。大家，早安。我也希望您能清楚地聽到我從歐洲打來的電話，我正在那裡會見現有和潛在客戶以及一些合作夥伴。首先，我想花點時間感謝約翰、Kopin 董事會和 Kopin 才華橫溢、勤奮工作的員工對公司的熱情歡迎。在過去的 35 多年裡，John 帶領我們的公司經歷了許多商業周期和發展，我們很幸運他能繼續擔任董事會主席，並且在我領導公司的過程中成為我們技術戰略的重要遠見思想領袖和合作夥伴進入下一個成長階段。由於公司獨特的創新文化、技術好奇心以及消費者、工業和軍事機會的豐富融合，我決定加入 Kopin，這與我的背景和興趣密切相關。我還相信，我為業務開發、產品商業化和項目管理帶來了更系統的方法，同時仍然促進技術好奇心和實驗自由的文化，這是 Kopin 文化的核心。話雖如此，我們將轉向第三季度的業績。

We had a good quarter. The total revenue is up 23% over the third quarter of last year, our third consecutive quarter of sequential growth. Top line was driven by 50% year-over-year growth in product revenue. Interestingly, our defense and consumer revenues were very strong in third quarter of 2022 with 115% and 76% year-over-year growth, respectively. The growth in these segments was partially offset, however, by a 37% year-over-year decline in our industrial revenues. Now while the supply chain issues appear to be lessening, we continue to experience challenges, one of which resulted, unfortunately, in a warranty issue within the quarter, which we have since addressed and we are hopeful that the $1 million charge will be the last related to the specific situation. Currently, the supply chain cadence appears to be improving, though we do continue to experience intermittent challenges from time to time. Importantly, we are on track for growth in the second half of the year to exceed the first half as promised. And as a result, the fifth consecutive year Kopin will achieve year-over-year growth. And I think this is a good segue to discuss our outlook.

我們有一個很好的季度。總收入比去年第三季度增長 23%，這是我們連續第三個季度實現環比增長。產品收入同比增長 50% 推動了收入增長。有趣的是，我們的國防和消費者收入在 2022 年第三季度非常強勁，同比分別增長 115% 和 76%。然而，這些細分市場的增長被我們的工業收入同比下降 37% 部分抵消了。現在，雖然供應鏈問題似乎有所減輕，但我們繼續面臨挑戰，不幸的是，其中一個導致本季度內出現保修問題，我們已經解決了這個問題，我們希望 100 萬美元的費用將是最後一次與具體情況有關。目前，供應鏈節奏似乎正在改善，儘管我們確實不時繼續遇到間歇性挑戰。重要的是，我們有望在今年下半年實現超過承諾的上半年增長。因此，Kopin 將連續第五年實現同比增長。我認為這是討論我們前景的一個很好的轉折點。

Beginning in Q4 and throughout 2023, my focus will be driving on yield improvements and achieving on-time in full deliveries while identifying opportunities to reduce costs. We expect these steps to result in improved margins and cash flow. I also see significant revenue opportunities in 2023. As an example, our AR and VR market is an exciting market in which Kopin is well positioned for growth. We are working hard to develop and further develop the technology required to mature this market. For example, we are the world's largest provider of this technology and the world's largest customers demand displays with higher brightness at lower power and thinner sizes. Again, as a reminder, Kopin is the world leader in supplying this technology. Other emerging markets for AR and VR, such as health care is still nascent. However, we do see adoption rates increasing in these markets, which will also drive higher growth in 2023. Lastly, our military and defense business has significant order cover heading into 2023. And Furthermore, on recent customer visits, I clearly saw and heard how much they value Kopin's vast display capabilities, our swap C value and the unique ability to offer complex integrated optical display assemblies.

從第 4 季度開始到 2023 年全年，我的工作重點將是提高產量並實現按時全面交付，同時尋找降低成本的機會。我們預計這些措施將提高利潤率和現金流。我還看到了 2023 年的重大收入機會。例如，我們的 AR 和 VR 市場是一個令人興奮的市場，Kopin 在其中處於有利的增長位置。我們正在努力開發和進一步開發成熟該市場所需的技術。例如，我們是世界上最大的這項技術供應商，而世界上最大的客戶要求顯示器具有更高的亮度、更低的功耗和更薄的尺寸。再次提醒一下，Kopin 是提供這項技術的世界領先者。醫療保健等 AR 和 VR 的其他新興市場仍處於初期階段。但是，我們確實看到這些市場的採用率在增加，這也將在 2023 年推動更高的增長。最後，我們的軍事和國防業務在進入 2023 年之前有大量訂單。此外，在最近的客戶訪問中，我清楚地看到和聽到瞭如何他們非常看重 Kopin 強大的顯示能力、我們的 swap C 價值以及提供複雜集成光學顯示組件的獨特能力。

The growing global concerns surrounding the war in Ukraine have generated further opportunities for Kopin to expand our customer base and support our current customers with new international variants of our products. Specifically, the recently announced $3 million initial production award is a great example of this. We see this order in similar potential deals like this as exciting new opportunities to expand our defense business. My trip to Europe this week directly supports that global defense business and opportunity level. Before I turn the call over to Rich, however, to review our Q3 financials in more detail, I did want to make one comment on our financial position. The $900,000 raised from the ATM this past quarter was related to the sale announced actually in Q2 before I joined Kopin, which was completed in Q3. I'm confident that the steps I've outlined, we have the financial and contracting strategies. These things will help us drop increased profits to the bottom line. So Rich, over to you.

全球對烏克蘭戰爭的擔憂日益加劇，這為 Kopin 帶來了更多機會，可以擴大我們的客戶群，並通過我們產品的新國際版本支持我們現有的客戶。具體來說，最近宣布的 300 萬美元初始製作獎就是一個很好的例子。我們將類似的潛在交易中的此訂單視為擴展我們國防業務的令人興奮的新機會。我本週的歐洲之行直接支持了全球國防業務和機會水平。然而，在我將電話轉給 Rich 以更詳細地審查我們第三季度的財務狀況之前，我確實想對我們的財務狀況發表評論。上個季度從 ATM 籌集的 900,000 美元與我加入 Kopin 之前第二季度實際宣布的銷售有關，該銷售已於第三季度完成。我相信我概述的步驟，我們有財務和合同策略。這些東西將幫助我們將增加的利潤降到底線。如此豐富，交給你了。

Thank you, Michael. Turning to our financial results. Product revenues for the third quarter ended September 24, 2022, were $9.9 million compared with $6.6 million for the third quarter ended September 25, 2021, a 50% increase year-over-year. The increase in product revenues were driven by a 115% increase in defense revenues and a 76% increase in consumer revenues. These were partially offset by a 37% decline in industrial revenues. Funded research and development revenues were $3.4 million for the third quarter of '22 compared with $4.1 million for the third quarter of 2021, an 18% decline.

謝謝你，邁克爾。轉向我們的財務業績。截至 2022 年 9 月 24 日的第三季度產品收入為 990 萬美元，而截至 2021 年 9 月 25 日的第三季度為 660 萬美元，同比增長 50%。產品收入的增長是由國防收入增長 115% 和消費者收入增長 76% 推動的。這些被工業收入下降 37% 部分抵消。 22 年第三季度的資助研發收入為 340 萬美元，而 2021 年第三季度為 410 萬美元，下降了 18%。

The decline in funded research development programs is due to transitioning programs into production and billings from subcontractors. Total revenues from Q3 2022 were $13.4 million versus $10.9 million for the prior year and overall 23% increase year-over-year. Cost of goods sold for the third quarter of 2022 was $8 million or 81% of product revenues compared with $5.1 million or 78% for the third quarter of last year. The increase in cost of product revenues as a percent of net product revenues for the 3 months ended September 25, 2022, as compared to the prior year was primarily due to a $1 million warranty charge partially related to the quality issues from a vendor that Michael discussed.

資助的研究開發計劃的減少是由於將計劃轉變為生產和分包商的賬單。 2022 年第三季度的總收入為 1340 萬美元，而去年同期為 1090 萬美元，總體同比增長 23%。 2022 年第三季度的商品銷售成本為 800 萬美元，佔產品收入的 81%，而去年第三季度為 510 萬美元，佔產品收入的 78%。與上一年相比，截至 2022 年 9 月 25 日的三個月，產品收入成本佔產品淨收入的百分比有所增加，這主要是由於 100 萬美元的保修費用部分與邁克爾認為的供應商的質量問題有關討論過。

R&D expenses in the third quarter of 2022 were $3.4 million compared with $3.8 million for the third quarter of 2021. The decrease in 2022 third quarter R&D expense as compared to the prior year was equally split between internal R&D and customer-funded R&D activities. SG&A expenses were $4.3 million in the third quarter of 2022 compared to $4 million in the third quarter of 2021. SG&A increases for the 3 months ended September 24, 2022, as compared to 3 months ended September 25, 2021, were primarily due to an increase in compensation and professional fees, which were partially offset by lower stock-based compensation.

2022 年第三季度的研發費用為 340 萬美元，而 2021 年第三季度為 380 萬美元。與去年同期相比，2022 年第三季度研發費用的減少在內部研發和客戶資助的研發活動之間平分秋色。 2022 年第三季度的 SG&A 費用為 430 萬美元，而 2021 年第三季度為 400 萬美元。與截至 2021 年 9 月 25 日的三個月相比，SG&A 的增加主要是由於薪酬和專業費用的增加，部分被較低的股票薪酬所抵消。

Other income and expense was an expense of approximately $2.1 million for the third quarter of 2022 compared with an expense of $51,000 for the third quarter of '21. In the third quarter of 2022, we recorded a $2 million noncash impairment charge related to an investment in Asia. During the 3 months ended September 24, 2022, we recorded $112,000 of foreign currency losses as compared to $29,000 of foreign currency losses for the 3 months ended September 25, 2021. Turning to the bottom line. The net loss out Coke for the third quarter was approximately $4.5 million or $0.05 per share compared with $2.1 million or $0.02 per share for the third quarter of '21. Net cash used in operating activities for the 9 months ended September 24, 2022, was approximately $15.6 million.

2022 年第三季度的其他收入和支出約為 210 萬美元，而 2021 年第三季度的支出為 51,000 美元。 2022 年第三季度，我們記錄了與亞洲投資相關的 200 萬美元非現金減值費用。在截至 2022 年 9 月 24 日的三個月中，我們錄得 112,000 美元的外幣損失，而截至 2021 年 9 月 25 日的三個月中，我們錄得 29,000 美元的外幣損失。轉向底線。可口可樂第三季度淨虧損約為 450 萬美元或每股 0.05 美元，而 2021 年第三季度為 210 萬美元或每股 0.02 美元。截至 2022 年 9 月 24 日止的 9 個月，經營活動使用的現金淨額約為 1560 萬美元。

Kopin's cash and marketable securities were approximately $15 million at September 24 as compared to 29 at December 25, 2021. We have no long-term debt. Third quarter amounts for depreciation and stock comp expense are attached in the table to the Q3 2022 press release. The amounts discussed above our current are based on current estimates, and listeners should review our Form 10-K for the third quarter 2022 for any possible changes and, of course, additional disclosure quarter and year. And with that, I'll turn the call back over to Michael for closing remarks, and then we'll take your questions.

截至 9 月 24 日，Kopin 的現金和有價證券約為 1500 萬美元，而 2021 年 12 月 25 日為 29 美元。我們沒有長期債務。第三季度折舊和股票補償費用的金額附在 2022 年第三季度新聞稿的表格中。我們當前討論的金額是基於當前的估計，聽眾應該查看我們 2022 年第三季度的 10-K 表格，了解任何可能的變化，當然還有額外的季度和年度披露。有了這個，我會把電話轉回給邁克爾作結束語，然後我們會回答你的問題。

Thanks very much, Rich. Ultimately, this quarter was a reflection of Kopin's resilience, hard work and dedication to manage through global supply chain issues, the remnants hopefully of COVID and deliver a solid result. We remain cautiously optimistic that we've identified and have mitigation plans for us to play chain challenges, and we expect to have a good fourth quarter. Now as we look forward, we are excited for the future and focused on pursuing an ambitious strategic growth plan while not losing sight of the current macro uncertainties. We remain optimistic and ever focused on the vision that has guided us from the beginning to be a company where imagination and experimentation seed innovation and invention and that invention ignites innovation. This innovation is why customers have partnered with us for the past 35 years and it's core of all the things that we do and achieve. Our goal now is to pare this innovation with a renewed focus of operational excellence which will benefit our customers, our partners, employees and our shareholders. So for me to you and Olive Kopin, thank you very much for your interest in Kopin, and we'll now be happy to answer any questions that you may have. Operator?

非常感謝，里奇。最終，本季度反映了 Kopin 的韌性、辛勤工作和致力於管理全球供應鏈問題的能力，以及 COVID 的遺留問題，並取得了可觀的成果。我們仍然謹慎樂觀地認為，我們已經確定並製定了應對連鎖挑戰的緩解計劃，我們預計第四季度會有一個良好的表現。現在，當我們展望未來時，我們對未來感到興奮，並專注於追求雄心勃勃的戰略增長計劃，同時不會忽視當前的宏觀不確定性。我們保持樂觀，並始終專注於從一開始就引導我們成為一家想像力和實驗種子創新和發明的公司的願景，而發明又點燃了創新。這種創新是客戶在過去 35 年中與我們合作的原因，也是我們所做和實現的所有事情的核心。我們現在的目標是將這一創新與重新關注卓越運營相結合，這將使我們的客戶、合作夥伴、員工和股東受益。因此，對於您和 Olive Kopin，非常感謝您對 Kopin 的關注，我們現在很樂意回答您可能提出的任何問題。操作員？

Thank you .(Operator Instructions) We'll take our first question from Glenn Mattson with Ladenburg.

謝謝。（操作員說明）我們將與 Ladenburg 一起接受 Glenn Mattson 的第一個問題。

Michael, first one for you. Interested given your background and history and everything, you talked a little bit about commercializing some of the great innovation that exists inside of Kopin. Can you just balance like how you intend to do that kind of thing in light of -- especially like in spaces like commercial -- I'm sorry, consumer where maybe like the AR and VR market is maybe still emerging or nyc, as you mentioned. Some color on that would be great.

邁克爾，第一個給你。考慮到你的背景和歷史以及一切，你很感興趣，你談到了將 Kopin 內部存在的一些偉大創新商業化的問題。你能否根據你打算如何做這種事情來平衡 - 特別是在商業領域 - 對不起，消費者可能像 AR 和 VR 市場可能仍在新興或紐約，就像你一樣提及。上面的一些顏色會很棒。

Sure. Glenn, I think I got that. Yes. Great question. So I think there's multiple strategies at play, Glenn. When you think about consumer and volume and display markets, Dr. Fan has been working very hard in China on that strategy with partnerships and exciting opportunities that we have there. When we look at industrial and enterprise technologies, that's more of a licensing model that we already have in place and really taking latent IP and IP that we can take to the market and monetizing it, and we'll do more of that in the future because it's a great model for us and very profitable. And then when we think about defense business, I think there's opportunities there to use more of our technologies in the defense market.

當然。格倫，我想我明白了。是的。很好的問題。所以我認為有多種策略在起作用，格倫。當你想到消費者、銷量和展示市場時，范博士一直在中國通過合作夥伴關係和我們在那裡擁有的令人興奮的機會，在該戰略上非常努力地工作。當我們審視工業和企業技術時，這更多的是我們已經建立的許可模式，真正將潛在的知識產權和我們可以推向市場並從中獲利的知識產權，我們將在未來做更多的事情因為這對我們來說是一個很好的模式，而且非常有利可圖。然後當我們考慮國防業務時，我認為有機會在國防市場上使用更多我們的技術。

And one of the things that I've learned and will bring to Kopin is how to move up the value stack line. And what I mean by that is our customers want us to provide them more capability. defense companies these days don't want to necessarily do everything internally. And our biggest customers want us to do more. So that, I think, is the way I would answer the question is for our mutual fund business, which is our defense business that pays the bills, we're going to do more for our customers and monetize more of their system, move up the value stream and stack with them because they want us to, and we'll monetize that with us. On the industrial front, we'll continue to do our IP licensing and expand upon that business. And then Dr. Fan is working on more of the strategy around how to move forward with higher volume OLED business with our partners, customers and strategies in China. So those are the 3 aspects of our strategy that we're moving forward with and we will refine more in the next month or 2 as we have our strategic plan updates.

我學到並將帶給 Kopin 的其中一件事就是如何提升價值堆棧線。我的意思是我們的客戶希望我們為他們提供更多功能。現在的國防公司並不一定要在內部做所有事情。我們最大的客戶希望我們做得更多。所以，我想，我要回答這個問題的方式是我們的共同基金業務，這是我們支付賬單的國防業務，我們將為我們的客戶做更多的事情，並將他們的系統更多地貨幣化，向上移動價值流並與他們一起堆疊，因為他們希望我們這樣做，我們將與我們一起將其貨幣化。在工業方面，我們將繼續進行知識產權許可並擴大該業務。然後范博士正在製定更多戰略，圍繞如何與我們在中國的合作夥伴、客戶和戰略一起推進更高容量的 OLED 業務。因此，這些是我們正在推進的戰略的 3 個方面，我們將在下個月或 2 個月內進一步完善我們的戰略計劃更新。

Great. And the next one, I don't know if it's better for you, Mike or for Rich. But can you give us a sense on the defense side, some new programs have kind of emerged more recently, what stage you are in terms of low rate initial production versus full scale and on some of the existing ones that have been around for a while, can you give us a sense of like the runway as we start to kind of think about a little more about 2023 and the outlook as we push out a little bit.

偉大的。下一個，我不知道它對你、Mike 還是對 Rich 更好。但是你能告訴我們防禦方面的情況嗎，最近出現了一些新項目，你在低速初始生產與全面生產以及一些已經存在一段時間的現有項目方面處於什麼階段，當我們開始稍微考慮 2023 年和展望時，你能給我們一種像跑道的感覺嗎？

I was just going to answer with I think folks are familiar with the FWSI program. I think that's still got a lot of legs to it, and we're in production with that and will be for quite some time, I believe. There are other offshoot programs with that, that I don't have permission to state yet, but they're more on the international side of things. That's just coming into LRIP or low rate initial production. We have 3 or 4 other defense programs that are just hitting early-stage productions that we're excited about. So when you think about next year for us, we have a good blend of existing order book. And I think this is to answer the question more succinctly, we have a great order book cover for next year for our defense business, which is up, what was it, 115%, roughly speaking. So we have that rolling into next year, and we also have some new programs with Tier 1 customers that are just coming online. So it's an exciting place to be. Rich, do you want to add any color to that?

我只是想回答我認為人們熟悉 FWSI 程序。我認為它仍然有很多優勢，我相信我們正在製作它並且會持續相當長的一段時間。還有其他分支程序，我還沒有權限聲明，但它們更多地是在國際方面。那隻是進入 LRIP 或低速率初始生產。我們還有 3 或 4 個其他防禦計劃，它們剛剛達到我們很興奮的早期產品。因此，當您為我們考慮明年時，我們可以很好地融合現有訂單。我認為這是為了更簡潔地回答這個問題，我們的國防業務明年有一個很好的訂單封面，粗略地說，它是什麼，115%。因此，我們將在明年推出，我們還有一些與 1 級客戶一起上線的新計劃。所以這是一個令人興奮的地方。 Rich，你想給它添加任何顏色嗎？

No, I think that’s exactly what I was going to say, we have a very solid base. And as we've talked about with a common helmet program for helicopter pilots, the international markets, a number of the other programs that have gone into low rate, we have excellent growth potentials on top of those. Great.

不，我想這正是我要說的，我們有一個非常堅實的基礎。正如我們談到的直升機飛行員通用頭盔計劃、國際市場以及其他一些已經進入低利率的計劃，除此之外，我們還有極好的增長潛力。偉大的。

(Operator Instructions) We'll take our next question from Kevin Dede with H.C. Wainwright.

（操作員說明）我們將與 H.C. 一起接受 Kevin Dede 的下一個問題。溫賴特。

Mike, Rich, John, thanks for dialing in from so far away. Mike, first, just welcome to the new role. It's great to hear from you, and apologies for not having to be able to touch space earlier. I'm curious, though, you mentioned a systematic approach. And I'm wondering if you could characterize that for us. What did you see when you walked in the door and started working on things, peeling the onion back, what do you think can change? How detailed will your oversight be on that type of thing on those types of things? And then more specifically, what do you think you can do to improve yields as you've spoken to?

Mike、Rich、John，感謝您從這麼遠的地方撥入。邁克，首先，歡迎來到這個新角色。很高興收到你的來信，並為沒能更早接觸太空而道歉。不過，我很好奇，您提到了一種系統的方法。我想知道你是否可以為我們描述一下。當你走進門開始著手工作，把洋蔥剝回來時，你看到了什麼，你認為可以改變什麼？你對那些類型的事情的監督有多詳細？然後更具體地說，你認為你可以做些什麼來提高你所說的產量？

Sure. Great question, Kevin. So one of the things that I've learned in my career is that process does not stifle innovation if done properly. Innovation can exist and flourish through process and what have you. So I think one of the things from a systematic approach is putting in an approach for innovation that still allows for free thinking, preform experimentation and then monetizing that freeform experimentation into innovation. That's the process. Keeping the great things about Kopin, which is the MIT type of culture of innovation while making it monetizable and profitable, that's the systematic approach that I'm going to bring. I learned that Analog Devices, a very innovative company, still full of great ideas and wonderful engineering capabilities, but they're able to monetize it very, very well. that's the type of systematic approach that I'm speaking of.

當然。好問題，凱文。因此，我在職業生涯中學到的一件事是，如果處理得當，流程不會扼殺創新。創新可以通過過程和你擁有的東西存在並蓬勃發展。因此，我認為系統方法的其中一件事是採用一種創新方法，該方法仍然允許自由思考、預成型實驗，然後將自由形式的實驗貨幣化為創新。這就是過程。保留 Kopin 的優點，這是 MIT 類型的創新文化，同時使其可貨幣化和盈利，這就是我要帶來的系統方法。我了解到 Analog Devices 是一家非常具有創新精神的公司，仍然充滿了偉大的想法和出色的工程能力，但他們能夠非常非常好地將其貨幣化。這就是我所說的那種系統方法。

Furthermore, we're embarking upon a revisit of our strategic plan this month as well as a more robust budgeting process, which I think is important for the company. And then from there, we're going to look at the programmatic capabilities of the company in terms of running programs and making sure that we're delivering on time in full to our customer base. So that's how I look at more of a systematic approach. And while we put that in place, we don't want to hinder any of our innovation or invention along the way. So that's how I answer that question. Kevin, did I answer it fully for you?

此外，我們將在本月重新審視我們的戰略計劃以及更強大的預算流程，我認為這對公司很重要。然後從那裡開始，我們將研究公司在運行程序方面的程序化能力，並確保我們按時完全交付給我們的客戶群。所以這就是我如何看待更多的系統方法。雖然我們將其落實到位，但我們不想在此過程中阻礙我們的任何創新或發明。所以這就是我回答這個問題的方式。凱文，我為你完整回答了嗎？

Yes. That helps a lot. Maybe you could get a little more granular as you discuss where you see yields and how you'll work to improve those.

是的。這很有幫助。在討論您看到收益的地方以及您將如何提高這些收益時，您可能會更細化一些。

So from a yield perspective, we have a lot of processes in the company that I think are good. We'll put in place more of an agile methodology when it comes to our programmatic reviews as well as more statistical analysis or SEC thought processes around our manufacturing. So that's already underway. That was already involved and in process within Kopin previously. However, the way that I look at statistical analysis of yield is a little bit different, and we'll look at it at a more broken-down level so that we know if we're going around earlier in the process versus at the end of the process. So it's more of a statistical approach, Kevin.

所以從收益的角度來看，我們公司有很多我認為很好的流程。當涉及到我們的程序審查以及更多統計分析或圍繞我們的製造的 SEC 思維過程時，我們將採用更多的敏捷方法。所以這已經在進行中。這已經在 Kopin 內部涉及並正在處理中。然而，我看待收益率統計分析的方式有點不同，我們將在更細分的層面上看待它，以便我們知道我們是在過程的早期還是在結束時進行研究的過程。所以這更像是一種統計方法，凱文。

Okay. You seem to be more comfortable about supply chain issues. Can you offer a little more insight on -- I mean, given the short tenure, where your comfort is coming from?

好的。您似乎對供應鏈問題更放心。你能提供更多的見解——我的意思是，鑑於任期很短，你的安慰從何而來？

Sure. Mainly, I understand the FPGA market very well. And I think you'll find other companies such as Kopin are struggling with FPGA deliveries. I can mention 5 off the top of my head. They are getting better because of their supply chain is getting better and that we've had direct relationships and conversations with the specific FPGA supplier that we work with. So they're getting better clarity. Therefore, we're getting better clarity and better confidence, and that seems to be across the board. In fact, I was listening to Intel and their earnings call, and it seems like they're getting a hold of their supply chain. So it's a ripple effect, Kevin, and we're at the end of that we're at the end of that supply chain. And I think we're just getting better clarity and better confidence that our suppliers are getting their supply chain corrected.

當然。主要是我很了解FPGA市場。而且我認為您會發現 Kopin 等其他公司正在為 FPGA 交付而苦苦掙扎。我可以舉出 5 個。他們變得越來越好，因為他們的供應鏈越來越好，而且我們已經與我們合作的特定 FPGA 供應商建立了直接關係和對話。所以他們變得越來越清晰。因此，我們變得更加清晰和更有信心，這似乎是全面的。事實上，我正在聽英特爾和他們的財報電話會議，他們似乎正在控制他們的供應鏈。所以這是一種連鎖反應，凱文，我們正處於供應鏈的盡頭。而且我認為我們對我們的供應商正在糾正他們的供應鏈變得更加清晰和更有信心。

Okay. I mean, everyone spoken to the improvement consumer, right, almost -- actually more than doubled, I think, in business from the June quarter. And I'm just curious what you see driving that and how consistent that sales level might be, albeit minor compared to the defense business, it's still a nice little pop and potentially indicative.

好的。我的意思是，每個人都與改善消費者交談過，對，幾乎 - 實際上，我認為，從 6 月季度開始，業務增長了一倍多。我很好奇你看到了什麼推動了這一點，以及銷售水平可能有多一致，儘管與國防業務相比是微不足道的，但它仍然是一個不錯的小流行和潛在的指示性。

Indeed, Kevin, it's exactly right. It's off a smaller base. But having said that, it's about the funnel. And we're filling the funnel with new opportunities with Tier 1 customers, and they're starting to mature as time goes on here because the market is maturing. And I think we're well positioned for growth in it. But the way I view the consumer business is that's the pop, that's the fizzle, right? We're positioned well. We have a strong portfolio of products. Dr. Fans working on some really interesting things with our Chinese partners that I think is going to help fuel that growth. But then I think about the overall business.

確實，凱文，這是完全正確的。這是一個較小的基地。但話說回來，這是關於漏斗的。我們正在用一級客戶的新機會填補漏斗，隨著時間的推移，他們開始成熟，因為市場正在成熟。而且我認為我們已經做好了增長的準備。但我看待消費者業務的方式是流行，失敗，對吧？我們的位置很好。我們擁有強大的產品組合。范斯博士與我們的中國合作夥伴一起做一些非常有趣的事情，我認為這將有助於推動這種增長。但後來我考慮了整體業務。

As consumer grows, we're going to have this wonderful base business that's profitable and will move along at a decent compound annual growth rate. while the consumer business will ebb and flow as they do. But I do believe our consumer business will grow next year based on some of the LRIP that we've got there with some key customers. And you're starting to hear some of the announcements that are coming out recently of Kopin being involved with Pantile Optics and some AR VR headsets. And I think you're going to hear more of those in the future. And to that end, I highly recommend we'll be at CES this year, Kevin. Hopefully, you're able to come visit us, and you'll see some more of our new products in that suite, and we're hopeful to have a great CES this year.

隨著消費者的增長，我們將擁有這個出色的盈利基礎業務，並將以可觀的複合年增長率繼續發展。而消費者業務將像他們一樣潮起潮落。但我確實相信，基於我們與一些主要客戶達成的一些 LRIP，明年我們的消費者業務將會增長。你開始聽到一些最近發布的關於 Kopin 參與 Pantile Optics 和一些 AR VR 耳機的公告。而且我認為您將來會聽到更多此類內容。為此，我強烈建議我們今年參加 CES，凱文。希望您能來參觀我們，您會在該套件中看到我們的更多新產品，我們希望今年能舉辦一場精彩的 CES。

Last question for me, if I may, Mike. We talked about a I think it was $2 million -- I think on the P&L, it showed $2 million write-off, and you spoke to $1 million. Can we just have a little more detail on that it kind of went by a little too quick for me. Apologies for the burden of maybe not a complete deck that you're talking to here. I was just wondering about the write-down, Rich. I showed us 2, I think, on the P&L and Michael mentioned one, I was just looking for a little more color on that. And it seems that you folks are confident that, that might be the end of it.

最後一個問題，如果可以的話，邁克。我們談到了一個我認為是 200 萬美元的問題——我認為在損益表上，它顯示了 200 萬美元的註銷，而你說的是 100 萬美元。我們能否提供更多詳細信息，這對我來說有點太快了。對於您在這裡談論的可能不是完整套牌的負擔，我們深表歉意。我只是想知道減記，里奇。我向我們展示了 2 個，我想，在損益表上邁克爾提到了一個，我只是想在上面尋找更多的顏色。看來你們這些人很有信心，這可能就到此為止了。

Well, so as you know, we have a number of investments, equity investments. In this particular case, we have a significant investment in a company located in Asia. Their business has been significantly affected by COVID. And every quarter, we go through and do an impairment review on our investments. And based upon the current situation in Asia related to COVID and this customer, we get a valuation and determined it was impaired and we took it. And we did not fully write the investment off. We just rolled it down to what our analysis says it's worth. It's all part of the fair market value of accounting that the financial statements are based on. There's a lot of assumptions in there about future growth rates and so on and so forth as promulgated by the accounting literature. So it's a noncash charge. And it's something we're required to do every quarter. But it's directly related to the impacts of COVID in the countries that they operate in.

好吧，正如你所知，我們有一些投資，股權投資。在這種特殊情況下，我們對一家位於亞洲的公司進行了大量投資。他們的業務受到 COVID 的重大影響。每個季度，我們都會對我們的投資進行減值審查。根據亞洲與 COVID 和該客戶相關的當前情況，我們進行了估值並確定它已受損，我們接受了它。而且我們沒有完全註銷投資。我們只是將其歸結為我們的分析所說的價值。這些都是財務報表所依據的會計公平市場價值的一部分。那裡有很多關於未來增長率的假設等等，正如會計文獻所公佈的那樣。所以這是一項非現金費用。這是我們每個季度都需要做的事情。但這與 COVID 在他們經營所在國家/地區的影響直接相關。

Ladies and gentlemen, this concludes today's Q&A session. That concludes today's conference. We appreciate your participation. You may now disconnect.

女士們，先生們，今天的問答環節到此結束。今天的會議到此結束。感謝您的參與。您現在可以斷開連接。