Kopin Corp (KOPN) 2023 Q2 法說會逐字稿

Good afternoon, everyone, and welcome to Kopin Corporation Second Quarter 2023 Earnings Call. Please note that this event is being recorded.

大家下午好，歡迎參加 Kopin Corporation 2023 年第二季度財報電話會議。請注意，該事件正在被記錄。

At this time, I'd like to turn the conference over to Quinn Callanan, Investor Relations for Kopin. Please go ahead.

這次，我想將會議轉交給 Kopin 投資者關係部門的 Quinn Callanan。請繼續。

Thank you. Good afternoon, everyone.

謝謝。大家下午好。

Before we get started, I'd like to remind everyone that during today's call, taking place on Thursday, August 10, 2023, 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 are 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. Although the company believes that the assumptions underlying these statements are reasonable, any of them can be proven inaccurate, and there can be no assurances that the results will be realized. The company undertakes no obligation to update the forward-looking statements made during today's call.

在開始之前，我想提醒大家，在今天 2023 年 8 月 10 日星期四舉行的電話會議中，我們將做出 1995 年《私人證券訴訟改革法案》中定義的前瞻性聲明。這些聲明是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的 10-K 表格年度報告以及向美國證券交易委員會提交的其他文件中討論的其他因素。儘管公司認為這些陳述背後的假設是合理的，但其中任何一個都可能被證明是不准確的，並且不能保證結果一定會實現。該公司沒有義務更新今天電話會議中所做的前瞻性陳述。

In addition, references may be made to certain non-generally accepted accounting principles, or non-GAAP measures, for which you should refer to the appropriate disclaimers and reconciliations in the company's SEC filings and press releases.

此外，可能會引用某些非普遍接受的會計原則或非 GAAP 衡量標準，對此，您應參閱公司向 SEC 提交的文件和新聞稿中的適當免責聲明和調節表。

Kopin Corporation's Chief Executive Officer, Michael Murray, will begin today's call with an overview of Kopin's progress within the company's strategy. Following Michael, Kopin's CFO, Richard Sneider, will review the company's first quarter results.

Kopin 公司首席執行官 Michael Murray 將在今天的電話會議中概述 Kopin 在公司戰略方面的進展。繼邁克爾之後，Kopin 的首席財務官理查德·斯奈德 (Richard Sneider) 將審查公司第一季度的業績。

I would now like to turn the conference over to Michael Murray.

我現在想把會議交給邁克爾·默里。

Thank you, Quinn. Good afternoon to everyone, and welcome to our second quarter earnings call.

謝謝你，奎因。大家下午好，歡迎參加我們的第二季度財報電話會議。

I'm proud to announce we turned in $10.5 million in revenue for the quarter, which was also our third consecutive positive book-to-bill quarter. And with our recent announcement of an approximate $12.8 million order, our third quarter book-to-bill is off to a very good start.

我很自豪地宣布，本季度我們實現了 1,050 萬美元的收入，這也是我們連續第三個季度實現訂單出貨比增長。隨著我們最近宣布大約 1,280 萬美元的訂單，我們第三季度的訂單出貨量有了一個良好的開端。

I do want to highlight that beyond revenue, we were successful in our disciplined operations, managing the factors that were within our control and within our transformation plan.

我確實想強調，除了收入之外，我們在嚴格的運營、管理我們控制範圍內和轉型計劃範圍內的因素方面取得了成功。

I'd also like to briefly discuss 2 areas in the P&L, the first of which is elevated legal costs, a portion of which is associated with our new patents and trademark development, mostly due to a litigation, which began in 2016. Details of the litigation are discussed in our recent 10-Ks and 10-Qs. But in summary, we are scheduled for trial in the first quarter of 2024, and we remain confident in our position. The second item was a $3.3 million noncash charge related to our equity investments whose valuations we review quarterly. These 2 items on the P&L had significant negative impact on earnings per share. Without these items, our loss would have been approximately $2.9 million or $0.03 a share. For reference, this compares favorably to our second quarter of 2022 earnings per share loss of $0.06.

我還想簡要討論損益表中的兩個領域，第一個是法律成本上升，其中一部分與我們的新專利和商標開發有關，主要是由於 2016 年開始的訴訟所致。我們最近的10-K和10-Q 中討論了該訴訟。但總而言之，我們計劃在 2024 年第一季度進行試驗，我們對我們的立場仍然充滿信心。第二項是與我們的股權投資相關的 330 萬美元非現金費用，我們每季度審查其估值。損益表中的這兩項對每股收益產生了顯著的負面影響。如果沒有這些項目，我們的損失將約為 290 萬美元或每股 0.03 美元。作為參考，這與我們 2022 年第二季度每股收益虧損 0.06 美元相比是有利的。

This quarter is another data point that we are continuously improving the core operations significantly. Again, outside of these items, our operations showed significant improvement, and we remain hyper focused on controlling what we can control with regards to our strategic initiatives, operational discipline and growth objectives.

本季度是我們不斷顯著改善核心業務的另一個數據點。同樣，除了這些項目之外，我們的運營顯示出顯著改善，並且我們仍然高度專注於控制我們在戰略舉措、運營紀律和增長目標方面可以控制的內容。

Since we spoke last, we have gained several new investors recently. And for those who are unfamiliar with Kopin, I'll briefly remind everyone who Kopin is, what we do and who we sell to. After that brief overview, I'll touch on some strategic initiatives and discuss this last quarter and some opportunities on the horizon before turning the call over to Rich.

自從我們上次談話以來，我們最近獲得了幾位新投資者。對於那些不熟悉 Kopin 的人，我將簡要提醒大家 Kopin 是誰、我們做什麼以及我們賣給誰。在簡短的概述之後，我將討論一些戰略舉措，並討論上個季度的情況以及即將出現的一些機會，然後再將電話轉給 Rich。

Now for those new to Kopin, we design and manufacture several different types of microdisplays, including our proprietary AMLCD technology, our broad portfolio of OLED displays, our FL cost displays and our recently announced microLED technology. Now what makes Kopin unique and valued by our customers is our ability to couple these types of display technologies with advanced optics, drive electronics and housings to solve our customers' needs in defense, commercial and consumer applications. We believe we are the only company with the core capabilities and competencies in each of these display technologies, enabling us to objectively provide the right solutions for our customers.

現在，對於Kopin 的新手來說，我們設計和製造了幾種不同類型的微型顯示器，包括我們專有的AMLCD 技術、我們廣泛的OLED 顯示器產品組合、我們的FL 成本顯示器以及我們最近宣布的microLED 技術。現在，Kopin 的獨特之處和受到客戶重視的原因是我們能夠將這些類型的顯示技術與先進的光學、驅動電子設備和外殼相結合，以滿足客戶在國防、商業和消費應用中的需求。我們相信，我們是唯一一家在這些顯示技術中都擁有核心能力和競爭力的公司，使我們能夠客觀地為客戶提供正確的解決方案。

Our products are the overlay of critical digital information on the analog world, and we continue to see the adoption and application of optics continue to broaden as new industries are discovering ways to use these technologies to improve their end customers' user experience.

我們的產品是關鍵數字信息在模擬世界上的疊加，隨著新行業正在尋找使用這些技術來改善最終客戶的用戶體驗的方法，我們將繼續看到光學的採用和應用不斷擴大。

Kopin is at the forefront of optical advancements, creating innovative technologies that have enhanced how people interact in their environment, both real and virtual. Today, Kopin applies this expertise as a vital supplier for many of the world's largest defense contractors. Now still, we also look to capitalize on consumer, automotive, medical and industrial opportunities as they adopt these technologies as well.

Kopin 處於光學進步的前沿，創造創新技術，增強人們在真實和虛擬環境中的互動方式。如今，Kopin 運用其專業知識，成為許多世界上最大的國防承包商的重要供應商。現在，我們還希望利用消費、汽車、醫療和工業領域的機會，因為它們也採用了這些技術。

Touching on some of our strategic priorities. We saw tremendous improvement in our quality measurements last quarter, which we refer to as on-time in-full, or OTIF, for short. OTIF measures how often we deliver products to a customer on time, in total and without any quality issues as judged by the customer. This focus on quality ultimately leads to a more profitable Kopin by improving margins, higher customer satisfaction and repeat in future business.

談到我們的一些戰略重點。上個季度我們的質量測量取得了巨大進步，我們將其稱為“準時完成”，簡稱 OTIF。 OTIF 衡量我們按時向客戶交付產品的頻率、總體交付量以及客戶認為沒有任何質量問題的情況。這種對質量的關注最終會通過提高利潤率、更高的客戶滿意度和未來業務的重複性，為 Kopin 帶來更多的利潤。

We continue to see dividends from the focus in the second quarter of this year as our product costs stayed low, our incoming inspection improved and our supply chain continued to normalize. We expect further improvements ahead as we increase volumes, automate manual processes and improve absorption rates, and we continue to focus on total cost management.

我們繼續從今年第二季度的焦點中看到紅利，因為我們的產品成本保持在較低水平，我們的來料檢驗得到改善，我們的供應鏈繼續正常化。隨著產量的增加、手動流程的自動化和吸收率的提高，我們預計未來會得到進一步的改進，並且我們將繼續關注總成本管理。

Much of our manufacturing takes place within our Class 100 clean room, the cleanliness of the air within our manufacturing facility greatly impacts our ability to keep product quality high. During the quarter, we saw improvements in air quality as we installed several new pieces of equipment and implemented some further operational changes. I'm happy to report that our on-time in-full rates are now in the 90% range on a consistent basis. Consistency in this area is greatly important and contributes to our customers' happiness and, ultimately, the amount of their business Kopin receives. Higher on-time in-full rates also allow Kopin to operate more efficiently, requiring fewer touch points by our employees and less yield and quality losses.

我們的大部分製造工作都在 100 級潔淨室內進行，製造設施內空氣的清潔度極大地影響了我們保持高產品質量的能力。在本季度，我們安裝了幾台新設備並實施了一些進一步的運營變革，空氣質量有所改善。我很高興地向大家報告，我們的準時完成率目前一直保持在 90% 的範圍內。這一領域的一致性非常重要，有助於提高客戶的滿意度，並最終提高 Kopin 獲得的業務量。更高的準時完成率還使 Kopin 能夠更高效地運營，減少了員工的接觸點，並減少了產量和質量損失。

Now indeed, we have more to improve upon and accomplish. However, I am proud of our team, our progress over the first 6 months of 2023. I'm greatly encouraged by the positive comments received from our top customers that they are experiencing a much improved, reliable and customer-focused Kopin.

事實上，現在我們還有更多需要改進和完成的事情。然而，我為我們的團隊以及我們在2023 年前6 個月取得的進步感到自豪。我們的頂級客戶給予我的積極評價讓我深受鼓舞，他們正在體驗一個經過大幅改進、可靠且以客戶為中心的Kopin。

Cost discipline remains a priority as well beyond quality improvements. We continue to scrutinize internal R&D projects and the profitability of any funded R&D we take on. We began to see returns on this new approach to funded R&D as a profitability in this area dramatically improved relative to 2022. Internal R&D expenses remain low relative to past periods as we formalize the R&D investment criterion, investing only in projects with a high probability of success, sustainability and that offer more than just a right display, which we still make.

除了質量改進之外，成本控制仍然是一個優先事項。我們繼續審查內部研發項目以及我們承擔的任何資助研發的盈利能力。我們開始看到這種資助研發的新方法的回報，因為該領域的盈利能力相對2022 年大幅提高。隨著我們正式確定研發投資標準，僅投資於最有可能實現的項目，內部研發費用相對於過去時期仍然較低。成功、可持續性，提供的不僅僅是正確的展示，而我們仍然在生產這種展示。

Reducing R&D spend doesn't imply that Kopin will not stay on the forefront of display and optical technology, but rather that our efforts are directed to those projects with the best chances of success, value creation and capture. An excellent example of our new approach is the partnership with the MIT Computer Science and Artificial Intelligence Laboratory, or CSAIL, for short. We announced this in the second quarter. The goal of this program is to integrate AI capabilities into our products to solve the problems which have been limiting the success of AR and VR products. This activity will augment current research and developments in these areas of displays, optics, software and algorithms.

減少研發支出並不意味著 Kopin 將不會保持在顯示和光學技術的最前沿，而是意味著我們的努力將集中在那些最有可能成功、創造和獲取價值的項目上。我們新方法的一個很好的例子是與麻省理工學院計算機科學和人工智能實驗室（簡稱 CSAIL）的合作。我們在第二季度宣布了這一點。該計劃的目標是將人工智能功能集成到我們的產品中，以解決限制 AR 和 VR 產品成功的問題。這項活動將增強當前在顯示、光學、軟件和算法領域的研究和開發。

By joining MIT's CSAIL program, Kopin becomes part of an elite group of members in noncompetitive markets that share information and capabilities for functional integration and deployment of application-specific AI capabilities that bring additional value to the products we design and manufacture. We look forward to actively participating in this group, and we will help improve our solutions and solve several of the human-centric computing issues of today. Joining this organization also brings Kopin full circle, having been spun out of MIT almost 40 years ago.

通過加入麻省理工學院的CSAIL 計劃，Kopin 成為非競爭性市場精英成員群體的一員，該群體共享信息和功能，以進行功能集成和部署特定於應用程序的AI 功能，從而為我們設計和製造的產品帶來附加價值。我們期待積極參與這個小組，我們將幫助改進我們的解決方案並解決當今的一些以人為中心的計算問題。加入這個組織也讓 Kopin 回到了原點，他已經在大約 40 年前從麻省理工學院分離出來了。

Now I'll provide some updates on key programs since the last time we spoke and some opportunities we see on the horizon.

現在，我將提供自上次談話以來關鍵計劃的一些最新情況以及我們看到的一些即將出現的機會。

As per our previous calls, Kopin is unique in that our OLED backplane technology does not require a custom deposition process. This allows us to utilize multiple deposition and fabrication strategies globally.

根據我們之前的電話，Kopin 的獨特之處在於我們的 OLED 背板技術不需要定制沉積工藝。這使我們能夠在全球範圍內利用多種沉積和製造策略。

Within the quarter, we announced new agreements for OLED deposition, which utilize U.S. DoD-approved vendors. I highlight this announcement as this event has been misunderstood by some in the investment community. So to clarify, by adding these new vendors, Kopin can support U.S. DoD customers with our current and broad portfolio and future OLED devices. At the same time, for our non-DoD OLED customers, we will continue to work with our existing OLED deposition partner in Asia.

本季度，我們宣布了新的 OLED 沉積協議，該協議利用美國國防部批准的供應商。我強調這一公告是因為這一事件被投資界的一些人誤解了。因此，需要澄清的是，通過添加這些新供應商，Kopin 可以通過我們當前和廣泛的產品組合以及未來的 OLED 設備來支持美國國防部客戶。與此同時，對於我們的非國防部 OLED 客戶，我們將繼續與亞洲現有的 OLED 沉積合作夥伴合作。

This dual strategy enables us to provide the lowest possible cost to our customers in automotive, consumer, industrial and medical markets while also supporting our U.S. DoD sovereign supply chain requirements. With recent shifts in competitive landscapes, we are seeing a dramatic uplift in both consumer and defense opportunities alike due to this strategy.

這種雙重戰略使我們能夠為汽車、消費者、工業和醫療市場的客戶提供盡可能最低的成本，同時也支持我們的美國國防部主權供應鏈要求。隨著最近競爭格局的變化，我們看到由於這一戰略，消費者和國防機會都急劇增加。

In early June, Kopin introduced our first microLED display. This microLED is an ultra-high definition monochrome version that provides millions of nits of brightness. It's difficult to describe just how bright a display with several million nits of brightness is, and it's truly a wonder of engineering achievement.

六月初，Kopin 推出了我們的首款 microLED 顯示屏。該 microLED 是超高清單色版本，可提供數百萬尼特的亮度。很難描述具有數百萬尼特亮度的顯示器到底有多亮，這確實是工程成就的奇蹟。

By comparison, many of the new AR/VR headsets that use OLED displays, as an example, only offer 5,000 to 10,000 nits of brightness, and these manufacturers of the devices recognize that to offer better brightness, contrast, thinner and lighter weight designs, a much stronger light engine and bespoke optics are required. We believe microLEDs will enable these key requirements and bespoke optical solutions, and they are the future of wearable display technology. Kopin is undoubtedly the vanguard of microLED development as we continue to develop our color microLED display portfolio.

相比之下，許多使用OLED 顯示屏的新型AR/VR 耳機僅提供5,000 至10,000 尼特的亮度，而這些設備製造商認識到，要提供更好的亮度、對比度、更薄、更輕的設計，需要更強大的光引擎和定制光學器件。我們相信 microLED 將滿足這些關鍵要求和定制光學解決方案，它們是可穿戴顯示技術的未來。隨著我們不斷開發彩色 microLED 顯示器產品組合，Kopin 無疑是 microLED 開發的先鋒。

Earlier this week, we announced a follow-on order for one of our IP subassemblies to a Department of Defense prime contractor that integrates our IPs into a sophisticated video AR module. This $12.8 million follow-on order represents a significant increase in year-over-year volume and revenue from the strategic customer, and we expect further additional follow-on orders for the same product as well. This order is the result of improved customer engagement, program management focus and on-time in-full processes and a great customer who's been patient and supportive of Kopin and our transformation plan.

本週早些時候，我們宣布向國防部主承包商訂購我們的一個 IP 組件的後續訂單，該承包商將我們的 IP 集成到復雜的視頻 AR 模塊中。這一價值 1,280 萬美元的後續訂單意味著戰略客戶的銷量和收入同比顯著增加，我們預計同一產品還會有更多後續訂單。該訂單是客戶參與度提高、項目管理重點和按時完整流程以及對 Kopin 和我們的轉型計劃給予耐心和支持的優秀客戶的結果。

Recently, Kopin has been informed of our success and being down selected for several new dismounted soldier projects. We are now in the final stages of submitting formal proposals, and we expect to receive feedback on those strategic pursuits in the next few quarters.

最近，Kopin 獲悉我們的成功，並被選中參與幾個新的徒步士兵項目。我們現在正處於提交正式提案的最後階段，我們預計將在未來幾個季度收到有關這些戰略追求的反饋。

Turning to our General Dynamics armored vehicle upgrade program. To remind folks, this program is in the final quality review process, which is called production part approval process, or PPAP, for short, and we expect this program to be significant revenue for Kopin. The program continues to progress well and is a perfect example of the parenting advantage Kopin can bring to our customers. In this specific case, we were selected for the program because we were able to offer the right system technology for the application.

轉向我們的通用動力裝甲車升級計劃。提醒大家的是，該計劃正處於最終質量審查流程中，簡稱為生產零件審批流程，簡稱 PPAP，我們預計該計劃將為 Kopin 帶來可觀的收入。該計劃繼續進展順利，是 Kopin 可以為我們的客戶帶來的育兒優勢的完美範例。在這個具體案例中，我們被選中參加該計劃是因為我們能夠為該應用提供正確的系統技術。

In this specific use case, the best display was an FL cost display developed by our team at Forth Dimension Displays in Scotland. The drive electronics and optics were developed at Kopin in Westborough, Massachusetts, and the complete system prototypes were developed and designed by our talented team of NVIS in Virginia. The final system will be built at Kopin in Westborough, and this assembly sells for tens of thousands of dollars each, and there are several assemblies per vehicle. Multiplied by several thousand vehicles, which we expect to be upgraded, equates to well over $100 million in potential revenue for this program over the period of performance once in production.

在這個特定的用例中，最好的顯示器是我們蘇格蘭 Forth Dimension Displays 團隊開發的 FL Cost 顯示器。驅動電子器件和光學器件是在馬薩諸塞州韋斯特伯勒的 Kopin 開發的，完整的系統原型是由我們位於弗吉尼亞州的 NVIS 才華橫溢的團隊開發和設計的。最終的系統將在 Westborough 的 Kopin 建造，每個組件的售價為數万美元，每輛車有多個組件。乘以我們預計將升級的數千輛汽車，相當於該項目在投產後的性能期間的潛在收入遠遠超過 1 億美元。

Now turning from land systems to air systems. Our Low Rate Initial Production, or LRIP, rotary wing and fighter aircraft helmet OLED programs remain on track, and we expect several successful milestones in the coming quarters. Furthermore, we are continuing to see strong demand in military training and simulation markets with both new and repeat orders for a variety of products serving this market. Now training precedes deployment and the broader issues in Europe, among other regions are driving increased demand for these products.

現在從陸地系統轉向空中系統。我們的低速初始生產 (LRIP)、旋翼和戰鬥機頭盔 OLED 項目仍在按計劃進行，我們預計在未來幾個季度將取得幾個成功的里程碑。此外，我們繼續看到軍事訓練和模擬市場的強勁需求，服務於該市場的各種產品的新訂單和重複訂單都有。現在，培訓先於部署，歐洲和其他地區的更廣泛問題正在推動對這些產品的需求增加。

Turning to the 3D AOI market. We continue to experience weaker demand in the Chinese commodities, semiconductor and industrial sectors. We expect this part of the market to remain weak through the remainder of the year. There are modest demand signals from our high-performance customers though, however, in Europe and the Americas.

轉向 3D AOI 市場。中國大宗商品、半導體和工業領域的需求繼續疲軟。我們預計這部分市場在今年剩餘時間內將保持疲軟。然而，在歐洲和美洲，我們的高性能客戶發出了溫和的需求信號。

Lastly, we continue to experience increased customer design and proposal demands in both defense and consumer markets. With recent consumer announcements in AR/VR headsets and continued human-centric issues slowing higher adoption rates in both markets, customers are turning to Kopin to help them solve some of the most significant application-specific human-centric issues their end users are experiencing. Kopin has decades of experience solving these specific issues relating to optically induced nausea, comfort and performance of head- and helmet-worn systems. We expect these efforts will result in new business with current and new customers as we introduce exciting new technologies in these areas in the very near future.

最後，我們在國防和消費市場上不斷增加客戶的設計和提案需求。隨著最近AR/VR 耳機的消費者發布以及持續的以人為中心的問題減緩了兩個市場的更高采用率，客戶開始尋求Kopin 來幫助他們解決最終用戶遇到的一些最重要的特定於應用程序的以人為中心的問題。 Kopin 擁有數十年的經驗，可以解決與光學引起的噁心、頭戴式和頭盔式系統的舒適度以及性能相關的具體問題。我們預計，隨著我們在不久的將來在這些領域引入令人興奮的新技術，這些努力將為現有和新客戶帶來新業務。

So now I'll turn the call over to our CFO, Rich Sneider, to review our results in further detail. Rich, over to you.

現在我將把電話轉給我們的首席財務官 Rich Sneider，以進一步詳細審查我們的結果。富貴，交給你了。

Thank you, Michael.

謝謝你，邁克爾。

Turning to our financial results. Total revenues from Q2 2023 were $10.5 million versus $11.9 million for the prior year, a 12% decrease year-over-year.

轉向我們的財務業績。 2023 年第二季度的總收入為 1,050 萬美元，而上年同期為 1,190 萬美元，同比下降 12%。

Product revenues for the first quarter ended July 1, 2023, were $6 million compared with $9 million for the second quarter ended June 25, 2022, a 33% decrease year-over-year. Decrease in product revenue was driven by a $2 million or a 28% decrease in defense revenues and $749,000 or a 43% decrease in industrial revenues over the prior year. As we previously announced, we have an additional $12.8 million order for defense, and we're reviewing lead times on materials to understand the potential positive impact on Q4 2023 revenue. Regarding industrial products revenues, we believe that they will be lower due to less demand from China.

截至2023年7月1日的第一季度產品收入為600萬美元，而截至2022年6月25日的第二季度產品收入為900萬美元，同比下降33%。產品收入下降的原因是國防收入比上年減少了 200 萬美元（即減少 28%），工業收入比上年減少了 749,000 美元（即減少了 43%）。正如我們之前宣布的，我們還有一筆 1280 萬美元的國防訂單，我們正在審查材料的交貨時間，以了解對 2023 年第四季度收入的潛在積極影響。關於工業產品收入，我們認為由於中國需求減少，工業產品收入將會下降。

Funded research and development revenues were $3.9 million for the second quarter of 2023 compared to $2.8 million for the second quarter of 2022, a 39% increase. The increase in funded R&D was largely due to an increase in funding for display system initially used in U.S. defense programs.

2023 年第二季度的資助研發收入為 390 萬美元，而 2022 年第二季度為 280 萬美元，增長 39%。研發資金的增加主要是由於最初用於美國國防項目的顯示系統的資金增加。

Cost of goods sold for the second quarter of 2023 was $5.7 million or 95% of product revenues compared with $7.9 million or 88% of the second quarter last year. The increase in cost of product revenues as a percent of product revenues was the result of lower efficiencies from reduced product sales volumes as well as year-over-year increase in noncash stock compensation of $415,000. Excluding the increase in stock compensation costs, cost of product revenues would have been 88% of net product revenue.

2023 年第二季度的銷售成本為 570 萬美元，佔產品收入的 95%，而去年第二季度為 790 萬美元，佔產品收入的 88%。產品收入成本佔產品收入的百分比增加是由於產品銷量減少導致效率降低以及非現金股票報酬同比增加 415,000 美元。不包括股票補償成本的增加，產品收入成本將佔產品淨收入的 88%。

R&D expenses in the second quarter of 2023 were $3.1 million compared with $5.1 million during the second quarter of 2022, a 39% decrease year-over-year. Funded R&D expenses for Q2 2023 was $2.2 million as compared to $3.2 million for Q2 2022. The decrease in expense was a result of certain U.S. defense programs moving to production and a reduction of some of the funded OLED development costs due to the spin-out in the first quarter of 2023 of certain OLED activities to Lightning Silicon.

2023 年第二季度的研發費用為 310 萬美元，而 2022 年第二季度的研發費用為 510 萬美元，同比下降 39%。 2023 年第二季度的資助研發費用為220 萬美元，而2022 年第二季度為320 萬美元。費用減少的原因是某些美國國防項目轉向生產，以及由於分拆而減少了一些資助的OLED 開發成本2023 年第一季度，Lightning Silicon 將開展某些 OLED 活動。

Internal R&D expense for Q2 2023 was $939,000 as compared to $2 million in the first quarter of 2022. The decrease in expense was a result of decrease in OLED development activities and more stringent criteria for IR&D programs that Michael spoke of earlier.

2023 年第二季度的內部研發費用為 939,000 美元，而 2022 年第一季度為 200 萬美元。費用減少是由於 OLED 開發活動減少以及邁克爾之前提到的 IR&D 計劃標準更加嚴格。

SG&A expenses were $6.5 million in the second quarter of 2023 compared to $4.3 million in the second quarter of 2022. The SG&A increases for the 3 months ended July 1, 2023, as compared to 3 months ended June 25, 2022, was primarily due to legal expenses of approximately $2.4 million for the second quarter of 2023 as compared to approximately $200,000 for the second quarter of 2022 and bad debt expense of approximately $300,000 for the second quarter of 2023 as compared to bad debt recoveries of approximately $200,000 for the second quarter of 2022.

2023 年第二季度的SG&A 費用為650 萬美元，而2022 年第二季度為430 萬美元。截至2023 年7 月1 日止的3 個月的SG&A 費用較截至2022 年6 月25 日止的3個月有所增加，主要是由於2023 年第二季度的法律費用約為240 萬美元，而2022 年第二季度的法律費用約為200,000 美元，2023 年第二季度的壞賬費用約為300,000 美元，而2023 年第二季度的壞賬回收約為200,000 美元2022 年。

These increases were partially offset by lower information technology spending of approximately $100,000 for the second quarter of 2023 as compared to $200,000 for the second quarter of 2022; and post-retirement benefits, which was 0 in the second quarter of 2023 as compared to $200,000 in the second quarter of 2022. Other expense was approximately $3.3 million for the second quarter of 2023 compared with $141,000 for the second quarter of 2022. In the second quarter of 2023, we recorded foreign currency losses of $236,000 and a noncash impairment loss on equity investments of $3.3 million.

這些增長被 2023 年第二季度信息技術支出減少約 10 萬美元所部分抵消，而 2022 年第二季度信息技術支出為 20 萬美元；退休後福利，2023 年第二季度為 0，而 2022 年第二季度為 200,000 美元。2023 年第二季度的其他費用約為 330 萬美元，而 2022 年第二季度為 141,000 美元。 2023 年第二季度，我們的外匯損失為236,000 美元，股權投資非現金減值損失為330 萬美元。

Turning to the bottom line. The net loss attributable to Kopin during the second quarter was approximately $8.2 million or $0.07 per share compared with $5.6 million or $0.06 per share in the second quarter of 2022. Net cash used in operating activities for the 3 months ended July 1, 2023, was approximately $3.8 million. Kopin's cash and marketable securities were approximately $25.7 million at July 1, 2023, as compared to $12.6 million at December 31, 2022. We have no long-term debt.

轉向底線。第二季度Kopin 的淨虧損約為820 萬美元，即每股0.07 美元，而2022 年第二季度為560 萬美元，即每股0.06 美元。截至2023 年7 月1 日止3 個月，經營活動使用的淨現金為約380萬美元。截至 2023 年 7 月 1 日，Kopin 的現金和有價證券約為 2570 萬美元，而截至 2022 年 12 月 31 日為 1260 萬美元。我們沒有長期債務。

The amounts discussed above are based on our current estimates and listeners should review our final Form 10-Q for the quarter ended July 1, 2023, for any possible changes and, of course, for additional disclosures.

上述金額基於我們當前的估計，聽眾應查看我們截至 2023 年 7 月 1 日的季度的最終 10-Q 表格，以了解任何可能的變化，當然還有其他披露。

And with that, I'll turn it back over to Michael for closing remarks, and then we'll take questions.

接下來，我將把它轉回給邁克爾做總結髮言，然後我們將回答問題。

Thanks, Rich. Our focus continues to be on strengthening the order book, achieving higher on-time in-full rates, cost controls and making the strategic investments in products and people which, in the aggregate, will improve cash flow and provide long-term sustainable profitability and growth.

謝謝，里奇。我們的重點仍然是加強訂單、實現更高的準時完成率、成本控制以及對產品和人員進行戰略投資，總體而言，這將改善現金流並提供長期可持續的盈利能力和生長。

Lastly, yet most importantly, we are fortunate to have world-leading and market-making customers who are supporting Kopin during this transformational period. Due to our quality improvements over the past several quarters, additional executive management focus on strategic customer relationships and the addition of experienced business development program managers, Kopin is now being invited into larger design opportunities that will allow us to move up the value chain within our customers' applications, solving more of their technical challenges and increasing Kopin's content in their designs.

最後但也是最重要的是，我們很幸運擁有世界領先的做市客戶，他們在這一轉型時期為 Kopin 提供支持。由於我們在過去幾個季度的質量改進、額外的執行管理層對戰略客戶關係的關注以及經驗豐富的業務開發項目經理的增加，Kopin 現在被邀請參與更大的設計機會，這將使我們能夠在我們的價值鏈中向上移動客戶的應用程序，解決更多的技術挑戰並增加 Kopin 在設計中的內容。

I'd like to thank everyone for your time today and for showing interest in Kopin. I'd like to thank our employees and our stakeholders for their hard work and dedication. With the continued work of our team here at Kopin, I think we can achieve great things and grow the business to new heights.

我要感謝大家今天抽出寶貴的時間以及對 Kopin 表現出的興趣。我要感謝我們的員工和利益相關者的辛勤工作和奉獻精神。通過 Kopin 團隊的持續努力，我認為我們能夠取得偉大的成就，並將業務發展到新的高度。

And with that, operator, we will now offer some time to take some questions.

接線員，我們現在將提供一些時間來回答一些問題。

(Operator Instructions). Our first question comes from Matt Sheerin of Stifel.

（操作員說明）。我們的第一個問題來自 Stifel 的 Matt Sheerin。

A couple of questions. Michael, just on the revenue side. You talked about a lot of the opportunities. It sounds like those are opportunities 2 or 3 quarters out, particularly that new $12.8 million program you talked about. But how should we think about the next quarter or two in terms of top line? Are you expecting sort of a similar revenue profile? Or would there be some recovery in the back half of the year?

有幾個問題。邁克爾，只是在收入方面。您談到了很多機會。聽起來這些都是 2 到 3 個季度後的機會，特別是您談到的 1280 萬美元的新計劃。但我們應該如何考慮未來一兩個季度的收入呢？您是否期望類似的收入狀況？或者下半年會有所復甦嗎？

So the question was how do we think about Q3 and Q4 with the $12.8 million order as well as the market dynamics. So in our best estimates, Q3 looks about the same revenue profile. We're currently working the order that we just received to see what we can pull in because they do invite early deliveries. So we're working our supply chain on that. We do see potential uplift in our Q4 revenues from that order as well as some other pull-ins that we're hearing from the training and simulation market.

所以問題是我們如何看待第三季度和第四季度的 1280 萬美元訂單以及市場動態。因此，根據我們的最佳估計，第三季度的收入狀況大致相同。我們目前正在處理剛剛收到的訂單，看看我們能拉到什麼，因為他們確實邀請提前交貨。所以我們正在為此努力我們的供應鏈。我們確實看到該訂單以及我們從培訓和模擬市場聽到的其他一些拉動因素可能會增加我們第四季度的收入。

Okay. Great. And you talked about the revenue breakdown R&D versus product, and R&D has been growing and product has gone the other way. At what point do you expect that to shift as some of those R&D pilot programs go to full volume? And is there any impact on gross margin or operating margin of when it goes to sort of a full volume contract basis?

好的。偉大的。您談到了研發與產品的收入細分，研發一直在增長，而產品則相反。隨著一些研發試點項目全面投入使用，您預計這種情況會在什麼時候發生轉變？當採用全量合同時，會對毛利率或營業利潤率產生任何影響嗎？

Indeed. So we have a number, we have several projects going from funded research and development into LRIP in the latter half of this year and the beginning of 2024. We do believe that those programs, as they transition through, not only will they have a revenue impact in terms of increase but we do expect some operational expenses at the beginning of the first quarter to support those. However, the margins of those programs should consume the operational expense just fine. So there will be a transition from funded research and development in Q4 and Q1 into production as those LRIP products actually hit production. Does that answer your question?

的確。所以我們有很多項目，我們有幾個項目將在今年下半年和 2024 年初從受資助的研發轉向 LRIP。我們確實相信，這些項目在過渡時不僅會產生收入但我們確實預計第一季度初的一些運營支出將支撐這些增長。然而，這些項目的利潤應該可以很好地消耗運營費用。因此，隨著這些 LRIP 產品實際投入生產，第四季度和第一季度的資助研發將轉變為生產。這是否回答你的問題？

Yes. That's helpful. And then below the line, just some questions on the expense line. Those legal fees of $2.4 million. How should we think about it over the next couple of quarters? It sounds like you said it's going to go to trial early next year, so I would expect expenses maybe even go higher. And if you go to trial, when can you recover those legal costs?

是的。這很有幫助。然後在該線下方，只是一些有關費用線的問題。這些法律費用為 240 萬美元。在接下來的幾個季度我們應該如何考慮它？聽起來你說它將在明年初進行試驗，所以我預計費用可能會更高。如果您接受審判，您什麼時候可以收回這些法律費用？

I think the legal costs that we're seeing right now for this quarter were larger than what we had expected. I won't go into why, but I think they will normalize back to the previous type of expense you've been seeing from us after Q1. But I think Q3 and Q4, I don't think the cost will go higher than what you saw in Q2. We also had some trademarking and patenting in the period, and we'll have a little bit of that in Q3 as well, which did add to the expense. But we think we're in a good place with that lawsuit, and we're expecting to be victorious in that position in Q1. Whether or not we can recoup our legal fees, I don't know, hard to say at this point.

我認為我們現在看到的本季度的法律成本高於我們的預期。我不會詳細說明原因，但我認為他們會恢復到第一季度之後您從我們這裡看到的之前的支出類型。但我認為第三季度和第四季度的成本不會比第二季度更高。在此期間，我們還進行了一些商標和專利申請，第三季度我們也會進行一些商標和專利申請，這確實增加了費用。但我們認為我們在這場訴訟中處於有利地位，我們預計在第一季度取得勝利。我們是否能收回律師費，我不知道，目前很難說。

Okay. So just to confirm, then the OpEx, we should be thinking about it as $6 million or above for the next couple of quarters and then going down after that. Is that fair?

好的。因此，為了確認這一點，我們應該將運營支出視為未來幾個季度的 600 萬美元或以上，然後再下降。這公平嗎？

I think that's fair. I think it will come down in Q3 anyway is what our sense is currently, but it won't be by much. So I think it's a fair assessment.

我認為這是公平的。我認為無論如何，這將在第三季度下降，這是我們目前的感覺，但不會下降太多。所以我認為這是一個公平的評估。

Great. And offsetting that, your gross margin was up significantly quarter-on-quarter and year-over-year. Is that also sustainable as we get through the next couple of quarters? Or with some of those programs ramping, could there be some margin pressure there?

偉大的。抵消這一影響的是，您的毛利率環比和同比均大幅增長。當我們度過接下來的幾個季度時，這是否也是可持續的？或者隨著其中一些項目的推進，是否會存在一些利潤壓力？

We have worked with several of our customers to increase our prices. So I believe our gross margins will remain stable and increase over time. The reason why is we've gone back to some of our customers where there's been scope creep. There's been no inflation increases or there's been criteria that we needed to charge for. And for the most part, we've been successful where it made sense. So I believe our margins will continue to increase to a reasonable level and therefore, so will our profitability.

我們已經與一些客戶合作來提高我們的價格。因此，我相信我們的毛利率將保持穩定並隨著時間的推移而增加。原因是我們已經回到了一些範圍擴大的客戶。沒有通貨膨脹增加，也沒有我們需要收費的標準。在大多數情況下，我們在有意義的地方取得了成功。因此，我相信我們的利潤率將繼續增加到合理的水平，因此我們的盈利能力也會增加。

The next question comes from Glenn Mattson of Ladenburg Thalmann.

下一個問題來自 Ladenburg Thalmann 的 Glenn Mattson。

So congrats on the $12.8 million order, that was nice to see. But I want to talk about that a little bit further. But before we get to that, just a little more detail on the product revenue. Although the total top line came in, in line, it felt like the product revenue is a little lighter than I would have expected. And I'm trying to think about the number of programs, some of which have moved into LRIP and some of which are in full production, and just kind of get a sense of how any of those -- and I realized they could be lumpy from time to time, but it sounds like there's a quarter or two here where it's a little softer. So I'm just curious if there's some cadence of order flow on that front? Some more color there would be great.

恭喜您獲得 1280 萬美元的訂單，很高興看到這一點。但我想進一步談談這個問題。但在此之前，我們先了解一下產品收入的更多細節。儘管總收入進來了，但感覺產品收入比我預期的要少一些。我正在嘗試考慮程序的數量，其中一些已經進入 LRIP，一些正在全面生產，並且只是了解其中任何一個 - 我意識到它們可能是不穩定的時不時地，但聽起來這裡有一兩個季度的聲音比較柔和。所以我只是好奇這方面是否有一些訂單流的節奏？如果再有一些顏色那就太好了。

Sure. So there's no change in demand. Let me be clear on that. Our customers are not communicating any changes in demand. There are from time to time material issues and/or push-ins, pushout, because of our customers' customer requirements, either through testing, qualification, quality issues down the line outside of Kopin. So we did see some of that in Q2 where some of our customers were asking us to hold on while their end customer had either quality or timeliness issues because we're a small system and a subsystem of a larger system, if that makes sense.

當然。所以需求沒有變化。讓我澄清一下。我們的客戶沒有傳達任何需求變化。由於我們客戶的客戶要求，有時會出現材料問題和/或推入、推出，無論是通過 Kopin 之外的測試、資格、質量問題。因此，我們確實在第二季度看到了一些情況，我們的一些客戶要求我們堅持下去，而他們的最終客戶遇到質量或及時性問題，因為我們是一個小系統和一個更大系統的子系統，如果這有意義的話。

So I think the main thing, Glenn, moving forward in Q3 and Q4, there's no changes in demand. In fact, demand is moving in our favor into Q4 with this larger order. I think it's important to note that early deliveries are requested and supported. So I think we can do better in the second half of the year. And I think there was also, in Q2, a mix change where we were doing a little bit more of international business and focusing in on that versus that of more of the U.S. DoD type of product line. So that's why you saw a bit of change in the profitability as well as the overall revenue.

所以我認為最重要的是，格倫，在第三季度和第四季度繼續前進，需求沒有變化。事實上，隨著訂單量的增加，第四季度的需求正朝著對我們有利的方向發展。我認為重要的是要注意提前交付是被要求和支持的。所以我認為我們下半年可以做得更好。我認為第二季度也發生了組合變化，我們做了更多的國際業務，並專注於國際業務，而不是更多的美國國防部類型的產品線。這就是為什麼你看到盈利能力和總收入發生了一些變化。

Rich, anything you want to add to that?

Rich，你還有什麼要補充的嗎？

The point is that it is somewhat counterintuitive that we saw defense revenues decline when, in fact, our order book for defense is probably the best it's been in several years. So as Michael indicated, we're not always the captain of our own fate. We do get comments from our customers asking us to hold shipments or whatever have you for whole varieties outside our control.

關鍵是，我們看到國防收入下降有點違反直覺，而事實上，我們的國防訂單可能是幾年來最好的。因此，正如邁克爾所指出的，我們並不總是自己命運的主宰。我們確實收到了客戶的評論，要求我們保留發貨或任何超出我們控制範圍的整個品種。

Great. Moving on to the large order you announced yesterday, just a little more detail. And maybe you can't because it's maybe a program that you're not allowed to discuss that much, but it reads, the headline is the thermal weapons scope, but then you talked about kind of video AR, pancake optics. Is this something you have seen revenue from before? Or is this a new program, or just an offshoot of an existing? Can you just give us a little color there?

偉大的。繼續討論您昨天宣布的大訂單，僅提供更多細節。也許你不能，因為這可能是一個不允許你討論太多的程序，但它上面寫著，標題是熱武器瞄準鏡，但隨後你談到了視頻 AR、煎餅光學。這是您以前看到過的收入嗎？或者這是一個新計劃，或者只是現有計劃的一個分支？你能給我們一點顏色嗎？

Sure. Existing program, existing customer. And they're seeing, what I believe, is increased demand on their side. And so therefore, we're seeing it as well. That's about all I can say.

當然。現有計劃，現有客戶。我相信，他們看到的是他們方面的需求增加。因此，我們也看到了這一點。我能說的就這麼多了。

The next question comes from Kevin Dede of H.C. Wainwright.

下一個問題來自 H.C. 的 Kevin Dede。溫賴特。

Michael, back to Glenn's question on this most recent thermal weapon sight order, $12.8 million, I think you noted as being the largest of 3. I was just wondering -- or actually no, the most recent of 3, but I'm wondering if it's the largest, and I guess how long you'd expect it would take open to work through it from a sales perspective.

邁克爾，回到格倫關於最近的熱武器瞄準具訂單的問題，1280萬美元，我想你指出這是3個中最大的一個。我只是想知道——或者實際上不是，是3個中最近的一個，但我想知道如果它是最大的，我猜從銷售的角度來看，您預計需要多長時間才能完成它。

Sure. Our view is that this is a significant year-over-year volume increase for us, roughly speaking, about 40% year-over-year increased volume. Therefore, that equates to the same revenue, roughly speaking. And we believe that, that period of performance for this order will start Q4 of this year into 2024 and be concluded in 2024 is what the customer is requesting of us. And the customer's requested as many units as they can get as soon as they can get them. So that's great news for Kopin. So we will be looking at how we can increase volumes and production in the facility here to support our customers' mission in that case.

當然。我們認為，這對我們來說是一個顯著的同比銷量增長，粗略地說，同比增長了約 40%。因此，粗略地說，這相當於相同的收入。我們相信，該訂單的履約期將從今年第四季度開始，一直持續到 2024 年，並於 2024 年結束，這是客戶對我們的要求。客戶要求盡快獲得盡可能多的單位。這對科平來說是個好消息。因此，我們將研究如何增加這里工廠的產量和產量，以支持我們客戶在這種情況下的使命。

Helpful, Michael. Looking at the Abrams PPAP, can you offer a little more insight on the time line there? When do you think that goes to -- I imagine the next step is LRIP, and then from there full production, and how we might address timing to that $100 million total addressable contract market you referenced.

有幫助，邁克爾。看看 Abrams PPAP，您能提供更多有關時間線的見解嗎？你認為什麼時候會發生——我想下一步是 LRIP，然後從那裡開始全面生產，以及我們如何解決你提到的 1 億美元總可尋址合同市場的時間安排。

Sure. So we've hit our milestones thus far. We expect to hit the milestones in front of us throughout this year. We'll gain more clarity into our end customers' plans. Now the PPAP is essentially what we would consider LRIP. It's the last stage of their quality review. And it's more of an automotive standard, which is good for us because that sets us up for other automotive business or other armored vehicle business, which is great. But we'll have more visibility, I'd say, in the next couple of quarters as to what their program management team is going to be requiring for implementation of the upgrades. So it's a little bit murky right now. I don't have a clear answer for you other than to say, we're still hitting our marks and our milestones on that process, and it's going great.

當然。到目前為止，我們已經達到了里程碑。我們預計今年將實現我們面前的里程碑。我們將更加清楚地了解最終客戶的計劃。現在，PPAP 本質上就是我們所認為的 LRIP。這是質量審核的最後階段。它更像是一個汽車標準，這對我們有好處，因為這為我們為其他汽車業務或其他裝甲車業務奠定了基礎，這很棒。但我想說，在接下來的幾個季度中，我們將更清楚地了解他們的項目管理團隊將需要什麼來實施升級。所以現在有點模糊。我沒有明確的答案給你，只能說，我們仍在實現這一過程中的目標和里程碑，而且進展順利。

And in that you're the exclusive supplier.

因為您是獨家供應商。

Indeed, we are.

確實，我們是。

Okay. More of a 20,000-foot perspective, you alluded many times in your prepared remarks to this transitional period that you're working with Kopin and your senior managers through. I was wondering -- I know you don't have a crystal ball, but I think yours is certain clearer than mine. Mine looks more like a bowling ball. I was just wondering if you could offer how you might recommend we consider this transitional period to last.

好的。您在準備好的講話中多次提到，您正在與 Kopin 和您的高級管理人員一起度過這個過渡時期，更多的是從 20,000 英尺的角度來看。我想知道——我知道你沒有水晶球，但我想你的肯定比我的更清楚。我的看起來更像是一個保齡球。我只是想知道您是否可以建議我們如何考慮持續這一過渡期。

My view, and Rich and I have talked about this along with the executive team and the Board of Kopin, 2023 is a positional year and a transformational year. And there's a great deal of effort going on internally around our culture, our people and talent agenda, our organization and our focus. And we've taken this year to really be inward focused, to make sure that we're ready for 2024 and 2025. Because as we've talked about, Kevin, 2024 is going to be a significant revenue year for Kopin. And 2025 is going to be an even more significant revenue year for Kopin.

我的觀點是，Rich 和我以及 Kopin 的執行團隊和董事會都討論過這一點，2023 年是定位的一年和轉型的一年。我們內部圍繞我們的文化、人員和人才議程、我們的組織和我們的重點做出了大量努力。今年我們真正關注內部，以確保我們為 2024 年和 2025 年做好準備。凱文，因為正如我們所說，2024 年將是 Kopin 收入的重要一年。對於 Kopin 來說，2025 年將是收入更為重要的一年。

Based on our current backlogs, we now have 3 quarters of positive book-to-bill. And with this recent order, we're going to have a fantastic Q3 book-to-bill, which would be 4 quarters in a row of positive book-to-bill. So the order backlog is all there to have great revenue growth over the course of 2024 and '25. The focus has been, and continues to be, building on-time in-full and delivering that revenue at great gross profit and margins for our shareholders. That's what 2023 is about.

根據我們目前的積壓訂單，我們現在有 3 個季度的訂單出貨量處於正值。憑藉最近的訂單，我們將在第三季度實現出色的訂單出貨比，這將是連續 4 個季度的正訂單出貨比。因此，積壓的訂單足以在 2024 年和 25 年實現收入的大幅增長。我們的重點一直是，並將繼續是按時全額建設，並為我們的股東帶來豐厚的毛利潤和利潤率。這就是 2023 年的意義所在。

And I'm happy to report, and I said this before, we're on track, slightly ahead, of some of our strategic initiatives around the path to profitability, on time in-full, some of the strategic initiatives and pursuits that we have and also our development around our technology. So you're going to hear more about that in Q3 and Q4 with some announcements that we're excited to put out in the market when they're ready. And I think we'll hit 2024 in full stride.

我很高興地向大家報告，我之前說過，我們在實現盈利的道路上的一些戰略舉措正在按時完成，並且略有領先，我們的一些戰略舉措和追求我們也圍繞我們的技術進行開發。因此，您將在第三季度和第四季度聽到更多相關信息，我們很高興在準備就緒後將其發佈到市場上。我認為我們將大踏步邁向 2024 年。

Okay. I appreciate it. And just sort of a follow-on on that thinking, Rich alluded to, with the reversal of comp accrual, the product margin would be in the 12% range, which I think is down a little sequentially from March. Do you think I'm just looking maybe a too short a period to evaluate your transition from -- I think all last year, your product margin was negative.

好的。我很感激。 Rich 提到，這只是這種想法的後續，隨著應計報酬的逆轉，產品利潤率將在 12% 的範圍內，我認為這比 3 月份略有下降。你是否認為我只是在尋找一個太短的時期來評估你的轉型——我認為去年全年，你的產品利潤率為負值。

Well, Kevin, let me just take that for a second. If you look at it, right, so we have an overhead -- a semiconductor overhead is a very significant piece of our overall cost. And overhead has two places to go. It's either going to end up in inventory or cost of sales via sales. If you look at our Q2 results, vis-a-vis Q2 of last year and Q1 of this year, if you combine the inventory and sales, you'll see that as those are the two places we have overhead, Q2 is down significantly compared to those, but yet we maintained margin, which means that we're greatly increasing efficiencies. Or to put it another way, had we been working with the efficiencies of 2022, we probably would have had significant negative margins.

好吧，凱文，讓我先考慮一下。如果你看一下，對了，我們有一項開銷——半導體開銷是我們總成本中非常重要的一部分。開銷有兩個地方可以去。它最終要么會進入庫存，要么會通過銷售產生銷售成本。如果你看一下我們第二季度的業績，與去年第二季度和今年第一季度相比，如果你將庫存和銷售額結合起來，你會發現，由於這是我們有管理費用的兩個地方，所以第二季度大幅下降與這些相比，但我們仍然保持了利潤，這意味著我們正在大大提高效率。或者換句話說，如果我們一直以 2022 年的效率為目標，我們的利潤率可能會出現大幅負值。

Okay. That's exactly where I was going, Rich. All right, last question for me, I'm sure you're relieved. Just maybe a little more color on how quickly you think you may be able to adopt MIT's assist on the AI side in addressing the nausea problem that you alluded to, Michael, and whether or not you think it transcends consumer and helps you in defense.

好的。那正是我要去的地方，里奇。好吧，最後一個問題問我，我相信你會放心的。邁克爾，你認為你可以多快地採用麻省理工學院在人工智能方面的幫助來解決你提到的噁心問題，以及你是否認為它超越了消費者並幫助你進行防禦，也許還有更多的色彩。

Great question, Kevin. Whether you're a war fighter, a gamer, a doctor, everyone using a "see-through optic" or AR/VR glass has the same issue. And that is the human brain interprets video information -- or sight issue information differently. We all focus on building the greatest display type technology, and we think that will solve the day. In reality, what we're going to do is different than that. We still are going to make fantastic displays, 4K, 8K, 16K, whatever it is. But what we're going to do is match the technology to the human, not the human to the technology. And that, I think, is what you're going to hear from us in Q3, Q4 and 2024, is we're going to take our technology to the human as opposed to the other way around.

好問題，凱文。無論您是戰士、遊戲玩家還是醫生，每個使用“透視光學器件”或 AR/VR 眼鏡的人都會遇到同樣的問題。這就是人腦對視頻信息或視覺信息的解釋不同。我們都專注於構建最偉大的顯示類型技術，我們認為這將解決這一問題。事實上，我們要做的與此不同。我們仍然會製造出色的顯示器，4K、8K、16K，無論是什麼。但我們要做的是將技術與人相匹配，而不是人與技術相匹配。我認為，您將在第三季度、第四季度和 2024 年從我們那裡聽到，我們將把我們的技術帶給人類，而不是相反。

So that's why we signed up with MIT and the CSAIL program. We are sitting on the shoulders of giants in that program. If you look at some of the contributors to that program, they're the best of the best in the industry. And we'll be working with them to solve these human-centric computer issues so that folks can use our technology more easily, more readily and with much more comfort than they ever have before because that's what's gating the adoption rates of AR/VR glasses in consumer as well as military and medical. So those are the problems that we're going to attempt to solve.

這就是我們與 MIT 和 CSAIL 項目簽約的原因。在該計劃中我們坐在巨人的肩膀上。如果您查看該計劃的一些貢獻者，您會發現他們是業內最優秀的人。我們將與他們合作解決這些以人為中心的計算機問題，以便人們能夠比以前更輕鬆、更輕鬆、更舒適地使用我們的技術，因為這就是限制 AR/VR 眼鏡採用率的原因在消費以及軍事和醫療領域。這些就是我們要嘗試解決的問題。

The great news is we have all the technology that we need. The piece that we're missing is the AI algorithm development side of things. And no greater place than MIT's CSAIL to work on that technology, and we continue to invest in it. It's a program that I started the day that I started at Kopin. And we're very excited about it, and we'll be sharing more with you in the coming quarters.

好消息是我們擁有所需的所有技術。我們缺少的是人工智能算法開發方面的部分。麻省理工學院的 CSAIL 是研究該技術的最佳場所，我們將繼續對其進行投資。這是我在 Kopin 上班的那天就開始的一個項目。我們對此感到非常興奮，我們將在接下來的幾個季度與您分享更多信息。

When you look at your modules, Michael, are they extensible and handling the computations? Or will it require, I guess, additional integration with a partner?

邁克爾，當你查看你的模塊時，它們是否可擴展並處理計算？或者我猜它是否需要與合作夥伴進行額外的集成？

I think the latter, I think it will require certainly more sophisticated computers that are computational algorithms that we currently cannot do in our backplane technology. But we do have a plan for that. I think the technology is available. We know how to use it. I think what's missing for us is really the algorithm development and the ability to trial and test our theories in an environment with others that's useful and noncompetitive. And everyone in that program is working in the same direction to solve some of these human-centric issues.

我認為後者肯定需要更複雜的計算機，這些計算機是我們目前在背板技術中無法做到的計算算法。但我們確實有一個計劃。我認為技術是可用的。我們知道如何使用它。我認為我們真正缺少的是算法開發以及在與其他有用且非競爭性的環境中試驗和測試我們的理論的能力。該計劃中的每個人都在朝著同一方向努力，以解決其中一些以人為中心的問題。

So I don't think it's a technology problem, so much that we can't traverse, I think it's more of an awareness problem and a use case and commissioning issue that we need to solve. And over the next couple of quarters, you're going to see and hear how we're going to solve it as Kopin. And I'm very impressed with the level of interest that we've gotten already on this new technology platform, which we'll introduce, like I said, in the next couple of quarters. We're working with a few select, handful customers to bring this forward. One of them is classified. The other one is a consumer company. And we hope to have something signed with those folks very shortly.

所以我不認為這是一個技術問題，以至於我們無法遍歷，我認為這更多的是一個意識問題以及我們需要解決的用例和調試問題。在接下來的幾個季度中，您將看到並聽到我們將如何以 Kopin 的身份解決這個問題。我們對這個新技術平台的興趣程度給我留下了深刻的印象，正如我所說，我們將在接下來的幾個季度推出該平台。我們正在與一些精選的客戶合作來推動這一目標。其中之一是機密。另一家是一家消費公司。我們希望很快就能與這些人簽署一些協議。

Gentlemen, that was the final question. I will now hand over to Michael Murray for closing remarks.

先生們，這是最後一個問題。現在請邁克爾·默里致閉幕詞。

Thank you, operator. Well, Q2 was a very interesting quarter for Kopin. We've made significant progress as a team, a company. Our customers are enjoying a higher on-time in-full rate, and we believe this trend will continue through Q3 and Q4, and we look forward to updating you on our progress on the next call. Thank you very much for joining. We appreciate it. Take care, and have a great day.

謝謝你，接線員。嗯，第二季度對 Kopin 來說是一個非常有趣的季度。作為一個團隊、一家公司，我們已經取得了重大進展。我們的客戶正在享受更高的準時全額率，我們相信這一趨勢將持續到第三季度和第四季度，我們期待在下次電話會議上向您通報我們的最新進展。非常感謝您的加入。我們很感激。保重，祝你有美好的一天。

Thank you. Ladies and gentlemen, this concludes today's conference. Thank you for attending, and you may now disconnect your lines.

謝謝。女士們、先生們，今天的會議到此結束。感謝您的出席，您現在可以斷開線路了。