TAUNTON – Transistor and microdisplay maker Kopin Corp. (Nasdaq: KOPN) today posted a third-quarter profit of $1.5 million, compared with a year-ago loss of $387,168, on revenue that grew 5.1 percent to a record $30.7 million. The company cited its decision to focus on high-margin applications, de-emphasizing sales of lower-end consumer electronics.

Earnings per diluted share amounted to 2 cents, compared with its loss of 1 cent per diluted share in the year-ago period (READ MORE) and its loss of 2 cents per share in the 2008 second quarter (READ MORE), Kopin said.

Results for the fiscal quarter ended Sept. 27 included one-time losses of about $2.5 million – a $2.0 million loss on Kenet Inc., a semiconductor company in which Kopin held an equity stake until it was acquired by Intersil on Sept. 30; and a $500,000 impairment charge on corporate debt securities – as well as a one-time gain of about $1.2 million related to favorable currency-exchange rates.

“Despite a challenging macroeconomic climate, we reported the highest quarterly revenue in our history and strong quarterly net income,” President and CEO John C.C. Fan said in an after-market statement. Kopin boosted its gross margin “by more than 1,600 basis points” to 33.8 percent, and its operating income to $3.22 million, “up more than 575 percent from the same period in 2007,” the CEO said. He credited “our strategy of focusing on military products and other applications where the power of our display technology is a significant differentiator that yields higher margins.”

Military display sales rose to $10.5 million, a 239-percent increase from the year-ago $4.4 million, “reflecting our participation in many U.S. military programs,” Fan said. “We expect to generate strong revenue in this category in the fourth quarter – and in 2009 – as we increase shipments for the TWS II (Thermal Weapon Sight II) and TWS Bridge programs and begin shipments for the ENVG (Enhanced Night Vision Goggle) program.” (READ MORE)

Meanwhile, sales for video eyewear applications edged up to $2.4 million from the year-ago $2.3 million, while sales for other consumer electronics applications fell 50.2 percent to $4.8 million from the 2007 third quarter’s $10 million.

But Kopin’s “III-V” integrated-circuit segment “remained a steady contributor during the quarter,” Fan said. “Among our wireless circuit partners, we have seen a continued migration toward InGaP (indium gallium phosphide) power amplifiers to handle the performance demands of today’s wireless handsets and mobile devices,” he added. “We introduced our first InGaP [heterojunction bipolar transistors (HBTs)] a decade ago, and our deep expertise only solidifies our competitive advantage as the market transitions toward this technology.”

Third-quarter highlights included Kopin’s August announcement of a $3 million state grant, to help expand the company’s Taunton production facility (READ MORE) and Kodak’s July decision to incorporate the Kopin CyberEVF electronic viewfinder in its new EasyShare digital camera. (READ MORE)

As of Sept. 27, Kopin reported total assets of $160.23 billion – including cash and marketable securities of $92.0 million – and had no long-term debt.

“We begin the fourth quarter in a strong operational and financial position,” Fan declared. “While the macroeconomic environment is unsettled, we believe our strong liquidity and our experience in managing through previous periods of financial contraction will enable us to succeed. With our technical skill, differentiated products, manufacturing expertise and emphasis on higher-value applications, we are focused on continuing to improve our product mix, generate higher margins and drive revenue growth,” he said.

Looking ahead, Fan added, “for full-year 2008, Kopin remains on pace to achieve our revenue guidance of $105 million to $115 million.”

Kopin Corp. (Nasdaq: KOPN) is a maker of lightweight, power-efficient, ultra-small liquid crystal displays (LCDs) and heterojunction bipolar transistors (HBTs) for a variety of applications, under trademarks including CyberDisplay and The NanoSemiconductor Co. For additional information, visit www.kopin.com.