Kopin Corporation (NASDAQ: NASDAQ:KOPN) reported a robust third quarter in 2024, with CEO Michael Murray announcing a projected $75 million in orders for the year, potentially marking the highest in the company's 40-year history. The earnings call on November 12, 2024, revealed a 26% year-over-year increase in revenue to $13.3 million for Q3, primarily fueled by a 109% surge in defense product revenues. Despite this, the company experienced a net loss of $3.5 million for the quarter, an increase from the previous year's $2.5 million, owing to higher legal fees and other expenses.
Key Takeaways
- Kopin Corporation's Q3 2024 revenue rose to $13.3 million, a 26% increase year-over-year.
- Defense product revenues significantly increased by 109% to $10.4 million.
- The company anticipates over $75 million in orders for 2024, a potential record.
- Net loss increased to $3.5 million for Q3 2024 from $2.5 million in Q3 2023.
- Strategic investments and partnerships are expected to drive future growth in defense and medical markets.
Company Outlook
- Kopin anticipates significant growth in domestic and international markets, driven by U.S. defense spending and NATO commitments.
- The international business, currently less than 5% of total revenue, is expected to expand substantially.
- A strategic shift to a U.S. DoD-approved OLED deposition provider aims to improve supply chain resilience.
- The company is exploring new consumer applications and making investments in its North American Business Development team.
Bearish Highlights
- The company reported a net loss of $3.5 million for Q3, an increase from the $2.5 million loss in the same quarter the previous year.
- Litigation expenses were significant, with $1.5 million reported for the September quarter.
- The book-to-bill ratio for Q3 was slightly below 1, indicating potential challenges in order fulfillment.
Bullish Highlights
- Kopin's backlog of purchase orders increased to $75 million, up from $55 million in Q2.
- There are ongoing negotiations expected to yield an additional $20 million in new orders for Q4.
- The company has seen improvements in OLED display performance and is focusing on defense, medical applications, and thermal weapons site orders.
Misses
- Product revenues decreased to $5.4 million, accounting for a 99% share of net product revenues, due to lower estimated rework costs.
- R&D expenses decreased to $2.6 million from $3.1 million year-over-year, following the completion of U.S. defense programs.
- SG&A expenses increased to $5.2 million, mainly due to legal fees from the Blue Radios lawsuit.
Q&A Highlights
- Murray confirmed expectations of approximately $20 million in new orders for Q4.
- Sneider detailed litigation expenses and projected a decrease in routine legal expenses, with potential additional costs from an ongoing appeal.
- Delays in orders, particularly concerning rotary wing customer Elbit, were acknowledged as a factor in the company's outlook.
Kopin's leadership remains optimistic about the company's financial trajectory, emphasizing advancements in quality, manufacturing automation, and strategic partnerships. The company's focus on defense and medical markets, alongside the anticipated growth in international business due to geopolitical factors, positions Kopin for potential expansion and revenue growth. Despite the increased net loss for the quarter, Kopin's strategic investments and backlog of purchase orders reflect confidence in its future performance.
InvestingPro Insights
Kopin Corporation's recent financial performance and future outlook, as reported in their Q3 2024 earnings call, can be further contextualized with real-time data from InvestingPro.
Despite the company's optimistic projections for record orders in 2024, InvestingPro data reveals some challenging financial metrics. Kopin's market capitalization stands at $110.31 million, reflecting its current valuation in the market. The company's revenue for the last twelve months as of Q2 2024 was $41.55 million, with a concerning revenue growth decline of -7.95% over the same period.
One of the InvestingPro Tips highlights that Kopin "holds more cash than debt on its balance sheet," which could provide some financial flexibility as the company pursues growth opportunities in defense and medical markets. This aligns with the company's strategic investments and partnerships mentioned in the earnings call.
However, another InvestingPro Tip cautions that Kopin "suffers from weak gross profit margins." This is evident in the reported gross profit margin of 14.48% for the last twelve months as of Q2 2024. This low margin could explain the increased net loss reported in Q3 2024 and may pose challenges as the company aims to capitalize on its growing order backlog.
The stock's performance has been volatile, with a year-to-date price total return of -63.05% as of the latest data. This volatility is consistent with another InvestingPro Tip stating that the "stock generally trades with high price volatility," which investors should consider when evaluating Kopin's potential.
For readers interested in a more comprehensive analysis, InvestingPro offers additional tips and metrics that could provide deeper insights into Kopin's financial health and market position. Currently, there are 5 more InvestingPro Tips available for Kopin Corporation, which could be valuable for investors looking to make informed decisions based on a broader set of financial indicators.
Full transcript - Kopin Corporation (KOPN) Q3 2024:
Operator: Good morning, everyone, and welcome to the Kopin Corporation Third Quarter 2024 Earnings Call. [Operator Instructions]. At this time, I'd like to turn the conference call over to Brian Prenoveau, Investor Relations for Kopin. Please go ahead.
Brian Prenoveau: Thank you, Operator and good morning, everyone. Before we get started, I'd like to remind everyone that during today's call, taking place on Tuesday, November 12, 2024, 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 results will be realized. The company undertakes no obligation to update the forward-looking statements made during today's call. 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. 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 third quarter 2024 results. I would now like to turn the conference over to Michael Murray. Michael?
Michael Murray: Thank you, Brian. Good morning to everyone, and welcome to our third quarter 2024 earnings call. We’d like to take a moment to express our gratitude to all the veterans, both within and outside of our organization as well as those currently serving in the Armed forces. Their dedication and service are invaluable to Kopin’s on-going mission to save lives and enhance human performance through advancements and optical solutions. We are proud of the substantial progress we’ve made on our transformation plan, which is getting momentum and achieving key milestones. We now project over 75 million in orders for 2024 and beyond, potentially the highest annual order total in our company's 40-year history. This order book includes repeat orders from existing customers as well as significant new orders from both U.S. and international clients, demonstrating our growth in revenue, customer base and market reach. In the third quarter we achieved $13.3 million in revenue, a 26% increase over Q3, 2023. With continued sequential revenue growth, defense products delivered $10.4 million in revenue, 109% year-over-year increase. Notably, five new customers placed development orders which we expect will drive multimillion dollar production orders in the years ahead. Given these are multi-year Indefinite Demand and Quantity or IDIQ contracts secured by our customers. In defense, our order book has shown significant strategic progress. We reached the final production qualification milestone for our High performance Organic Light Emitted Diode on Silicon display designed for Collins Aerospace F-35 Lightning 2 Helmet Mounted Display System or HMDS. As a sole source supplier of high brightness AML CD displays for this system, we are fulfilling a multiyear agreement that should continue on for several more years. Recently we received a $2 million follow on production order for these AMLCD displays, extending our backlog and preparing us for next generation OLED on silicon microdisplay production. We anticipate both display types will be in production for an extended period of time. We also secured a $1.3 million follow on order for our Emerald microdisplay module for a major weapon site product as part of a multiyear production program. This positions us for strong revenue growth especially as our larger thermal weapons site program and subsequent production is expected to increase into fiscal year 2025. In the industrial market, we secured a $1.5 million follow on contract for our near eye, thermal imaging system integrated into firefighters masks. This system, featuring a miniaturized AMLCD and optics within the face piece, enhances safety and effectiveness for firefighters. Turning to our 3D AOI automated optical inspection segment, we launched our next generation SXGA FLCoS microdisplay system called the R-15. Mirtec, a leading provider of 3D AOI technology in South Korea, secured our first purchase order for this device. This affordable compact solution positions us well to meet growing demand in Asia and globally. Additionally, we received a production order for our high resolution 4 megapixel 2K SLM (NASDAQ:SLM) system also for 3D AOI integration. With the global 3 AOI market projected to grow from 700 million to 3 billion by 2030, Kopin is positioned to serve various segments budget sensitive with the R-15 mid-range with our SXGA model and high resolution with the 2K-R11 model as well. In the medical market, our growth continues with another production order for the CR3 wearable surgical monitor from HMDmd. Supported by positive feedback from surgical equipment manufacturers, we expect adoption to increase as more surgeons try the CR3 through HMDmd's Tier 1 partnerships. Overall, our book-to-bill ratio has exceeded expectations and we are negotiating additional substantial orders anticipated by year end. This progress reaffirms our strategy to focus Kopin on defense and high performance integrated products. Notably, our new internal processes aimed at enhancing return on investment for internally funded research and development are showing promise and early results. Internal R&D investments have led to initial purchase orders and strong demand signals for our new products which are robust, offer broader functionality and command higher average selling prices due to the value they provide. Quality improvements also continue. Incoming inspection rates at our top customers reached 94% in Q3 and October as well, up from 86% in the previous quarter, positively impacting product gross margins and customer satisfaction. We're making significant strides in quality and organizational evolution with more progress to come. As our quality standards continue to improve, becoming more stable and predictable. We also need to innovate our systems design processes and manufacturing workflows to meet the rising demand and higher volume production expectations. A new strategic focus for 2025 will be enhancing manufacturing and systems automation. Now turning to other key initiatives including our one Kopin initiative. In response to increased defense spending in Southeast Asia, Europe and NATO countries, we have expanded the scope of our European based 3D AOI sales team. They now promote the full range of Kopin products and capabilities to defense customers in Europe and Southeast Asia as well. Early indicators show this strategy is succeeding as we're seeing new opportunities and foreign customers entering our pipeline. One of our foundational strategic initiatives, the fab-light strategy, remains on track. Kopin continues to partner with multiple fabrication facilities across Asia, Europe and the United States, specifically for U.S. DoD applications and our four display types. Our decision to strengthen OLED on silicon and our micro led capabilities for U.S. Department of Defense applications has been proven timely given the possibility of further supply chain security requirements and potential tariffs under the new administration. Additionally, we're collaborating closely with government and industry partners to build a long-term, higher volume and more innovative manufacturing approach within the United States. Now I'd like to highlight a few additional notable accomplishments from the quarter. This quarter we expanded our medical technology portfolio by introducing proprietary high resolution fast Spatial Light Modulators or SLMs for use in fluorescent super resolution microscope systems for biomedical research. These advanced SLMs enhance image resolution, often down to the molecular level, significantly advancing research capabilities at leading biomedical institutions worldwide. In the defense sector, we partnered with Wilcox Industries on the FUSION CLAW, a cutting edge Headborne information system offering integrated day and night heads up display solutions. This partnership is the cornerstone of our IVAS Now strategy which introduces an integrated visual acuity system for warfighters supporting day and night capabilities compatible with current night vision goggles and helmet mounted systems. With millions of night vision goggles in use today, this solution provides immediate market potential by enhancing telemetry and thermal imaging in a heads up configuration, improving situational awareness. Additionally, at AUSA, we were featured in the Kinetic Suite [ph] to showcase our neural display technology platform. Neural Display is a sophisticated OLED or microled hardware and software system that includes embedded sensors for eye tracking, position and gaze detection. With the ability to process this tracking data in real time through Kopin’s proprietary AI powered software within the display's backplane. This real time data just optimizes user experience in high stakes environments. The platform has now reached alpha testing, marking a major milestone in the development of our neural display architecture. We believe this display system will be an ideal fit for the next generation of defense visual augmentation systems. It also has attracted significant interest from consumer spatial computing manufacturers thanks to its ability to reduce size, weight and power consumption while maintaining high image quality, eye and pupil tracking and dynamic controls. We are extremely excited about this new technology. Currently, we are collaborating with several defense and consumer companies on innovative design approaches, software integration strategies, and exploring potential new business models. As we look to the future and see our business fundamentals strengthening, we're experiencing favorable market dynamics in the AR VR sector that align with our mission and technology roadmaps. Additionally, geopolitical factors and the new administration have created strong tailwinds for our business. Given these factors, we're increasingly optimistic about our financial trajectory for 2025 and beyond. With that, I'll now turn the call over to our CFO Rich Snyder, to review our results from the third quarter in further detail. Over to you, Rich.
Richard Sneider: Thank you, Michael. Turning to our financial Results for the third quarter 2024. Total (EPA:TTEF) revenues from Q3 2024 were $13.3 million versus $10.6 million for the prior year, a 26% increase year-over-year. Product revenues for the third quarter ended September 28, 2024 were $10.9 million compared to $5.5 million in the third quarter of September 30, 2023. The increase in product revenues was the result of higher defense product revenues which increased $5.4 million year-over-year. In the third quarter of 2024, funded research and development revenues were $2.3 million, a decrease of $2.7 million as compared to Q3 of 2023 due to the completion of several programs like the monochrome micro-LED program which is now entering low volume initial production. Cost of product revenues for the third quarter of 2024 were $8.3 million or 76% of net product revenues compared with $5.4 million or 99% of net product revenues in the third quarter of 2023. The decrease in cost of product revenues as a percent of sales was a result of a decrease in expected cost because of lower estimated rework costs, essentially improved quality. R&D expenses for the third quarter of 2024 were $2.6 million compared to $3.1 million in the year ago quarter. This was primarily due to a decrease in funded R&D expense of approximately $1.2 million on U.S. defense programs that were previously noted were completed. This was partially offset by an increase of 700,000 in internal R&D expense for process improvement. SG&A expenses were $5.2 million in the third quarter of 2024 compared to $4.8 million in the third quarter of 2023. The increase was primarily due to an increase in legal fees of 400,000, partially offset by a decrease in public relations fees of 100,000. Legal expenses associated with the Blue Radios matter in the third quarter of 2024 and 2023 were $1.5 million and $1.2 million respectively. With the trial portion of the lawsuit behind us and potential appeals process in front of us, we expect legal fees to normalize at a much lower level than recently experienced. We believe the appeals process involves much less expense than funding a trial. Other expense net for Q3 of 2024 includes a $1.1million impairment loss on equity investments. Turning to the bottom line, the net loss for the quarter of 2024 was $3.5 million or $0.03 per share, compared with the net loss of $2.5 million or $0.02 per share for the third quarter of 2023. The amounts discussed above are based on our current estimates and listeners should review our Form 10-Q for the nine months ended September 30th 2024 for any possible changes and of course additional information and filings. And with that, I'll turn it over to Michael for closing remarks.
Michael Murray: Thanks, Rich. This quarter's results demonstrate our ongoing success in delivering solutions which improve the human experience, performance and save lives. Our operational improvements, stronger customer relationships and momentum in orders give us greater visibility and a clear plan towards achieving sustainable net income profitability. We continue to strengthen margins through improved quality rates, cost controls and strategic investments in our products, automation and our talented and dedicated workforce. Our pipeline of qualified opportunities has grown significantly in recent quarters, largely driven by the U.S. need to replenish stockpiles, modernization of defense technology and weaponry, and respond to recent geopolitical developments. Increased sovereign and NATO spending further boost this trend. We anticipate that these new partnerships and progress will fuel full rate production and they'll lead to contributing larger future returns. To capture these opportunities and accelerate our market momentum, we've recently expanded our North American Business Development team with two new hires and we retained a consultant specializing in consumer applications. Thank you all for your time today, for your interest in Kopin. I'd also like to thank and extend our gratitude to our employees, our customers and stakeholders for their dedication and continued support. With that operator, we'll now offer time to take some questions.
Operator: Thank you. [Operator Instructions] We'll take our first question from Jason Schmidt with Lake Street. Your line is now open.
Jason Schmidt: Hey guys, thanks for taking my questions and congrats on the strong results. Michael, want to dig in a little bit on the international market? You noted some nice traction there. Just curious where you're seeing that and I guess relatedly, is your sales infrastructure to address the international market fully built out at this point.
Michael Murray: So international, I think is a growth opportunity for us Jason, thanks for the question. Right now the international business is actually, I'd say less than 5% of our total revenue this year. We do exceed see that exceeding our expectations next year and the year after just simply because of geopolitical issues in Israel, Ukraine and some other hotspots that currently need the technology that we have. We also see the perturbation of NATO requesting and demanding 2% of GDP actually be spent. So I think as we move forward, international business for us in defense specifically is going to grow exponentially. Moreover, we also see interesting trends in the medical side of the business with future potential medical customers globally here, looking at the CR3 module as well as those displays for high end microscopes as we talked about. So overall, I think international is going to grow for us. And that's the pivot that we made with the three day AOI team, which resides mostly in Europe. But we're not fully built out for international sales just yet. We expect to make some small investments and augmentations, if you will, to service that business next year in the future.
Jason Schmidt: Okay, that's helpful. And then I know you noted kind of a strong book-to-build year to date. Just curious what that number was for Q3.
Michael Murray: Q3, it was slightly below 1 to 1.
Jason Schmidt: Got you. And then just the last one from me and I'll jump back in the queue. Obviously it's early, but we'd just love to hear your thoughts on how your business might be potentially impacted with the change in administration.
Michael Murray: Sure. So I think firstly I think the new administration, based on what we understand today, which is early, is going to be good for Kopin in the long run, mainly because of the strong emphasis on NATO to spend 2% of GDP, which was the previous administration's big focus. And I think that's going to continue, number one. Number two, I see the budget process, including plus up requirements for defense spending in the United States. So I think that's the second tailwind that we see and then the third tailwind that we see with the new administration is just the ability for smaller companies, small cap companies like Kopin, to grow. And I think that's a big focus of the new administration. So pound for pound, we see this as a positive for Kopin.
Jason Schmidt: Perfect. Appreciate the caller. Thanks a lot, guys.
Michael Murray: And one other note, Jason, real quick, although our book-to-bill this quarter was not positive, the book-to-bill for the year remains ahead of schedule and positive. So I wanted to make that distinction.
Jason Schmidt: Okay, thank you.
Operator: Thank you. We'll take our next question from Victor Santiago with Stifel. Your line is now open.
Victor Santiago: Hey, good morning guys. This is Victor on from Matt Sheeran. Just a question on revenue in the quarter is a bit better than we had expected of that kind of mid-single digit sequential growth. Was that a function of pulling orders from Q4 or was that just your ability to ramp new programs in the quarter?
Richard Sneider: It was a combination of product mix and our ability to produce. Remember, we're on 606. So essentially our revenues are not based on shipment, they're really based on percent completion. So to the extent the supply chain is flowing nicely, it allows us to get ahead and build product. And so the supply chain worked very well this quarter. And also we had a favorable product mix. Some of the smaller orders that you see actually have much bigger gross margins and are much more profitable.
Victor Santiago: Got it. And then I think last quarter you talked about growing gross margins sequentially through the year. You guys saw a nice bump here in Q3. Can we continue -- can we expect that to continue going to Q4?
Michael Murray: That's the plan.
Victor Santiago: Got it. Fair enough. That's all I had. Thank you.
Operator: Thank you. [Operator Instructions] We'll take our next question from Kevin Dede with HC Wainright. Your line is now open.
Michael Rich: Thanks, gentlemen, for having me on. I'm Michael Rich. Michael, would you mind diving into the neural display a little bit more? I mean, you spoke to specific interests, both on DoD and the consumer side. You've got a new consumer applications consultant. I know it's early, I get it. But if you could give us a little more color there. We see that as an exciting opportunity for Kopin.
Michael Murray: Sure. From a standpoint of neural display, we see the market going basically repeating history. If you look at original cell phones as an example, they were built with individual components, not much integration. And then overtime, ICs won the day, integrated circuits won the day. We see that same sort of trend with spatial computing devices or AR VR goggles that sensor fusion systems or integrated circuits need to drive that innovation. And neural display is a great example of that. It removes six cameras from some of the spatial computing devices. Six cameras is very costly, very high power, and creates a lot of weight on the nose. So we think neural display has a tremendous value proposition in both consumer and medical, as well as, obviously, defense. On the consumer side of things, we think all the consumer companies at this point and AR VR are back to the drawing board, which is good news for us because we're farther down the path with neural display. I can't talk about some of the things we're working on because they are under NDA at this point, but we are making pretty substantial progress thus far.
Michael Rich: Has the company decided on whether it might or might not offer a demo of it at CES? I know that had or was being considered at some point.
Michael Murray: We're still trying. It's up for debate. We're struggling with it, quite frankly, to get a better image quality out of it. And we still have a pretty strong plan to make it to CES within the neural display as an actual display running our Software (ETR:SOWGn) and the AI. As you can imagine, in the last 18 months, that's been a Herculean lift for our engineering teams. So still, TBD, where that's the plan, but we are struggling with it.
Michael Rich: Regarding. I think it was Victor's question on the change in the administration. I'm wondering if you looked sort of the next layer of the [Indiscernible] and your supply chain and the potential for tariffs to impact that. How might you be hedging yourself?
Michael Murray: Great question. Thankfully, one of the first strategic initiatives that we had, Kevin, was our fab-light model and the concern around our Chinese OLED deposition supply chain. I'm very pleased to report that we've moved our sensitive USD DoD applications to a new provider that is U.S. DoD approved. The vast majority of our components will have a dual source. U.S. DOD as well as our Chinese deposition partner specific to OLED moving forward will be complete that transition this quarter. So very pleased and proud of the team for their progress. And more importantly, we're actually seeing better quality results and better performance out of our new partner on our OLED displays. So tremendous progress in that area. And it was very timely that we took that decision when I came in a couple of years ago. So that strategy is now proving positive for us.
Michael Rich: So have you. I guess I'm wondering if maybe if there's any way to quantify that. Do you have to worry about rotating manufacturing with a change in import policy?
Michael Murray: No, not necessarily.
Michael Rich: Okay.
Michael Murray: No, it's more about we build our backplanes through either Taiwanese or Korean fabs. Then the deposition process can happen anywhere in the world where we see technology benefit or performance benefit or cost benefit as an example. And that's part of the fab-light strategy is we will go to the partners that have the best cost, best quality and best performance. So that allows us to do that, which is take our backplane designs and then deposit OLED or micro LED material where it makes best sense for our customer base, the geopolitical issues. So it just makes us much more flexible. But as I mentioned in my prepared remarks, we also have an advocacy for a larger footprint here in the United States for Kopin. And that larger footprint is something that we're actively working on with the government, the government customers. And I'm very pleased to report that the government customer is supporting us in that endeavor, whether that be through DPA or CHIPS Act funding. But we do have a larger advocacy around building out a footprint here in the United States for all of our technology needs for the U.S. DoD.
Michael Rich: Well, I'd imagine that's a pretty long lead time though, right?
Michael Murray: Correct.
Michael Rich: Yes. Okay. On backlog, Michael, help me with some of the numbers you mentioned. I think, in your prepared remarks a $75 million order number, which I think is up from $55 million when you last talked about the June quarter. I'm wondering if I'm in the right ballpark on those and what drove the big increase.
Michael Murray: You're exactly right. From Q2, we were sitting with 55 million of purchase orders in the calendar year at that point, our expectations, due to several negotiations that are ongoing, that we'll receive in the realm of 20 million of new orders for this quarter. We might see a little bit of creep over the Christmas holiday into Q1 but my sense is right now the negotiations should land us with those orders in Q4.
Richard Sneider: And again if we do end up with $75 million of purchase orders for this year that would be a record for our 40-year old company.
Michael Rich: I appreciate that. Congratulations. Is there any more insight or should we look to pretty much what you focused on mostly DoD, foreign and domestic and medical.
Michael Murray: I think that's accurate. What we're expecting this quarter is some influx of thermal weapons site orders for production next year as well as our helmet based programs for rotary wing and fixed wing applications. So we're expecting orders that customer for the fixed wing. We already mentioned earlier in the call we're expecting orders for carry on production. The rotary wing customer is Elbit and they are otherwise engaged as you can imagine Kevin in Israel at the moment. So we've been expecting those orders for quite some time and we are seeing light at the end of the tunnel to receive those orders for our rotary wing applications this quarter.
Michael Rich: Okay, last question for me before I hop back in. Understand that the that Judge Kaine is going to consider the ruling in Massachusetts and I was wondering number one and whether or not you have any insight on how that might be going. And number two Rich [ph] talked to I think 1.2 million and 1.5 million in litigation related expense I think in the September quarter this year and last but I got confused on which one was which and what would you expect that litigation expense to fall to in December, the December quarter.
Richard Sneider: So 1.5 is 24, 1.2 is 23.
Michael Rich: Okay, got it. And historically we're somewhere now at some point there may be an appeal and there will be a chunk of expense that we estimate will be 5 to 600,000.
Richard Sneider: When that's going to happen we don't know. It's all dependent on when the judge ultimately puts out an opinion. Otherwise we run about 150 to 200,000 a quarter in legal expenses between patents and just normal public company stuff and we do not have any visibility into when Judge Kaine in Colorado will render his opinion.
Michael Rich: Thank you for offering that gentleman. I appreciate you entertaining my questions. Congrats on that. Nice job in the quarter.
Michael Murray: Thanks Kevin. Take care.
Operator: And we have no further questions in the queue at this time. I'll turn the program back over to Michael Murray.
Michael Murray: Thank you operator. I just wanted to say thank you to the tremendous team here at Kopin for their focus, dedication and exemplary results this quarter. It's a great milestone in our path to further revenue and gross margin expansion. And we thank everyone for joining us today. Thank you very much.
Operator: This does conclude today's program. Thank you for your participation. You may disconnect at any time and have a wonderful day.
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