- Fifth consecutive quarter of year-over-year revenue growth and positive net income from continuing operations
- Total revenues of
$13.8 million for the three months endedJune 30, 2018 , up 22% compared to the three months endedJune 30, 2017 - Net income improved significantly to
$1.1 million for the three months endedJune 30, 2018 , compared to$(0.2) million for the prior-year fiscal quarter - Adjusted EBITDA improved to
$1.3 million for the three months endedJune 30, 2018 compared to$0.6 million for the prior-year fiscal quarter
Adjusted earnings before interest, taxes, depreciation and amortization ("Adjusted EBITDA") is a non-GAAP financial metric used by management to measure operating performance. This term is defined elsewhere in this release. Please see schedules appearing later in this release for reconciliation of non-GAAP financial measures to the most directly comparable GAAP measures.
“I’m very proud of the Luna team for driving the businesses to another
strong quarter of growth,” said
In a separate release issued today, Luna also announced it has sold its
Optoelectronic Solutions business to
“As we’ve mentioned previously, we are well positioned to drive growth
in Luna’s core fiber optic-based test and measurement business to better
serve this rapidly expanding market, which is projected to grow to more
than
Second-Quarter and Six-Month Financial Summary
Total revenues for the three months ended
Gross profit was
Selling, general and administrative ("SG&A") expenses were
Net income from continuing operations improved to
Net income attributable to common stockholders for the three months
ended
For the first six months of fiscal 2018, Luna reported net income of
Non-GAAP Measures
In evaluating the operating performance of its business, Luna’s management considers Adjusted EBITDA, which excludes certain charges and credits that are required by generally accepted accounting principles (“GAAP”). Adjusted EBITDA provides useful information to both management and investors by excluding the effect of certain non-cash expenses and items that Luna believes may not be indicative of its operating performance, because either they are unusual and Luna does not expect them to recur in the ordinary course of its business, or they are unrelated to the ongoing operation of the business in the ordinary course. Adjusted EBITDA should be considered in addition to results prepared in accordance with GAAP, but should not be considered a substitute for, or superior to, GAAP results. Adjusted EBITDA has been reconciled to the nearest GAAP measure in the table following the financial statements attached to this press release.
Conference Call Information
As previously announced, Luna will conduct an investor conference call
at
About Luna
Forward-Looking Statements
The statements in this release that are not historical facts constitute
“forward-looking statements” made pursuant to the safe harbor provision
of the Private Securities Litigation Reform Act of 1995 that involve
risks and uncertainties. These statements include Luna's expectations
regarding its growth potential, the growth of the fiber optic-based test
and measurement market, and its business focus. Management cautions the
reader that these forward-looking statements are only predictions and
are subject to a number of both known and unknown risks and
uncertainties, and actual results, performance, and/or achievements of
Luna may differ materially from the future results, performance, and/or
achievements expressed or implied by these forward-looking statements as
a result of a number of factors. These factors include, without
limitation, failure of demand for Luna's products and services to meet
expectations, failure of target market to grow and expand, technological
and strategic challenges and those risks and uncertainties set forth in
Luna’s periodic reports and other filings with the
Luna Innovations Incorporated | ||||||||||||||||
Consolidated Statements of Operations | ||||||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
2018 | 2017 | 2018 | 2017 | |||||||||||||
(unaudited) | (unaudited) | |||||||||||||||
Revenues: | ||||||||||||||||
Technology development | $ | 5,466,281 | $ | 4,602,272 | $ | 10,103,056 | $ | 8,838,375 | ||||||||
Products and licensing | 8,306,367 | 6,690,759 | 15,862,763 | 12,541,554 | ||||||||||||
Total revenues | 13,772,648 | 11,293,031 | 25,965,819 | 21,379,929 | ||||||||||||
Cost of revenues: | ||||||||||||||||
Technology development | 3,945,126 | 3,443,954 | 7,298,628 | 6,553,423 | ||||||||||||
Products and licensing | 4,155,054 | 3,482,867 | 7,968,605 | 6,583,913 | ||||||||||||
Total cost of revenues | 8,100,180 | 6,926,821 | 15,267,233 | 13,137,336 | ||||||||||||
Gross profit | 5,672,468 | 4,366,210 | 10,698,586 | 8,242,593 | ||||||||||||
Operating expense: | ||||||||||||||||
Selling, general and administrative | 3,767,456 | 3,367,716 | 7,577,072 | 7,089,889 | ||||||||||||
Research, development and engineering | 1,003,863 | 818,891 | 2,105,352 | 1,747,662 | ||||||||||||
Total operating expense | 4,771,319 | 4,186,607 | 9,682,424 | 8,837,551 | ||||||||||||
Operating income/(loss) | 901,149 | 179,603 | 1,016,162 | (594,958 | ) | |||||||||||
Other income/(expense): | ||||||||||||||||
Investment income | 100,846 | — | 175,756 | — | ||||||||||||
Other income/(expense) | 1,187 | (1,225 | ) | 2,583 | (869 | ) | ||||||||||
Interest expense | (33,988 | ) | (60,386 | ) | (75,234 | ) | (124,760 | ) | ||||||||
Total other income/(expense) | 68,045 | (61,611 | ) | 103,105 | (125,629 | ) | ||||||||||
Income/(loss) from continuing operations before income taxes | 969,194 | 117,992 | 1,119,267 | (720,587 | ) | |||||||||||
Income tax (benefit)/expense | (98,133 | ) | 40,937 | (96,736 | ) | 67,627 | ||||||||||
Net income/(loss) from continuing operations | 1,067,327 | 77,055 | 1,216,003 | (788,214 | ) | |||||||||||
Loss from discontinued operations, net of income tax of $0 | — | (298,817 | ) | — | (789,534 | ) | ||||||||||
Net loss from discontinued operations | — | (298,817 | ) | — | (789,534 | ) | ||||||||||
Net income/(loss) | 1,067,327 | (221,762 | ) | 1,216,003 | (1,577,748 | ) | ||||||||||
Preferred stock dividend | 63,235 | 29,536 | 127,660 | 63,632 | ||||||||||||
Net income/(loss) attributable to common stockholders | $ | 1,004,092 | $ | (251,298 | ) | $ | 1,088,343 | $ | (1,641,380 | ) | ||||||
Net income/(loss) per share from continuing operations: | ||||||||||||||||
Basic | $ | 0.04 | $ | — | $ | 0.04 | $ | (0.03 | ) | |||||||
Diluted | $ | 0.03 | $ | — | $ | 0.04 | $ | (0.03 | ) | |||||||
Net loss per share from discontinued operations: | ||||||||||||||||
Basic | $ | — | $ | (0.01 | ) | $ | — | $ | (0.03 | ) | ||||||
Diluted | $ | — | $ | (0.01 | ) | $ | — | $ | (0.03 | ) | ||||||
Net income/(loss) per share attributable to common stockholders: | ||||||||||||||||
Basic |
$ | 0.04 | $ | (0.01 | ) | $ | 0.04 | $ | (0.06 | ) | ||||||
Diluted |
$ | 0.03 | $ | (0.01 | ) | $ | 0.03 | $ | (0.06 | ) | ||||||
Weighted average common shares and common equivalent shares outstanding: | ||||||||||||||||
Basic | 27,531,361 | 27,600,147 | 27,368,185 | 27,570,919 | ||||||||||||
Diluted | 31,506,745 | 32,579,379 | 31,257,277 | 27,570,919 | ||||||||||||
Luna Innovations Incorporated | ||||||||
Consolidated Balance Sheets | ||||||||
December 31, | ||||||||
June 30, 2018 | 2017 | |||||||
(unaudited) | ||||||||
Assets | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 33,292,800 | $ | 36,981,533 | ||||
Accounts receivable, net | 9,385,772 | 7,869,168 | ||||||
Receivable from sale of HSOR business | 4,001,833 | 4,000,976 | ||||||
Contract assets | 3,231,770 | 1,778,142 | ||||||
Inventory | 6,906,998 | 6,951,110 | ||||||
Prepaid expenses and other current assets | 1,054,984 | 1,220,650 | ||||||
Total current assets | 57,874,157 | 58,801,579 | ||||||
Long-term contract assets | 308,093 | 209,699 | ||||||
Property and equipment, net | 3,323,749 | 3,453,741 | ||||||
Intangible assets, net | 3,137,083 | 3,237,593 | ||||||
Goodwill | 502,000 | 502,000 | ||||||
Other assets | 18,024 | 18,024 | ||||||
Total assets | $ | 65,163,106 | $ | 66,222,636 | ||||
Liabilities and stockholders’ equity | ||||||||
Liabilities: | ||||||||
Current liabilities: | ||||||||
Current portion of long-term debt obligations | $ | 1,527,828 | $ | 1,833,333 | ||||
Current portion of capital lease obligations | 34,661 | 43,665 | ||||||
Accounts payable | 3,787,701 | 2,962,863 | ||||||
Accrued liabilities | 5,554,481 | 6,557,649 | ||||||
Contract liabilities | 1,400,922 | 3,428,625 | ||||||
Total current liabilities | 12,305,593 | 14,826,135 | ||||||
Long-term deferred rent | 1,109,397 | 1,184,438 | ||||||
Long-term debt obligations | — | 603,007 | ||||||
Long-term capital lease obligations | 54,970 | 71,275 | ||||||
Total liabilities | 13,469,960 | 16,684,855 | ||||||
Commitments and contingencies | ||||||||
Stockholders’ equity: | ||||||||
Preferred stock, par value $0.001, 1,321,514 shares authorized, issued and outstanding at June 30, 2018 and December 31, 2017 | 1,322 | 1,322 | ||||||
Common stock, par value $0.001, 100,000,000 shares authorized, 29,025,529 and 28,354,822 shares issued, 27,772,424 and 27,283,918 shares outstanding at June 30, 2018 and December 31, 2017 | 29,897 | 29,186 | ||||||
Treasury stock at cost, 1,253,105 and 1,070,904 shares at June 30, 2018 and December 31, 2017 | (2,116,640 | ) | (1,649,746 | ) | ||||
Additional paid-in capital | 84,742,385 | 83,563,208 | ||||||
Accumulated deficit | (30,963,818 | ) | (32,406,189 | ) | ||||
Total stockholders’ equity | 51,693,146 | 49,537,781 | ||||||
Total liabilities and stockholders’ equity | $ | 65,163,106 | $ | 66,222,636 | ||||
Luna Innovations Incorporated | ||||||||
Consolidated Statements of Cash Flows | ||||||||
Six Months Ended June 30, | ||||||||
2018 | 2017 | |||||||
(unaudited) | ||||||||
Cash flows used in operating activities | ||||||||
Net income/(loss) | $ | 1,216,003 | $ | (1,577,748 | ) | |||
Adjustments to reconcile net income/(loss) to net cash (used in)/provided by operating activities | ||||||||
Depreciation and amortization | 622,577 | 1,753,748 | ||||||
Share-based compensation | 212,149 | 321,756 | ||||||
Bad debt expense | 6,000 | 40,753 | ||||||
Gain on disposal of fixed assets | (1,000 | ) | (670 | ) | ||||
Change in assets and liabilities | ||||||||
Accounts receivable | (1,522,604 | ) | 1,433,014 | |||||
Contract assets | (645,824 | ) | (326,333 | ) | ||||
Inventory | (482,194 | ) | (1,170,519 | ) | ||||
Other current assets | 164,809 | 325,005 | ||||||
Accounts payable and accrued expenses | (253,372 | ) | (894,315 | ) | ||||
Contract liabilities | (2,053,566 | ) | (215,555 | ) | ||||
Net cash used in operating activities |
(2,737,022 | ) | (314,321 | ) | ||||
Cash flows used in investing activities | ||||||||
Acquisition of property and equipment | (198,012 | ) | (796,217 | ) | ||||
Intangible property costs | (185,909 | ) | (318,942 | ) | ||||
Proceeds from sale of property and equipment | 1,000 | 3,000 | ||||||
Net cash used in investing activities | (382,921 | ) | (1,112,159 | ) | ||||
Cash flows used in financing activities | ||||||||
Payments on capital lease obligations | (25,309 | ) | (25,611 | ) | ||||
Payments of debt obligations | (916,665 | ) | (916,666 | ) | ||||
Repurchase of common stock | (466,894 | ) | (143,266 | ) | ||||
Proceeds from the exercise of options and warrants | 840,078 | 820 | ||||||
Net cash used in financing activities | (568,790 | ) | (1,084,723 | ) | ||||
Net decrease in cash or cash equivalents | (3,688,733 | ) | (2,511,203 | ) | ||||
Cash and cash equivalents-beginning of period | 36,981,533 | 12,802,458 | ||||||
Cash and cash equivalents-end of period | $ | 33,292,800 | $ | 10,291,255 | ||||
Luna Innovations Incorporated | ||||||||||||||||
Reconciliation of Net Income/(Loss) to EBITDA and Adjusted EBITDA | ||||||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
2018 | 2017 | 2018 | 2017 | |||||||||||||
(unaudited) | (unaudited) | |||||||||||||||
Net income/(loss) | $ | 1,067,327 | $ | (221,762 | ) | $ | 1,216,003 | $ | (1,577,748 | ) | ||||||
Less loss from discontinued operations, net of income taxes |
— | (298,817 | ) | — | (789,534 | ) | ||||||||||
Net income/(loss) from continuing operations | 1,067,327 | 77,055 | 1,216,003 | (788,214 | ) | |||||||||||
Interest expense | 33,988 | 60,386 | 75,234 | 124,760 | ||||||||||||
Investment income | (100,846 | ) | — | (175,756 | ) | — | ||||||||||
Tax expense | (98,133 | ) | 40,937 | (96,736 | ) | 67,627 | ||||||||||
Depreciation and amortization | 314,725 | 285,253 | 622,577 | 646,145 | ||||||||||||
EBITDA | 1,217,061 | 463,631 | 1,641,322 | 50,318 | ||||||||||||
Share-based compensation | 117,823 | 151,672 | 212,149 | 321,756 | ||||||||||||
Adjusted EBITDA | $ | 1,334,884 | $ | 615,303 | $ | 1,853,471 | $ | 372,074 | ||||||||
View source version on businesswire.com: https://www.businesswire.com/news/home/20180801005239/en/
Source:
Luna Innovations Incorporated
Jane Bomba, 1-303-829-1211
[email protected]