Maintains 2020 Outlook
Highlights
-
Total revenues of
$21.1 million for the three months endedSeptember 30, 2020 , up 14% compared to the three months endedSeptember 30, 2019 -
Operating income and margin of
$2.3 million and 11% of total revenues, respectively, for the three months endedSeptember 30, 2020 versus operating income and margin of$1.5 million and 8% of total revenues, respectively, for the three months endedSeptember 30, 2019 -
Net income of
$3.1 million , or$0.10 per fully diluted share, for the three months endedSeptember 30, 2020 , compared to$1.2 million , or$0.04 per fully diluted share, for the three months endedSeptember 30, 2019 -
Adjusted EBITDA increased to
$4.3 million for the three months endedSeptember 30, 2020 , compared to$2.9 million for the three months endedSeptember 30, 2019 - Company maintains 2020 outlook
"I'm extremely pleased with our strong third-quarter 2020 performance, which reflects the team's focus on delivering results during these challenging times," said
Third-Quarter Fiscal 2020 Financial Summary
Financial results for the three months ended
Highlights of the financial results for the three months ended
|
|
Three Months Ended |
|
|
|
|||||||
(in thousands, except share and per share data) |
|
2020 |
|
2019 |
|
Change |
||||||
Revenues: |
|
|
|
|
|
|||||||
Lightwave |
|
$ |
15,350 |
|
|
$ |
13,088 |
|
|
17 |
% |
|
|
|
5,700 |
|
|
5,301 |
|
|
8 |
% |
|||
Total revenues |
|
21,050 |
|
|
18,389 |
|
|
14 |
% |
|||
|
|
|
|
|
|
|
||||||
Gross profit |
|
10,949 |
|
|
9,275 |
|
|
18 |
% |
|||
Gross margin |
|
52 |
% |
|
50 |
% |
|
|
||||
|
|
|
|
|
|
|||||||
Operating expense |
|
8,697 |
|
|
7,793 |
|
|
12 |
% |
|||
Operating income |
|
2,252 |
|
|
1,482 |
|
|
52 |
% |
|||
Operating margin |
|
11 |
% |
|
8 |
% |
|
|
|
|||
|
|
|
|
|
|
|||||||
Other income and income tax benefit/(expense) |
|
850 |
|
|
(252 |
) |
|
437 |
% |
|||
|
|
|
|
|
|
|
|
|||||
Net income |
|
$ |
3,102 |
|
|
$ |
1,230 |
|
|
152 |
% |
|
Diluted weighted average shares outstanding |
|
32,411,086 |
|
|
32,115,847 |
|
|
|
|
|||
|
|
|
|
|
|
|
|
|||||
Net income per share (diluted) |
|
$ |
0.10 |
|
|
$ |
0.04 |
|
|
150 |
% |
|
|
|
|
|
|
|
|
|
|||||
Adjusted EBITDA |
|
$ |
4,267 |
|
|
$ |
2,883 |
|
|
48 |
% |
A reconciliation of Adjusted EBITDA to net income can be found in the schedules included in this release.
Lightwave revenues for the three months ended
Operating income and margin improved to
Net income was
Adjusted EBITDA was
Nine Months Year-to-Date Fiscal 2020 Financial Summary
The results for the nine months ended
Highlights of the financial results for the nine months ended
|
|
Nine Months Ended |
|
|
|
|||||||
(in thousands, except share and per share data) |
|
2020 |
|
2019 |
|
Change |
||||||
Revenues: |
|
|
|
|
|
|||||||
Lightwave |
|
$ |
39,837 |
|
|
$ |
35,129 |
|
|
13 |
|
% |
|
|
16,929 |
|
|
15,907 |
|
|
6 |
|
% |
||
Total revenues |
|
56,766 |
|
|
51,036 |
|
|
11 |
|
% |
||
|
|
|
|
|
|
|
||||||
Gross profit |
|
28,830 |
|
|
24,795 |
|
|
16 |
|
% |
||
Gross margin |
|
51 |
% |
|
49 |
% |
|
|
||||
|
|
|
|
|
|
|||||||
Operating expense |
|
24,378 |
|
|
23,196 |
|
|
5 |
|
% |
||
Operating income |
|
4,452 |
|
|
1,599 |
|
|
178 |
|
% |
||
Operating margin |
|
8 |
% |
|
3 |
% |
|
|
|
|||
|
|
|
|
|
|
|||||||
Other income and income tax benefit |
|
339 |
|
|
1,597 |
|
|
(79 |
) |
% |
||
|
|
|
|
|
|
|
|
|||||
Net income from continuing operations |
|
$ |
4,791 |
|
|
$ |
3,196 |
|
|
50 |
|
% |
|
|
|
|
|
|
|
|
|||||
Loss from discontinued operations, net of income tax of |
|
(1,436 |
) |
|
— |
|
|
|
|
|||
|
|
|
|
|
|
|
|
|||||
Net income |
|
$ |
3,355 |
|
|
$ |
3,196 |
|
|
5 |
|
% |
Diluted weighted average shares outstanding |
|
32,478,625 |
|
|
31,768,575 |
|
|
|
|
|||
|
|
|
|
|
|
|
|
|||||
Net income per share from continuing operations (diluted) |
|
$ |
0.15 |
|
|
$ |
0.10 |
|
|
50 |
|
% |
|
|
|
|
|
|
|
|
|||||
Adjusted EBITDA |
|
$ |
8,803 |
|
|
$ |
6,236 |
|
|
41 |
|
% |
Lightwave revenues for the nine months ended
Operating income and margin improved to
Net income from continuing operations was
2020 Full-Year Outlook
Luna is reaffirming its full-year guidance:
-
Total revenues of
$81M to$83M -
Adjusted EBITDA of
$10M to$12M
COVID-19 Update
Luna continues to operate at its normal capacity with the well-being and safety of its workforce a priority and, to date, has not experienced any material impact related to COVID-19.
The company has a strong cash position and adequate access to capital. Cash and cash equivalents were
The company continues to believe it is in a strong position to take advantage of trends such as 5G, lightweighting and infrastructure monitoring and that these trends will continue during and after the COVID-19 pandemic.
Luna’s operations are deemed essential and continue to operate at normal capacity with necessary COVID-19 precautions. To date, the company has been able to mitigate disruptions to its supply chain.
An important part of Luna’s sales effort has been done historically through a series of in-person tradeshows and conferences, none of which are currently taking place. Luna's successful shift to a robust online presence has, in many instances, improved engagement between Luna's sales force and its customers, allowing Luna to curate a specific message over a longer and more dedicated period of customer "face time". Yet, in-person meetings have historically been helpful in closing the sale. This has created a slight challenge around Luna's ability to forecast the exact timing of closing certain customer contracts and receiving purchase orders. Due to Luna's innovative, reliable products and its close customer relationships, the lack of in-person discussions has not, to date, had an adverse effect on the likelihood of obtaining the orders themselves.
Non-GAAP Financial 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 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 projected 2020 financial results and outlook, the continuation of trends such as 5G, lightweighting and infrastructure monitoring, the potential impacts of the COVID-19 pandemic on its business, operations and financial results, and growth potential. 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, uncertainties related to the ultimate impact of the COVID-19 pandemic and those risks and uncertainties set forth in Luna’s Form 10-Q for the three and nine months ended
|
||||||||
|
|
|
|
|||||
|
(unaudited) |
|
|
|||||
Assets |
|
|
|
|||||
Current assets: |
|
|
|
|||||
Cash and cash equivalents |
$ |
26,422 |
|
|
$ |
25,006 |
|
|
Accounts receivable, net |
18,254 |
|
|
16,269 |
|
|||
Receivable from sale of HSOR business |
— |
|
|
2,501 |
|
|||
Contract assets |
4,219 |
|
|
2,759 |
|
|||
Inventory |
11,713 |
|
|
10,294 |
|
|||
Prepaid expenses and other current assets |
3,268 |
|
|
1,287 |
|
|||
Total current assets |
63,876 |
|
|
58,116 |
|
|||
Long-term contract assets |
577 |
|
|
449 |
|
|||
Property and equipment, net |
2,111 |
|
|
3,466 |
|
|||
Intangible assets, net |
9,193 |
|
|
10,194 |
|
|||
|
10,542 |
|
|
10,542 |
|
|||
Other assets |
7,855 |
|
|
2,341 |
|
|||
Deferred tax asset |
1,729 |
|
|
1,416 |
|
|||
Total assets |
$ |
95,883 |
|
|
$ |
86,524 |
|
|
Liabilities and stockholders’ equity |
|
|
|
|||||
Liabilities: |
|
|
|
|||||
Current liabilities: |
|
|
|
|||||
Accounts payable |
$ |
3,177 |
|
|
$ |
2,787 |
|
|
Accrued liabilities |
7,716 |
|
|
10,369 |
|
|||
Contract liabilities |
3,721 |
|
|
3,888 |
|
|||
Total current liabilities |
14,614 |
|
|
17,044 |
|
|||
Other long-term liabilities |
7,761 |
|
|
2,011 |
|
|||
Total liabilities |
22,375 |
|
|
19,055 |
|
|||
Commitments and contingencies |
|
|
|
|||||
Stockholders’ equity: |
|
|
|
|||||
Common stock, par value |
33 |
|
|
32 |
|
|||
|
(4,666 |
) |
|
(4,337 |
) |
|||
Additional paid-in capital |
91,034 |
|
|
88,022 |
|
|||
Accumulated deficit |
(12,893 |
) |
|
(16,248 |
) |
|||
Total stockholders’ equity |
73,508 |
|
|
67,469 |
|
|||
Total liabilities and stockholders’ equity |
$ |
95,883 |
|
|
$ |
86,524 |
|
|
|||||||||||||||||
|
Three Months Ended |
|
|
Nine Months Ended |
|||||||||||||
|
2020 |
|
2019 |
|
|
2020 |
|
2019 |
|||||||||
|
|
|
|
|
|||||||||||||
Revenues: |
|
|
|
|
|
|
|
|
|||||||||
Lightwave |
$ |
15,350 |
|
|
$ |
13,088 |
|
|
|
$ |
39,837 |
|
|
$ |
35,129 |
|
|
|
5,700 |
|
|
5,301 |
|
|
|
16,929 |
|
|
15,907 |
|
|||||
Total revenues |
21,050 |
|
|
18,389 |
|
|
|
56,766 |
|
|
51,036 |
|
|||||
Cost of revenues: |
|
|
|
|
|
|
|
|
|||||||||
Lightwave |
5,670 |
|
|
5,449 |
|
|
|
15,736 |
|
|
15,063 |
|
|||||
|
4,431 |
|
|
3,665 |
|
|
|
12,200 |
|
|
11,178 |
|
|||||
Total cost of revenues |
10,101 |
|
|
9,114 |
|
|
|
27,936 |
|
|
26,241 |
|
|||||
Gross profit |
10,949 |
|
|
9,275 |
|
|
|
28,830 |
|
|
24,795 |
|
|||||
Operating expense: |
|
|
|
|
|
|
|
|
|||||||||
Selling, general and administrative |
6,505 |
|
|
5,746 |
|
|
|
19,085 |
|
|
17,955 |
|
|||||
Research, development and engineering |
1,616 |
|
|
2,047 |
|
|
|
4,717 |
|
|
5,241 |
|
|||||
Loss on sale of property and equipment |
576 |
|
|
— |
|
|
|
576 |
|
|
— |
|
|||||
Total operating expense |
8,697 |
|
|
7,793 |
|
|
|
24,378 |
|
|
23,196 |
|
|||||
Operating income |
2,252 |
|
|
1,482 |
|
|
|
4,452 |
|
|
1,599 |
|
|||||
Other income/(expense): |
|
|
|
|
|
|
|
|
|||||||||
Investment income |
1 |
|
|
76 |
|
|
|
65 |
|
|
324 |
|
|||||
Other income/(expense) |
14 |
|
|
1 |
|
|
|
19 |
|
|
(5 |
) |
|||||
Interest expense |
(1 |
) |
|
(4 |
) |
|
|
(2 |
) |
|
(15 |
) |
|||||
Total other income |
14 |
|
|
73 |
|
|
|
82 |
|
|
304 |
|
|||||
Income from continuing operations before income taxes |
2,266 |
|
|
1,555 |
|
|
|
4,534 |
|
|
1,903 |
|
|||||
Income tax (benefit)/expense |
(836 |
) |
|
325 |
|
|
|
(257 |
) |
|
(1,293 |
) |
|||||
Net income from continuing operations |
3,102 |
|
|
1,230 |
|
|
|
4,791 |
|
|
3,196 |
|
|||||
Loss from discontinued operations, net of income tax of |
— |
|
|
— |
|
|
|
(1,436 |
) |
|
— |
|
|||||
Net income |
3,102 |
|
|
1,230 |
|
|
|
3,355 |
|
|
3,196 |
|
|||||
Preferred stock dividend |
— |
|
|
113 |
|
|
|
— |
|
|
285 |
|
|||||
Net income attributable to common stockholders |
$ |
3,102 |
|
|
$ |
1,117 |
|
|
|
$ |
3,355 |
|
|
$ |
2,911 |
|
|
Net income per share from continuing operations: |
|
|
|
|
|
|
|
|
|||||||||
Basic |
$ |
0.10 |
|
|
$ |
0.04 |
|
|
|
$ |
0.16 |
|
|
$ |
0.11 |
|
|
Diluted |
$ |
0.10 |
|
|
$ |
0.04 |
|
|
|
$ |
0.15 |
|
|
$ |
0.10 |
|
|
Net loss per share from discontinued operations: |
|
|
|
|
|
|
|
|
|||||||||
Basic |
$ |
— |
|
|
$ |
— |
|
|
|
$ |
(0.05 |
) |
|
$ |
— |
|
|
Diluted |
$ |
— |
|
|
$ |
— |
|
|
|
$ |
(0.04 |
) |
|
$ |
— |
|
|
Net income per share attributable to common stockholders: |
|
|
|
|
|
|
|
|
|||||||||
Basic |
$ |
0.10 |
|
|
$ |
0.04 |
|
|
|
$ |
0.11 |
|
|
$ |
0.10 |
|
|
Diluted |
$ |
0.10 |
|
|
$ |
0.03 |
|
|
|
$ |
0.10 |
|
|
$ |
0.09 |
|
|
Weighted average shares: |
|
|
|
|
|
|
|
|
|||||||||
Basic |
30,809,896 |
|
|
28,291,297 |
|
|
|
30,593,954 |
|
|
28,193,330 |
|
|||||
Diluted |
32,411,086 |
|
|
32,115,847 |
|
|
|
32,478,625 |
|
|
31,768,575 |
|
|
||||||||
|
Nine Months Ended |
|||||||
|
2020 |
|
2019 |
|||||
|
|
|||||||
Cash flows provided by operating activities |
|
|
|
|||||
Net income |
$ |
3,355 |
|
|
$ |
3,196 |
|
|
Adjustments to reconcile net income to net cash provided by operating activities |
|
|
|
|||||
Depreciation and amortization |
2,126 |
|
|
1,835 |
|
|||
Share-based compensation |
1,538 |
|
|
1,140 |
|
|||
Bad debt expense |
147 |
|
|
— |
|
|||
Loss on sale of property and equipment |
576 |
|
|
— |
|
|||
Loss from discontinued operations, net of tax |
1,436 |
|
|
— |
|
|||
Deferred taxes |
(313 |
) |
|
— |
|
|||
Tax benefit from release of valuation allowance |
— |
|
|
(1,889 |
) |
|||
Change in assets and liabilities |
|
|
|
|||||
Accounts receivable |
(2,131 |
) |
|
(2,238 |
) |
|||
Contract assets |
(1,589 |
) |
|
(1,106 |
) |
|||
Inventory |
(1,419 |
) |
|
(73 |
) |
|||
Other current assets |
(1,982 |
) |
|
(74 |
) |
|||
Other long term assets |
— |
|
|
(339 |
) |
|||
Accounts payable and accrued expenses |
(1,481 |
) |
|
(114 |
) |
|||
Contract liabilities |
(166 |
) |
|
747 |
|
|||
Net cash provided by operating activities |
97 |
|
|
1,085 |
|
|||
Cash flows provided by/(used in) investing activities |
|
|
|
|||||
Acquisition of property and equipment |
(422 |
) |
|
(501 |
) |
|||
Intangible property costs |
(291 |
) |
|
(192 |
) |
|||
Proceeds from sale of property and equipment |
403 |
|
|
— |
|
|||
Proceeds from sale of discontinued operations |
600 |
|
|
— |
|
|||
Acquisition of |
— |
|
|
(19,004 |
) |
|||
Net cash provided by/(used in) investing activities |
290 |
|
|
(19,697 |
) |
|||
Cash flows provided by/(used in) financing activities |
|
|
|
|||||
Payments on finance lease obligations |
(39 |
) |
|
(27 |
) |
|||
Payments of debt obligations |
— |
|
|
(625 |
) |
|||
Repurchase of common stock |
(329 |
) |
|
(2,220 |
) |
|||
Proceeds from the exercise of options and warrants |
1,397 |
|
|
438 |
|
|||
Net cash provided by/(used in) financing activities |
1,029 |
|
|
(2,434 |
) |
|||
Net increase/(decrease) in cash and cash equivalents |
1,416 |
|
|
(21,046 |
) |
|||
Cash and cash equivalents-beginning of period |
25,006 |
|
|
42,460 |
|
|||
Cash and cash equivalents-end of period |
$ |
26,422 |
|
|
$ |
21,414 |
|
|
||||||||||||||||
|
Three Months Ended |
|
Nine Months Ended |
|||||||||||||
|
2020 |
|
2019 |
|
2020 |
|
2019 |
|||||||||
|
|
|
|
|||||||||||||
Net income |
$ |
3,102 |
|
|
$ |
1,230 |
|
|
$ |
3,355 |
|
|
$ |
3,196 |
|
|
Loss from discontinued operations, net of tax |
— |
|
|
— |
|
|
(1,436 |
) |
|
— |
|
|||||
Net income from continuing operations |
3,102 |
|
|
1,230 |
|
|
4,791 |
|
|
3,196 |
|
|||||
Interest expense |
1 |
|
|
4 |
|
|
2 |
|
|
15 |
|
|||||
Investment income |
(1 |
) |
|
(76 |
) |
|
(65 |
) |
|
(324 |
) |
|||||
Income tax (benefit)/expense |
(836 |
) |
|
325 |
|
|
(257 |
) |
|
(1,293 |
) |
|||||
Depreciation and amortization |
762 |
|
|
669 |
|
|
2,126 |
|
|
1,835 |
|
|||||
EBITDA |
3,028 |
|
|
2,152 |
|
|
6,597 |
|
|
3,429 |
|
|||||
Share-based compensation |
571 |
|
|
420 |
|
|
1,538 |
|
|
1,140 |
|
|||||
Non-recurring charges (1) |
668 |
|
|
— |
|
|
668 |
|
|
942 |
|
|||||
Amortization of inventory step-up |
— |
|
|
311 |
|
|
— |
|
|
725 |
|
|||||
Adjusted EBITDA |
$ |
4,267 |
|
|
$ |
2,883 |
|
|
$ |
8,803 |
|
|
$ |
6,236 |
|
(1) Non-recurring charges consist of transaction and moving related expenses for the sale of property and equipment during the three and nine months ended |
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