Q3 Highlights
-
Total revenue of
$30.7 million , up 5% year over year - Gross margin of 57%, compared to 58% for the prior year
-
Net income of
$0.5 million , compared to net income of$1.2 million for the prior year -
Adjusted EBITDA of
$4.2 million , compared to$4.5 million for the prior year -
Adjusted EPS of
$0.07 , compared to$0.09 for the prior year
"We delivered solid performance this quarter in spite of continued macroeconomic headwinds," said
Third Quarter Fiscal 2023 Financial Summary
Highlights of the financial results for the three months ended
|
|
|
Three Months Ended |
|
Change |
|||||||
|
(in thousands, except share and per share data) |
|
|
2023 |
|
|
|
2022 |
|
|
|
|
|
Revenue |
|
$ |
30,703 |
|
|
$ |
29,153 |
|
|
5 |
% |
|
|
|
|
|
|
|
|
|||||
|
Gross profit |
|
|
17,629 |
|
|
|
16,919 |
|
|
4 |
% |
|
Gross margin |
|
|
57 |
% |
|
|
58 |
% |
|
|
|
|
|
|
|
|
|
|
||||||
|
Operating expense |
|
|
16,477 |
|
|
|
15,441 |
|
|
7 |
% |
|
Operating income |
|
|
1,152 |
|
|
|
1,478 |
|
|
|
|
|
Operating margin |
|
|
4 |
% |
|
|
5 |
% |
|
|
|
|
|
|
|
|
|
|
||||||
|
Other expense, net and income tax expense |
|
|
(691 |
) |
|
|
(310 |
) |
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Net income from continuing operations |
|
$ |
461 |
|
|
$ |
1,168 |
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Income from discontinued operations, net of tax of $— and |
|
|
— |
|
|
|
28 |
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Net income |
|
$ |
461 |
|
|
$ |
1,196 |
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Earnings per diluted share (EPS) |
|
$ |
0.01 |
|
|
$ |
0.04 |
|
|
|
|
|
Adjusted EPS |
|
$ |
0.07 |
|
|
$ |
0.09 |
|
|
|
|
|
Diluted weighted average shares outstanding |
|
|
35,218,547 |
|
|
|
34,104,850 |
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Adjusted EBITDA |
|
$ |
4,172 |
|
|
$ |
4,544 |
|
|
(8 |
)% |
A reconciliation of Adjusted EPS and Adjusted EBITDA to the nearest comparable figures under generally accepted accounting principles ("GAAP") can be found in the schedules included in this release.
Revenue for the three months ended
Gross margin was 57% for the three months ended
Net income was
Adjusted EBITDA was
Nine Months Ended Fiscal 2023 Financial Summary
Highlights of the financial results for the nine months ended
|
|
|
Nine Months Ended |
|
Change |
|||||||
|
(in thousands, except share and per share data) |
|
|
2023 |
|
|
|
2022 |
|
|
|
|
|
Revenue |
|
$ |
84,912 |
|
|
$ |
77,795 |
|
|
9 |
% |
|
|
|
|
|
|
|
|
|||||
|
Gross profit |
|
|
49,467 |
|
|
|
47,162 |
|
|
5 |
% |
|
Gross margin |
|
|
58 |
% |
|
|
61 |
% |
|
|
|
|
|
|
|
|
|
|
||||||
|
Operating expense |
|
|
50,661 |
|
|
|
50,510 |
|
|
— |
% |
|
Operating loss |
|
|
(1,194 |
) |
|
|
(3,348 |
) |
|
|
|
|
Operating margin |
|
|
(1 |
)% |
|
|
(4 |
)% |
|
|
|
|
|
|
|
|
|
|
||||||
|
Other expense, net and income tax benefit |
|
|
(745 |
) |
|
|
231 |
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Net loss from continuing operations |
|
$ |
(1,939 |
) |
|
$ |
(3,117 |
) |
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Net (loss)/income from discontinued operations, net of income taxes of |
|
|
(1,038 |
) |
|
|
11,543 |
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Net (loss)/income |
|
$ |
(2,977 |
) |
|
$ |
8,426 |
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
(Loss)/earnings per diluted share (EPS) |
|
$ |
(0.09 |
) |
|
$ |
0.26 |
|
|
|
|
|
Adjusted EPS |
|
$ |
0.11 |
|
|
$ |
0.12 |
|
|
(8 |
)% |
|
Diluted weighted average shares outstanding |
|
|
33,631,654 |
|
|
|
32,492,276 |
|
|||
|
|
|
|
|
|
|
|
|||||
|
Adjusted EBITDA |
|
$ |
7,759 |
|
|
$ |
7,450 |
|
|
4 |
% |
A reconciliation of Adjusted EPS and Adjusted EBITDA to the nearest comparable GAAP figures can be found in the schedules included in this release.
Revenue for the nine months ended
Gross profit of
Net loss was
Adjusted EBITDA was
Q3 and Recent Business Highlights
-
Named
George Gomez-Quintero as Chief Financial Officer - Awarded a multi-year service contract for system deployed on the largest fiber-optic monitoring solution ever installed
-
Secured multiple sales of seismic monitoring DAS instruments to American seismic labs and the
U.S. government -
Secured
$1 .5M+ in new orders for DAS and DTS systems for pipeline monitoring from the largest energy company in theUAE - Renewed global supply partnership agreement for infrastructure monitoring with one of the world's largest multinational conglomerates
-
Successfully deployed fiber optic-sensing based traffic monitoring for the
Utah Department of Transportation
2023 Full-Year Outlook
Luna is updating the 2023 revenue outlook and maintaining the adjusted EBITDA outlook:
-
Total revenue of
$120 million to$125 million for the full year 2023 -
Adjusted EBITDA of
$14 million to$18 million for the full year 2023
Luna is not providing an outlook for net income, which is the most directly comparable GAAP measure to Adjusted EBITDA, because changes in the items that Luna excludes from net income to calculate Adjusted EBITDA, such as share-based compensation, tax expense, and significant non-recurring charges, among other things, can be dependent on future events that are less capable of being controlled or reliably predicted by management and are not part of Luna's routine operating activities.
The outlook above does not include any future acquisitions, divestitures, or unanticipated events.
Non-GAAP Financial Measures
In evaluating the operating performance of its business, Luna’s management considers Adjusted EBITDA and Adjusted EPS, which are non-GAAP financial measures. Adjusted EBITDA and Adjusted EPS exclude certain charges and income that are required by GAAP. Adjusted EBITDA and Adjusted EPS provide 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 and Adjusted EPS 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 and Adjusted EPS have 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 full year 2023 financial results and outlook, and the Company's ability to secure additional significant wins. 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 macroeconomic conditions and those risks and uncertainties set forth in Luna’s Form 10-Q for the quarter ended
|
|
|||||||
|
|
|
|
|
||||
|
|
(unaudited) |
|
|
||||
|
Assets |
|
|
|
||||
|
Current assets: |
|
|
|
||||
|
Cash and cash equivalents |
$ |
6,028 |
|
|
$ |
6,024 |
|
|
Accounts receivable, net |
|
39,304 |
|
|
|
33,249 |
|
|
Contract assets |
|
7,324 |
|
|
|
7,691 |
|
|
Inventory |
|
43,318 |
|
|
|
36,582 |
|
|
Prepaid expenses and other current assets |
|
4,207 |
|
|
|
4,328 |
|
|
Total current assets |
|
100,181 |
|
|
|
87,874 |
|
|
Property and equipment, net |
|
4,892 |
|
|
|
4,893 |
|
|
Intangible assets, net |
|
16,143 |
|
|
|
18,750 |
|
|
|
|
26,896 |
|
|
|
26,927 |
|
|
Operating lease right-of-use assets |
|
7,999 |
|
|
|
4,661 |
|
|
Other non-current assets |
|
3,338 |
|
|
|
3,255 |
|
|
Deferred tax asset |
|
5,645 |
|
|
|
4,647 |
|
|
Total assets |
$ |
165,094 |
|
|
$ |
151,007 |
|
|
Liabilities and stockholders’ equity |
|
|
|
||||
|
Liabilities: |
|
|
|
||||
|
Current liabilities: |
|
|
|
||||
|
Current portion of long-term debt obligations |
$ |
3,000 |
|
|
$ |
2,500 |
|
|
Accounts payable |
|
10,617 |
|
|
|
8,109 |
|
|
Accrued and other current liabilities |
|
14,705 |
|
|
|
16,694 |
|
|
Contract liabilities |
|
4,619 |
|
|
|
4,089 |
|
|
Current portion of operating lease liabilities |
|
2,069 |
|
|
|
2,239 |
|
|
Total current liabilities |
|
35,010 |
|
|
|
33,631 |
|
|
Long-term debt obligations, net of current portion |
|
28,887 |
|
|
|
20,726 |
|
|
Long-term portion of operating lease liabilities |
|
6,178 |
|
|
|
2,804 |
|
|
Other long-term liabilities |
|
407 |
|
|
|
444 |
|
|
Total liabilities |
|
70,482 |
|
|
|
57,605 |
|
|
Commitments and contingencies |
|
|
|
||||
|
Stockholders’ equity: |
|
|
|
||||
|
Common stock, par value |
|
36 |
|
|
|
35 |
|
|
|
|
(6,043 |
) |
|
|
(5,607 |
) |
|
Additional paid-in capital |
|
109,634 |
|
|
|
104,893 |
|
|
Accumulated deficit |
|
(5,273 |
) |
|
|
(2,296 |
) |
|
Accumulated other comprehensive loss |
|
(3,742 |
) |
|
|
(3,623 |
) |
|
Total stockholders’ equity |
|
94,612 |
|
|
|
93,402 |
|
|
Total liabilities and stockholders’ equity |
$ |
165,094 |
|
|
$ |
151,007 |
|
|
|
|||||||||||||||
|
|
Three Months Ended |
|
Nine Months Ended |
||||||||||||
|
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
|
|
|
|
|
||||||||||||
|
Revenue |
$ |
30,703 |
|
|
$ |
29,153 |
|
|
$ |
84,912 |
|
|
$ |
77,795 |
|
|
Cost of revenue |
|
13,074 |
|
|
|
12,234 |
|
|
|
35,445 |
|
|
|
30,633 |
|
|
Gross profit |
|
17,629 |
|
|
|
16,919 |
|
|
|
49,467 |
|
|
|
47,162 |
|
|
Operating expense: |
|
|
|
|
|
|
|
||||||||
|
Selling, general and administrative |
|
12,829 |
|
|
|
11,678 |
|
|
|
39,565 |
|
|
|
39,733 |
|
|
Research, development and engineering |
|
2,719 |
|
|
|
2,776 |
|
|
|
8,257 |
|
|
|
7,983 |
|
|
Amortization of intangible assets |
|
929 |
|
|
|
987 |
|
|
|
2,839 |
|
|
|
2,794 |
|
|
Total operating expense |
|
16,477 |
|
|
|
15,441 |
|
|
|
50,661 |
|
|
|
50,510 |
|
|
Operating income/(loss) |
|
1,152 |
|
|
|
1,478 |
|
|
|
(1,194 |
) |
|
|
(3,348 |
) |
|
Other income/(expense): |
|
|
|
|
|
|
|
||||||||
|
Other income |
|
115 |
|
|
|
73 |
|
|
|
98 |
|
|
|
146 |
|
|
Interest expense, net |
|
(613 |
) |
|
|
(218 |
) |
|
|
(1,566 |
) |
|
|
(442 |
) |
|
Total other expense, net |
|
(498 |
) |
|
|
(145 |
) |
|
|
(1,468 |
) |
|
|
(296 |
) |
|
Income/(loss) from continuing operations before income taxes |
|
654 |
|
|
|
1,333 |
|
|
|
(2,662 |
) |
|
|
(3,644 |
) |
|
Income tax expense/(benefit) |
|
193 |
|
|
|
165 |
|
|
|
(723 |
) |
|
|
(527 |
) |
|
Net income/(loss) from continuing operations |
|
461 |
|
|
|
1,168 |
|
|
|
(1,939 |
) |
|
|
(3,117 |
) |
|
Income/(loss) from discontinued operations, net of income tax expense/(benefit) of $—, |
|
— |
|
|
|
28 |
|
|
|
(1,038 |
) |
|
|
622 |
|
|
Gain on sale of discontinued operations, net of tax of |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
10,921 |
|
|
Net income/(loss) from discontinued operations |
|
— |
|
|
|
28 |
|
|
|
(1,038 |
) |
|
|
11,543 |
|
|
Net income/(loss) |
$ |
461 |
|
|
$ |
1,196 |
|
|
$ |
(2,977 |
) |
|
$ |
8,426 |
|
|
Net income/(loss) per share from continuing operations: |
|
|
|
|
|
|
|
||||||||
|
Basic |
$ |
0.01 |
|
|
$ |
0.04 |
|
|
$ |
(0.06 |
) |
|
$ |
(0.10 |
) |
|
Diluted |
$ |
0.01 |
|
|
$ |
0.03 |
|
|
$ |
(0.06 |
) |
|
$ |
(0.10 |
) |
|
Net income/(loss) per share from discontinued operations: |
|
|
|
|
|
|
|
||||||||
|
Basic |
$ |
— |
|
|
$ |
— |
|
|
$ |
(0.03 |
) |
|
$ |
0.36 |
|
|
Diluted |
$ |
— |
|
|
$ |
— |
|
|
$ |
(0.03 |
) |
|
$ |
0.36 |
|
|
Net income/(loss) per share attributable to common stockholders: |
|
|
|
|
|
|
|
||||||||
|
Basic |
$ |
0.01 |
|
|
$ |
0.04 |
|
|
$ |
(0.09 |
) |
|
$ |
0.26 |
|
|
Diluted |
$ |
0.01 |
|
|
$ |
0.04 |
|
|
$ |
(0.09 |
) |
|
$ |
0.26 |
|
|
Weighted average shares: |
|
|
|
|
|
|
|
||||||||
|
Basic |
|
33,917,700 |
|
|
|
32,800,690 |
|
|
|
33,631,654 |
|
|
|
32,492,276 |
|
|
Diluted |
|
35,218,547 |
|
|
|
34,104,850 |
|
|
|
33,631,654 |
|
|
|
32,492,276 |
|
|
|
|||||||
|
|
Nine Months Ended |
||||||
|
|
|
2023 |
|
|
|
2022 |
|
|
|
|
||||||
|
Cash flows used in by operating activities |
|
|
|
||||
|
Net (loss)/income |
$ |
(2,977 |
) |
|
$ |
8,426 |
|
|
Adjustments to reconcile net (loss)/income to net cash used in operating activities |
|
|
|
||||
|
Depreciation and amortization |
|
4,092 |
|
|
|
3,993 |
|
|
Share-based compensation |
|
3,219 |
|
|
|
3,204 |
|
|
Loss on disposal of property and equipment |
|
281 |
|
|
|
— |
|
|
Gain on sale of discontinued operations, net of tax |
|
— |
|
|
|
(10,921 |
) |
|
Deferred taxes |
|
(998 |
) |
|
|
(3,374 |
) |
|
Change in assets and liabilities |
|
|
|
||||
|
Accounts receivable |
|
(6,095 |
) |
|
|
(6,166 |
) |
|
Contract assets |
|
1,145 |
|
|
|
(2,739 |
) |
|
Inventory |
|
(6,520 |
) |
|
|
(6,662 |
) |
|
Other current assets |
|
202 |
|
|
|
2,093 |
|
|
Other non-current assets |
|
(121 |
) |
|
|
599 |
|
|
Accounts payable and accrued and other current liabilities |
|
(479 |
) |
|
|
5,824 |
|
|
Contract liabilities |
|
111 |
|
|
|
2,425 |
|
|
Other non-current liabilities |
|
— |
|
|
|
13 |
|
|
Net cash used in operating activities |
|
(8,140 |
) |
|
|
(3,285 |
) |
|
Cash flows used in investing activities |
|
|
|
||||
|
Acquisition of property and equipment |
|
(1,750 |
) |
|
|
(2,313 |
) |
|
Acquisition of intangible property |
|
(95 |
) |
|
|
— |
|
|
Proceeds from sale of discontinued operations |
|
— |
|
|
|
12,973 |
|
|
Acquisition of |
|
— |
|
|
|
(22,085 |
) |
|
Other |
|
— |
|
|
|
29 |
|
|
Net cash used in investing activities |
|
(1,845 |
) |
|
|
(11,396 |
) |
|
Cash flows provided by financing activities |
|
|
|
||||
|
Payments on finance lease obligations |
|
(37 |
) |
|
|
(36 |
) |
|
Proceeds from borrowings under debt obligations |
|
10,400 |
|
|
|
22,150 |
|
|
Payments of debt obligations |
|
(1,750 |
) |
|
|
(16,275 |
) |
|
Repurchase of common stock |
|
(436 |
) |
|
|
(294 |
) |
|
Proceeds from ESPP |
|
546 |
|
|
|
521 |
|
|
Proceeds from the exercise of stock options |
|
1,272 |
|
|
|
1,160 |
|
|
Net cash provided by financing activities |
|
9,995 |
|
|
|
7,226 |
|
|
Effect of exchange rate changes on cash and cash equivalents |
|
(6 |
) |
|
|
(1,784 |
) |
|
Net increase/(decrease) in cash and cash equivalents |
|
4 |
|
|
|
(9,239 |
) |
|
Cash and cash equivalents—beginning of period |
|
6,024 |
|
|
|
17,128 |
|
|
Cash and cash equivalents—end of period |
$ |
6,028 |
|
|
$ |
7,889 |
|
|
|
|||||||||||||
|
|
Three Months Ended |
|
Nine Months Ended |
||||||||||
|
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
|
2022 |
|
|
|
|
|
|
||||||||||
|
Net income/(loss) |
$ |
461 |
|
$ |
1,196 |
|
$ |
(2,977 |
) |
|
$ |
8,426 |
|
|
Net income/(loss) from discontinued operations |
|
— |
|
|
28 |
|
|
(1,038 |
) |
|
|
11,543 |
|
|
Net income/(loss) from continuing operations |
|
461 |
|
|
1,168 |
|
|
(1,939 |
) |
|
|
(3,117 |
) |
|
Interest expense, net |
|
613 |
|
|
218 |
|
|
1,566 |
|
|
|
442 |
|
|
Income tax expense/(benefit) |
|
193 |
|
|
165 |
|
|
(723 |
) |
|
|
(527 |
) |
|
Depreciation and amortization |
|
1,353 |
|
|
1,299 |
|
|
4,092 |
|
|
|
3,993 |
|
|
EBITDA |
|
2,620 |
|
|
2,850 |
|
|
2,996 |
|
|
|
791 |
|
|
Share-based compensation |
|
1,046 |
|
|
1,027 |
|
|
3,219 |
|
|
|
3,027 |
|
|
Integration and transaction expense |
|
59 |
|
|
184 |
|
|
308 |
|
|
|
2,184 |
|
|
Amortization of inventory step-up |
|
— |
|
|
134 |
|
|
— |
|
|
|
391 |
|
|
Other non-recurring charges (1) |
|
447 |
|
|
349 |
|
|
1,236 |
|
|
|
1,057 |
|
|
Adjusted EBITDA |
$ |
4,172 |
|
$ |
4,544 |
|
$ |
7,759 |
|
|
$ |
7,450 |
|
|
(1) - Other non-recurring charges primarily include facility consolidation/set-up costs and one-time insurance deductible. |
|||||||||||||
|
|
|||||||||||||||
|
|
Three Months Ended |
|
Nine Months Ended |
||||||||||||
|
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
|
|
|
|
|
||||||||||||
|
Net income/(loss) |
$ |
461 |
|
|
$ |
1,196 |
|
|
$ |
(2,977 |
) |
|
$ |
8,426 |
|
|
Net income/(loss) from discontinued operations |
|
— |
|
|
|
28 |
|
|
|
(1,038 |
) |
|
|
11,543 |
|
|
Net income/(loss) from continuing operations |
|
461 |
|
|
|
1,168 |
|
|
|
(1,939 |
) |
|
|
(3,117 |
) |
|
Share-based compensation |
|
1,046 |
|
|
|
1,027 |
|
|
|
3,219 |
|
|
|
3,027 |
|
|
Integration and transaction expense |
|
59 |
|
|
|
184 |
|
|
|
308 |
|
|
|
2,184 |
|
|
Amortization of intangible assets |
|
929 |
|
|
|
988 |
|
|
|
2,839 |
|
|
|
2,793 |
|
|
Amortization of inventory step-up |
|
— |
|
|
|
134 |
|
|
|
— |
|
|
|
391 |
|
|
Other non-recurring charges (1) |
|
447 |
|
|
|
349 |
|
|
|
1,236 |
|
|
|
1,057 |
|
|
Income tax effect on adjustments |
|
(620 |
) |
|
|
(671 |
) |
|
|
(1,901 |
) |
|
|
(2,363 |
) |
|
Adjusted income from continuing operations |
$ |
2,322 |
|
|
$ |
3,179 |
|
|
$ |
3,762 |
|
|
$ |
3,972 |
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
|
||||||||
|
Adjusted EPS |
$ |
0.07 |
|
|
$ |
0.09 |
|
|
$ |
0.11 |
|
|
$ |
0.12 |
|
|
|
|
|
|
|
|
|
|
||||||||
|
Adjusted weighted average shares: |
|
|
|
|
|
|
|
||||||||
|
Diluted |
|
35,219 |
|
|
|
34,105 |
|
|
|
33,632 |
|
|
|
32,492 |
|
|
(1) - Other non-recurring charges primarily include facility consolidation/set-up costs and one-time insurance deductible. |
|||||||||||||||
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