Total revenues increase 8% compared to second quarter of 2013 and 17% compared to first quarter of 2014
Total revenue for the second quarter of 2014 increased 8%, to
After recognition of discontinued operations, primarily associated with
the sale of the company's medical shape sensing business in the first
quarter of 2014, and income taxes, the company reported a net loss
attributable to common stockholders of
Year to date, total revenue grew 9%, to
“Our revenue growth and improved bottom line, both year over year and
for sequential quarters, demonstrate the value of our recent strategic
initiatives for our stockholders," said
Second Quarter Financial and Business Summary
-
Total revenues grew to
$5.2 million in the second quarter of 2014 compared to$4.8 million in the second quarter of 2013. -
Technology development revenue increased by 15%, to
$3.2 million , for the second quarter of 2014, from$2.8 million for the second quarter of 2013. -
Products and licensing revenue was
$2.0 million for the second quarter of 2014 flat relative to the second quarter of 2013, but up 12% compared to the first quarter of 2014. -
Gross profit for the second quarter of 2014 improved to
$2.0 million , or 38% of total revenues, compared to$1.8 million , or 37% of total revenues, for the second quarter of 2013. -
Selling, general and administrative expenses decreased by 14% to
$2.5 million , or 47% of total revenues for the second quarter of 2014, from$2.9 million , or 60% of total revenues, for the second quarter of 2013. -
Total operating expenses decreased to
$3.0 million , or 56% of total revenues, for the second quarter of 2014 from$3.5 million , or 73% of total revenue for the second quarter of 2013. -
Adjusted EBITDA improved to
$(0.5) million in the second quarter of 2014 from$(1.1) million in the second quarter of 2013. -
Net loss attributable to common stockholders for the second quarter of
2014 improved to
$0.9 million from$1.0 million for the second quarter of 2013. -
Cash and cash equivalents totaled
$14.7 million at June 30, 2014, as compared to$7.8 million at December 31, 2013 and$10.9 million at March 31, 2014. During the second quarter of 2014 the company received the second$6.0 million installment fromIntuitive Surgical related to the sale of the company's medical shape sensing business.
Six Months Ended June 30, 2014 Financial Summary
-
Total revenue increased by 9% to
$9.7 million for the six months ended June 30, 2014 compared to$8.9 million for the six months ended June 30, 2013. -
Technology development revenues increased by 8%, from
$5.4 million for the six months ended June 30, 2013 to$5.9 million for the six months ended June 30, 2014. -
Products and licensing revenue increased by 9%, from
$3.5 million for the six months ended June 30, 2013 to$3.8 million for the six months ended June 30, 2014. -
Gross profit for the six months ended June 30, 2014 increased by 20%,
to
$3.5 million , compared to a gross profit of$3.0 million for the six months ended June 30, 2013. Gross margin percentages increased to 36% of total revenue for the first six months of 2014 from 33% of total revenue for the first six months of 2013. -
Selling, general and administrative expenses decreased to
$5.2 million , representing 54% of total revenues for the six months ended June 30, 2014 compared to$5.5 million or 62% of total revenues for the six months ended June 30, 2013. -
Total operating expenses decreased to
$6.5 million , or 67% of total revenues, for the six months ended June 30, 2014, from$6.9 million or 78% of total revenues, for the six months ended June 30, 2013. -
Adjusted EBITDA improved to
$(2.0) million for the six months ended June 30, 2014 from$(2.7) million for the six months ended June 30, 2013. -
Net income attributable to common stockholders improved to
$7.6 million for the six months ended June 30, 2014, compared to net income attributable to common stockholders of$1.8 million for the six months ended June 30, 2013 largely the result of a net after-tax gain of$9.4 million realized on the sale of the company’s medical shape sensing business in the first quarter of 2014.
Non-GAAP Measures
In evaluating the operating performance of its business, Luna’s management excludes certain charges and credits that are required by generally accepted accounting principles (“GAAP”). These non-GAAP results provide useful information to both management and investors by excluding items that the company believes may not be indicative of its operating performance, because either they are unusual and the company 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. These non-GAAP measures should be considered in addition to results and guidance prepared in accordance with GAAP, but should not be considered a substitute for, or superior to, GAAP results. The non-GAAP measures included in this press release 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 our expectations
regarding the company’s future growth of the company’s fiber optic
sensing products. 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 the company 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 the company’s products and services to meet expectations,
technological challenges and those risks and uncertainties set forth in
the company’s periodic reports and other filings with the
| Luna Innovations Incorporated | ||||||||||
| Condensed Consolidated Balance Sheets | ||||||||||
|
June 30,
2014 |
December 31,
2013 |
|||||||||
| (unaudited) | ||||||||||
| Assets | ||||||||||
| Current assets: | ||||||||||
| Cash and cash equivalents | $ | 14,674,973 | $ | 7,778,541 | ||||||
| Accounts receivable, net | 5,481,642 | 5,408,281 | ||||||||
| Inventory, net | 3,314,608 | 3,346,177 | ||||||||
| Prepaid expenses | 582,934 | 708,974 | ||||||||
| Other current assets | 70,207 | 70,208 | ||||||||
| Total current assets | 24,124,364 | 17,312,181 | ||||||||
| Property and equipment, net | 1,939,607 | 2,060,709 | ||||||||
| Intangible assets, net | 188,816 | 288,475 | ||||||||
| Other assets | 5,126 | 42,710 | ||||||||
| Total assets | $ | 26,257,913 | $ | 19,704,075 | ||||||
| Liabilities and stockholders’ equity | ||||||||||
|
Liabilities: |
||||||||||
| Current Liabilities | ||||||||||
| Current portion of long term debt obligation | $ | 1,375,000 | $ | 1,500,000 | ||||||
| Current portion of capital lease obligation | 68,640 | 66,617 | ||||||||
| Accounts payable | 1,520,093 | 1,401,764 | ||||||||
| Accrued liabilities | 2,781,931 | 3,546,585 | ||||||||
| Deferred credits | 391,712 | 691,424 | ||||||||
| Total current liabilities | 6,137,376 | 7,206,390 | ||||||||
| Long-term debt obligation | — | 625,000 | ||||||||
| Long-term lease obligation | 75,474 | 110,307 | ||||||||
| Total liabilities | 6,212,850 | 7,941,697 | ||||||||
| Commitments and contingencies | ||||||||||
| Stockholders’ equity: | ||||||||||
| Preferred stock | 1,322 | 1,322 | ||||||||
| Common stock, par value $ 0.001, 100,000,000 shares authorized, 15,003,901 and 14,527,335 shares issued at June 30, 2014 and December 31, 2013, respectively | 15,299 | 14,842 | ||||||||
| Less treasury stock at cost, 22,725 shares at June 30, 2014 and zero at December 31, 2013 | (32,221 | ) | — | |||||||
| Additional paid-in capital | 63,503,505 | 62,756,571 | ||||||||
| Accumulated deficit | (43,442,842 | ) | (51,010,357 | ) | ||||||
| Total stockholders’ equity | 20,045,063 | 11,762,378 | ||||||||
| Total liabilities and stockholders’ equity | $ | 26,257,913 | $ | 19,704,075 | ||||||
| Luna Innovations Incorporated | ||||||||||||||||||||
| Condensed Consolidated Statements of Operations | ||||||||||||||||||||
|
Three Months Ended
June 30, |
Six Months Ended
June 30, |
|||||||||||||||||||
| 2014 | 2013 | 2014 | 2013 | |||||||||||||||||
| (unaudited) | (unaudited) | |||||||||||||||||||
| Revenue: | ||||||||||||||||||||
| Technology development revenue | $ | 3,219,435 | $ | 2,807,296 | $ | 5,894,887 | $ | 5,434,537 | ||||||||||||
| Products and licensing revenue | 2,008,862 | $ | 2,023,668 | 3,805,291 | 3,501,795 | |||||||||||||||
| Total revenue | 5,228,297 | 4,830,964 | 9,700,178 | 8,936,332 | ||||||||||||||||
| Cost of revenue: | ||||||||||||||||||||
| Technology development costs | 2,388,801 | 2,209,158 | 4,413,956 | 4,394,072 | ||||||||||||||||
| Products and license costs | 851,490 | 844,441 | 1,746,130 | 1,583,130 | ||||||||||||||||
| Total cost of revenue | 3,240,291 | 3,053,599 | 6,160,086 | 5,977,202 | ||||||||||||||||
| Gross Profit | 1,988,006 | 1,777,365 | 3,540,092 | 2,959,130 | ||||||||||||||||
| Operating expense: | ||||||||||||||||||||
| Selling, general and administrative | 2,466,626 | 2,875,461 | 5,221,704 | 5,538,569 | ||||||||||||||||
| Research, development and engineering | 484,509 | 641,790 | 1,233,663 | 1,401,781 | ||||||||||||||||
| Total operating expense | 2,951,135 | 3,517,251 | 6,455,367 | 6,940,350 | ||||||||||||||||
| Operating loss | (963,129 | ) | (1,739,886 | ) | (2,915,275 | ) | (3,981,220 | ) | ||||||||||||
| Other income/(expense): | ||||||||||||||||||||
| Other income, net | 29,325 | 94,990 | 111,431 | 193,144 | ||||||||||||||||
| Interest expense | (27,302 | ) | (49,781 | ) | (59,667 | ) | (107,960 | ) | ||||||||||||
| Total other income | 2,023 | 45,209 | 51,764 | 85,184 | ||||||||||||||||
| Loss from continuing operations before income taxes | (961,106 | ) | (1,694,677 | ) | (2,863,511 | ) | (3,896,036 | ) | ||||||||||||
| Income tax (benefit)/expense | (375,983 | ) | (659,341 | ) | (1,145,173 | ) | (1,541,768 | ) | ||||||||||||
| Loss from continuing operations | (585,123 | ) | (1,035,336 | ) | (1,718,338 | ) | (2,354,268 | ) | ||||||||||||
| Gain on sale, net of $0.4 million, $0.3 million, $1.3 million and $1.3 million of related income taxes, respectively | (330,716 | ) | (364,338 | ) | 9,370,799 | 3,682,159 | ||||||||||||||
| Operating (loss)/ income from discontinued operations, net of $0.0, $0.3 million, $0.0 million and $0.3 million related income tax, respectively | — | 447,592 | (28,076 | ) | 505,624 | |||||||||||||||
| Discontinued operations, net of tax | (330,716 | ) | 83,254 | 9,342,723 | 4,187,783 | |||||||||||||||
| Net (loss)/income | (915,839 | ) | (952,082 | ) | 7,624,385 | 1,833,515 | ||||||||||||||
| Preferred stock dividend | 27,334 | 26,366 | 56,870 | 49,995 | ||||||||||||||||
| Net (loss)/income attributable to common stockholders | $ | (943,173 | ) | $ | (978,448 | ) | $ | 7,567,515 | $ | 1,783,520 | ||||||||||
| Net loss per share from continuing operations: | ||||||||||||||||||||
| Basic | $ | (0.04 | ) | $ | (0.07 | ) | $ | (0.12 | ) | $ | (0.17 | ) | ||||||||
| Diluted | $ | (0.04 | ) | $ | (0.07 | ) | $ | (0.12 | ) | $ | (0.17 | ) | ||||||||
| Net (loss)/income per share from discontinued operations: | ||||||||||||||||||||
| Basic | $ | (0.02 | ) | $ | 0.01 | $ | 0.63 | $ | 0.29 | |||||||||||
| Diluted | $ | (0.02 | ) | $ | — | $ | 0.54 | $ | 0.25 | |||||||||||
| Net (loss)/income per share attributable to common stockholders: | ||||||||||||||||||||
| Basic | $ | (0.06 | ) | $ | (0.07 | ) | $ | 0.51 | $ | 0.13 | ||||||||||
| Diluted | $ | (0.06 | ) | $ | (0.07 | ) | $ | 0.44 | $ | 0.11 | ||||||||||
| Weighted average common shares and common equivalent shares outstanding: | ||||||||||||||||||||
| Basic | 14,817,084 | 14,362,494 | 14,722,474 | 14,206,598 | ||||||||||||||||
| Diluted | 14,817,084 | 16,723,796 | 17,201,639 | 16,558,246 | ||||||||||||||||
| Luna Innovations Incorporated | ||||||||||
| Condensed Consolidated Statements of Cash Flows | ||||||||||
|
Six months ended
June 30, |
||||||||||
| 2014 | 2013 | |||||||||
| (unaudited) | ||||||||||
| Cash used in operating activities | ||||||||||
| Net income | $ | 7,624,385 | $ | 1,833,515 | ||||||
| Adjustments to reconcile net income (loss) to net cash used in operating activities | ||||||||||
| Depreciation and amortization | 336,564 | 489,244 | ||||||||
| Share-based compensation | 488,593 | 618,084 | ||||||||
| Warrant expense | — | — | ||||||||
| Gain on sale of discontinued operations, net of income taxes | (9,370,799 | ) | (3,868,114 | ) | ||||||
| Allowance for doubtful accounts or bad debt expense | — | 124,810 | ||||||||
| Tax benefit from utilization of net operating loss carryforward | (1,163,301 | ) | (1,021,538 | ) | ||||||
| Change in assets and liabilities: | ||||||||||
| Accounts receivable | (73,857 | ) | 834,122 | |||||||
| Inventory | (6,796 | ) | (309,217 | ) | ||||||
| Other current assets | 72,141 | (40,647 | ) | |||||||
| Other assets | 37,584 | 72,584 | ||||||||
| Accounts payable and accrued expenses | (761,149 | ) | 174,916 | |||||||
| Deferred credits | (299,712 | ) | (221,553 | ) | ||||||
| Net cash used in operating activities | (3,116,347 | ) | (1,313,794 | ) | ||||||
| Cash flows used in investing activities | ||||||||||
| Acquisition of property and equipment | (135,136 | ) | (69,108 | ) | ||||||
| Intangible property costs | (138,118 | ) | (145,858 | ) | ||||||
| Proceeds from sale of discontinued operations, net of fees | 10,927,268 | 4,522,460 | ||||||||
| Net cash provided by/(used in) investing activities | 10,654,014 | 4,307,494 | ||||||||
| Cash flows used in financing activities | ||||||||||
| Payments on capital lease obligations | (32,810 | ) | (26,641 | ) | ||||||
| Payment of debt obligations | (750,000 | ) | (625,000 | ) | ||||||
| Purchase of treasury stock | (32,221 | ) | — | |||||||
| Proceeds from the exercise of options and warrants | 173,796 | 60,349 | ||||||||
| Net cash used in financing activities | (641,235 | ) | (591,292 | ) | ||||||
| Net increase in cash or cash equivalents | 6,896,432 | 2,402,408 | ||||||||
| Cash and cash equivalents, beginning of period | 7,778,541 | 6,340,461 | ||||||||
| Cash and cash equivalents, end of period | $ | 14,674,973 | $ | 8,742,869 | ||||||
| Luna Innovations Incorporated | ||||||||||||||||||||
| Reconciliation of Net Income/(Loss) to EBITDA and Adjusted EBITDA | ||||||||||||||||||||
|
Three Months Ended
June 30, |
Six Months Ended
June 30, |
|||||||||||||||||||
| 2014 | 2013 | 2014 | 2013 | |||||||||||||||||
| (unaudited) | (unaudited) | |||||||||||||||||||
| Net income/(loss) | $ | (915,839 | ) | $ | (952,082 | ) | $ | 7,624,385 | $ | 1,833,515 | ||||||||||
| Less (loss)/income from discontinued operations, net of income taxes | (330,716 | ) | 83,254 | 9,342,723 |
4,187,783 |
|||||||||||||||
| Loss from continuing operations | (585,123 | ) | (1,035,336 | ) | (1,718,338 | ) |
(2,354,268 |
) | ||||||||||||
| Interest expense | 27,302 | 49,781 | 59,667 | 107,960 | ||||||||||||||||
| Tax (benefit) expense | (375,983 | ) | (659,341 | ) | (1,145,173 | ) | (1,541,768 | ) | ||||||||||||
| Depreciation and amortization | 134,259 | 260,979 | 336,564 | 489,244 | ||||||||||||||||
| EBITDA | (799,545 | ) | (1,383,917 | ) | (2,467,280 | ) |
(3,298,832 |
) | ||||||||||||
| Share-based compensation | 257,654 | 304,568 | 488,593 | 618,084 | ||||||||||||||||
| Adjusted EBITDA | $ | (541,891 | ) | $ | (1,079,349 | ) | $ | (1,978,687 | ) | $ |
(2,680,748 |
) | ||||||||
Source:
Luna Innovations Incorporated
Investor Contact:
Dale
Messick, CFO
Phone: 1.540.769.8400
Email: [email protected]