Fourth quarter products and licensing revenue increase 18% compared
to prior year quarter; Net loss attributable to common stockholders
improves 46% to
As compared to the same quarter last year, total revenue decreased by
4%, from
The company reported a loss from continuing operations before income
taxes of
For the year ended
“With the successful completion of the sale transactions related to our
secure computing and communications group in the first quarter of 2013
and our fiber optic shape sensing technology in the first quarter of
2014, we have narrowed the company’s focus to concentrate on our key
initiative surrounding fiber optic sensing solutions for future growth,”
said
Fourth Quarter Financial and Business Summary
-
Total revenue decreased by 4%, from
$6.1 million in the fourth quarter of 2012 to$5.9 million in the fourth quarter of 2013. -
Technology development revenue decreased by 21%, to
$2.9 million , for the fourth quarter of 2013, from$3.6 million for the fourth quarter of 2012. -
Products and licensing revenue increased by 18%, from
$2.5 million in the fourth quarter of 2012 to$3.0 million in the fourth quarter of 2013. -
Gross profit for the fourth quarter of 2013 was
$2.0 million , or 34% of total revenue, consistent with gross profit of$2.0 million , or 33% of total revenue, for the fourth quarter of 2012. -
Selling, general and administrative expenses increased by 40% to
$3.5 million , or 60% of total revenue, for the fourth quarter of 2013, from$2.5 million , or 41% of total revenue, for the fourth quarter of 2012. SG&A expenses for the fourth quarter of 2013 were adversely impacted by incremental costs recognized in connection with the company’s sale of its fiber optic shape sensing technology, which was completed inJanuary 2014 . -
Total operating expenses increased to
$4.2 million , or 71% of total revenue, for the fourth quarter of 2013 from$3.1 million , or 50% of total revenue for the fourth quarter of 2012. -
Net loss attributable to common stockholders increased to
$2.0 million for the fourth quarter of 2013 from$0.6 million for the fourth quarter of 2012. -
Cash and cash equivalents totaled
$7.8 million atDecember 31, 2013 , as compared to$6.3 million atDecember 31, 2012 and$8.2 million at September 30, 2013.
Year Ended
-
Total revenue decreased by 16% to
$22.0 million for the year endedDecember 31, 2013 compared to$26.4 million for the year endedDecember 31, 2012 . -
Technology development revenue decreased by 24%, from
$15.1 million for the year endedDecember 31, 2012 to$11.4 million for the year endedDecember 31, 2013 . -
Products and licensing revenue decreased by 6%, from
$11.3 million for the year endedDecember 31, 2012 to$10.6 million for the year endedDecember 31, 2013 . -
Gross profit for the year ended
December 31, 2013 decreased by 23%, to$8.0 million , compared to a gross profit of$10.4 million for the year endedDecember 31, 2012 . Gross margin percentages decreased to 36% of revenue for the year endedDecember 31, 2013 from 39% of revenue for the year endedDecember 31, 2012 . -
Selling, general and administrative expenses increased 6% to
$10.9 million , or 49% of total revenue for the year endedDecember 31, 2013 , compared to$10.3 million , or 39% of total revenue for the year endedDecember 31, 2012 . -
Total operating expenses increased to
$13.6 million , or 62% of total revenue, for the year endedDecember 31, 2013 , from$12.8 million , or 48% of total revenue, for the year endedDecember 31, 2012 . -
Net loss attributable to common stockholders improved to
$0.8 million for the year endedDecember 31, 2013 , compared to a net loss attributable to common stockholders of$1.5 million for the year endedDecember 31, 2012 , largely resulting from a net after-tax gain of$3.3 million realized on the sale of the company’s secure computing and communications group for the year endedDecember 31, 2013 .
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 and commercialization of the
company’s shape sensing platform. 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 Statements of Operations | ||||||||||||||||
| Three Months Ended | ||||||||||||||||
| December 31, | Year ended December 31, | |||||||||||||||
| 2013 | 2012 | 2013 | 2012 | |||||||||||||
| (unaudited) | (unaudited) | |||||||||||||||
| Revenue: | ||||||||||||||||
| Technology development revenue | $ | 2,857,124 | $ | 3,598,133 | $ | 11,421,868 | $ | 15,126,834 | ||||||||
| Products and licensing revenue | 3,001,147 | 2,535,087 | 10,624,350 | 11,250,717 | ||||||||||||
| Total revenue | 5,858,271 | 6,133,220 | 22,046,218 | 26,377,551 | ||||||||||||
| Cost of revenue: | ||||||||||||||||
| Technology development costs | 2,218,877 | 2,674,741 | 8,882,071 | 10,749,335 | ||||||||||||
| Products and licensing costs | 1,666,437 | 1,420,063 | 5,182,633 | 5,242,043 | ||||||||||||
| Total cost of revenue | 3,885,314 | 4,094,804 | 14,064,704 | 15,991,378 | ||||||||||||
| Gross Profit | 1,972,957 | 2,038,416 | 7,981,514 | 10,386,173 | ||||||||||||
| Operating expense: | ||||||||||||||||
| Selling, general and administrative | 3,508,150 | 2,498,081 | 10,896,985 | 10,275,287 | ||||||||||||
| Research, development and engineering | 655,892 | 589,540 | 2,721,229 | 2,512,840 | ||||||||||||
| Total operating expense | 4,164,042 | 3,087,621 | 13,618,214 | 12,788,127 | ||||||||||||
| Operating loss | (2,191,085 | ) | (1,049,205 | ) | (5,636,700 | ) | (2,401,954 | ) | ||||||||
| Other income/(expense): | ||||||||||||||||
| Other income, net | 261,773 | 22,498 | 347,062 | 108,061 | ||||||||||||
| Interest expense | (38,419 | ) | (64,056 | ) | (189,151 | ) | (286,529 | ) | ||||||||
| Total other income/(expense) | 223,354 | (41,558 | ) | 157,911 | (178,468 | ) | ||||||||||
| Loss from continuing operations before income taxes | (1,967,731 | ) | (1,090,763 | ) | (5,478,789 | ) | (2,580,422 | ) | ||||||||
| Income tax (benefit)/expense | (365,798 | ) | — | (1,453,637 | ) | 21,417 | ||||||||||
| Loss from continuing operations | (1,601,933 | ) | (1,090,763 | ) | (4,025,152 | ) | (2,601,839 | ) | ||||||||
| (Loss)/income from discontinued operations, net of income taxes | (328,643 | ) | 503,375 | 3,314,179 | 1,217,454 | |||||||||||
| Net loss | (1,930,576 | ) | (587,388 | ) | (710,973 | ) | (1,384,385 | ) | ||||||||
| Preferred stock dividend | 26,166 | 24,780 | 102,327 | 119,754 | ||||||||||||
| Net loss attributable to common stockholders | $ | (1,956,742 | ) | $ | (612,168 | ) | $ | (813,300 | ) | $ | (1,504,139 | ) | ||||
| Net loss per share from continuing operations: | ||||||||||||||||
| Basic | $ | (0.11 | ) | $ | (0.08 | ) | $ | (0.28 | ) | $ | (0.19 | ) | ||||
| Diluted | $ | (0.11 | ) | $ | (0.08 | ) | $ | (0.28 | ) | $ | (0.19 | ) | ||||
| Net (loss)/income per share from discontinued operations: | ||||||||||||||||
| Basic | $ | (0.02 | ) | $ | 0.04 | $ | 0.23 | $ | 0.09 | |||||||
| Diluted | $ | (0.02 | ) | $ | 0.03 | $ | 0.20 | $ | 0.07 | |||||||
| Net loss per share attributable to common stockholders: | ||||||||||||||||
| Basic | $ | (0.14 | ) | $ | (0.04 | ) | $ | (0.06 | ) | $ | (0.11 | ) | ||||
| Diluted | $ | (0.14 | ) | $ | (0.04 | ) | $ | (0.06 | ) | $ | (0.11 | ) | ||||
| Weighted average common shares and common equivalent shares outstanding: | ||||||||||||||||
| Basic | 14,485,882 | 14,008,772 | 14,336,135 | 13,930,267 | ||||||||||||
| Diluted | 14,485,882 | 16,454,125 | 16,621,927 | 16,312,048 | ||||||||||||
| Luna Innovations Incorporated | ||||||||
| Condensed Consolidated Balance Sheets | ||||||||
| Year ended December 31, | ||||||||
| 2013 | 2012 | |||||||
| Assets | Unaudited | |||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 7,778,541 | $ | 6,340,461 | ||||
| Accounts receivable, net | 5,408,281 | 7,059,635 | ||||||
| Inventory, net | 3,346,177 | 3,336,916 | ||||||
| Prepaid expenses | 708,974 | 667,773 | ||||||
| Other current assets | 70,208 | 35,629 | ||||||
| Total current assets | 17,312,181 | 17,440,414 | ||||||
| Property and equipment, net | 2,060,709 | 2,426,638 | ||||||
| Intangible assets, net | 288,475 | 437,839 | ||||||
| Other assets | 42,710 | 152,877 | ||||||
| Total assets | $ | 19,704,075 | $ | 20,457,768 | ||||
| Liabilities and stockholders’ equity | ||||||||
| Liabilities: | ||||||||
| Current Liabilities | ||||||||
| Current portion of long term debt obligation | $ | 1,500,000 | $ | 1,500,000 | ||||
| Current portion of capital lease obligation | 66,617 | 54,091 | ||||||
| Accounts payable | 1,401,764 | 1,797,571 | ||||||
| Accrued liabilities | 3,454,418 | 2,747,175 | ||||||
| Deferred credits | 691,424 | 832,822 | ||||||
| Total current liabilities | 7,114,223 | 6,931,659 | ||||||
| Long-term debt obligation | 625,000 | 2,125,000 | ||||||
| Long-term lease obligation | 110,307 | 128,917 | ||||||
| Total liabilities | 7,849,530 | 9,185,576 | ||||||
| Commitments and contingencies | ||||||||
| Stockholders’ equity: | ||||||||
| Preferred stock, par value $0.001, 1,321,514 shares authorized, issued and outstanding at December 31, 2013 and 2012, respectively | 1,322 | 1,322 | ||||||
| Common stock, par value $0.001, 100,000,000 shares authorized, 14,527,335 and 14,009,280 shares issued and outstanding at December 31, 2013 and 2012, respectively | 14,842 | 14,245 | ||||||
| Additional paid-in capital | 62,756,571 | 61,361,505 | ||||||
| Accumulated deficit | (50,918,190 | ) | (50,104,880 | ) | ||||
| Total stockholders’ equity | 11,854,545 | 11,272,192 | ||||||
| Total liabilities and stockholders’ equity | $ | 19,704,075 | $ | 20,457,768 | ||||
| Luna Innovations Incorporated | ||||||||
| Condensed Consolidated Statements of Cash Flows | ||||||||
| Year ended December 31, | ||||||||
| 2013 | 2012 | |||||||
| (unaudited) | ||||||||
| Cash flows used in operating activities | ||||||||
| Net loss | $ | (710,973 | ) | $ | (1,384,385 | ) | ||
| Adjustments to reconcile net loss to net cash used in operating activities | ||||||||
| Depreciation and amortization | 935,477 | 1,092,027 | ||||||
| Share-based compensation | 1,166,379 | 1,862,533 | ||||||
| Gain on sale of discontinued operations, net of income taxes | (3,391,451 | ) | — | |||||
| Allowance for doubtful accounts | 134,811 | — | ||||||
| Tax benefit from utilization of net operating loss carryforward | (1,507,791 | ) | — | |||||
| Change in assets and liabilities: | ||||||||
| Accounts receivable | 1,533,827 | (1,101,549 | ) | |||||
| Inventory | (9,261 | ) | (10,482 | ) | ||||
| Other assets | (79,180 | ) | 478,919 | |||||
| Accounts payable and accrued expenses | 304,175 | (724,050 | ) | |||||
| Deferred credits | (178,305 | ) | (629,781 | ) | ||||
| Net cash used in operating activities | (1,802,292 | ) | (416,768 | ) | ||||
| Cash flows provided by/(used in) investing activities | ||||||||
| Acquisition of property and equipment | (186,956 | ) | (371,390 | ) | ||||
| Intangible property costs | (253,451 | ) | (224,537 | ) | ||||
| Proceeds from sale of discontinued operations, net of fees | 5,110,855 | — | ||||||
| Net cash provided by/(used in) investing activities | 4,670,448 | (595,927 | ) | |||||
| Cash flows used in financing activities | ||||||||
| Payments on debt obligations | (1,500,000 | ) | (1,625,000 | ) | ||||
| Payment on capital lease obligations | (57,033 | ) | (50,949 | ) | ||||
| Proceeds from the exercise of options and warrants | 126,957 | 89,978 | ||||||
| Net cash used in financing activities | (1,430,076 | ) | (1,585,971 | ) | ||||
| Net increase/(decrease) in cash or cash equivalents | 1,438,080 | (2,598,666 | ) | |||||
| Cash and cash equivalents—beginning of period | 6,340,461 | 8,939,127 | ||||||
| Cash and cash equivalents—end of period | $ | 7,778,541 | $ | 6,340,461 | ||||
| Luna Innovations Incorporated | ||||||||||||||||
| Reconciliation of Net Income/(Loss) to EBITDA and Adjusted EBITDA | ||||||||||||||||
| Three Months Ended | ||||||||||||||||
| December 31, | Year ended December 31, | |||||||||||||||
| 2013 | 2012 | 2013 | 2012 | |||||||||||||
| (unaudited) | (unaudited) | |||||||||||||||
| Net loss | $ | (1,930,576 | ) | $ | (587,388 | ) | $ | (710,973 | ) | $ | (1,384,385 | ) | ||||
| Less (loss)/income from discontinued operations, net of income taxes | (328,643 | ) | 503,375 | 3,314,179 | 1,217,454 | |||||||||||
| Loss from continuing operations | (1,601,933 | ) | (1,090,763 | ) | (4,025,152 | ) | (2,601,839 | ) | ||||||||
| Interest expense | 38,419 | 64,056 | 189,151 | 286,529 | ||||||||||||
| Tax (benefit)/expense | (365,798 | ) | — | (1,453,637 | ) | 21,417 | ||||||||||
| Depreciation and amortization | 224,102 | 277,529 | 935,477 | 1,092,027 | ||||||||||||
| EBITDA | (1,705,210 | ) | (749,178 | ) | (4,354,161 | ) | (1,201,866 | ) | ||||||||
| Share-based compensation | 269,825 | 450,861 | 1,166,379 | 1,862,533 | ||||||||||||
| Warrant expense | — | (35,696 | ) | — | 17,190 | |||||||||||
| Adjusted EBITDA | $ | (1,435,385 | ) | $ | (334,013 | ) | $ | (3,187,782 | ) | $ | 677,857 | |||||
Source:
Luna Innovations Incorporated
Dale Messick, CFO
1-540-769-8400
[email protected]