Total revenues increased 19% during the first
quarter of 2015 compared to the first quarter of 2014; products and
licensing revenues increased 37% compared to the first quarter of
2014
Luna Innovations Incorporated (NASDAQ: LUNA) today announced its
financial results for the three months ended March 31,
2015.
- Total revenues for the quarter were
$5.3 million, an increase of 19% compared to the same quarter last
year
- Products and licensing revenues were
$2.5 million, an increase of 37% compared to the first quarter in
2014
- Gross profit for the quarter was $2.3
million, an increase of 47% compared to the same period last
year
“I am very pleased with our continued growth in revenues and
improved operating results,” said My Chung, president and chief
executive officer of Luna. "Our enhanced revenues and continued
expense control resulted in a $1.1 million improvement in our
quarterly Adjusted EBITDA, which excludes the transaction-related
costs that we recognized associated with our merger with Advanced
Photonix, Inc. With our improving operating results, the additional
growth that we expect to recognize as a result of the merger, and
the expected synergies of the combined companies, we are excited by
our potential for accelerated growth and enhanced
profitability.”
First Quarter Financial and Business
Summary
Total revenues for the three months ended March 31, 2015,
increased 19% to $5.3 million, compared to $4.5 million for the
same period of 2014. The increase resulted primarily from an
increase in our products and licensing segment, whose revenues grew
by 37% to $2.5 million during the first quarter of 2015, compared
to $1.8 million during the same period in 2014. Technology
development revenues increased 7% to $2.9 million compared to $2.7
million for the three months ended March 31, 2014, driven by growth
in our optical systems group and our nano-materials group.
Gross profit increased to $2.3 million, or 43% of total
revenues, for the three months ended March 31, 2015, compared to
gross profit of $1.6 million, or 35% of total revenues, for the
same period in 2014. The improved margin resulted from the revenue
mix, with products and licensing revenues, which typically provide
a higher gross margin than technology development revenues,
representing a higher proportion of total revenues in the first
quarter of 2015.
Selling, general and administrative expenses increased 66% to
$4.6 million for the first quarter of 2015, compared to $2.8
million for the first quarter of 2014. Selling, general and
administrative expenses of $4.6 million in the first quarter of
2015 included $1.8 million of non-recurring costs associated with
the merger with Advanced Photonix, Inc. Research, development and
engineering expenses decreased to $0.3 million for the first
quarter of 2015 compared to $0.7 million for the first quarter of
2014, principally due to $0.2 million in lower labor charges
following the sale of the medical shape sensing business in January
2014.
Growth in revenues and margins offset by increased operating
expenses resulted in a $0.7 million increase in operating loss to
$2.6 million during the first quarter of 2015 compared to $1.9
million for the same period last year. Excluding the non-recurring
transaction expenses, net loss would have been $0.8 million for the
first quarter of 2015, an improvement of $1.1 million compared to
the first quarter of 2014.
Net loss attributable to common stockholders for the first
quarter of 2015 was $2.7 million compared to a net income of $8.5
million during the first quarter of 2014 due to the gain on the
sale of our medical shape sensing business.
Adjusted EBITDA improved to $(0.4) million for the first quarter
of 2015, compared to $(1.5) million for the first quarter of
2014.
Luna-API Merger
On May 8, 2015, the stockholders of Luna Innovations
Incorporated and Advanced Photonix, Inc. approved the merger of the
two companies and the merger was completed. The combined company
provides greater capabilities across a broadened market base,
enhancing our opportunity for growth. The combined company has a
strong foundation from Luna’s core test & measurement products
and API’s High Speed Optical Receiver (HSOR) and Optosolutions
product lines, and a pipeline of emerging opportunities through
API's Terahertz platform and our technology development
division.
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 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. 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 5:00 p.m. (EDT) today to discuss its financial
results and business developments for the first quarter of 2015.
The call can be accessed by dialing 866.700.6067 domestically or
617.213.8834 internationally prior to the start of the call. The
participant access code is 32924143. Investors are advised
to dial in at least five minutes prior to the call to register. The
conference call will also be webcast live over the Internet. The
webcast can be accessed by logging on to the “Investor Relations”
section of the Luna website, www.lunainc.com, prior to the event. The webcast
will be archived under the “Webcasts and Presentations” section of
the Luna website for at least 30 days following the conference
call.
About Luna:
Luna Innovations Incorporated (www.lunainc.com) is a public
company composed of scientists, engineers, and business
professionals developing and manufacturing a new generation of
technologies and products. It has been successful in taking
innovative technologies from applied research to product
development and ultimately to the commercial market, driving
breakthroughs in fields such as aerospace, automotive,
telecommunications, healthcare, energy, and defense.
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 operating results and
future growth of the company’s business, greater capabilities as a
combined company, broader market base, pipeline of opportunities,
other synergies from the merger with Advanced Photonix, Inc., and
potential for improved profitability. 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,
integration or other operational issues related to the merger,
technological challenges and those risks and uncertainties set
forth in the company’s periodic reports and other filings with the
Securities and Exchange Commission. Such filings are available at
the SEC’s website at www.sec.gov and at the company’s website at
www.lunainc.com. The statements made in this release are based on
information available to the company as of the date of this release
and Luna undertakes no obligation to update any of the
forward-looking statements after the date of this release.
Luna Innovations Incorporated
Consolidated Statements of
Operations
Three Months Ended March 31, 2014
2015 (unaudited) Revenues: Technology
development revenues $ 2,675,452 $ 2,875,515 Products and licensing
revenues 1,796,429 2,463,587 Total
revenues 4,471,881 5,339,102 Cost of
revenues: Technology development costs 2,025,155 2,083,624 Products
and licensing costs 894,640 966,689
Total cost of revenues 2,919,795 3,050,313
Gross Profit 1,552,086 2,288,789
Operating expense: Selling, general and administrative 2,755,078
4,569,107 Research, development and engineering 749,154
334,891 Total operating expense
3,504,232 4,903,998 Operating loss
(1,952,146 ) (2,615,209 ) Other income/(expense): Other
income, net 82,106 — Interest expense (32,365 )
(9,137 ) Total other income/(expense) 49,741
(9,137 ) Loss from continuing operations, before income taxes
(1,902,405 ) (2,624,346 ) Income tax (benefit)/expense
(769,190 ) 2,808 Net loss from continuing operations
(1,133,215 ) (2,627,154 ) Income from discontinued operations, net
of income taxes 9,673,439 — Net
income/(loss) 8,540,224 (2,627,154 ) Preferred stock dividend
29,536 26,560 Net income/(loss)
attributable to common stockholders $ 8,510,688 $ (2,653,714
) Net loss per share from continuing operations: Basic and diluted
$ (0.08 ) $ (0.17 ) Net income per share from discontinued
operations: Basic and diluted $ 0.66 $ — Net
income/(loss) per share attributable to common stockholders: Basic
and diluted $ 0.58 $ (0.18 ) Weighted average common shares
and common equivalent shares outstanding: Basic and diluted
14,653,262 15,117,679
Luna Innovations Incorporated
Consolidated Balance Sheets
December 31, 2014 March 31, 2015
(unaudited) Assets Current assets: Cash and cash
equivalents $ 14,116,969 $ 13,296,415 Accounts receivable, net
5,689,615 4,817,836 Inventory, net 3,364,233 3,807,294 Prepaid
expenses 523,553 425,133 Other current assets 191,749
221,411 Total current assets 23,886,119 22,568,089
Property and equipment, net 3,497,057 3,379,214 Intangible assets,
net 199,277 181,491 Other assets 1,995 1,995
Total assets $ 27,584,448 $ 26,130,789
Liabilities and stockholders’ equity Liabilities: Current
Liabilities: Current portion of long-term debt obligation $ 625,000
$ 250,000 Current portion of capital lease obligation 70,725 66,492
Accounts payable 1,447,177 2,266,437 Accrued liabilities 3,965,945
4,522,346 Deferred revenue 861,081 811,918
Total current liabilities 6,969,928 7,917,193 Long-term
deferred rent 1,570,377 1,536,067 Long-term lease obligation
39,582 26,529
Total liabilities
8,579,887 9,479,789 Commitments and contingencies Stockholders’
equity: Preferred stock, par value $ 0.001, 1,321,514 shares
authorized, issued and outstanding at December 31, 2014 and March
31, 2015 1,322 1,322 Common stock, par value $ 0.001, 100,000,000
shares authorized, 15,110,924 and 15,117,744 shares issued,
15,088,199 and 15,095,017 shares outstanding at December 31, 2014
and March 31, 2015 15,541 15,567 Less treasury stock at cost,
22,725 shares at December 31, 2014 and March 31, 2015 (32,221 )
(32,221 ) Additional paid-in capital 64,147,666 64,447,793
Accumulated deficit (45,127,747 ) (47,781,461 )
Total stockholders’ equity 19,004,561
16,651,000
Total liabilities and stockholders’ equity
$ 27,584,448 $ 26,130,789
Luna Innovations Incorporated
Consolidated Statements of Cash
Flows
Three months ended March 31, 2014
2015 (unaudited) Cash flows used in operating
activities Net income/(loss) $ 8,540,224 $ (2,627,154 )
Adjustments to reconcile net income/(loss) to net cash used in
operating activities Depreciation and amortization 202,305 165,081
Share-based compensation 230,939 271,077 Gain on sale of
discontinued operations, net of income taxes (9,701,515 ) — Tax
benefit from utilization of loss from current year operations
(787,318 ) — Change in assets and liabilities Accounts receivable
896,194 871,779 Inventory 13,314 (443,061 ) Other current assets
112,286 68,758 Other assets 18,792 — Accounts payable and accrued
expenses (821,763 ) 1,341,352 Deferred revenue (138,593 )
(49,163 ) Net cash used in operating activities
(1,435,135 ) (401,331 )
Cash flows provided by/(used in)
investing activities Acquisition of property and equipment
(67,944 ) (18,321 ) Intangible property costs (126,091 ) (11,131 )
Proceeds from sale of discontinued operations, net of fees
4,958,891 — Net cash provided by/(used in)
investing activities 4,764,856 (29,452 )
Cash flows used in financing activities Payments on capital
lease obligations (16,282 ) (17,286 ) Payment of debt obligations
(375,000 ) (375,000 ) Purchase of treasury stock — — Proceeds from
the exercise of options and warrants 169,035
2,515 Net cash used in financing activities (222,247
) (389,771 )
Net increase in cash or cash equivalents
3,107,474 (820,554 ) Cash and cash equivalents-beginning of period
7,778,541 14,116,969 Cash and cash
equivalents-end of period $ 10,886,015 $ 13,296,415
Luna Innovations Incorporated
Reconciliation of Net (Loss)/Income to
EBITDA and Adjusted EBITDA
Three Months Ended March 31, 2014
2015 (unaudited) Net income/(loss) $ 8,540,224
$ (2,627,154 ) Less income/(loss) from discontinued operations, net
of income taxes 9,673,439 — Net loss
from continuing operations (1,133,215 ) (2,627,154 ) Interest
expense (32,365 ) (9,137 ) Tax benefit (769,190 ) 2,808
Depreciation and amortization 202,305 165,081
EBITDA (1,732,465 ) (2,468,402 ) Share-based compensation
250,209 278,468 Fees associated with merger —
1,801,215 Adjusted EBITDA $ (1,482,256 ) $ (388,719 )
Luna Innovations IncorporatedInvestor Contact:Dale
Messick, CFO1-540-769-8400IR@lunainc.com
Luna Innovations (NASDAQ:LUNA)
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