Adjusted EBITDA of $0.4 million and net loss of
$(0.8) million, for the third quarter of 2015, Luna's first full
quarter results following its merger with Advanced Photonix,
Inc.
Luna Innovations Incorporated (NASDAQ: LUNA) today announced its
financial results for the three months and nine months ended
September 30, 2015, the company's first full quarter of
operating results following its merger with Advanced Photonix, Inc.
("API").
The company's adjusted earnings before interest, taxes,
depreciation and amortization ("Adjusted EBITDA") was $0.4 million
for the three months ended September 30, 2015 compared to an
Adjusted EBITDA loss of $(0.3) million for the three months ended
September 30, 2014. Net loss attributable to common stockholders
was $(0.8) million for each of the three months ended September 30,
2015 and September 30, 2014. For the nine months ended September
30, 2015, Adjusted EBITDA was $0.6 million compared to an Adjusted
EBITDA loss of $(2.3) million for the first nine months of 2014.
Net loss attributable to common stockholders for the nine months
ended September 30, 2015 was $(5.7) million compared to net
income attributable to common stockholders of $6.8 million for the
first nine months of 2014.
“We are excited to again be reporting positive Adjusted EBITDA
following our merger with API as we continue to realize the
synergies of combining these two companies,” said My Chung,
president and chief executive officer of Luna. "In the third
quarter, the Picometrix brand of products returned to the higher
revenue levels that API experienced in mid-2014, with the
deployment of new fiber optic networks, including 100G networks in
Asia and North America, creating increased demand for our high
speed optical receiver and detector products."
Third Quarter Financial
Summary
Total revenues for the three months ended September 30, 2015
were $13.2 million, compared to $5.4 million for the same period of
2014. Total revenues of $13.2 million included $7.8 million of
revenue from the operations of API for the third quarter of 2015.
Product and licensing revenue grew to $9.9 million for the three
months ended September 30, 2015, compared to $2.3 million for the
three months ended September 30, 2014. Product and licensing
revenue for the third quarter of 2015 included $7.4 million
attributable to the operations of API. Revenues from sales of
legacy Luna fiber optic test & measurement equipment increased
12% for the three months ended September 30, 2015 compared to the
three months ended September 30, 2014.
With the inclusion of API operating results in the third quarter
of 2015, gross profit increased to $5.0 million, or 38% of total
revenues, for the three months ended September 30, 2015, compared
to gross profit of $2.1 million, or 39% of total revenues, for the
three months ended September 30, 2014.
Selling, general and administrative expenses increased to $4.2
million for the three months ended September 30, 2015, compared to
$2.3 million for the three months ended September 30, 2014.
Selling, general and administrative expenses for the three months
ended September 30, 2015 included $1.5 million associated with the
acquired operations of API. Incremental depreciation and
amortization expense related to the step-up in bases of the API
assets acquired was $0.4 million.
Research, development and engineering expenses increased to $1.5
million for the third quarter of 2015 compared to $0.5 million for
the third quarter of 2014. Research, development and engineering
expenses included $1.0 million of costs from the operations of API
for the three months ended September 30, 2015.
Operating loss was $(0.7) million for each of the three months
ended September 30, 2015 and September 30, 2014. The operating loss
for the three months ended September 30, 2015 included $0.1 million
of transaction-related expenses associated with Luna's merger with
API and $0.4 million of incremental depreciation and amortization
expense related to the step-up in bases of the acquired API assets.
Excluding the impact of these transaction costs and purchase
accounting amortization, operating loss would have improved to
$(0.2) million for the three months ended September 30, 2015.
Year to Date Financial
Summary
For the nine months ended September 30, 2015, total revenues
were $28.6 million compared to $15.1 million for the nine months
ended September 30, 2014. Total revenues for the nine months ended
September 30, 2015 included $11.8 million of revenues from API
during the period from the closing of the merger with API on May 8,
2015 through September 30, 2015. Revenues from Luna's legacy
business grew $1.7 million, or 11%, for the first nine months of
2015 compared to the first nine months of 2014. The increased
revenue from Luna's legacy business resulted primarily from
increased sales of the company's ODiSI and Optical Backscatter
Reflectometer products.
Gross profit increased to $11.5 million, or 40% of total
revenues, for the nine months ended September 30, 2015 compared to
$5.6 million, or 37% of total revenues, for the first nine months
of 2014. The improved margin is attributable to the greater
proportion of product sales within the total revenue mix as a
result of the addition of revenues from API's business in the
company's operating results as well as the continued growth in
sales of the legacy Luna products.
Selling, general and administrative expenses increased to $13.9
million for the nine months ended September 30, 2015 compared to
$7.6 million for the nine months ended September 30, 2014. Selling,
general and administrative expenses for the first nine months of
2015 included $3.6 million of non-recurring merger- related
expenses and $0.8 million of incremental depreciation and
amortization expense related to the step-up in bases of the API
assets acquired. Research, development and engineering expenses
were $3.0 million for the nine months ended September 30, 2015
compared to $1.7 million for the first nine months of 2014.
Research, development and engineering expenses for the nine months
ended September 30, 2015 included $1.4 million of expenses related
to the operations of API for the period from the closing of the
merger through September 30, 2015.
Net loss attributable to common stockholders was $(5.7) million
for the nine months ended September 30, 2015 compared to net income
attributable to common stockholders of $6.8 million for the nine
months ended September 30, 2014. Net income for the nine months
ended September 30, 2014 was favorably impacted by an after-tax
gain on discontinued operations of $9.1 million resulting from the
sale of the company's medical shape sensing business in January
2014. Adjusted EBITDA improved to $0.6 million for the nine months
ended September 30, 2015 compared to an Adjusted EBITDA loss of
$(2.3) million for the nine months ended September 30, 2014.
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, including expenses incurred in connection with Luna's
merger with API. 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. (EST) today to discuss its financial
results and business developments for the third quarter of 2015.
The call can be accessed by dialing 855.236.2056 domestically or
267.753.2162 internationally prior to the start of the call. The
participant access code is 3056296. 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) develops,
manufactures and markets fiber optic sensing, test and measurement
products and is focused on bringing new and innovative technology
solutions to measure, monitor, protect and improve critical
processes in the aerospace, automotive, energy, composite,
telecommunications and defense industries. Following its merger
with API, the company also packages optoelectronic semiconductors
into high speed optical receivers (HSOR products), custom
optoelectronic subsystems (Optosolutions products) and Terahertz
(THz) instrumentation. Luna is organized into two business
segments, which work closely together to turn ideas into products:
a Technology Development segment and a Products and Licensing
segment. Luna's business model is designed to accelerate the
process of bringing new and innovative technologies to market.
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
the company's expectations regarding the company’s future financial
performance, continuing synergies following the merger with API,
and potential demand for the company's HSOR and detector 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, 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 ("SEC"). Such filings are available on the SEC’s website
at www.sec.gov and on 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
September 30, Nine Months Ended September 30,
2015 2014 2015 2014
(unaudited) (unaudited) Revenues:
Technology development $ 3,277,442 $ 3,067,022 $ 9,881,228 $
8,961,909 Products and licensing 9,927,788 2,303,508
18,688,852 6,108,799 Total revenues 13,205,230
5,370,530 28,570,080 15,070,708 Cost of
revenues: Technology development 2,558,987 2,379,105 7,218,757
6,793,061 Products and licensing 5,667,170 908,175
9,886,557 2,654,305 Total cost of revenues 8,226,157
3,287,280 17,105,314 9,447,366 Gross
Profit 4,979,073 2,083,250 11,464,766
5,623,342 Operating expense: Selling, general and
administrative 4,210,718 2,329,713 13,916,545 7,551,512 Research,
development and engineering 1,491,096 473,527
2,982,451 1,707,190 Total operating expense 5,701,814
2,803,240 16,898,996 9,258,702
Operating loss (722,741 ) (719,990 ) (5,434,230 ) (3,635,360 )
Other income/(expense): Other income/(expense), net 14,765 — (7,602
) 111,431 Interest expense (77,417 ) (21,275 ) (136,520 ) (80,942 )
Total other income/(expense) (62,652 ) (21,275 ) (144,122 ) 30,489
Loss from continuing operations, before income taxes
(785,393 ) (741,265 ) (5,578,352 ) (3,604,871 ) Income tax
expense/(benefit) 16,296 (274,709 ) 19,104 (1,419,882
) Net loss from continuing operations (801,689 ) (466,556 )
(5,597,456 ) (2,184,989 ) (Loss)/income from discontinued
operations, net of income taxes — (277,614 ) —
9,065,141 Net (loss)/income (801,689 ) (744,170 ) (5,597,456
) 6,880,152 Preferred stock dividend 18,217 26,760
64,798 83,630 Net (loss)/income attributable to
common stockholders $ (819,906 ) $ (770,930 ) $ (5,662,254 ) $
6,796,522 Net loss per share from continuing operations:
Basic and diluted $ (0.03 ) $ (0.03 ) $ (0.26 ) $ (0.15 ) Net
(loss)/income per share from discontinued operations: Basic and
diluted $ — $ (0.02 ) $ — $ 0.61 Net
(loss)/income per share attributable to common stockholders: Basic
and diluted $ (0.03 ) $ (0.05 ) $ (0.26 ) $ 0.46 Weighted
average common shares and common equivalent shares outstanding:
Basic and diluted 27,393,392 15,016,429 21,530,315
14,821,619
Luna Innovations
Incorporated Consolidated Balance Sheets
September 30, December 31, 2015
2014 (unaudited) Assets Current assets: Cash
and cash equivalents $ 7,090,036 $ 14,116,969 Accounts receivable,
net 9,322,295 5,689,615 Inventory 10,037,202 3,364,233 Prepaid
expenses and other current assets 1,672,120 715,302
Total current assets 28,121,653 23,886,119 Property and
equipment, net 6,672,507 3,497,057 Intangible assets, net
11,301,624 199,277 Goodwill 913,882 — Other assets 88,948
1,995
Total assets $ 47,098,614
$ 27,584,448
Liabilities and stockholders’ equity
Liabilities: Current Liabilities: Current portion of long-term debt
obligations $ 1,500,000 $ 625,000 Current portion of capital lease
obligations 46,616 70,725 Accounts payable 3,999,036 1,447,177
Accrued liabilities 6,710,438 5,468,849 Deferred revenue 788,974
861,081 Total current liabilities 13,045,064
8,472,832 Long-term deferred rent 1,427,572 1,570,377 Long-term
debt obligations 4,000,000 — Long-term capital lease obligations
40,635 39,582
Total liabilities
18,513,271 10,082,791 Commitments and
contingencies Stockholders’ equity: Preferred stock, par value $
0.001, 1,321,514 shares authorized, issued and outstanding at
September 30, 2015 and December 31, 2014 1,322 1,322 Common stock,
par value $ 0.001, 100,000,000 shares authorized, 27,558,569 and
15,110,924 shares issued, 27,390,919 and 15,088,199 shares
outstanding at September 30, 2015 and December 31, 2014 28,072
15,541 Less treasury stock at cost, 167,650 and 22,725 shares at
September 30, 2015 and December 31, 2014 (184,934 ) (32,221 )
Additional paid-in capital 81,033,787 64,147,666 Accumulated
deficit (52,292,904 ) (46,630,651 )
Total stockholders’
equity 28,585,343 17,501,657
Total
liabilities and stockholders’ equity $ 47,098,614
$ 27,584,448
Luna Innovations Incorporated
Consolidated Statements of Cash Flows Nine Months
Ended September 30, 2015 2014
(unaudited) Cash flows used in operating activities
Net (loss)/income $ (5,597,456 ) $ 6,880,152 Adjustments to
reconcile net (loss)/income to net cash used in operating
activities Depreciation and amortization 1,548,808 491,066
Share-based compensation 846,727 738,802 Bad debt expense 10,375 —
Gain on sale of discontinued operations, net of income taxes —
(9,093,268 ) Tax benefit from utilization of net operating loss —
(1,437,958 ) Change in assets and liabilities Accounts receivable
(328,061 ) 139,950 Inventory (1,426,968 ) (92,320 ) Other current
assets (396,671 ) (170,857 ) Other assets — 40,715 Accounts payable
and accrued expenses (897,163 ) (98,920 ) Deferred revenue (72,107
) (286,937 ) Net cash used in operating activities
(6,312,516 ) (2,889,575 )
Cash flows (used in)/provided
by investing activities Acquisition of property and equipment
(387,508 ) (199,532 ) Intangible property costs (237,245 ) (197,683
) Proceeds from sale of discontinued operations, net of fees —
10,927,268 Cash acquired in business combination 374,517
— Net cash (used in)/provided by investing activities
(250,236 ) 10,530,053
Cash flows used in financing
activities Payments on capital lease obligations (56,629 )
(49,587 ) Payments of debt obligations (6,337,355 ) (1,125,000 )
Proceeds from term loan 6,000,000 — Purchase of treasury stock
(152,713 ) (32,221 ) Proceeds from the exercise of options 82,516
217,945 Net cash used in financing activities
(464,181 ) (988,863 )
Net (decrease)/increase in cash or
cash equivalents (7,026,933 ) 6,651,615 Cash and cash
equivalents-beginning of period 14,116,969 7,778,541
Cash and cash equivalents-end of period $ 7,090,036
$ 14,430,156
Luna Innovations
Incorporated Reconciliation of Net (Loss)/Income to EBITDA
and Adjusted EBITDA Three Months Ended
September 30, Nine Months Ended September
30, 2015 2014 2015
2014 (unaudited) (unaudited) Net (loss)/income
$ (801,689 ) $ (744,170 ) $ (5,597,456 ) $ 6,880,152
Less (loss)/income from discontinued operations, net of income
taxes — (277,614 ) — 9,065,141
Net loss from continuing operations (801,689 ) (466,556 )
(5,597,456 ) (2,184,989 ) Interest expense 77,417 21,275 136,520
80,942 Tax expense/(benefit) 16,296 (274,709 ) 19,104 (1,419,882 )
Depreciation and amortization
724,557 154,502 1,548,808
491,066 EBITDA 16,581 (565,488 ) (3,893,024 ) (3,032,863 )
Share-based compensation 275,288 250,209 846,727 738,802
Non-recurring charges 107,677 — 3,649,179
— Adjusted EBITDA $ 399,546 $
(315,279 ) $ 602,882 $ (2,294,061 )
View source
version on businesswire.com: http://www.businesswire.com/news/home/20151110006858/en/
Investor Contact:Luna Innovations IncorporatedDale
Messick, CFO1-540-769-8400IR@lunainc.com
Luna Innovations (NASDAQ:LUNA)
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