- Total revenues of $12.2 million for the
three months ended March 31, 2018, up 21% compared to the three
months ended March 31, 2017
- Products and licensing revenues of $7.6
million for the three months ended March 31, 2018, up 29% compared
to the three months ended March 31, 2017
- Net income improved to $0.1 million for
the three months ended March 31, 2018 compared to a net loss of
$(1.4) million for the three months ended March 31, 2017
- Adjusted EBITDA improved to $0.6
million for the three months ended March 31, 2018 compared to
$(0.2) million for the three months ended March 31, 2017
Luna Innovations Incorporated (NASDAQ: LUNA), a global leader in
advanced optical technology, today announced its financial results
for the three months ended March 31, 2018.
“By continuing to focus on our strategic priorities, we
delivered a profitable first quarter for the first time in our
history. We drove robust organic revenue growth of over 20%
compared to the three months ended March 31, 2017 in a quarter that
is typically our weakest, and we delivered the corresponding
improvement to our bottom line," said Scott Graeff, President and
Chief Executive Officer of Luna. "The strong revenue performance,
resulting largely from a nearly 70% increase in sales of our test
and measurement products, along with prudent cost management,
allowed us to realize positive net income from continuing
operations for the fourth consecutive quarter, also a company
record. Luna is positioned to continue to leverage the trends of
growth in optical connectivity in high speed networks and data
centers as well as the expanding use of composite materials and the
need for improved means of testing their structural integrity. We
expect those trends to drive top line growth into the future."
For the three months ended March 31, 2018, Luna reported net
income of $0.1 million compared to a net loss of $(1.4) million for
the three months ended March 31, 2017. Net income from continuing
operations improved by $1.0 million, to $0.1 million, or $0.01 per
share, for the three months ended March 31, 2018, compared to a net
loss from continuing operations of $(0.9) million, or $(0.03) per
share, for the three months ended March 31, 2017. Adjusted earnings
before interest, taxes, depreciation and amortization ("Adjusted
EBITDA") was $0.6 million for the three months ended March 31, 2018
compared to a loss of $(0.2) million for the three months ended
March 31, 2017. A reconciliation of net income/(loss) to adjusted
EBITDA can be found in the schedules included in this release.
First Quarter Financial
Summary
Total revenues for the three months ended March 31, 2018
were $12.2 million compared to $10.1 million for the three months
ended March 31, 2017. Technology development revenues
increased 9% to $4.6 million for the three months ended March 31,
2018, compared to $4.2 million for the three months ended March 31,
2017. Products and licensing revenues increased 29% to $7.6 million
for the three months ended March 31, 2018, compared to $5.9
million for the three months ended March 31, 2017. The increase in
the products and licensing revenues for the three months ended
March 31, 2018 compared to the three months ended March 31, 2017
was realized primarily in Luna's ODiSI, Optical Backscatter
Reflectometer, and tunable laser products.
Gross profit was $5.0 million, or 41% of revenues, for the three
months ended March 31, 2018, compared to gross profit of $3.9
million, or 38% of revenues, for the three months ended
March 31, 2017.
Selling, general and administrative expenses were $3.8 million
for the three months ended March 31, 2018, compared to $3.7
million for the three months ended March 31, 2017.
Research, development and engineering expenses were $1.1 million
for the three months ended March 31, 2018, compared to $0.9 million
for the three months ended March 31, 2017 due to increased
development costs associated with Luna's ODiSI and Terahertz
instruments.
Net income from continuing operations improved to $0.1 million
for the three months ended March 31, 2018, compared to a net
loss from continuing operations of $(0.9) million for the three
months ended March 31, 2017. Net loss from discontinued
operations was $(0.5) million for the three months ended
March 31, 2017.
Net income attributable to common stockholders for the three
months ended March 31, 2018 was $0.1 million, compared to a net
loss attributable to common stockholders of $(1.4) million for the
three months ended March 31, 2017. Adjusted EBITDA was $0.6 million
for the three months ended March 31, 2018, compared to $(0.2)
million for the three months ended March 31, 2017.
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 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 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 pm (EDT) today to discuss its financial
results for the three months ended March 31, 2018, and recent
business developments. The call can be accessed by dialing
844.578.9643 domestically or 270.823.1522 internationally prior to
the start of the call. The participant access code is 2475628.
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 leader in
optical technology, providing unique capabilities in high speed
optoelectronics and high performance fiber optic test products for
the telecommunications industry and distributed fiber optic sensing
for the aerospace and automotive industries. 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
Luna's expectations regarding Luna's future top line growth and
Luna continuing to leverage the trends of growth in optical
connectivity in high speed networks and data centers, as well as
the expanding use of composite materials and the need for improved
means of testing their structural integrity. 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, technological
challenges and those risks and uncertainties set forth in Luna’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 Luna’s website at www.lunainc.com. The
statements made in this release are based on information available
to Luna 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, 2018 2017 (unaudited)
Revenues: Technology development $ 4,636,776 $ 4,236,102 Products
and licensing 7,556,396 5,850,795 Total revenues
12,193,172 10,086,897 Cost of revenues: Technology
development 3,353,501 3,109,467 Products and licensing 3,813,553
3,101,045 Total cost of revenues 7,167,054
6,210,512 Gross profit 5,026,118 3,876,385
Operating expense: Selling, general and administrative 3,809,617
3,722,170 Research, development and engineering 1,101,488
928,772 Total operating expense 4,911,105 4,650,942
Operating income/(loss) 115,013 (774,557 ) Other
income/(expense): Investment income 75,912 — Other (expense)/income
(115 ) 351 Interest expense (40,738 ) (64,374 ) Total other
income/(expense) 35,059 (64,023 ) Income/(loss) from
continuing operations before income taxes 150,072 (838,580 ) Income
tax expense 1,396 26,690 Net income/(loss) from
continuing operations 148,676 (865,270 ) Loss from discontinued
operations, net of income tax of $0 — (490,717 ) Net loss
from discontinued operations — (490,717 ) Net income/(loss)
148,676 (1,355,987 ) Preferred stock dividend 64,425 34,096
Net income/(loss) attributable to common stockholders $
84,251 $ (1,390,083 ) Net income/(loss) per share from
continuing operations: Basic $ 0.01 $ (0.03 ) Diluted $ —
$ (0.03 ) Net loss per share from discontinued operations:
Basic $ — $ (0.02 ) Diluted $ — $ (0.02 ) Net
income/(loss) per share attributable to common stockholders: Basic
$ — $ (0.05 ) Diluted $ — $ (0.05 ) Weighted average
common shares and common equivalent shares outstanding: Basic
27,204,989 27,541,356 Diluted 31,198,833 27,541,356
Luna Innovations Incorporated Consolidated Balance
Sheets March 31, 2018 December 31, 2017
(unaudited) Assets Current assets: Cash and cash
equivalents $ 33,442,674 $ 36,981,533 Accounts receivable, net
8,098,703 7,869,168 Receivable from sale of HSOR business 4,001,496
4,000,976 Contract assets 2,408,930 1,778,142 Inventory 6,534,899
6,951,110 Prepaid expenses and other current assets 1,086,837
1,220,650 Total current assets 55,573,539 58,801,579
Long-term contract assets 263,722 209,699 Property and equipment,
net 3,425,544 3,453,741 Intangible assets, net 3,204,843 3,237,593
Goodwill 502,000 502,000 Other assets 18,024 18,024
Total assets $ 62,987,672 $ 66,222,636
Liabilities and stockholders’ equity Liabilities: Current
liabilities: Current portion of long-term debt obligations $
1,750,000 $ 1,833,333 Current portion of capital lease obligations
38,145 43,665 Accounts payable 2,357,649 2,962,863 Accrued
liabilities 5,742,777 6,557,649 Contract liabilities 1,804,125
3,428,625 Total current liabilities 11,692,696
14,826,135 Long-term deferred rent 1,148,370 1,184,438 Long-term
debt obligations 232,084 603,007 Long-term capital lease
obligations 63,184 71,275
Total liabilities
13,136,334 16,684,855 Commitments and contingencies
Stockholders’ equity: Preferred stock, par value $0.001, 1,321,514
shares authorized, issued and outstanding at March 31, 2018 and
December 31, 2017 1,322 1,322 Common stock, par value $0.001,
100,000,000 shares authorized, 28,365,549 and 28,354,822 shares
issued, 27,162,195 and 27,283,918 shares outstanding at March 31,
2018 and December 31, 2017 29,217 29,186 Treasury stock at cost,
1,203,354 and 1,070,904 shares at March 31, 2018 and December 31,
2017 (1,955,787 ) (1,649,746 ) Additional paid-in capital
83,744,496 83,563,208 Accumulated deficit (31,967,910 ) (32,406,189
)
Total stockholders’ equity 49,851,338 49,537,781
Total liabilities and stockholders’ equity $
62,987,672 $ 66,222,636
Luna Innovations
Incorporated Consolidated Statements of Cash Flows
Three Months Ended March 31, 2018
2017 (unaudited) Cash flows provided by/(used in)
operating activities Net income/(loss) $ 148,676 $ (1,355,987 )
Adjustments to reconcile net income/(loss) to net cash (used
in)/provided by operating activities Depreciation and amortization
307,852 956,687 Share-based compensation 94,606 170,084 Bad debt
expense — 29,671 Change in assets and liabilities Accounts
receivable (229,535 ) 1,824,454 Contract assets 221,386 187,448
Inventory (110,095 ) (352,435 ) Other current assets 133,293 55,092
Accounts payable and accrued expenses (1,456,154 ) (1,464,847 )
Contract liabilities (1,650,363 ) 13,880 Net cash (used
in)/provided by operating activities (2,540,334 ) 64,047
Cash flows used in investing activities Acquisition of
property and equipment (129,720 ) (157,308 ) Intangible property
costs (113,108 ) (133,054 ) Net cash used in investing activities
(242,828 ) (290,362 )
Cash flows used in financing
activities Payments on capital lease obligations (13,611 )
(12,697 ) Payments of debt obligations (458,333 ) (458,333 )
Repurchase of common stock (306,041 ) — Proceeds from the exercise
of options 22,288 820 Net cash used in financing
activities (755,697 ) (470,210 )
Net decrease in cash or cash
equivalents (3,538,859 ) (696,525 ) Cash and cash
equivalents-beginning of period 36,981,533 12,802,458
Cash and cash equivalents-end of period $ 33,442,674 $
12,105,933
Luna Innovations Incorporated
Reconciliation of Net Income/(Loss) to EBITDA and Adjusted
EBITDA Three Months Ended March 31,
2018 2017 (unaudited) Net income/(loss)
$ 148,676 $ (1,355,987 ) Less loss from discontinued operations,
net of income taxes — (490,717 ) Net income/(loss) from
continuing operations 148,676 (865,270 ) Interest expense 40,738
64,374 Tax expense 1,396 26,690 Depreciation and amortization
307,852 356,816 EBITDA 498,662 (417,390 ) Share-based
compensation 94,606 170,084 Adjusted EBITDA $ 593,268
$ (247,306 )
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version on businesswire.com: https://www.businesswire.com/news/home/20180509006394/en/
Investor Contact:Luna Innovations IncorporatedDale
Messick, CFO, 1-540-769-8400IR@lunainc.com
Luna Innovations (NASDAQ:LUNA)
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