Reaffirms 2021 Outlook
Highlights
- Total revenues of $26.3 million for the three months ended
March 31, 2021, up 53% compared to the three months ended March 31,
2020
- Operating loss of $0.8 million for the three months ended
March 31, 2021, versus operating income of $0.4 million for the
three months ended March 31, 2020; primarily due to $1.4 million of
transaction related costs
- Net loss of $0.3 million for the three months ended March
31, 2021, compared to net loss of $1.1 million, for the three
months ended March 31, 2020
- Adjusted EBITDA increased to $2.1 million for the three
months ended March 31, 2021, compared to $1.6 million for the three
months ended March 31, 2020
- Adjusted EPS of $0.03 for the three months ended March 31,
2021, compared to $0.02 for the three months ended March 31,
2020
- Company reaffirms 2021 outlook
Luna Innovations Incorporated (NASDAQ: LUNA), a global leader in
advanced optical technology, today announced its financial results
for the three months ended March 31, 2021.
"Q1 was a busy quarter for Luna as we continue to build for our
future growth,” said Scott Graeff, President and Chief Executive
Officer of Luna. "I am proud of the Luna team’s relentless focus on
four significant operational and systems implementation projects
during the quarter. We implemented organization-wide upgrades to
enterprise software, through the implementation of NetSuite and
Salesforce.com, all while continuing the integration of the two
acquisitions we announced toward the end of last year – OptaSense
and New Ridge Technologies. I can characterize this quarter as
strong blocking and tackling. And, we did all of this while
continuing to grow total revenues, expanding gross margins and
growing adjusted EBITDA.”
Graeff continued, “We are at another inflection point of growth,
just as we were several years ago. Based on our first-quarter
performance and the continued momentum we've seen in the first part
of Q2, we are comfortable reaffirming our full-year 2021 financial
outlook. As always, we will continue to focus on supporting
customers with excellence, delivering strong results for our
shareholders, and providing a safe and supportive environment for
our employees."
First-Quarter Fiscal 2021 Financial
Summary
Highlights of the financial results for the three months ended
March 31, 2021 are:
Three Months Ended March 31,
(in thousands, except share and per share
data)
2021
2020
Change
Revenues:
Lightwave
$
20,997
$
11,554
82
%
Luna Labs
5,302
5,587
(5
)%
Total revenues
26,299
17,141
53
%
Gross profit
13,429
8,364
61
%
Gross margin
51
%
49
%
Operating expense
14,223
7,974
78
%
Operating (loss)/income
(794
)
390
(304
)%
Operating margin
(3
)%
2
%
Other (expense) income and income tax
benefit (expense)
476
(70
)
780
%
Net loss
$
(318
)
$
(1,116
)
72
%
Earnings per diluted share (EPS)
$
(0.01
)
$
(0.03
)
(67
)%
Adjusted EPS
$
0.03
$
0.02
50
%
Diluted weighted average shares
outstanding
33,353,456
32,549,487
Adjusted EBITDA
$
2,148
$
1,580
36
%
A reconciliation of Adjusted EPS and Adjusted EBITDA to the
nearest comparable GAAP figures can be found in the schedules
included in this release.
Lightwave revenues for the three months ended March 31, 2021
increased compared to the prior-year period, due primarily to
increased revenues from Luna's sensing and communication test
businesses. Luna Labs revenue decreased for the three months ended
March 31, 2021, compared to the prior-year period, primarily due to
delays caused by COVID-related issues.
Gross margin increased to 51% for the three months ended March
31, 2021, compared to 49% for the three months ended March 31,
2020, driven by increased sales in Luna's Lightwave division.
Operating income and margin declined to $(0.8) million and (3)% of
total revenues, respectively, for the three months ended March 31,
2021, compared to $0.4 million and 2% of total revenues,
respectively, for the three months ended March 31, 2020. The
decrease in operating income was primarily due to $0.9 million
integration and transaction costs, as well as $0.5 million of
amortization of intangible assets and inventory step-up related to
Luna's recently completed acquisitions and its continuing portfolio
activities.
Net loss was $0.3 million, or $0.01 per fully diluted share, for
the three months ended March 31, 2021, compared to a net loss of
$1.1 million, or $0.03 per fully diluted share, for the three
months ended March 31, 2020. Adjusted EPS was $0.03 for the three
months ended March 31, 2021, compared to $0.02 for the three months
ended March 31, 2020.
Adjusted EBITDA was $2.1 million for the three months ended
March 31, 2021, compared to $1.6 million for the three months ended
March 31, 2020. The increase was driven by revenue growth and
increased gross profit.
2021 Full-Year Outlook
Luna is reaffirming its full-year guidance:
- Total revenues of $122 million to $127 million
- Adjusted EBITDA of $16 million to $19 million
Adjusted EBITDA is a non-GAAP measure. Luna is not providing an
outlook for net income, which is the most directly comparable
generally accepted accounting principles ("GAAP") measure to
Adjusted EBITDA, because changes in the items that Luna excludes
from net income to calculate Adjusted EBITDA, such as share-based
compensation, tax expense, and significant non-recurring charges,
among other things, can be dependent on future events that are less
capable of being controlled or reliably predicted by management and
are not part of Luna's routine operating activities.
The outlook above does not include any future acquisitions,
divestitures, or unanticipated events.
Non-GAAP Financial
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 GAAP. Adjusted EBITDA and
Adjusted EPS provide 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 and Adjusted EPS 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 and Adjusted EPS 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 5:00 pm (ET) today to discuss its financial
results for the three months ended March 31, 2021. The investor
conference call will be available via live webcast on the Luna
website at www.lunainc.com under the tab “Investor Relations.” To
participate by telephone, the domestic dial-in number is
844.578.9643 and the international dial-in number is 270.823.1522.
The participant access code is 4494192. Investors are advised to
dial in at least five minutes prior to the call to register. The
webcast will be archived on the company’s website under “Webcasts
and Presentations” for 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-performance, fiber optic-based, test products for the
telecommunications industry and distributed fiber optic-based
sensing for the aerospace and automotive industries. Luna is
organized into two business segments, which work closely together
to turn ideas into products: a Lightwave segment and a Luna Labs
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 its projected 2021 financial results
and outlook and the Company's growth potential. 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, failure of
target market to grow and expand, technological and strategic
challenges, uncertainties related to the ultimate impact of the
COVID-19 pandemic and those risks and uncertainties set forth in
Luna’s Form 10-Q for the three months ended March 31, 2021, and
Luna's other periodic reports and 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 Balance Sheets (in thousands, except share
data)
March 31, 2021
December 31, 2020
(unaudited)
Assets
Current assets:
Cash and cash equivalents
$
11,794
$
15,366
Accounts receivable, net
23,697
24,951
Contract assets
8,328
7,046
Inventory
25,550
23,597
Prepaid expenses and other current
assets
5,388
4,509
Total current assets
74,757
75,469
Property and equipment, net
3,329
3,308
Intangible assets, net
19,642
20,109
Goodwill
18,309
18,121
Long-term contract assets
—
471
Operating lease ROU asset
10,820
11,281
Finance lease ROU asset
232
244
Other assets
118
39
Deferred tax asset
1,699
1,960
Total assets
$
128,906
$
131,002
Liabilities and stockholders’
equity
Liabilities:
Current liabilities:
Current portion of long-term debt
obligations
$
4,167
$
4,167
Accounts payable
4,108
4,393
Accrued liabilities
10,732
12,159
Contract liabilities
6,228
7,095
Current portion of operating lease ROU
liability
2,195
2,223
Current portion of finance lease ROU
liability
48
48
Total current liabilities
27,478
30,085
Long-term debt obligations
14,781
15,817
Long-term portion of operating lease ROU
liability
9,702
10,248
Long-term portion of finance lease ROU
liability
184
196
Other long-term liabilities
214
214
Total liabilities
52,359
56,560
Commitments and contingencies
Stockholders’ equity:
Common stock, par value $0.001,
100,000,000 shares authorized, 33,113,774 and 32,724,512 shares
issued, 31,392,989 and 31,024,537 shares outstanding at March 31,
2021 and December 31, 2020, respectively
33
33
Treasury stock at cost, 1,720,785 and
1,699,975 shares at March 31, 2021 and December 31, 2020,
respectively
(4,991
)
(4,789
)
Additional paid-in capital
93,905
92,403
Accumulated deficit
(13,275
)
(12,957
)
Accumulated other comprehensive
income/(loss)
875
(248
)
Total stockholders’ equity
76,547
74,442
Total liabilities and stockholders’
equity
$
128,906
$
131,002
Luna Innovations Incorporated
Consolidated Statements of Operations (Unaudited) (in
thousands, except share and per share data)
Three Months Ended March
31,
2021
2020
Revenues:
Lightwave
$
20,997
$
11,554
Luna Labs
5,302
5,587
Total revenues
26,299
17,141
Cost of revenues:
Lightwave
8,771
4,885
Luna Labs
4,099
3,892
Total cost of revenues
12,870
8,777
Gross profit
13,429
8,364
Operating expense:
Selling, general and administrative
11,290
6,377
Research, development and engineering
2,933
1,597
Total operating expense
14,223
7,974
Operating (loss)/income
(794
)
390
Other income/(expense):
Investment income
—
59
Other income
—
9
Interest expense
(143
)
—
Total other (expense)/income
(143
)
68
(Loss)/income from continuing operations
before income taxes
(937
)
458
Income tax (benefit)/expense
(619
)
138
Net (loss)/income from continuing
operations
(318
)
320
Loss from discontinued operations, net of
income tax of $464
—
(1,436
)
Net loss
(318
)
(1,116
)
Preferred stock dividend
—
—
Net loss attributable to common
stockholders
$
(318
)
$
(1,116
)
Net (loss)/income per share from
continuing operations:
Basic
$
(0.01
)
$
0.01
Diluted
$
(0.01
)
$
0.01
Net loss per share from discontinued
operations:
Basic
$
—
$
(0.05
)
Diluted
$
—
$
(0.04
)
Net loss per share attributable to common
stockholders:
Basic
$
(0.01
)
$
(0.04
)
Diluted
$
(0.01
)
$
(0.03
)
Weighted average shares:
Basic
31,350,629
30,380,345
Diluted
33,353,456
32,549,487
Luna Innovations Incorporated
Consolidated Statements of Cash Flows (Unaudited) (in
thousands)
Three Months Ended March
31,
2021
2020
Cash flows used in operating
activities
Net loss
$
(318
)
$
(1,116
)
Adjustments to reconcile net loss to net
cash used in operating activities
Depreciation and amortization
1,231
679
Share-based compensation
657
226
Bad debt expense
—
14
Loss from discontinued operations, net of
tax
—
1,436
Deferred taxes
262
(127
)
Change in assets and liabilities
Accounts receivable
1,439
737
Contract assets
(729
)
111
Inventory
(1,617
)
(897
)
Other current assets
(847
)
(287
)
Other long term assets
(80
)
—
Accounts payable and accrued expenses
(1,939
)
(760
)
Contract liabilities
(992
)
(318
)
Net cash used in operating activities
(2,933
)
(302
)
Cash flows (used in)/provided by
investing activities
Acquisition of property and equipment
(361
)
(74
)
Intangible property costs
(48
)
(91
)
Proceeds from sale of discontinued
operations
—
600
Net cash (used in)/provided by investing
activities
(409
)
435
Cash flows (used in)/provided by
financing activities
Payments on finance lease obligations
(12
)
(13
)
Payments of debt obligations
(1,036
)
—
Repurchase of common stock
(202
)
—
Proceeds from the exercise of options and
warrants
845
1,198
Net cash (used in)/provided by financing
activities
(405
)
1,185
Effect of exchange rate changes on cash
and cash equivalents
(3,747
)
1,318
Effect of exchange rate changes on cash
and cash equivalents
175
—
Cash and cash equivalents-beginning of
period
15,366
25,006
Cash and cash equivalents-end of
period
$
11,794
$
26,324
Luna Innovations Incorporated
Reconciliation of Net Income to EBITDA and Adjusted EBITDA (in
thousands)
Three Months Ended March
31,
2021
2020
Net loss
$
(318
)
$
(1,116
)
Loss from discontinued operations, net of
income taxes
—
(1,436
)
Net income from continuing operations
(318
)
320
Interest expense
143
—
Investment income
—
(59
)
Income tax (benefit)/expense
(619
)
138
Depreciation and amortization
1,231
679
EBITDA
437
1,078
Share-based compensation
657
502
Integration and transaction expense
886
—
Amortization of inventory step-up
168
—
Adjusted EBITDA
$
2,148
$
1,580
Luna Innovations Incorporated
Reconciliation of Net Income to Adjusted EPS (in thousands)
Three months ended March
31,
2021
2020
Net loss
$
(318
)
(1,116
)
Loss from discontinued operations, net of
income taxes
—
(1,436
)
Net (loss)/income from continuing
operations
(318
)
320
Share-based compensation
657
502
Integration and deal expense
886
—
Amortization of inventory step-up
168
—
Income tax effect on adjustments
(428
)
(126
)
Adjusted income from continuing
operations
$
965
$
696
Adjusted EPS
$
0.03
$
0.02
Adjusted weighted average shares (in
thousands):
Diluted
33,353
32,549
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210517005831/en/
Investor Contact: Allison
Woody Phone: 540-769-8465 Email: IR@lunainc.com
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