Delivers Record Revenue and Reaffirms 2021
Outlook
Highlights
- Total revenues of $27.9 million for the three months ended
June 30, 2021, up 50% compared to the three months ended June 30,
2020
- Operating loss of $1.0 million for the three months ended
June 30, 2021, versus operating income of $1.8 million for the
three months ended June 30, 2020; primarily due to $1.5 million of
transaction-related costs
- Net loss of $0.2 million for the three months ended June 30,
2021, compared to net income of $1.4 million for the three months
ended June 30, 2020
- Adjusted EBITDA of $2.1 million for the three months ended
June 30, 2021, compared to $3.0 million for the three months ended
June 30, 2020
- Adjusted EPS of $0.06 for each of the three months ended
June 30, 2021 and 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 and six months ended June 30, 2021.
"I couldn't be more thrilled about delivering record revenue,
despite challenges such as a very difficult supply chain
environment, all while integrating the largest acquisition in the
company's history," said Scott Graeff, President and Chief
Executive Officer of Luna. "As I mentioned on our last earnings
call, 2021 marks another inflection point of growth. We continue to
invest in our business as we build for Luna's future, including
adding several experienced executives to my team this quarter.
These professionals each have track records in growing larger
public companies. We remain excited about Luna's strategy and
future, which is why we are reaffirming the guidance that we first
provided in March.”
Second-Quarter Fiscal 2021 Financial
Summary
Highlights of the financial results for the three months ended
June 30, 2021 are:
Three Months Ended June 30,
(in thousands, except share and per share
data)
2021
2020
Change
Revenues:
Lightwave
$
21,965
$
12,933
70
%
Luna Labs
5,972
5,643
6
%
Total revenues
27,937
18,576
50
%
Gross profit
13,950
9,517
47
%
Gross margin
50
%
51
%
Operating expense
14,952
7,707
94
%
Operating (loss)/income
(1,002
)
1,810
(155
)%
Operating margin
(4
)%
10
%
Other (expense)/income and income tax
benefit/(expense)
772
(441
)
275
%
Net (loss)/income
$
(230
)
$
1,369
117
%
Earnings per diluted share (EPS)
$
(0.01
)
$
0.04
(125
)%
Adjusted EPS
$
0.06
$
0.06
—
%
Diluted weighted average shares
outstanding
33,500,801
32,494,950
Adjusted EBITDA
$
2,143
$
2,955
(27
)%
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 June 30, 2021
increased compared to the prior-year period, primarily due to
acquisitions and strength in the telecommunications, aerospace and
defense markets. Luna Labs revenue increased for the three months
ended June 30, 2021, compared to the prior-year period, due to
growth in various government research projects.
Gross margin decreased to 50% for the three months ended June
30, 2021, compared to 51% for the three months ended June 30, 2020,
driven primarily by lower gross margin in Luna's Lightwave
division. Operating income/(loss) and margin declined to $(1.0)
million and (4)% of total revenues, respectively, for the three
months ended June 30, 2021, compared to $1.8 million and 10% of
total revenues, respectively, for the three months ended June 30,
2020. The decrease in operating income was primarily due to $1.0
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 $0.2 million, or $0.01 per fully diluted share, for
the three months ended June 30, 2021, compared to net income of
$1.4 million, or $0.04 per fully diluted share, for the three
months ended June 30, 2020. Adjusted EPS was $0.06 for each of the
three months ended June 30, 2021 and 2020.
Adjusted EBITDA was $2.1 million for the three months ended June
30, 2021, compared to $3.0 million for the three months ended June
30, 2020. The decrease was driven by lower income from continuing
operations.
Six Months Ended Fiscal 2021 Financial
Summary
Highlights of the financial results for the six months ended
June 30, 2021 are:
Six months ended June 30,
(in thousands, except share and per share
data)
2021
2020
Change
Revenues:
Lightwave
$
42,962
$
24,487
75
%
Luna Labs
11,274
11,230
—
%
Total revenues
54,236
35,717
52
%
Gross profit
27,379
17,881
53
%
Gross margin
50
%
50
%
Operating expense
29,175
15,681
86
%
Operating (loss)/income
(1,796
)
2,200
(182
)%
Operating margin
(3
)%
6
%
Other (expense)/income and income tax
benefit/(expense)
1,248
(511
)
344
%
Net (loss)/income from continuing
operations
$
(548
)
$
1,689
(132
)%
Loss from discontinued operations, net of
income tax of $464
—
(1,436
)
Net (loss)/income
$
(548
)
$
253
317
%
Earnings per diluted share (EPS)
$
(0.02
)
$
0.01
(300
)%
Adjusted EPS
$
0.10
$
0.09
11
%
Diluted weighted average shares
outstanding
33,487,109
32,466,122
Adjusted EBITDA
$
4,291
$
4,535
(5
)%
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 six months ended June 30, 2021
increased compared to the prior-year period, primarily due to
acquisitions and increased revenues from both sensing and
communication test businesses. Luna Labs revenue increased for the
six months ended June 30, 2021, compared to the prior-year period,
due to growth in various government research projects.
Gross margin of 50% for the six months ended June 30, 2021 was
flat compared to 50% for the six months ended June 30, 2020.
Operating income/(loss) and margin declined to $(1.8) million and
(3)% of total revenues, respectively, for the six months ended June
30, 2021, compared to $2.2 million and 6% of total revenues,
respectively, for the six months ended June 30, 2020. The decrease
in operating income was primarily due to $1.9 million integration
and transaction costs, as well as $1.0 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 $0.5 million, or $0.02 per fully diluted share, for
the six months ended June 30, 2021, compared to a net income of
$0.3 million, or $0.01 per fully diluted share, for the six months
ended June 30, 2020. Adjusted EPS was $0.10 for the six months
ended June 30, 2021, compared to $0.09 for the six months ended
June 30, 2020.
Adjusted EBITDA was $4.3 million for the six months ended June
30, 2021, compared to $4.5 million for the six months ended June
30, 2020.
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/(loss), 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 and six months ended June 30, 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 2326659. 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 quarter ended June 30, 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)
June 30, 2021
December 31, 2020
(unaudited)
Assets
Current assets:
Cash and cash equivalents
$
11,970
$
15,366
Accounts receivable, net
24,605
24,951
Contract assets
6,857
7,046
Inventory
25,579
23,597
Prepaid expenses and other current
assets
6,886
4,509
Total current assets
75,897
75,469
Property and equipment, net
3,183
3,308
Intangible assets, net
18,887
20,109
Goodwill
19,155
18,121
Long-term contract assets
—
471
Operating lease ROU asset
10,461
11,281
Finance lease ROU asset
220
244
Other assets
38
39
Deferred tax asset
1,486
1,960
Total assets
$
129,327
$
131,002
Liabilities and stockholders’
equity
Liabilities:
Current liabilities:
Current portion of long-term debt
obligations
$
4,167
$
4,167
Accounts payable
3,962
4,393
Accrued liabilities
11,171
12,159
Contract liabilities
6,425
7,095
Current portion of operating lease ROU
liability
2,314
2,223
Current portion of finance lease ROU
liability
48
48
Total current liabilities
28,087
30,085
Long-term debt obligations
13,745
15,817
Long-term portion of operating lease ROU
liability
9,226
10,248
Long-term portion of finance lease ROU
liability
172
196
Other long-term liabilities
214
214
Total liabilities
51,444
56,560
Commitments and contingencies
Stockholders’ equity:
Common stock, par value $0.001,
100,000,000 shares authorized, 33,511,899 and 32,724,512 shares
issued, 31,772,444 and 31,024,537 shares outstanding at June 30,
2021 and December 31, 2020, respectively
33
33
Treasury stock at cost, 1,739,455 and
1,699,975 shares at June 30, 2021 and December 31, 2020,
respectively
(5,209
)
(4,789
)
Additional paid-in capital
95,936
92,403
Accumulated deficit
(13,505
)
(12,957
)
Accumulated other comprehensive
income/(loss)
628
(248
)
Total stockholders’ equity
77,883
74,442
Total liabilities and stockholders’
equity
$
129,327
$
131,002
Luna Innovations Incorporated
Consolidated Statements of Operations (Unaudited) (in
thousands, except share and per share data)
Three Months Ended June
30,
Six Months Ended June
30,
2021
2020
2021
2020
Revenues:
Lightwave
$
21,965
$
12,933
$
42,962
$
24,487
Luna Labs
5,972
5,643
11,274
11,230
Total revenues
27,937
18,576
54,236
35,717
Cost of revenues:
Lightwave
9,441
5,181
18,212
10,066
Luna Labs
4,546
3,878
8,645
7,770
Total cost of revenues
13,987
9,059
26,857
17,836
Gross profit
13,950
9,517
27,379
17,881
Operating expense:
Selling, general and administrative
13,142
6,202
24,432
12,579
Research, development and engineering
1,810
1,505
4,743
3,102
Total operating expense
14,952
7,707
29,175
15,681
Operating (loss)/income
(1,002
)
1,810
(1,796
)
2,200
Other (expense)/income:
Investment income
—
4
—
64
Other income/(expense)
—
(4
)
—
5
Interest expense
(122
)
(1
)
(265
)
(1
)
Total other (expense)/income
(122
)
(1
)
(265
)
68
(Loss)/income from continuing operations
before income taxes
(1,124
)
1,809
(2,061
)
2,268
Income tax (benefit)/expense
(894
)
440
(1,513
)
579
Net (loss)/income from continuing
operations
(230
)
1,369
(548
)
1,689
Loss from discontinued operations, net of
income tax of $—
—
—
—
(1,436
)
Net (loss)/income
(230
)
1,369
(548
)
253
Preferred stock dividend
—
—
—
—
Net loss attributable to common
stockholders
$
(230
)
$
1,369
$
(548
)
$
253
Net (loss)/income per share from
continuing operations:
Basic
$
(0.01
)
$
0.04
$
(0.02
)
$
0.06
Diluted
$
(0.01
)
$
0.04
$
(0.02
)
$
0.05
Net loss per share from discontinued
operations:
Basic
$
—
$
—
$
—
$
(0.05
)
Diluted
$
—
$
—
$
—
$
(0.04
)
Net (loss)/income per share attributable
to common stockholders:
Basic
$
(0.01
)
$
0.04
$
(0.02
)
$
0.01
Diluted
$
(0.01
)
$
0.04
$
(0.02
)
$
0.01
Weighted average shares:
Basic
31,494,563
30,484,797
31,413,451
30,589,249
Diluted
33,500,801
32,494,950
33,487,109
32,466,122
Luna Innovations Incorporated
Consolidated Statements of Cash Flows (Unaudited) (in
thousands)
Six Months Ended June
30,
2021
2020
Cash flows (used in)/provided by
operating activities
Net (loss)/income
$
(548
)
$
253
Adjustments to reconcile net loss to net
cash (used in)/provided by operating activities
Depreciation and amortization
2,360
1,363
Share-based compensation
1,514
967
Bad debt expense
—
(26
)
Loss from discontinued operations, net of
tax
—
1,436
Deferred taxes
475
(10
)
Change in assets and liabilities
Accounts receivable
(473
)
(139
)
Contract assets
763
(508
)
Inventory
(1,562
)
(937
)
Other current assets
(2,399
)
(404
)
Accounts payable and accrued expenses
(2,185
)
(1,286
)
Contract liabilities
(826
)
(520
)
Net cash (used in)/provided by operating
activities
(2,881
)
193
Cash flows (used in)/provided by
investing activities
Acquisition of property and equipment
(551
)
(111
)
Intangible property costs
(141
)
(192
)
Proceeds from sale of discontinued
operations
—
600
Net cash (used in)/provided by investing
activities
(692
)
298
Cash flows (used in)/provided by
financing activities
Payments on finance lease obligations
(24
)
(26
)
Payments of debt obligations
(2,072
)
—
Repurchase of common stock
(420
)
(328
)
Proceeds from term loan
530
—
Proceeds from the exercise of options and
warrants
1,490
1,363
Net cash (used in)/provided by financing
activities
(496
)
1,009
Effect of exchange rate changes on cash
and cash equivalents
(4,069
)
1,500
Effect of exchange rate changes on cash
and cash equivalents
673
—
Cash and cash equivalents-beginning of
period
15,366
25,006
Cash and cash equivalents-end of
period
$
11,970
$
26,506
Luna Innovations Incorporated
Reconciliation of Net (Loss)/Income to EBITDA and Adjusted
EBITDA (in thousands)
Three Months Ended June
30,
Six Months Ended June
30,
2021
2020
2021
2020
Net (loss)/income
$
(230
)
$
1,369
$
(548
)
$
253
Loss from discontinued operations, net of
tax
—
—
—
(1,436
)
Net (loss)/income from continuing
operations
(230
)
1,369
(548
)
1,689
Interest expense
122
1
265
1
Investment income
—
(4
)
—
(64
)
Income tax (benefit)/expense
(894
)
440
(1,513
)
579
Depreciation and amortization
1,129
684
2,360
1,363
EBITDA
127
2,490
564
3,568
Share-based compensation
857
465
1,514
967
Integration and transaction expense
991
—
1,877
—
Amortization of inventory step-up
168
—
336
—
Adjusted EBITDA
$
2,143
$
2,955
$
4,291
$
4,535
Luna Innovations Incorporated
Reconciliation of Net (Loss)/Income to Adjusted EPS (in
thousands, except per share data)
Three Months Ended June
30,
Six Months Ended June
30,
2021
2020
2021
2020
Net (loss)/income
$
(230
)
1,369
$
(548
)
253
Loss from discontinued operations, net of
tax
—
—
—
(1,436
)
Net (loss)/income from continuing
operations
(230
)
1,369
(548
)
1,689
Share-based compensation
857
465
1,514
967
Integration and deal expense
991
—
1,877
—
Amortization of intangible assets
773
410
1,616
843
Amortization of inventory step-up
168
—
336
—
Income tax effect on adjustments
(697
)
(219
)
(1,336
)
(453
)
Adjusted income from continuing
operations
$
1,862
$
2,025
$
3,459
$
3,046
Adjusted EPS
$
0.06
$
0.06
$
0.10
$
0.09
Adjusted weighted average shares (in
thousands):
Diluted
33,501
32,495
33,487
32,466
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210809005718/en/
Investor Contact: Allison
Woody Phone: 540-769-8465 Email: IR@lunainc.com
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