Luna Labs moved to Discontinued Operations
Highlights
The following highlights reflect the reclassification of Luna
Labs to discontinued operations:
- Total revenues of $20.3 million for the three months ended
September 30, 2021, up 32% compared to the three months ended
September 30, 2020
- Gross margin of 62% for the three months ended September 30,
2021, compared to 63% for the three months ended September 30,
2020
- Operating loss of $10 thousand for the three months ended
September 30, 2021, compared to operating income of $1.2 million
for the three months ended September 30, 2020
- Net income of $0.4 million for the three months ended
September 30, 2021, compared to net income of $3.1 million for the
three months ended September 30, 2020
- Adjusted EBITDA of $2.1 million for the three months ended
September 30, 2021, compared to $3.1 million for the three months
ended September 30, 2020
- Adjusted EPS of $0.03 for the three months ended September
30, 2021, compared to $0.11 for the three months ended September
30, 2020
Luna Innovations Incorporated (NASDAQ: LUNA), a global leader in
advanced optical technology, today announced its financial results
for the three and nine months ended September 30, 2021.
"Q3 was a record quarter for customer demand of our products, as
we realized the highest level of bookings we've ever had," said
Scott Graeff, President and Chief Executive Officer of Luna. "The
largest backlog in our history is the result of record bookings,
the increased impact of COVID and industry-wide supply chain
challenges which have slowed our ability to deliver products. As a
result, revenue for the year will be lighter than what we could
have delivered. We believe that this is a temporary situation and
remain committed to Luna's strategy. We continue to see vast
opportunities for Luna in fiber optic technologies and are pleased
to take the pivotal step in focusing on fiber with our transition
of Luna Labs to discontinued operations. We have evaluated a number
of opportunities and look forward to sharing Luna's meaningful
achievements over the coming months."
Third-Quarter Fiscal 2021 Financial
Summary
Highlights of the financial results for the three months ended
September 30, 2021 are:
Three Months Ended September
30,
Change
(in thousands, except share and per share
data)
2021
2020
Revenues
$
20,329
$
15,350
32
%
Gross profit
12,584
9,632
31
%
Gross margin
62
%
63
%
Operating expense
12,594
8,420
50
%
Operating (loss)/income
(10)
1,212
Operating margin
—
%
8
%
Other (expense)/income and income tax
benefit/(expense)
(334)
1,096
Net (loss)/income from continuing
operations
$
(344)
$
2,308
Income from discontinued operations, net
of income tax of $235 and $247
699
794
Net income
$
355
$
3,102
(89)
%
Earnings per diluted share (EPS)
$
0.01
$
0.10
(90)
%
Adjusted EPS
$
0.03
$
0.11
(73)
%
Diluted weighted average shares
outstanding
33,780,714
32,411,086
Adjusted EBITDA
$
2,110
$
3,144
(33)
%
A reconciliation of Adjusted EPS and Adjusted EBITDA to the
nearest comparable figures under generally accepted accounting
principles ("GAAP") can be found in the schedules included in this
release.
Revenues for the three months ended September 30, 2021 increased
compared to the prior-year period, primarily due to revenue
generated by the businesses we have recently acquired over the last
year.
Gross margin decreased to 62% for the three months ended
September 30, 2021, compared to 63% for the three months ended
September 30, 2020, driven primarily by product mix. Operating loss
and margin declined to $10 thousand and less than 1% of total
revenues, respectively, for the three months ended September 30,
2021, compared to $1.2 million and 8% of total revenues,
respectively, for the three months ended September 30, 2020. The
decrease in operating income was primarily due to an increase in
operating expenses and amortization related to our recent
acquisitions.
Net income was $0.4 million, or $0.01 per fully diluted share,
for the three months ended September 30, 2021, compared to net
income of $3.1 million, or $0.10 per fully diluted share, for the
three months ended September 30, 2020. Adjusted EPS was $0.03 for
the three months ended September 30, 2021 compared to $0.11 for the
three months ended September 30, 2020.
Adjusted EBITDA was $2.1 million for three months ended
September 30, 2021, compared to $3.1 million for the three months
ended September 30, 2020. The decrease was driven by lower income
from continuing operations.
Nine Months Ended Fiscal 2021 Financial
Summary
Highlights of the financial results for the nine months ended
September 30, 2021 are:
Nine months ended September
30,
Change
(in thousands, except share and per share
data)
2021
2020
Revenues
$
63,291
$
39,837
59
%
Gross profit
37,436
24,126
55
%
Gross margin
59
%
61
%
Operating expense
41,061
23,252
77
%
Operating (loss)/income
(3,625)
874
Operating margin
(6)
%
2
%
Other (expense)/income and income tax
benefit/(expense)
1,061
1,012
5
%
Net (loss)/income from continuing
operations
$
(2,564)
$
1,886
Income from discontinued operations, net
of income tax of $381 and $209
2,371
1,469
Net (loss)/income
$
(193)
$
3,355
Earnings per diluted share (EPS)
$
(0.01)
$
0.10
Adjusted EPS
$
0.08
$
0.14
(43)
%
Diluted weighted average shares
outstanding
33,585,973
32,478,625
Adjusted EBITDA
$
4,461
$
4,990
(11)
%
A reconciliation of Adjusted EPS and Adjusted EBITDA to the
nearest comparable GAAP figures can be found in the schedules
included in this release.
Revenues for the nine months ended September 30, 2021 increased
compared to the prior-year period, primarily due to our recent
acquisitions.
Gross margin of 59% for the nine months ended September 30, 2021
was down compared to 61% for the nine months ended September 30,
2020 due to product mix. Operating loss and margin declined to $3.6
million and (6)% of total revenues, respectively, for the nine
months ended September 30, 2021, compared to $0.9 million and 2% of
total revenues, respectively, for the nine months ended September
30, 2020. The decrease in operating income was primarily due to
$2.1 million of integration and transaction costs, as well as $1.6
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 nine months ended September 30, 2021, compared to a net
income of $3.4 million, or $0.10 per fully diluted share, for the
nine months ended September 30, 2020. Adjusted EPS was $0.08 for
the nine months ended September 30, 2021, compared to $0.14 for the
nine months ended September 30, 2020.
Adjusted EBITDA was $4.5 million for the nine months ended
September 30, 2021, compared to $5.0 million for the nine months
ended September 30, 2020.
2021 Full-Year Outlook
Luna is revising guidance to reflect the reclassification of
Luna Labs to discontinued operations and COVID-19 pandemic related
issues:
- Total revenue of $85 million to $88 million
- Adjusted EBITDA of $6 million to $8 million
Adjusted EBITDA is a non-GAAP measure. Luna is not providing an
outlook for net income/(loss), which is the most directly
comparable 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 and Adjusted EPS, which
exclude certain charges and income 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 nine months ended September 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 6088397. 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 a multitude of industries. 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, the Company's growth potential, the resolution of
backlog and supply chain challenges and the potential sale of Luna
Labs. 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 September 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)
September 30, 2021
December 31, 2020
(unaudited)
Assets
Current assets:
Cash and cash equivalents
$
14,755
$
15,366
Accounts receivable, net
19,557
21,928
Contract assets
2,883
4,139
Inventory
25,350
23,062
Prepaid expenses and other current
assets
6,213
4,433
Assets held for sale
13,855
6,541
Total current assets
82,613
75,469
Property and equipment, net
2,820
2,917
Intangible assets, net
17,819
19,994
Goodwill
18,979
18,121
Operating lease right-of-use asset
5,497
5,984
Other non-current assets
246
369
Deferred tax asset
1,707
1,689
Non-current assets held for sale
—
6,459
Total assets
$
129,681
$
131,002
Liabilities and stockholders’
equity
Liabilities:
Current liabilities:
Current portion of long-term debt
obligations
$
4,167
$
4,167
Accounts payable
2,585
2,852
Accrued and other current liabilities
10,826
10,773
Contract liabilities
4,967
6,698
Current portion of operating lease
liability
2,020
1,876
Liabilities associated with assets held
for sale
9,091
3,719
Total current liabilities
33,656
30,085
Long-term debt obligations
12,709
15,817
Long-term portion of operating lease
liability
4,073
5,034
Other long-term liabilities
374
410
Non-current liabilities associated with
assets held for sale
—
5,214
Total liabilities
50,812
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, 31,961,907 and 31,024,537 shares outstanding at September
30, 2021 and December 31, 2020, respectively
34
33
Treasury stock at cost, 1,739,455 and
1,699,975 shares at September 30, 2021 and December 31, 2020,
respectively
(5,209)
(4,789)
Additional paid-in capital
97,238
92,403
Accumulated deficit
(13,150)
(12,957)
Accumulated other comprehensive loss
(44)
(248)
Total stockholders’ equity
78,869
74,442
Total liabilities and stockholders’
equity
$
129,681
$
131,002
Luna Innovations
Incorporated
Consolidated Statements of
Operations (Unaudited)
(in thousands, except share and
per share data)
Three Months Ended September
30,
Nine Months Ended September
30,
2021
2020
2021
2020
Revenues
$
20,329
$
15,350
$
63,291
$
39,837
Cost of revenues
7,745
5,718
25,855
15,711
Gross profit
12,584
9,632
37,436
24,126
Operating expense:
Selling, general and administrative
9,674
6,229
33,414
17,959
Research, development and engineering
2,920
1,615
7,647
4,717
Loss on sale of property and equipment
—
576
—
576
Total operating expense
12,594
8,420
41,061
23,252
Operating (loss)/income
(10)
1,212
(3,625)
874
Other (expense)/income:
Investment income
—
1
—
65
Other income
—
13
—
19
Interest expense
(110)
(1)
(375)
(2)
Total other (expense)/income
(110)
13
(375)
82
(Loss)/income from continuing operations
before income taxes
(120)
1,225
(4,000)
956
Income tax expense/(benefit)
224
(1,083)
(1,436)
(930)
Net (loss)/income from continuing
operations
(344)
2,308
(2,564)
1,886
Income from discontinued operations, net
of income tax of $235, $246, $381, and $673
699
794
2,371
1,469
Net income/(loss)
$
355
$
3,102
$
(193)
$
3,355
Net (loss)/income per share from
continuing operations:
Basic
$
(0.01)
$
0.07
$
(0.08)
$
0.06
Diluted
$
(0.01)
$
0.07
$
(0.08)
$
0.06
Net income per share from discontinued
operations:
Basic
$
0.02
$
0.03
$
0.08
$
0.05
Diluted
$
0.02
$
0.02
$
0.07
$
0.05
Net income/(loss) per share attributable
to common stockholders:
Basic
$
0.01
$
0.10
$
(0.01)
$
0.11
Diluted
$
0.01
$
0.10
$
(0.01)
$
0.10
Weighted average shares:
Basic
31,944,869
30,809,896
31,553,998
30,593,954
Diluted
33,780,714
32,411,086
33,585,973
32,478,625
Luna Innovations
Incorporated
Consolidated Statements of
Cash Flows (Unaudited)
(in thousands)
Nine Months Ended September
30,
2021
2020
Cash flows provided by operating
activities
Net (loss)/income
$
(193)
$
3,355
Adjustments to reconcile net loss to net
cash (used in)/provided by operating activities
Depreciation and amortization
3,523
2,126
Share-based compensation
2,230
1,538
Bad debt expense
262
147
Loss on sale of property and equipment
—
576
Loss from discontinued operations, net of
tax
—
1,436
Deferred taxes
(23)
(313)
Change in assets and liabilities
Accounts receivable
220
(2,131)
Contract assets
837
(1,589)
Inventory
(1,906)
(1,419)
Other current assets
(1,752)
(1,982)
Accounts payable and accrued expenses
(1,681)
(1,481)
Contract liabilities
(287)
(166)
Net cash provided by operating
activities
1,230
97
Cash flows (used in)/provided by
investing activities
Acquisition of property and equipment
(943)
(422)
Intangible property costs
(215)
(291)
Proceeds from sale of property and
equipment
—
403
Proceeds from sale of discontinued
operations
—
600
Net cash (used in)/provided by investing
activities
(1,158)
290
Cash flows (used in)/provided by
financing activities
Payments on finance lease obligations
(36)
(39)
Payments of debt obligations
(3,110)
—
Repurchase of common stock
(420)
(329)
Proceeds from ESPP
530
—
Proceeds from the exercise of options and
warrants
2,076
1,397
Net cash (used in)/provided by financing
activities
(960)
1,029
Effect of exchange rate changes on cash
and cash equivalents
277
—
Net (decrease)/increase in cash and
cash equivalents
(611)
1,416
Cash and cash equivalents-beginning of
period
15,366
25,006
Cash and cash equivalents-end of
period
$
14,755
$
26,422
Luna Innovations
Incorporated
Reconciliation of Net
Income/(Loss) to EBITDA and Adjusted EBITDA
(in thousands)
Three Months Ended September
30,
Nine Months Ended September
30,
2021
2020
2021
2020
Net income/(loss)
$
355
$
3,102
$
(193)
$
3,355
Income from discontinued operations, net
of tax
699
794
2,371
1,469
Net (loss)/income from continuing
operations
(344)
2,308
(2,564)
1,886
Interest expense
110
1
375
2
Investment income
—
(1)
—
(65)
Income tax expense/(benefit)
224
(1,083)
(1,436)
(930)
Depreciation and amortization
1,131
709
3,440
1,979
EBITDA
1,121
1,934
(185)
2,872
Share-based compensation
689
542
2,133
1,450
Integration and transaction expense
196
—
2,073
—
Loss on sale of property and moving
related expenses
—
668
—
668
Amortization of inventory step-up
104
—
440
—
Adjusted EBITDA
$
2,110
$
3,144
$
4,461
$
4,990
Luna Innovations
Incorporated
Reconciliation of Net
Income/(Loss) to Adjusted EPS
(in thousands, except per share
data)
Three Months Ended September
30,
Nine Months Ended September
30,
2021
2020
2021
2020
Net income/(loss)
$
355
$
3,102
$
(193)
$
3,355
Income from discontinued operations, net
of tax
699
794
2,371
1,469
Net (loss)/income from continuing
operations
(344)
2,308
(2,564)
1,886
Share-based compensation
689
542
2,133
1,450
Integration and deal expense
196
—
2,073
—
Amortization of intangible assets
761
424
2,353
1,236
Amortization of inventory step-up
104
—
440
—
Loss on sale of property and moving
related expenses
—
668
—
668
Income tax effect on adjustments
(438)
(409)
(1,750)
(839)
Adjusted income from continuing
operations
$
968
$
3,533
$
2,685
$
4,401
Adjusted EPS
$
0.03
$
0.11
$
0.08
$
0.14
Adjusted weighted average shares (in
thousands):
Diluted
33,781
32,411
33,586
32,479
View source
version on businesswire.com: https://www.businesswire.com/news/home/20211115006241/en/
Investor: Allison Woody
Phone: 540-769-8465 Email: IR@lunainc.com
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