Reaffirms 2022 Outlook
Highlights
- Total revenues of $22.5 million for the three months ended
March 31, 2022, up 7% compared to the three months ended March 31,
2021
- Gross margin of 64% for the three months ended March 31,
2022, compared to 58% for the three months ended March 31,
2021
- Operating loss of $2.4 million for the three months ended
March 31, 2022, compared to operating loss of $1.6 million for the
three months ended March 31, 2021
- Net income of $9.6 million for the three months ended March
31, 2022, which includes the gain on sale of Luna Labs, compared to
net loss of $0.3 million for the three months ended March 31,
2021
- Adjusted EBITDA of $1.7 million for the three months ended
March 31, 2022, compared to $1.3 million for the three months ended
March 31, 2021
- Adjusted EPS of $0.05 for the three months ended March 31,
2022, compared to $0.03 for the three months ended March 31,
2021
Luna Innovations Incorporated (NASDAQ: LUNA), a global leader in
advanced optical technology, today announced its financial results
for the three months ended March 31, 2022. The first-quarter 2022
results include two weeks of Lios, Luna's newest acquisition.
"I'm very pleased with our first-quarter performance as the Luna
team delivered a solid start to 2022," said Scott Graeff, President
and Chief Executive Officer of Luna. "We surpassed the top end of
the Q1 revenue guidance we provided in March, while completing
significant events including the divestiture of Luna Labs, the
acquisition of Lios and the complete absorption of OptaSense into
our operations. And, as always, the Luna team is laser-focused on
executing against our strategy. During the past year, you've seen
us make some strategic moves to refresh our product lines and
broaden our IP. We've done this to leverage and incorporate the
best of our organic portfolio with cutting-edge technology and
products from recent acquisitions to create highly competitive
product offerings."
Graeff continued, "As a result of the moves we've made, today
Luna is a company with blue-chip customers, over a dozen of which
are long-term, resulting in many large, multi-unit purchase orders.
For example, we've gone from shipping one or two boxes to being
completely integrated into Lockheed Martin's F-35 global program.
I'm incredibly proud of the team for managing through the numerous
puts and takes over the past six quarters, as we solidify Luna as a
clear leader and a company fully focused on Enabling the Future
with Fiber."
First-Quarter Fiscal 2022 Financial
Summary
Highlights of the financial results for the three months ended
March 31, 2022 are:
Three Months Ended March 31,
Change
(in thousands, except share and per share
data)
2022
2021
Revenues
$
22,481
$
20,997
7
%
Gross profit
14,279
12,271
16
%
Gross margin
64
%
58
%
Operating expense
16,645
13,851
20
%
Operating loss
(2,366
)
(1,580
)
Operating margin
(11
) %
(8
) %
Other expense and income tax benefit
1,023
521
Net loss from continuing operations
$
(1,343
)
$
(1,059
)
Income from discontinued operations, net
of income taxes
10,924
740
Net income/(loss)
$
9,581
$
(319
)
Earnings/(loss) per diluted share
(EPS)
$
0.30
$
(0.01
)
Adjusted EPS
$
0.05
$
0.03
67
%
Diluted weighted average shares
outstanding
32,243,082
31,350,629
Adjusted EBITDA
$
1,721
$
1,331
29
%
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 March 31, 2022 increased 7%
compared to the prior-year period, primarily due to revenue
generated by the Lios acquisition.
Gross margin increased to 64% for the three months ended March
31, 2022, compared to 58% for the three months ended March 31,
2021, driven primarily by favorable product mix. Operating loss and
margin were $2.4 million and 11% of total revenues, respectively,
for the three months ended March 31, 2022, compared to $1.6 million
and 8% of total revenues, respectively, for the three months ended
March 31, 2021. The increase in operating loss was primarily due to
an increase in deal and integration costs related to the
acquisition of Lios.
Net income was $9.6 million, or $0.30 per fully diluted share,
for the three months ended March 31, 2022, compared to net loss of
$0.3 million, or $0.01 per fully diluted share, for the three
months ended March 31, 2021. Adjusted EPS was $0.05 for the three
months ended March 31, 2022 compared to $0.03 for the three months
ended March 31, 2021.
Adjusted EBITDA was $1.7 million for three months ended March
31, 2022, compared to $1.3 million for the three months ended March
31, 2021.
2022 Full-Year Outlook
Luna is confirming the 2022 outlook it originally provided on
March 14, 2022, which included the mid-March divestiture of Luna
Labs and the acquisition of Lios:
- Total revenue of $109 million to $115 million for the full year
2022
- Adjusted EBITDA of $10 million to $12 million for the full year
2022
- Total revenues in the range of $25 million to $27 million for
the second quarter 2022
Luna is not providing an outlook for net income, 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 8:30 am (ET) today to discuss its financial
results for the three months ended March 31, 2022. 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 6847538. 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 2022 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 March 31, 2022, 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
(Unaudited)
(in thousands, except share
data)
March 31, 2022
December 31, 2021
(unaudited)
Assets
Current assets:
Cash and cash equivalents
$
10,788
$
17,128
Accounts receivable, net
26,261
20,913
Contract assets
4,889
5,166
Inventory
28,891
22,493
Prepaid expenses and other current
assets
7,152
3,793
Assets held for sale
—
12,952
Total current assets
77,981
82,445
Property and equipment, net
4,398
2,988
Intangible assets, net
22,332
17,177
Goodwill
29,199
18,984
Operating lease right-of-use assets
5,544
5,075
Other non-current assets
3,872
247
Deferred tax asset
1,339
3,321
Total assets
$
144,665
$
130,237
Liabilities and stockholders’
equity
Liabilities:
Current liabilities:
Current portion of long-term debt
obligations
$
4,167
$
4,167
Accounts payable
2,617
2,809
Accrued and other current liabilities
17,312
9,258
Contract liabilities
4,047
4,649
Current portion of operating lease
liabilities
2,458
2,101
Liabilities associated with assets held
for sale
—
9,703
Total current liabilities
30,601
32,687
Long-term debt obligations, net of current
portion
18,087
11,673
Long-term portion of operating lease
liabilities
3,526
3,509
Other long-term liabilities
434
445
Total liabilities
52,648
48,314
Commitments and contingencies
Stockholders’ equity:
Common stock, par value $0.001,
100,000,000 shares authorized, 34,143,411 and 33,855,725 shares
issued, 32,361,122 and 32,116,270 shares outstanding at March 31,
2022 and December 31, 2021, respectively
34
34
Treasury stock at cost, 1,782,289 and
1,744,026 shares at March 31, 2022 and December 31, 2021,
respectively
(5,526
)
(5,248
)
Additional paid-in capital
99,906
98,745
Accumulated deficit
(1,994
)
(11,575
)
Accumulated other comprehensive loss
(403
)
(33
)
Total stockholders’ equity
92,017
81,923
Total liabilities and stockholders’
equity
$
144,665
$
130,237
Luna Innovations
Incorporated
Consolidated Statements of
Operations (Unaudited)
(in thousands, except share and
per share data)
Three Months Ended March
31,
2022
2021
Revenues
$
22,481
$
20,997
Cost of revenues
8,202
8,726
Gross profit
14,279
12,271
Operating expense:
Selling, general and administrative
14,102
10,934
Research, development and engineering
2,543
2,917
Total operating expense
16,645
13,851
Operating loss
(2,366
)
(1,580
)
Other (expense)/income:
Other income
21
—
Interest expense
(113
)
(143
)
Total other expense
(92
)
(143
)
Loss from continuing operations before
income taxes
(2,458
)
(1,723
)
Income tax benefit
(1,115
)
(664
)
Net loss from continuing operations
(1,343
)
(1,059
)
Income from discontinued operations, net
of income tax of $1,022 and $46
3
740
Gain on sale of discontinued operations,
net of tax of $3,117
10,921
—
Net income from discontinued
operations
10,924
740
Net income/(loss)
$
9,581
$
(319
)
Net loss per share from continuing
operations:
Basic
$
(0.04
)
$
(0.03
)
Diluted
$
(0.04
)
$
(0.03
)
Net income per share from discontinued
operations:
Basic
$
0.34
$
0.02
Diluted
$
0.34
$
0.02
Net income/(loss) per share attributable
to common stockholders:
Basic
$
0.30
$
(0.01
)
Diluted
$
0.30
$
(0.01
)
Weighted average shares:
Basic
32,243,082
31,350,629
Diluted
32,243,082
31,350,629
Luna Innovations
Incorporated
Consolidated Statements of
Cash Flows (Unaudited)
(in thousands)
Three Months Ended March
31,
2022
2021
Cash flows used in operating
activities
Net income/(loss)
$
9,581
$
(319
)
Adjustments to reconcile net loss to net
cash used in operating activities
Depreciation and amortization
1,179
1,231
Share-based compensation
1,132
657
Loss from discontinued operations, net of
tax
(10,921
)
—
Deferred taxes
220
—
Tax benefit from release of valuation
allowance
—
262
Change in assets and liabilities
Accounts receivable
(1,795
)
1,439
Contract assets
(1,144
)
(729
)
Inventory
(1,416
)
(1,617
)
Other current assets
(1,636
)
(847
)
Other long term assets
2
(80
)
Accounts payable and accrued expenses
2,287
(1,939
)
Contract liabilities
171
(992
)
Other long term liabilities
(33
)
—
Net cash used in operating activities
(2,373
)
(2,934
)
Cash flows used in investing
activities
Acquisition of property and equipment
(915
)
(361
)
Intangible property costs
38
(48
)
Proceeds from sale of property and
equipment
25
—
Proceeds from sale of discontinued
operations
12,973
—
Acquisition of Lios
(22,085
)
—
Net cash used in investing activities
(9,964
)
(409
)
Cash flows provided by/(used in)
financing activities
Payments on finance lease obligations
(12
)
(12
)
Payments of debt obligations
(1,036
)
(1,036
)
Repurchase of common stock
(278
)
(202
)
Proceeds from ESPP
85
—
Proceeds from the exercise of options and
warrants
220
845
Proceeds from borrowings under term
loan
7,450
—
Net cash provided by/(used in) financing
activities
6,429
(405
)
Effect of exchange rate changes on cash
and cash equivalents
(432
)
176
Net decrease in cash and cash
equivalents
(6,340
)
(3,572
)
Cash and cash equivalents-beginning of
period
17,128
15,366
Cash and cash equivalents-end of
period
$
10,788
$
11,794
Luna Innovations
Incorporated
Reconciliation of Net
Income/(Loss) to EBITDA and Adjusted EBITDA
(in thousands)
Three Months Ended March
31,
2022
2021
Net income/(loss)
$
9,581
$
(319
)
Net income from discontinued
operations
10,924
740
Net loss from continuing operations
(1,343
)
(1,059
)
Interest expense
113
143
Income tax benefit
(1,115
)
(664
)
Depreciation and amortization
1,156
1,200
EBITDA
(1,189
)
(380
)
Share-based compensation
1,066
657
Integration and transaction expense
1,844
886
Amortization of inventory step-up
—
168
Adjusted EBITDA
$
1,721
$
1,331
Luna Innovations
Incorporated
Reconciliation of Net
Income/(Loss) to Adjusted EPS
(in thousands, except per share
data)
Three Months Ended March
31,
2022
2021
Net income/(loss)
$
9,581
$
(319
)
Net income from discontinued
operations
10,924
740
Net income from continuing operations
(1,343
)
(1,059
)
Share-based compensation
1,066
657
Integration and transaction expense
1,844
886
Amortization of intangible assets
821
826
Amortization of inventory step-up
—
168
Income tax effect on adjustments
(933
)
(634
)
Adjusted income from continuing
operations
$
1,455
$
844
Adjusted EPS
$
0.05
$
0.03
Adjusted weighted average shares (in
thousands):
Diluted
32,243
31,351
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220516005318/en/
Investor Contact: Allison
Woody Phone: 540-769-8465 Email: IR@lunainc.com
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