Reaffirms 2022 Outlook
Highlights
- Total revenues of $26.2 million for the three months ended June
30, 2022, up 19% compared to the three months ended June 30,
2021
- Gross margin of 61% for the three months ended June 30, 2022,
compared to 57% for the three months ended June 30, 2021
- Net loss of $2.4 million for the three months ended June 30,
2022, compared to net loss of $0.2 million for the three months
ended June 30, 2021; primarily due to $1.8 million benefit from tax
and discontinued operations in the second quarter 2021
- Adjusted EBITDA of $1.2 million for the three months ended June
30, 2022, compared to $1.0 million for the three months ended June
30, 2021
- Adjusted EPS of $(0.02) for the three months ended June 30,
2022, compared to $0.03 for the three months ended June 30, 2021;
impacted by discontinued operations and associated taxes
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, 2022.
"As I reflect on the first half of 2022, I'm pleased with the
team's top-line performance and ability to navigate ongoing
macroeconomic and market factors," said Scott Graeff, President and
Chief Executive Officer of Luna. "We achieved double-digit revenue
growth for the second-quarter in nearly all of our product lines,
and I'm proud of the Luna team for their accomplishments. The
team's focus and execution will carry us through the remainder of
2022 and will allow us to achieve growth in each business. This,
combined with strong bookings, gives me the confidence to reaffirm
our 2022 outlook."
Graeff continued, "We've recently completed several acquisitions
and one large divestiture. As with all transactions, we are
reviewing expense infrastructure to ensure operational efficiency.
The strategic actions that we've recently undertaken to enhance
operations, expand our IP portfolio and refresh product lines are
gaining momentum. As a result, today Luna is a clear leader and a
company fully focused on Enabling the Future with Fiber."
Second-Quarter
Fiscal 2022 Financial Summary
Highlights of the financial results for
the three months ended June 30, 2022 are:
Three Months Ended June 30,
Change
(in thousands, except share and per share
data)
2022
2021
Revenues
$
26,162
$
21,965
19
%
Gross profit
15,963
12,581
27
%
Gross margin
61
%
57
%
Operating expense
18,425
14,615
26
%
Operating loss
(2,462
)
(2,034
)
Operating margin
(9
) %
(9
) %
Other expense, net and income tax
(expense)/benefit
(480
)
873
Net loss from continuing operations
$
(2,942
)
$
(1,161
)
Income from discontinued operations, net
of income taxes
591
931
Net loss
$
(2,351
)
$
(230
)
Loss per diluted share (EPS)
$
(0.07
)
$
(0.01
)
Adjusted EPS
$
(0.02
)
$
0.03
Diluted weighted average shares
outstanding
32,478,736
31,494,563
Adjusted EBITDA
$
1,184
$
1,021
16
%
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 June 30, 2022 increased 19%
compared to the prior-year period, primarily due to revenue
generated by the Lios acquisition.
Gross margin increased to 61% for the three months ended June
30, 2022, compared to 57% for the three months ended June 30, 2021,
driven primarily by favorable product mix. Operating loss and
margin were $2.5 million and 9% of total revenues, respectively,
for the three months ended June 30, 2022, compared to $2.0 million
and 9% of total revenues, respectively, for the three months ended
June 30, 2021. The increase in operating loss was primarily due to
our recent acquisitions, partially offset by lower deal and
integration costs.
Net loss was $2.4 million, or $0.07 per fully diluted share, for
the three months ended June 30, 2022, compared to net loss of $0.2
million, or $0.01 per fully diluted share, for the three months
ended June 30, 2021. Adjusted EPS was $(0.02) for the three months
ended June 30, 2022 compared to $0.03 for the three months ended
June 30, 2021. The second-quarter 2022 results were impacted by
discontinued operations and associated taxes.
Adjusted EBITDA was $1.2 million for three months ended June 30,
2022, compared to $1.0 million for the three months ended June 30,
2021.
Six Months Ended
Fiscal 2022 Financial Summary
Highlights of the financial results for
the six months ended June 30, 2022 are:
Six Months Ended June 30,
Change
(in thousands, except share and per share
data)
2022
2021
Revenues
48,642
42,962
13
%
Gross profit
30,242
24,852
22
%
Gross margin
62
%
58
%
Operating expense
35,069
28,466
23
%
Operating loss
(4,827
)
(3,614
)
Operating margin
(10
) %
(8
) %
Other expense, net and income tax
benefit
543
1,394
Net loss from continuing operations
$
(4,284
)
$
(2,220
)
Income from discontinued operations, net
of income taxes
11,515
1,672
Net income/(loss)
$
7,231
$
(548
)
Earnings/(loss) per diluted share
(EPS)
$
0.22
$
(0.02
)
Adjusted EPS
$
0.02
$
0.05
(60
)
%
Diluted weighted average shares
outstanding
32,361,560
31,413,451
Adjusted EBITDA
$
2,906
$
2,352
24
%
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 six months ended June 30, 2022 increased
compared to the prior-year period, primarily due to revenue
generated by the Lios acquisition.
Gross margin of $30.2 million for the six months ended June 30,
2022 increased from $24.9 million for the six months ended June 30,
2021 primarily due to higher sales. Operating loss and margin
declined to $4.8 million and 10% of total revenues, respectively,
for the six months ended June 30, 2022, compared to $3.6 million
and 8% of total revenues, respectively, for the six months ended
June 30, 2021. The increase in operating loss was primarily due to
our recent acquisitions.
Net income was $7.2 million, or $0.22 per fully diluted share,
for the six months ended June 30, 2022, compared to a net loss of
$0.5 million, or $(0.02) per fully diluted share, for the six
months ended June 30, 2021. Adjusted EPS was $0.02 for the six
months ended June 30, 2022, compared to $0.05 for the six months
ended June 30, 2021.
Adjusted EBITDA was $2.9 million for the six months ended June
30, 2022, compared to $2.4 million for the six months ended June
30, 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, and also is providing a
third-quarter 2022 outlook:
- 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 $28 million to $30 million for
the third 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, August 11, 2022, to discuss its
financial results for the three and six months ended June 30, 2022.
The investor conference call will be accessible by telephone and
through the internet. Participants may register using this link to
obtain dial-in details. Registration details are also available by
visiting www.lunainc.com under the tab "Investor Relations." To
participate in the webcast, please follow instructions via the
links above at least 15 minutes before the call to download the
necessary software and to avoid any delays in listening to the
call. A replay of the conference call will be available 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 full year and third
quarter 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 June 30, 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)
June 30, 2022
December 31, 2021
(unaudited)
Assets
Current assets:
Cash and cash equivalents
$
4,864
$
17,128
Accounts receivable, net
30,422
20,913
Contract assets
3,369
5,166
Inventory
30,754
22,493
Prepaid expenses and other current
assets
6,535
3,793
Assets held for sale
—
12,952
Total current assets
75,944
82,445
Property and equipment, net
4,499
2,988
Intangible assets, net
20,399
17,177
Goodwill
28,441
18,984
Operating lease right-of-use assets
4,774
5,075
Other non-current assets
3,214
247
Deferred tax asset
4,612
3,321
Total assets
$
141,883
$
130,237
Liabilities and stockholders’
equity
Liabilities:
Current liabilities:
Current portion of long-term debt
obligations
$
2,000
$
4,167
Accounts payable
3,881
2,809
Accrued and other current liabilities
16,413
9,258
Contract liabilities
4,816
4,649
Current portion of operating lease
liabilities
2,449
2,101
Liabilities associated with assets held
for sale
—
9,703
Total current liabilities
29,559
32,687
Long-term debt obligations, net of current
portion
19,218
11,673
Long-term portion of operating lease
liabilities
2,767
3,509
Deferred tax liability
1,357
—
Other long-term liabilities
421
445
Total liabilities
53,322
48,314
Commitments and contingencies
Stockholders’ equity:
Common stock, par value $0.001,
100,000,000 shares authorized, 34,528,065 and 33,855,725 shares
issued, 32,752,348 and 32,116,270 shares outstanding at June 30,
2022 and December 31, 2021, respectively
35
34
Treasury stock at cost, 1,784,957 and
1,744,026 shares at June 30, 2022 and December 31, 2021,
respectively
(5,542
)
(5,248
)
Additional paid-in capital
102,043
98,745
Accumulated deficit
(4,345
)
(11,575
)
Accumulated other comprehensive loss
(3,630
)
(33
)
Total stockholders’ equity
88,561
81,923
Total liabilities and stockholders’
equity
$
141,883
$
130,237
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,
2022
2021
2022
2021
Revenues
$
26,162
$
21,965
$
48,642
$
42,962
Cost of revenues
10,199
9,384
18,400
18,110
Gross profit
15,963
12,581
30,242
24,852
Operating expense:
Selling, general and administrative
15,760
12,805
29,862
23,739
Research, development and engineering
2,665
1,810
5,207
4,727
Total operating expense
18,425
14,615
35,069
28,466
Operating loss
(2,462
)
(2,034
)
(4,827
)
(3,614
)
Other income/(expense):
Other income
53
—
74
—
Interest expense, net
(111
)
(122
)
(224
)
(265
)
Total other expense, net
(58
)
(122
)
(150
)
(265
)
Loss from continuing operations before
income taxes
(2,520
)
(2,156
)
(4,977
)
(3,879
)
Income tax expense/(benefit)
422
(995
)
(693
)
(1,659
)
Net loss from continuing operations
(2,942
)
(1,161
)
(4,284
)
(2,220
)
Income from discontinued operations, net
of income tax expense (benefit) of ($856), $101, $166 and $146
591
931
594
1,672
Gain on sale of discontinued operations,
net of tax of $3,117
—
—
10,921
—
Net income from discontinued
operations
591
931
11,515
1,672
Net (loss)/income
$
(2,351
)
$
(230
)
$
7,231
$
(548
)
Net loss per share from continuing
operations:
Basic
$
(0.09
)
$
(0.04
)
$
(0.13
)
$
(0.07
)
Diluted
$
(0.09
)
$
(0.04
)
$
(0.13
)
$
(0.07
)
Net income per share from discontinued
operations:
Basic
$
0.02
$
0.03
$
0.36
$
0.05
Diluted
$
0.02
$
0.03
$
0.36
$
0.05
Net (loss)/income per share attributable
to common stockholders:
Basic
$
(0.07
)
$
(0.01
)
$
0.22
$
(0.02
)
Diluted
$
(0.07
)
$
(0.01
)
$
0.22
$
(0.02
)
Weighted average shares:
Basic
32,478,736
31,494,563
32,361,560
31,413,451
Diluted
32,478,736
31,494,563
32,361,560
31,413,451
Luna Innovations
Incorporated
Consolidated Statements of
Cash Flows (Unaudited)
(in thousands)
Six Months Ended June
30,
2022
2021
Cash flows used in operating
activities
Net income/(loss)
$
7,231
$
(548
)
Adjustments to reconcile net income/loss
to net cash used in operating activities
Depreciation and amortization
2,694
2,360
Share-based compensation
2,177
1,514
Gain from discontinued operations, net of
tax
(10,921
)
—
Deferred taxes
(124
)
—
Tax benefit from release of valuation
allowance
—
475
Change in assets and liabilities
Accounts receivable
(6,555
)
(473
)
Contract assets
140
763
Inventory
(4,281
)
(1,562
)
Other current assets
(3,870
)
(2,399
)
Other long-term assets
646
—
Accounts payable and accrued and other
current liabilities
6,123
(2,185
)
Contract liabilities
1,196
(826
)
Other long term-liabilities
(1,524
)
—
Net cash used in operating activities
(7,068
)
(2,881
)
Cash flows used in investing
activities
Acquisition of property and equipment
(1,657
)
(551
)
Intangible property costs
4
(141
)
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
(10,740
)
(692
)
Cash flows provided by/(used in)
financing activities
Payments on finance lease obligations
(24
)
(24
)
Proceeds from borrowings under debt
obligations
21,150
—
Payments of debt obligations
(15,772
)
(2,072
)
Repurchase of common stock
(294
)
(420
)
Proceeds from ESPP
521
530
Proceeds from the exercise of options
1,158
1,490
Net cash provided by/(used in) financing
activities
6,739
(496
)
Effect of exchange rate changes on cash
and cash equivalents
(1,195
)
673
Net decrease in cash and cash
equivalents
(12,264
)
(3,396
)
Cash and cash equivalents-beginning of
period
17,128
15,366
Cash and cash equivalents-end of
period
$
4,864
$
11,970
Luna Innovations
Incorporated
Reconciliation of Net
Income/(Loss) to EBITDA and Adjusted EBITDA
(in thousands)
Three Months Ended June
30,
Six Months Ended June
30,
2022
2021
2022
2021
Net (loss)/income
$
(2,351
)
$
(230
)
$
7,231
$
(548
)
Net income from discontinued
operations
591
931
11,515
1,672
Net loss from continuing operations
(2,942
)
(1,161
)
(4,284
)
(2,220
)
Interest expense, net
111
122
224
265
Income tax expense/(benefit)
422
(995
)
(693
)
(1,659
)
Depreciation and amortization
1,538
1,109
2,694
2,309
EBITDA
(871
)
(925
)
(2,059
)
(1,305
)
Share-based compensation
934
787
2,000
1,444
Integration and transaction expense
156
991
2,000
1,877
Amortization of inventory step-up
257
168
257
336
Other non-recurring charges (1)
708
—
708
—
Adjusted EBITDA
$
1,184
$
1,021
$
2,906
$
2,352
(1) - Other non-recurring charges include
customer accommodation, facility consolidation and debt refinancing
costs.
Luna Innovations
Incorporated
Reconciliation of Net
Income/(Loss) to Adjusted EPS
(in thousands, except per share
data)
Three Months Ended June
30,
Six Months Ended June
30,
2022
2021
2022
2021
Net (loss)/income
$
(2,351
)
$
(230
)
$
7,231
$
(548
)
Net income from discontinued
operations
591
931
11,515
1,672
Net loss from continuing operations
(2,942
)
(1,161
)
(4,284
)
(2,220
)
Share-based compensation
934
787
2,000
1,444
Integration and transaction expense
156
991
2,000
1,877
Amortization of intangible assets
992
766
1,813
1,592
Amortization of inventory step-up
257
168
257
336
Other non-recurring charges (1)
708
—
708
—
Income tax effect on adjustments
(762
)
(678
)
(1,695
)
(1,312
)
Adjusted (loss)/income from continuing
operations
$
(657
)
$
873
$
799
$
1,717
Adjusted EPS
$
(0.02
)
$
0.03
$
0.02
$
0.05
Adjusted weighted average shares (in
thousands):
Diluted
32,479
31,495
32,362
31,413
(1) - Other non-recurring charges include
customer accommodation, facility consolidation and debt refinancing
costs.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220811005179/en/
Investor Contact: Allison
Woody Phone: 540-769-8465 Email: IR@lunainc.com
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