Highlights
- Total revenues of
$14.8 million for the three months endedMarch 31, 2019 , up 69% compared to the three months endedMarch 31, 2018 - Products and licensing revenues of
$8.2 million for the three months endedMarch 31, 2019 , up 98% compared to the three months endedMarch 31, 2018 - Net income was
$1.1 million , or$0.03 per fully diluted share, for the three months endedMarch 31, 2019 , compared to$0.1 million , or$0.00 per fully diluted share, for the three months endedMarch 31, 2018 - Adjusted EBITDA improved to
$1.0 million for the three months endedMarch 31, 2019 , compared to a loss of$(0.1) million for the three months endedMarch 31, 2018 - Reaffirms 2019 outlook
“I continue to be proud of the Luna team and how we’ve driven
performance and delivered such a strong first quarter,” said
First-quarter Fiscal 2019 Financial Summary
Financial results for the three months ended
Three Months Ended March 31, | |||||||||||
2019 | 2018 | Change | |||||||||
Revenues: | |||||||||||
Technology development | $ | 6,640,743 | $ | 4,636,776 | 43.2 | % | |||||
Products and licensing | $ | 8,192,375 | $ | 4,131,754 | 98.3 | % | |||||
Total revenues | $ | 14,833,118 | $ | 8,768,530 | 69.2 | % | |||||
Gross profit | $ | 6,767,634 | $ | 3,839,626 | 76.3 | % | |||||
Gross margin | 45.6 | % | 43.8 | % | 180 bps | ||||||
Operating expense | $ | 7,665,211 | $ | 4,213,082 | 81.9 | % | |||||
Operating loss | $ | (897,577 | ) | $ | (373,456 | ) | 140.3 | % | |||
Net income | $ | 1,125,879 | $ | 148,676 | $1.0M | ||||||
Adjusted EBITDA | $ | 958,810 | $ | (52,339 | ) | $1.0M | |||||
A reconciliation of Adjusted EBITDA to net income can be found in the schedules included in this release.
Products and licensing revenue for the three months ended
The increase in operating expenses was due primarily to
Pre-tax loss from continuing operations increased to
Income tax benefit for the three months ended
Net income attributable to common stockholders for the three months
ended
Adjusted EBITDA was
2019 Full-year Outlook:
Luna reaffirms:
-
Total revenues in the range of
$60 million to $65 million for full fiscal 2019; and -
Adjusted EBITDA in the range of
$6.0 million to $6.5 million for full fiscal 2019.
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, amortization of acquired intangible assets, 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 provides 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 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 has 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
About Luna
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 the integration of its recent acquisitions of MOI and GP, its
projected 2019 financial results, and its business focus. 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 and those risks and uncertainties
set forth in Luna’s Form 10-K for the year ended
Luna Innovations Incorporated | ||||||||
Consolidated Statements of Operations | ||||||||
Three Months Ended March 31, | ||||||||
2019 | 2018 | |||||||
(unaudited) | ||||||||
Revenues: | ||||||||
Technology development | $ | 6,640,743 | $ | 4,636,776 | ||||
Products and licensing | 8,192,375 | 4,131,754 | ||||||
Total revenues | 14,833,118 | 8,768,530 | ||||||
Cost of revenues: | ||||||||
Technology development | 4,816,146 | 3,353,501 | ||||||
Products and licensing | 3,249,338 | 1,575,403 | ||||||
Total cost of revenues | 8,065,484 | 4,928,904 | ||||||
Gross profit | 6,767,634 | 3,839,626 | ||||||
Operating expense: | ||||||||
Selling, general and administrative | 6,207,318 | 3,333,490 | ||||||
Research, development and engineering | 1,457,893 | 879,592 | ||||||
Total operating expense | 7,665,211 | 4,213,082 | ||||||
Operating loss | (897,577 | ) | (373,456 | ) | ||||
Other income/(expense): | ||||||||
Investment income | 171,225 | 75,912 | ||||||
Other expense | (1,729 | ) | (10,854 | ) | ||||
Interest expense | (11,187 | ) | (40,647 | ) | ||||
Total other income | 158,309 | 24,411 | ||||||
Loss from continuing operations before income taxes | (739,268 | ) | (349,045 | ) | ||||
Income tax benefit | (1,865,147 | ) | (76,967 | ) | ||||
Net income/(loss) from continuing operations | 1,125,879 | (272,078 | ) | |||||
Income from discontinued operations, net of income tax of $0 and $78,363 | — | 420,754 | ||||||
Net income from discontinued operations | — | 420,754 | ||||||
Net income | 1,125,879 | 148,676 | ||||||
Preferred stock dividend | 83,058 | 64,425 | ||||||
Net income attributable to common stockholders | $ | 1,042,821 | $ | 84,251 | ||||
Net income/(loss) per share from continuing operations: | ||||||||
Basic | $ | 0.04 | $ | (0.01 | ) | |||
Diluted | $ | 0.03 | $ | (0.01 | ) | |||
Net income per share from discontinued operations: | ||||||||
Basic | $ | — | $ | 0.02 | ||||
Diluted | $ | — | $ | 0.02 | ||||
Net income per share attributable to common stockholders: | ||||||||
Basic | $ | 0.04 | $ | — | ||||
Diluted | $ | 0.03 | $ | — | ||||
Weighted average common shares and common equivalent shares outstanding: | ||||||||
Basic | 28,039,080 | 27,204,989 | ||||||
Diluted | 33,479,935 | 27,204,989 | ||||||
Luna Innovations Incorporated | ||||||||
Consolidated Balance Sheets | ||||||||
March 31, |
December 31, |
|||||||
(unaudited) | ||||||||
Assets | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 24,580,006 | $ | 42,460,267 | ||||
Accounts receivable, net | 13,505,444 | 13,037,068 | ||||||
Receivable from sale of HSOR business | 2,500,375 | 2,500,000 | ||||||
Contract assets | 2,829,186 | 2,422,495 | ||||||
Inventory | 9,996,054 | 6,873,742 | ||||||
Prepaid expenses and other current assets | 1,087,416 | 935,185 | ||||||
Total current assets | 54,498,481 | 68,228,757 | ||||||
Long-term contract assets | 359,166 | 336,820 | ||||||
Property and equipment, net | 3,845,748 | 3,627,886 | ||||||
Intangible assets, net | 11,309,181 | 3,302,270 | ||||||
Goodwill | 10,345,249 | 101,008 | ||||||
Other assets | 3,205,983 | 1,995 | ||||||
Total assets | $ | 83,563,808 | $ | 75,598,736 | ||||
Liabilities and stockholders’ equity | ||||||||
Liabilities: | ||||||||
Current liabilities: | ||||||||
Current portion of long-term debt obligations | $ | 247,726 | $ | 619,315 | ||||
Current portion of capital lease obligations | — | 40,586 | ||||||
Accounts payable | 4,945,927 | 2,395,984 | ||||||
Accrued liabilities | 8,599,225 | 6,597,458 | ||||||
Contract liabilities | 2,792,119 | 2,486,111 | ||||||
Total current liabilities | 16,584,997 | 12,139,454 | ||||||
Long-term deferred rent | — | 1,035,974 | ||||||
Other long-term liabilities | 2,970,879 | — | ||||||
Long-term capital lease obligations | — | 68,978 | ||||||
Total liabilities | 19,555,876 | 13,244,406 | ||||||
Commitments and contingencies | ||||||||
Stockholders’ equity: | ||||||||
Preferred stock, par value $0.001, 1,321,514 shares authorized, issued and outstanding at March 31, 2019 and December 31, 2018 | 1,322 | 1,322 | ||||||
Common stock, par value $0.001, 100,000,000 shares authorized, 29,398,818 and 29,209,506 shares issued, 28,145,713 and 27,956,401 shares outstanding at March 31, 2019 and December 31, 2018, respectively | 30,329 | 30,120 | ||||||
Treasury stock at cost, 1,253,105 shares at March 31, 2019 and December 31, 2018 | (2,116,640 | ) | (2,116,640 | ) | ||||
Additional paid-in capital | 86,355,322 | 85,744,750 | ||||||
Accumulated deficit | (20,262,401 | ) | (21,305,222 | ) | ||||
Total stockholders’ equity | 64,007,932 | 62,354,330 | ||||||
Total liabilities and stockholders’ equity | $ | 83,563,808 | $ | 75,598,736 | ||||
Luna Innovations Incorporated | ||||||||
Consolidated Statements of Cash Flows | ||||||||
Three Months Ended March 31, | ||||||||
2019 | 2018 | |||||||
(unaudited) | ||||||||
Cash flows provided by/(used in) operating activities | ||||||||
Net income | $ | 1,125,879 | $ | 148,676 | ||||
Adjustments to reconcile net income to net cash provided by/(used in) operating activities | ||||||||
Depreciation and amortization | 617,309 | 307,852 | ||||||
Share-based compensation | 342,765 | 94,606 | ||||||
Deferred taxes | (1,889,266 | ) | — | |||||
Change in assets and liabilities | ||||||||
Accounts receivable | 1,052,571 | (229,535 | ) | |||||
Contract assets | (429,037 | ) | 221,386 | |||||
Inventory | (527,849 | ) | (110,095 | ) | ||||
Other current assets | (41,549 | ) | 133,293 | |||||
Accounts payable and accrued expenses | 1,196,425 | (1,456,154 | ) | |||||
Contract liabilities | 149,435 | (1,650,363 | ) | |||||
Net cash provided by/(used in) operating activities |
1,596,683 | (2,540,334 | ) | |||||
Cash flows used in investing activities | ||||||||
Acquisition of property and equipment | (215,251 | ) | (129,720 | ) | ||||
Intangible property costs | (60,639 | ) | (113,108 | ) | ||||
Acquisition of General Photonics Corporation | (19,004,250 | ) | — | |||||
Net cash used in investing activities | (19,280,140 | ) | (242,828 | ) | ||||
Cash flows used in financing activities | ||||||||
Payments on finance lease obligations | (6,763 | ) | (13,611 | ) | ||||
Payments of debt obligations | (375,000 | ) | (458,333 | ) | ||||
Repurchase of common stock | — | (306,041 | ) | |||||
Proceeds from the exercise of options and warrants | 184,959 | 22,288 | ||||||
Net cash used in financing activities | (196,804 | ) | (755,697 | ) | ||||
Net decrease in cash and cash equivalents | (17,880,261 | ) | (3,538,859 | ) | ||||
Cash and cash equivalents-beginning of period | 42,460,267 | 36,981,533 | ||||||
Cash and cash equivalents-end of period | $ | 24,580,006 | $ | 33,442,674 | ||||
Luna Innovations Incorporated | ||||||||
Reconciliation of Net Income to EBITDA and Adjusted EBITDA | ||||||||
Three Months Ended March 31, | ||||||||
2019 | 2018 | |||||||
(unaudited) | ||||||||
Net income | $ | 1,125,879 | $ | 148,676 | ||||
Less income from discontinued operations, net of income tax | — | 420,754 | ||||||
Net income/(loss) from continuing operations | 1,125,879 | (272,078 | ) | |||||
Interest expense | 11,187 | 40,647 | ||||||
Investment income | (171,225 | ) | (75,912 | ) | ||||
Tax benefit | (1,865,147 | ) | (76,967 | ) | ||||
Depreciation and amortization | 617,309 | 237,365 | ||||||
EBITDA | (281,997 | ) | (146,945 | ) | ||||
Share-based compensation | 342,765 | 94,606 | ||||||
Non-recurring charges (1) | 898,042 | — | ||||||
Adjusted EBITDA | $ | 958,810 | $ | (52,339 | ) | |||
(1) Non-recurring charges consist of transaction-related expenses incurred during the quarter ended March 31, 2019, related to the acquisition of General Photonics. |
View source version on businesswire.com: https://www.businesswire.com/news/home/20190508005868/en/
Source:
Investor Contacts:
Jane Bomba
Luna Innovations
Incorporated
Phone: 303-829-1211
Email: IR@lunainc.com
Sally J. Curley
Luna Innovations Incorporated
614-530-3002
IR@lunainc.com