Company provides 2020 outlook
Highlights
-
Total revenues of
$19.5 million for the three months endedDecember 31, 2019 , up 44% compared to the three months endedDecember 31, 2018 -
Products and licensing revenues of
$13.0 million for the three months endedDecember 31, 2019 , up 63% compared to the three months endedDecember 31, 2018 -
Net income from continuing operations of
$2.1 million , or$0.07 per fully diluted share, for the three months endedDecember 31, 2019 , compared to$(0.1) million , or$0.00 per fully diluted share, for the prior-year period -
Adjusted EBITDA improved to
$3.2 million for the three months endedDecember 31, 2019 , compared to$1.6 million for the three months endedDecember 31, 2018 -
Fiscal 2019 total revenues of
$70.5 million ; Adjusted EBITDA more than triples vs. prior year
“2019 marked an exceptional year for Luna, from both a financial and an operational perspective, and was our ninth consecutive quarter, and our second full fiscal year, of significant top- and bottom-line growth,” said
" As I reflect on these significant operational and financial achievements, I am particularly struck by the efficient and rapid integration of our two recent acquisitions, Micron Optics ("MOI") and General Photonics ("GP"), and the immediate accretion they had. I continue to be inspired by the focus and hard work of the Luna team, all of whom provided our customers the products and services to fit their unique needs. Our customers recognize and appreciate our performance, as reflected by our strong 2019 results. We look forward to an even stronger 2020.”
Fourth-Quarter Fiscal 2019 Financial Summary
Financial results for the three months ended
Highlights of the financial results for the three months ended
|
|
Three Months Ended |
|
|
|
||||||
(in thousands of |
|
2019 |
|
2018 |
|
Change |
|||||
Revenues: |
|
|
|
|
|
||||||
Products and licensing |
|
$ |
13,032 |
|
|
$ |
7,990 |
|
|
63 |
% |
Technology development |
|
6,448 |
|
|
5,549 |
|
|
16 |
% |
||
Total revenues |
|
19,480 |
|
|
13,539 |
|
|
44 |
% |
||
|
|
|
|
|
|
||||||
Gross profit |
|
10,388 |
|
|
6,572 |
|
|
58 |
% |
||
Gross margin |
|
53.3 |
% |
|
48.5 |
% |
|
|
|||
|
|
|
|
|
|
||||||
Operating expense |
|
8,671 |
|
|
6,149 |
|
|
41 |
% |
||
Operating income |
|
1,717 |
|
|
423 |
|
|
306 |
% |
||
|
|
|
|
|
|
||||||
Other income/(expense) and income taxes |
|
429 |
|
|
(546 |
) |
|
|
|
||
|
|
|
|
|
|
|
|
||||
Net income/(loss) from continuing operations |
|
$ |
2,146 |
|
|
$ |
(123 |
) |
|
1,845 |
% |
Diluted weighted average shares outstanding (in thousands) |
|
32,212 |
|
|
28,067 |
|
|
|
|
||
|
|
|
|
|
|
|
|
||||
Net income per share from continuing operations (diluted) |
|
$ |
0.07 |
|
|
N/A |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Adjusted EBITDA |
|
$ |
3,237 |
|
|
$ |
1,552 |
|
|
109 |
% |
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
Net income from continuing operations was
Adjusted EBITDA was
Full-Year Fiscal 2019 Financial Summary
Highlights of the financial results for the twelve months ended
|
|
Full Year Ended |
|
|
|||||||
(in thousands of |
|
2019 |
|
2018 |
|
Change |
|||||
Revenues: |
|
|
|
|
|
|
|||||
Products and licensing |
|
$ |
44,491 |
|
|
$ |
21,950 |
|
|
103 |
% |
Technology development |
|
26,025 |
|
|
20,968 |
|
|
24 |
% |
||
Total revenues |
|
70,516 |
|
|
42,918 |
|
|
64 |
% |
||
|
|
|
|
|
|
|
|||||
Gross profit |
|
35,182 |
|
|
19,438 |
|
|
81 |
% |
||
Gross margin |
|
49.9 |
% |
|
45.3 |
% |
|
|
|||
|
|
|
|
|
|
|
|||||
Operating expense |
|
31,867 |
|
|
18,560 |
|
|
72 |
% |
||
Operating income |
|
3,315 |
|
|
878 |
|
|
|
|||
|
|
|
|
|
|
|
|||||
Other income and income taxes |
|
2,028 |
|
|
360 |
|
|
|
|
||
|
|
|
|
|
|
|
|||||
Net income from continuing operations |
|
$ |
5,343 |
|
|
$ |
1,238 |
|
|
332 |
% |
|
|
|
|
|
|
|
|||||
Diluted weighted average shares outstanding (in thousands) |
|
31,841 |
|
|
32,452 |
|
|
|
|||
|
|
|
|
|
|
|
|||||
Net income per share from continuing operations (diluted) |
|
$ |
0.17 |
|
|
$ |
0.04 |
|
|
325 |
% |
|
|
|
|
|
|
|
|
||||
Adjusted EBITDA |
|
$ |
9,473 |
|
|
$ |
3,148 |
|
|
201 |
% |
A reconciliation of Adjusted EBITDA to net income can be found in the schedules included in this release. Note that revenue and expenses related to Luna's Optoelectronics business, as well as the gain recognized on the sale of that business in
2020 Full-Year Outlook:
For fiscal year 2020, Luna expects:
-
Total revenues in the range of
$81 million to$84 million for full fiscal 2020; and -
Adjusted EBITDA in the range of
$10 million to$12 million for full fiscal 2020.
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, 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 its projected 2020 financial results and outlook and 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 and those risks and uncertainties set forth in Luna’s Form 10-Q for the quarter ended
|
||||||||||||||||
|
Three months ended |
|
Year ended |
|||||||||||||
|
2019 |
2018 |
|
2019 |
2018 |
|||||||||||
|
|
|
|
|
|
|||||||||||
Revenues: |
|
|
|
|
|
|||||||||||
Products and licensing revenues |
$ |
13,032 |
|
$ |
7,990 |
|
|
$ |
44,491 |
|
$ |
21,950 |
|
|||
Technology development revenues |
6,448 |
|
5,548 |
|
|
26,025 |
|
20,967 |
|
|||||||
Total revenues |
19,480 |
|
13,538 |
|
|
70,516 |
|
42,917 |
|
|||||||
Cost of revenues: |
|
|
|
|
|
|||||||||||
Products and licensing costs |
4,317 |
|
2,698 |
|
|
16,684 |
|
8,079 |
|
|||||||
Technology development costs |
4,775 |
|
4,268 |
|
|
18,650 |
|
15,400 |
|
|||||||
Total cost of revenues |
9,092 |
|
6,966 |
|
|
35,334 |
|
23,479 |
|
|||||||
Gross profit |
10,388 |
|
6,572 |
|
|
35,182 |
|
19,438 |
|
|||||||
Operating expense: |
|
|
|
|
|
|||||||||||
Selling, general and administrative |
6,415 |
|
4,896 |
|
|
24,371 |
|
14,794 |
|
|||||||
Research, development and engineering |
2,255 |
|
1,253 |
|
|
7,496 |
|
3,766 |
|
|||||||
Total operating expense |
8,670 |
|
6,149 |
|
|
31,867 |
|
18,560 |
|
|||||||
Operating income |
1,718 |
|
423 |
|
|
3,315 |
|
878 |
|
|||||||
Other expense: |
|
|
|
|
|
|||||||||||
Other expense, net |
(1 |
) |
(1 |
) |
|
(5 |
) |
(17 |
) |
|||||||
Investment income |
69 |
|
199 |
|
|
394 |
|
549 |
|
|||||||
Interest expense, net |
(1 |
) |
(21 |
) |
|
(16 |
) |
(124 |
) |
|||||||
Total other income |
67 |
|
177 |
|
|
373 |
|
408 |
|
|||||||
Income from continuing operations before income taxes |
1,785 |
|
600 |
|
|
3,688 |
|
1,286 |
|
|||||||
Income tax benefit/(expense) |
361 |
|
(722 |
) |
|
1,655 |
|
(48 |
) |
|||||||
Income/(loss) from continuing operations |
2,146 |
|
(122 |
) |
|
5,343 |
|
1,238 |
|
|||||||
Income from discontinued operations, net of income taxes |
— |
1,062 |
|
|
— |
9,766 |
|
|||||||||
Net income |
2,146 |
|
940 |
|
|
5,343 |
|
11,004 |
|
|||||||
Preferred stock dividend |
— |
67 |
|
|
286 |
|
257 |
|
||||||||
Net income attributable to common stockholders |
$ |
2,146 |
|
$ |
873 |
|
|
$ |
5,057 |
|
$ |
10,747 |
|
|||
Net income per share from continuing operations: |
|
|
|
|
|
|||||||||||
Basic |
$ |
0.07 |
|
$ |
— |
|
$ |
0.19 |
|
$ |
0.04 |
|
||||
Diluted |
$ |
0.07 |
|
$ |
— |
|
$ |
0.17 |
|
$ |
0.04 |
|
||||
Net income per share from discontinued operations: |
|
|
|
|
|
|||||||||||
Basic |
$ |
— |
$ |
0.04 |
|
|
$ |
— |
$ |
0.35 |
|
|||||
Diluted |
$ |
— |
$ |
0.04 |
|
|
$ |
— |
$ |
0.30 |
|
|||||
Net income per share attributable to common stockholders: |
|
|
|
|
|
|||||||||||
Basic |
$ |
0.07 |
|
$ |
0.03 |
|
|
$ |
0.18 |
|
$ |
0.39 |
|
|||
Diluted |
$ |
0.07 |
|
$ |
0.03 |
|
|
$ |
0.16 |
|
$ |
0.33 |
|
|||
Weighted average shares (in thousands): |
|
|
|
|
|
|||||||||||
Basic |
30,159 |
|
28,067 |
|
|
28,689 |
|
27,596 |
|
|||||||
Diluted |
32,212 |
|
28,067 |
|
31,841 |
|
32,452 |
|
|
||||||||
|
|
|
|
|||||
|
|
|
|
|||||
Assets |
|
|
|
|||||
Current assets: |
|
|
|
|||||
Cash and cash equivalents |
$ |
25,006 |
|
|
$ |
42,460 |
|
|
Accounts receivable, net |
16,269 |
|
|
13,037 |
|
|||
Receivable from sale of HSOR business |
2,501 |
|
|
2,500 |
|
|||
Contract assets |
2,759 |
|
|
2,422 |
|
|||
Inventory, net |
10,294 |
|
|
6,874 |
|
|||
Prepaid expenses |
1,287 |
|
|
935 |
|
|||
Total current assets |
58,116 |
|
|
68,228 |
|
|||
Property and equipment, net |
3,466 |
|
|
3,628 |
|
|||
Intangible assets, net |
10,194 |
|
|
3,302 |
|
|||
|
10,542 |
|
|
101 |
|
|||
Long term contract assets |
449 |
|
|
337 |
|
|||
Other assets |
3,757 |
|
|
2 |
|
|||
Total assets |
86,524 |
|
|
75,598 |
|
|||
Liabilities and stockholders’ equity |
|
|
|
|||||
Current liabilities: |
|
|
|
|||||
Current portion of long term debt obligation |
$ |
— |
|
|
$ |
619 |
|
|
Current portion of capital lease obligation |
— |
|
|
41 |
|
|||
Accounts payable |
2,787 |
|
|
2,396 |
|
|||
Accrued liabilities |
10,369 |
|
|
6,597 |
|
|||
Contract liabilities |
3,888 |
|
|
2,486 |
|
|||
Total current liabilities |
17,044 |
|
|
12,139 |
|
|||
Long-term deferred rent |
— |
|
|
1,036 |
|
|||
Other long-term liabilities |
2,011 |
|
|
— |
|
|||
Long-term capital lease obligation |
— |
|
|
69 |
|
|||
Total liabilities |
19,055 |
|
|
13,244 |
|
|||
Commitments and contingencies |
|
|
|
|||||
Stockholders’ equity: |
|
|
|
|||||
Preferred stock, par value |
— |
|
|
1 |
|
|||
Common stock, par value |
32 |
|
|
30 |
|
|||
|
(4,337 |
) |
|
(2,117 |
) |
|||
Additional paid-in capital |
88,022 |
|
|
85,745 |
|
|||
Accumulated deficit |
(16,248 |
) |
|
(21,305 |
) |
|||
Total stockholders’ equity |
67,469 |
|
|
62,354 |
|
|||
Total liabilities and stockholders’ equity |
$ |
86,524 |
|
|
$ |
75,598 |
|
|
||||||||
|
|
Year ended |
||||||
|
|
2019 |
|
2018 |
||||
|
|
|
|
|
||||
Cash flows provided by/(used in) operating activities: |
|
|
|
|
||||
Net income |
|
$ |
5,343 |
|
|
$ |
11,004 |
|
Adjustments to reconcile net income to net cash provided by/(used in) operating activities: |
|
|
|
|
||||
Depreciation and amortization |
|
2,503 |
|
|
1,219 |
|
||
Stock-based compensation |
|
1,544 |
|
|
628 |
|
||
Gain on disposal of fixed assets |
|
— |
|
|
(1 |
) |
||
Gain on sale of discontinued operations, net of income taxes |
|
— |
|
|
(8,596 |
) |
||
Tax benefit from release of valuation allowance |
|
(3,349 |
) |
|
— |
|
||
Bad debt |
|
538 |
|
|
6 |
|
||
Changes in operating assets and liabilities: |
|
|
|
|
||||
Accounts receivable |
|
(2,249 |
) |
|
(6,240 |
) |
||
Contract assets |
|
(449 |
) |
|
(762 |
) |
||
Inventory |
|
(723 |
) |
|
(968 |
) |
||
Other assets |
|
(242 |
) |
|
1,850 |
|
||
Other long-term assets |
|
45 |
|
|
— |
|
||
Accounts payable and accrued expenses |
|
592 |
|
|
(462 |
) |
||
Contract liabilities |
|
1,245 |
|
|
(986 |
) |
||
Net cash provided by/(used in) operating activities |
|
4,798 |
|
|
(3,308 |
) |
||
Cash flows (used in)/provided by investing activities: |
|
|
|
|
||||
Acquisition of property and equipment |
|
(541 |
) |
|
(387 |
) |
||
Proceeds from sale of property and equipment |
|
— |
|
|
1 |
|
||
Intangible property costs |
|
(270 |
) |
|
(375 |
) |
||
Acquisition of |
|
(19,004 |
) |
|
— |
|
||
Acquisition of Micron Optics |
|
— |
|
|
(5,002 |
) |
||
Proceeds from sale of discontinued operations, net |
|
— |
|
|
15,800 |
|
||
Net cash (used in)/provided by investing activities |
|
(19,815 |
) |
|
10,037 |
|
||
Cash flows used in financing activities: |
|
|
|
|
||||
Payments on debt obligations |
|
(625 |
) |
|
(1,833 |
) |
||
Payments on finance lease obligation |
|
(40 |
) |
|
(47 |
) |
||
Purchase of treasury stock |
|
(2,220 |
) |
|
(467 |
) |
||
Proceeds from the exercise of options |
|
448 |
|
|
1,097 |
|
||
Net cash used in financing activities |
|
(2,437 |
) |
|
(1,250 |
) |
||
Net change in cash and cash equivalents |
|
(17,454 |
) |
|
5,478 |
|
||
Cash and cash equivalents—beginning of period |
|
42,460 |
|
|
36,982 |
|
||
Cash and cash equivalents—end of period |
|
$ |
25,006 |
|
|
$ |
42,460 |
|
|
||||||||||||||||
|
Three months ended
|
|
Year ended
|
|||||||||||||
|
2019 |
|
2018 |
|
2019 |
|
2018 |
|||||||||
|
|
|
|
|||||||||||||
Net income |
$ |
2,146 |
|
|
$ |
940 |
|
|
$ |
5,343 |
|
|
$ |
11,004 |
|
|
Less income from discontinued operations, net of income taxes |
— |
|
|
1,062 |
|
|
— |
|
|
9,766 |
|
|||||
Net income/(loss) from continuing operations |
2,146 |
|
|
(122 |
) |
|
5,343 |
|
|
1,238 |
|
|||||
Income tax (benefit)/expense |
(361 |
) |
|
722 |
|
|
(1,654 |
) |
|
48 |
|
|||||
Income from continuing operations before income taxes |
1,785 |
|
|
600 |
|
|
3,689 |
|
|
1,286 |
|
|||||
Investment income |
(69 |
) |
|
(199 |
) |
|
(394 |
) |
|
(550 |
) |
|||||
Interest expense |
1 |
|
|
21 |
|
|
16 |
|
|
124 |
|
|||||
Depreciation and amortization |
668 |
|
|
197 |
|
|
2,503 |
|
|
909 |
|
|||||
EBITDA |
2,385 |
|
|
619 |
|
|
5,814 |
|
|
1,769 |
|
|||||
Share-based compensation |
404 |
|
|
182 |
|
|
1,544 |
|
|
628 |
|
|||||
Non-recurring charges |
448 |
|
|
751 |
|
|
2,115 |
|
|
751 |
|
|||||
Adjusted EBITDA |
$ |
3,237 |
|
|
$ |
1,552 |
|
|
$ |
9,473 |
|
|
$ |
3,148 |
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20200305005824/en/
Investor Contacts:
Phone: 303-829-1211
Email: IR@lunainc.com
614-530-3002
IR@lunainc.com
Source: