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     122  0 Kommentare Luna Innovations Reports Record Fourth-Quarter and Full-Year 2019 Results

    Luna Innovations Incorporated (NASDAQ: LUNA), a global leader in advanced optical technology, today announced its financial results for the three months and full fiscal year ended December 31, 2019.

    “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 Scott Graeff, President and Chief Executive Officer of Luna. “During the year, we achieved record revenue and income from continuing operations while streamlining our balance sheet through a conversion of preferred shares. We completed a $2 million stock repurchase program and realigned the organization for future growth, including the appointment of Gene Nestro as CFO."

    " 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 December 31, 2019 continue the strong momentum from throughout the fiscal year. These results include a full quarter of the business of GP, acquired in March 2019; fourth quarter 2018 did not include GP.

    Highlights of the financial results for the three months ended December 31, 2019 are:

     

     

    Three Months Ended December 31,

     

     

     

    (in thousands of U.S. Dollars, except per share data)

     

    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 December 31, 2019 increased compared to the prior year period due to the inclusion of the incremental revenues associated with the acquired operations of GP, as well as increased revenues associated with Luna’s communications test and fiber optic sensing products. Technology development revenues increased for the three months ended December 31, 2019, compared to the prior-year period due to growth in various government research programs. The increase in operating expenses was due to the addition of GP's operating expenses, as well as continued incremental investment in sales and engineering to support Luna's growth. Pre-tax income from continuing operations increased to $1.8 million for the three months ended December 31, 2019, compared to $0.6 million for the prior year fiscal quarter.

    Net income from continuing operations was $2.1 million, or $0.07 per fully diluted share, for the three months ended December 31, 2019, compared to a loss of $0.1 million, or $0.00 per fully diluted share, for the prior-year period. The income tax benefit for the quarter and year ended December 31, 2019 includes income tax benefits of $1.1 million and $3.3 million, respectively, due to the release of valuation allowances on net operating loss carryforwards. The increase in net income from continuing operations was driven by Luna's increased revenue and strong operating results.

    Adjusted EBITDA was $3.2 million for the three months ended December 31, 2019, compared to $1.6 million for the three months ended December 31, 2018. The growth was driven by revenue growth from both Luna’s legacy business and the MOI and GP acquisitions, as well as prudent expense management.

    Full-Year Fiscal 2019 Financial Summary

    Highlights of the financial results for the twelve months ended December 31, 2019 are:

     

     

    Full Year Ended December 31,

     

     

    (in thousands of U.S. Dollars, except per share data)

     

    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 July 2018, were classified as discontinued operations in Luna's results of operations beginning in its quarter ended September 30, 2018. Accordingly, net income for fiscal 2018 includes income from discontinued operations. Income from discontinued operations totaled $1.1 million in the fourth-quarter fiscal 2018 and $9.8 million for fiscal 2018. As a reminder, the fourth-quarter fiscal 2019 was the last quarter in which discontinued operations comparisons related to Luna’s optoelectronic business and the gain related to the sale of that business were relevant.

    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 5:00 pm (ET) today to discuss its financial results for the three months and full year ended December 31, 2019. 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 6020329. 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 the aerospace and automotive industries. Luna is organized into two business segments, which work closely together to turn ideas into products: a Technology Development segment and a Products and Licensing segment. 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 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 September 30, 2019, 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 Statements of Operations
    (in thousands of U.S. Dollars, except per share data)

     

     

    Three months ended December 31,

     

    Year ended December 31,

     

    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

     

    Luna Innovations Incorporated
    Consolidated Balance Sheets
    (in thousands of U.S Dollars)

     

     

    December 31,
    2019

     

    December 31,
    2018

     

     

     

     

    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

     

    Goodwill

    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 $0.001, 1,321,514 shares authorized, 0 and 1,321,514 shares issued and outstanding at December 31, 2019 and 2018, respectively

     

     

    1

     

    Common stock, par value $0.001, 100,000,000 shares authorized, 31,788,896 and 29,209,506 shares issued, 30,149,105 and 27,956,401 shares outstanding at December 31, 2019 and 2018, respectively

    32

     

     

    30

     

    Treasury stock at cost, 1,639,791 and 1,253,105 shares at December 31, 2019 and 2018, respectively

    (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

     

    Luna Innovations Incorporated
    Consolidated Statements of Cash Flows
    (in thousands of U.S. Dollars)

     

     

     

    Year ended December 31,

     

     

    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 General Photonics Corporation

     

    (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

     

    Luna Innovations Incorporated
    Reconciliation of Net Income to EBITDA and Adjusted EBITDA
    (in thousands of U.S. Dollars)

     

     

    Three months ended
    December 31,

     

    Year ended
    December 31,

     

    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

     

     



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    Luna Innovations Reports Record Fourth-Quarter and Full-Year 2019 Results Luna Innovations Incorporated (NASDAQ: LUNA), a global leader in advanced optical technology, today announced its financial results for the three months and full fiscal year ended December 31, 2019. “2019 marked an exceptional year for Luna, from …

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