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CST: 21/11/2019 12:47:12   

nLIGHT Announces Third Quarter 2019 Results

16 Days ago

Revenues of $43.8 million and gross margin of 29.6% for the third quarter of 2019

VANCOUVER, Wash., Nov. 04, 2019 (GLOBE NEWSWIRE) -- nLIGHT, Inc. (Nasdaq: LASR), a leading provider of high-power semiconductor and fiber lasers used in the industrial, microfabrication, and aerospace and defense markets, today reported financial results for the third quarter of 2019.

“While our near-term results have been affected by a slowdown in our microfabrication end market and ongoing price competition in the Chinese industrial market, we remain focused on introducing differentiated products and building momentum with new design wins,” commented Scott Keeney, nLIGHT’s President and Chief Executive Officer. “With the evolution of Corona, the expansion of our welding capabilities, and continued progress driving higher performance and lower cost products across our portfolio, we are well positioned for long-term revenue growth and margin expansion.

“Our aerospace and defense end market delivered another quarter of strong growth and record sales. Additionally, our product development efforts for the directed energy market, which are focused on size, weight, and performance, position us well for this developing opportunity.”

Third Quarter 2019 Financial Highlights

  Three Months Ended  September 30,    
(In thousands, except percentages) 2019   2018   % Change
Revenues $ 43,814     $ 51,025     (14.1 )%
Gross margin 29.6 %   35.4 %    
Income from operations $ (696 )   $ 5,087     (113.7 )%
Operating margin (1.6 )%   10.0 %    
Net income (loss) $ (778 )   $ 4,009     (119.4 )%
Adjusted EBITDA(1) $ 2,696     $ 9,184     (70.6 )%
Adjusted EBITDA, as percentage of revenues 6.2 %   18.0 %    
(1) A reconciliation of the non-GAAP information provided here to the most directly comparable GAAP metric has been provided in the financial statement tables included in this release.

Revenues of $43.8 million for the third quarter of 2019 were down 14.1% compared to $51.0 million for the third quarter of 2018. Gross margin was 29.6% for the third quarter of 2019 compared to 35.4% for the third quarter of 2018. GAAP net loss for the third quarter of 2019 was $(0.8) million, or net loss of $(0.02) per diluted share, compared to net income of $4.0 million, or net income of $0.10 per diluted share, for the third quarter of 2018. Excluding the impact of stock-based compensation, non-GAAP net income for the third quarter of 2019 was $0.3 million, or non-GAAP net income of $0.01 per diluted share, compared to non-GAAP net income of $5.9 million, or non-GAAP net income of $0.15 per diluted share, for the third quarter of 2018.

Outlook

For the fourth quarter of 2019, nLIGHT expects revenues to be in the range of $36.0 million to $40.0 million, gross margin to be in the range of 25.0% to 28.0%, and Adjusted EBITDA to be in the range of a loss of $(2.0) million to breakeven.

Investor Conference Call at 2:00 p.m. Pacific Time, Monday, November 4, 2019

Parties interested in listening to nLIGHT’s quarterly conference call may do so by dialing 1-833-535-2198 (U.S., toll-free) or +1-412-902-6775 (international and toll), with the conference title: nLIGHT Third Quarter 2019 Earnings. The call can also be accessed via the web by going to nLIGHT’s Investor Relations page at http://nlight.net/company/investors.

Use of Non-GAAP Financial Results

In addition to U.S. GAAP results, this press release contains non-GAAP financial results, including Adjusted EBITDA, non-GAAP net income and non-GAAP net income per share, basic and diluted. We use Adjusted EBITDA to help us evaluate our business, measure our performance, identify trends affecting our business, formulate business plans and make strategic decisions. In addition to our results determined in accordance with GAAP, we believe Adjusted EBITDA is a meaningful measure of performance as it is commonly utilized by us and the investment community to analyze operating performance in our industry. Similarly, we believe that providing non-GAAP net income and non-GAAP net income per share, basic and diluted, is useful to our investors as they present informative supplemental view of our results from period to period by giving effect to both the conversion of all outstanding preferred stock to common stock, which occurred immediately prior to the closing of nLIGHT’s initial public offering on April 30, 2018, as well as removing the effect of stock-based compensation expense. However, the non-GAAP financial measures presented herein are specific to us and may not be comparable to similar measures disclosed by other companies because of differing methods used by other companies in calculating them.

We define Adjusted EBITDA as net income adjusted for income tax expense, other non-operating expense or income, interest expense or income, depreciation and amortization, stock-based compensation and other special items as determined by management, as applicable. We define non-GAAP net income as GAAP net income adjusted for stock-based compensation. We define non-GAAP net income per share, basic and diluted, as non-GAAP net income divided by preferred and common weighted-average shares outstanding during the respective period plus the dilutive effect of any common stock equivalents during the period, if applicable.

Tables presenting the reconciliation of Adjusted EBITDA to net income, as well as the reconciliation of non-GAAP net income and non-GAAP net income per share, basic and diluted, to net income and net income per share, basic and diluted, respectively basic and diluted, the two most directly comparable GAAP financial metrics, are included at the end of this press release.

We have not reconciled our outlook for Adjusted EBITDA because unrealized and realized foreign exchange gains and losses cannot be reasonably calculated or predicted nor can the probable significance be determined at this time. Accordingly, a reconciliation is not available without unreasonable effort.

Safe Harbor Statement

Certain statements in this release are “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995. Words such as “outlook,” “guidance,” “expects,” “intends,” “projects,” “plans,” “believes,” “estimates,” “targets,” “anticipates,” and similar expressions may identify these forward-looking statements. Examples of forward-looking statements include, but are not limited to, statements regarding expected revenues, gross margin, and Adjusted EBITDA, as well as any other statement that does not directly relate to any historical or current fact. Forward-looking statements are based on our current expectations and assumptions, which may not prove to be accurate. These statements are not guarantees and are subject to risks, uncertainties and changes in circumstances that are difficult to predict. Many factors could cause actual results to differ materially and adversely from these forward-looking statements, including but not limited to: (1) our ability to generate sufficient revenues to achieve or maintain profitability in the future, (2) fluctuations in our quarterly results of operations and other operating measures, (3) downturns in the markets we serve could materially adversely affect our revenues and profitability, (4) our high levels of fixed costs and inventory levels may harm our gross profits and results of operations in the event that demand for our products declines or we maintain excess inventory levels, (5) the competitiveness of the markets for our products, (6) our substantial sales and operations in China, which expose us to risks inherent in doing business there, (7) the effect of current and potential tariffs and global trade policies on the cost of our products, (8) our manufacturing capacity and operations may not be appropriate for future levels of demand, (9) our reliance on a small number of customers for a significant portion of our revenues and (10) the risk that we may be unable to protect our proprietary technology and intellectual property rights. Additional information concerning these and other factors can be found in nLIGHT's filings with the Securities and Exchange Commission (the “SEC”), including other risks, relevant factors and uncertainties identified in the “Risk Factors” section of nLIGHT's Annual Report on Form 10-K or subsequent filings with the SEC. nLIGHT undertakes no obligation to update publicly or revise any forward-looking statements contained herein to reflect future events or developments, except as required by law.

The nLIGHT logo, “nLIGHT,” and “Corona” are registered trademarks or trademarks of nLIGHT, Inc. in various jurisdictions.

About nLIGHT

nLIGHT, Inc. is a leading provider of high-power semiconductor and fiber lasers for industrial, microfabrication, aerospace and defense applications. Our lasers are changing not only the way things are made but also the things that can be made. Headquartered in Vancouver, Washington, nLIGHT employs over 1,000 people with operations in the U.S., China and Finland. For more information, please visit www.nlight.net.

For more information, contact:
Jason Willey
Investor Relations and Corporate Development
nLIGHT, Inc.
(360) 567-4890
jason.willey@nlight.net


 
nLIGHT, Inc.
Consolidated Statements of Operations
(In thousands, except per share data)
(Unaudited)
 
  Three Months Ended September 30,   Nine Months Ended September 30,
  2019   2018   2019   2018
Revenues $ 43,814     $ 51,025     $ 133,723     $ 145,197  
Cost of revenues(1) 30,852     32,978     91,376     94,742  
Gross profit 12,962     18,047     42,347     50,455  
Operating expenses:              
Research and development(1) 6,402     5,475     19,318     14,656  
Sales, general, and administrative(1) 7,256     7,485     23,972     20,955  
Total operating expenses 13,658     12,960     43,290     35,611  
Income (loss) from operations (696 )   5,087     (943 )   14,844  
Other income (expense):              
Interest income, net 665     298     2,155     73  
Other income (expense), net 90     (537 )   3     (503 )
Income (loss) before income taxes 59     4,848     1,215     14,414  
Income tax expense 837     839     3,383     2,836  
Net income (loss) $ (778 )   $ 4,009     $ (2,168 )   $ 11,578  
Less: Income allocated to participating securities             (4,415 )
Net income (loss) attributable to common stockholders $ (778 )   $ 4,009     $ (2,168 )   $ 7,163  
Net income (loss) per share, basic $ (0.02 )   $ 0.11     $ (0.06 )   $ 0.34  
Net income (loss) per share, diluted $ (0.02 )   $ 0.10     $ (0.06 )   $ 0.27  
Shares used in per share calculations:              
Basic 37,262     35,007     37,005     20,946  
Diluted 37,262     40,332     37,005     26,138  
                       


(1)Includes stock-based compensation as follows:              
  Three Months Ended September 30,   Nine Months Ended
September 30,
  2019   2018   2019   2018
Cost of revenues $ 340     $ 183     $ 816     $ 267  
Research and development 424     513     1,693     738  
Sales, general and administrative 315     1,207     2,860     1,866  
  $ 1,079     $ 1,903     $ 5,369     $ 2,871  





 
nLIGHT, Inc.
Condensed Consolidated Balance Sheets
(In thousands)
(Unaudited)
 
  September 30,   December 31,
  2019   2018
Assets      
Current assets:      
Cash and cash equivalents $ 138,863     $ 149,478  
Accounts receivable, net 28,757     26,528  
Inventory 45,719     35,329  
Prepaid expenses and other current assets 4,713     7,286  
Total current assets 218,052     218,621  
Property and equipment, net 25,784     21,462  
Intangible assets, net 3,113     2,686  
Goodwill 1,387     1,387  
Other assets 7,132     5,974  
Total assets $ 255,468     $ 250,130  
       
Liabilities and Stockholders’ Equity      
Current liabilities:      
Accounts payable $ 15,460     $ 12,068  
Accrued liabilities 9,778     10,708  
Deferred revenues 454     720  
Current portion of long-term debt 66     91  
Total current liabilities 25,758     23,587  
Non-current income taxes payable 6,809     6,472  
Long-term debt     18  
Other long-term liabilities 1,681     2,270  
Total liabilities 34,248     32,347  
Stockholders' equity:      
Preferred stock - par value      
Common stock - par value 15     15  
Additional paid-in capital 331,169     324,656  
Accumulated other comprehensive loss (3,226 )   (2,157 )
Accumulated deficit (106,738 )   (104,731 )
Total stockholders’ equity 221,220     217,783  
Total liabilities and stockholders’ equity $ 255,468     $ 250,130  
               



 
nLIGHT, Inc.
Condensed Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
 
  Nine Months Ended September 30,
  2019   2018
Cash flows from operating activities:      
Net income (loss) $ (2,168 )   $ 11,578  
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:      
Depreciation 4,859     4,415  
Amortization 1,935     1,897  
Provision for (recoveries of) losses on accounts receivable 58     (34 )
Stock-based compensation 5,369     2,871  
Loss (gain) on disposal of property and equipment (7 )   11  
Loss on debt extinguishment     12  
Changes in operating assets and liabilities:      
Accounts receivable, net (2,836 )   (8,382 )
Inventory (11,055 )   (7,071 )
Prepaid expenses and other current assets 2,590     (3,076 )
Other assets (2,670 )   (1,405 )
Accounts payable 3,290     1,517  
Accrued and other long-term liabilities (1,337 )   (702 )
Other changes 78     511  
Net cash provided by (used in) operating activities (1,894 )   2,142  
Cash flows from investing activities:      
Purchases of property, equipment and patents (10,007 )   (8,654 )
Proceeds from sale of property and equipment 19     8  
Net cash used in investing activities (9,988 )   (8,646 )
Cash flows from financing activities:      
Principal payments on debt and capital leases (67 )   (17,300 )
Net proceeds from debt financing     16,053  
Proceeds from public offerings, net of offering costs     139,089  
Proceeds from employee stock plan purchases 762      
Proceeds from stock option exercises 1,032     161  
Tax payments related to stock award issuances (489 )    
Net cash provided by financing activities 1,238     138,003  
Effect of exchange rate changes on cash 29     (4 )
Net increase (decrease) in cash and cash equivalents (10,615 )   131,495  
Cash and cash equivalents, beginning of period 149,478     36,687  
Cash and cash equivalents, end of period $ 138,863     $ 168,182  
               


 
nLIGHT, Inc.
Reconciliation of GAAP Financial Metrics to Non-GAAP
(In thousands, except per share data)
(Unaudited)
 
Reconciliation of Net Income (Loss) to Adjusted EBITDA
 
  Three Months Ended September 30,   Nine Months Ended September 30,
  2019   2018   2019   2018
Net income (loss) $ (778 )   $ 4,009     $ (2,168 )   $ 11,578  
Income tax expense 837     839     3,383     2,836  
Other (income) expense, net (90 )   537     (3 )   503  
Interest income, net (665 )   (298 )   (2,155 )   (73 )
Depreciation and amortization 2,313     2,194     6,794     6,312  
Stock-based compensation 1,079     1,903     5,369     2,871  
Adjusted EBITDA $ 2,696     $ 9,184     $ 11,220     $ 24,027  
                               


Reconciliation of GAAP to Non-GAAP Net Income, and GAAP to Non-GAAP Net Income per Share, Basic and Diluted
 
  Three Months Ended September 30,   Nine Months Ended September 30,
  2019   2018   2019   2018
Net income (loss) $ (778 )   $ 4,009     $ (2,168 )   $ 11,578  
Add back:              
Stock-based compensation(1) 1,079     1,903     5,369     2,871  
Non-GAAP net income 301     5,912     3,201     14,449  
               
GAAP weighted average shares outstanding 37,262     35,007     37,005     20,946  
Assumed conversion of convertible preferred stock to common stock             10,781  
Participating securities 444         271      
Non-GAAP weighted average number of shares, basic 37,706     35,007     37,276     31,727  
Dilutive effect of common stock equivalents 4,016     5,325     4,358     5,192  
Non-GAAP weighted average number of shares, diluted 41,722     40,332     41,634     36,919  
               
Non-GAAP net income per share, basic $ 0.01     $ 0.17     $ 0.09     $ 0.46  
Non-GAAP net income per share, diluted $ 0.01     $ 0.15     $ 0.08     $ 0.39  
                               
(1) There is no income tax effect related to the stock-based compensation adjustment due to the full valuation allowance in the U.S.

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