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CST: 21/10/2019 13:23:34   

nLIGHT, Inc. Announces Second Quarter 2019 Results

76 Days ago

Revenues of $48.0 million and gross margin of 33.0% for the second quarter of 2019

VANCOUVER, Wash., Aug. 05, 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 second quarter of 2019.

“During the quarter we saw growing customer interest in Corona, our programmable fiber laser solution, which contributed to the continued growth of our industrial end market outside of China,” commented Scott Keeney, nLIGHT’s President and Chief Executive Officer. “Within the Chinese industrial market, we began ramping sales of our 12kW fiber laser. These developments helped us execute to the financial outlook we provided back in May, despite a challenging environment in China.

“Sales in our microfabrication end market increased following a slower first quarter and aerospace and defense again delivered strong year-over-year growth. Our differentiated technology in each of our end markets positions us well for the favorable long-term trends we see in the adoption of high-power laser-based solutions.”   

Second Quarter 2019 Financial Highlights

  Three Months Ended
June 30,
   
(In thousands, except percentages) 2019   2018   % Change
Revenues $ 48,048     $ 51,705     (7.1 )%
Gross margin 33.0 %   34.2 %    
Income from operations $ 805     $ 5,549     (85.5 )%
Operating margin 1.7 %   10.7 %    
Net income (loss) $ (155 )   $ 4,653     (103.3 )%
Adjusted EBITDA(1) $ 5,455     $ 8,527     (36.0 )%
Adjusted EBITDA, as percentage of revenues 11.4 %   16.5 %    
(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 $48.0 million for the second quarter of 2019 were down 7.1% compared to $51.7 million for the second quarter of 2018. Gross margin was 33.0% for the second quarter of 2019 compared to 34.2% for the second quarter of 2018. GAAP net loss for the second quarter of 2019 was $(0.2) million, or net loss of $0.00 per diluted share, compared to net income of $4.7 million, or net income of $0.11 per diluted share, for the second quarter of 2018. Excluding the impact of stock-based compensation and assuming the conversion of all outstanding convertible preferred stock in the period to common stock, non-GAAP net income for the second quarter of 2019 was $2.2 million, or non-GAAP net income of $0.05 per diluted share, compared to non-GAAP net income of $5.5 million, or non-GAAP net income of $0.14 per diluted share, for the second quarter of 2018.

Outlook

For the third quarter of 2019, nLIGHT expects revenues to be in the range of $42.0 million to $46.0 million, gross margin to be in the range of 29.0% to 32.0%, and Adjusted EBITDA to be in the range of $2.0 million to $4.0 million.

Investor Conference Call at 2:00 p.m. Pacific Time, Monday, August 5, 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 Second 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 also contains non-GAAP financial results, including Adjusted EBITDA, non-GAAP net income and non-GAAP net income per share, basic and diluted. Adjusted EBITDA, a non-GAAP financial metric, is used 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 it gives 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, which we believe to be an informative view of our results during the period.

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

We have not reconciled expectations of net income to 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 and Section 21E of the Securities Exchange Act of 1934 and the Private Securities Litigation Reform Act of 1995. Words such as “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, our expectations to grow faster than the overall high-power laser market, as well as any other statement that does not directly relate to any historical or current fact. Forward-looking statements are based on 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 as our operating costs increase, (2) the risk that our revenue growth rate in recent periods may not be indicative of our future performance, (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 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, 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 Securities and Exchange Commission. 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 1,100 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
June 30,
  Six Months Ended
June 30,
  2019   2018   2019   2018
Revenues $ 48,048     $ 51,705     $ 89,909     $ 94,172  
Cost of revenues(1)   32,177       34,026       60,524       61,764  
Gross profit   15,871       17,679       29,385       32,408  
Operating expenses:                              
Research and development(1)   6,494       4,898       12,916       9,181  
Sales, general, and administrative(1)   8,572       7,232       16,716       13,470  
Total operating expenses   15,066       12,130       29,632       22,651  
Income (loss) from operations   805       5,549       (247 )     9,757  
Other income (expense):                              
Interest income (expense), net   740       (6 )     1,490       (225 )
Other income (expense), net   (907 )     (42 )     (87 )     34  
Income before income taxes   638       5,501       1,156       9,566  
Income tax expense   793       848       2,546       1,997  
Net income (loss) $ (155 )   $ 4,653     $ (1,390 )   $ 7,569  
Less: Income allocated to participating securities         (1,499 )           (4,415 )
Net income (loss) attributable to common stockholders $ (155 )   $ 3,154     $ (1,390 )   $ 3,154  
Net income (loss) per share, basic $     $ 0.13     $ (0.04 )   $ 0.23  
Net income (loss) per share, diluted $     $ 0.11     $ (0.04 )   $ 0.17  
Shares used in per share calculations:                              
Basic   37,065       24,491       36,880       13,761  
Diluted   37,065       29,756       36,880       18,797  
 
(1)Includes stock-based compensation as follows:
 


  Three Months Ended
June 30,

  Six Months Ended
June 30,

  2019
  2018
  2019
  2018
Cost of revenues $ 267     $ 62     $ 476     $ 84  
Research and development   711       200       1,269       225  
Sales, general and administrative   1,403       544       2,545       659  
  $ 2,381     $ 806     $ 4,290     $ 968  


 
nLIGHT, Inc.
Consolidated Balance Sheets
(In thousands)
(Unaudited)
 
  June 30,   December 31,
  2019   2018
Assets      
Current assets:      
Cash and cash equivalents $ 142,661     $ 149,478  
Accounts receivable, net 30,752     26,528  
Inventory 42,285     35,329  
Prepaid expenses and other current assets 4,107     7,286  
Total current assets 219,805     218,621  
Property and equipment, net 24,650     21,462  
Intangible assets, net 2,971     2,686  
Goodwill 1,387     1,387  
Other assets 6,776     5,974  
Total assets $ 255,589     $ 250,130  
       
Liabilities and Stockholders’ Equity      
Current liabilities:      
Accounts payable $ 13,360     $ 12,068  
Accrued liabilities 10,693     10,708  
Deferred revenues 582     720  
Current portion of long-term debt 78     91  
Total current liabilities 24,713     23,587  
Non-current income taxes payable 6,854     6,472  
Long-term debt 17     18  
Other long-term liabilities 2,068     2,270  
Total liabilities 33,652     32,347  
Stockholders' equity:      
Preferred stock - par value      
Common stock - par value 15     15  
Additional paid-in capital 329,982     324,656  
Accumulated other comprehensive loss (2,100 )   (2,157 )
Accumulated deficit (105,960 )   (104,731 )
Total stockholders’ equity 221,937     217,783  
Total liabilities and stockholders’ equity $ 255,589     $ 250,130  


 
nLIGHT, Inc.
Condensed Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
 
  Six Months Ended June 30,
  2019   2018
Cash flows from operating activities:      
Net income (loss) $ (1,390 )   $ 7,569  
Adjustments to reconcile net income (loss) to net cash used in operating activities:      
Depreciation 3,205     2,936  
Amortization 1,276     1,182  
Provision for losses on accounts receivable 33     183  
Stock-based compensation 4,290     968  
Loss on disposal of property and equipment 5     11  
Changes in operating assets and liabilities:      
Accounts receivable, net (4,334 )   (8,711 )
Inventory (6,987 )   (5,644 )
Prepaid expenses and other current assets 3,192     (3,458 )
Other assets (1,800 )   (1,226 )
Accounts payable 1,111     3,539  
Other changes 216     306  
Net cash used in operating activities (1,183 )   (2,345 )
Cash flows from investing activities:      
Purchases of property, equipment and intangibles (6,916 )   (5,789 )
Proceeds from sale of property and equipment     8  
Net cash used in investing activities (6,916 )   (5,781 )
Cash flows from financing activities:      
Principal payments on debt and capital leases (50 )   (74 )
Proceeds from public offering, net of offering costs     101,486  
Proceeds from employee stock plan purchases 762      
Proceeds from stock option exercises 915     123  
Tax payments related to stock award issuances (480 )    
Net cash provided by financing activities 1,147     101,535  
Effect of exchange rate changes on cash 135     (371 )
Net increase (decrease) in cash and cash equivalents (6,817 )   93,038  
Cash and cash equivalents, beginning of period 149,478     36,687  
Cash and cash equivalents, end of period $ 142,661     $ 129,725  


 
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
June 30,
  Six Months Ended
June 30,
  2019   2018   2019   2018
Net income (loss) $ (155 )   $ 4,653     $ (1,390 )   $ 7,569  
Income tax expense 793     848     2,546     1,997  
Other (income) expense, net 907     42     87     (34 )
Interest (income) expense, net (740 )   6     (1,490 )   225  
Depreciation and amortization 2,269     2,172     4,481     4,118  
Stock-based compensation 2,381     806     4,290     968  
Adjusted EBITDA $ 5,455     $ 8,527     $ 8,524     $ 14,843  


 
Reconciliation of GAAP to Non-GAAP Net Income, and GAAP to Non-GAAP Net Income per Share, Basic and Diluted
 
  Three Months Ended
June 30,
  Six Months Ended
June 30,
  2019   2018   2019   2018
Net income (loss) $ (155 )   $ 4,653     $ (1,390 )   $ 7,569  
Add back:              
Stock-based compensation(1) 2,381     806     4,290     968  
Non-GAAP net income 2,226     5,459     2,900     8,537  
               
GAAP weighted average shares outstanding 37,065     24,491     36,880     13,761  
Assumed conversion of convertible preferred stock to common stock     7,940         16,291  
Non-GAAP weighted average number of shares, basic 37,065     32,431     36,880     30,052  
Dilutive effect of common stock equivalents 4,391     5,265     4,487     5,036  
Non-GAAP weighted average number of shares, diluted 41,456     37,696     41,367     35,088  
               
Non-GAAP net income per share, basic $ 0.06     $ 0.17     $ 0.08     $ 0.28  
Non-GAAP net income per share, diluted $ 0.05     $ 0.14     $ 0.07     $ 0.24  
 
(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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