nLIGHT Announces Third Quarter 2019 Results
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 WilleyInvestor Relations and Corporate DevelopmentnLIGHT, Inc.(360) 567-4890[email protected]
| 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. | |||||||||||||||
