Attached files
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| 8-K - 8-K - NLIGHT, INC. | nlight2018q38k.htm |
Exhibit 99.1
For more information contact:
Jason Willey
Investor Relations and Corporate Development
nLIGHT, Inc.
(360) 567-4890
jason.willey@nlight.net
nLIGHT, INC. ANNOUNCES THIRD QUARTER 2018 RESULTS
Revenues of $51.0 million and Gross Margin of 35.4%
VANCOUVER, Wash., November 5, 2018 - 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 2018. These results included:
• | Revenues of $51.0 million, up 39.6% compared to $36.5 million for the third quarter of 2017 |
• | Gross margin of 35.4% compared to 33.8% for the third quarter of 2017 |
• | Income from operations of $5.1 million, or 10.0% of revenues, compared to $4.6 million, or 12.6% of revenues, for the third quarter of 2017 |
GAAP net income for the third quarter of 2018 was $4.0 million, or net income of $0.10 per diluted common share, compared to $2.2 million, or net income of $0.00 per diluted common share, for the third quarter of 2017. 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 third quarter of 2018 was $5.9 million, or non-GAAP net income of $0.15 per diluted common share, compared to non-GAAP net income of $2.4 million, or non-GAAP net income of $0.08 per diluted common share, for the third quarter of 2017.
“We are pleased with our execution in the quarter despite challenges in the industrial end market in China,” commented Scott Keeney, nLIGHT’s President and Chief Executive Officer. “Our strong third quarter results are a testament to the value proposition customers find in our products and the diverse nature of the end markets we serve. With the recent introduction of our 10kW fiber laser and Corona, the industry’s first programmable fiber laser, we have further enhanced our competitive differentiation and are well positioned to continue to grow faster than the overall high-power laser market.”
Third Quarter 2018 Financial Highlights
Three Months Ended September 30, | ||||||||||
(In thousands, except percentages) | 2018 | 2017 | % Change | |||||||
Revenues | $ | 51,025 | $ | 36,547 | 39.6 | % | ||||
Gross margin | 35.4 | % | 33.8 | % | ||||||
Income from operations | $ | 5,087 | $ | 4,599 | 10.6 | % | ||||
Operating margin | 10.0 | % | 12.6 | % | ||||||
Net income | $ | 4,009 | $ | 2,244 | 78.7 | % | ||||
Adjusted EBITDA(1) | $ | 9,184 | $ | 6,598 | 39.2 | % | ||||
Adjusted EBITDA, as percentage of revenues | 18.0 | % | 18.1 | % | ||||||
(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. | ||||||||||
Outlook
For the fourth quarter of 2018, nLIGHT expects revenues to be in the range of $45.0 million to $49.0 million, gross margin to be in the range of 32.0% to 35.0%, and Adjusted EBITDA in the range of $5.0 million to $7.0 million.
Investor Conference Call at 2:00 p.m. Pacific Time, Monday, November 5, 2018
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 2018 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, net interest expense, 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 outstanding options or warrants 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) our manufacturing capacity and operations may not be appropriate for future levels of demand, (8) our reliance on a small number of customers for a significant portion of our revenues and (9) 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 Registration Statement on Form S-1 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 and “nLIGHT,” 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, Wash., nLIGHT employs over 1,000 people with operations in the U.S., China and Finland. For more information, please visit www.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, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
Revenues | $ | 51,025 | $ | 36,547 | $ | 145,197 | $ | 101,098 | |||||||
Cost of revenues(1) | 32,978 | 24,202 | 94,742 | 69,106 | |||||||||||
Gross profit | 18,047 | 12,345 | 50,455 | 31,992 | |||||||||||
Operating expenses: | |||||||||||||||
Research and development(1) | 5,475 | 3,849 | 14,656 | 11,585 | |||||||||||
Sales, general, and administrative(1) | 7,485 | 3,897 | 20,955 | 13,300 | |||||||||||
Total operating expenses | 12,960 | 7,746 | 35,611 | 24,885 | |||||||||||
Income from operations | 5,087 | 4,599 | 14,844 | 7,107 | |||||||||||
Other expense: | |||||||||||||||
Interest income (expense), net | 298 | (76 | ) | 73 | (1,047 | ) | |||||||||
Other expense | (537 | ) | (1,043 | ) | (503 | ) | (1,840 | ) | |||||||
Income before income taxes | 4,848 | 3,480 | 14,414 | 4,220 | |||||||||||
Income tax expense | 839 | 1,236 | 2,836 | 3,476 | |||||||||||
Net income | $ | 4,009 | $ | 2,244 | $ | 11,578 | $ | 744 | |||||||
Less: Income allocated to participating securities | $ | — | $ | (2,244 | ) | $ | (4,415 | ) | $ | (744 | ) | ||||
Net income attributable to common stockholders | $ | 4,009 | $ | — | $ | 7,163 | $ | — | |||||||
Net income per share, basic | $ | 0.11 | $ | 0.00 | $ | 0.34 | $ | 0.00 | |||||||
Net income per share, diluted | $ | 0.10 | $ | 0.00 | $ | 0.27 | $ | 0.00 | |||||||
Shares used in per share calculations: | |||||||||||||||
Basic | 35,007 | 2,751 | 20,946 | 2,660 | |||||||||||
Diluted | 40,332 | 2,751 | 26,138 | 2,660 | |||||||||||
(1)Includes stock-based compensation as follows: | |||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
Cost of revenues | $ | 183 | $ | 15 | $ | 267 | $ | 30 | |||||||
Research and development | 513 | 18 | 738 | 46 | |||||||||||
Sales, general, and administrative | 1,207 | 76 | 1,866 | 181 | |||||||||||
$ | 1,903 | $ | 109 | $ | 2,871 | $ | 257 | ||||||||
nLIGHT, Inc.
Consolidated Balance Sheets
(In thousands)
(Unaudited)
September 30, | December 31, | ||||||
2018 | 2017 | ||||||
Assets | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 168,182 | $ | 36,687 | |||
Accounts receivable, net | 21,264 | 13,353 | |||||
Inventory | 36,242 | 29,570 | |||||
Prepaid expenses and other current assets | 7,844 | 4,973 | |||||
Total current assets | 233,532 | 84,583 | |||||
Property and equipment, net | 20,311 | 17,968 | |||||
Intangible assets, net | 2,581 | 1,836 | |||||
Goodwill | 1,387 | 1,387 | |||||
Other assets | 4,184 | 4,374 | |||||
Total assets | $ | 261,995 | $ | 110,148 | |||
Liabilities and Stockholders’ Equity | |||||||
Current liabilities: | |||||||
Accounts payable | $ | 13,779 | $ | 12,920 | |||
Accrued liabilities | 11,077 | 12,650 | |||||
Customer advances | 510 | 575 | |||||
Deferred revenue | 133 | 386 | |||||
Current portion of long-term debt | 102 | 2,363 | |||||
Total current liabilities | 25,601 | 28,894 | |||||
Non-current income taxes payable | 4,732 | 3,930 | |||||
Long-term debt | 16,123 | 15,108 | |||||
Other long-term liabilities | 2,119 | 933 | |||||
Total liabilities | 48,575 | 48,865 | |||||
Stockholders' equity: | |||||||
Convertible preferred stock - par value | — | 12 | |||||
Preferred stock - par value | — | — | |||||
Common stock - par value | 15 | 2 | |||||
Additional paid-in capital | 322,478 | 180,657 | |||||
Accumulated other comprehensive loss | (1,982 | ) | (719 | ) | |||
Accumulated deficit | (107,091 | ) | (118,669 | ) | |||
Total stockholders’ equity | 213,420 | 61,283 | |||||
Total liabilities and stockholders’ equity | $ | 261,995 | $ | 110,148 | |||
nLIGHT, Inc.
Select Statements of Cash Flows Data
(In thousands)
(Unaudited)
Nine Months Ended September 30, | |||||||
2018 | 2017 | ||||||
Cash flows from operating activities: | |||||||
Net income | $ | 11,578 | $ | 744 | |||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
Depreciation and amortization | 6,312 | 5,799 | |||||
Provision for losses on accounts receivable | (34 | ) | 175 | ||||
Stock-based compensation | 2,871 | 257 | |||||
Loss on disposal of property and equipment | 11 | 7 | |||||
Loss on debt extinguishment | 12 | 911 | |||||
Changes in operating assets and liabilities: | |||||||
Accounts receivable | (8,382 | ) | (3,972 | ) | |||
Inventory | (7,071 | ) | (7,044 | ) | |||
Prepaid expenses and other current assets | (3,076 | ) | 188 | ||||
Other assets | (1,405 | ) | (390 | ) | |||
Accounts payable | 1,517 | 1,636 | |||||
Other changes | (191 | ) | 1,882 | ||||
Net cash provided by operating activities | 2,142 | 193 | |||||
Cash flows from investing activities: | |||||||
Purchases of property, equipment and intangibles | (8,654 | ) | (3,023 | ) | |||
Proceeds from sale of property and equipment | 8 | 6 | |||||
Net cash used in investing activities | (8,646 | ) | (3,017 | ) | |||
Cash flows from financing activities: | |||||||
Principal payments on debt and capital leases | (17,300 | ) | (15,291 | ) | |||
Net proceeds from debt financing | 16,053 | 12,500 | |||||
Cash paid on debt extinguishment | — | (388 | ) | ||||
Proceeds from public offerings, net of offering costs | 139,089 | — | |||||
Net proceeds from issuance of convertible preferred stock | — | 27,481 | |||||
Payments of deferred offering costs | — | (6 | ) | ||||
Proceeds from stock option exercises | 161 | 278 | |||||
Net cash provided by financing activities | 138,003 | 24,574 | |||||
Effect of exchange rate changes on cash | (4 | ) | 821 | ||||
Net increase in cash and cash equivalents | 131,495 | 22,571 | |||||
Cash and cash equivalents, beginning of period | 36,687 | 13,500 | |||||
Cash and cash equivalents, end of period | $ | 168,182 | $ | 36,071 | |||
nLIGHT, Inc.
Reconciliation of GAAP Financial Metrics to Non-GAAP
(In thousands, except per share data)
(Unaudited)
Reconciliation of Net Income to Adjusted EBITDA
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
Net income | $ | 4,009 | $ | 2,244 | $ | 11,578 | $ | 744 | |||||||
Income tax expense | 839 | 1,236 | 2,836 | 3,476 | |||||||||||
Other expense | 537 | 1,043 | 503 | 1,840 | |||||||||||
Interest (income) expense, net | (298 | ) | 76 | (73 | ) | 1,047 | |||||||||
Depreciation and amortization | 2,194 | 1,890 | 6,312 | 5,799 | |||||||||||
Stock-based compensation | 1,903 | 109 | 2,871 | 257 | |||||||||||
Adjusted EBITDA | $ | 9,184 | $ | 6,598 | $ | 24,027 | $ | 13,163 | |||||||
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, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
Net income | $ | 4,009 | $ | 2,244 | $ | 11,578 | $ | 744 | |||||||
Add back: | |||||||||||||||
Stock-based compensation | 1,903 | 109 | 2,871 | 257 | |||||||||||
Non-GAAP net income | 5,912 | 2,353 | 14,449 | 1,001 | |||||||||||
GAAP weighted average shares outstanding | 35,007 | 2,751 | 20,946 | 2,660 | |||||||||||
Assumed conversion of convertible preferred stock to common stock | — | 24,642 | 10,781 | 22,543 | |||||||||||
Non-GAAP weighted average number of shares, basic | 35,007 | 27,393 | 31,727 | 25,203 | |||||||||||
Dilutive effect of common stock options and warrants | 5,325 | 3,115 | 5,192 | 1,661 | |||||||||||
Non-GAAP weighted average number of shares, diluted | 40,332 | 30,508 | 36,919 | 26,864 | |||||||||||
Non-GAAP net income per share, basic | $ | 0.17 | $ | 0.09 | $ | 0.46 | $ | 0.04 | |||||||
Non-GAAP net income per share, diluted | $ | 0.15 | $ | 0.08 | $ | 0.39 | $ | 0.04 | |||||||