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nLIGHT, Inc. Announces Fourth Quarter and Full Year 2020 Results

02/17/2021

Revenues of $222.8 million and gross margin of 26.6% for the full year 2020

Revenues of $65.7 million and gross margin of 29.9% for the fourth quarter of 2020

VANCOUVER, Wash.--(BUSINESS WIRE)-- 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 fourth quarter and full year 2020.

“In 2020, nLIGHT delivered 26% year-over-year growth, which resulted in the highest annual revenues in the Company’s history,” commented Scott Keeney, nLIGHT’s President and Chief Executive Officer. “We successfully executed our strategy of expanding sales with strategic customers outside of China and in the aerospace and defense market, which included a full year of revenues from our November 2019 acquisition of Nutronics.”

“In the fourth quarter, led by another strong quarter in aerospace and defense, we achieved year-over-year growth in each of our end markets. As a result of higher revenues and a more favorable mix of business, our fourth quarter results exceeded the high-end of our revenue, gross margin and Adjusted EBITDA guidance. Looking forward, we believe we are well positioned to continue to outpace industry growth.”

Full Year 2020 Financial Highlights

 

Year Ended December 31,

 

 

(In thousands, except percentages)

2020

 

2019

 

% Change

Revenues

$

222,789

 

 

$

176,619

 

 

26.1

%

Gross margin

26.6

%

 

29.6

%

 

 

Loss from operations

$

(21,048

)

 

$

(9,909

)

 

(112.4

)%

Operating margin

(9.4

)%

 

(5.6

)%

 

 

Net loss

$

(20,932

)

 

$

(12,884

)

 

(62.5

)%

Adjusted EBITDA(1)

$

18,151

 

 

$

9,855

 

 

84.2

%

Adjusted EBITDA, as percentage of revenues

8.1

%

 

5.6

%

 

 

(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 $222.8 million for the full year 2020 were up 26.1% compared to $176.6 million for the full year 2019. Gross margin was 26.6% for the full year 2020 compared to 29.6% for the full year 2019. GAAP net loss for the full year 2020 was $(20.9) million, or net loss of $(0.55) per diluted share, compared to net loss of $(12.9) million, or net loss of $(0.35) per diluted share, for the full year 2019. Non-GAAP net income for the full year 2020 was $7.3 million, or non-GAAP net income of $0.17 per diluted share, compared to non-GAAP net income of $1.1 million, or non-GAAP net income of $0.03 per diluted share, for the full year 2019. Reconciliations of the non-GAAP information provided here to the most directly comparable GAAP metric have been provided in the financial statement tables included in this release.

Fourth Quarter 2020 Financial Highlights

 

Three Months Ended

December 31,

 

 

(In thousands, except percentages)

2020

 

2019

 

% Change

Revenues

$

65,704

 

 

$

42,896

 

 

53.2

%

Gross margin

29.9

%

 

23.3

%

 

 

Loss from operations

$

(4,286

)

 

$

(8,966

)

 

52.2

%

Operating margin

(6.5

)%

 

(20.9

)%

 

 

Net loss

$

(4,517

)

 

$

(10,716

)

 

57.8

%

Adjusted EBITDA(1)

$

8,447

 

 

$

(1,365

)

 

718.8

%

Adjusted EBITDA, as percentage of revenues

12.9

%

 

(3.2

)%

 

 

(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 $65.7 million for the fourth quarter of 2020 were up 53.2% compared to $42.9 million for the fourth quarter of 2019, which included $2.6 million from Nutronics. Gross margin was 29.9% for the fourth quarter of 2020 compared to 23.3% for the fourth quarter of 2019. GAAP net loss for the fourth quarter of 2020 was $(4.5) million, or net loss of $(0.12) per diluted share, compared to net loss of $(10.7) million, or net loss of $(0.29) per diluted share, for the fourth quarter of 2019. Non-GAAP net income for the fourth quarter of 2020 was $5.2 million, or non-GAAP net income of $0.12 per diluted share, compared to non-GAAP net loss of $(2.1) million, or non-GAAP net loss of $(0.06) per diluted share, for the fourth quarter of 2019. Reconciliations of the non-GAAP information provided here to the most directly comparable GAAP metric have been provided in the financial statement tables included in this release.

Outlook

For the first quarter of 2021, nLIGHT expects revenues to be in the range of $56 million to $62 million, gross margin to be in the range of 25% to 29%, and Adjusted EBITDA to be in the range of $3 million to $6 million.

Investor Conference Call at 2:00 p.m. Pacific Time, Wednesday, February 17, 2021

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 Fourth Quarter 2020 Earnings. The call can also be accessed via the web by going to nLIGHT’s Investor Relations page at http://investors.nlight.net.

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 (loss) and non-GAAP net income (loss) 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 (loss) and non-GAAP net income (loss) per share, basic and diluted, is useful to our investors as they present an informative supplemental view of our results from period to period by removing the effect of stock-based compensation expense and other non-recurring items. 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 (loss) adjusted for income tax expense, other non-operating income or expense, interest income or expense, depreciation and amortization, stock-based compensation, acquisition and integration-related costs, and other special items as determined by management, as applicable. We define non-GAAP net income (loss) as GAAP net income (loss) adjusted for stock-based compensation, amortization of purchased intangibles, acquisition and integration-related costs, and other special items as determined by management, as applicable. We define non-GAAP net income (loss) per share, basic and diluted, as non-GAAP net income (loss) divided by 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 (loss), as well as the reconciliation of non-GAAP net income (loss) and non-GAAP net income (loss) per share, basic and diluted, to net income (loss) and net income (loss) per share, basic and diluted, respectively, 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 and our expectations regarding customer demand for our products, operating results, and financial position, 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) the impact on our sales and operations of public health crises in China, the United States or internationally, including the COVID-19 pandemic, (2) our ability to generate sufficient revenues to achieve or maintain profitability in the future, (3) fluctuations in our quarterly results of operations and other operating measures, (4) downturns in the markets we serve could materially adversely affect our revenues and profitability, (5) 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, (6) the competitiveness of the markets for our products, (7) our substantial sales and operations in China, which expose us to risks inherent in doing business there, (8) the effect of current and potential tariffs and global trade policies on the cost of our products, (9) our manufacturing capacity and operations may not be appropriate for future levels of demand, (10) our reliance on a small number of customers for a significant portion of our revenues, and (11) 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 most recent 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 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, Washington, nLIGHT employs over 1,200 people with operations in the U.S., China, Finland, Korea and Italy. For more information, please visit www.nlight.net.

nLIGHT, Inc.

Consolidated Statements of Operations

(In thousands, except per share data)

(Unaudited)

 

 

Three Months Ended

December 31,

 

Year Ended

December 31,

 

2020

 

2019

 

2020

 

2019

Revenue:

 

 

 

 

 

 

 

Products

$

51,690

 

 

$

40,336

 

 

$

184,841

 

 

$

174,059

 

Development

14,014

 

 

2,560

 

 

37,948

 

 

2,560

 

Total revenue

65,704

 

 

42,896

 

 

222,789

 

 

176,619

 

Cost of revenue:

 

 

 

 

 

 

 

Products

33,113

 

 

30,637

 

 

128,255

 

 

122,013

 

Development

12,944

 

 

2,267

 

 

35,170

 

 

2,267

 

Total cost of revenue(1)

46,057

 

 

32,904

 

 

163,425

 

 

124,280

 

Gross profit

19,647

 

 

9,992

 

 

59,364

 

 

52,339

 

Operating expenses:

 

 

 

 

 

 

 

Research and development(1)

12,028

 

 

8,819

 

 

41,164

 

 

28,137

 

Sales, general, and administrative(1)

11,905

 

 

10,139

 

 

39,248

 

 

34,111

 

Total operating expenses

23,933

 

 

18,958

 

 

80,412

 

 

62,248

 

Loss from operations

(4,286

)

 

(8,966

)

 

(21,048

)

 

(9,909

)

Other income (expense):

 

 

 

 

 

 

 

Interest income (expense), net

(44

)

 

454

 

 

78

 

 

2,609

 

Other income, net

315

 

 

532

 

 

378

 

 

535

 

Loss before income taxes

(4,015

)

 

(7,980

)

 

(20,592

)

 

(6,765

)

Income tax expense

502

 

 

2,736

 

 

340

 

 

6,119

 

Net loss

$

(4,517

)

 

$

(10,716

)

 

$

(20,932

)

 

$

(12,884

)

Net loss per share, basic

$

(0.12

)

 

$

(0.29

)

 

$

(0.55

)

 

$

(0.35

)

Net loss per share, diluted

$

(0.12

)

 

$

(0.29

)

 

$

(0.55

)

 

$

(0.35

)

Shares used in per share calculations:

 

 

 

 

 

 

 

Basic

38,877

 

 

37,463

 

 

38,367

 

 

37,119

 

Diluted

38,877

 

 

37,463

 

 

38,367

 

 

37,119

 

 

(1)Includes stock-based compensation as follows:

 

Three Months Ended

December 31,

 

Year Ended

December 31,

 

2020

 

2019

 

2020

 

2019

Cost of revenues

$

432

 

 

$

385

 

 

$

1,621

 

 

$

1,201

 

Research and development

3,101

 

 

1,606

 

 

9,703

 

 

3,299

 

Sales, general, and administrative

5,448

 

 

2,370

 

 

14,140

 

 

5,230

 

 

$

8,981

 

 

$

4,361

 

 

$

25,464

 

 

$

9,730

 

nLIGHT, Inc.

Condensed Consolidated Balance Sheets

(In thousands)

(Unaudited)

 

 

As of

 

December 31, 2020

 

December 31, 2019

Assets

 

 

 

Current assets:

 

 

 

Cash and cash equivalents

$

102,282

 

 

$

117,252

 

Accounts receivable, net

31,820

 

 

27,126

 

Inventory

54,706

 

 

46,131

 

Prepaid expenses and other current assets

11,767

 

 

8,084

 

Total current assets

200,575

 

 

198,593

 

Restricted cash

291

 

 

41

 

Lease right-of-use assets

12,302

 

 

 

Property, plant and equipment, net

44,480

 

 

27,747

 

Intangible assets, net

8,345

 

 

10,006

 

Goodwill

12,484

 

 

9,872

 

Other assets, net

5,167

 

 

3,707

 

Total assets

$

283,644

 

 

$

249,966

 

 

 

 

 

Liabilities and Stockholders’ Equity

 

 

 

Current liabilities:

 

 

 

Accounts payable

$

21,057

 

 

$

12,700

 

Accrued liabilities

15,321

 

 

11,605

 

Deferred revenue

2,528

 

 

679

 

Current portion of lease liabilities

2,273

 

 

 

Current portion of long-term debt

184

 

 

51

 

Total current liabilities

41,363

 

 

25,035

 

Non-current income taxes payable

7,556

 

 

6,429

 

Long-term lease liabilities

10,375

 

 

 

Long-term debt

215

 

 

 

Other long-term liabilities

4,221

 

 

1,894

 

Total liabilities

63,730

 

 

33,358

 

Stockholders' equity:

 

 

 

Common stock - par value

15

 

 

15

 

Additional paid-in capital

358,544

 

 

336,732

 

Accumulated other comprehensive loss

(259

)

 

(2,685

)

Accumulated deficit

(138,386

)

 

(117,454

)

Total stockholders’ equity

219,914

 

 

216,608

 

Total liabilities and stockholders’ equity

$

283,644

 

 

$

249,966

 

nLIGHT, Inc.

Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)

 

 

Year Ended December 31,

 

2020

 

2019

Cash flows from operating activities:

 

 

 

Net loss

$

(20,932

)

 

$

(12,884

)

Adjustments to reconcile net loss to net cash provided by (used in) operating activities:

 

 

 

Depreciation

7,710

 

 

6,583

 

Amortization

5,975

 

 

2,981

 

Reduction in carrying amount of right-of-use assets

2,916

 

 

 

Provision for losses on accounts receivable

88

 

 

83

 

Stock-based compensation

25,464

 

 

9,730

 

Deferred income taxes

(11

)

 

3,041

 

Gain on disposal of assets

 

 

(483

)

Changes in operating assets and liabilities:

 

 

 

Accounts receivable, net

(4,009

)

 

(395

)

Inventory

(6,937

)

 

(10,670

)

Prepaid expenses and other current assets

(3,442

)

 

(111

)

Other assets

(3,463

)

 

(2,669

)

Accounts payable

7,306

 

 

844

 

Accrued and other long-term liabilities

2,269

 

 

92

 

Deferred revenues

1,800

 

 

(178

)

Lease liabilities

(2,820

)

 

 

Non-current income taxes payable

1,127

 

 

(205

)

Net cash provided by (used in) operating activities

13,041

 

 

(4,241

)

Cash flows from investing activities:

 

 

 

Acquisition of business, net of cash acquired

(190

)

 

(17,400

)

Purchases of property, plant and equipment

(23,416

)

 

(12,403

)

Capitalization of patents

(933

)

 

(1,229

)

Proceeds from sale of assets

 

 

628

 

Net cash used in investing activities

(24,539

)

 

(30,404

)

Cash flows from investing activities:

 

 

 

Proceeds from term loan

15,000

 

 

 

Principal payments on term loans and financing leases

(15,115

)

 

(55

)

Proceeds from employee stock plan purchases

1,393

 

 

1,471

 

Proceeds from stock option exercises

1,375

 

 

1,560

 

Tax payments related to stock award issuances

(6,420

)

 

(524

)

Net cash provided by (used in) financing activities

(3,767

)

 

2,452

 

Effect of exchange rate changes on cash

545

 

 

(33

)

Net decrease in cash, cash equivalents and restricted cash

(14,720

)

 

(32,226

)

Cash, cash equivalents and restricted cash, beginning of period

117,293

 

 

149,519

 

Cash, cash equivalents and restricted cash, end of period

$

102,573

 

 

$

117,293

 

Supplemental disclosures:

 

 

 

Cash received for interest

$

311

 

 

$

2,802

 

Cash paid for income taxes

647

 

 

2,335

 

Accrued purchases of property, equipment and patents

788

 

 

828

 

Accrued acquisition consideration

1,441

 

 

 

Supplemental disclosure of noncash investing and financing activities:

 

 

 

Right-of-use assets obtained in exchange for lease liabilities

$

15,127

 

 

$

 

nLIGHT, Inc.

Reconciliation of GAAP Financial Metrics to Non-GAAP

(In thousands, except per share data)

(Unaudited)

 

Reconciliation of Net Loss to Adjusted EBITDA

 

 

Three Months Ended

December 31,

 

Year Ended

December 31,

 

2020

 

2019

 

2020

 

2019

Net loss

$

(4,517

)

 

$

(10,716

)

 

$

(20,932

)

 

$

(12,884

)

Income tax expense

502

 

 

2,736

 

 

340

 

 

6,119

 

Other income, net

(315

)

 

(532

)

 

(378

)

 

(535

)

Interest (income) expense, net

44

 

 

(454

)

 

(78

)

 

(2,609

)

Depreciation and amortization

3,752

 

 

2,770

 

 

13,685

 

 

9,564

 

Stock-based compensation

8,981

 

 

4,361

 

 

25,464

 

 

9,730

 

Acquisition and integration-related costs

 

 

470

 

 

50

 

 

470

 

Adjusted EBITDA

$

8,447

 

 

$

(1,365

)

 

$

18,151

 

 

$

9,855

 

 

Reconciliation of GAAP to Non-GAAP Net Income (Loss), and GAAP to Non-GAAP Net Income (Loss) per Share, Basic and Diluted

 

 

Three Months Ended

December 31,

 

Year Ended

December 31,

 

2020

 

2019

 

2020

 

2019

Net loss

$

(4,517

)

 

$

(10,716

)

 

$

(20,932

)

 

$

(12,884

)

Add back:

 

 

 

 

 

 

 

Stock-based compensation(1)

8,981

 

 

4,361

 

 

25,464

 

 

9,730

 

Valuation allowance on foreign deferred tax assets

 

 

3,423

 

 

 

 

3,423

 

Amortization of purchased intangibles (1)

716

 

 

328

 

 

2,724

 

 

328

 

Acquisition and integration-related costs (1)

 

 

470

 

 

50

 

 

470

 

Non-GAAP net income (loss)

5,180

 

 

(2,134

)

 

7,306

 

 

1,067

 

 

 

 

 

 

 

 

 

GAAP weighted-average shares outstanding

38,877

 

 

37,463

 

 

38,367

 

 

37,119

 

Participating securities

653

 

 

 

 

544

 

 

319

 

Non-GAAP weighted-average number of shares, basic

39,530

 

 

37,463

 

 

38,911

 

 

37,438

 

Dilutive effect of common stock equivalents

4,654

 

 

 

 

4,228

 

 

4,360

 

Non-GAAP weighted-average number of shares, diluted

44,184

 

 

37,463

 

 

43,139

 

 

41,798

 

 

 

 

 

 

 

 

 

Non-GAAP net income (loss) per share, basic

$

0.13

 

 

$

(0.06

)

 

$

0.19

 

 

$

0.03

 

Non-GAAP net income (loss) per share, diluted

$

0.12

 

 

$

(0.06

)

 

$

0.17

 

 

$

0.03

 

(1)

There is no income tax effect related to the stock-based compensation, amortization of purchased intangibles, and acquisition and integration-related cost adjustments due to the full valuation allowance in the U.S.

 

Joseph Corso
VP, Corporate Development and Investor Relations
nLIGHT, Inc.
(360) 566-4460
joe.corso@nlight.net

Source: nLIGHT, Inc.

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