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nLIGHT, Inc. Announces Second Quarter 2021 Results

08/05/2021

Revenues of $69.1 million and gross margin of 29.4% for the second quarter of 2021

CAMAS, 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 second quarter of 2021.

“Growth in all three of our end markets resulted in record revenue in the second quarter, which exceeded the top end of our guidance range,” commented Scott Keeney, nLIGHT’s President and Chief Executive Officer. “Further adoption of our innovative high-power fiber lasers led to record revenue from Industrial customers outside of China, and increased global demand for our industry-leading semiconductor lasers resulted in significant growth in Microfabrication. We also increased our Aerospace & Defense revenue by 57% year-over-year, and we continue to make excellent progress in Directed Energy.”

Mr. Keeney continued, “We were pleased with our execution during the quarter. Revenue increased 33% year-over- year and our gross margins improved by more than 400 basis points versus Q2 2020. Despite an increasingly challenging supply chain our business remains strong and we are optimistic about our prospects in the second half of 2021.”

Second Quarter 2021 Financial Highlights

Three Months Ended
June 30,

 

(In thousands, except percentages)

 

2021

 

 

2020

 

% Change

Revenues

$

69,113

 

$

52,138

 

32.6

%

Gross margin

 

29.4

%

 

25.0

%

 

Loss from operations

$

(9,014

)

$

(6,049

)

(49.0

)%

Operating margin

 

(13.0

)%

 

(11.6

)%

 

Net loss

$

(7,890

)

$

(6,830

)

(15.5

)%

Adjusted EBITDA(1)

$

6,287

 

$

3,256

 

93.1

%

Adjusted EBITDA, as percentage of revenues

 

9.1

%

 

6.2

%

 

(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 $69.1 million for the second quarter of 2021 were up 32.6% compared to $52.1 million for the second quarter of 2020. Gross margin was 29.4% for the second quarter of 2021 compared to 25.0% for the second quarter of 2020. GAAP net loss for the second quarter of 2021 was $(7.9) million, or net loss of $(0.19) per diluted share, compared to net loss of $(6.8) million, or net loss of $(0.18) per diluted share, for the second quarter of 2020. Non- GAAP net income for the second quarter of 2021 was $4.4 million, or non-GAAP net income of $0.09 per diluted share, compared to non-GAAP net loss of $(0.1) million, or non-GAAP net loss of $0.00 per diluted share, for the second quarter of 2020. 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 third quarter of 2021, nLIGHT expects revenues to be in the range of $68 million to $74 million, gross margin to be in the range of 26% to 30%, and Adjusted EBITDA to be in the range of $4 million to $7 million.

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.

Investor Conference Call at 2:00 p.m. Pacific Time, Thursday, August 5, 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 Second Quarter 2021 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 (benefit), other non-operating income or expense, interest income or expense, depreciation and amortization, stock-based compensation, acquisition and integration-related costs, and other non-recurring 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 non- recurring 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 weighted-average shares outstanding during the respective period plus the dilutive effect of any common stock equivalents during the period in the case of non- GAAP net income (loss) per share, diluted.

Tables presenting the reconciliation of net loss to Adjusted EBITDA, as well as the reconciliation of GAAP to non- GAAP net income (loss) and GAAP to non-GAAP net income (loss) per share, basic and diluted, are included at the end of this press release.

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, 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 from these forward-looking statements, including but not limited to: (1) our ability to compete successfully in the markets for our products, (2) changes in the markets we serve or in the global economy, (3) our ability to increase our volumes and decrease our costs to offset potential declines in the average selling prices of our products, (4) rapid technological change in the markets that we participate in and our ability to develop and maintain products that can achieve market acceptance, (5) our ability to generate sufficient revenues to achieve or maintain profitability in the future, (6) our high levels of fixed costs and inventory and their effect on our gross profits and results of operations if demand for our products declines or we maintain excess inventory levels, (7) disruptions including pandemics, such as COVID-19, and their effect on our business, financial condition, or results of operations, (8) our manufacturing capacity and operations and their suitability for future levels of demand, (9) our reliance on a small number of customers for a significant portion of our revenues, and (10) our ability to manage risks associated with international customers and operations, (11) the effect of current and potential tariffs and global trade policies on the cost of our products, (12) our ability to protect our proprietary technology and intellectual property rights, and (13) fluctuations in our quarterly results of operations and other operating measures. 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 Camas, 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
June 30,

Six Months Ended
June 30,

 

2021

2020

2021

2020

Revenue:

 

 

 

 

Products

$

53,561

 

$

45,104

 

$

100,896

 

$

82,034

 

Development

 

15,552

 

 

7,034

 

 

29,562

 

 

13,319

 

Total revenue

 

69,113

 

 

52,138

 

 

130,458

 

 

95,353

 

Cost of revenue:

Products

 

34,240

 

 

32,597

 

 

64,635

 

 

60,497

 

Development

 

14,548

 

 

6,485

 

 

27,853

 

 

12,299

 

Total cost of revenue(1)

 

48,788

 

 

39,082

 

 

92,488

 

 

72,796

 

Gross profit

 

20,325

 

 

13,056

 

 

37,970

 

 

22,557

 

Operating expenses:

 

 

 

 

Research and development(1)

 

14,282

 

 

9,472

 

 

25,992

 

 

18,010

 

Sales, general, and administrative(1)

 

15,057

 

 

9,633

 

 

26,771

 

 

17,333

 

Total operating expenses

 

29,339

 

 

19,105

 

 

52,763

 

 

35,343

 

Loss from operations

 

(9,014

)

 

(6,049

)

 

(14,793

)

 

(12,786

)

Other income (expense):

Interest income (expense), net

 

(32

)

 

(65

)

 

(106

)

 

218

 

Other income (expense), net

 

118

 

 

(298

)

 

144

 

 

(414

)

Income (loss) before income taxes

 

(8,928

)

 

(6,412

)

 

(14,755

)

 

(12,982

)

Income tax expense (benefit)

 

(1,038

)

 

418

 

 

(716

)

 

1,323

 

Net loss

$

(7,890

)

$

(6,830

)

$

(14,039

)

$

(14,305

)

Net loss per share, basic

$

(0.19

)

$

(0.18

)

$

(0.34

)

$

(0.38

)

Net loss per share, diluted

$

(0.19

)

$

(0.18

)

$

(0.34

)

$

(0.38

)

Shares used in per share calculations:

 

 

 

 

Basic

 

42,313

 

 

38,177

 

 

41,187

 

 

38,003

 

Diluted

 

42,313

 

 

38,177

 

 

41,187

 

 

38,003

 

(1)Includes stock-based compensation as follows:

Three Months Ended
June 30,

 

Six Months Ended
June 30,

 

 

2021

 

 

2020

 

 

2021

 

 

2020

Cost of revenues

$

549

$

339

$

1,040

$

684

Research and development

 

3,708

 

2,275

 

6,626

 

4,057

Sales, general, and administrative

 

7,349

 

3,423

 

11,994

 

5,059

 

$

11,606

$

6,037

$

19,660

$

9,800

nLIGHT, Inc.

Condensed Consolidated Balance Sheets (In thousands)

(Unaudited)

 

 

As of

 

June 30, 2021

December 31, 2020

Assets

Current assets:

Cash and cash equivalents

$ 175,364

$ 102,282

Accounts receivable, net

36,829

31,820

Inventory

63,296

54,706

Prepaid expenses and other current assets

11,568

11,767

Total current assets

287,057

200,575

Restricted cash

250

291

Lease right-of-use assets

17,887

12,302

Property and equipment, net

49,378

44,480

Intangible assets, net

6,519

8,345

Goodwill

12,457

12,484

Other assets, net

5,026

5,167

Total assets

$ 378,574

$ 283,644

 

 

 

Liabilities and Stockholders’ Equity

 

 

Current liabilities:

Accounts payable

$ 25,677

$

21,057

Accrued liabilities

15,564

 

15,321

Deferred revenue

2,666

 

2,528

Lease liabilities

2,921

 

2,273

Current portion of long-term debt

 

184

Total current liabilities

46,828

 

41,363

Non-current income taxes payable

6,882

 

7,556

Long-term lease liabilities

15,505

 

10,375

Long-term debt

30

 

215

Other long-term liabilities

4,683

 

4,221

Total liabilities

73,928

 

63,730

Stockholders' equity:

 

 

 

Common stock - par value

15

 

15

Additional paid-in capital

457,480

 

358,544

Accumulated other comprehensive loss

(424)

 

(259)

Accumulated deficit

(152,425)

 

(138,386)

Total stockholders’ equity

304,646

219,914

Total liabilities and stockholders’ equity

$ 378,574

$ 283,644

nLIGHT, Inc.

Consolidated Statements of Cash Flows (In thousands)

(Unaudited)

 

 

Six Months Ended June 30,

 

2021

2020

Cash flows from operating activities:

 

 

Net loss

$ (14,039)

$ (14,305)

 

Adjustments to reconcile net loss to net cash provided by operating activities:

 

 

Depreciation

4,290

3,614

Amortization

3,122

2,815

Reduction in carrying amount of right-of-use assets

1,632

1,425

Provision for (recoveries of) losses on accounts receivable

(72)

62

Stock-based compensation

19,660

9,800

Deferred income taxes

(11)

Loss on disposal of assets

3

Changes in operating assets and liabilities:

 

 

Accounts receivable, net

(4,849)

3,012

Inventory

(8,611)

(4,457)

Prepaid expenses and other current assets

175

(1,801)

Other assets

(905)

(2,131)

Accounts payable

3,335

7,400

Accrued and other long-term liabilities

1,347

1,243

Deferred revenues

133

1,519

Lease liabilities

(1,404)

(1,428)

Non-current income taxes payable

(721)

234

Net cash provided by operating activities

3,085

7,002

Cash flows from investing activities:

 

 

Acquisition of business, net of cash acquired

(291)

Purchases of property, plant and equipment

(7,962)

(17,040)

Capitalization of patents

(216)

(628)

Net cash used in investing activities

(8,469)

(17,668)

Cash flows from financing activities:

 

 

Proceeds from public offerings, net of offering costs

82,354

Proceeds from term loan

15,000

Principal payments on debt and financing leases

(399)

(45)

Payment of contingent consideration related to acquisition

(326)

Proceeds from employee stock plan purchases

750

685

Proceeds from stock option exercises

770

857

Tax payments related to stock award issuances

(4,598)

(2,157)

Net cash provided by financing activities

78,551

14,340

Effect of exchange rate changes on cash

(126)

(27)

Net increase in cash, cash equivalents and restricted cash

73,041

3,647

Cash, cash equivalents and restricted cash, beginning of period

102,573

117,293

Cash, cash equivalents and restricted cash, end of period

$ 175,614

$ 120,940

Supplemental disclosures:

 

 

Cash paid (received) for interest, net

$ 103

$ (316)

Cash paid for income taxes

393

1,015

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

7,224

12,408

Accrued purchases of property, equipment and patents

2,139

993

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
June 30,

Six Months Ended
June 30,

 

 

2021

 

 

2020

 

 

2021

 

 

2020

 

Net loss

$

(7,890

)

$

(6,830

)

$

(14,039

)

$

(14,305

)

Income tax expense (benefit)

 

(1,038

)

 

418

 

 

(716

)

 

1,323

 

Other (income) expense, net

 

(118

)

 

298

 

 

(144

)

 

414

 

Interest (income) expense, net

 

32

 

 

65

 

 

106

 

 

(218

)

Depreciation and amortization

 

3,695

 

 

3,268

 

 

7,412

 

 

6,429

 

Stock-based compensation

 

11,606

 

 

6,037

 

 

19,660

 

 

9,800

 

Acquisition and integration-related costs

 

 

 

 

 

 

 

50

 

Adjusted EBITDA

$

6,287

 

$

3,256

 

$

12,279

 

$

3,493

 

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
June 30,

Six Months Ended
June 30,

 

 

2021

 

 

2020

 

 

2021

 

 

2020

 

Net loss

$

(7,890

)

$

(6,830

)

$

(14,039

)

$

(14,305

)

Add back:

 

 

 

 

Stock-based compensation(1)

 

11,606

 

 

6,037

 

 

19,660

 

 

9,800

 

Amortization of purchased intangibles

 

718

 

 

656

 

 

1,435

 

 

1,312

 

Acquisition and integration-related costs

 

 

 

 

 

 

 

50

 

Non-GAAP net income (loss)

 

4,434

 

 

(137

)

 

7,056

 

 

(3,143

)

 

 

 

 

 

GAAP weighted average shares outstanding

 

42,313

 

 

38,177

 

 

41,187

 

 

38,003

 

Participating securities

 

614

 

 

 

 

633

 

 

 

Non-GAAP weighted average number of shares, basic

 

42,927

 

 

38,177

 

 

41,820

 

 

38,003

 

Dilutive effect of common stock equivalents

 

4,334

 

 

 

 

4,462

 

 

 

Non-GAAP weighted average number of shares, diluted

 

47,261

 

 

38,177

 

 

46,282

 

 

38,003

 

 

 

 

 

 

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

$

0.10

 

$

0.00

 

$

0.17

 

$

(0.08

)

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

$

0.09

 

$

0.00

 

$

0.15

 

$

(0.08

)

(1) There is no income tax effect related to the stock-based compensation adjustment 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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