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nLIGHT, Inc. Announces Third Quarter 2021 Results

11/04/2021

Revenues of $72.2 million and gross margin of 29.6% for the third 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 third quarter of 2021.

“nLIGHT delivered another record revenue quarter and generated the highest products gross margin in our history as a public company,” commented Scott Keeney, nLIGHT’s President and Chief Executive Officer. “We increased revenue year-over-year in each of our end markets as demand for both our semiconductor and fiber lasers was strong throughout the quarter. Our performance in the third quarter reflects the execution of our strategy to increase our focus on customers outside of China and the diversity in our revenue base.”

Mr. Keeney continued, “As a result of a 17% year-over-year increase in revenue combined with a higher mix of business coming from outside of China, we increased our products gross margins by 490 basis year-over-year to a record 37.1%. Assuming the midpoint of our Q4 revenue guidance, we are again on track to deliver more than 20% year-over-year growth.”

Third Quarter 2021 Financial Highlights

 

Three Months Ended

September 30,

 

 

(In thousands, except percentages)

2021

 

2020

 

% Change

Revenues

$

72,235

 

 

$

61,732

 

 

17.0

%

Gross margin

29.6

%

 

27.8

%

 

 

Loss from operations

$

(6,759

)

 

$

(3,976

)

 

(70.0

)%

Operating margin

(9.4

)%

 

(6.4

)%

 

 

Net loss

$

(6,880

)

 

$

(2,110

)

 

(226.1

)%

Adjusted EBITDA(1)

$

7,212

 

 

$

6,211

 

 

16.1

%

Adjusted EBITDA, as percentage of revenues

10.0

%

 

10.1

%

 

 

(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.

Revenues of $72.2 million for the third quarter of 2021 were up 17.0% compared to $61.7 million for the third quarter of 2020. Gross margin was 29.6% for the third quarter of 2021 compared to 27.8% for the third quarter of 2020. GAAP net loss for the third quarter of 2021 was $(6.9) million, or net loss of $(0.16) per diluted share, compared to net loss of $(2.1) million, or net loss of $(0.05) per diluted share, for the third quarter of 2020. Non-GAAP net income for the third quarter of 2021 was $3.9 million, or non-GAAP net income of $0.08 per diluted share, compared to non-GAAP net income of $5.3 million, or non-GAAP net income of $0.12 per diluted share, for the third 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 fourth quarter of 2021, nLIGHT expects revenues to be in the range of $66 million to $72 million, gross margin to be in the range of 25% to 28%, and Adjusted EBITDA to be in the range of $3 million to $5 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, November 4, 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 Third 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 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 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 loss 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 and year-over-year revenue growth, 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

September 30,

 

Nine Months Ended

September 30,

 

2021

 

2020

 

2021

 

2020

Revenue:

 

 

 

 

 

 

 

Products

$

54,393

 

 

$

51,117

 

 

$

155,289

 

 

$

133,151

 

Development

17,842

 

 

10,615

 

 

47,404

 

 

23,934

 

Total revenue

72,235

 

 

61,732

 

 

202,693

 

 

157,085

 

Cost of revenue:

 

 

 

 

 

 

 

Products

34,193

 

 

34,645

 

 

98,828

 

 

95,142

 

Development

16,647

 

 

9,927

 

 

44,500

 

 

22,226

 

Total cost of revenue(1)

50,840

 

 

44,572

 

 

143,328

 

 

117,368

 

Gross profit

21,395

 

 

17,160

 

 

59,365

 

 

39,717

 

Operating expenses:

 

 

 

 

 

 

 

Research and development(1)

14,838

 

 

11,126

 

 

40,830

 

 

29,136

 

Sales, general, and administrative(1)

13,316

 

 

10,010

 

 

40,087

 

 

27,343

 

Total operating expenses

28,154

 

 

21,136

 

 

80,917

 

 

56,479

 

Loss from operations

(6,759

)

 

(3,976

)

 

(21,552

)

 

(16,762

)

Other income (expense):

 

 

 

 

 

 

 

Interest income (expense), net

(20

)

 

(96

)

 

(126

)

 

122

 

Other income, net

102

 

 

477

 

 

246

 

 

63

 

Loss before income taxes

(6,677

)

 

(3,595

)

 

(21,432

)

 

(16,577

)

Income tax expense (benefit)

203

 

 

(1,485

)

 

(513

)

 

(162

)

Net loss

$

(6,880

)

 

$

(2,110

)

 

$

(20,919

)

 

$

(16,415

)

Net loss per share, basic

$

(0.16

)

 

$

(0.05

)

 

$

(0.50

)

 

$

(0.43

)

Net loss per share, diluted

$

(0.16

)

 

$

(0.05

)

 

$

(0.50

)

 

$

(0.43

)

Shares used in per share calculations:

 

 

 

 

 

 

 

Basic

42,884

 

 

38,558

 

 

41,759

 

 

38,195

 

Diluted

42,884

 

 

38,558

 

 

41,759

 

 

38,195

 

(1)Includes stock-based compensation as follows:

 

Three Months Ended

September 30,

 

Nine Months Ended

September 30,

 

2021

 

2020

 

2021

 

2020

Cost of revenues

$

740

 

 

$

505

 

 

$

1,780

 

 

$

1,189

 

Research and development

3,782

 

 

2,545

 

 

10,408

 

 

6,602

 

Sales, general, and administrative

5,550

 

 

3,633

 

 

17,544

 

 

8,692

 

 

$

10,072

 

 

$

6,683

 

 

$

29,732

 

 

$

16,483

 

nLIGHT, Inc.

Condensed Consolidated Balance Sheets

(In thousands)

(Unaudited)

 

 

As of

 

September 30, 2021

 

December 31, 2020

Assets

 

 

 

Current assets:

 

 

 

Cash and cash equivalents

$

165,584

 

 

$

102,282

 

Accounts receivable, net

36,490

 

 

31,820

 

Inventory

70,683

 

 

54,706

 

Prepaid expenses and other current assets

17,267

 

 

11,767

 

Total current assets

290,024

 

 

200,575

 

Restricted cash

250

 

 

291

 

Lease right-of-use assets

17,187

 

 

12,302

 

Property and equipment, net

52,303

 

 

44,480

 

Intangible assets, net

5,580

 

 

8,345

 

Goodwill

12,437

 

 

12,484

 

Other assets, net

4,190

 

 

5,167

 

Total assets

$

381,971

 

 

$

283,644

 

 

 

 

 

Liabilities and Stockholders’ Equity

 

 

 

Current liabilities:

 

 

 

Accounts payable

$

31,868

 

 

$

21,057

 

Accrued liabilities

15,742

 

 

15,321

 

Deferred revenue

1,607

 

 

2,528

 

Lease liabilities

2,858

 

 

2,273

 

Current portion of long-term debt

 

 

184

 

Total current liabilities

52,075

 

 

41,363

 

Non-current income taxes payable

6,988

 

 

7,556

 

Long-term lease liabilities

14,921

 

 

10,375

 

Long-term debt

 

 

215

 

Other long-term liabilities

3,989

 

 

4,221

 

Total liabilities

77,973

 

 

63,730

 

Stockholders' equity:

 

 

 

Common stock - par value

15

 

 

15

 

Additional paid-in capital

464,090

 

 

358,544

 

Accumulated other comprehensive loss

(802

)

 

(259

)

Accumulated deficit

(159,305

)

 

(138,386

)

Total stockholders’ equity

303,998

 

 

219,914

 

Total liabilities and stockholders’ equity

$

381,971

 

 

$

283,644

 

nLIGHT, Inc.

Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)

 

 

Nine Months Ended

September 30,

 

2021

 

2020

Cash flows from operating activities:

 

 

 

Net loss

$

(20,919

)

 

$

(16,415

)

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

 

 

 

Depreciation

6,670

 

 

5,614

 

Amortization

4,641

 

 

4,319

 

Reduction in carrying amount of right-of-use assets

2,435

 

 

2,162

 

Provision for (recoveries of) losses on accounts receivable

(70

)

 

84

 

Stock-based compensation

29,732

 

 

16,483

 

Deferred income taxes

(11

)

 

 

Loss on disposal of assets

3

 

 

 

Changes in operating assets and liabilities:

 

 

 

Accounts receivable, net

(4,580

)

 

4,094

 

Inventory

(16,169

)

 

(6,411

)

Prepaid expenses and other current assets

(5,542

)

 

(4,753

)

Other assets

(437

)

 

(2,418

)

Accounts payable

9,699

 

 

10,565

 

Accrued and other long-term liabilities

907

 

 

1,494

 

Deferred revenues

(925

)

 

1,405

 

Lease liabilities

(2,156

)

 

(2,120

)

Non-current income taxes payable

(591

)

 

591

 

Net cash provided by operating activities

2,687

 

 

14,694

 

Cash flows from investing activities:

 

 

 

Acquisition of business, net of cash acquired

(291

)

 

(168

)

Purchases of property, plant and equipment

(13,636

)

 

(19,395

)

Capitalization of patents

(303

)

 

(717

)

Net cash used in investing activities

(14,230

)

 

(20,280

)

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

(428

)

 

(15,126

)

Payment of contingent consideration related to acquisition

(326

)

 

 

Proceeds from employee stock plan purchases

750

 

 

685

 

Proceeds from stock option exercises

975

 

 

1,117

 

Tax payments related to stock award issuances

(8,265

)

 

(3,314

)

Net cash provided by (used in) financing activities

75,060

 

 

(1,638

)

Effect of exchange rate changes on cash

(256

)

 

373

 

Net increase (decrease) in cash, cash equivalents and restricted cash

63,261

 

 

(6,851

)

Cash, cash equivalents and restricted cash, beginning of period

102,573

 

 

117,294

 

Cash, cash equivalents and restricted cash, end of period

$

165,834

 

 

$

110,443

 

Supplemental disclosures:

 

 

 

Cash paid (received) for interest, net

$

116

 

 

$

(312

)

Cash paid for income taxes

434

 

 

1,015

 

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

7,348

 

 

13,470

 

Accrued purchases of property, equipment and patents

2,287

 

 

1,294

 

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

September 30,

 

Nine Months Ended

September 30,

 

2021

 

2020

 

2021

 

2020

Net loss

$

(6,880

)

 

$

(2,110

)

 

$

(20,919

)

 

$

(16,415

)

Income tax expense (benefit)

203

 

 

(1,485

)

 

(513

)

 

(162

)

Other income, net

(102

)

 

(477

)

 

(246

)

 

(63

)

Interest (income) expense, net

20

 

 

96

 

 

126

 

 

(122

)

Depreciation and amortization

3,899

 

 

3,504

 

 

11,311

 

 

9,933

 

Stock-based compensation

10,072

 

 

6,683

 

 

29,732

 

 

16,483

 

Acquisition and integration-related costs

 

 

 

 

 

 

50

 

Adjusted EBITDA

$

7,212

 

 

$

6,211

 

 

$

19,491

 

 

$

9,704

 

 

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

September 30,

 

Nine Months Ended

September 30,

 

2021

 

2020

 

2021

 

2020

Net loss

$

(6,880

)

 

$

(2,110

)

 

$

(20,919

)

 

$

(16,415

)

Add back:

 

 

 

 

 

 

 

Stock-based compensation(1)

10,072

 

 

6,683

 

 

29,732

 

 

16,483

 

Amortization of purchased intangibles(1)

718

 

 

696

 

 

2,153

 

 

2,008

 

Acquisition and integration-related costs(1)

 

 

 

 

 

 

50

 

Non-GAAP net income

3,910

 

 

5,269

 

 

10,966

 

 

2,126

 

 

 

 

 

 

 

 

 

GAAP weighted average shares outstanding

42,884

 

 

38,558

 

 

41,759

 

 

38,195

 

Participating securities

774

 

 

629

 

 

681

 

 

508

 

Non-GAAP weighted average number of shares, basic

43,658

 

 

39,187

 

 

42,440

 

 

38,703

 

Dilutive effect of common stock equivalents

3,986

 

 

4,290

 

 

4,510

 

 

4,112

 

Non-GAAP weighted average number of shares, diluted

47,644

 

 

43,477

 

 

46,950

 

 

42,815

 

 

 

 

 

 

 

 

 

Non-GAAP net income per share, basic

$

0.09

 

 

$

0.13

 

 

$

0.26

 

 

$

0.05

 

Non-GAAP net income per share, diluted

$

0.08

 

 

$

0.12

 

 

$

0.23

 

 

$

0.05

 

(1) There is no income tax effect related to the stock-based compensation, acquisition and integration-related costs, and amortization of purchased intangibles 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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