News Details

nLIGHT, Inc. Announces Fourth Quarter and Full Year 2023 Results

February 22, 2024

Revenues of $209.9 million for the full year 2023

Revenues of $51.9 million for the fourth quarter of 2023

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 2023.

“Driven by strong execution in aerospace & defense, fourth quarter revenue of $51.9 million was above the top end of our guidance range and we ended the year with a 34% year-over-year increase in backlog,” commented Scott Keeney, nLIGHT’s President and Chief Executive Officer.

Mr. Keeney continued, “2023 was a transformative year for nLIGHT. We were awarded multiple large directed energy contracts, secured new commercial design wins, substantially completed the transition of our manufacturing base, and prudently managed operating expenses and working capital.”

“Our full year 2023 financial results reflect the operational improvements we implemented during the year. Products gross margins increased 250 basis points year-over-year on lower revenue levels, and we increased cash, cash equivalents and investments by approximately $5 million to approximately $113 million. We believe our strategic initiatives coupled with operational improvement position us well for long-term profitable growth.”

Full Year 2023 Financial Highlights

 

Year Ended December 31,

 

 

(In thousands, except percentages)

 

2023

 

 

 

2022

 

 

% Change

Revenues

$

209,921

 

 

$

242,058

 

 

(13.3

)%

Gross margin

 

22.0

%

 

 

21.0

%

 

 

Loss from operations

$

(46,766

)

 

$

(55,102

)

 

15.1

%

Operating margin

 

(22.3

)%

 

 

(22.8

)%

 

 

Net loss

$

(41,670

)

 

$

(54,579

)

 

23.7

%

Adjusted EBITDA(1)

$

(4,093

)

 

$

(8,754

)

 

53.2

%

Adjusted EBITDA, as a percentage of revenues

 

(1.9

)%

 

 

(3.6

)%

 

 

(1) A reconciliation of the non-GAAP metrics presented here to the most directly comparable GAAP metric has been provided in the tables included at the end of this release.

Revenues of $209.9 million for the full year 2023 were down 13.3% compared to $242.1 million for the full year 2022. Gross margin was 22.0% for the full year 2023 compared to 21.0% for the full year 2022. GAAP net loss for the full year 2023 was $41.7 million, or $0.90 per diluted share, compared to net loss of $54.6 million, or $1.23 per diluted share, for the full year 2022. Non-GAAP net loss for the full year 2023 was $13.6 million, or $0.30 per diluted share, compared to non-GAAP net loss of $22.3 million, or $0.50 per diluted share, for the full year 2022. Reconciliations of the non-GAAP metrics presented here to the most directly comparable GAAP metric have been provided in the tables included at the end of this release.

Fourth Quarter 2023 Financial Highlights

 

Three Months Ended

December 31,

 

 

(In thousands, except percentages)

 

2023

 

 

 

2022

 

 

% Change

Revenues

$

51,892

 

 

$

56,679

 

 

(8.4

)%

Gross margin

 

18.9

%

 

 

10.2

%

 

 

Loss from operations

$

(14,342

)

 

$

(23,495

)

 

39.0

%

Operating margin

 

(27.6

)%

 

 

(41.5

)%

 

 

Net loss

$

(13,238

)

 

$

(22,659

)

 

41.6

%

Adjusted EBITDA(1)

$

(3,297

)

 

$

(9,502

)

 

65.3

%

Adjusted EBITDA, as a percentage of revenues

 

(6.4

)%

 

 

(16.8

)%

 

 

(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 $51.9 million for the fourth quarter of 2023 were down 8.4% compared to $56.7 million for the fourth quarter of 2022. Gross margin was 18.9% for the fourth quarter of 2023 compared to 10.2% for the fourth quarter of 2022. GAAP net loss for the fourth quarter of 2023 was $13.2 million, or $0.28 per diluted share, compared to GAAP net loss of $22.7 million or $0.50 per diluted share, for the fourth quarter of 2022. Non-GAAP net loss for the fourth quarter of 2023 was $6.0 million, or $0.13 per diluted share, compared to non-GAAP net loss of $12.3 million, or $0.27 per diluted share, for the fourth quarter of 2022. Reconciliations of the non-GAAP metrics presented here to the most directly comparable GAAP metrics have been provided in the tables included at the end of this release.

Outlook

For the first quarter of 2024, nLIGHT expects revenues to be in the range of $42 million to $46 million. The midpoint of $44 million includes Laser Products revenue of approximately $31 million and Advanced Development revenue of approximately $13 million. nLIGHT expects overall gross margin to be in the range of 15% to 20%, with Laser Products gross margin in the range of 20% to 25% and Advanced Development gross margin of approximately 7%. nLIGHT expects Adjusted EBITDA to be in the range of ($7) 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, February 22, 2024

Parties interested in listening to nLIGHT’s quarterly conference call may do so by dialing 1-844-282-4705 (U.S., toll-free) or +1-412-317-5625 (international and toll), with the conference title: nLIGHT Fourth Quarter 2023 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 metrics presented herein are specific to us and may not be comparable to similar metrics 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 the weighted-average number of 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 business strategy and ability to profitably grow our business, 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 our ability to compete successfully in the markets for our products; changes in the markets we serve or in the global economy; our ability to increase our volumes and decrease our costs to offset potential declines in the average selling prices of our products; rapid technological changes in the markets that we participate in; our ability to develop and maintain products that can achieve market acceptance; our ability to generate sufficient revenues to achieve or maintain profitability in the future; 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; our ability to manage growth and spending during economic downturns; our manufacturing capacity and operations and their suitability for future levels of demand; our reliance on third parties to manufacture certain of our products and product components; our reliance on a small number of customers for a significant portion of our revenues; our ability to manage risks associated with international customers and operations; the effect of government export and import controls on our ability to compete in international markets; our ability to protect our proprietary technology and intellectual property rights; fluctuations in our quarterly results of operations and other operating measures; and the effect on our business of claims, lawsuits, government investigations, other legal or regulatory proceedings, or commercial or contractual disputes that we are or may become involved in. 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 1,100 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,

 

 

2023

 

 

 

2022

 

 

 

2023

 

 

 

2022

 

Revenue:

 

 

 

 

 

 

 

Products

$

37,864

 

 

$

45,375

 

 

$

156,666

 

 

$

192,658

 

Development

 

14,028

 

 

 

11,304

 

 

 

53,255

 

 

 

49,400

 

Total revenue

 

51,892

 

 

 

56,679

 

 

 

209,921

 

 

 

242,058

 

Cost of revenue:

 

 

 

 

 

 

 

Products

 

29,368

 

 

 

40,471

 

 

 

114,181

 

 

 

145,272

 

Development

 

12,720

 

 

 

10,425

 

 

 

49,627

 

 

 

45,965

 

Total cost of revenue(1)

 

42,088

 

 

 

50,896

 

 

 

163,808

 

 

 

191,237

 

Gross profit

 

9,804

 

 

 

5,783

 

 

 

46,113

 

 

 

50,821

 

Operating expenses:

 

 

 

 

 

 

 

Research and development(1)

 

12,114

 

 

 

13,558

 

 

 

46,163

 

 

 

53,773

 

Sales, general, and administrative(1)

 

11,215

 

 

 

11,828

 

 

 

45,899

 

 

 

48,258

 

Restructuring

 

817

 

 

 

3,892

 

 

 

817

 

 

 

3,892

 

Total operating expenses

 

24,146

 

 

 

29,278

 

 

 

92,879

 

 

 

105,923

 

Loss from operations

 

(14,342

)

 

 

(23,495

)

 

 

(46,766

)

 

 

(55,102

)

Other income (expense):

 

 

 

 

 

 

 

Interest income (expense), net

 

352

 

 

 

291

 

 

 

1,342

 

 

 

529

 

Other income, net

 

779

 

 

 

446

 

 

 

2,776

 

 

 

338

 

Loss before income taxes

 

(13,211

)

 

 

(22,758

)

 

 

(42,648

)

 

 

(54,235

)

Income tax expense (benefit)

 

27

 

 

 

(99

)

 

 

(978

)

 

 

344

 

Net loss

$

(13,238

)

 

$

(22,659

)

 

$

(41,670

)

 

$

(54,579

)

Net loss per share, basic

$

(0.28

)

 

$

(0.50

)

 

$

(0.90

)

 

$

(1.23

)

Net loss per share, diluted

$

(0.28

)

 

$

(0.50

)

 

$

(0.90

)

 

$

(1.23

)

Shares used in per share calculations:

 

 

 

 

 

 

 

Basic

 

46,735

 

 

 

45,039

 

 

 

46,078

 

 

 

44,436

 

Diluted

 

46,735

 

 

 

45,039

 

 

 

46,078

 

 

 

44,436

 

(1)Includes stock-based compensation as follows:

 

Three Months Ended

December 31,

 

Year Ended

December 31,

 

 

2023

 

 

 

2022

 

 

 

2023

 

 

 

2022

 

Cost of revenues

$

535

 

$

572

 

$

2,406

 

$

2,677

Research and development

 

2,329

 

 

 

2,267

 

 

 

9,866

 

 

 

11,675

 

Sales, general, and administrative

 

3,323

 

 

 

3,190

 

 

 

13,560

 

 

 

12,405

 

 

$

6,187

 

 

$

6,029

 

 

$

25,832

 

 

$

26,757

 

nLIGHT, Inc.

Condensed Consolidated Balance Sheets

(In thousands)

(Unaudited)

 

 

As of

 

December 31,

2023

 

December 31,

2022

Assets

 

 

 

Current assets:

 

 

 

Cash and cash equivalents

$

53,210

 

 

$

57,826

 

Marketable Securities

 

59,672

 

 

 

50,391

 

Accounts receivable, net

 

39,585

 

 

 

37,913

 

Inventory

 

52,160

 

 

 

67,600

 

Prepaid expenses and other current assets

 

15,927

 

 

 

17,026

 

Total current assets

 

220,554

 

 

 

230,756

 

Restricted cash

 

256

 

 

 

252

 

Lease right-of-use assets

 

12,616

 

 

 

13,893

 

Property, plant and equipment, net

 

52,300

 

 

 

60,693

 

Intangible assets, net

 

1,652

 

 

 

4,041

 

Goodwill

 

12,399

 

 

 

12,376

 

Other assets, net

 

7,026

 

 

 

7,222

 

Total assets

$

306,803

 

 

$

329,233

 

 

 

 

 

Liabilities and Stockholders’ Equity

 

 

 

Current liabilities:

 

 

 

Accounts payable

$

12,166

 

 

$

17,507

 

Accrued liabilities

 

12,556

 

 

 

12,820

 

Deferred revenue

 

4,849

 

 

 

1,407

 

Current portion of lease liabilities

 

3,181

 

 

 

2,758

 

Total current liabilities

 

32,752

 

 

 

34,492

 

Non-current income taxes payable

 

5,391

 

 

 

6,699

 

Long-term lease liabilities

 

10,978

 

 

 

12,852

 

Other long-term liabilities

 

3,263

 

 

 

4,345

 

Total liabilities

 

52,384

 

 

 

58,388

 

Stockholders' equity:

 

 

 

Common stock - par value

 

16

 

 

 

16

 

Additional paid-in capital

 

521,184

 

 

 

496,211

 

Accumulated other comprehensive loss

 

(2,477

)

 

 

(2,748

)

Accumulated deficit

 

(264,304

)

 

 

(222,634

)

Total stockholders’ equity

 

254,419

 

 

 

270,845

 

Total liabilities and stockholders’ equity

$

306,803

 

 

$

329,233

 

nLIGHT, Inc.

Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)

 

 

Year Ended December 31,

 

 

2023

 

 

 

2022

 

Cash flows from operating activities:

 

 

 

Net loss

$

(41,670

)

 

$

(54,579

)

Adjustments to reconcile net loss to net cash used in operating activities:

 

 

 

Depreciation

 

12,401

 

 

 

11,085

 

Amortization

 

3,629

 

 

 

4,614

 

Reduction in carrying amount of right-of-use assets

 

1,269

 

 

 

3,000

 

Provision for losses on accounts receivable

 

27

 

 

 

4

 

Stock-based compensation

 

25,832

 

 

 

26,757

 

Deferred income taxes

 

7

 

 

 

4

 

Loss on disposal of assets

 

542

 

 

 

51

 

Non-cash restructuring charges

 

 

 

 

2,758

 

Changes in operating assets and liabilities:

 

 

 

Accounts receivable, net

 

(1,677

)

 

 

2,757

 

Inventory

 

14,890

 

 

 

4,623

 

Prepaid expenses and other current assets

 

1,109

 

 

 

(1,753

)

Other assets, net

 

(1,156

)

 

 

(5,219

)

Accounts payable

 

(4,503

)

 

 

(5,904

)

Accrued and other long-term liabilities

 

(1,336

)

 

 

(577

)

Deferred revenues

 

3,432

 

 

 

(208

)

Lease liabilities

 

(1,449

)

 

 

(1,942

)

Non-current income taxes payable

 

(1,256

)

 

 

(13

)

Net cash provided by (used in) operating activities

 

10,091

 

 

 

(14,542

)

Cash flows from investing activities:

 

 

 

Acquisition of business, net of cash acquired

 

 

 

 

(664

)

Purchases of property, plant and equipment

 

(5,339

)

 

 

(21,388

)

Acquisition of intangible assets and capitalization of patents

 

 

 

 

(332

)

Purchase of marketable securities

 

(127,907

)

 

 

(99,985

)

Proceeds from maturities and sales of marketable securities

 

119,146

 

 

 

49,988

 

Net cash used in investing activities

 

(14,100

)

 

 

(72,381

)

Cash flows from financing activities:

 

 

 

Proceeds from employee stock plan purchases

 

2,469

 

 

 

2,358

 

Proceeds from stock option exercises

 

640

 

 

 

1,197

 

Tax payments related to stock award issuances

 

(3,968

)

 

 

(4,861

)

Net cash used in financing activities

 

(859

)

 

 

(1,306

)

Effect of exchange rate changes on cash

 

256

 

 

 

(477

)

Net decrease in cash, cash equivalents and restricted cash

 

(4,612

)

 

 

(88,706

)

Cash, cash equivalents and restricted cash, beginning of period

 

58,078

 

 

 

146,784

 

Cash, cash equivalents and restricted cash, end of period

$

53,466

 

 

$

58,078

 

Supplemental disclosures:

 

 

 

Cash paid for interest, net

$

40

 

 

$

 

Cash paid for income taxes

 

256

 

 

 

442

 

Operating cash outflows from operating leases

 

3,850

 

 

 

3,925

 

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

 

1,716

 

 

 

1,349

 

Accrued purchases of property, equipment and patents

 

745

 

 

 

207

 

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,

 

 

2023

 

 

 

2022

 

 

 

2023

 

 

 

2022

 

Net loss

$

(13,238

)

 

$

(22,659

)

 

$

(41,670

)

 

$

(54,579

)

Income tax expense (benefit)

 

27

 

 

 

(99

)

 

 

(978

)

 

 

344

 

Other income, net

 

(779

)

 

 

(446

)

 

 

(2,776

)

 

 

(338

)

Interest income, net

 

(352

)

 

 

(291

)

 

 

(1,342

)

 

 

(529

)

Depreciation and amortization

 

4,041

 

 

 

4,072

 

 

 

16,024

 

 

 

15,699

 

Stock-based compensation

 

6,187

 

 

 

6,029

 

 

 

25,832

 

 

 

26,757

 

Restructuring charges

 

817

 

 

 

3,892

 

 

 

817

 

 

 

3,892

 

Adjusted EBITDA

$

(3,297

)

 

$

(9,502

)

 

$

(4,093

)

 

$

(8,754

)

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

 

 

Three Months Ended

December 31,

 

Year Ended

December 31,

 

 

2023

 

 

 

2022

 

 

 

2023

 

 

 

2022

 

Net loss

$

(13,238

)

 

$

(22,659

)

 

$

(41,670

)

 

$

(54,579

)

Add back:

 

 

 

 

 

 

 

Stock-based compensation(1)

 

6,187

 

 

 

6,029

 

 

 

25,832

 

 

 

26,757

 

Amortization of purchased intangibles(1)

 

264

 

 

 

435

 

 

 

1,415

 

 

 

1,674

 

Restructuring charges

 

817

 

 

 

3,892

 

 

 

817

 

 

 

3,892

 

Non-GAAP net loss

 

(5,970

)

 

 

(12,303

)

 

 

(13,606

)

 

 

(22,256

)

 

 

 

 

 

 

 

 

GAAP weighted-average shares outstanding

 

46,735

 

 

 

45,039

 

 

 

46,078

 

 

 

44,436

 

Participating securities

 

 

 

 

 

 

 

 

 

 

 

Non-GAAP weighted-average number of shares, basic

 

46,735

 

 

 

45,039

 

 

 

46,078

 

 

 

44,436

 

Dilutive effect of common stock equivalents

 

 

 

 

 

 

 

 

 

 

 

Non-GAAP weighted-average number of shares, diluted

 

46,735

 

 

 

45,039

 

 

 

46,078

 

 

 

44,436

 

 

 

 

 

 

 

 

 

Non-GAAP net loss per share, basic

$

(0.13

)

 

$

(0.27

)

 

$

(0.30

)

 

$

(0.50

)

Non-GAAP net loss per share, diluted

$

(0.13

)

 

$

(0.27

)

 

$

(0.30

)

 

$

(0.50

)

(1) There is no income tax effect related to the stock-based compensation and amortization of purchased intangibles adjustments due to the full valuation allowance in the United States.

 

Joseph Corso

Chief Financial Officer

nLIGHT, Inc.

(360) 566-4460

joe.corso@nlight.net

Source: nLIGHT, Inc.