EX-99.1 2 exhibit991-q22019.htm EXHIBIT 99.1 Exhibit


nlightlogoa12.jpg
Exhibit 99.1


nLIGHT, Inc. Announces Second Quarter 2019 Results
Revenues of $48.0 million and gross margin of 33.0% for the second quarter of 2019


VANCOUVER, Wash., August 5, 2019 - 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 2019.

“During the quarter we saw growing customer interest in Corona, our programmable fiber laser solution, which contributed to the continued growth of our industrial end market outside of China,” commented Scott Keeney, nLIGHT’s President and Chief Executive Officer. “Within the Chinese industrial market, we began ramping sales of our 12kW fiber laser. These developments helped us execute to the financial outlook we provided back in May, despite a challenging environment in China.

“Sales in our microfabrication end market increased following a slower first quarter and aerospace and defense again delivered strong year-over-year growth. Our differentiated technology in each of our end markets positions us well for the favorable long-term trends we see in the adoption of high-power laser-based solutions.”
   
Second Quarter 2019 Financial Highlights
 
Three Months Ended June 30,
 
 
(In thousands, except percentages)
2019
 
2018
 
% Change
Revenues
$
48,048

 
$
51,705

 
(7.1
)%
Gross margin
33.0
%
 
34.2
%
 
 
Income from operations
$
805

 
$
5,549

 
(85.5
)%
Operating margin
1.7
%
 
10.7
%
 
 
Net income (loss)
$
(155
)
 
$
4,653

 
(103.3
)%
Adjusted EBITDA(1)
$
5,455

 
$
8,527

 
(36.0
)%
Adjusted EBITDA, as percentage of revenues
11.4
%
 
16.5
%
 
 
(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 $48.0 million for the second quarter of 2019 were down 7.1% compared to $51.7 million for the second quarter of 2018. Gross margin was 33.0% for the second quarter of 2019 compared to 34.2% for the second quarter of 2018. GAAP net loss for the second quarter of 2019 was $(0.2) million, or net loss of $0.00 per diluted share, compared to net income of $4.7 million, or net income of $0.11 per diluted share, for the second quarter of 2018. 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 second quarter of 2019 was $2.2 million, or non-GAAP net income of $0.05 per diluted share, compared to non-GAAP net income of $5.5 million, or non-GAAP net income of $0.14 per diluted share, for the second quarter of 2018.

Outlook
For the third quarter of 2019, nLIGHT expects revenues to be in the range of $42.0 million to $46.0 million, gross margin to be in the range of 29.0% to 32.0%, and Adjusted EBITDA to be in the range of $2.0 million to $4.0 million.

Investor Conference Call at 2:00 p.m. Pacific Time, Monday, August 5, 2019

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 2019 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, interest expense or income, 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 common stock equivalents 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) the effect of potential tariffs and global trade policies on the cost of our products, (8) our manufacturing capacity and operations may not be appropriate for future levels of demand, (9) our reliance on a small number of customers for a significant portion of our revenues and (10) 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 Annual Report on Form 10-K 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, “nLIGHT,” and “Corona” 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 1,100 people with operations in the U.S., China and Finland. For more information, please visit www.nlight.net.

For more information, contact:
Jason Willey
Investor Relations and Corporate Development
nLIGHT, Inc.
(360) 567-4890
jason.willey@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,
 
2019
 
2018
 
2019
 
2018
Revenues
$
48,048

 
$
51,705

 
$
89,909

 
$
94,172

Cost of revenues(1)
32,177

 
34,026

 
60,524

 
61,764

Gross profit
15,871

 
17,679

 
29,385

 
32,408

Operating expenses:
 
 
 
 
 
 
 
Research and development(1)
6,494

 
4,898

 
12,916

 
9,181

Sales, general, and administrative(1)
8,572

 
7,232

 
16,716

 
13,470

Total operating expenses
15,066

 
12,130

 
29,632

 
22,651

Income (loss) from operations
805

 
5,549

 
(247
)
 
9,757

Other income (expense):
 
 
 
 
 
 
 
Interest income (expense), net
740

 
(6
)
 
1,490

 
(225
)
Other income (expense), net
(907
)
 
(42
)
 
(87
)
 
34

Income before income taxes
638

 
5,501

 
1,156

 
9,566

Income tax expense
793

 
848

 
2,546

 
1,997

Net income (loss)
$
(155
)
 
$
4,653

 
$
(1,390
)
 
$
7,569

Less: Income allocated to participating securities
—

 
(1,499
)
 
—

 
(4,415
)
Net income (loss) attributable to common stockholders
$
(155
)
 
$
3,154

 
$
(1,390
)
 
$
3,154

Net income (loss) per share, basic
$
—

 
$
0.13

 
$
(0.04
)
 
$
0.23

Net income (loss) per share, diluted
$
—

 
$
0.11

 
$
(0.04
)
 
$
0.17

Shares used in per share calculations:
 
 
 
 
 
 
 
Basic
37,065

 
24,491

 
36,880

 
13,761

Diluted
37,065

 
29,756

 
36,880

 
18,797

(1)Includes stock-based compensation as follows:
 
 
 
 
 
 
 
 
Three Months Ended June 30,
 
Six Months Ended
June 30,
 
2019
 
2018
 
2019
 
2018
Cost of revenues
$
267

 
$
62

 
$
476

 
$
84

Research and development
711

 
200

 
1,269

 
225

Sales, general and administrative
1,403

 
544

 
2,545

 
659

 
$
2,381

 
$
806

 
$
4,290

 
$
968







nLIGHT, Inc.
Consolidated Balance Sheets
(In thousands)
(Unaudited)

 
June 30,
 
December 31,
 
2019
 
2018
Assets
 
 
 
Current assets:
 
 
 
     Cash and cash equivalents
$
142,661

 
$
149,478

     Accounts receivable, net
30,752

 
26,528

     Inventory
42,285

 
35,329

     Prepaid expenses and other current assets
4,107

 
7,286

          Total current assets
219,805

 
218,621

Property and equipment, net
24,650

 
21,462

Intangible assets, net
2,971

 
2,686

Goodwill
1,387

 
1,387

Other assets
6,776

 
5,974

          Total assets
$
255,589

 
$
250,130

 
 
 
 
Liabilities and Stockholders’ Equity
 
 
 
Current liabilities:
 
 
 
     Accounts payable
$
13,360

 
$
12,068

     Accrued liabilities
10,693

 
10,708

     Deferred revenues
582

 
720

     Current portion of long-term debt
78

 
91

          Total current liabilities
24,713

 
23,587

Non-current income taxes payable
6,854

 
6,472

Long-term debt
17

 
18

Other long-term liabilities
2,068

 
2,270

Total liabilities
33,652

 
32,347

Stockholders' equity:
 
 
 
Preferred stock - par value
—

 
—

Common stock - par value
15

 
15

     Additional paid-in capital
329,982

 
324,656

     Accumulated other comprehensive loss
(2,100
)
 
(2,157
)
     Accumulated deficit
(105,960
)
 
(104,731
)
          Total stockholders’ equity
221,937

 
217,783

          Total liabilities and stockholders’ equity
$
255,589

 
$
250,130











nLIGHT, Inc.
Condensed Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)

 
Six Months Ended June 30,
 
2019
 
2018
Cash flows from operating activities:
 
 
 
Net income (loss)
$
(1,390
)
 
$
7,569

Adjustments to reconcile net income (loss) to net cash used in operating activities:
 
 
 
Depreciation
3,205

 
2,936

Amortization
1,276

 
1,182

Provision for losses on accounts receivable
33

 
183

Stock-based compensation
4,290

 
968

Loss on disposal of property and equipment
5

 
11

Changes in operating assets and liabilities:
 
 
 
Accounts receivable, net
(4,334
)
 
(8,711
)
Inventory
(6,987
)
 
(5,644
)
Prepaid expenses and other current assets
3,192

 
(3,458
)
Other assets
(1,800
)
 
(1,226
)
Accounts payable
1,111

 
3,539

Other changes
216

 
306

Net cash used in operating activities
(1,183
)
 
(2,345
)
Cash flows from investing activities:
 
 
 
Purchases of property, equipment and intangibles
(6,916
)
 
(5,789
)
Proceeds from sale of property and equipment
—

 
8

Net cash used in investing activities
(6,916
)
 
(5,781
)
Cash flows from financing activities:
 
 
 
Principal payments on debt and capital leases
(50
)
 
(74
)
Proceeds from public offering, net of offering costs
—

 
101,486

Proceeds from employee stock plan purchases
762

 
—

Proceeds from stock option exercises
915

 
123

Tax payments related to stock award issuances
(480
)
 
—

Net cash provided by financing activities
1,147

 
101,535

Effect of exchange rate changes on cash
135

 
(371
)
Net increase (decrease) in cash and cash equivalents
(6,817
)
 
93,038

Cash and cash equivalents, beginning of period
149,478

 
36,687

Cash and cash equivalents, end of period
$
142,661

 
$
129,725
















nLIGHT, Inc.
Reconciliation of GAAP Financial Metrics to Non-GAAP
(In thousands, except per share data)
(Unaudited)

Reconciliation of Net Income (Loss) to Adjusted EBITDA
 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
2019
 
2018
 
2019
 
2018
Net income (loss)
$
(155
)
 
$
4,653

 
$
(1,390
)
 
$
7,569

Income tax expense
793

 
848

 
2,546

 
1,997

Other (income) expense, net
907

 
42

 
87

 
(34
)
Interest (income) expense, net
(740
)
 
6

 
(1,490
)
 
225

Depreciation and amortization
2,269

 
2,172

 
4,481

 
4,118

Stock-based compensation
2,381

 
806

 
4,290

 
968

Adjusted EBITDA
$
5,455

 
$
8,527

 
$
8,524

 
$
14,843



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

Three Months Ended June 30,

Six Months Ended June 30,

2019

2018

2019

2018
Net income (loss)
$
(155
)

$
4,653


$
(1,390
)

$
7,569

Add back:











Stock-based compensation(1)
2,381


806


4,290


968

Non-GAAP net income
2,226


5,459


2,900


8,537

 











GAAP weighted average shares outstanding
37,065


24,491


36,880


13,761

Assumed conversion of convertible preferred stock to common stock
—


7,940


—


16,291

Non-GAAP weighted average number of shares, basic
37,065


32,431


36,880


30,052

Dilutive effect of common stock equivalents
4,391


5,265


4,487


5,036

Non-GAAP weighted average number of shares, diluted
41,456


37,696


41,367


35,088

 











Non-GAAP net income per share, basic
$
0.06


$
0.17


$
0.08


$
0.28

Non-GAAP net income per share, diluted
$
0.05


$
0.14


$
0.07


$
0.24

(1) There is no income tax effect related to the stock-based compensation adjustment due to the full valuation allowance in the U.S.