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Expands Luna’s high-definition fiber optic sensing into manufacturing and multi-channel applications

(ROANOKE, VA, December 12, 2017)  As the automotive and aerospace industries demand advanced measurement systems to enable lightweight designs, Luna Innovations Incorporated (NASDAQ: LUNA) launches its enhanced ODiSI 6100 proprietary strain and temperature measurement technology for integration into these industrial environments that place strict requirements on scalability, usability, interoperability, and overall system stability.

Unlike traditional electrical strain gages and thermocouples, the ODiSI 6100 Platform (Optical Distributed Sensor Interrogator) employs next generation fiber optic technology for distributed, multi-point, ultrahigh-definition profiling of strain and temperature.  ODiSI fiber optic sensors are small, lightweight and economical, enabling greatly reduced cost of sensor installation and the ability to embed sensors directly within materials and structures.

The enhancements included with the ODiSI 6100 strain and temperature measurement platform include minimized per-sensor cost, increased multi-channel capability, increased sensor length, increased speed of output, and real time 3-D data visualization software for computer model calibration.

“Automotive and aerospace R&D and manufacturing teams are incorporating composite and other lightweight materials into new designs at an increasing rate, requiring higher measurement performance in less time,” said Scott Graeff, president and chief executive officer of Luna Innovations. “Luna’s game-changing technology targets this need and addresses the major challenges faced by the aerospace and automotive industries as they incorporate new materials into modern designs.”

The customer feedback-driven ODiSI 6100 Platform now includes integrated, multi-channel capability up to 8 channels, millimeter resolution with up to 38,000 measurement points per channel, sensor length ranges from 2.5 m to 50 m per channel, a new, completely redesigned user interface with intuitive user controls operating on the LinuxTM operating system, and real-time data output at rates up to 250 Hz.  Optional 3-D Visualization Software allows strain and temperature data to be integrated seamlessly with CAD models and plotted and manipulated in three dimensions for the ultimate in computer-aided design. 

“ODiSI 6100 greatly enhances the engineer’s ability to maximize the performance of critical processes and next generation designs,” Graeff added. “ODiSI fiber optic sensors are small, nearly weightless and carry no electricity so they can go where electrical sensors cannot. With its high channel count, ODiSI 6100 replaces cumbersome and expensive strain gage data acquisition systems with a single, continuous, small form-factor sensor per channel. Because fiber optic sensors can also measure temperature, the ODiSI 6100 is also ideal for continuous, high-definition temperature profiling for industrial processes that rely on precise temperature control.”

Luna will be demonstrating the ODiSI 6100 at the CAMX tradeshow in Orlando, Florida this week in booth G79.  More information on the ODiSI 6100 including application case studies and product literature can be found here: http://lunainc.com/product/sensing-solutions/odisi-6100/

About Luna:

Luna Innovations Incorporated (www.lunainc.com) is a leader in optical technology, providing unique capabilities in high speed optoelectronics and high performance fiber optic test products for the telecommunications industry and distributed fiber optic sensing for the aerospace and automotive industries.  Luna is organized into two business segments, which work closely together to turn ideas into products: a Technology Development segment and a Products and Licensing segment. Luna’s business model is designed to accelerate the process of bringing new and innovative technologies to market.

Forward-Looking Statements:

The statements in this release that are not historical facts constitute “forward-looking statements” made pursuant to the safe harbor provision of the Private Securities Litigation Reform Act of 1995 that involve risks and uncertainties. These statements include the company’s expectations regarding the greater performance and new capabilities of the enhanced ODiSI platform, as well as Luna’s strategy to become the leading supplier of sensor testing for testing composites and other advanced materials. Management cautions the reader that these forward-looking statements are only predictions and are subject to a number of both known and unknown risks and uncertainties, and actual results may differ materially from those expressed or implied by these forward-looking statements as a result of a number of factors. These factors include, without limitation, failure of demand for the company’s products and services to meet expectations, technological challenges and those risks and uncertainties set forth in the company’s periodic reports and other filings with the Securities and Exchange Commission (“SEC”). Such filings are available on the SEC’s website at www.sec.gov and on the company’s website at www.lunainc.com. The statements made in this release are based on information available to the company as of the date of this release and Luna undertakes no obligation to update any of the forward-looking statements after the date of this release.

Investor Contact:

Dale Messick, CFO
Luna Innovations Incorporated
Phone: 1.540.769.8400
Email: IR@lunainc.com

 

 

Ethan Thompson, Kevin Farinholt

Figure 1: An example of a highly corroded ballast tank (image from: http://www.charismauae.net/projects_gal.php?Pid=2).
Figure 1: An example of a highly corroded ballast tank (image from: http://www.charismauae.net/projects_gal.php?Pid=2).

Approximately 4,000 ballast tanks across the U.S. Navy’s fleet must be inspected annually to determine their structural health and identify the presence of corrosion (Figure 1). These inspection efforts cost approximately $200 million dollars a year, with about 50% of the cost attributed to unexpected or unplanned repairs. The U.S. military is looking to transition from time-based inspection practices to condition-based maintenance for the next-generation Columbia-class nuclear submarines to reduce operating and maintenance costs.

Current maintenance practices involve visual inspections of the four major areas of the ballast tanks – tank tops, bottoms, sides, and T-beams, with four ballast tank locations common to most submarine designs (Figure 2).  Ratings are given to each area as to the integrity of protective coatings and presence of corrosion, with ratings ranging from 0.03% – 10% deterioration.  The overall condition of a tank is then assessed according to the rating for the most deteriorated region within the volume.  Based on size and severity of damage, areas within the ballast tank will be flagged for mandatory repair or replacement should conditions exceed limits established within the Navy’s Corrosion Control Assessment and Maintenance Manual.

Figure 2: Ballast tank locations common to most submarine designs. (https://commons.wikimedia.org)
Figure 2: Ballast tank locations common to most submarine designs. (https://commons.wikimedia.org)

 

Luna is developing a technologically-rooted condition-based monitoring system for ballast tank coating damage (Figure 3).  The development leverages hardware, software, and modeling techniques used across many of Luna’s corrosion and equipment health monitoring programs.  The system incorporates autonomous monitoring of the interior protective coatings, and is expected to reduce labor cost, as well as provide operators a tool to understand the extent and location of the damage as it evolves. Luna has developed an embedded solution that utilizes a custom hardware design integrated with a graphical user interface to test and evaluate performance of the tank’s protective coating.  Once data has been collected, it is fed through a neural network algorithm that estimates the defect size and position within the tank.

Figure 3: Graphical representation of Luna’s embedded coating condition monitoring system.
Figure 3: Graphical representation of Luna’s embedded coating condition monitoring system.

 

Electrochemical impedance spectroscopy (EIS) is used to monitor the electrical response of protective coatings and the saltwater contents they interact with within the ballast tank itself, collecting measurements over a frequency range from 500 Hz to 100 kHz.  From these measurements, specific frequencies are correlated with defect size and separation distance for each of the sensor nodes.  Data collected from multiple nodes is then transmitted to a central sensor hub where neural network algorithms are used to triangulate damage position and estimate its severity within the tank, providing an overall assessment for the tank (Figure 4). The system outputs a damage severity rating and provides maintainers locations within the tank that require further inspection or repair.

Figure 4: Neural network modeling used in the coating condition monitoring system.
Figure 4: Neural network modeling used in the coating condition monitoring system.

 

Experiments have been conducted on 1D, 2D, and 3D test stands in the laboratory.  Physical scaled models of rectangular tanks have been fabricated for testing at Luna’s Charlottesville facility, and studied under a range of saltwater concentrations to simulate a range of operating conditions.  Four- and five-node sensor arrays have been installed within each test stand, and a system was designed to quickly install and reposition simulated defects at different x-, y-, and z-coordinates along the walls, floor, and top of the tanks.  As the sensor node collects data, a neural network model can be applied to generate estimates of the extent and location of damage within the tank (Figure 5).  Training processes for the neural network model allow the system optimization to maximize prediction accuracy using both training and testing datasets collected in the laboratory.   Results obtained to date have shown that the process can be applied to a variety of tests conditions with good performance at different salt concentrations, defect sizes, and spatial distributions.

Figure 5: Neural Network models provide estimates of damage size and location within 3D tank geometries, and have been shown to work at different salt concentrations (0.02 – 0.6 M NaCl)
Figure 5: Neural Network models provide estimates of damage size and location within 3D tank geometries, and have been shown to work at different salt concentrations (0.02 – 0.6 M NaCl)

 

A ruggedized version of the coating condition monitoring system has been fabricated and is undergoing relevant environment testing at the U.S. Navy Research Laboratory’s Corrosion and Marine Engineering facility in Key West, Florida.  Preliminary tests have been conducted to verify that EIS measurements are effective in larger expanses of natural seawater and separation distances up to 10m (Figure 6). These experiments were performed off of a seawall at NRL’s test facility where water is drawn from to fill ballast tank models constructed to study cathodic protection and monitoring systems. 

Figure 6: Field study at NRL Key West to examine EIS measurement response for different defect sizes and separation distances in open seawater.
Figure 6: Field study at NRL Key West to examine EIS measurement response for different defect sizes and separation distances in open seawater.
 

These field trials serve as a transition to relevant environment testing of Luna’s CCM system.  This study will provide a realistic assessment of the technique’s ability to function in natural seawater environments, and at length scales that are representative of shipboard applications.  They will also allow Luna to identify limitations of the current prototype system and implement system level refinements to mature the technology for further testing in operational environments to extend the technology readiness level of the coating condition monitoring system.

December 4-7, 2017
Calvin L. Rampton Salt Palace Convention Center | Salt Lake City, UT

 

Luna will be exhibiting at the upcoming 2017 DoD Maintenance Symposium.  The symposium is the premier event bringing together the DoD maintenance community to network, share best practices, share practical insights, and engage in impactful discussions addressing issues and challenges.  The mission of the event is to create an environment that enables attendees to share relevant information, identify critical issues, discuss key topics, and increase their awareness of Department of Defense maintenance initiatives.  At this event, attendees have the unique opportunity to influence the future of the maintenance community.

We’ll be located at booth #211 in the convention center, and will have samples and demonstrations of our latest corrosion test, evaluation, and control technologies.  Come join us in Salt Lake City, UT at the Calvin L. Rampton Salt Palace Convention Center December 4-7 to learn about our ongoing work to combat corrosion and its effects on our military.

Net income from continuing operations improved to $0.5 million for the three months ended September 30, 2017 compared to a net loss from continuing operations of $(0.4) million for the three months ended September 30, 2016.  Cash and cash equivalents were $38.5 million at September 30, 2017.

(ROANOKE, VA, November 13, 2017) – Luna Innovations Incorporated (NASDAQ: LUNA) today announced its financial results for the three and nine months ended September 30, 2017.

For the three months ended September 30, 2017, Luna reported net income of $15.8 million compared to a net loss of $(0.4) million for the three months ended September 30, 2016.  Net income for the 2017 period included an after-tax gain of $15.1 million recognized on the sale of Luna’s high speed optical receivers (“HSOR”) business in August 2017.  Net income from continuing operations improved by $0.9 million, to $0.5 million, or $0.02 per share, for the three months ended September 30, 2017, compared to a net loss from continuing operations of $(0.4) million, or $(0.01) per share, for the three months ended September 30, 2016. Adjusted earnings before interest, taxes, depreciation and amortization (“Adjusted EBITDA”) was $0.9 million for the three months ended September 30, 2017 compared to $0.3 million for the three months ended September 30, 2016.  A reconciliation of net income/(loss) to adjusted EBITDA can be found in the schedules included in this release.

“We are extremely pleased with our third quarter financial results,” said Scott Graeff, president and chief executive officer of Luna. “The combination of positive income from our continuing operations for the quarter and the significant liquidity provided by the sale of the HSOR business provides a solid foundation for Luna to continue to drive its fiber optic test & measurement initiative.  I am excited to be taking on the leadership of the company at this time of high growth potential within our strategic initiative, supported by a highly dedicated group of talented employees and a strong balance sheet.”

Third Quarter Financial Summary

Total revenues for the three months ended September 30, 2017, were $11.6 million compared to $11.2 million for the three months ended September 30, 2016.  Technology development revenues increased 11% to $4.6 million for the three months ended September 30, 2017, compared to $4.1 million for the three months ended September 30, 2016.  Products and licensing revenues remained substantially unchanged at $7.1 million for the three months ended September 30, 2017 and 2016.  The increase in the technology development revenues for the three months ended September 30, 2017 compared to the three months ended September 30, 2016 was realized primarily in Luna’s intelligent systems research group.

Gross profit was $4.5 million, or 39% of revenues, for the three months ended September 30, 2017, compared to gross profit of $4.4 million, or 39% of revenues, for the three months ended September 30, 2016.

Selling, general and administrative expenses were $3.3 million for the three months ended September 30, 2017, compared to $3.8 million for the three months ended September 30, 2016.  The decrease in selling, general and administrative expense was largely driven by a $0.2 million decrease in bad debt expense and a $0.2 million decrease in sales and marketing expenses resulting from lower headcount in the three months ended September 30, 2017.

Research, development and engineering expenses remained substantially unchanged at $0.8 million for the three months ended September 30, 2017 and 2016.

Net income from continuing operations improved to $0.5 million for the three months ended September 30, 2017, compared to a net loss from continuing operations of $(0.4) million for the three months ended September 30, 2016.  Net income from discontinued operations was $15.2 million for the three months ended September 30, 2017, compared to a net loss from discontinued operations of $(0.1) million for the three months ended September 30, 2016.  Net income from discontinued operations for the three months ended September 30, 2017, included the recognition of the after tax gain on the sale of the HSOR business of $15.1 million in addition to after tax income of $0.1 million associated with the operations of the HSOR business prior to its sale.  Net loss from discontinued operations for the three months ended September 30, 2016, reflect the after tax results of operations of the HSOR business during the period.

Net income attributable to common stockholders for the three months ended September 30, 2017 was $15.7 million, compared to a net loss attributable to common stockholders of $(0.5) million for the three months ended September 30, 2016.  Adjusted EBITDA was $0.9 million for the three months ended September 30, 2017, compared to $0.3 million for the three months ended September 30, 2016.

 Year to Date Financial Summary

Total revenues for the nine months ended September 30, 2017, were $33.0 million, compared to $30.1 million for the nine months ended September 30, 2016.  Technology development revenues increased 14% to $13.4 million for the nine months ended September 30, 2017, compared to $11.8 million for the nine months ended September 30, 2016.  The increase in technology development revenues was primarily as a result of increased sales in Luna’s intelligent systems, nanomaterials, and biomedical technologies groups.  Products and licensing revenues were $19.6 million for the nine months ended September 30, 2017, compared to $18.3 million for the nine months ended September 30, 2016.  The increase in Products and Licensing segment revenues was primarily driven by an increase in Luna’s sales of optical backscatter reflectometer instruments and optoelectronic components.

Gross profit increased to $12.8 million, or 39% of revenues for the nine months ended September 30, 2017, compared to $11.1 million, or 37% of revenues, for the nine months ended September 30, 2016.

Selling, general and administrative expenses decreased to $10.3 million for the nine months ended September 30, 2017, compared to $11.3 million for the nine months ended September 30, 2016.   The decrease in selling, general and administrative expenses year to date was primarily related to a $0.2 million decrease in bad debt expense, a $0.2 million decrease in share based compensation expense, and a $0.4 million decrease in sales and marketing costs.

Research, development and engineering expenses decreased to $2.6 million for the nine months ended September 30, 2017, compared to $2.8 million for the nine months ended September 30, 2016.  The decrease was due to lower engineering costs in internal research for Luna’s Terahertz product as more engineering time was spent on externally funded research activities and, accordingly, included in Luna’s technology development cost of revenues.

Net loss from continuing operations improved to $(0.3) million for the nine months ended September 30, 2017, compared to $(3.0) million for the nine months ended September 30, 2016.  Net income from discontinued operations was $14.5 million for the nine months ended September 30, 2017, compared to $0.3 million for the nine months ended September 30, 2016.  Net income from discontinued operations for the nine months ended September 30, 2017, included an after tax gain of $15.1 million recognized on the sale of the HSOR business offset by an after tax loss of $(0.6) million related to the operations of the HSOR business prior to its sale.  Net income from discontinued operations for the nine months ended September 30, 2016, included the after tax income related to the operations of the HSOR business during the period.

Net income/(loss) attributable to common stockholders improved to a net income of $14.1 million for the nine months ended September 30, 2017, compared to a net loss of $(2.8) million for the nine months ended September 30, 2016.  Adjusted EBITDA increased to $1.2 million for the nine months ended September 30, 2017, compared to $(1.2) million for the nine months ended September 30, 2016.

Non-GAAP Measures

In evaluating the operating performance of its business, Luna’s management considers Adjusted EBITDA, which excludes certain charges and credits that are required by generally accepted accounting principles (“GAAP”). Adjusted EBITDA provides useful information to both management and investors by excluding the effect of certain non-cash expenses and items that Luna believes may not be indicative of its operating performance, because either they are unusual and Luna does not expect them to recur in the ordinary course of its business or they are unrelated to the ongoing operation of the business in the ordinary course. Adjusted EBITDA should be considered in addition to results prepared in accordance with GAAP, but should not be considered a substitute for, or superior to, GAAP results. Adjusted EBITDA has been reconciled to the nearest GAAP measure in the table following the financial statements attached to this press release.

Conference Call Information

As previously announced, Luna will conduct an investor conference call at 5:00 pm (EST) today to discuss its financial results for the three and nine months ended September 30, 2017, and recent business developments. The call can be accessed by dialing 844.578.9643 domestically or 270.823.1522 internationally prior to the start of the call. The participant access code is 2469766. Investors are advised to dial in at least five minutes prior to the call to register. The conference call will also be webcast live over the Internet. The webcast can be accessed by logging on to the “Investor Relations” section of the Luna website, www.lunainc.com, prior to the event. The webcast will be archived under the “Webcasts and Presentations” section of the Luna website for at least 30 days following the conference call.

About Luna

Luna Innovations Incorporated (www.lunainc.com) is a leader in optical technology, providing unique capabilities in high speed optoelectronics and high performance fiber optic test products for the telecommunications industry and distributed fiber optic sensing for the aerospace and automotive industries.  Luna is organized into two business segments, which work closely together to turn ideas into products: a Technology Development segment and a Products and Licensing segment. Luna’s business model is designed to accelerate the process of bringing new and innovative technologies to market.

Forward-Looking Statements

The statements in this release that are not historical facts constitute “forward-looking statements” made pursuant to the safe harbor provision of the Private Securities Litigation Reform Act of 1995 that involve risks and uncertainties. These statements include Luna’s expectations regarding the high growth potential within Luna’s strategic initiative. Management cautions the reader that these forward-looking statements are only predictions and are subject to a number of both known and unknown risks and uncertainties, and actual results, performance, and/or achievements of Luna may differ materially from the future results, performance, and/or achievements expressed or implied by these forward-looking statements as a result of a number of factors. These factors include, without limitation, failure of demand for Luna’s products and services to meet expectations, technological challenges and those risks and uncertainties set forth in Luna’s periodic reports and other filings with the Securities and Exchange Commission (“SEC”). Such filings are available on the SEC’s website at www.sec.gov and on Luna’s website at www.lunainc.com. The statements made in this release are based on information available to Luna as of the date of this release and Luna undertakes no obligation to update any of the forward-looking statements after the date of this release.

 

Luna Innovations Incorporated
Consolidated Statements of Operations 

 

Three Months Ended
 September 30,

 

Nine Months Ended
 September 30,

 

 

2017

 

2016

 

2017

 

2016

 

 

(unaudited)

 

(unaudited)

 

Revenues:

 

 

 

 

 

 

 

 

Technology development

$

4,590,054

 

 

$

4,118,245

 

 

$

13,428,428

 

 

$

11,772,731

 

 

Products and licensing

7,052,094

 

 

7,066,908

 

 

19,593,648

 

 

18,301,631

 

 

Total revenues

11,642,148

 

 

11,185,153

 

 

33,022,076

 

 

30,074,362

 

 

Cost of revenues:

 

 

 

 

 

 

 

 

Technology development

3,491,840

 

 

3,068,360

 

 

10,045,261

 

 

8,986,312

 

 

Products and licensing

3,617,547

 

 

3,758,765

 

 

10,201,459

 

 

9,954,987

 

 

Total cost of revenues

7,109,387

 

 

6,827,125

 

 

20,246,720

 

 

18,941,299

 

 

Gross profit

4,532,761

 

 

4,358,028

 

 

12,775,356

 

 

11,133,063

 

 

Operating expense:

 

 

 

 

 

 

 

 

Selling, general and administrative

3,256,074

 

 

3,816,679

 

 

10,345,964

 

 

11,296,389

 

 

Research, development and engineering

833,811

 

 

812,050

 

 

2,581,473

 

 

2,789,801

 

 

Total operating expense

4,089,885

 

 

4,628,729

 

 

12,927,437

 

 

14,086,190

 

 

Operating income/(loss)

442,876

 

 

(270,701

)

 

(152,081

)

 

(2,953,127

)

 

Other income (expense):

 

 

 

 

 

 

 

 

Other expense

(3,389

)

 

(231

)

 

(4,258

)

 

(1,904

)

 

Interest expense

(55,099

)

 

(71,991

)

 

(179,860

)

 

(237,081

)

 

Total other expense

(58,488

)

 

(72,222

)

 

(184,118

)

 

(238,985

)

 

Income/(loss) from continuing operations before income taxes

384,388

 

 

(342,923

)

 

(336,199

)

 

(3,192,112

)

 

Income tax (benefit)/expense

(130,977

)

 

44,797

 

 

(63,350

)

 

(173,801

)

 

Net income/(loss) from continuing operations

515,365

 

 

(387,720

)

 

(272,849

)

 

(3,018,311

)

 

Gain on sale, net of $1,508,373 of related income taxes

15,096,666

 

 

 

 

15,096,666

 

 

 

 

Income/(loss) from discontinued operations, net of income tax (benefit)/expense of $(349,515), $(35,095), $(349,515), and $209,678.

145,293

 

 

(57,358

)

 

(644,241

)

 

342,685

 

 

Net income/(loss) from discontinued operations

15,241,959

 

 

(57,358

)

 

14,452,425

 

 

342,685

 

 

Net income/(loss)

15,757,324

 

 

(445,078

)

 

14,179,576

 

 

(2,675,626

)

 

Preferred stock dividend

33,699

 

 

28,941

 

 

97,331

 

 

74,731

 

 

Net income/(loss) attributable to common stockholders

$

15,723,625

 

 

$

(474,019

)

 

$

14,082,245

 

 

$

(2,750,357

)

 

Net income/(loss) per share from continuing operations:

 

 

 

 

 

 

 

 

Basic

$

0.02

 

 

$

(0.01

)

 

$

(0.01

)

 

$

(0.11

)

 

Diluted

$

0.02

 

 

$

(0.01

)

 

$

(0.01

)

 

$

(0.11

)

 

Net income/(loss) per share from discontinued operations:

 

 

 

 

 

 

 

 

Basic

$

0.55

 

 

$

0.00

 

 

$

0.52

 

 

$

0.01

 

 

Diluted

$

0.47

 

 

$

0.00

 

 

$

0.52

 

 

$

0.01

 

 

Net income/(loss) per share attributable to common stockholders:

 

 

 

 

 

 

 

 

Basic

$

0.57

 

 

$

(0.02

)

 

$

0.51

 

 

$

(0.10

)

 

Diluted

$

0.48

 

 

$

(0.02

)

 

$

0.51

 

 

$

(0.10

)

 

Weighted average common shares and common equivalent shares outstanding:

 

 

 

 

 

 

 

 

Basic

27,692,539

 

 

27,605,028

 

 

27,611,905

 

 

27,531,730

 

 

Diluted

32,714,389

 

 

27,605,028

 

 

27,611,905

 

 

27,531,730

 

 

 

Luna Innovations Incorporated
Consolidated Balance Sheets

 

 

September 30, 2017

 

December 31, 2016

 

 

(unaudited)

 

 

 

Assets

 

 

 

 

Current assets:

 

 

 

 

Cash and cash equivalents

$

38,514,437

 

 

$

12,802,458

 

 

Accounts receivable, net

8,940,405

 

 

10,269,012

 

 

Inventory

7,300,035

 

 

6,848,835

 

 

Prepaid expenses and other current assets

924,196

 

 

1,375,659

 

 

Current assets held for sale

 

 

5,801,629

 

 

Total current assets

55,679,073

 

 

37,097,593

 

 

Property and equipment, net

3,145,769

 

 

3,482,687

 

 

Intangible assets, net

3,264,285

 

 

3,367,217

 

 

Goodwill

502,000

 

 

502,000

 

 

Long term receivable- sale of HSOR business

4,000,000

 

 

 

 

Other assets

18,024

 

 

38,194

 

 

Non-current assets held for sale

 

 

10,509,282

 

 

Total assets

$

66,609,151

 

 

$

54,996,973

 

 

Liabilities and stockholders’ equity

 

 

 

 

Liabilities:

 

 

 

 

Current liabilities:

 

 

 

 

Current portion of long-term debt obligations

$

1,833,333

 

 

$

1,833,333

 

 

Current portion of capital lease obligations

49,070

 

 

52,128

 

 

Accounts payable

2,188,776

 

 

2,954,742

 

 

Accrued liabilities

9,586,554

 

 

7,913,544

 

 

Deferred revenue

897,023

 

 

837,906

 

 

Current liabilities held for sale

 

 

2,376,703

 

 

Total current liabilities

14,554,756

 

 

15,968,356

 

 

Long-term deferred rent

1,221,170

 

 

1,319,402

 

 

Long-term debt obligations

1,057,263

 

 

2,420,032

 

 

Long-term capital lease obligations

79,246

 

 

114,940

 

 

Non-current liabilities held for sale

 

 

84,555

 

 

Total liabilities

16,912,435

 

 

19,907,285

 

 

Commitments and contingencies

 

 

 

 

Stockholders’ equity:

 

 

 

 

Preferred stock, par value $0.001, 1,321,514 shares authorized, issued and outstanding at September 30, 2017 and December 31, 2016

1,322

 

 

1,322

 

 

Common stock, par value $0.001, 100,000,000 shares authorized, 28,402,887 and 27,988,104 shares issued, 27,815,060 and 27,541,277 shares outstanding at September 30, 2017 and December 31, 2016

29,074

 

 

28,600

 

 

Treasury stock at cost, 587,827 and 446,827 shares at September 30, 2017 and December 31, 2016

(746,007

)

 

(517,987

)

 

Additional paid-in capital

83,204,263

 

 

82,451,958

 

 

Accumulated deficit

(32,791,936

)

 

(46,874,205

)

 

Total stockholders’ equity

49,696,716

 

 

35,089,688

 

 

Total liabilities and stockholders’ equity

$

66,609,151

 

 

$

54,996,973

 

 

 

 

Luna Innovations Incorporated
Consolidated Statements of Cash Flows

 

 

Nine Months Ended September 30,

 

2017

 

2016

 

(unaudited)

Cash flows provided by/(used in) operating activities

 

 

 

Net income/(loss)

$

14,179,576

 

 

$

(2,675,626

)

Adjustments to reconcile net income/(loss) to net cash used in operating activities

 

 

 

Depreciation and amortization

2,241,867

 

 

2,759,877

 

Share-based compensation

476,428

 

 

665,354

 

Bad debt expense

40,753

 

 

255,522

 

Loss on disposal of fixed assets

3,640

 

 

 

Gain on sale of discontinued operations

(15,096,666

)

 

 

Change in assets and liabilities

 

 

 

Accounts receivable

2,127,794

 

 

(1,197,885

)

Inventory

(2,251,236

)

 

964,443

 

Other current assets

380,858

 

 

(381,632

)

Accounts payable and accrued expenses

(1,581,608

)

 

(1,055,060

)

Deferred revenue

59,980

 

 

(120,871

)

Net cash provided by/(used in) operating activities

581,386

 

 

(785,878

)

Cash flows provided by/(used in) investing activities

 

 

 

Acquisition of property and equipment

(893,698

)

 

(1,433,260

)

Intangible property costs

(392,485

)

 

(317,287

)

Proceeds from sale of property and equipment

3,000

 

 

 

Proceeds from sales of discontinued operations

28,026,528

 

 

 

Net cash provided by/(used in) investing activities

26,743,345

 

 

(1,750,547

)

Cash flows provided by/(used in) financing activities

 

 

 

Payments on capital lease obligations

(38,752

)

 

(44,404

)

Payments of debt obligations

(1,375,000

)

 

(1,375,000

)

Repurchase of common stock

(228,020

)

 

(325,060

)

Proceeds from the exercise of options

29,020

 

 

 

Net cash used in financing activities

(1,612,752

)

 

(1,744,464

)

Net decrease in cash or cash equivalents

25,711,979

 

 

(4,280,889

)

Cash and cash equivalents-beginning of period

12,802,458

 

 

17,464,040

 

Cash and cash equivalents-end of period

$

38,514,437

 

 

$

13,183,151

 

 

 

Luna Innovations Incorporated
Reconciliation of Net Loss to EBITDA and Adjusted EBITDA

 

 

Three Months Ended
 September 30,

 

 

Nine Months Ended
 September 30,

 

 

2017

 

2016

 

 

2017

 

2016

 

 

(unaudited)

 

 

(unaudited)

 

Net income/(loss)

$

15,757,324

 

 

$

(445,078

)

 

 

$

14,179,576

 

 

$

(2,675,626

)

 

Less income/(loss) from discontinued operations, net of income taxes

15,241,959

 

 

(57,358

)

 

 

14,452,425

 

 

342,685

 

 

Net income/(loss) from continuing operations

515,365

 

 

(387,720

)

 

 

(272,849

)

 

(3,018,311

)

 

Interest expense

55,099

 

 

71,991

 

 

 

179,860

 

 

237,081

 

 

Tax (benefit)/expense

(130,977

)

 

44,797

 

 

 

(63,350

)

 

(173,801

)

 

Depreciation and amortization

279,147

 

 

327,235

 

 

 

929,615

 

 

1,089,240

 

 

EBITDA

718,634

 

 

56,303

 

 

 

773,276

 

 

(1,865,791

)

 

Share-based compensation

154,671

 

 

200,326

 

 

 

476,428

 

 

665,354

 

 

Adjusted EBITDA

$

873,305

 

 

$

256,629

 

 

 

$

1,249,704

 

 

$

(1,200,437

)

 

###

Investor Contact:
Dale Messick, CFO
Luna Innovations Incorporated
Phone: 1.540.769.8400
Email: IR@lunainc.com

 

ROANOKE, Va., November 6, 2017 — Luna Innovations Incorporated (NASDAQ: LUNA) announced today it will report its third quarter financial results for the period ended September  30, 2017, in a conference call with investors. Scott Graeff, president and chief executive officer, and Dale Messick, chief financial officer, will host the call on Monday, November 13, 2017, at 5:00 p.m. (EST).

The investor conference call will be available via live webcast on the Luna website at www.lunainc.com under the tab “Investor Relations.” To participate by telephone, the domestic dial-in number is 844.578.9643 and the international dial-in number is 270.823.1522. The participant access code is 2469766. Investors are advised to dial in at least five minutes prior to the call to register. The webcast will be archived on the company’s website under “Webcasts and Presentations” for 30 days following the conference call.

About Luna:

Luna Innovations Incorporated (www.lunainc.com) is a leader in optical technology, providing unique capabilities in high speed optoelectronics and high performance fiber optic test products for the telecommunications industry and distributed fiber optic sensing for the aerospace and automotive industries. Luna is organized into two business segments which work closely together to turn ideas into products: a Technology Development segment and a Products and Licensing segment. Luna’s business model is designed to accelerate the process of bringing new and innovative technologies to market.

 ###
Investor Contact:
Dale Messick, CFO
Luna Innovations Incorporated
Phone:1.540.769.8400
Email: IR@lunainc.com

 

Dealing with electrical threats in the aerospace community is an extremely difficult and challenging problem.  Electrostatic discharge (ESD) and electromagnetic interference (EMI) can catastrophically damage critical aircraft electronics and jam radio and radar signals. Similarly, ESD and EMI threats can render expensive and mission-critical satellites inoperable. At joints, gaps, and fastener locations it is very important to have continuous electrical conductivity to protect against these unwanted threats and maintain electronic equipment performance. Incumbent solutions involve both an electrical bridging component (e.g. a costly silver adhesive or wire mesh) and a structural adhesive. This multi-material solution results in high costs, extra weight, and application complexity. In response, Luna has developed a solution that reduces material and man-hour costs: Luna’s XPN1 and XPC1 conductive structural adhesives

Figure 2 (Table)

Figure 3Our adhesives provide high strength structural performance coupled with continuous electrical conductivity thereby providing multifunctional service in one adhesive package.  The adhesives are finding use across the aerospace community in situations that require high strength and mitigation of ESD and/or EMI.  The use of our all-in-one adhesives reduce and, in some cases, eliminate the need to outfit structures with costly combinations of electrical and mechanical solutions.

Our adhesives achieve multifunctional performance through the careful incorporation and dispersion of conductive fillers within high performance adhesive resins. This process creates conductive adhesives with working life, cure time, and application and mechanical properties similar to those of the adhesive products currently used by the military, commercial aircraft and spacecraft manufacturers, and maintainers. We have put the adhesives through extensive tests both internally and externally by third party prime integrators. Tests include bond resistance, volume resistivity, shielding effectiveness, lap shear strength, outgassing characteristics, and numerous environmental exposure tests.  Results indicate the adhesives are suitable for a range of stringent performance and environmental applications across the DoD and commercial aerospace. We are actively working with numerous parties to determine the applicability of these adhesives to relevant platforms.

For more information on Luna’s XPN1 conductive structural adhesive, please see our technical data sheet (TDS)

(ROANOKE, Va., October 23, 2017) – Luna Innovations Incorporated (NASDAQ: LUNA), today announced that its board of directors has appointed Scott Graeff as the company’s president and chief executive officer effective immediately.  Graeff, who has been serving as chief strategy officer, treasurer and secretary, replaces My Chung, who has retired from the company.  Graeff will also join the board of directors.

Graeff joined Luna in August 2003. Throughout his tenure, he has held various positions, including chief operating officer, chief financial officer and chief commercialization officer.  In these roles, Graeff assumed the leadership role for numerous significant events in Luna’s history, including its initial public offering, the sale of the fiber optic shape sensing technology to Intuitive Surgical, Inc., the merger with Advanced Photonix, Inc., and most recently, as the acting general manager of the Picometrix Division, the sale of the high-speed optical receivers business to MACOM Technology Solutions Holdings, Inc.

“From the time I joined Luna I’ve been fortunate to have worked with exceptional people across the organization,” Chung said. “Together we positioned the company for future success. I am pleased to hand over leadership responsibilities to Scott.” 

“I have worked closely with Scott since joining the Luna board in 2005 and I am confident he will provide the leadership and continuity for our continued success,” added Richard Roedel, chairman of the board.

“I am very proud and excited to have this opportunity to lead Luna and to continue to execute our growth strategy and guide this company over the long term through the ever-evolving landscape in the fast-paced optical technology industry,” Graeff said. “With industry-leading products and dedicated employees, we are well-positioned to expand our operations and improve our operating results. And as we transition seamlessly to new leadership, I would also like to thank My for his many contributions to our success and wish him all the best in his retirement.”

About Luna:

Luna Innovations Incorporated (www.lunainc.com) is a leader in optical technology, providing unique capabilities in high speed optoelectronics and high performance fiber optic test products for the telecommunications industry and distributed fiber optic sensing for the aerospace and automotive industries. Luna is organized into two business segments which work closely together to turn ideas into products: a Technology Development segment and a Products and Licensing segment. Luna’s business model is designed to accelerate the process of bringing new and innovative technologies to market.

Forward-Looking Statements: 

The statements in this release that are not historical facts constitute “forward-looking statements” made pursuant to the safe harbor provision of the Private Securities Litigation Reform Act of 1995 that involve risks and uncertainties. These statements include the company’s expectations Luna’s growth strategy, the expansion of its operations and its future operating performance. Management cautions the reader that these forward-looking statements are only predictions and are subject to a number of both known and unknown risks and uncertainties, and actual results may differ materially from those expressed or implied by these forward-looking statements as a result of a number of factors. These factors include, without limitation, failure of demand for the company’s products and services to meet expectations, technological challenges and those risks and uncertainties set forth in the company’s periodic reports and other filings with the Securities and Exchange Commission (“SEC”). Such filings are available on the SEC’s website at www.sec.gov and on the company’s website at www.lunainc.com. The statements made in this release are based on information available to the company as of the date of this release and Luna undertakes no obligation to update any of the forward-looking statements after the date of this release.

 ###

Investor Contact:
Dale Messick, CFO
Luna Innovations Incorporated
Phone: 1.540.769.8400
Email: IR@lunainc.com

 

You will soon find Luna in Novi, Michigan exhibiting at the upcoming Automotive Testing Expo, October 24-26.  Held in The Suburban Collection Showplace, this event is America’s largest vehicle and component test and validation exhibition with over 340 exhibitors.  Luna is excited to be one of them! 

Visit us at booth #3020.  Register for your free pass here! 

We will be showcasing our ODiSI High-Definition strain and temperature measurement system that offers unprecedented visibility into the thermal and structural performance of materials from parts to structures, batteries and powertrains.  The ODiSI employs a revolutionary technique that enables up to 15,000 gages to be multiplexed on a single, lightweight and easy to install fiber optic sensor. Whether it’s verifying the model of a complex part through complete strain measurement, enhancing the strength of a multi-material joint through a built in strain measurement or enhancing the efficiency of your EV powertrain design, ODiSI will improve your design quality and accelerate time to market.


 

October 24-26, 2017
The Suburban Showplace Collection | Novi, MI
Booth #:  3020

http://www.testing-expo.com/usa/

December 12-14, 2017
Orange County Convention Center | Orlando, FA
Booth #:  G79

Originally scheduled for September, this event was rescheduled due to Hurricane Irma.

http://www.thecamx.org/

Join us for a presentation!  

Extracting Information from Damaged Carbon Fiber Composites Using High Definition Fiber Optic Sensing (HD-FOS)

Date:  December 14, 2017
Time:  8:30 a.m.
Location:  Room W208C