Menu

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

ROANOKE, VA, (September 20, 2017) Luna Innovations Incorporated (NASDAQ: LUNA) today announced that its Board of Directors has reinstituted the Company’s stock repurchase program and authorized the repurchase of up to $2.0 million of Luna’s common stock.  Luna’s prior stock repurchase program expired on May 31, 2017.

“Reflecting our continuing commitment to building shareholder value, this new stock repurchase program provides us with additional flexibility to utilize capital meaningfully and productively,” said My Chung, president and chief executive officer of Luna.

The number of shares repurchased and the timing of repurchases will depend on a number of factors, including, but not limited to, share price, trading volume and general market conditions, along with Luna’s working capital requirements, general business conditions and other factors. Under its share repurchase program, the company may, from time to time, purchase shares of its common stock through various means, including open market transactions, privately negotiated transactions or tender offers. Open market repurchases of common stock may be made pursuant to trading plans established pursuant to Rule 10b5-1 under the Securities Exchange Act of 1934, which would permit common stock to be repurchased at a time that Luna might otherwise be precluded from doing so under insider trading laws.  The $2.0 million share repurchase authorization expires on September 19, 2018 (unless extended), and does not obligate Luna to purchase any shares. The authorization for the share repurchase program may be terminated, increased or decreased by the Board of Directors at any time.

The stock repurchase program will be funded using Luna’s working capital. As of June 30, 2017, Luna had cash and cash equivalents of approximately $10.3 million.  As previously announced, on August 9, 2017, the company completed the sale of its high speed optical receiver business for $33.5 million, of which $29.5 million was received by Luna upon closing of the transaction and $4.0 million was placed in escrow. 

Luna had approximately 27.7 million shares of common stock outstanding as of June 30, 2017.

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 timing, amount, methods and funding sources of future repurchases of its common stock. 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, changes in Luna’s stock price, the trading volume of the company’s stock, the nature of other investment opportunities presented to the company from time to time, the company’s cash flows from operations, general economic conditions, 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, except as required by law.

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

###

Net loss improved to $(0.2) million for the three months ended June 30, 2017 compared to $(0.8) million for the three months ended June 30, 2016.  Adjusted EBITDA improved to $0.8 million for the three months ended June 30, 2017 compared to $0.4 million for the three months ended June 30, 2016.

(ROANOKE, VA, August 10, 2017) – Luna Innovations Incorporated (NASDAQ: LUNA) today announced its financial results for the three and six months ended June 30, 2017.

For the three months ended June 30, 2017, Luna reported revenues of $13.6 million and a net loss of $(0.2) million compared to revenues of $14.6 million and a net loss of $(0.8) million for the three months ended June 30, 2016. Adjusted earnings before interest, taxes, depreciation and amortization (“Adjusted EBITDA”) was $0.8 million for the three months ended June 30, 2017 compared to $0.4 million for the three months ended June 30, 2016.  A reconciliation of net loss to Adjusted EBITDA can be found in the schedules included in this release.

“The second quarter saw a significant rebound in sales of our test & measurement instruments,” said My Chung, president and chief executive officer of Luna. “Product sales in our Luna Technologies brand in the second quarter increased 22% year over year and 62% sequentially, substantially offsetting the financial impact of continued softness in the China market for optical receivers.  With the higher margins provided by growth in our test & measurement product sales and continued focus on expense control, we improved our net loss by $0.5 million year over year.  The recently announced sale of our high speed optical receiver business provides the opportunity for a more dedicated focus on growing the higher margin instrument business.”

Second Quarter Financial Summary

Total revenues for the three months ended June 30, 2017 were $13.6 million compared to $14.6 million for the three months ended June 30, 2016.  Technology development revenues increased 12% to $4.6 million for the three months ended June 30, 2017, compared to $4.1 million for the three months ended June 30, 2016.  Products and licensing revenues were $9.0 million for the three months ended June 30, 2017, compared to $10.5 million for the three months ended June 30, 2016. The decrease in Products and licensing revenues was primarily driven by lower sales of Luna’s 100G integrated coherent receivers in China.

Gross profit was $5.1 million, or 37% of revenues, for the three months ended June 30, 2017, compared to gross profit of $5.2 million, or 35% of revenues, for the three months ended June 30, 2016.   The increase in gross margin in the second quarter of 2017 resulted from increased sales of test & measurement products, which typically have higher average margins than Luna’s other products and services.

Selling, general and administrative expenses were $3.9 million for the three months ended June 30, 2017, compared to $4.6 million for the three months ended June 30, 2016.  The decrease in selling, general and administrative expense was due to a $0.2 million decrease in incentive compensation, a $0.1 million reduction in share-based compensation expense, a $0.2 million reduction in sales-related expenses, and a $0.1 million reduction in amortization expense.

Research, development and engineering expenses increased slightly to $1.3 million for the three months ended June 30, 2017 compared to $1.2 million for the three months ended June 30, 2016.

Operating loss improved to $(0.1) million for the three months ended June 30, 2017, compared to an operating loss of $(0.7) million for the three months ended June 30, 2016.  Net loss attributable to common stockholders improved to $(0.3) million for the three months ended June 30, 2017, compared to a net loss attributable to common stockholders of $(0.8) million for the three months ended June 30, 2016.  Adjusted EBITDA was $0.8 million for the three months ended June 30, 2017 compared to $0.4 million for the three months ended June 30, 2016.

 Year to Date Financial Summary

Total revenues for the six months ended June 30, 2017, were $26.7 million, compared to $28.6 million for the six months ended June 30, 2016.  Technology development revenues increased 13% to $8.9 million for the six months ended June 30, 2017, compared to $7.9 million for the six months ended June 30, 2016.  Products and licensing revenues were $17.8 million for the six months ended June 30, 2017, compared to $20.8 million for the six months ended June 30, 2016.  Revenues from sales of test & measurement instruments increased 16%, partially offsetting lower revenues from high speed optical receiver products in China.

Gross profit decreased to $9.8 million, or 37%, of revenues for the six months ended June 30, 2017, compared to $10.0 million, or 35% of revenues, for the six months ended June 30, 2016.

Selling, general and administrative expenses decreased to $8.4 million for the six months ended June 30, 2017, compared to $9.2 million for the six months ended June 30, 2016.  The decrease in selling, general and administrative expenses resulted primarily from lower selling related expenses due to lower revenues in the products and licensing segment in addition to lower share based compensation expense.

Research, development and engineering expenses were substantially unchanged at $2.7 million for the six months ended June 30, 2017 and $2.8 million for the six months ended June 30, 2016.

Operating loss improved to $(1.4) million for the six months ended June 30, 2017, compared to $(2.0) million for the six months ended June 30, 2016. Net loss attributable to common stockholders improved to $(1.6) million for the six months ended June 30, 2017, compared to $(2.3) million for the six months ended June 30, 2016.  Adjusted EBITDA increased to $0.7 million for the six months ended June 30, 2017, compared to $0.3 million for the six months ended June 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 11:30 a.m. (EDT) today to discuss its financial results for the three and six months ended June 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 56973945. 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 potential benefits of Luna’s sale of its high speed optical receiver business. 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
 June 30,

 

 

Six Months Ended
 June 30,

 

 

2017

 

2016

 

 

2017

 

2016

 

 

(unaudited)

 

 

(unaudited)

 

Revenues:

 

 

 

 

 

 

 

 

 

Technology development

$

4,625,175

 

 

$

4,137,382

 

 

 

$

8,901,624

 

 

$

7,860,644

 

 

Products and licensing

8,951,296

 

 

10,509,522

 

 

 

17,793,232

 

 

20,773,273

 

 

Total revenues

13,576,471

 

 

14,646,904

 

 

 

26,694,856

 

 

28,633,917

 

 

Cost of revenues:

 

 

 

 

 

 

 

 

 

Technology development

3,439,118

 

 

3,181,447

 

 

 

6,661,474

 

 

6,061,282

 

 

Products and licensing

5,056,449

 

 

6,294,607

 

 

 

10,277,225

 

 

12,558,180

 

 

Total cost of revenues

8,495,567

 

 

9,476,054

 

 

 

16,938,699

 

 

18,619,462

 

 

Gross profit

5,080,904

 

 

5,170,850

 

 

 

9,756,157

 

 

10,014,455

 

 

Operating expense:

 

 

 

 

 

 

 

 

 

Selling, general and administrative

3,936,207

 

 

4,581,776

 

 

 

8,431,911

 

 

9,227,060

 

 

Research, development and engineering

1,263,911

 

 

1,240,655

 

 

 

2,708,738

 

 

2,791,146

 

 

Total operating expense

5,200,118

 

 

5,822,431

 

 

 

11,140,649

 

 

12,018,206

 

 

Operating loss

(119,214

)

 

(651,581

)

 

 

(1,384,492

)

 

(2,003,751

)

 

Other income (expense):

 

 

 

 

 

 

 

 

 

Other expense

(1,225

)

 

(39,489

)

 

 

(869

)

 

(35,545

)

 

Interest expense

(60,386

)

 

(78,906

)

 

 

(124,760

)

 

(165,079

)

 

Total other expense

(61,611

)

 

(118,395

)

 

 

(125,629

)

 

(200,624

)

 

Loss before income taxes

(180,825

)

 

(769,976

)

 

 

(1,510,121

)

 

(2,204,375

)

 

Income tax expense

40,937

 

 

1,000

 

 

 

67,627

 

 

26,175

 

 

Net loss

(221,762

)

 

(770,976

)

 

 

(1,577,748

)

 

(2,230,550

)

 

Preferred stock dividend

29,536

 

 

24,580

 

 

 

63,632

 

 

45,790

 

 

Net loss attributable to common stockholders

$

(251,298

)

 

$

(795,556

)

 

 

$

(1,641,380

)

 

$

(2,276,340

)

 

Net loss per share attributable to common stockholders:

 

 

 

 

 

 

 

 

 

Basic and diluted

$

(0.01

)

 

$

(0.03

)

 

 

$

(0.06

)

 

$

(0.08

)

 

Weighted average common shares and common equivalent shares outstanding:

 

 

 

 

 

 

 

 

 

Basic and diluted

27,600,147

 

 

27,557,960

 

 

 

27,570,919

 

 

27,517,792

 

 

 

Luna Innovations Incorporated
Consolidated Balance Sheets

 

 

June 30, 2017

 

December 31, 2016

 

 

(unaudited)

 

 

 

Assets

 

 

 

 

Current assets:

 

 

 

 

Cash and cash equivalents

$

10,291,255

 

 

$

12,802,458

 

 

Accounts receivable, net

13,150,291

 

 

14,297,725

 

 

Inventory

9,540,754

 

 

8,370,235

 

 

Prepaid expenses and other current assets

1,266,090

 

 

1,627,175

 

 

Total current assets

34,248,390

 

 

37,097,593

 

 

Property and equipment, net

6,882,576

 

 

6,780,838

 

 

Intangible assets, net

8,003,009

 

 

8,681,263

 

 

Goodwill

2,348,331

 

 

2,348,331

 

 

Other assets

68,778

 

 

88,948

 

 

Total assets

$

51,551,084

 

 

$

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

52,404

 

 

52,128

 

 

Accounts payable

3,958,144

 

 

4,466,192

 

 

Accrued liabilities

8,131,316

 

 

8,667,100

 

 

Deferred revenue

946,146

 

 

949,603

 

 

Total current liabilities

14,921,343

 

 

15,968,356

 

 

Long-term deferred rent

1,337,893

 

 

1,403,957

 

 

Long-term debt obligations

1,511,520

 

 

2,420,032

 

 

Long-term capital lease obligations

89,054

 

 

114,940

 

 

Total liabilities

17,859,810

 

 

19,907,285

 

 

Commitments and contingencies

 

 

 

 

Stockholders’ equity:

 

 

 

 

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

1,322

 

 

1,322

 

 

Common stock, par value $0.001, 100,000,000 shares authorized, 28,226,436 and 27,988,104 shares issued, 27,688,710 and 27,541,277 shares outstanding at June 30, 2017 and December 31, 2016

28,878

 

 

28,600

 

 

Treasury stock at cost, 537,727 and 446,827 shares at June 30, 2017 and December 31, 2016

(661,253

)

 

(517,987

)

 

Additional paid-in capital

82,837,888

 

 

82,451,958

 

 

Accumulated deficit

(48,515,561

)

 

(46,874,205

)

 

Total stockholders’ equity

33,691,274

 

 

35,089,688

 

 

Total liabilities and stockholders’ equity

$

51,551,084

 

 

$

54,996,973

 

 

 

 

Luna Innovations Incorporated
Consolidated Statements of Cash Flows

 

 

Six Months Ended June 30,

 

2017

 

2016

 

(unaudited)

Cash flows provided by/(used in) operating activities

 

 

 

Net loss

$

(1,577,748

)

 

$

(2,230,550

)

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

 

 

 

Depreciation and amortization

1,753,748

 

 

1,861,603

 

Share-based compensation

321,756

 

 

465,028

 

Bad debt expense

40,753

 

 

50,515

 

Gain on disposal of fixed assets

(670

)

 

 

Change in assets and liabilities

 

 

 

Accounts receivable

1,106,681

 

 

(167,749

)

Inventory

(1,170,519

)

 

474,072

 

Other current assets

325,005

 

 

(306,371

)

Accounts payable and accrued expenses

(1,109,870

)

 

(1,076,784

)

Deferred revenue

(3,457

)

 

(81,830

)

Net cash used in operating activities

(314,321

)

 

(1,012,066

)

Cash flows provided by/(used in) investing activities

 

 

 

Acquisition of property and equipment

(796,217

)

 

(1,294,775

)

Intangible property costs

(318,942

)

 

(244,198

)

Proceeds from sale of property and equipment

3,000

 

 

 

Net cash used in investing activities

(1,112,159

)

 

(1,538,973

)

Cash flows provided by/(used in) financing activities

 

 

 

Payments on capital lease obligations

(25,611

)

 

(32,149

)

Payments of debt obligations

(916,666

)

 

(916,667

)

Repurchase of common stock

(143,266

)

 

(156,386

)

Proceeds from the exercise of options

820

 

 

 

Net cash used in financing activities

(1,084,723

)

 

(1,105,202

)

Net decrease in cash or cash equivalents

(2,511,203

)

 

(3,656,241

)

Cash and cash equivalents-beginning of period

12,802,458

 

 

17,464,040

 

Cash and cash equivalents-end of period

$

10,291,255

 

 

$

13,807,799

 

 

 

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

 

 

Three Months Ended
 June 30,

 

 

Six Months Ended
 June 30,

 

 

2017

 

2016

 

 

2017

 

2016

 

 

(unaudited)

 

 

(unaudited)

 

Net loss

$

(221,762

)

 

$

(770,976

)

 

 

$

(1,577,748

)

 

$

(2,230,550

)

 

Interest expense

60,386

 

 

78,906

 

 

 

124,760

 

 

165,079

 

 

Tax expense

40,937

 

 

1,000

 

 

 

67,627

 

 

26,175

 

 

Depreciation and amortization

792,983

 

 

921,802

 

 

 

1,753,748

 

 

1,861,603

 

 

EBITDA

672,544

 

 

230,732

 

 

 

368,387

 

 

(177,693

)

 

Share-based compensation

151,672

 

 

206,225

 

 

 

321,756

 

 

465,028

 

 

Adjusted EBITDA

$

824,216

 

 

$

436,957

 

 

 

$

690,143

 

 

$

287,335

 

 

###

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

 

MACOM buys assets and technology for HSOR business for $33.5 million; Luna to retain Terahertz technology

ROANOKE, VA, (August 9, 2017) Luna Innovations Incorporated (NASDAQ: LUNA), which develops and manufactures new-generation products for the aerospace, automotive, energy, defense, and telecommunications markets, today announced that MACOM Technology Solutions Holdings, Inc.  (NASDAQ: MTSI) has agreed to buy the assets and operations related to its high-speed optical receivers (HSOR) business.

The sale includes the operations associated with Luna’s development, manufacturing and sales of products such as high-speed integrated coherent receivers and photodiodes. Luna originally acquired these operations as part of its merger with Advanced Photonix, Inc. (API), in May 2015. The assets and employees associated with Luna’s Terahertz operations are not transferred in this transaction.

“Since the merger with API, we have invested substantial time and resources into the HSOR business as a significant growth area,” said My Chung, President and Chief Executive Officer of Luna.  “As a result of that investment, we have developed leading products and technologies in that marketplace. MACOM has recognized the value that we have created in this space and earlier this year approached us with this transaction opportunity. With their larger scale of operations, broader suite of product offerings and global footprint, we believe that MACOM provides a greater opportunity to drive long-term growth for the HSOR business, and the completion of this sale maximizes the value we would receive from the HSOR business.”

As part of the transaction, employees associated with the company’s HSOR operations and administration in the company’s location in Ann Arbor, Mich., will transfer to MACOM.  The Picometrix line of high-speed optical receivers and optical-to-electrical converters serve the global telecommunications, data center and manufacturing testing industries.

“Similar to our High Performance Analog and 25G laser products, Luna’s industry-leading high speed optical receiver products and technology are well-aligned with MACOM’s previously-announced growth strategy in Cloud Data Centers and other high-speed networking markets, and we are excited to be able to add these products to our growing portfolio through this tuck-in acquisition,” said John Croteau, MACOM’s President and CEO. “We expect the transaction to be neutral to accretive in the first year of combined operations, and to contribute meaningfully to growth in our Fiscal Year 2018.  We look forward to bringing this talented group of individuals into the MACOM organization as we move ahead in meeting the evolving demands of the communications markets.”

“We are delighted with the outcome of the transaction and the value we have created for Luna’s stockholders,” Chung said. “We are especially grateful to the dedicated employees in the HSOR business whose skills and efforts have resulted in building this valuable business.”

The purchase price includes $29.5 million paid in cash at closing and additional $4.0 million to be held in escrow until December 15, 2018 for possible working capital adjustments to the purchase price and potential satisfaction of certain post-closing indemnification obligations.

Luna currently intends to utilize a portion of the proceeds of the transaction to invest in expanding its fiber optic sensing product offering.

Mr. Chung and Dale Messick, Luna’s Chief Financial Officer, will host a conference call with investors in conjunction with the company’s earnings call on Thursday, August 10, 2017 at 11:30 a.m. (EDT) to discuss the transaction. The 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 56973945. 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 (NASDAQ: LUNA) 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. To learn more, please visit www.lunainc.com.

About Macom

MACOM enables a better-connected and safer world by delivering breakthrough semiconductor technologies for optical, wireless and satellite networks that satisfy society’s insatiable demand for information. Today, MACOM powers the infrastructure that millions of lives and livelihoods depend on every minute to communicate, transact business, travel, stay informed and be entertained. Our technology increases the speed and coverage of the mobile Internet and enables fiber optic networks to carry previously unimaginable volumes of traffic to businesses, homes and datacenters. Keeping us all safe, MACOM technology enables next-generation radars for air traffic control and weather forecasting, as well as mission success on the modern networked battlefield. MACOM is a pillar of the semiconductor industry, thriving for more than 60 years of daring to change the world for the better, through bold technological strokes that deliver true competitive advantage to customers and superior value to investors. For more information visit: www.macom.com.

Forward Looking Statements

This release includes information that constitutes “forward-looking statements” made pursuant to the safe harbor provision of the Private Securities Litigation Reform Act of 1995, including statements regarding, but not limited to statements concerning, the final purchase price of the HSOR business, the amount of any post-closing adjustments to the purchase price, the potential release of the escrowed purchase amount, MACOM’s plans and expectations for the HSOR business, any expected contributions to MACOM’s growth, operations and future financial results, the impact of the transaction on MACOM’s market position and ability to meet the expectations of any market, MACOM’s plans to transfer the HSOR employees into its business,  and Luna’s planned use of proceeds from the transaction.  Actual results may differ materially from the expectations expressed in such forward-looking statements as a result of various factors, including the final determination of the amount of the working capital adjustment required by the purchase agreement, potential post-closing indemnity claims, if any, the future development of Luna’s various remaining businesses and investment opportunities that are available to Luna, and risks and uncertainties set forth in Luna’s and MACOM’s periodic reports and other filings with the Securities and Exchange Commission. Such filings are available at the SEC’s website at http://www.sec.gov, at MACOM’s website at http://www.macom.com, and at Luna’s website at http://www.lunainc.com. The statements made in this release are based on information available to Luna and MACOM as of the date of this release and each company undertakes no obligation to update any of the forward-looking statements after the date of this release.

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

###

ROANOKE, Va., August 7, 2017 — Luna Innovations Incorporated (NASDAQ: LUNA) announced today it will report its second quarter financial results for the period ended June  30, 2017, in a conference call with investors. My Chung, president and chief executive officer, and Dale Messick, chief financial officer, will host the call on Thursday, August 10, 2017, at 11:30 a.m. (EDT).

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 56973945. 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