Luna Innovations Reports First-Quarter 2022 Results
- Total revenues of $22.5 million for the three months ended March 31, 2022, up 7% compared to the three months ended March 31, 2021
- Gross margin of 64% for the three months ended March 31, 2022, compared to 58% for the three months ended March 31, 2021
- Operating loss of $2.4 million for the three months ended March 31, 2022, compared to operating loss of $1.6 million for the three months ended March 31, 2021
- Net income of $9.6 million for the three months ended March 31, 2022, which includes the gain on sale of Luna Labs, compared to net loss of $0.3 million for the three months ended March 31, 2021
- Adjusted EBITDA of $1.7 million for the three months ended March 31, 2022, compared to $1.3 million for the three months ended March 31, 2021
- Adjusted EPS of $0.05 for the three months ended March 31, 2022, compared to $0.03 for the three months ended March 31, 2021
(ROANOKE, VA, May 16, 2022) - Luna Innovations Incorporated (NASDAQ: LUNA), a global leader in advanced optical technology, today announced its financial results for the three months ended March 31, 2022. The first-quarter 2022 results include two weeks of Lios, Luna's newest acquisition.
"I'm very pleased with our first-quarter performance as the Luna team delivered a solid start to 2022," said Scott Graeff, President and Chief Executive Officer of Luna. "We surpassed the top end of the Q1 revenue guidance we provided in March, while completing significant events including the divestiture of Luna Labs, the acquisition of Lios and the complete absorption of OptaSense into our operations. And, as always, the Luna team is laser-focused on executing against our strategy. During the past year, you've seen us make some strategic moves to refresh our product lines and broaden our IP. We've done this to leverage and incorporate the best of our organic portfolio with cutting-edge technology and products from recent acquisitions to create highly competitive product offerings."
Graeff continued, "As a result of the moves we've made, today Luna is a company with blue-chip customers, over a dozen of which are long-term, resulting in many large, multi-unit purchase orders. For example, we've gone from shipping one or two boxes to being completely integrated into Lockheed Martin's F-35 global program. I'm incredibly proud of the team for managing through the numerous puts and takes over the past six quarters, as we solidify Luna as a clear leader and a company fully focused on Enabling the Future with Fiber."
First-Quarter Fiscal 2022 Financial Summary
Highlights of the financial results for the three months ended March 31, 2022 are:
|Three Months Ended March 31,||Change|
|(in thousands, except share and per share data)||2022||2021|
|Revenues||$ 22,481||$ 20,997||7||%|
|Gross margin||64 %||58 %|
|Operating margin||(11) %||(8) %|
|Other expense and income tax benefit||1,023||521|
|Net loss from continuing operations||$ (1,343)||$ (1,059)|
|Income from discontinued operations, net of income taxes||10,924||740|
|Net income/(loss)||$ 9,581||$ (319)|
|Earnings/(loss) per diluted share (EPS)||$ 0.30||$ (0.01)|
|Adjusted EPS||$ 0.05||$ 0.03||67||%|
|Diluted weighted average shares outstanding||32,243,082||31,350,629|
|Adjusted EBITDA||$ 1,721||$ 1,331||29||%|
A reconciliation of Adjusted EPS and Adjusted EBITDA to the nearest comparable figures under generally accepted accounting principles ("GAAP") can be found in the schedules included in this release.
Revenues for the three months ended March 31, 2022 increased 7% compared to the prior-year period, primarily due to revenue generated by the Lios acquisition.
Gross margin increased to 64% for the three months ended March 31, 2022, compared to 58% for the three months ended March 31, 2021, driven primarily by favorable product mix. Operating loss and margin were $2.4 million and 11% of total revenues, respectively, for the three months ended March 31, 2022, compared to $1.6 million and 8% of total revenues, respectively, for the three months ended March 31, 2021. The increase in operating loss was primarily due to an increase in deal and integration costs related to the acquisition of Lios.
Net income was $9.6 million, or $0.30 per fully diluted share, for the three months ended March 31, 2022, compared to net loss of $0.3 million, or $0.01 per fully diluted share, for the three months ended March 31, 2021. Adjusted EPS was $0.05 for the three months ended March 31, 2022 compared to $0.03 for the three months ended March 31, 2021.
Adjusted EBITDA was $1.7 million for three months ended March 31, 2022, compared to $1.3 million for the three months ended March 31, 2021.
2022 Full-Year Outlook
Luna is confirming the 2022 outlook it originally provided on March 14, 2022, which included the mid-March divestiture of Luna Labs and the acquisition of Lios:
- Total revenue of $109 million to $115 million for the full year 2022
- Adjusted EBITDA of $10 million to $12 million for the full year 2022
- Total revenues in the range of $25 million to $27 million for the second quarter 2022
Luna is not providing an outlook for net income, which is the most directly comparable GAAP measure to Adjusted EBITDA, because changes in the items that Luna excludes from net income to calculate Adjusted EBITDA, such as share-based compensation, tax expense, and significant non-recurring charges, among other things, can be dependent on future events that are less capable of being controlled or reliably predicted by management and are not part of Luna's routine operating activities.
The outlook above does not include any future acquisitions, divestitures, or unanticipated events.
Non-GAAP Financial Measures
In evaluating the operating performance of its business, Luna’s management considers Adjusted EBITDA and Adjusted EPS, which exclude certain charges and income that are required by GAAP. Adjusted EBITDA and Adjusted EPS provide 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 and Adjusted EPS 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 and Adjusted EPS have 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 8:30 am (ET) today to discuss its financial results for the three months ended March 31, 2022. 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 6847538. 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.
Luna Innovations Incorporated (www.lunainc.com) is a leader in optical technology, providing unique capabilities in high-performance, fiber optic-based, test products for the telecommunications industry and distributed fiber optic-based sensing for a multitude of industries. Luna’s business model is designed to accelerate the process of bringing new and innovative technologies to market.
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 its projected 2022 financial results and outlook, and the Company's growth potential. 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, failure of target market to grow and expand, technological and strategic challenges, uncertainties related to the ultimate impact of the COVID-19 pandemic and those risks and uncertainties set forth in Luna’s Form 10-Q for the quarter ended March 31, 2022, and Luna's other periodic reports and 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.