LASR nLIGHT Inc

Revenues of $53.3 million and products gross margin of 29% for the second quarter of 2023

nLIGHT, Inc. (Nasdaq: LASR), a leading provider of high-power semiconductor and fiber lasers used in the industrial, microfabrication, and aerospace and defense markets, today reported financial results for the second quarter of 2023.

“Our second quarter performance reflects the continued progress towards our strategic growth initiatives, particularly in Aerospace & Defense,” commented Scott Keeney, nLIGHT’s President and Chief Executive Officer. “A&D revenue increased 9% year-over-year and we began work on the second phase of the HELSI program. In our commercial markets, we continue to leverage our unique Corona programmable fiber lasers to offer differentiated solutions across each of our Industrial applications. In addition, we saw increased adoption of our process monitoring solutions for EV battery applications.”

Mr. Keeney continued, “Our focus on driving profitable growth resulted in second quarter revenue and Adjusted EBITDA above the mid-point of our guidance range. While we continue to face macroeconomic headwinds, recent defense program wins and continued adoption of our innovative semiconductor and fiber laser solutions make us optimistic for strong growth in subsequent quarters and into 2024.”

Second Quarter 2023 Financial Highlights

 

Three Months Ended June 30,

 

 

(In thousands, except percentages)

 

2023

 

 

 

2022

 

 

% Change

Revenues

$

53,304

 

 

$

60,827

 

 

(12.4

)%

Gross margin

 

22.7

%

 

 

25.3

%

 

 

Loss from operations

$

(11,686

)

 

$

(10,317

)

 

(13.3

)%

Operating margin

 

(21.9

)%

 

 

(17.0

)%

 

 

Net loss

$

(8,823

)

 

$

(10,342

)

 

14.7

%

Adjusted EBITDA(1)

$

(150

)

 

$

168

 

 

(189.3

)%

Adjusted EBITDA, as percentage of revenues

 

(0.3

)%

 

 

0.3

%

 

 

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

Revenues of $53.3 million for the second quarter of 2023 were down 12.4% compared to $60.8 million for the second quarter of 2022. Gross margin was 22.7% for the second quarter of 2023 compared to 25.3% for the second quarter of 2022. GAAP net loss for the second quarter of 2023 was $8.8 million, or net loss of $0.19 per diluted share, compared to net loss of $10.3 million, or $0.23 per diluted share, for the second quarter of 2022. Non-GAAP net loss for the second quarter of 2023 was $0.9 million, or $0.02 per diluted share, compared to non-GAAP net loss of $3.3 million, or $0.07 per diluted share, for the second quarter of 2022. Reconciliations of the non-GAAP measures presented here to the most directly comparable GAAP measures have been provided in the tables included at the end of this release.

Outlook

For the third quarter of 2023, nLIGHT expects revenues to be in the range of $47 million to $51 million. The midpoint of $49 million includes Laser Products revenue of approximately $36 million and Advanced Development revenue of approximately $13 million. nLIGHT expects overall gross margin to be in the range of 22% to 25%, with Laser Products gross margin in the range of 27% to 31% and Advanced Development gross margin of approximately 7%. nLIGHT expects Adjusted EBITDA to be in the range of $(3) million to break-even.

We have not reconciled our outlook for Adjusted EBITDA because unrealized and realized foreign exchange gains and losses cannot be reasonably calculated or predicted nor can the probable significance be determined at this time. Accordingly, a reconciliation is not available without unreasonable effort.

Investor Conference Call at 2:00 p.m. Pacific Time, Thursday, August 3, 2023

Parties interested in listening to nLIGHT’s quarterly conference call may do so by dialing 1-844-282-4705 (U.S., toll-free) or +1-412-317-5625 (international and toll), with the conference title: nLIGHT Second Quarter 2023 Earnings. The call can also be accessed via the web by going to nLIGHT’s Investor Relations page at http://investors.nlight.net.

Use of Non-GAAP Financial Results

In addition to U.S. GAAP results, this press release contains non-GAAP financial results, including Adjusted EBITDA, non-GAAP net income (loss) and non-GAAP net income (loss) per share, basic and diluted. We use Adjusted EBITDA to help us evaluate our business, measure our performance, identify trends affecting our business, formulate business plans and make strategic decisions. In addition to our results determined in accordance with GAAP, we believe Adjusted EBITDA is a meaningful measure of performance as it is commonly utilized by us and the investment community to analyze operating performance in our industry. Similarly, we believe that providing non-GAAP net income (loss) and non-GAAP net income (loss) per share, basic and diluted, is useful to our investors as they present an informative supplemental view of our results from period to period by removing the effect of stock-based compensation expense and other non-recurring items. However, the non-GAAP metrics presented herein are specific to us and may not be comparable to similar metrics disclosed by other companies because of differing methods used by other companies in calculating them.

We define Adjusted EBITDA as net income (loss) adjusted for income tax expense (benefit), other non-operating income or expense, interest income or expense, depreciation and amortization, stock-based compensation, acquisition and integration-related costs, and other non-recurring items as determined by management, as applicable. We define non-GAAP net income (loss) as GAAP net income (loss) adjusted for stock-based compensation, amortization of purchased intangibles, acquisition and integration-related costs, and other non-recurring items as determined by management, as applicable. We define non-GAAP net income (loss) per share, basic and diluted, as non-GAAP net income (loss) divided by weighted-average shares outstanding during the respective period plus the dilutive effect of any common stock equivalents during the period in the case of non-GAAP net income (loss) per share, diluted.

Tables presenting the reconciliation of net loss to Adjusted EBITDA, as well as the reconciliation of GAAP to non-GAAP net income (loss) and GAAP to non-GAAP net income (loss) per share, basic and diluted, are included at the end of this press release.

Safe Harbor Statement

Certain statements in this release are “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, Section 21E of the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995. Words such as “outlook,” “guidance,” “expects,” “intends,” “projects,” “plans,” “believes,” “estimates,” “targets,” “anticipates,” and similar expressions may identify these forward-looking statements. Examples of forward-looking statements include, but are not limited to, statements regarding expected revenues, gross margin, and Adjusted EBITDA, as well as any other statement that does not directly relate to any historical or current fact. Forward-looking statements are based on our current expectations and assumptions, which may not prove to be accurate. These statements are not guarantees and are subject to risks, uncertainties and changes in circumstances that are difficult to predict. Many factors could cause actual results to differ materially and adversely from these forward-looking statements, including but not limited to our ability to compete successfully in the markets for our products; changes in the markets we serve or in the global economy; our ability to increase our volumes and decrease our costs to offset potential declines in the average selling prices of our products; rapid technological changes in the markets that we participate in; our ability to develop and maintain products that can achieve market acceptance; our ability to generate sufficient revenues to achieve or maintain profitability in the future; our high levels of fixed costs and inventory and their effect on our gross profits and results of operations if demand for our products declines or we maintain excess inventory levels; widespread health crises, such as the COVID-19 pandemic, and their effect on our business, financial condition, or results of operations; our manufacturing capacity and operations and their suitability for future levels of demand; our reliance on a small number of customers for a significant portion of our revenues; our ability to manage risks associated with international customers and operations; the effect of government export and import controls on our ability to compete in international markets; our ability to protect our proprietary technology and intellectual property rights; fluctuations in our quarterly results of operations and other operating measures; and the effect on our business of claims, lawsuits, government investigations, other legal or regulatory proceedings, or commercial or contractual disputes that we are or may become involved in. Additional information concerning these and other factors can be found in nLIGHT's filings with the Securities and Exchange Commission (the “SEC”), including other risks, relevant factors and uncertainties identified in the “Risk Factors” section of nLIGHT's most recent Annual Report on Form 10-K and subsequent filings with the SEC. nLIGHT undertakes no obligation to update publicly or revise any forward-looking statements contained herein to reflect future events or developments, except as required by law.

The nLIGHT logo and “nLIGHT” are registered trademarks or trademarks of nLIGHT, Inc. in various jurisdictions.

About nLIGHT

nLIGHT, Inc. is a leading provider of high-power semiconductor and fiber lasers for industrial, microfabrication, aerospace and defense applications. Our lasers are changing not only the way things are made but also the things that can be made. Headquartered in Camas, Washington, nLIGHT employs over 1,000 people with operations in the United States, Austria, China, Finland, Korea, and Italy. For more information, please visit www.nlight.net.

nLIGHT, Inc.

Consolidated Statements of Operations

(In thousands, except per share data)

(Unaudited)

 

 

 

 

 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

 

2023

 

 

 

2022

 

 

 

2023

 

 

 

2022

 

Revenue:

 

 

 

 

 

 

 

Products

$

39,592

 

 

$

48,180

 

 

$

80,699

 

 

$

99,241

 

Development

 

13,712

 

 

 

12,647

 

 

 

26,696

 

 

 

26,045

 

Total revenue

 

53,304

 

 

 

60,827

 

 

 

107,395

 

 

 

125,286

 

Cost of revenue:

 

 

 

 

 

 

 

Products

 

28,272

 

 

 

33,683

 

 

 

55,798

 

 

 

69,451

 

Development

 

12,924

 

 

 

11,759

 

 

 

25,226

 

 

 

24,273

 

Total cost of revenue(1)

 

41,196

 

 

 

45,442

 

 

 

81,024

 

 

 

93,724

 

Gross profit

 

12,108

 

 

 

15,385

 

 

 

26,371

 

 

 

31,562

 

Operating expenses:

 

 

 

 

 

 

 

Research and development(1)

 

12,004

 

 

 

13,788

 

 

 

23,305

 

 

 

27,499

 

Sales, general, and administrative(1)

 

11,790

 

 

 

11,914

 

 

 

22,959

 

 

 

22,689

 

Total operating expenses

 

23,794

 

 

 

25,702

 

 

 

46,264

 

 

 

50,188

 

Loss from operations

 

(11,686

)

 

 

(10,317

)

 

 

(19,893

)

 

 

(18,626

)

Other income (expense):

 

 

 

 

 

 

 

Interest income (expense), net

 

350

 

 

 

71

 

 

 

687

 

 

 

71

 

Other income (expense), net

 

1,057

 

 

 

(106

)

 

 

1,461

 

 

 

(77

)

Loss before income taxes

 

(10,279

)

 

 

(10,352

)

 

 

(17,745

)

 

 

(18,632

)

Income tax expense (benefit)

 

(1,456

)

 

 

(10

)

 

 

(1,192

)

 

 

333

 

Net loss

$

(8,823

)

 

$

(10,342

)

 

$

(16,553

)

 

$

(18,965

)

Net loss per share, basic

$

(0.19

)

 

$

(0.23

)

 

$

(0.36

)

 

$

(0.43

)

Net loss per share, diluted

$

(0.19

)

 

$

(0.23

)

 

$

(0.36

)

 

$

(0.43

)

Shares used in per share calculations:

 

 

 

 

 

 

 

Basic

 

45,717

 

 

 

44,178

 

 

 

45,580

 

 

 

43,919

 

Diluted

 

45,717

 

 

 

44,178

 

 

 

45,580

 

 

 

43,919

 

(1) Includes stock-based compensation as follows:

Three Months Ended June 30,

Six Months Ended June 30,

 

 

2023

 

 

2022

 

2023

 

 

2022

Cost of revenues

$

663

 

$

684

$

1,363

 

$

1,393

Research and development

 

2,826

 

 

3,117

 

4,924

 

 

6,239

Sales, general and administrative

 

4,026

 

 

2,879

 

6,731

 

 

5,601

 

$

7,515

 

$

6,680

$

13,018

 

$

13,233

nLIGHT, Inc.

Condensed Consolidated Balance Sheets

(In thousands)

(Unaudited)

 

 

As of

 

June 30, 2023

 

December 31, 2022

Assets

 

 

 

Current assets:

 

 

 

Cash and cash equivalents

$

41,818

 

 

$

57,826

 

Marketable Securities

 

59,893

 

 

 

50,391

 

Accounts receivable, net

 

46,252

 

 

 

37,913

 

Inventory

 

64,937

 

 

 

67,600

 

Prepaid expenses and other current assets

 

16,076

 

 

 

17,026

 

Total current assets

 

228,976

 

 

 

230,756

 

Restricted cash

 

254

 

 

 

252

 

Lease right-of-use assets

 

13,561

 

 

 

13,893

 

Property, plant and equipment, net

 

57,124

 

 

 

60,693

 

Intangible assets, net

 

2,799

 

 

 

4,041

 

Goodwill

 

12,389

 

 

 

12,376

 

Other assets

 

6,797

 

 

 

7,222

 

Total assets

$

321,900

 

 

$

329,233

 

 

 

 

 

Liabilities and Stockholders’ Equity

 

 

 

Current liabilities:

 

 

 

Accounts payable

$

17,574

 

 

$

17,507

 

Accrued liabilities

 

14,083

 

 

 

12,820

 

Deferred revenues

 

1,365

 

 

 

1,407

 

Current portion of lease liabilities

 

3,089

 

 

 

2,758

 

Total current liabilities

 

36,111

 

 

 

34,492

 

Non-current income taxes payable

 

5,191

 

 

 

6,699

 

Long-term lease liabilities

 

12,113

 

 

 

12,852

 

Other long-term liabilities

 

3,122

 

 

 

4,345

 

Total liabilities

 

56,537

 

 

 

58,388

 

Stockholders' equity:

 

 

 

Common stock - par value

 

16

 

 

 

16

 

Additional paid-in capital

 

507,649

 

 

 

496,211

 

Accumulated other comprehensive loss

 

(3,115

)

 

 

(2,748

)

Accumulated deficit

 

(239,187

)

 

 

(222,634

)

Total stockholders’ equity

 

265,363

 

 

 

270,845

 

Total liabilities and stockholders’ equity

$

321,900

 

 

$

329,233

 

nLIGHT, Inc.

Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)

 

 

Six Months Ended June 30,

 

 

2023

 

 

 

2022

 

Cash flows from operating activities:

 

 

 

Net loss

$

(16,553

)

 

$

(18,965

)

Adjustments to reconcile net loss to net cash provided by (used in) operating activities:

 

 

 

Depreciation

 

6,230

 

 

 

5,214

 

Amortization

 

1,768

 

 

 

2,329

 

Reduction in carrying amount of right-of-use assets

 

292

 

 

 

1,571

 

Provision for (recoveries of) losses on accounts receivable

 

(2

)

 

 

6

 

Stock-based compensation

 

13,018

 

 

 

13,233

 

Deferred income taxes

 

—

 

 

 

(1

)

Changes in operating assets and liabilities:

 

 

 

Accounts receivable, net

 

(8,449

)

 

 

(4,975

)

Inventory

 

2,197

 

 

 

(7,383

)

Prepaid expenses and other current assets

 

951

 

 

 

663

 

Other assets

 

(319

)

 

 

(656

)

Accounts payable

 

(941

)

 

 

(1,726

)

Accrued and other long-term liabilities

 

158

 

 

 

(1,191

)

Deferred revenues

 

(46

)

 

 

421

 

Lease liabilities

 

(374

)

 

 

(409

)

Non-current income taxes payable

 

(1,393

)

 

 

104

 

Net cash provided by (used in) operating activities

 

(3,463

)

 

 

(11,765

)

Cash flows from investing activities:

 

 

 

Purchases of property, plant and equipment

 

(1,640

)

 

 

(12,893

)

Capitalization of patents

 

—

 

 

 

(228

)

Purchase of marketable securities

 

(59,273

)

 

 

(50,000

)

Proceeds from maturities and sales of marketable securities

 

50,089

 

 

 

—

 

Proceeds from sale of assets

 

 

 

—

 

Net cash used in investing activities

 

(10,824

)

 

 

(63,121

)

Cash flows from financing activities:

 

 

 

Proceeds from employee stock plan purchases

 

1,220

 

 

 

1,201

 

Proceeds from stock option exercises

 

332

 

 

 

762

 

Tax payments related to stock award issuances

 

(3,132

)

 

 

(2,546

)

Net cash provided by (used in) financing activities

 

(1,580

)

 

 

(583

)

Effect of exchange rate changes on cash

 

(139

)

 

 

(432

)

Net increase (decrease) in cash, cash equivalents, and restricted cash

 

(16,006

)

 

 

(75,901

)

Cash, cash equivalents, and restricted cash, beginning of period

 

58,078

 

 

 

146,784

 

Cash, cash equivalents, and restricted cash, end of period

$

42,072

 

 

$

70,883

 

Supplemental disclosures:

 

 

 

Cash paid (received) for interest

$

20

 

 

$

—

 

Cash paid for income taxes

 

262

 

 

 

189

 

Operating cash outflows from operating leases

 

1,931

 

 

 

1,914

 

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

 

1,197

 

 

 

1,222

 

Accrued purchases of property, equipment and patents

 

1,157

 

 

 

1,650

 

nLIGHT, Inc.

Reconciliation of GAAP to Non-GAAP Financial Measures

(In thousands, except per share data)

(Unaudited)

Reconciliation of Net Loss to Adjusted EBITDA

 

 

 

 

 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

 

2023

 

 

 

2022

 

 

 

2023

 

 

 

2022

 

Net loss

$

(8,823

)

 

$

(10,342

)

 

$

(16,553

)

 

$

(18,965

)

Income tax expense (benefit)

 

(1,456

)

 

 

(10

)

 

 

(1,192

)

 

 

333

 

Other (income) expense, net

 

(1,057

)

 

 

106

 

 

 

(1,461

)

 

 

77

 

Interest (income) expense, net

 

(350

)

 

 

(71

)

 

 

(687

)

 

 

(71

)

Depreciation and amortization

 

4,021

 

 

 

3,805

 

 

 

7,998

 

 

 

7,543

 

Stock-based compensation

 

7,515

 

 

 

6,680

 

 

 

13,018

 

 

 

13,233

 

Adjusted EBITDA

$

(150

)

 

$

168

 

 

$

1,123

 

 

$

2,150

 

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

 

 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

 

2023

 

 

 

2022

 

 

 

2023

 

 

 

2022

 

Net loss

$

(8,823

)

 

$

(10,342

)

 

$

(16,553

)

 

$

(18,965

)

Add back:

 

 

 

 

 

 

 

Stock-based compensation(1)

 

7,515

 

 

 

6,680

 

 

 

13,018

 

 

 

13,233

 

Amortization of purchased intangibles(1)

 

384

 

 

 

407

 

 

 

768

 

 

 

879

 

Non-GAAP net loss

$

(924

)

 

$

(3,255

)

 

$

(2,767

)

 

$

(4,853

)

 

 

 

 

 

 

 

 

GAAP weighted-average shares outstanding

 

45,717

 

 

 

44,178

 

 

 

45,580

 

 

 

43,919

 

Participating securities

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Non-GAAP weighted-average number of shares, basic

 

45,717

 

 

 

44,178

 

 

 

45,580

 

 

 

43,919

 

Dilutive effect of common stock equivalents

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Non-GAAP weighted-average number of shares, diluted

 

45,717

 

 

 

44,178

 

 

 

45,580

 

 

 

43,919

 

 

 

 

 

 

 

 

 

Non-GAAP net loss per share, basic and diluted

$

(0.02

)

 

$

(0.07

)

 

$

(0.06

)

 

$

(0.11

)

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

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20230803851759/en/

Joseph Corso Chief Financial Officer nLIGHT, Inc. (360) 566-4460 joe.corso@nlight.net