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nLIGHT, Inc. Announces First Quarter 2018 Results
[May 23, 2018]

nLIGHT, Inc. Announces First Quarter 2018 Results


VANCOUVER, Wash., May 23, 2018 (GLOBE NEWSWIRE) -- 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 first quarter of 2018. These results included:

  • Revenues of $42.5 million, up 42.1% compared to $29.9 million for the first quarter of 2017
  • Gross margin of 34.7% compared to 30.0% for the first quarter of 2017
  • Income from operations of $4.2 million, or 9.9% of revenues, compared to $0.6 million, or 2.0% of revenues, for the first quarter of 2017

GAAP net income for the first quarter of 2018 was $2.9 million, or $0.00 per diluted common share, compared to a loss of $1.2 million, or a loss of $0.47 per diluted common share, for the first quarter of 2017. Excluding the impact of stock-based compensation and assuming the conversion of all outstanding convertible preferred stock in the period to common stock, non-GAAP net income for the first quarter of 2018 was $3.1 million, or $0.10 per diluted common share, compared to a non-GAAP net loss of $1.1 million, or a non-GAAP net loss of $0.05 per diluted common share, for the first quarter of 2017.

“We began 2018 on a strong note, delivering record quarterly revenues, gross profit, and income from operations,” commented Scott Keeney, nLIGHT’s President and Chief Executive Officer. “We saw activity accelerate across all end markets, led by growth in the industrial end market. Our first quarter results reflect growing customer adoption of our semiconductor and fiber laser technology and demonstrate the expanding global opportunity for high-power lasers.”

First Quarter 2018 Financial Highlights

 Three Months Ended March 31,  
(In thousands, except percentages) 2018 2017 % Change
Revenues$42,467  $29,887    42.1%
Gross margin34.7% 30.0%  
Income from operations$4,208  $612      587.6%
Operating margin9.9% 2.0%  
Net income (loss)$2,916  $(1,213) NM 
Adjusted EBITDA(1)$6,316  $2,635  139.7%
Adjusted EBITDA, as percentage of revenues14.9% 8.8%  

(1) A reconciliation of the non-GAAP information provided here to the most directly comparable GAAP metric has been provided in the financial statement tables included in this release.

Outlook

For the second quarter of 2018, nLIGHT expects revenues to be in the range of $48.0 million to $52.0 million, gross margin to be in the range of 33.0% to 36.0%, and income from operations in the range of $5.0 million to $7.0 million.

Investor Conference Call at 2:00 p.m. Pacific Time, Wednesday, May 23, 2018

Parties interested in listening to nLIGHT’s quarterly conference call may do so by dialing 1-877-270-2148 (U.S., toll-free) or +1-412-902-6510 (international and toll), with the conference title: nLIGHT First Quarter 2018 Earnings. The call can also be accessed via the web by going to nLIGHT’s Investor Relations page at http://nlight.net/company/investors.

Use of Non-GAAP Financial Results

In addition to U.S. GAAP results, this press release also contains non-GAAP financial results, including Adjusted EBITDA, non-GAAP net income (loss) and non-GAAP net income (loss) per share, basic and diluted. Adjusted EBITDA, a non-GAAP financial metric, is used to help us evaluate our business, measure our performance, identify trends affecting our business, formulate business plans and make strategic decisions. In addition to our results determined in accordance with GAAP, we believe Adjusted EBITDA is useful in evaluating our operating performance. 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 it gives effect to both the conversion of all outstanding preferred stock to common stock, which occurred immediately prior to the closing of nLIGHT’s initial public offering on April 30, 2018, as well as removing the effect of stock-based compensation expense, which we believe to be an informative view of our results during the period.

We define Adjusted EBITDA as net income (loss) adjusted for income tax expense, other non-operating expense or income, net interest expense, depreciation and amortization, stock-based compensation and other special items as determined by management, as applicable. We believe that 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. We define non-GAAP net income (loss) as GAAP net income (loss) adjusted for stock-based compensation. We define non-GAAP net income (loss) per share, basic and diluted, as non-GAAP net income (loss) divided by preferred and common weighted-average shares outstanding during the respective period plus the dilutive effect of any outstanding options or warrants during the period, if applicable.

Tables presenting the reconciliation of net income (loss) to Adjusted EBITDA, as well as the reconciliation of net income (loss) and net income (loss) per share, basic and diluted to non-GAAP net income (loss) and non-GAAP net income (loss) per share, basic and diluted, the two most directly comparable GAAP financial metrics, 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 and Section 21E of the Securities Exchange Act of 1934 and the Private Securities Litigation Reform Act of 1995. Words such as “guidance,” “expects,” “intends,” “projects,” “plans,” “believes,” “estimates,” “targets,” “anticipates,” and similar expressions may identify these forward-looking statements. Examples of forward-looking statements include, but are not limited to, statements regarding expected revenues, gross margin and operating income, the expanding global opportunity for high-power lasers, as well as any other statement that does not directly relate to any historical or current fact. Forward-looking statements are based on current expectations and assumptions, which may not prove to be accurate. These statements are not guarantees and are subject to risks, uncertainties and changes in circumstances that are difficult to predict. Many factors could cause actual results to differ materially and adversely from these forward-looking statements, including but not limited to: (1) our ability to generate sufficient revenues to achieve or maintain profitability in the future as our operating costs increase, (2) the risk that our revenue growth rate in recent periods may not be indicative of our future performance, (3) downturns in the markets we serve could materially adversely affect our revenues and profitability, (4) our high levels of fixed costs and inventory levels may harm our gross profits and results of operations in the event that demand for our products declines or we maintain excess inventory levels, (5) the competiveness of the markets for our products, (6) our substantial sales and operations in China, which expose us to risks inherent in doing business there, (7) our manufacturing capacity and operations may not be appropriate for future levels of demand, (8) our reliance on a small number of customers for a significant portion of our revenues and (9) the risk that we may be unable to protect our proprietary technology and intellectual property rights. Additional information concerning these and other factors can be found in nLIGHT's filings with the Securities and Exchange Commission, including other risks, relevant factors and uncertainties identified in the “Risk Factors” section of nLIGHT's Registration Statement on Form S-1 or subsequent filings with the Securities and Exchange Commission. nLIGHT undertakes no obligation to update publicly or revise any forward-looking statements contained herein to reflect future events or developments, except as required by law.

The nLIGHT logo 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 used in a variety of end applications in the industrial, microfabrication, and aerospace and defense markets. For more information, please visit www.nlight.net.


nLIGHT, Inc.
Consolidated Statements of Operations
(In thousands, except per share data)
(Unaudited)

(2,916
 Three Months Ended March 31,
 2018 2017
Revenues$42,467  $29,887 
Cost of revenues27,738  20,920 
Gross profit14,729  8,967 
Operating expenses:   
Research and development4,283  3,726 
Sales, general, and administrative6,238  4,629 
Total operating expenses10,521  8,355 
Income from operations4,208  612 
Other expense:   
Interest expense, net(219) (502)
Other expense76  (167)
Income (loss) before income taxes4,065  (57)
Income tax expense1,149  1,156 
Net income (loss)$2,916  $(1,213)
Less: Income allocated to preferred stockholders$) $ 
Net income (loss) attributable to common stockholders$  $(1,213)
Net income (loss) per share, basic and diluted$  $(0.47)
Shares used in basic and diluted per share calculations3,031  2,600 
 




nLIGHT, Inc.

Consolidated Balance Sheets
(In thousands)
(Unaudited)

 March 31, December 31,
 2018 2017
Assets   
Current assets:   
    Cash and cash equivalents$28,622  $36,687 
    Accounts receivable, net18,171  13,353 
    Inventory35,351  29,570 
    Prepaid expenses and other current assets6,147  4,973 
      Total current assets88,291  84,583 
Property and equipment, net19,811  17,968 
Intangible assets, net2,361  1,836 
Goodwill1,387  1,387 
Other assets4,346  4,374 
    Total assets$116,196  $110,148 
    
Liabilities and Stockholders’ Equity   
Current liabilities:   
    Accounts payable$15,581  $12,920 
    Accrued liabilities11,870  12,650 
    Customer advances753  575 
    Deferred revenue541  386 
    Current portion of long-term debt3,491  2,363 
      Total current liabilities32,236  28,894 
Non-current income taxes payable4,185  3,930 
Long-term debt13,958  15,108 
Other long-term liabilities1,232  933 
Total liabilities51,611  48,865 
Stockholders' equity:   
Convertible preferred stock - par value12  12 
Common stock - par value2  2 
    Additional paid-in capital180,093  180,657 
    Accumulated other comprehensive income (loss)231  (719)
    Accumulated deficit(115,753) (118,669)
      Total stockholders’ equity64,585  61,283 
      Total liabilities and stockholders’ equity$116,196  $110,148 
 


nLIGHT, Inc.

Select Statements of Cash Flows Data
(In thousands)
(Unaudited)


 Three Months Ended March 31,
 2018 2017
Cash flows from operating activities:   
Net income (loss)$2,916  $(1,213)
Adjustments to reconcile net income (loss) to net cash used in operating activities:   
Depreciation and amortization1,946  1,950 
Provision for losses on accounts receivable40  125 
Stock-based compensation162  73 
Loss on disposal of property and equipment13  7 
Changes in operating assets and liabilities:   
Accounts receivable(4,689) (2,802)
Inventory(5,127) (1,069)
Other changes569  (817)
     Net cash used in operating activities(4,170) (3,746)
Cash flows from investing activities:   
Purchases of property, equipment and intangibles(3,390) (715)
Proceeds from sale of property and equipment  6 
     Net cash used in investing activities(3,390) (709)
Cash flows from financing activities:   
Principal payments on debt and capital leases(29) (325)
Payments of deferred offering costs(521) (8)
Proceeds from stock option exercises61  61 
     Net cash used in financing activities(489) (272)
Effect of exchange rate changes on cash(16) 141 
     Net decrease in cash and cash equivalents(8,065) (4,586)
Cash and cash equivalents, beginning of period36,687  13,500 
Cash and cash equivalents, end of period$28,622  $8,914 
Supplemental disclosures:   
Cash paid for interest$252  $459 
Cash paid for income taxes990  341 
Accrued purchases of property, equipment and intangibles1,380  291 
Accrued deferred offering costs797  26 
      


nLIGHT, Inc.

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

Reconciliation of Net Income (Loss) to Adjusted EBITDA

 Three Months Ended March 31,
 2018 2017
Net income (loss)$2,916  $(1,213)
Income tax expense1,149  1,156 
Other (income) expense(76) 167 
Interest expense, net219  502 
Depreciation and amortization1,946  1,950 
Stock-based compensation162  73 
Adjusted EBITDA$6,316  $2,635 
 


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

 Three Months Ended March 31,
 2018 2017
Net income (loss)$2,916  $(1,213)
Add back:   
Stock-based compensation162  73 
Non-GAAP income (loss)3,078  (1,140)
    
GAAP weighted average shares outstanding3,031  2,600 
Assumed conversion of convertible preferred stock to common stock24,642  19,837 
Non-GAAP weighted average number of shares, basic27,673  22,437 
Dilutive effect of common stock options and warrants4,492   
Non-GAAP weighted average number of shares, diluted32,165  22,437 
    
Non-GAAP net income (loss) per share, basic$0.11  $(0.05)
Non-GAAP net income (loss) per share, diluted$0.10  $(0.05)
        
For more information contact:

Jason Willey
Investor Relations and Corporate Development
nLIGHT, Inc.
(360) 567-4890
[email protected]

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