Revenues of $54.1 million and products gross
margin of 33% for the first 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 first quarter of 2023.
“Our continued strategic focus on the industrial market outside
of China and on the aerospace and defense markets, combined with
improvements in our U.S.-based manufacturing capacity and lower
overall expenses, enabled us generate revenue above the midpoint of
our guidance and meaningfully exceed our gross margin guidance for
the first quarter,” commented Scott Keeney, nLIGHT’s President and
Chief Executive Officer.
“The more favorable mix of business and our execution of cost
control initiatives enabled us to generate 33% products gross
margin and positive cash flow during the quarter. Our balance sheet
remains strong and we ended the quarter with $108 million of cash,
cash equivalents and marketable securities with no outstanding
debt.”
Mr. Keeney continued, “We are also pleased to announce today
that we have been awarded an $86 million contract to produce a High
Energy Laser (HEL) prototype for the next phase of development in
support of the Department of Defense’s (DoD) High Energy Laser
Scaling Initiative (HELSI). This contract award reflects nLIGHT’s
deep commitment to the defense market and our ability to combine
our leading technology with the benefits of high-volume commercial
laser operations to deliver innovative and cost-effective directed
energy lasers.”
First Quarter 2023 Financial Highlights
Three Months Ended March
31,
(In thousands, except
percentages)
2023
2022
% Change
Revenues
$
54,091
$
64,459
(16.1
)%
Gross margin
26.4
%
25.1
%
Loss from operations
$
(8,207
)
$
(8,309
)
1.2
%
Operating margin
(15.2
)%
(12.9
)%
Net loss
$
(7,730
)
$
(8,623
)
(10.4
)%
Adjusted EBITDA(1)
$
1,273
$
1,982
(35.8
)%
Adjusted EBITDA, as percentage of
revenues
2.4
%
3.1
%
(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 $54.1 million for the first quarter of 2023 were
down 16.1% compared to $64.5 million for the first quarter of 2022.
Gross margin was 26.4% for the first quarter of 2023 compared to
25.1% for the first quarter of 2022. GAAP net loss for the first
quarter of 2023 was $7.7 million, or net loss of $0.17 per diluted
share, compared to net loss of $8.6 million, or $0.20 per diluted
share, for the first quarter of 2022. Non-GAAP net loss for the
first quarter of 2023 was $1.8 million, or $0.04 per diluted share,
compared to non-GAAP net loss of $1.6 million, or $0.04 per diluted
share, for the first 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 second quarter of 2023, nLIGHT expects revenues to be in
the range of $49 million to $55 million. The midpoint of $52
million includes Laser Products revenue of approximately $40
million and Advanced Development revenue of approximately $12
million. nLIGHT expects overall gross margin to be in the range of
22% to 26%, 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 $(2) million
to $1 million.
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,
May 4, 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 First 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
gross profit, 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 gross profit,
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 gross profit as GAAP gross profit
adjusted for stock-based compensation included in cost of revenue.
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 March
31,
2023
2022
Revenue:
Products
$
41,107
$
51,061
Development
12,984
13,398
Total revenue
54,091
64,459
Cost of revenue:
Products
27,526
35,768
Development
12,302
12,514
Total cost of revenue(1)
39,828
48,282
Gross profit
14,263
16,177
Operating expenses:
Research and development(1)
11,301
13,711
Sales, general, and administrative(1)
11,169
10,775
Total operating expenses
22,470
24,486
Loss from operations
(8,207
)
(8,309
)
Other income (expense):
Interest income (expense), net
337
—
Other income (expense), net
404
29
Loss before income taxes
(7,466
)
(8,280
)
Income tax expense
264
343
Net loss
$
(7,730
)
$
(8,623
)
Net loss per share, basic
$
(0.17
)
$
(0.20
)
Net loss per share, diluted
$
(0.17
)
$
(0.20
)
Shares used in per share calculations:
Basic
45,706
43,655
Diluted
45,706
43,655
(1) Includes stock-based compensation as
follows:
Three Months Ended March
31,
2023
2022
Cost of revenues
$
700
$
709
Research and development
2,098
3,122
Sales, general and administrative
2,705
2,722
$
5,503
$
6,553
nLIGHT, Inc.
Condensed Consolidated Balance
Sheets
(In thousands)
(Unaudited)
As of
March 31, 2023
December 31, 2022
Assets
Current assets:
Cash and cash equivalents
$
48,402
$
57,826
Marketable Securities
59,966
50,391
Accounts receivable, net
36,140
37,913
Inventory
67,157
67,600
Prepaid expenses and other current
assets
21,586
17,026
Total current assets
233,251
230,756
Restricted cash
253
252
Lease right-of-use assets
13,900
13,893
Property, plant and equipment, net
58,978
60,693
Intangible assets, net
3,408
4,041
Goodwill
12,388
12,376
Other assets
7,586
7,222
Total assets
$
329,764
$
329,233
Liabilities and Stockholders’
Equity
Current liabilities:
Accounts payable
$
17,759
$
17,507
Accrued liabilities
14,708
12,820
Deferred revenues
1,271
1,407
Current portion of lease liabilities
3,001
2,758
Total current liabilities
36,739
34,492
Non-current income taxes payable
6,920
6,699
Long-term lease liabilities
12,576
12,852
Other long-term liabilities
4,367
4,345
Total liabilities
60,602
58,388
Stockholders' equity:
Common stock - par value
16
16
Additional paid-in capital
501,675
496,211
Accumulated other comprehensive loss
(2,165
)
(2,748
)
Accumulated deficit
(230,364
)
(222,634
)
Total stockholders’ equity
269,162
270,845
Total liabilities and stockholders’
equity
$
329,764
$
329,233
nLIGHT, Inc.
Consolidated Statements of Cash
Flows
(In thousands)
(Unaudited)
Three Months Ended March
31,
2023
2022
Cash flows from operating activities:
Net loss
$
(7,730
)
$
(8,623
)
Adjustments to reconcile net loss to net
cash provided by (used in) operating activities:
Depreciation
3,105
2,556
Amortization
872
1,182
Reduction in carrying amount of
right-of-use assets
6
867
Provision for (recoveries of) losses on
accounts receivable
(2
)
—
Stock-based compensation
5,503
6,553
Deferred income taxes
—
(4
)
Changes in operating assets and
liabilities:
Accounts receivable, net
1,905
4,690
Inventory
662
(3,433
)
Prepaid expenses and other current
assets
(4,549
)
(5,061
)
Other assets
(540
)
(317
)
Accounts payable
(411
)
(3,019
)
Accrued and other long-term
liabilities
1,855
(1,088
)
Deferred revenues
(142
)
(647
)
Lease liabilities
(45
)
(813
)
Non-current income taxes payable
155
153
Net cash provided by (used in) operating
activities
644
(7,004
)
Cash flows from investing activities:
Purchases of property, plant and
equipment
(684
)
(5,019
)
Capitalization of patents
—
(114
)
Purchase of marketable securities
(34,359
)
—
Proceeds from maturities and sales of
marketable securities
24,998
—
Proceeds from sale of assets
—
Net cash used in investing activities
(10,045
)
(5,133
)
Cash flows from financing activities:
Proceeds from stock option exercises
143
689
Tax payments related to stock award
issuances
(182
)
(78
)
Net cash provided by (used in) financing
activities
(39
)
611
Effect of exchange rate changes on
cash
17
(59
)
Net increase (decrease) in cash, cash
equivalents, and restricted cash
(9,423
)
(11,585
)
Cash, cash equivalents, and restricted
cash, beginning of period
58,078
146,784
Cash, cash equivalents, and restricted
cash, end of period
$
48,655
$
135,199
Supplemental disclosures:
Cash paid (received) for interest
$
—
$
—
Cash paid for income taxes
144
79
Operating cash outflows from operating
leases
923
1,097
Right-of-use assets obtained in exchange
for lease liabilities
731
1,470
Accrued purchases of property, equipment
and patents
697
2,268
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 March
31,
2023
2022
Net loss
$
(7,730
)
$
(8,623
)
Income tax expense
264
343
Other (income) expense, net
(404
)
(29
)
Interest (income) expense, net
(337
)
—
Depreciation and amortization
3,977
3,738
Stock-based compensation
5,503
6,553
Adjusted EBITDA
$
1,273
$
1,982
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 March
31,
2023
2022
Net loss
$
(7,730
)
$
(8,623
)
Add back:
Stock-based compensation(1)
5,503
6,553
Amortization of purchased
intangibles(1)
435
472
Non-GAAP net loss
$
(1,792
)
$
(1,598
)
GAAP weighted-average shares
outstanding
45,706
43,655
Participating securities
—
—
Non-GAAP weighted-average number of
shares, basic
45,706
43,655
Dilutive effect of common stock
equivalents
—
—
Non-GAAP weighted-average number of
shares, diluted
45,706
43,655
Non-GAAP net loss per share, basic and
diluted
$
(0.04
)
$
(0.04
)
(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/20230504005958/en/
Joseph Corso Chief Financial Officer nLIGHT, Inc. (360) 566-4460
joe.corso@nlight.net
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