ROANOKE, Va.–(BUSINESS WIRE)–Luna Innovations Incorporated (NASDAQ: LUNA), a global leader in advanced optical technology, today announced its financial results for the three and nine months ended September 30, 2023.
“We delivered solid performance this quarter in spite of continued macroeconomic headwinds,” said Scott Graeff, President and Chief Executive Officer of Luna. “We realized multiple significant wins in our Sensing business, providing further proof of the breadth of applications and abundance of opportunities for our fiber sensing solutions. We also recognized a particularly strong showing from our Communications Test business, where we saw significant increase in revenue after realizing moderate recovery from the headwinds this business faced last quarter.”
Third Quarter Fiscal 2023 Financial Summary
Highlights of the financial results for the three months ended September 30, 2023 are:
|
|
|
Three Months Ended September 30, |
|
Change |
|||||||
|
(in thousands, except share and per share data) |
|
|
2023 |
|
|
|
2022 |
|
|
|
|
|
Revenue |
|
$ |
30,703 |
|
|
$ |
29,153 |
|
|
5 |
% |
|
|
|
|
|
|
|
|
|||||
|
Gross profit |
|
|
17,629 |
|
|
|
16,919 |
|
|
4 |
% |
|
Gross margin |
|
|
57 |
% |
|
|
58 |
% |
|
|
|
|
|
|
|
|
|
|
||||||
|
Operating expense |
|
|
16,477 |
|
|
|
15,441 |
|
|
7 |
% |
|
Operating income |
|
|
1,152 |
|
|
|
1,478 |
|
|
|
|
|
Operating margin |
|
|
4 |
% |
|
|
5 |
% |
|
|
|
|
|
|
|
|
|
|
||||||
|
Other expense, net and income tax expense |
|
|
(691 |
) |
|
|
(310 |
) |
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Net income from continuing operations |
|
$ |
461 |
|
|
$ |
1,168 |
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Income from discontinued operations, net of tax of $— and $(78) |
|
|
— |
|
|
|
28 |
|
|
|
|
|
|
|
|
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|||||
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Net income |
|
$ |
461 |
|
|
$ |
1,196 |
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Earnings per diluted share (EPS) |
|
$ |
0.01 |
|
|
$ |
0.04 |
|
|
|
|
|
Adjusted EPS |
|
$ |
0.07 |
|
|
$ |
0.09 |
|
|
|
|
|
Diluted weighted average shares outstanding |
|
|
35,218,547 |
|
|
|
34,104,850 |
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|
|
|
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|
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|
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|
|||||
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Adjusted EBITDA |
|
$ |
4,172 |
|
|
$ |
4,544 |
|
|
(8 |
)% |
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.
Revenue for the three months ended September 30, 2023 increased 5% compared to the prior-year period.
Gross margin was 57% for the three months ended September 30, 2023, compared to 58% for the three months ended September 30, 2022, driven primarily by product mix. Operating income and margin were $1.2 million and 4% of total revenue, respectively, for the three months ended September 30, 2023, compared to an operating income of $1.5 million and 5% of total revenue, respectively, for the three months ended September 30, 2022.
Net income was $0.5 million, or $0.01 per fully diluted share, for the three months ended September 30, 2023, compared to net income of $1.2 million, or $0.04 per fully diluted share, for the three months ended September 30, 2022. Adjusted EPS was $0.07 for the three months ended September 30, 2023 compared to $0.09 for the three months ended September 30, 2022.
Adjusted EBITDA was $4.2 million for three months ended September 30, 2023, compared to $4.5 million for the three months ended September 30, 2022.
Nine Months Ended Fiscal 2023 Financial Summary
Highlights of the financial results for the nine months ended September 30, 2023 are:
|
|
|
Nine Months Ended September 30, |
|
Change |
|||||||
|
(in thousands, except share and per share data) |
|
|
2023 |
|
|
|
2022 |
|
|
|
|
|
Revenue |
|
$ |
84,912 |
|
|
$ |
77,795 |
|
|
9 |
% |
|
|
|
|
|
|
|
|
|||||
|
Gross profit |
|
|
49,467 |
|
|
|
47,162 |
|
|
5 |
% |
|
Gross margin |
|
|
58 |
% |
|
|
61 |
% |
|
|
|
|
|
|
|
|
|
|
||||||
|
Operating expense |
|
|
50,661 |
|
|
|
50,510 |
|
|
— |
% |
|
Operating loss |
|
|
(1,194 |
) |
|
|
(3,348 |
) |
|
|
|
|
Operating margin |
|
|
(1 |
)% |
|
|
(4 |
)% |
|
|
|
|
|
|
|
|
|
|
||||||
|
Other expense, net and income tax benefit |
|
|
(745 |
) |
|
|
231 |
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Net loss from continuing operations |
|
$ |
(1,939 |
) |
|
$ |
(3,117 |
) |
|
|
|
|
|
|
|
|
|
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|
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Net (loss)/income from discontinued operations, net of income taxes of $(346) and $3,205 |
|
|
(1,038 |
) |
|
|
11,543 |
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Net (loss)/income |
|
$ |
(2,977 |
) |
|
$ |
8,426 |
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
(Loss)/earnings per diluted share (EPS) |
|
$ |
(0.09 |
) |
|
$ |
0.26 |
|
|
|
|
|
Adjusted EPS |
|
$ |
0.11 |
|
|
$ |
0.12 |
|
|
(8 |
)% |
|
Diluted weighted average shares outstanding |
|
|
33,631,654 |
|
|
|
32,492,276 |
|
|||
|
|
|
|
|
|
|
|
|||||
|
Adjusted EBITDA |
|
$ |
7,759 |
|
|
$ |
7,450 |
|
|
4 |
% |
A reconciliation of Adjusted EPS and Adjusted EBITDA to the nearest comparable GAAP figures can be found in the schedules included in this release.
Revenue for the nine months ended September 30, 2023 increased 9% compared to the prior-year period.
Gross profit of $49.5 million for the nine months ended September 30, 2023 increased from $47.2 million for the nine months ended September 30, 2022 primarily due to higher sales. Operating loss and margin improved to $1.2 million and 1% of total revenue, respectively, for the nine months ended September 30, 2023, compared to $3.3 million and 4% of total revenue, respectively, for the nine months ended September 30, 2022.
Net loss was $3.0 million, or $0.09 per fully diluted share, for the nine months ended September 30, 2023, compared to a net income of $8.4 million, or $0.26 per fully diluted share, for the nine months ended September 30, 2022, due to the gain on sale of Luna Labs. Adjusted EPS was $0.11 for the nine months ended September 30, 2023, compared to $0.12 for the nine months ended September 30, 2022.
Adjusted EBITDA was $7.8 million for the nine months ended September 30, 2023, compared to $7.5 million for the nine months ended September 30, 2022.
Q3 and Recent Business Highlights
- Named George Gomez-Quintero as Chief Financial Officer
- Awarded a multi-year service contract for system deployed on the largest fiber-optic monitoring solution ever installed
- Secured multiple sales of seismic monitoring DAS instruments to American seismic labs and the U.S. government
- Secured $1.5M+ in new orders for DAS and DTS systems for pipeline monitoring from the largest energy company in the UAE
- Renewed global supply partnership agreement for infrastructure monitoring with one of the world’s largest multinational conglomerates
- Successfully deployed fiber optic-sensing based traffic monitoring for the Utah Department of Transportation
2023 Full-Year Outlook
Luna is updating the 2023 revenue outlook and maintaining the adjusted EBITDA outlook:
- Total revenue of $120 million to $125 million for the full year 2023
- Adjusted EBITDA of $14 million to $18 million for the full year 2023
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.
About Luna
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.
