Business Wire | Nov 4, 2021 04:05PM EDT

nLIGHT, Inc. Announces Third Quarter 2021 Results

Nov. 04, 2021

CAMAS, Wash.--(BUSINESS WIRE)--Nov. 04, 2021--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 third quarter of 2021.

"nLIGHT delivered another record revenue quarter and generated the highest products gross margin in our history as a public company," commented Scott Keeney, nLIGHT's President and Chief Executive Officer. "We increased revenue year-over-year in each of our end markets as demand for both our semiconductor and fiber lasers was strong throughout the quarter. Our performance in the third quarter reflects the execution of our strategy to increase our focus on customers outside of China and the diversity in our revenue base."

Mr. Keeney continued, "As a result of a 17% year-over-year increase in revenue combined with a higher mix of business coming from outside of China, we increased our products gross margins by 490 basis year-over-year to a record 37.1%. Assuming the midpoint of our Q4 revenue guidance, we are again on track to deliver more than 20% year-over-year growth."

Third Quarter 2021 Financial Highlights

Three Months Ended September 30,

(In thousands, except percentages) 2021 2020 % Change

Revenues $ 72,235 $ 61,732 17.0 %

Gross margin 29.6 % 27.8 %

Loss from operations $ (6,759 ) $ (3,976 ) (70.0 )%

Operating margin (9.4 )% (6.4 )%

Net loss $ (6,880 ) $ (2,110 ) (226.1 )%

Adjusted EBITDA^(1) $ 7,212 $ 6,211 16.1 %

Adjusted EBITDA, as percentage of 10.0 % 10.1 % revenues

^(1) A reconciliation of the non-GAAP information provided here to the mostdirectly comparable GAAP metric has been provided in the financial statementtables included in this release.

Revenues of $72.2 million for the third quarter of 2021 were up 17.0% compared to $61.7 million for the third quarter of 2020. Gross margin was 29.6% for the third quarter of 2021 compared to 27.8% for the third quarter of 2020. GAAP net loss for the third quarter of 2021 was $(6.9) million, or net loss of $(0.16) per diluted share, compared to net loss of $(2.1) million, or net loss of $(0.05) per diluted share, for the third quarter of 2020. Non-GAAP net income for the third quarter of 2021 was $3.9 million, or non-GAAP net income of $0.08 per diluted share, compared to non-GAAP net income of $5.3 million, or non-GAAP net income of $0.12 per diluted share, for the third quarter of 2020. Reconciliations of the non-GAAP information provided here to the most directly comparable GAAP metric have been provided in the financial statement tables included in this release.

Outlook

For the fourth quarter of 2021, nLIGHT expects revenues to be in the range of $66 million to $72 million, gross margin to be in the range of 25% to 28%, and Adjusted EBITDA to be in the range of $3 million to $5 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, November 4, 2021

Parties interested in listening to nLIGHT's quarterly conference call may do so by dialing 1-833-535-2198 (U.S., toll-free) or +1-412-902-6775 (international and toll), with the conference title: nLIGHT Third Quarter 2021 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 and non-GAAP net income 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 and non-GAAP net income 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 financial measures presented herein are specific to us and may not be comparable to similar measures 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 loss 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 and year-over-year revenue growth, gross margin, and Adjusted EBITDA and our expectations regarding customer demand for our products, operating results, and financial position, 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 from these forward-looking statements, including but not limited to: (1) our ability to compete successfully in the markets for our products, (2) changes in the markets we serve or in the global economy, (3) our ability to increase our volumes and decrease our costs to offset potential declines in the average selling prices of our products, (4) rapid technological change in the markets that we participate in and our ability to develop and maintain products that can achieve market acceptance, (5) our ability to generate sufficient revenues to achieve or maintain profitability in the future, (6) 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, (7) disruptions including pandemics, such as COVID-19, and their effect on our business, financial condition, or results of operations, (8) our manufacturing capacity and operations and their suitability for future levels of demand, (9) our reliance on a small number of customers for a significant portion of our revenues, and (10) our ability to manage risks associated with international customers and operations, (11) the effect of current and potential tariffs and global trade policies on the cost of our products, (12) our ability to protect our proprietary technology and intellectual property rights, and (13) fluctuations in our quarterly results of operations and other operating measures. 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 or 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 1,200 people with operations in the U.S., 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 Nine Months Ended September 30, September 30,

2021 2020 2021 2020

Revenue:

Products $ 54,393 $ 51,117 $ 155,289 $ 133,151

Development 17,842 10,615 47,404 23,934

Total revenue 72,235 61,732 202,693 157,085

Cost of revenue:

Products 34,193 34,645 98,828 95,142

Development 16,647 9,927 44,500 22,226

Total cost of revenue^(1) 50,840 44,572 143,328 117,368

Gross profit 21,395 17,160 59,365 39,717

Operating expenses:

Research and development^(1) 14,838 11,126 40,830 29,136

Sales, general, and 13,316 10,010 40,087 27,343 administrative^(1)

Total operating expenses 28,154 21,136 80,917 56,479

Loss from operations (6,759 ) (3,976 ) (21,552 ) (16,762 )

Other income (expense):

Interest income (expense), net (20 ) (96 ) (126 ) 122

Other income, net 102 477 246 63

Loss before income taxes (6,677 ) (3,595 ) (21,432 ) (16,577 )

Income tax expense (benefit) 203 (1,485 ) (513 ) (162 )

Net loss $ (6,880 ) $ (2,110 ) $ (20,919 ) $ (16,415 )

Net loss per share, basic $ (0.16 ) $ (0.05 ) $ (0.50 ) $ (0.43 )

Net loss per share, diluted $ (0.16 ) $ (0.05 ) $ (0.50 ) $ (0.43 )

Shares used in per share calculations:

Basic 42,884 38,558 41,759 38,195

Diluted 42,884 38,558 41,759 38,195

(1)Includes stock-based compensation as follows:

Three Months Ended

September 30,

Nine Months Ended

September 30,

2021

2020

2021

2020

Cost of revenues

$

740

$

505

$

1,780

$

1,189

Research and development

3,782

2,545

10,408

6,602

Sales, general, and administrative

5,550

3,633

17,544

8,692

$

10,072

$

6,683

$

29,732

$

16,483

^(1)Includes stock-based compensation as follows:

Three Months Ended Nine Months Ended September 30, September 30,

2021 2020 2021 2020

Cost of revenues $ 740 $ 505 $ 1,780 $ 1,189

Research and development 3,782 2,545 10,408 6,602

Sales, general, and 5,550 3,633 17,544 8,692 administrative

$ 10,072 $ 6,683 $ 29,732 $ 16,483

nLIGHT, Inc.

Condensed Consolidated Balance Sheets

(In thousands)

(Unaudited)

As of

September 30, 2021

December 31, 2020

Assets

Current assets:

Cash and cash equivalents

$

165,584

$

102,282

Accounts receivable, net

36,490

31,820

Inventory

70,683

54,706

Prepaid expenses and other current assets

17,267

11,767

Total current assets

290,024

200,575

Restricted cash

250

291

Lease right-of-use assets

17,187

12,302

Property and equipment, net

52,303

44,480

Intangible assets, net

5,580

8,345

Goodwill

12,437

12,484

Other assets, net

4,190

5,167

Total assets

$

381,971

$

283,644

Liabilities and Stockholders' Equity

Current liabilities:

Accounts payable

$

31,868

$

21,057

Accrued liabilities

15,742

15,321

Deferred revenue

1,607

2,528

Lease liabilities

2,858

2,273

Current portion of long-term debt

-

184

Total current liabilities

52,075

41,363

Non-current income taxes payable

6,988

7,556

Long-term lease liabilities

14,921

10,375

Long-term debt

-

215

Other long-term liabilities

3,989

4,221

Total liabilities

77,973

63,730

Stockholders' equity:

Common stock - par value

15

15

Additional paid-in capital

464,090

358,544

Accumulated other comprehensive loss

(802

)

(259

)

Accumulated deficit

(159,305

)

(138,386

)

Total stockholders' equity

303,998

219,914

Total liabilities and stockholders' equity

$

381,971

$

283,644

nLIGHT, Inc.

Condensed Consolidated Balance Sheets

(In thousands)

(Unaudited)

As of

September 30, 2021 December 31, 2020

Assets

Current assets:

Cash and cash equivalents $ 165,584 $ 102,282

Accounts receivable, net 36,490 31,820

Inventory 70,683 54,706

Prepaid expenses and other current assets 17,267 11,767

Total current assets 290,024 200,575

Restricted cash 250 291

Lease right-of-use assets 17,187 12,302

Property and equipment, net 52,303 44,480

Intangible assets, net 5,580 8,345

Goodwill 12,437 12,484

Other assets, net 4,190 5,167

Total assets $ 381,971 $ 283,644



Liabilities and Stockholders' Equity

Current liabilities:

Accounts payable $ 31,868 $ 21,057

Accrued liabilities 15,742 15,321

Deferred revenue 1,607 2,528

Lease liabilities 2,858 2,273

Current portion of long-term debt - 184

Total current liabilities 52,075 41,363

Non-current income taxes payable 6,988 7,556

Long-term lease liabilities 14,921 10,375

Long-term debt - 215

Other long-term liabilities 3,989 4,221

Total liabilities 77,973 63,730

Stockholders' equity:

Common stock - par value 15 15

Additional paid-in capital 464,090 358,544

Accumulated other comprehensive loss (802 ) (259 )

Accumulated deficit (159,305 ) (138,386 )

Total stockholders' equity 303,998 219,914

Total liabilities and stockholders' $ 381,971 $ 283,644 equity

nLIGHT, Inc.

Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)

Nine Months Ended

September 30,

2021

2020

Cash flows from operating activities:

Net loss

$

(20,919

)

$

(16,415

)

Adjustments to reconcile net loss to net cash provided by operating activities:

Depreciation

6,670

5,614

Amortization

4,641

4,319

Reduction in carrying amount of right-of-use assets

2,435

2,162

Provision for (recoveries of) losses on accounts receivable

(70

)

84

Stock-based compensation

29,732

16,483

Deferred income taxes

(11

)

-

Loss on disposal of assets

3

-

Changes in operating assets and liabilities:

Accounts receivable, net

(4,580

)

4,094

Inventory

(16,169

)

(6,411

)

Prepaid expenses and other current assets

(5,542

)

(4,753

)

Other assets

(437

)

(2,418

)

Accounts payable

9,699

10,565

Accrued and other long-term liabilities

907

1,494

Deferred revenues

(925

)

1,405

Lease liabilities

(2,156

)

(2,120

)

Non-current income taxes payable

(591

)

591

Net cash provided by operating activities

2,687

14,694

Cash flows from investing activities:

Acquisition of business, net of cash acquired

(291

)

(168

)

Purchases of property, plant and equipment

(13,636

)

(19,395

)

Capitalization of patents

(303

)

(717

)

Net cash used in investing activities

(14,230

)

(20,280

)

Cash flows from financing activities:

Proceeds from public offerings, net of offering costs

82,354

-

Proceeds from term loan

-

15,000

Principal payments on debt and financing leases

(428

)

(15,126

)

Payment of contingent consideration related to acquisition

(326

)

-

Proceeds from employee stock plan purchases

750

685

Proceeds from stock option exercises

975

1,117

Tax payments related to stock award issuances

(8,265

)

(3,314

)

Net cash provided by (used in) financing activities

75,060

(1,638

)

Effect of exchange rate changes on cash

(256

)

373

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

63,261

(6,851

)

Cash, cash equivalents and restricted cash, beginning of period

102,573

117,294

Cash, cash equivalents and restricted cash, end of period

$

165,834

$

110,443

Supplemental disclosures:

Cash paid (received) for interest, net

$

116

$

(312

)

Cash paid for income taxes

434

1,015

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

7,348

13,470

Accrued purchases of property, equipment and patents

2,287

1,294

nLIGHT, Inc.

Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)

Nine Months Ended September 30,

2021 2020

Cash flows from operating activities:

Net loss $ (20,919 ) $ (16,415 )

Adjustments to reconcile net loss to net cash provided by operating activities:

Depreciation 6,670 5,614

Amortization 4,641 4,319

Reduction in carrying amount of right-of-use assets 2,435 2,162

Provision for (recoveries of) losses on accounts (70 ) 84 receivable

Stock-based compensation 29,732 16,483

Deferred income taxes (11 ) -

Loss on disposal of assets 3 -

Changes in operating assets and liabilities:

Accounts receivable, net (4,580 ) 4,094

Inventory (16,169 ) (6,411 )

Prepaid expenses and other current assets (5,542 ) (4,753 )

Other assets (437 ) (2,418 )

Accounts payable 9,699 10,565

Accrued and other long-term liabilities 907 1,494

Deferred revenues (925 ) 1,405

Lease liabilities (2,156 ) (2,120 )

Non-current income taxes payable (591 ) 591

Net cash provided by operating activities 2,687 14,694

Cash flows from investing activities:

Acquisition of business, net of cash acquired (291 ) (168 )

Purchases of property, plant and equipment (13,636 ) (19,395 )

Capitalization of patents (303 ) (717 )

Net cash used in investing activities (14,230 ) (20,280 )

Cash flows from financing activities:

Proceeds from public offerings, net of offering costs 82,354 -

Proceeds from term loan - 15,000

Principal payments on debt and financing leases (428 ) (15,126 )

Payment of contingent consideration related to (326 ) - acquisition

Proceeds from employee stock plan purchases 750 685

Proceeds from stock option exercises 975 1,117

Tax payments related to stock award issuances (8,265 ) (3,314 )

Net cash provided by (used in) financing activities 75,060 (1,638 )

Effect of exchange rate changes on cash (256 ) 373

Net increase (decrease) in cash, cash equivalents and 63,261 (6,851 )restricted cash

Cash, cash equivalents and restricted cash, beginning 102,573 117,294 of period

Cash, cash equivalents and restricted cash, end of $ 165,834 $ 110,443 period

Supplemental disclosures:

Cash paid (received) for interest, net $ 116 $ (312 )

Cash paid for income taxes 434 1,015

Right-of-use assets obtained in exchange for lease 7,348 13,470 liabilities

Accrued purchases of property, equipment and patents 2,287 1,294

nLIGHT, Inc.

Reconciliation of GAAP Financial Metrics to Non-GAAP

(In thousands, except per share data)

(Unaudited)

Reconciliation of Net Loss to Adjusted EBITDA

Three Months Ended

September 30,

Nine Months Ended

September 30,

2021

2020

2021

2020

Net loss

$

(6,880

)

$

(2,110

)

$

(20,919

)

$

(16,415

)

Income tax expense (benefit)

203

(1,485

)

(513

)

(162

)

Other income, net

(102

)

(477

)

(246

)

(63

)

Interest (income) expense, net

20

96

126

(122

)

Depreciation and amortization

3,899

3,504

11,311

9,933

Stock-based compensation

10,072

6,683

29,732

16,483

Acquisition and integration-related costs

-

-

-

50

Adjusted EBITDA

$

7,212

$

6,211

$

19,491

$

9,704

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

September 30,

Nine Months Ended

September 30,

2021

2020

2021

2020

Net loss

$

(6,880

)

$

(2,110

)

$

(20,919

)

$

(16,415

)

Add back:

Stock-based compensation(1)

10,072

6,683

29,732

16,483

Amortization of purchased intangibles(1)

718

696

2,153

2,008

Acquisition and integration-related costs(1)

-

-

-

50

Non-GAAP net income

3,910

5,269

10,966

2,126

GAAP weighted average shares outstanding

42,884

38,558

41,759

38,195

Participating securities

774

629

681

508

Non-GAAP weighted average number of shares, basic

43,658

39,187

42,440

38,703

Dilutive effect of common stock equivalents

3,986

4,290

4,510

4,112

Non-GAAP weighted average number of shares, diluted

47,644

43,477

46,950

42,815

Non-GAAP net income per share, basic

$

0.09

$

0.13

$

0.26

$

0.05

Non-GAAP net income per share, diluted

$

0.08

$

0.12

$

0.23

$

0.05

(1) There is no income tax effect related to the stock-based compensation, acquisition and integration-related costs, and amortization of purchased intangibles adjustments due to the full valuation allowance in the U.S.

View source version on businesswire.com: https://www.businesswire.com/news/home/20211104006225/en/

CONTACT: Joseph Corso VP, Corporate Development and Investor Relations nLIGHT, Inc. (360) 566-4460 joe.corso@nlight.net