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nLIGHT, Inc. Announces Fourth Quarter and Full Year 2022 Results

Revenues of $242.1 million for the full year 2022

Revenues of $56.7 million for the fourth quarter of 2022

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 fourth quarter and full year 2022.

“Our performance in 2022 reflects the continuing evolution of our business. Strong execution of our strategic growth initiatives enabled us to achieve 21% growth in Industrial and Microfabrication outside of China this year, which grew to a record $133 million, more than double the revenues we generated in these markets in 2020,” commented Scott Keeney, nLIGHT’s President and Chief Executive Officer. “We also achieved multiple milestones in Directed Energy – a key growth market for nLIGHT.”

Mr. Keeney continued, “In the fourth quarter, led by record quarterly sales to Industrial customers outside of China, we delivered revenue above the mid-point of our previously announced guidance range. Although moving certain elements of our manufacturing out of China has been challenging, we made significant progress during the quarter. We completed installation of key automation equipment in our Camas facility and implemented a new ERP system as of January 1, 2023. We also executed a targeted reduction-in-force, and focused our product portfolio to better align with our near- and long-term growth opportunities. As a result, we incurred approximately $6 million of non-routine inventory charges and approximately $4 million of restructuring expenses during the quarter. Looking forward, we believe the strategic decisions we made in the fourth quarter better position us for long-term profitable growth.”

Full Year 2022 Financial Highlights

 

Year Ended

December 31,

 

 

(In thousands, except percentages)

 

2022

 

 

 

2021

 

 

% Change

Revenues

$

242,058

 

 

$

270,146

 

 

(10.4

)%

Gross margin

 

21.0

%

 

 

28.6

%

 

 

Loss from operations

$

(55,102

)

 

$

(30,217

)

 

(82.4

)%

Operating margin

 

(22.8

)%

 

 

(11.2

)%

 

 

Net loss

$

(54,579

)

 

$

(29,669

)

 

(84.0

)%

Adjusted EBITDA(1)

$

(8,754

)

 

$

22,562

 

 

(138.8

)%

Adjusted EBITDA, as a percentage of revenues

 

(3.6

)%

 

 

8.4

%

 

 

(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 $242.1 million for the full year 2022 were down 10.4% compared to $270.1 million for the full year 2021. Gross margin was 21.0% for the full year 2022 compared to 28.6% for the full year 2021. GAAP net loss for the full year 2022 was $54.6 million, or $1.23 per diluted share, compared to net loss of $29.7 million, or $0.70 per diluted share, for the full year 2021. Non-GAAP net loss for the full year 2022 was $22.3 million, or $0.50 per diluted share, compared to non-GAAP net income of $10.7 million, or $0.23 per diluted share, for the full year 2021. Reconciliations of the non-GAAP metrics presented here to the most directly comparable GAAP metric have been provided in the tables included at the end of this release.

Fourth Quarter 2022 Financial Highlights

 

Three Months Ended

December 31,

 

 

(In thousands, except percentages)

 

2022

 

 

 

2021

 

 

% Change

Revenues

$

56,679

 

 

$

67,453

 

 

(16.0

)%

Gross margin

 

10.2

%

 

 

26.6

%

 

 

Loss from operations

$

(23,495

)

 

$

(8,665

)

 

(171.1

)%

Operating margin

 

(41.5

)%

 

 

(12.8

)%

 

 

Net loss

$

(22,659

)

 

$

(8,750

)

 

(159.0

)%

Adjusted EBITDA(1)

$

(9,502

)

 

$

3,071

 

 

(409.4

)%

Adjusted EBITDA, as a percentage of revenues

 

(16.8

)%

 

 

4.6

%

 

 

(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.

Revenues of $56.7 million for the fourth quarter of 2022 were down 16.0% compared to $67.5 million for the fourth quarter of 2021. Gross margin was 10.2% for the fourth quarter of 2022 compared to 26.6% for the fourth quarter of 2021. GAAP net loss for the fourth quarter of 2022 was $22.7 million, or $0.50 per diluted share, compared to net loss of $8.8 million, or $0.20 per diluted share, for the fourth quarter of 2021. Non-GAAP net loss for the fourth quarter of 2022 was $12.3 million, or $0.27 per diluted share, compared to non-GAAP net loss of $0.2 million, or $0.01 per diluted share, for the fourth quarter of 2021. Reconciliations of the non-GAAP metrics presented here to the most directly comparable GAAP metrics have been provided in the tables included at the end of this release.

Outlook

For the first quarter of 2023, nLIGHT expects revenues to be in the range of $50 million to $56 million. The midpoint of $53 million includes Laser Products revenue of approximately $41 million and Advanced Development revenue of approximately $12 million. nLIGHT expects overall gross margin to be in the range of 17% to 20%, with Laser Products gross margin in the range of 20% to 24% and Advanced Development gross margin of approximately 7%. nLIGHT expects Adjusted EBITDA to be in the range of $(4) 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, February 23, 2023

Parties interested in listening to nLIGHT’s quarterly conference call may do so by dialing 1-844-763-8274 (U.S., toll-free) or +1-412-717-9224 (international and toll), with the conference title: nLIGHT Fourth Quarter 2022 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 the weighted-average number of 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, and our business strategy and ability to grow our business, 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 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 1,100 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

December 31,

 

Year Ended

December 31,

 

 

2022

 

 

 

2021

 

 

 

2022

 

 

 

2021

 

Revenue:

 

 

 

 

 

 

 

Products

$

45,375

 

 

$

50,906

 

 

$

192,658

 

 

$

206,195

 

Development

 

11,304

 

 

 

16,547

 

 

 

49,400

 

 

 

63,951

 

Total revenue

 

56,679

 

 

 

67,453

 

 

 

242,058

 

 

 

270,146

 

Cost of revenue:

 

 

 

 

 

 

 

Products

 

40,471

 

 

 

34,039

 

 

 

145,272

 

 

 

132,867

 

Development

 

10,425

 

 

 

15,472

 

 

 

45,965

 

 

 

59,972

 

Total cost of revenue(1)

 

50,896

 

 

 

49,511

 

 

 

191,237

 

 

 

192,839

 

Gross profit

 

5,783

 

 

 

17,942

 

 

 

50,821

 

 

 

77,307

 

Operating expenses:

 

 

 

 

 

 

 

Research and development(1)

 

13,558

 

 

 

13,984

 

 

 

53,773

 

 

 

54,814

 

Sales, general, and administrative(1)

 

11,828

 

 

 

12,623

 

 

 

48,258

 

 

 

52,710

 

Restructuring

 

3,892

 

 

 

 

 

 

3,892

 

 

 

 

Total operating expenses

 

29,278

 

 

 

26,607

 

 

 

105,923

 

 

 

107,524

 

Loss from operations

 

(23,495

)

 

 

(8,665

)

 

 

(55,102

)

 

 

(30,217

)

Other income (expense):

 

 

 

 

 

 

 

Interest income (expense), net

 

291

 

 

 

(37

)

 

 

529

 

 

 

(163

)

Other income, net

 

446

 

 

 

90

 

 

 

338

 

 

 

336

 

Loss before income taxes

 

(22,758

)

 

 

(8,612

)

 

 

(54,235

)

 

 

(30,044

)

Income tax expense (benefit)

 

(99

)

 

 

138

 

 

 

344

 

 

 

(375

)

Net loss

$

(22,659

)

 

$

(8,750

)

 

$

(54,579

)

 

$

(29,669

)

Net loss per share, basic

$

(0.50

)

 

$

(0.20

)

 

$

(1.23

)

 

$

(0.70

)

Net loss per share, diluted

$

(0.50

)

 

$

(0.20

)

 

$

(1.23

)

 

$

(0.70

)

Shares used in per share calculations:

 

 

 

 

 

 

 

Basic

 

45,039

 

 

 

43,277

 

 

 

44,436

 

 

 

42,142

 

Diluted

 

45,039

 

 

 

43,277

 

 

 

44,436

 

 

 

42,142

 

(1) Includes stock-based compensation as follows:

 

 

 

 

 

 

 

 

Three Months Ended

December 31,

 

Year Ended

December 31,

 

2022

 

2021

 

2022

 

2021

Cost of revenues

$

572

 

$

725

 

$

2,677

 

$

2,505

Research and development

 

2,267

 

 

3,025

 

 

11,675

 

 

13,433

Sales, general, and administrative

 

3,190

 

 

4,238

 

 

12,405

 

 

21,782

 

$

6,029

 

$

7,988

 

$

26,757

 

$

37,720

 

nLIGHT, Inc.

Condensed Consolidated Balance Sheets

(In thousands)

(Unaudited)

 

 

As of

 

December 31,

2022

 

December 31,

2021

Assets

 

 

 

Current assets:

 

 

 

Cash and cash equivalents

$

57,826

 

 

$

146,534

 

Marketable Securities

 

50,391

 

 

 

 

Accounts receivable, net

 

37,913

 

 

 

41,574

 

Inventory

 

67,600

 

 

 

73,746

 

Prepaid expenses and other current assets

 

17,026

 

 

 

15,350

 

Total current assets

 

230,756

 

 

 

277,204

 

Restricted cash

 

252

 

 

 

250

 

Lease right-of-use assets

 

13,893

 

 

 

17,048

 

Property, plant and equipment, net

 

60,693

 

 

 

56,101

 

Intangible assets, net

 

4,041

 

 

 

6,698

 

Goodwill

 

12,376

 

 

 

12,420

 

Other assets, net

 

7,222

 

 

 

3,897

 

Total assets

$

329,233

 

 

$

373,618

 

 

 

 

 

Liabilities and Stockholders’ Equity

 

 

 

Current liabilities:

 

 

 

Accounts payable

$

17,507

 

 

$

26,347

 

Accrued liabilities

 

12,820

 

 

 

14,730

 

Deferred revenue

 

1,407

 

 

 

1,629

 

Current portion of lease liabilities

 

2,758

 

 

 

3,066

 

Total current liabilities

 

34,492

 

 

 

45,772

 

Non-current income taxes payable

 

6,699

 

 

 

7,149

 

Long-term lease liabilities

 

12,852

 

 

 

14,612

 

Other long-term liabilities

 

4,345

 

 

 

3,952

 

Total liabilities

 

58,388

 

 

 

71,485

 

Stockholders' equity:

 

 

 

Common stock - par value

 

16

 

 

 

15

 

Additional paid-in capital

 

496,211

 

 

 

470,760

 

Accumulated other comprehensive loss

 

(2,748

)

 

 

(587

)

Accumulated deficit

 

(222,634

)

 

 

(168,055

)

Total stockholders’ equity

 

270,845

 

 

 

302,133

 

Total liabilities and stockholders’ equity

$

329,233

 

 

$

373,618

 

 

nLIGHT, Inc.

Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)

 

 

Year Ended December 31,

 

 

2022

 

 

 

2021

 

Cash flows from operating activities:

 

 

 

Net loss

$

(54,579

)

 

$

(29,669

)

Adjustments to reconcile net loss to net cash used in operating activities:

 

 

 

Depreciation

 

11,085

 

 

 

9,179

 

Amortization

 

4,614

 

 

 

5,880

 

Reduction in carrying amount of right-of-use assets

 

3,000

 

 

 

3,253

 

Provision for (recoveries of) losses on accounts receivable

 

4

 

 

 

(70

)

Stock-based compensation

 

26,757

 

 

 

37,720

 

Deferred income taxes

 

4

 

 

 

37

 

Loss on disposal of assets

 

51

 

 

 

16

 

Non-cash restructuring charges

 

2,758

 

 

 

 

Changes in operating assets and liabilities:

 

 

 

Accounts receivable, net

 

2,757

 

 

 

(9,509

)

Inventory

 

4,623

 

 

 

(18,994

)

Prepaid expenses and other current assets

 

(1,753

)

 

 

(3,630

)

Other assets, net

 

(5,219

)

 

 

(570

)

Accounts payable

 

(5,904

)

 

 

3,463

 

Accrued and other long-term liabilities

 

(577

)

 

 

(199

)

Deferred revenues

 

(208

)

 

 

(909

)

Lease liabilities

 

(1,942

)

 

 

(2,934

)

Non-current income taxes payable

 

(13

)

 

 

(507

)

Net cash used in operating activities

 

(14,542

)

 

 

(7,443

)

Cash flows from investing activities:

 

 

 

Acquisition of business, net of cash acquired

 

(664

)

 

 

(291

)

Purchases of property, plant and equipment

 

(21,388

)

 

 

(19,317

)

Acquisition of intangible assets and capitalization of patents

 

(332

)

 

 

(2,245

)

Purchase of marketable securities

 

(99,985

)

 

 

 

Proceeds from maturities and sales of marketable securities

 

49,988

 

 

 

 

Net cash used in investing activities

 

(72,381

)

 

 

(21,853

)

Cash flows from financing activities:

 

 

 

Proceeds from public offerings, net of offering costs

 

 

 

 

82,354

 

Principal payments on term loan, debt and financing leases

 

 

 

 

(428

)

Payment of contingent consideration related to acquisition

 

 

 

 

(326

)

Proceeds from employee stock plan purchases

 

2,358

 

 

 

1,603

 

Proceeds from stock option exercises

 

1,197

 

 

 

1,145

 

Tax payments related to stock award issuances

 

(4,861

)

 

 

(10,606

)

Net cash provided by (used in) financing activities

 

(1,306

)

 

 

73,742

 

Effect of exchange rate changes on cash

 

(477

)

 

 

(235

)

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

 

(88,706

)

 

 

44,211

 

Cash, cash equivalents and restricted cash, beginning of period

 

146,784

 

 

 

102,573

 

Cash, cash equivalents and restricted cash, end of period

$

58,078

 

 

$

146,784

 

Supplemental disclosures:

 

 

 

Cash paid (received) for interest, net

$

 

 

$

117

 

Cash paid for income taxes

 

442

 

 

 

526

 

Operating cash outflows from operating leases

 

3,925

 

 

 

3,513

 

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

 

1,349

 

 

 

8,012

 

Accrued purchases of property, equipment and patents

 

207

 

 

 

2,522

 

 

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

December 31,

 

Year Ended

December 31,

 

 

2022

 

 

 

2021

 

 

 

2022

 

 

 

2021

 

Net loss

$

(22,659

)

 

$

(8,750

)

 

$

(54,579

)

 

$

(29,669

)

Income tax expense (benefit)

 

(99

)

 

 

138

 

 

 

344

 

 

 

(375

)

Other income, net

 

(446

)

 

 

(90

)

 

 

(338

)

 

 

(336

)

Interest (income) expense, net

 

(291

)

 

 

37

 

 

 

(529

)

 

 

163

 

Depreciation and amortization

 

4,072

 

 

 

3,748

 

 

 

15,699

 

 

 

15,059

 

Stock-based compensation

 

6,029

 

 

 

7,988

 

 

 

26,757

 

 

 

37,720

 

Restructuring charges

 

3,892

 

 

 

 

 

 

3,892

 

 

 

 

Adjusted EBITDA

$

(9,502

)

 

$

3,071

 

 

$

(8,754

)

 

$

22,562

 

 

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

December 31,

 

Year Ended

December 31,

 

 

2022

 

 

 

2021

 

 

 

2022

 

 

 

2021

 

Net loss

$

(22,659

)

 

$

(8,750

)

 

$

(54,579

)

 

$

(29,669

)

Add back:

 

 

 

 

 

 

 

Stock-based compensation(1)

 

6,029

 

 

 

7,988

 

 

 

26,757

 

 

 

37,720

 

Amortization of purchased intangibles (1)

 

435

 

 

 

518

 

 

 

1,674

 

 

 

2,671

 

Restructuring charges

 

3,892

 

 

 

 

 

 

3,892

 

 

 

 

Non-GAAP net income (loss)

 

(12,303

)

 

 

(244

)

 

 

(22,256

)

 

 

10,722

 

 

 

 

 

 

 

 

 

GAAP weighted-average shares outstanding

 

45,039

 

 

 

43,277

 

 

 

44,436

 

 

 

42,142

 

Participating securities

 

 

 

 

 

 

 

 

 

 

699

 

Non-GAAP weighted-average number of shares, basic

 

45,039

 

 

 

43,277

 

 

 

44,436

 

 

 

42,841

 

Dilutive effect of common stock equivalents

 

 

 

 

 

 

 

 

 

 

4,341

 

Non-GAAP weighted-average number of shares, diluted

 

45,039

 

 

 

43,277

 

 

 

44,436

 

 

 

47,182

 

 

 

 

 

 

 

 

 

Non-GAAP net income (loss) per share, basic

$

(0.27

)

 

$

(0.01

)

 

$

(0.50

)

 

$

0.25

 

Non-GAAP net income (loss) per share, diluted

$

(0.27

)

 

$

(0.01

)

 

$

(0.50

)

 

$

0.23

 

(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.

 

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