nLIGHT, Inc. Announces Fourth Quarter and Full Year 2021 Results

Revenues of $270.1 million and gross margin of 28.6% for the full year 2021 Revenues of $67.5 million and gross margin of 26.6% for the fourth quarter of 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 fourth quarter and full year 2021.

“nLIGHT delivered 21% year-over-year revenue growth in 2021, which was driven by a 41% year-over-year increase in sales to customers outside of China and growth in each of our end markets,” commented Scott Keeney, nLIGHT’s President and Chief Executive Officer. “While our geographic focus has shifted, our strategy remains focused on leveraging our vertically integrated business model to enable key growth markets.”

“In the fourth quarter of 2021, approximately 89% of our revenue was from customers outside of China, which grew 27% year-over-year. Total revenue for the fourth quarter of 2021 increased 3% year-over-year to $67.5 million, despite a 60% decrease in revenue from customers in China. Gross margin and Adjusted EBITDA were within the guidance range we provided in November. We continue to believe we are well-positioned to grow faster than the overall industry in the long-term.”

Full Year 2021 Financial Highlights

 

Year Ended December 31,

 

 

(In thousands, except percentages)

 

2021

 

 

 

2020

 

 

% Change

Revenues

$

270,146

 

 

$

222,789

 

 

21.3

%

Gross margin

 

28.6

%

 

 

26.6

%

 

 

Loss from operations

$

(30,217

)

 

$

(21,048

)

 

(43.6

) %

Operating margin

 

(11.2

) %

 

 

(9.4

) %

 

 

Net loss

$

(29,669

)

 

$

(20,932

)

 

(41.7

) %

Adjusted EBITDA(1)

$

22,562

 

 

$

18,151

 

 

24.3

%

Adjusted EBITDA, as a percentage of revenues

 

8.4

%

 

 

8.1

%

 

 

(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 $270.1 million for the full year 2021 were up 21.3% compared to $222.8 million for the full year 2020. Gross margin was 28.6% for the full year 2021 compared to 26.6% for the full year 2020. GAAP net loss for the full year 2021 was $(29.7) million, or net loss of $(0.70) per diluted share, compared to net loss of $(20.9) million, or net loss of $(0.55) per diluted share, for the full year 2020. Non-GAAP net income for the full year 2021 was $10.7 million, or non-GAAP net income of $0.23 per diluted share, compared to non-GAAP net income of $7.3 million, or non-GAAP net income of $0.17 per diluted share, for the full year 2020. 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.

Fourth Quarter 2021 Financial Highlights

 

Three Months Ended December 31,

 

 

(In thousands, except percentages)

 

2021

 

 

 

2020

 

 

% Change

Revenues

$

67,453

 

 

$

65,704

 

 

2.7

%

Gross margin

 

26.6

%

 

 

29.9

%

 

 

Loss from operations

$

(8,665

)

 

$

(4,286

)

 

(102.2

) %

Operating margin

 

(12.8

) %

 

 

(6.5

) %

 

 

Net loss

$

(8,750

)

 

$

(4,517

)

 

(93.7

) %

Adjusted EBITDA(1)

$

3,071

 

 

$

8,447

 

 

(63.6

) %

Adjusted EBITDA, as a percentage of revenues

 

4.6

%

 

 

12.9

%

 

 

(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 $67.5 million for the fourth quarter of 2021 were up 2.7% compared to $65.7 million for the fourth quarter of 2020. Gross margin was 26.6% for the fourth quarter of 2021 compared to 29.9% for the fourth quarter of 2020. GAAP net loss for the fourth quarter of 2021 was $(8.8) million, or net loss of $(0.20) per diluted share, compared to net loss of $(4.5) million, or net loss of $(0.12) per diluted share, for the fourth quarter of 2020. Non-GAAP net loss for the fourth quarter of 2021 was $(0.2) million, or non-GAAP net loss of $(0.01) per diluted share, compared to non-GAAP net income of $5.2 million, or non-GAAP net income of $0.12 per diluted share, for the fourth quarter of 2020. 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 2022, nLIGHT expects revenues to be in the range of $61 million to $67 million, gross margin to be in the range of 21% to 25%, and Adjusted EBITDA to be approximately break-even.

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 17, 2022

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 Fourth 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 (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 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, our business strategy and ability to grow our business, and our expectations regarding customer demand for our products, 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: (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, (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 1,300 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,

 

 

2021

 

 

 

2020

 

 

 

2021

 

 

 

2020

 

Revenue:

 

 

 

 

 

 

 

Products

$

50,906

 

 

$

51,690

 

 

$

206,195

 

 

$

184,841

 

Development

 

16,547

 

 

 

14,014

 

 

 

63,951

 

 

 

37,948

 

Total revenue

 

67,453

 

 

 

65,704

 

 

 

270,146

 

 

 

222,789

 

Cost of revenue:

 

 

 

 

 

 

 

Products

 

34,039

 

 

 

33,113

 

 

 

132,867

 

 

 

128,255

 

Development

 

15,472

 

 

 

12,944

 

 

 

59,972

 

 

 

35,170

 

Total cost of revenue(1)

 

49,511

 

 

 

46,057

 

 

 

192,839

 

 

 

163,425

 

Gross profit

 

17,942

 

 

 

19,647

 

 

 

77,307

 

 

 

59,364

 

Operating expenses:

 

 

 

 

 

 

 

Research and development(1)

 

13,984

 

 

 

12,028

 

 

 

54,814

 

 

 

41,164

 

Sales, general, and administrative(1)

 

12,623

 

 

 

11,905

 

 

 

52,710

 

 

 

39,248

 

Total operating expenses

 

26,607

 

 

 

23,933

 

 

 

107,524

 

 

 

80,412

 

Loss from operations

 

(8,665

)

 

 

(4,286

)

 

 

(30,217

)

 

 

(21,048

)

Other income (expense):

 

 

 

 

 

 

 

Interest income (expense), net

 

(37

)

 

 

(44

)

 

 

(163

)

 

 

78

 

Other income, net

 

90

 

 

 

315

 

 

 

336

 

 

 

378

 

Loss before income taxes

 

(8,612

)

 

 

(4,015

)

 

 

(30,044

)

 

 

(20,592

)

Income tax expense (benefit)

 

138

 

 

 

502

 

 

 

(375

)

 

 

340

 

Net loss

$

(8,750

)

 

$

(4,517

)

 

$

(29,669

)

 

$

(20,932

)

Net loss per share, basic

$

(0.20

)

 

$

(0.12

)

 

$

(0.70

)

 

$

(0.55

)

Net loss per share, diluted

$

(0.20

)

 

$

(0.12

)

 

$

(0.70

)

 

$

(0.55

)

Shares used in per share calculations:

 

 

 

 

 

 

 

Basic

 

43,277

 

 

 

38,877

 

 

 

42,142

 

 

 

38,367

 

Diluted

 

43,277

 

 

 

38,877

 

 

 

42,142

 

 

 

38,367

 

(1)Includes stock-based compensation as follows:

 

 

 

 

 

 

 

 

Three Months Ended December 31,

 

Year Ended December 31,

 

 

2021

 

 

 

 

2020

 

 

 

2021

 

 

 

2020

Cost of revenues

$

725

 

$

432

 

$

2,505

 

$

1,621

Research and development

 

3,025

 

 

3,101

 

 

13,433

 

 

9,703

Sales, general, and administrative

 

4,238

 

 

5,448

 

 

21,782

 

 

14,140

 

$

7,988

 

$

8,981

 

$

37,720

 

$

25,464

nLIGHT, Inc.

Condensed Consolidated Balance Sheets

(In thousands)

(Unaudited)

 

As of

 

December 31, 2021

 

December 31, 2020

Assets

 

 

 

Current assets:

 

 

 

Cash and cash equivalents

$

146,534

 

 

$

102,282

 

Accounts receivable, net

 

41,574

 

 

 

31,820

 

Inventory

 

73,746

 

 

 

54,706

 

Prepaid expenses and other current assets

 

15,350

 

 

 

11,767

 

Total current assets

 

277,204

 

 

 

200,575

 

Restricted cash

 

250

 

 

 

291

 

Lease right-of-use assets

 

17,048

 

 

 

12,302

 

Property, plant and equipment, net

 

56,101

 

 

 

44,480

 

Intangible assets, net

 

6,698

 

 

 

8,345

 

Goodwill

 

12,420

 

 

 

12,484

 

Other assets, net

 

3,897

 

 

 

5,167

 

Total assets

$

373,618

 

 

$

283,644

 

 

 

 

 

Liabilities and Stockholders’ Equity

 

 

 

Current liabilities:

 

 

 

Accounts payable

$

26,347

 

 

$

21,057

 

Accrued liabilities

 

14,730

 

 

 

15,321

 

Deferred revenue

 

1,629

 

 

 

2,528

 

Current portion of lease liabilities

 

3,066

 

 

 

2,273

 

Current portion of long-term debt

 

 

 

 

184

 

Total current liabilities

 

45,772

 

 

 

41,363

 

Non-current income taxes payable

 

7,149

 

 

 

7,556

 

Long-term lease liabilities

 

14,612

 

 

 

10,375

 

Long-term debt

 

 

 

 

215

 

Other long-term liabilities

 

3,952

 

 

 

4,221

 

Total liabilities

 

71,485

 

 

 

63,730

 

Stockholders' equity:

 

 

 

Common stock - par value

 

15

 

 

 

15

 

Additional paid-in capital

 

470,760

 

 

 

358,544

 

Accumulated other comprehensive loss

 

(587

)

 

 

(259

)

Accumulated deficit

 

(168,055

)

 

 

(138,386

)

Total stockholders’ equity

 

302,133

 

 

 

219,914

 

Total liabilities and stockholders’ equity

$

373,618

 

 

$

283,644

 

nLIGHT, Inc.

Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)

 

 

 

Year Ended December 31,

 

 

2021

 

 

 

2020

 

Cash flows from operating activities:

 

 

 

Net loss

$

(29,669

)

 

$

(20,932

)

Adjustments to reconcile net loss to net cash provided by (used in) operating activities:

 

 

 

Depreciation

 

9,179

 

 

 

7,710

 

Amortization

 

5,880

 

 

 

5,975

 

Reduction in carrying amount of right-of-use assets

 

3,253

 

 

 

2,916

 

Provision for (recoveries of) losses on accounts receivable

 

(70

)

 

 

88

 

Stock-based compensation

 

37,720

 

 

 

25,464

 

Deferred income taxes

 

37

 

 

 

(11

)

Loss on disposal of assets

 

16

 

 

 

 

Changes in operating assets and liabilities:

 

 

 

Accounts receivable, net

 

(9,509

)

 

 

(4,009

)

Inventory

 

(18,994

)

 

 

(6,937

)

Prepaid expenses and other current assets

 

(3,630

)

 

 

(3,442

)

Other assets, net

 

(570

)

 

 

(3,463

)

Accounts payable

 

3,463

 

 

 

7,306

 

Accrued and other long-term liabilities

 

(199

)

 

 

2,269

 

Deferred revenues

 

(909

)

 

 

1,800

 

Lease liabilities

 

(2,934

)

 

 

(2,820

)

Non-current income taxes payable

 

(507

)

 

 

1,127

 

Net cash provided by (used in) operating activities

 

(7,443

)

 

 

13,041

 

Cash flows from investing activities:

 

 

 

Acquisition of business, net of cash acquired

 

(291

)

 

 

(190

)

Purchases of property, plant and equipment

 

(19,317

)

 

 

(23,416

)

Acquisition of intangible assets and capitalization of patents

 

(2,245

)

 

 

(933

)

Net cash used in investing activities

 

(21,853

)

 

 

(24,539

)

Cash flows from financing activities:

 

 

 

Proceeds from public offerings, net of offering costs

 

82,354

 

 

 

 

Proceeds from term loan

 

 

 

 

15,000

 

Principal payments on term loan, debt and financing leases

 

(428

)

 

 

(15,115

)

Payment of contingent consideration related to acquisition

 

(326

)

 

 

 

Proceeds from employee stock plan purchases

 

1,603

 

 

 

1,393

 

Proceeds from stock option exercises

 

1,145

 

 

 

1,375

 

Tax payments related to stock award issuances

 

(10,606

)

 

 

(6,420

)

Net cash provided by (used in) financing activities

 

73,742

 

 

 

(3,767

)

Effect of exchange rate changes on cash

 

(235

)

 

 

545

 

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

 

44,211

 

 

 

(14,720

)

Cash, cash equivalents and restricted cash, beginning of period

 

102,573

 

 

 

117,293

 

Cash, cash equivalents and restricted cash, end of period

$

146,784

 

 

$

102,573

 

Supplemental disclosures:

 

 

 

Cash paid (received) for interest, net

$

117

 

 

$

(311

)

Cash paid for income taxes

 

526

 

 

 

647

 

Operating cash outflows from operating leases

 

3,513

 

 

 

2,919

 

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

 

8,012

 

 

 

15,127

 

Accrued purchases of property, equipment and patents

 

2,522

 

 

 

788

 

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,

 

 

2021

 

 

 

2020

 

 

 

2021

 

 

 

2020

 

Net loss

$

(8,750

)

 

$

(4,517

)

 

$

(29,669

)

 

$

(20,932

)

Income tax expense (benefit)

 

138

 

 

 

502

 

 

 

(375

)

 

 

340

 

Other income, net

 

(90

)

 

 

(315

)

 

 

(336

)

 

 

(378

)

Interest (income) expense, net

 

37

 

 

 

44

 

 

 

163

 

 

 

(78

)

Depreciation and amortization

 

3,748

 

 

 

3,752

 

 

 

15,059

 

 

 

13,685

 

Stock-based compensation

 

7,988

 

 

 

8,981

 

 

 

37,720

 

 

 

25,464

 

Acquisition and integration-related costs

 

 

 

 

 

 

 

 

 

 

50

 

Adjusted EBITDA

$

3,071

 

 

$

8,447

 

 

$

22,562

 

 

$

18,151

 

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,

 

 

2021

 

 

 

2020

 

 

 

2021

 

 

 

2020

 

Net loss

$

(8,750

)

 

$

(4,517

)

 

$

(29,669

)

 

$

(20,932

)

Add back:

 

 

 

 

 

 

 

Stock-based compensation(1)

 

7,988

 

 

 

8,981

 

 

 

37,720

 

 

 

25,464

 

Amortization of purchased intangibles (1)

 

518

 

 

 

716

 

 

 

2,671

 

 

 

2,724

 

Acquisition and integration-related costs (1)

 

 

 

 

 

 

 

 

 

 

50

 

Non-GAAP net income (loss)

 

(244

)

 

 

5,180

 

 

 

10,722

 

 

 

7,306

 

 

 

 

 

 

 

 

 

GAAP weighted-average shares outstanding

 

43,277

 

 

 

38,877

 

 

 

42,142

 

 

 

38,367

 

Participating securities

 

 

 

 

653

 

 

 

699

 

 

 

544

 

Non-GAAP weighted-average number of shares, basic

 

43,277

 

 

 

39,530

 

 

 

42,841

 

 

 

38,911

 

Dilutive effect of common stock equivalents

 

 

 

 

4,654

 

 

 

4,341

 

 

 

4,228

 

Non-GAAP weighted-average number of shares, diluted

 

43,277

 

 

 

44,184

 

 

 

47,182

 

 

 

43,139

 

 

 

 

 

 

 

 

 

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

$

(0.01

)

 

$

0.13

 

 

$

0.25

 

 

$

0.19

 

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

$

(0.01

)

 

$

0.12

 

 

$

0.23

 

 

$

0.17

 

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

 

Contacts

Joseph Corso

VP, Corporate Development and Investor Relations

nLIGHT, Inc.

(360) 566-4460

joe.corso@nlight.net

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