Luna Innovations Reports 3Q 2013 Financial Results

Luna Innovations announced its financial results for the third quarter and nine months ended Sept. 30, 2013.

As compared to the same quarter last year, total revenue decreased by 16%, from $6.8 million in the third quarter of 2012 to $5.7 million in the third quarter of 2013. Revenues declined by 4% compared to the second quarter of 2013. Technology development revenues decreased by 15% compared to the third quarter of 2012, due primarily to the continued lower level of contract research projects within the company’s optical systems group.

Technology development revenues grew 12% compared to the second quarter of 2013. Products and licensing revenues decreased $0.6 million, or18%, compared to the third quarter of 2012 primarily resulting from sales of prototype shape sensing instruments in the third quarter of 2012 that did not recur in the third quarter of 2013. Gross profit decreased from $2.9 million for the third quarter of 2012 to $2.2 million for the third quarter of 2013. Operating expenses for the third quarter of 2013 decreased by $0.4 million, or 14%, from the third quarter of 2012.

The company reported a net loss attributable to common stockholders of $0.6 million, or $0.04 per diluted common share, for the third quarter of 2013, compared to a net loss of $0.3 million, or $0.02 per diluted common share, in the same quarter last year. Adjusted EBITDA, a non-GAAP measure, which is earnings before interest, taxes, and non-cash expenses of share-based compensation, depreciation, amortization and warrant expense, decreased to $( 0.1) million for the third quarter of 2013, as compared to $0.5 million for the third quarter of 2012.

“We are pleased to see continued sequential growth in the government contracts segment of our business,” said My Chung, CEO of Luna. “Softness in the sales of telecom products continued to adversely impact our overall results for the quarter. We remain keenly focused on the enhancement of our ODiSI platform for distributed strain and temperature sensing and our fiber optic shape sensing technology for minimally invasive medical applications to drive our growth in future quarters.”

Total revenues decreased by 16%, from $6.8 million in the third quarter of 2012 to $5.7 million in the third quarter of 2013.

Technology development revenues decreased by 15%, to $3.1 million, for the third quarter of 2013, from $3.7 million for the third quarter of 2012. Technology development revenues increased by 12% compared to the second quarter of 2013.

Products and licensing revenue decreased by 18%, from $3.2 million in the third quarter of 2012 to $2.6 million in the third quarter of 2013.

Gross profit for the third quarter of 2013 decreased to $2.2 million, or 39% of total revenues, from $2.9 million, or 42% of total revenues, for the third quarter of 2012.

Adjusted EBITDA decreased to $(0.1) million in the third quarter 2013 from $0.5 million in the third quarter of 2012.

Net loss attributable to common stockholders for the third quarter of 2013 increased to $0.6 million for the third quarter of 2013 from $0.3 million for the third quarter of 2012.

Cash and cash equivalents totaled $8.2 million at Sept. 30, 2013, as compared to $6.3 million at Dec. 31, 2012 and $8.7 million at June 30, 2013.

Total revenue decreased by 20% to $16.2 million for the nine months ended Sept. 30, 2013 compared to $20.2 million for the nine months ended September 30, 2012.

Technology development revenues decreased by 26%, from $11.5 million for the nine months ended Sept. 30, 2012 to $8.6 million for the nine months ended Sept. 30, 2013.

Products and licensing revenue decreased by 13%, from $8.7 million for the nine months ended Sept. 30, 2012 to $7.6 million for the nine months ended Sept. 30, 2013.

Gross profit for the nine months ended Sept. 30, 2013 decreased by 28%, to $6.0 million, compared to a gross profit of $8.3 million for the nine months ended Sept. 30, 2012. Gross margin percentages decreased to 37% of revenues for the nine months ended Sept. 30, 2013 from 41% of revenues for the nine months ended Sept. 30, 2012.

Total operating expenses decreased to $9.5 million, or 58% of total revenues, for the nine months ended Sept. 30, 2013, from $9.7 million, or 48% of total revenues, for the nine months ended September 30, 2012.

Adjusted EBITDA decreased to $(1.8) million for the nine months ended September 30, 2013 from $1.0 million for the nine months ended Sept. 30, 2012.

Net income attributable to common stockholders improved to $1.1 million for the nine months ended Sept. 30, 2013, compared to a net loss attributable to common stockholders of $0.9 million for the nine months ended Sept. 30, 2012, largely resulting from a net after-tax gain of $3.7 million realized on the sale of the company’s Secure Computing and Communications group for the nine months ended Sept. 30, 2013.