Scott A. Graeff, President and CEO · 2020. 8. 18. · attractive markets: Military and Defense, Communications, Infrastructure, Energy and Automotive Positioned to . take advantage
28
Lytham Partners Virtual Investor Growth Conference August 19-21, 2020 Scott A. Graeff, President and CEO
Safe HarborSafe Harbor Statement Under the Private Securities Litigation Reform Act of 1995
This presentation includes information that constitutes ldquoforward-looking statementsrdquo made pursuant to the safe harbor provision of the Private Securities
Litigation Reform Act of 1995 that involve risks and uncertainties These statements include the companys expectations regarding the companys future
financial performance including 2020 guidance and the potential demand for its products the companys growth potential its balance sheet and
capitalization its technological advantages the potential impacts of the COVID-19 pandemic on its business operations and financial results and market
trends Management cautions the reader that these forward-looking statements are only predictions and are subject to a number of both known and unknown
risks and uncertainties and actual results performance andor achievements of the company may differ materially from the future results performance
andor achievements expressed or implied by these forward-looking statements as a result of a number of factors These factors include without limitation
failure of demand for the companyrsquos products and services to meet expectations failure of target markets to grow and expand technological and strategic
challenges uncertainties related to the ultimate impact of the COVID-19 pandemic and those risks and uncertainties set forth in the companyrsquos periodic
reports and other filings with the Securities and Exchange Commission (SEC) Such filings are available on the SECrsquos website at wwwsecgov and on the
companyrsquos website at wwwlunainccom The statements made in this presentation are based on information available to Luna as of the date of this
presentation August 19 2020 and Luna undertakes no obligation to update any of the forward-looking statements after the date of this presentation except
as required by law
Adjusted Financial MeasuresIn addition to US GAAP financial information this presentation includes Adjusted EBITDA a non-GAAP financial measure This non-GAAP financial measure
is in addition to and not a substitute for or superior to measures of financial performance prepared in accordance with US GAAP A reconciliation of
Adjusted EBITDA to Net Income is included in the appendix to this presentation
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
3
Luna ndash Enabling the Future with Fiber
Proprietary measurement technology offering unprecedented combination of resolution accuracy and speed
Customers in attractive markets Military and Defense Communications Infrastructure Energy and Automotive
Positioned to take advantage of trends such as vehicle light-weighting and increasing demands on data centers and broadband capacity
Adequately capitalized to fund growth
Long-tenured experienced executive team board
Corporate culture of innovation and integrity
Overview
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
4
Luna is a global company
HistoryIncorporated 1990
IPO 2006
Reporting SegmentsLightwave Luna Labs
RevenueFY19 $705M
FY20 Guidance $81M-83M
AEBITDAFY19 $95M
FY20 Guidance$10M-12M
270+ Employees
Overview
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
5
Luna has a clear vision and established history
LUNArsquos Transformation
Vision Enabling the Future with Fiber
Incorporated Merger with API
Sale of non-core business to OSI and
acquisition of Micron Optics
IPO
Sale of non-core business
to MACOMAcquisition of General
Photonics
1990
2006
2015
2017
2018
2019
2020
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
6
Compelling business model with strong growth potential
temperature acceleration displacement and pressure
Focus on structural health and security
bull Buildings tunnels bridges
bull Perimeter security
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
13
Sensing Material thickness
Product Terahertz technology
Layer thickness measurements for process control inspection and non-destructive testing Advanced technology measures thickness of
opaque materials Unique measurement of composites and
coatings with easy to use hand-held tools Focus on manufacturing environments and
field test for military-aerospacebull Plastic and industrial packagingbull Used extensively on F35 and F22 for
anti-radar surface treatment
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
14
Comms Test
Increased data and video consumption Video forecasted to represent 82 of all
IP traffic in 2022 34 CAGR
Growth in mobile and 4G5G Mobile data traffic growing at 46 CAGR
Cloud services and adoption of Internet of Things Data center traffic growing at 26 CAGR 285 billion IoT networked devices by
2022
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
15
Comms Test Components
Product Optical Vector Analyzer (OVA)
Ensuring speed at the chip level
Unprecedented visibility inside devices ˗you canrsquot fix what you canrsquot see
Reduces time and cost associated with the development of high-speed optical components
Focus on enabling the carriers to move to 5G networks
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
16
Comms Test Short-haul network
Product Optical Backscatter Reflectometer (OBR)
Bandwidth demands continue to drive double-digit connectivity growth
Delivers unprecedented visibility into short-haul networks
Emerging market for on-board aircraft communications
Ensuring network ldquoup timerdquo on Lockheed Martinrsquos F-35
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
17
Luna Labs
Work with universities and government research labs to explore technological feasibility with a goal toward proof of concept
Collaborate with prime contractors government offices and federally-funded RampD centers
Work with contract manufacturers suppliers licensees and distributors to develop everything from small-scale prototypes up to and including market-ready products
Based in Charlottesville VA
2Q FY20 Results
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
19
Second-quarter 2020 Key Financial Results
Solid financial performance
$06M improvement in Adjusted EBITDA1 year-over-year
Total revenues of $186M up 4 year-over-year
Lightwave revenue of $129M up 3 year-over-year
Luna Labs revenue of $56M up 7 year-over-year
Operating income improved to $18M or 10 of total revenues in Q2 2020 from $10M or 6 of total revenues in Q2 2019 due to increased revenue and gross profit as well as improved operating expense leverage
Net income of $14M or $004 per fully diluted share for the three months ended June 30 2020 compared to $08M or $002 per fully diluted share for the three months ended June 30 2019
Adjusted EBITDA1 increased to $30M for the three months ended June 30 2020 compared to $24M for the three months ended June 30 2019
Reaffirmed 2020 outlook tighten range to $81 to $83M in total revenues
1Adj EBITDA is a non-GAAP measure Reconciliation of comparable GAAP measures to non-GAAP measures are included in the appendix to this presentation
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
20
Second-quarter 2020 and Other Recent Accomplishments
Reported solid second-quarter 2020 financial results in challenging COVID environment
Held 6 customer-facing technology educational webinars ~1000 live attendees and more than 1200 leads
Hosted worldwide virtual sales meeting with 47 attendees
Participated in virtual trade shows
Continued to monitor employee feedback with a focus on safety and well-being
Successful implementation of Employee Stock Purchase Plan with approximately 60 participation
Held successful Virtual Annual Shareholder Meeting in May
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
21
($20)
$03
$95
FY16 FY17 FY18 FY19 FY20
Adjusted EBITDA1 2
(millions)
$31
$296 $331
$429
$705
FY16 FY17 FY18 FY19 FY20
Revenue1
(millions)
$357
Strong Financial Results
1 Based on managementrsquos estimates of the impact from the divestiture of Optoelectronics Includes the acquisitions of Micron Optics and General Photonics2Adj EBITDA is a non-GAAP measure Reconciliation of comparable GAAP measures to non-GAAP measures are included in the appendix to this presentation
FY20 Guidance$810 - $830
FY20 Guidance $100 to $120
$45
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
22
A Flexible Balance Sheet and Strong Cash Position
Strong balance sheet on June 30 2020
$912M in total assets
bull $265M in cash and cash equivalents
bull $448M in working capital
Access to $10M revolving credit facility if needed
Continued focus on working capital and reinvestment in business in order to generate long-term sustainable growth
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
23
2020 Financial Outlook
Maintaining FY2020 outlook tightening our range
Total revenues of $81M to $83M
Adjusted EBITDA1 of $10M to $12M
1 Adj EBITDA is a non-GAAP measure Reconciliation of comparable GAAP measures to non-GAAP measures are included in the appendix to this presentation The outlook above does not include any future acquisitions divestitures or unanticipated events
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
24
Luna ndash Enabling the Future with Fiber
Proprietary measurement technology offering unprecedented combination of resolution accuracy and speed
Customers in attractive markets Military and Defense Communications Infrastructure Energy and Automotive
Positioned to take advantage of trends such as vehicle light-weighting and increasing demands on data centers and broadband capacity
Adequately capitalized to fund growth
Long-tenured experienced executive team board
Corporate culture of innovation and integrity
Overview
Appendix
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
26
Reconciliation of Net Income to Adjusted EBITDA
(1) Non-recurring charges consist of transaction-related expenses related to the acquisition of General Photonics
2020 2019 2020 2019
Reconciliation of EBITDA and Adjusted EBITDANet income 1369$ 841$ 253$ 1967$ Loss from discontinued operations net of income tax benefit of $464 - - 1436 -
Net income from continuing operations 1369 841 1689 1967 Interest expense 1 - 1 13 Investment income (4) (77) (64) (268) Income tax expense(benefit) 441 247 579 (1618) Depreciation and amortization 684 653 1363 1166
Reconciliation of Net Income to Adjusted EBITDA Full Year
(1) Non-recurring charges include the following 2017) CEO separation costs and other share-based compensation 2018) Transaction-related expenses associated with the acquisition of Micron Optics Inc 2019) Transaction related expenses and inventory step-up amortization relate to General Photonics acquisition and CFO transition expenses
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
28
New Segment Quarterly Results (in thousands)
March 31 2019 June 30 2019 Sep 30 2019 A Dec 31 2019 March 31 2020 June 30 2020
Total revenues 14833 17814 18389 19480 17141 18576
Cost of revenuesLightwave 4280 5334 5449 5070 4885 5181 Luna Labs 3785 3728 3665 4022 3892 3878
Total cost of revenues 8065 9062 9114 9092 8777 9059
Gross Profit 6768 8752 9275 10388 8364 9517
Operating expenseSelling general and administrative 6207 6003 5745 6416 6377 6202 Research development and engineering 1458 1735 2048 2255 1597 1505
Total operating expense 7665 7738 7793 8671 7974 7707
Operating income (897)$ 1014$ 1482$ 1717$ 390$ 1810$
A The Company revised its results for the three months ended September 30 2019 The Company has concluded these adjustments are not material individually or in the aggregate
Three Months Ended
Scott A Graeff President and CEO
Safe Harbor
Luna ndash Enabling the Future with Fiber
Luna is a global company
Luna has a clear vision and established history
Compelling business model with strong growth potential
Lightwave 2019 revenue1 snapshot
Luna Overview
Where Does Luna Play
Sensing
Sensing Short-range high-resolution
Sensing long-range high-speed
Sensing Material thickness
Comms Test
Comms Test Components
Comms Test Short-haul network
Luna Labs
2Q FY20 Results
Second-quarter 2020 Key Financial Results
Second-quarter 2020 and Other Recent Accomplishments
Slide Number 21
A Flexible Balance Sheet and Strong Cash Position
2020 Financial Outlook
Luna ndash Enabling the Future with Fiber
Appendix
Reconciliation of Net Income to Adjusted EBITDA
Reconciliation of Net Income to Adjusted EBITDA Full Year
New Segment Quarterly Results
(in thousands)
Three Months Ended
December 31 2018
A
March 31 2019
C
June 30 2019
September 30 2019
December 31 2019
March 31 2020
June 30 2020
Revenues
Lightwave
$ 11345
$ 10221
$ 12523
$ 13120
$ 13988
$ 11554
12933
Luna Labs
5548
6641
5291
5301
5492
5587
5642
Total revenues
16893
16862
17814
18421
19480
17141
18576
Cost of revenues
Lightwave
4002
3836
5334
5471
5070
4885
5181
Luna Labs
4268
4816
3728
3665
4022
3892
3878
Total cost of revenues
8270
8652
9062
9136
9092
8777
9059
Gross Profit
8623
8210
8752
9285
10388
8364
9517
Operating expense
Selling general and administrative
6394
7165
6003
5754
6415
6377
6202
Research development and engineering
1894
1708
1735
2047
2255
1597
1505
Total operating expense
8288
8873
7738
7801
8670
7974
7707
Operating income
$ 335
$ (663)
$ 1014
$ 1484
$ 1718
$ 390
$ 1810
Historical - Hidden
A
Includes $751000 of costs associated with the acquisition of Micron Optics
B
Unaudited pro forma financials assumes the General Photonics business was acquired on January 1 2019
C
Includes $898000 of costs associated with the acquisition of General Photonics
Year Ended December 31
(unaudited)
2016
2017
2018
2019
Reconciliation of EBITDA and Adjusted EBITDA
Net (loss)income
$ (2370)
$ 14615
$ 11004
$ 5343
Less income from discontinued operations net of income taxes
300
15866
9766
- 0
Loss from discontinued operations net of income tax benefit of $464
- 0
- 0
- 0
- 0
Net income from continuing operations
(2670)
(1251)
1238
5343
Interest expense
319
217
124
16
Investment income
- 0
- 0
(549)
(394)
Income tax (benefit)expense
(135)
(1148)
48
(1654)
Depreciation and amortization
1466
1137
908
2503
EBITDA
(1020)
(1045)
1769
5814
Share-based compensation
860
715
628
1544
Non-Recurring Charges (1)
- 0
596
751
1390
Amortization of Inventory Step-up
- 0
- 0
- 0
725
Adjusted EBITDA
$ (160)
$ 266
$ 3148
$ 9473
1
Non-recurring charges include the following 2017) CEO separation costs and other share-based compensation 2018) Transaction-related expenses associated with the acquisition of Micron Optics Inc 2019) Transaction related expenses and inventory step-up amortization relate to General Photonics acquisition and CFO transition expenses
Luna Innovations Incorporated
Reconciliation of Non-GAAP Financial Measures
(in thousands)
Three Months Ended
Six Months Ended
June 30
June 30
2020
2019
2020
2019
(Unaudited)
(Unaudited)
Reconciliation of EBITDA and Adjusted EBITDA
Net income
$ 1369
$ - 0
$ 841
$ 253
$ - 0
$ 1967
Loss from discontinued operations net of income tax benefit of $464
- 0
- 0
- 0
1436
- 0
- 0
Gain on sale of asset
- 0
- 0
- 0
- 0
- 0
- 0
Net income from continuing operations
1369
- 0
841
1689
- 0
1967
Interest expense
1
- 0
- 0
1
- 0
13
Investment income
(4)
- 0
(77)
(64)
- 0
(268)
Income tax expense(benefit)
441
- 0
247
579
- 0
(1618)
Depreciation and amortization
684
- 0
653
1363
- 0
1166
EBITDA
2490
- 0
1664
3568
- 0
1260
Share-based compensation
465
- 0
378
967
- 0
721
Non-Recurring Charges (1)
- 0
- 0
44
- 0
- 0
942
CFO Recruiting and Severance
- 0
- 0
- 0
- 0
- 0
- 0
Amortization of Inventory Step-up
- 0
- 0
310
- 0
- 0
412
- 0
- 0
- 0
- 0
- 0
- 0
Adjusted EBITDA
$ 2955
$ - 0
$ 2396
$ 4535
$ - 0
$ 3335
EBITDA Margin Percent on Total Revenues
134
93
100
39
Adjusted EBITDA Margin Percent on Total Revenues
159
134
127
102
Reconciliation of Non-GAAP EPS
Diluted EPS
$ 004
$ 002
$ 001
$ 005
Loss from discontinued operations net of income taxes
Existing Technology amortization missed from 101518-63019
- 0
15560
Amortization catch up from 101518-63019 in July 2019 only
In-process RampD
200000
0
- 0
1650000
4091764
Micron Purchase Amortization Detail - 812019 and forward
Trade Name
150000
36
4167
Customer Relationships
100000
84
1190
Existing Technology
1200000
60
20000
Amortization going forward
In-process RampD
200000
0
- 0
1650000
2535714
General Pho Purchase Amortization Detail - 312019
Trade Name
400000
36
11111
22822
Customer Relationships
600000
180
3333
22834
Existing Technology
7200000
96
75000
22827
In-process RampD
- 0
0
- 0
8200000
8944444
General Pho Inventory Step-up Amortization - 312019
WIP amp Fin Goods
724760
7
103537
Ends 93019
PampL Summary - Luna Innovations
For the Three Months Ending March 31 2020
QTD
QTD
QTD
YTD
YTD
YTD
Actual
Budget
Variance
Actual
Budget
Variance
fav(un-fav)
fav(un-fav)
Revenues
Lightwave
12933344
13366455
(433536)
24487335
25564000
(1077090)
686
Luna Labs
5642348
6075202
(432854)
11229350
11675307
(445957)
314
Total Revenues
18575692
19441657
(866390)
35716685
37239307
(1523047)
Cost of Revenues
Product and Licensing
5181057
5789978
608921
10066386
11082697
1016311
282
TDD
3877888
4448571
570683
7769627
8526736
757109
218
Total Cost of Revenues
9058945
10238549
570683
17836013
19609433
1773420
499
Gross Margin
Product and Licensing - $
7752287
7576477
175810
14420949
14481303
(60354)
Product and Licensing -
60
57
3
59
57
2
TDD - $
1764460
1626631
137829
3459723
3148571
311152
TDD -
31
27
4
31
27
4
Total Gross Margin
9516747
9203108
313639
17880672
17629874
250798
Gross Margin
51
47
4
50
47
3
501
Operating Expenses
Selling General amp Admin
6202338
8155800
1953888
12578977
14477853
1899301
Research Devel amp Engineering
1504800
647122
(857678)
3101865
2798808
(303057)
Total Operating Expenses
7707138
8802922
1096209
15680842
17276661
1595819
439
Operating Income (Loss)
1809609
400186
1409423
2199830
353213
1846617
62
Other Expense (Income)
Interest
930
985
55
1145
2195
1050
00
Investment Income
(4435)
(75000)
(70565)
(63790)
(150000)
(86210)
-02
Tax Expense
440626
118551
(498831)
579203
125253
(630706)
16
Tax Benefit from release of VA
-
-
-
-
-
-
00
Gainloss on foreigh exch
-
-
-
-
-
-
00
Other
3649
-
(3649)
(5236)
-
5236
-00
440770
44536
(396234)
511322
(22552)
(533874)
14
Income from continuing operations
1368839
355650
1805658
1688508
375765
2380491
Income from Disc Ops
Operating Income from Disc Ops
-
-
- 0
-
-
- 0
Gainloss of Asset Sale
-
-
- 0
(1435903)
-
(1435903)
Total Income from Disc Ops
- 0
- 0
- 0
(1435903)
- 0
(1435903)
Net Income (Loss)
1368839
355650
1013189
252605
375765
(123160)
07
Dividend on Preferred
- 0
- 0
- 0
- 0
- 0
- 0
Net Income (Loss) available to Common Shareholders
1368839
355650
1013189
252605
375765
(123160)
07
Depreciation
244214
491046
From Cash Flow
Amortization
439787
872410
From Cash Flow
Stock Compensation
465109
966932
From Cash Flow
Acquisition Costs
- 0
- 0
Amortization of Inventory Step-up
- 0
- 0
CFO Recruiting amp Severance
- 0
- 0
Treasury Stock Activity
63020
Stock Buyback - Held with Northland
Trade date
Settlement Date
of Shares
Avg Price
Commission
Trade date Total $
Number of Days
Weighted Avg
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
= Trades Not Settled
$000
$000
$000
$000
YTD Avg
0
0
Trade date
Settlement Date
of Shares
Avg Price
Commission
Trade date Total $
Number of Days
Weighted Avg
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
QTD Avg
0
0
0
0
2016 Amounts under program
205500
$24880840
$25086340
2017 Amounts under program
433179
$75649353
$76082532
2018 Amounts under program
132450
$30604099
$30736549
2019 Amounts under program
333953
$198663889
$199999701
Total
110508200
329798181
331905122
For Q Disclosure
Management Buyback - Held with AST
Date
Shares
YTD days os
YTD weighted avg
QTD days os
QTD Weighted Avg
Month
Quarter
Year
52720
Garrett James
6500
35
1250
35
2500
Jan
31
- 0
- 0
52720
Graeff Scott
17450
35
3356
35
6712
Feb
29
- 0
- 0
52720
Soller Brian
9000
35
1731
35
3462
Mar
31
91
91
44013
- 0
91
- 0
Apr
30
- 0
- 0
44013
- 0
91
- 0
May
31
- 0
- 0
44013
- 0
91
- 0
Jun
30
91
182
44013
- 0
91
- 0
Jul
31
- 0
- 0
44013
- 0
91
- 0
Aug
31
- 0
- 0
44013
- 0
91
- 0
Sept
30
92
274
- 0
- 0
Oct
31
- 0
- 0
- 0
- 0
Nov
30
- 0
- 0
- 0
- 0
Dec
31
92
366
32950
6337
12673
BOD buyback
YTD
$000
$000
44013
- 0
Qtr
$000
$000
44013
- 0
Luna
Date
CloseLast
1220
738
Average Close Price
1320
718
Year-To-Date
$ 696
1620
73
Quarter-To-Date
$ 652
1720
735
1820
756
1920
777
11020
787
11320
803
11420
804
11520
832
11620
85
11720
845
12120
827
12220
833
12320
849
12420
844
12720
828
12820
856
12920
85
13020
846
13120
819
2320
825
2420
821
2520
82
2620
819
2720
837
21020
85
21120
858
21220
904
21320
895
21420
897
21820
891
21920
891
22020
907
22120
923
22420
861
22520
745
22620
759
22720
707
22820
67
3220
713
3320
693
3420
719
3520
689
3620
75
3920
672
31020
66
31120
599
31220
521
31320
522
31620
491
31720
553
31820
473
31920
487
32020
48
32320
509
32420
543
32520
582
32620
617
32720
583
33020
623
33120
615
4120
585
4220
583
4320
572
4620
607
4720
605
4820
631
4920
665
41320
656
41420
683
41520
711
41620
734
41720
727
42020
73
42120
672
42220
683
42320
691
42420
715
42720
721
42820
74
42920
777
43020
763
5120
724
5420
751
5520
762
5620
76
5720
749
5820
782
51120
704
51220
705
51320
62
51420
578
51520
537
51820
591
51920
625
52020
61
52120
6
52220
609
52620
615
52720
62
52820
609
52920
61
6120
629
6220
628
6320
653
6420
649
6520
663
6820
667
6920
635
61020
643
61120
583
61220
606
61520
625
61620
631
61720
615
61820
599
61920
601
62220
616
62320
624
62420
615
62520
615
62620
571
62920
585
63020
584
Qtr
1
2
3
4
Options
Options
Aggregate Strike Price
Intrinsic Value
Outstanding
Exercisable
Outstanding
Exercisable
Outstanding
Exercisable
Luna
2418245
1309606
$6482283
$2709686
7767068
4952824
2418245
1309606
6482283
2709686
7767068
4952824
Warrants Aaron Chase Aaron ChaseCarilion exercised all warrants in Q2 and Q3 2018
0
0
0
0
2418245
1309606
6482283
2709686
Average Strike Price
$ 268
$ 207
Pull Cancelled for whole year
Cancels
Q1
35659 Aaron Chase Aaron Chase22999 of canceled shares didnrsquot show up until Q2-20 report
Aaron Chase Aaron ChaseCarilion exercised all warrants in Q2 and Q3 2018
$ 364
12990180
Outstanding 12312019
3160397
Q2
13124
$ 211
2769912
Q3
- 0
ERRORDIV0
- 0
Grants
20000
Q4
- 0
ERRORDIV0
- 0
Exercised
(662965)
48783
$ 323
15760092
Canceled
(48783)
Corrected Termed EEs from 2019
(50404)
These were corrected in June 2020
2418245
Remaining life
Options
Avg Life
- 0
Outstanding
Luna
2418245
644
Exercisable
1309606
474
Remaining service
Luna
2418245
See awards outstanding by grant price range report and Disclosure report for information on this tab
Luna Innovations
Additional Notes
EPS Calculations
During Jan-2019 and 2020 Management was awarded Performance Based Grants and Time Based Grants
63020
The Performance Based Grants vest after 3 years and are issued only if the performance is achieved
The Time Based Grants vest each year for 3 years Grants are issued once vested each year
Yearly BOD Grants
Basic EPS
DSU deferred stock units vest in a year but do not become issued until the Director leaves the Board This started in 2018
Net Income (loss) Per Share from Continuing Operations
YTD
Diluted
QTD
Diluted
DSU awards vest in May 2021 and will be added to the middle section of the EPS in May 2021
Net Income from Continuing Operations
1688508
1368839
Rich Roedel
8877
704
62500
Common Shares Outstanding
30484797
30589249
Barry Phelps
5326
704
37500
$ 006
$ 005
$ 004
$ 004
Leigh Anderson
5326
704
37500
Mary Beth Vitale
5326
704
37500
Net income (loss) Per Share attributable to common shareholders
RSU restricted stock units vest and are issued in a year and will be added to the bottom of the EPS in May 2021
Net Income (Loss) available to Shareholders
252605
1368839
Don Pastor
5326
704
37500
Common Shares Outstanding
30484797
30589249
Gary Spiegel
5326
704
37500
$ 001
$ 001
$ 004
$ 004
Net income (loss) Per Share from Discontinued Operations
Net Income from Discontinued Operations
(1435903)
- 0
Common Shares Outstanding
30484797
30589249
$ (005)
$ (004)
$ - 0
$ - 0
Diluted EPS
Net Income(Loss) available to SHs
252605
1368839
Common Shares Outstanding
30484797
30589249
Common Stock Equivalent
2010153
1876873
$ 001
- 0 Grant Thornton LLP Grant Thornton LLPAs earnings from continuing operations are negative (loss) basic and diluted EPS equal one another
$ 004 Grant Thornton LLP Grant Thornton LLPAs earnings from continuing operations are negative (loss) basic and diluted EPS equal one another
- 0 Grant Thornton LLP Grant Thornton LLPAs earnings from continuing operations are negative (loss) basic and diluted EPS equal one another
Non-GAAP Diluted EPS
Net income (loss) Per Share attributable to common shareholders
Net Income (Loss) available to Shareholders
252605
1368839
Loss from discontinued operations
1435903
- 0
Share-based compensation
966932
465109
Amortization of acquired intangibles
344405
688810
Acquisition related costs
- 0
- 0
Amortization of Inventory Step-up
- 0
- 0
Common Shares Outstanding
30484797
30589249
Common Stock Equivalent
2010153
1876873
$ 009
$ 008
YTD
QTD
Total issued shares
32470276
Average Close Price
$ 696
$ 652
Total treasury
1672741
Shares Outstanding
30797535
Net change in denominator
1404924 Kelly Bewick Aaron Chasesee Dilution (stock option) dilutive tab
1264984
BOD fees paid in DSUs Aaron Chase Aaron ChaseFrom Equity Award Transactions Report
Month
Quarter
Year
Balance at 112019 - DSU outstanding
591457
591457
Jan
31
Issued during Q1 2020
7114
7114
Feb
29
Issued during Q2 2020
3947
7894
Mar
31
91
91
Annual grant DSU vested 5112020
10521 KBSResults KBSResultsEnter 2019 DSU annual grant when vest in 2020 (probably May) you do not need to enter annual RSU because it will be issued in AST
21042
Apr
30
Deferred Equity Issuance 6012020
(7809) KBSResults Aaron ChaseM Wise and J Williamson retired from the BoD in May 2020 Wise Deferred Comp will be issued every June 1 for 10 years Williamson Deferred Comp will be issued every June 1 for 5 years
Grant Thornton LLP Grant Thornton LLPAs earnings from continuing operations are negative (loss) basic and diluted EPS equal one another
Grant Thornton LLP Grant Thornton LLPAs earnings from continuing operations are negative (loss) basic and diluted EPS equal one another
(15619)
May
31
Issued during Q3 2020
- 0
- 0
Jun
30
91
182
Issued during Q4 2020
- 0
- 0
Jul
31
Aug
31
Sept
30
92
274
Oct
31
Totals (Antidilutive)
2010153
1876873
Nov
30
Dec
31
92
366
Shares Outstanding as of 112020
31788896
As Of Date
Transaction
Reason
Name
Shares Issued
Shares Retired
Running Total
01012020
Normal
Balance Roll Forward
- 0
- 0
31788896
01082020
Normal
Option Exercise
Williamson John
12000000
- 0
31908896
01082020
Normal
Retirement - Vested Restriced Stock
Exer Options
Williamson John
- 0
2000000
31888896
01102020
Normal
Option Exercise
Roedel Rich
6000000
- 0
31948896
01142020
Normal
2019 Time-Based RSU Vesting
Messick Dale
666700
- 0
31955563
01142020
Normal
2019 Time-Based RSU Vesting
Graeff Scott
3066700
- 0
31986230
01142020
Normal
2019 Time-Based RSU Vesting
Soller Brian
1066700
- 0
31996897
01142020
Normal
2019 Time-Based RSU Vesting
Garrett James
766700
- 0
32004564
01142020
Normal
2019 Time-Based RSU Retirement
Taxes
Graeff Scott
- 0
920000
31995364
01142020
Normal
2019 Time-Based RSU Retirement
Taxes
Soller Brian
- 0
320000
31992164
01142020
Normal
2019 Time-Based RSU Retirement
Taxes
Garrett James
- 0
230000
31989864
01142020
Normal
Option Exercise
Burris Kevin
100000
- 0
31990864
01292020
Normal
Option Exercise
Carr Dustin
3212300
- 0
32022987
01272020
Normal
Option Exercise
Chen James
334000
- 0
32026327
02192020
Normal
Option Exercise
McPherson Daniel
534800
- 0
32031675
03122020
Normal
Option Exercise
Haber Todd
2500000
- 0
32056675
03122020
Normal
Option Exercise
Graver Thomas
4558100
- 0
32102256
03122020
Normal
Option Exercise
Baez Michael
911200
- 0
32111368
03062020
Normal
Option Exercise
Farooqui Salvan
1500000
- 0
32126368
05122020
Normal
Option Exercise
Baez Michael
950000
- 0
32135868
05142020
Normal
Option Exercise
Haber Todd
4300000
- 0
32178868
05142020
Normal
Option Exercise
Graver Thomas
4746100
- 0
32226329
05112020
Normal
Annual Equity Grant Vesting-BoD
Pastor Don
580000
- 0
32232129
05112020
Normal
Annual Equity Grant Vesting-BoD
Williamson John
580000
- 0
32237929
06012020
Normal
Deferred Stock Issuance-BoD
Wise Mike
980900
- 0
32247738
06012020
Normal
Deferred Stock Issuance-BoD
Williamson John
3756800
32285306
06112020
Normal
Option Exercise
Wise Mike
24000000
32525306
06112020
Normal
Retirement - Vested Stock
Exer Options
Wise Mike
6153000
32463776
06082020
Normal
Option Exercise
Pruzan Michael
400000
32467776
06292020
Normal
Option Exercise
Farooqui Salvan
250000
32470276
Date Issued
Balance Outstanding
Number of Days
Weighted Avg
Treasury Shares Weighted Average
Year-to-Date
YTD
QTD
1120
31788896
182
31788896
Graeff July 2
115000
115000
1820
31908896
175
115385
Q2 2015
29925
29925
1820
31888896
175
(19231)
2014
22725
22725
11020
31948896
173
57033
2016 Mgmt buyback
73675
73675
11420
31955563
169
6191
2016 repurchase program
205500
205500
11420
31986230
169
28477
2017 Mgmt buyback
90900
90900
11420
31996897
169
9905
2017 BOD buyback
100000
100000
11420
32004564
169
7119
2017 repurchase program
433179
433179
11420
31995364
169
(8543)
2018 repurchase program
132450
132450
11420
31992164
169
(2971)
2018 Mgmt buyback
49751
49751
11420
31989864
169
(2136)
2019 Mgmt buyback
52733
52733
11420
31990864
169
929
2019 repurchase program
333953
333953
12920
32022987
154
27181
2020 Mgmt buyback
6337
12673
12720
32026327
156
2863
21920
32031675
133
3908
164612764
165246418
31220
32056675
111
15247
31220
32102256
111
27799
31220
32111368
111
5557
567659
3620
32126368
117
9643
Treasury on AST
567664
51220
32135868
50
2610
Diff
(5)
51420
32178868
48
11341
51420
32226329
48
12517
51120
32232129
51
1625
51120
32237929
51
1625
6120
32247738
30
1617
6120
32285306
30
6193
61120
32525306
20
26374
61120
32463776
20
(6762)
6820
32467776
23
505
62920
32470276
2
27
YTD Average Shares Outstanding
32130925
Quarter-to Date
112020
31788896
91
31788896
1820
31908896
91
120000
1820
31888896
91
(20000)
11020
31948896
91
60000
11420
31955563
91
6667
11420
31986230
91
30667
11420
31996897
91
10667
11420
32004564
91
7667
11420
31995364
91
(9200)
11420
31992164
91
(3200)
11420
31989864
91
(2300)
11420
31990864
91
1000
12920
32022987
91
32123
12720
32026327
91
3340
21920
32031675
91
5348
31220
32056675
91
25000
31220
32102256
91
45581
31220
32111368
91
9112
3620
32126368
91
15000
51220
32135868
50
5220
51420
32178868
48
22681
51420
32226329
48
25034
51120
32232129
51
3251
51120
32237929
51
3251
6120
32247738
30
3234
6120
32285306
30
12385
61120
32525306
20
52747
61120
32463776
20
(13523)
6820
32467776
23
1011
62920
32470276
2
55
QTD Average Shares Outstanding
32241713
C1
TA to the Summary tab
C2
TA to the Avg Stock Price tab
C3
TA to the Options Outstanding YTD tab
C4
TA to the Equity Rollforward WP
C5
TA to the AST Report in the Equity Rollfoward WP
C6
TA to the Options Outstanding QTD tab
C7
Custom 7
C8
See comment box
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
2
Safe HarborSafe Harbor Statement Under the Private Securities Litigation Reform Act of 1995
This presentation includes information that constitutes ldquoforward-looking statementsrdquo made pursuant to the safe harbor provision of the Private Securities
Litigation Reform Act of 1995 that involve risks and uncertainties These statements include the companys expectations regarding the companys future
financial performance including 2020 guidance and the potential demand for its products the companys growth potential its balance sheet and
capitalization its technological advantages the potential impacts of the COVID-19 pandemic on its business operations and financial results and market
trends Management cautions the reader that these forward-looking statements are only predictions and are subject to a number of both known and unknown
risks and uncertainties and actual results performance andor achievements of the company may differ materially from the future results performance
andor achievements expressed or implied by these forward-looking statements as a result of a number of factors These factors include without limitation
failure of demand for the companyrsquos products and services to meet expectations failure of target markets to grow and expand technological and strategic
challenges uncertainties related to the ultimate impact of the COVID-19 pandemic and those risks and uncertainties set forth in the companyrsquos periodic
reports and other filings with the Securities and Exchange Commission (SEC) Such filings are available on the SECrsquos website at wwwsecgov and on the
companyrsquos website at wwwlunainccom The statements made in this presentation are based on information available to Luna as of the date of this
presentation August 19 2020 and Luna undertakes no obligation to update any of the forward-looking statements after the date of this presentation except
as required by law
Adjusted Financial MeasuresIn addition to US GAAP financial information this presentation includes Adjusted EBITDA a non-GAAP financial measure This non-GAAP financial measure
is in addition to and not a substitute for or superior to measures of financial performance prepared in accordance with US GAAP A reconciliation of
Adjusted EBITDA to Net Income is included in the appendix to this presentation
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
3
Luna ndash Enabling the Future with Fiber
Proprietary measurement technology offering unprecedented combination of resolution accuracy and speed
Customers in attractive markets Military and Defense Communications Infrastructure Energy and Automotive
Positioned to take advantage of trends such as vehicle light-weighting and increasing demands on data centers and broadband capacity
Adequately capitalized to fund growth
Long-tenured experienced executive team board
Corporate culture of innovation and integrity
Overview
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
4
Luna is a global company
HistoryIncorporated 1990
IPO 2006
Reporting SegmentsLightwave Luna Labs
RevenueFY19 $705M
FY20 Guidance $81M-83M
AEBITDAFY19 $95M
FY20 Guidance$10M-12M
270+ Employees
Overview
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
5
Luna has a clear vision and established history
LUNArsquos Transformation
Vision Enabling the Future with Fiber
Incorporated Merger with API
Sale of non-core business to OSI and
acquisition of Micron Optics
IPO
Sale of non-core business
to MACOMAcquisition of General
Photonics
1990
2006
2015
2017
2018
2019
2020
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
6
Compelling business model with strong growth potential
temperature acceleration displacement and pressure
Focus on structural health and security
bull Buildings tunnels bridges
bull Perimeter security
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
13
Sensing Material thickness
Product Terahertz technology
Layer thickness measurements for process control inspection and non-destructive testing Advanced technology measures thickness of
opaque materials Unique measurement of composites and
coatings with easy to use hand-held tools Focus on manufacturing environments and
field test for military-aerospacebull Plastic and industrial packagingbull Used extensively on F35 and F22 for
anti-radar surface treatment
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
14
Comms Test
Increased data and video consumption Video forecasted to represent 82 of all
IP traffic in 2022 34 CAGR
Growth in mobile and 4G5G Mobile data traffic growing at 46 CAGR
Cloud services and adoption of Internet of Things Data center traffic growing at 26 CAGR 285 billion IoT networked devices by
2022
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
15
Comms Test Components
Product Optical Vector Analyzer (OVA)
Ensuring speed at the chip level
Unprecedented visibility inside devices ˗you canrsquot fix what you canrsquot see
Reduces time and cost associated with the development of high-speed optical components
Focus on enabling the carriers to move to 5G networks
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
16
Comms Test Short-haul network
Product Optical Backscatter Reflectometer (OBR)
Bandwidth demands continue to drive double-digit connectivity growth
Delivers unprecedented visibility into short-haul networks
Emerging market for on-board aircraft communications
Ensuring network ldquoup timerdquo on Lockheed Martinrsquos F-35
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
17
Luna Labs
Work with universities and government research labs to explore technological feasibility with a goal toward proof of concept
Collaborate with prime contractors government offices and federally-funded RampD centers
Work with contract manufacturers suppliers licensees and distributors to develop everything from small-scale prototypes up to and including market-ready products
Based in Charlottesville VA
2Q FY20 Results
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
19
Second-quarter 2020 Key Financial Results
Solid financial performance
$06M improvement in Adjusted EBITDA1 year-over-year
Total revenues of $186M up 4 year-over-year
Lightwave revenue of $129M up 3 year-over-year
Luna Labs revenue of $56M up 7 year-over-year
Operating income improved to $18M or 10 of total revenues in Q2 2020 from $10M or 6 of total revenues in Q2 2019 due to increased revenue and gross profit as well as improved operating expense leverage
Net income of $14M or $004 per fully diluted share for the three months ended June 30 2020 compared to $08M or $002 per fully diluted share for the three months ended June 30 2019
Adjusted EBITDA1 increased to $30M for the three months ended June 30 2020 compared to $24M for the three months ended June 30 2019
Reaffirmed 2020 outlook tighten range to $81 to $83M in total revenues
1Adj EBITDA is a non-GAAP measure Reconciliation of comparable GAAP measures to non-GAAP measures are included in the appendix to this presentation
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
20
Second-quarter 2020 and Other Recent Accomplishments
Reported solid second-quarter 2020 financial results in challenging COVID environment
Held 6 customer-facing technology educational webinars ~1000 live attendees and more than 1200 leads
Hosted worldwide virtual sales meeting with 47 attendees
Participated in virtual trade shows
Continued to monitor employee feedback with a focus on safety and well-being
Successful implementation of Employee Stock Purchase Plan with approximately 60 participation
Held successful Virtual Annual Shareholder Meeting in May
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
21
($20)
$03
$95
FY16 FY17 FY18 FY19 FY20
Adjusted EBITDA1 2
(millions)
$31
$296 $331
$429
$705
FY16 FY17 FY18 FY19 FY20
Revenue1
(millions)
$357
Strong Financial Results
1 Based on managementrsquos estimates of the impact from the divestiture of Optoelectronics Includes the acquisitions of Micron Optics and General Photonics2Adj EBITDA is a non-GAAP measure Reconciliation of comparable GAAP measures to non-GAAP measures are included in the appendix to this presentation
FY20 Guidance$810 - $830
FY20 Guidance $100 to $120
$45
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
22
A Flexible Balance Sheet and Strong Cash Position
Strong balance sheet on June 30 2020
$912M in total assets
bull $265M in cash and cash equivalents
bull $448M in working capital
Access to $10M revolving credit facility if needed
Continued focus on working capital and reinvestment in business in order to generate long-term sustainable growth
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
23
2020 Financial Outlook
Maintaining FY2020 outlook tightening our range
Total revenues of $81M to $83M
Adjusted EBITDA1 of $10M to $12M
1 Adj EBITDA is a non-GAAP measure Reconciliation of comparable GAAP measures to non-GAAP measures are included in the appendix to this presentation The outlook above does not include any future acquisitions divestitures or unanticipated events
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
24
Luna ndash Enabling the Future with Fiber
Proprietary measurement technology offering unprecedented combination of resolution accuracy and speed
Customers in attractive markets Military and Defense Communications Infrastructure Energy and Automotive
Positioned to take advantage of trends such as vehicle light-weighting and increasing demands on data centers and broadband capacity
Adequately capitalized to fund growth
Long-tenured experienced executive team board
Corporate culture of innovation and integrity
Overview
Appendix
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
26
Reconciliation of Net Income to Adjusted EBITDA
(1) Non-recurring charges consist of transaction-related expenses related to the acquisition of General Photonics
2020 2019 2020 2019
Reconciliation of EBITDA and Adjusted EBITDANet income 1369$ 841$ 253$ 1967$ Loss from discontinued operations net of income tax benefit of $464 - - 1436 -
Net income from continuing operations 1369 841 1689 1967 Interest expense 1 - 1 13 Investment income (4) (77) (64) (268) Income tax expense(benefit) 441 247 579 (1618) Depreciation and amortization 684 653 1363 1166
Reconciliation of Net Income to Adjusted EBITDA Full Year
(1) Non-recurring charges include the following 2017) CEO separation costs and other share-based compensation 2018) Transaction-related expenses associated with the acquisition of Micron Optics Inc 2019) Transaction related expenses and inventory step-up amortization relate to General Photonics acquisition and CFO transition expenses
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
28
New Segment Quarterly Results (in thousands)
March 31 2019 June 30 2019 Sep 30 2019 A Dec 31 2019 March 31 2020 June 30 2020
Total revenues 14833 17814 18389 19480 17141 18576
Cost of revenuesLightwave 4280 5334 5449 5070 4885 5181 Luna Labs 3785 3728 3665 4022 3892 3878
Total cost of revenues 8065 9062 9114 9092 8777 9059
Gross Profit 6768 8752 9275 10388 8364 9517
Operating expenseSelling general and administrative 6207 6003 5745 6416 6377 6202 Research development and engineering 1458 1735 2048 2255 1597 1505
Total operating expense 7665 7738 7793 8671 7974 7707
Operating income (897)$ 1014$ 1482$ 1717$ 390$ 1810$
A The Company revised its results for the three months ended September 30 2019 The Company has concluded these adjustments are not material individually or in the aggregate
Three Months Ended
Scott A Graeff President and CEO
Safe Harbor
Luna ndash Enabling the Future with Fiber
Luna is a global company
Luna has a clear vision and established history
Compelling business model with strong growth potential
Lightwave 2019 revenue1 snapshot
Luna Overview
Where Does Luna Play
Sensing
Sensing Short-range high-resolution
Sensing long-range high-speed
Sensing Material thickness
Comms Test
Comms Test Components
Comms Test Short-haul network
Luna Labs
2Q FY20 Results
Second-quarter 2020 Key Financial Results
Second-quarter 2020 and Other Recent Accomplishments
Slide Number 21
A Flexible Balance Sheet and Strong Cash Position
2020 Financial Outlook
Luna ndash Enabling the Future with Fiber
Appendix
Reconciliation of Net Income to Adjusted EBITDA
Reconciliation of Net Income to Adjusted EBITDA Full Year
New Segment Quarterly Results
(in thousands)
Three Months Ended
December 31 2018
A
March 31 2019
C
June 30 2019
September 30 2019
December 31 2019
March 31 2020
June 30 2020
Revenues
Lightwave
$ 11345
$ 10221
$ 12523
$ 13120
$ 13988
$ 11554
12933
Luna Labs
5548
6641
5291
5301
5492
5587
5642
Total revenues
16893
16862
17814
18421
19480
17141
18576
Cost of revenues
Lightwave
4002
3836
5334
5471
5070
4885
5181
Luna Labs
4268
4816
3728
3665
4022
3892
3878
Total cost of revenues
8270
8652
9062
9136
9092
8777
9059
Gross Profit
8623
8210
8752
9285
10388
8364
9517
Operating expense
Selling general and administrative
6394
7165
6003
5754
6415
6377
6202
Research development and engineering
1894
1708
1735
2047
2255
1597
1505
Total operating expense
8288
8873
7738
7801
8670
7974
7707
Operating income
$ 335
$ (663)
$ 1014
$ 1484
$ 1718
$ 390
$ 1810
Historical - Hidden
A
Includes $751000 of costs associated with the acquisition of Micron Optics
B
Unaudited pro forma financials assumes the General Photonics business was acquired on January 1 2019
C
Includes $898000 of costs associated with the acquisition of General Photonics
Year Ended December 31
(unaudited)
2016
2017
2018
2019
Reconciliation of EBITDA and Adjusted EBITDA
Net (loss)income
$ (2370)
$ 14615
$ 11004
$ 5343
Less income from discontinued operations net of income taxes
300
15866
9766
- 0
Loss from discontinued operations net of income tax benefit of $464
- 0
- 0
- 0
- 0
Net income from continuing operations
(2670)
(1251)
1238
5343
Interest expense
319
217
124
16
Investment income
- 0
- 0
(549)
(394)
Income tax (benefit)expense
(135)
(1148)
48
(1654)
Depreciation and amortization
1466
1137
908
2503
EBITDA
(1020)
(1045)
1769
5814
Share-based compensation
860
715
628
1544
Non-Recurring Charges (1)
- 0
596
751
1390
Amortization of Inventory Step-up
- 0
- 0
- 0
725
Adjusted EBITDA
$ (160)
$ 266
$ 3148
$ 9473
1
Non-recurring charges include the following 2017) CEO separation costs and other share-based compensation 2018) Transaction-related expenses associated with the acquisition of Micron Optics Inc 2019) Transaction related expenses and inventory step-up amortization relate to General Photonics acquisition and CFO transition expenses
Luna Innovations Incorporated
Reconciliation of Non-GAAP Financial Measures
(in thousands)
Three Months Ended
Six Months Ended
June 30
June 30
2020
2019
2020
2019
(Unaudited)
(Unaudited)
Reconciliation of EBITDA and Adjusted EBITDA
Net income
$ 1369
$ - 0
$ 841
$ 253
$ - 0
$ 1967
Loss from discontinued operations net of income tax benefit of $464
- 0
- 0
- 0
1436
- 0
- 0
Gain on sale of asset
- 0
- 0
- 0
- 0
- 0
- 0
Net income from continuing operations
1369
- 0
841
1689
- 0
1967
Interest expense
1
- 0
- 0
1
- 0
13
Investment income
(4)
- 0
(77)
(64)
- 0
(268)
Income tax expense(benefit)
441
- 0
247
579
- 0
(1618)
Depreciation and amortization
684
- 0
653
1363
- 0
1166
EBITDA
2490
- 0
1664
3568
- 0
1260
Share-based compensation
465
- 0
378
967
- 0
721
Non-Recurring Charges (1)
- 0
- 0
44
- 0
- 0
942
CFO Recruiting and Severance
- 0
- 0
- 0
- 0
- 0
- 0
Amortization of Inventory Step-up
- 0
- 0
310
- 0
- 0
412
- 0
- 0
- 0
- 0
- 0
- 0
Adjusted EBITDA
$ 2955
$ - 0
$ 2396
$ 4535
$ - 0
$ 3335
EBITDA Margin Percent on Total Revenues
134
93
100
39
Adjusted EBITDA Margin Percent on Total Revenues
159
134
127
102
Reconciliation of Non-GAAP EPS
Diluted EPS
$ 004
$ 002
$ 001
$ 005
Loss from discontinued operations net of income taxes
Existing Technology amortization missed from 101518-63019
- 0
15560
Amortization catch up from 101518-63019 in July 2019 only
In-process RampD
200000
0
- 0
1650000
4091764
Micron Purchase Amortization Detail - 812019 and forward
Trade Name
150000
36
4167
Customer Relationships
100000
84
1190
Existing Technology
1200000
60
20000
Amortization going forward
In-process RampD
200000
0
- 0
1650000
2535714
General Pho Purchase Amortization Detail - 312019
Trade Name
400000
36
11111
22822
Customer Relationships
600000
180
3333
22834
Existing Technology
7200000
96
75000
22827
In-process RampD
- 0
0
- 0
8200000
8944444
General Pho Inventory Step-up Amortization - 312019
WIP amp Fin Goods
724760
7
103537
Ends 93019
PampL Summary - Luna Innovations
For the Three Months Ending March 31 2020
QTD
QTD
QTD
YTD
YTD
YTD
Actual
Budget
Variance
Actual
Budget
Variance
fav(un-fav)
fav(un-fav)
Revenues
Lightwave
12933344
13366455
(433536)
24487335
25564000
(1077090)
686
Luna Labs
5642348
6075202
(432854)
11229350
11675307
(445957)
314
Total Revenues
18575692
19441657
(866390)
35716685
37239307
(1523047)
Cost of Revenues
Product and Licensing
5181057
5789978
608921
10066386
11082697
1016311
282
TDD
3877888
4448571
570683
7769627
8526736
757109
218
Total Cost of Revenues
9058945
10238549
570683
17836013
19609433
1773420
499
Gross Margin
Product and Licensing - $
7752287
7576477
175810
14420949
14481303
(60354)
Product and Licensing -
60
57
3
59
57
2
TDD - $
1764460
1626631
137829
3459723
3148571
311152
TDD -
31
27
4
31
27
4
Total Gross Margin
9516747
9203108
313639
17880672
17629874
250798
Gross Margin
51
47
4
50
47
3
501
Operating Expenses
Selling General amp Admin
6202338
8155800
1953888
12578977
14477853
1899301
Research Devel amp Engineering
1504800
647122
(857678)
3101865
2798808
(303057)
Total Operating Expenses
7707138
8802922
1096209
15680842
17276661
1595819
439
Operating Income (Loss)
1809609
400186
1409423
2199830
353213
1846617
62
Other Expense (Income)
Interest
930
985
55
1145
2195
1050
00
Investment Income
(4435)
(75000)
(70565)
(63790)
(150000)
(86210)
-02
Tax Expense
440626
118551
(498831)
579203
125253
(630706)
16
Tax Benefit from release of VA
-
-
-
-
-
-
00
Gainloss on foreigh exch
-
-
-
-
-
-
00
Other
3649
-
(3649)
(5236)
-
5236
-00
440770
44536
(396234)
511322
(22552)
(533874)
14
Income from continuing operations
1368839
355650
1805658
1688508
375765
2380491
Income from Disc Ops
Operating Income from Disc Ops
-
-
- 0
-
-
- 0
Gainloss of Asset Sale
-
-
- 0
(1435903)
-
(1435903)
Total Income from Disc Ops
- 0
- 0
- 0
(1435903)
- 0
(1435903)
Net Income (Loss)
1368839
355650
1013189
252605
375765
(123160)
07
Dividend on Preferred
- 0
- 0
- 0
- 0
- 0
- 0
Net Income (Loss) available to Common Shareholders
1368839
355650
1013189
252605
375765
(123160)
07
Depreciation
244214
491046
From Cash Flow
Amortization
439787
872410
From Cash Flow
Stock Compensation
465109
966932
From Cash Flow
Acquisition Costs
- 0
- 0
Amortization of Inventory Step-up
- 0
- 0
CFO Recruiting amp Severance
- 0
- 0
Treasury Stock Activity
63020
Stock Buyback - Held with Northland
Trade date
Settlement Date
of Shares
Avg Price
Commission
Trade date Total $
Number of Days
Weighted Avg
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
= Trades Not Settled
$000
$000
$000
$000
YTD Avg
0
0
Trade date
Settlement Date
of Shares
Avg Price
Commission
Trade date Total $
Number of Days
Weighted Avg
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
QTD Avg
0
0
0
0
2016 Amounts under program
205500
$24880840
$25086340
2017 Amounts under program
433179
$75649353
$76082532
2018 Amounts under program
132450
$30604099
$30736549
2019 Amounts under program
333953
$198663889
$199999701
Total
110508200
329798181
331905122
For Q Disclosure
Management Buyback - Held with AST
Date
Shares
YTD days os
YTD weighted avg
QTD days os
QTD Weighted Avg
Month
Quarter
Year
52720
Garrett James
6500
35
1250
35
2500
Jan
31
- 0
- 0
52720
Graeff Scott
17450
35
3356
35
6712
Feb
29
- 0
- 0
52720
Soller Brian
9000
35
1731
35
3462
Mar
31
91
91
44013
- 0
91
- 0
Apr
30
- 0
- 0
44013
- 0
91
- 0
May
31
- 0
- 0
44013
- 0
91
- 0
Jun
30
91
182
44013
- 0
91
- 0
Jul
31
- 0
- 0
44013
- 0
91
- 0
Aug
31
- 0
- 0
44013
- 0
91
- 0
Sept
30
92
274
- 0
- 0
Oct
31
- 0
- 0
- 0
- 0
Nov
30
- 0
- 0
- 0
- 0
Dec
31
92
366
32950
6337
12673
BOD buyback
YTD
$000
$000
44013
- 0
Qtr
$000
$000
44013
- 0
Luna
Date
CloseLast
1220
738
Average Close Price
1320
718
Year-To-Date
$ 696
1620
73
Quarter-To-Date
$ 652
1720
735
1820
756
1920
777
11020
787
11320
803
11420
804
11520
832
11620
85
11720
845
12120
827
12220
833
12320
849
12420
844
12720
828
12820
856
12920
85
13020
846
13120
819
2320
825
2420
821
2520
82
2620
819
2720
837
21020
85
21120
858
21220
904
21320
895
21420
897
21820
891
21920
891
22020
907
22120
923
22420
861
22520
745
22620
759
22720
707
22820
67
3220
713
3320
693
3420
719
3520
689
3620
75
3920
672
31020
66
31120
599
31220
521
31320
522
31620
491
31720
553
31820
473
31920
487
32020
48
32320
509
32420
543
32520
582
32620
617
32720
583
33020
623
33120
615
4120
585
4220
583
4320
572
4620
607
4720
605
4820
631
4920
665
41320
656
41420
683
41520
711
41620
734
41720
727
42020
73
42120
672
42220
683
42320
691
42420
715
42720
721
42820
74
42920
777
43020
763
5120
724
5420
751
5520
762
5620
76
5720
749
5820
782
51120
704
51220
705
51320
62
51420
578
51520
537
51820
591
51920
625
52020
61
52120
6
52220
609
52620
615
52720
62
52820
609
52920
61
6120
629
6220
628
6320
653
6420
649
6520
663
6820
667
6920
635
61020
643
61120
583
61220
606
61520
625
61620
631
61720
615
61820
599
61920
601
62220
616
62320
624
62420
615
62520
615
62620
571
62920
585
63020
584
Qtr
1
2
3
4
Options
Options
Aggregate Strike Price
Intrinsic Value
Outstanding
Exercisable
Outstanding
Exercisable
Outstanding
Exercisable
Luna
2418245
1309606
$6482283
$2709686
7767068
4952824
2418245
1309606
6482283
2709686
7767068
4952824
Warrants Aaron Chase Aaron ChaseCarilion exercised all warrants in Q2 and Q3 2018
0
0
0
0
2418245
1309606
6482283
2709686
Average Strike Price
$ 268
$ 207
Pull Cancelled for whole year
Cancels
Q1
35659 Aaron Chase Aaron Chase22999 of canceled shares didnrsquot show up until Q2-20 report
Aaron Chase Aaron ChaseCarilion exercised all warrants in Q2 and Q3 2018
$ 364
12990180
Outstanding 12312019
3160397
Q2
13124
$ 211
2769912
Q3
- 0
ERRORDIV0
- 0
Grants
20000
Q4
- 0
ERRORDIV0
- 0
Exercised
(662965)
48783
$ 323
15760092
Canceled
(48783)
Corrected Termed EEs from 2019
(50404)
These were corrected in June 2020
2418245
Remaining life
Options
Avg Life
- 0
Outstanding
Luna
2418245
644
Exercisable
1309606
474
Remaining service
Luna
2418245
See awards outstanding by grant price range report and Disclosure report for information on this tab
Luna Innovations
Additional Notes
EPS Calculations
During Jan-2019 and 2020 Management was awarded Performance Based Grants and Time Based Grants
63020
The Performance Based Grants vest after 3 years and are issued only if the performance is achieved
The Time Based Grants vest each year for 3 years Grants are issued once vested each year
Yearly BOD Grants
Basic EPS
DSU deferred stock units vest in a year but do not become issued until the Director leaves the Board This started in 2018
Net Income (loss) Per Share from Continuing Operations
YTD
Diluted
QTD
Diluted
DSU awards vest in May 2021 and will be added to the middle section of the EPS in May 2021
Net Income from Continuing Operations
1688508
1368839
Rich Roedel
8877
704
62500
Common Shares Outstanding
30484797
30589249
Barry Phelps
5326
704
37500
$ 006
$ 005
$ 004
$ 004
Leigh Anderson
5326
704
37500
Mary Beth Vitale
5326
704
37500
Net income (loss) Per Share attributable to common shareholders
RSU restricted stock units vest and are issued in a year and will be added to the bottom of the EPS in May 2021
Net Income (Loss) available to Shareholders
252605
1368839
Don Pastor
5326
704
37500
Common Shares Outstanding
30484797
30589249
Gary Spiegel
5326
704
37500
$ 001
$ 001
$ 004
$ 004
Net income (loss) Per Share from Discontinued Operations
Net Income from Discontinued Operations
(1435903)
- 0
Common Shares Outstanding
30484797
30589249
$ (005)
$ (004)
$ - 0
$ - 0
Diluted EPS
Net Income(Loss) available to SHs
252605
1368839
Common Shares Outstanding
30484797
30589249
Common Stock Equivalent
2010153
1876873
$ 001
- 0 Grant Thornton LLP Grant Thornton LLPAs earnings from continuing operations are negative (loss) basic and diluted EPS equal one another
$ 004 Grant Thornton LLP Grant Thornton LLPAs earnings from continuing operations are negative (loss) basic and diluted EPS equal one another
- 0 Grant Thornton LLP Grant Thornton LLPAs earnings from continuing operations are negative (loss) basic and diluted EPS equal one another
Non-GAAP Diluted EPS
Net income (loss) Per Share attributable to common shareholders
Net Income (Loss) available to Shareholders
252605
1368839
Loss from discontinued operations
1435903
- 0
Share-based compensation
966932
465109
Amortization of acquired intangibles
344405
688810
Acquisition related costs
- 0
- 0
Amortization of Inventory Step-up
- 0
- 0
Common Shares Outstanding
30484797
30589249
Common Stock Equivalent
2010153
1876873
$ 009
$ 008
YTD
QTD
Total issued shares
32470276
Average Close Price
$ 696
$ 652
Total treasury
1672741
Shares Outstanding
30797535
Net change in denominator
1404924 Kelly Bewick Aaron Chasesee Dilution (stock option) dilutive tab
1264984
BOD fees paid in DSUs Aaron Chase Aaron ChaseFrom Equity Award Transactions Report
Month
Quarter
Year
Balance at 112019 - DSU outstanding
591457
591457
Jan
31
Issued during Q1 2020
7114
7114
Feb
29
Issued during Q2 2020
3947
7894
Mar
31
91
91
Annual grant DSU vested 5112020
10521 KBSResults KBSResultsEnter 2019 DSU annual grant when vest in 2020 (probably May) you do not need to enter annual RSU because it will be issued in AST
21042
Apr
30
Deferred Equity Issuance 6012020
(7809) KBSResults Aaron ChaseM Wise and J Williamson retired from the BoD in May 2020 Wise Deferred Comp will be issued every June 1 for 10 years Williamson Deferred Comp will be issued every June 1 for 5 years
Grant Thornton LLP Grant Thornton LLPAs earnings from continuing operations are negative (loss) basic and diluted EPS equal one another
Grant Thornton LLP Grant Thornton LLPAs earnings from continuing operations are negative (loss) basic and diluted EPS equal one another
(15619)
May
31
Issued during Q3 2020
- 0
- 0
Jun
30
91
182
Issued during Q4 2020
- 0
- 0
Jul
31
Aug
31
Sept
30
92
274
Oct
31
Totals (Antidilutive)
2010153
1876873
Nov
30
Dec
31
92
366
Shares Outstanding as of 112020
31788896
As Of Date
Transaction
Reason
Name
Shares Issued
Shares Retired
Running Total
01012020
Normal
Balance Roll Forward
- 0
- 0
31788896
01082020
Normal
Option Exercise
Williamson John
12000000
- 0
31908896
01082020
Normal
Retirement - Vested Restriced Stock
Exer Options
Williamson John
- 0
2000000
31888896
01102020
Normal
Option Exercise
Roedel Rich
6000000
- 0
31948896
01142020
Normal
2019 Time-Based RSU Vesting
Messick Dale
666700
- 0
31955563
01142020
Normal
2019 Time-Based RSU Vesting
Graeff Scott
3066700
- 0
31986230
01142020
Normal
2019 Time-Based RSU Vesting
Soller Brian
1066700
- 0
31996897
01142020
Normal
2019 Time-Based RSU Vesting
Garrett James
766700
- 0
32004564
01142020
Normal
2019 Time-Based RSU Retirement
Taxes
Graeff Scott
- 0
920000
31995364
01142020
Normal
2019 Time-Based RSU Retirement
Taxes
Soller Brian
- 0
320000
31992164
01142020
Normal
2019 Time-Based RSU Retirement
Taxes
Garrett James
- 0
230000
31989864
01142020
Normal
Option Exercise
Burris Kevin
100000
- 0
31990864
01292020
Normal
Option Exercise
Carr Dustin
3212300
- 0
32022987
01272020
Normal
Option Exercise
Chen James
334000
- 0
32026327
02192020
Normal
Option Exercise
McPherson Daniel
534800
- 0
32031675
03122020
Normal
Option Exercise
Haber Todd
2500000
- 0
32056675
03122020
Normal
Option Exercise
Graver Thomas
4558100
- 0
32102256
03122020
Normal
Option Exercise
Baez Michael
911200
- 0
32111368
03062020
Normal
Option Exercise
Farooqui Salvan
1500000
- 0
32126368
05122020
Normal
Option Exercise
Baez Michael
950000
- 0
32135868
05142020
Normal
Option Exercise
Haber Todd
4300000
- 0
32178868
05142020
Normal
Option Exercise
Graver Thomas
4746100
- 0
32226329
05112020
Normal
Annual Equity Grant Vesting-BoD
Pastor Don
580000
- 0
32232129
05112020
Normal
Annual Equity Grant Vesting-BoD
Williamson John
580000
- 0
32237929
06012020
Normal
Deferred Stock Issuance-BoD
Wise Mike
980900
- 0
32247738
06012020
Normal
Deferred Stock Issuance-BoD
Williamson John
3756800
32285306
06112020
Normal
Option Exercise
Wise Mike
24000000
32525306
06112020
Normal
Retirement - Vested Stock
Exer Options
Wise Mike
6153000
32463776
06082020
Normal
Option Exercise
Pruzan Michael
400000
32467776
06292020
Normal
Option Exercise
Farooqui Salvan
250000
32470276
Date Issued
Balance Outstanding
Number of Days
Weighted Avg
Treasury Shares Weighted Average
Year-to-Date
YTD
QTD
1120
31788896
182
31788896
Graeff July 2
115000
115000
1820
31908896
175
115385
Q2 2015
29925
29925
1820
31888896
175
(19231)
2014
22725
22725
11020
31948896
173
57033
2016 Mgmt buyback
73675
73675
11420
31955563
169
6191
2016 repurchase program
205500
205500
11420
31986230
169
28477
2017 Mgmt buyback
90900
90900
11420
31996897
169
9905
2017 BOD buyback
100000
100000
11420
32004564
169
7119
2017 repurchase program
433179
433179
11420
31995364
169
(8543)
2018 repurchase program
132450
132450
11420
31992164
169
(2971)
2018 Mgmt buyback
49751
49751
11420
31989864
169
(2136)
2019 Mgmt buyback
52733
52733
11420
31990864
169
929
2019 repurchase program
333953
333953
12920
32022987
154
27181
2020 Mgmt buyback
6337
12673
12720
32026327
156
2863
21920
32031675
133
3908
164612764
165246418
31220
32056675
111
15247
31220
32102256
111
27799
31220
32111368
111
5557
567659
3620
32126368
117
9643
Treasury on AST
567664
51220
32135868
50
2610
Diff
(5)
51420
32178868
48
11341
51420
32226329
48
12517
51120
32232129
51
1625
51120
32237929
51
1625
6120
32247738
30
1617
6120
32285306
30
6193
61120
32525306
20
26374
61120
32463776
20
(6762)
6820
32467776
23
505
62920
32470276
2
27
YTD Average Shares Outstanding
32130925
Quarter-to Date
112020
31788896
91
31788896
1820
31908896
91
120000
1820
31888896
91
(20000)
11020
31948896
91
60000
11420
31955563
91
6667
11420
31986230
91
30667
11420
31996897
91
10667
11420
32004564
91
7667
11420
31995364
91
(9200)
11420
31992164
91
(3200)
11420
31989864
91
(2300)
11420
31990864
91
1000
12920
32022987
91
32123
12720
32026327
91
3340
21920
32031675
91
5348
31220
32056675
91
25000
31220
32102256
91
45581
31220
32111368
91
9112
3620
32126368
91
15000
51220
32135868
50
5220
51420
32178868
48
22681
51420
32226329
48
25034
51120
32232129
51
3251
51120
32237929
51
3251
6120
32247738
30
3234
6120
32285306
30
12385
61120
32525306
20
52747
61120
32463776
20
(13523)
6820
32467776
23
1011
62920
32470276
2
55
QTD Average Shares Outstanding
32241713
C1
TA to the Summary tab
C2
TA to the Avg Stock Price tab
C3
TA to the Options Outstanding YTD tab
C4
TA to the Equity Rollforward WP
C5
TA to the AST Report in the Equity Rollfoward WP
C6
TA to the Options Outstanding QTD tab
C7
Custom 7
C8
See comment box
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
3
Luna ndash Enabling the Future with Fiber
Proprietary measurement technology offering unprecedented combination of resolution accuracy and speed
Customers in attractive markets Military and Defense Communications Infrastructure Energy and Automotive
Positioned to take advantage of trends such as vehicle light-weighting and increasing demands on data centers and broadband capacity
Adequately capitalized to fund growth
Long-tenured experienced executive team board
Corporate culture of innovation and integrity
Overview
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
4
Luna is a global company
HistoryIncorporated 1990
IPO 2006
Reporting SegmentsLightwave Luna Labs
RevenueFY19 $705M
FY20 Guidance $81M-83M
AEBITDAFY19 $95M
FY20 Guidance$10M-12M
270+ Employees
Overview
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
5
Luna has a clear vision and established history
LUNArsquos Transformation
Vision Enabling the Future with Fiber
Incorporated Merger with API
Sale of non-core business to OSI and
acquisition of Micron Optics
IPO
Sale of non-core business
to MACOMAcquisition of General
Photonics
1990
2006
2015
2017
2018
2019
2020
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
6
Compelling business model with strong growth potential
temperature acceleration displacement and pressure
Focus on structural health and security
bull Buildings tunnels bridges
bull Perimeter security
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
13
Sensing Material thickness
Product Terahertz technology
Layer thickness measurements for process control inspection and non-destructive testing Advanced technology measures thickness of
opaque materials Unique measurement of composites and
coatings with easy to use hand-held tools Focus on manufacturing environments and
field test for military-aerospacebull Plastic and industrial packagingbull Used extensively on F35 and F22 for
anti-radar surface treatment
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
14
Comms Test
Increased data and video consumption Video forecasted to represent 82 of all
IP traffic in 2022 34 CAGR
Growth in mobile and 4G5G Mobile data traffic growing at 46 CAGR
Cloud services and adoption of Internet of Things Data center traffic growing at 26 CAGR 285 billion IoT networked devices by
2022
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
15
Comms Test Components
Product Optical Vector Analyzer (OVA)
Ensuring speed at the chip level
Unprecedented visibility inside devices ˗you canrsquot fix what you canrsquot see
Reduces time and cost associated with the development of high-speed optical components
Focus on enabling the carriers to move to 5G networks
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
16
Comms Test Short-haul network
Product Optical Backscatter Reflectometer (OBR)
Bandwidth demands continue to drive double-digit connectivity growth
Delivers unprecedented visibility into short-haul networks
Emerging market for on-board aircraft communications
Ensuring network ldquoup timerdquo on Lockheed Martinrsquos F-35
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
17
Luna Labs
Work with universities and government research labs to explore technological feasibility with a goal toward proof of concept
Collaborate with prime contractors government offices and federally-funded RampD centers
Work with contract manufacturers suppliers licensees and distributors to develop everything from small-scale prototypes up to and including market-ready products
Based in Charlottesville VA
2Q FY20 Results
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
19
Second-quarter 2020 Key Financial Results
Solid financial performance
$06M improvement in Adjusted EBITDA1 year-over-year
Total revenues of $186M up 4 year-over-year
Lightwave revenue of $129M up 3 year-over-year
Luna Labs revenue of $56M up 7 year-over-year
Operating income improved to $18M or 10 of total revenues in Q2 2020 from $10M or 6 of total revenues in Q2 2019 due to increased revenue and gross profit as well as improved operating expense leverage
Net income of $14M or $004 per fully diluted share for the three months ended June 30 2020 compared to $08M or $002 per fully diluted share for the three months ended June 30 2019
Adjusted EBITDA1 increased to $30M for the three months ended June 30 2020 compared to $24M for the three months ended June 30 2019
Reaffirmed 2020 outlook tighten range to $81 to $83M in total revenues
1Adj EBITDA is a non-GAAP measure Reconciliation of comparable GAAP measures to non-GAAP measures are included in the appendix to this presentation
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
20
Second-quarter 2020 and Other Recent Accomplishments
Reported solid second-quarter 2020 financial results in challenging COVID environment
Held 6 customer-facing technology educational webinars ~1000 live attendees and more than 1200 leads
Hosted worldwide virtual sales meeting with 47 attendees
Participated in virtual trade shows
Continued to monitor employee feedback with a focus on safety and well-being
Successful implementation of Employee Stock Purchase Plan with approximately 60 participation
Held successful Virtual Annual Shareholder Meeting in May
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
21
($20)
$03
$95
FY16 FY17 FY18 FY19 FY20
Adjusted EBITDA1 2
(millions)
$31
$296 $331
$429
$705
FY16 FY17 FY18 FY19 FY20
Revenue1
(millions)
$357
Strong Financial Results
1 Based on managementrsquos estimates of the impact from the divestiture of Optoelectronics Includes the acquisitions of Micron Optics and General Photonics2Adj EBITDA is a non-GAAP measure Reconciliation of comparable GAAP measures to non-GAAP measures are included in the appendix to this presentation
FY20 Guidance$810 - $830
FY20 Guidance $100 to $120
$45
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
22
A Flexible Balance Sheet and Strong Cash Position
Strong balance sheet on June 30 2020
$912M in total assets
bull $265M in cash and cash equivalents
bull $448M in working capital
Access to $10M revolving credit facility if needed
Continued focus on working capital and reinvestment in business in order to generate long-term sustainable growth
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
23
2020 Financial Outlook
Maintaining FY2020 outlook tightening our range
Total revenues of $81M to $83M
Adjusted EBITDA1 of $10M to $12M
1 Adj EBITDA is a non-GAAP measure Reconciliation of comparable GAAP measures to non-GAAP measures are included in the appendix to this presentation The outlook above does not include any future acquisitions divestitures or unanticipated events
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
24
Luna ndash Enabling the Future with Fiber
Proprietary measurement technology offering unprecedented combination of resolution accuracy and speed
Customers in attractive markets Military and Defense Communications Infrastructure Energy and Automotive
Positioned to take advantage of trends such as vehicle light-weighting and increasing demands on data centers and broadband capacity
Adequately capitalized to fund growth
Long-tenured experienced executive team board
Corporate culture of innovation and integrity
Overview
Appendix
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
26
Reconciliation of Net Income to Adjusted EBITDA
(1) Non-recurring charges consist of transaction-related expenses related to the acquisition of General Photonics
2020 2019 2020 2019
Reconciliation of EBITDA and Adjusted EBITDANet income 1369$ 841$ 253$ 1967$ Loss from discontinued operations net of income tax benefit of $464 - - 1436 -
Net income from continuing operations 1369 841 1689 1967 Interest expense 1 - 1 13 Investment income (4) (77) (64) (268) Income tax expense(benefit) 441 247 579 (1618) Depreciation and amortization 684 653 1363 1166
Reconciliation of Net Income to Adjusted EBITDA Full Year
(1) Non-recurring charges include the following 2017) CEO separation costs and other share-based compensation 2018) Transaction-related expenses associated with the acquisition of Micron Optics Inc 2019) Transaction related expenses and inventory step-up amortization relate to General Photonics acquisition and CFO transition expenses
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
28
New Segment Quarterly Results (in thousands)
March 31 2019 June 30 2019 Sep 30 2019 A Dec 31 2019 March 31 2020 June 30 2020
Total revenues 14833 17814 18389 19480 17141 18576
Cost of revenuesLightwave 4280 5334 5449 5070 4885 5181 Luna Labs 3785 3728 3665 4022 3892 3878
Total cost of revenues 8065 9062 9114 9092 8777 9059
Gross Profit 6768 8752 9275 10388 8364 9517
Operating expenseSelling general and administrative 6207 6003 5745 6416 6377 6202 Research development and engineering 1458 1735 2048 2255 1597 1505
Total operating expense 7665 7738 7793 8671 7974 7707
Operating income (897)$ 1014$ 1482$ 1717$ 390$ 1810$
A The Company revised its results for the three months ended September 30 2019 The Company has concluded these adjustments are not material individually or in the aggregate
Three Months Ended
Scott A Graeff President and CEO
Safe Harbor
Luna ndash Enabling the Future with Fiber
Luna is a global company
Luna has a clear vision and established history
Compelling business model with strong growth potential
Lightwave 2019 revenue1 snapshot
Luna Overview
Where Does Luna Play
Sensing
Sensing Short-range high-resolution
Sensing long-range high-speed
Sensing Material thickness
Comms Test
Comms Test Components
Comms Test Short-haul network
Luna Labs
2Q FY20 Results
Second-quarter 2020 Key Financial Results
Second-quarter 2020 and Other Recent Accomplishments
Slide Number 21
A Flexible Balance Sheet and Strong Cash Position
2020 Financial Outlook
Luna ndash Enabling the Future with Fiber
Appendix
Reconciliation of Net Income to Adjusted EBITDA
Reconciliation of Net Income to Adjusted EBITDA Full Year
New Segment Quarterly Results
(in thousands)
Three Months Ended
December 31 2018
A
March 31 2019
C
June 30 2019
September 30 2019
December 31 2019
March 31 2020
June 30 2020
Revenues
Lightwave
$ 11345
$ 10221
$ 12523
$ 13120
$ 13988
$ 11554
12933
Luna Labs
5548
6641
5291
5301
5492
5587
5642
Total revenues
16893
16862
17814
18421
19480
17141
18576
Cost of revenues
Lightwave
4002
3836
5334
5471
5070
4885
5181
Luna Labs
4268
4816
3728
3665
4022
3892
3878
Total cost of revenues
8270
8652
9062
9136
9092
8777
9059
Gross Profit
8623
8210
8752
9285
10388
8364
9517
Operating expense
Selling general and administrative
6394
7165
6003
5754
6415
6377
6202
Research development and engineering
1894
1708
1735
2047
2255
1597
1505
Total operating expense
8288
8873
7738
7801
8670
7974
7707
Operating income
$ 335
$ (663)
$ 1014
$ 1484
$ 1718
$ 390
$ 1810
Historical - Hidden
A
Includes $751000 of costs associated with the acquisition of Micron Optics
B
Unaudited pro forma financials assumes the General Photonics business was acquired on January 1 2019
C
Includes $898000 of costs associated with the acquisition of General Photonics
Year Ended December 31
(unaudited)
2016
2017
2018
2019
Reconciliation of EBITDA and Adjusted EBITDA
Net (loss)income
$ (2370)
$ 14615
$ 11004
$ 5343
Less income from discontinued operations net of income taxes
300
15866
9766
- 0
Loss from discontinued operations net of income tax benefit of $464
- 0
- 0
- 0
- 0
Net income from continuing operations
(2670)
(1251)
1238
5343
Interest expense
319
217
124
16
Investment income
- 0
- 0
(549)
(394)
Income tax (benefit)expense
(135)
(1148)
48
(1654)
Depreciation and amortization
1466
1137
908
2503
EBITDA
(1020)
(1045)
1769
5814
Share-based compensation
860
715
628
1544
Non-Recurring Charges (1)
- 0
596
751
1390
Amortization of Inventory Step-up
- 0
- 0
- 0
725
Adjusted EBITDA
$ (160)
$ 266
$ 3148
$ 9473
1
Non-recurring charges include the following 2017) CEO separation costs and other share-based compensation 2018) Transaction-related expenses associated with the acquisition of Micron Optics Inc 2019) Transaction related expenses and inventory step-up amortization relate to General Photonics acquisition and CFO transition expenses
Luna Innovations Incorporated
Reconciliation of Non-GAAP Financial Measures
(in thousands)
Three Months Ended
Six Months Ended
June 30
June 30
2020
2019
2020
2019
(Unaudited)
(Unaudited)
Reconciliation of EBITDA and Adjusted EBITDA
Net income
$ 1369
$ - 0
$ 841
$ 253
$ - 0
$ 1967
Loss from discontinued operations net of income tax benefit of $464
- 0
- 0
- 0
1436
- 0
- 0
Gain on sale of asset
- 0
- 0
- 0
- 0
- 0
- 0
Net income from continuing operations
1369
- 0
841
1689
- 0
1967
Interest expense
1
- 0
- 0
1
- 0
13
Investment income
(4)
- 0
(77)
(64)
- 0
(268)
Income tax expense(benefit)
441
- 0
247
579
- 0
(1618)
Depreciation and amortization
684
- 0
653
1363
- 0
1166
EBITDA
2490
- 0
1664
3568
- 0
1260
Share-based compensation
465
- 0
378
967
- 0
721
Non-Recurring Charges (1)
- 0
- 0
44
- 0
- 0
942
CFO Recruiting and Severance
- 0
- 0
- 0
- 0
- 0
- 0
Amortization of Inventory Step-up
- 0
- 0
310
- 0
- 0
412
- 0
- 0
- 0
- 0
- 0
- 0
Adjusted EBITDA
$ 2955
$ - 0
$ 2396
$ 4535
$ - 0
$ 3335
EBITDA Margin Percent on Total Revenues
134
93
100
39
Adjusted EBITDA Margin Percent on Total Revenues
159
134
127
102
Reconciliation of Non-GAAP EPS
Diluted EPS
$ 004
$ 002
$ 001
$ 005
Loss from discontinued operations net of income taxes
Existing Technology amortization missed from 101518-63019
- 0
15560
Amortization catch up from 101518-63019 in July 2019 only
In-process RampD
200000
0
- 0
1650000
4091764
Micron Purchase Amortization Detail - 812019 and forward
Trade Name
150000
36
4167
Customer Relationships
100000
84
1190
Existing Technology
1200000
60
20000
Amortization going forward
In-process RampD
200000
0
- 0
1650000
2535714
General Pho Purchase Amortization Detail - 312019
Trade Name
400000
36
11111
22822
Customer Relationships
600000
180
3333
22834
Existing Technology
7200000
96
75000
22827
In-process RampD
- 0
0
- 0
8200000
8944444
General Pho Inventory Step-up Amortization - 312019
WIP amp Fin Goods
724760
7
103537
Ends 93019
PampL Summary - Luna Innovations
For the Three Months Ending March 31 2020
QTD
QTD
QTD
YTD
YTD
YTD
Actual
Budget
Variance
Actual
Budget
Variance
fav(un-fav)
fav(un-fav)
Revenues
Lightwave
12933344
13366455
(433536)
24487335
25564000
(1077090)
686
Luna Labs
5642348
6075202
(432854)
11229350
11675307
(445957)
314
Total Revenues
18575692
19441657
(866390)
35716685
37239307
(1523047)
Cost of Revenues
Product and Licensing
5181057
5789978
608921
10066386
11082697
1016311
282
TDD
3877888
4448571
570683
7769627
8526736
757109
218
Total Cost of Revenues
9058945
10238549
570683
17836013
19609433
1773420
499
Gross Margin
Product and Licensing - $
7752287
7576477
175810
14420949
14481303
(60354)
Product and Licensing -
60
57
3
59
57
2
TDD - $
1764460
1626631
137829
3459723
3148571
311152
TDD -
31
27
4
31
27
4
Total Gross Margin
9516747
9203108
313639
17880672
17629874
250798
Gross Margin
51
47
4
50
47
3
501
Operating Expenses
Selling General amp Admin
6202338
8155800
1953888
12578977
14477853
1899301
Research Devel amp Engineering
1504800
647122
(857678)
3101865
2798808
(303057)
Total Operating Expenses
7707138
8802922
1096209
15680842
17276661
1595819
439
Operating Income (Loss)
1809609
400186
1409423
2199830
353213
1846617
62
Other Expense (Income)
Interest
930
985
55
1145
2195
1050
00
Investment Income
(4435)
(75000)
(70565)
(63790)
(150000)
(86210)
-02
Tax Expense
440626
118551
(498831)
579203
125253
(630706)
16
Tax Benefit from release of VA
-
-
-
-
-
-
00
Gainloss on foreigh exch
-
-
-
-
-
-
00
Other
3649
-
(3649)
(5236)
-
5236
-00
440770
44536
(396234)
511322
(22552)
(533874)
14
Income from continuing operations
1368839
355650
1805658
1688508
375765
2380491
Income from Disc Ops
Operating Income from Disc Ops
-
-
- 0
-
-
- 0
Gainloss of Asset Sale
-
-
- 0
(1435903)
-
(1435903)
Total Income from Disc Ops
- 0
- 0
- 0
(1435903)
- 0
(1435903)
Net Income (Loss)
1368839
355650
1013189
252605
375765
(123160)
07
Dividend on Preferred
- 0
- 0
- 0
- 0
- 0
- 0
Net Income (Loss) available to Common Shareholders
1368839
355650
1013189
252605
375765
(123160)
07
Depreciation
244214
491046
From Cash Flow
Amortization
439787
872410
From Cash Flow
Stock Compensation
465109
966932
From Cash Flow
Acquisition Costs
- 0
- 0
Amortization of Inventory Step-up
- 0
- 0
CFO Recruiting amp Severance
- 0
- 0
Treasury Stock Activity
63020
Stock Buyback - Held with Northland
Trade date
Settlement Date
of Shares
Avg Price
Commission
Trade date Total $
Number of Days
Weighted Avg
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
= Trades Not Settled
$000
$000
$000
$000
YTD Avg
0
0
Trade date
Settlement Date
of Shares
Avg Price
Commission
Trade date Total $
Number of Days
Weighted Avg
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
QTD Avg
0
0
0
0
2016 Amounts under program
205500
$24880840
$25086340
2017 Amounts under program
433179
$75649353
$76082532
2018 Amounts under program
132450
$30604099
$30736549
2019 Amounts under program
333953
$198663889
$199999701
Total
110508200
329798181
331905122
For Q Disclosure
Management Buyback - Held with AST
Date
Shares
YTD days os
YTD weighted avg
QTD days os
QTD Weighted Avg
Month
Quarter
Year
52720
Garrett James
6500
35
1250
35
2500
Jan
31
- 0
- 0
52720
Graeff Scott
17450
35
3356
35
6712
Feb
29
- 0
- 0
52720
Soller Brian
9000
35
1731
35
3462
Mar
31
91
91
44013
- 0
91
- 0
Apr
30
- 0
- 0
44013
- 0
91
- 0
May
31
- 0
- 0
44013
- 0
91
- 0
Jun
30
91
182
44013
- 0
91
- 0
Jul
31
- 0
- 0
44013
- 0
91
- 0
Aug
31
- 0
- 0
44013
- 0
91
- 0
Sept
30
92
274
- 0
- 0
Oct
31
- 0
- 0
- 0
- 0
Nov
30
- 0
- 0
- 0
- 0
Dec
31
92
366
32950
6337
12673
BOD buyback
YTD
$000
$000
44013
- 0
Qtr
$000
$000
44013
- 0
Luna
Date
CloseLast
1220
738
Average Close Price
1320
718
Year-To-Date
$ 696
1620
73
Quarter-To-Date
$ 652
1720
735
1820
756
1920
777
11020
787
11320
803
11420
804
11520
832
11620
85
11720
845
12120
827
12220
833
12320
849
12420
844
12720
828
12820
856
12920
85
13020
846
13120
819
2320
825
2420
821
2520
82
2620
819
2720
837
21020
85
21120
858
21220
904
21320
895
21420
897
21820
891
21920
891
22020
907
22120
923
22420
861
22520
745
22620
759
22720
707
22820
67
3220
713
3320
693
3420
719
3520
689
3620
75
3920
672
31020
66
31120
599
31220
521
31320
522
31620
491
31720
553
31820
473
31920
487
32020
48
32320
509
32420
543
32520
582
32620
617
32720
583
33020
623
33120
615
4120
585
4220
583
4320
572
4620
607
4720
605
4820
631
4920
665
41320
656
41420
683
41520
711
41620
734
41720
727
42020
73
42120
672
42220
683
42320
691
42420
715
42720
721
42820
74
42920
777
43020
763
5120
724
5420
751
5520
762
5620
76
5720
749
5820
782
51120
704
51220
705
51320
62
51420
578
51520
537
51820
591
51920
625
52020
61
52120
6
52220
609
52620
615
52720
62
52820
609
52920
61
6120
629
6220
628
6320
653
6420
649
6520
663
6820
667
6920
635
61020
643
61120
583
61220
606
61520
625
61620
631
61720
615
61820
599
61920
601
62220
616
62320
624
62420
615
62520
615
62620
571
62920
585
63020
584
Qtr
1
2
3
4
Options
Options
Aggregate Strike Price
Intrinsic Value
Outstanding
Exercisable
Outstanding
Exercisable
Outstanding
Exercisable
Luna
2418245
1309606
$6482283
$2709686
7767068
4952824
2418245
1309606
6482283
2709686
7767068
4952824
Warrants Aaron Chase Aaron ChaseCarilion exercised all warrants in Q2 and Q3 2018
0
0
0
0
2418245
1309606
6482283
2709686
Average Strike Price
$ 268
$ 207
Pull Cancelled for whole year
Cancels
Q1
35659 Aaron Chase Aaron Chase22999 of canceled shares didnrsquot show up until Q2-20 report
Aaron Chase Aaron ChaseCarilion exercised all warrants in Q2 and Q3 2018
$ 364
12990180
Outstanding 12312019
3160397
Q2
13124
$ 211
2769912
Q3
- 0
ERRORDIV0
- 0
Grants
20000
Q4
- 0
ERRORDIV0
- 0
Exercised
(662965)
48783
$ 323
15760092
Canceled
(48783)
Corrected Termed EEs from 2019
(50404)
These were corrected in June 2020
2418245
Remaining life
Options
Avg Life
- 0
Outstanding
Luna
2418245
644
Exercisable
1309606
474
Remaining service
Luna
2418245
See awards outstanding by grant price range report and Disclosure report for information on this tab
Luna Innovations
Additional Notes
EPS Calculations
During Jan-2019 and 2020 Management was awarded Performance Based Grants and Time Based Grants
63020
The Performance Based Grants vest after 3 years and are issued only if the performance is achieved
The Time Based Grants vest each year for 3 years Grants are issued once vested each year
Yearly BOD Grants
Basic EPS
DSU deferred stock units vest in a year but do not become issued until the Director leaves the Board This started in 2018
Net Income (loss) Per Share from Continuing Operations
YTD
Diluted
QTD
Diluted
DSU awards vest in May 2021 and will be added to the middle section of the EPS in May 2021
Net Income from Continuing Operations
1688508
1368839
Rich Roedel
8877
704
62500
Common Shares Outstanding
30484797
30589249
Barry Phelps
5326
704
37500
$ 006
$ 005
$ 004
$ 004
Leigh Anderson
5326
704
37500
Mary Beth Vitale
5326
704
37500
Net income (loss) Per Share attributable to common shareholders
RSU restricted stock units vest and are issued in a year and will be added to the bottom of the EPS in May 2021
Net Income (Loss) available to Shareholders
252605
1368839
Don Pastor
5326
704
37500
Common Shares Outstanding
30484797
30589249
Gary Spiegel
5326
704
37500
$ 001
$ 001
$ 004
$ 004
Net income (loss) Per Share from Discontinued Operations
Net Income from Discontinued Operations
(1435903)
- 0
Common Shares Outstanding
30484797
30589249
$ (005)
$ (004)
$ - 0
$ - 0
Diluted EPS
Net Income(Loss) available to SHs
252605
1368839
Common Shares Outstanding
30484797
30589249
Common Stock Equivalent
2010153
1876873
$ 001
- 0 Grant Thornton LLP Grant Thornton LLPAs earnings from continuing operations are negative (loss) basic and diluted EPS equal one another
$ 004 Grant Thornton LLP Grant Thornton LLPAs earnings from continuing operations are negative (loss) basic and diluted EPS equal one another
- 0 Grant Thornton LLP Grant Thornton LLPAs earnings from continuing operations are negative (loss) basic and diluted EPS equal one another
Non-GAAP Diluted EPS
Net income (loss) Per Share attributable to common shareholders
Net Income (Loss) available to Shareholders
252605
1368839
Loss from discontinued operations
1435903
- 0
Share-based compensation
966932
465109
Amortization of acquired intangibles
344405
688810
Acquisition related costs
- 0
- 0
Amortization of Inventory Step-up
- 0
- 0
Common Shares Outstanding
30484797
30589249
Common Stock Equivalent
2010153
1876873
$ 009
$ 008
YTD
QTD
Total issued shares
32470276
Average Close Price
$ 696
$ 652
Total treasury
1672741
Shares Outstanding
30797535
Net change in denominator
1404924 Kelly Bewick Aaron Chasesee Dilution (stock option) dilutive tab
1264984
BOD fees paid in DSUs Aaron Chase Aaron ChaseFrom Equity Award Transactions Report
Month
Quarter
Year
Balance at 112019 - DSU outstanding
591457
591457
Jan
31
Issued during Q1 2020
7114
7114
Feb
29
Issued during Q2 2020
3947
7894
Mar
31
91
91
Annual grant DSU vested 5112020
10521 KBSResults KBSResultsEnter 2019 DSU annual grant when vest in 2020 (probably May) you do not need to enter annual RSU because it will be issued in AST
21042
Apr
30
Deferred Equity Issuance 6012020
(7809) KBSResults Aaron ChaseM Wise and J Williamson retired from the BoD in May 2020 Wise Deferred Comp will be issued every June 1 for 10 years Williamson Deferred Comp will be issued every June 1 for 5 years
Grant Thornton LLP Grant Thornton LLPAs earnings from continuing operations are negative (loss) basic and diluted EPS equal one another
Grant Thornton LLP Grant Thornton LLPAs earnings from continuing operations are negative (loss) basic and diluted EPS equal one another
(15619)
May
31
Issued during Q3 2020
- 0
- 0
Jun
30
91
182
Issued during Q4 2020
- 0
- 0
Jul
31
Aug
31
Sept
30
92
274
Oct
31
Totals (Antidilutive)
2010153
1876873
Nov
30
Dec
31
92
366
Shares Outstanding as of 112020
31788896
As Of Date
Transaction
Reason
Name
Shares Issued
Shares Retired
Running Total
01012020
Normal
Balance Roll Forward
- 0
- 0
31788896
01082020
Normal
Option Exercise
Williamson John
12000000
- 0
31908896
01082020
Normal
Retirement - Vested Restriced Stock
Exer Options
Williamson John
- 0
2000000
31888896
01102020
Normal
Option Exercise
Roedel Rich
6000000
- 0
31948896
01142020
Normal
2019 Time-Based RSU Vesting
Messick Dale
666700
- 0
31955563
01142020
Normal
2019 Time-Based RSU Vesting
Graeff Scott
3066700
- 0
31986230
01142020
Normal
2019 Time-Based RSU Vesting
Soller Brian
1066700
- 0
31996897
01142020
Normal
2019 Time-Based RSU Vesting
Garrett James
766700
- 0
32004564
01142020
Normal
2019 Time-Based RSU Retirement
Taxes
Graeff Scott
- 0
920000
31995364
01142020
Normal
2019 Time-Based RSU Retirement
Taxes
Soller Brian
- 0
320000
31992164
01142020
Normal
2019 Time-Based RSU Retirement
Taxes
Garrett James
- 0
230000
31989864
01142020
Normal
Option Exercise
Burris Kevin
100000
- 0
31990864
01292020
Normal
Option Exercise
Carr Dustin
3212300
- 0
32022987
01272020
Normal
Option Exercise
Chen James
334000
- 0
32026327
02192020
Normal
Option Exercise
McPherson Daniel
534800
- 0
32031675
03122020
Normal
Option Exercise
Haber Todd
2500000
- 0
32056675
03122020
Normal
Option Exercise
Graver Thomas
4558100
- 0
32102256
03122020
Normal
Option Exercise
Baez Michael
911200
- 0
32111368
03062020
Normal
Option Exercise
Farooqui Salvan
1500000
- 0
32126368
05122020
Normal
Option Exercise
Baez Michael
950000
- 0
32135868
05142020
Normal
Option Exercise
Haber Todd
4300000
- 0
32178868
05142020
Normal
Option Exercise
Graver Thomas
4746100
- 0
32226329
05112020
Normal
Annual Equity Grant Vesting-BoD
Pastor Don
580000
- 0
32232129
05112020
Normal
Annual Equity Grant Vesting-BoD
Williamson John
580000
- 0
32237929
06012020
Normal
Deferred Stock Issuance-BoD
Wise Mike
980900
- 0
32247738
06012020
Normal
Deferred Stock Issuance-BoD
Williamson John
3756800
32285306
06112020
Normal
Option Exercise
Wise Mike
24000000
32525306
06112020
Normal
Retirement - Vested Stock
Exer Options
Wise Mike
6153000
32463776
06082020
Normal
Option Exercise
Pruzan Michael
400000
32467776
06292020
Normal
Option Exercise
Farooqui Salvan
250000
32470276
Date Issued
Balance Outstanding
Number of Days
Weighted Avg
Treasury Shares Weighted Average
Year-to-Date
YTD
QTD
1120
31788896
182
31788896
Graeff July 2
115000
115000
1820
31908896
175
115385
Q2 2015
29925
29925
1820
31888896
175
(19231)
2014
22725
22725
11020
31948896
173
57033
2016 Mgmt buyback
73675
73675
11420
31955563
169
6191
2016 repurchase program
205500
205500
11420
31986230
169
28477
2017 Mgmt buyback
90900
90900
11420
31996897
169
9905
2017 BOD buyback
100000
100000
11420
32004564
169
7119
2017 repurchase program
433179
433179
11420
31995364
169
(8543)
2018 repurchase program
132450
132450
11420
31992164
169
(2971)
2018 Mgmt buyback
49751
49751
11420
31989864
169
(2136)
2019 Mgmt buyback
52733
52733
11420
31990864
169
929
2019 repurchase program
333953
333953
12920
32022987
154
27181
2020 Mgmt buyback
6337
12673
12720
32026327
156
2863
21920
32031675
133
3908
164612764
165246418
31220
32056675
111
15247
31220
32102256
111
27799
31220
32111368
111
5557
567659
3620
32126368
117
9643
Treasury on AST
567664
51220
32135868
50
2610
Diff
(5)
51420
32178868
48
11341
51420
32226329
48
12517
51120
32232129
51
1625
51120
32237929
51
1625
6120
32247738
30
1617
6120
32285306
30
6193
61120
32525306
20
26374
61120
32463776
20
(6762)
6820
32467776
23
505
62920
32470276
2
27
YTD Average Shares Outstanding
32130925
Quarter-to Date
112020
31788896
91
31788896
1820
31908896
91
120000
1820
31888896
91
(20000)
11020
31948896
91
60000
11420
31955563
91
6667
11420
31986230
91
30667
11420
31996897
91
10667
11420
32004564
91
7667
11420
31995364
91
(9200)
11420
31992164
91
(3200)
11420
31989864
91
(2300)
11420
31990864
91
1000
12920
32022987
91
32123
12720
32026327
91
3340
21920
32031675
91
5348
31220
32056675
91
25000
31220
32102256
91
45581
31220
32111368
91
9112
3620
32126368
91
15000
51220
32135868
50
5220
51420
32178868
48
22681
51420
32226329
48
25034
51120
32232129
51
3251
51120
32237929
51
3251
6120
32247738
30
3234
6120
32285306
30
12385
61120
32525306
20
52747
61120
32463776
20
(13523)
6820
32467776
23
1011
62920
32470276
2
55
QTD Average Shares Outstanding
32241713
C1
TA to the Summary tab
C2
TA to the Avg Stock Price tab
C3
TA to the Options Outstanding YTD tab
C4
TA to the Equity Rollforward WP
C5
TA to the AST Report in the Equity Rollfoward WP
C6
TA to the Options Outstanding QTD tab
C7
Custom 7
C8
See comment box
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
4
Luna is a global company
HistoryIncorporated 1990
IPO 2006
Reporting SegmentsLightwave Luna Labs
RevenueFY19 $705M
FY20 Guidance $81M-83M
AEBITDAFY19 $95M
FY20 Guidance$10M-12M
270+ Employees
Overview
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
5
Luna has a clear vision and established history
LUNArsquos Transformation
Vision Enabling the Future with Fiber
Incorporated Merger with API
Sale of non-core business to OSI and
acquisition of Micron Optics
IPO
Sale of non-core business
to MACOMAcquisition of General
Photonics
1990
2006
2015
2017
2018
2019
2020
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
6
Compelling business model with strong growth potential
temperature acceleration displacement and pressure
Focus on structural health and security
bull Buildings tunnels bridges
bull Perimeter security
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
13
Sensing Material thickness
Product Terahertz technology
Layer thickness measurements for process control inspection and non-destructive testing Advanced technology measures thickness of
opaque materials Unique measurement of composites and
coatings with easy to use hand-held tools Focus on manufacturing environments and
field test for military-aerospacebull Plastic and industrial packagingbull Used extensively on F35 and F22 for
anti-radar surface treatment
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
14
Comms Test
Increased data and video consumption Video forecasted to represent 82 of all
IP traffic in 2022 34 CAGR
Growth in mobile and 4G5G Mobile data traffic growing at 46 CAGR
Cloud services and adoption of Internet of Things Data center traffic growing at 26 CAGR 285 billion IoT networked devices by
2022
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
15
Comms Test Components
Product Optical Vector Analyzer (OVA)
Ensuring speed at the chip level
Unprecedented visibility inside devices ˗you canrsquot fix what you canrsquot see
Reduces time and cost associated with the development of high-speed optical components
Focus on enabling the carriers to move to 5G networks
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
16
Comms Test Short-haul network
Product Optical Backscatter Reflectometer (OBR)
Bandwidth demands continue to drive double-digit connectivity growth
Delivers unprecedented visibility into short-haul networks
Emerging market for on-board aircraft communications
Ensuring network ldquoup timerdquo on Lockheed Martinrsquos F-35
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
17
Luna Labs
Work with universities and government research labs to explore technological feasibility with a goal toward proof of concept
Collaborate with prime contractors government offices and federally-funded RampD centers
Work with contract manufacturers suppliers licensees and distributors to develop everything from small-scale prototypes up to and including market-ready products
Based in Charlottesville VA
2Q FY20 Results
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
19
Second-quarter 2020 Key Financial Results
Solid financial performance
$06M improvement in Adjusted EBITDA1 year-over-year
Total revenues of $186M up 4 year-over-year
Lightwave revenue of $129M up 3 year-over-year
Luna Labs revenue of $56M up 7 year-over-year
Operating income improved to $18M or 10 of total revenues in Q2 2020 from $10M or 6 of total revenues in Q2 2019 due to increased revenue and gross profit as well as improved operating expense leverage
Net income of $14M or $004 per fully diluted share for the three months ended June 30 2020 compared to $08M or $002 per fully diluted share for the three months ended June 30 2019
Adjusted EBITDA1 increased to $30M for the three months ended June 30 2020 compared to $24M for the three months ended June 30 2019
Reaffirmed 2020 outlook tighten range to $81 to $83M in total revenues
1Adj EBITDA is a non-GAAP measure Reconciliation of comparable GAAP measures to non-GAAP measures are included in the appendix to this presentation
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
20
Second-quarter 2020 and Other Recent Accomplishments
Reported solid second-quarter 2020 financial results in challenging COVID environment
Held 6 customer-facing technology educational webinars ~1000 live attendees and more than 1200 leads
Hosted worldwide virtual sales meeting with 47 attendees
Participated in virtual trade shows
Continued to monitor employee feedback with a focus on safety and well-being
Successful implementation of Employee Stock Purchase Plan with approximately 60 participation
Held successful Virtual Annual Shareholder Meeting in May
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
21
($20)
$03
$95
FY16 FY17 FY18 FY19 FY20
Adjusted EBITDA1 2
(millions)
$31
$296 $331
$429
$705
FY16 FY17 FY18 FY19 FY20
Revenue1
(millions)
$357
Strong Financial Results
1 Based on managementrsquos estimates of the impact from the divestiture of Optoelectronics Includes the acquisitions of Micron Optics and General Photonics2Adj EBITDA is a non-GAAP measure Reconciliation of comparable GAAP measures to non-GAAP measures are included in the appendix to this presentation
FY20 Guidance$810 - $830
FY20 Guidance $100 to $120
$45
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
22
A Flexible Balance Sheet and Strong Cash Position
Strong balance sheet on June 30 2020
$912M in total assets
bull $265M in cash and cash equivalents
bull $448M in working capital
Access to $10M revolving credit facility if needed
Continued focus on working capital and reinvestment in business in order to generate long-term sustainable growth
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
23
2020 Financial Outlook
Maintaining FY2020 outlook tightening our range
Total revenues of $81M to $83M
Adjusted EBITDA1 of $10M to $12M
1 Adj EBITDA is a non-GAAP measure Reconciliation of comparable GAAP measures to non-GAAP measures are included in the appendix to this presentation The outlook above does not include any future acquisitions divestitures or unanticipated events
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
24
Luna ndash Enabling the Future with Fiber
Proprietary measurement technology offering unprecedented combination of resolution accuracy and speed
Customers in attractive markets Military and Defense Communications Infrastructure Energy and Automotive
Positioned to take advantage of trends such as vehicle light-weighting and increasing demands on data centers and broadband capacity
Adequately capitalized to fund growth
Long-tenured experienced executive team board
Corporate culture of innovation and integrity
Overview
Appendix
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
26
Reconciliation of Net Income to Adjusted EBITDA
(1) Non-recurring charges consist of transaction-related expenses related to the acquisition of General Photonics
2020 2019 2020 2019
Reconciliation of EBITDA and Adjusted EBITDANet income 1369$ 841$ 253$ 1967$ Loss from discontinued operations net of income tax benefit of $464 - - 1436 -
Net income from continuing operations 1369 841 1689 1967 Interest expense 1 - 1 13 Investment income (4) (77) (64) (268) Income tax expense(benefit) 441 247 579 (1618) Depreciation and amortization 684 653 1363 1166
Reconciliation of Net Income to Adjusted EBITDA Full Year
(1) Non-recurring charges include the following 2017) CEO separation costs and other share-based compensation 2018) Transaction-related expenses associated with the acquisition of Micron Optics Inc 2019) Transaction related expenses and inventory step-up amortization relate to General Photonics acquisition and CFO transition expenses
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
28
New Segment Quarterly Results (in thousands)
March 31 2019 June 30 2019 Sep 30 2019 A Dec 31 2019 March 31 2020 June 30 2020
Total revenues 14833 17814 18389 19480 17141 18576
Cost of revenuesLightwave 4280 5334 5449 5070 4885 5181 Luna Labs 3785 3728 3665 4022 3892 3878
Total cost of revenues 8065 9062 9114 9092 8777 9059
Gross Profit 6768 8752 9275 10388 8364 9517
Operating expenseSelling general and administrative 6207 6003 5745 6416 6377 6202 Research development and engineering 1458 1735 2048 2255 1597 1505
Total operating expense 7665 7738 7793 8671 7974 7707
Operating income (897)$ 1014$ 1482$ 1717$ 390$ 1810$
A The Company revised its results for the three months ended September 30 2019 The Company has concluded these adjustments are not material individually or in the aggregate
Three Months Ended
Scott A Graeff President and CEO
Safe Harbor
Luna ndash Enabling the Future with Fiber
Luna is a global company
Luna has a clear vision and established history
Compelling business model with strong growth potential
Lightwave 2019 revenue1 snapshot
Luna Overview
Where Does Luna Play
Sensing
Sensing Short-range high-resolution
Sensing long-range high-speed
Sensing Material thickness
Comms Test
Comms Test Components
Comms Test Short-haul network
Luna Labs
2Q FY20 Results
Second-quarter 2020 Key Financial Results
Second-quarter 2020 and Other Recent Accomplishments
Slide Number 21
A Flexible Balance Sheet and Strong Cash Position
2020 Financial Outlook
Luna ndash Enabling the Future with Fiber
Appendix
Reconciliation of Net Income to Adjusted EBITDA
Reconciliation of Net Income to Adjusted EBITDA Full Year
New Segment Quarterly Results
(in thousands)
Three Months Ended
December 31 2018
A
March 31 2019
C
June 30 2019
September 30 2019
December 31 2019
March 31 2020
June 30 2020
Revenues
Lightwave
$ 11345
$ 10221
$ 12523
$ 13120
$ 13988
$ 11554
12933
Luna Labs
5548
6641
5291
5301
5492
5587
5642
Total revenues
16893
16862
17814
18421
19480
17141
18576
Cost of revenues
Lightwave
4002
3836
5334
5471
5070
4885
5181
Luna Labs
4268
4816
3728
3665
4022
3892
3878
Total cost of revenues
8270
8652
9062
9136
9092
8777
9059
Gross Profit
8623
8210
8752
9285
10388
8364
9517
Operating expense
Selling general and administrative
6394
7165
6003
5754
6415
6377
6202
Research development and engineering
1894
1708
1735
2047
2255
1597
1505
Total operating expense
8288
8873
7738
7801
8670
7974
7707
Operating income
$ 335
$ (663)
$ 1014
$ 1484
$ 1718
$ 390
$ 1810
Historical - Hidden
A
Includes $751000 of costs associated with the acquisition of Micron Optics
B
Unaudited pro forma financials assumes the General Photonics business was acquired on January 1 2019
C
Includes $898000 of costs associated with the acquisition of General Photonics
Year Ended December 31
(unaudited)
2016
2017
2018
2019
Reconciliation of EBITDA and Adjusted EBITDA
Net (loss)income
$ (2370)
$ 14615
$ 11004
$ 5343
Less income from discontinued operations net of income taxes
300
15866
9766
- 0
Loss from discontinued operations net of income tax benefit of $464
- 0
- 0
- 0
- 0
Net income from continuing operations
(2670)
(1251)
1238
5343
Interest expense
319
217
124
16
Investment income
- 0
- 0
(549)
(394)
Income tax (benefit)expense
(135)
(1148)
48
(1654)
Depreciation and amortization
1466
1137
908
2503
EBITDA
(1020)
(1045)
1769
5814
Share-based compensation
860
715
628
1544
Non-Recurring Charges (1)
- 0
596
751
1390
Amortization of Inventory Step-up
- 0
- 0
- 0
725
Adjusted EBITDA
$ (160)
$ 266
$ 3148
$ 9473
1
Non-recurring charges include the following 2017) CEO separation costs and other share-based compensation 2018) Transaction-related expenses associated with the acquisition of Micron Optics Inc 2019) Transaction related expenses and inventory step-up amortization relate to General Photonics acquisition and CFO transition expenses
Luna Innovations Incorporated
Reconciliation of Non-GAAP Financial Measures
(in thousands)
Three Months Ended
Six Months Ended
June 30
June 30
2020
2019
2020
2019
(Unaudited)
(Unaudited)
Reconciliation of EBITDA and Adjusted EBITDA
Net income
$ 1369
$ - 0
$ 841
$ 253
$ - 0
$ 1967
Loss from discontinued operations net of income tax benefit of $464
- 0
- 0
- 0
1436
- 0
- 0
Gain on sale of asset
- 0
- 0
- 0
- 0
- 0
- 0
Net income from continuing operations
1369
- 0
841
1689
- 0
1967
Interest expense
1
- 0
- 0
1
- 0
13
Investment income
(4)
- 0
(77)
(64)
- 0
(268)
Income tax expense(benefit)
441
- 0
247
579
- 0
(1618)
Depreciation and amortization
684
- 0
653
1363
- 0
1166
EBITDA
2490
- 0
1664
3568
- 0
1260
Share-based compensation
465
- 0
378
967
- 0
721
Non-Recurring Charges (1)
- 0
- 0
44
- 0
- 0
942
CFO Recruiting and Severance
- 0
- 0
- 0
- 0
- 0
- 0
Amortization of Inventory Step-up
- 0
- 0
310
- 0
- 0
412
- 0
- 0
- 0
- 0
- 0
- 0
Adjusted EBITDA
$ 2955
$ - 0
$ 2396
$ 4535
$ - 0
$ 3335
EBITDA Margin Percent on Total Revenues
134
93
100
39
Adjusted EBITDA Margin Percent on Total Revenues
159
134
127
102
Reconciliation of Non-GAAP EPS
Diluted EPS
$ 004
$ 002
$ 001
$ 005
Loss from discontinued operations net of income taxes
Existing Technology amortization missed from 101518-63019
- 0
15560
Amortization catch up from 101518-63019 in July 2019 only
In-process RampD
200000
0
- 0
1650000
4091764
Micron Purchase Amortization Detail - 812019 and forward
Trade Name
150000
36
4167
Customer Relationships
100000
84
1190
Existing Technology
1200000
60
20000
Amortization going forward
In-process RampD
200000
0
- 0
1650000
2535714
General Pho Purchase Amortization Detail - 312019
Trade Name
400000
36
11111
22822
Customer Relationships
600000
180
3333
22834
Existing Technology
7200000
96
75000
22827
In-process RampD
- 0
0
- 0
8200000
8944444
General Pho Inventory Step-up Amortization - 312019
WIP amp Fin Goods
724760
7
103537
Ends 93019
PampL Summary - Luna Innovations
For the Three Months Ending March 31 2020
QTD
QTD
QTD
YTD
YTD
YTD
Actual
Budget
Variance
Actual
Budget
Variance
fav(un-fav)
fav(un-fav)
Revenues
Lightwave
12933344
13366455
(433536)
24487335
25564000
(1077090)
686
Luna Labs
5642348
6075202
(432854)
11229350
11675307
(445957)
314
Total Revenues
18575692
19441657
(866390)
35716685
37239307
(1523047)
Cost of Revenues
Product and Licensing
5181057
5789978
608921
10066386
11082697
1016311
282
TDD
3877888
4448571
570683
7769627
8526736
757109
218
Total Cost of Revenues
9058945
10238549
570683
17836013
19609433
1773420
499
Gross Margin
Product and Licensing - $
7752287
7576477
175810
14420949
14481303
(60354)
Product and Licensing -
60
57
3
59
57
2
TDD - $
1764460
1626631
137829
3459723
3148571
311152
TDD -
31
27
4
31
27
4
Total Gross Margin
9516747
9203108
313639
17880672
17629874
250798
Gross Margin
51
47
4
50
47
3
501
Operating Expenses
Selling General amp Admin
6202338
8155800
1953888
12578977
14477853
1899301
Research Devel amp Engineering
1504800
647122
(857678)
3101865
2798808
(303057)
Total Operating Expenses
7707138
8802922
1096209
15680842
17276661
1595819
439
Operating Income (Loss)
1809609
400186
1409423
2199830
353213
1846617
62
Other Expense (Income)
Interest
930
985
55
1145
2195
1050
00
Investment Income
(4435)
(75000)
(70565)
(63790)
(150000)
(86210)
-02
Tax Expense
440626
118551
(498831)
579203
125253
(630706)
16
Tax Benefit from release of VA
-
-
-
-
-
-
00
Gainloss on foreigh exch
-
-
-
-
-
-
00
Other
3649
-
(3649)
(5236)
-
5236
-00
440770
44536
(396234)
511322
(22552)
(533874)
14
Income from continuing operations
1368839
355650
1805658
1688508
375765
2380491
Income from Disc Ops
Operating Income from Disc Ops
-
-
- 0
-
-
- 0
Gainloss of Asset Sale
-
-
- 0
(1435903)
-
(1435903)
Total Income from Disc Ops
- 0
- 0
- 0
(1435903)
- 0
(1435903)
Net Income (Loss)
1368839
355650
1013189
252605
375765
(123160)
07
Dividend on Preferred
- 0
- 0
- 0
- 0
- 0
- 0
Net Income (Loss) available to Common Shareholders
1368839
355650
1013189
252605
375765
(123160)
07
Depreciation
244214
491046
From Cash Flow
Amortization
439787
872410
From Cash Flow
Stock Compensation
465109
966932
From Cash Flow
Acquisition Costs
- 0
- 0
Amortization of Inventory Step-up
- 0
- 0
CFO Recruiting amp Severance
- 0
- 0
Treasury Stock Activity
63020
Stock Buyback - Held with Northland
Trade date
Settlement Date
of Shares
Avg Price
Commission
Trade date Total $
Number of Days
Weighted Avg
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
= Trades Not Settled
$000
$000
$000
$000
YTD Avg
0
0
Trade date
Settlement Date
of Shares
Avg Price
Commission
Trade date Total $
Number of Days
Weighted Avg
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
QTD Avg
0
0
0
0
2016 Amounts under program
205500
$24880840
$25086340
2017 Amounts under program
433179
$75649353
$76082532
2018 Amounts under program
132450
$30604099
$30736549
2019 Amounts under program
333953
$198663889
$199999701
Total
110508200
329798181
331905122
For Q Disclosure
Management Buyback - Held with AST
Date
Shares
YTD days os
YTD weighted avg
QTD days os
QTD Weighted Avg
Month
Quarter
Year
52720
Garrett James
6500
35
1250
35
2500
Jan
31
- 0
- 0
52720
Graeff Scott
17450
35
3356
35
6712
Feb
29
- 0
- 0
52720
Soller Brian
9000
35
1731
35
3462
Mar
31
91
91
44013
- 0
91
- 0
Apr
30
- 0
- 0
44013
- 0
91
- 0
May
31
- 0
- 0
44013
- 0
91
- 0
Jun
30
91
182
44013
- 0
91
- 0
Jul
31
- 0
- 0
44013
- 0
91
- 0
Aug
31
- 0
- 0
44013
- 0
91
- 0
Sept
30
92
274
- 0
- 0
Oct
31
- 0
- 0
- 0
- 0
Nov
30
- 0
- 0
- 0
- 0
Dec
31
92
366
32950
6337
12673
BOD buyback
YTD
$000
$000
44013
- 0
Qtr
$000
$000
44013
- 0
Luna
Date
CloseLast
1220
738
Average Close Price
1320
718
Year-To-Date
$ 696
1620
73
Quarter-To-Date
$ 652
1720
735
1820
756
1920
777
11020
787
11320
803
11420
804
11520
832
11620
85
11720
845
12120
827
12220
833
12320
849
12420
844
12720
828
12820
856
12920
85
13020
846
13120
819
2320
825
2420
821
2520
82
2620
819
2720
837
21020
85
21120
858
21220
904
21320
895
21420
897
21820
891
21920
891
22020
907
22120
923
22420
861
22520
745
22620
759
22720
707
22820
67
3220
713
3320
693
3420
719
3520
689
3620
75
3920
672
31020
66
31120
599
31220
521
31320
522
31620
491
31720
553
31820
473
31920
487
32020
48
32320
509
32420
543
32520
582
32620
617
32720
583
33020
623
33120
615
4120
585
4220
583
4320
572
4620
607
4720
605
4820
631
4920
665
41320
656
41420
683
41520
711
41620
734
41720
727
42020
73
42120
672
42220
683
42320
691
42420
715
42720
721
42820
74
42920
777
43020
763
5120
724
5420
751
5520
762
5620
76
5720
749
5820
782
51120
704
51220
705
51320
62
51420
578
51520
537
51820
591
51920
625
52020
61
52120
6
52220
609
52620
615
52720
62
52820
609
52920
61
6120
629
6220
628
6320
653
6420
649
6520
663
6820
667
6920
635
61020
643
61120
583
61220
606
61520
625
61620
631
61720
615
61820
599
61920
601
62220
616
62320
624
62420
615
62520
615
62620
571
62920
585
63020
584
Qtr
1
2
3
4
Options
Options
Aggregate Strike Price
Intrinsic Value
Outstanding
Exercisable
Outstanding
Exercisable
Outstanding
Exercisable
Luna
2418245
1309606
$6482283
$2709686
7767068
4952824
2418245
1309606
6482283
2709686
7767068
4952824
Warrants Aaron Chase Aaron ChaseCarilion exercised all warrants in Q2 and Q3 2018
0
0
0
0
2418245
1309606
6482283
2709686
Average Strike Price
$ 268
$ 207
Pull Cancelled for whole year
Cancels
Q1
35659 Aaron Chase Aaron Chase22999 of canceled shares didnrsquot show up until Q2-20 report
Aaron Chase Aaron ChaseCarilion exercised all warrants in Q2 and Q3 2018
$ 364
12990180
Outstanding 12312019
3160397
Q2
13124
$ 211
2769912
Q3
- 0
ERRORDIV0
- 0
Grants
20000
Q4
- 0
ERRORDIV0
- 0
Exercised
(662965)
48783
$ 323
15760092
Canceled
(48783)
Corrected Termed EEs from 2019
(50404)
These were corrected in June 2020
2418245
Remaining life
Options
Avg Life
- 0
Outstanding
Luna
2418245
644
Exercisable
1309606
474
Remaining service
Luna
2418245
See awards outstanding by grant price range report and Disclosure report for information on this tab
Luna Innovations
Additional Notes
EPS Calculations
During Jan-2019 and 2020 Management was awarded Performance Based Grants and Time Based Grants
63020
The Performance Based Grants vest after 3 years and are issued only if the performance is achieved
The Time Based Grants vest each year for 3 years Grants are issued once vested each year
Yearly BOD Grants
Basic EPS
DSU deferred stock units vest in a year but do not become issued until the Director leaves the Board This started in 2018
Net Income (loss) Per Share from Continuing Operations
YTD
Diluted
QTD
Diluted
DSU awards vest in May 2021 and will be added to the middle section of the EPS in May 2021
Net Income from Continuing Operations
1688508
1368839
Rich Roedel
8877
704
62500
Common Shares Outstanding
30484797
30589249
Barry Phelps
5326
704
37500
$ 006
$ 005
$ 004
$ 004
Leigh Anderson
5326
704
37500
Mary Beth Vitale
5326
704
37500
Net income (loss) Per Share attributable to common shareholders
RSU restricted stock units vest and are issued in a year and will be added to the bottom of the EPS in May 2021
Net Income (Loss) available to Shareholders
252605
1368839
Don Pastor
5326
704
37500
Common Shares Outstanding
30484797
30589249
Gary Spiegel
5326
704
37500
$ 001
$ 001
$ 004
$ 004
Net income (loss) Per Share from Discontinued Operations
Net Income from Discontinued Operations
(1435903)
- 0
Common Shares Outstanding
30484797
30589249
$ (005)
$ (004)
$ - 0
$ - 0
Diluted EPS
Net Income(Loss) available to SHs
252605
1368839
Common Shares Outstanding
30484797
30589249
Common Stock Equivalent
2010153
1876873
$ 001
- 0 Grant Thornton LLP Grant Thornton LLPAs earnings from continuing operations are negative (loss) basic and diluted EPS equal one another
$ 004 Grant Thornton LLP Grant Thornton LLPAs earnings from continuing operations are negative (loss) basic and diluted EPS equal one another
- 0 Grant Thornton LLP Grant Thornton LLPAs earnings from continuing operations are negative (loss) basic and diluted EPS equal one another
Non-GAAP Diluted EPS
Net income (loss) Per Share attributable to common shareholders
Net Income (Loss) available to Shareholders
252605
1368839
Loss from discontinued operations
1435903
- 0
Share-based compensation
966932
465109
Amortization of acquired intangibles
344405
688810
Acquisition related costs
- 0
- 0
Amortization of Inventory Step-up
- 0
- 0
Common Shares Outstanding
30484797
30589249
Common Stock Equivalent
2010153
1876873
$ 009
$ 008
YTD
QTD
Total issued shares
32470276
Average Close Price
$ 696
$ 652
Total treasury
1672741
Shares Outstanding
30797535
Net change in denominator
1404924 Kelly Bewick Aaron Chasesee Dilution (stock option) dilutive tab
1264984
BOD fees paid in DSUs Aaron Chase Aaron ChaseFrom Equity Award Transactions Report
Month
Quarter
Year
Balance at 112019 - DSU outstanding
591457
591457
Jan
31
Issued during Q1 2020
7114
7114
Feb
29
Issued during Q2 2020
3947
7894
Mar
31
91
91
Annual grant DSU vested 5112020
10521 KBSResults KBSResultsEnter 2019 DSU annual grant when vest in 2020 (probably May) you do not need to enter annual RSU because it will be issued in AST
21042
Apr
30
Deferred Equity Issuance 6012020
(7809) KBSResults Aaron ChaseM Wise and J Williamson retired from the BoD in May 2020 Wise Deferred Comp will be issued every June 1 for 10 years Williamson Deferred Comp will be issued every June 1 for 5 years
Grant Thornton LLP Grant Thornton LLPAs earnings from continuing operations are negative (loss) basic and diluted EPS equal one another
Grant Thornton LLP Grant Thornton LLPAs earnings from continuing operations are negative (loss) basic and diluted EPS equal one another
(15619)
May
31
Issued during Q3 2020
- 0
- 0
Jun
30
91
182
Issued during Q4 2020
- 0
- 0
Jul
31
Aug
31
Sept
30
92
274
Oct
31
Totals (Antidilutive)
2010153
1876873
Nov
30
Dec
31
92
366
Shares Outstanding as of 112020
31788896
As Of Date
Transaction
Reason
Name
Shares Issued
Shares Retired
Running Total
01012020
Normal
Balance Roll Forward
- 0
- 0
31788896
01082020
Normal
Option Exercise
Williamson John
12000000
- 0
31908896
01082020
Normal
Retirement - Vested Restriced Stock
Exer Options
Williamson John
- 0
2000000
31888896
01102020
Normal
Option Exercise
Roedel Rich
6000000
- 0
31948896
01142020
Normal
2019 Time-Based RSU Vesting
Messick Dale
666700
- 0
31955563
01142020
Normal
2019 Time-Based RSU Vesting
Graeff Scott
3066700
- 0
31986230
01142020
Normal
2019 Time-Based RSU Vesting
Soller Brian
1066700
- 0
31996897
01142020
Normal
2019 Time-Based RSU Vesting
Garrett James
766700
- 0
32004564
01142020
Normal
2019 Time-Based RSU Retirement
Taxes
Graeff Scott
- 0
920000
31995364
01142020
Normal
2019 Time-Based RSU Retirement
Taxes
Soller Brian
- 0
320000
31992164
01142020
Normal
2019 Time-Based RSU Retirement
Taxes
Garrett James
- 0
230000
31989864
01142020
Normal
Option Exercise
Burris Kevin
100000
- 0
31990864
01292020
Normal
Option Exercise
Carr Dustin
3212300
- 0
32022987
01272020
Normal
Option Exercise
Chen James
334000
- 0
32026327
02192020
Normal
Option Exercise
McPherson Daniel
534800
- 0
32031675
03122020
Normal
Option Exercise
Haber Todd
2500000
- 0
32056675
03122020
Normal
Option Exercise
Graver Thomas
4558100
- 0
32102256
03122020
Normal
Option Exercise
Baez Michael
911200
- 0
32111368
03062020
Normal
Option Exercise
Farooqui Salvan
1500000
- 0
32126368
05122020
Normal
Option Exercise
Baez Michael
950000
- 0
32135868
05142020
Normal
Option Exercise
Haber Todd
4300000
- 0
32178868
05142020
Normal
Option Exercise
Graver Thomas
4746100
- 0
32226329
05112020
Normal
Annual Equity Grant Vesting-BoD
Pastor Don
580000
- 0
32232129
05112020
Normal
Annual Equity Grant Vesting-BoD
Williamson John
580000
- 0
32237929
06012020
Normal
Deferred Stock Issuance-BoD
Wise Mike
980900
- 0
32247738
06012020
Normal
Deferred Stock Issuance-BoD
Williamson John
3756800
32285306
06112020
Normal
Option Exercise
Wise Mike
24000000
32525306
06112020
Normal
Retirement - Vested Stock
Exer Options
Wise Mike
6153000
32463776
06082020
Normal
Option Exercise
Pruzan Michael
400000
32467776
06292020
Normal
Option Exercise
Farooqui Salvan
250000
32470276
Date Issued
Balance Outstanding
Number of Days
Weighted Avg
Treasury Shares Weighted Average
Year-to-Date
YTD
QTD
1120
31788896
182
31788896
Graeff July 2
115000
115000
1820
31908896
175
115385
Q2 2015
29925
29925
1820
31888896
175
(19231)
2014
22725
22725
11020
31948896
173
57033
2016 Mgmt buyback
73675
73675
11420
31955563
169
6191
2016 repurchase program
205500
205500
11420
31986230
169
28477
2017 Mgmt buyback
90900
90900
11420
31996897
169
9905
2017 BOD buyback
100000
100000
11420
32004564
169
7119
2017 repurchase program
433179
433179
11420
31995364
169
(8543)
2018 repurchase program
132450
132450
11420
31992164
169
(2971)
2018 Mgmt buyback
49751
49751
11420
31989864
169
(2136)
2019 Mgmt buyback
52733
52733
11420
31990864
169
929
2019 repurchase program
333953
333953
12920
32022987
154
27181
2020 Mgmt buyback
6337
12673
12720
32026327
156
2863
21920
32031675
133
3908
164612764
165246418
31220
32056675
111
15247
31220
32102256
111
27799
31220
32111368
111
5557
567659
3620
32126368
117
9643
Treasury on AST
567664
51220
32135868
50
2610
Diff
(5)
51420
32178868
48
11341
51420
32226329
48
12517
51120
32232129
51
1625
51120
32237929
51
1625
6120
32247738
30
1617
6120
32285306
30
6193
61120
32525306
20
26374
61120
32463776
20
(6762)
6820
32467776
23
505
62920
32470276
2
27
YTD Average Shares Outstanding
32130925
Quarter-to Date
112020
31788896
91
31788896
1820
31908896
91
120000
1820
31888896
91
(20000)
11020
31948896
91
60000
11420
31955563
91
6667
11420
31986230
91
30667
11420
31996897
91
10667
11420
32004564
91
7667
11420
31995364
91
(9200)
11420
31992164
91
(3200)
11420
31989864
91
(2300)
11420
31990864
91
1000
12920
32022987
91
32123
12720
32026327
91
3340
21920
32031675
91
5348
31220
32056675
91
25000
31220
32102256
91
45581
31220
32111368
91
9112
3620
32126368
91
15000
51220
32135868
50
5220
51420
32178868
48
22681
51420
32226329
48
25034
51120
32232129
51
3251
51120
32237929
51
3251
6120
32247738
30
3234
6120
32285306
30
12385
61120
32525306
20
52747
61120
32463776
20
(13523)
6820
32467776
23
1011
62920
32470276
2
55
QTD Average Shares Outstanding
32241713
C1
TA to the Summary tab
C2
TA to the Avg Stock Price tab
C3
TA to the Options Outstanding YTD tab
C4
TA to the Equity Rollforward WP
C5
TA to the AST Report in the Equity Rollfoward WP
C6
TA to the Options Outstanding QTD tab
C7
Custom 7
C8
See comment box
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
5
Luna has a clear vision and established history
LUNArsquos Transformation
Vision Enabling the Future with Fiber
Incorporated Merger with API
Sale of non-core business to OSI and
acquisition of Micron Optics
IPO
Sale of non-core business
to MACOMAcquisition of General
Photonics
1990
2006
2015
2017
2018
2019
2020
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
6
Compelling business model with strong growth potential
temperature acceleration displacement and pressure
Focus on structural health and security
bull Buildings tunnels bridges
bull Perimeter security
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
13
Sensing Material thickness
Product Terahertz technology
Layer thickness measurements for process control inspection and non-destructive testing Advanced technology measures thickness of
opaque materials Unique measurement of composites and
coatings with easy to use hand-held tools Focus on manufacturing environments and
field test for military-aerospacebull Plastic and industrial packagingbull Used extensively on F35 and F22 for
anti-radar surface treatment
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
14
Comms Test
Increased data and video consumption Video forecasted to represent 82 of all
IP traffic in 2022 34 CAGR
Growth in mobile and 4G5G Mobile data traffic growing at 46 CAGR
Cloud services and adoption of Internet of Things Data center traffic growing at 26 CAGR 285 billion IoT networked devices by
2022
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
15
Comms Test Components
Product Optical Vector Analyzer (OVA)
Ensuring speed at the chip level
Unprecedented visibility inside devices ˗you canrsquot fix what you canrsquot see
Reduces time and cost associated with the development of high-speed optical components
Focus on enabling the carriers to move to 5G networks
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
16
Comms Test Short-haul network
Product Optical Backscatter Reflectometer (OBR)
Bandwidth demands continue to drive double-digit connectivity growth
Delivers unprecedented visibility into short-haul networks
Emerging market for on-board aircraft communications
Ensuring network ldquoup timerdquo on Lockheed Martinrsquos F-35
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
17
Luna Labs
Work with universities and government research labs to explore technological feasibility with a goal toward proof of concept
Collaborate with prime contractors government offices and federally-funded RampD centers
Work with contract manufacturers suppliers licensees and distributors to develop everything from small-scale prototypes up to and including market-ready products
Based in Charlottesville VA
2Q FY20 Results
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
19
Second-quarter 2020 Key Financial Results
Solid financial performance
$06M improvement in Adjusted EBITDA1 year-over-year
Total revenues of $186M up 4 year-over-year
Lightwave revenue of $129M up 3 year-over-year
Luna Labs revenue of $56M up 7 year-over-year
Operating income improved to $18M or 10 of total revenues in Q2 2020 from $10M or 6 of total revenues in Q2 2019 due to increased revenue and gross profit as well as improved operating expense leverage
Net income of $14M or $004 per fully diluted share for the three months ended June 30 2020 compared to $08M or $002 per fully diluted share for the three months ended June 30 2019
Adjusted EBITDA1 increased to $30M for the three months ended June 30 2020 compared to $24M for the three months ended June 30 2019
Reaffirmed 2020 outlook tighten range to $81 to $83M in total revenues
1Adj EBITDA is a non-GAAP measure Reconciliation of comparable GAAP measures to non-GAAP measures are included in the appendix to this presentation
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
20
Second-quarter 2020 and Other Recent Accomplishments
Reported solid second-quarter 2020 financial results in challenging COVID environment
Held 6 customer-facing technology educational webinars ~1000 live attendees and more than 1200 leads
Hosted worldwide virtual sales meeting with 47 attendees
Participated in virtual trade shows
Continued to monitor employee feedback with a focus on safety and well-being
Successful implementation of Employee Stock Purchase Plan with approximately 60 participation
Held successful Virtual Annual Shareholder Meeting in May
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
21
($20)
$03
$95
FY16 FY17 FY18 FY19 FY20
Adjusted EBITDA1 2
(millions)
$31
$296 $331
$429
$705
FY16 FY17 FY18 FY19 FY20
Revenue1
(millions)
$357
Strong Financial Results
1 Based on managementrsquos estimates of the impact from the divestiture of Optoelectronics Includes the acquisitions of Micron Optics and General Photonics2Adj EBITDA is a non-GAAP measure Reconciliation of comparable GAAP measures to non-GAAP measures are included in the appendix to this presentation
FY20 Guidance$810 - $830
FY20 Guidance $100 to $120
$45
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
22
A Flexible Balance Sheet and Strong Cash Position
Strong balance sheet on June 30 2020
$912M in total assets
bull $265M in cash and cash equivalents
bull $448M in working capital
Access to $10M revolving credit facility if needed
Continued focus on working capital and reinvestment in business in order to generate long-term sustainable growth
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
23
2020 Financial Outlook
Maintaining FY2020 outlook tightening our range
Total revenues of $81M to $83M
Adjusted EBITDA1 of $10M to $12M
1 Adj EBITDA is a non-GAAP measure Reconciliation of comparable GAAP measures to non-GAAP measures are included in the appendix to this presentation The outlook above does not include any future acquisitions divestitures or unanticipated events
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
24
Luna ndash Enabling the Future with Fiber
Proprietary measurement technology offering unprecedented combination of resolution accuracy and speed
Customers in attractive markets Military and Defense Communications Infrastructure Energy and Automotive
Positioned to take advantage of trends such as vehicle light-weighting and increasing demands on data centers and broadband capacity
Adequately capitalized to fund growth
Long-tenured experienced executive team board
Corporate culture of innovation and integrity
Overview
Appendix
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
26
Reconciliation of Net Income to Adjusted EBITDA
(1) Non-recurring charges consist of transaction-related expenses related to the acquisition of General Photonics
2020 2019 2020 2019
Reconciliation of EBITDA and Adjusted EBITDANet income 1369$ 841$ 253$ 1967$ Loss from discontinued operations net of income tax benefit of $464 - - 1436 -
Net income from continuing operations 1369 841 1689 1967 Interest expense 1 - 1 13 Investment income (4) (77) (64) (268) Income tax expense(benefit) 441 247 579 (1618) Depreciation and amortization 684 653 1363 1166
Reconciliation of Net Income to Adjusted EBITDA Full Year
(1) Non-recurring charges include the following 2017) CEO separation costs and other share-based compensation 2018) Transaction-related expenses associated with the acquisition of Micron Optics Inc 2019) Transaction related expenses and inventory step-up amortization relate to General Photonics acquisition and CFO transition expenses
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
28
New Segment Quarterly Results (in thousands)
March 31 2019 June 30 2019 Sep 30 2019 A Dec 31 2019 March 31 2020 June 30 2020
Total revenues 14833 17814 18389 19480 17141 18576
Cost of revenuesLightwave 4280 5334 5449 5070 4885 5181 Luna Labs 3785 3728 3665 4022 3892 3878
Total cost of revenues 8065 9062 9114 9092 8777 9059
Gross Profit 6768 8752 9275 10388 8364 9517
Operating expenseSelling general and administrative 6207 6003 5745 6416 6377 6202 Research development and engineering 1458 1735 2048 2255 1597 1505
Total operating expense 7665 7738 7793 8671 7974 7707
Operating income (897)$ 1014$ 1482$ 1717$ 390$ 1810$
A The Company revised its results for the three months ended September 30 2019 The Company has concluded these adjustments are not material individually or in the aggregate
Three Months Ended
Scott A Graeff President and CEO
Safe Harbor
Luna ndash Enabling the Future with Fiber
Luna is a global company
Luna has a clear vision and established history
Compelling business model with strong growth potential
Lightwave 2019 revenue1 snapshot
Luna Overview
Where Does Luna Play
Sensing
Sensing Short-range high-resolution
Sensing long-range high-speed
Sensing Material thickness
Comms Test
Comms Test Components
Comms Test Short-haul network
Luna Labs
2Q FY20 Results
Second-quarter 2020 Key Financial Results
Second-quarter 2020 and Other Recent Accomplishments
Slide Number 21
A Flexible Balance Sheet and Strong Cash Position
2020 Financial Outlook
Luna ndash Enabling the Future with Fiber
Appendix
Reconciliation of Net Income to Adjusted EBITDA
Reconciliation of Net Income to Adjusted EBITDA Full Year
New Segment Quarterly Results
(in thousands)
Three Months Ended
December 31 2018
A
March 31 2019
C
June 30 2019
September 30 2019
December 31 2019
March 31 2020
June 30 2020
Revenues
Lightwave
$ 11345
$ 10221
$ 12523
$ 13120
$ 13988
$ 11554
12933
Luna Labs
5548
6641
5291
5301
5492
5587
5642
Total revenues
16893
16862
17814
18421
19480
17141
18576
Cost of revenues
Lightwave
4002
3836
5334
5471
5070
4885
5181
Luna Labs
4268
4816
3728
3665
4022
3892
3878
Total cost of revenues
8270
8652
9062
9136
9092
8777
9059
Gross Profit
8623
8210
8752
9285
10388
8364
9517
Operating expense
Selling general and administrative
6394
7165
6003
5754
6415
6377
6202
Research development and engineering
1894
1708
1735
2047
2255
1597
1505
Total operating expense
8288
8873
7738
7801
8670
7974
7707
Operating income
$ 335
$ (663)
$ 1014
$ 1484
$ 1718
$ 390
$ 1810
Historical - Hidden
A
Includes $751000 of costs associated with the acquisition of Micron Optics
B
Unaudited pro forma financials assumes the General Photonics business was acquired on January 1 2019
C
Includes $898000 of costs associated with the acquisition of General Photonics
Year Ended December 31
(unaudited)
2016
2017
2018
2019
Reconciliation of EBITDA and Adjusted EBITDA
Net (loss)income
$ (2370)
$ 14615
$ 11004
$ 5343
Less income from discontinued operations net of income taxes
300
15866
9766
- 0
Loss from discontinued operations net of income tax benefit of $464
- 0
- 0
- 0
- 0
Net income from continuing operations
(2670)
(1251)
1238
5343
Interest expense
319
217
124
16
Investment income
- 0
- 0
(549)
(394)
Income tax (benefit)expense
(135)
(1148)
48
(1654)
Depreciation and amortization
1466
1137
908
2503
EBITDA
(1020)
(1045)
1769
5814
Share-based compensation
860
715
628
1544
Non-Recurring Charges (1)
- 0
596
751
1390
Amortization of Inventory Step-up
- 0
- 0
- 0
725
Adjusted EBITDA
$ (160)
$ 266
$ 3148
$ 9473
1
Non-recurring charges include the following 2017) CEO separation costs and other share-based compensation 2018) Transaction-related expenses associated with the acquisition of Micron Optics Inc 2019) Transaction related expenses and inventory step-up amortization relate to General Photonics acquisition and CFO transition expenses
Luna Innovations Incorporated
Reconciliation of Non-GAAP Financial Measures
(in thousands)
Three Months Ended
Six Months Ended
June 30
June 30
2020
2019
2020
2019
(Unaudited)
(Unaudited)
Reconciliation of EBITDA and Adjusted EBITDA
Net income
$ 1369
$ - 0
$ 841
$ 253
$ - 0
$ 1967
Loss from discontinued operations net of income tax benefit of $464
- 0
- 0
- 0
1436
- 0
- 0
Gain on sale of asset
- 0
- 0
- 0
- 0
- 0
- 0
Net income from continuing operations
1369
- 0
841
1689
- 0
1967
Interest expense
1
- 0
- 0
1
- 0
13
Investment income
(4)
- 0
(77)
(64)
- 0
(268)
Income tax expense(benefit)
441
- 0
247
579
- 0
(1618)
Depreciation and amortization
684
- 0
653
1363
- 0
1166
EBITDA
2490
- 0
1664
3568
- 0
1260
Share-based compensation
465
- 0
378
967
- 0
721
Non-Recurring Charges (1)
- 0
- 0
44
- 0
- 0
942
CFO Recruiting and Severance
- 0
- 0
- 0
- 0
- 0
- 0
Amortization of Inventory Step-up
- 0
- 0
310
- 0
- 0
412
- 0
- 0
- 0
- 0
- 0
- 0
Adjusted EBITDA
$ 2955
$ - 0
$ 2396
$ 4535
$ - 0
$ 3335
EBITDA Margin Percent on Total Revenues
134
93
100
39
Adjusted EBITDA Margin Percent on Total Revenues
159
134
127
102
Reconciliation of Non-GAAP EPS
Diluted EPS
$ 004
$ 002
$ 001
$ 005
Loss from discontinued operations net of income taxes
Existing Technology amortization missed from 101518-63019
- 0
15560
Amortization catch up from 101518-63019 in July 2019 only
In-process RampD
200000
0
- 0
1650000
4091764
Micron Purchase Amortization Detail - 812019 and forward
Trade Name
150000
36
4167
Customer Relationships
100000
84
1190
Existing Technology
1200000
60
20000
Amortization going forward
In-process RampD
200000
0
- 0
1650000
2535714
General Pho Purchase Amortization Detail - 312019
Trade Name
400000
36
11111
22822
Customer Relationships
600000
180
3333
22834
Existing Technology
7200000
96
75000
22827
In-process RampD
- 0
0
- 0
8200000
8944444
General Pho Inventory Step-up Amortization - 312019
WIP amp Fin Goods
724760
7
103537
Ends 93019
PampL Summary - Luna Innovations
For the Three Months Ending March 31 2020
QTD
QTD
QTD
YTD
YTD
YTD
Actual
Budget
Variance
Actual
Budget
Variance
fav(un-fav)
fav(un-fav)
Revenues
Lightwave
12933344
13366455
(433536)
24487335
25564000
(1077090)
686
Luna Labs
5642348
6075202
(432854)
11229350
11675307
(445957)
314
Total Revenues
18575692
19441657
(866390)
35716685
37239307
(1523047)
Cost of Revenues
Product and Licensing
5181057
5789978
608921
10066386
11082697
1016311
282
TDD
3877888
4448571
570683
7769627
8526736
757109
218
Total Cost of Revenues
9058945
10238549
570683
17836013
19609433
1773420
499
Gross Margin
Product and Licensing - $
7752287
7576477
175810
14420949
14481303
(60354)
Product and Licensing -
60
57
3
59
57
2
TDD - $
1764460
1626631
137829
3459723
3148571
311152
TDD -
31
27
4
31
27
4
Total Gross Margin
9516747
9203108
313639
17880672
17629874
250798
Gross Margin
51
47
4
50
47
3
501
Operating Expenses
Selling General amp Admin
6202338
8155800
1953888
12578977
14477853
1899301
Research Devel amp Engineering
1504800
647122
(857678)
3101865
2798808
(303057)
Total Operating Expenses
7707138
8802922
1096209
15680842
17276661
1595819
439
Operating Income (Loss)
1809609
400186
1409423
2199830
353213
1846617
62
Other Expense (Income)
Interest
930
985
55
1145
2195
1050
00
Investment Income
(4435)
(75000)
(70565)
(63790)
(150000)
(86210)
-02
Tax Expense
440626
118551
(498831)
579203
125253
(630706)
16
Tax Benefit from release of VA
-
-
-
-
-
-
00
Gainloss on foreigh exch
-
-
-
-
-
-
00
Other
3649
-
(3649)
(5236)
-
5236
-00
440770
44536
(396234)
511322
(22552)
(533874)
14
Income from continuing operations
1368839
355650
1805658
1688508
375765
2380491
Income from Disc Ops
Operating Income from Disc Ops
-
-
- 0
-
-
- 0
Gainloss of Asset Sale
-
-
- 0
(1435903)
-
(1435903)
Total Income from Disc Ops
- 0
- 0
- 0
(1435903)
- 0
(1435903)
Net Income (Loss)
1368839
355650
1013189
252605
375765
(123160)
07
Dividend on Preferred
- 0
- 0
- 0
- 0
- 0
- 0
Net Income (Loss) available to Common Shareholders
1368839
355650
1013189
252605
375765
(123160)
07
Depreciation
244214
491046
From Cash Flow
Amortization
439787
872410
From Cash Flow
Stock Compensation
465109
966932
From Cash Flow
Acquisition Costs
- 0
- 0
Amortization of Inventory Step-up
- 0
- 0
CFO Recruiting amp Severance
- 0
- 0
Treasury Stock Activity
63020
Stock Buyback - Held with Northland
Trade date
Settlement Date
of Shares
Avg Price
Commission
Trade date Total $
Number of Days
Weighted Avg
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
= Trades Not Settled
$000
$000
$000
$000
YTD Avg
0
0
Trade date
Settlement Date
of Shares
Avg Price
Commission
Trade date Total $
Number of Days
Weighted Avg
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
QTD Avg
0
0
0
0
2016 Amounts under program
205500
$24880840
$25086340
2017 Amounts under program
433179
$75649353
$76082532
2018 Amounts under program
132450
$30604099
$30736549
2019 Amounts under program
333953
$198663889
$199999701
Total
110508200
329798181
331905122
For Q Disclosure
Management Buyback - Held with AST
Date
Shares
YTD days os
YTD weighted avg
QTD days os
QTD Weighted Avg
Month
Quarter
Year
52720
Garrett James
6500
35
1250
35
2500
Jan
31
- 0
- 0
52720
Graeff Scott
17450
35
3356
35
6712
Feb
29
- 0
- 0
52720
Soller Brian
9000
35
1731
35
3462
Mar
31
91
91
44013
- 0
91
- 0
Apr
30
- 0
- 0
44013
- 0
91
- 0
May
31
- 0
- 0
44013
- 0
91
- 0
Jun
30
91
182
44013
- 0
91
- 0
Jul
31
- 0
- 0
44013
- 0
91
- 0
Aug
31
- 0
- 0
44013
- 0
91
- 0
Sept
30
92
274
- 0
- 0
Oct
31
- 0
- 0
- 0
- 0
Nov
30
- 0
- 0
- 0
- 0
Dec
31
92
366
32950
6337
12673
BOD buyback
YTD
$000
$000
44013
- 0
Qtr
$000
$000
44013
- 0
Luna
Date
CloseLast
1220
738
Average Close Price
1320
718
Year-To-Date
$ 696
1620
73
Quarter-To-Date
$ 652
1720
735
1820
756
1920
777
11020
787
11320
803
11420
804
11520
832
11620
85
11720
845
12120
827
12220
833
12320
849
12420
844
12720
828
12820
856
12920
85
13020
846
13120
819
2320
825
2420
821
2520
82
2620
819
2720
837
21020
85
21120
858
21220
904
21320
895
21420
897
21820
891
21920
891
22020
907
22120
923
22420
861
22520
745
22620
759
22720
707
22820
67
3220
713
3320
693
3420
719
3520
689
3620
75
3920
672
31020
66
31120
599
31220
521
31320
522
31620
491
31720
553
31820
473
31920
487
32020
48
32320
509
32420
543
32520
582
32620
617
32720
583
33020
623
33120
615
4120
585
4220
583
4320
572
4620
607
4720
605
4820
631
4920
665
41320
656
41420
683
41520
711
41620
734
41720
727
42020
73
42120
672
42220
683
42320
691
42420
715
42720
721
42820
74
42920
777
43020
763
5120
724
5420
751
5520
762
5620
76
5720
749
5820
782
51120
704
51220
705
51320
62
51420
578
51520
537
51820
591
51920
625
52020
61
52120
6
52220
609
52620
615
52720
62
52820
609
52920
61
6120
629
6220
628
6320
653
6420
649
6520
663
6820
667
6920
635
61020
643
61120
583
61220
606
61520
625
61620
631
61720
615
61820
599
61920
601
62220
616
62320
624
62420
615
62520
615
62620
571
62920
585
63020
584
Qtr
1
2
3
4
Options
Options
Aggregate Strike Price
Intrinsic Value
Outstanding
Exercisable
Outstanding
Exercisable
Outstanding
Exercisable
Luna
2418245
1309606
$6482283
$2709686
7767068
4952824
2418245
1309606
6482283
2709686
7767068
4952824
Warrants Aaron Chase Aaron ChaseCarilion exercised all warrants in Q2 and Q3 2018
0
0
0
0
2418245
1309606
6482283
2709686
Average Strike Price
$ 268
$ 207
Pull Cancelled for whole year
Cancels
Q1
35659 Aaron Chase Aaron Chase22999 of canceled shares didnrsquot show up until Q2-20 report
Aaron Chase Aaron ChaseCarilion exercised all warrants in Q2 and Q3 2018
$ 364
12990180
Outstanding 12312019
3160397
Q2
13124
$ 211
2769912
Q3
- 0
ERRORDIV0
- 0
Grants
20000
Q4
- 0
ERRORDIV0
- 0
Exercised
(662965)
48783
$ 323
15760092
Canceled
(48783)
Corrected Termed EEs from 2019
(50404)
These were corrected in June 2020
2418245
Remaining life
Options
Avg Life
- 0
Outstanding
Luna
2418245
644
Exercisable
1309606
474
Remaining service
Luna
2418245
See awards outstanding by grant price range report and Disclosure report for information on this tab
Luna Innovations
Additional Notes
EPS Calculations
During Jan-2019 and 2020 Management was awarded Performance Based Grants and Time Based Grants
63020
The Performance Based Grants vest after 3 years and are issued only if the performance is achieved
The Time Based Grants vest each year for 3 years Grants are issued once vested each year
Yearly BOD Grants
Basic EPS
DSU deferred stock units vest in a year but do not become issued until the Director leaves the Board This started in 2018
Net Income (loss) Per Share from Continuing Operations
YTD
Diluted
QTD
Diluted
DSU awards vest in May 2021 and will be added to the middle section of the EPS in May 2021
Net Income from Continuing Operations
1688508
1368839
Rich Roedel
8877
704
62500
Common Shares Outstanding
30484797
30589249
Barry Phelps
5326
704
37500
$ 006
$ 005
$ 004
$ 004
Leigh Anderson
5326
704
37500
Mary Beth Vitale
5326
704
37500
Net income (loss) Per Share attributable to common shareholders
RSU restricted stock units vest and are issued in a year and will be added to the bottom of the EPS in May 2021
Net Income (Loss) available to Shareholders
252605
1368839
Don Pastor
5326
704
37500
Common Shares Outstanding
30484797
30589249
Gary Spiegel
5326
704
37500
$ 001
$ 001
$ 004
$ 004
Net income (loss) Per Share from Discontinued Operations
Net Income from Discontinued Operations
(1435903)
- 0
Common Shares Outstanding
30484797
30589249
$ (005)
$ (004)
$ - 0
$ - 0
Diluted EPS
Net Income(Loss) available to SHs
252605
1368839
Common Shares Outstanding
30484797
30589249
Common Stock Equivalent
2010153
1876873
$ 001
- 0 Grant Thornton LLP Grant Thornton LLPAs earnings from continuing operations are negative (loss) basic and diluted EPS equal one another
$ 004 Grant Thornton LLP Grant Thornton LLPAs earnings from continuing operations are negative (loss) basic and diluted EPS equal one another
- 0 Grant Thornton LLP Grant Thornton LLPAs earnings from continuing operations are negative (loss) basic and diluted EPS equal one another
Non-GAAP Diluted EPS
Net income (loss) Per Share attributable to common shareholders
Net Income (Loss) available to Shareholders
252605
1368839
Loss from discontinued operations
1435903
- 0
Share-based compensation
966932
465109
Amortization of acquired intangibles
344405
688810
Acquisition related costs
- 0
- 0
Amortization of Inventory Step-up
- 0
- 0
Common Shares Outstanding
30484797
30589249
Common Stock Equivalent
2010153
1876873
$ 009
$ 008
YTD
QTD
Total issued shares
32470276
Average Close Price
$ 696
$ 652
Total treasury
1672741
Shares Outstanding
30797535
Net change in denominator
1404924 Kelly Bewick Aaron Chasesee Dilution (stock option) dilutive tab
1264984
BOD fees paid in DSUs Aaron Chase Aaron ChaseFrom Equity Award Transactions Report
Month
Quarter
Year
Balance at 112019 - DSU outstanding
591457
591457
Jan
31
Issued during Q1 2020
7114
7114
Feb
29
Issued during Q2 2020
3947
7894
Mar
31
91
91
Annual grant DSU vested 5112020
10521 KBSResults KBSResultsEnter 2019 DSU annual grant when vest in 2020 (probably May) you do not need to enter annual RSU because it will be issued in AST
21042
Apr
30
Deferred Equity Issuance 6012020
(7809) KBSResults Aaron ChaseM Wise and J Williamson retired from the BoD in May 2020 Wise Deferred Comp will be issued every June 1 for 10 years Williamson Deferred Comp will be issued every June 1 for 5 years
Grant Thornton LLP Grant Thornton LLPAs earnings from continuing operations are negative (loss) basic and diluted EPS equal one another
Grant Thornton LLP Grant Thornton LLPAs earnings from continuing operations are negative (loss) basic and diluted EPS equal one another
(15619)
May
31
Issued during Q3 2020
- 0
- 0
Jun
30
91
182
Issued during Q4 2020
- 0
- 0
Jul
31
Aug
31
Sept
30
92
274
Oct
31
Totals (Antidilutive)
2010153
1876873
Nov
30
Dec
31
92
366
Shares Outstanding as of 112020
31788896
As Of Date
Transaction
Reason
Name
Shares Issued
Shares Retired
Running Total
01012020
Normal
Balance Roll Forward
- 0
- 0
31788896
01082020
Normal
Option Exercise
Williamson John
12000000
- 0
31908896
01082020
Normal
Retirement - Vested Restriced Stock
Exer Options
Williamson John
- 0
2000000
31888896
01102020
Normal
Option Exercise
Roedel Rich
6000000
- 0
31948896
01142020
Normal
2019 Time-Based RSU Vesting
Messick Dale
666700
- 0
31955563
01142020
Normal
2019 Time-Based RSU Vesting
Graeff Scott
3066700
- 0
31986230
01142020
Normal
2019 Time-Based RSU Vesting
Soller Brian
1066700
- 0
31996897
01142020
Normal
2019 Time-Based RSU Vesting
Garrett James
766700
- 0
32004564
01142020
Normal
2019 Time-Based RSU Retirement
Taxes
Graeff Scott
- 0
920000
31995364
01142020
Normal
2019 Time-Based RSU Retirement
Taxes
Soller Brian
- 0
320000
31992164
01142020
Normal
2019 Time-Based RSU Retirement
Taxes
Garrett James
- 0
230000
31989864
01142020
Normal
Option Exercise
Burris Kevin
100000
- 0
31990864
01292020
Normal
Option Exercise
Carr Dustin
3212300
- 0
32022987
01272020
Normal
Option Exercise
Chen James
334000
- 0
32026327
02192020
Normal
Option Exercise
McPherson Daniel
534800
- 0
32031675
03122020
Normal
Option Exercise
Haber Todd
2500000
- 0
32056675
03122020
Normal
Option Exercise
Graver Thomas
4558100
- 0
32102256
03122020
Normal
Option Exercise
Baez Michael
911200
- 0
32111368
03062020
Normal
Option Exercise
Farooqui Salvan
1500000
- 0
32126368
05122020
Normal
Option Exercise
Baez Michael
950000
- 0
32135868
05142020
Normal
Option Exercise
Haber Todd
4300000
- 0
32178868
05142020
Normal
Option Exercise
Graver Thomas
4746100
- 0
32226329
05112020
Normal
Annual Equity Grant Vesting-BoD
Pastor Don
580000
- 0
32232129
05112020
Normal
Annual Equity Grant Vesting-BoD
Williamson John
580000
- 0
32237929
06012020
Normal
Deferred Stock Issuance-BoD
Wise Mike
980900
- 0
32247738
06012020
Normal
Deferred Stock Issuance-BoD
Williamson John
3756800
32285306
06112020
Normal
Option Exercise
Wise Mike
24000000
32525306
06112020
Normal
Retirement - Vested Stock
Exer Options
Wise Mike
6153000
32463776
06082020
Normal
Option Exercise
Pruzan Michael
400000
32467776
06292020
Normal
Option Exercise
Farooqui Salvan
250000
32470276
Date Issued
Balance Outstanding
Number of Days
Weighted Avg
Treasury Shares Weighted Average
Year-to-Date
YTD
QTD
1120
31788896
182
31788896
Graeff July 2
115000
115000
1820
31908896
175
115385
Q2 2015
29925
29925
1820
31888896
175
(19231)
2014
22725
22725
11020
31948896
173
57033
2016 Mgmt buyback
73675
73675
11420
31955563
169
6191
2016 repurchase program
205500
205500
11420
31986230
169
28477
2017 Mgmt buyback
90900
90900
11420
31996897
169
9905
2017 BOD buyback
100000
100000
11420
32004564
169
7119
2017 repurchase program
433179
433179
11420
31995364
169
(8543)
2018 repurchase program
132450
132450
11420
31992164
169
(2971)
2018 Mgmt buyback
49751
49751
11420
31989864
169
(2136)
2019 Mgmt buyback
52733
52733
11420
31990864
169
929
2019 repurchase program
333953
333953
12920
32022987
154
27181
2020 Mgmt buyback
6337
12673
12720
32026327
156
2863
21920
32031675
133
3908
164612764
165246418
31220
32056675
111
15247
31220
32102256
111
27799
31220
32111368
111
5557
567659
3620
32126368
117
9643
Treasury on AST
567664
51220
32135868
50
2610
Diff
(5)
51420
32178868
48
11341
51420
32226329
48
12517
51120
32232129
51
1625
51120
32237929
51
1625
6120
32247738
30
1617
6120
32285306
30
6193
61120
32525306
20
26374
61120
32463776
20
(6762)
6820
32467776
23
505
62920
32470276
2
27
YTD Average Shares Outstanding
32130925
Quarter-to Date
112020
31788896
91
31788896
1820
31908896
91
120000
1820
31888896
91
(20000)
11020
31948896
91
60000
11420
31955563
91
6667
11420
31986230
91
30667
11420
31996897
91
10667
11420
32004564
91
7667
11420
31995364
91
(9200)
11420
31992164
91
(3200)
11420
31989864
91
(2300)
11420
31990864
91
1000
12920
32022987
91
32123
12720
32026327
91
3340
21920
32031675
91
5348
31220
32056675
91
25000
31220
32102256
91
45581
31220
32111368
91
9112
3620
32126368
91
15000
51220
32135868
50
5220
51420
32178868
48
22681
51420
32226329
48
25034
51120
32232129
51
3251
51120
32237929
51
3251
6120
32247738
30
3234
6120
32285306
30
12385
61120
32525306
20
52747
61120
32463776
20
(13523)
6820
32467776
23
1011
62920
32470276
2
55
QTD Average Shares Outstanding
32241713
C1
TA to the Summary tab
C2
TA to the Avg Stock Price tab
C3
TA to the Options Outstanding YTD tab
C4
TA to the Equity Rollforward WP
C5
TA to the AST Report in the Equity Rollfoward WP
C6
TA to the Options Outstanding QTD tab
C7
Custom 7
C8
See comment box
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
6
Compelling business model with strong growth potential
temperature acceleration displacement and pressure
Focus on structural health and security
bull Buildings tunnels bridges
bull Perimeter security
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
13
Sensing Material thickness
Product Terahertz technology
Layer thickness measurements for process control inspection and non-destructive testing Advanced technology measures thickness of
opaque materials Unique measurement of composites and
coatings with easy to use hand-held tools Focus on manufacturing environments and
field test for military-aerospacebull Plastic and industrial packagingbull Used extensively on F35 and F22 for
anti-radar surface treatment
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
14
Comms Test
Increased data and video consumption Video forecasted to represent 82 of all
IP traffic in 2022 34 CAGR
Growth in mobile and 4G5G Mobile data traffic growing at 46 CAGR
Cloud services and adoption of Internet of Things Data center traffic growing at 26 CAGR 285 billion IoT networked devices by
2022
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
15
Comms Test Components
Product Optical Vector Analyzer (OVA)
Ensuring speed at the chip level
Unprecedented visibility inside devices ˗you canrsquot fix what you canrsquot see
Reduces time and cost associated with the development of high-speed optical components
Focus on enabling the carriers to move to 5G networks
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
16
Comms Test Short-haul network
Product Optical Backscatter Reflectometer (OBR)
Bandwidth demands continue to drive double-digit connectivity growth
Delivers unprecedented visibility into short-haul networks
Emerging market for on-board aircraft communications
Ensuring network ldquoup timerdquo on Lockheed Martinrsquos F-35
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
17
Luna Labs
Work with universities and government research labs to explore technological feasibility with a goal toward proof of concept
Collaborate with prime contractors government offices and federally-funded RampD centers
Work with contract manufacturers suppliers licensees and distributors to develop everything from small-scale prototypes up to and including market-ready products
Based in Charlottesville VA
2Q FY20 Results
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
19
Second-quarter 2020 Key Financial Results
Solid financial performance
$06M improvement in Adjusted EBITDA1 year-over-year
Total revenues of $186M up 4 year-over-year
Lightwave revenue of $129M up 3 year-over-year
Luna Labs revenue of $56M up 7 year-over-year
Operating income improved to $18M or 10 of total revenues in Q2 2020 from $10M or 6 of total revenues in Q2 2019 due to increased revenue and gross profit as well as improved operating expense leverage
Net income of $14M or $004 per fully diluted share for the three months ended June 30 2020 compared to $08M or $002 per fully diluted share for the three months ended June 30 2019
Adjusted EBITDA1 increased to $30M for the three months ended June 30 2020 compared to $24M for the three months ended June 30 2019
Reaffirmed 2020 outlook tighten range to $81 to $83M in total revenues
1Adj EBITDA is a non-GAAP measure Reconciliation of comparable GAAP measures to non-GAAP measures are included in the appendix to this presentation
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
20
Second-quarter 2020 and Other Recent Accomplishments
Reported solid second-quarter 2020 financial results in challenging COVID environment
Held 6 customer-facing technology educational webinars ~1000 live attendees and more than 1200 leads
Hosted worldwide virtual sales meeting with 47 attendees
Participated in virtual trade shows
Continued to monitor employee feedback with a focus on safety and well-being
Successful implementation of Employee Stock Purchase Plan with approximately 60 participation
Held successful Virtual Annual Shareholder Meeting in May
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
21
($20)
$03
$95
FY16 FY17 FY18 FY19 FY20
Adjusted EBITDA1 2
(millions)
$31
$296 $331
$429
$705
FY16 FY17 FY18 FY19 FY20
Revenue1
(millions)
$357
Strong Financial Results
1 Based on managementrsquos estimates of the impact from the divestiture of Optoelectronics Includes the acquisitions of Micron Optics and General Photonics2Adj EBITDA is a non-GAAP measure Reconciliation of comparable GAAP measures to non-GAAP measures are included in the appendix to this presentation
FY20 Guidance$810 - $830
FY20 Guidance $100 to $120
$45
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
22
A Flexible Balance Sheet and Strong Cash Position
Strong balance sheet on June 30 2020
$912M in total assets
bull $265M in cash and cash equivalents
bull $448M in working capital
Access to $10M revolving credit facility if needed
Continued focus on working capital and reinvestment in business in order to generate long-term sustainable growth
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
23
2020 Financial Outlook
Maintaining FY2020 outlook tightening our range
Total revenues of $81M to $83M
Adjusted EBITDA1 of $10M to $12M
1 Adj EBITDA is a non-GAAP measure Reconciliation of comparable GAAP measures to non-GAAP measures are included in the appendix to this presentation The outlook above does not include any future acquisitions divestitures or unanticipated events
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
24
Luna ndash Enabling the Future with Fiber
Proprietary measurement technology offering unprecedented combination of resolution accuracy and speed
Customers in attractive markets Military and Defense Communications Infrastructure Energy and Automotive
Positioned to take advantage of trends such as vehicle light-weighting and increasing demands on data centers and broadband capacity
Adequately capitalized to fund growth
Long-tenured experienced executive team board
Corporate culture of innovation and integrity
Overview
Appendix
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
26
Reconciliation of Net Income to Adjusted EBITDA
(1) Non-recurring charges consist of transaction-related expenses related to the acquisition of General Photonics
2020 2019 2020 2019
Reconciliation of EBITDA and Adjusted EBITDANet income 1369$ 841$ 253$ 1967$ Loss from discontinued operations net of income tax benefit of $464 - - 1436 -
Net income from continuing operations 1369 841 1689 1967 Interest expense 1 - 1 13 Investment income (4) (77) (64) (268) Income tax expense(benefit) 441 247 579 (1618) Depreciation and amortization 684 653 1363 1166
Reconciliation of Net Income to Adjusted EBITDA Full Year
(1) Non-recurring charges include the following 2017) CEO separation costs and other share-based compensation 2018) Transaction-related expenses associated with the acquisition of Micron Optics Inc 2019) Transaction related expenses and inventory step-up amortization relate to General Photonics acquisition and CFO transition expenses
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
28
New Segment Quarterly Results (in thousands)
March 31 2019 June 30 2019 Sep 30 2019 A Dec 31 2019 March 31 2020 June 30 2020
Total revenues 14833 17814 18389 19480 17141 18576
Cost of revenuesLightwave 4280 5334 5449 5070 4885 5181 Luna Labs 3785 3728 3665 4022 3892 3878
Total cost of revenues 8065 9062 9114 9092 8777 9059
Gross Profit 6768 8752 9275 10388 8364 9517
Operating expenseSelling general and administrative 6207 6003 5745 6416 6377 6202 Research development and engineering 1458 1735 2048 2255 1597 1505
Total operating expense 7665 7738 7793 8671 7974 7707
Operating income (897)$ 1014$ 1482$ 1717$ 390$ 1810$
A The Company revised its results for the three months ended September 30 2019 The Company has concluded these adjustments are not material individually or in the aggregate
Three Months Ended
Scott A Graeff President and CEO
Safe Harbor
Luna ndash Enabling the Future with Fiber
Luna is a global company
Luna has a clear vision and established history
Compelling business model with strong growth potential
Lightwave 2019 revenue1 snapshot
Luna Overview
Where Does Luna Play
Sensing
Sensing Short-range high-resolution
Sensing long-range high-speed
Sensing Material thickness
Comms Test
Comms Test Components
Comms Test Short-haul network
Luna Labs
2Q FY20 Results
Second-quarter 2020 Key Financial Results
Second-quarter 2020 and Other Recent Accomplishments
Slide Number 21
A Flexible Balance Sheet and Strong Cash Position
2020 Financial Outlook
Luna ndash Enabling the Future with Fiber
Appendix
Reconciliation of Net Income to Adjusted EBITDA
Reconciliation of Net Income to Adjusted EBITDA Full Year
New Segment Quarterly Results
(in thousands)
Three Months Ended
December 31 2018
A
March 31 2019
C
June 30 2019
September 30 2019
December 31 2019
March 31 2020
June 30 2020
Revenues
Lightwave
$ 11345
$ 10221
$ 12523
$ 13120
$ 13988
$ 11554
12933
Luna Labs
5548
6641
5291
5301
5492
5587
5642
Total revenues
16893
16862
17814
18421
19480
17141
18576
Cost of revenues
Lightwave
4002
3836
5334
5471
5070
4885
5181
Luna Labs
4268
4816
3728
3665
4022
3892
3878
Total cost of revenues
8270
8652
9062
9136
9092
8777
9059
Gross Profit
8623
8210
8752
9285
10388
8364
9517
Operating expense
Selling general and administrative
6394
7165
6003
5754
6415
6377
6202
Research development and engineering
1894
1708
1735
2047
2255
1597
1505
Total operating expense
8288
8873
7738
7801
8670
7974
7707
Operating income
$ 335
$ (663)
$ 1014
$ 1484
$ 1718
$ 390
$ 1810
Historical - Hidden
A
Includes $751000 of costs associated with the acquisition of Micron Optics
B
Unaudited pro forma financials assumes the General Photonics business was acquired on January 1 2019
C
Includes $898000 of costs associated with the acquisition of General Photonics
Year Ended December 31
(unaudited)
2016
2017
2018
2019
Reconciliation of EBITDA and Adjusted EBITDA
Net (loss)income
$ (2370)
$ 14615
$ 11004
$ 5343
Less income from discontinued operations net of income taxes
300
15866
9766
- 0
Loss from discontinued operations net of income tax benefit of $464
- 0
- 0
- 0
- 0
Net income from continuing operations
(2670)
(1251)
1238
5343
Interest expense
319
217
124
16
Investment income
- 0
- 0
(549)
(394)
Income tax (benefit)expense
(135)
(1148)
48
(1654)
Depreciation and amortization
1466
1137
908
2503
EBITDA
(1020)
(1045)
1769
5814
Share-based compensation
860
715
628
1544
Non-Recurring Charges (1)
- 0
596
751
1390
Amortization of Inventory Step-up
- 0
- 0
- 0
725
Adjusted EBITDA
$ (160)
$ 266
$ 3148
$ 9473
1
Non-recurring charges include the following 2017) CEO separation costs and other share-based compensation 2018) Transaction-related expenses associated with the acquisition of Micron Optics Inc 2019) Transaction related expenses and inventory step-up amortization relate to General Photonics acquisition and CFO transition expenses
Luna Innovations Incorporated
Reconciliation of Non-GAAP Financial Measures
(in thousands)
Three Months Ended
Six Months Ended
June 30
June 30
2020
2019
2020
2019
(Unaudited)
(Unaudited)
Reconciliation of EBITDA and Adjusted EBITDA
Net income
$ 1369
$ - 0
$ 841
$ 253
$ - 0
$ 1967
Loss from discontinued operations net of income tax benefit of $464
- 0
- 0
- 0
1436
- 0
- 0
Gain on sale of asset
- 0
- 0
- 0
- 0
- 0
- 0
Net income from continuing operations
1369
- 0
841
1689
- 0
1967
Interest expense
1
- 0
- 0
1
- 0
13
Investment income
(4)
- 0
(77)
(64)
- 0
(268)
Income tax expense(benefit)
441
- 0
247
579
- 0
(1618)
Depreciation and amortization
684
- 0
653
1363
- 0
1166
EBITDA
2490
- 0
1664
3568
- 0
1260
Share-based compensation
465
- 0
378
967
- 0
721
Non-Recurring Charges (1)
- 0
- 0
44
- 0
- 0
942
CFO Recruiting and Severance
- 0
- 0
- 0
- 0
- 0
- 0
Amortization of Inventory Step-up
- 0
- 0
310
- 0
- 0
412
- 0
- 0
- 0
- 0
- 0
- 0
Adjusted EBITDA
$ 2955
$ - 0
$ 2396
$ 4535
$ - 0
$ 3335
EBITDA Margin Percent on Total Revenues
134
93
100
39
Adjusted EBITDA Margin Percent on Total Revenues
159
134
127
102
Reconciliation of Non-GAAP EPS
Diluted EPS
$ 004
$ 002
$ 001
$ 005
Loss from discontinued operations net of income taxes
Existing Technology amortization missed from 101518-63019
- 0
15560
Amortization catch up from 101518-63019 in July 2019 only
In-process RampD
200000
0
- 0
1650000
4091764
Micron Purchase Amortization Detail - 812019 and forward
Trade Name
150000
36
4167
Customer Relationships
100000
84
1190
Existing Technology
1200000
60
20000
Amortization going forward
In-process RampD
200000
0
- 0
1650000
2535714
General Pho Purchase Amortization Detail - 312019
Trade Name
400000
36
11111
22822
Customer Relationships
600000
180
3333
22834
Existing Technology
7200000
96
75000
22827
In-process RampD
- 0
0
- 0
8200000
8944444
General Pho Inventory Step-up Amortization - 312019
WIP amp Fin Goods
724760
7
103537
Ends 93019
PampL Summary - Luna Innovations
For the Three Months Ending March 31 2020
QTD
QTD
QTD
YTD
YTD
YTD
Actual
Budget
Variance
Actual
Budget
Variance
fav(un-fav)
fav(un-fav)
Revenues
Lightwave
12933344
13366455
(433536)
24487335
25564000
(1077090)
686
Luna Labs
5642348
6075202
(432854)
11229350
11675307
(445957)
314
Total Revenues
18575692
19441657
(866390)
35716685
37239307
(1523047)
Cost of Revenues
Product and Licensing
5181057
5789978
608921
10066386
11082697
1016311
282
TDD
3877888
4448571
570683
7769627
8526736
757109
218
Total Cost of Revenues
9058945
10238549
570683
17836013
19609433
1773420
499
Gross Margin
Product and Licensing - $
7752287
7576477
175810
14420949
14481303
(60354)
Product and Licensing -
60
57
3
59
57
2
TDD - $
1764460
1626631
137829
3459723
3148571
311152
TDD -
31
27
4
31
27
4
Total Gross Margin
9516747
9203108
313639
17880672
17629874
250798
Gross Margin
51
47
4
50
47
3
501
Operating Expenses
Selling General amp Admin
6202338
8155800
1953888
12578977
14477853
1899301
Research Devel amp Engineering
1504800
647122
(857678)
3101865
2798808
(303057)
Total Operating Expenses
7707138
8802922
1096209
15680842
17276661
1595819
439
Operating Income (Loss)
1809609
400186
1409423
2199830
353213
1846617
62
Other Expense (Income)
Interest
930
985
55
1145
2195
1050
00
Investment Income
(4435)
(75000)
(70565)
(63790)
(150000)
(86210)
-02
Tax Expense
440626
118551
(498831)
579203
125253
(630706)
16
Tax Benefit from release of VA
-
-
-
-
-
-
00
Gainloss on foreigh exch
-
-
-
-
-
-
00
Other
3649
-
(3649)
(5236)
-
5236
-00
440770
44536
(396234)
511322
(22552)
(533874)
14
Income from continuing operations
1368839
355650
1805658
1688508
375765
2380491
Income from Disc Ops
Operating Income from Disc Ops
-
-
- 0
-
-
- 0
Gainloss of Asset Sale
-
-
- 0
(1435903)
-
(1435903)
Total Income from Disc Ops
- 0
- 0
- 0
(1435903)
- 0
(1435903)
Net Income (Loss)
1368839
355650
1013189
252605
375765
(123160)
07
Dividend on Preferred
- 0
- 0
- 0
- 0
- 0
- 0
Net Income (Loss) available to Common Shareholders
1368839
355650
1013189
252605
375765
(123160)
07
Depreciation
244214
491046
From Cash Flow
Amortization
439787
872410
From Cash Flow
Stock Compensation
465109
966932
From Cash Flow
Acquisition Costs
- 0
- 0
Amortization of Inventory Step-up
- 0
- 0
CFO Recruiting amp Severance
- 0
- 0
Treasury Stock Activity
63020
Stock Buyback - Held with Northland
Trade date
Settlement Date
of Shares
Avg Price
Commission
Trade date Total $
Number of Days
Weighted Avg
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
= Trades Not Settled
$000
$000
$000
$000
YTD Avg
0
0
Trade date
Settlement Date
of Shares
Avg Price
Commission
Trade date Total $
Number of Days
Weighted Avg
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
QTD Avg
0
0
0
0
2016 Amounts under program
205500
$24880840
$25086340
2017 Amounts under program
433179
$75649353
$76082532
2018 Amounts under program
132450
$30604099
$30736549
2019 Amounts under program
333953
$198663889
$199999701
Total
110508200
329798181
331905122
For Q Disclosure
Management Buyback - Held with AST
Date
Shares
YTD days os
YTD weighted avg
QTD days os
QTD Weighted Avg
Month
Quarter
Year
52720
Garrett James
6500
35
1250
35
2500
Jan
31
- 0
- 0
52720
Graeff Scott
17450
35
3356
35
6712
Feb
29
- 0
- 0
52720
Soller Brian
9000
35
1731
35
3462
Mar
31
91
91
44013
- 0
91
- 0
Apr
30
- 0
- 0
44013
- 0
91
- 0
May
31
- 0
- 0
44013
- 0
91
- 0
Jun
30
91
182
44013
- 0
91
- 0
Jul
31
- 0
- 0
44013
- 0
91
- 0
Aug
31
- 0
- 0
44013
- 0
91
- 0
Sept
30
92
274
- 0
- 0
Oct
31
- 0
- 0
- 0
- 0
Nov
30
- 0
- 0
- 0
- 0
Dec
31
92
366
32950
6337
12673
BOD buyback
YTD
$000
$000
44013
- 0
Qtr
$000
$000
44013
- 0
Luna
Date
CloseLast
1220
738
Average Close Price
1320
718
Year-To-Date
$ 696
1620
73
Quarter-To-Date
$ 652
1720
735
1820
756
1920
777
11020
787
11320
803
11420
804
11520
832
11620
85
11720
845
12120
827
12220
833
12320
849
12420
844
12720
828
12820
856
12920
85
13020
846
13120
819
2320
825
2420
821
2520
82
2620
819
2720
837
21020
85
21120
858
21220
904
21320
895
21420
897
21820
891
21920
891
22020
907
22120
923
22420
861
22520
745
22620
759
22720
707
22820
67
3220
713
3320
693
3420
719
3520
689
3620
75
3920
672
31020
66
31120
599
31220
521
31320
522
31620
491
31720
553
31820
473
31920
487
32020
48
32320
509
32420
543
32520
582
32620
617
32720
583
33020
623
33120
615
4120
585
4220
583
4320
572
4620
607
4720
605
4820
631
4920
665
41320
656
41420
683
41520
711
41620
734
41720
727
42020
73
42120
672
42220
683
42320
691
42420
715
42720
721
42820
74
42920
777
43020
763
5120
724
5420
751
5520
762
5620
76
5720
749
5820
782
51120
704
51220
705
51320
62
51420
578
51520
537
51820
591
51920
625
52020
61
52120
6
52220
609
52620
615
52720
62
52820
609
52920
61
6120
629
6220
628
6320
653
6420
649
6520
663
6820
667
6920
635
61020
643
61120
583
61220
606
61520
625
61620
631
61720
615
61820
599
61920
601
62220
616
62320
624
62420
615
62520
615
62620
571
62920
585
63020
584
Qtr
1
2
3
4
Options
Options
Aggregate Strike Price
Intrinsic Value
Outstanding
Exercisable
Outstanding
Exercisable
Outstanding
Exercisable
Luna
2418245
1309606
$6482283
$2709686
7767068
4952824
2418245
1309606
6482283
2709686
7767068
4952824
Warrants Aaron Chase Aaron ChaseCarilion exercised all warrants in Q2 and Q3 2018
0
0
0
0
2418245
1309606
6482283
2709686
Average Strike Price
$ 268
$ 207
Pull Cancelled for whole year
Cancels
Q1
35659 Aaron Chase Aaron Chase22999 of canceled shares didnrsquot show up until Q2-20 report
Aaron Chase Aaron ChaseCarilion exercised all warrants in Q2 and Q3 2018
$ 364
12990180
Outstanding 12312019
3160397
Q2
13124
$ 211
2769912
Q3
- 0
ERRORDIV0
- 0
Grants
20000
Q4
- 0
ERRORDIV0
- 0
Exercised
(662965)
48783
$ 323
15760092
Canceled
(48783)
Corrected Termed EEs from 2019
(50404)
These were corrected in June 2020
2418245
Remaining life
Options
Avg Life
- 0
Outstanding
Luna
2418245
644
Exercisable
1309606
474
Remaining service
Luna
2418245
See awards outstanding by grant price range report and Disclosure report for information on this tab
Luna Innovations
Additional Notes
EPS Calculations
During Jan-2019 and 2020 Management was awarded Performance Based Grants and Time Based Grants
63020
The Performance Based Grants vest after 3 years and are issued only if the performance is achieved
The Time Based Grants vest each year for 3 years Grants are issued once vested each year
Yearly BOD Grants
Basic EPS
DSU deferred stock units vest in a year but do not become issued until the Director leaves the Board This started in 2018
Net Income (loss) Per Share from Continuing Operations
YTD
Diluted
QTD
Diluted
DSU awards vest in May 2021 and will be added to the middle section of the EPS in May 2021
Net Income from Continuing Operations
1688508
1368839
Rich Roedel
8877
704
62500
Common Shares Outstanding
30484797
30589249
Barry Phelps
5326
704
37500
$ 006
$ 005
$ 004
$ 004
Leigh Anderson
5326
704
37500
Mary Beth Vitale
5326
704
37500
Net income (loss) Per Share attributable to common shareholders
RSU restricted stock units vest and are issued in a year and will be added to the bottom of the EPS in May 2021
Net Income (Loss) available to Shareholders
252605
1368839
Don Pastor
5326
704
37500
Common Shares Outstanding
30484797
30589249
Gary Spiegel
5326
704
37500
$ 001
$ 001
$ 004
$ 004
Net income (loss) Per Share from Discontinued Operations
Net Income from Discontinued Operations
(1435903)
- 0
Common Shares Outstanding
30484797
30589249
$ (005)
$ (004)
$ - 0
$ - 0
Diluted EPS
Net Income(Loss) available to SHs
252605
1368839
Common Shares Outstanding
30484797
30589249
Common Stock Equivalent
2010153
1876873
$ 001
- 0 Grant Thornton LLP Grant Thornton LLPAs earnings from continuing operations are negative (loss) basic and diluted EPS equal one another
$ 004 Grant Thornton LLP Grant Thornton LLPAs earnings from continuing operations are negative (loss) basic and diluted EPS equal one another
- 0 Grant Thornton LLP Grant Thornton LLPAs earnings from continuing operations are negative (loss) basic and diluted EPS equal one another
Non-GAAP Diluted EPS
Net income (loss) Per Share attributable to common shareholders
Net Income (Loss) available to Shareholders
252605
1368839
Loss from discontinued operations
1435903
- 0
Share-based compensation
966932
465109
Amortization of acquired intangibles
344405
688810
Acquisition related costs
- 0
- 0
Amortization of Inventory Step-up
- 0
- 0
Common Shares Outstanding
30484797
30589249
Common Stock Equivalent
2010153
1876873
$ 009
$ 008
YTD
QTD
Total issued shares
32470276
Average Close Price
$ 696
$ 652
Total treasury
1672741
Shares Outstanding
30797535
Net change in denominator
1404924 Kelly Bewick Aaron Chasesee Dilution (stock option) dilutive tab
1264984
BOD fees paid in DSUs Aaron Chase Aaron ChaseFrom Equity Award Transactions Report
Month
Quarter
Year
Balance at 112019 - DSU outstanding
591457
591457
Jan
31
Issued during Q1 2020
7114
7114
Feb
29
Issued during Q2 2020
3947
7894
Mar
31
91
91
Annual grant DSU vested 5112020
10521 KBSResults KBSResultsEnter 2019 DSU annual grant when vest in 2020 (probably May) you do not need to enter annual RSU because it will be issued in AST
21042
Apr
30
Deferred Equity Issuance 6012020
(7809) KBSResults Aaron ChaseM Wise and J Williamson retired from the BoD in May 2020 Wise Deferred Comp will be issued every June 1 for 10 years Williamson Deferred Comp will be issued every June 1 for 5 years
Grant Thornton LLP Grant Thornton LLPAs earnings from continuing operations are negative (loss) basic and diluted EPS equal one another
Grant Thornton LLP Grant Thornton LLPAs earnings from continuing operations are negative (loss) basic and diluted EPS equal one another
(15619)
May
31
Issued during Q3 2020
- 0
- 0
Jun
30
91
182
Issued during Q4 2020
- 0
- 0
Jul
31
Aug
31
Sept
30
92
274
Oct
31
Totals (Antidilutive)
2010153
1876873
Nov
30
Dec
31
92
366
Shares Outstanding as of 112020
31788896
As Of Date
Transaction
Reason
Name
Shares Issued
Shares Retired
Running Total
01012020
Normal
Balance Roll Forward
- 0
- 0
31788896
01082020
Normal
Option Exercise
Williamson John
12000000
- 0
31908896
01082020
Normal
Retirement - Vested Restriced Stock
Exer Options
Williamson John
- 0
2000000
31888896
01102020
Normal
Option Exercise
Roedel Rich
6000000
- 0
31948896
01142020
Normal
2019 Time-Based RSU Vesting
Messick Dale
666700
- 0
31955563
01142020
Normal
2019 Time-Based RSU Vesting
Graeff Scott
3066700
- 0
31986230
01142020
Normal
2019 Time-Based RSU Vesting
Soller Brian
1066700
- 0
31996897
01142020
Normal
2019 Time-Based RSU Vesting
Garrett James
766700
- 0
32004564
01142020
Normal
2019 Time-Based RSU Retirement
Taxes
Graeff Scott
- 0
920000
31995364
01142020
Normal
2019 Time-Based RSU Retirement
Taxes
Soller Brian
- 0
320000
31992164
01142020
Normal
2019 Time-Based RSU Retirement
Taxes
Garrett James
- 0
230000
31989864
01142020
Normal
Option Exercise
Burris Kevin
100000
- 0
31990864
01292020
Normal
Option Exercise
Carr Dustin
3212300
- 0
32022987
01272020
Normal
Option Exercise
Chen James
334000
- 0
32026327
02192020
Normal
Option Exercise
McPherson Daniel
534800
- 0
32031675
03122020
Normal
Option Exercise
Haber Todd
2500000
- 0
32056675
03122020
Normal
Option Exercise
Graver Thomas
4558100
- 0
32102256
03122020
Normal
Option Exercise
Baez Michael
911200
- 0
32111368
03062020
Normal
Option Exercise
Farooqui Salvan
1500000
- 0
32126368
05122020
Normal
Option Exercise
Baez Michael
950000
- 0
32135868
05142020
Normal
Option Exercise
Haber Todd
4300000
- 0
32178868
05142020
Normal
Option Exercise
Graver Thomas
4746100
- 0
32226329
05112020
Normal
Annual Equity Grant Vesting-BoD
Pastor Don
580000
- 0
32232129
05112020
Normal
Annual Equity Grant Vesting-BoD
Williamson John
580000
- 0
32237929
06012020
Normal
Deferred Stock Issuance-BoD
Wise Mike
980900
- 0
32247738
06012020
Normal
Deferred Stock Issuance-BoD
Williamson John
3756800
32285306
06112020
Normal
Option Exercise
Wise Mike
24000000
32525306
06112020
Normal
Retirement - Vested Stock
Exer Options
Wise Mike
6153000
32463776
06082020
Normal
Option Exercise
Pruzan Michael
400000
32467776
06292020
Normal
Option Exercise
Farooqui Salvan
250000
32470276
Date Issued
Balance Outstanding
Number of Days
Weighted Avg
Treasury Shares Weighted Average
Year-to-Date
YTD
QTD
1120
31788896
182
31788896
Graeff July 2
115000
115000
1820
31908896
175
115385
Q2 2015
29925
29925
1820
31888896
175
(19231)
2014
22725
22725
11020
31948896
173
57033
2016 Mgmt buyback
73675
73675
11420
31955563
169
6191
2016 repurchase program
205500
205500
11420
31986230
169
28477
2017 Mgmt buyback
90900
90900
11420
31996897
169
9905
2017 BOD buyback
100000
100000
11420
32004564
169
7119
2017 repurchase program
433179
433179
11420
31995364
169
(8543)
2018 repurchase program
132450
132450
11420
31992164
169
(2971)
2018 Mgmt buyback
49751
49751
11420
31989864
169
(2136)
2019 Mgmt buyback
52733
52733
11420
31990864
169
929
2019 repurchase program
333953
333953
12920
32022987
154
27181
2020 Mgmt buyback
6337
12673
12720
32026327
156
2863
21920
32031675
133
3908
164612764
165246418
31220
32056675
111
15247
31220
32102256
111
27799
31220
32111368
111
5557
567659
3620
32126368
117
9643
Treasury on AST
567664
51220
32135868
50
2610
Diff
(5)
51420
32178868
48
11341
51420
32226329
48
12517
51120
32232129
51
1625
51120
32237929
51
1625
6120
32247738
30
1617
6120
32285306
30
6193
61120
32525306
20
26374
61120
32463776
20
(6762)
6820
32467776
23
505
62920
32470276
2
27
YTD Average Shares Outstanding
32130925
Quarter-to Date
112020
31788896
91
31788896
1820
31908896
91
120000
1820
31888896
91
(20000)
11020
31948896
91
60000
11420
31955563
91
6667
11420
31986230
91
30667
11420
31996897
91
10667
11420
32004564
91
7667
11420
31995364
91
(9200)
11420
31992164
91
(3200)
11420
31989864
91
(2300)
11420
31990864
91
1000
12920
32022987
91
32123
12720
32026327
91
3340
21920
32031675
91
5348
31220
32056675
91
25000
31220
32102256
91
45581
31220
32111368
91
9112
3620
32126368
91
15000
51220
32135868
50
5220
51420
32178868
48
22681
51420
32226329
48
25034
51120
32232129
51
3251
51120
32237929
51
3251
6120
32247738
30
3234
6120
32285306
30
12385
61120
32525306
20
52747
61120
32463776
20
(13523)
6820
32467776
23
1011
62920
32470276
2
55
QTD Average Shares Outstanding
32241713
C1
TA to the Summary tab
C2
TA to the Avg Stock Price tab
C3
TA to the Options Outstanding YTD tab
C4
TA to the Equity Rollforward WP
C5
TA to the AST Report in the Equity Rollfoward WP
C6
TA to the Options Outstanding QTD tab
C7
Custom 7
C8
See comment box
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
7
Lightwave 2019 revenue1 snapshot
Global FootprintTwo Target VerticalsFour Locations
40
25
24
11
Blacksburg Atlanta
Chino Ann Arbor
5050
Sensing Comms Test
18
54
28
EMEA Americas Asia Pac
1Lightwave product revenues for FY 2019
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
8
Luna Overview
Comms Test Components
Short-haul network
Contract Research Materials
Systems amp Analytics
Health Sciences
Sensing Short-range high resolution
Long-range high speed
Material thickness
Lightwave Luna Labs
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
9
Where Does Luna Play
Comms Test5G BuildoutField Support
Comms Test Sensing
Market size $900M $16B
Luna growth 15-20 20-25
Drivers5G
Silicon PhotonicsLightweighting Smart
Infrastructure IoT
Key competition
Keysight Viavi Exfo
HBM Vishay National Instruments
Total SAM based on Luna estimates and published market reports
Market$25B
SensingSmart InfrastructureLightweightingProcess control amp NDE
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
10
Sensing
Fiber optic sensors are the ldquonervesrdquo of smart materials
Lunarsquos products are the ldquobrainrdquo that collects and aggregates data from fiber sensor ldquonervesrdquo
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
11
Sensing Short-range high-resolution
Product ODiSI
High-Definition Fiber Optic Sensing Measuring strain and
temperature in composites and other advanced materials
Focus on military and commercial aerospace and automotive
temperature acceleration displacement and pressure
Focus on structural health and security
bull Buildings tunnels bridges
bull Perimeter security
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
13
Sensing Material thickness
Product Terahertz technology
Layer thickness measurements for process control inspection and non-destructive testing Advanced technology measures thickness of
opaque materials Unique measurement of composites and
coatings with easy to use hand-held tools Focus on manufacturing environments and
field test for military-aerospacebull Plastic and industrial packagingbull Used extensively on F35 and F22 for
anti-radar surface treatment
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
14
Comms Test
Increased data and video consumption Video forecasted to represent 82 of all
IP traffic in 2022 34 CAGR
Growth in mobile and 4G5G Mobile data traffic growing at 46 CAGR
Cloud services and adoption of Internet of Things Data center traffic growing at 26 CAGR 285 billion IoT networked devices by
2022
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
15
Comms Test Components
Product Optical Vector Analyzer (OVA)
Ensuring speed at the chip level
Unprecedented visibility inside devices ˗you canrsquot fix what you canrsquot see
Reduces time and cost associated with the development of high-speed optical components
Focus on enabling the carriers to move to 5G networks
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
16
Comms Test Short-haul network
Product Optical Backscatter Reflectometer (OBR)
Bandwidth demands continue to drive double-digit connectivity growth
Delivers unprecedented visibility into short-haul networks
Emerging market for on-board aircraft communications
Ensuring network ldquoup timerdquo on Lockheed Martinrsquos F-35
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
17
Luna Labs
Work with universities and government research labs to explore technological feasibility with a goal toward proof of concept
Collaborate with prime contractors government offices and federally-funded RampD centers
Work with contract manufacturers suppliers licensees and distributors to develop everything from small-scale prototypes up to and including market-ready products
Based in Charlottesville VA
2Q FY20 Results
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
19
Second-quarter 2020 Key Financial Results
Solid financial performance
$06M improvement in Adjusted EBITDA1 year-over-year
Total revenues of $186M up 4 year-over-year
Lightwave revenue of $129M up 3 year-over-year
Luna Labs revenue of $56M up 7 year-over-year
Operating income improved to $18M or 10 of total revenues in Q2 2020 from $10M or 6 of total revenues in Q2 2019 due to increased revenue and gross profit as well as improved operating expense leverage
Net income of $14M or $004 per fully diluted share for the three months ended June 30 2020 compared to $08M or $002 per fully diluted share for the three months ended June 30 2019
Adjusted EBITDA1 increased to $30M for the three months ended June 30 2020 compared to $24M for the three months ended June 30 2019
Reaffirmed 2020 outlook tighten range to $81 to $83M in total revenues
1Adj EBITDA is a non-GAAP measure Reconciliation of comparable GAAP measures to non-GAAP measures are included in the appendix to this presentation
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
20
Second-quarter 2020 and Other Recent Accomplishments
Reported solid second-quarter 2020 financial results in challenging COVID environment
Held 6 customer-facing technology educational webinars ~1000 live attendees and more than 1200 leads
Hosted worldwide virtual sales meeting with 47 attendees
Participated in virtual trade shows
Continued to monitor employee feedback with a focus on safety and well-being
Successful implementation of Employee Stock Purchase Plan with approximately 60 participation
Held successful Virtual Annual Shareholder Meeting in May
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
21
($20)
$03
$95
FY16 FY17 FY18 FY19 FY20
Adjusted EBITDA1 2
(millions)
$31
$296 $331
$429
$705
FY16 FY17 FY18 FY19 FY20
Revenue1
(millions)
$357
Strong Financial Results
1 Based on managementrsquos estimates of the impact from the divestiture of Optoelectronics Includes the acquisitions of Micron Optics and General Photonics2Adj EBITDA is a non-GAAP measure Reconciliation of comparable GAAP measures to non-GAAP measures are included in the appendix to this presentation
FY20 Guidance$810 - $830
FY20 Guidance $100 to $120
$45
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
22
A Flexible Balance Sheet and Strong Cash Position
Strong balance sheet on June 30 2020
$912M in total assets
bull $265M in cash and cash equivalents
bull $448M in working capital
Access to $10M revolving credit facility if needed
Continued focus on working capital and reinvestment in business in order to generate long-term sustainable growth
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
23
2020 Financial Outlook
Maintaining FY2020 outlook tightening our range
Total revenues of $81M to $83M
Adjusted EBITDA1 of $10M to $12M
1 Adj EBITDA is a non-GAAP measure Reconciliation of comparable GAAP measures to non-GAAP measures are included in the appendix to this presentation The outlook above does not include any future acquisitions divestitures or unanticipated events
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
24
Luna ndash Enabling the Future with Fiber
Proprietary measurement technology offering unprecedented combination of resolution accuracy and speed
Customers in attractive markets Military and Defense Communications Infrastructure Energy and Automotive
Positioned to take advantage of trends such as vehicle light-weighting and increasing demands on data centers and broadband capacity
Adequately capitalized to fund growth
Long-tenured experienced executive team board
Corporate culture of innovation and integrity
Overview
Appendix
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
26
Reconciliation of Net Income to Adjusted EBITDA
(1) Non-recurring charges consist of transaction-related expenses related to the acquisition of General Photonics
2020 2019 2020 2019
Reconciliation of EBITDA and Adjusted EBITDANet income 1369$ 841$ 253$ 1967$ Loss from discontinued operations net of income tax benefit of $464 - - 1436 -
Net income from continuing operations 1369 841 1689 1967 Interest expense 1 - 1 13 Investment income (4) (77) (64) (268) Income tax expense(benefit) 441 247 579 (1618) Depreciation and amortization 684 653 1363 1166
Reconciliation of Net Income to Adjusted EBITDA Full Year
(1) Non-recurring charges include the following 2017) CEO separation costs and other share-based compensation 2018) Transaction-related expenses associated with the acquisition of Micron Optics Inc 2019) Transaction related expenses and inventory step-up amortization relate to General Photonics acquisition and CFO transition expenses
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
28
New Segment Quarterly Results (in thousands)
March 31 2019 June 30 2019 Sep 30 2019 A Dec 31 2019 March 31 2020 June 30 2020
Total revenues 14833 17814 18389 19480 17141 18576
Cost of revenuesLightwave 4280 5334 5449 5070 4885 5181 Luna Labs 3785 3728 3665 4022 3892 3878
Total cost of revenues 8065 9062 9114 9092 8777 9059
Gross Profit 6768 8752 9275 10388 8364 9517
Operating expenseSelling general and administrative 6207 6003 5745 6416 6377 6202 Research development and engineering 1458 1735 2048 2255 1597 1505
Total operating expense 7665 7738 7793 8671 7974 7707
Operating income (897)$ 1014$ 1482$ 1717$ 390$ 1810$
A The Company revised its results for the three months ended September 30 2019 The Company has concluded these adjustments are not material individually or in the aggregate
Three Months Ended
Scott A Graeff President and CEO
Safe Harbor
Luna ndash Enabling the Future with Fiber
Luna is a global company
Luna has a clear vision and established history
Compelling business model with strong growth potential
Lightwave 2019 revenue1 snapshot
Luna Overview
Where Does Luna Play
Sensing
Sensing Short-range high-resolution
Sensing long-range high-speed
Sensing Material thickness
Comms Test
Comms Test Components
Comms Test Short-haul network
Luna Labs
2Q FY20 Results
Second-quarter 2020 Key Financial Results
Second-quarter 2020 and Other Recent Accomplishments
Slide Number 21
A Flexible Balance Sheet and Strong Cash Position
2020 Financial Outlook
Luna ndash Enabling the Future with Fiber
Appendix
Reconciliation of Net Income to Adjusted EBITDA
Reconciliation of Net Income to Adjusted EBITDA Full Year
New Segment Quarterly Results
(in thousands)
Three Months Ended
December 31 2018
A
March 31 2019
C
June 30 2019
September 30 2019
December 31 2019
March 31 2020
June 30 2020
Revenues
Lightwave
$ 11345
$ 10221
$ 12523
$ 13120
$ 13988
$ 11554
12933
Luna Labs
5548
6641
5291
5301
5492
5587
5642
Total revenues
16893
16862
17814
18421
19480
17141
18576
Cost of revenues
Lightwave
4002
3836
5334
5471
5070
4885
5181
Luna Labs
4268
4816
3728
3665
4022
3892
3878
Total cost of revenues
8270
8652
9062
9136
9092
8777
9059
Gross Profit
8623
8210
8752
9285
10388
8364
9517
Operating expense
Selling general and administrative
6394
7165
6003
5754
6415
6377
6202
Research development and engineering
1894
1708
1735
2047
2255
1597
1505
Total operating expense
8288
8873
7738
7801
8670
7974
7707
Operating income
$ 335
$ (663)
$ 1014
$ 1484
$ 1718
$ 390
$ 1810
Historical - Hidden
A
Includes $751000 of costs associated with the acquisition of Micron Optics
B
Unaudited pro forma financials assumes the General Photonics business was acquired on January 1 2019
C
Includes $898000 of costs associated with the acquisition of General Photonics
Year Ended December 31
(unaudited)
2016
2017
2018
2019
Reconciliation of EBITDA and Adjusted EBITDA
Net (loss)income
$ (2370)
$ 14615
$ 11004
$ 5343
Less income from discontinued operations net of income taxes
300
15866
9766
- 0
Loss from discontinued operations net of income tax benefit of $464
- 0
- 0
- 0
- 0
Net income from continuing operations
(2670)
(1251)
1238
5343
Interest expense
319
217
124
16
Investment income
- 0
- 0
(549)
(394)
Income tax (benefit)expense
(135)
(1148)
48
(1654)
Depreciation and amortization
1466
1137
908
2503
EBITDA
(1020)
(1045)
1769
5814
Share-based compensation
860
715
628
1544
Non-Recurring Charges (1)
- 0
596
751
1390
Amortization of Inventory Step-up
- 0
- 0
- 0
725
Adjusted EBITDA
$ (160)
$ 266
$ 3148
$ 9473
1
Non-recurring charges include the following 2017) CEO separation costs and other share-based compensation 2018) Transaction-related expenses associated with the acquisition of Micron Optics Inc 2019) Transaction related expenses and inventory step-up amortization relate to General Photonics acquisition and CFO transition expenses
Luna Innovations Incorporated
Reconciliation of Non-GAAP Financial Measures
(in thousands)
Three Months Ended
Six Months Ended
June 30
June 30
2020
2019
2020
2019
(Unaudited)
(Unaudited)
Reconciliation of EBITDA and Adjusted EBITDA
Net income
$ 1369
$ - 0
$ 841
$ 253
$ - 0
$ 1967
Loss from discontinued operations net of income tax benefit of $464
- 0
- 0
- 0
1436
- 0
- 0
Gain on sale of asset
- 0
- 0
- 0
- 0
- 0
- 0
Net income from continuing operations
1369
- 0
841
1689
- 0
1967
Interest expense
1
- 0
- 0
1
- 0
13
Investment income
(4)
- 0
(77)
(64)
- 0
(268)
Income tax expense(benefit)
441
- 0
247
579
- 0
(1618)
Depreciation and amortization
684
- 0
653
1363
- 0
1166
EBITDA
2490
- 0
1664
3568
- 0
1260
Share-based compensation
465
- 0
378
967
- 0
721
Non-Recurring Charges (1)
- 0
- 0
44
- 0
- 0
942
CFO Recruiting and Severance
- 0
- 0
- 0
- 0
- 0
- 0
Amortization of Inventory Step-up
- 0
- 0
310
- 0
- 0
412
- 0
- 0
- 0
- 0
- 0
- 0
Adjusted EBITDA
$ 2955
$ - 0
$ 2396
$ 4535
$ - 0
$ 3335
EBITDA Margin Percent on Total Revenues
134
93
100
39
Adjusted EBITDA Margin Percent on Total Revenues
159
134
127
102
Reconciliation of Non-GAAP EPS
Diluted EPS
$ 004
$ 002
$ 001
$ 005
Loss from discontinued operations net of income taxes
Existing Technology amortization missed from 101518-63019
- 0
15560
Amortization catch up from 101518-63019 in July 2019 only
In-process RampD
200000
0
- 0
1650000
4091764
Micron Purchase Amortization Detail - 812019 and forward
Trade Name
150000
36
4167
Customer Relationships
100000
84
1190
Existing Technology
1200000
60
20000
Amortization going forward
In-process RampD
200000
0
- 0
1650000
2535714
General Pho Purchase Amortization Detail - 312019
Trade Name
400000
36
11111
22822
Customer Relationships
600000
180
3333
22834
Existing Technology
7200000
96
75000
22827
In-process RampD
- 0
0
- 0
8200000
8944444
General Pho Inventory Step-up Amortization - 312019
WIP amp Fin Goods
724760
7
103537
Ends 93019
PampL Summary - Luna Innovations
For the Three Months Ending March 31 2020
QTD
QTD
QTD
YTD
YTD
YTD
Actual
Budget
Variance
Actual
Budget
Variance
fav(un-fav)
fav(un-fav)
Revenues
Lightwave
12933344
13366455
(433536)
24487335
25564000
(1077090)
686
Luna Labs
5642348
6075202
(432854)
11229350
11675307
(445957)
314
Total Revenues
18575692
19441657
(866390)
35716685
37239307
(1523047)
Cost of Revenues
Product and Licensing
5181057
5789978
608921
10066386
11082697
1016311
282
TDD
3877888
4448571
570683
7769627
8526736
757109
218
Total Cost of Revenues
9058945
10238549
570683
17836013
19609433
1773420
499
Gross Margin
Product and Licensing - $
7752287
7576477
175810
14420949
14481303
(60354)
Product and Licensing -
60
57
3
59
57
2
TDD - $
1764460
1626631
137829
3459723
3148571
311152
TDD -
31
27
4
31
27
4
Total Gross Margin
9516747
9203108
313639
17880672
17629874
250798
Gross Margin
51
47
4
50
47
3
501
Operating Expenses
Selling General amp Admin
6202338
8155800
1953888
12578977
14477853
1899301
Research Devel amp Engineering
1504800
647122
(857678)
3101865
2798808
(303057)
Total Operating Expenses
7707138
8802922
1096209
15680842
17276661
1595819
439
Operating Income (Loss)
1809609
400186
1409423
2199830
353213
1846617
62
Other Expense (Income)
Interest
930
985
55
1145
2195
1050
00
Investment Income
(4435)
(75000)
(70565)
(63790)
(150000)
(86210)
-02
Tax Expense
440626
118551
(498831)
579203
125253
(630706)
16
Tax Benefit from release of VA
-
-
-
-
-
-
00
Gainloss on foreigh exch
-
-
-
-
-
-
00
Other
3649
-
(3649)
(5236)
-
5236
-00
440770
44536
(396234)
511322
(22552)
(533874)
14
Income from continuing operations
1368839
355650
1805658
1688508
375765
2380491
Income from Disc Ops
Operating Income from Disc Ops
-
-
- 0
-
-
- 0
Gainloss of Asset Sale
-
-
- 0
(1435903)
-
(1435903)
Total Income from Disc Ops
- 0
- 0
- 0
(1435903)
- 0
(1435903)
Net Income (Loss)
1368839
355650
1013189
252605
375765
(123160)
07
Dividend on Preferred
- 0
- 0
- 0
- 0
- 0
- 0
Net Income (Loss) available to Common Shareholders
1368839
355650
1013189
252605
375765
(123160)
07
Depreciation
244214
491046
From Cash Flow
Amortization
439787
872410
From Cash Flow
Stock Compensation
465109
966932
From Cash Flow
Acquisition Costs
- 0
- 0
Amortization of Inventory Step-up
- 0
- 0
CFO Recruiting amp Severance
- 0
- 0
Treasury Stock Activity
63020
Stock Buyback - Held with Northland
Trade date
Settlement Date
of Shares
Avg Price
Commission
Trade date Total $
Number of Days
Weighted Avg
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
= Trades Not Settled
$000
$000
$000
$000
YTD Avg
0
0
Trade date
Settlement Date
of Shares
Avg Price
Commission
Trade date Total $
Number of Days
Weighted Avg
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
QTD Avg
0
0
0
0
2016 Amounts under program
205500
$24880840
$25086340
2017 Amounts under program
433179
$75649353
$76082532
2018 Amounts under program
132450
$30604099
$30736549
2019 Amounts under program
333953
$198663889
$199999701
Total
110508200
329798181
331905122
For Q Disclosure
Management Buyback - Held with AST
Date
Shares
YTD days os
YTD weighted avg
QTD days os
QTD Weighted Avg
Month
Quarter
Year
52720
Garrett James
6500
35
1250
35
2500
Jan
31
- 0
- 0
52720
Graeff Scott
17450
35
3356
35
6712
Feb
29
- 0
- 0
52720
Soller Brian
9000
35
1731
35
3462
Mar
31
91
91
44013
- 0
91
- 0
Apr
30
- 0
- 0
44013
- 0
91
- 0
May
31
- 0
- 0
44013
- 0
91
- 0
Jun
30
91
182
44013
- 0
91
- 0
Jul
31
- 0
- 0
44013
- 0
91
- 0
Aug
31
- 0
- 0
44013
- 0
91
- 0
Sept
30
92
274
- 0
- 0
Oct
31
- 0
- 0
- 0
- 0
Nov
30
- 0
- 0
- 0
- 0
Dec
31
92
366
32950
6337
12673
BOD buyback
YTD
$000
$000
44013
- 0
Qtr
$000
$000
44013
- 0
Luna
Date
CloseLast
1220
738
Average Close Price
1320
718
Year-To-Date
$ 696
1620
73
Quarter-To-Date
$ 652
1720
735
1820
756
1920
777
11020
787
11320
803
11420
804
11520
832
11620
85
11720
845
12120
827
12220
833
12320
849
12420
844
12720
828
12820
856
12920
85
13020
846
13120
819
2320
825
2420
821
2520
82
2620
819
2720
837
21020
85
21120
858
21220
904
21320
895
21420
897
21820
891
21920
891
22020
907
22120
923
22420
861
22520
745
22620
759
22720
707
22820
67
3220
713
3320
693
3420
719
3520
689
3620
75
3920
672
31020
66
31120
599
31220
521
31320
522
31620
491
31720
553
31820
473
31920
487
32020
48
32320
509
32420
543
32520
582
32620
617
32720
583
33020
623
33120
615
4120
585
4220
583
4320
572
4620
607
4720
605
4820
631
4920
665
41320
656
41420
683
41520
711
41620
734
41720
727
42020
73
42120
672
42220
683
42320
691
42420
715
42720
721
42820
74
42920
777
43020
763
5120
724
5420
751
5520
762
5620
76
5720
749
5820
782
51120
704
51220
705
51320
62
51420
578
51520
537
51820
591
51920
625
52020
61
52120
6
52220
609
52620
615
52720
62
52820
609
52920
61
6120
629
6220
628
6320
653
6420
649
6520
663
6820
667
6920
635
61020
643
61120
583
61220
606
61520
625
61620
631
61720
615
61820
599
61920
601
62220
616
62320
624
62420
615
62520
615
62620
571
62920
585
63020
584
Qtr
1
2
3
4
Options
Options
Aggregate Strike Price
Intrinsic Value
Outstanding
Exercisable
Outstanding
Exercisable
Outstanding
Exercisable
Luna
2418245
1309606
$6482283
$2709686
7767068
4952824
2418245
1309606
6482283
2709686
7767068
4952824
Warrants Aaron Chase Aaron ChaseCarilion exercised all warrants in Q2 and Q3 2018
0
0
0
0
2418245
1309606
6482283
2709686
Average Strike Price
$ 268
$ 207
Pull Cancelled for whole year
Cancels
Q1
35659 Aaron Chase Aaron Chase22999 of canceled shares didnrsquot show up until Q2-20 report
Aaron Chase Aaron ChaseCarilion exercised all warrants in Q2 and Q3 2018
$ 364
12990180
Outstanding 12312019
3160397
Q2
13124
$ 211
2769912
Q3
- 0
ERRORDIV0
- 0
Grants
20000
Q4
- 0
ERRORDIV0
- 0
Exercised
(662965)
48783
$ 323
15760092
Canceled
(48783)
Corrected Termed EEs from 2019
(50404)
These were corrected in June 2020
2418245
Remaining life
Options
Avg Life
- 0
Outstanding
Luna
2418245
644
Exercisable
1309606
474
Remaining service
Luna
2418245
See awards outstanding by grant price range report and Disclosure report for information on this tab
Luna Innovations
Additional Notes
EPS Calculations
During Jan-2019 and 2020 Management was awarded Performance Based Grants and Time Based Grants
63020
The Performance Based Grants vest after 3 years and are issued only if the performance is achieved
The Time Based Grants vest each year for 3 years Grants are issued once vested each year
Yearly BOD Grants
Basic EPS
DSU deferred stock units vest in a year but do not become issued until the Director leaves the Board This started in 2018
Net Income (loss) Per Share from Continuing Operations
YTD
Diluted
QTD
Diluted
DSU awards vest in May 2021 and will be added to the middle section of the EPS in May 2021
Net Income from Continuing Operations
1688508
1368839
Rich Roedel
8877
704
62500
Common Shares Outstanding
30484797
30589249
Barry Phelps
5326
704
37500
$ 006
$ 005
$ 004
$ 004
Leigh Anderson
5326
704
37500
Mary Beth Vitale
5326
704
37500
Net income (loss) Per Share attributable to common shareholders
RSU restricted stock units vest and are issued in a year and will be added to the bottom of the EPS in May 2021
Net Income (Loss) available to Shareholders
252605
1368839
Don Pastor
5326
704
37500
Common Shares Outstanding
30484797
30589249
Gary Spiegel
5326
704
37500
$ 001
$ 001
$ 004
$ 004
Net income (loss) Per Share from Discontinued Operations
Net Income from Discontinued Operations
(1435903)
- 0
Common Shares Outstanding
30484797
30589249
$ (005)
$ (004)
$ - 0
$ - 0
Diluted EPS
Net Income(Loss) available to SHs
252605
1368839
Common Shares Outstanding
30484797
30589249
Common Stock Equivalent
2010153
1876873
$ 001
- 0 Grant Thornton LLP Grant Thornton LLPAs earnings from continuing operations are negative (loss) basic and diluted EPS equal one another
$ 004 Grant Thornton LLP Grant Thornton LLPAs earnings from continuing operations are negative (loss) basic and diluted EPS equal one another
- 0 Grant Thornton LLP Grant Thornton LLPAs earnings from continuing operations are negative (loss) basic and diluted EPS equal one another
Non-GAAP Diluted EPS
Net income (loss) Per Share attributable to common shareholders
Net Income (Loss) available to Shareholders
252605
1368839
Loss from discontinued operations
1435903
- 0
Share-based compensation
966932
465109
Amortization of acquired intangibles
344405
688810
Acquisition related costs
- 0
- 0
Amortization of Inventory Step-up
- 0
- 0
Common Shares Outstanding
30484797
30589249
Common Stock Equivalent
2010153
1876873
$ 009
$ 008
YTD
QTD
Total issued shares
32470276
Average Close Price
$ 696
$ 652
Total treasury
1672741
Shares Outstanding
30797535
Net change in denominator
1404924 Kelly Bewick Aaron Chasesee Dilution (stock option) dilutive tab
1264984
BOD fees paid in DSUs Aaron Chase Aaron ChaseFrom Equity Award Transactions Report
Month
Quarter
Year
Balance at 112019 - DSU outstanding
591457
591457
Jan
31
Issued during Q1 2020
7114
7114
Feb
29
Issued during Q2 2020
3947
7894
Mar
31
91
91
Annual grant DSU vested 5112020
10521 KBSResults KBSResultsEnter 2019 DSU annual grant when vest in 2020 (probably May) you do not need to enter annual RSU because it will be issued in AST
21042
Apr
30
Deferred Equity Issuance 6012020
(7809) KBSResults Aaron ChaseM Wise and J Williamson retired from the BoD in May 2020 Wise Deferred Comp will be issued every June 1 for 10 years Williamson Deferred Comp will be issued every June 1 for 5 years
Grant Thornton LLP Grant Thornton LLPAs earnings from continuing operations are negative (loss) basic and diluted EPS equal one another
Grant Thornton LLP Grant Thornton LLPAs earnings from continuing operations are negative (loss) basic and diluted EPS equal one another
(15619)
May
31
Issued during Q3 2020
- 0
- 0
Jun
30
91
182
Issued during Q4 2020
- 0
- 0
Jul
31
Aug
31
Sept
30
92
274
Oct
31
Totals (Antidilutive)
2010153
1876873
Nov
30
Dec
31
92
366
Shares Outstanding as of 112020
31788896
As Of Date
Transaction
Reason
Name
Shares Issued
Shares Retired
Running Total
01012020
Normal
Balance Roll Forward
- 0
- 0
31788896
01082020
Normal
Option Exercise
Williamson John
12000000
- 0
31908896
01082020
Normal
Retirement - Vested Restriced Stock
Exer Options
Williamson John
- 0
2000000
31888896
01102020
Normal
Option Exercise
Roedel Rich
6000000
- 0
31948896
01142020
Normal
2019 Time-Based RSU Vesting
Messick Dale
666700
- 0
31955563
01142020
Normal
2019 Time-Based RSU Vesting
Graeff Scott
3066700
- 0
31986230
01142020
Normal
2019 Time-Based RSU Vesting
Soller Brian
1066700
- 0
31996897
01142020
Normal
2019 Time-Based RSU Vesting
Garrett James
766700
- 0
32004564
01142020
Normal
2019 Time-Based RSU Retirement
Taxes
Graeff Scott
- 0
920000
31995364
01142020
Normal
2019 Time-Based RSU Retirement
Taxes
Soller Brian
- 0
320000
31992164
01142020
Normal
2019 Time-Based RSU Retirement
Taxes
Garrett James
- 0
230000
31989864
01142020
Normal
Option Exercise
Burris Kevin
100000
- 0
31990864
01292020
Normal
Option Exercise
Carr Dustin
3212300
- 0
32022987
01272020
Normal
Option Exercise
Chen James
334000
- 0
32026327
02192020
Normal
Option Exercise
McPherson Daniel
534800
- 0
32031675
03122020
Normal
Option Exercise
Haber Todd
2500000
- 0
32056675
03122020
Normal
Option Exercise
Graver Thomas
4558100
- 0
32102256
03122020
Normal
Option Exercise
Baez Michael
911200
- 0
32111368
03062020
Normal
Option Exercise
Farooqui Salvan
1500000
- 0
32126368
05122020
Normal
Option Exercise
Baez Michael
950000
- 0
32135868
05142020
Normal
Option Exercise
Haber Todd
4300000
- 0
32178868
05142020
Normal
Option Exercise
Graver Thomas
4746100
- 0
32226329
05112020
Normal
Annual Equity Grant Vesting-BoD
Pastor Don
580000
- 0
32232129
05112020
Normal
Annual Equity Grant Vesting-BoD
Williamson John
580000
- 0
32237929
06012020
Normal
Deferred Stock Issuance-BoD
Wise Mike
980900
- 0
32247738
06012020
Normal
Deferred Stock Issuance-BoD
Williamson John
3756800
32285306
06112020
Normal
Option Exercise
Wise Mike
24000000
32525306
06112020
Normal
Retirement - Vested Stock
Exer Options
Wise Mike
6153000
32463776
06082020
Normal
Option Exercise
Pruzan Michael
400000
32467776
06292020
Normal
Option Exercise
Farooqui Salvan
250000
32470276
Date Issued
Balance Outstanding
Number of Days
Weighted Avg
Treasury Shares Weighted Average
Year-to-Date
YTD
QTD
1120
31788896
182
31788896
Graeff July 2
115000
115000
1820
31908896
175
115385
Q2 2015
29925
29925
1820
31888896
175
(19231)
2014
22725
22725
11020
31948896
173
57033
2016 Mgmt buyback
73675
73675
11420
31955563
169
6191
2016 repurchase program
205500
205500
11420
31986230
169
28477
2017 Mgmt buyback
90900
90900
11420
31996897
169
9905
2017 BOD buyback
100000
100000
11420
32004564
169
7119
2017 repurchase program
433179
433179
11420
31995364
169
(8543)
2018 repurchase program
132450
132450
11420
31992164
169
(2971)
2018 Mgmt buyback
49751
49751
11420
31989864
169
(2136)
2019 Mgmt buyback
52733
52733
11420
31990864
169
929
2019 repurchase program
333953
333953
12920
32022987
154
27181
2020 Mgmt buyback
6337
12673
12720
32026327
156
2863
21920
32031675
133
3908
164612764
165246418
31220
32056675
111
15247
31220
32102256
111
27799
31220
32111368
111
5557
567659
3620
32126368
117
9643
Treasury on AST
567664
51220
32135868
50
2610
Diff
(5)
51420
32178868
48
11341
51420
32226329
48
12517
51120
32232129
51
1625
51120
32237929
51
1625
6120
32247738
30
1617
6120
32285306
30
6193
61120
32525306
20
26374
61120
32463776
20
(6762)
6820
32467776
23
505
62920
32470276
2
27
YTD Average Shares Outstanding
32130925
Quarter-to Date
112020
31788896
91
31788896
1820
31908896
91
120000
1820
31888896
91
(20000)
11020
31948896
91
60000
11420
31955563
91
6667
11420
31986230
91
30667
11420
31996897
91
10667
11420
32004564
91
7667
11420
31995364
91
(9200)
11420
31992164
91
(3200)
11420
31989864
91
(2300)
11420
31990864
91
1000
12920
32022987
91
32123
12720
32026327
91
3340
21920
32031675
91
5348
31220
32056675
91
25000
31220
32102256
91
45581
31220
32111368
91
9112
3620
32126368
91
15000
51220
32135868
50
5220
51420
32178868
48
22681
51420
32226329
48
25034
51120
32232129
51
3251
51120
32237929
51
3251
6120
32247738
30
3234
6120
32285306
30
12385
61120
32525306
20
52747
61120
32463776
20
(13523)
6820
32467776
23
1011
62920
32470276
2
55
QTD Average Shares Outstanding
32241713
C1
TA to the Summary tab
C2
TA to the Avg Stock Price tab
C3
TA to the Options Outstanding YTD tab
C4
TA to the Equity Rollforward WP
C5
TA to the AST Report in the Equity Rollfoward WP
C6
TA to the Options Outstanding QTD tab
C7
Custom 7
C8
See comment box
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
8
Luna Overview
Comms Test Components
Short-haul network
Contract Research Materials
Systems amp Analytics
Health Sciences
Sensing Short-range high resolution
Long-range high speed
Material thickness
Lightwave Luna Labs
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
9
Where Does Luna Play
Comms Test5G BuildoutField Support
Comms Test Sensing
Market size $900M $16B
Luna growth 15-20 20-25
Drivers5G
Silicon PhotonicsLightweighting Smart
Infrastructure IoT
Key competition
Keysight Viavi Exfo
HBM Vishay National Instruments
Total SAM based on Luna estimates and published market reports
Market$25B
SensingSmart InfrastructureLightweightingProcess control amp NDE
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
10
Sensing
Fiber optic sensors are the ldquonervesrdquo of smart materials
Lunarsquos products are the ldquobrainrdquo that collects and aggregates data from fiber sensor ldquonervesrdquo
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
11
Sensing Short-range high-resolution
Product ODiSI
High-Definition Fiber Optic Sensing Measuring strain and
temperature in composites and other advanced materials
Focus on military and commercial aerospace and automotive
temperature acceleration displacement and pressure
Focus on structural health and security
bull Buildings tunnels bridges
bull Perimeter security
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
13
Sensing Material thickness
Product Terahertz technology
Layer thickness measurements for process control inspection and non-destructive testing Advanced technology measures thickness of
opaque materials Unique measurement of composites and
coatings with easy to use hand-held tools Focus on manufacturing environments and
field test for military-aerospacebull Plastic and industrial packagingbull Used extensively on F35 and F22 for
anti-radar surface treatment
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
14
Comms Test
Increased data and video consumption Video forecasted to represent 82 of all
IP traffic in 2022 34 CAGR
Growth in mobile and 4G5G Mobile data traffic growing at 46 CAGR
Cloud services and adoption of Internet of Things Data center traffic growing at 26 CAGR 285 billion IoT networked devices by
2022
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
15
Comms Test Components
Product Optical Vector Analyzer (OVA)
Ensuring speed at the chip level
Unprecedented visibility inside devices ˗you canrsquot fix what you canrsquot see
Reduces time and cost associated with the development of high-speed optical components
Focus on enabling the carriers to move to 5G networks
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
16
Comms Test Short-haul network
Product Optical Backscatter Reflectometer (OBR)
Bandwidth demands continue to drive double-digit connectivity growth
Delivers unprecedented visibility into short-haul networks
Emerging market for on-board aircraft communications
Ensuring network ldquoup timerdquo on Lockheed Martinrsquos F-35
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
17
Luna Labs
Work with universities and government research labs to explore technological feasibility with a goal toward proof of concept
Collaborate with prime contractors government offices and federally-funded RampD centers
Work with contract manufacturers suppliers licensees and distributors to develop everything from small-scale prototypes up to and including market-ready products
Based in Charlottesville VA
2Q FY20 Results
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
19
Second-quarter 2020 Key Financial Results
Solid financial performance
$06M improvement in Adjusted EBITDA1 year-over-year
Total revenues of $186M up 4 year-over-year
Lightwave revenue of $129M up 3 year-over-year
Luna Labs revenue of $56M up 7 year-over-year
Operating income improved to $18M or 10 of total revenues in Q2 2020 from $10M or 6 of total revenues in Q2 2019 due to increased revenue and gross profit as well as improved operating expense leverage
Net income of $14M or $004 per fully diluted share for the three months ended June 30 2020 compared to $08M or $002 per fully diluted share for the three months ended June 30 2019
Adjusted EBITDA1 increased to $30M for the three months ended June 30 2020 compared to $24M for the three months ended June 30 2019
Reaffirmed 2020 outlook tighten range to $81 to $83M in total revenues
1Adj EBITDA is a non-GAAP measure Reconciliation of comparable GAAP measures to non-GAAP measures are included in the appendix to this presentation
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
20
Second-quarter 2020 and Other Recent Accomplishments
Reported solid second-quarter 2020 financial results in challenging COVID environment
Held 6 customer-facing technology educational webinars ~1000 live attendees and more than 1200 leads
Hosted worldwide virtual sales meeting with 47 attendees
Participated in virtual trade shows
Continued to monitor employee feedback with a focus on safety and well-being
Successful implementation of Employee Stock Purchase Plan with approximately 60 participation
Held successful Virtual Annual Shareholder Meeting in May
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
21
($20)
$03
$95
FY16 FY17 FY18 FY19 FY20
Adjusted EBITDA1 2
(millions)
$31
$296 $331
$429
$705
FY16 FY17 FY18 FY19 FY20
Revenue1
(millions)
$357
Strong Financial Results
1 Based on managementrsquos estimates of the impact from the divestiture of Optoelectronics Includes the acquisitions of Micron Optics and General Photonics2Adj EBITDA is a non-GAAP measure Reconciliation of comparable GAAP measures to non-GAAP measures are included in the appendix to this presentation
FY20 Guidance$810 - $830
FY20 Guidance $100 to $120
$45
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
22
A Flexible Balance Sheet and Strong Cash Position
Strong balance sheet on June 30 2020
$912M in total assets
bull $265M in cash and cash equivalents
bull $448M in working capital
Access to $10M revolving credit facility if needed
Continued focus on working capital and reinvestment in business in order to generate long-term sustainable growth
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
23
2020 Financial Outlook
Maintaining FY2020 outlook tightening our range
Total revenues of $81M to $83M
Adjusted EBITDA1 of $10M to $12M
1 Adj EBITDA is a non-GAAP measure Reconciliation of comparable GAAP measures to non-GAAP measures are included in the appendix to this presentation The outlook above does not include any future acquisitions divestitures or unanticipated events
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
24
Luna ndash Enabling the Future with Fiber
Proprietary measurement technology offering unprecedented combination of resolution accuracy and speed
Customers in attractive markets Military and Defense Communications Infrastructure Energy and Automotive
Positioned to take advantage of trends such as vehicle light-weighting and increasing demands on data centers and broadband capacity
Adequately capitalized to fund growth
Long-tenured experienced executive team board
Corporate culture of innovation and integrity
Overview
Appendix
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
26
Reconciliation of Net Income to Adjusted EBITDA
(1) Non-recurring charges consist of transaction-related expenses related to the acquisition of General Photonics
2020 2019 2020 2019
Reconciliation of EBITDA and Adjusted EBITDANet income 1369$ 841$ 253$ 1967$ Loss from discontinued operations net of income tax benefit of $464 - - 1436 -
Net income from continuing operations 1369 841 1689 1967 Interest expense 1 - 1 13 Investment income (4) (77) (64) (268) Income tax expense(benefit) 441 247 579 (1618) Depreciation and amortization 684 653 1363 1166
Reconciliation of Net Income to Adjusted EBITDA Full Year
(1) Non-recurring charges include the following 2017) CEO separation costs and other share-based compensation 2018) Transaction-related expenses associated with the acquisition of Micron Optics Inc 2019) Transaction related expenses and inventory step-up amortization relate to General Photonics acquisition and CFO transition expenses
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
28
New Segment Quarterly Results (in thousands)
March 31 2019 June 30 2019 Sep 30 2019 A Dec 31 2019 March 31 2020 June 30 2020
Total revenues 14833 17814 18389 19480 17141 18576
Cost of revenuesLightwave 4280 5334 5449 5070 4885 5181 Luna Labs 3785 3728 3665 4022 3892 3878
Total cost of revenues 8065 9062 9114 9092 8777 9059
Gross Profit 6768 8752 9275 10388 8364 9517
Operating expenseSelling general and administrative 6207 6003 5745 6416 6377 6202 Research development and engineering 1458 1735 2048 2255 1597 1505
Total operating expense 7665 7738 7793 8671 7974 7707
Operating income (897)$ 1014$ 1482$ 1717$ 390$ 1810$
A The Company revised its results for the three months ended September 30 2019 The Company has concluded these adjustments are not material individually or in the aggregate
Three Months Ended
Scott A Graeff President and CEO
Safe Harbor
Luna ndash Enabling the Future with Fiber
Luna is a global company
Luna has a clear vision and established history
Compelling business model with strong growth potential
Lightwave 2019 revenue1 snapshot
Luna Overview
Where Does Luna Play
Sensing
Sensing Short-range high-resolution
Sensing long-range high-speed
Sensing Material thickness
Comms Test
Comms Test Components
Comms Test Short-haul network
Luna Labs
2Q FY20 Results
Second-quarter 2020 Key Financial Results
Second-quarter 2020 and Other Recent Accomplishments
Slide Number 21
A Flexible Balance Sheet and Strong Cash Position
2020 Financial Outlook
Luna ndash Enabling the Future with Fiber
Appendix
Reconciliation of Net Income to Adjusted EBITDA
Reconciliation of Net Income to Adjusted EBITDA Full Year
New Segment Quarterly Results
(in thousands)
Three Months Ended
December 31 2018
A
March 31 2019
C
June 30 2019
September 30 2019
December 31 2019
March 31 2020
June 30 2020
Revenues
Lightwave
$ 11345
$ 10221
$ 12523
$ 13120
$ 13988
$ 11554
12933
Luna Labs
5548
6641
5291
5301
5492
5587
5642
Total revenues
16893
16862
17814
18421
19480
17141
18576
Cost of revenues
Lightwave
4002
3836
5334
5471
5070
4885
5181
Luna Labs
4268
4816
3728
3665
4022
3892
3878
Total cost of revenues
8270
8652
9062
9136
9092
8777
9059
Gross Profit
8623
8210
8752
9285
10388
8364
9517
Operating expense
Selling general and administrative
6394
7165
6003
5754
6415
6377
6202
Research development and engineering
1894
1708
1735
2047
2255
1597
1505
Total operating expense
8288
8873
7738
7801
8670
7974
7707
Operating income
$ 335
$ (663)
$ 1014
$ 1484
$ 1718
$ 390
$ 1810
Historical - Hidden
A
Includes $751000 of costs associated with the acquisition of Micron Optics
B
Unaudited pro forma financials assumes the General Photonics business was acquired on January 1 2019
C
Includes $898000 of costs associated with the acquisition of General Photonics
Year Ended December 31
(unaudited)
2016
2017
2018
2019
Reconciliation of EBITDA and Adjusted EBITDA
Net (loss)income
$ (2370)
$ 14615
$ 11004
$ 5343
Less income from discontinued operations net of income taxes
300
15866
9766
- 0
Loss from discontinued operations net of income tax benefit of $464
- 0
- 0
- 0
- 0
Net income from continuing operations
(2670)
(1251)
1238
5343
Interest expense
319
217
124
16
Investment income
- 0
- 0
(549)
(394)
Income tax (benefit)expense
(135)
(1148)
48
(1654)
Depreciation and amortization
1466
1137
908
2503
EBITDA
(1020)
(1045)
1769
5814
Share-based compensation
860
715
628
1544
Non-Recurring Charges (1)
- 0
596
751
1390
Amortization of Inventory Step-up
- 0
- 0
- 0
725
Adjusted EBITDA
$ (160)
$ 266
$ 3148
$ 9473
1
Non-recurring charges include the following 2017) CEO separation costs and other share-based compensation 2018) Transaction-related expenses associated with the acquisition of Micron Optics Inc 2019) Transaction related expenses and inventory step-up amortization relate to General Photonics acquisition and CFO transition expenses
Luna Innovations Incorporated
Reconciliation of Non-GAAP Financial Measures
(in thousands)
Three Months Ended
Six Months Ended
June 30
June 30
2020
2019
2020
2019
(Unaudited)
(Unaudited)
Reconciliation of EBITDA and Adjusted EBITDA
Net income
$ 1369
$ - 0
$ 841
$ 253
$ - 0
$ 1967
Loss from discontinued operations net of income tax benefit of $464
- 0
- 0
- 0
1436
- 0
- 0
Gain on sale of asset
- 0
- 0
- 0
- 0
- 0
- 0
Net income from continuing operations
1369
- 0
841
1689
- 0
1967
Interest expense
1
- 0
- 0
1
- 0
13
Investment income
(4)
- 0
(77)
(64)
- 0
(268)
Income tax expense(benefit)
441
- 0
247
579
- 0
(1618)
Depreciation and amortization
684
- 0
653
1363
- 0
1166
EBITDA
2490
- 0
1664
3568
- 0
1260
Share-based compensation
465
- 0
378
967
- 0
721
Non-Recurring Charges (1)
- 0
- 0
44
- 0
- 0
942
CFO Recruiting and Severance
- 0
- 0
- 0
- 0
- 0
- 0
Amortization of Inventory Step-up
- 0
- 0
310
- 0
- 0
412
- 0
- 0
- 0
- 0
- 0
- 0
Adjusted EBITDA
$ 2955
$ - 0
$ 2396
$ 4535
$ - 0
$ 3335
EBITDA Margin Percent on Total Revenues
134
93
100
39
Adjusted EBITDA Margin Percent on Total Revenues
159
134
127
102
Reconciliation of Non-GAAP EPS
Diluted EPS
$ 004
$ 002
$ 001
$ 005
Loss from discontinued operations net of income taxes
Existing Technology amortization missed from 101518-63019
- 0
15560
Amortization catch up from 101518-63019 in July 2019 only
In-process RampD
200000
0
- 0
1650000
4091764
Micron Purchase Amortization Detail - 812019 and forward
Trade Name
150000
36
4167
Customer Relationships
100000
84
1190
Existing Technology
1200000
60
20000
Amortization going forward
In-process RampD
200000
0
- 0
1650000
2535714
General Pho Purchase Amortization Detail - 312019
Trade Name
400000
36
11111
22822
Customer Relationships
600000
180
3333
22834
Existing Technology
7200000
96
75000
22827
In-process RampD
- 0
0
- 0
8200000
8944444
General Pho Inventory Step-up Amortization - 312019
WIP amp Fin Goods
724760
7
103537
Ends 93019
PampL Summary - Luna Innovations
For the Three Months Ending March 31 2020
QTD
QTD
QTD
YTD
YTD
YTD
Actual
Budget
Variance
Actual
Budget
Variance
fav(un-fav)
fav(un-fav)
Revenues
Lightwave
12933344
13366455
(433536)
24487335
25564000
(1077090)
686
Luna Labs
5642348
6075202
(432854)
11229350
11675307
(445957)
314
Total Revenues
18575692
19441657
(866390)
35716685
37239307
(1523047)
Cost of Revenues
Product and Licensing
5181057
5789978
608921
10066386
11082697
1016311
282
TDD
3877888
4448571
570683
7769627
8526736
757109
218
Total Cost of Revenues
9058945
10238549
570683
17836013
19609433
1773420
499
Gross Margin
Product and Licensing - $
7752287
7576477
175810
14420949
14481303
(60354)
Product and Licensing -
60
57
3
59
57
2
TDD - $
1764460
1626631
137829
3459723
3148571
311152
TDD -
31
27
4
31
27
4
Total Gross Margin
9516747
9203108
313639
17880672
17629874
250798
Gross Margin
51
47
4
50
47
3
501
Operating Expenses
Selling General amp Admin
6202338
8155800
1953888
12578977
14477853
1899301
Research Devel amp Engineering
1504800
647122
(857678)
3101865
2798808
(303057)
Total Operating Expenses
7707138
8802922
1096209
15680842
17276661
1595819
439
Operating Income (Loss)
1809609
400186
1409423
2199830
353213
1846617
62
Other Expense (Income)
Interest
930
985
55
1145
2195
1050
00
Investment Income
(4435)
(75000)
(70565)
(63790)
(150000)
(86210)
-02
Tax Expense
440626
118551
(498831)
579203
125253
(630706)
16
Tax Benefit from release of VA
-
-
-
-
-
-
00
Gainloss on foreigh exch
-
-
-
-
-
-
00
Other
3649
-
(3649)
(5236)
-
5236
-00
440770
44536
(396234)
511322
(22552)
(533874)
14
Income from continuing operations
1368839
355650
1805658
1688508
375765
2380491
Income from Disc Ops
Operating Income from Disc Ops
-
-
- 0
-
-
- 0
Gainloss of Asset Sale
-
-
- 0
(1435903)
-
(1435903)
Total Income from Disc Ops
- 0
- 0
- 0
(1435903)
- 0
(1435903)
Net Income (Loss)
1368839
355650
1013189
252605
375765
(123160)
07
Dividend on Preferred
- 0
- 0
- 0
- 0
- 0
- 0
Net Income (Loss) available to Common Shareholders
1368839
355650
1013189
252605
375765
(123160)
07
Depreciation
244214
491046
From Cash Flow
Amortization
439787
872410
From Cash Flow
Stock Compensation
465109
966932
From Cash Flow
Acquisition Costs
- 0
- 0
Amortization of Inventory Step-up
- 0
- 0
CFO Recruiting amp Severance
- 0
- 0
Treasury Stock Activity
63020
Stock Buyback - Held with Northland
Trade date
Settlement Date
of Shares
Avg Price
Commission
Trade date Total $
Number of Days
Weighted Avg
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
= Trades Not Settled
$000
$000
$000
$000
YTD Avg
0
0
Trade date
Settlement Date
of Shares
Avg Price
Commission
Trade date Total $
Number of Days
Weighted Avg
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
QTD Avg
0
0
0
0
2016 Amounts under program
205500
$24880840
$25086340
2017 Amounts under program
433179
$75649353
$76082532
2018 Amounts under program
132450
$30604099
$30736549
2019 Amounts under program
333953
$198663889
$199999701
Total
110508200
329798181
331905122
For Q Disclosure
Management Buyback - Held with AST
Date
Shares
YTD days os
YTD weighted avg
QTD days os
QTD Weighted Avg
Month
Quarter
Year
52720
Garrett James
6500
35
1250
35
2500
Jan
31
- 0
- 0
52720
Graeff Scott
17450
35
3356
35
6712
Feb
29
- 0
- 0
52720
Soller Brian
9000
35
1731
35
3462
Mar
31
91
91
44013
- 0
91
- 0
Apr
30
- 0
- 0
44013
- 0
91
- 0
May
31
- 0
- 0
44013
- 0
91
- 0
Jun
30
91
182
44013
- 0
91
- 0
Jul
31
- 0
- 0
44013
- 0
91
- 0
Aug
31
- 0
- 0
44013
- 0
91
- 0
Sept
30
92
274
- 0
- 0
Oct
31
- 0
- 0
- 0
- 0
Nov
30
- 0
- 0
- 0
- 0
Dec
31
92
366
32950
6337
12673
BOD buyback
YTD
$000
$000
44013
- 0
Qtr
$000
$000
44013
- 0
Luna
Date
CloseLast
1220
738
Average Close Price
1320
718
Year-To-Date
$ 696
1620
73
Quarter-To-Date
$ 652
1720
735
1820
756
1920
777
11020
787
11320
803
11420
804
11520
832
11620
85
11720
845
12120
827
12220
833
12320
849
12420
844
12720
828
12820
856
12920
85
13020
846
13120
819
2320
825
2420
821
2520
82
2620
819
2720
837
21020
85
21120
858
21220
904
21320
895
21420
897
21820
891
21920
891
22020
907
22120
923
22420
861
22520
745
22620
759
22720
707
22820
67
3220
713
3320
693
3420
719
3520
689
3620
75
3920
672
31020
66
31120
599
31220
521
31320
522
31620
491
31720
553
31820
473
31920
487
32020
48
32320
509
32420
543
32520
582
32620
617
32720
583
33020
623
33120
615
4120
585
4220
583
4320
572
4620
607
4720
605
4820
631
4920
665
41320
656
41420
683
41520
711
41620
734
41720
727
42020
73
42120
672
42220
683
42320
691
42420
715
42720
721
42820
74
42920
777
43020
763
5120
724
5420
751
5520
762
5620
76
5720
749
5820
782
51120
704
51220
705
51320
62
51420
578
51520
537
51820
591
51920
625
52020
61
52120
6
52220
609
52620
615
52720
62
52820
609
52920
61
6120
629
6220
628
6320
653
6420
649
6520
663
6820
667
6920
635
61020
643
61120
583
61220
606
61520
625
61620
631
61720
615
61820
599
61920
601
62220
616
62320
624
62420
615
62520
615
62620
571
62920
585
63020
584
Qtr
1
2
3
4
Options
Options
Aggregate Strike Price
Intrinsic Value
Outstanding
Exercisable
Outstanding
Exercisable
Outstanding
Exercisable
Luna
2418245
1309606
$6482283
$2709686
7767068
4952824
2418245
1309606
6482283
2709686
7767068
4952824
Warrants Aaron Chase Aaron ChaseCarilion exercised all warrants in Q2 and Q3 2018
0
0
0
0
2418245
1309606
6482283
2709686
Average Strike Price
$ 268
$ 207
Pull Cancelled for whole year
Cancels
Q1
35659 Aaron Chase Aaron Chase22999 of canceled shares didnrsquot show up until Q2-20 report
Aaron Chase Aaron ChaseCarilion exercised all warrants in Q2 and Q3 2018
$ 364
12990180
Outstanding 12312019
3160397
Q2
13124
$ 211
2769912
Q3
- 0
ERRORDIV0
- 0
Grants
20000
Q4
- 0
ERRORDIV0
- 0
Exercised
(662965)
48783
$ 323
15760092
Canceled
(48783)
Corrected Termed EEs from 2019
(50404)
These were corrected in June 2020
2418245
Remaining life
Options
Avg Life
- 0
Outstanding
Luna
2418245
644
Exercisable
1309606
474
Remaining service
Luna
2418245
See awards outstanding by grant price range report and Disclosure report for information on this tab
Luna Innovations
Additional Notes
EPS Calculations
During Jan-2019 and 2020 Management was awarded Performance Based Grants and Time Based Grants
63020
The Performance Based Grants vest after 3 years and are issued only if the performance is achieved
The Time Based Grants vest each year for 3 years Grants are issued once vested each year
Yearly BOD Grants
Basic EPS
DSU deferred stock units vest in a year but do not become issued until the Director leaves the Board This started in 2018
Net Income (loss) Per Share from Continuing Operations
YTD
Diluted
QTD
Diluted
DSU awards vest in May 2021 and will be added to the middle section of the EPS in May 2021
Net Income from Continuing Operations
1688508
1368839
Rich Roedel
8877
704
62500
Common Shares Outstanding
30484797
30589249
Barry Phelps
5326
704
37500
$ 006
$ 005
$ 004
$ 004
Leigh Anderson
5326
704
37500
Mary Beth Vitale
5326
704
37500
Net income (loss) Per Share attributable to common shareholders
RSU restricted stock units vest and are issued in a year and will be added to the bottom of the EPS in May 2021
Net Income (Loss) available to Shareholders
252605
1368839
Don Pastor
5326
704
37500
Common Shares Outstanding
30484797
30589249
Gary Spiegel
5326
704
37500
$ 001
$ 001
$ 004
$ 004
Net income (loss) Per Share from Discontinued Operations
Net Income from Discontinued Operations
(1435903)
- 0
Common Shares Outstanding
30484797
30589249
$ (005)
$ (004)
$ - 0
$ - 0
Diluted EPS
Net Income(Loss) available to SHs
252605
1368839
Common Shares Outstanding
30484797
30589249
Common Stock Equivalent
2010153
1876873
$ 001
- 0 Grant Thornton LLP Grant Thornton LLPAs earnings from continuing operations are negative (loss) basic and diluted EPS equal one another
$ 004 Grant Thornton LLP Grant Thornton LLPAs earnings from continuing operations are negative (loss) basic and diluted EPS equal one another
- 0 Grant Thornton LLP Grant Thornton LLPAs earnings from continuing operations are negative (loss) basic and diluted EPS equal one another
Non-GAAP Diluted EPS
Net income (loss) Per Share attributable to common shareholders
Net Income (Loss) available to Shareholders
252605
1368839
Loss from discontinued operations
1435903
- 0
Share-based compensation
966932
465109
Amortization of acquired intangibles
344405
688810
Acquisition related costs
- 0
- 0
Amortization of Inventory Step-up
- 0
- 0
Common Shares Outstanding
30484797
30589249
Common Stock Equivalent
2010153
1876873
$ 009
$ 008
YTD
QTD
Total issued shares
32470276
Average Close Price
$ 696
$ 652
Total treasury
1672741
Shares Outstanding
30797535
Net change in denominator
1404924 Kelly Bewick Aaron Chasesee Dilution (stock option) dilutive tab
1264984
BOD fees paid in DSUs Aaron Chase Aaron ChaseFrom Equity Award Transactions Report
Month
Quarter
Year
Balance at 112019 - DSU outstanding
591457
591457
Jan
31
Issued during Q1 2020
7114
7114
Feb
29
Issued during Q2 2020
3947
7894
Mar
31
91
91
Annual grant DSU vested 5112020
10521 KBSResults KBSResultsEnter 2019 DSU annual grant when vest in 2020 (probably May) you do not need to enter annual RSU because it will be issued in AST
21042
Apr
30
Deferred Equity Issuance 6012020
(7809) KBSResults Aaron ChaseM Wise and J Williamson retired from the BoD in May 2020 Wise Deferred Comp will be issued every June 1 for 10 years Williamson Deferred Comp will be issued every June 1 for 5 years
Grant Thornton LLP Grant Thornton LLPAs earnings from continuing operations are negative (loss) basic and diluted EPS equal one another
Grant Thornton LLP Grant Thornton LLPAs earnings from continuing operations are negative (loss) basic and diluted EPS equal one another
(15619)
May
31
Issued during Q3 2020
- 0
- 0
Jun
30
91
182
Issued during Q4 2020
- 0
- 0
Jul
31
Aug
31
Sept
30
92
274
Oct
31
Totals (Antidilutive)
2010153
1876873
Nov
30
Dec
31
92
366
Shares Outstanding as of 112020
31788896
As Of Date
Transaction
Reason
Name
Shares Issued
Shares Retired
Running Total
01012020
Normal
Balance Roll Forward
- 0
- 0
31788896
01082020
Normal
Option Exercise
Williamson John
12000000
- 0
31908896
01082020
Normal
Retirement - Vested Restriced Stock
Exer Options
Williamson John
- 0
2000000
31888896
01102020
Normal
Option Exercise
Roedel Rich
6000000
- 0
31948896
01142020
Normal
2019 Time-Based RSU Vesting
Messick Dale
666700
- 0
31955563
01142020
Normal
2019 Time-Based RSU Vesting
Graeff Scott
3066700
- 0
31986230
01142020
Normal
2019 Time-Based RSU Vesting
Soller Brian
1066700
- 0
31996897
01142020
Normal
2019 Time-Based RSU Vesting
Garrett James
766700
- 0
32004564
01142020
Normal
2019 Time-Based RSU Retirement
Taxes
Graeff Scott
- 0
920000
31995364
01142020
Normal
2019 Time-Based RSU Retirement
Taxes
Soller Brian
- 0
320000
31992164
01142020
Normal
2019 Time-Based RSU Retirement
Taxes
Garrett James
- 0
230000
31989864
01142020
Normal
Option Exercise
Burris Kevin
100000
- 0
31990864
01292020
Normal
Option Exercise
Carr Dustin
3212300
- 0
32022987
01272020
Normal
Option Exercise
Chen James
334000
- 0
32026327
02192020
Normal
Option Exercise
McPherson Daniel
534800
- 0
32031675
03122020
Normal
Option Exercise
Haber Todd
2500000
- 0
32056675
03122020
Normal
Option Exercise
Graver Thomas
4558100
- 0
32102256
03122020
Normal
Option Exercise
Baez Michael
911200
- 0
32111368
03062020
Normal
Option Exercise
Farooqui Salvan
1500000
- 0
32126368
05122020
Normal
Option Exercise
Baez Michael
950000
- 0
32135868
05142020
Normal
Option Exercise
Haber Todd
4300000
- 0
32178868
05142020
Normal
Option Exercise
Graver Thomas
4746100
- 0
32226329
05112020
Normal
Annual Equity Grant Vesting-BoD
Pastor Don
580000
- 0
32232129
05112020
Normal
Annual Equity Grant Vesting-BoD
Williamson John
580000
- 0
32237929
06012020
Normal
Deferred Stock Issuance-BoD
Wise Mike
980900
- 0
32247738
06012020
Normal
Deferred Stock Issuance-BoD
Williamson John
3756800
32285306
06112020
Normal
Option Exercise
Wise Mike
24000000
32525306
06112020
Normal
Retirement - Vested Stock
Exer Options
Wise Mike
6153000
32463776
06082020
Normal
Option Exercise
Pruzan Michael
400000
32467776
06292020
Normal
Option Exercise
Farooqui Salvan
250000
32470276
Date Issued
Balance Outstanding
Number of Days
Weighted Avg
Treasury Shares Weighted Average
Year-to-Date
YTD
QTD
1120
31788896
182
31788896
Graeff July 2
115000
115000
1820
31908896
175
115385
Q2 2015
29925
29925
1820
31888896
175
(19231)
2014
22725
22725
11020
31948896
173
57033
2016 Mgmt buyback
73675
73675
11420
31955563
169
6191
2016 repurchase program
205500
205500
11420
31986230
169
28477
2017 Mgmt buyback
90900
90900
11420
31996897
169
9905
2017 BOD buyback
100000
100000
11420
32004564
169
7119
2017 repurchase program
433179
433179
11420
31995364
169
(8543)
2018 repurchase program
132450
132450
11420
31992164
169
(2971)
2018 Mgmt buyback
49751
49751
11420
31989864
169
(2136)
2019 Mgmt buyback
52733
52733
11420
31990864
169
929
2019 repurchase program
333953
333953
12920
32022987
154
27181
2020 Mgmt buyback
6337
12673
12720
32026327
156
2863
21920
32031675
133
3908
164612764
165246418
31220
32056675
111
15247
31220
32102256
111
27799
31220
32111368
111
5557
567659
3620
32126368
117
9643
Treasury on AST
567664
51220
32135868
50
2610
Diff
(5)
51420
32178868
48
11341
51420
32226329
48
12517
51120
32232129
51
1625
51120
32237929
51
1625
6120
32247738
30
1617
6120
32285306
30
6193
61120
32525306
20
26374
61120
32463776
20
(6762)
6820
32467776
23
505
62920
32470276
2
27
YTD Average Shares Outstanding
32130925
Quarter-to Date
112020
31788896
91
31788896
1820
31908896
91
120000
1820
31888896
91
(20000)
11020
31948896
91
60000
11420
31955563
91
6667
11420
31986230
91
30667
11420
31996897
91
10667
11420
32004564
91
7667
11420
31995364
91
(9200)
11420
31992164
91
(3200)
11420
31989864
91
(2300)
11420
31990864
91
1000
12920
32022987
91
32123
12720
32026327
91
3340
21920
32031675
91
5348
31220
32056675
91
25000
31220
32102256
91
45581
31220
32111368
91
9112
3620
32126368
91
15000
51220
32135868
50
5220
51420
32178868
48
22681
51420
32226329
48
25034
51120
32232129
51
3251
51120
32237929
51
3251
6120
32247738
30
3234
6120
32285306
30
12385
61120
32525306
20
52747
61120
32463776
20
(13523)
6820
32467776
23
1011
62920
32470276
2
55
QTD Average Shares Outstanding
32241713
C1
TA to the Summary tab
C2
TA to the Avg Stock Price tab
C3
TA to the Options Outstanding YTD tab
C4
TA to the Equity Rollforward WP
C5
TA to the AST Report in the Equity Rollfoward WP
C6
TA to the Options Outstanding QTD tab
C7
Custom 7
C8
See comment box
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
9
Where Does Luna Play
Comms Test5G BuildoutField Support
Comms Test Sensing
Market size $900M $16B
Luna growth 15-20 20-25
Drivers5G
Silicon PhotonicsLightweighting Smart
Infrastructure IoT
Key competition
Keysight Viavi Exfo
HBM Vishay National Instruments
Total SAM based on Luna estimates and published market reports
Market$25B
SensingSmart InfrastructureLightweightingProcess control amp NDE
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
10
Sensing
Fiber optic sensors are the ldquonervesrdquo of smart materials
Lunarsquos products are the ldquobrainrdquo that collects and aggregates data from fiber sensor ldquonervesrdquo
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
11
Sensing Short-range high-resolution
Product ODiSI
High-Definition Fiber Optic Sensing Measuring strain and
temperature in composites and other advanced materials
Focus on military and commercial aerospace and automotive
temperature acceleration displacement and pressure
Focus on structural health and security
bull Buildings tunnels bridges
bull Perimeter security
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
13
Sensing Material thickness
Product Terahertz technology
Layer thickness measurements for process control inspection and non-destructive testing Advanced technology measures thickness of
opaque materials Unique measurement of composites and
coatings with easy to use hand-held tools Focus on manufacturing environments and
field test for military-aerospacebull Plastic and industrial packagingbull Used extensively on F35 and F22 for
anti-radar surface treatment
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
14
Comms Test
Increased data and video consumption Video forecasted to represent 82 of all
IP traffic in 2022 34 CAGR
Growth in mobile and 4G5G Mobile data traffic growing at 46 CAGR
Cloud services and adoption of Internet of Things Data center traffic growing at 26 CAGR 285 billion IoT networked devices by
2022
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
15
Comms Test Components
Product Optical Vector Analyzer (OVA)
Ensuring speed at the chip level
Unprecedented visibility inside devices ˗you canrsquot fix what you canrsquot see
Reduces time and cost associated with the development of high-speed optical components
Focus on enabling the carriers to move to 5G networks
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
16
Comms Test Short-haul network
Product Optical Backscatter Reflectometer (OBR)
Bandwidth demands continue to drive double-digit connectivity growth
Delivers unprecedented visibility into short-haul networks
Emerging market for on-board aircraft communications
Ensuring network ldquoup timerdquo on Lockheed Martinrsquos F-35
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
17
Luna Labs
Work with universities and government research labs to explore technological feasibility with a goal toward proof of concept
Collaborate with prime contractors government offices and federally-funded RampD centers
Work with contract manufacturers suppliers licensees and distributors to develop everything from small-scale prototypes up to and including market-ready products
Based in Charlottesville VA
2Q FY20 Results
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
19
Second-quarter 2020 Key Financial Results
Solid financial performance
$06M improvement in Adjusted EBITDA1 year-over-year
Total revenues of $186M up 4 year-over-year
Lightwave revenue of $129M up 3 year-over-year
Luna Labs revenue of $56M up 7 year-over-year
Operating income improved to $18M or 10 of total revenues in Q2 2020 from $10M or 6 of total revenues in Q2 2019 due to increased revenue and gross profit as well as improved operating expense leverage
Net income of $14M or $004 per fully diluted share for the three months ended June 30 2020 compared to $08M or $002 per fully diluted share for the three months ended June 30 2019
Adjusted EBITDA1 increased to $30M for the three months ended June 30 2020 compared to $24M for the three months ended June 30 2019
Reaffirmed 2020 outlook tighten range to $81 to $83M in total revenues
1Adj EBITDA is a non-GAAP measure Reconciliation of comparable GAAP measures to non-GAAP measures are included in the appendix to this presentation
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
20
Second-quarter 2020 and Other Recent Accomplishments
Reported solid second-quarter 2020 financial results in challenging COVID environment
Held 6 customer-facing technology educational webinars ~1000 live attendees and more than 1200 leads
Hosted worldwide virtual sales meeting with 47 attendees
Participated in virtual trade shows
Continued to monitor employee feedback with a focus on safety and well-being
Successful implementation of Employee Stock Purchase Plan with approximately 60 participation
Held successful Virtual Annual Shareholder Meeting in May
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
21
($20)
$03
$95
FY16 FY17 FY18 FY19 FY20
Adjusted EBITDA1 2
(millions)
$31
$296 $331
$429
$705
FY16 FY17 FY18 FY19 FY20
Revenue1
(millions)
$357
Strong Financial Results
1 Based on managementrsquos estimates of the impact from the divestiture of Optoelectronics Includes the acquisitions of Micron Optics and General Photonics2Adj EBITDA is a non-GAAP measure Reconciliation of comparable GAAP measures to non-GAAP measures are included in the appendix to this presentation
FY20 Guidance$810 - $830
FY20 Guidance $100 to $120
$45
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
22
A Flexible Balance Sheet and Strong Cash Position
Strong balance sheet on June 30 2020
$912M in total assets
bull $265M in cash and cash equivalents
bull $448M in working capital
Access to $10M revolving credit facility if needed
Continued focus on working capital and reinvestment in business in order to generate long-term sustainable growth
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
23
2020 Financial Outlook
Maintaining FY2020 outlook tightening our range
Total revenues of $81M to $83M
Adjusted EBITDA1 of $10M to $12M
1 Adj EBITDA is a non-GAAP measure Reconciliation of comparable GAAP measures to non-GAAP measures are included in the appendix to this presentation The outlook above does not include any future acquisitions divestitures or unanticipated events
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
24
Luna ndash Enabling the Future with Fiber
Proprietary measurement technology offering unprecedented combination of resolution accuracy and speed
Customers in attractive markets Military and Defense Communications Infrastructure Energy and Automotive
Positioned to take advantage of trends such as vehicle light-weighting and increasing demands on data centers and broadband capacity
Adequately capitalized to fund growth
Long-tenured experienced executive team board
Corporate culture of innovation and integrity
Overview
Appendix
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
26
Reconciliation of Net Income to Adjusted EBITDA
(1) Non-recurring charges consist of transaction-related expenses related to the acquisition of General Photonics
2020 2019 2020 2019
Reconciliation of EBITDA and Adjusted EBITDANet income 1369$ 841$ 253$ 1967$ Loss from discontinued operations net of income tax benefit of $464 - - 1436 -
Net income from continuing operations 1369 841 1689 1967 Interest expense 1 - 1 13 Investment income (4) (77) (64) (268) Income tax expense(benefit) 441 247 579 (1618) Depreciation and amortization 684 653 1363 1166
Reconciliation of Net Income to Adjusted EBITDA Full Year
(1) Non-recurring charges include the following 2017) CEO separation costs and other share-based compensation 2018) Transaction-related expenses associated with the acquisition of Micron Optics Inc 2019) Transaction related expenses and inventory step-up amortization relate to General Photonics acquisition and CFO transition expenses
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
28
New Segment Quarterly Results (in thousands)
March 31 2019 June 30 2019 Sep 30 2019 A Dec 31 2019 March 31 2020 June 30 2020
Total revenues 14833 17814 18389 19480 17141 18576
Cost of revenuesLightwave 4280 5334 5449 5070 4885 5181 Luna Labs 3785 3728 3665 4022 3892 3878
Total cost of revenues 8065 9062 9114 9092 8777 9059
Gross Profit 6768 8752 9275 10388 8364 9517
Operating expenseSelling general and administrative 6207 6003 5745 6416 6377 6202 Research development and engineering 1458 1735 2048 2255 1597 1505
Total operating expense 7665 7738 7793 8671 7974 7707
Operating income (897)$ 1014$ 1482$ 1717$ 390$ 1810$
A The Company revised its results for the three months ended September 30 2019 The Company has concluded these adjustments are not material individually or in the aggregate
Three Months Ended
Scott A Graeff President and CEO
Safe Harbor
Luna ndash Enabling the Future with Fiber
Luna is a global company
Luna has a clear vision and established history
Compelling business model with strong growth potential
Lightwave 2019 revenue1 snapshot
Luna Overview
Where Does Luna Play
Sensing
Sensing Short-range high-resolution
Sensing long-range high-speed
Sensing Material thickness
Comms Test
Comms Test Components
Comms Test Short-haul network
Luna Labs
2Q FY20 Results
Second-quarter 2020 Key Financial Results
Second-quarter 2020 and Other Recent Accomplishments
Slide Number 21
A Flexible Balance Sheet and Strong Cash Position
2020 Financial Outlook
Luna ndash Enabling the Future with Fiber
Appendix
Reconciliation of Net Income to Adjusted EBITDA
Reconciliation of Net Income to Adjusted EBITDA Full Year
New Segment Quarterly Results
(in thousands)
Three Months Ended
December 31 2018
A
March 31 2019
C
June 30 2019
September 30 2019
December 31 2019
March 31 2020
June 30 2020
Revenues
Lightwave
$ 11345
$ 10221
$ 12523
$ 13120
$ 13988
$ 11554
12933
Luna Labs
5548
6641
5291
5301
5492
5587
5642
Total revenues
16893
16862
17814
18421
19480
17141
18576
Cost of revenues
Lightwave
4002
3836
5334
5471
5070
4885
5181
Luna Labs
4268
4816
3728
3665
4022
3892
3878
Total cost of revenues
8270
8652
9062
9136
9092
8777
9059
Gross Profit
8623
8210
8752
9285
10388
8364
9517
Operating expense
Selling general and administrative
6394
7165
6003
5754
6415
6377
6202
Research development and engineering
1894
1708
1735
2047
2255
1597
1505
Total operating expense
8288
8873
7738
7801
8670
7974
7707
Operating income
$ 335
$ (663)
$ 1014
$ 1484
$ 1718
$ 390
$ 1810
Historical - Hidden
A
Includes $751000 of costs associated with the acquisition of Micron Optics
B
Unaudited pro forma financials assumes the General Photonics business was acquired on January 1 2019
C
Includes $898000 of costs associated with the acquisition of General Photonics
Year Ended December 31
(unaudited)
2016
2017
2018
2019
Reconciliation of EBITDA and Adjusted EBITDA
Net (loss)income
$ (2370)
$ 14615
$ 11004
$ 5343
Less income from discontinued operations net of income taxes
300
15866
9766
- 0
Loss from discontinued operations net of income tax benefit of $464
- 0
- 0
- 0
- 0
Net income from continuing operations
(2670)
(1251)
1238
5343
Interest expense
319
217
124
16
Investment income
- 0
- 0
(549)
(394)
Income tax (benefit)expense
(135)
(1148)
48
(1654)
Depreciation and amortization
1466
1137
908
2503
EBITDA
(1020)
(1045)
1769
5814
Share-based compensation
860
715
628
1544
Non-Recurring Charges (1)
- 0
596
751
1390
Amortization of Inventory Step-up
- 0
- 0
- 0
725
Adjusted EBITDA
$ (160)
$ 266
$ 3148
$ 9473
1
Non-recurring charges include the following 2017) CEO separation costs and other share-based compensation 2018) Transaction-related expenses associated with the acquisition of Micron Optics Inc 2019) Transaction related expenses and inventory step-up amortization relate to General Photonics acquisition and CFO transition expenses
Luna Innovations Incorporated
Reconciliation of Non-GAAP Financial Measures
(in thousands)
Three Months Ended
Six Months Ended
June 30
June 30
2020
2019
2020
2019
(Unaudited)
(Unaudited)
Reconciliation of EBITDA and Adjusted EBITDA
Net income
$ 1369
$ - 0
$ 841
$ 253
$ - 0
$ 1967
Loss from discontinued operations net of income tax benefit of $464
- 0
- 0
- 0
1436
- 0
- 0
Gain on sale of asset
- 0
- 0
- 0
- 0
- 0
- 0
Net income from continuing operations
1369
- 0
841
1689
- 0
1967
Interest expense
1
- 0
- 0
1
- 0
13
Investment income
(4)
- 0
(77)
(64)
- 0
(268)
Income tax expense(benefit)
441
- 0
247
579
- 0
(1618)
Depreciation and amortization
684
- 0
653
1363
- 0
1166
EBITDA
2490
- 0
1664
3568
- 0
1260
Share-based compensation
465
- 0
378
967
- 0
721
Non-Recurring Charges (1)
- 0
- 0
44
- 0
- 0
942
CFO Recruiting and Severance
- 0
- 0
- 0
- 0
- 0
- 0
Amortization of Inventory Step-up
- 0
- 0
310
- 0
- 0
412
- 0
- 0
- 0
- 0
- 0
- 0
Adjusted EBITDA
$ 2955
$ - 0
$ 2396
$ 4535
$ - 0
$ 3335
EBITDA Margin Percent on Total Revenues
134
93
100
39
Adjusted EBITDA Margin Percent on Total Revenues
159
134
127
102
Reconciliation of Non-GAAP EPS
Diluted EPS
$ 004
$ 002
$ 001
$ 005
Loss from discontinued operations net of income taxes
Existing Technology amortization missed from 101518-63019
- 0
15560
Amortization catch up from 101518-63019 in July 2019 only
In-process RampD
200000
0
- 0
1650000
4091764
Micron Purchase Amortization Detail - 812019 and forward
Trade Name
150000
36
4167
Customer Relationships
100000
84
1190
Existing Technology
1200000
60
20000
Amortization going forward
In-process RampD
200000
0
- 0
1650000
2535714
General Pho Purchase Amortization Detail - 312019
Trade Name
400000
36
11111
22822
Customer Relationships
600000
180
3333
22834
Existing Technology
7200000
96
75000
22827
In-process RampD
- 0
0
- 0
8200000
8944444
General Pho Inventory Step-up Amortization - 312019
WIP amp Fin Goods
724760
7
103537
Ends 93019
PampL Summary - Luna Innovations
For the Three Months Ending March 31 2020
QTD
QTD
QTD
YTD
YTD
YTD
Actual
Budget
Variance
Actual
Budget
Variance
fav(un-fav)
fav(un-fav)
Revenues
Lightwave
12933344
13366455
(433536)
24487335
25564000
(1077090)
686
Luna Labs
5642348
6075202
(432854)
11229350
11675307
(445957)
314
Total Revenues
18575692
19441657
(866390)
35716685
37239307
(1523047)
Cost of Revenues
Product and Licensing
5181057
5789978
608921
10066386
11082697
1016311
282
TDD
3877888
4448571
570683
7769627
8526736
757109
218
Total Cost of Revenues
9058945
10238549
570683
17836013
19609433
1773420
499
Gross Margin
Product and Licensing - $
7752287
7576477
175810
14420949
14481303
(60354)
Product and Licensing -
60
57
3
59
57
2
TDD - $
1764460
1626631
137829
3459723
3148571
311152
TDD -
31
27
4
31
27
4
Total Gross Margin
9516747
9203108
313639
17880672
17629874
250798
Gross Margin
51
47
4
50
47
3
501
Operating Expenses
Selling General amp Admin
6202338
8155800
1953888
12578977
14477853
1899301
Research Devel amp Engineering
1504800
647122
(857678)
3101865
2798808
(303057)
Total Operating Expenses
7707138
8802922
1096209
15680842
17276661
1595819
439
Operating Income (Loss)
1809609
400186
1409423
2199830
353213
1846617
62
Other Expense (Income)
Interest
930
985
55
1145
2195
1050
00
Investment Income
(4435)
(75000)
(70565)
(63790)
(150000)
(86210)
-02
Tax Expense
440626
118551
(498831)
579203
125253
(630706)
16
Tax Benefit from release of VA
-
-
-
-
-
-
00
Gainloss on foreigh exch
-
-
-
-
-
-
00
Other
3649
-
(3649)
(5236)
-
5236
-00
440770
44536
(396234)
511322
(22552)
(533874)
14
Income from continuing operations
1368839
355650
1805658
1688508
375765
2380491
Income from Disc Ops
Operating Income from Disc Ops
-
-
- 0
-
-
- 0
Gainloss of Asset Sale
-
-
- 0
(1435903)
-
(1435903)
Total Income from Disc Ops
- 0
- 0
- 0
(1435903)
- 0
(1435903)
Net Income (Loss)
1368839
355650
1013189
252605
375765
(123160)
07
Dividend on Preferred
- 0
- 0
- 0
- 0
- 0
- 0
Net Income (Loss) available to Common Shareholders
1368839
355650
1013189
252605
375765
(123160)
07
Depreciation
244214
491046
From Cash Flow
Amortization
439787
872410
From Cash Flow
Stock Compensation
465109
966932
From Cash Flow
Acquisition Costs
- 0
- 0
Amortization of Inventory Step-up
- 0
- 0
CFO Recruiting amp Severance
- 0
- 0
Treasury Stock Activity
63020
Stock Buyback - Held with Northland
Trade date
Settlement Date
of Shares
Avg Price
Commission
Trade date Total $
Number of Days
Weighted Avg
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
= Trades Not Settled
$000
$000
$000
$000
YTD Avg
0
0
Trade date
Settlement Date
of Shares
Avg Price
Commission
Trade date Total $
Number of Days
Weighted Avg
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
QTD Avg
0
0
0
0
2016 Amounts under program
205500
$24880840
$25086340
2017 Amounts under program
433179
$75649353
$76082532
2018 Amounts under program
132450
$30604099
$30736549
2019 Amounts under program
333953
$198663889
$199999701
Total
110508200
329798181
331905122
For Q Disclosure
Management Buyback - Held with AST
Date
Shares
YTD days os
YTD weighted avg
QTD days os
QTD Weighted Avg
Month
Quarter
Year
52720
Garrett James
6500
35
1250
35
2500
Jan
31
- 0
- 0
52720
Graeff Scott
17450
35
3356
35
6712
Feb
29
- 0
- 0
52720
Soller Brian
9000
35
1731
35
3462
Mar
31
91
91
44013
- 0
91
- 0
Apr
30
- 0
- 0
44013
- 0
91
- 0
May
31
- 0
- 0
44013
- 0
91
- 0
Jun
30
91
182
44013
- 0
91
- 0
Jul
31
- 0
- 0
44013
- 0
91
- 0
Aug
31
- 0
- 0
44013
- 0
91
- 0
Sept
30
92
274
- 0
- 0
Oct
31
- 0
- 0
- 0
- 0
Nov
30
- 0
- 0
- 0
- 0
Dec
31
92
366
32950
6337
12673
BOD buyback
YTD
$000
$000
44013
- 0
Qtr
$000
$000
44013
- 0
Luna
Date
CloseLast
1220
738
Average Close Price
1320
718
Year-To-Date
$ 696
1620
73
Quarter-To-Date
$ 652
1720
735
1820
756
1920
777
11020
787
11320
803
11420
804
11520
832
11620
85
11720
845
12120
827
12220
833
12320
849
12420
844
12720
828
12820
856
12920
85
13020
846
13120
819
2320
825
2420
821
2520
82
2620
819
2720
837
21020
85
21120
858
21220
904
21320
895
21420
897
21820
891
21920
891
22020
907
22120
923
22420
861
22520
745
22620
759
22720
707
22820
67
3220
713
3320
693
3420
719
3520
689
3620
75
3920
672
31020
66
31120
599
31220
521
31320
522
31620
491
31720
553
31820
473
31920
487
32020
48
32320
509
32420
543
32520
582
32620
617
32720
583
33020
623
33120
615
4120
585
4220
583
4320
572
4620
607
4720
605
4820
631
4920
665
41320
656
41420
683
41520
711
41620
734
41720
727
42020
73
42120
672
42220
683
42320
691
42420
715
42720
721
42820
74
42920
777
43020
763
5120
724
5420
751
5520
762
5620
76
5720
749
5820
782
51120
704
51220
705
51320
62
51420
578
51520
537
51820
591
51920
625
52020
61
52120
6
52220
609
52620
615
52720
62
52820
609
52920
61
6120
629
6220
628
6320
653
6420
649
6520
663
6820
667
6920
635
61020
643
61120
583
61220
606
61520
625
61620
631
61720
615
61820
599
61920
601
62220
616
62320
624
62420
615
62520
615
62620
571
62920
585
63020
584
Qtr
1
2
3
4
Options
Options
Aggregate Strike Price
Intrinsic Value
Outstanding
Exercisable
Outstanding
Exercisable
Outstanding
Exercisable
Luna
2418245
1309606
$6482283
$2709686
7767068
4952824
2418245
1309606
6482283
2709686
7767068
4952824
Warrants Aaron Chase Aaron ChaseCarilion exercised all warrants in Q2 and Q3 2018
0
0
0
0
2418245
1309606
6482283
2709686
Average Strike Price
$ 268
$ 207
Pull Cancelled for whole year
Cancels
Q1
35659 Aaron Chase Aaron Chase22999 of canceled shares didnrsquot show up until Q2-20 report
Aaron Chase Aaron ChaseCarilion exercised all warrants in Q2 and Q3 2018
$ 364
12990180
Outstanding 12312019
3160397
Q2
13124
$ 211
2769912
Q3
- 0
ERRORDIV0
- 0
Grants
20000
Q4
- 0
ERRORDIV0
- 0
Exercised
(662965)
48783
$ 323
15760092
Canceled
(48783)
Corrected Termed EEs from 2019
(50404)
These were corrected in June 2020
2418245
Remaining life
Options
Avg Life
- 0
Outstanding
Luna
2418245
644
Exercisable
1309606
474
Remaining service
Luna
2418245
See awards outstanding by grant price range report and Disclosure report for information on this tab
Luna Innovations
Additional Notes
EPS Calculations
During Jan-2019 and 2020 Management was awarded Performance Based Grants and Time Based Grants
63020
The Performance Based Grants vest after 3 years and are issued only if the performance is achieved
The Time Based Grants vest each year for 3 years Grants are issued once vested each year
Yearly BOD Grants
Basic EPS
DSU deferred stock units vest in a year but do not become issued until the Director leaves the Board This started in 2018
Net Income (loss) Per Share from Continuing Operations
YTD
Diluted
QTD
Diluted
DSU awards vest in May 2021 and will be added to the middle section of the EPS in May 2021
Net Income from Continuing Operations
1688508
1368839
Rich Roedel
8877
704
62500
Common Shares Outstanding
30484797
30589249
Barry Phelps
5326
704
37500
$ 006
$ 005
$ 004
$ 004
Leigh Anderson
5326
704
37500
Mary Beth Vitale
5326
704
37500
Net income (loss) Per Share attributable to common shareholders
RSU restricted stock units vest and are issued in a year and will be added to the bottom of the EPS in May 2021
Net Income (Loss) available to Shareholders
252605
1368839
Don Pastor
5326
704
37500
Common Shares Outstanding
30484797
30589249
Gary Spiegel
5326
704
37500
$ 001
$ 001
$ 004
$ 004
Net income (loss) Per Share from Discontinued Operations
Net Income from Discontinued Operations
(1435903)
- 0
Common Shares Outstanding
30484797
30589249
$ (005)
$ (004)
$ - 0
$ - 0
Diluted EPS
Net Income(Loss) available to SHs
252605
1368839
Common Shares Outstanding
30484797
30589249
Common Stock Equivalent
2010153
1876873
$ 001
- 0 Grant Thornton LLP Grant Thornton LLPAs earnings from continuing operations are negative (loss) basic and diluted EPS equal one another
$ 004 Grant Thornton LLP Grant Thornton LLPAs earnings from continuing operations are negative (loss) basic and diluted EPS equal one another
- 0 Grant Thornton LLP Grant Thornton LLPAs earnings from continuing operations are negative (loss) basic and diluted EPS equal one another
Non-GAAP Diluted EPS
Net income (loss) Per Share attributable to common shareholders
Net Income (Loss) available to Shareholders
252605
1368839
Loss from discontinued operations
1435903
- 0
Share-based compensation
966932
465109
Amortization of acquired intangibles
344405
688810
Acquisition related costs
- 0
- 0
Amortization of Inventory Step-up
- 0
- 0
Common Shares Outstanding
30484797
30589249
Common Stock Equivalent
2010153
1876873
$ 009
$ 008
YTD
QTD
Total issued shares
32470276
Average Close Price
$ 696
$ 652
Total treasury
1672741
Shares Outstanding
30797535
Net change in denominator
1404924 Kelly Bewick Aaron Chasesee Dilution (stock option) dilutive tab
1264984
BOD fees paid in DSUs Aaron Chase Aaron ChaseFrom Equity Award Transactions Report
Month
Quarter
Year
Balance at 112019 - DSU outstanding
591457
591457
Jan
31
Issued during Q1 2020
7114
7114
Feb
29
Issued during Q2 2020
3947
7894
Mar
31
91
91
Annual grant DSU vested 5112020
10521 KBSResults KBSResultsEnter 2019 DSU annual grant when vest in 2020 (probably May) you do not need to enter annual RSU because it will be issued in AST
21042
Apr
30
Deferred Equity Issuance 6012020
(7809) KBSResults Aaron ChaseM Wise and J Williamson retired from the BoD in May 2020 Wise Deferred Comp will be issued every June 1 for 10 years Williamson Deferred Comp will be issued every June 1 for 5 years
Grant Thornton LLP Grant Thornton LLPAs earnings from continuing operations are negative (loss) basic and diluted EPS equal one another
Grant Thornton LLP Grant Thornton LLPAs earnings from continuing operations are negative (loss) basic and diluted EPS equal one another
(15619)
May
31
Issued during Q3 2020
- 0
- 0
Jun
30
91
182
Issued during Q4 2020
- 0
- 0
Jul
31
Aug
31
Sept
30
92
274
Oct
31
Totals (Antidilutive)
2010153
1876873
Nov
30
Dec
31
92
366
Shares Outstanding as of 112020
31788896
As Of Date
Transaction
Reason
Name
Shares Issued
Shares Retired
Running Total
01012020
Normal
Balance Roll Forward
- 0
- 0
31788896
01082020
Normal
Option Exercise
Williamson John
12000000
- 0
31908896
01082020
Normal
Retirement - Vested Restriced Stock
Exer Options
Williamson John
- 0
2000000
31888896
01102020
Normal
Option Exercise
Roedel Rich
6000000
- 0
31948896
01142020
Normal
2019 Time-Based RSU Vesting
Messick Dale
666700
- 0
31955563
01142020
Normal
2019 Time-Based RSU Vesting
Graeff Scott
3066700
- 0
31986230
01142020
Normal
2019 Time-Based RSU Vesting
Soller Brian
1066700
- 0
31996897
01142020
Normal
2019 Time-Based RSU Vesting
Garrett James
766700
- 0
32004564
01142020
Normal
2019 Time-Based RSU Retirement
Taxes
Graeff Scott
- 0
920000
31995364
01142020
Normal
2019 Time-Based RSU Retirement
Taxes
Soller Brian
- 0
320000
31992164
01142020
Normal
2019 Time-Based RSU Retirement
Taxes
Garrett James
- 0
230000
31989864
01142020
Normal
Option Exercise
Burris Kevin
100000
- 0
31990864
01292020
Normal
Option Exercise
Carr Dustin
3212300
- 0
32022987
01272020
Normal
Option Exercise
Chen James
334000
- 0
32026327
02192020
Normal
Option Exercise
McPherson Daniel
534800
- 0
32031675
03122020
Normal
Option Exercise
Haber Todd
2500000
- 0
32056675
03122020
Normal
Option Exercise
Graver Thomas
4558100
- 0
32102256
03122020
Normal
Option Exercise
Baez Michael
911200
- 0
32111368
03062020
Normal
Option Exercise
Farooqui Salvan
1500000
- 0
32126368
05122020
Normal
Option Exercise
Baez Michael
950000
- 0
32135868
05142020
Normal
Option Exercise
Haber Todd
4300000
- 0
32178868
05142020
Normal
Option Exercise
Graver Thomas
4746100
- 0
32226329
05112020
Normal
Annual Equity Grant Vesting-BoD
Pastor Don
580000
- 0
32232129
05112020
Normal
Annual Equity Grant Vesting-BoD
Williamson John
580000
- 0
32237929
06012020
Normal
Deferred Stock Issuance-BoD
Wise Mike
980900
- 0
32247738
06012020
Normal
Deferred Stock Issuance-BoD
Williamson John
3756800
32285306
06112020
Normal
Option Exercise
Wise Mike
24000000
32525306
06112020
Normal
Retirement - Vested Stock
Exer Options
Wise Mike
6153000
32463776
06082020
Normal
Option Exercise
Pruzan Michael
400000
32467776
06292020
Normal
Option Exercise
Farooqui Salvan
250000
32470276
Date Issued
Balance Outstanding
Number of Days
Weighted Avg
Treasury Shares Weighted Average
Year-to-Date
YTD
QTD
1120
31788896
182
31788896
Graeff July 2
115000
115000
1820
31908896
175
115385
Q2 2015
29925
29925
1820
31888896
175
(19231)
2014
22725
22725
11020
31948896
173
57033
2016 Mgmt buyback
73675
73675
11420
31955563
169
6191
2016 repurchase program
205500
205500
11420
31986230
169
28477
2017 Mgmt buyback
90900
90900
11420
31996897
169
9905
2017 BOD buyback
100000
100000
11420
32004564
169
7119
2017 repurchase program
433179
433179
11420
31995364
169
(8543)
2018 repurchase program
132450
132450
11420
31992164
169
(2971)
2018 Mgmt buyback
49751
49751
11420
31989864
169
(2136)
2019 Mgmt buyback
52733
52733
11420
31990864
169
929
2019 repurchase program
333953
333953
12920
32022987
154
27181
2020 Mgmt buyback
6337
12673
12720
32026327
156
2863
21920
32031675
133
3908
164612764
165246418
31220
32056675
111
15247
31220
32102256
111
27799
31220
32111368
111
5557
567659
3620
32126368
117
9643
Treasury on AST
567664
51220
32135868
50
2610
Diff
(5)
51420
32178868
48
11341
51420
32226329
48
12517
51120
32232129
51
1625
51120
32237929
51
1625
6120
32247738
30
1617
6120
32285306
30
6193
61120
32525306
20
26374
61120
32463776
20
(6762)
6820
32467776
23
505
62920
32470276
2
27
YTD Average Shares Outstanding
32130925
Quarter-to Date
112020
31788896
91
31788896
1820
31908896
91
120000
1820
31888896
91
(20000)
11020
31948896
91
60000
11420
31955563
91
6667
11420
31986230
91
30667
11420
31996897
91
10667
11420
32004564
91
7667
11420
31995364
91
(9200)
11420
31992164
91
(3200)
11420
31989864
91
(2300)
11420
31990864
91
1000
12920
32022987
91
32123
12720
32026327
91
3340
21920
32031675
91
5348
31220
32056675
91
25000
31220
32102256
91
45581
31220
32111368
91
9112
3620
32126368
91
15000
51220
32135868
50
5220
51420
32178868
48
22681
51420
32226329
48
25034
51120
32232129
51
3251
51120
32237929
51
3251
6120
32247738
30
3234
6120
32285306
30
12385
61120
32525306
20
52747
61120
32463776
20
(13523)
6820
32467776
23
1011
62920
32470276
2
55
QTD Average Shares Outstanding
32241713
C1
TA to the Summary tab
C2
TA to the Avg Stock Price tab
C3
TA to the Options Outstanding YTD tab
C4
TA to the Equity Rollforward WP
C5
TA to the AST Report in the Equity Rollfoward WP
C6
TA to the Options Outstanding QTD tab
C7
Custom 7
C8
See comment box
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
10
Sensing
Fiber optic sensors are the ldquonervesrdquo of smart materials
Lunarsquos products are the ldquobrainrdquo that collects and aggregates data from fiber sensor ldquonervesrdquo
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
11
Sensing Short-range high-resolution
Product ODiSI
High-Definition Fiber Optic Sensing Measuring strain and
temperature in composites and other advanced materials
Focus on military and commercial aerospace and automotive
temperature acceleration displacement and pressure
Focus on structural health and security
bull Buildings tunnels bridges
bull Perimeter security
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
13
Sensing Material thickness
Product Terahertz technology
Layer thickness measurements for process control inspection and non-destructive testing Advanced technology measures thickness of
opaque materials Unique measurement of composites and
coatings with easy to use hand-held tools Focus on manufacturing environments and
field test for military-aerospacebull Plastic and industrial packagingbull Used extensively on F35 and F22 for
anti-radar surface treatment
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
14
Comms Test
Increased data and video consumption Video forecasted to represent 82 of all
IP traffic in 2022 34 CAGR
Growth in mobile and 4G5G Mobile data traffic growing at 46 CAGR
Cloud services and adoption of Internet of Things Data center traffic growing at 26 CAGR 285 billion IoT networked devices by
2022
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
15
Comms Test Components
Product Optical Vector Analyzer (OVA)
Ensuring speed at the chip level
Unprecedented visibility inside devices ˗you canrsquot fix what you canrsquot see
Reduces time and cost associated with the development of high-speed optical components
Focus on enabling the carriers to move to 5G networks
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
16
Comms Test Short-haul network
Product Optical Backscatter Reflectometer (OBR)
Bandwidth demands continue to drive double-digit connectivity growth
Delivers unprecedented visibility into short-haul networks
Emerging market for on-board aircraft communications
Ensuring network ldquoup timerdquo on Lockheed Martinrsquos F-35
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
17
Luna Labs
Work with universities and government research labs to explore technological feasibility with a goal toward proof of concept
Collaborate with prime contractors government offices and federally-funded RampD centers
Work with contract manufacturers suppliers licensees and distributors to develop everything from small-scale prototypes up to and including market-ready products
Based in Charlottesville VA
2Q FY20 Results
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
19
Second-quarter 2020 Key Financial Results
Solid financial performance
$06M improvement in Adjusted EBITDA1 year-over-year
Total revenues of $186M up 4 year-over-year
Lightwave revenue of $129M up 3 year-over-year
Luna Labs revenue of $56M up 7 year-over-year
Operating income improved to $18M or 10 of total revenues in Q2 2020 from $10M or 6 of total revenues in Q2 2019 due to increased revenue and gross profit as well as improved operating expense leverage
Net income of $14M or $004 per fully diluted share for the three months ended June 30 2020 compared to $08M or $002 per fully diluted share for the three months ended June 30 2019
Adjusted EBITDA1 increased to $30M for the three months ended June 30 2020 compared to $24M for the three months ended June 30 2019
Reaffirmed 2020 outlook tighten range to $81 to $83M in total revenues
1Adj EBITDA is a non-GAAP measure Reconciliation of comparable GAAP measures to non-GAAP measures are included in the appendix to this presentation
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
20
Second-quarter 2020 and Other Recent Accomplishments
Reported solid second-quarter 2020 financial results in challenging COVID environment
Held 6 customer-facing technology educational webinars ~1000 live attendees and more than 1200 leads
Hosted worldwide virtual sales meeting with 47 attendees
Participated in virtual trade shows
Continued to monitor employee feedback with a focus on safety and well-being
Successful implementation of Employee Stock Purchase Plan with approximately 60 participation
Held successful Virtual Annual Shareholder Meeting in May
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
21
($20)
$03
$95
FY16 FY17 FY18 FY19 FY20
Adjusted EBITDA1 2
(millions)
$31
$296 $331
$429
$705
FY16 FY17 FY18 FY19 FY20
Revenue1
(millions)
$357
Strong Financial Results
1 Based on managementrsquos estimates of the impact from the divestiture of Optoelectronics Includes the acquisitions of Micron Optics and General Photonics2Adj EBITDA is a non-GAAP measure Reconciliation of comparable GAAP measures to non-GAAP measures are included in the appendix to this presentation
FY20 Guidance$810 - $830
FY20 Guidance $100 to $120
$45
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
22
A Flexible Balance Sheet and Strong Cash Position
Strong balance sheet on June 30 2020
$912M in total assets
bull $265M in cash and cash equivalents
bull $448M in working capital
Access to $10M revolving credit facility if needed
Continued focus on working capital and reinvestment in business in order to generate long-term sustainable growth
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
23
2020 Financial Outlook
Maintaining FY2020 outlook tightening our range
Total revenues of $81M to $83M
Adjusted EBITDA1 of $10M to $12M
1 Adj EBITDA is a non-GAAP measure Reconciliation of comparable GAAP measures to non-GAAP measures are included in the appendix to this presentation The outlook above does not include any future acquisitions divestitures or unanticipated events
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
24
Luna ndash Enabling the Future with Fiber
Proprietary measurement technology offering unprecedented combination of resolution accuracy and speed
Customers in attractive markets Military and Defense Communications Infrastructure Energy and Automotive
Positioned to take advantage of trends such as vehicle light-weighting and increasing demands on data centers and broadband capacity
Adequately capitalized to fund growth
Long-tenured experienced executive team board
Corporate culture of innovation and integrity
Overview
Appendix
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
26
Reconciliation of Net Income to Adjusted EBITDA
(1) Non-recurring charges consist of transaction-related expenses related to the acquisition of General Photonics
2020 2019 2020 2019
Reconciliation of EBITDA and Adjusted EBITDANet income 1369$ 841$ 253$ 1967$ Loss from discontinued operations net of income tax benefit of $464 - - 1436 -
Net income from continuing operations 1369 841 1689 1967 Interest expense 1 - 1 13 Investment income (4) (77) (64) (268) Income tax expense(benefit) 441 247 579 (1618) Depreciation and amortization 684 653 1363 1166
Reconciliation of Net Income to Adjusted EBITDA Full Year
(1) Non-recurring charges include the following 2017) CEO separation costs and other share-based compensation 2018) Transaction-related expenses associated with the acquisition of Micron Optics Inc 2019) Transaction related expenses and inventory step-up amortization relate to General Photonics acquisition and CFO transition expenses
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
28
New Segment Quarterly Results (in thousands)
March 31 2019 June 30 2019 Sep 30 2019 A Dec 31 2019 March 31 2020 June 30 2020
Total revenues 14833 17814 18389 19480 17141 18576
Cost of revenuesLightwave 4280 5334 5449 5070 4885 5181 Luna Labs 3785 3728 3665 4022 3892 3878
Total cost of revenues 8065 9062 9114 9092 8777 9059
Gross Profit 6768 8752 9275 10388 8364 9517
Operating expenseSelling general and administrative 6207 6003 5745 6416 6377 6202 Research development and engineering 1458 1735 2048 2255 1597 1505
Total operating expense 7665 7738 7793 8671 7974 7707
Operating income (897)$ 1014$ 1482$ 1717$ 390$ 1810$
A The Company revised its results for the three months ended September 30 2019 The Company has concluded these adjustments are not material individually or in the aggregate
Three Months Ended
Scott A Graeff President and CEO
Safe Harbor
Luna ndash Enabling the Future with Fiber
Luna is a global company
Luna has a clear vision and established history
Compelling business model with strong growth potential
Lightwave 2019 revenue1 snapshot
Luna Overview
Where Does Luna Play
Sensing
Sensing Short-range high-resolution
Sensing long-range high-speed
Sensing Material thickness
Comms Test
Comms Test Components
Comms Test Short-haul network
Luna Labs
2Q FY20 Results
Second-quarter 2020 Key Financial Results
Second-quarter 2020 and Other Recent Accomplishments
Slide Number 21
A Flexible Balance Sheet and Strong Cash Position
2020 Financial Outlook
Luna ndash Enabling the Future with Fiber
Appendix
Reconciliation of Net Income to Adjusted EBITDA
Reconciliation of Net Income to Adjusted EBITDA Full Year
New Segment Quarterly Results
(in thousands)
Three Months Ended
December 31 2018
A
March 31 2019
C
June 30 2019
September 30 2019
December 31 2019
March 31 2020
June 30 2020
Revenues
Lightwave
$ 11345
$ 10221
$ 12523
$ 13120
$ 13988
$ 11554
12933
Luna Labs
5548
6641
5291
5301
5492
5587
5642
Total revenues
16893
16862
17814
18421
19480
17141
18576
Cost of revenues
Lightwave
4002
3836
5334
5471
5070
4885
5181
Luna Labs
4268
4816
3728
3665
4022
3892
3878
Total cost of revenues
8270
8652
9062
9136
9092
8777
9059
Gross Profit
8623
8210
8752
9285
10388
8364
9517
Operating expense
Selling general and administrative
6394
7165
6003
5754
6415
6377
6202
Research development and engineering
1894
1708
1735
2047
2255
1597
1505
Total operating expense
8288
8873
7738
7801
8670
7974
7707
Operating income
$ 335
$ (663)
$ 1014
$ 1484
$ 1718
$ 390
$ 1810
Historical - Hidden
A
Includes $751000 of costs associated with the acquisition of Micron Optics
B
Unaudited pro forma financials assumes the General Photonics business was acquired on January 1 2019
C
Includes $898000 of costs associated with the acquisition of General Photonics
Year Ended December 31
(unaudited)
2016
2017
2018
2019
Reconciliation of EBITDA and Adjusted EBITDA
Net (loss)income
$ (2370)
$ 14615
$ 11004
$ 5343
Less income from discontinued operations net of income taxes
300
15866
9766
- 0
Loss from discontinued operations net of income tax benefit of $464
- 0
- 0
- 0
- 0
Net income from continuing operations
(2670)
(1251)
1238
5343
Interest expense
319
217
124
16
Investment income
- 0
- 0
(549)
(394)
Income tax (benefit)expense
(135)
(1148)
48
(1654)
Depreciation and amortization
1466
1137
908
2503
EBITDA
(1020)
(1045)
1769
5814
Share-based compensation
860
715
628
1544
Non-Recurring Charges (1)
- 0
596
751
1390
Amortization of Inventory Step-up
- 0
- 0
- 0
725
Adjusted EBITDA
$ (160)
$ 266
$ 3148
$ 9473
1
Non-recurring charges include the following 2017) CEO separation costs and other share-based compensation 2018) Transaction-related expenses associated with the acquisition of Micron Optics Inc 2019) Transaction related expenses and inventory step-up amortization relate to General Photonics acquisition and CFO transition expenses
Luna Innovations Incorporated
Reconciliation of Non-GAAP Financial Measures
(in thousands)
Three Months Ended
Six Months Ended
June 30
June 30
2020
2019
2020
2019
(Unaudited)
(Unaudited)
Reconciliation of EBITDA and Adjusted EBITDA
Net income
$ 1369
$ - 0
$ 841
$ 253
$ - 0
$ 1967
Loss from discontinued operations net of income tax benefit of $464
- 0
- 0
- 0
1436
- 0
- 0
Gain on sale of asset
- 0
- 0
- 0
- 0
- 0
- 0
Net income from continuing operations
1369
- 0
841
1689
- 0
1967
Interest expense
1
- 0
- 0
1
- 0
13
Investment income
(4)
- 0
(77)
(64)
- 0
(268)
Income tax expense(benefit)
441
- 0
247
579
- 0
(1618)
Depreciation and amortization
684
- 0
653
1363
- 0
1166
EBITDA
2490
- 0
1664
3568
- 0
1260
Share-based compensation
465
- 0
378
967
- 0
721
Non-Recurring Charges (1)
- 0
- 0
44
- 0
- 0
942
CFO Recruiting and Severance
- 0
- 0
- 0
- 0
- 0
- 0
Amortization of Inventory Step-up
- 0
- 0
310
- 0
- 0
412
- 0
- 0
- 0
- 0
- 0
- 0
Adjusted EBITDA
$ 2955
$ - 0
$ 2396
$ 4535
$ - 0
$ 3335
EBITDA Margin Percent on Total Revenues
134
93
100
39
Adjusted EBITDA Margin Percent on Total Revenues
159
134
127
102
Reconciliation of Non-GAAP EPS
Diluted EPS
$ 004
$ 002
$ 001
$ 005
Loss from discontinued operations net of income taxes
Existing Technology amortization missed from 101518-63019
- 0
15560
Amortization catch up from 101518-63019 in July 2019 only
In-process RampD
200000
0
- 0
1650000
4091764
Micron Purchase Amortization Detail - 812019 and forward
Trade Name
150000
36
4167
Customer Relationships
100000
84
1190
Existing Technology
1200000
60
20000
Amortization going forward
In-process RampD
200000
0
- 0
1650000
2535714
General Pho Purchase Amortization Detail - 312019
Trade Name
400000
36
11111
22822
Customer Relationships
600000
180
3333
22834
Existing Technology
7200000
96
75000
22827
In-process RampD
- 0
0
- 0
8200000
8944444
General Pho Inventory Step-up Amortization - 312019
WIP amp Fin Goods
724760
7
103537
Ends 93019
PampL Summary - Luna Innovations
For the Three Months Ending March 31 2020
QTD
QTD
QTD
YTD
YTD
YTD
Actual
Budget
Variance
Actual
Budget
Variance
fav(un-fav)
fav(un-fav)
Revenues
Lightwave
12933344
13366455
(433536)
24487335
25564000
(1077090)
686
Luna Labs
5642348
6075202
(432854)
11229350
11675307
(445957)
314
Total Revenues
18575692
19441657
(866390)
35716685
37239307
(1523047)
Cost of Revenues
Product and Licensing
5181057
5789978
608921
10066386
11082697
1016311
282
TDD
3877888
4448571
570683
7769627
8526736
757109
218
Total Cost of Revenues
9058945
10238549
570683
17836013
19609433
1773420
499
Gross Margin
Product and Licensing - $
7752287
7576477
175810
14420949
14481303
(60354)
Product and Licensing -
60
57
3
59
57
2
TDD - $
1764460
1626631
137829
3459723
3148571
311152
TDD -
31
27
4
31
27
4
Total Gross Margin
9516747
9203108
313639
17880672
17629874
250798
Gross Margin
51
47
4
50
47
3
501
Operating Expenses
Selling General amp Admin
6202338
8155800
1953888
12578977
14477853
1899301
Research Devel amp Engineering
1504800
647122
(857678)
3101865
2798808
(303057)
Total Operating Expenses
7707138
8802922
1096209
15680842
17276661
1595819
439
Operating Income (Loss)
1809609
400186
1409423
2199830
353213
1846617
62
Other Expense (Income)
Interest
930
985
55
1145
2195
1050
00
Investment Income
(4435)
(75000)
(70565)
(63790)
(150000)
(86210)
-02
Tax Expense
440626
118551
(498831)
579203
125253
(630706)
16
Tax Benefit from release of VA
-
-
-
-
-
-
00
Gainloss on foreigh exch
-
-
-
-
-
-
00
Other
3649
-
(3649)
(5236)
-
5236
-00
440770
44536
(396234)
511322
(22552)
(533874)
14
Income from continuing operations
1368839
355650
1805658
1688508
375765
2380491
Income from Disc Ops
Operating Income from Disc Ops
-
-
- 0
-
-
- 0
Gainloss of Asset Sale
-
-
- 0
(1435903)
-
(1435903)
Total Income from Disc Ops
- 0
- 0
- 0
(1435903)
- 0
(1435903)
Net Income (Loss)
1368839
355650
1013189
252605
375765
(123160)
07
Dividend on Preferred
- 0
- 0
- 0
- 0
- 0
- 0
Net Income (Loss) available to Common Shareholders
1368839
355650
1013189
252605
375765
(123160)
07
Depreciation
244214
491046
From Cash Flow
Amortization
439787
872410
From Cash Flow
Stock Compensation
465109
966932
From Cash Flow
Acquisition Costs
- 0
- 0
Amortization of Inventory Step-up
- 0
- 0
CFO Recruiting amp Severance
- 0
- 0
Treasury Stock Activity
63020
Stock Buyback - Held with Northland
Trade date
Settlement Date
of Shares
Avg Price
Commission
Trade date Total $
Number of Days
Weighted Avg
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
= Trades Not Settled
$000
$000
$000
$000
YTD Avg
0
0
Trade date
Settlement Date
of Shares
Avg Price
Commission
Trade date Total $
Number of Days
Weighted Avg
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
QTD Avg
0
0
0
0
2016 Amounts under program
205500
$24880840
$25086340
2017 Amounts under program
433179
$75649353
$76082532
2018 Amounts under program
132450
$30604099
$30736549
2019 Amounts under program
333953
$198663889
$199999701
Total
110508200
329798181
331905122
For Q Disclosure
Management Buyback - Held with AST
Date
Shares
YTD days os
YTD weighted avg
QTD days os
QTD Weighted Avg
Month
Quarter
Year
52720
Garrett James
6500
35
1250
35
2500
Jan
31
- 0
- 0
52720
Graeff Scott
17450
35
3356
35
6712
Feb
29
- 0
- 0
52720
Soller Brian
9000
35
1731
35
3462
Mar
31
91
91
44013
- 0
91
- 0
Apr
30
- 0
- 0
44013
- 0
91
- 0
May
31
- 0
- 0
44013
- 0
91
- 0
Jun
30
91
182
44013
- 0
91
- 0
Jul
31
- 0
- 0
44013
- 0
91
- 0
Aug
31
- 0
- 0
44013
- 0
91
- 0
Sept
30
92
274
- 0
- 0
Oct
31
- 0
- 0
- 0
- 0
Nov
30
- 0
- 0
- 0
- 0
Dec
31
92
366
32950
6337
12673
BOD buyback
YTD
$000
$000
44013
- 0
Qtr
$000
$000
44013
- 0
Luna
Date
CloseLast
1220
738
Average Close Price
1320
718
Year-To-Date
$ 696
1620
73
Quarter-To-Date
$ 652
1720
735
1820
756
1920
777
11020
787
11320
803
11420
804
11520
832
11620
85
11720
845
12120
827
12220
833
12320
849
12420
844
12720
828
12820
856
12920
85
13020
846
13120
819
2320
825
2420
821
2520
82
2620
819
2720
837
21020
85
21120
858
21220
904
21320
895
21420
897
21820
891
21920
891
22020
907
22120
923
22420
861
22520
745
22620
759
22720
707
22820
67
3220
713
3320
693
3420
719
3520
689
3620
75
3920
672
31020
66
31120
599
31220
521
31320
522
31620
491
31720
553
31820
473
31920
487
32020
48
32320
509
32420
543
32520
582
32620
617
32720
583
33020
623
33120
615
4120
585
4220
583
4320
572
4620
607
4720
605
4820
631
4920
665
41320
656
41420
683
41520
711
41620
734
41720
727
42020
73
42120
672
42220
683
42320
691
42420
715
42720
721
42820
74
42920
777
43020
763
5120
724
5420
751
5520
762
5620
76
5720
749
5820
782
51120
704
51220
705
51320
62
51420
578
51520
537
51820
591
51920
625
52020
61
52120
6
52220
609
52620
615
52720
62
52820
609
52920
61
6120
629
6220
628
6320
653
6420
649
6520
663
6820
667
6920
635
61020
643
61120
583
61220
606
61520
625
61620
631
61720
615
61820
599
61920
601
62220
616
62320
624
62420
615
62520
615
62620
571
62920
585
63020
584
Qtr
1
2
3
4
Options
Options
Aggregate Strike Price
Intrinsic Value
Outstanding
Exercisable
Outstanding
Exercisable
Outstanding
Exercisable
Luna
2418245
1309606
$6482283
$2709686
7767068
4952824
2418245
1309606
6482283
2709686
7767068
4952824
Warrants Aaron Chase Aaron ChaseCarilion exercised all warrants in Q2 and Q3 2018
0
0
0
0
2418245
1309606
6482283
2709686
Average Strike Price
$ 268
$ 207
Pull Cancelled for whole year
Cancels
Q1
35659 Aaron Chase Aaron Chase22999 of canceled shares didnrsquot show up until Q2-20 report
Aaron Chase Aaron ChaseCarilion exercised all warrants in Q2 and Q3 2018
$ 364
12990180
Outstanding 12312019
3160397
Q2
13124
$ 211
2769912
Q3
- 0
ERRORDIV0
- 0
Grants
20000
Q4
- 0
ERRORDIV0
- 0
Exercised
(662965)
48783
$ 323
15760092
Canceled
(48783)
Corrected Termed EEs from 2019
(50404)
These were corrected in June 2020
2418245
Remaining life
Options
Avg Life
- 0
Outstanding
Luna
2418245
644
Exercisable
1309606
474
Remaining service
Luna
2418245
See awards outstanding by grant price range report and Disclosure report for information on this tab
Luna Innovations
Additional Notes
EPS Calculations
During Jan-2019 and 2020 Management was awarded Performance Based Grants and Time Based Grants
63020
The Performance Based Grants vest after 3 years and are issued only if the performance is achieved
The Time Based Grants vest each year for 3 years Grants are issued once vested each year
Yearly BOD Grants
Basic EPS
DSU deferred stock units vest in a year but do not become issued until the Director leaves the Board This started in 2018
Net Income (loss) Per Share from Continuing Operations
YTD
Diluted
QTD
Diluted
DSU awards vest in May 2021 and will be added to the middle section of the EPS in May 2021
Net Income from Continuing Operations
1688508
1368839
Rich Roedel
8877
704
62500
Common Shares Outstanding
30484797
30589249
Barry Phelps
5326
704
37500
$ 006
$ 005
$ 004
$ 004
Leigh Anderson
5326
704
37500
Mary Beth Vitale
5326
704
37500
Net income (loss) Per Share attributable to common shareholders
RSU restricted stock units vest and are issued in a year and will be added to the bottom of the EPS in May 2021
Net Income (Loss) available to Shareholders
252605
1368839
Don Pastor
5326
704
37500
Common Shares Outstanding
30484797
30589249
Gary Spiegel
5326
704
37500
$ 001
$ 001
$ 004
$ 004
Net income (loss) Per Share from Discontinued Operations
Net Income from Discontinued Operations
(1435903)
- 0
Common Shares Outstanding
30484797
30589249
$ (005)
$ (004)
$ - 0
$ - 0
Diluted EPS
Net Income(Loss) available to SHs
252605
1368839
Common Shares Outstanding
30484797
30589249
Common Stock Equivalent
2010153
1876873
$ 001
- 0 Grant Thornton LLP Grant Thornton LLPAs earnings from continuing operations are negative (loss) basic and diluted EPS equal one another
$ 004 Grant Thornton LLP Grant Thornton LLPAs earnings from continuing operations are negative (loss) basic and diluted EPS equal one another
- 0 Grant Thornton LLP Grant Thornton LLPAs earnings from continuing operations are negative (loss) basic and diluted EPS equal one another
Non-GAAP Diluted EPS
Net income (loss) Per Share attributable to common shareholders
Net Income (Loss) available to Shareholders
252605
1368839
Loss from discontinued operations
1435903
- 0
Share-based compensation
966932
465109
Amortization of acquired intangibles
344405
688810
Acquisition related costs
- 0
- 0
Amortization of Inventory Step-up
- 0
- 0
Common Shares Outstanding
30484797
30589249
Common Stock Equivalent
2010153
1876873
$ 009
$ 008
YTD
QTD
Total issued shares
32470276
Average Close Price
$ 696
$ 652
Total treasury
1672741
Shares Outstanding
30797535
Net change in denominator
1404924 Kelly Bewick Aaron Chasesee Dilution (stock option) dilutive tab
1264984
BOD fees paid in DSUs Aaron Chase Aaron ChaseFrom Equity Award Transactions Report
Month
Quarter
Year
Balance at 112019 - DSU outstanding
591457
591457
Jan
31
Issued during Q1 2020
7114
7114
Feb
29
Issued during Q2 2020
3947
7894
Mar
31
91
91
Annual grant DSU vested 5112020
10521 KBSResults KBSResultsEnter 2019 DSU annual grant when vest in 2020 (probably May) you do not need to enter annual RSU because it will be issued in AST
21042
Apr
30
Deferred Equity Issuance 6012020
(7809) KBSResults Aaron ChaseM Wise and J Williamson retired from the BoD in May 2020 Wise Deferred Comp will be issued every June 1 for 10 years Williamson Deferred Comp will be issued every June 1 for 5 years
Grant Thornton LLP Grant Thornton LLPAs earnings from continuing operations are negative (loss) basic and diluted EPS equal one another
Grant Thornton LLP Grant Thornton LLPAs earnings from continuing operations are negative (loss) basic and diluted EPS equal one another
(15619)
May
31
Issued during Q3 2020
- 0
- 0
Jun
30
91
182
Issued during Q4 2020
- 0
- 0
Jul
31
Aug
31
Sept
30
92
274
Oct
31
Totals (Antidilutive)
2010153
1876873
Nov
30
Dec
31
92
366
Shares Outstanding as of 112020
31788896
As Of Date
Transaction
Reason
Name
Shares Issued
Shares Retired
Running Total
01012020
Normal
Balance Roll Forward
- 0
- 0
31788896
01082020
Normal
Option Exercise
Williamson John
12000000
- 0
31908896
01082020
Normal
Retirement - Vested Restriced Stock
Exer Options
Williamson John
- 0
2000000
31888896
01102020
Normal
Option Exercise
Roedel Rich
6000000
- 0
31948896
01142020
Normal
2019 Time-Based RSU Vesting
Messick Dale
666700
- 0
31955563
01142020
Normal
2019 Time-Based RSU Vesting
Graeff Scott
3066700
- 0
31986230
01142020
Normal
2019 Time-Based RSU Vesting
Soller Brian
1066700
- 0
31996897
01142020
Normal
2019 Time-Based RSU Vesting
Garrett James
766700
- 0
32004564
01142020
Normal
2019 Time-Based RSU Retirement
Taxes
Graeff Scott
- 0
920000
31995364
01142020
Normal
2019 Time-Based RSU Retirement
Taxes
Soller Brian
- 0
320000
31992164
01142020
Normal
2019 Time-Based RSU Retirement
Taxes
Garrett James
- 0
230000
31989864
01142020
Normal
Option Exercise
Burris Kevin
100000
- 0
31990864
01292020
Normal
Option Exercise
Carr Dustin
3212300
- 0
32022987
01272020
Normal
Option Exercise
Chen James
334000
- 0
32026327
02192020
Normal
Option Exercise
McPherson Daniel
534800
- 0
32031675
03122020
Normal
Option Exercise
Haber Todd
2500000
- 0
32056675
03122020
Normal
Option Exercise
Graver Thomas
4558100
- 0
32102256
03122020
Normal
Option Exercise
Baez Michael
911200
- 0
32111368
03062020
Normal
Option Exercise
Farooqui Salvan
1500000
- 0
32126368
05122020
Normal
Option Exercise
Baez Michael
950000
- 0
32135868
05142020
Normal
Option Exercise
Haber Todd
4300000
- 0
32178868
05142020
Normal
Option Exercise
Graver Thomas
4746100
- 0
32226329
05112020
Normal
Annual Equity Grant Vesting-BoD
Pastor Don
580000
- 0
32232129
05112020
Normal
Annual Equity Grant Vesting-BoD
Williamson John
580000
- 0
32237929
06012020
Normal
Deferred Stock Issuance-BoD
Wise Mike
980900
- 0
32247738
06012020
Normal
Deferred Stock Issuance-BoD
Williamson John
3756800
32285306
06112020
Normal
Option Exercise
Wise Mike
24000000
32525306
06112020
Normal
Retirement - Vested Stock
Exer Options
Wise Mike
6153000
32463776
06082020
Normal
Option Exercise
Pruzan Michael
400000
32467776
06292020
Normal
Option Exercise
Farooqui Salvan
250000
32470276
Date Issued
Balance Outstanding
Number of Days
Weighted Avg
Treasury Shares Weighted Average
Year-to-Date
YTD
QTD
1120
31788896
182
31788896
Graeff July 2
115000
115000
1820
31908896
175
115385
Q2 2015
29925
29925
1820
31888896
175
(19231)
2014
22725
22725
11020
31948896
173
57033
2016 Mgmt buyback
73675
73675
11420
31955563
169
6191
2016 repurchase program
205500
205500
11420
31986230
169
28477
2017 Mgmt buyback
90900
90900
11420
31996897
169
9905
2017 BOD buyback
100000
100000
11420
32004564
169
7119
2017 repurchase program
433179
433179
11420
31995364
169
(8543)
2018 repurchase program
132450
132450
11420
31992164
169
(2971)
2018 Mgmt buyback
49751
49751
11420
31989864
169
(2136)
2019 Mgmt buyback
52733
52733
11420
31990864
169
929
2019 repurchase program
333953
333953
12920
32022987
154
27181
2020 Mgmt buyback
6337
12673
12720
32026327
156
2863
21920
32031675
133
3908
164612764
165246418
31220
32056675
111
15247
31220
32102256
111
27799
31220
32111368
111
5557
567659
3620
32126368
117
9643
Treasury on AST
567664
51220
32135868
50
2610
Diff
(5)
51420
32178868
48
11341
51420
32226329
48
12517
51120
32232129
51
1625
51120
32237929
51
1625
6120
32247738
30
1617
6120
32285306
30
6193
61120
32525306
20
26374
61120
32463776
20
(6762)
6820
32467776
23
505
62920
32470276
2
27
YTD Average Shares Outstanding
32130925
Quarter-to Date
112020
31788896
91
31788896
1820
31908896
91
120000
1820
31888896
91
(20000)
11020
31948896
91
60000
11420
31955563
91
6667
11420
31986230
91
30667
11420
31996897
91
10667
11420
32004564
91
7667
11420
31995364
91
(9200)
11420
31992164
91
(3200)
11420
31989864
91
(2300)
11420
31990864
91
1000
12920
32022987
91
32123
12720
32026327
91
3340
21920
32031675
91
5348
31220
32056675
91
25000
31220
32102256
91
45581
31220
32111368
91
9112
3620
32126368
91
15000
51220
32135868
50
5220
51420
32178868
48
22681
51420
32226329
48
25034
51120
32232129
51
3251
51120
32237929
51
3251
6120
32247738
30
3234
6120
32285306
30
12385
61120
32525306
20
52747
61120
32463776
20
(13523)
6820
32467776
23
1011
62920
32470276
2
55
QTD Average Shares Outstanding
32241713
C1
TA to the Summary tab
C2
TA to the Avg Stock Price tab
C3
TA to the Options Outstanding YTD tab
C4
TA to the Equity Rollforward WP
C5
TA to the AST Report in the Equity Rollfoward WP
C6
TA to the Options Outstanding QTD tab
C7
Custom 7
C8
See comment box
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
11
Sensing Short-range high-resolution
Product ODiSI
High-Definition Fiber Optic Sensing Measuring strain and
temperature in composites and other advanced materials
Focus on military and commercial aerospace and automotive
temperature acceleration displacement and pressure
Focus on structural health and security
bull Buildings tunnels bridges
bull Perimeter security
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
13
Sensing Material thickness
Product Terahertz technology
Layer thickness measurements for process control inspection and non-destructive testing Advanced technology measures thickness of
opaque materials Unique measurement of composites and
coatings with easy to use hand-held tools Focus on manufacturing environments and
field test for military-aerospacebull Plastic and industrial packagingbull Used extensively on F35 and F22 for
anti-radar surface treatment
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
14
Comms Test
Increased data and video consumption Video forecasted to represent 82 of all
IP traffic in 2022 34 CAGR
Growth in mobile and 4G5G Mobile data traffic growing at 46 CAGR
Cloud services and adoption of Internet of Things Data center traffic growing at 26 CAGR 285 billion IoT networked devices by
2022
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
15
Comms Test Components
Product Optical Vector Analyzer (OVA)
Ensuring speed at the chip level
Unprecedented visibility inside devices ˗you canrsquot fix what you canrsquot see
Reduces time and cost associated with the development of high-speed optical components
Focus on enabling the carriers to move to 5G networks
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
16
Comms Test Short-haul network
Product Optical Backscatter Reflectometer (OBR)
Bandwidth demands continue to drive double-digit connectivity growth
Delivers unprecedented visibility into short-haul networks
Emerging market for on-board aircraft communications
Ensuring network ldquoup timerdquo on Lockheed Martinrsquos F-35
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
17
Luna Labs
Work with universities and government research labs to explore technological feasibility with a goal toward proof of concept
Collaborate with prime contractors government offices and federally-funded RampD centers
Work with contract manufacturers suppliers licensees and distributors to develop everything from small-scale prototypes up to and including market-ready products
Based in Charlottesville VA
2Q FY20 Results
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
19
Second-quarter 2020 Key Financial Results
Solid financial performance
$06M improvement in Adjusted EBITDA1 year-over-year
Total revenues of $186M up 4 year-over-year
Lightwave revenue of $129M up 3 year-over-year
Luna Labs revenue of $56M up 7 year-over-year
Operating income improved to $18M or 10 of total revenues in Q2 2020 from $10M or 6 of total revenues in Q2 2019 due to increased revenue and gross profit as well as improved operating expense leverage
Net income of $14M or $004 per fully diluted share for the three months ended June 30 2020 compared to $08M or $002 per fully diluted share for the three months ended June 30 2019
Adjusted EBITDA1 increased to $30M for the three months ended June 30 2020 compared to $24M for the three months ended June 30 2019
Reaffirmed 2020 outlook tighten range to $81 to $83M in total revenues
1Adj EBITDA is a non-GAAP measure Reconciliation of comparable GAAP measures to non-GAAP measures are included in the appendix to this presentation
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
20
Second-quarter 2020 and Other Recent Accomplishments
Reported solid second-quarter 2020 financial results in challenging COVID environment
Held 6 customer-facing technology educational webinars ~1000 live attendees and more than 1200 leads
Hosted worldwide virtual sales meeting with 47 attendees
Participated in virtual trade shows
Continued to monitor employee feedback with a focus on safety and well-being
Successful implementation of Employee Stock Purchase Plan with approximately 60 participation
Held successful Virtual Annual Shareholder Meeting in May
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
21
($20)
$03
$95
FY16 FY17 FY18 FY19 FY20
Adjusted EBITDA1 2
(millions)
$31
$296 $331
$429
$705
FY16 FY17 FY18 FY19 FY20
Revenue1
(millions)
$357
Strong Financial Results
1 Based on managementrsquos estimates of the impact from the divestiture of Optoelectronics Includes the acquisitions of Micron Optics and General Photonics2Adj EBITDA is a non-GAAP measure Reconciliation of comparable GAAP measures to non-GAAP measures are included in the appendix to this presentation
FY20 Guidance$810 - $830
FY20 Guidance $100 to $120
$45
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
22
A Flexible Balance Sheet and Strong Cash Position
Strong balance sheet on June 30 2020
$912M in total assets
bull $265M in cash and cash equivalents
bull $448M in working capital
Access to $10M revolving credit facility if needed
Continued focus on working capital and reinvestment in business in order to generate long-term sustainable growth
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
23
2020 Financial Outlook
Maintaining FY2020 outlook tightening our range
Total revenues of $81M to $83M
Adjusted EBITDA1 of $10M to $12M
1 Adj EBITDA is a non-GAAP measure Reconciliation of comparable GAAP measures to non-GAAP measures are included in the appendix to this presentation The outlook above does not include any future acquisitions divestitures or unanticipated events
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
24
Luna ndash Enabling the Future with Fiber
Proprietary measurement technology offering unprecedented combination of resolution accuracy and speed
Customers in attractive markets Military and Defense Communications Infrastructure Energy and Automotive
Positioned to take advantage of trends such as vehicle light-weighting and increasing demands on data centers and broadband capacity
Adequately capitalized to fund growth
Long-tenured experienced executive team board
Corporate culture of innovation and integrity
Overview
Appendix
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
26
Reconciliation of Net Income to Adjusted EBITDA
(1) Non-recurring charges consist of transaction-related expenses related to the acquisition of General Photonics
2020 2019 2020 2019
Reconciliation of EBITDA and Adjusted EBITDANet income 1369$ 841$ 253$ 1967$ Loss from discontinued operations net of income tax benefit of $464 - - 1436 -
Net income from continuing operations 1369 841 1689 1967 Interest expense 1 - 1 13 Investment income (4) (77) (64) (268) Income tax expense(benefit) 441 247 579 (1618) Depreciation and amortization 684 653 1363 1166
Reconciliation of Net Income to Adjusted EBITDA Full Year
(1) Non-recurring charges include the following 2017) CEO separation costs and other share-based compensation 2018) Transaction-related expenses associated with the acquisition of Micron Optics Inc 2019) Transaction related expenses and inventory step-up amortization relate to General Photonics acquisition and CFO transition expenses
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
28
New Segment Quarterly Results (in thousands)
March 31 2019 June 30 2019 Sep 30 2019 A Dec 31 2019 March 31 2020 June 30 2020
Total revenues 14833 17814 18389 19480 17141 18576
Cost of revenuesLightwave 4280 5334 5449 5070 4885 5181 Luna Labs 3785 3728 3665 4022 3892 3878
Total cost of revenues 8065 9062 9114 9092 8777 9059
Gross Profit 6768 8752 9275 10388 8364 9517
Operating expenseSelling general and administrative 6207 6003 5745 6416 6377 6202 Research development and engineering 1458 1735 2048 2255 1597 1505
Total operating expense 7665 7738 7793 8671 7974 7707
Operating income (897)$ 1014$ 1482$ 1717$ 390$ 1810$
A The Company revised its results for the three months ended September 30 2019 The Company has concluded these adjustments are not material individually or in the aggregate
Three Months Ended
Scott A Graeff President and CEO
Safe Harbor
Luna ndash Enabling the Future with Fiber
Luna is a global company
Luna has a clear vision and established history
Compelling business model with strong growth potential
Lightwave 2019 revenue1 snapshot
Luna Overview
Where Does Luna Play
Sensing
Sensing Short-range high-resolution
Sensing long-range high-speed
Sensing Material thickness
Comms Test
Comms Test Components
Comms Test Short-haul network
Luna Labs
2Q FY20 Results
Second-quarter 2020 Key Financial Results
Second-quarter 2020 and Other Recent Accomplishments
Slide Number 21
A Flexible Balance Sheet and Strong Cash Position
2020 Financial Outlook
Luna ndash Enabling the Future with Fiber
Appendix
Reconciliation of Net Income to Adjusted EBITDA
Reconciliation of Net Income to Adjusted EBITDA Full Year
New Segment Quarterly Results
(in thousands)
Three Months Ended
December 31 2018
A
March 31 2019
C
June 30 2019
September 30 2019
December 31 2019
March 31 2020
June 30 2020
Revenues
Lightwave
$ 11345
$ 10221
$ 12523
$ 13120
$ 13988
$ 11554
12933
Luna Labs
5548
6641
5291
5301
5492
5587
5642
Total revenues
16893
16862
17814
18421
19480
17141
18576
Cost of revenues
Lightwave
4002
3836
5334
5471
5070
4885
5181
Luna Labs
4268
4816
3728
3665
4022
3892
3878
Total cost of revenues
8270
8652
9062
9136
9092
8777
9059
Gross Profit
8623
8210
8752
9285
10388
8364
9517
Operating expense
Selling general and administrative
6394
7165
6003
5754
6415
6377
6202
Research development and engineering
1894
1708
1735
2047
2255
1597
1505
Total operating expense
8288
8873
7738
7801
8670
7974
7707
Operating income
$ 335
$ (663)
$ 1014
$ 1484
$ 1718
$ 390
$ 1810
Historical - Hidden
A
Includes $751000 of costs associated with the acquisition of Micron Optics
B
Unaudited pro forma financials assumes the General Photonics business was acquired on January 1 2019
C
Includes $898000 of costs associated with the acquisition of General Photonics
Year Ended December 31
(unaudited)
2016
2017
2018
2019
Reconciliation of EBITDA and Adjusted EBITDA
Net (loss)income
$ (2370)
$ 14615
$ 11004
$ 5343
Less income from discontinued operations net of income taxes
300
15866
9766
- 0
Loss from discontinued operations net of income tax benefit of $464
- 0
- 0
- 0
- 0
Net income from continuing operations
(2670)
(1251)
1238
5343
Interest expense
319
217
124
16
Investment income
- 0
- 0
(549)
(394)
Income tax (benefit)expense
(135)
(1148)
48
(1654)
Depreciation and amortization
1466
1137
908
2503
EBITDA
(1020)
(1045)
1769
5814
Share-based compensation
860
715
628
1544
Non-Recurring Charges (1)
- 0
596
751
1390
Amortization of Inventory Step-up
- 0
- 0
- 0
725
Adjusted EBITDA
$ (160)
$ 266
$ 3148
$ 9473
1
Non-recurring charges include the following 2017) CEO separation costs and other share-based compensation 2018) Transaction-related expenses associated with the acquisition of Micron Optics Inc 2019) Transaction related expenses and inventory step-up amortization relate to General Photonics acquisition and CFO transition expenses
Luna Innovations Incorporated
Reconciliation of Non-GAAP Financial Measures
(in thousands)
Three Months Ended
Six Months Ended
June 30
June 30
2020
2019
2020
2019
(Unaudited)
(Unaudited)
Reconciliation of EBITDA and Adjusted EBITDA
Net income
$ 1369
$ - 0
$ 841
$ 253
$ - 0
$ 1967
Loss from discontinued operations net of income tax benefit of $464
- 0
- 0
- 0
1436
- 0
- 0
Gain on sale of asset
- 0
- 0
- 0
- 0
- 0
- 0
Net income from continuing operations
1369
- 0
841
1689
- 0
1967
Interest expense
1
- 0
- 0
1
- 0
13
Investment income
(4)
- 0
(77)
(64)
- 0
(268)
Income tax expense(benefit)
441
- 0
247
579
- 0
(1618)
Depreciation and amortization
684
- 0
653
1363
- 0
1166
EBITDA
2490
- 0
1664
3568
- 0
1260
Share-based compensation
465
- 0
378
967
- 0
721
Non-Recurring Charges (1)
- 0
- 0
44
- 0
- 0
942
CFO Recruiting and Severance
- 0
- 0
- 0
- 0
- 0
- 0
Amortization of Inventory Step-up
- 0
- 0
310
- 0
- 0
412
- 0
- 0
- 0
- 0
- 0
- 0
Adjusted EBITDA
$ 2955
$ - 0
$ 2396
$ 4535
$ - 0
$ 3335
EBITDA Margin Percent on Total Revenues
134
93
100
39
Adjusted EBITDA Margin Percent on Total Revenues
159
134
127
102
Reconciliation of Non-GAAP EPS
Diluted EPS
$ 004
$ 002
$ 001
$ 005
Loss from discontinued operations net of income taxes
Existing Technology amortization missed from 101518-63019
- 0
15560
Amortization catch up from 101518-63019 in July 2019 only
In-process RampD
200000
0
- 0
1650000
4091764
Micron Purchase Amortization Detail - 812019 and forward
Trade Name
150000
36
4167
Customer Relationships
100000
84
1190
Existing Technology
1200000
60
20000
Amortization going forward
In-process RampD
200000
0
- 0
1650000
2535714
General Pho Purchase Amortization Detail - 312019
Trade Name
400000
36
11111
22822
Customer Relationships
600000
180
3333
22834
Existing Technology
7200000
96
75000
22827
In-process RampD
- 0
0
- 0
8200000
8944444
General Pho Inventory Step-up Amortization - 312019
WIP amp Fin Goods
724760
7
103537
Ends 93019
PampL Summary - Luna Innovations
For the Three Months Ending March 31 2020
QTD
QTD
QTD
YTD
YTD
YTD
Actual
Budget
Variance
Actual
Budget
Variance
fav(un-fav)
fav(un-fav)
Revenues
Lightwave
12933344
13366455
(433536)
24487335
25564000
(1077090)
686
Luna Labs
5642348
6075202
(432854)
11229350
11675307
(445957)
314
Total Revenues
18575692
19441657
(866390)
35716685
37239307
(1523047)
Cost of Revenues
Product and Licensing
5181057
5789978
608921
10066386
11082697
1016311
282
TDD
3877888
4448571
570683
7769627
8526736
757109
218
Total Cost of Revenues
9058945
10238549
570683
17836013
19609433
1773420
499
Gross Margin
Product and Licensing - $
7752287
7576477
175810
14420949
14481303
(60354)
Product and Licensing -
60
57
3
59
57
2
TDD - $
1764460
1626631
137829
3459723
3148571
311152
TDD -
31
27
4
31
27
4
Total Gross Margin
9516747
9203108
313639
17880672
17629874
250798
Gross Margin
51
47
4
50
47
3
501
Operating Expenses
Selling General amp Admin
6202338
8155800
1953888
12578977
14477853
1899301
Research Devel amp Engineering
1504800
647122
(857678)
3101865
2798808
(303057)
Total Operating Expenses
7707138
8802922
1096209
15680842
17276661
1595819
439
Operating Income (Loss)
1809609
400186
1409423
2199830
353213
1846617
62
Other Expense (Income)
Interest
930
985
55
1145
2195
1050
00
Investment Income
(4435)
(75000)
(70565)
(63790)
(150000)
(86210)
-02
Tax Expense
440626
118551
(498831)
579203
125253
(630706)
16
Tax Benefit from release of VA
-
-
-
-
-
-
00
Gainloss on foreigh exch
-
-
-
-
-
-
00
Other
3649
-
(3649)
(5236)
-
5236
-00
440770
44536
(396234)
511322
(22552)
(533874)
14
Income from continuing operations
1368839
355650
1805658
1688508
375765
2380491
Income from Disc Ops
Operating Income from Disc Ops
-
-
- 0
-
-
- 0
Gainloss of Asset Sale
-
-
- 0
(1435903)
-
(1435903)
Total Income from Disc Ops
- 0
- 0
- 0
(1435903)
- 0
(1435903)
Net Income (Loss)
1368839
355650
1013189
252605
375765
(123160)
07
Dividend on Preferred
- 0
- 0
- 0
- 0
- 0
- 0
Net Income (Loss) available to Common Shareholders
1368839
355650
1013189
252605
375765
(123160)
07
Depreciation
244214
491046
From Cash Flow
Amortization
439787
872410
From Cash Flow
Stock Compensation
465109
966932
From Cash Flow
Acquisition Costs
- 0
- 0
Amortization of Inventory Step-up
- 0
- 0
CFO Recruiting amp Severance
- 0
- 0
Treasury Stock Activity
63020
Stock Buyback - Held with Northland
Trade date
Settlement Date
of Shares
Avg Price
Commission
Trade date Total $
Number of Days
Weighted Avg
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
= Trades Not Settled
$000
$000
$000
$000
YTD Avg
0
0
Trade date
Settlement Date
of Shares
Avg Price
Commission
Trade date Total $
Number of Days
Weighted Avg
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
QTD Avg
0
0
0
0
2016 Amounts under program
205500
$24880840
$25086340
2017 Amounts under program
433179
$75649353
$76082532
2018 Amounts under program
132450
$30604099
$30736549
2019 Amounts under program
333953
$198663889
$199999701
Total
110508200
329798181
331905122
For Q Disclosure
Management Buyback - Held with AST
Date
Shares
YTD days os
YTD weighted avg
QTD days os
QTD Weighted Avg
Month
Quarter
Year
52720
Garrett James
6500
35
1250
35
2500
Jan
31
- 0
- 0
52720
Graeff Scott
17450
35
3356
35
6712
Feb
29
- 0
- 0
52720
Soller Brian
9000
35
1731
35
3462
Mar
31
91
91
44013
- 0
91
- 0
Apr
30
- 0
- 0
44013
- 0
91
- 0
May
31
- 0
- 0
44013
- 0
91
- 0
Jun
30
91
182
44013
- 0
91
- 0
Jul
31
- 0
- 0
44013
- 0
91
- 0
Aug
31
- 0
- 0
44013
- 0
91
- 0
Sept
30
92
274
- 0
- 0
Oct
31
- 0
- 0
- 0
- 0
Nov
30
- 0
- 0
- 0
- 0
Dec
31
92
366
32950
6337
12673
BOD buyback
YTD
$000
$000
44013
- 0
Qtr
$000
$000
44013
- 0
Luna
Date
CloseLast
1220
738
Average Close Price
1320
718
Year-To-Date
$ 696
1620
73
Quarter-To-Date
$ 652
1720
735
1820
756
1920
777
11020
787
11320
803
11420
804
11520
832
11620
85
11720
845
12120
827
12220
833
12320
849
12420
844
12720
828
12820
856
12920
85
13020
846
13120
819
2320
825
2420
821
2520
82
2620
819
2720
837
21020
85
21120
858
21220
904
21320
895
21420
897
21820
891
21920
891
22020
907
22120
923
22420
861
22520
745
22620
759
22720
707
22820
67
3220
713
3320
693
3420
719
3520
689
3620
75
3920
672
31020
66
31120
599
31220
521
31320
522
31620
491
31720
553
31820
473
31920
487
32020
48
32320
509
32420
543
32520
582
32620
617
32720
583
33020
623
33120
615
4120
585
4220
583
4320
572
4620
607
4720
605
4820
631
4920
665
41320
656
41420
683
41520
711
41620
734
41720
727
42020
73
42120
672
42220
683
42320
691
42420
715
42720
721
42820
74
42920
777
43020
763
5120
724
5420
751
5520
762
5620
76
5720
749
5820
782
51120
704
51220
705
51320
62
51420
578
51520
537
51820
591
51920
625
52020
61
52120
6
52220
609
52620
615
52720
62
52820
609
52920
61
6120
629
6220
628
6320
653
6420
649
6520
663
6820
667
6920
635
61020
643
61120
583
61220
606
61520
625
61620
631
61720
615
61820
599
61920
601
62220
616
62320
624
62420
615
62520
615
62620
571
62920
585
63020
584
Qtr
1
2
3
4
Options
Options
Aggregate Strike Price
Intrinsic Value
Outstanding
Exercisable
Outstanding
Exercisable
Outstanding
Exercisable
Luna
2418245
1309606
$6482283
$2709686
7767068
4952824
2418245
1309606
6482283
2709686
7767068
4952824
Warrants Aaron Chase Aaron ChaseCarilion exercised all warrants in Q2 and Q3 2018
0
0
0
0
2418245
1309606
6482283
2709686
Average Strike Price
$ 268
$ 207
Pull Cancelled for whole year
Cancels
Q1
35659 Aaron Chase Aaron Chase22999 of canceled shares didnrsquot show up until Q2-20 report
Aaron Chase Aaron ChaseCarilion exercised all warrants in Q2 and Q3 2018
$ 364
12990180
Outstanding 12312019
3160397
Q2
13124
$ 211
2769912
Q3
- 0
ERRORDIV0
- 0
Grants
20000
Q4
- 0
ERRORDIV0
- 0
Exercised
(662965)
48783
$ 323
15760092
Canceled
(48783)
Corrected Termed EEs from 2019
(50404)
These were corrected in June 2020
2418245
Remaining life
Options
Avg Life
- 0
Outstanding
Luna
2418245
644
Exercisable
1309606
474
Remaining service
Luna
2418245
See awards outstanding by grant price range report and Disclosure report for information on this tab
Luna Innovations
Additional Notes
EPS Calculations
During Jan-2019 and 2020 Management was awarded Performance Based Grants and Time Based Grants
63020
The Performance Based Grants vest after 3 years and are issued only if the performance is achieved
The Time Based Grants vest each year for 3 years Grants are issued once vested each year
Yearly BOD Grants
Basic EPS
DSU deferred stock units vest in a year but do not become issued until the Director leaves the Board This started in 2018
Net Income (loss) Per Share from Continuing Operations
YTD
Diluted
QTD
Diluted
DSU awards vest in May 2021 and will be added to the middle section of the EPS in May 2021
Net Income from Continuing Operations
1688508
1368839
Rich Roedel
8877
704
62500
Common Shares Outstanding
30484797
30589249
Barry Phelps
5326
704
37500
$ 006
$ 005
$ 004
$ 004
Leigh Anderson
5326
704
37500
Mary Beth Vitale
5326
704
37500
Net income (loss) Per Share attributable to common shareholders
RSU restricted stock units vest and are issued in a year and will be added to the bottom of the EPS in May 2021
Net Income (Loss) available to Shareholders
252605
1368839
Don Pastor
5326
704
37500
Common Shares Outstanding
30484797
30589249
Gary Spiegel
5326
704
37500
$ 001
$ 001
$ 004
$ 004
Net income (loss) Per Share from Discontinued Operations
Net Income from Discontinued Operations
(1435903)
- 0
Common Shares Outstanding
30484797
30589249
$ (005)
$ (004)
$ - 0
$ - 0
Diluted EPS
Net Income(Loss) available to SHs
252605
1368839
Common Shares Outstanding
30484797
30589249
Common Stock Equivalent
2010153
1876873
$ 001
- 0 Grant Thornton LLP Grant Thornton LLPAs earnings from continuing operations are negative (loss) basic and diluted EPS equal one another
$ 004 Grant Thornton LLP Grant Thornton LLPAs earnings from continuing operations are negative (loss) basic and diluted EPS equal one another
- 0 Grant Thornton LLP Grant Thornton LLPAs earnings from continuing operations are negative (loss) basic and diluted EPS equal one another
Non-GAAP Diluted EPS
Net income (loss) Per Share attributable to common shareholders
Net Income (Loss) available to Shareholders
252605
1368839
Loss from discontinued operations
1435903
- 0
Share-based compensation
966932
465109
Amortization of acquired intangibles
344405
688810
Acquisition related costs
- 0
- 0
Amortization of Inventory Step-up
- 0
- 0
Common Shares Outstanding
30484797
30589249
Common Stock Equivalent
2010153
1876873
$ 009
$ 008
YTD
QTD
Total issued shares
32470276
Average Close Price
$ 696
$ 652
Total treasury
1672741
Shares Outstanding
30797535
Net change in denominator
1404924 Kelly Bewick Aaron Chasesee Dilution (stock option) dilutive tab
1264984
BOD fees paid in DSUs Aaron Chase Aaron ChaseFrom Equity Award Transactions Report
Month
Quarter
Year
Balance at 112019 - DSU outstanding
591457
591457
Jan
31
Issued during Q1 2020
7114
7114
Feb
29
Issued during Q2 2020
3947
7894
Mar
31
91
91
Annual grant DSU vested 5112020
10521 KBSResults KBSResultsEnter 2019 DSU annual grant when vest in 2020 (probably May) you do not need to enter annual RSU because it will be issued in AST
21042
Apr
30
Deferred Equity Issuance 6012020
(7809) KBSResults Aaron ChaseM Wise and J Williamson retired from the BoD in May 2020 Wise Deferred Comp will be issued every June 1 for 10 years Williamson Deferred Comp will be issued every June 1 for 5 years
Grant Thornton LLP Grant Thornton LLPAs earnings from continuing operations are negative (loss) basic and diluted EPS equal one another
Grant Thornton LLP Grant Thornton LLPAs earnings from continuing operations are negative (loss) basic and diluted EPS equal one another
temperature acceleration displacement and pressure
Focus on structural health and security
bull Buildings tunnels bridges
bull Perimeter security
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
13
Sensing Material thickness
Product Terahertz technology
Layer thickness measurements for process control inspection and non-destructive testing Advanced technology measures thickness of
opaque materials Unique measurement of composites and
coatings with easy to use hand-held tools Focus on manufacturing environments and
field test for military-aerospacebull Plastic and industrial packagingbull Used extensively on F35 and F22 for
anti-radar surface treatment
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
14
Comms Test
Increased data and video consumption Video forecasted to represent 82 of all
IP traffic in 2022 34 CAGR
Growth in mobile and 4G5G Mobile data traffic growing at 46 CAGR
Cloud services and adoption of Internet of Things Data center traffic growing at 26 CAGR 285 billion IoT networked devices by
2022
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
15
Comms Test Components
Product Optical Vector Analyzer (OVA)
Ensuring speed at the chip level
Unprecedented visibility inside devices ˗you canrsquot fix what you canrsquot see
Reduces time and cost associated with the development of high-speed optical components
Focus on enabling the carriers to move to 5G networks
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
16
Comms Test Short-haul network
Product Optical Backscatter Reflectometer (OBR)
Bandwidth demands continue to drive double-digit connectivity growth
Delivers unprecedented visibility into short-haul networks
Emerging market for on-board aircraft communications
Ensuring network ldquoup timerdquo on Lockheed Martinrsquos F-35
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
17
Luna Labs
Work with universities and government research labs to explore technological feasibility with a goal toward proof of concept
Collaborate with prime contractors government offices and federally-funded RampD centers
Work with contract manufacturers suppliers licensees and distributors to develop everything from small-scale prototypes up to and including market-ready products
Based in Charlottesville VA
2Q FY20 Results
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
19
Second-quarter 2020 Key Financial Results
Solid financial performance
$06M improvement in Adjusted EBITDA1 year-over-year
Total revenues of $186M up 4 year-over-year
Lightwave revenue of $129M up 3 year-over-year
Luna Labs revenue of $56M up 7 year-over-year
Operating income improved to $18M or 10 of total revenues in Q2 2020 from $10M or 6 of total revenues in Q2 2019 due to increased revenue and gross profit as well as improved operating expense leverage
Net income of $14M or $004 per fully diluted share for the three months ended June 30 2020 compared to $08M or $002 per fully diluted share for the three months ended June 30 2019
Adjusted EBITDA1 increased to $30M for the three months ended June 30 2020 compared to $24M for the three months ended June 30 2019
Reaffirmed 2020 outlook tighten range to $81 to $83M in total revenues
1Adj EBITDA is a non-GAAP measure Reconciliation of comparable GAAP measures to non-GAAP measures are included in the appendix to this presentation
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
20
Second-quarter 2020 and Other Recent Accomplishments
Reported solid second-quarter 2020 financial results in challenging COVID environment
Held 6 customer-facing technology educational webinars ~1000 live attendees and more than 1200 leads
Hosted worldwide virtual sales meeting with 47 attendees
Participated in virtual trade shows
Continued to monitor employee feedback with a focus on safety and well-being
Successful implementation of Employee Stock Purchase Plan with approximately 60 participation
Held successful Virtual Annual Shareholder Meeting in May
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
21
($20)
$03
$95
FY16 FY17 FY18 FY19 FY20
Adjusted EBITDA1 2
(millions)
$31
$296 $331
$429
$705
FY16 FY17 FY18 FY19 FY20
Revenue1
(millions)
$357
Strong Financial Results
1 Based on managementrsquos estimates of the impact from the divestiture of Optoelectronics Includes the acquisitions of Micron Optics and General Photonics2Adj EBITDA is a non-GAAP measure Reconciliation of comparable GAAP measures to non-GAAP measures are included in the appendix to this presentation
FY20 Guidance$810 - $830
FY20 Guidance $100 to $120
$45
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
22
A Flexible Balance Sheet and Strong Cash Position
Strong balance sheet on June 30 2020
$912M in total assets
bull $265M in cash and cash equivalents
bull $448M in working capital
Access to $10M revolving credit facility if needed
Continued focus on working capital and reinvestment in business in order to generate long-term sustainable growth
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
23
2020 Financial Outlook
Maintaining FY2020 outlook tightening our range
Total revenues of $81M to $83M
Adjusted EBITDA1 of $10M to $12M
1 Adj EBITDA is a non-GAAP measure Reconciliation of comparable GAAP measures to non-GAAP measures are included in the appendix to this presentation The outlook above does not include any future acquisitions divestitures or unanticipated events
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
24
Luna ndash Enabling the Future with Fiber
Proprietary measurement technology offering unprecedented combination of resolution accuracy and speed
Customers in attractive markets Military and Defense Communications Infrastructure Energy and Automotive
Positioned to take advantage of trends such as vehicle light-weighting and increasing demands on data centers and broadband capacity
Adequately capitalized to fund growth
Long-tenured experienced executive team board
Corporate culture of innovation and integrity
Overview
Appendix
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
26
Reconciliation of Net Income to Adjusted EBITDA
(1) Non-recurring charges consist of transaction-related expenses related to the acquisition of General Photonics
2020 2019 2020 2019
Reconciliation of EBITDA and Adjusted EBITDANet income 1369$ 841$ 253$ 1967$ Loss from discontinued operations net of income tax benefit of $464 - - 1436 -
Net income from continuing operations 1369 841 1689 1967 Interest expense 1 - 1 13 Investment income (4) (77) (64) (268) Income tax expense(benefit) 441 247 579 (1618) Depreciation and amortization 684 653 1363 1166
Reconciliation of Net Income to Adjusted EBITDA Full Year
(1) Non-recurring charges include the following 2017) CEO separation costs and other share-based compensation 2018) Transaction-related expenses associated with the acquisition of Micron Optics Inc 2019) Transaction related expenses and inventory step-up amortization relate to General Photonics acquisition and CFO transition expenses
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
28
New Segment Quarterly Results (in thousands)
March 31 2019 June 30 2019 Sep 30 2019 A Dec 31 2019 March 31 2020 June 30 2020
Total revenues 14833 17814 18389 19480 17141 18576
Cost of revenuesLightwave 4280 5334 5449 5070 4885 5181 Luna Labs 3785 3728 3665 4022 3892 3878
Total cost of revenues 8065 9062 9114 9092 8777 9059
Gross Profit 6768 8752 9275 10388 8364 9517
Operating expenseSelling general and administrative 6207 6003 5745 6416 6377 6202 Research development and engineering 1458 1735 2048 2255 1597 1505
Total operating expense 7665 7738 7793 8671 7974 7707
Operating income (897)$ 1014$ 1482$ 1717$ 390$ 1810$
A The Company revised its results for the three months ended September 30 2019 The Company has concluded these adjustments are not material individually or in the aggregate
Three Months Ended
Scott A Graeff President and CEO
Safe Harbor
Luna ndash Enabling the Future with Fiber
Luna is a global company
Luna has a clear vision and established history
Compelling business model with strong growth potential
Lightwave 2019 revenue1 snapshot
Luna Overview
Where Does Luna Play
Sensing
Sensing Short-range high-resolution
Sensing long-range high-speed
Sensing Material thickness
Comms Test
Comms Test Components
Comms Test Short-haul network
Luna Labs
2Q FY20 Results
Second-quarter 2020 Key Financial Results
Second-quarter 2020 and Other Recent Accomplishments
Slide Number 21
A Flexible Balance Sheet and Strong Cash Position
2020 Financial Outlook
Luna ndash Enabling the Future with Fiber
Appendix
Reconciliation of Net Income to Adjusted EBITDA
Reconciliation of Net Income to Adjusted EBITDA Full Year
New Segment Quarterly Results
(in thousands)
Three Months Ended
December 31 2018
A
March 31 2019
C
June 30 2019
September 30 2019
December 31 2019
March 31 2020
June 30 2020
Revenues
Lightwave
$ 11345
$ 10221
$ 12523
$ 13120
$ 13988
$ 11554
12933
Luna Labs
5548
6641
5291
5301
5492
5587
5642
Total revenues
16893
16862
17814
18421
19480
17141
18576
Cost of revenues
Lightwave
4002
3836
5334
5471
5070
4885
5181
Luna Labs
4268
4816
3728
3665
4022
3892
3878
Total cost of revenues
8270
8652
9062
9136
9092
8777
9059
Gross Profit
8623
8210
8752
9285
10388
8364
9517
Operating expense
Selling general and administrative
6394
7165
6003
5754
6415
6377
6202
Research development and engineering
1894
1708
1735
2047
2255
1597
1505
Total operating expense
8288
8873
7738
7801
8670
7974
7707
Operating income
$ 335
$ (663)
$ 1014
$ 1484
$ 1718
$ 390
$ 1810
Historical - Hidden
A
Includes $751000 of costs associated with the acquisition of Micron Optics
B
Unaudited pro forma financials assumes the General Photonics business was acquired on January 1 2019
C
Includes $898000 of costs associated with the acquisition of General Photonics
Year Ended December 31
(unaudited)
2016
2017
2018
2019
Reconciliation of EBITDA and Adjusted EBITDA
Net (loss)income
$ (2370)
$ 14615
$ 11004
$ 5343
Less income from discontinued operations net of income taxes
300
15866
9766
- 0
Loss from discontinued operations net of income tax benefit of $464
- 0
- 0
- 0
- 0
Net income from continuing operations
(2670)
(1251)
1238
5343
Interest expense
319
217
124
16
Investment income
- 0
- 0
(549)
(394)
Income tax (benefit)expense
(135)
(1148)
48
(1654)
Depreciation and amortization
1466
1137
908
2503
EBITDA
(1020)
(1045)
1769
5814
Share-based compensation
860
715
628
1544
Non-Recurring Charges (1)
- 0
596
751
1390
Amortization of Inventory Step-up
- 0
- 0
- 0
725
Adjusted EBITDA
$ (160)
$ 266
$ 3148
$ 9473
1
Non-recurring charges include the following 2017) CEO separation costs and other share-based compensation 2018) Transaction-related expenses associated with the acquisition of Micron Optics Inc 2019) Transaction related expenses and inventory step-up amortization relate to General Photonics acquisition and CFO transition expenses
Luna Innovations Incorporated
Reconciliation of Non-GAAP Financial Measures
(in thousands)
Three Months Ended
Six Months Ended
June 30
June 30
2020
2019
2020
2019
(Unaudited)
(Unaudited)
Reconciliation of EBITDA and Adjusted EBITDA
Net income
$ 1369
$ - 0
$ 841
$ 253
$ - 0
$ 1967
Loss from discontinued operations net of income tax benefit of $464
- 0
- 0
- 0
1436
- 0
- 0
Gain on sale of asset
- 0
- 0
- 0
- 0
- 0
- 0
Net income from continuing operations
1369
- 0
841
1689
- 0
1967
Interest expense
1
- 0
- 0
1
- 0
13
Investment income
(4)
- 0
(77)
(64)
- 0
(268)
Income tax expense(benefit)
441
- 0
247
579
- 0
(1618)
Depreciation and amortization
684
- 0
653
1363
- 0
1166
EBITDA
2490
- 0
1664
3568
- 0
1260
Share-based compensation
465
- 0
378
967
- 0
721
Non-Recurring Charges (1)
- 0
- 0
44
- 0
- 0
942
CFO Recruiting and Severance
- 0
- 0
- 0
- 0
- 0
- 0
Amortization of Inventory Step-up
- 0
- 0
310
- 0
- 0
412
- 0
- 0
- 0
- 0
- 0
- 0
Adjusted EBITDA
$ 2955
$ - 0
$ 2396
$ 4535
$ - 0
$ 3335
EBITDA Margin Percent on Total Revenues
134
93
100
39
Adjusted EBITDA Margin Percent on Total Revenues
159
134
127
102
Reconciliation of Non-GAAP EPS
Diluted EPS
$ 004
$ 002
$ 001
$ 005
Loss from discontinued operations net of income taxes
Existing Technology amortization missed from 101518-63019
- 0
15560
Amortization catch up from 101518-63019 in July 2019 only
In-process RampD
200000
0
- 0
1650000
4091764
Micron Purchase Amortization Detail - 812019 and forward
Trade Name
150000
36
4167
Customer Relationships
100000
84
1190
Existing Technology
1200000
60
20000
Amortization going forward
In-process RampD
200000
0
- 0
1650000
2535714
General Pho Purchase Amortization Detail - 312019
Trade Name
400000
36
11111
22822
Customer Relationships
600000
180
3333
22834
Existing Technology
7200000
96
75000
22827
In-process RampD
- 0
0
- 0
8200000
8944444
General Pho Inventory Step-up Amortization - 312019
WIP amp Fin Goods
724760
7
103537
Ends 93019
PampL Summary - Luna Innovations
For the Three Months Ending March 31 2020
QTD
QTD
QTD
YTD
YTD
YTD
Actual
Budget
Variance
Actual
Budget
Variance
fav(un-fav)
fav(un-fav)
Revenues
Lightwave
12933344
13366455
(433536)
24487335
25564000
(1077090)
686
Luna Labs
5642348
6075202
(432854)
11229350
11675307
(445957)
314
Total Revenues
18575692
19441657
(866390)
35716685
37239307
(1523047)
Cost of Revenues
Product and Licensing
5181057
5789978
608921
10066386
11082697
1016311
282
TDD
3877888
4448571
570683
7769627
8526736
757109
218
Total Cost of Revenues
9058945
10238549
570683
17836013
19609433
1773420
499
Gross Margin
Product and Licensing - $
7752287
7576477
175810
14420949
14481303
(60354)
Product and Licensing -
60
57
3
59
57
2
TDD - $
1764460
1626631
137829
3459723
3148571
311152
TDD -
31
27
4
31
27
4
Total Gross Margin
9516747
9203108
313639
17880672
17629874
250798
Gross Margin
51
47
4
50
47
3
501
Operating Expenses
Selling General amp Admin
6202338
8155800
1953888
12578977
14477853
1899301
Research Devel amp Engineering
1504800
647122
(857678)
3101865
2798808
(303057)
Total Operating Expenses
7707138
8802922
1096209
15680842
17276661
1595819
439
Operating Income (Loss)
1809609
400186
1409423
2199830
353213
1846617
62
Other Expense (Income)
Interest
930
985
55
1145
2195
1050
00
Investment Income
(4435)
(75000)
(70565)
(63790)
(150000)
(86210)
-02
Tax Expense
440626
118551
(498831)
579203
125253
(630706)
16
Tax Benefit from release of VA
-
-
-
-
-
-
00
Gainloss on foreigh exch
-
-
-
-
-
-
00
Other
3649
-
(3649)
(5236)
-
5236
-00
440770
44536
(396234)
511322
(22552)
(533874)
14
Income from continuing operations
1368839
355650
1805658
1688508
375765
2380491
Income from Disc Ops
Operating Income from Disc Ops
-
-
- 0
-
-
- 0
Gainloss of Asset Sale
-
-
- 0
(1435903)
-
(1435903)
Total Income from Disc Ops
- 0
- 0
- 0
(1435903)
- 0
(1435903)
Net Income (Loss)
1368839
355650
1013189
252605
375765
(123160)
07
Dividend on Preferred
- 0
- 0
- 0
- 0
- 0
- 0
Net Income (Loss) available to Common Shareholders
1368839
355650
1013189
252605
375765
(123160)
07
Depreciation
244214
491046
From Cash Flow
Amortization
439787
872410
From Cash Flow
Stock Compensation
465109
966932
From Cash Flow
Acquisition Costs
- 0
- 0
Amortization of Inventory Step-up
- 0
- 0
CFO Recruiting amp Severance
- 0
- 0
Treasury Stock Activity
63020
Stock Buyback - Held with Northland
Trade date
Settlement Date
of Shares
Avg Price
Commission
Trade date Total $
Number of Days
Weighted Avg
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
= Trades Not Settled
$000
$000
$000
$000
YTD Avg
0
0
Trade date
Settlement Date
of Shares
Avg Price
Commission
Trade date Total $
Number of Days
Weighted Avg
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
QTD Avg
0
0
0
0
2016 Amounts under program
205500
$24880840
$25086340
2017 Amounts under program
433179
$75649353
$76082532
2018 Amounts under program
132450
$30604099
$30736549
2019 Amounts under program
333953
$198663889
$199999701
Total
110508200
329798181
331905122
For Q Disclosure
Management Buyback - Held with AST
Date
Shares
YTD days os
YTD weighted avg
QTD days os
QTD Weighted Avg
Month
Quarter
Year
52720
Garrett James
6500
35
1250
35
2500
Jan
31
- 0
- 0
52720
Graeff Scott
17450
35
3356
35
6712
Feb
29
- 0
- 0
52720
Soller Brian
9000
35
1731
35
3462
Mar
31
91
91
44013
- 0
91
- 0
Apr
30
- 0
- 0
44013
- 0
91
- 0
May
31
- 0
- 0
44013
- 0
91
- 0
Jun
30
91
182
44013
- 0
91
- 0
Jul
31
- 0
- 0
44013
- 0
91
- 0
Aug
31
- 0
- 0
44013
- 0
91
- 0
Sept
30
92
274
- 0
- 0
Oct
31
- 0
- 0
- 0
- 0
Nov
30
- 0
- 0
- 0
- 0
Dec
31
92
366
32950
6337
12673
BOD buyback
YTD
$000
$000
44013
- 0
Qtr
$000
$000
44013
- 0
Luna
Date
CloseLast
1220
738
Average Close Price
1320
718
Year-To-Date
$ 696
1620
73
Quarter-To-Date
$ 652
1720
735
1820
756
1920
777
11020
787
11320
803
11420
804
11520
832
11620
85
11720
845
12120
827
12220
833
12320
849
12420
844
12720
828
12820
856
12920
85
13020
846
13120
819
2320
825
2420
821
2520
82
2620
819
2720
837
21020
85
21120
858
21220
904
21320
895
21420
897
21820
891
21920
891
22020
907
22120
923
22420
861
22520
745
22620
759
22720
707
22820
67
3220
713
3320
693
3420
719
3520
689
3620
75
3920
672
31020
66
31120
599
31220
521
31320
522
31620
491
31720
553
31820
473
31920
487
32020
48
32320
509
32420
543
32520
582
32620
617
32720
583
33020
623
33120
615
4120
585
4220
583
4320
572
4620
607
4720
605
4820
631
4920
665
41320
656
41420
683
41520
711
41620
734
41720
727
42020
73
42120
672
42220
683
42320
691
42420
715
42720
721
42820
74
42920
777
43020
763
5120
724
5420
751
5520
762
5620
76
5720
749
5820
782
51120
704
51220
705
51320
62
51420
578
51520
537
51820
591
51920
625
52020
61
52120
6
52220
609
52620
615
52720
62
52820
609
52920
61
6120
629
6220
628
6320
653
6420
649
6520
663
6820
667
6920
635
61020
643
61120
583
61220
606
61520
625
61620
631
61720
615
61820
599
61920
601
62220
616
62320
624
62420
615
62520
615
62620
571
62920
585
63020
584
Qtr
1
2
3
4
Options
Options
Aggregate Strike Price
Intrinsic Value
Outstanding
Exercisable
Outstanding
Exercisable
Outstanding
Exercisable
Luna
2418245
1309606
$6482283
$2709686
7767068
4952824
2418245
1309606
6482283
2709686
7767068
4952824
Warrants Aaron Chase Aaron ChaseCarilion exercised all warrants in Q2 and Q3 2018
0
0
0
0
2418245
1309606
6482283
2709686
Average Strike Price
$ 268
$ 207
Pull Cancelled for whole year
Cancels
Q1
35659 Aaron Chase Aaron Chase22999 of canceled shares didnrsquot show up until Q2-20 report
Aaron Chase Aaron ChaseCarilion exercised all warrants in Q2 and Q3 2018
$ 364
12990180
Outstanding 12312019
3160397
Q2
13124
$ 211
2769912
Q3
- 0
ERRORDIV0
- 0
Grants
20000
Q4
- 0
ERRORDIV0
- 0
Exercised
(662965)
48783
$ 323
15760092
Canceled
(48783)
Corrected Termed EEs from 2019
(50404)
These were corrected in June 2020
2418245
Remaining life
Options
Avg Life
- 0
Outstanding
Luna
2418245
644
Exercisable
1309606
474
Remaining service
Luna
2418245
See awards outstanding by grant price range report and Disclosure report for information on this tab
Luna Innovations
Additional Notes
EPS Calculations
During Jan-2019 and 2020 Management was awarded Performance Based Grants and Time Based Grants
63020
The Performance Based Grants vest after 3 years and are issued only if the performance is achieved
The Time Based Grants vest each year for 3 years Grants are issued once vested each year
Yearly BOD Grants
Basic EPS
DSU deferred stock units vest in a year but do not become issued until the Director leaves the Board This started in 2018
Net Income (loss) Per Share from Continuing Operations
YTD
Diluted
QTD
Diluted
DSU awards vest in May 2021 and will be added to the middle section of the EPS in May 2021
Net Income from Continuing Operations
1688508
1368839
Rich Roedel
8877
704
62500
Common Shares Outstanding
30484797
30589249
Barry Phelps
5326
704
37500
$ 006
$ 005
$ 004
$ 004
Leigh Anderson
5326
704
37500
Mary Beth Vitale
5326
704
37500
Net income (loss) Per Share attributable to common shareholders
RSU restricted stock units vest and are issued in a year and will be added to the bottom of the EPS in May 2021
Net Income (Loss) available to Shareholders
252605
1368839
Don Pastor
5326
704
37500
Common Shares Outstanding
30484797
30589249
Gary Spiegel
5326
704
37500
$ 001
$ 001
$ 004
$ 004
Net income (loss) Per Share from Discontinued Operations
Net Income from Discontinued Operations
(1435903)
- 0
Common Shares Outstanding
30484797
30589249
$ (005)
$ (004)
$ - 0
$ - 0
Diluted EPS
Net Income(Loss) available to SHs
252605
1368839
Common Shares Outstanding
30484797
30589249
Common Stock Equivalent
2010153
1876873
$ 001
- 0 Grant Thornton LLP Grant Thornton LLPAs earnings from continuing operations are negative (loss) basic and diluted EPS equal one another
$ 004 Grant Thornton LLP Grant Thornton LLPAs earnings from continuing operations are negative (loss) basic and diluted EPS equal one another
- 0 Grant Thornton LLP Grant Thornton LLPAs earnings from continuing operations are negative (loss) basic and diluted EPS equal one another
Non-GAAP Diluted EPS
Net income (loss) Per Share attributable to common shareholders
Net Income (Loss) available to Shareholders
252605
1368839
Loss from discontinued operations
1435903
- 0
Share-based compensation
966932
465109
Amortization of acquired intangibles
344405
688810
Acquisition related costs
- 0
- 0
Amortization of Inventory Step-up
- 0
- 0
Common Shares Outstanding
30484797
30589249
Common Stock Equivalent
2010153
1876873
$ 009
$ 008
YTD
QTD
Total issued shares
32470276
Average Close Price
$ 696
$ 652
Total treasury
1672741
Shares Outstanding
30797535
Net change in denominator
1404924 Kelly Bewick Aaron Chasesee Dilution (stock option) dilutive tab
1264984
BOD fees paid in DSUs Aaron Chase Aaron ChaseFrom Equity Award Transactions Report
Month
Quarter
Year
Balance at 112019 - DSU outstanding
591457
591457
Jan
31
Issued during Q1 2020
7114
7114
Feb
29
Issued during Q2 2020
3947
7894
Mar
31
91
91
Annual grant DSU vested 5112020
10521 KBSResults KBSResultsEnter 2019 DSU annual grant when vest in 2020 (probably May) you do not need to enter annual RSU because it will be issued in AST
21042
Apr
30
Deferred Equity Issuance 6012020
(7809) KBSResults Aaron ChaseM Wise and J Williamson retired from the BoD in May 2020 Wise Deferred Comp will be issued every June 1 for 10 years Williamson Deferred Comp will be issued every June 1 for 5 years
Grant Thornton LLP Grant Thornton LLPAs earnings from continuing operations are negative (loss) basic and diluted EPS equal one another
Grant Thornton LLP Grant Thornton LLPAs earnings from continuing operations are negative (loss) basic and diluted EPS equal one another
(15619)
May
31
Issued during Q3 2020
- 0
- 0
Jun
30
91
182
Issued during Q4 2020
- 0
- 0
Jul
31
Aug
31
Sept
30
92
274
Oct
31
Totals (Antidilutive)
2010153
1876873
Nov
30
Dec
31
92
366
Shares Outstanding as of 112020
31788896
As Of Date
Transaction
Reason
Name
Shares Issued
Shares Retired
Running Total
01012020
Normal
Balance Roll Forward
- 0
- 0
31788896
01082020
Normal
Option Exercise
Williamson John
12000000
- 0
31908896
01082020
Normal
Retirement - Vested Restriced Stock
Exer Options
Williamson John
- 0
2000000
31888896
01102020
Normal
Option Exercise
Roedel Rich
6000000
- 0
31948896
01142020
Normal
2019 Time-Based RSU Vesting
Messick Dale
666700
- 0
31955563
01142020
Normal
2019 Time-Based RSU Vesting
Graeff Scott
3066700
- 0
31986230
01142020
Normal
2019 Time-Based RSU Vesting
Soller Brian
1066700
- 0
31996897
01142020
Normal
2019 Time-Based RSU Vesting
Garrett James
766700
- 0
32004564
01142020
Normal
2019 Time-Based RSU Retirement
Taxes
Graeff Scott
- 0
920000
31995364
01142020
Normal
2019 Time-Based RSU Retirement
Taxes
Soller Brian
- 0
320000
31992164
01142020
Normal
2019 Time-Based RSU Retirement
Taxes
Garrett James
- 0
230000
31989864
01142020
Normal
Option Exercise
Burris Kevin
100000
- 0
31990864
01292020
Normal
Option Exercise
Carr Dustin
3212300
- 0
32022987
01272020
Normal
Option Exercise
Chen James
334000
- 0
32026327
02192020
Normal
Option Exercise
McPherson Daniel
534800
- 0
32031675
03122020
Normal
Option Exercise
Haber Todd
2500000
- 0
32056675
03122020
Normal
Option Exercise
Graver Thomas
4558100
- 0
32102256
03122020
Normal
Option Exercise
Baez Michael
911200
- 0
32111368
03062020
Normal
Option Exercise
Farooqui Salvan
1500000
- 0
32126368
05122020
Normal
Option Exercise
Baez Michael
950000
- 0
32135868
05142020
Normal
Option Exercise
Haber Todd
4300000
- 0
32178868
05142020
Normal
Option Exercise
Graver Thomas
4746100
- 0
32226329
05112020
Normal
Annual Equity Grant Vesting-BoD
Pastor Don
580000
- 0
32232129
05112020
Normal
Annual Equity Grant Vesting-BoD
Williamson John
580000
- 0
32237929
06012020
Normal
Deferred Stock Issuance-BoD
Wise Mike
980900
- 0
32247738
06012020
Normal
Deferred Stock Issuance-BoD
Williamson John
3756800
32285306
06112020
Normal
Option Exercise
Wise Mike
24000000
32525306
06112020
Normal
Retirement - Vested Stock
Exer Options
Wise Mike
6153000
32463776
06082020
Normal
Option Exercise
Pruzan Michael
400000
32467776
06292020
Normal
Option Exercise
Farooqui Salvan
250000
32470276
Date Issued
Balance Outstanding
Number of Days
Weighted Avg
Treasury Shares Weighted Average
Year-to-Date
YTD
QTD
1120
31788896
182
31788896
Graeff July 2
115000
115000
1820
31908896
175
115385
Q2 2015
29925
29925
1820
31888896
175
(19231)
2014
22725
22725
11020
31948896
173
57033
2016 Mgmt buyback
73675
73675
11420
31955563
169
6191
2016 repurchase program
205500
205500
11420
31986230
169
28477
2017 Mgmt buyback
90900
90900
11420
31996897
169
9905
2017 BOD buyback
100000
100000
11420
32004564
169
7119
2017 repurchase program
433179
433179
11420
31995364
169
(8543)
2018 repurchase program
132450
132450
11420
31992164
169
(2971)
2018 Mgmt buyback
49751
49751
11420
31989864
169
(2136)
2019 Mgmt buyback
52733
52733
11420
31990864
169
929
2019 repurchase program
333953
333953
12920
32022987
154
27181
2020 Mgmt buyback
6337
12673
12720
32026327
156
2863
21920
32031675
133
3908
164612764
165246418
31220
32056675
111
15247
31220
32102256
111
27799
31220
32111368
111
5557
567659
3620
32126368
117
9643
Treasury on AST
567664
51220
32135868
50
2610
Diff
(5)
51420
32178868
48
11341
51420
32226329
48
12517
51120
32232129
51
1625
51120
32237929
51
1625
6120
32247738
30
1617
6120
32285306
30
6193
61120
32525306
20
26374
61120
32463776
20
(6762)
6820
32467776
23
505
62920
32470276
2
27
YTD Average Shares Outstanding
32130925
Quarter-to Date
112020
31788896
91
31788896
1820
31908896
91
120000
1820
31888896
91
(20000)
11020
31948896
91
60000
11420
31955563
91
6667
11420
31986230
91
30667
11420
31996897
91
10667
11420
32004564
91
7667
11420
31995364
91
(9200)
11420
31992164
91
(3200)
11420
31989864
91
(2300)
11420
31990864
91
1000
12920
32022987
91
32123
12720
32026327
91
3340
21920
32031675
91
5348
31220
32056675
91
25000
31220
32102256
91
45581
31220
32111368
91
9112
3620
32126368
91
15000
51220
32135868
50
5220
51420
32178868
48
22681
51420
32226329
48
25034
51120
32232129
51
3251
51120
32237929
51
3251
6120
32247738
30
3234
6120
32285306
30
12385
61120
32525306
20
52747
61120
32463776
20
(13523)
6820
32467776
23
1011
62920
32470276
2
55
QTD Average Shares Outstanding
32241713
C1
TA to the Summary tab
C2
TA to the Avg Stock Price tab
C3
TA to the Options Outstanding YTD tab
C4
TA to the Equity Rollforward WP
C5
TA to the AST Report in the Equity Rollfoward WP
C6
TA to the Options Outstanding QTD tab
C7
Custom 7
C8
See comment box
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
13
Sensing Material thickness
Product Terahertz technology
Layer thickness measurements for process control inspection and non-destructive testing Advanced technology measures thickness of
opaque materials Unique measurement of composites and
coatings with easy to use hand-held tools Focus on manufacturing environments and
field test for military-aerospacebull Plastic and industrial packagingbull Used extensively on F35 and F22 for
anti-radar surface treatment
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
14
Comms Test
Increased data and video consumption Video forecasted to represent 82 of all
IP traffic in 2022 34 CAGR
Growth in mobile and 4G5G Mobile data traffic growing at 46 CAGR
Cloud services and adoption of Internet of Things Data center traffic growing at 26 CAGR 285 billion IoT networked devices by
2022
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
15
Comms Test Components
Product Optical Vector Analyzer (OVA)
Ensuring speed at the chip level
Unprecedented visibility inside devices ˗you canrsquot fix what you canrsquot see
Reduces time and cost associated with the development of high-speed optical components
Focus on enabling the carriers to move to 5G networks
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
16
Comms Test Short-haul network
Product Optical Backscatter Reflectometer (OBR)
Bandwidth demands continue to drive double-digit connectivity growth
Delivers unprecedented visibility into short-haul networks
Emerging market for on-board aircraft communications
Ensuring network ldquoup timerdquo on Lockheed Martinrsquos F-35
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
17
Luna Labs
Work with universities and government research labs to explore technological feasibility with a goal toward proof of concept
Collaborate with prime contractors government offices and federally-funded RampD centers
Work with contract manufacturers suppliers licensees and distributors to develop everything from small-scale prototypes up to and including market-ready products
Based in Charlottesville VA
2Q FY20 Results
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
19
Second-quarter 2020 Key Financial Results
Solid financial performance
$06M improvement in Adjusted EBITDA1 year-over-year
Total revenues of $186M up 4 year-over-year
Lightwave revenue of $129M up 3 year-over-year
Luna Labs revenue of $56M up 7 year-over-year
Operating income improved to $18M or 10 of total revenues in Q2 2020 from $10M or 6 of total revenues in Q2 2019 due to increased revenue and gross profit as well as improved operating expense leverage
Net income of $14M or $004 per fully diluted share for the three months ended June 30 2020 compared to $08M or $002 per fully diluted share for the three months ended June 30 2019
Adjusted EBITDA1 increased to $30M for the three months ended June 30 2020 compared to $24M for the three months ended June 30 2019
Reaffirmed 2020 outlook tighten range to $81 to $83M in total revenues
1Adj EBITDA is a non-GAAP measure Reconciliation of comparable GAAP measures to non-GAAP measures are included in the appendix to this presentation
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
20
Second-quarter 2020 and Other Recent Accomplishments
Reported solid second-quarter 2020 financial results in challenging COVID environment
Held 6 customer-facing technology educational webinars ~1000 live attendees and more than 1200 leads
Hosted worldwide virtual sales meeting with 47 attendees
Participated in virtual trade shows
Continued to monitor employee feedback with a focus on safety and well-being
Successful implementation of Employee Stock Purchase Plan with approximately 60 participation
Held successful Virtual Annual Shareholder Meeting in May
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
21
($20)
$03
$95
FY16 FY17 FY18 FY19 FY20
Adjusted EBITDA1 2
(millions)
$31
$296 $331
$429
$705
FY16 FY17 FY18 FY19 FY20
Revenue1
(millions)
$357
Strong Financial Results
1 Based on managementrsquos estimates of the impact from the divestiture of Optoelectronics Includes the acquisitions of Micron Optics and General Photonics2Adj EBITDA is a non-GAAP measure Reconciliation of comparable GAAP measures to non-GAAP measures are included in the appendix to this presentation
FY20 Guidance$810 - $830
FY20 Guidance $100 to $120
$45
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
22
A Flexible Balance Sheet and Strong Cash Position
Strong balance sheet on June 30 2020
$912M in total assets
bull $265M in cash and cash equivalents
bull $448M in working capital
Access to $10M revolving credit facility if needed
Continued focus on working capital and reinvestment in business in order to generate long-term sustainable growth
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
23
2020 Financial Outlook
Maintaining FY2020 outlook tightening our range
Total revenues of $81M to $83M
Adjusted EBITDA1 of $10M to $12M
1 Adj EBITDA is a non-GAAP measure Reconciliation of comparable GAAP measures to non-GAAP measures are included in the appendix to this presentation The outlook above does not include any future acquisitions divestitures or unanticipated events
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
24
Luna ndash Enabling the Future with Fiber
Proprietary measurement technology offering unprecedented combination of resolution accuracy and speed
Customers in attractive markets Military and Defense Communications Infrastructure Energy and Automotive
Positioned to take advantage of trends such as vehicle light-weighting and increasing demands on data centers and broadband capacity
Adequately capitalized to fund growth
Long-tenured experienced executive team board
Corporate culture of innovation and integrity
Overview
Appendix
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
26
Reconciliation of Net Income to Adjusted EBITDA
(1) Non-recurring charges consist of transaction-related expenses related to the acquisition of General Photonics
2020 2019 2020 2019
Reconciliation of EBITDA and Adjusted EBITDANet income 1369$ 841$ 253$ 1967$ Loss from discontinued operations net of income tax benefit of $464 - - 1436 -
Net income from continuing operations 1369 841 1689 1967 Interest expense 1 - 1 13 Investment income (4) (77) (64) (268) Income tax expense(benefit) 441 247 579 (1618) Depreciation and amortization 684 653 1363 1166
Reconciliation of Net Income to Adjusted EBITDA Full Year
(1) Non-recurring charges include the following 2017) CEO separation costs and other share-based compensation 2018) Transaction-related expenses associated with the acquisition of Micron Optics Inc 2019) Transaction related expenses and inventory step-up amortization relate to General Photonics acquisition and CFO transition expenses
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
28
New Segment Quarterly Results (in thousands)
March 31 2019 June 30 2019 Sep 30 2019 A Dec 31 2019 March 31 2020 June 30 2020
Total revenues 14833 17814 18389 19480 17141 18576
Cost of revenuesLightwave 4280 5334 5449 5070 4885 5181 Luna Labs 3785 3728 3665 4022 3892 3878
Total cost of revenues 8065 9062 9114 9092 8777 9059
Gross Profit 6768 8752 9275 10388 8364 9517
Operating expenseSelling general and administrative 6207 6003 5745 6416 6377 6202 Research development and engineering 1458 1735 2048 2255 1597 1505
Total operating expense 7665 7738 7793 8671 7974 7707
Operating income (897)$ 1014$ 1482$ 1717$ 390$ 1810$
A The Company revised its results for the three months ended September 30 2019 The Company has concluded these adjustments are not material individually or in the aggregate
Three Months Ended
Scott A Graeff President and CEO
Safe Harbor
Luna ndash Enabling the Future with Fiber
Luna is a global company
Luna has a clear vision and established history
Compelling business model with strong growth potential
Lightwave 2019 revenue1 snapshot
Luna Overview
Where Does Luna Play
Sensing
Sensing Short-range high-resolution
Sensing long-range high-speed
Sensing Material thickness
Comms Test
Comms Test Components
Comms Test Short-haul network
Luna Labs
2Q FY20 Results
Second-quarter 2020 Key Financial Results
Second-quarter 2020 and Other Recent Accomplishments
Slide Number 21
A Flexible Balance Sheet and Strong Cash Position
2020 Financial Outlook
Luna ndash Enabling the Future with Fiber
Appendix
Reconciliation of Net Income to Adjusted EBITDA
Reconciliation of Net Income to Adjusted EBITDA Full Year
New Segment Quarterly Results
(in thousands)
Three Months Ended
December 31 2018
A
March 31 2019
C
June 30 2019
September 30 2019
December 31 2019
March 31 2020
June 30 2020
Revenues
Lightwave
$ 11345
$ 10221
$ 12523
$ 13120
$ 13988
$ 11554
12933
Luna Labs
5548
6641
5291
5301
5492
5587
5642
Total revenues
16893
16862
17814
18421
19480
17141
18576
Cost of revenues
Lightwave
4002
3836
5334
5471
5070
4885
5181
Luna Labs
4268
4816
3728
3665
4022
3892
3878
Total cost of revenues
8270
8652
9062
9136
9092
8777
9059
Gross Profit
8623
8210
8752
9285
10388
8364
9517
Operating expense
Selling general and administrative
6394
7165
6003
5754
6415
6377
6202
Research development and engineering
1894
1708
1735
2047
2255
1597
1505
Total operating expense
8288
8873
7738
7801
8670
7974
7707
Operating income
$ 335
$ (663)
$ 1014
$ 1484
$ 1718
$ 390
$ 1810
Historical - Hidden
A
Includes $751000 of costs associated with the acquisition of Micron Optics
B
Unaudited pro forma financials assumes the General Photonics business was acquired on January 1 2019
C
Includes $898000 of costs associated with the acquisition of General Photonics
Year Ended December 31
(unaudited)
2016
2017
2018
2019
Reconciliation of EBITDA and Adjusted EBITDA
Net (loss)income
$ (2370)
$ 14615
$ 11004
$ 5343
Less income from discontinued operations net of income taxes
300
15866
9766
- 0
Loss from discontinued operations net of income tax benefit of $464
- 0
- 0
- 0
- 0
Net income from continuing operations
(2670)
(1251)
1238
5343
Interest expense
319
217
124
16
Investment income
- 0
- 0
(549)
(394)
Income tax (benefit)expense
(135)
(1148)
48
(1654)
Depreciation and amortization
1466
1137
908
2503
EBITDA
(1020)
(1045)
1769
5814
Share-based compensation
860
715
628
1544
Non-Recurring Charges (1)
- 0
596
751
1390
Amortization of Inventory Step-up
- 0
- 0
- 0
725
Adjusted EBITDA
$ (160)
$ 266
$ 3148
$ 9473
1
Non-recurring charges include the following 2017) CEO separation costs and other share-based compensation 2018) Transaction-related expenses associated with the acquisition of Micron Optics Inc 2019) Transaction related expenses and inventory step-up amortization relate to General Photonics acquisition and CFO transition expenses
Luna Innovations Incorporated
Reconciliation of Non-GAAP Financial Measures
(in thousands)
Three Months Ended
Six Months Ended
June 30
June 30
2020
2019
2020
2019
(Unaudited)
(Unaudited)
Reconciliation of EBITDA and Adjusted EBITDA
Net income
$ 1369
$ - 0
$ 841
$ 253
$ - 0
$ 1967
Loss from discontinued operations net of income tax benefit of $464
- 0
- 0
- 0
1436
- 0
- 0
Gain on sale of asset
- 0
- 0
- 0
- 0
- 0
- 0
Net income from continuing operations
1369
- 0
841
1689
- 0
1967
Interest expense
1
- 0
- 0
1
- 0
13
Investment income
(4)
- 0
(77)
(64)
- 0
(268)
Income tax expense(benefit)
441
- 0
247
579
- 0
(1618)
Depreciation and amortization
684
- 0
653
1363
- 0
1166
EBITDA
2490
- 0
1664
3568
- 0
1260
Share-based compensation
465
- 0
378
967
- 0
721
Non-Recurring Charges (1)
- 0
- 0
44
- 0
- 0
942
CFO Recruiting and Severance
- 0
- 0
- 0
- 0
- 0
- 0
Amortization of Inventory Step-up
- 0
- 0
310
- 0
- 0
412
- 0
- 0
- 0
- 0
- 0
- 0
Adjusted EBITDA
$ 2955
$ - 0
$ 2396
$ 4535
$ - 0
$ 3335
EBITDA Margin Percent on Total Revenues
134
93
100
39
Adjusted EBITDA Margin Percent on Total Revenues
159
134
127
102
Reconciliation of Non-GAAP EPS
Diluted EPS
$ 004
$ 002
$ 001
$ 005
Loss from discontinued operations net of income taxes
Existing Technology amortization missed from 101518-63019
- 0
15560
Amortization catch up from 101518-63019 in July 2019 only
In-process RampD
200000
0
- 0
1650000
4091764
Micron Purchase Amortization Detail - 812019 and forward
Trade Name
150000
36
4167
Customer Relationships
100000
84
1190
Existing Technology
1200000
60
20000
Amortization going forward
In-process RampD
200000
0
- 0
1650000
2535714
General Pho Purchase Amortization Detail - 312019
Trade Name
400000
36
11111
22822
Customer Relationships
600000
180
3333
22834
Existing Technology
7200000
96
75000
22827
In-process RampD
- 0
0
- 0
8200000
8944444
General Pho Inventory Step-up Amortization - 312019
WIP amp Fin Goods
724760
7
103537
Ends 93019
PampL Summary - Luna Innovations
For the Three Months Ending March 31 2020
QTD
QTD
QTD
YTD
YTD
YTD
Actual
Budget
Variance
Actual
Budget
Variance
fav(un-fav)
fav(un-fav)
Revenues
Lightwave
12933344
13366455
(433536)
24487335
25564000
(1077090)
686
Luna Labs
5642348
6075202
(432854)
11229350
11675307
(445957)
314
Total Revenues
18575692
19441657
(866390)
35716685
37239307
(1523047)
Cost of Revenues
Product and Licensing
5181057
5789978
608921
10066386
11082697
1016311
282
TDD
3877888
4448571
570683
7769627
8526736
757109
218
Total Cost of Revenues
9058945
10238549
570683
17836013
19609433
1773420
499
Gross Margin
Product and Licensing - $
7752287
7576477
175810
14420949
14481303
(60354)
Product and Licensing -
60
57
3
59
57
2
TDD - $
1764460
1626631
137829
3459723
3148571
311152
TDD -
31
27
4
31
27
4
Total Gross Margin
9516747
9203108
313639
17880672
17629874
250798
Gross Margin
51
47
4
50
47
3
501
Operating Expenses
Selling General amp Admin
6202338
8155800
1953888
12578977
14477853
1899301
Research Devel amp Engineering
1504800
647122
(857678)
3101865
2798808
(303057)
Total Operating Expenses
7707138
8802922
1096209
15680842
17276661
1595819
439
Operating Income (Loss)
1809609
400186
1409423
2199830
353213
1846617
62
Other Expense (Income)
Interest
930
985
55
1145
2195
1050
00
Investment Income
(4435)
(75000)
(70565)
(63790)
(150000)
(86210)
-02
Tax Expense
440626
118551
(498831)
579203
125253
(630706)
16
Tax Benefit from release of VA
-
-
-
-
-
-
00
Gainloss on foreigh exch
-
-
-
-
-
-
00
Other
3649
-
(3649)
(5236)
-
5236
-00
440770
44536
(396234)
511322
(22552)
(533874)
14
Income from continuing operations
1368839
355650
1805658
1688508
375765
2380491
Income from Disc Ops
Operating Income from Disc Ops
-
-
- 0
-
-
- 0
Gainloss of Asset Sale
-
-
- 0
(1435903)
-
(1435903)
Total Income from Disc Ops
- 0
- 0
- 0
(1435903)
- 0
(1435903)
Net Income (Loss)
1368839
355650
1013189
252605
375765
(123160)
07
Dividend on Preferred
- 0
- 0
- 0
- 0
- 0
- 0
Net Income (Loss) available to Common Shareholders
1368839
355650
1013189
252605
375765
(123160)
07
Depreciation
244214
491046
From Cash Flow
Amortization
439787
872410
From Cash Flow
Stock Compensation
465109
966932
From Cash Flow
Acquisition Costs
- 0
- 0
Amortization of Inventory Step-up
- 0
- 0
CFO Recruiting amp Severance
- 0
- 0
Treasury Stock Activity
63020
Stock Buyback - Held with Northland
Trade date
Settlement Date
of Shares
Avg Price
Commission
Trade date Total $
Number of Days
Weighted Avg
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
= Trades Not Settled
$000
$000
$000
$000
YTD Avg
0
0
Trade date
Settlement Date
of Shares
Avg Price
Commission
Trade date Total $
Number of Days
Weighted Avg
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
QTD Avg
0
0
0
0
2016 Amounts under program
205500
$24880840
$25086340
2017 Amounts under program
433179
$75649353
$76082532
2018 Amounts under program
132450
$30604099
$30736549
2019 Amounts under program
333953
$198663889
$199999701
Total
110508200
329798181
331905122
For Q Disclosure
Management Buyback - Held with AST
Date
Shares
YTD days os
YTD weighted avg
QTD days os
QTD Weighted Avg
Month
Quarter
Year
52720
Garrett James
6500
35
1250
35
2500
Jan
31
- 0
- 0
52720
Graeff Scott
17450
35
3356
35
6712
Feb
29
- 0
- 0
52720
Soller Brian
9000
35
1731
35
3462
Mar
31
91
91
44013
- 0
91
- 0
Apr
30
- 0
- 0
44013
- 0
91
- 0
May
31
- 0
- 0
44013
- 0
91
- 0
Jun
30
91
182
44013
- 0
91
- 0
Jul
31
- 0
- 0
44013
- 0
91
- 0
Aug
31
- 0
- 0
44013
- 0
91
- 0
Sept
30
92
274
- 0
- 0
Oct
31
- 0
- 0
- 0
- 0
Nov
30
- 0
- 0
- 0
- 0
Dec
31
92
366
32950
6337
12673
BOD buyback
YTD
$000
$000
44013
- 0
Qtr
$000
$000
44013
- 0
Luna
Date
CloseLast
1220
738
Average Close Price
1320
718
Year-To-Date
$ 696
1620
73
Quarter-To-Date
$ 652
1720
735
1820
756
1920
777
11020
787
11320
803
11420
804
11520
832
11620
85
11720
845
12120
827
12220
833
12320
849
12420
844
12720
828
12820
856
12920
85
13020
846
13120
819
2320
825
2420
821
2520
82
2620
819
2720
837
21020
85
21120
858
21220
904
21320
895
21420
897
21820
891
21920
891
22020
907
22120
923
22420
861
22520
745
22620
759
22720
707
22820
67
3220
713
3320
693
3420
719
3520
689
3620
75
3920
672
31020
66
31120
599
31220
521
31320
522
31620
491
31720
553
31820
473
31920
487
32020
48
32320
509
32420
543
32520
582
32620
617
32720
583
33020
623
33120
615
4120
585
4220
583
4320
572
4620
607
4720
605
4820
631
4920
665
41320
656
41420
683
41520
711
41620
734
41720
727
42020
73
42120
672
42220
683
42320
691
42420
715
42720
721
42820
74
42920
777
43020
763
5120
724
5420
751
5520
762
5620
76
5720
749
5820
782
51120
704
51220
705
51320
62
51420
578
51520
537
51820
591
51920
625
52020
61
52120
6
52220
609
52620
615
52720
62
52820
609
52920
61
6120
629
6220
628
6320
653
6420
649
6520
663
6820
667
6920
635
61020
643
61120
583
61220
606
61520
625
61620
631
61720
615
61820
599
61920
601
62220
616
62320
624
62420
615
62520
615
62620
571
62920
585
63020
584
Qtr
1
2
3
4
Options
Options
Aggregate Strike Price
Intrinsic Value
Outstanding
Exercisable
Outstanding
Exercisable
Outstanding
Exercisable
Luna
2418245
1309606
$6482283
$2709686
7767068
4952824
2418245
1309606
6482283
2709686
7767068
4952824
Warrants Aaron Chase Aaron ChaseCarilion exercised all warrants in Q2 and Q3 2018
0
0
0
0
2418245
1309606
6482283
2709686
Average Strike Price
$ 268
$ 207
Pull Cancelled for whole year
Cancels
Q1
35659 Aaron Chase Aaron Chase22999 of canceled shares didnrsquot show up until Q2-20 report
Aaron Chase Aaron ChaseCarilion exercised all warrants in Q2 and Q3 2018
$ 364
12990180
Outstanding 12312019
3160397
Q2
13124
$ 211
2769912
Q3
- 0
ERRORDIV0
- 0
Grants
20000
Q4
- 0
ERRORDIV0
- 0
Exercised
(662965)
48783
$ 323
15760092
Canceled
(48783)
Corrected Termed EEs from 2019
(50404)
These were corrected in June 2020
2418245
Remaining life
Options
Avg Life
- 0
Outstanding
Luna
2418245
644
Exercisable
1309606
474
Remaining service
Luna
2418245
See awards outstanding by grant price range report and Disclosure report for information on this tab
Luna Innovations
Additional Notes
EPS Calculations
During Jan-2019 and 2020 Management was awarded Performance Based Grants and Time Based Grants
63020
The Performance Based Grants vest after 3 years and are issued only if the performance is achieved
The Time Based Grants vest each year for 3 years Grants are issued once vested each year
Yearly BOD Grants
Basic EPS
DSU deferred stock units vest in a year but do not become issued until the Director leaves the Board This started in 2018
Net Income (loss) Per Share from Continuing Operations
YTD
Diluted
QTD
Diluted
DSU awards vest in May 2021 and will be added to the middle section of the EPS in May 2021
Net Income from Continuing Operations
1688508
1368839
Rich Roedel
8877
704
62500
Common Shares Outstanding
30484797
30589249
Barry Phelps
5326
704
37500
$ 006
$ 005
$ 004
$ 004
Leigh Anderson
5326
704
37500
Mary Beth Vitale
5326
704
37500
Net income (loss) Per Share attributable to common shareholders
RSU restricted stock units vest and are issued in a year and will be added to the bottom of the EPS in May 2021
Net Income (Loss) available to Shareholders
252605
1368839
Don Pastor
5326
704
37500
Common Shares Outstanding
30484797
30589249
Gary Spiegel
5326
704
37500
$ 001
$ 001
$ 004
$ 004
Net income (loss) Per Share from Discontinued Operations
Net Income from Discontinued Operations
(1435903)
- 0
Common Shares Outstanding
30484797
30589249
$ (005)
$ (004)
$ - 0
$ - 0
Diluted EPS
Net Income(Loss) available to SHs
252605
1368839
Common Shares Outstanding
30484797
30589249
Common Stock Equivalent
2010153
1876873
$ 001
- 0 Grant Thornton LLP Grant Thornton LLPAs earnings from continuing operations are negative (loss) basic and diluted EPS equal one another
$ 004 Grant Thornton LLP Grant Thornton LLPAs earnings from continuing operations are negative (loss) basic and diluted EPS equal one another
- 0 Grant Thornton LLP Grant Thornton LLPAs earnings from continuing operations are negative (loss) basic and diluted EPS equal one another
Non-GAAP Diluted EPS
Net income (loss) Per Share attributable to common shareholders
Net Income (Loss) available to Shareholders
252605
1368839
Loss from discontinued operations
1435903
- 0
Share-based compensation
966932
465109
Amortization of acquired intangibles
344405
688810
Acquisition related costs
- 0
- 0
Amortization of Inventory Step-up
- 0
- 0
Common Shares Outstanding
30484797
30589249
Common Stock Equivalent
2010153
1876873
$ 009
$ 008
YTD
QTD
Total issued shares
32470276
Average Close Price
$ 696
$ 652
Total treasury
1672741
Shares Outstanding
30797535
Net change in denominator
1404924 Kelly Bewick Aaron Chasesee Dilution (stock option) dilutive tab
1264984
BOD fees paid in DSUs Aaron Chase Aaron ChaseFrom Equity Award Transactions Report
Month
Quarter
Year
Balance at 112019 - DSU outstanding
591457
591457
Jan
31
Issued during Q1 2020
7114
7114
Feb
29
Issued during Q2 2020
3947
7894
Mar
31
91
91
Annual grant DSU vested 5112020
10521 KBSResults KBSResultsEnter 2019 DSU annual grant when vest in 2020 (probably May) you do not need to enter annual RSU because it will be issued in AST
21042
Apr
30
Deferred Equity Issuance 6012020
(7809) KBSResults Aaron ChaseM Wise and J Williamson retired from the BoD in May 2020 Wise Deferred Comp will be issued every June 1 for 10 years Williamson Deferred Comp will be issued every June 1 for 5 years
Grant Thornton LLP Grant Thornton LLPAs earnings from continuing operations are negative (loss) basic and diluted EPS equal one another
Grant Thornton LLP Grant Thornton LLPAs earnings from continuing operations are negative (loss) basic and diluted EPS equal one another
(15619)
May
31
Issued during Q3 2020
- 0
- 0
Jun
30
91
182
Issued during Q4 2020
- 0
- 0
Jul
31
Aug
31
Sept
30
92
274
Oct
31
Totals (Antidilutive)
2010153
1876873
Nov
30
Dec
31
92
366
Shares Outstanding as of 112020
31788896
As Of Date
Transaction
Reason
Name
Shares Issued
Shares Retired
Running Total
01012020
Normal
Balance Roll Forward
- 0
- 0
31788896
01082020
Normal
Option Exercise
Williamson John
12000000
- 0
31908896
01082020
Normal
Retirement - Vested Restriced Stock
Exer Options
Williamson John
- 0
2000000
31888896
01102020
Normal
Option Exercise
Roedel Rich
6000000
- 0
31948896
01142020
Normal
2019 Time-Based RSU Vesting
Messick Dale
666700
- 0
31955563
01142020
Normal
2019 Time-Based RSU Vesting
Graeff Scott
3066700
- 0
31986230
01142020
Normal
2019 Time-Based RSU Vesting
Soller Brian
1066700
- 0
31996897
01142020
Normal
2019 Time-Based RSU Vesting
Garrett James
766700
- 0
32004564
01142020
Normal
2019 Time-Based RSU Retirement
Taxes
Graeff Scott
- 0
920000
31995364
01142020
Normal
2019 Time-Based RSU Retirement
Taxes
Soller Brian
- 0
320000
31992164
01142020
Normal
2019 Time-Based RSU Retirement
Taxes
Garrett James
- 0
230000
31989864
01142020
Normal
Option Exercise
Burris Kevin
100000
- 0
31990864
01292020
Normal
Option Exercise
Carr Dustin
3212300
- 0
32022987
01272020
Normal
Option Exercise
Chen James
334000
- 0
32026327
02192020
Normal
Option Exercise
McPherson Daniel
534800
- 0
32031675
03122020
Normal
Option Exercise
Haber Todd
2500000
- 0
32056675
03122020
Normal
Option Exercise
Graver Thomas
4558100
- 0
32102256
03122020
Normal
Option Exercise
Baez Michael
911200
- 0
32111368
03062020
Normal
Option Exercise
Farooqui Salvan
1500000
- 0
32126368
05122020
Normal
Option Exercise
Baez Michael
950000
- 0
32135868
05142020
Normal
Option Exercise
Haber Todd
4300000
- 0
32178868
05142020
Normal
Option Exercise
Graver Thomas
4746100
- 0
32226329
05112020
Normal
Annual Equity Grant Vesting-BoD
Pastor Don
580000
- 0
32232129
05112020
Normal
Annual Equity Grant Vesting-BoD
Williamson John
580000
- 0
32237929
06012020
Normal
Deferred Stock Issuance-BoD
Wise Mike
980900
- 0
32247738
06012020
Normal
Deferred Stock Issuance-BoD
Williamson John
3756800
32285306
06112020
Normal
Option Exercise
Wise Mike
24000000
32525306
06112020
Normal
Retirement - Vested Stock
Exer Options
Wise Mike
6153000
32463776
06082020
Normal
Option Exercise
Pruzan Michael
400000
32467776
06292020
Normal
Option Exercise
Farooqui Salvan
250000
32470276
Date Issued
Balance Outstanding
Number of Days
Weighted Avg
Treasury Shares Weighted Average
Year-to-Date
YTD
QTD
1120
31788896
182
31788896
Graeff July 2
115000
115000
1820
31908896
175
115385
Q2 2015
29925
29925
1820
31888896
175
(19231)
2014
22725
22725
11020
31948896
173
57033
2016 Mgmt buyback
73675
73675
11420
31955563
169
6191
2016 repurchase program
205500
205500
11420
31986230
169
28477
2017 Mgmt buyback
90900
90900
11420
31996897
169
9905
2017 BOD buyback
100000
100000
11420
32004564
169
7119
2017 repurchase program
433179
433179
11420
31995364
169
(8543)
2018 repurchase program
132450
132450
11420
31992164
169
(2971)
2018 Mgmt buyback
49751
49751
11420
31989864
169
(2136)
2019 Mgmt buyback
52733
52733
11420
31990864
169
929
2019 repurchase program
333953
333953
12920
32022987
154
27181
2020 Mgmt buyback
6337
12673
12720
32026327
156
2863
21920
32031675
133
3908
164612764
165246418
31220
32056675
111
15247
31220
32102256
111
27799
31220
32111368
111
5557
567659
3620
32126368
117
9643
Treasury on AST
567664
51220
32135868
50
2610
Diff
(5)
51420
32178868
48
11341
51420
32226329
48
12517
51120
32232129
51
1625
51120
32237929
51
1625
6120
32247738
30
1617
6120
32285306
30
6193
61120
32525306
20
26374
61120
32463776
20
(6762)
6820
32467776
23
505
62920
32470276
2
27
YTD Average Shares Outstanding
32130925
Quarter-to Date
112020
31788896
91
31788896
1820
31908896
91
120000
1820
31888896
91
(20000)
11020
31948896
91
60000
11420
31955563
91
6667
11420
31986230
91
30667
11420
31996897
91
10667
11420
32004564
91
7667
11420
31995364
91
(9200)
11420
31992164
91
(3200)
11420
31989864
91
(2300)
11420
31990864
91
1000
12920
32022987
91
32123
12720
32026327
91
3340
21920
32031675
91
5348
31220
32056675
91
25000
31220
32102256
91
45581
31220
32111368
91
9112
3620
32126368
91
15000
51220
32135868
50
5220
51420
32178868
48
22681
51420
32226329
48
25034
51120
32232129
51
3251
51120
32237929
51
3251
6120
32247738
30
3234
6120
32285306
30
12385
61120
32525306
20
52747
61120
32463776
20
(13523)
6820
32467776
23
1011
62920
32470276
2
55
QTD Average Shares Outstanding
32241713
C1
TA to the Summary tab
C2
TA to the Avg Stock Price tab
C3
TA to the Options Outstanding YTD tab
C4
TA to the Equity Rollforward WP
C5
TA to the AST Report in the Equity Rollfoward WP
C6
TA to the Options Outstanding QTD tab
C7
Custom 7
C8
See comment box
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
14
Comms Test
Increased data and video consumption Video forecasted to represent 82 of all
IP traffic in 2022 34 CAGR
Growth in mobile and 4G5G Mobile data traffic growing at 46 CAGR
Cloud services and adoption of Internet of Things Data center traffic growing at 26 CAGR 285 billion IoT networked devices by
2022
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
15
Comms Test Components
Product Optical Vector Analyzer (OVA)
Ensuring speed at the chip level
Unprecedented visibility inside devices ˗you canrsquot fix what you canrsquot see
Reduces time and cost associated with the development of high-speed optical components
Focus on enabling the carriers to move to 5G networks
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
16
Comms Test Short-haul network
Product Optical Backscatter Reflectometer (OBR)
Bandwidth demands continue to drive double-digit connectivity growth
Delivers unprecedented visibility into short-haul networks
Emerging market for on-board aircraft communications
Ensuring network ldquoup timerdquo on Lockheed Martinrsquos F-35
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
17
Luna Labs
Work with universities and government research labs to explore technological feasibility with a goal toward proof of concept
Collaborate with prime contractors government offices and federally-funded RampD centers
Work with contract manufacturers suppliers licensees and distributors to develop everything from small-scale prototypes up to and including market-ready products
Based in Charlottesville VA
2Q FY20 Results
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
19
Second-quarter 2020 Key Financial Results
Solid financial performance
$06M improvement in Adjusted EBITDA1 year-over-year
Total revenues of $186M up 4 year-over-year
Lightwave revenue of $129M up 3 year-over-year
Luna Labs revenue of $56M up 7 year-over-year
Operating income improved to $18M or 10 of total revenues in Q2 2020 from $10M or 6 of total revenues in Q2 2019 due to increased revenue and gross profit as well as improved operating expense leverage
Net income of $14M or $004 per fully diluted share for the three months ended June 30 2020 compared to $08M or $002 per fully diluted share for the three months ended June 30 2019
Adjusted EBITDA1 increased to $30M for the three months ended June 30 2020 compared to $24M for the three months ended June 30 2019
Reaffirmed 2020 outlook tighten range to $81 to $83M in total revenues
1Adj EBITDA is a non-GAAP measure Reconciliation of comparable GAAP measures to non-GAAP measures are included in the appendix to this presentation
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
20
Second-quarter 2020 and Other Recent Accomplishments
Reported solid second-quarter 2020 financial results in challenging COVID environment
Held 6 customer-facing technology educational webinars ~1000 live attendees and more than 1200 leads
Hosted worldwide virtual sales meeting with 47 attendees
Participated in virtual trade shows
Continued to monitor employee feedback with a focus on safety and well-being
Successful implementation of Employee Stock Purchase Plan with approximately 60 participation
Held successful Virtual Annual Shareholder Meeting in May
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
21
($20)
$03
$95
FY16 FY17 FY18 FY19 FY20
Adjusted EBITDA1 2
(millions)
$31
$296 $331
$429
$705
FY16 FY17 FY18 FY19 FY20
Revenue1
(millions)
$357
Strong Financial Results
1 Based on managementrsquos estimates of the impact from the divestiture of Optoelectronics Includes the acquisitions of Micron Optics and General Photonics2Adj EBITDA is a non-GAAP measure Reconciliation of comparable GAAP measures to non-GAAP measures are included in the appendix to this presentation
FY20 Guidance$810 - $830
FY20 Guidance $100 to $120
$45
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
22
A Flexible Balance Sheet and Strong Cash Position
Strong balance sheet on June 30 2020
$912M in total assets
bull $265M in cash and cash equivalents
bull $448M in working capital
Access to $10M revolving credit facility if needed
Continued focus on working capital and reinvestment in business in order to generate long-term sustainable growth
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
23
2020 Financial Outlook
Maintaining FY2020 outlook tightening our range
Total revenues of $81M to $83M
Adjusted EBITDA1 of $10M to $12M
1 Adj EBITDA is a non-GAAP measure Reconciliation of comparable GAAP measures to non-GAAP measures are included in the appendix to this presentation The outlook above does not include any future acquisitions divestitures or unanticipated events
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
24
Luna ndash Enabling the Future with Fiber
Proprietary measurement technology offering unprecedented combination of resolution accuracy and speed
Customers in attractive markets Military and Defense Communications Infrastructure Energy and Automotive
Positioned to take advantage of trends such as vehicle light-weighting and increasing demands on data centers and broadband capacity
Adequately capitalized to fund growth
Long-tenured experienced executive team board
Corporate culture of innovation and integrity
Overview
Appendix
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
26
Reconciliation of Net Income to Adjusted EBITDA
(1) Non-recurring charges consist of transaction-related expenses related to the acquisition of General Photonics
2020 2019 2020 2019
Reconciliation of EBITDA and Adjusted EBITDANet income 1369$ 841$ 253$ 1967$ Loss from discontinued operations net of income tax benefit of $464 - - 1436 -
Net income from continuing operations 1369 841 1689 1967 Interest expense 1 - 1 13 Investment income (4) (77) (64) (268) Income tax expense(benefit) 441 247 579 (1618) Depreciation and amortization 684 653 1363 1166
Reconciliation of Net Income to Adjusted EBITDA Full Year
(1) Non-recurring charges include the following 2017) CEO separation costs and other share-based compensation 2018) Transaction-related expenses associated with the acquisition of Micron Optics Inc 2019) Transaction related expenses and inventory step-up amortization relate to General Photonics acquisition and CFO transition expenses
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
28
New Segment Quarterly Results (in thousands)
March 31 2019 June 30 2019 Sep 30 2019 A Dec 31 2019 March 31 2020 June 30 2020
Total revenues 14833 17814 18389 19480 17141 18576
Cost of revenuesLightwave 4280 5334 5449 5070 4885 5181 Luna Labs 3785 3728 3665 4022 3892 3878
Total cost of revenues 8065 9062 9114 9092 8777 9059
Gross Profit 6768 8752 9275 10388 8364 9517
Operating expenseSelling general and administrative 6207 6003 5745 6416 6377 6202 Research development and engineering 1458 1735 2048 2255 1597 1505
Total operating expense 7665 7738 7793 8671 7974 7707
Operating income (897)$ 1014$ 1482$ 1717$ 390$ 1810$
A The Company revised its results for the three months ended September 30 2019 The Company has concluded these adjustments are not material individually or in the aggregate
Three Months Ended
Scott A Graeff President and CEO
Safe Harbor
Luna ndash Enabling the Future with Fiber
Luna is a global company
Luna has a clear vision and established history
Compelling business model with strong growth potential
Lightwave 2019 revenue1 snapshot
Luna Overview
Where Does Luna Play
Sensing
Sensing Short-range high-resolution
Sensing long-range high-speed
Sensing Material thickness
Comms Test
Comms Test Components
Comms Test Short-haul network
Luna Labs
2Q FY20 Results
Second-quarter 2020 Key Financial Results
Second-quarter 2020 and Other Recent Accomplishments
Slide Number 21
A Flexible Balance Sheet and Strong Cash Position
2020 Financial Outlook
Luna ndash Enabling the Future with Fiber
Appendix
Reconciliation of Net Income to Adjusted EBITDA
Reconciliation of Net Income to Adjusted EBITDA Full Year
New Segment Quarterly Results
(in thousands)
Three Months Ended
December 31 2018
A
March 31 2019
C
June 30 2019
September 30 2019
December 31 2019
March 31 2020
June 30 2020
Revenues
Lightwave
$ 11345
$ 10221
$ 12523
$ 13120
$ 13988
$ 11554
12933
Luna Labs
5548
6641
5291
5301
5492
5587
5642
Total revenues
16893
16862
17814
18421
19480
17141
18576
Cost of revenues
Lightwave
4002
3836
5334
5471
5070
4885
5181
Luna Labs
4268
4816
3728
3665
4022
3892
3878
Total cost of revenues
8270
8652
9062
9136
9092
8777
9059
Gross Profit
8623
8210
8752
9285
10388
8364
9517
Operating expense
Selling general and administrative
6394
7165
6003
5754
6415
6377
6202
Research development and engineering
1894
1708
1735
2047
2255
1597
1505
Total operating expense
8288
8873
7738
7801
8670
7974
7707
Operating income
$ 335
$ (663)
$ 1014
$ 1484
$ 1718
$ 390
$ 1810
Historical - Hidden
A
Includes $751000 of costs associated with the acquisition of Micron Optics
B
Unaudited pro forma financials assumes the General Photonics business was acquired on January 1 2019
C
Includes $898000 of costs associated with the acquisition of General Photonics
Year Ended December 31
(unaudited)
2016
2017
2018
2019
Reconciliation of EBITDA and Adjusted EBITDA
Net (loss)income
$ (2370)
$ 14615
$ 11004
$ 5343
Less income from discontinued operations net of income taxes
300
15866
9766
- 0
Loss from discontinued operations net of income tax benefit of $464
- 0
- 0
- 0
- 0
Net income from continuing operations
(2670)
(1251)
1238
5343
Interest expense
319
217
124
16
Investment income
- 0
- 0
(549)
(394)
Income tax (benefit)expense
(135)
(1148)
48
(1654)
Depreciation and amortization
1466
1137
908
2503
EBITDA
(1020)
(1045)
1769
5814
Share-based compensation
860
715
628
1544
Non-Recurring Charges (1)
- 0
596
751
1390
Amortization of Inventory Step-up
- 0
- 0
- 0
725
Adjusted EBITDA
$ (160)
$ 266
$ 3148
$ 9473
1
Non-recurring charges include the following 2017) CEO separation costs and other share-based compensation 2018) Transaction-related expenses associated with the acquisition of Micron Optics Inc 2019) Transaction related expenses and inventory step-up amortization relate to General Photonics acquisition and CFO transition expenses
Luna Innovations Incorporated
Reconciliation of Non-GAAP Financial Measures
(in thousands)
Three Months Ended
Six Months Ended
June 30
June 30
2020
2019
2020
2019
(Unaudited)
(Unaudited)
Reconciliation of EBITDA and Adjusted EBITDA
Net income
$ 1369
$ - 0
$ 841
$ 253
$ - 0
$ 1967
Loss from discontinued operations net of income tax benefit of $464
- 0
- 0
- 0
1436
- 0
- 0
Gain on sale of asset
- 0
- 0
- 0
- 0
- 0
- 0
Net income from continuing operations
1369
- 0
841
1689
- 0
1967
Interest expense
1
- 0
- 0
1
- 0
13
Investment income
(4)
- 0
(77)
(64)
- 0
(268)
Income tax expense(benefit)
441
- 0
247
579
- 0
(1618)
Depreciation and amortization
684
- 0
653
1363
- 0
1166
EBITDA
2490
- 0
1664
3568
- 0
1260
Share-based compensation
465
- 0
378
967
- 0
721
Non-Recurring Charges (1)
- 0
- 0
44
- 0
- 0
942
CFO Recruiting and Severance
- 0
- 0
- 0
- 0
- 0
- 0
Amortization of Inventory Step-up
- 0
- 0
310
- 0
- 0
412
- 0
- 0
- 0
- 0
- 0
- 0
Adjusted EBITDA
$ 2955
$ - 0
$ 2396
$ 4535
$ - 0
$ 3335
EBITDA Margin Percent on Total Revenues
134
93
100
39
Adjusted EBITDA Margin Percent on Total Revenues
159
134
127
102
Reconciliation of Non-GAAP EPS
Diluted EPS
$ 004
$ 002
$ 001
$ 005
Loss from discontinued operations net of income taxes
Existing Technology amortization missed from 101518-63019
- 0
15560
Amortization catch up from 101518-63019 in July 2019 only
In-process RampD
200000
0
- 0
1650000
4091764
Micron Purchase Amortization Detail - 812019 and forward
Trade Name
150000
36
4167
Customer Relationships
100000
84
1190
Existing Technology
1200000
60
20000
Amortization going forward
In-process RampD
200000
0
- 0
1650000
2535714
General Pho Purchase Amortization Detail - 312019
Trade Name
400000
36
11111
22822
Customer Relationships
600000
180
3333
22834
Existing Technology
7200000
96
75000
22827
In-process RampD
- 0
0
- 0
8200000
8944444
General Pho Inventory Step-up Amortization - 312019
WIP amp Fin Goods
724760
7
103537
Ends 93019
PampL Summary - Luna Innovations
For the Three Months Ending March 31 2020
QTD
QTD
QTD
YTD
YTD
YTD
Actual
Budget
Variance
Actual
Budget
Variance
fav(un-fav)
fav(un-fav)
Revenues
Lightwave
12933344
13366455
(433536)
24487335
25564000
(1077090)
686
Luna Labs
5642348
6075202
(432854)
11229350
11675307
(445957)
314
Total Revenues
18575692
19441657
(866390)
35716685
37239307
(1523047)
Cost of Revenues
Product and Licensing
5181057
5789978
608921
10066386
11082697
1016311
282
TDD
3877888
4448571
570683
7769627
8526736
757109
218
Total Cost of Revenues
9058945
10238549
570683
17836013
19609433
1773420
499
Gross Margin
Product and Licensing - $
7752287
7576477
175810
14420949
14481303
(60354)
Product and Licensing -
60
57
3
59
57
2
TDD - $
1764460
1626631
137829
3459723
3148571
311152
TDD -
31
27
4
31
27
4
Total Gross Margin
9516747
9203108
313639
17880672
17629874
250798
Gross Margin
51
47
4
50
47
3
501
Operating Expenses
Selling General amp Admin
6202338
8155800
1953888
12578977
14477853
1899301
Research Devel amp Engineering
1504800
647122
(857678)
3101865
2798808
(303057)
Total Operating Expenses
7707138
8802922
1096209
15680842
17276661
1595819
439
Operating Income (Loss)
1809609
400186
1409423
2199830
353213
1846617
62
Other Expense (Income)
Interest
930
985
55
1145
2195
1050
00
Investment Income
(4435)
(75000)
(70565)
(63790)
(150000)
(86210)
-02
Tax Expense
440626
118551
(498831)
579203
125253
(630706)
16
Tax Benefit from release of VA
-
-
-
-
-
-
00
Gainloss on foreigh exch
-
-
-
-
-
-
00
Other
3649
-
(3649)
(5236)
-
5236
-00
440770
44536
(396234)
511322
(22552)
(533874)
14
Income from continuing operations
1368839
355650
1805658
1688508
375765
2380491
Income from Disc Ops
Operating Income from Disc Ops
-
-
- 0
-
-
- 0
Gainloss of Asset Sale
-
-
- 0
(1435903)
-
(1435903)
Total Income from Disc Ops
- 0
- 0
- 0
(1435903)
- 0
(1435903)
Net Income (Loss)
1368839
355650
1013189
252605
375765
(123160)
07
Dividend on Preferred
- 0
- 0
- 0
- 0
- 0
- 0
Net Income (Loss) available to Common Shareholders
1368839
355650
1013189
252605
375765
(123160)
07
Depreciation
244214
491046
From Cash Flow
Amortization
439787
872410
From Cash Flow
Stock Compensation
465109
966932
From Cash Flow
Acquisition Costs
- 0
- 0
Amortization of Inventory Step-up
- 0
- 0
CFO Recruiting amp Severance
- 0
- 0
Treasury Stock Activity
63020
Stock Buyback - Held with Northland
Trade date
Settlement Date
of Shares
Avg Price
Commission
Trade date Total $
Number of Days
Weighted Avg
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
= Trades Not Settled
$000
$000
$000
$000
YTD Avg
0
0
Trade date
Settlement Date
of Shares
Avg Price
Commission
Trade date Total $
Number of Days
Weighted Avg
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
QTD Avg
0
0
0
0
2016 Amounts under program
205500
$24880840
$25086340
2017 Amounts under program
433179
$75649353
$76082532
2018 Amounts under program
132450
$30604099
$30736549
2019 Amounts under program
333953
$198663889
$199999701
Total
110508200
329798181
331905122
For Q Disclosure
Management Buyback - Held with AST
Date
Shares
YTD days os
YTD weighted avg
QTD days os
QTD Weighted Avg
Month
Quarter
Year
52720
Garrett James
6500
35
1250
35
2500
Jan
31
- 0
- 0
52720
Graeff Scott
17450
35
3356
35
6712
Feb
29
- 0
- 0
52720
Soller Brian
9000
35
1731
35
3462
Mar
31
91
91
44013
- 0
91
- 0
Apr
30
- 0
- 0
44013
- 0
91
- 0
May
31
- 0
- 0
44013
- 0
91
- 0
Jun
30
91
182
44013
- 0
91
- 0
Jul
31
- 0
- 0
44013
- 0
91
- 0
Aug
31
- 0
- 0
44013
- 0
91
- 0
Sept
30
92
274
- 0
- 0
Oct
31
- 0
- 0
- 0
- 0
Nov
30
- 0
- 0
- 0
- 0
Dec
31
92
366
32950
6337
12673
BOD buyback
YTD
$000
$000
44013
- 0
Qtr
$000
$000
44013
- 0
Luna
Date
CloseLast
1220
738
Average Close Price
1320
718
Year-To-Date
$ 696
1620
73
Quarter-To-Date
$ 652
1720
735
1820
756
1920
777
11020
787
11320
803
11420
804
11520
832
11620
85
11720
845
12120
827
12220
833
12320
849
12420
844
12720
828
12820
856
12920
85
13020
846
13120
819
2320
825
2420
821
2520
82
2620
819
2720
837
21020
85
21120
858
21220
904
21320
895
21420
897
21820
891
21920
891
22020
907
22120
923
22420
861
22520
745
22620
759
22720
707
22820
67
3220
713
3320
693
3420
719
3520
689
3620
75
3920
672
31020
66
31120
599
31220
521
31320
522
31620
491
31720
553
31820
473
31920
487
32020
48
32320
509
32420
543
32520
582
32620
617
32720
583
33020
623
33120
615
4120
585
4220
583
4320
572
4620
607
4720
605
4820
631
4920
665
41320
656
41420
683
41520
711
41620
734
41720
727
42020
73
42120
672
42220
683
42320
691
42420
715
42720
721
42820
74
42920
777
43020
763
5120
724
5420
751
5520
762
5620
76
5720
749
5820
782
51120
704
51220
705
51320
62
51420
578
51520
537
51820
591
51920
625
52020
61
52120
6
52220
609
52620
615
52720
62
52820
609
52920
61
6120
629
6220
628
6320
653
6420
649
6520
663
6820
667
6920
635
61020
643
61120
583
61220
606
61520
625
61620
631
61720
615
61820
599
61920
601
62220
616
62320
624
62420
615
62520
615
62620
571
62920
585
63020
584
Qtr
1
2
3
4
Options
Options
Aggregate Strike Price
Intrinsic Value
Outstanding
Exercisable
Outstanding
Exercisable
Outstanding
Exercisable
Luna
2418245
1309606
$6482283
$2709686
7767068
4952824
2418245
1309606
6482283
2709686
7767068
4952824
Warrants Aaron Chase Aaron ChaseCarilion exercised all warrants in Q2 and Q3 2018
0
0
0
0
2418245
1309606
6482283
2709686
Average Strike Price
$ 268
$ 207
Pull Cancelled for whole year
Cancels
Q1
35659 Aaron Chase Aaron Chase22999 of canceled shares didnrsquot show up until Q2-20 report
Aaron Chase Aaron ChaseCarilion exercised all warrants in Q2 and Q3 2018
$ 364
12990180
Outstanding 12312019
3160397
Q2
13124
$ 211
2769912
Q3
- 0
ERRORDIV0
- 0
Grants
20000
Q4
- 0
ERRORDIV0
- 0
Exercised
(662965)
48783
$ 323
15760092
Canceled
(48783)
Corrected Termed EEs from 2019
(50404)
These were corrected in June 2020
2418245
Remaining life
Options
Avg Life
- 0
Outstanding
Luna
2418245
644
Exercisable
1309606
474
Remaining service
Luna
2418245
See awards outstanding by grant price range report and Disclosure report for information on this tab
Luna Innovations
Additional Notes
EPS Calculations
During Jan-2019 and 2020 Management was awarded Performance Based Grants and Time Based Grants
63020
The Performance Based Grants vest after 3 years and are issued only if the performance is achieved
The Time Based Grants vest each year for 3 years Grants are issued once vested each year
Yearly BOD Grants
Basic EPS
DSU deferred stock units vest in a year but do not become issued until the Director leaves the Board This started in 2018
Net Income (loss) Per Share from Continuing Operations
YTD
Diluted
QTD
Diluted
DSU awards vest in May 2021 and will be added to the middle section of the EPS in May 2021
Net Income from Continuing Operations
1688508
1368839
Rich Roedel
8877
704
62500
Common Shares Outstanding
30484797
30589249
Barry Phelps
5326
704
37500
$ 006
$ 005
$ 004
$ 004
Leigh Anderson
5326
704
37500
Mary Beth Vitale
5326
704
37500
Net income (loss) Per Share attributable to common shareholders
RSU restricted stock units vest and are issued in a year and will be added to the bottom of the EPS in May 2021
Net Income (Loss) available to Shareholders
252605
1368839
Don Pastor
5326
704
37500
Common Shares Outstanding
30484797
30589249
Gary Spiegel
5326
704
37500
$ 001
$ 001
$ 004
$ 004
Net income (loss) Per Share from Discontinued Operations
Net Income from Discontinued Operations
(1435903)
- 0
Common Shares Outstanding
30484797
30589249
$ (005)
$ (004)
$ - 0
$ - 0
Diluted EPS
Net Income(Loss) available to SHs
252605
1368839
Common Shares Outstanding
30484797
30589249
Common Stock Equivalent
2010153
1876873
$ 001
- 0 Grant Thornton LLP Grant Thornton LLPAs earnings from continuing operations are negative (loss) basic and diluted EPS equal one another
$ 004 Grant Thornton LLP Grant Thornton LLPAs earnings from continuing operations are negative (loss) basic and diluted EPS equal one another
- 0 Grant Thornton LLP Grant Thornton LLPAs earnings from continuing operations are negative (loss) basic and diluted EPS equal one another
Non-GAAP Diluted EPS
Net income (loss) Per Share attributable to common shareholders
Net Income (Loss) available to Shareholders
252605
1368839
Loss from discontinued operations
1435903
- 0
Share-based compensation
966932
465109
Amortization of acquired intangibles
344405
688810
Acquisition related costs
- 0
- 0
Amortization of Inventory Step-up
- 0
- 0
Common Shares Outstanding
30484797
30589249
Common Stock Equivalent
2010153
1876873
$ 009
$ 008
YTD
QTD
Total issued shares
32470276
Average Close Price
$ 696
$ 652
Total treasury
1672741
Shares Outstanding
30797535
Net change in denominator
1404924 Kelly Bewick Aaron Chasesee Dilution (stock option) dilutive tab
1264984
BOD fees paid in DSUs Aaron Chase Aaron ChaseFrom Equity Award Transactions Report
Month
Quarter
Year
Balance at 112019 - DSU outstanding
591457
591457
Jan
31
Issued during Q1 2020
7114
7114
Feb
29
Issued during Q2 2020
3947
7894
Mar
31
91
91
Annual grant DSU vested 5112020
10521 KBSResults KBSResultsEnter 2019 DSU annual grant when vest in 2020 (probably May) you do not need to enter annual RSU because it will be issued in AST
21042
Apr
30
Deferred Equity Issuance 6012020
(7809) KBSResults Aaron ChaseM Wise and J Williamson retired from the BoD in May 2020 Wise Deferred Comp will be issued every June 1 for 10 years Williamson Deferred Comp will be issued every June 1 for 5 years
Grant Thornton LLP Grant Thornton LLPAs earnings from continuing operations are negative (loss) basic and diluted EPS equal one another
Grant Thornton LLP Grant Thornton LLPAs earnings from continuing operations are negative (loss) basic and diluted EPS equal one another
(15619)
May
31
Issued during Q3 2020
- 0
- 0
Jun
30
91
182
Issued during Q4 2020
- 0
- 0
Jul
31
Aug
31
Sept
30
92
274
Oct
31
Totals (Antidilutive)
2010153
1876873
Nov
30
Dec
31
92
366
Shares Outstanding as of 112020
31788896
As Of Date
Transaction
Reason
Name
Shares Issued
Shares Retired
Running Total
01012020
Normal
Balance Roll Forward
- 0
- 0
31788896
01082020
Normal
Option Exercise
Williamson John
12000000
- 0
31908896
01082020
Normal
Retirement - Vested Restriced Stock
Exer Options
Williamson John
- 0
2000000
31888896
01102020
Normal
Option Exercise
Roedel Rich
6000000
- 0
31948896
01142020
Normal
2019 Time-Based RSU Vesting
Messick Dale
666700
- 0
31955563
01142020
Normal
2019 Time-Based RSU Vesting
Graeff Scott
3066700
- 0
31986230
01142020
Normal
2019 Time-Based RSU Vesting
Soller Brian
1066700
- 0
31996897
01142020
Normal
2019 Time-Based RSU Vesting
Garrett James
766700
- 0
32004564
01142020
Normal
2019 Time-Based RSU Retirement
Taxes
Graeff Scott
- 0
920000
31995364
01142020
Normal
2019 Time-Based RSU Retirement
Taxes
Soller Brian
- 0
320000
31992164
01142020
Normal
2019 Time-Based RSU Retirement
Taxes
Garrett James
- 0
230000
31989864
01142020
Normal
Option Exercise
Burris Kevin
100000
- 0
31990864
01292020
Normal
Option Exercise
Carr Dustin
3212300
- 0
32022987
01272020
Normal
Option Exercise
Chen James
334000
- 0
32026327
02192020
Normal
Option Exercise
McPherson Daniel
534800
- 0
32031675
03122020
Normal
Option Exercise
Haber Todd
2500000
- 0
32056675
03122020
Normal
Option Exercise
Graver Thomas
4558100
- 0
32102256
03122020
Normal
Option Exercise
Baez Michael
911200
- 0
32111368
03062020
Normal
Option Exercise
Farooqui Salvan
1500000
- 0
32126368
05122020
Normal
Option Exercise
Baez Michael
950000
- 0
32135868
05142020
Normal
Option Exercise
Haber Todd
4300000
- 0
32178868
05142020
Normal
Option Exercise
Graver Thomas
4746100
- 0
32226329
05112020
Normal
Annual Equity Grant Vesting-BoD
Pastor Don
580000
- 0
32232129
05112020
Normal
Annual Equity Grant Vesting-BoD
Williamson John
580000
- 0
32237929
06012020
Normal
Deferred Stock Issuance-BoD
Wise Mike
980900
- 0
32247738
06012020
Normal
Deferred Stock Issuance-BoD
Williamson John
3756800
32285306
06112020
Normal
Option Exercise
Wise Mike
24000000
32525306
06112020
Normal
Retirement - Vested Stock
Exer Options
Wise Mike
6153000
32463776
06082020
Normal
Option Exercise
Pruzan Michael
400000
32467776
06292020
Normal
Option Exercise
Farooqui Salvan
250000
32470276
Date Issued
Balance Outstanding
Number of Days
Weighted Avg
Treasury Shares Weighted Average
Year-to-Date
YTD
QTD
1120
31788896
182
31788896
Graeff July 2
115000
115000
1820
31908896
175
115385
Q2 2015
29925
29925
1820
31888896
175
(19231)
2014
22725
22725
11020
31948896
173
57033
2016 Mgmt buyback
73675
73675
11420
31955563
169
6191
2016 repurchase program
205500
205500
11420
31986230
169
28477
2017 Mgmt buyback
90900
90900
11420
31996897
169
9905
2017 BOD buyback
100000
100000
11420
32004564
169
7119
2017 repurchase program
433179
433179
11420
31995364
169
(8543)
2018 repurchase program
132450
132450
11420
31992164
169
(2971)
2018 Mgmt buyback
49751
49751
11420
31989864
169
(2136)
2019 Mgmt buyback
52733
52733
11420
31990864
169
929
2019 repurchase program
333953
333953
12920
32022987
154
27181
2020 Mgmt buyback
6337
12673
12720
32026327
156
2863
21920
32031675
133
3908
164612764
165246418
31220
32056675
111
15247
31220
32102256
111
27799
31220
32111368
111
5557
567659
3620
32126368
117
9643
Treasury on AST
567664
51220
32135868
50
2610
Diff
(5)
51420
32178868
48
11341
51420
32226329
48
12517
51120
32232129
51
1625
51120
32237929
51
1625
6120
32247738
30
1617
6120
32285306
30
6193
61120
32525306
20
26374
61120
32463776
20
(6762)
6820
32467776
23
505
62920
32470276
2
27
YTD Average Shares Outstanding
32130925
Quarter-to Date
112020
31788896
91
31788896
1820
31908896
91
120000
1820
31888896
91
(20000)
11020
31948896
91
60000
11420
31955563
91
6667
11420
31986230
91
30667
11420
31996897
91
10667
11420
32004564
91
7667
11420
31995364
91
(9200)
11420
31992164
91
(3200)
11420
31989864
91
(2300)
11420
31990864
91
1000
12920
32022987
91
32123
12720
32026327
91
3340
21920
32031675
91
5348
31220
32056675
91
25000
31220
32102256
91
45581
31220
32111368
91
9112
3620
32126368
91
15000
51220
32135868
50
5220
51420
32178868
48
22681
51420
32226329
48
25034
51120
32232129
51
3251
51120
32237929
51
3251
6120
32247738
30
3234
6120
32285306
30
12385
61120
32525306
20
52747
61120
32463776
20
(13523)
6820
32467776
23
1011
62920
32470276
2
55
QTD Average Shares Outstanding
32241713
C1
TA to the Summary tab
C2
TA to the Avg Stock Price tab
C3
TA to the Options Outstanding YTD tab
C4
TA to the Equity Rollforward WP
C5
TA to the AST Report in the Equity Rollfoward WP
C6
TA to the Options Outstanding QTD tab
C7
Custom 7
C8
See comment box
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
15
Comms Test Components
Product Optical Vector Analyzer (OVA)
Ensuring speed at the chip level
Unprecedented visibility inside devices ˗you canrsquot fix what you canrsquot see
Reduces time and cost associated with the development of high-speed optical components
Focus on enabling the carriers to move to 5G networks
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
16
Comms Test Short-haul network
Product Optical Backscatter Reflectometer (OBR)
Bandwidth demands continue to drive double-digit connectivity growth
Delivers unprecedented visibility into short-haul networks
Emerging market for on-board aircraft communications
Ensuring network ldquoup timerdquo on Lockheed Martinrsquos F-35
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
17
Luna Labs
Work with universities and government research labs to explore technological feasibility with a goal toward proof of concept
Collaborate with prime contractors government offices and federally-funded RampD centers
Work with contract manufacturers suppliers licensees and distributors to develop everything from small-scale prototypes up to and including market-ready products
Based in Charlottesville VA
2Q FY20 Results
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
19
Second-quarter 2020 Key Financial Results
Solid financial performance
$06M improvement in Adjusted EBITDA1 year-over-year
Total revenues of $186M up 4 year-over-year
Lightwave revenue of $129M up 3 year-over-year
Luna Labs revenue of $56M up 7 year-over-year
Operating income improved to $18M or 10 of total revenues in Q2 2020 from $10M or 6 of total revenues in Q2 2019 due to increased revenue and gross profit as well as improved operating expense leverage
Net income of $14M or $004 per fully diluted share for the three months ended June 30 2020 compared to $08M or $002 per fully diluted share for the three months ended June 30 2019
Adjusted EBITDA1 increased to $30M for the three months ended June 30 2020 compared to $24M for the three months ended June 30 2019
Reaffirmed 2020 outlook tighten range to $81 to $83M in total revenues
1Adj EBITDA is a non-GAAP measure Reconciliation of comparable GAAP measures to non-GAAP measures are included in the appendix to this presentation
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
20
Second-quarter 2020 and Other Recent Accomplishments
Reported solid second-quarter 2020 financial results in challenging COVID environment
Held 6 customer-facing technology educational webinars ~1000 live attendees and more than 1200 leads
Hosted worldwide virtual sales meeting with 47 attendees
Participated in virtual trade shows
Continued to monitor employee feedback with a focus on safety and well-being
Successful implementation of Employee Stock Purchase Plan with approximately 60 participation
Held successful Virtual Annual Shareholder Meeting in May
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
21
($20)
$03
$95
FY16 FY17 FY18 FY19 FY20
Adjusted EBITDA1 2
(millions)
$31
$296 $331
$429
$705
FY16 FY17 FY18 FY19 FY20
Revenue1
(millions)
$357
Strong Financial Results
1 Based on managementrsquos estimates of the impact from the divestiture of Optoelectronics Includes the acquisitions of Micron Optics and General Photonics2Adj EBITDA is a non-GAAP measure Reconciliation of comparable GAAP measures to non-GAAP measures are included in the appendix to this presentation
FY20 Guidance$810 - $830
FY20 Guidance $100 to $120
$45
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
22
A Flexible Balance Sheet and Strong Cash Position
Strong balance sheet on June 30 2020
$912M in total assets
bull $265M in cash and cash equivalents
bull $448M in working capital
Access to $10M revolving credit facility if needed
Continued focus on working capital and reinvestment in business in order to generate long-term sustainable growth
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
23
2020 Financial Outlook
Maintaining FY2020 outlook tightening our range
Total revenues of $81M to $83M
Adjusted EBITDA1 of $10M to $12M
1 Adj EBITDA is a non-GAAP measure Reconciliation of comparable GAAP measures to non-GAAP measures are included in the appendix to this presentation The outlook above does not include any future acquisitions divestitures or unanticipated events
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
24
Luna ndash Enabling the Future with Fiber
Proprietary measurement technology offering unprecedented combination of resolution accuracy and speed
Customers in attractive markets Military and Defense Communications Infrastructure Energy and Automotive
Positioned to take advantage of trends such as vehicle light-weighting and increasing demands on data centers and broadband capacity
Adequately capitalized to fund growth
Long-tenured experienced executive team board
Corporate culture of innovation and integrity
Overview
Appendix
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
26
Reconciliation of Net Income to Adjusted EBITDA
(1) Non-recurring charges consist of transaction-related expenses related to the acquisition of General Photonics
2020 2019 2020 2019
Reconciliation of EBITDA and Adjusted EBITDANet income 1369$ 841$ 253$ 1967$ Loss from discontinued operations net of income tax benefit of $464 - - 1436 -
Net income from continuing operations 1369 841 1689 1967 Interest expense 1 - 1 13 Investment income (4) (77) (64) (268) Income tax expense(benefit) 441 247 579 (1618) Depreciation and amortization 684 653 1363 1166
Reconciliation of Net Income to Adjusted EBITDA Full Year
(1) Non-recurring charges include the following 2017) CEO separation costs and other share-based compensation 2018) Transaction-related expenses associated with the acquisition of Micron Optics Inc 2019) Transaction related expenses and inventory step-up amortization relate to General Photonics acquisition and CFO transition expenses
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
28
New Segment Quarterly Results (in thousands)
March 31 2019 June 30 2019 Sep 30 2019 A Dec 31 2019 March 31 2020 June 30 2020
Total revenues 14833 17814 18389 19480 17141 18576
Cost of revenuesLightwave 4280 5334 5449 5070 4885 5181 Luna Labs 3785 3728 3665 4022 3892 3878
Total cost of revenues 8065 9062 9114 9092 8777 9059
Gross Profit 6768 8752 9275 10388 8364 9517
Operating expenseSelling general and administrative 6207 6003 5745 6416 6377 6202 Research development and engineering 1458 1735 2048 2255 1597 1505
Total operating expense 7665 7738 7793 8671 7974 7707
Operating income (897)$ 1014$ 1482$ 1717$ 390$ 1810$
A The Company revised its results for the three months ended September 30 2019 The Company has concluded these adjustments are not material individually or in the aggregate
Three Months Ended
Scott A Graeff President and CEO
Safe Harbor
Luna ndash Enabling the Future with Fiber
Luna is a global company
Luna has a clear vision and established history
Compelling business model with strong growth potential
Lightwave 2019 revenue1 snapshot
Luna Overview
Where Does Luna Play
Sensing
Sensing Short-range high-resolution
Sensing long-range high-speed
Sensing Material thickness
Comms Test
Comms Test Components
Comms Test Short-haul network
Luna Labs
2Q FY20 Results
Second-quarter 2020 Key Financial Results
Second-quarter 2020 and Other Recent Accomplishments
Slide Number 21
A Flexible Balance Sheet and Strong Cash Position
2020 Financial Outlook
Luna ndash Enabling the Future with Fiber
Appendix
Reconciliation of Net Income to Adjusted EBITDA
Reconciliation of Net Income to Adjusted EBITDA Full Year
New Segment Quarterly Results
(in thousands)
Three Months Ended
December 31 2018
A
March 31 2019
C
June 30 2019
September 30 2019
December 31 2019
March 31 2020
June 30 2020
Revenues
Lightwave
$ 11345
$ 10221
$ 12523
$ 13120
$ 13988
$ 11554
12933
Luna Labs
5548
6641
5291
5301
5492
5587
5642
Total revenues
16893
16862
17814
18421
19480
17141
18576
Cost of revenues
Lightwave
4002
3836
5334
5471
5070
4885
5181
Luna Labs
4268
4816
3728
3665
4022
3892
3878
Total cost of revenues
8270
8652
9062
9136
9092
8777
9059
Gross Profit
8623
8210
8752
9285
10388
8364
9517
Operating expense
Selling general and administrative
6394
7165
6003
5754
6415
6377
6202
Research development and engineering
1894
1708
1735
2047
2255
1597
1505
Total operating expense
8288
8873
7738
7801
8670
7974
7707
Operating income
$ 335
$ (663)
$ 1014
$ 1484
$ 1718
$ 390
$ 1810
Historical - Hidden
A
Includes $751000 of costs associated with the acquisition of Micron Optics
B
Unaudited pro forma financials assumes the General Photonics business was acquired on January 1 2019
C
Includes $898000 of costs associated with the acquisition of General Photonics
Year Ended December 31
(unaudited)
2016
2017
2018
2019
Reconciliation of EBITDA and Adjusted EBITDA
Net (loss)income
$ (2370)
$ 14615
$ 11004
$ 5343
Less income from discontinued operations net of income taxes
300
15866
9766
- 0
Loss from discontinued operations net of income tax benefit of $464
- 0
- 0
- 0
- 0
Net income from continuing operations
(2670)
(1251)
1238
5343
Interest expense
319
217
124
16
Investment income
- 0
- 0
(549)
(394)
Income tax (benefit)expense
(135)
(1148)
48
(1654)
Depreciation and amortization
1466
1137
908
2503
EBITDA
(1020)
(1045)
1769
5814
Share-based compensation
860
715
628
1544
Non-Recurring Charges (1)
- 0
596
751
1390
Amortization of Inventory Step-up
- 0
- 0
- 0
725
Adjusted EBITDA
$ (160)
$ 266
$ 3148
$ 9473
1
Non-recurring charges include the following 2017) CEO separation costs and other share-based compensation 2018) Transaction-related expenses associated with the acquisition of Micron Optics Inc 2019) Transaction related expenses and inventory step-up amortization relate to General Photonics acquisition and CFO transition expenses
Luna Innovations Incorporated
Reconciliation of Non-GAAP Financial Measures
(in thousands)
Three Months Ended
Six Months Ended
June 30
June 30
2020
2019
2020
2019
(Unaudited)
(Unaudited)
Reconciliation of EBITDA and Adjusted EBITDA
Net income
$ 1369
$ - 0
$ 841
$ 253
$ - 0
$ 1967
Loss from discontinued operations net of income tax benefit of $464
- 0
- 0
- 0
1436
- 0
- 0
Gain on sale of asset
- 0
- 0
- 0
- 0
- 0
- 0
Net income from continuing operations
1369
- 0
841
1689
- 0
1967
Interest expense
1
- 0
- 0
1
- 0
13
Investment income
(4)
- 0
(77)
(64)
- 0
(268)
Income tax expense(benefit)
441
- 0
247
579
- 0
(1618)
Depreciation and amortization
684
- 0
653
1363
- 0
1166
EBITDA
2490
- 0
1664
3568
- 0
1260
Share-based compensation
465
- 0
378
967
- 0
721
Non-Recurring Charges (1)
- 0
- 0
44
- 0
- 0
942
CFO Recruiting and Severance
- 0
- 0
- 0
- 0
- 0
- 0
Amortization of Inventory Step-up
- 0
- 0
310
- 0
- 0
412
- 0
- 0
- 0
- 0
- 0
- 0
Adjusted EBITDA
$ 2955
$ - 0
$ 2396
$ 4535
$ - 0
$ 3335
EBITDA Margin Percent on Total Revenues
134
93
100
39
Adjusted EBITDA Margin Percent on Total Revenues
159
134
127
102
Reconciliation of Non-GAAP EPS
Diluted EPS
$ 004
$ 002
$ 001
$ 005
Loss from discontinued operations net of income taxes
Existing Technology amortization missed from 101518-63019
- 0
15560
Amortization catch up from 101518-63019 in July 2019 only
In-process RampD
200000
0
- 0
1650000
4091764
Micron Purchase Amortization Detail - 812019 and forward
Trade Name
150000
36
4167
Customer Relationships
100000
84
1190
Existing Technology
1200000
60
20000
Amortization going forward
In-process RampD
200000
0
- 0
1650000
2535714
General Pho Purchase Amortization Detail - 312019
Trade Name
400000
36
11111
22822
Customer Relationships
600000
180
3333
22834
Existing Technology
7200000
96
75000
22827
In-process RampD
- 0
0
- 0
8200000
8944444
General Pho Inventory Step-up Amortization - 312019
WIP amp Fin Goods
724760
7
103537
Ends 93019
PampL Summary - Luna Innovations
For the Three Months Ending March 31 2020
QTD
QTD
QTD
YTD
YTD
YTD
Actual
Budget
Variance
Actual
Budget
Variance
fav(un-fav)
fav(un-fav)
Revenues
Lightwave
12933344
13366455
(433536)
24487335
25564000
(1077090)
686
Luna Labs
5642348
6075202
(432854)
11229350
11675307
(445957)
314
Total Revenues
18575692
19441657
(866390)
35716685
37239307
(1523047)
Cost of Revenues
Product and Licensing
5181057
5789978
608921
10066386
11082697
1016311
282
TDD
3877888
4448571
570683
7769627
8526736
757109
218
Total Cost of Revenues
9058945
10238549
570683
17836013
19609433
1773420
499
Gross Margin
Product and Licensing - $
7752287
7576477
175810
14420949
14481303
(60354)
Product and Licensing -
60
57
3
59
57
2
TDD - $
1764460
1626631
137829
3459723
3148571
311152
TDD -
31
27
4
31
27
4
Total Gross Margin
9516747
9203108
313639
17880672
17629874
250798
Gross Margin
51
47
4
50
47
3
501
Operating Expenses
Selling General amp Admin
6202338
8155800
1953888
12578977
14477853
1899301
Research Devel amp Engineering
1504800
647122
(857678)
3101865
2798808
(303057)
Total Operating Expenses
7707138
8802922
1096209
15680842
17276661
1595819
439
Operating Income (Loss)
1809609
400186
1409423
2199830
353213
1846617
62
Other Expense (Income)
Interest
930
985
55
1145
2195
1050
00
Investment Income
(4435)
(75000)
(70565)
(63790)
(150000)
(86210)
-02
Tax Expense
440626
118551
(498831)
579203
125253
(630706)
16
Tax Benefit from release of VA
-
-
-
-
-
-
00
Gainloss on foreigh exch
-
-
-
-
-
-
00
Other
3649
-
(3649)
(5236)
-
5236
-00
440770
44536
(396234)
511322
(22552)
(533874)
14
Income from continuing operations
1368839
355650
1805658
1688508
375765
2380491
Income from Disc Ops
Operating Income from Disc Ops
-
-
- 0
-
-
- 0
Gainloss of Asset Sale
-
-
- 0
(1435903)
-
(1435903)
Total Income from Disc Ops
- 0
- 0
- 0
(1435903)
- 0
(1435903)
Net Income (Loss)
1368839
355650
1013189
252605
375765
(123160)
07
Dividend on Preferred
- 0
- 0
- 0
- 0
- 0
- 0
Net Income (Loss) available to Common Shareholders
1368839
355650
1013189
252605
375765
(123160)
07
Depreciation
244214
491046
From Cash Flow
Amortization
439787
872410
From Cash Flow
Stock Compensation
465109
966932
From Cash Flow
Acquisition Costs
- 0
- 0
Amortization of Inventory Step-up
- 0
- 0
CFO Recruiting amp Severance
- 0
- 0
Treasury Stock Activity
63020
Stock Buyback - Held with Northland
Trade date
Settlement Date
of Shares
Avg Price
Commission
Trade date Total $
Number of Days
Weighted Avg
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
= Trades Not Settled
$000
$000
$000
$000
YTD Avg
0
0
Trade date
Settlement Date
of Shares
Avg Price
Commission
Trade date Total $
Number of Days
Weighted Avg
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
QTD Avg
0
0
0
0
2016 Amounts under program
205500
$24880840
$25086340
2017 Amounts under program
433179
$75649353
$76082532
2018 Amounts under program
132450
$30604099
$30736549
2019 Amounts under program
333953
$198663889
$199999701
Total
110508200
329798181
331905122
For Q Disclosure
Management Buyback - Held with AST
Date
Shares
YTD days os
YTD weighted avg
QTD days os
QTD Weighted Avg
Month
Quarter
Year
52720
Garrett James
6500
35
1250
35
2500
Jan
31
- 0
- 0
52720
Graeff Scott
17450
35
3356
35
6712
Feb
29
- 0
- 0
52720
Soller Brian
9000
35
1731
35
3462
Mar
31
91
91
44013
- 0
91
- 0
Apr
30
- 0
- 0
44013
- 0
91
- 0
May
31
- 0
- 0
44013
- 0
91
- 0
Jun
30
91
182
44013
- 0
91
- 0
Jul
31
- 0
- 0
44013
- 0
91
- 0
Aug
31
- 0
- 0
44013
- 0
91
- 0
Sept
30
92
274
- 0
- 0
Oct
31
- 0
- 0
- 0
- 0
Nov
30
- 0
- 0
- 0
- 0
Dec
31
92
366
32950
6337
12673
BOD buyback
YTD
$000
$000
44013
- 0
Qtr
$000
$000
44013
- 0
Luna
Date
CloseLast
1220
738
Average Close Price
1320
718
Year-To-Date
$ 696
1620
73
Quarter-To-Date
$ 652
1720
735
1820
756
1920
777
11020
787
11320
803
11420
804
11520
832
11620
85
11720
845
12120
827
12220
833
12320
849
12420
844
12720
828
12820
856
12920
85
13020
846
13120
819
2320
825
2420
821
2520
82
2620
819
2720
837
21020
85
21120
858
21220
904
21320
895
21420
897
21820
891
21920
891
22020
907
22120
923
22420
861
22520
745
22620
759
22720
707
22820
67
3220
713
3320
693
3420
719
3520
689
3620
75
3920
672
31020
66
31120
599
31220
521
31320
522
31620
491
31720
553
31820
473
31920
487
32020
48
32320
509
32420
543
32520
582
32620
617
32720
583
33020
623
33120
615
4120
585
4220
583
4320
572
4620
607
4720
605
4820
631
4920
665
41320
656
41420
683
41520
711
41620
734
41720
727
42020
73
42120
672
42220
683
42320
691
42420
715
42720
721
42820
74
42920
777
43020
763
5120
724
5420
751
5520
762
5620
76
5720
749
5820
782
51120
704
51220
705
51320
62
51420
578
51520
537
51820
591
51920
625
52020
61
52120
6
52220
609
52620
615
52720
62
52820
609
52920
61
6120
629
6220
628
6320
653
6420
649
6520
663
6820
667
6920
635
61020
643
61120
583
61220
606
61520
625
61620
631
61720
615
61820
599
61920
601
62220
616
62320
624
62420
615
62520
615
62620
571
62920
585
63020
584
Qtr
1
2
3
4
Options
Options
Aggregate Strike Price
Intrinsic Value
Outstanding
Exercisable
Outstanding
Exercisable
Outstanding
Exercisable
Luna
2418245
1309606
$6482283
$2709686
7767068
4952824
2418245
1309606
6482283
2709686
7767068
4952824
Warrants Aaron Chase Aaron ChaseCarilion exercised all warrants in Q2 and Q3 2018
0
0
0
0
2418245
1309606
6482283
2709686
Average Strike Price
$ 268
$ 207
Pull Cancelled for whole year
Cancels
Q1
35659 Aaron Chase Aaron Chase22999 of canceled shares didnrsquot show up until Q2-20 report
Aaron Chase Aaron ChaseCarilion exercised all warrants in Q2 and Q3 2018
$ 364
12990180
Outstanding 12312019
3160397
Q2
13124
$ 211
2769912
Q3
- 0
ERRORDIV0
- 0
Grants
20000
Q4
- 0
ERRORDIV0
- 0
Exercised
(662965)
48783
$ 323
15760092
Canceled
(48783)
Corrected Termed EEs from 2019
(50404)
These were corrected in June 2020
2418245
Remaining life
Options
Avg Life
- 0
Outstanding
Luna
2418245
644
Exercisable
1309606
474
Remaining service
Luna
2418245
See awards outstanding by grant price range report and Disclosure report for information on this tab
Luna Innovations
Additional Notes
EPS Calculations
During Jan-2019 and 2020 Management was awarded Performance Based Grants and Time Based Grants
63020
The Performance Based Grants vest after 3 years and are issued only if the performance is achieved
The Time Based Grants vest each year for 3 years Grants are issued once vested each year
Yearly BOD Grants
Basic EPS
DSU deferred stock units vest in a year but do not become issued until the Director leaves the Board This started in 2018
Net Income (loss) Per Share from Continuing Operations
YTD
Diluted
QTD
Diluted
DSU awards vest in May 2021 and will be added to the middle section of the EPS in May 2021
Net Income from Continuing Operations
1688508
1368839
Rich Roedel
8877
704
62500
Common Shares Outstanding
30484797
30589249
Barry Phelps
5326
704
37500
$ 006
$ 005
$ 004
$ 004
Leigh Anderson
5326
704
37500
Mary Beth Vitale
5326
704
37500
Net income (loss) Per Share attributable to common shareholders
RSU restricted stock units vest and are issued in a year and will be added to the bottom of the EPS in May 2021
Net Income (Loss) available to Shareholders
252605
1368839
Don Pastor
5326
704
37500
Common Shares Outstanding
30484797
30589249
Gary Spiegel
5326
704
37500
$ 001
$ 001
$ 004
$ 004
Net income (loss) Per Share from Discontinued Operations
Net Income from Discontinued Operations
(1435903)
- 0
Common Shares Outstanding
30484797
30589249
$ (005)
$ (004)
$ - 0
$ - 0
Diluted EPS
Net Income(Loss) available to SHs
252605
1368839
Common Shares Outstanding
30484797
30589249
Common Stock Equivalent
2010153
1876873
$ 001
- 0 Grant Thornton LLP Grant Thornton LLPAs earnings from continuing operations are negative (loss) basic and diluted EPS equal one another
$ 004 Grant Thornton LLP Grant Thornton LLPAs earnings from continuing operations are negative (loss) basic and diluted EPS equal one another
- 0 Grant Thornton LLP Grant Thornton LLPAs earnings from continuing operations are negative (loss) basic and diluted EPS equal one another
Non-GAAP Diluted EPS
Net income (loss) Per Share attributable to common shareholders
Net Income (Loss) available to Shareholders
252605
1368839
Loss from discontinued operations
1435903
- 0
Share-based compensation
966932
465109
Amortization of acquired intangibles
344405
688810
Acquisition related costs
- 0
- 0
Amortization of Inventory Step-up
- 0
- 0
Common Shares Outstanding
30484797
30589249
Common Stock Equivalent
2010153
1876873
$ 009
$ 008
YTD
QTD
Total issued shares
32470276
Average Close Price
$ 696
$ 652
Total treasury
1672741
Shares Outstanding
30797535
Net change in denominator
1404924 Kelly Bewick Aaron Chasesee Dilution (stock option) dilutive tab
1264984
BOD fees paid in DSUs Aaron Chase Aaron ChaseFrom Equity Award Transactions Report
Month
Quarter
Year
Balance at 112019 - DSU outstanding
591457
591457
Jan
31
Issued during Q1 2020
7114
7114
Feb
29
Issued during Q2 2020
3947
7894
Mar
31
91
91
Annual grant DSU vested 5112020
10521 KBSResults KBSResultsEnter 2019 DSU annual grant when vest in 2020 (probably May) you do not need to enter annual RSU because it will be issued in AST
21042
Apr
30
Deferred Equity Issuance 6012020
(7809) KBSResults Aaron ChaseM Wise and J Williamson retired from the BoD in May 2020 Wise Deferred Comp will be issued every June 1 for 10 years Williamson Deferred Comp will be issued every June 1 for 5 years
Grant Thornton LLP Grant Thornton LLPAs earnings from continuing operations are negative (loss) basic and diluted EPS equal one another
Grant Thornton LLP Grant Thornton LLPAs earnings from continuing operations are negative (loss) basic and diluted EPS equal one another
(15619)
May
31
Issued during Q3 2020
- 0
- 0
Jun
30
91
182
Issued during Q4 2020
- 0
- 0
Jul
31
Aug
31
Sept
30
92
274
Oct
31
Totals (Antidilutive)
2010153
1876873
Nov
30
Dec
31
92
366
Shares Outstanding as of 112020
31788896
As Of Date
Transaction
Reason
Name
Shares Issued
Shares Retired
Running Total
01012020
Normal
Balance Roll Forward
- 0
- 0
31788896
01082020
Normal
Option Exercise
Williamson John
12000000
- 0
31908896
01082020
Normal
Retirement - Vested Restriced Stock
Exer Options
Williamson John
- 0
2000000
31888896
01102020
Normal
Option Exercise
Roedel Rich
6000000
- 0
31948896
01142020
Normal
2019 Time-Based RSU Vesting
Messick Dale
666700
- 0
31955563
01142020
Normal
2019 Time-Based RSU Vesting
Graeff Scott
3066700
- 0
31986230
01142020
Normal
2019 Time-Based RSU Vesting
Soller Brian
1066700
- 0
31996897
01142020
Normal
2019 Time-Based RSU Vesting
Garrett James
766700
- 0
32004564
01142020
Normal
2019 Time-Based RSU Retirement
Taxes
Graeff Scott
- 0
920000
31995364
01142020
Normal
2019 Time-Based RSU Retirement
Taxes
Soller Brian
- 0
320000
31992164
01142020
Normal
2019 Time-Based RSU Retirement
Taxes
Garrett James
- 0
230000
31989864
01142020
Normal
Option Exercise
Burris Kevin
100000
- 0
31990864
01292020
Normal
Option Exercise
Carr Dustin
3212300
- 0
32022987
01272020
Normal
Option Exercise
Chen James
334000
- 0
32026327
02192020
Normal
Option Exercise
McPherson Daniel
534800
- 0
32031675
03122020
Normal
Option Exercise
Haber Todd
2500000
- 0
32056675
03122020
Normal
Option Exercise
Graver Thomas
4558100
- 0
32102256
03122020
Normal
Option Exercise
Baez Michael
911200
- 0
32111368
03062020
Normal
Option Exercise
Farooqui Salvan
1500000
- 0
32126368
05122020
Normal
Option Exercise
Baez Michael
950000
- 0
32135868
05142020
Normal
Option Exercise
Haber Todd
4300000
- 0
32178868
05142020
Normal
Option Exercise
Graver Thomas
4746100
- 0
32226329
05112020
Normal
Annual Equity Grant Vesting-BoD
Pastor Don
580000
- 0
32232129
05112020
Normal
Annual Equity Grant Vesting-BoD
Williamson John
580000
- 0
32237929
06012020
Normal
Deferred Stock Issuance-BoD
Wise Mike
980900
- 0
32247738
06012020
Normal
Deferred Stock Issuance-BoD
Williamson John
3756800
32285306
06112020
Normal
Option Exercise
Wise Mike
24000000
32525306
06112020
Normal
Retirement - Vested Stock
Exer Options
Wise Mike
6153000
32463776
06082020
Normal
Option Exercise
Pruzan Michael
400000
32467776
06292020
Normal
Option Exercise
Farooqui Salvan
250000
32470276
Date Issued
Balance Outstanding
Number of Days
Weighted Avg
Treasury Shares Weighted Average
Year-to-Date
YTD
QTD
1120
31788896
182
31788896
Graeff July 2
115000
115000
1820
31908896
175
115385
Q2 2015
29925
29925
1820
31888896
175
(19231)
2014
22725
22725
11020
31948896
173
57033
2016 Mgmt buyback
73675
73675
11420
31955563
169
6191
2016 repurchase program
205500
205500
11420
31986230
169
28477
2017 Mgmt buyback
90900
90900
11420
31996897
169
9905
2017 BOD buyback
100000
100000
11420
32004564
169
7119
2017 repurchase program
433179
433179
11420
31995364
169
(8543)
2018 repurchase program
132450
132450
11420
31992164
169
(2971)
2018 Mgmt buyback
49751
49751
11420
31989864
169
(2136)
2019 Mgmt buyback
52733
52733
11420
31990864
169
929
2019 repurchase program
333953
333953
12920
32022987
154
27181
2020 Mgmt buyback
6337
12673
12720
32026327
156
2863
21920
32031675
133
3908
164612764
165246418
31220
32056675
111
15247
31220
32102256
111
27799
31220
32111368
111
5557
567659
3620
32126368
117
9643
Treasury on AST
567664
51220
32135868
50
2610
Diff
(5)
51420
32178868
48
11341
51420
32226329
48
12517
51120
32232129
51
1625
51120
32237929
51
1625
6120
32247738
30
1617
6120
32285306
30
6193
61120
32525306
20
26374
61120
32463776
20
(6762)
6820
32467776
23
505
62920
32470276
2
27
YTD Average Shares Outstanding
32130925
Quarter-to Date
112020
31788896
91
31788896
1820
31908896
91
120000
1820
31888896
91
(20000)
11020
31948896
91
60000
11420
31955563
91
6667
11420
31986230
91
30667
11420
31996897
91
10667
11420
32004564
91
7667
11420
31995364
91
(9200)
11420
31992164
91
(3200)
11420
31989864
91
(2300)
11420
31990864
91
1000
12920
32022987
91
32123
12720
32026327
91
3340
21920
32031675
91
5348
31220
32056675
91
25000
31220
32102256
91
45581
31220
32111368
91
9112
3620
32126368
91
15000
51220
32135868
50
5220
51420
32178868
48
22681
51420
32226329
48
25034
51120
32232129
51
3251
51120
32237929
51
3251
6120
32247738
30
3234
6120
32285306
30
12385
61120
32525306
20
52747
61120
32463776
20
(13523)
6820
32467776
23
1011
62920
32470276
2
55
QTD Average Shares Outstanding
32241713
C1
TA to the Summary tab
C2
TA to the Avg Stock Price tab
C3
TA to the Options Outstanding YTD tab
C4
TA to the Equity Rollforward WP
C5
TA to the AST Report in the Equity Rollfoward WP
C6
TA to the Options Outstanding QTD tab
C7
Custom 7
C8
See comment box
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
16
Comms Test Short-haul network
Product Optical Backscatter Reflectometer (OBR)
Bandwidth demands continue to drive double-digit connectivity growth
Delivers unprecedented visibility into short-haul networks
Emerging market for on-board aircraft communications
Ensuring network ldquoup timerdquo on Lockheed Martinrsquos F-35
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
17
Luna Labs
Work with universities and government research labs to explore technological feasibility with a goal toward proof of concept
Collaborate with prime contractors government offices and federally-funded RampD centers
Work with contract manufacturers suppliers licensees and distributors to develop everything from small-scale prototypes up to and including market-ready products
Based in Charlottesville VA
2Q FY20 Results
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
19
Second-quarter 2020 Key Financial Results
Solid financial performance
$06M improvement in Adjusted EBITDA1 year-over-year
Total revenues of $186M up 4 year-over-year
Lightwave revenue of $129M up 3 year-over-year
Luna Labs revenue of $56M up 7 year-over-year
Operating income improved to $18M or 10 of total revenues in Q2 2020 from $10M or 6 of total revenues in Q2 2019 due to increased revenue and gross profit as well as improved operating expense leverage
Net income of $14M or $004 per fully diluted share for the three months ended June 30 2020 compared to $08M or $002 per fully diluted share for the three months ended June 30 2019
Adjusted EBITDA1 increased to $30M for the three months ended June 30 2020 compared to $24M for the three months ended June 30 2019
Reaffirmed 2020 outlook tighten range to $81 to $83M in total revenues
1Adj EBITDA is a non-GAAP measure Reconciliation of comparable GAAP measures to non-GAAP measures are included in the appendix to this presentation
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
20
Second-quarter 2020 and Other Recent Accomplishments
Reported solid second-quarter 2020 financial results in challenging COVID environment
Held 6 customer-facing technology educational webinars ~1000 live attendees and more than 1200 leads
Hosted worldwide virtual sales meeting with 47 attendees
Participated in virtual trade shows
Continued to monitor employee feedback with a focus on safety and well-being
Successful implementation of Employee Stock Purchase Plan with approximately 60 participation
Held successful Virtual Annual Shareholder Meeting in May
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
21
($20)
$03
$95
FY16 FY17 FY18 FY19 FY20
Adjusted EBITDA1 2
(millions)
$31
$296 $331
$429
$705
FY16 FY17 FY18 FY19 FY20
Revenue1
(millions)
$357
Strong Financial Results
1 Based on managementrsquos estimates of the impact from the divestiture of Optoelectronics Includes the acquisitions of Micron Optics and General Photonics2Adj EBITDA is a non-GAAP measure Reconciliation of comparable GAAP measures to non-GAAP measures are included in the appendix to this presentation
FY20 Guidance$810 - $830
FY20 Guidance $100 to $120
$45
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
22
A Flexible Balance Sheet and Strong Cash Position
Strong balance sheet on June 30 2020
$912M in total assets
bull $265M in cash and cash equivalents
bull $448M in working capital
Access to $10M revolving credit facility if needed
Continued focus on working capital and reinvestment in business in order to generate long-term sustainable growth
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
23
2020 Financial Outlook
Maintaining FY2020 outlook tightening our range
Total revenues of $81M to $83M
Adjusted EBITDA1 of $10M to $12M
1 Adj EBITDA is a non-GAAP measure Reconciliation of comparable GAAP measures to non-GAAP measures are included in the appendix to this presentation The outlook above does not include any future acquisitions divestitures or unanticipated events
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
24
Luna ndash Enabling the Future with Fiber
Proprietary measurement technology offering unprecedented combination of resolution accuracy and speed
Customers in attractive markets Military and Defense Communications Infrastructure Energy and Automotive
Positioned to take advantage of trends such as vehicle light-weighting and increasing demands on data centers and broadband capacity
Adequately capitalized to fund growth
Long-tenured experienced executive team board
Corporate culture of innovation and integrity
Overview
Appendix
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
26
Reconciliation of Net Income to Adjusted EBITDA
(1) Non-recurring charges consist of transaction-related expenses related to the acquisition of General Photonics
2020 2019 2020 2019
Reconciliation of EBITDA and Adjusted EBITDANet income 1369$ 841$ 253$ 1967$ Loss from discontinued operations net of income tax benefit of $464 - - 1436 -
Net income from continuing operations 1369 841 1689 1967 Interest expense 1 - 1 13 Investment income (4) (77) (64) (268) Income tax expense(benefit) 441 247 579 (1618) Depreciation and amortization 684 653 1363 1166
Reconciliation of Net Income to Adjusted EBITDA Full Year
(1) Non-recurring charges include the following 2017) CEO separation costs and other share-based compensation 2018) Transaction-related expenses associated with the acquisition of Micron Optics Inc 2019) Transaction related expenses and inventory step-up amortization relate to General Photonics acquisition and CFO transition expenses
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
28
New Segment Quarterly Results (in thousands)
March 31 2019 June 30 2019 Sep 30 2019 A Dec 31 2019 March 31 2020 June 30 2020
Total revenues 14833 17814 18389 19480 17141 18576
Cost of revenuesLightwave 4280 5334 5449 5070 4885 5181 Luna Labs 3785 3728 3665 4022 3892 3878
Total cost of revenues 8065 9062 9114 9092 8777 9059
Gross Profit 6768 8752 9275 10388 8364 9517
Operating expenseSelling general and administrative 6207 6003 5745 6416 6377 6202 Research development and engineering 1458 1735 2048 2255 1597 1505
Total operating expense 7665 7738 7793 8671 7974 7707
Operating income (897)$ 1014$ 1482$ 1717$ 390$ 1810$
A The Company revised its results for the three months ended September 30 2019 The Company has concluded these adjustments are not material individually or in the aggregate
Three Months Ended
Scott A Graeff President and CEO
Safe Harbor
Luna ndash Enabling the Future with Fiber
Luna is a global company
Luna has a clear vision and established history
Compelling business model with strong growth potential
Lightwave 2019 revenue1 snapshot
Luna Overview
Where Does Luna Play
Sensing
Sensing Short-range high-resolution
Sensing long-range high-speed
Sensing Material thickness
Comms Test
Comms Test Components
Comms Test Short-haul network
Luna Labs
2Q FY20 Results
Second-quarter 2020 Key Financial Results
Second-quarter 2020 and Other Recent Accomplishments
Slide Number 21
A Flexible Balance Sheet and Strong Cash Position
2020 Financial Outlook
Luna ndash Enabling the Future with Fiber
Appendix
Reconciliation of Net Income to Adjusted EBITDA
Reconciliation of Net Income to Adjusted EBITDA Full Year
New Segment Quarterly Results
(in thousands)
Three Months Ended
December 31 2018
A
March 31 2019
C
June 30 2019
September 30 2019
December 31 2019
March 31 2020
June 30 2020
Revenues
Lightwave
$ 11345
$ 10221
$ 12523
$ 13120
$ 13988
$ 11554
12933
Luna Labs
5548
6641
5291
5301
5492
5587
5642
Total revenues
16893
16862
17814
18421
19480
17141
18576
Cost of revenues
Lightwave
4002
3836
5334
5471
5070
4885
5181
Luna Labs
4268
4816
3728
3665
4022
3892
3878
Total cost of revenues
8270
8652
9062
9136
9092
8777
9059
Gross Profit
8623
8210
8752
9285
10388
8364
9517
Operating expense
Selling general and administrative
6394
7165
6003
5754
6415
6377
6202
Research development and engineering
1894
1708
1735
2047
2255
1597
1505
Total operating expense
8288
8873
7738
7801
8670
7974
7707
Operating income
$ 335
$ (663)
$ 1014
$ 1484
$ 1718
$ 390
$ 1810
Historical - Hidden
A
Includes $751000 of costs associated with the acquisition of Micron Optics
B
Unaudited pro forma financials assumes the General Photonics business was acquired on January 1 2019
C
Includes $898000 of costs associated with the acquisition of General Photonics
Year Ended December 31
(unaudited)
2016
2017
2018
2019
Reconciliation of EBITDA and Adjusted EBITDA
Net (loss)income
$ (2370)
$ 14615
$ 11004
$ 5343
Less income from discontinued operations net of income taxes
300
15866
9766
- 0
Loss from discontinued operations net of income tax benefit of $464
- 0
- 0
- 0
- 0
Net income from continuing operations
(2670)
(1251)
1238
5343
Interest expense
319
217
124
16
Investment income
- 0
- 0
(549)
(394)
Income tax (benefit)expense
(135)
(1148)
48
(1654)
Depreciation and amortization
1466
1137
908
2503
EBITDA
(1020)
(1045)
1769
5814
Share-based compensation
860
715
628
1544
Non-Recurring Charges (1)
- 0
596
751
1390
Amortization of Inventory Step-up
- 0
- 0
- 0
725
Adjusted EBITDA
$ (160)
$ 266
$ 3148
$ 9473
1
Non-recurring charges include the following 2017) CEO separation costs and other share-based compensation 2018) Transaction-related expenses associated with the acquisition of Micron Optics Inc 2019) Transaction related expenses and inventory step-up amortization relate to General Photonics acquisition and CFO transition expenses
Luna Innovations Incorporated
Reconciliation of Non-GAAP Financial Measures
(in thousands)
Three Months Ended
Six Months Ended
June 30
June 30
2020
2019
2020
2019
(Unaudited)
(Unaudited)
Reconciliation of EBITDA and Adjusted EBITDA
Net income
$ 1369
$ - 0
$ 841
$ 253
$ - 0
$ 1967
Loss from discontinued operations net of income tax benefit of $464
- 0
- 0
- 0
1436
- 0
- 0
Gain on sale of asset
- 0
- 0
- 0
- 0
- 0
- 0
Net income from continuing operations
1369
- 0
841
1689
- 0
1967
Interest expense
1
- 0
- 0
1
- 0
13
Investment income
(4)
- 0
(77)
(64)
- 0
(268)
Income tax expense(benefit)
441
- 0
247
579
- 0
(1618)
Depreciation and amortization
684
- 0
653
1363
- 0
1166
EBITDA
2490
- 0
1664
3568
- 0
1260
Share-based compensation
465
- 0
378
967
- 0
721
Non-Recurring Charges (1)
- 0
- 0
44
- 0
- 0
942
CFO Recruiting and Severance
- 0
- 0
- 0
- 0
- 0
- 0
Amortization of Inventory Step-up
- 0
- 0
310
- 0
- 0
412
- 0
- 0
- 0
- 0
- 0
- 0
Adjusted EBITDA
$ 2955
$ - 0
$ 2396
$ 4535
$ - 0
$ 3335
EBITDA Margin Percent on Total Revenues
134
93
100
39
Adjusted EBITDA Margin Percent on Total Revenues
159
134
127
102
Reconciliation of Non-GAAP EPS
Diluted EPS
$ 004
$ 002
$ 001
$ 005
Loss from discontinued operations net of income taxes
Existing Technology amortization missed from 101518-63019
- 0
15560
Amortization catch up from 101518-63019 in July 2019 only
In-process RampD
200000
0
- 0
1650000
4091764
Micron Purchase Amortization Detail - 812019 and forward
Trade Name
150000
36
4167
Customer Relationships
100000
84
1190
Existing Technology
1200000
60
20000
Amortization going forward
In-process RampD
200000
0
- 0
1650000
2535714
General Pho Purchase Amortization Detail - 312019
Trade Name
400000
36
11111
22822
Customer Relationships
600000
180
3333
22834
Existing Technology
7200000
96
75000
22827
In-process RampD
- 0
0
- 0
8200000
8944444
General Pho Inventory Step-up Amortization - 312019
WIP amp Fin Goods
724760
7
103537
Ends 93019
PampL Summary - Luna Innovations
For the Three Months Ending March 31 2020
QTD
QTD
QTD
YTD
YTD
YTD
Actual
Budget
Variance
Actual
Budget
Variance
fav(un-fav)
fav(un-fav)
Revenues
Lightwave
12933344
13366455
(433536)
24487335
25564000
(1077090)
686
Luna Labs
5642348
6075202
(432854)
11229350
11675307
(445957)
314
Total Revenues
18575692
19441657
(866390)
35716685
37239307
(1523047)
Cost of Revenues
Product and Licensing
5181057
5789978
608921
10066386
11082697
1016311
282
TDD
3877888
4448571
570683
7769627
8526736
757109
218
Total Cost of Revenues
9058945
10238549
570683
17836013
19609433
1773420
499
Gross Margin
Product and Licensing - $
7752287
7576477
175810
14420949
14481303
(60354)
Product and Licensing -
60
57
3
59
57
2
TDD - $
1764460
1626631
137829
3459723
3148571
311152
TDD -
31
27
4
31
27
4
Total Gross Margin
9516747
9203108
313639
17880672
17629874
250798
Gross Margin
51
47
4
50
47
3
501
Operating Expenses
Selling General amp Admin
6202338
8155800
1953888
12578977
14477853
1899301
Research Devel amp Engineering
1504800
647122
(857678)
3101865
2798808
(303057)
Total Operating Expenses
7707138
8802922
1096209
15680842
17276661
1595819
439
Operating Income (Loss)
1809609
400186
1409423
2199830
353213
1846617
62
Other Expense (Income)
Interest
930
985
55
1145
2195
1050
00
Investment Income
(4435)
(75000)
(70565)
(63790)
(150000)
(86210)
-02
Tax Expense
440626
118551
(498831)
579203
125253
(630706)
16
Tax Benefit from release of VA
-
-
-
-
-
-
00
Gainloss on foreigh exch
-
-
-
-
-
-
00
Other
3649
-
(3649)
(5236)
-
5236
-00
440770
44536
(396234)
511322
(22552)
(533874)
14
Income from continuing operations
1368839
355650
1805658
1688508
375765
2380491
Income from Disc Ops
Operating Income from Disc Ops
-
-
- 0
-
-
- 0
Gainloss of Asset Sale
-
-
- 0
(1435903)
-
(1435903)
Total Income from Disc Ops
- 0
- 0
- 0
(1435903)
- 0
(1435903)
Net Income (Loss)
1368839
355650
1013189
252605
375765
(123160)
07
Dividend on Preferred
- 0
- 0
- 0
- 0
- 0
- 0
Net Income (Loss) available to Common Shareholders
1368839
355650
1013189
252605
375765
(123160)
07
Depreciation
244214
491046
From Cash Flow
Amortization
439787
872410
From Cash Flow
Stock Compensation
465109
966932
From Cash Flow
Acquisition Costs
- 0
- 0
Amortization of Inventory Step-up
- 0
- 0
CFO Recruiting amp Severance
- 0
- 0
Treasury Stock Activity
63020
Stock Buyback - Held with Northland
Trade date
Settlement Date
of Shares
Avg Price
Commission
Trade date Total $
Number of Days
Weighted Avg
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
= Trades Not Settled
$000
$000
$000
$000
YTD Avg
0
0
Trade date
Settlement Date
of Shares
Avg Price
Commission
Trade date Total $
Number of Days
Weighted Avg
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
QTD Avg
0
0
0
0
2016 Amounts under program
205500
$24880840
$25086340
2017 Amounts under program
433179
$75649353
$76082532
2018 Amounts under program
132450
$30604099
$30736549
2019 Amounts under program
333953
$198663889
$199999701
Total
110508200
329798181
331905122
For Q Disclosure
Management Buyback - Held with AST
Date
Shares
YTD days os
YTD weighted avg
QTD days os
QTD Weighted Avg
Month
Quarter
Year
52720
Garrett James
6500
35
1250
35
2500
Jan
31
- 0
- 0
52720
Graeff Scott
17450
35
3356
35
6712
Feb
29
- 0
- 0
52720
Soller Brian
9000
35
1731
35
3462
Mar
31
91
91
44013
- 0
91
- 0
Apr
30
- 0
- 0
44013
- 0
91
- 0
May
31
- 0
- 0
44013
- 0
91
- 0
Jun
30
91
182
44013
- 0
91
- 0
Jul
31
- 0
- 0
44013
- 0
91
- 0
Aug
31
- 0
- 0
44013
- 0
91
- 0
Sept
30
92
274
- 0
- 0
Oct
31
- 0
- 0
- 0
- 0
Nov
30
- 0
- 0
- 0
- 0
Dec
31
92
366
32950
6337
12673
BOD buyback
YTD
$000
$000
44013
- 0
Qtr
$000
$000
44013
- 0
Luna
Date
CloseLast
1220
738
Average Close Price
1320
718
Year-To-Date
$ 696
1620
73
Quarter-To-Date
$ 652
1720
735
1820
756
1920
777
11020
787
11320
803
11420
804
11520
832
11620
85
11720
845
12120
827
12220
833
12320
849
12420
844
12720
828
12820
856
12920
85
13020
846
13120
819
2320
825
2420
821
2520
82
2620
819
2720
837
21020
85
21120
858
21220
904
21320
895
21420
897
21820
891
21920
891
22020
907
22120
923
22420
861
22520
745
22620
759
22720
707
22820
67
3220
713
3320
693
3420
719
3520
689
3620
75
3920
672
31020
66
31120
599
31220
521
31320
522
31620
491
31720
553
31820
473
31920
487
32020
48
32320
509
32420
543
32520
582
32620
617
32720
583
33020
623
33120
615
4120
585
4220
583
4320
572
4620
607
4720
605
4820
631
4920
665
41320
656
41420
683
41520
711
41620
734
41720
727
42020
73
42120
672
42220
683
42320
691
42420
715
42720
721
42820
74
42920
777
43020
763
5120
724
5420
751
5520
762
5620
76
5720
749
5820
782
51120
704
51220
705
51320
62
51420
578
51520
537
51820
591
51920
625
52020
61
52120
6
52220
609
52620
615
52720
62
52820
609
52920
61
6120
629
6220
628
6320
653
6420
649
6520
663
6820
667
6920
635
61020
643
61120
583
61220
606
61520
625
61620
631
61720
615
61820
599
61920
601
62220
616
62320
624
62420
615
62520
615
62620
571
62920
585
63020
584
Qtr
1
2
3
4
Options
Options
Aggregate Strike Price
Intrinsic Value
Outstanding
Exercisable
Outstanding
Exercisable
Outstanding
Exercisable
Luna
2418245
1309606
$6482283
$2709686
7767068
4952824
2418245
1309606
6482283
2709686
7767068
4952824
Warrants Aaron Chase Aaron ChaseCarilion exercised all warrants in Q2 and Q3 2018
0
0
0
0
2418245
1309606
6482283
2709686
Average Strike Price
$ 268
$ 207
Pull Cancelled for whole year
Cancels
Q1
35659 Aaron Chase Aaron Chase22999 of canceled shares didnrsquot show up until Q2-20 report
Aaron Chase Aaron ChaseCarilion exercised all warrants in Q2 and Q3 2018
$ 364
12990180
Outstanding 12312019
3160397
Q2
13124
$ 211
2769912
Q3
- 0
ERRORDIV0
- 0
Grants
20000
Q4
- 0
ERRORDIV0
- 0
Exercised
(662965)
48783
$ 323
15760092
Canceled
(48783)
Corrected Termed EEs from 2019
(50404)
These were corrected in June 2020
2418245
Remaining life
Options
Avg Life
- 0
Outstanding
Luna
2418245
644
Exercisable
1309606
474
Remaining service
Luna
2418245
See awards outstanding by grant price range report and Disclosure report for information on this tab
Luna Innovations
Additional Notes
EPS Calculations
During Jan-2019 and 2020 Management was awarded Performance Based Grants and Time Based Grants
63020
The Performance Based Grants vest after 3 years and are issued only if the performance is achieved
The Time Based Grants vest each year for 3 years Grants are issued once vested each year
Yearly BOD Grants
Basic EPS
DSU deferred stock units vest in a year but do not become issued until the Director leaves the Board This started in 2018
Net Income (loss) Per Share from Continuing Operations
YTD
Diluted
QTD
Diluted
DSU awards vest in May 2021 and will be added to the middle section of the EPS in May 2021
Net Income from Continuing Operations
1688508
1368839
Rich Roedel
8877
704
62500
Common Shares Outstanding
30484797
30589249
Barry Phelps
5326
704
37500
$ 006
$ 005
$ 004
$ 004
Leigh Anderson
5326
704
37500
Mary Beth Vitale
5326
704
37500
Net income (loss) Per Share attributable to common shareholders
RSU restricted stock units vest and are issued in a year and will be added to the bottom of the EPS in May 2021
Net Income (Loss) available to Shareholders
252605
1368839
Don Pastor
5326
704
37500
Common Shares Outstanding
30484797
30589249
Gary Spiegel
5326
704
37500
$ 001
$ 001
$ 004
$ 004
Net income (loss) Per Share from Discontinued Operations
Net Income from Discontinued Operations
(1435903)
- 0
Common Shares Outstanding
30484797
30589249
$ (005)
$ (004)
$ - 0
$ - 0
Diluted EPS
Net Income(Loss) available to SHs
252605
1368839
Common Shares Outstanding
30484797
30589249
Common Stock Equivalent
2010153
1876873
$ 001
- 0 Grant Thornton LLP Grant Thornton LLPAs earnings from continuing operations are negative (loss) basic and diluted EPS equal one another
$ 004 Grant Thornton LLP Grant Thornton LLPAs earnings from continuing operations are negative (loss) basic and diluted EPS equal one another
- 0 Grant Thornton LLP Grant Thornton LLPAs earnings from continuing operations are negative (loss) basic and diluted EPS equal one another
Non-GAAP Diluted EPS
Net income (loss) Per Share attributable to common shareholders
Net Income (Loss) available to Shareholders
252605
1368839
Loss from discontinued operations
1435903
- 0
Share-based compensation
966932
465109
Amortization of acquired intangibles
344405
688810
Acquisition related costs
- 0
- 0
Amortization of Inventory Step-up
- 0
- 0
Common Shares Outstanding
30484797
30589249
Common Stock Equivalent
2010153
1876873
$ 009
$ 008
YTD
QTD
Total issued shares
32470276
Average Close Price
$ 696
$ 652
Total treasury
1672741
Shares Outstanding
30797535
Net change in denominator
1404924 Kelly Bewick Aaron Chasesee Dilution (stock option) dilutive tab
1264984
BOD fees paid in DSUs Aaron Chase Aaron ChaseFrom Equity Award Transactions Report
Month
Quarter
Year
Balance at 112019 - DSU outstanding
591457
591457
Jan
31
Issued during Q1 2020
7114
7114
Feb
29
Issued during Q2 2020
3947
7894
Mar
31
91
91
Annual grant DSU vested 5112020
10521 KBSResults KBSResultsEnter 2019 DSU annual grant when vest in 2020 (probably May) you do not need to enter annual RSU because it will be issued in AST
21042
Apr
30
Deferred Equity Issuance 6012020
(7809) KBSResults Aaron ChaseM Wise and J Williamson retired from the BoD in May 2020 Wise Deferred Comp will be issued every June 1 for 10 years Williamson Deferred Comp will be issued every June 1 for 5 years
Grant Thornton LLP Grant Thornton LLPAs earnings from continuing operations are negative (loss) basic and diluted EPS equal one another
Grant Thornton LLP Grant Thornton LLPAs earnings from continuing operations are negative (loss) basic and diluted EPS equal one another
(15619)
May
31
Issued during Q3 2020
- 0
- 0
Jun
30
91
182
Issued during Q4 2020
- 0
- 0
Jul
31
Aug
31
Sept
30
92
274
Oct
31
Totals (Antidilutive)
2010153
1876873
Nov
30
Dec
31
92
366
Shares Outstanding as of 112020
31788896
As Of Date
Transaction
Reason
Name
Shares Issued
Shares Retired
Running Total
01012020
Normal
Balance Roll Forward
- 0
- 0
31788896
01082020
Normal
Option Exercise
Williamson John
12000000
- 0
31908896
01082020
Normal
Retirement - Vested Restriced Stock
Exer Options
Williamson John
- 0
2000000
31888896
01102020
Normal
Option Exercise
Roedel Rich
6000000
- 0
31948896
01142020
Normal
2019 Time-Based RSU Vesting
Messick Dale
666700
- 0
31955563
01142020
Normal
2019 Time-Based RSU Vesting
Graeff Scott
3066700
- 0
31986230
01142020
Normal
2019 Time-Based RSU Vesting
Soller Brian
1066700
- 0
31996897
01142020
Normal
2019 Time-Based RSU Vesting
Garrett James
766700
- 0
32004564
01142020
Normal
2019 Time-Based RSU Retirement
Taxes
Graeff Scott
- 0
920000
31995364
01142020
Normal
2019 Time-Based RSU Retirement
Taxes
Soller Brian
- 0
320000
31992164
01142020
Normal
2019 Time-Based RSU Retirement
Taxes
Garrett James
- 0
230000
31989864
01142020
Normal
Option Exercise
Burris Kevin
100000
- 0
31990864
01292020
Normal
Option Exercise
Carr Dustin
3212300
- 0
32022987
01272020
Normal
Option Exercise
Chen James
334000
- 0
32026327
02192020
Normal
Option Exercise
McPherson Daniel
534800
- 0
32031675
03122020
Normal
Option Exercise
Haber Todd
2500000
- 0
32056675
03122020
Normal
Option Exercise
Graver Thomas
4558100
- 0
32102256
03122020
Normal
Option Exercise
Baez Michael
911200
- 0
32111368
03062020
Normal
Option Exercise
Farooqui Salvan
1500000
- 0
32126368
05122020
Normal
Option Exercise
Baez Michael
950000
- 0
32135868
05142020
Normal
Option Exercise
Haber Todd
4300000
- 0
32178868
05142020
Normal
Option Exercise
Graver Thomas
4746100
- 0
32226329
05112020
Normal
Annual Equity Grant Vesting-BoD
Pastor Don
580000
- 0
32232129
05112020
Normal
Annual Equity Grant Vesting-BoD
Williamson John
580000
- 0
32237929
06012020
Normal
Deferred Stock Issuance-BoD
Wise Mike
980900
- 0
32247738
06012020
Normal
Deferred Stock Issuance-BoD
Williamson John
3756800
32285306
06112020
Normal
Option Exercise
Wise Mike
24000000
32525306
06112020
Normal
Retirement - Vested Stock
Exer Options
Wise Mike
6153000
32463776
06082020
Normal
Option Exercise
Pruzan Michael
400000
32467776
06292020
Normal
Option Exercise
Farooqui Salvan
250000
32470276
Date Issued
Balance Outstanding
Number of Days
Weighted Avg
Treasury Shares Weighted Average
Year-to-Date
YTD
QTD
1120
31788896
182
31788896
Graeff July 2
115000
115000
1820
31908896
175
115385
Q2 2015
29925
29925
1820
31888896
175
(19231)
2014
22725
22725
11020
31948896
173
57033
2016 Mgmt buyback
73675
73675
11420
31955563
169
6191
2016 repurchase program
205500
205500
11420
31986230
169
28477
2017 Mgmt buyback
90900
90900
11420
31996897
169
9905
2017 BOD buyback
100000
100000
11420
32004564
169
7119
2017 repurchase program
433179
433179
11420
31995364
169
(8543)
2018 repurchase program
132450
132450
11420
31992164
169
(2971)
2018 Mgmt buyback
49751
49751
11420
31989864
169
(2136)
2019 Mgmt buyback
52733
52733
11420
31990864
169
929
2019 repurchase program
333953
333953
12920
32022987
154
27181
2020 Mgmt buyback
6337
12673
12720
32026327
156
2863
21920
32031675
133
3908
164612764
165246418
31220
32056675
111
15247
31220
32102256
111
27799
31220
32111368
111
5557
567659
3620
32126368
117
9643
Treasury on AST
567664
51220
32135868
50
2610
Diff
(5)
51420
32178868
48
11341
51420
32226329
48
12517
51120
32232129
51
1625
51120
32237929
51
1625
6120
32247738
30
1617
6120
32285306
30
6193
61120
32525306
20
26374
61120
32463776
20
(6762)
6820
32467776
23
505
62920
32470276
2
27
YTD Average Shares Outstanding
32130925
Quarter-to Date
112020
31788896
91
31788896
1820
31908896
91
120000
1820
31888896
91
(20000)
11020
31948896
91
60000
11420
31955563
91
6667
11420
31986230
91
30667
11420
31996897
91
10667
11420
32004564
91
7667
11420
31995364
91
(9200)
11420
31992164
91
(3200)
11420
31989864
91
(2300)
11420
31990864
91
1000
12920
32022987
91
32123
12720
32026327
91
3340
21920
32031675
91
5348
31220
32056675
91
25000
31220
32102256
91
45581
31220
32111368
91
9112
3620
32126368
91
15000
51220
32135868
50
5220
51420
32178868
48
22681
51420
32226329
48
25034
51120
32232129
51
3251
51120
32237929
51
3251
6120
32247738
30
3234
6120
32285306
30
12385
61120
32525306
20
52747
61120
32463776
20
(13523)
6820
32467776
23
1011
62920
32470276
2
55
QTD Average Shares Outstanding
32241713
C1
TA to the Summary tab
C2
TA to the Avg Stock Price tab
C3
TA to the Options Outstanding YTD tab
C4
TA to the Equity Rollforward WP
C5
TA to the AST Report in the Equity Rollfoward WP
C6
TA to the Options Outstanding QTD tab
C7
Custom 7
C8
See comment box
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
17
Luna Labs
Work with universities and government research labs to explore technological feasibility with a goal toward proof of concept
Collaborate with prime contractors government offices and federally-funded RampD centers
Work with contract manufacturers suppliers licensees and distributors to develop everything from small-scale prototypes up to and including market-ready products
Based in Charlottesville VA
2Q FY20 Results
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
19
Second-quarter 2020 Key Financial Results
Solid financial performance
$06M improvement in Adjusted EBITDA1 year-over-year
Total revenues of $186M up 4 year-over-year
Lightwave revenue of $129M up 3 year-over-year
Luna Labs revenue of $56M up 7 year-over-year
Operating income improved to $18M or 10 of total revenues in Q2 2020 from $10M or 6 of total revenues in Q2 2019 due to increased revenue and gross profit as well as improved operating expense leverage
Net income of $14M or $004 per fully diluted share for the three months ended June 30 2020 compared to $08M or $002 per fully diluted share for the three months ended June 30 2019
Adjusted EBITDA1 increased to $30M for the three months ended June 30 2020 compared to $24M for the three months ended June 30 2019
Reaffirmed 2020 outlook tighten range to $81 to $83M in total revenues
1Adj EBITDA is a non-GAAP measure Reconciliation of comparable GAAP measures to non-GAAP measures are included in the appendix to this presentation
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
20
Second-quarter 2020 and Other Recent Accomplishments
Reported solid second-quarter 2020 financial results in challenging COVID environment
Held 6 customer-facing technology educational webinars ~1000 live attendees and more than 1200 leads
Hosted worldwide virtual sales meeting with 47 attendees
Participated in virtual trade shows
Continued to monitor employee feedback with a focus on safety and well-being
Successful implementation of Employee Stock Purchase Plan with approximately 60 participation
Held successful Virtual Annual Shareholder Meeting in May
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
21
($20)
$03
$95
FY16 FY17 FY18 FY19 FY20
Adjusted EBITDA1 2
(millions)
$31
$296 $331
$429
$705
FY16 FY17 FY18 FY19 FY20
Revenue1
(millions)
$357
Strong Financial Results
1 Based on managementrsquos estimates of the impact from the divestiture of Optoelectronics Includes the acquisitions of Micron Optics and General Photonics2Adj EBITDA is a non-GAAP measure Reconciliation of comparable GAAP measures to non-GAAP measures are included in the appendix to this presentation
FY20 Guidance$810 - $830
FY20 Guidance $100 to $120
$45
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
22
A Flexible Balance Sheet and Strong Cash Position
Strong balance sheet on June 30 2020
$912M in total assets
bull $265M in cash and cash equivalents
bull $448M in working capital
Access to $10M revolving credit facility if needed
Continued focus on working capital and reinvestment in business in order to generate long-term sustainable growth
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
23
2020 Financial Outlook
Maintaining FY2020 outlook tightening our range
Total revenues of $81M to $83M
Adjusted EBITDA1 of $10M to $12M
1 Adj EBITDA is a non-GAAP measure Reconciliation of comparable GAAP measures to non-GAAP measures are included in the appendix to this presentation The outlook above does not include any future acquisitions divestitures or unanticipated events
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
24
Luna ndash Enabling the Future with Fiber
Proprietary measurement technology offering unprecedented combination of resolution accuracy and speed
Customers in attractive markets Military and Defense Communications Infrastructure Energy and Automotive
Positioned to take advantage of trends such as vehicle light-weighting and increasing demands on data centers and broadband capacity
Adequately capitalized to fund growth
Long-tenured experienced executive team board
Corporate culture of innovation and integrity
Overview
Appendix
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
26
Reconciliation of Net Income to Adjusted EBITDA
(1) Non-recurring charges consist of transaction-related expenses related to the acquisition of General Photonics
2020 2019 2020 2019
Reconciliation of EBITDA and Adjusted EBITDANet income 1369$ 841$ 253$ 1967$ Loss from discontinued operations net of income tax benefit of $464 - - 1436 -
Net income from continuing operations 1369 841 1689 1967 Interest expense 1 - 1 13 Investment income (4) (77) (64) (268) Income tax expense(benefit) 441 247 579 (1618) Depreciation and amortization 684 653 1363 1166
Reconciliation of Net Income to Adjusted EBITDA Full Year
(1) Non-recurring charges include the following 2017) CEO separation costs and other share-based compensation 2018) Transaction-related expenses associated with the acquisition of Micron Optics Inc 2019) Transaction related expenses and inventory step-up amortization relate to General Photonics acquisition and CFO transition expenses
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
28
New Segment Quarterly Results (in thousands)
March 31 2019 June 30 2019 Sep 30 2019 A Dec 31 2019 March 31 2020 June 30 2020
Total revenues 14833 17814 18389 19480 17141 18576
Cost of revenuesLightwave 4280 5334 5449 5070 4885 5181 Luna Labs 3785 3728 3665 4022 3892 3878
Total cost of revenues 8065 9062 9114 9092 8777 9059
Gross Profit 6768 8752 9275 10388 8364 9517
Operating expenseSelling general and administrative 6207 6003 5745 6416 6377 6202 Research development and engineering 1458 1735 2048 2255 1597 1505
Total operating expense 7665 7738 7793 8671 7974 7707
Operating income (897)$ 1014$ 1482$ 1717$ 390$ 1810$
A The Company revised its results for the three months ended September 30 2019 The Company has concluded these adjustments are not material individually or in the aggregate
Three Months Ended
Scott A Graeff President and CEO
Safe Harbor
Luna ndash Enabling the Future with Fiber
Luna is a global company
Luna has a clear vision and established history
Compelling business model with strong growth potential
Lightwave 2019 revenue1 snapshot
Luna Overview
Where Does Luna Play
Sensing
Sensing Short-range high-resolution
Sensing long-range high-speed
Sensing Material thickness
Comms Test
Comms Test Components
Comms Test Short-haul network
Luna Labs
2Q FY20 Results
Second-quarter 2020 Key Financial Results
Second-quarter 2020 and Other Recent Accomplishments
Slide Number 21
A Flexible Balance Sheet and Strong Cash Position
2020 Financial Outlook
Luna ndash Enabling the Future with Fiber
Appendix
Reconciliation of Net Income to Adjusted EBITDA
Reconciliation of Net Income to Adjusted EBITDA Full Year
New Segment Quarterly Results
(in thousands)
Three Months Ended
December 31 2018
A
March 31 2019
C
June 30 2019
September 30 2019
December 31 2019
March 31 2020
June 30 2020
Revenues
Lightwave
$ 11345
$ 10221
$ 12523
$ 13120
$ 13988
$ 11554
12933
Luna Labs
5548
6641
5291
5301
5492
5587
5642
Total revenues
16893
16862
17814
18421
19480
17141
18576
Cost of revenues
Lightwave
4002
3836
5334
5471
5070
4885
5181
Luna Labs
4268
4816
3728
3665
4022
3892
3878
Total cost of revenues
8270
8652
9062
9136
9092
8777
9059
Gross Profit
8623
8210
8752
9285
10388
8364
9517
Operating expense
Selling general and administrative
6394
7165
6003
5754
6415
6377
6202
Research development and engineering
1894
1708
1735
2047
2255
1597
1505
Total operating expense
8288
8873
7738
7801
8670
7974
7707
Operating income
$ 335
$ (663)
$ 1014
$ 1484
$ 1718
$ 390
$ 1810
Historical - Hidden
A
Includes $751000 of costs associated with the acquisition of Micron Optics
B
Unaudited pro forma financials assumes the General Photonics business was acquired on January 1 2019
C
Includes $898000 of costs associated with the acquisition of General Photonics
Year Ended December 31
(unaudited)
2016
2017
2018
2019
Reconciliation of EBITDA and Adjusted EBITDA
Net (loss)income
$ (2370)
$ 14615
$ 11004
$ 5343
Less income from discontinued operations net of income taxes
300
15866
9766
- 0
Loss from discontinued operations net of income tax benefit of $464
- 0
- 0
- 0
- 0
Net income from continuing operations
(2670)
(1251)
1238
5343
Interest expense
319
217
124
16
Investment income
- 0
- 0
(549)
(394)
Income tax (benefit)expense
(135)
(1148)
48
(1654)
Depreciation and amortization
1466
1137
908
2503
EBITDA
(1020)
(1045)
1769
5814
Share-based compensation
860
715
628
1544
Non-Recurring Charges (1)
- 0
596
751
1390
Amortization of Inventory Step-up
- 0
- 0
- 0
725
Adjusted EBITDA
$ (160)
$ 266
$ 3148
$ 9473
1
Non-recurring charges include the following 2017) CEO separation costs and other share-based compensation 2018) Transaction-related expenses associated with the acquisition of Micron Optics Inc 2019) Transaction related expenses and inventory step-up amortization relate to General Photonics acquisition and CFO transition expenses
Luna Innovations Incorporated
Reconciliation of Non-GAAP Financial Measures
(in thousands)
Three Months Ended
Six Months Ended
June 30
June 30
2020
2019
2020
2019
(Unaudited)
(Unaudited)
Reconciliation of EBITDA and Adjusted EBITDA
Net income
$ 1369
$ - 0
$ 841
$ 253
$ - 0
$ 1967
Loss from discontinued operations net of income tax benefit of $464
- 0
- 0
- 0
1436
- 0
- 0
Gain on sale of asset
- 0
- 0
- 0
- 0
- 0
- 0
Net income from continuing operations
1369
- 0
841
1689
- 0
1967
Interest expense
1
- 0
- 0
1
- 0
13
Investment income
(4)
- 0
(77)
(64)
- 0
(268)
Income tax expense(benefit)
441
- 0
247
579
- 0
(1618)
Depreciation and amortization
684
- 0
653
1363
- 0
1166
EBITDA
2490
- 0
1664
3568
- 0
1260
Share-based compensation
465
- 0
378
967
- 0
721
Non-Recurring Charges (1)
- 0
- 0
44
- 0
- 0
942
CFO Recruiting and Severance
- 0
- 0
- 0
- 0
- 0
- 0
Amortization of Inventory Step-up
- 0
- 0
310
- 0
- 0
412
- 0
- 0
- 0
- 0
- 0
- 0
Adjusted EBITDA
$ 2955
$ - 0
$ 2396
$ 4535
$ - 0
$ 3335
EBITDA Margin Percent on Total Revenues
134
93
100
39
Adjusted EBITDA Margin Percent on Total Revenues
159
134
127
102
Reconciliation of Non-GAAP EPS
Diluted EPS
$ 004
$ 002
$ 001
$ 005
Loss from discontinued operations net of income taxes
Existing Technology amortization missed from 101518-63019
- 0
15560
Amortization catch up from 101518-63019 in July 2019 only
In-process RampD
200000
0
- 0
1650000
4091764
Micron Purchase Amortization Detail - 812019 and forward
Trade Name
150000
36
4167
Customer Relationships
100000
84
1190
Existing Technology
1200000
60
20000
Amortization going forward
In-process RampD
200000
0
- 0
1650000
2535714
General Pho Purchase Amortization Detail - 312019
Trade Name
400000
36
11111
22822
Customer Relationships
600000
180
3333
22834
Existing Technology
7200000
96
75000
22827
In-process RampD
- 0
0
- 0
8200000
8944444
General Pho Inventory Step-up Amortization - 312019
WIP amp Fin Goods
724760
7
103537
Ends 93019
PampL Summary - Luna Innovations
For the Three Months Ending March 31 2020
QTD
QTD
QTD
YTD
YTD
YTD
Actual
Budget
Variance
Actual
Budget
Variance
fav(un-fav)
fav(un-fav)
Revenues
Lightwave
12933344
13366455
(433536)
24487335
25564000
(1077090)
686
Luna Labs
5642348
6075202
(432854)
11229350
11675307
(445957)
314
Total Revenues
18575692
19441657
(866390)
35716685
37239307
(1523047)
Cost of Revenues
Product and Licensing
5181057
5789978
608921
10066386
11082697
1016311
282
TDD
3877888
4448571
570683
7769627
8526736
757109
218
Total Cost of Revenues
9058945
10238549
570683
17836013
19609433
1773420
499
Gross Margin
Product and Licensing - $
7752287
7576477
175810
14420949
14481303
(60354)
Product and Licensing -
60
57
3
59
57
2
TDD - $
1764460
1626631
137829
3459723
3148571
311152
TDD -
31
27
4
31
27
4
Total Gross Margin
9516747
9203108
313639
17880672
17629874
250798
Gross Margin
51
47
4
50
47
3
501
Operating Expenses
Selling General amp Admin
6202338
8155800
1953888
12578977
14477853
1899301
Research Devel amp Engineering
1504800
647122
(857678)
3101865
2798808
(303057)
Total Operating Expenses
7707138
8802922
1096209
15680842
17276661
1595819
439
Operating Income (Loss)
1809609
400186
1409423
2199830
353213
1846617
62
Other Expense (Income)
Interest
930
985
55
1145
2195
1050
00
Investment Income
(4435)
(75000)
(70565)
(63790)
(150000)
(86210)
-02
Tax Expense
440626
118551
(498831)
579203
125253
(630706)
16
Tax Benefit from release of VA
-
-
-
-
-
-
00
Gainloss on foreigh exch
-
-
-
-
-
-
00
Other
3649
-
(3649)
(5236)
-
5236
-00
440770
44536
(396234)
511322
(22552)
(533874)
14
Income from continuing operations
1368839
355650
1805658
1688508
375765
2380491
Income from Disc Ops
Operating Income from Disc Ops
-
-
- 0
-
-
- 0
Gainloss of Asset Sale
-
-
- 0
(1435903)
-
(1435903)
Total Income from Disc Ops
- 0
- 0
- 0
(1435903)
- 0
(1435903)
Net Income (Loss)
1368839
355650
1013189
252605
375765
(123160)
07
Dividend on Preferred
- 0
- 0
- 0
- 0
- 0
- 0
Net Income (Loss) available to Common Shareholders
1368839
355650
1013189
252605
375765
(123160)
07
Depreciation
244214
491046
From Cash Flow
Amortization
439787
872410
From Cash Flow
Stock Compensation
465109
966932
From Cash Flow
Acquisition Costs
- 0
- 0
Amortization of Inventory Step-up
- 0
- 0
CFO Recruiting amp Severance
- 0
- 0
Treasury Stock Activity
63020
Stock Buyback - Held with Northland
Trade date
Settlement Date
of Shares
Avg Price
Commission
Trade date Total $
Number of Days
Weighted Avg
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
= Trades Not Settled
$000
$000
$000
$000
YTD Avg
0
0
Trade date
Settlement Date
of Shares
Avg Price
Commission
Trade date Total $
Number of Days
Weighted Avg
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
QTD Avg
0
0
0
0
2016 Amounts under program
205500
$24880840
$25086340
2017 Amounts under program
433179
$75649353
$76082532
2018 Amounts under program
132450
$30604099
$30736549
2019 Amounts under program
333953
$198663889
$199999701
Total
110508200
329798181
331905122
For Q Disclosure
Management Buyback - Held with AST
Date
Shares
YTD days os
YTD weighted avg
QTD days os
QTD Weighted Avg
Month
Quarter
Year
52720
Garrett James
6500
35
1250
35
2500
Jan
31
- 0
- 0
52720
Graeff Scott
17450
35
3356
35
6712
Feb
29
- 0
- 0
52720
Soller Brian
9000
35
1731
35
3462
Mar
31
91
91
44013
- 0
91
- 0
Apr
30
- 0
- 0
44013
- 0
91
- 0
May
31
- 0
- 0
44013
- 0
91
- 0
Jun
30
91
182
44013
- 0
91
- 0
Jul
31
- 0
- 0
44013
- 0
91
- 0
Aug
31
- 0
- 0
44013
- 0
91
- 0
Sept
30
92
274
- 0
- 0
Oct
31
- 0
- 0
- 0
- 0
Nov
30
- 0
- 0
- 0
- 0
Dec
31
92
366
32950
6337
12673
BOD buyback
YTD
$000
$000
44013
- 0
Qtr
$000
$000
44013
- 0
Luna
Date
CloseLast
1220
738
Average Close Price
1320
718
Year-To-Date
$ 696
1620
73
Quarter-To-Date
$ 652
1720
735
1820
756
1920
777
11020
787
11320
803
11420
804
11520
832
11620
85
11720
845
12120
827
12220
833
12320
849
12420
844
12720
828
12820
856
12920
85
13020
846
13120
819
2320
825
2420
821
2520
82
2620
819
2720
837
21020
85
21120
858
21220
904
21320
895
21420
897
21820
891
21920
891
22020
907
22120
923
22420
861
22520
745
22620
759
22720
707
22820
67
3220
713
3320
693
3420
719
3520
689
3620
75
3920
672
31020
66
31120
599
31220
521
31320
522
31620
491
31720
553
31820
473
31920
487
32020
48
32320
509
32420
543
32520
582
32620
617
32720
583
33020
623
33120
615
4120
585
4220
583
4320
572
4620
607
4720
605
4820
631
4920
665
41320
656
41420
683
41520
711
41620
734
41720
727
42020
73
42120
672
42220
683
42320
691
42420
715
42720
721
42820
74
42920
777
43020
763
5120
724
5420
751
5520
762
5620
76
5720
749
5820
782
51120
704
51220
705
51320
62
51420
578
51520
537
51820
591
51920
625
52020
61
52120
6
52220
609
52620
615
52720
62
52820
609
52920
61
6120
629
6220
628
6320
653
6420
649
6520
663
6820
667
6920
635
61020
643
61120
583
61220
606
61520
625
61620
631
61720
615
61820
599
61920
601
62220
616
62320
624
62420
615
62520
615
62620
571
62920
585
63020
584
Qtr
1
2
3
4
Options
Options
Aggregate Strike Price
Intrinsic Value
Outstanding
Exercisable
Outstanding
Exercisable
Outstanding
Exercisable
Luna
2418245
1309606
$6482283
$2709686
7767068
4952824
2418245
1309606
6482283
2709686
7767068
4952824
Warrants Aaron Chase Aaron ChaseCarilion exercised all warrants in Q2 and Q3 2018
0
0
0
0
2418245
1309606
6482283
2709686
Average Strike Price
$ 268
$ 207
Pull Cancelled for whole year
Cancels
Q1
35659 Aaron Chase Aaron Chase22999 of canceled shares didnrsquot show up until Q2-20 report
Aaron Chase Aaron ChaseCarilion exercised all warrants in Q2 and Q3 2018
$ 364
12990180
Outstanding 12312019
3160397
Q2
13124
$ 211
2769912
Q3
- 0
ERRORDIV0
- 0
Grants
20000
Q4
- 0
ERRORDIV0
- 0
Exercised
(662965)
48783
$ 323
15760092
Canceled
(48783)
Corrected Termed EEs from 2019
(50404)
These were corrected in June 2020
2418245
Remaining life
Options
Avg Life
- 0
Outstanding
Luna
2418245
644
Exercisable
1309606
474
Remaining service
Luna
2418245
See awards outstanding by grant price range report and Disclosure report for information on this tab
Luna Innovations
Additional Notes
EPS Calculations
During Jan-2019 and 2020 Management was awarded Performance Based Grants and Time Based Grants
63020
The Performance Based Grants vest after 3 years and are issued only if the performance is achieved
The Time Based Grants vest each year for 3 years Grants are issued once vested each year
Yearly BOD Grants
Basic EPS
DSU deferred stock units vest in a year but do not become issued until the Director leaves the Board This started in 2018
Net Income (loss) Per Share from Continuing Operations
YTD
Diluted
QTD
Diluted
DSU awards vest in May 2021 and will be added to the middle section of the EPS in May 2021
Net Income from Continuing Operations
1688508
1368839
Rich Roedel
8877
704
62500
Common Shares Outstanding
30484797
30589249
Barry Phelps
5326
704
37500
$ 006
$ 005
$ 004
$ 004
Leigh Anderson
5326
704
37500
Mary Beth Vitale
5326
704
37500
Net income (loss) Per Share attributable to common shareholders
RSU restricted stock units vest and are issued in a year and will be added to the bottom of the EPS in May 2021
Net Income (Loss) available to Shareholders
252605
1368839
Don Pastor
5326
704
37500
Common Shares Outstanding
30484797
30589249
Gary Spiegel
5326
704
37500
$ 001
$ 001
$ 004
$ 004
Net income (loss) Per Share from Discontinued Operations
Net Income from Discontinued Operations
(1435903)
- 0
Common Shares Outstanding
30484797
30589249
$ (005)
$ (004)
$ - 0
$ - 0
Diluted EPS
Net Income(Loss) available to SHs
252605
1368839
Common Shares Outstanding
30484797
30589249
Common Stock Equivalent
2010153
1876873
$ 001
- 0 Grant Thornton LLP Grant Thornton LLPAs earnings from continuing operations are negative (loss) basic and diluted EPS equal one another
$ 004 Grant Thornton LLP Grant Thornton LLPAs earnings from continuing operations are negative (loss) basic and diluted EPS equal one another
- 0 Grant Thornton LLP Grant Thornton LLPAs earnings from continuing operations are negative (loss) basic and diluted EPS equal one another
Non-GAAP Diluted EPS
Net income (loss) Per Share attributable to common shareholders
Net Income (Loss) available to Shareholders
252605
1368839
Loss from discontinued operations
1435903
- 0
Share-based compensation
966932
465109
Amortization of acquired intangibles
344405
688810
Acquisition related costs
- 0
- 0
Amortization of Inventory Step-up
- 0
- 0
Common Shares Outstanding
30484797
30589249
Common Stock Equivalent
2010153
1876873
$ 009
$ 008
YTD
QTD
Total issued shares
32470276
Average Close Price
$ 696
$ 652
Total treasury
1672741
Shares Outstanding
30797535
Net change in denominator
1404924 Kelly Bewick Aaron Chasesee Dilution (stock option) dilutive tab
1264984
BOD fees paid in DSUs Aaron Chase Aaron ChaseFrom Equity Award Transactions Report
Month
Quarter
Year
Balance at 112019 - DSU outstanding
591457
591457
Jan
31
Issued during Q1 2020
7114
7114
Feb
29
Issued during Q2 2020
3947
7894
Mar
31
91
91
Annual grant DSU vested 5112020
10521 KBSResults KBSResultsEnter 2019 DSU annual grant when vest in 2020 (probably May) you do not need to enter annual RSU because it will be issued in AST
21042
Apr
30
Deferred Equity Issuance 6012020
(7809) KBSResults Aaron ChaseM Wise and J Williamson retired from the BoD in May 2020 Wise Deferred Comp will be issued every June 1 for 10 years Williamson Deferred Comp will be issued every June 1 for 5 years
Grant Thornton LLP Grant Thornton LLPAs earnings from continuing operations are negative (loss) basic and diluted EPS equal one another
Grant Thornton LLP Grant Thornton LLPAs earnings from continuing operations are negative (loss) basic and diluted EPS equal one another
(15619)
May
31
Issued during Q3 2020
- 0
- 0
Jun
30
91
182
Issued during Q4 2020
- 0
- 0
Jul
31
Aug
31
Sept
30
92
274
Oct
31
Totals (Antidilutive)
2010153
1876873
Nov
30
Dec
31
92
366
Shares Outstanding as of 112020
31788896
As Of Date
Transaction
Reason
Name
Shares Issued
Shares Retired
Running Total
01012020
Normal
Balance Roll Forward
- 0
- 0
31788896
01082020
Normal
Option Exercise
Williamson John
12000000
- 0
31908896
01082020
Normal
Retirement - Vested Restriced Stock
Exer Options
Williamson John
- 0
2000000
31888896
01102020
Normal
Option Exercise
Roedel Rich
6000000
- 0
31948896
01142020
Normal
2019 Time-Based RSU Vesting
Messick Dale
666700
- 0
31955563
01142020
Normal
2019 Time-Based RSU Vesting
Graeff Scott
3066700
- 0
31986230
01142020
Normal
2019 Time-Based RSU Vesting
Soller Brian
1066700
- 0
31996897
01142020
Normal
2019 Time-Based RSU Vesting
Garrett James
766700
- 0
32004564
01142020
Normal
2019 Time-Based RSU Retirement
Taxes
Graeff Scott
- 0
920000
31995364
01142020
Normal
2019 Time-Based RSU Retirement
Taxes
Soller Brian
- 0
320000
31992164
01142020
Normal
2019 Time-Based RSU Retirement
Taxes
Garrett James
- 0
230000
31989864
01142020
Normal
Option Exercise
Burris Kevin
100000
- 0
31990864
01292020
Normal
Option Exercise
Carr Dustin
3212300
- 0
32022987
01272020
Normal
Option Exercise
Chen James
334000
- 0
32026327
02192020
Normal
Option Exercise
McPherson Daniel
534800
- 0
32031675
03122020
Normal
Option Exercise
Haber Todd
2500000
- 0
32056675
03122020
Normal
Option Exercise
Graver Thomas
4558100
- 0
32102256
03122020
Normal
Option Exercise
Baez Michael
911200
- 0
32111368
03062020
Normal
Option Exercise
Farooqui Salvan
1500000
- 0
32126368
05122020
Normal
Option Exercise
Baez Michael
950000
- 0
32135868
05142020
Normal
Option Exercise
Haber Todd
4300000
- 0
32178868
05142020
Normal
Option Exercise
Graver Thomas
4746100
- 0
32226329
05112020
Normal
Annual Equity Grant Vesting-BoD
Pastor Don
580000
- 0
32232129
05112020
Normal
Annual Equity Grant Vesting-BoD
Williamson John
580000
- 0
32237929
06012020
Normal
Deferred Stock Issuance-BoD
Wise Mike
980900
- 0
32247738
06012020
Normal
Deferred Stock Issuance-BoD
Williamson John
3756800
32285306
06112020
Normal
Option Exercise
Wise Mike
24000000
32525306
06112020
Normal
Retirement - Vested Stock
Exer Options
Wise Mike
6153000
32463776
06082020
Normal
Option Exercise
Pruzan Michael
400000
32467776
06292020
Normal
Option Exercise
Farooqui Salvan
250000
32470276
Date Issued
Balance Outstanding
Number of Days
Weighted Avg
Treasury Shares Weighted Average
Year-to-Date
YTD
QTD
1120
31788896
182
31788896
Graeff July 2
115000
115000
1820
31908896
175
115385
Q2 2015
29925
29925
1820
31888896
175
(19231)
2014
22725
22725
11020
31948896
173
57033
2016 Mgmt buyback
73675
73675
11420
31955563
169
6191
2016 repurchase program
205500
205500
11420
31986230
169
28477
2017 Mgmt buyback
90900
90900
11420
31996897
169
9905
2017 BOD buyback
100000
100000
11420
32004564
169
7119
2017 repurchase program
433179
433179
11420
31995364
169
(8543)
2018 repurchase program
132450
132450
11420
31992164
169
(2971)
2018 Mgmt buyback
49751
49751
11420
31989864
169
(2136)
2019 Mgmt buyback
52733
52733
11420
31990864
169
929
2019 repurchase program
333953
333953
12920
32022987
154
27181
2020 Mgmt buyback
6337
12673
12720
32026327
156
2863
21920
32031675
133
3908
164612764
165246418
31220
32056675
111
15247
31220
32102256
111
27799
31220
32111368
111
5557
567659
3620
32126368
117
9643
Treasury on AST
567664
51220
32135868
50
2610
Diff
(5)
51420
32178868
48
11341
51420
32226329
48
12517
51120
32232129
51
1625
51120
32237929
51
1625
6120
32247738
30
1617
6120
32285306
30
6193
61120
32525306
20
26374
61120
32463776
20
(6762)
6820
32467776
23
505
62920
32470276
2
27
YTD Average Shares Outstanding
32130925
Quarter-to Date
112020
31788896
91
31788896
1820
31908896
91
120000
1820
31888896
91
(20000)
11020
31948896
91
60000
11420
31955563
91
6667
11420
31986230
91
30667
11420
31996897
91
10667
11420
32004564
91
7667
11420
31995364
91
(9200)
11420
31992164
91
(3200)
11420
31989864
91
(2300)
11420
31990864
91
1000
12920
32022987
91
32123
12720
32026327
91
3340
21920
32031675
91
5348
31220
32056675
91
25000
31220
32102256
91
45581
31220
32111368
91
9112
3620
32126368
91
15000
51220
32135868
50
5220
51420
32178868
48
22681
51420
32226329
48
25034
51120
32232129
51
3251
51120
32237929
51
3251
6120
32247738
30
3234
6120
32285306
30
12385
61120
32525306
20
52747
61120
32463776
20
(13523)
6820
32467776
23
1011
62920
32470276
2
55
QTD Average Shares Outstanding
32241713
C1
TA to the Summary tab
C2
TA to the Avg Stock Price tab
C3
TA to the Options Outstanding YTD tab
C4
TA to the Equity Rollforward WP
C5
TA to the AST Report in the Equity Rollfoward WP
C6
TA to the Options Outstanding QTD tab
C7
Custom 7
C8
See comment box
2Q FY20 Results
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
19
Second-quarter 2020 Key Financial Results
Solid financial performance
$06M improvement in Adjusted EBITDA1 year-over-year
Total revenues of $186M up 4 year-over-year
Lightwave revenue of $129M up 3 year-over-year
Luna Labs revenue of $56M up 7 year-over-year
Operating income improved to $18M or 10 of total revenues in Q2 2020 from $10M or 6 of total revenues in Q2 2019 due to increased revenue and gross profit as well as improved operating expense leverage
Net income of $14M or $004 per fully diluted share for the three months ended June 30 2020 compared to $08M or $002 per fully diluted share for the three months ended June 30 2019
Adjusted EBITDA1 increased to $30M for the three months ended June 30 2020 compared to $24M for the three months ended June 30 2019
Reaffirmed 2020 outlook tighten range to $81 to $83M in total revenues
1Adj EBITDA is a non-GAAP measure Reconciliation of comparable GAAP measures to non-GAAP measures are included in the appendix to this presentation
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
20
Second-quarter 2020 and Other Recent Accomplishments
Reported solid second-quarter 2020 financial results in challenging COVID environment
Held 6 customer-facing technology educational webinars ~1000 live attendees and more than 1200 leads
Hosted worldwide virtual sales meeting with 47 attendees
Participated in virtual trade shows
Continued to monitor employee feedback with a focus on safety and well-being
Successful implementation of Employee Stock Purchase Plan with approximately 60 participation
Held successful Virtual Annual Shareholder Meeting in May
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
21
($20)
$03
$95
FY16 FY17 FY18 FY19 FY20
Adjusted EBITDA1 2
(millions)
$31
$296 $331
$429
$705
FY16 FY17 FY18 FY19 FY20
Revenue1
(millions)
$357
Strong Financial Results
1 Based on managementrsquos estimates of the impact from the divestiture of Optoelectronics Includes the acquisitions of Micron Optics and General Photonics2Adj EBITDA is a non-GAAP measure Reconciliation of comparable GAAP measures to non-GAAP measures are included in the appendix to this presentation
FY20 Guidance$810 - $830
FY20 Guidance $100 to $120
$45
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
22
A Flexible Balance Sheet and Strong Cash Position
Strong balance sheet on June 30 2020
$912M in total assets
bull $265M in cash and cash equivalents
bull $448M in working capital
Access to $10M revolving credit facility if needed
Continued focus on working capital and reinvestment in business in order to generate long-term sustainable growth
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
23
2020 Financial Outlook
Maintaining FY2020 outlook tightening our range
Total revenues of $81M to $83M
Adjusted EBITDA1 of $10M to $12M
1 Adj EBITDA is a non-GAAP measure Reconciliation of comparable GAAP measures to non-GAAP measures are included in the appendix to this presentation The outlook above does not include any future acquisitions divestitures or unanticipated events
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
24
Luna ndash Enabling the Future with Fiber
Proprietary measurement technology offering unprecedented combination of resolution accuracy and speed
Customers in attractive markets Military and Defense Communications Infrastructure Energy and Automotive
Positioned to take advantage of trends such as vehicle light-weighting and increasing demands on data centers and broadband capacity
Adequately capitalized to fund growth
Long-tenured experienced executive team board
Corporate culture of innovation and integrity
Overview
Appendix
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
26
Reconciliation of Net Income to Adjusted EBITDA
(1) Non-recurring charges consist of transaction-related expenses related to the acquisition of General Photonics
2020 2019 2020 2019
Reconciliation of EBITDA and Adjusted EBITDANet income 1369$ 841$ 253$ 1967$ Loss from discontinued operations net of income tax benefit of $464 - - 1436 -
Net income from continuing operations 1369 841 1689 1967 Interest expense 1 - 1 13 Investment income (4) (77) (64) (268) Income tax expense(benefit) 441 247 579 (1618) Depreciation and amortization 684 653 1363 1166
Reconciliation of Net Income to Adjusted EBITDA Full Year
(1) Non-recurring charges include the following 2017) CEO separation costs and other share-based compensation 2018) Transaction-related expenses associated with the acquisition of Micron Optics Inc 2019) Transaction related expenses and inventory step-up amortization relate to General Photonics acquisition and CFO transition expenses
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
28
New Segment Quarterly Results (in thousands)
March 31 2019 June 30 2019 Sep 30 2019 A Dec 31 2019 March 31 2020 June 30 2020
Total revenues 14833 17814 18389 19480 17141 18576
Cost of revenuesLightwave 4280 5334 5449 5070 4885 5181 Luna Labs 3785 3728 3665 4022 3892 3878
Total cost of revenues 8065 9062 9114 9092 8777 9059
Gross Profit 6768 8752 9275 10388 8364 9517
Operating expenseSelling general and administrative 6207 6003 5745 6416 6377 6202 Research development and engineering 1458 1735 2048 2255 1597 1505
Total operating expense 7665 7738 7793 8671 7974 7707
Operating income (897)$ 1014$ 1482$ 1717$ 390$ 1810$
A The Company revised its results for the three months ended September 30 2019 The Company has concluded these adjustments are not material individually or in the aggregate
Three Months Ended
Scott A Graeff President and CEO
Safe Harbor
Luna ndash Enabling the Future with Fiber
Luna is a global company
Luna has a clear vision and established history
Compelling business model with strong growth potential
Lightwave 2019 revenue1 snapshot
Luna Overview
Where Does Luna Play
Sensing
Sensing Short-range high-resolution
Sensing long-range high-speed
Sensing Material thickness
Comms Test
Comms Test Components
Comms Test Short-haul network
Luna Labs
2Q FY20 Results
Second-quarter 2020 Key Financial Results
Second-quarter 2020 and Other Recent Accomplishments
Slide Number 21
A Flexible Balance Sheet and Strong Cash Position
2020 Financial Outlook
Luna ndash Enabling the Future with Fiber
Appendix
Reconciliation of Net Income to Adjusted EBITDA
Reconciliation of Net Income to Adjusted EBITDA Full Year
New Segment Quarterly Results
(in thousands)
Three Months Ended
December 31 2018
A
March 31 2019
C
June 30 2019
September 30 2019
December 31 2019
March 31 2020
June 30 2020
Revenues
Lightwave
$ 11345
$ 10221
$ 12523
$ 13120
$ 13988
$ 11554
12933
Luna Labs
5548
6641
5291
5301
5492
5587
5642
Total revenues
16893
16862
17814
18421
19480
17141
18576
Cost of revenues
Lightwave
4002
3836
5334
5471
5070
4885
5181
Luna Labs
4268
4816
3728
3665
4022
3892
3878
Total cost of revenues
8270
8652
9062
9136
9092
8777
9059
Gross Profit
8623
8210
8752
9285
10388
8364
9517
Operating expense
Selling general and administrative
6394
7165
6003
5754
6415
6377
6202
Research development and engineering
1894
1708
1735
2047
2255
1597
1505
Total operating expense
8288
8873
7738
7801
8670
7974
7707
Operating income
$ 335
$ (663)
$ 1014
$ 1484
$ 1718
$ 390
$ 1810
Historical - Hidden
A
Includes $751000 of costs associated with the acquisition of Micron Optics
B
Unaudited pro forma financials assumes the General Photonics business was acquired on January 1 2019
C
Includes $898000 of costs associated with the acquisition of General Photonics
Year Ended December 31
(unaudited)
2016
2017
2018
2019
Reconciliation of EBITDA and Adjusted EBITDA
Net (loss)income
$ (2370)
$ 14615
$ 11004
$ 5343
Less income from discontinued operations net of income taxes
300
15866
9766
- 0
Loss from discontinued operations net of income tax benefit of $464
- 0
- 0
- 0
- 0
Net income from continuing operations
(2670)
(1251)
1238
5343
Interest expense
319
217
124
16
Investment income
- 0
- 0
(549)
(394)
Income tax (benefit)expense
(135)
(1148)
48
(1654)
Depreciation and amortization
1466
1137
908
2503
EBITDA
(1020)
(1045)
1769
5814
Share-based compensation
860
715
628
1544
Non-Recurring Charges (1)
- 0
596
751
1390
Amortization of Inventory Step-up
- 0
- 0
- 0
725
Adjusted EBITDA
$ (160)
$ 266
$ 3148
$ 9473
1
Non-recurring charges include the following 2017) CEO separation costs and other share-based compensation 2018) Transaction-related expenses associated with the acquisition of Micron Optics Inc 2019) Transaction related expenses and inventory step-up amortization relate to General Photonics acquisition and CFO transition expenses
Luna Innovations Incorporated
Reconciliation of Non-GAAP Financial Measures
(in thousands)
Three Months Ended
Six Months Ended
June 30
June 30
2020
2019
2020
2019
(Unaudited)
(Unaudited)
Reconciliation of EBITDA and Adjusted EBITDA
Net income
$ 1369
$ - 0
$ 841
$ 253
$ - 0
$ 1967
Loss from discontinued operations net of income tax benefit of $464
- 0
- 0
- 0
1436
- 0
- 0
Gain on sale of asset
- 0
- 0
- 0
- 0
- 0
- 0
Net income from continuing operations
1369
- 0
841
1689
- 0
1967
Interest expense
1
- 0
- 0
1
- 0
13
Investment income
(4)
- 0
(77)
(64)
- 0
(268)
Income tax expense(benefit)
441
- 0
247
579
- 0
(1618)
Depreciation and amortization
684
- 0
653
1363
- 0
1166
EBITDA
2490
- 0
1664
3568
- 0
1260
Share-based compensation
465
- 0
378
967
- 0
721
Non-Recurring Charges (1)
- 0
- 0
44
- 0
- 0
942
CFO Recruiting and Severance
- 0
- 0
- 0
- 0
- 0
- 0
Amortization of Inventory Step-up
- 0
- 0
310
- 0
- 0
412
- 0
- 0
- 0
- 0
- 0
- 0
Adjusted EBITDA
$ 2955
$ - 0
$ 2396
$ 4535
$ - 0
$ 3335
EBITDA Margin Percent on Total Revenues
134
93
100
39
Adjusted EBITDA Margin Percent on Total Revenues
159
134
127
102
Reconciliation of Non-GAAP EPS
Diluted EPS
$ 004
$ 002
$ 001
$ 005
Loss from discontinued operations net of income taxes
Existing Technology amortization missed from 101518-63019
- 0
15560
Amortization catch up from 101518-63019 in July 2019 only
In-process RampD
200000
0
- 0
1650000
4091764
Micron Purchase Amortization Detail - 812019 and forward
Trade Name
150000
36
4167
Customer Relationships
100000
84
1190
Existing Technology
1200000
60
20000
Amortization going forward
In-process RampD
200000
0
- 0
1650000
2535714
General Pho Purchase Amortization Detail - 312019
Trade Name
400000
36
11111
22822
Customer Relationships
600000
180
3333
22834
Existing Technology
7200000
96
75000
22827
In-process RampD
- 0
0
- 0
8200000
8944444
General Pho Inventory Step-up Amortization - 312019
WIP amp Fin Goods
724760
7
103537
Ends 93019
PampL Summary - Luna Innovations
For the Three Months Ending March 31 2020
QTD
QTD
QTD
YTD
YTD
YTD
Actual
Budget
Variance
Actual
Budget
Variance
fav(un-fav)
fav(un-fav)
Revenues
Lightwave
12933344
13366455
(433536)
24487335
25564000
(1077090)
686
Luna Labs
5642348
6075202
(432854)
11229350
11675307
(445957)
314
Total Revenues
18575692
19441657
(866390)
35716685
37239307
(1523047)
Cost of Revenues
Product and Licensing
5181057
5789978
608921
10066386
11082697
1016311
282
TDD
3877888
4448571
570683
7769627
8526736
757109
218
Total Cost of Revenues
9058945
10238549
570683
17836013
19609433
1773420
499
Gross Margin
Product and Licensing - $
7752287
7576477
175810
14420949
14481303
(60354)
Product and Licensing -
60
57
3
59
57
2
TDD - $
1764460
1626631
137829
3459723
3148571
311152
TDD -
31
27
4
31
27
4
Total Gross Margin
9516747
9203108
313639
17880672
17629874
250798
Gross Margin
51
47
4
50
47
3
501
Operating Expenses
Selling General amp Admin
6202338
8155800
1953888
12578977
14477853
1899301
Research Devel amp Engineering
1504800
647122
(857678)
3101865
2798808
(303057)
Total Operating Expenses
7707138
8802922
1096209
15680842
17276661
1595819
439
Operating Income (Loss)
1809609
400186
1409423
2199830
353213
1846617
62
Other Expense (Income)
Interest
930
985
55
1145
2195
1050
00
Investment Income
(4435)
(75000)
(70565)
(63790)
(150000)
(86210)
-02
Tax Expense
440626
118551
(498831)
579203
125253
(630706)
16
Tax Benefit from release of VA
-
-
-
-
-
-
00
Gainloss on foreigh exch
-
-
-
-
-
-
00
Other
3649
-
(3649)
(5236)
-
5236
-00
440770
44536
(396234)
511322
(22552)
(533874)
14
Income from continuing operations
1368839
355650
1805658
1688508
375765
2380491
Income from Disc Ops
Operating Income from Disc Ops
-
-
- 0
-
-
- 0
Gainloss of Asset Sale
-
-
- 0
(1435903)
-
(1435903)
Total Income from Disc Ops
- 0
- 0
- 0
(1435903)
- 0
(1435903)
Net Income (Loss)
1368839
355650
1013189
252605
375765
(123160)
07
Dividend on Preferred
- 0
- 0
- 0
- 0
- 0
- 0
Net Income (Loss) available to Common Shareholders
1368839
355650
1013189
252605
375765
(123160)
07
Depreciation
244214
491046
From Cash Flow
Amortization
439787
872410
From Cash Flow
Stock Compensation
465109
966932
From Cash Flow
Acquisition Costs
- 0
- 0
Amortization of Inventory Step-up
- 0
- 0
CFO Recruiting amp Severance
- 0
- 0
Treasury Stock Activity
63020
Stock Buyback - Held with Northland
Trade date
Settlement Date
of Shares
Avg Price
Commission
Trade date Total $
Number of Days
Weighted Avg
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
= Trades Not Settled
$000
$000
$000
$000
YTD Avg
0
0
Trade date
Settlement Date
of Shares
Avg Price
Commission
Trade date Total $
Number of Days
Weighted Avg
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
QTD Avg
0
0
0
0
2016 Amounts under program
205500
$24880840
$25086340
2017 Amounts under program
433179
$75649353
$76082532
2018 Amounts under program
132450
$30604099
$30736549
2019 Amounts under program
333953
$198663889
$199999701
Total
110508200
329798181
331905122
For Q Disclosure
Management Buyback - Held with AST
Date
Shares
YTD days os
YTD weighted avg
QTD days os
QTD Weighted Avg
Month
Quarter
Year
52720
Garrett James
6500
35
1250
35
2500
Jan
31
- 0
- 0
52720
Graeff Scott
17450
35
3356
35
6712
Feb
29
- 0
- 0
52720
Soller Brian
9000
35
1731
35
3462
Mar
31
91
91
44013
- 0
91
- 0
Apr
30
- 0
- 0
44013
- 0
91
- 0
May
31
- 0
- 0
44013
- 0
91
- 0
Jun
30
91
182
44013
- 0
91
- 0
Jul
31
- 0
- 0
44013
- 0
91
- 0
Aug
31
- 0
- 0
44013
- 0
91
- 0
Sept
30
92
274
- 0
- 0
Oct
31
- 0
- 0
- 0
- 0
Nov
30
- 0
- 0
- 0
- 0
Dec
31
92
366
32950
6337
12673
BOD buyback
YTD
$000
$000
44013
- 0
Qtr
$000
$000
44013
- 0
Luna
Date
CloseLast
1220
738
Average Close Price
1320
718
Year-To-Date
$ 696
1620
73
Quarter-To-Date
$ 652
1720
735
1820
756
1920
777
11020
787
11320
803
11420
804
11520
832
11620
85
11720
845
12120
827
12220
833
12320
849
12420
844
12720
828
12820
856
12920
85
13020
846
13120
819
2320
825
2420
821
2520
82
2620
819
2720
837
21020
85
21120
858
21220
904
21320
895
21420
897
21820
891
21920
891
22020
907
22120
923
22420
861
22520
745
22620
759
22720
707
22820
67
3220
713
3320
693
3420
719
3520
689
3620
75
3920
672
31020
66
31120
599
31220
521
31320
522
31620
491
31720
553
31820
473
31920
487
32020
48
32320
509
32420
543
32520
582
32620
617
32720
583
33020
623
33120
615
4120
585
4220
583
4320
572
4620
607
4720
605
4820
631
4920
665
41320
656
41420
683
41520
711
41620
734
41720
727
42020
73
42120
672
42220
683
42320
691
42420
715
42720
721
42820
74
42920
777
43020
763
5120
724
5420
751
5520
762
5620
76
5720
749
5820
782
51120
704
51220
705
51320
62
51420
578
51520
537
51820
591
51920
625
52020
61
52120
6
52220
609
52620
615
52720
62
52820
609
52920
61
6120
629
6220
628
6320
653
6420
649
6520
663
6820
667
6920
635
61020
643
61120
583
61220
606
61520
625
61620
631
61720
615
61820
599
61920
601
62220
616
62320
624
62420
615
62520
615
62620
571
62920
585
63020
584
Qtr
1
2
3
4
Options
Options
Aggregate Strike Price
Intrinsic Value
Outstanding
Exercisable
Outstanding
Exercisable
Outstanding
Exercisable
Luna
2418245
1309606
$6482283
$2709686
7767068
4952824
2418245
1309606
6482283
2709686
7767068
4952824
Warrants Aaron Chase Aaron ChaseCarilion exercised all warrants in Q2 and Q3 2018
0
0
0
0
2418245
1309606
6482283
2709686
Average Strike Price
$ 268
$ 207
Pull Cancelled for whole year
Cancels
Q1
35659 Aaron Chase Aaron Chase22999 of canceled shares didnrsquot show up until Q2-20 report
Aaron Chase Aaron ChaseCarilion exercised all warrants in Q2 and Q3 2018
$ 364
12990180
Outstanding 12312019
3160397
Q2
13124
$ 211
2769912
Q3
- 0
ERRORDIV0
- 0
Grants
20000
Q4
- 0
ERRORDIV0
- 0
Exercised
(662965)
48783
$ 323
15760092
Canceled
(48783)
Corrected Termed EEs from 2019
(50404)
These were corrected in June 2020
2418245
Remaining life
Options
Avg Life
- 0
Outstanding
Luna
2418245
644
Exercisable
1309606
474
Remaining service
Luna
2418245
See awards outstanding by grant price range report and Disclosure report for information on this tab
Luna Innovations
Additional Notes
EPS Calculations
During Jan-2019 and 2020 Management was awarded Performance Based Grants and Time Based Grants
63020
The Performance Based Grants vest after 3 years and are issued only if the performance is achieved
The Time Based Grants vest each year for 3 years Grants are issued once vested each year
Yearly BOD Grants
Basic EPS
DSU deferred stock units vest in a year but do not become issued until the Director leaves the Board This started in 2018
Net Income (loss) Per Share from Continuing Operations
YTD
Diluted
QTD
Diluted
DSU awards vest in May 2021 and will be added to the middle section of the EPS in May 2021
Net Income from Continuing Operations
1688508
1368839
Rich Roedel
8877
704
62500
Common Shares Outstanding
30484797
30589249
Barry Phelps
5326
704
37500
$ 006
$ 005
$ 004
$ 004
Leigh Anderson
5326
704
37500
Mary Beth Vitale
5326
704
37500
Net income (loss) Per Share attributable to common shareholders
RSU restricted stock units vest and are issued in a year and will be added to the bottom of the EPS in May 2021
Net Income (Loss) available to Shareholders
252605
1368839
Don Pastor
5326
704
37500
Common Shares Outstanding
30484797
30589249
Gary Spiegel
5326
704
37500
$ 001
$ 001
$ 004
$ 004
Net income (loss) Per Share from Discontinued Operations
Net Income from Discontinued Operations
(1435903)
- 0
Common Shares Outstanding
30484797
30589249
$ (005)
$ (004)
$ - 0
$ - 0
Diluted EPS
Net Income(Loss) available to SHs
252605
1368839
Common Shares Outstanding
30484797
30589249
Common Stock Equivalent
2010153
1876873
$ 001
- 0 Grant Thornton LLP Grant Thornton LLPAs earnings from continuing operations are negative (loss) basic and diluted EPS equal one another
$ 004 Grant Thornton LLP Grant Thornton LLPAs earnings from continuing operations are negative (loss) basic and diluted EPS equal one another
- 0 Grant Thornton LLP Grant Thornton LLPAs earnings from continuing operations are negative (loss) basic and diluted EPS equal one another
Non-GAAP Diluted EPS
Net income (loss) Per Share attributable to common shareholders
Net Income (Loss) available to Shareholders
252605
1368839
Loss from discontinued operations
1435903
- 0
Share-based compensation
966932
465109
Amortization of acquired intangibles
344405
688810
Acquisition related costs
- 0
- 0
Amortization of Inventory Step-up
- 0
- 0
Common Shares Outstanding
30484797
30589249
Common Stock Equivalent
2010153
1876873
$ 009
$ 008
YTD
QTD
Total issued shares
32470276
Average Close Price
$ 696
$ 652
Total treasury
1672741
Shares Outstanding
30797535
Net change in denominator
1404924 Kelly Bewick Aaron Chasesee Dilution (stock option) dilutive tab
1264984
BOD fees paid in DSUs Aaron Chase Aaron ChaseFrom Equity Award Transactions Report
Month
Quarter
Year
Balance at 112019 - DSU outstanding
591457
591457
Jan
31
Issued during Q1 2020
7114
7114
Feb
29
Issued during Q2 2020
3947
7894
Mar
31
91
91
Annual grant DSU vested 5112020
10521 KBSResults KBSResultsEnter 2019 DSU annual grant when vest in 2020 (probably May) you do not need to enter annual RSU because it will be issued in AST
21042
Apr
30
Deferred Equity Issuance 6012020
(7809) KBSResults Aaron ChaseM Wise and J Williamson retired from the BoD in May 2020 Wise Deferred Comp will be issued every June 1 for 10 years Williamson Deferred Comp will be issued every June 1 for 5 years
Grant Thornton LLP Grant Thornton LLPAs earnings from continuing operations are negative (loss) basic and diluted EPS equal one another
Grant Thornton LLP Grant Thornton LLPAs earnings from continuing operations are negative (loss) basic and diluted EPS equal one another
(15619)
May
31
Issued during Q3 2020
- 0
- 0
Jun
30
91
182
Issued during Q4 2020
- 0
- 0
Jul
31
Aug
31
Sept
30
92
274
Oct
31
Totals (Antidilutive)
2010153
1876873
Nov
30
Dec
31
92
366
Shares Outstanding as of 112020
31788896
As Of Date
Transaction
Reason
Name
Shares Issued
Shares Retired
Running Total
01012020
Normal
Balance Roll Forward
- 0
- 0
31788896
01082020
Normal
Option Exercise
Williamson John
12000000
- 0
31908896
01082020
Normal
Retirement - Vested Restriced Stock
Exer Options
Williamson John
- 0
2000000
31888896
01102020
Normal
Option Exercise
Roedel Rich
6000000
- 0
31948896
01142020
Normal
2019 Time-Based RSU Vesting
Messick Dale
666700
- 0
31955563
01142020
Normal
2019 Time-Based RSU Vesting
Graeff Scott
3066700
- 0
31986230
01142020
Normal
2019 Time-Based RSU Vesting
Soller Brian
1066700
- 0
31996897
01142020
Normal
2019 Time-Based RSU Vesting
Garrett James
766700
- 0
32004564
01142020
Normal
2019 Time-Based RSU Retirement
Taxes
Graeff Scott
- 0
920000
31995364
01142020
Normal
2019 Time-Based RSU Retirement
Taxes
Soller Brian
- 0
320000
31992164
01142020
Normal
2019 Time-Based RSU Retirement
Taxes
Garrett James
- 0
230000
31989864
01142020
Normal
Option Exercise
Burris Kevin
100000
- 0
31990864
01292020
Normal
Option Exercise
Carr Dustin
3212300
- 0
32022987
01272020
Normal
Option Exercise
Chen James
334000
- 0
32026327
02192020
Normal
Option Exercise
McPherson Daniel
534800
- 0
32031675
03122020
Normal
Option Exercise
Haber Todd
2500000
- 0
32056675
03122020
Normal
Option Exercise
Graver Thomas
4558100
- 0
32102256
03122020
Normal
Option Exercise
Baez Michael
911200
- 0
32111368
03062020
Normal
Option Exercise
Farooqui Salvan
1500000
- 0
32126368
05122020
Normal
Option Exercise
Baez Michael
950000
- 0
32135868
05142020
Normal
Option Exercise
Haber Todd
4300000
- 0
32178868
05142020
Normal
Option Exercise
Graver Thomas
4746100
- 0
32226329
05112020
Normal
Annual Equity Grant Vesting-BoD
Pastor Don
580000
- 0
32232129
05112020
Normal
Annual Equity Grant Vesting-BoD
Williamson John
580000
- 0
32237929
06012020
Normal
Deferred Stock Issuance-BoD
Wise Mike
980900
- 0
32247738
06012020
Normal
Deferred Stock Issuance-BoD
Williamson John
3756800
32285306
06112020
Normal
Option Exercise
Wise Mike
24000000
32525306
06112020
Normal
Retirement - Vested Stock
Exer Options
Wise Mike
6153000
32463776
06082020
Normal
Option Exercise
Pruzan Michael
400000
32467776
06292020
Normal
Option Exercise
Farooqui Salvan
250000
32470276
Date Issued
Balance Outstanding
Number of Days
Weighted Avg
Treasury Shares Weighted Average
Year-to-Date
YTD
QTD
1120
31788896
182
31788896
Graeff July 2
115000
115000
1820
31908896
175
115385
Q2 2015
29925
29925
1820
31888896
175
(19231)
2014
22725
22725
11020
31948896
173
57033
2016 Mgmt buyback
73675
73675
11420
31955563
169
6191
2016 repurchase program
205500
205500
11420
31986230
169
28477
2017 Mgmt buyback
90900
90900
11420
31996897
169
9905
2017 BOD buyback
100000
100000
11420
32004564
169
7119
2017 repurchase program
433179
433179
11420
31995364
169
(8543)
2018 repurchase program
132450
132450
11420
31992164
169
(2971)
2018 Mgmt buyback
49751
49751
11420
31989864
169
(2136)
2019 Mgmt buyback
52733
52733
11420
31990864
169
929
2019 repurchase program
333953
333953
12920
32022987
154
27181
2020 Mgmt buyback
6337
12673
12720
32026327
156
2863
21920
32031675
133
3908
164612764
165246418
31220
32056675
111
15247
31220
32102256
111
27799
31220
32111368
111
5557
567659
3620
32126368
117
9643
Treasury on AST
567664
51220
32135868
50
2610
Diff
(5)
51420
32178868
48
11341
51420
32226329
48
12517
51120
32232129
51
1625
51120
32237929
51
1625
6120
32247738
30
1617
6120
32285306
30
6193
61120
32525306
20
26374
61120
32463776
20
(6762)
6820
32467776
23
505
62920
32470276
2
27
YTD Average Shares Outstanding
32130925
Quarter-to Date
112020
31788896
91
31788896
1820
31908896
91
120000
1820
31888896
91
(20000)
11020
31948896
91
60000
11420
31955563
91
6667
11420
31986230
91
30667
11420
31996897
91
10667
11420
32004564
91
7667
11420
31995364
91
(9200)
11420
31992164
91
(3200)
11420
31989864
91
(2300)
11420
31990864
91
1000
12920
32022987
91
32123
12720
32026327
91
3340
21920
32031675
91
5348
31220
32056675
91
25000
31220
32102256
91
45581
31220
32111368
91
9112
3620
32126368
91
15000
51220
32135868
50
5220
51420
32178868
48
22681
51420
32226329
48
25034
51120
32232129
51
3251
51120
32237929
51
3251
6120
32247738
30
3234
6120
32285306
30
12385
61120
32525306
20
52747
61120
32463776
20
(13523)
6820
32467776
23
1011
62920
32470276
2
55
QTD Average Shares Outstanding
32241713
C1
TA to the Summary tab
C2
TA to the Avg Stock Price tab
C3
TA to the Options Outstanding YTD tab
C4
TA to the Equity Rollforward WP
C5
TA to the AST Report in the Equity Rollfoward WP
C6
TA to the Options Outstanding QTD tab
C7
Custom 7
C8
See comment box
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
19
Second-quarter 2020 Key Financial Results
Solid financial performance
$06M improvement in Adjusted EBITDA1 year-over-year
Total revenues of $186M up 4 year-over-year
Lightwave revenue of $129M up 3 year-over-year
Luna Labs revenue of $56M up 7 year-over-year
Operating income improved to $18M or 10 of total revenues in Q2 2020 from $10M or 6 of total revenues in Q2 2019 due to increased revenue and gross profit as well as improved operating expense leverage
Net income of $14M or $004 per fully diluted share for the three months ended June 30 2020 compared to $08M or $002 per fully diluted share for the three months ended June 30 2019
Adjusted EBITDA1 increased to $30M for the three months ended June 30 2020 compared to $24M for the three months ended June 30 2019
Reaffirmed 2020 outlook tighten range to $81 to $83M in total revenues
1Adj EBITDA is a non-GAAP measure Reconciliation of comparable GAAP measures to non-GAAP measures are included in the appendix to this presentation
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
20
Second-quarter 2020 and Other Recent Accomplishments
Reported solid second-quarter 2020 financial results in challenging COVID environment
Held 6 customer-facing technology educational webinars ~1000 live attendees and more than 1200 leads
Hosted worldwide virtual sales meeting with 47 attendees
Participated in virtual trade shows
Continued to monitor employee feedback with a focus on safety and well-being
Successful implementation of Employee Stock Purchase Plan with approximately 60 participation
Held successful Virtual Annual Shareholder Meeting in May
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
21
($20)
$03
$95
FY16 FY17 FY18 FY19 FY20
Adjusted EBITDA1 2
(millions)
$31
$296 $331
$429
$705
FY16 FY17 FY18 FY19 FY20
Revenue1
(millions)
$357
Strong Financial Results
1 Based on managementrsquos estimates of the impact from the divestiture of Optoelectronics Includes the acquisitions of Micron Optics and General Photonics2Adj EBITDA is a non-GAAP measure Reconciliation of comparable GAAP measures to non-GAAP measures are included in the appendix to this presentation
FY20 Guidance$810 - $830
FY20 Guidance $100 to $120
$45
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
22
A Flexible Balance Sheet and Strong Cash Position
Strong balance sheet on June 30 2020
$912M in total assets
bull $265M in cash and cash equivalents
bull $448M in working capital
Access to $10M revolving credit facility if needed
Continued focus on working capital and reinvestment in business in order to generate long-term sustainable growth
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
23
2020 Financial Outlook
Maintaining FY2020 outlook tightening our range
Total revenues of $81M to $83M
Adjusted EBITDA1 of $10M to $12M
1 Adj EBITDA is a non-GAAP measure Reconciliation of comparable GAAP measures to non-GAAP measures are included in the appendix to this presentation The outlook above does not include any future acquisitions divestitures or unanticipated events
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
24
Luna ndash Enabling the Future with Fiber
Proprietary measurement technology offering unprecedented combination of resolution accuracy and speed
Customers in attractive markets Military and Defense Communications Infrastructure Energy and Automotive
Positioned to take advantage of trends such as vehicle light-weighting and increasing demands on data centers and broadband capacity
Adequately capitalized to fund growth
Long-tenured experienced executive team board
Corporate culture of innovation and integrity
Overview
Appendix
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
26
Reconciliation of Net Income to Adjusted EBITDA
(1) Non-recurring charges consist of transaction-related expenses related to the acquisition of General Photonics
2020 2019 2020 2019
Reconciliation of EBITDA and Adjusted EBITDANet income 1369$ 841$ 253$ 1967$ Loss from discontinued operations net of income tax benefit of $464 - - 1436 -
Net income from continuing operations 1369 841 1689 1967 Interest expense 1 - 1 13 Investment income (4) (77) (64) (268) Income tax expense(benefit) 441 247 579 (1618) Depreciation and amortization 684 653 1363 1166
Reconciliation of Net Income to Adjusted EBITDA Full Year
(1) Non-recurring charges include the following 2017) CEO separation costs and other share-based compensation 2018) Transaction-related expenses associated with the acquisition of Micron Optics Inc 2019) Transaction related expenses and inventory step-up amortization relate to General Photonics acquisition and CFO transition expenses
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
28
New Segment Quarterly Results (in thousands)
March 31 2019 June 30 2019 Sep 30 2019 A Dec 31 2019 March 31 2020 June 30 2020
Total revenues 14833 17814 18389 19480 17141 18576
Cost of revenuesLightwave 4280 5334 5449 5070 4885 5181 Luna Labs 3785 3728 3665 4022 3892 3878
Total cost of revenues 8065 9062 9114 9092 8777 9059
Gross Profit 6768 8752 9275 10388 8364 9517
Operating expenseSelling general and administrative 6207 6003 5745 6416 6377 6202 Research development and engineering 1458 1735 2048 2255 1597 1505
Total operating expense 7665 7738 7793 8671 7974 7707
Operating income (897)$ 1014$ 1482$ 1717$ 390$ 1810$
A The Company revised its results for the three months ended September 30 2019 The Company has concluded these adjustments are not material individually or in the aggregate
Three Months Ended
Scott A Graeff President and CEO
Safe Harbor
Luna ndash Enabling the Future with Fiber
Luna is a global company
Luna has a clear vision and established history
Compelling business model with strong growth potential
Lightwave 2019 revenue1 snapshot
Luna Overview
Where Does Luna Play
Sensing
Sensing Short-range high-resolution
Sensing long-range high-speed
Sensing Material thickness
Comms Test
Comms Test Components
Comms Test Short-haul network
Luna Labs
2Q FY20 Results
Second-quarter 2020 Key Financial Results
Second-quarter 2020 and Other Recent Accomplishments
Slide Number 21
A Flexible Balance Sheet and Strong Cash Position
2020 Financial Outlook
Luna ndash Enabling the Future with Fiber
Appendix
Reconciliation of Net Income to Adjusted EBITDA
Reconciliation of Net Income to Adjusted EBITDA Full Year
New Segment Quarterly Results
(in thousands)
Three Months Ended
December 31 2018
A
March 31 2019
C
June 30 2019
September 30 2019
December 31 2019
March 31 2020
June 30 2020
Revenues
Lightwave
$ 11345
$ 10221
$ 12523
$ 13120
$ 13988
$ 11554
12933
Luna Labs
5548
6641
5291
5301
5492
5587
5642
Total revenues
16893
16862
17814
18421
19480
17141
18576
Cost of revenues
Lightwave
4002
3836
5334
5471
5070
4885
5181
Luna Labs
4268
4816
3728
3665
4022
3892
3878
Total cost of revenues
8270
8652
9062
9136
9092
8777
9059
Gross Profit
8623
8210
8752
9285
10388
8364
9517
Operating expense
Selling general and administrative
6394
7165
6003
5754
6415
6377
6202
Research development and engineering
1894
1708
1735
2047
2255
1597
1505
Total operating expense
8288
8873
7738
7801
8670
7974
7707
Operating income
$ 335
$ (663)
$ 1014
$ 1484
$ 1718
$ 390
$ 1810
Historical - Hidden
A
Includes $751000 of costs associated with the acquisition of Micron Optics
B
Unaudited pro forma financials assumes the General Photonics business was acquired on January 1 2019
C
Includes $898000 of costs associated with the acquisition of General Photonics
Year Ended December 31
(unaudited)
2016
2017
2018
2019
Reconciliation of EBITDA and Adjusted EBITDA
Net (loss)income
$ (2370)
$ 14615
$ 11004
$ 5343
Less income from discontinued operations net of income taxes
300
15866
9766
- 0
Loss from discontinued operations net of income tax benefit of $464
- 0
- 0
- 0
- 0
Net income from continuing operations
(2670)
(1251)
1238
5343
Interest expense
319
217
124
16
Investment income
- 0
- 0
(549)
(394)
Income tax (benefit)expense
(135)
(1148)
48
(1654)
Depreciation and amortization
1466
1137
908
2503
EBITDA
(1020)
(1045)
1769
5814
Share-based compensation
860
715
628
1544
Non-Recurring Charges (1)
- 0
596
751
1390
Amortization of Inventory Step-up
- 0
- 0
- 0
725
Adjusted EBITDA
$ (160)
$ 266
$ 3148
$ 9473
1
Non-recurring charges include the following 2017) CEO separation costs and other share-based compensation 2018) Transaction-related expenses associated with the acquisition of Micron Optics Inc 2019) Transaction related expenses and inventory step-up amortization relate to General Photonics acquisition and CFO transition expenses
Luna Innovations Incorporated
Reconciliation of Non-GAAP Financial Measures
(in thousands)
Three Months Ended
Six Months Ended
June 30
June 30
2020
2019
2020
2019
(Unaudited)
(Unaudited)
Reconciliation of EBITDA and Adjusted EBITDA
Net income
$ 1369
$ - 0
$ 841
$ 253
$ - 0
$ 1967
Loss from discontinued operations net of income tax benefit of $464
- 0
- 0
- 0
1436
- 0
- 0
Gain on sale of asset
- 0
- 0
- 0
- 0
- 0
- 0
Net income from continuing operations
1369
- 0
841
1689
- 0
1967
Interest expense
1
- 0
- 0
1
- 0
13
Investment income
(4)
- 0
(77)
(64)
- 0
(268)
Income tax expense(benefit)
441
- 0
247
579
- 0
(1618)
Depreciation and amortization
684
- 0
653
1363
- 0
1166
EBITDA
2490
- 0
1664
3568
- 0
1260
Share-based compensation
465
- 0
378
967
- 0
721
Non-Recurring Charges (1)
- 0
- 0
44
- 0
- 0
942
CFO Recruiting and Severance
- 0
- 0
- 0
- 0
- 0
- 0
Amortization of Inventory Step-up
- 0
- 0
310
- 0
- 0
412
- 0
- 0
- 0
- 0
- 0
- 0
Adjusted EBITDA
$ 2955
$ - 0
$ 2396
$ 4535
$ - 0
$ 3335
EBITDA Margin Percent on Total Revenues
134
93
100
39
Adjusted EBITDA Margin Percent on Total Revenues
159
134
127
102
Reconciliation of Non-GAAP EPS
Diluted EPS
$ 004
$ 002
$ 001
$ 005
Loss from discontinued operations net of income taxes
Existing Technology amortization missed from 101518-63019
- 0
15560
Amortization catch up from 101518-63019 in July 2019 only
In-process RampD
200000
0
- 0
1650000
4091764
Micron Purchase Amortization Detail - 812019 and forward
Trade Name
150000
36
4167
Customer Relationships
100000
84
1190
Existing Technology
1200000
60
20000
Amortization going forward
In-process RampD
200000
0
- 0
1650000
2535714
General Pho Purchase Amortization Detail - 312019
Trade Name
400000
36
11111
22822
Customer Relationships
600000
180
3333
22834
Existing Technology
7200000
96
75000
22827
In-process RampD
- 0
0
- 0
8200000
8944444
General Pho Inventory Step-up Amortization - 312019
WIP amp Fin Goods
724760
7
103537
Ends 93019
PampL Summary - Luna Innovations
For the Three Months Ending March 31 2020
QTD
QTD
QTD
YTD
YTD
YTD
Actual
Budget
Variance
Actual
Budget
Variance
fav(un-fav)
fav(un-fav)
Revenues
Lightwave
12933344
13366455
(433536)
24487335
25564000
(1077090)
686
Luna Labs
5642348
6075202
(432854)
11229350
11675307
(445957)
314
Total Revenues
18575692
19441657
(866390)
35716685
37239307
(1523047)
Cost of Revenues
Product and Licensing
5181057
5789978
608921
10066386
11082697
1016311
282
TDD
3877888
4448571
570683
7769627
8526736
757109
218
Total Cost of Revenues
9058945
10238549
570683
17836013
19609433
1773420
499
Gross Margin
Product and Licensing - $
7752287
7576477
175810
14420949
14481303
(60354)
Product and Licensing -
60
57
3
59
57
2
TDD - $
1764460
1626631
137829
3459723
3148571
311152
TDD -
31
27
4
31
27
4
Total Gross Margin
9516747
9203108
313639
17880672
17629874
250798
Gross Margin
51
47
4
50
47
3
501
Operating Expenses
Selling General amp Admin
6202338
8155800
1953888
12578977
14477853
1899301
Research Devel amp Engineering
1504800
647122
(857678)
3101865
2798808
(303057)
Total Operating Expenses
7707138
8802922
1096209
15680842
17276661
1595819
439
Operating Income (Loss)
1809609
400186
1409423
2199830
353213
1846617
62
Other Expense (Income)
Interest
930
985
55
1145
2195
1050
00
Investment Income
(4435)
(75000)
(70565)
(63790)
(150000)
(86210)
-02
Tax Expense
440626
118551
(498831)
579203
125253
(630706)
16
Tax Benefit from release of VA
-
-
-
-
-
-
00
Gainloss on foreigh exch
-
-
-
-
-
-
00
Other
3649
-
(3649)
(5236)
-
5236
-00
440770
44536
(396234)
511322
(22552)
(533874)
14
Income from continuing operations
1368839
355650
1805658
1688508
375765
2380491
Income from Disc Ops
Operating Income from Disc Ops
-
-
- 0
-
-
- 0
Gainloss of Asset Sale
-
-
- 0
(1435903)
-
(1435903)
Total Income from Disc Ops
- 0
- 0
- 0
(1435903)
- 0
(1435903)
Net Income (Loss)
1368839
355650
1013189
252605
375765
(123160)
07
Dividend on Preferred
- 0
- 0
- 0
- 0
- 0
- 0
Net Income (Loss) available to Common Shareholders
1368839
355650
1013189
252605
375765
(123160)
07
Depreciation
244214
491046
From Cash Flow
Amortization
439787
872410
From Cash Flow
Stock Compensation
465109
966932
From Cash Flow
Acquisition Costs
- 0
- 0
Amortization of Inventory Step-up
- 0
- 0
CFO Recruiting amp Severance
- 0
- 0
Treasury Stock Activity
63020
Stock Buyback - Held with Northland
Trade date
Settlement Date
of Shares
Avg Price
Commission
Trade date Total $
Number of Days
Weighted Avg
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
= Trades Not Settled
$000
$000
$000
$000
YTD Avg
0
0
Trade date
Settlement Date
of Shares
Avg Price
Commission
Trade date Total $
Number of Days
Weighted Avg
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
QTD Avg
0
0
0
0
2016 Amounts under program
205500
$24880840
$25086340
2017 Amounts under program
433179
$75649353
$76082532
2018 Amounts under program
132450
$30604099
$30736549
2019 Amounts under program
333953
$198663889
$199999701
Total
110508200
329798181
331905122
For Q Disclosure
Management Buyback - Held with AST
Date
Shares
YTD days os
YTD weighted avg
QTD days os
QTD Weighted Avg
Month
Quarter
Year
52720
Garrett James
6500
35
1250
35
2500
Jan
31
- 0
- 0
52720
Graeff Scott
17450
35
3356
35
6712
Feb
29
- 0
- 0
52720
Soller Brian
9000
35
1731
35
3462
Mar
31
91
91
44013
- 0
91
- 0
Apr
30
- 0
- 0
44013
- 0
91
- 0
May
31
- 0
- 0
44013
- 0
91
- 0
Jun
30
91
182
44013
- 0
91
- 0
Jul
31
- 0
- 0
44013
- 0
91
- 0
Aug
31
- 0
- 0
44013
- 0
91
- 0
Sept
30
92
274
- 0
- 0
Oct
31
- 0
- 0
- 0
- 0
Nov
30
- 0
- 0
- 0
- 0
Dec
31
92
366
32950
6337
12673
BOD buyback
YTD
$000
$000
44013
- 0
Qtr
$000
$000
44013
- 0
Luna
Date
CloseLast
1220
738
Average Close Price
1320
718
Year-To-Date
$ 696
1620
73
Quarter-To-Date
$ 652
1720
735
1820
756
1920
777
11020
787
11320
803
11420
804
11520
832
11620
85
11720
845
12120
827
12220
833
12320
849
12420
844
12720
828
12820
856
12920
85
13020
846
13120
819
2320
825
2420
821
2520
82
2620
819
2720
837
21020
85
21120
858
21220
904
21320
895
21420
897
21820
891
21920
891
22020
907
22120
923
22420
861
22520
745
22620
759
22720
707
22820
67
3220
713
3320
693
3420
719
3520
689
3620
75
3920
672
31020
66
31120
599
31220
521
31320
522
31620
491
31720
553
31820
473
31920
487
32020
48
32320
509
32420
543
32520
582
32620
617
32720
583
33020
623
33120
615
4120
585
4220
583
4320
572
4620
607
4720
605
4820
631
4920
665
41320
656
41420
683
41520
711
41620
734
41720
727
42020
73
42120
672
42220
683
42320
691
42420
715
42720
721
42820
74
42920
777
43020
763
5120
724
5420
751
5520
762
5620
76
5720
749
5820
782
51120
704
51220
705
51320
62
51420
578
51520
537
51820
591
51920
625
52020
61
52120
6
52220
609
52620
615
52720
62
52820
609
52920
61
6120
629
6220
628
6320
653
6420
649
6520
663
6820
667
6920
635
61020
643
61120
583
61220
606
61520
625
61620
631
61720
615
61820
599
61920
601
62220
616
62320
624
62420
615
62520
615
62620
571
62920
585
63020
584
Qtr
1
2
3
4
Options
Options
Aggregate Strike Price
Intrinsic Value
Outstanding
Exercisable
Outstanding
Exercisable
Outstanding
Exercisable
Luna
2418245
1309606
$6482283
$2709686
7767068
4952824
2418245
1309606
6482283
2709686
7767068
4952824
Warrants Aaron Chase Aaron ChaseCarilion exercised all warrants in Q2 and Q3 2018
0
0
0
0
2418245
1309606
6482283
2709686
Average Strike Price
$ 268
$ 207
Pull Cancelled for whole year
Cancels
Q1
35659 Aaron Chase Aaron Chase22999 of canceled shares didnrsquot show up until Q2-20 report
Aaron Chase Aaron ChaseCarilion exercised all warrants in Q2 and Q3 2018
$ 364
12990180
Outstanding 12312019
3160397
Q2
13124
$ 211
2769912
Q3
- 0
ERRORDIV0
- 0
Grants
20000
Q4
- 0
ERRORDIV0
- 0
Exercised
(662965)
48783
$ 323
15760092
Canceled
(48783)
Corrected Termed EEs from 2019
(50404)
These were corrected in June 2020
2418245
Remaining life
Options
Avg Life
- 0
Outstanding
Luna
2418245
644
Exercisable
1309606
474
Remaining service
Luna
2418245
See awards outstanding by grant price range report and Disclosure report for information on this tab
Luna Innovations
Additional Notes
EPS Calculations
During Jan-2019 and 2020 Management was awarded Performance Based Grants and Time Based Grants
63020
The Performance Based Grants vest after 3 years and are issued only if the performance is achieved
The Time Based Grants vest each year for 3 years Grants are issued once vested each year
Yearly BOD Grants
Basic EPS
DSU deferred stock units vest in a year but do not become issued until the Director leaves the Board This started in 2018
Net Income (loss) Per Share from Continuing Operations
YTD
Diluted
QTD
Diluted
DSU awards vest in May 2021 and will be added to the middle section of the EPS in May 2021
Net Income from Continuing Operations
1688508
1368839
Rich Roedel
8877
704
62500
Common Shares Outstanding
30484797
30589249
Barry Phelps
5326
704
37500
$ 006
$ 005
$ 004
$ 004
Leigh Anderson
5326
704
37500
Mary Beth Vitale
5326
704
37500
Net income (loss) Per Share attributable to common shareholders
RSU restricted stock units vest and are issued in a year and will be added to the bottom of the EPS in May 2021
Net Income (Loss) available to Shareholders
252605
1368839
Don Pastor
5326
704
37500
Common Shares Outstanding
30484797
30589249
Gary Spiegel
5326
704
37500
$ 001
$ 001
$ 004
$ 004
Net income (loss) Per Share from Discontinued Operations
Net Income from Discontinued Operations
(1435903)
- 0
Common Shares Outstanding
30484797
30589249
$ (005)
$ (004)
$ - 0
$ - 0
Diluted EPS
Net Income(Loss) available to SHs
252605
1368839
Common Shares Outstanding
30484797
30589249
Common Stock Equivalent
2010153
1876873
$ 001
- 0 Grant Thornton LLP Grant Thornton LLPAs earnings from continuing operations are negative (loss) basic and diluted EPS equal one another
$ 004 Grant Thornton LLP Grant Thornton LLPAs earnings from continuing operations are negative (loss) basic and diluted EPS equal one another
- 0 Grant Thornton LLP Grant Thornton LLPAs earnings from continuing operations are negative (loss) basic and diluted EPS equal one another
Non-GAAP Diluted EPS
Net income (loss) Per Share attributable to common shareholders
Net Income (Loss) available to Shareholders
252605
1368839
Loss from discontinued operations
1435903
- 0
Share-based compensation
966932
465109
Amortization of acquired intangibles
344405
688810
Acquisition related costs
- 0
- 0
Amortization of Inventory Step-up
- 0
- 0
Common Shares Outstanding
30484797
30589249
Common Stock Equivalent
2010153
1876873
$ 009
$ 008
YTD
QTD
Total issued shares
32470276
Average Close Price
$ 696
$ 652
Total treasury
1672741
Shares Outstanding
30797535
Net change in denominator
1404924 Kelly Bewick Aaron Chasesee Dilution (stock option) dilutive tab
1264984
BOD fees paid in DSUs Aaron Chase Aaron ChaseFrom Equity Award Transactions Report
Month
Quarter
Year
Balance at 112019 - DSU outstanding
591457
591457
Jan
31
Issued during Q1 2020
7114
7114
Feb
29
Issued during Q2 2020
3947
7894
Mar
31
91
91
Annual grant DSU vested 5112020
10521 KBSResults KBSResultsEnter 2019 DSU annual grant when vest in 2020 (probably May) you do not need to enter annual RSU because it will be issued in AST
21042
Apr
30
Deferred Equity Issuance 6012020
(7809) KBSResults Aaron ChaseM Wise and J Williamson retired from the BoD in May 2020 Wise Deferred Comp will be issued every June 1 for 10 years Williamson Deferred Comp will be issued every June 1 for 5 years
Grant Thornton LLP Grant Thornton LLPAs earnings from continuing operations are negative (loss) basic and diluted EPS equal one another
Grant Thornton LLP Grant Thornton LLPAs earnings from continuing operations are negative (loss) basic and diluted EPS equal one another
(15619)
May
31
Issued during Q3 2020
- 0
- 0
Jun
30
91
182
Issued during Q4 2020
- 0
- 0
Jul
31
Aug
31
Sept
30
92
274
Oct
31
Totals (Antidilutive)
2010153
1876873
Nov
30
Dec
31
92
366
Shares Outstanding as of 112020
31788896
As Of Date
Transaction
Reason
Name
Shares Issued
Shares Retired
Running Total
01012020
Normal
Balance Roll Forward
- 0
- 0
31788896
01082020
Normal
Option Exercise
Williamson John
12000000
- 0
31908896
01082020
Normal
Retirement - Vested Restriced Stock
Exer Options
Williamson John
- 0
2000000
31888896
01102020
Normal
Option Exercise
Roedel Rich
6000000
- 0
31948896
01142020
Normal
2019 Time-Based RSU Vesting
Messick Dale
666700
- 0
31955563
01142020
Normal
2019 Time-Based RSU Vesting
Graeff Scott
3066700
- 0
31986230
01142020
Normal
2019 Time-Based RSU Vesting
Soller Brian
1066700
- 0
31996897
01142020
Normal
2019 Time-Based RSU Vesting
Garrett James
766700
- 0
32004564
01142020
Normal
2019 Time-Based RSU Retirement
Taxes
Graeff Scott
- 0
920000
31995364
01142020
Normal
2019 Time-Based RSU Retirement
Taxes
Soller Brian
- 0
320000
31992164
01142020
Normal
2019 Time-Based RSU Retirement
Taxes
Garrett James
- 0
230000
31989864
01142020
Normal
Option Exercise
Burris Kevin
100000
- 0
31990864
01292020
Normal
Option Exercise
Carr Dustin
3212300
- 0
32022987
01272020
Normal
Option Exercise
Chen James
334000
- 0
32026327
02192020
Normal
Option Exercise
McPherson Daniel
534800
- 0
32031675
03122020
Normal
Option Exercise
Haber Todd
2500000
- 0
32056675
03122020
Normal
Option Exercise
Graver Thomas
4558100
- 0
32102256
03122020
Normal
Option Exercise
Baez Michael
911200
- 0
32111368
03062020
Normal
Option Exercise
Farooqui Salvan
1500000
- 0
32126368
05122020
Normal
Option Exercise
Baez Michael
950000
- 0
32135868
05142020
Normal
Option Exercise
Haber Todd
4300000
- 0
32178868
05142020
Normal
Option Exercise
Graver Thomas
4746100
- 0
32226329
05112020
Normal
Annual Equity Grant Vesting-BoD
Pastor Don
580000
- 0
32232129
05112020
Normal
Annual Equity Grant Vesting-BoD
Williamson John
580000
- 0
32237929
06012020
Normal
Deferred Stock Issuance-BoD
Wise Mike
980900
- 0
32247738
06012020
Normal
Deferred Stock Issuance-BoD
Williamson John
3756800
32285306
06112020
Normal
Option Exercise
Wise Mike
24000000
32525306
06112020
Normal
Retirement - Vested Stock
Exer Options
Wise Mike
6153000
32463776
06082020
Normal
Option Exercise
Pruzan Michael
400000
32467776
06292020
Normal
Option Exercise
Farooqui Salvan
250000
32470276
Date Issued
Balance Outstanding
Number of Days
Weighted Avg
Treasury Shares Weighted Average
Year-to-Date
YTD
QTD
1120
31788896
182
31788896
Graeff July 2
115000
115000
1820
31908896
175
115385
Q2 2015
29925
29925
1820
31888896
175
(19231)
2014
22725
22725
11020
31948896
173
57033
2016 Mgmt buyback
73675
73675
11420
31955563
169
6191
2016 repurchase program
205500
205500
11420
31986230
169
28477
2017 Mgmt buyback
90900
90900
11420
31996897
169
9905
2017 BOD buyback
100000
100000
11420
32004564
169
7119
2017 repurchase program
433179
433179
11420
31995364
169
(8543)
2018 repurchase program
132450
132450
11420
31992164
169
(2971)
2018 Mgmt buyback
49751
49751
11420
31989864
169
(2136)
2019 Mgmt buyback
52733
52733
11420
31990864
169
929
2019 repurchase program
333953
333953
12920
32022987
154
27181
2020 Mgmt buyback
6337
12673
12720
32026327
156
2863
21920
32031675
133
3908
164612764
165246418
31220
32056675
111
15247
31220
32102256
111
27799
31220
32111368
111
5557
567659
3620
32126368
117
9643
Treasury on AST
567664
51220
32135868
50
2610
Diff
(5)
51420
32178868
48
11341
51420
32226329
48
12517
51120
32232129
51
1625
51120
32237929
51
1625
6120
32247738
30
1617
6120
32285306
30
6193
61120
32525306
20
26374
61120
32463776
20
(6762)
6820
32467776
23
505
62920
32470276
2
27
YTD Average Shares Outstanding
32130925
Quarter-to Date
112020
31788896
91
31788896
1820
31908896
91
120000
1820
31888896
91
(20000)
11020
31948896
91
60000
11420
31955563
91
6667
11420
31986230
91
30667
11420
31996897
91
10667
11420
32004564
91
7667
11420
31995364
91
(9200)
11420
31992164
91
(3200)
11420
31989864
91
(2300)
11420
31990864
91
1000
12920
32022987
91
32123
12720
32026327
91
3340
21920
32031675
91
5348
31220
32056675
91
25000
31220
32102256
91
45581
31220
32111368
91
9112
3620
32126368
91
15000
51220
32135868
50
5220
51420
32178868
48
22681
51420
32226329
48
25034
51120
32232129
51
3251
51120
32237929
51
3251
6120
32247738
30
3234
6120
32285306
30
12385
61120
32525306
20
52747
61120
32463776
20
(13523)
6820
32467776
23
1011
62920
32470276
2
55
QTD Average Shares Outstanding
32241713
C1
TA to the Summary tab
C2
TA to the Avg Stock Price tab
C3
TA to the Options Outstanding YTD tab
C4
TA to the Equity Rollforward WP
C5
TA to the AST Report in the Equity Rollfoward WP
C6
TA to the Options Outstanding QTD tab
C7
Custom 7
C8
See comment box
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
20
Second-quarter 2020 and Other Recent Accomplishments
Reported solid second-quarter 2020 financial results in challenging COVID environment
Held 6 customer-facing technology educational webinars ~1000 live attendees and more than 1200 leads
Hosted worldwide virtual sales meeting with 47 attendees
Participated in virtual trade shows
Continued to monitor employee feedback with a focus on safety and well-being
Successful implementation of Employee Stock Purchase Plan with approximately 60 participation
Held successful Virtual Annual Shareholder Meeting in May
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
21
($20)
$03
$95
FY16 FY17 FY18 FY19 FY20
Adjusted EBITDA1 2
(millions)
$31
$296 $331
$429
$705
FY16 FY17 FY18 FY19 FY20
Revenue1
(millions)
$357
Strong Financial Results
1 Based on managementrsquos estimates of the impact from the divestiture of Optoelectronics Includes the acquisitions of Micron Optics and General Photonics2Adj EBITDA is a non-GAAP measure Reconciliation of comparable GAAP measures to non-GAAP measures are included in the appendix to this presentation
FY20 Guidance$810 - $830
FY20 Guidance $100 to $120
$45
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
22
A Flexible Balance Sheet and Strong Cash Position
Strong balance sheet on June 30 2020
$912M in total assets
bull $265M in cash and cash equivalents
bull $448M in working capital
Access to $10M revolving credit facility if needed
Continued focus on working capital and reinvestment in business in order to generate long-term sustainable growth
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
23
2020 Financial Outlook
Maintaining FY2020 outlook tightening our range
Total revenues of $81M to $83M
Adjusted EBITDA1 of $10M to $12M
1 Adj EBITDA is a non-GAAP measure Reconciliation of comparable GAAP measures to non-GAAP measures are included in the appendix to this presentation The outlook above does not include any future acquisitions divestitures or unanticipated events
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
24
Luna ndash Enabling the Future with Fiber
Proprietary measurement technology offering unprecedented combination of resolution accuracy and speed
Customers in attractive markets Military and Defense Communications Infrastructure Energy and Automotive
Positioned to take advantage of trends such as vehicle light-weighting and increasing demands on data centers and broadband capacity
Adequately capitalized to fund growth
Long-tenured experienced executive team board
Corporate culture of innovation and integrity
Overview
Appendix
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
26
Reconciliation of Net Income to Adjusted EBITDA
(1) Non-recurring charges consist of transaction-related expenses related to the acquisition of General Photonics
2020 2019 2020 2019
Reconciliation of EBITDA and Adjusted EBITDANet income 1369$ 841$ 253$ 1967$ Loss from discontinued operations net of income tax benefit of $464 - - 1436 -
Net income from continuing operations 1369 841 1689 1967 Interest expense 1 - 1 13 Investment income (4) (77) (64) (268) Income tax expense(benefit) 441 247 579 (1618) Depreciation and amortization 684 653 1363 1166
Reconciliation of Net Income to Adjusted EBITDA Full Year
(1) Non-recurring charges include the following 2017) CEO separation costs and other share-based compensation 2018) Transaction-related expenses associated with the acquisition of Micron Optics Inc 2019) Transaction related expenses and inventory step-up amortization relate to General Photonics acquisition and CFO transition expenses
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
28
New Segment Quarterly Results (in thousands)
March 31 2019 June 30 2019 Sep 30 2019 A Dec 31 2019 March 31 2020 June 30 2020
Total revenues 14833 17814 18389 19480 17141 18576
Cost of revenuesLightwave 4280 5334 5449 5070 4885 5181 Luna Labs 3785 3728 3665 4022 3892 3878
Total cost of revenues 8065 9062 9114 9092 8777 9059
Gross Profit 6768 8752 9275 10388 8364 9517
Operating expenseSelling general and administrative 6207 6003 5745 6416 6377 6202 Research development and engineering 1458 1735 2048 2255 1597 1505
Total operating expense 7665 7738 7793 8671 7974 7707
Operating income (897)$ 1014$ 1482$ 1717$ 390$ 1810$
A The Company revised its results for the three months ended September 30 2019 The Company has concluded these adjustments are not material individually or in the aggregate
Three Months Ended
Scott A Graeff President and CEO
Safe Harbor
Luna ndash Enabling the Future with Fiber
Luna is a global company
Luna has a clear vision and established history
Compelling business model with strong growth potential
Lightwave 2019 revenue1 snapshot
Luna Overview
Where Does Luna Play
Sensing
Sensing Short-range high-resolution
Sensing long-range high-speed
Sensing Material thickness
Comms Test
Comms Test Components
Comms Test Short-haul network
Luna Labs
2Q FY20 Results
Second-quarter 2020 Key Financial Results
Second-quarter 2020 and Other Recent Accomplishments
Slide Number 21
A Flexible Balance Sheet and Strong Cash Position
2020 Financial Outlook
Luna ndash Enabling the Future with Fiber
Appendix
Reconciliation of Net Income to Adjusted EBITDA
Reconciliation of Net Income to Adjusted EBITDA Full Year
New Segment Quarterly Results
(in thousands)
Three Months Ended
December 31 2018
A
March 31 2019
C
June 30 2019
September 30 2019
December 31 2019
March 31 2020
June 30 2020
Revenues
Lightwave
$ 11345
$ 10221
$ 12523
$ 13120
$ 13988
$ 11554
12933
Luna Labs
5548
6641
5291
5301
5492
5587
5642
Total revenues
16893
16862
17814
18421
19480
17141
18576
Cost of revenues
Lightwave
4002
3836
5334
5471
5070
4885
5181
Luna Labs
4268
4816
3728
3665
4022
3892
3878
Total cost of revenues
8270
8652
9062
9136
9092
8777
9059
Gross Profit
8623
8210
8752
9285
10388
8364
9517
Operating expense
Selling general and administrative
6394
7165
6003
5754
6415
6377
6202
Research development and engineering
1894
1708
1735
2047
2255
1597
1505
Total operating expense
8288
8873
7738
7801
8670
7974
7707
Operating income
$ 335
$ (663)
$ 1014
$ 1484
$ 1718
$ 390
$ 1810
Historical - Hidden
A
Includes $751000 of costs associated with the acquisition of Micron Optics
B
Unaudited pro forma financials assumes the General Photonics business was acquired on January 1 2019
C
Includes $898000 of costs associated with the acquisition of General Photonics
Year Ended December 31
(unaudited)
2016
2017
2018
2019
Reconciliation of EBITDA and Adjusted EBITDA
Net (loss)income
$ (2370)
$ 14615
$ 11004
$ 5343
Less income from discontinued operations net of income taxes
300
15866
9766
- 0
Loss from discontinued operations net of income tax benefit of $464
- 0
- 0
- 0
- 0
Net income from continuing operations
(2670)
(1251)
1238
5343
Interest expense
319
217
124
16
Investment income
- 0
- 0
(549)
(394)
Income tax (benefit)expense
(135)
(1148)
48
(1654)
Depreciation and amortization
1466
1137
908
2503
EBITDA
(1020)
(1045)
1769
5814
Share-based compensation
860
715
628
1544
Non-Recurring Charges (1)
- 0
596
751
1390
Amortization of Inventory Step-up
- 0
- 0
- 0
725
Adjusted EBITDA
$ (160)
$ 266
$ 3148
$ 9473
1
Non-recurring charges include the following 2017) CEO separation costs and other share-based compensation 2018) Transaction-related expenses associated with the acquisition of Micron Optics Inc 2019) Transaction related expenses and inventory step-up amortization relate to General Photonics acquisition and CFO transition expenses
Luna Innovations Incorporated
Reconciliation of Non-GAAP Financial Measures
(in thousands)
Three Months Ended
Six Months Ended
June 30
June 30
2020
2019
2020
2019
(Unaudited)
(Unaudited)
Reconciliation of EBITDA and Adjusted EBITDA
Net income
$ 1369
$ - 0
$ 841
$ 253
$ - 0
$ 1967
Loss from discontinued operations net of income tax benefit of $464
- 0
- 0
- 0
1436
- 0
- 0
Gain on sale of asset
- 0
- 0
- 0
- 0
- 0
- 0
Net income from continuing operations
1369
- 0
841
1689
- 0
1967
Interest expense
1
- 0
- 0
1
- 0
13
Investment income
(4)
- 0
(77)
(64)
- 0
(268)
Income tax expense(benefit)
441
- 0
247
579
- 0
(1618)
Depreciation and amortization
684
- 0
653
1363
- 0
1166
EBITDA
2490
- 0
1664
3568
- 0
1260
Share-based compensation
465
- 0
378
967
- 0
721
Non-Recurring Charges (1)
- 0
- 0
44
- 0
- 0
942
CFO Recruiting and Severance
- 0
- 0
- 0
- 0
- 0
- 0
Amortization of Inventory Step-up
- 0
- 0
310
- 0
- 0
412
- 0
- 0
- 0
- 0
- 0
- 0
Adjusted EBITDA
$ 2955
$ - 0
$ 2396
$ 4535
$ - 0
$ 3335
EBITDA Margin Percent on Total Revenues
134
93
100
39
Adjusted EBITDA Margin Percent on Total Revenues
159
134
127
102
Reconciliation of Non-GAAP EPS
Diluted EPS
$ 004
$ 002
$ 001
$ 005
Loss from discontinued operations net of income taxes
Existing Technology amortization missed from 101518-63019
- 0
15560
Amortization catch up from 101518-63019 in July 2019 only
In-process RampD
200000
0
- 0
1650000
4091764
Micron Purchase Amortization Detail - 812019 and forward
Trade Name
150000
36
4167
Customer Relationships
100000
84
1190
Existing Technology
1200000
60
20000
Amortization going forward
In-process RampD
200000
0
- 0
1650000
2535714
General Pho Purchase Amortization Detail - 312019
Trade Name
400000
36
11111
22822
Customer Relationships
600000
180
3333
22834
Existing Technology
7200000
96
75000
22827
In-process RampD
- 0
0
- 0
8200000
8944444
General Pho Inventory Step-up Amortization - 312019
WIP amp Fin Goods
724760
7
103537
Ends 93019
PampL Summary - Luna Innovations
For the Three Months Ending March 31 2020
QTD
QTD
QTD
YTD
YTD
YTD
Actual
Budget
Variance
Actual
Budget
Variance
fav(un-fav)
fav(un-fav)
Revenues
Lightwave
12933344
13366455
(433536)
24487335
25564000
(1077090)
686
Luna Labs
5642348
6075202
(432854)
11229350
11675307
(445957)
314
Total Revenues
18575692
19441657
(866390)
35716685
37239307
(1523047)
Cost of Revenues
Product and Licensing
5181057
5789978
608921
10066386
11082697
1016311
282
TDD
3877888
4448571
570683
7769627
8526736
757109
218
Total Cost of Revenues
9058945
10238549
570683
17836013
19609433
1773420
499
Gross Margin
Product and Licensing - $
7752287
7576477
175810
14420949
14481303
(60354)
Product and Licensing -
60
57
3
59
57
2
TDD - $
1764460
1626631
137829
3459723
3148571
311152
TDD -
31
27
4
31
27
4
Total Gross Margin
9516747
9203108
313639
17880672
17629874
250798
Gross Margin
51
47
4
50
47
3
501
Operating Expenses
Selling General amp Admin
6202338
8155800
1953888
12578977
14477853
1899301
Research Devel amp Engineering
1504800
647122
(857678)
3101865
2798808
(303057)
Total Operating Expenses
7707138
8802922
1096209
15680842
17276661
1595819
439
Operating Income (Loss)
1809609
400186
1409423
2199830
353213
1846617
62
Other Expense (Income)
Interest
930
985
55
1145
2195
1050
00
Investment Income
(4435)
(75000)
(70565)
(63790)
(150000)
(86210)
-02
Tax Expense
440626
118551
(498831)
579203
125253
(630706)
16
Tax Benefit from release of VA
-
-
-
-
-
-
00
Gainloss on foreigh exch
-
-
-
-
-
-
00
Other
3649
-
(3649)
(5236)
-
5236
-00
440770
44536
(396234)
511322
(22552)
(533874)
14
Income from continuing operations
1368839
355650
1805658
1688508
375765
2380491
Income from Disc Ops
Operating Income from Disc Ops
-
-
- 0
-
-
- 0
Gainloss of Asset Sale
-
-
- 0
(1435903)
-
(1435903)
Total Income from Disc Ops
- 0
- 0
- 0
(1435903)
- 0
(1435903)
Net Income (Loss)
1368839
355650
1013189
252605
375765
(123160)
07
Dividend on Preferred
- 0
- 0
- 0
- 0
- 0
- 0
Net Income (Loss) available to Common Shareholders
1368839
355650
1013189
252605
375765
(123160)
07
Depreciation
244214
491046
From Cash Flow
Amortization
439787
872410
From Cash Flow
Stock Compensation
465109
966932
From Cash Flow
Acquisition Costs
- 0
- 0
Amortization of Inventory Step-up
- 0
- 0
CFO Recruiting amp Severance
- 0
- 0
Treasury Stock Activity
63020
Stock Buyback - Held with Northland
Trade date
Settlement Date
of Shares
Avg Price
Commission
Trade date Total $
Number of Days
Weighted Avg
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
= Trades Not Settled
$000
$000
$000
$000
YTD Avg
0
0
Trade date
Settlement Date
of Shares
Avg Price
Commission
Trade date Total $
Number of Days
Weighted Avg
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
QTD Avg
0
0
0
0
2016 Amounts under program
205500
$24880840
$25086340
2017 Amounts under program
433179
$75649353
$76082532
2018 Amounts under program
132450
$30604099
$30736549
2019 Amounts under program
333953
$198663889
$199999701
Total
110508200
329798181
331905122
For Q Disclosure
Management Buyback - Held with AST
Date
Shares
YTD days os
YTD weighted avg
QTD days os
QTD Weighted Avg
Month
Quarter
Year
52720
Garrett James
6500
35
1250
35
2500
Jan
31
- 0
- 0
52720
Graeff Scott
17450
35
3356
35
6712
Feb
29
- 0
- 0
52720
Soller Brian
9000
35
1731
35
3462
Mar
31
91
91
44013
- 0
91
- 0
Apr
30
- 0
- 0
44013
- 0
91
- 0
May
31
- 0
- 0
44013
- 0
91
- 0
Jun
30
91
182
44013
- 0
91
- 0
Jul
31
- 0
- 0
44013
- 0
91
- 0
Aug
31
- 0
- 0
44013
- 0
91
- 0
Sept
30
92
274
- 0
- 0
Oct
31
- 0
- 0
- 0
- 0
Nov
30
- 0
- 0
- 0
- 0
Dec
31
92
366
32950
6337
12673
BOD buyback
YTD
$000
$000
44013
- 0
Qtr
$000
$000
44013
- 0
Luna
Date
CloseLast
1220
738
Average Close Price
1320
718
Year-To-Date
$ 696
1620
73
Quarter-To-Date
$ 652
1720
735
1820
756
1920
777
11020
787
11320
803
11420
804
11520
832
11620
85
11720
845
12120
827
12220
833
12320
849
12420
844
12720
828
12820
856
12920
85
13020
846
13120
819
2320
825
2420
821
2520
82
2620
819
2720
837
21020
85
21120
858
21220
904
21320
895
21420
897
21820
891
21920
891
22020
907
22120
923
22420
861
22520
745
22620
759
22720
707
22820
67
3220
713
3320
693
3420
719
3520
689
3620
75
3920
672
31020
66
31120
599
31220
521
31320
522
31620
491
31720
553
31820
473
31920
487
32020
48
32320
509
32420
543
32520
582
32620
617
32720
583
33020
623
33120
615
4120
585
4220
583
4320
572
4620
607
4720
605
4820
631
4920
665
41320
656
41420
683
41520
711
41620
734
41720
727
42020
73
42120
672
42220
683
42320
691
42420
715
42720
721
42820
74
42920
777
43020
763
5120
724
5420
751
5520
762
5620
76
5720
749
5820
782
51120
704
51220
705
51320
62
51420
578
51520
537
51820
591
51920
625
52020
61
52120
6
52220
609
52620
615
52720
62
52820
609
52920
61
6120
629
6220
628
6320
653
6420
649
6520
663
6820
667
6920
635
61020
643
61120
583
61220
606
61520
625
61620
631
61720
615
61820
599
61920
601
62220
616
62320
624
62420
615
62520
615
62620
571
62920
585
63020
584
Qtr
1
2
3
4
Options
Options
Aggregate Strike Price
Intrinsic Value
Outstanding
Exercisable
Outstanding
Exercisable
Outstanding
Exercisable
Luna
2418245
1309606
$6482283
$2709686
7767068
4952824
2418245
1309606
6482283
2709686
7767068
4952824
Warrants Aaron Chase Aaron ChaseCarilion exercised all warrants in Q2 and Q3 2018
0
0
0
0
2418245
1309606
6482283
2709686
Average Strike Price
$ 268
$ 207
Pull Cancelled for whole year
Cancels
Q1
35659 Aaron Chase Aaron Chase22999 of canceled shares didnrsquot show up until Q2-20 report
Aaron Chase Aaron ChaseCarilion exercised all warrants in Q2 and Q3 2018
$ 364
12990180
Outstanding 12312019
3160397
Q2
13124
$ 211
2769912
Q3
- 0
ERRORDIV0
- 0
Grants
20000
Q4
- 0
ERRORDIV0
- 0
Exercised
(662965)
48783
$ 323
15760092
Canceled
(48783)
Corrected Termed EEs from 2019
(50404)
These were corrected in June 2020
2418245
Remaining life
Options
Avg Life
- 0
Outstanding
Luna
2418245
644
Exercisable
1309606
474
Remaining service
Luna
2418245
See awards outstanding by grant price range report and Disclosure report for information on this tab
Luna Innovations
Additional Notes
EPS Calculations
During Jan-2019 and 2020 Management was awarded Performance Based Grants and Time Based Grants
63020
The Performance Based Grants vest after 3 years and are issued only if the performance is achieved
The Time Based Grants vest each year for 3 years Grants are issued once vested each year
Yearly BOD Grants
Basic EPS
DSU deferred stock units vest in a year but do not become issued until the Director leaves the Board This started in 2018
Net Income (loss) Per Share from Continuing Operations
YTD
Diluted
QTD
Diluted
DSU awards vest in May 2021 and will be added to the middle section of the EPS in May 2021
Net Income from Continuing Operations
1688508
1368839
Rich Roedel
8877
704
62500
Common Shares Outstanding
30484797
30589249
Barry Phelps
5326
704
37500
$ 006
$ 005
$ 004
$ 004
Leigh Anderson
5326
704
37500
Mary Beth Vitale
5326
704
37500
Net income (loss) Per Share attributable to common shareholders
RSU restricted stock units vest and are issued in a year and will be added to the bottom of the EPS in May 2021
Net Income (Loss) available to Shareholders
252605
1368839
Don Pastor
5326
704
37500
Common Shares Outstanding
30484797
30589249
Gary Spiegel
5326
704
37500
$ 001
$ 001
$ 004
$ 004
Net income (loss) Per Share from Discontinued Operations
Net Income from Discontinued Operations
(1435903)
- 0
Common Shares Outstanding
30484797
30589249
$ (005)
$ (004)
$ - 0
$ - 0
Diluted EPS
Net Income(Loss) available to SHs
252605
1368839
Common Shares Outstanding
30484797
30589249
Common Stock Equivalent
2010153
1876873
$ 001
- 0 Grant Thornton LLP Grant Thornton LLPAs earnings from continuing operations are negative (loss) basic and diluted EPS equal one another
$ 004 Grant Thornton LLP Grant Thornton LLPAs earnings from continuing operations are negative (loss) basic and diluted EPS equal one another
- 0 Grant Thornton LLP Grant Thornton LLPAs earnings from continuing operations are negative (loss) basic and diluted EPS equal one another
Non-GAAP Diluted EPS
Net income (loss) Per Share attributable to common shareholders
Net Income (Loss) available to Shareholders
252605
1368839
Loss from discontinued operations
1435903
- 0
Share-based compensation
966932
465109
Amortization of acquired intangibles
344405
688810
Acquisition related costs
- 0
- 0
Amortization of Inventory Step-up
- 0
- 0
Common Shares Outstanding
30484797
30589249
Common Stock Equivalent
2010153
1876873
$ 009
$ 008
YTD
QTD
Total issued shares
32470276
Average Close Price
$ 696
$ 652
Total treasury
1672741
Shares Outstanding
30797535
Net change in denominator
1404924 Kelly Bewick Aaron Chasesee Dilution (stock option) dilutive tab
1264984
BOD fees paid in DSUs Aaron Chase Aaron ChaseFrom Equity Award Transactions Report
Month
Quarter
Year
Balance at 112019 - DSU outstanding
591457
591457
Jan
31
Issued during Q1 2020
7114
7114
Feb
29
Issued during Q2 2020
3947
7894
Mar
31
91
91
Annual grant DSU vested 5112020
10521 KBSResults KBSResultsEnter 2019 DSU annual grant when vest in 2020 (probably May) you do not need to enter annual RSU because it will be issued in AST
21042
Apr
30
Deferred Equity Issuance 6012020
(7809) KBSResults Aaron ChaseM Wise and J Williamson retired from the BoD in May 2020 Wise Deferred Comp will be issued every June 1 for 10 years Williamson Deferred Comp will be issued every June 1 for 5 years
Grant Thornton LLP Grant Thornton LLPAs earnings from continuing operations are negative (loss) basic and diluted EPS equal one another
Grant Thornton LLP Grant Thornton LLPAs earnings from continuing operations are negative (loss) basic and diluted EPS equal one another
(15619)
May
31
Issued during Q3 2020
- 0
- 0
Jun
30
91
182
Issued during Q4 2020
- 0
- 0
Jul
31
Aug
31
Sept
30
92
274
Oct
31
Totals (Antidilutive)
2010153
1876873
Nov
30
Dec
31
92
366
Shares Outstanding as of 112020
31788896
As Of Date
Transaction
Reason
Name
Shares Issued
Shares Retired
Running Total
01012020
Normal
Balance Roll Forward
- 0
- 0
31788896
01082020
Normal
Option Exercise
Williamson John
12000000
- 0
31908896
01082020
Normal
Retirement - Vested Restriced Stock
Exer Options
Williamson John
- 0
2000000
31888896
01102020
Normal
Option Exercise
Roedel Rich
6000000
- 0
31948896
01142020
Normal
2019 Time-Based RSU Vesting
Messick Dale
666700
- 0
31955563
01142020
Normal
2019 Time-Based RSU Vesting
Graeff Scott
3066700
- 0
31986230
01142020
Normal
2019 Time-Based RSU Vesting
Soller Brian
1066700
- 0
31996897
01142020
Normal
2019 Time-Based RSU Vesting
Garrett James
766700
- 0
32004564
01142020
Normal
2019 Time-Based RSU Retirement
Taxes
Graeff Scott
- 0
920000
31995364
01142020
Normal
2019 Time-Based RSU Retirement
Taxes
Soller Brian
- 0
320000
31992164
01142020
Normal
2019 Time-Based RSU Retirement
Taxes
Garrett James
- 0
230000
31989864
01142020
Normal
Option Exercise
Burris Kevin
100000
- 0
31990864
01292020
Normal
Option Exercise
Carr Dustin
3212300
- 0
32022987
01272020
Normal
Option Exercise
Chen James
334000
- 0
32026327
02192020
Normal
Option Exercise
McPherson Daniel
534800
- 0
32031675
03122020
Normal
Option Exercise
Haber Todd
2500000
- 0
32056675
03122020
Normal
Option Exercise
Graver Thomas
4558100
- 0
32102256
03122020
Normal
Option Exercise
Baez Michael
911200
- 0
32111368
03062020
Normal
Option Exercise
Farooqui Salvan
1500000
- 0
32126368
05122020
Normal
Option Exercise
Baez Michael
950000
- 0
32135868
05142020
Normal
Option Exercise
Haber Todd
4300000
- 0
32178868
05142020
Normal
Option Exercise
Graver Thomas
4746100
- 0
32226329
05112020
Normal
Annual Equity Grant Vesting-BoD
Pastor Don
580000
- 0
32232129
05112020
Normal
Annual Equity Grant Vesting-BoD
Williamson John
580000
- 0
32237929
06012020
Normal
Deferred Stock Issuance-BoD
Wise Mike
980900
- 0
32247738
06012020
Normal
Deferred Stock Issuance-BoD
Williamson John
3756800
32285306
06112020
Normal
Option Exercise
Wise Mike
24000000
32525306
06112020
Normal
Retirement - Vested Stock
Exer Options
Wise Mike
6153000
32463776
06082020
Normal
Option Exercise
Pruzan Michael
400000
32467776
06292020
Normal
Option Exercise
Farooqui Salvan
250000
32470276
Date Issued
Balance Outstanding
Number of Days
Weighted Avg
Treasury Shares Weighted Average
Year-to-Date
YTD
QTD
1120
31788896
182
31788896
Graeff July 2
115000
115000
1820
31908896
175
115385
Q2 2015
29925
29925
1820
31888896
175
(19231)
2014
22725
22725
11020
31948896
173
57033
2016 Mgmt buyback
73675
73675
11420
31955563
169
6191
2016 repurchase program
205500
205500
11420
31986230
169
28477
2017 Mgmt buyback
90900
90900
11420
31996897
169
9905
2017 BOD buyback
100000
100000
11420
32004564
169
7119
2017 repurchase program
433179
433179
11420
31995364
169
(8543)
2018 repurchase program
132450
132450
11420
31992164
169
(2971)
2018 Mgmt buyback
49751
49751
11420
31989864
169
(2136)
2019 Mgmt buyback
52733
52733
11420
31990864
169
929
2019 repurchase program
333953
333953
12920
32022987
154
27181
2020 Mgmt buyback
6337
12673
12720
32026327
156
2863
21920
32031675
133
3908
164612764
165246418
31220
32056675
111
15247
31220
32102256
111
27799
31220
32111368
111
5557
567659
3620
32126368
117
9643
Treasury on AST
567664
51220
32135868
50
2610
Diff
(5)
51420
32178868
48
11341
51420
32226329
48
12517
51120
32232129
51
1625
51120
32237929
51
1625
6120
32247738
30
1617
6120
32285306
30
6193
61120
32525306
20
26374
61120
32463776
20
(6762)
6820
32467776
23
505
62920
32470276
2
27
YTD Average Shares Outstanding
32130925
Quarter-to Date
112020
31788896
91
31788896
1820
31908896
91
120000
1820
31888896
91
(20000)
11020
31948896
91
60000
11420
31955563
91
6667
11420
31986230
91
30667
11420
31996897
91
10667
11420
32004564
91
7667
11420
31995364
91
(9200)
11420
31992164
91
(3200)
11420
31989864
91
(2300)
11420
31990864
91
1000
12920
32022987
91
32123
12720
32026327
91
3340
21920
32031675
91
5348
31220
32056675
91
25000
31220
32102256
91
45581
31220
32111368
91
9112
3620
32126368
91
15000
51220
32135868
50
5220
51420
32178868
48
22681
51420
32226329
48
25034
51120
32232129
51
3251
51120
32237929
51
3251
6120
32247738
30
3234
6120
32285306
30
12385
61120
32525306
20
52747
61120
32463776
20
(13523)
6820
32467776
23
1011
62920
32470276
2
55
QTD Average Shares Outstanding
32241713
C1
TA to the Summary tab
C2
TA to the Avg Stock Price tab
C3
TA to the Options Outstanding YTD tab
C4
TA to the Equity Rollforward WP
C5
TA to the AST Report in the Equity Rollfoward WP
C6
TA to the Options Outstanding QTD tab
C7
Custom 7
C8
See comment box
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
21
($20)
$03
$95
FY16 FY17 FY18 FY19 FY20
Adjusted EBITDA1 2
(millions)
$31
$296 $331
$429
$705
FY16 FY17 FY18 FY19 FY20
Revenue1
(millions)
$357
Strong Financial Results
1 Based on managementrsquos estimates of the impact from the divestiture of Optoelectronics Includes the acquisitions of Micron Optics and General Photonics2Adj EBITDA is a non-GAAP measure Reconciliation of comparable GAAP measures to non-GAAP measures are included in the appendix to this presentation
FY20 Guidance$810 - $830
FY20 Guidance $100 to $120
$45
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
22
A Flexible Balance Sheet and Strong Cash Position
Strong balance sheet on June 30 2020
$912M in total assets
bull $265M in cash and cash equivalents
bull $448M in working capital
Access to $10M revolving credit facility if needed
Continued focus on working capital and reinvestment in business in order to generate long-term sustainable growth
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
23
2020 Financial Outlook
Maintaining FY2020 outlook tightening our range
Total revenues of $81M to $83M
Adjusted EBITDA1 of $10M to $12M
1 Adj EBITDA is a non-GAAP measure Reconciliation of comparable GAAP measures to non-GAAP measures are included in the appendix to this presentation The outlook above does not include any future acquisitions divestitures or unanticipated events
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
24
Luna ndash Enabling the Future with Fiber
Proprietary measurement technology offering unprecedented combination of resolution accuracy and speed
Customers in attractive markets Military and Defense Communications Infrastructure Energy and Automotive
Positioned to take advantage of trends such as vehicle light-weighting and increasing demands on data centers and broadband capacity
Adequately capitalized to fund growth
Long-tenured experienced executive team board
Corporate culture of innovation and integrity
Overview
Appendix
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
26
Reconciliation of Net Income to Adjusted EBITDA
(1) Non-recurring charges consist of transaction-related expenses related to the acquisition of General Photonics
2020 2019 2020 2019
Reconciliation of EBITDA and Adjusted EBITDANet income 1369$ 841$ 253$ 1967$ Loss from discontinued operations net of income tax benefit of $464 - - 1436 -
Net income from continuing operations 1369 841 1689 1967 Interest expense 1 - 1 13 Investment income (4) (77) (64) (268) Income tax expense(benefit) 441 247 579 (1618) Depreciation and amortization 684 653 1363 1166
Reconciliation of Net Income to Adjusted EBITDA Full Year
(1) Non-recurring charges include the following 2017) CEO separation costs and other share-based compensation 2018) Transaction-related expenses associated with the acquisition of Micron Optics Inc 2019) Transaction related expenses and inventory step-up amortization relate to General Photonics acquisition and CFO transition expenses
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
28
New Segment Quarterly Results (in thousands)
March 31 2019 June 30 2019 Sep 30 2019 A Dec 31 2019 March 31 2020 June 30 2020
Total revenues 14833 17814 18389 19480 17141 18576
Cost of revenuesLightwave 4280 5334 5449 5070 4885 5181 Luna Labs 3785 3728 3665 4022 3892 3878
Total cost of revenues 8065 9062 9114 9092 8777 9059
Gross Profit 6768 8752 9275 10388 8364 9517
Operating expenseSelling general and administrative 6207 6003 5745 6416 6377 6202 Research development and engineering 1458 1735 2048 2255 1597 1505
Total operating expense 7665 7738 7793 8671 7974 7707
Operating income (897)$ 1014$ 1482$ 1717$ 390$ 1810$
A The Company revised its results for the three months ended September 30 2019 The Company has concluded these adjustments are not material individually or in the aggregate
Three Months Ended
Scott A Graeff President and CEO
Safe Harbor
Luna ndash Enabling the Future with Fiber
Luna is a global company
Luna has a clear vision and established history
Compelling business model with strong growth potential
Lightwave 2019 revenue1 snapshot
Luna Overview
Where Does Luna Play
Sensing
Sensing Short-range high-resolution
Sensing long-range high-speed
Sensing Material thickness
Comms Test
Comms Test Components
Comms Test Short-haul network
Luna Labs
2Q FY20 Results
Second-quarter 2020 Key Financial Results
Second-quarter 2020 and Other Recent Accomplishments
Slide Number 21
A Flexible Balance Sheet and Strong Cash Position
2020 Financial Outlook
Luna ndash Enabling the Future with Fiber
Appendix
Reconciliation of Net Income to Adjusted EBITDA
Reconciliation of Net Income to Adjusted EBITDA Full Year
New Segment Quarterly Results
(in thousands)
Three Months Ended
December 31 2018
A
March 31 2019
C
June 30 2019
September 30 2019
December 31 2019
March 31 2020
June 30 2020
Revenues
Lightwave
$ 11345
$ 10221
$ 12523
$ 13120
$ 13988
$ 11554
12933
Luna Labs
5548
6641
5291
5301
5492
5587
5642
Total revenues
16893
16862
17814
18421
19480
17141
18576
Cost of revenues
Lightwave
4002
3836
5334
5471
5070
4885
5181
Luna Labs
4268
4816
3728
3665
4022
3892
3878
Total cost of revenues
8270
8652
9062
9136
9092
8777
9059
Gross Profit
8623
8210
8752
9285
10388
8364
9517
Operating expense
Selling general and administrative
6394
7165
6003
5754
6415
6377
6202
Research development and engineering
1894
1708
1735
2047
2255
1597
1505
Total operating expense
8288
8873
7738
7801
8670
7974
7707
Operating income
$ 335
$ (663)
$ 1014
$ 1484
$ 1718
$ 390
$ 1810
Historical - Hidden
A
Includes $751000 of costs associated with the acquisition of Micron Optics
B
Unaudited pro forma financials assumes the General Photonics business was acquired on January 1 2019
C
Includes $898000 of costs associated with the acquisition of General Photonics
Year Ended December 31
(unaudited)
2016
2017
2018
2019
Reconciliation of EBITDA and Adjusted EBITDA
Net (loss)income
$ (2370)
$ 14615
$ 11004
$ 5343
Less income from discontinued operations net of income taxes
300
15866
9766
- 0
Loss from discontinued operations net of income tax benefit of $464
- 0
- 0
- 0
- 0
Net income from continuing operations
(2670)
(1251)
1238
5343
Interest expense
319
217
124
16
Investment income
- 0
- 0
(549)
(394)
Income tax (benefit)expense
(135)
(1148)
48
(1654)
Depreciation and amortization
1466
1137
908
2503
EBITDA
(1020)
(1045)
1769
5814
Share-based compensation
860
715
628
1544
Non-Recurring Charges (1)
- 0
596
751
1390
Amortization of Inventory Step-up
- 0
- 0
- 0
725
Adjusted EBITDA
$ (160)
$ 266
$ 3148
$ 9473
1
Non-recurring charges include the following 2017) CEO separation costs and other share-based compensation 2018) Transaction-related expenses associated with the acquisition of Micron Optics Inc 2019) Transaction related expenses and inventory step-up amortization relate to General Photonics acquisition and CFO transition expenses
Luna Innovations Incorporated
Reconciliation of Non-GAAP Financial Measures
(in thousands)
Three Months Ended
Six Months Ended
June 30
June 30
2020
2019
2020
2019
(Unaudited)
(Unaudited)
Reconciliation of EBITDA and Adjusted EBITDA
Net income
$ 1369
$ - 0
$ 841
$ 253
$ - 0
$ 1967
Loss from discontinued operations net of income tax benefit of $464
- 0
- 0
- 0
1436
- 0
- 0
Gain on sale of asset
- 0
- 0
- 0
- 0
- 0
- 0
Net income from continuing operations
1369
- 0
841
1689
- 0
1967
Interest expense
1
- 0
- 0
1
- 0
13
Investment income
(4)
- 0
(77)
(64)
- 0
(268)
Income tax expense(benefit)
441
- 0
247
579
- 0
(1618)
Depreciation and amortization
684
- 0
653
1363
- 0
1166
EBITDA
2490
- 0
1664
3568
- 0
1260
Share-based compensation
465
- 0
378
967
- 0
721
Non-Recurring Charges (1)
- 0
- 0
44
- 0
- 0
942
CFO Recruiting and Severance
- 0
- 0
- 0
- 0
- 0
- 0
Amortization of Inventory Step-up
- 0
- 0
310
- 0
- 0
412
- 0
- 0
- 0
- 0
- 0
- 0
Adjusted EBITDA
$ 2955
$ - 0
$ 2396
$ 4535
$ - 0
$ 3335
EBITDA Margin Percent on Total Revenues
134
93
100
39
Adjusted EBITDA Margin Percent on Total Revenues
159
134
127
102
Reconciliation of Non-GAAP EPS
Diluted EPS
$ 004
$ 002
$ 001
$ 005
Loss from discontinued operations net of income taxes
Existing Technology amortization missed from 101518-63019
- 0
15560
Amortization catch up from 101518-63019 in July 2019 only
In-process RampD
200000
0
- 0
1650000
4091764
Micron Purchase Amortization Detail - 812019 and forward
Trade Name
150000
36
4167
Customer Relationships
100000
84
1190
Existing Technology
1200000
60
20000
Amortization going forward
In-process RampD
200000
0
- 0
1650000
2535714
General Pho Purchase Amortization Detail - 312019
Trade Name
400000
36
11111
22822
Customer Relationships
600000
180
3333
22834
Existing Technology
7200000
96
75000
22827
In-process RampD
- 0
0
- 0
8200000
8944444
General Pho Inventory Step-up Amortization - 312019
WIP amp Fin Goods
724760
7
103537
Ends 93019
PampL Summary - Luna Innovations
For the Three Months Ending March 31 2020
QTD
QTD
QTD
YTD
YTD
YTD
Actual
Budget
Variance
Actual
Budget
Variance
fav(un-fav)
fav(un-fav)
Revenues
Lightwave
12933344
13366455
(433536)
24487335
25564000
(1077090)
686
Luna Labs
5642348
6075202
(432854)
11229350
11675307
(445957)
314
Total Revenues
18575692
19441657
(866390)
35716685
37239307
(1523047)
Cost of Revenues
Product and Licensing
5181057
5789978
608921
10066386
11082697
1016311
282
TDD
3877888
4448571
570683
7769627
8526736
757109
218
Total Cost of Revenues
9058945
10238549
570683
17836013
19609433
1773420
499
Gross Margin
Product and Licensing - $
7752287
7576477
175810
14420949
14481303
(60354)
Product and Licensing -
60
57
3
59
57
2
TDD - $
1764460
1626631
137829
3459723
3148571
311152
TDD -
31
27
4
31
27
4
Total Gross Margin
9516747
9203108
313639
17880672
17629874
250798
Gross Margin
51
47
4
50
47
3
501
Operating Expenses
Selling General amp Admin
6202338
8155800
1953888
12578977
14477853
1899301
Research Devel amp Engineering
1504800
647122
(857678)
3101865
2798808
(303057)
Total Operating Expenses
7707138
8802922
1096209
15680842
17276661
1595819
439
Operating Income (Loss)
1809609
400186
1409423
2199830
353213
1846617
62
Other Expense (Income)
Interest
930
985
55
1145
2195
1050
00
Investment Income
(4435)
(75000)
(70565)
(63790)
(150000)
(86210)
-02
Tax Expense
440626
118551
(498831)
579203
125253
(630706)
16
Tax Benefit from release of VA
-
-
-
-
-
-
00
Gainloss on foreigh exch
-
-
-
-
-
-
00
Other
3649
-
(3649)
(5236)
-
5236
-00
440770
44536
(396234)
511322
(22552)
(533874)
14
Income from continuing operations
1368839
355650
1805658
1688508
375765
2380491
Income from Disc Ops
Operating Income from Disc Ops
-
-
- 0
-
-
- 0
Gainloss of Asset Sale
-
-
- 0
(1435903)
-
(1435903)
Total Income from Disc Ops
- 0
- 0
- 0
(1435903)
- 0
(1435903)
Net Income (Loss)
1368839
355650
1013189
252605
375765
(123160)
07
Dividend on Preferred
- 0
- 0
- 0
- 0
- 0
- 0
Net Income (Loss) available to Common Shareholders
1368839
355650
1013189
252605
375765
(123160)
07
Depreciation
244214
491046
From Cash Flow
Amortization
439787
872410
From Cash Flow
Stock Compensation
465109
966932
From Cash Flow
Acquisition Costs
- 0
- 0
Amortization of Inventory Step-up
- 0
- 0
CFO Recruiting amp Severance
- 0
- 0
Treasury Stock Activity
63020
Stock Buyback - Held with Northland
Trade date
Settlement Date
of Shares
Avg Price
Commission
Trade date Total $
Number of Days
Weighted Avg
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
= Trades Not Settled
$000
$000
$000
$000
YTD Avg
0
0
Trade date
Settlement Date
of Shares
Avg Price
Commission
Trade date Total $
Number of Days
Weighted Avg
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
QTD Avg
0
0
0
0
2016 Amounts under program
205500
$24880840
$25086340
2017 Amounts under program
433179
$75649353
$76082532
2018 Amounts under program
132450
$30604099
$30736549
2019 Amounts under program
333953
$198663889
$199999701
Total
110508200
329798181
331905122
For Q Disclosure
Management Buyback - Held with AST
Date
Shares
YTD days os
YTD weighted avg
QTD days os
QTD Weighted Avg
Month
Quarter
Year
52720
Garrett James
6500
35
1250
35
2500
Jan
31
- 0
- 0
52720
Graeff Scott
17450
35
3356
35
6712
Feb
29
- 0
- 0
52720
Soller Brian
9000
35
1731
35
3462
Mar
31
91
91
44013
- 0
91
- 0
Apr
30
- 0
- 0
44013
- 0
91
- 0
May
31
- 0
- 0
44013
- 0
91
- 0
Jun
30
91
182
44013
- 0
91
- 0
Jul
31
- 0
- 0
44013
- 0
91
- 0
Aug
31
- 0
- 0
44013
- 0
91
- 0
Sept
30
92
274
- 0
- 0
Oct
31
- 0
- 0
- 0
- 0
Nov
30
- 0
- 0
- 0
- 0
Dec
31
92
366
32950
6337
12673
BOD buyback
YTD
$000
$000
44013
- 0
Qtr
$000
$000
44013
- 0
Luna
Date
CloseLast
1220
738
Average Close Price
1320
718
Year-To-Date
$ 696
1620
73
Quarter-To-Date
$ 652
1720
735
1820
756
1920
777
11020
787
11320
803
11420
804
11520
832
11620
85
11720
845
12120
827
12220
833
12320
849
12420
844
12720
828
12820
856
12920
85
13020
846
13120
819
2320
825
2420
821
2520
82
2620
819
2720
837
21020
85
21120
858
21220
904
21320
895
21420
897
21820
891
21920
891
22020
907
22120
923
22420
861
22520
745
22620
759
22720
707
22820
67
3220
713
3320
693
3420
719
3520
689
3620
75
3920
672
31020
66
31120
599
31220
521
31320
522
31620
491
31720
553
31820
473
31920
487
32020
48
32320
509
32420
543
32520
582
32620
617
32720
583
33020
623
33120
615
4120
585
4220
583
4320
572
4620
607
4720
605
4820
631
4920
665
41320
656
41420
683
41520
711
41620
734
41720
727
42020
73
42120
672
42220
683
42320
691
42420
715
42720
721
42820
74
42920
777
43020
763
5120
724
5420
751
5520
762
5620
76
5720
749
5820
782
51120
704
51220
705
51320
62
51420
578
51520
537
51820
591
51920
625
52020
61
52120
6
52220
609
52620
615
52720
62
52820
609
52920
61
6120
629
6220
628
6320
653
6420
649
6520
663
6820
667
6920
635
61020
643
61120
583
61220
606
61520
625
61620
631
61720
615
61820
599
61920
601
62220
616
62320
624
62420
615
62520
615
62620
571
62920
585
63020
584
Qtr
1
2
3
4
Options
Options
Aggregate Strike Price
Intrinsic Value
Outstanding
Exercisable
Outstanding
Exercisable
Outstanding
Exercisable
Luna
2418245
1309606
$6482283
$2709686
7767068
4952824
2418245
1309606
6482283
2709686
7767068
4952824
Warrants Aaron Chase Aaron ChaseCarilion exercised all warrants in Q2 and Q3 2018
0
0
0
0
2418245
1309606
6482283
2709686
Average Strike Price
$ 268
$ 207
Pull Cancelled for whole year
Cancels
Q1
35659 Aaron Chase Aaron Chase22999 of canceled shares didnrsquot show up until Q2-20 report
Aaron Chase Aaron ChaseCarilion exercised all warrants in Q2 and Q3 2018
$ 364
12990180
Outstanding 12312019
3160397
Q2
13124
$ 211
2769912
Q3
- 0
ERRORDIV0
- 0
Grants
20000
Q4
- 0
ERRORDIV0
- 0
Exercised
(662965)
48783
$ 323
15760092
Canceled
(48783)
Corrected Termed EEs from 2019
(50404)
These were corrected in June 2020
2418245
Remaining life
Options
Avg Life
- 0
Outstanding
Luna
2418245
644
Exercisable
1309606
474
Remaining service
Luna
2418245
See awards outstanding by grant price range report and Disclosure report for information on this tab
Luna Innovations
Additional Notes
EPS Calculations
During Jan-2019 and 2020 Management was awarded Performance Based Grants and Time Based Grants
63020
The Performance Based Grants vest after 3 years and are issued only if the performance is achieved
The Time Based Grants vest each year for 3 years Grants are issued once vested each year
Yearly BOD Grants
Basic EPS
DSU deferred stock units vest in a year but do not become issued until the Director leaves the Board This started in 2018
Net Income (loss) Per Share from Continuing Operations
YTD
Diluted
QTD
Diluted
DSU awards vest in May 2021 and will be added to the middle section of the EPS in May 2021
Net Income from Continuing Operations
1688508
1368839
Rich Roedel
8877
704
62500
Common Shares Outstanding
30484797
30589249
Barry Phelps
5326
704
37500
$ 006
$ 005
$ 004
$ 004
Leigh Anderson
5326
704
37500
Mary Beth Vitale
5326
704
37500
Net income (loss) Per Share attributable to common shareholders
RSU restricted stock units vest and are issued in a year and will be added to the bottom of the EPS in May 2021
Net Income (Loss) available to Shareholders
252605
1368839
Don Pastor
5326
704
37500
Common Shares Outstanding
30484797
30589249
Gary Spiegel
5326
704
37500
$ 001
$ 001
$ 004
$ 004
Net income (loss) Per Share from Discontinued Operations
Net Income from Discontinued Operations
(1435903)
- 0
Common Shares Outstanding
30484797
30589249
$ (005)
$ (004)
$ - 0
$ - 0
Diluted EPS
Net Income(Loss) available to SHs
252605
1368839
Common Shares Outstanding
30484797
30589249
Common Stock Equivalent
2010153
1876873
$ 001
- 0 Grant Thornton LLP Grant Thornton LLPAs earnings from continuing operations are negative (loss) basic and diluted EPS equal one another
$ 004 Grant Thornton LLP Grant Thornton LLPAs earnings from continuing operations are negative (loss) basic and diluted EPS equal one another
- 0 Grant Thornton LLP Grant Thornton LLPAs earnings from continuing operations are negative (loss) basic and diluted EPS equal one another
Non-GAAP Diluted EPS
Net income (loss) Per Share attributable to common shareholders
Net Income (Loss) available to Shareholders
252605
1368839
Loss from discontinued operations
1435903
- 0
Share-based compensation
966932
465109
Amortization of acquired intangibles
344405
688810
Acquisition related costs
- 0
- 0
Amortization of Inventory Step-up
- 0
- 0
Common Shares Outstanding
30484797
30589249
Common Stock Equivalent
2010153
1876873
$ 009
$ 008
YTD
QTD
Total issued shares
32470276
Average Close Price
$ 696
$ 652
Total treasury
1672741
Shares Outstanding
30797535
Net change in denominator
1404924 Kelly Bewick Aaron Chasesee Dilution (stock option) dilutive tab
1264984
BOD fees paid in DSUs Aaron Chase Aaron ChaseFrom Equity Award Transactions Report
Month
Quarter
Year
Balance at 112019 - DSU outstanding
591457
591457
Jan
31
Issued during Q1 2020
7114
7114
Feb
29
Issued during Q2 2020
3947
7894
Mar
31
91
91
Annual grant DSU vested 5112020
10521 KBSResults KBSResultsEnter 2019 DSU annual grant when vest in 2020 (probably May) you do not need to enter annual RSU because it will be issued in AST
21042
Apr
30
Deferred Equity Issuance 6012020
(7809) KBSResults Aaron ChaseM Wise and J Williamson retired from the BoD in May 2020 Wise Deferred Comp will be issued every June 1 for 10 years Williamson Deferred Comp will be issued every June 1 for 5 years
Grant Thornton LLP Grant Thornton LLPAs earnings from continuing operations are negative (loss) basic and diluted EPS equal one another
Grant Thornton LLP Grant Thornton LLPAs earnings from continuing operations are negative (loss) basic and diluted EPS equal one another
(15619)
May
31
Issued during Q3 2020
- 0
- 0
Jun
30
91
182
Issued during Q4 2020
- 0
- 0
Jul
31
Aug
31
Sept
30
92
274
Oct
31
Totals (Antidilutive)
2010153
1876873
Nov
30
Dec
31
92
366
Shares Outstanding as of 112020
31788896
As Of Date
Transaction
Reason
Name
Shares Issued
Shares Retired
Running Total
01012020
Normal
Balance Roll Forward
- 0
- 0
31788896
01082020
Normal
Option Exercise
Williamson John
12000000
- 0
31908896
01082020
Normal
Retirement - Vested Restriced Stock
Exer Options
Williamson John
- 0
2000000
31888896
01102020
Normal
Option Exercise
Roedel Rich
6000000
- 0
31948896
01142020
Normal
2019 Time-Based RSU Vesting
Messick Dale
666700
- 0
31955563
01142020
Normal
2019 Time-Based RSU Vesting
Graeff Scott
3066700
- 0
31986230
01142020
Normal
2019 Time-Based RSU Vesting
Soller Brian
1066700
- 0
31996897
01142020
Normal
2019 Time-Based RSU Vesting
Garrett James
766700
- 0
32004564
01142020
Normal
2019 Time-Based RSU Retirement
Taxes
Graeff Scott
- 0
920000
31995364
01142020
Normal
2019 Time-Based RSU Retirement
Taxes
Soller Brian
- 0
320000
31992164
01142020
Normal
2019 Time-Based RSU Retirement
Taxes
Garrett James
- 0
230000
31989864
01142020
Normal
Option Exercise
Burris Kevin
100000
- 0
31990864
01292020
Normal
Option Exercise
Carr Dustin
3212300
- 0
32022987
01272020
Normal
Option Exercise
Chen James
334000
- 0
32026327
02192020
Normal
Option Exercise
McPherson Daniel
534800
- 0
32031675
03122020
Normal
Option Exercise
Haber Todd
2500000
- 0
32056675
03122020
Normal
Option Exercise
Graver Thomas
4558100
- 0
32102256
03122020
Normal
Option Exercise
Baez Michael
911200
- 0
32111368
03062020
Normal
Option Exercise
Farooqui Salvan
1500000
- 0
32126368
05122020
Normal
Option Exercise
Baez Michael
950000
- 0
32135868
05142020
Normal
Option Exercise
Haber Todd
4300000
- 0
32178868
05142020
Normal
Option Exercise
Graver Thomas
4746100
- 0
32226329
05112020
Normal
Annual Equity Grant Vesting-BoD
Pastor Don
580000
- 0
32232129
05112020
Normal
Annual Equity Grant Vesting-BoD
Williamson John
580000
- 0
32237929
06012020
Normal
Deferred Stock Issuance-BoD
Wise Mike
980900
- 0
32247738
06012020
Normal
Deferred Stock Issuance-BoD
Williamson John
3756800
32285306
06112020
Normal
Option Exercise
Wise Mike
24000000
32525306
06112020
Normal
Retirement - Vested Stock
Exer Options
Wise Mike
6153000
32463776
06082020
Normal
Option Exercise
Pruzan Michael
400000
32467776
06292020
Normal
Option Exercise
Farooqui Salvan
250000
32470276
Date Issued
Balance Outstanding
Number of Days
Weighted Avg
Treasury Shares Weighted Average
Year-to-Date
YTD
QTD
1120
31788896
182
31788896
Graeff July 2
115000
115000
1820
31908896
175
115385
Q2 2015
29925
29925
1820
31888896
175
(19231)
2014
22725
22725
11020
31948896
173
57033
2016 Mgmt buyback
73675
73675
11420
31955563
169
6191
2016 repurchase program
205500
205500
11420
31986230
169
28477
2017 Mgmt buyback
90900
90900
11420
31996897
169
9905
2017 BOD buyback
100000
100000
11420
32004564
169
7119
2017 repurchase program
433179
433179
11420
31995364
169
(8543)
2018 repurchase program
132450
132450
11420
31992164
169
(2971)
2018 Mgmt buyback
49751
49751
11420
31989864
169
(2136)
2019 Mgmt buyback
52733
52733
11420
31990864
169
929
2019 repurchase program
333953
333953
12920
32022987
154
27181
2020 Mgmt buyback
6337
12673
12720
32026327
156
2863
21920
32031675
133
3908
164612764
165246418
31220
32056675
111
15247
31220
32102256
111
27799
31220
32111368
111
5557
567659
3620
32126368
117
9643
Treasury on AST
567664
51220
32135868
50
2610
Diff
(5)
51420
32178868
48
11341
51420
32226329
48
12517
51120
32232129
51
1625
51120
32237929
51
1625
6120
32247738
30
1617
6120
32285306
30
6193
61120
32525306
20
26374
61120
32463776
20
(6762)
6820
32467776
23
505
62920
32470276
2
27
YTD Average Shares Outstanding
32130925
Quarter-to Date
112020
31788896
91
31788896
1820
31908896
91
120000
1820
31888896
91
(20000)
11020
31948896
91
60000
11420
31955563
91
6667
11420
31986230
91
30667
11420
31996897
91
10667
11420
32004564
91
7667
11420
31995364
91
(9200)
11420
31992164
91
(3200)
11420
31989864
91
(2300)
11420
31990864
91
1000
12920
32022987
91
32123
12720
32026327
91
3340
21920
32031675
91
5348
31220
32056675
91
25000
31220
32102256
91
45581
31220
32111368
91
9112
3620
32126368
91
15000
51220
32135868
50
5220
51420
32178868
48
22681
51420
32226329
48
25034
51120
32232129
51
3251
51120
32237929
51
3251
6120
32247738
30
3234
6120
32285306
30
12385
61120
32525306
20
52747
61120
32463776
20
(13523)
6820
32467776
23
1011
62920
32470276
2
55
QTD Average Shares Outstanding
32241713
C1
TA to the Summary tab
C2
TA to the Avg Stock Price tab
C3
TA to the Options Outstanding YTD tab
C4
TA to the Equity Rollforward WP
C5
TA to the AST Report in the Equity Rollfoward WP
C6
TA to the Options Outstanding QTD tab
C7
Custom 7
C8
See comment box
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
22
A Flexible Balance Sheet and Strong Cash Position
Strong balance sheet on June 30 2020
$912M in total assets
bull $265M in cash and cash equivalents
bull $448M in working capital
Access to $10M revolving credit facility if needed
Continued focus on working capital and reinvestment in business in order to generate long-term sustainable growth
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
23
2020 Financial Outlook
Maintaining FY2020 outlook tightening our range
Total revenues of $81M to $83M
Adjusted EBITDA1 of $10M to $12M
1 Adj EBITDA is a non-GAAP measure Reconciliation of comparable GAAP measures to non-GAAP measures are included in the appendix to this presentation The outlook above does not include any future acquisitions divestitures or unanticipated events
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
24
Luna ndash Enabling the Future with Fiber
Proprietary measurement technology offering unprecedented combination of resolution accuracy and speed
Customers in attractive markets Military and Defense Communications Infrastructure Energy and Automotive
Positioned to take advantage of trends such as vehicle light-weighting and increasing demands on data centers and broadband capacity
Adequately capitalized to fund growth
Long-tenured experienced executive team board
Corporate culture of innovation and integrity
Overview
Appendix
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
26
Reconciliation of Net Income to Adjusted EBITDA
(1) Non-recurring charges consist of transaction-related expenses related to the acquisition of General Photonics
2020 2019 2020 2019
Reconciliation of EBITDA and Adjusted EBITDANet income 1369$ 841$ 253$ 1967$ Loss from discontinued operations net of income tax benefit of $464 - - 1436 -
Net income from continuing operations 1369 841 1689 1967 Interest expense 1 - 1 13 Investment income (4) (77) (64) (268) Income tax expense(benefit) 441 247 579 (1618) Depreciation and amortization 684 653 1363 1166
Reconciliation of Net Income to Adjusted EBITDA Full Year
(1) Non-recurring charges include the following 2017) CEO separation costs and other share-based compensation 2018) Transaction-related expenses associated with the acquisition of Micron Optics Inc 2019) Transaction related expenses and inventory step-up amortization relate to General Photonics acquisition and CFO transition expenses
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
28
New Segment Quarterly Results (in thousands)
March 31 2019 June 30 2019 Sep 30 2019 A Dec 31 2019 March 31 2020 June 30 2020
Total revenues 14833 17814 18389 19480 17141 18576
Cost of revenuesLightwave 4280 5334 5449 5070 4885 5181 Luna Labs 3785 3728 3665 4022 3892 3878
Total cost of revenues 8065 9062 9114 9092 8777 9059
Gross Profit 6768 8752 9275 10388 8364 9517
Operating expenseSelling general and administrative 6207 6003 5745 6416 6377 6202 Research development and engineering 1458 1735 2048 2255 1597 1505
Total operating expense 7665 7738 7793 8671 7974 7707
Operating income (897)$ 1014$ 1482$ 1717$ 390$ 1810$
A The Company revised its results for the three months ended September 30 2019 The Company has concluded these adjustments are not material individually or in the aggregate
Three Months Ended
Scott A Graeff President and CEO
Safe Harbor
Luna ndash Enabling the Future with Fiber
Luna is a global company
Luna has a clear vision and established history
Compelling business model with strong growth potential
Lightwave 2019 revenue1 snapshot
Luna Overview
Where Does Luna Play
Sensing
Sensing Short-range high-resolution
Sensing long-range high-speed
Sensing Material thickness
Comms Test
Comms Test Components
Comms Test Short-haul network
Luna Labs
2Q FY20 Results
Second-quarter 2020 Key Financial Results
Second-quarter 2020 and Other Recent Accomplishments
Slide Number 21
A Flexible Balance Sheet and Strong Cash Position
2020 Financial Outlook
Luna ndash Enabling the Future with Fiber
Appendix
Reconciliation of Net Income to Adjusted EBITDA
Reconciliation of Net Income to Adjusted EBITDA Full Year
New Segment Quarterly Results
(in thousands)
Three Months Ended
December 31 2018
A
March 31 2019
C
June 30 2019
September 30 2019
December 31 2019
March 31 2020
June 30 2020
Revenues
Lightwave
$ 11345
$ 10221
$ 12523
$ 13120
$ 13988
$ 11554
12933
Luna Labs
5548
6641
5291
5301
5492
5587
5642
Total revenues
16893
16862
17814
18421
19480
17141
18576
Cost of revenues
Lightwave
4002
3836
5334
5471
5070
4885
5181
Luna Labs
4268
4816
3728
3665
4022
3892
3878
Total cost of revenues
8270
8652
9062
9136
9092
8777
9059
Gross Profit
8623
8210
8752
9285
10388
8364
9517
Operating expense
Selling general and administrative
6394
7165
6003
5754
6415
6377
6202
Research development and engineering
1894
1708
1735
2047
2255
1597
1505
Total operating expense
8288
8873
7738
7801
8670
7974
7707
Operating income
$ 335
$ (663)
$ 1014
$ 1484
$ 1718
$ 390
$ 1810
Historical - Hidden
A
Includes $751000 of costs associated with the acquisition of Micron Optics
B
Unaudited pro forma financials assumes the General Photonics business was acquired on January 1 2019
C
Includes $898000 of costs associated with the acquisition of General Photonics
Year Ended December 31
(unaudited)
2016
2017
2018
2019
Reconciliation of EBITDA and Adjusted EBITDA
Net (loss)income
$ (2370)
$ 14615
$ 11004
$ 5343
Less income from discontinued operations net of income taxes
300
15866
9766
- 0
Loss from discontinued operations net of income tax benefit of $464
- 0
- 0
- 0
- 0
Net income from continuing operations
(2670)
(1251)
1238
5343
Interest expense
319
217
124
16
Investment income
- 0
- 0
(549)
(394)
Income tax (benefit)expense
(135)
(1148)
48
(1654)
Depreciation and amortization
1466
1137
908
2503
EBITDA
(1020)
(1045)
1769
5814
Share-based compensation
860
715
628
1544
Non-Recurring Charges (1)
- 0
596
751
1390
Amortization of Inventory Step-up
- 0
- 0
- 0
725
Adjusted EBITDA
$ (160)
$ 266
$ 3148
$ 9473
1
Non-recurring charges include the following 2017) CEO separation costs and other share-based compensation 2018) Transaction-related expenses associated with the acquisition of Micron Optics Inc 2019) Transaction related expenses and inventory step-up amortization relate to General Photonics acquisition and CFO transition expenses
Luna Innovations Incorporated
Reconciliation of Non-GAAP Financial Measures
(in thousands)
Three Months Ended
Six Months Ended
June 30
June 30
2020
2019
2020
2019
(Unaudited)
(Unaudited)
Reconciliation of EBITDA and Adjusted EBITDA
Net income
$ 1369
$ - 0
$ 841
$ 253
$ - 0
$ 1967
Loss from discontinued operations net of income tax benefit of $464
- 0
- 0
- 0
1436
- 0
- 0
Gain on sale of asset
- 0
- 0
- 0
- 0
- 0
- 0
Net income from continuing operations
1369
- 0
841
1689
- 0
1967
Interest expense
1
- 0
- 0
1
- 0
13
Investment income
(4)
- 0
(77)
(64)
- 0
(268)
Income tax expense(benefit)
441
- 0
247
579
- 0
(1618)
Depreciation and amortization
684
- 0
653
1363
- 0
1166
EBITDA
2490
- 0
1664
3568
- 0
1260
Share-based compensation
465
- 0
378
967
- 0
721
Non-Recurring Charges (1)
- 0
- 0
44
- 0
- 0
942
CFO Recruiting and Severance
- 0
- 0
- 0
- 0
- 0
- 0
Amortization of Inventory Step-up
- 0
- 0
310
- 0
- 0
412
- 0
- 0
- 0
- 0
- 0
- 0
Adjusted EBITDA
$ 2955
$ - 0
$ 2396
$ 4535
$ - 0
$ 3335
EBITDA Margin Percent on Total Revenues
134
93
100
39
Adjusted EBITDA Margin Percent on Total Revenues
159
134
127
102
Reconciliation of Non-GAAP EPS
Diluted EPS
$ 004
$ 002
$ 001
$ 005
Loss from discontinued operations net of income taxes
Existing Technology amortization missed from 101518-63019
- 0
15560
Amortization catch up from 101518-63019 in July 2019 only
In-process RampD
200000
0
- 0
1650000
4091764
Micron Purchase Amortization Detail - 812019 and forward
Trade Name
150000
36
4167
Customer Relationships
100000
84
1190
Existing Technology
1200000
60
20000
Amortization going forward
In-process RampD
200000
0
- 0
1650000
2535714
General Pho Purchase Amortization Detail - 312019
Trade Name
400000
36
11111
22822
Customer Relationships
600000
180
3333
22834
Existing Technology
7200000
96
75000
22827
In-process RampD
- 0
0
- 0
8200000
8944444
General Pho Inventory Step-up Amortization - 312019
WIP amp Fin Goods
724760
7
103537
Ends 93019
PampL Summary - Luna Innovations
For the Three Months Ending March 31 2020
QTD
QTD
QTD
YTD
YTD
YTD
Actual
Budget
Variance
Actual
Budget
Variance
fav(un-fav)
fav(un-fav)
Revenues
Lightwave
12933344
13366455
(433536)
24487335
25564000
(1077090)
686
Luna Labs
5642348
6075202
(432854)
11229350
11675307
(445957)
314
Total Revenues
18575692
19441657
(866390)
35716685
37239307
(1523047)
Cost of Revenues
Product and Licensing
5181057
5789978
608921
10066386
11082697
1016311
282
TDD
3877888
4448571
570683
7769627
8526736
757109
218
Total Cost of Revenues
9058945
10238549
570683
17836013
19609433
1773420
499
Gross Margin
Product and Licensing - $
7752287
7576477
175810
14420949
14481303
(60354)
Product and Licensing -
60
57
3
59
57
2
TDD - $
1764460
1626631
137829
3459723
3148571
311152
TDD -
31
27
4
31
27
4
Total Gross Margin
9516747
9203108
313639
17880672
17629874
250798
Gross Margin
51
47
4
50
47
3
501
Operating Expenses
Selling General amp Admin
6202338
8155800
1953888
12578977
14477853
1899301
Research Devel amp Engineering
1504800
647122
(857678)
3101865
2798808
(303057)
Total Operating Expenses
7707138
8802922
1096209
15680842
17276661
1595819
439
Operating Income (Loss)
1809609
400186
1409423
2199830
353213
1846617
62
Other Expense (Income)
Interest
930
985
55
1145
2195
1050
00
Investment Income
(4435)
(75000)
(70565)
(63790)
(150000)
(86210)
-02
Tax Expense
440626
118551
(498831)
579203
125253
(630706)
16
Tax Benefit from release of VA
-
-
-
-
-
-
00
Gainloss on foreigh exch
-
-
-
-
-
-
00
Other
3649
-
(3649)
(5236)
-
5236
-00
440770
44536
(396234)
511322
(22552)
(533874)
14
Income from continuing operations
1368839
355650
1805658
1688508
375765
2380491
Income from Disc Ops
Operating Income from Disc Ops
-
-
- 0
-
-
- 0
Gainloss of Asset Sale
-
-
- 0
(1435903)
-
(1435903)
Total Income from Disc Ops
- 0
- 0
- 0
(1435903)
- 0
(1435903)
Net Income (Loss)
1368839
355650
1013189
252605
375765
(123160)
07
Dividend on Preferred
- 0
- 0
- 0
- 0
- 0
- 0
Net Income (Loss) available to Common Shareholders
1368839
355650
1013189
252605
375765
(123160)
07
Depreciation
244214
491046
From Cash Flow
Amortization
439787
872410
From Cash Flow
Stock Compensation
465109
966932
From Cash Flow
Acquisition Costs
- 0
- 0
Amortization of Inventory Step-up
- 0
- 0
CFO Recruiting amp Severance
- 0
- 0
Treasury Stock Activity
63020
Stock Buyback - Held with Northland
Trade date
Settlement Date
of Shares
Avg Price
Commission
Trade date Total $
Number of Days
Weighted Avg
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
= Trades Not Settled
$000
$000
$000
$000
YTD Avg
0
0
Trade date
Settlement Date
of Shares
Avg Price
Commission
Trade date Total $
Number of Days
Weighted Avg
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
QTD Avg
0
0
0
0
2016 Amounts under program
205500
$24880840
$25086340
2017 Amounts under program
433179
$75649353
$76082532
2018 Amounts under program
132450
$30604099
$30736549
2019 Amounts under program
333953
$198663889
$199999701
Total
110508200
329798181
331905122
For Q Disclosure
Management Buyback - Held with AST
Date
Shares
YTD days os
YTD weighted avg
QTD days os
QTD Weighted Avg
Month
Quarter
Year
52720
Garrett James
6500
35
1250
35
2500
Jan
31
- 0
- 0
52720
Graeff Scott
17450
35
3356
35
6712
Feb
29
- 0
- 0
52720
Soller Brian
9000
35
1731
35
3462
Mar
31
91
91
44013
- 0
91
- 0
Apr
30
- 0
- 0
44013
- 0
91
- 0
May
31
- 0
- 0
44013
- 0
91
- 0
Jun
30
91
182
44013
- 0
91
- 0
Jul
31
- 0
- 0
44013
- 0
91
- 0
Aug
31
- 0
- 0
44013
- 0
91
- 0
Sept
30
92
274
- 0
- 0
Oct
31
- 0
- 0
- 0
- 0
Nov
30
- 0
- 0
- 0
- 0
Dec
31
92
366
32950
6337
12673
BOD buyback
YTD
$000
$000
44013
- 0
Qtr
$000
$000
44013
- 0
Luna
Date
CloseLast
1220
738
Average Close Price
1320
718
Year-To-Date
$ 696
1620
73
Quarter-To-Date
$ 652
1720
735
1820
756
1920
777
11020
787
11320
803
11420
804
11520
832
11620
85
11720
845
12120
827
12220
833
12320
849
12420
844
12720
828
12820
856
12920
85
13020
846
13120
819
2320
825
2420
821
2520
82
2620
819
2720
837
21020
85
21120
858
21220
904
21320
895
21420
897
21820
891
21920
891
22020
907
22120
923
22420
861
22520
745
22620
759
22720
707
22820
67
3220
713
3320
693
3420
719
3520
689
3620
75
3920
672
31020
66
31120
599
31220
521
31320
522
31620
491
31720
553
31820
473
31920
487
32020
48
32320
509
32420
543
32520
582
32620
617
32720
583
33020
623
33120
615
4120
585
4220
583
4320
572
4620
607
4720
605
4820
631
4920
665
41320
656
41420
683
41520
711
41620
734
41720
727
42020
73
42120
672
42220
683
42320
691
42420
715
42720
721
42820
74
42920
777
43020
763
5120
724
5420
751
5520
762
5620
76
5720
749
5820
782
51120
704
51220
705
51320
62
51420
578
51520
537
51820
591
51920
625
52020
61
52120
6
52220
609
52620
615
52720
62
52820
609
52920
61
6120
629
6220
628
6320
653
6420
649
6520
663
6820
667
6920
635
61020
643
61120
583
61220
606
61520
625
61620
631
61720
615
61820
599
61920
601
62220
616
62320
624
62420
615
62520
615
62620
571
62920
585
63020
584
Qtr
1
2
3
4
Options
Options
Aggregate Strike Price
Intrinsic Value
Outstanding
Exercisable
Outstanding
Exercisable
Outstanding
Exercisable
Luna
2418245
1309606
$6482283
$2709686
7767068
4952824
2418245
1309606
6482283
2709686
7767068
4952824
Warrants Aaron Chase Aaron ChaseCarilion exercised all warrants in Q2 and Q3 2018
0
0
0
0
2418245
1309606
6482283
2709686
Average Strike Price
$ 268
$ 207
Pull Cancelled for whole year
Cancels
Q1
35659 Aaron Chase Aaron Chase22999 of canceled shares didnrsquot show up until Q2-20 report
Aaron Chase Aaron ChaseCarilion exercised all warrants in Q2 and Q3 2018
$ 364
12990180
Outstanding 12312019
3160397
Q2
13124
$ 211
2769912
Q3
- 0
ERRORDIV0
- 0
Grants
20000
Q4
- 0
ERRORDIV0
- 0
Exercised
(662965)
48783
$ 323
15760092
Canceled
(48783)
Corrected Termed EEs from 2019
(50404)
These were corrected in June 2020
2418245
Remaining life
Options
Avg Life
- 0
Outstanding
Luna
2418245
644
Exercisable
1309606
474
Remaining service
Luna
2418245
See awards outstanding by grant price range report and Disclosure report for information on this tab
Luna Innovations
Additional Notes
EPS Calculations
During Jan-2019 and 2020 Management was awarded Performance Based Grants and Time Based Grants
63020
The Performance Based Grants vest after 3 years and are issued only if the performance is achieved
The Time Based Grants vest each year for 3 years Grants are issued once vested each year
Yearly BOD Grants
Basic EPS
DSU deferred stock units vest in a year but do not become issued until the Director leaves the Board This started in 2018
Net Income (loss) Per Share from Continuing Operations
YTD
Diluted
QTD
Diluted
DSU awards vest in May 2021 and will be added to the middle section of the EPS in May 2021
Net Income from Continuing Operations
1688508
1368839
Rich Roedel
8877
704
62500
Common Shares Outstanding
30484797
30589249
Barry Phelps
5326
704
37500
$ 006
$ 005
$ 004
$ 004
Leigh Anderson
5326
704
37500
Mary Beth Vitale
5326
704
37500
Net income (loss) Per Share attributable to common shareholders
RSU restricted stock units vest and are issued in a year and will be added to the bottom of the EPS in May 2021
Net Income (Loss) available to Shareholders
252605
1368839
Don Pastor
5326
704
37500
Common Shares Outstanding
30484797
30589249
Gary Spiegel
5326
704
37500
$ 001
$ 001
$ 004
$ 004
Net income (loss) Per Share from Discontinued Operations
Net Income from Discontinued Operations
(1435903)
- 0
Common Shares Outstanding
30484797
30589249
$ (005)
$ (004)
$ - 0
$ - 0
Diluted EPS
Net Income(Loss) available to SHs
252605
1368839
Common Shares Outstanding
30484797
30589249
Common Stock Equivalent
2010153
1876873
$ 001
- 0 Grant Thornton LLP Grant Thornton LLPAs earnings from continuing operations are negative (loss) basic and diluted EPS equal one another
$ 004 Grant Thornton LLP Grant Thornton LLPAs earnings from continuing operations are negative (loss) basic and diluted EPS equal one another
- 0 Grant Thornton LLP Grant Thornton LLPAs earnings from continuing operations are negative (loss) basic and diluted EPS equal one another
Non-GAAP Diluted EPS
Net income (loss) Per Share attributable to common shareholders
Net Income (Loss) available to Shareholders
252605
1368839
Loss from discontinued operations
1435903
- 0
Share-based compensation
966932
465109
Amortization of acquired intangibles
344405
688810
Acquisition related costs
- 0
- 0
Amortization of Inventory Step-up
- 0
- 0
Common Shares Outstanding
30484797
30589249
Common Stock Equivalent
2010153
1876873
$ 009
$ 008
YTD
QTD
Total issued shares
32470276
Average Close Price
$ 696
$ 652
Total treasury
1672741
Shares Outstanding
30797535
Net change in denominator
1404924 Kelly Bewick Aaron Chasesee Dilution (stock option) dilutive tab
1264984
BOD fees paid in DSUs Aaron Chase Aaron ChaseFrom Equity Award Transactions Report
Month
Quarter
Year
Balance at 112019 - DSU outstanding
591457
591457
Jan
31
Issued during Q1 2020
7114
7114
Feb
29
Issued during Q2 2020
3947
7894
Mar
31
91
91
Annual grant DSU vested 5112020
10521 KBSResults KBSResultsEnter 2019 DSU annual grant when vest in 2020 (probably May) you do not need to enter annual RSU because it will be issued in AST
21042
Apr
30
Deferred Equity Issuance 6012020
(7809) KBSResults Aaron ChaseM Wise and J Williamson retired from the BoD in May 2020 Wise Deferred Comp will be issued every June 1 for 10 years Williamson Deferred Comp will be issued every June 1 for 5 years
Grant Thornton LLP Grant Thornton LLPAs earnings from continuing operations are negative (loss) basic and diluted EPS equal one another
Grant Thornton LLP Grant Thornton LLPAs earnings from continuing operations are negative (loss) basic and diluted EPS equal one another
(15619)
May
31
Issued during Q3 2020
- 0
- 0
Jun
30
91
182
Issued during Q4 2020
- 0
- 0
Jul
31
Aug
31
Sept
30
92
274
Oct
31
Totals (Antidilutive)
2010153
1876873
Nov
30
Dec
31
92
366
Shares Outstanding as of 112020
31788896
As Of Date
Transaction
Reason
Name
Shares Issued
Shares Retired
Running Total
01012020
Normal
Balance Roll Forward
- 0
- 0
31788896
01082020
Normal
Option Exercise
Williamson John
12000000
- 0
31908896
01082020
Normal
Retirement - Vested Restriced Stock
Exer Options
Williamson John
- 0
2000000
31888896
01102020
Normal
Option Exercise
Roedel Rich
6000000
- 0
31948896
01142020
Normal
2019 Time-Based RSU Vesting
Messick Dale
666700
- 0
31955563
01142020
Normal
2019 Time-Based RSU Vesting
Graeff Scott
3066700
- 0
31986230
01142020
Normal
2019 Time-Based RSU Vesting
Soller Brian
1066700
- 0
31996897
01142020
Normal
2019 Time-Based RSU Vesting
Garrett James
766700
- 0
32004564
01142020
Normal
2019 Time-Based RSU Retirement
Taxes
Graeff Scott
- 0
920000
31995364
01142020
Normal
2019 Time-Based RSU Retirement
Taxes
Soller Brian
- 0
320000
31992164
01142020
Normal
2019 Time-Based RSU Retirement
Taxes
Garrett James
- 0
230000
31989864
01142020
Normal
Option Exercise
Burris Kevin
100000
- 0
31990864
01292020
Normal
Option Exercise
Carr Dustin
3212300
- 0
32022987
01272020
Normal
Option Exercise
Chen James
334000
- 0
32026327
02192020
Normal
Option Exercise
McPherson Daniel
534800
- 0
32031675
03122020
Normal
Option Exercise
Haber Todd
2500000
- 0
32056675
03122020
Normal
Option Exercise
Graver Thomas
4558100
- 0
32102256
03122020
Normal
Option Exercise
Baez Michael
911200
- 0
32111368
03062020
Normal
Option Exercise
Farooqui Salvan
1500000
- 0
32126368
05122020
Normal
Option Exercise
Baez Michael
950000
- 0
32135868
05142020
Normal
Option Exercise
Haber Todd
4300000
- 0
32178868
05142020
Normal
Option Exercise
Graver Thomas
4746100
- 0
32226329
05112020
Normal
Annual Equity Grant Vesting-BoD
Pastor Don
580000
- 0
32232129
05112020
Normal
Annual Equity Grant Vesting-BoD
Williamson John
580000
- 0
32237929
06012020
Normal
Deferred Stock Issuance-BoD
Wise Mike
980900
- 0
32247738
06012020
Normal
Deferred Stock Issuance-BoD
Williamson John
3756800
32285306
06112020
Normal
Option Exercise
Wise Mike
24000000
32525306
06112020
Normal
Retirement - Vested Stock
Exer Options
Wise Mike
6153000
32463776
06082020
Normal
Option Exercise
Pruzan Michael
400000
32467776
06292020
Normal
Option Exercise
Farooqui Salvan
250000
32470276
Date Issued
Balance Outstanding
Number of Days
Weighted Avg
Treasury Shares Weighted Average
Year-to-Date
YTD
QTD
1120
31788896
182
31788896
Graeff July 2
115000
115000
1820
31908896
175
115385
Q2 2015
29925
29925
1820
31888896
175
(19231)
2014
22725
22725
11020
31948896
173
57033
2016 Mgmt buyback
73675
73675
11420
31955563
169
6191
2016 repurchase program
205500
205500
11420
31986230
169
28477
2017 Mgmt buyback
90900
90900
11420
31996897
169
9905
2017 BOD buyback
100000
100000
11420
32004564
169
7119
2017 repurchase program
433179
433179
11420
31995364
169
(8543)
2018 repurchase program
132450
132450
11420
31992164
169
(2971)
2018 Mgmt buyback
49751
49751
11420
31989864
169
(2136)
2019 Mgmt buyback
52733
52733
11420
31990864
169
929
2019 repurchase program
333953
333953
12920
32022987
154
27181
2020 Mgmt buyback
6337
12673
12720
32026327
156
2863
21920
32031675
133
3908
164612764
165246418
31220
32056675
111
15247
31220
32102256
111
27799
31220
32111368
111
5557
567659
3620
32126368
117
9643
Treasury on AST
567664
51220
32135868
50
2610
Diff
(5)
51420
32178868
48
11341
51420
32226329
48
12517
51120
32232129
51
1625
51120
32237929
51
1625
6120
32247738
30
1617
6120
32285306
30
6193
61120
32525306
20
26374
61120
32463776
20
(6762)
6820
32467776
23
505
62920
32470276
2
27
YTD Average Shares Outstanding
32130925
Quarter-to Date
112020
31788896
91
31788896
1820
31908896
91
120000
1820
31888896
91
(20000)
11020
31948896
91
60000
11420
31955563
91
6667
11420
31986230
91
30667
11420
31996897
91
10667
11420
32004564
91
7667
11420
31995364
91
(9200)
11420
31992164
91
(3200)
11420
31989864
91
(2300)
11420
31990864
91
1000
12920
32022987
91
32123
12720
32026327
91
3340
21920
32031675
91
5348
31220
32056675
91
25000
31220
32102256
91
45581
31220
32111368
91
9112
3620
32126368
91
15000
51220
32135868
50
5220
51420
32178868
48
22681
51420
32226329
48
25034
51120
32232129
51
3251
51120
32237929
51
3251
6120
32247738
30
3234
6120
32285306
30
12385
61120
32525306
20
52747
61120
32463776
20
(13523)
6820
32467776
23
1011
62920
32470276
2
55
QTD Average Shares Outstanding
32241713
C1
TA to the Summary tab
C2
TA to the Avg Stock Price tab
C3
TA to the Options Outstanding YTD tab
C4
TA to the Equity Rollforward WP
C5
TA to the AST Report in the Equity Rollfoward WP
C6
TA to the Options Outstanding QTD tab
C7
Custom 7
C8
See comment box
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
23
2020 Financial Outlook
Maintaining FY2020 outlook tightening our range
Total revenues of $81M to $83M
Adjusted EBITDA1 of $10M to $12M
1 Adj EBITDA is a non-GAAP measure Reconciliation of comparable GAAP measures to non-GAAP measures are included in the appendix to this presentation The outlook above does not include any future acquisitions divestitures or unanticipated events
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
24
Luna ndash Enabling the Future with Fiber
Proprietary measurement technology offering unprecedented combination of resolution accuracy and speed
Customers in attractive markets Military and Defense Communications Infrastructure Energy and Automotive
Positioned to take advantage of trends such as vehicle light-weighting and increasing demands on data centers and broadband capacity
Adequately capitalized to fund growth
Long-tenured experienced executive team board
Corporate culture of innovation and integrity
Overview
Appendix
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
26
Reconciliation of Net Income to Adjusted EBITDA
(1) Non-recurring charges consist of transaction-related expenses related to the acquisition of General Photonics
2020 2019 2020 2019
Reconciliation of EBITDA and Adjusted EBITDANet income 1369$ 841$ 253$ 1967$ Loss from discontinued operations net of income tax benefit of $464 - - 1436 -
Net income from continuing operations 1369 841 1689 1967 Interest expense 1 - 1 13 Investment income (4) (77) (64) (268) Income tax expense(benefit) 441 247 579 (1618) Depreciation and amortization 684 653 1363 1166
Reconciliation of Net Income to Adjusted EBITDA Full Year
(1) Non-recurring charges include the following 2017) CEO separation costs and other share-based compensation 2018) Transaction-related expenses associated with the acquisition of Micron Optics Inc 2019) Transaction related expenses and inventory step-up amortization relate to General Photonics acquisition and CFO transition expenses
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
28
New Segment Quarterly Results (in thousands)
March 31 2019 June 30 2019 Sep 30 2019 A Dec 31 2019 March 31 2020 June 30 2020
Total revenues 14833 17814 18389 19480 17141 18576
Cost of revenuesLightwave 4280 5334 5449 5070 4885 5181 Luna Labs 3785 3728 3665 4022 3892 3878
Total cost of revenues 8065 9062 9114 9092 8777 9059
Gross Profit 6768 8752 9275 10388 8364 9517
Operating expenseSelling general and administrative 6207 6003 5745 6416 6377 6202 Research development and engineering 1458 1735 2048 2255 1597 1505
Total operating expense 7665 7738 7793 8671 7974 7707
Operating income (897)$ 1014$ 1482$ 1717$ 390$ 1810$
A The Company revised its results for the three months ended September 30 2019 The Company has concluded these adjustments are not material individually or in the aggregate
Three Months Ended
Scott A Graeff President and CEO
Safe Harbor
Luna ndash Enabling the Future with Fiber
Luna is a global company
Luna has a clear vision and established history
Compelling business model with strong growth potential
Lightwave 2019 revenue1 snapshot
Luna Overview
Where Does Luna Play
Sensing
Sensing Short-range high-resolution
Sensing long-range high-speed
Sensing Material thickness
Comms Test
Comms Test Components
Comms Test Short-haul network
Luna Labs
2Q FY20 Results
Second-quarter 2020 Key Financial Results
Second-quarter 2020 and Other Recent Accomplishments
Slide Number 21
A Flexible Balance Sheet and Strong Cash Position
2020 Financial Outlook
Luna ndash Enabling the Future with Fiber
Appendix
Reconciliation of Net Income to Adjusted EBITDA
Reconciliation of Net Income to Adjusted EBITDA Full Year
New Segment Quarterly Results
(in thousands)
Three Months Ended
December 31 2018
A
March 31 2019
C
June 30 2019
September 30 2019
December 31 2019
March 31 2020
June 30 2020
Revenues
Lightwave
$ 11345
$ 10221
$ 12523
$ 13120
$ 13988
$ 11554
12933
Luna Labs
5548
6641
5291
5301
5492
5587
5642
Total revenues
16893
16862
17814
18421
19480
17141
18576
Cost of revenues
Lightwave
4002
3836
5334
5471
5070
4885
5181
Luna Labs
4268
4816
3728
3665
4022
3892
3878
Total cost of revenues
8270
8652
9062
9136
9092
8777
9059
Gross Profit
8623
8210
8752
9285
10388
8364
9517
Operating expense
Selling general and administrative
6394
7165
6003
5754
6415
6377
6202
Research development and engineering
1894
1708
1735
2047
2255
1597
1505
Total operating expense
8288
8873
7738
7801
8670
7974
7707
Operating income
$ 335
$ (663)
$ 1014
$ 1484
$ 1718
$ 390
$ 1810
Historical - Hidden
A
Includes $751000 of costs associated with the acquisition of Micron Optics
B
Unaudited pro forma financials assumes the General Photonics business was acquired on January 1 2019
C
Includes $898000 of costs associated with the acquisition of General Photonics
Year Ended December 31
(unaudited)
2016
2017
2018
2019
Reconciliation of EBITDA and Adjusted EBITDA
Net (loss)income
$ (2370)
$ 14615
$ 11004
$ 5343
Less income from discontinued operations net of income taxes
300
15866
9766
- 0
Loss from discontinued operations net of income tax benefit of $464
- 0
- 0
- 0
- 0
Net income from continuing operations
(2670)
(1251)
1238
5343
Interest expense
319
217
124
16
Investment income
- 0
- 0
(549)
(394)
Income tax (benefit)expense
(135)
(1148)
48
(1654)
Depreciation and amortization
1466
1137
908
2503
EBITDA
(1020)
(1045)
1769
5814
Share-based compensation
860
715
628
1544
Non-Recurring Charges (1)
- 0
596
751
1390
Amortization of Inventory Step-up
- 0
- 0
- 0
725
Adjusted EBITDA
$ (160)
$ 266
$ 3148
$ 9473
1
Non-recurring charges include the following 2017) CEO separation costs and other share-based compensation 2018) Transaction-related expenses associated with the acquisition of Micron Optics Inc 2019) Transaction related expenses and inventory step-up amortization relate to General Photonics acquisition and CFO transition expenses
Luna Innovations Incorporated
Reconciliation of Non-GAAP Financial Measures
(in thousands)
Three Months Ended
Six Months Ended
June 30
June 30
2020
2019
2020
2019
(Unaudited)
(Unaudited)
Reconciliation of EBITDA and Adjusted EBITDA
Net income
$ 1369
$ - 0
$ 841
$ 253
$ - 0
$ 1967
Loss from discontinued operations net of income tax benefit of $464
- 0
- 0
- 0
1436
- 0
- 0
Gain on sale of asset
- 0
- 0
- 0
- 0
- 0
- 0
Net income from continuing operations
1369
- 0
841
1689
- 0
1967
Interest expense
1
- 0
- 0
1
- 0
13
Investment income
(4)
- 0
(77)
(64)
- 0
(268)
Income tax expense(benefit)
441
- 0
247
579
- 0
(1618)
Depreciation and amortization
684
- 0
653
1363
- 0
1166
EBITDA
2490
- 0
1664
3568
- 0
1260
Share-based compensation
465
- 0
378
967
- 0
721
Non-Recurring Charges (1)
- 0
- 0
44
- 0
- 0
942
CFO Recruiting and Severance
- 0
- 0
- 0
- 0
- 0
- 0
Amortization of Inventory Step-up
- 0
- 0
310
- 0
- 0
412
- 0
- 0
- 0
- 0
- 0
- 0
Adjusted EBITDA
$ 2955
$ - 0
$ 2396
$ 4535
$ - 0
$ 3335
EBITDA Margin Percent on Total Revenues
134
93
100
39
Adjusted EBITDA Margin Percent on Total Revenues
159
134
127
102
Reconciliation of Non-GAAP EPS
Diluted EPS
$ 004
$ 002
$ 001
$ 005
Loss from discontinued operations net of income taxes
Existing Technology amortization missed from 101518-63019
- 0
15560
Amortization catch up from 101518-63019 in July 2019 only
In-process RampD
200000
0
- 0
1650000
4091764
Micron Purchase Amortization Detail - 812019 and forward
Trade Name
150000
36
4167
Customer Relationships
100000
84
1190
Existing Technology
1200000
60
20000
Amortization going forward
In-process RampD
200000
0
- 0
1650000
2535714
General Pho Purchase Amortization Detail - 312019
Trade Name
400000
36
11111
22822
Customer Relationships
600000
180
3333
22834
Existing Technology
7200000
96
75000
22827
In-process RampD
- 0
0
- 0
8200000
8944444
General Pho Inventory Step-up Amortization - 312019
WIP amp Fin Goods
724760
7
103537
Ends 93019
PampL Summary - Luna Innovations
For the Three Months Ending March 31 2020
QTD
QTD
QTD
YTD
YTD
YTD
Actual
Budget
Variance
Actual
Budget
Variance
fav(un-fav)
fav(un-fav)
Revenues
Lightwave
12933344
13366455
(433536)
24487335
25564000
(1077090)
686
Luna Labs
5642348
6075202
(432854)
11229350
11675307
(445957)
314
Total Revenues
18575692
19441657
(866390)
35716685
37239307
(1523047)
Cost of Revenues
Product and Licensing
5181057
5789978
608921
10066386
11082697
1016311
282
TDD
3877888
4448571
570683
7769627
8526736
757109
218
Total Cost of Revenues
9058945
10238549
570683
17836013
19609433
1773420
499
Gross Margin
Product and Licensing - $
7752287
7576477
175810
14420949
14481303
(60354)
Product and Licensing -
60
57
3
59
57
2
TDD - $
1764460
1626631
137829
3459723
3148571
311152
TDD -
31
27
4
31
27
4
Total Gross Margin
9516747
9203108
313639
17880672
17629874
250798
Gross Margin
51
47
4
50
47
3
501
Operating Expenses
Selling General amp Admin
6202338
8155800
1953888
12578977
14477853
1899301
Research Devel amp Engineering
1504800
647122
(857678)
3101865
2798808
(303057)
Total Operating Expenses
7707138
8802922
1096209
15680842
17276661
1595819
439
Operating Income (Loss)
1809609
400186
1409423
2199830
353213
1846617
62
Other Expense (Income)
Interest
930
985
55
1145
2195
1050
00
Investment Income
(4435)
(75000)
(70565)
(63790)
(150000)
(86210)
-02
Tax Expense
440626
118551
(498831)
579203
125253
(630706)
16
Tax Benefit from release of VA
-
-
-
-
-
-
00
Gainloss on foreigh exch
-
-
-
-
-
-
00
Other
3649
-
(3649)
(5236)
-
5236
-00
440770
44536
(396234)
511322
(22552)
(533874)
14
Income from continuing operations
1368839
355650
1805658
1688508
375765
2380491
Income from Disc Ops
Operating Income from Disc Ops
-
-
- 0
-
-
- 0
Gainloss of Asset Sale
-
-
- 0
(1435903)
-
(1435903)
Total Income from Disc Ops
- 0
- 0
- 0
(1435903)
- 0
(1435903)
Net Income (Loss)
1368839
355650
1013189
252605
375765
(123160)
07
Dividend on Preferred
- 0
- 0
- 0
- 0
- 0
- 0
Net Income (Loss) available to Common Shareholders
1368839
355650
1013189
252605
375765
(123160)
07
Depreciation
244214
491046
From Cash Flow
Amortization
439787
872410
From Cash Flow
Stock Compensation
465109
966932
From Cash Flow
Acquisition Costs
- 0
- 0
Amortization of Inventory Step-up
- 0
- 0
CFO Recruiting amp Severance
- 0
- 0
Treasury Stock Activity
63020
Stock Buyback - Held with Northland
Trade date
Settlement Date
of Shares
Avg Price
Commission
Trade date Total $
Number of Days
Weighted Avg
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
= Trades Not Settled
$000
$000
$000
$000
YTD Avg
0
0
Trade date
Settlement Date
of Shares
Avg Price
Commission
Trade date Total $
Number of Days
Weighted Avg
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
QTD Avg
0
0
0
0
2016 Amounts under program
205500
$24880840
$25086340
2017 Amounts under program
433179
$75649353
$76082532
2018 Amounts under program
132450
$30604099
$30736549
2019 Amounts under program
333953
$198663889
$199999701
Total
110508200
329798181
331905122
For Q Disclosure
Management Buyback - Held with AST
Date
Shares
YTD days os
YTD weighted avg
QTD days os
QTD Weighted Avg
Month
Quarter
Year
52720
Garrett James
6500
35
1250
35
2500
Jan
31
- 0
- 0
52720
Graeff Scott
17450
35
3356
35
6712
Feb
29
- 0
- 0
52720
Soller Brian
9000
35
1731
35
3462
Mar
31
91
91
44013
- 0
91
- 0
Apr
30
- 0
- 0
44013
- 0
91
- 0
May
31
- 0
- 0
44013
- 0
91
- 0
Jun
30
91
182
44013
- 0
91
- 0
Jul
31
- 0
- 0
44013
- 0
91
- 0
Aug
31
- 0
- 0
44013
- 0
91
- 0
Sept
30
92
274
- 0
- 0
Oct
31
- 0
- 0
- 0
- 0
Nov
30
- 0
- 0
- 0
- 0
Dec
31
92
366
32950
6337
12673
BOD buyback
YTD
$000
$000
44013
- 0
Qtr
$000
$000
44013
- 0
Luna
Date
CloseLast
1220
738
Average Close Price
1320
718
Year-To-Date
$ 696
1620
73
Quarter-To-Date
$ 652
1720
735
1820
756
1920
777
11020
787
11320
803
11420
804
11520
832
11620
85
11720
845
12120
827
12220
833
12320
849
12420
844
12720
828
12820
856
12920
85
13020
846
13120
819
2320
825
2420
821
2520
82
2620
819
2720
837
21020
85
21120
858
21220
904
21320
895
21420
897
21820
891
21920
891
22020
907
22120
923
22420
861
22520
745
22620
759
22720
707
22820
67
3220
713
3320
693
3420
719
3520
689
3620
75
3920
672
31020
66
31120
599
31220
521
31320
522
31620
491
31720
553
31820
473
31920
487
32020
48
32320
509
32420
543
32520
582
32620
617
32720
583
33020
623
33120
615
4120
585
4220
583
4320
572
4620
607
4720
605
4820
631
4920
665
41320
656
41420
683
41520
711
41620
734
41720
727
42020
73
42120
672
42220
683
42320
691
42420
715
42720
721
42820
74
42920
777
43020
763
5120
724
5420
751
5520
762
5620
76
5720
749
5820
782
51120
704
51220
705
51320
62
51420
578
51520
537
51820
591
51920
625
52020
61
52120
6
52220
609
52620
615
52720
62
52820
609
52920
61
6120
629
6220
628
6320
653
6420
649
6520
663
6820
667
6920
635
61020
643
61120
583
61220
606
61520
625
61620
631
61720
615
61820
599
61920
601
62220
616
62320
624
62420
615
62520
615
62620
571
62920
585
63020
584
Qtr
1
2
3
4
Options
Options
Aggregate Strike Price
Intrinsic Value
Outstanding
Exercisable
Outstanding
Exercisable
Outstanding
Exercisable
Luna
2418245
1309606
$6482283
$2709686
7767068
4952824
2418245
1309606
6482283
2709686
7767068
4952824
Warrants Aaron Chase Aaron ChaseCarilion exercised all warrants in Q2 and Q3 2018
0
0
0
0
2418245
1309606
6482283
2709686
Average Strike Price
$ 268
$ 207
Pull Cancelled for whole year
Cancels
Q1
35659 Aaron Chase Aaron Chase22999 of canceled shares didnrsquot show up until Q2-20 report
Aaron Chase Aaron ChaseCarilion exercised all warrants in Q2 and Q3 2018
$ 364
12990180
Outstanding 12312019
3160397
Q2
13124
$ 211
2769912
Q3
- 0
ERRORDIV0
- 0
Grants
20000
Q4
- 0
ERRORDIV0
- 0
Exercised
(662965)
48783
$ 323
15760092
Canceled
(48783)
Corrected Termed EEs from 2019
(50404)
These were corrected in June 2020
2418245
Remaining life
Options
Avg Life
- 0
Outstanding
Luna
2418245
644
Exercisable
1309606
474
Remaining service
Luna
2418245
See awards outstanding by grant price range report and Disclosure report for information on this tab
Luna Innovations
Additional Notes
EPS Calculations
During Jan-2019 and 2020 Management was awarded Performance Based Grants and Time Based Grants
63020
The Performance Based Grants vest after 3 years and are issued only if the performance is achieved
The Time Based Grants vest each year for 3 years Grants are issued once vested each year
Yearly BOD Grants
Basic EPS
DSU deferred stock units vest in a year but do not become issued until the Director leaves the Board This started in 2018
Net Income (loss) Per Share from Continuing Operations
YTD
Diluted
QTD
Diluted
DSU awards vest in May 2021 and will be added to the middle section of the EPS in May 2021
Net Income from Continuing Operations
1688508
1368839
Rich Roedel
8877
704
62500
Common Shares Outstanding
30484797
30589249
Barry Phelps
5326
704
37500
$ 006
$ 005
$ 004
$ 004
Leigh Anderson
5326
704
37500
Mary Beth Vitale
5326
704
37500
Net income (loss) Per Share attributable to common shareholders
RSU restricted stock units vest and are issued in a year and will be added to the bottom of the EPS in May 2021
Net Income (Loss) available to Shareholders
252605
1368839
Don Pastor
5326
704
37500
Common Shares Outstanding
30484797
30589249
Gary Spiegel
5326
704
37500
$ 001
$ 001
$ 004
$ 004
Net income (loss) Per Share from Discontinued Operations
Net Income from Discontinued Operations
(1435903)
- 0
Common Shares Outstanding
30484797
30589249
$ (005)
$ (004)
$ - 0
$ - 0
Diluted EPS
Net Income(Loss) available to SHs
252605
1368839
Common Shares Outstanding
30484797
30589249
Common Stock Equivalent
2010153
1876873
$ 001
- 0 Grant Thornton LLP Grant Thornton LLPAs earnings from continuing operations are negative (loss) basic and diluted EPS equal one another
$ 004 Grant Thornton LLP Grant Thornton LLPAs earnings from continuing operations are negative (loss) basic and diluted EPS equal one another
- 0 Grant Thornton LLP Grant Thornton LLPAs earnings from continuing operations are negative (loss) basic and diluted EPS equal one another
Non-GAAP Diluted EPS
Net income (loss) Per Share attributable to common shareholders
Net Income (Loss) available to Shareholders
252605
1368839
Loss from discontinued operations
1435903
- 0
Share-based compensation
966932
465109
Amortization of acquired intangibles
344405
688810
Acquisition related costs
- 0
- 0
Amortization of Inventory Step-up
- 0
- 0
Common Shares Outstanding
30484797
30589249
Common Stock Equivalent
2010153
1876873
$ 009
$ 008
YTD
QTD
Total issued shares
32470276
Average Close Price
$ 696
$ 652
Total treasury
1672741
Shares Outstanding
30797535
Net change in denominator
1404924 Kelly Bewick Aaron Chasesee Dilution (stock option) dilutive tab
1264984
BOD fees paid in DSUs Aaron Chase Aaron ChaseFrom Equity Award Transactions Report
Month
Quarter
Year
Balance at 112019 - DSU outstanding
591457
591457
Jan
31
Issued during Q1 2020
7114
7114
Feb
29
Issued during Q2 2020
3947
7894
Mar
31
91
91
Annual grant DSU vested 5112020
10521 KBSResults KBSResultsEnter 2019 DSU annual grant when vest in 2020 (probably May) you do not need to enter annual RSU because it will be issued in AST
21042
Apr
30
Deferred Equity Issuance 6012020
(7809) KBSResults Aaron ChaseM Wise and J Williamson retired from the BoD in May 2020 Wise Deferred Comp will be issued every June 1 for 10 years Williamson Deferred Comp will be issued every June 1 for 5 years
Grant Thornton LLP Grant Thornton LLPAs earnings from continuing operations are negative (loss) basic and diluted EPS equal one another
Grant Thornton LLP Grant Thornton LLPAs earnings from continuing operations are negative (loss) basic and diluted EPS equal one another
(15619)
May
31
Issued during Q3 2020
- 0
- 0
Jun
30
91
182
Issued during Q4 2020
- 0
- 0
Jul
31
Aug
31
Sept
30
92
274
Oct
31
Totals (Antidilutive)
2010153
1876873
Nov
30
Dec
31
92
366
Shares Outstanding as of 112020
31788896
As Of Date
Transaction
Reason
Name
Shares Issued
Shares Retired
Running Total
01012020
Normal
Balance Roll Forward
- 0
- 0
31788896
01082020
Normal
Option Exercise
Williamson John
12000000
- 0
31908896
01082020
Normal
Retirement - Vested Restriced Stock
Exer Options
Williamson John
- 0
2000000
31888896
01102020
Normal
Option Exercise
Roedel Rich
6000000
- 0
31948896
01142020
Normal
2019 Time-Based RSU Vesting
Messick Dale
666700
- 0
31955563
01142020
Normal
2019 Time-Based RSU Vesting
Graeff Scott
3066700
- 0
31986230
01142020
Normal
2019 Time-Based RSU Vesting
Soller Brian
1066700
- 0
31996897
01142020
Normal
2019 Time-Based RSU Vesting
Garrett James
766700
- 0
32004564
01142020
Normal
2019 Time-Based RSU Retirement
Taxes
Graeff Scott
- 0
920000
31995364
01142020
Normal
2019 Time-Based RSU Retirement
Taxes
Soller Brian
- 0
320000
31992164
01142020
Normal
2019 Time-Based RSU Retirement
Taxes
Garrett James
- 0
230000
31989864
01142020
Normal
Option Exercise
Burris Kevin
100000
- 0
31990864
01292020
Normal
Option Exercise
Carr Dustin
3212300
- 0
32022987
01272020
Normal
Option Exercise
Chen James
334000
- 0
32026327
02192020
Normal
Option Exercise
McPherson Daniel
534800
- 0
32031675
03122020
Normal
Option Exercise
Haber Todd
2500000
- 0
32056675
03122020
Normal
Option Exercise
Graver Thomas
4558100
- 0
32102256
03122020
Normal
Option Exercise
Baez Michael
911200
- 0
32111368
03062020
Normal
Option Exercise
Farooqui Salvan
1500000
- 0
32126368
05122020
Normal
Option Exercise
Baez Michael
950000
- 0
32135868
05142020
Normal
Option Exercise
Haber Todd
4300000
- 0
32178868
05142020
Normal
Option Exercise
Graver Thomas
4746100
- 0
32226329
05112020
Normal
Annual Equity Grant Vesting-BoD
Pastor Don
580000
- 0
32232129
05112020
Normal
Annual Equity Grant Vesting-BoD
Williamson John
580000
- 0
32237929
06012020
Normal
Deferred Stock Issuance-BoD
Wise Mike
980900
- 0
32247738
06012020
Normal
Deferred Stock Issuance-BoD
Williamson John
3756800
32285306
06112020
Normal
Option Exercise
Wise Mike
24000000
32525306
06112020
Normal
Retirement - Vested Stock
Exer Options
Wise Mike
6153000
32463776
06082020
Normal
Option Exercise
Pruzan Michael
400000
32467776
06292020
Normal
Option Exercise
Farooqui Salvan
250000
32470276
Date Issued
Balance Outstanding
Number of Days
Weighted Avg
Treasury Shares Weighted Average
Year-to-Date
YTD
QTD
1120
31788896
182
31788896
Graeff July 2
115000
115000
1820
31908896
175
115385
Q2 2015
29925
29925
1820
31888896
175
(19231)
2014
22725
22725
11020
31948896
173
57033
2016 Mgmt buyback
73675
73675
11420
31955563
169
6191
2016 repurchase program
205500
205500
11420
31986230
169
28477
2017 Mgmt buyback
90900
90900
11420
31996897
169
9905
2017 BOD buyback
100000
100000
11420
32004564
169
7119
2017 repurchase program
433179
433179
11420
31995364
169
(8543)
2018 repurchase program
132450
132450
11420
31992164
169
(2971)
2018 Mgmt buyback
49751
49751
11420
31989864
169
(2136)
2019 Mgmt buyback
52733
52733
11420
31990864
169
929
2019 repurchase program
333953
333953
12920
32022987
154
27181
2020 Mgmt buyback
6337
12673
12720
32026327
156
2863
21920
32031675
133
3908
164612764
165246418
31220
32056675
111
15247
31220
32102256
111
27799
31220
32111368
111
5557
567659
3620
32126368
117
9643
Treasury on AST
567664
51220
32135868
50
2610
Diff
(5)
51420
32178868
48
11341
51420
32226329
48
12517
51120
32232129
51
1625
51120
32237929
51
1625
6120
32247738
30
1617
6120
32285306
30
6193
61120
32525306
20
26374
61120
32463776
20
(6762)
6820
32467776
23
505
62920
32470276
2
27
YTD Average Shares Outstanding
32130925
Quarter-to Date
112020
31788896
91
31788896
1820
31908896
91
120000
1820
31888896
91
(20000)
11020
31948896
91
60000
11420
31955563
91
6667
11420
31986230
91
30667
11420
31996897
91
10667
11420
32004564
91
7667
11420
31995364
91
(9200)
11420
31992164
91
(3200)
11420
31989864
91
(2300)
11420
31990864
91
1000
12920
32022987
91
32123
12720
32026327
91
3340
21920
32031675
91
5348
31220
32056675
91
25000
31220
32102256
91
45581
31220
32111368
91
9112
3620
32126368
91
15000
51220
32135868
50
5220
51420
32178868
48
22681
51420
32226329
48
25034
51120
32232129
51
3251
51120
32237929
51
3251
6120
32247738
30
3234
6120
32285306
30
12385
61120
32525306
20
52747
61120
32463776
20
(13523)
6820
32467776
23
1011
62920
32470276
2
55
QTD Average Shares Outstanding
32241713
C1
TA to the Summary tab
C2
TA to the Avg Stock Price tab
C3
TA to the Options Outstanding YTD tab
C4
TA to the Equity Rollforward WP
C5
TA to the AST Report in the Equity Rollfoward WP
C6
TA to the Options Outstanding QTD tab
C7
Custom 7
C8
See comment box
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
24
Luna ndash Enabling the Future with Fiber
Proprietary measurement technology offering unprecedented combination of resolution accuracy and speed
Customers in attractive markets Military and Defense Communications Infrastructure Energy and Automotive
Positioned to take advantage of trends such as vehicle light-weighting and increasing demands on data centers and broadband capacity
Adequately capitalized to fund growth
Long-tenured experienced executive team board
Corporate culture of innovation and integrity
Overview
Appendix
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
26
Reconciliation of Net Income to Adjusted EBITDA
(1) Non-recurring charges consist of transaction-related expenses related to the acquisition of General Photonics
2020 2019 2020 2019
Reconciliation of EBITDA and Adjusted EBITDANet income 1369$ 841$ 253$ 1967$ Loss from discontinued operations net of income tax benefit of $464 - - 1436 -
Net income from continuing operations 1369 841 1689 1967 Interest expense 1 - 1 13 Investment income (4) (77) (64) (268) Income tax expense(benefit) 441 247 579 (1618) Depreciation and amortization 684 653 1363 1166
Reconciliation of Net Income to Adjusted EBITDA Full Year
(1) Non-recurring charges include the following 2017) CEO separation costs and other share-based compensation 2018) Transaction-related expenses associated with the acquisition of Micron Optics Inc 2019) Transaction related expenses and inventory step-up amortization relate to General Photonics acquisition and CFO transition expenses
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
28
New Segment Quarterly Results (in thousands)
March 31 2019 June 30 2019 Sep 30 2019 A Dec 31 2019 March 31 2020 June 30 2020
Total revenues 14833 17814 18389 19480 17141 18576
Cost of revenuesLightwave 4280 5334 5449 5070 4885 5181 Luna Labs 3785 3728 3665 4022 3892 3878
Total cost of revenues 8065 9062 9114 9092 8777 9059
Gross Profit 6768 8752 9275 10388 8364 9517
Operating expenseSelling general and administrative 6207 6003 5745 6416 6377 6202 Research development and engineering 1458 1735 2048 2255 1597 1505
Total operating expense 7665 7738 7793 8671 7974 7707
Operating income (897)$ 1014$ 1482$ 1717$ 390$ 1810$
A The Company revised its results for the three months ended September 30 2019 The Company has concluded these adjustments are not material individually or in the aggregate
Three Months Ended
Scott A Graeff President and CEO
Safe Harbor
Luna ndash Enabling the Future with Fiber
Luna is a global company
Luna has a clear vision and established history
Compelling business model with strong growth potential
Lightwave 2019 revenue1 snapshot
Luna Overview
Where Does Luna Play
Sensing
Sensing Short-range high-resolution
Sensing long-range high-speed
Sensing Material thickness
Comms Test
Comms Test Components
Comms Test Short-haul network
Luna Labs
2Q FY20 Results
Second-quarter 2020 Key Financial Results
Second-quarter 2020 and Other Recent Accomplishments
Slide Number 21
A Flexible Balance Sheet and Strong Cash Position
2020 Financial Outlook
Luna ndash Enabling the Future with Fiber
Appendix
Reconciliation of Net Income to Adjusted EBITDA
Reconciliation of Net Income to Adjusted EBITDA Full Year
New Segment Quarterly Results
(in thousands)
Three Months Ended
December 31 2018
A
March 31 2019
C
June 30 2019
September 30 2019
December 31 2019
March 31 2020
June 30 2020
Revenues
Lightwave
$ 11345
$ 10221
$ 12523
$ 13120
$ 13988
$ 11554
12933
Luna Labs
5548
6641
5291
5301
5492
5587
5642
Total revenues
16893
16862
17814
18421
19480
17141
18576
Cost of revenues
Lightwave
4002
3836
5334
5471
5070
4885
5181
Luna Labs
4268
4816
3728
3665
4022
3892
3878
Total cost of revenues
8270
8652
9062
9136
9092
8777
9059
Gross Profit
8623
8210
8752
9285
10388
8364
9517
Operating expense
Selling general and administrative
6394
7165
6003
5754
6415
6377
6202
Research development and engineering
1894
1708
1735
2047
2255
1597
1505
Total operating expense
8288
8873
7738
7801
8670
7974
7707
Operating income
$ 335
$ (663)
$ 1014
$ 1484
$ 1718
$ 390
$ 1810
Historical - Hidden
A
Includes $751000 of costs associated with the acquisition of Micron Optics
B
Unaudited pro forma financials assumes the General Photonics business was acquired on January 1 2019
C
Includes $898000 of costs associated with the acquisition of General Photonics
Year Ended December 31
(unaudited)
2016
2017
2018
2019
Reconciliation of EBITDA and Adjusted EBITDA
Net (loss)income
$ (2370)
$ 14615
$ 11004
$ 5343
Less income from discontinued operations net of income taxes
300
15866
9766
- 0
Loss from discontinued operations net of income tax benefit of $464
- 0
- 0
- 0
- 0
Net income from continuing operations
(2670)
(1251)
1238
5343
Interest expense
319
217
124
16
Investment income
- 0
- 0
(549)
(394)
Income tax (benefit)expense
(135)
(1148)
48
(1654)
Depreciation and amortization
1466
1137
908
2503
EBITDA
(1020)
(1045)
1769
5814
Share-based compensation
860
715
628
1544
Non-Recurring Charges (1)
- 0
596
751
1390
Amortization of Inventory Step-up
- 0
- 0
- 0
725
Adjusted EBITDA
$ (160)
$ 266
$ 3148
$ 9473
1
Non-recurring charges include the following 2017) CEO separation costs and other share-based compensation 2018) Transaction-related expenses associated with the acquisition of Micron Optics Inc 2019) Transaction related expenses and inventory step-up amortization relate to General Photonics acquisition and CFO transition expenses
Luna Innovations Incorporated
Reconciliation of Non-GAAP Financial Measures
(in thousands)
Three Months Ended
Six Months Ended
June 30
June 30
2020
2019
2020
2019
(Unaudited)
(Unaudited)
Reconciliation of EBITDA and Adjusted EBITDA
Net income
$ 1369
$ - 0
$ 841
$ 253
$ - 0
$ 1967
Loss from discontinued operations net of income tax benefit of $464
- 0
- 0
- 0
1436
- 0
- 0
Gain on sale of asset
- 0
- 0
- 0
- 0
- 0
- 0
Net income from continuing operations
1369
- 0
841
1689
- 0
1967
Interest expense
1
- 0
- 0
1
- 0
13
Investment income
(4)
- 0
(77)
(64)
- 0
(268)
Income tax expense(benefit)
441
- 0
247
579
- 0
(1618)
Depreciation and amortization
684
- 0
653
1363
- 0
1166
EBITDA
2490
- 0
1664
3568
- 0
1260
Share-based compensation
465
- 0
378
967
- 0
721
Non-Recurring Charges (1)
- 0
- 0
44
- 0
- 0
942
CFO Recruiting and Severance
- 0
- 0
- 0
- 0
- 0
- 0
Amortization of Inventory Step-up
- 0
- 0
310
- 0
- 0
412
- 0
- 0
- 0
- 0
- 0
- 0
Adjusted EBITDA
$ 2955
$ - 0
$ 2396
$ 4535
$ - 0
$ 3335
EBITDA Margin Percent on Total Revenues
134
93
100
39
Adjusted EBITDA Margin Percent on Total Revenues
159
134
127
102
Reconciliation of Non-GAAP EPS
Diluted EPS
$ 004
$ 002
$ 001
$ 005
Loss from discontinued operations net of income taxes
Existing Technology amortization missed from 101518-63019
- 0
15560
Amortization catch up from 101518-63019 in July 2019 only
In-process RampD
200000
0
- 0
1650000
4091764
Micron Purchase Amortization Detail - 812019 and forward
Trade Name
150000
36
4167
Customer Relationships
100000
84
1190
Existing Technology
1200000
60
20000
Amortization going forward
In-process RampD
200000
0
- 0
1650000
2535714
General Pho Purchase Amortization Detail - 312019
Trade Name
400000
36
11111
22822
Customer Relationships
600000
180
3333
22834
Existing Technology
7200000
96
75000
22827
In-process RampD
- 0
0
- 0
8200000
8944444
General Pho Inventory Step-up Amortization - 312019
WIP amp Fin Goods
724760
7
103537
Ends 93019
PampL Summary - Luna Innovations
For the Three Months Ending March 31 2020
QTD
QTD
QTD
YTD
YTD
YTD
Actual
Budget
Variance
Actual
Budget
Variance
fav(un-fav)
fav(un-fav)
Revenues
Lightwave
12933344
13366455
(433536)
24487335
25564000
(1077090)
686
Luna Labs
5642348
6075202
(432854)
11229350
11675307
(445957)
314
Total Revenues
18575692
19441657
(866390)
35716685
37239307
(1523047)
Cost of Revenues
Product and Licensing
5181057
5789978
608921
10066386
11082697
1016311
282
TDD
3877888
4448571
570683
7769627
8526736
757109
218
Total Cost of Revenues
9058945
10238549
570683
17836013
19609433
1773420
499
Gross Margin
Product and Licensing - $
7752287
7576477
175810
14420949
14481303
(60354)
Product and Licensing -
60
57
3
59
57
2
TDD - $
1764460
1626631
137829
3459723
3148571
311152
TDD -
31
27
4
31
27
4
Total Gross Margin
9516747
9203108
313639
17880672
17629874
250798
Gross Margin
51
47
4
50
47
3
501
Operating Expenses
Selling General amp Admin
6202338
8155800
1953888
12578977
14477853
1899301
Research Devel amp Engineering
1504800
647122
(857678)
3101865
2798808
(303057)
Total Operating Expenses
7707138
8802922
1096209
15680842
17276661
1595819
439
Operating Income (Loss)
1809609
400186
1409423
2199830
353213
1846617
62
Other Expense (Income)
Interest
930
985
55
1145
2195
1050
00
Investment Income
(4435)
(75000)
(70565)
(63790)
(150000)
(86210)
-02
Tax Expense
440626
118551
(498831)
579203
125253
(630706)
16
Tax Benefit from release of VA
-
-
-
-
-
-
00
Gainloss on foreigh exch
-
-
-
-
-
-
00
Other
3649
-
(3649)
(5236)
-
5236
-00
440770
44536
(396234)
511322
(22552)
(533874)
14
Income from continuing operations
1368839
355650
1805658
1688508
375765
2380491
Income from Disc Ops
Operating Income from Disc Ops
-
-
- 0
-
-
- 0
Gainloss of Asset Sale
-
-
- 0
(1435903)
-
(1435903)
Total Income from Disc Ops
- 0
- 0
- 0
(1435903)
- 0
(1435903)
Net Income (Loss)
1368839
355650
1013189
252605
375765
(123160)
07
Dividend on Preferred
- 0
- 0
- 0
- 0
- 0
- 0
Net Income (Loss) available to Common Shareholders
1368839
355650
1013189
252605
375765
(123160)
07
Depreciation
244214
491046
From Cash Flow
Amortization
439787
872410
From Cash Flow
Stock Compensation
465109
966932
From Cash Flow
Acquisition Costs
- 0
- 0
Amortization of Inventory Step-up
- 0
- 0
CFO Recruiting amp Severance
- 0
- 0
Treasury Stock Activity
63020
Stock Buyback - Held with Northland
Trade date
Settlement Date
of Shares
Avg Price
Commission
Trade date Total $
Number of Days
Weighted Avg
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
= Trades Not Settled
$000
$000
$000
$000
YTD Avg
0
0
Trade date
Settlement Date
of Shares
Avg Price
Commission
Trade date Total $
Number of Days
Weighted Avg
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
QTD Avg
0
0
0
0
2016 Amounts under program
205500
$24880840
$25086340
2017 Amounts under program
433179
$75649353
$76082532
2018 Amounts under program
132450
$30604099
$30736549
2019 Amounts under program
333953
$198663889
$199999701
Total
110508200
329798181
331905122
For Q Disclosure
Management Buyback - Held with AST
Date
Shares
YTD days os
YTD weighted avg
QTD days os
QTD Weighted Avg
Month
Quarter
Year
52720
Garrett James
6500
35
1250
35
2500
Jan
31
- 0
- 0
52720
Graeff Scott
17450
35
3356
35
6712
Feb
29
- 0
- 0
52720
Soller Brian
9000
35
1731
35
3462
Mar
31
91
91
44013
- 0
91
- 0
Apr
30
- 0
- 0
44013
- 0
91
- 0
May
31
- 0
- 0
44013
- 0
91
- 0
Jun
30
91
182
44013
- 0
91
- 0
Jul
31
- 0
- 0
44013
- 0
91
- 0
Aug
31
- 0
- 0
44013
- 0
91
- 0
Sept
30
92
274
- 0
- 0
Oct
31
- 0
- 0
- 0
- 0
Nov
30
- 0
- 0
- 0
- 0
Dec
31
92
366
32950
6337
12673
BOD buyback
YTD
$000
$000
44013
- 0
Qtr
$000
$000
44013
- 0
Luna
Date
CloseLast
1220
738
Average Close Price
1320
718
Year-To-Date
$ 696
1620
73
Quarter-To-Date
$ 652
1720
735
1820
756
1920
777
11020
787
11320
803
11420
804
11520
832
11620
85
11720
845
12120
827
12220
833
12320
849
12420
844
12720
828
12820
856
12920
85
13020
846
13120
819
2320
825
2420
821
2520
82
2620
819
2720
837
21020
85
21120
858
21220
904
21320
895
21420
897
21820
891
21920
891
22020
907
22120
923
22420
861
22520
745
22620
759
22720
707
22820
67
3220
713
3320
693
3420
719
3520
689
3620
75
3920
672
31020
66
31120
599
31220
521
31320
522
31620
491
31720
553
31820
473
31920
487
32020
48
32320
509
32420
543
32520
582
32620
617
32720
583
33020
623
33120
615
4120
585
4220
583
4320
572
4620
607
4720
605
4820
631
4920
665
41320
656
41420
683
41520
711
41620
734
41720
727
42020
73
42120
672
42220
683
42320
691
42420
715
42720
721
42820
74
42920
777
43020
763
5120
724
5420
751
5520
762
5620
76
5720
749
5820
782
51120
704
51220
705
51320
62
51420
578
51520
537
51820
591
51920
625
52020
61
52120
6
52220
609
52620
615
52720
62
52820
609
52920
61
6120
629
6220
628
6320
653
6420
649
6520
663
6820
667
6920
635
61020
643
61120
583
61220
606
61520
625
61620
631
61720
615
61820
599
61920
601
62220
616
62320
624
62420
615
62520
615
62620
571
62920
585
63020
584
Qtr
1
2
3
4
Options
Options
Aggregate Strike Price
Intrinsic Value
Outstanding
Exercisable
Outstanding
Exercisable
Outstanding
Exercisable
Luna
2418245
1309606
$6482283
$2709686
7767068
4952824
2418245
1309606
6482283
2709686
7767068
4952824
Warrants Aaron Chase Aaron ChaseCarilion exercised all warrants in Q2 and Q3 2018
0
0
0
0
2418245
1309606
6482283
2709686
Average Strike Price
$ 268
$ 207
Pull Cancelled for whole year
Cancels
Q1
35659 Aaron Chase Aaron Chase22999 of canceled shares didnrsquot show up until Q2-20 report
Aaron Chase Aaron ChaseCarilion exercised all warrants in Q2 and Q3 2018
$ 364
12990180
Outstanding 12312019
3160397
Q2
13124
$ 211
2769912
Q3
- 0
ERRORDIV0
- 0
Grants
20000
Q4
- 0
ERRORDIV0
- 0
Exercised
(662965)
48783
$ 323
15760092
Canceled
(48783)
Corrected Termed EEs from 2019
(50404)
These were corrected in June 2020
2418245
Remaining life
Options
Avg Life
- 0
Outstanding
Luna
2418245
644
Exercisable
1309606
474
Remaining service
Luna
2418245
See awards outstanding by grant price range report and Disclosure report for information on this tab
Luna Innovations
Additional Notes
EPS Calculations
During Jan-2019 and 2020 Management was awarded Performance Based Grants and Time Based Grants
63020
The Performance Based Grants vest after 3 years and are issued only if the performance is achieved
The Time Based Grants vest each year for 3 years Grants are issued once vested each year
Yearly BOD Grants
Basic EPS
DSU deferred stock units vest in a year but do not become issued until the Director leaves the Board This started in 2018
Net Income (loss) Per Share from Continuing Operations
YTD
Diluted
QTD
Diluted
DSU awards vest in May 2021 and will be added to the middle section of the EPS in May 2021
Net Income from Continuing Operations
1688508
1368839
Rich Roedel
8877
704
62500
Common Shares Outstanding
30484797
30589249
Barry Phelps
5326
704
37500
$ 006
$ 005
$ 004
$ 004
Leigh Anderson
5326
704
37500
Mary Beth Vitale
5326
704
37500
Net income (loss) Per Share attributable to common shareholders
RSU restricted stock units vest and are issued in a year and will be added to the bottom of the EPS in May 2021
Net Income (Loss) available to Shareholders
252605
1368839
Don Pastor
5326
704
37500
Common Shares Outstanding
30484797
30589249
Gary Spiegel
5326
704
37500
$ 001
$ 001
$ 004
$ 004
Net income (loss) Per Share from Discontinued Operations
Net Income from Discontinued Operations
(1435903)
- 0
Common Shares Outstanding
30484797
30589249
$ (005)
$ (004)
$ - 0
$ - 0
Diluted EPS
Net Income(Loss) available to SHs
252605
1368839
Common Shares Outstanding
30484797
30589249
Common Stock Equivalent
2010153
1876873
$ 001
- 0 Grant Thornton LLP Grant Thornton LLPAs earnings from continuing operations are negative (loss) basic and diluted EPS equal one another
$ 004 Grant Thornton LLP Grant Thornton LLPAs earnings from continuing operations are negative (loss) basic and diluted EPS equal one another
- 0 Grant Thornton LLP Grant Thornton LLPAs earnings from continuing operations are negative (loss) basic and diluted EPS equal one another
Non-GAAP Diluted EPS
Net income (loss) Per Share attributable to common shareholders
Net Income (Loss) available to Shareholders
252605
1368839
Loss from discontinued operations
1435903
- 0
Share-based compensation
966932
465109
Amortization of acquired intangibles
344405
688810
Acquisition related costs
- 0
- 0
Amortization of Inventory Step-up
- 0
- 0
Common Shares Outstanding
30484797
30589249
Common Stock Equivalent
2010153
1876873
$ 009
$ 008
YTD
QTD
Total issued shares
32470276
Average Close Price
$ 696
$ 652
Total treasury
1672741
Shares Outstanding
30797535
Net change in denominator
1404924 Kelly Bewick Aaron Chasesee Dilution (stock option) dilutive tab
1264984
BOD fees paid in DSUs Aaron Chase Aaron ChaseFrom Equity Award Transactions Report
Month
Quarter
Year
Balance at 112019 - DSU outstanding
591457
591457
Jan
31
Issued during Q1 2020
7114
7114
Feb
29
Issued during Q2 2020
3947
7894
Mar
31
91
91
Annual grant DSU vested 5112020
10521 KBSResults KBSResultsEnter 2019 DSU annual grant when vest in 2020 (probably May) you do not need to enter annual RSU because it will be issued in AST
21042
Apr
30
Deferred Equity Issuance 6012020
(7809) KBSResults Aaron ChaseM Wise and J Williamson retired from the BoD in May 2020 Wise Deferred Comp will be issued every June 1 for 10 years Williamson Deferred Comp will be issued every June 1 for 5 years
Grant Thornton LLP Grant Thornton LLPAs earnings from continuing operations are negative (loss) basic and diluted EPS equal one another
Grant Thornton LLP Grant Thornton LLPAs earnings from continuing operations are negative (loss) basic and diluted EPS equal one another
(15619)
May
31
Issued during Q3 2020
- 0
- 0
Jun
30
91
182
Issued during Q4 2020
- 0
- 0
Jul
31
Aug
31
Sept
30
92
274
Oct
31
Totals (Antidilutive)
2010153
1876873
Nov
30
Dec
31
92
366
Shares Outstanding as of 112020
31788896
As Of Date
Transaction
Reason
Name
Shares Issued
Shares Retired
Running Total
01012020
Normal
Balance Roll Forward
- 0
- 0
31788896
01082020
Normal
Option Exercise
Williamson John
12000000
- 0
31908896
01082020
Normal
Retirement - Vested Restriced Stock
Exer Options
Williamson John
- 0
2000000
31888896
01102020
Normal
Option Exercise
Roedel Rich
6000000
- 0
31948896
01142020
Normal
2019 Time-Based RSU Vesting
Messick Dale
666700
- 0
31955563
01142020
Normal
2019 Time-Based RSU Vesting
Graeff Scott
3066700
- 0
31986230
01142020
Normal
2019 Time-Based RSU Vesting
Soller Brian
1066700
- 0
31996897
01142020
Normal
2019 Time-Based RSU Vesting
Garrett James
766700
- 0
32004564
01142020
Normal
2019 Time-Based RSU Retirement
Taxes
Graeff Scott
- 0
920000
31995364
01142020
Normal
2019 Time-Based RSU Retirement
Taxes
Soller Brian
- 0
320000
31992164
01142020
Normal
2019 Time-Based RSU Retirement
Taxes
Garrett James
- 0
230000
31989864
01142020
Normal
Option Exercise
Burris Kevin
100000
- 0
31990864
01292020
Normal
Option Exercise
Carr Dustin
3212300
- 0
32022987
01272020
Normal
Option Exercise
Chen James
334000
- 0
32026327
02192020
Normal
Option Exercise
McPherson Daniel
534800
- 0
32031675
03122020
Normal
Option Exercise
Haber Todd
2500000
- 0
32056675
03122020
Normal
Option Exercise
Graver Thomas
4558100
- 0
32102256
03122020
Normal
Option Exercise
Baez Michael
911200
- 0
32111368
03062020
Normal
Option Exercise
Farooqui Salvan
1500000
- 0
32126368
05122020
Normal
Option Exercise
Baez Michael
950000
- 0
32135868
05142020
Normal
Option Exercise
Haber Todd
4300000
- 0
32178868
05142020
Normal
Option Exercise
Graver Thomas
4746100
- 0
32226329
05112020
Normal
Annual Equity Grant Vesting-BoD
Pastor Don
580000
- 0
32232129
05112020
Normal
Annual Equity Grant Vesting-BoD
Williamson John
580000
- 0
32237929
06012020
Normal
Deferred Stock Issuance-BoD
Wise Mike
980900
- 0
32247738
06012020
Normal
Deferred Stock Issuance-BoD
Williamson John
3756800
32285306
06112020
Normal
Option Exercise
Wise Mike
24000000
32525306
06112020
Normal
Retirement - Vested Stock
Exer Options
Wise Mike
6153000
32463776
06082020
Normal
Option Exercise
Pruzan Michael
400000
32467776
06292020
Normal
Option Exercise
Farooqui Salvan
250000
32470276
Date Issued
Balance Outstanding
Number of Days
Weighted Avg
Treasury Shares Weighted Average
Year-to-Date
YTD
QTD
1120
31788896
182
31788896
Graeff July 2
115000
115000
1820
31908896
175
115385
Q2 2015
29925
29925
1820
31888896
175
(19231)
2014
22725
22725
11020
31948896
173
57033
2016 Mgmt buyback
73675
73675
11420
31955563
169
6191
2016 repurchase program
205500
205500
11420
31986230
169
28477
2017 Mgmt buyback
90900
90900
11420
31996897
169
9905
2017 BOD buyback
100000
100000
11420
32004564
169
7119
2017 repurchase program
433179
433179
11420
31995364
169
(8543)
2018 repurchase program
132450
132450
11420
31992164
169
(2971)
2018 Mgmt buyback
49751
49751
11420
31989864
169
(2136)
2019 Mgmt buyback
52733
52733
11420
31990864
169
929
2019 repurchase program
333953
333953
12920
32022987
154
27181
2020 Mgmt buyback
6337
12673
12720
32026327
156
2863
21920
32031675
133
3908
164612764
165246418
31220
32056675
111
15247
31220
32102256
111
27799
31220
32111368
111
5557
567659
3620
32126368
117
9643
Treasury on AST
567664
51220
32135868
50
2610
Diff
(5)
51420
32178868
48
11341
51420
32226329
48
12517
51120
32232129
51
1625
51120
32237929
51
1625
6120
32247738
30
1617
6120
32285306
30
6193
61120
32525306
20
26374
61120
32463776
20
(6762)
6820
32467776
23
505
62920
32470276
2
27
YTD Average Shares Outstanding
32130925
Quarter-to Date
112020
31788896
91
31788896
1820
31908896
91
120000
1820
31888896
91
(20000)
11020
31948896
91
60000
11420
31955563
91
6667
11420
31986230
91
30667
11420
31996897
91
10667
11420
32004564
91
7667
11420
31995364
91
(9200)
11420
31992164
91
(3200)
11420
31989864
91
(2300)
11420
31990864
91
1000
12920
32022987
91
32123
12720
32026327
91
3340
21920
32031675
91
5348
31220
32056675
91
25000
31220
32102256
91
45581
31220
32111368
91
9112
3620
32126368
91
15000
51220
32135868
50
5220
51420
32178868
48
22681
51420
32226329
48
25034
51120
32232129
51
3251
51120
32237929
51
3251
6120
32247738
30
3234
6120
32285306
30
12385
61120
32525306
20
52747
61120
32463776
20
(13523)
6820
32467776
23
1011
62920
32470276
2
55
QTD Average Shares Outstanding
32241713
C1
TA to the Summary tab
C2
TA to the Avg Stock Price tab
C3
TA to the Options Outstanding YTD tab
C4
TA to the Equity Rollforward WP
C5
TA to the AST Report in the Equity Rollfoward WP
C6
TA to the Options Outstanding QTD tab
C7
Custom 7
C8
See comment box
Appendix
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
26
Reconciliation of Net Income to Adjusted EBITDA
(1) Non-recurring charges consist of transaction-related expenses related to the acquisition of General Photonics
2020 2019 2020 2019
Reconciliation of EBITDA and Adjusted EBITDANet income 1369$ 841$ 253$ 1967$ Loss from discontinued operations net of income tax benefit of $464 - - 1436 -
Net income from continuing operations 1369 841 1689 1967 Interest expense 1 - 1 13 Investment income (4) (77) (64) (268) Income tax expense(benefit) 441 247 579 (1618) Depreciation and amortization 684 653 1363 1166
Reconciliation of Net Income to Adjusted EBITDA Full Year
(1) Non-recurring charges include the following 2017) CEO separation costs and other share-based compensation 2018) Transaction-related expenses associated with the acquisition of Micron Optics Inc 2019) Transaction related expenses and inventory step-up amortization relate to General Photonics acquisition and CFO transition expenses
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
28
New Segment Quarterly Results (in thousands)
March 31 2019 June 30 2019 Sep 30 2019 A Dec 31 2019 March 31 2020 June 30 2020
Total revenues 14833 17814 18389 19480 17141 18576
Cost of revenuesLightwave 4280 5334 5449 5070 4885 5181 Luna Labs 3785 3728 3665 4022 3892 3878
Total cost of revenues 8065 9062 9114 9092 8777 9059
Gross Profit 6768 8752 9275 10388 8364 9517
Operating expenseSelling general and administrative 6207 6003 5745 6416 6377 6202 Research development and engineering 1458 1735 2048 2255 1597 1505
Total operating expense 7665 7738 7793 8671 7974 7707
Operating income (897)$ 1014$ 1482$ 1717$ 390$ 1810$
A The Company revised its results for the three months ended September 30 2019 The Company has concluded these adjustments are not material individually or in the aggregate
Three Months Ended
Scott A Graeff President and CEO
Safe Harbor
Luna ndash Enabling the Future with Fiber
Luna is a global company
Luna has a clear vision and established history
Compelling business model with strong growth potential
Lightwave 2019 revenue1 snapshot
Luna Overview
Where Does Luna Play
Sensing
Sensing Short-range high-resolution
Sensing long-range high-speed
Sensing Material thickness
Comms Test
Comms Test Components
Comms Test Short-haul network
Luna Labs
2Q FY20 Results
Second-quarter 2020 Key Financial Results
Second-quarter 2020 and Other Recent Accomplishments
Slide Number 21
A Flexible Balance Sheet and Strong Cash Position
2020 Financial Outlook
Luna ndash Enabling the Future with Fiber
Appendix
Reconciliation of Net Income to Adjusted EBITDA
Reconciliation of Net Income to Adjusted EBITDA Full Year
New Segment Quarterly Results
(in thousands)
Three Months Ended
December 31 2018
A
March 31 2019
C
June 30 2019
September 30 2019
December 31 2019
March 31 2020
June 30 2020
Revenues
Lightwave
$ 11345
$ 10221
$ 12523
$ 13120
$ 13988
$ 11554
12933
Luna Labs
5548
6641
5291
5301
5492
5587
5642
Total revenues
16893
16862
17814
18421
19480
17141
18576
Cost of revenues
Lightwave
4002
3836
5334
5471
5070
4885
5181
Luna Labs
4268
4816
3728
3665
4022
3892
3878
Total cost of revenues
8270
8652
9062
9136
9092
8777
9059
Gross Profit
8623
8210
8752
9285
10388
8364
9517
Operating expense
Selling general and administrative
6394
7165
6003
5754
6415
6377
6202
Research development and engineering
1894
1708
1735
2047
2255
1597
1505
Total operating expense
8288
8873
7738
7801
8670
7974
7707
Operating income
$ 335
$ (663)
$ 1014
$ 1484
$ 1718
$ 390
$ 1810
Historical - Hidden
A
Includes $751000 of costs associated with the acquisition of Micron Optics
B
Unaudited pro forma financials assumes the General Photonics business was acquired on January 1 2019
C
Includes $898000 of costs associated with the acquisition of General Photonics
Year Ended December 31
(unaudited)
2016
2017
2018
2019
Reconciliation of EBITDA and Adjusted EBITDA
Net (loss)income
$ (2370)
$ 14615
$ 11004
$ 5343
Less income from discontinued operations net of income taxes
300
15866
9766
- 0
Loss from discontinued operations net of income tax benefit of $464
- 0
- 0
- 0
- 0
Net income from continuing operations
(2670)
(1251)
1238
5343
Interest expense
319
217
124
16
Investment income
- 0
- 0
(549)
(394)
Income tax (benefit)expense
(135)
(1148)
48
(1654)
Depreciation and amortization
1466
1137
908
2503
EBITDA
(1020)
(1045)
1769
5814
Share-based compensation
860
715
628
1544
Non-Recurring Charges (1)
- 0
596
751
1390
Amortization of Inventory Step-up
- 0
- 0
- 0
725
Adjusted EBITDA
$ (160)
$ 266
$ 3148
$ 9473
1
Non-recurring charges include the following 2017) CEO separation costs and other share-based compensation 2018) Transaction-related expenses associated with the acquisition of Micron Optics Inc 2019) Transaction related expenses and inventory step-up amortization relate to General Photonics acquisition and CFO transition expenses
Luna Innovations Incorporated
Reconciliation of Non-GAAP Financial Measures
(in thousands)
Three Months Ended
Six Months Ended
June 30
June 30
2020
2019
2020
2019
(Unaudited)
(Unaudited)
Reconciliation of EBITDA and Adjusted EBITDA
Net income
$ 1369
$ - 0
$ 841
$ 253
$ - 0
$ 1967
Loss from discontinued operations net of income tax benefit of $464
- 0
- 0
- 0
1436
- 0
- 0
Gain on sale of asset
- 0
- 0
- 0
- 0
- 0
- 0
Net income from continuing operations
1369
- 0
841
1689
- 0
1967
Interest expense
1
- 0
- 0
1
- 0
13
Investment income
(4)
- 0
(77)
(64)
- 0
(268)
Income tax expense(benefit)
441
- 0
247
579
- 0
(1618)
Depreciation and amortization
684
- 0
653
1363
- 0
1166
EBITDA
2490
- 0
1664
3568
- 0
1260
Share-based compensation
465
- 0
378
967
- 0
721
Non-Recurring Charges (1)
- 0
- 0
44
- 0
- 0
942
CFO Recruiting and Severance
- 0
- 0
- 0
- 0
- 0
- 0
Amortization of Inventory Step-up
- 0
- 0
310
- 0
- 0
412
- 0
- 0
- 0
- 0
- 0
- 0
Adjusted EBITDA
$ 2955
$ - 0
$ 2396
$ 4535
$ - 0
$ 3335
EBITDA Margin Percent on Total Revenues
134
93
100
39
Adjusted EBITDA Margin Percent on Total Revenues
159
134
127
102
Reconciliation of Non-GAAP EPS
Diluted EPS
$ 004
$ 002
$ 001
$ 005
Loss from discontinued operations net of income taxes
Existing Technology amortization missed from 101518-63019
- 0
15560
Amortization catch up from 101518-63019 in July 2019 only
In-process RampD
200000
0
- 0
1650000
4091764
Micron Purchase Amortization Detail - 812019 and forward
Trade Name
150000
36
4167
Customer Relationships
100000
84
1190
Existing Technology
1200000
60
20000
Amortization going forward
In-process RampD
200000
0
- 0
1650000
2535714
General Pho Purchase Amortization Detail - 312019
Trade Name
400000
36
11111
22822
Customer Relationships
600000
180
3333
22834
Existing Technology
7200000
96
75000
22827
In-process RampD
- 0
0
- 0
8200000
8944444
General Pho Inventory Step-up Amortization - 312019
WIP amp Fin Goods
724760
7
103537
Ends 93019
PampL Summary - Luna Innovations
For the Three Months Ending March 31 2020
QTD
QTD
QTD
YTD
YTD
YTD
Actual
Budget
Variance
Actual
Budget
Variance
fav(un-fav)
fav(un-fav)
Revenues
Lightwave
12933344
13366455
(433536)
24487335
25564000
(1077090)
686
Luna Labs
5642348
6075202
(432854)
11229350
11675307
(445957)
314
Total Revenues
18575692
19441657
(866390)
35716685
37239307
(1523047)
Cost of Revenues
Product and Licensing
5181057
5789978
608921
10066386
11082697
1016311
282
TDD
3877888
4448571
570683
7769627
8526736
757109
218
Total Cost of Revenues
9058945
10238549
570683
17836013
19609433
1773420
499
Gross Margin
Product and Licensing - $
7752287
7576477
175810
14420949
14481303
(60354)
Product and Licensing -
60
57
3
59
57
2
TDD - $
1764460
1626631
137829
3459723
3148571
311152
TDD -
31
27
4
31
27
4
Total Gross Margin
9516747
9203108
313639
17880672
17629874
250798
Gross Margin
51
47
4
50
47
3
501
Operating Expenses
Selling General amp Admin
6202338
8155800
1953888
12578977
14477853
1899301
Research Devel amp Engineering
1504800
647122
(857678)
3101865
2798808
(303057)
Total Operating Expenses
7707138
8802922
1096209
15680842
17276661
1595819
439
Operating Income (Loss)
1809609
400186
1409423
2199830
353213
1846617
62
Other Expense (Income)
Interest
930
985
55
1145
2195
1050
00
Investment Income
(4435)
(75000)
(70565)
(63790)
(150000)
(86210)
-02
Tax Expense
440626
118551
(498831)
579203
125253
(630706)
16
Tax Benefit from release of VA
-
-
-
-
-
-
00
Gainloss on foreigh exch
-
-
-
-
-
-
00
Other
3649
-
(3649)
(5236)
-
5236
-00
440770
44536
(396234)
511322
(22552)
(533874)
14
Income from continuing operations
1368839
355650
1805658
1688508
375765
2380491
Income from Disc Ops
Operating Income from Disc Ops
-
-
- 0
-
-
- 0
Gainloss of Asset Sale
-
-
- 0
(1435903)
-
(1435903)
Total Income from Disc Ops
- 0
- 0
- 0
(1435903)
- 0
(1435903)
Net Income (Loss)
1368839
355650
1013189
252605
375765
(123160)
07
Dividend on Preferred
- 0
- 0
- 0
- 0
- 0
- 0
Net Income (Loss) available to Common Shareholders
1368839
355650
1013189
252605
375765
(123160)
07
Depreciation
244214
491046
From Cash Flow
Amortization
439787
872410
From Cash Flow
Stock Compensation
465109
966932
From Cash Flow
Acquisition Costs
- 0
- 0
Amortization of Inventory Step-up
- 0
- 0
CFO Recruiting amp Severance
- 0
- 0
Treasury Stock Activity
63020
Stock Buyback - Held with Northland
Trade date
Settlement Date
of Shares
Avg Price
Commission
Trade date Total $
Number of Days
Weighted Avg
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
= Trades Not Settled
$000
$000
$000
$000
YTD Avg
0
0
Trade date
Settlement Date
of Shares
Avg Price
Commission
Trade date Total $
Number of Days
Weighted Avg
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
QTD Avg
0
0
0
0
2016 Amounts under program
205500
$24880840
$25086340
2017 Amounts under program
433179
$75649353
$76082532
2018 Amounts under program
132450
$30604099
$30736549
2019 Amounts under program
333953
$198663889
$199999701
Total
110508200
329798181
331905122
For Q Disclosure
Management Buyback - Held with AST
Date
Shares
YTD days os
YTD weighted avg
QTD days os
QTD Weighted Avg
Month
Quarter
Year
52720
Garrett James
6500
35
1250
35
2500
Jan
31
- 0
- 0
52720
Graeff Scott
17450
35
3356
35
6712
Feb
29
- 0
- 0
52720
Soller Brian
9000
35
1731
35
3462
Mar
31
91
91
44013
- 0
91
- 0
Apr
30
- 0
- 0
44013
- 0
91
- 0
May
31
- 0
- 0
44013
- 0
91
- 0
Jun
30
91
182
44013
- 0
91
- 0
Jul
31
- 0
- 0
44013
- 0
91
- 0
Aug
31
- 0
- 0
44013
- 0
91
- 0
Sept
30
92
274
- 0
- 0
Oct
31
- 0
- 0
- 0
- 0
Nov
30
- 0
- 0
- 0
- 0
Dec
31
92
366
32950
6337
12673
BOD buyback
YTD
$000
$000
44013
- 0
Qtr
$000
$000
44013
- 0
Luna
Date
CloseLast
1220
738
Average Close Price
1320
718
Year-To-Date
$ 696
1620
73
Quarter-To-Date
$ 652
1720
735
1820
756
1920
777
11020
787
11320
803
11420
804
11520
832
11620
85
11720
845
12120
827
12220
833
12320
849
12420
844
12720
828
12820
856
12920
85
13020
846
13120
819
2320
825
2420
821
2520
82
2620
819
2720
837
21020
85
21120
858
21220
904
21320
895
21420
897
21820
891
21920
891
22020
907
22120
923
22420
861
22520
745
22620
759
22720
707
22820
67
3220
713
3320
693
3420
719
3520
689
3620
75
3920
672
31020
66
31120
599
31220
521
31320
522
31620
491
31720
553
31820
473
31920
487
32020
48
32320
509
32420
543
32520
582
32620
617
32720
583
33020
623
33120
615
4120
585
4220
583
4320
572
4620
607
4720
605
4820
631
4920
665
41320
656
41420
683
41520
711
41620
734
41720
727
42020
73
42120
672
42220
683
42320
691
42420
715
42720
721
42820
74
42920
777
43020
763
5120
724
5420
751
5520
762
5620
76
5720
749
5820
782
51120
704
51220
705
51320
62
51420
578
51520
537
51820
591
51920
625
52020
61
52120
6
52220
609
52620
615
52720
62
52820
609
52920
61
6120
629
6220
628
6320
653
6420
649
6520
663
6820
667
6920
635
61020
643
61120
583
61220
606
61520
625
61620
631
61720
615
61820
599
61920
601
62220
616
62320
624
62420
615
62520
615
62620
571
62920
585
63020
584
Qtr
1
2
3
4
Options
Options
Aggregate Strike Price
Intrinsic Value
Outstanding
Exercisable
Outstanding
Exercisable
Outstanding
Exercisable
Luna
2418245
1309606
$6482283
$2709686
7767068
4952824
2418245
1309606
6482283
2709686
7767068
4952824
Warrants Aaron Chase Aaron ChaseCarilion exercised all warrants in Q2 and Q3 2018
0
0
0
0
2418245
1309606
6482283
2709686
Average Strike Price
$ 268
$ 207
Pull Cancelled for whole year
Cancels
Q1
35659 Aaron Chase Aaron Chase22999 of canceled shares didnrsquot show up until Q2-20 report
Aaron Chase Aaron ChaseCarilion exercised all warrants in Q2 and Q3 2018
$ 364
12990180
Outstanding 12312019
3160397
Q2
13124
$ 211
2769912
Q3
- 0
ERRORDIV0
- 0
Grants
20000
Q4
- 0
ERRORDIV0
- 0
Exercised
(662965)
48783
$ 323
15760092
Canceled
(48783)
Corrected Termed EEs from 2019
(50404)
These were corrected in June 2020
2418245
Remaining life
Options
Avg Life
- 0
Outstanding
Luna
2418245
644
Exercisable
1309606
474
Remaining service
Luna
2418245
See awards outstanding by grant price range report and Disclosure report for information on this tab
Luna Innovations
Additional Notes
EPS Calculations
During Jan-2019 and 2020 Management was awarded Performance Based Grants and Time Based Grants
63020
The Performance Based Grants vest after 3 years and are issued only if the performance is achieved
The Time Based Grants vest each year for 3 years Grants are issued once vested each year
Yearly BOD Grants
Basic EPS
DSU deferred stock units vest in a year but do not become issued until the Director leaves the Board This started in 2018
Net Income (loss) Per Share from Continuing Operations
YTD
Diluted
QTD
Diluted
DSU awards vest in May 2021 and will be added to the middle section of the EPS in May 2021
Net Income from Continuing Operations
1688508
1368839
Rich Roedel
8877
704
62500
Common Shares Outstanding
30484797
30589249
Barry Phelps
5326
704
37500
$ 006
$ 005
$ 004
$ 004
Leigh Anderson
5326
704
37500
Mary Beth Vitale
5326
704
37500
Net income (loss) Per Share attributable to common shareholders
RSU restricted stock units vest and are issued in a year and will be added to the bottom of the EPS in May 2021
Net Income (Loss) available to Shareholders
252605
1368839
Don Pastor
5326
704
37500
Common Shares Outstanding
30484797
30589249
Gary Spiegel
5326
704
37500
$ 001
$ 001
$ 004
$ 004
Net income (loss) Per Share from Discontinued Operations
Net Income from Discontinued Operations
(1435903)
- 0
Common Shares Outstanding
30484797
30589249
$ (005)
$ (004)
$ - 0
$ - 0
Diluted EPS
Net Income(Loss) available to SHs
252605
1368839
Common Shares Outstanding
30484797
30589249
Common Stock Equivalent
2010153
1876873
$ 001
- 0 Grant Thornton LLP Grant Thornton LLPAs earnings from continuing operations are negative (loss) basic and diluted EPS equal one another
$ 004 Grant Thornton LLP Grant Thornton LLPAs earnings from continuing operations are negative (loss) basic and diluted EPS equal one another
- 0 Grant Thornton LLP Grant Thornton LLPAs earnings from continuing operations are negative (loss) basic and diluted EPS equal one another
Non-GAAP Diluted EPS
Net income (loss) Per Share attributable to common shareholders
Net Income (Loss) available to Shareholders
252605
1368839
Loss from discontinued operations
1435903
- 0
Share-based compensation
966932
465109
Amortization of acquired intangibles
344405
688810
Acquisition related costs
- 0
- 0
Amortization of Inventory Step-up
- 0
- 0
Common Shares Outstanding
30484797
30589249
Common Stock Equivalent
2010153
1876873
$ 009
$ 008
YTD
QTD
Total issued shares
32470276
Average Close Price
$ 696
$ 652
Total treasury
1672741
Shares Outstanding
30797535
Net change in denominator
1404924 Kelly Bewick Aaron Chasesee Dilution (stock option) dilutive tab
1264984
BOD fees paid in DSUs Aaron Chase Aaron ChaseFrom Equity Award Transactions Report
Month
Quarter
Year
Balance at 112019 - DSU outstanding
591457
591457
Jan
31
Issued during Q1 2020
7114
7114
Feb
29
Issued during Q2 2020
3947
7894
Mar
31
91
91
Annual grant DSU vested 5112020
10521 KBSResults KBSResultsEnter 2019 DSU annual grant when vest in 2020 (probably May) you do not need to enter annual RSU because it will be issued in AST
21042
Apr
30
Deferred Equity Issuance 6012020
(7809) KBSResults Aaron ChaseM Wise and J Williamson retired from the BoD in May 2020 Wise Deferred Comp will be issued every June 1 for 10 years Williamson Deferred Comp will be issued every June 1 for 5 years
Grant Thornton LLP Grant Thornton LLPAs earnings from continuing operations are negative (loss) basic and diluted EPS equal one another
Grant Thornton LLP Grant Thornton LLPAs earnings from continuing operations are negative (loss) basic and diluted EPS equal one another
(15619)
May
31
Issued during Q3 2020
- 0
- 0
Jun
30
91
182
Issued during Q4 2020
- 0
- 0
Jul
31
Aug
31
Sept
30
92
274
Oct
31
Totals (Antidilutive)
2010153
1876873
Nov
30
Dec
31
92
366
Shares Outstanding as of 112020
31788896
As Of Date
Transaction
Reason
Name
Shares Issued
Shares Retired
Running Total
01012020
Normal
Balance Roll Forward
- 0
- 0
31788896
01082020
Normal
Option Exercise
Williamson John
12000000
- 0
31908896
01082020
Normal
Retirement - Vested Restriced Stock
Exer Options
Williamson John
- 0
2000000
31888896
01102020
Normal
Option Exercise
Roedel Rich
6000000
- 0
31948896
01142020
Normal
2019 Time-Based RSU Vesting
Messick Dale
666700
- 0
31955563
01142020
Normal
2019 Time-Based RSU Vesting
Graeff Scott
3066700
- 0
31986230
01142020
Normal
2019 Time-Based RSU Vesting
Soller Brian
1066700
- 0
31996897
01142020
Normal
2019 Time-Based RSU Vesting
Garrett James
766700
- 0
32004564
01142020
Normal
2019 Time-Based RSU Retirement
Taxes
Graeff Scott
- 0
920000
31995364
01142020
Normal
2019 Time-Based RSU Retirement
Taxes
Soller Brian
- 0
320000
31992164
01142020
Normal
2019 Time-Based RSU Retirement
Taxes
Garrett James
- 0
230000
31989864
01142020
Normal
Option Exercise
Burris Kevin
100000
- 0
31990864
01292020
Normal
Option Exercise
Carr Dustin
3212300
- 0
32022987
01272020
Normal
Option Exercise
Chen James
334000
- 0
32026327
02192020
Normal
Option Exercise
McPherson Daniel
534800
- 0
32031675
03122020
Normal
Option Exercise
Haber Todd
2500000
- 0
32056675
03122020
Normal
Option Exercise
Graver Thomas
4558100
- 0
32102256
03122020
Normal
Option Exercise
Baez Michael
911200
- 0
32111368
03062020
Normal
Option Exercise
Farooqui Salvan
1500000
- 0
32126368
05122020
Normal
Option Exercise
Baez Michael
950000
- 0
32135868
05142020
Normal
Option Exercise
Haber Todd
4300000
- 0
32178868
05142020
Normal
Option Exercise
Graver Thomas
4746100
- 0
32226329
05112020
Normal
Annual Equity Grant Vesting-BoD
Pastor Don
580000
- 0
32232129
05112020
Normal
Annual Equity Grant Vesting-BoD
Williamson John
580000
- 0
32237929
06012020
Normal
Deferred Stock Issuance-BoD
Wise Mike
980900
- 0
32247738
06012020
Normal
Deferred Stock Issuance-BoD
Williamson John
3756800
32285306
06112020
Normal
Option Exercise
Wise Mike
24000000
32525306
06112020
Normal
Retirement - Vested Stock
Exer Options
Wise Mike
6153000
32463776
06082020
Normal
Option Exercise
Pruzan Michael
400000
32467776
06292020
Normal
Option Exercise
Farooqui Salvan
250000
32470276
Date Issued
Balance Outstanding
Number of Days
Weighted Avg
Treasury Shares Weighted Average
Year-to-Date
YTD
QTD
1120
31788896
182
31788896
Graeff July 2
115000
115000
1820
31908896
175
115385
Q2 2015
29925
29925
1820
31888896
175
(19231)
2014
22725
22725
11020
31948896
173
57033
2016 Mgmt buyback
73675
73675
11420
31955563
169
6191
2016 repurchase program
205500
205500
11420
31986230
169
28477
2017 Mgmt buyback
90900
90900
11420
31996897
169
9905
2017 BOD buyback
100000
100000
11420
32004564
169
7119
2017 repurchase program
433179
433179
11420
31995364
169
(8543)
2018 repurchase program
132450
132450
11420
31992164
169
(2971)
2018 Mgmt buyback
49751
49751
11420
31989864
169
(2136)
2019 Mgmt buyback
52733
52733
11420
31990864
169
929
2019 repurchase program
333953
333953
12920
32022987
154
27181
2020 Mgmt buyback
6337
12673
12720
32026327
156
2863
21920
32031675
133
3908
164612764
165246418
31220
32056675
111
15247
31220
32102256
111
27799
31220
32111368
111
5557
567659
3620
32126368
117
9643
Treasury on AST
567664
51220
32135868
50
2610
Diff
(5)
51420
32178868
48
11341
51420
32226329
48
12517
51120
32232129
51
1625
51120
32237929
51
1625
6120
32247738
30
1617
6120
32285306
30
6193
61120
32525306
20
26374
61120
32463776
20
(6762)
6820
32467776
23
505
62920
32470276
2
27
YTD Average Shares Outstanding
32130925
Quarter-to Date
112020
31788896
91
31788896
1820
31908896
91
120000
1820
31888896
91
(20000)
11020
31948896
91
60000
11420
31955563
91
6667
11420
31986230
91
30667
11420
31996897
91
10667
11420
32004564
91
7667
11420
31995364
91
(9200)
11420
31992164
91
(3200)
11420
31989864
91
(2300)
11420
31990864
91
1000
12920
32022987
91
32123
12720
32026327
91
3340
21920
32031675
91
5348
31220
32056675
91
25000
31220
32102256
91
45581
31220
32111368
91
9112
3620
32126368
91
15000
51220
32135868
50
5220
51420
32178868
48
22681
51420
32226329
48
25034
51120
32232129
51
3251
51120
32237929
51
3251
6120
32247738
30
3234
6120
32285306
30
12385
61120
32525306
20
52747
61120
32463776
20
(13523)
6820
32467776
23
1011
62920
32470276
2
55
QTD Average Shares Outstanding
32241713
C1
TA to the Summary tab
C2
TA to the Avg Stock Price tab
C3
TA to the Options Outstanding YTD tab
C4
TA to the Equity Rollforward WP
C5
TA to the AST Report in the Equity Rollfoward WP
C6
TA to the Options Outstanding QTD tab
C7
Custom 7
C8
See comment box
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
26
Reconciliation of Net Income to Adjusted EBITDA
(1) Non-recurring charges consist of transaction-related expenses related to the acquisition of General Photonics
2020 2019 2020 2019
Reconciliation of EBITDA and Adjusted EBITDANet income 1369$ 841$ 253$ 1967$ Loss from discontinued operations net of income tax benefit of $464 - - 1436 -
Net income from continuing operations 1369 841 1689 1967 Interest expense 1 - 1 13 Investment income (4) (77) (64) (268) Income tax expense(benefit) 441 247 579 (1618) Depreciation and amortization 684 653 1363 1166
Reconciliation of Net Income to Adjusted EBITDA Full Year
(1) Non-recurring charges include the following 2017) CEO separation costs and other share-based compensation 2018) Transaction-related expenses associated with the acquisition of Micron Optics Inc 2019) Transaction related expenses and inventory step-up amortization relate to General Photonics acquisition and CFO transition expenses
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
28
New Segment Quarterly Results (in thousands)
March 31 2019 June 30 2019 Sep 30 2019 A Dec 31 2019 March 31 2020 June 30 2020
Total revenues 14833 17814 18389 19480 17141 18576
Cost of revenuesLightwave 4280 5334 5449 5070 4885 5181 Luna Labs 3785 3728 3665 4022 3892 3878
Total cost of revenues 8065 9062 9114 9092 8777 9059
Gross Profit 6768 8752 9275 10388 8364 9517
Operating expenseSelling general and administrative 6207 6003 5745 6416 6377 6202 Research development and engineering 1458 1735 2048 2255 1597 1505
Total operating expense 7665 7738 7793 8671 7974 7707
Operating income (897)$ 1014$ 1482$ 1717$ 390$ 1810$
A The Company revised its results for the three months ended September 30 2019 The Company has concluded these adjustments are not material individually or in the aggregate
Three Months Ended
Scott A Graeff President and CEO
Safe Harbor
Luna ndash Enabling the Future with Fiber
Luna is a global company
Luna has a clear vision and established history
Compelling business model with strong growth potential
Lightwave 2019 revenue1 snapshot
Luna Overview
Where Does Luna Play
Sensing
Sensing Short-range high-resolution
Sensing long-range high-speed
Sensing Material thickness
Comms Test
Comms Test Components
Comms Test Short-haul network
Luna Labs
2Q FY20 Results
Second-quarter 2020 Key Financial Results
Second-quarter 2020 and Other Recent Accomplishments
Slide Number 21
A Flexible Balance Sheet and Strong Cash Position
2020 Financial Outlook
Luna ndash Enabling the Future with Fiber
Appendix
Reconciliation of Net Income to Adjusted EBITDA
Reconciliation of Net Income to Adjusted EBITDA Full Year
New Segment Quarterly Results
(in thousands)
Three Months Ended
December 31 2018
A
March 31 2019
C
June 30 2019
September 30 2019
December 31 2019
March 31 2020
June 30 2020
Revenues
Lightwave
$ 11345
$ 10221
$ 12523
$ 13120
$ 13988
$ 11554
12933
Luna Labs
5548
6641
5291
5301
5492
5587
5642
Total revenues
16893
16862
17814
18421
19480
17141
18576
Cost of revenues
Lightwave
4002
3836
5334
5471
5070
4885
5181
Luna Labs
4268
4816
3728
3665
4022
3892
3878
Total cost of revenues
8270
8652
9062
9136
9092
8777
9059
Gross Profit
8623
8210
8752
9285
10388
8364
9517
Operating expense
Selling general and administrative
6394
7165
6003
5754
6415
6377
6202
Research development and engineering
1894
1708
1735
2047
2255
1597
1505
Total operating expense
8288
8873
7738
7801
8670
7974
7707
Operating income
$ 335
$ (663)
$ 1014
$ 1484
$ 1718
$ 390
$ 1810
Historical - Hidden
A
Includes $751000 of costs associated with the acquisition of Micron Optics
B
Unaudited pro forma financials assumes the General Photonics business was acquired on January 1 2019
C
Includes $898000 of costs associated with the acquisition of General Photonics
Year Ended December 31
(unaudited)
2016
2017
2018
2019
Reconciliation of EBITDA and Adjusted EBITDA
Net (loss)income
$ (2370)
$ 14615
$ 11004
$ 5343
Less income from discontinued operations net of income taxes
300
15866
9766
- 0
Loss from discontinued operations net of income tax benefit of $464
- 0
- 0
- 0
- 0
Net income from continuing operations
(2670)
(1251)
1238
5343
Interest expense
319
217
124
16
Investment income
- 0
- 0
(549)
(394)
Income tax (benefit)expense
(135)
(1148)
48
(1654)
Depreciation and amortization
1466
1137
908
2503
EBITDA
(1020)
(1045)
1769
5814
Share-based compensation
860
715
628
1544
Non-Recurring Charges (1)
- 0
596
751
1390
Amortization of Inventory Step-up
- 0
- 0
- 0
725
Adjusted EBITDA
$ (160)
$ 266
$ 3148
$ 9473
1
Non-recurring charges include the following 2017) CEO separation costs and other share-based compensation 2018) Transaction-related expenses associated with the acquisition of Micron Optics Inc 2019) Transaction related expenses and inventory step-up amortization relate to General Photonics acquisition and CFO transition expenses
Luna Innovations Incorporated
Reconciliation of Non-GAAP Financial Measures
(in thousands)
Three Months Ended
Six Months Ended
June 30
June 30
2020
2019
2020
2019
(Unaudited)
(Unaudited)
Reconciliation of EBITDA and Adjusted EBITDA
Net income
$ 1369
$ - 0
$ 841
$ 253
$ - 0
$ 1967
Loss from discontinued operations net of income tax benefit of $464
- 0
- 0
- 0
1436
- 0
- 0
Gain on sale of asset
- 0
- 0
- 0
- 0
- 0
- 0
Net income from continuing operations
1369
- 0
841
1689
- 0
1967
Interest expense
1
- 0
- 0
1
- 0
13
Investment income
(4)
- 0
(77)
(64)
- 0
(268)
Income tax expense(benefit)
441
- 0
247
579
- 0
(1618)
Depreciation and amortization
684
- 0
653
1363
- 0
1166
EBITDA
2490
- 0
1664
3568
- 0
1260
Share-based compensation
465
- 0
378
967
- 0
721
Non-Recurring Charges (1)
- 0
- 0
44
- 0
- 0
942
CFO Recruiting and Severance
- 0
- 0
- 0
- 0
- 0
- 0
Amortization of Inventory Step-up
- 0
- 0
310
- 0
- 0
412
- 0
- 0
- 0
- 0
- 0
- 0
Adjusted EBITDA
$ 2955
$ - 0
$ 2396
$ 4535
$ - 0
$ 3335
EBITDA Margin Percent on Total Revenues
134
93
100
39
Adjusted EBITDA Margin Percent on Total Revenues
159
134
127
102
Reconciliation of Non-GAAP EPS
Diluted EPS
$ 004
$ 002
$ 001
$ 005
Loss from discontinued operations net of income taxes
Existing Technology amortization missed from 101518-63019
- 0
15560
Amortization catch up from 101518-63019 in July 2019 only
In-process RampD
200000
0
- 0
1650000
4091764
Micron Purchase Amortization Detail - 812019 and forward
Trade Name
150000
36
4167
Customer Relationships
100000
84
1190
Existing Technology
1200000
60
20000
Amortization going forward
In-process RampD
200000
0
- 0
1650000
2535714
General Pho Purchase Amortization Detail - 312019
Trade Name
400000
36
11111
22822
Customer Relationships
600000
180
3333
22834
Existing Technology
7200000
96
75000
22827
In-process RampD
- 0
0
- 0
8200000
8944444
General Pho Inventory Step-up Amortization - 312019
WIP amp Fin Goods
724760
7
103537
Ends 93019
PampL Summary - Luna Innovations
For the Three Months Ending March 31 2020
QTD
QTD
QTD
YTD
YTD
YTD
Actual
Budget
Variance
Actual
Budget
Variance
fav(un-fav)
fav(un-fav)
Revenues
Lightwave
12933344
13366455
(433536)
24487335
25564000
(1077090)
686
Luna Labs
5642348
6075202
(432854)
11229350
11675307
(445957)
314
Total Revenues
18575692
19441657
(866390)
35716685
37239307
(1523047)
Cost of Revenues
Product and Licensing
5181057
5789978
608921
10066386
11082697
1016311
282
TDD
3877888
4448571
570683
7769627
8526736
757109
218
Total Cost of Revenues
9058945
10238549
570683
17836013
19609433
1773420
499
Gross Margin
Product and Licensing - $
7752287
7576477
175810
14420949
14481303
(60354)
Product and Licensing -
60
57
3
59
57
2
TDD - $
1764460
1626631
137829
3459723
3148571
311152
TDD -
31
27
4
31
27
4
Total Gross Margin
9516747
9203108
313639
17880672
17629874
250798
Gross Margin
51
47
4
50
47
3
501
Operating Expenses
Selling General amp Admin
6202338
8155800
1953888
12578977
14477853
1899301
Research Devel amp Engineering
1504800
647122
(857678)
3101865
2798808
(303057)
Total Operating Expenses
7707138
8802922
1096209
15680842
17276661
1595819
439
Operating Income (Loss)
1809609
400186
1409423
2199830
353213
1846617
62
Other Expense (Income)
Interest
930
985
55
1145
2195
1050
00
Investment Income
(4435)
(75000)
(70565)
(63790)
(150000)
(86210)
-02
Tax Expense
440626
118551
(498831)
579203
125253
(630706)
16
Tax Benefit from release of VA
-
-
-
-
-
-
00
Gainloss on foreigh exch
-
-
-
-
-
-
00
Other
3649
-
(3649)
(5236)
-
5236
-00
440770
44536
(396234)
511322
(22552)
(533874)
14
Income from continuing operations
1368839
355650
1805658
1688508
375765
2380491
Income from Disc Ops
Operating Income from Disc Ops
-
-
- 0
-
-
- 0
Gainloss of Asset Sale
-
-
- 0
(1435903)
-
(1435903)
Total Income from Disc Ops
- 0
- 0
- 0
(1435903)
- 0
(1435903)
Net Income (Loss)
1368839
355650
1013189
252605
375765
(123160)
07
Dividend on Preferred
- 0
- 0
- 0
- 0
- 0
- 0
Net Income (Loss) available to Common Shareholders
1368839
355650
1013189
252605
375765
(123160)
07
Depreciation
244214
491046
From Cash Flow
Amortization
439787
872410
From Cash Flow
Stock Compensation
465109
966932
From Cash Flow
Acquisition Costs
- 0
- 0
Amortization of Inventory Step-up
- 0
- 0
CFO Recruiting amp Severance
- 0
- 0
Treasury Stock Activity
63020
Stock Buyback - Held with Northland
Trade date
Settlement Date
of Shares
Avg Price
Commission
Trade date Total $
Number of Days
Weighted Avg
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
= Trades Not Settled
$000
$000
$000
$000
YTD Avg
0
0
Trade date
Settlement Date
of Shares
Avg Price
Commission
Trade date Total $
Number of Days
Weighted Avg
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
91
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
$000
44013
- 0
$000
$000
QTD Avg
0
0
0
0
2016 Amounts under program
205500
$24880840
$25086340
2017 Amounts under program
433179
$75649353
$76082532
2018 Amounts under program
132450
$30604099
$30736549
2019 Amounts under program
333953
$198663889
$199999701
Total
110508200
329798181
331905122
For Q Disclosure
Management Buyback - Held with AST
Date
Shares
YTD days os
YTD weighted avg
QTD days os
QTD Weighted Avg
Month
Quarter
Year
52720
Garrett James
6500
35
1250
35
2500
Jan
31
- 0
- 0
52720
Graeff Scott
17450
35
3356
35
6712
Feb
29
- 0
- 0
52720
Soller Brian
9000
35
1731
35
3462
Mar
31
91
91
44013
- 0
91
- 0
Apr
30
- 0
- 0
44013
- 0
91
- 0
May
31
- 0
- 0
44013
- 0
91
- 0
Jun
30
91
182
44013
- 0
91
- 0
Jul
31
- 0
- 0
44013
- 0
91
- 0
Aug
31
- 0
- 0
44013
- 0
91
- 0
Sept
30
92
274
- 0
- 0
Oct
31
- 0
- 0
- 0
- 0
Nov
30
- 0
- 0
- 0
- 0
Dec
31
92
366
32950
6337
12673
BOD buyback
YTD
$000
$000
44013
- 0
Qtr
$000
$000
44013
- 0
Luna
Date
CloseLast
1220
738
Average Close Price
1320
718
Year-To-Date
$ 696
1620
73
Quarter-To-Date
$ 652
1720
735
1820
756
1920
777
11020
787
11320
803
11420
804
11520
832
11620
85
11720
845
12120
827
12220
833
12320
849
12420
844
12720
828
12820
856
12920
85
13020
846
13120
819
2320
825
2420
821
2520
82
2620
819
2720
837
21020
85
21120
858
21220
904
21320
895
21420
897
21820
891
21920
891
22020
907
22120
923
22420
861
22520
745
22620
759
22720
707
22820
67
3220
713
3320
693
3420
719
3520
689
3620
75
3920
672
31020
66
31120
599
31220
521
31320
522
31620
491
31720
553
31820
473
31920
487
32020
48
32320
509
32420
543
32520
582
32620
617
32720
583
33020
623
33120
615
4120
585
4220
583
4320
572
4620
607
4720
605
4820
631
4920
665
41320
656
41420
683
41520
711
41620
734
41720
727
42020
73
42120
672
42220
683
42320
691
42420
715
42720
721
42820
74
42920
777
43020
763
5120
724
5420
751
5520
762
5620
76
5720
749
5820
782
51120
704
51220
705
51320
62
51420
578
51520
537
51820
591
51920
625
52020
61
52120
6
52220
609
52620
615
52720
62
52820
609
52920
61
6120
629
6220
628
6320
653
6420
649
6520
663
6820
667
6920
635
61020
643
61120
583
61220
606
61520
625
61620
631
61720
615
61820
599
61920
601
62220
616
62320
624
62420
615
62520
615
62620
571
62920
585
63020
584
Qtr
1
2
3
4
Options
Options
Aggregate Strike Price
Intrinsic Value
Outstanding
Exercisable
Outstanding
Exercisable
Outstanding
Exercisable
Luna
2418245
1309606
$6482283
$2709686
7767068
4952824
2418245
1309606
6482283
2709686
7767068
4952824
Warrants Aaron Chase Aaron ChaseCarilion exercised all warrants in Q2 and Q3 2018
0
0
0
0
2418245
1309606
6482283
2709686
Average Strike Price
$ 268
$ 207
Pull Cancelled for whole year
Cancels
Q1
35659 Aaron Chase Aaron Chase22999 of canceled shares didnrsquot show up until Q2-20 report
Aaron Chase Aaron ChaseCarilion exercised all warrants in Q2 and Q3 2018
$ 364
12990180
Outstanding 12312019
3160397
Q2
13124
$ 211
2769912
Q3
- 0
ERRORDIV0
- 0
Grants
20000
Q4
- 0
ERRORDIV0
- 0
Exercised
(662965)
48783
$ 323
15760092
Canceled
(48783)
Corrected Termed EEs from 2019
(50404)
These were corrected in June 2020
2418245
Remaining life
Options
Avg Life
- 0
Outstanding
Luna
2418245
644
Exercisable
1309606
474
Remaining service
Luna
2418245
See awards outstanding by grant price range report and Disclosure report for information on this tab
Luna Innovations
Additional Notes
EPS Calculations
During Jan-2019 and 2020 Management was awarded Performance Based Grants and Time Based Grants
63020
The Performance Based Grants vest after 3 years and are issued only if the performance is achieved
The Time Based Grants vest each year for 3 years Grants are issued once vested each year
Yearly BOD Grants
Basic EPS
DSU deferred stock units vest in a year but do not become issued until the Director leaves the Board This started in 2018
Net Income (loss) Per Share from Continuing Operations
YTD
Diluted
QTD
Diluted
DSU awards vest in May 2021 and will be added to the middle section of the EPS in May 2021
Net Income from Continuing Operations
1688508
1368839
Rich Roedel
8877
704
62500
Common Shares Outstanding
30484797
30589249
Barry Phelps
5326
704
37500
$ 006
$ 005
$ 004
$ 004
Leigh Anderson
5326
704
37500
Mary Beth Vitale
5326
704
37500
Net income (loss) Per Share attributable to common shareholders
RSU restricted stock units vest and are issued in a year and will be added to the bottom of the EPS in May 2021
Net Income (Loss) available to Shareholders
252605
1368839
Don Pastor
5326
704
37500
Common Shares Outstanding
30484797
30589249
Gary Spiegel
5326
704
37500
$ 001
$ 001
$ 004
$ 004
Net income (loss) Per Share from Discontinued Operations
Net Income from Discontinued Operations
(1435903)
- 0
Common Shares Outstanding
30484797
30589249
$ (005)
$ (004)
$ - 0
$ - 0
Diluted EPS
Net Income(Loss) available to SHs
252605
1368839
Common Shares Outstanding
30484797
30589249
Common Stock Equivalent
2010153
1876873
$ 001
- 0 Grant Thornton LLP Grant Thornton LLPAs earnings from continuing operations are negative (loss) basic and diluted EPS equal one another
$ 004 Grant Thornton LLP Grant Thornton LLPAs earnings from continuing operations are negative (loss) basic and diluted EPS equal one another
- 0 Grant Thornton LLP Grant Thornton LLPAs earnings from continuing operations are negative (loss) basic and diluted EPS equal one another
Non-GAAP Diluted EPS
Net income (loss) Per Share attributable to common shareholders
Net Income (Loss) available to Shareholders
252605
1368839
Loss from discontinued operations
1435903
- 0
Share-based compensation
966932
465109
Amortization of acquired intangibles
344405
688810
Acquisition related costs
- 0
- 0
Amortization of Inventory Step-up
- 0
- 0
Common Shares Outstanding
30484797
30589249
Common Stock Equivalent
2010153
1876873
$ 009
$ 008
YTD
QTD
Total issued shares
32470276
Average Close Price
$ 696
$ 652
Total treasury
1672741
Shares Outstanding
30797535
Net change in denominator
1404924 Kelly Bewick Aaron Chasesee Dilution (stock option) dilutive tab
1264984
BOD fees paid in DSUs Aaron Chase Aaron ChaseFrom Equity Award Transactions Report
Month
Quarter
Year
Balance at 112019 - DSU outstanding
591457
591457
Jan
31
Issued during Q1 2020
7114
7114
Feb
29
Issued during Q2 2020
3947
7894
Mar
31
91
91
Annual grant DSU vested 5112020
10521 KBSResults KBSResultsEnter 2019 DSU annual grant when vest in 2020 (probably May) you do not need to enter annual RSU because it will be issued in AST
21042
Apr
30
Deferred Equity Issuance 6012020
(7809) KBSResults Aaron ChaseM Wise and J Williamson retired from the BoD in May 2020 Wise Deferred Comp will be issued every June 1 for 10 years Williamson Deferred Comp will be issued every June 1 for 5 years
Grant Thornton LLP Grant Thornton LLPAs earnings from continuing operations are negative (loss) basic and diluted EPS equal one another
Grant Thornton LLP Grant Thornton LLPAs earnings from continuing operations are negative (loss) basic and diluted EPS equal one another
(15619)
May
31
Issued during Q3 2020
- 0
- 0
Jun
30
91
182
Issued during Q4 2020
- 0
- 0
Jul
31
Aug
31
Sept
30
92
274
Oct
31
Totals (Antidilutive)
2010153
1876873
Nov
30
Dec
31
92
366
Shares Outstanding as of 112020
31788896
As Of Date
Transaction
Reason
Name
Shares Issued
Shares Retired
Running Total
01012020
Normal
Balance Roll Forward
- 0
- 0
31788896
01082020
Normal
Option Exercise
Williamson John
12000000
- 0
31908896
01082020
Normal
Retirement - Vested Restriced Stock
Exer Options
Williamson John
- 0
2000000
31888896
01102020
Normal
Option Exercise
Roedel Rich
6000000
- 0
31948896
01142020
Normal
2019 Time-Based RSU Vesting
Messick Dale
666700
- 0
31955563
01142020
Normal
2019 Time-Based RSU Vesting
Graeff Scott
3066700
- 0
31986230
01142020
Normal
2019 Time-Based RSU Vesting
Soller Brian
1066700
- 0
31996897
01142020
Normal
2019 Time-Based RSU Vesting
Garrett James
766700
- 0
32004564
01142020
Normal
2019 Time-Based RSU Retirement
Taxes
Graeff Scott
- 0
920000
31995364
01142020
Normal
2019 Time-Based RSU Retirement
Taxes
Soller Brian
- 0
320000
31992164
01142020
Normal
2019 Time-Based RSU Retirement
Taxes
Garrett James
- 0
230000
31989864
01142020
Normal
Option Exercise
Burris Kevin
100000
- 0
31990864
01292020
Normal
Option Exercise
Carr Dustin
3212300
- 0
32022987
01272020
Normal
Option Exercise
Chen James
334000
- 0
32026327
02192020
Normal
Option Exercise
McPherson Daniel
534800
- 0
32031675
03122020
Normal
Option Exercise
Haber Todd
2500000
- 0
32056675
03122020
Normal
Option Exercise
Graver Thomas
4558100
- 0
32102256
03122020
Normal
Option Exercise
Baez Michael
911200
- 0
32111368
03062020
Normal
Option Exercise
Farooqui Salvan
1500000
- 0
32126368
05122020
Normal
Option Exercise
Baez Michael
950000
- 0
32135868
05142020
Normal
Option Exercise
Haber Todd
4300000
- 0
32178868
05142020
Normal
Option Exercise
Graver Thomas
4746100
- 0
32226329
05112020
Normal
Annual Equity Grant Vesting-BoD
Pastor Don
580000
- 0
32232129
05112020
Normal
Annual Equity Grant Vesting-BoD
Williamson John
580000
- 0
32237929
06012020
Normal
Deferred Stock Issuance-BoD
Wise Mike
980900
- 0
32247738
06012020
Normal
Deferred Stock Issuance-BoD
Williamson John
3756800
32285306
06112020
Normal
Option Exercise
Wise Mike
24000000
32525306
06112020
Normal
Retirement - Vested Stock
Exer Options
Wise Mike
6153000
32463776
06082020
Normal
Option Exercise
Pruzan Michael
400000
32467776
06292020
Normal
Option Exercise
Farooqui Salvan
250000
32470276
Date Issued
Balance Outstanding
Number of Days
Weighted Avg
Treasury Shares Weighted Average
Year-to-Date
YTD
QTD
1120
31788896
182
31788896
Graeff July 2
115000
115000
1820
31908896
175
115385
Q2 2015
29925
29925
1820
31888896
175
(19231)
2014
22725
22725
11020
31948896
173
57033
2016 Mgmt buyback
73675
73675
11420
31955563
169
6191
2016 repurchase program
205500
205500
11420
31986230
169
28477
2017 Mgmt buyback
90900
90900
11420
31996897
169
9905
2017 BOD buyback
100000
100000
11420
32004564
169
7119
2017 repurchase program
433179
433179
11420
31995364
169
(8543)
2018 repurchase program
132450
132450
11420
31992164
169
(2971)
2018 Mgmt buyback
49751
49751
11420
31989864
169
(2136)
2019 Mgmt buyback
52733
52733
11420
31990864
169
929
2019 repurchase program
333953
333953
12920
32022987
154
27181
2020 Mgmt buyback
6337
12673
12720
32026327
156
2863
21920
32031675
133
3908
164612764
165246418
31220
32056675
111
15247
31220
32102256
111
27799
31220
32111368
111
5557
567659
3620
32126368
117
9643
Treasury on AST
567664
51220
32135868
50
2610
Diff
(5)
51420
32178868
48
11341
51420
32226329
48
12517
51120
32232129
51
1625
51120
32237929
51
1625
6120
32247738
30
1617
6120
32285306
30
6193
61120
32525306
20
26374
61120
32463776
20
(6762)
6820
32467776
23
505
62920
32470276
2
27
YTD Average Shares Outstanding
32130925
Quarter-to Date
112020
31788896
91
31788896
1820
31908896
91
120000
1820
31888896
91
(20000)
11020
31948896
91
60000
11420
31955563
91
6667
11420
31986230
91
30667
11420
31996897
91
10667
11420
32004564
91
7667
11420
31995364
91
(9200)
11420
31992164
91
(3200)
11420
31989864
91
(2300)
11420
31990864
91
1000
12920
32022987
91
32123
12720
32026327
91
3340
21920
32031675
91
5348
31220
32056675
91
25000
31220
32102256
91
45581
31220
32111368
91
9112
3620
32126368
91
15000
51220
32135868
50
5220
51420
32178868
48
22681
51420
32226329
48
25034
51120
32232129
51
3251
51120
32237929
51
3251
6120
32247738
30
3234
6120
32285306
30
12385
61120
32525306
20
52747
61120
32463776
20
(13523)
6820
32467776
23
1011
62920
32470276
2
55
QTD Average Shares Outstanding
32241713
C1
TA to the Summary tab
C2
TA to the Avg Stock Price tab
C3
TA to the Options Outstanding YTD tab
C4
TA to the Equity Rollforward WP
C5
TA to the AST Report in the Equity Rollfoward WP
C6
TA to the Options Outstanding QTD tab
C7
Custom 7
C8
See comment box
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
27
Reconciliation of Net Income to Adjusted EBITDA Full Year
(1) Non-recurring charges include the following 2017) CEO separation costs and other share-based compensation 2018) Transaction-related expenses associated with the acquisition of Micron Optics Inc 2019) Transaction related expenses and inventory step-up amortization relate to General Photonics acquisition and CFO transition expenses
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
28
New Segment Quarterly Results (in thousands)
March 31 2019 June 30 2019 Sep 30 2019 A Dec 31 2019 March 31 2020 June 30 2020
Total revenues 14833 17814 18389 19480 17141 18576
Cost of revenuesLightwave 4280 5334 5449 5070 4885 5181 Luna Labs 3785 3728 3665 4022 3892 3878
Total cost of revenues 8065 9062 9114 9092 8777 9059
Gross Profit 6768 8752 9275 10388 8364 9517
Operating expenseSelling general and administrative 6207 6003 5745 6416 6377 6202 Research development and engineering 1458 1735 2048 2255 1597 1505
Total operating expense 7665 7738 7793 8671 7974 7707
Operating income (897)$ 1014$ 1482$ 1717$ 390$ 1810$
A The Company revised its results for the three months ended September 30 2019 The Company has concluded these adjustments are not material individually or in the aggregate
Three Months Ended
Scott A Graeff President and CEO
Safe Harbor
Luna ndash Enabling the Future with Fiber
Luna is a global company
Luna has a clear vision and established history
Compelling business model with strong growth potential
Lightwave 2019 revenue1 snapshot
Luna Overview
Where Does Luna Play
Sensing
Sensing Short-range high-resolution
Sensing long-range high-speed
Sensing Material thickness
Comms Test
Comms Test Components
Comms Test Short-haul network
Luna Labs
2Q FY20 Results
Second-quarter 2020 Key Financial Results
Second-quarter 2020 and Other Recent Accomplishments
Slide Number 21
A Flexible Balance Sheet and Strong Cash Position
2020 Financial Outlook
Luna ndash Enabling the Future with Fiber
Appendix
Reconciliation of Net Income to Adjusted EBITDA
Reconciliation of Net Income to Adjusted EBITDA Full Year
New Segment Quarterly Results
NASDAQ LUNALuna Innovations Incorporatedcopy 2020
28
New Segment Quarterly Results (in thousands)
March 31 2019 June 30 2019 Sep 30 2019 A Dec 31 2019 March 31 2020 June 30 2020
Total revenues 14833 17814 18389 19480 17141 18576
Cost of revenuesLightwave 4280 5334 5449 5070 4885 5181 Luna Labs 3785 3728 3665 4022 3892 3878
Total cost of revenues 8065 9062 9114 9092 8777 9059
Gross Profit 6768 8752 9275 10388 8364 9517
Operating expenseSelling general and administrative 6207 6003 5745 6416 6377 6202 Research development and engineering 1458 1735 2048 2255 1597 1505
Total operating expense 7665 7738 7793 8671 7974 7707
Operating income (897)$ 1014$ 1482$ 1717$ 390$ 1810$
A The Company revised its results for the three months ended September 30 2019 The Company has concluded these adjustments are not material individually or in the aggregate
Three Months Ended
Scott A Graeff President and CEO
Safe Harbor
Luna ndash Enabling the Future with Fiber
Luna is a global company
Luna has a clear vision and established history
Compelling business model with strong growth potential
Lightwave 2019 revenue1 snapshot
Luna Overview
Where Does Luna Play
Sensing
Sensing Short-range high-resolution
Sensing long-range high-speed
Sensing Material thickness
Comms Test
Comms Test Components
Comms Test Short-haul network
Luna Labs
2Q FY20 Results
Second-quarter 2020 Key Financial Results
Second-quarter 2020 and Other Recent Accomplishments
Slide Number 21
A Flexible Balance Sheet and Strong Cash Position
2020 Financial Outlook
Luna ndash Enabling the Future with Fiber
Appendix
Reconciliation of Net Income to Adjusted EBITDA
Reconciliation of Net Income to Adjusted EBITDA Full Year
