nLIGHT, Inc. (NASDAQ:LASR) Q3 2022 Earnings Conference Call November 3, 2022 5:00 PM ET Company Participants Joseph Corso - Chief Financial Officer Scott Keeney - Chairman and CEO Conference Call Participants Greg Palm - Craig-Hallum Capital Group Mark Miller - The Benchmark Company Hans Chung - D.A. Davidson Ruben Roy - Stifel Operator Good afternoon. And welcome to the nLIGHT Third Quarter 2022 Earnings Conference Call. All participants will be in a listen-only mode. [Operator Instructions] After today’s ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ________________________________________________________ FORM 10-Q ________________________________________________________ (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2022 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number 001-38462 ___ ...

nLIGHT, Inc. (NASDAQ:LASR) Q2 2022 Earnings Conference Call August 4, 2022 5:00 PM ET Company Participants Joe Corso – Chief Financial Officer Scott Keeney – Chairman and Chief Executive Officer Conference Call Participants Greg Palm – Craig-Hallum Jim Ricchiuti – Needham & Company Patrick Ho – Stifel Hans Chung – D.A. Davidson Paretosh Misra – Berenberg Capital Markets Mark Miller – The Benchmark Company Operator Good day, and welcome to the nLIGHT Second Quarter 2022 Earnings Conference Call. All particip ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ________________________________________________________ FORM 10-Q ________________________________________________________ (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2022 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number 001-38462 ________ ...

| --- | |-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------| | | | | | | | | | | | | | | | Earnings Presentation Q1 2022 | | May 5, 2022 | | This presentation contains nLIGHT, Inc. proprietary information. No part of it may be circulated, quoted, or reproduced for distribution without prior written approval from nLIGHT, Inc. | Safe Harbor Statement Certain statements in th ...

nLIGHT, Inc. (NASDAQ:LASR) Q1 2022 Earnings Conference Call May 5, 2022 5:00 PM ET Company Participants Scott Keeney - Co-Founder and Chief Executive Officer Joseph Corso - Chief Financial Officer Conference Call Participants Greg Palm - Craig-Hallum Capital Group Patrick Ho - Stifel Brian Gesuale - Raymond James Hans Chung - D.A. Davidson Chris Grenga - Needham Paretosh Misra - Berenberg Capital Markets Mark Miller - Benchmark Company Operator Good day and welcome to the nLIGHT First Quarter 2022 Earnings ...

(Mark One) UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ________________________________________________________ FORM 10-Q ________________________________________________________ Delaware 91-2066376 (State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification Number) 4637 NW 18 Avenue th ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2022 or ☐ TRANSITION REPORT P ...

Part I [Business](index=5&type=section&id=Item%201.%20Business) nLIGHT provides high-power semiconductor and fiber lasers for industrial, microfabrication, and defense markets - nLIGHT is a leading provider of high-power semiconductor and fiber lasers, operating in two segments: Laser Products and Advanced Development[12](index=12&type=chunk)[13](index=13&type=chunk) - The company serves three primary end markets: Industrial, Microfabrication, and Aerospace and Defense[13](index=13&type=chunk)[18](index=18&type=chunk) - As of December 31, 2021, the company had over **600 worldwide issued and pending patents**[28](index=28&type=chunk) - The top ten customers accounted for approximately **63% of revenues in 2021**, with key customers including the U.S. Government, Raytheon, and Northrop Grumman[34](index=34&type=chunk) **Backlog Information** | Date | Backlog (in millions) | | :--- | :--- | | Dec 31, 2021 | $115.9 | | Dec 31, 2020 | $135.8 | - As of December 31, 2021, the company had over **1,300 full-time employees** worldwide, with approximately 750 in the U.S. and 500 in China[47](index=47&type=chunk) [Risk Factors](index=10&type=section&id=Item%201A.%20Risk%20Factors) The company faces risks from competition, customer concentration, supply chain vulnerabilities, and net losses - The laser industry is highly competitive, with risks of **declining average selling prices (ASPs)** and pressure from larger competitors[52](index=52&type=chunk)[54](index=54&type=chunk) - The company has a history of **recurring net losses** and expects operating costs to increase, which may prevent it from achieving profitability[57](index=57&type=chunk) - The **COVID-19 pandemic** has disrupted operations, manufacturing, and supply chains, leading to increased costs and labor shortages[61](index=61&type=chunk)[62](index=62&type=chunk) - A small number of customers account for a **significant portion of revenues**, and the loss of any key customer could materially harm the business[65](index=65&type=chunk) - The company relies on internal production and **single or limited-source suppliers** for key components, creating manufacturing and supply chain risks[71](index=71&type=chunk)[72](index=72&type=chunk)[73](index=73&type=chunk) - International operations, particularly in China, are subject to **regulatory changes, trade barriers, and political instability**[84](index=84&type=chunk)[85](index=85&type=chunk) - The company is subject to governmental **export and import controls**, which could impair its ability to compete in international markets[90](index=90&type=chunk)[91](index=91&type=chunk) [Unresolved Staff Comments](index=25&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) The company reports no unresolved staff comments [Properties](index=25&type=section&id=Item%202.%20Properties) The company owns its headquarters in Camas, WA, and leases key facilities in the US, Finland, and China **Principal Facilities** | Location | Ownership | Approx. Size (sq. ft.) | Primary Functions | | :--- | :--- | :--- | :--- | | Camas, WA | Owned | 164,600 | Corporate HQ, Manufacturing, R&D | | Vancouver, WA | Leased | 122,400 | Manufacturing, R&D, Service | | Hillsboro, OR | Leased | 30,200 | Manufacturing, Product Design | | Longmont, CO | Leased | 46,400 | R&D | | Lohja, Finland | Leased | 31,800 | Manufacturing, R&D | | Shanghai, China | Leased | 82,800 | Manufacturing, Service, Sales | [Legal Proceedings](index=25&type=section&id=Item%203.%20Legal%20Proceedings) The company reports no material legal proceedings as of the report date - The company is not currently involved in any **material legal proceedings**[118](index=118&type=chunk) [Mine Safety Disclosures](index=25&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This section is not applicable to the company's operations Part II [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=25&type=section&id=Item%205.%20Market%20for%20Registrant's%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) The company's stock trades on Nasdaq (LASR), and a $10 million repurchase program remains fully available - The company's common stock trades on the Nasdaq Global Select Market under the ticker symbol **"LASR"**[121](index=121&type=chunk) - A **$10 million stock repurchase program** was authorized in November 2019, with the full amount remaining available as of 2021[122](index=122&type=chunk) [[Reserved]](index=27&type=section&id=Item%206.%20%5BReserved%5D) This item is intentionally left blank [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=27&type=section&id=Item%207.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Revenues grew in 2021, but net loss widened due to increased stock-based compensation and operating expenses **Financial Performance Summary (2021 vs. 2020)** | Metric | 2021 | 2020 | | :--- | :--- | :--- | | Total Revenues | $270.1M | $222.8M | | Net Loss | ($29.7M) | ($20.9M) | **Revenues by End Market (in thousands)** | End Market | 2021 | 2020 | % Change | | :--- | :--- | :--- | :--- | | Industrial | $94,795 | $84,478 | 12.2% | | Microfabrication | $70,412 | $51,649 | 36.3% | | Aerospace and Defense | $104,939 | $86,662 | 21.1% | | **Total** | **$270,146** | **$222,789** | **21.3%** | **Revenues by Segment (in thousands)** | Segment | 2021 | 2020 | % Change | | :--- | :--- | :--- | :--- | | Laser Products | $206,195 | $184,841 | 11.6% | | Advanced Development | $63,951 | $37,948 | 68.5% | | **Total** | **$270,146** | **$222,789** | **21.3%** | **Revenues by Geographic Region (in thousands)** | Region | 2021 | 2020 | % Change | | :--- | :--- | :--- | :--- | | North America | $143,232 | $107,624 | 33.1% | | China | $55,446 | $70,882 | (21.8)% | | Rest of World | $71,468 | $44,283 | 61.4% | | **Total** | **$270,146** | **$222,789** | **21.3%** | - **Gross margin increased to 28.6%** in 2021 from 26.6% in 2020, with the Laser Products segment improving to 36.8% due to better factory utilization[152](index=152&type=chunk)[153](index=153&type=chunk) - **Research and development expenses increased by 33.2%** to $54.8 million in 2021, driven by higher stock-based compensation and headcount[155](index=155&type=chunk) - **Sales, general, and administrative expenses increased by 34.3%** to $52.7 million in 2021, primarily due to a $7.6 million increase in stock-based compensation[157](index=157&type=chunk)[158](index=158&type=chunk) **Cash and Cash Equivalents** | Date | Amount (in millions) | | :--- | :--- | | Dec 31, 2021 | $146.5 | | Dec 31, 2020 | $102.3 | [Quantitative and Qualitative Disclosures About Market Risk](index=39&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company is exposed to market risks from interest rate fluctuations and foreign currency exchange rates - The company has a **$40.0 million revolving credit facility** with no outstanding balance as of December 31, 2021, subject to variable interest rates[184](index=184&type=chunk) - Significant portions of revenues and expenses are denominated in **Chinese RMB and the Euro**, creating foreign currency transaction risk[185](index=185&type=chunk) - A hypothetical **10% adverse change in foreign exchange rates** would result in a potential loss of approximately $0.6 million related to net investments[186](index=186&type=chunk) [Financial Statements and Supplementary Data](index=40&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section contains the company's audited consolidated financial statements and the independent auditor's report **Consolidated Balance Sheet Data (in thousands)** | Account | Dec 31, 2021 | Dec 31, 2020 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $146,534 | $102,282 | | Inventory | $73,746 | $54,706 | | Total Assets | $373,618 | $283,644 | | **Liabilities & Equity** | | | | Total Liabilities | $71,485 | $63,730 | | Total Stockholders' Equity | $302,133 | $219,914 | **Consolidated Statement of Operations Data (in thousands)** | Account | 2021 | 2020 | 2019 | | :--- | :--- | :--- | :--- | | Total Revenue | $270,146 | $222,789 | $176,619 | | Gross Profit | $77,307 | $59,364 | $52,339 | | Loss from Operations | ($30,217) | ($21,048) | ($9,909) | | Net Loss | ($29,669) | ($20,932) | ($12,884) | | Net Loss per Share | ($0.70) | ($0.55) | ($0.35) | **Consolidated Statement of Cash Flows Data (in thousands)** | Account | 2021 | 2020 | 2019 | | :--- | :--- | :--- | :--- | | Net cash (used in) provided by operating activities | ($7,443) | $13,041 | ($4,241) | | Net cash used in investing activities | ($21,853) | ($24,539) | ($30,404) | | Net cash provided by (used in) financing activities | $73,742 | ($3,767) | $2,452 | - The independent auditor, KPMG LLP, identified the assessment of **excess and obsolete inventory** as a critical audit matter due to subjective judgment required[199](index=199&type=chunk)[200](index=200&type=chunk)[201](index=201&type=chunk) [Changes in and Disagreements With Accountants on Accounting and Financial Disclosure](index=66&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20With%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) The company reports no changes in or disagreements with its accountants [Controls and Procedures](index=66&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management concluded the company's disclosure controls and internal financial reporting controls were effective - Management concluded that the company's **disclosure controls and procedures were effective** as of December 31, 2021[301](index=301&type=chunk) - Based on an assessment using the COSO framework, management concluded that the company's **internal control over financial reporting was effective** as of December 31, 2021[306](index=306&type=chunk) [Other Information](index=67&type=section&id=Item%209B.%20Other%20Information) The company reports no other information [Disclosure Regarding Foreign Jurisdictions that Prevent Inspections](index=67&type=section&id=Item%209C.%20Disclosure%20Regarding%20Foreign%20Jurisdictions%20that%20Prevent%20Inspections) This section is not applicable to the company Part III [Directors, Executive Officers and Corporate Governance](index=67&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance) This information is incorporated by reference from the company's upcoming 2022 proxy statement [Executive Compensation](index=68&type=section&id=Item%2011.%20Executive%20Compensation) This information is incorporated by reference from the company's upcoming 2022 proxy statement [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=68&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) This information is incorporated by reference from the company's upcoming 2022 proxy statement [Certain Relationships and Related Transactions, and Director Independence](index=68&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions%2C%20and%20Director%20Independence) This information is incorporated by reference from the company's upcoming 2022 proxy statement [Principal Accountant Fees and Services](index=68&type=section&id=Item%2014.%20Principal%20Accountant%20Fees%20and%20Services) This information is incorporated by reference from the company's upcoming 2022 proxy statement Part IV [Exhibits, Financial Statement Schedules](index=68&type=section&id=Item%2015.%20Exhibits%2C%20Financial%20Statement%20Schedules) This section lists the financial statements and exhibits filed with the report [Form 10-K Summary](index=72&type=section&id=Item%2016.%20Form%2010-K%20Summary) The company provides no Form 10-K summary

Call Start: 17:00 January 1, 0000 5:37 PM ET nLIGHT, Inc. (NASDAQ:LASR) Q4 2021 Earnings Conference Call February 17, 2022, 5:00 PM ET Company Participants Scott Keeney – Co-Founder and Chief Executive Officer Joseph Corso – Vice President, Corporate Development and Investor Relations Ran Bareket – Vice President and Chief Financial Officer Conference Call Participants Greg Palm – Craig-Hallum Capital Group Patrick Ho – Stifel Tom Diffely – D.A. Davidson Chris Gringo – Needham & Company Mark Miller – The Be ...

[PART I. FINANCIAL INFORMATION](index=3&type=section&id=Part%20I.%20Financial%20Information) [ITEM 1. UNAUDITED INTERIM FINANCIAL STATEMENTS](index=3&type=section&id=Item%201.%20Unaudited%20Interim%20Financial%20Statements) Presents nLIGHT, Inc.'s unaudited consolidated financial statements and detailed notes for periods ended September 30, 2021, and December 31, 2020 [Consolidated Balance Sheets](index=3&type=section&id=Consolidated%20Balance%20Sheets%3A%20September%2030%2C%202021%20and%20December%2031%2C%202020%20%28unaudited%29) Total assets and stockholders' equity significantly increased as of September 30, 2021, driven by higher cash, inventory, and additional paid-in capital | Metric (in thousands) | Sep 30, 2021 | Dec 31, 2020 | Change ($) | Change (%) | | :-------------------- | :----------- | :----------- | :--------- | :--------- | | Total Assets | $381,971 | $283,644 | $98,327 | 34.7% | | Total Liabilities | $77,973 | $63,730 | $14,243 | 22.3% | | Total Stockholders' Equity | $303,998 | $219,914 | $84,084 | 38.2% | | Cash and cash equivalents | $165,584 | $102,282 | $63,302 | 61.9% | | Inventory | $70,683 | $54,706 | $15,977 | 29.2% | [Consolidated Statements of Operations](index=4&type=section&id=Consolidated%20Statements%20of%20Operations%3A%20Three%20and%20Nine%20Months%20Ended%20September%2030%2C%202021%20and%202020%20%28unaudited%29) Total revenue increased for both three and nine months ended September 30, 2021, but net loss and loss per share also rose | Metric (in thousands, except per share) | 3 Months Ended Sep 30, 2021 | 3 Months Ended Sep 30, 2020 | Change ($) | Change (%) | | :------------------------------------ | :-------------------------- | :-------------------------- | :--------- | :--------- | | Total Revenue | $72,235 | $61,732 | $10,503 | 17.0% | | Gross Profit | $21,395 | $17,160 | $4,235 | 24.7% | | Loss from Operations | $(6,759) | $(3,976) | $(2,783) | 70.0% | | Net Loss | $(6,880) | $(2,110) | $(4,770) | 226.1% | | Net Loss per Share (basic & diluted) | $(0.16) | $(0.05) | $(0.11) | 220.0% | | Metric (in thousands, except per share) | 9 Months Ended Sep 30, 2021 | 9 Months Ended Sep 30, 2020 | Change ($) | Change (%) | | :------------------------------------ | :-------------------------- | :-------------------------- | :--------- | :--------- | | Total Revenue | $202,693 | $157,085 | $45,608 | 29.0% | | Gross Profit | $59,365 | $39,717 | $19,648 | 49.5% | | Loss from Operations | $(21,552) | $(16,762) | $(4,790) | 28.6% | | Net Loss | $(20,919) | $(16,415) | $(4,504) | 27.4% | | Net Loss per Share (basic & diluted) | $(0.50) | $(0.43) | $(0.07) | 16.3% | [Consolidated Statements of Comprehensive Loss](index=5&type=section&id=Consolidated%20Statements%20of%20Comprehensive%20Loss%3A%20Three%20and%20Nine%20Months%20Ended%20September%2030%2C%202021%20and%202020%20%28unaudited%29) Comprehensive loss increased for both periods ended September 30, 2021, due to higher net losses and negative currency adjustments | Metric (in thousands) | 3 Months Ended Sep 30, 2021 | 3 Months Ended Sep 30, 2020 | Change ($) | Change (%) | | :-------------------- | :-------------------------- | :-------------------------- | :--------- | :--------- | | Net Loss | $(6,880) | $(2,110) | $(4,770) | 226.1% | | Foreign currency translation adjustments, net of tax | $(378) | $1,091 | $(1,469) | -134.6% | | Comprehensive Loss | $(7,258) | $(1,019) | $(6,239) | 612.3% | | Metric (in thousands) | 9 Months Ended Sep 30, 2021 | 9 Months Ended Sep 30, 2020 | Change ($) | Change (%) | | :-------------------- | :-------------------------- | :-------------------------- | :--------- | :--------- | | Net Loss | $(20,919) | $(16,415) | $(4,504) | 27.4% | | Foreign currency translation adjustments, net of tax | $(543) | $928 | $(1,471) | -158.5% | | Comprehensive Loss | $(21,462) | $(15,487) | $(5,975) | 38.6% | [Consolidated Statements of Stockholders' Equity](index=6&type=section&id=Consolidated%20Statements%20of%20Stockholders%27%20Equity%3A%20Three%20and%20Nine%20Months%20Ended%20September%2030%2C%202021%20and%202020%20%28unaudited%29) Stockholders' equity significantly increased due to a public offering and stock-based compensation, despite a net loss | Metric (in thousands) | Sep 30, 2021 | Dec 31, 2020 | Change ($) | Change (%) | | :-------------------- | :----------- | :----------- | :--------- | :--------- | | Total Stockholders' Equity | $303,998 | $219,914 | $84,084 | 38.2% | | Additional Paid-in Capital | $464,090 | $358,544 | $105,546 | 29.4% | | Accumulated Deficit | $(159,305) | $(138,386) | $(20,919) | 15.1% | - Proceeds from follow-on offering, net of offering costs, contributed **$82,354 thousand** to additional paid-in capital during the nine months ended September 30, 2021[17](index=17&type=chunk) - Stock-based compensation added **$29,732 thousand** to additional paid-in capital during the nine months ended September 30, 2021[17](index=17&type=chunk) [Consolidated Statements of Cash Flows](index=8&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows%3A%20Nine%20Months%20Ended%20September%2030%2C%202021%20and%202020%20%28unaudited%29) Net cash significantly increased due to financing activities, primarily a public offering, despite lower operating cash and investing usage | Metric (in thousands) | 9 Months Ended Sep 30, 2021 | 9 Months Ended Sep 30, 2020 | Change ($) | Change (%) | | :-------------------- | :-------------------------- | :-------------------------- | :--------- | :--------- | | Net cash provided by operating activities | $2,687 | $14,694 | $(12,007) | -81.7% | | Net cash used in investing activities | $(14,230) | $(20,280) | $6,050 | -29.8% | | Net cash provided by (used in) financing activities | $75,060 | $(1,638) | $76,698 | -4682.4% | | Net increase (decrease) in cash, cash equivalents, and restricted cash | $63,261 | $(6,851) | $70,112 | -1023.4% | - Proceeds from public offerings, net of offering costs, were **$82,354 thousand** for the nine months ended September 30, 2021[21](index=21&type=chunk) [Notes to Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements%20%28unaudited%29) Detailed disclosures on accounting policies, financial instruments, assets, liabilities, equity, compensation, segments, and net loss per share [Note 1 - Basis of Presentation and New Accounting Pronouncements](index=9&type=section&id=Note%201%20-%20Basis%20of%20Presentation%20and%20New%20Accounting%20Pronouncements) Financial statements adhere to U.S. GAAP and SEC rules; new accounting pronouncements adopted with no material impact - Adopted ASU 2016-13 (Credit Losses) and ASU 2019-12 (Income Taxes) on January 1, 2021, with no material impact[25](index=25&type=chunk)[26](index=26&type=chunk) [Note 2 - Acquisitions](index=9&type=section&id=Note%202%20-%20Acquisitions) Acquired OPI Photonics S.r.l. for approximately **$1.6 million** cash, with **$0.6 million** in accrued consideration paid - Acquired OPI Photonics S.r.l. on July 30, 2020, for approximately **$1.6 million** cash consideration[27](index=27&type=chunk) - Paid **$0.6 million** in accrued acquisition consideration, including **$0.3 million** contingent consideration, for OPI during the nine months ended September 30, 2021[28](index=28&type=chunk) [Note 3 - Revenue](index=10&type=section&id=Note%203%20-%20Revenue) Total revenue significantly increased across all end markets and regions (except China), with substantial growth in revenue recognized over time Revenue by End Market (in thousands) | End Market | 3 Months Ended Sep 30, 2021 | 3 Months Ended Sep 30, 2020 | Change ($) | Change (%) | | :----------- | :-------------------------- | :-------------------------- | :--------- | :--------- | | Industrial | $26,737 | $21,880 | $4,857 | 22.2% | | Microfabrication | $17,695 | $14,052 | $3,643 | 25.9% | | Aerospace and Defense | $27,803 | $25,800 | $2,003 | 7.8% | | **Total** | **$72,235** | **$61,732** | **$10,503**| **17.0%** | Revenue by Geography (in thousands) | Geography | 9 Months Ended Sep 30, 2021 | 9 Months Ended Sep 30, 2020 | Change ($) | Change (%) | | :----------- | :-------------------------- | :-------------------------- | :--------- | :--------- | | North America | $101,659 | $72,924 | $28,735 | 39.4% | | China | $48,045 | $52,723 | $(4,678) | -8.9% | | Rest of World | $52,989 | $31,438 | $21,551 | 68.6% | | **Total** | **$202,693** | **$157,085** | **$45,608**| **29.0%** | Revenue by Timing (in thousands) | Timing | 9 Months Ended Sep 30, 2021 | 9 Months Ended Sep 30, 2020 | Change ($) | Change (%) | | :----------- | :-------------------------- | :-------------------------- | :--------- | :--------- | | Point in time | $150,187 | $133,304 | $16,883 | 12.7% | | Over time | $52,506 | $23,781 | $28,725 | 120.8% | | **Total** | **$202,693** | **$157,085** | **$45,608**| **29.0%** | [Note 4 - Concentrations of Credit and Other Risks](index=11&type=section&id=Note%204%20-%20Concentrations%20of%20Credit%20and%20Other%20Risks) Customer concentration risks exist, with key customers accounting for significant revenue and 33% of net accounts receivable Customer Revenue Concentration | Customer | 3 Months Ended Sep 30, 2021 | 3 Months Ended Sep 30, 2020 | 9 Months Ended Sep 30, 2021 | 9 Months Ended Sep 30, 2020 | | :--------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | U.S. Government | 23% | 16% | 21% | 13% | | Quick Laser Technology Co., Ltd. | (1) | 13% | (1) | 13% | | Raytheon Technologies | (1) | 12% | (1) | 13% | - Two customers accounted for approximately **33%** of net accounts receivable as of September 30, 2021, down from **43%** at December 31, 2020[30](index=30&type=chunk) [Note 5 - Fair Value of Financial Instruments](index=11&type=section&id=Note%205%20-%20Fair%20Value%20of%20Financial%20Instruments) Fair value financial instruments, primarily Level 1 money market securities and commercial paper, significantly increased Fair Value of Financial Instruments (Level 1, in thousands) | Instrument | Sep 30, 2021 | Dec 31, 2020 | Change ($) | Change (%) | | :------------------ | :----------- | :----------- | :--------- | :--------- | | Money market securities | $136,894 | $74,084 | $62,810 | 84.8% | | Commercial paper | $3,885 | $1,584 | $2,301 | 145.3% | | **Total** | **$140,779** | **$75,668** | **$65,111**| **86.1%** | [Note 6 - Inventory](index=12&type=section&id=Note%206%20-%20Inventory) Total inventory increased by **29.2%** to **$70.7 million** as of September 30, 2021, with growth across all categories Inventory Composition (in thousands) | Category | Sep 30, 2021 | Dec 31, 2020 | Change ($) | Change (%) | | :------------------------ | :----------- | :----------- | :--------- | :--------- | | Raw materials | $29,725 | $21,410 | $8,315 | 38.8% | | Work in process and semi-finished goods | $24,085 | $21,320 | $2,765 | 13.0% | | Finished goods | $16,873 | $11,976 | $4,897 | 40.9% | | **Total Inventory** | **$70,683** | **$54,706** | **$15,977**| **29.2%** | [Note 7 - Property, Plant and Equipment](index=12&type=section&id=Note%207%20-%20Property%2C%20Plant%20and%20Equipment) Net property, plant and equipment increased by **17.6%** to **$52.3 million**, driven by equipment and building improvements Property, Plant and Equipment, Net (in thousands) | Category | Sep 30, 2021 | Dec 31, 2020 | Change ($) | Change (%) | | :------------------------ | :----------- | :----------- | :--------- | :--------- | | Manufacturing and lab equipment | $76,652 | $69,849 | $6,803 | 9.7% | | Leasehold and building improvements | $26,956 | $21,934 | $5,022 | 22.9% | | **Total Property, Plant and Equipment, Net** | **$52,303** | **$44,480** | **$7,823** | **17.6%** | [Note 8 - Intangible Assets and Goodwill](index=13&type=section&id=Note%208%20-%20Intangible%20Assets%20and%20Goodwill) Net intangible assets decreased by **33.1%** to **$5.6 million** due to amortization; goodwill remained stable Intangible Assets, Net (in thousands) | Metric | Sep 30, 2021 | Dec 31, 2020 | Change ($) | Change (%) | | :---------------------- | :----------- | :----------- | :--------- | :--------- | | Total Intangible Assets | $14,290 | $14,625 | $(335) | -2.3% | | Accumulated Amortization | $(8,710) | $(6,280) | $(2,430) | 38.7% | | **Intangible Assets, Net** | **$5,580** | **$8,345** | **$(2,765)**| **-33.1%** | | Goodwill | $12,437 | $12,484 | $(47) | -0.4% | [Note 9 - Accrued Liabilities](index=13&type=section&id=Note%209%20-%20Accrued%20Liabilities) Accrued liabilities increased slightly to **$15.7 million**, driven by payroll and benefits, offset by other expenses Accrued Liabilities (in thousands) | Category | Sep 30, 2021 | Dec 31, 2020 | Change ($) | Change (%) | | :------------------------ | :----------- | :----------- | :--------- | :--------- | | Accrued payroll and benefits | $11,568 | $10,770 | $798 | 7.4% | | Product warranty, current | $2,251 | $2,122 | $129 | 6.1% | | Other accrued expenses | $1,923 | $2,429 | $(506) | -20.8% | | **Total Accrued Liabilities** | **$15,742** | **$15,321** | **$421** | **2.7%** | [Note 10 - Product Warranties](index=13&type=section&id=Note%2010%20-%20Product%20Warranties) Product warranty liability increased by **28.1%** to **$5.4 million** due to higher provisions for warranty charges Product Warranty Liability Activity (in thousands) | Metric | 9 Months Ended Sep 30, 2021 | 9 Months Ended Sep 30, 2020 | Change ($) | Change (%) | | :------------------------ | :-------------------------- | :-------------------------- | :--------- | :--------- | | Product warranty liability, beginning | $4,711 | $2,984 | $1,727 | 57.9% | | Provision for warranty charges, net of adjustments | $2,431 | $3,425 | $(994) | -29.0% | | **Product warranty liability, ending** | **$5,443** | **$4,250** | **$1,193** | **28.1%** | [Note 11 - Line of Credit Facility](index=14&type=section&id=Note%2011%20-%20Line%20of%20Credit%20Facility) The **$40.0 million** revolving line of credit was amended, extending maturity; no outstanding amounts and in compliance - Amended **$40.0 million** revolving line of credit on September 24, 2021, extending maturity to September 24, 2024[44](index=44&type=chunk) - No amounts outstanding under the LOC at September 30, 2021, and in compliance with all covenants[45](index=45&type=chunk) [Note 12 - Commitments and Contingencies](index=14&type=section&id=Note%2012%20-%20Commitments%20and%20Contingencies) No material legal proceedings or claims as of September 30, 2021, or the report filing date - No material legal proceedings as of September 30, 2021, or the filing date of the Quarterly Report on Form 10-Q[47](index=47&type=chunk) [Note 13 - Leases](index=14&type=section&id=Note%2013%20-%20Leases) Leases real estate and equipment with a 9-year average term; lease expense increased for both periods ended September 30, 2021 Lease Expense (in thousands) | Lease Expense Category | 3 Months Ended Sep 30, 2021 | 3 Months Ended Sep 30, 2020 | Change ($) | Change (%) | | :--------------------- | :-------------------------- | :-------------------------- | :--------- | :--------- | | Operating lease expense | $968 | $758 | $210 | 27.7% | | Short-term lease expense | $172 | $35 | $137 | 391.4% | | Variable and other lease expense | $192 | $128 | $64 | 50.0% | | **Total Lease Expense** | **$1,332** | **$921** | **$411** | **44.6%** | Future Minimum Lease Payments (in thousands) | Period | Amount | | :---------------- | :----- | | Remainder of 2021 | $914 | | 2022 | $3,333 | | 2023 | $2,508 | | 2024 | $2,361 | | 2025 | $1,913 | | Thereafter | $10,041| | **Total minimum lease payments** | **$21,070**| [Note 14 - Stockholders' Equity and Stock-Based Compensation](index=15&type=section&id=Note%2014%20-%20Stockholders%27%20Equity%20and%20Stock-Based%20Compensation) Public offering generated **$82.4 million**; stock-based compensation expense significantly increased, with **$79.2 million** unrecognized - Closed a follow-on public offering in March 2021, issuing approximately **2.5 million** shares at **$34.00** per share, resulting in **$82.4 million** in net proceeds[51](index=51&type=chunk) Stock-Based Compensation Expense (in thousands) | Category | 3 Months Ended Sep 30, 2021 | 3 Months Ended Sep 30, 2020 | Change ($) | Change (%) | | :------------------------ | :-------------------------- | :-------------------------- | :--------- | :--------- | | Cost of revenues | $740 | $505 | $235 | 46.5% | | Research and development | $3,782 | $2,545 | $1,237 | 48.6% | | Sales, general and administrative | $5,550 | $3,633 | $1,917 | 52.8% | | **Total Stock-Based Compensation** | **$10,072** | **$6,683** | **$3,389** | **50.7%** | - Total unrecognized stock-based compensation was **$79.2 million** as of September 30, 2021, to be recognized over an average of **2.8 years**[57](index=57&type=chunk) [Note 15 - Segment Information](index=17&type=section&id=Note%2015%20-%20Segment%20Information) Operates in Laser Products and Advanced Development segments, both showing revenue growth, with Laser Products improving gross margin Revenue by Segment (in thousands) | Segment | 9 Months Ended Sep 30, 2021 | 9 Months Ended Sep 30, 2020 | Change ($) | Change (%) | | :------------------ | :-------------------------- | :-------------------------- | :--------- | :--------- | | Laser Products | $155,289 | $133,151 | $22,138 | 16.6% | | Advanced Development | $47,404 | $23,934 | $23,470 | 98.1% | | **Total Revenue** | **$202,693** | **$157,085** | **$45,608**| **29.0%** | Gross Margin by Segment | Segment | 3 Months Ended Sep 30, 2021 | 3 Months Ended Sep 30, 2020 | Change (pp) | | :------------------ | :-------------------------- | :-------------------------- | :---------- | | Laser Products | 38.5% | 33.2% | 5.3 | | Advanced Development | 6.7% | 6.5% | 0.2 | | **Total Gross Margin** | **29.6%** | **27.8%** | **1.8** | [Note 16 - Net Loss per Share](index=17&type=section&id=Note%2016%20-%20Net%20Loss%20per%20Share) Basic and diluted net loss per share were identical due to the company's net loss position; dilutive securities were anti-dilutive - Basic and diluted net loss per share were identical due to the company's net loss position[61](index=61&type=chunk) Anti-Dilutive Securities (in thousands) | Security Type | 3 Months Ended Sep 30, 2021 | 3 Months Ended Sep 30, 2020 | 9 Months Ended Sep 30, 2021 | 9 Months Ended Sep 30, 2020 | | :------------------------ | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Restricted stock units and awards | 2,195 | 3,498 | 2,547 | 2,129 | | Common stock options | 2,544 | 3,593 | 2,717 | 3,593 | | **Total Anti-Dilutive Securities** | **4,739** | **7,130** | **5,264** | **5,722** | [ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS](index=18&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses financial performance, highlighting increased revenue but higher net loss, segment performance, operating expenses, and liquidity Key Operating Results as % of Revenue | Metric | 3 Months Ended Sep 30, 2021 | 3 Months Ended Sep 30, 2020 | 9 Months Ended Sep 30, 2021 | 9 Months Ended Sep 30, 2020 | | :---------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Total Revenue | 100.0% | 100.0% | 100.0% | 100.0% | | Gross Profit | 29.6% | 27.8% | 29.3% | 25.3% | | Total Operating Expenses | 38.9% | 34.2% | 39.9% | 36.0% | | Loss from Operations | (9.3)% | (6.4)% | (10.6)% | (10.7)% | | Net Loss | (9.5)% | (3.4)% | (10.3)% | (10.4)% | [SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS](index=18&type=section&id=SPECIAL%20NOTE%20REGARDING%20FORWARD-LOOKING%20STATEMENTS) Cautions that forward-looking statements are subject to risks and uncertainties, and the company does not undertake to update them - Forward-looking statements are subject to risks and uncertainties, and actual results may differ materially[64](index=64&type=chunk)[65](index=65&type=chunk) - The company does not undertake to publicly update forward-looking statements, except as required by law[65](index=65&type=chunk) [Overview](index=18&type=section&id=Overview) nLIGHT is a leading provider of high-power lasers, reporting increased revenue but a higher net loss for the period - nLIGHT is a leading provider of high-power semiconductor and fiber lasers[66](index=66&type=chunk) - Operates in two segments: Laser Products (semiconductor/fiber lasers, directed energy) and Advanced Development (R&D contracts)[67](index=67&type=chunk) | Metric (in thousands) | 9 Months Ended Sep 30, 2021 | 9 Months Ended Sep 30, 2020 | Change ($) | Change (%) | | :-------------------- | :-------------------------- | :-------------------------- | :--------- | :--------- | | Total Revenue | $202,700 | $157,100 | $45,600 | 29.0% | | Net Loss | $(20,900) | $(16,400) | $(4,500) | 27.4% | [Factors Affecting Our Performance](index=19&type=section&id=Factors%20Affecting%20Our%20Performance) No material changes to performance factors since December 31, 2020, as disclosed in the Annual Report on Form 10-K - No material changes to performance factors since December 31, 2020[69](index=69&type=chunk) [Results of Operations](index=19&type=section&id=Results%20of%20Operations) Revenue increased, and gross margins improved, but significant growth in operating expenses led to higher operating and net losses [Revenues by Segment](index=19&type=section&id=Revenues%20by%20Segment) Both Laser Products and Advanced Development segments saw revenue growth, with Advanced Development nearly doubling its revenue Revenue by Segment (in thousands) | Segment | 9 Months Ended Sep 30, 2021 | 9 Months Ended Sep 30, 2020 | Change ($) | Change (%) | | :------------------ | :-------------------------- | :-------------------------- | :--------- | :--------- | | Laser Products | $155,289 | $133,151 | $22,138 | 16.6% | | Advanced Development | $47,404 | $23,934 | $23,470 | 98.1% | | **Total Revenue** | **$202,693** | **$157,085** | **$45,608**| **29.0%** | - Laser Products revenue increase driven by Industrial and Microfabrication markets, partially offset by decreased Aerospace and Defense product sales[72](index=72&type=chunk) - Advanced Development revenue increase primarily due to increased activity on existing R&D contracts[72](index=72&type=chunk) [Revenues by End Market](index=20&type=section&id=Revenues%20by%20End%20Market) All end markets experienced revenue growth, with Microfabrication showing the highest percentage increase due to semiconductor laser demand Revenue by End Market (in thousands) | End Market | 9 Months Ended Sep 30, 2021 | 9 Months Ended Sep 30, 2020 | Change ($) | Change (%) | | :-------------------- | :-------------------------- | :-------------------------- | :--------- | :--------- | | Industrial | $73,044 | $60,500 | $12,544 | 20.7% | | Microfabrication | $53,184 | $38,771 | $14,413 | 37.2% | | Aerospace and Defense | $76,465 | $57,814 | $18,651 | 32.3% | | **Total Revenue** | **$202,693** | **$157,085** | **$45,608**| **29.0%** | - Industrial market revenue growth driven by unit sales outside of China, offset by lower average selling prices and lower unit sales in China[73](index=73&type=chunk) - Microfabrication market revenue growth driven by increased demand and unit sales of semiconductor lasers[73](index=73&type=chunk) [Revenues by Geographic Region](index=20&type=section&id=Revenues%20by%20Geographic%20Region) North America and Rest of World regions showed strong revenue growth, while China revenue decreased due to lower industrial sales Revenue by Geographic Region (in thousands) | Region | 9 Months Ended Sep 30, 2021 | 9 Months Ended Sep 30, 2020 | Change ($) | Change (%) | | :------------ | :-------------------------- | :-------------------------- | :--------- | :--------- | | North America | $101,659 | $72,924 | $28,735 | 39.4% | | China | $48,045 | $52,723 | $(4,678) | -8.9% | | Rest of World | $52,989 | $31,438 | $21,551 | 68.6% | | **Total Revenue** | **$202,693** | **$157,085** | **$45,608**| **29.0%** | - North America revenue increase driven by Aerospace and Defense and Industrials markets[75](index=75&type=chunk) - China revenue decrease primarily due to decreased sales in the Industrial market[75](index=75&type=chunk) [Cost of Revenues and Gross Margin](index=21&type=section&id=Cost%20of%20Revenues%20and%20Gross%20Margin) Overall gross margin improved, with Laser Products benefiting from sales mix and factory utilization, while Advanced Development fluctuated Gross Profit and Gross Margin (in thousands) | Metric | 3 Months Ended Sep 30, 2021 | 3 Months Ended Sep 30, 2020 | Change ($) | Change (pp) | | :---------------------- | :-------------------------- | :-------------------------- | :--------- | :---------- | | Gross Profit | $21,395 | $17,160 | $4,235 | | | Gross Margin | 29.6% | 27.8% | | 1.8 | Gross Profit and Gross Margin (in thousands) | Metric | 9 Months Ended Sep 30, 2021 | 9 Months Ended Sep 30, 2020 | Change ($) | Change (pp) | | :---------------------- | :-------------------------- | :-------------------------- | :--------- | :---------- | | Gross Profit | $59,365 | $39,717 | $19,648 | | | Gross Margin | 29.3% | 25.3% | | 4.0 | - Laser Products gross margin increases driven by sales mix, product cost improvements, and improved factory utilization[79](index=79&type=chunk) [Operating Expenses](index=22&type=section&id=Operating%20Expenses) Operating expenses, including R&D and SG&A, significantly increased due to higher stock-based compensation, headcount, and professional fees [Research and Development](index=22&type=section&id=Research%20and%20Development) R&D expense increased significantly due to higher stock-based compensation, increased headcount, and project-related expenses | Metric (in thousands) | 3 Months Ended Sep 30, 2021 | 3 Months Ended Sep 30, 2020 | Change ($) | Change (%) | | :-------------------- | :-------------------------- | :-------------------------- | :--------- | :--------- | | Research and development | $14,838 | $11,126 | $3,712 | 33.4% | | Metric (in thousands) | 9 Months Ended Sep 30, 2021 | 9 Months Ended Sep 30, 2020 | Change ($) | Change (%) | | :-------------------- | :-------------------------- | :-------------------------- | :--------- | :--------- | | Research and development | $40,830 | $29,136 | $11,694 | 40.1% | - Increases in R&D expense were primarily due to **$1.2 million** (3 months) and **$3.8 million** (9 months) in stock-based compensation, increased employee headcount, and project-related expenses[80](index=80&type=chunk) [Sales, General and Administrative](index=22&type=section&id=Sales%2C%20General%20and%20Administrative) SG&A expense increased significantly due to higher stock-based compensation, increased employee costs, and professional service fees | Metric (in thousands) | 3 Months Ended Sep 30, 2021 | 3 Months Ended Sep 30, 2020 | Change ($) | Change (%) | | :-------------------- | :-------------------------- | :-------------------------- | :--------- | :--------- | | Sales, general, and administrative | $13,316 | $10,010 | $3,306 | 33.0% | | Metric (in thousands) | 9 Months Ended Sep 30, 2021 | 9 Months Ended Sep 30, 2020 | Change ($) | Change (%) | | :-------------------- | :-------------------------- | :-------------------------- | :--------- | :--------- | | Sales, general, and administrative | $40,087 | $27,343 | $12,744 | 46.6% | - Increases in SG&A expense were primarily due to **$1.9 million** (3 months) and **$8.9 million** (9 months) in stock-based compensation, increased employee costs, and professional service fees[81](index=81&type=chunk) [Interest Income (Expense), net](index=22&type=section&id=Interest%20Income%20%28Expense%29%2C%20net) Net interest income shifted to expense for the nine months due to increased bank charges and market rates, offset by public offering cash | Metric (in thousands) | 9 Months Ended Sep 30, 2021 | 9 Months Ended Sep 30, 2020 | Change ($) | Change (%) | | :-------------------- | :-------------------------- | :-------------------------- | :--------- | :--------- | | Interest income (expense), net | $(126) | $122 | $(248) | -203.3% | - Change in interest income (expense), net, for the nine months was due to increased bank charges and market rate changes, partially offset by cash from public offering[83](index=83&type=chunk) [Other Income (Expense), net](index=23&type=section&id=Other%20Income%20%28Expense%29%2C%20net) Other income (expense), net, fluctuated significantly due to changes in net realized and unrealized foreign exchange transactions | Metric (in thousands) | 9 Months Ended Sep 30, 2021 | 9 Months Ended Sep 30, 2020 | Change ($) | Change (%) | | :-------------------- | :-------------------------- | :-------------------------- | :--------- | :--------- | | Other income (expense), net | $246 | $63 | $183 | 290.5% | - Fluctuations in other income (expense), net, were primarily attributable to changes in net realized and unrealized foreign exchange transactions[84](index=84&type=chunk) [Income Tax Expense (Benefit)](index=23&type=section&id=Income%20Tax%20Expense%20%28Benefit%29) Income tax expense in foreign jurisdictions and a full valuation allowance in the U.S. and China; tax expense increased for three months, benefit for nine months | Metric (in thousands) | 3 Months Ended Sep 30, 2021 | 3 Months Ended Sep 30, 2020 | Change ($) | Change (%) | | :-------------------- | :-------------------------- | :-------------------------- | :--------- | :--------- | | Income tax expense (benefit) | $203 | $(1,485) | $1,688 | -113.7% | | Metric (in thousands) | 9 Months Ended Sep 30, 2021 | 9 Months Ended Sep 30, 2020 | Change ($) | Change (%) | | :-------------------- | :-------------------------- | :-------------------------- | :--------- | :--------- | | Income tax expense (benefit) | $(513) | $(162) | $(351) | 216.7% | - Maintains a full valuation allowance in the U.S. and China due to uncertainty of ultimate realizability of deferred tax assets[85](index=85&type=chunk) [Liquidity and Capital Resources](index=23&type=section&id=Liquidity%20and%20Capital%20Resources) Cash and cash equivalents significantly increased to **$165.6 million** due to **$75.1 million** from financing activities, primarily a public offering. The company believes existing liquidity is sufficient for the next 12 months | Metric (in thousands) | Sep 30, 2021 | Dec 31, 2020 | Change ($) | Change (%) | | :-------------------- | :----------- | :----------- | :--------- | :--------- | | Cash and cash equivalents | $165,584 | $102,282 | $63,302 | 61.9% | - Principal source of liquidity for the nine months ended September 30, 2021, was an equity offering[87](index=87&type=chunk) - Believes existing liquidity will be sufficient for working capital and capital expenditure needs for at least the next 12 months[88](index=88&type=chunk) [Net Cash Provided by Operating Activities](index=24&type=section&id=Net%20Cash%20Provided%20by%20Operating%20Activities) Net cash from operating activities decreased significantly to **$2.7 million** due to net loss and increases in inventory and accounts receivable, partially offset by non-cash expenses and accounts payable | Metric (in thousands) | 9 Months Ended Sep 30, 2021 | 9 Months Ended Sep 30, 2020 | Change ($) | Change (%) | | :-------------------- | :-------------------------- | :-------------------------- | :--------- | :--------- | | Net cash provided by operating activities | $2,687 | $14,694 | $(12,007) | -81.7% | - Driven by non-cash expenses (**$43.4 million**), increase in accounts payable (**$9.7 million**), offset by net loss (**$20.9 million**), and increases in inventory (**$16.2 million**) and accounts receivable (**$4.6 million**) in 2021[90](index=90&type=chunk) [Net Cash Used in Investing Activities](index=24&type=section&id=Net%20Cash%20Used%20in%20Investing%20Activities) Net cash used in investing activities decreased to **$14.2 million**, primarily due to lower capital expenditures on PPE | Metric (in thousands) | 9 Months Ended Sep 30, 2021 | 9 Months Ended Sep 30, 2020 | Change ($) | Change (%) | | :-------------------- | :-------------------------- | :-------------------------- | :--------- | :--------- | | Net cash used in investing activities | $(14,230) | $(20,280) | $6,050 | -29.8% | - Primarily resulted from **$13.6 million** in capital expenditures for manufacturing equipment and corporate facility improvements in 2021[92](index=92&type=chunk) [Net Cash Provided by Financing Activities](index=24&type=section&id=Net%20Cash%20Provided%20by%20Financing%20Activities) Net cash from financing activities significantly increased to **$75.1 million**, driven by a public offering, offset by tax payments | Metric (in thousands) | 9 Months Ended Sep 30, 2021 | 9 Months Ended Sep 30, 2020 | Change ($) | Change (%) | | :-------------------- | :-------------------------- | :-------------------------- | :--------- | :--------- | | Net cash provided by (used in) financing activities | $75,060 | $(1,638) | $76,698 | -4682.4% | - Primarily driven by **$82.4 million** from a follow-on public offering, net of costs[94](index=94&type=chunk) - Offset by **$8.3 million** in withholding tax payments related to stock award vesting[94](index=94&type=chunk) [Credit Facilities](index=25&type=section&id=Credit%20Facilities) The **$40.0 million** revolving line of credit was amended, extending maturity; no outstanding amounts and in compliance - Amended **$40.0 million** revolving line of credit, extending maturity to September 24, 2024[96](index=96&type=chunk) - No outstanding amounts and in compliance with all covenants as of September 30, 2021[97](index=97&type=chunk) [Contractual Obligations](index=25&type=section&id=Contractual%20Obligations) Operating lease obligations increased by approximately **$5.1 million**, with no other material changes to contractual obligations - Operating lease obligations increased by approximately **$5.1 million** for the nine months ended September 30, 2021[98](index=98&type=chunk) [Off-Balance Sheet Arrangements](index=25&type=section&id=Off-Balance%20Sheet%20Arrangements) No off-balance sheet arrangements with unconsolidated entities or financial partnerships since inception - No off-balance sheet arrangements with unconsolidated entities or financial partnerships since inception[99](index=99&type=chunk) [Inflation](index=25&type=section&id=Inflation) Inflation has not materially affected results, but higher wages, compensation, and shipping costs are expected to impact the cost structure - Experienced higher than expected increases in wages, compensation, and shipping costs during the six months ended September 30, 2021[100](index=100&type=chunk) - Expects these cost increases to continue impacting its cost structure[100](index=100&type=chunk) [Recent Accounting Pronouncements](index=25&type=section&id=Recent%20Accounting%20Pronouncements) Refer to Note 1 for information on recent accounting pronouncements [ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK](index=25&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) No material change in exposure to financial market risks (interest rates, foreign currency) since December 31, 2020 - No material change in exposure to market risk (interest rates, foreign currency) since December 31, 2020[102](index=102&type=chunk) [ITEM 4. CONTROLS AND PROCEDURES](index=26&type=section&id=Item%204.%20Controls%20and%20Procedures) Disclosure controls and procedures were effective, with no material changes to internal control over financial reporting - Disclosure controls and procedures were effective as of September 30, 2021[103](index=103&type=chunk) - No material changes in internal control over financial reporting during the three months ended September 30, 2021[104](index=104&type=chunk) [PART II. OTHER INFORMATION](index=26&type=section&id=Part%20II.%20Other%20Information) [ITEM 1. LEGAL PROCEEDINGS](index=26&type=section&id=Item%201.%20Legal%20Proceedings) No material changes to legal proceedings disclosed in the 2020 Annual Report on Form 10-K - No material changes to legal proceedings disclosed in the 2020 Annual Report on Form 10-K[108](index=108&type=chunk) [ITEM 1A. RISK FACTORS](index=26&type=section&id=Item%201A.%20Risk%20Factors) No material changes to risk factors disclosed in the 2020 Annual Report on Form 10-K - No material changes to risk factors disclosed in the 2020 Annual Report on Form 10-K[109](index=109&type=chunk) [ITEM 6. EXHIBITS](index=27&type=section&id=Item%206.%20Exhibits) Lists all exhibits filed with the Quarterly Report on Form 10-Q, including governance, loan, and XBRL documents [SIGNATURES](index=28&type=section&id=Signatures)