LUNA This presentation includes information that constitutes "forward-looking statements" 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 company's expectations regarding its technological and product capabilities, market growth and its market position, sales wins, revenue growth, customer activity, engagement and prospects, recurring sales, margin, general product performance, the company's ...

Luna Innovations Incorporated (NASDAQ:LUNA) Q2 2023 Earnings Conference Call August 10, 2023 5:00 PM ET Company Participants Scott Graeff - President, Chief Executive Officer Gene Nestro - Chief Financial Officer Brian Soller - Chief Technology Officer Allison Woody - Senior Director of Administration Conference Call Participants Alex Henderson - Needham Dave Kang - B. Riley Chris Sakai - Singular Research Ruben Roy - Stifel Tim Savageaux - Northland Capital Markets Paul Essi - William K. Woodruff Alex Hend ...

[PART I. FINANCIAL INFORMATION](index=4&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) [Financial Statements](index=4&type=section&id=ITEM%201.%20FINANCIAL%20STATEMENTS) This section presents the unaudited consolidated financial statements for the quarter ended June 30, 2023, highlighting increased revenues, a net loss, and slight asset growth [Consolidated Balance Sheets](index=4&type=section&id=Consolidated%20Balance%20Sheets) As of June 30, 2023, total assets increased to $155.1 million, total liabilities rose to $60.3 million, and stockholders' equity reached $94.9 million Consolidated Balance Sheet Highlights (in thousands) | Account | June 30, 2023 | December 31, 2022 | | :--- | :--- | :--- | | **Total Current Assets** | $93,853 | $87,874 | | **Total Assets** | **$155,131** | **$151,007** | | **Total Current Liabilities** | $30,043 | $33,631 | | **Total Liabilities** | **$60,258** | **$57,605** | | **Total Stockholders' Equity** | **$94,873** | **$93,402** | [Consolidated Statements of Operations](index=5&type=section&id=Consolidated%20Statements%20of%20Operations) For Q2 2023, revenue grew 11% to $29.2 million, operating loss narrowed to $(0.2) million, and net loss from continuing operations improved to $(0.6) million Q2 2023 vs Q2 2022 Statement of Operations (in thousands) | Metric | Three Months Ended June 30, 2023 | Three Months Ended June 30, 2022 | | :--- | :--- | :--- | | Revenue | $29,164 | $26,162 | | Gross Profit | $16,865 | $15,963 | | Operating Loss | $(214) | $(2,462) | | Net Loss from Continuing Operations | $(558) | $(2,942) | | Net Loss per Share (Basic) | $(0.05) | $(0.07) | H1 2023 vs H1 2022 Statement of Operations (in thousands) | Metric | Six Months Ended June 30, 2023 | Six Months Ended June 30, 2022 | | :--- | :--- | :--- | | Revenue | $54,209 | $48,642 | | Gross Profit | $31,838 | $30,242 | | Operating Loss | $(2,346) | $(4,827) | | Net Loss from Continuing Operations | $(2,400) | $(4,285) | | Net Loss per Share (Basic) | $(0.10) | $0.22 | [Consolidated Statements of Cash Flows](index=10&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) For H1 2023, net cash used in operating activities increased to $10.5 million, while cash and cash equivalents decreased by $2.7 million to $3.3 million Consolidated Cash Flow Summary - Six Months Ended June 30 (in thousands) | Cash Flow Activity | 2023 | 2022 | | :--- | :--- | :--- | | Net cash used in operating activities | $(10,466) | $(7,068) | | Net cash used in investing activities | $(1,243) | $(10,740) | | Net cash provided by financing activities | $8,902 | $6,739 | | **Net decrease in cash and cash equivalents** | **$(2,747)** | **$(12,264)** | | **Cash and cash equivalents—end of period** | **$3,277** | **$4,864** | [Notes to Unaudited Consolidated Financial Statements](index=11&type=section&id=Notes%20to%20Unaudited%20Consolidated%20Financial%20Statements) The notes detail accounting policies, business operations, and financial line items, including the single reportable segment, revenue disaggregation, debt facilities, and unfulfilled performance obligations - The company operates as a single reportable segment that develops, manufactures, and markets distributed fiber optic sensing products and fiber optic communications test and control products[32](index=32&type=chunk) Revenue by Geographic Location - Six Months Ended June 30 (in thousands) | Region | 2023 | 2022 | | :--- | :--- | :--- | | United States | $26,042 | $20,764 | | Asia | $9,382 | $9,017 | | Europe | $13,299 | $12,465 | | Canada, Central and South America | $3,822 | $6,185 | | All Others | $1,664 | $211 | - The approximate value of unfulfilled performance obligations was **$52.4 million** at June 30, 2023, with **73%** expected to be satisfied in 2023[63](index=63&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A)](index=20&type=section&id=ITEM%202.%20MANAGEMENT%27S%20DISCUSSION%20AND%20ANALYSIS%20OF%20FINANCIAL%20CONDITION%20AND%20RESULTS%20OF%20OPERATIONS) Management discusses financial results, highlighting 11% revenue growth, reduced operating loss, and adequate liquidity for the next twelve months [Results of Operations](index=22&type=section&id=Results%20of%20Operations) Q2 2023 revenue increased 11% to $29.2 million, gross margin declined to 58%, and operating loss significantly narrowed to $0.2 million - Q2 2023 revenues increased by **$3.0 million**, or **11%**, to **$29.2 million** compared to Q2 2022, primarily due to revenue growth in sales of sensing products[83](index=83&type=chunk) - Q2 2023 gross margin was **58%**, compared to **61%** for Q2 2022, primarily due to an unfavorable product mix[84](index=84&type=chunk) - Q2 2023 selling, general and administrative expense decreased by **$1.3 million**, or **9%**, reflecting efforts to remove redundant expenses on a global basis[85](index=85&type=chunk) - H1 2023 revenues increased by **$5.6 million**, or **11%**, to **$54.2 million** compared to H1 2022, largely due to the Lios acquisition and growth in sensing and communications test products[90](index=90&type=chunk) [Liquidity and Capital Resources](index=24&type=section&id=Liquidity%20and%20Capital%20Resources) As of June 30, 2023, the company held $3.3 million in cash, with $30.7 million in outstanding debt, and expects adequate liquidity for the next twelve months - At June 30, 2023, total cash and cash equivalents were **$3.3 million**[97](index=97&type=chunk) - As of June 30, 2023, the company had outstanding borrowings of **$17.9 million** under its Term Loan and **$12.8 million** under its Revolving Line, with an unused Revolving Line of **$2.2 million**[98](index=98&type=chunk) - Management believes that cash, cash equivalents, and availability under the revolver as of June 30, 2023, will provide adequate liquidity for working capital needs over the next twelve months[102](index=102&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=25&type=section&id=ITEM%203.%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURES%20ABOUT%20MARKET%20RISK) The company's primary market risks include interest rate fluctuations on floating-rate debt and foreign currency exchange rates, with a 0.25% rate increase impacting pre-tax earnings by $77,000 annually - The company's exposure to market risk is limited to interest rate fluctuations on its floating-rate debt and foreign currency exchange rates[107](index=107&type=chunk) - A hypothetical **0.25%** increase in interest rates would have an unfavorable annual impact on pre-tax earnings and cash flows of approximately **$77,000**, based on borrowing levels at June 30, 2023[108](index=108&type=chunk) [Controls and Procedures](index=26&type=section&id=ITEM%204.%20CONTROLS%20AND%20PROCEDURES) Management concluded that disclosure controls and procedures were effective as of June 30, 2023, with no material changes in internal control over financial reporting during the quarter - Based on an evaluation, the President and Chief Executive Officer and the Chief Financial Officer concluded that as of June 30, 2023, the company's disclosure controls and procedures were effective[112](index=112&type=chunk) - There were no changes in internal control over financial reporting during the quarter ended June 30, 2023, that materially affected, or are reasonably likely to materially affect, internal controls[113](index=113&type=chunk) [PART II. OTHER INFORMATION](index=27&type=section&id=PART%20II.%20OTHER%20INFORMATION) [Legal Proceedings](index=27&type=section&id=ITEM%201.%20LEGAL%20PROCEEDINGS) The company believes that any ultimate liability from ordinary course legal proceedings will not materially affect its financial position or results - Management currently believes that the amount of ultimate liability, if any, from legal proceedings arising in the normal course of business will not materially affect the company's financial position, results of operations, or liquidity[116](index=116&type=chunk) [Risk Factors](index=27&type=section&id=ITEM%201A.%20RISK%20FACTORS) This section details numerous risks, including supply chain dependence, government contracting, inflationary pressures, and cybersecurity threats, which could adversely affect the company's business and financial condition - The company depends on third-party vendors for specialized components, making it vulnerable to supply shortages and price fluctuations[119](index=119&type=chunk) - As a U.S. government contractor, the company is subject to federal rules, regulations, audits, and investigations, violations of which could adversely affect the business[121](index=121&type=chunk) - The company faces risks from inflationary pressures, including increased labor and materials costs, which could adversely impact profitability and cash flow[169](index=169&type=chunk) - The company faces evolving cybersecurity threats and experienced a cyber incident in January 2023, which could lead to adverse consequences if future incidents are not managed effectively[220](index=220&type=chunk)[223](index=223&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=47&type=section&id=ITEM%202.%20UNREGISTERED%20SALES%20OF%20EQUITY%20SECU RITIES%20AND%20USE%20OF%20PROCEEDS) The company reported no unregistered sales of equity securities, no use of proceeds from registered equity securities, and no equity purchases during Q2 2023 - The company reported no unregistered sales of equity securities during the three months ended June 30, 2023[241](index=241&type=chunk) [Other Information (Items 3-6 and Signatures)](index=47&type=section&id=Other%20Information%20(Items%203-6%20and%20Signatures)) This section covers standard reporting items, including no defaults on senior securities, no mine safety disclosures, and lists exhibits filed with the report - Items 3 (Defaults Upon Senior Securities), 4 (Mine Safety Disclosures), and 5 (Other Information) are all marked as 'Not applicable'[238](index=238&type=chunk)[239](index=239&type=chunk)[240](index=240&type=chunk) - Item 6 lists the exhibits filed with the Form 10-Q, including certifications by the Principal Executive Officer and Principal Financial Officer[242](index=242&type=chunk)

Luna Innovations Incorporated (NASDAQ:LUNA) Q1 2023 Earnings Conference Call May 9, 2023 8:00 AM ET Company Participants Allison Woody - Senior Director of Administration Scott Graeff - President and Chief Executive Officer Eugene Nestro - Chief Financial Officer Brian Soller - Chief Technology Officer Conference Call Participants Alex Henderson - Needham & Company Paul Essi - William K. Woodruff & Co. Dave Kang - B. Riley FBR, Inc. Jim Marrone - Singular Research Operator Good morning, and welcome to the L ...

Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995 | --- | --- | --- | --- | |-------|-------|-------|-------------------------------------| | | | | | | | 2 | | NASDAQ: LUNA | | | | | Luna Innovations Incorporated© 2023 | Brian Soller NASDAQ: LUNA Revenues of $25.0M; up 11% year over year Primarily due to M&A activity in Q1 2022 Realized strong, double-digit revenue growth for communications test and Terahertz product lines | --- | --- | --- | --- | |-------|-------|-------|--- ...

PART I. FINANCIAL INFORMATION [ITEM 1. FINANCIAL STATEMENTS](index=4&type=section&id=ITEM%201.%20FINANCIAL%20STATEMENTS) Q1 2023 revenue increased to **$25.0 million**, but net loss widened, and cash decreased due to higher operating cash usage Consolidated Balance Sheet Highlights (Unaudited) | Account | March 31, 2023 ($ in thousands) | December 31, 2022 ($ in thousands) | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | 3,559 | 6,024 | | Accounts receivable, net | 31,924 | 33,249 | | Inventory | 39,675 | 36,582 | | Total current assets | 89,974 | 87,874 | | Total assets | 152,134 | 151,007 | | **Liabilities & Equity** | | | | Total current liabilities | 32,659 | 33,631 | | Long-term debt obligations | 22,480 | 20,726 | | Total liabilities | 58,066 | 57,605 | | Total stockholders' equity | 94,068 | 93,402 | Consolidated Statement of Operations Highlights (Unaudited) | Metric | Three Months Ended March 31, 2023 ($ in thousands) | Three Months Ended March 31, 2022 ($ in thousands) | | :--- | :--- | :--- | | Revenue | 25,045 | 22,481 | | Gross profit | 14,973 | 14,279 | | Operating loss | (2,132) | (2,366) | | Net loss from continuing operations | (1,842) | (1,343) | | Net (loss)/income per share (Diluted) | (0.06) | 0.30 | Consolidated Statement of Cash Flows Highlights (Unaudited) | Cash Flow Activity | Three Months Ended March 31, 2023 ($ in thousands) | Three Months Ended March 31, 2022 ($ in thousands) | | :--- | :--- | :--- | | Net cash used in operating activities | (4,509) | (2,373) | | Net cash used in investing activities | (510) | (9,964) | | Net cash provided by financing activities | 2,484 | 6,429 | | Net decrease in cash and cash equivalents | (2,465) | (6,340) | [ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS](index=18&type=section&id=ITEM%202.%20MANAGEMENT'S%20DISCUSSION%20AND%20ANALYSIS%20OF%20FINANCIAL%20CONDITION%20AND%20RESULTS%20OF%20OPERATIONS) Q1 2023 revenue growth was acquisition-driven, gross margin declined to **60%** due to product mix, and liquidity is sufficient - Revenue for Q1 2023 increased by **$2.6 million (11%)** to **$25.0 million**, primarily driven by revenues from the Lios acquisition completed in March 2022[80](index=80&type=chunk) - Gross margin decreased to **60%** in Q1 2023 from **64%** in Q1 2022, which was attributed to an unfavorable product mix[81](index=81&type=chunk) - Backlog was **$51.8 million** at March 31, 2023, a slight decrease from **$52.9 million** at December 31, 2022[73](index=73&type=chunk) - As of March 31, 2023, the company had **$3.6 million** in cash and cash equivalents, with an additional **$8.2 million** available under its revolving credit facility[88](index=88&type=chunk)[91](index=91&type=chunk) - Net cash used in operating activities increased to **$4.5 million** in Q1 2023, up from **$2.4 million** in Q1 2022, driven by an increase in working capital, particularly higher inventory levels[95](index=95&type=chunk) [ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK](index=22&type=section&id=ITEM%203.%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURES%20ABOUT%20MARKET%20RISK) Primary market risks are interest rate fluctuations on variable debt and foreign currency exposure, with no derivative use - The company is exposed to interest rate risk on its Term Loan and Revolving Line, which have floating rates based on the Daily Simple SOFR plus a margin[99](index=99&type=chunk) - As of March 31, 2023, a 0.25% increase in interest rates would result in an unfavorable annual impact on pre-tax earnings and cash flows of approximately **$63,000**[99](index=99&type=chunk) - Foreign currency exposure is mainly related to the net investment in foreign subsidiaries, with translation gains and losses recorded in accumulated other comprehensive loss, not affecting the results of operations[100](index=100&type=chunk) [ITEM 4. CONTROLS AND PROCEDURES](index=23&type=section&id=ITEM%204.%20CONTROLS%20AND%20PROCEDURES) Management concluded disclosure controls were effective as of March 31, 2023, with no material internal control changes - Based on an evaluation as of the end of the period, the President and Chief Executive Officer and the Chief Financial Officer concluded that the company's disclosure controls and procedures were effective[103](index=103&type=chunk) - No changes occurred in the company's internal control over financial reporting during the quarter ended March 31, 2023, that materially affected, or are reasonably likely to materially affect, these controls[104](index=104&type=chunk) PART II. OTHER INFORMATION [ITEM 1. LEGAL PROCEEDINGS](index=24&type=section&id=ITEM%201.%20LEGAL%20PROCEEDINGS) Management believes current legal proceedings will not materially affect the company's financial position or operating results - Management does not believe that any current legal proceedings will materially affect the company's financial position or results of operations[107](index=107&type=chunk) [ITEM 1A. RISK FACTORS](index=24&type=section&id=ITEM%201A.%20RISK%20FACTORS) The company faces diverse risks including supply chain, regulatory, IP, operational, and cybersecurity threats - **Business Risks:** The company depends on third-party vendors for specialized components, is subject to complex U.S. government contracting rules, and relies on a critical technology license from Intuitive Surgical, which is revocable under certain conditions[109](index=109&type=chunk)[110](index=110&type=chunk)[119](index=119&type=chunk) - **Operational Risks:** The business is experiencing impacts from inflationary pressures on labor and materials costs. It also faces risks related to the successful integration of acquired businesses, such as LIOS Sensing, and potential disruptions from health epidemics like COVID-19[149](index=149&type=chunk)[160](index=160&type=chunk)[162](index=162&type=chunk) - **Regulatory & IP Risks:** Operations are subject to numerous domestic and foreign laws, including export controls (ITAR) and data privacy regulations (GDPR, CCPA). The company's success also depends on its ability to protect its proprietary technology and defend against infringement claims from third parties[166](index=166&type=chunk)[177](index=177&type=chunk)[193](index=193&type=chunk) - **Cybersecurity Risks:** The company faces evolving cybersecurity threats and disclosed that it detected a cyber incident in January 2023, for which it launched an investigation and notified law enforcement[210](index=210&type=chunk)[213](index=213&type=chunk) [ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS](index=44&type=section&id=ITEM%202.%20UNREGISTERED%20SALES%20OF%20EQUITY%20SECURITIES%20AND%20USE%20OF%20PROCEEDS) No unregistered equity sales, use of registered proceeds, or equity purchases were reported this quarter - The item is marked as 'Not applicable' for the quarter[231](index=231&type=chunk) [ITEM 6. EXHIBITS](index=45&type=section&id=ITEM%206.%20EXHIBITS) Key exhibits filed include amended bylaws, loan agreement amendments, and required CEO and CFO certifications - Key exhibits filed with this report include CEO and CFO certifications (31.1, 31.2, 32.1, 32.2) and Inline XBRL financial data (101)[232](index=232&type=chunk)

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-K (MARK ONE) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE FISCAL YEAR ENDED DECEMBER 31, 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 000-52008 LUNA INNOVATIONS INCORPORATED (Exact name of Registrant as Specified in its Charter) (State or Other Jurisdic ...

Luna Innovations Incorporated (NASDAQ:LUNA) Q4 2022 Earnings Conference Call March 14, 2023 5:00 PM ET Company Participants Allison Woody - Director of Administration Scott Graeff - President and Chief Executive Officer Gene Nestro - Chief Financial Officer Brian Soller - Chief Technology Officer Conference Call Participants Jim Marrone - Singular Research Alexander Henderson - Needham & Company, LLC Paul Essi - William K. Woodruff & Co. David Kang - B. Riley FBR, Inc. Operator Good afternoon, and welcome t ...

March 14, 2023 Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995 Adjusted Financial Measures | --- | --- | --- | --- | |-------|-------|-------|-------------------------------------| | | | | | | | 2 | | NASDAQ: LUNA | | | | | Luna Innovations Incorporated© 2023 | Scott Graeff Brian Soller Gene Nestro NASDAQ: LUNA Fourth-Quarter and Full-Year FY22 Results Revenues of $31.7M; up 31% year over year Gross margin of 61%, compared to 58% for the prior year Adjusted EBITDA1 of $4.7M, ...

Luna Innovations Incorporated (NASDAQ:LUNA) Q3 2022 Results Conference Call November 10, 2022 5:00 PM ET Company Participants Allison Woody - Director of Administration Scott Graeff - President and Chief Executive Officer Gene Nestro - Chief Financial Officer Brian Soller - Chief Operating Officer Conference Call Participants Alex Henderson - Needham & Company Chris Sakai - Singular Research Dave Kang - B. Riley FBR Operator Good afternoon and welcome to the Q3 2022 Luna Innovations Incorporated Earnings Co ...