Luna(US:LUNA)2020-08-08 13:29Financial Data and Key Metrics Changes - Total revenues for Q2 2020 increased by 4% to $18.6 million compared to $17.8 million in Q2 2019 [45] - Adjusted EBITDA rose to $3 million, up from $2.4 million in the same quarter last year [49] - Operating profit improved to $1.8 million in Q2 2020 compared to a loss of $1 million in Q2 2019 [48] Business Line Data and Key Metrics Changes - The Lightwave segment saw a 3% year-over-year revenue increase to $12.9 million, driven by the sensing business [17][45] - Luna Labs reported total revenues of $5.6 million in Q2 2020, representing a 7% increase compared to the prior year [34][45] - Gross margin improved to over 51% in Q2 2020, up from approximately 49% in Q2 2019 [45] Market Data and Key Metrics Changes - Demand in military aerospace and infrastructure remained strong, while the automotive and commercial aerospace sectors were more significantly impacted by COVID-19 [28][102] - The communications test business experienced a slight decline in revenues year-over-year due to delays in capital spending [19][28] Company Strategy and Development Direction - The company continues to invest strategically in its business, including hiring new talent and implementing an ERP project to modernize operations [13][14] - The focus remains on leveraging growth in fiber optics and expanding international sales channels [21][22] - The company is actively pursuing digital marketing efforts to maintain customer engagement during the pandemic [30] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate the challenges posed by the pandemic, noting that no major disruptions to the supply chain are anticipated in the second half of the year [27][36] - The company tightened its 2020 revenue guidance to a range of $81 million to $83 million, reflecting a more optimistic outlook for the second half of the year [37][51] Other Important Information - The company hired 29 new employees in 2020, with about half in new positions and the rest as replacements [69][71] - The majority of revenues stemmed from the Lightwave segment, which accounted for approximately 70% of total revenues in Q2 2020 [46] Q&A Session Summary Question: Impact of COVID on revenue - Management confirmed that there were delays in purchase orders due to COVID-19, but these were not significant and orders were expected to come through in July [57][58] Question: Guidance for second half growth - Management explained that the second half guidance implies stronger growth due to delayed orders from the first half and the reopening of academic labs [60][64] Question: Employee headcount increase - The company reported hiring 29 employees, with a focus on sales and marketing roles to drive revenue growth [69][71] Question: M&A activity - Management indicated that they are actively pursuing M&A opportunities but emphasized the importance of finding the right fit and not overpaying [75][79] Question: Supply chain disruptions - Management noted that supply chain issues were manageable and did not expect significant impacts on product lines, including the OBR [90][91]