Luna(US:LUNA)2020-05-09 18:53Financial Data and Key Metrics Changes - Total revenues for Q1 2020 increased by 16% to $17.1 million compared to $14.8 million in Q1 2019 [15][39] - Adjusted EBITDA for Q1 2020 was $1.6 million, up from $960,000 in Q1 2019 [43] - Gross margin improved by 320 basis points to approximately 49% in Q1 2020 compared to over 45% in Q1 2019 [15][40] - Net income from continuing operations for Q1 2020 was $0.3 million or $0.01 per share, down from $1.1 million in Q1 2019, which included a one-time tax benefit of $1.9 million [42] Business Line Data and Key Metrics Changes - The Lightwave division reported a 24% year-over-year increase in product revenues, driven by strong performance in the communications test segment [16] - The sensing segment saw a decline in total revenue for Q1 2020 compared to the prior year, with several large orders shifting to Q2 [20][26] - Luna Labs revenues increased by 3% year-over-year to $6.8 million in Q1 2020 [26] Market Data and Key Metrics Changes - The company expects a slowdown in the aerospace and automotive industries due to COVID-19, but does not anticipate a material impact on infrastructure, defense, and communications segments [25][56] - The company has not seen significant impacts on sales or the health of the sales pipeline within the Lightwave division as of now [25] Company Strategy and Development Direction - The company is focused on maintaining its skilled workforce during the pandemic to ensure operational continuity [10] - The strategy includes leveraging growth in fiber optics and continuing to invest in sales and engineering capabilities [21] - The company is actively exploring acquisition opportunities that may arise due to market stress caused by COVID-19 [60][62] Management's Comments on Operating Environment and Future Outlook - Management reaffirmed guidance for the full year, expecting total revenues of $81 million to $84 million, trending towards the lower end of the range [33][46] - The company has maintained a strong cash position of $26.3 million with no debt, allowing for flexibility in navigating the current environment [44][60] - Management emphasized the importance of adapting to the new business environment through virtual engagement with customers [24] Other Important Information - The company has not furloughed any employees or reduced compensation during the pandemic [30] - The annual shareholder meeting will be held virtually due to the pandemic [78] Q&A Session Summary Question: Impact of trade shows on revenue - Management noted that trade shows historically generate a significant portion of leads, estimated at around 40% [53][54] Question: COVID-19 impact on specific industries - Management indicated that the commercial aerospace segment is expected to be hit hard, but much of the work is in R&D for future products, which may not impact 2020 revenues significantly [55][56][57] Question: Cash balance and acquisition strategy - Management confirmed that the company is actively looking for acquisition opportunities, particularly those that may be under stress due to COVID-19 [60][62]