nLIGHT, Inc. · NASDAQ:LASR
nLIGHT — Investor Presentation (March 2021)
37 slides from nLIGHT's investor presentation, March 2021
Slide 1: Investor Presentation
Investor Presentation March 2021
Slide 2: Safe Harbor Statement
Safe Harbor Statement Certain statements in this presentation are “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation
Slide 3: nLIGHT at a Glance
nLIGHT at a Glance Focus High-power semiconductor and fiber lasers Founded 2000 Headquarters Vancouver, WA USA 2020 Financials $223M Revenue (26% Y-o-Y growth) $18.2M Adjusted EBITDA (84% Y-o-Y growth) Employees > 1,250 Patents > 500 issued and pending Technology Vertically integrated with leading t
Slide 4: Annual Revenue | track record of growth
Annual Revenue | track record of growth nLIGHT Worldwide Annual Revenue $ Millions $250 CAGR 22% $223 $200 $191 $177 $150 $139 $101 $100 $50 $0 2016 2017 2018 2019 2020 Y-o-Y Growth 16% 37% 38% -8% 26% 4
Slide 5: nLIGHT Strategy | continued technology innovation
nLIGHT Strategy | continued technology innovation Continued innovation across our vertically integrated business model Technology enabling new laser applications Market Focused on geographies and markets driven by growing applications Financials >20% revenue CAGR and strong operating leverage Note:
Slide 6: Vertical Integration | driving differentiation and cost improvements
Vertical Integration | driving differentiation and cost improvements Semiconductor Semiconductor Optical Fiber Laser & Chip Laser Fiber Beam Control 6
Slide 7: Semiconductor Lasers | continuous improvements over the past 20 years
Semiconductor Lasers | continuous improvements over the past 20 years High-Power Semiconductor Laser Brilliance Brilliance Normalized (Watt / cm2 -sr) 20,000 18,000 16,000 14,000 12,000 10,000 >350W 8,000 6,000 4,000 2,000 <1W 0 1985 1990 1995 2000 2005 2010 2015 2020 Source: Management’s estimates
Slide 8: Semiconductor Lasers | performance / cost improvement similar to Moore's Law
Semiconductor Lasers | performance / cost improvement similar to Moore’s Law Moore’s Law and High-Power Semiconductor Lasers Normalized $ / Performance 1,000,000,000 100,000,000 Semiconductor Lasers $ / Watt / (mm-mrad)2 10,000,000 1,000,000 100,000 10,000 1,000 Integrated Circuits 100 $ / Transisto
Slide 9: Fiber lasers with beam control
Fiber lasers with beam control nLIGHT fiber lasers with integrated beam control produce a range of user-selectable beam shapes and sizes, allowing users to tune the beam properties to improve the speed and quality when cutting, welding, and 3-D printing metal parts
Slide 10: nLIGHT Advantages Versus Competing Beam Technologies
nLIGHT Advantages Versus Competing Beam Technologies Beam-Shaping Fiber Beam Feature nLIGHT Optics Combination No free-space optics ✔ ✘ ✔ Standard fixed-optic process ✔ ✘ ✔ head Integrated into laser ✔ ✘ ✔ Full-power available for all beam ✔ ✔ ✘ shapes Optimized power distributions ✔ ✘ ✘ Switching o
Slide 11: nLIGHT Strategy | focus on growing markets
nLIGHT Strategy | focus on growing markets Continued innovation across our vertically integrated business model Technology enabling new laser applications Market Focused on geographies and markets driven by growing applications Financials >20% revenue CAGR and strong operating leverage Note: Revenue
Slide 12: Markets | focused on three key markets
Markets | focused on three key markets Microfabrication Industrial Aerospace and Defense Images: Illustrative products and applications neither implies nor constitutes endorsement. 12
Slide 13: Microfabrication | a leader in core semiconductor laser technology
Microfabrication | a leader in core semiconductor laser technology Semiconductor Semiconductor Solid-State Laser Chip Laser Laser System 13
Slide 14: Microfabrication | proliferation of applications enabled by lasers
Microfabrication | proliferation of applications enabled by lasers Flexible and HDI PCBs OLED Displays Marking 5G, connected devices, smartphones, TVs, wearables automotive, EV, semiconductor wearables Medical Electronics and Adv Packaging Semiconductor Equipment aesthetics, automation, surgical pro
Slide 15: Industrial | focused on three key applications
Industrial | focused on three key applications Cutting Welding Additive Manufacturing Market: > $1B Market: > $300M Market: > $70M Growth: > 10%/yr Growth: > 12%/yr Growth: > 15%/yr Note: Market represents 2020 market size. Growth represents 2020-2023 expected growth. Source: Bernstein, Optech, IDC,
Slide 16: Industrial | vertical integration enables broad range of products
Industrial | vertical integration enables broad range of products Semiconductor Semiconductor Optical Fiber Laser & Chip Laser Fiber Beam Control 16
Slide 17: Cutting | beam control optimizes thick and thin cutting with a single laser
Cutting | beam control optimizes thick and thin cutting with a single laser Thin Cutting Mode Nitrogen cutting of thin and non-ferrous metals Small “Flat Top” Beam Thick Cutting Mode Oxygen cutting of thick mild steel Large “Donut Mode” Beam 2D view from fiber end face (left) 3D beam intensity (righ
Slide 18: Welding | beam control optimizes seam width, depth, and spatter reduction
Welding | beam control optimizes seam width, depth, and spatter reduction Deep Penetration Keyhole Welding Mode improved productivity with lower heat input and minimal distortion Small “Flat Top” Beam Shallow Conduction Welding Mode keyhole stability and spatter reduction in aluminum battery housing
Slide 19: Additive Manufacturing | beam control allows fine processing and fast build rates
Additive Manufacturing | beam control allows fine processing and fast build rates Fine Feature Print Mode small spot size for printing of fine features “Small “Flat Top” Beam Coarse Print Mode large spot size for faster build rates with good quality Large “Donut Mode” Beam 2D view from fiber end fac
Slide 20: Defense | strong track record in broad range of applications
Defense | strong track record in broad range of applications Altimeter Countermeasures Exploration Guidance Images: Illustrative products and applications neither implies nor constitutes endorsement. 20
Slide 21: Directed Energy | broad range of benefits for emerging threats
Directed Energy | broad range of benefits for emerging threats Benefits of Laser Systems • Speed of light delivery • Precision engagement • Depth of magazine • Low engagement cost Images: U.S. Navy, U.S. Army – representative applications does not imply or constitute DoD endorsement. 21
Slide 22: Directed Energy | vertically integration optimizes performance
Directed Energy | vertically integration optimizes performance Semiconductor Semiconductor Optical Fiber DE High Energy Beam Device Laser Fiber Amplifier Laser Control Critical DE Laser Components DE Laser Subsystem • High power • High power • Low weight • High efficiency • Small size • Dynamic beam
Slide 23: Global Operations | North America, Europe and Asia
Global Operations | North America, Europe and Asia Lohja, Finland Shanghai, China Vancouver, WA, USA Optical Fiber Mfg Back-end Assembly Semi Fab | Fiber Laser Mfg Images: Illustrative products 23
Slide 24: Directed Energy | high priority for Department of Defense
Directed Energy | high priority for Department of Defense U.S. Budget for High-Energy Lasers for Directed Energy $ Millions $1,200 $1,000 $800 $600 $400 $200 $0 2015 2016 2017 2018 2019 2020 2021 Note: US Federal Fiscal Year Budget Analysis. Source: Based on data and analysis provided by the Directe
Slide 25: Financials | revenue growth and expanding profitability
Financials | revenue growth and expanding profitability Continued innovation across our vertically integrated business model Technology enabling new laser applications Market Focused on geographies and markets driven by growing applications Financials >20% revenue CAGR and strong operating leverage
Slide 26: 2020 Revenue | by end market
2020 Revenue | by end market Annual Revenue – by Market $ Millions $250 $223 $200 $191 23% Microfabrication $177 $150 39% $139 32% 38% Industrial $101 44% $100 47% 43% 43% $50 41% Aerospace & 39% 34% Defense 18% 24% 19% 15% $0 2016 2017 2018 2019 2020 Percentages may not sum to 100% due to rounding.
Slide 27: 2020 Revenue | by geography
2020 Revenue | by geography Annual Revenue – Geography $ Millions $250 Geography ‘20 vs. ‘19 Change $223 $200 $191 $177 32% China +10% 37% $150 $139 36% $101 40% $100 ROW 38% +35% 68% 63% 64% $50 60% 62% $0 2016 2017 2018 2019 2020 Percentages may not sum to 100% due to rounding. 27
Slide 28: Revenue | end market
Revenue | end market Quarterly Revenue – Market Market $ Millions Q420 vs. Q419 Change $70 $66 $62 $60 Industrial $52 $51 $52 36% +29% $50 $48 35% $46 $42 $44 $43 $43 $42 43% $40 $37 $37 49% 41% $35 38% 44% 37% 20% Microfabrication 43% 43% 45% 43% 23% +15% $30 $29 $30 42% 44% $25 $26 40% $22 38% 38%
Slide 29: Revenue | geography
Revenue | geography Quarterly Revenue – Geography Geography Q420 vs. Q419 Change $ Millions $70 $66 $62 $60 China 28% $52 $51 $52 +22% 31% $50 $48 $46 $42 $44 $43 $43 $42 33% 41% $40 $37 $37 46% 32% 38% $35 28% 36% 33% 40% 35% $30 $29 $30 38% 40% $25 $26 43% $22 40% 72% Rest of World 40% 40% 69% +70
Slide 30: Gross Margin | product and development
Gross Margin | product and development Revenue and Gross Margin - Quarterly Revenue $ Millions; % of Revenue $70 Overall GM % 40% Products GM % 36% $60 36% 35% 35% 32% 35% 34% 34% 33% 33% 32% 31% 28% 30% $50 29% 30% 30% 30% 24% 25% 28% 25% 25% $40 24% 23% 22% 22% 20% $30 15% 15% $20 10% $10 5% $0 0%
Slide 31: Operating Expenses | R&D and SG&A
Operating Expenses | R&D and SG&A Operating Expenses* $ Millions; % of Revenue $16 $15.4 40% R&D $15.0 $15.0 SG&A $14 $13.4 35% $12.9 $13.0 $12.9 35% $12.9 $12.5 $12 $11.4 $11.3 31% 30% $10.4 30% 29% $10 27% 27% 25% 26% 24% 24% 7.2 23% $8 22% 22% 5.8 20% 4.7 5.8 5.9 6.0 5.0 7.2 8.6 8.9 4.3 6.8 $6 15
Slide 32: Summary Financial Results | Profitability and Cash Flow
Summary Financial Results | Profitability and Cash Flow Full Year 2020 and Q4 2020 $ Millions; % of Revenue Q4 2019 Q4 2020 2019 2020 Net Income (Loss) ($10.7) ($4.5) ($12.9) ($20.9) Non-GAAP Net Income* (2.1) 5.2 1.1 7.3 EPS (diluted) (0.29) (0.12) (0.35) (0.55) Non-GAAP EPS (diluted)* (0.06) 0.12
Slide 33: Strong Balance Sheet and Working Capital Management
Strong Balance Sheet and Working Capital Management Cash and Debt Position ($M) Accounts Receivable ($M) and Inventory ($M) and Days Sales Outstanding (DSO) Days of Inventory (DOI) $175 $70 70 $70 128 126 128 135 121 $149 61 61 116 115 106 120 59 105 $150 $142 $143 $60 57 56 60 $60 109 $139 $53 $55
Slide 34: nLIGHT Strategy | well positioned for long term growth
nLIGHT Strategy | well positioned for long term growth Continued innovation across our vertically integrated business model Technology enabling new laser applications Market Focused on geographies and markets driven by growing applications Financials >20% revenue CAGR and strong operating leverage 3
Slide 35: Appendix
Appendix
Slide 36: Key Revenue Metrics
Key Revenue Metrics Unaudited, USD in thousands FY 2016 Q117 Q217 Q317 Q417 FY 2017 Q118 Q218 Q318 Q418 FY 2018 Q119 Q219 Q319 Q419 FY 2019 Q120 Q220 Q320 Q420 FY 2020 Revenues by end market Industrial 34,674 11,268 13,828 15,208 16,318 56,622 19,146 25,251 20,890 17,476 82,762 18,124 20,920 18,977
Slide 37: GAAP to Non-GAAP Reconciliation
GAAP to Non-GAAP Reconciliation Unaudited, USD in thousands Q119 Q219 Q319 Q419 FY 2019 Q120 Q220 Q320 Q420 FY 2020 Stock-based compensation included in following: Cost of revenues 209 267 340 385 1,201 345 339 505 432 1,621 Research and development 558 711 424 1,606 3,299 1,782 2,275 2,545 3,101 9,