nLIGHT, Inc. · NASDAQ:LASR
nLIGHT — Investor Presentation (November 2020)
35 slides from nLIGHT's investor presentation, November 2020
Slide 1: Investor Presentation
Investor Presentation November 2020 This presentation contains nLIGHT, Inc. proprietary and confidential information. No part of it may be circulated, quoted, or reproduced for distribution without prior written approval from nLIGHT, Inc.
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, and Section 21E of the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995. Wo
Slide 3: nLIGHT (Nasdaq: LASR) Overview
nLIGHT (Nasdaq: LASR) Overview Focus: High-power semiconductor and fiber lasers Founded: 2000 Headquarters: Vancouver, WA Sales: Q3 Revenue of $62 Million (+40% y/y growth) +20% CAGR 2014 - 2019 Patents: >375 Technology: Vertically integrated with leading technology in semiconductor and fiber lasers
Slide 4: Well Positioned for Future Growth
Well Positioned for Future Growth Market Growing market driven by improvement in laser technology Vertically integrated with leading technology focused on rest of world Strategy industrial and aerospace and defense markets Financials Track record of growth and strong operating leverage 4
Slide 5: Focused on Semiconductor Lasers and Fiber Lasers
Focused on Semiconductor Lasers and Fiber Lasers Semiconductor Lasers Fiber Lasers 5
Slide 6: Vertical Integration | Critical to driving differentiation and cost improvements
Vertical Integration | Critical to driving differentiation and cost improvements Semiconductor Semiconductor Optical Fiber Wafer Laser Fiber Laser 6
Slide 7: nLIGHT Addressable Opportunity | Growth from defense and ROW industrial
nLIGHT Addressable Opportunity | Growth from defense and ROW industrial Semiconductor and Fiber Laser Market $ Millions $4,000 Aerospace / Defense • Future growth >20% / $3,500 year • Driven by Directed $3,000 Energy $2,500 Industrial / $2,000 Microfabrication • Future growth ~10% / $1,500 year • Dr
Slide 8: Microfabrication | Focused on semiconductor lasers for broad range of applications
Microfabrication | Focused on semiconductor lasers for broad range of applications Key Applications • Consumer Electronics • Automotive • Medical Semiconductor Semiconductor Wafer Laser • Scientific 8
Slide 9: Semiconductor Lasers | Driving dramatic improvements over the past 20 years
Semiconductor Lasers | Driving dramatic 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 esti
Slide 10: Industrial | Vertically integrated from semiconductor to fiber laser
Industrial | Vertically integrated from semiconductor to fiber laser Key Applications • Metal Cutting • Welding • Additive Semiconductor Semiconductor Semiconductor Fiber Fiber Manufacturing Wafer Laser Laser Laser 10
Slide 11: Full Suite of Fiber Laser Solutions | 500W to 15kW
Full Suite of Fiber Laser Solutions | 500W to 15kW 11
Slide 12: Fiber Laser Power | Sales shifting to higher power fiber lasers
Fiber Laser Power | Sales shifting to higher power fiber lasers Fiber Laser Revenue by Power - Quarterly Percent of total fiber laser sales 100% 12% 11% 9% Low Power 17% 14% 90% 22% 19% 20% < 2kW 27% 34% 32% 80% 43% 51% 49% 34% 59% 58% 35% 70% 60% 64% 61% 39% 39% Medium Power 60% 39% 2kW – 5kW 48% 4
Slide 13: nLIGHT Fiber Lasers | Key advantages
nLIGHT Fiber Lasers | Key advantages 13
Slide 14: Differentiated Programmable Fiber Lasers
Differentiated Programmable Fiber Lasers Optimized beam profiles Applications • Cutting • Welding • Additive Manufacturing 14
Slide 15: 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 16: Cutting | Optimize Edge Quality and Speed for All Metal Thicknesses
Cutting | Optimize Edge Quality and Speed for All Metal Thicknesses Representative metal cutting speed (meters / minute) 50 40 <--- Focus Position ---> 30 -3.85 / -6.86 mm -2.01 / -3.57 mm -1.08 / -1.92 mm -0.46 / -0.82 mm 0.0 / 0.0 mm 0.54 / 0.96 mm 3.109 / 5.49 mm 1.0 0.8 1.0 1.0 1.0 1.0 1.0 1.0 0
Slide 17: Welding | Optimized for process quality and speed
Welding | Optimized for process quality and speed Deep Penetration Keyhole Shallow Conduction Welding Mode Welding Mode WFL Platform for Welding 17
Slide 18: Additive Manufacturing | Single Mode Programmable Fiber Laser
Additive Manufacturing | Single Mode Programmable Fiber Laser AFX: the first fiber laser that can switch between a true single-mode beam and other beam profiles – Faster build rates – Better part quality – Lower tool cost These improved economics pave the way for metal additive series production 18
Slide 19: Aerospace and Defense | Vertically integrated from semiconductor to fiber lasers
Aerospace and Defense | Vertically integrated from semiconductor to fiber lasers Key Applications Semiconductor Semiconductor Semiconductor Fiber Fiber • Directed Energy Wafer Laser Laser Amplifier Laser • Countermeasures • Navigation Beam Combination Beam Control 19
Slide 20: Directed Energy Laser | Value proposition for defense applications
Directed Energy Laser | Value proposition for defense applications 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. 20
Slide 21: Nutronics | Acquisition and corporate overview
Nutronics | Acquisition and corporate overview • Closed on November 14, 2019 • Founded 1995 and based in Longmont, CO • Over 30 full-time employees at time of acquisition • Key capabilities – Coherent beam combining – Beam control • Numerous programs completed with U.S. government agencies and prime
Slide 22: Global Operations
Global Operations Lohja, Finland Shanghai, China Vancouver, WA, USA Optical Fiber Mfg Back-end Assembly Semi Fab | Fiber Laser Mfg 22
Slide 23: Revenue | By geography
Revenue | By geography Quarterly Revenue $ Millions $70 $62 $60 $52 $51 $52 31% $50 $48 China $46 $42 $44 $43 $43 $42 33% 41% $40 $37 $37 46% 32% 38% $35 28% 36% 33% 40% 35% $29 $30 $30 $26 40% 38% $25 43% $22 40% 40% 69% $20 29% 41% 40% ROW 67% 68% 62% 72% 59% 64% 54% 67% 60% 65% 60% 62% $10 60% 60
Slide 24: Revenue | By end market
Revenue | By end market Quarterly Revenue $ Millions $70 $62 Revenue by Market Q320 vs. Q319 Change $60 $52 $51 $52 $50 $48 35% Industrial $46 $42 $44 $43 $43 +15% $42 43% $40 $37 $37 49% 41% $35 38% 44% 43% 37% $30 45% 43% 43% 23% Microfabrication $30 $29 +6% 42% 44% $25 $26 40% $22 38% 38% 33% 24%
Slide 25: Gross Margin
Gross Margin Revenue and Gross Margin - Quarterly $ Millions; % of Revenue Revenue GM% $70 45% 40% $60 35.8% 34.7% 34.2% 35.4% 33.8% 35% 32.8% 32.3% 33.0% $50 30.8% 29.6% 29.3% 30.0% 27.8% 30% 23.3% 25.0% $40 23.9% 21.8% 22.0% 25% $30 14.6% 20% 15% $20 10% $10 5% $0 0% Q116 Q216 Q316 Q416 Q117 Q217
Slide 26: Operating Expense
Operating Expense Operating Expenses* $ Millions; % of Revenue $16 40% $15.0 $15.0 SG&A 35% $14 $13.4 35% R&D $12.9 $13.0 $12.9 $12.8 $12.5 29% 30% $12 $11.4 $11.2 30% 31% 26% $10.4 24% 27% 27% 24% $10 25% 22% 22% 6.4 $8 7.8 6.2 20% 6.1 6.7 7.0 7.2 6.9 $6 15% 6.7 6.3 6.1 $4 8.6 10% 7.2 6.8 7.2 5.8 5
Slide 27: Profitability Summary
Profitability Summary $ Millions, except per share data Q3 2020 Q3 2019 2019 2018 Net Income (Loss) (2.1) (0.8) (12.9) 13.9 Non-GAAP Net Income* 5.3 0.3 1.1 18.7 EPS (diluted) (0.05) (0.02) (0.35) 0.32 Non-GAAP EPS (diluted)* 0.12 0.01 0.03 0.49 Adjusted EBITDA (non-GAAP)* 6.2 2.7 9.9 30.2 Cash Flow
Slide 28: 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 $168 $50 70 $70 140 128 126 128 $149 61 61 121 115 $45 59 116 $150 $142 $143 57 60 $60 105 120 $139 56 109 $40 $53
Slide 29: Well Positioned for Future Growth
Well Positioned for Future Growth Market Growing market driven by improvement in laser technology Vertically integrated with leading technology focused on rest of world Strategy industrial and aerospace and defense markets Financials Track record of growth and strong operating leverage 29
Slide 30: Simply brilliant
Ve eeceeee Simply brilliant
Slide 31: Appendix
Appendix
Slide 32: 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 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 18,647 76,6
Slide 33: GAAP to Non-GAAP Reconciliation
GAAP to Non-GAAP Reconciliation (unaudited, in thousands, except per share data) FY 2016 Q117 Q217 Q317 Q417 FY 2017 Q118 Q218 Q318 Q418 FY 2018 Q119 Q219 Q319 Q419 FY 2019 Q120 Q220 Q320 Stock-based compensation included in following: Cost of revenues 9 6 15 16 46 22 62 183 189 456 209 267 340 385
Slide 34: Reporting Segments
Reporting Segments Results for Quarter Ended September 30, 2020 $ Thousands Laser Products Advanced Development Revenue $51,117 $10,615 Gross Profit* $16,472 $688 Gross Margin 32.2% 6.5% Laser Products Advanced Development • Sales of our semiconductor lasers, fiber lasers, • Revenue earned from rese
Slide 35: COVID-19 Crisis Management Priorities
COVID-19 Crisis Management Priorities 1 Protect health of our employees and support our community 2 Maintain operations and service to support our customers Implement new remote engagement processes for sales, supply chain, internal 3 management 35