Slide 1: Earnings Presentation | Q4 2019
Earnings Presentation | Q4 2019
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: 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 Strategy world industrial and aerospace and defense markets Financials Track record of growth and strong operating leverage 3
Slide 4: Revenue | 2019 revenue decline of 7.7%; multi-year CAGR of +20%
Revenue | 2019 revenue decline of 7.7%; multi-year CAGR of +20% nLIGHT Revenue by End Market $ Millions CAGR 23% Revenue by Market 2019 vs. 2018 Change $200 $191 $177 37% Microfabrication $150 $139 32% -23% $101 44% $100 $87 Industrial 43% 47% 45% -7% $63 45% $50 58% 41% 32% 34% 14% Aerospace/Defens
Slide 5: nLIGHT Addressable Opportunity | Growth from defense and industrial outside China
nLIGHT Addressable Opportunity | Growth from defense and industrial outside China Semiconductor and Fiber Laser Market $ Millions $4,000 Aerospace / Defense $3,500 • Future growth >20% / year • Driven by Directed Energy $3,000 $2,500 Industrial / Microfabrication • Future growth ~10% / year $2,000 •
Slide 6: 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 6
Slide 7: 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 8: Industrial | Vertically integrated from semiconductor to fiber laser
Industrial | Vertically integrated from semiconductor to fiber laser Key Applications • Metal Cutting • Welding • Additive Manufacturing Semiconductor Semiconductor Semiconductor Fiber Fiber Wafer Laser Laser Laser 8
Slide 9: Power | Sales shifting to higher power fiber lasers
Power | Sales shifting to higher power fiber lasers Fiber Laser Revenue by Power - Quarterly Percent of total fiber laser sales 100% 14% Low Power 90% 19% 17% 20% 22% < 2kW 27% 34% 32% 80% 43% 51% 49% 70% 60% 59% 61% 58% 64% 39% Medium Power 2kW – 5kW 60% 48% 39% 43% 51% 57% 50% 44% 40% 49% 43% 30%
Slide 10: Differentiated Programmable Fiber Lasers
Differentiated Programmable Fiber Lasers Optimized beam profiles Applications • Cutting • Welding • Additive Manufacturing 10
Slide 11: Industrial | Growing sales outside China driven by Corona design wins
Industrial | Growing sales outside China driven by Corona design wins Industrial End Market Revenue by Geography $ Millions Industrial Revenue $90 by Geography 2019 vs. 2018 Change $80 $70 $60 China 60% 52% 19% Decline $50 $40 72% $30 $20 Rest of World 40% 48% 9% Growth $10 28% $0 2017 2018 2019 11
Slide 12: 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 12
Slide 13: Financial Update
Financial Update
Slide 14: Revenue | By end market
Revenue | By end market Annual Revenue $ Millions $200 $191 Revenue by Market $177 2019 vs. 2018 Change 37% $150 32% $139 Microfabrication -23% $101 44% $100 $87 43% 47% 45% $63 Industrial 45% -7% $50 41% 58% 32% 34% 14% Aerospace/Defense 24% 18% +24% 28% 22% 19% 15% $0 2014 2015 2016 2017 2018 2019
Slide 15: Revenue | By geography
Revenue | By geography Quarterly Revenue $ Millions $60 $52 $51 $50 $48 $46 $44 $43 $42 $42 33% $40 $37 $37 46% 32% 38% $35 36% 33% 40% 35% China $29 $30 $30 40% 37% $25 $26 43% $22 40% 40% 40% $20 29% 41% 67% 68% 62% 64% 54% 67% 65% 63% 60% ROW 60% $10 60% 60% 57% 71% 59% 60% $0 Q116 Q216 Q316 Q416
Slide 16: Revenue | By end market
Revenue | By end market Quarterly Revenue $ Millions $60 $51 $51 Revenue by Market $50 $48 Q4 19 vs. Q4 18 Change $46 $43 $44 $43 $42 37% 39% $40 Microfabrication $36 $37 38% -41% $35 30% 26% 41% 37% 36% $30 $29 $29 41% $25 $26 46% 44% $22 41% 45% 43% 43% Industrial $20 41% 44% 50% 49% 37% 44% +7% 4
Slide 17: Gross Margin Q4 vs. Q4
Gross Margin Q4 19 vs. Q4 18 | Margin lower on reduced volume and unfavorable mix 17
Slide 18: Operating Expenses
Operating Expenses OPEX Trend Excluding Stock-based Compensation Expense $ Millions $16 15.0 $14 12.9 13.0 12.9 12.5 $12 11.4 11.2 10.4 7.8 $10 6.7 7.0 7.2 6.9 SG&A $8 6.7 6.3 6.1 $6 R&D $4 7.2 5.8 5.9 5.8 6.0 4.3 4.7 5.0 $2 $0 Q118 Q218 Q318 Q418 Q119 Q219 Q319 Q419 * See Appendix for additional st
Slide 19: Profitability Summary
Profitability Summary $ Millions, except per share data Q4 2019 Q4 2018 2019 2018 Net Income (10.7) 2.4 (12.9) 13.9 Non-GAAP Net Income* (2.1) 4.3 1.1 18.7 EPS (diluted) (0.29) 0.06 (0.35) 0.32 Non-GAAP EPS (diluted)* (0.06) 0.10 0.03 0.49 Adjusted EBITDA (non-GAAP)* (1.4) 6.1 9.9 30.2 Cash Flow fro
Slide 20: Strong Balance Sheet and Working Capital Management
Strong Balance Sheet and Working Capital Management Cash and Debt Position ($M) Inventory ($M) and Accounts Receivable ($M) and Days of Inventory (DOI) Days Sales Outstanding (DSO) $200 $60 140 $50 70 128 126 $175 $168 61 61 121 $45 60 116 120 57 60 $149 $50 109 $150 $142 $143 $46 $46 $40 $139 98 $4
Slide 21: Outlook
Outlook • Q1 2020 Revenues: – $37 million to $43 million; midpoint of $40 million • Laser Products: approximately $34 million at midpoint • Advanced Development: approximately $6 million at midpoint – Includes estimated COVID-19 impact of approximately $8 million • Q1 2020 Gross Margin: – 17.0% to 2
Slide 22: 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 ROW Strategy industrial and aerospace and defense markets Financials Track record of growth and strong operating leverage 22
Slide 23: simply brilliant
Ve Seco Simply brilliant®
Slide 24: 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 Stock-based compensation included in following: Cost of revenues 9 6 15 16 46 22 62 183 189 456 209 267 340 385 1,201 Research