Slide 1: Earnings Presentation | Q1 2020
Earnings Presentation | Q1 2020
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: Q1 20 Business Highlights
Q1 20 Business Highlights • Solid execution in a challenging quarter • Financial results ahead of expectations outlined in mid-February • Record quarter of aerospace and defense sales • Commercial market demand remained resilient • Growing portion of overall sales from North America and Rest of Worl
Slide 4: Revenue | By End Market
Revenue | By End Market Quarterly Revenue $ Millions $60 $52 $51 Revenue by Market $50 $48 Q120 vs. Q119 Change $46 $44 $43 $43 $42 $42 $40 $37 $37 49% 41% $35 38% 44% Industrial 37% -12% 43% 43% 45% 43% $29 $30 $30 42% 44% $25 $26 40% $22 38% 38% 24% Microfabrication 33% $20 35% 39% -28% 28% 41% 26
Slide 5: 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% 12% Low Power 90% 19% 17% 20% 22% < 2kW 27% 34% 32% 80% 43% 51% 49% 70% 60% 59% 61% 58% 64% 39% 39% Medium Power 2kW – 5kW 60% 48% 39% 43% 51% 57% 50% 44% 40% 49%
Slide 6: Revenue | By Geography
Revenue | By Geography Quarterly Revenue $ Millions $60 $52 $51 $50 $48 $46 $44 $43 $43 $42 $42 33% $40 $37 $37 46% 32% 38% $35 28% 36% 33% 40% 35% China $29 $30 $30 40% 38% $25 $26 43% $22 40% 40% 40% $20 29% 41% 67% 68% 72% 67% 62% 65% 64% 54% 62% 60% ROW 60% $10 60% 60% 57% 71% 59% 60% $0 Q116 Q2
Slide 7: 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 7
Slide 8: Financial Update
Financial Update
Slide 9: Q1 20 Financial Highlights
Q1 20 Financial Highlights • Q1 2020 Revenues of $43.2 million – Products revenues of $36.9 million – Development revenues of $6.3 million • Includes revenues from Nutronics of $4.4 million • Q1 2020 Gross Margin of 22.0% – Products gross margin of 24.5% – Development gross margin of 7.5% • Q1 2020
Slide 10: Gross Margin
Gross Margin Revenue and Gross Margin - Quarterly $ Millions; % of Revenue Revenue GM% $60 50% 45% $50 40% 35.8% $40 34.7% 34.2% 35.4% 33.8% 35% 32.8% 32.3% 33.0% 30.8% 29.6% 30.0% 29.3% $30 30% 23.3% 23.9% 21.8% 25% $20 22.0% 14.6% 20% $10 15% $0 10% Q116 Q216 Q316 Q416 Q117 Q217 Q317 Q417 Q118 Q21
Slide 11: Operating Expense
Operating Expense Operating Expense Trend Excluding Stock-based Compensation Expense* $ Millions $16 15.0 $14 12.9 13.0 12.9 12.5 12.8 $12 11.4 11.2 10.4 7.8 $10 6.1 6.7 7.0 7.2 6.9 SG&A $8 6.7 6.3 6.1 $6 R&D $4 7.2 6.8 5.8 5.9 5.8 6.0 4.7 5.0 $2 4.3 $0 Q118 Q218 Q318 Q418 Q119 Q219 Q319 Q419 Q120 *
Slide 12: Profitability Summary
Profitability Summary Financial Summary $ Millions, except per share data Q1 2020 Q1 2019 Q4 2019 Net Income (7.5) (1.2) (10.7) Non-GAAP Net Income* (3.0) 0.7 (2.1) EPS (diluted) (0.20) (0.03) (0.29) Non-GAAP EPS (diluted)* (0.08) 0.02 (0.06) Adjusted EBITDA (non-GAAP)* 0.2 3.1 (1.4) Cash Flow from
Slide 13: 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) $200 $50 70 $60 140 128 126 128 61 61 121 $175 $168 $45 59 116 57 60 $49 120 56 $50 109 $149 $40 105 $46 $46 $150 $142
Slide 14: Outlook
Outlook • Q2 2020 Revenues of $45 million to $51 million; midpoint of $48 million – Laser Products: approximately $41.5 million at midpoint – Advanced Development: approximately $6.5 million at midpoint • Q2 2020 Gross Margin of 21.0% to 25.0% – Laser Products: 24.0% to 28.0% – Advanced Development:
Slide 15: simply brilliant
Ue eco simply brilliant®
Slide 16: Appendix
Appendix
Slide 17: 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 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 76,669 15,990
Slide 18: 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 Stock-based compensation included in following: Cost of revenues 9 6 15 16 46 22 62 183 189 456 209 267 340 385 1,201 345
Slide 19: Summary COVID-19 Crisis Management Priorities
Summary 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 4 Manage cash while continuing to invest in ne