Cover page
Cover page - shares | 6 Months Ended | |
Jun. 30, 2022 | Aug. 10, 2022 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Jun. 30, 2022 | |
Document Transition Report | false | |
Entity File Number | 000-52008 | |
Entity Registrant Name | LUNA INNOVATIONS INC | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 54-1560050 | |
Entity Address, Address Line One | 301 First Street SW | |
Entity Address, Address Line Two | Suite 200 | |
Entity Address, City or Town | Roanoke | |
Entity Address, State or Province | VA | |
Entity Address, Postal Zip Code | 24011 | |
City Area Code | 540 | |
Local Phone Number | 769-8400 | |
Title of 12(b) Security | Common Stock, $0.001 par value per share | |
Trading Symbol | LUNA | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | No | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 32,809,755 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2022 | |
Document Fiscal Period Focus | Q2 | |
Entity Central Index Key | 0001239819 | |
Current Fiscal Year End Date | --12-31 |
Consolidated Balance Sheets (Un
Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands | Jun. 30, 2022 | Dec. 31, 2021 |
Current assets: | ||
Cash and cash equivalents | $ 4,864 | $ 17,128 |
Accounts receivable, net | 30,422 | 20,913 |
Contract assets | 3,369 | 5,166 |
Inventory | 30,754 | 22,493 |
Prepaid expenses and other current assets | 6,535 | 3,793 |
Assets held for sale | 0 | 12,952 |
Total current assets | 75,944 | 82,445 |
Property and equipment, net | 4,499 | 2,988 |
Intangible assets, net | 20,399 | 17,177 |
Goodwill | 28,441 | 18,984 |
Operating lease right-of-use assets | 4,774 | 5,075 |
Other non-current assets | 3,214 | 247 |
Deferred tax asset | 4,612 | 3,321 |
Total assets | 141,883 | 130,237 |
Current liabilities: | ||
Current portion of long-term debt obligations | 2,000 | 4,167 |
Accounts payable | 3,881 | 2,809 |
Accrued and other current liabilities | 16,413 | 9,258 |
Contract liabilities | 4,816 | 4,649 |
Current portion of operating lease liabilities | 2,449 | 2,101 |
Liabilities associated with assets held for sale | 0 | 9,703 |
Total current liabilities | 29,559 | 32,687 |
Long-term debt obligations, net of current portion | 19,218 | 11,673 |
Long-term portion of operating lease liabilities | 2,767 | 3,509 |
Deferred tax liability | 1,357 | 0 |
Other long-term liabilities | 421 | 445 |
Total liabilities | 53,322 | 48,314 |
Commitments and contingencies (Note 13) | ||
Stockholders’ equity: | ||
Common stock, par value $0.001, 100,000,000 shares authorized, 34,528,065 and 33,855,725 shares issued, 32,752,348 and 32,116,270 shares outstanding at June 30, 2022 and December 31, 2021, respectively | 35 | 34 |
Treasury stock at cost, 1,784,957 and 1,744,026 shares at June 30, 2022 and December 31, 2021, respectively | (5,542) | (5,248) |
Additional paid-in capital | 102,043 | 98,745 |
Accumulated deficit | (4,345) | (11,575) |
Accumulated other comprehensive loss | (3,630) | (33) |
Total stockholders’ equity | 88,561 | 81,923 |
Total liabilities and stockholders’ equity | $ 141,883 | $ 130,237 |
Consolidated Balance Sheets (_2
Consolidated Balance Sheets (Unaudited) (Parenthetical) (Unaudited) - $ / shares | Jun. 30, 2022 | Dec. 31, 2021 |
Statement of Financial Position [Abstract] | ||
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, authorized (in shares) | 100,000,000 | 100,000,000 |
Common stock, issued (in shares) | 34,528,065 | 33,855,725 |
Common stock, outstanding (in shares) | 32,752,348 | 32,116,270 |
Treasury stock (in shares) | 1,784,957 | 1,744,026 |
Consolidated Statements of Oper
Consolidated Statements of Operations (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Income Statement [Abstract] | ||||
Revenue | $ 26,162 | $ 21,965 | $ 48,642 | $ 42,962 |
Cost of revenue | 10,199 | 9,384 | 18,400 | 18,110 |
Gross profit | 15,963 | 12,581 | 30,242 | 24,852 |
Operating expense: | ||||
Selling, general and administrative | 15,760 | 12,805 | 29,862 | 23,739 |
Research, development and engineering | 2,665 | 1,810 | 5,207 | 4,727 |
Total operating expense | 18,425 | 14,615 | 35,069 | 28,466 |
Operating loss | (2,462) | (2,034) | (4,827) | (3,614) |
Other income/(expense): | ||||
Other income | 53 | 0 | 73 | 0 |
Interest expense, net | (111) | (122) | (224) | (265) |
Total other expense, net | (58) | (122) | (151) | (265) |
Loss from continuing operations before income taxes | (2,520) | (2,156) | (4,978) | (3,879) |
Income tax expense/(benefit) | 422 | (995) | (693) | (1,659) |
Net loss from continuing operations | (2,942) | (1,161) | (4,285) | (2,220) |
Income from discontinued operations, net of income tax expense (benefit) of ($856), $101, $166 and $146 | 591 | 931 | 594 | 1,672 |
Gain on sale of discontinued operations, net of tax of $3,117 | 0 | 0 | 10,921 | 0 |
Net income from discontinued operations | 591 | 931 | 11,515 | 1,672 |
Net (loss)/income | $ (2,351) | $ (230) | $ 7,230 | $ (548) |
Net loss per share from continuing operations: | ||||
Basic (in dollars per share) | $ (0.09) | $ (0.04) | $ (0.13) | $ (0.07) |
Diluted (in dollars per share) | (0.09) | (0.04) | (0.13) | (0.07) |
Net income per share from discontinued operations: | ||||
Basic (in dollars per share) | 0.02 | 0.03 | 0.36 | 0.05 |
Diluted (in dollars per share) | 0.02 | 0.03 | 0.36 | 0.05 |
Net (loss)/income per share attributable to common stockholders: | ||||
Basic (in dollars per share) | (0.07) | (0.01) | 0.22 | (0.02) |
Diluted (in dollars per share) | $ (0.07) | $ (0.01) | $ 0.22 | $ (0.02) |
Weighted average shares: | ||||
Basic (in shares) | 32,478,736 | 31,494,563 | 32,361,560 | 31,413,451 |
Diluted (in shares) | 32,478,736 | 31,494,563 | 32,361,560 | 31,413,451 |
Consolidated Statements of Op_2
Consolidated Statements of Operations (Unaudited) (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Income Statement [Abstract] | ||||
Discontinued operations tax effect | $ (856) | $ 101 | $ 166 | $ 146 |
Tax effect of gain from discontinued operation | $ 3,117 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Statement of Comprehensive Income [Abstract] | ||||
Net (loss)/income | $ (2,351) | $ (230) | $ 7,230 | $ (548) |
Other comprehensive (loss)/income | (3,227) | (247) | (3,597) | 876 |
Total other comprehensive (loss)/income | $ (5,578) | $ (477) | $ 3,633 | $ 328 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Stockholders' Equity (Unaudited) - USD ($) $ in Thousands | Total | Common Stock | Treasury Stock | Additional Paid-in Capital | Accumulated Deficit | Accumulated Other Comprehensive (Loss)/Income |
Common Stock, Beginning Balance (in shares) at Dec. 31, 2020 | 31,024,537 | |||||
Treasury Stock, Beginning Balance (in shares) at Dec. 31, 2020 | 1,699,975 | |||||
Beginning balance at Dec. 31, 2020 | $ 74,442 | $ 33 | $ (4,789) | $ 92,403 | $ (12,957) | $ (248) |
Increase (Decrease) in Stockholders' Equity | ||||||
Exercise of stock options (in shares) | 578,181 | |||||
Exercise of stock options | 1,489 | 1,489 | ||||
Share-based compensation (in shares) | 146,013 | |||||
Share-based compensation | 1,514 | 1,514 | ||||
ESPP issuance (in shares) | 63,193 | |||||
ESPP issuance | 530 | 530 | ||||
Purchase of treasury stock (in shares) | (39,480) | 39,480 | ||||
Purchase of treasury stock | (420) | $ (420) | ||||
Net (loss)/income | (548) | (548) | ||||
Foreign currency translation adjustment | 876 | 876 | ||||
Common Stock, Ending Balance (in shares) at Jun. 30, 2021 | 31,772,444 | |||||
Treasury Stock, Ending Balance (in shares) at Jun. 30, 2021 | 1,739,455 | |||||
Ending balance at Jun. 30, 2021 | 77,883 | $ 33 | $ (5,209) | 95,936 | (13,505) | 628 |
Common Stock, Beginning Balance (in shares) at Mar. 31, 2021 | 31,392,989 | |||||
Treasury Stock, Beginning Balance (in shares) at Mar. 31, 2021 | 1,720,785 | |||||
Beginning balance at Mar. 31, 2021 | 76,546 | $ 33 | $ (4,991) | 93,904 | (13,275) | 875 |
Increase (Decrease) in Stockholders' Equity | ||||||
Exercise of stock options (in shares) | 263,484 | |||||
Exercise of stock options | 645 | 645 | ||||
Share-based compensation (in shares) | 71,448 | |||||
Share-based compensation | 857 | 857 | ||||
ESPP issuance (in shares) | 63,193 | |||||
ESPP issuance | 530 | 530 | ||||
Purchase of treasury stock (in shares) | (18,670) | 18,670 | ||||
Purchase of treasury stock | (218) | $ (218) | ||||
Net (loss)/income | (230) | (230) | ||||
Foreign currency translation adjustment | (247) | (247) | ||||
Common Stock, Ending Balance (in shares) at Jun. 30, 2021 | 31,772,444 | |||||
Treasury Stock, Ending Balance (in shares) at Jun. 30, 2021 | 1,739,455 | |||||
Ending balance at Jun. 30, 2021 | $ 77,883 | $ 33 | $ (5,209) | 95,936 | (13,505) | 628 |
Common Stock, Beginning Balance (in shares) at Dec. 31, 2021 | 32,116,270 | 32,116,270 | ||||
Treasury Stock, Beginning Balance (in shares) at Dec. 31, 2021 | 1,744,026 | |||||
Beginning balance at Dec. 31, 2021 | $ 81,923 | $ 34 | $ (5,248) | 98,745 | (11,575) | (33) |
Increase (Decrease) in Stockholders' Equity | ||||||
Exercise of stock options (in shares) | 360,432 | |||||
Exercise of stock options | 1,158 | $ 1 | 1,157 | |||
Share-based compensation (in shares) | 215,123 | |||||
Share-based compensation | 1,620 | 1,620 | ||||
ESPP issuance (in shares) | 101,454 | |||||
ESPP issuance | 521 | 521 | ||||
Purchase of treasury stock (in shares) | (40,931) | 40,931 | ||||
Purchase of treasury stock | (294) | $ (294) | ||||
Net (loss)/income | 7,230 | 7,230 | ||||
Foreign currency translation adjustment | $ (3,597) | (3,597) | ||||
Common Stock, Ending Balance (in shares) at Jun. 30, 2022 | 32,752,348 | 32,752,348 | ||||
Treasury Stock, Ending Balance (in shares) at Jun. 30, 2022 | 1,784,957 | |||||
Ending balance at Jun. 30, 2022 | $ 88,561 | $ 35 | $ (5,542) | 102,043 | (4,345) | (3,630) |
Common Stock, Beginning Balance (in shares) at Mar. 31, 2022 | 32,361,122 | |||||
Treasury Stock, Beginning Balance (in shares) at Mar. 31, 2022 | 1,782,289 | |||||
Beginning balance at Mar. 31, 2022 | 92,017 | $ 34 | $ (5,526) | 99,906 | (1,994) | (403) |
Increase (Decrease) in Stockholders' Equity | ||||||
Exercise of stock options (in shares) | 217,040 | |||||
Exercise of stock options | 938 | $ 1 | 937 | |||
Share-based compensation (in shares) | 75,400 | |||||
Share-based compensation | 679 | 679 | ||||
ESPP issuance (in shares) | 101,454 | |||||
ESPP issuance | 521 | 521 | ||||
Purchase of treasury stock (in shares) | (2,668) | 2,668 | ||||
Purchase of treasury stock | (16) | $ (16) | ||||
Net (loss)/income | (2,351) | (2,351) | ||||
Foreign currency translation adjustment | $ (3,227) | (3,227) | ||||
Common Stock, Ending Balance (in shares) at Jun. 30, 2022 | 32,752,348 | 32,752,348 | ||||
Treasury Stock, Ending Balance (in shares) at Jun. 30, 2022 | 1,784,957 | |||||
Ending balance at Jun. 30, 2022 | $ 88,561 | $ 35 | $ (5,542) | $ 102,043 | $ (4,345) | $ (3,630) |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2021 | |
Cash flows used in operating activities | ||
Net income/(loss) | $ 7,230 | $ (548) |
Adjustments to reconcile net income/(loss) to net cash used in operating activities | ||
Depreciation and amortization | 2,694 | 2,360 |
Share-based compensation | 2,177 | 1,514 |
Gain on sale of discontinued operations, net of tax | (10,921) | 0 |
Deferred taxes | (124) | 0 |
Tax benefit from release of valuation allowance | 0 | 475 |
Change in assets and liabilities | ||
Accounts receivable | (6,555) | (473) |
Contract assets | 140 | 763 |
Inventory | (4,281) | (1,562) |
Other current assets | (3,870) | (2,399) |
Other long-term assets | 646 | 0 |
Accounts payable and accrued and other current liabilities | 6,123 | (2,185) |
Contract liabilities | 1,196 | (826) |
Other long-term liabilities | (1,523) | 0 |
Net cash used in operating activities | (7,068) | (2,881) |
Cash flows used in investing activities | ||
Acquisition of property and equipment | (1,657) | (551) |
Intangible property costs | 4 | |
Intangible property costs | (141) | |
Proceeds from sale of property and equipment | 25 | 0 |
Proceeds from sale of discontinued operations | 12,973 | 0 |
Acquisition of Lios | (22,085) | 0 |
Net cash used in investing activities | (10,740) | (692) |
Cash flows provided by/(used in) financing activities | ||
Payments on finance lease obligations | (24) | (24) |
Proceeds from borrowings under debt obligations | 21,150 | 0 |
Payments of debt obligations | (15,772) | (2,072) |
Repurchase of common stock | (294) | (420) |
Proceeds from ESPP | 521 | 530 |
Proceeds from the exercise of options | 1,158 | 1,490 |
Net cash provided by/(used in) financing activities | 6,739 | (496) |
Effect of exchange rate changes on cash and cash equivalents | (1,195) | 673 |
Net decrease in cash and cash equivalents | (12,264) | (3,396) |
Cash and cash equivalents—beginning of period | 17,128 | 15,366 |
Cash and cash equivalents—end of period | 4,864 | 11,970 |
Supplemental disclosure of cash flow information | ||
Cash paid for interest | 183 | 125 |
Cash received for income tax refund, net | $ 787 | $ 87 |
Basis of Presentation and Signi
Basis of Presentation and Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2022 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Significant Accounting Policies | Basis of Presentation and Significant Accounting Policies Nature of Operations Luna Innovations Incorporated (“we,” “Luna Innovations” or the “Company”), headquartered in Roanoke, Virginia, was incorporated in the Commonwealth of Virginia in 1990 and reincorporated in the State of Delaware in April 2003. We are a leader in advanced optical technology, providing high performance fiber optic test, measurement and control products for the telecommunications and photonics industries, and distributed fiber optic sensing solutions that measure, or "sense" the structures for industries ranging from aerospace, automotive, oil and gas, security and infrastructure. Our communications test and control products help customers test their fiber optic networks and assemblies with speed and precision in both lab and production environments, accelerating the development of fiber optic products and assuring accurate testing of optical components like photonic integrated circuits and coherent receivers, which are both critical elements of meeting the world’s exponentially growing demand for bandwidth. Our distributed fiber optic sensing products help designers and manufacturers more efficiently develop new and innovative products by measuring stress, strain, and temperature at a high resolution for new designs or manufacturing processes. Our distributed fiber optic sensing products ensure the safety and structural integrity or operational health of critical assets in the field, by monitoring stress, strain, and vibration in large civil and industrial infrastructure such as bridges, roads, pipelines and borders. We also provide applied research services, primarily under federally funded development programs, that leverage our sensing and instrumentation technologies to meet the specific needs and applications of our customers. Unaudited Interim Financial Information The accompanying unaudited consolidated interim financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial statements and Article 10 of Regulation S-X of the Securities Exchange Act of 1934, as amended. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for annual financial statements. The unaudited consolidated interim financial statements have been prepared on the same basis as the annual financial statements and in the opinion of management reflect all adjustments, consisting of only normal recurring adjustments considered necessary to present fairly our financial position at June 30, 2022, results of operations, comprehensive income/(loss) and changes in stockholders' equity for the three and six months ended June 30, 2022 and 2021, and cash flows for the six months ended June 30, 2022 and 2021. The results of operations for the three and six months ended June 30, 2022 are not necessarily indicative of the results that may be expected for the year ending December 31, 2022. The consolidated balance sheet as of December 31, 2021 was derived from our audited consolidated financial statements. The consolidated interim financial statements, including our significant accounting policies, should be read in conjunction with the audited consolidated financial statements and the notes thereto for the year ended December 31, 2021, included in our Annual Report on Form 10-K as filed with the Securities and Exchange Commission (“SEC”) on March 14, 2022. Goodwill and Intangible Assets Goodwill and intangible assets with indefinite lives are not amortized but are tested for impairment on an annual basis, as of October 1 of each year, or whenever events or changes in circumstances indicate that the carrying amount of these assets may not be recoverable. Purchased intangible assets with finite useful lives are amortized using the straight-line method over their estimated useful lives. We analyze the reasonableness of the remaining useful life whenever events or circumstances indicate that the carrying amount may not be recoverable to determine whether the carrying value has been impaired. Fair Value Measurements Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in the principal or most advantageous market in an orderly transaction between marketplace participants. Various valuation approaches can be used to determine fair value, each requiring different valuation inputs. The following hierarchy classifies the inputs used to determine fair value into three levels: • Level 1—Quoted prices for identical instruments in active markets. • Level 2—Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which significant value drivers are observable. • Level 3—Valuations derived from valuation techniques in which significant value drivers are unobservable. The carrying values of cash and cash equivalents, accounts receivable, accounts payable and accrued and other liabilities approximate fair value because of the short-term nature of these instruments. The carrying amount of lease liabilities approximate fair value because these financial instruments bear interest at rates that approximate current market rates for similar agreements with similar maturities and credit. We consider the terms of the PNC Bank, National Association debt facility, including its floating per annum interest rate of the daily simple secured overnight financing rate ("SOFR"), plus an SOFR adjustment, plus a margin ranging from 1.75% to 2.50%, to be at market based upon similar instruments that would be available to us. The Company has certain assets and liabilities that have been recorded at fair value on a non-recurring basis following an acquisition. Refer to Note 3, Business Acquisition , for the allocation of the total consideration based upon the fair value of the assets acquired and liabilities assumed as of the acquisition date. Reportable Segments Prior to September 30, 2021, we were organized into two main reporting segments, our Lightwave segment and our Luna Labs segment. We now have one reportable segment, Lightwave, following the determination that our Luna Labs segment met held-for-sale and discontinued operations accounting criteria at the end of the third quarter of 2021. On March 8, 2022, we completed the sale of substantially all of our equity interests in Luna Labs. Prior to the sale, our Luna Labs segment performed applied research principally in the areas of sensing and instrumentation, advanced materials, optical technologies and health sciences. See Note 2, Sale of Discontinued Operations, for additional disclosure related to discontinued operations and assets held for sale. The remaining segment, Lightwave, develops, manufactures and markets distributed fiber optic sensing products and fiber optic communications test and control products. Net Income/(Loss) Per Share Basic per share data is computed by dividing our net income/(loss) by the weighted average number of shares outstanding during the period. Diluted per share data is computed by dividing net income/(loss) by the weighted average shares outstanding during the period increased to include, if dilutive, the number of additional common share equivalents that would have been outstanding if potential shares of common stock had been issued using the treasury stock method. For the three and six months ended June 30, 2022 and 2021, all potentially dilutive securities for stock options and restricted stock unites were excluded as their impact would be anti-dilutive. Foreign Currency For our non-U.S. dollar functional currency subsidiaries, assets and liabilities are translated into U.S. dollars using fiscal period end exchange rates. Sales and expenses are translated at average monthly exchange rates. Foreign currency translation gains and losses are included as a component of accumulated other comprehensive loss within equity. Gains and losses resulting from foreign currency transactions are included in earnings. Recently Issued Pronouncements, Not Yet Adopted In June 2016, the FASB issued ASU 2016-13 Financial Instruments - Credit Losses (Topic 326) - Measurement of Credit Losses on Financial Instruments, which requires companies to measure financial assets at an amortized cost basis to be presented at the net amount expected to be collected. The new accounting rules eliminate the probable initial recognition threshold and, instead, reflect an entity's current estimate of all expected credit losses. ASU 2016-13 is applicable to our trade receivables. This pronouncement was amended under ASU 2019-10 to allow an extension on the adoption date for entities that qualify as a small reporting company. We have elected this extension and the effective date for us to adopt this standard will be for fiscal years beginning after December 15, 2022. We are currently in the process of evaluating the impact of ASU 2016-13, but we do not expect the adoption to have a material impact on our consolidated financial statements. |
Sale of Discontinued Operations
Sale of Discontinued Operations | 6 Months Ended |
Jun. 30, 2022 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Sale of Discontinued Operations | Sale of Discontinued Operations On March 8, 2022, we completed the sale of substantially all of our equity interests in our Luna Labs business to certain members of Luna Labs’ senior management team and a group of outside investors for an initial purchase price of $20.4 million before working capital and escrow adjustments and transaction expenses. Total consideration included $13.0 million of cash received at closing, $2.5 million in the form of a convertible note and $1.7 million in the form of 60-day promissory notes. We can earn up to $1.0 million in future payments from Luna Labs upon the achievement by Luna Labs of certain financial goals. The 60-day promissory notes and earn out receivable are included within the prepaid expenses and other current assets line item and the convertible note is included in other non-current assets line item of the consolidated balance sheet. The gain on the transaction was $10.9 million, net of taxes of $3.1 million. We have separately reported the financial results of Luna Labs as discontinued operations in our consolidated statements of operations for the three and six months ended June 30, 2022 and 2021, respectively, and presented the related assets and liabilities as held for sale in the consolidated balance sheet as of December 31, 2021. These changes have been applied to all periods presented. The operating results of the discontinued operations only reflect revenues and expenses that are directly attributable to the Luna Labs segment that will be eliminated from continuing operations. Previously reported expenses for the Luna Labs segment have been restated to exclude certain allocated expenses that are not directly attributable to the Luna Labs segment. The key components from discontinued operations related to the Luna Labs business are as follows (in thousands) : Three Months Ended June 30, Six Months Ended June 30, 2022 2021 2022 2021 Revenues $ — $ 5,972 $ 5,108 $ 11,274 Cost of revenues — 4,603 3,692 8,747 Gross profit — 1,369 1,416 2,527 Selling, general and administrative expenses 265 337 656 709 Operating (loss)/income (265) 1,032 760 1,818 Income tax (benefit)/expense (856) 101 166 146 Net income from discontinued operations, net of tax $ 591 $ 931 $ 594 $ 1,672 Assets and liabilities of discontinued operations classified as held for sale in the consolidated balance sheet as of December 31, 2021 consist of the following (in thousands) : December 31, 2021 Accounts receivable, net $ 2,967 Inventory 282 Contract assets 4,051 Prepaid expenses and other current 132 Property and equipment, net 330 Intangible assets, net 165 Operating lease ROU asset 4,884 Other assets 141 Assets held for sale $ 12,952 Accounts payable 1,042 Accrued and other current liabilities 821 Contract liabilities 2,626 Current portion of operating lease liabilities 388 Long-term portion of operating lease liabilities 4,826 Liabilities associated with assets held for sale $ 9,703 The cash flows related to discontinued operations have not been segregated and are included in the consolidated statements of cash flows. The following table presents cash flow and non-cash information related to discontinued operations for the six months ended June 30, 2022 and 2021 (in thousands) : Six Months Ended June 30, 2022 2021 Depreciation and amortization $ 23 $ 31 Share-based compensation 177 10 Acquisition of property and equipment 34 50 |
Business Acquisitions
Business Acquisitions | 6 Months Ended |
Jun. 30, 2022 | |
Business Combination and Asset Acquisition [Abstract] | |
Business Acquisitions | Business Acquisition On March 10, 2022, we entered into and closed a Share Purchase Agreement (the “Share Purchase Agreement”) with NKT Photonics A/S ("NKT Photonics") to purchase all of the shares of NKT Photonics GmbH and LIOS Technologies Inc. (collectively "Lios") for aggregate consideration of $22.1 million (€20.0 million). Lios is a provider of distributed fiber optic monitoring solutions for power cable, pipelines, oilfield services, security, highways, railways and industrial fire detection systems. The acquisition of Lios provides us with long range, fully distributed temperature and strain sensing capabilities, intellectual property, products and expertise that are highly complementary to Luna, which we believe will accelerate our technology and overall growth roadmap. The Share Purchase Agreement contains customary representations and warranties and indemnities. The Lios acquisition has been accounted for under the acquisition method of accounting in accordance with ASC 805 - Business Combinations. Under ASC 805, the total estimated purchase consideration is allocated to the acquired tangible and intangible assets and assumed liabilities based on their estimated fair values as of the acquisition date. Any excess of the fair value of the acquisition consideration over the identifiable assets acquired and liabilities assumed is recognized as goodwill. Due to the timing of the acquisition relative to the interim balance sheet date, the purchase price allocation of Lios is based on a preliminary valuation and is subject to revision as final valuation of acquired intangible assets and evaluation of working capital values and related reserves are completed. The following table summarizes the preliminary allocation of the purchase consideration of the Lios acquisition: (in thousands) Accounts receivable $ 3,001 Inventory 5,388 Prepaid expenses and other current assets 92 Property and equipment 858 Intangible assets 5,994 Goodwill 10,533 Operating lease right-of-use asset 512 Accounts payable (1,217) Accrued and other current liabilities (1,026) Current portion of operating lease liability (322) Deferred income tax liability (1,537) Long-term portion of operating lease liability (191) Total purchase consideration $ 22,085 The identifiable intangible assets and their estimated useful lives were as follows: Estimated Useful Life (in thousands) Developed technology 6 years 1,998 Customer relationships 8 years 3,330 Trade names and trademarks 7 years 333 Backlog 1 year 333 $ 5,994 Lios's developed technology primarily consists of its distributed fiber optic monitoring solutions that provide a wide range of applications using fully distributed temperature and strain sensing. The developed technologies were valued using the "relief from royalty method" under the income approach. This method is based on the assumption that in lieu of ownership, a market participant would be willing to pay a royalty in order to exploit the related benefits of these assets. A discount rate of 14.5% was used to discount the cash flows to the present value. Trade names and trademarks are considered a type of guarantee of a certain level of recognizability, quality or performance represented by the Lios brand. Trade names and trademarks were valued using the "relief from royalty" method under the income approach. This method is based on the assumption that in lieu of ownership, a market participant would be willing to pay a royalty in order to exploit the related benefits of these assets. A discount rate of 14.5% was used to discount the cash flows to the present value. Backlog arises from unfulfilled purchase or sales order contracts. The value of Lios's backlog as of the acquisition date was calculated using the "multi-period excess earnings" method under the income approach. A discount rate of 13.5% was used to discount the cash flows attributable solely to the backlog to the present value. Customer relationships represent the fair value of either (i) the avoidance of cost associated with the creation of a new customer relationship or (ii) the projected cash flows that will be derived from the sale of products to existing customers as of the acquisition date. Lios's customer relationships were valued using the "multi-period excess earnings" method under the income approach. This method reflects the present value of the projected cash flows that are expected by the existing customers less charges representing the contribution of other assets to those cash flows. A discount rate of 15.5% was used to discount these cash flows to the present value. |
Intangible assets, net
Intangible assets, net | 6 Months Ended |
Jun. 30, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible assets, net | Intangible assets, net Intangible assets, net at June 30, 2022 and December 31, 2021 consisted of the following: Estimated Life June 30, 2022 December 31, 2021 (in thousands) Patent costs 1 - 18 years $ 8,731 $ 9,230 Developed technology 6 - 10 years 16,202 14,440 In-process research and development N/A 2,684 2,732 Customer base 5 - 8 years 3,719 700 Trade names 7 - 15 years 883 550 Backlog 1 - 3 years 333 — 32,552 27,652 Accumulated amortization (12,153) (10,475) $ 20,399 $ 17,177 Amortization expense for the three and six months ended June 30, 2022 was $0.8 million and $1.7 million, respectively. Estimated aggregate amortization, based on the net value of intangible assets at June 30, 2022, for each of the next five years and beyond is as follows (in thousands) : Year Ending December 31, 2022 (remaining 6 months) $ 2,377 2023 3,926 2024 3,248 2025 2,914 2026 2,798 2027 & beyond 5,136 Total $ 20,399 |
Goodwill
Goodwill | 6 Months Ended |
Jun. 30, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill | Goodwill The change in the carrying value of goodwill during the six months ended June 30, 2022 was as follows: (in thousands) Balance as of December 31, 2021 18,984 Acquisition of Lios 10,533 Foreign currency translation (1,076) Balance as of June 30, 2022 $ 28,441 |
Inventory
Inventory | 6 Months Ended |
Jun. 30, 2022 | |
Inventory Disclosure [Abstract] | |
Inventory | Inventory Inventory consists of finished goods, work-in-process and raw materials valued at the lower of cost (determined on the first-in, first-out basis) or net realizable value. Components of inventory were as follows: June 30, December 31, (in thousands) Finished goods $ 10,997 $ 10,087 Work-in-process 2,901 2,318 Raw materials 16,856 10,088 Total inventory 30,754 22,493 |
Accrued Liabilities
Accrued Liabilities | 6 Months Ended |
Jun. 30, 2022 | |
Payables and Accruals [Abstract] | |
Accrued Liabilities | Accrued LiabilitiesAccrued liabilities consisted of the following: June 30, 2022 December 31, 2021 (in thousands) Accrued compensation $ 7,794 $ 6,798 Contingent consideration 100 225 Accrued professional fees 1,343 503 Accrued income tax 4,071 328 Current portion of finance lease liability 49 48 Accrued liabilities - other 3,056 1,356 Total accrued and other current liabilities $ 16,413 $ 9,258 |
Debt
Debt | 6 Months Ended |
Jun. 30, 2022 | |
Debt Disclosure [Abstract] | |
Debt | Debt Long-term debt consisted of the following: (in thousands) June 30, 2022 December 31, 2021 Term Loan (net of debt issuance costs of $82 and $44, 4.05% and 2.48% at June 30, 2022 and December 31, 2021, respectively) $ 19,918 $ 8,290 Revolving Loan (4.05% and 2.43% at June 30, 2022 and December 31, 2021) 1,300 7,550 21,218 15,840 Less: Current portion of long-term debt obligations (2,000) (4,167) Long-term debt obligations $ 19,218 $ 11,673 PNC Bank Facility On June 21, 2022 (the “Effective Date”), the Company entered into a Loan Modification Agreement (the “Second Amendment”) in respect of its Loan Agreement, dated as of December 1, 2020 (the “Original Loan Agreement” and as amended by that certain First Amendment to Loan Agreement, dated as of March 10, 2022, and the Second Amendment, the “Loan Agreement”) with PNC Bank, National Association, as lender (the “Lender”) and certain of the Company’s domestic subsidiaries as guarantors, to, among other things, extend the maturity date of the Term Loan and Revolving Line (each as defined below) to June 21, 2027 and increase the total commitments to the Company. The Loan Agreement provides a $15.0 million revolving credit facility (the “Revolving Line”) and a $20 million term loan facility (the “Term Loan”). On the Effective Date, we borrowed the full amount of the Term Loan from the Lender according to a term note (the “Term Note”), a portion of the proceeds of which were used to refinance the remaining principal amount of the $12.5 million in term loans issued under the Original Loan Agreement, and the remainder of which were used to pay down approximately $13.7 million of the $15.0 million in revolving loans outstanding under the Revolving Line (the “Revolving Loan”) according to a revolving line of credit note (the “Revolving Line of Credit Note”). We may repay and reborrow advances under the Revolving Line from time to time according to the Revolving Line of Credit Note. The Term Loan matures on June 21, 2027, which was extended from December 1, 2023 as part of the loan modification. The Term Loan amortizes at a rate equal to 10% for the first year, 15% for years two and three and 20% in years four and five, in each case payable on a quarterly basis. Accrued interest is due and payable on the first day of each month and the outstanding principal balance and any accrued but unpaid interest will be due and payable on June 21, 2027. The Term Loan bears interest at a floating per annum rate equal to the sum of (a) the daily simple secured overnight finance rate ("Daily Simple SOFR"), plus (b) an SOFR adjustment of ten basis points (0.10%), plus (c) an applicable margin. The applicable margin ranges from 1.75% to 2.50% per annum, depending on our Net Leverage Ratio (as defined in the Loan Agreement). We may prepay the Term Loan without penalty or premium. The Revolving Line expires on June 21, 2027, which was extended from December 1, 2023 as part of the loan modification. Borrowings under the Revolving Line bear interest at a floating per annum rate equal to the sum of (a) the Daily Simple SOFR, plus (b) an SOFR adjustment of ten basis points (0.10%), plus (c) an applicable margin. The applicable margin ranges from 1.75% to 2.50% per annum, depending on our Net Leverage Ratio. Accrued interest is due and payable on the first day of each month and the outstanding principal balance and any accrued but unpaid interest is due and payable on June 21, 2027. The unused portion of the Revolving Line accrues a fee equal to 0.20% per annum multiplied by the quarterly average unused amount. The unused Revolving Line totaled $13.7 million at June 30, 2022. The Loan Agreement includes a number of affirmative and restrictive covenants applicable to us and our subsidiaries, including, among others, financial covenants regarding minimum net leverage and fixed charge coverage (beginning in the third quarter ended September 30, 2022), affirmative covenants regarding delivery of financial statements, payment of taxes, and maintenance of government compliance, and restrictive covenants regarding dispositions of property, acquisitions, incurrence of additional indebtedness or liens, investments and transactions with affiliates. We are also restricted from paying dividends or making other distributions or payments on our capital stock, subject to limited exceptions. For the quarter ended June 30, 2022, we were initially subject to a minimum adjusted EBITDA level which was not met as of June 30, 2022 but was subsequently waived. We expect to be in compliance with the minimum net leverage and fixed charge coverage financial covenants for the next twelve months. Upon the occurrence of certain events, including failure to satisfy our payment obligations under the Loan Agreement, failure to adhere to the financial covenants, the breach of certain of our other covenants under the Loan Agreement, cross defaults to other indebtedness or material agreements, judgment defaults and defaults related to failure to maintain governmental approvals, the Lender will have the right, among other remedies, to declare all principal and interest immediately due and payable, and to exercise secured party remedies. Maturities on debt are as follows ( in thousands) : Year Ending December 31, Amount 2022 (remaining 6 months) 992 2023 2,484 2024 2,984 2025 3,484 2026 3,984 2027 and thereafter 7,290 Total $ 21,218 |
Leases
Leases | 6 Months Ended |
Jun. 30, 2022 | |
Leases [Abstract] | |
Leases | Leases We recognize right-of-use ("ROU") assets and lease liabilities on the balance sheet for those leases classified as operating or finance leases with terms greater than twelve months. We have operating leases for our facilities, which have remaining terms ranging from 1 to 5 years. Most of our leases do not have an option to extend the lease period beyond the stated term unless the new term is agreed to by both parties. They also do not have an early termination clause included. Our operating lease agreements do not contain any material restrictive covenants. Some of our operating lease agreements contain variable payment provisions that provide for rental increases based on consumer price indices. The change in rent expense resulting from changes in these indices are included within variable rent. We also have finance leases for equipment which have remaining terms ranging from 1 to 3 years. These lease agreements are for general office equipment with a 5-year useful life. These lease agreements do not have an option to extend the lease beyond the stated terms nor do they have an early termination clause. These lease agreements do not have any variable payment provisions included. The finance lease costs consist of interest expense and amortization, and are included primarily in selling, general and administrative expense in our consolidated statement of operations. The finance lease ROU assets are included within the other non-current assets line item of the consolidated balance sheets. The current and long-term portion of the ROU lease liabilities are included within the accrued and other current liabilities and other long-term liabilities line items of the consolidated balance sheets, respectively. The discount rate for both our operating and finance leases was not readily determinable in the specific lease agreements. As a result, our incremental borrowing rate was used as the discount rate when establishing the ROU assets and corresponding lease liabilities. As of June 30, 2022, we had no operating or finance leases that have not yet commenced. Rent expense is recognized on a straight-line basis over the life of the lease. Rent expense for operating leases consists of the following: Three Months Ended June 30, Six Months Ended June 30, (in thousands) 2022 2021 2022 2021 Operating lease costs $ 788 $ 529 1,363 $ 1,058 Variable rent costs (60) (29) (110) (57) Total rent expense $ 728 $ 500 $ 1,253 $ 1,001 Future minimum lease payments under non-cancelable operating and finance leases were as follows as of June 30, 2022 (in thousands) : Operating Leases Finance Leases Year Ending December 31, 2022 (remaining 6 months) $ 1,339 $ 26 2023 2,061 53 2024 1,349 53 2025 673 48 2026 137 — 2027 and beyond — — Total future minimum lease payments 5,559 180 Less: imputed interest 343 7 Total lease liabilities $ 5,216 $ 173 Current lease liability $ 2,449 $ 49 Long-term lease liability 2,767 124 Total lease liabilities $ 5,216 $ 173 Other information related to leases is as follows: Three Months Ended June 30, Six months ended June 30, (in thousands, except weighted-average data) 2022 2021 2022 2021 Finance lease cost: Amortization of right-of-use assets $ 13 $ 13 $ 26 $ 27 Interest on lease liabilities (1) (1) (2) (3) Total finance lease cost $ 12 $ 12 $ 24 $ 24 Other information: Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 511 $ 571 $ 1,040 $ 1,109 Finance cash flows from finance leases $ 12 $ 12 $ 24 $ 24 Right-of-use assets obtained in exchange for new operating lease liabilities $ 33 $ — $ 33 $ — Other weighted average information related to leases is as follows: Six Months Ended June 30, 2022 2021 Weighted-average remaining lease term (years) - operating leases 5.8 3.7 Weighted-average remaining lease term (years) - finance leases 3.2 4.2 Weighted-average discount rate - operating leases 6 % 6 % Weighted-average discount rate - finance leases 3 % 3 % |
Leases | Leases We recognize right-of-use ("ROU") assets and lease liabilities on the balance sheet for those leases classified as operating or finance leases with terms greater than twelve months. We have operating leases for our facilities, which have remaining terms ranging from 1 to 5 years. Most of our leases do not have an option to extend the lease period beyond the stated term unless the new term is agreed to by both parties. They also do not have an early termination clause included. Our operating lease agreements do not contain any material restrictive covenants. Some of our operating lease agreements contain variable payment provisions that provide for rental increases based on consumer price indices. The change in rent expense resulting from changes in these indices are included within variable rent. We also have finance leases for equipment which have remaining terms ranging from 1 to 3 years. These lease agreements are for general office equipment with a 5-year useful life. These lease agreements do not have an option to extend the lease beyond the stated terms nor do they have an early termination clause. These lease agreements do not have any variable payment provisions included. The finance lease costs consist of interest expense and amortization, and are included primarily in selling, general and administrative expense in our consolidated statement of operations. The finance lease ROU assets are included within the other non-current assets line item of the consolidated balance sheets. The current and long-term portion of the ROU lease liabilities are included within the accrued and other current liabilities and other long-term liabilities line items of the consolidated balance sheets, respectively. The discount rate for both our operating and finance leases was not readily determinable in the specific lease agreements. As a result, our incremental borrowing rate was used as the discount rate when establishing the ROU assets and corresponding lease liabilities. As of June 30, 2022, we had no operating or finance leases that have not yet commenced. Rent expense is recognized on a straight-line basis over the life of the lease. Rent expense for operating leases consists of the following: Three Months Ended June 30, Six Months Ended June 30, (in thousands) 2022 2021 2022 2021 Operating lease costs $ 788 $ 529 1,363 $ 1,058 Variable rent costs (60) (29) (110) (57) Total rent expense $ 728 $ 500 $ 1,253 $ 1,001 Future minimum lease payments under non-cancelable operating and finance leases were as follows as of June 30, 2022 (in thousands) : Operating Leases Finance Leases Year Ending December 31, 2022 (remaining 6 months) $ 1,339 $ 26 2023 2,061 53 2024 1,349 53 2025 673 48 2026 137 — 2027 and beyond — — Total future minimum lease payments 5,559 180 Less: imputed interest 343 7 Total lease liabilities $ 5,216 $ 173 Current lease liability $ 2,449 $ 49 Long-term lease liability 2,767 124 Total lease liabilities $ 5,216 $ 173 Other information related to leases is as follows: Three Months Ended June 30, Six months ended June 30, (in thousands, except weighted-average data) 2022 2021 2022 2021 Finance lease cost: Amortization of right-of-use assets $ 13 $ 13 $ 26 $ 27 Interest on lease liabilities (1) (1) (2) (3) Total finance lease cost $ 12 $ 12 $ 24 $ 24 Other information: Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 511 $ 571 $ 1,040 $ 1,109 Finance cash flows from finance leases $ 12 $ 12 $ 24 $ 24 Right-of-use assets obtained in exchange for new operating lease liabilities $ 33 $ — $ 33 $ — Other weighted average information related to leases is as follows: Six Months Ended June 30, 2022 2021 Weighted-average remaining lease term (years) - operating leases 5.8 3.7 Weighted-average remaining lease term (years) - finance leases 3.2 4.2 Weighted-average discount rate - operating leases 6 % 6 % Weighted-average discount rate - finance leases 3 % 3 % |
Capital Stock and Share-Based C
Capital Stock and Share-Based Compensation | 6 Months Ended |
Jun. 30, 2022 | |
Equity [Abstract] | |
Capital Stock and Share-Based Compensation | Capital Stock and Share-Based Compensation Stock Options For the three and six months ended June 30, 2022, we recognized $0.2 million and $0.4 million, respectively, in share-based compensation expense related to stock options, which is included in our selling, general and administrative expense in the accompanying consolidated statement of operations. Share-based compensation expense related to stock options for the three and six months ended June 30, 2021 totaled $0.3 million and $0.5 million, respectively. We expect to recognize $0.6 million in share-based compensation expense over the weighted-average remaining service period of 1.2 years for stock options outstanding as of June 30, 2022. Restricted Stock Units During the three and six months ended June 30, 2022, we granted 376,436 and 623,842 time-based restricted stock units ("RSUs"), respectively. RSU grants for the three and six months ended June 30, 2021 totaled 55,000 and 134,250, respectively. The general terms of the RSUs are similar to awards previously granted by us. The weighted average fair value of the time-based RSUs granted during the three and six months ended June 30, 2022 was $5.48 and $6.39 per share, respectively. The fair value of each RSU was determined based on the market price of our stock on the date of grant. In addition, pursuant to our Deferred Compensation Plan, non-employee directors can elect to defer the receipt of some or all of the equity compensation that they receive for board and committee service. During the three and six months ended June 30, 2022 we granted 89,825 and 98,261 RSUs, respectively, pursuant to the Deferred Compensation Plan. RSU grants pursuant to the Deferred Compensation Plan for the three and six months ended June 30, 2021 totaled 4,259 and 8,917, respectively. The general terms of these RSUs are similar to awards previously granted by us. The weighted average fair value of these RSUs granted during the three and six months ended June 30, 2022, was $5.56 and $5.81 per share, respectively. The fair value of each RSU was determined based on the market price of our stock on the date of grant. For the three and six months ended June 30, 2022, we recognized $0.5 million and $1.2 million, respectively, in share-based compensation expense related to RSUs, which is included in our selling, general and administrative expense in the accompanying consolidated statement of operations. Share-based compensation related to RSUs for the three and six months ended June 30, 2021 totaled $0.3 million and $0.6 million, respectively. We expect to recognize $5.6 million in share-based compensation expense over the weighted-average remaining service period of 2.3 years for RSUs outstanding as of June 30, 2022. Employee Stock Purchase Plan ("ESPP") For the three and six months ended June 30, 2022, we recognized $0.1 million and $0.2 million, respectively, in share-based compensation expense related to the ESPP, which is included in our selling, general and administrative expense in the accompanying consolidated statement of operations. Share-based compensation related to the ESPP for the three and six months ended June 30, 2021 totaled $0.1 million and $0.2 million, respectively. |
Revenue Recognition
Revenue Recognition | 6 Months Ended |
Jun. 30, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Revenue Recognition | Revenue Recognition Disaggregation of Revenue We disaggregate our revenue from contracts with customers by geographic locations, customer type, contract type, timing of recognition, and major categories, as we believe it best depicts how the nature, amount, timing and uncertainty of our revenue and cash flows are affected by economic factors. We disaggregate revenue on the basis of where the physical goods are shipped. We also classify revenue by the customer type of entity for which it does business, which is an indicator of the diversity of our client base. We attribute revenues generated from being a subcontractor to a commercial company as government revenue when the ultimate client is a government agency or department. Disaggregation by contract mix provides insight in terms of the degree of performance risk that we have assumed. Fixed-price contracts are considered to provide the highest amount of performance risk as we are required to deliver a scope of work or level of effort for a negotiated fixed price. Cost-based contracts are considered to provide the lowest amount of performance risk since we are generally reimbursed for all contract costs incurred in performance of contract deliverables with only the amount of incentive or award fees (if applicable) dependent on the achievement of negotiated performance requirements. By classifying revenue by major product and service, we attribute revenue from a client to the major product or service that we believe to be the client's primary market. The details are listed in the table below for the three and six months ended June 30, 2022 and 2021: Three Months Ended June 30, Six Months Ended June 30, (in thousands) 2022 2021 2022 2021 (unaudited) (unaudited) Total Revenue by Geographic Location United States $ 10,249 $ 11,536 20,764 $ 22,115 Asia 4,187 3,596 9,017 7,268 Europe 7,558 4,509 12,465 8,486 Canada, Central and South America 3,957 2,324 6,185 5,093 All Others 211 — 211 — Total $ 26,162 $ 21,965 $ 48,642 $ 42,962 Total Revenue by Major Customer Type Sales to the U.S. government $ 2,156 $ 2,502 $ 3,791 $ 4,916 U.S. direct commercial sales and other 8,093 9,033 16,974 17,199 Foreign commercial sales & other 15,913 10,430 27,877 20,847 Total $ 26,162 $ 21,965 $ 48,642 $ 42,962 Total Revenue by Contract Type Fixed-price contracts $ 25,501 $ 20,732 $ 47,354 $ 41,778 Cost-type contracts 661 1,233 1,289 1,184 Total $ 26,162 $ 21,965 $ 48,642 $ 42,962 Total Revenue by Timing of Recognition Goods transferred at a point in time $ 22,885 $ 18,099 41,494 $ 34,939 Goods/services transferred over time 3,277 3,866 7,149 8,023 Total $ 26,162 $ 21,965 $ 48,642 $ 42,962 Total Revenue by Major Products/Services Technology development $ 1,539 $ 2,027 3,136 $ 4,167 Test, measurement and sensing systems 24,022 19,485 44,117 38,003 Other 601 — 1,389 — Total $ 26,162 $ 21,965 $ 48,642 $ 42,962 Contract Balances Our contract assets consist of unbilled amounts for research contracts as well as custom product contracts. Contract liabilities include excess billings, subcontractor accruals, warranty expense, extended warranty revenue, and customer deposits. During the three and six months ended June 30, 2022, we recognized $1.4 million and $2.9 million, respectively, of revenue that was included in contract liabilities as of December 31, 2021. The following table shows the components of our contract balances as of June 30, 2022 and December 31, 2021: (in thousands) June 30, 2022 December 31, 2021 Contract assets $ 3,369 $ 5,166 Contract liabilities 4,816 4,649 Net contract (liabilities) assets $ (1,447) $ 517 Performance Obligations Unfulfilled performance obligations represent amounts expected to be earned on executed contracts. Indefinite delivery and quantity contracts and unexercised options are not reported in total unfulfilled performance obligations. Unfulfilled performance obligations include funded obligations, which is the amount for which money has been directly authorized by the U.S. government and for which a purchase order has been received by a commercial customer, and unfunded obligations represent firm orders for which funding has not yet been appropriated. The approximate value of our unfulfilled performance obligations was $47.6 million at June 30, 2022. We expect to satisfy $36.4 million of the performance obligations in 2022, $8.3 million in 2023 and the remainder by 2026. |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2022 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes Our provision for income taxes is based upon the estimated annual effective tax rate for the year applied to the current period income plus the tax effect of any significant or unusual items, discrete events or changes in tax law. Fluctuations in the distribution of pre-tax income among our operating subsidiaries can lead to fluctuations of the effective tax rate in the consolidated financial statements. We and our subsidiaries file U.S. federal income tax returns and income tax returns in various state, local, and foreign jurisdictions. For the six months ended June 30, 2022, our effective income tax rate was 13.9% compared to 42.8% for the six months ended June 30, 2021. The effective tax rate for 2022 differed from the federal statutory rate of 21%, primarily as a result of unfavorable impact from the net Global Intangible Low Taxed Inclusion ("GILTI") and losses for which no benefit can be recorded partially offset by Research & Development ("R&D") tax credits. The effective tax rate for 2021 differed from the federal statutory rate of 21% primarily as a result of the excess tax benefit on stock compensation vesting and exercises. |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and ContingenciesWe are from time to time involved in certain legal proceedings in the ordinary course of conducting our business. While the ultimate liability pursuant to these actions cannot currently be determined, we believe it is not reasonably possible that these legal proceedings will have a material adverse effect on our financial position or results of operations.We executed non-cancelable purchase orders totaling $4.8 million as of June 30, 2022 for multiple shipments of tunable lasers to be delivered over a 9-15 month period. At June 30, 2022, approximately $4.4 million of these commitments remained and are expected to be delivered by August 22, 2023. |
Basis of Presentation and Sig_2
Basis of Presentation and Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2022 | |
Accounting Policies [Abstract] | |
Nature of Operations | Nature of Operations Luna Innovations Incorporated (“we,” “Luna Innovations” or the “Company”), headquartered in Roanoke, Virginia, was incorporated in the Commonwealth of Virginia in 1990 and reincorporated in the State of Delaware in April 2003. |
Unaudited Interim Financial Information | Unaudited Interim Financial Information The accompanying unaudited consolidated interim financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial statements and Article 10 of Regulation S-X of the Securities Exchange Act of 1934, as amended. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for annual financial statements. The unaudited consolidated interim financial statements have been prepared on the same basis as the annual financial statements and in the opinion of management reflect all adjustments, consisting of only normal recurring adjustments considered necessary to present fairly our financial position at June 30, 2022, results of operations, comprehensive income/(loss) and changes in stockholders' equity for the three and six months ended June 30, 2022 and 2021, and cash flows for the six months ended June 30, 2022 and 2021. The results of operations for the three and six months ended June 30, 2022 are not necessarily indicative of the results that may be expected for the year ending December 31, 2022. The consolidated balance sheet as of December 31, 2021 was derived from our audited consolidated financial statements. The consolidated interim financial statements, including our significant accounting policies, should be read in conjunction with the audited consolidated financial statements and the notes thereto for the year ended December 31, 2021, included in our Annual Report on Form 10-K as filed with the Securities and Exchange Commission (“SEC”) on March 14, 2022. |
Goodwill and Intangible Assets | Goodwill and Intangible AssetsGoodwill and intangible assets with indefinite lives are not amortized but are tested for impairment on an annual basis, as of October 1 of each year, or whenever events or changes in circumstances indicate that the carrying amount of these assets may not be recoverable. Purchased intangible assets with finite useful lives are amortized using the straight-line method over their estimated useful lives. We analyze the reasonableness of the remaining useful life whenever events or circumstances indicate that the carrying amount may not be recoverable to determine whether the carrying value has been impaired. |
Fair Value Measurements | Fair Value Measurements Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in the principal or most advantageous market in an orderly transaction between marketplace participants. Various valuation approaches can be used to determine fair value, each requiring different valuation inputs. The following hierarchy classifies the inputs used to determine fair value into three levels: • Level 1—Quoted prices for identical instruments in active markets. • Level 2—Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which significant value drivers are observable. • Level 3—Valuations derived from valuation techniques in which significant value drivers are unobservable. The carrying values of cash and cash equivalents, accounts receivable, accounts payable and accrued and other liabilities approximate fair value because of the short-term nature of these instruments. The carrying amount of lease liabilities approximate fair value because these financial instruments bear interest at rates that approximate current market rates for similar agreements with similar maturities and credit. We consider the terms of the PNC Bank, National Association debt facility, including its floating per annum interest rate of the daily simple secured overnight financing rate ("SOFR"), plus an SOFR adjustment, plus a margin ranging from 1.75% to 2.50%, to be at market based upon similar instruments that would be available to us. The Company has certain assets and liabilities that have been recorded at fair value on a non-recurring basis following an acquisition. Refer to Note 3, Business Acquisition |
Reportable Segments | Reportable Segments Prior to September 30, 2021, we were organized into two main reporting segments, our Lightwave segment and our Luna Labs segment. We now have one reportable segment, Lightwave, following the determination that our Luna Labs segment met held-for-sale and discontinued operations accounting criteria at the end of the third quarter of 2021. On March 8, 2022, we completed the sale of substantially all of our equity interests in Luna Labs. Prior to the sale, our Luna Labs segment performed applied research principally in the areas of sensing and instrumentation, advanced materials, optical technologies and health sciences. See Note 2, Sale of Discontinued Operations, for additional disclosure related to discontinued operations and assets held for sale. The remaining segment, Lightwave, develops, manufactures and markets distributed fiber optic sensing products and fiber optic communications test and control products. |
Net Income/(Loss) Per Share | Net Income/(Loss) Per Share Basic per share data is computed by dividing our net income/(loss) by the weighted average number of shares outstanding during the period. Diluted per share data is computed by dividing net income/(loss) by the weighted average shares outstanding during the period increased to include, if dilutive, the number of additional common share equivalents that would have been outstanding if potential shares of common stock had been issued using the treasury stock method. For the three and six months ended June 30, 2022 and 2021, all potentially dilutive securities for stock options and restricted stock unites were excluded as their impact would be anti-dilutive. |
Foreign Currency | Foreign CurrencyFor our non-U.S. dollar functional currency subsidiaries, assets and liabilities are translated into U.S. dollars using fiscal period end exchange rates. Sales and expenses are translated at average monthly exchange rates. Foreign currency translation gains and losses are included as a component of accumulated other comprehensive loss within equity. Gains and losses resulting from foreign currency transactions are included in earnings. |
Recently Issued Pronouncements, Not Yet Adopted | Recently Issued Pronouncements, Not Yet Adopted In June 2016, the FASB issued ASU 2016-13 Financial Instruments - Credit Losses (Topic 326) - Measurement of Credit Losses on Financial Instruments, which requires companies to measure financial assets at an amortized cost basis to be presented at the net amount expected to be collected. The new accounting rules eliminate the probable initial recognition threshold and, instead, reflect an entity's current estimate of all expected credit losses. ASU 2016-13 is applicable to our trade receivables. This pronouncement was amended under ASU 2019-10 to allow an extension on the adoption date for entities that qualify as a small reporting company. We have elected this extension and the effective date for us to adopt this standard will be for fiscal years beginning after December 15, 2022. We are currently in the process of evaluating the impact of ASU 2016-13, but we do not expect the adoption to have a material impact on our consolidated financial statements. |
Sale of Discontinued Operatio_2
Sale of Discontinued Operations (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Schedule of Discontinued Operations | The key components from discontinued operations related to the Luna Labs business are as follows (in thousands) : Three Months Ended June 30, Six Months Ended June 30, 2022 2021 2022 2021 Revenues $ — $ 5,972 $ 5,108 $ 11,274 Cost of revenues — 4,603 3,692 8,747 Gross profit — 1,369 1,416 2,527 Selling, general and administrative expenses 265 337 656 709 Operating (loss)/income (265) 1,032 760 1,818 Income tax (benefit)/expense (856) 101 166 146 Net income from discontinued operations, net of tax $ 591 $ 931 $ 594 $ 1,672 Assets and liabilities of discontinued operations classified as held for sale in the consolidated balance sheet as of December 31, 2021 consist of the following (in thousands) : December 31, 2021 Accounts receivable, net $ 2,967 Inventory 282 Contract assets 4,051 Prepaid expenses and other current 132 Property and equipment, net 330 Intangible assets, net 165 Operating lease ROU asset 4,884 Other assets 141 Assets held for sale $ 12,952 Accounts payable 1,042 Accrued and other current liabilities 821 Contract liabilities 2,626 Current portion of operating lease liabilities 388 Long-term portion of operating lease liabilities 4,826 Liabilities associated with assets held for sale $ 9,703 (in thousands) : Six Months Ended June 30, 2022 2021 Depreciation and amortization $ 23 $ 31 Share-based compensation 177 10 Acquisition of property and equipment 34 50 |
Business Acquisitions (Tables)
Business Acquisitions (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Business Combination and Asset Acquisition [Abstract] | |
Schedule of Allocation of Purchase Consideration | The following table summarizes the preliminary allocation of the purchase consideration of the Lios acquisition: (in thousands) Accounts receivable $ 3,001 Inventory 5,388 Prepaid expenses and other current assets 92 Property and equipment 858 Intangible assets 5,994 Goodwill 10,533 Operating lease right-of-use asset 512 Accounts payable (1,217) Accrued and other current liabilities (1,026) Current portion of operating lease liability (322) Deferred income tax liability (1,537) Long-term portion of operating lease liability (191) Total purchase consideration $ 22,085 |
Schedule of Preliminary Identifiable Intangible Assets Acquired and their Estimated Lives | The identifiable intangible assets and their estimated useful lives were as follows: Estimated Useful Life (in thousands) Developed technology 6 years 1,998 Customer relationships 8 years 3,330 Trade names and trademarks 7 years 333 Backlog 1 year 333 $ 5,994 |
Intangible assets, net (Tables)
Intangible assets, net (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Intangible Assets | Intangible assets, net at June 30, 2022 and December 31, 2021 consisted of the following: Estimated Life June 30, 2022 December 31, 2021 (in thousands) Patent costs 1 - 18 years $ 8,731 $ 9,230 Developed technology 6 - 10 years 16,202 14,440 In-process research and development N/A 2,684 2,732 Customer base 5 - 8 years 3,719 700 Trade names 7 - 15 years 883 550 Backlog 1 - 3 years 333 — 32,552 27,652 Accumulated amortization (12,153) (10,475) $ 20,399 $ 17,177 |
Schedule of Estimated Aggregate Amortization Based on Net Value of Intangible Assets | Estimated aggregate amortization, based on the net value of intangible assets at June 30, 2022, for each of the next five years and beyond is as follows (in thousands) : Year Ending December 31, 2022 (remaining 6 months) $ 2,377 2023 3,926 2024 3,248 2025 2,914 2026 2,798 2027 & beyond 5,136 Total $ 20,399 |
Goodwill (Tables)
Goodwill (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill | The change in the carrying value of goodwill during the six months ended June 30, 2022 was as follows: (in thousands) Balance as of December 31, 2021 18,984 Acquisition of Lios 10,533 Foreign currency translation (1,076) Balance as of June 30, 2022 $ 28,441 |
Inventory (Tables)
Inventory (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventory | Components of inventory were as follows: June 30, December 31, (in thousands) Finished goods $ 10,997 $ 10,087 Work-in-process 2,901 2,318 Raw materials 16,856 10,088 Total inventory 30,754 22,493 |
Accrued Liabilities (Tables)
Accrued Liabilities (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Payables and Accruals [Abstract] | |
Schedule of Accrued Liabilities | Accrued liabilities consisted of the following: June 30, 2022 December 31, 2021 (in thousands) Accrued compensation $ 7,794 $ 6,798 Contingent consideration 100 225 Accrued professional fees 1,343 503 Accrued income tax 4,071 328 Current portion of finance lease liability 49 48 Accrued liabilities - other 3,056 1,356 Total accrued and other current liabilities $ 16,413 $ 9,258 |
Debt (Tables)
Debt (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Debt Disclosure [Abstract] | |
Schedule of Long-term Debt Instruments | Long-term debt consisted of the following: (in thousands) June 30, 2022 December 31, 2021 Term Loan (net of debt issuance costs of $82 and $44, 4.05% and 2.48% at June 30, 2022 and December 31, 2021, respectively) $ 19,918 $ 8,290 Revolving Loan (4.05% and 2.43% at June 30, 2022 and December 31, 2021) 1,300 7,550 21,218 15,840 Less: Current portion of long-term debt obligations (2,000) (4,167) Long-term debt obligations $ 19,218 $ 11,673 |
Schedule of Maturities of Long-term Debt | Maturities on debt are as follows ( in thousands) : Year Ending December 31, Amount 2022 (remaining 6 months) 992 2023 2,484 2024 2,984 2025 3,484 2026 3,984 2027 and thereafter 7,290 Total $ 21,218 |
Leases (Tables)
Leases (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Leases [Abstract] | |
Schedule of other information related to leases | Rent expense is recognized on a straight-line basis over the life of the lease. Rent expense for operating leases consists of the following: Three Months Ended June 30, Six Months Ended June 30, (in thousands) 2022 2021 2022 2021 Operating lease costs $ 788 $ 529 1,363 $ 1,058 Variable rent costs (60) (29) (110) (57) Total rent expense $ 728 $ 500 $ 1,253 $ 1,001 Other information related to leases is as follows: Three Months Ended June 30, Six months ended June 30, (in thousands, except weighted-average data) 2022 2021 2022 2021 Finance lease cost: Amortization of right-of-use assets $ 13 $ 13 $ 26 $ 27 Interest on lease liabilities (1) (1) (2) (3) Total finance lease cost $ 12 $ 12 $ 24 $ 24 Other information: Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 511 $ 571 $ 1,040 $ 1,109 Finance cash flows from finance leases $ 12 $ 12 $ 24 $ 24 Right-of-use assets obtained in exchange for new operating lease liabilities $ 33 $ — $ 33 $ — Other weighted average information related to leases is as follows: Six Months Ended June 30, 2022 2021 Weighted-average remaining lease term (years) - operating leases 5.8 3.7 Weighted-average remaining lease term (years) - finance leases 3.2 4.2 Weighted-average discount rate - operating leases 6 % 6 % Weighted-average discount rate - finance leases 3 % 3 % |
Schedule of future operating lease payments | Future minimum lease payments under non-cancelable operating and finance leases were as follows as of June 30, 2022 (in thousands) : Operating Leases Finance Leases Year Ending December 31, 2022 (remaining 6 months) $ 1,339 $ 26 2023 2,061 53 2024 1,349 53 2025 673 48 2026 137 — 2027 and beyond — — Total future minimum lease payments 5,559 180 Less: imputed interest 343 7 Total lease liabilities $ 5,216 $ 173 Current lease liability $ 2,449 $ 49 Long-term lease liability 2,767 124 Total lease liabilities $ 5,216 $ 173 |
Schedule of future finance lease payments | Future minimum lease payments under non-cancelable operating and finance leases were as follows as of June 30, 2022 (in thousands) : Operating Leases Finance Leases Year Ending December 31, 2022 (remaining 6 months) $ 1,339 $ 26 2023 2,061 53 2024 1,349 53 2025 673 48 2026 137 — 2027 and beyond — — Total future minimum lease payments 5,559 180 Less: imputed interest 343 7 Total lease liabilities $ 5,216 $ 173 Current lease liability $ 2,449 $ 49 Long-term lease liability 2,767 124 Total lease liabilities $ 5,216 $ 173 |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Disaggregation of Revenue | The details are listed in the table below for the three and six months ended June 30, 2022 and 2021: Three Months Ended June 30, Six Months Ended June 30, (in thousands) 2022 2021 2022 2021 (unaudited) (unaudited) Total Revenue by Geographic Location United States $ 10,249 $ 11,536 20,764 $ 22,115 Asia 4,187 3,596 9,017 7,268 Europe 7,558 4,509 12,465 8,486 Canada, Central and South America 3,957 2,324 6,185 5,093 All Others 211 — 211 — Total $ 26,162 $ 21,965 $ 48,642 $ 42,962 Total Revenue by Major Customer Type Sales to the U.S. government $ 2,156 $ 2,502 $ 3,791 $ 4,916 U.S. direct commercial sales and other 8,093 9,033 16,974 17,199 Foreign commercial sales & other 15,913 10,430 27,877 20,847 Total $ 26,162 $ 21,965 $ 48,642 $ 42,962 Total Revenue by Contract Type Fixed-price contracts $ 25,501 $ 20,732 $ 47,354 $ 41,778 Cost-type contracts 661 1,233 1,289 1,184 Total $ 26,162 $ 21,965 $ 48,642 $ 42,962 Total Revenue by Timing of Recognition Goods transferred at a point in time $ 22,885 $ 18,099 41,494 $ 34,939 Goods/services transferred over time 3,277 3,866 7,149 8,023 Total $ 26,162 $ 21,965 $ 48,642 $ 42,962 Total Revenue by Major Products/Services Technology development $ 1,539 $ 2,027 3,136 $ 4,167 Test, measurement and sensing systems 24,022 19,485 44,117 38,003 Other 601 — 1,389 — Total $ 26,162 $ 21,965 $ 48,642 $ 42,962 |
Schedule of components of contract balances | The following table shows the components of our contract balances as of June 30, 2022 and December 31, 2021: (in thousands) June 30, 2022 December 31, 2021 Contract assets $ 3,369 $ 5,166 Contract liabilities 4,816 4,649 Net contract (liabilities) assets $ (1,447) $ 517 |
Basis of Presentation and Sig_3
Basis of Presentation and Significant Accounting Policies (Details) - segment | 6 Months Ended | 9 Months Ended |
Jun. 30, 2022 | Sep. 30, 2021 | |
Debt Instrument [Line Items] | ||
Number of operating segments | 2 | |
Number of reportable segments | 1 | |
SOFR | PNC Bank Facility | Minimum | Term Loan | ||
Debt Instrument [Line Items] | ||
Debt instrument, basis spread on variable rate | 1.75% | |
SOFR | PNC Bank Facility | Maximum | Term Loan | ||
Debt Instrument [Line Items] | ||
Debt instrument, basis spread on variable rate | 2.50% |
Sale of Discontinued Operatio_3
Sale of Discontinued Operations - Additional Information (Details) - USD ($) $ in Thousands | 6 Months Ended | ||
Mar. 08, 2022 | Jun. 30, 2022 | Jun. 30, 2021 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Proceeds from sale of discontinued operations | $ 12,973 | $ 0 | |
Tax effect of gain from discontinued operation | $ 3,117 | ||
Discontinued Operations, Held-for-sale or Disposed of by Sale | Luna Labs | |||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Purchase price | $ 20,400 | ||
Proceeds from sale of discontinued operations | 13,000 | ||
Contingent consideration | 1,000 | ||
Gain on the transaction | 10,900 | ||
Tax effect of gain from discontinued operation | 3,100 | ||
Discontinued Operations, Held-for-sale or Disposed of by Sale | Luna Labs | Notes Receivable | |||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Convertible note | 2,500 | ||
Discontinued Operations, Held-for-sale or Disposed of by Sale | Luna Labs | Note Receivable 2 | |||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Convertible note | $ 1,700 |
Sale of Discontinued Operatio_4
Sale of Discontinued Operations - Discontinued Operations Related To Luna Lab Segment (Details) - Held-for-sale - Luna Labs - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Revenues | $ 0 | $ 5,972 | $ 5,108 | $ 11,274 |
Cost of revenues | 0 | 4,603 | 3,692 | 8,747 |
Gross profit | 0 | 1,369 | 1,416 | 2,527 |
Selling, general and administrative expenses | 265 | 337 | 656 | 709 |
Operating (loss)/income | (265) | 1,032 | 760 | 1,818 |
Income tax (benefit)/expense | (856) | 101 | 166 | 146 |
Net income from discontinued operations, net of tax | $ 591 | $ 931 | $ 594 | $ 1,672 |
Sale of Discontinued Operatio_5
Sale of Discontinued Operations - Assets and Liabilities Held For Sale (Details) - USD ($) $ in Thousands | Jun. 30, 2022 | Dec. 31, 2021 |
Disposal Group, Including Discontinued Operation, Assets, Current [Abstract] | ||
Assets held for sale | $ 0 | $ 12,952 |
Disposal Group, Including Discontinued Operation, Liabilities, Current [Abstract] | ||
Liabilities associated with assets held for sale | $ 0 | 9,703 |
Luna Labs | Held-for-sale | ||
Disposal Group, Including Discontinued Operation, Assets, Current [Abstract] | ||
Accounts receivable, net | 2,967 | |
Inventory | 282 | |
Contract assets | 4,051 | |
Prepaid expenses and other current | 132 | |
Property and equipment, net | 330 | |
Intangible assets, net | 165 | |
Operating lease ROU asset | 4,884 | |
Other assets | 141 | |
Assets held for sale | 12,952 | |
Disposal Group, Including Discontinued Operation, Liabilities, Current [Abstract] | ||
Accounts payable | 1,042 | |
Accrued and other current liabilities | 821 | |
Contract liabilities | 2,626 | |
Current portion of operating lease liabilities | 388 | |
Long-term portion of operating lease liabilities | 4,826 | |
Liabilities associated with assets held for sale | $ 9,703 |
Sale of Discontinued Operatio_6
Sale of Discontinued Operations - Cash Flow And Non-Cash Information (Details) - Luna Labs - Held-for-sale - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2021 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Depreciation and amortization | $ 23 | $ 31 |
Share-based compensation | 177 | 10 |
Acquisition of property and equipment | $ 34 | $ 50 |
Business Acquisitions - Additio
Business Acquisitions - Additional Information (Details) - LIOS Acquisition € in Millions, $ in Millions | Mar. 10, 2022 USD ($) | Mar. 10, 2022 EUR (€) |
Business Acquisition [Line Items] | ||
Aggregate consideration | $ 22.1 | € 20 |
Developed technology | ||
Business Acquisition [Line Items] | ||
Discount rate used to estimate fair value of acquired finite-lived intangible assets | 14.50% | 14.50% |
Trade names and trademarks | ||
Business Acquisition [Line Items] | ||
Discount rate used to estimate fair value of acquired finite-lived intangible assets | 14.50% | 14.50% |
Backlog | ||
Business Acquisition [Line Items] | ||
Discount rate used to estimate fair value of acquired finite-lived intangible assets | 13.50% | 13.50% |
Customer relationships | ||
Business Acquisition [Line Items] | ||
Discount rate used to estimate fair value of acquired finite-lived intangible assets | 15.50% | 15.50% |
Business Acquisitions - Allocat
Business Acquisitions - Allocation of Purchase Consideration (Details) - USD ($) $ in Thousands | Jun. 30, 2022 | Mar. 10, 2022 | Dec. 31, 2021 |
Business Acquisition [Line Items] | |||
Goodwill | $ 28,441 | $ 18,984 | |
LIOS Acquisition | |||
Business Acquisition [Line Items] | |||
Accounts receivable | $ 3,001 | ||
Inventory | 5,388 | ||
Prepaid expenses and other current assets | 92 | ||
Property and equipment | 858 | ||
Intangible assets | 5,994 | ||
Goodwill | 10,533 | ||
Operating lease right-of-use asset | 512 | ||
Accounts payable | (1,217) | ||
Accrued and other current liabilities | (1,026) | ||
Current portion of operating lease liability | (322) | ||
Deferred income tax liability | (1,537) | ||
Long-term portion of operating lease liability | (191) | ||
Total purchase consideration | $ 22,085 |
Business Acquisitions - Schedul
Business Acquisitions - Schedule of Preliminary Identifiable Intangible Assets Acquired (Details) - LIOS Acquisition $ in Thousands | Mar. 10, 2022 USD ($) |
Business Acquisition [Line Items] | |
Intangible assets | $ 5,994 |
Developed technology | |
Business Acquisition [Line Items] | |
Acquired assets expected useful lives | 6 years |
Intangible assets | $ 1,998 |
Customer relationships | |
Business Acquisition [Line Items] | |
Acquired assets expected useful lives | 8 years |
Intangible assets | $ 3,330 |
Trade names and trademarks | |
Business Acquisition [Line Items] | |
Acquired assets expected useful lives | 7 years |
Intangible assets | $ 333 |
Backlog | |
Business Acquisition [Line Items] | |
Acquired assets expected useful lives | 1 year |
Intangible assets | $ 333 |
Intangible assets, net - Summar
Intangible assets, net - Summary of Intangible Assets (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2022 | Dec. 31, 2021 | |
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets, gross | $ 32,552 | $ 27,652 |
Accumulated amortization | (12,153) | (10,475) |
Total | 20,399 | 17,177 |
Patent costs | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets, gross | $ 8,731 | 9,230 |
Patent costs | Minimum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Estimated Life | 1 year | |
Patent costs | Maximum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Estimated Life | 18 years | |
Developed technology | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets, gross | $ 16,202 | 14,440 |
Developed technology | Minimum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Estimated Life | 6 years | |
Developed technology | Maximum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Estimated Life | 10 years | |
In-process research and development | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets, gross | $ 2,684 | 2,732 |
Customer base | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets, gross | $ 3,719 | 700 |
Customer base | Minimum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Estimated Life | 5 years | |
Customer base | Maximum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Estimated Life | 8 years | |
Trade names | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets, gross | $ 883 | 550 |
Trade names | Minimum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Estimated Life | 7 years | |
Trade names | Maximum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Estimated Life | 15 years | |
Backlog | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets, gross | $ 333 | $ 0 |
Backlog | Minimum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Estimated Life | 1 year | |
Backlog | Maximum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Estimated Life | 3 years |
Intangible assets, net - Additi
Intangible assets, net - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended |
Jun. 30, 2022 | Jun. 30, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Amortization expense | $ 0.8 | $ 1.7 |
Intangible assets, net - Estima
Intangible assets, net - Estimated Aggregate Amortization (Details) - USD ($) $ in Thousands | Jun. 30, 2022 | Dec. 31, 2021 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
2022 (remaining 6 months) | $ 2,377 | |
2023 | 3,926 | |
2024 | 3,248 | |
2025 | 2,914 | |
2026 | 2,798 | |
2027 & beyond | 5,136 | |
Total | $ 20,399 | $ 17,177 |
Goodwill (Details)
Goodwill (Details) $ in Thousands | 6 Months Ended |
Jun. 30, 2022 USD ($) | |
Goodwill [Roll Forward] | |
Beginning balance | $ 18,984 |
Acquisition of Lios | 10,533 |
Foreign currency translation | (1,076) |
Ending balance | $ 28,441 |
Inventory (Details)
Inventory (Details) - USD ($) $ in Thousands | Jun. 30, 2022 | Dec. 31, 2021 |
Inventory Disclosure [Abstract] | ||
Finished goods | $ 10,997 | $ 10,087 |
Work-in-process | 2,901 | 2,318 |
Raw materials | 16,856 | 10,088 |
Total inventory | $ 30,754 | $ 22,493 |
Accrued Liabilities (Details)
Accrued Liabilities (Details) - USD ($) $ in Thousands | Jun. 30, 2022 | Dec. 31, 2021 |
Payables and Accruals [Abstract] | ||
Accrued compensation | $ 7,794 | $ 6,798 |
Contingent consideration | 100 | 225 |
Accrued professional fees | 1,343 | 503 |
Accrued income tax | 4,071 | 328 |
Current portion of finance lease liability | 49 | 48 |
Accrued liabilities - other | 3,056 | 1,356 |
Accrued and other current liabilities | $ 16,413 | $ 9,258 |
Finance Lease, Liability, Current, Statement of Financial Position [Extensible List] | Accrued and other current liabilities | Accrued and other current liabilities |
Debt - Long Term Debt (Details)
Debt - Long Term Debt (Details) - USD ($) $ in Thousands | Jun. 30, 2022 | Dec. 31, 2021 |
Debt Instrument [Line Items] | ||
Total | $ 21,218 | $ 15,840 |
Less: Current portion of long-term debt obligations | (2,000) | (4,167) |
Long-term debt obligations | 19,218 | 11,673 |
Term Loan | ||
Debt Instrument [Line Items] | ||
Net of debt issuance costs | $ 82 | $ 44 |
Debt instrument, stated percentage | 4.05% | 2.48% |
Total | $ 19,918 | $ 8,290 |
Revolving Loan | ||
Debt Instrument [Line Items] | ||
Debt instrument, stated percentage | 4.05% | 2.43% |
Total | $ 1,300 | $ 7,550 |
Debt - Additional Information (
Debt - Additional Information (Details) - PNC Bank Facility - USD ($) | 6 Months Ended | |
Jun. 21, 2022 | Jun. 30, 2022 | |
Revolving Loan | Loan Modification Agreement | ||
Debt Instrument [Line Items] | ||
Line of credit facility | $ 15,000,000 | |
Line of credit facility, remaining borrowing capacity | $ 13,700,000 | |
Repayments of lines of credit | $ 13,700,000 | |
Unused capacity, commitment fee percentage | 0.20% | |
Term Loan | Loan Modification Agreement | ||
Debt Instrument [Line Items] | ||
Debt, face amount | $ 20,000,000 | |
Line of credit facility, remaining borrowing capacity | $ 12,500,000 | |
Term Loan | Loan Modification Agreement | Period 1 | ||
Debt Instrument [Line Items] | ||
Debt instrument, amortization period, percentage | 10% | |
Term Loan | Loan Modification Agreement | Period 2 | ||
Debt Instrument [Line Items] | ||
Debt instrument, amortization period, percentage | 15% | |
Term Loan | Loan Modification Agreement | Period 3 | ||
Debt Instrument [Line Items] | ||
Debt instrument, amortization period, percentage | 15% | |
Term Loan | Loan Modification Agreement | Period 4 | ||
Debt Instrument [Line Items] | ||
Debt instrument, amortization period, percentage | 20% | |
Term Loan | Loan Modification Agreement | Period 5 | ||
Debt Instrument [Line Items] | ||
Debt instrument, amortization period, percentage | 20% | |
SOFR | Revolving Loan | Loan Modification Agreement | ||
Debt Instrument [Line Items] | ||
Variable basis rate | 0.10% | |
SOFR | Revolving Loan | Loan Modification Agreement | Minimum | ||
Debt Instrument [Line Items] | ||
Variable basis rate | 1.75% | |
SOFR | Revolving Loan | Loan Modification Agreement | Maximum | ||
Debt Instrument [Line Items] | ||
Variable basis rate | 2.50% | |
SOFR | Term Loan | Minimum | ||
Debt Instrument [Line Items] | ||
Variable basis rate | 1.75% | |
SOFR | Term Loan | Maximum | ||
Debt Instrument [Line Items] | ||
Variable basis rate | 2.50% | |
SOFR | Term Loan | Loan Modification Agreement | ||
Debt Instrument [Line Items] | ||
Variable basis rate | 0.10% | |
SOFR | Term Loan | Loan Modification Agreement | Minimum | ||
Debt Instrument [Line Items] | ||
Variable basis rate | 1.75% | |
SOFR | Term Loan | Loan Modification Agreement | Maximum | ||
Debt Instrument [Line Items] | ||
Variable basis rate | 2.50% |
Debt - Maturities (Details)
Debt - Maturities (Details) - USD ($) $ in Thousands | Jun. 30, 2022 | Dec. 31, 2021 |
Debt Disclosure [Abstract] | ||
2022 (remaining 6 months) | $ 992 | |
2023 | 2,484 | |
2024 | 2,984 | |
2025 | 3,484 | |
2026 | 3,984 | |
2027 and thereafter | 7,290 | |
Total | $ 21,218 | $ 15,840 |
Leases - Additional Information
Leases - Additional Information (Details) | 6 Months Ended |
Jun. 30, 2022 | |
Office equipment | |
Lessee, Lease, Description [Line Items] | |
Useful life | 5 years |
Minimum | |
Lessee, Lease, Description [Line Items] | |
Operating leases contract terms | 1 year |
Finance leases contract terms | 1 year |
Maximum | |
Lessee, Lease, Description [Line Items] | |
Operating leases contract terms | 5 years |
Finance leases contract terms | 3 years |
Leases - Rent Expense (Details)
Leases - Rent Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Leases [Abstract] | ||||
Operating lease costs | $ 788 | $ 529 | $ 1,363 | $ 1,058 |
Variable rent costs | (60) | (29) | (110) | (57) |
Total rent expense | $ 728 | $ 500 | $ 1,253 | $ 1,001 |
Leases - Future Operating and F
Leases - Future Operating and Finance Lease Payments (Details) - USD ($) $ in Thousands | Jun. 30, 2022 | Dec. 31, 2021 |
Operating Leases | ||
2022 (remaining 6 months) | $ 1,339 | |
2023 | 2,061 | |
2024 | 1,349 | |
2025 | 673 | |
2026 | 137 | |
2027 and beyond | 0 | |
Total future minimum lease payments | 5,559 | |
Less: imputed interest | 343 | |
Total lease liabilities | 5,216 | |
Current lease liability | 2,449 | $ 2,101 |
Long-term lease liability | 2,767 | 3,509 |
Total lease liabilities | 5,216 | |
Finance Leases | ||
2022 (remaining 6 months) | 26 | |
2023 | 53 | |
2024 | 53 | |
2025 | 48 | |
2026 | 0 | |
2027 and beyond | 0 | |
Total future minimum lease payments | 180 | |
Less: imputed interest | 7 | |
Total lease liabilities | 173 | |
Current portion of finance lease liability | 49 | $ 48 |
Long-term portion of finance lease liability | 124 | |
Total lease liabilities | $ 173 | |
Finance Lease, Liability, Noncurrent, Statement of Financial Position [Extensible List] | Other long-term liabilities |
Leases - Other Lease Informatio
Leases - Other Lease Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Finance lease cost: | ||||
Amortization of right-of-use assets | $ 13 | $ 13 | $ 26 | $ 27 |
Interest on lease liabilities | (1) | (1) | (2) | (3) |
Total finance lease cost | 12 | 12 | 24 | 24 |
Cash paid for amounts included in the measurement of lease liabilities: | ||||
Operating cash flows from operating leases | 511 | 571 | 1,040 | 1,109 |
Finance cash flows from finance leases | 12 | 12 | 24 | 24 |
Right-of-use assets obtained in exchange for new operating lease liabilities | $ 33 | $ 0 | $ 33 | $ 0 |
Weighted-average remaining lease term (years) - operating leases | 5 years 9 months 18 days | 3 years 8 months 12 days | 5 years 9 months 18 days | 3 years 8 months 12 days |
Weighted-average remaining lease term (years) - finance leases | 3 years 2 months 12 days | 4 years 2 months 12 days | 3 years 2 months 12 days | 4 years 2 months 12 days |
Weighted-average discount rate - operating leases | 6% | 6% | 6% | 6% |
Weighted-average discount rate - finance leases | 3% | 3% | 3% | 3% |
Capital Stock and Share-Based_2
Capital Stock and Share-Based Compensation (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Stock Options | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based compensation expense | $ 0.2 | $ 0.3 | $ 0.4 | $ 0.5 |
Stock-based compensation expense not yet recognized | 0.6 | $ 0.6 | ||
Weighted average remaining service period | 1 year 2 months 12 days | |||
Restricted stock units (RSUs) | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based compensation expense | 0.5 | $ 0.3 | $ 1.2 | $ 0.6 |
Stock-based compensation expense not yet recognized | $ 5.6 | $ 5.6 | ||
Weighted average remaining service period | 2 years 3 months 18 days | |||
RSUs granted (in shares) | 376,436 | 55,000 | 623,842 | 134,250 |
RSUs granted (in dollars per share) | $ 5.48 | $ 6.39 | ||
Restricted stock units (RSUs) | Non-Employee Director Deferred Compensation Plan | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
RSUs granted (in shares) | 89,825 | 4,259 | 98,261 | 8,917 |
RSUs granted (in dollars per share) | $ 5.56 | $ 5.81 | ||
ESPP | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based compensation expense | $ 0.1 | $ 0.1 | $ 0.2 | $ 0.2 |
Revenue Recognition - Schedule
Revenue Recognition - Schedule of Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Disaggregation of Revenue [Line Items] | ||||
Revenue | $ 26,162 | $ 21,965 | $ 48,642 | $ 42,962 |
Technology development | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 1,539 | 2,027 | 3,136 | 4,167 |
Test, measurement and sensing systems | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 24,022 | 19,485 | 44,117 | 38,003 |
Other | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 601 | 0 | 1,389 | 0 |
Goods transferred at a point in time | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 22,885 | 18,099 | 41,494 | 34,939 |
Goods/services transferred over time | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 3,277 | 3,866 | 7,149 | 8,023 |
Fixed-price contracts | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 25,501 | 20,732 | 47,354 | 41,778 |
Cost-type contracts | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 661 | 1,233 | 1,289 | 1,184 |
Sales to the U.S. government | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 2,156 | 2,502 | 3,791 | 4,916 |
U.S. direct commercial sales and other | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 8,093 | 9,033 | 16,974 | 17,199 |
Foreign commercial sales & other | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 15,913 | 10,430 | 27,877 | 20,847 |
United States | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 10,249 | 11,536 | 20,764 | 22,115 |
Asia | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 4,187 | 3,596 | 9,017 | 7,268 |
Europe | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 7,558 | 4,509 | 12,465 | 8,486 |
Canada, Central and South America | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 3,957 | 2,324 | 6,185 | 5,093 |
All Others | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | $ 211 | $ 0 | $ 211 | $ 0 |
Revenue Recognition - Contract
Revenue Recognition - Contract Balances (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2022 | Dec. 31, 2021 | |
Revenue from Contract with Customer [Abstract] | |||
Revenue recognized | $ 1,400 | $ 2,900 | |
Contract assets | 3,369 | 3,369 | $ 5,166 |
Contract liabilities | 4,816 | 4,816 | 4,649 |
Net contract (liabilities) assets | $ (1,447) | $ (1,447) | $ 517 |
Revenue Recognition - Performan
Revenue Recognition - Performance Obligation Amount (Details) $ in Millions | Jun. 30, 2022 USD ($) |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation | $ 47.6 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-07-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation | $ 36.4 |
Remaining performance obligation, period | 6 months |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation | $ 8.3 |
Remaining performance obligation, period | 1 year |
Income Taxes (Details)
Income Taxes (Details) | 6 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2021 | |
Income Tax Disclosure [Abstract] | ||
Effective income tax rate | 13.90% | 42.80% |
Commitments and Contingencies (
Commitments and Contingencies (Details) - Tunable lasers $ in Millions | 6 Months Ended |
Jun. 30, 2022 USD ($) | |
Loss Contingencies [Line Items] | |
Non-cancelable purchase order commitment | $ 4.8 |
Non-cancelable purchase order commitment remaining | $ 4.4 |
Minimum | |
Loss Contingencies [Line Items] | |
Non-cancelable purchase order delivery period | 9 months |
Maximum | |
Loss Contingencies [Line Items] | |
Non-cancelable purchase order delivery period | 15 months |