Luna Innovations posts year-on-year decline in second-quarter 2009 revenues

Sep 10 2009

Luna Innovations Incorporated (NASDAQ:LUNA), a company focusing on sensing & instrumentation and pharmaceutical nanomedicines, today announced its financial results for the quarter ended June 30, 2009.

As compared to the same quarter last year, second quarter 2009 revenues decreased from $9.9 million to $8.7 million, gross profit decreased from $4.1 million to $3.3 million, and loss per share increased from $0.16 to $0.21. The increase in loss per share resulted from lower product sales in addition to higher costs associated with continuing litigation activities, partially offset by improvements in other areas of operating expenses.

Kent Murphy, Chairman and Chief Executive Officer, provided this comment related to the second quarter results and the company’s decision to file for reorganization under Chapter 11 in July: “The slowdown in product sales that began in the fourth quarter of last year with the country’s overall economic decline continued to affect our product sales in the second quarter. While the costs of our ongoing litigation with Hansen Medical also continue to adversely impact our bottom-line results, we have made significant improvements in the efficiency of our operations and continue to conduct business in the ordinary course. Our costs associated with legal matters increased approximately $1 million, to $1.6 million, in the second quarter of 2009 compared with approximately $0.8 million in the second quarter of 2008. Excluding that increase in our legal costs, our operating expenses for the most recent quarter would have decreased by approximately $1 million compared to the same period last year. When we filed for reorganization in mid-July, our objective was to protect the interests of all of our stakeholders while trying to resolve our legal matters as quickly as possible. If we are able to emerge from Chapter 11 quickly and in accordance with the plan that we have filed with the court, we will be positioned for continued success into the future.”

The company also announced today that it received notice on September 8, 2009, that the Nasdaq Listing Qualifications Panel decided to transfer its common stock from the NASDAQ Global Market to the NASDAQ Capital Market and continue listing of its common stock. The company had previously received a delisting letter on July 17, 2009, and the company had appealed the proposed delisting to the Panel. The hearing on the appeal was held on August 27, 2009. The company’s continued listing is subject to several conditions, including its emergence from Chapter 11 reorganization by December 31, 2009.

Second Quarter Financial Highlights

• Total revenues for the second quarter of 2009 decreased by $1.2 million to $8.7 million compared to $9.9 million during the second quarter of 2008.
• Product and license revenues decreased $0.7 million to approximately $2.2 million in the second quarter of 2009 compared to $2.9 million in the second quarter of 2008.
• Technology Development Division revenues decreased by $0.5 million as compared to the second quarter of 2008.
• Gross profit for the second quarter of 2009 decreased to $3.3 million from $4.1 million for the corresponding period of 2008.
• Operating expenses decreased to $5.6 million in the second quarter of 2009 from $5.8 million during the second quarter of 2008, notwithstanding an increase in legal fees of approximately $1 million.
• Net loss per share for the second quarter of 2009 was $0.21 per share, an increase from a loss per share of $0.16 for the second quarter of 2008.
• Cash and cash equivalents decreased to $12.1 million at June 30, 2009, as compared to $13.2 million at March 31, 2009 and $15.5 million at December 31, 2008.