Vancouver-based nLIGHT posted $41.9 million in revenue during the first quarter this year, slightly less than the same time last year, the company announced Wednesday.
“We continued to experience solid demands in the aerospace and defense market,” CEO Scott Keeney said in a Wednesday afternoon conference call with investors and analysts, “with this strength being offset by challenging conditions in the Chinese industrial end market and a slower quarter at some of our larger microfabrication customers.”
The revenue for the quarter that ended in March represented a 1.4 percent dip from the $42.47 million reported in the first quarter of 2018, as well as a drop of 2.4 percent in the gross margin — a change which Chief Financial Officer Ran Bareket attributed in part to tariffs implemented by the United States and China.
“If you look at the decline in the margin from (quarter) one 2018 to (quarter) one 2019, more than half of it was a result of that tariff that was implemented in September 2018,” he said in response to an analyst question.
During the call, Bareket offered a more detailed breakdown of nLIGHT’s sales revenue among its three main markets and how each category fared compared to 2018.
The company reported a loss of $1.2 million in the quarter, a loss of 3 cents per share. The results met Wall Street expectations, the Associated Press reported. The average estimate of three analysts surveyed by Zacks Investment Research was also for earnings of 2 cents per share.
For the current quarter ending in July, nLIGHT said it expects revenue in the range of $46 million to $50 million. That prediction doesn’t account for the expected impact of trade tariffs, Bareket clarified on the call.
Sales to the industrial end markets were $18.1 million, down 5.3 percent year-over-year. Sales to microfabrication end markets were $14.5 million, down 7 percent year-over-year. Aerospace and defense sales were $9.2 million, a 19 percent year-over-year increase.
In response to an analyst question about the microfabrication decline, Keeney identified consumer electronics as one area where demand had shrunk, but said the decline was global. At the same time, nLIGHT saw a rising number of customers and applications in that segment, he said, leaving the company confident in future microfabrication sales growth.
nLIGHT’s two biggest geographical markets in the first quarter were North America and China, Bareket said, representing 38 percent and 33 percent of its sales. Sales in both markets declined year-over-year, he said — down 2.6 percent in North America and 10 percent in China — but sales in the rest of the world were up 12 percent compared to the first quarter of 2018.
Keeney devoted significant attention to nLIGHT’s place in the Chinese market, where he said the company faced both a regular seasonal downturn as well as aggressive competition from competitors in the lower-power laser market, although he said sales activity showed signs of improvement in China in recent months.
Keeney emphasized the company’s recent introduction of a 12-kilowatt laser, which he said would allow it to better compete in the high-power portion of China’s market. Outside of China, he said the company’s growth has been driven by its programmable Corona laser and its focus on serviceability.
“We see programmability taking on growing importance as we expand our presence outside of China,” he said.
nLIGHT’s stock, which trades on the Nasdaq as LASR, fell 6.11 percent on Wednesday to close at $24.14.
