Friday, March 05, 2010
Luna reports higher revenues
Company officials say Luna is poised for a strong year as it comes out of bankruptcy.
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As Luna Innovations Inc. prepared to emerge from bankruptcy, the Roanoke-based company's revenues grew 15 percent for the fourth quarter of 2009 when compared with the same period in 2008.
Total revenues for the three months ended Dec. 31 increased to $8.5 million from nearly $7.4 million for the year-earlier period.
The positive growth capped a year that otherwise was marred with major challenges for the fiber optics company.
At one point company executives said Luna was on the brink of failure, having had to file for Chapter 11 in the midst of a $36.3 million civil lawsuit verdict against Luna.
The collapse of Luna would have dealt a significant blow to the economic development goals of the city, which partnered with Carilion Clinic to shape Roanoke's economy around biomedical sciences. Luna was the first such company to be housed in the Riverside redevelopment area at the corner of Reserve Avenue and South Jefferson Street. Carilion owns about one-fifth of the company.
The lawsuit had an obvious influence on the company's financial results for 2009, most specifically in its reported profits.
The company reported net income for the fourth quarter of $24.9 million, an amount that reflects an accounting change that was made when the lawsuit was settled.
During the first quarter of the year Luna reported a net loss of $40.9 million, because it had to set aside $26.6 million for a litigation reserve. With the lawsuit being resolved during the fourth quarter, Luna again had to adjust its books to remove the previously assumed cost of the verdict.
In the end, the litigation reserve for the year was $9.7 million and Luna reported a net loss for the year of $20.4 million, with most of that attributed to costs associated with the litigation and bankruptcy.
Excluding the losses associated with the lawsuit, Luna would have reported a net loss of $1.7 million for the fourth quarter, company officials said. That net loss would have been an improvement over the $2.2 million loss reported for the fourth quarter of 2008.
With the lawsuit and bankruptcy behind them, Luna CEO Kent Murphy told investors during a conference call Thursday, "I believe we are poised for a successful year at Luna."
Murphy noted that the economic recession had a negative effect on Luna's business, but that he has begun to see an improvement in that area as well. For the year, Luna saw revenues slip 6.3 percent to $34.6 million from $36.9 million in 2008.
Murphy said Luna began the year with "a healthy" backlog of orders and that demand from customers had increased since the company emerged from bankruptcy in January.
Luna Chief Financial Officer Dale Messick said he expects total revenue for 2010 to be close to its 2008 revenues in the range of $35.5 million to $38 million.
The company, however, still predicts it will report a net loss for 2010 between $2.8 million to $3.5 million.
Shares of Luna closed Thursday at $3.31, up 3 cents from the previous close. Luna's financial results were released after the Nasdaq stock market closed.
