Industrial laser manufacturer nLIGHT reported a strong fourth quarter performance Wednesday, closing out 2020 on a high note and cementing the overall year as a return to growth for the Vancouver-based company following a comparatively rockier 2019.
The company reported $66 million in revenue for the fourth quarter and $222.8 million in revenue for the full year, a record high and a 26 percent increase over 2019. The company’s previous high mark for annual revenue was $191 million in 2018, which was followed by an 8 percent decline in 2019.
In a Wednesday afternoon investor conference call, CEO Scott Keeney recalled that 2020 got off to a shaky start. After facing challenges in 2019, the company was hoping for a recovery in the global manufacturing market. Instead, nLIGHT quickly became part of the first wave of businesses hit by COVID-19 when the emerging pandemic disrupted some of its manufacturing operations in China.
The company’s first quarter revenue remained flat at $43 million, the same as it had been in the final quarter of 2019, but it improved in each subsequent quarter of 2020.
“We not only were able to operate safely, but we also ended the year with record revenue,” Keeney said on the call.
Keeney attributed much of the increase to the company’s growing presence in the aerospace and defense market. Revenue from that segment grew by 102 percent in 2020 compared with 2019, and the segment went from representing 24 percent of nLIGHT’s total revenue in 2019 to 39 percent in 2020.
nLIGHT’s other two major end markets — industrial and microfabrication — saw mixed results. Industrial segment revenue grew by 10 percent in 2020, while microfabrication fell by 10 percent, continuing a declining trend from 2019.
Keeney said the industrial growth was driven by increased demand for high-power lasers in China, as well as global demand for the company’s programmable laser products. Revenue grew 10 percent in the Chinese market and 35 percent in the rest of the world. The Chinese market accounts for about 32 percent of nLIGHT’s total revenue.
The bulk of the decline in microfabrication revenue occurred in the first quarter, Keeney said, and sales improved throughout the rest of the year – although he added that the company is still waiting on new developments such as the rollout of 5G cellphone networks to provide a bigger boost to that end market.
Keeney also highlighted the potential for electric vehicle manufacturing to drive further growth. The company currently has relatively modest exposure to the conventional automotive market through welding and cutting applications, he said, but “it’s really the EV space that has opened up more opportunities for us.”
nLIGHT is currently in the process of moving its Vancouver operations to a new facility. The company notified the federal Securities and Exchange Commission in March that it intended to purchase a 21.4 acre, two-building campus at 4637 N.W. 18th Ave. in Camas from Sharp Electronics Corporation, renovate the structure and eventually turn it into a new corporate headquarters.
Many staff have moved to the new building, and manufacturing operations have begun at the site, Keeney told The Columbian Thursday, although he said the transition is still ongoing and will continue throughout 2021.
