nLIGHT, Inc. (NASDAQ:LASR) Q2 2023 Earnings Call Transcript

Joe Corso: Yes great. It was limited sort of exclusively to manufacturing quarter-over-quarter, right? I mean we as we are changing our overall manufacturing processes right we still don’t have perfect either visibility or the ability to predict what things like scrap and yield are always going to be quarter-over-quarter. So that was one of the pieces. The other piece is we talked about Fabrinet there were some onetime charges that we needed to take. Again not huge but 100 basis points to 150 basis points can explain half of the sequential step-down quarter-to-quarter. At the same time if you look at what we are doing on a normalized basis and our ability to leverage our overhead and manufacturing that continues to trend in the right direction.

I know your question was relative to the prior quarter. But as we are looking at the business and we’re looking at progress on the manufacturing front if you were to kind of go back a year from — a year ago and look at what our product revenue was and that was $9 million or $10 million higher than it was in the second quarter and the gross products gross margin was about the same. So that gives us the optimism that we’re really starting to dial in the manufacturing and the expenses around it such that as revenue grows we’re going to be able to put a lot more through to the bottom line from both an adjusted EBITDA and a cash flow basis.

Danny Eggerichs: Okay. Got it. Maybe one last one on HELSI. Good to hear that started in the quarter. Can you just remind us of how we should think about the timing of that revenue ramp? Is it linear? Is it going to build throughout 2024, or how should we think about that?

Joe Corso: Yes. It’s definitely not going to be linear. I don’t think we’ve said anything nor has anything been released publicly specifically about the period of performance on that contract. But it’s a multiyear contract. I think directionally it will move up particularly as we start to allocate more resources and more material and hit milestones of that program. But hard to sort of say, we can draw a line from zero straight up with the same slope to $86 million. But it will increase over the coming periods.

Danny Eggerichs: Right. Thanks. All leave it there.

Joe Corso: Sure. Thanks you, Dan.

Operator: Seeing no further questions this concludes the question-and-answer session. I would now like to pass the call back over to Joe Corso for closing remarks.

Joe Corso: Yes. Thanks everybody for joining today and for the interest in nLIGHT. We look forward to talking to many of you during the quarter. Have a good afternoon.

Operator: The conference has now concluded. Thank you for your participation. You may now disconnect.