Tuesday, December 09, 2008

Luna Lays Off 20 Employees...

A month after reporting the company's research and development was not being adversely affected by the souring economy, Luna Innovations Inc. has laid off about 20 employees.

The Roanoke-based technology company that develops and manufactures health care, telecommunications, energy and defense market products attributed the layoffs to the national economy.

"Like many U.S. companies, Luna has been affected by the current economic environment," said Luna Chairman and CEO Kent Murphy in an statement e-mailed to The Roanoke Times. "We are taking the necessary actions to ensure our future success. These proactive steps include downsizing our workforce by approximately 20 positions spread across our various locations and business units."

In addition to Roanoke, Luna has offices in Blacksburg, Charlottesville, Hampton and Danville.

During a Nov. 5 conference call with analysts and investors, Murphy said, "At the moment we're not seeing any slowdown, any measurable slowdown, at all."

But with the recession deepening in November as U.S. companies shed jobs at the fastest rate since 1974, Luna has felt the impact.

"Arrival at this decision was difficult," Murphy's statement said. "Luna truly values its employees and those impacted by this realignment are deserving of our gratitude for the contributions they have made in our success.

"With this workforce adjustment we are further streamlining our company just as other businesses across the nation are doing. And, we will continue to provide our stakeholders with the quality of products and services we are known for."

Luna had been hiring for most of 2008, and currently has five open positions.

"These positions relate to development work under existing contracts and require very specialized skill sets that we felt could not reasonably have been filled by the individuals who were laid off," Luna spokeswoman Karin Clark said in an e-mail. "The other previously posted openings have been placed on hold."

In October Luna employed 239 people. As of Friday ,company-wide employment was 218, Clark said.

Since its initial public offering at $6 in 2006, Luna has struggled to become profitable and at times attract investors.

Luna's shares have plummeted 80 percent in a year. By Dec. 27, Luna's stock price was on the verge of breaking $10 a share, but by March it had fallen below $5 dollars a share and by October it was trading below $3 a share.

Luna shares closed down 3 cents to $2.23 Friday, but reached its 52-week low of $2 in early trading.

Carilion Clinic, which owns the development that houses Luna's corporate offices, is the second-largest shareholder, with a 20.5 percent stake, according to an April federal government filing. Carilion's Chief Executive Officer Ed Murphy votes those shares by proxy. Only Luna's CEO has a higher stake, controlling 25.3 percent of the company's shares.

At the time of the public offering, Luna was touted as the first step in what was to become Roanoke's new economy centered around biotechnology. The entire development project, which has been supported by the city, was billed as an economic springboard that would bring more high-skilled jobs and attract more health care businesses.

Since then, the development area, located at the corner of South Jefferson Street and Reserve Avenue, has morphed into a complex that will house the future Virginia Tech Carilion School of Medicine and Research Institute and physician offices for Carilion's burgeoning health care system.

Luna has managed to increase its revenues and reported $10.7 million for the third quarter that ended Sept. 30. That was the first time quarterly revenues surpassed $10 million.

In November, Luna reported a net loss of $473,985, or 4 cents a share, in the third quarter, compared with a net loss of $1.8 million, or 18 cents a share, for the same period a year earlier.

Kent Murphy has continued to say that Luna is on its way to becoming profitable.

To see more of The Roanoke Times, or to subscribe to the newspaper, go to http://www.roanoke.com/.

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