Luminex Corporation Reports 3rd Quarter 2015 Results

Nov 02, 2015, 16:05 ET from Luminex Corporation

AUSTIN, Texas, Nov. 2, 2015 /PRNewswire/ -- Luminex Corporation (NASDAQ: LMNX) today announced financial results for the third quarter ended September 30, 2015.  Financial and operating highlights for the quarter include the following:

  • Increased third quarter 2015 revenue by 7 percent to $60.6 million, over the third quarter of 2014.
  • Increased Q3 2015 system sales by 26 percent to $9.6 million over the third quarter of 2014.
  • Grew third quarter 2015 assay revenue by 12 percent to $24.6 million over results from the third quarter of 2014.
  • Decreased operating expenses as a percentage of revenue to 53 percent for the third quarter of 2015, a 7 point improvement from the third quarter of 2014. 
  • Improved operating profits for the quarter by 94% as a result of both increased revenues and significant expense control.
  • Delivered GAAP net income for the third quarter of $6.4 million, or $0.15 per diluted share. Non-GAAP net income for the third quarter was $9.3 million, or $0.22 per diluted share (see Non-GAAP reconciliation).
  • Cash and short and long-term investments at quarter's end totaled approximately $136 million, an increase of approximately $28 million compared with year-end 2014.
  • Raising 2015 revenue guidance range to between $235 million and $238 million from the prior range of between $232 million and $236 million.
  • In October, Luminex submitted a 510(k) pre-market submission to the FDA for the ARIES® Group B Streptococcus (GBS) Assay.  

"This was a record quarter for Luminex as the Company exceeded $60 million in revenue for the first time.  Our solid performance in the quarter reflects the merits of our balanced business model and the focus on appropriate resource allocation. This coupled with the hard work of our dedicated employees resulted in an operating profit of approximately $10 million, nearly double the amount reported for the same period last year," said Homi Shamir, President and Chief Executive Officer of Luminex. "We believe that the recent FDA clearance for our ARIES® system and ARIES® HSV 1 & 2 assay will prove to be an exciting milestone for the Company in the large, sample-to-answer molecular diagnostic market. We look forward to launching ARIES this week at the Association for Molecular Pathology meeting in our home town of Austin."

REVENUE SUMMARY
(in thousands, except percentages)










Three Months Ended






September 30,


Variance


2015


2014


($)


(%)


(unaudited)













System sales

$    9,622


$    7,624


$1,998


26%

Consumable sales

10,940


12,124


(1,184)


-10%

Royalty revenue

10,249


9,690


559


6%

Assay revenue

24,639


22,056


2,583


12%

All other revenue

5,151


5,190


(39)


-1%


$  60,601


$  56,684


$3,917


7%


















Nine Months Ended






September 30,


Variance


2015


2014


($)


(%)


(unaudited)













System sales

$  22,129


$  22,328


$  (199)


-1%

Consumable sales

32,714


37,521


(4,807)


-13%

Royalty revenue

32,024


29,215


2,809


10%

Assay revenue

74,323


63,602


10,721


17%

All other revenue

16,069


16,211


(142)


-1%


$177,259


$168,877


$8,382


5%

Additional Financial Highlights:

  • Infectious disease assay sales were approximately 68 percent of total assay sales for the quarter and genetic testing assays were 32 percent.
  • Royalty revenues reflect total royalty-bearing end-user sales for the quarter of $120.8 million.
  • 307 multiplexing analyzers were shipped during the quarter, which included 113 MAGPIX® systems, 164 LX systems, and 30 FLEXMAP 3D® systems.
  • Cash and investments at quarter-end totaled $135.6 million.
  • Days sales outstanding (DSO) was 40 days at quarter-end.

FINANCIAL OUTLOOK AND GUIDANCE

The Company updates its revenue guidance range for the full-year 2015 to between $235 million and $238 million.

CONFERENCE CALL

Management will host a conference call at 3:30 p.m. CST/4:30 p.m. EST, Monday, November 2, 2015 to discuss the operating highlights and financial results for the third quarter ended September 30, 2015. The conference call will be webcast live and may be accessed at Luminex Corporation's website at http://www.luminexcorp.com.  Simply log on to the web at the address above, go to the Company section and access the Investor Relations link. Please go to the website at least 15 minutes prior to the call to register, download and install any necessary audio/video software. If you are unable to participate during the live webcast, the call will be archived for six months on the website using the 'replay' link.

Luminex develops, manufactures and markets proprietary biological testing technologies with applications throughout the life sciences industry. The Company's xMAP system is an open-architecture, multi-analyte technology platform that delivers fast, accurate and cost-effective bioassay results to markets as diverse as pharmaceutical drug discovery, clinical diagnostics and biomedical research, including the genomics and proteomics research markets. The Company's xMAP technology is sold worldwide and is in use in leading research laboratories as well as major pharmaceutical, diagnostic and biotechnology companies.  Further information on Luminex or xMAP can be obtained on the Internet at http://www.luminexcorp.com.

Statements made in this release that express Luminex's or management's intentions, plans, beliefs, expectations or predictions of future events are forward-looking statements. Forward-looking statements in this release include statements regarding: the expansion of our installed base of multiplexing systems; the development progress of our pipeline products, including ARIES and NxTAG products, market acceptance of our products, including instruments, consumables and assays, regulatory clearance of our products; the ability of our investment in current initiatives and new products to drive long-term value for our shareholders; and, projected 2015 performance, including revenue guidance. The words "believe," "expect," "intend," "estimate," "anticipate," "will," "could," "should" and similar expressions are intended to further identify such forward-looking statements for purposes of the Private Securities Litigation Reform Act of 1995.  It is important to note that the Company's actual results or performance could differ materially from those anticipated or projected in such forward-looking statements.  Factors that could cause Luminex's actual results or performance to differ materially include risks and uncertainties relating to, among others, market demand and acceptance of Luminex' products and technology in development, including ARIES and NxTAG, the uncertainty relating to increased focus on direct sales to the end user, dependence on strategic partners for development, commercialization and distribution of products, concentration of Luminex' revenue in a limited number of direct customers and strategic partners, some of which may be experiencing decreased demand for their products utilizing or incorporating Luminex' technology, budget or finance constraints in the current economic environment, or periodic variability in their purchasing patterns or practices as a result of material resource planning challenges, the timing of and process for regulatory approvals, the impact of the ongoing uncertainty in global finance markets and changes in governmental funding, including its effects on the capital spending policies of Luminex' partners and end users and their ability to finance purchases of Luminex' products, fluctuations in quarterly results due to a lengthy and unpredictable sales cycle, fluctuations in bulk purchases of consumables, fluctuations in product mix, and the seasonal nature of some of Luminex' assay products, Luminex' ability to obtain and enforce intellectual property protections on Luminex' products and technologies, risks and uncertainties associated with implementing Luminex' acquisition strategy, including Luminex' ability to obtain financing, Luminex' ability to integrate acquired companies or selected assets into Luminex' consolidated business operations, and the ability to recognize the benefits of Luminex' acquisitions, reliance on third party distributors for distribution of specific Luminex-developed and manufactured assay products, Luminex' ability to scale manufacturing operations and manage operating expenses, gross margins and inventory levels, changes in principal members of Luminex' management staff, potential shortages, or increases in costs, of components or other disruptions to Luminex' manufacturing operations, competition and competitive technologies utilized by Luminex' competitors, Luminex' ability to successfully launch new products in a timely manner, Luminex' increasing dependency on information technology to enable Luminex to improve the effectiveness of Luminex' operations and to monitor financial accuracy and efficiency, the implementation, including any modification, of Luminex' strategic operating plans, the uncertainty regarding the outcome or expense of any litigation brought against or initiated by Luminex, and risks relating to Luminex' foreign operations, including fluctuations in exchange rates, tariffs, customs and other barriers to importing/exporting materials and products in a cost effective and timely manner; difficulties in accounts receivable collections; the burden of monitoring and complying with foreign and international laws and treaties; and the burden of complying with and change in international taxation policies, as well as the risks discussed under the heading "Risk Factors" in Luminex's Reports on Forms 10-K and 10-Q, as filed with the Securities and Exchange Commission.  The forward-looking statements, including the financial guidance and 2015 outlook, contained herein represent the judgment of Luminex as of the date of this press release, and Luminex expressly disclaims any intent, obligation or undertaking to release publicly any updates or revisions to any forward-looking statements to reflect any change in Luminex's expectations with regard thereto or any change in events, conditions or circumstances on which any such statements are based.

 

LUMINEX CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands)






September 30,


December 31,


2015


2014


(unaudited)



ASSETS




Current assets:




Cash and cash equivalents

$        119,553


$         91,694

Short-term investments

12,006


-

Accounts receivable, net

26,161


28,272

Inventories, net

29,315


36,616

Deferred income taxes

5,125


12,203

Prepaids and other

9,694


8,235

Total current assets

201,854


177,020

Property and equipment, net

48,037


39,945

Intangible assets, net

53,927


56,382

Deferred income taxes

15,129


15,400

Long-term investments

4,003


15,975

Goodwill

49,619


49,619

Other

3,758


3,185

Total assets

$        376,327


$       357,526

LIABILITIES AND STOCKHOLDERS' EQUITY




Current liabilities:




Accounts payable

$            9,283


$         11,841

Accrued liabilities

13,005


14,118

Deferred revenue

4,373


4,407

Total current liabilities

26,661


30,366

Deferred revenue

2,119


2,297

Other

5,041


4,869

Total liabilities

33,821


37,532

Stockholders' equity:




Common stock

42


42

Additional paid-in capital

315,803


309,424

Accumulated other comprehensive loss

(1,095)


(744)

Retained earnings

27,756


11,272

Total stockholders' equity

342,506


319,994

Total liabilities and stockholders' equity

$        376,327


$       357,526

 

LUMINEX CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share amounts)










Three Months Ended


Nine Months Ended


September 30,


September 30,


2015


2014


2015


2014


(unaudited)


(unaudited)









Revenue

$60,601


$56,684


$177,259


$168,877

Cost of revenue

18,789


17,674


51,958


51,766

Gross profit

41,812


39,010


125,301


117,111

Operating expenses:








Research and development

10,093


10,327


31,748


32,719

Selling, general and administrative

21,236


21,423


61,740


61,838

Amortization of acquired intangible assets

777


964


2,455


2,949

Restructuring costs

-


1,300


-


1,653

Total operating expenses

32,106


34,014


95,943


99,159

Income from operations

9,706


4,996


29,358


17,952

Interest expense from long-term debt

-


-


-


(6)

Other income, net

13


(15)


964


(35)

Settlement of litigation

-


-


(7,300)


-

Income before income taxes

9,719


4,981


23,022


17,911

Income tax expense

(3,317)


569


(6,538)


(1,670)

Net income

$  6,402


$  5,550


$  16,484


$  16,241

Net income per share, basic

$    0.15


$    0.13


$     0.39


$     0.39

Shares used in computing net income per share, basic

42,152


41,714


42,041


41,496

Net income per share, diluted

$    0.15


$    0.13


$     0.39


$     0.39

Shares used in computing net income per share, diluted

42,556


42,381


42,354


42,127

 

LUMINEX CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)










Three Months Ended


Nine Months Ended


September 30,


September 30,


2015


2014


2015


2014


(unaudited)


(unaudited)

Cash flows from operating activities:








Net income

$    6,402


$  5,550


$  16,484


$16,241

Adjustments to reconcile net income to net cash provided by operating activities:








Depreciation and amortization

3,411


3,400


9,733


10,935

Stock-based compensation

3,099


2,622


7,768


7,052

Deferred income tax expense

176


(3,568)


6,207


(1,048)

Excess income tax expense from employee stock-based awards

14


(1,315)


1,005


(1,315)

(Gain) loss on sale or disposal of assets

(62)


48


(743)


231

Non-cash restructuring charges

-


1,192


-


2,388

Other

(25)


(28)


(128)


(360)

Changes in operating assets and liabilities:








Accounts receivable, net

(3,985)


203


2,101


3,742

Inventories, net

3,364


(1,943)


7,414


(3,465)

Other assets

764


(829)


(1,629)


(792)

Accounts payable

1,238


1,227


(2,536)


(878)

Accrued liabilities

(3,466)


4,922


(3,078)


407

Deferred revenue

(36)


46


(212)


53

Net cash provided by operating activities

10,894


11,527


42,386


33,191

Cash flows from investing activities:








Purchases of available-for-sale securities

-


(8,000)


-


(10,996)

Sales and maturities of available-for-sale securities

-


2,996


-


7,509

Purchase of property and equipment

(2,731)


(5,540)


(15,299)


(11,795)

Proceeds from sale of assets

-


5


893


44

Acquired technology rights

(650)


-


(852)


(64)

Net cash used in investing activities

(3,381)


(10,539)


(15,258)


(15,302)

Cash flows from financing activities:








Payments on debt

-


-


-


(1,621)

Proceeds from employee stock plans and issuance of common stock

977


327


1,690


3,807

Excess income tax expense from employee stock-based awards

(14)


1,315


(1,005)


1,315

Net cash provided by financing activities

963


1,642


685


3,501

Effect of foreign currency exchange rate on cash

13


(217)


46


(191)

Change in cash and cash equivalents

8,489


2,413


27,859


21,199

Cash and cash equivalents, beginning of period

111,064


86,710


91,694


67,924

Cash and cash equivalents, end of period

$119,553


$89,123


$119,553


$89,123

 

LUMINEX CORPORATION

NON-GAAP RECONCILIATION

(in thousands, except per share amounts)










Three Months Ended


Nine Months Ended


September 30,


September 30,


2015


2014


2015


2014


(unaudited)


(unaudited)









Income from operations

$  9,706


$  4,996


$29,358


$17,952

Stock-based compensation

3,099


2,622


7,768


7,052

Amortization of acquired intangible assets

777


964


2,455


2,949

Costs associated with legal proceedings

10


1,028


630


2,628

Severance costs

90


942


284


987

Restructuring costs

-


1,332


-


2,652

Adjusted income from operations

$13,682


$11,884


$40,495


$34,220

Interest expense from long-term debt

-


-


-


(6)

Other income, net

13


(15)


964


(35)

Gain on sale of cost method equity investment

-


-


(892)


-

Income tax expense

(3,317)


569


(6,538)


(1,670)

Income tax effect of above adjusting items

(1,115)


(941)


(3,588)


(1,649)

Income tax benefit from intercompany debt cancellation

-


-


-


(994)

Adjusted net income

$  9,263


$11,497


$30,441


$29,866

Adjusted net income per share, basic

$    0.22


$    0.28


$    0.72


$    0.72

Shares used in computing adjusted net income per share, basic

42,152


41,714


42,041


41,496

Adjusted net income per share, diluted

$    0.22


$    0.27


$    0.72


$    0.71

Shares used in computing adjusted net income per share, diluted

42,556


42,381


42,354


42,127

 

The Company makes reference in this release to "non-GAAP operating income" and "non-GAAP net income" which excludes stock-based compensation expense, amortization of acquired intangible assets and the impact of costs associated with legal proceedings, which are unpredictable and can vary significantly from period to period, including costs associated with litigation against ENZO Life Sciences, Inc. and Irori Technologies, Inc. discussed in the Legal Proceedings section of our previously filed 10-K and 10-Qs and certain other recurring and non-recurring expenses. The Company believes that excluding these items and their related tax effects from its financial results reflects operating results that are more indicative of the Company's ongoing operating performance while improving comparability to prior periods, and, as such may provide investors with an enhanced understanding of the Company's past financial performance and prospects for the future. In addition, the Company's management uses such non-GAAP measures internally to evaluate and assess its core operations and to make ongoing operating decisions. This information is not intended to be considered in isolation or as a substitute for income from operations, net income, net income per share or expense information prepared in accordance with GAAP.

Contacts:

Harriss T. Currie

Matthew Scalo


Sr. Vice President, Finance and Chief Financial Officer

Sr. Director, Investor Relations


512-219-8020

512-219-8020


hcurrie@luminexcorp.com

mscalo@luminexcorp.com

Logo - http://photos.prnewswire.com/prnh/20150201/172702LOGO

 

SOURCE Luminex Corporation



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