Luminex Corporation Reports Second Quarter 2013 Results

ACHIEVES MILESTONE SELLING 10,000TH MULTIPLEXING ANALYZER

Jul 29, 2013, 16:05 ET from Luminex Corporation

AUSTIN, Texas, July 29, 2013 /PRNewswire/ -- Luminex Corporation (NASDAQ: LMNX) today announced financial results for the second quarter ended June 30, 2013.  Financial and operating highlights include the following:

  • Consolidated second quarter revenue was $54.3 million, a 12 percent increase over the second quarter of 2012
  • Second quarter assay revenue of $21.7 million, a 24 percent increase over the second quarter of 2012
  • Cumulative life-to-date multiplexing analyzer shipments of 10,130, up 11 percent from a year ago
  • Consolidated gross margin of 70 percent for the second quarter of 2013
  • Non-GAAP net income for the second quarter was $7.2 million, or $0.17 per diluted share, which compares with $6.3 million and $0.15 per diluted share for the same quarter of the previous year. GAAP net income for the quarter was $3.7 million, or $0.09 per diluted share, which compares with $3.0 million and $0.07 per diluted share in the same quarter of 2012 (see the reconciliation of GAAP to non-GAAP net income set forth on page 8)
  • In June, Natural Molecular Testing Corporation began the commercialization of a 42-target test, called The Personalized Medicine Panel, based on Luminex's proprietary technology

(Logo: http://photos.prnewswire.com/prnh/20100104/LUMINEXLOGO)

"We generated another quarter of strong financial performance, driven by continued execution in our assay segment. Growth in assay revenue was well balanced across our genetic and infectious disease franchises and included a notable contribution from our recent US IVD cleared xTAG® gastrointestinal pathogen panel. This performance also reflects a positive impact from the Company's transition to a direct molecular diagnostic sales force which began in early 2013," said Patrick J. Balthrop, president and chief executive officer of Luminex. "In addition, we surpassed a major milestone for the Company in the second quarter, delivering our 10,000th multiplexing analyzer to date.  The entire company is proud of this achievement," added Balthrop.

"Notwithstanding our success during the second quarter, the overall molecular diagnostic market began to experience a deceleration in the utilization of certain molecular assays. This is a result of administrative issues related to the reimbursement of certain tests included in the new molecular diagnostic code system established January 1, 2013 by the Centers for Medicare and Medicaid Services. A number of our lab customers have expended significant efforts in striving for a rapid resolution, nonetheless progress has been slow. While the situation remains fluid, we believe it is prudent to adjust our expectations for the second half of 2013 to account for this headwind," Balthrop concluded. 

REVENUE SUMMARY

(in thousands, except percentages)

Three Months Ended

June 30,

Variance

2013

2012

($)

(%)

(unaudited)

System sales

$     7,647

$   8,386

$    (739)

-9%

Consumable sales

11,750

10,802

948

9%

Royalty revenue

8,578

7,715

863

11%

Assay revenue

21,699

17,510

4,189

24%

All other revenue

4,613

3,860

753

20%

$   54,287

$ 48,273

$   6,014

12%

Six Months Ended

June 30,

Variance

2013

2012

($)

(%)

(unaudited)

System sales

$   14,204

$ 15,384

$  (1,180)

-8%

Consumable sales

23,647

22,702

945

4%

Royalty revenue

18,687

15,957

2,730

17%

Assay revenue

40,023

34,807

5,216

15%

All other revenue

10,926

8,150

2,776

34%

$ 107,487

$ 97,000

$ 10,487

11%

 

"We are pleased with the overall financial performance in the second quarter of 2013, especially as we continue to invest in our strategic priorities," said Harriss T. Currie, senior vice president and chief financial officer. "The 18% increase in operating expenses for the second quarter reflects aggressive investments in our Project ARIES system and our sales and marketing footprint in support of the direct sales model for our molecular diagnostic market segment."

 

LUMINEX CORPORATION

REPORTABLE SEGMENT HIGHLIGHTS

(in thousands, except percentages)

Three Months Ended

June 30,

Variance

2013

2012

($)

(%)

(unaudited)

Revenue

Technology and strategic partnerships

$31,148

$29,565

$1,583

5%

Assays and related products

23,139

18,708

4,431

24%

     Total Revenue

54,287

48,273

6,014

12%

Operating income (loss)

Technology and strategic partnerships

6,394

7,290

(896)

-12%

Assays and related products

(1,353)

(804)

(549)

-68%

     Total Operating income (loss)

5,041

6,486

(1,445)

-22%

Six Months Ended

June 30,

Variance

2013

2012

($)

(%)

(unaudited)

Revenue

Technology and strategic partnerships

$63,017

$59,774

$3,243

5%

Assays and related products

44,470

37,226

7,244

19%

     Total Revenue

107,487

97,000

10,487

11%

Operating income (loss)

Technology and strategic partnerships

14,075

14,520

(445)

-3%

Assays and related products

(10,586)

(2,426)

(8,160)

-336%

     Total Operating income (loss)

3,489

12,094

(8,605)

-71%

 

FINANCIAL OUTLOOK AND GUIDANCE

The Company reaffirms its 2013 annual revenue guidance of between $220 and $230 million although we expect a challenging reimbursement environment near-term for select molecular diagnostic tests that could weigh on overall corporate performance, as considered in the lower end of this revenue range.

CONFERENCE CALL

Management will host a conference call to discuss the operating highlights and financial results for the second quarter ended June 30, 2013, on Monday, July 29, 2013, at 4:00 p.m. Central time/ 5:00 p.m. Eastern time.  The conference call will be webcast live and will be accompanied by a slide presentation, both of which 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 and slides 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; our efforts to sell our molecular diagnostic products directly to end users; the development progress of our pipeline products, market acceptance of our genetic and infectious disease products, including Gastrointestinal Pathogen Panel; the ability of our investment in current initiatives and new products to deliver high performance solutions, and drive long-term value for our shareholders, the impact of delays in Medicare reimbursement for customers' use of our tests and the potential impact on our business; and, projected 2013 revenue. 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's products and technology, the Company's dependence on strategic partners for development, commercialization and distribution of products, concentration of the Company's revenue in a limited number of strategic partners, fluctuations in quarterly results due to a lengthy and unpredictable sales cycle and bulk purchases of consumables, our ability to sell products directly to end users, our ability to satisfy market needs with products that we sell, Luminex's ability to scale manufacturing operations and manage operating expenses, gross margins and inventory levels, potential shortages of components, competition, the timing of regulatory approvals, the implementation, including any modification, of the Company's strategic operating plans, the uncertainty regarding the outcome or expense of any litigation brought against Luminex, risks relating to Luminex's foreign operations, risks and uncertainties associated with implementing our acquisition strategy and the ability to integrate acquired companies, or selected assets into our consolidated business operations, including the ability to recognize the benefits of our acquisitions, 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 2013 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.

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

 

LUMINEX CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands)

June 30,

December 31,

2013

2012

(unaudited)

ASSETS

Current assets:

Cash and cash equivalents

$     37,478

$         42,789

Short-term investments

5,496

13,607

Accounts receivable, net

31,564

33,273

Inventories, net

33,515

29,937

Deferred income taxes

3,574

4,783

Prepaids and other

5,193

4,388

Total current assets

116,820

128,777

Property and equipment, net

29,452

26,229

Intangible assets, net

63,049

65,218

Deferred income taxes

14,360

14,360

Long-term investments

-

3,000

Goodwill

50,829

51,128

Other

9,129

8,463

Total assets

$   283,639

$       297,175

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:

Accounts payable

$      6,899

$          9,650

Accrued liabilities

11,442

12,866

Deferred revenue

4,354

4,134

Current portion of long term debt

604

1,138

Total current liabilities

23,299

27,788

Long-term debt

1,063

1,702

Deferred revenue

2,663

2,933

Other

6,068

5,085

Total liabilities

33,093

37,508

Stockholders' equity:

Common stock

40

41

Additional paid-in capital

283,711

293,392

Accumulated other comprehensive gain

478

1,101

Accumulated deficit

(33,683)

(34,867)

Total stockholders' equity

250,546

259,667

Total liabilities and stockholders' equity

$   283,639

$       297,175

 

LUMINEX CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share amounts)

Three Months Ended

Six Months Ended

June 30,

June 30,

2013

2012

2013

2012

(unaudited)

(unaudited)

Revenue

$54,287

$48,273

$107,487

$97,000

Cost of revenue

16,230

13,861

31,473

28,828

Gross profit

38,057

34,412

76,014

68,172

Operating expenses:

Research and development

11,792

10,144

24,506

20,281

Selling, general and administrative

20,197

16,698

45,963

33,613

Amortization of acquired intangible assets

1,027

1,084

2,056

2,184

Total operating expenses

33,016

27,926

72,525

56,078

Income from operations

5,041

6,486

3,489

12,094

Interest expense from long-term debt

(23)

(63)

(51)

(122)

Other income, net

99

42

92

99

Income before income taxes

5,117

6,465

3,530

12,071

Income taxes

(1,422)

(3,513)

(2,346)

(5,592)

Net income

$ 3,695

$ 2,952

$ 1,184

$ 6,479

Net income per share, basic

$ 0.09

$ 0.07

$ 0.03

$ 0.16

Shares used in computing net income per share, basic

40,497

41,064

40,693

40,992

Net income per share, diluted

$ 0.09

$ 0.07

$ 0.03

$ 0.15

Shares used in computing net income per share, diluted

41,444

42,399

41,541

42,246

 

LUMINEX CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

Three Months Ended

Six Months Ended

June 30,

June 30,

2013

2012

2013

2012

(unaudited)

(unaudited)

Cash flows from operating activities:

Net income

$  3,695

$  2,952

$  1,184

$  6,479

Adjustments to reconcile net income to net cash (used in) provided by operating activities:

     Depreciation and amortization

3,949

3,533

7,753

7,055

     Stock-based compensation

2,412

2,571

4,844

5,214

     Deferred income tax expense

726

376

1,426

929

     Excess income tax expense (benefit) from employee stock-based awards

15

(2,476)

289

(2,773)

     Loss on disposal of assets

65

-

83

-

     Other

(1,279)

(49)

(1,081)

183

Changes in operating assets and liabilities:

     Accounts receivable, net

(6,403)

830

1,692

(3,183)

     Inventories, net

(1,279)

(1,860)

(3,683)

(1,727)

     Other assets

(747)

(1,671)

(1,643)

(1,631)

     Accounts payable

(1,202)

555

(2,933)

69

     Accrued liabilities

(3,320)

4,811

(1,543)

(1,215)

     Deferred revenue

(293)

(50)

(30)

93

Net cash (used in) provided by operating activities

(3,661)

9,522

6,358

9,493

Cash flows from investing activities:

Purchases of available-for-sale securities

(2,497)

(1,496)

(5,492)

(10,495)

Sales and maturities of available-for-sale securities

3,603

21,490

16,636

30,005

Purchase of property and equipment

(5,431)

(3,761)

(8,222)

(5,357)

Proceeds from sale of assets

-

-

31

-

Acquired technology rights

-

(291)

(930)

(291)

Net cash (used in) provided by investing activities

(4,325)

15,942

2,023

13,862

Cash flows from financing activities:

Payments on debt

(1,105)

(1,025)

(1,105)

(1,025)

Proceeds from employee stock plans and issuance of common stock

517

1,706

1,918

2,363

Payments for stock repurchases

(8,568)

(4,432)

(14,343)

(9,880)

Excess income tax (expense) benefit from employee stock-based awards

(15)

2,476

(289)

2,773

Net cash used in financing activities

(9,171)

(1,275)

(13,819)

(5,769)

Effect of foreign currency exchange rate on cash

346

(121)

127

30

Change in cash and cash equivalents

(16,811)

24,068

(5,311)

17,616

Cash and cash equivalents, beginning of period

54,289

51,830

42,789

58,282

Cash and cash equivalents, end of period

$37,478

$75,898

$37,478

$75,898

 

LUMINEX CORPORATION

NON-GAAP RECONCILIATION

(in thousands)

Three Months Ended

Six Months Ended

June 30,

June 30,

2013

2012

2013

2012

(unaudited)

(unaudited)

Net income

$3,695

$2,952

$  1,184

$  6,479

Stock-based compensation

2,412

2,571

4,844

5,214

Amortization of acquired intangible assets

1,027

1,084

2,056

2,184

Costs associated with legal proceedings

140

-

253

-

Resolution of molecular diagnostic distribution agreements

-

-

7,000

-

Acquisition and severance costs

485

453

815

524

Income tax effect of above adjusting items

(520)

(740)

(1,055)

(1,475)

Adjusted net income

$7,239

$6,320

$15,097

$12,926

Adjusted net income per share, basic

$  0.18

$  0.15

$    0.37

$    0.32

Shares used in computing adjusted net income per share, basic

40,497

41,064

40,693

40,992

Adjusted net income per share, diluted

$  0.17

$  0.15

$    0.36

$    0.31

Shares used in computing adjusted net income per share, diluted

41,444

42,399

41,541

42,246

 

The Company makes reference in this release to "non-GAAP net income" which excludes the impact of costs associated with the ENZO Life Sciences, Inc. complaint discussed in the Legal Proceedings section of our 10-Q 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. 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.

SOURCE Luminex Corporation



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http://www.luminexcorp.com