Luminex Corporation Reports Second Quarter 2013 Results ACHIEVES MILESTONE SELLING 10,000TH MULTIPLEXING ANALYZER

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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