Luminex Corporation Reports Second Quarter 2014 results

AUSTIN, Texas, July 28, 2014 /PRNewswire/ -- Luminex Corporation (NASDAQ: LMNX) today announced financial results for the second quarter ended June 30, 2014. Financial and operating highlights include the following:

  • Consolidated second quarter revenues of $55.6 million, a 2 percent increase over the second quarter of 2013.
  • Second quarter system sales of $8.3 million, a 9 percent increase over the second quarter of 2013. 
  • Second quarter shipments of 268 multiplexing analyzers, which included 148 LX systems, 96 MAGPIX systems, and 24 FLEXMAP 3D Systems.
  • Second quarter assay revenue of $19.9 million. Infectious disease assay sales comprised approximately 67 percent of total assay sales, with genetic testing assays representing 33 percent.
  • Second quarter royalty revenue of $9.5 million, a 10 percent increase over the second quarter of 2013.
  • GAAP net income for the second quarter was $4.7 million, or $0.11 per diluted share. This compares to a GAAP net income of $3.7 million, or $0.09 per diluted share for the second quarter of 2013. 
  • Non-GAAP net income for the second quarter was $8.5 million or $0.20 per diluted share. This compares to non-GAAP net income of $7.1 million, or $0.17 per diluted share in the second quarter of 2013. (see Non-GAAP reconciliation)

"We delivered another quarter of strong financial performance, driven by growth across systems, consumables, and royalty revenue. We also were pleased with the relative performance of our assay business when compared with the same quarter in 2013 which included substantial non-recurring assay revenue," said Patrick J. Balthrop, president and chief executive officer of Luminex. "As we proceed into the second half of 2014, we are focused on execution and continuing the momentum that we have built during the first two quarters."

"Our R&D team continues to achieve key development milestones with our pipeline products, including ARIES, our sample-to-answer real-time PCR instrument, and our new multiplexing technology, NxTAG. As we engage with customers during the development process, the enthusiastic response we have received from laboratories continues to encourage us that these pipeline products will be highly successful in the marketplace, strategically positioning Luminex for sustainable growth in the near future."

 

REVENUE SUMMARY

(in thousands, except percentages)


















Three Months Ended






June 30,


Variance


2014


2013


($)


(%)


(unaudited)













System sales

$    8,304


$    7,647


$   657


9%

Consumable sales

12,629


11,750


879


7%

Royalty revenue

9,476


8,578


898


10%

Assay revenue

19,886


21,699


(1,813)


-8%

All other revenue

5,337


4,613


724


16%


$  55,632


$  54,287


$1,345


2%


















Six Months Ended






June 30,


Variance


2014


2013


($)


(%)


(unaudited)













System sales

$  14,704


$  14,204


$   500


4%

Consumable sales

25,397


23,647


1,750


7%

Royalty revenue

19,525


18,687


838


4%

Assay revenue

41,546


40,023


1,523


4%

All other revenue

11,021


10,926


95


1%


$112,193


$107,487


$4,706


4%

"In spite of the substantial investments that the Company is making in R&D, our product pipeline, and our direct sales channel, cash and cash equivalents have increased by 24 percent since year-end 2013 to $89.7 million," said Harriss T. Currie, senior vice president and chief financial officer. "Additionally, our effective tax rate for the quarter was favorably affected by the extinguishment of intercompany debt across several foreign jurisdictions and we now expect our full year 2014 effective tax rate to be less than 20 percent."

 

LUMINEX CORPORATION

REPORTABLE SEGMENT HIGHLIGHTS

(in thousands, except percentages)











Three Months Ended






June 30,


Variance


2014


2013


($)


(%)


(unaudited)





Revenue








Technology and strategic partnerships

$33,388


$31,148


$2,240


7%

Assays and related products

22,244


23,139


(895)


-4%

Total Revenue

55,632


54,287


1,345


2%









Operating income (loss)








Technology and strategic partnerships

8,622


6,394


2,228


35%

Assays and related products

(3,851)


(1,353)


(2,498)


-185%

Total Operating income

4,771


5,041


(270)


-5%


















Six Months Ended






June 30,


Variance


2014


2013


($)


(%)


(unaudited)





Revenue








Technology and strategic partnerships

$65,449


$63,017


$2,432


4%

Assays and related products

46,744


44,470


2,274


5%

Total Revenue

112,193


107,487


4,706


4%









Operating income (loss)








Technology and strategic partnerships

18,556


14,075


4,481


32%

Assays and related products

(5,600)


(10,586)


4,986


47%

Total Operating income

12,956


3,489


9,467


271%

FINANCIAL OUTLOOK AND GUIDANCE

The Company reaffirms its 2014 annual revenue guidance of between $225 and $240 million.

CONFERENCE CALL

Management will host a conference call to discuss the operating highlights and financial results for the second quarter ended June 30, 2014, at 4:00 p.m. CDT/5:00 p.m. EDT, Monday, July 28, 2014. 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: growth in our partner business, including systems, consumables and royalties; our efforts to sell our molecular diagnostic products directly to end users; the development progress of our pipeline products, including ARIES systems and assay menu and NxTAG technology, market acceptance of our genetic and infectious disease products, regulatory clearance of our products; the ability of our investment in current initiatives and new products to drive long-term value for our shareholders, management of expenses to create operating leverage; and, projected 2014 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 launch products on time that satisfy market needs with products that we sell, setting of medicare reimbursement codes that adequately reflect the value of our products, 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 2014 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)






June 30,


December 31,


2014


2013


(unaudited)



ASSETS




Current assets:




Cash and cash equivalents

$     86,710


$         67,924

Short-term investments

3,000


4,517

Accounts receivable, net

27,573


30,948

Inventories, net

31,163


30,487

Deferred income taxes

4,719


7,265

Prepaids and other

4,338


5,229

Total current assets

157,503


146,370

Property and equipment, net

33,788


32,793

Intangible assets, net

58,311


60,295

Deferred income taxes

11,913


11,913

Goodwill

50,881


50,738

Other

3,987


3,937

Total assets

$   316,383


$       306,046

LIABILITIES AND STOCKHOLDERS' EQUITY




Current liabilities:




Accounts payable

$      8,938


$         10,698

Accrued liabilities

8,907


11,624

Deferred revenue

4,862


4,980

Current portion of long term debt

-


1,194

Total current liabilities

22,707


28,496

Long-term debt

-


463

Deferred revenue

2,610


2,482

Other

5,216


4,985

Total liabilities

30,533


36,426

Stockholders' equity:




Common stock

42


41

Additional paid-in capital

302,872


296,931

Accumulated other comprehensive gain

16


419

Accumulated deficit

(17,080)


(27,771)

Total stockholders' equity

285,850


269,620

Total liabilities and stockholders' equity

$   316,383


$       306,046

 

 

LUMINEX CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share amounts)










Three Months Ended


Six Months Ended


June 30,


June 30,


2014


2013


2014


2013


(unaudited)


(unaudited)









Revenue

$55,632


$54,287


$112,193


$107,487

Cost of revenue

17,485


16,230


34,092


31,473

Gross profit

38,147


38,057


78,101


76,014

Operating expenses:








Research and development

11,308


11,792


22,392


24,506

Selling, general and administrative

20,970


20,197


40,415


45,963

Amortization of acquired intangible assets

965


1,027


1,985


2,056

Restructuring costs

133


-


353


-

Total operating expenses

33,376


33,016


65,145


72,525

Income from operations

4,771


5,041


12,956


3,489

Interest expense from long-term debt

-


(23)


(6)


(51)

Other expense, net

(1)


99


(20)


92

Income before income taxes

4,770


5,117


12,930


3,530

Income taxes

(45)


(1,422)


(2,239)


(2,346)

Net income

$  4,725


$  3,695


$  10,691


$    1,184









Net income per share, basic

$    0.11


$    0.09


$     0.26


$     0.03

Shares used in computing net income per share, basic

41,560


40,497


41,384


40,693









Net income per share, diluted

$    0.11


$    0.09


$     0.26


$     0.03

Shares used in computing net income per share, diluted

42,125


41,444


41,863


41,541

 

 

 

LUMINEX CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)










Three Months Ended


Six Months Ended


June 30,


June 30,


2014


2013


2014


2013


(unaudited)


(unaudited)

Cash flows from operating activities:








Net income

$  4,725


$  3,695


$10,691


$  1,184

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








Depreciation and amortization

3,607


3,949


7,535


7,753

Stock-based compensation

2,801


2,412


4,430


4,844

Deferred income tax expense

1,842


726


2,520


1,426

Excess income tax expense from employee stock-based awards

-


15


-


289

Loss on disposal of assets

178


65


183


83

Non-cash restructuring charges

424


-


1,196


-

Other

(140)


(1,279)


(332)


(1,081)

Changes in operating assets and liabilities:








Accounts receivable, net

(478)


(6,403)


3,539


1,692

Inventories, net

(623)


(1,279)


(1,522)


(3,683)

Other assets

(295)


(747)


37


(1,643)

Accounts payable

476


(1,202)


(2,105)


(2,933)

Accrued liabilities

(2,081)


(3,320)


(4,515)


(1,543)

Deferred revenue

(209)


(293)


7


(30)

Net cash provided by (used in) operating activities

10,227


(3,661)


21,664


6,358

Cash flows from investing activities:








Purchases of available-for-sale securities

-


(2,497)


(2,996)


(5,492)

Sales and maturities of available-for-sale securities

1,516


3,603


4,513


16,636

Purchase of property and equipment

(3,150)


(5,431)


(6,255)


(8,222)

Proceeds from sale of assets

39


-


39


31

Acquired technology rights

(64)


-


(64)


(930)

Net cash (used in) provided by investing activities

(1,659)


(4,325)


(4,763)


2,023

Cash flows from financing activities:








Payments on debt

(1,621)


(1,105)


(1,621)


(1,105)

Proceeds from issuance of common stock

2,378


517


3,480


1,918

Payments for stock repurchases

-


(8,568)


-


(14,343)

Excess income tax expense from employee stock-based awards

-


(15)


-


(289)

Net cash provided by (used in) financing activities

757


(9,171)


1,859


(13,819)

Effect of foreign currency exchange rate on cash

(1)


346


26


127

Change in cash and cash equivalents

9,324


(16,811)


18,786


(5,311)

Cash and cash equivalents, beginning of period

77,386


54,289


67,924


42,789

Cash and cash equivalents, end of period

$86,710


$37,478


$86,710


$37,478

 

 

 

LUMINEX CORPORATION

NON-GAAP RECONCILIATION

(in thousands)










Three Months Ended


Six Months Ended


June 30,


June 30,


2014


2013


2014


2013


(unaudited)


(unaudited)









Income from operations

$4,771


$5,041


$12,956


$  3,489









Stock-based compensation

2,801


2,412


4,430


4,844

Amortization of acquired intangible assets

965


1,027


1,985


2,056

Costs associated with legal proceedings

810


140


1,600


253

Resolution of molecular diagnostic distribution agreements

-


-


-


7,000

Severance costs

-


485


45


815

Restructuring costs

510


-


1,320


-









Adjusted income from operations

$9,857


$9,105


$22,336


$18,457









Interest expense from long-term debt

-


(23)


(6)


(51)

Other income, net

(1)


99


(20)


92

Contingent consideration adjustments

-


(150)


-


(150)

Income taxes

(45)


(1,422)


(2,239)


(2,346)

Income tax effect of above adjusting items

(320)


(478)


(708)


(1,013)

Income tax benefit from intercompany debt cancellation

(994)


-


(994)


-









Adjusted net income

$8,497


$7,131


$18,369


$14,989









Adjusted net income per share, basic

$  0.20


$  0.18


$    0.44


$    0.37









Shares used in computing adjusted net income per share, basic

41,560


40,497


41,384


40,693









Adjusted net income per share, diluted

$  0.20


$  0.17


$    0.44


$    0.35









Shares used in computing adjusted net income per share, diluted

42,125


42,307


41,863


42,404

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 the ENZO Life Sciences, Inc. and Irori Technologies, Inc. complaints, discussed in the Legal Proceedings section of our previously filed 10-Ks 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

Matt Norman


Sr. Vice President, Finance

Manager, Government

and Chief Financial Officer

and Investor Relations


512-219-8020

512-219-8020


hcurrie@luminexcorp.com

mnorman@luminexcorp.com

 

Logo - http://photos.prnewswire.com/prnh/20100104/LUMINEXLOGO

SOURCE Luminex Corporation



RELATED LINKS
http://www.luminexcorp.com

More by this Source


Custom Packages

Browse our custom packages or build your own to meet your unique communications needs.

Start today.

 

PR Newswire Membership

Fill out a PR Newswire membership form or contact us at (888) 776-0942.

Learn about PR Newswire services

Request more information about PR Newswire products and services or call us at (888) 776-0942.