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Luminex Corporation Reports Second Quarter 2013 Results



           Luminex Corporation Reports Second Quarter 2013 Results

ACHIEVES MILESTONE SELLING 10,000TH MULTIPLEXING ANALYZER

PR Newswire

AUSTIN, Texas, July 29, 2013

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:

  o Consolidated second quarter revenue was $54.3 million, a 12 percent
    increase over the second quarter of 2012
  o Second quarter assay revenue of $21.7 million, a 24 percent increase over
    the second quarter of 2012
  o Cumulative life-to-date multiplexing analyzer shipments of 10,130, up 11
    percent from a year ago
  o Consolidated gross margin of 70 percent for the second quarter of 2013
  o 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)
  o 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         Sr. Director, Investor
          Financial Officer                             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      1,027      1,084    2,056     2,184
assets
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  40,497     41,064   40,693    40,992
share, basic
Net income per share, diluted            $ 0.09     $ 0.07   $ 0.03    $ 0.15
Shares used in computing net income per  41,444     42,399   41,541    42,246
share, diluted

 

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     15        (2,476)   289       (2,773)
awards
     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          (3,661)   9,522     6,358     9,493
operating activities
Cash flows from investing activities:
Purchases of available-for-sale         (2,497)   (1,496)   (5,492)   (10,495)
securities
Sales and maturities of                 3,603     21,490    16,636    30,005
available-for-sale securities
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          (4,325)   15,942    2,023     13,862
investing activities
Cash flows from financing activities:
Payments on debt                        (1,105)   (1,025)   (1,105)   (1,025)
Proceeds from employee stock plans and  517       1,706     1,918     2,363
issuance of common stock
Payments for stock repurchases          (8,568)   (4,432)   (14,343)  (9,880)
Excess income tax (expense) benefit     (15)      2,476     (289)     2,773
from employee stock-based awards
Net cash used in financing activities   (9,171)   (1,275)   (13,819)  (5,769)
Effect of foreign currency exchange     346       (121)     127       30
rate on cash
Change in cash and cash equivalents     (16,811)  24,068    (5,311)   17,616
Cash and cash equivalents, beginning of 54,289    51,830    42,789    58,282
period
Cash and cash equivalents, end of       $37,478   $75,898   $37,478   $75,898
period

 

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   1,027      1,084    2,056      2,184
assets
Costs associated with legal           140        -        253        -
proceedings
Resolution of molecular diagnostic    -          -        7,000      -
distribution agreements
Acquisition and severance costs       485        453      815        524
Income tax effect of above adjusting  (520)      (740)    (1,055)    (1,475)
items
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 40,497     41,064   40,693     40,992
income per share, basic
Adjusted net income per share,        $  0.17    $  0.15  $    0.36  $    0.31
diluted
Shares used in computing adjusted net 41,444     42,399   41,541     42,246
income per share, diluted

 

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

Website: http://www.luminexcorp.com
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