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: oConsolidated second quarter revenue was $54.3 million, a 12 percent increase over the second quarter of 2012 oSecond quarter assay revenue of $21.7 million, a 24 percent increase over the second quarter of 2012 oCumulative life-to-date multiplexing analyzer shipments of 10,130, up 11 percent from a year ago oConsolidated gross margin of 70 percent for the second quarter of 2013 oNon-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 $0.07 per diluted share in the same quarter of 2012 (see the reconciliation of GAAP to non-GAAP net income set forth on page 8) oIn June, Natural Molecular Testing Corporation began the commercialization of a 42-target test, called The Personalized Medicine Panel, based on Luminex's proprietary technology (Logo: http://photos.prnewswire.com/prnh/20100104/LUMINEXLOGO) "We generated another quarter of strong financial performance, driven by continued execution in our assay segment. Growth in assay revenue was well balanced across our genetic and infectious disease franchises and included a notable contribution from our recent US IVD cleared xTAG® gastrointestinal pathogen panel. This performance also reflects a positive impact from the Company's transition to a direct molecular diagnostic sales force which began in early 2013," said Patrick J. Balthrop, president and chief executive officer of Luminex. "In addition, we surpassed a major milestone for the Company in the second quarter, delivering our 10,000th multiplexing analyzer to date. The entire company is proud of this achievement," added Balthrop. "Notwithstanding our success during the second quarter, the overall molecular diagnostic market began to experience a deceleration in the utilization of certain molecular assays. This is a result of administrative issues related to the reimbursement of certain tests included in the new molecular diagnostic code system established January 1, 2013 by the Centers for Medicare and Medicaid Services. A number of our lab customers have expended significant efforts in striving for a rapid resolution, nonetheless progress has been slow. While the situation remains fluid, we believe it is prudent to adjust our expectations for the second half of 2013 to account for this headwind," Balthrop concluded. REVENUE SUMMARY (in thousands, except percentages) Three Months Ended June 30, Variance 2013 2012 ($) (%) (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 15minutes 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 firstname.lastname@example.org email@example.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
Luminex Corporation Reports Second Quarter 2013 Results
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