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Luminex Corporation Reports Third Quarter 2012 Results

October 29, 2012

AUSTIN, Texas, Oct. 29, 2012 /PRNewswire/ — Luminex Corporation (NASDAQ:LMNX) today announced financial results for the third quarter ended September 30, 2012. Financial and operating highlights include the following:

  • Completed the acquisition of GenturaDx, Inc., effective July 11, 2012. Integration activities are on-track
  • Consolidated third quarter revenue of $50.0 million, a 10 percent increase over the third quarter of 2011
  • Third quarter assay revenue of $16.4 million, a 22 percent increase over the third quarter of 2011
  • Third quarter shipments of 271 multiplexing analyzers that included 127 MAGPIX® systems; cumulative life-to-date multiplexing analyzer shipments are 9,433
  • Achieved a consolidated gross profit margin of 70 percent
  • Operating income for the third quarter of 2012 was $3.4 million compared with operating income of $2.8 million for the same period last year, including recognizing $2.7 million of expenses related to acquisition costs associated with the purchase of GenturaDx
  • Luminex was awarded Defense Threat Reduction Agency (DTRA) contract worth up to $11.6 million over three and one half years
  • Announced that Public Health Wales used Luminex’s CE marked xTAG® Gastrointestinal Pathogen Panel for activities during Olympic and Paralympic events that took place in Wales

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

“We are pleased with the revenue growth in the third quarter, driven by another solid performance by our proprietary assay segment. Our broad and innovative portfolio of assays is a key differentiator in the market and a driver of long term growth for the company. In addition, we are seeing strong and growing interest among labs wishing to evaluate and validate our latest innovative assays, the CE-Marked gastrointestinal pathogen panel and NeoPlex4. We believe that after FDA clearance, these two important assays will contribute meaningfully to the company’s long-term growth,” said Patrick J. Balthrop, president and chief executive officer of Luminex.

“With a long standing goal to reduce complexity and increase speed of the testing process, Luminex is constantly evaluating internal and external projects that address every component of the process – chemistry, hardware and software. To this end, the technology we acquired in our acquisition of GenturaDx will provide an elegant, easy to use and scalable platform which combined with our MultiCode® chemistry, will expand our product offerings to current customers as well as attract new customers where low-plex testing and ease of use are top priorities,” Balthrop concluded.

                                    REVENUE SUMMARY
                           (in thousands, except percentages)

                   Three Months Ended
                     September 30,                      Variance
                     -------------                      --------
                      2012                     2011              ($)          (%)
                      ----                     ----              ---          ---
                      (unaudited)

    System sales    $8,550                   $8,638                     $(88)      -1%
    Consumable
     sales          12,898                   11,965                      933        8%
    Royalty
     revenue         7,690                    7,450                      240        3%
    Assay
     revenue        16,439                   13,424                    3,015       22%
    All other
     revenue         4,470                    4,080                      390       10%
                   $50,047                  $45,557                   $4,490       10%
                   =======                  =======                   ======      ===

                 Nine Months Ended
                   September 30,                     Variance
                   -------------                     --------
                      2012                     2011              ($)          (%)
                      ----                     ----              ---          ---
                    (unaudited)

    System sales   $23,934                  $25,452                  $(1,518)      -6%
    Consumable
     sales          35,600                   45,364                   (9,764)     -22%
    Royalty
     revenue        23,647                   22,118                    1,529        7%
    Assay
     revenue        51,246                   32,269                   18,977       59%
    All other
     revenue        12,620                   11,267                    1,353       12%
                  $147,047                 $136,470                  $10,577        8%
                  ========                 ========                  =======      ===

“In the third quarter, we experienced a healthy rebound in sales growth while maintaining tight cost controls, as demonstrated by both our gross and operating margins,” said Harriss T. Currie, vice president and chief financial officer. “While we anticipate continued revenue growth in the fourth quarter, we believe it prudent to adjust our annual revenue guidance to account for an increasingly unpredictable budgetary environment among our lab customers, particularly in Europe. This environment has primarily impacted our expectations for systems and assay revenue.”

                                 LUMINEX CORPORATION
                            REPORTABLE SEGMENT HIGHLIGHTS
                          (in thousands, except percentages)

                   Three Months Ended
                      September 30,                    Variance
                      -------------                    --------
                      2012                    2011              ($)          (%)
                      ----                    ----              ---          ---
                       (unaudited)
    Revenue
     Technology
     and
     strategic
     partnerships  $31,584                 $29,918                   $1,666        6%
    Assays
     and
     related
     products       18,463                  15,639                    2,824       18%
                    ------                  ------                    -----      ---
    Total
     Revenue        50,047                  45,557                    4,490       10%

     Operating
     income
     (loss)
     Technology
     and
     strategic
     partnerships    4,181                   5,428                   (1,247)     -23%
    Assays
     and
     related
     products         (814)                 (2,608)                   1,794       69%
                      ----                  ------                    -----      ---
    Total
     Operating
     income          3,367                   2,820                      547       19%

                  Nine Months Ended
                    September 30,                   Variance
                    -------------                   --------
                      2012                    2011              ($)          (%)
                      ----                    ----              ---          ---
                     (unaudited)
    Revenue
     Technology
     and
     strategic
     partnerships  $91,358                 $98,064                  $(6,706)      -7%
    Assays
     and
     related
     products       55,689                  38,406                   17,283       45%
                    ------                  ------                   ------      ---
    Total
     Revenue       147,047                 136,470                   10,577        8%

     Operating
     income
     (loss)
     Technology
     and
     strategic
     partnerships   12,722                  25,656                  (12,934)     -50%
    Assays
     and
     related
     products        2,739                  (5,745)                   8,484      148%
                     -----                  ------                    -----      ---
    Total
     Operating
     income         15,461                  19,911                   (4,450)     -22%

FINANCIAL OUTLOOK AND GUIDANCE

The Company has revised its 2012 annual revenue guidance to a range of $200 and $204 million from $205 and $215 million.

CONFERENCE CALL

Management will host a conference call to discuss the operating highlights and financial results for the third quarter ended September 30, 2012, on Monday, October 29, 2012, at 5:00 p.m. Eastern time / 4:00 p.m. Central 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; distribution for our instruments; purchases of our consumable products; the development progress and market acceptance of our assay products, including NeoPlex4 and NeoPlex System, Gastrointestinal Pathogen Panel (GPP) and products developed and manufactured by Luminex Madison and Luminex Molecular Diagnostics; the use of GPP at the Olympics and Paralympic events in Wales; anticipated FDA clearance of our products, including GPP, NeoPlex4 and NeoPlex System; the award of a DTRA contract to Luminex; the acquisition of GenturaDx and the status of the integration; Luminex’s long-term strategic plan and acquisition strategy; the ability of our investment in current initiatives and new products to deliver high performance solutions, and drive long-term value for our shareholders; and, projected 2012 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, 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 2012 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)

                               September 30,             December 31,
                                                 2012                    2011
                                                 ----                    ----
                                (unaudited)
    ASSETS
    Current
     assets:
    Cash and cash
     equivalents                              $28,486                 $58,282
    Restricted
     cash                                           -                   1,006
    Short-term
     investments                               13,117                  42,574
    Accounts
     receivable,
     net                                       31,229                  23,016
    Inventories,
     net                                       27,213                  24,579
    Deferred
     income taxes                               3,394                   5,991
    Prepaids and
     other                                      5,759                   3,529
                                                -----                   -----

    Total current
     assets                                   109,198                 158,977

    Property and
     equipment,
     net                                       26,584                  25,192
    Intangible
     assets, net                               65,757                  29,437
    Deferred
     income taxes                              15,164                  12,817
    Long-term
     investments                                6,000                   6,151
    Goodwill                                   52,057                  42,763
    Other                                       7,745                   7,310

    Total assets                             $282,505                $282,647
                                             ========                ========

    LIABILITIES
     AND
     STOCKHOLDERS'
     EQUITY
    Current
     liabilities:
    Accounts
     payable                                   $7,867                  $5,941
    Accrued
     liabilities                               12,425                  11,047
    Deferred
     revenue                                    4,071                   4,057
    Current
     portion of
     long term
     debt                                         748                     999
                                                  ---                     ---

    Total current
     liabilities                               25,111                  22,044

    Long-term
     debt                                       2,102                   2,573
    Deferred
     revenue                                    3,096                   3,344
    Other                                       4,242                   3,831
                                                -----                   -----

    Total
     liabilities                               34,551                  31,792
                                               ------                  ------

    Stockholders'
     equity:
    Common stock                                   41                      41
    Additional
     paid-in
     capital                                  285,871                 297,104
    Accumulated
     other
     comprehensive
     gain                                       1,161                     984
    Accumulated
     deficit                                  (39,119)                (47,274)
                                              -------                 -------

    Total
     stockholders'
     equity                                   247,954                 250,855

    Total
     liabilities
     and
     stockholders'
     equity                                  $282,505                $282,647
                                             ========                ========

                                           LUMINEX CORPORATION
                             CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                                (in thousands, except per share amounts)

                                           Three Months Ended                Nine Months Ended
                                             September 30,                     September 30,
                                             -------------                     -------------
                                              2012                 2011                 2012       2011
                                              ----                 ----                 ----       ----
                                              (unaudited)                       (unaudited)

    Revenue                                $50,047              $45,557             $147,047   $136,470
    Cost of revenue                         15,002               17,140               43,830     43,499
                                            ------               ------               ------     ------

    Gross profit                            35,045               28,417              103,217     92,971

    Operating expenses:
    Research and development                10,707                7,997               29,785     23,512
    Selling, general and
     administrative                         19,941               16,505               54,757     47,268
    Amortization of acquired
     intangible assets                       1,030                1,095                3,214      2,280

    Total operating expenses                31,678               25,597               87,756     73,060
                                            ------               ------               ------     ------

    Income from operations                   3,367                2,820               15,461     19,911
    Interest expense from
     long-term debt                            (40)                 (73)                (162)      (235)
    Other income, net                           25                   72                  124        287
                                               ---                  ---                  ---        ---

    Income before income
     taxes                                   3,352                2,819               15,423     19,963
    Income taxes                            (1,676)                (891)              (7,268)    (8,931)
                                            ------                 ----               ------     ------

    Net income                              $1,676               $1,928               $8,155    $11,032
                                            ======               ======               ======    =======

    Net income per share,
     basic                                   $0.04                $0.05                $0.20      $0.27
                                             =====                =====                =====      =====

    Shares used in computing
     net income per share,
     basic                                  41,000               41,391               40,995     41,298

    Net income per share,
     diluted                                 $0.04                $0.05                $0.19      $0.26
                                             =====                =====                =====      =====

    Shares used in computing
     net income per share,
     diluted                                41,887               42,611               42,117     42,533

                                                     LUMINEX CORPORATION
                                       CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                                       (in thousands)

                                                          Three Months Ended             Nine Months Ended
                                                            September 30,                  September 30,
                                                            -------------                  -------------
                                                              2012                 2011             2012      2011
                                                              ----                 ----             ----      ----
                                                             (unaudited)                    (unaudited)
    Cash flows from operating
     activities:
    Net income                                              $1,676               $1,928           $8,155   $11,032
    Adjustments to reconcile net income
     to net cash provided by operating
     activities:
    Depreciation and amortization                            3,613                3,287           10,668     8,425
    Stock-based compensation                                 2,338                2,761            7,552     8,301
    Deferred income tax expense
     (benefit)                                               1,987               (1,913)           2,916     1,466
    Excess income tax expense (benefit)
     from employee stock-based awards                          590               (2,640)          (2,183)   (6,345)
    Other                                                      472                 (427)             655      (122)
    Changes in operating assets and
     liabilities:
    Accounts receivable, net                                (5,043)              (5,252)          (8,226)    1,404
    Inventories, net                                          (877)               2,166           (2,604)    3,373
    Other assets                                              (663)                 482           (2,294)     (704)
    Accounts payable                                         1,637                2,360            1,706    (1,894)
    Accrued liabilities                                       (792)               4,026           (2,007)    4,193
    Deferred revenue                                          (330)                 (20)            (237)     (480)
                                                              ----                  ---             ----      ----

    Net cash provided by operating
     activities                                              4,608                6,758           14,101    28,649
                                                             -----                -----           ------    ------

    Cash flows from investing
     activities:
    Purchases of available-for-sale
     securities                                             (2,994)              (5,022)         (13,489)  (34,269)
    Sales and maturities of available-
     for-sale securities                                    13,070               11,539           43,075    25,716
    Purchase of property and equipment                      (2,152)              (3,322)          (7,509)   (7,120)
    Business acquisition consideration,
     net of cash acquired                                  (48,277)                   -          (48,277)  (33,914)
    Purchase of cost method investment                      (1,000)                   -           (1,000)   (2,000)
    Acquired technology rights                                 (51)                (439)            (342)     (526)

    Net cash (used in) provided by
     investing activities                                  (41,404)               2,756          (27,542)  (52,113)
                                                           -------                -----          -------   -------

    Cash flows from financing
     activities:
    Payments on debt                                             -                    -           (1,025)     (885)
    Proceeds from employee stock plans
     and issuance of common stock                              861                2,616            3,224     3,434
    Payments for stock repurchases                         (11,036)              (5,054)         (20,916)   (9,740)
    Excess income tax (expense) benefit
     from employee stock-based awards                         (590)               2,640            2,183     6,345

    Net cash (used in) provided by
     financing activities                                  (10,765)                 202          (16,534)     (846)
                                                           -------                  ---          -------      ----

    Effect of foreign currency exchange
     rate on cash                                              149                 (245)             179       (96)
    Change in cash and cash equivalents                    (47,412)               9,471          (29,796)  (24,406)
    Cash and cash equivalents,
     beginning of period                                    75,898               55,610           58,282    89,487
                                                            ------               ------           ------    ------

    Cash and cash equivalents, end of
     period                                                $28,486              $65,081          $28,486   $65,081
                                                           =======              =======          =======   =======
    Contacts: Harriss T. Currie                                   Matthew Scalo
              Vice President, Finance and Chief Financial Officer Sr. Director, Investor Relations
              512-219-8020                                        512-219-8020
              hcurrie@luminexcorp.com                             mscalo@luminexcorp.com

SOURCE Luminex Corporation


Source: PR Newswire