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Luminex Corporation Reports Second Quarter 2013 Results

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:

    "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 EndedJune 30,Variance20132012($)(%)(unaudited)System sales

    7,647$   8,386$
    (739)-9%Consumable sales

    11,75010,8029489%Royalty revenue

    8,5787,71586311%Assay revenue

    21,69917,5104,18924%All other revenue

    4,6133,86075320%$   54,287$ 48,273$   6,01412%Six Months EndedJune 30,Variance20132012($)(%)(unaudited)System sales

    $   14,204$ 15,384$  (1,180)-8%Consumable sales

    23,64722,7029454%Royalty revenue

    18,68715,9572,73017%Assay revenue

    40,02334,8075,21615%All other revenue

    10,9268,1502,77634%$ 107,487$ 97,000$ 10,48711% 

    "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 CORPORATIONREPORTABLE SEGMENT HIGHLIGHTS(in thousands, except percentages)Three Months EndedJune 30,Variance20132012($)(%)(unaudited)RevenueTechnology and strategic partnerships

    $31,148$29,565$1,5835%Assays and related products

    23,13918,7084,43124%Total Revenue

    54,28748,2736,01412%Operating income (loss)Technology and strategic partnerships

    6,3947,290(896)-12%Assays and related products

    (1,353)(804)(549)-68%Total Operating income (loss)

    5,0416,486(1,445)-22%Six Months EndedJune 30,Variance20132012($)(%)(unaudited)RevenueTechnology and strategic partnerships

    $63,017$59,774$3,2435%Assays and related products

    44,47037,2267,24419%Total Revenue

    107,48797,00010,48711%Operating income (loss)Technology and strategic partnerships

    14,07514,520(445)-3%Assays and related products

    (10,586)(2,426)(8,160)-336%Total Operating income (loss)


    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  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

    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.


    Harriss T. Currie

    Matthew ScaloSr. Vice President, Finance and Chief Financial Officer

    Sr. Director, Investor Relations512-219-8020  LUMINEX CORPORATIONCONDENSED CONSOLIDATED BALANCE SHEETS(in thousands)June 30,December 31,20132012(unaudited)ASSETSCurrent assets:Cash and cash equivalents

    42,789Short-term investments

    5,49613,607Accounts receivable, net

    31,56433,273Inventories, net

    33,51529,937Deferred income taxes

    3,5744,783Prepaids and other

    5,1934,388Total current assets

    116,820128,777Property and equipment, net

    29,45226,229Intangible assets, net

    63,04965,218Deferred income taxes

    14,36014,360Long-term investments



    9,1298,463Total assets

    $   283,639$
    297,175LIABILITIES AND STOCKHOLDERS' EQUITYCurrent liabilities:Accounts payable

    9,650Accrued liabilities

    11,44212,866Deferred revenue

    4,3544,134Current portion of long term debt

    6041,138Total current liabilities

    23,29927,788Long-term debt

    1,0631,702Deferred revenue


    6,0685,085Total liabilities

    33,09337,508Stockholders' equity:Common stock

    4041Additional paid-in capital

    283,711293,392Accumulated other comprehensive gain

    4781,101Accumulated deficit

    (33,683)(34,867)Total stockholders' equity

    250,546259,667Total liabilities and stockholders' equity

    $   283,639$
    297,175 LUMINEX CORPORATIONCONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS(in thousands, except per share amounts)Three Months EndedSix Months EndedJune 30,June 30,2013201220132012(unaudited)(unaudited)Revenue

    $54,287$48,273$107,487$97,000Cost of revenue

    16,23013,86131,47328,828Gross profit

    38,05734,41276,01468,172Operating expenses:Research and development

    11,79210,14424,50620,281Selling, general and administrative

    20,19716,69845,96333,613Amortization of acquired intangible assets

    1,0271,0842,0562,184Total operating expenses

    33,01627,92672,52556,078Income from operations

    5,0416,4863,48912,094Interest expense from long-term debt

    (23)(63)(51)(122)Other income, net

    99429299Income before income taxes

    5,1176,4653,53012,071Income taxes

    (1,422)(3,513)(2,346)(5,592)Net income

    $ 3,695$ 2,952$ 1,184$ 6,479Net income per share, basic

    $ 0.09$ 0.07$ 0.03$ 0.16Shares used in computing net income per share, basic

    40,49741,06440,69340,992Net income per share, diluted

    $ 0.09$ 0.07$ 0.03$ 0.15Shares used in computing net income per share, diluted

    41,44442,39941,54142,246 LUMINEX CORPORATIONCONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS(in thousands)Three Months EndedSix Months EndedJune 30,June 30,2013201220132012(unaudited)(unaudited)Cash flows from operating activities:Net income

    $  3,695$  2,952$  1,184$  6,479Adjustments to reconcile net income to net cash (used in) provided by operating activities:Depreciation and amortization

    3,9493,5337,7537,055Stock-based compensation

    2,4122,5714,8445,214Deferred income tax expense

    7263761,426929Excess income tax expense (benefit) from employee stock-based awards

    15(2,476)289(2,773)Loss on disposal of assets


    (1,279)(49)(1,081)183Changes in operating assets and liabilities:Accounts receivable, net

    (6,403)8301,692(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)69Accrued liabilities

    (3,320)4,811(1,543)(1,215)Deferred revenue

    (293)(50)(30)93Net cash (used in) provided by operating activities

    (3,661)9,5226,3589,493Cash 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

    3,60321,49016,63630,005Purchase 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)15,9422,02313,862Cash 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

    5171,7061,9182,363Payments 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)2,773Net cash used in financing activities

    (9,171)(1,275)(13,819)(5,769)Effect of foreign currency exchange rate on cash

    346(121)12730Change in cash and cash equivalents

    (16,811)24,068(5,311)17,616Cash and cash equivalents, beginning of period

    54,28951,83042,78958,282Cash and cash equivalents, end of period

    $37,478$75,898$37,478$75,898 LUMINEX CORPORATIONNON-GAAP RECONCILIATION(in thousands)Three Months EndedSix Months EndedJune 30,June 30,2013201220132012(unaudited)(unaudited)Net income

    $3,695$2,952$  1,184$  6,479Stock-based compensation

    2,4122,5714,8445,214Amortization of acquired intangible assets

    1,0271,0842,0562,184Costs associated with legal proceedings

    140-253-Resolution of molecular diagnostic distribution agreements

    --7,000-Acquisition and severance costs

    485453815524Income tax effect of above adjusting items

    (520)(740)(1,055)(1,475)Adjusted net income

    $7,239$6,320$15,097$12,926Adjusted net income per share, basic

    $  0.18$  0.15$
    .32Shares used in computing adjusted net income per share, basic

    40,49741,06440,69340,992Adjusted net income per share, diluted

    $  0.17$  0.15$
    .31Shares used in computing adjusted net 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
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