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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 EndedJune 30,Variance20142013($)(%)(unaudited)System sales

    $   6579%Consumable sales

    12,62911,7508797%Royalty revenue

    9,4768,57889810%Assay revenue

    19,88621,699(1,813)-8%All other revenue

    5,3374,61372416%$  55,632$  54,287$1,3452%Six Months EndedJune 30,Variance20142013($)(%)(unaudited)System sales

    $  14,704$  14,204$   5004%Consumable sales

    25,39723,6471,7507%Royalty revenue

    19,52518,6878384%Assay revenue

    41,54640,0231,5234%All other revenue

    11,02110,926951%$112,193$107,487$4,7064%"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 CORPORATIONREPORTABLE SEGMENT HIGHLIGHTS(in thousands, except percentages)Three Months EndedJune 30,Variance20142013($)(%)(unaudited)RevenueTechnology and strategic partnerships

    $33,388$31,148$2,2407%Assays and related products

    22,24423,139(895)-4%Total Revenue

    55,63254,2871,3452%Operating income (loss)Technology and strategic partnerships

    8,6226,3942,22835%Assays and related products

    (3,851)(1,353)(2,498)-185%Total Operating income

    4,7715,041(270)-5%Six Months EndedJune 30,Variance20142013($)(%)(unaudited)RevenueTechnology and strategic partnerships

    $65,449$63,017$2,4324%Assays and related products

    46,74444,4702,2745%Total Revenue

    112,193107,4874,7064%Operating income (loss)Technology and strategic partnerships

    18,55614,0754,48132%Assays and related products

    (5,600)(10,586)4,98647%Total Operating income

    12,9563,4899,467271%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  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: 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 CORPORATIONCONDENSED CONSOLIDATED BALANCE SHEETS(in thousands)June 30,December 31,20142013(unaudited)ASSETSCurrent assets:Cash and cash equivalents

    Short-term investments

    3,0004,517Accounts receivable, net

    27,57330,948Inventories, net

    31,16330,487Deferred income taxes

    4,7197,265Prepaids and other

    4,3385,229Total current assets

    157,503146,370Property and equipment, net

    33,78832,793Intangible assets, net

    58,31160,295Deferred income taxes



    3,9873,937Total assets

    $   316,383$
    LIABILITIES AND STOCKHOLDERS' EQUITYCurrent liabilities:Accounts payable

    Accrued liabilities

    8,90711,624Deferred revenue

    4,8624,980Current portion of long term debt

    -1,194Total current liabilities

    22,70728,496Long-term debt

    -463Deferred revenue


    5,2164,985Total liabilities

    30,53336,426Stockholders' equity:Common stock

    4241Additional paid-in capital

    302,872296,931Accumulated other comprehensive gain

    16419Accumulated deficit

    (17,080)(27,771)Total stockholders' equity

    285,850269,620Total liabilities and stockholders' equity

    $   316,383$

     LUMINEX CORPORATIONCONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS(in thousands, except per share amounts)Three Months EndedSix Months EndedJune 30,June 30,2014201320142013(unaudited)(unaudited)Revenue

    $55,632$54,287$112,193$107,487Cost of revenue

    17,48516,23034,09231,473Gross profit

    38,14738,05778,10176,014Operating expenses:Research and development

    11,30811,79222,39224,506Selling, general and administrative

    20,97020,19740,41545,963Amortization of acquired intangible assets

    9651,0271,9852,056Restructuring costs

    133-353-Total operating expenses

    33,37633,01665,14572,525Income from operations

    4,7715,04112,9563,489Interest expense from long-term debt

    -(23)(6)(51)Other expense, net

    (1)99(20)92Income before income taxes

    4,7705,11712,9303,530Income taxes

    (45)(1,422)(2,239)(2,346)Net income

    $  4,725$  3,695$  10,691$
    Net income per share, basic

    Shares used in computing net income per share, basic

    41,56040,49741,38440,693Net income per share, diluted

    Shares used in computing net income per share, diluted



     LUMINEX CORPORATIONCONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS(in thousands)Three Months EndedSix Months EndedJune 30,June 30,2014201320142013(unaudited)(unaudited)Cash flows from operating activities:Net income

    $  4,725$  3,695$10,691$  1,184Adjustments to reconcile net income to net cash provided by (used in) operating activities:Depreciation and amortization

    3,6073,9497,5357,753Stock-based compensation

    2,8012,4124,4304,844Deferred income tax expense

    1,8427262,5201,426Excess income tax expense from employee stock-based awards

    -15-289Loss on disposal of assets

    1786518383Non-cash restructuring charges


    (140)(1,279)(332)(1,081)Changes in operating assets and liabilities:Accounts receivable, net

    (478)(6,403)3,5391,692Inventories, 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)21,6646,358Cash flows from investing activities:Purchases of available-for-sale securities

    -(2,497)(2,996)(5,492)Sales and maturities of available-for-sale securities

    1,5163,6034,51316,636Purchase of property and equipment

    (3,150)(5,431)(6,255)(8,222)Proceeds from sale of assets

    39-3931Acquired technology rights

    (64)-(64)(930)Net cash (used in) provided by investing activities

    (1,659)(4,325)(4,763)2,023Cash flows from financing activities:Payments on debt

    (1,621)(1,105)(1,621)(1,105)Proceeds from issuance of common stock

    2,3785173,4801,918Payments 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)34626127Change in cash and cash equivalents

    9,324(16,811)18,786(5,311)Cash and cash equivalents, beginning of period

    77,38654,28967,92442,789Cash and cash equivalents, end of period



     LUMINEX CORPORATIONNON-GAAP RECONCILIATION(in thousands)Three Months EndedSix Months EndedJune 30,June 30,2014201320142013(unaudited)(unaudited)Income from operations

    $4,771$5,041$12,956$  3,489Stock-based compensation

    2,8012,4124,4304,844Amortization of acquired intangible assets

    9651,0271,9852,056Costs associated with legal proceedings

    8101401,600253Resolution of molecular diagnostic distribution agreements

    ---7,000Severance costs

    -48545815Restructuring costs

    510-1,320-Adjusted income from operations

    $9,857$9,105$22,336$18,457Interest expense from long-term debt

    -(23)(6)(51)Other income, net

    (1)99(20)92Contingent 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$14,989Adjusted net income per share, basic

    $  0.20$  0.18$
    Shares used in computing adjusted net income per share, basic

    41,56040,49741,38440,693Adjusted net income per share, diluted

    $  0.20$  0.17$
    Shares used in computing adjusted net income per share, diluted

    42,12542,30741,86342,404The 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.


    Harriss T. Currie

    Matt NormanSr. Vice President, Finance

    Manager, Government and Chief Financial Officer

    and Investor Relations512-219-8020  

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