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Luminex Corporation Reports Third Quarter 2013 Results

AUSTIN, Texas, Nov. 4, 2013 /PRNewswire/ -- Luminex Corporation (NASDAQ: LMNX) today announced financial and operating results for the third quarter ended September 30, 2013.  Highlights include the following:


  • Consolidated third quarter revenue of $50.8 million
  • Third quarter assay revenue of $16.1 million.  Infectious disease sales comprised approximately 64 percent of total assay sales, with genetic testing representing 36 percent.
  • Third quarter royalty revenue of $9.0 million 
  • Shipments of 280 multiplexing analyzers, which included 135 MAGPIX systems, 128 LX systems, and 17 FLEXMAP 3D systems
  • Cumulative life-to-date multiplexing analyzer shipments of 10,410
  • Realized a gain of $5.4 million from the sale of our minority interest investment in a private company that was acquired by a third party in July 2013
  • Received FDA and European Clearance for an updated version of Comprehensive Genotyping Assay, xTAG® CYP2D6 Kit in July
  • Received FDA and European Clearance for a new personalized Medicine Genotyping Assay, xTAG® CYP2C19 Kit in September
  • Proceeded with the restructuring plan announced during the quarter, focused on the Newborn Screening Group and our Brisbane, Australia office to allow for increased focus on the molecular diagnostics market
  • "We are disappointed that the reimbursement issues concerning certain tests included in the new molecular diagnostic code system in the U.S., which we commented on during our second quarter call, have not been resolved and continue to affect the entire industry including Luminex, as we experienced a significant order delay from our largest customer at the end of the quarter.  As we evaluate the recently published reimbursement rates for 2014, we agree with our customers' public comments that this is a transient issue and we expect to see resolution in the near future," said Patrick J. Balthrop, president and chief executive officer of Luminex. 

    "We strongly believe in our strategic initiatives and that the Company is well-positioned for substantial growth across our entire portfolio when the transient reimbursement problem is resolved.  Among these initiatives is the development of our unique 'sample-to-answer' system, Project ARIES, which will be demonstrated at the upcoming Association for Molecular Pathology Annual Meeting in Phoenix on November 14-16th.  In addition, we are pleased with the progress our direct sales force made during the quarter selling our family of diagnostic tests including GPP, RVP and our recently approved genotyping assay," added Mr. Balthrop.REVENUE SUMMARY(in thousands, except percentages)Three Months EndedSeptember 30,Variance20132012($)(%)(unaudited)System sales

    (982)-11%Consumable sales

    12,83712,898(61)0%Royalty revenue

    8,9967,6901,30617%Assay revenue

    16,11516,439(324)-2%All other revenue

    5,2644,47079418%$  50,780$  50,047$
    7331%Nine Months EndedSeptember 30,Variance20132012($)(%)(unaudited)System sales

    $  21,772$  23,934$ (2,162)-9%Consumable sales

    36,48435,6008842%Royalty revenue

    27,68323,6474,03617%Assay revenue

    56,13851,2464,89210%All other revenue

    16,19012,6203,57028%$158,267$147,047$11,2208% LUMINEX CORPORATIONREPORTABLE SEGMENT HIGHLIGHTS(in thousands, except percentages)Three Months EndedSeptember 30,Variance20132012($)(%)(unaudited)RevenueTechnology and strategic partnerships

    $33,335$31,584$ 1,7516%Assays and related products

    17,44518,463(1,018)-6%Total Revenue

    50,78050,0477331%Operating income (loss)Technology and strategic partnerships

    9,2937,2052,08829%Assays and related products

    (13,487)(3,838)(9,649)-251%Total Operating income (loss)

    (4,194)3,367(7,561)-225%Nine Months EndedSeptember 30,Variance20132012($)(%)(unaudited)RevenueTechnology and strategic partnerships

    $96,352$91,358$ 4,9945%Assays and related products

    61,91555,6896,22611%Total Revenue

    158,267147,04711,2208%Operating income (loss)Technology and strategic partnerships

    23,36821,7251,6438%Assays and related products

    (24,073)(6,264)(17,809)-284%Total Operating income (loss)

    (705)15,461(16,166)-105%FINANCIAL OUTLOOK AND GUIDANCE The Company has revised its 2013 annual revenue guidance to a range of between $212 and $217 million from $220 and $230 million.

    CONFERENCE CALL Management will host a conference call to discuss the operating highlights and financial results for the third quarter ended September 30, 2013, at 4:00 p.m. CST/5:00 p.m. EST, Monday, November 4, 2013. 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, regulatory clearance of our products; 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 financial impact of recent corporate restructuring, status of molecular codes, the impact of delays of Medicare reimbursement on our customers and current and future 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. CurrieSr. Vice President, Finance and Chief Financial  LUMINEX CORPORATIONCONDENSED CONSOLIDATED BALANCE SHEETS(in thousands)September 30,December 31,20132012(unaudited)ASSETSCurrent assets:Cash and cash equivalents

    42,789Short-term investments

    5,49713,607Accounts receivable, net

    30,21033,273Inventories, net

    29,74229,937Deferred income taxes

    1,6034,783Prepaids and other

    5,7494,388Total current assets

    129,970128,777Property and equipment, net

    32,78826,229Intangible assets, net

    61,32065,218Deferred income taxes

    14,46214,360Long-term investments



    4,5038,463Total assets

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

    9,650Accrued liabilities

    11,75612,866Deferred revenue

    4,9494,134Current portion of long term debt

    9241,138Total current liabilities

    26,66727,788Long-term debt

    7881,702Deferred revenue


    5,0385,085Total liabilities

    35,00137,508Stockholders' equity:Common stock

    4141Additional paid-in capital

    291,156293,392Accumulated other comprehensive gain

    5851,101Accumulated deficit

    (32,887)(34,867)Total stockholders' equity

    258,895259,667Total liabilities and stockholders' equity

    297,175 LUMINEX CORPORATIONCONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS(in thousands, except per share amounts)Three Months EndedNine Months EndedSeptember 30,September 30,2013201220132012(unaudited)(unaudited)Revenue

    $50,780$50,047$158,267$147,047Cost of revenue

    19,99915,00251,47243,830Gross profit

    30,78135,045106,795103,217Operating expenses:Research and development

    10,34611,18634,85231,467Selling, general and administrative

    21,46619,46267,42953,075Amortization of acquired intangible assets

    1,0211,0303,0773,214Restructuring costs

    2,142-2,142-Total operating expenses

    34,97531,678107,50087,756(Loss) income from operations

    (4,194)3,367(705)15,461Interest expense from long-term debt

    (16)(40)(67)(162)Other income, net

    6,638256,730124Income before income taxes

    2,4283,3525,95815,423Income taxes

    (1,632)(1,676)(3,978)(7,268)Net income

    796$  1,676$
    8,155Net income per share, basic

    .20Shares used in computing net income per share, basic

    40,75241,00040,71240,995Net income per share, diluted

    .19Shares used in computing net income per share, diluted

    41,91941,88741,77142,117 LUMINEX CORPORATIONCONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS(in thousands)Three Months EndedNine Months EndedSeptember 30,September 30,2013201220132012(unaudited)(unaudited)Cash flows from operating activities:Net income

    796$  1,676$  1,980$  8,155Adjustments to reconcile net income to net cash provided by operating activities:Depreciation and amortization

    3,9943,61311,74710,668Stock-based compensation

    1,8892,3386,7337,552Deferred income tax expense

    1,9891,9873,4152,916Excess income tax (benefit) expense from employee stock-based awards

    (15)590274(2,183)Gain on sale of assets

    (5,388)-(5,305)-Non-cash restructuring charges


    (34)472(1,115)655Changes in operating assets and liabilities:Accounts receivable, net

    1,384(5,043)3,076(8,226)Inventories, net

    1,769(877)(1,914)(2,604)Other assets

    (415)(663)(2,058)(2,294)Accounts payable

    2,2151,637(718)1,706Accrued liabilities

    (1,184)(792)(2,727)(2,007)Deferred revenue

    439(330)409(237)Net cash provided by operating activities

    11,1344,60817,49214,101Cash flows from investing activities:Purchases of available-for-sale securities

    (2,997)(2,994)(8,489)(13,489)Sales and maturities of available-for-sale securities

    2,99613,07019,63243,075Purchase of property and equipment

    (6,914)(2,152)(15,136)(7,509)Business acquisition consideration, net of cash acquired

    -(48,277)-(48,277)Purchase of cost method investment

    -(1,000)-(1,000)Proceeds from sale of assets

    9,533-9,564-Acquired technology rights

    -(51)(930)(342)Net cash provided by (used in) investing activities

    2,618(41,404)4,641(27,542)Cash flows from financing activities:Payments on debt

    --(1,105)(1,025)Proceeds from employee stock plans and issuance of common stock

    5,9738617,8913,224Payments for stock repurchases

    -(11,036)(14,343)(20,916)Excess income tax (expense) benefit from employee stock-based awards

    15(590)(274)2,183Net cash provided by (used in) financing activities

    5,988(10,765)(7,831)(16,534)Effect of foreign currency exchange rate on cash

    (49)14978179Change in cash and cash equivalents

    19,691(47,412)14,380(29,796)Cash and cash equivalents, beginning of period

    37,47875,89842,78958,282Cash and cash equivalents, end of period

    $57,169$28,486$57,169$28,486 LUMINEX CORPORATIONNON-GAAP RECONCILIATION(in thousands)Three Months EndedNine Months EndedSeptember 30,September 30,2013201220132012(unaudited)(unaudited)Net income

    $   796$1,676$  1,980$  8,155Stock-based compensation

    1,8892,3386,7337,552Amortization of acquired intangible assets

    1,0211,0303,0773,214Costs associated with legal proceedings

    105-358-Resolution of molecular diagnostic distribution agreements

    --7,000-Acquisition and severance costs

    2162,8951,0313,419Restructuring costs

    4,343-4,343-Gain on sale of cost method equity investment

    (5,452)-(5,452)-Contingent consideration adjustments

    (1,220)-(1,370)-Income tax effect of above adjusting items

    637(1,518)(376)(2,993)Adjusted net income

    $2,335$6,421$17,324$19,347Adjusted net income per share, basic

    $  0.06$  0.16$
    .47Shares used in computing adjusted net income per share, basic

    40,75241,00040,71240,995Adjusted net income per share, diluted

    $  0.06$  0.15$
    .46Shares used in computing adjusted net income per share, diluted

    41,91941,88741,77142,117The 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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