LUMINEX CORP - FORM 8-K - EX-99.1 - EXHIBIT 99.1 - October 29, 2012

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Exhibit 99.1

Luminex Corporation Reports Third Quarter 2012 Results

AUSTIN, Texas (October 29, 2012) - 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

“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 Paralymic 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

 
 
 
 
 
 
 
 



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