LUMINEX CORP - FORM 8-K - EX-99.1 - EXHIBIT - February 4, 2013

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Exhibit 99.1

LUMINEX CORPORATION REPORTS FOURTH QUARTER
AND FULL YEAR 2012 RESULTS

AUSTIN, Texas (February 4, 2013) - Luminex Corporation (NASDAQ:LMNX) today announced financial results for the fourth quarter and year ended December 31, 2012. Financial and operating highlights include the following:

•
Consolidated fourth quarter revenue of $55.5 million, a 16 percent increase over the fourth quarter of 2011; full-year 2012 revenue was $202.6 million, a 10 percent increase over 2011
•
Fourth quarter assay revenue of $23.8 million, a 45 percent increase over the fourth quarter of 2011; full-year 2012 assay revenue was $75.0 million, a 54 percent increase over 2011
•
Fourth quarter shipments of 226 multiplexing analyzers; cumulative life-to-date multiplexing analyzer shipments are 9,659
•
Achieved a consolidated gross profit margin in the fourth quarter of 71 percent
•
Operating income for the fourth quarter of 2012 was $7.3 million. Non-GAAP operating income for the fourth quarter of 2012 was $8.6 million, excluding approximately $1.3 million of expenses related to integration costs associated with the purchase of GenturaDx (see Non-GAAP reconciliation)
•
GAAP net income for the fourth quarter and full-year of 2012 was $4.3 million and $12.4 million, or $0.10 and $0.30 per diluted share, respectively. Excluding the certain one-time costs associated with a strategic study and costs associated with the acquisition of Gentura Dx, non-GAAP net income for the fourth quarter and 2012 was $5.1 million and $16.2 million or $0.12 and $0.39 per diluted share, respectively (see Non-GAAP reconciliation)


“We are pleased with our fourth quarter execution, driven by another excellent performance in our proprietary assay segment. This performance reflects our unwavering focus on providing our customers with innovative, first-to-market assays that make a difference to patient outcomes. 2013 will be similar, as we received FDA clearance for our xTAG Gastrointestinal Pathogen Panel (GPP) in early January. This molecular diagnostic assay tests for greater than 90% of bacterial, viral, and parasitic causes of infectious gastroenteritis, a worldwide market we estimate at over $150 million. We believe this important assay will contribute meaningfully to the company's long-term growth,” said Patrick J. Balthrop, president and chief executive officer of Luminex.

“We are also excited about the company taking its next evolutionary step forward in serving our molecular diagnostic customers directly. We have planned this transition for some time and I am confident in our ability to execute on this plan. So with this powerful combination of unique platforms, differentiated test menu, a strong direct sales force and our focus on the customer, we are excited about the prospects in 2013 and beyond,” Balthrop concluded.

 






REVENUE SUMMARY
(in thousands, except percentages)

 
Three Months Ended
 
 
 
 
 
December 31,
 
Variance
 
2012
 
2011
 
($)
 
(%)
 
(unaudited)
 
 
 
 
 
 
 
 
 
 
 
 
System sales
$
7,149

 
$
10,449

 
$
(3,300
)
 
(32
)%
Consumable sales
12,412

 
10,093

 
2,319

 
23
 %
Royalty revenue
7,513

 
7,087

 
426

 
6
 %
Assay revenue
23,774

 
16,401

 
7,373

 
45
 %
All other revenue
4,687

 
3,839

 
848

 
22
 %
 
$
55,535

 
$
47,869

 
$
7,666

 
16
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Twelve Months Ended
 
 
 
 
 
December 31,
 
Variance
 
2012
 
2011
 
($)
 
(%)
 
(unaudited)
 
 
 
 
 
 
 
 
 
 
 
 
System sales
$
31,083

 
$
35,901

 
$
(4,818
)
 
(13
)%
Consumable sales
48,012

 
55,457

 
(7,445
)
 
(13
)%
Royalty revenue
31,160

 
29,205

 
1,955

 
7
 %
Assay revenue
75,020

 
48,670

 
26,350

 
54
 %
All other revenue
17,307

 
15,106

 
2,201

 
15
 %
 
$
202,582

 
$
184,339

 
$
18,243

 
10
 %
 
 
 
 
 
 
 
 


 








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

 
Three Months Ended
 
 
 
 
 
December 31,
 
Variance
 
2012
 
2011
 
($)
 
(%)
 
(unaudited)
 
 
 
 
Revenue
 
 
 
 
 
 
 
Technology and strategic partnerships
$
29,674

 
$
29,715

 
$
(41
)
 
—
 %
Assays and related products
25,861

 
18,154

 
7,707

 
42
 %
Total Revenue
55,535

 
47,869

 
7,666

 
16
 %
 
 
 
 
 
 
 
 
Operating income (loss)
 
 
 
 
 
 
 
Technology and strategic partnerships
2,325

 
4,239

 
(1,914
)
 
(45
)%
Assays and related products
4,930

 
(307
)
 
5,237

 
1,706
 %
Total Operating income
7,255

 
3,932

 
3,323

 
85
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Twelve Months Ended
 
 
 
 
 
December 31,
 
Variance
 
2012
 
2011
 
($)
 
(%)
 
(unaudited)
 
 
 
 
Revenue
 
 
 
 
 
 
 
Technology and strategic partnerships
$
121,032

 
$
127,779

 
$
(6,747
)
 
(5
)%
Assays and related products
81,550

 
56,560

 
24,990

 
44
 %
Total Revenue
202,582

 
184,339

 
18,243

 
10
 %
 
 
 
 
 
 
 
 
Operating income (loss)
 
 
 
 
 
 
 
Technology and strategic partnerships
15,047

 
29,895

 
(14,848
)
 
(50
)%
Assays and related products
7,669

 
(6,052
)
 
13,721

 
227
 %
Total Operating income
22,716

 
23,843

 
(1,127
)
 
(5
)%
 
 
 
 
 
 
 
 


“In the fourth 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.  “Our 2013 revenue guidance takes into account our current progress combined with a cautiously optimistic view of the macro environment.”


FINANCIAL OUTLOOK AND GUIDANCE

The Company intends to provide annual revenue guidance, to be updated, as appropriate, at each quarterly reporting period. Guidance for fiscal 2013 is as follows:

•
The Company expects fiscal 2013 revenue to be between $220 million to $230 million, or an increase of between 9 to 14 percent over reported 2012 revenue.






CONFERENCE CALL

Management will host a conference call to discuss the operating highlights and financial results for the fourth quarter ended December 31, 2012, on Monday, February 4, 2013, 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 Gastrointestinal Pathogen Panel (GPP) and products developed and manufactured by Luminex Madison and Luminex Molecular Diagnostics; direct sales of our molecular diagnostic products to customers and transition from our distribution partners; FDA clearance of our products, including GPP, the acquisition of GenturaDx and the status of the integration; Luminex's long-term strategic plan; 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 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, ability to effectively develop, manufacture, market and sell our products; ability to obtain regulatory clearance for 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 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)
 
 
 
 
 
December 31,
 
December 31,
 
2012
 
2011
 
(unaudited)
 
 
ASSETS
 
 
 
Current assets:
 
 
 
Cash and cash equivalents
$
42,789

 
$
58,282

Restricted cash
—

 
1,006

Short-term investments
13,607

 
42,574

Accounts receivable, net
33,273

 
23,016

Inventories, net
29,937

 
24,579

Deferred income taxes
6,148

 
5,991

Prepaids and other
4,388

 
3,529

 
 
 
 
Total current assets
130,142

 
158,977

 
 
 
 
Property and equipment, net
26,229

 
25,192

Intangible assets, net
65,218

 
29,437

Deferred income taxes
12,819

 
12,817

Long-term investments
3,000

 
6,151

Goodwill
51,128

 
42,763

Other
8,463

 
7,310

 
 
 
 
Total assets
$
296,999

 
$
282,647

 
 
 
 
LIABILITIES AND STOCKHOLDERS' EQUITY
 
 
 
Current liabilities:
 
 
 
Accounts payable
$
9,650

 
$
5,941

Accrued liabilities
12,690

 
11,047

Deferred revenue
4,134

 
4,057

Current portion of long term debt
1,138

 
999

 
 
 
 
Total current liabilities
27,612

 
22,044

 
 
 
 
Long-term debt
1,702

 
2,573

Deferred revenue
2,933

 
3,344

Other
5,085

 
3,831

 
 
 
 
Total liabilities
37,332

 
31,792

 
 
 
 
Stockholders' equity:
 
 
 
Common stock
41

 
41

Additional paid-in capital
293,392

 
297,104

Accumulated other comprehensive gain
1,101

 
984

Accumulated deficit
(34,867
)
 
(47,274
)
 
 
 
 
Total stockholders' equity
259,667

 
250,855

 
 
 
 
Total liabilities and stockholders' equity
$
296,999

 
$
282,647

 
 
 
 





LUMINEX CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended
 
Twelve Months Ended
 
December 31,
 
December 31,
 
2012
 
2011
 
2012
 
2011
 
(unaudited)
 
(unaudited)
 
 
 
 
 
 
 
 
 
 
Revenue
$
55,535

 
$
47,869

 
$
202,582

 
$
184,339

Cost of revenue
16,178

 
15,350

 
60,008

 
58,849

 
 
 
 
 
 
 
 
Gross profit
39,357

 
32,519

 
142,574

 
125,490

 
 
 
 
 
 
 
 
Operating expenses:
 
 
 
 
 
 
 
Research and development
10,990

 
9,882

 
40,775

 
33,394

Selling, general and administrative
20,083

 
17,610

 
74,840

 
64,878

Amortization of acquired intangible assets
1,029

 
1,095

 
4,243

 
3,375

 
 
 
 
 
 
 
 
Total operating expenses
32,102

 
28,587

 
119,858

 
101,647

 
 
 
 
 
 
 
 
Income from operations
7,255

 
3,932

 
22,716

 
23,843

Interest expense from long-term debt
(36
)
 
(73
)
 
(198
)
 
(308
)
Other income, net
138

 
107

 
262

 
394

 
 
 
 
 
 
 
 
Income before income taxes
7,357

 
3,966

 
22,780

 
23,929

Income taxes
(3,105
)
 
(524
)
 
(10,373
)
 
(9,455
)
 
 
 
 
 
 
 
 
Net income
$
4,252

 
$
3,442

 
$
12,407

 
$
14,474

 
 
 
 
 
 
 
 
Net income per share, basic
$
0.10

 
$
0.08

 
$
0.30

 
$
0.35

 
 
 
 
 
 
 
 
Shares used in computing net income per share, basic
40,724

 
41,153

 
40,927

 
41,262

 
 
 
 
 
 
 
 
Net income per share, diluted
$
0.10

 
$
0.08

 
$
0.30

 
$
0.34

 
 
 
 
 
 
 
 
Shares used in computing net income per share, diluted
41,332

 
42,376

 
41,884

 
42,537

 
 
 
 
 
 
 
 





LUMINEX CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
 
 
 
 
 
 
 
 
 
Three Months Ended
 
Twelve Months Ended
 
December 31,
 
December 31,
 
2012
 
2011
 
2012
 
2011
 
(unaudited)
 
(unaudited)
 
 
Cash flows from operating activities:
 
 
 
 
 
 
 
Net income
$
4,252

 
$
3,442

 
$
12,407

 
$
14,474

Adjustments to reconcile net income to net cash provided by operating activities:
 
 
 
 
 
 
 
Depreciation and amortization
3,696

 
3,462

 
14,364

 
11,887

Stock-based compensation
2,363

 
3,116

 
9,915

 
11,417

Deferred income tax expense (benefit)
(217
)
 
(2,058
)
 
2,699

 
(592
)
Excess income tax expense (benefit) from employee stock-based awards
(4,274
)
 
(1,269
)
 
(6,457
)
 
(7,614
)
Other
502

 
354

 
1,157

 
232

Changes in operating assets and liabilities:
 
 
 
 
 
 
 
Accounts receivable, net
(2,041
)
 
(2,303
)
 
(10,267
)
 
(899
)
Inventories, net
(2,742
)
 
1,410

 
(5,346
)
 
4,783

Other assets
1,677

 
(575
)
 
(617
)
 
(1,279
)
Accounts payable
1,580

 
(786
)
 
3,286

 
(2,680
)
Accrued liabilities
5,470

 
5,131

 
3,463

 
9,324

Deferred revenue
(84
)
 
(283
)
 
(321
)
 
(763
)
 
 
 
 
 
 
 
 
Net cash provided by operating activities
10,182

 
9,641

 
24,283

 
38,290

 
 
 
 
 
 
 
 
Cash flows from investing activities:
 
 
 
 
 
 
 
Purchases of available-for-sale securities
(1,498
)
 
(13,474
)
 
(14,987
)
 
(47,743
)
Sales and maturities of available-for-sale securities
4,042

 
8,037

 
47,117

 
33,753

Purchase of property and equipment
(2,258
)
 
(2,434
)
 
(9,767
)
 
(9,554
)
Business acquisition consideration, net of cash acquired
78

 
—

 
(48,199
)
 
(33,914
)
Purchase of cost method investment
—

 
—

 
(1,000
)
 
(2,000
)
Acquired technology rights
(1,250
)
 
(1,331
)
 
(1,592
)
 
(1,857
)
 
 
 
 
 
 
 
 
Net cash used in investing activities
(886
)
 
(9,202
)
 
(28,428
)
 
(61,315
)
 
 
 
 
 
 
 
 
Cash flows from financing activities:
 
 
 
 
 
 
 
Payments on debt
—

 
—

 
(1,025
)
 
(885
)
Proceeds from employee stock plans and issuance of common stock
798

 
109

 
4,022

 
3,543

Payments for stock repurchases
—

 
(8,600
)
 
(20,916
)
 
(18,340
)
Excess income tax (expense) benefit from employee stock-based awards
4,274

 
1,269

 
6,457

 
7,614

 
 
 
 
 
 
 
 
Net cash provided by (used in) financing activities
5,072

 
(7,222
)
 
(11,462
)
 
(8,068
)
 
 
 
 
 
 
 
 
Effect of foreign currency exchange rate on cash
(65
)
 
(16
)
 
114

 
(112
)
Change in cash and cash equivalents
14,303

 
(6,799
)
 
(15,493
)
 
(31,205
)
Cash and cash equivalents, beginning of period
28,486

 
65,081

 
58,282

 
89,487

 
 
 
 
 
 
 
 
Cash and cash equivalents, end of period
$
42,789

 
$
58,282

 
$
42,789

 
$
58,282

 
 
 
 
 
 
 
 




LUMINEX CORPORATION
NON-GAAP RECONCILIATION
(in thousands)
 
 
 
 
 
 
 
 
 
Three Months Ended
 
Twelve Months Ended
 
December 31,
 
December 31,
 
2012
 
2012
 
(unaudited)
 
(unaudited)
 
 
 
 
Income from operations
$
7,255

 
$
22,716

 
 
 
 
Strategic study consulting costs
—

 
1,096

 
 
 
 
GDx acquisition related costs
1,297

 
4,263

 
 
 
 
Adjusted income from operations
$
8,552

 
$
28,075

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income
$
4,252

 
$
12,407

 
 
 
 
Strategic study consulting costs
—

 
1,096

 
 
 
 
GDx acquisition related costs
1,297

 
4,263

 
 
 
 
Income tax effect of the above items
(404
)
 
(1,588
)
 
 
 
 
Adjusted net income
$
5,145

 
$
16,178

 
 
 
 
Adjusted net income per share, basic
$
0.13

 
$
0.40

 
 
 
 
Shares used in computing adjusted net income per share, basic
40,724

 
40,927

 
 
 
 
Adjusted net income per share, diluted
$
0.12

 
$
0.39

 
 
 
 
Shares used in computing adjusted net income per share, diluted
41,332

 
41,884

 
 
 
 


The Company makes reference in this release to “non-GAAP operating income” and “non-GAAP net income” which exclude the impact of acquisition and strategic study consulting 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.





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