LUMINEX CORP - FORM 8-K - EX-99.1 - EXHIBIT 99.1 - July 28, 2014

Attached files

file filename
8-K - FORM 8-K - LUMINEX CORPa2014-q2form8xk.htm


Exhibit 99.1



LUMINEX CORPORATION REPORTS SECOND QUARTER 2014 RESULTS

AUSTIN, Texas (July 28, 2014) - 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 Ended
 
 
 
 
 
June 30,
 
Variance
 
2014
 
2013
 
($)
 
(%)
 
(unaudited)
 
 
 
 
 
 
 
 
 
 
 
 
System sales
$
8,304

 
$
7,647

 
$
657

 
9
 %
Consumable sales
12,629

 
11,750

 
879

 
7
 %
Royalty revenue
9,476

 
8,578

 
898

 
10
 %
Assay revenue
19,886

 
21,699

 
(1,813
)
 
(8
)%
All other revenue
5,337

 
4,613

 
724

 
16
 %
 
$
55,632

 
$
54,287

 
$
1,345

 
2
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Six Months Ended
 
 
 
 
 
June 30,
 
Variance
 
2014
 
2013
 
($)
 
(%)
 
(unaudited)
 
 
 
 
 
 
 
 
 
 
 
 
System sales
$
14,704

 
$
14,204

 
$
500

 
4
 %
Consumable sales
25,397

 
23,647

 
1,750

 
7
 %
Royalty revenue
19,525

 
18,687

 
838

 
4
 %
Assay revenue
41,546

 
40,023

 
1,523

 
4
 %
All other revenue
11,021

 
10,926

 
95

 
1
 %
 
$
112,193

 
$
107,487

 
$
4,706

 
4
 %
 
 
 
 
 
 
 
 

  
“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 CORPORATION
REPORTABLE SEGMENT HIGHLIGHTS
(in thousands, except percentages)
 
 
Three Months Ended
 
 
 
 
 
 
June 30,
 
Variance
 
 
2014
 
2013
 
($)
 
(%)
 
 
(unaudited)
 
 
 
 
Revenue
 
 
 
 
 
 
 
Technology and strategic partnerships
$
33,388

 
$
31,148

 
$
2,240

 
7
 %
Assays and related products
22,244

 
23,139

 
(895
)
 
(4
)%
Total Revenue
55,632

 
54,287

 
1,345

 
2
 %
 
 
 
 
 
 
 
 
 
Operating income (loss)
 
 
 
 
 
 
 
Technology and strategic partnerships
8,622

 
6,394

 
2,228

 
35
 %
Assays and related products
(3,851
)
 
(1,353
)
 
(2,498
)
 
(185
)%
Total Operating income
4,771

 
5,041

 
(270
)
 
(5
)%
 
 
 
 
 
 
 
 
 
 
 
Six Months Ended
 
 
 
 
 
 
June 30,
 
Variance
 
 
2014
 
2013
 
($)
 
(%)
 
 
(unaudited)
 
 
 
 
Revenue
 
 
 
 
 
 
 
Technology and strategic partnerships
$
65,449

 
$
63,017

 
$
2,432

 
4
 %
Assays and related products
46,744

 
44,470

 
2,274

 
5
 %
Total Revenue
112,193

 
107,487

 
4,706

 
4
 %
 
 
 
 
 
 
 
 
 
Operating income (loss)
 
 
 
 
 
 
 
Technology and strategic partnerships
18,556

 
14,075

 
4,481

 
32
 %
Assays and related products
(5,600
)
 
(10,586
)
 
4,986

 
47
 %
Total Operating income
12,956

 
3,489

 
9,467

 
271
 %


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 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: 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 CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
 
 
 
 
 
June 30,
 
December 31,
 
2014
 
2013
 
(unaudited)
 
 
ASSETS
 
 
 
Current assets:
 
 
 
Cash and cash equivalents
$
86,710

 
$
67,924

Short-term investments
3,000

 
4,517

Accounts receivable, net
27,573

 
30,948

Inventories, net
31,163

 
30,487

Deferred income taxes
4,719

 
7,265

Prepaids and other
4,338

 
5,229

Total current assets
157,503

 
146,370

Property and equipment, net
33,788

 
32,793

Intangible assets, net
58,311

 
60,295

Deferred income taxes
11,913

 
11,913

Goodwill
50,881

 
50,738

Other
3,987

 
3,937

Total assets
$
316,383

 
$
306,046

LIABILITIES AND STOCKHOLDERS' EQUITY
 
 
 
Current liabilities:
 
 
 
Accounts payable
$
8,938

 
$
10,698

Accrued liabilities
8,907

 
11,624

Deferred revenue
4,862

 
4,980

Current portion of long term debt
—

 
1,194

Total current liabilities
22,707

 
28,496

Long-term debt
—

 
463

Deferred revenue
2,610

 
2,482

Other
5,216

 
4,985

Total liabilities
30,533

 
36,426

Stockholders' equity:
 
 
 
Common stock
42

 
41

Additional paid-in capital
302,872

 
296,931

Accumulated other comprehensive gain
16

 
419

Accumulated deficit
(17,080
)
 
(27,771
)
Total stockholders' equity
285,850

 
269,620

Total liabilities and stockholders' equity
$
316,383

 
$
306,046

 
 
 
 





LUMINEX CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
 
 
 
 
 
 
 
 
 
Three Months Ended
 
Six Months Ended
 
June 30,
 
June 30,
 
2014
 
2013
 
2014
 
2013
 
(unaudited)
 
(unaudited)
 
 
 
 
 
 
 
 
Revenue
$
55,632

 
$
54,287

 
$
112,193

 
$
107,487

Cost of revenue
17,485

 
16,230

 
34,092

 
31,473

Gross profit
38,147

 
38,057

 
78,101

 
76,014

Operating expenses:
 
 
 
 
 
 
 
Research and development
11,308

 
11,792

 
22,392

 
24,506

Selling, general and administrative
20,970

 
20,197

 
40,415

 
45,963

Amortization of acquired intangible assets
965

 
1,027

 
1,985

 
2,056

Restructuring costs
133

 
—

 
353

 
—

Total operating expenses
33,376

 
33,016

 
65,145

 
72,525

Income from operations
4,771

 
5,041

 
12,956

 
3,489

Interest expense from long-term debt
—

 
(23
)
 
(6
)
 
(51
)
Other expense, net
(1
)
 
99

 
(20
)
 
92

Income before income taxes
4,770

 
5,117

 
12,930

 
3,530

Income taxes
(45
)
 
(1,422
)
 
(2,239
)
 
(2,346
)
Net income
$
4,725

 
$
3,695

 
$
10,691

 
$
1,184

 
 
 
 
 
 
 
 
Net income per share, basic
$
0.11

 
$
0.09

 
$
0.26

 
$
0.03

Shares used in computing net income per share, basic
41,560

 
40,497

 
41,384

 
40,693

 
 
 
 
 
 
 
 
Net income per share, diluted
$
0.11

 
$
0.09

 
$
0.26

 
$
0.03

Shares used in computing net income per share, diluted
42,125

 
41,444

 
41,863

 
41,541

 
 
 
 
 
 
 
 





LUMINEX CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
 
 
 
 
 
 
 
 
 
Three Months Ended
 
Six Months Ended
 
June 30,
 
June 30,
 
2014
 
2013
 
2014
 
2013
 
(unaudited)
 
(unaudited)
Cash flows from operating activities:
 
 
 
 
 
 
 
Net income
$
4,725

 
$
3,695

 
$
10,691

 
$
1,184

Adjustments to reconcile net income to net cash provided by (used in) operating activities:
 
 
 
 
 
 
 
Depreciation and amortization
3,607

 
3,949

 
7,535

 
7,753

Stock-based compensation
2,801

 
2,412

 
4,430

 
4,844

Deferred income tax expense
1,842

 
726

 
2,520

 
1,426

Excess income tax expense from employee stock-based awards
—

 
15

 
—

 
289

Loss on disposal of assets
178

 
65

 
183

 
83

Non-cash restructuring charges
424

 
—

 
1,196

 
—

Other
(140
)
 
(1,279
)
 
(332
)
 
(1,081
)
Changes in operating assets and liabilities:
 
 
 
 
 
 
 
Accounts receivable, net
(478
)
 
(6,403
)
 
3,539

 
1,692

Inventories, 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
)
 
21,664

 
6,358

Cash flows from investing activities:
 
 
 
 
 
 
 
Purchases of available-for-sale securities
—

 
(2,497
)
 
(2,996
)
 
(5,492
)
Sales and maturities of available-for-sale securities
1,516

 
3,603

 
4,513

 
16,636

Purchase of property and equipment
(3,150
)
 
(5,431
)
 
(6,255
)
 
(8,222
)
Proceeds from sale of assets
39

 
—

 
39

 
31

Acquired technology rights
(64
)
 
—

 
(64
)
 
(930
)
Net cash (used in) provided by investing activities
(1,659
)
 
(4,325
)
 
(4,763
)
 
2,023

Cash flows from financing activities:
 
 
 
 
 
 
 
Payments on debt
(1,621
)
 
(1,105
)
 
(1,621
)
 
(1,105
)
Proceeds from issuance of common stock
2,378

 
517

 
3,480

 
1,918

Payments 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
)
 
346

 
26

 
127

Change in cash and cash equivalents
9,324

 
(16,811
)
 
18,786

 
(5,311
)
Cash and cash equivalents, beginning of period
77,386

 
54,289

 
67,924

 
42,789

Cash and cash equivalents, end of period
$
86,710

 
$
37,478

 
$
86,710

 
$
37,478





LUMINEX CORPORATION
NON-GAAP RECONCILIATION
(in thousands)
 
 
 
 
 
 
 
 
 
Three Months Ended
 
Six Months Ended
 
June 30,
 
June 30,
 
2014
 
2013
 
2014
 
2013
 
(unaudited)
 
(unaudited)
 
 
 
 
 
 
 
 
Income from operations
$
4,771

 
$
5,041

 
$
12,956

 
$
3,489

 
 
 
 
 
 
 
 
Stock-based compensation
2,801

 
2,412

 
4,430

 
4,844

Amortization of acquired intangible assets
965

 
1,027

 
1,985

 
2,056

Costs associated with legal proceedings
810

 
140

 
1,600

 
253

Resolution of molecular diagnostic distribution agreements
—

 
—

 
—

 
7,000

Severance costs
—

 
485

 
45

 
815

Restructuring costs
510

 
—

 
1,320

 
—

 
 
 
 
 
 
 
 
Adjusted income from operations
$
9,857

 
$
9,105

 
$
22,336

 
$
18,457

 
 
 
 
 
 
 
 
Interest expense from long-term debt
—

 
(23
)
 
(6
)
 
(51
)
Other income, net
(1
)
 
99

 
(20
)
 
92

Contingent 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

 
$
14,989

 
 
 
 
 
 
 
 
Adjusted net income per share, basic
$
0.20

 
$
0.18

 
$
0.44

 
$
0.37

 
 
 
 
 
 
 
 
Shares used in computing adjusted net income per share, basic
41,560

 
40,497

 
41,384

 
40,693

 
 
 
 
 
 
 
 
Adjusted net income per share, diluted
$
0.20

 
$
0.17

 
$
0.44

 
$
0.35

 
 
 
 
 
 
 
 
Shares used in computing adjusted net income per share, diluted
42,125

 
42,307

 
41,863

 
42,404


The 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.


Stock widget

Investing forum

LUMINEX CORP Reports