EX-99.1 2 a2015-q2form8xkexhibit991.htm EXHIBIT 99.1 2015-Q2 Form 8-K Exhibit 99.1


Exhibit 99.1

LUMINEX CORPORATION REPORTS RECORD 2ND QUARTER 2015 RESULTS


AUSTIN, Texas (August 3, 2015) - Luminex Corporation (NASDAQ:LMNX) today announced financial results for the second quarter ended June 30, 2015. Financial and operating highlights for the quarter include the following:

Increased second quarter 2015 revenue by 6 percent to $58.9 million, over the second quarter of 2014.
Grew second quarter 2015 assay revenue by 22 percent to $24.2 million over results from the second quarter of 2014.
Increased Q2 2015 royalty revenue by 17 percent to $11.1 million over the second quarter of 2014.
Increased gross profit margin to 73 percent for the second quarter of 2015, up 4 points from the second quarter of 2014.
Settled the litigation with Enzo Life Sciences, Inc. ("Enzo"), resulting in an expense of $7.1 million. The after-tax impact of the settlement decreased second quarter net earnings by approximately $0.12 per diluted share.
Delivered GAAP net income for the second quarter of $2.6 million, including the effect of the litigation settlement, or $0.06 per diluted share. Non-GAAP net income for the second quarter was $11.6 million, or $0.27 per diluted share (see Non-GAAP reconciliation).
Improved in operating profit for the quarter by over 100% as a result of expanding revenues and expense control
Submitted 510(k) applications to the FDA for approval of the ARIES® System and ARIES® HSV 1&2 Assay in July after the second quarter’s close.

“Our second quarter results reflect the Company’s strong performance across its business, including achieving the highest level of quarterly revenue in the Company’s history. In particular both our molecular diagnostic assay franchise and royalty revenues contributed significantly to that success. Accompanying the increase in revenues were excellent margins, significant profitability and positive cash flow.” said Homi Shamir, President and Chief Executive Officer of Luminex. “We are also very pleased with the progress achieved this year in advancing our pipeline of transformational products, highlighted by the FDA submission in early July of our sample-to-answer platform, ARIES, and our first assay, HSV 1&2.  We currently expect FDA approval before year-end and are accelerating our preparations for the commercial launch of ARIES as well as preparing for additional assay submissions to the FDA.”









REVENUE SUMMARY
(in thousands, except percentages)

 
Three Months Ended
 
 
 
 
 
June 30,
 
Variance
 
2015
 
2014
 
($)
 
(%)
 
(unaudited)
 
 
 
 
 
 
 
 
 
 
 
 
System sales
 $ 6,543
 
 $ 8,304
 
 $ (1,761)
 
(21
)%
Consumable sales
            11,878
 
            12,629
 
          (751)
 
(6
)%
Royalty revenue
            11,073
 
             9,476
 
        1,597
 
17
 %
Assay revenue
            24,238
 
            19,886
 
        4,352
 
22
 %
All other revenue
             5,185
 
             5,337
 
          (152)
 
(3
)%
 
 $ 58,917
 
 $ 55,632
 
 $ 3,285
 
6
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Six Months Ended
 
 
 
 
 
June 30,
 
Variance
 
2015
 
2014
 
($)
 
(%)
 
(unaudited)
 
 
 
 
 
 
 
 
 
 
 
 
System sales
 $ 12,507
 
 $ 14,704
 
 $ (2,197)
 
(15
)%
Consumable sales
            21,774
 
            25,397
 
       (3,623)
 
(14
)%
Royalty revenue
            21,775
 
            19,525
 
        2,250
 
12
 %
Assay revenue
            49,684
 
            41,546
 
        8,138
 
20
 %
All other revenue
            10,918
 
            11,021
 
          (103)
 
(1
)%
 
 $ 116,658
 
 $ 112,193
 
 $ 4,465
 
4
 %
 
 
 
 
 
 
 
 


Additional Financial Highlights:

Infectious disease assay sales were approximately 66 percent of total assay sales for the quarter and genetic testing assays were 34 percent.
Royalty revenues reflect total royalty-bearing end-user sales for the quarter of $122.0 million.
234 multiplexing analyzers were shipped during the quarter, which included 119 MAGPIX systems, 94 LX systems, and 21 FLEXMAP 3D systems.
Cash and investments at quarter-end totaled $127.1 million.
Days sales outstanding (DSO) was 34 days at quarter-end.


FINANCIAL OUTLOOK AND GUIDANCE

The Company updates its revenue guidance range for the full-year 2015 to between $232 million and $236 million and anticipates third quarter 2015 revenue to be between $56 million and $58 million.







CONFERENCE CALL

Management will host a conference call at 3:30 p.m. CST/4:30 p.m. EST, Monday, August 3, 2015 to discuss the operating highlights and financial results for the second quarter ended June 30, 2015. The conference call will be webcast live and 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 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 of multiplexing systems; the development progress of our pipeline products, including ARIES and NxTAG products, market acceptance of our products, including instruments, consumables and assays, regulatory clearance of our products; the ability of our investment in current initiatives and new products to drive long-term value for our shareholders; and, projected 2015 performance, including revenue guidance. 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’ products and technology in development, including ARIES and NxTAG, the uncertainty relating to increased focus on direct sales to the end user, dependence on strategic partners for development, commercialization and distribution of products, concentration of Luminex’ revenue in a limited number of direct customers and strategic partners, some of which may be experiencing decreased demand for their products utilizing or incorporating Luminex’ technology, budget or finance constraints in the current economic environment, or periodic variability in their purchasing patterns or practices as a result of material resource planning challenges, the timing of and process for regulatory approvals, the impact of the ongoing uncertainty in global finance markets and changes in governmental funding, including its effects on the capital spending policies of Luminex’ partners and end users and their ability to finance purchases of Luminex’ products, fluctuations in quarterly results due to a lengthy and unpredictable sales cycle, fluctuations in bulk purchases of consumables, fluctuations in product mix, and the seasonal nature of some of Luminex’ assay products, Luminex’ ability to obtain and enforce intellectual property protections on Luminex’ products and technologies, risks and uncertainties associated with implementing Luminex’ acquisition strategy, including Luminex’ ability to obtain financing, Luminex’ ability to integrate acquired companies or selected assets into Luminex’ consolidated business operations, and the ability to recognize the benefits of Luminex’ acquisitions, reliance on third party distributors for distribution of specific Luminex-developed and manufactured assay products, Luminex’ ability to scale manufacturing operations and manage operating expenses, gross margins and inventory levels, changes in principal members of Luminex’ management staff, potential shortages, or increases in costs, of components or other disruptions to Luminex’ manufacturing operations, competition and competitive technologies utilized by Luminex’ competitors, Luminex’ ability to successfully launch new products in a timely manner, Luminex’ increasing dependency on information technology to enable Luminex to improve the effectiveness of Luminex’ operations and to monitor financial accuracy and efficiency, the implementation, including any modification, of Luminex’ strategic operating plans, the uncertainty regarding the outcome or expense of any litigation brought against or initiated by Luminex, and risks relating to Luminex’ foreign operations, including fluctuations in exchange rates, tariffs, customs and other barriers to importing/exporting materials and products in a cost effective and timely manner; difficulties in accounts receivable collections; the burden of monitoring and complying with foreign and international laws and treaties; and the burden of complying with and change in international taxation policies, 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 2015 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,
 
2015
 
2014
 
(unaudited)
 
 
ASSETS
 
 
 
Current assets:
 
 
 
Cash and cash equivalents
$
111,064

 
$
91,694

Short-term investments
10,003

 

Accounts receivable, net
22,177

 
28,272

Inventories, net
32,598

 
36,616

Deferred income taxes
6,217

 
12,203

Prepaids and other
10,672

 
8,235

Total current assets
192,731

 
177,020

Property and equipment, net
47,903

 
39,945

Intangible assets, net
54,704

 
56,382

Deferred income taxes
15,121

 
15,400

Long-term investments
6,005

 
15,975

Goodwill
49,619

 
49,619

Other
2,949

 
3,185

Total assets
$
369,032

 
$
357,526

LIABILITIES AND STOCKHOLDERS' EQUITY
 
 
 
Current liabilities:
 
 
 
Accounts payable
$
8,045

 
$
11,841

Accrued liabilities
17,305

 
14,118

Deferred revenue
4,410

 
4,407

Total current liabilities
29,760

 
30,366

Deferred revenue
2,117

 
2,297

Other
4,763

 
4,869

Total liabilities
36,640

 
37,532

Stockholders' equity:
 
 
 
Common stock
42

 
42

Additional paid-in capital
312,073

 
309,424

Accumulated other comprehensive loss
(1,077
)
 
(744
)
Retained earnings
21,354

 
11,272

Total stockholders' equity
332,392

 
319,994

Total liabilities and stockholders' equity
$
369,032

 
$
357,526

 
 
 
 






LUMINEX CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
 
 
 
 
 
 
 
 
 
Three Months Ended
 
Six Months Ended
 
June 30,
 
June 30,
 
2015
 
2014
 
2015
 
2014
 
(unaudited)
 
(unaudited)
 
 
 
 
 
 
 
 
Revenue
$
58,917

 
$
55,632

 
$
116,658

 
$
112,193

Cost of revenue
15,647

 
17,485

 
33,169

 
34,092

Gross profit
43,270

 
38,147

 
83,489

 
78,101

Operating expenses:
 
 
 
 
 
 
 
Research and development
11,510

 
11,308

 
21,655

 
22,392

Selling, general and administrative
21,025

 
20,970

 
40,504

 
40,415

Amortization of acquired intangible assets
776

 
965

 
1,678

 
1,985

Restructuring costs

 
133

 

 
353

Total operating expenses
33,311

 
33,376

 
63,837

 
65,145

Income from operations
9,959

 
4,771

 
19,652

 
12,956

Interest expense from long-term debt

 

 

 
(6
)
Other income, net
57

 
(1
)
 
951

 
(20
)
Settlement of litigation
(7,100
)
 

 
(7,300
)
 

Income before income taxes
$
2,916

 
$
4,770

 
$
13,303

 
$
12,930

Income tax expense
(287
)
 
(45
)
 
(3,221
)
 
(2,239
)
Net income
$
2,629

 
$
4,725

 
$
10,082

 
$
10,691

Net income per share, basic
$
0.06

 
$
0.11

 
$
0.24

 
$
0.26

Shares used in computing net income per share, basic
        42,093

 
        41,560

 
        41,984

 
        41,384

Net income per share, diluted
$
0.06

 
$
0.11

 
$
0.24

 
$
0.26

Shares used in computing net income per share, diluted
        42,290

 
        42,125

 
        42,146

 
        41,863






LUMINEX CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
 
 
 
 
 
 
 
 
 
Three Months Ended
 
SIx Months Ended
 
June 30,
 
June 30,
 
2015
 
2014
 
2015
 
2014
 
(unaudited)
 
(unaudited)
Cash flows from operating activities:
 
 
 
 
 
 
 
Net income
$
2,629

 
$
4,725

 
$
10,082

 
$
10,691

Adjustments to reconcile net income to net cash provided by operating activities:
 
 
 
 
 
 
 
Depreciation and amortization
3,124

 
3,607

 
6,322

 
7,535

Stock-based compensation
3,090

 
2,801

 
4,669

 
4,430

Deferred income tax expense
5,154

 
1,842

 
6,031

 
2,520

Excess income tax expense from employee stock-based awards
991

 

 
991

 

Loss (gain) on sale or disposal of assets
212

 
178

 
(681
)
 
183

Non-cash restructuring charges

 
424

 

 
1,196

Other
50

 
(140
)
 
(103
)
 
(332
)
Changes in operating assets and liabilities:
 
 
 
 
 
 
 
Accounts receivable, net
2,140

 
(478
)
 
6,086

 
3,539

Inventories, net
1,122

 
(623
)
 
4,050

 
(1,522
)
Other assets
(2,717
)
 
(295
)
 
(2,393
)
 
37

Accounts payable
(2,932
)
 
476

 
(3,774
)
 
(2,105
)
Accrued liabilities
8,077

 
(2,081
)
 
388

 
(4,515
)
Deferred revenue
(383
)
 
(209
)
 
(176
)
 
7

Net cash provided by operating activities
20,557

 
10,227

 
31,492

 
21,664

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

 

 

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

 
1,516

 

 
4,513

Purchase of property and equipment
(3,670
)
 
(3,150
)
 
(12,568
)
 
(6,255
)
Proceeds from sale of assets

 
39

 
893

 
39

Acquired technology rights
(25
)
 
(64
)
 
(202
)
 
(64
)
Net cash used in investing activities
(3,695
)
 
(1,659
)
 
(11,877
)
 
(4,763
)
Cash flows from financing activities:
 
 
 
 
 
 
 
Payments on debt

 
(1,621
)
 

 
(1,621
)
Proceeds from employee stock plans and issuance of common stock
308

 
2,378

 
713

 
3,480

Excess income tax expense from employee stock-based awards
(991
)
 

 
(991
)
 

Net cash (used in) provided by financing activities
(683
)
 
757

 
(278
)
 
1,859

Effect of foreign currency exchange rate on cash
(22
)
 
(1
)
 
33

 
26

Change in cash and cash equivalents
16,157

 
9,324

 
19,370

 
18,786

Cash and cash equivalents, beginning of period
94,907

 
77,386

 
91,694

 
67,924

Cash and cash equivalents, end of period
$
111,064

 
$
86,710

 
$
111,064

 
$
86,710

 
 
 
 
 
 
 
 





LUMINEX CORPORATION
NON-GAAP RECONCILIATION
(in thousands, except per share amounts)
 
 
 
 
 
 
 
 
 
Three Months Ended
 
Six Months Ended
 
June 30,
 
June 30,
 
2015
 
2014
 
2015
 
2014
 
(unaudited)
 
(unaudited)
 
 
 
 
 
 
 
 
Income from operations
$
9,959

 
$
4,771

 
$
19,652

 
$
12,956

Stock-based compensation
3,090

 
2,801

 
4,669

 
4,430

Amortization of acquired intangible assets
776

 
965

 
1,678

 
1,985

Costs associated with legal proceedings
183

 
810

 
620

 
1,600

Severance costs
157

 

 
194

 
45

Restructuring costs

 
510

 

 
1,320

Adjusted income from operations
$
14,165

 
$
9,857

 
$
26,813

 
$
22,336

Interest expense from long-term debt

 

 

 
(6
)
Other income, net
57

 
(1
)
 
951

 
(20
)
Gain on sale of cost method equity investment

 

 
(892
)
 

Income tax expense
(287
)
 
(45
)
 
(3,221
)
 
(2,239
)
Income tax effect of above adjusting items
(2,343
)
 
(320
)
 
(2,473
)
 
(708
)
Income tax benefit from intercompany debt cancellation

 
(994
)
 

 
(994
)
Adjusted net income
$
11,592

 
$
8,497

 
$
21,178

 
$
18,369

Adjusted net income per share, basic
$
0.28

 
$
0.20

 
$
0.50

 
$
0.44

Shares used in computing adjusted net income per share, basic
        42,093

 
        41,560

 
        41,984

 
        41,384

Adjusted net income per share, diluted
$
0.27

 
$
0.20

 
$
0.50

 
$
0.44

Shares used in computing adjusted net income per share, diluted
        42,290

 
        42,125

 
        42,146

 
        41,863


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 litigation against ENZO Life Sciences, Inc. and Irori Technologies, Inc. discussed in the Legal Proceedings section of our previously filed 10-K 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.