EX-99.1 2 a2019-q3form8xkex991.htm EXHIBIT 99.1 Exhibit


Exhibit 99.1
lum1n35smalla18.jpg

LUMINEX CORPORATION REPORTS THIRD QUARTER 2019 RESULTS


AUSTIN, Texas (November 4, 2019) - Luminex Corporation (Nasdaq: LMNX) today announced financial results for its third quarter ended September 30, 2019.

All amounts in this release are in conformity with U.S. generally accepted accounting principles ("GAAP"). Comparisons shown in this release are to the same period in the prior year unless otherwise noted.


HIGHLIGHTS

•
Total revenue growth for the quarter of 9% to $78.7 million. Revenue reflects an $8.7 million addition from Flow Cytometry and a $6.9 million reduction attributable to the departure of certain sales to LabCorp.
•
Operating cash flow of $9.4 million.
•
Dividend declared of $0.09 per share.
•
ARIES® MRSA Assay received U.S. Food and Drug Administration (FDA) 510(k) clearance.
•
Submitted VERIGENE® II Gastrointestinal Flex Assay to the FDA.
•
Expect to submit VERIGENE® II Respiratory Flex Assay to the FDA by year end.


CEO COMMENTARY

"Consistent with our previously communicated plans, 2019 has been a transition year for Luminex as we have adjusted to the departure of certain sales to LabCorp and the integration of the Flow Cytometry acquisition," said Nachum "Homi" Shamir, President & CEO. "Although total revenue was slightly lower than expected due to order timing in Flow Cytometry in the third quarter, I am very pleased with the significant progress we are making to return the company to sustained growth and profitability,” continued Shamir. “We anticipate a new and transformative era for Luminex as a more diversified company, with strong organic growth, profitability, and cash flow, that will be offering exciting new platforms and opportunities across each of our major product lines. Next year will be the first time in Luminex’s history where we launch three exciting new platforms across our portfolio.”


RESULTS AND REVENUE SUMMARY FOR THIRD QUARTER 2019

•
Licensed Technology Group revenue increased 7% to $38.7 million, driven by consumable and royalty revenue growth.
•
Molecular Diagnostic revenue declined 15% to $30.3 million (up 6% without the revenue decline from the departure of LabCorp). The growth, absent the LabCorp effect, was primarily attributable to increases in sample to answer portfolio revenue.
•
Molecular sample to answer portfolio revenue grew 27% to $17.4 million, with 31 new sample to answer molecular systems under contract in this third quarter. Active sample to answer customers grew to more than 650 in the quarter.
•
Flow Cytometry contributed revenue of approximately $8.7 million in the quarter and $33 million year to date, a 10+% increase. While order timing of approximately $3 million in Flow Cytometry resulted in slightly lower revenue than expected in the third quarter, Flow is on track to deliver $12 million in the fourth quarter and $45 million in 2019, as expected, with an anticipated growth rate above 10% in 2019.
•
Gross margins of 53% were affected primarily by the departure of higher margin LabCorp revenue, as well as growth across all of the company’s lower margin items.
•
Net loss of $5.3 million, or $0.12 per diluted share, was impacted primarily by the departure of LabCorp revenue and the integration of the Flow Cytometry acquisition and resulting margin compression.




REVENUE SUMMARY
(in thousands, except percentages)

 
Three Months Ended
 
 
 
 
 
September 30,
 
Variance
 
2019
 
2018
 
($)
 
(%)
 
(unaudited)
 
 
 
 
 
 
 
 
 
 
 
 
System sales
$
15,239

 
$
10,026

 
$
5,213

 
52
 %
Consumable sales
13,359

 
11,627

 
1,732

 
15
 %
Royalty revenue
12,993

 
12,081

 
912

 
8
 %
Assay revenue
29,468

 
33,747

 
(4,279
)
 
(13
)%
Service revenue
5,349

 
3,015

 
2,334

 
77
 %
Other revenue
2,265

 
1,949

 
316

 
16
 %
 
$
78,673

 
$
72,445

 
$
6,228

 
9
 %


FINANCIAL OUTLOOK AND GUIDANCE

For the full year 2019, the Company is adjusting its revenue expectations to a range of $334 million to $337 million.

CONFERENCE CALL

Management will host a conference call at 4:00 p.m. Central Time / 5:00 p.m. EDT, Monday, November 4, 2019 to discuss the operating highlights and financial results for the third quarter 2019. The conference call will be webcast live and may be accessed at Luminex Corporation’s website at http://www.luminexcorp.com. The presentation slides will be posted to our Investor Relations website after the market close on November 4, 2019. Analysts may participate on the conference call by dialing (877) 930-7053 (U.S.) or (253) 336-7290 (outside the U.S.). The access code is 1293259. The webcast will be archived for six months on our website using the 'replay' link.

At Luminex, our mission is to empower labs to obtain reliable, timely, and actionable answers, ultimately advancing health. We offer a wide range of solutions applicable in diverse markets including clinical diagnostics, pharmaceutical drug discovery, biomedical research, genomic and proteomic research, biodefense research, and food safety. We accelerate reliable answers while simplifying complexity and deliver certainty with a seamless experience. To learn more about Luminex, please visit us at 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 expected revenue and cost savings and projected 2019 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, concentration of Luminex’s 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’s technology, budget or finance constraints in the current economic environment, or periodic variability in their purchasing patterns or practices as a result of internal resource planning challenges; market demand and acceptance of Luminex’s products and technology, including ARIES®, MultiCode®, xMAP®, VERIGENE®, Guava®, Muse®, Amnis® and NxTAG® products; Luminex’s ability to scale manufacturing operations and manage operating expenses, gross margins and inventory levels; Luminex’s ability to obtain and enforce intellectual property protections on Luminex’s products and technologies; the impact on Luminex’s growth and future results of operations with respect to the loss of the LabCorp women’s health business; Luminex’s ability to successfully launch new products in a timely manner; dependence on strategic partners for development, commercialization and distribution of products; risks and uncertainties associated with implementing Luminex’s acquisition strategy, Luminex’s challenge to identify acquisition targets, including Luminex’s ability to obtain financing on acceptable terms; Luminex’s ability to integrate acquired companies or selected assets, including the Flow-Cytometry assets recently acquired from Millipore Sigma, into Luminex’s consolidated business operations, and the ability to fully realize the benefits of Luminex’s acquisitions; the timing of and process for regulatory approvals; competition and competitive technologies utilized by Luminex’s competitors; 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’s assay products; Luminex’s ability to comply with applicable laws, regulations, policies and procedures; the impact of the ongoing uncertainty in global finance markets and changes in governmental and governmental agency funding, including effects on the capital spending policies of Luminex’s partners and end users and their ability to finance purchases of Luminex’s products; changes in principal members of Luminex’s management staff; potential shortages, or increases in costs, of components or other disruptions to Luminex’s manufacturing operations; Luminex’s increasing dependency on information technology to improve the effectiveness of Luminex’s operations and to monitor financial accuracy and efficiency; the implementation, including any modification, of Luminex’s strategic operating plans; the uncertainty regarding the outcome or expense of any litigation brought against or initiated by Luminex; risks relating to Luminex’s 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; Luminex’s ability to monitor and comply with foreign and international laws and treaties; and Luminex’s ability to comply with changes in international taxation policies; 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; reliance on third party distributors for distribution of specific Luminex-developed and manufactured assay products, 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 2019 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.

Contacts:
 
 
 
Luminex Corporation
Lazar FINN Partners
Jeff Christensen
David Carey
Senior Director, Investor Relations
david.carey@finnpartners.com
jeffc@luminexcorp.com
212-867-1768
512-249-3033
 




LUMINEX CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
 
 
 
 
 
September 30,
 
December 31,
 
2019
 
2018
 
(unaudited)
 
 
ASSETS
 
 
 
Current assets:
 
 
 
Cash and cash equivalents
$
66,051

 
$
76,441

Accounts receivable, net
45,810

 
53,396

Inventories, net
76,122

 
63,250

Prepaids and other
10,956

 
9,657

Total current assets
198,939

 
202,744

Property and equipment, net
66,527

 
66,288

Intangible assets, net
93,188

 
105,148

Deferred income taxes
31,160

 
21,470

Goodwill
118,145

 
118,127

Right of use assets
21,554

 
—

Other
9,365

 
11,398

Total assets
538,878

 
525,175

LIABILITIES AND STOCKHOLDERS' EQUITY
 
 
 
Current liabilities:
 
 
 
Accounts payable
$
18,547

 
$
14,504

Accrued liabilities
29,940

 
26,772

Deferred revenue - current portion
8,053

 
10,099

Total current liabilities
56,540

 
51,375

Deferred revenue
2,214

 
1,079

Lease liabilities
18,380

 
—

Other long-term liabilities
1,837

 
5,065

Total liabilities
78,971

 
57,519

Stockholders' equity:
 
 
 
Common stock
44

 
44

Additional paid-in capital
374,872

 
365,349

Accumulated other comprehensive loss
(1,623
)
 
(1,127
)
Retained earnings
86,614

 
103,390

Total stockholders' equity
459,907

 
467,656

Total liabilities and stockholders' equity
$
538,878

 
$
525,175

 
 
 
 




LUMINEX CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
 
 
 
 
 
 
 
 
 
Three Months Ended
 
Nine Months Ended
 
September 30,
 
September 30,
 
2019
 
2018
 
2019
 
2018
 
(unaudited)
 
(unaudited)
 
 
 
 
 
 
 
 
Revenue
$
78,673

 
$
72,445

 
$
244,137

 
$
234,685

Cost of revenue
36,833

 
28,189

 
111,263

 
87,535

Gross profit
41,840

 
44,256

 
132,874

 
147,150

Operating expenses:
 
 
 
 
 
 
 
Research and development
13,262

 
11,996

 
43,295

 
33,994

Selling, general and administrative
31,448

 
26,340

 
96,085

 
79,780

Amortization of acquired intangible assets
2,852

 
2,166

 
8,556

 
6,498

Total operating expenses
47,562

 
40,502

 
147,936

 
120,272

Income (loss) from operations
(5,722
)
 
3,754

 
(15,062
)
 
26,878

Other income (expense), net
2

 
8

 
(96
)
 
465

Income (loss) before income taxes
(5,720
)
 
3,762

 
(15,158
)
 
27,343

Income tax benefit (expense)
470

 
(2,025
)
 
7,937

 
(6,540
)
Net income (loss)
$
(5,250
)
 
$
1,737

 
$
(7,221
)
 
$
20,803

 
 
 
 
 
 
 
 
Net income (loss) attributable to common stockholders
 
 
 
 
 
 
Basic
$
(5,224
)
 
$
1,708

 
$
(7,187
)
 
$
20,447

Diluted
$
(5,224
)
 
$
1,708

 
$
(7,189
)
 
$
20,449

 
 
 
 
 
 
 
 
Net income (loss) per share attributable to common stockholders
 
 
 
 
Basic
$
(0.12
)
 
$
0.04

 
$
(0.16
)
 
$
0.47

Diluted
$
(0.12
)
 
$
0.04

 
$
(0.16
)
 
$
0.46

 
 
 
 
 
 
 
 
Weighted-average shares used in computing net income per share
 
 
 
 
Basic
44,216

 
43,836

 
44,109

 
43,679

Diluted
44,216

 
44,707

 
44,109

 
44,193

 
 
 
 
 
 
 
 
Dividends declared per share
$
0.09

 
$
0.06

 
$
0.21

 
$
0.18






LUMINEX CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
 
 
 
 
 
 
 
 
 
Three Months Ended
 
Nine Months Ended
 
September 30,
 
September 30,
 
2019
 
2018
 
2019
 
2018
 
(unaudited)
 
(unaudited)
Cash flows from operating activities:
 
 
 
 
 
 
 
Net income (loss)
$
(5,250
)
 
$
1,737

 
$
(7,221
)
 
$
20,803

Adjustments to reconcile net income to net cash provided by operating activities:
 
 
 
 
 
 
 
Depreciation and amortization
7,177

 
5,714

 
21,170

 
17,737

Stock-based compensation
3,565

 
3,652

 
9,644

 
8,460

Deferred income tax (benefit) expense
(2,316
)
 
4,889

 
(10,970
)
 
8,650

Loss on sale or disposal of assets
59

 
332

 
231

 
443

Other
(510
)
 
(159
)
 
(532
)
 
(1,286
)
Changes in operating assets and liabilities:
 
 
 
 
 
 
 
Accounts receivable, net
13,459

 
4,570

 
7,563

 
9,623

Inventories, net
(6,617
)
 
(2,982
)
 
(12,602
)
 
(5,584
)
Other assets
567

 
(4,187
)
 
3,971

 
(4,743
)
Accounts payable
372

 
(47
)
 
4,540

 
(1,708
)
Accrued liabilities
600

 
1,633

 
(6,956
)
 
(6,440
)
Deferred revenue
(1,661
)
 
—

 
(610
)
 
653

Net cash provided by (used in) operating activities
9,445

 
15,152

 
8,228

 
46,608

Cash flows from investing activities:
 
 
 
 
 
 
 
Purchase of property and equipment
(4,993
)
 
(5,228
)
 
(13,115
)
 
(14,264
)
Proceeds from net working capital adjustments related to business acquisition
—

 
—

 
1,915

 
—

Issuance of note receivable
—

 
—

 
—

 
(1,000
)
Purchase of investment
—

 
—

 
—

 
(1,782
)
Acquired technology rights
—

 
—

 
—

 
(4,000
)
Net cash used in investing activities
(4,993
)
 
(5,228
)
 
(11,200
)
 
(21,046
)
Cash flows from financing activities:
 
 
 
 
 
 
 
Proceeds from employee stock plans and issuance of common stock
695

 
566

 
2,481

 
3,982

Shares surrendered for tax withholding
(4
)
 
(18
)
 
(2,089
)
 
(2,034
)
Dividends paid
(2,703
)
 
(2,676
)
 
(8,098
)
 
(7,978
)
Net cash used in financing activities
(2,012
)
 
(2,128
)
 
(7,706
)
 
(6,030
)
Effect of foreign currency exchange rate on cash
286

 
102

 
288

 
250

Change in cash and cash equivalents
2,726

 
7,898

 
(10,390
)
 
19,782

Cash and cash equivalents, beginning of period
63,325

 
138,996

 
76,441

 
127,112

Cash and cash equivalents, end of period
$
66,051

 
$
146,894

 
$
66,051

 
$
146,894


-END-