AUSTIN, Texas, July 28, 2016 /PRNewswire/ -- Luminex Corporation (NASDAQ:LMNX) today announced financial results for the second quarter ended June 30, 2016. Financial and operating highlights for the quarter include the following:

  • Consolidated second quarter revenue of $64.2 million, a 9% increase compared to the second quarter of 2015.
  • GAAP net income for the second quarter was $5.7 million, or $0.13 per diluted share. Non-GAAP net income for the second quarter was $14.1 million, or $0.33 per diluted share (see Non-GAAP reconciliation).
  • On June 30, we completed the acquisition on Nanosphere, Inc., a leading player in microbiology lab testing, in an all cash deal valued at approximately $92 million.
  • On July 6, we received FDA clearance and CE-IVD Mark for the ARIES M1 system, a fully integrated sample to answer molecular testing platform designed for lower throughput clinical labs.

'Another record quarterly revenue result, driven by a strong performance in our partner business, along with healthy gross margins and overall profitability, reflect the strength of our business and our ability to execute well,' said Homi Shamir, President and Chief Executive Officer of Luminex. 'Clearly, we are excited about the addition of Nanosphere. The excellent strategic fit and high growth potential will reward customers and shareholders alike. Luminex's combined salesforce is now positioned to expand and enhance our market leadership by providing customers with a complete combination of low and high plex solutions plus a sample to answer capability. In summary, we have made excellent progress so far this year and believe we are well positioned to achieve our goals of accelerating revenue, profitability and cash flow over the next few years.'

REVENUE SUMMARY

(in thousands, except percentages)

Three Months Ended

June 30,

Variance

2016

2015

($)

(%)

(unaudited)

System sales

$ 8,993

$ 6,543

$ 2,450

37%

Consumable sales

13,334

11,878

1,456

12%

Royalty revenue

11,352

11,073

279

3%

Assay revenue

25,885

24,238

1,647

7%

All other revenue

4,602

5,185

(583)

-11%

$ 64,166

$ 58,917

$ 5,249

9%

Six Months Ended

June 30,

Variance

2016

2015

($)

(%)

(unaudited)

System sales

$ 17,311

$ 12,507

$ 4,804

38%

Consumable sales

25,184

21,774

3,410

16%

Royalty revenue

22,820

21,775

1,045

5%

Assay revenue

52,924

49,684

3,240

7%

All other revenue

8,908

10,918

(2,010)

-18%

$ 127,147

$ 116,658

$ 10,489

9%

Additional Highlights:

  • Infectious disease assay sales were approximately 66% of total assay sales for the second quarter and genetic testing assays were 34%.
  • 277 multiplexing analyzers were shipped during the quarter, included in this figure is a combination of MAGPIX systems, LX systems, and FLEXMAP 3D systems.

FINANCIAL OUTLOOK AND GUIDANCE

The Company raises its 2016 annual revenue guidance to a range of between $261 million and $269 million. This revised full year revenue guidance factors in a contribution from Nanosphere of between $13 million and $16 million in the second half of 2016. The Company currently anticipates third quarter 2016 revenue to be between $67 million and $70 million. This third quarter guidance incorporates a contribution of approximately 10% of revenue from Nanosphere.

CONFERENCE CALL

Management will host a conference call at 7:30 a.m. CDT / 8:30 a.m. EDT, Friday, July 29, 2016 to discuss the operating highlights and financial results for the second quarter ended June 30, 2016. 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 2016 performance, including revenue guidance, including the revenue contribution from our recently completed acquisition of Nanosphere, Inc. 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 products, 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 2016 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,

2016

2015

(unaudited)

ASSETS

Current assets:

Cash and cash equivalents

$ 81,718

$ 128,546

Short-term investments

-

11,988

Accounts receivable, net

26,971

28,853

Inventories, net

41,517

31,252

Prepaids and other

8,989

8,887

Total current assets

159,195

209,526

Property and equipment, net

57,695

47,796

Intangible assets, net

83,167

52,482

Deferred income taxes

46,606

31,821

Long-term investments

-

7,459

Goodwill

82,729

49,619

Other

5,613

3,853

Total assets

$ 435,005

$ 402,556

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:

Accounts payable

$ 11,276

$ 7,868

Accrued liabilities

16,622

15,152

Deferred revenue

5,355

4,212

Total current liabilities

33,253

27,232

Deferred revenue

1,964

2,064

Other

4,830

4,724

Total liabilities

40,047

34,020

Stockholders' equity:

Common stock

43

42

Additional paid-in capital

326,531

321,657

Accumulated other comprehensive loss

(1,079)

(1,296)

Retained earnings

69,463

48,133

Total stockholders' equity

394,958

368,536

Total liabilities and stockholders' equity

$ 435,005

$ 402,556

LUMINEX CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share amounts)

Three Months Ended

Six Months Ended

June 30,

June 30,

2016

2015

2016

2015

(unaudited)

(unaudited)

Revenue

$ 64,166

$ 58,917

$ 127,147

$ 116,658

Cost of revenue

19,245

15,647

37,420

33,169

Gross profit

44,921

43,270

89,727

83,489

Operating expenses:

Research and development

11,543

11,510

22,562

21,655

Selling, general and administrative

24,190

21,025

44,549

40,504

Amortization of acquired intangible assets

1,688

776

3,315

1,678

Restructuring costs

-

-

Total operating expenses

37,421

33,311

70,426

63,837

Income from operations

7,500

9,959

19,301

19,652

Other income, net

(1,446)

57

(1,425)

951

Settlement of litigation

-

(7,100)

-

(7,300)

Income before income taxes

6,054

2,916

17,876

13,303

Income tax expense

(401)

(287)

(3,453)

(3,221)

Net income

$ 5,653

$ 2,629

$ 14,423

$ 10,082

Net income per share, basic

$ 0.13

$ 0.06

$ 0.34

$ 0.24

Shares used in computing net income per share, basic

42,534

42,093

42,440

41,984

Net income per share, diluted

$ 0.13

$ 0.06

$ 0.34

$ 0.24

Shares used in computing net income per share, diluted

42,575

42,290

42,440

42,146

LUMINEX CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

Three Months Ended

Six Months Ended

June 30,

June 30,

2016

2015

2016

2015

(unaudited)

(unaudited)

Cash flows from operating activities:

Net income

$ 5,653

$ 2,629

$ 14,423

$ 10,082

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation and amortization

4,276

3,124

8,488

6,322

Stock-based compensation

3,475

3,090

4,655

4,669

Deferred income tax expense

(395)

5,154

2,931

6,031

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

-

991

-

991

Loss (gain) on sale or disposal of assets

4

212

41

(681)

Other

(17)

50

(71)

(103)

Changes in operating assets and liabilities:

Accounts receivable, net

7,221

2,140

6,673

6,086

Inventories, net

(4,142)

1,122

(4,040)

4,050

Other assets

508

(2,717)

672

(2,393)

Accounts payable

3,737

(2,932)

2,724

(3,774)

Accrued liabilities

1,098

8,106

(6,174)

1,967

Deferred revenue

(209)

(383)

621

(176)

Net cash provided by operating activities

21,209

20,586

30,943

33,071

Cash flows from investing activities:

Sales and maturities of available-for-sale securities

19,491

-

19,491

-

Purchase of property and equipment

(2,871)

(3,670)

(5,719)

(12,568)

Proceeds from sale of assets

3

-

3

893

Business acquisition consideration, net of cash acquired

(66,902)

-

(66,902)

-

Acquired technology rights

-

(25)

(200)

(202)

Net cash used in investing activities

(50,279)

(3,695)

(53,327)

(11,877)

Cash flows from financing activities:

Payments on debt

(25,000)

-

(25,000)

-

Proceeds from employee stock plans and issuance of common stock

1,406

308

1,762

713

Shares surrendered for tax withholding

(35)

(29)

(1,484)

(1,579)

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

-

(991)

-

(991)

Net cash used in financing activities

(23,629)

(712)

(24,722)

(1,857)

Effect of foreign currency exchange rate on cash

115

(22)

278

33

Change in cash and cash equivalents

(52,584)

16,157

(46,828)

19,370

Cash and cash equivalents, beginning of period

134,302

94,907

128,546

91,694

Cash and cash equivalents, end of period

$ 81,718

$ 111,064

$ 81,718

$ 111,064

LUMINEX CORPORATION

NON-GAAP RECONCILIATION

(in thousands)

Three Months Ended

Six Months Ended

June 30,

June 30,

2016

2015

2016

2015

(unaudited)

(unaudited)

Income from operations

$ 7,500

$ 9,959

$ 19,301

$ 19,652

Stock-based compensation

3,475

3,090

4,655

4,669

Amortization of acquired intangible assets

1,688

776

3,315

1,678

Costs associated with legal proceedings

-

183

-

620

Acquisition costs

2,008

-

2,008

-

Severance costs

160

157

814

194

Adjusted income from operations

$ 14,831

$ 14,165

$ 30,093

$ 26,813

Other income, net

(1,446)

57

(1,425)

951

Gain on sale of cost method equity investment

-

-

-

(892)

Acquisition costs

1,500

-

1,500

-

Income tax expense

(401)

(287)

(3,453)

(3,221)

Income tax effect of above adjusting items

(363)

(2,343)

(416)

(2,473)

Adjusted net income

$ 14,121

$ 11,592

$ 26,299

$ 21,178

Adjusted net income per share, basic

$ 0.33

$ 0.28

$ 0.62

$ 0.50

Shares used in computing adjusted net income per share, basic

42,534

42,093

42,440

41,984

Adjusted net income per share, diluted

$ 0.33

$ 0.27

$ 0.62

$ 0.50

Shares used in computing adjusted net income per share, diluted

42,575

42,290

42,440

42,146

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 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.

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SOURCE Luminex Corporation

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