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Luminex Corporation Reports Fourth Quarter And Full Year 2013 Results

Companies mentioned in this article: Luminex Corporation

AUSTIN, Texas, Feb. 3, 2014 /PRNewswire/ -- Luminex Corporation (NASDAQ:LMNX) today announced financial results for the fourth quarter and year ended December 31, 2013. Financial and operating highlights include the following:

    --  Consolidated fourth quarter revenue of $55.2 million, a 1 percent
        decline compared to the fourth quarter of 2012; full-year 2013 revenue
        was $213.4 million, a 5 percent increase over 2012
    --  Fourth quarter royalty revenue of $9.3 million, a 23 percent increase
        over the fourth quarter of 2012; full-year 2013 royalty revenue was $37
        million, a 19 percent increase over 2012
    --  Fourth quarter system sales of $10 million, a 40 percent increase over
        the fourth quarter of 2012
    --  Fourth quarter shipments of 327 multiplexing analyzers, which included
        162 MAGPIX systems, 132 LX systems, and 33 FLEXMAP 3D systems.
        Cumulative life-to-date multiplexing analyzer shipments are 10,737, up
        11 percent from a year ago.
    --  Cash and investments balance at year-end of $72.4 million
    --  Operating income for the fourth quarter of 2013 was $5.5 million.
        Non-GAAP operating income for the fourth quarter of 2013 was $10 million
        (see Non-GAAP reconciliation)
    --  GAAP net income for the fourth quarter and full-year of 2013 was $5.1
        million and $7.1 million, or $0.12 and $0.17 per diluted share,
        respectively. Non-GAAP net income for the fourth quarter and 2013 was
        $8.8 million and $26.2 million or $0.21 and $0.62 per diluted share,
        respectively (see Non-GAAP reconciliation)

(Logo: http://photos.prnewswire.com/prnh/20100104/LUMINEXLOGO)

"Although 2013 was a year marked by unexpected challenges, Luminex responded to these challenges by remaining committed to our strategic programs and long term financial objectives. We have remained focused on accelerating both revenue and earnings growth driven by several key company initiatives in our molecular diagnostics business," said Patrick J. Balthrop, president and chief executive officer of Luminex. "In 2014, we expect to build momentum with an exciting pipeline and a full year of our direct sales force in the molecular diagnostics market. We are also excited about the traction we are seeing in new product adoption in the molecular segment and expect these new products to drive growth in 2014."

"Our R&D team is on track in the development of new products that will provide value to our laboratory customers by improving workflow, simplifying sample preparation and enabling our customers to run a wide variety of tests in an automated manner. These products include our sample-to-answer real-time PCR instrument, ARIES, which is on schedule to launch in Europe this year and in the U.S. early in 2015. We look forward to reviewing our achievements and progress with our investors as we move through 2014."


                                REVENUE SUMMARY

                      (in thousands, except percentages)


                             Three Months
                                Ended

                            December 31,             Variance
                            ------------             --------

                                 2013          2012           ($)        (%)
                                 ----          ----           ---        ---

                            (unaudited)


    System sales              $10,014        $7,149              $2,865      40%

    Consumable sales           12,056        12,412                (356)     -3%

    Royalty revenue             9,267         7,513               1,754      23%

    Assay revenue              17,963        23,774              (5,811)    -24%

    All other revenue           5,856         4,687               1,169      25%

                              $55,156       $55,535               $(379)     -1%
                              =======       =======               =====     ===



                             Twelve Months
                               Ended

                            December 31,             Variance
                            ------------             --------

                                 2013          2012           ($)        (%)
                                 ----          ----           ---        ---

                            (unaudited)


    System sales              $31,786       $31,083                $703       2%

    Consumable sales           48,540        48,012                 528       1%

    Royalty revenue            36,950        31,160               5,790      19%

    Assay revenue              74,101        75,020                (919)     -1%

    All other revenue          22,046        17,307               4,739      27%

                             $213,423      $202,582             $10,841       5%
                             ========      ========             =======     ===


                                 LUMINEX CORPORATION

                            REPORTABLE SEGMENT HIGHLIGHTS

                         (in thousands, except percentages)


                                Three Months
                                   Ended

                               December 31,            Variance
                               ------------            --------

                                    2013         2012           ($)         (%)
                                    ----         ----           ---         ---

                               (unaudited)

    Revenue

    Technology and
     strategic
     partnerships                $35,671      $29,674               $5,997       20%

    Assays and
     related
     products                     19,485       25,861               (6,376)     -25%
                                  ------       ------               ------      ---

    Total Revenue                 55,156       55,535                 (379)      -1%


    Operating income (loss)

    Technology and
     strategic
     partnerships                 10,393        6,104                4,289       70%

    Assays and
     related
     products                     (4,921)       1,151               (6,072)    -528%
                                  ------        -----               ------     ----

    Total
     Operating
     income                        5,472        7,255               (1,783)     -25%



                                Twelve Months
                                  Ended

                               December 31,            Variance
                               ------------            --------

                                    2013         2012           ($)         (%)
                                    ----         ----           ---         ---

                               (unaudited)

    Revenue

    Technology and
     strategic
     partnerships               $132,023     $121,032              $10,991        9%

    Assays and
     related
     products                     81,400       81,550                 (150)       0%
                                  ------       ------                 ----      ---

    Total Revenue                213,423      202,582               10,841        5%


    Operating income (loss)

    Technology and
     strategic
     partnerships                 33,761       27,829                5,932       21%

    Assays and
     related
     products                    (28,994)      (5,113)             (23,881)    -467%
                                 -------       ------              -------     ----

    Total
     Operating
     income                        4,767       22,716              (17,949)     -79%

"In the fourth quarter, we maintained steady sales with double digit growth from systems and royalty revenue, offset by what we believe to be temporary softness in our assay segment. During 2013, our assays and related products segment profitability was significantly affected by a number of items, including resolution of our molecular diagnostics distribution agreements, restructuring costs, and the write off of the Natural Molecular Testing Corporation receivable," said Harriss T. Currie, senior vice president and chief financial officer. "Our 2014 revenue guidance takes into account increasing contributions from our assay product portfolio, combined with a prudent view of the macro environment in the near term."

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 2014 is as follows:

    --  The Company expects fiscal 2014 revenue to be between $225 million and
        $240 million, or an increase of 5 to 12 percent over reported 2013
        revenue.

CONFERENCE CALL

Management will host a conference call to discuss the operating highlights and financial results for the fourth quarter ended December 31, 2013, at 4:00 p.m. CST/5:00 p.m. EST, Monday, February 3, 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: the expansion of our installed base of multiplexing systems; 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, 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, status of molecular codes, the impact of Medicare reimbursement on our customers and current and future impact on our business; 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.


    Contacts: Harriss T. Currie                                Matt Norman

               Sr. Vice President, Finance and Chief Financial
               Officer                                         Manager, Government and Investor Relations

              512-219-8020                                     512-219-8020

              hcurrie@luminexcorp.com                          mnorman@luminexcorp.com


                                         LUMINEX CORPORATION

                                CONDENSED CONSOLIDATED BALANCE SHEETS

                                           (in thousands)


                                               December 31,           December 31,

                                                              2013                  2012
                                                              ----                  ----

                                               (unaudited)

    ASSETS

    Current assets:

    Cash and cash
     equivalents                                           $67,924               $42,789

    Short-term
     investments                                             4,517                13,607

    Accounts
     receivable, net                                        30,948                33,273

    Inventories, net                                        30,487                29,937

    Deferred income
     taxes                                                   7,265                 4,783

    Prepaids and
     other                                                   5,229                 4,388
                                                             -----                 -----


    Total current
     assets                                                146,370               128,777


    Property and
     equipment, net                                         32,793                26,229

    Intangible
     assets, net                                            60,295                65,218

    Deferred income
     taxes                                                  11,913                14,360

    Long-term
     investments                                                 -                 3,000

    Goodwill                                                50,738                51,128

    Other                                                    3,937                 8,463


    Total assets                                          $306,046              $297,175
                                                          ========              ========


    LIABILITIES AND STOCKHOLDERS' EQUITY

    Current liabilities:

    Accounts payable                                       $10,698                $9,650

    Accrued
     liabilities                                            11,624                12,866

    Deferred revenue                                         4,980                 4,134

    Current portion
     of long term
     debt                                                    1,194                 1,138


    Total current
     liabilities                                            28,496                27,788


    Long-term debt                                             463                 1,702

    Deferred revenue                                         2,482                 2,933

    Other                                                    4,985                 5,085
                                                             -----                 -----


    Total liabilities                                       36,426                37,508
                                                            ------                ------


    Stockholders' equity:

    Common stock                                                41                    41

    Additional paid-
     in capital                                            296,931               293,392

    Accumulated other
     comprehensive
     gain                                                      419                 1,101

    Accumulated
     deficit                                               (27,771)              (34,867)
                                                           -------               -------


    Total
     stockholders'
     equity                                                269,620               259,667


    Total liabilities
     and
     stockholders'
     equity                                               $306,046              $297,175
                                                          ========              ========


                              LUMINEX CORPORATION

                CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

                   (in thousands, except per share amounts)



                                  Three Months
                                      Ended                     Twelve Months Ended

                                 December 31,                      December 31,
                                 ------------                      ------------

                                        2013            2012           2013         2012
                                        ----            ----           ----         ----

                                 (unaudited)     (unaudited)


    Revenue                          $55,156         $55,535       $213,423     $202,582

    Cost of
     revenue                          18,325          16,178         69,797       60,008
                                      ------          ------         ------       ------


    Gross
     profit                           36,831          39,357        143,626      142,574


    Operating expenses:

    Research
     and
     development                      10,189          11,522         45,041       42,989

    Selling,
     general
     and
     administrative                   19,872          19,551         87,301       72,626

     Amortization
     of
     acquired
     intangible
     assets                            1,022           1,029          4,099        4,243

     Restructuring
     costs                               276               -          2,418            -


    Total
     operating
     expenses                         31,359          32,102        138,859      119,858
                                      ------          ------        -------      -------


    Income from
     operations                        5,472           7,255          4,767       22,716

    Interest
     expense
     from long-
     term debt                            (9)            (36)           (76)        (198)

    Other
     income,
     net                                   3             138          6,733          262
                                         ---             ---          -----          ---


    Income
     before
     income
     taxes                             5,466           7,357         11,424       22,780

    Income
     taxes                              (350)         (3,105)        (4,328)    (10,373)
                                        ----          ------         ------      -------


    Net income                        $5,116          $4,252         $7,096      $12,407
                                      ======          ======         ======      =======


    Net income
     per share,
     basic                             $0.12           $0.10          $0.17        $0.30
                                       =====           =====          =====        =====


    Shares used
     in
     computing
     net income
     per share,
     basic                            41,055          40,724         40,799       40,927


    Net income
     per share,
     diluted                           $0.12           $0.10          $0.17        $0.30
                                       =====           =====          =====        =====


    Shares used
     in
     computing
     net income
     per share,
     diluted                          42,229          41,332         41,986       41,884


                                                  LUMINEX CORPORATION

                                    CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

                                                     (in thousands)


                                                                           Three Months              Twelve Months
                                                                               Ended                     Ended

                                                                          December 31,               December 31,
                                                                          ------------               ------------

                                                                                 2013          2012      2013         2012
                                                                                 ----          ----      ----         ----

                                                                          (unaudited)   (unaudited)

    Cash flows from
     operating
     activities:

    Net income                                                                 $5,116        $4,252    $7,096      $12,407

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

    Depreciation and amortization                                               4,175         3,696    15,922       14,364

    Stock-based compensation                                                    2,488         2,363     9,221        9,915

    Deferred income tax expense (benefit)                                      (2,864)         (217)      551        2,699

    Excess income tax (benefit) expense from employee stock-based awards       (2,843)       (4,274)   (2,569)      (6,457)

    Loss (gain) on sale of assets                                                 132             -    (5,173)           -

    Non-cash restructuring charges                                                442             -     4,137            -

    Other                                                                         (94)          502    (1,209)       1,157

    Changes in
     operating assets
     and liabilities:

    Accounts receivable, net                                                     (730)       (2,041)    2,346      (10,267)

    Inventories, net                                                           (1,091)       (2,742)   (3,005)      (5,346)

    Other assets                                                                  588         1,677    (1,470)        (617)

    Accounts payable                                                            1,680         1,580       962        3,286

    Accrued liabilities                                                         2,403         5,470      (324)       3,463

    Deferred revenue                                                                8           (84)      417         (321)
                                                                                  ---           ---       ---         ----


    Net cash provided by operating activities                                   9,410        10,182    26,902       24,283
                                                                                -----        ------    ------       ------


    Cash flows from
     investing
     activities:

    Purchases of available-for-sale securities                                 (1,516)       (1,498)  (10,005)     (14,987)

    Sales and maturities of available-for-sale securities                       2,496         4,042    22,128       47,117

    Purchase of property and equipment                                         (2,952)       (2,258)  (18,088)      (9,767)

    Business acquisition consideration, net of cash acquired                        -            78         -      (48,199)

    Purchase of cost method investment                                              -             -         -       (1,000)

    Proceeds from sale of assets                                                   34             -     9,598            -

    Acquired technology rights                                                      -        (1,250)     (930)      (1,592)


    Net cash (used in) provided by investing activities                        (1,938)         (886)    2,703      (28,428)
                                                                               ------          ----     -----      -------


    Cash flows from
     financing
     activities:

    Payments on debt                                                                -             -    (1,105)      (1,025)

    Proceeds from employee stock plans and issuance of common stock               786           798     8,677        4,022

    Payments for stock repurchases                                               (213)            -   (14,556)     (20,916)

    Excess income tax (expense) benefit from employee stock-based awards        2,843         4,274     2,569        6,457


    Net cash provided by (used in) financing activities                         3,416         5,072    (4,415)     (11,462)
                                                                                -----         -----    ------      -------


    Effect of foreign currency exchange rate on cash                             (133)          (65)      (55)         114

    Change in cash and cash equivalents                                        10,755        14,303    25,135      (15,493)

    Cash and cash equivalents, beginning of period                             57,169        28,486    42,789       58,282
                                                                               ------        ------    ------       ------


    Cash and cash equivalents, end of period                                  $67,924       $42,789   $67,924      $42,789
                                                                              =======       =======   =======      =======


                          LUMINEX CORPORATION

                        NON-GAAP RECONCILIATION

                            (in thousands)


                                  Three Months             Twelve Months
                                     Ended                   Ended

                                 December 31,             December 31,
                                 ------------             ------------

                                    2013        2012     2013          2012
                                    ----        ----     ----          ----

                                 (unaudited)              (unaudited)


    Income from operations        $5,472      $7,255   $4,767       $22,716


    Stock-based compensation       2,488       2,363    9,221         9,915

    Amortization of acquired
     intangible assets             1,022       1,029    4,099         4,243

    Costs associated with legal
     proceedings                     373           -      731             -

    Resolution of molecular
     diagnostic distribution
     agreements                        -           -    7,000             -

    Acquisition and severance
     costs                            29       1,740    1,060         5,159

    Restructuring costs              626           -    4,969             -


    Adjusted income from
     operations                  $10,010     $12,387  $31,847       $42,033


    Interest expense from long-
     term debt                        (9)        (36)     (76)         (198)

    Other income, net                  3         138    6,733           262

    Gain on sale of cost method
     equity investment                 -           -  (5,452)             -

    Contingent consideration
     adjustments                       -           -  (1,370)             -

    Income taxes                    (350)    (3,105)  (4,328)       (10,373)

    Valuation allowance reserve        -       1,471        -         1,471

    Income tax effect of above
     adjusting items                (826)    (1,297)  (1,202)        (4,290)


    Adjusted net income           $8,828      $9,558  $26,152       $28,905
                                  ======      ======  =======       =======


    Adjusted net income per
     share, basic                  $0.22       $0.23    $0.64         $0.71
                                   =====       =====    =====         =====


    Shares used in computing
     adjusted net income per
     share, basic                 41,055      40,724   40,799        40,927


    Adjusted net income per
     share, diluted                $0.21       $0.23    $0.62         $0.69
                                   =====       =====    =====         =====


    Shares used in computing
     adjusted net income per
     share, diluted               42,229      41,332   41,986        41,884

The Company makes reference in this release to "non-GAAP operating income" and "non-GAAP net income" which excludes the impact of costs associated with the ENZO Life Sciences, Inc. complaint discussed in the Legal Proceedings section of our previously filed 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. 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.

SOURCE Luminex Corporation