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Luminex Corporation Reports Third Quarter 2019 Results and Submission of VERIGENE II Gastrointestinal Flex Assay to the FDA

AUSTIN, Texas, Nov. 4, 2019 /PRNewswire/ -- Luminex Corporation (Nasdaq: LMNX) today announced 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.

CURRENT 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. EST, 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

[email protected]

[email protected]

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 cost method 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 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

 

Luminex logo. (PRNewsFoto/LUMINEX CORP.)

 

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SOURCE Luminex Corporation