Luminex Corporation Reports Second Quarter 2017 Financial Results
AUSTIN, Texas, Aug. 7, 2017 /PRNewswire/ -- Luminex Corporation (NASDAQ:LMNX) today announced financial results for the second quarter of 2017. Financial and operating highlights for the quarter include the following:
-- Consolidated revenue of $76.5 million, an increase of 19% compared to
the second quarter 2016.
-- Total automated sample to answer molecular product revenue of $10.7
million; pro-forma growth of 44% compared to $7.4 million in the second
quarter of 2016.
-- 270 multiplexing analyzers were shipped during the quarter; included in
this figure is a combination of MAGPIX(®) systems, LX systems, FLEXMAP
3D(®) systems.
-- Corporate gross margin decreased to 65% from 68% in the first quarter,
2017, primarily due to an anticipated shift in overall product mix.
-- GAAP net income of $5.5 million, or $0.13 per diluted share. Non-GAAP
net income of $11.2 million, or $0.26 per diluted share (see Non-GAAP
reconciliation).
-- Received FDA clearance of the ARIES(®) Bordetella assay and CE-IVD mark
for the ARIES(®) Norovirus assay. In July, Luminex received FDA
clearance of and CE-IVD mark for the ARIES(®) C.Difficile assay.
-- Gained reimbursement approval in Japan for the VERIGENE(®) gram
positive and gram negative blood culture assays.
"I am very pleased with the Company's performance year-to-date and we remain focused on delivering double digit revenue growth and increased shareholder value. In addition, I'm happy to announce, that only a year after its acquisition, Nanosphere was accretive to the Company's operating results in the second quarter," said Homi Shamir, President and Chief Executive Officer of Luminex. "The combination of the ARIES and VERIGENE sample-to-answer systems coupled with our non-automated solutions has provided our customers with a technology portfolio that addresses their needs. Further, the full integration of our sales force helped drive our execution in the second quarter."
"Looking forward, we believe that our diversified business model offers multiple, significant growth opportunities as we aggressively expand the test menu on these platforms. With multiple clearances in the second quarter and the ARIES C.Diff assay approval in July, Luminex now has ten FDA-cleared assays that run on our automated sample-to-answer molecular systems."
REVENUE SUMMARY
(in thousands, except percentages)
Three Months Ended
June 30, Variance
-------- --------
2017 2016 ($) (%)
---- ---- --- ---
(unaudited)
System sales $9,905 $8,993 $912 10%
Consumable
sales 13,310 13,334 (24) 0%
Royalty revenue 10,813 11,352 (539) -5%
Assay revenue 37,753 25,885 11,868 46%
Service revenue 2,795 2,547 248 10%
Other revenue 1,881 2,055 (174) -8%
$76,457 $64,166 $12,291 19%
======= ======= ======= ===
FINANCIAL OUTLOOK AND GUIDANCE
The Company provides annual revenue guidance, updated, as appropriate, at each quarterly reporting period. Luminex reiterates its 2017 annual revenue guidance range to between $300 million and $310 million. The company expects third quarter 2017 revenue to be between $73 million and $75 million.
CONFERENCE CALL
Management will host a conference call at 3:30 p.m. CDT / 4:30 p.m. EDT, Monday, August 7, 2017 to discuss the operating highlights and financial results for the second quarter 2017 ended June 30, 2017. 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 expected revenue and cost savings, projected 2017 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's products and technology in development, including ARIES(®), Verigene(®) and NxTAG(®) products; dependence on strategic partners for development, commercialization and distribution of products; 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 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's partners and end users and their ability to finance purchases of Luminex's 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's assay products; Luminex's ability to obtain and enforce intellectual property protections on Luminex's products and technologies; risks and uncertainties associated with implementing Luminex's acquisition strategy, including Luminex's ability to obtain financing; Luminex's ability to integrate acquired companies or selected assets into Luminex's consolidated business operations, and the ability to recognize the benefits of Luminex's acquisitions; reliance on third party distributors for distribution of specific Luminex-developed and manufactured assay products; Luminex's ability to scale manufacturing operations and manage operating expenses, gross margins and inventory levels; 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; competition and competitive technologies utilized by Luminex's competitors; Luminex's ability to successfully launch new products in a timely manner; 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; 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 2017 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,
2017 2016
---- ----
(unaudited)
ASSETS
Current assets:
Cash and
cash
equivalents $103,705 $93,452
Accounts
receivable,
net 33,133 32,365
Inventories,
net 47,095 40,775
Prepaids
and other 8,208 7,145
----- -----
Total
current
assets 192,141 173,737
Property
and
equipment,
net 57,890 57,375
Intangible
assets,
net 80,318 84,841
Deferred
income
taxes 35,511 42,497
Goodwill 85,481 85,481
Other 7,611 6,785
Total
assets $458,952 $450,716
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts
payable $10,456 $12,276
Accrued
liabilities 18,327 22,804
Deferred
revenue 4,933 5,120
Total
current
liabilities 33,716 40,200
Deferred
revenue 1,720 1,875
Other 4,929 4,962
----- -----
Total
liabilities 40,365 47,037
------ ------
Stockholders' equity:
Common
stock 43 43
Additional
paid-in
capital 341,290 336,430
Accumulated
other
comprehensive
loss (1,090) (1,692)
Retained
earnings 78,344 68,898
------ ------
Total
stockholders'
equity 418,587 403,679
Total
liabilities
and
stockholders'
equity $458,952 $450,716
======== ========
LUMINEX CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
Three Months Ended Six Months Ended
June 30, June 30,
-------- --------
2017 2016 2017 2016
---- ---- ---- ----
(unaudited) (unaudited)
Revenue $76,457 $64,166 $154,236 $127,147
Cost of revenue 26,396 19,245 51,389 37,420
Gross profit 50,061 44,921 102,847 89,727
Operating expenses:
Research and development 12,260 11,543 24,680 22,562
Selling, general and
administrative 28,153 24,190 52,150 44,549
Amortization of acquired
intangible assets 2,166 1,688 4,523 3,315
Total operating expenses 42,579 37,421 81,353 70,426
------ ------ ------ ------
Income from operations 7,482 7,500 21,494 19,301
Other income, net 1 (1,446) (5) (1,425)
Income before income
taxes 7,483 6,054 21,489 17,876
Income tax expense (1,939) (401) (6,714) (3,453)
------ ---- ------ ------
Net income $5,544 $5,653 $14,775 $14,423
====== ====== ======= =======
Net income attributable to common stock holders
Basic $5,441 $5,653 $14,499 $14,423
Diluted $5,441 $5,653 $14,499 $14,423
Net income per share attributable to common stock
holders
Basic $0.13 $0.13 $0.34 $0.34
Diluted $0.13 $0.13 $0.34 $0.34
Weighted-average shares used in computing net
income per share
Basic 43,160 42,534 43,030 42,440
Diluted 43,259 42,575 43,128 42,440
Dividends declared per
share $0.06 - $0.12 -
LUMINEX CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
Three Months Ended Six Months Ended
June 30, June 30,
-------- --------
2017 2016 2017 2016
---- ---- ---- ----
(unaudited) (unaudited)
Cash flows from operating activities:
Net income $5,544 $5,653 $14,775 $14,423
Adjustments to reconcile net income to net cash provided by
operating activities:
Depreciation and amortization 5,651 4,276 11,270 8,488
Stock-based compensation 4,026 3,475 4,748 4,655
Deferred income tax expense 4,332 (395) 7,267 2,931
Loss (gain) on sale or disposal of
assets - 4 - 41
Other 478 (17) 922 (71)
Changes in operating assets and liabilities:
Accounts receivable, net 3,911 7,221 (758) 6,673
Inventories, net (3,417) (4,142) (6,304) (4,040)
Other assets (1,892) 508 (1,197) 672
Accounts payable 1,337 3,737 (2,369) 2,724
Accrued liabilities 2,661 1,098 (7,411) (6,174)
Deferred revenue (547) (209) (350) 621
---- ---- ---- ---
Net cash provided by operating
activities 22,084 21,209 20,593 30,943
------ ------ ------ ------
Cash flows from investing activities:
Sales and maturities of available-
for-sale securities - 19,491 - 19,491
Purchase of property and equipment (2,970) (2,871) (6,403) (5,719)
Proceeds from sale of assets - 3 - 3
Business acquisition consideration,
net of cash acquired - (66,902) - (66,902)
Purchase of cost method investment (500) - (1,000) -
Acquired technology rights - - - (200)
Net cash used in investing
activities (3,470) (50,279) (7,403) (53,327)
------ ------- ------ -------
Cash flows from financing activities:
Payments on debt - (25,000) - (25,000)
Proceeds from issuance of common
stock 1,495 1,406 2,229 1,762
Shares surrendered for tax
withholding (40) (35) (2,096) (1,484)
Dividends (2,636) (2,636)
Net cash provided by (used in)
financing activities (1,181) (23,629) (2,503) (24,722)
------ ------- ------ -------
Effect of foreign currency exchange
rate on cash (194) 115 (434) 278
Change in cash and cash equivalents 17,239 (52,584) 10,253 (46,828)
Cash and cash equivalents, beginning
of period 86,466 134,302 93,452 128,546
------ ------- ------ -------
Cash and cash equivalents, end of
period $103,705 $81,718 $103,705 $81,718
======== ======= ======== =======
LUMINEX CORPORATION
NON-GAAP RECONCILIATION
(in thousands)
Three Months Ended Six Months Ended
June 30, June 30,
-------- --------
2017 2016 2017 2016
---- ---- ---- ----
(unaudited) (unaudited)
Income
from
operations $7,482 $7,500 $21,494 $19,301
Stock-
based
compensation 4,026 3,475 4,748 4,655
Amortization
of
acquired
intangible
assets 2,166 1,688 4,523 3,315
Acquisition
costs - 2,008 - 2,008
Severance
costs 559 160 658 814
Adjusted
income
from
operations $14,233 $14,831 $31,423 $30,093
Other
income,
net 1 (1,446) (5) (1,425)
Acquisition
costs - 1,500 - 1,500
Income
tax
expense (1,939) (401) (6,714) (3,453)
Income
tax
effect
of
above
adjusting
items (1,112) (363) (1,292) (416)
Adjusted
net
income $11,183 $14,121 $23,412 $26,299
======= ======= ======= =======
Adjusted
net
income
per
share,
basic $0.26 $0.33 $0.54 $0.62
===== ===== ===== =====
Shares
used
in
computing
adjusted
net
income
per
share,
basic 43,160 42,534 43,030 42,440
Adjusted
net
income
per
share,
diluted $0.26 $0.33 $0.54 $0.62
===== ===== ===== =====
Shares
used
in
computing
adjusted
net
income
per
share,
diluted 43,259 42,575 43,128 42,440
The Company makes reference in this release to "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.
Contacts: Harriss T. Currie Matthew Scalo
Sr. Vice President, Finance and Chief Financial Officer Sr. Director, Investor Relations
512-219-8020 512-219-8020
hcurrie@luminexcorp.com mscalo@luminexcorp.com
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SOURCE Luminex Corporation
