Luminex Corporation Reports Fourth Quarter and Full-Year 2019 Results

AUSTIN, TexasFeb. 10, 2020 /PRNewswire/ — Luminex Corporation (Nasdaq: LMNX) today announced results for its fourth quarter and full-year ended December 31, 2019.

All amounts in this release are in conformity with U.S. generally accepted accounting principles (“GAAP”).

CURRENT HIGHLIGHTS

  • Total revenue for the fourth quarter of $90.5M, a 12% increase over Q4 2018.
  • Total revenue for the year of $334.6M, up 6% over 2018; and up 19% without consideration of LabCorp revenue and including the effect of the Flow Cytometry acquisition.
  • Income and cash flow from operations in the fourth quarter increased to $3.0M and $5.3M, respectively.
  • Submitted VERIGENE® II Gastrointestinal Flex Assay to the FDA in the fourth quarter of 2019.
  • Expect to submit VERIGENE® II Respiratory Flex Assay to the FDA in the first quarter of 2020.

CEO COMMENTARY

“Our successful transformation continues. We delivered a strong fourth quarter by growing revenues both sequentially and year-over-year, with a return to profitability,” said Nachum “Homi” Shamir, President & CEO. “I am very pleased with the significant progress we are making. Looking forward, exciting new products with unique features and the effective execution we have shown with our current portfolio support a return to accelerated organic growth. We are well positioned to achieve our target of $500M of annual organic revenue, profitability, and strong positive cash flow in the next few years.”

RESULTS AND REVENUE SUMMARY FOR FOURTH QUARTER AND FULL-YEAR 2019

  • Tools (Flow Cytometry + Licensed Technologies Group) revenue 5% lower in Q4 2019, but up 2% in full-year 2019 vs. 2018.
    • Flow Cytometry revenue up 2% to $12.0M in Q4 and up 11% to $45.2M in full-year 2019 vs. 2018, respectively.
    • Licensed Technologies Group revenue 7% lower to $38.6M in Q4 and unchanged at $149.0M in full-year 2019 vs. 2018, respectively. Consumable revenue was impacted by the timing of purchases. End user sales of our technology and royalty revenue increased 12% and 8% in full-year 2019 vs. 2018, respectively.
  • Total Molecular Diagnostic (MDx) revenue unchanged at $38.8M in Q4 2019, and 16% lower to $136.7M in full-year 2019 vs. 2018, primarily driven by the departure of certain sales to LabCorp, which impacted full-year 2019 by $32M.
    • MDx revenue up 1% and up 4% in Q4 and full-year 2019 vs. 2018, respectively, without consideration of LabCorp revenue. The growth, absent the LabCorp effect, was primarily attributable to increases in sample to answer portfolio revenue.
  • Molecular sample-to-answer portfolio revenue up 15% to $21.0M in Q4 2019 and up 21% to $75.7M in full-year 2019 vs. 2018.
  • Consolidated gross margins of 55% in the fourth quarter and full-year 2019 were affected primarily by the departure of higher margin LabCorp revenue, as well as growth across all of the company’s lower margin items.

REVENUE SUMMARY

(in thousands, except percentages)

Three Months Ended

December 31,

Variance

2019

2018

($)

(%)

(unaudited)

System sales

$  20,773

$  10,209

$10,564

103%

Consumable sales

11,723

15,678

(3,955)

-25%

Royalty revenue

13,565

13,507

58

0%

Assay revenue

36,374

36,952

(578)

-2%

Service revenue

5,651

3,225

2,426

75%

Other revenue

2,415

1,562

853

55%

$  90,501

$  81,133

$  9,368

12%

Twelve Months Ended

December 31,

Variance

2019

2018

($)

(%)

(unaudited)

System sales

$  70,276

$  39,986

$30,290

76%

Consumable sales

48,542

50,144

(1,602)

-3%

Royalty revenue

53,562

49,394

4,168

8%

Assay revenue

132,028

156,714

(24,686)

-16%

Service revenue

22,413

12,159

10,254

84%

Other revenue

7,817

7,421

396

5%

$334,638

$315,818

$18,820

6%

2020 REVENUE GUIDANCE

The company anticipates its first quarter 2020 revenue to be between $82M and $84M and reaffirms its full-year 2020 revenue guidance of between $352M to $362M. The mid-point of full-year 2020 revenue guidance is 7% higher relative to the prior year; the full-year revenue guidance includes approximately 2 to 3 percent headwind attributable to the departure of certain remaining sales to LabCorp.

CONFERENCE CALL

Management will host a conference call at 4:00 p.m. Central Time / 5:00 p.m. ESTMonday, February 10, 2020 to discuss operating highlights and financial results for the fourth quarter and full-year 2019. The conference call will be webcast live and may be accessed at Luminex Corporation’s website at investor.luminexcorp.com. The presentation slides will be posted to our Investor Relations website after the market close on February 10, 2020. 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 1593082. The webcast will be archived for six months on our website using the ‘replay’ link.

ABOUT LUMINEX CORPORATION

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.

USE OF FORWARD-LOOKING STATEMENTS

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 2020 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®, xMAP® INTELLIFLEX, VERIGENE®, VERIGENE® II, 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 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 2020 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 Currie
Senior Vice President of Finance and
Chief Financial Officer
hcurrie@luminexcorp.com

512-219-8020

Jeff Christensen
Senior Director, Investor Relations
jeffc@luminexcorp.com
512-249-3033

LUMINEX CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands)

December 31,

December 31,

2019

2018

(unaudited)

ASSETS

Current assets:

Cash and cash equivalents

$         59,173

$         76,441

Accounts receivable, net

55,815

53,396

Inventories, net

77,084

63,250

Prepaids and other

10,398

9,657

Total current assets

202,470

202,744

Property and equipment, net

65,515

66,288

Intangible assets, net

90,336

105,148

Deferred income taxes

27,702

21,470

Goodwill

118,145

118,127

Right of use assets

20,439

Other

19,122

11,398

Total assets

$       543,729

$       525,175

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current liabilities:

Accounts payable

$         17,983

$         14,504

Accrued liabilities

31,872

26,772

Deferred revenue – current portion

8,214

10,099

Total current liabilities

58,069

51,375

Deferred revenue

1,633

1,079

Lease liabilities

17,182

Other long-term liabilities

1,985

5,065

Total liabilities

78,869

57,519

Stockholders’ equity:

Common stock

44

44

Additional paid-in capital

380,304

365,349

Accumulated other comprehensive loss

(1,380)

(1,127)

Retained earnings

85,892

103,390

Total stockholders’ equity

464,860

467,656

Total liabilities and stockholders’ equity

$       543,729

$       525,175

LUMINEX CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share amounts)

Three Months Ended

Twelve Months Ended

December 31,

December 31,

2019

2018

2019

2018

(unaudited)

(unaudited)

Revenue

$90,501

$81,133

$   334,638

$315,818

Cost of revenue

40,636

32,792

151,899

120,327

Gross profit

49,865

48,341

182,739

195,491

Operating expenses:

Research and development

12,933

13,170

56,228

47,164

Selling, general and administrative

31,098

32,036

127,183

111,816

Amortization of acquired intangible assets

2,851

2,167

11,407

8,665

Total operating expenses

46,882

47,373

194,818

167,645

Income (loss) from operations

2,983

968

(12,079)

27,846

Other income (expense), net

3,196

3,100

465

(Loss) income from equity method investment

(523)

(523)

Income (loss) before income taxes

5,656

968

(9,502)

28,311

Income tax benefit (expense)

(2,273)

(3,263)

5,664

(9,803)

Net income (loss)

$  3,383

$ (2,295)

$     (3,838)

$  18,508

Net income (loss) attributable to common stockholders

Basic

$  3,322

$ (2,257)

$     (3,773)

$  18,196

Diluted

$  3,322

$ (2,258)

$     (3,775)

$  18,197

Net income (loss) per share attributable to common stockholders

Basic

$    0.08

$   (0.05)

$       (0.09)

$     0.42

Diluted

$    0.07

$   (0.05)

$       (0.09)

$     0.41

Weighted-average shares used in computing net income per share

Basic

44,263

43,867

44,148

43,727

Diluted

44,503

44,563

44,148

44,291

Dividends declared per share

$    0.09

$    0.06

$        0.30

$     0.24

LUMINEX CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

Three Months Ended

Twelve Months Ended

December 31,

December 31,

2019

2018

2019

2018

(unaudited)

(unaudited)

Cash flows from operating activities:

Net income (loss)

$  3,383

$ (2,295)

$     (3,838)

$18,508

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

Depreciation and amortization

7,358

5,937

28,529

23,674

Stock-based compensation

3,554

3,766

13,198

12,226

Deferred income tax (benefit) expense

3,526

(491)

(7,444)

8,159

Loss on sale or disposal of assets

409

287

641

730

(Earnings) loss on equity method investment

(2,719)

(2,719)

Other

203

(83)

(329)

(1,369)

Changes in operating assets and liabilities:

Accounts receivable, net

(10,004)

(11,192)

(2,440)

(1,569)

Inventories, net

(956)

(1,243)

(13,559)

(6,827)

Other assets

819

1,424

4,789

(3,319)

Accounts payable

(1,170)

1,712

3,370

4

Accrued liabilities

1,326

6,543

(5,630)

103

Deferred revenue

(421)

(74)

(1,031)

579

Net cash provided by (used in) operating activities

5,308

4,291

13,537

50,899

Cash flows from investing activities:

Purchase of property and equipment

(3,133)

(7,028)

(16,249)

(21,292)

Business acquisition consideration, net of cash acquired

(65,381)

(65,381)

Proceeds from net working capital adjustments related to business acquisition

1,915

Issuance of note receivable

(1,000)

Purchase of equity method investment

(6,980)

(6,980)

Proceeds from (payments to) cost method investment

735

735

(1,782)

Proceeds from sale of assets

2

2

Acquired technology rights

(40)

(40)

(4,000)

Net cash used in investing activities

(9,418)

(72,407)

(20,619)

(93,453)

Cash flows from financing activities:

Proceeds from issuance of common stock

1,269

588

3,750

4,570

Shares surrendered for tax withholding

(6)

(278)

(2,095)

(2,312)

Dividends paid

(4,055)

(2,676)

(12,153)

(10,654)

Net cash used in financing activities

(2,792)

(2,366)

(10,498)

(8,396)

Effect of foreign currency exchange rate on cash

24

29

312

279

Change in cash and cash equivalents

(6,878)

(70,453)

(17,268)

(50,671)

Cash and cash equivalents, beginning of period

66,051

146,894

76,441

127,112

Cash and cash equivalents, end of period

$59,173

$76,441

$     59,173

$76,441

SOURCE Luminex Corporation

Related Links

http://www.luminexcorp.com

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