Luminex Corporation (NASDAQ:LMNX) today announced financial results
for the fourth quarter and year ended December 31, 2007. Recent
financial and operating highlights include the following:
Consolidated fourth quarter revenue of $21.5 million, a 51 percent
increase over the fourth quarter of 2006; and year to date revenue
of $75.0 million, a 42 percent increase over calendar year 2006
Record system shipments of 250 for the fourth quarter, for an
installed base total of 4,979 at the end of 2007, up 21 percent
from a year ago Consumables and royalty revenue up 48 and 25
percent, respectively, from the fourth quarter of 2006. After
eliminating royalties received from Tm Bioscience, royalties grew
by 34 percent over the fourth quarter of 2006 and 30 percent over
the prior year Consolidated gross profit margin of 62 percent for
the fourth quarter and 61 percent for 2007 U.S. Food and Drug
Administration (FDA) approval of xTAG� Respiratory Viral Panel
(RVP) Settlement of Rules Based Medicine, Inc. (RBM) litigation for
total proceeds to the company of $12.5 million Subsequent to the
acquisition of Luminex Molecular Diagnostics (formerly Tm
Bioscience), or LMD, on March 1, 2007, Luminex has reported the
results of the Technology and Assay Groups as segments in addition
to the consolidated results. The Technology Group consists of
system sales to partners, raw bead sales, royalties, service and
support of the technology and other miscellaneous items. The Assay
Group consists of the Luminex Bioscience Group, or LBG, and LMD.
This segment is primarily involved in the development and sale of
assays on xMAP technology for use on the Company�s installed base
of systems. Consolidated revenue for the fourth quarter of 2007 was
$21.5 million, a 51 percent increase compared with $14.2 million in
the fourth quarter of 2006. Net income for the fourth quarter of
2007 was $11.1�million, or $0.30 per fully diluted share, compared
with $0.6 million, or $0.02 per fully diluted share, for the same
period last year. The results for the fourth quarter of 2007
include (i) $11.5 million of the $12.5 million one-time payment
received for the settlement of litigation with RBM and (ii) the
effects of the settlement of a liability related to the
renegotiation of a contract acquired as part of the acquisition of
Tm Bioscience in the amount of $2.3 million. Consolidated revenue
for the year ended December 31, 2007, was $75.0 million, an
increase of 42 percent compared with $53.0 million for the year
ended December 31, 2006. Net loss for 2007 was $2.7 million, or
$(0.08) per fully diluted share, compared with net income of
$1.5�million, or $0.05 per fully diluted share, in 2006. As a
reminder, Assay Group results for 2006 in the table below consisted
of LBG only. LBG introduced its first two products in late 2006.
LMD results from the date of acquisition, March�1,�2007 through
December 31, 2007, are included in the table below. LUMINEX
CORPORATION REPORTABLE SEGMENT HIGHLIGHTS (unaudited) (in
thousands) � � � � � Three Months Ended December 31, Twelve Months
Ended December 31, 2007 2006 2007 2006 � Revenue Technology group $
18,582 $ 14,205 $ 65,912 $ 52,970 Assay group 4,093 5 12,642 19
Eliminations of intersegment revenue � (1,174 ) � - � � (3,544 ) �
- � 21,501 14,210 75,010 52,989 � Operating income (loss)
Technology group 1,173 639 2,841 1,450 Assay group (4,142 ) (632 )
(20,087 ) (2,031 ) Eliminations of intersegment operating income �
26 � � - � � (172 ) � - � Operating income (loss) (2,943 ) 7
(17,418 ) (581 ) �Our fourth quarter performance marked a strong
finish to a year of significant progress for Luminex,� said Patrick
J. Balthrop, president and chief executive officer of Luminex. �We
are pleased with the increasing adoption of xMAP in the marketplace
as total system placements reached 4,979 at the end of 2007, an
annual increase of 862 systems and 21 percent. Consumables and
royalty revenues in the fourth quarter were up 48 percent and 25
percent, respectively, over the same period a year ago and
contributed to our solid gross profit margin of 62 percent. Royalty
growth, which excludes Tm Bioscience submissions for all periods
presented, increased by 34 percent over the fourth quarter of 2006.
Our growth in royalties reflects the high rate of adoption of our
technology in the marketplace, and the increasing market share
being captured by our strategic partners. �We are very pleased with
the execution of our Assay Group as evidenced by our recent key
product launches,� added Balthrop. �During the fourth quarter, we
announced the launch of FlexmiR Select, a new microRNA (miRNA)
assay developed by LBG and designed to allow researchers to further
advance understanding and enhance the analysis of miRNAs. At the
beginning of 2008, we reached an important milestone as Luminex
received 510(k) clearance from the FDA for the xTAG� Respiratory
Viral Panel (RVP). This represents the first product launch by LMD
and further enhances our position in the molecular diagnostics
market. With these new developments by LMD and LBG and a robust
pipeline, the continued adoption of xMAP technology and our
expanding partner base, we believe Luminex is well positioned for
continued success in 2008.� The financial condition and results of
operations of the Company set forth herein reflect the Company's
purchase price allocation of the acquired assets and liabilities
associated with the Tm Bioscience (now LMD) acquisition. FINANCIAL
OUTLOOK AND GUIDANCE The Company intends to provide specific annual
revenue guidance, updated at each quarterly reporting period.
Guidance for Fiscal 2008 The Company expects full year 2008 revenue
to be between $95 million and $105�million. The full year figures
represent an increase of between 26 percent and 40�percent over
reported 2007 revenue. CONFERENCE CALL Management will host a
conference call to discuss the operating highlights and financial
results for the fourth quarter and year ended December 31, 2007,
and certain financial guidance for 2008, on Thursday, February 7,
2008, at 5:00 p.m. Eastern time. 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 one year on the website
using the 'replay' link. ABOUT LUMINEX CORPORATION 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. 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, 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, 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, risks and uncertainties associated with
implementing our acquisition strategy and the ability to integrate
acquired companies, including Tm�Bioscience Corporation, 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 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, except as required by law.
LUMINEX CORPORATION CONDENSED CONSOLIDATED BALANCE SHEETS (in
thousands) � � December 31, December 31, 2007 2006 ASSETS Current
assets: Cash and cash equivalents $ 27,233 $ 27,414 Short-term
investments 6,944 10,956 Accounts receivable, net 11,827 8,237
Inventory, net 6,508 4,571 Other � 856 � � 1,917 � � Total current
assets 53,368 53,095 � Property and equipment, net 12,673 4,985
Intangible assets, net 16,919 - Long-term investments - 7,346
Goodwill 39,617 - Other � 982 � � 1,270 � � Total assets $ 123,559
� $ 66,696 � � LIABILITIES AND STOCKHOLDERS' EQUITY Current
liabilities: Accounts payable $ 3,346 $ 3,255 Accrued liabilities
6,811 2,905 Deferred revenue and other � 2,410 � � 2,756 � � Total
current liabilities 12,567 8,916 Long-term debt 2,976 - Deferred
revenue and other � 4,536 � � 3,621 � Total liabilities � 20,079 �
� 12,537 � � Stockholders' equity: Common stock 35 32 Additional
paid-in capital 191,218 139,116 Accumulated other comprehensive
gain (8 ) 65 Accumulated deficit � (87,765 ) � (85,054 ) � Total
stockholders' equity � 103,480 � � 54,159 � � Total liabilities and
stockholders' equity $ 123,559 � $ 66,696 � LUMINEX CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands,
except per share amounts) � � � � � Three Months Ended Twelve
Months Ended December 31, December 31, 2007 2006 2007 2006 �
Revenue $ 21,501 $ 14,210 $ 75,010 $ 52,989 � Cost of revenue �
8,191 � � 5,660 � � 28,916 � � 20,737 � � Gross profit 13,310 8,550
46,094 32,252 � Operating expenses: � Research and development
4,348 2,338 15,383 8,673 � Selling, general and administrative
11,905 6,205 40,729 24,160 � In-process research and development
expense � - � � - � � 7,400 � � - � � Total operating expenses �
16,253 � � 8,543 � � 63,512 � � 32,833 � � Loss from operations
(2,943 ) 7 (17,418 ) (581 ) � Interest expense from long-term debt
(116 ) - (513 ) - � Other income, net 602 597 1,665 2,108 �
Settlement of litigation 11,500 - 11,500 - � Gain on settlement of
liability 2,345 - 2,345 - � Income taxes � (327 ) � (5 ) � (290 ) �
(20 ) � Net income (loss) $ 11,061 � $ 599 � $ (2,711 ) $ 1,507 � �
Net income (loss) per share, basic $ 0.31 � $ 0.02 � $ (0.08 ) $
0.05 � � Shares used in computing net income (loss) per share,
basic 35,302 31,658 34,361 31,434 � Net income (loss) per share,
diluted $ 0.30 � $ 0.02 � $ (0.08 ) $ 0.05 � � Shares used in
computing net income (loss) per share, diluted 36,708 33,022 34,361
32,988 LUMINEX CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF
CASH FLOWS (in thousands) � � � � Three Months Ended Twelve Months
Ended December 31, December 31, 2007 2006 2007 2006 Operating
activities: Net income (loss) $ 11,061 $ 599 $ (2,711 ) $ 1,507
Adjustments to reconcile net income (loss) to net cash provided by
operating activities: Depreciation and amortization 1,618 390 5,063
1,483 In-process research and development expense - - 7,400 - Gain
on settlement of liability (2,345 ) - (2,345 ) - Stock-based
compensation and other 1,749 1,654 6,593 5,511 Other 267 (38 ) 356
(24 ) Changes in operating assets and liabilities: Accounts
receivable, net 375 59 (3,255 ) (1,657 ) Inventory, net 1,094 (110
) (129 ) (290 ) Prepaids and other 777 (918 ) 1,019 (1,009 )
Accounts payable (32 ) 930 (2,958 ) (602 ) Accrued liabilities 906
71 (715 ) (307 ) Deferred revenue � 478 � � (191 ) � 75 � � (566 )
� Net cash provided by (used in) operating activities � 15,948 � �
2,446 � � 8,393 � � 4,046 � � Investing activities: Net purchases
of held-to-maturity investments 1,649 519 11,392 (1,889 ) Purchase
of property and equipment (1,355 ) (668 ) (6,685 ) (2,638 )
Acquisition of business, net of cash acquired - - (2,686 ) -
Acquired technology rights - - (265 ) (25 ) Other � (5 ) � 21 � �
20 � � 45 � � Net cash provided by (used in) investing activities �
289 � � (128 ) � 1,776 � � (4,507 ) � Financing activities:
Payments on debt - - (12,349 ) - Proceeds from issuance of common
stock 1,236 189 1,868 2,622 Other � - � � - � � 13 � � - � � Net
cash provided by (used in) financing activities � 1,236 � � 189 � �
(10,468 ) � 2,622 � � Effect of foreign currency exchange rate on
cash 35 21 118 47 Change in cash and cash equivalents 17,508 2,528
(181 ) 2,208 Cash and cash equivalents, beginning of period � 9,725
� � 24,886 � � 27,414 � � 25,206 � � Cash and cash equivalents, end
of period $ 27,233 � $ 27,414 � $ 27,233 � $ 27,414 � �
Supplemental disclosure of cashflow information: Interest and
penalties paid $ 6 $ - $ 1,360 $ - Purchase of leasehold
improvements under trade payable arrangement paid in 2007 - 445 -
445 � Supplemental disclosure of non-cash effect of acquisitions:
Purchase price $ - $ - $ (49,401 ) $ - Common stock issued - -
41,755 - Conversion of Tm options and warrants - - 2,315 -
Forgiveness of receivable from acquired company - - 1,232 -
Write-off of acquired technology rights - - 473 - Cash acquired � -
� � - � � 940 � � - � Acquisition, net of cash acquired $ - � $ - �
$ (2,686 ) $ - �
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