Luminex Corporation Reports Fourth Quarter and Full Year 2010 Results

AUSTIN, Texas, Feb. 7, 2011 /PRNewswire/ -- Luminex Corporation (Nasdaq: LMNX) today announced financial results for the fourth quarter and year ended December 31, 2010. Recent financial and operating highlights include the following:

• Fourth quarter 2010 consolidated revenue was $41.2 million, an 8 percent increase over the fourth quarter of 2009; full year 2010 revenue was $141.6 million, a 17 percent increase over 2009.
• Record system revenue of $10.3 million for the fourth quarter of 2010 reflects an increase of 11 percent over the same prior year period, and full year system revenue of $33.0 million, a 7 percent increase over the full year 2009; total shipments of multiplexing analyzers for the quarter were 286. Cumulative life to date multiplexing analyzer shipments reached 7,700, up 14 percent from a year ago.
• Fourth quarter 2010 consumable revenue of $12.0 million, an increase of 49 percent from the year ago period due to broad based growth in bulk orders. 2010 full year consumable revenue of $40.1 million grew 41% over 2009.
• Luminex's Assay Group realized assay revenue of $9.2 million for the fourth quarter 2010, down 28 percent over the same prior year period, while full year assay revenue was $32.2 million, up 4 percent over 2009.
• Signed long-term renewal of our 10-year strategic partnership with One Lambda, Inc., one of our top partners and the worldwide leader in the HLA typing and antibody screening market.
• Signed global OEM agreement with Tecan Group, a global leader in sample prep automation, to develop high volume automation solutions.

GAAP net income for the fourth quarter of 2010 was $3.2 million or, $0.07 per diluted share.  GAAP net income for 2010 was $5.2 million or $0.12 per diluted share, compared with 2009 net income of $17.7 million or $0.43, per diluted share.  For comparability purposes, adjusted net income for 2009, excluding the effect of the release of the valuation allowance and the settlement of litigation, was $2.4 million or $0.06 per diluted share. A reconciliation of adjusted net income to GAAP net income is provided at the end of this press release.

LUMINEX CORPORATION REVENUE SUMMARY (unaudited)
	Three Months Ended
	December 31,				Variance
	2010		2009		($)		(%)
	(in thousands, except percentages)
System sales	$   10,304		$     9,307		$      997		11%
Consumable sales	11,954		8,033		3,921		49%
Royalty revenue	6,044		4,788		1,256		26%
Assay revenue	9,242		12,890		(3,648)		-28%
All other revenue	3,646		3,149		497		16%
	$   41,190		$   38,167		$   3,023		8%
	Twelve Months Ended
	December 31,				Variance
	2010		2009		($)		(%)
	(in thousands, except percentages)
System sales	$   32,984		$   30,711		$   2,273		7%
Consumable sales	40,104		28,380		11,724		41%
Royalty revenue	22,414		18,312		4,102		22%
Assay revenue	32,204		31,054		1,150		4%
All other revenue	13,851		12,186		1,665		14%
	$ 141,557		$ 120,643		$ 20,914		17%

LUMINEX CORPORATION REPORTABLE SEGMENT HIGHLIGHTS (unaudited)
	Three Months Ended				Twelve Months Ended
	December 31,				December 31,
	2010		2009		2010		2009
	(in thousands)
Revenue
Technology and strategic partnerships	$ 30,550		$ 24,794		$ 105,586		$ 87,389
Assays and related products	10,640		13,373		35,971		33,254
Total Revenue	41,190		38,167		141,557		120,643
Operating income (loss)
Technology and strategic partnerships	5,872		2,669		15,977		8,122
Assays and related products	(789)		2,629		(4,726)		(723)
Total Operating income	5,083		5,298		11,251		7,399

"We are very pleased with the record fourth quarter performance and what we accomplished in 2010," said Patrick J. Balthrop, president and chief executive officer of Luminex. "Despite the tough year-over-year comparison due to strong H1N1-related demand for xTAG RVP in 2009, we delivered 17% consolidated annual revenue growth. Our performance reflects increasing adoption of our proprietary technology due to the power of multiplexing, the commitment of our partners and the dedication of our employees. We are particularly pleased with the performance of our proprietary consumable and royalty revenue streams, which grew 41% and 22%, respectively, in 2010. We are pleased with the successful launch of our newest multiplexing analyzer, MAGPIX, and anticipate it will make a strong contribution to our overall capital equipment sales in the future.  

"Our solid performance generated nearly $10 million in operating cashflow in the quarter, adding to an already strong balance sheet, and enhancing the Company's ability to respond to strategic opportunities," continued Balthrop. "Looking at 2011 and beyond, we are excited about the broad growth opportunities in which Luminex, through its solid product pipeline and strong partnership model, can further develop its market leadership position."

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 2011 is as follows:

• The Company expects full year 2011 revenue to be between $163 million and $170 million.  The full year figures represent an increase of between 15 percent and 20 percent over reported 2010 revenue.

CONFERENCE CALL

Management will host a conference call to discuss the operating highlights and financial results for the fourth quarter ended December 31, 2010, on Monday, February 7, 2011, 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' 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 our projected revenue, sales growth, future MAGPIX sales, the adequacy of our balance sheet, our ability to respond to strategic opportunities and our product and partner pipeline.  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' actual results or performance to differ materially include risks and uncertainties relating to, among others, market demand and acceptance of Luminex' 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, Luminex' 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' 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' 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 2011 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' expectations with regard thereto or any change in events, conditions or circumstances on which any such statements are based.

Contacts:	Harriss T. Currie	Matthew Scalo
	Vice President, Finance and Chief Financial Officer	Sr. Director of Investor Relations
	512-219-8020	512-219-8020
	[e-mail]	[e-mail]

LUMINEX CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
	December 31,
	2010		2009
	(unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$      89,487		$   90,843
Restricted cash	1,002		-
Short-term investments	28,404		8,511
Accounts receivable, net	20,936		22,108
Inventories, net	24,932		17,524
Deferred income taxes	4,225		1,040
Prepaids and other	2,732		2,130
Total current assets	171,718		142,156
Property and equipment, net	22,084		17,255
Intangible assets, net	12,944		12,938
Deferred income taxes	6,363		14,732
Long-term investments	6,021		20,228
Goodwill	42,250		39,617
Other	4,430		1,087
Total assets	$    265,810		$ 248,013
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable	$        7,621		$     8,430
Accrued liabilities	7,444		7,493
Deferred revenue	3,866		2,967
Current portion of long term debt	849		868
Total current liabilities	19,780		19,758
Long-term debt	3,351		3,591
Deferred revenue	4,303		4,614
Other	3,511		1,312
Total liabilities	30,945		29,275
Stockholders' equity:
Common stock	41		41
Additional paid-in capital	295,422		285,648
Accumulated other comprehensive gain	1,150		28
Accumulated deficit	(61,748)		(66,979)
Total stockholders' equity	234,865		218,738
Total liabilities and stockholders' equity	$    265,810		$ 248,013

LUMINEX CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
	Three Months Ended				Twelve Months Ended
	December 31,				December 31,
	2010		2009		2010		2009
	(unaudited)				(unaudited)
Revenue	$ 41,190		$ 38,167		$    141,557		$ 120,643
Cost of revenue	12,611		12,512		45,180		39,349
Gross profit	28,579		25,655		96,377		81,294
Operating expenses:
Research and development	6,736		5,506		23,410		20,752
Selling, general and administrative	16,760		14,851		61,716		53,143
Total operating expenses	23,496		20,357		85,126		73,895
Income from operations	5,083		5,298		11,251		7,399
Interest expense from long-term debt	(85)		(123)		(419)		(481)
Other income, net	119		126		519		719
Settlement of litigation	-		-		-		(4,350)
Income before income taxes	5,117		5,301		11,351		3,287
Income taxes	(1,918)		14,715		(6,120)		14,442
Net income	$   3,199		$ 20,016		$        5,231		$   17,729
Net income per share, basic	$     0.08		$     0.49		$          0.13		$       0.44
Shares used in computing net income per share, basic	41,199		40,697		41,030		40,562
Net income per share, diluted	$     0.07		$     0.48		$          0.12		$       0.43
Shares used in computing net income per share, diluted	42,671		41,604		42,438		41,633

LUMINEX CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
	Three Months Ended				Twelve Months Ended
	December 31,				December 31,
	2010		2009		2010		2009
	(unaudited)				(unaudited)
Cash flows from operating activities:
Net income	$   3,199		$ 20,016		$        5,231		$ 17,729
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization	2,404		2,334		8,898		8,329
Stock-based compensation	2,511		2,343		9,436		8,160
Deferred income tax benefit	1,515		(15,498)		5,005		(15,496)
Excess income tax benefit from employee
stock-based awards	1,290		-		-		-
Loss on disposal of assets	-		-		-		25
Other	(140)		408		709		1,665
Changes in operating assets and liabilities:
Accounts receivable, net	(1,867)		(2,839)		2,199		(10,827)
Inventories, net	(746)		(4,827)		(5,811)		(5,935)
Other assets	(178)		(671)		(332)		(699)
Accounts payable	646		3,296		(1,776)		3,672
Accrued liabilities	1,117		2,258		80		(765)
Deferred revenue	(654)		(368)		536		(55)
Net cash provided by operating activities	9,097		6,452		24,175		5,803
Cash flows from investing activities:
Purchases of available-for-sale securities	(3,008)		(6,115)		(29,673)		(62,764)
Maturities of available-for-sale securities	7,500		10,988		23,693		33,968
Maturities of held-to-maturity securities	-		2,423		-		42,501
Purchase of property and equipment	(2,540)		(1,751)		(11,102)		(10,369)
Business acquisition consideration, net of cash acquired	24		-		(5,012)		-
Increase in restricted cash	-		-		(1,000)		-
Purchase of cost method investment	(5)		-		(2,081)		-
Acquired technology rights	(625)		(8)		(1,825)		(29)
Net cash provided by (used in) investing activities	1,346		5,537		(27,000)		3,307
Cash flows from financing activities:
Payments on debt	-		-		(895)		(440)
Proceeds from debt	-		-		-		453
Proceeds from issuance of common stock	726		204		2,173		567
Excess income tax benefit from employee
stock-based awards	(1,290)		-		-		-
Net cash (used in) provided by financing activities	(564)		204		1,278		580
Effect of foreign currency exchange rate on cash	379		(90)		191		(466)
Change in cash and cash equivalents	10,258		12,103		(1,356)		9,224
Cash and cash equivalents, beginning of period	79,229		78,740		90,843		81,619
Cash and cash equivalents, end of period	$ 89,487		$ 90,843		$      89,487		$ 90,843

LUMINEX CORPORATION
RECONCILIATION OF ADJUSTED NET INCOME TO GAAP NET INCOME
(in thousands, except per share amounts)
	Three Months Ended				Twelve Months Ended
	December 31,				December 31,
	2010		2009		2010		2009
	(unaudited)
Net income	$ 3,199		$ 20,016		$ 5,231		$ 17,729
Adjusting items:
Settlement of litigation	-		-		-		4,350
Income tax adjustment*	-		(15,707)		-		(19,665)
Adjusted net income	$ 3,199		$   4,309		$ 5,231		$   2,414
Adjusted net income per share, basic	$   0.08		$     0.11		$   0.13		$     0.06
Shares used in computing adjusted net income
per share, basic	41,199		40,697		41,030		40,562
Adjusted net income per share, diluted	$   0.07		$     0.10		$   0.12		$     0.06
Shares used in computing adjusted net
income per share, diluted	42,671		41,604		42,438		41,633
* Income tax adjustment illustrates 2009 financial results without the effect of the release of the valuation
allowance on the U.S. deferred tax assets for comparison to 2010 financial results

The Company believes that the non-GAAP measure used in this presentation, when presented in conjunction with the comparable GAAP measure, is useful to both management and investors in analyzing financial and business trends regarding the Company's ongoing business and operating performance. This non-GAAP measure should be considered in addition to, but not as a substitute for, items prepared in accordance with GAAP.

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SOURCE Luminex Corporation

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