Luminex Corporation Reports Second Quarter 2007 Results

AUSTIN, Texas, July 25  /PRNewswire-FirstCall/ -- Luminex Corporation (NASDAQ:LMNX) today announced financial results for the second quarter and six months ended June 30, 2007.  Financial and operating highlights include the following:

   - Consolidated total revenue of $17.5 million, a 32 percent increase
     year-over-year
   - System shipments surpass 4,500, up 20 percent from a year ago
   - Consolidated gross margin of 59 percent
   - Announced a distribution agreement with Exiqon for the FlexmiR(TM) line
     of products co-developed by the companies in 2006
   - Unveiled FlexMAP 3D(TM), a next generation bead-based multiplexing
     system
   - Completion of manufacturing space update/expansion in response to
     expanded product offerings
   - Partner successes, including Bio-Rad BioPlex 2200 Quest deal
   - Named Doug Bryant as Executive Vice President and Chief Operating
     Officer



Consolidated revenue for the second quarter of 2007 was $17.5 million compared with $13.3 million in the second quarter of 2006. Consolidated net loss for the second quarter of 2007 was $3.2 million, or $0.09 per share, as compared with net income of $271,000, or $0.01 per share, for the comparable period of 2006.

On March 1, 2007, Luminex completed the acquisition of Tm Bioscience Corporation, a leader in the commercial genetic testing market.  Beginning with the first quarter of 2007, Luminex reported the following segments: Technology Group and Assay Group.  The Technology Group consists of system sales to partners, raw bead sales, royalties, service and support of the core technology and other miscellaneous items.  The Assay Group consists of the Luminex Bioscience Group, or LBG, and the acquired Tm Bioscience operations, now known as Luminex Molecular Diagnostics, or LMD.  This segment is primarily involved in the development and sale of assays on xMAP(R) technology for use on the Company's installed base of systems.

The Assay Group results for the second quarter of 2007 include three months of revenue from LBG and from LMD.  Assay Group results for 2006 consist of LBG only.  LBG introduced its first two products in the fourth quarter of 2006.

                             LUMINEX CORPORATION
                        REPORTABLE SEGMENT HIGHLIGHTS
                                 (unaudited)
                                (in thousands)

                                       Three Months Ended  Six Months Ended
                                            June 30,           June 30,
                                         2007     2006      2007     2006
                                        -------- -------- -------- --------
  Revenue
    Technology group                     $14,822  $13,254  $30,560  $26,251
    Assay group                            4,000       14    5,200       14
    Eliminations of intersegment revenue  (1,274)       -   (1,605)       -
                                        -------- -------- -------- --------
  Total revenue                           17,548   13,268   34,155   26,265

  Operating income (loss)
    Technology group                        (408)     231      740      786
    Assay group                           (2,623)    (498)  (4,078)    (940)
    Eliminations of intersegment
     operating income                       (354)       -     (419)       -
                                        -------- -------- -------- --------
  Operating income (loss)                 (3,385)    (267)  (3,757)    (154)




"The results for the second quarter of 2007 reflect continued quarterly revenue growth and a solid performance for Luminex," said Patrick J. Balthrop, president and chief executive officer of Luminex.  "Our xMAP platform continues to build critical mass across many segments of the life sciences marketplace.   We surpassed another milestone with over 4,500 Luminex systems placed in research laboratories, clinical laboratories, bio-defense facilities and academic institutions around the world at the end of the second quarter. With our proprietary technologies, growing installed base of instruments and expanding distribution channels through our strategic partnerships, we have the opportunity to leverage these assets and achieve further market penetration in 2007.

"We are pleased with our continued progress in the integration of LMD into our operations," added Balthrop.  "Our integration process is on track and we expect to deliver over $5 million in annual synergies from the combined companies.  With our additional internal assay capabilities, we have several exciting opportunities to further capitalize on the growing molecular diagnostics market.  We also continued to make strategic investments in our research efforts and, as a result, made significant progress in assay product development through LBG.  With the addition of Doug Bryant to our management team as chief operating officer, we have further enhanced our leadership team to execute our strategy in these key areas and expand our market reach."

CONFERENCE CALL

Management will host a conference call to discuss the operating highlights and financial results for the second quarter ended June 30, 2007, on Thursday, July 26, 2007, at 8:00 a.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 our 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(R) 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(R) 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(R) 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.

   Contact:  Harriss T. Currie
             Vice President, Finance and Chief Financial Officer
             512-219-8020
             



                      LUMINEX CORPORATION
             CONDENSED CONSOLIDATED BALANCE SHEETS
                         (in thousands)

                                         June 30,    December 31,
                                           2007          2006
                                        -----------  -----------
                                        (unaudited)
                        ASSETS
  Current assets:
     Cash and cash equivalents             $11,836      $27,414
     Short-term investments                  3,314       10,956
     Accounts receivable, net               11,614        8,237
     Inventory, net                          7,100        4,571
     Other                                   1,874        1,917
                                        -----------  -----------
     Total current assets                   35,738       53,095

  Property and equipment, net               10,189        4,985
  Intangible assets, net                     2,142            -
  Long-term investments                      5,311        7,346
  Goodwill                                  65,432 (1)        -
  Other                                      1,705        1,270
                                        -----------  -----------
  Total assets                            $120,517      $66,696
                                        ===========  ===========

          LIABILITIES AND STOCKHOLDERS' EQUITY
  Current liabilities:
     Accounts payable                       $3,687       $3,255
     Accrued liabilities                     8,219        2,905
     Deferred revenue and other              3,073        2,756
                                        -----------  -----------
     Total current liabilities              14,979        8,916
  Long-term debt                             3,825            -
  Deferred revenue and other                 3,814        3,621
                                        -----------  -----------
  Total liabilities                         22,618       12,537
                                        -----------  -----------
  Stockholders' equity:
     Common stock                               35           32
     Additional paid-in capital            186,059      139,116
     Accumulated other comprehensive
      gain                                     (80)          65
     Accumulated deficit                   (88,115)     (85,054)
                                        -----------  -----------
     Total stockholders' equity             97,899       54,159
                                        -----------  -----------
  Total liabilities and stockholders'
   equity                                 $120,517      $66,696
                                        ===========  ===========

  (1) Luminex has recorded $65.4 million of goodwill related to the Tm
      Bioscience acquisition.  This goodwill asset is subject to adjustment
      as Luminex completes certain standard activities around the
      transaction such as: recording of final transaction related costs and
      allocation of the purchase price based on our final determination of
      the fair market value of the acquired operation's assets and
      liabilities.  No assurances can be given as to the size of any
      subsequent goodwill adjustment, if any, at this time.  Luminex
      anticipates it will complete the purchase price allocations during the
      third quarter of 2007 and a portion of the goodwill balance will be
      allocated to the identified intangible assets at that time.



                             LUMINEX CORPORATION
               CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                   (in thousands, except per share amounts)

                                        Three Months Ended  Six Months Ended
                                            June 30,            June 30,
                                        ----------------- -----------------
                                          2007     2006     2007      2006
                                        -------- -------- -------- --------
                                           (unaudited)        (unaudited)

  Revenue                                $17,548  $13,268  $34,155  $26,265

  Cost of revenue                          7,211    5,608   13,388   10,346
                                        -------- -------- -------- --------
     Gross profit                         10,337    7,660   20,767   15,919

  Operating expenses:

     Research and development              3,865    1,790    6,571    3,987

     Selling, general and administrative   9,857    6,137   17,953   12,086
                                        -------- -------- -------- --------
     Total operating expenses             13,722    7,927   24,524   16,073
                                        -------- -------- -------- --------
  Loss from operations                    (3,385)    (267)  (3,757)    (154)

     Interest expense from long-term
      debt                                  (334)       -     (419)       -

     Other income, net                       421      551    1,028      967

     Income taxes                            101      (13)      87      (16)
                                        -------- -------- -------- --------
  Net income (loss)                      $(3,197)    $271  $(3,061)    $797
                                        ======== ======== ======== ========
  Net income (loss) per share, basic      $(0.09)   $0.01   $(0.09)   $0.03
                                        ======== ======== ======== ========
  Shares used in computing net income
   (loss) per share, basic                35,006   31,386   33,504   31,288

  Net income (loss) per share, diluted    $(0.09)   $0.01   $(0.09)   $0.02
                                        ======== ======== ======== ========
  Shares used in computing net income
   (loss) per share, diluted              35,006   32,876   33,504   32,606



                             LUMINEX CORPORATION
               CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                (in thousands)

                                       Three Months Ended   Six Months Ended
                                            June 30,            June 30,
                                       ------------------  -----------------
                                         2007     2006      2007       2006
                                       --------- -------  --------- --------
                                          (unaudited)         (unaudited)
  Operating activities:
     Net income (loss)                  $(3,197)    $271   $(3,061)    $797
     Adjustments to reconcile net
      income (loss)  to net cash
      provided by operating activities:
        Depreciation and amortization       978      384     1,518      748
        Stock-based compensation and
         other                            1,593    1,259     3,100    2,424
        (Gain) loss on disposal of
         assets                              34       (2)       88       25
        Other                                 4       (7)        4       (9)
     Changes in operating assets and
      liabilities:
        Accounts receivable,
         net                               (580)  (3,136)   (1,657)  (1,476)
        Inventory, net                     (689)     460      (721)     138
        Prepaids and other                 (460)    (399)     (120)      29
        Accounts payable                 (2,263)    (254)   (3,817)  (1,506)
        Accrued liabilities                 772      335    (2,353)    (835)
        Deferred revenue                   (217)       5       143     (225)
                                       --------- -------  --------- --------
  Net cash provided by (used in)
   operating activities                  (4,025)  (1,084)   (6,876)     110
                                       --------- -------  --------- --------
  Investing activities:
     Net purchases of held-to-maturity
      investments                         2,185      955     9,710   (1,045)
     Purchase of property and equipment  (1,724)    (643)   (3,329)  (1,528)
     Acquisition of business, net of
      cash acquired                        (744)       -    (2,735)       -
     Acquired technology rights            (265)       -      (265)       -
     Proceeds from sale of assets            30        2        30        7
                                       --------- -------  --------- --------
  Net cash provided by (used in)
   investing activities                    (518)     314     3,411   (2,566)
                                       --------- -------  --------- --------
  Financing activities:
     Payments on debt                      (117)       -   (12,345)       -
     Proceeds from issuance of common
      stock                                 159      358       174    1,434
     Other                                    7        -         7        -
                                       --------- -------  --------- --------
  Net cash provided by (used in)
   financing activities                      49      358   (12,164)   1,434

  Effect of foreign currency exchange
   rate on cash                             135       16        51       22
  Change in cash and cash equivalents    (4,359)    (396)  (15,578)  (1,000)
  Cash and cash equivalents, beginning
   of period                             16,195   24,602    27,414   25,206
                                       --------- -------  --------- --------
  Cash and cash equivalents, end of
   period                               $11,836  $24,206   $11,836  $24,206
                                       ========= =======  ========= ========
  Supplemental disclosure of cashflow
   information:
    Interest and penalties paid            $254       $-    $1,335       $-

  Supplemental disclosure of non-cash
   effect of acquisitions:
     Purchase price                       $(744)      $-  $(47,745)      $-
     Common stock issued                      -        -    41,755        -
     Conversion of Tm options and
      warrants                                -        -     2,315        -
     Cash acquired                            -        -       940        -
                                       --------- -------  --------- --------
     Acquisition, net of cash acquired    $(744)      $-   $(2,735)      $-
                                       ========= =======  ========= ========


  SUPPLEMENTAL SCHEDULES (unaudited)

  The following table provides a detail of revenue by type for the
  consolidated Company for the three and six months ended June 30, 2007 and
  2006 (in thousands).

                                    Three Months Ended     Six Months Ended
                                          June 30,              June 30,
                                       (in thousands)        (in thousands)
                                      2007        2006       2007     2006
                                    ---------- ---------- --------- --------
  System Revenue                      $5,583      $5,811   $11,314   $9,803

  Consumable Revenue                   3,305       3,053     8,116    8,555

  Royalty Revenue                      2,241       2,001     4,773    3,791

  Reagent Revenue                      3,737          14     4,881       14

  Service Revenue                      1,087         811     2,090    1,618

  Other Miscellaneous Revenue          1,595       1,578     2,981    2,484
                                    ---------- ---------- --------- --------
  Total Revenue                      $17,548     $13,268   $34,155  $26,265
                                    ========== ========== ========= ========


DATASOURCE: Luminex Corporation



CONTACT:  Harriss T. Currie, Vice President, Finance and Chief Financial

Officer of Luminex Corporation, [phone],  



Web site:  http://www.luminexcorp.com/

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