Form 8-K LUMINEX CORP For: Feb 02

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February 2, 2015 4:10 PM EST


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section�13 OR 15(d) of The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): February 2, 2015 (February 2, 2015)


LUMINEX CORPORATION
(Exact name of registrant as specified in its charter)


DELAWARE
�
000-30109
�
74-2747608
(State or other jurisdiction of incorporation)
�
(Commission File Number)
�
(IRS Employer Identification No.)

12212 TECHNOLOGY BLVD., AUSTIN, TEXAS
�
78727
(Address of principal executive offices)
�
(Zip Code)


Registrant's telephone number, including area code: (512) 219-8020


N/A
(Former name or former address, if changed since last report.)


Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o
�
Written communications pursuant to Rule�425 under the Securities Act (17 CFR 230.425)
�
�
�
o
�
Soliciting material pursuant to Rule�14a-12 under the Exchange Act (17 CFR 240.14a-12)
�
�
�
o
�
Pre-commencement communications pursuant to Rule�14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
�
�
�
o
�
Pre-commencement communications pursuant to Rule�13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))





Item�2.02. Results of Operations and Financial Condition.

On February 2, 2015, Luminex Corporation issued a press release announcing its results of operations for its fiscal quarter and year ended December 31, 2014. A copy of the press release is furnished herewith as Exhibit�99.1.

Item�9.01. Financial Statements and Exhibits.

(d)�Exhibits.

Exhibit No.
�
Description
99.1
�
Press Release issued by Luminex Corporation dated February 2, 2015.
�
�




SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Date: February 2, 2015
LUMINEX CORPORATION
�
�
�
�
By:��
/s/ Harriss T. Currie �
�
�
Name:��
Harriss T. Currie�
�
�
Title:��
Chief Financial Officer, Senior Vice President of Finance�
�
�




EXHIBIT INDEX

Exhibit No.
�
Description
99.1
�
Press Release issued by Luminex Corporation dated February 2, 2015.
�
�






Exhibit 99.1


LUMINEX CORPORATION REPORTS FOURTH QUARTER
AND FULL YEAR 2014 RESULTS


AUSTIN, Texas (February 2, 2015) - Luminex Corporation (NASDAQ: LMNX) today announced financial results for the fourth quarter and year ended December 31, 2014. Financial and operating highlights include the following:

"
Consolidated fourth quarter revenue of $58.1 million, a 5 percent increase compared to the fourth quarter of 2013; full-year 2014 revenue was $227.0 million, a 6 percent increase over 2013.
"
Consolidated gross profit margin was 74 percent for the fourth quarter, and 70 percent for the full year 2014.
"
Fourth quarter assay revenue of $24.1 million, a 34 percent increase over the fourth quarter of 2013; full-year 2014 assay revenue of $87.7 million, an 18 percent increase over 2013.
"
GAAP net income for the fourth quarter and full-year of 2014 was $22.8 million and $39.0 million, or $0.53 and $0.92 per diluted share, respectively. Non-GAAP net income for the fourth quarter and full-year 2014 was $8.0 million and $37.8 million, or $0.19 and $0.90 per diluted share, respectively (see Non-GAAP reconciliation).

During my first 100 days at Luminex, I have conducted a thorough strategic and operational review which has further confirmed my enthusiasm and confidence in the future success of the company. We have a portfolio of differentiated products, a large installed base of equipment, loyal customers and a solid financial position, said Homi Shamir, President and Chief Executive Officer of Luminex. At the same time, we have certain challenges ahead of us, including ongoing pressure on consumable revenue resulting from inventory management needs of our largest partner and we anticipate pressure on our Cystic Fibrosis business due to a competitive technology.

We expect 2015 to be a transitional year for Luminex as we prepare to launch two transformational products - ARIES and NxTAG. During the fourth quarter, we completed the final stages of development for both and expect to begin clinical trials this quarter and to bring both to market in 2015. We are on our way to transforming the company into a key player in the molecular diagnostics space, and with a strong pipeline of products and a strong balance sheet, we are well positioned for accelerating growth in years to come.







REVENUE SUMMARY
(in thousands, except percentages)
�
Three Months Ended
�
�
�
�
�
December 31,
�
Variance
�
2014
�
2013
�
($)
�
(%)
�
(unaudited)
�
�
�
�
�
�
�
�
�
�
�
�
System sales
$
6,872

�
$
10,014

�
$
(3,142
)
�
(31
)%
Consumable sales
10,779

�
12,056

�
(1,277
)
�
(11
)%
Royalty revenue
10,194

�
9,267

�
927

�
10
�%
Assay revenue
24,051

�
17,963

�
6,088

�
34
�%
All other revenue
6,210

�
5,856

�
354

�
6
�%
�
$
58,106

�
$
55,156

�
$
2,950

�
5
�%
�
�
�
�
�
�
�
�
�
�
�
�
�
�
�
�
�
Twelve Months Ended
�
�
�
�
�
December 31,
�
Variance
�
2014
�
2013
�
($)
�
(%)
�
(unaudited)
�
�
�
�
�
�
�
�
�
�
�
�
System sales
$
29,200

�
$
31,786

�
$
(2,586
)
�
(8
)%
Consumable sales
48,300

�
48,540

�
(240
)
�

�%
Royalty revenue
39,409

�
36,950

�
2,459

�
7
�%
Assay revenue
87,653

�
74,101

�
13,552

�
18
�%
All other revenue
22,421

�
22,046

�
375

�
2
�%
�
$
226,983

�
$
213,423

�
$
13,560

�
6
�%
�
�
�
�
�
�
�
�

Additional Financial Highlights:

"
Fourth quarter shipments of 205 multiplexing analyzers, which included 76 MAGPIX systems, 94 LX systems, and 35 FLEXMAP 3D systems. Cumulative life-to-date multiplexing analyzer shipments are 11,687.
"
During the quarter, there were 20 bulk purchases of consumables totaling $8.1 million, or 75 percent of total consumables.
"
Royalty revenues reflect total royalty-bearing end user sales for the fourth quarter and full year 2014 of $111 million and $456 million, respectively.
"
Infectious disease assay sales comprised approximately 67 percent of total assay sales for the quarter, with genetic testing assays representing 33 percent.
"
During the full year 2014, the company released a portion of the valuation allowance on deferred tax assets in Canada, benefitted from the closure of our Australian facility, and established a tax asset associated with tax paid on intercompany profits.� The tax benefit of these items totaled $19.0 million, giving us a pro forma effective tax rate of 29%.
"
Operating income for the fourth quarter and full year of 2014 was $10.2 million and $28.1 million, respectively. Non-GAAP operating income for the fourth quarter and full year 2014 was $14.9 million and $49.1 million, respectively (see Non-GAAP reconciliation).
"
Cash and investments balance at year-end totaled $107.7 million.
"
Days sales outstanding (DSO) was 46 days at year-end, while days payable outstanding (DPO) was 71 days at year-end.
"
Moving forward, the Company will no longer present two segments, but will return to presenting one consolidated reporting unit. This change in financial reporting aligns with managements view of the business and its operational structure.






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 2015 is as follows:
"
The Company expects fiscal 2015 revenue to be between $230 million and $236 million.
"
For 2015, the Company expects consumable revenue to continue to be under pressure due to inventory management challenges by its largest partner.
"
In addition, the 2015 guidance reflects conservative estimates for the Cystic Fibrosis portion of Assay revenue, given the potential impact of a competitive technology.
"
The company anticipates first quarter 2015 revenue to be between $55 million and $58 million.


CONFERENCE CALL

Management will host a conference call to discuss the operating highlights and financial results for the fourth quarter ended December 31, 2014, at 3:30 p.m. CST/4:30 p.m. EST, Monday, February 2, 2015. The conference call will be webcast live and may be accessed at Luminex Corporations 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 Companys 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 Companys 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 Luminexs or managements intentions, plans, beliefs, expectations or predictions of future events are forward-looking statements. Forward-looking statements in this release include statements regarding: the expansion of our installed base of multiplexing systems; customer inventories of our consumable products; the development progress of our pipeline products, including ARIES and NxTAG products, market acceptance of our products, including instruments, consumables and assays, regulatory clearance of our products; the ability of our investment in current initiatives and new products to drive long-term value for our shareholders; and, projected 2015 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 Companys actual results or performance could differ materially from those anticipated or projected in such forward-looking statements. Factors that could cause Luminexs actual results or performance to differ materially include risks and uncertainties relating to, among others, market demand and acceptance of Luminexs products and technology, the Companys dependence on strategic partners for development, commercialization and distribution of products, concentration of the Companys 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, our ability to sell products directly to end users, our ability to launch products on time that satisfy market needs with products that we sell, setting of medicare reimbursement codes that adequately reflect the value of our products, Luminexs 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 Companys strategic operating plans, the uncertainty regarding the outcome or expense of any litigation brought against Luminex, risks relating to Luminexs 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 Luminexs 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 2015 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 Luminexs 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)
�
�
�
�
�
December 31,
�
December 31,
�
2014
�
2013
�
(unaudited)
�
�
ASSETS
�
�
�
Current assets:
�
�
�
Cash and cash equivalents
$
91,694

�
$
67,924

Short-term investments


�
4,517

Accounts receivable, net
29,095

�
30,948

Inventories, net
36,616

�
30,487

Deferred income taxes
12,203

�
7,265

Prepaids and other
7,412

�
5,229

Total current assets
177,020

�
146,370

Property and equipment, net
39,945

�
32,793

Intangible assets, net
56,382

�
60,295

Deferred income taxes
15,400

�
11,913

Long-term investments
15,975

�


Goodwill
49,619

�
50,738

Other
3,185

�
3,937

Total assets
$
357,526

�
$
306,046

LIABILITIES AND STOCKHOLDERS' EQUITY
�
�
�
Current liabilities:
�
�
�
Accounts payable
$
11,841

�
$
10,698

Accrued liabilities
14,118

�
11,624

Deferred revenue
4,407

�
4,980

Current portion of long term debt


�
1,194

Total current liabilities
30,366

�
28,496

Long-term debt


�
463

Deferred revenue
2,297

�
2,482

Other
4,869

�
4,985

Total liabilities
37,532

�
36,426

Stockholders' equity:
�
�
�
Common stock
42

�
41

Additional paid-in capital
309,424

�
296,931

Accumulated other comprehensive (loss) income
(744
)
�
419

Retained earnings (accumulated deficit)
11,272

�
(27,771
)
Total stockholders' equity
319,994

�
269,620

Total liabilities and stockholders' equity
$
357,526

�
$
306,046

�
�
�
�






LUMINEX CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
�
�
�
�
�
�
�
�
�
Three Months Ended
�
Twelve Months Ended
�
December 31,
�
December 31,
�
2014
�
2013
�
2014
�
2013
�
(unaudited)
�
(unaudited)
�
�
�
�
�
�
�
�
�
�
Revenue
$
58,106

�
$
55,156

�
$
226,983

�
$
213,423

Cost of revenue
15,365

�
18,325

�
67,131

�
69,797

Gross profit
42,741

�
36,831

�
159,852

�
143,626

Operating expenses:
�
�
�
�
�
�
�
Research and development
10,416

�
10,189

�
43,135

�
45,041

Selling, general and administrative
20,947

�
19,872

�
82,785

�
87,301

Amortization of acquired intangible assets
964

�
1,022

�
3,913

�
4,099

Restructuring costs
229

�
276

�
1,882

�
2,418

Total operating expenses
32,556

�
31,359

�
131,715

�
138,859

Income from operations
10,185

�
5,472

�
28,137

�
4,767

Interest expense from long-term debt


�
(9
)
�
(6
)
�
(76
)
Other expense, net
(11
)
�
3

�
(46
)
�
6,733

Income before income taxes
10,174

�
5,466

�
28,085

�
11,424

Income tax benefit (expense)
12,628

�
(350
)
�
10,958

�
(4,328
)
Net income
$
22,802

�
$
5,116

�
$
39,043

�
$
7,096

�
�
�
�
�
�
�
�
Net income per share, basic
$
0.55

�
$
0.12

�
$
0.94

�
$
0.17

Shares used in computing net income per share, basic
41,744

�
41,055

�
41,558

�
40,799

�
�
�
�
�
�
�
�
Net income per share, diluted
$
0.53

�
$
0.12

�
$
0.92

�
$
0.17

Shares used in computing net income per share, diluted
42,651

�
42,229

�
42,219

�
41,986

�
�
�
�
�
�
�
�






LUMINEX CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
�
�
�
�
�
�
�
�
�
Three Months Ended
�
Twelve Months Ended
�
December 31,
�
December 31,
�
2014
�
2013
�
2014
�
2013
�
(unaudited)
�
(unaudited)
�
�
Cash flows from operating activities:
�
�
�
�
�
�
�
Net income
$
22,802

�
$
5,116

�
$
39,043

�
$
7,096

Adjustments to reconcile net income to net cash provided by operating activities:
�
�
�
�
�
�
�
Depreciation and amortization
3,270

�
4,175

�
14,205

�
15,922

Stock-based compensation
2,496

�
2,488

�
9,548

�
9,221

Deferred income tax (benefit) expense
(7,501
)
�
(2,864
)
�
(8,549
)
�
551

Excess income tax (benefit) expense from employee stock-based awards
1,028

�
(2,843
)
�
(287
)
�
(2,569
)
Loss (gain) on disposal of assets
(50
)
�
132

�
181

�
(5,173
)
Non-cash restructuring charges
448

�
442

�
2,836

�
4,137

Other
13

�
(94
)
�
(347
)
�
(1,209
)
Changes in operating assets and liabilities:
�
�
�
�
�
�
�
Accounts receivable, net
(1,778
)
�
(730
)
�
1,964

�
2,346

Inventories, net
(3,581
)
�
(1,091
)
�
(7,046
)
�
(3,005
)
Other assets
(2,096
)
�
588

�
(2,888
)
�
(1,470
)
Accounts payable
1,719

�
1,680

�
841

�
962

Accrued liabilities
157

�
2,403

�
564

�
(324
)
Deferred revenue
(867
)
�
8

�
(814
)
�
417

Net cash provided by operating activities
16,060

�
9,410

�
49,251

�
26,902

Cash flows from investing activities:
�
�
�
�
�
�
�
Purchases of available-for-sale securities
(8,003
)
�
(1,516
)
�
(18,999
)
�
(10,005
)
Sales and maturities of available-for-sale securities


�
2,496

�
7,509

�
22,128

Purchase of property and equipment
(5,283
)
�
(2,952
)
�
(17,078
)
�
(18,088
)
Proceeds from sale of assets
54

�
34

�
98

�
9,598

Acquired technology rights


�


�
(64
)
�
(930
)
Net cash (used in) provided by investing activities
(13,232
)
�
(1,938
)
�
(28,534
)
�
2,703

Cash flows from financing activities:
�
�
�
�
�
�
�
Payments on debt


�


�
(1,621
)
�
(1,105
)
Proceeds from employee stock plans and issuance of common stock
939

�
786

�
4,746

�
8,677

Payments for stock repurchases


�
(213
)
�


�
(14,556
)
Excess income tax benefit (expense) from employee stock-based awards
(1,028
)
�
2,843

�
287

�
2,569

Net cash (used in) provided by financing activities
(89
)
�
3,416

�
3,412

�
(4,415
)
Effect of foreign currency exchange rate on cash
(168
)
�
(133
)
�
(359
)
�
(55
)
Change in cash and cash equivalents
2,571

�
10,755

�
23,770

�
25,135

Cash and cash equivalents, beginning of period
89,123

�
57,169

�
67,924

�
42,789

Cash and cash equivalents, end of period
$
91,694

�
$
67,924

�
$
91,694

�
$
67,924

�
�
�
�
�
�
�
�




LUMINEX CORPORATION
NON-GAAP RECONCILIATION
(in thousands)
�
�
�
�
�
�
�
�
�
Three Months Ended
�
Twelve Months Ended
�
December 31,
�
December 31,
�
2014
�
2013
�
2014
�
2013
�
(unaudited)
�
(unaudited)
�
�
�
�
�
�
�
�
Income from operations
$
10,185

�
$
5,472

�
$
28,137

�
$
4,767

�
�
�
�
�
�
�
�
Stock-based compensation
2,496

�
2,488

�
9,548

�
9,221

Amortization of acquired intangible assets
964

�
1,022

�
3,913

�
4,099

Costs associated with legal proceedings
578

�
373

�
3,206

�
731

Resolution of molecular diagnostic distribution agreements


�


�


�
7,000

Severance costs
243

�
29

�
1,230

�
1,060

Restructuring costs
448

�
626

�
3,100

�
4,969

�
�
�
�
�
�
�
�
Adjusted income from operations
$
14,914

�
$
10,010

�
$
49,134

�
$
31,847

�
�
�
�
�
�
�
�
Interest expense from long-term debt


�
(9
)
�
(6
)
�
(76
)
Other income, net
(11
)
�
3

�
(46
)
�
6,733

Gain on sale of cost method equity investment


�


�


�
(5,452
)
Contingent consideration adjustments


�


�


�
(1,370
)
Income tax benefit (expense)
12,628

�
(350
)
�
10,958

�
(4,328
)
Income tax effect of above adjusting items
(1,507
)
�
(826
)
�
(3,156
)
�
(1,202
)
Income tax benefit from discrete tax items
(18,046
)
�


�
(19,040
)
�


�
�
�
�
�
�
�
�
Adjusted net income
$
7,978

�
$
8,828

�
$
37,844

�
$
26,152

�
�
�
�
�
�
�
�
Adjusted net income per share, basic
$
0.19

�
$
0.22

�
$
0.91

�
$
0.64

�
�
�
�
�
�
�
�
Shares used in computing adjusted net income per share, basic
41,744

�
41,055

�
41,558

�
40,799

�
�
�
�
�
�
�
�
Adjusted net income per share, diluted
$
0.19

�
$
0.21

�
$
0.9

�
$
0.62

�
�
�
�
�
�
�
�
Shares used in computing adjusted net income per share, diluted
42,651

�
42,229

�
42,219

�
41,986


The Company makes reference in this release to non-GAAP operating income and 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, including costs associated with the ENZO Life Sciences, Inc. and Irori Technologies, Inc. complaints discussed in the Legal Proceedings section of our previously filed 10-K and 10-Qs filed year-to-date 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 Companys ongoing operating performance while improving comparability to prior periods, and, as such may provide investors with an enhanced understanding of the Companys past financial performance and prospects for the future. In addition, the Companys 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.




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