Luminex Corporation Reports Second Quarter 2020 Results

AUSTIN, Texas, Aug. 4, 2020 /PRNewswire/ -- Luminex Corporation (Nasdaq: LMNX) today announced results for its second quarter ended June 30, 2020.

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

CURRENT FINANCIAL HIGHLIGHTS

• Total revenue for the second quarter of $109.5M, a 32% increase over Q2 2019, driven primarily by COVID related tailwinds associated with the current pandemic
• Strong profitability in Q2 with 64% gross margins, an improvement of 10 basis points over Q2 2019
• Operating margin of $18.8M or 17% of revenue, an improvement of 426% over the prior year
• Net income of $12.5M, 11% of revenue, and $0.27 per share, up approximately 350% over Q2 2019

CEO COMMENTARY

"We are incredibly proud of the difference we are making on an ongoing basis in addressing the global COVID-19 pandemic. In line with our mission, we quickly developed multiple COVID-19 products that work with many of our existing systems, providing flexible testing solutions to the facilities that need them and the healthcare workers and patients that are dependent upon them," said Nachum "Homi" Shamir, President & CEO. "As a result of the increased demand for our products following the outbreak, we delivered record revenue, the most profitable quarter in the history of our company and a significant amount of cash flow. Significant revenue growth in our Molecular Diagnostics franchise drove record sample-to-answer system placements, assay sales and revenue. Notwithstanding our success in addressing COVID-19 with our Molecular Diagnostic products, we experienced COVID-19 headwinds that negatively impacted our Clinical Tools and Life Science revenue streams. After delivering $200M of revenue in the first six months of the year, we are increasing our revenue guidance as a result of overachieving our original expectations and our positive outlook for the remainder of the year."

ADDITIONAL HIGHLIGHTS OF THE QUARTER

• Molecular Diagnostic revenue for the quarter of $64.9M, up more than 100% vs. Q2 2019
• Licensed Technologies Group revenue of $35.2M, down 4% vs. Q2 2019
• Flow Cytometry revenue of $7.4M, down 44% vs. Q2 2019, continues to be significantly impacted by the slowdown in academic research due to COVID-19
• Operating cash flow of $31M and $24M for the three and six months ended June 30, 2020
• Ended the quarter with an order book of approximately $29M, most of which is COVID-19 related; almost six times the pre-COVID quarterly average
• Sold or contracted 162 sample-to-answer systems in the quarter, the majority of which were ARIES^®
• Issued $260.0M of convertible senior notes due in May 2025
• Received U.S. FDA Emergency Use Authorization on April 6, 2020 for the ARIES^® SARS-CoV-2 Assay
• Received U.S. FDA EUA for COVID-19 antibody test on July 16, 2020

2020 REVENUE GUIDANCE

• The Company expects revenue for the 3^rd Quarter to be at or above $100M, with growth in excess of 26% over Q3 2019
• The Company expects revenue for the Full Year 2020 to be at or above $415M, with growth in excess of 24% over 2019
• We anticipate being able to provide updated full-year revenue guidance in conjunction with our third quarter earnings release

CONFERENCE CALL

Management will host a conference call at 4:00 p.m. Central Time / 5:00 p.m. EDT, Tuesday, August 4, 2020 to discuss operating highlights and financial results for the second quarter 2020. The conference call will be webcast live and may be accessed at Luminex Corporation's website at investor.luminexcorp.com. 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 4892896. 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  "expect," "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, negative effects from the worldwide COVID-19 pandemic (including but not limited to the general economic downturn related to such pandemic, travel restrictions related thereto, business closures that may affect our supply chain or our ability to install instruments, and delays in U.S. Food and Drug Administration (the "FDA")  clearances related to adjustments in the agency's approval priorities in response to the pandemic), the warning letter (the "Warning Letter") the Company received from the FDA on June 26, 2020 relating to the operations of the Company's Austin, TX and Northbrook, IL facilities and the Company's VERIGENE Processor SP System, as previously disclosed in the Company's Current Report on Form 8-K filed with the U.S. Securities and Exchange Commission on June 29, 2020, including the outcome of the Company's efforts to remediate the FDA's observations, the possible resolution of the issues identified in the Warning Letter and any further regulatory and enforcement actions that may initiated by the FDA with respect thereto, 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.

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SOURCE Luminex Corporation