Luminex Corporation Reports Fourth Quarter and Year-End 2008 Results

AUSTIN, Texas-(Business Wire)-February 5, 2009 - Luminex Corporation (NASDAQ:LMNX) today announced financial results for the fourth quarter and year ended December 31, 2008. Recent financial and operating highlights include the following:

Net income of $2.0 million for the fourth quarter of 2008 and $3.1 million of net income for 2008
Consolidated fourth quarter revenue of $28.2 million, a 31 percent increase over the fourth quarter of 2007; and 2008 consolidated revenue of $104.4 million, a 39 percent increase over 2007
System shipments of 250, resulting in cumulative life-to-date shipments of 5,891, up 18 percent from the fourth quarter a year ago; representing the ninth consecutive quarter of system shipments of 200 or more
Fourth quarter consumables revenue of $8.3 million and royalty revenue of $4.0 million, up 53 percent and 44 percent, respectively, from the fourth quarter of 2007. For the year ended 2008 royalties increased 45 percent and consumables increased 65 percent over the prior calendar year
Consolidated gross profit margin of 69 percent for the fourth quarter 2008, and 68 percent for the year 2008, compared with fourth quarter 2007 gross profit margin of 62 percent and 61 percent for 2007
Finished the year with $124.1 million in cash and investments
Delivered first commercial shipments of new instrument, FLEXMAP 3D™

Net income for the fourth quarter of 2008 was $2.0 million, or $0.05 per share, compared with a net loss of $2.8 million, or ($0.08) per share for the fourth quarter of 2007, excluding fourth quarter 2007 non-recurring items of $13.9 million. See attached reconciliation to GAAP reported results.

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


		Three Months Ended December 31,						Twelve Months Ended December 31,
		2008			2007			2008			2007

Revenue
	Technology group	$	22,071		$	17,428		$	83,567		$	62,436
	Assay group		6,126			4,073			20,880			12,574
			28,197			21,501			104,447			75,010

Operating income (loss)
	Technology group		2,445			39			9,033			(526	)
	Assay group		(291	)		(2,982	)		(5,680	)		(16,892	)
Operating income (loss)			2,154			(2,943	)		3,353			(17,418	)

“2008 was a transformational year for Luminex as the Company delivered a record performance and achieved several major milestones,” said Patrick J. Balthrop, president and chief executive officer of Luminex. “In addition to record revenues and profits, we introduced innovative products, entered into exciting new partnerships and enhanced our balance sheet. Our fourth quarter results demonstrated the Company’s continuing momentum.

“Record revenue growth, combined with the highest gross margins in our history, has positioned Luminex well for the future,” added Balthrop. “The successful execution of our growth strategy has led to our installed base of almost 6,000 instruments which continues to drive demand and high growth in our most profitable product lines. These resources provide Luminex with the ability to invest in the Company’s longer term growth strategies, such as innovative research and development projects, geographic and commercial expansion, and dedication to regulatory compliance. As we look toward 2009 and beyond, we believe that Luminex is well positioned to execute our growth strategy and continue to deliver long term shareholder value.”

FINANCIAL OUTLOOK AND GUIDANCE

The Company intends to provide annual revenue guidance, updated at each quarterly reporting period.

Guidance for Fiscal 2009

The Company currently expects full year 2009 revenue to be between $130 million and $140 million. The full year figures represent an increase of between 25 percent and 34 percent over reported 2008 revenue.

CONFERENCE CALL

Management will host a conference call to discuss the operating highlights and financial results for the fourth quarter ended December 31, 2008, on Thursday, February 5, 2009, 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 some time 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. 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, which may include statements regarding the Company’s revenues for 2009, the Company’s continuing momentum, the Company’s position for the future and for executing on its growth strategy and delivering long term shareholder value, the ability of the Company’s installed base of instruments to continue to drive demand and growth for the Company’s business, and the ability of the Company to continue to invest in its long-term growth strategies, including research and development projects, geographic and commercial expansion, and dedication to regulatory compliance. 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, 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.

LUMINEX CORPORATION
CONSOLIDATED BALANCE SHEETS
(In thousands, except share and per share amounts)

		December 31,
		2008			2007

ASSETS
Current assets:
	Cash and cash equivalents	$	81,619		$	27,233
	Short-term investments		40,501			6,944
	Accounts receivable		11,024			11,827
	Inventories, net		11,589			6,508
	Prepaids and other		1,660			856

	Total current assets		146,393			53,368

Property and equipment, net			12,567			12,673
Intangible assets, net			15,796			16,919
Long-term investments			2,000			-
Goodwill			39,617			39,617
Other			918			982

Total assets		$	217,291		$	123,559

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
	Accounts payable	$	4,580		$	3,346
	Accrued liabilities		7,181			6,811
	Deferred revenue		2,671			2,276
	Current portion of long term debt		445			134

	Total current liabilities		14,877			12,567

Long-term debt			2,914			2,976
Deferred revenue			4,960			4,536

Total liabilities			22,751			20,079

Stockholders' equity:

	Common stock		40			35
	Additional paid-in capital		279,255			191,218
	Accumulated other comprehensive loss		(47	)		(8	)
	Accumulated deficit		(84,708	)		(87,765	)

	Total stockholders' equity		194,540			103,480

Total liabilities and stockholders' equity		$	217,291		$	123,559

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


		Three Months Ended December 31,						Year Ended December 31,
		2008			2007			2008			2007

Revenue		$	28,197		$	21,501		$	104,447		$	75,010

Cost of revenue			8,625			8,191			33,501			28,916

	Gross profit		19,572			13,310			70,946			46,094

Operating expenses:

	Research and development		4,729			4,348			18,628			15,383

	Selling, general and administrative		12,689			11,905			48,965			40,729

	In-process research and development		-			-			-			7,400

	Total operating expenses		17,418			16,253			67,593			63,512

Income (loss) from operations			2,154			(2,943	)		3,353			(17,418	)

	Interest expense from long-term debt		(186	)		(116	)		(592	)		(513	)

	Other income, net		515			602			1,144			1,665

	Settlement of litigation		-			11,500			-			11,500

	Gain on settlement of liability		-			2,345			-			2,345

Income (loss) before income taxes			2,483			11,388			3,905			(2,421	)

	Income taxes		(474	)		(327	)		(848	)		(290	)

Net income (loss)		$	2,009		$	11,061		$	3,057		$	(2,711	)

Net income (loss) per share, basic		$	0.05		$	0.31		$	0.08		$	(0.08	)

Shares used in computing net income (loss) per share, basic			40,277			35,302			37,868			34,361

Net income (loss) per share, diluted		$	0.05		$	0.30		$	0.08		$	(0.08	)

Shares used in computing net income (loss) per share, diluted			41,963			36,708			39,700			34,361

LUMINEX CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)


			Three Months Ended December 31,						Year Ended December 31,
			2008			2007			2008			2007
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)			$	2,009		$	11,061		$	3,057		$	(2,711	)
	Adjustments to reconcile net income (loss) to net cash provided by operating activities:
		Depreciation and amortization expense		1,874			1,618			7,001			5,063
		In-process research and development expense		-			-			-			7,400
		Gain on settlement of liability		-			(2,345	)		-			(2,345	)
		Amortization of deferred stock, restricted stock and stock compensation expense		2,049			1,749			7,251			6,593
		Loss on disposal of assets		1			-			8			88
		Other		(820	)		267			(415	)		268
	Changes in operating assets and liabilities:
		Accounts receivable, net		1,679			375			694			(3,255	)
		Inventories, net		(2,041	)		1,094			(5,081	)		(129	)
		Other assets		(149	)		777			(942	)		1,019
		Accounts payable		662			(32	)		1,760			(2,958	)
		Accrued liabilities		1,035			906			(312	)		(715	)
		Deferred revenue		(292	)		478			830			75
Net cash provided by operating activities				6,007			15,948			13,851			8,393

CASH FLOWS FROM INVESTING ACTIVITIES:
	Purchases of held-to-maturity securities			(19,327	)		(2,000	)		(55,868	)		(6,325	)
	Maturities of held-to-maturity securities			13,875			3,649			20,310			17,717
	Purchase of property and equipment			(1,702	)		(1,355	)		(4,449	)		(6,685	)
	Acquisition of business, net of cash acquired			-			-			-			(2,686	)
	Acquisition activity			24			-			(481	)	-
	Proceeds from sale of assets			-			-			19			30
	Acquired intangible assets			-			(5	)		-			(10	)
	Acquired technology rights			-			-			(1,216	)		(265	)
Net cash provided by (used in) investing activities				(7,130	)		289			(41,685	)		1,776

CASH FLOWS FROM FINANCING ACTIVITIES:
	Payments on debt			-			-			(134	)		(12,349	)
	Proceeds from secondary offering, net of offering costs			47			-			74,722			-
	Proceeds from issuance of common stock			637			1,236			7,075			1,868
	Other			-			-			-			13
Net cash (used in) provided by financing activities				684			1,236			81,663			(10,468	)
Effect of foreign currency exchange rate on cash				440			35			557			118
Change in cash and cash equivalents				1			17,508			54,386			(181	)
Cash and cash equivalents, beginning of period				81,618			9,725			27,233			27,414
Cash and cash equivalents, end of period			$	81,619		$	27,233		$	81,619		$	27,233

	Interest and penalties paid			160			6			160			1,360

SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING ACTIVITIES:
	Purchase of leasehold improvements under trade payable arrangement paid in 2007		$	-		$	-		$	-		$	-

	SUPPLEMENTAL DISCLOSURE OF NON-CASH EFFECT OF ACQUISITIONS:
	Purchase price			-			-			-			(49,401	)
	Common stock issued			-			-			-			41,754
	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			-			-			-			(2,687	)

LUMINEX CORPORATION
RECONCILIATION OF NET INCOME EXCLUDING NON-RECURRING ITEMS TO GAAP NET INCOME
(In thousands, except per share amounts)


	Three Months Ended December 31,					Year Ended December 31,
	2008		2007			2008		2007

Net income (loss)	$	2,009	$	11,061		$	3,057	$	(2,711	)

Non-recurring items:

Settlement of litigation		-		(11,500	)		-		(11,500	)

Gain on settlement of liability		-		(2,345	)		-		(2,345	)

Net income (loss) excluding non-recurring items	$	2,009	$	(2,784	)	$	3,057	$	(16,556	)

Net income (loss) per share, basic	$	0.05	$	(0.08	)	$	0.08	$	(0.48	)

Shares used in computing net income (loss) per share, basic		40,277		35,302			37,868		34,361

Net income (loss) per share, diluted	$	0.05	$	(0.08	)	$	0.08	$	(0.48	)

Shares used in computing net income (loss) per share, diluted		41,963		36,708			39,700		34,361

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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