Form 10-Q
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
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þ |
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Quarterly Report Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934 |
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for the quarterly period ended June 30, 2009 |
or
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o |
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Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
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for the transition period from
to . |
Commission File Number: 000-30109
LUMINEX CORPORATION
(Exact name of registrant as specified in its charter)
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DELAWARE
(State or other jurisdiction of
incorporation or organization)
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74-2747608
(I.R.S. Employer
Identification No.) |
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12212 TECHNOLOGY BLVD., AUSTIN, TEXAS
(Address of principal executive offices)
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78727
(Zip Code) |
(512) 219-8020
(Registrants telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports required to be filed
by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or
for such shorter period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. Yes þ No o
Indicate by check mark whether the registrant has submitted electronically and posted on its
corporate Web site, if any, every Interactive Data File required to be submitted and posted
pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months
(or for such shorter period that the registrant was required to submit and post such files).
Yes o No o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated
filer, a non-accelerated filer, or a smaller reporting company. See the definitions of large
accelerated filer, accelerated filer and smaller reporting company in Rule 12b-2 of the
Exchange Act.
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Large accelerated filer þ
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Accelerated filer o
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Non-accelerated filer o
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Smaller reporting company o |
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(Do not check if smaller reporting company) |
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Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of
the Exchange Act). Yes o No þ
There were 41,486,025 shares of the Companys Common Stock, par value $0.001 per share,
outstanding on August 3, 2009.
PART I. FINANCIAL INFORMATION
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ITEM 1. |
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FINANCIAL STATEMENTS |
LUMINEX CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
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June 30, |
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December 31, |
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2009 |
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2008 |
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(unaudited) |
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ASSETS
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Current assets: |
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Cash and cash equivalents |
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$ |
66,151 |
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$ |
81,619 |
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Short-term investments |
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30,476 |
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40,501 |
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Accounts receivable, net |
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18,064 |
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11,024 |
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Inventory, net |
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12,411 |
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11,589 |
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Other |
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2,194 |
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1,660 |
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Total current assets |
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129,296 |
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146,393 |
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Property and equipment, net |
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15,068 |
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12,567 |
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Intangible assets, net |
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13,927 |
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14,901 |
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Long-term investments |
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15,748 |
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2,000 |
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Goodwill |
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39,617 |
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39,617 |
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Other |
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1,417 |
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1,813 |
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Total assets |
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$ |
215,073 |
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$ |
217,291 |
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LIABILITIES AND STOCKHOLDERS EQUITY
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Current liabilities: |
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Accounts payable |
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$ |
3,607 |
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$ |
4,580 |
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Accrued liabilities |
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4,863 |
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7,181 |
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Deferred revenue |
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3,013 |
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2,671 |
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Current portion of long term debt |
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321 |
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445 |
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Total current liabilities |
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11,804 |
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14,877 |
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Long-term debt |
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3,504 |
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2,914 |
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Deferred revenue and other |
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4,962 |
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4,960 |
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Total liabilities |
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20,270 |
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22,751 |
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Stockholders equity: |
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Common stock |
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41 |
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40 |
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Additional paid-in capital |
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281,084 |
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279,255 |
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Accumulated other comprehensive gain (loss) |
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64 |
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(47 |
) |
Accumulated deficit |
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(86,386 |
) |
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(84,708 |
) |
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Total stockholders equity |
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194,803 |
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194,540 |
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Total liabilities and stockholders equity |
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$ |
215,073 |
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$ |
217,291 |
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See the accompanying notes which are an integral part of these
Condensed Consolidated Financial Statements.
1
LUMINEX CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
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Three Months Ended |
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Six Months Ended |
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June 30, |
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June 30, |
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2009 |
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2008 |
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2009 |
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2008 |
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(unaudited) |
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(unaudited) |
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Revenue |
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$ |
27,801 |
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$ |
24,341 |
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$ |
53,358 |
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$ |
47,353 |
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Cost of revenue |
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8,501 |
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7,778 |
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16,490 |
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15,533 |
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Gross profit |
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19,300 |
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16,563 |
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36,868 |
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31,820 |
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Operating expenses: |
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Research and development |
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4,977 |
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5,025 |
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9,603 |
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9,456 |
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Selling, general and administrative |
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13,294 |
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12,052 |
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24,652 |
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24,146 |
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Total operating expenses |
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18,271 |
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17,077 |
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34,255 |
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33,602 |
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Income (loss) from operations |
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1,029 |
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(514 |
) |
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2,613 |
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(1,782 |
) |
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Interest expense from long-term debt |
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(124 |
) |
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(134 |
) |
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(242 |
) |
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(269 |
) |
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Settlement of litigation |
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(4,350 |
) |
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Other income (loss), net |
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178 |
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(181 |
) |
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|
449 |
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139 |
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Income (loss) before income taxes |
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1,083 |
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(829 |
) |
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(1,530 |
) |
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(1,912 |
) |
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Income taxes |
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29 |
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(130 |
) |
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(148 |
) |
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(213 |
) |
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Net income (loss) |
|
$ |
1,112 |
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|
$ |
(959 |
) |
|
$ |
(1,678 |
) |
|
$ |
(2,125 |
) |
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Net income (loss) per share, basic |
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$ |
0.03 |
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$ |
(0.03 |
) |
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$ |
(0.04 |
) |
|
$ |
(0.06 |
) |
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Shares used in computing net income (loss)
per share, basic |
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40,533 |
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|
35,689 |
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40,441 |
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|
35,559 |
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Net income (loss) per share, diluted |
|
$ |
0.03 |
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|
$ |
(0.03 |
) |
|
$ |
(0.04 |
) |
|
$ |
(0.06 |
) |
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Shares used in computing net income (loss)
per share, diluted |
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|
41,353 |
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|
|
35,689 |
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|
40,441 |
|
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|
35,559 |
|
See the accompanying notes which are an integral part of these
Condensed Consolidated Financial Statements.
2
LUMINEX CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
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Three Months Ended |
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Six Months Ended |
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June 30, |
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June 30, |
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2009 |
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2008 |
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2009 |
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2008 |
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(unaudited) |
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(unaudited) |
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Cash flows from operating activities: |
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Net income (loss) |
|
$ |
1,112 |
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|
$ |
(959 |
) |
|
$ |
(1,678 |
) |
|
$ |
(2,125 |
) |
Adjustments to reconcile net loss to net cash
(used in) provided by operating activities: |
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Depreciation and amortization |
|
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1,916 |
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|
1,648 |
|
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|
3,879 |
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|
3,305 |
|
Stock-based compensation and other |
|
|
1,815 |
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|
1,692 |
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|
3,586 |
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|
3,421 |
|
Loss on disposal of assets |
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15 |
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|
7 |
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|
25 |
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|
7 |
|
Other |
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|
712 |
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|
258 |
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|
581 |
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|
864 |
|
Changes in operating assets and liabilities: |
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Accounts receivable, net |
|
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(3,990 |
) |
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|
1,734 |
|
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|
(7,090 |
) |
|
|
1,785 |
|
Inventory, net |
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(964 |
) |
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|
(1,076 |
) |
|
|
(822 |
) |
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|
(2,005 |
) |
Prepaids and other |
|
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(990 |
) |
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|
(638 |
) |
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(431 |
) |
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(931 |
) |
Accounts payable |
|
|
(4,542 |
) |
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|
348 |
|
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|
(1,061 |
) |
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|
638 |
|
Accrued liabilities |
|
|
(1,009 |
) |
|
|
1,191 |
|
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(4,318 |
) |
|
|
(1,328 |
) |
Deferred revenue |
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|
225 |
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(32 |
) |
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|
341 |
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|
592 |
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Net cash (used in) provided by operating activities |
|
|
(5,700 |
) |
|
|
4,173 |
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|
(6,988 |
) |
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|
4,223 |
|
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Cash flows from investing activities: |
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Net purchases of available-for-sale investments |
|
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(13,165 |
) |
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(44,646 |
) |
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|
Maturities of available-for-sale investments |
|
|
4,994 |
|
|
|
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|
4,994 |
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Net purchases of held-to-maturity investments |
|
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|
(1,951 |
) |
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|
|
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|
(2,933 |
) |
Maturities of held-to-maturity investments |
|
|
13,441 |
|
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|
36,140 |
|
|
|
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|
Purchase of property and equipment |
|
|
(3,585 |
) |
|
|
(1,107 |
) |
|
|
(5,116 |
) |
|
|
(1,894 |
) |
Acquisition activity |
|
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|
|
|
(412 |
) |
|
|
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|
|
|
(412 |
) |
Acquired technology rights |
|
|
(14 |
) |
|
|
(982 |
) |
|
|
(21 |
) |
|
|
(982 |
) |
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|
Net cash provided by (used in) investing activities |
|
|
1,671 |
|
|
|
(4,452 |
) |
|
|
(8,649 |
) |
|
|
(6,221 |
) |
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Cash flows from financing activities: |
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|
|
|
|
|
|
|
|
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|
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|
|
|
Payment on debt |
|
|
(440 |
) |
|
|
(134 |
) |
|
|
(440 |
) |
|
|
(134 |
) |
Proceeds from secondary offering, net of offering costs |
|
|
|
|
|
|
74,779 |
|
|
|
|
|
|
|
74,779 |
|
Proceeds from debt |
|
|
|
|
|
|
|
|
|
|
454 |
|
|
|
|
|
Proceeds from issuance of common stock |
|
|
146 |
|
|
|
1,962 |
|
|
|
285 |
|
|
|
2,770 |
|
|
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|
|
|
|
|
|
|
|
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|
|
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|
Net cash (used in) provided by financing activities |
|
|
(294 |
) |
|
|
76,607 |
|
|
|
299 |
|
|
|
77,415 |
|
|
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|
Effect of foreign currency exchange rate on cash |
|
|
(241 |
) |
|
|
(9 |
) |
|
|
(130 |
) |
|
|
29 |
|
Change in cash and cash equivalents |
|
|
(4,564 |
) |
|
|
76,319 |
|
|
|
(15,468 |
) |
|
|
75,446 |
|
Cash and cash equivalents, beginning of period |
|
|
70,715 |
|
|
|
26,360 |
|
|
|
81,619 |
|
|
|
27,233 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents, end of period |
|
$ |
66,151 |
|
|
$ |
102,679 |
|
|
$ |
66,151 |
|
|
$ |
102,679 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
See the accompanying notes which are an integral part of these
Condensed Consolidated Financial Statements.
3
LUMINEX CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
NOTE 1 BASIS OF PRESENTATION
The accompanying unaudited condensed consolidated financial statements have been prepared by
Luminex Corporation (the Company or Luminex) in accordance with United States generally
accepted accounting principles for interim financial information and the rules and regulations of
the Securities and Exchange Commission (the SEC). Accordingly, they do not include all of the
information and footnotes required by United States generally accepted accounting principles for
complete financial statements. The condensed consolidated financial statements include the accounts
of the Company and its wholly-owned subsidiaries. All significant intercompany accounts and
transactions have been eliminated in consolidation. In the opinion of management, all adjustments
(consisting of normal recurring entries) considered necessary for a fair presentation have been
included. Operating results for the three and six months ended June 30, 2009 are not necessarily
indicative of the results that may be expected for the year ending December 31, 2009. These
financial statements should be read in conjunction with the financial statements and notes thereto
included in the Companys Annual Report on Form 10-K for the year ended December 31, 2008.
Certain items in prior financial statements have been reclassified to conform to the current
presentation.
The Companys comprehensive income or loss is comprised of net income or loss, unrealized
gains and losses on securities classified as available for sale, and foreign currency translation.
Comprehensive income (loss), net of tax, for the three and six months ended June 30, 2009 was
approximately $1.3 million and $(1.6) million, respectively, and comprehensive loss, net of tax,
for the three and six months ended June 30, 2008 was approximately $(1.0) million and $(2.1)
million respectively.
The Company has two segments for financial reporting purposes: the Technology Segment and the
Assay Segment. See Note 6 Segment Information.
We have evaluated subsequent events through the time of filing this Form 10-Q with the SEC on
August 7, 2009. No material subsequent events have occurred since June 30, 2009 that required
recognition or disclosure in these financial statements.
NOTE 2 INVESTMENTS
The Company determines the appropriate classification of its investments in debt and equity
securities at the time of purchase and reevaluates such determinations at each balance-sheet date.
Debt securities are classified as held-to-maturity when the Company has the positive intent and
ability to hold the securities to maturity. Debt securities for which the Company does not have the
intent or ability to hold to maturity are classified as available for sale. Held-to-maturity
securities are stated at amortized cost, which approximates fair value of these investments.
Marketable securities that are bought and held principally for the purpose of selling them in the
near term are classified as trading securities and are reported at fair value, with unrealized
gains and losses recognized in earnings. Debt and marketable equity securities not classified as
held-to-maturity or as trading, are classified as available for sale, and are carried at fair
market value, with the unrealized gains and losses, net of tax, included in the determination of
comprehensive income and reported in stockholders equity. Marketable securities are recorded as
either short term or long term on the Balance Sheet based on contractual maturity date.
The fair value of all securities is determined by quoted market prices. The estimated fair
value of securities for which there are no quoted market prices is based on similar types of
securities that are traded in the market.
Held-to-maturity securities as of June 30, 2009 and December 31, 2008 consisted of government
sponsored debt obligations of $6.5 million and $42.8 million, respectively.
4
LUMINEX CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
|
|
Held-to-maturity securities consisted of the following as of June 30, 2009 (in thousands): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accrued |
|
|
|
|
|
|
Cost |
|
|
Interest |
|
|
Amortized Cost |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Due in one year or less |
|
$ |
6,361 |
|
|
$ |
107 |
|
|
$ |
6,468 |
|
Held-to-maturity securities consisted of the following as of December 31, 2008 (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accrued |
|
|
|
|
|
|
Cost |
|
|
Interest |
|
|
Amortized Cost |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Due in one year or less |
|
$ |
40,501 |
|
|
$ |
283 |
|
|
$ |
40,784 |
|
Due after one year through two years |
|
|
2,000 |
|
|
|
20 |
|
|
$ |
2,020 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total held-to-maturity securities |
|
$ |
42,501 |
|
|
$ |
303 |
|
|
$ |
42,804 |
|
|
|
|
|
|
|
|
|
|
|
Available-for-sale securities consisted of the following as of June 30, 2009 (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gains in |
|
|
Losses in |
|
|
|
|
|
|
|
|
|
|
Accumulated Other |
|
|
Accumulated Other |
|
|
|
|
|
|
Amortized |
|
|
Comprehensive |
|
|
Comprehensive |
|
|
Estimated |
|
|
|
Cost |
|
|
Gain (Loss) |
|
|
Gain (Loss) |
|
|
Fair Value |
|
|
Current: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Money Market funds |
|
$ |
61,152 |
|
|
$ |
|
|
|
$ |
|
|
|
$ |
61,152 |
|
Government sponsored debt securities |
|
|
28,968 |
|
|
|
39 |
|
|
|
|
|
|
|
29,007 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total current securities |
|
|
90,120 |
|
|
|
39 |
|
|
|
|
|
|
|
90,159 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Noncurrent: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-government sponsored debt securities |
|
|
2,048 |
|
|
|
5 |
|
|
|
|
|
|
|
2,053 |
|
Government sponsored debt securities |
|
|
13,628 |
|
|
|
67 |
|
|
|
|
|
|
|
13,695 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total noncurrent securities |
|
|
15,676 |
|
|
|
72 |
|
|
|
|
|
|
|
15,748 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total available-for-sale securities |
|
$ |
105,796 |
|
|
$ |
111 |
|
|
$ |
|
|
|
$ |
105,907 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
There were no proceeds from the sales of available-for-sale securities during the three months
ended June 30, 2009 or 2008. Net unrealized holding gains and losses on available-for-sale
securities have been included in accumulated other comprehensive gain (loss).
5
LUMINEX CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
The estimated fair value of available-for-sale debt securities at June 30, 2009, by
contractual maturity, was as follows (in thousands):
|
|
|
|
|
|
|
Estimated |
|
|
|
Fair Value |
|
Due in one year or less |
|
$ |
29,007 |
|
Due in 12 years |
|
|
15,748 |
|
|
|
|
|
|
|
$ |
44,755 |
|
|
|
|
|
Expected maturities may differ from contractual maturities because the issuers of the
securities may have the right to prepay obligations without prepayment penalties.
Financial Accounting Standard (FAS) 157 defines fair value, establishes a framework for
measuring fair value under generally accepted accounting principles and enhances disclosures about
fair value measurements. Fair value is defined under FAS 157 as the exchange price that would be
received for an asset or paid to transfer a liability (an exit price) in the principal or most
advantageous market for the asset or liability in an orderly transaction between market
participants on the measurement date. Valuation techniques used to measure fair value under FAS 157
must maximize the use of observable inputs and minimize the use of unobservable inputs. The
standard describes a fair value hierarchy based on the following three levels of inputs that may be
used to measure fair value, of which the first two are considered observable and the last
unobservable:
Level 1Quoted prices in active markets for identical assets or liabilities.
Level 2Inputs other than Level 1 that are observable, either directly or indirectly, such as
quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or
other inputs that are observable or can be corroborated by observable market data for substantially
the full term of the assets or liabilities.
Level 3Unobservable inputs that are supported by little or no market activity and that are
significant to the fair value of the assets or liabilities.
In accordance with FAS 157, the following table represents the Companys fair value hierarchy
for its financial assets (cash equivalents and investments) measured at fair value on a recurring
basis as of June 30, 2009 (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fair Value Measurements at Reporting Date Using |
|
|
|
Level 1 |
|
|
Level 2 |
|
|
Level 3 |
|
|
Total |
|
Money Market funds |
|
$ |
61,152 |
|
|
|
|
|
|
|
|
|
|
$ |
61,152 |
|
Non-government sponsored debt obligations |
|
|
2,053 |
|
|
|
|
|
|
|
|
|
|
|
2,053 |
|
Government sponsored debt obligations |
|
|
49,170 |
|
|
|
|
|
|
|
|
|
|
|
49,170 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
|
$ |
112,375 |
|
|
|
|
|
|
|
|
|
|
$ |
112,375 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amounts included in: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
66,151 |
|
|
|
|
|
|
|
|
|
|
$ |
66,151 |
|
Short-term investments |
|
|
30,476 |
|
|
|
|
|
|
|
|
|
|
|
30,476 |
|
Long-term investments |
|
|
15,748 |
|
|
|
|
|
|
|
|
|
|
|
15,748 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
|
$ |
112,375 |
|
|
|
|
|
|
|
|
|
|
$ |
112,375 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6
LUMINEX CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
NOTE 3 INVENTORY, NET
Inventory consisted of the following (in thousands):
|
|
|
|
|
|
|
|
|
|
|
June 30, |
|
|
December 31, |
|
|
|
2009 |
|
|
2008 |
|
Parts and supplies |
|
$ |
5,539 |
|
|
$ |
5,213 |
|
Work-in-progress |
|
|
4,380 |
|
|
|
3,939 |
|
Finished goods |
|
|
2,492 |
|
|
|
2,437 |
|
|
|
|
|
|
|
|
|
|
$ |
12,411 |
|
|
$ |
11,589 |
|
|
|
|
|
|
|
|
NOTE 4 EARNINGS PER SHARE
In accordance with FAS No. 128, Earnings Per Share, basic and diluted net income per share
is computed by dividing the net income (loss) for the period by the weighted average number of
common shares outstanding during the period.
A reconciliation of the denominators used in computing per share net income, or EPS, is as
follows (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
Six Months Ended |
|
|
|
June 30, |
|
|
June 30, |
|
|
|
2009 |
|
|
2008 |
|
|
2009 |
|
|
2008 |
|
Numerator: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) |
|
$ |
1,112 |
|
|
$ |
(959 |
) |
|
$ |
(1,678 |
) |
|
$ |
(2,125 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Denominator: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Denominator for basic net income (loss) per share
weighted average common stock outstanding |
|
|
40,533 |
|
|
|
35,689 |
|
|
|
40,441 |
|
|
|
35,559 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Denominator for diluted net income (loss) per share
weighted average common stock outstanding and
dilutive common stock equivalents |
|
|
41,353 |
|
|
|
35,689 |
|
|
|
40,441 |
|
|
|
35,559 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic net income (loss) per share |
|
$ |
0.03 |
|
|
$ |
(0.03 |
) |
|
$ |
(0.04 |
) |
|
$ |
(0.06 |
) |
Diluted net income (loss) per share |
|
$ |
0.03 |
|
|
$ |
(0.03 |
) |
|
$ |
(0.04 |
) |
|
$ |
(0.06 |
) |
Basic net income (loss) per share is computed by dividing the net income (loss) for the period
by the weighted average number of common shares outstanding during the period. Diluted net income
(loss) per share is computed by dividing the net income (loss) for the period by the weighted
average number of common and common equivalent shares outstanding during the period. Restricted
stock awards, or RSAs, restricted stock units, or RSUs, and stock options to acquire 2.8 million shares for the three months ended June 30, 2008, and
1.4 million and 2.6 million shares, respectively, for the six months ended June 30, 2009 and 2008
were excluded from the computations of diluted EPS because the effect of including the RSAs, RSUs,
and stock options would have been anti-dilutive.
7
LUMINEX CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
NOTE 5 STOCK-BASED COMPENSATION
The Companys stock option activity for the six months ended June 30, 2009 was as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted |
|
|
|
|
|
|
|
Average |
|
|
|
Shares |
|
|
Exercise |
|
Stock Options |
|
(in thousands) |
|
|
Price |
|
Outstanding at December 31, 2008 |
|
|
2,771 |
|
|
$ |
11.96 |
|
Granted |
|
|
124 |
|
|
|
15.67 |
|
Exercised |
|
|
(27 |
) |
|
|
10.66 |
|
Cancelled or expired |
|
|
(67 |
) |
|
|
17.85 |
|
|
|
|
|
|
|
|
Outstanding at June 30, 2009 |
|
|
2,801 |
|
|
$ |
11.99 |
|
The Company had $2.0 million of total unrecognized compensation costs related to stock options
at June 30, 2009 that are expected to be recognized over a weighted average period of 2.2 years.
The Companys restricted shares activity for the six months ended June 30, 2009 was as
follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted |
|
|
|
|
|
|
|
Average |
|
|
|
Shares |
|
|
Grant-Date |
|
Restricted Stock Awards |
|
(in thousands) |
|
|
Fair Value |
|
Non-vested at December 31, 2008 |
|
|
1,197 |
|
|
$ |
15.39 |
|
Granted |
|
|
388 |
|
|
|
15.70 |
|
Vested |
|
|
(388 |
) |
|
|
14.94 |
|
Cancelled or expired |
|
|
(100 |
) |
|
|
15.92 |
|
|
|
|
|
|
|
|
Non-vested at June 30, 2009 |
|
|
1,097 |
|
|
$ |
16.60 |
|
|
|
|
|
|
|
|
Shares |
|
Restricted Stock Units |
|
(in thousands) |
|
Non-vested at December 31, 2008 |
|
|
280 |
|
Granted |
|
|
344 |
|
Vested |
|
|
(11 |
) |
Cancelled or expired |
|
|
(77 |
) |
|
|
|
|
Non-vested at June 30, 2009 |
|
|
536 |
|
As of June 30, 2009, there was $18.1 million and $7.1 million of unrecognized compensation
cost related to RSAs and RSUs, respectively. That cost is expected to be recognized over a weighted
average period of 3.5 years for the RSAs and 2.9 years for the RSUs.
The following are the stock-based compensation costs recognized in the Companys condensed
consolidated statements of operations (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
Six Months Ended |
|
|
|
June 30, |
|
|
June 30, |
|
|
|
2009 |
|
|
2008 |
|
|
2009 |
|
|
2008 |
|
Cost of revenue |
|
$ |
162 |
|
|
$ |
122 |
|
|
$ |
289 |
|
|
$ |
234 |
|
Research and development |
|
|
240 |
|
|
|
255 |
|
|
|
542 |
|
|
|
499 |
|
Selling, general and administrative |
|
|
1,413 |
|
|
|
1,315 |
|
|
|
2,755 |
|
|
|
2,688 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total stock-based compensation costs |
|
$ |
1,815 |
|
|
$ |
1,692 |
|
|
$ |
3,586 |
|
|
$ |
3,421 |
|
8
LUMINEX CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
NOTE 6 SEGMENT INFORMATION
Management has determined that the Company has two segments for financial reporting purposes:
the Technology Segment and the Assay Segment. The accounting principles of the segments are the
same as those described in the Summary of Significant Accounting Policies in the Companys Annual
Report on Form 10-K for the year ended December 31, 2008. Following is selected segment information
for and as of the periods indicated (in thousands).
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
Three Months Ended |
|
|
|
June 30, 2009 |
|
|
June 30, 2008 |
|
|
|
Technology |
|
|
Assay |
|
|
|
|
|
|
Technology |
|
|
Assay |
|
|
|
|
|
|
Segment |
|
|
Segment |
|
|
Consolidated |
|
|
Segment |
|
|
Segment |
|
|
Consolidated |
|
|
Revenues from external
customers |
|
$ |
19,466 |
|
|
$ |
8,335 |
|
|
$ |
27,801 |
|
|
$ |
20,258 |
|
|
$ |
4,083 |
|
|
$ |
24,341 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization |
|
|
1,057 |
|
|
|
859 |
|
|
$ |
1,916 |
|
|
|
799 |
|
|
|
849 |
|
|
$ |
1,648 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment profit (loss) |
|
|
1,448 |
|
|
|
(336 |
) |
|
$ |
1,112 |
|
|
|
2,156 |
|
|
|
(3,115 |
) |
|
$ |
(959 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment assets |
|
|
141,126 |
|
|
|
73,947 |
|
|
$ |
215,073 |
|
|
|
137,275 |
|
|
|
65,369 |
|
|
$ |
202,644 |
|
Following is selected segment information for and as of the periods indicated (in thousands).
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended |
|
|
Six Months Ended |
|
|
|
June 30, 2009 |
|
|
June 30, 2008 |
|
|
|
Technology |
|
|
Assay |
|
|
|
|
|
|
Technology |
|
|
Assay |
|
|
|
|
|
|
Segment |
|
|
Segment |
|
|
Consolidated |
|
|
Segment |
|
|
Segment |
|
|
Consolidated |
|
|
Revenues from external
customers |
|
$ |
40,564 |
|
|
$ |
12,794 |
|
|
$ |
53,358 |
|
|
$ |
38,914 |
|
|
$ |
8,439 |
|
|
$ |
47,353 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization |
|
|
2,028 |
|
|
|
1,851 |
|
|
$ |
3,879 |
|
|
|
1,577 |
|
|
|
1,728 |
|
|
$ |
3,305 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment profit (loss) |
|
|
3,357 |
|
|
|
(5,035 |
) |
|
$ |
(1,678 |
) |
|
|
3,310 |
|
|
|
(5,435 |
) |
|
$ |
(2,125 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment assets |
|
|
141,126 |
|
|
|
73,947 |
|
|
$ |
215,073 |
|
|
|
137,275 |
|
|
|
65,369 |
|
|
$ |
202,644 |
|
NOTE 7 INCOME TAXES
At the end of each interim reporting period, an estimate is made of the effective tax rate
expected to be applicable for the full year. The estimated full years effective tax rate is used
to determine the income tax rate for each applicable interim reporting period. The effect on
deferred tax assets and liabilities of a change in tax rates is recognized in the results of
operations in the period of the enactment date. The effective tax rate for the six months ended
June 30, 2009 was 7.6%. The Companys tax expense was less than the Federal statutory rate
primarily as a result of the utilization of a portion of the Companys U.S. deferred tax assets
which had been subjected to a valuation allowance.
The Company or one of its subsidiaries files income tax returns in the U.S. federal
jurisdiction, Canada and various states. Due to net operating losses, the U.S. tax returns dating
back to 1996 can still be reviewed by the authorities. With respect to Canada, tax returns dating
back to 2003 can still be reviewed by the authorities. The Company does not expect any material
changes to the estimated amount of liability associated with its uncertain tax positions within the
next twelve months. For the six months ended June 30, 2009, there were no material changes to the
total amount of unrecognized tax benefits. The Company recognizes interest and penalties related
to uncertain tax positions in the provision for income taxes.
9
LUMINEX CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
NOTE 8 COMMITMENTS AND CONTINGENCIES
On January 16, 2008, Luminex Corporation and Luminex Molecular Diagnostics, Inc. (LMD) were
served with a complaint, filed by The Research Foundation of the State University of New York
(SUNY) in Federal District Court for the Northern District of New York, alleging, among other
claims, that LMD breached its license agreement with SUNY by failing to pay royalties allegedly
owed under the agreement. The complaint sought an undetermined amount of damages as well as
injunctive relief. On March 27, 2009, Luminex and LMD settled the pending litigation with SUNY.
As part of the settlement, SUNY received a one time cash payment of approximately $4.4 million,
which represents all amounts owed by Luminex as part of the settlement. The cash payment was made
by Luminex in exchange for resolution of the dispute between the companies and a complete release
of all claims by SUNY against Luminex and correspondingly a complete release of all claims
by Luminex against SUNY. All other terms of the agreement are confidential. The parties have
formally dismissed the lawsuit, as required by the applicable settlement agreement.
On June 19, 2009, Luminex terminated a long-term supply contract related to its
FlexmiR® product line. A payment of $1 million was made in June 2009 related to this
termination. This payment included a purchase of $220,000 of inventory.
NOTE 9 RECENT ACCOUNTING PRONOUNCEMENTS
On June 3, 2009, the FASB approved the FASB Accounting Standards Codification, or the
Codification, as the single source of authoritative nongovernmental Generally Accepted Accounting
Principles, or GAAP, in the United States. The Codification will be effective for interim and
annual periods ending after September 15, 2009. Upon the effective date, the Codification will be
the single source of authoritative accounting principles to be applied by all nongovernmental
U.S. entities. All other accounting literature not included in the Codification will be
non-authoritative. The Company does not expect the adoption of the Codification to have an impact
on its financial position or results of operations.
In June 2009, the FASB issued the following new accounting standards:
|
|
|
FAS No. 166, Accounting for Transfers of Financial Assets, an amendment of FASB
Statement No. 140, or FAS 166; |
|
|
|
FAS No. 167, Amendments to FASB Interpretation No. 46(R), or FAS 167; and |
|
|
|
FAS No. 168, The FASB Accounting Standards Codification and the Hierarchy of Generally
Accepted Accounting Principles, a replacement of FASB Statement No. 162, or FAS 168. |
FAS 166 prescribes the information that a reporting entity must provide in its financial
reports about a transfer of financial assets; the effects of a transfer on its financial position,
financial performance, and cash flows; and a transferors continuing involvement in transferred
financial assets. Specifically, among other aspects, FAS 166 amends Statement of Financial Standard
No. 140, Accounting for Transfers and Servicing of Financial Assets and Extinguishments of
Liabilities, or FAS 140, by removing the concept of a qualifying special-purpose entity from
FAS 140 and removes the exception from applying FIN 46(R) to variable interest entities that are
qualifying special-purpose entities. It also modifies the financial-components approach used in
FAS 140. FAS 166 is effective for transfer of financial assets occurring on or after January 1,
2010. The Company has not determined the effect that the adoption of FAS 166 will have on its
financial position or results of operations but the effect will generally be limited to future
transactions. Historically, the Company has not had any material transfers of financial assets.
10
LUMINEX CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
FAS 167 amends FASB Interpretation No. 46, Consolidation of Variable Interest Entities
(revised December 2003) an interpretation of ARB No. 51, or FIN 46(R), to require an enterprise
to determine whether its variable interest or interests give it a controlling financial interest in
a variable interest entity. The primary beneficiary of a variable interest entity is the enterprise
that has both (1) the power to direct the activities of a variable interest entity that most
significantly impact the entitys economic performance and (2) the obligation to absorb losses of
the entity that could potentially be significant to the variable interest entity or the right to
receive benefits from the entity that could potentially be significant to the variable interest
entity. FAS 167 also amends FIN 46(R) to require ongoing reassessments of whether an enterprise is
the primary beneficiary of a variable interest entity. FAS 167 is effective for all variable
interest entities and relationships with variable interest entities existing as of January 1, 2010.
The Company does not expect the adoption of this standard to have an impact on its financial
position or results of operations.
FAS 168 replaces FAS No. 162, The Hierarchy of Generally Accepted Accounting Principles, to
establish the FASB Accounting Standards Codification as the source of authoritative accounting
principles recognized by the FASB to be applied by nongovernmental entities in preparation of
financial statements in conformity with generally accepted accounting principles in the United
States. FAS 168 is effective for interim and annual periods ending after September 15, 2009. The
Company does not expect the adoption of this standard to have an impact on its financial position
or results of operations.
In May 2009, the FASB issued FAS No. 165, Subsequent Events (FAS No. 165), which provides
guidance to establish general standards of accounting for, and disclosures of, events that occur
after the balance sheet date but before financial statements are issued or are available to be
issued. FAS 165 is effective for interim or fiscal periods ending after June 15, 2009. Accordingly,
the Company adopted the provisions of FAS No. 165 on April 1, 2009. The adoption of this guidance
did not have a material impact on the Companys consolidated financial position, results of operations or
cash flows.
In April 2009, the FASB issued FSP No. FAS 107-1 and APB 28-1, Interim Disclosures about Fair
Value of Financial Instruments, which amend FASB Statement No. 107, Disclosures about Fair Value
of Financial Instruments, to require disclosures about fair value of financial instruments for
interim reporting periods of publicly traded companies as well as in annual financial statements.
This FSP also amends APB Opinion No. 28, Interim Financial Reporting, to require those
disclosures in summarized financial information at interim reporting periods. These FSPs are
effective for reporting periods ending after June 15, 2009 and were adopted by the Company on
April 1, 2009. The adoption of the FSPs did not have a material impact on the Companys financial
statements.
In June 2008, the FASB issued FSP Emerging Issues Task Force (EITF) 03-6-1, Determining
Whether Instruments Granted in Share-Based Payment Transactions Are Participating Securities (FSP
EITF 03-6-1). FSP EITF 03-6-1 provides that unvested share-based payment awards that contain
non-forfeitable rights to dividends or dividend equivalents (whether paid or unpaid) are
participating securities and shall be included in the computation of earnings per share pursuant to
the two-class method described in FASB SFAS No. 128, Earnings per Share. FSP EITF 03-6-1 is
effective for financial statements issued for fiscal years beginning after December 15, 2008 and
interim periods within those years on a retrospective basis. The Company adopted FSP EITF 03-6-1
at the beginning of fiscal 2009. The adoption did not have a material impact on the Companys
financial statements.
11
|
|
|
ITEM 2. |
|
MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS |
The following information should be read in conjunction with the condensed consolidated
financial statements and the accompanying notes included in Part I, Item 1 of this Report, and the
Risk Factors included in Part II Item 1A of this Report and Part I, Item 1A of our Annual Report
on Form 10-K for the year ended December 31, 2008 (the 2008 10-K).
SAFE HARBOR CAUTIONARY STATEMENT
This quarterly report on Form 10-Q contains statements that are forward-looking statements
under the Private Securities Litigation Reform Act of 1995. Forward-looking statements give our
current expectations of forecasts of future events. All statements other than statements of current
or historical fact contained in this report, including statements regarding our future financial
position, business strategy, new products, assay sales, budgets, liquidity, cash flows, projected
costs, litigation costs, including the costs or impact of any litigation settlements or orders,
regulatory approvals or the impact of any laws or regulations applicable to us, and plans and
objectives of management for future operations, are forward-looking statements. The words
anticipate, believe, continue, should, estimate, expect, intend, may, plan,
projects, will, and similar expressions, as they relate to us, are intended to identify
forward-looking statements. These statements are based on our current plans and actual future
activities, and our financial condition and results of operations may be materially different from
those set forth in the forward-looking statements as a result of known or unknown risks and
uncertainties, including, among other things:
|
|
|
risks and uncertainties relating to market demand and acceptance of our products and
technology; |
|
|
|
dependence on strategic partners for development, commercialization and distribution of
products; |
|
|
|
the impact of the ongoing uncertainty in global finance markets and changes in
government funding, including its effects on end users capital spending policies and their
ability to finance purchases of our products; |
|
|
|
concentration of our revenue in a limited number of strategic partners; |
|
|
|
fluctuations in quarterly results due to a lengthy and unpredictable sales cycle, bulk
purchases of consumables, fluctuations in product mix, and the seasonal nature of some of
our assay products; |
|
|
|
our ability to scale manufacturing operations and manage operating expenses, gross
margins and inventory levels; |
|
|
|
potential shortages, or increases in costs, of components; |
|
|
|
our ability to successfully launch new products; |
|
|
|
the timing of regulatory approvals; |
|
|
|
the implementation, including any modification, of our strategic operating plans; |
|
|
|
the uncertainty regarding the outcome or expense of any litigation brought against or
initiated by us; |
|
|
|
risks relating to our foreign operations; and |
|
|
|
risks and uncertainties associated with implementing our acquisition strategy including
our ability to obtain financing, our ability to integrate acquired companies or selected
assets into our consolidated business operations, and the ability to recognize the benefits
of our acquisitions. |
12
Many of these risks, uncertainties and other factors are beyond our control and are difficult
to predict. Any or all of our forward-looking statements in this report may turn out to be
inaccurate. We have based these forward-looking statements largely on our current expectations and
projections about future events and financial trends that we believe may affect our financial
condition, results of operations, business strategy and financial needs. New factors could also
emerge from time to time that could adversely affect our business. The forward-looking statements
herein can be affected by inaccurate assumptions we might make or by known or unknown risks,
uncertainties and assumptions, including the risks, uncertainties and assumptions outlined above
and described in the section titled Risk Factors below and in the 2008 10-K. In light of these
risks, uncertainties and assumptions, the forward-looking events and circumstances discussed in
this report may not occur and actual results could differ materially from those anticipated or
implied in the forward-looking statements. When you consider these forward-looking statements, you
should keep in mind these risk factors and other cautionary statements in this report and our other
annual and periodic reports.
Our forward-looking statements speak only as of the date made. We undertake no obligation to
publicly update or revise forward-looking statements, whether as a result of new information,
future events or otherwise. All subsequent written and oral forward-looking statements attributable
to us or persons acting on our behalf are expressly qualified in their entirety by the cautionary
statements contained in this report.
Unless the context requires otherwise, references in this Quarterly Report on Form 10-Q to
Luminex, the Company, we, us and our refer to Luminex Corporation and its subsidiaries.
OVERVIEW
We develop, manufacture and sell proprietary biological testing technologies and products with
applications throughout the life sciences and diagnostics industries. These industries depend on a
broad range of tests, called bioassays, to perform diagnostic tests, discover and develop new drugs
and identify genes. Our xMAP® (Multi-Analyte Profiling) technology, an open
architecture, multiplexing technology, allows simultaneous analysis of up to 500 bioassays from a
small sample volume, typically a single drop of fluid, by reading biological tests on the surface
of microscopic polystyrene beads called microspheres. xMAP technology combines this miniaturized
liquid array bioassay capability with small lasers, digital signal processors and proprietary
software to create a system offering advantages in speed, precision, flexibility and cost. Our xMAP
technology is currently being used within various segments of the life sciences industry which
includes the fields of drug discovery and development, clinical diagnostics, genetic analysis,
bio-defense, protein analysis and biomedical research.
Our end-user customers and partners, which include laboratory professionals performing
research, clinical laboratories performing tests on patients as ordered by a physician and other
laboratories, have a fundamental need to perform high quality testing as efficiently as possible.
Luminex has adopted a business model built around strategic partnerships. We have licensed our xMAP
technology to companies, which then develop products that incorporate the xMAP technology into
products that they sell to the end-user. Luminex develops and manufactures the proprietary xMAP
laboratory instrumentation and the proprietary xMAP microspheres and sells these products to its
partners. Our partners then sell xMAP instrumentation and xMAP-based reagent consumable products,
which run on the instrumentation, to the end-user laboratory. Luminex was founded on this model,
and our success to date has been due to this model. As of June 30, 2009, Luminex had approximately
62 strategic partners and these partners have purchased from Luminex over 6,200 xMAP-based systems.
Of the 62 strategic partners, 38 have released commercialized reagent-based products utilizing our
technology.
Beginning in 2006, we began developing proprietary assays. This development was supplemented
in 2007 by our acquisition of Tm Bioscience, which we named Luminex Molecular Diagnostics, or LMD.
Our Assay Segment focuses on the molecular diagnostics market and certain specialty markets.
13
Luminex has several forms of revenue that result from our business model:
|
|
|
System revenue is generated from the sale of our xMAP systems and peripherals.
Currently, system revenue is derived from the sale of the Luminex 100 and 200 analyzers,
our FLEXMAP 3D system, optional XY Platform and Sheath Delivery Systems. |
|
|
|
Consumable revenue is generated from the sale of our dyed polystyrene microspheres and
sheath fluid. Our larger commercial and development partners often purchase these
consumables in bulk to minimize the number of incoming qualification events and to allow
for longer development and production runs. |
|
|
|
Royalty revenue is generated when a partner sells a kit incorporating our proprietary
microspheres to an end user or when a partner utilizes a kit to provide a testing result to
a user. End users can be facilities such as testing labs, development facilities and
research facilities that purchase prepared kits and have specific testing needs or testing
service companies that provide assay results to pharmaceutical research companies or
physicians. |
|
|
|
Assay revenue is generated from the sale of our kits which are a combination of chemical
and biological reagents and our proprietary bead technology used to perform diagnostic and
research assays on samples. |
|
|
|
Service revenue is generated when a partner or other owner of a system purchases a
service contract from us after the standard warranty has expired. Service contract revenue
is amortized over the life of the contract and the costs associated with those contracts
are recognized as incurred. |
|
|
|
Other revenue consists of items such as training, shipping, parts sales, license
revenue, grant revenue, contract research and development fees, milestone revenue and other
items that individually amount to less than 5% of total revenue. |
Second Quarter 2009 Highlights
|
|
|
Consolidated revenue of $27.8 million for the quarter ended June 30, 2009, representing
a 14% increase over revenue for the second quarter of 2008 |
|
|
|
Consolidated gross profit margin of 69% compared with second quarter 2008 gross profit
margin of 68% |
|
|
|
System shipments of 158 including 16 shipments of FLEXMAP 3D, resulting in cumulative
life-to-date shipments of 6,255 |
|
|
|
Full commercial launch of the high-throughput FLEXMAP 3D multiplexing system |
|
|
|
Establishment of an office in Shanghai, Peoples Republic of China to provide commercial
support and service to customers and partners in the area |
|
|
|
Launch of two new cystic fibrosis (CF) tests in Europe, the xTAG® Cystic
Fibrosis 39 Kit v2 and xTAG Cystic Fibrosis 71 Kit v2, as CE IVD Marked products under the
European Directive on In Vitro Diagnostic Medical Devices |
|
|
|
Our partners reported over $67 million of royalty bearing end user sales on xMAP
technology for the quarter, a 21% increase over the second quarter of 2008 |
14
We have experienced a decrease in system and consumable revenue from the fourth quarter of
2008 and first quarter of 2009. We believe this decrease was a result of several factors:
|
|
|
The tightening of the capital markets due to the overall economic environment and the
related extension of the sales cycle on our system sales. We remain confident in our long
term guidance of 175 to 225 systems per quarter, recognizing that volatility in the number
of systems sold per quarter can be expected in the short term. |
|
|
|
The uncertainties surrounding government funding and its effect on the timing of planned
purchases by end users. |
|
|
|
The decline in bulk consumable purchases in the second quarter of 2009. In the fourth
quarter of 2008, first quarter of 2009, and second quarter of 2009, we had bulk purchases
totaling $6.8 million, $6.1 million, and $5.5 million in consumables, respectively. In the
first quarter of 2009, the decrease was primarily a result of one less bulk purchaser. The
decrease in the second quarter of 2009 was primarily a result of a significant volume
reduction in the bulk purchases from one of our partners due to the varying consumable
needs during the regulatory clearance and commercialization phases of development of that
partners new products. We have previously indicated that variability is expected in the
absolute number of bulk purchasers and purchases per quarter and we expect this variability
to continue. Non-bulk purchases for the past four quarters have remained essentially
unchanged at approximately $1.0 million to $1.5 million. |
Segment Information
Luminex has two reportable segments: the Technology Segment and the Assay Segment. The
Technology Segment, which is our base business, consists of system sales to partners, raw bead
sales, royalties, service and support of the technology, and other miscellaneous items. The Assay
Segment is primarily involved in the development and sale of assays on xMAP technology for use on
Luminexs installed base of systems.
Future Operations
We expect 2009 revenue to be driven by sustained adoption of our core technology coupled with
assay introduction and commercialization by the Assay Segment. We anticipate continued
concentration of our revenue in the higher margin items (assays, consumables and royalties)
contributing to favorable, but variable gross margin percentages. Additionally, we believe that a
sustained investment in R&D is necessary in order to meet the needs of our marketplace; therefore,
we estimate that R&D expenditures for the year ended December 31, 2009 will increase above their
current level. We expect in the longer term that although our investment in R&D will increase,
total R&D expenditures as a percentage of revenue will decrease towards our long term target of 15% of
revenue. We could experience volatility in R&D expenses as a percentage of revenue on a quarterly
basis.
We expect our primary challenges throughout the remainder of 2009 to be:
|
|
|
the constraints on capital spending experienced by our partners and customers due
to the current economic conditions and the impact on our system sales; |
|
|
|
|
the timing effect of government funding on planned purchases by end users; |
|
|
|
|
continued adoption and development of partner products incorporating Luminex
technology; |
|
|
|
|
our ability to manage operating costs appropriately in order to improve operating
margins; |
|
|
|
|
commercialization, regulatory acceptance and market adoption of output from the
Assay Segment; and |
|
|
|
|
the expansion and enhancement of our footprint and reputation within our identified
target market segments. |
15
CRITICAL ACCOUNTING POLICIES AND ESTIMATES
The discussion and analysis of our financial condition and results of operations are based
upon our condensed consolidated financial statements, which have been prepared in accordance with
United States generally accepted accounting principles for interim financial statements. The
preparation of these financial statements requires us to make estimates and judgments that affect
the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of
contingent assets and liabilities. We base our estimates on historical experience and on various
other assumptions that are believed to be reasonable under the circumstances, the results of which
form the basis for making judgments about the carrying values of assets and liabilities that are
not readily apparent from other sources. Estimates and assumptions are reviewed periodically.
Actual results may differ from these estimates under different assumptions or conditions.
Management believes there have been no significant changes during the quarter ended June 30,
2009 to the items that we disclosed as our critical accounting policies and estimates in
Managements Discussion and Analysis of Financial Condition and Results of Operations in the 2008
10-K.
16
RESULTS OF OPERATIONS
THREE MONTHS ENDED JUNE 30, 2009 COMPARED TO THREE MONTHS ENDED JUNE 30, 2008
Selected consolidated financial data for the three months ended June 30, 2009 and 2008 is as
follows (dollars in thousands):
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
|
June 30, |
|
|
|
2009 |
|
|
2008 |
|
Revenue |
|
$ |
27,801 |
|
|
$ |
24,341 |
|
Gross profit |
|
$ |
19,300 |
|
|
$ |
16,563 |
|
Gross profit margin percentage |
|
|
69 |
% |
|
|
68 |
% |
Operating expenses |
|
$ |
18,271 |
|
|
$ |
17,077 |
|
Income (loss) from operations |
|
$ |
1,029 |
|
|
$ |
(514 |
) |
Total revenue increased by 14% to $27.8 million for the three months ended June 30, 2009 from
$24.3 million for the comparable period in 2008. The increase in revenue was primarily attributable
to growth in assay and royalty revenue as a result of the success of our Cystic Fibrosis (CF) and
Respiratory Viral Panel (RVP) product lines, our increased cumulative instrument placements, menu
expansion, and utilization of our partners assays on our technology. System sales for the second
quarter of 2009 decreased to 158 systems from 203 systems for the corresponding prior year period
bringing total system sales since inception to 6,255 as of June 30, 2009.
A breakdown of revenue for the three months ended June 30, 2009 and 2008 is as follows (in
thousands):
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
|
June 30, |
|
|
|
2009 |
|
|
2008 |
|
System sales |
|
$ |
6,111 |
|
|
$ |
6,318 |
|
Consumable sales |
|
|
6,682 |
|
|
|
8,503 |
|
Assay revenue |
|
|
7,769 |
|
|
|
3,526 |
|
Royalty revenue |
|
|
4,298 |
|
|
|
3,472 |
|
Service contracts |
|
|
1,424 |
|
|
|
1,277 |
|
Other revenue |
|
|
1,517 |
|
|
|
1,245 |
|
|
|
|
|
|
|
|
|
|
$ |
27,801 |
|
|
$ |
24,341 |
|
|
|
|
|
|
|
|
We continue to experience revenue concentration in a limited number of strategic partners. Two
customers accounted for 26% of consolidated total revenue in the second quarter of 2009 (17% and
9%, respectively). For comparative purposes, these same two customers accounted for 42% of total
revenue (28% and 14%, respectively) in the second quarter of 2008. Our two largest customers are
customers of our Technology Segment. The decrease in percentage of total revenue represented by
our two largest customers is the result of the shift in revenue allocation from the Technology
Segment to the Assay Segment. For the three months ended June 30, 2009, Assay Segment revenue
represented 30% of total revenue, while Assay Segment revenue represented 17% of total revenue for
the three months ended June 30, 2008. In addition, there was a decrease in the dollar amount of
bulk purchases and the number of systems ordered by our two largest customers due to the varying
consumable needs during the regulatory clearance and commercialization phases of development of our
partners products in a new market and the economic environment as discussed in the Overview
section above. No other customer accounted for more than 10% of total revenue in this quarter.
17
Gross profit margin percentage increased to 69% for the three months ended June 30, 2009 from
68% for the comparable period in 2008 due to the continued shift in revenue concentration towards
higher margin items: assays and royalties. The increase in operating expenses from $17.1 million
for the second quarter of 2008 to $18.3 million for the second quarter of 2009 is primarily a
result of additional personnel costs and the related stock compensation and travel costs associated
with the increase in employees and contract employees as headcount has increased from 364 to 409
from June 30, 2008 to June 30, 2009, and a payment of $780,000 made related to the termination of
a supply contract associated with our FlexmiR® product line. We are finalizing
development of our next generation FlexmiR product line, which we anticipate will launch later in
2009. This termination is not expected to affect FlexmiR product supply to customers. Net
operating income increased due to the increase in revenue and gross profit margin percentage. See
additional discussions by segment below.
Technology Segment
Selected financial data for our Technology Segment for the three months ended June 30, 2009
and 2008 is as follows (dollars in thousands):
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
|
June 30, |
|
|
|
2009 |
|
|
2008 |
|
Revenue |
|
$ |
19,466 |
|
|
$ |
20,258 |
|
Gross profit |
|
$ |
12,958 |
|
|
$ |
13,826 |
|
Gross profit margin percentage |
|
|
67 |
% |
|
|
68 |
% |
Operating expenses |
|
$ |
11,572 |
|
|
$ |
11,365 |
|
Income from operations |
|
$ |
1,386 |
|
|
$ |
2,461 |
|
Revenue. Total revenue for our Technology Segment decreased by 4% to $19.5 million for
the three months ended June 30, 2009 from $20.3 million for the comparable period in 2008. The
decrease in revenue was primarily attributable to a decrease in consumable sales offset by an
increase in royalty revenue. Two customers accounted for 37% of total Technology Segment revenue in
the second quarter of 2009 (24% and 13%, respectively). For comparative purposes, these same two
customers accounted for 50% of total Technology Segment revenue (34% and 16%, respectively) in the
second quarter of 2008. The decrease in percentage of total revenue represented by our two largest
customers is due to a decrease in the dollar amount of bulk purchases and the number of systems
ordered by our two largest customers as discussed in the Overview section above.
A breakdown of revenue in the Technology Segment for the three months ended June 30, 2009 and
2008 is as follows (in thousands):
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
|
June 30, |
|
|
|
2009 |
|
|
2008 |
|
System sales |
|
$ |
5,719 |
|
|
$ |
5,860 |
|
Consumable sales |
|
|
6,660 |
|
|
|
8,492 |
|
Royalty revenue |
|
|
4,298 |
|
|
|
3,472 |
|
Service contracts |
|
|
1,353 |
|
|
|
1,266 |
|
Other revenue |
|
|
1,436 |
|
|
|
1,168 |
|
|
|
|
|
|
|
|
|
|
$ |
19,466 |
|
|
$ |
20,258 |
|
|
|
|
|
|
|
|
System and peripheral component sales decreased by 2% to $5.7 million for the three
months ended June 30, 2009 from $5.9 million for the comparable period of 2008. The Technology
Segment sold 149 of the 158 total system sales in the three months ended June 30, 2009. For the
three months ended June 30, 2009, five of our partners accounted for 106, or 71%, of total
Technology Segment system sales for the period. The top five partners purchased 156, or 81%, of
total Technology Segment system sales in the three months ended June 30, 2008. We believe the
decrease in system sales is a result of the tightening of the capital markets due to the overall
economic
environment and the related extension of the sales cycle on our system sales.
18
Consumable sales, comprised of microspheres and sheath fluid, decreased 22% to $6.7 million
for the three months ended June 30, 2009 from $8.5 million for the three months ended June 30,
2008. This is primarily the result of a decrease in the average dollar amount of bulk purchases due
to a significant volume reduction in the bulk purchases from one of our partners which in the prior
year was exploring a new market and purchased a significant amount of consumables. Due to the
varying consumable needs during the regulatory clearance and commercialization phases of
development of that partners products in this new market, we will continue to experience
variability in consumable revenue. A bulk purchase is defined as the purchase of $100,000 or more
of consumables in a quarter. During the three months ended June 30, 2009, we had 13 bulk purchases
of consumables totaling approximately $5.5 million as compared with 12 bulk purchases totaling
approximately $7.3 million in the three months ended June 30, 2008. Partners who reported royalty
bearing sales accounted for $5.6 million, or 84%, of total consumable sales for the three months
ended June 30, 2009 compared to $8.0 million, or 94% of total consumable sales for the three months
ended June 30, 2008.
Royalty revenue, which results when our partners sell products or services incorporating our
technology, increased by 24% to $4.3 million for the three months ended June 30, 2009 compared with
$3.5 million for the three months ended June 30, 2008. We believe this is primarily the result of
our increased cumulative instrument placements, menu expansion, and utilization of our partners
assays on our technology. We expect modest fluctuations in the number of commercial partners
submitting royalties quarter to quarter based upon the varying contractual terms, consolidations
among partners, differing reporting and payment requirements, and the addition of new partners. For
the three months ended June 30, 2009, we had 33 commercial partners submitting royalties as
compared to 31 for the three months ended June 30, 2008. One of our partners reported royalties
totaling approximately $1.4 million or 33% of total royalties for the current quarter compared to
$1.1 million or 32% for the quarter ended June 30, 2008. Three other customers reported royalties
totaling approximately $1.5 million or 35% (13%, 11% and 11%, respectively) of total royalties for
the current quarter. No other customer accounted for more than 10% of total royalty revenue for the
current quarter. Total royalty bearing sales reported to us by our partners were over $67 million
for the quarter ended June 30, 2009 compared with over $55 million for the quarter ended June 30,
2008.
Service contracts revenue, comprised of extended warranty contracts earned ratably over the
term of a contract, increased by 7% to $1.4 million for the second quarter of 2009 from
$1.3 million for the second quarter of 2008. This increase is attributable to additional resources
allocated to the sale of extended service agreements resulting in increased penetration of the
expanded installed base. At June 30, 2009 and 2008, we had 1,008 and 943 Luminex systems,
respectively, covered under extended service agreements.
Other revenues, comprised of training revenue, shipping revenue, miscellaneous part sales,
amortized license fees, reagent sales, and grant revenue, increased by 23% to $1.4 million for the
three months ended June 30, 2009 from $1.2 million for the three months ended June 30, 2008. This
increase is primarily the result of an increase in grant and training revenue.
Gross profit. The gross profit margin percentage (gross profit as a percentage of total
revenue) for the Technology Segment decreased to 67% for the three months ended June 30, 2009 from
68% for the three months ended June 30, 2008. Gross profit for the Technology Segment decreased to
$13.0 million for the three months ended June 30, 2009, as compared to $13.8 million for the three
months ended June 30, 2008. The decrease in gross profit margin percentage was primarily
attributable to changes in revenue mix between our higher and lower gross margin items. The
decrease in gross profit was primarily attributable to the overall decrease in revenue coupled with
the decrease in gross margin. Consumables and royalties, two of our higher margin items, comprised
$11.0 million, or 56%, of Technology Segment revenue for the current quarter and $12.0 million, or
59%, of Technology Segment revenue for the quarter ended June 30, 2008.
Research and development expense. Research and development expenses for the Technology Segment
decreased to $2.4 million for the three months ended June 30, 2009 from $2.8 million for the
comparable period in 2008. The decrease was primarily related to the decrease in utilization of
direct materials in the research process and the timing of expenses related to our various R&D
projects, offset by additional personnel costs and the related stock compensation and travel costs
associated with the increase in employees and contract employees as headcount has increased from 68
to 73 from June 30, 2008 to June 30, 2009.
19
Selling, general and administrative expense. Selling, general and administrative expense for
the Technology Segment increased to $9.2 million for the three months ended June 30, 2009 from
$8.6 million for the comparable period in 2008. The increase was primarily related to additional
personnel costs and the related stock compensation and travel costs associated with the increase in
selling, general, and administrative employees and contract employees of the Technology Segment to
108 at June 30, 2009 from 89 at June 30, 2008.
Other income, net. Other income increased to $178,000 for the three months ended June 30, 2009
from $(183,000) for the comparable period in 2008. The increase is due to $412,000 in costs
recorded in the three months ended June 30, 2008 related to a potential acquisition that did not
occur, offset by the decrease in the average rate earned on current invested balances which
decreased to 0.6% for the three months ended June 30, 2009 from 2.1% for the three months ended
June 30, 2008. This decrease in the average rate earned is the result of an overall decrease in
market rates compared to the prior year period.
Assay Segment
Selected financial data for our Assay Segment for the three months ended June 30, 2009 and
2008 is as follows (dollars in thousands):
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
|
June 30, |
|
|
|
2009 |
|
|
2008 |
|
Revenue |
|
$ |
8,335 |
|
|
$ |
4,083 |
|
Gross profit |
|
$ |
6,342 |
|
|
$ |
2,737 |
|
Gross profit margin percentage |
|
|
76 |
% |
|
|
67 |
% |
Operating expenses |
|
$ |
6,699 |
|
|
$ |
5,712 |
|
Loss from operations |
|
$ |
(357 |
) |
|
$ |
(2,975 |
) |
A breakdown of revenue in the Assay Segment for the three months ended June 30, 2009 and
2008 is as follows (in thousands):
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
|
June 30, |
|
|
|
2009 |
|
|
2008 |
|
System sales |
|
$ |
392 |
|
|
$ |
458 |
|
Consumable sales |
|
|
22 |
|
|
|
11 |
|
Assay revenue |
|
|
7,769 |
|
|
|
3,526 |
|
Service contracts |
|
|
71 |
|
|
|
11 |
|
Other revenue |
|
|
81 |
|
|
|
77 |
|
|
|
|
|
|
|
|
|
|
$ |
8,335 |
|
|
$ |
4,083 |
|
|
|
|
|
|
|
|
Revenue. Total revenue for our Assay Segment increased by 104% to $8.3 million for the
three months ended June 30, 2009 from $4.1 million for the comparable period in 2008. The increase
in revenue was primarily attributable to an increase in assay revenue, driven primarily by
increased sales of RVP due to the 2009 novel influenza H1N1. The majority of our Assay Segment
revenues are generated from the sale of test kits. Historically, over 70% of our total assay
revenue was derived from our CF product line. As a result of the launch of our RVP product in
January 2008, our top two products in the current quarter were CF and RVP, which represented over
85% of total assay revenue. The top five customers, by revenue, accounted for 73% of total Assay
Segment revenue for the three months ended June 30, 2009 compared to 73% of total Assay Segment
revenue for the three months ended June 30, 2008. In particular, three customers accounted for 58%
of total Assay Segment revenue (24%, 18% and 16%, respectively) for the three months ended June 30,
2009. No other customer accounted for more than 10% of total Assay Segment revenue. During the
three months ended June 30, 2009, our Assay Segment sold nine systems.
Other revenue includes shipping revenue and training revenue.
20
Gross profit. The gross profit margin percentage (gross profit as a percentage of total
revenue) for the Assay Segment increased to 76% for the three months ended June 30, 2009 from 67%
for the three months ended June 30, 2008. Gross profit for the Assay Segment increased to
$6.3 million for the three months ended June 30, 2009, as compared to $2.7 million for the three
months ended June 30, 2008. The increase in gross profit margin percentage was primarily
attributable to increased sales of higher gross margin assays.
Research and development expense. Research and development expenses for our Assay Segment were
$2.6 million and $2.3 million for the three months ended June 30, 2009 and 2008, respectively. The
increase in research and development expenses was primarily due to increased activity for clinical
trials and FDA submissions related to our assay development.
Selling, general and administrative expense. Selling, general and administrative expenses,
including the amortization of acquired intangibles, for the Assay Segment were $4.1 million and
$3.5 million for the three months ended June 30, 2009 and 2008, respectively. The overall increase
in selling, general, and administrative expenses is primarily due to a payment of $780,000 made
related to the termination of a supply contract associated with our FlexmiR product line. We are
finalizing development of our next generation FlexmiR product line, which we anticipate will launch
later in 2009. This termination is not expected to affect FlexmiR product supply to customers.
SIX MONTHS ENDED JUNE 30, 2009 COMPARED TO SIX MONTHS ENDED JUNE 30, 2008
Selected consolidated financial data for the six months ended June 30, 2009 and 2008 (dollars
in thousands):
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended |
|
|
|
June 30, |
|
|
|
2009 |
|
|
2008 |
|
Revenue |
|
$ |
53,358 |
|
|
$ |
47,353 |
|
Gross profit |
|
$ |
36,868 |
|
|
$ |
31,820 |
|
Gross profit margin percentage |
|
|
69 |
% |
|
|
67 |
% |
Operating expenses |
|
$ |
34,255 |
|
|
$ |
33,602 |
|
Income (loss) from operations |
|
$ |
2,613 |
|
|
$ |
(1,782 |
) |
Total revenue increased by 13% to $53.4 million for the six months ended June 30, 2009
from $47.3 million for the comparable period in 2008. The increase in revenue was attributable to
an increase of $4.6 million in assay revenue in the Assay Segment and continued growth in royalty
revenue in the Technology Segment. System sales for the first half of 2009 decreased to 361 systems
from 423 systems for the first half of 2008 bringing total system sales since inception to 6,255 as
of June 30, 2009.
A breakdown of revenue for the six months ended June 30, 2009 and 2008 is as follows (in
thousands):
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended |
|
|
|
June 30, |
|
|
|
2009 |
|
|
2008 |
|
System sales |
|
$ |
12,238 |
|
|
$ |
12,945 |
|
Consumable sales |
|
|
14,285 |
|
|
|
15,057 |
|
Assay revenue |
|
|
11,965 |
|
|
|
7,371 |
|
Royalty revenue |
|
|
8,825 |
|
|
|
6,990 |
|
Service contracts |
|
|
2,856 |
|
|
|
2,497 |
|
Other revenue |
|
|
3,189 |
|
|
|
2,493 |
|
|
|
|
|
|
|
|
|
|
$ |
53,358 |
|
|
$ |
47,353 |
|
|
|
|
|
|
|
|
21
We continue to experience revenue concentration in a limited number of strategic
partners. Two customers accounted for 30% of consolidated total revenue in the first half of 2009
(19% and 11%, respectively). For comparative purposes, these same two customers accounted for 37%
of total revenue (22% and 15%, respectively) in the first half of 2008. No other customer
accounted for more than 10% of total revenue in the six months ended June 30, 2009. Our two largest
customers are customers of our Technology Segment. The decrease in percentage of total revenue
represented by our two largest customers is the result of the shift in revenue allocation from the
Technology Segment to the Assay Segment. For the six months ended June 30, 2009, Assay Segment
revenue represented 24% of total revenue, while Assay Segment revenue represented 18% of total
revenue for the six months ended June 30, 2008. In addition, there was a decrease in the dollar
amount of bulk purchases and the number of systems ordered by our two largest customers due to the
varying consumable needs during the regulatory clearance and commercialization phases of
development of our partners products and the economic environment as discussed in the Overview
section above.
Gross profit margin percentage increased to 69% for the six months ended June 30, 2009 from
67% for the comparable period in 2008 due to the continuing shift in revenue concentration towards
higher margin items such as assays and royalties. The increase in operating expenses from $33.6
million for the six months ended June 30, 2008 to $34.3 million for the six months ended June 30,
2009 reflects growth in the Assay Segment, additional personnel costs associated with the increase
in research and development and selling, general, and administrative employees to 269 at June 30,
2009 from 242 at June 30, 2008, and a payment of $780,000 made related to the termination of a
supply contract associated with our FlexmiR product line. We are finalizing development of our
next generation FlexmiR product line, which we anticipate will launch later in 2009. This
termination is not expected to affect FlexmiR product supply to customers. Net operating income
increased as a result of the increase in revenues in 2009, and the gross margin increase. Other
income, net increased to $449,000 for the six months ended June 30, 2009 from $139,000 for the
comparable period in 2008 partially due to $412,000 in costs recorded in the six months ended June
30, 2008 related to a potential acquisition that did not occur. In addition, the average rate
earned on current invested balances decreased to 0.8% for the six months ended June 30, 2009 from
3.2% for the six months ended June 30, 2008. This decrease in the average rate earned is the
result of an overall decrease in market rates compared to the prior year period. See additional
discussions by segment below.
Technology Segment
Selected financial data for our Technology Segment for the six months ended June 30, 2009 and
2008 is as follows (dollars in thousands):
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended |
|
|
|
June 30, |
|
|
|
2009 |
|
|
2008 |
|
Revenue |
|
$ |
40,564 |
|
|
$ |
38,914 |
|
Gross profit |
|
$ |
27,541 |
|
|
$ |
25,815 |
|
Gross profit margin percentage |
|
|
68 |
% |
|
|
66 |
% |
Operating expenses |
|
$ |
22,637 |
|
|
$ |
22,455 |
|
Income from operations |
|
$ |
4,904 |
|
|
$ |
3,360 |
|
Revenue. Total revenue for our Technology Segment increased by 4% to $40.6 million for
the six months ended June 30, 2009 from $38.9 million for the comparable period in 2008. The
increase in revenue was primarily attributable to an increase in royalty revenue as a result of the
continued acceptance and utilization of our technology in the marketplace offset by decreases in
consumable sales. Two customers accounted for 39% of total Technology Segment revenue in the first
half of 2009 (24% and 15%, respectively). For comparative purposes, these same two customers
accounted for 45% of total Technology Segment revenue (27% and 18%, respectively) in the first half
of 2008. The decrease in percentage of total revenue represented by our two largest customers is
due to
a decrease in the dollar amount of bulk purchases and the number of systems ordered by our two
largest customers as discussed in the Overview section above.
22
A breakdown of revenue in the Technology Segment for the six months ended June 30, 2009 and
2008 is as follows (in thousands):
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended |
|
|
|
June 30, |
|
|
|
2009 |
|
|
2008 |
|
System sales |
|
$ |
11,730 |
|
|
$ |
12,023 |
|
Consumable sales |
|
|
14,250 |
|
|
|
15,037 |
|
Assay revenue |
|
|
|
|
|
|
|
|
Royalty revenue |
|
|
8,825 |
|
|
|
6,990 |
|
Service contracts |
|
|
2,725 |
|
|
|
2,485 |
|
Other revenue |
|
|
3,034 |
|
|
|
2,379 |
|
|
|
|
|
|
|
|
|
|
$ |
40,564 |
|
|
$ |
38,914 |
|
|
|
|
|
|
|
|
System and peripheral component sales decreased by 2% to $11.7 million for the six months
ended June 30, 2009 from $12.0 million for the comparable period of 2008. The Technology Segment
sold 348 of the 361 total system sales in the six months ended June 30, 2009. For the six months
ended June 30, 2009, five of our partners accounted for 230, or 66%, of total technology segment
system sales for the period. Five of our partners accounted for 300, or 75%, of total technology
segment system sales for the six months ended June 30, 2008. The decrease in system sales is a
result of the tightening of the capital markets due to the overall economic environment and the
related extension of the sales cycle on our system sales.
Consumable sales decreased by 5% to $14.3 million for the six months ended June 30, 2009 from
$15.0 million for the six months ended June 30, 2008. This is primarily the result of a decrease
in the average dollar amount of bulk purchases due to a significant volume reduction in the bulk
purchases from one of our partners which in the prior year was exploring a new market and purchased
a significant amount of consumables. Due to the varying consumable needs during the regulatory
clearance and commercialization phases of development of that partners new products, we will
continue to experience variability in consumable revenue. During the six months ended June 30,
2009, we had 24 bulk purchases of consumables totaling approximately $11.6 million, or 81% of total
consumable sales for the six months ended June 30, 2009 as compared with 23 bulk purchases totaling
approximately $12.4 million, or 82% of total consumable sales for the six months ended June 30,
2008. Partners who reported royalty bearing sales accounted for $12.2 million, or 86%, of total
consumable sales for the six months ended June 30, 2009. As the number of applications available
on our platform expands, we anticipate that the overall level of consumable sales, and related bulk
purchases, will continue to fluctuate.
Royalty revenue increased by 26% to $8.8 million for the six months ended June 30, 2009
compared with $7.0 million for the six months ended June 30, 2008. We believe this is primarily
the result of the increased use and acceptance of our technology. We expect modest fluctuations in
the number of commercial partners submitting royalties period to period based upon the varying
contractual terms, consolidations among partners, differing reporting and payment requirements, and
the addition of new partners. For the six months ended June 30, 2009, we had 38 commercial
partners submitting royalties as compared to 34 for the six months ended June 30, 2008. One of our
partners reported royalties totaling approximately $2.9 million or 32% of total royalties for the
six months ended June 30, 2009 compared to $2.1 million or 27% of total royalties for the six
months ended June 30, 2008. Two other customers reported royalties totaling approximately $2.0
million or 23% (13% and 10%, respectively) of total royalties for the six months ended June 30,
2009. No other customer accounted for more than 10% of total royalty revenue for the six months
ended June 30, 2009. Total royalty bearing sales reported to us by our partners were over $132
million for the six months ended June 30, 2009, compared with over $109 million for the six months
ended June 30, 2008 and over $238 million for the year ended December 31, 2008.
23
Service contracts revenue increased by 10% to $2.7 million for the first half of 2009 from
$2.5 million for the first half of 2008. This increase is attributable to additional resources
allocated to the sale of extended service agreements resulting in increased penetration. At June
30, 2009 and 2008, we had 1,008 and 943 Luminex systems covered under extended service agreements,
respectively.
Other revenues increased by 28% to $3.0 million for the six months ended June 30, 2009 from
$2.4 million for the six months ended June 30, 2008. This increase is primarily the result of an
increase in grant revenue.
Gross profit. The gross profit margin percentage (gross profit as a percentage of total
revenue) for the Technology Segment increased to 68% for the six months ended June 30, 2009 from
66% for the six months ended June 30, 2008. Gross profit for the Technology Segment increased to
$27.5 million for the six months ended June 30, 2009, as compared to $25.8 million for the six
months ended June 30, 2008. The increase in gross profit margin percentage was primarily
attributable to changes in revenue mix between our higher and lower gross margin items. The
increase in gross profit was primarily attributable to the overall increase in revenue coupled with
the increase in gross margin. Royalties, one of our higher margin items, comprised $8.8 million,
or 22%, of Technology Segment revenue for the six months ended June 30, 2009 and $7.0 million, or
18%, of Technology Segment revenue for the six months ended June 30, 2008. We anticipate continued
fluctuation in gross margin rate and related gross profit for the Technology Segment primarily as a
result of variability in partner bulk purchases and absolute number of quarterly system sales.
Research and development expense. Research and development expenses for the Technology Segment
decreased to $4.9 million for the six months ended June 30, 2009 from $5.4 million for the
comparable period in 2008. The decrease was primarily related to the timing of expenses related to
our various R&D projects.
Selling, general and administrative expense. Selling, general and administrative expense for
the Technology Segment increased to $17.7 million for the six months ended June 30, 2009 from $17.0
million for the comparable period in 2008. The increase was primarily related to additional
personnel costs and the related stock compensation and travel costs associated with the increase in
selling, general, and administrative employees and contract employees of the Technology Segment to
108 at June 30, 2009 from 89 at June 30, 2008.
Assay Segment
Selected financial data for our Assay Segment for the six months ended June 30, 2009 and 2008
is as follows (dollars in thousands):
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended |
|
|
|
June 30, |
|
|
|
2009 |
|
|
2008 |
|
Revenue |
|
$ |
12,794 |
|
|
$ |
8,439 |
|
Gross profit |
|
$ |
9,327 |
|
|
$ |
6,005 |
|
Gross profit margin percentage |
|
|
73 |
% |
|
|
71 |
% |
Operating expenses |
|
$ |
11,618 |
|
|
$ |
11,147 |
|
Loss from operations |
|
$ |
(2,291 |
) |
|
$ |
(5,142 |
) |
24
A breakdown of revenue in the Assay Segment for the six months ended June 30, 2009 and
2008 is as follows (in thousands):
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended |
|
|
|
June 30, |
|
|
|
2009 |
|
|
2008 |
|
System sales |
|
$ |
508 |
|
|
$ |
922 |
|
Consumable sales |
|
|
35 |
|
|
|
20 |
|
Assay revenue |
|
|
11,965 |
|
|
|
7,371 |
|
Royalty
revenue |
|
|
|
|
|
|
|
|
Service contracts |
|
|
131 |
|
|
|
12 |
|
Other revenue |
|
|
155 |
|
|
|
114 |
|
|
|
|
|
|
|
|
|
|
$ |
12,794 |
|
|
$ |
8,439 |
|
|
|
|
|
|
|
|
Revenue. Total revenue for our Assay Segment increased by 52% to $12.8 million for the
six months ended June 30, 2009 from $8.4 million for the comparable period in 2008. The increase in
revenue was primarily attributable to a 62% increase in assay revenue, driven primarily by
increased sales of RVP due to the 2009 novel influenza H1N1. The majority of our Assay Segment
revenues are generated from the sale of test kits. Historically, over 70% of our total assay
revenue was derived from our CF product line. As a result of the launch of our RVP product in
January 2008, our top two products in the six months ended June 30, 2009 were CF and RVP, which
together represented 84% of total assay revenue. The top five customers, by revenue, accounted for
73% of total Assay Segment revenue for the six months ended June 30, 2009. In particular, three
customers accounted for 57% of total assay segment revenue (24%, 17%, and 16%, respectively) for
the six months ended June 30, 2009. Four customers accounted for 63% of total revenue in the six
months ended June 30, 2008 (21%, 20%, 12%, and 10%, respectively). No other customer accounted for
more than 10% of total Assay Segment revenue. During the six months ended June 30, 2009, our Assay
Segment sold 13 systems. Other revenue includes shipping revenue and training revenue.
Gross profit. The gross profit margin percentage (gross profit as a percentage of total
revenue) for the Assay Segment increased to 73% for the six months ended June 30, 2009 from 71% for
the six months ended June 30, 2008. Gross profit for the Assay Segment increased to $9.3 million
for the six months ended June 30, 2009, as compared to $6.0 million for the six months ended June
30, 2008. The increase in gross margin rate was primarily attributable to increased utilization
and capacity at LMD, increased sales of higher gross margin assays, and changes in revenue mix
between our higher and lower gross margin items. The increase in gross profit was primarily
attributable to the overall increase in revenue coupled with the increase in gross margin.
Research and development expense. Research and development expenses for our Assay Segment were
$4.7 million and $4.0 million for the six months ended June 30, 2009 and 2008, respectively. The
increase in research and development expenses was primarily due to increased activity related to
assay development.
Selling, general and administrative expense. Selling, general and administrative expenses,
including the amortization of acquired intangibles, for the Assay Segment were $6.9 million and
$7.1 million for the six months ended June 30, 2009 and 2008, respectively. The slight decrease in
selling, general, and administrative expenses is primarily due to a decrease in legal expenses and
external marketing expenses, offset by a payment of $780,000 made related to the termination of a
supply contract associated with our FlexmiR product line. We are finalizing development of our
next generation FlexmiR product line, which we anticipate will launch later in 2009. This
termination is not expected to affect FlexmiR product supply to customers.
25
LIQUIDITY AND CAPITAL RESOURCES
|
|
|
|
|
|
|
|
|
|
|
June 30, |
|
|
December 31, |
|
|
|
2009 |
|
|
2008 |
|
|
|
(in thousands) |
|
|
(in thousands) |
|
Cash and cash
equivalents |
|
$ |
66,151 |
|
|
$ |
81,619 |
|
Short-term
investments |
|
|
30,476 |
|
|
|
40,501 |
|
Long-term
investments |
|
|
15,748 |
|
|
|
2,000 |
|
|
|
|
|
|
|
|
|
|
$ |
112,375 |
|
|
$ |
124,120 |
|
|
|
|
|
|
|
|
At June 30, 2009, we held cash and cash equivalents, short-term investments, and
long-term investments of $112.4 million and had working capital of $117.5 million. At December 31,
2008, we held cash and cash equivalents, short-term investments, and long-term investments of
$124.1 million and had working capital of $131.5 million. The decrease in cash, cash equivalents
and short-term investments is primarily attributable to capital expenditures and an increase in our
accounts receivable as of June 30, 2009.
We have funded our operations to date primarily through the issuance of equity securities (in
conjunction with an initial public offering in 2000, subsequent option exercises, and our secondary
public offering in 2008) and cash generated from operations. Our cash reserves are held directly or
indirectly in a variety of short-term, interest-bearing instruments, including government sponsored
debt obligations and non-government sponsored debt obligations. We do not have any investments in
asset-backed commercial paper, auction rate securities, mortgage backed or sub-prime style
investments.
Cash used in operating activities was $5.7 million for the three months ended June 30, 2009,
compared with cash provided by operating activities of $4.2 million for the three months ended June
30, 2008. Significant items affecting operating cash flows for the three months ended June 30, 2009
were an increase in accounts receivable of $4.0 million, a decrease in accounts payable of $4.5
million, offset by depreciation and amortization of $2.0 million and stock-based compensation of
$1.8 million.
Cash provided by investing activities was $1.7 million for the three months ended June 30,
2009, compared with cash used in investing activities of $4.5 million for the three months ended
June 30, 2008. In the second quarter of 2009, our purchases of securities increased as we invested
cash and cash equivalents in long-term investments with one- to two-year terms to take advantage of
higher interest rates. In addition, our capital expenditures for property, plant, and equipment
increased to $3.6 million and $5.1 million for the three and six months ended June 30, 2009,
respectively, compared to $1.1 million and $1.9 million for the three and six months ended June 30,
2008, respectively. The capital expenditures were primarily related to leasehold improvements for
additional space leased in the U.S. and the Netherlands, acquisitions of FLEXMAP 3D systems for
internal use, and purchases of equipment for our business continuity site.
Our operating expenses during the three months ended June 30, 2009 were $18.3 million, of
which $5.0 million was research and development expense and $13.3 million was selling, general and
administrative expense, including the amortization of acquired intangibles. We expect our
investment in research and development to increase for the remainder of 2009 as a result of our
continuing investment in the research and development pipeline to support our strategy and expanded
focus on product and platform development; however, in the longer term, we expect total expense as
a percentage of revenue to be between 15% and 18% of total revenue. We do not currently expect
selling, general, and administrative expenses in 2009, excluding the impact of foreign exchange on
foreign denominated balances, to increase at the same rate as in prior years.
26
Our future capital requirements will depend on a number of factors, including our success in
developing and expanding markets for our products, payments under possible future strategic
arrangements, continued progress of our research and development of potential products, the timing
and outcome of regulatory approvals, the need to acquire licenses to new technology, costs
associated with strategic acquisitions including integration costs and assumed liabilities,
litigation expense, the status of competitive products and potential costs associated with both
protecting and defending our intellectual property. Additionally, actions taken as a result of the
ongoing internal evaluation of our business could result in expenditures not currently contemplated
in our estimates for 2009. We believe, however, that our existing cash and cash equivalents are
sufficient to fund our operating expenses, capital equipment requirements and other expected
liquidity requirements for the coming twelve months. Factors that could affect this estimate are
discussed in the Safe Harbor Cautionary Statement of this report and the Risk Factors in our 2008
10-K.
To the extent capital resources are insufficient to meet future capital requirements we will
have to raise additional funds to continue the development and deployment of our technologies.
There can be no assurance that debt or equity funds will be available on favorable terms, if at
all, particularly given the current state of the capital markets. To the extent that additional
capital is raised through the sale of equity or convertible debt securities, the issuance of those
securities could result in dilution to our stockholders. Moreover, incurring debt financing could
result in a substantial portion of our operating cash flow being dedicated to the payment of
principal and interest on such indebtedness, could render us more vulnerable to competitive
pressures and economic downturns and could impose restrictions on our operations. If adequate funds
are not available, we may be required to curtail operations significantly or to obtain funds
through entering into agreements on unattractive terms.
27
Contractual Obligations
As of June 30, 2009, we had approximately $7.5 million in non-cancelable obligations for the
next 12 months. These obligations are included in our estimated cash usage described below. The
following table reflects our total current non-cancelable obligations by period as of June 30, 2009
(in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Payment Due By Period |
|
|
|
|
|
|
|
Less Than |
|
|
|
|
|
|
|
|
|
|
More Than |
|
Contractual Obligations |
|
Total |
|
|
1 Year |
|
|
1-3 Years |
|
|
3-5 Years |
|
|
5 Years |
|
|
|
(in thousands) |
|
Non-cancelable rental
obligations |
|
$ |
11,484 |
|
|
$ |
2,133 |
|
|
$ |
4,204 |
|
|
$ |
3,818 |
|
|
$ |
1,329 |
|
Non-cancelable purchase
obligations (1) |
|
$ |
9,721 |
|
|
|
4,652 |
|
|
|
1,549 |
|
|
|
1,288 |
|
|
|
2,232 |
|
Long-term debt
obligations (2) |
|
$ |
4,929 |
|
|
|
644 |
|
|
|
2,197 |
|
|
|
1,445 |
|
|
|
643 |
|
Capital lease obligations |
|
$ |
35 |
|
|
|
31 |
|
|
|
4 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total (3) |
|
$ |
26,169 |
|
|
$ |
7,460 |
|
|
$ |
7,954 |
|
|
$ |
6,551 |
|
|
$ |
4,204 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
Purchase obligations include contractual arrangements in the form of purchase orders
primarily as a result of normal inventory purchases or minimum payments due resulting when
minimum purchase commitments are not met. |
|
(2) |
|
On December 12, 2003, LMD entered into an agreement with the Ministry of Industry of
the Government of Canada under which the Government agreed to invest up to Canadian (Cdn)
$7.3 million relating to the development of several genetic tests. This agreement was
amended in March 2009. Funds were advanced from Technology Partnerships Canada (TPC), a
special operating program. The actual payments we received were predicated on eligible
expenditures made during the amended project period which ended July 31, 2008. LMD has
received Cdn $4.9 million from TPC which is expected to be repaid along with approximately
Cdn $1.6 million of imputed interest for a total of approximately Cdn $6.5 million. |
|
|
|
LMD has agreed to repay the TPC funding through a royalty on revenues. Royalty payments
commenced in 2007 at a rate of 1% of total revenue and at a rate of 2.5% for 2008 and
thereafter. Aggregate royalty repayment will continue until total advances plus imputed
interest has been repaid or until December 31, 2016, whichever is earlier. The repayment
obligation expires on December 31, 2016 and any unpaid balance will be cancelled and
forgiven on that date. Should the term of repayment be shorter than expected due to higher
than expected assay revenue, the effective interest rate would increase as repayment is
accelerated. Repayments denominated in U.S. Dollars are currently projected to be as shown
in the table above, but actual future sales generating a repayment obligation will vary from
this projection and are subject to the risks and uncertainties described elsewhere in this
report, including under Risk Factors and Safe Harbor Cautionary Statement. The amount
due within one year, as shown in the table above, is our estimated repayment amount based on
the current projected sales for the full year 2009. Furthermore,
payments reflected in U.S.
Dollars are subject to adjustment based upon applicable exchange rates as of the reporting
date. |
|
(3) |
|
Due to the uncertainty with respect to the timing of future cash flows associated with
Luminexs unrecognized tax benefits at June 30, 2009, Luminex is unable to make reasonable
reliable estimates of the timing of cash settlement with the respective taxing authority.
Therefore, $251,000 of unrecognized tax benefits have been excluded from the contractual
obligations table above. |
28
|
|
|
ITEM 3. |
|
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK |
Interest Rate Risk. Our investment portfolio includes cash and cash equivalents, short-term
investments and long-term investments. Our interest income is sensitive to changes in the general
level of domestic interest rates. A 50 basis point fluctuation from average investment returns at
June 30, 2009 would yield an approximate 2% variance in overall investment return. Due to the types
of investments that we hold, we have concluded that there is no material market risk exposure.
Foreign Currency Risk. As of June 30, 2009, as a result of our foreign operations, we have
costs, assets and liabilities that are denominated in foreign currencies, primarily Canadian
dollars and to a lesser extent the Euro. For example, some fixed asset purchases, certain expenses,
and the TPC debt of our Canadian subsidiary, LMD, are denominated in Canadian dollars while sales
of products are primarily denominated in U.S. dollars. All transactions in our Netherlands
subsidiary are denominated in Euros. As a consequence, movements in exchange rates could cause our
foreign currency denominated expenses to fluctuate as a percentage of net revenue, affecting our
profitability and cash flows. A significant majority of our revenues are denominated in U.S.
dollars. The impact of foreign exchange on foreign denominated balances will vary in relation to
changes between the U.S. and Canadian Dollar exchange rates. A 10% change in the Canadian dollar in
relation to the U.S. dollar could result in an immaterial foreign exchange impact. As a result of
our efforts to expand globally, in the future we will be exposed to additional foreign currency
risk in multiple currencies; however, at this time, our exposure to foreign currency fluctuations
is not material.
In addition, the indirect effect of fluctuations in interest rates and foreign currency
exchange rates could have a material adverse effect on our business financial condition and results
of operations. For example currency exchange rate fluctuations could affect international demand
for our products. In addition, interest rate fluctuations could affect our customers buying
patterns. Furthermore, interest rate and currency exchange rate fluctuations may broadly influence
the United States and foreign economies resulting in a material adverse effect on our business,
financial condition and results of operations. As a result, we cannot give any assurance as to the
effect that future changes in foreign currency rates will have on our consolidated financial
position, results of operations or cash flows. Our aggregate foreign currency transaction loss of
$100,000 was included in determining our consolidated results of operations for the three months
ended June 30, 2009.
|
|
|
ITEM 4. |
|
CONTROLS AND PROCEDURES |
Evaluation of Disclosure Controls and Procedures
We maintain disclosure controls and procedures, as defined in Rule 13a-15(e) promulgated under
the Securities Exchange Act of 1934 (Exchange Act), which are designed to ensure that information
required to be disclosed by us in the reports that we file or submit under the Exchange Act is
recorded, processed, summarized and reported within the time periods specified in the Securities
and Exchange Commissions rules and forms and that such information is accumulated and communicated
to our management, including our Chief Executive Officer and Chief Financial Officer, as
appropriate, to allow timely decisions regarding required disclosure. We carried out an evaluation,
under the supervision and with the participation of our management, including our Chief Executive
Officer and Chief Financial Officer, of the effectiveness of the design and operation of our
disclosure controls and procedures, as of the end of the period covered by this quarterly report.
Based on the evaluation and criteria of these disclosure controls and procedures, the Chief
Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures
were effective.
Changes in Internal Control over Financial Reporting
There were no changes in our internal control over financial reporting identified in
connection with the evaluation required by Exchange Act Rule 13a-15(d) during the quarter ended
June 30, 2009 that have materially affected, or are reasonably likely to materially affect, our
internal control over financial reporting.
29
PART II. OTHER INFORMATION
Reference is made to the factors set forth under the caption Safe Harbor Cautionary
Statement in Part I, Item 2 of this report and other risk factors described in Part I, Item 1A of
our Annual Report on Form 10-K for the year ended December 31, 2008, which are incorporated herein
by reference. There have been no material changes from the risk factors previously disclosed in our
Annual Report on Form 10-K for the year ended December 31, 2008.
|
|
|
ITEM 2. |
|
UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS |
The stock repurchase activity for the second quarter of 2009 was as follows:
ISSUER PURCHASES OF EQUITY SECURITIES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average |
|
|
Total Number of Shares |
|
|
Appromixate Dollar Value of |
|
|
|
Total Number |
|
|
Price Paid |
|
|
Purchased as Part of |
|
|
Shares that May Yet Be |
|
|
|
of Shares |
|
|
per Share |
|
|
Publicly Announced |
|
|
Purchased Under the Plans or |
|
Period |
|
Purchased |
|
|
(1)($) |
|
|
Plans or Programs |
|
|
Programs |
|
04/01/09 04/30/09 |
|
|
6,839 |
|
|
|
16.94 |
|
|
|
|
|
|
|
|
|
05/01/09 05/31/09 |
|
|
81,510 |
|
|
|
15.54 |
|
|
|
|
|
|
|
|
|
06/01/09 06/30/09 |
|
|
9,305 |
|
|
|
16.20 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Second Quarter |
|
|
97,654 |
|
|
|
15.70 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
Shares purchased are attributable to the withholding of shares by Luminex to satisfy the payment of tax obligations
related to the vesting of restricted shares. |
|
|
|
ITEM 4. |
|
SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS |
At our 2009 Annual Meeting of Stockholders, which was held on May 21, 2009, our stockholders
elected Partrick J. Balthrop, Sr., G. Walter Loewenbaum II, Kevin M. McNamara, and Edward A.
Ogunro, Ph.D to serve as Class III directors for a term of three years by the following votes:
|
|
|
|
|
|
|
|
|
|
|
Number of Shares |
|
|
|
Voted For |
|
|
Withheld |
|
Partrick J. Balthrop, Sr. |
|
|
35,566,581 |
|
|
|
210,438 |
|
G. Walter Loewenbaum II |
|
|
35,502,026 |
|
|
|
274,993 |
|
Kevin M. McNamara |
|
|
35,389,588 |
|
|
|
387,431 |
|
Edward A. Ogunro, Ph.D. |
|
|
35,552,577 |
|
|
|
224,442 |
|
The other directors whose terms of office as a director continued after the meeting were as
follows: Robert J. Cresci, Thomas W. Erickson, Fred C. Goad, Jr., Jay B. Johnston, Jim D. Kever,
and Gerard Vaillant.
30
The following items were also presented to the stockholders with the following results:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of Shares |
|
|
|
|
|
|
|
|
|
|
Voted |
|
|
|
|
|
|
Broker |
|
|
|
Voted For |
|
|
Against |
|
|
Abstained |
|
|
Non-Votes |
|
|
To approve the
Luminex Corporation
Amended and
Restated 2006
Equity Incentive
Plan |
|
|
26,443,987 |
|
|
|
2,060,524 |
|
|
|
51,268 |
|
|
|
7,221,240 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
To ratify the
appointment by the
Companys Audit
Committee of Ernst
& Young LLP as the
Companys
independent
registered public
accounting firm for
fiscal 2009 |
|
|
35,746,660 |
|
|
|
10,158 |
|
|
|
20,200 |
|
|
|
|
|
The following exhibits are filed herewith:
|
|
|
|
|
Exhibit
Number |
|
Description of Documents |
|
|
|
|
|
|
10.1 |
|
|
Luminex Corporation Amended and Restated 2006 Equity Incentive Plan (Incorporated by
reference to Exhibit 10.1 to our Current Report on Form 8-K dated May 21, 2009). |
|
|
|
|
|
|
10.2 |
|
|
Form of Non-Qualified Stock Option Agreement (Incorporated by reference to Exhibit 10.2 to
our Current Report on Form 8-K dated May 21, 2009). |
|
|
|
|
|
|
10.3 |
|
|
Form of Restricted Share Award Agreement (Officers and Employees) (Incorporated by reference
to Exhibit 10.3 to our Current Report on Form 8-K dated May 21, 2009). |
|
|
|
|
|
|
10.4 |
|
|
Form of Restricted Share Award Agreement (Directors) (Incorporated by reference to Exhibit
10.4 to our Current Report on Form 8-K dated May 21, 2009). |
|
|
|
|
|
|
10.5 |
|
|
Form of Restricted Share Unit Agreement (Officers and Employees) (Incorporated by reference
to Exhibit 10.5 to our Current Report on Form 8-K dated May 21, 2009). |
|
|
|
|
|
|
10.6 |
|
|
Form of Restricted Share Unit Agreement (Directors) (Incorporated by reference to Exhibit
10.6 to our Current Report on Form 8-K dated May 21, 2009). |
|
|
|
|
|
|
31.1 |
|
|
Certification by CEO pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
|
|
|
|
|
|
31.2 |
|
|
Certification by CFO pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
|
|
|
|
|
|
32.1 |
|
|
Certification by CEO pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906
of the Sarbanes-Oxley Act of 2002. |
|
|
|
|
|
|
32.2 |
|
|
Certification of CFO pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906
of the Sarbanes-Oxley Act of 2002. |
31
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly
caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized.
|
|
|
|
|
Date: August 7, 2009 |
LUMINEX CORPORATION
|
|
|
By: |
/s/ Harriss T. Currie
|
|
|
|
Harriss T. Currie |
|
|
|
Vice President, Finance, Chief Financial
Officer and Treasurer (Principal Financial
Officer) |
|
|
|
|
|
By: |
/s/ Patrick J. Balthrop, Sr.
|
|
|
|
Patrick J. Balthrop, Sr. |
|
|
|
President and Chief Executive Officer
(Principal Executive Officer) |
|
S-1
EXHIBIT INDEX
|
|
|
|
|
Exhibit |
|
|
Number |
|
Description of Documents |
|
|
|
|
|
|
10.1 |
|
|
Luminex Corporation Amended and Restated 2006 Equity Incentive Plan (Incorporated by
reference to Exhibit 10.1 to our Current Report on Form 8-K dated May 21, 2009). |
|
|
|
|
|
|
10.2 |
|
|
Form of Non-Qualified Stock Option Agreement (Incorporated by reference to Exhibit 10.2 to
our Current Report on Form 8-K dated May 21, 2009). |
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10.3 |
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Form of Restricted Share Award Agreement (Officers and Employees) (Incorporated by reference
to Exhibit 10.3 to our Current Report on Form 8-K dated May 21, 2009). |
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10.4 |
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Form of Restricted Share Award Agreement (Directors) (Incorporated by reference to Exhibit
10.4 to our Current Report on Form 8-K dated May 21, 2009). |
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10.5 |
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Form of Restricted Share Unit Agreement (Officers and Employees) (Incorporated by reference
to Exhibit 10.5 to our Current Report on Form 8-K dated May 21, 2009). |
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10.6 |
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Form of Restricted Share Unit Agreement (Directors) (Incorporated by reference to Exhibit
10.6 to our Current Report on Form 8-K dated May 21, 2009). |
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31.1 |
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Certification by CEO pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
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31.2 |
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Certification by CFO pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
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32.1 |
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Certification by CEO pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906
of the Sarbanes-Oxley Act of 2002. |
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32.2 |
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Certification of CFO pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906
of the Sarbanes-Oxley Act of 2002. |
S-2