) first-quarter 2013 adjusted earnings per share of 14 cents beat
the Zacks Consensus Estimate of 8 cents per share by 75%. It also
exceeded the year-ago earnings by 75%. Adjusted earnings exclude
one-time charges such as the amortization, severance and legal
costs along with expenses associated with the termination of
molecular diagnostic distribution agreements.
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However, the company reported net loss (including one-time
expenses) of $2.5 million (or a loss of 6 cents per share) in the
first quarter compared with a net income of $3.5 million (or 8
cents per share). The loss was mainly due to a charge of $7
million related to settlement of distribution agreements with
prior molecular diagnostic assay distributors.
Revenues increased 9% in the reported quarter to $53.2 million,
marginally surpassing the Zacks Consensus Estimate of $53
million. Revenues were driven by double digit growth in royalty
revenues and higher shipment of multiplexing analyzers,
reflecting strong demand for Luminex products.
For the first quarter, Assay sales grew 6% to $18.3 million, led
by strong sales in the infectious disease product line as well as
higher gastrointestinal pathogen panel (GPP) and lab-developed
tests (LDT) assay sales.
Revenues from the System segment dropped 6% year over year to
$6.6 million, mainly due to the ongoing transition from the LX
system to the MAGPIX system, which has a lower price point. The
company shipped 205 multiplexing analyzers during the quarter,
resulting in total life-to-date dispatches of 9,865 analyzers, up
11% year over year.
Consumable sales remained flat at $11.9 million, led by
stabilization of purchase volume of Luminex's largest customer.
Royalty and All Other revenues jumped 23% and 47% to $10.1
million and $6.3 million, respectively.
Gross margin in the quarter was 71% versus 69% in the prior-year
quarter, reflecting a strong mix shift toward higher margin
products and contribution from a milestone payment related to a
development agreement with Merck.
Selling, general and administrative expenses (as a percentage of
sales) were 48.5% versus 34.7% in the year-ago quarter. Research
and development expenses were 23.9% of sales compared with 20.7%
in the previous-year quarter due to expenses related to
development of the Aries project.
Operating expenses were up 40% to $39.5 million due to costs
associated with the settlement of the distributor agreement and
pipeline development expenses. Operating loss was $1.6 million in
the quarter versus an operating income of $5.6 million in the
Luminex ended first quarter 2013 with cash and cash equivalents
of $54.3 million, up 4.8% year over year. Long-term debt was $1.4
million, down 42%.
Moving ahead, Luminex reiterated its expected revenues for fiscal
2013 in the range of $220 million to $230 million, up 9%-14% year
over year. The current Zacks Consensus Estimate is pegged
at $224 million.
In April 2013, Luminex won clearance from the U.S. Food and Drug
Administration (FDA) for its MAGPIX instrument, with its xTAG
Gastrointestinal Pathogen Panel (xTAG GPP). Earlier, in Jan 2013,
it had received FDA clearance for the GPP on the LX200 system.
The expansion of the company's infectious disease and genetic
testing product lines is encouraging.
Luminex has also entered into a collaboration and license
Merck & Co.
) in the quarter. As per the agreement, the company will develop
a companion diagnostic device that will assist in screening
patients into Merck's pivotal study for Alzheimer's disease.
Luminex possesses an extensive product portfolio and a healthy
pipeline of novel assays, which are expected to support growth
going ahead. Moreover, Luminex is developing innovative platforms
by combining resources from its latest acquisitions. The
company's initiative to establish a direct sales force for its
molecular diagnostics customers will likely improve operating
However, Luminex operates in a highly competitive life sciences
industry. Sluggish growth in its core markets as well as the
ongoing global austerity measures are challenges faced by the
company. Also, the loss of its assay distributors is affecting
the bottom line.
The stock carries a Zacks Rank #3 (Hold). Medical instrument
companies, such as
) with Zacks Rank #2 (Buy), are expected to do well.