) reported second quarter 2012 adjusted (excluding one-time
charges) earnings of 7 cents per share, in line with the Zacks
Consensus Estimate but lower than the year-ago earnings of 11 cents
Profit generated was $3 million, down 36.4% from the prior-year
quarter mainly due to higher operating expenses associated with the
EraGen and GenturaDx acquisitions.
Revenues rose 1.3% in the reported quarter to $48.3 million,
slightly missing the Zacks Consensus Estimate of $49 million.
Overall increase in revenue was primarily driven by solid growth in
the Assay business, partially offset by lower System and Consumable
Assay sales soared 89% to $17.5 million backed by the
acquisition of EraGen Biosciences, which has been integrated into
the company as Luminex Madison.
Revenues from System segment dropped 8% year over year to $8.4
million. The company shipped 278 multiplexing analyzers (including
167 MAGPIX systems) in the quarter, resulting in total life-to-date
despatches of 9,162 analyzers, up 12% year over year.
Consumable sales plummeted 41% to $10.8 million due to tough
year-over-year comparison. Royalty and All Other revenues grew 4%
and 12% to $7.7 million and $3.9 million, respectively.
Gross margin in second quarter 2012 was 71%, flat year over
year. Operating expenses were up 11.6% to $27.9 million, due to
costs associated with the Luminex Madison and the GenturaDx
acquisitions. Operating margin fell to 13.4% from 18.5% in the
Selling, general and administrative expenses (as a percentage of
sales) were higher at 35.6% versus 34.6% in the prior-year quarter.
Research and Development expenses were 20% compared with 16.7% in
the year-ago quarter.
Luminex ended second quarter 2012 with cash and cash equivalents
(including short-term investments) of $99 million, up 15.7% year
over year. Long-term debt was $2.2 million, down 29.8%.
The company reiterated its revenue forecast in a range of $205
million - $215 million.
Luminex recently announced a definitive deal to buy U.S.-based
diagnostic testing company, GenturaDx. Per the agreement, Luminex
will buy all the outstanding shares of the privately-owned company
for $50 million in cash, subject to certain terms and conditions.
In addition to $50 million, Luminex may end up making contingent
payments based on the achievement of certain milestones and also on
the basis of product performance.
The GenturaDx deal is in line with Luminex's strategy of
pursuing acquisitions to drive growth. Luminex also possesses an
extensive product portfolio and a healthy pipeline of novel assays,
which are expected to support growth going ahead. The company
submitted a de-novo 510(k) application to the U.S. Food and Drug
Administration ("FDA") for its gastrointestinal pathogen panel
("xTAG GPP") assay.
In the quarter, the company was added to the S&P SmallCap
600 GICS (Global Industry Classification Standard) Life Sciences
Tools & Services Sub-Industry Index.
However, Luminex operates in a highly competitive life sciences
industry. The company competes with
), among others. Moreover, sluggish growth in its core markets is a
challenge faced by Luminex. We are currently Neutral on the stock,
which carries a short-term Zacks #4 Rank (Sell).
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