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Luminex Q4 Revenues Rise 4 Percent

NEW YORK (GenomeWeb) – Luminex reported after the close of the market Monday that its fourth quarter revenues rose 4 percent year over year.

The company said revenues increased to $60.4 million for the three months ended Dec. 31, 2015, from $58.1 million a year ago, slightly above analysts' consensus estimate of $60.2 million in revenues for the quarter.

The firm's net earnings for the quarter were $20.4 million, or $.47 per share, compared to $22.8 million, or $.54 per share, for Q4 2014. On an adjusted basis, it reported EPS of $.56 compared to the consensus Wall Street estimate of $.15.

In a conference call with analysts, Luminex CEO Homi Shamir said he was "very pleased" with the company's ability to execute on its financial goals. "We achieved most of our major product development milestones in 2015."

CFO Harriss Currie told analysts that the fourth-quarter revenue gain was offset by a loss of 2 percent in consumables revenue because of an inventory problem experienced by one of Luminex's biggest partners. If this was excluded, he said that total revenue would have increased 9 percent.

Luminex said that system sales in Q4 increased 24 percent year over year to $8.5 million from $6.9 million, while consumables fell to $10.6 million from $10.8 million. Its royalty revenue declined 7 percent to $9.5 million from $10.2 million, while assay revenue climbed 12 percent to $26.9 million from $24.1 million.

Currie said the company shipped a record number of systems in the fourth quarter — 263 in total, including 78 Magpix systems, 137 LX systems, and 48 Flexmap 3D systems.

The firm's selling, general, and administrative expenses rose to $23 million in Q4 from $20.9 million in Q4 2014. The company also increased its R&D spending during the quarter to $10.9 million from $10.4 million in the year-ago period.

Luminex reported that its full-year 2015 revenue rose 5 percent to $237.7 million from $227 million in 2014, slightly above the average Wall Street estimate of $237.5 million.

Its net earnings for the year were $36.9 million, or $.86 per share, versus $39 million, or $.93 per share, for FY 2014. On an adjusted basis, FY 2015 EPS was $1.28, well above analysts' consensus estimate of $.55 per share.

Its SG&A expenses rose to $84.8 million in 2015 from $82.8 million in 2014, while its R&D costs fell slightly to $42.7 million from $43.1 million year over year.

Luminex ended the year with $128.5 million in cash and cash equivalents, and $12 million in short-term investments.

Following on the announced acquisition of Affymetrix by Thermo Fisher Scientific, Shamir was asked on the call if he anticipates any changes in revenue as Affy will no longer be operating independently. He said he doesn't believe the acquisition will change much for Luminex, adding that Thermo Fisher actually has a better distribution capability, so that deal may end up benefiting Luminex in the long run.

Every acquisition of a Luminex partner by a larger partner has historically meant larger purchases for the company, Currie said, adding that there's no reason to think the Thermo Fisher-Affy deal will be any different.

Luminex also recently announced that Jeremy Bridge-Cook, its senior VP of R&D, would be leaving the firm. Shamir said Luminex plans to divide some of the position's responsibilities into a new role, chief medical officer. The company will search internally and externally to fill both roles, though the CMO role is a priority, he added.

For the first quarter of 2016, the company anticipates reporting revenue of $60 million to $62 million, and anticipates revenues of $245 million to $255 million for the full year. Analysts, on average, expect revenues of $61.9 million for Q1 and $249.1 million for FY2016.

The company plans to make M&A a priority in 2016, Shamir said. But in the event that it doesn't find an attractive target to buy, he added "we'll be sitting on close to $200 million in cash, so we can distribute some of that to our shareholders, either by buyback or dividend." 

In a note to investors, Leerink analyst Dan Leonard said he is keeping his current rating of Market Perform for Luminex. The rating reflects Leerink's "lack of conviction" on the company's prospects for its new Aries molecular diagnostics platform, Leonard wrote, particularly since the Q4 report included news of delays in the Aries menu deployment. 

However, Leerink also raised its price target for Luminex to $22 from $21 on the strength of the company's slightly higher revenue forecast and stronger balance sheet. 

"Following years of flattish performance in revenue, LMNX posted strong growth in instrument sales for the second quarter in a row," Leonard wrote. "We expect instrument growth will continue in 2016."

Luminex shares were up nearly 6 percent to $19.95 in Tuesday morning trading on the Nasdaq.