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Luminex Q3 Revenues Rise 9 Percent

NEW YORK – Luminex reported after the close of the market on Monday that its 2019 third quarter revenues were up 9 percent year over year.

For the quarter ended Sept. 30, the molecular diagnostics company reported revenues of $78.7 million compared to $72.4 million in the year-ago quarter, and missed the average Wall Street estimate for revenues of $81.8 million.

"Consistent with our previously communicated plans, 2019 has been a transition year for Luminex as we have adjusted to the departure of certain sales to [Laboratory Corporation of America] and the integration of the flow cytometry acquisition," Homi Shamir, the firm's president and CEO, said in a statement. He said that total revenue was slightly lower than expected due to order timing in flow cytometry in the third quarter.

Luminex CFO Harriss Currie said on a conference call to discuss the firm's financial results that its flow cytometry revenues for the third quarter fell short of its expectations. "This is the primary driver [of] our missed revenue guidance for the quarter," he said. "However, on a year-to-date basis the flow cytometry business is on track with our full-year expectations."

He added that Luminex expects revenues from that business to meet its "$45 million target for the year, which maintains our growth rate above 10 percent."

For Q3 2019, the firm reported system revenues of $15.2 million, up 52 percent year over year from $10 million. Consumables revenues were $13.4 million, up 15 percent year over year from $11.6 million.

Q3 royalty revenues were $13 million, up 8 percent from $12.1 million; assay revenues were $29.5 million, down 13 percent year over year from $33.7 million; service revenues were $5.3 million, up 77 percent year over year from $3.0 million; and other revenues were $2.3 million, up 16 percent year over year from $1.9 million.

Luminex said that its molecular sample-to-answer portfolio revenues grew to $17.4 million in Q3, with 31 new sample-to-answer molecular systems under contract. Active sample-to-answer customers grew to more than 650 in the quarter.

Flow cytometry contributed revenues of approximately $8.7 million in the quarter and $33 million year to date. The firm said that its Q3 revenues reflected a reduction of $6.9 million attributable to the departure of the LabCorp business and sales.

The firm noted that during Q3, its Aries MRSA assay received US Food and Drug Administration 510(k) clearance. In parallel with announcing its Q3 financial results on Monday, the firm also said it has submitted its Verigene II Gastrointestinal Flex Assay to the FDA.

Luminex said that it expects to submit its Verigene II Respiratory Flex Assay to the FDA by year end.

Luminex reported a Q3 net loss of $5.3 million, or $.12 per share, compared to a net gain of $1.7 million, or $.04 per share, a year earlier. The Wall Street consensus was for a loss of $.03 per share.

The firm said that its net loss was primarily due to the discontinuation of LabCorp revenue and the integration of the flow cytometry acquisition and resulting margin compression.

LabCorp had previously confirmed that its last order to Luminex for its NuSwab product, the foundation of the LabCorp women’s health portfolio, was placed in the second quarter of 2018, though in its Q2 2019 earnings call, Luminex said that it would continue seeing unfavorable year-over-year comparisons in Q3 and Q4 of 2019 of about $7 million and $3 million, respectively.

Luminex said that its R&D expenses for Q3 rose 11 percent to $13.3 million from $12.0 million a year earlier. SG&A costs were up 19 percent year over year to $31.4 million from $26.3 million.

The company ended the quarter with $66.1 million in cash and cash equivalents.

Luminex adjusted its full-year 2019 revenue expectations to a range of $334 million to $337 million. During Q2, the firm had reaffirmed a revenue guidance of between $337 million and $343 million. Prior to the release of the financial results, analysts on average expected revenues of $340.3 million in 2019.

Currie said that the firm had anticipated a more robust flu season than it has seen so far in establishing its pervious full-year revenue expectations. "In the current season, we are seeing [a] slight elevation compared with last year," he said.

The firm also announced a dividend of $.09 per share for Q3.

"In terms of expectations for our businesses, we continue to expect that in the next four to five years, we will grow Luminex to more than $500 million in annual revenues," Shamir said on the conference call, adding that any future acquisition opportunity would provide revenue that is incremental to that expectation.

In Tuesday morning trading on the Nasdaq, Luminex shares were down more than 8 percent at $17.86.