LUMINEX CORPORATION. February 5 th, th Quarter and Full Year 2008 Results of Operations

Transcription

1 LUMINEX CORPORATION 4 th Quarter and Full Year Results of Operations February 5 th, 2009 Patrick J. Balthrop, President and Chief Executive Officer Harriss T. Currie, Vice President and Chief Financial Officer

2 Safe Harbor Certain statements made during the course of this presentation may not be purely historical and consequently may be forward looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including but not limited to: Statements made regarding our strategic outlook and growth plan for our business for 2009 and beyond; the increasing productivity and profitability of our installed base of systems, the expansion of our direct assay segment product offerings, and the resulting shift in our revenue mix and improvement in gross margins; the ability of new partnerships and distribution agreements to deliver future value and expand the reach of our products; the achievement of product development milestones and full commercialization of FLEXMAP 3D; our and our partners ability to develop new products and to penetrate existing and new markets; the growth in demand for our products and technology and our partners ability to enhance that growth; our ability to enhance existing and develop new strategic partnerships; our ability to weather the current economic environment based on, among other things, the strength of our balance sheet, the cost-effectiveness of our products, the diversity of our customer base, the competitive benefits of our products, our regulatory focus, and the strength of our product pipeline; potential additional investment in our company; the long-term value of and demand for our products in various strategic markets; operational trends, including those related to sales of consumables, royalty revenues and inventory levels; maintaining our expense levels and growing revenue; increased bulk purchases of our consumables in future periods; the security of our cash reserves; our long term financial targets; our business outlook and projections about revenues, cash flow, system shipments, expenses and market conditions, and their anticipated impact on the Company; information regarding development, timing and performance of new products; and, any statements of the plans, strategies and objectives of management for future operations. These forward looking statements speak only as of the date hereof and are based on our current beliefs and expectations and are subject to known or unknown risks and uncertainties some of which are beyond the company s control that could cause actual results or plans to differ materially and adversely from those anticipated in the forward looking statements. Factors that could cause or contribute to such differences are detailed in our press release or in our annual, quarterly, or other filings with the Securities and Exchange Commission. We undertake no obligation to update these forward looking statements. Also, certain non-gaap financial measures as defined by SEC Regulation G, may be covered in this presentation. To the extent that any non-gaap financial measures are covered, a presentation of and reconciliation to the most directly comparable GAAP financial measures will be included in this presentation and/or be available on our website at in accordance with Regulation G. 2

3 4 th Quarter FY Highlights and 2009 Outlook Patrick J. Balthrop President and Chief Executive Officer

4 Today s Agenda Company Highlights 2009 Strategic Outlook Upcoming Events Financial Review 2009 Summary Financial Outlook Q&A 4

5 Financial Achievements Record annual revenue of $104.4 million Record system shipments of 912 for, with cumulative shipments of 5,891, an increase of 18% over Record annual consumables of $31.7 million, an increase of 65% over Record royalty revenue of $14.9 million, an increase of 45% over Record assay revenue of $18.7 million, an increase of 65% over Record gross profit margin of 68% Achieved $3.1 million of net income for 5

6 Annual Trends Positive growth trends across a number of metrics (in $000 s) 120, ,000 80,000 60,000 40,000 20,000 0 (in $000 s) 15,000 Annual Consolidated Revenue (CAGR of 31%) Annual Royalty Revenue (CAGR of 48%) (in units) 6,000 5,000 4,000 3,000 2,000 1,000 0 (in $000 s) 30,000 Cumulative System Shipments (CAGR of 21%) Annual Consumable Revenue (CAGR of 37%) 10,000 20,000 5,000 10,000 0 (in %) 70% 60% 50% 40% 30% 20% 10% 0% Gross Margin % Note: LMD royalties have been eliminated for all periods presented 0 (in $000 s) 20, Assay Revenue 15,000 10,000 5, Note: LMD consumables have been eliminated for all periods 6

7 Strategic Achievements Luminex Timeline of Past and Future Milestones RVP Cleared by FDA Abbott & Fisher Distribution of RVP Strategic Partnership w/ Tyson Foods 5000 Instruments Shipped Secondary Offering Newborn Screening Strategic Partnership w/ BD RVP Cleared by Health Canada Launch FLEXMAP 3D LMD Submissions Luminex continues to execute and achieve key milestones 7

8 Achievements Forbes Names Luminex Corporation one of the 25 Fastest-Growing Technology Companies in America Fast Company - Fast 50 American Business Awards, Stevie Awards Executive Management Innovation Tech Innovation Award (xtag RVP) 8

9 Executing the Growth Plan A track record of execution Gross Margin % Sales Growth % 53% 61% 61% 68% 42% 39% 18% 25% Execution of Growth Strategy Begins Investment in R&D +47% Investment in First Assay Product Investment in Infrastructure, Reg, Mktg, Service Continued Execution Investment in R&D +55% LBG investment begins to pay w/ two assays Investment in Infrastructure, Reg, Mktg, Service Investment in R&D +77% Tm Acquisition Closed Announce Next Gen Instrument: FLEXMAP 3D Launch xtag RVP Launch FlexmiR Select mirna Investment in R&D FDA Clearance of RVP 5000 th instrument shipped Launch FLEXMAP 3D SG&A Management Strategic Partnerships 9

10 Strategic Structure and Growth Initiatives Luminex s unique business structure allows us to better reach broader more diversified markets Structure: Strategy: Initiatives: Technology Group ---Assay Group--- Luminex Partner Model Luminex Molecular Diagnostics Luminex Bioscience Group Broaden Product Pipeline Continue to Penetrate Existing Markets Aggressively Enter New Market Segments Grow Strategic Partnerships Instrument Platforms Assay Content Reference Lab Immunoassay MDx, CF, RVP MDx Infectious Disease Animal Health Newborn Screening Bio-Defense Menu Expansion Expand Market Reach Proprietary xmap Technology 10

11 2009 Strategic Outlook Luminex well positioned for continued success in 2009 Luminex Position Strong balance sheet Track record of execution Serve diverse markets xmap technology improves efficiency 2009 Critical Success Factors Flu season FLEXMAP 3D Newborn screening Animal health panel Robust pipeline of products 11

12 2009 Upcoming Events Luminex Investor Day March 3, 2009 Intercontinental, The Barclay New York 12:00pm, Astor Room New York, New York Planet xmap USA 2009 Symposium Discover a World of Applications with xmap Technology May 4-6, 2009 Hyatt Regency Austin Hotel Austin, Texas Register Online: 12

13 Financial Review Harriss T. Currie Vice President, Finance and Chief Financial Officer

14 Financial Progress Quarterly Consolidated Revenue (CAGR of 41%) Millions $30 $25 $20 $15 $10 $5 $- Thousands 4th st 2nd 3rd 4th 1st 2nd 3rd 4th Quarterly Royalty Revenue (CAGR of 39%) $4,500 $4,000 $3,500 $3,000 $2,500 $2,000 $1,500 $1,000 $500 $- 4th st 2nd 3rd 4th 1st 2nd 3rd 4th Cumulative System Shipments (CAGR of 19%) Units 6,000 5,500 5,000 4,500 4,000 3,500 3,000 2,500 Quarterly Consumable Revenue w/ 4 Qtr. Moving Avg. (CAGR of 52%, 4Qtr. MA 46%) Millions $9 $8 $7 $6 $5 $4 $3 $2 $1 $- 4th th st 1st 2nd 2nd 3rd 3rd 4th 4th 1st 1st 2nd 2nd 3rd 3rd 4th 4th Note: LMD royalties have been eliminated for all periods presented CAGRs represent 4Q 06-4Q 08 time period Note: LMD consumables have been eliminated for all periods 14

15 Consolidated Results ($ in thousands, except earnings per share) Three Months Ended Dec. 31 st * Full Year Ended Dec. 31 st * Revenues $28,197 $21,501 $104,447 $75,010 Gross Margin 69% 62% 68% 61% Operating Profit / (Loss) 2,154 (2,943) 3,353 (17,418) Net Profit / (Loss) 2,009 11,061 3,057 (2,711) Net Income/ (Loss) Per Share $.05 $.31 $.08 $(.08) Diluted Income / (Loss) Per Share $.05 $.30 $.08 $(.08) *The results for the 4th quarter of include consolidated operations for the combined companies (Luminex and Tm Bioscience (now LMD)). The full year includes 10 months of consolidated operations as a result of the March 1, acquisition of Tm Bioscience. 15

16 Revenue Drivers Impressive growth in higher margin items 65% 65% 45% Royalty Assay Consumables 16

17 Consolidated Revenue Distribution Product mix includes a greater percentage of higher margin items $30,000 $25,000 $100,000 $20,000 $15,000 $10,000 63% 55% $80,000 $60,000 $40,000 63% 54% $5,000 $20,000 $0 Q4 Q4 $0 System Revenue Royalty Revenue Service Revenue Consumable Revenue Reagent Revenue Other revenue 17

18 Bulk vs. Non-Bulk Consumables Revenue* Strong increase in consumables compared with prior year periods $8 $7 $6 Non-Bulk Consumable Sales Bulk Consumable Sales Millions $5 $4 $3 $2 $1 $- 4th Qtr st Qtr 2nd Qtr 3rd Qtr 4th Qtr 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Bulk purchases of consumables account for the majority of the volatility; Non-bulk sales are more consistent quarter to quarter * With LMD eliminated for all periods presented 18

19 Revenue Results by Segment Strong performance in both Assay and Technology Segments $30,000 $25,000 As say Technology $120,000 $100,000 Ass ay Technology $20,000 $80,000 $15,000 $60,000 $10,000 $40,000 $5,000 $20,000 $0 Q4 Q4 $0 Assay segment revenue grew 66% over Technology segment revenue grew 34% over 19

20 Delivering Results Disciplined Management of Operating Expenses (in thousands) R&D $6,000 $5,000 $4,000 $3,000 $2,000 25% 20% 15% 10% Continued investment in R&D; however as a percentage of revenue will decrease $1,000 5% $- 07-Q4 08-Q1 08-Q2 08-Q3 08-Q4 R&D expense R&D as a % of Revenue 0% (in thousands) $25,000 $20,000 SG&A 65% Ongoing management of SG&A expenses $15,000 55% $10,000 45% $5,000 35% $- 07-Q4 08-Q1 08-Q2 08-Q3 08-Q4 25% SG&A expense SG&A as a % of Revenue 20

21 Cash & Investment Flow Components of cash and investment flow Millions $74.7M $5.8M $124.1M $12.5mm 60 $13.9M $4.5M 40 $34.2M 20 0 Beginning Cash + Investments Operating Cash Flow PP&E Purchases Equity Issuances Other Items Ending Cash + Investments 21

22 Balance Sheet Highlights Strong Balance Sheet 12/31/ 12/31/ Total Cash & Investments $ 124,120 $ 34,177 Goodwill + Intangibles $ 55,413 $ 56,536 Accounts Receivable $ 11,024 $ 11,827 Days Sales Outstanding Inventory $ 11,589 $ 6,508 Working Capital $131,516 $ 40,801 ($ in thousands, except for DSO) 22

23 Financial Targets Consolidated Technology and Assay Operations Long-term Targeted Annual Revenue Growth 25+% All Metrics Except Revenue Growth Expressed in % of Current Year Revenue Long-Term Metric Target Revenue 100% 100% 100% 100% 100% Revenue Growth (YoY) 18% 25% 42% 39% 25+% Gross Profit 53% 61% 61% 68% 65 75% R&D Expense 13% 16% 21% 18% 15% Pretax Income (Loss) (6)% 3% (3)% 4% 25-35% 23

24 Outlook: 2009 and Beyond Focused on delivering results in 2009 Corporate Performance 2009 Revenue Expectations: $130-$140 Million Continue to Execute Strategic Growth Plan New Product Launches Investment in R&D will Scale with Company 15% of Revenue is Long Term Target Leverage in SG&A 24

25 LUMINEX CORPORATION 4 th Quarter and Full Year Results of Operations February 5 th, 2009 Patrick J. Balthrop, President and Chief Executive Officer Harriss T. Currie, Vice President and Chief Financial Officer