LUMINEX CORPORATION First Quarter 2011 Results of Operations May 9, 2011 Patrick J. Balthrop, President and Chief Executive Officer Harriss T. Currie, Vice President and Chief Financial Officer1 Leading. Innovating. Growing.
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 partners’ commitment to, expansion of, and end-customer demand for our technology; long-term demand for and quarterly variability in bulk orders of consumables; volatility in consumables revenue and distribution and growth of such revenue during 2011 and beyond; the market launch of xTAG GPP, its technical capabilities, and the anticipated market size, demand and regulatory approvals therefor; our system and assay product pipeline and anticipated timelines for regulatory approvals and market release, including for our RVP FAST and NeoPlex 4 assays; our collaboration with Partners HealthCare and its ability to accelerate the development and commercialization of novel assays to address unmet clinical needs; the full commercial launch of our MAGPIX instrument, including expected market demand and future distribution therefor; future R&D and SG&A expenditures, variability thereof, and long-term targets therefor; our commitment to deliver revenue growth and manage operating costs; the strength of our balance sheet and sustainable levels of days sales outstanding; the markets we and our partners are targeting and their expected growth; our partnership model and the ability of our partners and our installed base to drive future growth in demand for our technology; the ability of our technology to enhance productivity and efficiency; our strategic outlook and growth plan for our business for 2011 and beyond; our long term financial targets; operational trends, including those related to sales of consumables, royalty revenues and inventory levels; our business outlook and projections about revenues, cash flow, system shipments, expenses and market conditions, and their anticipated impact on Luminex; 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 www.luminexcorp.com in accordance with Regulation G.2 Leading. Innovating. Growing.
1Q11 Highlights Employees and office in Tokyo are safe; experienced minimal disruption • Consolidated 1Q revenue of • In May, received CE Mark for $43.3M (+30% Y/Y): our xTAG® GPP assay • Consumables of $15.0M (+53%) • Collaboration with Partners • Assay sales of $9.6M (+25%) HealthCare in Boston • Consolidated gross margin of • In April, received the Medical 71%, +250bps Y/Y Design Excellence Award for • Operating income of 19% of MAGPIX ® consolidated revenue • Third consecutive year on • Net income of $4.5M, or $0.11 Forbes’ list of the 25 fastest- per fully diluted share growing technology companies4 Leading. Innovating. Growing.
xTAG® GPP Gains CE Mark • xTAG Gastrointestinal Pathogen Panel (GPP) CE Mark received in May NeoPlex4™ CE Mark RVP-FAST US IVD • Value Proposition of GPP: • Targets 15 pathogens (viruses, parasites, toxins and bacteria) • Strong clinical results (sensitivity/specificity) Meningitis CE Mark • Substantial market opportunity ~ $150M WW • Synergies with RVP and Flock Monitor - USDA Fungal ASR current EU installed base6 Leading. Innovating. Growing.
Collaboration with Partners HealthCare • Partners HealthCare is a premier integrated health system and one of the nations leading biomedical research organizations "Luminexs xMAP technology provides an ideal platform for Partners HealthCare to translate novel biomarker discoveries into cutting-edge tests and • Collaboration enables Partners accelerate adoption of new molecular tests to provide HealthCare Center for Personalized the best clinical care for patients." Genetic Medicine (PCPGM) to develop novel molecular diagnostic assays Dr. Heidi Rehm, Director PCPGMs Laboratory for Molecular Medicine at based on biomarkers discovered within Partners HealthCare Partners HealthCare entities • These innovative molecular diagnostic tests will operate on Luminexs proprietary xMAP® platform7 Leading. Innovating. Growing.
MAGPIX® Limited Launch Update • Solid early uptake – 113 units to date • Compact system offers Price and throughput single or multiplex (up to LX 200™ 50 analytes per well) Immunoassay Research Market Facts capabilities North America market: ~ $400M Customer mix: Academia (40%) • Protein and nucleic acid ~135,000 US researchers applications 39% of ELISA users interested in multiplexing in next 12 months* MAGPIX® • Cost advantages over ELISA * Source: Biocompare Immunoassays 2008 – An End User Survey • Initial target market: Immunoassay research Potential Installations8 Leading. Innovating. Growing.
1Q11 Segment Results ($ in thousands - except per share amounts) 1Q 2011 1Q 2010 Variance Revenue Technology & Strategic Partnerships $ 31,935 $ 25,216 $ 6,719 Assays & Related Products 11,340 8,036 3,304 Total Revenue 43,275 33,252 10,023 Operating Income (Loss) Technology & Strategic Partnerships 8,656 4,296 4,360 Assays & Related Products (362) (548) 186 Total Operating Income $ 8,294 $ 3,748 $ 4,546 Total Operating Margin 19% 11% 8%11 Leading. Innovating. Growing.
1Q11 Revenue Distribution (1) (2) Segment Sales Growth % of Sales Highlights Systems $7.7 15% 18% 197 multiplexing analyzers, includes 38 MAGPIX Consumables $15.0 53% 35% 19 bulk orders total $13.3M range: $105K - $9M Royalties $7.3 24% 17% Overall adoption of xMAP; 1Q minimum payments Assays $9.6 25% 22% CF and RVP Franchises ~ 88% of assay revenue Other $3.8 16% 8% Service and maintenance on growing installed base Footnotes: (1) Dollars in millions (2)Year-over-year12 Leading. Innovating. Growing.
Potential for Operating Leverage Research and Development ($M) Sales, General and Administrative ($ in millions) (% of Total Revenue) 17.5% 16.5% of Rev • Focus on driving growth • Continued focus on through significant operating leverage, continued investment in R&D particularly in G&A13 Leading. Innovating. Growing.
Cash & Investment Flow ($ in millions) + 11.2 - 1.2 - 2.0 + 0.5 129.2 - 3.3 123.9 Footnotes: (1) OCF excludes the excess income tax benefit from employee stock-based awards15 Leading. Innovating. Growing.
2011 Guidance Reiterated • 2011 revenue guidance of $163-$170M • Reiteration of 2011 guidance based on our expectation: • 1H11 consumable sales (in $) likely to be greater than 2H11 • Limited contribution from new assays (e.g. qBead, GPP, CYP2D6) • Normal-to-light Influenza-Like-Illness (ILI) season16 Leading. Innovating. Growing.
Long Term Financial Targets • Long-term Compounded Annual Revenue Growth of 20+ Percent • All Metrics Except Revenue Growth Expressed in Percent of Annual Revenue Long Term Metric 2007 2008 2009 2010 1Q11 Targets Revenue 100% 100% 100% 100% 100% Revenue Growth (YoY) 42% 39% 16% 17% 30% 20+% Gross Profit 61% 68% 67% 68% 71% 65% - 75% R&D Expense 21% 18% 17% 17% 18% 15% Pretax Income (Loss) (3)% 4% 6%* 8% 19% 25% - 35% *Adjusted for the settlement of litigation17 Leading. Innovating. Growing.
2011 Starting Out Strong… Near-Term Catalysts Additional MAGPIX distribution, Investor event (July 25) at AACC Strong Financial Position Record 1Q revenue; +30% Y/Y Cash on the balance sheet of $129.2M Robust Product Pipeline GPP CE Mark (Rec’d), RVP Fast in 2011, NeoPlex4 CE Mark at YE11 Leveraging Partners to Drive Adoption Strong 1Q consumable revenue growth (+53%) driven by our top partners18 Leading. Innovating. Growing.