lmnx-20210331

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q


☑	Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the quarterly period ended
	March 31, 2021	or
☐	Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the transition period from __ to __.

LUMINEX CORPORATION

(Exact name of registrant as specified in its charter)

Delaware

000-30109

74-2747608

(State or other jurisdiction of incorporation)

(Commission File Number)

(I.R.S. Employer Identification No.)

12212 Technology Blvd.,

Austin,

Texas

78727

(Address of principal executive offices)

(Zip Code)

(512)

219-8020

Registrant’s Telephone Number, Including Area Code

None

Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of exchange on which registered

Common Stock, $0.001 par value

LMNX

The Nasdaq Global Select Market

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

☑

Yes

☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

☑

Yes

☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☑

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

☐

Yes

☑

There were 47,313,816 shares of the Company’s Common Stock, par value $0.001 per share, outstanding on May 4, 2021.

LUMINEX CORPORATION

FORM 10-Q

FOR THE QUARTER ENDED MARCH 31, 2021

TABLE OF CONTENTS

PAGE

PART I.

FINANCIAL INFORMATION

Item 1.

Financial Statements

Condensed Consolidated Balance Sheets as of March 31, 202 1 and December 31, 20 2 0

Condensed Consolidated Statements of Comprehensive Income for the Three Months Ended March 31, 202 1 and 20 2 0

Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 202 1 and 20 2 0

Condensed Consolidated Statement of Changes in Stockholders' Equity for the Three Months Ended March 31, 202 1 and 20 2 0

Notes to Condensed Consolidated Financial Statements

Item 2.

Management's Discussion and Analysis of Financial Condition and Result of Operations

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

Item 4.

Controls and Procedures

Unregistered Sales of Equity Securities and Use of Proceeds

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS


LUMINEX CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except share amounts)

	March 31		December 31,
	2021		2020
ASSETS	(unaudited)
Current assets:
Cash and cash equivalents	$	271,560	$	309,407
Accounts receivable, net	69,051		66,963
Inventories, net	132,089		123,134
Prepaids and other	9,085		9,527
Total current assets	481,785		509,031
Property and equipment, net	72,599		64,146
Intangible assets, net	75,877		78,796
Deferred income taxes	33,613		21,077
Goodwill	118,145		118,145
Right of use assets	19,971		17,768
Other	17,041		16,500
Total assets	$	819,031	$	825,463
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	14,559	$	21,049
Accrued liabilities	32,133		56,365
Deferred revenue - current portion	10,871		10,047
Total current liabilities	57,563		87,461
Deferred revenue	1,723		1,658
Lease liabilities	16,053		13,366
Long-term debt	253,514		203,136
Other long-term liabilities	2,131		2,131
Total liabilities	330,984		307,752
Stockholders’ equity:
Common stock, $.001 par value, 200,000,000 shares authorized; issued and outstanding: 46,252,663 shares at March 31, 2021; 45,682,687 shares at December 31, 2020	46		45
Preferred stock, $.001 par value, 5,000,000 shares authorized; no shares issued and outstanding	—		—
Additional paid-in capital	396,244		434,021
Accumulated other comprehensive loss	(657)		(142)
Retained earnings	92,414		83,787
Total stockholders’ equity	488,047		517,711
Total liabilities and stockholders’ equity	$	819,031	$	825,463

See the accompanying notes which are an integral part of these
Consolidated Financial Statements.

Table of Contents


LUMINEX CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(in thousands, except per share amounts)

	Three Months Ended March 31,
	2021		2020
	(unaudited)
Revenue	$	110,688	$	90,424
Cost of revenue	44,227		40,078
Gross profit	66,461		50,346
Operating expenses:
Research and development	13,899		11,918
Selling, general and administrative	36,184		33,935
Amortization of acquired intangible assets	2,919		2,852
Total operating expenses	53,002		48,705
Income from operations	13,459		1,641
Interest and other expense, net	(2,147)		1
Loss from equity method investment	(270)		(614)
Income before income taxes	11,042		1,028
Income tax expense	(1,960)		(374)
Net income	$	9,082	$	654

Net income attributable to common stockholders
Basic	$	8,902	$	634
Diluted	8,904		633
Net income per share attributable to common stockholders
Basic	$	0.19	$	0.01
Diluted	$	0.19	$	0.01
Weighted-average shares used in computing net income per share
Basic	45,889		44,404
Diluted	46,675		45,038

Dividends declared per share	$	0.10	$	0.09

Other comprehensive loss:
Foreign currency translation adjustments	(515)		(63)
Other comprehensive loss	(515)		(63)
Comprehensive income	$	8,567	$	591

See the accompanying notes which are an integral part of these
Consolidated Financial Statements.

Table of Contents


LUMINEX CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)

	Three Months Ended March 31,
	2021		2020
	(unaudited)
Cash flows from operating activities:
Net income	$	9,082	$	654
Adjustments to reconcile net income to net cash used in operating activities:
Depreciation and amortization	7,841		7,434
Amortization of debt issuance costs	363		—
Stock-based compensation	3,429		2,683
Deferred income tax (benefit) expense	(208)		1,053
Loss on sale or disposal of assets	150		47
Loss on equity method investment	270		614
Other	(891)		(138)
Changes in operating assets and liabilities:
Accounts receivable, net	(2,091)		(8,075)
Inventories, net	(8,989)		(1,510)
Other assets	(2,697)		(501)
Accounts payable	(6,556)		(4,186)
Accrued liabilities	(22,166)		(6,134)
Deferred revenue	901		843
Net cash used in operating activities	(21,562)		(7,216)
Cash flows from investing activities:
Purchase of property and equipment	(13,323)		(3,923)
Proceeds from cost method investment	—		22
Acquired technology rights	(125)		—
Net cash used in investing activities	(13,448)		(3,901)
Cash flows from financing activities:

Proceeds from issuance of common stock	4,560		1,349
Shares surrendered for tax withholding	(3,191)		(2,310)
Dividends paid	(4,658)		(4,063)
Net cash provided by (used in) financing activities	(3,289)		(5,024)
Effect of foreign currency exchange rate on cash	452		45
Change in cash and cash equivalents	(37,847)		(16,096)
Cash and cash equivalents, beginning of period	309,407		59,173
Cash and cash equivalents, end of period	$	271,560	$	43,077

See the accompanying notes which are an integral part of these
Consolidated Financial Statements.

Table of Contents


LUMINEX CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY
(in thousands, except share data)
(unaudited)

	Common Stock
	Number of Shares	Amount		Additional Paid-In Capital		Accumulated Other Comprehensive Loss		Retained Earnings		Total Stockholders’ Equity
Balance at December 31, 2020	45,682,687	$	45	$	434,021	$	(142)	$	83,787	$	517,711
Exercise of options, net of shares withheld	204,340	—		3,881		—		—		3,881
Issuances of restricted stock, net of shares withheld for taxes	365,636	1		(3,191)		—		—		(3,190)
Stock compensation	—	—		3,429		—		—		3,429
Net income	—	—		—		—		9,082		9,082
Foreign currency translation adjustments	—	—		—		(515)		—		(515)
Dividends	—	—		54		—		(4,776)		(4,722)
Equity component of convertible notes, net of issuance costs	—	—		$	(41,950)	—		$	4,321	(37,629)
Balance at March 31, 2021	46,252,663	$	46	$	396,244	$	(657)	$	92,414	$	488,047

See the accompanying notes which are an integral part of these
Consolidated Financial Statements.


LUMINEX CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (cont.)
(in thousands, except share data)
(unaudited)

	Common Stock
	Number of Shares	Amount		Additional Paid-In Capital		Accumulated Other Comprehensive Loss		Retained Earnings		Total Stockholders’ Equity
Balance at December 31, 2019	44,325,369	$	44	$	380,304	$	(1,380)	$	85,892	$	464,860
Exercise of options, net of shares withheld	52,604	—		782		—		—		782
Issuances of restricted stock, net of shares withheld for taxes	224,435	1		(2,310)		—		—		(2,309)
Stock compensation	—	—		2,683		—		—		2,683
Net income	—	—		—		—		654		654
Foreign currency translation adjustments	—	—		—		(63)		—		(63)
Dividends	—	—		42		—		(4,143)		(4,101)
Balance at March 31, 2020	44,602,408	$	45	$	381,501	$	(1,443)	$	82,403	$	462,506

See the accompanying notes which are an integral part of these
Consolidated Financial Statements.

Table of Contents

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 — BASIS OF PRESENTATION

The accompanying unaudited condensed consolidated financial statements have been prepared by Luminex Corporation (the Company or Luminex) in accordance with United States generally accepted accounting principles (U.S. GAAP) for interim financial information and the rules and regulations of the Securities and Exchange Commission (SEC). Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. The condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation. In the opinion of management, all adjustments (consisting of normal recurring entries) considered necessary for a fair presentation have been included. Operating results for the three months ended March 31, 2021 are not necessarily indicative of the results that may be expected for the year ending December 31, 2021. These financial statements should be read in conjunction with the financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020 (the 2020 10-K).

NOTE 2 — INVESTMENTS AND OTHER ASSETS

Marketable Securities

The Company determines the appropriate classification of any investments in debt and equity securities at the time of purchase and re-evaluates such determinations at each balance sheet date. As of March 31, 2021, the Company had no short or long-term investments, as those funds were used to pay for acquisitions.

Available-for-sale securities consisted of the following as of March 31, 2021 (in thousands):


	Amortized Cost		Gains in Accumulated Other Comprehensive Income		Losses in Accumulated Other Comprehensive Income		Estimated Fair Value
Current:
Money market funds	$	707	$	—	$	—	$	707
Total current securities	707

SEC Form 10-Q filed by Luminex Corporation