Q3 2020 Luminex Corp Earnings Call

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Good day, ladies and gentlemen, and welcome to Luminex Corporation's third quarter 2020 earnings Conference call. My name is Jimmy and I will be your coordinator for today today's call is being recorded.

At this time all participants are in a listen only mode.

Following the prepared remarks, there will be a question and answer session.

Like to participate in this portion of the call. Please press star followed by one the anytime during the conference. If assistance is needed at any time during the call. Please press star followed by zero and a coordinator will be happy to assist you.

I'd now like to turn the call over to Harris, <unk> Harris Senior Vice President and Chief Financial Officer for opening remarks. Please proceed.

Just as a reminder, all reports from at least 750 customers are primarily or spittle in reference labs.

The majority of those customer work with us under reagent rental agreement with a long term commitment that last up to five years.

All capacity expansion to be completed by the end of December. So we can catch up as quickly as possible and Ah backlogs of older early in Q1.

As a matter of fact.

Of the Delta water, where the proximity 9 million offer is COVID-19 related to say that we were unable to ship as a result of capacity constrained, but anticipate that all of these specific old there will be filled in the current quarter is.

Reminder, our system are typically on a five.

Agreements and we have also seen a significant increase in the numbers of every system in Taunton stores. This year.

Our new Virgin as phase.

Which brings us to our calling situation with the FDA.

We have submitted monthly responses to the FDA to address the issues raised in the warning letter.

They need to move forward with our planned for the commercial launch of our next generation X. MPC stem X met Intelliflex.

In addition to improved sensitivity and wider dynamically.

One of the most exciting feature of the new SMP Intelleflex system is in its dual reporting function with the new system. In addition to performing up to 500 tests in a single multiplex, where the dual report of feature as a second reported channel.

Reported that our molecular diagnostics revenue for the third quarter was $59.9 million up almost 100% over the prior year quarter, mainly driven by increased demand from the COVID-19 pandemic.

Non automated molecular diagnostics revenue was $29 million up over 120% compared to the third quarter 2019, and sample to answer molecular diagnostics revenue was $31 million up 78%.

In contrast, the clinical tools and life science portion of our business continued to be adversely impacted by the COVID-19 pandemic. However, our flow cytometry sales are showing signs of improvement.

In other product development.

From lower actual tax liability.

Our quarter and operating expenses are expected to remain roughly flat as well.

All this translates to more than 20% growth for the year and as a result of completing our Aries capacity expansion activities, we expect to be well positioned for growth heading into 2021.

Given the extraordinary times, we find ourselves in we thought it would be helpful to provide our longer term expectations for revenue a little earlier than usual.

We expect 2021 to be another strong year for Luminex. We currently anticipate a minimum of 15.

$475 million in revenue.

The completion of our areas expansion to a capacity of around 5 million tests per year will be the primary enabler here.

I think I have been historical debate of system installation in the long term agreement they system placement and installation are expected to contribute significantly to our continued revenue growth.

As I mentioned earlier, we are targeting the end of this year for the expansion of our is automated manufacturing capability, which will allow us to send more customer on ongoing basis and reach our annual capacity of 5 million test.

Yeah.

We also see at least three additional opportunities that could contribute to an iron right of course.

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We expect a rebound of both our partnership and flow supplemental revenue streams.

Remember, we still expect to have approximately 200 million of lifestyle science revenue that we anticipate with gourmet too I single digit is the impact of COVID-19 begins to decline this goat and Paul will be film by success.

Launch of Xmp Teleflex.

Pardon the weight as a reminder, if you'd like to ask a question. During this conference. Please press Star then one on your Touchtone telephone to withdraw your question from the queue. Please press the pound key please standby will be compiled the culinary roster.

Okay.

Our first question comes from Brandon Couillard with Jeff.

Your line is now open.

Hey, Thanks. Good afternoon. This is Peter on for Brian and Thanks for taking the question.

Hey, could you provide any detail on Youtube rates for Aries, and Verigene and third quarter and I guess.

Let me think about 21 and beyond could you help us maybe shape your thoughts around sustainability and I guess, what we're getting at is even if utilization comes down a bit you are placing a lot of new boxes. So how do we think about simply answer reps as we look out to 2001 any color or thoughts there would be appreciated.

So utilization rates on both.

Aries and Verigene were similar to the second quarter on a lot of changes there are areas was just over 80000.

Hi, Eric Mechel service areas May go back to one point Wong. Okay 121 months. Once you won almost double its saying why leg voted for him to remain the same.

Okay, mainly because when you look at it is the same thing to call in February and we don't have any COVID-19, yet solution, we anticipate to get from the FDA and it is obviously we have.

If I'm not mistaken a year ago, we were at under 50 now we all are on one point you won a late they say look for the right number going forward, obviously, we see or at least the continued to climb and we all think to get they he wage submission that we sabina.

On Dave Voretigene bolt on developing long enough venture to diverge in two by the end of this quarter to a bit to drive it fell down there.

There is a $114000 per system per customer sorry.

Urging was at 125, okay. So.

Virginia, roughly around where spend between 120 130000 areas has increased significantly because of the number of essays in a max out of manufacturing on areas that we've.

What we've done over.

Over the past several quarters.

Question from the queue. Please press the pound key please standby when we compiled acumen a roster.

Thanks.

Because I am showing no questions in the queue at this time I'd like to turn the call back to Homi Shamir for any closing remarks.

Thank you operator will and thank you everyone for your attendance on all their earning calls we look forward to see you all ceiling zoom in the very near future.

Ladies and gentlemen, thank you for your participation on today's conference. This does concludes your program you may now disconnect.

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