Luminex Q1 2011 Earnings Call

11 Leading. Innovating. Growing.

LUMINEX CORPORATIONFirst Quarter 2011Results of Operations

May 9, 2011

Patrick J. Balthrop, President and Chief Executive Officer

Harriss T. Currie, Vice President and Chief Financial Officer


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.

Safe Harbor


1Q11 Highlights

1Q11 Financial Review

2011 Guidance Update

Q&A

Agenda


1Q11 Highlights

• Consolidated 1Q revenue of $43.3M (+30% Y/Y):• Consumables of $15.0M (+53%)• Assay sales of $9.6M (+25%)

• Consolidated gross margin of 71%, +250bps Y/Y

• Operating income of 19% of consolidated revenue

• Net income of $4.5M, or $0.11 per fully diluted share

• In May, received CE Mark for our xTAG® GPP assay

• Collaboration with Partners HealthCare in Boston

• In April, received the Medical Design Excellence Award for MAGPIX ®

• Third consecutive year on Forbes’ list of the 25 fastest-growing technology companies

Employees and office in Tokyo are safe; experienced minimal disruption


Record 1Q Consumables

88%

5-YR CAGR = +28%


xTAG® GPP Gains CE Mark

RVP-FAST US IVD

• xTAG Gastrointestinal Pathogen Panel (GPP) CE Mark received in May

• Value Proposition of GPP:• Targets 15 pathogens

(viruses, parasites, toxins and bacteria)

• Strong clinical results (sensitivity/specificity)

• Substantial market opportunity ~ $150M WW

• Synergies with RVP and current EU installed baseFlock Monitor - USDA

NeoPlex4™ CE Mark

Fungal ASR

Meningitis CE Mark


Collaboration with Partners HealthCare

• Partners HealthCare is a premier integrated health system and one of the nation's leading biomedical research organizations

• Collaboration enables Partners HealthCare Center for Personalized Genetic Medicine (PCPGM) to develop novel molecular diagnostic assays based on biomarkers discovered within Partners HealthCare entities

• These innovative molecular diagnostic tests will operate on Luminex's proprietary xMAP® platform

"Luminex's xMAP technology provides an idealplatform for Partners HealthCare to translate novelbiomarker discoveries into cutting-edge tests andaccelerate adoption of new molecular tests to providethe best clinical care for patients."

Dr. Heidi Rehm, DirectorPCPGM's Laboratory for Molecular Medicine at

Partners HealthCare


• Solid early uptake –113 units to date

• Compact system offers single or multiplex (up to 50 analytes per well) capabilities

• Protein and nucleic acid applications

• Cost advantages over ELISA

• Initial target market: Immunoassay research

MAGPIX® Limited Launch Update

North America market: ~ $400M Customer mix: Academia (40%) ~135,000 US researchers 39% of ELISA users interested in

multiplexing in next 12 months*MAGPIX®

LX 200™

Pric

e an

d th

roug

hput

Potential Installations

* Source: Biocompare Immunoassays 2008 – An End User Survey

Immunoassay Research Market Facts


1Q11 Highlights

1Q11 Financial Review

2011 Guidance Update

Q&A

Agenda


1Q 2011 1Q 2010 Variance

Revenue 43,275$ 33,252$ 10,023$

Gross Margin % 71% 68% 3%

Operating Expenses 22,434 19,028 (3,406)

Operating Profit 8,294 3,748 4,546

Operating Profit % 19% 11% 8%

Net Income: 4,461$ 1,875$ 2,586$

EPS, basic 0.11$ 0.05$ 0.06$

EPS, diluted 0.11$ 0.05$ 0.06$

1Q11 Income Statement

($ in thousands - except per share amounts)

Leading. Innovating. Growing.


1Q 2011 1Q 2010 Variance

RevenueTechnology & 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%

1Q11 Segment Results

($ in thousands - except per share amounts)

Leading. Innovating. Growing.


1Q11 Revenue Distribution

Systems

Consumables

Royalties

Assays

Other

Segment % of SalesGrowth Highlights

$7.7 15%

53%

24%

25%

16%

CF and RVP Franchises ~ 88% of assay revenue

Overall adoption of xMAP; 1Q minimum payments

19 bulk orders total $13.3M range: $105K - $9M

197 multiplexing analyzers, includes 38 MAGPIX

Service and maintenance on growing installed base

Footnotes: (1) Dollars in millions(2)Year-over-year

(2)

18%

35%

17%

22%

8%

Sales

$15.0

$7.3

$9.6

$3.8

(1)


• Continued focus on operating leverage, particularly in G&A

Sales, General and AdministrativeResearch and Development ($M)

Potential for Operating Leverage

• Focus on driving growth through significant continued investment in R&D

17.5% 16.5% of Rev

(% of Total Revenue)($ in millions)


3/31/11 12/31/10 12/31/09

Cash & Investments 129.2$ 123.9$ 119.6$

Accounts Receivable 14.4$ 20.9$ 22.1$

DSO 30 47 53

Inventory 25.5$ 24.9$ 17.5$

Inventory Turns 0.5 0.5 0.8

Total Assets 265.4$ 265.8$ 248.0$

Current Ratio 11.5 8.7 7.2

Days Payable 35 56 62

Strong Balance Sheet($ in millions)


Cash & Investment Flow($ in millions)

123.9

+ 11.2

- 1.2- 2.0

- 3.3

+ 0.5 129.2

Footnotes: (1) OCF excludes the excess income tax benefit from employee stock-based awards


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) season


• Long-term Compounded Annual Revenue Growth of 20+ Percent

• All Metrics Except Revenue Growth Expressed in Percent of Annual Revenue

*Adjusted for the settlement of litigation

Long TermMetric 2007 2008 2009 2010 1Q11 TargetsRevenue 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%

Long Term Financial Targets


2011 Starting Out Strong…

Near-Term Catalysts Additional MAGPIX distribution,

Investor event (July 25) at AACC

Leveraging Partners to Drive AdoptionStrong 1Q consumable revenue growth (+53%) driven by our top partners

Robust Product PipelineGPP CE Mark (Rec’d), RVP Fast in 2011, NeoPlex4 CE Mark at YE11

Strong Financial Position Record 1Q revenue; +30% Y/Y

Cash on the balance sheet of $129.2M


Corporate Overview

Recent Highlights

Financial Review

Q&A

Agenda

Documents

Luminex Q1 2011 Earnings Call