þ | Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
o | Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
DELAWARE | 74-2747608 | |
(State or other jurisdiction of | (I.R.S. Employer | |
incorporation or organization) | Identification No.) | |
12212 TECHNOLOGY BLVD., AUSTIN, TEXAS | 78727 | |
(Address of principal executive offices) | (Zip Code) |
Title of each class | Name of exchange on which registered | |
Common Stock, $0.001 par value | The NASDAQ Global Market | |
Rights to Purchase Series A Junior Participating Preferred Stock, $0.001 par value | The NASDAQ Global Market |
PAGE | ||||||||
PART I
|
||||||||
Item 1. | 1 | |||||||
Item 1A. | 14 | |||||||
Item 1B. | 25 | |||||||
Item 2. | 25 | |||||||
Item 3. | 25 | |||||||
Item 4. | 25 | |||||||
Executive Officers of the Registrant
|
25 | |||||||
|
||||||||
PART II
|
||||||||
Item 5. | 28 | |||||||
Item 6. | 30 | |||||||
Item 7. | 31 | |||||||
Item 7A. | 41 | |||||||
Item 8. | 42 | |||||||
Item 9. | 64 | |||||||
Item 9A. | 65 | |||||||
Item 9B. | 65 | |||||||
|
||||||||
PART III
|
||||||||
Item 10. | 66 | |||||||
Item 11. | 66 | |||||||
Item 12. | 66 | |||||||
Item 13. | 67 | |||||||
Item 14. | 67 | |||||||
|
||||||||
PART IV
|
||||||||
Item 15. | 68 | |||||||
Signatures and Certifications | S-1 | |||||||
Ex-10.34 John C. Carrano Employment Agreement | ||||||||
Ex-10.35 Jeremy Bridge-Cook Employment Agreement | ||||||||
Ex-10.36 Form of Restricted Stock Unit Agreement | ||||||||
Ex-21.1 Subsidiaries of the Company | ||||||||
Ex-23.1 Ernst & Young LLP Consent | ||||||||
Ex-31.1 Section 302 Certification | ||||||||
Ex-31.2 Section 302 Certification | ||||||||
Ex-32.1 Section 906 Certification | ||||||||
Ex-32.2 Section 906 Certification |
| risks and uncertainties relating to market demand and acceptance of our products and technology, | ||
| dependence on strategic partners for development, commercialization and distribution of products, | ||
| concentration of the Companys revenue in a limited number of strategic partners, | ||
| fluctuations in quarterly results due to a lengthy and unpredictable sales cycle and bulk purchases of consumables, |
| our ability to scale manufacturing operations and manage operating expenses, gross margins and inventory levels, | ||
| potential shortages of components, | ||
| competition, | ||
| the timing of regulatory approvals, | ||
| the implementation, including any modification, of the Companys strategic operating plans, and | ||
| risks and uncertainties associated with implementing our acquisition strategy and the ability to integrate acquired companies, including Tm Bioscience, or selected assets into our consolidated business operations, including the ability to recognize the benefits of our acquisitions. |
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2
3
4
5
6
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measure the attraction, or affinity, between a chemical compound and a disease target for drug discovery and development;
assist physicians in prescribing the appropriate tailored drug therapy based on the patients unique genetic makeup, a
process known as pharmacogenetics;
detect genetic variations, such as single nucleotide polymorphisms; and
measure the presence and quantity of biochemicals in a patients blood, other body fluid or tissue to assist physicians in
diagnosing, treating or monitoring disease conditions.
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KEY TECHNOLOGIES
DESCRIPTION
MARKETS SERVED
High-density arrays of DNA fragments or
proteins attached to a flat glass or silicon
surface
Biomedical research
and select clinical
diagnostics
Automated test tube based instruments
Clinical diagnostics
Physical separation of analytes for
visualization
Clinical
diagnostics and
biomedical research
Quantitative tests which monitor the progress
of polymerase chain reaction (PCR) during
the amplification reaction instead of
post-reaction.
Nucleic acid
testing in clinical
diagnostics and
biomedical
research.
Miniaturized liquid handling system on
a chip
Biomedical research
Plastic trays with discrete wells in which
assays are fixed
Drug discovery,
clinical
diagnostics and
biomedical research
Multi-analyte/multi-format
xMAP technology has been designed to simultaneously perform up to 100
distinct bioassays in a single tube or well of a microtiter plate
using only a small amount of sample. Moreover, unlike most existing
technologies that are dedicated to only one type of bioassay, xMAP can
perform multiple types of assays including enzymatic, genetic and
immunologic tests on the same instrumentation platform.
Flexibility/scalability
xMAP technology allows flexibility in customizing test panels. Panels can be modified to include
new bioassays in the same tube by adding additional microsphere sets. It is also scalable,
meaning that there is no change in the manufacturing process and only minimal changes to the
required labor to produce a small or large number of microsphere-based tests.
Throughput
Our technology is currently able to perform up to 100 tests in a single tube permitting up to
9,600 unattended tests to be detected in less than an hour with only a small amount of sample.
Rapid sample analysis permits efficient use for high-throughput applications.
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Ease of use
Most xMAP bioassays are simple to perform. A test sample is added to a solution containing
microspheres that have been coated with reagents. The solution is then processed through our
xMAP technology system which incorporates proprietary software to automate data acquisition and
analysis in real-time.
Cost effective
We have designed our xMAP technology to be cost effective for customers compared to competitive
techniques such as microarrays or enzyme-linked immunosorbent assay (ELISA). In addition,
microsphere-based bioassays are inexpensive compared to other technologies such as biochips.
Focus on key market segments
The key market segments identified as a result of our strategic studies in 2003 and 2005 were (i)
profile oriented screening and secondary screening, (ii) RNA profiling and transcriptional
screening, (iii) genetic disease and molecular infectious disease testing, and (iv)
immunodiagnostics. In addition to the segments listed above, we have identified two potential
market opportunities in the fields of bio-defense, or bio-threat testing, and agricultural
biology testing. We have dedicated our primary efforts towards these markets and will continue to
employ a partnership driven business model focused on these key segments and selectively pursue
potentially profitable opportunities in other segments.
We will continue to focus our commercialization efforts through strategic partners on large
sectors of the life sciences industry where Luminex believes it has distinct competitive
advantages over existing and emerging technologies and approaches. We define strategic partners
as companies in the life sciences industry that either develop and distribute assays and tests on
xMAP technology or may only distribute our xMAP technology based systems and consumables. With
our partners support, we have targeted major pharmaceutical companies, large clinical
laboratories, research institutions and major medical institutions for our principal marketing
efforts. We believe these customers provide the greatest opportunity for maximizing the use of
xMAP based products and continued adoption by these industry leaders will promote wider market
acceptance of our xMAP technology.
Continue to develop strategic partnerships focused on our key market segments
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Currently, 32 of our approximately 50 strategic partners have released commercialized
reagent-based products utilizing the Luminex platform and are submitting royalties. These 32
strategic partners accounted for approximately 75% of our total revenue in 2006 and all of our
strategic partners represented approximately 89% of our total revenue. We intend to broaden and accelerate market acceptance of xMAP technology
through development, marketing and distribution partnerships with leaders in the life sciences
industry that we believe can either convert core product lines to our technology or develop new
applications on the Luminex platform within their key market segments. By leveraging our
strategic partners market positions and utilizing their distribution channels and marketing
infrastructure, we believe we can continue to expand our installed instrument base.
Develop next generation products
Our research and development group is pursuing projects such as the development of consumables,
automation, software and the expansion and enhancement of our multiplexing capabilities to
advance our xMAP technology and its market acceptance. We are also collaborating with industry
participants, biomedical research institutions and government entities to develop additional xMAP
products.
Focus on content strategy and customer needs
We are focused on maximizing the value we provide our partners and end-user customers by
co-developing content applications with our partners based on our mutual customers needs and
providing assay products directly to end-users in those niche segments where our partners are
either unable or unwilling to provide us access. We believe that by enhancing our partner driven
model with the delivery of value-added assay content, Luminex should be able to gain greater
control over product development, market penetration and commercialization. The LBG has developed
a customer needs analysis, focused on the unmet testing needs of the end-user. Based on this
analysis, the LBG has developed an assay development program guided by the potential value
generated by each target assay. This approach resulted in the commercial launch of the first two
applications from the LBG in 2006.
Opportunistically pursue acquisitions that could accelerate these strategies
We have developed analysis tools and an evaluation template to assess potential acquisition
targets to accelerate our business strategies. This approach led to
our recent acquisition of Tm
Bioscience. We are actively evaluating other opportunities to enhance our capabilities or our
access to markets or technologies, or provide us other advantages in executing our business
strategies in our key markets.
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Consumable development
We continue to develop and enhance our existing consumable product line and support introduction
of new product lines. These new products include calibrators, controls and microspheres with
additional performance characteristics.
Automation
We collaborate with our strategic partners and others to provide automation solutions that will
integrate our various xMAP instruments with sample handling equipment and laboratory information
systems to increase bioassay throughput and operational efficiencies and allow for walk-away
capability.
Software
We are maintaining and extending our system platform through our Software Developer Kit (SDK) as
well as providing new end-user applications. Our SDK provides a straightforward platform for our
strategic partners and their customers to rapidly develop their own user interface software
packages. In addition, our end-user applications will allow us to provide turn key solutions to
partners.
Technical Applications
In order to allow customers to expedite the production of bioassays for use on our systems, we
have a technical applications group, based in Austin, Texas, that includes highly experienced
biological scientists. This group works closely with our customers in their development of
bioassays with the ultimate goal of faster technology adoption and commercialization.
Expanding our multiple testing capabilities
Our current bead utilizes three common chemistries for the immobilization of assays on its
surface. While these chemistries are well accepted in the industry, it is desirable to expand our
bead chemistry capability to enhance market penetration and adoption. We continue to work on
other surface chemistries to provide optimal performance in broader application areas.
Enhancing bioassay performance and operational efficiencies
Our scientists and engineers continually dedicate efforts to further enhance xMAP in the areas of
assay performance, such as sensitivity, precision, reliability and operational efficiencies. We
are actively collecting market and customer requirements that will allow us to provide optimal
features and benefits in current and future products.
New product development
Our research and development team, including the LBG and
Luminex Molecular Diagnostics, and marketing team are
working closely with both internal and external groups to design and develop products that will
expand capabilities of the xMAP-based technologies. We believe that these efforts will result
in unique products in the
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near future. These unique products may include instrumentation,
services, software and consumables including assays.
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we may not be able to accurately estimate the financial effect of acquisitions on our
business;
future acquisitions may require us to assume liabilities, incur large and immediate
write-offs, issue capital stock potentially dilutive to our stockholders or spend
significant cash or may result in a decrease in our future operating income or operating
margins;
we may be unable to realize the anticipated benefits and synergies from acquisitions as
a result of inherent risks and uncertainties, including difficulties integrating acquired
businesses or retaining their key personnel, partners, customers or other key
relationships, entering market segments in which we have no or limited experience, and
risks that acquired entities may not operate profitably or that acquisitions may not result
in improved operating performance; and
acquisitions and subsequent integration of these companies may disrupt our business and
distract our management from other responsibilities.
Other risks of integration include:
disparate information technology, internal control, financial reporting and record-keeping systems;
differences in accounting policies, including those requiring judgment or complex estimation processes;
new partners or customers who may operate on terms and programs different than ours;
additional employees not familiar with our operations;
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facilities or operations in remote locations or potentially foreign jurisdictions and
the inherent risks of operating in unfamiliar legal and regulatory environments; and
new products, including the risk that any underlying intellectual property associated
with such products may not have been adequately protected or that such products may
infringe on the proprietary rights of others.
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convince prospective strategic partners and customers that our technology is an attractive alternative to other
technologies for pharmaceutical, research, clinical and biomedical testing and analysis;
encourage these partners to develop and market products using our technology;
manufacture products in sufficient quantities with acceptable quality and at an acceptable cost;
obtain and maintain sufficient pricing and royalties from partners on such Luminex products; and
place and service sufficient quantities of our products, including the ability to provide the level of service required in
the mainstream clinical diagnostics market segment.
We have no control over the timing or extent of product development,
marketing or sale of our products by our strategic partners.
Most of our strategic partners are not committed to minimum purchase
commitments, and we do not control the incentives provided by our
strategic partners to their sales personnel.
A significant number of our strategic partners intend to produce
clinical diagnostic applications that may need to be approved by the
Food and Drug Administration, or other regulatory bodies in
jurisdictions outside of the United States.
Certain strategic partners may have unique requirements for their
applications and systems. Assisting the various strategic partners
may strain our research and development and manufacturing resources.
To the extent that we are not able to timely assist our strategic
partners, the commercialization of their products will likely be
delayed.
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Certain strategic partners may fail to deliver products that satisfy
market requirements, or such products may fail to perform properly.
We have limited access to partner confidential corporate information.
A sudden unexpected change in ownership, strategy or other material
event could adversely impact partner purchases of our products.
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the possibility that one or more of our suppliers or our assemblers that do not have supply agreements with the Company
could terminate their services at any time without penalty;
the potential obsolescence and/or inability of our suppliers to obtain required components;
the potential delays and expenses of seeking alternate sources of supply or manufacturing services;
the inability to qualify alternate sources without impacting performance claims of our products;
reduced control over pricing, quality and timely delivery due to the difficulties in switching to alternate suppliers or
assemblers; and
increases in prices of raw materials and key components.
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limiting our ability to compete and our flexibility in planning for, or reacting to,
changes in our business and the industry in which we operate;
limiting our ability to borrow additional funds for working capital, capital and
research and development expenditures, acquisitions and general corporate or other
purposes; and
exposing us to interest rate risk since the interest rate on borrowings under our
revolving credit facility will be variable.
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changes in or interpretations of foreign law that may adversely affect our ability
to sell our products, perform services or repatriate profits to the United States;
the imposition of tariffs;
hyperinflation or economic or political instability in foreign countries;
imposition of limitations on or increase of withholding and other taxes on
remittances and other payments by foreign subsidiaries;
conducting business in places where business practices and customs are unfamiliar and unknown;
the imposition of restrictive trade policies, including export restrictions;
worldwide political conditions;
the imposition of inconsistent laws or regulations;
the imposition or increase of investment requirements and other restrictions by
foreign governments;
longer collection cycles for account receivables;
uncertainties relating to foreign laws, including labor laws, and legal proceedings;
currency exchange rate risks;
having to comply with a variety of U.S. laws, including the Foreign Corrupt Practices Act; and
having to comply with U.S. export control regulations and policies that restrict our
ability to communicate with non-U.S. employees and supply foreign
affiliates, partners and
customers.
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actual or anticipated variations in quarterly operating results from historical results or estimates of results prepared by
securities analysts;
announcements of technological innovations or new products or services by us or our competitors;
announcements by us of significant acquisitions, strategic partnerships, joint ventures or capital commitments;
conditions or trends in the life science, biotechnology and pharmaceutical industries;
additions or departures of key personnel;
changes in financial estimates by securities analysts;
general economic conditions and interest rates;
instability in the United States and other financial markets and the ongoing and possible escalation of unrest in the
Middle East, other armed hostilities or further acts or threats of terrorism in the United States or elsewhere;
sales of our common stock; and
the potential adverse impact of the secondary trading of our stock on foreign exchanges which are subject to less
regulatory oversight than the Nasdaq Global Market, without our permission, and the activity of the market makers of our
stock on such exchanges, including the risk that such market makers may engage in naked short sales and/or other deceptive
trading practices which may artificially depress or otherwise affect the price of our common stock on the Nasdaq Global
Market.
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Name
Age
Position
50
President and Chief Executive Officer
43
Vice President, Business Development and Strategic Planning
38
Vice President, Luminex Molecular Diagnostics
48
Vice President, Research and Development
45
Chief Financial Officer, Vice President, Finance and Treasurer
44
Vice President, Marketing and Sales
52
Vice President, Chief Scientific Officer and Chairman of the
Scientific Advisory Board
50
Vice President, Luminex Bioscience Group
55
Vice President, Quality and Regulatory Affairs
40
Vice President, General Counsel and Corporate Secretary
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28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
47
48
49
50
51
52
53
54
55
56
57
58
59
60
61
62
63
64
65
ITEM 5.
MARKET FOR THE REGISTRANTS COMMON EQUITY, RELATED STOCKHOLDER
MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
2006
High
Low
$
15.48
$
11.55
$
18.03
$
12.83
$
20.19
$
14.41
$
20.75
$
11.82
2005
High
Low
$
9.08
$
7.05
$
10.07
$
7.15
$
11.15
$
8.85
$
12.14
$
8.95
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Total Number of
Shares Purchased as
Appromixate Dollar
Value
of
Total Number
Average Price
Part of Publicly
Shares that May Yet Be
of Shares
Paid per
Announced Plans of
Purchased Under the Plans
Period
Purchased
Share ($)(1)
Programs
or Programs ($)
$
58
$
14.17
$
58
$
14.17
(1)
Shares repurchased are attributable to the withholding of shares by Luminex to satisfy the payment of tax
obligations related to the vesting of restricted shares.
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Year Ended December 31,
2006
2005
2004
2003
2002
(In thousands, except per share data)
$
52,989
$
42,313
$
35,880
$
26,292
$
13,008
32,252
22,321
14,722
9,830
2,683
(581)
[1]
(3,496
)
(4,164
)
(6,475
)
(24,117
)
1,507
[1]
(2,666
)
(3,605
)
(4,209
)
(24,934
)
$
1,507
$
(2,666
)
$
(3,605
)
$
(4,209
)
$
(24,934
)
$
0.05
[1]
$
(0.09
)
$
(0.12
)
$
(0.14
)
$
(0.85
)
31,434
30,990
30,698
29,814
29,275
$
0.05
[1]
$
(0.09
)
$
(0.12
)
$
(0.14
)
$
(0.85
)
32,988
30,990
30,698
29,814
29,275
At December 31,
2006
2005
2004
2003
2002
(In thousands)
$
27,414
$
25,206
$
19,238
$
39,480
$
40,482
10,956
10,947
12,891
7,346
5,466
3,991
44,179
39,364
40,823
45,522
45,321
66,696
58,035
53,175
53,294
53,623
54,159
44,710
44,546
44,835
45,571
[1]
As discussed in Note 12 to the consolidated financial statements, effective January 1, 2006, we changed our method of accounting for
stock-based compensation to conform to Statement of Financial Accounting Standard No. 123 (R), Share-Based Payment.
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ITEM 7.
MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
System revenue is generated from the sale of our xMap systems and peripherals.
Currently system revenue is derived from the sale of the Luminex 100 and 200 analyzers
often coupled with an optional XY Platform and/or Sheath Delivery System. We currently expect the average system price to be between
$25,000 and $30,000 in a given reporting period.
Consumable revenue is generated from the sale of our dyed polystyrene microspheres and
sheath fluid. Our larger commercial and development partners often purchase these
consumables in bulk to minimize the number of incoming qualification events and to allow
for longer development and production runs.
Royalty revenue is generated when a partner sells a kit incorporating our proprietary
microspheres to an end user or when a partner utilizes a kit to provide a testing result to
a user. End users can be facilities such as testing labs, development facilities and
research facilities who buy prepared kits and have specific testing needs or testing
service companies that provide assay results to pharmaceutical research companies or
physicians.
Service revenue is generated when a partner or other owner of a system purchases a
service contract from us after the warranty has expired. Service contract revenue is
amortized over the life of the contract and the costs associated with those contracts are
recognized as incurred.
Other revenue consists of items such as training, shipping, parts sales, license revenue, grant revenue
and other items that individually amount to less than 5% of total revenue. Currently
revenue generated from the Luminex Bioscience Group (LBG) is recorded in other revenue.
The LBG develops assays for either direct sale in markets in which we have no partners with
commercial rights or for distribution in our partner product pipeline.
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Luminex grew total revenue by approximately 25% over 2005 revenue of $42.3 million
Net profit of approximately $1.5 million representing our first profitable year
Gross margin percentage of 61%, up from 53% for 2005
Increase in R&D investment of approximately 55%
Launch of first LBG products: a pneumococccal assay and a miRNA assay
Announcement of the TM Bioscience acquisition
Cumulative system sales to date of over 4,100 systems, worldwide
Secured two government grants to help fund core research and development
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Year Ended December 31,
2006
2005
2004
100
%
100
%
100
%
39
%
47
%
59
%
61
%
53
%
41
%
16
%
13
%
11
%
46
%
48
%
42
%
62
%
61
%
53
%
(1
)%
(8
)%
(12
)%
4
%
3
%
2
%
(1
)%
3
%
(6
)%
(10
)%
Year Ended December 31,
2006
2005
Variance ($)
Variance (%)
(in thousands)
$
52,989
$
42,313
$
10,676
25
%
$
32,252
$
22,321
$
9,931
44
%
61
%
53
%
8
%
N/A
$
32,833
$
25,817
$
7,016
27
%
$
1,507
$
(2,666
)
$
4,173
157
%
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Year Ended December 31,
2006
2005
$
20,644
$
18,812
15,676
13,084
8,228
5,255
3,450
2,444
4,991
2,718
$
52,989
$
42,313
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Year Ended December 31,
Variance
Variance
2005
2004
($)
(%)
(in thousands)
$
42,313
$
35,880
$
6,433
18
%
$
22,321
$
14,722
$
7,599
52
%
53
%
41
%
12
%
N/A
$
25,817
$
18,886
$
6,931
37
%
$
(2,666
)
$
(3,605
)
$
939
26
%
Year Ended December 31,
2005
2004
$
18,812
$
18,956
13,084
9,002
5,255
3,210
2,444
1,565
2,718
3,147
$
42,313
$
35,880
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Payment Due By Period
Less Than
More Than
Contractual Obligations
Total
1 Year
1-3 Years
3-5 Years
5 Years
$
4,129
$
1,241
$
2,520
$
368
$
3,347
2,747
600
$
7,476
$
3,988
$
3,120
$
368
$
(1)
Purchase obligations include contractual arrangements in the form of purchase
orders primarily a result of normal inventory purchases or minimum payments due resulting when
minimum purchase commitments are not met. Purchase obligations relating to purchase orders do
not extend beyond a year; however, we would expect future years to have these purchase
commitments that will arise in the ordinary course of business and will generally increase or
decrease according to fluctuations in overall sales volume.
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PAGE
43
44
45
46
47
48
49
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Austin, Texas
March 6, 2007
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Austin, Texas
March 6, 2007
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December 31,
2006
2005
$
27,414
$
25,206
10,956
10,947
8,237
6,580
4,571
4,281
1,917
1,170
53,095
48,184
4,985
3,222
7,346
5,466
1,270
1,163
$
66,696
$
58,035
$
3,255
$
3,412
2,905
2,970
2,756
2,438
8,916
8,820
3,621
4,505
12,537
13,325
32
32
139,116
135,440
(4,219
)
65
18
(85,054
)
(86,561
)
54,159
44,710
$
66,696
$
58,035
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Year Ended December 31,
2006
2005
2004
$
52,989
$
42,313
$
35,880
20,737
19,992
21,158
32,252
22,321
14,722
8,673
5,600
3,802
24,160
20,217
15,084
32,833
25,817
18,886
(581
)
(3,496
)
(4,164
)
2,108
1,174
572
(322
)
1,527
(2,644
)
(3,592
)
(20
)
(22
)
(13
)
$
1,507
$
(2,666
)
$
(3,605
)
$
0.05
$
(0.09
)
$
(0.12
)
31,434
30,990
30,698
$
0.05
$
(0.09
)
$
(0.12
)
32,988
30,990
30,698
Table of Contents
Table of Contents
Accumulated
Common Stock
Additional
Other
Deferred
Total
Number of
Paid-In
Comprehensive
Stock
Accumulated
Stockholders
Shares
Amount
Capital
Income/(Loss)
Compensation
Deficit
Equity
30,301,057
$
30
$
125,169
$
(74
)
$
$
(80,290
)
$
44,835
556,100
1
2,494
2,495
544
(312
)
232
312,535
3,626
(3,640
)
(14
)
617
617
(3,605
)
(3,605
)
(14
)
(14
)
31,169,692
31
131,833
(88
)
(3,335
)
(83,895
)
44,546
204,837
1
1,179
1,180
(325
)
312
(13
)
307,428
2,967
(2,967
)
1,606
1,606
(26,274
)
(214
)
165
(49
)
(2,666
)
(2,666
)
106
106
31,655,683
32
135,440
18
(4,219
)
(86,561
)
44,710
422,499
2,622
2,622
144,539
(242
)
(242
)
(544,113
)
(4,220
)
4,219
(1
)
5,516
5,516
1,507
1,507
47
47
31,678,608
$
32
$
139,116
$
65
$
$
(85,054
)
$
54,159
Table of Contents
Table of Contents
Table of Contents
Table of Contents
December 31,
2006
2005
Accrued
Amortized
Accrued
Amortized
Cost
Interest
Cost
Cost
Interest
Cost
$
10,956
$
183
$
11,139
$
10,947
$
93
$
11,040
7,346
84
7,430
5,466
23
5,489
$
18,302
$
267
$
18,569
$
16,413
$
116
$
16,529
2006
2005
$
8,538
$
6,946
(301
)
(366
)
$
8,237
$
6,580
$
340
(34
)
(28
)
278
90
(2
)
366
(52
)
(13
)
$
301
Table of Contents
2006
2005
$
3,504
$
4,011
555
526
932
205
4,991
4,742
(420
)
(461
)
$
4,571
$
4,281
2006
2005
$
4,502
$
3,954
3,284
2,102
1,477
1,237
2,738
1,901
574
438
12,575
9,632
(7,590
)
(6,410
)
$
4,985
$
3,222
2006
2005
$
856
$
689
531
560
1,387
1,249
(117
)
(86
)
$
1,270
$
1,163
Table of Contents
$
475
(974
)
1,003
504
(785
)
632
351
(635
)
595
$
311
2006
2005
2004
$
$
$
40
22
13
(20
)
20
22
13
$
20
$
22
$
13
Table of Contents
2006
2005
2004
$
775
$
645
$
1,117
775
645
1,117
(628
)
(425
)
(892
)
147
220
225
34,155
35,018
35,031
2,342
2,562
1,568
348
279
197
1,637
1,637
1,637
615
39,097
39,496
38,433
(39,069
)
(39,496
)
(38,433
)
28
(147
)
(220
)
(225
)
(147
)
(220
)
(225
)
$
$
$
$
28
$
$
Year Ended December 31,
2006
2005
2004
(34.0
)%
(34.0
)%
(34.0
)%
2.7
%
(3.0
)%
(2.7
)%
(3.3
)%
1.4
%
0.8
%
(0.5
)%
0.0
%
0.0
%
22.0
%
0.0
%
0.0
%
11.7
%
36.4
%
36.3
%
-1.4
%
0.8
%
0.4
%
Table of Contents
Year Ended December 31,
2006
2005
2004
$
1,507
$
(2,666
)
$
(3,605
)
31,434
30,990
30,698
1,554
32,988
30,990
30,698
$
0.05
$
(0.09
)
$
(0.12
)
$
0.05
$
(0.09
)
$
(0.12
)
Table of Contents
Table of Contents
2006
2005
2004
0.0
%
0.0
%
0.0
%
0.6
0.6
0.7
5.0
%
5.0
%
5.0
%
6 yrs.
7 yrs.
7 yrs.
N/A
[1]
$
4.68
$
6.89
[1]
No stock options were issued to employees during this period.
Table of Contents
Weighted
Weighted
Average
Aggregate
Average
Remaining
Intrinsic
Shares
Exercise
Contractual
Value
Stock Options
(in thousands)
Price
Life
(in thousands)
3,758
[1]
$
9.85
(423
)
6.22
(172
)
20.39
3,163
$
9.76
6.05
$
13,608
3,159
$
9.76
0.09
13,591
2,592
$
10.29
5.87
$
10,547
[1]
This balance has been adjusted to include options that were granted in the
prior year, but previously reflected as available for future issuance.
Weighted Average
Shares
Exercise Price
4,142
$
10.10
1,061
$
8.15
(557
)
$
4.49
(580
)
$
14.92
4,066
$
9.76
53
[1]
$
7.48
(205
)
$
5.76
(156
)
$
12.32
3,758
$
9.76
[1]
This number has been adjusted to include options that were granted in
the period, but previously reflected as available for future issuance.
Weighted-
Average
Shares
Grant-Date
Restricted Stock Awards
(in thousands)
Fair Value
544
$
9.04
426
15.74
(160
)
9.64
(12
)
11.41
798
$
12.46
Table of Contents
Year Ended December 31,
2006
2005
2004
$
318
$
81
$
45
594
116
56
4,599
1,478
748
$
5,511
$
1,675
$
849
Year Ended December 31,
2005
2004
$
(2,666
)
$
(3,605
)
1,575
675
(4,834
)
(5,307
)
$
(5,925
)
$
(8,237
)
$
(0.09
)
$
(0.12
)
$
(0.19
)
$
(0.27
)
Table of Contents
Options
Shares Available
Total Shares
Outstanding
for Future Issuance
Reserved
20,400
20,400
1,907,054
1,907,054
735,912
735,912
1,726,499
1,726,499
500,000
500,000
500,000
500,000
3,163,366
2,226,499
5,389,865
*
Balthrop Option
$
1,241
1,247
1,273
368
$
4,129
Table of Contents
Table of Contents
2006
2005
2004
$
40,823
$
32,844
$
26,965
5,760
5,310
5,710
2,870
1,123
932
3,536
3,036
2,273
$
52,989
$
42,313
$
35,880
Table of Contents
Quarter Ended
March 31,
June 30,
September 30,
December 31,
2006
2006
2006
2006
$
12,997
$
13,268
$
12,514
$
14,210
8,260
7,660
7,782
8,550
113
(267
)
(435
)
7
526
271
111
599
0.02
0.01
0.00
0.02
0.02
0.01
0.00
0.02
Quarter Ended
March 31,
June 30,
September 30,
December 31,
2005
2005
2005
2005
$
9,320
$
10,652
$
10,764
$
11,577
4,842
6,358
5,470
5,651
(514
)
(280
)
(991
)
(1,711
)
(298
)
(363
)
(657
)
(1,348
)
(0.01
)
(0.01
)
(0.02
)
(0.04
)
Table of Contents
Table of Contents
66
67
Number of Securities Remaining
Available for Future Issuance
Number of Securities to
Weighted-Average
Under Equity Compensation Plans
be Issued Upon Exercise
Exercise Price of
(Excluding Securities Reflected
Plan Category
of Outstanding Options
Outstanding Options
in Column (A))
(A)
(B)
(C)
1,927,454
$
10.00
2,226,499
`
1,235,912
$
9.39
3,163,366
2,226,499
(1)
In February 2001, our Board of Directors approved the 2001 Broad-Based Stock Option Plan
(the 2001 Plan), a non-stockholder approved plan, for grants of stock options to employees who
are not directors or officers of the Company. Options may be granted to such employees at not less
than 100% of the fair market value of the common stock on the date of grant. The options become
exercisable in whole or in such installments as determined by the Board of Directors and generally
expire 10 years after the grant date. Since approval of the Equity Incentive
Plan in May 2006, no securities are available for future issuances under this plan. For
additional information regarding the Companys 2001 Plan see Note 12 to the Consolidated Financial
Statements.
(2)
Includes an option to purchase 500,000 shares of the Companys common stock issued to
Patrick J. Balthrop, Sr. on May 15, 2004, in connection with his hiring and outside of any
stockholder approved equity incentive plan. The terms of this option, together with the amendment
to the related option agreement, are more fully described in Note 12 to the Consolidated Financial
Statements.
Table of Contents
Table of Contents
68
69
70
71
EXHIBIT
NUMBER
DESCRIPTION OF DOCUMENT
Asset Purchase Agreement, effective as of September 5, 2002, by and among
Rules-Based Medicine, Inc., Luminex Corporation and RBM Acquisition, Inc.
(Pursuant to Item 601(b)(2) of Regulation S-K, the schedules to this
agreement are omitted, but will be provided supplementally to the
Commission upon request) (Previously filed as an Exhibit to the Companys
Current Report on Form 8-K dated September 10, 2002).
Merger Agreement, dated December 14, 2006, by and between the Company and
Tm Bioscience Corporation (Previously filed as an Exhibit to the Companys
Current Report on Form 8-K dated December 15, 2006)
Restated Certificate of Incorporation of the Company (Previously filed as
an Exhibit to the Companys Registration Statement on Form S-1 (File No.
333-96317), filed February 7, 2000, as amended).
Amended and Restated Bylaws of the Company (Previously filed as an Exhibit
to the Companys Registration Statement on Form S-1 (File No. 333-96317),
filed February 7, 2000, as amended).
Rights Agreement dated as of June 20, 2001 between Luminex Corporation and
Mellon Investor Services, LLC, as Rights Agent which includes as Exhibit A
the form of Certificate of Designations of Series A Junior Participating
Preferred Stock setting forth the terms of the Series A Junior
Participating Preferred Stock, as Exhibit B the form of Rights Certificate
and as Exhibit C the Summary of Rights (Previously filed as Exhibit 4 to
the Companys Current Report on Form 8-K dated June 21, 2001).
1996 Stock Option Plan of the Company, as amended (Previously filed as an
Exhibit to the Companys Registration Statement on Form S-1 (File No.
333-96317), filed February 7, 2000, as amended).
Form of Stock Option Agreement for the 1996 Stock Option Plan (Previously
filed as an Exhibit to the Companys Registration Statement on Form S-1
(File No. 333-96317), filed February 7, 2000, as
amended).
Form of Incentive Stock Option Agreement for the 1996 Stock Option Plan
(Previously filed as an Exhibit to the Companys Registration Statement on
Form S-1 (File No. 333-96317), filed February 7, 2000, as amended).
2000 Long-Term Incentive Plan of the Company, as amended (Previously filed
as an Exhibit to the Companys Quarterly Report on Form 10-Q for the
quarterly period ended March 31, 2002).
Table of Contents
EXHIBIT
NUMBER
DESCRIPTION OF DOCUMENT
Form of Stock Option Award Agreement for the 2000 Long-Term Incentive Plan
(Previously filed as an Exhibit to the Companys Registration Statement on
Form S-1 (File No. 333-96317), filed February 7, 2000, as amended).
2001 Broad-Based Stock Option Plan of the Company (Previously filed as an
Exhibit to the Companys Annual Report on Form 10-K for the fiscal year
ended December 30, 2001).
Form of Option Grant Certificate for the 2001 Broad-Based Stock Option
Plan (Previously filed as an Exhibit to the Companys Annual Report on
Form 10-K for the fiscal year ended December 30, 2001).
Development and Supply Agreement dated as of March 19, 1999 by and between
the Company and Bio-Rad Laboratories, Inc. (Previously filed as an Exhibit
to the Companys Registration Statement on Form S-1 (File No. 333-96317),
filed February 7, 2000, as amended).
Amendment to Development and Supply Agreement dated as of January 13, 2000
by and between the Company and Bio-Rad Laboratories, Inc. (Previously
filed as an Exhibit to the Companys Registration Statement on Form S-1
(File No. 333-96317), filed February 7, 2000, as amended).
Second Amendment to Development and Supply Agreement dated as of June 12,
2000 by and between the Company and Bio-Rad Laboratories, Inc. (Previously
filed as an Exhibit to the Companys Annual Report on Form 10-K for the
fiscal year ended December 31, 2000).
Distribution, Development and Supply Agreement dated as of August 6, 2001
by and between the Company and Miraibio, Inc (Previously filed as an
Exhibit to the Companys Annual Report on Form 10-K for the fiscal year
ended December 30, 2001).
Agreement for Electronic Manufacturing Services dated as of January 1,
2000 by and between the Company and Sanmina Corporation (Previously filed
as an Exhibit to the Companys Registration Statement on Form S-1 (File
No. 333-96317), filed February 7, 2000, as amended).
Form of Amended and Restated Employment Agreement between the Company and
each of Randel S. Marfin, James W. Jacobson, Ph.D. and Oliver H. Meek
(Previously filed as an Exhibit to the Companys Quarterly Report on Form
10-Q for the period ended June 30, 2002).
Form of Indemnification Agreement dated May 22, 2002 between the Company
and each of the directors and officers of the Company (Previously filed as
an Exhibit to the Companys Quarterly Report on Form 10-Q for the period
ended June 30, 2002).
Lease Agreement between Aetna Life Insurance Company, as Landlord, and
Luminex Corporation, as Tenant, dated October 19, 2001 (Previously filed
as an Exhibit to the Companys Form 10-Q for the quarterly period ended
September 30, 2001).
First Amendment to Lease Agreement between Aetna Life Insurance Company,
as Landlord, and Luminex Corporation as Tenant, dated July 25, 2002.
(Previously filed as an Exhibit to the Companys Quarterly Report on Form
10-Q for the period ended June 30, 2002).
Lease Amendment between McNeil 4 & 5 Investors, LP, as Landlord, and
Luminex Corporation, as Tenant, dated January 27, 2003 (Previously filed
as an Exhibit to the Companys Annual Report on Form 10-K for the fiscal
year ended December 31, 2002).
Sublease Agreement dated as of May 2, 2002 by and between the Company and
American Innovations, Ltd., for facilities situated at 12112 Technology
Boulevard, Austin, Texas 78727 (Previously filed as an Exhibit to the
Companys Quarterly Report on Form 10-Q for the period ended June 30,
2002).
Employment Agreement, effective as of October 1, 2003, by and between
Luminex Corporation and Harriss T. Currie (Previously filed as an Exhibit
to the Companys Annual Report on form 10-K for the fiscal year ended
December 31, 2003).
Employment Agreement effective as of October 1, 2003, by and between
Luminex Corporation and David S. Reiter (Previously filed as an Exhibit to
the Companys Annual Report on form 10-K for the fiscal year ended
December 31, 2003).
Table of Contents
EXHIBIT
NUMBER
DESCRIPTION OF DOCUMENT
Employment Agreement effective as of May 15, 2004, by and between Luminex
Corporation and Patrick J. Balthrop (Previously filed as an Exhibit to the
Companys Current Report on Form 8-K dated May 17, 2004).
Employment Agreement effective as of October 25, 2004, by and between
Luminex Corporation and Gregory J. Gosch (Previously filed as an Exhibit
to the Companys Current Report on Form 8-K dated October 22, 2004).
Employment Agreement effective as of May 23, 2005, by and between Luminex
Corporation and Russell W. Bradley (Previously filed as an Exhibit to the
Company s Current Report on Form 8-K dated May 23, 2005)
Form of Restricted Stock Agreement for the 2000 Long-Term Incentive Plan
and 2001 Broad-Based Stock Option Plan (Previously filed as an Exhibit to
the Companys Quarterly Report on Form 10-Q for the quarterly period ended
September 30, 2004).
Form of Non-Qualified Stock Option Agreement dated as of May 15, 2004, by
and between Luminex Corporation and Patrick J. Balthrop (Previously filed
as an Exhibit to the Companys Current Report on Form 8-K dated May 17,
2004).
2006 Executive Officer Compensation Summary (Previously filed as an
Exhibit to the Companys Quarterly Report on Form 10-Q for the quarterly
period ended June 30, 2006).
Form of Amendment to Executive Employment Agreements (Previously filed as
an Exhibit to the Companys Annual Report on Form 10-K for the fiscal
year ended December 31, 2006).
Luminex Corporation 2006 Equity Incentive Plan (Previously filed as
Exhibit A to the Companys Proxy Statement for its Annual Meeting of
Shareholders held on May 25, 2006)
Form of Non-Qualified Stock Option Agreement for the 2006 Equity Incentive
Plan (Previously filed as an Exhibit to the Companys Current Report on
Form 8-K dated May 25, 2006)
Form of Restricted Share Award Agreement for Officers & Employees for the
2006 Equity Incentive Plan (Previously filed as an Exhibit to the
Companys Current Report on Form 8-K dated May 25, 2006)
Form of Restricted Share Award Agreement for Directors for the 2006 Equity
Incentive Plan (Previously filed as an Exhibit to the Companys Current
Report on Form 8-K dated May 25, 2006)
Luminex Corporation 2006 Management Stock Purchase Plan (Previously filed
as Exhibit B to the Companys Proxy Statement for its Annual Meeting of
Shareholders held on May 25, 2006)
Credit Agreement, dated March 1, 2007, by and between the Luminex
Corporation and JPMorgan Chase Bank, N.A. (Previously filed as an Exhibit
to the Companys Current Report on Form 8-K dated March 1, 2007)
Employment Agreement effective as of February 7, 2007, by and between
Luminex Corporation and John C. Carrano.
Employment Agreement effective as of March 1, 2007, by and between Luminex
Corporation, Tm Bioscience Corporation and Jeremy Bridge-Cook.
Form of Restricted Stock Unit Agreement for the 2006 Equity Incentive Plan.
Subsidiaries of the Company.
Consent of Independent Registered Public Accounting Firm.
Table of Contents
EXHIBIT
NUMBER
DESCRIPTION OF DOCUMENT
Power of Attorney (incorporated in the signature page of this report).
Certification by CEO pursuant to Securities and Exchange Act Rules
13a-14(a) and 15d 14(a), as adopted pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.
Certification by CFO pursuant to Securities and Exchange Act Rules
13a-14(a) and 15d 14(a), as adopted pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.
Certification by CEO pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
Certification by CFO pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
#
Management contract or compensatory plan or arrangement.
+
Confidential treatment requested for certain portions of this Exhibit pursuant to Rule
406 promulgated under the Securities Act and Rule 24b-2 promulgated under the Securities
Exchange Act, which portions are omitted and filed separately with the Securities and Exchange
Commission.
(c)
See Exhibits listed under Item 15(a)(3).
Table of Contents
S-1
LUMINEX CORPORATION
By:
/s/ Patrick J. Balthrop
Patrick J. Balthrop
President and Chief Executive Officer
SIGNATURES
TITLE
DATE
President and Chief Executive Officer,
Director (Principal Executive Officer)
March 16, 2007
Chief Financial Officer, VP Finance
and Treasurer (Principal Financial Officer)
March 16, 2007
Controller
(Principal Accounting Officer)
March 16, 2007
Director
March 16, 2007
Director
March 16, 2007
Director
March 16, 2007
Director
March 16, 2007
Director
March 16, 2007
Table of Contents
SIGNATURES
TITLE
DATE
Chairman of the Board of Directors,
Director
March 16, 2007
Director
March 16, 2007
Director
March 16, 2007
Director
March 16, 2007
- 2 -
- 3 -
- 4 -
- 5 -
- 6 -
- 7 -
- 8 -
- 9 -
- 10 -
- 11 -
- 12 -
|
If to Luminex: | Luminex Corporation | ||
|
Attn: General Counsel | |||
|
12212 Technology Blvd. | |||
|
Austin, Texas 78727 | |||
|
Fax: (512) 219-6325 | |||
|
||||
|
If to Executive: | John C. Carrano | ||
|
300 Wallis Dr. | |||
|
Austin, TX 78746 |
- 13 -
- 14 -
LUMINEX CORPORATION | ||||||
|
||||||
|
By: | /s/ Patrick J. Balthrop | ||||
|
|
|||||
|
||||||
EXECUTIVE | ||||||
|
||||||
/s/ John C. Carrano | ||||||
John C. Carrano, Individually |
- 15 -
- 2 -
- 3 -
- 4 -
- 5 -
- 6 -
- 7 -
- 8 -
- 9 -
- 10 -
- 11 -
- 12 -
- 13 -
|
If to Luminex or Tm: | Luminex Corporation | ||||
|
Attn: General Counsel | |||||
|
12212 Technology Blvd. | |||||
|
Austin, Texas 78727 | |||||
|
Fax: (512) 219-6325 | |||||
|
||||||
|
If to Executive: | Jeremy Bridge-Cook | ||||
|
150 Browning Ave. | |||||
|
Toronto, ON, Canada | |||||
|
M4K 1W5 |
- 14 -
(a) | the Executive has had sufficient time to review this Agreement thoroughly; | ||
(b) | the Executive has read and understands the terms of this Agreement and the obligations hereunder; | ||
(c) | the Executive has been given an opportunity to obtain independent legal advice concerning the interpretation and effect of this agreement; and, |
- 15 -
(d) | the Executive has received a fully executed counterpart copy of this Agreement. |
- 16 -
LUMINEX CORPORATION | ||||||||
|
||||||||
|
By: |
/s/ Patrick J. Balthrop
|
||||||
|
||||||||
Tm BIOSCIENCE CORPORATION | ||||||||
|
||||||||
|
By: |
/s/ Richard Janeczko
|
||||||
|
||||||||
EXECUTIVE | ||||||||
|
||||||||
/s/ Donna Ford | /s/ Jeremy Bridge-Cook | |||||||
WITNESS | JEREMY BRIDGE-COOK |
2
To the Company:
|
Luminex Corporation | |
|
12212 Technology Blvd. | |
|
Austin, TX 78727 | |
|
Attn: Corporate Secretary | |
|
||
To the Grantee:
|
The address then maintained with respect to the Grantee in the Companys records. |
3
LUMINEX CORPORATION
|
||||
By: | ||||
GRANTEE:
|
||||
Please Print | ||||
GRANTEE:
|
||||
Signature | ||||
4
/s/ Ernst & Young LLP | ||||
By: | /s/ Patrick J. Balthrop | |||
Patrick J. Balthrop | ||||
President and Chief Executive Officer |
By: | /s/ Harriss T. Currie | |||
Harriss T. Currie | ||||
Vice President - Finance Chief Financial Officer Treasurer |
/s/ PATRICK J. BALTHROP
President and Chief Executive Officer March 16, 2007 |
/s/ HARRISS T. CURRIE
Vice President Finance Chief Financial Officer Treasurer March 16, 2007 |