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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 WASHINGTON, D.C. 20549
 FORM 10-K
 þ
    
    Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act
of 1934
 for the fiscal year ended December 31, 2006
 or
 o
    
    Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
 for the transition period from  to .
 Commission File No. 000-30109
 LUMINEX CORPORATION
  DELAWARE
    
    74-2747608(State or other jurisdiction of
    
    (I.R.S. Employerincorporation or organization)
    
    Identification No.)12212 TECHNOLOGY BLVD., AUSTIN, TEXAS
    
    78727(Address of principal executive offices)
    
    (Zip Code)
 (512) 219-8020
 
 Title of each class
    
    Name of exchange on which registeredCommon Stock, $0.001 par value
    
    The NASDAQ Global MarketRights to Purchase Series A Junior Participating Preferred Stock, $0.001 par value
    
    The NASDAQ Global Market
 NONE
 o þ
 o þ
 þ o
 þ
  o þ o
 o þ
   DOCUMENTS INCORPORATED BY REFERENCE




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##### 



LUMINEX CORPORATION
 FORM 10-K
FOR THE YEAR ENDED DECEMBER 31, 2006
 TABLE OF CONTENTS
 PAGEPART IItem 1.
    
    Business
    
    
    1Item 1A.
    
    Risk Factors
    
    
    14Item 1B.
    
    Unresolved Staff Comments
    
    
    25Item 2.
    
    Properties
    
    
    25Item 3.
    
    Legal Proceedings
    
    
    25Item 4.
    
    Submission of Matters to a Vote of Security Holders
    
    
    25Executive Officers of the Registrant
    
    
    25PART IIItem 5.
    
    Market for the Registrants Common Equity, Related Stockholder Matters and Issuer
Purchases of Equity Securities
    
    
    28Item 6.
    
    Selected Financial Data
    
    
    30Item 7.
    
    Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    31Item 7A.
    
    Quantitative and Qualitative Disclosures about Market Risk
    
    
    41Item 8.
    
    Financial Statements and Supplementary Data
    
    
    42Item 9.
    
    Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
    
    
    64Item 9A.
    
    Controls and Procedures
    
    
    65Item 9B.
    
    Other Information
    
    
    65PART IIIItem 10.
    
    Directors, Executive Officers and Corporate Governance
    
    
    66Item 11.
    
    Executive Compensation
    
    
    66Item 12.
    
    Security Ownership of Certain Beneficial Owners and Management and
Related Stockholder Matters
    
    
    66Item 13.
    
    Certain Relationships and Related Transactions, and Director Independence
    
    
    67Item 14.
    
    Principle Accountant Fees and Services
    
    
    67PART IVItem 15.
    
    Exhibits and Financial Statement Schedules
    
    
    68Signatures and Certifications
    
    
    S-1Ex-10.34 John C. Carrano Employment AgreementEx-10.35 Jeremy Bridge-Cook Employment AgreementEx-10.36 Form of Restricted Stock Unit AgreementEx-21.1 Subsidiaries of the CompanyEx-23.1 Ernst & Young LLP ConsentEx-31.1 Section 302 CertificationEx-31.2 Section 302 CertificationEx-32.1 Section 906 CertificationEx-32.2 Section 906 Certification
  Safe Harbor Cautionary Statement
  
    
    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 Companys 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,




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
    
    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 Companys 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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PART I
 
 ITEM 1. BUSINESS
 Overview
     1




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www.luminexcorp.com http://www.sec.gov
 Industry Background
  
    
    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 patients 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 patients blood, other body fluid or tissue to assist physicians in
diagnosing, treating or monitoring disease conditions.
   2




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KEY TECHNOLOGIES
    
    DESCRIPTION
    
    MARKETS SERVEDBioChips/Microarrays
    
    High-density arrays of DNA fragments or
proteins attached to a flat glass or silicon
surface
    
    Biomedical research
and select clinical
diagnosticsImmunoassays
    
    Automated test tube based instruments
    
    Clinical diagnosticsGels and blots
    
    Physical separation of analytes for
visualization
    
    Clinical
diagnostics and
biomedical researchReal-time PCR
    
    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.Microfluidics chips
    
    Miniaturized liquid handling system on
a chip
    
    Biomedical researchMicrotiter-plate based assays
    
    Plastic trays with discrete wells in which
assays are fixed
    
    Drug discovery,
clinical
diagnostics and
biomedical research
 Our xMAP Technology
  
    
    Multi-analyte/multi-formatxMAP 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/scalabilityxMAP 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.
    
    ThroughputOur 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.
 3




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
    
    Ease of useMost 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 effectiveWe 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.
   Business Strategy
  
    
    Focus on key market segmentsThe 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
 4




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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 productsOur 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 needsWe 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 strategiesWe 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.
 Products
 Instruments
 Luminex®
100 and Luminex® 200.
 Luminex® XYP (XY
Platform) Luminex® SD (Luminex Sheath Delivery System)
 Luminex HTS TM (High-Throughput System)
 5




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Consumables
 Microspheres.
 MagPlex Microspheres.
 FlexMAP microspheres.
 SeroMAP microspheres.
 Calibration and Control microspheres.
  Kits
  FlexmiR MicroRNA Labeling Kit.
 FlexmiR MicroRNA Human Panel.
 Pneumococcal Assay.
 6




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Tag-It
Ashkenazi Jewish Panel.
 Tag-It
Cystic Fibrosis Kit.
 Tag-It
CFTR 70+6 Mutation Detection Kit
 Tag-It
Mutation Detection Products for Coagulation.
 Tag-It
Mutation Detection Kit for P450-2C19
 Tag-It
Mutation Detection Kit for P450-2C9
 Tag-It
Mutation Detection Kit for P450-2D6
 Software
 LXR.
 xPONENT TM .
 Marketing/Sales and Business Development
  7




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Customers
  Technical Operations
  Technical Support
  Training
  Field Service
  8




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Research and Development
  
    
    Consumable developmentWe 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.
    
    AutomationWe 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.
    
    SoftwareWe 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 ApplicationsIn 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 capabilitiesOur 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 efficienciesOur 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 developmentOur 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
 9




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near future. These unique products may include instrumentation,
services, software and consumables including assays. Manufacturing
     Instruments
  Microspheres
  Kits
  10




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Competition
     Intellectual Property
    11




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Government Regulation
 Food and Drug Administration
     12




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WEEE
  European IVD Directive
    13




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Environmental
  Employees
  
 ITEM 1A. RISK FACTORS
 We have a limited history of profitability and an accumulated deficit of approximately $85.1
million as of December 31, 2006.
  14




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We expect our operating results to continue to fluctuate from quarter to quarter
    We may be unsuccessful in implementing our acquisition strategy. We may face difficulties
integrating acquired entities with our existing businesses.
   
    
    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;
 15




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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.
  Our success depends largely on the establishment and maintenance of successful relationships with
our strategic partners. Currently, a limited number of strategic partners constitute a majority of
our revenue and the loss of any one of these partners could have a material adverse effect on the
Company.
     16




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If our technology and products do not become widely used in the life sciences industry, it is
unlikely that we can maintain or increase profitability.
  
    
    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.
  Our reliance on strategic partners to market our products makes forecasting difficult .
   
    
    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.
 17




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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.
 The life sciences industry is highly competitive and subject to rapid technological change, and we
may not have the resources necessary to compete successfully .
   Our success depends on our ability to service and support our products directly or in collaboration
with our strategic partners.
  The intellectual property rights we rely upon to protect the technology underlying our products may
not be adequate to maintain market exclusivity. Inadequate intellectual property protection could
enable third parties to exploit our technology or use very similar technology and could reduce our
ability to distinguish our products in the market.
   18




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Our success will depend partly on our ability to operate without infringing on or misappropriating
the proprietary rights of others.
   We have only produced our products in limited quantities, and we may experience problems in scaling
our manufacturing operations or delays or component shortages that could limit the growth of our
revenue.
  19




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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.
  The capital spending policies of our customers has a significant effect on the demand for our
products.
  If we fail to comply with government regulations that affect our business, we could be subject to
enforcement actions, injunctions and civil and criminal penalties that could delay or prevent
marketing of our products.
  20




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If we become subject to product liability claims, we may be required to pay damages that exceed our
insurance coverage.
  21




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##### Table of Contents



If third-party payors increasingly restrict payments for healthcare expenses or fail to adequately
pay for multi-analyte testing, we may experience reduced sales which would hurt our business and
our business prospects.
  We may in the future incur substantial debt obligations pursuant to our new credit facility that
could restrict our operations.
  
    
    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.
   We rely on the innovation and resources of larger industry participants and public programs to
advance genomic research and educate physicians/clinicians on genetic diagnostics.
  22




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We are subject to evolving legislative, judicial and ethical standards on use of technology and
biotechnology.
  Our operating results may be affected by current economic and political conditions.
  International business operations create additional operational and legal risk.
  
    
    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.
 Our success will depend on our ability to attract and retain our management and staff.
  23




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Our stock price has been and is likely to continue to be volatile.
  
    
    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.
  Anti-takeover provisions in our certificate of incorporation, bylaws and stockholder rights plan
and Delaware law could make a third party acquisition of us difficult.
  24




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ITEM 1B. UNRESOLVED STAFF COMMENTS
  
 ITEM 2. PROPERTIES
  
 ITEM 3. LEGAL PROCEEDINGS
   
 ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
  Executive Officers of the Registrant as of March 1, 2007
 Name
    
    Age
    
    PositionPatrick J. Balthrop
    
    
    50
    
    
    President and Chief Executive OfficerRussell W. Bradley
    
    
    43
    
    
    Vice President, Business Development and Strategic PlanningJeremy Bridge-Cook, Ph.D
    
    
    38
    
    
    Vice President, Luminex Molecular DiagnosticsJohn C. Carrano, Ph.D
    
    
    48
    
    
    Vice President, Research and DevelopmentHarriss T. Currie
    
    
    45
    
    
    Chief Financial Officer, Vice President, Finance and TreasurerGregory J. Gosch
    
    
    44
    
    
    Vice President, Marketing and SalesJames W. Jacobson, Ph.D.
    
    
    52
    
    
    Vice President, Chief Scientific Officer and Chairman of the
Scientific Advisory BoardRandel S. Marfin
    
    
    50
    
    
    Vice President, Luminex Bioscience GroupOliver H. Meek
    
    
    55
    
    
    Vice President, Quality and Regulatory AffairsDavid S. Reiter
    
    
    40
    
    
    Vice President, General Counsel and Corporate Secretary
 Patrick J. Balthrop
 25




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Russell W. Bradley
 Jeremy Bridge-Cook,
 Ph.D.
 John C. Carrano, Ph.D
 Harriss T. Currie.
 Gregory J. Gosch.
 James W. Jacobson, Ph.D.
 26




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Randel S. Marfin.
 Oliver H. Meek.
 David S. Reiter. Phillips & Reiter, PLLC
 27




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PART II
 
 ITEM 5.
    
    MARKET FOR THE REGISTRANTS COMMON EQUITY, RELATED STOCKHOLDER
MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
 Market Information
   2006
    
    High
    
    LowFirst Quarter
    
    $
    15.48
    
    
    $
    11.55Second Quarte
    
    $
    18.03
    
    
    $
    12.83Third Quarter
    
    $
    20.19
    
    
    $
    14.41Fourth Quarter
    
    $
    20.75
    
    
    $
    11.82
 2005
    
    High
    
    LowFirst Quarter
    
    $
    9.08
    
    
    $
    7.05Second Quarter
    
    $
    10.07
    
    
    $
    7.15Third Quarter
    
    $
    11.15
    
    
    $
    8.85Fourth Quarter
    
    $
    12.14
    
    
    $
    8.95
 Holders
  Dividends
  Recent Sales of Unregistered Securities
  28




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Issuer Purchases of Equity Securities
  ISSUER PURCHASES OF EQUITY SECURITIES
 Total Number ofShares Purchased as
    
    Appromixate Dollar
Value ofTotal Number
    
    Average Price
    
    Part of Publicly
    
    Shares that May Yet Beof Shares
    
    Paid per
    
    Announced Plans of
    
    Purchased Under the PlansPeriod
    
    Purchased
    
    Share ($)(1)
    
    Programs
    
    or Programs ($)10/1/06 - 10/31/06
    
    
    
    
    
    $
    
    
    
    
    
    
    
    
    11/1/06 - 11/30/06
    
    
    58
    
    
    $
    14.17
    
    
    
    
    
    
    
    12/1/06 - 12/31/06
    
    
    
    
    
    $
    
    
    
    
    
    
    
    
    Total Third Quarter
    
    
    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. 29




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ITEM 6. SELECTED FINANCIAL DATA
  Year Ended December 31,2006
    
    
    2005
    
    
    2004
    
    
    2003
    
    
    2002(In thousands, except per share data)Consolidated Results of Operations Data:Total revenue
    
    $
    52,989
    
    
    $
    42,313
    
    
    $
    35,880
    
    
    $
    26,292
    
    
    $
    13,008Gross profit
    
    
    32,252
    
    
    
    22,321
    
    
    
    14,722
    
    
    
    9,830
    
    
    
    2,683Loss from operations
    
    
    (581)
    [1]
    
    
    (3,496
    )
    
    
    (4,164
    )
    
    
    (6,475
    )
    
    
    (24,117
    )Net income (loss)
    
    
    1,507
    [1]
    
    
    (2,666
    )
    
    
    (3,605
    )
    
    
    (4,209
    )
    
    
    (24,934
    )Net income (loss) applicable to common stockholders
    
    $
    1,507
    
    
    $
    (2,666
    )
    
    $
    (3,605
    )
    
    $
    (4,209
    )
    
    $
    (24,934
    )Net income (loss) per common share, basic
    
    $
    0.05
    [1]
    
    $
    (0.09
    )
    
    $
    (0.12
    )
    
    $
    (0.14
    )
    
    $
    (0.85
    )Shares used in computing net loss per
share, basic
    
    
    31,434
    
    
    
    30,990
    
    
    
    30,698
    
    
    
    29,814
    
    
    
    29,275Net income (loss) per common share, diluted
    
    $
    0.05
    [1]
    
    $
    (0.09
    )
    
    $
    (0.12
    )
    
    $
    (0.14
    )
    
    $
    (0.85
    )Shares used in computing net income (loss) per
share, diluted
    
    
    32,988
    
    
    
    30,990
    
    
    
    30,698
    
    
    
    29,814
    
    
    
    29,275
 At December 31,2006
    
    2005
    
    2004
    
    2003
    
    2002(In thousands)Consolidated Balance Sheet Data:Cash and cash
equivalents
    
    $
    27,414
    
    
    $
    25,206
    
    
    $
    19,238
    
    
    $
    39,480
    
    
    $
    40,482Short-term investments
    
    
    10,956
    
    
    
    10,947
    
    
    
    12,891
    
    
    
    
    
    
    
    Long-term investments
    
    
    7,346
    
    
    
    5,466
    
    
    
    3,991
    
    
    
    
    
    
    
    Working capital
    
    
    44,179
    
    
    
    39,364
    
    
    
    40,823
    
    
    
    45,522
    
    
    
    45,321Total assets
    
    
    66,696
    
    
    
    58,035
    
    
    
    53,175
    
    
    
    53,294
    
    
    
    53,623Total stockholders equity
    
    
    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. 30




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ITEM 7.
    
    MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
 The following information should be read in conjunction with the Consolidated Financial
Statements and the accompanying Notes included below in Item 8 and Risk Factors included above in
Item 1A of this Annual Report on Form 10-K. This discussion contains forward-looking statements
that involve risks and uncertainties. Our actual results may differ materially from those
anticipated in these forward-looking statements.
 Overview
 ®
   
    
    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.
 31




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Grant Activity
  2006 Highlights
 
    
    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
 Recent Acquisition of TM Bioscience
   Future Operations
  32




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Critical Accounting Policies and Estimates
  Revenue Recognition.
  Inventory Valuation.
 Warranties.
 Accounts Receivable and Allowance for Doubtful Accounts.
 33




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Results of Operations
  Year Ended December 31,2006
    
    
    2005
    
    
    2004Revenue
    
    
    100
    %
    
    
    100
    %
    
    
    100
    %Cost of revenue
    
    
    39
    %
    
    
    47
    %
    
    
    59
    %Gross profit
    
    
    61
    %
    
    
    53
    %
    
    
    41
    %Operating expensesResearch and development
    
    
    16
    %
    
    
    13
    %
    
    
    11
    %Selling, general and administrative
    
    
    46
    %
    
    
    48
    %
    
    
    42
    %Total operating expenses
    
    
    62
    %
    
    
    61
    %
    
    
    53
    %Loss from operations
    
    
    (1
    )%
    
    
    (8
    )%
    
    
    (12
    )%Other income, net
    
    
    4
    %
    
    
    3
    %
    
    
    2
    %Settlement of litigation
    
    
    
    
    
    
    (1
    )%
    
    
    Income taxes
    
    
    
    
    
    
    
    
    
    
    Net income (loss)
    
    
    3
    %
    
    
    (6
    )%
    
    
    (10
    )%
 Year Ended December 31, 2006 Compared to Year Ended December 31, 2005
 Year Ended December 31,2006
    
    2005
    
    Variance ($)
    
    Variance (%)(in thousands)Revenue
    
    $
    52,989
    
    
    $
    42,313
    
    
    $
    10,676
    
    
    
    25
    %Gross profit
    
    $
    32,252
    
    
    $
    22,321
    
    
    $
    9,931
    
    
    
    44
    %Gross margin percentage
    
    
    61
    %
    
    
    53
    %
    
    
    8
    %
    

    N/AOperating expenses
    
    $
    32,833
    
    
    $
    25,817
    
    
    $
    7,016
    
    
    
    27
    %Net loss
    
    $
    1,507
    
    
    $
    (2,666
    )
    
    $
    4,173
    
    
    
    157
    %
 Revenue.
 34




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##### Table of Contents



Year Ended December 31,2006
    
    
    2005System sales
    
    $
    20,644
    
    
    $
    18,812Consumable sales
    
    
    15,676
    
    
    
    13,084Royalty revenue
    
    
    8,228
    
    
    
    5,255Service
contracts
    
    
    3,450
    
    
    
    2,444Other revenue
    
    
    4,991
    
    
    
    2,718$
    52,989
    
    
    $
    42,313
       Gross Profit.
 35




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Research and Development Expense.
 Selling, General and Administrative Expense.
 Other Income, net.
 Year Ended December 31, 2005 Compared to Year Ended December 31, 2004
 Year Ended December 31,Variance
    
    Variance2005
    
    2004
    
    ($)
    
    (%)(in thousands)Revenue
    
    $
    42,313
    
    
    $
    35,880
    
    
    $
    6,433
    
    
    
    18
    %Gross profit
    
    $
    22,321
    
    
    $
    14,722
    
    
    $
    7,599
    
    
    
    52
    %Gross margin percentage
    
    
    53
    %
    
    
    41
    %
    
    
    12
    %
    
    
    N/AOperating expenses
    
    $
    25,817
    
    
    $
    18,886
    
    
    $
    6,931
    
    
    
    37
    %Net loss
    
    $
    (2,666
    )
    
    $
    (3,605
    )
    
    $
    939
    
    
    
    26
    %
 Revenue.
  Year Ended December 31,2005
    
    

2004System sales
    
    $
    18,812
    
    
    $
    18,956Consumable sales
    
    
    13,084
    
    
    
    9,002Royalty revenue
    
    
    5,255
    
    
    
    3,210Service
contracts
    
    
    2,444
    
    
    
    1,565Other revenue
    
    
    2,718
    
    
    
    3,147$
    42,313
    
    
    $
    35,880
 36




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##### Table of Contents



Gross Profit.
 Research and Development Expense.
 Selling, General and Administrative Expense.
 37




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##### Table of Contents



Other Income, net.
 Settlement of Litigation.
 Liquidity and Capital Resources
      38




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39




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##### Table of Contents



Contractual Obligations
  Payment Due By PeriodLess Than
    
    
    
    
    
    
    
    
    
    
    More ThanContractual Obligations
    
    Total
    
    
    1 Year
    
    
    1-3 Years
    
    
    3-5 Years
    
    
    5 YearsNon-cancelable rental
obligations
    
    $
    4,129
    
    
    $
    1,241
    
    
    $
    2,520
    
    
    $
    368
    
    
    $
    Non-cancelable purchase
obligations (1)
    
    
    3,347
    
    
    
    2,747
    
    
    
    600
    
    
    
    
    
    
    
    Total
    
    $
    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. Inflation
  Recent Accounting Pronouncements
   40




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ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
   41




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ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
 Index to Consolidated Financial Statements
 PAGEReport of Independent Registered Public Accounting Firm
    
    
    43Report of Independent Registered Public Accounting
Firm
    
    
    44Consolidated Balance Sheets
    
    
    45Consolidated Statements of Operations
    
    
    46Consolidated Statements of Cash Flows
    
    
    47Consolidated Statements of Changes in Stockholders Equity
    
    
    48Notes to Consolidated Financial Statements
    
    
    49
 42




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Report of Independent Registered Public Accounting Firm
        
 43




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Report of Independent Registered Public Accounting Firm
       
 44




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LUMINEX CORPORATION
 
 CONSOLIDATED BALANCE SHEETS
 (In thousands, except share and per share amounts)
 December 31,2006
    
    
    2005ASSETSCurrent assets:Cash and cash equivalents
    
    $
    27,414
    
    
    $
    25,206Short-term investments
    
    
    10,956
    
    
    
    10,947Accounts receivable, (net of allowance for doubtful accounts of
$301 and $366 at December 31, 2006 and 2005, respectively)
    
    
    8,237
    
    
    
    6,580Inventories, net
    
    
    4,571
    
    
    
    4,281Prepaids and other
    
    
    1,917
    
    
    
    1,170Total current assets
    
    
    53,095
    
    
    
    48,184Property and equipment, net
    
    
    4,985
    
    
    
    3,222Long-term investments
    
    
    7,346
    
    
    
    5,466Other
    
    
    1,270
    
    
    
    1,163Total assets
    
    $
    66,696
    
    
    $
    58,035LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilities:Accounts payable
    
    $
    3,255
    
    
    $
    3,412Accrued liabilities
    
    
    2,905
    
    
    
    2,970Deferred revenue
    
    
    2,756
    
    
    
    2,438Total current liabilities
    
    
    8,916
    
    
    
    8,820Deferred revenue
    
    
    3,621
    
    
    
    4,505Total liabilities
    
    
    12,537
    
    
    
    13,325Stockholders equity:Common stock, $.001 par value, 200,000,000 shares authorized; issued and
outstanding: 31,678,608 shares in 2006; 31,655,683 shares in 2005
    
    
    32
    
    
    
    32Preferred stock, $.001 par value, 5,000,000 shares authorized; none
issued and outstanding
    
    
    
    
    
    
    Additional paid-in capital
    
    
    139,116
    
    
    
    135,440Deferred compensation
    
    
    
    
    
    
    (4,219
    )Accumulated other comprehensive loss
    
    
    65
    
    
    
    18Accumulated deficit
    
    
    (85,054
    )
    
    
    (86,561
    )Total stockholders equity
    
    
    54,159
    
    
    
    44,710Total liabilities and stockholders equity
    
    $
    66,696
    
    
    $
    58,035
  45




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LUMINEX CORPORATION
 
 CONSOLIDATED STATEMENTS OF OPERATIONS
 (In thousands, except per share amounts)
 Year Ended December 31,2006
    
    
    2005
    
    
    2004Revenue.
    
    $
    52,989
    
    
    $
    42,313
    
    
    $
    35,880Cost of revenue
    
    
    20,737
    
    
    
    19,992
    
    
    
    21,158Gross profit
    
    
    32,252
    
    
    
    22,321
    
    
    
    14,722Operating expenses:Research and development
    
    
    8,673
    
    
    
    5,600
    
    
    
    3,802Selling, general and administrative
    
    
    24,160
    
    
    
    20,217
    
    
    
    15,084Total operating expenses
    
    
    32,833
    
    
    
    25,817
    
    
    
    18,886Loss from operations
    
    
    (581
    )
    
    
    (3,496
    )
    
    
    (4,164
    )Other income, net
    
    
    2,108
    
    
    
    1,174
    
    
    
    572Settlement of litigation
    
    
    
    
    
    
    (322
    )
    
    
    Income (loss) before income taxes
    
    
    1,527
    
    
    
    (2,644
    )
    
    
    (3,592
    )Income taxes
    
    
    (20
    )
    
    
    (22
    )
    
    
    (13
    )Net income (loss)
    
    $
    1,507
    
    
    $
    (2,666
    )
    
    $
    (3,605
    )Net income (loss) per share, basic
    
    $
    0.05
    
    
    $
    (0.09
    )
    
    $
    (0.12
    )Shares used in computing net income (loss) per share, basic
    
    
    31,434
    
    
    
    30,990
    
    
    
    30,698Net income (loss) per share, diluted
    
    $
    0.05
    
    
    $
    (0.09
    )
    
    $
    (0.12
    )Shares used in computing net income (loss) per share, diluted
    
    
    32,988
    
    
    
    30,990
    
    
    
    30,698
  46




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LUMINEX CORPORATION
 
 CONSOLIDATED STATEMENTS OF CASH FLOWS
 (In thousands)
 Year Ended December 31,2006
    
    
    2005
    
    
    2004CASH FLOWS FROM OPERATING ACTIVITIES:Net income (loss)
    
    $
    1,507
    
    
    $
    (2,666
    )
    
    $
    (3,605
    )Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:Depreciation and amortization expense
    
    
    1,483
    
    
    
    1,048
    
    
    
    880Amortization of deferred stock, restricted stock
and stock compensation expense
    
    
    5,511
    
    
    
    1,675
    
    
    
    835Imputed interest
    
    
    (13
    )
    
    
    (13
    )
    
    
    (15
    )(Gain) loss on disposal of assets
    
    
    4
    
    
    
    83
    
    
    
    (34
    )Other
    
    
    (15
    )
    
    
    9
    
    
    
    9Changes in operating assets and liabilities:Accounts receivable, net
    
    
    (1,657
    )
    
    
    (716
    )
    
    
    (638
    )Inventories, net
    
    
    (290
    )
    
    
    3,369
    
    
    
    (2,882
    )Other assets
    
    
    (1,009
    )
    
    
    (332
    )
    
    
    7Accounts payable
    
    
    (602
    )
    
    
    1,770
    
    
    
    (125
    )Accrued liabilities
    
    
    (307
    )
    
    
    137
    
    
    
    574Deferred revenue
    
    
    (566
    )
    
    
    2,658
    
    
    
    (278
    )Net cash provided by (used in) operating activities
    
    
    4,046
    
    
    
    7,022
    
    
    
    (5,272
    )CASH FLOWS FROM INVESTING ACTIVITIES:Purchases of held-to-maturity securities
    
    
    (15,064
    )
    
    
    (15,450
    )
    
    
    (22,856
    )Maturities of held-to-maturity securities
    
    
    13,175
    
    
    
    15,919
    
    
    
    5,973Purchase of property and equipment
    
    
    (2,638
    )
    
    
    (2,830
    )
    
    
    (545
    )Proceeds from sale of assets
    
    
    45
    
    
    
    21
    
    
    
    49Acquired technology rights
    
    
    (25
    )
    
    
    
    
    
    
    (72
    )Net cash used in investing activities
    
    
    (4,507
    )
    
    
    (2,340
    )
    
    
    (17,451
    )CASH FLOWS FROM FINANCING ACTIVITIES:Proceeds from issuance of common stock
    
    
    2,622
    
    
    
    1,180
    
    
    
    2,495Net cash provided by financing activities
    
    
    2,622
    
    
    
    1,180
    
    
    
    2,495Effect of foreign currency exchange rate on cash
    
    
    47
    
    
    
    106
    
    
    
    (14
    )Change in cash and cash equivalents
    
    
    2,208
    
    
    
    5,968
    
    
    
    (20,242
    )Cash and cash equivalents, beginning of year
    
    
    25,206
    
    
    
    19,238
    
    
    
    39,480Cash and cash equivalents, end of year
    
    $
    27,414
    
    
    $
    25,206
    
    
    $
    19,238SUPPLEMENTAL DISLOSURE OF NONCASH
INVESTING ACTIVITIES:Purchase of leasehold improvements under trade
payable arrangement paid in 2007
    
    $
    445
    
    
    $
    
    
    
    $
    
  47




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LUMINEX CORPORATION
 
 CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS EQUITY
 (In thousands, except per share data)
 AccumulatedCommon Stock
    
    
    Additional
    
    
    Other
    
    
    Deferred
    
    
    
    
    
    
    TotalNumber of
    
    
    
    
    
    
    Paid-In
    
    
    Comprehensive
    
    
    Stock
    
    
    Accumulated
    
    
    StockholdersShares
    
    
    Amount
    
    
    Capital
    
    
    Income/(Loss)
    
    
    Compensation
    
    
    Deficit
    
    
    EquityBalance at December 31, 2003
    
    
    30,301,057
    
    
    $
    30
    
    
    $
    125,169
    
    
    $
    (74
    )
    
    $
    
    
    
    $
    (80,290
    )
    
    $
    44,835Exercise of stock options
    
    
    556,100
    
    
    
    1
    
    
    
    2,494
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,495Amortization of deferred stock and
stock compensation expense
    
    
    
    
    
    
    
    
    
    
    544
    
    
    
    
    
    
    
    (312
    )
    
    
    
    
    
    
    232Grant of restricted stock, net
    
    
    312,535
    
    
    
    
    
    
    
    3,626
    
    
    
    
    
    
    
    (3,640
    )
    
    
    
    
    
    
    (14
    )Amortization of restricted stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    617
    
    
    
    
    
    
    
    617Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (3,605
    )
    
    
    (3,605
    )Foreign currency translation
adjustment
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (14
    )
    
    
    
    
    
    
    
    
    
    
    (14
    )Balance at December 31, 2004
    
    
    31,169,692
    
    
    
    31
    
    
    
    131,833
    
    
    
    (88
    )
    
    
    (3,335
    )
    
    
    (83,895
    )
    
    
    44,546Exercise of stock options
    
    
    204,837
    
    
    
    1
    
    
    
    1,179
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,180Amortization of deferred stock and
stock compensation expense
    
    
    
    
    
    
    
    
    
    
    (325
    )
    
    
    
    
    
    
    312
    
    
    
    
    
    
    
    (13
    )Grant of restricted stock, net
    
    
    307,428
    
    
    
    
    
    
    
    2,967
    
    
    
    
    
    
    
    (2,967
    )
    
    
    
    
    
    
    Amortization of restricted stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,606
    
    
    
    
    
    
    
    1,606Forfeiture of restricted stock
    
    
    (26,274
    )
    
    
    
    
    
    
    (214
    )
    
    
    
    
    
    
    165
    
    
    
    
    
    
    
    (49
    )Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2,666
    )
    
    
    (2,666
    )Foreign currency translation
adjustment
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    106
    
    
    
    
    
    
    
    
    
    
    
    106Balance at December 31, 2005
    
    
    31,655,683
    
    
    
    32
    
    
    
    135,440
    
    
    
    18
    
    
    
    (4,219
    )
    
    
    (86,561
    )
    
    
    44,710Exercise of stock options
    
    
    422,499
    
    
    
    
    
    
    
    2,622
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,622Issuances of restricted stock, net of
shares withheld for taxes
    
    
    144,539
    
    
    
    
    
    
    
    (242
    )
    
    
    
    
    
    
    

    
    
    
    
    
    
    
    (242
    )Effect of adoption of FAS 123R
    
    
    (544,113
    )
    
    
    
    
    
    
    (4,220
    )
    
    
    
    
    
    
    4,219
    
    
    
    
    
    
    
    (1
    )Stock compensation.
    
    
    
    
    
    
    
    
    
    
    5,516
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5,516Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,507
    
    
    
    1,507Foreign currency translation
adjustment
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    47
    
    
    
    
    
    
    
    
    
    
    
    47Balance at December 31, 2006
    
    
    31,678,608
    
    
    $
    32
    
    
    $
    139,116
    
    
    $
    65
    
    
    $
    
    
    
    $
    (85,054
    )
    
    $
    54,159
  48




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##### Table of Contents



LUMINEX CORPORATION
 
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 NOTE 1  DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 Description of Business
 ®
 Principles of Consolidation
  Use of Estimates
  Cash and Cash Equivalents
  Investments
  Fair Value of Financial Instruments
  49




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##### Table of Contents



Concentration of Credit Risk
    Inventories
  Property and Equipment
  Impairment of Long-Lived Assets
  Revenue Recognition and Allowance For Doubtful Accounts
    50




---



##### Table of Contents



Warranty Programs
  Research and Development Costs
  Advertising Costs
  Incentive Compensation
  Income Taxes
  Earnings Per Share
  Stock-Based Compensation
  51




---



##### Table of Contents



Segment Reporting
  NOTE 2  INVESTMENTS
   December 31,2006
    
    
    2005Accrued
    
    
    Amortized
    
    
    
    
    
    
    Accrued
    
    
    AmortizedCost
    
    
    Interest
    
    
    Cost
    
    
    Cost
    
    
    Interest
    
    
    CostDue in one year or less
    
    $
    10,956
    
    
    $
    183
    
    
    $
    11,139
    
    
    $
    10,947
    
    
    $
    93
    
    
    $
    11,040Due after one year through two years
    
    
    7,346
    
    
    
    84
    
    
    
    7,430
    
    
    
    5,466
    
    
    
    23
    
    
    
    5,489$
    18,302
    
    
    $
    267
    
    
    $
    18,569
    
    
    $
    16,413
    
    
    $
    116
    
    
    $
    16,529
 NOTE 3  ACCOUNTS RECEIVABLE
  2006
    
    
    2005Accounts receivable
    
    $
    8,538
    
    
    $
    6,946Less: Allowance for doubtful accounts
    
    
    (301
    )
    
    
    (366
    )$
    8,237
    
    
    $
    6,580
  Balance at December 31, 2003
    
    $
    340Reductions charged to costs and expenses
    
    
    (34
    )Write-offs of uncollectible accounts
    
    
    (28
    )Recoveries of uncollectible accounts
    
    
    Balance at December 31, 2004
    
    
    278Additions charged to costs and expenses
    
    
    90Write-offs of uncollectible accounts
    
    
    (2
    )Recoveries of uncollectible accounts
    
    
    Balance at December 31, 2005
    
    
    366Reductions charged to costs and expenses
    
    
    (52
    )Write-offs of uncollectible accounts
    
    
    (13
    )Recoveries of uncollectible accounts
    
    
    Balance at December 31, 2006
    
    $
    301
 52




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##### Table of Contents



NOTE 4  INVENTORY, NET
  2006
    
    
    2005Parts and supplies
    
    $
    3,504
    
    
    $
    4,011Work-in-progress
    
    
    555
    
    
    
    526Finished goods
    
    
    932
    
    
    
    2054,991
    
    
    
    4,742Less: Allowance for excess and obsolete inventory
    
    
    (420
    )
    
    
    (461
    )$
    4,571
    
    
    $
    4,281
  NOTE 5  PROPERTY AND EQUIPMENT
  2006
    
    
    2005Laboratory equipment
    
    $
    4,502
    
    
    $
    3,954Leasehold improvements
    
    
    3,284
    
    
    
    2,102Computer equipment
    
    
    1,477
    
    
    
    1,237Purchased software and intangibles
    
    
    2,738
    
    
    
    1,901Furniture and fixtures
    
    
    574
    
    
    
    43812,575
    
    
    
    9,632Less: Accumulated amortization and depreciation
    
    
    (7,590
    )
    
    
    (6,410
    )$
    4,985
    
    
    $
    3,222
 NOTE 6  OTHER ASSETS
  2006
    
    
    2005Purchased technology rights (net of accumulated amortization of
$416,000 and $308,000 in 2006 and 2005, respectively)
    
    $
    856
    
    
    $
    689Other
    
    
    531
    
    
    
    5601,387
    
    
    
    1,249Less: Current portion
    
    
    (117
    )
    
    
    (86
    )$
    1,270
    
    
    $
    1,163
  53




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##### Table of Contents



NOTE 7  ACCRUED WARRANTY COSTS
   Accrued warranty costs at December 31, 2003
    
    $
    475Warranty expenses
    
    
    (974
    )Accrual for warranty costs
    
    
    1,003Accrued warranty costs at December 31, 2004
    
    
    504Warranty expenses
    
    
    (785
    )Accrual for warranty costs
    
    
    632Accrued warranty costs at December 31, 2005
    
    
    351Warranty expenses
    
    
    (635
    )Accrual for warranty costs
    
    
    595Accrued warranty costs at December 31, 2006
    
    $
    311
 NOTE 8  INCOME TAXES
  2006
    
    
    2005
    
    
    2004Current:Federal
    
    $
    
    
    
    $
    
    
    
    $
    Foreign
    
    
    40
    
    
    
    22
    
    
    
    13State
    
    
    (20
    )
    
    
    
    
    
    
    Total current
    
    
    20
    
    
    
    22
    
    
    
    13Deferred:Federal
    
    
    
    
    
    
    
    
    
    
    Foreign
    
    
    
    
    
    
    
    
    
    
    State
    
    
    
    
    
    
    
    
    
    
    Total deferred
    
    
    
    
    
    
    
    
    
    
    Total provision for income taxes
    
    $
    20
    
    
    $
    22
    
    
    $
    13
   54




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##### Table of Contents



2006
    
    
    2005
    
    
    2004Deferred tax assets:Current deferred tax assetsAccrued liabilities and other
    
    $
    775
    
    
    $
    645
    
    
    $
    1,117Gross current deferred tax assets
    
    
    775
    
    
    
    645
    
    
    
    1,117Valuation allowance
    
    
    (628
    )
    
    
    (425
    )
    
    
    (892
    )Net current deferred tax assets
    
    
    147
    
    
    
    220
    
    
    
    225Noncurrent deferred tax assetsNet operating loss and credit carryforwards
    
    
    34,155
    
    
    
    35,018
    
    
    
    35,031Deferred revenue
    
    
    2,342
    
    
    
    2,562
    
    
    
    1,568Depreciation and amoritization
    
    
    348
    
    
    
    279
    
    
    
    197Investment basis
    
    
    1,637
    
    
    
    1,637
    
    
    
    1,637Stock compensation and other
    
    
    615
    
    
    
    
    
    
    
    Gross
noncurrent deferred tax assets
    
    
    39,097
    
    
    
    39,496
    
    
    
    38,433Valuation allowance
    
    
    (39,069
    )
    
    
    (39,496
    )
    
    
    (38,433
    )Net noncurrent deferred tax assets
    
    
    28
    
    
    
    
    
    
    
    Deferred tax liabilities:Current deferred tax liabilitiesPrepaid expenses
    
    
    (147
    )
    
    
    (220
    )
    
    
    (225
    )Total current deferred tax liabilities
    
    
    (147
    )
    
    
    (220
    )
    
    
    (225
    )Net current deferred tax asset (liability)
    
    $
    
    
    
    $
    
    
    
    $
    Net noncurrent deferred tax asset (liability)
    
    $
    28
    
    
    $
    
    
    
    $
    
    Year Ended December 31,2006
    
    2005
    
    2004Statutory tax
rate
    
    
    (34.0
    )%
    
    
    (34.0
    )%
    
    
    (34.0
    )%State taxes, net of federal
benefit
    
    
    2.7
    %
    
    
    (3.0
    )%
    
    
    (2.7
    )%Permanent
items
    
    
    (3.3
    )%
    
    
    1.4
    %
    
    
    0.8
    %Effect of foreign
operations
    
    
    (0.5
    )%
    
    
    0.0
    %
    
    
    0.0
    %Research credit
generated
    
    
    22.0
    %
    
    
    0.0
    %
    
    
    0.0
    %Deferred assets not
benefited
    
    
    11.7
    %
    
    
    36.4
    %
    
    
    36.3
    %-1.4
    %
    
    
    0.8
    %
    
    
    0.4
    %
 55




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##### Table of Contents



NOTE 9  NET INCOME (LOSS) PER SHARE
  Year Ended December 31,2006
    
    
    2005
    
    
    2004Numerator:Net income (loss)
    
    $
    1,507
    
    
    $
    (2,666
    )
    
    $
    (3,605
    )Denominator:Denominator for basic net income (loss) per share -
weighted average common stock outstanding
    
    
    31,434
    
    
    
    30,990
    
    
    
    30,698Effect of dilutive securities:Stock options and awards
    
    
    1,554
    
    
    
    
    
    
    
    Denominator for diluted net income (loss) per share -
weighted average shares outstanding  diluted
    
    
    32,988
    
    
    
    30,990
    
    
    
    30,698Basic net income (loss) per share
    
    $
    0.05
    
    
    $
    (0.09
    )
    
    $
    (0.12
    )Diluted net income (loss) per share
    
    $
    0.05
    
    
    $
    (0.09
    )
    
    $
    (0.12
    )
  NOTE 10  STOCKHOLDERS EQUITY
 Preferred Stock
  Stockholders Rights Plan
  NOTE 11  COMPREHENSIVE INCOME/ LOSS
  56




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##### Table of Contents



NOTE 12  EMPLOYEE BENEFIT PLANS AND STOCK-BASED COMPENSATION
 Stock-Based Compensation
    Equity Incentive Plans
    57




---



##### Table of Contents



Accounting for Stock Compensation
   2006
    
    2005
    
    2004Dividend yield
    
    
    0.0
    %
    
    
    0.0
    %
    
    
    0.0
    %Expected volatility
    
    
    0.6
    
    
    
    0.6
    
    
    
    0.7Risk-free rate of return
    
    
    5.0
    %
    
    
    5.0
    %
    
    
    5.0
    %Expected life
    
    6 yrs.
    
    
    7 yrs.
    
    
    7 yrs.Weighted average fair
value at grant date
    
    
    N/A
    [1]
    
    $
    4.68
    
    
    $
    6.89
 
 [1]
    
    No stock options were issued to employees during this period.   58




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##### Table of Contents



WeightedWeighted
    
    Average
    
    AggregateAverage
    
    Remaining
    
    IntrinsicShares
    
    Exercise
    
    Contractual
    
    ValueStock Options
    
    (in thousands)
    
    Price
    
    Life
    
    (in thousands)Outstanding at December 31, 2005
    
    
    3,758
    [1]
    
    $
    9.85Granted
    
    
    
    
    
    
    Exercised
    
    
    (423
    )
    
    
    6.22Cancelled or expired
    
    
    (172
    )
    
    
    20.39Outstanding at December 31, 2006
    
    
    3,163
    
    
    $
    9.76
    
    
    
    6.05
    
    
    $
    13,608Vested at December 31, 2006 and expected to vest
    
    
    3,159
    
    
    $
    9.76
    
    
    
    0.09
    
    
    
    13,591Exercisable at December 31, 2006
    
    
    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 AverageShares
    
    Exercise PriceOptions outstanding, December 31, 2003
    
    
    4,142
    
    
    $
    10.10Granted
    
    
    1,061
    
    
    $
    8.15Exercised
    
    
    (557
    )
    
    $
    4.49Surrendered
    
    
    (580
    )
    
    $
    14.92Options outstanding, December 31, 2004
    
    
    4,066
    
    
    $
    9.76Granted
    
    
    53
    [1]
    
    $
    7.48Exercised
    
    
    (205
    )
    
    $
    5.76Surrendered
    
    
    (156
    )
    
    $
    12.32Options outstanding, December 31, 2005
    
    
    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-AverageShares
    
    
    Grant-DateRestricted Stock Awards
    
    (in thousands)
    
    
    Fair ValueNon-vested at December 31, 2005
    
    
    544
    
    
    $
    9.04Granted
    
    
    426
    
    
    
    15.74Vested
    
    
    (160
    )
    
    
    9.64Cancelled or expired
    
    
    (12
    )
    
    
    11.41Non-vested at December 31, 2006
    
    
    798
    
    
    $
    12.46
 59




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##### Table of Contents



Year Ended December 31,2006
    
    
    2005
    
    
    2004Cost of revenue
    
    $
    318
    
    
    $
    81
    
    
    $
    45Research and development
    
    
    594
    
    
    
    116
    
    
    
    56Selling, general and administrative
    
    
    4,599
    
    
    
    1,478
    
    
    
    748Stock-based compensation costs reflected
in net income (loss)
    
    $
    5,511
    
    
    $
    1,675
    
    
    $
    849
  Year Ended December 31,2005
    
    
    2004Net loss, as reported
    
    $
    (2,666
    )
    
    $
    (3,605
    )Add: Stock-based employee compensation expense
included in reported net loss
    
    
    1,575
    
    
    
    675Deduct: Total stock-based employee compensation expense
determined under fair value based method for all awards
    
    
    (4,834
    )
    
    
    (5,307
    )Pro forma net loss
    
    $
    (5,925
    )
    
    $
    (8,237
    )Earnings per shareBasic and Diluted  as reported
    
    $
    (0.09
    )
    
    $
    (0.12
    )Basic and Diluted  pro forma
    
    $
    (0.19
    )
    
    $
    (0.27
    )
 60




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##### Table of Contents



Reserved Shares of Common Stock
  Options
    
    Shares Available
    
    Total SharesOutstanding
    
    for Future Issuance
    
    Reserved1996 Plan
    
    
    20,400
    
    
    
    
    
    
    
    20,4002000 Plan
    
    
    1,907,054
    
    
    
    
    
    
    
    1,907,0542001 Plan
    
    
    735,912
    
    
    
    
    
    
    
    735,9122006 Equity Incentive Plan
    
    
    
    
    
    
    1,726,499
    
    
    
    1,726,4992006 Mangements Stock Purchase Plan
    
    
    
    
    
    
    500,000
    
    
    
    500,000Other *
    
    
    500,000
    
    
    
    
    
    
    
    500,0003,163,366
    
    
    
    2,226,499
    
    
    
    5,389,865
 
 *
    
    Balthrop Option Employee Savings Plans
  NOTE 13  COMMITMENTS AND CONTINGENCIES
 Lease Arrangements
   2007
    
    $
    1,2412008
    
    
    1,2472009
    
    
    1,2732010
    
    
    368Thereafter
    
    
    Total
    
    $
    4,129
  61




---



##### Table of Contents



Non-Cancelable Purchase Commitments
  Minimum Purchase Commitments
  Employment Contracts
  Legal Proceedings
  NOTE 14  GUARANTEES
  NOTE 15  GEOGRAPHIC INFORMATION
  62




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##### Table of Contents



2006
    
    
    2005
    
    
    2004Domestic
    
    $
    40,823
    
    
    $
    32,844
    
    
    $
    26,965Foreign:Europe
    
    
    5,760
    
    
    
    5,310
    
    
    
    5,710Asia
    
    
    2,870
    
    
    
    1,123
    
    
    
    932Other
    
    
    3,536
    
    
    
    3,036
    
    
    
    2,273$
    52,989
    
    
    $
    42,313
    
    
    $
    35,880
 NOTE 16  SETTLEMENT OF LITIGATION
  NOTE 17  RECENT ACCOUNTING PRONOUNCEMENTS
   NOTE
18  SUBSEQUENT EVENTS (UNAUDITED)
   63




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##### Table of Contents



SELECTED
QUARTERLY RESULTS (UNAUDITED)
  Quarter EndedMarch 31,
    
    June 30,
    
    September 30,
    
    December 31,2006
    
    2006
    
    2006
    
    2006Revenue
    
    $
    12,997
    
    
    $
    13,268
    
    
    $
    12,514
    
    
    $
    14,210Gross profit
    
    
    8,260
    
    
    
    7,660
    
    
    
    7,782
    
    
    
    8,550Income (loss) from operations
    
    
    113
    
    
    
    (267
    )
    
    
    (435
    )
    
    
    7Net income
    
    
    526
    
    
    
    271
    
    
    
    111
    
    
    
    599Basic income (loss) per share
    
    
    0.02
    
    
    
    0.01
    
    
    
    0.00
    
    
    
    0.02Diluted income (loss) per share
    
    
    0.02
    
    
    
    0.01
    
    
    
    0.00
    
    
    
    0.02
 Quarter EndedMarch 31,
    
    June 30,
    
    September 30,
    
    December 31,2005
    
    2005
    
    2005
    
    2005Revenue
    
    $
    9,320
    
    
    $
    10,652
    
    
    $
    10,764
    
    
    $
    11,577Gross profit
    
    
    4,842
    
    
    
    6,358
    
    
    
    5,470
    
    
    
    5,651Loss from operations
    
    
    (514
    )
    
    
    (280
    )
    
    
    (991
    )
    
    
    (1,711
    )Net loss
    
    
    (298
    )
    
    
    (363
    )
    
    
    (657
    )
    
    
    (1,348
    )Basic and diluted loss per share
    
    
    (0.01
    )
    
    
    (0.01
    )
    
    
    (0.02
    )
    
    
    (0.04
    )
 
 ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
  64




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##### Table of Contents



ITEM 9A. CONTROLS AND PROCEDURES
 Evaluation of Disclosure Controls and Procedures
  Managements Report on Internal Control Over Financial Reporting
   Changes in Internal Control Over Financial Reporting
  
 ITEM 9B. OTHER INFORMATION
  65




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##### Table of Contents



PART III
 
 ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
   
 ITEM 11. EXECUTIVE COMPENSATION
  
 ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
  Securities Authorized for Issuance Under Equity Compensation Plans
  Number of Securities RemainingAvailable for Future IssuanceNumber of Securities to
    
    Weighted-Average
    
    Under Equity Compensation Plansbe Issued Upon Exercise
    
    Exercise Price of
    
    (Excluding Securities ReflectedPlan Category
    
    of Outstanding Options
    
    Outstanding Options
    
    in Column (A))(A)
    
    (B)
    
    (C)Equity compensation plans
approved by security
holders
    
    
    1,927,454
    
    
    $
    10.00
    
    
    
    2,226,499`Equity compensation plans
not approved by security
holders (1) (2)
    
    
    1,235,912
    
    
    $
    9.39
    
    
    
    Total
    
    
    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 Companys 2001 Plan see Note 12 to the Consolidated Financial
Statements.(2)
    
    Includes an option to purchase 500,000 shares of the Companys 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. 66




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##### Table of Contents



ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
  
 ITEM 14. PRINCIPLE ACCOUNTANT FEES AND SERVICES
  67




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##### Table of Contents



PART IV
 
 ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
       EXHIBITNUMBER
    
    DESCRIPTION OF DOCUMENT2.1
    
    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 Companys
Current Report on Form 8-K dated September 10, 2002).2.2
    
    Merger Agreement, dated December 14, 2006, by and between the Company and
Tm Bioscience Corporation (Previously filed as an Exhibit to the Companys
Current Report on Form 8-K dated December 15, 2006)3.1
    
    Restated Certificate of Incorporation of the Company (Previously filed as
an Exhibit to the Companys Registration Statement on Form S-1 (File No.
333-96317), filed February 7, 2000, as amended).3.2
    
    Amended and Restated Bylaws of the Company (Previously filed as an Exhibit
to the Companys Registration Statement on Form S-1 (File No. 333-96317),
filed February 7, 2000, as amended).4.1
    
    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 Companys Current Report on Form 8-K dated June 21, 2001).10.1#
    
    1996 Stock Option Plan of the Company, as amended (Previously filed as an
Exhibit to the Companys Registration Statement on Form S-1 (File No.
333-96317), filed February 7, 2000, as amended).10.2#
    
    Form of Stock Option Agreement for the 1996 Stock Option Plan (Previously
filed as an Exhibit to the Companys Registration Statement on Form S-1
(File No. 333-96317), filed February 7, 2000, as
amended).10.3#
    
    Form of Incentive Stock Option Agreement for the 1996 Stock Option Plan
(Previously filed as an Exhibit to the Companys Registration Statement on
Form S-1 (File No. 333-96317), filed February 7, 2000, as amended).10.4#
    
    2000 Long-Term Incentive Plan of the Company, as amended (Previously filed
as an Exhibit to the Companys Quarterly Report on Form 10-Q for the
quarterly period ended March 31, 2002).
 68




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##### Table of Contents



EXHIBITNUMBER
    
    DESCRIPTION OF DOCUMENT10.5#
    
    Form of Stock Option Award Agreement for the 2000 Long-Term Incentive Plan
(Previously filed as an Exhibit to the Companys Registration Statement on
Form S-1 (File No. 333-96317), filed February 7, 2000, as amended).10.6#
    
    2001 Broad-Based Stock Option Plan of the Company (Previously filed as an
Exhibit to the Companys Annual Report on Form 10-K for the fiscal year
ended December 30, 2001).10.7#
    
    Form of Option Grant Certificate for the 2001 Broad-Based Stock Option
Plan (Previously filed as an Exhibit to the Companys Annual Report on
Form 10-K for the fiscal year ended December 30, 2001).10.8+
    
    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 Companys Registration Statement on Form S-1 (File No. 333-96317),
filed February 7, 2000, as amended).10.9+
    
    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 Companys Registration Statement on Form S-1
(File No. 333-96317), filed February 7, 2000, as amended).10.10
    
    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 Companys Annual Report on Form 10-K for the
fiscal year ended December 31, 2000).10.11+
    
    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 Companys Annual Report on Form 10-K for the fiscal year
ended December 30, 2001).10.12+
    
    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 Companys Registration Statement on Form S-1 (File
No. 333-96317), filed February 7, 2000, as amended).10.13#
    
    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 Companys Quarterly Report on Form
10-Q for the period ended June 30, 2002).10.14#
    
    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 Companys Quarterly Report on Form 10-Q for the period
ended June 30, 2002).10.15
    
    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 Companys Form 10-Q for the quarterly period ended
September 30, 2001).10.16
    
    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 Companys Quarterly Report on Form
10-Q for the period ended June 30, 2002).10.17
    
    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 Companys Annual Report on Form 10-K for the fiscal
year ended December 31, 2002).10.18
    
    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
Companys Quarterly Report on Form 10-Q for the period ended June 30,
2002).10.19#
    
    Employment Agreement, effective as of October 1, 2003, by and between
Luminex Corporation and Harriss T. Currie (Previously filed as an Exhibit
to the Companys Annual Report on form 10-K for the fiscal year ended
December 31, 2003).10.20#
    
    Employment Agreement effective as of October 1, 2003, by and between
Luminex Corporation and David S. Reiter (Previously filed as an Exhibit to
the Companys Annual Report on form 10-K for the fiscal year ended
December 31, 2003).
 69




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##### Table of Contents



EXHIBITNUMBER
    
    DESCRIPTION OF DOCUMENT10.21#
    
    Employment Agreement effective as of May 15, 2004, by and between Luminex
Corporation and Patrick J. Balthrop (Previously filed as an Exhibit to the
Companys Current Report on Form 8-K dated May 17, 2004).10.22#
    
    Employment Agreement effective as of October 25, 2004, by and between
Luminex Corporation and Gregory J. Gosch (Previously filed as an Exhibit
to the Companys Current Report on Form 8-K dated October 22, 2004).10.23#
    
    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)10.24#
    
    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 Companys Quarterly Report on Form 10-Q for the quarterly period ended
September 30, 2004).10.25#
    
    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 Companys Current Report on Form 8-K dated May 17,
2004).10.26#
    
    2006 Executive Officer Compensation Summary (Previously filed as an
Exhibit to the Companys Quarterly Report on Form 10-Q for the quarterly
period ended June 30, 2006).10.27#
    
    Form of Amendment to Executive Employment Agreements (Previously filed as
an Exhibit to the Companys Annual Report on Form 10-K for the fiscal
year ended December 31, 2006).10.28#
    
    Luminex Corporation 2006 Equity Incentive Plan (Previously filed as
Exhibit A to the Companys Proxy Statement for its Annual Meeting of
Shareholders held on May 25, 2006)10.29#
    
    Form of Non-Qualified Stock Option Agreement for the 2006 Equity Incentive
Plan (Previously filed as an Exhibit to the Companys Current Report on
Form 8-K dated May 25, 2006)10.30#
    
    Form of Restricted Share Award Agreement for Officers & Employees for the
2006 Equity Incentive Plan (Previously filed as an Exhibit to the
Companys Current Report on Form 8-K dated May 25, 2006)10.31#
    
    Form of Restricted Share Award Agreement for Directors for the 2006 Equity
Incentive Plan (Previously filed as an Exhibit to the Companys Current
Report on Form 8-K dated May 25, 2006)10.32#
    
    Luminex Corporation 2006 Management Stock Purchase Plan (Previously filed
as Exhibit B to the Companys Proxy Statement for its Annual Meeting of
Shareholders held on May 25, 2006)10.33
    
    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 Companys Current Report on Form 8-K dated March 1, 2007)10.34#
    
    Employment Agreement effective as of February 7, 2007, by and between
Luminex Corporation and John C. Carrano.10.35#
    
    Employment Agreement effective as of March 1, 2007, by and between Luminex
Corporation, Tm Bioscience Corporation and Jeremy Bridge-Cook.10.36#
    
    Form of Restricted Stock Unit Agreement for the 2006 Equity Incentive Plan.21.1
    
    Subsidiaries of the Company.23.1
    
    Consent of Independent Registered Public Accounting Firm.
 70




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##### Table of Contents



EXHIBITNUMBER
    
    DESCRIPTION OF DOCUMENT24.1
    
    Power of Attorney (incorporated in the signature page of this report).31.1
    
    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 2002.31.2
    
    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 2002.32.1
    
    Certification by CEO pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.32.2
    
    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).
 71




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##### Table of Contents



SIGNATURES
  LUMINEX CORPORATIONBy:
    
    /s/ Patrick J. BalthropPatrick J. Balthrop
President and Chief Executive Officer
 POWER OF ATTORNEY
   SIGNATURES
    
    TITLE
    
    DATE/s/ Patrick J. Balthrop

Patrick J. Balthrop
    
    President and Chief Executive Officer,
Director (Principal Executive Officer)
    
    March 16, 2007/s/ Harriss T. Currie

Harriss T. Currie
    
    Chief Financial Officer, VP  Finance
and Treasurer (Principal Financial Officer)
    
    March 16, 2007/s/ Kristi M. Richburg

Kristi M. Richburg
    
    Controller
(Principal Accounting Officer)
    
    March 16, 2007/s/ Robert J. Cresci

Robert J. Cresci
    
    Director
    
    March 16, 2007/s/ Thomas W. Erickson

Thomas W. Erickson
    
    Director
    
    March 16, 2007/s/ Fred C. Goad, Jr.

Fred C. Goad, Jr.
    
    Director
    
    March 16, 2007/s/ Jay B. Johnston

Jay B. Johnston
    
    Director
    
    March 16, 2007/s/ Jim D. Kever

Jim D. Kever
    
    Director
    
    March 16, 2007
 S-1




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##### Table of Contents



SIGNATURES
    
    TITLE
    
    DATE/s/ G. Walter Loewenbaum II

G. Walter Loewenbaum II
    
    Chairman of the Board of Directors,
Director
    
    March 16, 2007/s/ Kevin M. McNamara

Kevin M. McNamara
    
    Director
    
    March 16, 2007/s/ J. Stark Thompson

J. Stark Thompson
    
    Director
    
    March 16, 2007/s/ Gerard Vaillant

Gerard Vaillant
    
    Director
    
    March 16, 2007