Quantcast
Last updated on April 24, 2014 at 13:57 EDT

NeoGenomics Reports Record Revenue of $16.9 Million, Adjusted EBITDA of $2.2 Million and Net Income of $900K for the Third Quarter 2013

October 23, 2013

FT. MYERS, Fla., Oct. 23, 2013 /PRNewswire/ – NeoGenomics, Inc. (NASDAQ: NEO), a leading provider of cancer-focused genetic testing services today reported its results for the third quarter of 2013.

Third Quarter 2013 Highlights:

    --  Revenue growth of 18.9%
    --  Test volume growth of 19.1%
    --  Gross Profit Margin of 48.4% versus 41.5% last year
    --  Adjusted EBITDA((1)) growth of 157%
    --  Net Income of $0.02 per share versus a loss of $0.02 last year

Revenue for the third quarter was $16.9 million, an 18.9% increase from third quarter 2012 revenue.Test volume increased by 19.1% year over year, while average revenue per test was largely unchanged. Average cost of goods sold per test declined by 12% as a result of continued productivity improvements, increased leverage from higher volumes, and other cost containment initiatives. As a result, gross profit increased by 38.7% from the prior year.

Total operating expenses increased by 6.6% from last year’s third quarter, primarily as a result of additional sales representatives and increases in billing and information technology expenses. This was partially offset by a decrease in stock compensation expenses related to the decline in the Company’s stock price for the quarter.

Net income for the quarter was $900,000, or $0.02 per share, versus a net loss of $(975,000), or $(0.02) per share, in last year’s third quarter. Adjusted EBITDA((1)) improved by 157% to $2.2 million for the quarter from $842,000 last year.

Douglas M. VanOort, the Company’s Chairman and CEO commented, “We are pleased with our third quarter results. Solid growth in test volume was driven by continued success with new products and growth in the number of customer accounts. The productivity of our sales team improved with gains in all geographic territories across the country. In addition, we have added five sales representatives and two product managers since the end of the second quarter to further accelerate growth.”

Mr. VanOort continued, “We continued to improve productivity and increase our efficiency and effectiveness during the quarter. As a result, we realized strong reductions in average cost-per-test, which allowed us to drive 85% of the incremental $2.7 million of revenue to gross profit. We are in the process of redesigning and expanding our Fort Myers, Florida laboratory to incorporate lean workflow concepts and improved automation. We expect this new lab to be complete in the first quarter of 2014 and believe it will yield further process improvements.”

Mr. VanOort added, “As a result of our strategic focus on innovation and new product development, NeoGenomics is increasingly being recognized as a leader in cancer testing in this era of ‘precision medicine’. We have now introduced over 30 new Molecular tests and profiles to our menu since the beginning of 2013 and we expect to launch several more tests and next generation sequencing for clinical use by early 2014. We believe we now have the broadest oncology-focused clinical testing menu in the country, and we are beginning to see increasing interest in our comprehensive genetic capabilities from the pharmaceutical industry.”

Fourth Quarter and Full-Year 2013 Financial Outlook:

We expect revenue of $17.6-$18.1 million and earnings of $0.01 to $0.02 per share in Quarter 4. For the full year 2013, we expect revenue to be $65.7-$66.2 million with earnings per share of $0.03 to $0.04. The Company reserves the right to adjust this guidance at any time based on the ongoing execution of its business plan. Current and prospective investors are encouraged to perform their own due diligence before buying or selling any of the Company’s securities, and are reminded that the foregoing estimates should not be construed as a guarantee of future performance.

____________________

(1) Adjusted EBITDA is defined as earnings before interest, taxes, depreciation, amortization, non-recurring moving expense for the move of our facility in Irvine, California in 2012, and non-cash stock-based compensation expenses. See table for a reconciliation to net income.

Conference Call

The Company has scheduled a web-cast and conference call to discuss their Q3 2013 results on Wednesday October 23, 2013 at 11:00 AM EDT. Interested investors should dial (877) 407-8035 (domestic) and (201) 689-8035 (international) at least five minutes prior to the call and ask for Conference ID Number 10000554. A replay of the conference call will be available until 11:59 PM on November 6, 2013 and can be accessed by dialing (877) 660-6853 (domestic) and (201) 612-7415 (international). The playback conference ID Number is 10000554. The web-cast may be accessed under the Investor Relations section of our website at www.neogenomics.com or http://www.investorcalendar.com/IC/CEPage.asp?ID=171755. An archive of the web-cast will be available until 11:59 PM on January 23, 2014.

About NeoGenomics, Inc.

NeoGenomics, Inc. is a high-complexity CLIA-certified clinical laboratory that specializes in cancer genetics diagnostic testing, the fastest growing segment of the laboratory industry. The company’s testing services include cytogenetics, fluorescence in-situ hybridization (FISH), flow cytometry, immunohistochemistry, anatomic pathology and molecular genetic testing. Headquartered in Fort Myers, FL, NeoGenomics has labs in Nashville, TN, Irvine, CA, Tampa, FL and Fort Myers, FL. NeoGenomics services the needs of pathologists, oncologists, pharmaceutical firms, other clinicians and hospitals throughout the United States. For additional information about NeoGenomics, visit http://www.neogenomics.com.

Interested parties can also access investor relations material from Hawk Associates at http://www.hawkassociates.com or neogenomics@hawk.com and from Zack’s Investment Research at http://www.zacks.com or scr@zacks.com.

Forward Looking Statements

Except for historical information, all of the statements, expectations and assumptions contained in the foregoing are forward-looking statements. These forward looking statements involve a number of risks and uncertainties that could cause actual future results to differ materially from those anticipated in the forward looking statements, Actual results could differ materially from such statements expressed or implied herein. Factors that might cause such a difference include, among others, the company’s ability to continue gaining new customers, offer new types of tests, and otherwise implement its business plan. As a result, this press release should be read in conjunction with the company’s periodic filings with the SEC.


                                                                    NeoGenomics, Inc.
                                                                    -----------------

                                                          CONDENSED CONSOLIDATED BALANCE SHEETS

                                                                (Unaudited, in thousands)

    ASSETS

                                                                                                September 30,         December 31,

                                                                                                         2013                 2012
    ---                                                                                                  ----                 ----

      Cash, cash equivalents                                                                                   $4,929               $1,868

      Accounts Receivable (net of allowance for doubtful                                                       15,727               14,034

         accounts of $4,355 and $3,002, respectively)

      Other Current Assets                                                                                      3,171                2,679
                                                                                                                -----                -----

    TOTAL CURRENT ASSETS                                                                                       23,827               18,581

    PROPERTY AND EQUIPMENT (net of accumulated                                                                  8,592                8,607

       depreciation of $13,404 and $10,289, respectively)

    INTANGIBLE ASSETS (net of accumulated amortization                                                          2,633                2,800
    of $349 and $182, respectively)

    OTHER ASSETS                                                                                                  178                   83
                                                                                                                  ---

        TOTAL                                                                                                 $35,230              $30,071

    LIABILITIES AND STOCKHOLDERS' EQUITY
    ------------------------------------

    CURRENT LIABILITIES                                                                                       $12,246              $17,758

    LONG TERM LIABILITIES                                                                                       2,657                3,097
                                                                                                                -----                -----

        TOTAL LIABILITIES                                                                                      14,903               20,855

    STOCKHOLDERS' EQUITY                                                                                       20,327                9,216
                                                                                                               ------                -----

       TOTAL                                                                                                  $35,230              $30,071


                                               NeoGenomics, Inc.
                                               -----------------

                                CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

                                   (in thousands, except per share amounts)

                                                  (unaudited)

                                                         For the Three-Months           For the Nine-Months
                                                         Ended September 30,                  Ended

                                                                                        September 30,
                                                                                        -------------

                                                            2013                  2012                 2013            2012
                                                            ----                  ----                 ----            ----

    NET REVENUE                                          $16,884               $14,202              $48,144         $44,973

    COST OF REVENUE

                                                 8,713                 8,310              25,570             24,571
                                                 -----                 -----              ------             ------

    GROSS PROFIT

                                                 8,171                 5,892              22,574             20,402
                                                 -----                 -----              ------             ------

    OPERATING EXPENSES

    General and administrative                             4,335                 3,929               12,573          11,745

    Research and development                                 340                   808                1,791           1,833

    Sales and marketing                                    2,336                 1,839                6,239           5,809
                                                           -----                 -----                -----           -----

       Total operating expenses                            7,011                 6,576               20,603          19,387

    INCOME (LOSS) FROM                                     1,160                  (684)               1,971           1,015

    OPERATIONS

    INTEREST AND OTHER                                      (231)                 (291)                (749)           (837)
    INCOME (EXPENSE) - NET

    INCOME (LOSS) BEFORE                                     929                  (975)               1,222             178
    TAXES

    INCOME TAXES                                    29                     -                  46                  -
                                                   ---                   ---                 ---                ---

    NET INCOME (LOSS)                                       $900                 $(975)              $1,176            $178

    NET INCOME (LOSS) PER                                  $0.02                $(0.02)               $0.02           $0.00
    SHARE

    - Basic

    - Diluted                                              $0.02                $(0.02)               $0.02           $0.00

    WEIGHTED AVG NUMBER                                   48,933                45,175               48,007          44,944

    OF SHARES OUTSTANDING

    - Basic

    - Diluted                                             53,173                45,175               52,599          48,226
                                                          ======                ======               ======          ======



                                   NeoGenomics, Inc.
                                   -----------------

                    CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

                               (Unaudited, in thousands)

                                               For the                  For the

                                                 Nine                    Nine
                                                Months                  Months
                                                Ended                    Ended

                                              September               September
                                               30, 2013                 30, 2012
                                               --------                 --------

    NET CASH PROVIDED BY
     (USED IN) OPERATING
     ACTIVITIES                                               $2,732              $(493)

    NET CASH USED IN INVESTING
     ACTIVITIES                                               (1,486)            (3,300)

    NET CASH PROVIDED BY FINANCING
     ACTIVITIES                                                1,815              3,203
                                                               -----              -----

       NET INCREASE (DECREASE) IN
        CASH AND CASH                                          3,061               (590)
       EQUIVALENTS

    CASH AND CASH EQUIVALENTS,
     BEGINNING OF PERIOD                                       1,868              2,628
                                                               -----              -----

    CASH AND CASH
     EQUIVALENTS, END OF
     PERIOD                                                   $4,929             $2,038

    SUPPLEMENTAL DISCLOSURE OF
     CASH FLOW
    INFORMATION:

    Interest paid                                               $715               $809

        Income taxes paid                                        $19           $      -

     SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND  FINANCING ACTIVITIES:

         Purchase of licenses                         $            -             $1,945
                                                    ===

         Equipment leased
          under capital lease
          and equipment loans                                 $1,815             $2,845



                                                         NeoGenomics, Inc.
                                                         -----------------

                             RECONCILIATION OF GAAP NET INCOME TO NON-GAAP EBITDA AND ADJUSTED EBITDA

                                                     (Unaudited, in thousands)

                                                              For the Three-Months           For the Nine-Months
                                                                                            Ended September 30,
                                                              Ended September 30,
                                                              -------------------

                                                                  2013                 2012                 2013       2012
                                                                  ----                 ----                 ----       ----

    Net income (loss) (Per GAAP)                                  $900                $(975)              $1,176       $178

    Adjustments to Net Income (Loss):

       Interest expense (income), net                              231                  291                  749        837

       Amortization of intangibles                                  56                   56                  168        126

       Income tax expense                                 29                     -                   46            -

       Depreciation                                              1,063                  944                3,114      2,549
                                                                 -----                  ---                -----      -----

     EBITDA                                                      2,279                  316                5,253      3,690

    Further Adjustments to EBITDA:

      Non-recurring costs                                  -                   170                    -          170

      Non-cash stock-based                                        (116)                 356                  530        699

                compensation

     Adjusted EBITDA (non-GAAP)                                 $2,163                 $842               $5,783     $4,559

    Non - GAAP Adjusted EBITDA
     Definition
    --------------------------

    "Adjusted EBITDA" is defined by
     NeoGenomics as net income from
     continuing operations before (i)
     interest expense, (ii) tax
     expense, (iii) depreciation and
     amortization expense, (iv) non-
     cash stock-based compensation and
     warrant amortization expense and
     (v) other extraordinary or non-
     recurring charges.  NeoGenomics
     believes that Adjusted EBITDA
     provides a more consistent
     measurement of operating
     performance and trends across
     reporting periods by excluding
     these cash and non-cash items of
     expense not directly related to
     ongoing operations from income.
     Adjusted EBITDA also assists
     investors in performing analysis
     that is consistent with financial
     models developed by research
     analysts.

    Adjusted EBITDA as defined by
     NeoGenomics is not a measurement
     under GAAP and may differ from
     non-GAAP measures used by other
     companies.  There are limitations
     inherent in non-GAAP financial
     measures such as Adjusted EBITDA
     because they exclude a variety of
     charges and credits that are
     required to be included in a GAAP
     presentation, and do not therefore
     present the full measure of
     NeoGenomics recorded costs against
     its net revenue.  Accordingly,
     investors should consider non-
     GAAP results together with GAAP
     results in analyzing NeoGenomics
     financial performance.


                                                                                  NeoGenomics, Inc.
                                                                                  -----------------

                                                   Supplemental Information on Customer Requisitions Received and Tests Performed

                                                             (Unaudited, in thousands, except test and requisition data)

                                     For the                           For the                                                       For the               For the

                                   Three-Months                      Three-Months                     % Inc                        Nine-Months           Nine-Months          % Inc
                                                                                                      (Dec)                                                                   (Dec)
                                      Ended                             Ended                                                         Ended                 Ended

                                  September 30,                     September 30,                                                 September 30,         September 30,
                                                   2013                                 2012                                                       2013                  2012
                                                   ----                                 ----                                                       ----                  ----

    Requisitions Rec'd (cases)                   21,737                               18,307                  18.7%                              63,216                53,802         17.5%

    Number of Tests Performed                    33,723                               28,315                  19.1%                              98,330                84,093         16.9%

    Avg. # of Tests / Requisition                  1.55                                 1.55                   0.3%                                1.56                  1.56        (0.5)%

    Total Testing Revenue                       $16,884                              $14,202                  18.9%                             $48,144               $44,973          7.0%

    Avg. Revenue/Requisition                       $777                                 $776                   0.1%                                $762                  $836        (8.9)%

    Avg. Revenue/Test                              $501                                 $502                 (0.2)%                                $490                  $535        (8.5)%

    Total Cost of Revenue                        $8,713                               $8,310                   4.8%                             $25,570               $24,571          4.1%

    Avg. Cost/Requisition                          $401                                 $454                (11.7)%                                $404                  $457       (11.6)%

    Avg. Cost/Test                                 $258                                 $293                (11.9)%                                $260                  $292       (11.0)%
    --------------                                 ----                                 ----                ------                                 ----                  ----       ------

SOURCE NeoGenomics, Inc.


Source: PR Newswire