NeoGenomics Reports Record Quarterly Revenue of $15.7 Million, Adjusted EBITDA of $1.8 Million and 46.3% Gross Margin for the First Quarter Successfully completes $10 Million Equity Raise PR Newswire FT. MYERS, Fla., April 25, 2013 FT. MYERS, Fla., April 25, 2013 /PRNewswire/ --NeoGenomics, Inc. (NASDAQ: NEO), a leading provider of cancer-focused genetic testing services today reported its results for the first quarter of 2013. First Quarter 2013 Highlights: oTest Volume Growth of 19% oRecord Quarterly Revenue of $15.7 Million oAdjusted EBITDA^(1) of $1.8 Million oSequential Improvement in Gross Margin to 46.3% oSuccessful Completion of $10 Million Equity Raise Revenue for the first quarter was $15.7 million, a 3%, increase over first quarter 2012 revenue on test volume growth of 19%. Revenue growth was achieved despite the $1.3 million reduction in quarterly revenue from the expiration of the Medicare Technical Component Grandfather Clause (TCGF) in July 2012 and two fewer reporting days than in last year's first quarter. Both of these factors negatively impact year-over-year comparisons. Gross margin declined to 46.3% from 47.1% in last year's first quarter, but increased by over 300 basis points from the fourth quarter of 2012. Average revenue-per-test decreased by 13% from Quarter 1 2012, primarily as a result of the TCGF expiration, but was unchanged from last quarter. Average cost-per-test improved by 12% from the first quarter of 2012 and 5% from Quarter 4 2012. Operating expenses increased by 10% to $6.9 million from $6.3 million in Quarter 1 of last year. This increase was driven by additional investments to increase sales staff and for new test development activities. In addition, the Company recognized $289,000 of additional variable stock-based compensation expense in the first quarter as a result of the 58% increase in the Company's stock price over the quarter. Adjusted EBITDA of $1.8 million for the quarter was largely unchanged from last year's first quarter as a result of the $1.3 million reduction in quarterly revenues from the TCGF expiration and higher depreciation and stock-based compensation expense. Net income was $3,000 or $0.00/share versus $603,000 or $0.01/share in Quarter 1 last year. Douglas M. VanOort, the Company's Chairman and CEO, commented, "We made solid progress in the first quarter. Revenue was at a record level, despite having fewer revenue days and significant Medicare reimbursement changes as compared to last year. Our 19% test volume growth demonstrates that we continue to gain market share. We are also pleased to have completed a stock offering that resulted in gross proceeds of $10 million to the Company. The offering was well-received with 39 institutional investors participating, most of whom were new investors to the Company." Mr. VanOort continued, "Over the last year, we have faced a challenging macroeconomic environment and encountered significant reimbursement pressures. Fortunately, we have been working hard to execute process improvements and to prepare for future growth. Our Best Practice Teams are making outstanding progress driving productivity up and costs down. The average number of tests completed per lab FTE increased by 6% from last year and is now at its highest level ever. As a result of these initiatives, our gross margin is back above 46%, despite the 13% year over year decrease in unit prices." Mr. VanOort continued "During the first quarter, we also expanded our sales force to improve our geographic coverage and to optimize the capabilities of our new and expanded California laboratory. Our high-complexity testing services require an investment in sales training and market development, and we are optimistic about the intermediate to longer term payback from these sales investments." Mr. VanOort concluded by saying, "Innovation remains a focus area for us again in 2013. We launched 17 new molecular tests, two new molecular disease profiles, and five new or modified FISH tests in the first quarter. In just 18 months, our Medical team has distinguished NeoGenomics in the marketplace by building one of the most comprehensive Molecular testing menus in the United States When combined with our FISH, flow cytometry, digital pathology, and other advanced testing services, NeoGenomics' molecular test offerings are helping clients answer questions about even the most difficult cancer cases they encounter. We believe these innovations will continue to fuel our growth." Second Quarter 2013 Financial Outlook The Company also issued guidance for the fiscal second quarter today. In Quarter 2, the Company expects revenue of $15.8 - $16.4 million and net income of $0.00 to $0.01 per share. This guidance is based on organic growth in the current business, and 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, 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 Q1 2013 results on April 25, 2013 at 11:00 AM EDT. Interested investors should dial (877) 407-8033 (domestic) and (201) 689-8033 (international) at least five minutes prior to the call and ask for Conference ID Number 412952. A replay of the conference call will be available until 11:59 PM on May 9, 2013 and can be accessed by dialing (877) 660-6853 (domestic) and (201) 612-7415 (international). The playback Conference ID Number is 412952. 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=170897. An archive of the web-cast will be available until 11:59 PM EST on July 25, 2013. 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, 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 firstname.lastname@example.org and from Zack's Investment Research at http://www.zacks.com or email@example.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) March 31, December 31, ASSETS 2013 2012 Cash, cash equivalents $ 4,628 $ 1,868 Accounts Receivable (net of allowance for doubtful 15,628 14,034 accounts of $3,615 and $3,002, respectively) Other Current Assets 2,487 2,679 TOTAL CURRENT ASSETS 22,743 18,581 PROPERTY AND EQUIPMENT (net of accumulated 8,045 8,607 depreciation of $11,279 and $10,289, respectively) INTANGIBLE ASSETS (net of accumulated amortization 2,744 2,800 of $238 and $182, respectively) OTHER ASSETS 84 83 TOTAL $ 33,616 $ 30,071 LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES $ 11,949 $ 17,758 LONG TERM LIABILITIES 2,837 3,097 TOTAL LIABILITIES 14,786 20,855 STOCKHOLDERS' EQUITY 18,830 9,216 TOTAL $ 33,616 $ 30,071 NeoGenomics, Inc. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited, in thousands, except per share data) For the For the Three Three Months Months Ended Ended March 31, March 31, 2013 2012 REVENUE $ 15,657 $ 15,160 COST OF REVENUE 8,411 8,016 GROSS PROFIT 7,246 7,144 OPERATING EXPENSES: General and administrative 4,175 3,750 Research and development 835 497 Sales and marketing 1,931 2,036 Total operating expenses 6,941 6,283 INCOME FROM OPERATIONS 305 861 INTEREST AND OTHER INCOME (EXPENSE) - NET (285) (258) INCOME BEFORE INCOME TAXES 20 603 INCOME TAXES 17 - NET INCOME $ 3 $ 603 NET INCOME PER SHARE - Basic $ 0.00 $ 0.01 - Diluted $ 0.00 $ 0.01 WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING – 46,624 44,697 - Basic - Diluted 50,923 47,424 NeoGenomics, Inc. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited, in thousands) For the For the Three Three Months Months Ended Ended March 31, March 31, 2013 2012 NET CASH USED IN OPERATING ACTIVITIES $ (1,330) $ (1,065) NET CASH USED IN INVESTING ACTIVITIES (239) (1,314) NET CASH PROVIDED BY FINANCING ACTIVITIES 4,329 2,507 NET INCREASE IN CASH AND CASH EQUIVALENTS 2,760 128 CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 1,868 2,628 CASH AND CASH EQUIVALENTS, END OF PERIOD $ 4,628 $ 2,756 SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: Interest paid $ 274 $ 250 Income taxes paid $ 17 $ - SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES: Purchase of licenses $ - $ 1,945 Equipment leased under capital lease and $ 381 $ 1,174 equipment loans NeoGenomics, Inc. RECONCILIATION OF GAAP NET INCOME (LOSS) TO NON-GAAP EBITDA AND ADJUSTED EBITDA (Unaudited, in thousands) For the Three Months Ended March 31, 2013 2012 Net income $ 3 $ 603 Adjustments to Net Income: Interest expense (income), net 285 258 Amortization of intangibles 55 14 Depreciation 990 749 Income taxes 17 - EBITDA 1,350 1,624 Further Adjustments to EBITDA: Non-cash stock-based compensation 444 151 Adjusted EBITDA $ 1,794 $ 1,775 Non – GAAP Adjusted EBITDA Definition "Adjusted EBITDA" is defined by NeoGenomics as net income (loss) from continuing operations before (i) interest expense, (ii) tax expense and therapeutic discovery tax grants, (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 Three Three Months Months Ended Ended % Increase March 31, March 31, (Decrease) 2013 2012 Requisitions Received 20,604 16,934 21.7% Number of Tests Performed 32,088 26,932 19.1% Avg. # of Tests / Requisition 1.56 1.59 (2.1)% Total Testing Revenue $15,657 $15,160 3.3% Avg. Revenue/Requisition $ 760 $ 895 (15.1)% Avg. Revenue/Test $ 488 $ 562 (13.3)% Total Cost of Revenue $8,411 $8,016 4.9% Avg. Cost/Requisition $408 $473 (13.7)% Avg. Cost/Test $262 $298 (12.1)% SOURCE NeoGenomics, Inc. Website: http://www.neogenomics.org Contact: NeoGenomics, Inc. , Steven C. Jones, Director of Investor Relations, (239) 325-2001, firstname.lastname@example.org, or Hawk Associates, Inc. Ms. Julie Marshall, (305) 451-1888, email@example.com
NeoGenomics Reports Record Quarterly Revenue of $15.7 Million, Adjusted EBITDA of $1.8 Million and 46.3% Gross Margin for the
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