NeoGenomics Reports Revenue of $15.6 Million, Adjusted EBITDA of $1.8 Million and Earnings per share of $0.01 for the Second Quarter 2013 PR Newswire FT. MYERS, Fla., July 31, 2013 FT. MYERS, Fla., July 31, 2013 /PRNewswire/ --NeoGenomics, Inc. (NASDAQ: NEO), a leading provider of cancer-focused genetic testing services today reported its results for the second quarter of 2013. Second Quarter 2013 Highlights: oEarnings per share of $0.01 per share on net income of $273k oAdjusted EBITDA^(1) of $1.8 million oTest volume growth of 12.7% oContinued expansion of industry-leading molecular testing menu Revenue for the second quarter was $15.6 million, essentially unchanged from second quarter 2012 revenue. Test volume increased by 12.7%. Year over year revenue growth was impacted by the $1.3 million reduction in quarterly revenue that resulted from the expiration of the Medicare Technical Component Grandfather Clause (TCGF) in July 2012. Revenue growth was also impacted by decreases in reimbursement for molecular testing which were finalized by CMS in the second quarter. Average revenue per test declined 11.3% from last year, primarily as a result of the TCGF expiration. This decrease was partially offset by a 9.1% improvement in average cost of goods sold per test. As a result, gross profit margin decreased slightly to 45.9% in the second quarter from 47.2% in the prior year. Total operating expenses increased by 1.9%, from last year's second quarter, primarily as a result of increases in R&D expenses. Net income for the quarter was $273,000, or $0.01 per share, versus net income of $551,000, or $0.01 per share, in last year's second quarter. Adjusted EBITDA^(1) of $1.8 million for the quarter was largely unchanged from last year's second quarter despite the approximately $1.6 million reduction in quarterly profit resulting from the TCGF expiration and molecular reimbursement changes. Douglas M. VanOort, the Company's Chairman and CEO commented, "Our quarterly results were adversely impacted by Medicare's molecular reimbursement changes and resulted in approximately $275,000 less revenue than we would have otherwise reported. In addition, approximately $150,000 of expected clinical trials work was delayed into the third quarter. These items reduced revenue from our original expectations for the second quarter." Mr. VanOort continued, "On the positive side, test volume continued to grow with a record number of new clients starting in June. Test volume grew despite a slight increase in in-sourcing of certain tests by a few clients. We also continued to strengthen our Sales team by adding five experienced sales professionals. We now have a total of 26 sales representatives covering the country. We expect our sales productivity to be strong for the second half of the year." "In addition, our steadfast focus on continuously improving laboratory operations and driving down costs is yielding results. A great number of our people are involved in Best Practice Teams, "Kaizen" events, and analysis and implementation of automation initiatives. We have also increased our investment in Information Technology and expect to make significant improvements in electronic ordering and other methods to increase efficiencies. As a result of these initiatives, we drove a 9.1% reduction in average cost-per-test over the last year and maintained gross margins of around 46% despite an 11.3% reduction in average revenue per test. We finished the second quarter with the lowest average cost-per-test we have ever reported." Mr. VanOort concluded, "Innovation continues to be an important focus for NeoGenomics. In the past six quarters, we developed and launched over 60 new molecular tests and now have the most comprehensive oncology-focused molecular test menu in America. Work also continues on our new plasma and urine-based, NeoSCORE^TM prostate cancer test. There are two goals for this test, to diagnose the presence of cancer in patients with BPH (benign prostatic hyperplasia), and to distinguish high-grade from low-grade prostate cancer in patients with prostate cancer. We are excited about the potential for this test and currently expect to launch it in the first half of 2014." Third Quarter and Full-Year 2013 Financial Outlook: We expect revenue of $15.8 - $16.4 million and earnings of $0.00 - $0.01 per share in Quarter 3. For the full year 2013, we expect revenue to be $63-$66 million with earnings per share of $.01 - $.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. Conference Call The Company has scheduled a web-cast and conference call to discuss their second quarter results on July 31, 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 418008. A replay of the conference call will be available until 11:59 PM on August 14, 2013 and can be accessed by dialing (877) 660-6853 (domestic) and (201) 612-7415 (international). The playback Conference ID Number is 418008. 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=171229. An archive of the web-cast will be available until 11:59 PM on October 31, 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. (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. NeoGenomics, Inc. CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited, in thousands) ASSETS June 30, December 31, 2013 2012 Cash, cash equivalents $ 4,636 $ 1,868 Accounts Receivable (net of allowance for doubtful 16,005 14,034 accounts of $4,147 and $3,002, respectively) Other Current Assets 2,522 2,679 TOTAL CURRENT ASSETS 23,163 18,581 PROPERTY AND EQUIPMENT (net of accumulated 8,437 8,607 depreciation of $12,341 and $10,289, respectively) INTANGIBLE ASSETS (net of accumulated amortization 2,689 2,800 of $293 and $182, respectively) OTHER ASSETS 170 83 TOTAL $ 34,459 $ 30,071 LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES $ 12,056 $ 17,758 LONG TERM LIABILITIES 2,963 3,097 TOTAL LIABILITIES 15,019 20,855 STOCKHOLDERS' EQUITY 19,440 9,216 TOTAL $ 34,459 $ 30,071 NeoGenomics, Inc. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except per share amounts) (unaudited) For the Three-Months For the Six-Months Ended Ended June 30, June 30, 2013 2012 2013 2012 NET REVENUE $ 15,603 $ 15,611 $ 31,260 $ 30,771 COST OF REVENUE 8,446 8,244 16,857 16,261 GROSS PROFIT 7,157 7,367 14,403 14,510 OPERATING EXPENSES General and 4,064 4,066 8,239 7,816 administrative Research and 616 528 1,451 1,025 development Sales and marketing 1,972 1,934 3,903 3,969 Total operating 6,652 6,528 13,593 12,810 expenses INCOME FROM 505 839 810 1,700 OPERATIONS INTEREST AND OTHER (232) (288) (517) (546) INCOME (EXPENSE) - NET INCOME BEFORE TAXES 273 551 293 1,154 INCOME TAXES - - 17 - NET INCOME $ 273 $ 551 $ 276 $ 1,154 NET INCOME PER SHARE $ 0.01 $ 0.01 $ 0.01 $ 0.03 - Basic - Diluted $ 0.01 $ 0.01 $ 0.01 $ 0.02 WEIGHTED AVG NUMBER OF SHARES OUTSTANDING 48,793 44,954 47,529 44,827 - Basic - Diluted 53,744 47,650 52,297 47,501 NeoGenomics, Inc. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited, in thousands) For the For the Six Months Ended Six Months Ended June 30, 2012 June 30, 2012 NET CASH PROVIDED BY OPERATING $ 533 $ 16 ACTIVITIES NET CASH USED IN INVESTING ACTIVITIES (608) (2,050) NET CASH PROVIDED BY FINANCING 2,843 1,972 ACTIVITIES NET INCREASE (DECREASE) IN CASH AND CASH 2,768 (62) EQUIVALENTS CASH AND CASH EQUIVALENTS, BEGINNING OF 1,868 2,628 PERIOD CASH AND CASH EQUIVALENTS, END OF PERIOD $ 4,636 $ 2,566 SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: Interest paid $ 495 $ 529 Income taxes paid $ 17 $ - SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES: Purchase of licenses $ - $ 1,945 Equipment leased under capital $ 1,402 $ 2,140 lease and equipment loans NeoGenomics, Inc. RECONCILIATION OF GAAP NET INCOME TO NON-GAAP EBITDA AND ADJUSTED EBITDA (Unaudited, in thousands) For the Three-Months Ended For the Six-Months Ended June 30, June 30, 2013 2012 2013 2012 Net income (Per $ 273 $ 551 $ 276 $ 1,154 GAAP) Adjustments to Net Income: Interest expense 232 288 517 546 (income), net Amortization of 55 56 111 70 intangibles Income tax - - 17 - expense Depreciation 1,063 856 2,052 1,605 EBITDA 1,623 1,751 2,973 3,375 Further Adjustments to EBITDA: Non-cash stock-based 202 192 646 343 compensation Adjusted EBITDA $ 1,825 $ 1,943 $ 3,619 $ 3,718 (non-GAAP) 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 Six-Months Six-Months Ended Ended % Inc % Inc (Dec) Ended Ended (Dec) June 30, June 30, 2012 2013 June 30, June 30, 2013 2012 Requisitions Rec'd 20,875 18,561 12.5% 41,479 35,495 16.9% (cases) Number of Tests 32,519 28,846 12.7% 64,607 55,778 15.8% Performed Avg. # of Tests / 1.56 1.55 0.2% 1.56 1.57 (0.9)% Requisition Total Testing $ 15,603 $ 15,611 (0.1)% $ 31,260 $ 30,771 1.6% Revenue Avg. $ 747 $ 841 (11.1)% $ 754 $ 867 (13.1)% Revenue/Requisition Avg. Revenue/Test $ 480 $ 541 (11.3)% $ 484 $ 552 (12.3)% Total Cost of $ 8,446 $ 8,244 (2.5)% $ 16,857 $ 16,261 3.7% Revenue Avg. $ 405 $ 444 (8.9)% $ 406 $ 458 (11.4)% Cost/Requisition Avg. Cost/Test $ 260 $ 286 (9.1)% $ 261 $ 292 (10.6)% 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 Revenue of $15.6 Million, Adjusted EBITDA of $1.8 Million and Earnings per share of $0.01 for the Second
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