Full Press Release Details
To improve patient care through exceptional
cancer genetic diagnostic services
By delivering uncompromising quality, exceptional service
solutions, we are becoming
America s premier cancer testing laboratory.
Accountability Teamwork
Employee, Customer & Results Focused
| (in thousands, except for tests and percentages) | FY 2012 | FY 2011 | FY 2010 | |||||||||
| Total Revenue | $ | 59,867 | $ | 43,484 | $ | 34,371 | ||||||
| % Revenue Growth | 37.7 | % | 26.5 | % | 16.6 | % | ||||||
| Total Gross Profit | $ | 26,836 | $ | 19,428 | $ | 15,783 | ||||||
| Gross Profit % | 44.8 | % | 44.7 | % | 45.9 | % | ||||||
| Net Income (loss) | $ | 65 | $ | (1,177 | ) | $ | (3,303 | ) | ||||
| Adjusted EBITDA (1) | $ | 5,997 | $ | 2,134 | $ | (566 | ) | |||||
| % Growth | 181.0 | % | NA | |||||||||
| Tests | 114,606 | 76,288 | 57,332 | |||||||||
| % Test Growth | 50.2 | % | 33.1 | % | 25.5 | % |
Dear Fellow Shareholders:
From a start-up lab only 10 years ago, NeoGenomics today is a NASDAQ listed, national leader in cancer genetics testing. We have a bold Vision to become America s premier cancer testing laboratory,
and in 2012 we made significant strides in achieving that Vision.
Key 2012 Highlights:
There are a number of key focus areas for NeoGenomics, and our people are aligned to drive extraordinary success. We made
strong progress in each of these areas, and have exciting plans in place.
We grew revenue by over $16 million during 2012, and have been told that we are the fastest growing publically traded laboratory in the
country. That growth was driven by a combination of important achievements:
The foundation of our growth strategy is to establish partnerships with Pathology practices and Hospitals across the
country. We are committed to helping these clients grow and prosper in their local markets. We leverage our comprehensive test menus and client-focused Information systems to create a One-Stop-Shop capability and provide for all their
cancer genetic testing needs.
Looking forward, we expect to continue to grow at a rate faster than the market. Among our key objectives are:
We took innovation at NeoGenomics to a new level in 2012. Driven by strong Medical and R&D teams, our company made significant accomplishments, which include:
We believe that relentless innovation is important in this age of revolutionary change in molecular diagnostics. We are
continuing to invest in innovation and are beginning to add some proprietary products to our new product pipeline. During 2013, you will see a number of additions to the NeoGenomics test portfolio:
Finally, we are continuing our development of a proprietary test for prostate cancer based on plasma and urine. The early results are promising but there is still much work to be done.
We believe in high-quality
and low-cost processes, and we work very hard to continuously improve everything we do at NeoGenomics. To accomplish this, we are making significant investments in quality management, process management, lab automation, information technology, and
In 2012, we executed initiatives to drive substantial improvements in productivity and lower our cost structure, which enabled
Over the past three years, we have made tremendous progress in increasing our productivity.
Our best practice teams continue to work on improving our processes. We are implementing Lean Process
initiatives, bar coding and scanning technology, new and improved instrumentation to further automate our laboratories, and new IT enhancements that will help us process work more effectively and efficiently.
Industry Dynamics and Economic Environment
As many of you know, in 2012 we encountered a significant challenge. On July 1st of 2012, legislation went into effect that changed a decades old billing practice. Referred to as the expiration of
the TC-Grandfather Clause , the change resulted in us having to bill Hospitals for many tests that were previously billed to Medicare directly. The change reduced revenue and profit by approximately $2.6 million during the second half of
NeoGenomics took a leadership role in communicating the change and helping our clients understand and get through the transition.
Unfortunately, the change also caused distraction to our sales force and took them away from their important role of growing our company. However, even in the face of this enormous regulatory challenge, we continued to grow and reported our first
full year of profitability in our history.
Looking ahead, we expect governmental pressure to continue and to present the entire laboratory
industry with reimbursement challenges. In this challenging macroeconomic environment, we continue to take decisive actions to mitigate headwinds and prepare for future growth. We are trying to do our part, as good corporate citizens, to usher in
the era and promise of personalized medicine, and to help improve health care in America.
In summary, we are making good progress building
and developing our company. Our key laboratory disciplines in Cytogenetics, FISH, Flow Cytometry, IHC and Molecular testing are among the very best in America. Our investments in R&D are positioning us to drive growth in future periods. Our
quality and service levels are strong. And our people are dedicated and committed to living our Values and achieving our Vision.
excited about the future for NeoGenomics.
Thank you for your support!
Chairman and Chief Executive Officer