Full Press Release Details
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
Ft. Myers, Florida April 25, 2013 NeoGenomics, Inc. (NASDAQ: NEO), a leading provider of cancer-focused genetic testing services today reported its results for the first quarter
First Quarter 2013 Highlights:
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
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.
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.
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 neogenomics@hawk.com and from Zack s Investment Research at
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.
For further information,
| NeoGenomics, Inc. | Hawk Associates, Inc. | |||
| Steven C. Jones | Ms. Julie Marshall | |||
| Director of Investor Relations | (305) 451-1888 | |||
| (239) 325-2001 | neogenomics@hawkassociates.com | |||
| sjones@neogenomics.com |
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited, in thousands)
| ASSETS | March 31, 2013 | December 31, 2012 | ||||||
| Cash, cash equivalents | $ | 4,628 | $ | 1,868 | ||||
| Accounts Receivable ( net of allowance for doubtful accounts of $3,615 and $3,002, respectively) | 15,628 | 14,034 | ||||||
| Other Current Assets | 2,487 | 2,679 | ||||||
| TOTAL CURRENT ASSETS | 22,743 | 18,581 | ||||||
| PROPERTY AND EQUIPMENT (net of accumulated depreciation of $11,279 and $10,289, respectively) | 8,045 | 8,607 | ||||||
| INTANGIBLE ASSETS (net of accumulated amortization of $238 and $182, respectively) | 2,744 | 2,800 | ||||||
| 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 |
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited, in thousands, except per share data)
| For the Three Months Ended March 31, 2013 | For the Three Months Ended March 31, 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 | ||||||||
| - Basic | 46,624 | 44,697 | ||||||
| - Diluted | 50,923 | 47,424 |
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited, in thousands)
| For the Three Months Ended March 31, 2013 | For the Three Months Ended March 31, 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 equipment loans | $ | 381 | $ | 1,174 |
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.
Supplemental Information on Customer Requisitions Received and Tests Performed
(Unaudited, in thousands, except test and requisition data)
| For the Three Months Ended March 31, 2013 | For the Three Months Ended March 31, 2012 | % Increase (Decrease) | ||||||||||
| 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 | )% |