Form: 8-K

Current report filing

October 23, 2013

EXHIBIT 99.1

 

LOGO

NEOGENOMICS, INC.

PRESS RELEASE

FOR IMMEDIATE RELEASE

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

Ft. Myers, Florida – October 23, 2013 – 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.”

 

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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.

 

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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.

For further information, please contact:

 

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   

 

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NeoGenomics, Inc.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited, in thousands)

 

     September 30,
2013
     December 31,
2012
 

ASSETS

     

Cash, cash equivalents

   $ 4,929       $ 1,868   

Accounts Receivable (net of allowance for doubtful accounts of $4,355 and $3,002, respectively)

     15,727         14,034   

Other Current Assets

     3,171         2,679   
  

 

 

    

 

 

 

TOTAL CURRENT ASSETS

     23,827         18,581   

PROPERTY AND EQUIPMENT (net of accumulated depreciation of $13,404 and $10,289, respectively)

     8,592         8,607   

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

     2,633         2,800   

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   
  

 

 

    

 

 

 

 

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NeoGenomics, Inc.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share amounts)

(unaudited)

 

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

     1,160        (684     1,971        1,015   
  

 

 

   

 

 

   

 

 

   

 

 

 

INTEREST AND OTHER INCOME (EXPENSE) – NET

     (231     (291     (749     (837
  

 

 

   

 

 

   

 

 

   

 

 

 

INCOME (LOSS) BEFORE TAXES

     929        (975     1,222        178   

INCOME TAXES

     29        —          46        —     
  

 

 

   

 

 

   

 

 

   

 

 

 

NET INCOME (LOSS)

   $ 900      $ (975   $ 1,176      $ 178   
  

 

 

   

 

 

   

 

 

   

 

 

 

NET INCOME (LOSS) PER SHARE

        

- Basic

   $ 0.02      $ (0.02   $ 0.02      $ 0.00   
  

 

 

   

 

 

   

 

 

   

 

 

 

- Diluted

   $ 0.02      $ (0.02   $ 0.02      $ 0.00   
  

 

 

   

 

 

   

 

 

   

 

 

 

WEIGHTED AVG NUMBER OF SHARES OUTSTANDING

        

- Basic

     48,933        45,175        48,007        44,944   
  

 

 

   

 

 

   

 

 

   

 

 

 

- Diluted

     53,173        45,175        52,599        48,226   
  

 

 

   

 

 

   

 

 

   

 

 

 

 

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NeoGenomics, Inc.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited, in thousands)

 

     For the
Nine Months Ended
September 30, 2013
    For the
Nine Months Ended
September 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 EQUIVALENTS

     3,061        (590

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   
  

 

 

   

 

 

 

 

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NeoGenomics, Inc.

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

(Unaudited, in thousands)

 

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

     (116     356        530         699   
  

 

 

   

 

 

   

 

 

    

 

 

 

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.

 

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NeoGenomics, Inc.

Supplemental Information on Customer Requisitions Received and Tests Performed

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

 

     For the
Three-Months Ended
September 30, 2013
     For the
Three-Months Ended
September 30, 2012
     % Inc
(Dec)
    For the
Nine-Months Ended
September 30, 2013
     For the
Nine-Months Ended
September 30, 2012
     % Inc
(Dec)
 

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 )% 

 

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