FT. MYERS, Fla., Feb. 16, 2012 /PRNewswire/ -- NeoGenomics, Inc. (NASD OTC BB: NGNM),a leading provider of cancer-focused genetic testing services today reported its results for the fourth quarter and full year 2011.
Fourth Quarter 2011 Highlights:
- 57% test volume growth
- 47% revenue growth
- Adjusted EBITDA(1) of $1.1 million versus $29,000 in Q4 2010
- Net income of $152,000 versus a net loss of ($377,000) in Q4 2010
- Incremental operating profit of $938,000, or 23% of the $4.1 million year-over-year revenue increase
Revenue for the fourth quarter 2011 was $12.9 million, a $4.1 million, or 47% increase over fourth quarter 2010 revenue of $8.8 million. Test volume increased by 57% and average revenue per test declined by 6%. Average cost of goods sold per test for the quarter improved by 7% from last year, offsetting the reduction in average revenue per test. As a result, gross margin improved to 45.2% in 2011 from 44.6% in 2010. Requisitions increased by 48% and the average number of tests per case increased by 6%.
Selling, general and administrative (SG&A) expenses increased by $1.0 million, or 22%, from last year's fourth quarter due primarily to an increase in payroll and bad debt expense. SG&A as a percentage of revenue fell to 42.3% from 51.0% last year. Total other expense increased by approximately $400,000 in the fourth quarter 2011 due to a one-time $374,000 Therapeutic Discovery Grant that was recorded in other income in the fourth quarter of 2010.
Net income for the quarter was $152,000 or $0.00/share versus a net loss of ($377,000) or ($0.01)/share in last year's fourth quarter. Adjusted EBITDA increased by over $1.0 million to $1.1 million from $29,000 last year.
For the full year 2011, revenue was $43.5 million, a $9.1 million, or 27% increase over 2010 revenue of $34.4 million. Test volume increased by 33% and average revenue per test decreased by 5%. Gross margin fell to 44.7% in 2011 from 45.9% in 2010 due primarily to the full year decrease in average revenue per test. SG&A expenses increased by $1.1 million, or 6%, in 2011. As a percentage of revenue, SG&A expenses fell to 45.6% in 2011 from 54.5% in 2010. Net loss in 2011 was ($1.2) million or ($0.03)/share versus a net loss of ($3.3) million or ($0.09)/share in 2010. Adjusted EBITDA for the year increased by $2.7 million to $2.1 million from ($566,000) in 2010.
Douglas M. VanOort, the Company's Chairman and CEO, commented, "We are very pleased with our Quarter 4 results. For the third quarter in a row we posted the largest year-over-year and sequential quarterly increases in revenue in our corporate history, and our revenue growth rate continued to accelerate throughout the quarter. Our sales teams were also more productive, as we achieved excellent revenue growth while keeping sales and marketing costs essentially unchanged from Quarter 4 last year. The improved operating leverage from our SG&A expenses allowed us to return to profitability."
Mr. VanOort continued, "Our performance improved steadily throughout the year with revenue growth rates and gross margin increasing sequentially in each of the four quarters of 2011. Although average revenue per test declined in 2011, we were able to offset most of that impact with increases in productivity. We also maintained tight cost control throughout 2011. SG&A expense for the full year increased only slightly from 2010, and nearly half of the increase was for normal bad debt expense associated with the strong increase in revenue."
Mr. VanOort concluded, "We believe we are well positioned for continued success. Our current sales pipeline is healthy, and we plan to launch several new sales and marketing initiatives to expand our strategic partnerships with large clients. We also expect a stable reimbursement environment this year, which should allow us to make further improvements in gross margin and profitability. In addition, we plan to significantly expand our molecular and immunohistochemistry test menus, launch the second test under our agreement with Abbott Molecular, and make important investments to begin developing the technology and tests we licensed from Health Discovery Corp."
2012 Financial Outlook
The Company also issued preliminary guidance for the full year and fiscal first quarter of 2012 today. For the full year 2012, the Company expects revenue of $54 - $59 million and net income of $0.02 - $0.04 per share. For the fiscal first quarter, the Company expects revenue of $13.5 - $14.0 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 these fourth quarter and full year 2011 results later this morning at 11:00 AM EST. Interested investors should dial (877) 407-8035 (domestic) and (201) 689-8035 (international) at least five minutes prior to the call. A replay of the conference call will be available until 11:59 PM on March 3, 2012 and can be accessed by dialing (877) 660-6853 (domestic) and (201) 612-7415 (international). The playback account number is 388394 and the playback conference ID Number/PIN Number is 286. The web-cast may be accessed under the Investor Relations section of our website at http://www.neogenomics.comor http://www.investorcalendar.com/IC/CEPage.asp?ID=167312. An archive of the web-cast will be available until 11:59 PM EDT on May 16, 2012.
About NeoGenomics, Inc.
NeoGenomics, Inc. is a high-complexity CLIAcertified 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.