FT. MYERS, Fla., July 18 /PRNewswire-FirstCall/ -- NeoGenomics, Inc. today announced its results for the second quarter of fiscal year 2006. Significant accomplishments during the second quarter included the following:
2nd Quarter 2006 Accomplishments: -- 413% year-over-year increase in revenues in Q2 ’06 vs. Q2 ’05 -- 32% sequential increase in revenues in Q2 ’06 vs. Q1 ’06 -- 52% sequential increase in net income in Q2 ’06 vs. Q1 ’06 -- Increased gross margin to 59% in Q2 ’06, compared to 57% in Q1 ’06 and 47% in Q2 ’05 -- 41% of cases ordered more than one test per case in Q2 ’06 vs. 30% in Q2 ’05 -- Achieved positive Cash Flow from Operating Activities -- Tripled staff at our Nashville, TN location and signed lease on a new laboratory facility
President and Chief Scientific Officer Robert Gasparini said, “I am excited with the progress we continue to make and am especially pleased with the economies of scale we achieved during the second quarter. Even with the added expenses of our recently acquired Nashville, TN operation, we were able to increase our gross margin to approximately 59% of revenue in the second quarter from 57% in the first quarter of FY 2006 and 47% in the second quarter of FY 2005. The fact that our net income for the quarter grew faster than our revenue on a sequential basis shows the operating leverage and inherent strength of our business model.”
Mr. Gasparini went on to say, “We are also very pleased with the results from our Nashville, TN operation. It has been accretive to our bottom-line since the first day of becoming a NeoGenomics operation, and we have already tripled our staff there. In fact, we recently signed a lease for a new laboratory facility in Nashville and we are a month away from completing the build out of this facility. We believe this new facility will allow us to even more rapidly scale operations in that area of the country. In addition to Nashville, we continue to look at additional acquisitions and setting up laboratory locations in other new geographies in order to take advantage of the many opportunities in this rapidly growing industry.”
Acting Principal Financial Officer Steven Jones said, “During the second quarter, the Company increased revenues by approximately 413% on a year-over- year basis to $1,767,000 from $345,000 in Q2 ’05. This increase was largely a result of a 353% increase in the number of tests performed as well as a 13% increase in our average revenue per test during this period. Our requisitions increased 317% to 2,472 in Q2 ’06 from 593 requisitions in Q2 ’05 The fact that total revenue continues to grow faster than the number of requisitions highlights the operating leverage we achieve by performing an increasing number of tests on each requisition received. During the second quarter, the number of requisitions in which more than one test was ordered increased to approximately 41% of all requisitions from approximately 30% during Q2 05. This drove an increase in our average revenue per requisition of approximately 23% to $715.00 in Q2 ’06, versus $581.60 during the 2nd quarter of 2005.”
“Further highlighting our economies of scale is the fact that gross profit grew 541% on a year-over-year basis from Q2 ’05 to Q2 ’06, whereas selling, general and administrative expenses increased by only 175% during this period. As a result of these factors, our net income increased by approximately $342,000 to approximately $161,000 in Q2 ’06 from a net loss of $181,000 in Q2 ’05. This resulted in earnings per basic and diluted share of approximately $0.01 during the second quarter of FY 2006 versus a loss per basic and diluted share of approximately $0.01 during the second quarter of FY 2005.”
“I am also pleased to report that during the second quarter, we achieved the all important milestone of positive Cash Flow from Operating Activities. Although it was only positive by approximately $22,000 for the second quarter and it is still negative on a year to date basis, we are extremely proud to have achieved positive Cash Flow from Operating Activities while continuing to grow the top line as fast as we have. Moving forward, although we are hopeful that we can maintain positive Cash Flow from Operating Activities, this metric may turn negative from time to time as we invest in some of the many growth opportunities we are currently evaluating,” Jones said.
Mr. Jones finished by stating, “Given the continued strength of our business, it appears likely that we will exceed the upper end of the guidance we released on March 14, 2006. Thus, at the present time we are increasing our guidance for FY 2006 as follows. We now believe that we can achieve FY 2006 revenues of approximately $6.0 - $7.0 million, which is a 16.6% - 20% increase from the previous guidance. We also believe that we can achieve FY 2006 net income of approximately $500,000 - $600,000, which is an increase of 20% - 25% from the previous guidance. Of course, we reserve the right to adjust this guidance at any time based on the ongoing execution of our business plan, and by no means should these estimates be construed as a guarantee of future performance. With respect to FY 2007, we are continuing to evaluate our previously issued guidance in light of additional growth opportunities we are contemplating, and we anticipate releasing updated FY 2007 guidance later this year.”
The Company has scheduled a web-cast and conference call to discuss these results on Wednesday July 19, 2006, at 4:15 PM ET. Interested investors should dial 1-877-407-0778 (domestic) and 1-201-689-8565 (international) at least five minutes prior to the call. A replay of the conference call will be available for two weeks and can be accessed by dialing 1-877-660-6853 (domestic) and 1-201-612-7415 (international). The playback account number will be 286 and the playback pin number is 208851. The web-cast may be accessed under the Investor Relations section of the NeoGenomics website at http://www.neogenomics.org. An archive of the web-cast will be available until 4:15 p.m. ET on October 20, 2006.
About NeoGenomics, Inc.
NeoGenomics, Inc. is a high-complexity CLIA-certified clinical laboratory that offers cancer genetic diagnostic testing services including cytogenetics, fluorescence in-situ hybridization (FISH), flow cytometry and molecular genetic testing. NeoGenomics is headquartered in Fort Myers, Fla., and services the needs of oncologists, pathologists, urologists, hospitals and other reference laboratories not offering genetic testing throughout the United States. For additional information about NeoGenomics, visit http://www.neogenomics.org. Interested parties can also access additional investor relations material, including an in-depth equity research report, from the American Microcap Institute at http://www.americanmicrocapinstitute.com/ngnm/ or from Hawk Associates at http://www.hawkassociates.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, including, but not limited to, the Company has incurred significant losses since its inception and has experienced negative operating margins and negative cash flows from operations, any adverse effect or limitations caused by governmental regulations, the company’s ability to attract and retain qualified personnel, to initiate and develop client relationships, to gain market acceptance of service offerings, as well as other risks described from time to time in the company’s filings with the Securities and Exchange Commission. Although the Company has used its best efforts to be accurate in making those forward-looking statements, there can be no assurance that the assumptions made by management will materialize. In addition, the information set forth in the Company’s Form 10-KSB for the fiscal year ended December 31, 2005 describe certain additional risks and uncertainties that could cause actual results to vary materially from the future results covered in such forward-looking statements. The company undertakes no obligation to publicly revise or update the forward-looking statements to reflect new information, subsequent events or otherwise.
NeoGenomics, Inc. CONSOLIDATED BALANCE SHEET AS OF June 30, 2006 (Unaudited) ASSETS CURRENT ASSETS: Cash and cash equivalents $274,353 Accounts receivable (net of allowance for doubtful accounts of $51,555) 1,032,674 Inventories 76,299 Other current assets 81,665 Total current assets 1,464,991 PROPERTY AND EQUIPMENT (net of accumulated depreciation of $354,939) 839,225 OTHER ASSETS 19,186 TOTAL $2,323,402 LIABILITIES AND STOCKHOLDERS’ DEFICIT CURRENT LIABILITIES: Accounts payable $433,021 Deferred revenue 89,970 Short-term portion of equipment lease and notes payable 83,670 Accrued compensation 112,397 Accrued and other liabilities 69,019 Total current liabilities 788,077 LONG TERM LIABILITIES: Line of credit (net of unamortized discount of $66,228) 1,533,772 Long-term portion of equipment lease 106,065 Total long term liabilities 1,639,837 TOTAL LIABILITIES 2,427,914 STOCKHOLDERS’ DEFICIT: Common stock, $.001 par value, 100,000,000 shares authorized; 26,328,365 shares issued and outstanding 26,328 Additional paid-in capital 10,700,948 Deferred Stock Compensation (79,078) Accumulated deficit (10,752,710) Total stockholders’ deficit (104,512) TOTAL $2,323,402 NeoGenomics, Inc. CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) For the For the For the For the Six-Months Six-Months Three-Months Three-Months Ended Ended Ended Ended June 30, June 30, June 30, June 30, 2006 2005 2006 2005 REVENUE $3,111,292 $575,080 $1,767,492 $344,888 COST OF REVENUE 1,302,614 347,005 725,816 182,391 GROSS PROFIT 1,808,678 228,075 1,041,676 162,497 OTHER OPERATING EXPENSES: Selling, general and administrative 1,392,784 545,401 802,100 291,831 Interest expense 148,206 79,205 78,321 52,024 Total other operating expenses 1,540,990 624,606 880,421 343,855 NET INCOME (LOSS) $267,688 $(396,531) $161,255 $(181,358) NET INCOME (LOSS) PER SHARE: Basic $0.01 $(0.02) $0.01 $(0.01) Diluted $0.01 $(0.02) $0.01 $(0.01) WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING: Basic 25,531,132 21,952,046 26,301,619 22,157,538 Diluted 27,951,298 21,952,046 29,709,673 22,157,538 NeoGenomics, Inc. CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) For the For the Six-Months Six-Months Ended Ended June 30, June 30, 2006 2005 CASH FLOWS FROM OPERATING ACTIVITIES: Net income (loss) $267,688 $(396,531) Adjustments to reconcile net income (loss) to net cash used in operating activities: Depreciation 93,629 55,688 Equity-based compensation 50,620 59,840 Provision for bad debts 143,058 30,077 Amortization of debt issue costs 10,717 7,275 Amortization of relocation expenses 23,316 - Changes in assets and liabilities, net: Accounts receivables, net of write-offs (624,633) (251,963) Inventory (16,299) (15,251) Pre-paid expenses (46,472) 5,765 Other current assets - 3,474 Deposits (11,907) 1,500 Accounts payable and other liabilities (145,442) (13,086) NET CASH USED IN OPERATING ACTIVITIES (255,725) (513,212) CASH FLOWS FROM INVESTING ACTIVITIES - Purchases of property and equipment (238,662) (75,708) CASH FLOWS USED IN FINANCING ACTIVITIES: Advances from affiliates, net 100,000 390,451 Issuance of notes payables 61,100 (53,587) Issuances of common stock, net of transaction expenses 596,696 160,766 NET CASH PROVIDED BY FINANCING ACTIVITIES 757,796 497,630 NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 263,409 (91,290) CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 10,944 112,548 CASH AND CASH EQUIVALENTS, END OF PERIOD $274,353 $21,258 SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: Interest paid $106,627 $51,309 Income taxes paid $- $- SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES: Equipment leased under capital lease 128,635 - NeoGenomics, Inc.
Supplemental Information on Customer Requisitions Received and Tests Performed
For the For the For the For the Six- Six- Three- Three- Months Months Months Months Ended Ended Ended Ended June 30, June 30, %Inc June 30, June 30, %Inc 2006 2005 (Dec) 2006 2005 (Dec) Requisitions Received (cases) 4,420 970 355.7% 2,472 593 316.9% Number of Tests Performed 6,139 1,235 397.1% 3,475 768 352.5% Avg. # of Tests / Requisition 1.389 1.273 9.4% 1.406 1.295 8.5% Total Testing Revenue $3,111,292 $575,080 441.1% $1,767,492 $344,888 412.5% Avg. Revenue/ Requisition $703.91 $592.86 18.7% $715.00 $581.60 22.9% Avg. Revenue/ Test $506.81 $465.65 8.8% $508.63 $449.07 13.3%
NeoGenomics, Inc.
CONTACT: Investor Relations: Steven C. Jones, Director of InvestorRelations of NeoGenomics, Inc., +1-239-598-0964, sjones@neogenomics.org; orFrank N. Hawkins or Julie Marshall, both of Hawk and Associates, Inc.,+1-305-451-1888, info@hawkassociates.com
Web site: http://www.neogenomics.org/
