FORT MYERS, Fla., May 9 /PRNewswire-FirstCall/ -- NeoGenomics, Inc. announced today quarterly profitability and its financial results for the first quarter of 2006.
Significant accomplishments during the first quarter included the following:
-- 484% year-over-year increase in revenues in Q1 '06 vs. Q1 '05; -- 79% sequential increase in revenues in Q1 '06 vs. Q4 '05; -- Average revenue/test increased 5.1% to $504.43 in Q1 '06 from $478.58 in Q4 '05; -- 37% of cases ordered more than one test per case in Q1 '06 (64% excluding cases such as UroVysion and PathVysion where only one test is normally ordered); -- 120% increase in breast, bladder and cervical FISH testing in Q1 '06 vs. Q4 '05; and -- Gross margin increase to 57% in Q1 '06, compared to 36% in Q4 '05.
President and Chief Scientific Officer Robert Gasparini said, "I am delighted with the progress we continue to make and am pleased to report that the Company achieved the all-important milestone of becoming net income profitable for the first quarter of 2006. We believe that we have turned the corner to sustained profitability while at the same time scaling our business for substantial growth. During the quarter, we were successful in closing several strategic relationships with large customers, which we believe will continue to fuel our growth throughout 2006 and beyond. In addition, our relatively new testing services for breast, bladder and cervical cancer continue to be well received by the market."
The Company also announced that on April 18, 2006 it completed the purchase and merger of The Center for Cytogenetics, a private genetics testing company located in Nashville, TN, into NeoGenomics, Inc. The merger is of strategic importance and results in the Company acquiring additional capacity and a second site to mitigate the risk of weather-related phenomena common to Southwest Florida. Terms of the merger were not disclosed.
Gasparini said, "The opening of our Company's second laboratory location in Nashville, TN, provides for geographic diversity, additional capacity and is central to our hurricane disaster plan. This facility should allow us to scale more rapidly to meet increasing customer demand. We remain actively engaged in discussions and continue to seek acquisitions which will allow us to further increase our capacity and ramp-up our capabilities."
Acting Principal Financial Officer Steven Jones said, "During the first quarter of 2006, we experienced terrific growth both on a year-over-year basis from Q1 '05 and a sequential basis from Q4 '05. On a year-over-year basis, the Company increased revenues by approximately 484% to $1,344,000 in Q1 '06 from $230,000 in Q1 '05, largely as a result of a greater number of tests being performed for our customers. At the same time, our requisitions increased 431% to 1,948 in Q1 '06 from 367 requisitions in Q1 '05, and our tests increased 470% to 2,664 in Q1 '06 from 467 during Q1 '05. During the first quarter average revenue per requisition increased approximately 10% to $689.84, versus $627.23 during the first quarter of 2005."
"Perhaps most significant, however, was our sequential revenue growth and increases in gross margins from the fourth quarter of 2005. On a sequential basis, we increased revenues by 79% from the fourth quarter of 2005, and our gross margin increased to 57% of revenue from 36% in the fourth quarter of 2005. This increase was primarily driven by the achievement of greater economies of scale as a result of increased testing volumes, a realignment of our pricing policies to be more in line with our overall mix of business, and an aggressive cost containment program begun in the fourth quarter of 2005. When combined, these factors allowed us to achieve significant increases in productivity and decreases in our average cost per test. Although we continue to seek ways to reduce these costs even further, we expect that the integration of our Nashville operations will have some negative impact on our gross margin over the coming quarters. We believe that our long-term margins will eventually settle in the 50-55% range."
"General and administrative expenses also increased in the first quarter by approximately 133% to $591,000 from $254,000 in the first quarter of FY 2005. This increase was largely a result of the increased expenses associated with our management team, which was recruited in the later half of 2005 to position the Company during FY 2006, as well as increased commissions cost related to increased sales."
"During the first quarter of 2006, EBITDA was approximately $225,000, which is an increase of $386,000 from the negative EBITDA of approximately $161,000 in the first quarter of 2005. A reconciliation of the EBITDA calculation to GAAP net income (loss) is contained at the back of this press release. Our net income of approximately $106,000 for the first quarter of FY 2006 increased by $321,000, versus a net loss of $215,000 during the first quarter of 2005. This resulted in earnings per basic share and earnings per diluted share of approximately $0.004."
"At the present time we reiterate our previous guidance for FY 2006 and FY 2007, which we made in our press release of March 14, 2006. Given our current rate of growth, our future performance is exceptionally difficult to predict with any accuracy (especially our FY 2007 guidance). However, based on the current trends, we do not believe any adjustments to this guidance are necessary at this time. 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," Jones said.
The Company has scheduled a web-cast and conference call to discuss these results on Thursday, May 11, 2006 at 11:00 AM 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 202503. The webcast may be accessed under the Investor Relations section of the NeoGenomics website at http://www.neogenomics.org. An archive of the webcast will be available until 11:00 a.m. ET on August 12, 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/.
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 March 31, 2006 (unaudited) ASSETS CURRENT ASSETS: Cash $260,081 Accounts receivable (net of allowance for doubtful accounts of $47,712) 898,095 Inventory 46,704 Other 77,953 Total current assets 1,282,833 FURNITURE AND EQUIPMENT (net of accumulated depreciation of $301,002) 736,611 OTHER ASSETS 12,638 TOTAL $2,032,082 LIABILITIES AND STOCKHOLDERS' DEFICIT CURRENT LIABILITIES: Accounts payable $449,776 Deferred Revenue 100,000 Accrued compensation 102,222 Accrued and other liabilities 89,732 Short-term portion of equipment financing 22,996 Total current liabilities 764,726 LONG TERM LIABILITIES Due to Affiliates (net of discount of $79,700) 1,420,300 Long term portion of equipment financing 111,208 Total long term liabilities 1,531,508 TOTAL LIABILITIES 2,296,234 STOCKHOLDERS' DEFICIT: Common stock, $.001 par value, (100,000,000 shares authorized; 26,218,843 shares issued and outstanding) 26,219 Additional paid-in capital 10,683,399 Deferred stock compensation (59,805) Accumulated deficit (10,913,965) Total stockholders' deficit (264,152) TOTAL $2,032,082 NeoGenomics, Inc. CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited) For the For the Three-Months Three-Months Ended Ended March 31, 2006 March 31, 2005 REVENUE $1,343,800 $230,192 COST OF REVENUE 576,797 164,614 GROSS (DEFICIT) PROFIT 767,003 65,578 OPERATING EXPENSES: Selling, general and administrative 590,684 253,570 Interest expense 69,885 27,182 Total operating expenses 660,569 280,752 NET INCOME (LOSS) $106,434 $(215,174) NET INCOME (LOSS) PER SHARE - Basic $0.00 $(0.01) Diluted $0.00 $(0.01) WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING - Basic and Diluted 24,752,083 22,744,273 Diluted 25,512,363 22,744,273 NeoGenomics, Inc. CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE THREE MONTHS ENDED MARCH 31, (unaudited) 2006 2005 CASH FLOWS FROM OPERATING ACTIVITIES: Net income (loss) $106,434 $(215,174) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation 39,691 26,414 Impairment of fixed assets - - Amortization of credit facility warrants and debt issue costs 21,833 1,988 Amortization of deferred stock compensation - 17,826 Other Amortization 9,482 - Stock based compensation and consulting 8,361 12,685 Provision for bad debts 63,158 8,814 Changes in assets and liabilities, net: (Increase) Decrease in accounts receivable, net (410,154) (93,926) (Increase) Decrease in Inventory 13,296 (12,721) (Increase) Decrease in other current assets (28,928) 6,357 (Increase) Decrease in deposits - (5,000) Increase (Decrease) in deferred revenues - - Increase (Decrease) in accounts payable and accrued and other liabilities (97,906) 10,515 NET CASH USED IN OPERATING ACTIVITIES (277,736) (242,222) CASH FLOWS FROM INVESTING ACTIVITIES: Purchases of property and equipment, net (220,959) (11,704) NET CASH USED IN INVESTING ACTIVITIES (220,959) (11,704) CASH FLOWS FROM FINANCING ACTIVITIES: Advances from affiliates, net - 155,451 Proceeds from equipment leases 134,204 Debt issue costs - (53,587) Issuances of common stock for cash, net of transaction expenses 613,628 152,473 NET CASH PROVIDED BY FINANCING ACTIVITIES 747,832 254,337 NET INCREASE IN CASH AND CASH EQUIVALENTS 249,136 411 CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR 10,944 112,548 CASH AND CASH EQUIVALENTS, END OF PERIOD $260,080 $112,959 SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: Interest paid $50,561 $30,569 Income taxes paid $- $- SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES: Equipment leased under capital lease $134,204 $- NeoGenomics, Inc. Reconciliation of GAAP net income (loss) to EBITDA (unaudited) For the For the Three-Months Three-Months Ended Ended March 31, 2006 March 31, 2005 NET INCOME (LOSS) $106,434 $(215,174) Add: Depreciation 39,691 26,414 Amortization 9,482 - Interest expense 69,885 27,182 EBITDA $225,492 $(161,158) Supplemental Information on Requisitions and Tests Performed Q1 2006 Q1 2005 % Inc (Dec) Customer Requisitions Rec'd (Cases) 1,948 367 430.8% Number of Tests Performed 2,664 467 470.4% Average Number of Tests/ Requisition 1.37 1.27 7.5% Total Testing Revenue $1,343,800 $ 230,192 483.8% Avg Revenue/Requisition $ 689.84 $ 627.23 10.0% Avg Revenue/Test $ 504.43 $ 492.92 2.3%
NeoGenomics, Inc.CONTACT: Steven C. Jones, Director of Investor Relations of NeoGenomics,Inc., +1-239-598-0964, sjones@neogenomics.org, or Frank N. Hawkins or JulieMarshall, both of Hawk and Associates, Inc., +1-305-451-1888,info@hawkassociates.com
Web site: http://www.neogenomics.org/
