FT. MYERS, Fla., May 9 /PRNewswire-FirstCall/ -- NeoGenomics, Inc. today announced its results for the first quarter of fiscal year 2007. Significant accomplishments during the quarter included the following:
First Quarter 2007 Accomplishments: -- 67% year-over-year increase in revenues in Q1 '07 vs. Q1 '06 -- 27% sequential increase in revenues in Q1 '07 vs. Q4 '06 -- 13% sequential increase in Avg. Rev. per Requisition in Q1 '07 vs. Q4 '06 -- Addition of 27 new customers in Q1 '07 -- Licensure of our California laboratory facility -- Rapid growth of our industry leading Tech-only NeoFISH(TM) product -- Announced plans to form a Joint Venture Contract Research Organization with Power3 Medical Products, Inc.
Robert Gasparini, the Company's President, stated, "During the first quarter, the investments we made in our sales force in late 2006 and early 2007 began to pay off. We shattered our previous record of 12 new customers in a quarter with the addition of 27 new customers during Q1 '07. I am also pleased to report that these strong trends are continuing into the second quarter and that we have already added 16 new customers thus far in Q2. Our industry leading Tech-only NeoFISH(TM) program, which was announced in late 2006, has been well received by community-based pathologists and has surpassed all our expectations. We are also currently beta-testing a new Virtual NeoFISH(TM) application which we expect to roll out later this quarter. This Virtual NeoFISH(TM) application will make it even easier for pathologists to partner with NeoGenomics and will allow them to automatically populate and custom design their own reports."
Mr. Gasparini went on to say, "We also saw a 126% sequential increase in the number of flow cytometry tests performed in Q1 '07 vs. Q4 '06, with the majority of these flow tests being ordered together with cytogenetics on the same requisition. This helped to increase our average number of tests per requisition to 1.34 in Q1 '07 from 1.23 in Q4 '06 and drove a significant 13.5% sequential increase in our Average Revenue per Requisition to $727.18 in Q1 '07 from $641.02 in Q4 '06. The licensure of our new California facility was also a significant milestone for the Company as it gives NeoGenomics a truly bi-coastal presence. In anticipation of forecasted significant case volumes in California, we recently moved our Irvine laboratory location into a new 8,300 square foot facility."
Mr. Gasparini concluded by saying, "This California facility will be the home of our new joint venture Contract Research Organization initiative with Power3 Medical Products, which we announced on April 4, 2007. Although we are still defining this initiative, there has been substantial interest recently in Power3's blood serum-based breast cancer and other homebrew tests. Once our own blinded studies of Power3's breast cancer test are satisfactorily completed, we expect to begin development of a high throughput version of this test later this year. In addition to the 22 protein biomarkers they have discovered for breast cancer, Power3 has also identified over 500 other biomarkers for various diseases and they have 16 patents pending. Thus, we are optimistic that this joint venture with Power3 will enable us to develop a number of proprietary tests over time that will help to drive new testing algorithms for early disease detection with serum-based proteomics tests."
Steven Jones, the Company's acting Chief Financial Officer and a Director, stated, "All of the metrics in the first quarter showed solid gains. On a year-over-year basis, we increased revenues by approximately 67% to $2.2 million in Q1 '07 from $1.3 million Q1 '06, largely as a result of a greater number of tests being performed for our customers and to a lesser extent by an increase in the average revenue per test. The number of tests completed increased by approximately 58% to 4,196 in Q1 '07 from 2,664 in Q1 '06. Average revenue per test increased approximately 6% to $534.48 in Q1 '07 from $504.42 in Q1 '06."
Mr. Jones continued, "On a sequential basis, we are particularly pleased with the impressive gains in both total revenue and in Average Revenue per Requisition. Total revenue in Q1 '07 increased sequentially from Q4 '06 by 27%, and Average Revenue per Requisition increased by 13.5% sequentially. This increase in Average Revenue per Requisition highlights the operating leverage inherent in our business and demonstrates the power of selling multiple tests per requisition into our customer base. I am also pleased to report that during Q1 '07 our reference lab business was fairly stable throughout the quarter, thus the rest of our business was growing off a stable base in Q1 '07 as opposed to the situation in Q4 '06 where we were growing off a shrinking base of reference lab tests. Now that our customer mix issues have largely sorted themselves out, we expect to be able to achieve robust quarterly sequential revenue growth rates for the rest of the year. Indeed, based on the number of new customers so far in the second quarter, we are expecting sequential quarterly revenue growth for Q2 '07 in the 25-30% range."
Mr. Jones went on to say, "We are also delighted with the continued strength in our gross margins and are proud of our accomplishments with respect to holding the line on selling, general and administrative ("SG&A") costs. We maintained our gross margin at 58.2% during Q1 '07, which is almost identical to where it was in Q4 '06, despite the fact that we incurred considerable costs in validating the testing in our new California lab. We are optimistic that as California begins to bring more and more revenue on line, we may be able to further increase our gross margins. Selling, general and administrative expenses increased by approximately $11,000 or less than 1% in Q1 '07 from Q4 '06, despite the fact that revenues grew 27% sequentially. Importantly, our SG&A expenses in Q1 '07 contained $159,000 of legal fees in connection with defending ourselves against the frivolous lawsuit initiated by US Labs. We expect these legal fees to begin to subside toward the end of this year. We also posted approximately $94,000 of non-cash charges related to stock-based compensation in Q1 '07 pursuant to the new guidelines promulgated under SFAS 123R. We posted a net loss of $220,000, or $0.01 per share, for Q1 '07 versus a net loss of $429,000 or $0.02 per share in Q4 '06. We did, however, post a modest profit for the month of March in Q1 '07. Moving forward, we expect to turn profitable again on a full quarterly basis in Q2 '07."
Mr. Jones concluded by saying, "At this time, we are also reiterating our previously issued FY 2007 guidance. We believe we can achieve FY '07 revenue of approximately $14-$16 million and maintain gross margins in the 55-60% range. We also believe we can achieve net income in the range of $1.3 - $1.7 million. We expect capital expenditures to be approximately $1.5 - $2.0 million in FY '07 and we believe that we can finance a large portion of these. It is important to emphasize that the above guidance is based only on organic growth in our current business, and we reserve the right to adjust this guidance at any time as a result of acquisitions or other strategic initiatives we may undertake and/or based on the ongoing execution of our business plan. By no means should these estimates be construed as a guarantee of future performance, and current and prospective investors are encouraged to perform their own due diligence before buying or selling any of our securities. I would also like to announce that we will be posting a new Company Overview Presentation to our website later today. Investors who would like updated information about NeoGenomics can access this through the investor relations section of our website at www.neogenomics.org."
The Company has also scheduled a web-cast and conference call to discuss these results later today (Wednesday, May 9, 2007) at 11:00 AM EDT. Interested investors should dial (877) 407-0778 (domestic) and (201) 689-8565 (international) at least five minutes prior to the call. A replay of the conference call will be available until May 16, 2007 until 11:59 PM and can be accessed by dialing (877) 660-6853 (domestic) and (201) 612-7415 (international). The playback account number will be 286 and the playback pin number is 241110. The web-cast may be accessed under the Investor Relations section of the NeoGenomics website at http://www.neogenomics.org or at http://www.hawkassociates.com/ngnmmore.aspx. An archive of the web-cast will be available until 11:59 PM EDT on August 10, 2007.
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, morphology studies, anatomic pathology and molecular genetic testing. Headquartered in Fort Myers, FL, NeoGenomics has labs in Nashville, TN, Irvine, CA and Fort Myers and services the needs of pathologists, oncologists, urologists, hospitals and other reference laboratories 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. An investment profile about NeoGenomics may be found at http://www.hawkassociates.com/ngnmprofile.aspx.
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 most recent fiscal year describes 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, 2007 (unaudited) ASSETS CURRENT ASSETS: Cash and cash equivalents $ 575,393 Accounts receivable (net of allowance for doubtful accounts of $126,363) 1,986,229 Inventories 155,190 Other current assets 106,039 Total current assets 2,822,851 PROPERTY AND EQUIPMENT (net of accumulated depreciation of $492,548) 1,409,381 OTHER ASSETS 39,791 TOTAL $4,272,023 LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES: Accounts payable $ 761,071 Short-term portion of equipment lease and notes payable 142,318 Accrued compensation 162,672 Accrued and other liabilities 132,030 Due to affiliates (net of unamortized discount of $25,814) 1,674,186 Total current liabilities 2,872,277 LONG TERM LIABILITIES: Long-term portion of equipment lease 610,056 TOTAL LIABILITIES 3,482,333 STOCKHOLDERS' EQUITY: Common stock, $.001 par value, 100,000,000 shares authorized; 27,697,958 shares issued and outstanding 27,698 Additional paid-in capital 12,342,983 Deferred Stock Compensation (211,388) Accumulated equity (11,369,603) Total stockholders' equity 789,690 TOTAL $4,272,023 NeoGenomics, Inc. CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited) For the For the Three- Three- Months Months Ended Ended March 31, March 31, 2007 2006 REVENUE $ 2,242,661 $ 1,343,800 COST OF REVENUE 936,734 576,797 GROSS PROFIT 1,305,927 767,003 OPERATING EXPENSES: Selling, general and administrative 1,426,548 590,684 Interest (income) expense, net 98,924 69,885 Total operating expenses 1,525,472 660,569 NET INCOME (LOSS) $ (219,545) $ 106,434 NET INCOME (LOSS) PER SHARE - Basic $ (0.01) $ 0.00 - Diluted $ (0.01) $ 0.00 WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING - Basic 27,371,233 24,752,083 Diluted 27,371,233 25,512,363 NeoGenomics, Inc. CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited) For the For the Three- Three- Months Months Ended Ended March 31, March 31, 2007 2006 NET CASH USED IN OPERATING ACTIVITIES $(382,031) $ (277,736) NET CASH USED IN INVESTING ACTIVITIES (24,418) (86,755) NET CASH PROVIDED BY FINANCING ACTIVITIES 855,576 613,628 NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 449,127 249,137 CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 126,266 10,944 CASH AND CASH EQUIVALENTS, END OF PERIOD $575,393 $ 260,081 SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: Interest paid $77,922 $ 50,561 Income taxes paid $ 100 $ - SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES: Equipment leased under capital lease $239,579 $ 134,204 NeoGenomics, Inc.
Supplemental Information on Customer Requisitions Received and Tests Performed
For the For the Three- Three- Months Months Ended Ended % March 31, March 31, Inc 2007 2006 (Dec) Requisitions Received (Cases) 3,083 1,948 58.3 % Number of Tests 4,196 2,664 57.5 % Performed Avg. # of Tests/Requisition 1.36 1.37 (0.7 %) Total Testing Revenue $2,242,661 $1,343,800 66.9 % Avg. Revenue/Requisition $727.43 $689.83 5.5 % Avg. Revenue/Test $534.48 $504.42 6.0 %
NeoGenomics, Inc.CONTACT: Investor Relations: Steven C. Jones, Director of InvestorRelations, +1-239-325-2001, sjones@neogenomics.org; or Frank N. Hawkins orJulie Marshall, Hawk and Associates, Inc., +1-305-451-1888,info@hawkassociates.com
Web site: http://www.neogenomics.org/
