FT. MYERS, Fla., March 14 /PRNewswire-FirstCall/ -- NeoGenomics, Inc. today announced its results for the fourth quarter and full year of fiscal 2005. Significant accomplishments during the fourth quarter and year included the following:
Fourth Quarter 2005 Accomplishments: * 453% year-over-year increase in revenues in Q4 05 vs. Q4 04 * 34% sequential increase in revenues in Q4 05 vs. Q3 05 * Avg. Revenue/Case increased 12.5% to $685.75 in Q4 05 from $609.31 in Q3 05 * 44% of cases ordered more than one test per case in Q4 05 vs. 38% of cases in Q3 05 * Avg. Revenue/Test increased 8.3% to $476.46 in Q4 05 from $440.09 in Q3 05 Full Year 2005 Accomplishments: * 238% increase in revenues during FY 2005 vs. FY 2004 * Case volume increased 162% to 2,982 cases in FY 2005 from 1,139 cases in FY 2004 * Avg. Revenue/Case increased 29.0% to $632.23 in FY 2005 from $489.97 in FY 2004 * Test volume increased 254% to 4,082 tests in FY 2005 from 1,152 tests in FY 2004 * 37% of Cases ordered more than one test per case in 2005 vs. 1% of cases in 2004
Robert Gasparini, the Company’s President, stated, “I am delighted with the progress we continue to make, and I am pleased to report that the Company achieved the all important milestone of becoming net income profitable in February of 2006. During 2005, the substantial investments we made in infrastructure, human resources and the sales force began to yield significant dividends. Our national expansion strategy has gained considerable momentum, and by December of 2005 approximately 60% of our revenue was derived from outside of the State of Florida. This is a substantial accomplishment considering that 100% of our revenue was derived from Florida sources at the end of 2004. We now service clients in 16 states and this number continues to grow each quarter. Customers continue to be attracted to our exceptional turn-around times and customer service.”
Mr. Gasparini went on to say, “During the fourth quarter, we deliberately chose to slow our top line growth rate a little so that we could further add to our infrastructure. These adjustments have now largely been completed, and we have begun to scale our business quite rapidly during the first quarter of 2006. Our CancerLink(TM) Laboratory Information System (LIS), which we announced during the third quarter of 2005, has proven to be the “killer application” that we hoped it would be and is resulting in substantial increases in our productivity and customer satisfaction. In addition, our new breast, bladder and cervical cancer testing services have been warmly embraced by both new and existing customers.”
Mr. Gasparini concluded by saying, “We are planning several new initiatives during 2006 which should help to take our business to the next level. We are in the final stages of our strategic planning on the design and location of a second laboratory facility outside of the State of Florida to provide for geographic diversity and additional capacity. Several locations are under consideration and we plan to make a final determination by the end of the second quarter. In addition, we are currently considering several strategic initiatives with our larger customers to further increase our volumes. Lastly, we are in the process of formalizing an investor relations program, which we believe will help to provide more information to investors about our business. We appreciate the patience our shareholders have displayed while we organize a truly scaleable business.”
Steven Jones, the Company’s acting Principal Financial Officer and a Director, stated, “During 2005, we began to see considerable economies of scale. Our gross margin increased to 37% of revenue from a deficit position in 2004. In addition, the number of cases in which we performed more than one test increased dramatically to 37% of cases in 2005 versus just 1% of cases in 2004. This increase was driven primarily by our new product offerings and is leading to higher gross margins. Moving forward, we expect our gross margins to continue to increase slowly, and we believe that 45% gross margins are attainable by the end of 2006. Although our general and administrative expenses increased by 104% to $1,447,000 in FY 2005 from $711,000 in FY 2004, we have now largely completed the hiring of our core management team which was the largest driver of this increase. Moving forward, we expect increases in our overhead expenditures to be more in line with industry averages for the rate of revenue growth we achieve. For the year, our net loss increased by approximately 22% to $997,000, or $0.04/share. This was largely a result of the increased general and administrative expenses in FY 2005 associated with preparing our business to be able to continue to scale during FY 2006 and a non-recurring asset impairment charge of $50,000.
Mr. Jones went on to say, “During the fourth quarter of 2005, we increased revenues by approximately 453% to $751,000 from $136,000 during the fourth quarter of 2004, largely as a result of a greater number of tests being performed for our customers. During the fourth quarter average revenue per test increased approximately 8.3% to $476.46 versus $440.09 during the fourth quarter of 2004. General and administrative expenses increased in the fourth quarter by approximately 90% to $501,000 from $263,000 in the fourth quarter of FY 2004. This increase was largely as a result of preparing our business to be able to continue to scale during FY 2006. During the fourth quarter of 2005, we also took a $50,000 asset impairment charge to reduce the carrying value of a mass spectrometer to more accurately reflect our estimate of the current market value of this piece of equipment. Our net loss of $361,000 for the fourth quarter of FY 2005 increased by approximately 16%, or $51,000, versus a net loss of $310,000 during the fourth quarter of 2004, largely as a result of the $50,000 non-recurring asset impairment charge.
Mr. Jones concluded by saying, “Recently we have been asked by several investors and research analysts to provide some guidance for FY 2006 and FY 2007. Given our current rate of growth, this is exceptionally difficult to predict with any accuracy. However, in keeping with our goal of formalizing an investor relations program, we are providing the following guidance for investors. Based on our current rate of growth, we are currently planning on doubling our staff by year-end, which we believe will allow us to triple our test volumes from 4,082 tests in 2005 to approximately 12,000 tests in 2006. Providing we are able to do this, we believe that we can achieve FY 2006 revenues of approximately $5.0 - $6.0 million and net income of approximately $400,000 - $500,000. FY 2007 is even more difficult to predict, however, provided that we can continue to scale our human resource infrastructure, we believe that we can double our test volumes again to approximately 24,000 tests in 2007. If we are able to achieve this level of test volumes in 2007, we believe that we can attain approximately $10.0 - $12.0 million of revenue and approximately $1.0 - $1.2 million of net income. 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.”
The attached financial results, including a reconciliation of non-cash and non-recurring expenses, should be read in conjunction with the Company’s Annual Report on Form 10-KSB, which will be filed with the SEC by March 31, 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, FL 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, please visit our website at www.neogenomics.org.
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, 2004, and the soon to be filed 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 December 31, 2005 (unaudited) ASSETS CURRENT ASSETS: Cash $ 10,944 Accounts receivable (net of allowance for doubtful accounts of $37,807) 551,099 Inventory 60,000 Other 58,509 Total current assets 680,552 FURNITURE AND EQUIPMENT (net of accumulated depreciation of $261,311) 381,556 OTHER ASSETS 17,996 TOTAL $ 1,080,104 LIABILITIES AND STOCKHOLDERS’ DEFICIT CURRENT LIABILITIES: Accounts payable $ 463,636 Deferred Revenue 100,000 Accrued compensation 42,547 Accrued and other liabilities 59,665 Total current liabilities 665,848 LONG TERM LIABILITIES - Due to Affiliates (net of discount of $90,806) 1,409,194 TOTAL LIABILITIES 2,075,042 STOCKHOLDERS’ DEFICIT: Common stock, $.001 par value, (100,000,000 shares authorized; 22,836,754 shares issued and outstanding) 22,837 Additional paid-in capital 10,005,308 Deferred stock compensation (2,685) Accumulated deficit (11,020,398) Total stockholders’ deficit (994,938) TOTAL $ 1,080,104 NeoGenomics, Inc. CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited) For the For the For the For the Twelve- Twelve- Three- Three- Months Months Months Months Ended Ended Ended Ended December December December December 31, 2005 31, 2004 31, 2005 31, 2004 REVENUE $1,885,324 $558,074 $750,895 $135,820 COST OF REVENUE 1,188,402 576,867 504,708 159,734 GROSS (DEFICIT) PROFIT 696,922 (18,793) 246,187 (23,914) OPERATING EXPENSES: Selling, general and administrative 1,447,286 710,771 500,928 263,262 Interest expense 196,796 89,421 55,951 22,600 Asset impairment charge 50,000 - 50,000 - Total operating expenses 1,694,082 800,192 606,879 285,862 NET INCOME (LOSS) $(997,160) $(818,985) $(360,692) $(309,776) NET INCOME (LOSS) PER SHARE - Basic and Diluted $(0.04) $(0.04) $(0.02) $(0.01) WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING - Basic and Diluted 22,264,435 19,901,028 22,601,478 21,539,416 NeoGenomics, Inc. CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited) FY 2005 FY 2004 CASH FLOWS FROM OPERATING ACTIVITIES: Net loss $ (997,160) $ (818,985) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation 123,998 90,583 Impairment of fixed assets 50,000 - Amortization of credit facility warrants and debt issue costs 57,068 - Amortization of deferred stock compensation 20,779 13,680 Other Amortization 29,576 - Stock based compensation and consulting 65,098 6,224 Provision for bad debts 132,633 28,959 Changes in assets and liabilities, net: (Increase) Decrease in accounts receivable, net (627,241) (21,589) (Increase) Decrease in Inventory (44,878) (4,529) (Increase) Decrease in other current assets (54,529) (9,495) (Increase) Decrease in deposits 300 4,540 Increase (Decrease) in deferred revenues (10,000) - Increase (Decrease) in accounts payable and accrued and other liabilities 352,305 52,479 NET CASH USED IN OPERATING ACTIVITIES (902,052) (658,133) CASH FLOWS FROM INVESTING ACTIVITIES: Purchases of property and equipment, net (117,628) (85,932) NET CASH USED IN INVESTING ACTIVITIES (117,628) (85,932) CASH FLOWS FROM FINANCING ACTIVITIES: Advances from affiliates, net 760,000 91,334 Debt issue costs (53,587) - Issuances of common stock for cash, net of transaction expenses 211,662 740,228 NET CASH PROVIDED BY FINANCING ACTIVITIES 918,075 831,562 NET INCREASE IN CASH AND CASH EQUIVALENTS (101,604) 87,497 CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR 112,548 25,051 CASH AND CASH EQUIVALENTS, END OF YEAR $ 10,944 $ 112,548 SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: Interest paid $ 136,936 $ 119,777 Income taxes paid $ - $ -
NeoGenomics, Inc.
CONTACT: Investor Relations, NeoGenomics, Inc., Mr. Steven Jones,+1-239-598-0964, sjones@neogenomics.org
Web site: http://www.neogenomics.org//
