FT. MYERS, Fla., July 30 /PRNewswire-FirstCall/ -- NeoGenomics, Inc. announced today that it will release its Q2 FY 2007 earnings on Thursday, August 2, 2007. The Company has also scheduled a webcast and conference call to discuss these results on August 2, at 11:00 AM EDT. 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 August 15, 2007 and can be accessed by dialing (877) 660-6853 (domestic) and (201) 612-7415 (international). The playback account number is 286 and the playback conference ID Number/PIN Number is 249127. The web-cast may be accessed under the Investor Relations section of our website at http://www.neogenomics.org or at the website of our Investor Relations firm, Hawk Associates, at http://www.hawkassociates.com/ngnmmore.aspx or at http://www.vcall.com/IC/CEPage.asp?ID=118989. An archive of the web-cast will be available until 11:59 PM EDT on November 3, 2007.
The Company also announced that as a result of certain revenue shortfalls, increases in personnel expenditures, and approximately $300,000 of non- recurring charges and non-cash stock-based compensation charges incurred during the second quarter, it was lowering its previously issued guidance for sequential revenue growth and net income for the quarter. Although the Company’s outside auditors are still finishing their review of our Q2 financial results, it appears that sequential revenue growth in Q2 ’07 will be approximately 4-5% from Q1 ’07 and that GAAP net loss for the quarter will be approximately $0.03 per share.
Robert Gasparini, the Company’s President and Chief Scientific Officer, stated, “During the second quarter our revenues came in approximately $200,000 less than where we had expected in our previously issued guidance. We attribute this to the fact that it has taken longer than expected to ramp up case volumes with many of our newer customers. Indeed, a number of new customers are still in what we call the “trial phase” of our relationship and have not yet ramped up their volumes with us in any kind of meaningful way. On a positive note, however, during the month of July, we appear to have reached the inflection point we were expecting in the May/June timeframe where new case volumes more than offset the reduction in case volumes from the previously disclosed loss of a large reference lab customer earlier in Q2. Based on the preliminary test volume data, we believe that our revenue for the month of July will be approximately $1.0 million, our highest monthly revenue ever.”
Mr. Gasparini continued, “In our industry, it is difficult to balance the choreography between hiring full-time employees (“FTEs”) and increasing revenues as there is typically a 2-3 month lead-time required to hire technical and support team members. If you wait too long to hire, there is a high degree of risk that both turn-around times and customer service will suffer and that new customers will have a negative experience while trialing your services. Although we have managed this choreography well over the last 2-3 years, based on the large number of new customers we have already added this year and are continuing to sign up, we felt that we couldn’t take any chances in Q2. We have worked too hard to establish the NeoGenomics brand as being synonymous with industry-leading turn-around times and customer service.”
“Based on this new customer activity, we were anticipating larger increases in case volumes during Q2, and we began to staff up considerably during the quarter. Our headcount grew approximately 30% from 59 people on March 31st to 77 people on June 30th. As a result of the delay in scaling case volumes from new customers, the loss of revenue from the large reference lab customer, and the substantial increases in headcount, we found ourselves in the unenviable position of being overstaffed relative to current revenues. This and the unusually large non-recurring and stock-based compensation charges incurred during the quarter significantly impacted our bottom line. In light of these factors, we have reset our expectations about case volume growth and revenue growth for the remainder of this year and we are re- assessing our staffing levels and hiring plans in order to better choreograph our growth in FTEs relative to our revised expectations.”
Mr. Gasparini concluded by saying, “Although our net loss in Q2 is disappointing, we are being careful not to lose sight of the bigger picture. The cancer genetics testing industry is growing very rapidly and we believe that our products and services are extremely well-positioned to address the needs of this rapidly evolving market. At a recent meeting of our Board of Directors, we concluded that we must continue to scale our physical infrastructure and personnel resources this year in order to position NeoGenomics to take full advantage of these market opportunities even if it means emphasizing scale over profitability for the remainder of this year. In effect, 2007 is becoming a transition year for us to set up a robust 2008. As a result, we believe we will have further net losses in Q3 and possibly even in Q4. However, it is our goal to achieve monthly revenues that would put us on an annualized revenue run rate of at least $20 million per year and return us to profitability on a monthly basis by the end of Q4 ’07. We believe this will position us extremely well to begin 2008 and are hopeful this will put us back on the path of rapid profit growth.”
Mr. Steven Jones, the Company’s Acting Chief Financial Officer, stated, “Like many smaller companies, our financial performance is incredibly sensitive to top line revenue growth. Our decision to staff up during the second quarter was based on the best available information we had at the time, and our hiring was consistent with our plans and goals for the year in effect at that time. It is now apparent that as a result of the delays in fully converting many of these new customers, our original plans and goals for FY 2007 are likely unobtainable and we are revising our guidance for the full year FY 2007 as follows. We believe we will have full year FY 2007 revenue of approximately $10-12 million and, based on our new plans, we believe we will lose approximately $2 million of GAAP net income for the year. While this may prove to be conservative guidance, we would rather investors be surprised on the upside than be disappointed with any further misses. We reserve the right to adjust this guidance at any time based on the ongoing execution of our business plan and/or as a result of acquisitions or other strategic initiatives we may undertake. 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.”
Mr. Jones concluded by saying, “The opportunities right now for a company like NeoGenomics in our industry are truly impressive. As we have previously discussed, there is a high level of concern on the part of community-based pathologists that the largest labs will continue to go around them and solicit their customers directly. This industry trend, which we believe is accelerating as a result of recent consolidation activity, plays perfectly into the strategy of NeoGenomics. Our Tech-only NeoFISH(TM) product has been warmly embraced by the pathology community as evidenced by the 19 Tech-only NeoFISH(TM) customers that have signed up in the seven months since announcing this product in December and the many more we currently have in trials. We believe our products and services are changing the way this industry is evolving. We greatly appreciate the patience and support of our investors as we fine tune the choreography between hiring FTEs and increasing our revenues. We believe that the investments we have made for the growth of our top line will begin to bear fruit in our third and fourth quarters, and we look forward to answering all of your detailed questions on our second quarter conference call.”
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 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, Actual results could differ materially from such statements expressed or implied herein. Factors that might cause such a difference include, among others, the company’s ability to continue gaining new customers, offer new types of tests, and otherwise implement its business plan. As a result, this press release should be read in conjunction with the company’s periodic filings with the SEC.
NeoGenomics, Inc.
CONTACT: Steven C. Jones, Director of Investor Relations, NeoGenomics,Inc., +1-239-325-2001, sjones@neogenomics.org; or Frank N. Hawkins or JulieMarshall, Hawk and Associates, Inc. for NeoGenomics, +1-305-451-1888,info@hawkassociates.com
Web site: http://www.neogenomics.org/
