FT. MYERS, Fla., July 26, 2016 /PRNewswire/ -- NeoGenomics, Inc. (NASDAQ: NEO), a leading provider of cancer-focused genetic testing services, today reported its results for the second quarter of 2016.
Second Quarter 2016 Highlights:
- 159% increase in consolidated revenue to record $63.1 million
- 158% increase in clinical genetic testing volume(1)
- Net income of $413,000 versus net loss of $176,000 in Q2 2015
- 281% increase in Adjusted EBITDA(2) to $9.2 million
- Diluted EPS of ($0.07) per share and Adjusted Diluted EPS(2) of $0.04 per share
Consolidated Revenue for the second quarter was $63.1 million, an increase of 159% over the same period last year. Clinical genetic test volume(1) grew 158% driven by the inclusion of Clarient's results as well as a 32% year over year increase in base(3) NeoGenomics genetic test volume. Average revenue-per-test for clinical genetic tests decreased by 5% year over year to $385, primarily due to the inclusion of Clarient's lower average reimbursement rate per test in the combined test mix.
Consolidated gross margin for the quarter was 45.3% as compared to 44.4% in last year's second quarter. Gross margin improved due to a 4.4% reduction in average cost-of-goods-sold per clinical genetic test ("Cost per Test") compared to the second quarter of 2015.
Consolidated selling, general and administrative expenses increased by $15.6 million, or 145%, from Quarter 2 2015, primarily as a result of the Clarient acquisition. Non-cash amortization of intangibles related to the Clarient acquisition and non-cash stock-based compensation expenses accounted for $2.5 million of this increase.
Interest expense for the quarter increased by $1.3 million from the second quarter of 2015 as a result of the bank debt incurred to finance the Clarient acquisition. Cash provided by operating activities was $5.0 million during the quarter.
Net income before allocation of non-cash preferred stock charges in Quarter 2 was $413,000, versus a net loss of ($176,000) in last year's second quarter.
Non-cash "deemed preferred dividends" and non-cash amortization of the "beneficial conversion feature" related to preferred stock held by GE reduced net income attributable to common stockholders by $5.6 million, which resulted in net loss attributable to common stockholders of ($5.2 million) in Quarter 2 2016. Earnings per share attributable to common stockholders was ($0.07) in Quarter 2, versus ($0.00) per share in last year's second quarter.
Adjusted EBITDA(2) was $9.2 million in the second quarter, an increase of 281% over the prior year. Adjusted Net Income(2) was $3.7 million, a 577% increase over the second quarter of 2015. Adjusted Diluted EPS(2) was $0.04 per share, versus $0.01 per share in Quarter 2 2015.
Douglas M. VanOort, the Company's Chairman and CEO, commented, "We are very pleased with our second quarter performance. Market share gains continue to drive excellent performance in the base NeoGenomics business, and Clarient test volumes have stabilized nicely. Overall, we are pleased that our revenue growth has been so strong even as we are in the midst of significant integration activities."
"In addition, our Bio Pharma business grew by 30% on a pro forma basis compared with Quarter 2 last year as we work on innovative projects with many of the world's leading pharmaceutical firms. The combined capabilities of Clarient and NeoGenomics are making us a more attractive partner for BioPharma clients and their oncology-focused clinical trials. We are excited about the long-term prospects for this business, which now represents over 10% of our total revenue."
Mr. VanOort continued, "Our teams are executing integration plans in a disciplined manner, and we are making good progress with the integration of Clarient. Although we have not yet implemented significant efficiency-related initiatives, we were able to grow Adjusted EBITDA by 281% and increase Adjusted EBITDA margin to 14.5% of revenue. We expect to realize additional cost synergies later in the year and especially in 2017 as a result of advances in our laboratory information system, adoption of best practices, consolidation of testing facilities and other integration activities currently being executed."
Mr. VanOort concluded, "The acquisition of Clarient is clearly providing our company with many more opportunities. Clients are responding well as client retention remains strong, and the pipeline of new potential clients continues to be robust. Our ability to provide the best service offerings from each of Clarient and NeoGenomics to our combined client base should provide excellent growth potential as we complete our integration. We believe this, combined with our continual investments in new products and services, will allow us to continue our strong growth."
Full-Year 2016 Financial Outlook:
NeoGenomics also today reiterated the guidance for fiscal year 2016 that was released with its Quarter 1, 2016 Earnings Release on April 27, 2016. The Company reserves the right to adjust this guidance at any time based on the ongoing execution of its business plan. Current and prospective investors are encouraged to perform their own due diligence before buying or selling any of the Company's securities, and are reminded that the foregoing estimates should not be construed as a guarantee of future performance.
Conference Call
The Company has scheduled a web-cast and conference call to discuss their Q2 2016 results on Tuesday, July 26, 2016 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 9, 2016 and can be accessed by dialing (877) 481-4010 (domestic) and (919) 882-2331 (international). The playback conference ID Number is 10043. The web-cast may be accessed under the Investor Relations section of our website at http://neogenomics.com/ or http://investorcalendar.com/IC/CEPage.asp?ID=175124. An archive of the web-cast will be available until 11:59 PM on October 26, 2016.
About NeoGenomics, Inc.
NeoGenomics, Inc. specializes in cancer genetics testing and information services. The Company provides one of the most comprehensive oncology-focused testing menus in the world for Physicians to help them diagnose and treat cancer.
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