FT. MYERS, Fla., Aug. 2 /PRNewswire-FirstCall/ -- NeoGenomics, Inc. today announced its results for the second quarter of 2007. Significant accomplishments during the second quarter and for the first six months of the year included the following:
2nd Quarter 2007 Accomplishments: -- 32.6% year-over-year increase in revenues in Q2 07 vs. Q2 06 -- The build-out of staff and infrastructure to support growth in Q3 and Q4 07 -- Completion of a $4.0 million equity placement -- Pay-off of $1.7 million of debt leaving $600,00 of capital lease debt -- Start-up of the first contract for the Contract Research Organization (CRO) in CA -- Roll-out of NeoFISH(TM), a virtual FISH analysis with custom-designed reporting Year-to-Date Accomplishments: -- 47.4% year-over-year increase in revenues in FY07 vs. FY06 -- Requisitions increased 48% to 6,551 requisitions in FY ’07 from 4,420 in FY ’06 -- Test volume increased 42% to 8,678 tests in FY ’06 from 6,139 in FY ’05 -- Avg. Revenue/Test increased 4.3% to $528.54 in FY ’07 from $506.81 in FY ’06 -- Expansion of personnel and physical infrastructure to handle anticipated volumes -- Appointment of two new members to the Board of Directors with BioPharm and CRO experience
Robert Gasparini, the Company’s President and Chief Scientific Officer, stated, “The second Quarter was one of excitement and challenge. The launch of NeoFISH(TM), an industry first virtual FISH product, and the upgrade/expansion of our on-line reporting system for Flow Cytometry has helped position us to continue serving our existing customers as well as reach out to new customers. The number of large, “top-tier” customers we service is starting to grow in direct relationship to our product offerings. The advent of the CRO and its first contract is both encouraging and rewarding as we see this initiative start to pay off. In addition, our joint venture initiative with Power3 Medical Products and the CRO is coming along nicely as Power3 has begun to report some very compelling results for their blood serum-based breast cancer screening tests from blinded studies. We expect to have more info on this initiative by year-end.”
“That said, as we discussed in our press release earlier this week, our second quarter was a challenging quarter for us in terms of balancing our growth and managing the bottom line. Our revenues this quarter were impacted by two factors; customers taking longer than expected to ramp up and the build-out of our personnel and physical infrastructure to handle anticipated volumes. Although we missed the timing of our inflection point by approximately two months, the rest of the year looks bright. Based on our preliminary July numbers, it appears that we will have record revenue of approximately $1.0 million in July, which is a sequential growth rate of approximately 17% from our June revenue. We are also seeing strong prospects for August in our pipeline. Typically, these two months are the slowest months of the year for clinical laboratories like ours due to summer seasonality.”
During the second quarter, we increased revenues by approximately 32.6% to $2.34 million from $1.77 million during Q2 06, largely as a result of a greater number of tests being performed for our customers. Average revenue per test increased approximately 2.8% to $522.99 in Q2 07 from $508.63 in Q2 06. Gross profit increased by approximately 13.1% to $1.18 million in Q2 07 from $1.04 million in Q2 06. We experienced some compression in our gross margin on a year over year basis, primarily as a result of hiring more technologists and laboratory professionals in Q2 07 in preparation for increasing our case volumes in the second half of this year and to a lesser extent as a result of a different mix of business this year versus last year.
General and administrative expenses increased in the second quarter by approximately 157% to $2,059,000 from $802,000 in 2Q 06. This increase was largely a result of increased headcount, professional and consulting fees, and bad debt reserves related to higher revenues. In addition, during Q2 07 we incurred approximately $170,000 of litigation-related legal fees, $57,000 of other transaction-related legal fees of a non-recurring nature, and approximately $102,000 of non-recurring, non-cash charges relating to retiring our long term debt early and the granting of certain stock based compensation awards in connection with expanding and re-electing our Board of Directors. Our net loss for the quarter expanded to $974,000 or $0.03/share from net income of $161,000 or $0.01/share in Q2 06. Our cash balance on June 30, 2007 was approximately $1.6 million.
Mr. Gasparini concluded by saying, “There are a lot of terrific things happening at NeoGenomics. Our team is growing and excited. Our Tech-only NeoFISH(TM) product has been a huge success with 19 new customers since product launch and another 16 prospective customers currently in trials. Our new Flow Cytometry reporting system was completed in July, and has already started to pay dividends with two new customers starting in the last week alone. In addition, the experience of our two new Board members is already helping to shape our strategy and will absolutely help with our interactions with the BioPharm industry and the development of our CRO. By all accounts, we believe we have positioned our company for a strong Q3 and Q4 and an even stronger 2008.”
The Company has scheduled a webcast and conference call to discuss these results later this morning 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.
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, 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 most recently filed Form 10-KSB 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 June 30, 2007 (unaudited) ASSETS CURRENT ASSETS $ 4,488,237 PROPERTY AND EQUIPMENT (net of accumulated depreciation of $590,190) 1,773,876 OTHER ASSETS 251,190 TOTAL $ 6,513,303 LIABILITIES AND STOCKHOLDERS’ EQUITY CURRENT LIABILITIES $ 1,563,732 LONG TERM LIABILITIES 599,112 TOTAL LIABILITIES 2,162,843 STOCKHOLDERS’ EQUITY 4,350,461 TOTAL $ 6,513,303 NeoGenomics, Inc. CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited) For the For the For the For the Three- Three- Six-Months Six-Months Months Months Ended Ended Ended Ended June 30, June 30, June 30, June 30, 2007 2006 2007 2006 REVENUE $4,586,694 $3,111,292 $2,344,032 $1,767,492 COST OF REVENUE 2,102,546 1,302,614 1,165,813 725,816 GROSS PROFIT 2,484,148 1,808,674 1,178,219 1,041,676 OPERATING EXPENSES: Selling, general and administrative 3,485,713 1,392,784 2,059,166 802,100 Interest (income) expense, net 191,480 148,206 92,556 78,321 Total operating expenses 3,677,193 1,540,990 1,456,358 880,421 NET INCOME (LOSS) $(1,193,045) $(267,688) $(973,503) $161,255 NET INCOME (LOSS) PER SHARE - Basic $(0.04) $0.01 $(0.03) $0.01 - Diluted $(0.04) $0.01 $(0.03) $0.01 WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING - Basic 28,160,643 25,531,132 28,941,466 22,601,478 Diluted 28,160,643 27,951,298 28,941,466 29,709,673 NeoGenomics, Inc. CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited) For the For the Six-Months Six-Months Ended Ended June 30, 2007 June 30, 2006 NET CASH USED IN OPERATING ACTIVITIES $(1,767,822) $(255,725) NET CASH USED IN INVESTING ACTIVITIES (221,264) (233,528) NET CASH PROVIDED BY FINANCING ACTIVITIES 3,484,699 752,662 NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 1,495,614 263,409 CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 126,264 10,944 CASH AND CASH EQUIVALENTS, END OF PERIOD $1,621,878 $274,353 SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: Interest paid $101,261 $106,027 Income taxes paid $- $- SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES: Equipment leased under capital lease $272,265 $128,635 NeoGenomics, Inc.
Supplemental Information on Customer Requisitions Received and Tests Performed
For the For the For the For the Six- Six- Three- Three- Months Months Months Months Ended Ended % Inc Ended Ended % Inc June 30, June 30, (Dec) June 30, June 30, (Dec) 2007 2006 2007 2006 Requisitions Rec’d (cases) 6,551 4,420 48.2% 3,468 2,472 40.3% Number of Tests Performed 8,678 6,139 41.4% 4,482 3,475 29.0% Avg. # of Tests / Requisition 1.32 1.39 (4.6%) 1.29 1.41 (8.1)% Total Testing Revenue $4,586,694 $3,111,293 47.4% $2,344,032 $1,767,492 32.6% Avg Revenue/ Requisition $ 700.15 $ 703.91 (0.5%) $ 675.90 $715.00 (5.5%) Avg Revenue/ Test $ 528.54 $ 506.81 4.3% $ 522.99 $508.63 2.8%
NeoGenomics, Inc.
CONTACT: Investor Relations, Steven C. Jones, Director of InvestorRelations of NeoGenomics, Inc., +1-239-325-2001, sjones@neogenomics.org, orFrank N. Hawkins, or Julie Marshall, both of Hawk and Associates, Inc.,+1-305-451-1888, Info@hawkassociates.com, both for NeoGenomics, Inc.
