NeoGenomics Reports 17% Revenue Growth to Record $69 Million

FT. MYERS, Fla., Oct. 30, 2018 (GLOBE NEWSWIRE) -- NeoGenomics, Inc. (NASDAQ: NEO), a leading provider of cancer-focused genetic testing services, today reported its results for the third quarter of 2018.

Third Quarter 2018 Highlights:

•   17% increase in consolidated revenue  
•   14% increase in clinical genetic testing volume(1)
•   21% increase in Pharma Services revenue; 75% increase in Pharma Services backlog
•   Completed $135 million, net equity offering 
•   Announced acquisition of Genoptix in October for $125 million in cash and 1 million shares of NeoGenomics common stock

Consolidated Revenues for the third quarter of 2018 were $69.1 million, an increase of 17% over the same period in 2017. Clinical genetic test volume(1) increased by 14% year over year.  Average revenue per clinical genetic test (“Revenue per Test”) increased by 3% to $320.

Consolidated gross profit improved by $7.4 million, or 30%, to $32.3 million and consolidated gross margin improved by approximately 468 basis points year-over-year to 47%. Gross margin improvement was primarily driven by productivity gains, cost efficiencies, and the impact of Hurricanes in the 2017 results.  Average cost-of-goods-sold per clinical genetic test ("Cost per Test") decreased by 6%.

Consolidated operating expenses increased by $1.4 million, or 5% from the prior year, primarily due to increases in payroll and payroll related costs as a result of an increased number of employees as well as increases in professional fees. 

Net income in Quarter 3 was $2.0 million compared to net loss of $4.3 million in the prior year’s third quarter. 

Adjusted EBITDA(2) was $11.3 million in Quarter 3, a 53% improvement from the prior year. Adjusted Net Income(2) was $4.6 million compared to Adjusted Net Loss of $0.6 million in the prior year.

Cash collections remained strong and the Company successfully completed a $135 million equity offering during the quarter. Days Sales Outstanding (“DSO”) increased by 2 days from the second quarter of 2018 to 84 days.

Douglas M. VanOort, the Company’s Chairman and CEO, commented, “Third quarter results were outstanding. Clinical and Pharma Services Divisions each reported record revenue. Test volume growth in our Clinical Division remained strong driven by gains in market share, and our reimbursement initiatives began to have some impact. Pharma Services Division growth reflects our ability secure larger contracts and more later-stage clinical trials.  

We were also pleased to achieve record levels of profitability.  Productivity gains and quality and process improvement initiatives helped drive down the average cost-per-test, and margins improved dramatically. Adjusted EBITDA improved despite our investments in a variety of future growth initiatives.

Looking forward, we are excited about a number of significant new customer wins in both divisions, and about several new strategic opportunities. We are also excited about our recently announced acquisition of Genoptix, and are beginning to plan for the integration activities.  Our teams are energized about our increasing ability to provide even better service to all segments of the oncology market, including oncologists, pathologists, hospitals, and the Pharma industry.” 
     
2018 Financial Outlook:

Due to the improved operating performance and an estimated $2.6 million of non-recurring acquisition related transaction expenses, NeoGenomics is updating its 2018 revenue and earnings guidance (all figures in millions, except per share amounts).

Please also refer to the tables reconciling forecasted Adjusted Net Income, Adjusted Diluted EPS and Adjusted EBITDA to their closest GAAP equivalents in the section of this report entitled “Reconciliation of Non-GAAP Financial Guidance to Corresponding GAAP Measures.”

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.
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(1) Clinical genetic tests exclude tests performed for Pharma Services customers and tests performed by PathLogic.

(2) NeoGenomics has provided adjusted financial information that has not been prepared in accordance with GAAP, including Adjusted EBITDA, Adjusted Net Income, and Adjusted Diluted EPS.  Each of these measures is defined in the section of this report entitled “Use of Non-GAAP Financial Measures,” and the basis for using these measures is explained in the section entitled “Basis for Non-GAAP Adjustments.”  See also the tables reconciling such measures to their closest GAAP equivalent.

Conference Call
The Company has scheduled a web-cast and conference call to discuss their third quarter results on Tuesday, October 30, 2018 at 8:30 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 8:30 AM on November 6, 2018, and can be accessed by dialing (877) 481-4010 (domestic) and (919) 882-2331 (international). The playback conference ID Number is 37546. The web-cast may be accessed under the Investor Relations section of our website at www.neogenomics.com or http://www.investorcalendar.com/event/37546. An archive of the web-cast will be available until 08:30 AM on January 30, 2019.

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. The Company’s Pharma Services division serves pharmaceutical clients in clinical trials and drug development.  

Headquartered in Fort Myers, FL, NeoGenomics operates CAP and CLIA certified laboratories in Aliso Viejo and Fresno, California; Tampa and Fort Myers, Florida; Houston, Texas; Nashville, Tennessee and Rolle, Switzerland. NeoGenomics serves the needs of pathologists, oncologists, academic centers, hospital systems, pharmaceutical firms, integrated service delivery networks, and managed care organizations throughout the United States, and pharmaceutical firms in Europe. For additional information about NeoGenomics, visit http://neogenomics.com/.

Forward Looking Statements
Certain information contained in this press release constitutes forward-looking statements for purposes of the safe harbor provisions of The Private Securities Litigation Reform Act of 1995, including the information set forth in the “Full-Year 2018 Financial Outlook”. 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 as the result of the Company’s ability to continue gaining new customers, offer new types of tests, integrate its acquisition of the Genoptix  business and otherwise implement its business plan, as well as additional factors discussed under the heading “Risk Factors” and elsewhere in the Company’s Annual Report on Form 10-K filed with the SEC on March 13, 2018. As a result, this press release should be read in conjunction with the Company's periodic filings with the SEC. In addition, it is the Company’s practice to make information about the Company available by posting copies of its Company Overview Presentation from time to time on the Investor Relations section of its website at http://ir.neogenomics.com/.

Forward-looking statements represent the Company’s estimates only as of the date such statements are made (unless another date is indicated) and should not be relied upon as representing the Company’s estimates as of any subsequent date. While the Company may elect to update forward-looking statements at some point in the future, it specifically disclaims any obligation to do so, even if its estimates change.

For further information, please contact:

NeoGenomics, Inc.     
William Bonello             
Chief Strategy and Corporate Development Officer
Director, Investor Relations
(239)690-4238 (w) (239)284-4314 (m)
bill.bonello@neogenomics.com