FT. MYERS, Fla., Jan. 7 /PRNewswire-FirstCall/ -- NeoGenomics, Inc. (OTC Bulletin Board: NGNM) announced today that it intends to take up to $500,000 in certain restructuring and other charges in the fiscal quarter ending December 31, 2009. These charges will cover costs in connection with restructuring the company's management team, including various severance obligations and recent recruiting fees. In addition, the Company is in the process of restructuring its relationship with Response Genetics, which provides NeoGenomics with KRAS-based molecular testing, which was unprofitable for the Company in 2009.
NeoGenomics also said the restructuring of the relationship with its largest client continued to have a significant impact. As a result, the Company will recognize approximately $1,100,000 less fluorescence in-situ hybridization (FISH) testing revenue from this client in the fourth quarter 2009 than it did in the fourth quarter 2008. This lost revenue had approximately 70% gross margins and thus far has only been replaced with approximately $300,000 of significantly lower margin immunohistochemistry testing revenue from this client.
Douglas VanOort, the Company's Chairman and CEO, stated, "Although we are still finalizing our year-end financials, we are currently expecting fourth quarter revenue in the range of $7.7 - $7.9 million and a net loss of approximately $1.3 - $1.5 million as a result of all of the above factors. While our sales force productivity continues to increase each month, it is not yet at an acceptable level. In addition, laboratory staffing has been increased in expectation of higher test volumes and for the launch of new products, and will result in a temporary reduction in gross margin. We currently expect fourth quarter 2009 gross margin to be approximately 47 - 48% of revenue."
"We are making significant organizational changes and expect to realize improvements in productivity. In addition, normal seasonal volume increases in the first quarter will add to our positive sales momentum and are expected to improve profitability. However, we continue to invest heavily in our new melanoma FISH test, which we expect to launch in late January. Investors should expect a net loss of approximately ($0.01)/share in the first quarter of 2010, but we believe that we can achieve break-even in the second quarter and return to profitability in the second half of 2010."
VanOort concluded, "We have nearly finished validating the new melanoma test and, thus far, the results are as we expected. We believe this new, one-of-a-kind FISH test will be very useful in helping to diagnose certain ambiguous and "grey zone" melanoma cases. Based on our market analysis and partner feedback, there appears to be considerable interest in this new test from the pathology community. Although we expect revenue from the melanoma test to start off modestly, we believe it will provide additional momentum for our business as 2010 unfolds."
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, and hospitals throughout the United States. For additional information about NeoGenomics, visit http://www.neogenomics.org.
For more news and information on NeoGenomics, please visit www.IRGnews.com/coi/NGNM where you can find a fact sheet on the company, investor presentations, and more. Interested parties can also access additional investor relations material, including an investment profile and an equity research report, from Hawk Associates at http://www.hawkassociates.com or from the American Microcap Institute at http://www.americanmicrocapinstitute.com/ngnm/.
SOURCE NeoGenomics, Inc.