NeoGenomics reports 42% Test Volume Growth, 26% Revenue Growth and 22% Increase in Adjusted EBITDA for the Third Quarter 2012

FT. MYERS, Fla., Oct. 31, 2012 /PRNewswire/ -- NeoGenomics, Inc. (NASD OTC QB: NGNM), a leading provider of cancer genetic testing services today reported its results for the third quarter 2012.

Third Quarter 2012 Highlights:

• 42% Test Volume Growth
• 26% Revenue Growth  
• 22% Increase in Adjusted EBITDA
• Net Loss of ($0.02) per Share Due to Impacts from TC Grandfather Expiration
• New California Laboratory Location Opened

Revenue for the third quarter 2012 was $14.2 million, a 26% increase over third quarter 2011 revenue.  Test volume increased by 42%.  As a result of the expiration of the Medicare Technical Component (TC) Grandfather Clause on June 30^th, average revenue per test declined 12% from Quarter 3 2011 and 7% sequentially from Quarter 2 2012, in-line with the Company's previous guidance on this issue.  The Company estimates that this regulatory change resulted in a reduction in revenue of approximately $1.3 million during the quarter. 

Overall, gross profit increased to $5.9 million, a 16% increase from the third quarter 2011.  The decrease in average revenue per test from Quarter 3 2011 was partially offset by a 6% improvement in average cost per test during this period.  As a result, gross profit margin decreased to 41.5% in the third quarter 2012 from 44.8% in the third quarter of 2011. 

Total operating expenses were $6.6 million, a 31% increase from last year's third quarter, primarily as a result of a $683,000 increase in R&D expenditures related to new test development, as well as incremental personnel, commissions, and bad debt expense related to the increased test volume.  Third quarter G&A expenses included approximately $170,000 in one-time expenses related to the company's move into a larger laboratory facility in Irvine California.  Research and Development expenses included approximately $177,000 of incremental stock-based compensation expense due to the rise in the Company's stock price from the second quarter to the third quarter.  Net loss for the quarter was ($975,000), or ($0.02) per share, versus a net loss of ($143,000), or ($0.00) per share in last year's third quarter.  Despite the net loss, Adjusted EBITDA improved 22% to $842,000 vs. $693,000 in the prior year. 

Douglas M. VanOort, the Company's Chairman and CEO commented, "Although, we are disappointed that Congress did not extend the TC Grandfather clause, we are pleased with our performance in Quarter 3.  Our test volume growth continued the strong trends of previous quarters, even though our sales force spent a significant amount of time in the quarter educating existing clients about the TC Grandfather expiration rather than acquiring new clients.  With this distraction now behind us, we have returned our full focus to growth and performance.  We expect to overcome the impact from this regulatory change within a few quarters through aggressive cost savings, productivity improvements, new product introductions, and continued growth in each of our core laboratories."

Mr. VanOort continued, "Our new test development and growth activities continue to be very exciting.  In the third quarter we further expanded our molecular testing menu by launching several new markers and NeoTYPEä cancer profile panels.  With 29 new molecular tests launched this year, we believe we now have one of the most comprehensive molecular testing menus in the industry.  Molecular services are the fastest growing portion of our business, and we added significant capacity and substantially improved the profitability of this important testing service in the quarter.  We also launched our new 10-color Flow Cytometry platform and became the first national lab to offer this product on a technical component-only basis.  Other new products, including the array-based NeoARRAY^ä SNP/Cytogenetic profile, which provides more precise characterization of cytogenetic abnormalities, and a digital pathology and immunohistochemistry system are being launched over the next few months.  We also expect to benefit from additional capacity provided by our new California laboratory facility." 

Mr. VanOort concluded by saying, "We remain very optimistic about the strength of our business model.  Our sales pipeline is strong, we are executing plans to gain further efficiencies, and we remain committed to innovation.  By growing our business, lowering our costs and driving innovation, we are becoming America's premier cancer testing laboratory."

Fourth Quarter 2012 Financial Outlook
The Company also issued guidance for the fiscal fourth quarter today and is expecting revenue of $14.3 - $15.0 million and earnings of $0.00 to ($0.01) per share.  The Company also narrowed its previously issued full year revenue guidance to $59 - $60 million for FY 2012.  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)  Adjusted EBITDA is defined as earnings before interest, taxes, depreciation, amortization, other extraordinary or non-recurring charges, such as the costs related to moving our California facility and non-cash stock-based compensation expenses.  See table for a reconciliation to net income.

Conference Call
The Company has scheduled a web-cast and conference call to discuss their Q3 2012 results on October 31, 2012 at 11:00 AM EDT.  Interested investors should dial (800) 374-1317 (domestic) and (404) 665-9940 (international) at least five minutes prior to the call and ask for Conference ID 53483216.  An archive of the conference call will be available at http://us.reg.meeting-stream.com/neogenomicsinc_103112/ for a period of one year from the date of the conference call.  The web-cast may be accessed under the Investor Relations section of our website at http://www.neogenomics.com or http://us.reg.meeting-stream.com/neogenomicsinc_103112/.

About NeoGenomics, Inc.
NeoGenomics, Inc. is a high-complexity CLIA–certified clinical laboratory that specializes in cancer genetics testing, the fastest growing segment of the laboratory industry.  The company's testing services include cytogenetics, fluorescence in-situ hybridization (FISH), flow cytometry, immunohistochemistry, anatomic pathology and molecular genetic testing.  Headquartered in Fort Myers, FL, NeoGenomics has labs in Nashville, TN, Irvine, CA, Tampa, FL and Fort Myers, FL.  NeoGenomics services the needs of pathologists, oncologists, other clinicians and hospitals throughout the United States. For additional information about NeoGenomics, visit http://www.neogenomics.com.    

Interested parties can also access investor relations material from Hawk Associates at http://www.hawkassociates.com or [email protected] and from Zack's Investment Research at http://www.zacks.com or [email protected].

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.

SOURCE NeoGenomics, Inc.