NeoGenomics Reports First Quarter 2011 Results

FT. MYERS, Fla., April 21, 2011 /PRNewswire/ -- NeoGenomics, Inc. (NASD OTC BB: NGNM), a leading provider of cancer-focused genetic testing services today reported its results for the first quarter 2011.

First Quarter 2011 Highlights:

• Revenue growth of 5% vs. Q1 10 despite impacts from severe winter weather
• Test volume growth of 10% vs. Q1 10
• Increases in sales force productivity throughout quarter

Revenue for the first quarter 2011 was $8.8 million, a 5% increase over first quarter 2010 revenue of $8.4 million.  Test volumes increased by approximately 10% over the comparable quarter last year.  Severe weather impacted results during January and February, but volume improved steadily throughout the last half of the quarter.  After adjusting for the internalization of testing by one large client in 2010, revenue and test volume from all other clients grew by 11% and 19%, respectively.  

Average price-per-test declined by 5% from the first quarter 2010.  This reduction was primarily driven by a 50% decrease in the Company's average reimbursement for bladder cancer FISH testing as a result of Medicare and several commercial insurance carriers reducing reimbursement beginning in January 2011.  Bladder cancer FISH testing now comprises approximately 4% of total revenue compared to approximately 7% of revenue in Q4 2010. Contributing to the average price decline was a 1.75% decrease in reimbursement by Medicare for all tests covered by the Clinical Lab Fee Schedule.  In addition, one of the Company's larger Medicare carriers reduced the maximum allowable number of markers reimbursable for flow cytometry testing in late 2010.  This 5% decline in average unit price reduced revenue and gross profit by approximately $425,000 compared with quarter 1 last year.  

Sales and marketing expenses remained flat compared with the prior year.  General and Administrative ("G&A") expenses decreased by $79,000, or 3%, primarily as a result of a decrease in R&D expenditures. The Company continues to focus on managing general and administrative costs and the number of full-time equivalent employees was the same at the end of the first quarter 2011 as it was at the end of the first quarter 2010.  Net loss for the quarter was $893,000 or ($0.02)/share versus net loss of $750,000 or ($0.02)/share in the first quarter 2010.

Doug VanOort, the Company's Chairman and CEO, commented, "We are generally pleased with our first quarter results.  Although revenue was impacted by adverse weather during the first two months and a meaningful decline in average unit price, we finished the quarter very strong.   Indeed, the number of tests reported per day in March was 17% higher than it was in January. We expect sales momentum to continue to build as 2011 unfolds as a result of the significant investments we made to improve our sales force productivity over the last year."

Mr. VanOort continued, "The declines in average unit price in the first quarter were slightly higher than we anticipated, and had a disproportionately large impact on our profitability. We believe these price declines negatively impacted Adjusted EBITDA and net income by approximately $400,000 in the quarter.  Moving forward in 2011, we do not expect any more significant pressure on average unit price other than potential impacts due to changes in our test mix.  Thus, we should begin to see our gross margin increase as test volumes rise."

Mr. VanOort concluded, "We have started to actively explore listing on the either the NASDAQ Capital Market or the NYSE AMEX exchange.  Our goal is to complete a listing on either exchange by the end of this year."  

The Company also issued preliminary guidance for the second quarter 2011 today.  The Company expects revenue of approximately $9.3- $9.8 million with positive Adjusted EBITDA and a net loss of between $0.00 – ($0.01)/share. 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 Q1 2011 results on April 21, 2011, at 11:00 AM eastern time.  Interested investors should dial (877) 407-8033 (domestic) and (201) 689-8033 (international) at least five minutes prior to the call.  A replay of the conference call will be available until 11:59 PM on May 5, 2011 and can be accessed by dialing (877) 660-6853 (domestic) and (201) 612-7415 (international).  The playback account number is 371286 and the playback conference ID Number/PIN Number is 286.  The web-cast may be accessed under the Investor Relations section of our website at http://www.neogenomics.com or http://www.investorcalendar.com/IC/CEPage.asp?ID=164246.  An archive of the web-cast will be available until 11:59 PM EDT on July 21, 2011.

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.com.

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/.

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.