NeoGenomics, Inc. Announces Quarterly Profitability and Financial Results for First Quarter of FY 2006
Tuesday May 9, 7:00 am ET
Company Also Announces Opening of Second Laboratory in Nashville, TN
FORT MYERS, Fla., May 9 /PRNewswire-FirstCall/ -- NeoGenomics, Inc. (OTC Bulletin Board: NGNM - News) announced today quarterly profitability and its financial results for the first quarter of 2006.
Significant accomplishments during the first quarter included the following:
-- 484% year-over-year increase in revenues in Q1 '06 vs. Q1 '05;
-- 79% sequential increase in revenues in Q1 '06 vs. Q4 '05;
-- Average revenue/test increased 5.1% to $504.43 in Q1 '06 from $478.58
in Q4 '05;
-- 37% of cases ordered more than one test per case in Q1 '06 (64%
excluding cases such as UroVysion and PathVysion where only one test is
normally ordered);
-- 120% increase in breast, bladder and cervical FISH testing in Q1 '06
vs. Q4 '05; and
-- Gross margin increase to 57% in Q1 '06, compared to 36% in Q4 '05.
President and Chief Scientific Officer Robert Gasparini said, "I am delighted with the progress we continue to make and am pleased to report that the Company achieved the all-important milestone of becoming net income profitable for the first quarter of 2006. We believe that we have turned the corner to sustained profitability while at the same time scaling our business for substantial growth. During the quarter, we were successful in closing several strategic relationships with large customers, which we believe will continue to fuel our growth throughout 2006 and beyond. In addition, our relatively new testing services for breast, bladder and cervical cancer continue to be well received by the market."
The Company also announced that on April 18, 2006 it completed the purchase and merger of The Center for Cytogenetics, a private genetics testing company located in Nashville, TN, into NeoGenomics, Inc. The merger is of strategic importance and results in the Company acquiring additional capacity and a second site to mitigate the risk of weather-related phenomena common to Southwest Florida. Terms of the merger were not disclosed.
Gasparini said, "The opening of our Company's second laboratory location in Nashville, TN, provides for geographic diversity, additional capacity and is central to our hurricane disaster plan. This facility should allow us to scale more rapidly to meet increasing customer demand. We remain actively engaged in discussions and continue to seek acquisitions which will allow us to further increase our capacity and ramp-up our capabilities."
Acting Principal Financial Officer Steven Jones said, "During the first quarter of 2006, we experienced terrific growth both on a year-over-year basis from Q1 '05 and a sequential basis from Q4 '05. On a year-over-year basis, the Company increased revenues by approximately 484% to $1,344,000 in Q1 '06 from $230,000 in Q1 '05, largely as a result of a greater number of tests being performed for our customers. At the same time, our requisitions increased 431% to 1,948 in Q1 '06 from 367 requisitions in Q1 '05, and our tests increased 470% to 2,664 in Q1 '06 from 467 during Q1 '05. During the first quarter average revenue per requisition increased approximately 10% to $689.84, versus $627.23 during the first quarter of 2005."
"Perhaps most significant, however, was our sequential revenue growth and increases in gross margins from the fourth quarter of 2005. On a sequential basis, we increased revenues by 79% from the fourth quarter of 2005, and our gross margin increased to 57% of revenue from 36% in the fourth quarter of 2005. This increase was primarily driven by the achievement of greater economies of scale as a result of increased testing volumes, a realignment of our pricing policies to be more in line with our overall mix of business, and an aggressive cost containment program begun in the fourth quarter of 2005. When combined, these factors allowed us to achieve significant increases in productivity and decreases in our average cost per test. Although we continue to seek ways to reduce these costs even further, we expect that the integration of our Nashville operations will have some negative impact on our gross margin over the coming quarters. We believe that our long-term margins will eventually settle in the 50-55% range."
"General and administrative expenses also increased in the first quarter by approximately 133% to $591,000 from $254,000 in the first quarter of FY 2005. This increase was largely a result of the increased expenses associated with our management team, which was recruited in the later half of 2005 to position the Company during FY 2006, as well as increased commissions cost related to increased sales."
"During the first quarter of 2006, EBITDA was approximately $225,000, which is an increase of $386,000 from the negative EBITDA of approximately $161,000 in the first quarter of 2005. A reconciliation of the EBITDA calculation to GAAP net income (loss) is contained at the back of this press release. Our net income of approximately $106,000 for the first quarter of FY 2006 increased by $321,000, versus a net loss of $215,000 during the first quarter of 2005. This resulted in earnings per basic share and earnings per diluted share of approximately $0.004."
"At the present time we reiterate our previous guidance for FY 2006 and FY 2007, which we made in our press release of March 14, 2006. Given our current rate of growth, our future performance is exceptionally difficult to predict with any accuracy (especially our FY 2007 guidance). However, based on the current trends, we do not believe any adjustments to this guidance are necessary at this time. Of course, we reserve the right to adjust this guidance at any time based on the ongoing execution of our business plan, and by no means should these estimates be construed as a guarantee of future performance," Jones said.
The Company has scheduled a web-cast and conference call to discuss these results on Thursday, May 11, 2006 at 11:00 AM ET. Interested investors should dial 1-877-407-0778 (domestic) and 1-201-689-8565 (international) at least five minutes prior to the call. A replay of the conference call will be available for two weeks and can be accessed by dialing 1-877-660-6853 (domestic) and 1-201-612-7415 (international). The playback account number will be 286 and the playback pin number is 202503. The webcast may be accessed under the Investor Relations section of the NeoGenomics website at neogenomics.org. An archive of the webcast will be available until 11:00 a.m. ET on August 12, 2006.
About NeoGenomics, Inc.
NeoGenomics, Inc. is a high-complexity CLIA-certified clinical laboratory that offers cancer genetic diagnostic testing services including cytogenetics, fluorescence in-situ hybridization (FISH), flow cytometry and molecular genetic testing. NeoGenomics is headquartered in Fort Myers, Fla., and services the needs of oncologists, pathologists, urologists, hospitals and other reference laboratories not offering genetic testing throughout the United States. For additional information about NeoGenomics, visit neogenomics.org. Interested parties can also access additional investor relations material, including an in-depth equity research report, from the American Microcap Institute at americanmicrocapinstitute.com. |
