FT. MYERS, Fla., Feb. 10, 2011 /PRNewswire/ — NeoGenomics, Inc. (OTC Bulletin Board: NGNM), a leading provider of cancer-focused genetic testing services, today reported its results for the fourth quarter 2010 and fiscal year ended December 31, 2010.
Fourth Quarter 2010 Highlights:
- Revenue growth of 12%
- Adjusted EBITDA positive
- Average revenue per test stabilized
- Diluted loss per share of $(0.01)
Revenue for the fourth quarter 2010 was approximately $8.8 million, a 12% increase over fourth quarter 2009 revenue of $7.8 million. Test volume increased by approximately 13% and average revenue per test stabilized around the same levels as in fourth quarter 2009. Requisitions increased by approximately 12% while average number of tests per case remained nearly the same as in the prior year. After adjusting for the internalization of certain tests by one large client, revenue and test volume growth from all other clients grew by 17% and 20%, respectively.
Total selling, general and administrative (SG&A) expenses decreased by approximately $600,000 or 12% from last year’s fourth quarter. Sales and marketing spending continued at a rate of over 20% of revenue, however total sales and marketing expenses in this year’s fourth quarter decreased by approximately $200,000 or 12% from the same period last year, primarily as a result of the inclusion of severance cost in last year’s results. General and administrative expenses decreased by approximately $400,000 or 12% from the fourth quarter 2009 primarily due to a decline in bad debt, recruiting, and research and development expenses. After adjusting for the extra $500,000 of severance, recruiting and additional bad debt costs recorded in the fourth quarter 2009, total SG&A expenses decreased by approximately 2% on a year over year basis.
The company was awarded a $374,000 Therapeutic Discovery grant in the fourth quarter which is reported in other income. Net loss for the quarter was ($377,000) or ($0.01)/share versus a net loss of ($1,529,000) or ($0.04)/share in last year’s fourth quarter.
For the full year 2010, revenue was approximately $34.4 million, a 17% increase over 2009 revenue of $29.5 million. Test volume increased by approximately 26% and average revenue per test decreased by 7%. The reduction in average revenue per test was due primarily to contracts signed with three managed care organizations over the last eighteen months that have lower average-unit pricing. After adjusting for the internalization of certain testing by one large client, revenue and test volume growth from all other clients was approximately 25% and 36%, respectively.
Gross margin fell to 45.9% of revenue in 2010 from 51.6% in 2009 primarily due to the full year decreases in average revenue per test. Sales and marketing expenses increased by approximately $600,000 or 9% in 2010. General and administrative expenses increased by approximately $1.2 million or 12% in 2010. Despite these increases in selling general and administrative expenses, total SG&A expenses as a percentage of revenue declined from approximately 57.5% in 2009 to approximately 54.5% in 2010. Net loss in 2010 was approximately ($3.3) million or ($0.09)/share versus a net loss of ($2.2) million or ($0.06)/share in 2009.
Douglas VanOort, Chairman and Chief Executive Officer, stated “We experienced many headwinds in 2010 that impacted our revenue growth and our profitability. Despite these headwinds, we grew our core revenue faster than many in our laboratory peer group. In addition, the quality of our service to clients is outstanding and our recent cost cutting initiatives and productivity enhancements are starting to pay dividends. I am particularly pleased that we saw a healthy incremental increase in operating income on our fourth quarter revenue increase. We also reported positive Adjusted EBITDA in the fourth quarter for the first time all year.”
Mr. VanOort continued, “We are in a stronger position than we have ever been moving into 2011. We have a firm control on costs and are aggressively implementing many sales and marketing initiatives to improve sales force productivity. We continue to believe that the flexibility of our tech-only service offering positions us well to assist clients navigating the rapidly changing health care environment. With the managed care contracting process largely behind us, modestly favorable average Medicare reimbursement rates for our mix of business in 2011, and successful implementation of our sales & marketing initiatives, we believe revenue growth momentum will increase as we move further into the year. Although the severe weather in much of the country is impacting our first quarter trends, we are re-iterating our previously issued guidance for 2011 of $41-45 million of revenue, $3-5 million of Adjusted EBITDA, and a return to quarterly profitability later in 2011.”
The Company has scheduled a webcast and conference call to discuss their Q4 and full year 2010 results at 11:00 AM EST today. 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 February 25, 2011 and can be accessed by dialing (877) 660-6853 (domestic) and (201) 612-7415 (international). The playback account number is 366906 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=163387. An archive of the web-cast will be available until 11:59 PM EST on May 11, 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.
For more news and information on NeoGenomics, 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/.