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NeoGenomics Announces Results for the 3rd Quarter 2007
Date:11/14/2007

FORT MYERS, Fla., Nov. 14 /PRNewswire-FirstCall/ -- NeoGenomics, Inc. (OTC Bulletin Board: NGNM), a premier, high-complexity cancer genetics laboratory, today announced its results for the third quarter of FY 2007. Significant accomplishments during the third quarter and for the first nine months of the year included the following:

Third Quarter 2007 Accomplishments:

-- 95% year-over-year increase in revenues in Q3 07 vs. Q3 06

-- 33% sequential growth in revenue from Q2 07

-- Completion of the first three contract assignments for our new Contract

Research Organization (CRO) in California

-- Achieved participating provider status with six more insurance plans

-- Roll-out of NeoFlow(TM), a virtual flow cytometry analysis tool with

custom reporting

Year-to-Date Accomplishments:

-- 64% year-over-year increase in revenues in YTD 9 Months FY 07 vs. 9

Months FY 06

-- Continued rapid expansion of NeoFISH(TM) customers

-- Expansion of Sales & Marketing staff to 16 professionals from 4 at end

of Q3 06

During the third quarter, we increased revenues by approximately 95% to $3.12 million from $1.60 million during Q3 06, largely as a result of a greater number of tests being performed for our customers. Average revenue per requisition increased by approximately 2% to $683.01 in Q3 07 from $668.01 in Q3 06. Average revenue per test increased by a robust 14% to $552.30 in Q3 07 from $484.10 in Q3 06. Gross profit increased by approximately 82% to $1.60 million in Q3 07 from $880,000 in Q3 '06. We experienced some compression in our gross margin percentage on a year-over-year basis, because the popular PathVysion breast cancer FISH test is only a two probe test which has relatively high supply costs and significantly lower average reimbursement than other FISH tests and, we are doing significantly more of these tests this year. On a sequential basis, however, our gross margin percentage increased by approximately 100 basis points from Q2 07 to approximately 51.3% in Q3 07. Moving forward, we expect that our gross margins will continue to improve as the percentage of higher margin flow cytometry tests in our mix of business continues to increase.

Selling, general and administrative expenses increased in the third quarter by approximately 184% to $2.18 million from $766,000 in 3Q 06. This increase was largely a result of increased headcount, professional and consulting fees, and bad debt reserves related to higher revenues. In addition, during Q3 07 we incurred approximately $274,000 of litigation- related legal fees that were not present in Q3 06. On a sequential basis, however, our SG&A expenses only increased by approximately 133,000 or 6% from Q2 07, almost all of which is due to an increase in the amount of litigation expenses we accrued in Q3 07 from Q2 07. Absent this factor, our SG&A was essentially flat relative to Q2 07. Our net loss for Q3 07 expanded to $591,000 or $0.02/share from net income of $32,000 or $0.00/share in Q3 06. This increase in net loss on a year over year basis is a direct result of our decision earlier in the year to begin preparing the company to scale revenue at a faster rate in 2008, which has resulted in a significant expansion of our headcount and facilities expense since the beginning of the year. On a sequential basis, however, our net loss position improved substantially as net losses for Q3 07 decreased by approximately $382,000 or 39% from Q2 07.

Robert Gasparini, the Company's President and Chief Scientific Officer, commented, "We are especially pleased with our performance in Q3 07 given that historically the third quarter is the slowest quarter of the year due to summer seasonality issues. For NeoGenomics to increase revenues 33% on a sequential basis from Q2 is a significant accomplishment, especially given that our third quarter has historically been down or flat as compared to our second quarter. I am also pleased to report that our new Contract Research Organization (CRO) completed its first three contracts during Q3. Although the revenue from this activity was modest, we believe we can continue to penetrate this important market segment and have hired a dedicated sales person to ramp up this activity. The third quarter also saw the startup of our managed care team and a new focus on becoming a participating provider with various insurance carriers. We expect that these new contracts and our continued focus on obtaining additional contracts will help to increase the speed of our payments and enhance our overall reimbursements."

Mr. Gasparini concluded by saying, "There are a lot of terrific things happening at NeoGenomics and our momentum is continuing to build. The number of customers currently in trials with us at the end of Q3 07 increased by over 50% from the end of Q2 07 and our tech-only, NeoFISH(TM) product continues to surpass all of our expectations. In addition, we rolled out a major improvement to our tech-only, flow cytometry product during Q3. This new product platform called NeoFlow(TM) has substantial new functionality, which we believe will help us attract significant incremental flow cytometry business, one of our highest margin product lines. While we still have some work to do to overcome our net losses, we are optimistic that our recent investments in additional sales personnel will allow us to begin scaling revenue more rapidly. We are also encouraged by the fact that 49% of the incremental $779,000 of revenues we posted in Q3 07 relative to Q2 07 dropped to the bottom line in the third quarter. This helped to decrease our net losses in the quarter by 39% from Q2 07 demonstrating the operating leverage in our business model. We believe the investments we have made and continue to make in 2007 are starting to pay off and we expect to return to profitability in early 2008."

The Company has scheduled a webcast and conference call to discuss these results later this morning at 11:00 AM EST. Interested investors should dial (877) 407-8035 (domestic) and (201) 689-8035 (international) at least five minutes prior to the call. A replay of the conference call will be available until 11:59 PM on November 28, 2007 and can be accessed by dialing (877) 660- 6853 (domestic) and (201) 612-7415 (international). The playback account number is 286 and the playback conference ID Number/PIN Number is 261161. The web-cast may be accessed under the Investor Relations section of our website at http://www.neogenomics.org or at the website of our Investor Relations firm, Hawk Associates, at http://www.hawkassociates.com/ngnmmore.aspx or at http://www.vcall.com/IC/CEPage.asp?ID=118989. An archive of the web-cast will be available until 11:59 PM EST on February 15, 2008.

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, hospitals and other reference laboratories throughout the United States. For additional information about NeoGenomics, visit http://www.neogenomics.org.

Interested parties can also access additional investor relations material from the American Microcap Institute at http://www.americanmicrocapinstitute.com/ngnm/ or from Hawk Associates at http://www.hawkassociates.com. An investment profile about NeoGenomics may be found at http://www.hawkassociates.com/ngnmprofile.aspx.

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, including, but not limited to, the Company has incurred significant losses since its inception and has experienced negative operating margins and negative cash flows from operations, any adverse effect or limitations caused by governmental regulations, the company's ability to attract and retain qualified personnel, to initiate and develop client relationships, to gain market acceptance of service offerings, as well as other risks described from time to time in the company's filings with the Securities and Exchange Commission. Although the Company has used its best efforts to be accurate in making those forward-looking statements, there can be no assurance that the assumptions made by management will materialize. In addition, the information set forth in the Company's most recently filed Form 10-KSB describes certain additional risks and uncertainties that could cause actual results to vary materially from the future results covered in such forward-looking statements. The company undertakes no obligation to publicly revise or update the forward-looking statements to reflect new information, subsequent events or otherwise.

NeoGenomics, Inc.

CONSOLIDATED BALANCE SHEET AS OF

September 30, 2007

(Unaudited)

ASSETS

CURRENT ASSETS $4,295,698

PROPERTY AND EQUIPMENT, NET 1,776,513

OTHER ASSETS 250,828

TOTAL ASSETS $6,323,039

LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES $1,747,768

LONG TERM LIABILITIES 712,758

TOTAL LIABILITIES 2,460,526

STOCKHOLDERS' EQUITY 3,862,513

TOTAL LIABILITIES AND STOCKHOLDER'S EQUITY $6,323,039

NeoGenomics, Inc.

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

For the For the For the For the

Nine-Months Nine-Months Three-Months Three-Months

Ended Ended Ended Ended

September 30, September 30, September 30, September 30,

2007 2006 2007 2006

REVENUE $7,709,408 $4,713,172 $3,122,714 $1,601,880

COST OF REVENUE 3,623,860 2,023,479 1,521,313 720,866

GROSS PROFIT 4,085,548 2,689,693 1,601,401 881,014

OTHER OPERATING

EXPENSES:

Selling, general

and

administrative 5,664,053 2,158,471 2,178,339 765,687

Interest expense,

net 205,806 231,638 14,325 83,432

Total other

operating

expenses 5,869,859 2,390,109 2,192,664 849,119

NET INCOME

(LOSS) $(1,784,311) $299,584 $(591,263) $31,895

NET INCOME (LOSS)

PER SHARE:

Basic $(0.06) $0.01 $(0.02) $0.00

Diluted $(0.06) $0.01 $(0.02) $0.00

WEIGHTED AVERAGE

NUMBER OF SHARES

OUTSTANDING:

Basic 29,221,778 25,891,331 31,309,353 26,599,981

Diluted 29,221,778 29,318,402 31,309,353 31,172,953

NeoGenomics, Inc.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

For the For the

Nine-Months Nine-Months

Ended Ended

September 30, September 30,

2007 2006

NET CASH USED IN OPERATING ACTIVITIES $(2,189,163) $(301,801)

NET CASH USED IN INVESTING ACTIVITIES (606,747) (752,679)

NET CASH PROVIDED BY FINANCING ACTIVITIES 3,479,577 1,454,787

NET INCREASE IN CASH AND CASH

EQUIVALENTS 683,668 400,669

CASH AND CASH EQUIVALENTS, BEGINNING OF

PERIOD 126,226 10,944

CASH AND CASH EQUIVALENTS, END OF PERIOD $809,934 $411,613

SUPPLEMENTAL DISCLOSURE OF CASH FLOW

INFORMATION:

Interest paid $169,320 $195,286

Income taxes paid $- $-

SUPPLEMENTAL DISCLOSURE OF NON-CASH

INVESTING AND FINANCING ACTIVITIES:

Equipment leased under capital lease $464,811 $481,175

NeoGenomics, Inc. Supplemental Information on Customer Requisitions Received and Tests Performed

For the For the For the For the

Nine- Nine- Three- Three-

Months Months Months Months

Ended Ended Ended Ended

Sept 30, Sept 30, % Inc Sept 30, Sept 30, % Inc

2007 2006 (Dec) 2007 2006 (Dec)

Requisitions 11,123 6,818 63.1% 4,572 2,398 90.7%

Rec'd (Cases)

# of Tests 14,332 9,448 51.7% 5,654 3,309 70.9%

Performed

Avg. # of 1.29 1.38 (6.5%) 1.24 1.38 (10.1)%

Tests/Case

Testing

Revenue $7,709,408 $4,713,172 63.6% $3,122,714 $1,601,880 94.9%

Avg Revenue/ $693.11 $691.28 0.3% $683.01 $668.01 2.2%

Requisition

Avg Revenue/ $534.19 $498.85 7.1% $552.30 $484.10 14.1%

Test


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SOURCE NeoGenomics, Inc.
Copyright©2007 PR Newswire.
All rights reserved

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