NeoGenomics Reports Revenue of $87 Million in the Second Quarter amid COVID-19 Pandemic – Stockhouse

Second-Quarter 2020 Results and Highlights:

FORT MYERS, FL / ACCESSWIRE / July 28, 2020 / NeoGenomics, Inc. (NASDAQ:NEO) (the "Company"), a leading provider of cancer-focused genetics testing services, today announced its second-quarter results for the period ended June 30, 2020.

"As expected, second quarter financial results were challenging due to the global COVID-19 crisis, which reduced both revenue and earnings," said Douglas M. VanOort, Chairman and CEO of NeoGenomics.

"Even in the midst of this pandemic, we made several strategic moves and invested in our business. We fortified our balance sheet with a successful offering of both common stock and convertible securities, we strategically invested in Inivata for access to liquid biopsy and minimal residual disease testing capabilities, we launched a suite of liquid biopsy tests, we moved forward with investments to further globalize our Pharma Services business, and we built and operationalized a high-capacity COVID-19 testing laboratory. We believe these investments will deliver both near-term and long-term growth, and that we exited the second quarter in a stronger competitive position for the future."

Second-Quarter Results

Consolidated revenue for the second quarter of 2020 was $87 million, a decrease of 14% over the same period in 2019. Clinical Services revenue decreased year-over-year by 17% to $74 million driven by a clinical test volume(1) decrease of 18%. Average revenue per clinical test ("revenue per test") remained stable at $351. Pharma Services revenue grew by 3% to $13 million compared to the second quarter of 2019, primarily due to the January 10, 2020 acquisition of the Oncology Division assets of Human Longevity, Inc. ("HLI - Oncology"). While disruptions in volume stemming from the COVID-19 pandemic reduced growth in both Divisions, there was steady improvement throughout the quarter.

Gross profit was $28.0 million, a decline of 42.8%, compared to the second quarter of 2019. This reduction was the result of the combined effect of lower test volume due to the impact of the COVID-19 pandemic and our decision to retain employees.

Operating expenses increased by $2 million, or 5%, compared to the second quarter of 2019, reflecting investments in informatics, growth initiatives and costs associated with the integration of HLI - Oncology.

Net loss for the quarter was $7 million compared to net income of $2 million for the second quarter of 2019.

Adjusted EBITDA(2) was negative $7 million for the quarter compared to positive $15 million in the second quarter of 2019. Adjusted Net (Loss) Income(2) was a loss of $4 million compared to income of $7 million in the second quarter of 2019.

Cash and cash equivalents, including restricted cash, was $331 million and days sales outstanding ("DSO") was 92 days at the end of the second quarter of 2020 due to the impact of COVID-19 and the distribution of revenue.

(1) Clinical tests exclude requisitions, tests, revenue and costs for Pharma Services and COVID-19 Polymerase Chain Reaction ("PCR") tests.

(2) The Company has provided adjusted financial information that has not been prepared in accordance with GAAP, including Adjusted EBITDA, Adjusted Net (Loss) Income, and Adjusted Diluted EPS. Each of these measures is defined in the section of this report entitled "Use of Non-GAAP Financial Measures." See also the tables reconciling such measures to their closest GAAP equivalent.

Conference Call

The Company has scheduled a webcast and conference call to discuss their first quarter results on Tuesday, July 28, 2020 at 8:30 AM EDT. Interested investors should dial (844) 602-0380 (domestic) and (862) 298-0970 (international) at least five minutes prior to the call. A replay of the conference call will be available until 8:30 AM EDT on August 11, 2020, and can be accessed by dialing (877) 481-4010 (domestic) and (919) 882-2331 (international). The playback conference ID Number is 35578. The webcast may be accessed under the Investor Relations section of our website at http://www.neogenomics.com. An archive of the webcast will be available until 08:30 AM EDT on October 28, 2020.

About NeoGenomics, Inc.

NeoGenomics, Inc. specializes in cancer genetics testing and information services. The Company provides one of the most comprehensive oncology-focused testing menus in the world for physicians to help them diagnose and treat cancer. The Company's Pharma Services Division serves pharmaceutical clients in clinical trials and drug development.

Headquartered in Fort Myers, FL, NeoGenomics operates CAP accredited and CLIA certified laboratories in Fort Myers and Tampa, Florida; Aliso Viejo, Carlsbad, Fresno and San Diego, California; Houston, Texas; Atlanta, Georgia; Nashville, Tennessee; and CAP accredited laboratories in Rolle, Switzerland, and Singapore. NeoGenomics serves the needs of pathologists, oncologists, academic centers, hospital systems, pharmaceutical firms, integrated service delivery networks, and managed care organizations throughout the United States, and pharmaceutical firms in Europe and Asia. For additional information about NeoGenomics, visit http://www.neogenomics.com/

Forward Looking Statements

Certain information contained in this press release constitutes forward-looking statements for purposes of the safe harbor provisions of The Private Securities Litigation Reform Act of 1995. 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 as the result of the Company's ability to continue gaining new customers, respond to the effects of the COVID-19 outbreak, offer new types of tests, integrate its acquisitions and otherwise implement its business plan, as well as additional factors discussed under the heading "Risk Factors" and elsewhere in the Company's Annual Report on Form 10-K filed with the SEC on February 28, 2020. As a result, this press release should be read in conjunction with the Company's periodic filings with the SEC. In addition, it is the Company's practice to make information about the Company available by posting copies of its Company Overview Presentation from time to time on the Investor Relations section of its website at http://ir.neogenomics.com/.

Forward-looking statements represent the Company's estimates only as of the date such statements are made (unless another date is indicated) and should not be relied upon as representing the Company's estimates as of any subsequent date. While the Company may elect to update forward-looking statements at some point in the future, it specifically disclaims any obligation to do so, even if its estimates change.

For further information, please contact:

NeoGenomics, Inc.

William Bonello Director, Investor Relations (239) 690-4238 (w) (239) 284-4314 (m) bill.bonello@neogenomics.com

NeoGenomics, Inc. CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands)

ASSETS

Cash and cash equivalents

Accounts receivable, net

Inventories

Other current assets

Total current assets

Property and equipment (net of accumulated depreciation of $80,143 and $68,809 respectively)

Operating lease right-of-use assets

Intangible assets, net

Goodwill

Restricted cash, non-current

Prepaid lease asset

Investment in non-consolidated affiliate

Other assets

TOTAL ASSETS

LIABILITIES AND STOCKHOLDERS' EQUITY

Accounts payable and other current liabilities

Short-term portion of financing obligations

Short-term portion of operating leases

Total current liabilities

Long-term portion of financing obligations

Long-term portion of operating leases

Convertible senior notes, net

Deferred income tax liability, net

Other long-term liabilities

Total long-term liabilities

TOTAL LIABILITIES

TOTAL STOCKHOLDERS' EQUITY

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

NeoGenomics, Inc. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (In thousands, except per share amounts)

NET REVENUE:

Clinical Services

Pharma Services

Total revenue

COST OF REVENUE

GROSS PROFIT

Operating expenses:

General and administrative

Research and development

Sales and marketing

Total operating expenses

(LOSS) INCOME FROM OPERATIONS

Interest expense, net

Other (income) expense, net

Loss on extinguishment of debt

Loss on termination of cash flow hedge

(Loss) income before taxes

Income tax (benefit) expense

NET (LOSS) INCOME

NET (LOSS) INCOME PER SHARE

Basic

Diluted

WEIGHTED AVERAGE COMMON SHARES OUTSTANDING

Basic

Diluted

NeoGenomics, Inc. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (In thousands)

CASH FLOWS FROM OPERATING ACTIVITIES

Net loss

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation

Loss on disposal of assets

Loss on debt extinguishment

Loss on termination of cash flow hedge

Amortization of intangibles

Amortization of debt issue costs

Amortization of convertible debt discount

Non-cash stock-based compensation

Non-cash operating lease expense

Changes in assets and liabilities, net

Net cash (used in) provided by operating activities

CASH FLOWS FROM INVESTING ACTIVITIES

Purchases of property and equipment

Business acquisition

Acquisition working capital adjustment

Investment in non-consolidated affiliate

Excerpt from:
NeoGenomics Reports Revenue of $87 Million in the Second Quarter amid COVID-19 Pandemic - Stockhouse

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