NeoGenomics, Inc. (OTC Bulletin Board: NGNM), a leading provider of cancer-focused genetic testing services today reported its results for the third quarter 2010.
Third Quarter 2010 Highlights:
- Revenue growth of 19 % vs. Q3 2009
- Test volume growth of 29% vs. Q3 2009
- Average revenue/test increased by 2.5% sequentially vs. Q2 2010
- Completed implementation of next generation laboratory information system
Revenue for the three months ended September 30, 2010 was $8.7 million, a 19% increase over the $7.3 million reported in the third quarter 2009. Test volume increased by approximately 29% over the comparable quarter last year. After adjusting for the impacts caused by internalization of bladder cancer FISH testing and immunohistochemistry testing by the Company's largest client beginning in mid 2009, revenue and test volume growth from all other clients was approximately 24% and 42%, respectively. Average revenue per test stabilized in the third quarter at approximately $601, marking the first quarterly sequential increase in over a year.
Sales and marketing expenses increased by approximately $190,000, or 11% over last year, driven primarily by an increase in the number of sales and marketing personnel and sales recruiting expenses. General and administrative expenses increased by approximately $461,000, or 19%, primarily as a result of additional information technology personnel, R&D activities, and to approximately $100,000 of non-recurring charges related to a reduction in force that was completed in September. The Company estimates that this reduction in force will result in approximately $1.5 million of annual savings which will begin to take effect in the fourth quarter. Net loss for the quarter was $1.2 million or ($0.03)/share versus a net loss of $755,000 or ($0.02)/share in the third quarter 2009.
Doug VanOort, the Company's Chairman and CEO, commented, "Although our financial results don't fully reflect the improvements in our business yet, we believe the company is in a stronger position today than ever before. During the last quarter, we made significant changes in our management team, successfully converted our entire laboratory information system, and implemented changes to reduce our cost structure. We are continuing to implement initiatives to increase our sales force productivity, and with important managed care plans now under contract, we are beginning to experience price stabilization. It is also significant to note that the impact from the internalization of over $4.0 million annually of high margin revenue by the company's largest customer is now fully behind us. Moving forward, we expect to grow from a more stable base of revenue and our team is focused on driving sustainable revenue growth and achieving profitability."
The Company also announced today that it expected to return to positive Adjusted EBITDA in the fourth quarter and released preliminary guidance for 2011 of approximately $41 to $45 million of revenue and $3.0 to $5.0 million of Adjusted EBITDA. This guidance is based on organic growth in the current business, and the Company reserves the right to adjust this guidance at any time as a result of acquisitions or other strategic initiatives that it may undertake and/or 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.
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