NeoGenomics (NEO) Reports Prelim. Q3 Revenue of $63.1M

NeoGenomics, Inc. (NASDAQ: NEO), a leading provider of cancer-focused genetic testing services, announced today that it expects to report Quarter 3 revenue of approximately $63.1 million and Adjusted EBITDA(1) of approximately $6.0 million.

Clinical genetic test volume is expected to be approximately 162,500 tests, an increase of over 16% versus last year, and average-revenue-per-clinical-genetic test ("Revenue per Test") is expected to be approximately $343, an 11% decrease from last year. Average-cost-of-goods-sold per test ("Cost per Test") is expected to be approximately $181, an 11% improvement from last year, and consolidated gross profit margin is expected to be 45.7%, an increase of 70 basis points versus last year.

NeoGenomics estimates that Hurricanes Harvey and Irma depressed revenue by approximately $1.0 million in Quarter 3. The Company also expects to record a one-time, $1.3 million revenue adjustment to reflect a change in the process for estimating revenue for unbilled tests at quarter end. In addition, as a result of the divestiture of PathLogic, third quarter revenue will be approximately $1.3 million less than in Quarter 2.

The Company believes the impact to Adjusted EBITDA from hurricanes was approximately $1.2 million as a result of the lost revenue and overtime charges incurred to process re-routed specimens in laboratory facilities not affected by the storms. Adjusted EBITDA will also be impacted by the one-time, $1.3 million change in unbilled revenue estimate and by higher bad debt expense, partially offset by an increase resulting from the divestiture of PathLogic.

Douglas VanOort, the Company Chairman and CEO, commented, "The Company's growth momentum and cost containment programs are strong. Despite the impact of two hurricanes, our Clinical Services Division test volume grew by over 16%, and our Pharma Services Division grew revenue by 38% to a record $6.9 million. Although Adjusted EBITDA will be lower than we expected in Quarter 3, we are driving significant reductions in Cost per Test, and are confident we can improve profit margins in future quarters."

Preliminary Fourth Quarter 2017 Financial Outlook:

The Company also announced preliminary guidance for the fourth quarter 2017 today that takes into consideration the divestiture of PathLogic. Based on current trends in operations, the Company expects consolidated revenue of $65 - $67 million and Adjusted EBITDA(1) of $9-10 million in the fourth quarter. The Company reserves the right to adjust this guidance at any time 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.

(l) "Adjusted EBITDA" is a non-GAAP financial measure and is defined by     

    NeoGenomics as net income from continuing operations before: (i)        

    interest expense, (ii) tax expense, (iii) depreciation and amortization 

    expense, (iv) non-cash, stock-based compensation expense, and if        

    applicable in a reporting period (v) acquisition related transaction    

    expenses (vi) non-cash impairments of intangible assets (vii) debt      

    financing costs (viii) and other significant non-recurring or non-      

    operating (income) or expenses. The basis for making these adjustments  

    to GAAP income from continuing operations is explained in the Company's 

    Quarter 2, 2017 Earnings Release, dated July 25, 2017 in section        

    entitled, Basis for Non-GAAP Adjustments. The Company will include a    

    table reconciling Quarter 3 Adjusted EBITDA and Quarter 4 preliminary   

    guidance to income from Continuing Operations as part of its Quarter 3  

    Earnings Release, which is scheduled for October 25, 2017               

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