NeoGenomics, Inc. (OTC Bulletin Board: NGNM), a leading provider of cancer-focused genetic testing services today reported its results for the third quarter of 2009.
Highlights:
- Revenue increase of 44% versus Q3 08 to $7.3 million
- Build-out of a full-service melanoma laboratory and commencement of a large melanoma validation study
- Significantly improved liquidity position
- Douglas VanOort appointed Chief Executive Officer
Revenue increased by $2.2 million or 44% to $7.3 million in the third quarter from $5.1 million in the same quarter last year. The number of tests increased by 33% while average revenue per test increased by 8%. Gross profit margin of 50% was essentially unchanged from last year. Sales and marketing expenses increased $989,000 or 123% driven by a more than doubling in the size of the sales force since this time last year. General and administrative expenses increased $626,000 or 34% primarily due to an increase in management personnel. Net loss for the quarter was ($755,000) or ($0.02)/share versus a net loss of ($195,000) or $0.01/share in Q3 08.
During the third quarter, NeoGenomics received $4.8 million of proceeds from the sale of 3.5 million shares of common stock to Abbott Laboratories and received an additional $640,000 upon the exercise of certain warrants. As a result of these equity transactions, all non-lease debt was paid off during the quarter. At the end of the Quarter, the Company held $3.1 million of cash and retained $3 million of availability on its working capital credit facility.
During the third quarter, overall revenue growth was impacted by normal seasonality in Florida-based accounts as well as by a restructuring of the relationship with the company's largest account. As previously disclosed, we recently began assisting our largest customer develop the capability to perform bladder cancer FISH testing in-house while seeking to expand the scope of other testing services and the number of locations for which we provide services. As a result, bladder cancer FISH testing revenue from this customer declined by approximately $650,000 and other testing services increased by $240,000, which resulted in a net loss of $410,000 of revenue compared with the same quarter last year. Excluding this account, the company's revenues grew approximately 62% versus last year.
Douglas VanOort, Chairman and Chief Executive Officer, stated, "We are pleased by the significant progress across the company as we position ourselves for future growth. Although the results of the restructuring process with our largest customer are thus far below our expectations, there is considerable momentum in the other aspects of our business. Sales force productivity continues to increase as we emphasize training and new account development, and the pipeline of new business is strong. We are on track to close October with a significant increase in revenue versus September."