NeoGenomics
Investor Presentation
January 2021
1
Forward-Looking Statements
This presentation has been prepared by NeoGenomics, Inc. ("we," "us," "our," "NeoGenomics" or the "Company") and is made for informational purposes only and does not constitute an offer to sell or a solicitation of an offer to buy securities, nor shall there be any sale of any securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction. The information set forth herein does not purport to be complete or to contain all of the information you may desire. Statements contained herein are made as of the date of this presentation unless stated otherwise, and neither this presentation, nor any sale of securities, shall under any circumstances create an implication that the information contained herein is correct as of any time after such date or that information will be updated or revised to reflect information that subsequently becomes available or changes occurring after the date hereof.
This presentation contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 relating to business, operations, and financial conditions of the Company. Words such as, but not limited to, "look forward to," "believe," "expect," "anticipate," "estimate," "intend," "plan," "would," "should" and "could," and similar expressions or words, identify forward-looking statements. Although the Company believes the expectations reflected in such forward-looking statements are based upon reasonable assumptions, there can be no assurance that its expectations will be realized. Actual results could differ materially from those projected in the Company's forward-looking statements due to numerous known and unknown risks and uncertainties. All forward-looking statements speak only as of the date of this presentation and are qualified in their entirety by this cautionary statement. The Company undertakes no obligation to revise or update this presentation to reflect events or circumstances after the date hereof.
Non-GAAP Adjusted EBITDA
"Adjusted EBITDA" is defined by NeoGenomics as net income from continuing operations before: (i) interest expense, (ii) tax expense, (iii) depreciation and amortization expense, (iv) non-cashstock-based compensation expense, and, if applicable in a reporting period, (v) acquisition and integration related expenses, (vi) non-cash impairments of intangible assets, (vii) and other significant non-recurring or non-operating (income) or expenses, including any debt financing costs.
2
Our | We save lives by improving patient care. |
Common | |
Purpose |
Quality, integrity, accountability,
Our teamwork, innovation.
Values
NeoGenomics
We are Focused and Genuine
Our
Vision
By providing uncompromising quality, exceptional service and innovative solutions, we are becoming the world's leading cancer testing and information company.
3
Snapshot
One Lab. Vital Answers. Transforming Care for Cancer Patients
- Leading oncology diagnostic company with diversified, "One Lab" approach
- Strong competitive position with long history of market share gains
- Strategic multi-channel foothold in community oncology testing market
- Three synergistic business segments all with double digit growth profiles
- World class culture drives high customer satisfaction and strong brand recognition
- Robust and expanding global oncology testing and information market
Q3 2020 Revenue Mix*
Pharma &
Informatics
15%
Clinical Services
85%
FY 2019 Key Figures
Revenue:
$409MM
Revenue Growth:
47% (>20% organic)
Clinical Test Volume:
987,539
Gross Margin:
48.1%
Adjusted EBITDA:
*Excluding non-coreCOVID-19 PCR Testing
$57MM
4
One Lab. Vital Answers.
Leading oncology diagnostics company, designed to provide innovative diagnostic and data solutions that bridge oncologists, pathologists, and therapeutic development
Clinical Services Division | Pharma Services Division |
- Leading oncology reference lab market share for oncologists, pathologists and hospitals
- Comprehensive oncology test menu including all major testing modalities
- Direct national commercial team of ~100 people
- A longstanding reputation for service and quality in the community oncology market
- Leading provider of oncology-focused research and clinical trials services
- Comprehensive support from pre-clinical and research discovery through FDA filing, approval and launch
- Global footprint (U.S., Switzerland, Singapore, China)
- Greater than $185MM(1) in backlog (signed contracts)
Informatics Division
- Formed in 2020 to utilize clinical testing data to address real world problems for Patients and other stakeholders
- Our information platform includes one of the largest cancer testing database, covering the complete spectrum of oncology testing modalities for over 1.6 million patients and growing
5
NOTE:
1. As of September 30, 2020
NeoGenomics
Leading provider of oncology testing and global oncology research services
13 locations across 3 continents
EST. 2004 | 1 | Aliso Viejo, California |
EST. 2004 | 2 | Carlsbad, California |
EST. 2014 | 3 | La Jolla, California |
EST. 2001 | 4 | Houston, Texas |
GENOMICS SPECIALTY | ||
INIVATA PARTNER SITE | 5 | RTP, North Carolina |
6 | Nashville, Tennessee | |
7 | Atlanta, Georgia | |
8 | Tampa, Florida | |
EST. 2002 HEADQUARTERS | 9 | Fort Myers, Florida |
INIVATA PARTNER SITE | 10 | Cambridge, UK |
EST. 2017 | 11 | Geneva, Switzerland |
IMMUNOLOGY SPECIALTY | ||
EST. 2019 | 12 | Singapore |
COMING SOON (Q1 2021) | 13 | Suzhou, China (2020) |
6
Oncology Testing Market Tailwinds
Estimated 6% to 8% annual market growth with upside potential
Demographics
- An aging population is resulting in higher cancer incidence
- Increased cancer survival rates leading to more follow-on testing
Precision Medicine & Drug Development
- Proliferation and complexity of therapeutic options driving more testing
- Burgeoning oncology drug pipeline underlying current Pharma Services demand and likely to drive demand for future clinical testing
- New platforms and tests (NGS, TMB, MSI, liquid biopsy, etc.) creating more test options for diagnosis, prognosis, and therapy selection
Upside Potential: Emerging Opportunities
- Promising minimal residual disease tests in development such as strategic partner Inivata's RaDaR assay could create a compelling recurrence monitoring opportunity
- We expect to develop a number of innovative value-add data offerings
in our growing Informatics division | 7 |
Market Tailwinds: Demographics
An aging population is leading to higher cancer incidence with new precision therapies allowing people to live longer with cancer
22.2 | |
Million Cancer | |
31% | Survivors |
Increase |
The number of cancer survivors is projected to increase by 31.4%, to 22.2 million, by 2030.
10 years
2030
8
Source: National Cancer Institute
Market Tailwinds: Precision Medicine
Oncology therapies with required or recommended biomarker testing
2019
A dramatic increase in approved precision oncology medicines is driving the need for associated biomarker testing.
2012
200725
17
2016 | 70 |
47
9
Source: IQVIA Institute. June 2020
Market Tailwinds: Drug Development
Diagnostic testing is critical as additional drugs gain approval
New oncology molecules are being developed at a record pace. The late phase targeted therapy oncology pipeline increased 100% from 2008 to 2018.
The Pipeline of Late Phase |
Oncology Molecules (2008 - 2018) |
10
Source: IQVIA Pipeline Intelligence, Dec 2018; IQVIA Institute, May 2019
We Look to Grow at Twice the Market Rate
Significant Company-Specific Growth Drivers
Many years of market share gains validate the power of our competitive differentiation.
8 | |||
History of strong | |||
M&A Execution | |||
7 | To complement | ||
Strong | organic growth | ||
6 | |||
synergies | |||
5 | Significant | with Pharma | |
reach into the | Services and |
1 | 2 | |
The most | Uncompromising | |
customer service | ||
comprehensive | ||
with exceptional | ||
test menu in | ||
turn around time | ||
oncology Dx - | ||
on testing | ||
including | ||
advanced NGS | ||
capabilities | ||
such as liquid | ||
biopsy |
4
3
A tenured and oncology focused best-in-class sales force
Hundreds of contracts with managed care, IDNs, hospital systems, oncology practices and GPOs
Over 120 MDs | community | Informatics |
and PhDs on | channel | Divisions |
Staff including | positions us well | |
internationally | for partnerships | |
renown experts | and strategic | |
relationships |
11
History of Organic and Inorganic Success
With an ability to succeed in multiple environments
Clinical Testing Annual Revenue / Clinical Tests Performed(1) | Acquired | ||||||||||
$361 | 1,200 | ||||||||||
350 | |||||||||||
300 | Dec 2018 | 1,000 | |||||||||
Acquired | 988k | ||||||||||
250 | $242 | 800 | |||||||||
$210 | |||||||||||
$203 | 750k | ||||||||||
200 | Dec 2015 | ||||||||||
657k | 600 | ||||||||||
150 | 563k | 400 | |||||||||
$88 | |||||||||||
100 | $79 | ||||||||||
$56 | $63 | ||||||||||
$40 | 200 | ||||||||||
50 | $32 | ||||||||||
223k | |||||||||||
176k | |||||||||||
112k | 136k | ||||||||||
57k | 76k | ||||||||||
0 | 0 | ||||||||||
2010 | 2011 | 2012 | 2013 | 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | ||
Clinical Testing Revenue ($MM) | Clinical Tests Performed | ||||
Reimbursement challenges | Growth Markets | ||||
NeoGenomics has the flexibility to pivot with the environment | |||||
(1) Clinical Revenue presented net of bad debt expense to conform with ASC 606 presentation. | 12 | ||||
(2) Base NEO Clinical includes organic clinical revenue and test volume growth and incorporates inorganic contributions from the 2015 acquisition of Clarient (closed Dec. 30th) and the 2018 acquisition of | |||||
Genoptix (closed Dec. 10th). Base NEO Clinical excludes the impact from Pharma Services and PathLogic (divested on August 1st, 2017). |
Our Focus Is The Community Setting
We bring state-of-the-art oncology testing to the masses
Community Channel
80% to 85% of all cancer patients are treated by community oncologists
Community | Community |
Hospital | Oncology Office |
NeoGenomics works with >4,400 hospitals, institutions and oncology offices, most in the community
setting, to ensure all patients can benefit from high-quality diagnostic tests to support Precision Medicine
13
Comprehensive Oncology Test Menu
A low Beta approach to a massive high growth end market
Anatomic Pathology | Flow Cytometry | Cytogenetics | FISH | Molecular | |||||||||
• | Consultation pathology | • | 10-color flow | • | Extensive automation | • | Robust Library of | • | Next-gen sequencing | ||||
• | Immunochemistry | • | MRD detection | ||||||||||
for high quality/low | validated probes | • | Liquid biopsy | ||||||||||
• | Immunohistochemistry | • | Global and tech-only | cost | • | Global and tech-only | |||||||
• | Whole exome | ||||||||||||
• | Digital imaging | service | service | ||||||||||
sequencing | |||||||||||||
• | Automated quantitative | • | Sanger sequencing | ||||||||||
IHC | • | Real time qPCR | |||||||||||
• Global and tech-only | |||||||||||||
Flexible | Technology Agnostic | Appropriate | • | SNP microarray | |||||||||
service | |||||||||||||
Right Test • Right Patient • Right Time
14
A Differentiated Approach To NGS Testing
Multiple modalities and appropriate biomarkers leads to great care at a value
Targeted Profiles | Broad Based Profiles | Liquid Biopsy | ||
26 NeoTYPE® targeted profiles | Solid Tumor | InVisionFirst®-Lung | ||
• | Multi-Modal | • Discovery Profile: 336 biomarkers | • | 37 genes |
• | Only appropriate biomarkers | • Precision Profile: 83 biomarkers | • Reflex ordering with NeoTYPE® | |
• 19 Solid Tumor Profiles | • Universal NGS Fusion Panel: 252 | Lung Tissue | ||
• | 7 Heme Profiles | genes | NeoLAB® liquid biopsy suite | |
17 Targeted RNA Fusion Profiles | Hematologic Disease | |||
• 1 Solid Tumor Test | ||||
• | High capacity workflow | • NeoTYPE® Myeloid Disorders: 63 | • | 4 Hematologic Tests |
• | Only appropriate biomarkers | genes |
- Detection of novel fusions
Flexible | Technology Agnostic | Appropriate |
Right Test • Right Patient • Right Time
15
We Are Focused on The Customer
Best-in-class net promoter score
Q4 2020 Clinical Client Survey
How likely is it that you would recommend this company to a friend or colleague?
Not at all likely | Neutral | Extremely likely | ||||||||
0 | 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 |
Detractor | Passive | Promoter |
7% | 20% | 73% |
% Promoters - % Detractors = NPS (Net Promoter Score) | ||
Satisfaction Model | ||
Employee Engagement | Customer Satisfaction | |
Employee Retention | Client Retention >95% |
0
-50 | +66 | 50 |
NPS
-100100
Shareholder Satisfaction
Achieve Results >Plan
NOTES: | 16 |
1,055 respondents |
Competing Through Focus, Scale and Scope
We enjoy a unique position in the clinical market
Clinical Reference Labs with
Oncology Divisions
Diversified Focus
Pure Play Oncology Diagnostic Lab
Comprehensive Test Menu + Sustainable Growth
Leading Share in U.S. Clinical Oncology Market
Comprehensive, multi-modality "One Lab" position
Large and advanced somatic cancer test menu Significant reach into all customer segments National footprint and extensive payer contracts Outstanding client service and partnership models
Synergistic Pharma, Clinical and
Informatics businesses
Niche
Oncology Players
High R&D investment and limited test menus
/
17
Our Ability to Profitably Innovate Enables Sustainable Growth
Three important growth areas in the business today were enabled by leveraging the power of our growing core clinical engine. These initiatives could represent nearly a third of 2021 revenues.
Core Clinical Business
- Growing volumes >10%
- Self-fundinginnovation
Next-generation sequencing
- Nominal % of 2015 revenue
- Now >15% of Clinical revenue
- Growing volumes 25%+
- Comprehensive portfolio
- Larger panels and targeted profiles
Pharma Division
- Nominal % of 2015 revenue
- Now >15% of company revenues
- We are now a global player
- Developing custom assays w/sponsors
- Growing >20%, grew 37% YOY in 2019
Informatics Division
- Formed in 2020
- Enabled by ever-expanding clinical dataset
- Early returns are encouraging
- Fastest growing part of NEO
18
Rapidly Growing Pharma Services Business
Demand has been robust despite ongoing COVID-19 pandemic
$200 | $185.4 | ||||||||||||||
$180 | $172.9 | ||||||||||||||
$160 | $147.7 | ||||||||||||||
$140 | $130.4 | ||||||||||||||
$120 | $118.3 | ||||||||||||||
$100 | |||||||||||||||
$80 | |||||||||||||||
$60 | $40.5 | ||||||||||||||
$40 | $32.8 | $34.9 | |||||||||||||
$27.6 | $28.4 | ||||||||||||||
$20 | $12.1 | $13.5 | $13.0 | $15.0 | $13.0 | $16.7 | |||||||||
$0 | $(3.2) | $(7.2) | $(13.1) | $(2.3) | $(5.6) | ||||||||||
Q3'19 | Q4'19 | Q1'20 | Q2'20 | Q3'20 | |||||||||||
-$20 | |||||||||||||||
Revenue | Booked | Acquired | Cancelled or Dormant | Ending Backlog | |||||||||||
19
The Company defines Dormant Projects as projects with no activity for 12 months or longer that have not officially been cancelled by the Sponsor
Uniquely Positioned: Pharma Services
Factors driving pharma services success in the oncology marketplace
Cancer | Comprehensive | Best-in-Class | Global | FDA | CDx Capabilities | Scientific |
Focus | Menu | Service & | Footprint | Compliant | Ability to develop and | Leadership |
Customization | Systems | launch CDx |
$40MM of new business in Q2 of 2020 | A Record $185MM backlog | More than 40 Active Companion | ||
despite COVID-19 | exiting Q3 of 2020 | Diagnostic Projects Ongoing | ||
Synergies with Clinical & Informatics
20
Informatics
Patient-focused. Data driven.
Our information platform includes one of the largest cancer testing databases,
covering the complete spectrum of oncology testing modalities for over 1.6 million patients.
>1.6M | 5 years | >4,400 | >435k | >68k | ~1M | |||||
Unique active | ||||||||||
patients tested | historical data | clinical clients | patients per year | tests/year | ||||||
providers | ||||||||||
21
Informatics
Primary offerings today
Diagnostic lab alerts and | Clinical trial matching and |
commercial analytics | provider outreach |
22
Three Divisions That Are Increasingly Synergistic
Innovation and scale has made our three divisions increasingly synergistic over time creating a
flywheel effect.
Informatics
Data-driven insights | |
to support drug | Clinical |
discovery, clinical | Decision |
trials & | Support |
commercial | Sponsored |
activity | testing |
programs |
Pharma | Companion | Clinical |
Services | Services | |
Diagnostics |
23
Leading Oncology Diagnostics Company
Guided By Science And Passion For Patient Care
We are a leader in | Our extensive | We act as a | We are oncology | Our work is |
the field of | patient database | collaborative partner | experts focused on | founded in |
diagnostic testing | allows us to | to pathologists, | developing | science, driven |
by data, and | ||||
with a significant | optimize the | oncologists and | foundational and | |
upheld to the | ||||
share of patient | pairing of | biopharma to deliver | innovative oncology | |
highest | ||||
test volume in | patients with | best-in-class services | laboratory diagnostic | |
standards | ||||
the US | clinical trials | for all | services | |
When you invest in NeoGenomics, you invest in all of oncology
By helping the
community
oncology field, we
improve lives
24
Appendix
Experience and Scale Matter
Industry Leader in Oncology Diagnostics
>435,000 patients
per year
620+ cancer tests ready for order
26 targeted NeoTYPE®
molecular/FISH/IHC panels
>150 active pharma clients
~1 million cancer-related tests
per year
>50,000 Clinical Next Gen
Sequencing tests per year
#1 lab in PD-L1testing**
>1,500 pharma projects completed
to date
>4,400
hospital, institution and oncology office clients
336 Biomarker solid tumor
discovery panel
#1 lab in breast cancer
testing*
>120
MDs and PhDs
*Data from CMS claims database **Internal data based on test utilization
27
Navigating The COVID-19 Pandemic
Managing the business to emerge stronger
Clinical Services Business
($MM, except for clinical tests)
Clinical Testing Revenue
120 | Clinical Cancer Tests Performed | $108.7 | |
100$93.0
80 | $73.9 | 255k |
250k | ||
60 | 205k | |
40 | ||
20 | ||
0 | ||
Q1'20 | Q2'20 | Q3'20 |
- COVID-19PCR testing capabilities have helped hedge against market-wide pandemic related volume declines
- No layoffs were made related to temporary declines in volume
- Low-capacityutilization in Q2'20 provided a rare opportunity to focus on process improvement
- We are actively hiring and believe we are well positioned to take share
NOTE:
1. As of September 30, 2020
400k
350k
300k
250k
200k
150k
100k
50k
0k
($MM) | Pharma Services Business | ||
$40.5 | |||
Revenue | |||
Net New Bookings | $34.9 | ||
$28.4 | |||
$16.7 | |||
$13.0 | $13.1 |
Q1'20 | Q2'20 | Q3'20 |
- Demand has been robust throughout the pandemic and new contract bookings have broken records
- Many new trials were delayed and ongoing trials saw reduced enrollee counts related to patient access issues due to the pandemic
- Pushed forward with important global infrastructure investments
- Ample capacity and a record backlog (>$185MM(1)) has us excited about near- and long-term growth
28
Well Positioned: Companion Diagnostics
Companion diagnostics are part of the precision medicine
that is driving the future of oncology
Ability to take test | CDx capabilities | Wide scale and | Broad reach to | Access to data |
across continuum | translating into | scope across | oncologists | across massive |
from development, | customer wins | Pharma and | and pathologists | quantity of |
through clinical | Clinical markets | oncology-specific | ||
trials, and into the | test results | |||
market |
29
Proving the Point: KEYTRUDA®
- Selected by Merck due to IHC expertise
- Participated in Early Validation Program for Keytruda
- One of only 3 labs to offer PD-L1 testing on Day 1
We remain an industry leader in clinical PD-L1testing
30
Proving the Point: PIQRAY®
- PIK3CA is a gene that is mutated in many breast cancers
- In 2018, when Novartis was in late-stage development for its PIK3CA inhibitor, alpelisib, QIAGEN established a development program to bring to market a molecular test (therascreen® PIK3CA RGQ PCR Kit) as a companion diagnostic to guide the use of alpelisib
In partnership with Novartis and QIAGEN, NeoGenomics was the
Day 1 Preferred Laboratory Partner for this critical PIK3CA CDx
January - May 2019: Clinical validation | April - June 2019: Launch readiness | By December 31, 2019: | ||
NEO pharma services engaged with QIAGEN and Novartis to begin clinical | Pharma Sponsored Testing Program (STP) | Achievement | ||
validation process for PIK3CA to ensure PIK3CA testing available on day 1 | prepared and ready for day 1 | Novartis revenue was ~$118M and NEO | ||
upon FDA approval | PIK3CA order volume is ~4,000 orders | |||
JAN | FEB | APR | MAY | DEC |
February - June 2019: Clinical launch preparation | May 24, 2019: PIQRAY® (alpelisib) launch and CDx launch |
Sponsored testing program, sales materials and training, website development and digital marketing
Hand-off to clinical: STP ready, all materials ready, clinical sales, marketing and medical activated, medical outreach program, sales contest; Novartis revenue target is $30M and NEO PIK3CA order volume target is 1,000 orders
31
Balance Sheet, September 30, 2020
(unaudited, in thousands)
ASSETS
Cash and cash equivalents
Marketable securities, at fair value
Accounts receivable, net
Inventories
Other current assets
Total current assets
Property and equipment (net of accumulated depreciation of $85,987 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
Convertible senior notes, net
Long-term portion of financing obligations
Long-term portion of operating leases
Other long-term liabilities
Deferred income tax liability, net
Total long-term liabilities
TOTAL LIABILITIES
September 30, 2020 | December 31, 2019 | ||
(Unaudited) | |||
$ | 233,233 | $ | 173,016 |
50,375 | - | ||
103,697 | 94,242 | ||
20,643 | 14,405 | ||
14,427 | 9,075 | ||
422,375 | 290,738 | ||
85,449 | 64,188 | ||
45,856 | 26,492 | ||
123,353 | 126,640 | ||
210,833 | 198,601 | ||
32,003 | - | ||
10,142 | - | ||
25,600 | - | ||
3,817 | 2,847 | ||
$ | 959,428 | $ | 709,506 |
$ | 56,211 | $ | 50,091 |
3,700 | 10,432 | ||
4,701 | 3,381 | ||
64,612 | 63,904 | ||
166,440 | - | ||
1,399 | 95,028 | ||
43,123 | 24,034 | ||
3,937 | 3,566 | ||
13,554 | 15,566 | ||
228,453 | 138,194 | ||
$ | 293,065 | $ | 202,098 |
TOTAL STOCKHOLDERS' EQUITY | $ | ||||
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ | ||||
666,363 | $ | 507,408 | 32 |
959,428 | $ | 709,506 |
Income Statement, September 30, 2020
(unaudited, in thousands) | Three Months Ended September 30, Nine Months Ended September 30, |
2020 | 2019 | 2020 | 2019 | |||||
NET REVENUE: | $ | 108,733 | $ | 92,565 | $ | 275,599 | $ | 267,757 |
Clinical Services | ||||||||
Pharma Services | 16,711 | 12,107 | 42,852 | 34,205 | ||||
Total revenue | 125,444 | 104,672 | 318,451 | 301,962 | ||||
COST OF REVENUE | 71,379 | 53,840 | 190,011 | 155,049 | ||||
GROSS PROFIT | 54,065 | 50,832 | 128,440 | 146,913 | ||||
Operating expenses: | 36,128 | 33,054 | 107,085 | 94,773 | ||||
General and administrative | ||||||||
Research and development | 1,964 | 2,611 | 6,129 | 6,407 | ||||
Sales and marketing | 11,304 | 11,508 | 34,757 | 35,048 | ||||
Total operating expenses | 49,396 | 47,173 | 147,971 | 136,228 | ||||
INCOME (LOSS) FROM OPERATIONS | 4,669 | 3,659 | (19,531) | 10,685 | ||||
Interest expense, net | 2,458 | 203 | 4,825 | 3,333 | ||||
Other (income) expense, net | (11) | (35) | (7,639) | 5,124 | ||||
Loss on extinguishment of debt | - | - | 1,400 | 1,018 | ||||
Loss on termination of cash flow hedge | - | - | 3,506 | - | ||||
Income (loss) before taxes | 2,222 | 3,491 | (21,623) | 1,210 | ||||
Income tax (benefit) expense | (335) | 1,348 | (10,378) | (500) | ||||
NET INCOME (LOSS) | $ | 2,557 | $ | 2,143 | $ | (11,245) | $ | 1,710 |
Adjustment to the numerator for convertible | ||||||||
notes in diluted EPS (3) | ||||||||
NET INCOME (LOSS) | 2,557 | 2,143 | (11,245) | 1,710 | ||||
Convertible note accretion, amortization, and | 1,975 | - | - | - | ||||
interest, net of tax | ||||||||
NET INCOME (LOSS) USED IN | $ | 4,532 | $ | 2,143 | $ | (11,245) | $ | 1,710 |
DILUTED EPS | ||||||||
NET INCOME (LOSS) PER SHARE | ||||||||
Basic | $ | 0.02 | $ | 0.02 | $ | (0.10) | $ | 0.02 |
Diluted | $ | 0.04 | $ | 0.02 | $ | (0.10) | $ | 0.02 |
WEIGHTED AVERAGE COMMON | 33 | |||||||
SHARES OUTSTANDING | ||||||||
Basic | 110,461 | 103,899 | 107,605 | 99,149 | ||||
Diluted | 119,191 | 107,880 | 107,605 | 102,766 |
Statements of Cash Flows, September 30, 2020
(unaudited, in thousands)
Nine Months Ended September 30, | |||||||||||||||||||
2020 | 2019 | ||||||||||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES | |||||||||||||||||||
Net (loss) income | $ | (11,245) | $ | 1,710 | |||||||||||||||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||||||||||
Depreciation | 18,705 | 15,200 | |||||||||||||||||
Loss on disposal of assets | 371 | 451 | |||||||||||||||||
Loss on debt extinguishment | 1,400 | 1,018 | |||||||||||||||||
Loss on termination of cash flow hedge | 3,506 | - | |||||||||||||||||
Amortization of intangibles | 7,387 | 7,482 | |||||||||||||||||
Amortization of debt issue costs | 138 | 323 | |||||||||||||||||
Amortization of convertible debt discount | 2,705 | - | |||||||||||||||||
Non-cashstock-based compensation | 7,536 | 7,727 | |||||||||||||||||
Non-cash operating lease expense | 6,365 | 3,224 | |||||||||||||||||
Changes in assets and liabilities, net | (41,393) | (17,125) | |||||||||||||||||
Net cash (used in) provided by operating activities | $ | (4,525) | $ | 20,010 | |||||||||||||||
CASH FLOWS FROM INVESTING ACTIVITIES |
Purchases of marketable securities Proceeds from sale of marketable securities Purchases of property and equipment Business acquisition
Investment in non-consolidated affiliate Acquisition working capital adjustment
Net cash used in investing activities
(53,396) | - | ||
3,000 | - | ||
(17,591) | (13,953) | ||
(37,000) | - | ||
(25,600) | - | ||
- | 399 | ||
$ | (130,587) | $ | (13,554) |
CASH FLOWS FROM FINANCING ACTIVITIES | ||||||||||||||||
Repayment of revolving credit facility | - | (5,000) | ||||||||||||||
Repayment of equipment financing obligations | (4,331) | (5,481) | ||||||||||||||
Proceeds from term loan | - | 100,000 | ||||||||||||||
Repayment of term loan | (97,540) | (96,750) | ||||||||||||||
Cash flow hedge termination | (3,317) | - | ||||||||||||||
Payments of debt issuance costs | - | (1,051) | ||||||||||||||
Issuance of common stock, net | 10,761 | 10,132 | ||||||||||||||
Proceeds from issuance of convertible debt, net of issuance costs | 194,466 | - | ||||||||||||||
Proceeds from equity offering, net of issuance costs | 127,293 | 160,774 | ||||||||||||||
Net cash provided by financing activities | $ | 227,332 | $ | 162,624 | ||||||||||||
Net change in cash, cash equivalents and restricted cash | $ | 92,220 | $ | 169,080 | ||||||||||||
Cash, cash equivalents and restricted cash, beginning of period | 173,016 | 9,811 | ||
Cash, cash equivalents and restricted cash, end of period | $ | 265,236 | $ | 178,891 |
Reconciliation of cash, cash equivalents and restricted cash to the Condensed Consolidated Balance Sheets:
Cash and cash equivalents
Restricted cash, non-current
Total cash, cash equivalents and restricted cash
$ | 233,233 | $ | 178,891 | 34 |
32,003 | - | |||
$ | 265,236 | $ | 178,891 |
Segment Results, September 30, 2020
(unaudited, in thousands)
Three Months Ended September 30, | Nine Months Ended September 30, | ||||
2020 | 2019 | % Change | 2020 | 2019 | % Change |
Clinical Services: | ||||
Revenue | $ | 108,733 | $ | 92,565 |
Cost of revenue | 60,607 | 47,526 | ||
Gross profit | $ | 48,126 | $ | 45,039 |
Gross margin | 44.3% | 48.7% | ||
Pharma Services: |
17.5 % | $ | 275,599 | $ |
27.5 % | 158,287 | ||
6.9 % | $ | 117,312 | $ |
42.6% |
267,7572.9 %
136,557 15.9 %
131,200 (10.6)%
49.0%
Revenue | $ | 16,711 | $ | 12,107 | |||||||||
Cost of revenue | 10,772 | 6,314 | |||||||||||
Gross profit | $ | 5,939 | $ | 5,793 | |||||||||
Gross margin | 35.5% | 47.8% |
38.0 % | $ | 42,852 | $ | 34,205 | 25.3 % |
70.6 % | 31,724 | 18,492 | 71.6 % | ||
2.5 % | $ | 11,128 | $ | 15,713 | (29.2)% |
26.0% | 45.9% |
Three Months Ended September 30, | Nine Months Ended September 30, |
2020 | 2019 | % Change | 2020 | 2019 | % Change | |||||
Clinical(8): | ||||||||||
Requisitions (cases) received | 147,518 | 145,312 | 1.5 % | 406,250 | 427,406 | (4.9)% | ||||
Number of tests performed | 255,458 | 250,518 | 2.0 % | 710,678 | 735,165 | (3.3)% | ||||
Average number of tests/requisitions | 1.73 | 1.72 | 0.6 % | 1.75 | 1.72 | 1.7 % | ||||
Average revenue/requisition | $ | 622 | $ | 637 | (2.4)% | $ | 632 | $ | 626 | 1.0 % |
Average revenue/test | $ | 359 | $ | 369 | (2.7)% | $ | 361 | $ | 364 | (0.8)% |
Average cost/requisition | $ | 342 | $ | 327 | 4.6 % | $ | 361 | $ | 320 | 12.8 % |
Average cost/test | $ | 197 | $ | 190 | 3.7 % | $ | 206 | $ | 186 | 10.8 % |
Clinical tests exclude requisitions, tests, revenue and costs of revenue for Pharma Services and COVID-19 PCR tests. | 35 |
Adjusted EBITDA, September 30, 2020
(unaudited, in thousands)
Three Months Ended September 30, | Nine Months Ended September 30, |
2020 | 2019 | 2020 | 2019 |
Net income (loss) (GAAP) | $ | 2,557 | $ | 2,143 | $ | (11,245) | $ | 1,710 |
Adjustments to net income (loss): | ||||||||
Interest expense, net | 2,458 | 203 | 4,825 | 3,333 | ||||
Income tax (benefit) expense | (335) | 1,348 | (10,378) | (500) | ||||
Amortization of intangibles | 2,468 | 2,380 | 7,387 | 7,482 | ||||
Depreciation | 6,528 | 4,848 | 18,705 | 15,200 | ||||
EBITDA (non-GAAP) | $ | 13,676 | $ | 10,922 | $ | 9,294 | $ | 27,225 |
Further adjustments to EBITDA: | ||||||||
Acquisition and integration related expenses | 446 | 334 | 1,852 | 2,143 | ||||
Other significant non-recurring (income) expenses (4) | (105) | 364 | (2,100) | 6,527 | ||||
Non-cashstock-based compensation expense | 2,715 | 3,275 | 7,536 | 7,727 | ||||
Adjusted EBITDA (non-GAAP) | $ | 16,732 | $ | 14,895 | $ | 16,582 | $ | 43,622 |
36
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NeoGenomics Inc. published this content on 11 January 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 05 February 2021 20:32:06 UTC.