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NeoGenomics Q2 Revenues Rise 33 Percent on Test Volume

NEW YORK (GenomeWeb) – Cancer genetics diagnostics firm NeoGenomics today said that revenues in the second quarter increased 33 percent year over year while test volume increased 40 percent.

During the three months ended June 30, the Ft. Myers, Fla.-based company recorded $20.7 million in revenues, up from $15.6 million in the year-ago quarter. It beat the consensus analyst estimate of $19.8 million.

The number of tests performed in the quarter was up to 45,475 from 32,519 a year ago.

The company noted that the revenue improvement came despite a reduction in revenues of a little more than $1 million resulting from its "conservative interpretation of the contradictory new National Correct Coding Initiative edits" related to proper billing for FISH testing for Medicare beneficiaries. The Centers for Medicare and Medicaid Services has not yet clarified the issue, and NeoGenomics previously said that for full-year 2014, the NCCI FISH issue could lower revenues by $3 million.

The firm recorded a profit of $274,000, or $.01 per share, in the second quarter, compared to a profit of $273,000, or $.01 per share, in Q2 2013, and matched the average analyst estimate.

Its R&D costs of $633,000 was a 3 percent increase from $616,000 a year ago, while SG&A costs of $9.0 million was a 50 percent increase from $6.0 million in Q2 2013.

NeoGenomics exited the second quarter with $5.0 million in cash and cash equivalents.

Subsequent to the second quarter, the company acquired Path Labs for $6 million.

For the third quarter, NeoGenomics provided revenue guidance of between $22 million and $23.5 million. The firm added that it anticipates a loss of $.01 per share to a gain of $.01 per share.

For full-year 2014, the company said that revenues are estimated to be between $83 million and $86 million. It anticipates EPS at a range of breakeven to $.03.

EPS guidance for the third quarter and for full-year 2014 excludes the impact of any one-time transaction-related expenses from the Path Labs deal, which may be required to be expensed, NeoGenomics said.