NEW YORK (GenomeWeb) – NeoGenomics announced today that it has closed a five-year, $150 million senior secured credit facility comprising a $75 million revolving loan and a $75 million term loan.
NeoGenomics said that upon closing the facility, it borrowed $97.9 million, including the $75 million term debt and $22.9 million under the revolving loan. These funds, combined with approximately $16 million in cash, were used to retire an existing $54.6 million term loan, redeem about 8 million shares of Series A redeemable preferred stock held by a General Electric affiliate for $55 million, and pay certain fees and expenses.
"This new bank facility ... has allowed us to redeem 55 percent of the Series A preferred stock resulting from our acquisition of Clarient one year ago and reduce our adjusted diluted shares outstanding by 8.5 percent," NeoGenomics Chairman and CEO Douglas VanOort said in a statement. "This facility also reduces our weighted average cost of senior debt capital to roughly half the previous level."
As a result, the company expects minimal increases in 2017 interest expense despite a higher outstanding principal, he added. It also gives the company access to $52 million in revolving credit to pursue "strategic opportunities."
The company also lowered its financial guidance for fiscal 2016. NeoGenomics disclosed that because of delays in recognizing roughly $2 million in pharma services revenues in the fiscal fourth quarter, it has lowered its revenue guidance for the full year to $244 million to $246 million from $245 million to $250 million. The current average expectation of Wall Street analysts is for 2016 revenues of $247.6 million.
Adjusted net income is now expected to be in the range of $12 million to $14 million, versus previous guidance of $13 million to $15 million, with adjusted earnings per share between $.13 and $.15 compared with previous expectations of $.14 to $.16. Analysts are expecting adjusted earnings of $.14 per share.
During late morning trading on the Nasdaq, shares of NeoGenomics were down nearly 6 percent to $9.01.