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NeoGenomics Cites Hurricane Impact on Preliminary Q3 Revenues

NEW YORK (360Dx) – NeoGenomics announced after the close of the market on Thursday that it expects third quarter revenues of approximately $63.1 million, and estimated that hurricanes Harvey and Irma depressed revenues by approximately $1 million.

The estimated Q3 2017 revenues would be a 4 percent increase year over year from Q3 2016 revenues.

The company also expects to record a $1.3 million revenue adjustment to reflect a change in the process for estimating revenue for unbilled tests at the end of the quarter. In addition, as a result of the divestiture of PathLogic, third quarter revenue will be approximately $1.3 million less than second quarter revenue.

The company expects to report adjusted EBITDA for the quarter of approximately $6 million. The impact to adjusted EBITDA of the hurricanes is estimated at $1.2 million in lost revenues and overtime charges incurred to process rerouted specimen in laboratory facilities not affected by the hurricanes. Adjusted EBITDA will also be impacted by the one-time $1.3 million change in unbilled revenue estimate and by higher bad debt expense. These impacts will be partially offset by an increase in adjusted EBITDA resulting from the divestiture of PathLogic.

The company's clinical test volume for the quarter is expected to be approximately 162,500 tests, an increase of more than 16 percent over last year. Average revenue per clinical genetic test is expected to be approximately $343, an 11 percent decrease from last year. Average cost of goods sold per test is expected to be approximately $181, representing an 11 percent improvement from last year.

"Despite the impact of two hurricanes, our Clinical Services Division test volume grew by over 16 percent, and our Pharma Services Division grew revenue by 38 percent to a record $6.9 million," said Douglas VanOort, NeoGenomics' chairman and CEO. "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."

The company also announced preliminary guidance for the fourth quarter of 2017 that takes into consideration the divestiture of PathLogic. The company expects consolidated revenues of $65 million to $67 million.