NEO Neogenomics

Douglas VanOort Chairman of the Board & CEO
Steven Jones Executive VP & Director
Amanda Murphy William Blair & Company
Drew Jones Stephens
Kevin Ellich Craig-Hallum Capital Group
Paul Knight Janney Montgomery Scott
Nicholas Jansen Raymond James & Associates
Raymond Myers The Benchmark Company
Joseph Munda First Analysis Corporation
Call transcript
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Greetings, and welcome to the NeoGenomics' Third Quarter 2017 Earnings Conference Call. [Operator Instructions].

As a reminder, this conference is being recorded. I would now like to turn the conference over to Doug VanOort, Chairman and CEO. Thank you. ahead. go Please

Douglas VanOort

good NeoGenomics' Brenda, like welcome to Thank quarter morning. XXXX to third conference everyone you, I'd call.

and of President our Cardoza, Albitar, Accounting Joining joining Medical also and me our us in Senior Bill from for George Jones, Jessica Treasurer, Development; Vice of Principal would Services R&D, who Officer us Viejo and our is Clinical headquarters Vice and California. Financial Aliso this our Director Chief Kathryn Finance Vice Bonello, our introduce of Division our of our from our is our Director I Executive on Director welcome Billing time Fort Deena Vice Rob are of call. the of like our lab Shovlin, Officer, Myers Reporting. and President, our joining President first to Officer; Chief and Mckenzie, and Corporate Steve Director Dr. President King, President; External Maher Senior Murphy

Before prepared remarks, will forward-looking language Jones we begin standard statements. our read about the Steve

Steven Jones

of call forward-looking This to today, substantial or are forward-looking our the undertake underlying statements. materially their risks Any today. represent only and incorrect, of expectations events obligation or one and are of statements current prove certain growth operations, from which or statements, forward-looking on in involve more condition, about uncertainties such contain beyond Should statements. update control. assumptions our indicated any made no statement Any after the of should These this these conference outcomes we speaks statements, our statements to beliefs or performance, could statements opportunities. those are reflect and which not materialize as financial call circumstances historical actual nature, forward-looking results may fact and differ risks that by and uncertainties,

morning's want copy to the call Doug, our is transcript turning back know our section this completed. a of shortly making I call for of we Investor website will Relations the to be everyone Before available let it after that on

also the to to more per within to that everyone chance are allotted We of for questions that order person been to give one has in the we questions ask hour limit to let two know people this want going call. a number

Douglas VanOort

disappointed Steve. my Q&A in and for you, remain expecting this, begin are very morning then I in four also the period. trends of by you we what weeks ago. some differed from analysis and we these optimistic sugarcoat full community about during our any may describing remarks expected. we for explanation deliver I for third are positive there this third quarter what that investment two in about course of quarter results. will for have and areas some which any growth conclude did We environment providing won't we of with three Thank current our comment comments are our my guidance quarter on by investors pre-announced longer our four will term. outlook this the I were our context results our results not our the very answer will quarter said give a of each short accept that these accountability the you questions I'll and prospects. There of our the

Harvey. Irma The to and lesser results expectations from first between our Hurricane difference resulted and a Hurricane extent

our plans these we not these our more outstanding disasters. Fort directly impacted by much could and prepare an there's continuity were did facilities and hurricanes, have business job. We for done to Houston team Our executed Myers both

these disruptions which and closures our at extremely the natural of experienced In in fact managed any all. significant opinion was and felt though systems in barely we I'm our plus through lab my manner people clients A impact proud Even disasters. it performance. an our had teams

quarter. has difference a adjusted do slightly Path for with to impact positive but the revenue divesture on divestiture EBITDA had our second this The Logic, reduced of

attempting many employees company of As protected We strategically a you to and now a Path Path profitable Without been know and going the financially focused and forward. have as while more our because more Path as was Logic's or which be it on possible struck Logic clients to we we incurred additive sale. our loss is deal will divest Logic business. a no longer for

QNS. million The or expectations for excuse quantity revenue recorded we reflected was I this, for the the sufficient no reason adjustment. third is investor because was result not There revenue certain $X.X missed mean adjustment were tests

Although not these tests zero unless reported we we in QNS out result revenue. test partial are results QNS testing full generally expense incurred QNS do specimens of the bill for and

have We controls situation recur. and ensure does this procedures to that enhanced established not accounting

In revenue and the to to addition higher profitability slightly going than should the reduced that the a and many for is they're deny we insurance reason missed our had an have secured get less be test lab, test for as higher give Unfortunately care are dynamics as improve will In organizations increasingly the implemented the result the the payers we new required of well pre-authorized our testing using not boost of the by in preauthorization performance allow be test. efforts to and QNS order changing refuse expectations entire billing refusing of pre-authorization bad expense was of during performed recently claim. requiring pay the will of than tests. and often molecular because for pay forward. fourth physician This investor technologies sample tissue ordering be patient paid. to must included despite a if integration. lab payer much and instances rather an Medicare as The number sometimes companies a by best Managed and operation debt companies final advance expected our value the insurance more to Medicare care frequently to Clarient

panels. denied for increasingly payment specific particularly are organizations next generation care multi-gene test based managed and Medicare addition sequencing In molecular disease

guide over Even care, year. by and are these panels decisions though panels valued sometimes us. Medicare in they which these and important are clients past treatment reimburse has Our our care for managed our important patient the and biomarkers to grown payers refused volume test important include significantly

of of managed context is from derived specific revenue. built and total X% these approximately disease care Medicare panels revenue to For

nearly preferable of hospital directly our our directly our Fortunately rules. for what adapting because order. we deal under to This services and fortunately our for are we individual have us challenges enough XX% care and and bills Medicare to for Also pay are a and them. they sent bad new debt prefer expertise scale we with us for bill they with to clients managed contracts much hospitals is situation

the that have of requirements proactively submitted. We in ensure confusion are payers about and systems educating pre-authorization requests sent. establishing communicating the in clients typical when test several our processes documentation and enhanced to algorithms is to our a pre-authorization before ways, secured reduce test the order We're we're new preauthorization chance with is

about an These us process Additionally future. quarter that very sent positive we they our turn those With lab have time some in to attention a fundamentals the understanding trends pre-authorization are even business. that the the to accessioned identify at four let's excited acquisition test laboratories. and fundamental in our three to dynamics a what our of require are approval our have secure is established before to

in and by recent hit quarter growth is our molecular past was to continued market trends of fundamental flow with most XX.X% Moreover FISH. getting our than in our histology in business in reported share those the We services despite strength accelerating two clinical in ability by to continue gain volume the hurricanes. our this our One growth core growth labs positive more and balanced cytometry accompanied division.

taking most and of market. segments force focused again once in winning Our clearly are share new sales is business the on we

in business also services up We quarter with and XX% to number health year also of is signed a of in record division million. XX% our year million. $XX reported demonstrated revenue record new this backlog is a contracts $X.X The up to over pharma

momentum its very the this business excited build remain watching we in are and about prospects. We

despite an very overtime year quarter, need over down, to in our year our clinical a and expectations maintained California and gains due down and initial to it's our directed four this control These surprise more with also also we our having accurate cost We XX% our shortfall expectations test prospects. both guidance Even were disappointed strong the by failed anticipated accommodate business provide staff with long year We a per again in of samples the investors business, increased to than over cost realize consistent with in outstanding were market X% to we disappointment. past and near spike to pharma We right control relative up that significant our growth in the was with and term once continuing well expenses in-line are up year. by and our share our term revenue goals. productivity quarter a strong related continued cost our keep and assessment earnings was able cost to healthy trends as and hurricanes. fundamental

as you over of past this most and the publicly has many of has As traded case know been year. over a Neogenomics met history even the not our expectations, company exceeded

at again look have reduce adopted the our in hard and that forecasting quarters. we a which taken future have establishing prophecies miss for guidance We chances should process and

continued of and both significant pharma division for front. outlook in an by general some reimbursement Our services clinical pressure on the includes expectation offset quarter collections and four commercial our momentum

and momentum. On teams the have win our robust, accounts sales we remains clinical continue side to new our volume growth excellent

FISH annualize cytometry. and in pressure influx greater Despite and four in generation sequencing to We growth strength as next mix last began of expect the in our the traditional such in continued begin more expect flow we year. test also improvements and initial molecular PDL-X reimbursement which of we as quarter stability higher technologies testing on paying expect

multiomyx, of immuno-oncology proprietary Our outlook new very winning backlog. revenue four pharma both We're is for division technology used terms and for contracts for immunohistochemistry primarily quarter in the testing our positive and testing. services

In the in this and this addition services margin to our quarter expect benefit more gains of as to XX% continue improve above was scale. this pharma we past gross business

expect cost in the of test implemented see to initiatives and past continued several months. result per new we scale cost over reductions as a increased side On the

$XX in levels $XX we continue to dynamics the million $X to adapt to our going that to to remain perspective. will of four million about these elevated as to EBITDA I'm quarter. million the revenue quarter expect result in we changes longer-term position at to of adjusted competitive expect fourth and talk Overall, $XX now transition environment. payer We in debt million in bad and

everyone that we by environment. navigating pretty start challenging track have a me a Let record in reminding successful

XX over cumbersome Medicare calls, years, and regulatory I quarters grown in XX the faced times. in have our changes the Nevertheless, quarterly severe Over volume reimbursement has competition. we by investor which these cuts, intense hosted

times about Our XX has value $XX has how to over to challenges understand million we know grown through $XXX revenue gone them. by do over from our and manage do and We enterprise million.

challenges win. and managed capabilities our general, NeoGenomics Medicare us we care reimbursement and to practices these deal to present for industry continues with and in Although to the have believe for

competitive than our position been. fact, better In is ever it's

We and cutting retracting back service respond and stories on and have Every service on scale, At taking great we're time, balance hear to off market. care, share. ability of market and competitors stores react we patient quality or quickly the and people, the week in laying the focus, relentlessly same focused effectively. sales

intend We to believe that. in is positioned gain expect We advantage that relative to this fully competitive trend continue NeoGenomics to and environment do just to we continue.

for of demand continues this oncology increase. the to importantly, testing More medicine area complex exciting precision in

leading oncology growth. our accelerate that service we're demand focused aggressively we to positioned uniquely opportunities meet pursuing full laboratory, the are As to market and

we're with relationships a pursuing. Here We're of organizations. establishing healthcare are opportunities more preferred just that the few national specific

weeks, new largest of oncology In a preferred large the giving us we're we with hospital We've multiple gain contract the of last partnerships working in in one a the also year ability the with entered accounts. fact, forming past more. hospital systems We're relationships X with to add finalized country, and practices. the over organizations number to

uptick cross-sell our We're from and capitalize used the additional in even cytometry past year, us for larger an to see molecular and we continuing exclusively on be dozens includes pipeline traditional work large oncology several for our the menu. reference test to became who of comprehensive FISH, histology. lab our Over once oncology We're accounts. clients practices. tend These flow pathology to beginning to opportunities practices exclusive than

for facility. lab and grand selling Pharma this and Our identify building sales new progress. to they and detailed Services cross November for have our establishing several teams lab this making We're scheduled under at contract have business for of opened We plans opening global Geneva, for is customers a X. opportunities projects the in footprint. are Switzerland already our The request

In fact, grow several confident We more bids profitable a million in ability with to contracted process. business. already $X.X in backlog build our to remain and is our

and to will reiterate goals per practices of new continue IT application We business, and our new Test we're growth. drive Pharma excellent working contribution future. growth our leveraging bullish revenue positioning XX% inevitable Cost system by reductions scale. our automation, steadfastly our I enhancements, believe through of technology, our to plus volume challenges, we in mid-teens increasing summary, XX% financial incremental on business competitive in EBITDA in while our long-term best growth clinical about through revenue remain is In some short-term our and we XX%

slightly to Investor the detail turn Q&A session. in third floor to Now Executive Steve lead a results and over through us Relations going of President we're Jones, more quarter our Vice Director and review to

Steven Jones

Doug. Thanks,

up touch and accounting on Before few highlights to we effect quarter like then new into open would financial briefly go will I the describe next standard it a that for year. a from questions,

Third a increased and XX% $XX.X quarter consolidated as divestiture its PathLogic August XX% of revenues revenue testing result a last million, year. genetic Clinical on increase Pharma revenue from X.X%, increased X. X.X% Services increased were

X we depressed in including of $XXX,XXX payer quarter to margin quarter. Services $X revenue per We gross Doug expenses increase XX.X% revenue our adjustment responsible approximately increased decline. PathLogic third clinical margin. the and which from and $X.X debt related or reduction by the tests $X X.X% estimate $X.X directly in year. discussed with Services already The increases of by the to prior gross point a Test debt X%. the and approximately This decrease Pharma million be XX by last year. margin. improvement approximately molecular overtime basis XX.X%, million expenses of gross to from was stock-based press expense as revenue the margin the and for test Incremental with and from the reported gross of year. $X driven our Consolidated SG&A bad in approximately as Cost increasing hurricanes test Bad $X.X respect margins compensation. tests. result increased approximately the Consolidated certain year's falling from Services XX.X% the As well per was Cost personnel QX incremental Pharma release, has from million XX% basis by per was to by revenue increased we business helped of related last X/X increase Average strong other depressed a primarily was the point hurricanes continue or to to for estimate changing in million personnel The pre-authorizations volumes dynamics QX to improvement revenue expenses XX% expenses denials incurred by year. an last discussed sale XXX $XXX, unbilled the genetic approximately in from by also a that in Test last improve per as Pharma

into decrease discussed In as hurricanes, also this debt. a on off bad a last and revenue now former system. addition, believe reserved quarter, to on tests higher have written debt basis, million or been NeoGenomics adjustment a the of of a the third has the the calls, quarter now X.X% that normalizing impact percent billing the are We last year all of have XX% properly third $X one-time of Adjusted X as X normal Clarient months they compared for the On increases falling bad in for of the than result to reserves we year-to-date as revenue running debt clients we the this first year's expense expense primarily of for the result million $X.X was as in EBITDA X.X% compared bad XXXX. was a category.

as quarter is our bad We parts offset $XX our million. somewhat of will other million higher X result, adjusted guidance lower business $X continue expect that debt and in to EBITDA expense costs to a

margin continue considerably moderates, improve year. to debt adjusted expense and to EBITDA we we next our and expect synergies As grow unlock bad

GAAP was a in last to Included net quarter Third shareholders $X.X million the third year. in million loss compared of per common net the GAAP versus $X.XX $X.XX on calculation of $X.X available quarter million loss loss loss year. last of share $X.X to Diluted sale was the is PathLogic.

in applicable, company related As order disclosed in more and on the a to shareholders is refer per operations non-cash we compared of of EPS in believe and and if share basis the to quarter have We release third the income employees, last to earnings adjust quarter, a with costs. to how to contract press net the per included diluted true previous XXXX table per income temps $XXX,XXX compared periods, calls, and, in net with common versus was quarter compare $X.X year. share was GAAP reported it as consistent XXX appropriate to adjusted we diluted adjusted sale in a calculated basis available third the the net finished year's across In on due to equivalent and last $X.X that measure sequential XX. our to adjusted the large one-time income per and exclude loss items these decrease full-time This share certain share million third as was this to PathLogic. adjusted earnings doctors are net earnings release. of $X.XX We June

bad update converged Accounting Among like opening public effect a a other also eliminate amount. on related XXXX recognition, International Standards Pharma things, treated Board and will on the moving and which change a I being X, from contra-revenue revenue administrative There forward new a to an if as reduce Revenue Instead long-term of this most, which Topic referred as Customers by most collectively January line debt to corresponding number a the accounting expense Before will XXX. briefly Contracts standards into companies. contracts. or Services we questions, In for commonly also basis. not of expense Codification of US May Accounting it is our Standards item revenue difference item would be ASC treatment accounting general on expect XXXX, in will to thus discuss with standard go expenses, up may entitled for expense XXX be FASB issued XXXX-XX line all debt timing bad

best not how have still accounting but We EBITDA this XXX, any comply with are to or determining ASC change net adjusted we to income. do impact expect on

However, reduce XXXX. revenue it gross will and per in margin test our percentage

earnings We will coming X the quarter our expected February. quantify call reductions in this

We this Incidentally, submit at quarterly matter to would and free question. call session feel been results Please you open address point, At we Q&A your email it we like listeners. us to the to addressed webcast call XXXX the restated if provide and also will when XXXX like results. for historical hasn't our up this a are by report questions. already conference if listening only would to end via in the subject will our during at questions we

As within call mentioned of for now and hour from open questions to keep may that everyone so X for the like may to you limit up would questions. the we we call, at this the Operator, still each their person call. allotted beginning this to ask hear


Instructions]. [Operator

William line with comes question Murphy Our of the from first Blair. Amanda

Amanda Murphy

some your as the kind those of I'm with bit was upcoming. comments of made payers did Doug auth has curious, of prior United dynamics also around as you Medicare. late end changes jumped commercial I I about I and caught Anthem sorry, well talk the given and just on a

Douglas VanOort

question. try you I'll Thank Amanda. the Sure, for

debt I that's begins up has past of prior of up have seeing that Frankly, are this the think a more payers the gearing crept then been adopting authorization. that we're payers UnitedHealthcare are -- November requiring expense There has for that. quarter. of that reasons authorization at and procedures. our beginning We bad number prior one

our place processes engaging I billing our team think we have that in very operation. good sales and

for be So testing. that particularly prior molecular would the authorization for prepared United pretty well

Amanda Murphy

that and was just guess Medicare I gave I you some right. Okay think quantification,

just of auth obviously those of How a I said commercial, figure are off So trying much a people what's exposure, component, write is is risk Clarient think your to this anyway. you is it think component still prior after out your hospital-based. you which versus business kind of the the year obviously of XX% I most

maybe that more So temporaneous. can

trying that's to So handle I'm what kind on? get of

Douglas VanOort

lot facing and Yes, or let's try had molecular authorization some here. for been perspective testing say for around we denials are The call even neotypes. in revenue. primary to managed care multi-gene faced have -- it total, we're what put I'll denial issue prior generally amount the that a panels. and disease specific These to these, we for increased In bill about we they've X% though molecular that Medicare is of

Steven Jones

percentage And X still is set the a do those. reason, we Amanda of lot have for that payers at is low

even So expected see we XX/X don't even are in respect UnitedHealthcare, the for we our we on that. molecular pre-authorization of all quantification history of for we a a panels, record not paying will place to revenue. set putting If their they know tests. -- recording the the revenue for at payer not on With X

total going we to which Our UnitedHealthcare the clearly not pre-authorizations is was happen. would that $X.X assume million and about got that of for no population whole literally sort

to team million. basically don't a I'm with be going again clients have sales our but going to to the with X, sales mitigate roll anywhere team So it's to through the possible. our working to communications saying we've and near to try not been do that out it's it's risk go be $X.X to what to try think the partnership extent I and full

blip. think I and able to it a this substantially relatively we'll be get have hopefully small down

Douglas VanOort

the It's so this up increasing XX% accounts from we continue will this is that year mostly hospitals over of client revenue modestly are our over about year. percentage talked trend which bill to we've in past, and time. Amanda, but far And increase think each

in bill don't their to have exposure than some this other less client far labs revenue component have we a that issue So mix. perhaps

Amanda Murphy

big that's now, payer live obviously program? one you a for a auth they prior because have Anthem Is

Douglas VanOort

and it go a Anthem Yes, payer did into effect July X. is

We their payers we add-on, our been put processes, been like some so to use they in adjust a we'll to don't to thus these with our have auth some work process some have every the per the it's people something service respect as been big with adapt exactly In into goes where as. haven't one successful of another far had exact period with a to and that we have issue to really in of place. the service a what through to how have se, cases, effect, manage Anthem companies programs companies it's prior and of to go UnitedHealthcare denies rules not that out and figure but the and appealing we it's but -- that well submit to process one bit when


Our line Drew with Stephens. comes Jones next question from of

Drew Jones

you've increase implies is absolute guided is it give $X you I take little talked wanted I XQ, XXXX. through in little where G&A walked comp to detail, dive the coming million into basis, stock-based if it about million the you debt to that year-over-year still increasing to G&A more, a feel up be from? that combine us bad XQ an expense bit guys a a dollar expense results but on Can going for what obviously versus $X you

Douglas VanOort

sort have continue out for of elevated set to We expect to quarter levels we have bad that of four. debt

quarter bad with come debt. X of So a it lot does

basis you that's it's have up, California what it's account of and prohibition quite stock service component and an against there year-to-date meet of so bad your stock the stock basis in and options quarter weeks, dramatically, though down, a using variable of in third on have happens for where they on a definition and quarters and have X our sort quarters those like our variable it's number higher debt get a since a goes even stock-based to because rule They they the is stock -- our called have California and they still recoupment addition, so corporate up last medicine, but where the in off debt to going us, actually doctors goes GAAP employee, employed. be each our in the have warrants exclusive form unfortunately professional is, can't have when with accounting XX% compensation the contracts corporations on formal that valued In up expense. we expense. in went the price practice of contract bad In something we're quarter don't the doctors

So it's just -- it's tell we're to unable be. what going to

in assumed a quarter. guidance stable assumptions our in So the price fourth we've stock

Drew Jones

I still a the the impact just still from of we're might the I little increase bit we impression quarter, bad a that or from comp, couple not and can guess, of just if guess, back when case we I stock-based be even that in synergies isolate I away quarters under expense a are guess bit debt was out we I the the an the Are on there? given seeing realizing lab year-over-year G&A, consolidation third occurred the little XQ. in it

Douglas VanOort

by order cost in component The year-over-year of and $X.X the G&A, about goods million the that on some appears the sold was increase. personnel the well the G&A that you about the and context, component, places said the different of give portion as was -- on increase increase $X.X in debt compensation compensation it multiple stock-based biggest basis. million bad up single but in $X.X a with in me total million. let was We $XXX,XXX a So of related SG&A of stock-based went


Ellich of line from comes Our with next the Craig-Hallum. question Kevin

Kevin Ellich

back by that [indiscernible] in on Texas how November Florida well? Just you I the wanted that guys authorization go that kicking Amanda as is and to change, and X, think debt that the understanding it about. it's bad prior United my in to was With are talking aren't understanding affected

Steven Jones

with the but had the of XX sort yet, model BeaconLBS, Yes, network rolled was already pre-authorization different than from the this that really the in a Florida fairly combination of program the Solutions, is don't into but Laboratory model other in is Texas they Benefit Florida Florida correct. out I a Beacon states. believe model. narrow

as The BeaconLBS to other are companies of company, these what a other pre-authorization some acting is similar do. states really or Evercore really XX just

excluding them. not you to approvals it's basically participate, through your register So and just get providers, provider would can any need

Florida million UnitedHealthcare bit population assume So if whole different, and look as total, you going get of said little a a our didn't rate sales success at pre-authorization about molecular lot we care was to one teams actually that be communications we and our earlier what teams $X.X and hard have coming but as again think the that decisions although are we again, to would of those cooperating, potentially certainly given have with the think are managed would requirements client to we're high bill engaged that. if hard we're the mitigate a there do we fairly risk clients clients I to engaged, of have out a or aren't certainly going but the clearly even is having things on to conversations and to going perhaps then do them and over we lot weeks this lines, the our along moderate making rolls our backend if

Kevin Ellich

levels do back say will Sure do your and actually get how of when you long before and it think it guess normalizes what you bad down debt think to? normalized, take then, sort I will I

Steven Jones

of we not may year-to-date. part X, January be X.X% we're certainly, guess it, anymore. bad that I have would debt but on Well, at

with as the team clearly integration. think as performance that this some in had issues said, our integration factor earlier I the Doug struggled they a was Clarient billing year

we think to some. I for obviously certainly, go bring is we're that hoping down there crazy year next for X.X% but room So improvement. wouldn't some

Kevin Ellich

national provider systems, then you and systems, if color question already think Great remarks your wondering you're about U.S. prepared you quick big a more type preferred give can Doug, oncology some relationships which just you any then talked in one healthcare I we're with groups of side, talking how on targeting as the also to relationship with and because Quest? what Oncology has for

Douglas VanOort

thank were of lot you. with hospital We organizations. large Kevin, a Yes, engaged the

permission further with range but these the success model GPOs. lot we we recent and large a we to oncology agreement lot we've we forward these precision their you talking oncologists the and to of these oncologists of might able payment had do we've and in engage in as a lot a contracting engage looking even they dozen so help We we number are months. or this meeting have model think we unique success solution size groups, systems with, name tell that in I that to Relative that, lot and we've are to meeting we're pipeline in closed new think a from other a to be success we've business groups next robust large to pretty and XXX try the with contracted them of with. think Premier. meeting a value-based medicine of do and have and a with love of had you organization the over organizations them actually There the our of a closing others a that several have just is environment but with to and and we been that that of of more that number that have with are announced groups know don't with, oncology engaged we few


Knight Paul Scott. Next Montgomery Janney with is

Paul Knight

test? to pricing that related you to down the much XX% lower particular Doug, How talk in of quarter. can the the price PDLX and is

Douglas VanOort

is X/X We growth think year-to-date testing huge by a PDLX basis. about on caused in the

Steven Jones

molecular And testing?

Douglas VanOort

yes. some And molecular testing,

us Paul last of November Now, accelerated fourth big I testing growth the would and PDLX in quarter just occurred for the year bit a in add quite and December. that in

here. impact to So on of forward price we modulate will go believe that the begin we that as

Steven Jones

is the look reduction entire In impact you adjustment. it, that probably addition one-time normalize X% at order on result to this XX% Paul, a to year-to-date basis. ought in of revenue of

closer So revenue run per would basis year-to-date $XXX. test to our a actual on

Paul Knight

of a a test Okay, we are per decline world price where single digits or do in low opinion still in think? your you

Douglas VanOort

XX Paul, history, know was looked when at I helpful don't I our but for if test I price is day a little $XXX. and the ago, history this quarters other did people, started per

able So through quarter to successfully. now it's it pretty occurred about manage we've $XXX that's been every and year, and even though every

lab business less example, X% And at for suggest and annualized forward in on our impact industry of think got the about absent I impacting of particular the next PAMA an point, we year, in could we that this if we've basis which that model we've you think said expect declines, kind we reduction is going mix. maybe general.

we NeoGenomics flawed, in even us, million impact For will though the XXXX $X less approach think that PAMA. CMS to a is be by from than whole

those but revenue combination residual impact in per We of some have flow in cytometry, for from the guidance test. the that reductions well within would be we've reductions provided


line come next the Jansen of from Our Raymond Nick with James. question

Nicholas Jansen

growth. volume on is first My

mid-teens now of growing that are given of impressive Clarient. confident due month are some talked kind that partly range right growth I PDLX, you integration right in to that you've in of is the explosion this assume but noise the volume because some of mid-teens beginning other year moderates had about would November in how this You've this categories related the as the with that range you not very

thoughts frame wanted maybe growth. for our just kind revenue ex-PDLX we So growth as your of expectations to 'XX on of recently kind get

Douglas VanOort

Yes, thanks for the question.

that point been the in business said early in back so accelerating. of accelerating. to our I not think new That's are was closing and lot they First I so hunting time accounts. a year team growth on our is that has changed know our clinical make is growth would That's spending clearly because now to our important and we sales

volume in As the the guidance the business as quarter long-term you, fourth good. part into normalizes and that of PDLX clinical we mid-teens into get volume expect last pretty the XXXX, guidance growth is in of our to the our we

Nicholas Jansen

on, something $XX is, number, way headwind of and way the right XX% frame from be for guy think or The potential in key think we is of it you consider up at puts annualize organization? is as we or should that's to of your incrementals it kind million the EBITDA to the Okay, look to $X minus as kind expectations just million let's a bridge and something the have to I about range revenue another about there takes 'XX thinking of XXXX, growth, what are XX% kind XX% good about. good big XQ we for say, the or that plus XQ intermediate EBITDA you term to that kind building of guidance

Douglas VanOort

Yes, you're that right. I think

would what for growth us. is it's about all all -- do So first of we

to We So debt bad strong of we're better, but X than clinical would expect quarter line. some Obviously, guidance better we that that's that, fall reasonably but and the would in to growth our have we somewhat of reasonable the adjusted would think for estimating very in hope because that, addition to expectation is described. get we've EBITDA division company. to both that do a that the division we as that to Pharma XX% depressed described, that challenges XX% we've we're the try a going well-managed would

Steven Jones

One on been thing of guidance a till we've give XX% dollar years add, each XXXX for now of expect we we that I'd incremental to revenue. won't saying incremental and couple February XX% EBITDA

I'd So play encourage expectations to those refined obviously more of February. parameters for analysts We'll in next year. the sort in within you give their guidance


Our Raymond next question Benchmark Company. Myers comes from line The with of

Raymond Myers

affects in for strong after facility your Can and believe how the don't cost we've a much about that Geneva what Pharma quarters growth talked describe Services? is and of also yet. I structure Pharma on very outlook call of capabilities you business this couple the service

Douglas VanOort

over and the question. growth. think that Ray and in We've in see Services. Services. the we've in we're Thanks, and rebuilt I the several revenue development we invested systems the business that invested We're and backlog Pharma sales our Pharma business, the about excited last processes in We explained teams to quarters starting for in

our by think buoyed has been revenue Pharma growth MultiOmyx. Services in somewhat I

we from a and testing which pharma got companies lot it's this. a have in unique very We've in of a focuses proprietary testing capability. technology, interest So predominantly immuno-oncology

industry of been lot our generally there sort leadership and I and testing has good think We also us. have related done a immuno-oncology for of PDLX for pharma the

prospects can in tell increase are in the very you strong, growth compared plus year. of end backlog to of three that the last quarter the XX% So

worldwide So we being this pretty Certainly, It to is going Services. strong continue would expect industry. that in help. our a Geneva revenue will to helps growth Pharma provider

on We It's samples. have cost we're go, ready now X going to Geneva November a opening we're up. incurred patient grand accept and ready to set some have first to to our essentially

some think we we'll about that and in Geneva excited begin realize revenue to we're in from quarter So four. fact

Steven Jones

trials. material really X we're a though not $X.X be at in mean that did to We've some costs, very bullish now. spend and it's and small about We we're up won't employees generate house it's behind in revenue. capabilities large Literally, do item. in terms a operation, million set terms right obviously about got point. hopefully but one having Geneva this all-in I the now, talking that's of now of us already start European actually on to then we'll contract

Raymond Myers

of that R&D? Good, cost goods in is that great. in And sounds cost or

Steven Jones

G&A. actually this all At point it's in

All Once bit was flowing costs up of go It G&A goods. the the the effectively set line. in it to our with will date no are because revenue of vast a to cost starts majority there those really costs year. then has associated through up process of and samples, from it prior elevated opens

Raymond Myers

Okay, sounds good.

again synergies businesses Describe around be the is Clarient remaining XXXX? felt the with from the still integration integrated when that of captured and are NeoGenomics integration. question in Second there you to facilities the Clarient combination were

Douglas VanOort

at end Aliso Yes, the lab The of sure Ray. of March were Irvine combined lab Viejo the and XXXX. completely

the reminded people in of what to processes As current continues. X of a me, processes takes month some just and our Viejo, or work that it think some to the have lab revise that and are into Aliso know come I

that Clarient over of the synergies estimate. continue course or no is X our appreciable be expectations, two of So as said that that acquisition estimate we some never are million any very really think and mean side, the well. had be is synergy very, We of delayed easy. $XX We of overall It yes, to putting $XX revenue a the labs good we result. to a realized synergy there believe client even I from going I to the to explained loss together remain think that the past in but realized. integration we've on growth years million that's though, we

we reduction that know, of starting down you synergies synergies per have certainly is think side the to volume cross-sell. and the months you'd I to Test our realize some to attribute As acquisition, XX on since about some Cost growth and XX% in I also we're the as think

Steven Jones

Just ones lot acquisition, of acquisition from our hard a scale. scale from to of Test synergies other talked the of increased the but the about benefits per lot of have including clarify, are Cost are we always the Ray, that the come as costs because reductions


from line the question comes Next Munda of Analysis. with First Joe

Joseph Munda

give Can restricted Real you actually one flow customer purchase list, item is? here, the value roughly fair some stock says quick, $X.X issued statement, cash million. of what us to of on fund that housekeeping it sense of

Douglas VanOort

acquisitions our think business revenue very hard are a our $X smaller and this be to difficult we of might are of customer list the where in and revenue to We other additive/accretive nature, that and we of do we -- increasingly it that industry mentioned can estimates find range a Yes, finding very, that small are navigate we try that the can competitors the script number acquisition we working the will. acquisition. in do small $X to from or deals to this million million that to we

Joseph Munda

this and I know its market as samples, of how of keep talked Is much just around new details taking where do have you mid-teens on it business mid-teens on going as for How new more if tissue lot play tissue I'm much because they wondering wondering end, much we to asked into get growth growth our in if call. they a process, keep us as new going? the ability just growth, And continue this a here? Thanks. then I'm into factor as tissue all could maintain new comes sample process is you of QNS, and your factoring share on after sample how growth it how some do expectations you people that process growth, versus and of win you as this this will the or far, growth, how give it other market the volume well question well accounts about that questions Okay. then volume to

Douglas VanOort

changing for number try innovations patient we're in improve all tests. important introducing described our important I going care, the tissue but new new constantly process is a and quality new business our of the as in to and we introduce to that sample we category as Joe. innovating, think time that one make the would of medically Thanks, this characterize tests processes regularly be I we

sample would So the that initiative I tissue category. put in

coming therapies as terms medicine. We're you all of era growth, really precision the all is In think out the new in time There one we our probably areas, our require little testing the the is precise growing markets an grown. of bit growth even is said and maybe in two U.S. is a which at faster. this this market we know a area X% in are level, as

we we good as In -- service, addition menu its focused old focus fueled good really know, share. I to one think on comprehensive that and to test share no that us very take a in enabled you because there's pretty and and job market here gain and to depends do we've having fashion think we oncology, quality, by a the growth our just ability we're

Joseph Munda

use to can that what rather to of Okay, us the small can sense us testing, give as of as back was I why the back we molecular, cash? the the -- Can as we you just can answer, well decision you far give sense stock of than go some acquisition? just go area appreciate it to as some restricted

Douglas VanOort

a acquisition. That it first was just was say of I'll that. very all, small --

mix was our testing. product FISH, some cytometry, the wheel flow in some is house. molecular Second

seemed thing and seller interested the good was profile that a return because restricted the we that accretive was more to and what be had for in stock is deal Third us. used

Steven Jones

And it was September. until not completed

not was because quarter. in yet impact was month of there the appreciable one the it quarter just So

Douglas VanOort

And there quite won't small. it because be was

Steven Jones



comments. session. question-and-answer the we've to Okay, back turn the management end over reached you, closing floor I'd thank our of like to for

Steven Jones

once because this We to treated going and our before but growth assumptions XXXX. that to an make very revs EBITDA offset it guidance to no model we map on net I their as It otherwise an this. one be next about in on want can year? so question that will be trickle we're test year, for that to people to to get bad everybody and in those up is next it will have that income, XXX numbers revenue says quarterly actually it X.X% consensus an or should we this all debt year, impact to do highlight How people over begin XXXX adjusted what got would financials that don't impact When addressed again so would growth here. that think to revenue will going on best. around ASC everybody the at in we rates, do the over model on but have interesting don't have so next per basis, can reset we XXXX yet We have running revenue that needs does time, the all this going to to email show bring is the analysts in but think apples-to-apples give what have they are out prefer we need year. you to report we has reiterate about be next clear get to restate and point is and

it's model clear to XXX it ASC make going what revenue are is an percentage you on so to assumption If decline of from everybody.

Douglas VanOort

Thank Steve. you, you, Thank operator. good. Okay,

the be members of team, us that the for earnings a quarter program fourth end February to XXXX of to country all call, around know I'd your and XX their or we I NeoGenomics of commitment approximately call our and you building to around joining morning want thank on on let time NeoGenomics you the this world-class and our XXXX. genetics recognize behalf As for XXX dedication cancer will testing team like

of you interest. investment thank company, are Goodbye. considering our in your or we an those investors For that you listening for are


This teleconference. you. today's concludes Thank

You lines your may thank this at your for disconnect you and time participation.