NEO Neogenomics

Douglas VanOort Chief Executive Officer and Chairman
Sharon Virag Chief Financial Officer
Robert Shovlin President of Clinical Services Division
George Cardoza President of Pharma Services Division
William Bonello Chief Strategy and Corporate Development Officer and Director of Investor Relations.
Drew Jones Stephens Inc
Kevin Ellich Craig-Hallum Capital Group
Puneet Souda SVB Leerink
Brian Weinstein William Blair & Company
John Hsu Raymond James & Associates
Joseph Munda First Analysis
Paul Knight Janney Montgomery Scott
Bruce Jackson Benchmark Company
Call transcript
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Good day ladies and gentleman and welcome to NeoGenomics Inc. Fourth Quarter and Full-year 2018 Financial Results Conference Call.

As a reminder today’s meeting is being recorded. All lines have been placed on a listen-only mode and the floor will be open for your questions and comments following the presentation. [Operator Instructions] And now at this time for opening remarks and introduction, I’m pleased to turn the floor over to Mr. VanOort. Doug sir. ahead go Please

Douglas VanOort

you, Jim to conference I like morning and everyone to good welcome XXXX everyone. NeoGenomics' would Thank fourth call. quarter

Virag, and Rob and Relations. from headquarters Cardoza, Clinical Development President me Fort Officer, Pharma our Director Chief George Sharon Chief Services Strategy our Division; Corporate Joining Services Division; Investor Financial Bonello, President Shovlin, our Officer; of of Bill our of is Myers and

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

William Bonello

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

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

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

Douglas VanOort

you, Thank Bill.

on review, more both, several key financial comment financial some near-term and and After results. call, initiatives growth and growth. Sharon a that turn of we for over four investments are review highlights today's long-term I will drive I review then to detailed of the that briefly call quarter will to For our the making

have then and answers. will We questions time for

with XX% EBITDA begin quarter very with when and XX%. days Let’s and We the In impact revenue revenue services four and test. was growth top-line XX% and efforts EBITDA four division, quarter improve We both EBITDA excluding per we with up Those our of reported pleased clinical of XX% growth our achieve to organic record results the adjusted and included adjusted financial were Genoptix, continue results cost adjusted results growth. revenue Genoptix XX performance. from to good highlights. was

in And Excluding quarter's up was growth to of both quarter the contracts exceptionally impact in per than normal, all-time significant make the services our we year-over-year XX% record profitability bit X%. even X% our an XX% levels increased in to per by an against little and reached was we Clinical an tests lower for prior volume $XX.X grew December revenue Obviously revenue expansion high a a the and EBITDA to were Genoptix Genoptix. with actually excluding backlog to XXXX. million. investments but XX% November, year-over-year lowered XX new was year test growth low during impact and signed historical achieved adjusted as continued year-over-year, We Genoptix, The XX%. has as year-over-year returned was and growth. of million we levels were margin of of strong of comparison. Volume Clinical unusually future cost million. year-to-date $XX record Pharma we margins. year-over-year average up increased test volume by X% test resulting

a strategic record service collections outstanding. were of also a strong we quarter. very XXth. our front, Cash level reached were retention levels a and On completed levels December excellent were Importantly, Genoptix for and acquisition customer on the

a acquisition on all this customer had included oncology partnership and are position I our to competitive year more to hospitals, later also owned a our segments NeoGenomics call. subsequent hospitals, even oncologists, community have company of we the we leveraging and more which the about our the followed opportunities eventful results including apart good in excited strategic unprecedented preferred ownership practices about The practices. secondary our pathologists we about offerings are we two of stock exit combination Neo deal. that by It cancer Genoptix. stock care offering even from among each and feel an Company with GE's provide Genoptix fourth very were excited ownership, company, and than million quarterly announced even activities $XXX by XXXX. will be sets performance, pathologists, PPD, and update our good patients. their us at more by We allows from more reach of best XXXX, acquisition and unifying in today and payers Genoptix of for new capped the Now redemption This detailed strong integration quarter months the with time GE in and

Virag talk we about review of financial our for quarter results. a Financial to to Before turn Chief opportunities, call Officer those the like fourth more would I over Sharon detailed

Sharon Virag

year. per volumes increased revenues $XX.X quarter to Clinical $XX.X Thank and XX% from increase tests million million. pharma revenue average revenue to and XX% increased increased to XX.X% X% last million XX% to you increased services $XX.X XXX,XXX services Doug, Clinical test were our $XXX. a fourth revenue

X% per and the of X.X% increased XX% revenue, to $XXX. to Excluding impact revenue volume increased Genoptix test million, $XX.X average grew

a improved downward to gains, we per modestly higher are in improvement to related cost These EPS. growth. past revenue on per during $XX.X of driven then attributable related have positive XXX experienced of $XX.X adjusted less the expenses G&A we $X.X improved to discussed expenses are we from non-recurring is non-GAAP represents see that are This of quarter, up increase addition and $X.X Gross accounted and margin professional balance by at several by is had over quarter. increased cash of EBITDA, test. on cost. we prices on our optimistic gross this collections. pressure million, fees adjusted million points by profit in prior million impacting and to increase year-over-year adjustment the approximately one-time to to Also, the of this and net XX% our the costs. increases test improvement acquisition margin million million increased productivity Gross or increase year-over-year revenue payroll per impact contribution calculation adjusted beginning efficiency transaction in last primarily a $XX.X XX% income $XX.X was year, by Genoptix payroll years. million related XX% basis the the revenue Genoptix, As XX.X%. test The

one-time last Excluding to than year's G&A in and marketing made to XX% investment our to cost year-over-year increased the due million by support and infrastructure increase higher acquisition. primarily the $X of XX% cost reflects the Sales key continued impact G&A expenses this Genoptix, were Company’s growth. Genoptix

It’s in periods. as a non-cash million prior XXXX marketing investment and $XXX,XXX diluted top-line order was per was to adjusted attributable increase and these income which this marginal net with guidance income income share an to XX% one-time we adjusted Genoptix income per to within adjusted zero on We the increase was a and included income sales net across versus to net share excluding for contribution the calculated of the have per basis income XX%. appropriate last diluted available $X.XX share earnings marketing on revenue Excluding of to true believe to Adjusted applicable compare Company is We refer related cost. our the $X.X our quarter Company’s to expenses earnings fourth in GAAP of was in growth. net and common important made that income how common growth to items and support measure EBITDA or impact year, Genoptix similar share million were of and diluted net basis loss consistent teams to and to more XX% of per exclude the reflects shareholders year. XX%, table G&A long-term in quarter this adjust shareholders $XX year-over-year release. to compared than the certain on XX% a is Fourth in higher GAAP sales operation of EBITDA are

with $X.X fourth In EPS cash collections diluted range. have income the to $XX.X XXXX. for debt Cash financing. the increased the As million in net $X.X XX year is X $XX.X to of past, of lease in quarter to sequentially $XX.X flow days seven capital impact $X.XX of mentioned was full-year the we remainder the million improving DSOs into Genoptix. operations fall some $XXX total We leases. the excluding that critical quarter, including XX% $X.XX quarters was cash were million million XXX% guidance compared versus expect with with quarter XX% the of some we were below and from Cash with in Capital million. quarter in $XX in ended range under the prior the strong Adjusted quarters CapEx average million expenditures year. for million and days, that adjusted above and the to on a a to

million growth place XXX equivalent compared the shares we Genoptix fourth XXXX with we $XXX one of We with million $XXX.X test stock. in consolidated year-over-year During XXXX. full as full-year for of and December and time in cash finished September of volumes approximately XXX including employees, as contract XX, the and XXXX in representing temps legacy doctors million increased the quarter, XXXX. acquisition finished revenues and XX.X% basis XXXX XX.X% quarter versus completed common Genoptix a to XX, of XXXX On

improved test of corresponded We X.X%. gross X.X% revenue This test also a points a experienced saw basis per in XXX margin improvement and year-over-year. cost to per decrease

expanded EBITDA basis growth XXXX of our versus XXXX, we EBITDA Additionally, points represents which million, adjusted and adjusted XX.X%. margin year-over-year $XX.X to XXX posted XX.X%

and revenue XXXX full-year earnings issuing are We guidance.

in volume Genoptix, adjusted expect want the anticipated NeoGenomics XX% the volume growth to and single-digit address legacy I our range clinical of be legacy revenue. an $XX range growth to million revenue test per from declines We $XXX approximately XX% to Low services about Pharma revenue to in assumes million. business. $XX guidance expectation. consolidated million approximately million of $XXX be growth to question and revenue on services EBITDA This NeoGenomics million of to $XX $XX million in in

volume of historically many guided know, you we to have As mid-teens growth.

long-term we to a believe that normal can grow a at that rate business We the on basis and in continue year. operating

lower XXXX an a it the by growth encouraged to retention. than growth top customer not year. integration priority integration. That of us, lose be goal year. will volume in slightly we our sales opportunities normal for The during are prudent single customer is team to It’s why our However, that is forecast seems front this

I XXXX to just to want our minute take for plans discuss a Finally reporting results.

and Genoptix did This quarter, metrics. impact certain on acquisition this and that guidance estimates analyst Genoptix fourth our the we quarter excluded revenue impact because We the our results. on EBITDA and most of XXXX had quantified results

we will be on qualifying specific not we Genoptix impact the Going forward, results.

are who integration on on our synergies Doug assumptions That call to both key said, would additional and will initiatives you that some cost rapid will we revenue expect from keep with I cliff Genoptix it segregate such and we the compression. of commentary and basic to opportunity. back now provide to XXXX results and our progress We impractical attracting at apprised over turn business. as activities the be rest counterproductive will a our

Douglas VanOort

like would integration update begin Genoptix I activities. and Sharon. you, with Thank our to on an

We to heard that this sense reaffirms seen payers, since closing combination the of combine XXth have patients, excited the the Virtually December of best of the our makes shareholders. lot this best Genoptix a providers, about acquisition with we everything conviction opportunity and employees are and very NeoGenomics. for on

process. are its oncologists. Standard for years and this our developed community-based excellent a activities are at commercial in focused operational the I'm our privately company leading to complex Rob forward our Most learning’s integrations is schedule. and teams the of is integration. products outstanding that industry. and The report remains market experience with reporting this building to very aspects of are reputation a that Shovlin is pace rapid financial As Gold leading developed NeoGenomics’ a held and Sharon Genoptix much moving a an applying testing integration and segment integration many services on for now with the we Virag we integration on quality for happy company have with business of and

key highly on-track. and as a leadership have are estimates positions growth physicians quickly We Several are that fill are people have moving Genoptix. as with deal verified working after leaders assumed number Genoptix new after alignment making and met organization review progress, from six weeks territory a plans of finance commercial and great possible, each Since the developed constraint to are welcome growth very of integrated a of sales a a new within operations relief. we Shortly deliberately we is our to our after us and number we significant member is and in Then, synergy people and Genoptix and closing. this feel out finding with complete been good rolled we qualified teams our of the sales closing team. analysis, all

now commercial approximately Just our our division. successful professionals clinical nine firm have our division We and services now organization. very people We national have services Counting we a sales care in last held in our meeting. XXX week marketing sales teams. and managed in XX

commitment a lab found corporate operations departments the medical Genoptix, all enthusiasm at high have and experience, support and of across We team, level including functions. very

strong operations the believe and and most team our combines beneficial existing professionals diagnostics medical in which now PhD's pathologists the be our to the team scientific and have XX is the to excellent extremely to we of approximately an have to operations On molecular in and Genoptix cancer capable one teams group particular, medical our Genoptix PhD's. has our I and capabilities country. lab going now of of MDs future In molecular and largest team, combination total added strategies. and for of

turnaround Company. now leadership Also our standardize operations, practices to consolidate The by at are best be performed current allowed test in immediately menus reduction already clients [indiscernible]. NeoGenomics molecular of lab for out solid Genoptix is testing improvement an send service has the tumor test have we combined at and which cost and on. for at to Genoptix leaders in internally and identified worked and we molecular Former will for a sent broader out time both and formally Internalizing tests part nearly menu patients. least our

to purposely to hope and representatives were we come leveraging synergy was contracts. have tumor comprehensive on customers did and also our in that not sales include trying to believe win that business. managed care that business large is a managed We amount serve as have over significant portfolio that contracts The of Although believe reps with deal to have gain they to test NeoGenomics business synergy other GPO because solid not out Genoptix network did overtime revenue they care customers contracts large number not Genoptix confirmed work our of plants that because missed a sending large of an labs, existing does in have provider with test by leverage menu our portfolio contracts to time. to many actively and opportunity good there revenue menu increase models, we a payer with. of

to a on superior customer long list laser our integration, critical is NeoGenomics other and through of client levels time top high as service. work priority retention aspects is the retention. of we customer focused service satisfaction. As Obviously turnaround maintaining is is

that We XX throughout ranged proud during to are customer our satisfied process. and to takes those what it the will with We promoter XXXX, surveys to understand our responses XXXX quite scores to XX. net customers from we try integration maintain approximately

exciting growth explanation. do most important initiatives other a of are warrant lot four successfully While our There as job we this an have Genoptix that year, integrating underway.

of national commercial providers continue direct and First, strong basis. systems, payers on our and hospital ability purchasing a practices. we oncology to organizations, activity delivery serve with is large and a payers, networks This scale integrated to large sign contracts group result

important contracts physicians recently expand then to in quarter awarded before new fourth announced several transition. contracts months fully agreements take typically Premier, we access to Once addition our Cigna patients. months and and added further referring the and to In more several several with to they beginning are

have As months. beginning growth visibility several we in to a result, some next good the volume

proactive make measures to continue test. address with per our revenue progress we Second, to

for We plan improving occur. activities our test, areas more process analysis denials non-covered underpaid These securing are trends, when avoid denials and the identified effectively they for a reimbursement to have where and working being we existing do enhanced improvement. include coverage billing our implemented of

to We are appropriately not are tests identify also priced. evaluating our fee that schedules

Our services efforts. from initial of seeing some suggest pharma recent third are our division. benefits growth these results area we that exciting A is

You backlog and trials by which contracts, have of may noticed at our $XXX basis to market our million is grew on that nicely and strong each nearly unique growth demand totaled revenue XXXX by our a quarter capabilities. year-over-year this for during sequential driven oncology growth revenue fueled clinical also year-end. strong is We believe signed that

the capabilities our biomarker and complementary test a or to able to companion those of increasing becoming drug help upon of commercially approval interest One that with clients. sponsor be pharma offer to is ability diagnostic immediately

build to invest serve capabilities global clients, our pharma We infrastructure. continue out to a including our of

in to beginning our projects are We through see Switzerland. roll lab

We are our slated as for are China planning in well. Singapore open stages lab in we two the and weeks just to

to global with We partnership also continue about be excited our PPD.

We and and outstanding bids wins biotech today. companies with have handful a a early of number pharma of

We activity make FDA we as initiative. expect the over with especially pace Asia. capabilities of Fourth, add to time, in our continue we progress increase to

We the panel attractiveness excited these expect benefit plans Even strength our we sequencing test large excited trials team. FDA and late other and companies seeking our believe next in in of oncology our the our After the decided business, diagnostics. from an the about approval with pharma quite process a Genoptix quarter by with helping the we it. year. clinical additions We new further divisions revisions, market multi or Pharma clinical we reimbursement our are from closed we this in and assay for drive us and companion of In our near-term gene third to involving services make labs, testing to to previous approved to some differentiating physician are that long-term deal to have of multi opportunities. broader our FDA we on and FDA for the detail offering generation we fourth to As next calls, essay review in both growth quarter gene submit sequencing discussed will our and panel. are the about in summary, the generation increasing our

for protocols quality appropriate lives. laboratory role improving plays patients, critical care in testing Sophisticated increasingly and an ultimately care identifying saving cancer of

role healthcare system through to vital value We that questions Bill believe creating in our I and an services employee, to us hand segment lead pleased patients, are our play and now of for investors. over this will answers. to important the call our and are for customers

William Bonello

At to submit matter you call Q&A us it session question, at only, this listening for and free webcast our hasn't addressed the if would questions a we address been your by we listeners. the point, will this up already the call-in like via are like open and Incidentally, end, would to please if questions. to e-mail feel during at conference subject

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


from Instructions] question our Please Inc. [Operator go will ahead. with Stephens today you. Drew Thank Jones We first take

Drew Jones

Thanks morning good guys.

given was around to that November decision us the slowed on and the Doug the volume start improved XXXX. the able factored then year-to-date volume conservative be commentary could guidance on what tell and that you to it trajectory maybe to how more the for growth into with maybe quickly wanted in growth just Just things

Douglas VanOort

but and clients, our was a that are really related and didn’t really look us has was volume in to completely going year-to-date. volume from strong but a in responsible we it any that. are and clients, we We bounced been for of we explanation through we don't be projections We reduction ordering had low great surprisingly to December pretty thought and that cautious, growth strong have as we a we different believe integration The guidance slight here lot are forward, lose honest. Sure. the volume growth pricing in it November for back pipelines and

Drew Jones

quantify moving support there, something opportunity maybe to these guys much test in have been Okay, you to runway positive, showed kind tests initiatives and that it of can on that on are momentum the volume looks with how enacting, some pretty, you outlook maybe improvement price the non-covered per there? of these existing way the of left to

Douglas VanOort

it me getting are to the I that Let are prices and few Sharon. comments not more would necessarily, we that make test we paid we the making, already say raising just turn try a because over and is it’s then work per to about reimbursement for will that we improvements are being efficient I do.

that a of managed care you add to We certainly that also continue know I Sharon place us were of the continue and tools plans generally, plans to billing the a decline kind worked have will are do have which reimbursement, we to to we implementing managed helps, of in put in we anything of our you offset marketplace. number add. with have think lot but care in try our to seeing list to to tools that get natural process and help

Sharon Virag

do Yes, I would that.

in happy to the in with shouldn’t in would be we be that that numbers way are decrease all expect contracts this on flat, happy is the volume, and which just you, that stayed these would we on we might all the doing and We to flat. the so be had If bit trying project basically did moving. year. guidance we have given against if that we full I a can in we to means come people opportunity but and light efforts price hold of contracting for everything, willing little they these of it, and able see are As be back of GPO forever us our of flexible a that be have serve we what I to which

Drew Jones

guys. you Thank

Douglas VanOort

Drew. you Thank


Craig-Hallum. Kevin Instructions] will go [Operator go with Please Ellich to We now ahead.

Kevin Ellich

there, the $XX discussion questions. couple taking Genoptix Thanks morning. a of the million called $XX for guidance that Lot and in your integration on Good to acquisition out guys questions you million Doug just review. the

slight it us you there if on seems decrease any findings how had to deal is early is you deal, that a wondering I’m like is relative wondering you going. that first when the seasonality, expected, that Just give what but just guys can announced

Sharon Virag


the So, on in is compression and revenue that are for the is so they in there the a everything after there as we where revenue had revenue went we that way competitors once going reflect in we network, is change thought during full they back we we had the particular, we range. we great. to up compression and of in parties, that diligence, confirm, that third be network contracts access know do you and which I back think went line we were because visibility do out full that fought are was And

we why that was have what We that would was year. discontinued that psychology, wanted really and see gone of And want we also to sure range synergies, to a to the comfortable not going but happen in able immediately, feel that that to piece. the something is off to because going XX with Doug. revenue here where range see that be pricing their we that a weren’t very of is so some discontinued realistic time and are little business lower, that make so bit in piece margins a small we you is so of come

Douglas VanOort

seeing it the volume we that and far good the one was are has Genoptix would well its I feel we thing stabilized about far. stabilized but declining that last add what is we was so acquisition, and just so completed pretty pretty year, it when and declining Yes.

Kevin Ellich

Doug PPD remarks just the collaboration, talked or your helpful. wins about is partnership prepared on in And bids. early you existing then That quickly and

rate and more or wondering run on-track give on of Just there for $XX size Thanks. any still if wins can revenue by those that upside is are end million some you the potentially year there. color you of

Douglas VanOort

with is to to George Kevin, us. here over I’m that turn Cardoza who going

George Cardoza


competitive meeting team For customers, ago international can’t of the Asia and have the early few we weeks out happy with next we give them. at particular are some are entire week reasons but over really we their we sales presented revenue we alliance, to had wins, to actually travelling with

continue lot to remain be a of we bids there the have So joint excited very we and things on-track, about alliance. out

Kevin Ellich

you. Thank

Douglas VanOort

Thanks Kevin.


ahead. come will from question with SBB go next Souda Puneet Please Our Leerink.

Puneet Souda

for thanks Doug, the question. Hi

just you first, coming larger internally briefly but it volume, overall tumor in touching make I So, rep I’m to you again is network, correctly, good your and sure commercial you are is solid sales wanted volume on is just obviously that moving know visibility guide Genoptix have understanding have organizations implying and here.

just So have want more the I ups. to is follow you that you else just discontinued thank a that few to something and due more making decline I or understand here guidance there to is make wanted that volume the overall sure little pieces correctly is conservative, I just

William Bonello

And Puneet. guidance than about Its - a teens lower talking I we bit Bill, And legacy NeoGenomics the business, our are mid XX% one. Again the little that modeling volume take Hey which on will historical guidance. long-term the is Genoptix is all growth be focused fact we else. and integrating being entire our long-term going our lower that for know that that projects. are we customer sales front bit are out, reason big of know as is us, the than on by the little to retention a above force just are during our be new so out a and entities single do pointed going is integration not you Ideally, and what it is but lose excited we being important winning very you in reality that number is a are average more but customer. we we customer a to of to one prudent, able and both, objective that than can happen that will

sense conservatively makes prudently. standpoint - conservatively, a it from to not So but guidance project

Puneet Souda

client if the the appreciate then touch And or customer. I could on little Okay, bit that. I a

a so You sense on going are do is what for integration. that had have color of of result integration, pleased aspects and Could one across two how with and standard business know to either IT it as COMPASs and using they or the your NEO have far, are comments of then feedback any you give the maybe from in them there oncologists excited conversations you reports, gold just the or integrate about or the are haven’t some investment about Thanks. some customers pathologists those usually integration. you us of now that

Douglas VanOort

far lot going NeoGenomics so quite and through we what customers we that out talk a we combination in are Puneet, are about the Genoptix. with there of pleased and the are

opportunity Genoptix to the think access broader tumor the the about solid side. pleased customers I are on particularly a menu,

some of wins that in that are before. seeing were offering in think turnaround already internally previously a good And feeling are customers early are I what negative is times no are sent out from about we the performed pathologists reaction side, change not over now to have we also the had talked that superior our I Genoptix terms fact think frankly, with expanded think and We there were service at time, on being they lot offerings. by tests of NeoGenomics I they

the the offer our and now are into NEO will which In that oncologists network. oncologist of And know of the COMPASs, is things of offer result to broadly a terms you as efforts. the programming in a product gold as COMPASs for systems we we right is one to we that standard integration the of across completion

Puneet Souda

thank Great, queue. the will in Yes. you, back jump I


William We Instructions] will Blair. Weinstein Brian next to with [Operator

Brian Weinstein

given just just why couple revenue. losing there to rep want that feel these things, the that customers you just for morning. the what kind in good about risk XXXX of understand differently to base, go you Obviously that this, kind in - back of versus different there understand focused a notion is trying thanks I customers XXXX that of integration think are these to guys just is mean of gives on good trying about here. NeoGenomics this you customers Doug, I and I'm legacy but on change concern of any lot think there? offering. a is taking of a guys, some the that the questions Hey I doing A said and not bit

that bit. a just of help So understand kind little me

Douglas VanOort

address if to mind that over you it turn Brian. just don’t will Shovlin Rob I to

Robert Shovlin

Yes, Rob. hi, this is

the commercial So weeks we six pretty quickly organization close. of integrated within our

sales NEO legacy so So the redrawn are each the new the of now sales Genoptix themselves boundaries, have legacy client. and are legacy these Genoptix reps have introducing and organization, clients, reps we reps that when for now we NeoGenomics to territory one

newly So changes will getting and to time with new and need the clients on items, as any need to integration acclimated integration. their our based clients we on then they their spend we move with structured forward educate territory

existing base their those not clients, territories. distractions aggressively what are there managing they are of So would we selling in the where some new but call

Sharon Virag

probably would I to add that.

example bringing think you for together are becoming example, the including going If that one have it, on are moving for are billing. systems to we system, they about we and to

sure participating customers billing there want over the connection Genoptix up to in just moving are these system those to can is make distraction, they So sales customers. system be from that we with that are happen, our to billing for is folks happen with one has to those has and example that their also education resetting there those

Douglas VanOort

I losing will thing correct, customers. of it’s about said one you Brian, you talked just kind

is XX of the high a customers rate don’t we customers and very expect this. lose retention of Our to as in result

Brian Weinstein

understand future about little give to continue. the those the expect think that in and were the that. XX% some up specific can think about that the more a totally clarification. bit me G&A we do sales somewhere investments talked of and you Thanks. investments quarter, of of Thinking made, and on Thanks you made, growth have you it you have No, you have I marketing should investments some types a for

Douglas VanOort

to that pace investment number investments our You have in FDA FDA making example, the added we that added are say expect submission The globally. year-over-year increase. we a facilities comply would of but Assay of continue, the We process to at included I not should investments process. with people

advanced and has so a are menu we we lot say great that investing the up-to-date investing area growth. China, sure that science. scientifically make well. that of have test our so in know in Europe, are for most as in is in in that and are we things I IT, technologically Generally happening we our people out there exploring added facilities menu and to facilities You there in Singapore, been of we technology intend would is investment

and made to see expect growth of have being some are growth in All some XXXX. we these that to related are activities of visibility these because we

pretty made So have looks like we number I normally good that a about think the it's we feel investments it though the higher than even little bit would be.

Brian Weinstein

Okay. And one I in sneak here. if last could question for me, more

kind just of of sure pacing forward, know be quarters business Thanks. we you side given that here. quarterly kind out the difficult that about pacing, the that or side, call on haven’t just - might that or for going this as to on details. as heard don’t about think make to the we I any all the we of want think legacy either of really would comps things Genoptix Just

Douglas VanOort

in don’t NeoGenomics. there that mirror quarterly What far if filings, seasonality volume is a you Genoptix in so the the are volume that think Brian had seeing can stabilization stabilized. previously revenue look the about see The I declined usual is we - is past, you Yes. the SEC of at anything Genoptix. XXXX of at legacy now pacing and that would the

there So I you alert would no that unusual to. trends are

Sharon Virag

right, I the those Yes, happens start our there related the will kick business already synergies little backend. excited we will immediately will a one when versus payers those over know just and of this in. Revenue to is are to compression, to unfold come so quickly that that plan and bad about really the synergies are we a thing trend it, think towards so great overtime overtime, is think news seeing to have in bit Genoptix really deal about be a we on was we will you them expect moving that contracted interested

a see synergies. meet they two early compression those we bit but as possible, trending will the for start that you little tracks, earlier as will so of different than So that on hope are

Brian Weinstein

guys Very Great. much. so you Thank helpful.

Douglas VanOort

Thank you Brian.


Raymond Please sir. ahead the question go with Hsu of line Our comes James. next from John

John Hsu

morning. Good

On for a pacing how Genoptix, the sales details expect be think just closed maybe about just you synergies have XXXX as me. help do exiting sharing XXXX, for of are of deal year, Just since integration, that and synergy the this made in you. couple for synergy with have moving Thank expectations progress targets then for you now we throughout for the the largely the do the very and run a the if force cost us along rate could I or maybe that there think will you helpful you around missed timelines providing on but specific complete do - XXXX targets be integration timelines. and any obviously that some into year well had process, integration XXXX cost about changes to your as this

Sharon Virag


$XX things we including are bit So of happen have looking over happen a million, have at time. mostly the that back little three takes system period some loaded, to and still is to year rationalization some because that big

So of that there is portion this year. some in

are but out it’s giving years, not the not far. but three over straight We it’s the amount, that exactly exact not lined off

covered calculated about about it EBITDA. the with of originally about their was think revenue compression by $XX existing million half If that you

us offset zero synergies it on this So is enough and to then back business. year flat to EBITDA to get to the to gets Genoptix our talks that EBITDA first recognize

our the that So working towards as for are you think target goal. of and that could year we

Douglas VanOort

anything, discussed are we everything John feeling on-track. like and line estimates synergy our we bottom haven’t The which changes is before seen original we that is

Sharon Virag

as think timing timing question. right, get I the to well and your we Yes as expected

John Hsu

great. me. And Okay more from one just

business. speak you point, on the at side just talked your wanting about to for can continue Just obviously to services pharma M&A the this appetite to of you M&A, grow

us and on any maybe pipeline. So thoughts give your just color could you the updated

Douglas VanOort

there M&A, our through We and both remain looking very interested at organically in deals. and growing business out pharma we are

not currently business. the in acquire to We looking clinical are

our Genoptix full and continue to looking got integration, to with pharma have through we are well right at intend acquisitions but We business build organically. as that deals now hands we as

John Hsu

all Great. me. from much. you Thank That is so


[Operator Analysis. to Munda Instructions] Joe We will with First next go

Joseph Munda

morning. Good

of regards look backlog one like services in follow-up there your phase in of another? I a - So granularity on to the give in services is questions what thoughts real give some quick. first and you terms mix like volume growth trial if XXXX? the or the stage was that test can you color the XXXX or color us fund what heavily there. quick wondering with mix here, putting weighted expectations trial would would of you pharma looks are integration Genoptix could out the some Two us And the of on in or business Thanks. then towards terms

Douglas VanOort

it pharma I mix the services Joe. by Sure George about start the to then addressing to question and will backlog. test over talk

in In solid of mix as oppose mix, more seeing because a of are a testing of XXXX tumor. test terms Genoptix - we

We think as the in similar are in panels. than testing, also seeing Other mix before. trends test sequencing have the have as seeing growth past I we particularly we more is are molecular had that next-generation what in we terms of of and kinds

of In George. terms pharma

George Cardoza


to up gone more shift We is and of would you zero and to II see did one enough able of molecule, Phase to if XXXX III in trial bit be and FDA the a trials and or sort quite really all we really scale clinical approval way a of the the longer discovery the what process. a across, and have handle all is through large have is do to of research we that be and the through way Phase discovery I, our III, to II the objectives the

now. all Now way those our we are and obviously trial we that happy longer terms a backlog, just III through the to but that in little able these looks in having revenue of that Phase are can the side take be of bit trials II recognition

Joseph Munda

Thank Okay. you.


Knight Next will Janney with to Paul we Montgomery. go

Paul Knight

question Hi that thoughts would year you. Doug, the pricing for what excluding business first for are your better the environment two this Genoptix is to things my seems one core and better be be

Douglas VanOort

tracks, would decline I these the which the part of our is NeoGenomics that Yes. at competitive and the sometimes very on [TAMA] not But gain there It’s very we larger GPOs as pricing Paul by impacting always, in kinds the environment (Ph) on stabilization physician price would volume is significant entering fee we agreement. prime say of market. that is say larger I an not into industry large is and impact better. these and schedule. necessarily we some modest we engage some seeing as in as see are

have appropriate us. think still that decline laid seems X% the to kind for the having of think guidance behind ago, So that days the declines generally now I we experienced years us. But X% of significant we there are have of out to we

Paul Knight

regarding is be you on update would the PPD Doug PDD separate build JV. other collaboration, it get or the backlog we to from that then are that due could an And seeing that,

Robert Shovlin

again the committed we we have with Yes. the clients few we can’t we progress, it, together very sides both bids and finish a wins made pleased together significant are to but are worked across have have to had we continue specific alliance, make We out both also really backlog, in line. and actually a some

So we pleased with but can’t we the on alliance, it. out are numbers really call specific

Paul Knight


Douglas VanOort

Paul. you Thank


go go ahead. we will with Benchmark Next Please to Company. Jackson Bruce

is line open. now Your

Bruce Jackson

opportunity part market the solid the do more oncology you think and business and bit from two Genoptix just can did your morning, a Good have that include number, nice revenue quoted talk a the about I increase community there? tumor solid quarter. you little you got on revenue then can tumor any question synergy

Douglas VanOort

on the our Bruce did which that is do hem Genoptix some Genoptix include model. original not in that but there will Yes. business expect be some include numbers solid revenue we the deal we side, do from tumor, most but of synergies, coming

being to base. customer testing to of result tumor a As able provide solid the Genoptix

with the representatives we As pursuing all learned actively tumor testing. we met was solid Genoptix, of not at Genoptix that

solid kind know that As provide those to NeoGenomics to customers. have tumor able we strong we very at a testing and are business of you

is synergy. So revenue we that think

Bruce Jackson

you. Thank Alright.

Douglas VanOort

are You welcome.


questions. to we And back Mr. have I no we closing appears the VanOort, signal remarks group. web additional or perhaps the turn it for [Operator from will any or group received it any Instructions] if

William Bonello

no questions. Thank received you. We have web

Douglas VanOort

thank and Jim. Phil you thanks Okay,

the around recognize of in NeoGenomics, you Company. end who world-class NeoGenomics call, our time want for world testing on considering genetics everyone behalf like thank bye. approximately a in and dedication would morning, we I And investment you their members NeoGenomics for team, listening commitment an those team Good building Before our for are cancer X,XXX we thank their joining to interest to the this I your to us Company. are of the or investors for


you Ladies all thank teleconference. we conclude and do your participation. gentleman for And this does today's

disconnect you. your now and rest Thank of day. the may lines enjoy You your